G.R. No.

173259, July 25, 2011

Philippine National Bank, petitioner vs.FF Cruz and Company, respondent.

FACTS: This petition for review arose from a case for damages filed by FF Cruz
against PNB. Plaintiff FF Cruz has open an account at PNB-Timog Ave. Branch,
wherein its president and its secretary-treasurer were the named signatories.
Plaintiff FF Cruz, avers that PNB has been negligent to deduct the cashiers and
managers checks amounting to Php 3,260,000.00, respectively, as the same were
unauthorized and fraudulently made by the company accountant Aurea Caparas
as both the president and the secretary were out of the country at that time. The
plaintiff seeks to credit back and restore to its account the value of the checks to
which the defendant bank refused as the defendant bank alleged that it exercised
due diligence in handling the account of FF Cruz, as the application of said checks
have passed a thorough standard bank procedures and it was only after finding
that it has no infirmity that the checks were given due course. The trial court
rendered a decision against defendant bank for not calling or personally verifying
from the authorized signatories the legitimacy of the subject withdrawals
considering that they were huge amounts. For this reason, defendant PNB had the
last clear chance to prevent the unauthorized debits from the FF Cruz account.
And thus, PNB should bear the whole loss. On appeal, the Court of Appeals
affirmed the decision of the trial court with modification on the award for
damages that PNB should only pay 60% of the actual damage and the Plaintiff FF
Cruz should bear the remaining 40% for its contributory negligence by giving
authority to its company accountant to transact with defendant bank PNB.
Petitioner PNB appealed the Court of Appeals Decision.

ISSUES: Whether or not the principle of last clear chance principle is applicable to
held the defendant bank liable for damages.

RULING: The Court ruled that the finding of the appellate court that PNB failed to
make a proper verification as the managers check do not bear the signature of
the bank verifier, thus casting doubt as whether the signatures were indeed
underwent the proper verification. In view of the foregoing, the Court ruled that
PNB was negligent in handling the FF Cruz account specifically with respect to
PNBs failure to detect the forgeries in subject application for managers check
which could have prevented the loss. It further states, that PNB failed to meet the
high standard of diligence required by the circumstances to prevent the fraud,
where the banks negligence is the proximate cause of the loss and the depositor
is guilty of contributory negligence, the damage between the bank and the
depositor, a 60-40 ratio applies.

Wherefore, the petition was denied and the CAs decision is affirmed.