GR 166878; (December, 2007) (Digest)
G.R. No. 166878 ; December 18, 2007
CITIBANK, N.A., Petitioner, vs. RUFINO C. JIMENEZ, SR., Respondent.
FACTS
Spouses Rufino Jimenez, Sr. and Basilia Templa opened a joint Foreign Currency Time Deposit with Citibank N.A. under an “and/or” account. In 1993, after their divorce, Jimenez, through Citibank’s San Francisco branch, requested the transfer of the deposit’s proceeds to his account abroad upon maturity. A letter dated March 24, 1993, was allegedly faxed to Citibank Manila on April 27, 1993. Citibank Manila denied receiving this fax, claiming it only received the request by mail on May 4, 1993. However, on May 3, 1993, Basilia Templa preterminated the account and transferred the funds to her personal dollar account with Citibank. Jimenez sued Citibank for damages, alleging negligence for allowing the pretermination despite his prior transfer request.
ISSUE
Whether Citibank was negligent in allowing the pretermination of the joint time deposit account by Basilia Templa, thereby making it liable to Rufino Jimenez, Sr. for the value of the deposit.
RULING
Yes, Citibank was negligent. The Supreme Court affirmed the findings of the lower courts, which held that Citibank failed to exercise the highest degree of diligence required in banking. The Court gave credence to Jimenez’s claim that the transfer request was faxed on April 27, 1993, prior to the pretermination on May 3. Citibank’s own letter in response to an inquiry admitted it had received a fax but had a policy of not acting on faxed customer instructions. This admission was crucial.
The legal logic centers on the bank’s fiduciary duty. While an “and/or” account generally allows either depositor to withdraw, this authority is not absolute when the bank has received a clear, prior notice of a dispute or an adverse claim from the other depositor. Upon receiving the faxed request, Citibank had a duty to exercise extraordinary care. Its failure to verify the fax, place a hold on the account, or at least inform Jimenez before honoring Basilia’s pretermination request constituted a breach of its high standard of diligence. The bank’s inaction, based on a mere internal policy, did not absolve it from liability. The negligence directly facilitated the depletion of the account to Jimenez’s detriment. The Court thus upheld the order for Citibank to pay Jimenez the value of the deposit, but deleted the award for attorney’s fees as litigation is not a source of profit.