Bank of America v. PRC Digest

Bank of America vs. Philippine Racing Club

G.R. 150228  July 30, 2009

Ponente: Leonardo-De Castro, J:

Facts:

1. Plaintiff PRCI is a domestic corporation which maintains a current account with petitioner Bank of America. Its authorized signatories are the company President and Vice-President. By virtue of a travel abroad for these officers, they pre-signed checks to accommodate any expenses that may come up while they were abroad for a business trip. The said pre-signed checks were left for safekeeping by PRCs accounting officer. Unfortunately, the two (2) of said checks came into the hands of one of its employees who managed to encash it with petitioner bank. The said check was filled in with the use of a check-writer, wherein in the blank for the 'Payee', the amount in words was written, with the word 'Cash' written above it.

2. Clearly there was an irregularity with the filling up of the blank checks as both showed similar infirmities and irregularities and yet, the petitioner bank did not try to verify with the corporation and proceeded to encash the checks.

3. PRC filed an action for damages against the bank. The lower court awarded actual and exemplary damages. On appeal, the CA affirmed the lower court's decision and held that the bank was negligent. Hence this appeal. Petitioner contends that it was merely doing its obligation under the law and contract in encashing the checks, since the signatures in the checks are genuine.

Issue: Whether or not the petitioner can be held liable for negligence and thus should pay damages to PRC

Both parties are held to be at fault but the bank has the last clear chance to prevent the fraudulent encashment hence it is the one foremost liable .

1. There was no dispute that the signatures in the checks are genuine but the presence of irregularities on the face of the check should have alerted the bank to exercise caution before encashing them. It is well-settled that banks are in the business impressed with public interest that they  are duty bound to protect their clients and their deposits at all times.  They must treat the accounts of these clients with meticulousness and a highest degree of care considering the fiduciary nature of their relationship. The diligence required of banks are more than that of a good father of a family.

2. The PRC officers' practice of pre-signing checks is a seriously negligent and highly risky behavior which makes them also contributor to the loss. It's own negligence must therefore mitigate the petitioner's liability. Moreover, the person who stole the checks is also an employee of the plaintiff, a cleck in its accounting department at that. As the employer, PRC supposedly should have control and supervision over its own employees.

3. The court held that the petitioner is liable for 60% of the total amount of damages while PRC should shoulder 40% of the said amount.

BPI v. Suarez Digest

G.R. No. 167750

March 15, 2010

Carpio, J.:

Facts:

1. Reynaldo Suarez is a lawyer who used to maintain both savings and current account with petitioner in its Ermita branch. Sometime in 1997, respondent had a client who wanted to buy several parcels  of land in Tagaytay but the latter did not want to deal directly with the owners of said land. 

2. Suarez and his client entered into an agreement where the former will be the one to purchase the lands. Both likewise agreed that the client would deposit money in Suarez' BPI account and thereafter, he would issue the checks for the sellers.

3. The client deposited a check with BPI branch. Aware that a check has 3-days clearing time, Suarez' assistant called the bank which confirmed that the said amount had been credited to his account on that same day. Relying on this confirmation, Suarez issued five (5) checks in the name of the sellers. Unfortunately, all checks were dishonored due to insufficient funds. A penalty amounting P57,000 was also debited from his account. The checks were dishonored despite the assurance by RCBC, the drawee bank that the amount has been debited from the account of the drawee. 

4. On top of this, the bank noted on the checks 'DAIF' (drawn against insufficient fund) and not 'DAUD''  (drawn against uncollected deposit). The bank offered to reverse the penalty but denied Suarez claim for damages. Suarez rejected this offer hence the case filed for damages.

5. The lower court ruled in favor of Suarez and awarded actual, moral, and exemplary damages. BPI appealed but the Court of Appeals affirmed the lower court ruling. The CA ruled that the bank was negligent in handling the accounts of the respondent hence the latter's entitlement to damages. Hence this petition.

Issue: Whether or not petitioner bank is liable for its negligence in handling the respondent's account

1. No, BPI was not negligent because it was justified in dishonoring the checks for lack of sufficient funds in Suarez account. There was no sufficient evidence to prove that BPI conclusively confirmed the same-day crediting of the amount of the check to Suarez account. While BPI has the discretion to disregard the 3-day clearing policy, Suarez failed to prove his entitlement to such privilege. 

2. The award of actual damages is without basis since BPI is justified in dishonoring the checks for being drawn against uncollected deposit, hence BPI can rightfully impose the said penalty charges against Suarez' account.

3. The award of moral damages has no basis because Suarez failed to prove that his claimed injury was proximately caused by the erroneous marking of the 'DAIF' on the checks.

4. Suarez is however entitled to nominal damages due to BPI's failure to exercise the diligence required as the bank's business is deemed to be affected with public interest. The bank must at all times maintain a high level of meticulousness and should guard against injury attributableto negligence or bad faith on its part. Suarez therefore has the right to expect a high level of care and and diligence from BPI.

Juan Nakpil and Sons v. CA Digest

G.R. No. L-47851 October 3, 1986

Facts of the Case:

The private respondent (Philippine Bar Association) hired the services of the petitioner to make the plans and specifications for the construction of their office building. The building was completed by the contractor but subsequently, an earthquake struck causing its partial collapse and damage.

Issue: Is the petitioner liable for damages in this case?

HELD: Yes. The petitioner made substantial deviations from the plans and specifications and failed to observe requisite workmanship standards in the construction of the building while their architect drew plans that contain defects and other inadequacies. Both the contractor and the architect cannot escape liability for damages when the building collapsed due to an earthquake. Other buildings in the area withstood the tremor. The lower court also found that the spirals in one of the columns in the ground floor has been cut. One who creates a dangerous condition cannot escape liability even if an act of God may have intervened as in this case. As such, the liability of the contractor (herein petitioner) and the architect for the collapse of the building is solidary.