BPI Family Bank v.

Buenaventura
Topic: Cases for Forgery

Petitioner: BPI Family Bank

Respondent: Edgardo Buenaventura, Myrna Lizardo and Yolanda Tica

DOCTRINE: Unless a forgery or alteration is attributable to the fault or negligence of the drawer himself,
the remedy of the drawee bank that negligently clears a forged and/or altered check for payment is against
the party responsible for the forgery or alteration, otherwise, it bears the loss.

FACTS:

-Edgardo Buenaventura, Myrna Lizardo and Yolanda Tica (Buenaventura, et al.), all officers of the
International Baptist Church and International Baptist Academy, filed a complaint for Reinstatement of
Current Account/Release of Money plus Damages against BPI Family Bank before the RTC.
-Buenaventura, et al. alleged that they accepted a check in the amount of 500k from Amado Franco, which
was jointly issued by Eladio Teves and Joseph Teves.
-Buenaventura, et al. deposited the check as initial deposit and was credited to their current account
-After a couple transactions, they drew a check, which was dishonored for the reason account closed in
spite of the balance in the current account
-Buenaventura, et al. then learned that their account had been frozen by the Vice President of BPI-FB on
the ground the source of the fund was illegal or unauthorized
-BPI-FB alleged that the check received by Buenaventura from Amado Franco was drawn by the Teves
against the current account of the Tevesteco Co., Inc; whose funds consisted mainly of funds transferred
from another account belonging to the First Metro Investment Corporation (FMIC)
-Such transfer of funds was affected on the basis of an authority to debit bearing signatures of certain
officers of FMIC, which were allegedly FORGED.
-Buenaventura, et al. then filed a petition for the reinstatement of their account after it was frozen by BPI-
FB due to the allegation that the money came from an unlawful source

RTC: Rendered its decision finding that BPI-FB had no right to freeze the deposits of Buenaventura, et al.
since they had no participation in any fraud being holders in good faith
CA: Affirmed with modification the decision of the RTC. Holding that BPI-FB is not justified in freezing the
amounts deposited by Buenaventura, et al. for suspicion of being illegal because such allegation has not
been proved

ISSUE: WON BPI-FB is justified in freezing the current account of Buenaventura et. Al in alleging
that the source of its funds was derived from a forged document?

HELD:

NO.

-BPI-FB has no unilateral right of freezing the account of Buenaventura, et al. based on the suspicion that
the funds in the latters account are illegal or unauthorized having been sourced from the unlawful transfer
of funds from the account of FMIC to Tevesteco and disallow any withdrawal therefrom.

-It is the banks responsibility to ensure whether or not the drawers signature is genuine before clearing a
check. It should possess appropriate detecting devises for uncovering forgeries and/or alterations on these
instruments. Unless a forgery or alteration is attributable to the fault or negligence of the drawer himself,
the remedy of the drawee bank that negligently clears a forged and/or altered check for payment is against
the party responsible for the forgery or alteration, otherwise, it bears the loss
-Having been negligent in detecting the forgery prior to clearing the check, BPI-FB should bear the loss and
cannot shift the blame to Buenaventura, et al. having failed to show any participation on their part in the
forgery

DECISION:
The assailed decision and resolution of the CA, which affirmed with modification the decision rendered by
the RTC is hereby affirmed. BPI Family Bank is directed to pay Buenaventura, et al. the amount of
P50,000.00 as exemplary damages. Costs against BPI Family Bank.