THE CONSOLIDATED BANK and TRUST gave the passbook. When Macaraya asked Teller No.

6 if
CORPORATION, Petitioner, v. COURT OF APPEALS Calapre got the passbook, Teller No. 6 answered that
and L.C. DIAZ and COMPANY, someone shorter than Calapre got the passbook. Calapre
CPA’s, Respondents. was then standing beside Macaraya.

DECISION Teller No. 6 handed to Macaraya a deposit slip dated 14

August 1991 for the deposit of a check for P90,000
drawn on Philippine Banking Corporation ("PBC"). This
CARPIO, J.: PBC check of L.C. Diaz was a check that it had "long
closed." 4 PBC subsequently dishonored the check
because of insufficient funds and because the signature
The Case in the check differed from PBC’s specimen signature.
Failing to get back the passbook, Macaraya went back to
her office and reported the matter to the Personnel
Before us is a petition for review of the Decision 1 of the Manager of L.C. Diaz, Emmanuel Alvarez.
Court of Appeals dated 27 October 1998 and its
Resolution dated 11 May 1999. The assailed decision The following day, 15 August 1991, L.C. Diaz through its
reversed the Decision 2 of the Regional Trial Court of Chief Executive Officer, Luis C. Diaz ("Diaz"), called up
Manila, Branch 8, absolving petitioner Consolidated. Solidbank to stop any transaction using the same
Bank and Trust Corporation, now known as Solidbank passbook until L.C. Diaz could open a new account. 5 On
Corporation ("Solidbank"), of any liability. The the same day, Diaz formally wrote Solidbank to make
questioned resolution of the appellate court denied the the same request. It was also on the same day that L.C.
motion for reconsideration of Solidbank but modified the Diaz learned of the unauthorized withdrawal the day
decision by deleting the award of exemplary damages, before, 14 August 1991, of P300,000 from its savings
attorney’s fees, expenses of litigation and cost of account. The withdrawal slip for the P300,000 bore the
suit.chanrob1es virtua1 1aw 1ibrary signatures of the authorized signatories of L.C. Diaz,
namely Diaz and Rustico L. Murillo. The signatories,
The Facts however, denied signing the withdrawal slip. A certain
Noel Tamayo received the P300,000.cralaw : red

