8/12/2019 The Consolidated Bank Case

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THE CONSOLIDATED BANK and TRUST CORPORATION

vs.

COURT OF APPEALS and L.C. DIAZ and COMPANY, CPAs

FACTS:

LC Diaz and Co. CPAs opened a saving account with SolidBank and in one incident,

messenger Calapre was instructed to deposit money on the said bank. Calapre left the

passbook in Solid bank because he had transaction to do in Allied Bank but when Calapre

returned to retrieve the passbook, Teller No. 6 informed him that said passbook was claimed by

other person. Personnel of LC Diaz inquired with the Solid Bank and gave the same answer.

LC Diaz then after called and wrote a formal latter to Solid bank to stop any transaction

using the lost passbook. It was also on the same day that L.C. Diaz learned of the unauthorized

withdrawal the day before, 14 August 1991, of P300,000 from its savings account. The

withdrawal slip for the P300,000 bore the signatures of the authorized signatories of L.C. Diaz,

namely Diaz and Rustico L. Murillo. The signatories, however, denied signing the withdrawal

slip. A certain Noel Tamayo received the P300,000.

As a result, L.C. Diaz filed a Complaint for Recovery of a Sum of Money against Solidbank

with the Regional Trial Court. After trial, the trial court rendered a decision absolving

Solidbank and dismissing the complaint.

L.C. Diaz then appealed to the Court of Appeals and the latter issued its Decision

reversing the decision of the trial court.

ISSUE:

Whether or not the Solidbank is liable for breach of contract due to negligence, or culpa

contractual.

RULING:

Yes, the bank is liable for breach of the savings deposit agreement due to negligence.

When Calapre left, the passbook was still in the hands of the teller of Solidbank for processing

the deposit. Solidbanks tellers must exercise a high degree of diligence in insuring that they

return the passbook only to the depositor or his authorized representative. The tellers know, orshould know, that the rules on savings account provide that any person in possession of the

passbook is presumptively its owner. If the tellers give the passbook to the wrong person, they

would be clothing that person presumptive ownership of the passbook, facilitating

unauthorized withdrawals by that person. For failing to return the passbook to Calapre, the

authorized representative of L.C. Diaz, Solidbank and Teller No. 6 presumptively failed to

observe such high degree of diligence in safeguarding the passbook, and in insuring its return to

the party authorized to receive the same. Solidbank is bound by the negligence of its employees

under the principle of respondeat superioror command responsibility.

However, L.C. Diaz was guilty of contributory negligence in allowing a withdrawal slip

signed by its authorized signatories to fall into the hands of an impostor Thus, the liability of

Solidbank should be reduced.