Professional Documents
Culture Documents
Diaz and
FIRST DIVISION reported the incident to Macaraya.
Macaraya immediately prepared a deposit
slip in duplicate copies with a check
[G.R. No. 138569. September 11, 2003] of P200,000. Macaraya, together with Calapre,
went to Solidbank and presented to Teller No. 6
the deposit slip and check. The teller stamped the
words DUPLICATE and SAVING TELLER 6
THE CONSOLIDATED BANK and TRUST SOLIDBANK HEAD OFFICE on the duplicate
CORPORATION, petitioner, vs. copy of the deposit slip. When Macaraya asked
COURT OF APPEALS and L.C. DIAZ for the passbook, Teller No. 6 told Macaraya that
and COMPANY, CPAs, respondents. someone got the passbook but she could not
remember to whom she gave the passbook.
When Macaraya asked Teller No. 6 if Calapre got
DECISION
the passbook, Teller No. 6 answered that
CARPIO, J.: someone shorter than Calapre got the passbook.
Calapre was then standing beside Macaraya.
Teller No. 6 handed to Macaraya a deposit
The Case slip dated 14 August 1991 for the deposit of a
check for P90,000 drawn on Philippine Banking
Corporation (PBC). This PBC check of L.C. Diaz
Before us is a petition for review of the was a check that it had long closed.[4] PBC
Decision[1] of the Court of Appeals dated 27 subsequently dishonored the check because of
October 1998 and its Resolution dated 11 May insufficient funds and because the signature in
1999. The assailed decision reversed the the check differed from PBCs specimen
Decision[2]of the Regional Trial Court of Manila, signature. Failing to get back the passbook,
Branch 8, absolving petitioner Consolidated Bank Macaraya went back to her office and reported
and Trust Corporation, now known as Solidbank the matter to the Personnel Manager of L.C. Diaz,
Corporation (Solidbank), of any liability. The Emmanuel Alvarez.
questioned resolution of the appellate court
denied the motion for reconsideration of The following day, 15 August 1991, L.C.
Solidbank but modified the decision by deleting Diaz through its Chief Executive Officer, Luis C.
the award of exemplary damages, attorneys fees, Diaz (Diaz), called up Solidbank to stop any
expenses of litigation and cost of suit. transaction using the same passbook until L.C.
Diaz could open a new account.[5] On the same
day, Diaz formally wrote Solidbank to make the
same request. It was also on the same day that
The Facts L.C. Diaz learned of the unauthorized withdrawal
the day before, 14 August 1991, of P300,000
from its savings account. The withdrawal slip for
Solidbank is a domestic banking corporation the P300,000 bore the signatures of the
organized and existing under Philippine authorized signatories of L.C. Diaz, namely Diaz
laws. Private respondent L.C. Diaz and and Rustico L. Murillo. The signatories, however,
Company, CPAs (L.C. Diaz), is a professional denied signing the withdrawal slip. A certain Noel
partnership engaged in the practice of Tamayo received the P300,000.
accounting.
In an Information[6] dated 5 September 1991,
Sometime in March 1976, L.C. Diaz opened L.C. Diaz charged its messenger, Emerano
a savings account with Solidbank, designated as Ilagan (Ilagan) and one Roscon Verdazola with
Savings Account No. S/A 200-16872-6. Estafa through Falsification of Commercial
On 14 August 1991, L.C. Diaz through its Document. The Regional Trial Court of Manila
cashier, Mercedes Macaraya (Macaraya), filled dismissed the criminal case after the City
up a savings (cash) deposit slip for P990 and a Prosecutor filed a Motion to Dismiss on 4 August
savings (checks) deposit slip for P50.Macaraya 1992.
instructed the messenger of L.C. Diaz, Ismael On 24 August 1992, L.C. Diaz through its
Calapre (Calapre), to deposit the money with counsel demanded from Solidbank the return of
Solidbank. Macaraya also gave Calapre the its money. Solidbank refused.
Solidbank passbook.
On 25 August 1992, L.C. Diaz filed a
Calapre went to Solidbank and presented to Complaint[7] for Recovery of a Sum of Money
Teller No. 6 the two deposit slips and the against Solidbank with the Regional Trial Court of
passbook. The teller acknowledged receipt of the Manila, Branch 8. After trial, the trial court
deposit by returning to Calapre the duplicate rendered on 28 December 1994 a decision
copies of the two deposit slips. Teller No. 6 absolving Solidbank and dismissing the
stamped the deposit slips with the words complaint.
DUPLICATE and SAVING TELLER 6
SOLIDBANK HEAD OFFICE. Since the L.C. Diaz then appealed[8] to the Court of
transaction took time and Calapre had to make Appeals. On 27 October 1998, the Court of
another deposit for L.C. Diaz with Allied Bank, he Appeals issued its Decision reversing the
left the passbook with Solidbank. Calapre then decision of the trial court.
went to Allied Bank. When Calapre returned to
Solidbank to retrieve the passbook, Teller No. 6 On 11 May 1999, the Court of Appeals
informed him that somebody got the issued its Resolution denying the motion for
reconsideration of Solidbank. The appellate
court, however, modified its decision by deleting
the award of exemplary damages and attorneys precautionary procedures observed by the two
fees. parties whenever L.C. Diaz withdrew significant
amounts from its account. L.C. Diaz claimed that
a letter must accompany withdrawals of more
than P20,000. The letter must request Solidbank
The Ruling of the Trial Court
to allow the withdrawal and convert the amount to
a managers check. The bearer must also have a
In absolving Solidbank, the trial court applied letter authorizing him to withdraw the same
the rules on savings account written on the amount. Another person driving a car must
passbook. The rules state that possession of this accompany the bearer so that he would not walk
book shall raise the presumption of ownership from Solidbank to the office in making the
and any payment or payments made by the bank withdrawal. The trial court pointed out that L.C.
upon the production of the said book and entry Diaz disregarded these precautions in its past
therein of the withdrawal shall have the same withdrawal. On 16 July 1991, L.C. Diaz
effect as if made to the depositor personally.[9] withdrew P82,554 without any separate letter of
authorization or any communication with
At the time of the withdrawal, a certain Noel Solidbank that the money be converted into a
Tamayo was not only in possession of the managers check.
passbook, he also presented a withdrawal slip
with the signatures of the authorized signatories The trial court further justified the dismissal
of L.C. Diaz. The specimen signatures of these of the complaint by holding that the case was a
persons were in the signature cards. The teller last ditch effort of L.C. Diaz to recover P300,000
stamped the withdrawal slip with the words after the dismissal of the criminal case against
Saving Teller No. 5. The teller then passed on the Ilagan.
withdrawal slip to Genere Manuel (Manuel) for The dispositive portion of the decision of the
authentication. Manuel verified the signatures on trial court reads:
the withdrawal slip. The withdrawal slip was then
given to another officer who compared the
IN VIEW OF THE FOREGOING, judgment is
signatures on the withdrawal slip with the
hereby rendered DISMISSING the complaint.
specimen on the signature cards. The trial court
concluded that Solidbank acted with care and
observed the rules on savings account when it The Court further renders judgment in favor of
allowed the withdrawal of P300,000 from the defendant bank pursuant to its counterclaim the
savings account of L.C. Diaz. amount of Thirty Thousand Pesos (P30,000.00) as
attorneys fees.
