BPI vs. Land Investors and Developers Corporation

A bank that allows withdrawals contrary to its depositor's express "any two" authorized signatory instruction breaches its fiduciary duty and is liable for damages arising from breach of contract; however, such contractual liability is distinct from a co-defendant's civil liability arising from the crime of estafa, and the two cannot be held solidarily liable because their obligations proceed from separate sources.

Between 1995 and 1999, respondent Land Investors and Developers Corporation maintained savings and current accounts with the Pamplona, Las Piñas Branch of Far East Bank & Trust Company (FEBTC), which later merged with petitioner Bank of the Philippine Islands (BPI). Respondent had authorized any two of three signatories—Ruth Fariñas, Orlando Dela Peña, and Juanito Collas—to effect withdrawals from its accounts. Dela Peña served as respondent's President.

Between 1995 and 1999, respondent Land Investors and Developers Corporation maintained savings and current accounts with the Pamplona, Las Piñas Branch of Far East Bank & Trust Company (FEBTC), which subsequently merged with petitioner Bank of the Philippine Islands (BPI). Respondent had authorized any two of three persons—Ruth Fariñas, Orlando Dela Peña, and Juanito Collas—to act as bank signatories for withdrawals. Dela Peña was respondent's President.

Sometime in 2001, Dela Peña was convicted for estafa and dismissed from employment. Around the same time, respondent discovered that Dela Peña, acting in alleged conspiracy with or taking advantage of the gross negligence of BPI, had succeeded in unlawfully withdrawing various amounts totaling P3,652,095.01 from respondent's deposit accounts. Respondent alleged that BPI was negligent and violated its fiduciary duties when it allowed these withdrawals on the basis of Dela Peña's lone signature or through the forged signatures of his co-signatories.

Despite demand, BPI failed to heed respondent's claims, prompting respondent to file a complaint for sum of money and damages against BPI and Dela Peña. BPI initially moved to dismiss on the ground of prescription for withdrawals prior to September 30, 1998, but the RTC denied the motion, reckoning prescription from discovery of the fraud in 2001. BPI then filed its answer raising the defenses of lack of cause of action, prescription, and laches. Dela Peña failed to file an answer and was declared in default.

During the preliminary conference, respondent moved for production of documents to compel BPI to produce the originals of signature cards and withdrawal slips. Instead of producing the originals, BPI admitted most of the exhibits and stipulated that certain exhibits were obtained from BPI's microfilm copies. Trial on the merits ensued, and respondent formally offered its exhibits, including signature cards showing authorized signatories, a board resolution establishing the "any two" signatory requirement, counterchecks and checks bearing only Dela Peña's lone signature, withdrawal slips bearing Dela Peña's lone signature and in some cases the forged signature of Fariñas, and NBI comparison charts and a report concluding that the questioned signatures of Fariñas were not written by the same person who wrote her standard signatures. All of respondent's exhibits were admitted by the trial court.

BPI filed a demurrer to evidence, arguing that respondent had shown no right to relief because no evidence proved the alleged forgery in certain exhibits, other exhibits were not properly identified or authenticated, the genuineness of sample signatures used for comparison was not established, claims for withdrawals prior to September 30, 1998 were barred by prescription, and respondent's loss was attributable to its own negligence. The RTC granted the demurrer, finding that respondent's evidence was barren on the allegation of conspiracy between Dela Peña and BPI and inadequate to establish gross negligence on BPI's part. The RTC dismissed the case against BPI but ordered the defaulted Dela Peña to pay actual damages of P3,652,095.01, moral damages of P500,000.00, exemplary damages of P200,000.00, and attorney's fees of P100,000.00.

Respondent's motion for reconsideration was denied, and respondent appealed to the CA. The CA agreed with the RTC that respondent failed to demonstrate conspiracy between Dela Peña and BPI, but held that the non-existence of conspiracy would not necessarily exculpate BPI if there was evidence that BPI violated its fiduciary duty. The CA found that BPI allowed withdrawals with only Dela Peña's signature on three counterchecks, seven checks, and two withdrawal slips, contrary to respondent's "any two" signatory requirement. The CA disregarded BPI's authentication objection, ruling that BPI's failure to specifically deny under oath the genuineness and due execution of these exhibits resulted in an implied admission pursuant to Section 8, Rule 8 of the Rules of Court. As to other withdrawal slips and checks bearing Fariñas' allegedly forged signatures, the CA found forgery was proven by Fariñas' testimony, her standard signatures, and a handwriting expert's report, noting significant variances between the questioned and standard signatures. The CA reversed the RTC and held BPI solidarily liable with Dela Peña for actual damages plus 12% legal interest and P100,000.00 in attorney's fees. BPI's motion for reconsideration was denied.

