Case Digest (G.R. No. 202324) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
On December 5, 1991, A.A. Salazar Construction and Engineering Services, doing business under Annabelle A. Salazar’s name, filed a complaint for sum of money with damages against Bank of the Philippine Islands (BPI) before Branch 156 of the Regional Trial Court (RTC) of Pasig City. The amount claimed was ₱267,707.70 allegedly wrongfully debited from Salazar’s savings account. BPI countered that it had validly paid ₱267,692.50 by cashier’s check to Julio R. Templonuevo, doing business as JRT Construction and Trading, after Templonuevo demanded reimbursement for three unendorsed checks totalling ₱267,692.50 that Salazar had deposited to her account without his consent. Because Salazar’s account number 0203-1187-67 had insufficient funds or was closed, BPI froze her sole proprietorship account (No. 0201-0588-48) and later debited it for the amount advanced to Templonuevo plus bank charges of ₱15.20. The RTC rendered judgment in favor of Salazar, awarding her the full amount with 12 Case Digest (G.R. No. 202324) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Trial and pleadings
- On December 5, 1991, A.A. Salazar Construction and Engineering Services filed an action for sum of money with damages against Bank of the Philippine Islands (BPI); complaint later amended to substitute Annabelle A. Salazar as real party in interest.
- Salazar prayed recovery of ₱267,707.70 purportedly debited by BPI from her account, plus damages and attorney’s fees.
- BPI answered that Julio R. Templonuevo (third‐party defendant) held three checks totaling ₱267,692.50 payable to him but deposited without endorsement by Salazar to her Account No. 0203-1187-67; upon notice, BPI froze that account (already closed or insufficient), froze Salazar’s sole proprietorship account (No. 0201-0588-48), paid Templonuevo ₱267,692.50 by cashier’s check, and debited Salazar ₱267,707.70 (including bank charges).
- Lower court decisions
- The RTC rendered judgment for Salazar, ordering BPI to pay:
- ₱267,707.70 + 12% interest from September 16, 1991;
- ₱30,000 actual damages, ₱50,000 moral damages, ₱50,000 exemplary damages;
- ₱30,000 attorney’s fees; costs.
- On appeal, the CA affirmed, ruling that Salazar was entitled to the proceeds despite lack of endorsement, inferring a prior arrangement between Salazar and Templonuevo and BPI’s acquiescence.
- Petition for review
- BPI raised seven assignments of error, contesting:
- Misinterpretation of Section 49 of the Negotiable Instruments Law and Rule 131(evidence);
- Non-application of Civil Code Arts. 22, 1278, 1290;
- Misapprehension of facts as to account identity;
- Speculative finding of agreement between Salazar and Templonuevo;
- Unfounded award of damages;
- Erroneous affirmation of dismissal of its third-party complaint.
Issues:
- Whether a collecting bank may unilaterally debit a depositor’s account to rectify a wrongful payment on unendorsed order instruments deposited by a non-payee into a closed account.
- Whether Salazar was a “holder” under Section 49 of the Negotiable Instruments Law and entitled to presumption of lawful transfer without endorsement.
- Whether BPI validly exercised its right of set-off under Civil Code Arts. 1278 and 1980 to debit Salazar’s and her sole proprietorship’s accounts.
- Whether BPI breached its duty of due diligence in accepting and paying unendorsed, crossed checks and failed to notify Salazar before debiting her frozen account.
- Whether the CA erred in inferring an internal arrangement, awarding damages, and dismissing BPI’s third-party complaint against Templonuevo.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)