presented itself.[3]
[G.R. No. 141011. July 19, 2001]
Two days later, or on 19 June 1986, VILLANUEVA
CITYTRUST BANKING CORPORATION (now Bank of received a call from Helen Chu, informing him that she
the Philippine Islands), petitioner, had already placed a trading order in his behalf and
vs. ISAGANI C. VILLANUEVA, respondent. delivered the check to Kingly Commodities. The check was
deposited with the China Banking Corporation. The next
day, he deposited P31,600 in cash to his savings account
[G.R. No. 141028. July 19, 2001] to cover the full amount of the check he issued. His
deposits in both accounts totalled P51,304.91.[4]
ISAGANI C. VILLANUEVA, petitioner, vs. CITYTRUST
BANKING CORPORATION, respondent. However, on 23 June 1986, VILLANUEVAs Check No.
396701 was dishonored due to insufficiency of funds and
DECISION disparity in the signature. VILLANUEVA called Kingly
Commodities and explained that there was a mistake in
the dishonor of the check because he had sufficient
DAVIDE, JR., C.J.: funds. Forthwith on the same day, VILLANUEVA called up
the BANKs Legaspi Village Branch Operations Manager,
In these consolidated cases, the Court is called upon Maritess Gamboa, and inquired about the dishonor of his
to determine whether the repeated dishonor of a check well-funded check. Gamboa promised to look into the
drawn against a well-funded account but bearing the matter and instructed VILLANUEVA to advise his payee,
account number of another depositor with the same name Kingly Commodities, to re-deposit the check. Gamboa
and surname as the drawer would entitle the drawer to assured VILLANUEVA that the check would be honored
compensatory and moral damages and to attorneys fees. after the sufficiency of the funds was ascertained.[5]
The antecedent facts are as follows: On 26 June 1986 at about 4:00 p.m., VILLANUEVA
learned that his check was again dishonored due to
insufficiency of funds and a stop- payment order he
Sometime in February 1984, Isagani C. Villanueva
allegedly issued. Dismayed by the turn of events,
(hereafter VILLANUEVA) opened a savings account and a
VILLANUEVA called up the BANK and inquired from
current account with Citytrust Banking Corporation
Gamboa the reason for the dishonor of his well-funded
(hereafter the BANK), which were assigned account
check and the alleged stop-payment order which he never
numbers 1-033-02337-1 and 33-00977-5, respectively,
issued. Gamboa promised to investigate the matter and to
with an automatic transfer arrangement.
call VILLANUEVA in fifteen (15) minutes. [6] In the
meantime, she advised VILLANUEVA to re-deposit the
On 21 May 1986, VILLANUEVA deposited some check.
money in his savings account with the BANKs Legaspi
Village Branch in Makati, Metro Manila. Realizing that he
VILLANUEVA then requested Lawrence Chin of Kingly
had run out of blank checks, VILLANUEVA requested a new
Commodities to give him until 5:30 p.m. that same day to
checkbook from one of the BANKs customer service
make good his P50,000 check. He then proceeded to the
representatives. He then filled up a checkbook requisition
BANKs Legaspi Village Branch Office, together with his
slip with the obligatory particulars, except for his current
investment consultant and his trading partner, to
account number which he could not remember. He
personally inquire into the matter. They were met by
expressed his predicament to a lady customer service
Marilou Genuino, the BANKs Branch Manager. There he
representative of the BANK, who in turn assured him that
complained that his trading order was rejected because of
she could supply the information from the BANKs account
the dishonor of the check and that Kingly Commodities
records. After signing the requisition slip, he gave it to her.
[1] threatened to close his trading account unless his check
payment would be made good before 5:30 p.m. that
day. After making the necessary investigation, Genuino
Pia Rempillo, another customer service related to VILLANUEVA that the reason for the dishonor of
representative of the BANK, saw VILLANUEVAs checkbook the check was that the account number assigned to his
requisition slip. She took it and proceeded to check the new checkbook was the account number of another
BANKs checkbook register which contained all the names depositor also named Isagani Villanueva but with a
and account numbers of the BANKs clients who were different middle initial.[7]
issued checkbooks. Upon seeing the name Isagani
Villanueva -- Account No. 33-00446-3 in the checkbook
To resolve the matter, Genuino promised to send to
register, Rempillo copied the aforesaid account number on
Kingly Commodities a managers check for P50,000 before
the space intended for it in VILLANUEVAs requisition slip. [2]
5:30 p.m., the deadline given to VILLANUEVA. She also
personally called Kingly Commodities and explained the
On 17 June 1986, VILLANUEVA received from the reason for the dishonor of the check. [8]
BANK his requested checkbook. On the same day, he
immediately signed Check No. 396701 bearing the
On 30 June 1986, VILLANUEVA sent a letter [9] to the
amount of P50,000 payable to the order of Kingly
BANK addressed to the President, Jose Facundo,
Commodities Traders and Multi Resources, Inc. (hereafter
demanding indemnification for alleged losses and
Kingly Commodities). VILLANUEVA thereafter delivered the
damages suffered by him as a result of the dishonor of his
check to Helen Chu, his investment consultant at Kingly
well-funded check. He demanded the amount of P70,000
Commodities, with his express instruction to use said
check in placing a trading order at Kingly Commodities
VILLANUEVA alleged in his complaint that the BANK Likewise, the trial court doubted that VILLANUEVA
breached its contractual obligation to him as a depositor sustained actual damages in the amount of P240,000 due
because of its repeated dishonor of his valid and well- to loss of profits as averred in the complaint considering
funded check. The breach arose from the BANKs gross that his initial claim against the BANK for actual loss was
negligence and culpable recklessness in supplying the merely P70, 000[14] and the evidence presented in support
wrong account number. As a consequence, he suffered thereof was hearsay, unreliable and not the best evidence.
and sustained (1) actual damages consisting of loss of
profits in the amount of at least P240,000, for he was not VILLANUEVA appealed to the Court of Appeals. The
allowed to trade by Kingly Commodities; and (2) P2 Million appeal was docketed as CA-G.R. CV No. 40931.
