ANTONINO v. BANCO DE ORO UNIVERSAL BANK, INC. (G.R. Nos. 273493 & 273446; Promulgated: April 23, 2025) (CASE DIGEST)

ANTONINO v. BANCO DE ORO UNIVERSAL BANK, INC. (G.R. Nos. 273493 & 273446; Promulgated: April 23, 2025)

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Facts

Remedios A. Antonino and Angelita A. Antonino (the Antoninos), who resided mostly in the United States, made several time deposit/investment placements with Banco De Oro Universal Bank, Inc. (BDO). Over three dates between December 1998 and February 2001, the Antoninos deposited an aggregate amount of USD 150,008.41, covered by five Time Deposit Certificates (TDCs) and one Official Receipt (OR 538828). The Antoninos claimed an agreement with the Bank Manager for the automatic roll-over of the placements if not redeemed upon maturity.

When the Antoninos attempted to withdraw their funds starting in 2014, BDO disputed the claim, alleging that the first deposit was insufficiently evidenced by the Official Receipt, and that the proceeds of the four remaining TDCs (totaling USD 100,000.70) were already withdrawn by Angelita on May 28, 2001, supported by internal computer history data and a disputed Demand Draft.

The Antoninos maintained possession of the original copies of the four TDCs. Angelita presented proof (Bureau of Immigration Certification and passport entries) showing she was not in the Philippines on May 28, 2001, the date BDO alleged she withdrew the funds. Furthermore, expert testimony suggested Angelita’s purported signature on the Demand Draft was likely not genuine.

BDO argued that the Antoninos were guilty of laches for the delay (about 14 years) in claiming the funds after the maturity of the TDCs.

Issues

1. Whether BDO was liable to pay the Antoninos the value of the four Time Deposit Certificates (TDCs Nos. 1117687, 1193123, 1193124, and 1193125) totaling USD 100,000.70.
2. Whether the Antoninos were guilty of laches for the delay in asserting their claim.
3. Whether BDO exercised the highest degree of diligence required of banking institutions.
4. Whether the award of damages (moral, exemplary, and attorney’s fees) was warranted.

Ruling

“ACCORDINGLY, the Petitions for Review on Certiorari are DENIED. The assailed Decision dated September 29, 2023, and the Resolution dated April 22, 2024 of the Court of Appeals in CA-G.R. C.V. No. 116100 are hereby AFFIRMED WITH MODIFICATION. Banco De Oro Universal Bank, Inc. is hereby ORDERED to PAY Remedios A. Antonino and Angelita A. Antonino the following:

1. USD 100,00.70 plus the agreed interest accrued per each time deposit/placement on their respective maturity dates until fully paid;
2. PHP 100,000.00 as moral damages;
3. PHP 300,000.00 as exemplary damages;
4. PHP 150,000.00 as attorney’s fees; and
5. The costs of the suit. The total judgment award shall earn legal interest at the rate of 6% per annum, computed from the date of finality of this Decision until full payment. SO ORDERED.”

Essential Elements of Jurisprudence

1. Diligence Required of Banks: Banks are mandated by law and jurisprudence to observe prudence and diligence higher than that of a good father of a family. A bank’s failure to exercise this highest degree of diligence warrants the imposition of damages.
2. Proof of Payment/Redemption (Possession of TDCs): The possession of the original copies of the Time Deposit Certificates (TDCs) by the depositors is a key indication that the payment or redemption of the funds has not yet been made, as it is unlikely that a bank would release funds without first requiring the surrender of the certificates, especially when the terms of the TDC explicitly require surrender upon redemption.
3. Inapplicability of Laches (Automatic Conversion): Depositors are generally not guilty of laches for the mere lapse of time between maturity and claim when dealing with time deposits. According to the terms of the TDC and relevant BSP Regulations, if a time deposit is not redeemed, renewed, or rolled-over upon maturity, it automatically converts into a savings deposit and continues to earn interest, thereby precluding the establishment of prolonged neglect or abandonment necessary to constitute laches.
4. Award of Damages (Negligence/Bad Faith): Moral damages are recoverable when the depositor suffers mental anguish or serious anxiety due to the bank’s negligence. Exemplary damages (or corrective damages) are justified when the bank’s failure to exercise the expected diligence amounts to negligence or bad faith, serving as a deterrent and an example for the public good (citing Article 2229 of the Civil Code). Attorney’s fees may also be recovered when the plaintiff is compelled to litigate to protect their interests (citing Article 2208 of the Civil Code).

Sample Q&A

Q: X invested in a time deposit with Bank B, receiving an original Time Deposit Certificate (TDC). After 15 years, X attempts to redeem the placement, but Bank B refuses, claiming the amount was withdrawn by a third party years ago and that X is barred by laches. X proves continued possession of the original TDC and offers strong evidence (like travel records) that she was not present during the alleged withdrawal date. Is Bank B liable, and what principles justify the imposition of damages?

A: Yes, Bank B is liable for the full amount of the investment, plus accrued interest and damages.

1. Liability based on Diligence and Possession: Bank B failed to exercise the required highest degree of diligence. The continued possession of the original TDC by X is a key indicator that payment or redemption has not occurred, as banks are generally required to demand the surrender of the original certificate before releasing funds. The failure of the bank to verify the identity of the person making the withdrawal, especially when countered by strong evidence (travel records) and when the withdrawal occurred without the surrender of the TDC, constitutes gross negligence or bad faith.
2. Rejection of Laches: The defense of laches must fail because the lapse of time does not automatically forfeit the deposit. Time deposits, if not withdrawn or renewed upon maturity, automatically convert into savings deposits by operation of the terms of the TDC and pertinent BSP Regulations, continuing to earn interest. Thus, there is no “unexplained length of time” giving rise to the presumption of abandonment.
3. Damages: Because Bank B’s failure to exercise the required diligence caused mental anguish and serious anxiety, the bank is liable for Moral Damages. Furthermore, the imposition of Exemplary Damages is proper, pursuant to Article 2229 of the Civil Code, as the bank’s negligence must be corrected for the public good. Attorney’s fees are also recoverable, pursuant to Article 2208 of the Civil Code, because X was compelled to litigate to protect her rights.

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