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THIRD DIVISION

BANCO DE ORO UNIVERSAL G.R. No. 257151

BANK, INC., 1 VIVIAN (Formerly UDK 16942)
DULDULAO,2 and CHRISTINE3
NAKANISHI, Present:
Petitioners,
CAGUIOA, J., Chairperson,
INTING,
- versus - GAERLAN,
DIMAAMPAO, and
SINGH,JJ

LIZA A. SEASTRES 4 and Promulgated:

ANNABELLE 5 N. BENAJE,
Respondents. February 13, 2023

X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~~ ~')~~~~ - - - - - - - - - - -X

DECISION

CAGUIOA, J.:

This is a Petition for Review on Certiorari 6 (Petition) under Rule 45 of

the Rules of Court filed by petitioners Banco de Oro Universal Bank, Inc.
(BDO), Vivian Duldulao (Duldulao) and Christine T. Nakanishi (Nakanishi)
(collectively, petitioners) assailing the Decision 7 dated September 30, 2020
and the Resolution 8 dated February 16, 2021 of the Court of Appeals (CA) in
CA-G.R. CV No. 110142, which affirmed with modification the Decision9
dated March 10, 2017 of the Regional Trial Court of Taguig City, Branch 70
(RTC) in Civil Case No. 72161-TG finding petitioners jointly and severally
liable to respondent Liza A. Seastres (Seastres ).

Now BOO Unibank, Inc.

Also appears as " O limpi a Vivian Du ldulao" in some parts of the rollo.
Also appears as " Christi na" in some parts of the rollo.
4
Also referred to as " Liza M. Aguilar" in some parts of the rollo.
A lso spe ll ed as " Anabelle" in some parts of the rollo.
6
Rollo, Vol. I, pp. 13-89.
7
Id. at 90-108 . Penned by Associate Justice Perpetua Susana T. Atal-Pafio, with Associate Justices Ramon
A. Cruz and Walter S. Ong concurring.
Id. at I 09-1 11.
9
Rollo, Vol. Ill , pp. 1451-14 72. Penned by Presiding Judge Louis P. Acosta.
Decision 2 G.R. No . 257151
(Formerly UDK 16942)

The Facts

The CA nan-ates the antecedents as follows:

[Respondent Seastres] is a depositor of [petitioner BOO)

maintaining various personal and corporate accounts in two of its branches,
BOO People Support Branch and BOO Rufino Branch, in Makati City.

Sometime in October 2008, Nella Zablan [(Zablan)], the Finance

Officer of Seastres[' ] business [named) Las Management and General
Services, Inc. 10 (Las Management), called BDO People Support Branch
and requested for a transaction history with respect to Account No.
208004 71 , as Seastres suspected that several unauthorized withdrawals
were made from April to September 2008. Acting on said request, BOO
immediately provided Seastres with her account history. [Petitioner
Nakanishi] , the Branch Head of BOO People Supp011 Branch, personally
called Seastres to inform her that all the withdrawals were made by
[respondent] Anabelle Benaje (Benaje), Seastres['] long-time friend and
the Chief Operating Officer of Las Management. An investigation was
made but nothing irregular was discovered.

Nakanishi then reported the matter to BDO management and

likewise informed [petitioner Duldulao] , the Branch Head of BOO Rufino
Branch, where Seastres likewise maintained an account. BOO Rufino
Branch conducted its own investigation and like the BOO People Support
Branch, no anomalous transactions were found.

Particularly, Seastres discovered that there were several

unauthorized withdrawals from her accounts without her knowledge,
instruction, and authority [(hereinafter, the "subject withdrawal slips")] , to
wit:

From BOO People Support Branch under Account No. 20800471 :

Transaction and date: Amount:

BOO Withdrawal Sli st 1, 2008 P128,000.00
BOO Withdrawal Sli 9,2008 P130,000.00
BOO Withdrawal Sli 11 , 2008 P437,200.00
BDO Withdrawal Sli 16, 2008 P282,000.00
BOO Withdrawal Sli 4, 2008 P 54,000 .00
BDO Withdrawal Sli 2,2008 P300,000.00

From BOO Rufino Branch under Account No. 5420-015499:

Transaction and Date: Amount:

fBDO l Withdrawal Slip dated September 18, 2008 Pl 80,000 .00
fBDOl Withdrawal Slip dated September 9, 2008 P345 ,000.00
fBDOl Withdrawal Slip dated August 29, 2008 P381,000.00
fBDOl Withdrawal Slip dated July 24, 2008 P503 ,000.00
rBDOl Withdrawal Slip dated September 12, 2008 P222,600.00
rBDOl Withdrawal Slip dated July 2, 2008 P646,000.00 _

10
Also " LAS MGSI " and "LAS Management and Manpower" in some parts of the rollo.
Decision 3 G.R. No. 257151
(Formerly UDK 16942)

She also discovered that the following manager' s checks were

encashed without her knowledge, consent, and authority [(hereinafter, the
"subject manager's checks")]:

Check fNumber] and Date: Amount:

Manager's Check No. 0001466 dated May 23 , 2008 P2,500,000.00
Manager' s Check No. 0001549 dated June 23 , 2008 p 508 ,072.92
Manager' s Check No. 0001346 dated April 8, 2008 Pl ,505,066.67

The total amount of the unauthorized transactions was

P8 ,121 ,939.59.