• Improper Application of Actionable Documents Rule: BPI argued that the CA erred in applying the rule on actionable documents to extend probative value to respondent's Exhibits D, F, and G and their sub-markings, considering that BPI was not a party to nor a signatory of said counterchecks, checks, and withdrawal slips.
• Insufficiency of Forgery Evidence: BPI questioned the CA's finding that Fariñas' signatures on Exhibits "H" to "H-28" and Exhibits "I" to "I-80" were forged, contending that a bare claim of forgery is insufficient pursuant to the Court's ruling in Sps. Salonga vs. Sps. Concepcion.
• Respondent's Negligence: Admitting for the sake of argument that the signatures were forged, BPI claimed that respondent was guilty of negligence, which precludes it from setting up forgery or want of authority.
• Impropriety of Interest and Attorney's Fees: BPI disputed the imposition of interest and the award of attorney's fees in the absence of evident bad faith.

• Admissibility of Exhibits: Whether the CA erred in applying the rule on actionable documents to extend probative value to Exhibits D, F, and G and their sub-markings despite BPI not being a party or signatory to those instruments.
• Proof of Forgery: Whether the CA erred in finding that Fariñas' signatures on Exhibits "H" to "H-28" and Exhibits "I" to "I-80" were forged, given BPI's contention that a bare claim of forgery is insufficient under Salonga.
• Respondent's Negligence: Whether respondent's alleged negligence precludes it from setting up forgery or want of authority.
• Solidary Liability: Whether Dela Peña should be held solidarily liable with BPI.
• Interest and Attorney's Fees: Whether the imposition of interest and the award of attorney's fees were proper.

• Admissibility of Exhibits: No. The exhibits were properly admitted, BPI having admitted and stipulated on their genuineness and due execution during the preliminary conference and having further admitted that they were obtained from BPI's own microfilm copies and were honored by BPI.
• Proof of Forgery: No error. Forgery was sufficiently proven not by a bare claim but by Fariñas' own testimony denying the signatures, her standard signatures, and a handwriting expert's report with comparison charts, corroborated by the CA's own observation of significant variances between the questioned and standard signatures.
• Respondent's Negligence: Not persuasive. The CA's factual findings that BPI allowed unauthorized withdrawals contrary to the "any two" signatory requirement are amply supported by the record and binding in a Rule 45 petition.
• Solidary Liability: No. Dela Peña should not be held solidarily liable with BPI because BPI's liability proceeds from breach of contract while Dela Peña's liability arises from the crime of estafa—two separate and distinct sources of obligation.
• Interest and Attorney's Fees: The interest rate was modified per Nacar guidelines; the award of attorney's fees was sustained as just and equitable under Article 2208(11) of the Civil Code.

• Admissibility of Exhibits: A private document requires authentication before it may be received in evidence, but authentication is not required when the genuineness and authenticity of an actionable document have not been specifically denied under oath by the adverse party, when they have been admitted, or when the document is not being offered as genuine. The trial court had admitted all of respondent's exhibits, to which BPI raised no further objections. Moreover, BPI admitted and stipulated on the genuineness and due execution of the questioned checks and withdrawal slips during the preliminary conference and admitted that these were obtained from BPI's microfilm copies and were honored by BPI. These judicial admissions dispensed with the ordinarily required proof of authenticity. BPI's argument that it was not a party or signatory to the instruments thus failed.

• Proof of Forgery: BPI invoked Salonga for the proposition that a bare claim of forgery is insufficient. However, the CA correctly observed that Fariñas herself categorically denied signing the subject instruments and identified her genuine signatures. A handwriting expert corroborated Fariñas' testimony with a report and comparison charts demonstrating that the signatures on the checks and withdrawal slips were not genuine. The CA also found significant variances between Fariñas' standard signatures on her valid identification cards and the questioned signatures. Given these multiple pieces of corroborative evidence, the Salonga doctrine—requiring more than a bare claim—was satisfied. The matter was also not so highly technical as to preclude the appellate court from examining the signatures and ruling on whether they were forgeries. The Court found no reason to deviate from the CA's factual findings, which are binding in a Rule 45 petition absent gross misperception or manifest bias.

