Jai-Alai vs BPI 66 SCRA 29, 6 Aug 1975, G.R. No. L-29432

Petitioner acquired 10 checks from a certain Antonio Ramirez. The said checks were deposited by the petitioner to the respondent bank. The Respondent bank temporarily credited the said checks to the account of the petitioner. After 3 months, the checks were found out to be forged. The respondent bank debited the account of the petitioner. The petitioner filed a collection of sums of money against the respondent. The CFI and the CA dismissed the said complaint, hence this case.

Whether the respondent is liable to return the amount debited from the account of the Petitioner.

No, the respondent acted within legal bounds when it debited the petitioner’s account. When the petitioner deposited the checks with the respondent, the nature of the relationship created at that stage was one of agency, that is, the bank was to collect from the drawees of the checks the corresponding proceeds. It is true that the respondent had already collected the proceeds of the checks when it debited the petitioner’s account. Section 23 of the Negotiable Instruments Law states that “When a signature is forged or made without the authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.”

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