AMERICAN BANK V.

MACONDRAY- FORGED
INDORSEMENTS
4 PHIL 695
FACTS:
MANILA, P. I., August 12, 1902.

$300.00

At sight pay to my order three hundred dollars, value
received, and charge
to my account.

V. S. WOLFF.

To F. H. TAYLOR & Co.,
Louisville, Kentucky.

No ................................

[Indorsements.]

V. S. Wolff. The signature is O. K. payment guaranteed.
Protest, demand,
and notice of nonpayment waived. Macondray &
Company.

Pay to First National Bank of San Francisco, or orde
r. American Bank,
Manila, P. I. H. B. Mulford, cashier.

Pay to 3rd National Bank or order. The First National
Bank of San
Francisco. James K. Lynch, cashier.


American Bank claims the right to recover from Wolff the
amount of the bill
of exchange upon the theory that Macondray
guaranteed the payment of
the instrument. This was refuted by Macondray by sayin
g that it didn't
guarantee the payment of the instrument. Instead, it onl
y certified the signature of Wolff and that the statement
payment guaranteed xxx was not written on said
indorsement at the time it signed the firm name.
HELD:
An examination of the alleged indorsement of Macondray
& Co. which appeared upon the said bill of
exchange at the time of the trial, and the
indorsement of said company at the time of the protest
of said bill of exchange, shows beyond peradventure of
doubt that the contention of the
defendant is true, and that part of the indorsement
which says "Payment
guaranteed. Protest, demand, and notice of nonpayment
waived" was added by some person after the signature of the
defendant, Macondray & Co., and after the protest of said bill.
The indorsement made by Macondray
& Co. was changed, after said indorsement by said com
pany, by adding thereto the statement "Payment guaranteed.
Protest, demand, and notice
of nonpayment waived," and that the indorsement actually
made by Macondray & Co. was in the following form:

V. S. Wolff. The signature is O. K. Macondray & Co.

The liability of an indorser of a bill of exchange, after du
e protest and
notice of nonpayment and dishonor, is the same as that
of the original obligors on such a contract, and any material
alteration in the terms of this contract by the holder of the
same, without the consent of the obligor, will relieve such
obligor from all liability thereon.

The original indrosement then of the company was for the
purpose only of assuring the American Bank that the
signature of Wolff was genuinethat is to say, that the person
whom he represented himself to be. It was an indorsement
for identification of the person only and not for the purpose of
incurring liability to the payment of such bill of exchange.




BANCO ATLANTICO V. AUDITOR GENERAL
81 SCRA 335


FACTS:
Boncan was the Finance Officer of the Philippine Embassy in
Madrid who on many occasions negotiated with Banco
Atlantico checks, allegedly endorsed to her by the
embassy. On these occasions, the bank allowed the payment
of the checks, notwithstanding the fact that the drawee bank
has not yet
cleared the checks for collection. This was premised on
the finding that
Boncan had special relations with the employees of the
bank. And that upon presentment to the drawee bank, the
checks were dishonored due to non-
acceptance allegedly on the ground that the drawer has
ordered the
stoppage of
payment. This prompted Banco Atlantico to collect from
the Philippine Embassy for the funds released to Boncan but
the latter
refused. This eventually led to filing of money claim of t
he bank with the Auditor General.


HELD:
On whether or not Banco Atlantico was a holder in due
course, it is not. Following the decision of the Auditor G
eneral in denying the claim of the bank, the checks were
demand notes. It should have been put on guard when
Boncan negotiated the checks with them and subsequently
deposited
the same to her account. Even though it were demand
notes, she instructed the bank that the same be not
presented for collection till a later date. The fact that the
amount was quite big and it was the payee herself who made
the request that the same be not presented for collection until
a
fixed date in the future was proof of a glaring infirmity o
r defect in the
instrument. It loudly proclaims Take me at your own ris
k. It was obvious by then that the bank had knowledge of
the infirmity or defect of
the checks. Furthermore, what it did when it allowed pa
yment before
clearing is beyond the normal and ordinary banking pract
ice especially when the bank involved is a foreign bank and
the amounts involved were large. Boncan wasn't even a client
of the bank but was someone who had special relations with
its officers.

In view of the foregoing, the embassy as the drawer of
the 3 checks in question cannot be held liable. It is apparent
that the said 3 checks were (fraudulently altered) by Boncan
as to their accounts and therefore wholly inoperative (note:
should be avoided).