G.R. No. 157845 September 20, 2005
Philippine National Bank vs. Norman Y. Pike

FACTS

Respondent Norman Pike, a frequent traveler to Japan, held a US dollar savings account with petitioner Philippine National Bank (PNB). In March 1993, before leaving for Japan, he allegedly secured his passbook in a locked cabinet at home. Upon his return in April 1993, he discovered a robbery, including the loss of his passbook. He later found that two unauthorized withdrawals totaling $7,500 had been made from his account by a certain Joy Davasol. Pike protested to PNB, asserting the signatures on the withdrawal slips were forgeries and demanding restitution. PNB refused, claiming the withdrawals were authorized.
PNB presented a counter-narrative, asserting that Pike and Davasol had visited the bank before Pike’s departure. PNB claimed Pike gave verbal instructions to honor withdrawals by Davasol using pre-signed slips. PNB also heavily relied on a letter dated May 6, 1993, allegedly signed by Pike, which requested the lifting of a hold order on his account and stated: “I also promise not to hold responsible the bank and its officers for the withdrawal made on my dollar savings passbook on March 19 and April 5, 1993 respectively as a result of the lost (sic) of my passbook.”

ISSUE

Whether PNB is liable for the unauthorized withdrawals from Pike’s account despite the alleged May 6, 1993 letter releasing the bank from liability.

RULING

Yes, PNB is liable. The Supreme Court affirmed the lower courts’ findings, giving greater weight to Pike’s version of events. The Court found PNB’s claim of a prior arrangement for pre-signed withdrawal slips to be uncorroborated and improbable. Crucially, the Court held the May 6, 1993 letter to be inadmissible and of no probative value. PNB failed to authenticate the letter’s signature. Pike consistently denied writing it, and PNB did not present it during the trial for comparison or verification, nor did they call a handwriting expert. The bank’s failure to prove the letter’s genuineness was fatal to its defense.
The legal logic rests on the fiduciary nature of the bank-depositor relationship. A bank is bound to exercise the highest degree of diligence in protecting its client’s funds. By honoring withdrawals based on forged signatures, PNB failed in this duty. The relationship is ultimately one of debtor-creditor; the bank has the obligation to pay only to the depositor or upon his proper order. Since the withdrawals were made via forgery, there was no valid order from the depositor, and PNB must bear the loss. The Court sustained the award of actual damages for the unauthorized amount, with legal interest, and moral and exemplary damages due to PNB’s gross negligence and bad faith in handling the account and its spurious defense.