Playing safe: SC says Union Bank not liable for dishonoring check due to signature issues

The Supreme Court (SC) has absolved the Union Bank of the Philippines of civil liability for dishonoring the checks of Bulacan Integrated Wood Industries Corp. (BIWICO), due to discrepancy in the signatures.

In a recent 4-page minute resolution, the SC 1st Division affirmed the Court of Appeals’ (CA) December 5, 2012 decision to set aside a June 10, 2009 ruling by the Regional Trial Court (RTC) in favor of BIWICO.

The RTC decision earlier awarded P500,000 in temperate damages and P200,000 in exemplary damages, as well as attorney’s fees, litigation expenses and costs in favor of BIWICO.

The SC agreed with the CA that this was erroneous. Not only that, the SC ordered BIWICO to pay the costs of suit.

Records showed that BIWICO opened a checking account with the bank’s Valenzuela City branch on Juy 3, 1997. Although it submitted its articles of incorporation and by-laws, the company’s representatives were not able to fill up the blank specimen singature cards.

BIWICO issued its first check for P100,000 to a certain Jorge Salazar on December 2, 1997. It was signed by vice-president Baltazar Sy and corporate secretary Rosalinda Sy.

Since the bank had no specimen cards, it compared the signatures in the check to those in the submitted corporate documents. Finding the signatures to be different, the bank sent its marketing assistant to BIWICO’s office for the filling up of the specimen cards.

However, BIWICO’s corporate secretary told the Union Bank representatives to leave the cards because the signatories were not present. BIWICO then sent the cards, but the bank noted that the signatures were not made in the presence of its officers.

Union Bank representatives again tried to get the BIWICO signatories to sign the cards in their presence, to no avail. BIWICO also failed to submit the identification cards of its signatories.

Following this, Union Bank also dishonored a second check.

The SC said it “cannot fault” Union Bank for refusing to acknowledge the returned signature cards. It noted that the bank “exerted considerable effort” to secure the signatures by going to BIWICO’s office.

“In dishonoring the subject checks, [Union Bank] has been mindful of its fiduciary duty by observing the proper procedures and protocols when it noticed that the signatures therein and those in their files substantially differed,” read the minute resolution signed by Division Clerk of Court Librada Buena.

“It should be emphasized that part of the responsibility of respondent is to know its clients. Certainly, it cannot just honor signed cards without verifying the persons behind the signatures,” it added.

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