Seastres sought the assistance of BDO in reconciling her accounts.

All relevant withdrawal slips as well as pertinent bank documents were
provided to her. BDO, for its pai1, conducted its own investigation.

It was discovered that all these transactions were facilitated and

made by Benaje. As usual practice, Seastres rarely went to BDO and simply
allowed her authorized representatives, particularly Benaje, to process her
personal and corporate transactions for her. Whenever the bank would make
confirmatory calls to Seastres[' ] office regarding the transactions, the calls
would always be referred to Benaje for confirmation or Benaje would be
the one to answer the call. If the bank would insist on talking to Seastres,
Benaje would say that Seastres is out of the office, in a meeting or is busy.
Thus, the confirmation would still be made by Benaje.

As regards the [subject] [m]anager' s [c]hecks, the same were

encashed because Benaje presented application forms bearing the signatures
of Seastres. She also furnished the bank the documents showing that
Seastres had special instructions to partially roll over the Special Deposit
Account with the amount withdrawn from said account to be partially
deposited to another account and the rest to be encashed.

In all these transactions, BDO, through its employees including

Duldulao and Nakanishi, all verified the signatures of Seastres on the
[subject] withdrawal slips and manager' s checks, and found the same to be
genu111e.

Meanwhile, a meeting was held where Benaje admitted that she

made all the questioned withdrawals. Benaje likewise voluntarily
surrendered two (2) rubber stamps bearing the signature of Seastres, which
the former used for the transactions. She also promised to return the money
to Seastres.

Accordingly, Seastres filed a criminal case against Benaje before the

Makati City Prosecutor's Office but the same was dismissed for lack of
probable cause. Seastres did not appeal this finding. Instead, she filed the
instant case for collection of sum of money against [petitioners]. Benaje was
included as defendant when Seastres filed a Motion for Leave to File
Amended Complaint, which was granted by the RTC in an Order dated
April 17, 2012. 11

11
Rollo, Vol. I, pp . 91-94.
Decision 4 G.R. No. 257151
(Formerly UDK 16942)

Ruling of the RTC

In its Decision 12 dated March I 0, 2017, the RTC held that BDO, through
its employees, reneged in its obligation to treat the accounts of its customers,
particularly Seastres, with meticulous care and extraordinary diligence, 13 to wit:

WHEREFORE, in view of the foregoing, judgment is hereby

rendered:

1. [Seastres'] prayer for actual and moral damages including the

attorney's fees and costs of suit is hereby GRANTED.
[Petitioners] are hereby ordered to be jointly and severally liable
to [Seastres] in the following damages and amounts:

a. The actual damages in the amount of Eight Million

Sixty[-]Seven Thousand Nine Hundred Thirty[-]Nine
Pesos and Fifty[-]Nine Centavos (Php 8,067,939.59);

b. One Hundred Thousand Pesos (Php 100,000.00) as moral

damages ;

c. One Hundred Thousand Pesos (Php 100,000.00) as

attorney ' s fees; and

d. Costs of suit.

2. [Seastres '] prayer for exemplary damages is hereby DENIED

for lack of merit.

3. [Petitioners'] Counterclaim against the [Seastres] 1s hereby

DENIED for lack of merit.

4. [Respondent] Benaje is hereby ordered to indemnify and pay

[petitioners] BDO, Duldulao and Nakanishi :

a. Any and all damages, costs and expenses that BDO,

Duldulao and Nakanishi may be required to pay [Seastres]
under the Amended Complaint;

b. One Hundred Thousand Pesos (Php 100,000.00) each for

moral damages;

c. Fifty Thousand Pesos (Php 50,000.00) each for exemplary

damages ; and

d. Fifty Thousand Pesos (Php 50,000) for attorney's fees.

SO ORDERED. 14

According to the R TC, the lack of information provided in the

withdrawal through representative should have caught the attention of the
bank, and BDO should have taken precautions to avoid the unauthorized

12
Rollo, Vol. lll , pp . 145 1- 1472.
13
Id. at 1466.
14
Id. at 1471 -1 472.
Decision 5 G.R. No . 257151
(Formerly UDK 16942)

transactions. 15 BDO failed to see to it that the required details for withdrawals
were correctly filled out and the procedures for confirming the transactions
with the account owner were not followed. 16

The R TC also ruled that the doctrine of apparent authority does not
apply in the instant case because the Special Power of Attorney as well as the
Authorization relied upon by BDO shows that it only pertains to the delivery
to and/or receipt from the bank of any and all papers, documents, checks,
statements and other related papers pertaining to any and/or all transactions of
Seastres, but it does not include the authority to withdraw from Seastres'
account and encash Seastres' checks. 17

Aggrieved, petitioners then filed a Motion for Partial Reconsideration 18

dated May 18, 201 7, which was denied by the RTC in an Order' 9 dated
September 22, 2017. Thereafter, petitioners filed a Notice of Appeal 20 dated
October 11, 2017 to the CA.

