SC says negligent banks may be liable for moral damages

The Supreme Court of the Philippines reminded the public that banks that are found negligent, even unintentionally, may be liable and may have to pay for moral damages. 

In the statement, the Supreme Court states that “banks may be held liable for moral damages suffered by depositors due to negligence, even if there is no proof of bad faith or malice.”

The reminder was prompted by a Decision written by Associate Justice Samuel H. Gaerlan regarding a complaint two depositors raised against Banco de Oro. 

Remedios and Angelita Antonino, both US green card holders living abroad, had three time deposit accounts amounting to over $150,000 (P8.7 million) with the BDO San Lorenzo branch in Makati City. 

If the deposits were not withdrawn at maturity, the Antoninos had an agreement with the branch manager that the bank would automatically roll over the deposits into savings accounts. For safekeeping, the bank kept the time deposit certificates in a Banco Filipino deposit box. 

Later, after Banco Filipino declared bankruptcy, the Philippine Deposit Insurance Corporation took over. The BDO San Lorenzo branch closed, with the Antoninos having no clue, and the bank not notifying them. Only when the Antoninos tried withdrawing their investments did they discover the closure. 

Replying to several demand letters sent by the Antoninos, BDO claimed the deposits had already been withdrawn. The bank cited a demand draft for the withdrawal that was allegedly signed by Angelita, who denied signing the document. 

As a result, the Antoninos filed a complaint against BDO, which sought payment for their time deposit investments. 

In its ruling, the Supreme Court cited Section 9 of BDO’s terms and conditions for time deposit placements. The section requires depositors to surrender their time deposit certificates upon withdrawal of deposits. Since the Antoninos still had their certificates, “the Supreme Court concluded that the funds were not withdrawn.”