Dear Atty. Kathy,

I have two bank accounts in Bank X — a solo account and a joint account with my business partner, A. Most of the time, A does my onsite bank transactions for me. Unfortunately, I had a falling out with A and he was able to withdraw not just most of our money from the joint account, but also most of my money in my solo account. Apparently, A used our relationship to convince the teller that there was no need to do the usual verification procedures in withdrawal through a representative since he was authorized to transact in our joint account. However, I did not sign any authorization in favor of A to withdraw anything from my solo account. The teller informed me that I should go after A to get my money back. I do not know anymore where A is. Can the Bank be liable instead for the return of my money?

Park

Dear Park,

The Supreme Court has ruled in many cases that the banking business is one affected with public interest where the trust and confidence of the public in general is of paramount importance such that the appropriate standard of diligence must be very high, if not the highest, degree of diligence. Given 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, regardless if such accounts hold a few hundred pesos or millions.

Thus, in your case, Bank X was obligated to exercise the highest degree of diligence in handling your accounts and by ensuring that it complies with its own rules and regulations regarding withdrawals made through A, as your supposed representative. However, based solely on your narration, it appears that Bank X allowed A to withdraw even from your solo account without you signing any authorization. Clearly, the unauthorized withdrawal would not have happened if Bank X only verified A’s authority to withdraw from your solo account.

Bank X’s blatant disregard of procedures in verifying the authority of a representative to withdraw on behalf of a depositor constitutes a clear violation of the bank’s fiduciary obligation to its depositor and account holder. Consequently, Bank X should be held liable for the damages that you incurred due to the unauthorized withdrawal.

(Banco de Oro Universal Bank, Inc, et al. versus Liza A Seastres, et al., G.R. No. 257151, 13 February 2023)

Atty. Kathy Larios