The trial court pointed out that the burden of
proof now shifted to L.C. Diaz to prove that the With costs against plaintiff.
signatures on the withdrawal slip were
forged. The trial court admonished L.C. Diaz for
SO ORDERED.[12]
not offering in evidence the National Bureau of
Investigation (NBI) report on the authenticity of
the signatures on the withdrawal slip
for P300,000. The trial court believed that L.C. The Ruling of the Court of Appeals
Diaz did not offer this evidence because it is
derogatory to its action.
The Court of Appeals ruled that Solidbanks
Another provision of the rules on savings negligence was the proximate cause of the
account states that the depositor must keep the unauthorized withdrawal of P300,000 from the
passbook under lock and key.[10] When another savings account of L.C. Diaz. The appellate court
person presents the passbook for withdrawal reached this conclusion after applying the
prior to Solidbanks receipt of the notice of loss of provision of the Civil Code on quasi-delict, to wit:
the passbook, that person is considered as the
owner of the passbook. The trial court ruled that
Article 2176. Whoever by act or omission causes
the passbook presented during the questioned
damage to another, there being fault or negligence, is
transaction was now out of the lock and key and
obliged to pay for the damage done. Such fault or
presumptively ready for a business
negligence, if there is no pre-existing contractual
transaction.[11]
relation between the parties, is called a quasi-delict
Solidbank did not have any participation in and is governed by the provisions of this chapter.
the custody and care of the passbook. The trial
court believed that Solidbanks act of allowing the The appellate court held that the three elements
withdrawal of P300,000 was not the direct and of a quasi-delict are present in this case, namely:
proximate cause of the loss. The trial court held (a) damages suffered by the plaintiff; (b) fault or
that L.C. Diazs negligence caused the negligence of the defendant, or some other
unauthorized withdrawal. Three facts establish person for whose acts he must respond; and (c)
L.C. Diazs negligence: (1) the possession of the the connection of cause and effect between the
passbook by a person other than the depositor fault or negligence of the defendant and the
L.C. Diaz; (2) the presentation of a signed damage incurred by the plaintiff.
withdrawal receipt by an unauthorized person;
and (3) the possession by an unauthorized The Court of Appeals pointed out that the
person of a PBC check long closed by L.C. Diaz, teller of Solidbank who received the withdrawal
which check was deposited on the day of the slip for P300,000 allowed the withdrawal without
fraudulent withdrawal. making the necessary inquiry. The appellate
court stated that the teller, who was not presented
The trial court debunked L.C. Diazs by Solidbank during trial, should have called up
contention that Solidbank did not follow the the depositor because the money to be withdrawn
was a significant amount. Had the teller called up WHEREFORE, foregoing considered, our decision
L.C. Diaz, Solidbank would have known that the dated October 27, 1998 is affirmed with modification
withdrawal was unauthorized. The teller did not by deleting the award of exemplary damages and
even verify the identity of the impostor who made attorneys fees, expenses of litigation and cost of suit.
the withdrawal. Thus, the appellate court found
Solidbank liable for its negligence in the selection SO ORDERED.[15]
and supervision of its employees.
The appellate court ruled that while L.C. Diaz Hence, this petition.
was also negligent in entrusting its deposits to its
messenger and its messenger in leaving the
passbook with the teller, Solidbank could not The Issues
escape liability because of the doctrine of last
clear chance. Solidbank could have averted the
injury suffered by L.C. Diaz had it called up L.C. Solidbank seeks the review of the decision
Diaz to verify the withdrawal. and resolution of the Court of Appeals on these
The appellate court ruled that the degree of grounds:
diligence required from Solidbank is more than
that of a good father of a family. The business and I. THE COURT OF APPEALS ERRED
functions of banks are affected with public IN HOLDING THAT
interest. Banks are obligated to treat the accounts PETITIONER BANK SHOULD
of their depositors with meticulous care, always SUFFER THE LOSS BECAUSE
having in mind the fiduciary nature of their ITS TELLER SHOULD HAVE
relationship with their clients. The Court of FIRST CALLED PRIVATE
Appeals found Solidbank remiss in its duty, RESPONDENT BY TELEPHONE
violating its fiduciary relationship with L.C. Diaz. BEFORE IT ALLOWED THE
WITHDRAWAL OF P300,000.00
The dispositive portion of the decision of the TO RESPONDENTS
Court of Appeals reads: MESSENGER EMERANO
ILAGAN, SINCE THERE IS NO
WHEREFORE, premises considered, the decision AGREEMENT BETWEEN THE
appealed from is hereby REVERSED and a new one PARTIES IN THE OPERATION
entered. OF THE SAVINGS ACCOUNT,
NOR IS THERE ANY BANKING
1. Ordering defendant-appellee LAW, WHICH MANDATES
Consolidated Bank and Trust THAT A BANK TELLER
Corporation to pay plaintiff- SHOULD FIRST CALL UP THE
appellant the sum of Three DEPOSITOR BEFORE
Hundred Thousand Pesos ALLOWING A WITHDRAWAL
(P300,000.00), with interest OF A BIG AMOUNT IN A
thereon at the rate of 12% per SAVINGS ACCOUNT.
annum from the date of filing of the
complaint until paid, the sum II. THE COURT OF APPEALS ERRED
of P20,000.00 as exemplary IN APPLYING THE DOCTRINE
damages, and P20,000.00 as OF LAST CLEAR CHANCE AND
attorneys fees and expenses of IN HOLDING THAT
litigation as well as the cost of suit; PETITIONER BANKS TELLER
and HAD THE LAST OPPORTUNITY
TO WITHHOLD THE
2. Ordering the dismissal of defendant- WITHDRAWAL WHEN IT IS
appellees counterclaim in the UNDISPUTED THAT THE TWO
amount of P30,000.00 as attorneys SIGNATURES OF
fees. RESPONDENT ON THE
WITHDRAWAL SLIP ARE
GENUINE AND PRIVATE
SO ORDERED.[13]
RESPONDENTS PASSBOOK
WAS DULY PRESENTED, AND
Acting on the motion for reconsideration of CONTRARIWISE RESPONDENT
Solidbank, the appellate court affirmed its WAS NEGLIGENT IN THE
decision but modified the award of damages. The SELECTION AND
appellate court deleted the award of exemplary SUPERVISION OF ITS
damages and attorneys fees. Invoking Article MESSENGER EMERANO
2231[14] of the Civil Code, the appellate court ILAGAN, AND IN THE
ruled that exemplary damages could be granted SAFEKEEPING OF ITS CHECKS
if the defendant acted with gross negligence. AND OTHER FINANCIAL
Since Solidbank was guilty of simple negligence DOCUMENTS.
only, the award of exemplary damages was not
justified. Consequently, the award of attorneys
III. THE COURT OF APPEALS ERRED
fees was also disallowed pursuant to Article 2208
IN NOT FINDING THAT THE
of the Civil Code. The expenses of litigation and
INSTANT CASE IS A LAST
cost of suit were also not imposed on Solidbank.
