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1. THE CONSOLIDATED BANK and TRUST CORPORATION, petitioner, vs . COURT OF APPEALSand L.C. DIAZ and COMPANY, CPAs, respondents .

D E C I S I O N - CARPIO, J .:

T ! Cas!

Before us is a petition for review of the Decision [1] of the Court of Appeals dated 27 October 1998 and its

esolution dated 11 !a" 1999# $he assailed decision reversed the Decision[2]

of the e%ional $rial Court of !anila& Branch 8& absolvin% petitioner Consolidated Ban' and $rust Corporation& now 'nown as (olidban'Corporation )*(olidban'+,& of an" liabilit"# $he -uestioned resolution of the appellate court denied the .otionfor reconsideration of (olidban' but .odified the decision b" deletin% the award of e/e.plar" da.a%es&attorne"0s fees& e/penses of liti%ation and cost of suit#

T ! Fa"#s

(olidban' is a do.estic ban'in% corporation or%ani ed and e/istin% under hilippine laws# rivaterespondent 3#C# Dia and Co.pan"& C A0s )*3#C# Dia +,& is a professional partnership en%a%ed in the practiceof accountin%#

(o.eti.e in !arch 1974& 3#C# Dia opened a savin%s account with (olidban'& desi%nated as (avin%s Account 5o# (6A 2 14872 4#

On 1 Au%ust 1991& 3#C# Dia throu%h its cashier& !ercedes !acara"a )*!acara"a+,& filled up a savin%s)cash, deposit slip for 99 and a savin%s )chec's, deposit slip for : # !acara"a instructed the .essen%er of 3#C# Dia & ;s.ael Calapre )*Calapre+,& to deposit the .one" with (olidban'# !acara"a also %ave Calaprethe (olidban' passboo'#

Calapre went to (olidban' and presented to $eller 5o# 4 the two deposit slips and the passboo'# $heteller ac'nowled%ed receipt of the deposit b" returnin% to Calapre the duplicate copies of the two depositslips# $eller 5o# 4 sta.ped the deposit slips with the words *D< 3;CA$=+ and *(A>;5? $=33= 4(O3;DBA5@ =AD O ;C=#+ (ince the transaction too' ti.e and Calapre had to .a'e another deposit for 3#C# Dia with Allied Ban'& he left the passboo' with (olidban'# Calapre then went to Allied Ban'# henCalapre returned to (olidban' to retrieve the passboo'& $eller 5o# 4 infor.ed hi. that *so.ebod" %ot thepassboo'#+ [ ] Calapre went bac' to 3#C# Dia and reported the incident to !acara"a#

!acara"a i..ediatel" prepared a deposit slip in duplicate copies with a chec' of 2 & # !acara"a&to%ether with Calapre& went to (olidban' and presented to $eller 5o# 4 the deposit slip and chec'# $he teller sta.ped the words *D< 3;CA$=+ and *(A>;5? $=33= 4 (O3;DBA5@ =AD O ;C=+ on the duplicatecop" of the deposit slip# hen !acara"a as'ed for the passboo'& $eller 5o# 4 told !acara"a that so.eone %otthe passboo' but she could not re.e.ber to who. she %ave the passboo'# hen !acara"a as'ed $eller 5o#4 if Calapre %ot the passboo'& $eller 5o# 4 answered that so.eone shorter than Calapre %ot the passboo'#Calapre was then standin% beside !acara"a#

$eller 5o# 4 handed to !acara"a a deposit slip dated 1 Au%ust 1991 for the deposit of a chec'for 9 & drawn on hilippine Ban'in% Corporation )* BC+,# $his BC chec' of 3#C# Dia was a chec' that ithad *lon% closed#+ [ ] BC subse-uentl" dishonored the chec' because of insufficient funds and because thesi%nature in the chec' differed fro. BC0s speci.en si%nature# ailin% to %et bac' the passboo'& !acara"awent bac' to her office and reported the .atter to the ersonnel !ana%er of 3#C# Dia & =..anuel Alvare #

$he followin% da"& 1: Au%ust 1991& 3#C# Dia throu%h its Chief =/ecutive Officer& 3uis C# Dia )*Dia +,&called up (olidban' to stop an" transaction usin% the sa.e passboo' until 3#C# Dia could open a newaccount #[:] On the sa.e da"& Dia for.all" wrote (olidban' to .a'e the sa.e re-uest# ;t was also on thesa.e da" that 3#C# Dia learned of the unauthori ed withdrawal the da" before& 1 Au%ust 1991& of &fro. its savin%s account# $he withdrawal slip for the & bore the si%natures of the authori edsi%natories of 3#C# Dia & na.el" Dia and ustico 3# !urillo# $he si%natories& however& denied si%nin% thewithdrawal slip# A certain 5oel $a.a"o received the & #

;n an ;nfor.ation [4] dated : (epte.ber 1991& 3#C# Dia char%ed its .essen%er& =.erano ;la%an )*;la%an+,and one oscon >erda ola with =stafa throu%h alsification of Co..ercial Docu.ent# $he e%ional $rial
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Court of !anila dis.issed the cri.inal case after the Cit" rosecutor filed a !otion to Dis.iss on Au%ust1992#

On 2 Au%ust 1992& 3#C# Dia throu%h its counsel de.anded fro. (olidban' the return of its.one"# (olidban' refused#

On 2: Au%ust 1992& 3#C# Dia filed a Co.plaint [7] for ecover" of a (u. of !one" a%ainst (olidban' withthe e%ional $rial Court of !anila& Branch 8# After trial& the trial court rendered on 28 Dece.ber 199 adecision absolvin% (olidban' and dis.issin% the co.plaint#

3#C# Dia then appealed [8] to the Court of Appeals# On 27 October 1998& the Court of Appeals issued itsDecision reversin% the decision of the trial court#

On 11 !a" 1999& the Court of Appeals issued its esolution den"in% the .otion for reconsideration of (olidban'# $he appellate court& however& .odified its decision b" deletin% the award of e/e.plar" da.a%esand attorne"0s fees#

T ! R$%&n' () # ! T*&a% C($*#

;n absolvin% (olidban'& the trial court applied the rules on savin%s account written on the passboo'# $herules state that *possession of this boo' shall raise the presu.ption of ownership and an" pa".ent or pa".ents .ade b" the ban' upon the production of the said boo' and entr" therein of the withdrawal shallhave the sa.e effect as if .ade to the depositor personall"#+ [9]

At the ti.e of the withdrawal& a certain 5oel $a.a"o was not onl" in possession of the passboo'& he alsopresented a withdrawal slip with the si%natures of the authori ed si%natories of 3#C# Dia # $he speci.ensi%natures of these persons were in the si%nature cards# $he teller sta.ped the withdrawal slip with the words*(avin% $eller 5o# :#+ $he teller then passed on the withdrawal slip to ?enere !anuel )*!anuel+, for authentication# !anuel verified the si%natures on the withdrawal slip# $he withdrawal slip was then %iven toanother officer who co.pared the si%natures on the withdrawal slip with the speci.en on the si%nature cards#$he trial court concluded that (olidban' acted with care and observed the rules on savin%s account when itallowed the withdrawal of & fro. the savin%s account of 3#C# Dia #

$he trial court pointed out that the burden of proof now shifted to 3#C# Dia to prove that the si%natures onthe withdrawal slip were for%ed# $he trial court ad.onished 3#C# Dia for not offerin% in evidence the 5ationalBureau of ;nvesti%ation )*5B;+, report on the authenticit" of the si%natures on the withdrawal slip

for & # $he trial court believed that 3#C# Dia did not offer this evidence because it is dero%ator" to itsaction#

Another provision of the rules on savin%s account states that the depositor .ust 'eep the passboo' *under loc' and 'e"#+ [1 ] hen another person presents the passboo' for withdrawal prior to (olidban'0s receipt of thenotice of loss of the passboo'& that person is considered as the owner of the passboo'# $he trial court ruledthat the passboo' presented durin% the -uestioned transaction was *now out of the loc' and 'e" andpresu.ptivel" read" for a business transaction#+ [11]

(olidban' did not have an" participation in the custod" and care of the passboo'# $he trial court believedthat (olidban'0s act of allowin% the withdrawal of & was not the direct and pro/i.ate cause of the loss#$he trial court held that 3#C# Dia 0s ne%li%ence caused the unauthori ed withdrawal# $hree facts establish 3#C#Dia 0s ne%li%enceE )1, the possession of the passboo' b" a person other than the depositor 3#C# Dia F )2, the

presentation of a si%ned withdrawal receipt b" an unauthori ed personF and ) , the possession b" anunauthori ed person of a BC chec' *lon% closed+ b" 3#C# Dia & which chec' was deposited on the da" of thefraudulent withdrawal#

$he trial court debun'ed 3#C# Dia 0s contention that (olidban' did not follow the precautionar" proceduresobserved b" the two parties whenever 3#C# Dia withdrew si%nificant a.ounts fro. its account# 3#C# Diaclai.ed that a letter .ust acco.pan" withdrawals of .ore than 2 & # $he letter .ust re-uest (olidban' toallow the withdrawal and convert the a.ount to a .ana%er0s chec'# $he bearer .ust also have a letter authori in% hi. to withdraw the sa.e a.ount# Another person drivin% a car .ust acco.pan" the bearer sothat he would not wal' fro. (olidban' to the office in .a'in% the withdrawal# $he trial court pointed out that3#C# Dia disre%arded these precautions in its past withdrawal# On 14 Gul" 1991& 3#C# Dia withdrew 82&::
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without an" separate letter of authori ation or an" co..unication with (olidban' that the .one" be convertedinto a .ana%er0s chec'#

