Samsung Construction Company vs.

Far East Bank and Trust Held: Far East Bank is liable for reimbursement. Sec. 23 of the Negotiable Instrument Law
Samsung Construction maintains an account with the Far East Bank, having its project
manager Jong as its sole signatory, while the checks remained in custody of the company
accountant Kyu. On March 1, 1992, Roberto Gonzaga presented a check for payment worth
P999,500.00 payable to CASH drawn against the companys account.
After checking the balance of the account, bank teller Justiani compared the signature
appearing in the check and the signature specimen of Jong. Being satisfied, she asked
Gonzaga to present IDs.
(as bank policy: if check exceeds 100K, 2 bank officers must approve) Teller forwarded the
check to the Senior Assistant Cashier Velez. Velez turned the check to Shirley Syfu, another
bank officer for approval.
states that a forged signature makes the instrument wholly inoperative.
General Rule: If payment is made the drawee (bank) cannot charge it to the drawers
account.
The fact that the forgery is clever is immaterial. The forged signature may so closely
resemble the genuine as to defy detection by the depositor himself. And yet, if the bank
pays the check, it is paying out with its own money and not of the depositors.
Exception: when negligence can be traced on the part of the drawer whose signature was
forged.
The accusation of negligence on the part of Samsung was not clearly proven.

Syfu then noticed that Jose Sempio III ("Sempio"), the assistant accountant of Samsung The bank complied with its own internal rules prior to paying out on the questionable
Construction, was also in the bank. Sempio was well-known to Syfu and the other bank check. Yet, there are several troubling circumstances that lead the court to believe that the
officers, he being the assistant accountant of Samsung Construction. Syfu showed the bank itself was remiss in its duty.
check to Sempio, who vouched for the genuineness of Jongs signature. Satisfied with the
1. The fact that the check was made out in the amount of nearly one million pesos
genuineness of the signature of Jong, Syfu authorized the banks encashment of the check
and is payable to cash. it is not ordinary business practice for a check for such
to Gonzaga.
large amount to be made payable to cash or to bearer.
2. Gonzaga, a stranger to the bank, did not carry with him any written proof that he
The following day Kyu examined the balance of the bank account and discovered that a
was authorized by Samsung Construction to encash the check.
check was encashed and that the last black check was missing. Jong went to the bank and
3. Velez tried to call Jong, but failed. She added that calling the issuer or drawer of
upon learning of the transaction he was supposedly told by the bank manager that the
the check to verify the same was not part of the standard procedure of the bank,
amount would be reimbursed.
but an "extra effort. STILL PAID OUT THE CHECK
4. Bank alleges that Sempio was well-known to the bank officers. Velez admitted that
A case was the filed for qualified theft against Sempio.
she did not know Sempio personally, and that the Bank did not present other
Samsung Construction demanded for the bank to credit back the amount. The bank witnesses
responded that it is still conduction for investigation and so it filed a complaint for violation
The irregular circumstances attending the presentment of the forged check should have
of Sec. 23 of the Negotiable Instruments Law.
put the bank on the highest degree of alert.
Issue: Whether or not Far East Bank is liable to reimburse Samsung for cashing out the
forged check, which was drawn from the account of Samsung