Solidbank Corporation v. Spouses Tan

FIRST DIVISION

[G.R. No. 167346. April 2, 2007.]

SOLIDBANK CORPORATION/METROPOLITAN BANK AND

TRUST COMPANY , * petitioner, vs. SPOUSES PETER and
SUSAN TAN, respondents.
DECISION
CORONA, J : p
Assailed in this petition for review by certiorari under Rule 45 of the Rules
of Court are the decision 1 and resolution 2 of the Court of Appeals (CA) dated
November 26, 2004 and March 1, 2005, respectively, in CA-G.R. CV No. 58618,
3 affirming the decision of the Regional Trial Court (RTC) of Manila, Branch 31. 4
On December 2, 1991, respondents' representative, Remigia Frias,

deposited with petitioner ten checks worth P455,962. Grace Neri, petitioner's
teller no. 8 in its Juan Luna, Manila Branch, received two deposit slips for the
checks, an original and a duplicate. Neri verified the checks and their amounts
in the deposit slips then returned the duplicate copy to Frias and kept the
original copy for petitioner.
In accordance with the usual practice between petitioner and
respondents, the latter's passbook was left with petitioner for the recording of
the deposits on the bank's ledger. Later, respondents retrieved the passbook
and discovered that one of the checks, Metropolitan Bank and Trust Company
(Metrobank) check no. 403954, payable to cash in the sum of P250,000 was not
posted therein. cDCaHA
Immediately, respondents notified petitioner of the problem. Petitioner

showed respondent Peter Tan a duplicate copy of a deposit slip indicating the
list of checks deposited by Frias. But it did not include the missing check. The
deposit slip bore the stamp mark "teller no. 7" instead of "teller no. 8" who
previously received the checks.
Still later, respondent Peter Tan learned from Metrobank (where he

maintained an account) that Metrobank check no. 403954 had cleared after it
was inexplicably deposited by a certain Dolores Lagsac in Premier Bank in San
Pedro, Laguna. Respondents demanded that petitioner pay the amount of the
check but it refused, hence, they filed a case for collection of a sum of money
in the RTC of Manila, Branch 31.
In its answer, petitioner averred that the deposit slips Frias used when she
deposited the checks were spurious. Petitioner accused respondents of
engaging in a scheme to illegally exact money from it. It added that, contrary to
the claim of respondents, it was "teller no. 7" who received the deposit slips
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and, although respondents insisted that Frias deposited ten checks, only nine
checks were actually received by said teller. By way of counterclaim, it sought
payment of P1,000,000 as actual and moral damages and P500,000 as
exemplary damages. aCcADT
After trial, the RTC found petitioner liable to respondents:

Upon examination of the oral, as well as of the documentary
evidence which the parties presented at the trial in support of their
respective contentions, and after taking into consideration all the
circumstances of the case, this Court believes that the loss of
Metrobank Check No. 403954 in the sum of P250,000.00 was due to
the fault of [petitioner] . . . [It] retained the original copy of the [deposit
slip marked by "Teller No. 7"]. There is a presumption in law that
evidence willfully suppressed would be adverse if produced.
Art. 1173 of the Civil Code states that "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 person of the time and of the place"; and that "if the law or
contract does not state the diligence which is to be observed in the
performance, the same as expected of a good father of a family shall
be required."
. . . For failure to comply with its obligation, [petitioner] is

presumed to have been at fault or to have acted negligently unless
they prove that they observe extraordinary diligence as prescribed in
Arts. 1733 and 1735 of the Civil Code (Art. 1756). . . HAcaCS
xxx xxx xxx
WHEREFORE, premises considered, judgment is hereby rendered

in favor of [respondents], ordering [petitioner] to pay the sum of
P250,000, with legal interest from the time the complaint [for collection
of a sum of money] was filed until satisfied; P25,000.00 moral
damages; P25,000.00 exemplary damages plus 20% of the amount due
[respondents] as and for attorney's fees. With costs.
SO ORDERED. 5
Petitioner appealed to the CA which affirmed in toto the RTC's assailed

