G.R. No. 199562 . January 16, 2019.
BANK OF THE PHILIPPINE ISLANDS and ANA C. GONZALES, Petitioners, vs. SPOUSES FERNANDO V. QUIAOIT and NORA L. QUIAOIT, Respondents.

FACTS

Respondent Fernando Quiaoit, through a representative, encashed a US$20,000 check at petitioner BPI’s Greenhills branch. The withdrawn US$100 bills were allegedly not counted at the counter and were placed in an envelope without a receipt listing the serial numbers. The spouses used part of the money for travel abroad. While in Madrid, several banks and establishments refused some of the bills for being counterfeit, causing respondent Nora Quiaoit public embarrassment and threats of police action. Upon their return, they surrendered 44 suspect bills to BPI’s branch manager, Ana Gonzales, who acknowledged receipt but later claimed the bills lacked BPI’s identifying “chapa” mark and thus did not originate from the bank. BPI refused to refund the US$4,400.
BPI defended its procedures, asserting that all foreign currency withdrawals are meticulously inspected, marked with a “chapa,” and checked with a counterfeit detector under the manager’s supervision. Its investigation concluded the surrendered bills, lacking the mark, came from another source.

ISSUE

Whether BPI is liable for damages for issuing counterfeit US dollar bills to its client.

RULING

Yes. The Supreme Court affirmed the findings of the Court of Appeals and the Regional Trial Court, holding BPI liable for negligence. Banks are bound by the highest degree of diligence, not the ordinary diligence required in commercial transactions. BPI failed to exercise this extraordinary diligence. While it claimed a policy of marking bills with a “chapa,” it did not follow the more reliable and prudent banking practice of listing the serial numbers of the high-value foreign currency bills upon withdrawal. This lapse deprived BPI of the definitive means to prove that the counterfeit bills presented by the respondents were not the same ones it dispensed.
The Court applied the doctrine of last clear chance. BPI had the final opportunity to prevent the harm by exercising due diligence, such as recording the serial numbers, which would have conclusively traced the bills’ provenance. Its failure to do so was the proximate cause of the respondents’ loss and injury. Consequently, BPI is liable for actual damages equivalent to the US$4,400 in surrendered counterfeit bills. The award of moral damages is sustained due to the serious anxiety, embarrassment, and humiliation suffered by the spouses. However, exemplary damages are deleted as the bank’s negligence was not attended by malice or bad faith. Attorney’s fees are also upheld as the respondents were compelled to litigate.