These acts constituted gross negligence on the part

These acts constituted gross negligence on the part
of petitioners PNB and Aguilar. 71
However, according to respondents, the Court of Appeals erred in deleting the award for exemplary
damages because the acts in violation of the bank's fiduciary were done in bad faith. 72 ATICcS
We rule for the respondents.
The trial court and the Court of Appeals correctly found that petitioners PNB and Aguilar were negligent
in handling the deposit of Angel C. Santos.
The contractual relationship between banks and their depositors is governed by the Civil Code provisions
on simple loan. 73 Once a person makes a deposit of his or her money to the bank, he or she is considered to
have lent the bank that money. 74 The bank becomes his or her debtor, and he or she becomes the creditor of
the bank, which is obligated to pay him or her on demand. 75
The default standard of diligence in the performance of obligations is "diligence of a good father of a
family." Thus, the Civil Code provides:
ART. 1163. Every person obliged to give something is also obliged to take care of it with the
proper diligence of a good father of a family , unless the law or the stipulation of the parties
requires another standard of care.
xxx xxx xxx
ART. 1173. The fault or negligence of the obligor consists in the omission of that diligence which
is required by the nature of the obligation and corresponds with the circumstances of the
persons, of the time and of the place. When negligence shows bad faith, the provisions of
articles 1171 and 2201, paragraph 2; shall apply.
If the law or contract does not state the diligence which is to be observed in the performance,
that which is expected of a good father of a family shall be required . (Emphasis supplied)
"Diligence of a good father of a family" is the standard of diligence expected of, among others,
usufructuaries, 76 passengers of common carriers, 77 agents, 78 depositaries, 79 pledgees, 80 officious
managers, 81 and persons deemed by law as responsible for the acts of others. 82 "The diligence of a good

father of a family requires only that diligence which an ordinary prudent man would exercise with regard to his
own property." 83
Other industries, because of their nature, are bound by law to observe higher standards of diligence.
Common carriers, for example, must observe "extraordinary diligence in the vigilance over the goods and for the
safety of [their] passengers" 84 because it is considered a business affected with public interest. "Extraordinary
diligence" with respect to passenger safety is further qualified as "carry[ing] the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for
all the circumstances." 85
Similar to common carriers, banking is a business that is impressed with public interest. It affects
economies and plays a significant role in businesses and commerce. 86 The public reposes its faith and
confidence upon banks, such that "even the humble wage-earner has not hesitated to entrust his life's savings to