November 2010 - Philippine Supreme Court Decisions/Resolutions
G.R. No. 188412 : November 22, 2010
CITIBANK, N.A., Petitioner, v. ATTY. ERNESTO S. DINOPOL, Respondent.
D E C I S I O N
This is a petition for review filed under Rule 45 of the 1997 Revised Rules of Civil Procedure questioning 1] the December 16, 2008 Decisioncralaw1 of the Court of Appeals (CA), in CA-G.R. CV No. 82291, which affirmed the February 20, 2004 Decision of the Regional Trial Court, Branch 226, Quezon City (RTC), ordering petitioner Citibank, N. A. (Citibank) to pay respondent Atty. Ernesto S. Dinopol (Atty. Dinopol) moral damages and attorney's fees; and 2] its June 19, 2009 Resolution denying petitioner's motion for the reconsideration thereof.
Records disclose that sometime in December 1996,
Atty. Dinopol availed of Citibank's 'Ready Credit Checkbooks' advertised
offer. After approving his application,
Citibank granted Atty. Dinopol a credit line limit of
P30,000.00. For said reason, Atty. Dinopol received from
Citibank a check booklet consisting of several checks with a letter stating
that the account was 'ready to use.' Later, Citibank billed Atty. Dinopol the sum of P1,545.00 representing
Ready Credit Documentary Stamp and Annual Membership Fee as reflected in his
Statement of Account dated
26, 1996. Thereafter,
Citibank billed him the amount of P1,629.21 for interest and charges as
well as late payment charges as stated in his Statement of Account dated
January 26, 1997. Atty.
Dinopol paid said interests and charges on
February 26, 1997.
6, 1997, Atty. Dinopol issued a check using his credit checkbook
account with Citibank in the amount of
P30,000.00 in favor of one Dr.
Marietta M. Geonzon (Dr. Geonzon) for
investment purposes in her restaurant business. However, when the check was deposited on
March 12, 1997, it was dishonored for the
reason, 'Drawn Against Insufficient Funds' or 'DAIF.' Humiliated by the dishonor and the demand
notice he received from Dr. Geonzon, Atty. Dinopol filed a civil action for
damages against Citibank before the RTC. Atty. Dinopol alleged that said bank was grossly negligent and acted in
bad faith in dishonoring his check.
In defense, Citibank averred that it was completely
justified in dishonoring Atty. Dinopol's check because the account did not have
sufficient funds at the time it was issued. Citibank explained that when said check in the amount of
was issued, his credit line was already insufficient to accommodate it. His credit limit had been reduced by the
interests and penalty charges imposed as a result of his late payment. Citibank
argued that had Atty. Dinopol been prompt in the payment of his obligations, he
would not have incurred interests and penalty charges and his credit line of P30,000.00
would have been available at the time the check was issued and presented for
On February 20, 2004, the RTC rendered a decisioncralaw2 against Citibank, the dispositive portion of which reads:chanrobles virtual law library
In view of the foregoing, judgment is hereby rendered in favor of the plaintiff and against the defendant bank as follows: Defendant Citibank N.A. is hereby ordered to pay the plaintiff Atty. Ernesto S. Dinopol:chanrobles virtual law library
1) P100,000.00 as and for moral damages;chanroblesvirtualawlibrary
2) P50,000.00 as and for attorney's fees; and
3) Costs of suit.
The RTC reasoned out, among others, that Citibank failed to completely disclose the terms and conditions of its 'Citybank Ready Credit Account' when Atty. Dinopol applied for it. Only the general provisions of the agreement were explained to him. The Standard Handbook Guide which would have guided him as to fees, charges and penalties that could be billed by the bank was never given to him.
Furthermore, the RTC found that Atty. Dinopol was
given a 'go signal' by Citibank when he informed the latter that he was going
to issue a check in the amount of
P30,000.00. Citibank failed to advise him that he still
had an outstanding balance of P58.33 as of
February 26, 1997. Had he been informed, he could have paid such
a small amount and avoided the dishonor of his check. In fact, when he issued the check on
March 6, 1997, no bill had
yet been sent to him for the amount of P58.33 because he had just paid P1,629.00
February 26, 1997.
The billing statement, if any, would still be due on
March 15, 1997. On
March 11, 1997, when the check was
presented for payment, Citibank could have called his attention and he could
have immediately remitted the amount of P58.00 within the same banking
day so that the check would be honored.
Decision of the Court of Appeals
December 16, 2008, the CA affirmed the RTC decision with modification. It increased
the award of moral damages from
P100,000.00 to P500,000.00 and
awarded exemplary damages in the amount of P50,000.00.
