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    085 - BPI v. Reyes

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    Carl Angelo
    - Edvin Reyes opened two savings accounts with the Bank of the Philippine Islands (BPI), one jointly with his wife and the other jointly with his grandmother Emeteria Fernandez. Fernandez was receiving monthly pension payments from the US Treasury. - After Fernandez's death, her pension payment was deposited into the joint account. Reyes then transferred these funds to the account with his wife. The payment was later discovered to have been issued after Fernandez's death and was dishonored. - BPI debited the amount from Reyes's account with his wife after he verbally authorized them to do so. However, Reyes later demanded restitution. The Supreme Court ruled legal compensation applied

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    085 - BPI v. Reyes

    Uploaded by

    Carl Angelo
    43 views2 pages
    - Edvin Reyes opened two savings accounts with the Bank of the Philippine Islands (BPI), one jointly with his wife and the other jointly with his grandmother Emeteria Fernandez. Fernandez was receiving monthly pension payments from the US Treasury. - After Fernandez's death, her pension payment was deposited into the joint account. Reyes then transferred these funds to the account with his wife. The payment was later discovered to have been issued after Fernandez's death and was dishonored. - BPI debited the amount from Reyes's account with his wife after he verbally authorized them to do so. However, Reyes later demanded restitution. The Supreme Court ruled legal compensation applied

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    - Edvin Reyes opened two savings accounts with the Bank of the Philippine Islands (BPI), one jointly with his wife and the other jointly with his grandmother Emeteria Fernandez. Fernandez was receiving monthly pension payments from the US Treasury. - After Fernandez's death, her pension payment was deposited into the joint account. Reyes then transferred these funds to the account with his wife. The payment was later discovered to have been issued after Fernandez's death and was dishonored. - BPI debited the amount from Reyes's account with his wife after he verbally authorized them to do so. However, Reyes later demanded restitution. The Supreme Court ruled legal compensation applied

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    43 views2 pages

    085 - BPI v. Reyes

    Uploaded by

    Carl Angelo
    - Edvin Reyes opened two savings accounts with the Bank of the Philippine Islands (BPI), one jointly with his wife and the other jointly with his grandmother Emeteria Fernandez. Fernandez was receiving monthly pension payments from the US Treasury. - After Fernandez's death, her pension payment was deposited into the joint account. Reyes then transferred these funds to the account with his wife. The payment was later discovered to have been issued after Fernandez's death and was dishonored. - BPI debited the amount from Reyes's account with his wife after he verbally authorized them to do so. However, Reyes later demanded restitution. The Supreme Court ruled legal compensation applied

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    UP Law BGC Eve 2024 BPI v.

    Reyes
    ObliCon Art 1290 NCC 1996 Puno

    SUMMARY DOCTRINE
    Ervin Reyes opened 2 Savings Account with BPI. Both are Art 1290 “Compensation takes effect by operation of law,
    joint “AND/OR” accounts. The second acct was with his and extinguishes both debts to the
    grandmother, Emeteria Fernandez. Fernandez was then concurrent amount, even though the creditors and
    receiving monthly pension from the US, by receiving US debtors are not aware of the compensation.”
    Treasury Warrants. Despite Fernandez’ death, their joint
    account still received pension. 2 months after, Reyes
    closed SA No. 2 and transferred funds to SA No. 1
    amounting to P13,112.91. The US Treasury Warrant was
    dishonored and it was discovered that Fernandez died 3
    days prior to issuance. The US Dept of Treasury requested
    BPI for a refund. Reyes requested to just have it debited
    from his other savings account. After it was debited,
    Reyes returned to BPI asking for its restitution. RTC
    dismissed Reyes’ suit. CA reversed. SC reinstated RTC.

    FACTS

     Edvin Reyes opened a savings account with the Bank of the Philippine Islands (BPI) Cubao Shopping
     Center Branch. It is a joint “AND/OR” account with his wife, Sonia Reyes (SA No. 1).

     Another joint account “AND/OR” account was also opened with his grandmother Emeteria Fernandez at the same
    branch (SA No. 2). Reyes regularly deposited in this account the US Treasury Warrants payable to the order of
    Fernandez as her monthly pension.

