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PILIPINAS BANK v. CA

FACTS:

Florencio Reyes issued postdated checks to Winner Industrial Corporation and Vicente Tui as payment for shoe materials and rubber shoes. Reyes requested the manager of PCIB Money Shop to withdraw P32,000 from his savings account and deposit it to his current account with Pilipinas Bank. The deposit slip was completed with the name Florencio Reyes and the current account number '815'. However, the bank employee mistook it to be for Florencio Amador, who owned the listed account number, and posted the deposit in Amador's account. The checks were subsequently dishonored and re-deposited but still could not be cleared. Reyes realized the error and demanded payment in cash for the face value of the dishonored checks. The bank then transferred the P32,000 deposit to Reyes' account. The trial court held the bank liable for damages, and the respondent court modified the amount of damages awarded. The bank employee's negligence was found to be the proximate cause of the injury to Reyes. Therefore, the bank was ordered to pay moral damages and attorney's fees. The bank argued that it should not be held liable, but the Supreme Court found no merit in the petition and affirmed the decision of the respondent court.

ISSUES:

  1. Whether the negligence of the petitioner's employee in erroneously posting the cash deposit of the private respondent in the name of another depositor was the proximate cause of the injury.

  2. Whether the petitioner is liable for moral damages and attorney's fees.

RULING:

  1. Yes, the negligence of the petitioner's employee in erroneously posting the cash deposit of the private respondent in the name of another depositor was the proximate cause of the injury. The employee failed to exercise the required level of care in performing their duties, leading to the dishonoring of the checks issued by the private respondent, which resulted in damages.

  2. Yes, the petitioner is liable for moral damages and attorney's fees. Despite the absence of malice and bad faith, the petitioner's negligence caused anxiety, embarrassment, and humiliation to the private respondent, making them entitled to recover reasonable moral damages. The private respondent was also compelled to litigate to protect their interest, justifying the award of attorney's fees.

PRINCIPLES:

  • To apply Article 2179 of the Civil Code, it must be established that the plaintiff's own negligence was the immediate and proximate cause of their injury.

  • Proximate cause is defined as any cause that, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the result complained of and without which the injury would not have occurred.

  • The bank is not expected to be infallible, but it must bear the blame for not discovering the mistake of its teller despite established procedures requiring careful checking and counterchecking of papers and bank books.

  • Negligence by the bank in failing to exercise due care can lead to liability for moral damages, even in the absence of malice and bad faith.

  • The award of reasonable attorney's fees is proper when the litigant is compelled to litigate to protect their interest.