JAI ALAI V. BPI

66 SCRA 29

FACTS:

Checks were deposited by petitioner in its current account with the bank.  These  checks  were  from  a  certain  Ramirez,  a  consistent  better  in  its games,  who  was  a  sales  agent  from  Inter-Island  Gas.    Inter-Island  later found  out  that  of  the  forgeries  committed  in  the  checks  and  thus,  it informed all the parties concerned.  Upon the demands on the bank as the collecting bank, it debited the account of petitioner.  Thereafter, petitioner tried  to  issue  a  check  for  payment  of  shares  of  stock  but  such  was dishonored for insufficient funds.  It filed a complaint against the bank.
 

HELD:

Respondent bank acted within legal bounds when it debited the account of petitioner.    When  the  petitioner  deposited  the  checks  to  its  account,  the relationship created was one of agency still and not of creditor-debtor.  The bank was to collect from the drawees of the checks with the corresponding
proceeds.   
 
The Bank  may  have  the  proceeds  already  when  it  debited  the  account  of petitioner.  Nonetheless, there is still no creditor-debtor relationship. 

Following Section 23, a forged signature is wholly inoperative and no right to discharge it or enforce its payment can be acquired through or under the forged  signature  except  against  a  party  who  cannot  invoke  its  forgery  or want  of  authority.    It  stands  to  reason  that  as  a  collecting  bank  which
indorsed  the  checks  to  the  drawee-banks for  clearing,  should  be  liable  to the latter for reimbursement for the indorsements on the checks had been forged prior to their delivery to the petitioner.  The payments made by the drawee   banks   to   respondent   were   ineffective—the   creditor-debtor relationship hadn’t been validly effected.