• Respondent's Negligence: The petition demonstrated no exceptional circumstance justifying the Court's intervention into the CA's factual findings. The CA's findings that BPI allowed several withdrawals despite the checks and withdrawal slips bearing only Dela Peña's lone signature and/or forged signatures of Fariñas, contrary to respondent's "any two" signatory resolution, were amply supported by the record. Under the doctrine that CA factual findings are conclusive when borne out by the record or based on substantial evidence—even when the CA reverses the trial court—these findings were binding on the Court.

• Solidary Liability: BPI's liability proceeds from a breach of contract. Under Article 1980 of the Civil Code, fixed, savings, and current deposits of money in banks are governed by the provisions concerning simple loans (mutuum). By the contract of mutuum, one party delivers money to another upon the condition that the same amount shall be paid. When BPI allowed Dela Peña to make unauthorized withdrawals, it failed to comply with its obligation to secure the accounts by allowing only those withdrawals authorized by respondent, thereby violating the terms of its contract of loan with respondent. Under Article 1170 of the Civil Code, those guilty of negligence in the performance of their obligations, and those who in any manner contravene the tenor thereof, are liable for damages. Dela Peña's liability, on the other hand, arises from the commission of the crime of estafa, for which he had been charged and convicted. Respondent's action to recover actual damages against Dela Peña was deemed instituted with the criminal action under Section 1, Rule 111 of the Revised Rules of Criminal Procedure, absent any reservation. To hold Dela Peña solidarily liable for damages in the civil case could result in double recovery, which is proscribed under Article 2177 of the Civil Code. Because BPI's and Dela Peña's liabilities proceed from totally distinct and separate sources, they cannot be deemed joint and solidary.

• Interest and Attorney's Fees: The computation of the rate of interest required modification pursuant to Nacar vs. Gallery Frames, which modified the Eastern Shipping Lines guidelines to embody BSP-MB Circular No. 799. Since the obligation consists in the payment of a sum of money (a loan or forbearance of money), the interest due shall be 12% per annum from the date of judicial demand until June 30, 2013, and 6% per annum from July 1, 2013 until satisfaction, the new rate being applied prospectively from July 1, 2013. The award of attorney's fees was sustained under Article 2208(11) of the Civil Code, where the court deems it just and equitable that attorney's fees and expenses of litigation should be recovered.

• Binding Nature of CA Factual Findings in Rule 45 Petitions — Only questions of law may be raised in petitions for review under Rule 45; the Court does not entertain questions of fact because factual findings of the appellate court are final, binding, and conclusive on the parties and on the Court. Exceptions exist (e.g., when CA findings are contrary to those of the trial court), but such divergence alone does not automatically warrant review. Only a showing, on the face of the record, of gross or extraordinary misperception or manifest bias will justify the Court's intervention. In this case, the petition demonstrated no such exceptional circumstance, and the CA's findings were amply supported by the record.

• Authentication of Private Documents Not Required When Genuineness Is Admitted or Not Specifically Denied Under Oath — A private document requires authentication before it may be received in evidence, but authentication is dispensed with when: (a) the document is ancient under Section 21, Rule 132; (b) the genuineness and authenticity of an actionable document have not been specifically denied under oath by the adverse party; (c) the genuineness and authenticity have been admitted; or (d) the document is not being offered as genuine. In this case, BPI's judicial admissions during the preliminary conference—admitting the genuineness and due execution of the questioned checks and withdrawal slips and stipulating that they were obtained from BPI's microfilm copies and honored by BPI—dispensed with the requirement of authentication.

• Bank Deposits as Loans (Mutuum) — Under Article 1980 of the Civil Code, fixed, savings, and current deposits of money in banks are governed by the provisions concerning simple loans. The relationship between bank and depositor is one of creditor and debtor under a contract of mutuum. A bank that allows unauthorized withdrawals in violation of the depositor's express instructions breaches this contract and is liable for damages under Article 1170 of the Civil Code.

• Separate Sources of Obligation Preclude Solidary Liability — Solidary liability cannot be imposed when the liabilities of two defendants arise from separate and distinct sources of obligation. BPI's liability arose from breach of contract, while Dela Peña's arose from the crime of estafa. Because these are distinct sources, holding them solidarily liable could result in double recovery, which is proscribed under Article 2177 of the Civil Code.

• Nacar Interest Guidelines — When an obligation constituting a loan or forbearance of money is breached, the interest due shall be that stipulated in writing, or in the absence of stipulation, 12% per annum from default (judicial or extrajudicial demand) until June 30, 2013, and 6% per annum from July 1, 2013 until satisfaction, pursuant to BSP-MB Circular No. 799 as applied in Nacar vs. Gallery Frames. The new 6% rate is applied prospectively from July 1, 2013.

