G.R. No. 223694 , February 10, 2021
REMEDIOS T. BANTA, PETITIONER, VS. EQUITABLE BANK, INC. (NOW BDO UNIBANK, INC.), ANTONIO BANTA, ARMANDO BANTA, SONIA BANTA, ERLINDA TAN AND THE REGISTER OF DEEDS OF MALABON CITY, RESPONDENTS.

FACTS

Petitioner Remedios T. Banta and respondent Antonio Banta were married but had been separated since 1991. In June 1997, petitioner discovered that Antonio, using her forged signature, had executed a Deed of Real Estate Mortgage dated September 1, 1994, in favor of Equitable Bank (now BDO Unibank, Inc.) over three of their co-owned properties in Malabon City to secure a P1,000,000.00 loan. She further uncovered that on May 11, 1995, Antonio, along with respondents Armando Banta, Sonia Banta, and Erlinda Tan, executed an “Amendment to Real Estate Mortgage” with additional collateral, again with petitioner’s forged signature, covering five more of their co-owned properties to secure loans totaling P4,500,000.00. The forgery was established by unrebutted expert evidence from the PNP and NBI. Petitioner filed a Complaint for Annulment of Deed of Real Estate Mortgage with Damages. The Regional Trial Court declared the “Amendment to Real Estate Mortgage” null and void due to the forgery and held the Bank negligent for failing to verify the authenticity of petitioner’s signature, ordering Antonio and the Bank to jointly and severally pay attorney’s fees. The Court of Appeals modified the decision, awarding moral and exemplary damages and increased attorney’s fees against Antonio but absolved the Bank from joint and several liability, finding no showing of the Bank’s bad faith or conspiracy with Antonio. Petitioner assailed this exculpation of the Bank.

ISSUE

Whether the Bank should be held jointly and severally liable with Antonio for payment of moral and exemplary damages, and attorney’s fees to the petitioner.

RULING

Yes. The Supreme Court granted the petition and modified the Court of Appeals’ decision. The Bank, as a banking institution imbued with public interest, is required to exercise extraordinary diligence in its transactions, including ascertaining the genuineness of signatures and the authority of mortgagors. The Bank failed to exercise this degree of diligence; it did not verify the authenticity of petitioner’s signature in the “Amendment to Real Estate Mortgage,” offered no proof that its employees dealt with petitioner, and demonstrated no steps taken to ascertain her identity or signature. This failure constitutes negligence. Consequently, the Bank is not a mortgagee in good faith. Following jurisprudence, a bank’s failure to observe the required diligence renders it jointly and severally liable for damages with the forger. The award of moral damages, exemplary damages, and attorney’s fees is proper as petitioner suffered psychological trauma and was compelled to litigate to protect her property rights. The Supreme Court held Equitable Bank (now BDO Unibank, Inc.) jointly and severally liable with Antonio Banta to pay petitioner P300,000.00 as moral damages, P100,000.00 as exemplary damages, and P100,000.00 as attorney’s fees. The rest of the RTC’s disposition was affirmed.