BPI v.

SUAREZ
ISSUE:
FACTS: Suarez represents a client who wants to buy parcels of land Whether or not BPI was negligent in handling the account of their client?
without having to directly deal with the land owners. They made Whether or not the award for damages is proper?
arrangements that Suarez will make the transactions on his behalf to Whether or not Suarez could be held liable to pay for the service charge
make it appear he is the one buying the lots. The client issued a check imposed by PCHRR?
from Rizal Commercial Banking Co. to be credited to the checking
account of Suarez with BPI in the amount of P19,129,100.00 as RULING: The Supreme Court held that for BPI to be held negligent in
consideration to the lots. Knowing that the bank observes a 3-day handling the account of Suarez it should be established whether BPI
clearing check policy, he asked his secretary to call BPI if the RCBC check actually made the confirmation on the same-day crediting of the RCBC
was already credited to his account on the same day the check was issued check on his account. He solely based such confirmation from his
by his client. Upon the confirmation of his secretary from BPI that the secretary who failed to identify the male bank employee who allegedly
amount was already credited to his account, he subsequently issued 5 made the assurance on such fact and they failed to prove whether the
checks to the land owners and left to the US for a vacation the next day. said bank employee is authorized by the bank to disclose information
He was thereafter informed by his secretary that the 5 checks were about their depositor’s bank account to someone other than the
dishonored on June 16, 1997, the same day the 5 checks were issued and depositor himself. The same-day clearing of check deposits requires
he incurred charges because of it. On June 19, 1997, the payees again approval from the bank officials which Suarez failed to prove of having
presented the 5 checks and this time they were honored rendering the secured such approval to the proper bank officials. Thus, BPI is not
account of Suarez to be sufficiently funded. Suarez demanded an apology estopped from dishonoring the checks for inadequate funds on his
from BPI and for the reversal of the charges incurred from his account. account because the RCBC check remained uncleared at that time. The
His checks were apparently returned due to “drawn against insufficient bank was not negligent in handling the account of Suarez.
funds” (DAIF) instead of “drawn against uncollected deposit (DAUD).
Upon examination of the checks, Suarez insisted that the checks were The court finds it improper to award Suarez for moral and actual
tampered where the DAIF mark on the check was changed to DAUD. He damages. To qualify for moral damages it must be shown that the
sued the bank for damages and rejected the bank’s offer to reverse the plaintiff suffered injury, the act or omission primarily as the proximate
charges from his account. The RTC ruled in favor of Suarez awarding him cause of such injury. Suarez failed to establish that the injury he suffered
actual, moral and exemplary damages and attorney’s fees. On appeal, the is due to the erroneous marking on the check. The humiliation he
Court of Appeals reaffirmed the RTC decision after establishing that sustained from his client is the result of a justified dishonoring of his
there were indeed intercalations made on the DAIF marking to make it checks. The bank was justified in dishonoring the check therefore it is
appear as DAUD. The court finds it proper to award moral and exemplary not liable for actual damages as well. BPI was also justified in debiting
damages because Suarez could be criminally held liable in violation of BP the charges incurred by Suarez from his account due to the dishonored
22 if the reason of dishonoring the check is due to DAIF. Although he may check pursuant to the PCHRR rules. The banking institution however is
not have been liable for a criminal prosecution, he also suffered impressed with public interest. It should therefore observe the highest
humiliation from his client because the land owners aborted their degree of diligence in handling the account of their clients. Suarez has
transaction thinking he is not capable of fulfilling his obligation. The act the right to expect such high degree of care on his account therefore he
of reversion of the bank on the charges imposed on Suarez’s account is is entitled to a nominal damage of P75,000.
tantamount to their admission of having committed blunder in handling
the account of their client. The bank however insisted that Suarez is
liable for paying the charges mandated by Philippine Clearing House
Rules and Regulations (PCHRR).
ALLIED BANK v. LIM SIO WAN December 14, 1983: upon the maturity date of the first money market
placement, Lim Sio Wan went to Allied to withdraw it. She was then
FACTS: Lim Sio Wan (deposited 1st money market) > Allied Bank > (pre- informed that the placement had been pre-terminated upon her
terminated and withdrawn) Santos > (through forged indorsement of instructions which she denied.
Lim Sio Wan deposited in FCC account) Metrobank > (release in
exchange of undertaking of reimbursement) FCC > (through Santos, as Lim Sio Wan filed with the RTC against Allied to recover the proceeds of
officer of Producers bank, deposited money market) Producers Bank her first money market placement. Allied filed a third party
complaint against Metrobank and Santos Metrobank filed a fourth party
September 21, 1983: FCC had deposited a money market placement for complaint against FCC. FCC, for its part, filed a fifth party
P 2M with Producers Bank. Santos was the money market trader complaint against Producers Bank. Summons were duly served upon all
assigned to handle FCC’s account, and such deposit is evidenced by the parties except for Santos, who was no longer connected with
Official Receipt and a Letter. When the placement matured, FCC Producers Bank
demanded the payment of the proceeds of the placement.
May 15, 1984: Allied informed Metrobank that the signature on the
November 14, 1983: Lim Sio Wan deposited with Allied Banking check was forged. Metrobank withheld the amount represented by the
Corporation (Allied) a money market placement of P 1,152,597.35 for a check from FCC. Metrobank agreed to release the amount to FCC after
term of 31 days the FCC executed an undertaking, promising to indemnify Metrobank in
case it was made to reimburse the amount. Lim Sio Wan thereafter filed
December 5, 1983: a person claiming to be Lim Sio Wan called up an amended complaint to include Metrobank as a party-defendant, along
Cristina So, an officer of Allied, and instructed the latter to pre-terminate with Allied.
Lim Sio Wan’s money market placement, to issue a manager’s check
representing the proceeds of the placement, and to give the check to  RTC : Allied Bank to pay Lim Sio Wan plus damages and atty. fees
Deborah Dee Santos who would pick up the check. Lim Sio Wan
described the appearance of Santos. Santos arrived at the bank and  Allied Bank’s cross-claim against Metrobank is DISMISSED.
signed the application form for a manager’s check to be issued. The bank
issued Manager’s Check representing the proceeds of Lim Sio Wan’s  Metrobank’s third-party complaint as against Filipinas Cement
money market placement in the name of Lim Sio Wan, as payee, cross- Corporation is DISMISSED
checked "For Payee’s Account Only" and given to Santos. Allied
manager’s check was deposited in the account of Filipinas Cement  Filipinas Cement Corporation’s fourth-party complaint against
Corporation (FCC) at Metropolitan Bank and Trust Co. Producer’s Bank is DISMISSED
(Metrobank), with the forged signature of Lim Sio Wan as indorser.
Metrobank stamped a guaranty on the check, which reads: "All prior  CA: Modified. Allied Banking Corporation to pay 60% and
endorsements and/or lack of endorsement guaranteed." Upon the Metropolitan Bank and Trust Company 40%
presentment of the check, Allied funded the check even without checking
the authenticity of Lim Sio Wan’s purported indorsement, and the ISSUE: W/N Allied should be solely liable to Lim Sio Wan.
amount on the face of the check was credited to the account of FCC
HELD: YES. CA affirmed. Modified Porudcers Bank to reimburse Allied
December 9, 1983: Lim Sio Wan deposited with Allied a second money and Metrobank. Articles 1953 and 1980 of the Civil Code
market placement to mature on January 9, 1984.
Art. 1953. A person who receives a loan of money or any other fungible contributed to the easier release of Lim Sio Wan’s money and
thing acquires the ownership thereof, and is bound to pay to the creditor perpetuation of the fraud.
an equal amount of the same kind and quality.
Given the relative participation of Allied and Metrobank to the instant
Art. 1980. Fixed, savings, and current deposits of money in banks and case, both banks cannot be adjudged as equally liable. Hence, the 60:40
similar institutions shall be governed by the provisions concerning ratio of the liabilities of Allied and Metrobank, as ruled by the CA, must
simple loan. be upheld.

Bank deposit is in the nature of a simple loan or mutuum. A money FCC, having no participation in the negotiation of the check and in the
market is a market dealing in standardized short-term forgery of Lim Sio Wan’s indorsement, can raise the real defense of
credit instruments (involving large amounts) where lenders and forgery as against both banks. Producers Bank was unjustly enriched at
borrowers do not deal directly with each other but through a middle man the expense of Lim Sio Wan, so Producers Bank should reimburse Allied
or dealer in open market. In a money market transaction, the investor is and Metrobank for the amounts ordered to pay Lim Sio Wan.
a lender who loans his money to a borrower through a middleman or
dealer.
ASSOCIATED BANK v. TAN
Lim Sio Wan, as creditor of the bank for her money market placement, is
entitled to payment upon her request, or upon maturity of the FACTS: Respondent Tan is a businessman and a regular depositor-
placement, or until the bank is released from its obligation as debtor. creditor of the petitioner, Associated Bank. Sometime in September
1990, he deposited a postdated check with the petitioner in the amount
 GR: collecting bank which indorses a check bearing a forged of P101,000 issued to him by a certain Willy Cheng from Tarlac. The
indorsement and presents it to the drawee bank guarantees all prior check was duly entered in his bank record. Allegedly, upon advice and
indorsements, including the forged indorsement itself, and instruction of petitioner that theP101,000 check was already cleared and
ultimately should be held liable therefor backed up by sufficient funds, respondent, on the same date, withdrew
the sum of P240,000 from his account leaving a balance of P57,793.45. A
 EX: when the issuance of the check itself was attended with day after, TAN deposited the amount of P50,000 making his existing
negligence. balance in the amount of P107,793.45, because he has issued several
checks to his business partners. However, his suppliers and business
Allied Bank is negligent in issuing the manager’s check and in partners went back to him alleging that the checks he issued bounced for
transmitting it to Santos without even a written authorization. Allied did insufficiency of funds. Thereafter, respondent informed petitioner to
not even ask for the certificate evidencing the money market placement take positive steps regarding the matter for he has adequate and
or call up Lim Sio Wan at her residence or office to confirm her sufficient funds to pay the amount of the subject checks. Nonetheless,
instructions. Allied’s negligence must be considered as the proximate petitioner did not bother nor offer any apology regarding the incident.
cause of the resulting loss. Respondent Tan filed a Complaint for Damages on December 19, 1990,
with the RTC against petitioner. The trial court rendered a decision in
When Metrobank indorsed the check without verifying the authenticity favor of respondent and ordered petitioner to pay damages and
of Lim Sio Wan’s indorsement and when it accepted the check despite attorney’s fees. Appellate court affirmed the lower court’s decision. CA
the fact that it was cross-checked payable to payee’s account only. It ruled that the bank should not have authorized the withdrawal of the
value of the deposited check prior to its clearing. Petitioner filed a amounting to P37,455,410.54 including the P2,000,000.00 paid to
Petition for Review before the Supreme Court.
Franco.

