GR 173259

PNB v. FF Cruz 4nd Co,

Inc

Petitioner:
Philippine N.tion.l B.nk (PNB)

Respondent:
FF Cruz .nd Co, Inc (FFCCI)

Felipe Cruz - President,

sign.tory
Angelit. Cruz - Secret.ry,
sign.tory
Aure. C.l.r.s - Account.nt of
FFCCI who stole their millions

Doctrine:
As between . b.nk .nd its
depositor, where the b.nks
negligence is the proxim.te
c.use of the loss .nd the
depositor is guilty of
contributory negligence, the
gre.ter proportion of the loss
sh.ll be borne by the b.nk.

F+ctu+l Antecedents
● FFCCI opened . s.vings/
current .nd . doll.r
s.vings .ccount with PNB
● Its President Felipe Cruz
.nd Secret.ry-Tre.surer
Angelit. A. Cruz were the
n.med sign.tories for the
s.id .ccounts.
● They on sep.r.te but
coev.l d.tes left for .nd
returned from the USA.
● While they were thus out of
the country, .pplic.tions
for c.shiers .nd m.n.gers
checks be.ring Felipes
sign.ture were presented
to .nd both .pproved by
the PNB.
● The first w.s on M.rch 27,
1995 for P9,950,000.00
p.y.ble to . cert.in Gene
B. S.ng.l.ng .nd the
other one w.s on April 24,
 1995 for P3,260,500.31
p.y.ble to one P.ul
B.utist..
● The .mounts of these
checks were then debited
by the PNB .g.inst the
.ccount of FFCCI.
● When Angelit. returned to
the country she noticed the
deductions of
P9,950,000.00 .nd
P3,260,500.31.
● Cl.iming th.t these were
un.uthorized .nd
fr.udulently m.de, [FFCCI]
requested PNB to credit
b.ck .nd restore to its
.ccount the v.lue of the
checks.
● PNB refused
● [FFCCI] filed . suit for
d.m.ges .g.inst the PNB
.nd its own .ccount.nt
Aure. C.p.r.s (or
C.p.r.s).
● PNB .verred l.ck of c.use
of .ction.
● It .lleged th.t it exercised
due diligence in h.ndling
the .ccount of [FFCCI].
The .pplic.tions for
m.n.gers check h.ve
p.ssed through the
st.nd.rd b.nk procedures
.nd it w.s only .fter
finding no infirmity th.t
these were given due
course.
● In f.ct, it w.s no C.p.r.s,
the .ccount.nt of [FFCCI],
who confirmed the
regul.rity of the
tr.ns.ction.
● The del.y of [FFCCI] in
picking up .nd going over
the b.nk st.tements w.s
the proxim.te c.use of its
self-procl.imed injury. H.d
[FFCCI] been
conscientious in this
reg.rd, the .lleged
chic.nery would h.ve been
detected e.rly on .nd
C.p.r.s effectively
 prevented from
.bsconding with its
millions. It pr.yed for the
dismiss.l of the compl.int.

Region+l Tri+l Courts

Ruling
– FFCCI w.s guilty of
negligence in clothing
C.p.r.s with .uthority to
m.ke decisions on .nd
dispositions of its .ccount
which p.ved the w.y for
the fr.udulent tr.ns.ctions
perpetr.ted by C.p.r.s;
th.t, in pr.ctice, FFCCI
w.ived the two-sign.ture
requirement in
tr.ns.ctions involving the
subject combo .ccount so
much so th.t Philippine
N.tion.l B.nk (PNB) could
not be f.ulted for honoring
the .pplic.tions for
m.n.gers check even if
only the sign.ture of Felipe
 Cruz .ppe.red thereon;
.nd th.t FFCCI w.s
negligent in not
immedi.tely informing PNB
of the fr.ud.
– HOWEVER, PNB w.s,
likewise, negligent in not
c.lling or person.lly
verifying from the
.uthorized sign.tories the
legitim.cy of the subject
withdr.w.ls considering
th.t they were in huge
.mounts.
– PNB h.d the l.st cle.r
ch.nce to prevent the
un.uthorized debits from
FFCCIs .ccount. Thus,
PNB should be.r the whole
loss.

