Case Digest (G.R. No. 180069) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Philippine Commercial International Bank (now BDO Unibank, Inc.) vs. Arturo P. Franco, G.R. No. 180069, decided on March 5, 2014, respondent Arturo P. Franco (substituted by his heirs) filed on September 5, 2000 an action for damages against petitioner PCIB and Equitable Banking Corp. He alleged that between December 1986 and July 1987, he purchased four Trust Indenture Certificates (TICs) with principal amounts of ₱100,000.00, ₱850,594.54, ₱500,000.00, and ₱502,958.90 and agreed stipulated interest rates. Relying on the bank’s representation of pooled management and automatic roll-over, he invested his retirement savings. After his son fell ill in 1995 and expenses exhausted his funds, he sought to encash the TICs but was given a “run-around.” On June 22, 2000, through counsel, the bank declared the certificates “null and void” due to their alleged conversion into Common Trust Funds. The Regional Trial Court (Branch 61, Makati City) rendered its decision on October 21, 2003, Case Digest (G.R. No. 180069) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Background and parties
- Arturo P. Franco (“plaintiff/ respondent”) filed an action for damages on September 5, 2000, against Philippine Commercial International Bank (PCIB, now BDO Unibank, Inc.) and Equitable Banking Corp. for refusal to return trust investments.
- The complaint concerned four Trust Indenture Certificates (TICs) issued by PCIB:
- No. 094846 (P100,000; 8.75% p.a.; Dec. 8, 1986–Jan. 7, 1987)
- No. 135928 (P850,594.54; 7.75% p.a.; Jan. 19–Feb. 18, 1987)
- No. 205007 (P500,000; 8.50% p.a.; May 13–June 15, 1987)
- No. 205146 (P502,958.90; 9.25% p.a.; July 15–Aug. 14, 1987)
- Plaintiff’s allegations and evidence
- Representations by PCIB: investments would be commingled, pooled, and automatically rolled over for better returns, providing for plaintiff’s future without further action.
- Demand and refusal: after severe family medical expenses in the 1990s, plaintiff sought to encash the TICs. PCIB delayed retrieval of records and, by letter dated June 22, 2000, denied payment on grounds that TICs had been converted into common trust funds and rendered “null and void.”
- Plaintiff’s testimony: he invested his lifetime savings based on the bank’s assurances, held original TICs, received no valid payout, and suffered emotional distress and legal expenses (P22,117.80 filing fees; P50,000 counsel’s fee; P3,000 per hearing).
- Defendants’ position and evidence
- Admission: issuance of the four TICs. Denial: automatic rollover and non-prescription.
- Witnesses from Equitable-PCIBank:
- Cecilia P. Soriano (Operations Officer)—no direct dealings with plaintiff at maturity; only photocopies of TICs seen.
- Antonio M. Fortuno (Operations Officer)—explained standard TIC procedures, including rollover if unclaimed; conversion of all TICs into Common Trust Funds in 1992; unaware if plaintiff’s TICs were ever paid or converted.
Issues:
- Entitlement: Is plaintiff entitled to payment of principal and interest under the four TICs?
- Prescription: Has plaintiff’s cause of action already prescribed?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)