MANILA LIGHTER TRANSPORTATION, INC. vs. CA - G.R. No. L-50373

MANILA LIGHTER TRANSPORTATION, INC. vs. CA

and CHINA BANKING CORPORATION

G.R. No. L-50373         February 15, 1990

Manila Lighter Transportation issued 49 checks to its customers in payment of brokerage or lighterage services and were all delivered to its collector, Augusto Perez. Upon forged indorsements of the company’s General Manager, Luis Gaskell, the checks found their way to the accounts of third persons and were later withdrawn. A complaint to recover the value of the checks were filed against China Bank. Bank denied liability.

Issue: Whether or not the bank is negligent as to bear the loss resulting from the checks with forged indorsements.

Held: Since Manila Lighter Transportation was not a client of the bank, the latter had no way of ascertaining the authenticity of its indorsements on the checks which were deposited in the accounts of third persons (Ko Lit and Cao Pek) in said bank. The bank was not negligent because, in accordance with banking practice, it caused the checks to pass through the clearing house before it allowed their proceeds to be withdrawn by the depositors.