November 2005 - Philippine Supreme Court Decisions/Resolutions
G.R. No. 136371 - Prudential Bank v. Chonney Lim.
[G.R. NO. 136371 November 11, 2005]
PRUDENTIAL BANK, Petitioner, v. CHONNEY LIM, Respondent.
D E C I S I O N
This treats of the Petition for Review on Certiorari of the Decision1 of the Court of Appeals,2 dated 31 July 1998, which affirmed with slight modification the Decision3 of the Regional Trial Court (RTC),4 granting the action filed by respondent for recovery of sum of money and damages.
Chonney Lim (respondent), the owner of Rikes Boutique located at Session Road, Baguio City, maintained two (2) accounts with Prudential Bank (the bank), namely: Savings Account No. 11264 and Checking Account No. 1262. He availed of the bank's automatic transfer system wherein the funds from his savings account could be transferred to his checking account in case the balance of the latter account was insufficient to cover the checks he issued.
On 14 March 1988, respondent deposited the amount of
P34,000.00 with his savings account. According to respondent, the following day, 15 March 1988, he deposited an equal amount with the same savings account. The matter is the crux of contention between the parties, as the bank has steadfastly denied having received the latter deposit from respondent.
On 24 May 1988, respondent issued a check against his current account in favor of the Paluwagan ng Bayan Savings Bank (Paluwagan) in the sum of
P2,830.00 in payment of his loan with the said bank. On 25 May 1988, respondent drew another check against his checking account to the order of Teodulo Crisologo in the amount of P10,000.00 as payment for a business transaction with the latter.
The bank, however, dishonored both checks, claiming that respondent did not have sufficient funds in his account with the bank. Upon learning that the first check paid to Paluwagan had been dishonored, respondent wrote a letter5 to the bank on 27 May 1988, asking it to recheck its records. On 30 May 1988, the bank's manager, Tolentino Opiniano (Opiniano), sent a reply letter,6 offering, as an excuse for the dishonor of said check, the inadvertent earlier posting to respondent's account of a postdated check.7 While Opiniano apologized for respondent's inconvenience, he made no commitment to honor this first check.8
When the second dishonored check came to respondent's knowledge, he immediately wrote a letter9 to the bank, protesting the dishonor of the check. Opiniano sent a reply10 stating that as per records, a deposit slip dated 15 March 1988 for
P34,000.00 was received for deposit to Savings Account No. 11264 on 14 March 1988.
Respondent denied having made only one deposit, insisting that he made two deposits of
P34,000.00 each, one on 14 March and the other on 15 March. As proof, respondent presented the two separate deposit slips covering the transactions, the first bearing the date 14 March 1988 while the second, the date 15 March 1988.
After the bank had conducted a thorough investigation, on 10 June 1988, Opiniano informed respondent that two deposits were made on 14 March 1988, one for
P34,000.00 and the other for P1,000.00; and that two other deposits were made on 15 March 1988: P4,900.00 and P2,900.00. He maintained that although the deposit slip bearing the amount of P34,000.00 is dated 15 March 1988, it was actually received the day before or on 14 March 1988. Thus, the bank's position is that only one deposit of P34,000.00 was made by respondent on 14 and 15 March 1988.11
In view of the bank's adamant refusal to alter its stand, respondent filed a Complaint12 before the RTC, Baguio City for the recovery of
P34,000.00 representing his actual deposit and P300.00 as penalty charge, plus damages.
On 27 August 1991, the RTC rendered its Decision holding that respondent made two deposits of
P34,000.00 apiece. Thus, the RTC ordered the bank to pay the following amounts: P34,000, representing the unposted deposit, with legal interest; P600.00, representing the service charges unjustifiably imposed on respondent, with legal interest; P50,000.00 as moral damages; P25,000.00 as exemplary damages; and P10,000.00 as attorney's fees, plus costs of suit.
On appeal, the Court of Appeals affirmed the decision of the trial court with modification as to the award of moral damages, reducing it to
P10,000.00. The testimony of the bank teller, coupled with the fact that the two deposit slips listed different denominations of money totaling P34,000.00 per deposit slip, led the appellate court to conclude that there were indeed two deposits of P34,000.00 each, one made on 14 March and the other on 15 March 1988.