DITCH EFFORT OF PRIVATE
The dispositive portion of the Resolution RESPONDENT TO RECOVER
reads as follows: ITS P300,000.00 AFTER
FAILING IN ITS EFFORTS TO
RECOVER THE SAME FROM integrity and performance is deemed written into
ITS EMPLOYEE EMERANO every deposit agreement between a bank and its
ILAGAN. depositor. The fiduciary nature of banking
requires banks to assume a degree of diligence
IV. THE COURT OF APPEALS ERRED higher than that of a good father of a
IN NOT MITIGATING THE family. Article 1172 of the Civil Code states that
DAMAGES AWARDED the degree of diligence required of an obligor is
AGAINST PETITIONER UNDER that prescribed by law or contract, and absent
ARTICLE 2197 OF THE CIVIL such stipulation then the diligence of a good
CODE, NOTWITHSTANDING father of a family.[22] Section 2 of RA 8791
ITS FINDING THAT prescribes the statutory diligence required from
PETITIONER BANKS banks that banks must observe high standards of
NEGLIGENCE WAS ONLY integrity and performance in servicing their
CONTRIBUTORY.[16] depositors. Although RA 8791 took effect almost
nine years after the unauthorized withdrawal of
the P300,000 from L.C. Diazs savings account,
jurisprudence[23] at the time of the withdrawal
The Ruling of the Court already imposed on banks the same high
standard of diligence required under RA No.
8791.
The petition is partly meritorious.
However, the fiduciary nature of a bank-
depositor relationship does not convert the
contract between the bank and its depositors
Solidbanks Fiduciary Duty under the Law
from a simple loan to a trust agreement, whether
express or implied. Failure by the bank to pay the
The rulings of the trial court and the Court of depositor is failure to pay a simple loan, and not
Appeals conflict on the application of the law. The a breach of trust.[24] The law simply imposes on
trial court pinned the liability on L.C. Diaz based the bank a higher standard of integrity and
on the provisions of the rules on savings account, performance in complying with its obligations
a recognition of the contractual relationship under the contract of simple loan, beyond those
between Solidbank and L.C. Diaz, the latter being required of non-bank debtors under a similar
a depositor of the former. On the other hand, the contract of simple loan.
Court of Appeals applied the law on quasi-delict The fiduciary nature of banking does not
to determine who between the two parties was convert a simple loan into a trust agreement
ultimately negligent. The law on quasi-delict because banks do not accept deposits to enrich
or culpa aquiliana is generally applicable when depositors but to earn money for themselves. The
there is no pre-existing contractual relationship law allows banks to offer the lowest possible
between the parties. interest rate to depositors while charging the
We hold that Solidbank is liable for breach of highest possible interest rate on their own
contract due to negligence, or culpa contractual. borrowers. The interest spread or differential
belongs to the bank and not to the depositors who
The contract between the bank and its are not cestui que trust of banks. If depositors
depositor is governed by the provisions of the are cestui que trust of banks, then the interest
Civil Code on simple loan.[17] Article 1980 of the spread or income belongs to the depositors, a
Civil Code expressly provides that x x x savings x situation that Congress certainly did not intend in
x x deposits of money in banks and similar enacting Section 2 of RA 8791.
institutions shall be governed by the provisions
concerning simple loan. There is a debtor-
creditor relationship between the bank and its
Solidbanks Breach of its Contractual
depositor.The bank is the debtor and the
Obligation
depositor is the creditor. The depositor lends the
bank money and the bank agrees to pay the
depositor on demand. The savings deposit Article 1172 of the Civil Code provides that
agreement between the bank and the depositor is responsibility arising from negligence in the
the contract that determines the rights and performance of every kind of obligation is
obligations of the parties. demandable. For breach of the savings deposit
The law imposes on banks high standards in agreement due to negligence, or culpa
view of the fiduciary nature of banking. Section 2 contractual, the bank is liable to its depositor.
of Republic Act No. 8791 (RA 8791),[18] which Calapre left the passbook with Solidbank
took effect on 13 June 2000, declares that the because the transaction took time and he had to
State recognizes the fiduciary nature of banking go to Allied Bank for another transaction. The
that requires high standards of integrity and passbook was still in the hands of the employees
performance.[19] This new provision in the general of Solidbank for the processing of the deposit
banking law, introduced in 2000, is a statutory when Calapre left Solidbank. Solidbanks rules on
affirmation of Supreme Court decisions, starting savings account require that the deposit book
with the 1990 case of Simex International v. should be carefully guarded by the depositor and
Court of Appeals,[20] holding that the bank is kept under lock and key, if possible. When the
under obligation to treat the accounts of its passbook is in the possession of Solidbanks
depositors with meticulous care, always having in tellers during withdrawals, the law imposes on
mind the fiduciary nature of their relationship.[21] Solidbank and its tellers an even higher degree of
This fiduciary relationship means that the diligence in safeguarding the passbook.
banks obligation to observe high standards of
Likewise, Solidbanks tellers must exercise a proximate cause that allowed the impostor to
high degree of diligence in insuring that they withdraw the P300,000. For the appellate court,
return the passbook only to the depositor or his the proximate cause was the tellers negligence in
authorized representative. The tellers know, or processing the withdrawal without first verifying
should know, that the rules on savings account with L.C. Diaz. We do not agree with either court.
