GR 123498; (November, 2007) (Digest)
G.R. No. 123498; November 23, 2007
BPI FAMILY BANK, Petitioner, vs. AMADO FRANCO and COURT OF APPEALS, Respondents.
FACTS
BPI Family Bank (BPI-FB) credited ₱80 million from a forged Authority to Debit to the account of Tevesteco. From this sum, Tevesteco issued a ₱2 million check to Amado Franco, who deposited it into his newly opened accounts with BPI-FB. Upon discovering the forgery, BPI-FB, to protect its interests, internally debited Franco’s savings and current accounts. Concurrently, BPI-FB filed a separate case (Makati Case) to recover Tevesteco’s withdrawals and obtained a writ of attachment. Franco’s accounts were garnished under this writ, causing checks he issued to be dishonored with the notation “account under garnishment.”
Franco was not initially a party to the Makati Case. When he was later impleaded, he promptly secured an order lifting the attachment. Upon demanding the release of his funds, he learned BPI-FB had already debited them internally. Franco’s time deposit was also pre-terminated with deductions. He filed a complaint for damages against BPI-FB.
ISSUE
Whether BPI-FB acted lawfully in debiting Franco’s accounts and in the garnishment that led to the dishonor of his checks.
RULING
No. The Supreme Court affirmed the Court of Appeals’ decision holding BPI-FB liable. The legal logic is twofold. First, on the garnishment: the dishonor of Franco’s checks was wrongful. The writ of attachment was improperly implemented against Franco, as he was not a party to the Makati Case when the Notice of Garnishment was served on the bank. A writ can only bind parties to the action. Since Franco was not yet a defendant, BPI-FB had no legal basis to freeze his accounts under that writ, making the dishonor of his checks a breach of its contractual duty as a banker.
Second, on the internal debit: BPI-FB’s unilateral act of debiting Franco’s accounts based on its internal investigation into the forgery was unjustified. The bank’ recourse was legal, not self-help. The bank-customer relationship is contractual, and the bank must exercise the highest degree of care. BPI-FB could not unilaterally seize the funds; it should have filed the appropriate court action to recover the amount it believed was sourced from fraud. Its failure to do so constituted a violation of its fiduciary duty. Consequently, BPI-FB was liable for moral and exemplary damages for acting in bad faith, and for attorney’s fees.