as moral damages because of the intolerable physical
inconvenience, discomfort, extreme humiliation, In his appeal, VILLANUEVA maintained that the BANK
indignities, etc., that he had borne before his peers and was guilty of gross or culpable negligence amounting to
colleagues in the firm, his trading partners, and the bad faith when its customer service representative
officers of Kingly Commodities. He prayed for an additional furnished an erroneous account number. He further
award of P500,000 for exemplary damages, attorneys contended that the same was the proximate cause of the
fees, litigation expenses and costs of the suit.[11] repeated dishonor of his check. He should, therefore, be
entitled to an award of actual, moral and exemplary
In its answer, the BANK alleged that VILLANUEVA damages, including attorneys fees and costs of the suit.
suffered no actionable injury, much less damages,
considering his blatant irresponsibility in not remembering The Court of Appeals, in its decision of 2 February
his current account number and in failing to bring his 1999,[15] ruled that when the BANK voluntarily processed
checkbook re-order slip form on which his account number the requisition slip without the requisite account number
was inscribed when he requested a new set of checks. His being supplied by the applicant, it in effect took upon itself
negligence in verifying the account number of the new set the obligation to supply the correct account number. Thus,
of checks issued to him also contributed to the dishonor of when the new checkbook was released to VILLANUEVA on
his check. The BANK claimed that it acted in good faith 17 June 1986, the BANK was deemed to have waived any
when it twice dishonored the check. It further asserted defect in the requisition slip and estopped from putting the
that VILLANUEVAs negligence was the proximate cause of blame on VILLANUEVAs failure to indicate his account
his self-proclaimed injury; and the alleged losses and number. VILLANUEVA had every right to assume that
damages could not likewise be deemed the natural and everything was in order in his application for a new
probable consequences of the BANKs breach of obligation, checkbook; for, after all, he was banking with a world class
had there been any.Finally, it claimed that VILLANUEVA universal bank. The banking industry is imbued with public
acted with malice in filing the case, and interposed interest and is mandated by law to serve its clients with
counterclaims of P500,000 as exemplary extraordinary care and diligence.
damages; P250,000 as attorneys fees; and actual
damages as may be determined by the court.[12]
The Court of Appeals also considered the BANKs
voluntary processing of the requisition slip as the cause
After due proceedings, the trial court rendered on 3 which in the natural and continuous sequence, unbroken
July 1992 a decision[13] dismissing the complaint and the by any efficient intervening cause, produced the injury
compulsory counterclaim for lack of merit. To the trial and without which the result would not have occurred.
court, the basic issue was whether it was VILLANUEVAs or [16]
However, although it conceded that the BANKs
the BANKs negligence which was the proximate cause of negligence was not attended with malice and bad faith, it
the formers alleged injury. After an evaluation of the nonetheless awarded moral damages in the amount
respective allegations and evidence of the parties, the trial of P100,000. It also awarded attorneys fees in the amount
court found that VILLANUEVAs negligence set the chain of of P50,000, since VILLANUEVA was compelled to incur
events which resulted in his alleged losses and expenses to protect his interests by reason of the
damages. His negligence consisted in his failure to (a) unjustified act or omission of the BANK. However, it
indicate his current account number when he filled up his rejected VILLANUEVAs claim for compensatory damages
requisition slip for a new set of checks; (b) remember his and affirmed the trial courts finding thereon.
No costs.
SO ORDERED.
Upon her return from the province, private respondent was III. WHETHER OR NOT THE RESPONDENT
surprised to learn of the dishonor of the check. She went COURT OF APPEALS ACTED IN GRAVE
to the Valenzuela Branch of Prudential Bank on July 4, ABUSE OF DISCRETION AMOUNTING TO
1988, to inquire why her check was dishonored. She LACK OF JURISDICTION, WHERE, EVEN IN
approached one Albert Angeles Reyes, the officer in THE ABSENCE OF EVIDENCE AS FOUND
charge of current account, and requested him for the BY THE TRIAL COURT, AWARDED
ledger of her current account. Private respondent P50,000.00 BY WAY OF EXEMPLARY
discovered a debit of P300.00 penalty for the dishonor of DAMAGES. Co-urt
her Prudential Check No. 983395. She asked why her
check was dishonored when there were sufficient funds in IV. WHETHER OR NOT THE RESPONDENT
her account as reflected in her passbook. Reyes told her COURT OF APPEALS ACTED WITH GRAVE
that there was no need to review the passbook because ABUSE OF DISCRETION WHERE EVEN IN
the bank ledger was the best proof that she did not have THE ABSENCE OF EVIDENCE, AWARDED
sufficient funds. Then, he abruptly faced his typewriter ATTORNEY'S FEES.
and started typing. S-jcj
G.R. Nos. 121413 and 121479 are twin petitions for review It has been duly established that for the payment
of the March 27, 1995 Decision1 of the Court of Appeals in of plaintiff's percentage tax for the last quarter of
CA-G.R. CV No. 25017, entitled "Ford Philippines, Inc. vs. 1977, the Bureau of Internal Revenue issued
Citibank, N.A. and Insular Bank of Asia and America (now Revenue Tax Receipt No. 18747002, dated
Philipppine Commercial International Bank), and the October 20, 1977, designating therein in
August 8, 1995 Resolution,2 ordering the collecting bank, Muntinlupa, Metro Manila, as the authorized agent
Philippine Commercial International Bank, to pay the bank of Metrobanl, Alabang branch to receive the
amount of Citibank Check No. SN-04867. tax payment of the plaintiff.
In G.R. No. 128604, petitioner Ford Philippines assails the On December 19, 1977, plaintiff's Citibank Check
October 15, 1996 Decision3 of the Court of Appeals and its No. SN-04867, together with the Revenue Tax
March 5, 1997 Resolution4 in CA-G.R. No. 28430 entitled Receipt No. 18747002, was deposited with
"Ford Philippines, Inc. vs. Citibank, N.A. and Philippine defendant IBAA, through its Ermita Branch. The
Commercial International Bank," affirming in toto the latter accepted the check and sent it to the
judgment of the trial court holding the defendant drawee Central Clearing House for clearing on the samd
bank, Citibank, N.A., solely liable to pay the amount of day, with the indorsement at the back "all prior
P12,163,298.10 as damages for the misapplied proceeds indorsements and/or lack of indorsements
of the plaintiff's Citibanl Check Numbers SN-10597 and guaranteed." Thereafter, defendant IBAA
16508. presented the check for payment to defendant
Citibank on same date, December 19, 1977, and
the latter paid the face value of the check in the
I. G.R. Nos. 121413 and 121479 amount of P4,746,114.41. Consequently, the
amount of P4,746,114.41 was debited in plaintiff's
The stipulated facts submitted by the parties as accepted account with the defendant Citibank and the
by the Court of Appeals are as follows: check was returned to the plaintiff.
