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THE CONSOLIDATED BANK and TRUST CORPORATION, petitioner, vs. COURT OF APPEALS and L.C.

DIAZ and COMPANY, CPAs, respondents. [G.R. No. 138569. September 11, 2003] Facts: Solidbank is a domestic banking corporation organized and existing under Philippine laws. Private respondent L.C. Diaz is a professional partnership engaged in the practice of accounting. L.C. Diaz is a depositor of Solidbank. L.C. Diaz through its cashier Macaraya instructed their messenger to deposit a cash of P990 and check for P50. Calapre went to Solidbank and presented to Teller No. 6 the two deposit slips and the passbook. The teller acknowledged receipt of the deposit by returning to Calapre the duplicate copies of the two deposit slips. Teller No. 6 stamped the deposit slips with the words DUPLICATE and SAVING TELLER 6 SOLIDBANK HEAD OFFICE. Since the transaction took time and Calapre had to make another deposit for L.C. Diaz with Allied Bank, he left the passbook with Solidbank. Calapre then went to Allied Bank. When Calapre returned to Solidbank to retrieve the passbook, Teller No. 6 informed him that somebody got the passbook. Calapre went back to L.C. Diaz and reported the incident to Macaraya. Macaraya immediately prepared a deposit slip in duplicate copies with a check of P200,000. Macaraya, together with Calapre, went to Solidbank and presented to Teller No. 6 the deposit slip and check. The teller did the same thing, stamped the deposit slip. When Macaraya asked for the passbook, Teller No. 6 told Macaraya that someone got the passbook but she could not remember to whom she gave the passbook. When Macaraya asked Teller No. 6 if Calapre got the passbook, Teller No. 6 answered that someone shorter than Calapre got the passbook. Macaraya went back to her office and reported the matter to the Personnel Manager of L.C. Diaz, Emmanuel Alvarez. The following L.C. Diaz called up Solidbank to stop any transaction using the same passbook until L.C. Diaz could open a new account. On the same day, Diaz formally wrote Solidbank to make the same request. L.C. Diaz learned of the unauthorized withdrawal the day before, 14 August 1991, of P300,000 from its savings account. , L.C. Diaz through its counsel demanded from Solidbank the return of its money. Solidbank refused. L.C. Diaz filed a Complaint[7] for Recovery of a Sum of Money against Solidbank which the latter dismissed applying the rules on savings account written on the passbook. The rules state that possession of this book shall raise the presumption of ownership and any payment or payments made by the bank upon the production of the said book and entry therein of the withdrawal shall have the same effect as if made to the depositor personally. Appealed to the CA, the latter

reversed the RTC decision ruling that Solidbanks negligence was the proximate cause of the unauthorized withdrawal of P300,000 from the savings account of L.C. Diaz. The appellate court reached this conclusion after applying the provision of the Civil Code on quasi-delict. Issue: WON Solidbank is negligent in allowing the withdrawals despite the forged signatures on the withdrawal slip. Held: We hold that Solidbank is liable for breach of contract due to negligence, or culpa contractual. The contract between the bank and its depositor is governed by the provisions of the Civil Code on simple loan, Article 1980 of the Civil Code expressly provides that x x x savings x x x deposits of money in banks and similar institutions shall be governed by the provisions concerning simple loan. There is a debtor-creditor relationship between the bank and its depositor. The bank is the debtor and the depositor is the creditor. The depositor lends the bank money and the bank agrees to pay the depositor on demand. The savings deposit agreement between the bank and the depositor is the contract that determines the rights and obligations of the parties. Under the Fiduciary nature of relationship between a bank and its depositors, that the bank is under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship. 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 provides that responsibility arising from negligence in the performance of every kind of obligation is demandable. For breach of the savings deposit agreement due to negligence, or culpa contractual, the bank is liable to its depositor. Solidbanks tellers must exercise a high degree of diligence in insuring that they return the passbook only to the depositor or his authorized representative. Solidbank and Teller No. 6 presumptively failed to observe such high degree of diligence in safeguarding the passbook, and in insuring its return to the party authorized to receive the same. On the issue of proximate cause, the courth held that it was the negligent act of Solidbanks Teller No. 6 that gave the impostor presumptive ownership of the passbook. Had the passbook not fallen into the hands of the impostor, the loss of P300,000 would not have happened. Thus, the proximate cause of the unauthorized withdrawal was Solidbanks negligence in not returning the passbook to Calapre. On the issue of Last Clear Chance, the Court not apply the doctrine of last clear chance to the present case. Solidbank is liable for breach of contract due to negligence in the performance of its contractual obligation to L.C. Diaz. This is a case

of culpa contractual, where neither the contributory negligence of the plaintiff nor his last clear chance to avoid the loss, would exonerate the defendant from liability. On the award of damages, under Article 1172, liability (for culpa contractual) may be regulated by the courts, according to the circumstances. In this case, L.C. Diaz was guilty of contributory negligence in allowing a withdrawal slip signed by its authorized signatories to fall into the hands of an impostor. Thus, the liability of Solidbank should be reduced. L.C. Diaz must shoulder 40% of the actual damages awarded by the appellate court. Solidbank must pay the other 60% of the actual damages.

