CENTRAL BANK OF THE PHILIPPINES v. CITYTRUST BANKING CORPORATION 578 SCRA 27 (2009)
If the plaintiff’s negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.
The Citytrust Banking Corporation (Citytrust) gave Central Bank of the Philippines a list of signatures of five of its officers authorized to sign checks and serve as drawers and indorsers for its account, and also the list of the roving tellers authorized to perform other transactions on its behalf, one of whom was Rounceval Flores (Flores). Flores presented two checks to the Central Bank’s Senior Teller Iluminada dela Cruz (Dela Cruz) and was subsequently approved. Dela Cruz prepared the cash transfer slip where Flores should sign but instead he sign as one Rosauro C. Cayabyab. This fact was missed by Dela Cruz. It was given to Cash Department and the signatures were examined and later on paid Flores for the checks. After one year and nine months, the Citytrust demanded that the checks be cancelled and the funds taken out be returned because the check was stolen before. Central Bank did not heed such call. Citytrust filed a complaint to collect the sum of money with damages against Central Bank to the Regional Trial Court (RTC). RTC found both parties negligent and held them equally liable for the loss. Court of Appeals affirmed the decision.
Whether or not Citytrust can collect sum of money as damages from the Central Bank.
The law imposes on banks high standards in view of the fiduciary nature of banking. Section 2 of Republic Act No. 8791 (R.A. 8791), which took effect on 13 June 2000, declares that the State recognizes the “fiduciary nature of banking that requires high standards of integrity and performance.”
This fiduciary relationship 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. Section 2 of R.A. 8791 prescribes the statutory diligence required from banks – that banks must observe “high standards of integrity and performance” in servicing their depositors. Citytrust’s failure to timely examine its account, cancel the checks and notify petitioner of their alleged loss/theft should mitigate petitioner’s liability, in accordance with Article 2179 of the Civil Code which provides that if the plaintiff’s negligence was only contributory, the immediate and proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.