G.R. No. 108957 - Prudential Bank vs. Court of Appeals

Private respondent Aurora F. Cruz, with her sister as co-depositor, invested P200,000.00 in Central Bank bills at the Prudential Bank branch in Quezon Avenue, Quezon City, on June 23, 1986.
The investment was for 63 days at an annual interest rate of 13.75%, where P196,122.88 was withdrawn from their Savings Account No. 2546 and applied to the investment; the difference of P3,877.07 represented pre-paid interest.
The transaction was evidenced by a Confirmation of Sale and a Debit Memo issued by Susan Quimbo, an employee apparently in charge of such transactions.

Upon maturity of the placement on August 25, 1986, Cruz returned to the bank to “roll-over” or renew her investment.
Quimbo prepared a Credit Memo crediting P200,000.00 to Cruz’s savings account passbook and a Debit Memo for P196,122.88 to cover the re-investment after deducting the pre-paid interest.
Cruz was required to sign a Withdrawal Slip for P196,122.98, which was explained as a new bank requirement for the roll-over process.
Several days later, Cruz received another set of Confirmation of Sale and a copy of the Debit Memo for the renewed investment.

On October 27, 1986, when Cruz sought to withdraw her P200,000.00, the bank informed her that the investment had already been withdrawn on August 25, 1986, despite her records showing otherwise.
No copy of the Confirmation of Sale and Debit Memo allegedly issued by Quimbo was found in the bank’s files.
Quimbo was unavailable for questioning, having not reported for duty.
The branch manager, Roman Santos, assured Cruz that the matter would be investigated, but her inquiries and written demands (including a letter dated November 12, 1986) yielded no definitive resolution.

Displeased by the bank’s failure to return her investment and the unsatisfactory explanations provided, Cruz filed a complaint for breach of contract in the Regional Trial Court of Quezon City.
She demanded the recovery of her principal P200,000.00, along with interest, moral damages (P30,000.00), exemplary damages (P20,000.00), and attorney’s fees (P25,000.00).
The bank denied any liability, maintaining that Cruz had withdrawn the investment and even instituted a third-party complaint against employee Susan Quimbo, who was declared in default without presenting any evidence.

Judge Rodolfo A. Ortiz rendered judgment in favor of Cruz, ordering the payment of the principal amount plus corresponding damages and fees, while dismissing the bank’s counterclaim and third-party complaint.
Key observations included the irregular withdrawal figure (P196,122.98) being consistent with the re-investment amount less the prepaid interest, thereby suggesting that Cruz did not actually receive the money withdrawn.
The trial court found that Cruz acted in good faith in relying on documents issued by bank personnel and that the bank’s internal irregularities were not successfully rebutted by evidence presented.
The decision was affirmed in toto on appeal by the Court of Appeals.

Whether the bank is liable for failing to deliver Cruz’s P200,000.00 investment even though it contended that the funds had been withdrawn under a new internal procedure.
Whether the Withdrawal Slip executed by Cruz was indicative of her actual withdrawal of funds or merely reflected an administrative requirement for the roll-over of her investment.
Whether the Confirmation of Sale and Debit Memo, issued by the bank’s employee on its official forms, were authentic and binding, despite the bank’s allegations to the contrary.
Whether the bank’s liability should be characterized as arising from a breach of contract versus liability under the principles of quasi-delict, particularly in relation to the acts of its agent.