Ruling of the CA

In its Decision 21 dated September 30, 2020, the CA partly granted

petitioners' appeal. Although the CA affinned the RTC's findings that
petitioners failed to exercise the degree of diligence required of banking
institutions and that the doctrine of apparent authority is not applicable in the
instant case, the CA held that Seastres is guilty of contributory negligence and
therefore should be made to shoulder part of the damages she sustained, 22
paiiicularly forty percent (40%) of the total liability, while petitioners should
be accountable for the remaining sixty percent (60%). 23

The CA also modified the amount of actual damages on the ground that
Seastres was not able to formally offer the BDO Withdrawal Slip dated July
2, 2008 in the amount of P646,000.00. Thus, the said amount should be
reduced from the total amount of actual damages. 24 Further, the CA held that
the award of moral damages and attorney's fees in favor of Seastres should be
deleted since there is neither basis nor any legal, factual or equitable
justification for such awards .25

The dispositive portion of the Decision dated September 30, 2020

states:

15
Id. at
1466.
16
Id. at
I 466-1467.
17
Id. at
1467.
18
Id. at
14 73 -1506.
19
Id. at
1575-1576.
w Id. Af 1577-1581 .
21
Rollo, Vol. I, pp. 90-108.
22
Id. at 104-105.
23
Id. at I 06.
24
Id. at I 05 .
25
Id. at 106-107.
Decision 6 G.R. No. 257151
(Formerly UDK 16942)

WHEREFORE, the appeal is PARTLY GRANTED. The

Decision dated March 10, 2017 issued by the Regional Trial Court, National
Capital Judicial Region, Branch 70, Taguig City, in Civil Case No. 72161 -
TG, is AFFIRMED WITH MODIFICATION as follows :

[Petitioners] Banco De Oro, Vivian Duldulao, and

Christine Nakanishi are jointly and severally liable to
[respondent] Liza A. Seastres [for] actual damages in the
amount of P4,453 ,163.75 . The award of moral damages and
attorney ' s fees are hereby deleted. Costs of suit to be borne by
the pai1ies.

SO ORDERED. 26

Both petitioners and Seastres moved for reconsideration, but both were
denied by the CA in a Resolution 27 dated February 16, 2021.

Thereafter, BOO, Duldulao and Nakanishi filed this present Petition.

Seastres, on the other hand, no longer sought a review.

Issues

The issues presented before the Comi are: (a) whether the CA correctly
found that petitioners failed to exercise the diligence expected from banking
institutions in handling Seastres ' bank accounts; and (b) if so, whether
Seastres can be found guilty of contributory negligence in handling her
personal bank accounts, which would justify the reduction of petitioners' total
liability to Seastres.

The Court's Ruling

The Petition is without merit.

At the outset, the Court is not a trier of facts. Cases which would require
a re-evaluation of the evidence are inappropriate under Rule 45 of the Rules
of Court since the jurisdiction of the Comi is limited only to errors of law. 28
However, this rule admits of exceptions, such as: (1) where the conclusion is
a finding grounded entirely on speculation, surmise, and conjectures; (2)
where the inference made is manifestly mistaken; (3) where there is grave
abuse of discretion; (4) where the judgment is based on misapprehension of
facts; and ( 5) the findings of fact are premised on the absence of evidence and
are contradicted by evidence on record. 29

Here, the CA' s finding that Seastres is liable for 40% of the total amount
of actual damages on the finding of contributory negligence is clearly based on
a misapprehension of facts. Upon an exhaustive review of the records, the Court

26
Id. at I 07-108 .
27
Id . at I 09-1 I I.
28
Lopez v. Saluda, .Jr., G .R. No . 233775 , September 15 , 2021 , p. 5.
29
Heirs of Teresita Vilfanueva v. Heirs of Petronila Syquia Mendoza , 810 Phil. 172, 178-1 79(20 17).
Decision 7 G.R. No. 257151
(Formerly UDK 16942)

is compelled to yield to the factual findings made by the trial court that BDO
totally failed to comply with its duty to exercise extraordinary diligence in
taking care of Seastres' bank accounts. For this, BDO should be liable for the
full amount of the actual damages suffered by Seastres.

Banks are expected and required to

exercise extraordinary diligence in
their business dealings, particularly
in handling their clients' accounts

Based on cmTent jurisprudence, banks are required to exercise the

highest standard of diligence . As explained in Philippine Commercial
International Bank v. Court ofAppeals, 30 the banking business is one affected
with public interest so that banks are expected to exercise the highest degree
of diligence 31 :

Time and again, we have stressed that banking business is so impressed

with public interest where the trust and confidence of the public in general is
of paran1ow1t impo1iance such that the appropriate standard of diligence must
be very high, if not the highest, degree of diligence. A bank ' s liability as obligor
is not merely vicarious but primary, wherein the defense of exercise of due
diligence in the selection and supervision of its employees is of no moment.

