Case Summary (G.R. No. 132676)
Applicable Law
The case primarily concerns obligations of banks to exercise due diligence in protecting deposited funds, referencing civil liability under the obligations arising from contract as per the Civil Code, and fiduciary duties as outlined in established banking practices.
Antecedent Facts
Between 1995 and 1999, LIDC maintained accounts with FEBTC, later merged into BPI. Authorized signatories included Dela Pea, who was later convicted for estafa, and who allegedly withdrew funds from LIDC’s accounts using forged signatures or by circumventing the rule requiring two signatures. Following discovery of these withdrawals, LIDC demanded recompense from BPI for negligence in permitting unauthorized transactions and subsequently filed a complaint when their demands were unmet.
Procedural History
BPI moved to dismiss the case on grounds of prescription for withdrawals prior to September 30, 1998, but the RTC denied this, citing discovery of the fraud in 2001. BPI contested the merits of LIDC's case, raising defenses of lack of cause of action and laches. The trial included a series of exhibits related to the withdrawals, which BPI contested on authentication grounds.
Regional Trial Court (RTC) Decision
The RTC granted BPI's demurrer to evidence, concluding that LIDC failed to show sufficient proof of conspiracy or gross negligence on BPI's part, resulting in the case being dismissed against BPI while ruling against Dela Pea due to default.
Court of Appeals (CA) Ruling
The CA reversed the RTC decision, establishing that BPI had indeed breached its fiduciary duty by allowing withdrawals with Dela Pea's signature alone, thus disregarding LIDC's requirement for two authorized signatures. The CA also noted that despite the absence of evidence of conspiracy, BPI's negligence made it liable. BPI's admissions during prior proceedings helped establish the authenticity of certain documents, leading the CA to hold BPI solidarily liable for actual damages while affirming Dela Pea’s individual liability for estafa-related damages.
Issues Raised
BPI contested the CA's reliance on the documents submitted by LIDC arguing that they lacked adequate authentication and that any alleged forgery had not been sufficiently proven. Additionally, BPI claimed LIDC was negligent, precluding recovery, and questioned the imposition of interest and attorney's fees absent evident bad faith.
Ruling of the Supreme Court
The Supreme Court upheld the CA's ruling while modifying the judgment concerning Dela Pea’s liability, clarifying that LIDC's claims against BPI stemmed from a breach of contract, distinct from any criminal liability of Dela Pea. The Court also altered the interest awarded, applying a different rate from the
...continue readingCase Syllabus (G.R. No. 132676)
Background of the Case
- The case involves a petition for review on certiorari under Rule 45 of the Rules of Court filed by the Bank of the Philippine Islands (BPI) to annul the Decision dated February 28, 2011, of the Court of Appeals (CA).
- The CA reversed and set aside the Resolutions dated April 14, 2009, and June 26, 2009, from the Regional Trial Court (RTC) of Makati City, Branch 61, which had ruled in favor of BPI.
- The CA found BPI liable to the respondent, Land Investors and Developers Corporation (respondent), for breach of fiduciary duty.
Antecedent Facts
- The respondent maintained savings and current accounts with the Pamplona, Las Piñas Branch of Far East Bank & Trust Company (FEBTC) from 1995 to 1999, which later merged with BPI.
- Authorized signatories for the respondent included Ruth Fariñas, Orlando Dela Peña (the respondent’s President), and Juanito Collas.
- In 2001, Dela Peña was convicted of estafa, and during this period, the respondent discovered unauthorized withdrawals totaling P3,652,095.01 from its accounts, allegedly facilitated by BPI's negligence.
- BPI allowed withdrawals based on either Dela Peña’s lone signature or forged signatures of other signatories.
Procedural History
- Following the discovery of the withdrawals, the respondent filed a complaint against BPI and Dela Peña for sum of money and damages.
- BPI initially sought to dismiss the case based on the argument of prescription for claims prior to September 30, 1998, but the RTC denied this motion, determining that the period of prescription began in 2001, upon the discovery of the fraud.
- BPI raised defenses of