provide that any person in possession of the
passbook is presumptively its owner. If the tellers Proximate cause is that cause which, in
give the passbook to the wrong person, they natural and continuous sequence, unbroken by
would be clothing that person presumptive any efficient intervening cause, produces the
ownership of the passbook, facilitating injury and without which the result would not have
unauthorized withdrawals by that person. For occurred.[26] Proximate cause is determined by
failing to return the passbook to Calapre, the the facts of each case upon mixed considerations
authorized representative of L.C. Diaz, Solidbank of logic, common sense, policy and precedent.[27]
and Teller No. 6 presumptively failed to observe L.C. Diaz was not at fault that the passbook
such high degree of diligence in safeguarding the landed in the hands of the impostor. Solidbank
passbook, and in insuring its return to the party was in possession of the passbook while it was
authorized to receive the same. processing the deposit. After completion of the
In culpa contractual, once the plaintiff proves transaction, Solidbank had the contractual
a breach of contract, there is a presumption that obligation to return the passbook only to Calapre,
the defendant was at fault or negligent. The the authorized representative of L.C.
burden is on the defendant to prove that he was Diaz. Solidbank failed to fulfill its contractual
not at fault or negligent. In contrast, in culpa obligation because it gave the passbook to
aquiliana the plaintiff has the burden of proving another person.
that the defendant was negligent. In the present Solidbanks failure to return the passbook to
case, L.C. Diaz has established that Solidbank Calapre made possible the withdrawal of
breached its contractual obligation to return the the P300,000 by the impostor who took
passbook only to the authorized representative of possession of the passbook. Under Solidbanks
L.C. Diaz. There is thus a presumption that rules on savings account, mere possession of the
Solidbank was at fault and its teller was negligent passbook raises the presumption of ownership. It
in not returning the passbook to Calapre. The was the negligent act of Solidbanks Teller No. 6
burden was on Solidbank to prove that there was that gave the impostor presumptive ownership of
no negligence on its part or its employees. the passbook. Had the passbook not fallen into
Solidbank failed to discharge its the hands of the impostor, the loss of P300,000
burden. Solidbank did not present to the trial would not have happened. Thus, the proximate
court Teller No. 6, the teller with whom Calapre cause of the unauthorized withdrawal was
left the passbook and who was supposed to Solidbanks negligence in not returning the
return the passbook to him. The record does not passbook to Calapre.
indicate that Teller No. 6 verified the identity of We do not subscribe to the appellate courts
the person who retrieved the theory that the proximate cause of the
passbook. Solidbank also failed to adduce in unauthorized withdrawal was the tellers failure to
evidence its standard procedure in verifying the call up L.C. Diaz to verify the withdrawal.
identity of the person retrieving the passbook, if Solidbank did not have the duty to call up L.C.
there is such a procedure, and that Teller No. 6 Diaz to confirm the withdrawal. There is no
implemented this procedure in the present case. arrangement between Solidbank and L.C. Diaz to
Solidbank is bound by the negligence of its this effect. Even the agreement between
employees under the principle of respondeat Solidbank and L.C. Diaz pertaining to measures
superior or command responsibility. The defense that the parties must observe whenever
of exercising the required diligence in the withdrawals of large amounts are made does not
selection and supervision of employees is not a direct Solidbank to call up L.C. Diaz.
complete defense in culpa contractual, unlike There is no law mandating banks to call up
in culpa aquiliana.[25] their clients whenever their representatives
The bank must not only exercise high withdraw significant amounts from their
standards of integrity and performance, it must accounts. L.C. Diaz therefore had the burden to
also insure that its employees do likewise prove that it is the usual practice of Solidbank to
because this is the only way to insure that the call up its clients to verify a withdrawal of a large
bank will comply with its fiduciary duty. Solidbank amount of money. L.C. Diaz failed to do so.
failed to present the teller who had the duty to Teller No. 5 who processed the withdrawal
return to Calapre the passbook, and thus failed to could not have been put on guard to verify the
prove that this teller exercised the high standards withdrawal. Prior to the withdrawal of P300,000,
of integrity and performance required of the impostor deposited with Teller No. 6
Solidbanks employees. theP90,000 PBC check, which later
bounced. The impostor apparently deposited a
large amount of money to deflect suspicion from
Proximate Cause of the Unauthorized the withdrawal of a much bigger amount of
Withdrawal money. The appellate court thus erred when it
imposed on Solidbank the duty to call up L.C.
Diaz to confirm the withdrawal when no law
Another point of disagreement between the requires this from banks and when the teller had
trial and appellate courts is the proximate cause no reason to be suspicious of the transaction.
of the unauthorized withdrawal. The trial court
Solidbank continues to foist the defense that
believed that L.C. Diazs negligence in not
Ilagan made the withdrawal. Solidbank claims
securing its passbook under lock and key was the
that since Ilagan was also a messenger of L.C. Mitigated Damages
Diaz, he was familiar with its teller so that there
was no more need for the teller to verify the
withdrawal. Solidbank relies on the following Under Article 1172, liability (for culpa
statements in the Booking and Information Sheet contractual) may be regulated by the courts,
of Emerano Ilagan: according to the circumstances. This means that
if the defendant exercised the proper diligence in
xxx Ilagan also had with him (before the withdrawal) the selection and supervision of its employee, or
a forged check of PBC and indicated the amount of if the plaintiff was guilty of contributory
P90,000 which he deposited in favor of L.C. Diaz and negligence, then the courts may reduce the
Company. After successfully withdrawing this large award of damages. In this case, L.C. Diaz was
sum of money, accused Ilagan gave alias Rey (Noel guilty of contributory negligence in allowing a
Tamayo) his share of the loot. Ilagan then hired a withdrawal slip signed by its authorized
taxicab in the amount of P1,000 to transport him signatories to fall into the hands of an
(Ilagan) to his home province at Bauan, impostor. Thus, the liability of Solidbank should
Batangas.Ilagan extravagantly and lavishly spent his be reduced.
money but a big part of his loot was wasted in In Philippine Bank of Commerce v. Court
cockfight and horse racing. Ilagan was apprehended of Appeals,[33] where the Court held the
and meekly admitted his guilt.[28] (Emphasis depositor guilty of contributory negligence, we
supplied.) allocated the damages between the depositor
and the bank on a 40-60 ratio. Applying the same
L.C. Diaz refutes Solidbanks contention by ruling to this case, we hold that L.C. Diaz must
pointing out that the person who withdrew shoulder 40% of the actual damages awarded by
the P300,000 was a certain Noel Tamayo. Both the appellate court. Solidbank must pay the other
the trial and appellate courts stated that this Noel 60% of the actual damages.
Tamayo presented the passbook with the
withdrawal slip. WHEREFORE, the decision of the Court of
Appeals
We uphold the finding of the trial and is AFFIRMED with MODIFICATION. Petitioner
appellate courts that a certain Noel Tamayo Solidbank Corporation shall pay private
withdrew the P300,000. The Court is not a trier of respondent L.C. Diaz and Company, CPAs only
facts. We find no justifiable reason to reverse the 60% of the actual damages awarded by the Court
factual finding of the trial court and the Court of of Appeals. The remaining 40% of the actual
Appeals. The tellers who processed the deposit damages shall be borne by private respondent
of the P90,000 check and the withdrawal of L.C. Diaz and Company, CPAs.Proportionate
the P300,000 were not presented during trial to costs.
substantiate Solidbanks claim that Ilagan
deposited the check and made the questioned SO ORDERED.
withdrawal. Moreover, the entry quoted by
Solidbank does not categorically state that Ilagan
presented the withdrawal slip and the passbook.