Banks handle daily transactions involving millions of pesos. By the

very nature of their work the degree of responsibility, care and trustworthiness
expected of their employees and officials is far greater than those of ordinary
clerks and employees. Banks are expected to exercise the highest degree of
diligence in the selection and supervision of their employees. 32

Taking into consideration the fiduciary nature of a bank ' s relationship

with its depositors, banks are duty bound to treat the accounts of their clients
with the highest degree of care. Thus, in Simex International (Manila), Inc. v.
Court of Appeals, 33 the Court emphatically held:

In every case, the depositor expects the bank to treat his account
with the utmost fidelity, whether such account consists only of a few
hundred pesos or of millions . The bank must record every single transaction
accurately, down to the last centavo, and as promptly as possible. This has
to be done if the account is to reflect at any given time the amount of money
the depositor can dispose of as he sees fit, confident that the bank will
deliver it as and to whomever he directs. A blunder on the part of the bank,
such as the dishonor of a check without good reason, can cause the depositor
not a little embarrassment if not also financial loss and perhaps even civil
and criminal litigation. 34

As a business affected with public interest and because of the nature of

its functions, banks are under obligation to treat the accounts of their
30
403Phil.361(200I).
31
Id. at 388.
32
Id. at 388-389. Citations omitted .
33
262 Phil. 387 ( 1990).
34 Id. at 396, quoted in Citytrust Banking Corp. v. Intermediate Appellate Court, 302 Phil. 593, 598 ( 1994 .
Decision 8 G.R. No. 257151
(Formerly UDK 16942)

depositors with meticulous care always having in mind the fiduciary nature of
their relationship. 35

Here, BDO was duty bound to exercise the highest degree of diligence
in handling Seastres' bank accounts and in asce1iaining that the signatures in
the subject withdrawal slips and manager's checks were made by Seastres and
not by anybody else.

The records show, however, that BDO did not practice the highest
degree of diligence required of it in taking care of Seastres' bank accounts.

Primarily, BDO actually failed to comply with its own rules and
regulations regarding withdrawals made through a representative.
Specifically, BDO allowed Benaje to personally transact the unauthorized
withdrawals without confirming from Seastres the authority of Benaje and
without the latter accomplishing the authority for withdrawal through
representative as indicated in the subject withdrawal slips.36 Records also
show that the spaces provided for withdrawal through representative in the
subject withdrawal slips were not filled out at all, 37 to wit:

Q Ms. Witness, you will agree with me that it is the rule of BDO that
all withdrawals must be made by depositor by properly filling-out a
withdrawal slip and presenting it together with the passbook to the
bank teller?
A Yes, Ma'am.

Q You will also agree with me that withdrawals made by a person other
than the depositor himself may be allowed only upon the depositor' s
written authorization which shall be verified by the bank teller?
A Yes, Ma' am.

Q And you will also agree with me that such written authorization is
written on the withdrawal slip itself on the space provided for that
purpose?
A Yes, Ma'am .

Q By the way, Ms. Witness, am I also con-ect to state that any withdrawal
transactions made by representatives, is it not that x x x the policy of
the BDO that the withdrawal must first be confinned with the depositor
before the money will be administered to the representative?
A Yes[,] that is the best effort of the bank.

Q Let's go back to your Exhibits " 7" to " 11 " . For September 18, 2008 ,
you will agree with me that BDO Ayala Rufino Branch allowed
A1mabelle Benaje to withdraw the amount of One Hundred Eighty
Thousand Pesos (PhP l 80,000.00) from the personal savings account
of Ms. Sea[s]tres despite that (sic) the authorization provided for
that purpose was not filled-up (sic)?
A Yes, Ma'am.

35 BPI Family Bank v. Franco, 563 Phil. 495 , 509 (2007), quoting Sim ex lnlernalional (Manila), In c. v.
Coitrl ofAppeals, supra note 33, at 396 .
36
Seerollo, Vol.111 , pp. 1803-1814.
37
See id . at 1803 and 1821-1823.
Decision 9 G.R. No . 257151
(Formerly UDK 16942)

Q And this withdrawal was not also confirmed with Ms. Liza
Sea[ s]tres?
A To my knowledge, they were confirmed.

Q There was confirmation with Ms. Sea[ s]tres?

A Yes .

Q Do you have proof of that?

A No.

Q In your Exhibit "A", you will also agree with me that Ms. Annabelle
Benaje was allowed to withdraw the amount of Three [Hundred] Forty-
Five Thousand Pesos (PhP345,000.00) from the personal savings
account of Liza Sea[s]tres despite that (sic) no written authorization
was filled-out in this particular withdrawal slip?
A Yes, Ma'am.

Q And this withdrawal transaction was not confirmed also, will you
agree with me, with Ms. Liza Sea[ s]tres?
A No . Can I say because this were transact (sic), for assess by other
(sic), but to my knowledge they were confirmed with Ms. Sea[s]tres.

Q Do you have proof that there was confirmation?

A None.

Q For your Exhibit "9", you will also agree with me that on August 29,
2008, Ms. Annabelle Benaje, herself was allowed to withdraw the
amount of Three Hundred Eighty-One Thousand from the personal
savings account of Liza A. Sea[ s]tres despite the fact that the
authorization form provided on the withdrawal slip was not
filled-up (sic)?
A Yes.

