BPI Family Bank Vs

BPI Family Bank vs.
Amado Franco November 23, 2007

Petitioner: BPI Family Bank
Respondents: Amado Franco
CA
Facts:
Tevesteco Arrastre-Stevedoring (Tevesteco) opened a savings and current account with BPI-FB. First Metro
Investment Corp (FMIC) also opened a time deposit account with the same branch of BPI-FB (San Francisco
Del Monte) with a deposit of 100M.
Subsequently, Franco opened 3 accounts, a current, savings, and time deposit with BPI-FB. The current and
savings accounts were funded with an initial deposit of 500,000 each, while the time deposit had 1M.
The total amount of 2M is traceable to a check issued by Tevesteco allegedly in consideration of Franco’s
introduction of Eladio Teves, who was looking for a conduit bank to facilitate Tevesteco’s business
transactions to Jaime Sebastian, who was the BPI-FB’s branch manager. The 2M is part of the 80M debited
by BPI-FB from FMCI’s time deposit account and credited to Tevesteco’s account pursuant to an Authority to
Debit alleged signed by FMCI’s officers which appears to be forged.
Antonio Ong, upon being shown the Authority to Debit, personally declared his signature to be a forgery.
Unfortunately, Tevesteco had already effected several withdrawals from its current account.
Then, BPI-FB through Senior VP, Severino Coronacion, instructed Jesus Arangorin to debit Franco’s savings
and current accounts for the amounts received therein but the latter’s time deposit account could not be
debited due to computer limitations.
In the meantime, 2 checks were drawn by Franco against his BPI-FB current account were dishonored upon
presentment for payment and stamped with a notation “account under garnishment”.
Apparently, Franco's current account was garnished by virtue of an Order of Attachment issued by the RTC
of Makati which had been filed by BPI-FB against Franco et al. to recover the P37,455,410.54 representing
Tevesteco's total withdrawals from its account.
ANG DAMI NANGYARI AFTER DI KO NA RIN ALAM PERO ETO SUMMARY:
 The dishonored checks were issued by Franco and presented for payment at BPI-FB prior to Franco’s
receipt of notice that his accounts were under garnishment.
 The Order Lifting the Order of Attachment was served on BPI-FB on even date, with Franco
demanding the release to him of the funds in his savings and current accounts. Jesus Arangorin, BPI-
FB’s new manager, could not forthwith comply with the demand as the funds, as previously stated,
had already been debited because of FMIC’s forgery claim. As such, BPI-FB’s computer at the SFDM
Branch indicated that the current account record was "not on file."
 Franco then pre-terminated his time deposit account. . BPI-FB deducted the amount of ₱63,189.00
from the remaining balance of the time deposit account representing advance interest paid to him.
 These transactions spawned a number of cases, some of which we had already resolved.
 FMIC filed a complaint against BPI-FB for the recovery of 80M. BPI was found liable to FMIC for the
debited amount in its time deposit.
 BPI-FB filed several civil and criminal cases against those who believed to be the perpetrators of the
multi-million peso scam.
 Consequently, in light of BPI-FB’s refusal to heed Franco’s demands to unfreeze his accounts and
release his deposits therein, the latter filed a case.
 BPI insisted that it was correct in freezing the accounts of Franco and refusing to release his deposits,
claiming that it had a better right to the amounts which consisted of part of the money allegedly
fraudulently withdrawn from it by Tevesteco and ending up in Franco’s accounts.
 RTC of Manila rendered a judgment in favor of Franco and ordered BPI to pay the former sums of
money.
 Both parties appealed before the CA. CA affirmed.
Issue: WON BPI had a better right to the deposits in
Franco’s accounts?- NO
Ruling:
NO.
Deposit of money in banks is governed by the Civil Code provisions on simple loan or mutuum. As there is a
debtor-creditor relationship between a bank and its depositor, BPI-FB ultimately acquired ownership of
Franco’s deposits but such ownership is coupled with a corresponding obligation to pay him an equal
amount on demand.
BPI argues that the legal consequences of FMIC’s forgery claim is that the money transferred by BPI-FB to
Tevesteco is its own and that since it was able to recover possession of the money when it was
redeposited by Franco, BPI had the right to set up its ownership and freeze Franco’s accounts.
BPI likened it to that of an owner of personal property who regains possession after it is stolen under Article
5591of the Civil Code.
SC found BPI’s argument unsound. Movable property mentioned in Art 559 pertains to a specific or
determinate thing which can be distinguished from others of the same kind.
While money is characterized as a movable, it is generic and fungible. Money bears no earmarks of
peculiar ownership, and this characteristic is all the more manifest in the instant case which involves
money in a banking transaction gone awry. Its primary function is to pass from hand to hand as a
medium of exchange, without other evidence of its title.
Money, which had passed through various transactions in the general course of banking business, even
if of traceable origin, bears no earmarks of peculiar ownership.
Art 559 permits the owner to recover the exact same movable while BPI is claiming ownership of the
equivalent amount of money which had passed from one account to another. Although BPI owns the deposits
in Franco’s accounts, it cannot prevent him from demanding payment of BPI’s obligation by drawing checks
or asking for the release of the funds in his account. He has every right as a creditor to expect that those
checks would be honored by BPI as debtor. There is no indubitable evidence establishing Franco’s
participation in the forgery so he remains an innocent party.
More importantly, BPI-FB does not have a unilateral right to freeze the accounts of Franco based on its mere
suspicion that the funds therein were proceeds of the multi-million peso scam Franco was allegedly involved
in.
To grant BPI-FB, or any bank for that matter, the right to take whatever action it pleases on deposits which it
supposes are derived from shady transactions, would open the floodgates of public distrust in the banking
industry.
*tapos SC mentioned ruling sa Simex: In every case, the depositor expects the bank to treat his account with
the utmost fidelity, whether such account consists only of a few hundred pesos or of millions. The bank must
record every single transaction accurately, down to the last centavo, and as promptly as possible. This has to
be done if the account is to reflect at any given time the amount of money the depositor can dispose of as he
sees fit, confident that the bank will deliver it as and to whomever directs.
Therefore, BPI-FB as the trustee in the fiduciary relationship, is bound to know the signatures of its
customers. Having failed to detect the forgery in the Authority to Debit, BPI cannot now shift liability
thereon to Franco and other payees of checks issued by Tevesteco or prevent withdrawals from their
respective accounts.
BPI, which made the present predicament, must bear the resulting loss or inconvenience.
Petitioner partially granted.

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BPI Family Bank vs.

Amado Franco November 23, 2007

ANG DAMI NANGYARI AFTER DI KO NA RIN ALAM PERO ETO SUMMARY:

Petitioner partially granted.

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