decision:
Serious doubt [was] engendered by the fact that [petitioner] did
not present the original of the deposit slip marked with "Teller No. 7"
and on which the entry as to Metrobank Check No. 403954 did not
appear. Even the most cursory look at the handwriting thereon
reveal[ed] a very marked difference with that in the other deposit slips
filled up [by Frias] on December 2, 1991. Said circumstances
spawn[ed] the belief thus, the said deposit slip was prepared by
[petitioner] itself to cover up for the lost check. 6 DTCAES
Petitioner filed a motion for reconsideration but the CA dismissed it.

Hence, this appeal.
Before us, petitioner faults the CA for upholding the RTC decision.
Petitioner argues that: (1) the findings of the RTC and the CA were not
supported by the evidence and records of the case; (2) the award of damages
in favor of respondents was unwarranted and (3) the application by the RTC, as
affirmed by the CA, of the provisions of the Civil Code on common carriers to
the instant case was erroneous. 7
The petition must fail.
On the first issue, petitioner contends that the lower courts erred in
finding it negligent for the loss of the subject check. According to petitioner, the
fact that the check was deposited in Premier Bank affirmed its claim that it did
not receive the check.
At the outset, the Court stresses that it accords respect to the factual
findings of the trial court and, unless it overlooked substantial matters that
would alter the outcome of the case, this Court will not disturb such findings. 8
We meticulously reviewed the records of the case and found no reason to
deviate from the rule. Moreover, since the CA affirmed these findings on
appeal, they are final and conclusive on us. 9 We therefore sustain the RTC's
and CA's findings that petitioner was indeed negligent and responsible for
respondents' lost check.
On the issue of damages, petitioner argues that the moral and exemplary
damages awarded by the lower courts had no legal basis. For the award of
moral damages to stand, petitioner avers that respondents should have proven
the existence of bad faith by clear and convincing evidence. According to
petitioner, simple negligence cannot be a basis for its award. It insists that the
award of exemplary damages is justified only when the act complained of was
done in a wanton, fraudulent and oppressive manner. 10 ECTSDa
We disagree.
While petitioner may argue that simple negligence does not warrant the
award of moral damages, it nonetheless cannot insist that that was all it was
guilty of. It refused to produce the original copy of the deposit slip which could
have proven its claim that it did not receive respondents' missing check. Thus,
in suppressing the best evidence that could have bolstered its claim and
confirmed its innocence, the presumption now arises that it withheld the same
for fraudulent purposes. 11
Moreover, in presenting a false deposit slip in its attempt to feign

innocence, petitioner's bad faith was apparent and unmistakable. Bad faith
imports a dishonest purpose or some moral obliquity or conscious doing of a
wrong that partakes of the nature of fraud. 12
As to the award of exemplary damages, the law allows it by way of
example for the public good. The business of banking is impressed with public
interest and great reliance is made on the bank's sworn profession of diligence
and meticulousness in giving irreproachable service. 13 For petitioner's failure to
carry out its responsibility and to account for respondents' lost check, we hold
that the lower courts did not err in awarding exemplary damages to the latter.
DEHaAS

On the last issue, we hold that the trial court did not commit any error. A
cursory reading of its decision reveals that it anchored its conclusion that
petitioner was negligent on Article 1173 of the Civil Code. 14
In citing the different provisions of the Civil Code on common carriers,15

the trial court merely made reference to the kind of diligence that petitioner
should have performed under the circumstances. In other words, like a common
carrier whose business is also imbued with public interest, petitioner should
have exercised extraordinary diligence to negate its liability to respondents.
Assuming arguendo that the trial court indeed used the provisions on
common carriers to pin down liability on petitioner, still we see no reason to
strike down the RTC and CA rulings on this ground alone. cSTHaE
In one case, 16 the Court did not hesitate to apply the doctrine of last clear
chance (commonly used in transportation laws involving common carriers) to a
banking transaction where it adjudged the bank responsible for the encashment
of a forged check. There, we enunciated that the degree of diligence required
of banks is more than that of a good father of a family in keeping with their
responsibility to exercise the necessary care and prudence in handling their
clients' money.
We find no compelling reason to disallow the application of the provisions