     Dec 28, 1989 – Fernandez died without the knowledge of the US Treasury Dept. She was still sent US Treasury
    Warrant on Jan 1, 1990 in the amount of US $377 or P10,556.

     Jan 4, 1990 - Reyes deposited said US Treasury check of Fernandez in SA No. 2. The US Veterans Admin Office in
    Manila conditionally cleared the check. The check was sent to the US for further clearing.

     March 8, 1990 - Reyes closed SA No. 2 and transferred funds to SA No. 1 amounting to P13,112.91.

     Jan 16, 1991 - the US Treasury Warrant was dishonored and it was discovered that Fernandez died 3 days prior to
    issuance. The US Dept of Treasury requested BPI for a refund. This is also the first time BPI learned about
    Fernandez’ death.

     Reyes received a PT & T urgent telegram from BPI requesting to contact Manager Grace S. Romero or Asst. Manager
    Carmen Bernardo. He was informed that the treasury was the subject of a claim by Citibank NA, correspondent of
    BPI. He assured them the he would drop by the bank. He verbally authorized them to debit from his SA No. 1 the
    amount stated in the dishonored US Treasury Warrant. BPI debited the amount from SA No. 1.

     Reyes with lawyer Humphrey Tumaneng visited BPI and checked the refund documents. Reyes then demanded the
    restitution of the debited amount and said that because of it, he failed to withdraw his money when he needed them.
    He filed suit for damages with RTC.

     BPI contested and counterclaimed for moral and exemplary damages by way of Special and Affirmative Defense,
    arguing that Reyes gave them his express verbal authorization to debit the questioned amount. They claimed that
    Reyes later refused to execute a written authority.

     RTC dismissed complain of Reyes for lack of cause of action. Reyes appealed to CA. CA reversed RTC.

    RATIO

    W/N Reyes gave express authority to petitioner bank to debit his joint account with his wife for the value of
    the returned US treasury warrant.
    Yes. BPI was able to prove that they had verbal authority to debit his joint account with his wife for the amount of the
    returned US Treasury through preponderance of evidence. Testimonies of Manager Bernardo and Asst. Manager Romero
    deserve credence. In Bernardo’s testimony, she said that Reyes promised he will give written confirmation or authorization.
    In Romero’s testimony, she said that Reyes instructed Bernardo to debit his account with the bank, which was maintained
    jointly with his wife then he promised to drop by to give a written confirmation. Reyes’ testimony was uncorroborated.
    W/N BPI has the legal right to apply the deposit of Reyes to his outstanding obligation to BPI brought about
    by the return of the US treasury warrant he earlier deposited under the principle of legal compensation.
    Yes. All requisites are present, so legal compensation is proper. Compensation shall take place when 2 persons in their own
    right are creditors and debtors of each other. Art 1290 provided that when all the requisites in Art 12791 are present,
    compensation takes effect by operation of law, and extinguishes booth debts to the concurrent amount, even though the
    creditors and debits are not aware of the compensation.

    Legal compensation is ipso jure so its effects arise on the very day on which all the requisites concur. In this case, BPI stands
    as a debtor of Reyes, the depositor. At the same time, BPI is the creditor of Reyes with respect to the dishonored US Treasury
    Warrant which Reyes illegally transferred to his joint account. The debts involved of a sum of money. They are due,
    liquidated, and demandable. They are not claimed by a third person.
    W/N the money debited by BPI was the same money transferred by Reyes from his joint and/or account
    with his wife.
    Yes. The rule as to mutuality is strictly applied at law. But not in equity, where to allow that same would defeat a clear right
    or permit irremediable injustice. Despite the account being joint, the wife never asserted any right to the debited US Treasury
    Warrant. The right of BPI to make the debit is clear and cannot be doubted. To frustrate the application of legal
    compensation on the ground that the parties are not mutually obliged would result in unjust enrichment on the part of the
    Reyes and his wife.

    FALLO

    IN VIEW HEREOF, the Decision of respondent Court of Appeals in CA-G.R. CV No. 41543 dated August 16, 1994 is
    ANNULLED and SET ASIDE and the Decision of the trial court in Civil Case No. Q-91-8451 dated January 20, 1993 is
    REINSTATED. Costs against private respondent.

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