Civil Law

Philippine National Bank vs Carmelita Santos et al

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G.R. No. 208293 – G.R. No. 208295 – 749 Phil. 948 – Civil Law – Torts and Damages – Negligence – Diligence Required of a Bank; Extraordinary Diligence

In 1991, Angel C. Santos died. In 1996, his heirs (Carmelita Santos, Reyme Santos, Angel L. Santos, and Noneng Dianco) went to the Philippine National Bank (PNB) to withdraw their deceased father’s deposit (about Php1.8M) from the bank. The bank manager, Lina Aguilar, advised them to present the following documents first:

(1) original or certified true copy of the Death Certificate of Angel C. Santos;

(2) certificate of payment of, or exemption from, estate tax issued by the Bureau of Internal Revenue (BIR);

(3) Deed of Extrajudicial Settlement;

(4) Publisher’s Affidavit of publication of the Deed of Extrajudicial Settlement; and

(5) Surety bond effective for two (2) years and in an amount equal to the balance of the deposit to be withdrawn.

In 1998, the heirs returned with the above documents but then they were advised by Aguilar that the money was already withdrawn by Bernardito Manimbo who was able to present the following documents:

(a) an affidavit of self-adjudication purportedly executed by Reyme L. Santos;

(b) a certificate of time deposit dated December 14, 1989 amounting to 1,000,000.00; and

(c) the death certificate of Angel C. Santos.

Carmelita et al then sued PNB and Aguilar on the ground that they were negligent.

ISSUE: Whether or not the bank was negligent.

HELD: Yes. PNB and Aguilar were negligent in handling the deposit of Angel C. Santos. Similar to common carriers, banking is a business that is impressed with public interest. It affects economies and plays a significant role in businesses and commerce. The public reposes its faith and confidence upon banks, such that “even the humble wage-earner has not hesitated to entrust his life’s savings to the bank of his choice, knowing that they will be safe in its custody and will even earn some interest for him.” This is why we have recognized the fiduciary nature of the banks’ functions, and attached a special standard of diligence for the exercise of their functions.

The fiduciary relationship between a bank and its depositor means that the bank’s obligation to observe “high standards of integrity and performance” is deemed written into every deposit agreement between a bank and its depositor. The fiduciary nature of banking requires banks to assume a degree of diligence higher than that of a good father of a family. Article 1172 of the Civil Code states that the degree of diligence required of an obligor is that prescribed by law or contract, and absent such stipulation then the diligence of a good father of a family.

In this case, PNB’s and Aguilar’s negligence is highlighted by the fact that they already have prior knowledge of the existence of more than one heir. So when Manimbo appeared to withdraw presenting a purported Affidavit of Self-Adjudication executed by one of the heirs, this should have already raised suspicion on the part of PNB. This should have prompted the bank to make further inquiries to ensure that they are releasing the funds to a legitimate claimant. Further, PNB was not consistent in its documentary requirements. They required a different set of documents for Carmelita et al yet accepted the documents presented by Manimbo.

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