Philippine Commercial International Bank v. Court of Appeals

Summary

PCIB was held liable for breach of contract when it failed to transmit Rory Lim's P200,000.00 telegraphic transfer for 21 days, causing his checks to bounce. The Supreme Court invalidated PCIB's contractual clause exempting it from liability for errors or delays, ruling such provisions contrary to public policy when the bank acts fraudulently or in bad faith. The Court emphasized that banking services are imbued with public interest and complete exemption from liability cannot be sanctioned. While affirming liability, the Court reduced moral damages from P400,000.00 to P200,000.00 as more reasonable, while maintaining exemplary damages, attorney's fees, and actual damages. The decision establishes important precedent regarding contracts of adhesion in banking services and limitations on liability exemption clauses when bad faith is involved.