injuries and damage to property through reckless imprudence. RTC found the accused guilty and this Decision was affirmed by the CA. Issue: WON the action of petitioner, Rogelio Engada, was the proximate cause of the collision Held: Yes. Records show that Iran swerved to the left only to avoid petitioners pick-up, which was already on a head to head position going against Irans Tamaraw jeepney immediately before the vehicles collided. We note that petitioner admitted his Isuzu pick-up intruded into the lane of the Tamaraw jeepney. Its head was towards the direction of Barotac Nuevo and the rear tires were just a few inches beyond the center of the lane. Moving backwards facing Barotac Nuevo, at two arms length away from the pick-up, Witness Alobin also saw a tire mark, 12 inches long and located at the left side of the center line going to the right side. The above circumstance corroborates the testimony of both Seyan and Iran that, immediately before the collision, the pick-up was not on its proper lane but on the other lane (the left lane rather than the right) directly on collision course with the Tamaraw jeepney. It is a settled rule that a driver abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary situation has the duty to see to it that the road is clear and he should not proceed if he cannot do so in safety. This rule is consistent with Section 41, paragraph (a) of R.A. 4136 as amended, otherwise known as The Land Transportation and Traffic Code, which provides: Sec. 41. Restrictions on overtaking and passing. (a) The driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking or passing another vehicle proceeding in the same direction, unless such left side is clearly visible and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking or passing to be made in safety. For failing to observe the duty of diligence and care imposed on drivers of vehicles abandoning their lane, petitioner must be held liable.

ROGELIO ENGADA, petitioner, vs. HON. COURT OF APPEALS, Former Fourteenth Division, Manila, and PEOPLE OF THE PHILIPPINES, respondents. [G.R. No. 140698. June 20, 2003] Facts: Edwin Iran

was driving a Toyota Tamaraw jeepney bound for Iloilo City. On board was Sheila Seyan, the registered owner of the Tamaraw. While traversing the road along Barangay Acquit, Barotac Nuevo, the Tamaraw passengers allegedly saw from the opposite direction a speeding Isuzu pickup, driven by petitioner Rogelio Engada. When it was just a few meters away from the Tamaraw, the Isuzu pick-ups right signal light flashed, at the same time, it swerved to its left, encroaching upon the lane of the Tamaraw and headed towards a head-on collision course with it. Iran swerved to his left but the pick-up also swerved to its right. Thus, the pick-up collided with the Tamaraw, hitting the latter at its right front passenger side. The impact caused the head and chassis of the Tamaraw to separate from its body. Seyan was thrown out of the Tamaraw and landed on a ricefield. The pick-up stopped diagonally astride the center of the road. Seyan and Iran were brought to Barotac Nuevo Medicare Hospital. Seyans medical certificate revealed that she suffered a fracture on the right femur, lacerated wound on the right foot, multiple contusions, abrasions, blunt abdominal injury, and lacerations of the upper-lower pole of the right kidney. A case was filed against petitioner charging him with serious physical

Iran could not be faulted when in his attempt to avoid the pick-up, he swerved to his left. Petitioners acts had put Iran in an emergency situation which forced him to act quickly. An individual who suddenly finds himself in a situation of danger and is required to act without much time to consider the best means that may be adopted to avoid the impending danger, is not guilty of negligence if he fails to undertake what subsequently and upon reflection may appear to be a better solution, unless the emergency was brought by his own negligence. The doctrine of last clear chance is not applicable. This doctrine states that a person who has the last clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent, is considered in law solely responsible for the consequences of the accident. What has been shown is the presence of an emergency and the proper application of the Emergency Rule. Petitioners act of swerving to the Tamaraws lane at a distance of 30 meters from it and driving the Isuzu pick-up at a fast speed as it approached the Tamaraw, denied Iran time and opportunity to ponder the situation at all. There was no clear chance to speak of. He was sentenced to pay Seyan the amount of P51,000.00 for the total destruction of the Toyota Tamaraw Jeepney andP110,000.00 for indemnification of hospital and medical expenses, and to pay the cost of the suit.