Solidbank is a domestic banking corporation organized In an Information 6 dated 5 September 1991, L.C. Diaz
and existing under Philippine laws. Private respondent charged its messenger, Emerano Ilagan ("Ilagan") and
L.C. Diaz and Company, CPA’s ("L.C. Diaz"), is a one Roscon Verdazola with Estafa through Falsification
professional partnership engaged in the practice of of Commercial Document. The Regional Trial Court of
accounting. Manila dismissed the criminal case after the City
Prosecutor filed a Motion to Dismiss on 4 August 1992.
Sometime in March 1976, L.C. Diaz opened a savings
account with Solidbank, designated as Savings Account On 24 August 1992, L.C. Diaz through its counsel
No. S/A 200-16872-6. demanded from Solidbank the return of its money.
Solidbank refused.
On 14 August 1991, L.C. Diaz through its cashier,
Mercedes Macaraya ("Macaraya"), filled up a savings On 25 August 1992, L.C. Diaz filed a Complaint 7 for
(cash) deposit slip for P990 and a savings (checks) Recovery of a Sum of Money against Solidbank with the
deposit slip for P50. Macaraya instructed the messenger Regional Trial Court of Manila, Branch 8. After trial, the
of L.C. Diaz, Ismael Calapre ("Calapre"), to deposit the trial court rendered on 28 December 1994 a decision
money with Solidbank. Macaraya also gave Calapre the absolving Solidbank and dismissing the complaint.
Solidbank passbook.
L.C. Diaz then appealed 8 to the Court of Appeals. On 27
Calapre went to Solidbank and presented to Teller No. 6 October 1998, the Court of Appeals issued its Decision
the two deposit slips and the passbook. The teller reversing the decision of the trial court.
acknowledged receipt of the deposit by returning to
Calapre the duplicate copies of the two deposit slips. On 11 May 1999, the Court of Appeals issued its
Teller No. 6 stamped the deposit slips with the words Resolution denying the motion for reconsideration of
"DUPLICATE" and "SAVING TELLER 6 SOLIDBANK HEAD Solidbank. The appellate court, however, modified its
OFFICE." Since the transaction took time and Calapre decision by deleting the award of exemplary damages
had to make another deposit for L.C. Diaz with Allied and attorney’s fees.
Bank, he left the passbook with Solidbank. Calapre then
went to Allied Bank. When Calapre returned to Solidbank The Ruling of the Trial Court
to retrieve the passbook, Teller No. 6 informed him that
"somebody got the passbook. 3 Calapre went back to In absolving Solidbank, the trial court applied the rules
L.C. Diaz and reported the incident to Macaraya. on savings account written on the passbook. The rules
state that "possession of this book shall raise the
Macaraya immediately prepared a deposit slip in presumption of ownership and any payment or
duplicate copies with a check of P200,000. Macaraya, payments made by the bank upon the production of the
together with Calapre, went to Solidbank and presented said book and entry therein of the withdrawal shall have
to Teller No. 6 the deposit slip and check. The teller the same effect as if made to the depositor personally."
stamped the words "DUPLICATE" and "SAVING TELLER 9
6 SOLIDBANK HEAD OFFICE" on the duplicate copy of
the deposit slip. When Macaraya asked for the passbook, At the time of the withdrawal, a certain Noel Tamayo
Teller No. 6 told Macaraya that someone got the was not only in possession of the passbook, he also
passbook but she could not remember to whom she presented a withdrawal slip with the signatures of the
authorized signatories of L.C. Diaz. The specimen reads:chanrob1es virtual 1aw library
signatures of these persons were in the signature cards.
The teller stamped the withdrawal slip with the words IN VIEW OF THE FOREGOING, judgment is hereby
"Saving Teller No. 5." The teller then passed on the rendered DISMISSING the complaint.
withdrawal slip to Genere Manuel ("Manuel") for
authentication. Manuel verified the signatures on the The Court further renders judgment in favor of
withdrawal slip. The withdrawal slip was then given to defendant bank pursuant to its counterclaim the amount
another officer who compared the signatures on the of Thirty Thousand Pesos (P30,000.00) as attorney’s
withdrawal slip with the specimen on the signature fees.
cards. The trial court concluded that Solidbank acted
with care and observed the rules on savings account With costs against plaintiff.
when it allowed the withdrawal of P300,000 from the
savings account of L.C. Diaz. SO ORDERED. 12

The trial court pointed out that the burden of proof now The Ruling of the Court of Appeals
shifted to L.C. Diaz to prove that the signatures on the
withdrawal slip were forged. The trial court admonished The Court of Appeals ruled that Solidbank’s negligence
L.C. Diaz for not offering in evidence the National was the proximate cause of the unauthorized withdrawal
Bureau of Investigation ("NBI") report on the of P300,000 from the savings account of L.C. Diaz. The
authenticity of the signatures on the withdrawal slip for appellate court reached this conclusion after applying
P300,000. The trial court believed that L.C. Diaz did not the provision of the Civil Code on quasi-delict, to
offer this evidence because it is derogatory to its action. wit:chanrob1es virtual 1aw library

