160

Philippine National Bank Vs. F.F. Cruz and Co., Inc, GR 173259, July 25,
2011 – First Division

DEL CASTILLO, J.

FACTS: F.F. Cruz & Co, Inc. has an account in PNB Timog Avenue Branch.
Its president Felipe and secretary-treasurer Angelita were the signatories of the
accounts. The signatories left for the US on separate dates. While they were out
of the country, application for cashier’s and manager’s checks bearing Felipe’s
signature were presented to and approved by PNB on 2 occasions. When
Angelita returned, she examined the statements of accounts and noticed
deductions from the 2 checks. They instituted a suit for damages against PNB.
The PNB averred lack of cause of action as it exercised due diligence in
handling of the account. It was the accountant of FFCI who confirmed the
regularity of the transaction. The RTC ruled that FFCI was guilty of negligence
in giving the accountant authority to make decisions on the account and found
PNB negligent in not calling personally to verify the legitimacy of the
withdrawals. The CA affirmed with modification the RTC decision stating that
60% should be born by PNB and 40% by FCCI.

ISSUE: Can the bank bear a greater proportion of the loss if it was negligent in
handling the account of its client

RULING: Yes. As between a bank and its depositor, where the bank’s
negligence is the proximate cause of the loss and the depositor is guilty of
contributory negligence, the greater proportion of the loss shall be borne by the
bank. As correctly found by the appellate court, PNB failed to make the proper
verification because the applications for the manager’s check do not bear the
signature of the bank verifier. the banking business is impressed with public
trust. A higher degree of diligence is imposed on banks relative to the handling
of their affairs than that of an ordinary business enterprise. Thus, the degree of
responsibility, care and trustworthiness expected of their officials and
employees is far greater than those of ordinary officers and employees in other
enterprises. In the case at bar, PNB failed to meet the high standard of
diligence required by the circumstances to prevent the fraud. PNB’s negligence
is the proximate cause of the loss while the issue as to FFCCI’s contributory
negligence has been settled with finality in G.R. No. 173278. Thus, the
appellate court properly adjudged PNB to bear the greater part of the loss
consistent with these rulings.