Case Summary (G.R. No. 66826)
Procedural History
Original complaint filed June 28, 1976 in the Court of First Instance of Rizal–Caloocan City, alleging four causes of action. CFI ruled for Zshornack except on the third cause. COMTRUST appealed. The Intermediate Appellate Court modified and absolved the bank on the fourth cause. BPI, having merged with COMTRUST in 1980, brought the appeal to the Supreme Court, limiting issues to the first and second causes and damages.
Applicable Law
Constitution – 1973 Philippine Constitution (decision rendered August 19, 1988).
Civil Code – Article 1962 (deposit), Article 1411 (pari delicto).
Central Bank Circulars – No. 20 (1949) and its modification by Circular No. 281 (1969).
First Cause of Action: Unauthorized Withdrawal
On October 27, 1975, COMTRUST, through Garcia, issued a US$1,000 draft drawn on Chase Manhattan Bank, charging Zshornack’s Dollar Savings Account No. 25-4109. Zshornack discovered the withdrawal and demanded explanation. The bank claimed it paid the peso equivalent to Ernesto Zshornack, Jr., and alternatively asserted an alleged agreement to convert dollars to pesos to fund the peso current account.
Bank’s Defenses and Court’s Analysis on Withdrawal
The Court rejected both defenses as inconsistent and unproven. The currency conversion transaction was unrelated to the dollar draft, and payment to Ernesto could not satisfy Rizaldy’s obligation. There was no evidence of any agreement to convert funds for the current account. BPI was held liable for the unauthorized US$1,000 withdrawal.
Second Cause of Action: Deposit for Safekeeping
Zshornack entrusted US$3,000 in cash to COMTRUST on December 8, 1975 under a signed acknowledgment stating the sum was received “for safekeeping.” Upon demand, the bank refused to return the dollars, claiming it sold the currency and credited the peso proceeds to his current account.
Procedural Requirement on Denial of Execution
Because the claim rested on an “actionable document,” BPI was required under Rule 8, Section 8, to specifically deny under oath Garcia’s authority or the bank’s capacity to enter the contract. No such sworn denial was filed, resulting in deemed admission of the contract’s validity and of Garcia’s authority.
Nature of the Contract and Central Bank Regulations
The transaction clearly constituted a depositum under Article 1962: obligation to safely keep and return the exact property. Central Bank Circular No. 20 (1949), as amended by Circular No. 281 (1969), mandated that any receipt of foreign exchange by a Philippine resident be sold to the Central Bank within one business day. The parties did not intend immediate sale, but true safekeeping.
Illegality and Nullity of the Deposit Contract
By failing to sell the greenbacks within one business day, the contract violated the mandatory provisions of
Case Syllabus (G.R. No. 66826)
Facts
- Original parties were Rizaldy T. Zshornack and the Commercial Bank and Trust Company of the Philippines (“COMTRUST”); in 1980, Bank of the Philippine Islands (“BPI”) absorbed COMTRUST by merger and was substituted as defendant.
- On June 28, 1976, Zshornack filed a complaint in the Court of First Instance (CFI) of Rizal-Caloocan City alleging four causes of action against COMTRUST.
- The plaintiff maintained a dollar savings account (No. 25-4109) and a peso current account (No. 210-465-29) at COMTRUST, Quezon City Branch, jointly with his wife.
- On October 27, 1975, Assistant Branch Manager Virgilio V. Garcia applied for and issued a US$1,000 draft payable to Leovigilda D. Dizon, charging the amount to Zshornack’s dollar savings account and related fees to his peso current account.
- Zshornack discovered the withdrawal and demanded explanation; the bank offered two inconsistent defenses: that the peso equivalent was paid to Zshornack’s brother Ernesto upon encashment of a cashier’s check, and that there was an agreement to fund the peso current account.
- On December 8, 1975, Zshornack delivered US$3,000 in cash (“greenbacks”) to COMTRUST for safekeeping under a written acknowledgment signed by Garcia; the bank later refused to return the cash on demand.
Procedural History
- The CFI ruled in favor of Zshornack on all causes except the third.
- COMTRUST appealed to the Intermediate Appellate Court (IAC), which modified the CFI decision by absolving it of liability on the fourth cause of action.
- Zshornack did not appeal the IAC decision; BPI petitioned the Supreme Court for total relief.
Issues Presented
- Whether BPI (as successor to COMTRUST) is liable for the unauthorized withdrawal of US$1,000 from the dollar savings account (first cause of action).
- Whether Zshorn