SC: Banks liable for moral damages due to negligence

The Supreme Court has affirmed that banks can be held liable for moral damages due to negligence, even without proof of bad faith.

This ruling was made in a case involving U.S. green card holders Remedios and Angelita Antonino, who had over USD150,000 in time deposits at Banco de Oro's (BDO) San Lorenzo Branch in Makati City.

The depositors had an agreement for their funds to automatically roll over into interest-bearing savings accounts if not withdrawn at maturity.

The Antoninos kept their Time Deposit Certificates (TDCs) in a safety deposit box and only discovered the BDO branch had closed down without notice when they attempted to retrieve their investments.

BDO claimed the deposits had already been withdrawn using a demand draft allegedly signed by Angelita.

Both the Regional Trial Court (RTC) and the Court of Appeals ruled in favor of the Antoninos, a decision now upheld by the Supreme Court.

The SC ordered BDO to pay the depositors the full proceeds of their time deposit along with P100,000 in moral damages.