Citystate Savings Bank vs.

Tobias
G.R. No. 22790 – March 7, 2018

Doctrine: Banks have a fiduciary relationship with the public and their stability depends on the
confidence of the people in their honesty and efficiency. Such faith will be eroded where banks
do not exercise strict care in the selection and supervision of its employees, resulting in prejudice
to their depositors.

I. Facts:
Rolando Robles, as branch manager of petitioner Citystate Savings Bank, was able to
persuade respondent Teresita Tobias to open an account with it, and later on, to sign up in its back-
to-back investment scheme. Robles personally remitted the interests at respondent’s meat stall.
When Robles failed to remit the interest as scheduled, respondent found out that he withdrew the
money and appropriated it for his personal use. Respondent then filed an action for collection of
sum of money before the trial court against petitioner and Robles. The RTC held Robles liable,
but absolved petitioner bank from liability. On appeal, the Court of Appeals held Robles and
petitioner bank solidarily liable.

II. Issue:
Whether or not petitioner bank is solidarily liable with Robles

III. Ruling:
Yes, petitioner bank is solidarily liable.

A banking corporation is liable to innocent third persons where the representation is made
in the course of its business by an agent acting within the general scope of his authority even
though, in the particular case, the agent is secretly abusing his authority and attempting to
perpetrate a fraud upon his principal or some other person, for his own ultimate benefit. This is
because banks have a fiduciary relationship with the public and their stability depends on the
confidence of the people in their honesty and efficiency. Such faith will be eroded where banks do
not exercise strict care in the selection and supervision of its employees, resulting in prejudice to
their depositors.

Petition denied.