Facts:

The case revolves around a legal dispute involving the Bank of the Philippine Islands (BPI) as the petitioner, and the spouses Arthur and Vivienne Canlas as the respondents. The events occurred following the opening of a joint current account by the Canlas spouses at the Quezon City branch of the Commercial Bank and Trust Company (CBTC) on April 25, 1977, with an initial deposit of P2,250. Arthur Canlas had previously maintained a personal checking account at the same bank. A critical error occurred when a bank teller, mistakenly using the old signature card associated with Arthur’s personal account, miscredited the initial deposit meant for the joint account to Arthur's personal account. Subsequently, the Canlas spouses deposited additional amounts into their joint account. However, when Vivienne Canlas issued checks in April and June 1977, they were dishonored due to insufficient funds, leading to penalties being deducted from the account. Complications arose as the Canlas

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Facts:

1. The spouses Arthur and Vivienne Canlas opened a joint current account on April 25, 1977, at the Quezon City branch of the Commercial Bank and Trust Company of the Philippines (CBTC) with an initial deposit of ₱2,250. Prior to this, Arthur Canlas maintained a separate personal checking account at the same branch.
2. A bank teller mistakenly used the signature card and account number from Arthur Canlas’s personal account when processing the deposit for the new joint account. As a result, the initial deposit was miscredited to the personal account rather than to the joint account.
3. Later, when checks issued by Vivienne (and possibly by the couple) were presented for payment, one of them was dishonored due to insufficient funds. The bank imposed penalties and made unsuccessful attempts to contact the respondents using the address provided—which turned out to be that of Mrs. Canlas' parents, not their true residence in Porac, Pampanga.
4. The Canlas spouses initiated a complaint for damages against CBTC in the Regional Trial Court of Pampanga wherein they sought compensation for the mishandling of their account, which resulted in overdrawings, check dishonor, and associated embarrassment.
5. The lower court initially awarded damages including actual, moral, and exemplary damages along with attorney’s fees. On appeal, however, the Intermediate Appellate Court (now Court of Appeals) modified the award by deleting the actual damages, reducing the amounts for moral damages, exemplary damages, and attorney’s fees.
6. BPI, which succeeded CBTC in a merger, became the defendant-appellant in the case. It filed a petition for review alleging errors regarding the proper venue, the bank’s gross negligence, and the appropriateness of the awarded damages.

Issue:

1. Whether the proper venue for filing the complaint was in Pampanga given that the respondents’ true residence was in Porac, Pampanga—even though a city address of Mrs. Canlas’ parents was provided in the bank documents.
2. Whether the bank was liable for damages due to the teller’s error in crediting the wrong account amount, constituting gross negligence in handling the depositors' accounts.
3. Whether awarding moral and exemplary damages and attorney’s fees against the bank was justified, considering that the mistake was possibly a mere error and not the result of malice or bad faith.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)