"On October 19, 1977, the plaintiff Ford drew and Upon verification, plaintiff discovered that its
issued its Citibank Check No. SN-04867 in the Citibank Check No. SN-04867 in the amount of
amount of P4,746,114.41, in favor of the P4,746,114.41 was not paid to the Commissioner
Commissioner of Internal Revenue as payment of of Internal Revenue. Hence, in separate letters
plaintiff;s percentage or manufacturer's sales dated October 26, 1979, addressed to the
taxes for the third quarter of 1977. defendants, the plaintiff notified the latter that in
case it will be re-assessed by the BIR for the
payment of the taxes covered by the said checks,
then plaintiff shall hold the defendants liable for
Defendant Citibank maintains that; the payment it "4. With costs against the defendants.
made of plaintiff's Citibank Check No. SN-04867 in
the amount of P4,746,114.41 "was in due course";
it merely relied on the clearing stamp of the SO ORDERED."6
depository/collecting bank, the defendant IBAA
that "all prior indorsements and/or lack of Not satisfied with the said decision, both defendants,
indorsements guaranteed"; and the proximate Citibank and PCIBank, elevated their respective petitions
cause of plaintiff's injury is the gross negligence for review on certiorari to the Courts of Appeals. On March
of defendant IBAA in indorsing the plaintiff's 27, 1995, the appellate court issued its judgment as
Citibank check in question. follows:
It is admitted that on December 19, 1977 when "WHEREFORE, in view of the foregoing, the court
the proceeds of plaintiff's Citibank Check No. SN- AFFIRMS the appealed decision with
048867 was paid to defendant IBAA as collecting modifications.
bank, plaintiff was maintaining a checking
account with defendant Citibank." 5
The court hereby renderes judgment:
I. Did the respondent court err when, after finding 4. Petitioner Ford's cause of action had
that the petitioner acted on the check drawn by not prescribed.13
respondent Ford on the said respondent's
instructions, it nevertheless found the petitioner
liable to the said respondent for the full amount of II. G.R. No. 128604
the said check.
The same sysndicate apparently embezzled the proceeds
II. Did the respondent court err when it did not of checks intended, this time, to settle Ford's percentage
find prescription in favor of the petitioner.8 taxes appertaining to the second quarter of 1978 and the
first quarter of 1979.
2. Respondent Citibank failed to observe The checks never reached the payee, CIR. Thus, in a letter
its duty as banker with respect to the dated February 28, 1980, the BIR, Region 4-B, demanded
subject check, which was crossed and for the said tax payments the corresponding periods
payable to "Payee's Account Only." above-mentioned.
3. Respondent Citibank raises an issue for As far as the BIR is concernced, the said two BIR Revenue
the first time on appeal; thus the same Tax Receipts were considered "fake and spurious". This
should not be considered by the anomaly was confirmed by the NBI upon the initiative of
Honorable Court. the BIR. The findings forced Ford to pay the BIR a new,
while an action was filed against Citibank and PCIBank for
the recovery of the amount of Citibank Check Numbers
4. As correctly held by the trial court, SN-10597 and 16508.
there is no evidence of gross negligence
on the part of petitioner Ford.9
The Regional Trial Court of Makati, Branch 57, which tried
the case, made its findings on the modus operandi of the
II. PCI Bank is liable to petitioner Ford considering syndicate, as follows:
that:
Furthermore, it was admitted that PCIBank is authorized to "Anent petitioner's liability on said instruments,
collect the payment of taxpayers in behalf of the BIR. As this court is in full accord with the ruling of the
an agent of BIR, PCIBank is duty bound to consult its PCHC's Board of Directors that:
principal regarding the unwarranted instructions given by
the payor or its agent. As aptly stated by the trial court, to 'In presenting the checks for clearing and for
wit: payment, the defendant made an express
guarantee on the validity of "all prior
"xxx. Since the questioned crossed check was endorsements." Thus, stamped at the back of the
deposited with IBAA [now PCIBank], which checks are the defedant's clear warranty: ALL
claimed to be a depository/collecting bank of BIR, PRIOR ENDORSEMENTS AND/OR LACK OF
it has the responsibility to make sure that the ENDORSEMENTS GUARANTEED. Without such
check in question is deposited in Payee's account warranty, plaintiff would not have paid on the
only. checks.'
xxx xxx xxx No amount of legal jargon can reverse the clear
meaning of defendant's warranty. As the warranty
has proven to be false and inaccurate, the
As agent of the BIR (the payee of the check), defendant is liable for any damage arising out of
defendant IBAA should receive instructions only the falsity of its representation."25
from its principal BIR and not from any other
person especially so when that person is not
known to the defendant. It is very imprudent on Lastly, banking business requires that the one who first
the part of the defendant IBAA to just rely on the cashes and negotiates the check must take some
alleged telephone call of the one Godofredo percautions to learn whether or not it is genuine. And if
Rivera and in his signature considering that the the one cashing the check through indifference or othe
plaintiff is not a client of the defendant IBAA." circumstance assists the forger in committing the fraud,
he should not be permitted to retain the proceeds of the
check from the drawee whose sole fault was that it did not
It is a well-settled rule that the relationship between the discover the forgery or the defect in the title of the person
payee or holder of commercial paper and the bank to negotiating the instrument before paying the check. For
which it is sent for collection is, in the absence of an this reason, a bank which cashes a check drawn upon
argreement to the contrary, that of principal and another bank, without requiring proof as to the identity of
agent.22 A bank which receives such paper for collection is persons presenting it, or making inquiries with regard to
the agent of the payee or holder.23 them, cannot hold the proceeds against the drawee when
On the issue of prescription, PCIBank claims that the Costs against Philippine Commercial International Bank
action of Ford had prescribed because of its inability to and Citibank N.A.
seek judicial relief seasonably, considering that the
alleged negligent act took place prior to December 19, SO ORDERED.
