Case Digest (G.R. No. 197593) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Bank of the Philippine Islands v. Central Bank of the Philippines, petitioner BPI discovered on January 28, 1982 a P9 million discrepancy in its inter-bank reconciliation statements maintained at respondent CBP’s clearing facility. On February 9, 1982, BPI formally complained to CBP and both parties agreed to engage the NBI to investigate. The NBI report established that CBP employees Manuel Valentino and Jesus Estacio conspired with an external syndicate to intercept, tamper and divert out-of-town checks drawn on BPI Laoag City Branch, which were instead credited to newly opened accounts at Citibank Greenhills in the names of syndicate members Mariano Bustamante and Magna Management Consultant. As a result, P9 million was withdrawn fraudulently. BPI demanded full restitution but CBP credited only P4.5 million to a “Suspense Account” pending the investigation and refused to restore the remaining P4.5 million. On January 21, 1988, BPI filed suit for sum of money before the Mak Case Digest (G.R. No. 197593) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Antecedents
- Petitioner Bank of the Philippine Islands (BPI) and respondent Citibank, N.A. are members of the Central Bank of the Philippines’ (CBP, now Bangko Sentral ng Pilipinas) Clearing House, maintaining demand‐deposit accounts for interbank settlements.
- On January 28, 1982, BPI Laoag City Branch discovered a ₱9 million discrepancy in its interbank reconciliation. On February 9, 1982, BPI filed a letter‐complaint with CBP and agreed to a joint NBI investigation.
- Fraud Scheme and Procedural History
- The NBI found a criminal syndicate—conniving with CBP employees Manuel Valentino (bookkeeper) and Jesus Estacio (janitor‐messenger)—pilfered “out‐of‐town” checks, tampered with clearing manifests/statements, and diverted checks drawn on BPI Laoag to Citibank Greenhills under fictitious accounts.
- Checks totaling ₱9 million were intercepted at the CBP Clearing House; BPI Laoag neither honored nor dishonored them; Citibank Greenhills withdrew the proceeds after the clearing period.
- Criminal convictions ensued (for estafa via falsification) against syndicate members; BPI sought restoration of its ₱9 million plus interest. CBP credited only ₱4.5 million as “suspense account” and refused the balance.
- On January 21, 1988, BPI sued CBP for the remaining ₱4.5 million. RTC (April 24, 2001) ruled for BPI, ordering full credit of ₱9 million plus interest; CA (January 26, 2011; July 8, 2011) reversed and dismissed BPI’s complaint; BPI filed a Rule 45 petition before the Supreme Court.
Issues:
- Suability and Nature of Function
- May CBP be sued for its governmental and/or proprietary functions?
- Is operating a regional check‐clearing house a proprietary function?
- Employee Supervision
- Did CBP exercise the diligence of a good father of a family in supervising Valentino and Estacio?
- Collecting Bank Liability
- Is Citibank, as sending bank, liable for BPI’s loss under Central Bank Circular No. 580, s. 1977, as amended?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)