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Bank Negligence and Moral Damages

Petitioner, a food export company, deposited money into its account with respondent bank but the deposit was not properly credited. As a result, several checks issued by petitioner were dishonored for insufficient funds. After an investigation, the bank rectified the error but petitioner's suppliers had already sent demand letters due to the bounced checks. Petitioner sued the bank for negligence. The Court ruled in favor of petitioner, finding the bank was grossly negligent for its initial careless error and lack of promptness in fixing it. This violated the fiduciary relationship between a bank and its depositors and impaired petitioner's business reputation. Therefore, petitioner was entitled to moral damages.

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107 views1 page

Bank Negligence and Moral Damages

Petitioner, a food export company, deposited money into its account with respondent bank but the deposit was not properly credited. As a result, several checks issued by petitioner were dishonored for insufficient funds. After an investigation, the bank rectified the error but petitioner's suppliers had already sent demand letters due to the bounced checks. Petitioner sued the bank for negligence. The Court ruled in favor of petitioner, finding the bank was grossly negligent for its initial careless error and lack of promptness in fixing it. This violated the fiduciary relationship between a bank and its depositors and impaired petitioner's business reputation. Therefore, petitioner was entitled to moral damages.

Uploaded by

Michael Bongalonta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Simex International v. CA (G.R. No.

 88013)
Facts:
Petitioner, a private corporation engaged in the exportation of food products, was a depositor
maintaining a checking account with respondent Traders Royal Bank. Petitioner deposited to its
account increasing its balance and subsequently, issued several checks but was surprised to
learn that it had been dishonored for insufficient funds. As a consequence, petitioner received
demand letters from its suppliers for the dishonored checks. Investigation disclosed that the
deposit was not credited to it. The error was rectified and the dishonored checks were
consequently paid. Petitioner demanded reparation from respondent bank for its gross and
wanton negligence but the later did not heed. Petitioner then filed before the RTC which later
held that respondent bank was guilty of negligence but petitioner nonetheless was not entitled to
moral damages. CA affirmed.
Issue:
Whether or not petitioner is entitled to damages due to respondent bank’s negligence.
Ruling: YES.
As the Court sees it, the initial carelessness of the respondent bank, aggravated by the lack of
promptitude in repairing its error, justifies the grant of moral damages. This rather lackadaisical
attitude toward the complaining depositor constituted the gross negligence, if not wanton bad
faith, that the respondent court said had not been established by the petitioner. We shall
recognize that the petitioner did suffer injury because of the private respondent’s negligence
that caused the dishonor of the checks issued by it. The immediate consequence was that its
prestige was impaired because of the bouncing checks and confidence in it as a reliable debtor
was diminished.
The point is that as a business affected with public interest and because of the nature of its
functions, the bank is under obligation to treat the accounts of its depositors with meticulous
care, always having in mind the fiduciary nature of their relationship. In the case at bar, it is
obvious that the respondent bank was remiss in that duty and violated that relationship. What is
especially deplorable is that, having been informed of its error in not crediting the deposit in
question to the petitioner, the respondent bank did not immediately correct it but did so only one
week later or twenty-three days after the deposit was made. It bears repeating that the record
does not contain any satisfactory explanation of why the error was made in the first place and
why it was not corrected immediately after its discovery. Such ineptness comes under the
concept of the wanton manner contemplated in the Civil Code that calls for the imposition of
exemplary damages.

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