BY ATTY. JULIUS GREGORY B. DELGADO

ANGELITA ANTONINO VS. BANCO DE ORO UNIVERSAL BANK, INC., G.R. NO. 273446; BANCO DE ORO UNIVERSAL BANK, INC. VS. REMEDIOS ANTONINO AND ANGELITA ANTONINO, G.R. NO. 273493 (APRIL 23, 2025): BANKS MAY BE HELD LIABLE FOR MORAL DAMAGES FOR FAILURE TO EXERCISE THE HIGHEST DEGREE OF DILIGENCE OWING TO THE FIDUCIARY NATURE OF THEIR BUSINESS 

Between 1998 and 2001, Remedios and Angelita entered into a placement/investment agreement with Banco de Oro Universal Bank, Inc. (BDO) at its San Lorenzo Branch for 50,007.71 US Dollars for a term of 46 days with an agreed interest of 6.26% per annum (Time Deposit No. 00846962); 50,000.70 US Dollars for a term of 30 days with an agreed interest of 6.375% per annum (Time Deposit No. 1117687); and 50,000.70 for a term of 30 days with an agreed interest rate of 5.625% per annum.

Remedios and Angelita averred that they had an agreement with the Bank Manager of BDO San Lorenzo to automatically roll-over the placements/investments, including all accrued interest, if the placements/investments were not redeemed or claimed on their due dates. This agreement was necessitated by the fact that they spent most of their time in the United Staes of America (USA), being green card holders of that country. The TDCs were not redeemed on the dates on which they fell due. They were left stored in a safety deposit box at Banco Filipino, Paseo de Roxas Branch (Banco Filipino Paseo de Roxas) for safekeeping.

Banco Filipino declared bankruptcy and was placed under receivership and liquidation by the Bangko Sentral ng Pilipinas (BSP). It was taken-over by the Philippine Deposit Insurance Company (PDIC), and the operations of Banco Filipino Paseo de Roxas, which kept the TDCs, was placed on hold in 2011. It took some time before Remedios and Angelita to retrieve their TDCs from the PDIC.

Meanwhile, BDO San Lorenzo eventually ceased operations and closed without notifying Remedios or Angelita. They only discovered the closure when they attempted to withdraw their investments after finally being able to retrieve their TDCs from the PDIC. Their demand letters to BDO went unheeded leading to the filing of a Complaint. In their Answer, BDO stated, among others, that Angelita supposedly withdrew already the proceeds on May 28, 2001 presenting a Demand Draft supposedly signed by Angelita. Angelita replied that she could not have withdrawn their investments or signed the Demand Draft because she was not in the Philippines on that date presenting a Certification from the Bureau of Immigration and her Passport. They also presented an expert witness from the Philippine National Police Crime Laboratory testifying that Angelita’s signature in the Demand Draft and her specimen signatures do not match. 

The Regional Trial Court of Makati City ruled in favor of Remedios and Angelita ordering BDO to pay the proceeds of their TDCs and pay Exemplary Damages and Attorney’s Fees. The Court of Appeals affirmed in toto the ruling of the trial court but it added Moral Damages in favor of Remedios and Angelita.  The Supreme Court ruled in favor of Remedios and Angelita stating that they were able to prove by preponderance of evidence of their entitlement to their TDCs with a total amount of USD100,000.70.

The Court held that Remedios and Angelita’s possession of the original TDCs strongly indicates that they have not withdrawn or redeemed the proceeds thereof. The Court noted that par. 9 of the terms and conditions of these TDCs state that, “This Certificate shall be surrendered to the bank upon redemption of the account together with the most recent Deposit Update Form.” The Court held that the original copies of the TDCs remained with Remedios and Angelita, and they have categorically denied making any withdrawal or redemption of their investments. If they have withdrawn the same, the TCDs should not longer be in their possession.

The Supreme Court also found no reason to disturb the findings of fact that Angelita was not in the Philippines from November 20, 2000 to June 9, 2003 as evidenced by the Certification of the Bureau of Immigration and that she departed from the Philippines on November 20, 2000 and arrived at the USA on the same date, and arrived back in the Philippines on June 9, 2003 as evidenced by her Passport. The Court also gave weight to the expert testimony from the PNP Crime Laboratory that Angelita may not have been the one who signed the Demand Draft supposedly withdrawing the proceeds of the TDCs.

On the argument of BDO that Remedios and Angelita are guilty of laches, the Supreme Court held that there is a standing agreement with BDO San Lorenzo Branch Manager regarding automatic rollover of the proceeds of the TDCs should they be unclaimed at maturity date. Par. 4 of the terms and conditions of the TDCs provides, “If this Time Deposit is not redeemed, renewed or rolled-over on its maturity date, it shall automatically earn interest as Savings Deposit from the date of maturity to the date of actual redemption, renewal or rollver.”

On the issue of Moral Damages imposed by the Court of Appeals, the Supreme Court expounded the same that such may be awarded if the bank failed to observe prudence and diligence higher than that of a good father of a family owing to the fiduciary nature of their business. The Court noted that BDO failed to present the documents relevant to the transactions citing sheer length of time. The Court held, “Considering these shortcomings, the CA correctly held that the bank’s failure to exercise the highest degree of diligence expected of it warrants the imposition of moral damages. This is further jusified by the mental anguish and serious anxiety suffered by Remedios and Angelita, who were deprived of the ability to use or enjoy the proceeds of their investments, which they had fully expected to realize. Keeping in mind that moral damages should not serve as a penalty, the Court finds it reasonable under the circumstances to set the award of moral damages at Php100,000.00.”