BPI savings vs first metro investment 429 scra 30

Facts:

Respondent FMIC an investment house, through its EVP Ong, opened a current account amounting
P100M with petitioners San Francisco Del Monte branch upon the request of his friend which is a close
acquaintance of said banks branch manager with the latters aim of increasing the deposit level in his
branch. Petitioner through its SFDM branch manager guaranteed the payment of deposit by the FMIC
with 17% interest on the condition that the interest is to be paid in advance. An agreement was reached
between the parties and subsequently petitioner paid FMIC upon clearance of the latters check deposit.
However, on the basis of an Authority to Debit signed by the EVP and Senior Manager of FMIC,
petitioner transferred P80M from FMCIs current account to the savings account of one Tevesteco, a
stevedoring company. FMIC denied having authorized the transfer of its funds claiming that the
signatures were falsified. In order to recover immediately its deposit, FMCI issued a check payable to
itself and drawn on its deposit but was dishonored upon presentation for payment. Thus, FMIC filed a
complaint with the RTC which then ruled in their favor. CA affirmed the decision of RTC with
modification that BPI Family Savings Bank is liable to FMIC for the amount of 65,332,321.99 ; plus
interest at 17% per annum from August 29, 1989 until fully restored. Further, tnhis 17% interest hsall
inself earn interest at 12% from October 4, 1989 until fully paid.

Issue: Whether the CA erred in awarding the 17% per annum interest corresponding to the amount
deposited FMIC.

Held:

We hold that the parties did not intend the deposit to be treated as a demand deposit but
rather as an interest-earning time deposit not withdrawable any time. Both agreed that the deposit
of P100 million was non-withdrawable for one year upon payment in advance of the 17% per annum
interest. Respondents time deposit of P100 million was accepted by petitioner as shown by a deposit
slip prepared and signed by Ong himself who indicated therein the account number to which the deposit
is to be credited, the name of FMIC as depositor or account holder, the date of deposit, and the amount
of P100 million as deposit in check. Clearly, when respondent FMIC invested its money with petitioner
BPI FB, they intended the P100 million as a time deposit, to earn 17% per annum interest and to remain
intact until its maturity date one year thereafter.

The rule is well settled that when the obligation is breached, and it consists in the payment of a
sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have
been stipulated in writing, as in this case. Furthermore, the interest due shall itself earn legal interest
from the time it is judicially demanded.[8] Besides, the matter of how much interest respondent is
entitled to falls squarely within the issues framed by the parties in their respective pleadings filed with
the court a quo. At any rate, courts may indeed grant the relief warranted by the allegations and
proof even if no such specific relief is prayed for if only to conclude a complete and thorough resolution
of the issues involved.[9]