FACTS:

Rommel's Marketing Corporation (RMC) filed a complaint against Philippine Bank of Commerce (PBC) to recover the sum of P304,979.74. RMC entrusted cash deposits to its current accounts with PBC, but these deposits were not credited to its account and instead were deposited to the account of Bienvenido Cotas due to the alleged negligence of the bank. RMC used deposit slips prepared by RMC, and the bank would retain the original copy while the duplicate copy was returned to RMC. However, RMC's president entrusted the funds to his secretary, who would prepare duplicate copies of the deposit slips with her husband's account number, and then change the account number and write RMC's name on the duplicate slip. The bank's teller would validate and stamp both the original and the duplicate slips, retaining only the original copy. This went on for more than a year without RMC's knowledge. When RMC discovered the loss of its funds, it demanded their return from the bank, but the bank did not comply. RMC then filed a collection suit, and the trial court found the bank negligent and ordered it to pay RMC the lost deposit, plus interest, exemplary damages, attorney's fees, and costs. On appeal, the appellate court affirmed the decision but modified the awards of exemplary damages and attorney's fees.

The bank argues that the proximate cause of the loss was the negligence of RMC and its president in entrusting cash to a dishonest employee. Meanwhile, RMC maintains that the proximate cause of the loss was the negligent act of the bank's teller in validating the deposit slips presented by the employee. The court cites the law on quasi-delicts and identifies three elements: damages suffered by the plaintiff, fault or negligence of the defendant, and the connection of cause and effect between the fault or negligence and the damages incurred. The court finds that there is no dispute as to the damages suffered by RMC but the issue lies in determining the party at fault. It defines negligence as the omission to do something that a reasonable person would do or the doing of something that a prudent person would not do. Applying the Picart v. Smith case, the court concludes that the bank's teller was negligent in validating all the deposit slips presented by the employee, even when one of them was not completely accomplished, in contravention of the bank's own procedure. Thus, the court affirms that the proximate cause of the loss was the bank's negligence, not RMC's negligence in entrusting cash to a dishonest employee.

ISSUES:

1. Whether or not the bank teller was negligent in validating, officially stamping and signing all the deposit slips prepared and presented by the depositor.

2. Whether or not the bank is liable for the loss suffered by the depositor.

3. Whether the negligence of the bank teller was the proximate cause of the loss suffered by the private respondent.

4. Whether the bank can be held liable under the doctrine of "last clear chance" or "supervening negligence".

5. Whether or not the petitioners are entitled to claim reimbursement from Ms. Ma. Azucena Mabayad for the loss incurred due to her negligence as a bank teller.

6. Whether or not private respondent RMC is guilty of contributory negligence in not checking its monthly statements of account.

RULING:

1. The bank teller was found to be negligent in validating, officially stamping and signing all the deposit slips, including the duplicate copy which was incomplete. The teller failed to observe the bank's procedure of validating deposit slips and did not question the missing information in the duplicate copy. In doing so, the teller fell short of the required standard of care and caution that an ordinarily prudent person would have exercised in the same situation.

2. The bank is also held liable for the loss suffered by the depositor. The bank's lackadaisical selection and supervision of its bank teller was found to be negligent. The bank failed to properly investigate and address the teller's actions, leading to the validation of blank deposit slips. This negligence on the part of the bank was considered the proximate cause of the loss suffered by the depositor.

3. Yes, the negligence of the bank teller was the proximate cause of the loss suffered by the private respondent. The court held that the bank teller's gross and reckless negligence in validating an incomplete duplicate copy of the deposit slip provided the dishonest employee with the means to perpetrate her fraudulent scheme. Without the negligence of the bank teller, the fraudulent scheme would not have been possible.

4. Yes, the bank can be held liable under the doctrine of "last clear chance" or "supervening negligence". The court explained that even if the private respondent was negligent in entrusting cash to a dishonest employee, the bank had the last clear opportunity to prevent the loss by faithfully observing their self-imposed validation procedure. The bank's failure to do so made them the culpable party.

5. The petitioners are entitled to claim reimbursement from Ms. Ma. Azucena Mabayad for the loss incurred due to her negligence as a bank teller.

6. Private respondent RMC is guilty of contributory negligence in not checking its monthly statements of account.

PRINCIPLES:

• The existence of negligence is determined by the standard of what would be reckless, blameworthy, or negligent in the man of ordinary intelligence and prudence.

• Negligence applies when an actor fails to use reasonable care and caution that an ordinarily prudent person would have used in the same situation.

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

• Proximate cause is determined on the facts of each case and refers to the cause that, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury.

• The doctrine of "last clear chance" holds that where both parties are negligent, the one who had the last clear opportunity to avoid the harm and failed to do so is chargeable with the consequences thereof.

• Banks are expected to exercise a higher degree of diligence in dealing with their clients due to the fiduciary nature of their relationship.

• The bank is obligated to treat the accounts of depositors with the highest degree of care and to accurately record every transaction promptly.

• The bank's failure to fulfill its duty to treat the accounts of its depositors with meticulous care and fidelity may result in liability.

• Negligence of an employee can make the employer liable for damages.

• Contributory negligence of the plaintiff may mitigate the damages that may be awarded.

• The immediate and proximate cause of the injury must be the defendant's lack of due care in order for the plaintiff to recover damages.