PHILIPPINE NATIONAL BANK v. NORMAN Y.

PIKE
G.R. No. 157845. September 20, 2005

CHICO-NAZARIO, J

FACTS:
Complainant Pike often traveled to and from Japan as a gay entertainer in said country. Sometime in 1991, he opened
U.S. Dollar Savings Account No. 0265 704591-0 with herein petitioner PNB Buendia branch for which he was issued a
corresponding passbook. The complaint alleged in substance that before complainant Pike left for Japan on 18 March 1993, he kept
the aforementioned passbook inside a cabinet under lock and key, in his home. A few hours after he arrived from Japan, he
discovered that some of his valuables were missing including the passbook; He also discovered that Damasol, his talent manager,
made two unauthorized withdrawal from his US Dollar Savings Account.

On several occasions, Pike went to defendant PNB's Buendia branch and verbally protested the unauthorized withdrawals and
likewise demanded the return of the total withdrawn amount of U.S. $7,500.00, on the ground that he never authorized anybody to
withdraw from his account as the signatures appearing on the subject withdrawal slips were clearly forgeries; that defendant PNB
refused to credit said amount back to complainant's U.S. Dollar Savings Account without justifiable reason, and instead, defendant
bank wrote him that it exercised due diligence in the handling of said account.

ISSUE/S:
Whether or not PNB is guilty of negligence.

HELD:

YES.

Petitioner PNB contends that due to the verbal instructions of respondent Pike, a valued depositor, it allowed the
withdrawal by another person. Plus, the fact that said respondent withdrew the remaining balance in his US Savings Account and
executed a waiver releasing petitioner PNB from any liability due to the loss of the funds should rightly negate a finding of
negligence on its part. Accordingly, petitioner PNB claims that the appellate court, as well as the trial court erred in holding that
the withdrawals in question were unauthorized as the signatures appearing on the subject withdrawal slips were forgeries. Petitioner
PNB, therefore, argues that it should not be held liable for the amount withdrawn from the account of respondent Pike in the sum
of $7,500.00, as well as for moral and exemplary damages.

Finding no other alternative but to afirm their finding that petitioner PNB negligently allowed the unauthorized
withdrawals subject of the case at bar, the instant petition for review must necessarily fail. At this juncture, it bears emphasizing
that negligence of banking institutions should never be countenanced. The negligence here lies in the lackadaisical attitude exhibited
by employees of petitioner PNB in their treatment of respondent Pike's US Dollar Savings Account that resulted in the unauthorized
withdrawal of $7,500.00. Nevertheless, though its employees may be the ones negligent, a bank's liability as an obligor is not
merely vicarious but primary, as banks are expected to exercise the highest degree of diligence in the selection and supervision of
their employees,

With banks, the degree of diligence required, contrary to the position of petitioner PNB, is more than that of a good father
of a family considering that the business of banking is imbued with public interest due to the nature of their functions.
BANK OF THE PHILIPPINE ISLANDS v. LIFETIME MARKETING CORPORATION
G.R. No. 176434. June 25, 2008

TINGA, J

FACTS:
On October 22, 1981, Lifetime Marketing Corporation (LMC, for brevity), opened a current account with the Bank of
the Philippine Islands (BPI, for brevity), Greenhills-Edsa branch, denominated as Account No. 3101-0680-63. In this account, the
"sales agents" of LMC would have to deposit their collections or payments to the latter. As a result, LMC and BPI, made a special
arrangement that the former's agents will accomplish three (3) copies of the deposit slips, the third copy to be retained and held by
the teller until LMC's authorized representatives, Mrs. Virginia Mongon and Mrs. Violeta Ancajas, shall retrieve them on the
following banking day.

Alice Laurel, is one of LMC's "Educational Consultants" or agents. On various dates covering the period from May1991
up to August, 1992, Alice Laurel deposited checks to LMC's subject account at different branches of BPI; Verification with BPI
by LMC showed that Alice Laurel made check deposits with the named BPI branches and, after the check deposit slips were
machine-validated, requested the teller to reverse the transactions. Based on general banking practices, however, the cancellation
of deposit or payment transactions upon request by any depositor or payor, requires that all copies of the deposit slips must be
retrieved or surrendered to the bank. This practice, in effect, cancels the deposit or payment transaction, thus, it leaves no evidence
for any subsequent claim or misrepresentation made by any innocent third person. Notwithstanding this, the verbal requests of
Alice Laurel and her husband to reverse the deposits even after the deposit slips were already received and consummated were
accommodated by BPI tellers. Alice Laurel presented the machine-validated deposit slips to LMC which, on the strength thereof,
considered her account paid.

Upon discovery of this fraud in early August 1992, LMC made queries from the BPI branches involved. In reply to said
queries, BPI branch managers formally admitted that they cancelled, without the permission of or due notice to LMC, the deposit
transactions made by Alice and her husband, and based only upon the latter's verbal request or representation.

ISSUE/S:

Whether BPI observed the highest degree of care in handling LMC's account

HELD:

NO.

