City Trust Bank v. Cruz Digest

G.R. No. 157049

August 11, 2010

Bersamin, J.:

Facts:

1. Respondent Carlos Romulo Cruz, an architect and a businessman, maintained both current and savings account with the petitioner bank in their Loyola Heights Branch. Due to an oversight by its bank employee, the savings account of respondent was closed. This resulted to extreme embarrassment of the respondent when checks he issued could not be honored despite the fact that his savings account has sufficient funds. 

2. Unmoved by the apologies and adjustments made by the bank, respondent filed a complaint for damages before the RTC wherein the said court awarded exemplary damages (P100,000) and moral damages (P20,000) plus attorneys fees. The bank appealed to the CA, but CA affirmed the lower court's decision. The Court of Appeals said that the erroneous closure of the respondent's account would not have occurred if the bacnk had not been careless in supervising its employees. Moreover, the CA explained that the negligence of the bank's personnel was the proximate cause of the damage to the respondent. The CA also denied the bank's motion for reconsideration. Hence, this appeal.

3. Petitioner contends that there were decisive situation facts showing excusable negligence and good faith that did not justify the award of damages.

Issue: Whether or not the bank is liable for the damages caused to the respondent

YES. The petition has no merit. 

1. The petitioner as a banking institution has the direct obligation to supervise closely its employees handling its depositors' account. It should always be mindful of the fiduciary nature of its relationship with the depositors which require it and its employees to record accurately every single transaction, considering that the depositor's account should always reflect the amounts of money the depositors could dispose of as they saw fit. If the bank fell short of this obligation, it should bear the responsibility for the consequences to the depositors, who, like the herein respondent, suffered embarrassment due to the negligence in the handling of his account. 

2. Moreover, in several court decisions, banks are made liable for negligence even without sufficient proof of malice or bad faith and awarded damages each time to the suing depositors in proper consideration of their reputation and social standing. 

3. Finally, it is never overemphasized that the public always relies on a bank's profession of diligence and meticulousness in rendering service. Its failure to exercise such warrants its liability for exemplary damages and reasonable attorney's fees.