Another provision of the rules on savings account states Article 2176. Whoever by act or omission causes
that the depositor must keep the passbook "under lock damage to another, there being fault or negligence, is
and key." 10 When another person presents the obliged to pay for the damage done. Such fault or
passbook for withdrawal prior to Solidbank’s receipt of negligence, if there is no pre-existing contractual relation
the notice of loss of the passbook, that person is between the parties, is called a quasi-delict and is
considered as the owner of the passbook. The trial court governed by the provisions of this chapter.
ruled that the passbook presented during the questioned
transaction was "now out of the lock and key and The appellate court held that the three elements of a
presumptively ready for a business transaction." 11 quasi-delict are present in this case, namely: (a)
damages suffered by the plaintiff; (b) fault or negligence
Solidbank did not have any participation in the custody of the defendant, or some other person for whose acts
and care of the passbook. The trial court believed that he must respond; and (c) the connection of cause and
Solidbank’s act of allowing the withdrawal of P300,000 effect between the fault or negligence of the defendant
was not the direct and proximate cause of the loss. The and the damage incurred by the plaintiff.
trial court held that L.C. Diaz’s negligence caused the
unauthorized withdrawal. Three facts establish L.C. The Court of Appeals pointed out that the teller of
Diaz’s negligence: (1) the possession of the passbook by Solidbank who received the withdrawal slip for P300,000
a person other than the depositor L.C. Diaz; (2) the allowed the withdrawal without making the necessary
presentation of a signed withdrawal receipt by an inquiry. The appellate court stated that the teller, who
unauthorized person; and (3) the possession by an was not presented by Solidbank during trial, should have
unauthorized person of a PBC check "long closed" by called up the depositor because the money to be
L.C. Diaz, which check was deposited on the day of the withdrawn was a significant amount. Had the teller
fraudulent withdrawal. called up L.C. Diaz, Solidbank would have known that
the withdrawal was unauthorized. The teller did not
The trial court debunked L.C. Diaz’s contention that even verify the identity of the impostor who made the
Solidbank did not follow the precautionary procedures withdrawal. Thus, the appellate court found Solidbank
observed by the two parties whenever L.C. Diaz liable for its negligence in the selection and supervision
withdrew significant amounts from its account. L.C. Diaz of its employees.
claimed that a letter must accompany withdrawals of
more than P20,000. The letter must request Solidbank The appellate court ruled that while L.C. Diaz was also
to allow the withdrawal and convert the amount to a negligent in entrusting its deposits to its messenger and
manager’s check. The bearer must also have a letter its messenger in leaving the passbook with the teller,
authorizing him to withdraw the same amount. Another Solidbank could not escape liability because of the
person driving a car must accompany the bearer so that doctrine of "last clear chance." Solidbank could have
he would not walk from Solidbank to the office in averted the injury suffered by L.C. Diaz had it called up
making the withdrawal. The trial court pointed out that L.C. Diaz to verify the withdrawal.
L.C. Diaz disregarded these precautions in its past
withdrawal. On 16 July 1991, L.C. Diaz withdrew The appellate court ruled that the degree of diligence
P82,554 without any separate letter of authorization or required from Solidbank is more than that of a good
any communication with Solidbank that the money be father of a family. The business and functions of banks
converted into a manager’s check. are affected with public interest. Banks are obligated to
treat the accounts of their depositors with meticulous
The trial court further justified the dismissal of the care, always having in mind the fiduciary nature of their
complaint by holding that the case was a last ditch effort relationship with their clients. The Court of Appeals
of L.C. Diaz to recover P300,000 after the dismissal of found Solidbank remiss in its duty, violating its fiduciary
the criminal case against Ilagan. relationship with L.C. Diaz.

