Case Summary (G.R. No. 141835)
Key Dates
July 15, 1977 – Presentation and fraudulent encashment of two Citytrust checks (₱850,000 and ₱900,000)
April 23, 1979 – Citytrust’s demand for restoration of cancelled checks
November 13, 1991 – RTC Manila Decision holding both parties equally liable
July 16, 1999 – CA Decision affirming RTC, applying equal–loss rule under Arts. 2179 and 1172, Civil Code
February 4, 2009 – Supreme Court Decision
Applicable Law
1987 Philippine Constitution (decision post-1990)
Republic Act No. 625 (Central Bank Law)
Republic Act No. 8791 (General Banking Law, fiduciary standard)
Civil Code of the Philippines
• Art. 1980 (simple loan governing deposits)
• Art. 2179 (contributory negligence and mitigation)
• Art. 1172 (diligence standard)
Factual Background
Citytrust maintained a demand deposit with petitioner, furnishing specimen signatures of authorized signatories and roving tellers, including Flores, who received an identification card. On July 15, 1977, Flores presented two Citytrust-drawn and properly certified checks to petitioner’s Senior Teller, Iluminada. After internal certification and accounting procedures, Iluminada stamped “Received Payment” and invited Flores to sign above the stamp—Flores signed as “Rosauro C. Cayabyab,” a forged name. The Cash Department then matched drawer signatures and released ₱1,750,000 to Flores, debiting Citytrust’s account.
Procedural History
Citytrust filed a criminal complaint for estafa against Flores; he was convicted. Citytrust also filed a civil suit against petitioner for recovery of the lost funds. The RTC found both Citytrust and petitioner negligent and equally liable. The CA affirmed, applying equal sharing of loss under Articles 2179 and 1172. Petitioner appealed to the Supreme Court.
Issue
Whether petitioner’s fiduciary duty and procedural safeguards were breached, and how loss should be allocated given Citytrust’s contributory negligence.
Ruling
The Supreme Court affirms the CA Decision with modification, allocating the loss 60% to petitioner and 40% to Citytrust.
Reasoning
Fiduciary Standard of Banks
– Deposits create a debtor-creditor (simple loan) relationship (Art. 1980).
– Banks owe depositors “high standards of integrity and performance” (1987 Constitution, Sec. 2, RA 8791).
– Diligence required exceeds that of a “good father of a family” (Art. 1172).Petitioner’s Negligence
– Teller Iluminada failed to compare the actual signature with the specimen, relying improperly on Flores’s prior transactions.
– A proper glance at the signature set would have revealed the forgery.Citytrust’s Contributory Negligenc
Case Syllabus (G.R. No. 141835)
Facts
- Under Republic Act No. 625 (old Central Bank Law), Citytrust Banking Corporation (formerly FEATI Bank) maintained a demand deposit account with the Central Bank of the Philippines (now Bangko Sentral ng Pilipinas).
- Citytrust furnished the Central Bank with specimen signatures of five authorized officers (signatories-drawers) and its roving tellers; the Bank issued security identification cards to the tellers, including Rounceval Flores.
- On July 15, 1977, Flores presented two Citytrust checks (₱850,000 and ₱900,000, respectively), duly signed and endorsed by Citytrust’s authorized officers, to Senior Teller Iluminada dela Cruz.
- After certification by the Accounting Department, Teller dela Cruz prepared a cash transfer slip, stamped both checks “Received Payment,” and asked Flores to sign above the stamp; Flores wrote “Rosauro C. Cayabyab” instead of his true name, which the teller failed to detect.
- The Cash Department officer compared the drawers’ signatures on the checks against Citytrust’s specimen signatures, found them in order, approved the transfer slip, and paid Flores ₱1,750,000, which was debited from Citytrust’s account.
- On April 23, 1979—over a year and nine months later—Citytrust informed the Central Bank that the checks had been stolen and cancelled, and demanded restoration of the amounts; the Bank refused.
- Citytrust prosecuted Flores for estafa (he was convicted) and then filed a civil complaint before the RTC of Manila for recovery of the ₱1,750,000 plus damages, alleging the Central Bank’s error in encashing the checks without proper authority or signature verification.
Procedural History
- RTC of Manila, Branch 32 (Decision, November 13, 1991): Found both Citytrust and the Central