$he trial court further Hustified the dis.issal of the co.plaint b" holdin% that the case was a last ditch effortof 3#C# Dia to recover & after the dis.issal of the cri.inal case a%ainst ;la%an#

$he dispositive portion of the decision of the trial court readsE

;5 >;= O $ = O =?O;5?& Hud%.ent is hereb" rendered D;(!;((;5? the co.plaint#

$he Court further renders Hud%.ent in favor of defendant ban' pursuant to its counterclai. the a.ount of$hirt" $housand esos ) & # , as attorne"0s fees#

ith costs a%ainst plaintiff# (O O D= =D# [12]

T ! R$%&n' () # ! C($*# () A++!a%s

$he Court of Appeals ruled that (olidban'0s ne%li%ence was the pro/i.ate cause of the unauthori edwithdrawal of & fro. the savin%s account of 3#C# Dia # $he appellate court reached this conclusionafter appl"in% the provision of the Civil Code on -uasi delict& to witE

Article 2174# hoever b" act or o.ission causes da.a%e to another& there bein% fault or ne%li%ence& isobli%ed to pa" for the da.a%e done# (uch fault or ne%li%ence& if there is no pre e/istin% contractual relationbetween the parties& is called a -uasi delict and is %overned b" the provisions of this chapter#

$he appellate court held that the three ele.ents of a -uasi delict are present in this case& na.el"E )a, da.a%essuffered b" the plaintiffF )b, fault or ne%li%ence of the defendant& or so.e other person for whose acts he .ustrespondF and )c, the connection of cause and effect between the fault or ne%li%ence of the defendant and theda.a%e incurred b" the plaintiff#

$he Court of Appeals pointed out that the teller of (olidban' who received the withdrawal slip for &allowed the withdrawal without .a'in% the necessar" in-uir"# $he appellate court stated that the teller& whowas not presented b" (olidban' durin% trial& should have called up the depositor because the .one" to be

withdrawn was a si%nificant a.ount# ad the teller called up 3#C# Dia & (olidban' would have 'nown that thewithdrawal was unauthori ed# $he teller did not even verif" the identit" of the i.postor who .ade thewithdrawal# $hus& the appellate court found (olidban' liable for its ne%li%ence in the selection and supervisionof its e.plo"ees#

$he appellate court ruled that while 3#C# Dia was also ne%li%ent in entrustin% its deposits to its .essen%er and its .essen%er in leavin% the passboo' with the teller& (olidban' could not escape liabilit" because of thedoctrine of *last clear chance#+ (olidban' could have averted the inHur" suffered b" 3#C# Dia had it called up3#C# Dia to verif" the withdrawal#

$he appellate court ruled that the de%ree of dili%ence re-uired fro. (olidban' is .ore than that of a %oodfather of a fa.il"# $he business and functions of ban's are affected with public interest# Ban's are obli%ated totreat the accounts of their depositors with .eticulous care& alwa"s havin% in .ind the fiduciar" nature of their

relationship with their clients# $he Court of Appeals found (olidban' re.iss in its dut"& violatin% its fiduciar"relationship with 3#C# Dia #

$he dispositive portion of the decision of the Court of Appeals readsE

= = O =& pre.ises considered& the decision appealed fro. is hereb" =>= (=D and a new oneentered#

1# Orderin% defendant appellee Consolidated Ban' and $rust Corporation to pa" plaintiff appellantthe su. of $hree undred $housand esos ) & # ,& with interest thereon at the rate of12I per annu. fro. the date of filin% of the co.plaint until paid& the su. of 2 & # as
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e/e.plar" da.a%es& and 2 & # as attorne"0s fees and e/penses of liti%ation as well asthe cost of suitF and

2# Orderin% the dis.issal of defendant appellee0s counterclai. in the a.ount of & # asattorne"0s fees#

(O O D= =D# [1 ]

Actin% on the .otion for reconsideration of (olidban'& the appellate court affir.ed its decision but .odified theaward of da.a%es# $he appellate court deleted the award of e/e.plar" da.a%es and attorne"0s fees#;nvo'in% Article 22 1 [1 ] of the Civil Code& the appellate court ruled that e/e.plar" da.a%es could be %ranted if the defendant acted with %ross ne%li%ence# (ince (olidban' was %uilt" of si.ple ne%li%ence onl"& the award of e/e.plar" da.a%es was not Hustified# Conse-uentl"& the award of attorne"0s fees was also disallowedpursuant to Article 22 8 of the Civil Code# $he e/penses of liti%ation and cost of suit were also not i.posed on(olidban'#

$he dispositive portion of the esolution reads as followsE

= = O =& fore%oin% considered& our decision dated October 27& 1998 is affir.ed with .odification b"deletin% the award of e/e.plar" da.a%es and attorne"0s fees& e/penses of liti%ation and cost of suit#

(O O D= =D# [1:]

ence& this petition#

T ! Iss$!s

(olidban' see's the review of the decision and resolution of the Court of Appeals on these %roundsE

;# $ = CO< $ O A =A3( = =D ;5 O3D;5? $ A$ =$;$;O5= BA5@ ( O;5?( ACCO= $ = (A!= O! ;$( =! 3OJ== =!= A5O;3A?A5#

;># $ = CO< $ O A =A3( = =D ;5 5O$ !;$;?A$;5? $ = DA!A?=( A A D=D A?A;5($ =$;$;O5= ;3 COD=& 5O$ ;$ ($A5D;5?;$( ;5D;5? $ A$ =$;$;O5= BA5@0( 5=?3;?=5C= A( O53J CO5$ ;B

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T ! R$%&n' () # ! C($*#

$he petition is partl" .eritorious#

Solidbanks Fiduciary Duty under the Law

$he rulin%s of the trial court and the Court of Appeals conflict on the application of the law# $he trial courtpinned the liabilit" on 3#C# Dia based on the provisions of the rules on savin%s account& a reco%nition of thecontractual relationship between (olidban' and 3#C# Dia & the latter bein% a depositor of the for.er# On theother hand& the Court of Appeals applied the law on -uasi delict to deter.ine who between the two parties wasulti.atel" ne%li%ent# $he law on -uasi delict or culpa aquiliana is %enerall" applicable when there is no pree/istin% contractual relationship between the parties#

e hold that (olidban' is liable for breach of contract due to ne%li%ence& or culpa contractual.

$he contract between the ban' and its depositor is %overned b" the provisions of the Civil Code on si.pleloan# [17] Article 198 of the Civil Code e/pressl" provides that */ / / savin%s / / / deposits of .one" in ban'sand si.ilar institutions shall be %overned b" the provisions concernin% si.ple loan#+ $here is a debtor creditor relationship between the ban' and its depositor# $he ban' is the debtor and the depositor is the creditor# $hedepositor lends the ban' .one" and the ban' a%rees to pa" the depositor on de.and# $he savin%s deposita%ree.ent between the ban' and the depositor is the contract that deter.ines the ri%hts and obli%ations of theparties#

$he law i.poses on ban's hi%h standards in view of the fiduciar" nature of ban'in%# (ection 2 of epublic Act 5o# 8791 )* A 8791+,& [18] which too' effect on 1 Gune 2 & declares that the (tate reco%ni es the*fiduciar" nature of ban'in% that re-uires hi%h standards of inte%rit" and perfor.ance#+ [19] $his new provision inthe %eneral ban'in% law& introduced in 2 & is a statutor" affir.ation of (upre.e Court decisions& startin% withthe 199 case of Simex International v. ourt o! "ppeals &[2 ] holdin% that *the ban' is under obli%ation totreat the accounts of its depositors with .eticulous care& alwa"s havin% in .ind the fiduciar" nature of their relationship#+ [21]

$his fiduciar" relationship .eans that the ban'0s obli%ation to observe *hi%h standards of inte%rit" andperfor.ance+ is dee.ed written into ever" deposit a%ree.ent between a ban' and its depositor# $he fiduciar"nature of ban'in% re-uires ban's to assu.e a de%ree of dili%ence hi%her than that of a %ood father of afa.il"# Article 1172 of the Civil Code states that the de%ree of dili%ence re-uired of an obli%or is thatprescribed b" law or contract& and absent such stipulation then the dili%ence of a %ood father of a fa.il"#[22] (ection 2 of A 8791 prescribes the statutor" dili%ence re-uired fro. ban's K that ban's .ust observe*hi%h standards of inte%rit" and perfor.ance+ in servicin% their depositors# Althou%h A 8791 too' effectal.ost nine "ears after the unauthori ed withdrawal of the & fro. 3#C# Dia 0s savin%s account&

Hurisprudence [2 ] at the ti.e of the withdrawal alread" i.posed on ban's the sa.e hi%h standard of dili%encere-uired under A 5o# 8791#

owever& the fiduciar" nature of a ban' depositor relationship does not convert the contract between theban' and its depositors fro. a si.ple loan to a trust a%ree.ent& whether e/press or i.plied# ailure b" theban' to pa" the depositor is failure to pa" a si.ple loan& and not a breach of trust# [2 ] $he law si.pl" i.poseson the ban' a hi#her standard of inte%rit" and perfor.ance in co.pl"in% with its obli%ations under thecontract of si.ple loan& be"ond those re-uired of non ban' debtors under a si.ilar contract of si.ple loan#