Q And this was also confirmed with - - - -

A Yes, to my knowledge also confirmed by the officers.

xxxx

Q For Exhibit "10", you will also agree with me that on July 24, 2008 ,
Ms. Annabelle Benaje was allowed to withdraw in the amount of
Five Hundred Three Thousand Pesos (PhP503 ,000 .00) from the
personal account of Ms. Liza A. Sea[s]tres despite the fact that the
authorization form provided on the withdrawal slip was not
filled-up (sic)?
A Yes, Ma'am.

Q And this was confirmed?

A To my knowledge, yes.

Q But no proof?
A No proof.

Q And lastly, for your Exhibit " 11 ", you will also agree with me that
on September 12, 2008 , Ms. Annabelle Benaje [was again] allowed
to withdraw in the amount of Two Hundred Twenty-Two Thousand
Six Hundred from the personal account of Ms. Liza A. Sea[s]tres
Decision G.R. No. 257151
(Formerly UDK 16942)

despite the fact that the authorization provided for that purpose
on the withdrawal slip was not also filled-up (sic)?
A Yes, Ma'am.

Q And to your knowledge again, there was confirmation?

A Yes, Ma' am.

Q But no proof?
A Yes, Ma'am.

xxxx

A TTY. ROXAS -
By the way, Ms. Witness, let's refer to your Exhibit " 35 "[,] the rules
and regulations of BDO with regard to opening of accounts,
withdrawals, and deposits. You mentioned in your Judicial
Affidavit, Ms. Witness, that the bank allowed Ms. Annabelle
Benaje to withdraw from the personal savings account of Ms.
Liza Sea[s]tres despite the fact that authorization was not
provided, [and) was not properly filled -up (sic) because of
practice. Do you affirm this?

THE WITNESS -
Yes, Ma'am.

Q I am showing to you, can you refer to your Exhibit "35"[,] which is

one of the documents you have presented and identified. Can you
please point out to the Honorable Court which part of the
regulations and policies of BDO that [that] practice is allowed
in withdrawal transactions? The practice that you were
referring to, Ms. Witness.
A It is not stated here, Ma'am. 38 (Emphasis supplied)

It is clear from the foregoing testimony of Duldulao, that had it not been
for BDO's failure to abide by its own rules and regulations, the unauthorized
transactions from Seastres' bank account would not have happened.

As regards the subject withdrawal slips bearing the alleged signature of

Seastres, BDO was also negligent when it still processed the transactions even
if it was Seastres' representative Benaje, and not Seastres, who presented the
subject withdrawal slips. As earlier discussed, there was no proof of authority,
even a confirmation, from Seastres that Benaje was her authorized
representative.

It should be noted that the Authorization of Account Name Liza A.

Seastres (Exhibit "24" 39 of the records), which was claimed by petitioners to
be the alleged authorization from Seastres in favor of Benaje, plainly shows
that the power of Seastres' authorized representative is only to make deposits,
account inquiry, pick up bank statements, print outs, checkbooks and other
documents pertinent to Seastres' accounts. 40 There is absolutely nothing in the

38
TSN , April 24, 2015 , pp. 28-33 ; rollo , Vol. II , pp. 789-7 94.
39
Rollo, Vol. II , p. 992.
40 Id.
Decision 11 G.R. No. 257151
(Formerly UDK 16942)

authorization which authorized Benaje to make any withdrawals. The

Authorization of Account Name Liza A. Seastres reads:

ACCOUNT NAME LIZA A. SEASTRES

ACCOUNT NUMBER/S

AUTHORIZATION

The following representative/s whose signature appears below is/are hereby

authorized to transact business with you but limited only to making
deposits, account inquiry, pick up bank statements, print outs, checkbooks
and other documents pertinent to my/our deposit accounts or fund
placements with you and other transactions.

This authority is to remain in full force and in effect until revoked by me/us
in writing.

AUTHORIZED SIGN A TORIES

LIZA A. SEASTRES [signature]

xxxx

AUTHORIZED REPRESENTATIVES

NAMES SIGNATURES

ANNABELLE N. BENAJE [signature]

XX X x4 1

Moreover, BDO violated its contractual duty and obligation to Seastres

by allowing the encashment of the subject manager' s checks despite the fact
that the payee in the said checks was Seastres, but the person encashing the
same was Benaje. This lapse on the part of BDO was emphasized in the
testimony of Nakanishi:

Q Ms. Witness, will you agree with me that BDO has this particular
policy on checks that only if the check is in the name of a specific
payee, only that specific payee is authorized or allowed to encash
the said check including the manager's check?
A Yes, Ma'am.

Q In other words, Ms. Witness, am I correct to say that in the event

that a check, including a manager's check, if it's in the name of
a specific payee, it cannot, in any way, be encashed by another
person or a representative?
A Yes, Ma'am.

Q Let's go to your attachments, Ms. Witness, of your Judicial

Affidavit. You attached hereof as Exhibits "12", " 13 " , and " 14", the
manager ' s check (sic). For Exhibit " 12", Ms. Witness, am I correct

41 Id.
Decision 12 G.R. No. 257151
(Formerly UDK 16942)

to say that since Ms. Liza Aguilar is the payee of this manager's
check dated May 23, 2008, it is only Ms. Liza Aguilar who is able
or allowed to encash this manager's check and no other?
A Yes, Ma'am.