ISSUE: W/N petitioner has the right to debit the amount of the
Franco issued two checks which were dishonoured upon presentment
dishonored check from the account of respondent on the ground that the
check was withdrawn by respondent prior to its clearing for payment due to garnishment of his account filed by BPI.

HELD: The Petition has no merit. BPI claimed that it had a better right to the amounts which consisted of
part of the money allegedly fraudulently withdrawn from it by Tevesteco
The real issue here is not so much the right of petitioner to debit and ending up in Franco’s account. BPI urges us that the legal
respondent’s account but, rather, the manner in which it exercised such consequence of FMIC’s forgery claim is that the money transferred by
right. Banks are granted by law the right to debit the value of a BPI to Tevesteco is its own, and considering that it was able to recover
dishonored check from a depositor’s account but they must do so with
the highest degree of care, so as not to prejudice the depositor unduly. possession of the same when the money was redeposited by Franco, it
The degree of diligence required of banks is more than that of a good had the right to set up its ownership thereon and freeze Franco’s
father of a family where the fiduciary nature of their relationship with accounts.
their depositors is concerned. In this case, petitioner did not treat
respondent’s account with the highest degree of care. Respondent ISSUE: WON the bank has a better right to the deposits in Franco’s
withdrew his money upon the advice of petitioner that his money was
account.
already cleared. It is petitioner’s premature authorization of the
withdrawal that caused the respondent’s account balance to fall to
insufficient levels, and the subsequent dishonor of his own checks for HELD: No. Significantly, while Article 559 permits an owner who has lost
lack of funds. or has been unlawfully deprived of a movable to recover the exact same
thing from the current possessor, BPI simply claims ownership of the
BPI v. CA equivalent amount of money, i.e., the value thereof, which it had
mistakenly debited from FMIC’s account and credited to Tevesteco’s, and
FACTS: Franco opened 3 accounts with BPI with the total amount of subsequently traced to Franco’s account.
P2,000,000.00. The said amount used to open these accounts is traceable Money bears no earmarks of peculiar ownership, and this characteristic
to a check issued by Tevesteco. The funding for the P2,000,000.00 check is all the more manifest in the instant case which involves money in a
was part of the P80,000,000.00 debited by BPI from FMIC’s account banking transaction gone awry. Its primary function is to pass from hand
(with a deposit of P100,000,000.00) and credited to Tevesteco’s account to hand as a medium of exchange, without other evidence of its title.
pursuant to an Authority to Debit which was allegedly forged as claimed Money, which had been passed through various transactions in the
by FMIC. general course of banking business, even if of traceable origin, is no
exception.
Tevesteco effected several withdrawals already from its account
 It appears, however, that the signatures of FMIC’s officers on the
Authority to Debit were forged.8 On September 4, 1989, Antonio
BPI FAMILY BANK v. FRANCO Ong,9 upon being shown the Authority to Debit, personally declared his
signature therein to be a forgery. Unfortunately, Tevesteco had already
effected several withdrawals from its current account (to which had
Banks are exhorted to treat the accounts of their depositors with been credited the ₱80,000,000.00 covered by the forged Authority to
meticulous care and utmost fidelity. We reiterate this exhortation in the Debit) amounting to ₱37,455,410.54, including the ₱2,000,000.00 paid
case at bench. to Franco.

Before us is a Petition for Review on Certiorari seeking the reversal of On September 8, 1989, impelled by the need to protect its interests in
the Court of Appeals (CA) Decision1 in CA-G.R. CV No. 43424 which light of FMIC’s forgery claim, BPI-FB, thru its Senior Vice-President,
affirmed with modification the judgment2 of the Regional Trial Court, Severino Coronacion, instructed Jesus Arangorin10 to debit Franco’s
Branch 55, Manila (Manila RTC), in Civil Case No. 90-53295. savings and current accounts for the amounts remaining
therein.11 However, Franco’s time deposit account could not be debited
This case has its genesis in an ostensible fraud perpetrated on the due to the capacity limitations of BPI-FB’s computer.12
petitioner BPI Family Bank (BPI-FB) allegedly by respondent Amado
Franco (Franco) in conspiracy with other individuals, 3 some of whom In the meantime, two checks13 drawn by Franco against his BPI-FB
opened and maintained separate accounts with BPI-FB, San Francisco current account were dishonored upon presentment for payment, and
del Monte (SFDM) branch, in a series of transactions. stamped with a notation "account under garnishment." Apparently,
Franco’s current account was garnished by virtue of an Order of
On August 15, 1989, Tevesteco Arrastre-Stevedoring Co., Inc. Attachment issued by the Regional Trial Court of Makati (Makati RTC) in
(Tevesteco) opened a savings and current account with BPI-FB. Soon Civil Case No. 89-4996 (Makati Case), which had been filed by BPI-FB
thereafter, or on August 25, 1989, First Metro Investment Corporation against Franco et al.,14 to recover the ₱37,455,410.54 representing
(FMIC) also opened a time deposit account with the same branch of BPI- Tevesteco’s total withdrawals from its account.
FB with a deposit of ₱100,000,000.00, to mature one year thence.
Notably, the dishonored checks were issued by Franco and presented for
Subsequently, on August 31, 1989, Franco opened three accounts, payment at BPI-FB prior to Franco’s receipt of notice that his accounts
namely, a current,4 savings,5 and time deposit,6with BPI-FB. The current were under garnishment.15 In fact, at the time the Notice of Garnishment
and savings accounts were respectively funded with an initial deposit of dated September 27, 1989 was served on BPI-FB, Franco had yet to be
₱500,000.00 each, while the time deposit account had ₱1,000,000.00 impleaded in the Makati case where the writ of attachment was issued.
with a maturity date of August 31, 1990. The total amount of
₱2,000,000.00 used to open these accounts is traceable to a check issued It was only on May 15, 1990, through the service of a copy of the Second
by Tevesteco allegedly in consideration of Franco’s introduction of Amended Complaint in Civil Case No. 89-4996, that Franco was
Eladio Teves,7 who was looking for a conduit bank to facilitate impleaded in the Makati case.16 Immediately, upon receipt of such copy,
Tevesteco’s business transactions, to Jaime Sebastian, who was then BPI- Franco filed a Motion to Discharge Attachment which the Makati RTC
FB SFDM’s Branch Manager. In turn, the funding for the ₱2,000,000.00 granted on May 16, 1990. The Order Lifting the Order of Attachment was
check was part of the ₱80,000,000.00 debited by BPI-FB from FMIC’s served on BPI-FB on even date, with Franco demanding the release to
time deposit account and credited to Tevesteco’s current account him of the funds in his savings and current accounts. Jesus Arangorin,
pursuant to an Authority to Debit purportedly signed by FMIC’s officers. BPI-FB’s new manager, could not forthwith comply with the demand as
the funds, as previously stated, had already been debited because of the case was elevated to this Court docketed as BPI Family Bank v.
FMIC’s forgery claim. As such, BPI-FB’s computer at the SFDM Branch Buenaventura,21 we ruled that BPI-FB had no right to freeze
indicated that the current account record was "not on file." Buenaventura, et al.’s accounts and adjudged BPI-FB liable therefor, in
addition to damages.
With respect to Franco’s savings account, it appears that Franco agreed
to an arrangement, as a favor to Sebastian, whereby ₱400,000.00 from Meanwhile, BPI-FB filed separate civil and criminal cases against those
his savings account was temporarily transferred to Domingo Quiaoit’s believed to be the perpetrators of the multi-million peso scam.22 In the
savings account, subject to its immediate return upon issuance of a criminal case, Franco, along with the other accused, except for Manuel
certificate of deposit which Quiaoit needed in connection with his visa Bienvenida who was still at large, were acquitted of the crime of Estafa
application at the Taiwan Embassy. As part of the arrangement, as defined and penalized under Article 351, par. 2(a) of the Revised Penal
Sebastian retained custody of Quiaoit’s savings account passbook to Code.23 However, the civil case24 remains under litigation and the
ensure that no withdrawal would be effected therefrom, and to preserve respective rights and liabilities of the parties have yet to be adjudicated.
Franco’s deposits.
Consequently, in light of BPI-FB’s refusal to heed Franco’s demands to
On May 17, 1990, Franco pre-terminated his time deposit account. BPI- unfreeze his accounts and release his deposits therein, the latter filed on
FB deducted the amount of ₱63,189.00 from the remaining balance of June 4, 1990 with the Manila RTC the subject suit. In his complaint,
the time deposit account representing advance interest paid to him. Franco prayed for the following reliefs: (1) the interest on the remaining
balance25 of his current account which was eventually released to him on
These transactions spawned a number of cases, some of which we had October 31, 1991; (2) the balance26 on his savings account, plus interest
already resolved. thereon; (3) the advance interest27 paid to him which had been deducted
when he pre-terminated his time deposit account; and (4) the payment
FMIC filed a complaint against BPI-FB for the recovery of the amount of of actual, moral and exemplary damages, as well as attorney’s fees.
₱80,000,000.00 debited from its account.17The case eventually reached
this Court, and in BPI Family Savings Bank, Inc. v. First Metro Investment BPI-FB traversed this complaint, insisting that it was correct in freezing
Corporation,18 we upheld the finding of the courts below that BPI-FB the accounts of Franco and refusing to release his deposits, claiming that
failed to exercise the degree of diligence required by the nature of its it had a better right to the amounts which consisted of part of the money
obligation to treat the accounts of its depositors with meticulous care. allegedly fraudulently withdrawn from it by Tevesteco and ending up in
Thus, BPI-FB was found liable to FMIC for the debited amount in its time Franco’s accounts. BPI-FB asseverated that the claimed consideration of
deposit. It was ordered to pay ₱65,332,321.99 plus interest at 17% per ₱2,000,000.00 for the introduction facilitated by Franco between George
annum from August 29, 1989 until fully restored. In turn, the 17% shall Daantos and Eladio Teves, on the one hand, and Jaime Sebastian, on the
itself earn interest at 12% from October 4, 1989 until fully paid. other, spoke volumes of Franco’s participation in the fraudulent
transaction.
In a related case, Edgardo Buenaventura, Myrna Lizardo and Yolanda
Tica (Buenaventura, et al.),19 recipients of a ₱500,000.00 check On August 4, 1993, the Manila RTC rendered judgment, the dispositive
proceeding from the ₱80,000,000.00 mistakenly credited to Tevesteco, portion of which reads as follows:
likewise filed suit. Buenaventura et al., as in the case of Franco, were also
prevented from effecting withdrawals20 from their current account with
BPI-FB, Bonifacio Market, Edsa, Caloocan City Branch. Likewise, when
WHEREFORE, in view of all the foregoing, judgment is hereby rendered Cost against [BPI-FB].
in favor of [Franco] and against [BPI-FB], ordering the latter to pay to the
former the following sums: SO ORDERED.29