$he fiduciar" nature of ban'in% does not convert a si.ple loan into a trust a%ree.ent because ban's donot accept deposits to enrich depositors but to earn .one" for the.selves# $he law allows ban's to offer thelowest possible interest rate to depositors while char%in% the hi%hest possible interest rate on their ownborrowers# $he interest spread or differential belon%s to the ban' and not to the depositors who are not cestui que trust of ban's# ;f depositors are cestui que trust of ban's& then the interest spread or inco.e belon%s tothe depositors& a situation that Con%ress certainl" did not intend in enactin% (ection 2 of A 8791#
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Solidbanks $reach o! its ontractual %bli#ation

Article 1172 of the Civil Code provides that *responsibilit" arisin% fro. ne%li%ence in the perfor.ance of ever" 'ind of obli%ation is de.andable#+ or breach of the savin%s deposit a%ree.ent due to ne%li%ence&or culpa contractual & the ban' is liable to its depositor#

Calapre left the passboo' with (olidban' because the *transaction too' ti.e+ and he had to %o to AlliedBan' for another transaction# $he passboo' was still in the hands of the e.plo"ees of (olidban' for the

processin% of the deposit when Calapre left (olidban'# (olidban'0s rules on savin%s account re-uire that the*deposit boo' should be carefull" %uarded b" the depositor and 'ept under loc' and 'e"& if possible#+ hen thepassboo' is in the possession of (olidban'0s tellers durin% withdrawals& the law i.poses on (olidban' and itstellers an even hi%her de%ree of dili%ence in safe%uardin% the passboo'#

3i'ewise& (olidban'0s tellers .ust e/ercise a hi%h de%ree of dili%ence in insurin% that the" return thepassboo' onl" to the depositor or his authori ed representative# $he tellers 'now& or should 'now& that therules on savin%s account provide that an" person in possession of the passboo' is presu.ptivel" its owner# ;f the tellers %ive the passboo' to the wron% person& the" would be clothin% that person presu.ptive ownershipof the passboo'& facilitatin% unauthori ed withdrawals b" that person# or failin% to return the passboo' toCalapre& the authori ed representative of 3#C# Dia & (olidban' and $eller 5o# 4 presu.ptivel" failed to observesuch hi%h de%ree of dili%ence in safe%uardin% the passboo'& and in insurin% its return to the part" authori ed toreceive the sa.e#

;n culpa contractual & once the plaintiff proves a breach of contract& there is a presu.ption that thedefendant was at fault or ne%li%ent# $he burden is on the defendant to prove that he was not at fault or ne%li%ent# ;n contrast& in culpa aquiliana the plaintiff has the burden of provin% that the defendant wasne%li%ent# ;n the present case& 3#C# Dia has established that (olidban' breached its contractual obli%ation toreturn the passboo' onl" to the authori ed representative of 3#C# Dia # $here is thus a presu.ption that(olidban' was at fault and its teller was ne%li%ent in not returnin% the passboo' to Calapre# $he burden wason (olidban' to prove that there was no ne%li%ence on its part or its e.plo"ees#

(olidban' failed to dischar%e its burden# (olidban' did not present to the trial court $eller 5o# 4& the teller with who. Calapre left the passboo' and who was supposed to return the passboo' to hi.# $he record doesnot indicate that $eller 5o# 4 verified the identit" of the person who retrieved the passboo'# (olidban' alsofailed to adduce in evidence its standard procedure in verif"in% the identit" of the person retrievin% thepassboo'& if there is such a procedure& and that $eller 5o# 4 i.ple.ented this procedure in the present case#

(olidban' is bound b" the ne%li%ence of its e.plo"ees under the principle of respondeat superior orco..and responsibilit"# $he defense of e/ercisin% the re-uired dili%ence in the selection and supervision of e.plo"ees is not a co.plete defense in culpa contractual & unli'e in culpa aquiliana #[2:]

$he ban' .ust not onl" e/ercise *hi%h standards of inte%rit" and perfor.ance&+ it .ust also insure that itse.plo"ees do li'ewise because this is the onl" wa" to insure that the ban' will co.pl" with its fiduciar"dut"# (olidban' failed to present the teller who had the dut" to return to Calapre the passboo'& and thus failedto prove that this teller e/ercised the *hi%h standards of inte%rit" and perfor.ance+ re-uired of (olidban'0se.plo"ees#

&roximate ause o! the 'nauthori(ed )ithdrawal

Another point of disa%ree.ent between the trial and appellate courts is the pro/i.ate cause of theunauthori ed withdrawal# $he trial court believed that 3#C# Dia 0s ne%li%ence in not securin% its passboo'under loc' and 'e" was the pro/i.ate cause that allowed the i.postor to withdraw the & # or theappellate court& the pro/i.ate cause was the teller0s ne%li%ence in processin% the withdrawal without firstverif"in% with 3#C# Dia # e do not a%ree with either court#

ro/i.ate cause is that cause which& in natural and continuous se-uence& unbro'en b" an" efficientintervenin% cause& produces the inHur" and without which the result would not have occurred# [24] ro/i.atecause is deter.ined b" the facts of each case upon .i/ed considerations of lo%ic& co..on sense& polic" andprecedent# [27]
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3#C# Dia was not at fault that the passboo' landed in the hands of the i.postor# (olidban' was inpossession of the passboo' while it was processin% the deposit# After co.pletion of the transaction& (olidban'had the contractual obli%ation to return the passboo' onl" to Calapre& the authori ed representative of 3#C#Dia # (olidban' failed to fulfill its contractual obli%ation because it %ave the passboo' to another person#

(olidban'0s failure to return the passboo' to Calapre .ade possible the withdrawal of the & b" thei.postor who too' possession of the passboo'#

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recoverin% da.a%es caused b" the supervenin% ne%li%ence of the defendant& who had the last fair chance toprevent the i.pendin% har. b" the e/ercise of due dili%ence# [ ]

e do not appl" the doctrine of last clear chance to the present case# (olidban' is liable for breach of contract due to ne%li%ence in the perfor.ance of its contractual obli%ation to 3#C# Dia # $his is a case of culpacontractual & where neither the contributor" ne%li%ence of the plaintiff nor his last clear chance to avoid the loss&would e/onerate the defendant fro. liabilit"# [ 1] (uch contributor" ne%li%ence or last clear chance b" the plaintiff .erel" serves to reduce the recover" of da.a%es b" the plaintiff but does not e/culpate the defendant fro. hisbreach of contract# [ 2]

*iti#ated Dama#es

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application was a certification [4] fro. the Cler' of Court of the e%ional $rial Court of ;ba&La.bales& statin% that @B ; had paid the correspondin% foreclosure fees coverin% B!C0sproperties situated in La.bales and 3a%una#

On October 1& 2 1& B!C filed with the Office of the =/ecutive Gud%e of the e%ional$rial Court of (an ablo Cit" a * e-uest 5ot $o ?ive Due Course $o $he Application for =/tra Gudicial oreclosureM+ [7] in =G 5o# (p 2: 4 ) 1,# B!C clai.ed that the applicationshould be denied because it is insufficient in for. and substance and there is no need toproceed with the foreclosure of its properties situated in 3a%una because it was willin% toe/ecute a dacion en pago in place of the .ort%a%ed properties# (ubse-uentl"& B!C fileda *Co.pliance and (upple.entar" ?rounds to Disapprove Application for =/tra Hudicial

oreclosure of eal =state !ort%a%e+ [8] and a !e.orandu.# [9] B!C contended that theapplication for foreclosure should be denied because @B ; included unauthori edpenalties in the state.ent of accounts and it did not co.pl" with its obli%ation to %ive B!Ca 4 da" %race period# B!C further clai.ed that the !$; securin% the principal loan of

19 !illion cannot be foreclosed because it was not re%istered with the e%ister of Deeds#

@B ; opposed the letter re-uest of B!C on the %round& inter alia & of wron% re.ed"and foru. shoppin%# [1 ]

!eanwhile& on 5ove.ber 7& 2 1& B!C filed with the e%ional $rial Court of ;ba&La.bales& Branch 7 & a co.plaint for da.a%es& accountin% and nullification of foreclosureof its properties in La.bales& with pra"er for the issuance of a te.porar" restrainin% order&doc'eted as Civil Case 5o# $C 18:2 ;# [11] B!C averred that the foreclosure of itsproperties should be annulled because @B ; i.posed unauthori ed penalties& interest andchar%es# Assu.in% that the a.ount clai.ed is due and de.andable& B!C .aintainedthat the sa.e cannot be enforced because @B ; did not co.pl" with the 4 da" %race

period# B!C added that dacion en pago should be preferred over the foreclosure of thecollaterals because the other respondent ban's are a%reeable to such proposal#

On the sa.e date& the e%ional $rial Court of ;ba& La.bales issued a te.porar"restrainin% order enHoinin% the sale at public auction of B!C0s properties in La.bales# [12]

On ebruar" 4& 2 2& @B ;0s application for e/traHudicial foreclosure of .ort%a%e wasfound to be sufficient in for. and substance& and was %ranted# [1 ] B!C filed a .otion for reconsideration& which was denied on !arch & 2 2# [1 ]

ence& B!C filed a petition for certiorari with the Court of Appeals& [1:] reiteratin% itsar%u.ents in =G 5o# (p 2: 4 ) 1, and assailin% the validit" of the foreclosure of itsproperties in 3a%una# ;t pra"ed for the issuance of a preli.inar" inHunction and6or te.porar" restrainin% order to enHoin the scheduled sale of its properties in 3a%una on!arch 19& 2 2 at 1 E p.# (ince no inHunction or restrainin% order was issued b" theCourt of Appeals& the auction sale proceeded as scheduled with @B ; as the hi%hestbidder#

$o restrain the re%istration of the certificate of sale& [14] B!C filed a (upple.entaletition [17] which was favorabl" acted upon b" the Court of Appeals on !arch 22& 2 2#

