G.R. No. 248821 - Philippine National Bank vs. Spouses Caguimbal

Philippine National Bank (PNB) filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court.
The petition challenges the Decision dated February 19, 2019, and the Resolution dated July 1, 2019, of the Court of Appeals (CA) in CA-G.R. CV No. 04755-MIN.
The CA's Decision set aside the Regional Trial Court (RTC) ruling that dismissed the respondents' complaint and ordered PNB to pay moral damages, exemplary damages, and attorney's fees.

Respondent Vivian Caguimbal was a sub-contractor for logs and delivered logs to Baganga Plywood Corporation (Baganga Ply).
Baganga Ply issued six checks totaling P3,494,129.50 to Vivian, which were drawn on PNB.
A Stop Payment Order (SPO) was issued by Baganga Ply on the checks, which was confirmed by PNB when Vivian's daughter inquired about the checks.
Despite the SPO, one check for P1,000,000.00 was mistakenly cleared and credited to the respondents' account, leading to subsequent withdrawals.

After the deposit of the checks, five were returned due to the SPO, but the P1,000,000.00 check remained in the account.
Respondents assumed the SPO had been lifted when they saw the amount still credited.
On September 1, 2010, after a withdrawal, the account balance dropped significantly, revealing the bank had debited the P1,000,000.00 due to the SPO.
PNB informed Vivian of the SPO only after the amount had been debited, leading to the filing of a complaint by the respondents.

The RTC dismissed the complaint, ruling that respondents failed to prove that the SPO was lifted and that PNB did not violate any rights of the respondents.
The RTC also noted that Baganga Ply should have been included as a party in interest.

The CA partially granted the appeal, ruling that while PNB had the right to debit the account, it acted with gross negligence by doing so without prior notice.
The CA awarded moral damages, exemplary damages, and attorney's fees to the respondents.

PNB contended that the CA misapprehended facts by ruling that it acted arbitrarily in debiting the account.
PNB argued that the CA's decision to award damages and attorney's fees was contrary to law and jurisprudence.

The Supreme Court found the petition unmeritorious, emphasizing the need for banks to exercise a high degree of diligence in handling accounts.
The Court reiterated that banks have a fiduciary duty to their clients, requiring meticulous care in managing accounts.

PNB admitted to mistakenly clearing the check despite the SPO, indicating negligence in its operations.
The Court criticized PNB for failing to monitor the status of the check and for not promptly informing the respondents of the error.

The Court upheld the CA's award of moral damages, noting the emotional distress caused to the respo...continue reading