1. ₱76,500.00 representing the legal rate of interest on the In this recourse, BPI-FB ascribes error to the CA when it ruled that: (1)
amount of ₱450,000.00 from May 18, 1990 to October 31, 1991; Franco had a better right to the deposits in the subject accounts which
are part of the proceeds of a forged Authority to Debit; (2) Franco is
2. ₱498,973.23 representing the balance on [Franco’s] savings entitled to interest on his current account; (3) Franco can recover the
account as of May 18, 1990, together with the interest thereon ₱400,000.00 deposit in Quiaoit’s savings account; (4) the dishonor of
in accordance with the bank’s guidelines on the payment Franco’s checks was not legally in order; (5) BPI-FB is liable for interest
therefor; on Franco’s time deposit, and for moral and exemplary damages; and (6)
BPI-FB’s counter-claim has no factual and legal anchor.
3. ₱30,000.00 by way of attorney’s fees; and
The petition is partly meritorious.
4. ₱10,000.00 as nominal damages.
We are in full accord with the common ruling of the lower courts that
The counterclaim of the defendant is DISMISSED for lack of factual and BPI-FB cannot unilaterally freeze Franco’s accounts and preclude him
legal anchor. from withdrawing his deposits. However, contrary to the appellate
court’s ruling, we hold that Franco is not entitled to unearned interest on
Costs against [BPI-FB]. the time deposit as well as to moral and exemplary damages.

SO ORDERED.28 First. On the issue of who has a better right to the deposits in Franco’s
accounts, BPI-FB urges us that the legal consequence of FMIC’s forgery
claim is that the money transferred by BPI-FB to Tevesteco is its own,
Unsatisfied with the decision, both parties filed their respective appeals and considering that it was able to recover possession of the same when
before the CA. Franco confined his appeal to the Manila RTC’s denial of the money was redeposited by Franco, it had the right to set up its
his claim for moral and exemplary damages, and the diminutive award ownership thereon and freeze Franco’s accounts.
of attorney’s fees. In affirming with modification the lower court’s
decision, the appellate court decreed, to wit:
BPI-FB contends that its position is not unlike that of an owner of
personal property who regains possession after it is stolen, and to
WHEREFORE, foregoing considered, the appealed decision is hereby illustrate this point, BPI-FB gives the following example: where X’s
AFFIRMED with modification ordering [BPI-FB] to pay [Franco] television set is stolen by Y who thereafter sells it to Z, and where Z
₱63,189.00 representing the interest deducted from the time deposit of unwittingly entrusts possession of the TV set to X, the latter would have
plaintiff-appellant. ₱200,000.00 as moral damages and ₱100,000.00 as the right to keep possession of the property and preclude Z from
exemplary damages, deleting the award of nominal damages (in view of recovering possession thereof. To bolster its position, BPI-FB cites
the award of moral and exemplary damages) and increasing the award Article 559 of the Civil Code, which provides:
of attorney’s fees from ₱30,000.00 to ₱75,000.00.
Article 559. The possession of movable property acquired in good faith through various transactions in the general course of banking business,
is equivalent to a title. Nevertheless, one who has lost any movable or even if of traceable origin, is no exception.
has been unlawfully deprived thereof, may recover it from the person in
possession of the same. Thus, inasmuch as what is involved is not a specific or determinate
personal property, BPI-FB’s illustrative example, ostensibly based on
If the possessor of a movable lost or of which the owner has been Article 559, is inapplicable to the instant case.
unlawfully deprived, has acquired it in good faith at a public sale, the
owner cannot obtain its return without reimbursing the price paid There is no doubt that BPI-FB owns the deposited monies in the accounts
therefor. of Franco, but not as a legal consequence of its unauthorized transfer of
FMIC’s deposits to Tevesteco’s account. BPI-FB conveniently forgets that
BPI-FB’s argument is unsound. To begin with, the movable property the deposit of money in banks is governed by the Civil Code provisions
mentioned in Article 559 of the Civil Code pertains to a specific or on simple loan or mutuum.36 As there is a debtor-creditor relationship
determinate thing.30 A determinate or specific thing is one that is between a bank and its depositor, BPI-FB ultimately acquired ownership
individualized and can be identified or distinguished from others of the of Franco’s deposits, but such ownership is coupled with a
same kind.31 corresponding obligation to pay him an equal amount on
demand.37Although BPI-FB owns the deposits in Franco’s accounts, it
In this case, the deposit in Franco’s accounts consists of money which, cannot prevent him from demanding payment of BPI-FB’s obligation by
albeit characterized as a movable, is generic and fungible. 32 The quality drawing checks against his current account, or asking for the release of
of being fungible depends upon the possibility of the property, because the funds in his savings account. Thus, when Franco issued checks drawn
of its nature or the will of the parties, being substituted by others of the against his current account, he had every right as creditor to expect that
same kind, not having a distinct individuality.33 those checks would be honored by BPI-FB as debtor.

Significantly, while Article 559 permits an owner who has lost or has More importantly, BPI-FB does not have a unilateral right to freeze the
been unlawfully deprived of a movable to recover the exact same thing accounts of Franco based on its mere suspicion that the funds therein
from the current possessor, BPI-FB simply claims ownership of the were proceeds of the multi-million peso scam Franco was allegedly
equivalent amount of money, i.e., the value thereof, which it had involved in. To grant BPI-FB, or any bank for that matter, the right to take
mistakenly debited from FMIC’s account and credited to Tevesteco’s, and whatever action it pleases on deposits which it supposes are derived
subsequently traced to Franco’s account. In fact, this is what BPI-FB did from shady transactions, would open the floodgates of public distrust in
in filing the Makati Case against Franco, et al. It staked its claim on the the banking industry.
money itself which passed from one account to another, commencing
with the forged Authority to Debit. Our pronouncement in Simex International (Manila), Inc. v. Court of
Appeals38 continues to resonate, thus:
It bears emphasizing that money bears no earmarks of peculiar
ownership,34 and this characteristic is all the more manifest in the The banking system is an indispensable institution in the modern world
instant case which involves money in a banking transaction gone awry. and plays a vital role in the economic life of every civilized nation.
Its primary function is to pass from hand to hand as a medium of Whether as mere passive entities for the safekeeping and saving of
exchange, without other evidence of its title.35 Money, which had passed money or as active instruments of business and commerce, banks have
become an ubiquitous presence among the people, who have come to
regard them with respect and even gratitude and, most of all, confidence. possible the present predicament, must bear the resulting loss or
Thus, even the humble wage-earner has not hesitated to entrust his life’s inconvenience.
savings to the bank of his choice, knowing that they will be safe in its
custody and will even earn some interest for him. The ordinary person, Second. With respect to its liability for interest on Franco’s current
with equal faith, usually maintains a modest checking account for account, BPI-FB argues that its non-compliance with the Makati RTC’s
security and convenience in the settling of his monthly bills and the Order Lifting the Order of Attachment and the legal consequences
payment of ordinary expenses. x x x. thereof, is a matter that ought to be taken up in that court.

In every case, the depositor expects the bank to treat his account with The argument is tenuous. We agree with the succinct holding of the
the utmost fidelity, whether such account consists only of a few hundred appellate court in this respect. The Manila RTC’s order to pay interests
pesos or of millions. The bank must record every single transaction on Franco’s current account arose from BPI-FB’s unjustified refusal to
accurately, down to the last centavo, and as promptly as possible. This comply with its obligation to pay Franco pursuant to their contract of
has to be done if the account is to reflect at any given time the amount of mutuum. In other words, from the time BPI-FB refused Franco’s demand
money the depositor can dispose of as he sees fit, confident that the bank for the release of the deposits in his current account, specifically, from
will deliver it as and to whomever directs. A blunder on the part of the May 17, 1990, interest at the rate of 12% began to accrue thereon.39
bank, such as the dishonor of the check without good reason, can cause
the depositor not a little embarrassment if not also financial loss and Undeniably, the Makati RTC is vested with the authority to determine the
perhaps even civil and criminal litigation. legal consequences of BPI-FB’s non-compliance with the Order Lifting
the Order of Attachment. However, such authority does not preclude the
The point is that as a business affected with public interest and because Manila RTC from ruling on BPI-FB’s liability to Franco for payment of
of the nature of its functions, the bank is under obligation to treat the interest based on its continued and unjustified refusal to perform a
accounts of its depositors with meticulous care, always having in mind contractual obligation upon demand. After all, this was the core issue
the fiduciary nature of their relationship. x x x. raised by Franco in his complaint before the Manila RTC.