1977 but the relief was sought only in 1983, or seven
years thereafter. SECOND DIVISION
The statute of limitations begins to run when the bank [G.R. No. 113236. March 5, 2001]
gives the depositor notice of the payment, which is
ordinarily when the check is returned to the alleged
drawer as a voucher with a statement of his FIRESTONE TIRE & RUBBER COMPANY OF THE
account,39 and an action upon a check is ordinarily PHILIPPINES, petitioner, vs., COURT OF
governed by the statutory period applicable to APPEALS and LUZON DEVELOPMENT
instruments in writing.40 BANK, respondents.
Our laws on the matter provide that the action upon a DECISION
written contract must be brought within ten year from the
time the right of action accrues. 41 hence, the reckoning QUISUMBING, J.:
time for the prescriptive period begins when the
instrument was issued and the corresponding check was
returned by the bank to its depositor (normally a month This petition assails the decision[1] dated December
thereafter). Applying the same rule, the cause of action for 29, 1993 of the Court of Appeals in CA-G.R. CV No. 29546,
the recovery of the proceeds of Citibank Check No. SN which affirmed the judgment[2] of the Regional Trial Court
04867 would normally be a month after December 19, of Pasay City, Branch 113 in Civil Case No. PQ-7854-P,
1977, when Citibank paid the face value of the check in dismissing Firestones complaint for damages.
the amount of P4,746,114.41. Since the original complaint
for the cause of action was filed on January 20, 1984, The facts of this case, adopted by the CA and based
barely six years had lapsed. Thus, we conclude that Ford's on findings by the trial court, are as follows:
cause of action to recover the amount of Citibank Check
No. SN 04867 was seasonably filed within the period
[D]efendant is a banking corporation. It operates under a
provided by law.
certificate of authority issued by the Central Bank of the
Philippines, and among its activities, accepts savings and
Finally, we also find thet Ford is not completely blameless time deposits. Said defendant had as one of its client-
in its failure to detect the fraud. Failure on the part of the depositors the Fojas-Arca Enterprises Company (Fojas-Arca
depositor to examine its passbook, statements of account, for brevity). Fojas-Arca maintaining a special savings
In January 1978, plaintiff and Fojas-Arca entered into a On September 25, 1979, counsel of plaintiff served a
Franchised Dealership Agreement (Exh. B) whereby Fojas- written demand upon the defendant for the satisfaction of
Arca has the privilege to purchase on credit and sell the damages suffered by it. And due to defendants refusal
plaintiffs products. to pay plaintiffs claim, plaintiff has been constrained to file
this complaint, thereby compelling plaintiff to incur
On January 14, 1978 up to May 15, 1978. Pursuant to the litigation expenses and attorneys fees which amount are
aforesaid Agreement, Fojas-Arca purchased on credit recoverable from the defendant.
Firestone products from plaintiff with a total amount of
P4,896,000.00. In payment of these purchases, Fojas-Arca Controverting the foregoing asseverations of plaintiff,
delivered to plaintiff six (6) special withdrawal slips drawn defendant asserted, inter alia that the transactions
upon the defendant. In turn, these were deposited by the mentioned by plaintiff are that of plaintiff and Fojas-Arca
plaintiff with its current account with the Citibank. All of only, [in] which defendant is not involved; Vehemently, it
them were honored and paid by the defendant. This was denied by defendant that the special withdrawal slips
singular circumstance made plaintiff believe [sic] and were honored and treated as if it were checks, the truth
relied [sic] on the fact that the succeeding special being that when the special withdrawal slips were received
withdrawal slips drawn upon the defendant would be by defendant, it only verified whether or not the
equally sufficiently funded. Relying on such confidence signatures therein were authentic, and whether or not the
and belief and as a direct consequence thereof, plaintiff deposit level in the passbook concurred with the savings
extended to Fojas-Arca other purchases on credit of its ledger, and whether or not the deposit is sufficient to
products. cover the withdrawal; if plaintiff treated the special
withdrawal slips paid by Fojas-Arca as checks then plaintiff
On the following dates Fojas-Arca purchased Firestone has to blame itself for being grossly negligent in treating
products on credit (Exh. M, I, J, K) and delivered to plaintiff the withdrawal slips as check when it is clearly stated
the corresponding special withdrawal slips in payment therein that the withdrawal slips are non-negotiable; that
thereof drawn upon the defendant, to wit: defendant is not a privy to any of the transactions
between Fojas-Arca and plaintiff for which reason
defendant is not duty bound to notify nor give notice of
DATE WITHDRAWAL AMOUNT anything to plaintiff. If at first defendant had given notice
to plaintiff it is merely an extension of usual bank courtesy
SLIP NO. to a prospective client; that defendant is only dealing with
its depositor Fojas-Arca and not the plaintiff. In
summation, defendant categorically stated that plaintiff
June 15, 1978 42127 P1,198,092.80 has no cause of action against it (pp. 1-3, Dec.; pp. 368-
370, id).[3]
July 15, 1978 42128 940,190.00
Petitioners complaint[4] for a sum of money and
Aug. 15, 1978 42129 880,000.00 damages with the Regional Trial Court of Pasay City,
Branch 113, docketed as Civil Case No. 29546, was
dismissed together with the counterclaim of defendant.
Sep. 15, 1978 42130 981,500.00
Hence, the instant petition, alleging the following A bank is under obligation to treat the accounts of its
assignment of error: depositors with meticulous care, whether such account
consists only of a few hundred pesos or of millions of
25. The CA grievously erred in holding that pesos.[13] The fact that the other withdrawal slips were
the [Luzon Development] Bank was free honored and paid by respondent bank was no license for
from any fault or negligence regarding Citibank to presume that subsequent slips would be
the dishonor, or in failing to give fair honored and paid immediately. By doing so, it failed in its
and timely advice of the dishonor, of fiduciary duty to treat the accounts of its clients with the
the two intermediate LDB Slips and in highest degree of care.[14]
failing to award damages to Firestone
pursuant to Article 2176 of the New In the ordinary and usual course of banking
Civil Code.[8] operations, current account deposits are accepted by the
bank on the basis of deposit slips prepared and signed by
The issue for our consideration is whether or not the depositor, or the latters agent or representative, who
respondent bank should be held liable for damages indicates therein the current account number to which the
suffered by petitioner, due to its allegedly belated notice deposit is to be credited, the name of the depositor or
of non-payment of the subject withdrawal slips. current account holder, the date of the deposit, and the
amount of the deposit either in cash or in check.[15]
Damages are not intended to enrich the complainant On April 6, 1982, MBTC received from the Central Bank a
at the expense of the defendant, and there is no hard-and- credit memo dated April 5, 1982 that its demand deposit
fast rule in the determination of what would be a fair account was credited with P304,000.00 for the account of
amount of moral damages since each case must be RBPG, representing loans granted by the Central Bank to
governed by its own peculiar facts. The yardstick should RBPG. On the basis of said credit memo, Isabel Katigbak
be that it is not palpably and scandalously excessive. In issued several checks against its account with MBTC in the
this case, the award of P100,000.00 is reasonable total amount of P300,000.00, two (2) of which (Metrobank
considering the reputation and social standing of private Check Nos. 0069 and 0070) were payable to Dr. Felipe C.
