GR 116792; (March, 1996) (Digest)
G.R. No. 116792 March 29, 1996
BANK OF THE PHILIPPINE ISLANDS and GRACE ROMERO, petitioners, vs. COURT OF APPEALS and EDVIN F. REYES, respondents.
FACTS
Private respondent Edvin F. Reyes maintained a joint “AND/OR” savings account with his grandmother, Emeteria M. Fernandez, at petitioner BPI. He regularly deposited her U.S. Treasury pension warrants into this account. Fernandez died on December 28, 1989. Unaware of her death, the U.S. Treasury issued a warrant payable to her on January 1, 1990, which Reyes deposited on January 4, 1990. After provisional clearing, the check was sent to the U.S. for final clearing. Reyes later closed this joint account and transferred the funds, including the proceeds of the warrant, to his other joint account with his wife.
On January 16, 1991, the U.S. Treasury dishonored the warrant upon discovering Fernandez’s prior death and requested a refund from BPI. On February 19, 1991, BPI contacted Reyes, who, according to bank officers, verbally authorized the bank to debit the amount from his joint account with his wife to cover the refund. BPI proceeded with the debit. Reyes later demanded restitution and filed a suit for damages.
ISSUE
Whether the Bank of the Philippine Islands acted lawfully in debiting the joint account of Edvin F. Reyes and his wife for the amount of the dishonored U.S. Treasury Warrant.
RULING
Yes, the Supreme Court reinstated the trial court’s decision and ruled in favor of the petitioners. The Court found that the bank sufficiently proved by preponderance of evidence that Reyes gave express verbal authorization for the debit. The testimonies of bank officers Bernardo and Romero were credible and consistent, detailing Reyes’s instruction to debit his account and his promise to later provide written confirmation. This verbal consent was legally sufficient.
Furthermore, the Court held that the principle of legal compensation under Article 1278 of the Civil Code applied. All its elements were present: there was a mutual creditor-debtor relationship between the bank (as debtor for the deposit and creditor for the refund claim), the debts were both sums of money which were due, liquidated, and demandable, and no third-party claim existed. The fact that the account was jointly held with his wife did not negate mutuality for the purpose of compensation, as she was not a party to the suit and never asserted any right to the specific funds. To disallow compensation would result in the unjust enrichment of Reyes. The bank had a clear legal right to apply the deposit to settle the obligation arising from the dishonored warrant.