Bank Liability for Unauthorized Joint Account Termination: BPI v. Fernandez

The Supreme Court's 2015 decision in Bank of the Philippine Islands v. Fernandez (G.R. No. 173134) clarifies the extent of a bank's liability when it releases funds from joint depositor.

• A bank's actual knowledge defeats claims of good faith. Accepting an affidavit of loss when the bank knows the certificates are not lost constitutes bad faith.
• Indemnity agreements do not shield banks from liability. A bank that participates in an irregular transaction cannot invoke an indemnity agreement to escape responsibility, under the doctrine of in pari delicto.
• Banks owe depositors a fiduciary duty. The business of banking is impressed with public interest, requiring the highest degree of integrity, care, and respect in handling client accounts.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.