Ineluctably, BPI-FB, as the trustee in the fiduciary relationship, is duty Third. As to the award to Franco of the deposits in Quiaoit’s account, we
bound to know the signatures of its customers. Having failed to detect find no reason to depart from the factual findings of both the Manila RTC
the forgery in the Authority to Debit and in the process inadvertently and the CA.
facilitate the FMIC-Tevesteco transfer, BPI-FB cannot now shift liability
thereon to Franco and the other payees of checks issued by Tevesteco, Noteworthy is the fact that Quiaoit himself testified that the deposits in
or prevent withdrawals from their respective accounts without the his account are actually owned by Franco who simply accommodated
appropriate court writ or a favorable final judgment. Jaime Sebastian’s request to temporarily transfer ₱400,000.00 from
Franco’s savings account to Quiaoit’s account.40 His testimony cannot be
Further, it boggles the mind why BPI-FB, even without delving into the characterized as hearsay as the records reveal that he had personal
authenticity of the signature in the Authority to Debit, effected the knowledge of the arrangement made between Franco, Sebastian and
transfer of ₱80,000,000.00 from FMIC’s to Tevesteco’s account, when himself.41
FMIC’s account was a time deposit and it had already paid advance
interest to FMIC. Considering that there is as yet no indubitable evidence BPI-FB makes capital of Franco’s belated allegation relative to this
establishing Franco’s participation in the forgery, he remains an particular arrangement. It insists that the transaction with Quiaoit was
innocent party. As between him and BPI-FB, the latter, which made
not specifically alleged in Franco’s complaint before the Manila RTC. papers upon the parties affected is designed to comply with the
However, it appears that BPI-FB had impliedly consented to the trial of elementary requisites of due process. Franco was entitled, as a matter of
this issue given its extensive cross-examination of Quiaoit. right, to notice, if the requirements of due process are to be observed.
Yet, he received a copy of the Notice of Garnishment only on September
Section 5, Rule 10 of the Rules of Court provides: 27, 1989, several days after the two checks he issued were dishonored
by BPI-FB on September 20 and 21, 1989. Verily, it was premature for
Section 5. Amendment to conform to or authorize presentation of BPI-FB to freeze Franco’s accounts without even awaiting service of the
evidence.— When issues not raised by the pleadings are tried with the Makati RTC’s Notice of Garnishment on Franco.
express or implied consent of the parties, they shall be treated in all
respects as if they had been raised in the pleadings. Such amendment of Additionally, it should be remembered that the enforcement of a writ of
the pleadings as may be necessary to cause them to conform to the attachment cannot be made without including in the main suit the owner
evidence and to raise these issues may be made upon motion of any party of the property attached by virtue thereof. Section 5, Rule 13 of the Rules
at any time, even after judgment; but failure to amend does not affect the of Court specifically provides that "no levy or attachment pursuant to the
result of the trial of these issues. If evidence is objected to at the trial on writ issued x x x shall be enforced unless it is preceded, or
the ground that it is now within the issues made by the pleadings, the contemporaneously accompanied, by service of summons, together with
court may allow the pleadings to be amended and shall do so with a copy of the complaint, the application for attachment, on the defendant
liberality if the presentation of the merits of the action and the ends of within the Philippines."
substantial justice will be subserved thereby. The court may grant a
continuance to enable the amendment to be made. (Emphasis supplied) Franco was impleaded as party-defendant only on May 15, 1990. The
Makati RTC had yet to acquire jurisdiction over the person of Franco
In all, BPI-FB’s argument that this case is not the right forum for Franco when BPI-FB garnished his accounts.43 Effectively, therefore, the Makati
to recover the ₱400,000.00 begs the issue. To reiterate, Quiaoit, RTC had no authority yet to bind the deposits of Franco through the writ
testifying during the trial, unequivocally disclaimed ownership of the of attachment, and consequently, there was no legal basis for BPI-FB to
funds in his account, and pointed to Franco as the actual owner thereof. dishonor the checks issued by Franco.
Clearly, Franco’s action for the recovery of his deposits appropriately
covers the deposits in Quiaoit’s account. Fifth. Anent the CA’s finding that BPI-FB was in bad faith and as such
liable for the advance interest it deducted from Franco’s time deposit
Fourth. Notwithstanding all the foregoing, BPI-FB continues to insist that account, and for moral as well as exemplary damages, we find it proper
the dishonor of Franco’s checks respectively dated September 11 and 18, to reinstate the ruling of the trial court, and allow only the recovery of
1989 was legally in order in view of the Makati RTC’s supplemental writ nominal damages in the amount of ₱10,000.00. However, we retain the
of attachment issued on September 14, 1989. It posits that as the party CA’s award of ₱75,000.00 as attorney’s fees.
that applied for the writ of attachment before the Makati RTC, it need not
be served with the Notice of Garnishment before it could place Franco’s In granting Franco’s prayer for interest on his time deposit account and
accounts under garnishment. for moral and exemplary damages, the CA attributed bad faith to BPI-FB
because it (1) completely disregarded its obligation to Franco; (2)
The argument is specious. In this argument, we perceive BPI-FB’s clever misleadingly claimed that Franco’s deposits were under garnishment;
but transparent ploy to circumvent Section 4,42 Rule 13 of the Rules of (3) misrepresented that Franco’s current account was not on file; and (4)
Court. It should be noted that the strict requirement on service of court refused to return the ₱400,000.00 despite the fact that the ostensible
owner, Quiaoit, wanted the amount returned to Franco.
In this regard, we are guided by Article 2201 of the Civil Code which for it. One may err, but error alone is not a ground for granting such
provides: damages.48

