G.R. No. 170942; August 28, 2013
COMSAVINGS BANK (NOW GSIS FAMILY BANK), PETITIONER, vs. SPOUSES DANILO AND ESTRELLA CAPISTRANO, RESPONDENTS.

FACTS

Respondents Spouses Danilo and Estrella Capistrano, owners of a residential lot in Bacoor, Cavite, entered into a construction contract with GCB Builders to build a house. To finance this, they applied for a loan under the government’s Unified Home Lending Program (UHLP) through petitioner Comsavings Bank, an accredited NHMFC originator. Their loan for ₱303,450 was approved. On July 2, 1992, as part of the bank’s requirements, respondent Estrella Capistrano pre-signed a certificate of house completion and acceptance, despite the house being unbuilt. Between August and October 1992, Comsavings Bank released a total of ₱265,000 to GCB Builders as construction cost. By late 1992, the house remained unfinished. In 1993, GCB Builders demanded additional payment. Respondents then discovered that their loan proceeds had been fully released by NHMFC to Comsavings Bank in April 1993, and they were being demanded to start amortization payments. An inspection in August 1993 revealed the house was still incomplete, occupied by a tenant, and lacking numerous fixtures. Respondents sued GCB Builders, Comsavings Bank, and NHMFC for breach of contract and damages. The RTC found in favor of the respondents, a decision affirmed with modifications by the Court of Appeals. Comsavings Bank appealed.

ISSUE

Whether petitioner Comsavings Bank is liable for damages to the respondents for its actions in relation to their UHLP loan and the unfinished construction of their house.

RULING

Yes, the Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals, holding Comsavings Bank liable for damages. The Court ruled that as a banking institution and an originating bank for the UHLP, Comsavings Bank owed the respondents a duty to observe the highest degree of diligence and a high standard of integrity and performance, its business being imbued with public interest. The bank was negligent and acted in bad faith. It required the respondents to pre-sign a certificate of house completion and acceptance before any construction began and before the loan was even approved, which was a deceptive practice. It then submitted this pre-signed certificate to NHMFC to facilitate the release of the full loan proceeds, despite being aware that the house was far from complete. The bank failed in its duty to verify the actual status of the construction before causing the release of the funds. This negligence directly contributed to the respondents’ injury—being obligated to pay for a loan on a non-existent or incomplete house. The bank’s liability is separate from that of the contractor (GCB Builders). The Court upheld the award of actual damages (₱25,000), moral damages (₱200,000), exemplary damages (₱50,000), and attorney’s fees (₱30,000) against Comsavings Bank, solidarily with GCB Builders.