G.R. No. 221220 , January 19, 2021
METROPOLITAN BANK AND TRUST COMPANY, PETITIONER, VS. CARMELITA CRUZ AND VILMA LOW TAY, DOING BUSINESS UNDER THE NAME AND STYLE “REPUBLIC SHOES & HANDBAG MANUFACTURING,” RESPONDENTS.

FACTS

From 1993 to 1998, respondents obtained various loans from petitioner Metrobank. Their loans were subsequently restructured, and they were made to sign blank promissory notes in bulk. From 1999 to 2004, respondents made payments, with receipts acknowledged by bank employees. In 2004, upon reviewing their records, respondents discovered a possible overpayment. Their hired accountant found a discrepancy of over P12 million between their recorded payments and Metrobank’s records, suggesting an overpayment. Respondents demanded a reconciliation and refund. Metrobank failed to provide a complete accounting and insisted on the payment of a stated balance. Respondents filed a complaint for accounting before the RTC, praying for the production of loan records and reimbursement. The RTC ordered Metrobank to render a complete accounting and furnish all loan documents. The CA affirmed the RTC decision and remanded the case for proper accounting. Metrobank filed the instant petition, arguing it had rendered a proper accounting, that producing very old documents was impossible under its five-year retention policy and relevant regulations, and that respondents were estopped by having signed subsequent promissory notes acknowledging their debt.

ISSUE

Whether Metrobank should be ordered to (1) render a full and detailed accounting of the respondents’ payments from 1993 to 2004, and (2) furnish the respondents all pertinent loan documents.

RULING

The Supreme Court DENIED the petition and AFFIRMED the CA decision. Metrobank has a fiduciary duty to account for and safeguard the records of its clients’ transactions. The nature of banking, imbued with public interest, demands high standards of integrity and performance. The fiduciary relationship obligates the bank to record and account for every single transaction accurately and to provide the client with all relevant documents upon request. Metrobank cannot evade this duty by invoking its five-year document retention policy. The Court found that Metrobank itself had previously presented documents dating back to 1993, proving that production was not impossible. Furthermore, the Anti-Money Laundering Act and the Manual of Regulations for Banks prescribe a five-year retention period for transaction records, but this does not extinguish the bank’s civil liability to a client or its duty to produce records in a pending judicial proceeding. The defense of estoppel is unavailing as respondents promptly questioned the accounting upon discovering discrepancies, and their prior acknowledgments of debt did not relieve Metrobank of its fundamental duty to render a proper accounting. The case was remanded to the RTC for the proper accounting and reception of evidence to determine the actual indebtedness.