Citystate Savings Bank V. Teresita Tobias and Shellidie Valdez G.R. No. 227990, March 07, 2018 Reyes, JR., J
Citystate Savings Bank V. Teresita Tobias and Shellidie Valdez G.R. No. 227990, March 07, 2018 Reyes, JR., J
Citystate Savings Bank V. Teresita Tobias and Shellidie Valdez G.R. No. 227990, March 07, 2018 Reyes, JR., J
FACTS
ISSUE
Can the Citystate Bank be held solidarily liable with Robles due to negligence?
RULING
Yes. The business of banking is one imbued with public interest. As such,
banking institutions are obliged to exercise the highest degree of diligence as
well as high standards of integrity and performance in all its transactions. The
law expressly imposes upon the banks a fiduciary duty towards its clients and
to treat in this regard the accounts of its depositors with meticulous care. In
light of these, banking institutions may be held liable for damages for failure to
exercise the diligence required of it resulting to contractual breach or where the
act or omission complained of constitutes an actionable tort. While it is clear
that the proximate cause of respondents' loss is the misappropriation of
Robles, petitioner is still liable under Article 1911 of the Civil Code, to wit: Art.
1911. Even when the agent has exceeded his authority, the principal is
solidarity liable with the agent if the former allowed the latter to act as though
he had full powers.
A bank is liable for wrongful acts of its officers done in the interests of the bank
or in the course of dealings of the officers in their representative capacity but
not for acts outside the scope of their authority. A bank holding out its officers
and agent as worthy of confidence will not be permitted to profit by the frauds
they may thus be enabled to perpetuate in the apparent scope of their
employment; nor will it be permitted to shirk its responsibility for such frauds,
even though no benefit may accrue to the bank therefrom. Accordingly, a
banking corporation is liable to innocent third persons where the
representation is made in the course of its business by an agent acting within
the general scope of his authority even though, in the particular case, the agent
is secretly abusing his authority and attempting to perpetrate a fraud upon his
principal or some other person, for his own ultimate benefit.