Q Am I correct to say, Ms. Witness, that for your Judicial Affidavit, if

I understand it right, that this manager's check also was encashed
by Ms. Annabelle Benaje?
A Yes, Ma'am.

Q For this Exhibit " 13", manager' s check dated June 23 , 2008, since
the payee of this particular manager's check is also Ms. Liza M.
Aguilar, am I also correct to say that it should have been Liza
Aguilar only that is allowed to have encashed this particular
manager's check?
A Yes, Ma'am.

Q And no other?
A These are the procedures.

Q Am I correct to say, Ms. Witness, if I understand your Judicial

Affidavit, [that] this particular manager's check was also
encashed by Ms. Annabelle Benaje?
A Yes, Ma'am.

Q And for this manager' s check dated April 8, 2008 which is marked
as Exhibit " 14", since it is also in the name of Liza M. Aguilar as
the payee, am I also correct to say that it should have been only
Liza Aguilar that could have encashed this manager's check?
A Yes, Ma'am .

Q And if I also understand it right from your Judicial Affidavit, am I

correct also to state that this particular manager's check also was
encashed by Ms. Annabelle Benaje?
A Yes, Ma'am.

Q x x x You have identified in your answer No . 34 Equitable PCI Bank

authorization form . Am I correct to say, Ms. Witness, that this
Equitable PCI Bank authorization form[,] which has been previously
marked as Exhibit "21 "[,] is not binding insofar as BDO is concerned?
A Yes.

Q You also identified Exhibit "24", Ms . Witness, in your .I udicial

Affidavit, which is an authorization. Please go over the same. Am I
correct to say, Ms . Witness, that this Exhibit "24", [the] authorization,
pe11ains only to safety deposit box? Excuse me, excuse me. Am I
correct to say that this authorization does not include withdrawals?
A Yes.

xxxx

Q And may I also know, Ms. Witness, if you know, what is the
authority of the bank to have made this transfer to this particular
bank account number?
A It is being instructed by client to transfer.

Q Where is the instruction, Ms. Witness, if you have it?

Decision 13 G.R. No . 257151
(Formerly UDK 16942)

A As I have said, this is what we are doing as a procedure.

Q Am I correct to say that it was just a presumption on your part

that this particular 208, that the transfer to bank account No.
208004813 was to be made?
A Yes, Ma'am.

Q Would you agree with me that there was no written

authorization made by Liza Aguilar or Liza Seastres to make
this transfer?
A Yes, as far as I can remember.

Q Am I also conect to say, M[s] . Witness, that for Exhibit "28", the
transfer like (sic) to the same bank account number, am I correct to
say that Ms. Liza Seastres likewise has not executed any written
authorization to make such transfer?
A Yes, Ma'am.

xxxx

Q And also with regard to encashment, Ms. Witness, am I also coITect

to say that there is no written authorization whatsoever executed
by Ms. Liza Seastres or Liza Aguilar in favor of Annabelle Benaje
to make [a] withdrawal transaction with BDO?
A Yes, Ma'am. 42 (Emphasis supplied)

BDO had existing rules and regulations for the withdrawal and
encashment of checks through a representative. Based on the foregoing
testimony, these were not followed at all. To be sure, the procedure for
withdrawal and encashment by a representative is a very basic and
uncomplicated banking procedure. Safeguards are imbedded in BDO's
procedures for the protection of the depositor and payee. Accordingly, BDO's
blatant disregard of its own procedures, as admitted by BDO's own officers,
constitutes a clear violation of the bank's fiduciary obligation to its depositor
and account holder.

Seastres is not guilty of contributory

negligence

Considering that the bank itself is the one who violated its own rules,
the Court rules that Seastres is not guilty of any contributory negligence and
should not be made to shoulder any liability.

While it is true that Seastres dealt with the bank through Benaje, this
cannot be considered contributory negligence because she did so within the
parameters set by BDO itself in transactions through a representative. Again,
Exhibit "24" of the records, the alleged authorization from Seastres in favor
of Benaje, shows the limited powers of Benaje as Seastres' authorized
representative - i.e., Benaje was allowed only to make deposits, account
inquiry, pick up bank statements, print outs, checkbooks and other documents

42
TSN , December 5, 20 14, pp. 37-43 and 47 ; id. at 731 -737 and 741.
Decision 14 G.R. No . 257151
(Formerly UDK 16942)

pertinent to Seastres' accounts. 43 Nothing in the authorization declared that

Benaje was authorized to make any withdrawals.

Thus, when BDO violated its own procedures, and totally disregarded
the limits ofBenaje's authority as representative of Seastres, then it is evident
that this was done to accommodate Benaje - and contrary to the interests of
its depositor, Seastres, to whom it owed the fiduciary duty of treating her
accounts with the highest degree of care. Stated differently, the "practice"
adve1ied to by BDO of transacting with Seastres through Benaje44 was a
practice it had with Benaje, not Seastres. This "practice" does not detract from
or diminish the obligation of BDO to exercise extraordinary diligence in
taking care of Seastres' accounts .

