Bank of the Philippine Islands vs. Intermediate Appellate Court

Facts:

The original defendant was the Commercial Bank and Trust Company (COMTRUST); after COMTRUST was merged into BPI in 1980, BPI was substituted as party. On June 28, 1976, Rizaldy T. Zshornack filed a complaint in the Court of First Instance of Rizal-Caloocan City against COMTRUST alleging four causes of action. The trial court ruled in favor of Zshornack on all but the third cause of action. COMTRUST appealed to the Intermediate Appellate Court (IAC), which modified the CFI decision by absolving the bank from liability on the fourth cause of action but otherwise affirming relief for causes one and two and awarding P8,000.00 as litigation expenses and attorney’s fees. The IAC’s judgment ordered restoration of US$1,000 to Zshornack’s dollar savings account, return of US$3,000 held for safekeeping (without interest), and P8,000 damages; costs were assessed against COMTRUST.

BPI petitioned to this Court seeking complete absolution from liability. Private respondent did not appeal the IAC decision; accordingly the Supreme Court’s review was limited to petitioner’s liability on the first and second causes of action and to the award of damages. The material facts for the first cause: on October 27, 1975, Virgilio V. Garcia, Assistant Branch Manager of COMTRUST Quezon City, prepared an application and caused issuance of a US$1,000 draft/check in favor of Leovigilda D. Dizon charged to Dollar Savings Account No. 25-4109 (Zshornack’s account); charges were to be debited to Zshornack’s peso current account. When Zshornack discovered the US$1,000 withdrawal he demanded explanation; the bank asserted the peso equivalent had been given to Zshornack’s brother Ernesto when Ernesto encashed a cashier’s check. The courts below found the bank’s explanations inconsistent and held the bank liable for the unauthorized withdrawal.

For the second cause: on December 8, 1975, Zshornack delivered US$3,000 in cash to COMTRUST through Garcia and a written receipt acknowledging receipt “for safekeeping” was attached to the complaint. At trial the bank claimed the dollars had been sold and the peso proceeds credited to Zshornack’s current account (US$2,000 sold December 29, 1975; US$1,000 sold February 3, 1976). BPI later argued the instrument evidenced a depositum, which banks do not enter into, and that Garcia exceeded his authority so any obligation was personal to him. The Court of Appeal...(Pro-only)

Issues:

• Is petitioner liable for the unauthorized withdrawal of US$1,000 from private respondent’s dollar savings account?
• Can private respondent recover US$3,000 delivered for safekeeping when the safekeeping transaction involved foreign exchange subject to Central Bank regulations?
• Was the award of P8,000.00 as litigation expenses ...(Pro-only)

Ruling:

• (Pro-only)

Ratio:

• (Pro-only)

Doctrine:

• (Pro-only)