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    Petitioner: Jai-Alai Corporation of The Philippines Respondent: Bank of The Philippine Island Session: 2 Topic

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    Rona Tumagan
    The petitioner Jai-Alai deposited several checks from a customer into its account at the respondent BPI bank. These checks were later found to have forged endorsements. BPI debited Jai-Alai's account for the amount of the checks. The Supreme Court ruled that BPI acted properly in debiting the account and was not liable to return the funds, as the relationship between Jai-Alai and BPI when the checks were deposited was one of agency, not creditor-debtor. As the endorser of checks with forged signatures, Jai-Alai was deemed to have warranted that the checks were genuine under the Negotiable Instruments Law, even though it was negligent in accepting checks made

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    Petitioner: Jai-Alai Corporation of The Philippines Respondent: Bank of The Philippine Island Session: 2 Topic

    Uploaded by

    Rona Tumagan
    36 views2 pages
    The petitioner Jai-Alai deposited several checks from a customer into its account at the respondent BPI bank. These checks were later found to have forged endorsements. BPI debited Jai-Alai's account for the amount of the checks. The Supreme Court ruled that BPI acted properly in debiting the account and was not liable to return the funds, as the relationship between Jai-Alai and BPI when the checks were deposited was one of agency, not creditor-debtor. As the endorser of checks with forged signatures, Jai-Alai was deemed to have warranted that the checks were genuine under the Negotiable Instruments Law, even though it was negligent in accepting checks made

    Original Title

    38. Jai Alai vs BPI

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    The petitioner Jai-Alai deposited several checks from a customer into its account at the respondent BPI bank. These checks were later found to have forged endorsements. BPI debited Jai-Alai's account for the amount of the checks. The Supreme Court ruled that BPI acted properly in debiting the account and was not liable to return the funds, as the relationship between Jai-Alai and BPI when the checks were deposited was one of agency, not creditor-debtor. As the endorser of checks with forged signatures, Jai-Alai was deemed to have warranted that the checks were genuine under the Negotiable Instruments Law, even though it was negligent in accepting checks made

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    36 views2 pages

    Petitioner: Jai-Alai Corporation of The Philippines Respondent: Bank of The Philippine Island Session: 2 Topic

    Uploaded by

    Rona Tumagan
    The petitioner Jai-Alai deposited several checks from a customer into its account at the respondent BPI bank. These checks were later found to have forged endorsements. BPI debited Jai-Alai's account for the amount of the checks. The Supreme Court ruled that BPI acted properly in debiting the account and was not liable to return the funds, as the relationship between Jai-Alai and BPI when the checks were deposited was one of agency, not creditor-debtor. As the endorser of checks with forged signatures, Jai-Alai was deemed to have warranted that the checks were genuine under the Negotiable Instruments Law, even though it was negligent in accepting checks made

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    38.

    Jai Alai vs BPI, 66 SCRA 29


    Petitioner: JAI-ALAI CORPORATION OF THE PHILIPPINES Session: 2
    Respondent: BANK OF THE PHILIPPINE ISLAND Topic:
    FACTS: RULING:
    Jai-Alai deposited 10 checks with BPI. These checks were from
    Antonio Ramirez, a consistent bettor in its games, who was a sales No
    agent from Inter-Island Gas. The checks were all payable to Inter-
    Island Gas Service, Inc. or order. Inter-Island Gas later found out
    that all the indorsements made on the checks purportedly by its
    cashiers were forged and thus, it informed all the parties concerned.
    Upon the demands on the bank as the collecting bank, BPI debited
    the account of Jai-Alai then forwarded to it the checks containing the
    forged indorsements. Thereafter, petitioner Jai-Alai tried to issue a
    check for payment of shares of stock but such was dishonored
    for insufficient funds. Jai-Alai filed a collection of sums of money
    against BPI. The CFI and the CA dismissed the said complaint,
    hence this case.

    INSTRUMENT USED: Check

    ISSUE:
    Whether the respondent BPI is liable to return the amount debited from the account of
    the Petitioner Jai-Alai
    RATIONALE:

    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. BPI may have the proceeds already when it debited the account of petitioner.
    Nonetheless, there is still no creditor-debtor relationship.

    Following Section 23 of NIL, 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.

    Having indorsed the checks to BPI, Jai-Alai is deemed to have given the warranty prescribed in Section
    66 of the NIL that every single one of those checks "is genuine and in all respects what it purports to be."
    The depositor of a check as indorser warrants that it is genuine and in all respects what it purports to be.

    Jai Alai Corporation negligent in accepting the checks without question from Antonio Ramirez
    notwithstanding that the payee was the Inter-Island Gas Services, Inc. and it did not appear that he was
    authorized to indorse it.

    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 affected.

    DISPOSITION:
    ACCORDINGLY, the judgment of the Court of Appeals is affirmed, at petitioner's cost.
    ADDITIONAL NOTES:

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