LAND BANK OF THE PHILIPPINES v. NARCISO L. KHO G.R. No. 205839, Jul !, 20"# BRION, J. F$%&'( Narciso Narciso L. Kho (Kho) purchased purchased a manager’s manager’s check check from from Land Bank of the Philippines (LBP) worth Php 25!!!!!!.!! paid using the mone" from his sa#ings account in the same $ank. %he check was purchased in order to negotiate a deal with &ed 'range. LBP ga#e Kho the check and a photocop" of the check. %he photocop" was gi#en to &ed 'range. %he deal $etween Kho and &ed 'range did not push through. &ud" edel (representing &ed 'range) went to LBP to negotiate the check LBP cleared the check and notied Kho of the transaction. Kho was surprised as the original check was still with him. *t turns out that the check negotiated $" edel with LBP is spurious. Kho tried to reco#er the Php 25!!!!!!.!! from LBP $ut the latter claims that the former was negligent for gi#ing edel the photocop" of the check which was used to make the spurious check and thus the" cannot $e held lia$le for the lost amount. I''u)( +hether or not LBP should pa" for the Php 25!!!!!!.!! H)l*( %he genuine check No. !,-! remained in Kho’s possession the entire time and Land Bank admits that the check it cleared was a fake. +hen Land Bank’s //0 forwarded the deposited check to its 1raneta $ranch for inspection its ocers had e#er" opportunit" to recogni3e the forger" of their signatures or the falsit" of the check. +hether $" error or neglect the $ank failed to do so which led to the withdrawal and e#entual loss of the Php 25!!!!!!.!!. %his is the pro4imate cause of the loss. Land Bank $reached its dut" of diligence and assumed the risk of incurring a loss on account of a forged or counterfeit check. ence it should su6er the resulting damage. +e cannot agree with the Land Bank and the &%/’s positions that Kho is prec preclu lude ded d from from in#o in#oki king ng the the for forger" ger". 1 draw drawer er or a depo deposi sito torr of the the $ank $ank is precluded from asserting the forger" if the drawee $ank can pro#e his failure to e4ercise e4ercise ordinar" care and if this negligence su$stantiall" contri$uted to the forger" or the perpetration of the fraud. %he $usiness of of $anking is im$ued with with pu$lic interest7 interest7 it is an industr" where where the general pu$lic’s trust and condence in the s"stem is of paramount importance. /onse8uentl" $anks are e4pected to e4ert the highest degree of if not the utmost diligence. %he" are o$ligated to treat their depositors’ accounts with meticulous care alwa"s keeping in mind the duciar" nature of their relationship.
