Download 1922-Great Eastern Life Insurance Co. v. HSBC PDF

Title1922-Great Eastern Life Insurance Co. v. HSBC
TagsCommon Law Justice Cheque Forgery Negotiable Instrument
File Size31.2 KB
Total Pages3
Document Text Contents
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Melicor's signature, as an endorser, and then personally endorsed and presented it to
the Philippine National Bank where the amount of the check was placed to his credit.
After having paid the check, and on the next day, the Philippine National Bank endorsed
the check to the Hongkong and Shanghai Banking Corporation, which paid it, and
charged the amount of the check to the account of the plaintiff. In the ordinary course
of business, the Hongkong and Shanghai Banking Corporation rendered a bank
statement to the plaintiff showing that the amount of the check was charged to its
account, and no objection was then made to the statement. About four months after
the check was charged to the account of the plaintiff, it developed that Lazaro Melicor,
to whom the check was made payable, had never received it, and that his signature, as
an endorser, was forged by Maasim, who presented and deposited it to his private
account in the Philippine National Bank. With this knowledge, the plaintiff promptly
made a demand upon the Hongkong and Shanghai Banking Corporation that it should
be given credit for the amount of the forged check, which the bank refused to do, and
the plaintiff commenced this action to recover the P2,000 which was paid on the
forged check. On the petition of the Shanghai Bank, the Philippine National Bank was
made defendant. The Shanghai Bank denies any liability, but prays that, if a judgment
should be rendered against it, in turn, it should have like judgment against the Philippine
National Bank which denies all liability to either party.

Upon the issued being joined, a trial was had and judgment was rendered against
the plaintiff and in favor of each of the defendants, from which the plaintiff appeals,
claiming that the court erred in dismissing the case, notwithstanding is nding of fact,
and in not rendering a judgment in its favor, as prayed for in its complaint.


There is no dispute about any of the ndings of fact made by the trial court, and
the plaintiff relies upon them for a reversal. Among other things, the trial court says:

"Who is responsible for the refund to the drawer of the amount of the check
drawn and payable to order, when its value was collected by a third person by
means of forgery of the signature of the payee? Is it the drawee or the last
indorser, who ignored the forgery at the time of making the payment, or the
The lower court found that Melicor's name was forged to the check. "So that the

person to whose order the check was issued did not receive the money, which was
collected by E. M. Maasim," and then says:

"Now then, the National Bank should not be held responsible for the
payment made to Maasim in good faith of the amount of the check, because the
indorsement of Maasim is unquestionable and his signature perfectly genuine,
and the bank was not obliged to identify the signature of the former indorser.
Neither could the Hongkong and Shanghai Banking Corporation be held
responsible in making payment in good faith to the National Bank, because the
latter is a holder in due course of the check in question. In other words, the two
defendant banks can not be held civilly responsible for the consequences of the
falsification or forgery of the signature of Lazaro Melicor, the National Bank
having had no notice of said forgery in making payment to Maasim, nor the
Hongkong Bank in making payment to National Bank. Neither bank incurred in
any responsibility arising from that crime, nor was either of the said banks by
subsequent acts, guilty of negligence or fault."
This was fundamental error.

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