BPI FAMILY BANK - v - FRANCO, CA
THIRD DIVISION, G.R. No. 123498, November 23, 2007, NACHURA, J.:
Banks are exhorted to
treat the accounts of their depositors with meticulous care and utmost fidelity.
Facts:
This case has its genesis in an
ostensible fraud perpetrated on the petitioner BPI Family Bank (BPI-FB)
allegedly by respondent Amado Franco (Franco) in conspiracy with other
individuals, some of whom opened and maintained separate accounts with BPI-FB,
San Francisco del Monte (SFDM) branch, in a series of transactions.
1. In 1989, Tevesteco
Arrastre-Stevedoring Co., Inc. (Tevesteco) opened a savings and current account
with BPI-FB.
2. Soon thereafter,
First Metro Investment Corporation (FMIC) also opened a time deposit account with
the same branch of BPI-FB with a deposit of P100,000,000.00, to
mature one year thence.
3. Subsequently, Franco
opened 3 accounts, namely, a current, savings, and time deposit, with
BPI-FB[1].
4. It appears, however,
that the signatures of FMICs officers on the Authority to Debit were forged.
5. Antonio Ong, upon being shown the
Authority to Debit, personally declared his signature therein to be a forgery.
6. Unfortunately, Tevesteco had already effected
several withdrawals from its current account (to which had been credited
the P80,000,000.00 covered by the forged Authority to Debit) amounting
to P37,455,410.54, including the P2,000,000.00 paid to
Franco.
7. impelled by the need
to protect its interests in light of FMICs forgery claim, BPI-FB, thru its
Senior Vice-President, Severino Coronacion, instructed Jesus Arangorin to
debit Francos savings and current accounts for the amounts remaining therein.
However, Francos time deposit account could not be debited due to the capacity
limitations of BPI-FBs computer.
8. In the meantime, two
checks drawn by Franco against his BPI-FB current account were dishonored upon
presentment for payment, and stamped with a notation account under garnishment.
9. Apparently, Francos
current account was garnished by virtue of an Order of Attachment issued by the
Makati RTC(Makati Case), which had been filed by BPI-FB against Franco et
al., to recover the P37,455,410.54 representing Tevestecos
total withdrawals from its account.
10. Notably, the
dishonored checks were issued by Franco and presented for payment at BPI-FB
prior to Francos receipt of notice that his accounts were under
garnishment. In fact, at the time the Notice of Garnishment was served on
BPI-FB, Franco had yet to be impleaded in the Makati case where the
writ of attachment was issued
11. It was only through
the service of a copy of the 2nd Amended Complaint in Civil Case, that Franco
was impleaded in the Makati case. Immediately, upon receipt of such
copy, Franco filed a Motion to Discharge Attachment which the Makati RTC
granted.
12. 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.
13. Jesus Arangorin, BPI-FBs new manager, could
not forthwith comply with the demand as the funds, as previously stated, had
already been debited because of FMICs forgery claim. As such, BPI-FBs
computer at the SFDM Branch indicated that the current account record was not
on file.
14. Franco pre-terminated
his time deposit account. BPI-FB deducted the amount of P63,189.00
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.
15. FMIC filed a
complaint against BPI-FB for the recovery of the amount of P80,000,000.00
debited from its account. The case eventually reached this Court, and in BPI
Family Savings Bank, Inc. v. First Metro Investment Corporation, we
upheld the finding of the courts below that BPI-FB failed to exercise the
degree of diligence required by the nature of its obligation to treat the
accounts of its depositors with meticulous care. Thus, BPI-FB was
found liable to FMIC for the debited amount in its time deposit.
16. Likewise, in BPI
Family Bank v. Buenaventura, we ruled that BPI-FB had no right to
freeze Buenaventura, et al.s accounts and adjudged BPI-FB liable
therefor, in addition to damages.
17. Meanwhile, BPI-FB
filed separate civil and criminal cases against those believed to be the
perpetrators of the multi-million peso scam.
18. In the criminal case,
Franco, along with the other accused, except for Manuel Bienvenida who was
still at large, were acquitted of the crime of Estafa as defined and
penalized under Article 351, par. 2(a) of the Revised Penal Code. However, the
civil case remains under litigation and the respective rights and
liabilities of the parties have yet to be adjudicated.
19. Consequently, in
light of BPI-FBs refusal to heed Francos demands to unfreeze his accounts and
release his deposits therein, the
latter filed with the Manila RTC the subject suit.
20. BPI-FB traversed this
complaint, insisting 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 Francos accounts.
21. Manila RTC rendered
judgment in favor of [Franco] and against [BPI-FB]
22. Unsatisfied with the
decision, both parties filed their respective appeals before the CA. Affirmed.
Issue: Whether or not BPI-FB is
incorrect in freezing Franco’s account.