WHEREFORE, judgment is
hereby rendered ordering
defend9nt [PNB] to p9y pl9intiff
[FFCCI] P13,210,500.31
representing the 9mounts
debited 9g9inst pl9intiffs
9ccount, with interest 9t the
leg9l r9te computed from the
filing of the compl9int plus
costs of suit.
IT IS SO ORDERED.

Court of Appe4ls Ruling

– .ffirmed RTC with

modific.tion
– PNB will be.r 60% while

FFCCI the 40%

– FFCCI guilty of contributory

negligence bec.use it
clothed its .ccount.nt/
bookkeeper C.p.r.s with
.pp.rent .uthority to
tr.ns.ct business with
PNB. In .ddition, FFCCI
f.iled to timely ex.mine its
monthly st.tement of
.ccount .nd report the
discrep.ncy to PNB within
. re.son.ble period of
time to prevent or recover
the loss. FFCCIs
contributory negligence,
thus, mitig.ted the b.nks
 li.bility.

WHEREFORE, the 9ppe9led

Decision is AFFIRMED with the
MODIFICATION th9t [PNB] sh9ll
p9y [FFCCI] only 60% of the
9ctu9l d9m9ges 9w9rded by
the tri9l court while the
rem9ining 40% sh9ll be borne
by [FFCCI].

SO ORDERED.

Supreme Court Ruling

We .ffirm the ruling of the CA.

PNB is guilty of negligence.

We resolved with fin.lity th.t
FFCCI is guilty of contributory
negligence, thus, m.king it
p.rtly li.ble for the loss .rising
from the un.uthorized
withdr.w.l of P13,210,500.31
from its combo .ccount.
The c.se before us is, thus,
limited to PNBs .lleged
negligence in the subject
tr.ns.ctions which the
.ppell.te court found to be the
proxim.te c.use of the loss,
thus, m.king it li.ble for the
gre.ter p.rt of the loss.

As correctly found by the

.ppell.te court, PNB
f.iled to m.ke the proper
verific.tion bec.use the
.pplic.tions for the m.n.gers
check do not be.r the sign.ture
of the b.nk verifier.

We find no reversible error in

the findings of the .ppell.te
court th.t PNB w.s negligent in
the h.ndling of FFCCIs combo
.ccount, specific.lly, with
respect to PNBs f.ilure to
detect the forgeries in the
subject .pplic.tions for
m.n.gers check which could
h.ve prevented the loss.

As we h.ve often ruled, the

b.nking business is impressed
with public trust.[21] A higher
degree of diligence is imposed
on b.nks rel.tive to the
h.ndling of their .ff.irs th.n
th.t of .n ordin.ry business
enterprise.[22] Thus, the
degree of responsibility, c.re
.nd
trustworthiness expected of
their offici.ls .nd employees is
f.r gre.ter th.n those of
ordin.ry officers .nd
employees in other enterprises.

In the c.se .t b.r, PNB f.iled to

meet the high st.nd.rd of
diligence required by the
circumst.nces to prevent the
fr.ud. InPhilippine B.nk of
Commerce v. Court of
Appe.ls[24].nd The
Consolid.ted B.nk
& Trust Corpor.tion v. Court of
Appe.ls,[25] where the b.nks
negligence is the proxim.te
c.use of the loss .nd the
depositor is guilty of
contributory negligence, we
.lloc.ted the d.m.ges
between the b.nk .nd the
depositor on . 60-40 r.tio. We
.pply the s.me ruling in this
c.se considering th.t, .s
shown .bove, PNBs negligence
is the proxim.te c.use of the
loss while the issue .s to
FFCCIs contributory negligence
h.s been settled with fin.lity in
G.R. No. 173278.

Thus, the .ppell.te court

properly .djudged PNB to be.r
the gre.ter p.rt of the loss
consistent with these rulings.

WHEREFORE, the petition is

DENIED. The J.nu.ry 31, 2006
Decision .nd June 26, 2006
Resolution of the Court of
Appe.ls in CA-G.R. CV No.
81349 .re AFFIRMED. Costs
.g.inst petitioner.
SO ORDERED.