In this case, both the trial court and the Court of Appeals found that the reversal of the transactions in question was
unilaterally undertaken by BPI's tellers without following normal banking procedure which requires them to ensure that all copies
of the deposit slips are surrendered by the depositor. The machine-validated deposit slips do not show that the transactions have
been cancelled, leading LMC to rely on these slips and to consider Alice Laurel's account as already paid. We have repeatedly
emphasized that the banking industry is impressed with public interest. Of paramount importance thereto is the trust and confidence
of the public in general. Accordingly, the highest degree of diligence is expected, and 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 its depositors with meticulous
care, always having in mind the fiduciary nature of its relationship with them.

BPI cannot escape liability because of LMC's failure to scrutinize the monthly statements sent to it by the bank. This
omission does not change the fact that were it not for the wanton and reckless negligence of BPI's tellers in failing to require the
surrender of the machine-validated deposit slips before reversing the deposit transactions, the loss would not have occurred. BPI's
negligence is undoubtedly the proximate cause of the loss.
BANK OF THE PHILIPPINE ISLANDS, vs. CASA MONTESSORI INTERNATIONALE LEONARDO T. YABUT
G.R. No. 149454 May 28, 2004

PANGANIBAN, J.

FACTS: CASA Montessori International opened a Current Account with BPI with CASA’s President Ms. Lebron as one of its
authorized signatories. In 1991, CASA discovered that 9 of its checks had been encashed by a certain Sonny D. Santos since 1990
in the total amount of ₱782,000.00. It turned out that ‘Sonny D. Santos’ with account at BPI’s Greenbelt Branch [was] a fictitious
name used by Leonardo T. Yabut who worked as external auditor of CASA. Yabut voluntarily admitted that he forged the signature
of Ms. Lebron and encashed the checks.

A Complaint for Collection with Damages was filed against BPI to reinstate the amount of ₱782,500.00 in the current and savings
accounts of CASA with interest at 6% per annum. The RTC rendered a decision in favor of the CASA. Modifying the decision of
the RTC, the CA apportioned the loss between BPI and CASA. The appellate court took into account CASA’s contributory
negligence that resulted in the undetected forgery.

Hence, these Petitions.

ISSUE: Whether or not BPI was negligent and therefore liable

RULING: The Court have repeatedly emphasized that, since the banking business is impressed with public interest, of paramount
importance thereto is the trust and confidence of the public in general. Consequently, the highest degree of diligence is expected,
and high standards of integrity and performance are even required, of it. By the nature of its functions, a bank is “under obligation
to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship.”

BPI’s negligence consisted in the omission of that degree of diligence required of a bank. It cannot now feign ignorance, for very
early on we have already ruled that a bank is “bound to know the signatures of its customers; and if it pays a forged check, it must
be considered as making the payment out of its own funds, and cannot ordinarily charge the amount so paid to the account of the
depositor whose name was forged.”

For allowing payment on the checks to a wrongful and fictitious payee, BPI — the drawee bank — becomes liable to its depositor-
drawer. It “may not debit the drawer’s account and is not entitled to indemnification from the drawer.” In both law and equity,
when one of two innocent persons “must suffer by the wrongful act of a third person, the loss must be borne by the one whose
negligence was the proximate cause of the loss or who put it into the power of the third person to perpetrate the wrong.”

Pursuant to its prime duty to ascertain well the genuineness of the signatures of its client-depositors on checks being encashed, BPI
is “expected to use reasonable business prudence.” Unfortunately, it failed in that regard.
Central Bank v. Citytrust Bank
G.R. No. 141835, February 4, 2009

CARPIO MORALES, J.

FACTS: The Citytrust Banking Corporation (Citytrust) gave Central Bank of the Philippines a list of signatures of five of its
officers authorized to sign checks and serve as drawers and indorsers for its account, and also the list of the roving tellers authorized
to perform other transactions on its behalf, one of whom was Rounceval Flores (Flores). Flores presented two checks to the Central
Bank’s Senior Teller Iluminada dela Cruz (Dela Cruz) and was subsequently approved. Dela Cruz prepared the cash transfer slip
where Flores should sign but instead he sign as one Rosauro C. Cayabyab. This fact was missed by Dela Cruz. It was given to
Cash Department and the signatures were examined and later on paid Flores for the checks. After one year and nine months, the
Citytrust demanded that the checks be cancelled and the funds taken out be returned because the check was stolen before. Central
Bank did not heed such call. Citytrust filed a complaint to collect the sum of money with damages against Central Bank to the
Regional Trial Court (RTC). RTC found both parties negligent and held them equally liable for the loss. Court of Appeals affirmed
the decision.

ISSUE: Whether or not Citytrust can collect sum of money as damages from the Central Bank.