[18] On the sa.e da"& a te.porar" restrainin% order enHoinin% the re%istration of the
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certificate of sale was issued b" the appellate court& albeit& late as the certificate wasalread" re%istered at 2E1: p#.# of !arch 22& 2 2#

(ubse-uentl"& B!C filed with the appellate court an A.ended (upple.ental etition&[19] followed b" an

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T") - T)&)ST ;AS)' + T") * +AT- 9 &AT) ST-PU AT)' - T") P&+M-SS+&< +T)S -S U A ' :+-' *+& ;)- 9 P+T)STAT-:) - "A&A T)& A ' *+&;)- 9 :-+ AT-:) +* T") P&- -P ) +* MUTUA -T< +* + T&A T, ") ) T")*+&) +SU&) MA< P&+ ))' + < + ) T") +&&) T )9A AM+U T +* T")

+A -S ')T)&M- )' A ' + < -* T") M+&T9A9+& A +T PA< *+ +(- 9T"AT ')T)&M- AT-+ ! 2?8

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On Gune 24& 2 2& a status quo order was issued enHoinin% the cancellation of titlesover the .ort%a%ed properties in the na.e of B!C as well as the issuance of new titlesand the consolidation thereof in the na.e of private respondent ban's [2 ]

e dee. it proper to resolve the issue of foru. shoppin% raised b" privaterespondents#

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!a'ati and BiNan& 3a%una )Branch 2 , courts were concerned# $he obvious reason isthat since inHunction is enforceable onl" within the territorial li.its of the trial court& the.ort%a%or is left without re.ed" as to the properties located outside the Hurisdiction of theissuin% court& unless an application for inHunction is .ade with another court which has

Hurisdiction over the latter properties#

;n the case at bar& B!C is not %uilt" of foru. shoppin% precisel" because the re.ed"available to the. under the law was the filin% of separate inHunction suits# ;t is .andatedto file onl" one case for a sin%le cause of action& e.g #& breach of .ort%a%e contract& "et& itcannot enforce an" inHunctive writ issued b" the court to protect its properties situatedoutside the Hurisdiction of said court# Besides& B!C was honest enou%h to infor. theLa.bales court in the certification [27] of its co.plaint that it has a pendin% re-uest not to%ive due course to the foreclosure proceedin%s with the (an ablo court& in the sa.e.anner that its petition for certiorari with the Court of Appeals notified the appellate courtof the pendenc" of its co.plaint with the La.bales court# [28] ;t would therefore be unfair todis.iss the cases filed b" B!C on the %round of foru. shoppin% where under thecircu.stances the law %ives it no other re.ed"#

$he issues involved in the instant petition for certiorari are not onl" li.ited to thepropriet" of the Court of Appeals0 denial of B!C0s pra"er to enHoin the consolidation of titleof the foreclosed properties in the na.e of private respondents# $here are li'ewise raisedfactual issues& i.e. & the validit" of the foreclosure and the sale at public auction of itsproperties& which are "et to be resolved b" the Court of Appeals# (ince this Court is not atrier of facts& the re.and of this case to the appellate court is necessar"#

Anent the constitutional issue raised b" B!C& we have repeatedl" held that theconstitutionalit" of a law .a" be passed upon b" the Court& where there is an actual caseand that the resolution of the constitutional -uestion .ust be necessar" in decidin% the

controvers" #[29]

;n this case& the resolution of the constitutionalit" of (ection 7 of the?eneral Ban'in% Act ) epublic Act 5o# 8791, which reduced the period of rede.ption of e/tra Hudiciall" foreclosed properties of Huridical persons is not the ver" lis mota of thecontrovers"# B!C is not assertin% a le%al ri%ht for which it is entitled to a Hudicialdeter.ination at this ti.e inas.uch as it .a" not even be entitled to redee. theforeclosed properties#

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totallin% 8:1&2: less the I .ar%inal deposit that he had paid# !arcos ar%ued that if onl" the BA5@ applied his ti.e deposits and the accu.ulated interest to his re.ainin%obli%ation& which is 7 I of the total a.ount of the letters of credit& he would have paidco.pletel" his debt# !arcos further pointed out that since he did not appl" for a renewal of the trust receipt a%ree.ents& the BA5@ had no ri%ht to renew the sa.e#

!arcos accused the BA5@ of unHustl" de.andin% pa".ent for the total a.ount of thetrust receipt a%ree.ents without deductin% the I .ar%inal deposit that he had alread".ade# e decried the BA5@0s unlawful char%in% of accu.ulated interest because heclai.ed there was no a%ree.ent as to the pa".ent of interest# $he interest arose fro.nu.erous alle%ed e/tensions and penalties# !arcos reiterated that there was noa%ree.ent to this effect because his ti.e deposits served as the collateral for hisre.ainin% obli%ation#

!arcos also denied that he obtained another loan fro. the BA5@ for : & withinterest at 2:I per annum supposedl" covered b" ro.issor" 5ote 5o# 2 979 8 dated2 October 198 # !arcos bewailed the BA5@0s belated clai. that his ti.e deposits wereapplied to this void pro.issor" note on 12 !arch 198:#

;n su.& !arcos clai.ed thatE

)1, his ti.e deposit with the BA5@ *in the total su. of 1& 28&79:# [:] hasearned accu.ulated interest since !arch 1982 up to the present in the total a.ountof 1&727& :# : at the rate of 17I per annum so his total .one" with defendant )theBA5@, is &1:4&1 #79 less the a.ount of :9:&87: representin% the 7 I balance of the .ar%inal deposit and6or balance of the trust a%ree.entsF+ and

)2, his indebtedness was onl" 8:1&2: less the I paid as .ar%inal depositor a balance of :9:&87:& which the BA5@ should have auto.aticall" deducted fro. his

ti.e deposits and accu.ulated interest& leavin% the BA5@0s indebtedness to hi.at 2&:4 & 2:#79#

!arcos pra"ed the trial court to declare ro.issor" 5ote 5o# 2 979 8 void and toorder the BA5@ to pa" the a.ount of his ti.e deposits with interest# e also sou%ht theaward of .oral and e/e.plar" da.a%es as well as attorne"0s fees for 2 & plus 2:Iof the a.ount due#

On 18 (epte.ber 1989& su..ons and a cop" of the co.plaint were served on theBA5@#[4]

On 9 October 1989& the BA5@ filed its Answer with Counterclai.# $he BA5@ deniedthe alle%ations in the co.plaint# $he BA5@ believed that the suit was !arcos0 desperateatte.pt to avoid liabilit" under several trust receipt a%ree.ents that were the subHect of acri.inal co.plaint#

$he BA5@ alle%ed that as of 12 !arch 1982& the total a.ount of the various ti.edeposits of !arcos was onl" 74 &897#47 and not 1& 28&79:# : [7] as alle%ed in theco.plaint# $he 74 &897#47 included the 44 &897#47 that !arcos deposited on 11!arch 1982#
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$he BA5@ pointed out that !arcos delivered to the BA5@ the ti.e deposit certificatesb" virtue of the Deed of Assi%n.ent dated 2 Gune 1989# !arcos e/ecuted the Deed of

Assi%n.ent to secure his various loan obli%ations# $he BA5@ clai.ed that these loansare covered b" ro.issor" 5ote 5o# 2 7:4 82 dated 2 Gune 1982 for 2 & and

ro.issor" 5ote 5o# 2 979 8 dated 2 October 198 for : & # $he BA5@stressed that these obli%ations are separate and distinct fro. the trust receipta%ree.ents#

hen !arcos defaulted in the pa".ent of ro.issor" 5ote 5o# 2 979 8 & the BA5@debited his ti.e deposits and applied the sa.e to the obli%ation that is now consideredfull" paid# [8] $he BA5@ insisted that the Deed of Assi%n.ent authori ed it to appl" the ti.edeposits in pa".ent of ro.issor" 5ote 5o# 2 979 8 #

;n !arch 1982& the wife of !arcos& Consolacion !arcos& sou%ht the advice of a%sali%an# Consolacion infor.ed a%sali%an that she and her husband needed to

finance the purchase of construction .aterials for their business& 3#A# !arcosConstruction Co.pan"# a%sali%an su%%ested the openin% of the letters of credit and thee/ecution of trust receipts& whereb" the BA5@ would a%ree to purchase the %oods neededb" the client throu%h the letters of credit# $he BA5@ would then entrust the %oods to theclient& as entrustee& who would underta'e to deliver the proceeds of the sale or the %oodsthe.selves to the entrustor within a specified ti.e#

$he BA5@ clai.ed that !arcos freel" entered into the trust receipt a%ree.ents# hen!arcos failed to account for the %oods delivered or for the proceeds of the sale& the BA5@filed a co.plaint for violation of residential Decree 5o# 11: or the $rust eceipts3aw# ;nstead of initiatin% ne%otiations for the settle.ent of the account& !arcos filed thissuit#

$he BA5@ denied falsif"in% ro.issor" 5ote 5o# 2 979 8 # $he BA5@ clai.ed thatthe pro.issor" note is supported b" docu.entar" evidence such as !arcos0 applicationfor this loan and the .icrofil. of the cashier0s chec' issued for the loan# $he BA5@insisted that !arcos could not den" the a%ree.ent for the pa".ent of interest andpenalties under the trust receipt a%ree.ents# $he BA5@ pra"ed for the dis.issal of theco.plaint& pa".ent of da.a%es& attorne"0s fees and cost of suit#

On 1: Dece.ber 1989& the trial court on .otion of !arcos0 counsel issued an order declarin% the BA5@ in default for filin% its answer five da"s after the 1: da" period to filethe answer had lapsed# [9] $he trial court also held that the answer is a .ere scrap of paper because a cop" was not furnished to !arcos# ;n the sa.e order& the trial court allowed