Held: Yes.
Ruling: We are in full accord with the
common ruling of the lower courts that BPI-FB cannot unilaterally freeze
Francos accounts and preclude him from withdrawing his deposits.
- On the issue of who
has a better right to the deposits in Francos accounts, BPI-FB urges us that
the legal consequence of FMICs forgery claim is that the money transferred by
BPI-FB to Tevesteco is its own, and considering that it was able to recover
possession of the same when the money was redeposited by Franco, it had the
right to set up its ownership thereon and freeze Francos accounts. BPI-FB
contends that its position is not unlike that of an owner of personal property
who regains possession after it is stolen, and to illustrate this point, BPI-FB
gives the following example: where Xs television set is stolen by Y who
thereafter sells it to Z, and where Z unwittingly entrusts possession of the TV
set to X, the latter would have the right to keep possession of the property
and preclude Z from recovering possession thereof. To bolster its position,
BPI-FB cites Article 559[2] of the Civil Code.
- the movable property
mentioned in Article 559 of the Civil Code pertains to a specific or
determinate thing. A determinate or specific thing is one that is
individualized and can be identified or distinguished from others of the same
kind.
- In this case, the deposit in Francos
accounts consists of money which, albeit characterized as a movable, is generic
and fungible. The quality of being fungible depends
upon the possibility of the property, because of its nature or the will of the
parties, being substituted by others of the same kind, not having a distinct
individuality.
- Significantly, while
Article 559 permits an owner who has lost or has been unlawfully deprived of a
movable to recover the exact same thing from the current possessor, BPI-FB
simply claims ownership of the equivalent amount of money, i.e., the
value thereof, which it had mistakenly debited from FMICs account and credited
to Tevestecos, and subsequently traced to Francos account.
- It bears emphasizing
that 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, is no exception.
- Thus, inasmuch as what is involved is
not a specific or determinate personal property, BPI-FBs illustrative example,
ostensibly based on Article 559, is inapplicable to the instant case.
- There is no doubt
that BPI-FB owns the deposited monies in the accounts of Franco, but not as a
legal consequence of its unauthorized transfer of FMICs deposits to Tevestecos
account. BPI-FB conveniently forgets
that the 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 Francos deposits, but such ownership is
coupled with a corresponding obligation to pay him an equal amount on demand.
- Although BPI-FB owns
the deposits in Francos accounts, it cannot prevent him from demanding payment
of BPI-FBs obligation by drawing checks against his current account, or asking
for the release of the funds in his savings account. Thus, when Franco
issued checks drawn against his current account, he had every right as creditor
to expect that those checks would be honored by BPI-FB as debtor.
- 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.
- Ineluctably, BPI-FB,
as the trustee in the fiduciary relationship, is duty bound to know the
signatures of its customers. Having failed to detect the forgery in the
Authority to Debit and in the process inadvertently facilitate the
FMIC-Tevesteco transfer, BPI-FB cannot now shift liability thereon to Franco
and the other payees of checks issued by Tevesteco, or prevent withdrawals from
their respective accounts without the appropriate court writ or a favorable
final judgment.
- Considering that
there is as yet no indubitable evidence establishing Francos participation in
the forgery, he remains an innocent party. As between him and BPI-FB, the
latter, which made possible the present predicament, must bear the resulting
loss or inconvenience.
[1] The current
and savings accounts were respectively funded with an initial deposit of
P500,000.00 each, while the time deposit account had P1,000,000.00 with a
maturity date in 1990. The total amount of P2,000,000.00 used to open these
accounts is traceable to a check issued by Tevesteco allegedly in consideration
of Francos introduction of Eladio Teves, who was looking for a conduit bank to
facilitate Tevestecos business transactions, to Jaime Sebastian, who was then
BPI-FB SFDMs Branch Manager. In turn, the funding for the P2,000,000.00 check
was part of the P80,000,000.00 debited by BPI-FB from FMICs time deposit
account and credited to Tevestecos current account pursuant to an Authority to
Debit purportedly signed by FMICs officers.
[2] Article 559.
The possession of movable property acquired in good faith is equivalent to a
title. Nevertheless, one who has lost any movable or has been unlawfully
deprived thereof, may recover it from the person in possession of the same.
If the possessor of a movable lost or of which
the owner has been unlawfully deprived, has acquired it in good faith at a
public sale, the owner cannot obtain its return without reimbursing the price
paid therefor.
Note: I made this case digest when I was still a law student. The ones posted on my blog were not due for submission as part of any academic requirement. I want to remind you that there is no substitute to reading the full text of the case! Use at your own risk.
Note: I made this case digest when I was still a law student. The ones posted on my blog were not due for submission as part of any academic requirement. I want to remind you that there is no substitute to reading the full text of the case! Use at your own risk.