respondent Pujol and applying our rulings in similar cases Roque and Mrs. Eliza Roque for P25,000.00 each. Said
involving banks negligence with regard to the accounts of checks issued to Dr. and Mrs. Roque were deposited by the
their depositors.[9] The award of attorneys fees in the Roques with the Philippine Banking Corporation,
amount of P20,000.00 is proper for respondent Pujol was Novaliches Branch in Quezon City. When these checks
compelled to litigate to protect her interest. [10] were forwarded to MBTC on April 12, 1982 for payment
(six (6) days from receipt of the Credit Memo), the checks
were returned by MBTC with the annotations "DAIF TNC"
WHEREFORE, the petition is DENIED and the (Drawn Against Insufficient Funds Try Next Clearing) so
Decision of the Court of Appeals which affirmed the award they were redeposited on April 14, 1982. These
by the Regional Trial Court of Pasig City of moral damages were however again dishonored and returned unpaid for
of P100,000.00 and attorneys fees of P20,000.00 in favor the following reason: "DAIF TNC NO ADVICE FROM
of private respondent Lily S. Pujol is AFFIRMED. Costs CB."
against petitioner.
After the second dishonor of the two (2) checks, Dr. Felipe
SO ORDERED. Roque, a member of the Board of Directors of Philippine
Banking Corporation, allegedly went to the Office of
THIRD DIVISION Antonio Katigbak, an officer of RBPG, chiding him for the
bouncing checks. In order to appease the doctor, RBPG
paid Dr. Roque P50,000.00 in cash to replace the aforesaid
checks.
Siguion Reyna, Montecillo & Ongsiako for private Second, that RCBC had been remiss in the performance of
respondent. its obligation to the petitioner when it "missent" the
cashier's check to the Central Bank knowing, as it should,
that the source of the check, PCIB, Puerto Princesa Branch,
is not included in the areas required to be cleared by the
Central Bank, a fact known to the banking world and
KAPUNAN, J.: surely to the respondent bank; 7
This petition seeks to set aside the decision of the Court of Third, that RCBC upon knowing of its error in "missending"
Appeals dated January 12, 1993 in CA-G.R. CV No. 31083, the cashier's check to the Central Bank did not attempt to
entitled Ramon Tan, plaintiff-appellee, vs. Rizal rectify its "misclearing" error by clearing it seasonably
Commercial Banking Corporation, defendant-appellant, with PCIB, Puerto Princesa, thru its own RCBC Puerto
reversing the decision of the Regional Trial Court dated Princesa Branch with whom it had direct radio contact; 8
December 28, 1990 ordering respondent bank Rizal
Commercial Banking Corporation (RCBC), Binondo Branch,
to pay petitioner damages and attorney's fees in the Fourth, that as an old client, with twelve (12) years of
amount of ONE MILLION THIRTY FIVE THOUSAND good standing then, RCBC should have given him more
(P1,035,000.00) PESOS. consideration by exerting greater diligence in clearing the
check with PCIB, Puerto Princesa, to protect its client's
interest; 9
The following are the uncontroverted facts:
Fifth, that RCBC failed to inform petitioner promptly that
Petitioner Ramon Tan, a trader-businessman and the check had not been cleared, despite its debiting
community leader in Puerto Princesa, had maintained without delay the amount covered by the check from the
since 1976 Current Account No. 109058068 with account of the petitioner and hastily charging the latter
respondent bank's Binondo branch. On March 11, 1988, to service fees immediately after the return of the "missent
avoid carrying cash while enroute to Manila, he secured a checks"; 10 and
Cashier's Check No. L 406000126 from the Philippine
Commercial Industrial Bank (PCIB), Puerto Princesa
branch, in the amount of Thirty Thousand (P30,000.00) Finally, that the bounced checks resulting from RCBC's
Pesos, payable to his order. He deposited the check in his "misclearing" had put in doubt his credibility among his
account with RCBC Binondo on March 15. On the same business peers and sullied his reputation as a community
day, RCBC erroneously sent the same cashier's check for leader which he had painstakingly cultivated for years. His
clearing to the Central Bank which was returned for having community standing as a business-socio-civic leader was a
been "missent" or "misrouted." 1 The next day, March 16, source of pride for him in his old age of 70. He cited being
RCBC debited the amount covered by the same cashier's Chairman of Palawan Boy Scout Council, 2-term President
check from the account of the petitioner. Respondent bank of the Rotary Club of Puerto Princesa, member of Palawan
at this time had not informed the petitioner of its action Chamber of Commerce and Industry, member of the
which the latter claims he learned of only 42 days after, Monitoring Team of the Palawan Integrated Area
specifically on March 16, when he received the bank's Development Project, member of Lion's Club, Philippine
debit memo.2 Relying on the common knowledge that a Rifle Pistol Association and the Saturday Health Club to
cashier's check was as good as cash, that the usual justify his claim for moral damages. 11
banking practice that local checks are cleared within three
(3) working days and regional checks within seven (7) In its defense, RCBC disowning any negligence, put the
working days, and the fact that the cashier's check was blame for the "misrouting" on the petitioner for using the
accepted, petitioner issued two (2) personal checks both wrong check deposit slip. It insisted that the misuse of a
dated March 18. Check No. 040719 in the name of Go Lac local check deposit slip, instead of a regional check
for Five Thousand Five Hundred (P5,5000.00) Pesos was deposit slip, triggered the "misrouting" by RCBC of the
presented on April 25, 3 more than 30 days from cashier's check to the Central Bank and it was petitioner's
petitioner's deposit date of the cashier's check. Check negligent "misuse" of a local deposit slip which was the
No. 040718 in the name of MS Development Trading proximate cause of the "misrouting," thus he should bear
Corporation for Six Thousand Fifty-Three Pesos and the consequence. 12
Seventy Centavos (P6,053.70) was returned twice on
March 24, nine (9) days from his deposit date and again RCBC alleged that it complied strictly with accepted
on April 26, twenty-two days after the day the cashier's banking practice when it debited the amount of