Before this Court, the bank argues in the main that the award of damages by the appellate court is groundless that consequently, the assailed decision is not in accord with law and jurisprudence.13
As a rule, the findings of fact of the trial court when affirmed by the Court of Appeals are final and conclusive on, and cannot be reviewed on appeal by, this Court as long as they are borne out by the record or are based on substantial evidence. The Court is not a trier of facts, its jurisdiction being limited to reviewing only errors of law that may have been committed by the lower courts.14
Essentially, as intimated earlier, the issue in the instant case boils down to whether respondent made a deposit of
P34,000.00 on 15 March 1988, apart from the deposit of an equal amount the day before, a factual question which was resolved in the affirmative by the RTC, which finding was categorically affirmed by the Court of Appeals. The factual issue is beyond the province of this Court to review or disturb. It is not the function of the Court to analyze or weigh all over again the evidence or premises supportive of such factual determination. The Court has consistently held that the findings of the Court of Appeals and other lower courts are, as a rule, accorded great weight, if not binding upon it, save for the most compelling and cogent reasons.15
We find no justification to deviate from the factual findings of the trial court and the appellate court. The bank has utterly failed to convince us that the assailed findings are devoid of basis or are not supported by substantial evidence.
As found by the RTC, respondent indeed made two deposits of
P34,000.00 on 14 and 15 March 1988, viz:
On the pivotal issue of whether or not the plaintiff made only one (1) or two (2) deposits of
P34,000.00 the first on March 14 and the second on March 15, 1988 the Court holds that, from the evidence extant in the record, particularly the admissions of teller Merlita Susan Caasi, the plaintiff has established his claim of having made two (2) deposits of P34,000.00. Thus, Caasi admitted that she impressed her rubber stamp, "Teller 2" and "duplicate" on both the Exhibits "B" and "C" which are plaintiff's file copies of two separate and different deposit slips for P34,000.00 each. Exhibit "B" is a deposit slip, dated March 14, 1988, for P34,000.00 consisting of 300 pieces of P100 bills and 80 pieces of P50.00 bills; while Exhibit "C" is a deposit slip, dated March 15, 1988, also for P34,000.00, but consisting of 340 pieces of P100 bills. It is only Exhibit "C" that appears to have been recorded by the defendant bank (Exhibit "3"). Since teller Caasi acknowledged to have stamped both deposit slips, logic and reason dictates that she should be presumed to have received the amounts covered by them unless she could satisfactorily demonstrate the contrary which she, however, miserably failed to do. The fact that only one (1) deposit of P34,000.00 is recorded in the teller's validating machine and blotter, as well as in the ledger, passbook, bookkeeper's machine tape and blotter, can not help her any for the crux precisely of plaintiff's complaint is defendant's negligence in not recording his other deposit of P34,000.00.16
The appellate court similarly observed:
On the basis of the evidence adduced by the parties, We are convinced that indeed, appellee deposited
P34,000.00 on March 14 and another P34,000.00 on March 15, 1988. These two different transactions are evidenced by two deposit slips marked as Exhibits "B" and "C". The fact that appellant received the amount represented by each deposit slip can be inferred from the testimony of Merlita Caasi, a bank teller:
Q: And by stamping the duplicate copy of a depositor, in the case of Mr. Lim, who is in a practice of always preparing a duplicate copy for his file, your mere stamping of the duplicate would indicate that you received the money deposited?cralawlibrary
A: Yes, your Honor."
which must be read in conjunction with her testimony on cross-examination, thus:
Q: I am showing you Exhibit "C" and tell the Honorable Court if that is the duplicate of Exhibit "3" which you also stamped with the stamp of the bank?cralawlibrary
A: I am not sure if that is the real deposit slip made at the same day because they have the practice to get another duplicate if their personal copy was lost, your Honor. This is my stamp but I am not sure if this is the same.
Witness referring to Exhibit "C".
Q: But you are sure that this is your stamp as Teller No. 2 at that time?cralawlibrary
A: It appears, it is.
Q: I am showing you now that which we reserved the last time, the original of Exhibit "B", a copy - an original copy of a deposit slip dated March 14, 1988, stamped with the stamp of the Bank Teller No. 2 and a duplicate. Now, can you now state to the Court that this was your stamp of the bank stamp?cralawlibrary
A: That is my stamp.
Q: Even this word duplicate stamped also in this Exhibit "B", the original of Exhibit "B", is your stamp?cralawlibrary
A: Yes, it is my stamp."
Appellee also presented in evidence the reverse side of the deposit slip dated March 14, 1988 he described as follows:
"Q: On the front side of Exhibit "B", the amount of
P34,000.00 cash appears. Is this explained by any denomination of the same exhibit?cralawlibrary
A: Yes, your Honor.
Q: You are referring to what part of the exhibit?cralawlibrary
A: I am referring to Exhibit "B-1", Your Honor.
Q: So that the
P34,000.00 you deposited consisted of 300 pieces of P100.00 bills in the total amount of P30,000.00; 80 pieces of P50.00 bills in the total amount of P4,000.00?cralawlibrary
A: Yes. Your Honor."
In the same manner, appellee also presented the other side of the deposit slip dated March 15, 1988, thus:
"Q: On March 15, 1988, do you remember having again deposited another amount of
P34,000.00 to your account with the defendant bank?cralawlibrary
A: Yes. Your Honor.