1) to return to Plaintiff his time Besides, the Official Receipt (Exh. B, p. 32, Records)
deposit in the sum dated March 11, 1982 covering the sum
of P971,292.49 with interest of P664,987.67 time deposit did not provide for a
thereon at the legal rate, until maturity date implying clearly that the amount
fully restituted; covered by said receipt forms part of the total sum
2) to pay attorneys fees shown in the letter-certification which contained a
of P200,000.00; [and] maturity date. Moreover, it taxes ones credulity to
3) [to pay the] cost of these believe that appellee would make a time deposit on
proceedings. March 12, 1982 in the sum of P764,897.67 which
except for the additional sum of P100,000.00 is
practically identical (see underlined figures) to the
IT IS SO ORDERED.[16]
sum of P664,897.67 deposited the day before March
11, 1982.
The Ruling of the Court of Appeals Additionally, We agree with the contention of the
appellant that the lower court wrongly appreciated
the testimony of Mr. Pagsaligan. Our finding is
The Court of Appeals addressed the strengthened when we consider the alleged
procedural and substantive issues that the BANK application for loan by the appellee with the appellant
raised. in the sum of P500,000.00 dated October 24, 1983.
The appellate court ruled that the trial court (Exh. J, p. 40, Records), wherein it was stated that the
committed a reversible error when it denied the loan is for additional working capital versus
BANKs motion to cross-examine Marcos. The the various time deposit amounting
to P760,000.00.[17] (Emphasis supplied)
The Court of Appeals sustained the factual denied the BANKs motion to cross-examine
findings of the trial court in ruling that Promissory Marcos. Prior to the denial of the motion, the trial
Note No. 20-979-83 is void. There is no evidence court had properly declared the BANK in default.
of a bank ledger or computation of interest of the Since the BANK was in default, Marcos was able
loan. The appellate court blamed the BANK for to present his evidence ex-parte including his
failing to comply with the orders of the trial court own testimony. When the trial court lifted the
to produce the documents on the loan. The BANK order of default, the BANK was restored to its
also made inconsistent statements. In its Answer standing and rights in the action. However, as a
to the Complaint, the BANK alleged that the loan rule, the proceedings already taken should not be
was fully paid when it debited the time deposits of disturbed.[20] Nevertheless, it is within the trial
Marcos with the loan. However, in its discussion courts discretion to reopen the evidence
of the assigned errors, the BANK claimed that submitted by the plaintiff and allow the defendant
Marcos had yet to pay the loan. to challenge the same, by cross-examining the
plaintiffs witnesses or introducing countervailing
The appellate court deleted the award of evidence.[21] The 1964 Rules of Court, the rules
attorneys fees. It noted that the trial court failed to then in effect at the time of the hearing of this
justify the award of attorneys fees in the text of its case, recognized the trial courts exercise of this
decision. The dispositive portion of the decision discretion. The 1997 Rules of Court retained this
of the Court of Appeals reads: discretion.[22] Section 3, Rule 18 of the 1964
Rules of Court reads:
WHEREFORE, premises considered, the appealed
decision is SET ASIDE. A new judgment is hereby Sec. 3. Relief from order of default. A party declared
rendered ordering the appellant bank to return to the in default may any time after discovery thereof and
appellee his time deposit in the sum of P764,897.67 before judgment file a motion under oath to set aside
with 17% interest within 90 days from March 11, the order of default upon proper showing that his
1982 in accordance with the letter-certification failure to answer was due to fraud, accident, mistake
and with legal interest thereafter until fully or excusable neglect and that he has a meritorious
paid. Costs against the appellant. defense. In such case the order of default may be set
aside on such terms and conditions as the judge may
SO ORDERED.[18] (Emphasis supplied) impose in the interest of justice. (Emphasis supplied)
The BANK claims that it is a reputable The purpose of the rule requiring the
banking institution and that it has no reason to production of the best evidence is the prevention
forge Promissory Note No. 20-979-83. The trial of fraud.[41] If a party is in possession of evidence
court and appellate court did not rule that it was and withholds it, and seeks to substitute inferior
the bank that forged the promissory note. It was evidence in its place, the presumption naturally
Pagsaligan, the BANKs branch manager and a arises that the better evidence is withheld for
close friend of Marcos, whom the trial court fraudulent purposes, which its production would
categorically blamed for the fictitious loan expose and defeat.[42]
agreements. The trial court held that Pagsaligan The absence of the original of the
made up the loan agreement to cover up his documentary evidence casts suspicion on the
inability to account for the time deposits of existence of Promissory Note No. 20-979-83
Marcos. considering the BANKs fiduciary duty to keep
Whether it was the BANKs negligence and efficiently a record of its transactions with its
inefficiency or Pagsaligans misdeed that deprived depositors. Moreover, the circumstances
Marcos of the amount due him will not excuse the enumerated by the trial court bolster the
BANK from its obligation to return to Marcos the conclusion that Promissory Note No. 20-979-83
correct amount of his time deposits with is bogus. The BANK has only itself to blame for
interest. The duty to observe high standards of the dearth of competent proof to establish the
integrity and performance imposes on the BANK existence of Promissory Note No. 20-979-83.
that obligation. The BANK cannot also unjustly
enrich itself by keeping Marcos money.
Assuming Pagsaligan was behind the Total Amount Due to Marcos
spurious promissory note, the BANK would still
be accountable to Marcos. We have held that a
The BANK and Marcos do not now dispute
bank is liable for the wrongful acts of its officers
the ruling of the Court of Appeals that the total
done in the interest of the bank or in their dealings
amount of time deposits that Marcos placed with
as bank representatives but not for acts outside
the BANK is only P764,897.67 and
the scope of their authority.[37] Thus, we held:
not P1,429,795.34 as found by the trial court. The
BANK has always argued that Marcos time
A bank holding out its officers and agents as worthy deposits only totalled P764,897.67.[43] What the
of confidence will not be permitted to profit by the BANK insists on in this petition is the trial courts
frauds they may thus be enabled to perpetrate in the violation of its right to procedural due process and
apparent scope of their employment; nor will it be the absence of any obligation to pay or return
permitted to shirk its responsibility for such frauds, anything to Marcos. Marcos, on the other hand,
even though no benefit may accrue to the bank merely prays for the affirmation of either the trial
therefrom (10 Am Jur 2d, p. 114). Accordingly, a court or appellate court decision.[44] We uphold
banking corporation is liable to innocent third the finding of the Court of Appeals as to the
persons where the representation is made in the amount of the time deposits as such finding is in
course of its business by an agent acting within the accord with the evidence on record.