check was deposited for insufficiency of funds. 4 P30,000.00 against petitioner's account since under
Resolution No. 2202 dated December 21, 1979 of the
Petitioner, alleging to have suffered humiliation and loss of Monetary Board, it is a matter of policy to prohibit the
face in the business sector due to the bounced checks, drawing against uncollected deposits (DAUDS) except
filed a complaint against RCBC for damages in the when the drawings are made against uncollected deposits
Regional Trial Court of Palawan and Puerto Princesa, representing bank manager's/cashier's/treasurer's checks,
Branch 47, docketed as Civil Case No. 2101. 5 treasury warrants, postal money orders and duly funded
"on us" checks which may be permitted at the discretion
During the trial, petitioner sought to prove: of each bank. 13Without crediting the P30,000.00 deposit,
petitioner's balance before and after was Two Thousand
Seven Hundred
First, that it was RCBC's responsibility to call his attention Ninety-Two Pesos and the (P2,792.88) Eighty-Eight
there and then that he had erroneously filled the wrong Centavos. 14 Thus, it dishonored the two (2) checks
deposit slip at the time he deposited the cashier's check
RCBC further asseverated it was merely acting as But the claim of the plaintiff that he was
petitioner's collecting agent and it assumed no not advised that the Cashier's check was
responsibility beyond care in selecting correspondents missent does not seem to be correct. The
under the theory that where a check is deposited with a evidence indicated that the defendant
collecting bank the relationship created is that of agency bank thru its personnel had called him up
and not creditor-debtor, thus it cannot be liable. 16 thru telephone in the number (No. 60-45-
23) which he gave in his specimen
Finally, respondent claimed that serious attempts were signature card. But it came out, that said
made to contact petitioner through the telephone telephone number was no longer active
numbers in the signature specimen card of petitioner but or was already deleted from the list of
to no avail. 17 The Assistant Branch Accountant of RCBC telephone numbers.
Binondo Branch testified that the first telephone number
in the card had been deleted from the phone company's There was an instruction on the part of
list and that when RCBC tried to contact petitioner's the plaintiff for the bank to contact his
daughter Evelyn Tan-Banzon thru a certain telephone daughter, Mrs. Evelyn Tan Banzon and
number and when they asked for Evelyn Tan, they were according to the plaintiff, she too, was not
told there was no such person. 18 contacted as per his instruction. The
evidence, however, indicated that Ms.
The trial court rendered a decision on December 28, 1990 Evelyn Tan also could not be contacted at
in petitioner's favor, the dispositive portion 19 of which the number supposed to pertain to her as
reads: appeared in the specimen signature card.
In other words while there was
WHEREFORE, premises considered, compliance with the instructions given by
plaintiff having proven the allegations of the plaintiff but said instructions were
his verified complaint by preponderance faulty. The plaintiff as a customer of the
of evidence, the court hereby renders bank is under obligation to inform the
judgment ordering defendant bank, defendant of any changes in the
Binondo Branch, Manila, to pay him telephone numbers to be contacted in the
damages and attorney's fees in the total event of any exigency.
amount of P1,035,000.00 Philippine
Currency, broken down as follows: All in all, the facts indicate that the
P700,000.00 as moral damages, refusal of RCBC to credit the amount of
P200,000.00 as exemplary damages; P30,000.00 to the plaintiff's current
P135,000.00 which is 15% of the sum account is consistent with the accepted
herein awarded to plaintiff, as attorney's banking practice. As the defendant bank
fees and to pay costs of suit. had claimed, under Resolution No. 2202
dated December 21, 1979 of the
For having failed to prove by any receipt Monetary Board, it had been emphatically
or writing to underpin it, plaintiff's claim declared as a matter of policy that no
for actual damage is denied for lack of drawings should be made against
merit. uncollected deposits except when the
drawings are made against uncollected
deposits representing bank
IT IS SO ORDERED. manager's/cashier's/treasurer's checks,
treasury warrants, postal money orders,
RCBC appealed to the Court of Appeals contending that and duly funded "on-us" checks as may
the trial court erred in holding RCBC liable to petitioner on be permitted at the discretion of each
account of its alleged negligence and in awarding bank.
petitioner moral and exemplary damages and attorney's
fees. It is clear that immediate payment
without awaiting clearance of a cashier's
The Court of Appeals on January 12, 1993 rendered a check is discretionary with the bank to
decision 20 with the following decretal portion: whom the check is presented and such
being the case, the refusal to allow it as
in this case is not to be equated with
WHEREFORE, and upon all the foregoing, negligence in the basic perception that
the decision of the court below is discretion is not demandable as a right. In
REVERSED and this complaint is the instant case, prior to the deposit of
DISMISSED without pronouncement as to P30,000.00, the plaintiff's account
cost. appeared to be only in the amount of
1. THE HONORABLE COURT OF APPEALS In the case before Us, we are not
COMMITTED GROSS AND MANIFEST persuaded that defendant bank was not
ERROR IN CONCLUDING THAT THE free from blame for the fiasco. In the first
NEGLIGENCE WAS ASCRIBABLE TO place, the teller should not have accepted
HEREIN PETITIONER. plaintiff's deposit without correcting the
account number on the deposit slip
2. THE HONORABLE COURT OF APPEALS which, obviously, was erroneous because,
GRAVELY ABUSED ITS DISCRETION IN as pointed out by defendant, it contained
FINDING THAT THE RESPONDENT BANK only seven (7) digits instead of eight (8).
HAD NOT BEEN REMISS IN THE Second, the complete name of plaintiff
PERFORMANCE OF ITS OBLIGATIONS TO depositor appears in bold letters on the
HEREIN PETITIONER. deposit slip (Exh. B). There could be no
mistaking in her name, and that the
deposit was made in her name, Emma E.