!arcos to present his evidence ex parte on 18 Dece.ber 1989# On that date& !arcostestified and presented docu.entar" evidence# $he case was then sub.itted for decision#

On 19 Dece.ber 1989& !arcos received a cop" of the BA5@0s Answer withCo.pulsor" Counterclai.#

On 29 Dece.ber 1989& the BA5@ filed an opposition to !arcos0 .otion to declare theBA5@ in default# On 9 Ganuar" 199 & the BA5@ filed a .otion to lift the order of defaultclai.in% that it had onl" then learned of the order of default# $he BA5@ e/plained that itsdela"ed filin% of the Answer with Counterclai. and failure to serve a cop" of the answer
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on !arcos was due to e/cusable ne%li%ence# $he BA5@ as'ed the trial court to set asidethe order of default because it had a valid and .eritorious defense#

On 7 ebruar" 199 & the trial court issued an order settin% aside the default order andad.ittin% the BA5@0s Answer with Co.pulsor" Counterclai.# $he trial court ordered theBA5@ to present its evidence on 12 !arch 199 #

On : !arch 199 & the BA5@ filed a .otion pra"in% to cross e/a.ine !arcos who had

testified durin% the ex-parte hearin% of 18 Dece.ber 1989# On 12 !arch 199 & the trialcourt denied the BA5@0s .otion and directed the BA5@ to present its evidence# $rial thenensued#

$he BA5@ presented two witnesses& odolfo (ales& the Branch !ana%er of theBA5@0s Cubao Branch since 1987& and a%sali%an& the Branch !ana%er of the sa.ebranch fro. 1982 to 1984#

On 2 April 199 & the counsel of !arcos cross e/a.ined a%sali%an# Due to lac' of .aterial ti.e& the trial court reset the continuation of the cross e/a.ination andpresentation of other evidence# $he succeedin% hearin%s were postponed& specificall" on2 & 27 and 28 of Au%ust 199 & because of the BA5@0s failure to produce its witness&

a%sali%an# $he BA5@ on these scheduled hearin%s also failed to present other evidence#

On 7 (epte.ber 199 & the BA5@ .oved to postpone the hearin% on the %round thata%sali%an could not attend the hearin% because of illness# $he trial court denied the

.otion to postpone and on .otion of !arcos0 counsel ruled that the BA5@ had waived itsri%ht to present further evidence# $he trial court considered the case sub.itted for decision# $he BA5@ .oved for reconsideration& which the trial court denied#

On 8 October 199 & the trial court rendered its decision in favor of !arcos# A%%rieved&the BA5@ appealed to the Court of Appeals#

On 1 Dece.ber 1994& the Court of Appeals .odified the decision of the trial court b"reducin% the a.ount of actual da.a%es and deletin% the attorne"0s fees awarded to!arcos#

T ! R$%&n' () # ! T*&a% C($*#

$he trial court ruled that the total a.ount of ti.e deposits of !arcos

was 1& 29&79:# and not onl" 74 &897#47 as clai.ed b" the BA5@# $he trial courtfound that !arcos .ade a ti.e deposit on two occasions# $he first ti.e deposit was.ade on 11 !arch 1982 for 44 &897#47 as shown b" eceipt 5o# 4 :7 # On 12 !arch1982& !arcos a%ain .ade a ti.e deposit for 74 &897#47 as ac'nowled%ed b"

a%sali%an in a letter of certification# $he two ti.e deposits thus a.ountedto 1& 29&79:# #

$he trial court pointed out that no receipt was issued for the 12 !arch 1982 ti.edeposit because the letter of certification was sufficient# $he trial court .ade a findin% thatthe certification letter did not include the ti.e deposit .ade on 11 !arch 1982# $he 12

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.erel" initials unli'e in the other docu.ents sub.itted b" the BA5@F )2, it is hi%hl"unnatural for the BA5@ to onl" have duplicate copies of the two docu.ents in its custod"F) , the address of !arcos in the docu.ents is different fro. the place of residence asstated b" !arcos in the other docu.ents anne/ed b" the BA5@ in its AnswerF ) ,

a%sali%an .ade it appear that a chec' for the loan proceeds of 7 &:88 less ban'char%es was issued to !arcos but the chec'0s pa"ee was one A$$J# 3=O5;3O !A CO(and& as the trial court noted& !arcos is not a law"erF and ):, a%sali%an was not sure what

branch of the BA5@ issued the chec' for the loan proceeds# $he trial court wasconvinced that !arcos did not e/ecute the -uestionable docu.ents coverin%the : & loan and a%sali%an used these docu.ents as a .eans to Hustif" hisinabilit" to e/plain and account for the ti.e deposits of !arcos#

$he trial court noted the BA5@0s *defective+ docu.entation of its transaction with!arcos# irst& the BA5@ was not in possession of the ori%inal copies of the docu.ents li'ethe loan applications# (econd& the BA5@ did not have a led%er of the accounts of !arcosor of his various transactions with the BA5@# 3ast& the BA5@ did not issue a certificate of ti.e deposit to !arcos# A%ain& the trial court attributed the BA5@0s lapses to a%sali%an0s

sche.e to defraud !arcos of his ti.e deposits#$he trial court also too' note of a%sali%an0s de.eanor on the witness

stand# a%sali%an evaded the -uestions b" %ivin% unresponsive or inconsistent answersco.pellin% the trial court to ad.onish hi.# hen the trial court ordered a%sali%an toproduce the docu.ents& he *convenientl" beca.e sic'+ [1:] and thus failed to attend thehearin%s without presentin% proof of his ph"sical condition#

$he trial court disre%arded the BA5@0s assertion that the ti.e deposits were convertedinto a savin%s account at 1 I or 1 I per annum upon .aturit"# $he BA5@ never infor.ed !arcos that his ti.e deposits had alread" .atured and these were converted

into a savin%s account# As to the interest due on the trust receipts& the trial court ruled thatthere is no basis for such a char%e because the docu.ents do not stipulate an" interest#

;n co.putin% the a.ount due to !arcos& the trial court too' into account the .ar%inaldeposit that !arcos had alread" paid which is e-uivalent to I of the total a.ount of thethree trust receipts# $he three trust receipts totallin% 8:1&2: would then have a balanceof :9:&87:# $he balance beca.e due in !arch 1987 and on the sa.e date& !arcos0ti.e deposits of 449&9 2# had alread" earned interest fro. 198 to 1987totallin% :49& 2 #21 at 17I per annum # $hus& the trial court ruled that the ti.e depositsin 1987 totalled 1&2 9&11:# ro. this a.ount& the trial court deducted :9:&87:& thea.ount of the trust receipts& leavin% a balance on the ti.e deposits of 4 &2 as of !arch 1987# owever& since the BA5@ failed to return the ti.e deposits of !arcos& whicha%ain .atured in !arch 199 & the ti.e deposits with interest& less the a.ount of trustreceipts paid in 1987& a.ounted to 971&292# 9 as of !arch 199 #

;n the alternative& the trial court ruled that even if !arcos had onl" one ti.e depositof 74 &897#47 as clai.ed b" the BA5@& the ti.e deposit would have still earned interestat the rate of 17I per annum # $he ti.e deposit of 4: &14 would have increasedto 1& 1:& 4 in 1987 after earnin% interest# Deductin% the a.ount of the three trustreceipts& !arcos0 ti.e deposits still totalled 1&2 4&949# plus interest#
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$he dispositive portion of the decision of the trial court readsE

(")&)*+&), under the foregoing circumstances, %udgment is hereb rendered in fa$or ofPlaintiff, directing 'efendant ;anK as follo#sF

/ to return to Plaintiff his time deposit in the sum of P 7/,2 2!@ #ith interestthereon at the legal rate, until full restituted

2 to pa attorne s fees of P200,000!00 and8? to pa the8 cost of these proceedings!

-T -S S+ +&')&)'! />8

T ! R$%&n' () # ! C($*# () A++!a%s

$he Court of Appeals addressed the procedural and substantive issues that the BA5@raised#

$he appellate court ruled that the trial court co..itted a reversible error when itdenied the BA5@0s .otion to cross e/a.ine !arcos# $he appellate court ruled that theri%ht to cross e/a.ine is a funda.ental ri%ht that the BA5@ did not waive because theBA5@ vi%orousl" asserted this ri%ht# $he BA5@0s failure to serve a notice of the .otion to!arcos is not a valid %round to den" the .otion to cross e/a.ine# $he appellate courtheld that the .otion to cross e/a.ine is one of those non liti%ated .otions that do notre-uire the .ovant to provide a notice of hearin% to the other part"#

$he Court of Appeals pointed out that when the trial court lifted the order of default& ithad the dut" to afford the BA5@ its ri%ht to cross e/a.ine !arcos# $his dut" assu.ed%reater i.portance because the onl" evidence supportin% the co.plaint is !arcos0 ex-

parte testi.on"# $he trial court should have tested the veracit" of !arcos0 testi.on"throu%h the distillin% process of cross e/a.ination# $he Court of Appeals& however&believed that the case should not be re.anded to the trial court because !arcos0testi.on" on the ti.e deposits is supported b" evidence on record fro. which theappellate court could .a'e an intelli%ent Hud%.ent#

On the second procedural issue& the Court of Appeals held that the trial court did noterr when it declared that the BA5@ had waived its ri%ht to present its evidence and hadsub.itted the case for decision# $he appellate court a%reed with the %rounds relied upon

b" the trial court in its Order dated 7 (epte.ber 199 #$he Court of Appeals& however& differed with the findin% of the trial court as to the total

a.ount of the ti.e deposits# $he appellate court ruled that the total a.ount of the ti.edeposits of !arcos is onl" 74 &897#47 and not 1& 29&79:# as found b" the trial court#$he certification letter issued b" a%sali%an showed that !arcos .ade a ti.e deposit on12 !arch 1982 for 74 &897#47# $he certification letter shows that the a.ount .entionedin the letter was the a%%re%ate or total a.ount of the ti.e deposits of !arcos as of thatdate# $herefore& the 74 &897#47 alread" included the 44 &897#47 ti.e deposit .ade b"!arcos on 11 !arch 1982#
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$he Court of Appeals further e/plainedE

;esides, the +fficial &eceipt .)Ih! 4;6, p! ?2, &ecords dated March //, / C2 co$ering the sumof P>>@, C7!>7 time deposit did not pro$ide for a maturit date impl ing clearl that the amountco$ered b said receipt forms part of the total sum sho#n in the letterGcertification #hich containeda maturit date! Moreo$er, it taIes ones credulit to belie$e that appellee #ould maKe a timedeposit on March /2, / C2 in the sum of P 764,897.67 #hich eIcept for the additional sum

of P/00,000!00 is practicall identical .see underlined figures to the sum of P 664,897.67 depositedthe da before March //, / C2!

