PHILIPPINE SAVINGS BANK VS. CHOWKING FOOD CORPORATION

PHILIPPINE SAVINGS BANK (PSBank) VS. CHOWKING FOOD CORPORATION (Chowking)
G.R. No. 177526, July 04, 2008
Petition for review on certiorari of the Decision of the CA
REYES, R.T., J.:

Facts: The RTC ordered petitioner PSBank and its Bustos Branch Head, Erlinda O. Santos, to reimburse respondent Chowking the amount corresponding to five (5) illegally encashed checks. The total amount of the subject checks reached P556,981.86. On the respective due dates of each check, Chowking's acting accounting manager, Rino T. Manzano, endorsed and encashed said checks with the Bustos branch of respondent PSBank. All the five checks were honored by defendant Santos, even with only the endorsement of Manzano approving them. The signatures of the other authorized officers of respondent corporation were absent in the five (5) checks, contrary to usual banking practice. Unexpectedly, Manzano absconded with and misappropriated the check proceeds. When Chowking found out Manzano's scheme, it demanded reimbursement from PSBank. When PSBank refused to pay, Chowking filed a complaint for a sum of money with damages before the RTC. In its Answer, petitioner did not controvert the foregoing facts, but denied liability to respondent for the encashed checks. RTC rendered judgment in favor of respondent. On motion for reconsideration of the plaintiff, the RTC reversed its earlier decision and dismissed Chowking's complaint. In its appeal, CA granted the petition reinstating the first decision of the RTC.

Issue: WON banks' required diligence is that of pater familias.

Ruling: CA decision affirmed. Petition Denied.

It cannot be over emphasized that the banking business is impressed with public interest. Of paramount importance is the trust and confidence of the public in general in the banking industry. Consequently, the diligence required of banks is more than that of a Roman pater familias or a good father of a family. The highest degree of diligence is expected. In its declaration of policy, the General Banking Law of 2000 requires of banks the highest standards of integrity and performance. Needless to say, a bank is "under obligation to treat the accounts of its depositors with meticulous care. The fiduciary nature of the relationship between the bank and the depositors must always be of paramount concern.

"Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done....Art. 2180. The obligation imposed by Art. 2176 is demandable not only for one's own acts or omissions but also for those of persons for whom one is responsible.

x x x xEmployers shall be liable for the damage caused by their employees and household helpers acting within the scope of their assigned tasks even though the former are not engaged in any business or activity.

x x x xThe responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage."x x x

However, with banks like PSB, the degree of diligence required is more than that of a good father of a family considering that the business of banking is imbued with public interest due to the nature of its functions. Highest degree of diligence is needed which PSB, in this case, failed to observe. x x x Its argument that it should no be held responsible for the negligent acts of Santos because those were independent acts x x x perpetrated without its knowledge and consent is without basis in fact and in law. Assuming that PSB did not err in hiring Santos for her position, its lack of supervision over her made it solidarily liable for the unauthorized encashment of the checks involved. In the supervision of employees, the employer must formulate standard operating procedures, monitor their implementation and impose disciplinary measures for the breach thereof. The appellee, in this case, presented no evidence that it formulated rules/guidelines for the proper performance of functions of its employees and that it strictly implemented and monitored compliance therewith. x x x