general scope of his authority even though, in the
particular case, the agent is secretly abusing his Marcos claimed that the certificates of time
authority and attempting to perpetrate a fraud upon deposit were with Pagsaligan for
his principal or some other person, for his own safekeeping. Marcos was only able to present the
ultimate benefit.[38] receipt dated 11 March 1982 and the letter-
certification dated 12 March 1982 to prove the
total amount of his time deposits with the
BANK. The letter-certification issued by
The Existence of Promissory Note No. 20-
Pagsaligan reads:
979-83 was not Proven
March 12, 1982
Dear Mr. Marcos: records do not show exactly when in March 1987
the obligation became due. In accordance with
This is to certify that we are taking care in your Article 2212 of the Civil Code, in such a case the
behalf various Time Deposit Certificates with an court shall fix the period of the duration of the
aggregate value of PESOS: SEVEN HUNDRED obligation.[50] The BANKs letter of demand is
SIXTY FOUR THOUSAND EIGHT HUNDRED dated 6 March 1989. We hold that the trust
NINETY SEVEN AND 67/100 (P764,897.67) receipts became due on 6 March 1987.
ONLY, issued today for 90 days at 17% p.a. with the Marcos payment of the marginal deposit
interest payable at maturity on June 10, 1982.
of P255,375 for the trust receipts resulted in the
proportionate reduction of the three trust
Thank you. receipts. The reduced value of the trust receipts
and their respective interest as of 6 March 1987
Sgd. are as follows:
FLORENCIO B. PAGSALIGAN
Branch 1. Trust Receipt No. CD 83.7 issued on 8
Manager[45] March 1983 originally for P300,000 was
reduced to P210,618.75 with interest
The foregoing certification is clear. The total of P101,027.76.[51]
amount of time deposits of Marcos as of 12 March
1982 is P764,897.67, inclusive of the sum 2. Trust Receipt No. CD 83.9 issued on 15
of P664,987.67 that Marcos placed on time March 1983 originally for P300,000 was
deposit on 11 March 1982. This is plainly seen reduced to P210,618.75 with interest
from the use of the word aggregate. of P100,543.04.[52]
We are not swayed by Marcos testimony that
the certification is actually for the first time deposit 3. Trust Receipt No. CD 83.10 issued on
that he placed on 11 March 1982. The letter- 15 March 1983 originally for P251,250
certification speaks of various Time Deposits was reduced to P174,637.5 with interest
Certificates with an aggregate value of P83,366.68. [53]
of P764,897.67. If the amount stated in the letter-
certification is for a single time deposit only, and When the trust receipts became due on 6 March
did not include the 11 March 1982 time deposit, 1987, Marcos owed the BANK P880,812.48. This
then Marcos should have demanded a new letter amount included P595,875, the principal value of
of certification from Pagsaligan. Marcos is a the three trust receipts after payment of the
businessman. While he already made an error in marginal deposit, and P284,937.48, the interest
judgment in entrusting to Pagsaligan the then due on the three trust receipts.
certificates of time deposits, Marcos should have
known the importance of making the letter- Upon maturity of the three trust receipts, the
certification reflect the true nature of the BANK should have automatically deducted, by
transaction. Marcos is bound by the letter- way of offsetting, Marcos outstanding debt to the
certification since he was the one who prodded BANK from his time deposits and its accumulated
Pagsaligan to issue it. interest. Marcos time deposits of P764,897.67
had already earned interest[54] of P616,318.92 as
We modify the amount that the Court of of 6 March 1987.[55] Thus, Marcos total funds with
Appeals ordered the BANK to return to the BANK amounted to P1,381,216.59 as of the
Marcos. The appellate court did not offset Marcos maturity of the trust receipts. After
outstanding debt with the BANK covered by the deducting P880,812.48, the amount Marcos
three trust receipt agreements even though owed the BANK, from Marcos funds with the
Marcos admits his obligation under the three trust BANK of P1,381,216.59, Marcos remaining time
receipt agreements. The total amount of the trust deposits as of 6 March 1987 is only P500,404.11.
receipts is P851,250 less the 30% marginal The accumulated interest on this P500,404.11 as
deposit of P255,375 that Marcos had already of 30 August 1989, the date of filing of Marcos
paid the BANK. This reduced Marcos total debt complaint with the trial court,
with the BANK to P595,875 under the trust is P211,622.96.[56] From 30 August 1989, the
receipts. interest due on the accumulated interest
of P211,622.96 should earn legal interest at
The trial and appellate courts found that the 12% per annum pursuant to Article 2212[57] of the
parties did not agree on the imposition of interest Civil Code.
on the loan covered by the trust receipts and thus
no interest is due on this loan. However, the The BANKs dismal failure to account for
records show that the three trust receipt Marcos money justifies the award of moral[58] and
agreements contained stipulations for the exemplary damages.[59] Certainly, the BANK, as
payment of interest but the parties failed to fill up employer, is liable for the negligence or the
the blank spaces on the rate of interest. Put misdeed of its branch manager which caused
differently, the BANK and Marcos expressly Marcos mental anguish and serious
agreed in writing on the payment of anxiety.[60] Moral damages of P100,000 is
interest[46] without, however, specifying the rate of reasonable and is in accord with our rulings in
interest. We, therefore, impose the legal interest similar cases involving banks negligence with
of 12% per annum, the legal interest for the regard to the accounts of their depositors.[61]
forbearance of money,[47] on each of the three
trust receipts. We also award P20,000 to Marcos as
exemplary damages. The law allows the grant of
Based on Marcos testimony[48] and the exemplary damages by way of example for the
BANKs letter of demand,[49] the trust receipt public good.[62] The public relies on the banks
agreements became due in March 1987. The fiduciary duty to observe the highest degree of
diligence. The banking sector is expected to
maintain at all times this high level of
meticulousness.[63]
WHEREFORE, the decision of the Court of
Appeals is AFFIRMED with MODIFICATION.
Petitioner Philippine Banking Corporation is
ordered to return to private respondent Leonilo
Marcos P500,404.11, the remaining principal
amount of his time deposits, with interest at
17% per annum from 30 August 1989 until full
payment. Petitioner Philippine Banking
Corporation is also ordered to pay to private
respondent Leonilo Marcos P211,622.96, the
accumulated interest as of 30 August 1989, plus
12% legal interest per annum from 30 August
1989 until full payment. Petitioner Philippine
Banking Corporation is further ordered to
pay P100,000 by way of moral damages
and P20,000 as exemplary damages to private
respondent Leonilo Marcos.
