BPI vs CA

GR. No. 102383

November 20, 1992

FACTS:
Sometimes in October 9, 1981, the impostor of Eligia G. Fernando called to BPI’s Money
Market Department, demanding to terminate her money market placement and asked that
two check be issued for the proceed and be delivered to her office at Philamlife. As a result
Eustaquio, the trainee employee of BPI, has prepared the order slip for the check of Eligia G.
Fernando. However, the same day, late morning of October 12, 1981, the impostor called again
then instructed that instead of delivery of the said check, the impostor announced to
Eutasquio that the check will be pick up by her niece, Rosemarie Fernando.
On October 13, 1981, the impostor of Eligia G. Fernando, applied at CBC head office for
the opening of a current account. Because the impostor is persuasive, she then again
succeeded to an account CBC depositing an amount of 10.000.00 as initial deposit. The
following day, the said impostor had deposited the two check, amounting 2,462,243.19. After
two days, series of withdrawal was made by the impostor.
When the real Eligia G. Fernando visited BPI, she disclaimed that she had pre-
terminated her placement. On November 12, 1981, supported by the affidavit of real Eligia, BPI
returned the check in questioned to CBC on the grounds that the the payee’s endorsement was
forged.
Because of the said incident, BPI filed an action against CBC. The Arbitration Committee
ruled in favor to BPI. However, the arbitration committee reversed the said decision upon
motion for reconsideration of the CBC.
BPI then filed a petition for review to RTC of Makati but was dismissed with
modification.
Not satisfied with the RTC’s decision, BPI filed a petition for review to Supreme Court
with the contention that the proximate cause for the loss of the proceeds of the two check in
question was the negligence of the employees of CBC not by BPI.

ISSUE:
Whether or not the proximate cause of the loss of the proceed of the two check in
questioned was the negligence of employee of the CBC and not by BPI?
RULING OF THE SUPREME COURT:
The Supreme Court ruled that no matter how the justification of both bank presented to
avoid responsibility, they cannot erase the fact that they are both guilty in not exercising extra
ordinary diligence in the selection and supervision of their employee. The supreme Court did
not considered the doctrine of last clear chance invoked by BPI to clear its liability, because,
according to the supreme court, the CBC has no prior notice of the fraud perpetrated by the
employees of the BPI on the pre-termination of money market placement of Eligia G. Fernando.
BPI contention that CBC should bear the loss was not also considered by the Supreme
Court. Instead, the said court ruled that the proximate cause of the payment of the forged
check to the impostor was due to the negligence of the petitioner.
The supreme Court also did not ignored the fact that CBC employees closed their eyes
to the suspicious circumstances of huge over-the counter withdrawal made immediately, after
the account was opened. Such opening of account by the impostor is accompanied by
inexplicable acts clearly showing negligence .
Hence, Supreme Court ruled that both banks are negligent in the selection and
supervision of their employees resulting in the encashment of the forged checks by the
impostor. Both banks are not able to overcome the presumption of negligence in the selection
and supervision of their employees. It was a gross negligence of their employees which
resulted in the fraud and the subsequent loss. While it is true that petitioner’s negligence may
have been the proximate cause of the loss, respondents CBC negligence contributed equally to
the success of the impostor in encashing the proceeds of the forged checks. The Supreme
Court applied the Article 2179 of the New civil Code to the effect that while respondent CBC
may recover its losses, such losses are subject to mitigation by the courts. The court satisfied
the justice substantially by allocating the loss and litigation expenses in 60-40 ration in favor of
the respondent.