The dispositive portion of the decision of the trial court The dispositive portion of the decision of the Court of
Appeals reads:chanrob1es virtual 1aw library OPPORTUNITY TO WITHHOLD THE WITHDRAWAL
WHEN IT IS UNDISPUTED THAT THE TWO SIGNATURES
WHEREFORE, premises considered, the decision OF RESPONDENT ON THE WITHDRAWAL SLIP ARE
appealed from is hereby REVERSED and a new one GENUINE AND PRIVATE RESPONDENT’S PASSBOOK
entered. WAS DULY PRESENTED, AND CONTRARIWISE
RESPONDENT WAS NEGLIGENT IN THE SELECTION
1. Ordering defendant-appellee Consolidated Bank and AND SUPERVISION OF ITS MESSENGER EMERANO
Trust Corporation. to pay plaintiff-appellant the sum of ILAGAN, AND IN THE SAFEKEEPING OF ITS CHECKS
Three Hundred Thousand Pesos (P300,000.00), with AND OTHER FINANCIAL DOCUMENTS.
interest thereon at the rate of 12% per annum from the
date of filing of the complaint until paid, the sum of III. THE COURT OF APPEALS ERRED IN NOT FINDING
P20,000.00 as exemplary damages, and P20,000.00 as THAT THE INSTANT CASE IS A LAST DITCH EFFORT OF
attorney’s fees and expenses of litigation as well as the PRIVATE RESPONDENT TO RECOVER ITS P300,000.00
cost of suit; and AFTER FAILING IN ITS EFFORTS TO RECOVER THE
SAME FROM ITS EMPLOYEE EMERANO ILAGAN.
2. Ordering the dismissal of defendant-appellee’s
counterclaim in the amount of P30,000.00 as attorney’s IV. THE COURT OF APPEALS ERRED IN NOT
fees. MITIGATING THE DAMAGES AWARDED AGAINST
PETITIONER UNDER ARTICLE 2197 OF THE CIVIL
SO ORDERED. 13 CODE, NOTWITHSTANDING ITS FINDING THAT
PETITIONER BANK’S NEGLIGENCE WAS ONLY
Acting on the motion for reconsideration of Solidbank, CONTRIBUTORY. 16
the appellate court affirmed its decision but modified the
award of damages. The appellate court deleted the The Ruling of the Court
award of exemplary damages and attorney’s fees.
Invoking Article 2231 14 of the Civil Code, the appellate The petition is partly meritorious.
court ruled that exemplary damages could be granted if
the defendant acted with gross negligence. Since Solidbank’s Fiduciary Duty under the Law
Solidbank was guilty of simple negligence only, the
award of exemplary damages was not justified. The rulings of the trial court and the Court of Appeals
Consequently, the award of attorney’s fees was also conflict on the application of the law. The trial court
disallowed pursuant to Article 2208 of the Civil Code. pinned the liability on L.C. Diaz based on the provisions
The expenses of litigation and cost of suit were also not of the rules on savings account, a recognition of the
imposed on Solidbank. contractual relationship between Solidbank and L.C.
Diaz, the latter being a depositor of the former. On the
The dispositive portion of the Resolution reads as other hand, the Court of Appeals applied the law on
follows:chanrob1es virtual 1aw library quasi-delict to determine who between the two parties
was ultimately negligent. The law on quasi-delict or
WHEREFORE, foregoing considered, our decision dated culpa aquiliana is generally applicable when there is no
October 27, 1998 is affirmed with modification by pre-existing contractual relationship between the parties.
deleting the award of exemplary damages and attorney’s
fees, expenses of litigation and cost of suit.chanrob1es We hold that Solidbank is liable for breach of contract
virtua1 1aw 1ibrary due to negligence, or culpa contractual.

