G.R. No.

112576 October 26, 1994

(CA-GR CV No. 26571)

METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. THE HON. COURT

OF APPEALS, RURAL BANK OF PADRE GARCIA, INC. and ISABEL R.
KATIGBAK, Respondents.

This petition for certiorari seeks to annul the decision of respondent Court of Appeals
dated October 29, 1992 in CA - GR CV No. 26571 affirming the decision of the Regional
Trial Court of Lipa, Batangas - Branch XIII for damages, and the Resolution dated
November 11, 1993 denying petitioner's motion for reconsideration of the aforesaid
decision.chanroblesvirtualawlibrarychanrobles virtual law library

The case emanated from a dispute between the Rural Bank of Padre Garcia, Inc.
(RBPG) and Metropolitan Bank and Trust Company (MBTC) relative to a credit
memorandum dated April 5, 1982 from the Central Bank in the amount of P304,000.00
in favor of RBPG.chanroblesvirtualawlibrarychanrobles virtual law library

The records show that Isabel Katigbak is the president and director of RBPG, owning
65% of the shares thereof. Metropolitan Bank and Trust Company (MBTC) is the rural
bank's depository bank, where Katigbak maintains current accounts with MBTC's main
office in Makati as well as its Lipa City branch.chanroblesvirtualawlibrarychanrobles
virtual law library

On April 6, 1982, MBTC received from the Central Bank a credit memo dated April 5,
1982 that its demand deposit account was credited with P304,000.00 for the account of
RBPG, representing loans granted by the Central Bank to RBPG. On the basis of said
credit memo, Isabel Katigbak issued several checks against its account with MBTC in
the total amount of P300,000.00, two (2) of which (Metrobank Check Nos. 0069 and
0070) were payable to Dr. Felipe C. Roque and Mrs. Eliza Roque for P25,000.00 each.
Said checks issued to Dr. and Mrs. Roque were deposited by the Roques with the
Philippine Banking Corporation, Novaliches Branch in Quezon City. When these checks
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"
(Drawn Against Insufficient Funds - Try Next Clearing) so they were redeposited on
April 14, 1982. These
were however again dishonored and returned unpaid for the following reason: "DAIF -
TNC - NO ADVICE FROM CB."chanrobles virtual law library

After the second dishonor of the two (2) checks, Dr. Felipe Roque, a member of the
Board of Directors of Philippine Banking Corporation, allegedly went to the Office of
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.chanroblesvirtualawlibrarychanrobles virtual law library
On April 13, 1982, Isabel Katigbak who was in Hongkong on a
business-vacation trip together with her sons Alfredo and Antonio, both of whom were
also officers of RBPG, received overseas phone calls from Mrs. Maris Katigbak-San
Juan at her residence in San Lorenzo Village, Makati, informing Isabel Katigbak that a
certain Mr. Rizal Dungo, Assistant Cashier of MBTC insisted on talking to her (Mrs. San
Juan), berating her about the checks which bounced, saying "Nag-issue kayo ng
tseke, wala namang pondo," even if it was explained to Mr. Dungo that Mrs. San Juan
was not in any way connected with RBPG.chanroblesvirtualawlibrarychanrobles virtual
law library

Mrs. Katigbak testified that she informed Mrs. San Juan to request defendant MBTC to
check and verify the records regarding the aforementioned Central Bank credit memo
for P304,000.00 in favor of RBPG as she was certain that the checks were sufficiently
covered by the CB credit memo as early as April 6, 1994, but the following day, Mrs.
San Juan received another insulting call from Mr. Dungo ("Bakit kayo nag-issue ng
tseke na wala namang pondo, Three Hundred Thousand na.")1When Mrs. San Juan
explained to him the need to verify the records regarding the Central Bank memo, he
merely brushed it aside, telling her sarcastically that he was very sure that no such
credit memo existed. Mrs. San Juan was constrained to place another long distance call
to Mrs. Katigbak in Hongkong that evening. Tense and angered, the Katigbaks had to
cut short their Hongkong stay with their respective families and flew back to Manila,
catching the first available flight on April 15, 1982.chanroblesvirtualawlibrarychanrobles
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Immediately upon arrival, Mrs. Katigbak called up MBTC, through a