Article 2201. In contracts and quasi-contracts, the damages for which the An award of moral damages contemplates the existence of the following
obligor who acted in good faith is liable shall be those that are the natural requisites: (1) there must be an injury clearly sustained by the claimant,
and probable consequences of the breach of the obligation, and which whether physical, mental or psychological; (2) there must be a culpable
the parties have foreseen or could have reasonable foreseen at the time act or omission factually established; (3) the wrongful act or omission of
the obligation was constituted. the defendant is the proximate cause of the injury sustained by the
claimant; and (4) the award for damages is predicated on any of the cases
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be stated in Article 2219 of the Civil Code.49
responsible for all damages which may be reasonably attributed to the
non-performance of the obligation. (Emphasis supplied.) Franco could not point to, or identify any particular circumstance in
Article 2219 of the Civil Code,50 upon which to base his claim for moral
We find, as the trial court did, that BPI-FB acted out of the impetus of damages.1âwphi1
self-protection and not out of malevolence or ill will. BPI-FB was not in
the corrupt state of mind contemplated in Article 2201 and should not Thus, not having acted in bad faith, BPI-FB cannot be held liable for
be held liable for all damages now being imputed to it for its breach of moral damages under Article 2220 of the Civil Code for breach of
obligation. For the same reason, it is not liable for the unearned interest contract.51
on the time deposit.
We also deny the claim for exemplary damages. Franco should show that
Bad faith does not simply connote bad judgment or negligence; it he is entitled to moral, temperate, or compensatory damages before the
imports a dishonest purpose or some moral obliquity and conscious court may even consider the question of whether exemplary damages
doing of wrong; it partakes of the nature of fraud.44 We have held that it should be awarded to him.52 As there is no basis for the award of moral
is a breach of a known duty through some motive of interest or ill damages, neither can exemplary damages be granted.
will.45 In the instant case, we cannot attribute to BPI-FB fraud or even a
motive of self-enrichment. As the trial court found, there was no denial While it is a sound policy not to set a premium on the right to
whatsoever by BPI-FB of the existence of the accounts. The computer- litigate,53 we, however, find that Franco is entitled to reasonable
generated document which indicated that the current account was "not attorney’s fees for having been compelled to go to court in order to assert
on file" resulted from the prior debit by BPI-FB of the deposits. The his right. Thus, we affirm the CA’s grant of ₱75,000.00 as attorney’s fees.
remedy of freezing the account, or the garnishment, or even the outright
refusal to honor any transaction thereon was resorted to solely for the Attorney’s fees may be awarded when a party is compelled to litigate or
purpose of holding on to the funds as a security for its intended court incur expenses to protect his interest,54 or when the court deems it just
action,46 and with no other goal but to ensure the integrity of the and equitable.55 In the case at bench, BPI-FB refused to unfreeze the
accounts. deposits of Franco despite the Makati RTC’s Order Lifting the Order of
Attachment and Quiaoit’s unwavering assertion that the ₱400,000.00
We have had occasion to hold that in the absence of fraud or bad was part of Franco’s savings account. This refusal constrained Franco to
faith,47 moral damages cannot be awarded; and that the adverse result incur expenses and litigate for almost two (2) decades in order to protect
of an action does not per se make the action wrongful, or the party liable his interests and recover his deposits. Therefore, this Court deems it just
and equitable to grant Franco ₱75,000.00 as attorney’s fees. The award passbook until L.C. Diaz could open a new account followed by a formal
is reasonable in view of the complexity of the issues and the time it has written request later that day. It was also on the same day that L.C. Diaz
taken for this case to be resolved.56 learned of the unauthorized withdrawal the day before of P300,000 from
its savings account. The withdrawal slip bore the signatures of the
Sixth. As for the dismissal of BPI-FB’s counter-claim, we uphold the authorized signatories of L.C. Diaz, namely Diaz and Rustico L. Murillo.
Manila RTC’s ruling, as affirmed by the CA, that BPI-FB is not entitled to The signatories, however, denied signing the withdrawal slip. A certain
recover ₱3,800,000.00 as actual damages. BPI-FB’s alleged loss of profit Noel Tamayo received the P300,000.
as a result of Franco’s suit is, as already pointed out, of its own making. L.C. Diaz demanded from Solidbank the return of its money but to no
Accordingly, the denial of its counter-claim is in order. avail. Hence, L.C. Diaz filed a Complaint for Recovery of a Sum of Money
against Solidbank with the Regional Trial Court. After trial, the trial court
WHEREFORE, the petition is PARTIALLY GRANTED. The Court of rendered a decision absolving Solidbank and dismissing the
Appeals Decision dated November 29, 1995 is AFFIRMED with the complaint. Court of Appeals reversed the decision of the trial court.
MODIFICATION that the award of unearned interest on the time deposit
and of moral and exemplary damages is DELETED. ISSUE: Whether or not Solidbank must be held liable for the fraudulent
withdrawal on private respondent’s account.
No pronouncement as to costs.
HELD: Solidbank’s tellers must exercise a high degree of diligence in
SO ORDERED. insuring that they return the passbook only to the depositor or his
authorized representative. The tellers know, or should know, that the
CONSOLIDATED BANK v. CA rules on savings account provide that any person in possession of the
passbook is presumptively its owner. If the tellers give the passbook to
FACTS: Solidbank is a domestic banking corporation while private the wrong person, they would be clothing that person presumptive
respondent L.C. Diaz and Company, CPA’s (“L.C. Diaz”), is a professional ownership of the passbook, facilitating unauthorized withdrawals by
partnership engaged in the practice of accounting and which opened a that person. For failing to return the passbook to Calapre, the authorized
savings account with Solidbank. Diaz through its cashier, Mercedes representative of L.C. Diaz, Solidbank and Teller No. 6 presumptively
Macaraya , filled up a savings cash deposit slip and a savings checks failed to observe such high degree of diligence in safeguarding the
deposit slip. Macaraya instructed the messenger of L.C. Diaz, Ismael passbook, and in insuring its return to the party authorized to receive
Calapre, to deposit the money with Solidbank and give him the Solidbank the same. However, L.C. Diaz was guilty of contributory negligence in
passbook. Calapre went to Solidbank and presented to Teller No. 6 the allowing a withdrawal slip signed by its authorized signatories to fall
two deposit slips and the passbook. The teller acknowledged receipt of into the hands of an impostor. Thus, the liability of Solidbank should be
the deposit by returning to Calapre the duplicate copies of the two reduced. Hence, the liability of Solidbank for actual damages was
deposit slips. Since the transaction took time and Calapre had to make reduced to only 60%, the remaining 40% was borne by private
another deposit for L.C. Diaz with Allied Bank, he left the passbook with respondent.
Solidbank. When Calapre returned to Solidbank to retrieve the
passbook, Teller No. 6 informed him that somebody got the passbook.
The contract between the bank and its depositor is governed by the
Calapre went back to L.C. Diaz and reported the incident to Macaraya. provisions of the Civil Code on simple loan. There is a debtor-creditor
The following day,, L.C. Diaz through its Chief Executive Officer, Luis C. relationship between the bank and its depositor. The bank is the debtor
Diaz, called up Solidbank to stop any transaction using the same
and the depositor is the creditor. The law imposes on banks high
standards in view of the fiduciary nature of banking. RA 8791 declares which he was baptized. Under the law, what makes the use of alias illegal
that the State recognizes the “fiduciary nature of banking that requires is the fact that it is being used habitually and publicly in business
high standards of integrity and performance.” This new provision in the transactions without prior authorization by competent authority. In this
general banking law, introduced in 2000, is a statutory affirmation of case, Ursua merely used the name “Oscar Perez” once, it was not used in
Supreme Court decisions holding that “the bank is under obligation to a business transaction, the use of the name was with the consent of Oscar
treat the accounts of its depositors with meticulous care, always having Perez himself, and even if he used a different name, in this instance, he
in mind the fiduciary nature of their relationship.” was not even required to disclose his identity at the Office of the
Ombudsman. When he was requesting a copy of the complaint, he need
not disclose his identity because the complaint is a public record open to
URSUA v. CA the public.
In short, the evils sought to be avoided by the C.A. No. 142 was not
FACTS: In 1989, Cesario Ursua was charged with bribery and brought about when Ursua used a name other than his name. A strict
dishonesty. His lawyer then asked him to get a copy of the complaint application of the law is not warranted. When Ursua used the name of
against him from the Office of the Ombudsman. His lawyer asked him Oscar Perez, no fraud was committed; there was no crime committed
that because the law firm’s messenger, a certain Oscar Perez, was unable punishable under C.A. No. 142. The purpose of the law is to punish evils
to go to the Ombudsman. defined therein so when no such evil was produced by Ursua’s act, said
law need not be applied.
Before going to the Ombudsman, Ursua talked to Perez. He revealed to PEOPLE v. ESTRADA
him that he feels uncomfortable asking for a copy of the complaint
because he is the respondent in the said case. Perez then told him than THE FACTS
he can go there as “Oscar Perez” so that he does not have to reveal his
true identity.
On April 4, 2001, an Information for plunder (docketed
At the Office of the Ombudsman, Ursua signed the logbook there as as Crim. Case No. 26558) was filed with the Sandiganbayan against
“Oscar Perez”. When he was handed a copy of the complaint, he signed
respondent Estrada, among other accused. A separate Information for
the receipt as “Oscar Perez”. However, a staff of the Ombudsman was
able to learn that he was in fact Cesario Ursua. The staff then illegal use of alias, docketed as Crim. Case No. 26565, was likewise filed
recommended that a criminal case be filed against Ursua. Eventually, against Estrada. The Amended Information in Crim. Case No. 26565
Ursua was sentenced to three years in prison for violating C.A. No. 142, reads:
as amended, otherwise known as “An Act To Regulate The Use Of
Aliases”. That on or about 04 February 2000, or
ISSUE: Whether or not Cesario Ursua’s conviction is proper. sometime prior or subsequent thereto, in the City of
Manila, Philippines and within the jurisdiction of this
HELD: No. Ursua should be acquitted. The Supreme Court ruled that a Honorable Court, the above-named accused, being then
strict application of C.A. No. 142, as amended, in this case only leads to President of the Republic of the Philippines, without
absurdity – something which could not have been intended by the having been duly authorized, judicially or
lawmakers. administratively, taking advantage of his position and
Under C.A. No. 142, as amended, save for some instances, a person is not committing the offense in relation to office, i.e., in order
allowed to use a name or an alias other than his registered name or that to CONCEAL THE ill-gotten wealth HE ACQUIRED
 during his tenure and his true identity as THE President Curato (Curato) who commonly declared that on February 4,
of the Republic of the Philippines, did then and there,
2000, Estrada opened a numbered trust account (Trust Account
