MANILA – The Supreme Court (SC) has ruled that banks can be held liable for moral damages arising from negligence, even if there is no evidence of bad faith or malice.

In a decision penned by Associate Justice Samuel H. Gaerlan, the SC’s Third Division ordered Banco de Oro (BDO) to pay Remedios and Angelita Antonino the proceeds of their time deposit, plus ₱100,000 in moral damages.

The Antoninos, U.S. green card holders based abroad, placed more than USD 150,000 in time deposits at BDO’s San Lorenzo branch in Makati. The deposits were supposed to automatically roll over into interest-bearing savings accounts if left unwithdrawn.

However, when the Antoninos tried to claim their funds, they discovered the branch had already closed. BDO claimed the deposits had been withdrawn, citing a demand draft allegedly signed by Angelita—something she denied. Immigration records showed she was abroad at the time, while a Philippine National Police handwriting expert testified that the signature did not match hers.

Both the trial court and the Court of Appeals ruled in favor of the Antoninos, noting they still possessed the original time deposit certificates (TDCs), which under BDO’s own rules were required for withdrawal. The SC affirmed these rulings, stressing that possession of the TDCs proved the funds had not been redeemed.

The High Court underscored that banks are held to an “extraordinary” standard of diligence because of the trust the public reposes in them. It also clarified that moral damages—covering mental anguish, anxiety, and similar suffering—may be awarded upon proof of negligence, even without malice or bad faith.

The ruling noted that BDO failed to properly verify the withdrawal, ignored discrepancies in signatures, and could not produce crucial documents such as the supposed Affidavit of Loss. These lapses, the Court said, constituted negligence.