Mr. Cochico, for a re-examination of the records of MBTC regarding the Central Bank
credit memo dated April 5, 1982 for P304,000.00. Mr. Dungo, to whom Cochico handed
over the phone, allegedly arrogantly said: "Bakit kayo magagalit, wala naman kayong
pondo?" These remarks allegedly so shocked Mrs. Katigbak that her blood pressure
rose to a dangerous level and she had to undergo medical treatment at the Makati
Medical Center for two (2) days.chanroblesvirtualawlibrarychanrobles virtual law library

Metrobank not only dishonored the checks issued by RBPG, the latter was issued four
(4) debit memos representing service and penalty charges for the returned
checks.chanroblesvirtualawlibrarychanrobles virtual law library

RBPG and Isabel Katigbak filed Civil Case No. V-329 in the RTC of Lipa, Batangas -
Branch XIII against the Metropolitan Bank and Trust Company for damages on April 26,
1983.chanroblesvirtualawlibrarychanrobles virtual law library

The ultimate facts as alleged by the defendant MBTC in its answer are as follows: that
on April 6, 1982, its messenger, Elizer Gonzales, received from the Central Bank
several credit advices on rural bank accounts, which included that of plaintiff RBPG in
the amount of P304,000.00; that due to the inadvertence of said messenger, the credit
advice issued in favor of plaintiff RBPG was not delivered to the department in charge of
processing the same; consequently, when MBTC received from the clearing department
the checks in question, the stated balance in RBPG's account was only P5,498.58
which excluded the unprocessed credit advice of P304,000.00 resulting in the dishonor
of the aforementioned checks; that as regards the P304,000.00 which was
a re-discounting loan from the Central Bank, the same was credited only on April 15,
1982 after the Central Bank finally confirmed that a credit advice was indeed issued in
favor of RBPG; that after the confirmation, MBTC credited the amount of the credit
advice to plaintiff RBPG's account and thru its officers, allegedly conveyed personally
on two occasions its apologies to plaintiffs to show that the bank and its officers acted
with no deliberate intent on their part to cause injury or damage to plaintiffs, explaining
the circumstances that gave rise to the bouncing checks situation. Metrobank's
negligence arising from their messenger's misrouting of the credit advice resulting in the
return of the checks in question, despite daily reporting of credit memos and a
corresponding daily radio message confirmation, (as shown by Exhibit "I," the
Investigation Report of the bank's Mr. Valentino Elevado) and Mr. Dungo's improper
handling of clients led to the messenger's dismissal from service and Mr. Dungo's
transfer from Metro Manila to Mindoro.chanroblesvirtualawlibrarychanrobles virtual law
library

The threshold issue was whether or not, under the facts and circumstances of the case,
plaintiff may be allowed to recover actual, moral and exemplary damages, including
attorney's fees, litigation expenses and the costs of the suit. On August 25, 1989, the
RTC of Lipa City rendered a decision 2in favor of plaintiffs and against the defendant
MBTC, ordering the latter to:

1. pay plaintiff Isabel Katigbak P50,000.00 as temperate damages;chanrobles virtual

law library

2. pay P500,000.00 as moral damages, considering that RBPG's credit standing and
business reputation were damaged by the wrongful acts of defendant's employees,
coupled with the rude treatment received by Isabel Katigbak at the hands of Mr. Dungo,
all of which impelled her to seek medical treatment;chanrobles virtual law library

3. pay P100,000.00 as attorney's fees and litigation expenses;

and.chanroblesvirtualawlibrarychanrobles virtual law library

4. pay the costs of suit.

The lower court did not award actual damages in the amount of P50,000.00
representing the amount of the two (2) checks payable to Dr. Felipe C. Roque and Mrs.
Elisa Roque for P25,000 each, as it found no showing that Mr. Antonio Katigbak who
allegedly paid the amount was actually reimbursed by plaintiff RBPG. Moreover, the
court held that no actual damages could have been suffered by plaintiff RBPG because
on April 15, 1982, the Central Bank credit advice in the amount of P304,000 which
included the two (2) checks issued to the Roque spouses in the sum of P50,000.00
were already credited to the account of RBPG and the service, as well as penalty
charges, were all reversed.chanroblesvirtualawlibrarychanrobles virtual law library
MBTC appealed from the decision to the Court of Appeals in CA - GR CV No. 26571,
alleging that the trial court erred in awarding temperate and moral damages, as well as
attorney's fees, plus costs and expenses of litigation without factual or legal basis
therefor.chanroblesvirtualawlibrarychanrobles virtual law library