willfully, unlawfully and criminally REPRESENT
HIMSELF AS JOSE VELARDE IN SEVERAL C-163) with PCIB and signed as Jose Velarde in the account
TRANSACTIONS AND use and employ the SAID alias opening documents; both Ocampo and Curato also testified that
Jose Velarde which IS neither his registered name at Aprodicio Lacquian and Fernando Chua were present on that
birth nor his baptismal name, in signing documents
with Equitable PCI Bank and/or other corporate occasion;
entities.
B. (1) The testimony of PCIB-Greenhills Branch Manager Teresa
CONTRARY TO LAW.
Barcelan, who declared that a certain Baby Ortaliza (Ortaliza)
transacted several times with her; that Ortaliza deposited
Crim. Case Nos. 26565 and 26558 were subsequently several checks in PCIB Savings Account No. 0160-62502-5
consolidated for joint trial. Still another Information, this time under the account name Jose Velarde on the following dates (as
for perjury and docketed as Crim. Case No. 26905, was filed with the evidenced by deposit receipts duly marked in evidence):
Sandiganbayan against Estrada. This was later consolidated, too, with a. 20 October 1999 (Exh. MMMMM)
Crim. Cases No. 26558 and 26565. b. 8 November 1999 (Exh. LLLLL)
c. 22 November 1999 (Exh. NNNNN)
Estrada was subsequently arrested on the basis of a warrant of d. 24 November 1999 (Exh. OOOOO)
arrest that the Sandiganbayan issued. e. 25 November 1999 (Exh. PPPPP)
f. 20 December 1999 (Exh. QQQQQ)
On January 11, 2005, we ordered the creation of a Special g. 21 December 1999 (Exh. RRRRR)
Division in the Sandiganbayan to try, hear, and decide the charges of h. 29 December 1999 (Exh. SSSSS)
plunder and related cases (illegal use of alias and perjury) against i. 4 January 2000 (Exh. TTTTT)
respondent Estrada.[3] j. 10 May 2000 (Exh. UUUUU)
k. 6 June 2000 (Exh. VVVVV)
At the trial, the People presented testimonial and documentary
l. 25 July 2000 (Exh. WWWWW)
evidence to prove the allegations of the Informations for plunder, illegal
use of alias, and perjury. The Peoples evidence for the illegal alias (2) Documents duly identified by witnesses showing that
charge, as summarized by the Sandiganbayan, consisted of: Lucena Ortaliza was employed in the Office of the Vice President
and, later on, in the Office of the President when Estrada
A. The testimonies of Philippine Commercial and Industrial Bank occupied these positions and when deposits were made to the
(PCIB) officers Clarissa G. Ocampo (Ocampo) and Atty. Manuel Jose Velarde Savings Account No. 0160-62502-5.
 confidential and cannot be revealed without
following proper procedures; and
The People filed its Formal Offer of Exhibits in the consolidated
4. The use of alias is absorbed in plunder.
cases, which the Sandiganbayan admitted into evidence in a Resolution
dated October 13, 2003.[4] The accused separately moved to reconsider
the Sandiganbayan Resolution;[5] the People, on the other hand, filed its
Consolidated Comment/Opposition to the motions.[6] The The People opposed the demurrers through a Consolidated
Sandiganbayan denied the motions in its Resolution dated November 17, Opposition that presented the following arguments:[12]
2003.[7]
1. That the use of fictitious names in bank
transaction was not expressly prohibited until BSP
After the People rested in all three cases, the defense moved to No. 302 is of no moment considering that as early
be allowed to file a demurrer to evidence in these cases. [8] In its Joint as Commonwealth Act No. 142, the use of alias was
Resolution dated March 10, 2004,[9]the Sandiganbayan only granted the already prohibited. Movant is being prosecuted
for violation of C.A. No. 142 and not BSP Circular
defense leave to file demurrers in Crim. Case Nos. 26565 (illegal use of
No. 302;
alias) and 26905 (perjury).
2. Movants reliance on Ursua vs. Court of Appeals
Estrada filed separate Demurrers to Evidence for Crim. Case (256 SCRA 147 [1996]) is misplaced;
Nos. 26565 and 26905.[10] His demurrer to evidence for Crim. Case No.
3. Assuming arguendo that C.A. No. 142, as
26565 (illegal use of alias) was anchored on the following grounds[11]: amended, requires publication of the alias and the
habitual use thereof, the prosecution has
1. Of the thirty-five (35) witnesses presented by the presented more than sufficient evidence in this
prosecution, only two (2) witnesses, Ms. Clarissa regard to convict movant for illegal use of alias;
Ocampo and Atty. Manuel Curato, testified that on and
one occasion (4 February 2000), they saw movant
use the name Jose Velarde; 4. Contrary to the submission of movant, the instant
case of illegal use of alias is not absorbed in
2. The use of numbered accounts and the like was plunder.
legal and was prohibited only in late 2001 as can be
gleaned from Bangko Sentral Circular No. 302,
series of 2001, dated 11 October 2001;
Estrada replied to the Consolidated Opposition through a
3. There is no proof of public and habitual use of alias Consolidated Reply Opposition.
as the documents offered by the prosecution are
banking documents which, by their nature, are THE ASSAILED SANDIGANBAYANS RULING
 The Sandiganbayan issued on July 12, 2004 the Resolution now complications resulting from the nature of the transaction involved the
assailed in this petition. The salient points of the assailed resolution are: alias was used in connection with the opening of a numbered trust
account made during the effectivity of R.A. No. 1405, as amended,[14] and
First the coverage of Estradas indictment. The Sandiganbayan prior to the enactment of Republic R.A. No. 9160.[15]
found that the only relevant evidence for the indictment are those
relating to what is described in the Information i.e., the testimonies and Estrada did not publicly use the alias Jose Velarde:
documents on the opening of Trust Account C-163 on February 4,
2000. The Sandiganbayan reasoned out that the use of the a. Estradas use of the alias Jose Velarde in his dealings
disjunctive orbetween on or about 04 February 2000 and sometime with Dichavez and Ortaliza after February 4, 2000 is not relevant in light
prior or subsequent thereto means that the act/s allegedly committed of the conclusion that the acts imputed to Estrada under the Information
on February 4, 2000 could have actually taken place prior to or were the act/s committed on February 4, 2000 only. Additionally, the
subsequent thereto; the use of the conjunctive was simply the phrase, Estrada did represent himself as Jose Velarde in several
prosecutions procedural tool to guard against any variance between the transactions, standing alone, violates Estradas right to be informed of the
date stated in the Information and that proved during the trial in a nature and the cause of the accusation, because it is very general and
situation in which time was not a material ingredient of the offense; it vague. This phrase is qualified and explained by the succeeding phrase
does not mean and cannot be read as a roving commission that includes and use and employ the said alias Jose Velarde which is neither his
acts and/or events separate and distinct from those that took place on registered name at birth nor his baptismal name, in signing documents
the single date on or about 04 February 2000 or sometime prior or with Equitable PCI Bank and/or other corporate entities. Thus, Estradas
subsequent thereto. The Sandiganbayan ruled that the use of the representations before persons other than those mentioned in the
disjunctive or prevented it from interpreting the Information any other Information are immaterial; Ortaliza and Dichavez do not fall within the
way. Equitable PCI Bank and/or other corporate entities specified in the
Information. Estradas representations with Ortaliza and Dichavez are
Second the Peoples failure to present evidence that proved not therefore covered by the indictment.
Estradas commission of the offense. The Sandiganbayan found that the
People failed to present evidence that Estrada committed the crime b. The Sandiganbayan rejected the application of the
punished under Commonwealth Act No. 142, as amended by Republic principle in the law of libel that mere communication to a third person is
Act (R.A.) No. 6085 (CA 142), as interpreted by the Supreme Court publicity; it reasoned out that that the definition of publicity is not
in Ursua v. Court of Appeals.[13] It ruled that there is an illegal use of alias limited to the way it is defined under the law on libel; additionally, the
within the context of CA 142 only if the use of the alias application of the libel law definition is onerous to the accused and is
is public and habitual. In Estradas case, the Sandiganbayan noted, the precluded by the ruling in Ursua that CA No. 142, as a penal statute,
application of the principles was not as simple because of the should be construed strictly against the State and favorably for the
accused. It ruled that the definition under the law on libel, even if it 6713 together, Estrada had the absolute obligation to disclose his assets
applies, considers a communication to a third person covered by the including the amount of his bank deposits, but he was under no
privileged communication rule to be non-actionable. Estradas use of the obligation at all to disclose the other particulars of the bank account
alias in front of Ocampo and Curato is one such privileged (such as the name he used to open it).
communication under R.A. No. 1405, as amended. The Sandiganbayan Third the effect of the enactment of R.A. No. 9160.[17] The
said: Sandiganbayan said that the absolute prohibition in R.A. No. 9160
against the use of anonymous accounts, accounts under fictitious names,
Movants act of signing Jose Velarde in bank
and all other similar accounts, is a legislative acknowledgment that a
documents being absolutely confidential, the
witnessing thereof by bank officers who were likewise gaping hole previously existed in our laws that allowed depositors to
sworn to secrecy by the same law cannot be considered hide their true identities. The Sandiganbayan noted that the prohibition
as public as to fall within the ambit of CA 142 as was lifted from Bangko Sentral ng Pilipinas (BSP) Circular No. 251
amended. On account of the absolute confidentiality of
the transaction, it cannot be said that movant intended dated July 7, 2000 another confirmation that the opening of a numbered
to be known by this name in addition to his real trust account was perfectly legal when it was opened on February 4,
name. Confidentiality and secrecy negate 2000.
publicity. Ursua instructs:
The Sandiganbayan ruled that the provisions of CA No. 142, as
Hence, the use of a fictitious
name or a different name belonging to interpreted in Ursua, must necessarily be harmonized with the
another person in a single instance provisions of R.A. No.1405 and R.A. No. 9160 under the principle that
without any sign or indication that the every statute should be construed in a way that will harmonize it with
user intends to be knownby this
name in addition to his real name from existing laws. A reasonable scrutiny, the Sandiganbayan said, of all these
that day forth does not fall within the laws in relation to the present case, led it to conclude that the use of an
prohibition in C.A. No. 142 as alias within the context of a bank transaction (specifically, the opening
amended.
of a numbered account made before bank officers) is protected by the
c. The Sandiganbayan further found that the intention
secrecy provisions of R.A. No. 1405, and is thus outside the coverage of
not to be publicly known by the name Jose Velarde is shown by the
CA No. 142 until the passage into law of R.A. No. 9160.
nature of a numbered account a perfectly valid banking transaction at
the time Trust Account C-163 was opened. The opening, too, of a
numbered trust account, the Sandiganbayan further ruled, did not THE PETITION
impose on Estrada the obligation to disclose his real identity the
obligation R.A. No. 6713 imposes is to file under oath a statement of
The People filed this petition raising the following issues:
assets and liabilities.[16] Reading CA No. 142, R.A. No. 1405 and R.A. No.
 1. Whether the court a quo gravely erred and abused
its discretion in dismissing Crim. Case No. 26565
and in holding that the use by respondent Joseph The petition has no merit.
Estrada of his alias Jose Velarde was not public
despite the presence of Messrs. Aprodicio Laquian
The Law on Illegal Use of Alias and the Ursua Ruling
and Fernando Chua on 4 February 2000;

