The fiduciary nature of banking requires “high standards of integrity and performance” that is deemed written in every deposit agreement between a bank and its depositor. This is the doctrine applied in this case between the Central Bank of the Philippines (BSP) and Citytrust Banking Corporation (CBC).
Under the old Central Bank Law, CBC had to maintain a demand deposit account with BSP. So CBC furnished BSP with the names and the corresponding signatures of five of its officers authorized to sign as drawers or endorsers of checks under its account as well as the list and corresponding signatures of its roving tellers authorized to withdraw, sign receipts and perform other transactions on its behalf.
One of the roving tellers was Randy Torres who was issued security identification cards and who had numerous transactions with BSP for almost five years. On July 15, 1977 Randy presented to BSP’s Senior Teller Lucy Cruz to CBC two checks of the same date payable to CBC in the amounts of P850,000 and P900,000 both of which were duly signed by CBC’s authorized signatories.
After the checks were certified by BSP’s Accounting Department, Lucy verified them, prepared the cash transfer slip on which she affixed her signature, stamped the checks with the notation “received payment” and asked Randy to, as he did, sign on the space above said notation. Instead of signing his name however, Randy signed as “Rolly Cortez”—a fact which Lucy failed to notice because Randy was transacting with them for the past five years.
Lucy thereupon sent the cash transfer slip and checks to BSP’s Cash Department where an officer verified and compared the drawer’s signatures on the checks against their specimen signatures provided by CBC, and finding the same in order, approved the cash transfer slip and paid Randy the corresponding amounts. Then BSP debited the amount of the checks totaling P1,750,000 from CBC’s demand deposit account.
It turned out that the checks were already cancelled because they were stolen. Randy who en-cashed them was actually absent on the day the checks were cashed but was still issued the security identification card. It took CBC however a year and nine months before it demanded from BSP to restore the amounts of the checks in its deposit account.
When BSP did not heed the demand, CBC filed a complaint against BSP for recovery of said money with damages alleging that BSP erred in encashing the checks despite the lack of authority of said “Rolly Cortez”.
In answer, BSP contended that negligence is solely on CBC for allowing Randy to steal the checks and failing to timely cancel them; allowing Randy to wear the issued ID; failing to report Randy’s absence from work on the day of the incident and to explain the circumstances surrounding the supposed theft and cancellation of the checks. Besides assuming that its teller was negligent, CBC’s negligence which preceded that committed by its teller was the proximate cause of the loss or fraud, BSP contended. Was BSP correct?
No. The fiduciary nature of banking requires banks to assume a degree of diligence higher than that of a good father of a family. Banks are under obligation to treat the account of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship.
The BSP teller Lucy did not verify Randy’s signature on the flimsy excuse that Randy had had previous transactions with it for a number of years. That circumstance did not excuse her from focusing attention to or at least glance at Randy as he was signing so as to satisfy herself that the signature he had just affixed matched that of his specimen signature. Had she done that, she would have readily noticed that Randy was affixing not his but a fictitious signature.
But CBC’s failure to timely examine its account, cancel the checks and notify BSP of their alleged theft/loss should mitigate BSP’s liability in accordance with Article 2179 of the Civil Code which provides that if the plaintiff’s (CBC’s) negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s (BSP’s) lack of due care, the plaintiff may recover damages but the court should mitigate the same. The proceeds or part thereof could have been recovered had CBC timely discovered the theft/loss or subsequent encashment. So the loss should be shared at the ratio of 60% for BSP and 40% for CBC (Central Bank vs. CityTrust Banking Corp. G.R. 141835, February 4, 2009).
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