SO ORDERED. 15 The contract between the bank and its depositor is

governed by the provisions of the Civil Code on simple
Hence, this petition. loan. 17 Article 1980 of the Civil Code expressly provides
that." . . savings . . . deposits of money in banks and
The Issues similar institutions shall be governed by the provisions
concerning simple loan." There is a debtor-creditor
relationship between the bank and its depositor. The
Solidbank seeks the review of the decision and bank is the debtor and the depositor is the creditor. The
resolution of the Court of Appeals on these depositor lends the bank money and the bank agrees to
grounds:chanrob1es virtual 1aw library pay the depositor on demand. The savings deposit
agreement between the bank and the depositor is the
I. THE COURT OF APPEALS ERRED IN HOLDING THAT contract that determines the rights and obligations of
PETITIONER BANK SHOULD SUFFER THE LOSS the parties.
BECAUSE ITS TELLER SHOULD HAVE FIRST CALLED
PRIVATE RESPONDENT BY TELEPHONE BEFORE IT The law imposes on banks high standards in view of the
ALLOWED THE WITHDRAWAL OF P300,000.00 TO fiduciary nature of banking. Section 2 of Republic Act
RESPONDENT’S MESSENGER EMERANO ILAGAN, SINCE No. 8791 ("RA 8791"), 18 which took effect on 13 June
THERE IS NO AGREEMENT BETWEEN THE PARTIES IN 2000, declares that the State recognizes the "fiduciary
THE OPERATION OF THE SAVINGS ACCOUNT, NOR IS nature of banking that requires high standards of
THERE ANY BANKING LAW, WHICH MANDATES THAT A integrity and performance." 19 This new provision in the
BANK TELLER SHOULD FIRST CALL UP THE DEPOSITOR general banking law, introduced in 2000, is a statutory
BEFORE ALLOWING A WITHDRAWAL OF A BIG AMOUNT affirmation of Supreme Court decisions, starting with the
IN A SAVINGS ACCOUNT. 1990 case of Simex International v. Court of Appeals, 20
holding that "the bank is under obligation to treat the
II. THE COURT OF APPEALS ERRED IN APPLYING THE accounts of its depositors with meticulous care, always
DOCTRINE OF LAST CLEAR CHANCE AND IN HOLDING having in mind the fiduciary nature of their relationship.
THAT PETITIONER BANK’S TELLER HAD THE LAST 21
 the passbook is presumptively its owner. If the tellers
This fiduciary relationship means that the bank’s give the passbook to the wrong person, they would be
obligation to observe "high standards of integrity and clothing that person presumptive ownership of the
performance" is deemed written into every deposit passbook, facilitating unauthorized withdrawals by that
agreement between a bank and its depositor. The person. For failing to return the passbook to Calapre, the
fiduciary nature of banking requires banks to assume a authorized representative of L.C. Diaz, Solidbank and
degree of diligence higher than that of a good father of Teller No. 6 presumptively failed to observe such high
a family. Article 1172 of the Civil Code states that the degree of diligence in safeguarding the passbook, and in
degree of diligence required of an obligor is that insuring its return to the party authorized to receive the
prescribed by law or contract, and absent such same.
stipulation then the diligence of a good father of a
family. 22 Section 2 of RA 8791 prescribes the statutory In culpa contractual, once the plaintiff proves a breach
diligence required from banks — that banks must of contract, there is a presumption that the defendant
observe "high standards of integrity and performance" in was at fault or negligent. The burden is on the
servicing their depositors. Although RA 8791 took effect defendant to prove that he was not at fault or negligent.
almost nine years after the unauthorized withdrawal of In contrast, in culpa aquiliana the plaintiff has the
the P300,000 from L.C. Diaz’s savings account, burden of proving that the defendant was negligent. In
jurisprudence 23 at the time of the withdrawal already the present case, L.C. Diaz has established that
imposed on banks the same high standard of diligence Solidbank breached its contractual obligation to return
required under RA No. 8791. the passbook only to the authorized representative of
L.C. Diaz. There is thus a presumption that Solidbank
However, the fiduciary nature of a bank-depositor was at fault and its teller was negligent in not returning
relationship does not convert the contract between the the passbook to Calapre. The burden was on Solidbank
bank and its depositors from a simple loan to a trust to prove that there was no negligence on its part or its
agreement, whether express or implied. Failure by the employees.
bank to pay the depositor is failure to pay a simple loan,
and not a breach of trust. 24 The law simply imposes on Solidbank failed to discharge its burden. Solidbank did
the bank a higher standard of integrity and performance not present to the trial court Teller No. 6, the teller with
in complying with its obligations under the contract of whom Calapre left the passbook and who was supposed
simple loan, beyond those required of non-bank debtors to return the passbook to him. The record does not
under a similar contract of simple loan. indicate that Teller No. 6 verified the identity of the
person who retrieved the passbook. Solidbank also failed
The fiduciary nature of banking does not convert a to adduce in evidence its standard procedure in verifying
simple loan into a trust agreement because banks do not the identity of the person retrieving the passbook, if
accept deposits to enrich depositors but to earn money there is such a procedure, and that Teller No. 6
for themselves. The law allows banks to offer the lowest implemented this procedure in the present case.
possible interest rate to depositors while charging the
highest possible interest rate on their own borrowers. Solidbank is bound by the negligence of its employees
The interest spread or differential belongs to the bank under the principle of respondeat superior or command
and not to the depositors who are not cestui que trust of responsibility. The defense of exercising the required
banks. If depositors are cestui que trust of banks, then diligence in the selection and supervision of employees
the interest spread or income belongs to the depositors, is not a complete defense in culpa contractual, unlike in
a situation that Congress certainly did not intend in culpa aquiliana.25cralaw:red
enacting Section 2 of RA 8791.
The bank must not only exercise "high standards of
Solidbank’s Breach of its Contractual Obligation integrity and performance," it must also insure that its
employees do likewise because this is the only way to
Article 1172 of the Civil Code provides that insure that the bank will comply with its fiduciary duty.
"responsibility arising from negligence in the Solidbank failed to present the teller who had the duty
performance of every kind of obligation is demandable." to return to Calapre the passbook, and thus failed to
For breach of the savings deposit agreement due to prove that this teller exercised the "high standards of
negligence, or culpa contractual, the bank is liable to its integrity and performance" required of Solidbank’s
depositor. employees.chanrob1es virtua1 1aw 1ibrary

