G.R. No. 173259; July 25, 2011
PHILIPPINE NATIONAL BANK, Petitioner, vs. F.F. CRUZ and CO., INC., Respondent.

FACTS

Respondent F.F. Cruz & Co., Inc. (FFCCI) maintained savings/current and dollar savings accounts with petitioner Philippine National Bank (PNB) at its Timog Avenue Branch. The authorized signatories were its President, Felipe Cruz, and Secretary-Treasurer, Angelita A. Cruz. Both were out of the country at overlapping periods in 1995. During their absence, two applications for manager’s checks bearing Felipe Cruz’s signature were presented to and approved by PNB: one on March 27, 1995 for ₱9,950,000.00 payable to Gene B. Sangalang, and another on April 24, 1995 for ₱3,260,500.31 payable to Paul Bautista. The amounts were debited from FFCCI’s combo account. Upon Angelita Cruz’s return and examination of the bank statements, FFCCI discovered the deductions, claimed they were unauthorized and fraudulent, and demanded PNB to credit back the amounts. PNB refused, prompting FFCCI to file a suit for damages against PNB and its own accountant, Aurea Caparas. The Regional Trial Court ruled that both FFCCI and PNB were negligent, but held PNB solely liable due to having the “last clear chance” to prevent the loss, ordering it to pay FFCCI the full debited amount. The Court of Appeals affirmed but modified the decision, finding both parties negligent and allocating the loss on a 60-40 ratio, with PNB bearing 60% and FFCCI 40%. FFCCI’s separate petition (G.R. No. 173278) was denied by the Supreme Court, which upheld its contributory negligence. The present petition concerns PNB’s liability.

ISSUE

Whether the Court of Appeals seriously erred when it found PNB guilty of negligence.

RULING

No. The Supreme Court affirmed the ruling of the Court of Appeals. PNB was found guilty of negligence. The Court held that PNB failed to follow its standard verification procedure, as the applications for the manager’s checks did not bear the signature of the bank verifier, casting doubt on whether the signatures were properly examined. PNB’s reliance on the testimonies of its officers to prove due diligence was unconvincing, as they were interested parties and oral testimony is less reliable than documentary evidence. Expert testimony from the NBI also indicated noticeable differences between the forged signatures and the genuine ones on file. The negligence of PNB was the proximate cause of the loss. However, as finally settled in G.R. No. 173278, FFCCI was guilty of contributory negligence for clothing its accountant with apparent authority and failing to timely examine its bank statements. Applying precedents, where both parties are at fault but the bank’s negligence is the proximate cause, the greater proportion of the loss shall be borne by the bank. Thus, the 60-40 allocation of damages was proper. The petition was denied.