On October 29, 1992, the Court of Appeals rendered a decision 3affirming that of the
trial court, except for the deletion of the award of temperate damages, the reduction of
moral damages from P500, 000.00 to P50,000.00 in favor of RBPG and P100,000.00
for Isabel Katigbak and P50,000.00, as attorney's fees. Plaintiffs-appellees filed a
motion for reconsideration of the decision, questioning the deletion of the award of
temperate damages and the reduction of the award of moral damages and attorney's
fees. The motion was denied.chanroblesvirtualawlibrarychanrobles virtual law library

MBTC filed this petition, presenting the following issues for resolution:

1. Whether or not private respondents RBPG and Isabel Rodriguez are legally entitled
to moral damages and attorney's fees, andchanrobles virtual law library

2. Assuming that they are so entitled, whether or not the amounts awarded are
excessive and unconscionable.

The petition is devoid of merit.chanroblesvirtualawlibrarychanrobles virtual law library

The case at bench was instituted to seek damages caused by the dishonor through
negligence of respondent bank's checks which were actually sufficiently funded, and the
insults from petitioner bank's officer directed against private respondent Isabel R.
Katigbak. The presence of malice and the evidence of besmirched reputation or loss of
credit and business standing, as well as a reappraisal of its probative value, involves
factual matters which, having been already thoroughly discussed and analyzed in the
courts below, are no longer reviewable here. While this rule admits of exceptions, this
case does not fall under any of these.chanroblesvirtualawlibrarychanrobles virtual law
library

There is no merit in petitioner's argument that it should not be considered negligent,

much less be held liable for damages on account of the inadvertence of its bank
employee as Article 1173 of the Civil Code only requires it to exercise the diligence of a
good pater familias.chanroblesvirtualawlibrarychanrobles virtual law library

As borne out by the records, the dishonoring of the respondent's checks committed
through negligence by the petitioner bank on April 6, 1982 was rectified only on April 15,
1992 or nine (9) days after receipt of the credit memo. Clearly, petitioner bank was
remiss in its duty and obligation to treat private respondent's account with the highest
degree of care, considering the fiduciary nature of their relationship. The bank is under
obligation to treat the accounts of its depositors with meticulous care, whether such
account consists only of a few hundred pesos or of millions. It must bear the blame for
failing to discover the mistake of its employee despite the established procedure
requiring bank papers to pass through bank personnel whose duty it is to check and
countercheck them for possible errors. 4Responsibility arising from negligence in the
performance of every kind of obligation is demandable. 5While the bank's negligence
may not have been attended with malice and bad faith, nevertheless, it caused serious
anxiety, embarrassment and humiliation to private respondents for which they are
entitled to recover reasonable moral damages. 6chanrobles virtual law library

As the records bear out, insult was added to injury by petitioner bank's issuance of debit
memoranda representing service and penalty charges for the returned checks, not to
mention the insulting remarks from its Assistant
Cashier.chanroblesvirtualawlibrarychanrobles virtual law library

In the case of Leopoldo Araneta v. Bank of America, 7we held that:

The financial credit of a businessman is a prized and valuable asset, it being a

significant part of the foundation of his business. Any adverse reflection thereon
constitutes some financial loss to him. As stated in the case of Atlanta National Bank vs.
Davis, 96 Ga 334, 23 SE 190, citing 2 Morse Banks, Sec. 458, "it can hardly be possible
that a customer's check can be wrongfully refused payment without some impeachment
of his credit, which must in fact be an actual injury, though he cannot, from the nature of
the case, furnish independent, distinct proof thereof".

It was established that when Mrs. Katigbak learned that her checks were not being
honored and Mr. Dungo repeatedly made the insulting phone calls, her wounded
feelings and the mental anguish suffered by her caused her blood pressure to rise
beyond normal limits, necessitating medical attendance for two (2) days at a
hospital.chanroblesvirtualawlibrarychanrobles virtual law library

The damage to private respondents' reputation and social standing entitles them to
moral damages. Moral damages include physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation and similar injury.8Temperate or moderate damages which are more than
nominal but less than compensatory damages, may be recovered when the court finds
that some pecuniary loss has been suffered but its amount cannot, from the nature of
the case, be proved with certainty. 9Temperate damages may be allowed in cases
where from the nature of the case, definite proof of pecuniary loss cannot be adduced,
although the court is convinced that there has been such loss. The appellate court,
however, justified its deletion when MBTC reasoned out that the amount of P50,000.00
is not part of the relief prayed for in the complaint, aside from the fact that the amount
allegedly suffered by Mrs. Katigbak is susceptible of proof. 10chanrobles virtual law
library

