Ilusorio v. CA G.R. No.

139130

Nov. 27, 2002 J. Quisumbing

Topic in Syllabus: Effects of Forgery

FACTS:

1. Petitioner Ramon Ilusorio is a prominent businessman who was then running about 20
corporations and was frequently out of the country. He was a depositor of Respondent
Manila Banking Corporation (MBC).

2. Because he was very busy, Ilusorio entrusted to his secretary, Katherine Eugenio, his
credit cards and checkbook with blank checks. It was also Eugenio who verified and
reconciled the statements of said checking account.

3. From Sept. 5, 1980 to Jan. 23, 1981, Eugenio was able to encash and deposit to her
personal account about 17 checks drawn against Ilusorio’s account at MBC in an aggregate
amount of P119,634. Ilusorio did not bother to check his statement of account until a
business partner told him that he saw Eugenio use his credit cards.

4. Ilusorio filed Eugenio and filed a criminal case against her for Estafa thru Falsification.
MBC, through an affidavit executed by its employee, Dante Razon, also filed a complaint for
Estafa thru Falsification against Eugenio on the basis of Ilusorio’s statement that his
signatures on the checks were forged.

5. Ilusorio requested that MBC credit back to his account the value of the checks but the
latter refused. Hence, the instant case.

6. At the trial, several MBC employees were called as hostile witnesses. They testified that
when the checks were encashed, they followed the bank’s SOP and exercised utmost care
and diligence in verifying the signatures on the checks by comparing them with specimen
signatures they had in their files.

7. MBC sought the expertise of the NBI in determining the genuineness of the signatures.
However, the NBI said it could not conduct the examination for insufficiency of the
specimens. The NBI then suggested that Ilusorio submit 7 or more signatures. Ilusorio
failed to comply with this request.

8. The trial court dismissed the case for failure of Ilusorio to establish a cause of action. The
CA affirmed the dismissal.

ISSUES:

A. Was Ilusorio able to establish a cause of action? No. The fact that the signatures were
forged was not proved.

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B. Whose negligence was the proximate cause of the injury? Ilusorio’s.

C. Did MBC’s act of filing a criminal case for Estafa against Eugenio operate to estop it from
denying in the civil case that the signatures were forged? No.

RATIO:

A. The fact that the signatures were forged was not proved in the civil case.

1. Ilusorio had 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 also incumbent upon him to establish
the fact of forgery.

2. The NBI examination could have established that fact, but Ilusorio failed to comply with
the NBI’s request.

B. It was Ilusorio’s negligence, not MBC’s, that was the proximate cause of his injury.

1. Negligence is the omission to do something which a reasonable man, guided by those

considerations which ordinarily regulate the conduct of human affairs, would do, or the
doing of something which a prudent and reasonable man would do. Meanwhile, proximate
cause is that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result would not have
occurred.

2. MBC employees exercised due diligence in cashing the checks. The bank employees did
not have a hint as to Eugenio’s modus because she was a regular customer of the bank,
having been designated by Ilusorio himself to transact in his behalf.

3. The CA found that the employees, in verifying the checks, went further by requiring a
more experienced person to verify the signatures and calling up the depositor to confirm
the transaction.

4. It is possible that the verifiers of MBC might have made a mistake in failing to detect any
forgery. However, a mistake is not equivalent to negligence if they were honest mistakes.

5. It was Ilusorio who was negligent. It appears that he accorded his secretary an 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. He also entrusted to her the verification and reconciliation of his account.
Furthermore, while the bank was sending him the monthly statements of accounts, he was
not personally checking the same. Thus, he had all the opportunities to verify his account as
well as the cancelled checks – month after month. Ilusorio’s failure to examine his bank
statements was the proximate cause of his injury.

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6. In view of Article 2179 of the New Civil Code, when the plaintiff’s own negligence was the
immediate and proximate cause of his injury, no recovery could be had for damages.

7. While NIL 23 provides that a forged check is wholly inoperative and that MBC should not
have paid therefor, the rule admits of an exception: “unless the party against whom it is
sought to enforce such right is precluded from setting up the forgery or want of authority.”
Ilusorio is precluded from setting up the forgery due to his own negligence in entrusting to
his secretary his credit cards and checkbook including the verification of his statements of
accounts.

C. The filing by MBC of the criminal case does not hold it in estoppel.

1. MBC cannot be held in estoppel because it is not the actual party to the criminal action. In
a criminal action, the State is the plaintiff.

2. Further, as Ilusorio himself stated in his petition, MBC filed the Estafa case against
Eugenio on the basis of Ilusorio’s own affidavit. Therefore, MBC’s employees could not have
had any personal knowledge of the fact of 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.”

Fallo: Petition denied. Decision affirmed.

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