Prudential Bank v Chonney Lim GR No.

136371, November 11, 2005

Facts:
Respondent allegedly made 2 deposits in the amount of P34,000 each on the 14 th and 15th of
March 1988 in his savings account. He availed of the petitioner banks automatic transfer system
where his savings deposit may be automatically transferred in his checking account in case the
latter has insufficient fund to pay for his issued checks. Apparently, respondent received a letter
of dishonor for his checks due to insufficient fund. He wrote a letter to the bank opposing their
claim that he has an insufficient fund while asserting to have made two separate deposits in the
amount of P34,000 to his savings account. The bank denied receiving two separate deposits and
verified only that respondent made a deposit only on the 14 th of March and that the deposit slip
dated March 15 presented by the respondent is merely a copy of the former. Upon presentation of
evidence, it was clear that the two separate deposit slips have the same amount but with different
denominations stated therein. This was further attested by the bank teller who admitted to have
stamped both deposit slips. The lower court decided in favor of the respondent. Upon appeal by
the petitioner, the court of appeals affirmed the lower court decision with some modification on
the award of damages hence this petition to the Supreme Court.
Issue:
Whether or not there was negligence on the part of the bank to record the second deposit made
on March 15 by the respondent.
Ruling:
The court held that respondent presented substantial evidence to prove that the two deposits were
made in his account of the same amount in March 14 and 15, 1988. The failure of the bank to
credit the deposit made by the respondent on March 15 to his savings account resulting to his
dishonored checks constitutes a breach of duty of the bank to its client that equates to negligence.
By the nature of the bank functions, they are mandated to observe the highest degree of diligence
in treating the accounts of their depositors. The banking industry is impressed with public
interest and by virtue of their fiduciary duty to their client banks are mandated to treat with
meticulous care and fidelity all undertakings pertaining to their depositors accounts. The court
finds the imposition of an award for damages are in order. The wrongful act of the bank
constitutes injury to the respondent because the financial credit of a businessman is a valuable
asset and any adverse reflection of his credit would result to material a loss to him.