Calapre left the passbook with Solidbank because the Proximate Cause of the Unauthorized Withdrawal
"transaction took time" and he had to go to Allied Bank
for another transaction. The passbook was still in the Another point of disagreement between the trial and
hands of the employees of Solidbank for the processing appellate courts is the proximate cause of the
of the deposit when Calapre left Solidbank. Solidbank’s unauthorized withdrawal. The trial court believed that
rules on savings account require that the "deposit book L.C. Diaz’s negligence in not securing its passbook under
should be carefully guarded by the depositor and kept lock and key was the proximate cause that allowed the
under lock and key, if possible." When the passbook is in impostor to withdraw the P300,000. For the appellate
the possession of Solidbank’s tellers during withdrawals, court, the proximate cause was the teller’s negligence in
the law imposes on Solidbank and its tellers an even processing the withdrawal without first verifying with
higher degree of diligence in safeguarding the passbook. L.C. Diaz. We do not agree with either court.

Likewise, Solidbank’s tellers must exercise a high degree Proximate cause is that cause which, in natural and
of diligence in insuring that they return the passbook continuous sequence, unbroken by any efficient
only to the depositor or his authorized representative. intervening cause, produces the injury and without
The tellers know, or should know, that the rules on which the result would not have occurred. 26 Proximate
savings account provide that any person in possession of cause is determined by the facts of each case upon
mixed considerations of logic, common sense, policy and lavishly spent his money but a big part of his loot was
precedent. 27 wasted in cockfight and horse racing. Ilagan was
apprehended and meekly admitted his guilt. 28
L.C. Diaz was not at fault that the passbook landed in (Emphasis supplied.)
the hands of the impostor. Solidbank was in possession
of the passbook while it was processing the deposit. L.C. Diaz refutes Solidbank’s contention by pointing out
After completion of the transaction, Solidbank had the that the person who withdrew the P300,000 was a
contractual obligation to return the passbook only to certain Noel Tamayo. Both the trial and appellate courts
Calapre, the authorized representative of L.C. Diaz. stated that this Noel Tamayo presented the passbook
Solidbank failed to fulfill its contractual obligation with the withdrawal slip.
because it gave the passbook to another person.
We uphold the finding of the trial and appellate courts
Solidbank’s failure to return the passbook to Calapre that a certain Noel Tamayo withdrew the P300,000. The
made possible the withdrawal of the P300,000 by the Court is not a trier of facts. We find no justifiable reason
impostor who took possession of the passbook. Under to reverse the factual finding of the trial court and the
Solidbank’s rules on savings account, mere possession of Court of Appeals. The tellers who processed the deposit
the passbook raises the presumption of ownership. It of the P90,000 check and the withdrawal of the
was the negligent act of Solidbank’s Teller No. 6 that P300,000 were not presented during trial to substantiate
gave the impostor presumptive ownership of the Solidbank’s claim that Ilagan deposited the check and
passbook. Had the passbook not fallen into the hands of made the questioned withdrawal. Moreover, the entry
the impostor, the loss of P300,000 would not have quoted by Solidbank does not categorically state that
happened. Thus, the proximate cause of the Ilagan presented the withdrawal slip and the passbook.
unauthorized withdrawal was Solidbank’s negligence in
not returning the passbook to Calapre. Doctrine of Last Clear Chance

