218 SCRA 682 (1993)


Petitioner maintains a checking with the respondent drawee Bank. After the bookkeeper prepared the checks, the completed checks were submitted to the petitioner for her signature, together with the corresponding invoice receipts which indicate the correct obligations due and payable to her suppliers.

Petitioner signed each and every check without bothering to verify the accuracy of the checks against the corresponding invoices because she reposed full and implicit trust and confidence on her bookkeeper. The issuance and delivery of the checks to the payees named therein were left to the bookkeeper.

Petitioner admitted that she did not make any verification as to whether or not the checks were actually delivered to their respective payees. Although the respondent drawee Bank notified her of all checks presented to and paid by the bank, petitioner did not verify the correctness of the returned checks, much less check if the payees actually received the checks in payment for the supplies she received.

In the course of her business operations covering a period of two years, petitioner issued, following her usual practice stated above, a total of eighty-two (82) checks in favor of several suppliers. These checks were all presented by the indorsees as holders thereof to, and honored by, the respondent drawee Bank.

Respondent drawee Bank correspondingly debited the amounts thereof against petitioner’s checking account. Most of the aforementioned checks were for amounts in excess of her actual obligations to the various payees as shown in their corresponding invoices. Practically, all the checks issued and honored by the respondent drawee Bank were crossed checks.

Aside from the daily notice given to the petitioner by the respondent drawee Bank, the latter also furnished her with a monthly statement of her bank transactions, attaching thereto all the cancelled checks she had issued and which were debited against her current account. It was only after the lapse of more than two (2) years that petitioner found out about the fraudulent manipulations of her bookkeeper.

Petitioner made a written demand on respondent drawee Bank to credit her account with the money value of the eighty-two (82) checks for having been wrongfully charged against her account. Respondent drawee Bank refused to grant petitioner’s demand.


Whether or not the negligence of the drawer is the proximate cause of the resulting injury to the drawee bank, and the drawer is precluded from setting up the forgery or want of authority.


Under Sec 23 of the NIL, forgery is a real or absolute defense by the party whose signature is forged. A party whose signature to an instrument was forged was never a party and never gave his consent to the contract which gave rise to the instrument. Thus, if a person’s signature is forged as a maker of a promissory note, he cannot be made to pay because he never made the promise to pay. However, the law makes an exception to these rules where a party is precluded from setting up forgery as a defense.

In the case at bar, petitioner admitted that the checks were filled up and completed by her trusted employee and were later given to her for her signature. Her signing the checks made the negotiable instrument complete. As a rule, a drawee bank who has paid a check on which an indorsement has been forged cannot charge the drawer’s account for the amount of said check.

An exception to this rule is where the drawer is guilty of such negligence which causes the bank to honor such a check or checks. The petitioner relied implicitly upon the honesty and loyalty of her bookkeeper, and did not even verify the accuracy of the amounts of the checks she signed against the invoices attached thereto.

Furthermore, although she regularly received her bank statements, she apparently did not carefully examine the same nor the check stubs and the returned checks, and did not compare them with the sales invoices. Thus, it is clear that under the NIL, petitioner is precluded from raising the defense of forgery by reason of her gross negligence.

*Case digest by Stephanie C. Castillo, JD-IV, Andres Bonifacio College, SY: 2019-2020