Ilusorio VS Ca

ILUSORIO VS.
CA
G.R. NO. 139130 NOVEMBER 27, 2002 QUISUMBING, J.
FACTS:
Petitioner Ramon Ilusorio is a prominent businessman who managed several corporations. He

was a depositor in good standing of respondent bank, the Manila Banking Corporation. As he
was then running 20 corporations and was going out of the country, he entrusted to his
secretary, Katherine Eugenio, his credit cards and his checkbooks with blank checks.
Due to this, Eugenio was able to encash and deposit to her personal account about seventeen
(17) checks drawn against the account of Ilusorio at the respondent bank, Manila Banking
Corporation, with an aggregate amount of P119,634.34. Such fact was not known to Ilusorio,
until a business partner asked him whether he had entrusted his credit card to his secretary
because the said partner had seen her used the same. Prompted by this, he was minded to
verify the records of his account. Thereafter, Ilusorio fired Eugenio and filed a case of estafa
thru falsification. Consequently, the bank also filed a case of estafa thru falsification of
commercial documents against Eugenio on the basis of petitioner’s statement that his
signatures in the checks were forged.
Petitioner then requested the bank to credit back and restore to its account the value of the
checks which were wrongfully encashed but the latter refused; hence, the instant case.
At the trial, petitioner testified on his own behalf, attesting to the truth of the circumstances
and how he discovered the alleged forgeries. Several employees of Manila Bank testified that
it is the bank’s standard operating procedure that whenever a check is presented for
encashment or clearing, the signature on the check is first verified against the specimen
signature cards on file with the bank.
Manila Bank also sought the expertise of the National of Investigation (NBI) in determining
the genuineness of the signatures appearing on the checks. The NBI then suggested that
petitioner be asked to submit seven (7) or more additional standard signatures but petitioner
however, failed to comply with his request.
RTC and CA dismissed the case for there is no sufficient basis on the plaintiff’s cause.
ISSUE:
WON petitioner has a cause of action against private respondent Manila Bank.
WON private respondent in filing an estafa case against petitioner’s secretary is barred from
raising the defense that the fact of forgery was not established.
RULING:
On the first issue, the Court ruled that petitioner has no cause of action against Manila Bank.
To be entitled to damages, petitioner has the burden of proving negligence on the part of the
bank for failure to detect the discrepancy in the signatures on the checks. It is incumbent
upon petitioner to establish the fact of forgery, by submitting his specimen signatures and
comparing them with those on the questioned checks. Petitioner failed to submit additional
specimen signatures as requested by the NBI from which to draw a conclusive finding
regarding forgery. The Court of Appeals found that petitioner, by his own inaction, was
precluded from setting up forgery.
Moreover, petitioner’s contention that Manila Bank was remiss in the exercise of its duty as
drawee lacks factual basis. Consistently, the CA and the RTC found that Manila Bank
employees exercised due diligence in cashing the checks. According to the appellate court,
the employees of the bank exercised due diligence in the performance of their duties. As
borne by the records, it was petitioner, not the bank, was negligent. In this case, it appears
that petitioner accorded his secretary unusual degree of trust and unrestricted access to his
credit cards, passbooks, check books, bank statements, including custody and possession of
cancelled checks and reconciliation of accounts, which caused him added injury. Petitioner’s
failure to examine his bank statements appears as the proximate cause of his own damage.
Petitioner further contends that under Section 23 of the Negotiable Instruments Law a forged
check is inoperative, and that Manila Bank had no authority to pay the forged checks. True,
it is a rule that when a signature is forged or made without the authority of the person whose
signature it purports to be, the check is wholly inoperative. No right to retain the instrument,
or to give a discharge therefor, or to enforce payment thereof against any party, can be
acquired through or under such signature. However, the rule does provide for an exception,
namely: “unless the party against whom it is sought to enforce such right is precluded from
setting up the forgery or want of authority.” In the instant case, it is the exception that
applies. In our view, petitioner is precluded from setting up the forgery, assuming there is
forgery, due to his own negligence in entrusting to his secretary his credit cards and
checkbook including the verification of his statements of account.
On the second issue, the fact that Manila Bank had filed a case for estafa against Eugenio
would not estop it from asserting the fact that forgery has not been clearly established.
Petitioner cannot hold private respondent in estoppel for the latter is not the actual party to
the criminal action. Further, as petitioner himself stated in his petition, respondent bank filed
the estafa case against Eugenio on the basis of petitioner’s own affidavit, but without
admitting that he had any personal knowledge of the alleged forgery. It is, therefore, easy to
understand that the filing of the estafa case by respondent bank was a last ditch effort to
salvage its ties with the petitioner as a valuable client, by bolstering the estafa case which he
filed against his secretary.

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ILUSORIO VS.

Petitioner Ramon Ilusorio is a prominent businessman who managed several corporations. He

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