4 Citytrust Banking vs. Cruz

G.R. No. 157049. August 11, 2010.
*
CITYTRUST BANKING CORPORATION (now Bank of the
Philippine Islands), petitioner, vs. CARLOS ROMULO N.
CRUZ, respondent.
Banks and Banking; A banking institution has the direct

obligation to supervise very closely the employees handling its
depositors’ accounts, and should always be mindful of the
fiduciary nature of its relationship with the depositors—such
relationship requires it and its employees to record accurately
every single transaction, and as promptly as possible, considering
that the depositors’ accounts should always reflect the amounts of
money the depositors could dispose of as they saw fit, confident
that, as a bank, it would deliver the amounts to whomever they
directed.—The petitioner, being a banking institution, had the
direct obligation to supervise very closely the employees handling
its depositors’ accounts, and should always be mindful of the
fiduciary nature of its relationship with the depositors. Such
relationship required it and its employees to record accurately
every single transaction, and as promptly as possible, considering
that the depositors’ accounts should always reflect the amounts of
money the depositors could dispose of as they saw fit, confident
that, as a bank, it would deliver the amounts to whomever they
directed. If it fell short of that obligation, it should bear the
responsibility for the consequences to the depositors, who, like the
respondent, suffered particular embarrassment and disturbed
peace of mind from the negligence in the handling of the accounts.
Same; The failure of a bank to exercise diligence and
meticulousness warrants its liability for exemplary damages and
for reasonable attorney’s fees.—The CA properly affirmed the
RTC’s award of exemplary damages and attorney’s fees. It is
never overemphasized that the public always relies on a bank’s
profession of diligence and meticulousness in rendering
irreproachable service. Its failure to exercise diligence and
meticulousness warranted its liability for exemplary damages and
for reasonable attorney’s fees.
_______________
* THIRD DIVISION.

23
VOL. 628, AUGUST 10, 2010 23

Citytrust Banking Corporation vs. Cruz
PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.
Gonzaga Law Office for petitioner.
Eliseo M. Cruz for respondent.

RESOLUTION
BERSAMIN, J.:
Under review is the decision promulgated on October 8,
2002 in C.A.-G.R. CV No. 48928,1 whereby the Court of
Appeals (CA) affirmed the decision dated January 13, 1995
of the Regional Trial Court (RTC), Branch 91, in Quezon
City,2 finding the petitioner liable to pay to the respondent
moral damages of P100,000.00, exemplary damages of
P20,000.00, and attorney’s fees of P20,000.00.
In the time material to the case, the respondent, an
architect and businessman, maintained savings and
checking accounts at the petitioner’s Loyola Heights
Branch. The savings account was considered closed due to
the oversight committed by one of the latter’s tellers. The
closure resulted in the extreme embarrassment of the
respondent, for checks that he had issued could not be
honored although his savings account was sufficiently
funded and the accounts were maintained under the
petitioner’s check-o-matic arrangement (whereby the
current account was maintained at zero balance and the
funds from the savings account were automatically trans-
_______________
1 Rollo, pp. 39-49; penned by Associate Justice Danilo B. Pine (retired),

with Associate Justice Ruben T. Reyes (later a Member of the Court, since
retired) and Associate Justice Andres B. Reyes, Jr. (now Presiding Justice
of the Court of Appeals) concurring.
2 Id., at pp. 56-64; penned by then Presiding Judge Marina L. Buzon
(later an Associate Justice of the Court of Appeals).
24
24 SUPREME COURT REPORTS ANNOTATED

ferred to the current account to cover checks issued by the

depositor like the respondent).
Unmoved by the petitioner’s apologies and the
adjustment made on his accounts by its employees, the
respondent sued in the RTC to claim damages from the
petitioner.
After trial, the RTC ruled in the respondent’s favor, and
ordered the petitioner to pay him P100,000.00 as moral
damages, P20,000.00 as exemplary damage, and
P20,0000.00 as attorney’s fees. The RTC found that the
petitioner had failed to properly supervise its teller; and
that the petitioner’s negligence had made the respondent
suffer serious anxiety, embarrassment and humiliation,
entitling him to damages.3
The petitioner appealed to the Court of Appeals (CA),
arguing that the RTC erred in ordering it to pay moral and
exemplary damages.
However, the CA affirmed the RTC, explaining that the
erroneous closure of the respondent’s account would not
have been committed in the first place if the petitioner had
not been careless in supervising its employees. According to
the CA, “the fiduciary relationship and the extent of
diligence that is to be expected from a banking institution,
like herein appellant Citytrust, in handling the accounts of
its depositors cannot be relaxed behind the shadow of an
employee whether or not he/she is new on the job.”4
Moreover, the CA said that the negligence of the
petitioner’s personnel was the proximate cause that had set
in motion the events leading to the damage caused to the
respondent; hence, the RTC correctly opined that “while a
bank is not expected to be infallible, it must bear the blame
for not discovering the mistake of its teller for lack of
proper supervision.”5
_______________
3 Id.
4 Supra, note 1, p. 46.
5 Id.
25
VOL. 628, AUGUST 10, 2010 25

