Citibank vs spouses Cabamongan GR No. 146918, May 2, 2006

FACTS:

Spouses Cabamongan opened a joint and/or foreign currency time deposit in favor of their two children with Citibank. On a material date, a person who claimed to be Carmelita sought the pre-termination of the account. She presented identification cards to ascertain her identity to the then account officer. When she left with the money, she left an identification card. She filled up the necessary forms for pre-termination of deposits with the assistance of Account Officer Yeye San Pedro. While the transaction was being processed, she was casually interviewed by San Pedro about her personal circumstances and investment plans. Since the said person failed to surrender the original Certificate of Deposit, she had to execute a notarized release and waiver document in favor of Citibank, pursuant to Citibank's internal procedure, before the money was released to her. The release and waiver document was not notarized on that same day but the money was nonetheless given to the person withdrawing. The transaction lasted for about 40 minutes.

After said person left, San Pedro realized that she left behind an identification card. The account officer then called up the address. The spouses and their family knew of the incident. They were presently residing in the US and there was a prior incident wherein they got robbed in their house with the jewelry box and cards stolen. Spouses made several demands for the return of the amount but Citibank refused to do so.




HELD:

Citibank was negligent.

First, the “depositor” didn’t present the Certificate of Deposit. This would not have been an insurmountable obstacle as the bank, in the absence of such certificate, allows the termination of the deposit for as long as the depositor executes a notarized release and waiver document in favor of the bank. However, this simple procedure was not followed by the bank, as it terminated the deposit and actually delivered the money to the impostor without having the said document notarized on the flimsy excuse that another department of the bank was in charge of notarization. The said procedure was obviously for the protection of the bank but it deliberately ignored such precaution. At the very least, the conduct of the bank amounts to negligence.

Second, from the internal memorandum issued by the Account Officer, he admitted to the fact that the specimen signature was different from the one who misrepresented herself as Carmelita. San Pedro was able to detect discrepancies in the signatures but she did not exercise additional precautions to ascertain the identity of the person she was dealing with. In fact, the entire transaction took only 40 minutes to complete despite the anomalous situation. Undoubtedly, the bank could have done a better job

Third, the bank kept in its records pictures of its depositors. It is inconceivable how the bank was duped by an impostor. San Pedro admitted in her testimony that the woman she dealt with did not resemble the pictures appearing on the identification cards presented but San Pedro still went on with the sensitive transaction. She did not mind such disturbing anomaly because she was convinced of the validity of the passport. She also considered as decisive the fact that the impostor had a mole on her face in the same way that the person in the pictures on the identification cards had a mole. These explanations do not account for the disparity between the pictures and the actual appearance of the impostor. That said person was allowed to withdraw the money anyway is beyond belief.

Bank transactions pass through a successive of bank personnel, whose duty is to check and countercheck transactions for possible errors. While a bank is not expected to be infallible, it must bear the blame for failing to discover mistakes of its employees despite established bank procedure involving a battery of personnel designed to minimize if not eliminate errors.