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Ilusorio vs CA

FACTS:
Ilusorio was a businessman who was in charge of 20 or so
corporations. He was a depositor in good standing of Manila
Banking Corporation. As he was in charge of a big number of
corporations, he was usually out of the country for business. He
then entrusted his credit cards, checkbook, blank checks,
passbooks, etc to his secretary, Katherine Eugenio. Eugenio was
also in charge of verifying and reconciling the statements of
Ilusorios checking account.

Eugenio was able to encash and deposit to her personal account


checks drawn against Ilusorios account with an aggregate amount
of 119K. Ilusorio didnt bother to check his statement of account
until a business partner informed him that he saw Eugenio using his
credit cards. Ilusorio then fired her and instituted criminal case of
Estafa thru falsification against Eugenio. Manila Banking Corp. also
instituted a complaint of estafa against Eugenio based on the
affidavit of Dante Razon, an employee. Razon stated that he
personally examined and scrutinized the encashed checks in
accordance with their verification procedures.

Manila Bank sought the expertise of NBI in determining the


genuineness of the checks but Ilusorio failed to submit specimen
signatures and thus, NBI could not conduct the examination.

Issue: W/N Manila Bank is liable for damages for failing to detect a
forged check

Held:

No. To be entitled to damages, Ilusorio has the burden of poving


that the bank was negligent in failing to detect the discrepancy in
the signatures on the checks. Ilusorio had to establish the fact of
forgery which he failed to do by failing to submit his specimen
signatures for NBI to conclusively establish forgery.

Furthermore, the Bank was not negligent in verifying the checks as


they verified the drawers signatures against their specimen
signatures and in doubt, referred to more experienced verifier for
further verification.

On the contrary, it was Ilusorio who was found to be negligent. He


accorded his secretary with an unusual degree of trust and
unrestricted access to his finances. Furthermore, despite the fact
that the bank was regularly sending statements of account, he
failed to check them until he found out that his secretary was using
his credit cards.

Sec. 23 of the Negotiable Instruments law provides that a forged


check is inoperative, meaning there was no right to enforce
payment against any party. But it also provides an exception:
unless the party against whom it is sought enforce such right is
precluded from setting up the forgery or want of authority. This
case falls under the exception since Ilusorio is precluded from
setting up forgery due to his own negligence considering that he
allowed his secretary access to his credit cards, checkbook, and
allowed his secretary to verify his statements of account.

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