on common carriers to this case if only to emphasize the fact that banking
institutions (like petitioner) have the duty to exercise the highest degree of
diligence when transacting with the public. By the nature of their business, they
are required to observe the highest standards of integrity and performance, and
utmost assiduousness as well. 17
WHEREFORE, the assailed decision and resolution of the Court of Appeals
dated November 26, 2004 and March 1, 2005, respectively, in CA-G.R. CV No.
58618 are hereby AFFIRMED. Accordingly, the petition is DENIED. CcAESI
Costs against petitioner.
SO ORDERED.
Puno, C.J., Sandoval-Gutierrez, Azcuna and Garcia, JJ., concur.
Footnotes
* On June 8, 2005, the Court granted the motion of private respondents to
implead Metropolitan Bank and Trust Company as petitioner following the
latter's acquisition of Solidbank. Under Rule 3, Section 19 of the Rules of
Court, the person or entity which acquired the interest of a party to a case
may be substituted in the action or joined with the original party.
1. Penned by Associate Justice Arcangelita M. Romilla-Lontok and concurred in
by Associate Justices Rodrigo V. Cosico and Danilo B. Pine (retired) of the
Twelfth Division of the Court of Appeals; rollo, pp. 9-20.
2. Id., pp. 22-23.

3. Entitled Peter and Susan Tan v. Solidbank Corporation.
4. Decided by Judge Zenaida R. Daguna, rollo, pp. 74-80.
5. Rollo , pp. 79-80.
6. Rollo , p. 17.
7. Rollo , pp. 150-159.
8. Lipat v. Pacific Banking Corporation , 450 Phil. 410 (2003).
9. Bordalba v. Court of Appeals , 425 Phil. 407 (2002).
10. Petitioner's Memorandum, rollo, p. 157.
11. Philippine Banking Corporation v. Court of Appeals, G.R. No. 127469, 15
January 2004, 419 SCRA 487.
12. Petitioner's Memorandum, rollo, p. 157.

13. See Prudential Bank v. Court of Appeals, 384 Phil. 817 (2000); Bank of the
Philippine Islands v. Casa Montessori International, G.R. No. 149454, 28 May
2004, 430 SCRA 261.
14. Supra, at 5.
15. Id., Articles 1733, 1735 and 1756 of the Civil Code.
16. Canlas v. Asian Savings Bank et al., 383 Phil. 315 (2000); see also Bank of
the Philippine Islands v. Court of Appeals, G.R. No. 102383, 26 November
1992, 216 SCRA 51.
17. Simex International (Manila) v. Court of Appeals, G.R. No. 88013, 19 March
1990, 183 SCRA 360.

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FIRST DIVISION

[G.R. No. 167346. April 2, 2007.]

SOLIDBANK CORPORATION/METROPOLITAN BANK AND

On December 2, 1991, respondents' representative, Remigia Frias,

Immediately, respondents notiﬁed petitioner of the problem. Petitioner

Still later, respondent Peter Tan learned from Metrobank (where he

After trial, the RTC found petitioner liable to respondents:

. . . For failure to comply with its obligation, [petitioner] is

xxx xxx xxx

WHEREFORE, premises considered, judgment is hereby rendered

Petitioner appealed to the CA which aﬃrmed in toto the RTC's assailed

Petitioner ﬁled a motion for reconsideration but the CA dismissed it.

Moreover, in presenting a false deposit slip in its attempt to feign

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In citing the diﬀerent provisions of the Civil Code on common carriers,15

We ﬁnd no compelling reason to disallow the application of the provisions

Costs against petitioner.

2. Id., pp. 22-23.

12. Petitioner's Memorandum, rollo, p. 157.

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