HELD: The law imposes on banks high standards in view of the fiduciary nature of banking. Section 2 of Republic Act No. 8791
(R.A. 8791), which took effect on 13 June 2000, declares that the State recognizes the “fiduciary nature of banking that requires
high standards of integrity and performance.” This fiduciary relationship means that the bank’s obligation to observe “high
standards of integrity and performance” is deemed written into every deposit agreement between a bank and its depositor. The
fiduciary nature of banking requires banks to assume a degree of diligence higher than that of a good father of a family. Article
1172 of the Civil Code states that the degree of diligence required of an obligor is that prescribed by law or contract, and absent
such stipulation then the diligence of a good father of a family. Section 2 of R.A. 8791 prescribes the statutory diligence required
from banks – that banks must observe “high standards of integrity and performance” in servicing their depositors. Citytrust’s failure
to timely examine its account, cancel the checks and notify petitioner of their alleged loss/theft should mitigate petitioner’s liability,
in accordance with Article 2179 of the Civil Code which provides that if the plaintiff’s negligence was only contributory, the
immediate and proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the
courts shall mitigate the damages to be awarded.
PHILIPPINE BANK OF COMMERCE, now absorbed by PHILIPPINE COMMERCIAL INTERNATIONAL BANK,
ROGELIO LACSON, DIGNA DE LEON, MARIA ANGELITA PASCUAL, Et Al., v. THE COURT OF APPEALS,
ROMMEL’S MARKETING CORP., represented by ROMEO LIPANA, its President & General Manager
G.R. No. 97626, March 14, 1997

HERMOSISIMA, JR., J.:

FACTS: Rommel’s Marketing Corporation (RMC) maintains 2 current accounts with petitioner Philippine Bank of Commerce.
Respondent Romeo Lipana is the President and General Manager of RMC. From May 1, 1975 to July 16, 1976, Lipana entrusted
RMC funds totalling P304,979.74 to its secretary Irene Yabut for the purpose of depositing the funds to the company’s account
with PBC. It turned out, however, that all those deposits were not credited to the RMC, but to the account of Yabut’s husband,
Bienvenido Cotas, with the same bank. Yabut was able to defraud RMC by using duplicate deposit slips. On the original copy
which is being submitted to the bank, she would write the account name and account number of her husband. On the duplicate copy
which is returned to the company, she would write the same account number but would leave the account name blank. After
obtaining the validation stamp on the second copy, she would place thereon RMC’s account name, and change the account number
to that of the company. This went on for more than a year without respondent’s knowledge. Upon discovery of the losses,
respondent demanded the return of its funds from the bank. Not being heeded, he filed a collection suit. The trial court, and later
on the Court of Appeals, found the bank negligent. The bank filed this instant petition for review.

Petitioners submit that the proximate cause of the loss is the negligence of RMC in entrusting its funds to a dishonest employee, as
there is no way for them to know who the owner of the funds is. Respondents, on the other hand, maintain that the loss was due to
the negligence of the bank’s teller, Azucena Mabayad, in validating the duplicate deposit slips bearing no account name.

ISSUE: What is the proximate cause of the loss – Lipana’s negligence in not checking his monthly statements or the bank’s
negligence through its teller in validating the deposit slips?

HELD: The bank teller was negligent in validating, officially stamping and signing all the deposit slips prepared and presented by
Yabut, despite the glaring fact that the duplicate copy was not completely accomplished contrary to the self-imposed procedure of
the bank with respect to the proper validation of deposit slips, original or duplicate.

The bank teller’s negligence, as well as the negligence of the bank in the selection and supervision of its bank teller, is the proximate
cause of the loss suffered by the private respondent, not the latter’s entrusting cash to a dishonest employee. Xxx Even if Yabut
had the fraudulent intention to misappropriate the funds, she would not have been able to deposit those funds in her husband’s
current account, and then make plaintiff believe that it was in the latter’s accounts wherein she had deposited them, had it not been
for the bank teller’s aforesaid gross and reckless negligence.

The Doctrine of Last Clear Chance was discussed in this case: Doctrine of Last Clear Chance – where both parties are negligent,
but the negligent act of one is appreciably later in time than that of the other, or when it is impossible to determine whose fault or
negligence should be attributed to the incident, the one who had the last clear opportunity to avoid the impending harm and failed
to do so is chargeable with the consequences thereof. It means that the antecedent negligence of a person does not preclude the
recovery of damages for the supervening negligence of, or bar a defense against liability sought by another, if the latter, who had
the last fair chance, could have avoided the impending harm by exercise of due diligence.

In the case at bar, the bank was not remiss in its duty of sending monthly bank statements to private respondent RMC so that any
error or discrepancy in the entries therein could be brought to the bank’s attention at the earliest opportunity. Private respondent
failed to examine these bank statements not because it was prevented by some cause in not doing so, but because it was purposely
negligent as it admitted that it does not normally check bank statements given by banks.

It was private respondent who had the last and clear chance to prevent any further misappropriation by Yabut had it only reviewed
the status of its current accounts on the bank statements sent to it monthly or regularly. Since a sizable amount of cash was entrusted
to Yabut, private respondent should, at least, have taken ordinary care of its concerns, as what the law presumes. Its negligence,
therefore, is not contributory but the immediate and proximate cause of its injury.