Moral and temperate damages which are not susceptible of pecuniary estimation are
not awarded to penalize the petitioner but to compensate the respondents for injuries
suffered as a result of the former's fault and negligence, taking into account the latter's
credit and social standing in the banking community, particularly since this is the very
first time such humiliation has befallen private respondents. The amount of such losses
need not be established with exactitude, precisely due to their nature. 11chanrobles
virtual law library

The carelessness of petitioner bank, aggravated by the lack of promptness in repairing

the error and the arrogant attitude of the bank officer handling the matter, justifies the
grant of moral damages, which are clearly not excessive and
unconscionable.chanroblesvirtualawlibrarychanrobles virtual law library

Moreover, considering the nature and extent of the services rendered by private
respondent's counsel, both in the trial and appellate courts, the Court deems it just and
equitable that attorney's fees in the amount of P50,000.00 be
awarded.chanroblesvirtualawlibrarychanrobles virtual law library

WHEREFORE, the decision of respondent Court of Appeals is AFFIRMED in all

respects. rary
 G.R No. 162074

Cecilleville Realty and Service Corporation, Petitioner, v. SPOUSES TITO ACUA

and OFELIA B. ACUA, Respondents.

This is a petition for review assailing the Amended Decision promulgated on 30 January
2004 of the Court of Appeals (appellate court) in CA-G.R. CV No. 56623. The appellate
court affirmed the Resolution] dated 14 February 1997 of Branch 225, Regional Trial
Court of Quezon City (trial court) in Civil Case No. Q-96-27837 which dismissed the
complaint of petitioner Cecilleville Realty and Service Corporation (Cecilleville) against
respondent spouses Tito and Ofelia Acua (Acua spouses) on the ground of prescription.

Sometime in September 1981, the defendants [Acua spouses] requested the

plaintiff [Cecilleville] thru its President, Jose A. Resurreccion, to lend to them for
one (1) year, two (2) parcels of land owned by the plaintiff as collaterals to secure
a credit line from the Prudential Bank and Trust Company [Prudential]. On
September 21, 1981, thru a secretarys certificate and by virtue of a board
resolution, the plaintiff lent to defendants the said owners copies of certificate of
title. However, on September 28, 1991, defendant Ofelia B. Acua forged the
signature of Lucia R. Reyes as corporate secretary. By virtue of the fake
secretarys certificate, the defendants were able to obtain a personal loan from
Prudential in the sum of P610,000.00 with said certificates as collaterals and
upon signing a Real Estate Mortgage dated September 30, 1981 and two
Promissory Notes dated October 7, 1981 and October 15, 1981. Due to the
defendants default in the payment of their indebtedness, Prudential threatened to
extrajudicially foreclose the real estate mortgage on plaintiffs properties thru a
notice of auction sale. To avoid foreclosure proceedings on its properties, the
plaintiff was forced to settle defendants obligations to Prudential in the amount
of P3,367,474.42. Subsequently, several written demands for reimbursement
were sent by the plaintiff to the defendants. Nevertheless, the defendants failed
to pay their obligation. Hence, the filing of the instant case.

In their motion, defendants contend that the instant complaint should be

dismissed on the grounds of prescription, laches and res judicata. The
defendants insist that the action of the plaintiff is based on fraud or forgery of a
secretarys certificate. The forgery allegedly happened on September 28, 1981 or
fifteen (15) years ago. Therefore, the plaintiff should have brought the instant
action within the period provided for in Article 1146 of the Civil Code. Moreover,
the defendants argue that the plaintiffs inordinate delay in the filing of the instant
suit clearly shows that it has abandoned its claim against the defendants and
therefore guilty of laches. Consequently, the defendants aver that the forgery
issue has been passed upon in CA-G.R. CV No. 35452. The same was litigated
in Civil Case No. Q-59789, Branch 78, Regional Trial Court, Quezon City where
the plaintiff tried unsuccessfully to have the contract of real estate mortgage
involving the same properties, between defendant Ofelia Acua and the Prudential
Bank and Trust Company, annulled on the same ground raised here. Hence, the
principle of res judicata applies.[4] WHEREFORE, the appeal of appellant
Cecilleville Realty and Service Corporation should be, as it is
hereby, DISMISSED. Finding merit to the appeal of Prudential Bank & Trust
Company, the writ of preliminary injunction heretofore issued by the trial court is
hereby LIFTED, and appellant Bank can now proceed with the foreclosure
proceedings of the mortgaged properties.

