FACTS
Remedios A. Antonino and Angelita A. Antonino made several U.S. dollar time-deposit placements with Banco De Oro Universal Bank, Inc. (BDO) at its San Lorenzo Branch in Makati City. The placements were evidenced by several Time Deposit Certificates (TDCs). The controversy eventually centered on three TDCs amounting to USD 50,000.00, which BDO claimed had been redeemed by Angelita on May 28, 2001.
BDO claimed that Angelita had redeemed the three TDCs and received their proceeds through a Demand Draft bearing her signature. BDO presented copies of its computer-printed history data and the Demand Draft to support its position. Angelita denied redeeming the deposits and denied signing the Demand Draft.
To establish that she could not have personally redeemed the deposits on May 28, 2001, Angelita presented a Bureau of Immigration Certification and her passport showing that she had departed the Philippines on November 20, 2000 and returned only on June 9, 2003. Thus, she was not physically present in the Philippines on the date BDO claimed that she personally redeemed the deposits.
Angelita also presented the testimony of PLt. Maggay, a PNP handwriting expert. After examining the questioned signature on the Demand Draft and Angelita's standard signatures, Maggay found dissimilarities in their execution, spacing, and alignment. Although she could not make a definite conclusion because the questioned signature appeared only on a carbon copy, she testified that the signatures were probably made by different persons.
The RTC ruled in favor of Remedios and Angelita and ordered BDO to pay USD 100,000.70, plus interest, exemplary damages, and attorney's fees. The Court of Appeals affirmed. Both sides appealed to the Supreme Court. BDO argued that its evidence established redemption of the deposits, while Remedios and Angelita argued that they were also entitled to the proceeds of the first TDC, for which they had not presented the original certificate.
ISSUE
The first issue was whether BDO sufficiently proved that Angelita redeemed the three time deposits on May 28, 2001.
The second issue was whether the evidence presented by Angelita, particularly the Bureau of Immigration Certification, passport records, and handwriting-expert testimony, sufficiently established that she could not have personally redeemed the deposits.
The third issue was whether the photocopies of BDO's computer-printed history data and the Demand Draft sufficiently established BDO's claim that the deposits had already been redeemed.
The fourth issue was whether BDO failed to exercise the degree of diligence required of banks in verifying the identity and authority of the person who purportedly redeemed the time deposits.
HELD
The Supreme Court DENIED both petitions and AFFIRMED WITH MODIFICATION the Court of Appeals' Decision and Resolution. BDO was ordered to pay Remedios and Angelita USD 100,000.70 plus the agreed interest, ₱100,000.00 moral damages, ₱300,000.00 exemplary damages, ₱150,000.00 attorney's fees, and costs of suit.
The Court held that the evidence favored Remedios and Angelita's claim that the three TDCs had not been redeemed. The Bureau of Immigration Certification and Angelita's passport established that she was outside the Philippines on May 28, 2001. It was therefore physically impossible for her to have personally appeared at BDO San Lorenzo on that date to redeem the deposits and sign the Demand Draft.
The testimony of PLt. Maggay further supported Angelita's denial. Although the handwriting expert could not make a definitive conclusion because the questioned signature was only a carbon copy, she identified dissimilarities between the signature on the Demand Draft and Angelita's standard signatures and opined that they were probably made by different persons. The Court considered this evidence together with the immigration and passport records.
The Court also considered the original TDCs still in the possession of Remedios and Angelita. Under the terms and conditions of the TDCs, the investor was required to surrender the TDC upon redemption. Their continued possession of the original TDCs therefore supported the finding that the deposits had not been redeemed.
The Court found that BDO's evidence did not overcome these circumstances. BDO relied on its computer-printed history data and the Demand Draft purportedly bearing Angelita's signature. However, the evidence showing that Angelita was not in the Philippines on the alleged redemption date, together with the handwriting testimony, undermined BDO's claim that she personally redeemed the deposits.
The Court emphasized that banks are required to exercise a high degree of diligence because of the fiduciary nature of their business. BDO failed to exercise the required diligence in verifying the identity and authority of the person who purportedly signed the Demand Draft and redeemed the substantial time deposits. The failure was particularly significant given that Angelita could not have personally appeared at the bank on the alleged redemption date.
The Court also noted that BDO admitted that it could no longer produce supporting documents relating to the transactions because its document-retention period had already expired. The Court considered this circumstance in assessing BDO's failure to establish its claim that the deposits had actually been redeemed.
As to the first time deposit covered by TDC No. 00846962, however, the Court agreed with the lower courts that the claim was not sufficiently established. Remedios and Angelita failed to present the actual TDC, and the official receipt was insufficient because it proved, at most, that a payment had been made. There was no sufficient explanation for the absence of the original TDC.
The Court sustained the award of moral damages, finding that BDO's failure to exercise the required degree of diligence caused Remedios and Angelita mental anguish and serious anxiety because they were deprived of the use and enjoyment of their investments. The Court also sustained exemplary damages and attorney's fees, considering BDO's failure to exercise the high degree of diligence required of banking institutions.
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