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Supreme Court finds BDO negligent for allowing unauthorized withdrawals of over P8 million

By John Patrick Magno Ranara Published Oct 10, 2023 1:05 pm

The Supreme Court (SC) ruled that Banco de Oro Universal Bank, Inc. (BDO) had been negligent for allowing over P8 million to be withdrawn from the bank account of a business owner without authorization.

In a release posted on the SC's official website, BDO was found liable for damages to depositor Liza Seastres after the latter discovered that the bank allowed unauthorized transactions amounting to P8,121,939.59 made by Anabelle Benaje, the Chief Operating Officer of Seastres’ business.

"BDO had existing rules and regulations for the withdrawal and encashment of checks through a representative—these were not followed at all," the court held.

"Safeguards are embedded in BDO’s procedures for the protection of the depositor and the payee. BDO’s blatant disregard of its own procedures, as admitted by BDO’s own officers, constitutes a clear violation of the bank’s fiduciary obligation to its depositor and account holder," it added.

The court stressed that the bank "totally failed" in taking care of Seastres’ bank accounts and making sure that the signatures in the withdrawal slips and manager’s checks were made by Seastres and not by anybody else.

"BDO allowed Benaje to personally transact the unauthorized withdrawals without confirming from Seastres the authority of Benaje," the release read.

The alleged written authorization also didn't extend to making any withdrawals as it was only allowed for deposits, inquiries, pick-ups, and printouts on behalf of Seastres.

The Court of Appeals ruled that Seasters is not without fault and must also pay damages due to her own contributory negligence, but the SC squashed CA's decision.

"While Seastres did deal with the bank through Benaje, the Court ruled this cannot be considered contributory negligence because it was done within the parameters set by the BDO itself in transactions through a representative," the release read.

"Nothing in the said authorization declared that Benaje was authorized to make any withdrawals," it added.

The court ordered BDO, together with BDO People Support Branch Head Christine T. Nakanishi and BDO Rufino Branch Head Vivian Duldulao to pay Seastres over P8 million in actual and moral damages, attorney’s fees, and cost of suit, "to earn legal interest of 6% per annum from finality of judgment until fully paid."

Benaje was also ordered to indemnify and pay BDO, Nakanishi, and Duldulao for the losses and damages incurred in line with the incident.