Costs against petitioner.
SO ODERED.
branch-2 checks; at Paseo de Roxas branch-1
check; at J. Ruiz, San Juan branch, at West
Avenue and Commonwealth Quezon City branch -
SECOND DIVISION
2 checks; and at Vito Cruz branch-2 checks.
Sometime in 1986, LMC availed of the BPI's inter- The total aggregate amount covered by Alice
branch banking network services in Metro Manila, Laurel's deposit slips was Two Million Seven
whereby the former's agents could make [a] Hundred Sixty Seven Thousand, Five Hundred
deposit to any BPI branch in Metro Manila under Ninety Four Pesos (P2,767,594.00) and, for
the same account. Under this system, BPI's bank which, LMC paid Laurel the total sum of Five
tellers were no longer obliged to retain the extra Hundred Sixty Thousand Seven Hundred Twenty
copy of the deposit slips instead, they will rely on Six Pesos (P560,726.00) by way of "sales
the machine-validated deposit slip, to be discount and promo prizes."
submitted by LMC's agents. For its part, BPI
would send to LMC a monthly bank statement
The above fraudulent transactions of Alice Laurel
relating to the subject account. This practice was
and her husband was made possible through BPI
observed and complied with by the parties.
teller's failure to retrieve the duplicate original
copies of the deposit slips from the former, every
As a business practice, the registered sales time they ask for cancellation or reversal of the
agents or the Lifetime Educational Consultants of deposit or payment transaction.
LMC, can get the books from the latter on
consignment basis, then they would go directly to
Upon discovery of this fraud in early August 1992,
their clients to sell. These agents or Lifetime
LMC made queries from the BPI branches
Educational Consultants would then pay to LMC,
involved. In reply to said queries, BPI branch
seven (7) days after they pick up all the books to
managers formally admitted that they cancelled,
be sold. Since LMC have several agents around
without the permission of or due notice to LMC,
the Philippines, it required to remit their
the deposit transactions made by Alice and her
payments through BPI, where LMC maintained its
husband, and based only upon the latter's verbal
current account. It has been LMC's practice to
request or representation.
require its agents to present a validated deposit
slip and, on that basis, LMC would issue to the
latter an acknowledgement receipt. Thereafter, LMC immediately instituted a criminal
action for Estafa against Alice Laurel and her
husband Thomas Limoanco, before the Regional
Alice Laurel, is one of LMC's "Educational
Trial Court of Makati, Branch 65, docketed as
Consultants" or agents. On various dates covering
Criminal Case No. 93-7970 to 71, entitled People
the period from May, [sic] 1991 up to August,
of the Philippines v. Thomas Limoanco and Alice
1992, Alice Laurel deposited checks to LMC's
Laurel. This case for estafa, however, was
subject account at different branches of BPI,
archived because summons could not be served
specifically: at the Harrison/Buendia branch-8
upon the spouses as they have absconded. Thus,
checks; at Arrangue branch-4 checks; at Araneta
the BPI's apparent reluctance to admit liability
branch-1 check; at Binondo branch-3 checks; at
and settle LMC's claim for damages, and a
Ermita branch-5 checks; at Cubao Shopping
hopeless case of recovery from Alice Laurel and
branch-1 check; at Escolta branch-4 checks; at
her husband, has left LMC, with no option but to
the Malate branch-2 checks; at Taft Avenue
recover damages from BPI.
On July 24, 1995, LMC, through its in mind the fiduciary nature of its relationship
representative, Miss Consolacion C. Rogacion, the with them.8 The fiduciary nature of banking,
President of the company, filed a Complaint for previously imposed by case law, is now enshrined
Damages against BPI, docketed as Civil Case No. in Republic Act No. 8791 or the General Banking
95-1106, and was raffled to Regional Trial Court Law of 2000. Section 2 thereof specifically says
of Makati City, Branch 141. that the state recognizes the fiduciary nature of
banking that requires high standards of integrity
After trial on the merits, the court a quo rendered and performance.9
a Decision in favor of LMC. The dispositive portion
of which reads, as follows: Whether BPI observed the highest degree of care
in handling LMC's account is the subject of the
WHEREFORE, decision is hereby rendered inquiry in this case.
ordering defendant bank to pay plaintiff actual
damages equitably reduced to one (1) million LMC sought recovery from BPI on a cause of
pesos plus attorney's fees of P100,000.00. action based on tort. Article 2176 of the Civil
Code provides, "Whoever by act or omission
No pronouncement as to costs. causes damage to another, there being fault or
negligence, is obliged to pay for the damage
done. Such fault or negligence if there is no pre-
SO ORDERED.2 existing contractual relation between the parties,
is called a quasi-delict and is governed by the
Only BPI filed an appeal. The Court of Appeals provisions of this Chapter." There are three
affirmed the decision of the trial court but elements of quasi-delict: (a) fault or negligence of
increased the award of actual damages the defendant, or some other person for whose
to P2,075,695.50 and deleted the award acts he must respond; (b) damages suffered by
of P100,000.00 as attorney's fees.3Citing public the plaintiff; and (c) the connection of cause and
interest, the appellate court denied effect between the fault or negligence of the
reconsideration in a Resolution4 dated 30 January defendant and the damages incurred by the
2007. plaintiff.10
In this Petition for Review5 dated 19 March 2007, In this case, both the trial court and the Court of
BPI insists that LMC should have presented Appeals found that the reversal of the
evidence to prove not only the amount of the transactions in question was unilaterally
checks that were deposited and subsequently undertaken by BPI's tellers without following
reversed, but also the actual delivery of the books normal banking procedure which requires them to
and the payment of "sales and promo prizes" to ensure that all copies of the deposit slips are
Alice Laurel. Failing this, there was allegedly no surrendered by the depositor. The machine-
basis for the award of actual damages. Moreover, validated deposit slips do not show that the
the actual damages should not have been transactions have been cancelled, leading LMC to
increased because the decision of the trial court rely on these slips and to consider Alice Laurel's
became conclusive as regards LMC when it did not account as already paid.
appeal the said decision.