Simply put, BDO should not have allowed such "practice" that was
violative of its own rules and procedures.

To be sure, what the records show is Seastres' vigilance. After being

informed by her company's accountant, Ms. Zablan, regarding the suspicious
withdrawals, Seastres immediately conducted an investigation on her bank
accounts and caused the production of new passbooks and account print outs
when Benaje, as the Chief Operating Officer of Las Management, failed to
promptly deliver the passbooks as demanded by Seastres.45

BDO is liable to Seastres in the full

amount of ?7,421,939.59

In assailing the CA Decision, petitioners argue that the actual damages

awarded by the CA in the amount of P7,421,939.59 should be further reduced
because Seastres failed to prove forgery in the subject withdrawal slips and
manager's checks. 46 According to petitioners, Jennifer B. Dominguez
(Dominguez), the National Bureau of Investigation Expert Witness who
examined the signatures on the subject withdrawal slips and manager's
checks, neither assessed nor rendered an opinion with regard to Seastres'
signatures on four (4) out of the eleven (11) subject withdrawal slips. 47
Moreover, the testimony of Dominguez also did not cover any of the three (3)
subject manager's checks. 48 Thus, the total amount of PS,574,139.59
representing the value of the unexamined subject withdrawal slips and
manager's checks should be deducted from the actual damages of
?7,421,939.59. Petitioners posit that without the examination and assessment
on the genuineness of Seastres ' signatures on the four ( 4) subject withdrawal
slips and three (3) manager's checks, there is no credible evidence to prove
Seastres' claim that her signatures thereon were forged. 49

43
Rollo, Vo l. II, p. 992.
44
See rollo, Vol. Ill , p. I 821.
45
Id. at I 827-1829.
46
Rollo, Vol. I, pp. 70-73.
47
Id . at 70.
48
Id. at 70- 71.
49
Id. at 71.
Decision 15 G.R. No. 257151
(Formerly UDK 16942)

The Court is not convinced.

As pointed out by Associate Justice Maria Filomena D. Singh during

the Court deliberations, Seastres' failure to prove the forgery of her signature
on the subject withdrawal slips and manager's checks is in-elevant to the
negligence of BDO in fulfilling its obligations to Seastres as its depositor.

To reiterate, banks are required to exercise the highest degree of

diligence, along with high standards of integrity and performance in view of
its significant role in commercial transactions. 50 Since their business and
industry are imbued with public interest, banks are required to exercise
extraordinary diligence in handling their transactions. 51 Anything that falls
short of this required standard of care constitutes negligence in the
performance of the banks' obligations to their depositors.

As previously discussed, the negligence of BDO in handling Seastres'

accounts is undisputed. Accordingly, the bank should be held liable for the
damages that Seastres incun-ed without regard to whether Seastres proved that
her signature was forged. Based on the records, the negligence of BDO lies
not in the forgery of Seastres ' signature but on the fact that the bank allowed
withdrawals on Seastres' account even though such withdrawals were made
in violation of its own rules and regulations. The negligence in this case
consists not in allowing the withdrawals by virtue of a forged signature, but
in acceding to such withdrawals despite being violative of the bank's own
policies and procedures.

Stated differently, even assuming that the signatures of Seastres on the

subject withdrawal slips and manager's checks were genuine, these
documents could still not have been used by Benaje to withdraw the amounts
indicated therein without Seastres' written authorization because to allow
Benaje to do such withdrawals was against the policies of the bank.

Moreover, At1icle 1207 of the Civil Code states that, "x x x [t]here is a
solidary liability only when the obligation expressly so states, or when the law
or the nature of the obligation requires solidarity." An examination of the rulings
of the lower com1s show that Duldulao and Nakanishi, as bank employees, were
held liable to Seastres as joint t011feasors. However, based on the facts, it is
evident that what BDO breached was its contractual obligations to Seastres by
its own failure to follow its own rules. Accordingly, the Court finds it proper to
hold BDO solely liable to Seastres. Having BDO's contractual breach as the
basis for liability, Duldulao and Nakanishi, who are merely employees or agents
ofBDO, should not be held jointly and severally liable to Seastres.

In light of the foregoing , the liability of BDO should not be reduced in

spite of Seastres' failure to establish the forgery of her signature on the subject

50
Banta v. Equi:able Bank, In c. (now BDO Uni bank, In c.), G.R. No . 223694, February I 0, 202 1, p. 5,
citing Philippine National Bank v. Vila, 792 Phil. 86, 98 -99(20 16).
51
Id. , citing Philippine National Bank v. Ray mundo , 802 Phil. 617, 631 (20 16).
Decision 16 G.R. No. 257151
(Formerly UDK 16942)

withdrawal slips and the manager's checks. BDO is liable to Seastres in the
full amount of P7,421,939.59, broken down as follows:

