SC: Banks liable for moral damages due to negligence

BANKS may be held liable for moral damages arising from negligence, even without proof of bad faith or malice, the Supreme Court (SC) has ruled.

In a decision written by Associate Justice Samuel H. Gaerlan, the SC’s Third Division ordered Banco de Oro (BDO) to pay depositors Remedios and Angelita Antonino the proceeds of their time deposits, along with P100,000 in moral damages.

The Antoninos, US green card holders residing abroad, had placed more than $150,000 in three-time deposits with BDO’s San Lorenzo branch. The funds, stored in a Banco Filipino deposit box, were not released after the branch closed without notice.

BDO claimed the deposits had been withdrawn through a draft allegedly signed by one of the depositors. However, handwriting experts and immigration records confirmed that the depositor was abroad at the time.

Both the lower court and Court of Appeals ruled in favor of the Antoninos. The SC affirmed these rulings, stressing banks’ obligation to exercise “very high diligence” in safeguarding deposits.

The tribunal said moral damages for mental anguish and anxiety may be awarded when negligence is proven, citing BDO’s failure to verify the identity of the withdrawer and to produce key documents despite the significant amount involved. — Erika Mae P. Sinaking