G.R. No. 97626, March 14, 1997
Philippine Bank of Commerce (now PCIB), et al., Petitioners, vs. The Court of Appeals and Rommel’s Marketing Corp., Respondents.

FACTS

This case involves the liability of a bank for losses suffered by a corporate depositor, Rommel’s Marketing Corporation (RMC), due to the fraudulent acts of its own employee, Irene Yabut. Yabut, entrusted with depositing RMC’s funds, engaged in a scheme from May 1975 to July 1976. She would prepare deposit slips crediting the funds to her husband’s account with the Philippine Bank of Commerce (PBC, now PCIB). The bank teller, following standard procedure, would validate both the original and duplicate copies of the slip after verifying the cash and account details. Yabut, however, would leave the account name on the duplicate copy blank. After validation, she would tamper with this duplicate, writing in RMC’s name and altering the account number to match RMC’s, thereby creating a falsified record for her employer. RMC sued the bank for damages, and the Court of Appeals held the bank liable based on the teller’s negligence in validating an incomplete duplicate slip.

ISSUE

Whether the bank’s act of validating the incomplete duplicate deposit slip is the proximate cause of RMC’s financial loss, thereby making the bank liable for damages.

RULING

In his dissenting opinion, Justice Padilla argues that the bank is not liable, as the proximate cause of the loss was the criminal act of RMC’s own employee, Irene Yabut, not the bank’s validation. The legal logic centers on the determination of proximate cause and the application of the “last clear chance” doctrine. Proximate cause is that which, in a natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury. Here, the damage occurred the moment Yabut deposited RMC’s funds into her husband’s account, an act completed by the bank’s posting and validation based on the original slip which was fully and correctly filled out for that wrongful account. The subsequent validation of the duplicate slip, even if incomplete, was not the cause of the misappropriation but merely a remote condition that Yabut later exploited to conceal her crime through independent falsification.
Furthermore, the dissent applies the “last clear chance” doctrine, which requires that the defendant’s negligence must be subsequent to the plaintiff’s and must be the last opportunity to avert the harm. RMC had the last clear chance to discover the fraud through the monthly bank statements sent by PCIB. RMC admitted it did not normally check these statements. Had it exercised ordinary diligence in reviewing them, it could have detected the discrepancies and prevented continued losses. Thus, RMC’s own negligence was the immediate and proximate cause of its injury. The bank teller’s act was performed in good faith on a facially regular transaction, with no proof of collusion, and the bank fulfilled its duty by sending statements. Therefore, the petition should be granted, absolving the bank of liability.