Q: Do you have a copy? Do you have evidence to show?cralawlibrary
A: Yes. Your Honor. I have here my deposit slip on March 15, 1988, for the amount of another
Q: Is the denomination of the total deposit of P34,000.00 you made on March 15 shown in this deposit slip?cralawlibrary
A: Yes, Your Honor. It is shown at the back of the deposit slip.
Q: As what?cralawlibrary
A: At the back of the deposit slip, your Honor. It shows that the
P100.00 bills I deposited is 340 pieces, amounting to P34,000.00.
Q: Do you have a xerox copy of that?cralawlibrary
A: Yes, Your Honor.
May we show both the original and the xerox copy. The xerox copy reflects the front page and the reverse side of the deposit slip dated March 15, 1988. May we ask for an observation.
The xerox copy of the deposit slip dated March 15, 1988 in the sum of
P34,000.00, together with the reverse side is a faithful reproduction of the duplicate original presented.
May we respectfully pray that the front page of that deposit slip be marked as Exhibit "C" and the reverse side as "Exhibit C-1".17
An examination of the deposit slips dated 14 March and 15 March 1988 reveals that while the slips each cover deposits in the amount of
P34,000.00, they list down different denominations however. Evidently, the slips were not prepared simultaneously or concurrently. This fact militates against the bank's claim that one deposit slip is simply the duplicate of the other. To sustain the bank's hypothesis, we would have to conclude that respondent, with all deliberate design, prepared two deposit slips and purposely wrote different denominations in them to mislead the bank that the two deposit slips were separately executed on different occasions. There is no evidence to support such a bizarre conclusion; thus, we are content to uphold the findings of the triers of fact on this point.
The bank insists that the court misappreciated the import of the letter of Opiniano dated 10 June 1988. As we have earlier intimated, appreciation of evidence is the domain of the lower courts. The testimonies of the witnesses presented by the bank deserve scant consideration in the face of the overwhelming documentary evidence of respondent, i.e., the duplicate originals of the deposit slips bearing the amount of
P34,000.00 dated 14 and 15 March 1988, respectively. Indeed, the bank failed to rebut the inexorable probative impact of the deposit slips.
Article 1172 of the Civil Code ordains that responsibility arising from negligence in the performance of an obligation is demandable. The failure of the bank's employees to credit the amount of
P34,000.00 to respondent's savings account, resulting as it did in the dishonor of respondent's checks, constitutes actionable negligence in law.
From another perspective, the negligence of the bank constitutes a breach of duty to its client. It is worthy of note that the banking industry is impressed with public interest. As such, it must observe a high degree of diligence and observe lofty standards of integrity and performance. By the nature of its functions, a bank is under obligation to treat the accounts of its depositors with meticulous care and always to have in mind the fiduciary nature of its relationship with them.18
With the attending factual milieu, the imposition of damages on the errant bank is in order. Presaging this course of action is the ruling in Simex International v. Court of Appeals,19 where this Court rendered a telling discourse on the fiduciary responsibility of depository banks, thus:
The banking system is an indispensable institution in the modern world and plays a vital role in the economic life of every civilized nation. Whether as mere passive entities for the safekeeping and saving of money or as active instruments of business and commerce, banks have become an ubiquitous presence among the people, who have come to regard them with respect and even gratitude and, most of all, confidence. Thus, even the humble wage-earner has not hesitated to entrust his life's savings to the bank of his choice, knowing that they will be safe in its custody and will even earn some interest for him. The ordinary person, with equal faith, usually maintains a modest checking account for security and convenience in the settling of his monthly bills and the payment of ordinary expenses. As for business entities like the petitioner, the bank is a trusted and active associate that can help in the running of their affairs, not only in the form of loans when needed but more often in the conduct of their day-to-day transactions like the issuance or encashment of checks.
In every case, the depositor expects the bank to treat his account with the utmost fidelity, whether such account consists only of a few hundred pesos or of millions. The bank must record every single transaction accurately, down to the last centavo, and as promptly as possible. This has to be done if the account is to reflect at any given time the amount of money the depositor can dispose of as he sees fit, confident that the bank will deliver it as and to whomever he directs. A blunder on the part of the bank, such as the dishonor of a check without good reason, can cause the depositor not a little embarrassment if not also financial loss and perhaps even civil and criminal litigation.
The action for damages hinges on the resolution of whether respondent has sufficient funds in his account when the checks were dishonored. Both the trial and appellate courts ruled that had the bank credited the
P34,000.00 deposit made by respondent on 15 March 1988, the checks would not have been dishonored. Likewise, both courts found that moral damages were in order.
