Phil. Banking Corp. vs CA GR. No. 127469

Facts:

Leonilo Marcos filed in court a complaint for sum of money with damages against Phil. Banking Corporation (PBC). Marcos allegedly made a time deposit in 2 occasions the amt. of P664,897.67 and P764,897.67 through the persuasion of his friend Pagsaligan, one of the bank’s officials. The bank issued receipt for the first deposit while a letter-certification was issued for his second deposit by Pagsaligan. Pagsaligan kept the various time deposit certificates. When Marcos wanted to withdraw his time deposit and its accumulated interest Pagsaligan encouraged him to open a letter of credit to the bank by executing 3 trust receipts agreement. He signed blank forms for domestic letter of credits, trust receipts agreements and promissory notes. He was required to deposit 30% of the total amount of credit and his time deposit will secure the remaining 70% of the letters of credit.

He is now accusing the bank for unjustly collecting payment without deducting the 30% of his down payment and charging him with accumulating interests since his time deposit serves as collateral for his remaining obligation. He further denied making a loan of P500,000 with 25% interest per annum covered by a promissory note produced by the bank. The bank explained that the promissory notes he executed are distinct from the trust receipt agreement and denied falsifying the promissory note covering for the loan of P500,000. The evidence presented on the promissory note however is merely a machine copy of the document. The said loan was already paid by offsetting it from his time deposit.

Issue:

Whether or not the bank failed to take a proper account on Marcos’ deposits and payment of his loans?

Ruling:

The court held that the bank is liable for offsetting the time deposit of Marcos to the fictitious promissory note for the 500,000 loan. The court upheld the findings of the lower court on the discrepancies shown by the machine copy of the duplicate of the promissory note and the suspicious claim of the bank that it could not produce the original copy thereof. The mere machine copy of the document has no evidentiary value before the court. The court held that the bank did not forge the promissory note. Pagsaligan did to cover up his failure to give the proper account of Marcos’ time deposits. This however does not excuse the bank to return to Marcos the correct amount of his time deposit with interest. Bank has the fiduciary duty before its clients. Its duty is to observe the highest standards of integrity and performance. Assuming Pagsaligan is responsible for the spurious promissory note the court held that a bank is liable for the wrongful acts of its officers. The court made the proper account of the total amount due to Marcos ordering the bank to give to him the same plus moral and exemplary damages.