The petitioner sought reconsideration, but the CA

denied its motion for reconsideration for lack of merit.
Hence, this appeal, in which the petitioner maintains
that there were “decisive fact situations showing excusable
negligence and good faith”6 that did not justify the award of
moral and exemplary damages and attorney’s fees.
The petition has no merit.
Firstly, the errors sought to be reviewed focused on the
correctness of the factual findings of the CA. Such review
will require the Court to again assess the facts. Yet, the
Court is not a trier of facts. Thus, the appeal is not proper,
for only questions of law can be elevated to the Court via
petition for review on certiorari.7
Secondly, nothing from the petitioner’s arguments
persuasively showed that the RTC and the CA erred. The
findings of both lower courts were fully supported by the
evidence adduced.
Unquestionably, the petitioner, being a banking
institution, had the direct obligation to supervise very
closely the employees handling its depositors’ accounts, and
should always be mindful of the fiduciary nature of its
relationship with the depositors. Such relationship
required it and its employees to record accurately every
single transaction, and as promptly as possible, considering
that the depositors’ accounts should always reflect the
amounts of money the depositors could dispose of as they
saw fit, confident that, as a bank, it would deliver the
amounts to whomever they directed.8 If it fell short of that
obligation, it should bear the responsibility for the
consequences to the depositors, who, like
_______________
6 Id., at p. 30.
7 Section 1, Rule 45, Rules of Court, specifically states that the petition
for review on certiorari “shall raise only questions of law, which must be
distinctly set forth.”
8 Citytrust Banking Corp. v. Intermediate Appellate Court, G.R. No.
84281, 27 May 1994, 232 SCRA 559, 564.
26
26 SUPREME COURT REPORTS ANNOTATED

the respondent, suffered particular embarrassment and

disturbed peace of mind from the negligence in the
handling of the accounts.
Thirdly, in several decisions of the Court,9 the banks,
defendants therein, were made liable for negligence, even
without sufficient proof of malice or bad faith on their part,
and the Court awarded moral damages of P100,000.00 each
time to the suing depositors in proper consideration of their
reputation and their social standing. The respondent
should be similarly awarded for the damage to his
reputation as an architect and businessman.
Lastly, the CA properly affirmed the RTC’s award of
exemplary damages and attorney’s fees. It is never
overemphasized that the public always relies on a bank’s
profession of diligence and meticulousness in rendering
irreproachable service.10 Its failure to exercise diligence
and meticulousness warranted its liability for exemplary
damages and for reasonable attorney’s fees.
WHEREFORE, we deny the petition for review on
certiorari, and affirm the decision rendered on October 8,
2002 by the Court of Appeals.
Costs of suit to be paid by the petitioner.
SO ORDERED.
Carpio-Morales (Chairperson), Brion, Abad** and

Villarama, Jr., JJ., concur.
Petition denied, judgment affirmed.
_______________
9 Prudential Bank v. Court of Appeals, G.R. No. 125536, March 16,

2000, 328 SCRA 264; Philippine National Bank v. Court of Appeals, G.R.
No. 126152, September 28, 1999, 315 SCRA 309; Metropolitan Bank and
Trust Company v. Wong, G.R. No. 120859, June 26, 2001, 359 SCRA 608.
10 Prudential Bank v. Court of Appeals, supra, at p. 271.
** Additional member per Special Order No. 843 dated May 17, 2010.
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G.R. No. 157049. August 11, 2010.

Banks and Banking; A banking institution has the direct

VOL. 628, AUGUST 10, 2010 23

PETITION for review on certiorari of a decision of the

1 Rollo, pp. 39-49; penned by Associate Justice Danilo B. Pine (retired),

24 SUPREME COURT REPORTS ANNOTATED

ferred to the current account to cover checks issued by the

VOL. 628, AUGUST 10, 2010 25

The petitioner sought reconsideration, but the CA

26 SUPREME COURT REPORTS ANNOTATED

the respondent, suffered particular embarrassment and

Carpio-Morales (Chairperson), Brion, Abad** and

Petition denied, judgment affirmed.

9 Prudential Bank v. Court of Appeals, G.R. No. 125536, March 16,

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