3. THE HONORABLE COURT OF APPEALS Herrero. In fact, defendant's teller should
COMMITTED GROSS AND MANIFEST not have fed her deposit slip to the
ERROR AND GRAVE ABUSE OF computer knowing that her account
DISCRETION IN REVERSING THE AWARD number written thereon was wrong as it
OF MORAL AND EXEMPLARY DAMAGES TO contained only seven (7) digits. As it
THE PETITIONER. happened, according to defendant,
plaintiff's deposit had to be consigned to
4. THE HONORABLE COURT OF APPEALS the suspense accounts pending
COMMITTED GROSS AND MANIFEST verification. This, indeed, could have
ERROR AND GRAVE ABUSE OF been avoided at the first instance had the
DISCRETION IN NOT AWARDING teller of defendant bank performed her
ATTORNEY'S FEES TO PETITIONER. duties efficiently and well. For then she
could have readily detected that the
account number in the name of Emma E.
In a most recent case decided by this Court, City Trust
Herrero was erroneous and would be
Corporation v. The Intermediate Appellate
rejected by the computer. That is, or
Court, 22involving damages against City Trust Banking
should be, part of the training and
Corporation, the depositor, instead of stating her correct
standard operating procedure of the
account number 29000823 inaccurately wrote 2900823.
bank's employees. On the other hand,
Because of this error, six postdated checks amounting to
the depositors are not concerned with
P20,209.00 she issued were dishonored for insufficiency of
banking procedure. That is the
funds. The Regional Trial Court dismissed the complaint for
responsibility of the bank and its
lack of merit. The Court of Appeals, however, found the
employees. Depositors are only
appeal meritorious and ordered the bank to pay nominal
concerned with the facility of depositing
damages of P2,000.00, temperate and moderate damages
their money, earning interest thereon, if
of P5,000.00 and attorney's fees of P4,000.00. Upon
any, and withdrawing therefrom,
review, this Court quoted with favor the disquisition of the
particularly businessmen, like plaintiff,
appellate court:
who are supposed to be always on-the-
go. Plaintiff's account is a current account
We cannot uphold the position of which should immediately be posted.
defendant. For, even if it be true that After all, it does not earn interest. At
there was error on the part of the plaintiff least, the forbearance should be
in omitting a zero in her account number, commensurated with prompt, efficient
yet, it is a fact that her name, Emma E. and satisfactory service.
Herrero, is clearly written on said deposit
slip (Exh. B). This is controlling in
Bank clients are supposed to rely on the
determining in whose account the deposit
services extended by the bank, including
is made or should be posted. This is so
the assurance that their deposits will be
because it is not likely to commit an error
SO ORDERED.
After trial, the court rendered its decision on 5 May 1992,
the dispositive portion of which states:
FIRST DIVISION
WHEREFORE, premises considered,
judgment is hereby rendered in favor of
the plaintiff and against the defendant
G.R. No. 116181 April 17, 1996 Philippine National Bank as follows:
The facts of the case are as follows: d) ordering defendant to pay plaintiff the
sum of P50,000.00 as attorney's fees;
On 11 July 1989, private respondent Carmelo H. Flores and
(Flores) purchased from petitioner at its Manila Pavilion
Hotel unit, two (2) manager's checks worth P500,000.00
THE TRIAL COURT ERRED IN AWARDING Petitioner concedes that it issued the subject receipt for
FLORES P1 MILLION MORAL DAMAGES, P1 P1,000,040.00 to Flores; yet, in the same breath, it
MILLION EXEMPLARY DAMAGES, AND immediately counters that said receipt is not the best
P500,000 (sic) ATTORNEY'S FEES DESPITE evidence to prove how much money Flores actually paid
(1) THAT PNB'S REFUSAL TO ENCASH THE for the purchase of petitioner's manager's checks.
P100,000 MANAGER'S CHECK (EXH. "B")
WAS JUSTIFIED, AS FLORES WAS NEVER Further, petitioner insists that the issue in the instant case
ENTITLED TO THE MONEY; (2) THAT is not the contents of the subject receipt but the exact
THERE IS ABJECT ABSENCE OF EVIDENCE amount of money Flores paid to PNB, an inquiry which,
THAT PNB ACTED FRAUDULENTLY OR petitioner avers, allows the presentation of
MALICIOUSLY, EVEN AS GOOD FAITH IS evidence aliunde.
PRESUMED; AND (3) THAT FLORES'
ALLEGED EMBARRASSMENT FOR HIS
FAILURE TO PURCHASE A HOUSE AND LOT Petitioner's contentions are unmeritorious.
DUE TO PNB'S REFUSAL TO ENCASH THE
WHOLE P1 MILLION 1S UNFOUNDED. 12 A "receipt" is defined as:
On 31 January 1994, the Court of Appeals rendered the A written and signed acknowledgment
questioned decision, the dispositive portion of which that money has been paid or goods have
reads: been delivered. A receipt is merely
presumptive evidence and is not
WHEREFORE, the appealed decision of conclusive.
the lower court in Civil Case No. Q-89-
4033 is hereby AFFIRMED by the Court. A written acknowledgment that money or
a thing of value has been received. Since
Costs against defendant-appellant. a receipt is a mere acknowledgment of
payment, it may be subject to
explanation or contradiction. A receipt
SO ORDERED. 13
may be used as evidence against one just
as any other declaration or admission. A
A motion for reconsideration was filed but it was likewise simple receipt not under seal is
denied in a resolution dated 5 July 1994, 14 thus, the presumptive evidence only and may be
present action with petitioner raising the following issues, rebutted or explained by other evidence
to wit: of mistake in giving it, or of non-payment
or of the circumstances under which it
I was given. 16 (Emphasis ours.)
WHETHER OR NOT THE CA ERRED IN LAW Although a receipt is not conclusive evidence, in the case
IN HOLDING THAT, THE BEST EVIDENCE at bench, an exhaustive review of the records fails to
TO SHOW WHETHER MR. FLORES PAID disclose any other evidence sufficient and strong enough
Article 2217 of the Civil Q. Can you tell us the number of the street?
Code recognizes that
moral damages which
include physical A. It is within the Monterosa.
suffering, mental
anguish, fright, serious Q. Can you identify the name of the person
anxiety, besmirched with whom you transacted?
