Philippine Bank of Commerce vs. Court of Appeals G.R. no.

97626 Facts: The case stemmed from a suit filed by Rommels Marketing Corp. (RMC) against petitioner for the recovery of a sum of money. The cause of action aroused from the failure of the petitioner to deposit the money of RMC into its account. Instead, the money was deposited into the account of one Bienvenido Cotas, husband of RMC secretary Irene Yabut. It is undisputed that RMC President Romeo Lipana entrusted the amount to his secretary, Yabut, for depositing in the account of RMC. However, Yabut misappropriated the amount by depositing it in her husbands account which was constituted in the same bank. She managed to do this by filling up two deposit slips, the original having complete information while the duplicate copy was not filled up. Nevertheless, Azucena Mabayad, bank teller, would validate the copies as she was informed by Yabut that the duplicate copy was just for record purposes, hence, she would just fill it up later on. After validation, Yabut would then fill up the duplicate slip with RMC details. Although the bank informs the account holder his account balance monthly, it was not after a year until Yabuts fraudulent scheme was discovered. RMC filed a case against petitioner for the recovery of the money. Petitioner argued that he could not be held responsible since he always furnished RMC with monthly statements and if only the owner was diligent enough to review it, he would have discovered his own employees fraud. The trial court ruled against petitioner. So did the Court of Appeals. Hence, petitioner seeks redress in the Supreme Court. Issue: Whether or not the proximate cause of the loss is the banks negligence. Ruling: A bank is a business entity imbued with the highest degree of fiduciary. Hence, it must exercise the highest degree of care in all its transactions with its clients, regardless if their monetary deposits are a couple hundred or millions. In the case at bar, Mabayad, who was the attending teller during the fraudulent scheme, failed to follow bank procedure when she validated the blank duplicate slip. She should have inquired why was it unfilled and she should have made the completion of the duplicate slip a condition before validating the same. Also, under the doctrine of last clear chance, the bank is the culpable party. In essence, this doctrine means that where both parties are negligent, but the other being later in time, or when it is impossible to determine who is liable, the one who had the last clear opportunity to avoid the impending harm and failed to do so is liable. However, since Lipana could have avoided being defrauded further by promptly reviewing his statements, his negligence is contributory and will mitigate the liability of petitioner.

Prudential Bank vs. Court of Appeals G.R. no. 125536 Facts: Leticia Tupasi- Valenzuela opened a saving account and a current account in petitioner bank, with automatic transfer of funds from savings to current. At one point, she deposited an amount of P35, 271.60 drawn against PCI Bank. Subsequently, she bought jewelry and issued a check carrying the amount of P11, 000. The vendor endorsed the check to Philip Lhuillier. When the latter tried to encash said check, it was dishonoured. Lhuillier, through his secretary, notified the vendor who in turn tried to contact Valenzuela who failed to reply. Upon the latters arrival from the province, she was surprised to know that her check had bounced although she had sufficient funds. She went to the bank and asked for the ledger of her account which reflected a P300.00 debit. She was turned down by the officer saying that the ledger is the best proof of an accounts details. Subsequently however, it was found out that the check she deposited earlier was only credited 23 days later. She informed Lhuillier about the progress and the latter successfully encashed the check. The petitioner bank apologized to Valenzuela but she is not moved because the incident was not the first time. Hence, she filed a suit for damages. The trial court dismissed the case on the ground of the apology while the Court of Appeals affirmed the award of damages. Petitioner seeks redress in the Supreme Court. Issue: Whether or not the award of damages is proper. Ruling: Yes, as enunciated in Simex International Corp. vs Court of Appeals, a depositor expects the bank to treat his account with utmost fidelity, whether such account consists only of a few hundred pesos or of millions. The bank must record every single transaction accurately, down to the last centavo, and as promptly as possible. This has to be done if the account is to reflect the amount of money a depositor may dispose of as he sees fit. Malice or bad faith is immaterial in this case, as long as the bank committed a serious mistake, that is, dishonouring a check issued by a depositor who turned out to have sufficient funds. It was a lack of the highest degree of care required and expected from a business imbued with the highest degree of fiduciary.

