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    Comsavings Bank Vs Sps. Capistrano

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    Jean Ucol
    1) Comsavings Bank approved an interim financing loan for respondents Capistrano for their home construction, but the construction was not completed when Capistrano was required to start paying monthly amortizations. 2) Comsavings Bank submitted false documents like a completion certificate to obtain the loan, even though construction had not started. 3) The court ruled that Comsavings Bank, as a banking institution, failed to exercise the highest degree of diligence and integrity in its dealings with Capistrano. It was liable for damages due to its misrepresentations and negligence.

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    Comsavings Bank Vs Sps. Capistrano

    Uploaded by

    Jean Ucol
    307 views1 page
    1) Comsavings Bank approved an interim financing loan for respondents Capistrano for their home construction, but the construction was not completed when Capistrano was required to start paying monthly amortizations. 2) Comsavings Bank submitted false documents like a completion certificate to obtain the loan, even though construction had not started. 3) The court ruled that Comsavings Bank, as a banking institution, failed to exercise the highest degree of diligence and integrity in its dealings with Capistrano. It was liable for damages due to its misrepresentations and negligence.

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    1) Comsavings Bank approved an interim financing loan for respondents Capistrano for their home construction, but the construction was not completed when Capistrano was required to start paying monthly amortizations. 2) Comsavings Bank submitted false documents like a completion certificate to obtain the loan, even though construction had not started. 3) The court ruled that Comsavings Bank, as a banking institution, failed to exercise the highest degree of diligence and integrity in its dealings with Capistrano. It was liable for damages due to its misrepresentations and negligence.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    307 views1 page

    Comsavings Bank Vs Sps. Capistrano

    Uploaded by

    Jean Ucol
    1) Comsavings Bank approved an interim financing loan for respondents Capistrano for their home construction, but the construction was not completed when Capistrano was required to start paying monthly amortizations. 2) Comsavings Bank submitted false documents like a completion certificate to obtain the loan, even though construction had not started. 3) The court ruled that Comsavings Bank, as a banking institution, failed to exercise the highest degree of diligence and integrity in its dealings with Capistrano. It was liable for damages due to its misrepresentations and negligence.

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    Comsavings Bank vs Spouses Capistrano

    G.R. No. 170942. August 28, 2005.


    BERSAMIN, J.

    DOCTRINE:
    A banking institution is obliged to exercise the highest degree of diligence as well as high
    standards of integrity and performance in all its transactions because its business is imbued with
    public interest.

    FACTS:
    Respondent Spouses Danilo and Estrella Capistrano availed the Unified Home Lending
    Program (UHLP) implemented by the National Home Mortgage Finance Corporation (NHMFC)
    through an accredited-originator Comsavings Bank. As part of the requirements for the release of
    the loan, Comsavings Bank made Capistrano signed various documents, including a ‘Certificate
    of House Completion and Acceptance.’ After compliance with the preliminary requirements of
    the UHLP, an interim financing loan in the amount of ₱260,000.00, which amount was to be paid
    out of the proceeds from NHMFC, was approved and released to the construction contractor
    GCB Builders. Thereafter, while the construction is still ongoing and the house was still
    unfinished, Capistrano received a letter from NHMFC advising them to pay their monthly
    amortizations for the said loan. Respondents protested to said demand contending that the
    ‘Certificate of Completion and Acceptance’ passed to NHMFC was only pre-signed and the
    construction remained not completed, hence it prompted Capistrano to file a complaint against
    Comsavings Bank and GCB Builders for the breach of contract.

    ISSUE:
    Whether or not Comsavings Bank exercised the degree of diligence required of a banking
    institution.

    RULING:
    No, a banking institution like Comsavings Bank serving as an originating bank for the
    Unified Home Lending Program (UHLP) of the Government owes a duty to observe the highest
    degree of diligence and a high standard of integrity and performance in all its transactions with
    its clients because its business is imbued with public interest, to which it failed to do.

    In accordance with Article 20 and Article 1170 of the Civil Code, Comsavings Bank is
    liable for the damages for their misrepresentations in obtaining the mortgage loan from NHMFC
    in the name of the respondents as it submitted false loan documents, such as photographs of the
    completed house, and made the respondent signed the ‘Certificate of House Completion and
    Acceptance’ even if the construction of the house had not yet started. Hence, it had prejudiced
    the respondents as they are demanded payment for the loan despite the non-completion of the
    house. These acts of Comsavings Bank were irregular per se and there is no question that it was
    grossly negligent with its dealings with the respondents because it did not comply with is legal
    obligation to exercise the required diligence and integrity.

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