Additionall , (e agree #ith the contention of the appellant that the lo#er court #ronglappreciated the testimon of Mr! Pagsaligan! +ur finding is strengthened #hen #e consider thealleged application for loan b the appellee #ith the appellant in the sum of P500,000!00 dated+ctober 2@, / C?! .)Ih! 4B6, p! @0, &ecords , #herein it #as stated that the loan is for additional#orKing capital $ersus the $arious time deposit amounting to P 7>0,000!00! /78 .)mphasis supplied

$he Court of Appeals sustained the factual findin%s of the trial court in rulin% that

ro.issor" 5ote 5o# 2 979 8 is void# $here is no evidence of a ban' led%er or co.putation of interest of the loan# $he appellate court bla.ed the BA5@ for failin% toco.pl" with the orders of the trial court to produce the docu.ents on the loan# $he BA5@also .ade inconsistent state.ents# ;n its Answer to the Co.plaint& the BA5@ alle%ed thatthe loan was full" paid when it debited the ti.e deposits of !arcos with theloan# owever& in its discussion of the assi%ned errors& the BA5@ clai.ed that !arcoshad "et to pa" the loan#

$he appellate court deleted the award of attorne"0s fees# ;t noted that the trial courtfailed to Hustif" the award of attorne"0s fees in the te/t of its decision# $he dispositiveportion of the decision of the Court of Appeals readsE

!"#"$%#" , premises considered, the appealed decision is &"' (&)*" ! A ne# %udgment ishereb rendered ordering the appellant banK to return to the appellee his time deposit in the sumof P764,897.67 with +7 interest within 9- days from arch ++, +98/ in accordance with theletter0certification and with legal interest thereafter until fully paid ! osts against theappellant!

S+ +&')&)'! /C8 .)mphasis supplied

T ! Iss$!s

$he BA5@ anchors this petition on the followin% issuesE

/ (")T")& +& +T T") P)T-T-+ )& sic8 A; ) T+ P&+:) T") P&-:AT)&)SP+ ') TS +UTSTA '- 9 +; -9AT-+ S S) U&)' ;< T") ASS-9 M) T +*T-M) ')P+S-TSN
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/!/ +&+ A&-

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hearin% and when the trial court denied the sa.e& the BA5@ infor.ed the trial court that itwas elevatin% the denial to the *upper court#+ [2 ]

$o repeat& the trial court had previousl" declared the BA5@ in default# $he trial courttherefore had the ri%ht to decide whether or not to disturb the testi.on" of !arcos thathad alread" been ter.inated even before the trial court lifted the order of default#

e do not a%ree with the appellate court0s rulin% that a .otion to cross e/a.ine is a

non liti%ated .otion and that the trial court %ravel" abused its discretion when it denied the.otion to cross e/a.ine# A .otion to cross e/a.ine is adversarial# $he adverse part" inthis case had the ri%ht to resist the .otion to cross e/a.ine because the .ovant hadpreviousl" forfeited its ri%ht to cross e/a.ine the witness# $he purpose of a notice of a.otion is to avoid surprises on the opposite part" and to %ive hi. ti.e to stud" and .eetthe ar%u.ents# [2 ] ;n a .otion to cross e/a.ine& the adverse part" has the ri%ht not onl" toprepare a .eanin%ful opposition to the .otion but also to be infor.ed that his witness isbein% recalled for cross e/a.ination# $he proof of service was therefore indispensableand the trial court was correct in den"in% the oral .anifestation to %rant the .otion for cross e/a.ination#

e find no Hustifiable reason to rela/ the application of the rule on notice of .otions [2:] to this case# $he BA5@ could have easil" re filed the .otion to cross e/a.inewith the re-uisite notice to !arcos# ;t did not do so# $he BA5@ did not .a'e %ood itsthreat to elevate the denial to a hi%her court# $he BA5@ waited until the trial courtrendered a Hud%.ent on the .erits before -uestionin% the interlocutor" order of denial#

hile the ri%ht to cross e/a.ine is a vital ele.ent of procedural due process& the ri%htdoes not necessaril" re-uire an actual cross e/a.ination& but .erel" an opportunit" toe/ercise this ri%ht if desired b" the part" entitled to it# [24] Clearl"& the BA5@0s failure to crosse/a.ine is i.putable to the BA5@ when it lost this ri%ht [27] as it was in default and failedthereafter to e/haust the re.edies to secure the e/ercise of this ri%ht at the earliestopportunit"#

$he two other procedural lapses that the BA5@ attributes to the appellate and trialcourts deserve scant consideration#

$he BA5@ raises for the ver" first ti.e the issue of Hudicial ad.ission on the part of !arcos# $he BA5@ even has the audacit" to fault the Court of Appeals for not rulin% onthis issue when it never raised this .atter before the appellate court or before the trialcourt# Obviousl"& this issue is onl" an afterthou%ht# An issue raised for the first ti.e onappeal and not raised ti.el" in the proceedin%s in the lower court is barred b" estoppel# [28]

$he BA5@ cannot clai. that !arcos had ad.itted the due e/ecution of the docu.entsattached to its answer because the BA5@ filed its answer late and even failed to serve iton !arcos# $he BA5@0s answer& includin% the actionable docu.ents it pleaded andattached to its answer& was a .ere scrap of paper# $here was nothin% that !arcos couldspecificall" den" under oath# !arcos had alread" co.pleted the presentation of hisevidence when the trial court lifted the order of default and ad.itted the BA5@0s answer#$he provision of the ules of Court %overnin% ad.ission of actionable docu.ents was notenacted to reward a part" in default# e will not allow a part" to %ain an advanta%e fro.its disre%ard of the rules#
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ban's# ;n Simex International (Manila) Inc. v. Court of Appeals [ 4] we pointed out thedepositor0s reasonable e/pectations fro. a ban' and the ban'0s correspondin% dut" to itsdepositor& as followsE

-n e$er case, the depositor eIpects the banK to treat his account #ith the utmost fidelit , #hethersuch account consists onl of a fe# hundred pesos or of millions! The banK must record e$ersingle transaction accuratel , do#n to the last centa$o, and as promptl as possible! This has to be

done if the account is to reflect at an gi$en time the amount of mone the depositor can dispose ofas he sees fit, confident that the banK #ill deli$er it as and to #home$er he directs!

As the BA5@0s depositor& !arcos had the ri%ht to e/pect that the BA5@ was accuratel"recordin% his transactions with it#

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+he 0xistence o! &romissory ote o. 123454367 was not &roven

$he BA5@ failed to produce the best evidence the ori%inal copies of the loanapplication and pro.issor" note# $he Best =vidence ule provides that the court shall notreceive an" evidence that is .erel" substitutionar" in its nature& such as photocopies& aslon% as the ori%inal evidence can be had# [ 9] Absent a clear showin% that the ori%inal writin%has been lost& destro"ed or cannot be produced in court& the photocop" .ust bedisre%arded& bein% unworth" of an" probative value and bein% an inad.issible piece of evidence# [ ]

hat the BA5@ presented were .erel" the *.achine copies of the duplicate+ of theloan application and pro.issor" note# 5o e/planation was ever offered b" the BA5@ for its inabilit" to produce the ori%inal copies of the docu.entar" evidence# $he BA5@ alsodid not co.pl" with the orders of the trial court to sub.it the ori%inals#

$he purpose of the rule re-uirin% the production of the best evidence is the preventionof fraud# [ 1] ;f a part" is in possession of evidence and withholds it& and see's to substituteinferior evidence in its place& the presu.ption naturall" arises that the better evidence iswithheld for fraudulent purposes& which its production would e/pose and defeat# [ 2]

$he absence of the ori%inal of the docu.entar" evidence casts suspicion on thee/istence of ro.issor" 5ote 5o# 2 979 8 considerin% the BA5@0s fiduciar" dut" to'eep efficientl" a record of its transactions with its depositors# !oreover& thecircu.stances enu.erated b" the trial court bolster the conclusion that ro.issor" 5ote5o# 2 979 8 is bo%us# $he BA5@ has onl" itself to bla.e for the dearth of co.petentproof to establish the e/istence of ro.issor" 5ote 5o# 2 979 8 #