SO ORDERED.
Hence, this petition anchored on the following grounds: Art. 2176. Whoever by act or omission
causes damage to another, there being
fault or negligence, is obliged to pay for
1) The proximate cause of the loss is the the damage done. Such fault or
negligence of respondent Rommel negligence, if there is no pre-existing
Marketing Corporation and Romeo Lipana contractual relation between the parties,
in entrusting cash to a dishonest is called a quasi-delict and is governed by
employee. the provisions of this Chapter.
2) The failure of respondent Rommel There are three elements of a quasi-delict: (a) damages
Marketing Corporation to cross-check the suffered by the plaintiff; (b) fault or negligence of the
bank's statements of account with its own defendant, or some other person for whose acts he must
records during the entire period of more respond; and (c) the connection of cause and effect
than one (1) year is the proximate cause between the fault or negligence of the defendant and the
of the commission of subsequent frauds damages incurred by the plaintiff. 7
and misappropriation committed by Ms.
Irene Yabut.
In the case at bench, there is no dispute as to the damage
suffered by the private respondent (plaintiff in the trial
3) The duplicate copies of the deposit court) RMC in the amount of P304,979.74. It is in ascribing
slips presented by respondent Rommel fault or negligence which caused the damage where the
Marketing Corporation are falsified and parties point to each other as the culprit.
are not proof that the amounts appearing
thereon were deposited to respondent
Rommel Marketing Corporation's account Negligence is the omission to do something which a
with the bank, reasonable man, guided by those considerations which
ordinarily regulate the conduct of human affairs, would do,
or the doing of something which a prudent and reasonable
4) The duplicate copies of the deposit man would do. The seventy-eight (78)-year-old, yet still
slips were used by Ms. Irene Yabut to relevant, case of Picart v. Smith, 8 provides the test by
cover up her fraudulent acts against which to determine the existence of negligence in a
respondent Rommel Marketing particular case which may be stated as follows: Did the
Corporation, and not as records of defendant in doing the alleged negligent act use that
deposits she made with the bank. 4 reasonable care and caution which an ordinarily prudent
person would have used in the same situation? If not, then
The petition has no merit. he is guilty of negligence. The law here in effect adopts
the standard supposed to be supplied by the imaginary
conduct of the discreet paterfamilias of the Roman law.
Simply put, the main issue posited before us is: What is The existence of negligence in a given case is not
the proximate cause of the loss, to the tune of determined by reference to the personal judgment of the
P304,979.74, suffered by the private respondent RMC actor in the situation before him. The law considers what
petitioner bank's negligence or that of private would be reckless, blameworthy, or negligent in the man
respondent's? of ordinary intelligence and prudence and determines
liability by that.
Petitioners submit that the proximate cause of the loss is
the negligence of respondent RMC and Romeo Lipana in
Q: And who prepares the deposit slip? Q: Did he ever tell you that one of your
cashiers affixed the stamp mark of the
A: The depositor or the authorized bank on the deposit slips and they
representative sir? validated the same with the machine, the
fact that those deposit slips were unfilled
up, is there any report similar to that?
Q: Where does the depositor's stub comes
(sic) from Mrs. Mabayad, is it with the
deposit slip? A: No, it was not the cashier but the teller.
A: The depositor's stub is connected with Q: The teller validated the blank deposit
the deposit slip or the bank's copy. In a slip?
deposit slip, the upper portion is the
depositor's stub and the lower portion is A: No it was not reported.
the bank's copy, and you can detach the
bank's copy from the depositor's stub by
tearing it sir. Q: You did not know that any one in the
bank tellers or cashiers validated the blank
deposit slip?
Q: Now what do you do upon presentment
of the deposit slip by the depositor or the
depositor's authorized representative? A: I am not aware of that.
Petitioners nevertheless aver that the failure of . . . When the plaintiff's own negligence
respondent RMC to cross-check the bank's statements of was the immediate and proximate cause
account with its own records during the entire period of of his injury, he cannot recover damages.
more than one (1) year is the proximate cause of the But if his negligence was only
commission of subsequent frauds and misappropriation contributory, the immediate and
committed by Ms. Irene Yabut. proximate cause of the injury being the
defendant's lack of due care, the plaintiff
We do not agree. may recover damages, but the courts
shall mitigate the damages to be
awarded.
While it is true that had private respondent checked the
monthly statements of account sent by the petitioner bank
to RMC, the latter would have discovered the loss early on, In view of this, we believe that the demands of
such cannot be used by the petitioners to escape liability. substantial justice are satisfied by allocating the
This omission on the part of the private respondent does damage on a 60-40 ratio. Thus, 40% of the
not change the fact that were it not for the wanton and damage awarded by the respondent appellate
reckless negligence of the petitioners' employee in court, except the award of P25,000.00 attorney's
validating the incomplete duplicate deposit slips fees, shall be borne by private respondent RMC;
presented by Ms. Irene Yabut, the loss would not have only the balance of 60% needs to be paid by the
occurred. Considering, however, that the fraud was petitioners. The award of attorney's fees shall be
committed in a span of more than one (1) year covering borne exclusively by the petitioners.
various deposits, common human experience dictates that
the same would not have been possible without any form WHEREFORE, the decision of the respondent Court of
of collusion between Ms. Yabut and bank teller Mabayad. Appeals is modified by reducing the amount of actual
Ms. Mabayad was negligent in the performance of her damages private respondent is entitled to by 40%.
duties as bank teller nonetheless. Thus, the petitioners are Petitioners may recover from Ms. Azucena Mabayad the
entitled to claim reimbursement from her for whatever amount they would pay the private respondent. Private
they shall be ordered to pay in this case. respondent shall have recourse against Ms. Irene Yabut. In
all other respects, the appellate court's decision is
The foregoing notwithstanding, it cannot be denied that, AFFIRMED.
indeed, private respondent was likewise negligent in not
checking its monthly statements of account. Had it done Proportionate costs.
so, the company would have been alerted to the series of
frauds being committed against RMC by its secretary. The SO ORDERED.
damage would definitely not have ballooned to such an
amount if only RMC, particularly Romeo Lipana, had
exercised even a little vigilance in their financial affairs.
This omission by RMC amounts to contributory negligence