As a corollary thereto, appellant Cecilleville is hereby ordered to pay appellant

Prudential Bank the interests, penalty and service charges stipulated in the
promissory notes secured by the mortgage, accruing from the time the writ of
preliminary injunction was issued until the said promissory notes are fully
paid. No costs.
After Cecilleville paid Prudential, Cecilleville filed the present action to claim
reimbursement from the Acua spouses.
 [G.R. No. 116792. March 29, 1996]

BANK OF THE PHILIPPINE ISLANDS and GRACE ROMERO, petitioners,

vs. COURT OF APPEALS and EDVIN F. REYES, respondents.
Petitioners seek a review of the Decision1 of respondent Court of Appeals in CA-
G.R. CV No. 41543 reversing the Decision2 of the Regional Trial Court of Quezon City,
Branch 79, and ordering petitioners to credit private respondents Savings
Account No. 3185-0172-56 with P10,556.00 plus interest.
The facts reveal that on September 25, 1985, private respondent Edvin F. Reyes
opened Savings Account No. 3 185-0172-56 at petitioner Bank of the Philippine Islands
(BPI) Cubao, Shopping Center Branch. It is a joint AND/OR account with his wife,
Sonia S. Reyes.
Private respondent also held a joint AND/OR Savings Account No. 3185-0128-82
with his grandmother, Emeteria M. Fernandez, opened3 on February 11, 1986 at the
same BPI branch. He regularly deposited in this account the U.S. Treasury Warrants
payable to the order of Emeteria M. Fernandez as her monthly pension.
Emeteria M. Fernandez died on December 28, 1989 without the knowledge of the
U.S. Treasury Department. She was still sent U.S. Treasury Warrant No. 21667302
dated January 1, 1990 in the amount of U.S. $377.003 or P10,556.00. On January
4, 1990, private respondent deposited the said U.S. treasury check of Fernandez in
Savings Account No. 3 185-0128-82.The U.S. Veterans Administration Office
in Manila conditionally cleared the check.4 The check was then sent to the United
States for further clearing.5
Two months after or on March 8, 1990, private respondent closed Savings Account
No. 3 185-0128-82 and transferred its funds amounting to P13,112.91 to Savings
Account No. 3 185-0172-56, the joint account with his wife.
On January 16, 1991, U.S. Treasury Warrant No. 21667302 was dishonored as it
was discovered that Fernandez died three (3) days prior to its issuance. The U.S.
Department of Treasury requested petitioner bank for a refund.6 For the first time
petitioner bank came to know of the death of Fernandez.
On February 19, 1991, private respondent received a PT & T urgent telegram from
petitioner bank requesting him to contact Manager Grace S. Romero or Assistant
Manager Carmen Bernardo. When he called up the bank, he was informed that the
treasury check was the subject of a claim by Citibank NA, correspondent of petitioner
bank. He assured petitioners that he would drop by the bank to look into the matter. He
also verbally authorized them to debit from his other joint account the amount stated
in the dishonored U.S. Treasury Warrant.7 On the same day, petitioner bank debited the
amount of P10,556.00 from private respondents Savings Account No. 3185-0172-56.
On February 21, 1991, private respondent with his lawyer Humphrey Tumaneng
visited the petitioner bank and the refund documents were shown to them. Surprisingly,
private respondent demanded from petitioner bank restitution of the debited amount. He
claimed that because of the debit, he failed to withdraw his money when he needed
them. He then filed a suit for Damages8 against petitioners before the Regional Trial
Court of Quezon City, Branch 79.
Petitioners contested the complaint and counter-claimed for moral and exemplary
damages. By way of Special and Affirmative Defense, they averred that private
respondent gave them his express verbal authorization to debit the questioned
amount. They claimed that private respondent later refused to execute a written
authority.9
In a Decision dated January 20, 1993, the trial court dismissed the complaint of
private respondent for lack of cause of action.10
Private respondent appealed to the respondent Court of Appeals. On August 16,
1994, the Sixteenth Division of respondent court in AC-G.R. CV No. 41543 reversed the
impugned decision, viz:

WHEREFORE, the judgment appealed from is set aside, and another one entered
ordering defendant (petitioner) to credit plaintiffs (private respondents) S.A. No. 3 185-
0172-56 with P10,556.00 plus interest at the applicable rates for express teller savings
accounts from February 19,1991, until compliance herewith. The claim and
counterclaim for damages are dismissed for lack of merit.