Prudential Bank v Chonney Lim GR No. 136371, November 11, 2005

Facts:

Respondent allegedly made 2 deposits in the amount of P34,000 each on the 14^th and 15^th of March 1988 in his savings account. He availed of the petitioner bank’s automatic transfer system where his savings deposit may be automatically transferred in his checking account in case the latter has insufficient fund to pay for his issued checks. Apparently, respondent received a letter of dishonor for his checks due to insufficient fund. He wrote a letter to the bank opposing their claim that he has an insufficient fund while asserting to have made two separate deposits in the amount of P34,000 to his savings account. The bank denied receiving two separate deposits and verified only that respondent made a deposit only on the 14^th of March and that the deposit slip dated March 15 presented by the respondent is merely a copy of the former. Upon presentation of evidence, it was clear that the two separate deposit slips have the same amount but with different denominations stated therein. This was further attested by the bank teller who admitted to have stamped both deposit slips. The lower court decided in favor of the respondent. Upon appeal by the petitioner, the court of appeals affirmed the lower court decision with some modification on the award of damages hence this petition to the Supreme Court.

Issue:

Whether or not there was negligence on the part of the bank to record the second deposit made on March 15 by the respondent.

Ruling:

The court held that respondent presented substantial evidence to prove that two deposits were made in his account of the same amount on March 14 and 15, 1988. The failure of the bank to credit the deposit made by the respondent on March 15 to his savings account resulting to his dishonored checks constitutes a breach of duty of the bank to its client that equates to negligence. By the nature of the bank functions, they are mandated to observe highest degree of diligence in treating the accounts of their depositors. The banking industry is impressed with public interest and by virtue of their fiduciary duty to their clients banks are mandated to treat with meticulous care and fidelity all undertakings pertaining to their depositor’s accounts. The court finds the imposition of award for damages are in order. The wrongful act of the bank constitutes injury to the respondent because the financial credit of a businessman is a valuable asset and any adverse reflection of his credit would result to material loss to him.