+otal "mount Due to *arcos

$he BA5@ and !arcos do not now dispute the rulin% of the Court of Appeals that thetotal a.ount of ti.e deposits that !arcos placed with the BA5@ is onl" 74 &897#47 andnot 1& 29&79:# as found b" the trial court# $he BA5@ has alwa"s ar%ued that !arcos0ti.e deposits onl" totalled 74 &897#47# [ ] hat the BA5@ insists on in this petition is thetrial court0s violation of its ri%ht to procedural due process and the absence of an"obli%ation to pa" or return an"thin% to !arcos# !arcos& on the other hand& .erel" pra"sfor the affir.ation of either the trial court or appellate court decision# [ ] e uphold the

findin% of the Court of Appeals as to the a.ount of the ti.e deposits as such findin% is inaccord with the evidence on record#

!arcos clai.ed that the certificates of ti.e deposit were with a%sali%an for safe'eepin%# !arcos was onl" able to present the receipt dated 11 !arch 1982 and theletter certification dated 12 !arch 1982 to prove the total a.ount of his ti.e deposits withthe BA5@# $he letter certification issued b" a%sali%an readsE

March /2, / C2

'ear Mr! MarcosF
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This is to certif that #e are taKing care in our behalf $arious Time 'eposit ertificates #ith anaggregate $alue of P)S+SF S):) "U '&)' S-ET< *+U& T"+USA ' )-9"T "U '&)'

- )T< S):) A ' >7J/00 .P7>@,C 7!>7 +

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!arcos0 pa".ent of the .ar%inal deposit of 2::& 7: for the trust receipts resulted inthe proportionate reduction of the three trust receipts# $he reduced value of the trustreceipts and their respective interest as of 4 !arch 1987 are as followsE

/! Trust &eceipt o! ' C?!7 issued on C March / C? originall for P?00,000 #asreduced to P2/0,>/C!75 #ith interest of P/0/,027!7>! 5/8

2! Trust &eceipt o! ' C?! issued on /5 March / C? originall for P?00,000 #asreduced to P2/0,>/C!75 #ith interest of P/00,5@?!0@! 528

?! Trust &eceipt o! ' C?!/0 issued on /5 March / C? originall for P25/,250 #asreduced to P/7@,>?7!5 #ith interest of PC?,?>>!>C! 5?8

hen the trust receipts beca.e due on 4 !arch 1987& !arcos owed theBA5@ 88 &812# 8# $his a.ount included :9:&87:& the principal value of the three trustreceipts after pa".ent of the .ar%inal deposit& and 28 &9 7# 8& the interest then due onthe three trust receipts#

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plus 12I le%al interest per annum fro. Au%ust 1989 until full pa".ent# etitioner hilippine Ban'in% Corporation is further ordered to pa" 1 & b" wa" of .oral

da.a%es and 2 & as e/e.plar" da.a%es to private respondent 3eonilo !arcos#

Costs a%ainst petitioner# SO ODERED.

. PNB v. Pike, G.R. No. 157845, Sept. 20, 2005

This peti t ion for re$ie# on certiorari under &ule @5 of the / 7 &ules of

i$il Procedure, as amended, seeKs to re$erse the 'ecision /8 dated / 'ecember

2002, and the &esolution 28 dated 02 April 200?, both of the ourt of Appeals, in

AG9!&! : o! 5 ?C , #hich affirmed #ith modification the

'ecision ?8 rendered b the &egional Trial ourt .&T , ;ranch 07 of Manila,

dated /0 Banuar / 7, in i$il ase o! @G>CC2/ in fa$or of herein respondent orman PiKe .PiKe !

The case s temmed from a complaint @8f iled b herein respondent PiKe

for damages 58 against Philippine ational ;anK .P ; on 0@ Banuar / @!

omplainant PiKe often tra$eled to and from Bapan as a ga entertainer in

said countr ! Sometime in / / , he opened U!S! 'ollar Sa$ings Account o!

02>5G70@5 /G0 #ith herein peti t ioner P ; ;uendia branch for #hich he #as

issued a corresponding passbooK! The complaint alleged in substance that before

complainant PiKe left for Bapan on /C March / ?, he Kept the aforementioned

passbooK inside a cabinet under locK and Ke , in his home that on / April / ?,

a fe# hours after he arri$ed from Bapan, he disco$ered that some of his $aluables

#ere missing including the passbooK that he immediatel reported the incident to

the police #hich led to the arrest and prosecution of a certain Mr! Bo Manuel

'a$asol that complainant PiKe a lso disco$ered that ' a$asol made t#o .2
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unauthori3ed #ithdra#als f rom his U!S! 'ol lar Sa$ings Account o! 02>5G

70@5 /G0, both times at the P ; ;uendia branch on the follo#ing datesF

'AT) AM+U T

?/ March / ? Q?,500!0005 April / ? @,000!00

T+TA Q7,500!00

that on se$eral occasions, complainant PiKe #ent to defendant P ;s ;uendia

branch and $erball protested the unauthori3ed #ithdra#als and liKe#ise

demanded the return of the total #i thdra#n amount of U!S! Q7,500!00, on the

ground that he ne$er authori3ed an bod to #ithdra# from his account as the

signatures appearing on the sub%ect #ithdra#al slips #ere clearl forgeries that

defendant P ; refused to credit said amount bacK to complainants U!S! 'ollar

Sa$ings Account #ithout %ustifiable reason, and instead, defendant banK #rote

him that it eIercised due diligence in the handling of said account and that on 0>

Ma / ?, complainant PiKe #rote defendant P ; simpl to re1uest that the

holdGaccount be lifted so that he ma #ithdra# the remaining balance left in his

U!S!Q Sa$ings Account and nothing else!

+n the other hand, defendant P ; alleged, in its Motion to 'ismiss>8

of /CApril / @, a counterstatement of facts! -ts factual allegations readF

! ! ! +n March /5, / ? at P ; ;uendia ;ranch, Mr! orman

together #ith a certain Bo 'a$asol #ent to see P ; A:P Mr! oren3o T!:al .sic , Br! purposel to #ithdra# the amount of Q2,000!00! Mr! PiKe alsoinformed A:P :al that he is lea$ing for abroad .Bapan and made $erbalins truct ion to honor a ll # ithdra#a ls to be t ransmi tted b h is Talen t

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Manager and horeographer, Bo 'a$asol #ho shall present preGsigned#ithdra#al slips bearing his .PiKes signature! ! !

+n April / , / ?, a certain Bosephine ;almaceda, #ho claimed to b e

plaintiffs sister eIecuted an affida$it ! ! ! ! stating therein that thedisco$ered toda .April / , / ? the lost .sic of her brother s passbooK issued b P ; on account of robber , committed in the residenceJoffice of

her brother, promptl reporting the matter to the police authorities and her brother cannot report the matter to the ;anK because he #as currentl inBapan and therefore re1ues ting the ;anK to i ssue a ho ldGorder on her

brothers passbooK! ;ut a cop of an alarm .Police &eport dated April / , / ?! ! ! stated

that plaintiff .#ho #as the one #ho reported the matter after one month inBapan, he .complainant arri$ed esterda ! ! !

+n Apri l 2>, / ?, At t ! athani el - fu rung #ho c la ims to be

plaintiffs counsel sent a demand letter to :P :ioleta T! Su1uila .then :Pand Manager of P ; ;uendia ;ranch demanding the banK to credit bacK the amount of USQ7,500!00 #hich #ere #ithdra#n on March ?/ , / ? andApr il 5 , / ?, because h is c li en ts s igna tu re s #ere forged and the#ithdra#al made thereon #ere unauthori3ed! ! !

+n Ma 5, / ?, Mr! orman

.s ic 'o l lar Account PassbooK H and re1uested the P ; to replace thesame and a llo# h im to maKe # ithdra#a ls thereon! "e s ta ted tha t h is

passbooK #as stolen together #ith other $aluables #hich he disco$eredonl in the earl morning of April / , / ?! ! !

+n Ma >, / ?, plaintiff orman

Ma >, / ? The Manager Philippine ational ;anK ;uendia ;ranchPaseo de &oIas cor! 9il Pu at StreetMaKati, Metro Manila SirF

-n connection #ith the re1uest of m sister, Mrs! Bosephine P!;a lmaceda for the holdGorder on m dol la r sa$ings passbooK o!2>5G70@5 /G0, - am no# re1uesting our good office to lift the sameso - can #i thdra# the remaining balance of m passbooK #hich #asreported lost sometime in March of this ear!

- a lso p romise no t t o ho ld r esponsibl e t he banK and i t soff icers for the #i thdra#al made on m dollar sa$ings passbooK on

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;als contention that such an arrangement although not ordinaril enteredinto is st i l l a legal procedure of the banK and is resorted to accommodatethe depositors speciall honored and $alued depositor at that .

! ! !

The court compared the signatures in the 1uestioned #ithdra#al slips

# ith the Kno#n s ignatures of the depos itor and i s con$inced tha t thesignatures in the unauthori3ed #ithdra#al sl ips do not correspond to thetrue signatures of the depositor!

*rom the e$idence that i t recei$ed, the court is con$inced that the

banK #as negligent in the performance of its duties such that unauthori3ed#ithdra#als #ere made in the deposit of plaintiff orman

The dispositi$e portion of the trial courts decision readsF

(")&)*+&) and consider ing the foregoing, %udgment is herebrendered in fa$or of the plaintiff and against the defendant and ordering thedefendant to pa the follo#ingF

/! USQ7,500!00 p lus interes t thereon a t the rate of /2 per

annum until the full amount is paid

2!