2. Whether the court a quo gravely erred and abused Sections 1 and 2 of CA No. 142, as amended, read:
its discretion in dismissing Crim. Case No. 26565 Section 1. Except as a pseudonym solely for
and in holding that the use by respondent Joseph literary, cinema, television, radio or other
Estrada of his alias Jose Velarde was allowable entertainment purposes and in athletic events where
under banking rules, despite the clear prohibition the use of pseudonym is a normally accepted practice,
under Commonwealth Act No. 142; no person shall use any name different from the one
with which he was registered at birth in the office of the
3. Whether the court a quo gravely erred and abused local civil registry or with which he was baptized for the
its discretion in dismissing Crim. Case No. 26565 first time, or in case of an alien, with which he was
and in applying R.A. No. 1405 as an exception to the registered in the bureau of immigration upon entry; or
illegal use of alias punishable under such substitute name as may have been authorized by
Commonwealth Act No. 142; a competent court: Provided, That persons whose
births have not been registered in any local civil
4. Whether the alleged harmonization and registry and who have not been baptized, have one year
application made by the court a quo of R.A. from the approval of this act within which to register
No.1405 and Commonwealth Act No. 142 were their names in the civil registry of their residence. The
proper; name shall comprise the patronymic name and one or
two surnames.
5. Whether the court a quo gravely erred and abused
its discretion in limiting the coverage of the Section 2. Any person desiring to use an alias
amended Information in Crim. Case No. 26565 to shall apply for authority therefor in proceedings like
the use of the alias Jose Velarde by respondent those legally provided to obtain judicial authority for a
Joseph Estrada on February 4, 2000; change of name and no person shall be allowed to
secure such judicial authority for more than one alias.
6. Whether the court a quo gravely erred and abused The petition for an alias shall set forth the person's
its discretion in departing from its earlier final baptismal and family name and the name recorded in
finding on the non-applicability of Ursua v. Court of the civil registry, if different, his immigrant's name, if an
Appealsand forcing its application to the instant alien, and his pseudonym, if he has such names other
case. than his original or real name, specifying the reason or
reasons for the desired alias. The judicial authority for
the use of alias, the Christian name and the alien
immigrant's name shall be recorded in the proper local
THE COURTS RULING
 civil registry, and no person shall use any name or in the application of and the determination of criminal liability under CA
names other than his original or real name unless the
No. 142.
same is or are duly recorded in the proper local civil
registry.
Among the many grounds the People invokes to avoid the
application of the Ursua ruling proceeds from Estradas position in the
How this law is violated has been answered by government; at the time of the commission of the offense, he was the
the Ursua definition of an alias a name or names used by a person or President of the Republic who is required by law to disclose his true
intended to be used by him publicly and habituallyusually in business name. We do not find this argument sufficient to justify a distinction
transactions in addition to his real name by which he is registered at birth between a man on the street, on one hand, and the President of the
or baptized the first time or substitute name authorized by a competent Republic, on the other, for purposes of applying CA No. 142. In the first
authority.There must be, in the words of Ursua, a sign or indication that place, the law does not make any distinction, expressly or impliedly, that
the user intends to be known by this name (the alias) in addition to his real would justify a differential treatment. CA No. 142 as applied to Estrada,
name from that day forth [for the use of alias to] fall within the prohibition in fact allows him to use his cinema or screen name of Joseph Estrada,
contained in C.A. No. 142 as amended.[18] which name he has used even when he was already the President of the
Philippines. Even the petitioner has acquiesced to the use of the screen
Ursua further relates the historical background and rationale name of the accused, as shown by the title of the present
that led to the enactment of CA No. 142, as follows: petition. Additionally, any distinction we make based on the Peoples
claim unduly prejudices Estrada; this is proscribed by the Ursua dictum
The enactment of C.A. No. 142 was made
primarily to curb the common practice among the that CA No. 142, as a penal statute, should be construed strictly against
Chinese of adopting scores of different names and the State and in favor of the accused.[21] The mode of violating CA No. 142
aliases which created tremendous confusion in the field is therefore the same whoever the accused may be.
of trade. Such a practice almost bordered on the crime
of using fictitious names which for obvious reasons
The People also calls our attention to an earlier Sandiganbayan
could not be successfully maintained against the
Chinese who, rightly or wrongly, claimed they ruling (Resolution dated February 6, 2002) denying Estradas motion to
possessed a thousand and one names. C.A. No. 142 thus quash the Information. This earlier Resolution effectively rejected the
penalized the act of using an alias name, unless such application of Ursua under the following tenor:
alias was duly authorized by proper judicial
proceedings and recorded in the civil register.[19] The use of the term alias in the Amended
Information in itself serves to bring this case outside
Following the doctrine of stare decisis,[20] we are guided by the ambit of the ruling in the case of Ursua v. Court of
Appeals (256 SCRA 147 [1996]), on which the accused
the Ursua ruling on how the crime punished under CA No. 142 may be
heavily relies in his motion to quash. The term alias
committed. Close adherence to this ruling, in other words, is unavoidable means otherwise known as (Webster Third New
 International Dictionary, 1993 ed., p. 53). The charge of judgment.[26] Perez v. Court of Appeals,[27] albeit a civil case, instructively
using an alias logically implies that another name has
teaches that an interlocutory order carries no res
been used publicly and habitually. Otherwise, he will
not be known by such name. In any case, the amended adjudicata effects. Says Perez:
information adverts to several transactions and signing
of documents with the Equitable PCI Bank and/or other The Decision in CA-G.R. No. 10415 having
corporate entities where the above-mentioned alias resolved only an interlocutory matter, the principle
was allegedly employed by the accused. of res judicata cannot be applied in this case. There can
be no res judicata where the previous order in
The facts alleged in the information are question was not an order or judgment
distinctly different from facts established in the Ursua determinative of an issue of fact pending before the
case where another name was used by the accused in a court but was only an interlocutory order because
single instance without any sign or indication that that it required the parties to perform certain acts for
[sic] he intended to be known from that day by this final adjudication. In this case, the lifting of the
name in addition to his real name.[22] restraining order paved the way for the possession of
the fishpond on the part of petitioners and/or their
representatives pending the resolution of the main
The People argues that the Sandiganbayan gravely abused its discretion
action for injunction. In other words, the main issue of
in applying Ursua notwithstanding this earlier final ruling on its non- whether or not private respondent may be considered
applicability a ruling that binds the parties in the present case. The a sublessee or a transferee of the lease entitled to
People thus claims that the Sandiganbayan erred to the point of gravely possess the fishpond under the circumstances of the
case had yet to be resolved when the restraining order
abusing its discretion when it resurrected the application
was lifted.[28]
of Ursua,resulting in the reversal of its earlier final ruling.
Second, in the earlier motion to quash, the Sandiganbayan solely looked
We find no merit in this argument for two reasons. First, the cited at the allegations of the Information to determine the sufficiency of these
Sandiganbayan resolution is a mere interlocutory order a ruling denying allegations and did not consider any evidence aliunde. This is far
a motion to quash[23] that cannot be given the attributes of finality and different from the present demurrer to evidence where the
immutability that are generally accorded to judgments or orders that Sandiganbayan had a fuller view of the prosecutions case, and was faced
finally dispose of the whole, of or particular matters in, a case.[24] The with the issue of whether the prosecutions evidence was sufficient to
Sandiganbayan resolution is a mere interlocutory order because its prove the allegations of the Information. Under these differing views, the
effects would only be provisional in character, and would still require the Sandiganbayan may arrive at a different conclusion on the application
issuing court to undertake substantial proceedings in order to put the of Ursua, the leading case in the application of CA 142, and the change in
controversy to rest.[25] It is basic remedial law that an interlocutory order ruling is not per se indicative of grave abuse of discretion. That there is
is always under the control of the court and may be modified or no error of law is strengthened by our consideration of the
rescinded upon sufficient grounds shown at any time before final Sandiganbayan ruling on the application of Ursua.
 finding that the phrase prior to or subsequent thereto is absorbed by the
In an exercise of caution given Ursuas jurisprudential binding phrase on or about 04 February 2000 drastically amends the succeeding
effect, the People also argues in its petition that Estradas case is different main allegations on the constitutive criminal acts by removing the
from Ursuas for the following reasons: (1) respondent Estrada used and plurality of both the transactions involved and the documents signed
intended to continually use the alias Jose Velarde in addition to the name with various entities; there is the undeniable essential relationship
Joseph Estrada; (2) Estradas use of the alias was not isolated or limited between the allegations of the multiplicity of transactions, on one hand,
to a single transaction; and (3) the use of the alias Jose Velarde was and the additional antecedent of prior to or subsequent thereto, on the
designed to cause and did cause confusion and fraud in business other. It argues that the Sandiganbayan reduced the phrase prior to or
transactions which the anti-alias law and its related statutes seek to subsequent thereto into a useless appendage, providing Estrada with a
prevent. The People also argues that the evidence it presented more than convenient and totally unwarranted escape route.
satisfied the requirements of CA No. 142, as amended, and Ursua, as it
was also shown or established that Estradas use of the alias was public. The People further argues that the allegation of time is the least
exacting in satisfying the constitutional requirement that the accused
In light of our above conclusions and based on the parties expressed has to be informed of the accusation against him. Section 6 of Rule 110
positions, we shall now examine within the Ursua framework the assailed of the Revised Rules of Court provides that an allegation of the
Sandiganbayan Resolution granting the demurrer to evidence. The approximate date of the commission of the offense will suffice, while
prosecution has the burden of proof to show that the evidence it Section 11 of the same Rule provides that it is not necessary to state in
presented with the Sandiganbayan satisfied the Ursua requirements, the complaint or information the precise date the offense was committed
particularly on the matter of publicity and habituality in the use of an except when it is a material ingredient of the crime. This liberality
alias. allegedly shaped the time-tested rule that when the time given in the
complaint is not of the essence of the offense, the time of the commission
What is the coverage of the indictment? of the offense does not need to be proven as alleged, and that the
complaint will be sustained if the proof shows that the offense was
The People argues that the Sandiganbayan gravely erred and
committed at any time within the period of the statute of limitations and
abused its discretion in limiting the coverage of the amended
before the commencement of the action (citing People v. Bugayong [299
Information in Crim. Case No. 26565 to Estradas use of the alias Jose
SCRA 528, 537] that in turn cited US v. Smith [3 Phil. 20, 22]). Since
Velarde on February 4, 2000. It posits that there was a main transaction
allegations of date of the commission of an offense are liberally
one that took place on February 4, 2000 but there were other
interpreted, the People posits that the Sandiganbayan gravely abused its
transactions covered by the phrase prior to or subsequent thereto; the
discretion in disregarding the additional clause prior to or subsequent
Information specifically referred to several transactions with Equitable
thereto; under the liberality principle, the allegations of the acts
PCI Bank and/or other corporate entities. To the People, the restrictive
constitutive of the offense finally determine the sufficiency of the
allegations of time. The People thus claims that no surprise could have prepare for and undertake his defense.[32] In short, the allegations in the
taken place that would prevent Estrada from properly defending complaint or information, as written, must fully inform or acquaint the
himself; the information fully notified him that he was being accused of accused the primary reader of and the party directly affected by the
using the alias Jose Velarde in more than just one instance. complaint or information of the charge/s laid.

