Westmont Bank vs Dela Rosa-Ramos
684 SCRA 429 [G.R. No. 160260 October 24, 2012]
Facts: From 1986, respondent Myrna Dela Rosa-Ramos (Dela Rosa-Ramos) maintained a checking/current account with the United Overseas Bank Philippines3 (Bank) at the latter’s Sto. Cristo Branch, Binondo, Manila. In her several transactions with the Bank, Dela Rosa-Ramos got acquainted with its Signature Verifier, respondent Domingo Tan (Tan). In the course of their acquaintance, Tan offered Dela Rosa-Ramos a “special arrangement” wherein he would finance or place sufficient funds in her checking/current account whenever there would be an overdraft or when the amount of said checks would exceed the balance of her current account. It was their arrangement to make sure that the checks she would issue would not be dishonored. Tan offered the service for a fee of P50.00 a day for every P40,000.00 he would finance. This financier-debtor relationship started in 1987 and lasted until1998. In order to guarantee payment for such funding, Dela Rosa-Ramos issued postdated checks covering the principal amount plus interest as computed by Tan on specified date. There were also times when she just paid in cash. According to Dela Rosa-Ramos, Check No. 467322 for P200,000.00 was a “stale” guarantee check. The check was originally dated August 28, 1987 but was altered to make it appear that it was dated May 8, 1988. Tan then deposited the check in the account of the other respondent, William Co (Co), despite the obvious superimposed date. As a result, the amount of P200,00.00 or the value indicated in the check was eventually charged against her checking account. Check Nos. 510290 and 613307 were both dishonored for insufficient funds. When Dela Rosa-Ramos got the opportunity to confront Co regarding their deposit of the two checks, the latter disclosed that her two checks were deposited in his account to cover for his P432,500.00 cash which was taken by Tan. Then, with a threat to expose her relationship with a married man, Tan and Co were able to coerce her to replace the two above-mentioned checks with Check No. 59864812 checks. in the amount of P432,500.00 which was equivalent to the total amount of the two dishonored Check No. 613306 for P290,595.00, was also undated when delivered to Tan who later placed the date, July 4, 1988. Dela Rosa-Ramos pointed out that as of July 5, 1988, her checking account had P121,989.66 which was insufficient to answer for the value of said check. A check of a certain Lee See Bin in the amount of P170,000.00 was, however, deposited in her checking account. As a result, Tan was able to encash Check No. 613306 and withdrew her P121,989.66 balance. Later, Dela Rosa-Ramos found out that the Lee See Bin Check was not funded because the Bank’s bookkeeper demanded from her the return of the deficiency.
Issue: Whether or not the Westmont Bank is liable for the altered checks.
Held: Yes. Defendant-bank is not faultless in the irregularities of its signature-verifier. In the first place, it should have readily rejected the obviously altered plaintiff’s P200,000.00-check, thus, avoid its unwarranted deposit in defendant-Co’s account and its corollary loss from plaintiff’s deposit, had its other employees, even excepting TAN, performed their duties efficiently and well.
A careful scrutiny of the evidence shows that indeed the date of Check No. 467322 had been materially altered from August 1987 to May 8, 1988 in accordance with Section 125 of the Negotiable Instruments Law. It is worthy to take note of the fact that such alteration was not countersigned by the drawer to make it a valid correction of its date as consented by its drawer as the standard operating procedure of the appellant bank in such situation as admitted by its Sto. Cristo Branch manager, Mabini Z. Millan.
The banking system has become an indispensable institution in the modern world and plays a vital role in the economic life of every civilized society – banks have attained a ubiquitous presence among the people, who have come to regard them with respect and even gratitude and most of all, confidence, and it is for this reason, banks should guard against injury attributable to negligence or bad faith on its part.
Considering that banks can only act through their officers and employees, the fiduciary obligation laid down for these institutions necessarily extends to their employees. Thus, banks must ensure that their employees observe the same high level of integrity and performance for it is only through this that banks may meet and comply with their own fiduciary duty. It has been repeatedly held that “a bank’s liability as an obligor is not merely vicarious, but primary” since they are expected to observe an equally high degree of diligence, not only in the selection, but also in the supervision of its employees. Thus, even if it is their employees who are negligent, the bank’s responsibility to its client remains paramount making its liability to the same to be a direct one.