P25,000!00 for and as attorne s fees?! P50,000!00 as moral damages and P50,000!00 as eIemplardamages and

@! Plus the costs of suit! C 8

'efendant P ;s motion for reconsideration #as subse1uentl denied b

the court a quo. [ 9 ]

+n appeal, the ourt of Appeals i ssued the assai led decis ion dated /

'ecember 2002, aff irming the f indings of the &T that indeed defendantG

appellant P ; #as negligent in eIercising the diligence re1uired of a business
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imbued #ith public interest such as that of the banKing industr , ho#e$er, i t

modified the rate of interest and a#ard for damages, to #itF

(")&)*+&), premises considered, the 'ecision dated Banuar /0,

/ 7 issued b the &egional Trial ourt of Manila, ;ranch 7, in i$il ase o! @G>CC2/, is hereb A**-&M)' #ith M+'-*- AT-+ , as follo#sF

/ ! +rder ing appel lant, the Phil ippine ational ;anK, ;uendia

; ranch, t o r efund appel lee t he amoun t o f Q7,500!00 p lusinterest of > per annum to be computed from the date of thef i l ing of the complaint #hich interest ra te shal l become /2

per annum from the time the %udgment in this case becomesfinal and eIecutor until its satisfaction

2! The a#ard for moral damages is reduced to P20,000!00 and ? ! The a#ard for e Iemplar damages i s l iKe#ise reduced to

P20,000!00!

osts against appellant! / 0 8

The appellate court held thatF

Appel lant c laims that appel lee personal l ta lKed to i ts officers toallo# Bo Manuel 'a$asol to maKe #ithdra#als! Appellee e$en left preGsigned #ithdra#al slips before he #ent to Bapan! "o#e$er, appellant couldha$e told appel lee to authori3e the # ithdra#a l b a represen ta ti$e bind icat ing the s ame a t t he space p ro$ided a t t he bacK por ti on o f t he#i thdra#al s l ip! This operat ional f la# #as obser$ed b the t r ia l court ,#hen it ruledF

The court cannot a lso understand #h the banK did not

re1uire the correct, proper and the usual procedure of re1uiring

a depos itor #ho is #ithdra#ing the mone throug h arepresentat i$e to f i ll up the bacK port ion of the #i thdra#alslips, #hich form #as issued b the banK itself!

A perusa l o f the records d isc loses tha t appe llee had pre$ ious lauthori3ed #ithdra#als b a representati$e! "o#e$er, these #ithdra#als#ere properl accompanied b a 4#i thdra#al b a representat i$e6 formaside from a hand#ritten re1uest b appellee to allo# such #ithdra#als bhis representat i$e, or a t pe#ri t ten le tterGre1uest for #i thdra#al b arepresen ta ti$e! er ta in l , appe llan t l acKed the due care and cau tion

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re1uired of managers and emplo ees of a firm engaged in so sensit i$e anddemanding business as banKing! H

-n i ts desire to be eIonerated from liabili t , appellant ad$ances the

argument that, grant ing negl igence on i ts part , appel lee condoned thisnegl igence as sho#n in his le t ter dated Ma >, / ? , #herein appel lee

purportedl undertooK, not to hold the banK and its officers responsible for

the unauthori3ed #ithdra#als from his account! (e do not agree! - t should be emphasi3ed that #hi le the appel lee

admitted signing the letter dated Ma >, / ?, he, ho#e$er, denied ha$ingu nd er to oK . sic t o e Io ne ra te t he a pp el la nt f ro m l ia bi li t f or t heunauthori3ed #ithdra#als! Appellee 1uestioned the second paragraph of thesaid letter as being superimposed so that his signature o$erlapped the teItof the second paragraph of said le t ter! A #ai$er of r ight , in order to be$alid, should be in a language that clearl manifests his desire to do so! H-n the instant case, appellees fi l ing of the instant action is inconsistent# ith appel lan ts conten tion tha t he had #ai$ed h is r ight to 1ues tionappellants negligent act of allo#ing the unauthori3ed #ithdra#als from hisaccount! / /8

'efendantGappellant P ; filed a motion for reconsideration! -n a &esolution

dated 02 April 200?, the ourt of Appeals denied said motion!

"ence, this petition!

Pet it ioner P ; no# seeKs the re$ie# of the afore1uoted decis ion and

resolution of the ourt of Appealspredicated on the follo#ing issuesF

-!

(" )T ")& +& + T T" ) P &- -P ) +* )S T+PP ) (AS +TP&+P)& < APP -)' - T "-S AS)

--!

(")T")& +& +T &)SP+ ') T "A:) SU;STA T-A < P&+:)T"AT T") S-9 ATU&)S APP)A&- 9 + T") T(+ .2 DU)ST-+ )'P&)GS-9 ) ' (-T"'&A(A S -P *+&MS A&) A *+&9)&-)S -A +&'A ) ( -T" S ) T-+ 22, &U ) / ?2 +* T") &): -S )'&U )S +* +U&T and

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---!

(")T")& +& +T M+&A A ' )E)MP A&< 'AMA9)S A ;)A(A&')' A9A- ST A PA&T< - 9++' *A-T"!

Petitioner P ; contends that due to the $erbal instructions /28 of respondent

PiKe, a $alued depositor, it allo#ed the #ithdra#al b another person! Plus, the

fact that said respondent #ithdre# the remaining balance in his US Sa$ings

Account and eIecuted a #ai$er releasing petitioner P ; from an liabilit due to

the loss of the funds should r ightl negate a f inding of negligence on i ts part!

Accordingl , petitioner P ; claims that the appellate court, as #ell as the trial

court erred in holding that the #ithdra#als in 1uestion #ere unauthori3ed as the

signatures appearing on the sub%ect #ithdra#al slips #ere forgeries! Petitioner

P ;, therefore, argues that it should not be held liable for the amount #ithdra#n

from the account of respondent PiKe in the sum of Q7,500!00, as #ell as for moral

and eIemplar damages!

A priori , it is 1uite e$ident that the petition is anchored on a plea to re$ie#

or reGeIamine the factual conclusions reached b the trial court and affirmed b

the ourt of Appeals, and for this ourt to hold other#ise! (hetherF

/ r esponden t P iKes s igna tu re s appea ring on the per ti nent

#ithdra#al slips used b Bo Manuel 'a$asol /?8 to #ithdra# the amount of Q7,500!00, #ere forgeries, as found b the trial court and affirmed b the

ourt of Appeals, or #ere authentic as claimed b p etitioner banK and

2 respondent PiKe in fact eIecuted a #ai$er absol$ing petit ioner banK from an legal responsibilit due to the unauthori3ed #ithdra#als, asmaintained b petitioner banK, or the paragraph containing said #ai$er #as
http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/157845.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/157845.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/157845.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2005/sep2005/157845.htm#_ftn13

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*inding no other alternati$e but to affirm their finding that petitioner P ;

negligentl allo#ed the unauthori3ed #ithdra#als sub%ect of the case at bar, the

instant petition for re$ie# must necessaril fail!

A t t hi s %uncture, i t bea rs emphasi3ing t ha t negl igence o f banKinginsti tu tions should ne$er be countenanced! The negligence here l ies in the

lacKadaisical attitude eIhibited b emplo ees of petitioner P ; in their treatment

of respondent PiKes US 'ollar Sa$ings Account that resulted in the unauthori3ed

#ithdra#al of Q7,500!00! e$ertheless, though i ts emplo ees ma be the ones

negligent, a banKs liabilit as an obligor is not merel $icarious but primar , as

banKs are eIpected to eIercise the highest degree of diligence in the selection and

super$ision of their emplo ees, / 8and ha$ing such obligation, this ourt cannot

ignore the circumstances surrounding the case at bar R ho# the emplo ees of

petitioner P ; turned their heads, na , closed their e es to the suspicious

circumstances enfolding the t#o #ithdra#als sub%ect of the case at bar! -t ma

e$en be said that the #ent out of their #a s to disregard standard operating

procedures formu lated to ensure the securit of each and e$er account that the

are handling! Petitioner P ; does not den that the #ithdra#al slips used #ere in

breach of standard operating procedures of banKs in the ordinar and usual course

of banKing operations as testified to b one of its #itnesses, Mr! oren3o T! ;al,

Ass is tant :ice President o f Pet it ioner P ; s ;uendia b ranch, on c rossG

eIamination 208 he stated thusF DF Mr. Witness, when the original of Exhibit ! [ 2 1 ] was presented to

"ou for appro# al, how man" signatures of depositor appears thereo n$ AF %wo &'( signatures appears &sic( on the face of the withdrawal slip. DF (hen it .sic #as .sic presented to ou immediatel N AF

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DF That #ithdra#al made b representati$eN AF

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DF And Mr. orman /i+e was alrea d" transacting with "ou long before

that da", is this correct$ For how long was he transacting with "ou$ AF %hat was m" first time. DF %hat was the first time. What 4 mean is, that he was transacting with

the / , uendia ranch long before "ou met him$ AF Ma"be. H DF And the #ithdra#al made on April 5, / ? #hich ou appro$ed, ou

did not looK at )Ihibit 4 6, the Sa$ings Signature ard -ndi$idualN AF (e do not looK at that, that is Kept in the $ault! DF

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; his o#n testimon , the #itness negated the $er reason for the banKs

bi3arre 4accommodation6 of the alleged $erbal re1uest of respondent PiKe R that

he #as a 4$alued c l ient!6 *rom the afore1uoted, i t appears that the #i tness ,

oren3o ;al, #as not e$en reasonabl familiar #ith respondent PiKe, et, he #as

read , #i ll ing and able to accommodate the #erbal re1uest of said depositor!(orse still, the #itness still appro$ed the #ithdra#al transaction #i

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