G.R. No. 108957 June 14, 1993
PRUDENTIAL BANK, petitioner, vs. THE COURT OF APPEALS, AURORA CRUZ, respondents.

FACTS

Private respondent Aurora F. Cruz, with her sister as co-depositor, invested P200,000.00 in Central Bank bills with the Prudential Bank on June 23, 1986, for 63 days at 13.75% annual interest. The amount was withdrawn from their savings account, with the difference representing pre-paid interest. The transaction was evidenced by a Confirmation of Sale and a Debit Memo issued by bank employee Susan Quimbo. Upon maturity on August 25, 1986, Cruz returned to roll-over her investment. Quimbo prepared a Credit Memo crediting P200,000.00 to Cruz’s passbook and a Debit Memo for the re-investment amount. Cruz was asked to sign a Withdrawal Slip for P196,122.98, which Quimbo explained was a new bank requirement for the roll-over. Cruz later received another Confirmation of Sale and Debit Memo. When Cruz sought to withdraw her money on October 27, 1986, the bank informed her the investment appeared to have been withdrawn by her on August 25, 1986, and the documents issued by Quimbo were not on file. Quimbo was unavailable. Despite demands, the bank denied liability, insisting Cruz had withdrawn her investment. Cruz filed a complaint for breach of contract. The bank filed a third-party complaint against Quimbo but did not present evidence against her. The Regional Trial Court ruled in favor of Cruz, ordering the bank to pay the principal with interest, moral damages, exemplary damages, and attorney’s fees. The Court of Appeals affirmed the decision.

ISSUE

Whether the bank is liable for breach of contract for its failure to deliver Cruz’s investment upon maturity, based on the acts of its employee, Susan Quimbo.

RULING

Yes. The Supreme Court denied the petition and affirmed the appealed decision. The bank is liable for breach of contract. The findings of the lower courts that Cruz did not actually withdraw the money but signed the Withdrawal Slip as part of the bank’s new roll-over procedure are supported by evidence. The amount on the slip exactly matched the re-investment amount after deducting pre-paid interest. The Confirmation of Sale and Debit Memo issued on the bank’s official forms by its employee bound the bank. Cruz had the right to presume Quimbo’s authority. The bank’s liability is contractual, arising from its failure to deliver the matured investment pursuant to the Confirmation of Sale. The principal is liable for obligations contracted by the agent within the scope of authority. The bank acted in bad faith by unjustly withholding the money, warranting awards for moral and exemplary damages.