Westmont Bank vs. Eugene Ong G.R. No. 132560 Facts: Respondent maintained a current account with petitioner. The former sold shares of stock through Island Securities Corporation (ISC). To pay respondent, ISC purchased two Pacific Banking Corp. managers checks issued in the name of respondent. Before respondent could get hold of the checks, one Paciano Tanlimco got hold of them, forged respondents signature and then deposited the checks in his own account with petitioner. Although respondents signature specimen was on file, petitioner did not bother to compare it with the signature appearing on the checks. Tanlimco was able to withdraw the amount. He immediately absconded thereafter. Now having knowledge of the fraudulent transaction, Ong sought the help of Tanlimcos family but since they were not cooperative, he sought the help of the Central Bank. The last recourse still rendered futile, he filed a case against petitioner five months after the discovery of the fraud. Petitioner argues that Ong has no locus standi to file the suit because he, under the law, is not a holder because to be considered a holder, he must have possessed the negotiable instrument. The trial court and Court of Appeals ruled in favour of Ong. Hence, petitioner is before the Supreme Court. Issue: Whether or not petitioner is liable to pay respondent. Ruling: Yes. Petitioner must pay respondent because it is its legal duty to ascertain that the payees endorsement was genuine before cashing the check. Given the circumstance, it is admitted that petitioner had the signature specimen of respondent. Hence, it would have been easy to compare the signatures appearing on the checks and the signature specimen. Also considering the amount involved, it should have given the bank a better reason to ascertain the genuineness of the endorsement.

Bank of the Philippine Islands vs. Court of Appeals G.R. No. 104612 Facts: Eastern Plywood Corp. and its officer Benigno Lim had at least one joint account with Commercial Bank and Trust Co., the predecessor- in- interest of petitioner BPI. Later, a joint checking account with Lim was opened by one Velasco. Subsequently, Velasco died. An undertaking was executed by Lim for himself and as president of Eastern. Half of the amount in the joint account of Lim and Velasco was deposited to the joint account of Eastern and Lim with CBTC. Eastern then obtained a loan from CBTC and executed a promissory note which was secured by the Lim- Velasco account. Also, Lim, Eastern and CBTC executed a hold- out agreement regarding the joint account of Velasco and Lim whereby it is agreed upon that the promissory note shall be applied when the interest of Lim in the said joint account shall have been established with finality. On the other hand, the heirs of Velasco settled the estate of the deceased, was granted by the intestate court the withdrawal of the amount in the joint account and to divide it among the heirs. Later, CBTC merged with BPI. Petitioner filed a case for the collection of the loan of Eastern and Lim. The trial court dismissed the case ruling that the promissory note was subject of the hold- out agreement. Court of Appeals affirmed the decision. Hence, this case. Issue: Whether or not BPI can demand the payment of the loan despite the existence of the hold- out agreement. Ruling: Yes. It is clear that BPI as successor- in- interest of CBTC had every right to demand the settling of the liability of Lim and Eastern. It cannot be compelled to apply the payment of the loan in the joint account of Lim and Velasco, which is now already withdrawn and partitioned by Velascos heirs. To apply it to the account is but a privilege of the bank, giving it the option to withdraw it from such account.

Simex International (Manila), Inc. vs. Court of Appeals G.R. No. 88013 Facts: Petitioner is engaged in the exportation of food products to different parts of the globe. Its suppliers are usually paid on credit. Hence, petitioner maintained a checking account with respondent Traders Royal Bank. At one time, petitioner deposited P100,000.00 to such account. As its debts fell due, he issued checks to different suppliers. On the maturity dates, however, all checks were dishonoured for lack of sufficient funds. Hence, the suppliers demanded payment and threatened petitioner of prosecution. Its credit lines were also cut off and that it needed to transact on cash basis for future transactions. The orders it placed were also deferred until payment has been made. It complained to respondent bank and the blunder was rectified a week after. Hence, the suppliers were able to withdraw the amounts appearing in their respective checks. Unsatisfied, petitioner demanded reparation but it was unheeded forcing the latter to file a case. Petitioner demanded P1,500,000.00 in total damages. The trial court awarded damages in the amount of P25,000.00. The same was affirmed by the Court of Appeals. Hence, this case. Issue: Whether or not petitioner is entitled to moral and exemplary damages. Ruling: Yes. A bank is under obligation to treat the accounts of its depositors with meticulous care, always having in mind fiduciary nature of their relationship. In the case at bar, it is true that petitioner was humiliated by the fact that its credit lines were suspended, pending orders were deferred, threatened with prosecution and future transactions with its suppliers will be dealt with in a different manner. Certainly, the mere rectification of the error committed by the bank on petitioners account does not cure the effects of its blunder. The standing of petitioner in the community was more or less, debased by this incident. Hence, the award of damages is justified, but on a much lesser amount.