The concept of moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Although incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission.20
Needless to say, the bank's wrongful act caused injury to respondent. Credit is very important to businessmen, and its loss or impairment needs to be recognized and compensated.21 This Court in Leopoldo Araneta v. Bank of America22 highlights the importance of good credit in the business community:
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 material loss to him. As stated in the case Atlanta National Bank v. Davis, supra, 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."
Under the circumstances of this case, we find that the award of moral damages is proper but the amount must be reverted back to
P50,000.00 as ordered by the RTC, said court being in a better position to assess the amount of damages to be imposed on the negligent bank.
Furthermore, we sustain the award of exemplary damages. Such damages are imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.23 The business of a bank is affected with public interest; thus, it makes a sworn profession of diligence and meticulousness in giving irreproachable service. For this reason, the bank should guard against injury attributable to negligence or bad faith on its part. The banking sector must at all times maintain a high level of meticulousness.24 In view of the bank's negligence to record the deposit, the grant of exemplary damages is thus justified.
The bank raises another issue, that concerning the postdated check which it had prematurely posted25 and which it initially assumed, when it first wrote the respondent on 30 May 1988, to be the cause of the dishonor of respondent's check payable to Paluwagan.26 The bank argues that the fact it prematurely honored such postdated check did not give rise to damages.27 This argument is irrelevant. The act or omission of the bank that gives rise to damages in favor of respondent is not the premature posting of the postdated check, but the fact that the bank did not credit respondent's second deposit of
P34,000.00. Besides, this is the first time that said issue was presented. As a rule, no issue may be raised on appeal unless it has been brought before the lower tribunal for its consideration. Higher courts are precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below, but ventilated for the first time only in a motion for reconsideration or on appeal.28
WHEREFORE, the petition is denied. The Decision of the RTC dated 27 August 1991 in Civil Case No. 1467-R is AFFIRMED IN FULL. Costs against petitioner.
1 Rollo, pp. 40-51.
2 Penned by Associate Justice Angelina Sandoval Gutierrez (now Supreme Court Associate Justice) and concurred in by Associate Justices B.A. Adefuin-De la Cruz and Presbitero J. Velasco, Jr.
3 Rollo, pp. 24-39.
4 Penned by Judge Salvador J. Valdez, Jr.
5 Rollo, p. 25.
6 Id. at 27.
7 Check No. 275243 dated 29 May 1988 for
P3,500.00 in favor of Mrs. Amparo Arre was posted on 11 May 1988.
8 Supra note 6.
9 Id. at 28-29.
10 Id. at 29.
11 Id. at 31-32.
12 RTC Records, pp. 1-5.
13 Rollo, pp. 12-13.
14 Swagman Hotels and Travel, Inc. v. Court of Appeals, G.R. No. 161135, 8 April 2005, 455 SCRA 175, citing Amigo v. Teves, 96 Phil. 252 (1954) and Alsua-Betts v. Court of Appeals, Nos. L-46430-31, 30 July 1979, 92 SCRA 332.
15 Abacus Real Estate Development Center v. Manila Banking Corporation, G.R. No. 162270, 6 April 2005, 455 SCRA 97, citing PT&T v. Court of Appeals, G.R. No. 152057, 29 September 2003, 412 SCRA 263; Ibay v. Court of Appeals, G.R. No. 47158, 5 August 1992, 212 SCRA 160; and Republic v. Court of Appeals, G.R. No. 116372, 18 January 2001, 349 SCRA 451.
16 Supra note 3 at 37-38.
17 Supra note 1 at 45-48.
18 Consolidated Bank and Trust Corporation v. Court of Appeals, G.R. 138569, 11 September 2003, 410 SCRA 562, citing Bank of the Philippine Islands v. Casa Montessori Internationale, G.R. No. 149454, 28 May 2004, 430 SCRA 261.
19 G.R. No. 88013, 19 March 1990, 183 SCRA 360.
20 Article 2217, Civil Code.
21 Samson v. Bank of the Philippine Islands, G.R. No. 150487, 10 July 2003, 405 SCRA 607.
22 148-B Phil. 124 (1971).
23 Article 2229, Civil Code of the Philippines.
24 Solidbank Corporation v. Arrieta, G.R. No. 152720, 17 February 2005, 451 SCRA 711, citing Simex International v. Court of Appeals, supra note 19.
25 Supra note 7.
27 Rollo, p. 18.
28 Mendoza and Casino v. Bautista, G.R. No. 143666, 18 March 2005, 453 SCRA 691, citing Sesbreno v. Central Board of Assessment Appeals, 337 Phil. 89 (1997); Manila Bay Club Corporation v. Court of Appeals, 319 Phil. 413 (1995), DBP v. West Negros College, Inc., G.R. No. 152359, 21 May 2004; Solid Homes, Inc. v. Court of Appeals, 341 Phil. 261 (1997); People v. Echegaray, 335 Phil. 343 (1997).