Time and again,
the Court has emphasized that it is required and expected of banks to exercise
the highest degree of diligence, along with high standards of integrity and
performance in view of its significant role in commercial transactions, not to
mention its contribution, to the economy in general. "Since their business
and industry are imbued with public interest, banks are required to exercise
extraordinary diligence, which is more than that of a Roman paterfamilias or a
good father of a family, in handling their transactions." Even as a mortgagee, a
bank is not relieved of its responsibility to exercise a higher degree of caution.
In Land Bank of
the Philippines v. Belle Corporation31 the Court underscored the following:
When the
purchaser or the mortgagee is a bank, the rule on innocent purchasers or
mortgagees for value is applied more strictly. Being in the business of
extending loans secured by real estate mortgage, banks are presumed to be
familiar with the rules on land registration. Since the banking business is
impressed with public interest, they are expected to be more cautious, to
exercise a higher degree of diligence, care and prudence, than private
individuals in their dealings, even those involving registered lands. Banks
may not simply rely on the face of the certificate of title. Hence, they
cannot assume that, simply because the title offered as security is on its face
free of any encumbrances or lien, they are relieved of the responsibility of
taking further steps to verify the title and inspect the properties to be
mortgaged. As expected, he ascertainment of the status or condition of a
property offered to it as security for a
loan must be a standard and
indispensable part of a bank's
operations.
The Bank's
failure to observe the degree of diligence expected of it clearly constitutes
negligence. Verily, the Bank was not able to prove that the petitioner
participated in the loan application or
in the execution of the documents relative to it. There was no showing that any
of the Bank's employees had dealt with the petitioner regarding the loan or the
mortgage despite her being one of the registered owners of the mortgaged properties.
More importantly, the Bank had not demonstrated how it took steps or what safety measures were
adopted and actually practiced ascertaining the authenticity of the
petitioner's signature in the "Amendment to Real Estate Mortgage".
Simply put, the Bank's lapses in ascertaining the identity of the petitioner as
one of the signatories in the document as well as the genuineness of her
signature confirm that the Bank fell short in exercising the degree of
diligence demanded of it in the conduct of its affairs.
As the Bank is not a mortgagee in good
faith, it should be held jointly and severally liable with Antonio in the
payment of moral damages, exemplary damages, and attorney's fees in favor of
the petitioner. In Bank of Commerce v. Spouses San Pablo, the Court adjudged the Bank of Commerce
liable for moral damages, exemplary damages, and attorney's fees for failing to
observe the necessary degree of caution in ascertaining the genuineness and
extent of authority of the mortgagor who forged the signature of the registered
owner of the property. Parenthetically, the award of damages and attorney's
fees finds basis in several cases where the Court imposed the same against the
defendant-banks for negligence or failing to exercise extraordinary diligence
in the discharge of its functions.
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