Professional Documents
Culture Documents
The point is that as a business affected with public interest and because of the nature of its functions, 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. In the case at bar, it is obvious that the respondent bank was remiss in that duty and
violated that relationship. What is especially deplorable is that, having been informed of its error in not crediting the
deposit in question to the petitioner, the respondent bank did not immediately correct it but did so only one week later
or twenty-three days after the deposit was made. It bears repeating that the record does not contain any satisfactory
explanation of why the error was made in the first place and why it was not corrected immediately after its discovery.
Such ineptness comes under the concept of the wanton manner contemplated in the Civil Code that calls for the
imposition of exemplary damages.
BPI vs CA (2000)
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. Petitioner failed to exercise the diligence of a good father of a family. In total
disregard of its own rules, petitioners personnel negligently handled private respondents account to petitioners
detriment.
The proximate cause of the withdrawal and eventual loss of the amount of $2,500.00 on petitioners part was its
personnels negligence in allowing such withdrawal in disregard of its own rules and the clearing requirement in the
banking system. In so doing, petitioner assumed the risk of incurring a loss on account of a forged or counterfeit
foreign check and hence, it should suffer the resulting damage.
However, the fiduciary nature of a bank-depositor relationship does not convert the contract between the bank and its
depositors from a simple loan to a trust agreement, whether express or implied. Failure by the bank to pay the
depositor is failure to pay a simple loan, and not a breach of trust.[24] The law simply imposes on the bank a higher
standard of integrity and performance in complying with its obligations under the contract of simple loan, beyond
those required of non-bank debtors under a similar contract of simple loan.
The fiduciary nature of banking does not convert a simple loan into a trust agreement because banks do not accept
deposits to enrich depositors but to earn money for themselves. The law allows banks to offer the lowest possible
interest rate to depositors while charging the highest possible interest rate on their own borrowers. The interest
spread or differential belongs to the bank and not to the depositors who are not cestui que trust of banks.
Banks, indeed, should exercise more care and prudence in dealing even with registered lands, than private
individuals, as their business is one affected with public interest. Banks keep in trust money belonging to their
depositors, which they should guard against loss by not committing any act of negligence that amounts to lack of
good faith. Absent good faith, banks would be denied the protective mantle of the land registration statute, Act 496,
which extends only to purchasers for value and good faith, as well as to mortgagees of the same character and
description.[53] Thus, this Court clarified that the rule that persons dealing with registered lands can rely solely on
the certificate of title does not apply to banks.[54]
Cadiz vs CA (2005)
as bank employees, the responsibilities of petitioners are impressed with a high degree of public interest. Private
persons entrust their fortunes to banks, and it would cause a breakdown of the financial order if the judicial system
were to leave unsanctioned bank employees who treat depositors accounts as their own private kitty.
Moreover, it would simply be temerarious for the Court to sanction the reinstatement of bank employees who have
clearly engaged in anomalous banking practices. The particular fiduciary responsibilities reposed on banks and its
employees cannot be emphasized enough. The fiduciary nature of banking[22] is enshrined in Republic Act No. 8791
or the General Banking Law of 2000. Section 2 of the law specifically says that the State recognizes the fiduciary
nature of banking that requires high standards of integrity and performance.[23] The bank must not only exercise
high standards of integrity and performance, it must also ensure that its employees do likewise because this is the
only way to ensure that the bank will comply with its fiduciary duty.[24]
Reyes vs CA (2001)
The degree of diligence required of banks, is more than that of a good father of a family where the fiduciary nature
of their relationship with their depositors is concerned.In other words banks are duty bound to treat the deposit
accounts of their depositors with the highest degree of care. But the said ruling applies only to cases where banks
act under their fiduciary capacity, that is, as depositary of the deposits of their depositors. But the same higher
degree of diligence is not expected to be exerted by banks in commercial transactions that do not involve
their fiduciary relationship with their depositors.
Considering the foregoing, the respondent bank was not required to exert more than the diligence of a good father of
a family in regard to the sale and issuance of the subject foreign exchange demand draft. The case at bar does
not involve the handling of petitioners deposit, if any, with the respondent bank. Instead, the relationship involved was
that of a buyer and seller, that is, between the respondent bank as the seller of the subject foreign exchange
demand draft, and PRCI as the buyer of the same, with the 20th Asian Racing Conference Secretariat in Sydney,
Australia as the payee thereof. As earlier mentioned, the said foreign exchange demand draft was intended for the
payment of the registration fees of the petitioners as delegates of the PRCI to the 20th Asian Racing Conference in
Sydney.
Like a common carrier whose business is also imbued with public interest, petitioner should have exercised
extraordinary diligence to negate its liability to respondents.
In one case,[16] the Court did not hesitate to apply the doctrine of last clear chance (commonly used in
transportation laws involving common carriers) to a banking transaction where it adjudged the bank responsible for
the encashment of a forged check. There, we enunciated that the degree of diligence required of banks is more than
that of a good father of a family in keeping with their responsibility to exercise the necessary care and prudence in
handling their clients money.
We find no compelling reason to disallow the application of the provisions on common carriers to this case if only to
emphasize the fact that banking institutions (like petitioner) have the duty to exercise the highest degree of diligence
when transacting with the public. By the nature of their business, they are required to observe the highest standards
of integrity and performance, and utmost assiduousness as well.[17]