Metropolitan Bank vs Cabilzo

METROPOLITAN BANK AND TRUST CO. v CABILZO (Kristel)510 SCRA 259 FACTS: Renato Cabilzo was one of Metrobank’s clients who maintaineda current account with the bank’s Pasong Tamo Branch. OnN o v . 1 2 , 1 9 9 4 , h e i s s u e d a c h e c k p a y a b l e t o c a s h a n d postdated on Nov. 24, 1994 for the amount of P1,000. Thecheck was presented to Westmont Bank for payment and thelatter indorsed it to Metrobank. Metrobank cleared the checkand debited Cabilzo’s account. It was found out later by Cabilzothat the check’s amount was altered to P91,000 and the datechanged to Nov. 14. Cabilzo demanded that Metrobank re-credit the 90,000 to his account. Metrobank refused. Cabilzof i l e d a c i v i l a c t i o n f o r d a m a g e s a g a i n s t M e t r o b a n k . I n i t sdefense, Metrobank said that it exercised due diligence inexamining the genuineness of the signature and the technicalentries including the amount in figures and in words to see if there were alterations and found that there was none. It furtherstated that Cabilzo was partly responsible for leaving spaceson the check which made the fraudulent insertion possible. TheRTC and the Court of Appeals ruled in favor of Cabilzo sayingthat Metrobank was liable ISSUE: W / N Me t r o b a n k s h o u l d b e h e l d l i a b l e f o r d a m a g e s f o r i t snegligence HELD: YES. The degree of diligence required of a reasonable man in theexercise of his tasks and the performance of his duties hasbeen faithfully complied with by Cabilzo. In fact, he was waryenough that he filled with asterisks the space between andafter the amounts, not only those stated in words but alsothose in numerical figures in order to prevent any fraudulentinsertion.Metrobank cannot rely on the doctrine of equitable estoppelwhich states that “when one of the two innocent persons, eachguiltless of any intentional or moral wrong, must suffer a loss,it must be borne by the one whose erroneous conduct, eitherb y o m i s s i o n o r c o m m i s s i o n , w a s t h e c a u s e o f i n j u r y . ” Metrobank did not prove that Cabilzo was negligent or that thisnegligence was the proximate cause of the loss. Negligence isnot presumed but it must be proven by the one who alleges it.Banking is a business affected with public interest and becauseof the nature of its functions, the bank is under obligation totreat the accounts of its depositors with meticulous care,always having in mind the fiduciary nature of their relationship. The appropriate degree of diligence required of a bank must abe a high degree of diligence, if not the utmost diligence.Here, the alterations on the check are visible to the naked eyebut Metrobank failed to detect the alterations which could note s c a p e t h e a t t e n t i o n o f e v e n a n o r d i n a r y p e r s o n . T h i s negligence is further exacerbated by the fact that it was thecash custodian who examined the check when his functions donot involve the examining of checks. Obviously, the custodianwas not versed and competent in handling such duty. Banks are expected to exercise the highest degree of diligence in theselection and supervision of employees