BDO Withdrawal Slips Amount

BDO Withdrawal Slip dated August 1, 2008 p 128,000.00
(Exhibit "A" and Exhibit "1 ")
BDO Withdrawal Slip dated May 9, 2008 p 130,000.00
(Exhibit "B" and Exhibit "2")
BDO Withdrawal Slip dated July 11, 2008 p 437,200.00
(Exhibit "C" and Exhibit "3")
BDO Withdrawal Slip dated July 16, 2008 p 282,000.00
(Exhibit "D" and Exhibit "4")
BDO Withdrawal Slip dated May 2, 2008 p 300,000.00
(Exhibit "F" and Exhibit "6")
BDO Withdrawal Slip dated September 18, p 180,000.00
2008 (Exhibit "G" and Exhibit "7")
BDO Withdrawal Slip dated September 9, 2008 p 345,000.00
(Exhibit "H" and Exhibit "8")
BDO Withdrawal Slip dated August 29, 2008 p 381,000.00
(Exhibit "I" and Exhibit "9")
BDO Withdrawal Slip dated July 24, 2008 p 503,000.00
(Exhibit "J" and Exhibit" 10")
BDO Withdrawal Slip dated September 12, p 222,600.00
2008 (Exhibit "K" and Exhibit "11 ")

Manager's Checks Amount

Manager's Check No. 0001466 dated May 23,
P2,500,000.00
2008 (Exhibit "L" and Exhibit" 12")
Manager's Check No. 0001549 dated June 23, p 508,072.92
2008 (Exhibit "M" and Exhibit "13 ")
Manager's Check No. 0001346 dated April 8,
2008 (Exhibit "N" and Exhibit" 14") Pl ,505,066.67 52

BDO is liable to Seastres for moral

damages and attorney's fees

The CoU1i also finds it proper to reinstate the award of moral damages
in favor of Seastres.

Under Article 2220 of the Civil Code, "[ w ]illful injury to property may
be a legal ground for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due. The same rule applies
to breaches of contract where the defendant acted fraudulently or in bad faith. "
In Philippine National Bank v. Vila, 53 the Court held that "moral damages are
not awarded to penalize the defendant but to compensate the plaintiff for the
52
Rollo , Vol. I, pp. 530-539 and 54 I -544.
53
Supra note 50 .
Decision 17 G.R. No. 257151
(Formerly UDK 16942)

injuries he may have suffered. Willful injury to property may be a legal ground
for awarding moral damages if the court should find that, under the
circumstances, such damages are justly due." 54

Here, the wanton and repeated disregard by BDO of its own bank rules
and procedures, which by their very nature are basic and primary, constitutes
bad faith on its part. Clearly, BDO breached its contractual obligations to
Seastres when it failed to exercise the highest degree of diligence required of
banks. The lack of the required care and caution allowed the unauthorized
withdrawals of huge amounts from Seastres' account without her consent and
to the latter's detriment and loss. 55 Hence, the award of Pl00,000.00
as moral damages is warranted.

In addition, the Court affirms the finding of the trial court that the award
of attorney's fees is proper since Seastres was compelled to engage the
services of a lawyer and incurred expenses to protect her interest.

Considering that the culpability of BDO was already established

because of its failure to exercise extraordinary diligence in handling Seastres'
accounts, and that the damages and attorney's fees awarded to Seastres is
based on prevailing jurisprudence, the Court finds that the other issues raised
in the Petition need not be belabored.

WHEREFORE, the Court DENIES the instant Petition and

AFFIRMS with MODIFICATION the Decision dated September 30, 2020
of the Court of Appeals in CA-G.R. CV No. 110142. Petitioner Banco de Oro
Universal Bank, Inc. is solely liable to respondent Liza A. Seastres for:

a. The full amount of Seven Million Four Hundred Twenty-One

Thousand Nine Hundred Thirty-Nine Pesos and Fifty-Nine
Centavos (P7,421,939.59) as actual damages, with interest of
six percent (6%) per annum from March 3, 2009 or the date
when extrajudicial demand was made until finality of judgment;

b. One Hundred Thousand Pesos (Pl 00,000.00) as moral

damages;

c. One Hundred Thousand Pesos (Pl00,000.00) as attorney's

fees; and

d. Costs of suit.

The amount of the aforementioned damages shall earn legal interest of

six percent (6%) per annum from finality of judgment until fully paid.

54
Id . at 99-100. Citations omitted.
55
See Oliver v. Philippine Savings Bank. 783 Phil. 687 , 710(2016).
Decision G.R. No. 257151
(Formerly UDK 16942)

SO ORDERED.

S. CAGUIOA

WE CONCUR:

HEN

V~1'1- d~[R.M~cf- 1
~, ._J6V\.

= ~~
SAMUEL H. GAERL B.DIMAAMP
Associate Justice ssociateJ~

/ ~ -
~ ssociate Justice

ATTESTATION

I a t ~ at the conclusion in the above Decision had been reached in

consultat~n before the case was assigned to the writer of the opinion of the
Court's Division.

S. CAGUIOA
ce
Chairperson, Third Division
Decision 19 G.R. No. 257151
(Formerly UDK 16942)

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the

Division Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court's Division.

A L ] j1 : ~ ~ ~
I ~ ~ f Justice