G.R. No. 171845 - Spouses Serfino vs. Far East Bank and Trust Co., Inc.

The case originates from a compromise judgment dated October 24, 1995, in Civil Case No. 95-9880 of the RTC of Bacolod City, Branch 47, involving an action for collection of a sum of money.
The parties involved were the petitioner spouses Godfrey and Gerardina Serfino (collectively, spouses Serfino) and the respondent spouses Domingo and Magdalena Cortez (collectively, spouses Cortez).

By settlement, the spouses Cortez acknowledged their indebtedness to the spouses Serfino in the amount of P108,245.71.
Magdalena Cortez bound herself to pay in full the judgment debt out of her retirement benefits from GSIS, with the payment to be made one week after receipt of such benefits.
The agreement further provided that in case of default, the debt could be executed against any of the Cortez’ properties subject to execution.
The RTC approved the agreement after finding it not contrary to law, morals, good customs, public order, or public policy, and subsequently issued a compromise judgment.

The judgment debt was later modified: reduced to P155,000.00 from P197,000.00 (including interest), with a promise from the spouses Cortez to pay in full by April 23, 1996.
No payment was made as promised. Instead, it was discovered that Magdalena deposited her retirement benefits into a savings account in the name of her daughter-in-law, Grace Cortez, at Far East Bank and Trust Company, Inc. (FEBTC).
As of April 23, 1996, the account balance in Grace’s savings account amounted to P245,830.37—all originating from Magdalena’s retirement benefits.

On the same day (April 23, 1996), the spouses Serfino sent two letters to FEBTC, claiming that the deposited funds belonged to them by virtue of an assignment under the compromise agreement, and requested the bank to withhold payment until ownership could be resolved in court.
Subsequently, on April 25, 1996, the spouses Serfino instituted Civil Case No. 95-9344 against the spouses Cortez, Grace Cortez and her husband Dante Cortez, and FEBTC for recovery of money on deposit and damages, with a prayer for preliminary attachment.
Despite these actions, on April 26, 1996, Grace withdrew P150,000.00 from the account, and another letter was sent to FEBTC reiterating the pending legal action.

During the pendency of Civil Case No. 95-9344, the spouses Cortez turned over the remaining balance (P54,534.00) as partial payment of their obligation.
On February 23, 2006, the RTC (Branch 41, Bacolod City) issued a decision:

The spouses Cortez, Grace, and Dante were found liable for fraudulently diverting the amount due to the spouses Serfino.
FEBTC was absolved from liability for allowing the withdrawal because it was not a party to the compromise judgment and was bound solely by its loan contract with Grace.

The procedural context involved a petition for review on certiorari filed under Rule 45 by the spouses Serfino challenging the RTC’s decision.

Whether the compromise judgment implied an effective assignment of Magdalena’s retirement benefits as collateral or payment for the debt owed to the spouses Serfino.
Whether the designation of the retirement benefits merely identified the fund for payment, without transferring the credit or ownership rights.

Obligations of the Bank (FEBTC) upon Receiving Notification of an Adverse Claim

Whether FEBTC was obligated to withhold payment on Grace’s savings account upon receipt of the spouses Serfino’s notices claiming an adverse interest in the deposit.
Whether the bank should have frozen the deposit to allow a reasonable opportunity for the spouses Serfino to institute legal proceedings to assert their claimed rights.

Whether the spouses Serfino suffered a pecuniary loss that would warrant compensation for actual damages in view of the alleged incorrect payment by the bank.
Whether the bank’s act of paying the deposit, despite the letters of adverse claim, constitutes actionable wrongdoing that justifies the award of moral damages.