We see no merit in these arguments. The heretofore cited Information states that on or about 04
February 2000, or sometime prior or subsequent thereto, in the City
At its core, the issue is constitutional in nature the right of of Manila, Philippines and within the jurisdiction of this Honorable
Estrada to be informed of the nature and cause of the accusation against Court, the above-named accused [did] willfully, unlawfully and
him. Under the provisions of the Rules of Court implementing this criminally REPRESENT HIMSELF AS JOSE VELARDE IN SEVERAL
constitutional right, a complaint or information is sufficient if it states TRANSACTIONS AND use and employ the SAID alias Jose Velarde
the name of the accused; the designation of the offense given by the which IS neither his registered name at birth nor his baptismal name,
statute; the acts or omissions complained of as constituting the offense in signing documents with Equitable PCI Bank and/or other
in the name of the offended party; the approximate date of the corporate entities.
commission of the offense; and the place where the offense was
committed.[29] As to the cause of accusation, the acts or omissions We fully agree with the disputed Sandiganbayans reading of the
complained of as constituting the offense and the qualifying and Information, as this was how the accused might have similarly read and
aggravating circumstances must be stated in ordinary and concise understood the allegations in the Information and, on this basis,
language and not necessarily in the language used in the statute, but in prepared his defense. Broken down into its component parts, the
terms sufficient to enable a person of common understanding to allegation of time in the Information plainly states that (1) ON February
know the offense charged and the qualifying and aggravating 4, 2000; (2) OR before February 4, 2000; (3) OR sometime prior or
circumstances, and for the court to pronounce judgment.[30] The subsequent to February 4, 2000, in the City of Manila, Estrada represented
date of the commission of the offense need not be precisely stated in the himself as Jose Velarde in several transactions in signing documents with
complaint or information except when the precise date is a material Equitable PCI Bank and/or other corporate entities.
ingredient of the offense. The offense may be alleged to have been
committed on a date as near as possible to the actual date of its Under this analysis, the several transactions involving the
commission.[31] signing of documents with Equitable PCI Bank and/or other corporate
entities all had their reference to February 4, 2000; they were all
The information must at all times embody the essential elements made on or about or prior or subsequent to that date, thus plainly
of the crime charged by setting forth the facts and circumstances that bear implying that all these transactions took place only on February 4, 2000
on the culpability and liability of the accused so that he can properly or on another single date sometime before or after February 4, 2000. To
be sure, the Information could have simply said on or about February 4, dictates the dismissal of the petition under CA No. 142 and the terms
2000 to capture all the alternative approximate dates, so that the phrase of Ursua.
sometime prior or subsequent thereto would effectively be a surplusage The issues of publicity, numbered accounts, and
the application of CA No. 142, R.A. No. 1405,
that has no meaning separately from the on or about already
and R.A. No. 9160.
expressed. This consequent uselessness of the prior or subsequent thereto
phrase cannot be denied, but it is a direct and necessary consequence of
the use of the OR between the two phrases and the THERETO that referred We shall jointly discuss these interrelated issues.
back to February 4, 2000 in the second phrase. Of course, the reading
would have been very different (and would have been clearly in accord The People claims that even on the assumption that Ocampo and
with the Peoples present interpretation) had the Information simply Curato are bank officers sworn to secrecy under the law, the presence of
used AND instead of OR to separate the phrases; the intent to refer to two other persons who are not bank officers Aprodicio Laquian and
various transactions occurring on various dates and occasions all Fernando Chua when Estradas signed the bank documents as Jose
proximate to February 4, 2000 could not be disputed. Unfortunately for Velarde amounted to a public use of an alias that violates CA No. 142.
the People, the imprecision in the use of OR is the reality the case has to live
On the issue of numbered accounts, the People argues that to
with.To act contrary to this reality would violate Estradas right to be
premise the validity of Estradas prosecution for violation of CA No. 142
informed of the nature and cause of accusation against him; the multiple
on a mere banking practice is gravely erroneous, improper, and
transactions on several separate days that the People claims would
constitutes grave abuse of discretion; no banking law provision allowing
result in surprise and denial of an opportunity to prepare for Estrada,
the use of aliases in the opening of bank accounts existed; at most, it was
who has a right to rely on the single day mentioned in the Information.
allowed by mere convention or industry practice, but not by a statute
Separately from the constitutional dimension of the allegation enacted by the legislature. Additionally, that Estradas prosecution was
of time in the Information, another issue that the allegation of time and supposedly based on BSP Circular No. 302 dated October 11, 2001 is
our above conclusion raise relates to what act or acts, constituting a wrong and misleading, as Estrada stands charged with violation of CA
violation of the offense charged, were actually alleged in the Information. No. 142, penalized since 1936, and not with a violation of a mere BSP
Circular. That the use of alias in bank transactions prior to BSP Circular
The conclusion we arrived at necessarily impacts on the Peoples No. 302 is allowed is inconsequential because as early as CA No. 142, the
case, as it deals a fatal blow on the Peoples claim that use of an alias (except for certain purposes which do not include
Estrada habitually used the Jose Velarde alias. For, to our mind, the banking) was already prohibited. Nothing in CA No. 142 exempted the
repeated use of an alias within a single day cannot be deemed habitual, use of aliases in banking transactions, since the law did not distinguish
as it does not amount to a customary practice or use. This reason alone or limit its application; it was therefore grave error for the
Sandiganbayan to have done so. Lastly on this point, bank regulations
being mere issuances cannot amend, modify or prevail over the effective, shows that a person who signs in a public or private transaction a name
subsisting and enforceable provision of CA No. 142. or alias, other than his original name or the alias he is authorized to use,
On the issue of the applicability of R.A. No. 1405 and its shall be held liable for violation of CA No. 142, while the bank employees
relationship with CA No. 142, that since nothing in CA No. 142 excuses are bound by the confidentiality of bank transactions except in the
the use of an alias, the Sandiganbayan gravely abused its discretion when circumstances enumerated in R.A. No. 1405. At most, the People argues,
it ruled that R.A. No. 1405 is an exception to CA No. 142s the prohibition in R.A. No. 1405 covers bank employees and officers only,
coverage. Harmonization of laws, the People posits, is allowed only if the and not Estrada; the law does not prohibit Estrada from disclosing and
laws intended to be harmonized refer to the same subject matter, or are making public his use of an alias to other people, including Ocampo and
at least related with one another. The three laws which the Curato, as he did when he made a public exhibit and use of the alias
Sandiganbayan tried to harmonize are not remotely related to one before Messrs. Lacquian and Chua.
another; they each deal with a different subject matter, prohibits a
different act, governs a different conduct, and covers a different class of Finally, the People argues that the Sandiganbayan ruling that
persons,[33] and there was no need to force their application to one the use of an alias before bank officers does not violate CA No. 142
another. Harmonization of laws, the People adds, presupposes the effectively encourages the commission of wrongdoing and the
existence of conflict or incongruence between or among the provisions concealment of ill-gotten wealth under pseudonyms; it sustains an
of various laws, a situation not obtaining in the present case. anomalous and prejudicial policy that uses the law to silence bank
officials and employees from reporting the commission of crimes. The
The People posits, too, that R.A. No. 1405 does not apply to trust People contends that the law R.A. No. 1405 was not intended by the
transactions, such as Trust Account No. C-163, as it applies only to Legislature to be used as a subterfuge or camouflage for the commission
traditional deposits (simple loans). A trust account, according to the of crimes and cannot be so interpreted; the law can only be interpreted,
People, may not be considered a deposit because it does not create the understood and applied so that right and justice would prevail.
juridical relation of creditor and debtor; trust and deposit operations are
treated separately and are different in legal contemplation; trust We see no merit in these arguments.
operation is separate and distinct from banking and requires a grant of
separate authority, and trust funds are not covered by deposit insurance We agree, albeit for a different reason, with the Sandiganbayan
under the Philippine Deposit Insurance Corporation law (R.A. No. 3591, position that the rule in the law of libel that mere communication to a
as amended). third person is publicity does not apply to violations of CA No. 142. Our
close reading of Ursua particularly, the requirement that there be
The People further argues that the Sandiganbayans conclusion intention by the user to be culpable and the historical reasons we cited
that the transaction or communication was privileged in nature was above tells us that the required publicity in the use of alias is more than
erroneous a congruent interpretation of CA No. 142 and R.A. No. 1405 mere communication to a third person; the use of the alias, to be
considered public, must be made openly, or in an open manner or place, The contention that trust accounts are not
covered by the term deposits, as used in R.A. 1405, by
or to cause it to become generally known. In order to be held liable for a
the mere fact that they do not entail a creditor-debtor
violation of CA No. 142, the user of the alias must have held himself out relationship between the trustor and the bank, does not
as a person who shall publicly be known under that other name. In other lie. An examination of the law shows that the
words, the intent to publicly use the alias must be manifest. term deposits used therein is to be understood broadly
and not limited only to accounts which give rise to a
creditor-debtor relationship between the depositor
To our mind, the presence of Lacquian and Chua when Estrada and the bank.
signed as Jose Velarde and opened Trust Account No. C-163 does not
necessarily indicate his intention to be publicly known henceforth as The policy behind the law is laid down in
Section 1:
Jose Velarde. In relation to Estrada, Lacquian and Chua were not part of
the public who had no access to Estradas privacy and to the confidential SECTION 1. It is hereby declared to be the
matters that transpired in Malacaan where he sat as President; Lacquian policy of the Government to give encouragement
was the Chief of Staff with whom he shared matters of the highest and to the people to deposit their money in banking
institutions and to discourage private hoarding
strictest confidence, while Chua was a lawyer-friend bound by his oath so that the same may be properly utilized
of office and ties of friendship to keep and maintain the privacy and by banks in authorized loans to assist in the
secrecy of his affairs. Thus, Estrada could not be said to have intended economic development of the
country. (Underscoring supplied)
his signing as Jose Velarde to be for public consumption by the fact alone
that Lacquian and Chua were also inside the room at that time. The same
holds true for Estradas alleged representations with Ortaliza and If the money deposited under an account may
Dichavez, assuming the evidence for these representations to be be used by bank for authorized loans to third persons,
then such account, regardless of whether it creates a
admissible. All of Estradas representations to these people were made in creditor-debtor relationship between the depositor
privacy and in secrecy, with no iota of intention of publicity. and the bank, falls under the category of accounts
which the law precisely seeks to protect for the purpose
The nature, too, of the transaction on which the indictment of boosting the economic development of the country.
rests, affords Estrada a reasonable expectation of privacy, as the alleged
Trust Account No. 858 is, without doubt, one
criminal act related to the opening of a trust account a transaction that such account. The Trust Agreement between petitioner
R.A. No. 1405 considers absolutely confidential in nature. [34] We and Urban Bank provides that the trust account
previously rejected, in Ejercito v. Sandiganbayan,[35] the Peoples covers deposit, placement or investment of funds by
Urban Bank for and in behalf of petitioner. The money
nitpicking argument on the alleged dichotomy between bank deposits
deposited under Trust Account No. 858, was, therefore,
and trust transactions, when we said: intended not merely to remain with the bank but to be
invested by it elsewhere. To hold that this type of
account is not protected by R.A. 1405 would encourage
private hoarding of funds that could otherwise be
invested by bank in other ventures, contrary to the
We have consistently ruled that bank deposits under R.A. No.
policy behind the law.
1405 (the Secrecy of Bank Deposits Law) are statutorily protected or
Section 2 of the same law in fact even more recognized zones of privacy.[37] Given the private nature of Estradas act
clearly shows that the term deposits was intended to be of signing the documents as Jose Velarde related to the opening of the
understood broadly:
trust account, the People cannot claim that there was already a public
SECTION use of alias when Ocampo and Curato witnessed the signing. We need
2. All deposits of whatever nature with bank not even consider here the impact of the obligations imposed by R.A.
or banking institutions in the Philippines
No.1405 on the bank officers; what is essentially significant is the
including investments in bonds issued by the
Government of the Philippines, its political privacy situation that is necessarily implied in these kinds of
subdivisions and its instrumentalities, are transactions. This statutorily guaranteed privacy and secrecy effectively
hereby considered as of an absolutely negate a conclusion that the transaction was done publicly or with the
confidential nature and may not be examined,
inquired or looked into by any person, intent to use the alias publicly.
government official, bureau or
office, except upon written permission of the The enactment of R.A. No.9160, on the other hand, is a
depositor, or in cases of impeachment, or upon significant development only because it clearly manifests that prior to its
order of a competent court in cases of bribery or
enactment, numbered accounts or anonymous accounts were permitted
dereliction of duty of public officials, or in
cases where the money deposited or banking transactions, whether they be allowed by law or by a mere
invested is the subject matter of the litigation. banking regulation. To be sure, an indictment against Estrada using this
(Emphasis and underscoring supplied) relatively recent law cannot be maintained without violating the
The phrase of whatever nature proscribes any constitutional
restrictive interpretation of deposits. Moreover, it is prohibition on the enactment and use of ex post facto laws.[38]
clear from the immediately quoted provision that,
generally, the law applies not only to money which is
We hasten to add that this holistic application and
deposited but also to those which are invested. This
further shows that the law was not intended to apply interpretation of these various laws is not an attempt to harmonize these
only to deposits in the strict sense of the laws. A finding of commission of the offense punished under CA No. 142
word. Otherwise, there would have been no need to add must necessarily rest on the evidence of the requisites for culpability, as
the phrase or invested.
amplified in Ursua. The application of R.A. No. 1405 is significant only
Clearly, therefore, R.A. 1405 is broad enough to because Estradas use of the alias was pursuant to a transaction that the
cover Trust Account No. 858.[36] law considers private or, at the very least, where the law guarantees a
reasonable expectation of privacy to the parties to the transactions; it is
at this point that R.A. No. 1405 tangentially interfaces with an indictment
under CA 142. In this light, there is no actual frontal clash between CA
No. 142 and R.A. No. 1405 that requires harmonization. Each operates
within its own sphere, but must necessarily be read together when these
spheres interface with one another. Finally, R.A. No. 9160, as a law of
recent vintage in relation to the indictment against Estrada, cannot be a
source or an influencing factor in his indictment.

In finding the absence of the requisite publicity, we simply

looked at the totality of the circumstances obtaining in Estradas use of
the alias Jose Velarde vis--vis the Ursua requisites. We do not decide here
whether Estradas use of an alias when he occupied the highest executive
position in the land was valid and legal; we simply determined, as the
Sandiganbayan did, whether he may be made liable for the offense
charged based on the evidence the People presented. As with any other
accused, his guilt must be based on the evidence and proof beyond
reasonable doubt that a finding of criminal liability requires. If the
People fails to discharge this burden, as they did fail in this case, the rule
of law requires that we so declare. We do so now in this review and
accordingly find no reversible error of law in the assailed Sandiganbayan
ruling.

WHEREFORE, premises considered, we DENY the petition for

lack of merit.

SO ORDERED.