Febtc vs. Querimit

Far East Bank and Trust Co. (FEBTC) vs. Querimit [G.R. No. 148582, Jan.
16, 2002]
Facts: 32.
Respondent Estrella Querimit opened a dollar savings account in FEBTC for
which she was issued 4 Certificates of Deposit. In 1989, respondent accompanied her
husband to the US for medical treatment. In 1993, her husband died and Estrella
Querimit returned to the Philippines. She went to petitioner FEBTC to withdraw her
deposit but she was told that her husband had withdrawn the money in deposit.
Respondent demanded payment including interests earned. Then respondent filed a
complaint upon refusal of petitioner to pay.
The trial court rendered its judgment in favor of respondent. Petitioner appealed
but the CA affirmed the trial court’s decision. It ruled that FEBTC failed to prove that
the certificates of deposit had been paid out of its funds.
Issue: Whether the FEBTC has exercise its diligence required by the nature of its
business.
Held:
The Supreme Court said that No, Petitioner FEBTC failed to exercise that degree
of diligence required by the nature of its business.
Under Article 1173 of the Civil Code, provides that “the fault or negligence of the
obligor consist in the omission of that diligence which is required by the nature of the
obligation and corresponds with the circumstances of the persons, of the time and of
the place. When negligence shows bad faith, the provisions of articles 1171 and 2201,
paragraph 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the
performance, that which is expected of a good father of a family shall be required.”
In the case at bar the business of banks is impressed with public interest, the
degree of diligence required of banks is more than that of a good father of the family or
of an ordinary business firm. The fiduciary nature of their relationship with their
depositors requires them to treat the accounts of their clients with the highest degree of
care.
A bank is under obligation to treat the accounts of its depositors with meticulous
care whether such accounts consist only of a few hundred pesos or of millions of
pesos.
Responsibility arising from negligence in the performance of every kind of

obligation is demandable. Petitioner failed to prove payment of the subject certificates
of deposit issued to the respondent and, therefore, remains liable for the value of the
dollar deposits indicated thereon with accrued interest.
Other rulings
A certificate of deposit is defined as a written acknowledgement by a bank or banker of
the receipt of a sum of money on deposit which the bank or banker promises to pay to
the depositor, to the order of the depositor, or to some other person or his order,
whereby the relation of debtor and creditor between the bank and the depositor is
created. The principle that payment, in order to discharge a debt, must be made to
someone authorized to receive it is applicable to the payment of certificates of deposit.
In this case, the certificates of deposit were clearly marked payable to “bearer”, which
means – to the “person in possession of an instrument, document of title or security
payable to bearer or indorsed in blank”. Petitioner should not have paid respondent’s
husband or any third party without requiring the surrender of the certificates of deposit.
The subject certificates of deposit until now remain unendorsed, undelivered and
unwithdrawn by respondent Estrella Querimit.
Petitioner FEBTC thus failed to exercise that degree of diligence required by the nature
of its business.
Second. The equitable principle of laches is not sufficient to defeat the rights of
respondent over the subject certificates of deposit.
Laches is the failure or neglect, for an unreasonable length of time, to do that which, by
exercising due diligence, could or should have been done earlier. It is negligence or
omission to assert a right within a reasonable time, warranting a presumption that the
party entitled to assert it either has abandoned it or declined to assert it.36
There is no absolute rule as to what constitutes laches or staleness of demand; each

case is to be determined according to its particular circumstances. The question of
laches is addressed to the sound discretion of the court and, being an equitable
doctrine, its application is controlled by equitable considerations. It cannot be used to
defeat justice or perpetrate fraud and injustice. Courts will not be guided or bound
strictly by the statute of limitations or the doctrine of laches when to do so, manifest
wrong or injustice would result.37
In this case, it would be unjust to allow the doctrine of laches to defeat the right of
respondent to recover her savings which she deposited with the petitioner. She did not
withdraw her deposit even after the maturity date of the certificates of deposit precisely
because she wanted to set it aside for her retirement. She relied on the bank's
assurance, as reflected on the face of the instruments themselves, that interest would
"accrue" or accumulate annually even after their maturity.38
Third. Respondent is entitled to moral damages because of the mental anguish and
humiliation she suffered as a result of the wrongful refusal of the FEBTC to pay her
even after she had delivered the certificates of deposit.39 In addition, petitioner FEBTC
should pay respondent exemplary damages, which the trial court imposed by way of
example or correction for the public good.40 Finally, respondent is entitled to attorney's
fees since petitioner's act or omission compelled her to incur expenses to protect her
interest, making such award just and equitable.41 However, we find the award of
attorney's fees to be excessive and accordingly reduce it to P20,000.00.42
WHEREFORE, premises considered, the present petition is hereby DENIED and the
Decision in CA-G.R. CV No. 67147 AFFIRMED, with the modification that the award of
attorney's fees is reduced to P20,000.00.

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Far East Bank and Trust Co. (FEBTC) vs. Querimit [G.R. No. 148582, Jan.

Responsibility arising from negligence in the performance of every kind of

There is no absolute rule as to what constitutes laches or staleness of demand; each

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