BPI Family Bank v.

Amado Franco and Court of Appeals

G.R. No. 123498
23 November 2007
DOCTRINE/S:
The deposit of money in banks is governed by the Civil Code provisions on simple loan or
mutuum.
FACTS:

15 Aug 1989: Tevetesco Arrastre-Stevedoring Co., Inc. opened a savings and current
account with BPI-FB (petitioner)

25 Aug: First Metro Investment Corporation (FMIC) also opened a time deposit
account w/ same branch of BPI-FB (San Francisco del Monte) in a series of
transactions

31 Aug: Amado Franco (respondent) opened three (3) accounts (current, savings, and
time-deposit) w/ BPI-FB. Total amount of P2M use to open these accounts is traceable
to a check issued by Tevesteco allegedly in consideration of respondent Francos
introduction of Eladio Teves (looking for a conduit bank to facilitate Tevetescos
business transactions) to Jaime Sebastian (BPI-FBs Branch Manager). The P2M is
part of the P80M debited by BPI-FB from FMCIs time deposit account and credited
to Tevetescos current account pursuant to an Authority to Debit allegedly signed by
FMCIs officers w/c appears to be forged.
o Current: Initial deposit of P500k
o Savings: Initial deposit of P500k
o Time deposit: P1M w/ maturity date of 31 Aug 1990

4 Sept: Antonio Ong, upon being shown the Authority to debit, personally declared his
signature to be a forgery.

Tevetesco already effected several withdrawals from its current account amounting to
P37,455,410.54 including the P2M paid to respondent Franco.

8 Sept: BPI-FB, through Senior VP Severino Cornamcion, instructed Jesus Arangorin

to debit Francos savings & current accounts for the amounts remaining therein but the
latters time deposit account couldnt be debited due to computer limitations.

2 checks drawn by Franco against BPI-FB current account were dishonored upon
presentment for payment & stamped w/ notation account under garnishment.
o Garnished by virtue of an Order of Attachment issued by Makati RTC in a
civil case filed by BPI-FB against Franco, etc. to recover the P37,455,410.54
(Tevetescos total withdrawals from its account)
o Dishonored checks were issued by respondent Franco & presented for
payment at BPI-FB prior to Francos receipt of notice of garnishment. At the
time the notice dated 27 Sept was served on BPI-FB, respondent Franco has
yet to be impleaded in said case where writ of attachment was issued. It was
only on 15 May 1990 that respondent Franco was impleaded. The
attachment was subsequently lifted however the funds were not released to

respondent Franco because petitioner BPI-FB could not comply given that
the money has already been debited because of FMICs forgery claim.
petitioner BPI-FBs computer that branch indicated that the current account
record was not on file.
As to respondent Francos savings account he agreed to an arrangement as a favor to
Sebastian where P400K from said account was temporarily transferred to Domingo
Quiaoits savings account, subject to its immediate return upon issuance of a certificate
of deposit which Quiaoit needed in connection with his visa application at the Taiwan
Embassy.
o Sebastian retained custody of Quiaoits savings account passbook to
preserve respondent Francos deposits.
17 May 1990: Respondent Franco pre-terminated his time deposit account.
o Petitioner BPI-FB deducted P63,189 from the remaining balance of the
account representing advance interest paid to him.
Several cases have been filed and resolved pertaining to these transactions.
PET FPI-FBs refusal to heed RES Francos demand to unfreeze his accounts &
release his deposits gave rise to the latters filing a case with Manila RTC.
RTC
o Rendered judgment in favor of respondent Franco ordering Petitioner BPIFB to pay sums of money.
CA
o Modified decision but Petitioner BPI-FB still to pay interest deducted rom
the time-deposit of Respondent Franco, damages, etc.

ISSUE:
Who has a better right to the deposits in respondent Francos accounts? (FRANCO)
HELD:

No doubt that petitioner BPI-FB owns the deposited monies in the accounts of
respondent Franco, but not as a legal consequence of its unauthorized transfer of
FMICs deposits to Tevetescos account.
o The deposit of money in banks is governed by the Civil Code provisions on
simple loan or mutuum.
o As there is a debtor-creditor relationship between a bank and its depositor,
petitioner FPI-FB ultimately acquired ownership of respondent Francos
deposits, but such ownership is coupled w/ a corresponding obligation to pay
him an equal amount on demand. Although petitioner BPI-FB owns the
deposits, it cannot prevent respondent Franco from demanding payment of
the formers obligation by drawing checks against his current account or
asking for the released of the funds in his savings account.

When respondent Franco issued checks drawn against his current account, he had
every right as creditor to expect that those checks would be honored by petitioner BPIFB as debtor.