• "To emphasize, BPI's liability proceeds from a breach of contract. Under Article 1980 of the Civil Code, 'fixed, savings, and current deposits of money in banks x x x shall be governed by the provisions concerning simple loan[s].'" — This passage establishes the legal character of the bank-depositor relationship as a contract of mutuum, forming the doctrinal basis for BPI's liability for breach of its contractual obligation to secure respondent's accounts.

• "In any case, it is clear that the civil liability upon which Dela Peña was being held liable by the CA is totally distinct and separate from the source of BPI's liability. Thus, BPI and Dela Peña's respective liabilities cannot be deemed joint and solidary." — This articulates the ratio decidendi for the modification striking down solidary liability, distinguishing contractual breach from criminal liability as separate sources of obligation.

• "The instant petition demonstrates no such exceptional circumstance." — This sentence applies the doctrine that CA factual findings are binding in Rule 45 petitions absent gross misperception or manifest bias, confirming that the Court would not disturb the CA's factual findings on unauthorized withdrawals and forgery.

• Pascual vs. Burgos, et al., 776 Phil. 167 (2016) — Cited for the doctrine that CA factual findings are binding on the Supreme Court even when the CA reverses the trial court's findings, so long as the CA's findings are borne out by the record or based on substantial evidence. The Court relied on this principle to decline review of the CA's factual findings.

• Sps. Salonga vs. Sps. Concepcion, 507 Phil. 287 (2005) — Cited by BPI for the proposition that a bare claim of forgery is insufficient. The Court distinguished this case, finding that forgery was proven not by a bare claim but by Fariñas' testimony, standard signatures, and a handwriting expert's report.

• Nacar vs. Gallery Frames, et al., 716 Phil. 267 (2013) — Controlling precedent for the modified guidelines on computing legal interest pursuant to BSP-MB Circular No. 799. The Court applied the Nacar framework to adjust the interest rate from 12% per annum (until June 30, 2013) to 6% per annum (from July 1, 2013 until satisfaction).

• Patula vs. People, 685 Phil. 376 (2012) — Cited for the rule on when authentication of private documents is not required, including when genuineness and authenticity have been admitted or not specifically denied under oath.

• DBP vs. Traders Royal Bank, et al., 642 Phil. 547 (2010) — Cited for the enumeration of recognized exceptions to the rule that CA factual findings are binding on the Supreme Court.

• Article 1980, Civil Code — Provides that fixed, savings, and current deposits of money in banks shall be governed by the provisions concerning simple loans. Applied to characterize the bank-depositor relationship as a contract of mutuum, forming the basis of BPI's contractual liability for allowing unauthorized withdrawals.

• Article 1170, Civil Code — Provides that those guilty of negligence in the performance of their obligations, and those who in any manner contravene the tenor thereof, are liable for damages. Applied to hold BPI liable for breach of its contractual obligation to secure respondent's accounts.

• Article 2177, Civil Code — Provides that responsibility for fault or negligence under quasi-delict is entirely separate and distinct from civil liability arising from negligence under the Penal Code, and that the plaintiff cannot recover damages twice for the same act or omission. Applied to preclude solidary liability between BPI and Dela Peña and to avoid double recovery.

• Article 2208(11), Civil Code — Authorizes recovery of attorney's fees where the court deems it just and equitable. Applied to sustain the award of P100,000.00 in attorney's fees.

• Section 1, Rule 111, Revised Rules of Criminal Procedure — Provides that the civil action for recovery of civil liability arising from a crime is deemed instituted with the criminal action unless waived, reserved, or previously instituted. Applied to determine that respondent's action for actual damages against Dela Peña was deemed instituted with the estafa criminal case.

• Section 8, Rule 8, Rules of Court — Provides that the failure to specifically deny under oath the genuineness and due execution of an actionable document results in an implied admission. Applied by the CA to find that BPI's failure to specifically deny the genuineness of the questioned exhibits constituted implied admission.

• Section 20, Rule 132, Rules of Court — Requires identification or authentication of documents as a condition for admissibility. BPI invoked this provision, but the Court found it inapplicable because BPI's judicial admissions dispensed with the authentication requirement.

• Section 21, Rule 132, Rules of Court — Provides an exception to the authentication requirement for ancient documents. Cited as one of the circumstances where authentication of a private document is not required.

Leonardo-De Castro, C. J. (Chairperson), Del Castillo, and Caguioa, JJ., concurred. Bersamin, J., was on official business.