Negligence is the omission to do something which
BPI further avers that LMC's negligence in a reasonable man, guided by those considerations
considering the machine-validated check deposit which ordinarily regulate the conduct of human
slips as evidence of Alice Laurel's payment was affairs, would do, or the doing of something which
the proximate cause of its own loss. Allegedly, by a prudent and reasonable man would not
allowing its agents to make deposits with other do.11 Negligence in this case lies in the tellers'
BPI branches, LMC violated its own special disregard of the validation procedures in place
arrangement with BPI's Greenhills-EDSA branch and BPI's utter failure to supervise its employees.
for the latter to hold on to an extra copy of the Notably, BPI's managers admitted in several
deposit slip for pick up by LMC's authorized correspondences with LMC that the deposit
representatives. BPI points out that the deposits transactions were cancelled without LMC's
were in check and not in cash. As such, LMC knowledge and consent and based only upon the
should have borne in mind that the machine request of Alice Laurel and her husband.12
validation in the deposit slips is still subject to the
sufficiency of the funds in the drawers' account. It is well to reiterate that the degree of diligence
Furthermore, LMC allegedly ignored the express required of banks is more than that of a
notice indicated in its monthly bank statements reasonable man or a good father of a family. In
and consequently failed to check the accuracy of view of the fiduciary nature of their relationship
the transactions reflected therein. with their depositors, banks are duty-bound to
treat the accounts of their clients with the highest
In its Manifestation of Compliance by Respondent degree of care.13
on the Order Dated 20 June 2007 Received on 29
July 2007 to Submit Comment,6 dated 9 August BPI cannot escape liability because of LMC's
2007, LMC insists that it is indeed entitled to the failure to scrutinize the monthly statements sent
actual damages awarded to it by the appellate to it by the bank. This omission does not change
court. the fact that were it not for the wanton and
reckless negligence of BPI's tellers in failing to
BPI filed a Reply7 dated 15 January 2008, in require the surrender of the machine-validated
reiteration of its submissions. deposit slips before reversing the deposit
transactions, the loss would not have occurred.
BPI's negligence is undoubtedly the proximate
We have repeatedly emphasized that the banking
cause of the loss. Proximate cause is that cause
industry is impressed with public interest. Of
which, in a natural and continuous sequence,
paramount importance thereto is the trust and
unbroken by any efficient intervening cause,
confidence of the public in general. Accordingly,
produces the injury, and without which the result
the highest degree of diligence is expected, and
would not have occurred.14
high standards of integrity and performance are
required of it. By the nature of its functions, a
bank is under obligation to treat the accounts of It is also true, however, that LMC should have
its depositors with meticulous care, always having been more vigilant in managing and overseeing
its own financial affairs. The damages awarded to
it were correctly reduced on account of its own
contributory negligence in accordance with Article
1172 of the Civil Code.15
SO ORDERED.
SECOND DIVISION despite the lack of authority of "Rosauro C.
Cayabyab."
[G.R. NO. 141835 : February 4, 2009]
By Decision1 of November 13, 1991, Branch 32 of
CENTRAL BANK OF THE the RTC of Manila found both Citytrust and
PHILIPPINES, Petitioner, v. CITYTRUST petitioner negligent and accordingly held them
BANKING CORPORATION,Respondent. equally liable for the loss. Both parties appealed
to the Court of Appeals which, by Decision2 dated
July 16, 1999, affirmed the trial court's decision,
DECISION it holding that both parties contributed equally to
the fraudulent encashment of the checks, hence,
CARPIO MORALES, J.: they should equally share the loss in consonance
with Article 21793 vis a vis Article 11724 of the
Civil Code.
Pursuant to Republic Act No. 625, the old Central
Bank Law, respondent Citytrust Banking
Corporation (Citytrust), formerly Feati Bank, In arriving at its Decision, the appellate court
maintained a demand deposit account with noted that while "Citytrust failed to take adequate
petitioner Central Bank of the Philippines, now precautionary measures to prevent the fraudulent
Bangko Sentral ng Pilipinas. encashment of its checks," petitioner was not
entirely blame-free in light of its failure to verify
the signature of Citytrust's agent authorized to
As required, Citytrust furnished petitioner with
receive payment.
the names and corresponding signatures of five of
its officers authorized to sign checks and serve as
drawers and indorsers for its account. And it Brushing aside petitioner's contention that it
provided petitioner with the list and cannot be sued, the appellate court held that
corresponding signatures of its roving tellers petitioner's Charter specifically clothes it with the
authorized to withdraw, sign receipts and perform power to sue and be sued.
other transactions on its behalf. Petitioner later
issued security identification cards to the roving Also brushing aside petitioner's assertion that
tellers one of whom was "Rounceval Flores" Citytrust's reservation of the filing of a separate
(Flores). civil action against Flores precluded Citytrust from
filing the civil action against it, the appellate court
On July 15, 1977, Flores presented for payment held that the "action for the recovery of sum of
to petitioner's Senior Teller Iluminada dela Cruz money is separate and distinct and is grounded
(Iluminada) two Citytrust checks of even date, on a separate cause of action from that of the
payable to Citytrust, one in the amount criminal case for estafa."
of P850,000 and the other in the amount
of P900,000, both of which were signed and Hence, the present appeal, petitioner maintaining
indorsed by Citytrust's authorized signatory- that Flores having been an authorized roving
drawers. teller, Citytrust is bound by his acts. Also
maintaining that it was not negligent in releasing
After the checks were certified by petitioner's the proceeds of the checks to Flores, the failure of
Accounting Department, Iluminada verified them, its teller to properly verify his signature
prepared the cash transfer slip on which she notwithstanding, petitioner contends that
affixed her signature, stamped the checks with verification could be dispensed with, Flores having
the notation "Received Payment" and asked been known to be an authorized roving teller of
Flores to, as he did, sign on the space above such Citytrust who had had numerous transactions
notation. Instead of signing his name, however, with it (petitioner) on its (Citytrust's) behalf for
Flores signed as "Rosauro C. Cayabyab" - a fact five years prior to the questioned transaction.
Iluminada failed to notice.ςηαñrο blεš ν ιr� υα l l αω lιbrα rÿ
Citytrust later filed a complaint for estafa, with Petitioner's teller Iluminada did not verify Flores'
reservation on the filing of a separate civil action, signature on the flimsy excuse that Flores had
against Flores. Flores was convicted. had previous transactions with it for a number of
years. That circumstance did not excuse the teller
Citytrust thereafter filed before the Regional Trial from focusing attention to or at least glancing at
Court (RTC) of Manila a complaint for recovery of Flores as he was signing, and to satisfy herself
sum of money with damages against petitioner that the signature he had just affixed matched
which it alleged erred in encashing the checks and that of his specimen signature. Had she done
in charging the proceeds thereof to its account, that, she would have readily been put on notice
that Flores was affixing, not his but a fictitious WHEREFORE, the assailed Court of Appeals
signature. Decision of July 16, 1999 is hereby AFFIRMED
with MODIFICATION, in that petitioner and
Given that petitioner is the government body Citytrust should bear the loss on a 60-40 ratio.
mandated to supervise and regulate banking and
other financial institutions, this Court's ruling in SO ORDERED.
Consolidated Bank and Trust Corporation v. Court
of Appeals5illumines: