GR 197593; (October, 2020) (Digest)
G.R. No. 197593 , October 12, 2020
Bank of the Philippine Islands, Petitioner, vs. Central Bank of the Philippines (Now Bangko Sentral ng Pilipinas) and Citibank, N.A., Respondents.
FACTS
Petitioner BPI discovered a discrepancy of P9 million in its interbank reconciliation statements with the Central Bank (CBP). An investigation revealed a “pilferage scheme” perpetrated by a criminal syndicate. Syndicate members opened accounts at BPI Laoag and Citibank Greenhills. They deposited checks drawn on the BPI account into the Citibank account. CBP Clearing House personnel, who were part of the syndicate, intercepted these checks, tampered with clearing manifests and statements to conceal the deposits, and forwarded altered documents to BPI Laoag. Consequently, BPI Laoag never received the checks and thus could not dishonor them. Citibank, receiving no notice of dishonor within the clearing period, allowed the withdrawal of the P9 million.
BPI demanded CBP credit back the P9 million. CBP credited only P4.5 million to BPI’s suspense account. BPI filed a complaint against CBP and Citibank to recover the remaining P4.5 million and hold them liable for the full amount. The Regional Trial Court ruled in favor of BPI, ordering CBP to pay. The Court of Appeals reversed, dismissing the complaint and ordering the cancellation of the P4.5 million credit, prompting BPI’s appeal to the Supreme Court.
ISSUE
Whether the Central Bank of the Philippines (CBP) and Citibank, N.A. can be held liable to BPI for the loss resulting from the fraudulent pilferage scheme.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. CBP cannot be held liable under the principle of state immunity from suit. At the time of the transaction, CBP was a government instrumentality exercising sovereign functions, including the supervision of the banking system and the operation of clearing facilities. Its acts in establishing and supervising the clearing house were governmental in character. Suing it for damages based on the alleged negligence of its employees in performing these functions is a suit against the state, which cannot prosper without its consent.
Citibank cannot be held liable either. As the collecting bank, it acted within its authority under CBP regulations. It presented the checks for clearing and, having received no notice of dishonor from the drawee bank (BPI) within the prescribed period, correctly presumed the checks were honored. Citibank had no duty to verify beyond the clearing process and was not negligent. The proximate cause of the loss was the criminal acts of the syndicate, including the CBP personnel who pilfered the checks and falsified documents. BPI’s remedy lies against the perpetrators of the fraud, not against CBP or Citibank.