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PHILIPPINE NATIONAL BANK vs. CARMELITA S. SANTOS


Summary: The standard of diligence required of banks is higher than the degree of diligence of a good father of a family.

FACTS: Sometime in May 1996, respondents discovered that their father maintained a premium savings account with Philippine National Bank (PNB), Sta. Elena-Marikina City Branch.

Respondents went to PNB to withdraw their father's deposit.

However, Aguilar informed them that the deposit had already "been released to a certain Bernardito Manimbo (Manimbo) on April 1, 1997."

On May 20, 1998, respondents filed before the Regional Trial Court of Marikina City a complaint for sum of money and damages against PNB, Lina B. Aguilar, and a John Doe.

On May 20, 1998, respondents filed before the Regional Trial Court of Marikina City a complaint for sum of money and damages against PNB, Lina B. Aguilar, and a John Doe.

ISSUE: Whether Philippine National Bank was negligent in releasing the deposit to Bernardito Manimbo.

HELD: The default standard of diligence in the performance of obligations is "diligence of a good father of a family.

Other industries, because of their nature, are bound by law to observe higher standards of diligence. Common carriers, for example, must observe "extraordinary diligence in the vigilance over the goods and for the safety of [their] passengers" because it is considered a business affected with public interest. "Extraordinary diligence" with respect to passenger safety is further qualified as "carrying the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with... a due regard for all the circumstances.

Similar to common carriers, banking is a business that is impressed with public interest. It affects economies and plays a significant role in businesses and commerce. The public reposes its faith and confidence upon banks, such that "even the humble wage-earner has not hesitated to entrust his life's savings to the bank of his choice, knowing that they will be safe in its custody and will even earn some interest for him." This is why we have recognized the fiduciary nature of the banks' functions, and attached a special standard of diligence for the exercise of their functions.

Petitioners PNB and Aguilar either have no fixed standards for the release of their deceased clients' deposits or they have standards that they disregard for convenience, favor, or upon exercise of discretion. Both are inconsistent with the required diligence of banks. These threaten the safety of the depositors' accounts as they provide avenues for fraudulent practices by third persons or by bank officers themselves.

Petitioner Aguilar was aware that there were other claimants to Angel C. Santos' deposit. Respondents had already communicated with petitioner Aguilar regarding Angel C. Santos' account before Manimbo appeared. Petitioner Aguilar even gave respondents the updated passbook of Angel C. Santos' account. Yet, petitioners PNB and Aguilar did not think twice before they released the deposit to Manimbo. They did not doubt why no original death certificate could be submitted. They did not doubt why Reyme L. Santos would execute an... affidavit of self-adjudication when he, together with others, had previously asked for the release of Angel C. Santos' deposit. They also relied on the certificate of time deposit and on Manimbo's representation that the passbook was lost when the passbook had just been previously presented to Aguilar for updating.

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