THE CONSOLIDATED

BANK AND TRUST

CORPORATION
VS.
CA AND L.C. DIAZ
410 SCRA 562 (2003)

Presented by: Ferrer, R.

 CONSOLIDATED BANK V.
L.C. DIAZ
I. PARTIES
A. PLAINTIFF/RESPONDENT:
L.C. DIAZ and COMPANY, CPA’s

B. DEFENDANT:
THE CONSOLIDATED BANK and TRUST
CORPORATION
now known as “SOLIDBANK CORPORATION”
 CONSOLIDATED BANK V.
L.C. DIAZ
III. COMPLAINT:
Complaint for Recovery of a Sum of Money

IV. CASE NATURE:

PETITION for review on certiorari of the decision and
resolution of the CA

V. RD:
WHEREFORE, the decision of the Court of Appeals is
AFFIRMED with MODIFICATION.
 CONSOLIDATED BANK V.
L.C. DIAZ
VI. FACTS OF THE CASE
1. L.C. Diaz had a savings account with Solidbank.
• L.C. Diaz sent its messenger to
bring the passbook and deposit
money to Solidbank.
• Since the transaction took some
time, the messenger left the
passbook to the teller and left.
• When he came back, the teller
told him that someone already
took the passbook.
 CONSOLIDATED BANK V.
L.C. DIAZ
VI. FACTS OF THE CASE
2. Then an unauthorized withdrawal of P300,000.00 was made by a
certain Noel Tamayo.
• The withdrawal slip bore the
signatures of the authorized
signatories of L.C. Diaz.
• The teller passed the withdrawal
slip to an officer for
authentication.
• After comparison with the
specimen, the teller gave the
P300,000.00.
CONSOLIDATED BANK V.
L.C. DIAZ
VI. FACTS OF THE CASE
3. L.C. Diaz charged its
messenger with Estafa through
Falsification of Commercial
Document.
• But it was dismissed by the
RTC upon the motion of the
City Prosecutor
4. Then L.C. Diaz filed a
Complaint for Recovery of a
Sum of Money against the
Solidbank.
 CONSOLIDATED BANK V.
L.C. DIAZ
VI. FACTS OF THE CASE
5. RTC DECSION: It absolved Solidbank of any liability
• RTC applied the rules on savings account written on
the passbook. To wit,
“Possession of this book shall raise the
presumption of ownership and any payment
made by the bank upon the production of the
said book shall have the same effect as if made to
the depositor personally.”
• Solidbank’s act of allowing withdrawal was not the
proximate cause of the loss.
• Negligence was solely based on L.C. Diaz’ part.
 CONSOLIDATED BANK V.
L.C. DIAZ
VI. FACTS OF THE CASE
6. CA DECSION: Solidbank is liable
• CA ruled that the case involves quasi-delict:
3 elements of quasi-delict are present in this case:
a. Damages suffered by the plaintiff;
b. Fault or negligence of the defendant, or some other person for
whose acts he must respond; and
c. The connection of cause and effect between the fault or
negligence of the defendant and the damage incurred by the
plaintiff.
• CA ruled that Solidbank’s failure to
call LC Diaz to verify the withdrawal is
the proximate cause of the loss.
 CONSOLIDATED BANK V.
L.C. DIAZ
VII. ISSUE:
Is Solidbank liable for damages? Yes, but mitigated.

DECISIVE ISSUE:
Whether the case involves culpa contractual or culpa
aquiliana. Culpa contractual, because the parties
have a “pre-existing contractual relation.”
 CONSOLIDATED BANK V.
L.C. DIAZ
VII. HELD:
1. The case involves culpa contractual, because of the
pre-existing contractual relationship.
• The Solidbank is liable to L.C. Diaz for breach of the
savings deposit agreement due to negligence.
• Both parties are negligent:
• L.C. Diaz was negligent in allowing a non-depositor to
hold the passbook who left the same unattendedly to
the teller.
• Solidbank was negligent under command responsibility,
because its teller gave the passbook to a stranger and
failed to safeguard the same.
 CONSOLIDATED BANK V.
L.C. DIAZ
VII. HELD:
2. PROXIMATE CAUSE:
• CA held that the proximate cause of the loss is the teller’s
failure to call LC Diaz.
• SC said that CA erred, because there is no law mandating
banks to call their client whenever their representatives
withdraw significant amounts from their accounts.
• PROXIMATE CAUSE, how determined: [DOCTRINE]
Proximate cause is determined by the facts of each
case upon mixed considerations of logic, common
sense, policy and precedent. (PBCom v CA, 1957)
 CONSOLIDATED BANK V.
L.C. DIAZ
VII. HELD:
3. DOCTRINE OF LAST CLEAR CHANCE
• CA held that the doctrine is applicable, hence Solidbank is
chargeable with the loss.
• THE DOCTRINE OF LAST CLEAR CHANCE, defined: The doctrine
of last clear chance states that where both parties are
negligent but the negligent act of one is appreciably later
than that of the other, or where it is impossible to determine
whose fault or negligence caused the loss, the one who had
the last clear opportunity to avoid the loss but failed to do so,
is chargeable with the loss.
• SC says the doctrine is not applicable because this case
involves culpa contractual.
• The doctrine will only mitigate the liability of solid bank.
IN MY OPINION
• The case is quasi-delict,
• since the act that breaches the contract is also a tort
(Air France v. Carrascoso, 1966).
• If this is a case of tort, then the doctrine of last clear
chance is applicable.
• Hence, Solidbank who had the last clear opportunity to
avoid the loss, is chargeable with the loss.