We do not subscribe to the appellate court’s theory that The doctrine of last clear chance states that where both
the proximate cause of the unauthorized withdrawal was parties are negligent but the negligent act of one is
the teller’s failure to call up L.C. Diaz to verify the appreciably later than that of the other, or where it is
withdrawal. Solidbank did not have the duty to call up impossible to determine whose fault or negligence
L.C. Diaz to confirm the withdrawal. There is no caused the loss, the one who had the last clear
arrangement between Solidbank and L.C. Diaz to this opportunity to avoid the loss but failed to do so, is
effect. Even the agreement between Solidbank and L.C. chargeable with the loss. 29 Stated differently, the
Diaz pertaining to measures that the parties must antecedent negligence of the plaintiff does not preclude
observe whenever withdrawals of large amounts are him from recovering damages caused by the
made does not direct Solidbank to call up L.C. Diaz. supervening negligence of the defendant, who had the
last fair chance to prevent the impending harm by the
There is no law mandating banks to call up their clients exercise of due diligence. 30
whenever their representatives withdraw significant
amounts from their accounts. L.C. Diaz therefore had We do not apply the doctrine of last clear chance to the
the burden to prove that it is the usual practice of present case. Solidbank is liable for breach of contract
Solidbank to call up its clients to verify a withdrawal of a due to negligence in the performance of its contractual
large amount of money. L.C. Diaz failed to do so. obligation to L.C. Diaz. This is a case of culpa
contractual, where neither the contributory negligence of
Teller No. 5 who processed the withdrawal could not the plaintiff nor his last clear chance to avoid the loss,
have been put on guard to verify the withdrawal. Prior would exonerate the defendant from liability. 31 Such
to the withdrawal of P300,000, the impostor deposited contributory negligence or last clear chance by the
with Teller No. 6 the P90,000 PBC check, which later plaintiff merely serves to reduce the recovery of
bounced. The impostor apparently deposited a large damages by the plaintiff but does not exculpate the
amount of money to deflect suspicion from the defendant from his breach of contract. 32
withdrawal of a much bigger amount of money. The
appellate court thus erred when it imposed on Solidbank Mitigated Damages
the duty to call up L.C. Diaz to confirm the withdrawal
when no law requires this from banks and when the Under Article 1172, "liability (for culpa contractual) may
teller had no reason to be suspicious of the transaction. be regulated by the courts, according to the
circumstances." This means that if the defendant
Solidbank continues to foist the defense that Ilagan exercised the proper diligence in the selection and
made the withdrawal. Solidbank claims that since Ilagan supervision of its employee, or if the plaintiff was guilty
was also a messenger of L.C. Diaz, he was familiar with of contributory negligence, then the courts may reduce
its teller so that there was no more need for the teller to the award of damages. In this case, L.C. Diaz was guilty
verify the withdrawal. Solidbank relies on the following of contributory negligence in allowing a withdrawal slip
statements in the Booking and Information Sheet of signed by its authorized signatories to fall into the hands
Emerano Ilagan:chanrob1es virtual 1aw library of an impostor. Thus, the liability of Solidbank should be
reduced.
. . . Ilagan also had with him (before the withdrawal) a
forged check of PBC and indicated the amount of In Philippine Bank of Commerce v. Court of Appeals, 33
P90,000 which he deposited in favor of L.C. Diaz and where the Court held the depositor guilty of contributory
Company. After successfully withdrawing this large sum negligence, we allocated the damages between the
of money, Accused Ilagan gave alias Rey (Noel Tamayo) depositor and the bank on a 40-60 ratio. Applying the
his share of the loot. Ilagan then hired a taxicab in the same ruling to this case, we hold that L.C. Diaz must
amount of P1,000 to transport him (Ilagan) to his home shoulder 40% of the actual damages awarded by the
province at Bauan, Batangas. Ilagan extravagantly and appellate court. Solidbank must pay he other 60% of the
actual damages.

WHEREFORE, the decision of the Court of Appeals is

AFFIRMED with MODIFICATION. Petitioner Solidbank
Corporation shall pay private respondent L.C. Diaz and
Company, CPA’s only 60% of the actual damages
awarded by the Court of Appeals. The remaining 40% of
the actual damages shall be borne by private respondent
L.C. Diaz and Company, CPA’s. Proportionate
costs.chanrob1es virtua1 1aw 1ibrary

SO ORDERED.