In its decision, the CA found that Citibank, as admitted by its witness, Mark Andre P. Hernando (Hernando), displayed dishonesty in claiming that Atty. Dinopol was provided with the bank's Customer Guidebook. No proof to the contrary was shown by the bank. Instead of exercising good faith by providing a new account holder like Atty. Dinopol with the service guidebook, Citibank argued that since he was a lawyer, the latter should have already been familiar with the terms and conditions of his Ready Credit Account.
Moreover, the CA noted that before
Atty. Dinopol issued the subject check, he first consulted the bank if he could
issue one. It was only after being given
the affirmative response that he issued said check which gave rise to this
controversy. The bank should have given
the necessary advice to Atty. Dinopol and thereby avoid the dishonor of the
check for a measly amount of
Finally, the CA ruled that Atty. Dinopol
was not yet delinquent when he issued the check so as to justify the
deduction from his P30,000.00 credit line. Based on the documentary
evidence, the due date for the February 26, 1997 Statement of Account was March
19, 1997. So, when Atty. Dinopol issued the check on
March 6, 1997, the period within which to
settle his account was still running, thus, rendering the P58.33
In modifying the decision, the CA
increased the amount of moral damages from
P100,000.00 to P500,000.00
for the following reasons: 1]
Atty. Dinopol's stature - he was a lawyer of good standing, yet he was abused
by Citibank; 2] the dishonesty displayed by Citibank in claiming that Atty.
Dinopol was given a service guidebook despite lack of proof thereon; 3] the bad
faith displayed by Citibank in using a measly amount of P58.33 as basis
to justify its dishonor (due to DAIF) of P30,000.00 worth of check
issued by Atty. Dinopol; and 4] the fact that Citibank besmirched Atty. Dinopol's reputation and has
considerably caused him undue humiliation.
Hence, this petition.
WHETHER OR NOT THE COURT OF APPEALS WAS CORRECT IN RULING THAT PETITIONER CITIBANK, N.A. IS LIABLE TO RESPONDENT ATTY. ERNESTO S. DINOPOL FOR DAMAGES.
Position of the Petitioner
Citibank argues that the dishonor of Atty. Dinopol's check was valid as it was done in the exercise of its rights and prerogative under the terms and conditions of his Ready Credit Facility. It insists that it sent a copy of the guidebook to Atty. Dinopol after his application for the credit facility was approved.
It also points out that upon the
approval of Atty. Dinopol's Ready Credit Facility, the latter was initially
billed with the amounts of
P1,500.00 for the annual fee and P45.00
for the documentary stamp tax. The total amount of P1,545.00 was
indicated in his Statement of Account dated December 26, 1996, bearing the due
date on or before January 16, 1997. Atty. Dinopol, however, failed to pay it on
or before said date. Thus, interest and
late payment charges accrued on his unpaid account as provided for in the
provisions of the guidebook.
Further, Citibank claims that a
second statement of account dated January 26, 1997 was sent to Atty. Dinopol
which showed that the aggregate amount of
P1,629.21 was due and payable
immediately. This amount represents the unpaid sum of P1,545.00 for the
annual fee and documentary stamp tax, P10.00 as penalty charge for the
late payment and P74.21 as accrued interest. Atty. Dinopol paid the
amount of P1,629.21 only on February 26, 1997. Thereafter, Citibank sent him another
statement of account acknowledging receipt of his payment and, at the same
time, charging him the additional amount of P58.33 for penalties and
other charges. Since the unpaid amount of P58.33 was automatically
billed as an availment against his Ready Credit Facility, his available credit
limit at the time of the issuance of the subject check on March 6, 1997 was
already reduced by P58.33. As a result, when the subject check was
negotiated, it had to be returned due to 'DAIF.'
Accordingly, Citibank asserts that the dishonor of the subject check was due to Atty. Dinopol's failure to timely settle his outstanding obligations despite receipt of his statements of account. It cannot, therefore, be faulted because it was just exercising its legal right under the terms and conditions of the Ready Credit Facility. It did not act fradulently or in bad faith. No proof was shown that the dishonor of the subject check was carried out in an arbitrary, capricious, and malicious manner.
Finally, Citibank advances that Atty. Dinopol, as a practising lawyer, is presumed to have carefully considered, known, and understood the provisions and legal effects of the contracts he entered into.
Position of the Respondent
In answer to Citibank's assertions, Atty. Dinopol counters that the bank failed to prove that a copy of the guidebook was sent to him. In fact, Citibank's own witness, Hernando, categorically admitted that the bank did not send him the said guidebook. According to Atty. Dinopol, Citibank should have acted in good faith and in a manner deserving of the trust of its customers.
He also contends that the
dishonor of the check due to the non-payment of the penalty charges and
P58.33 was uncalled for. The payment of said amount was not yet due on
March 6, 1997 when the check was issued and even on March 12, 1997 when it was
dishonored. The statement of account would show that the sum of P58.33
was due only on March 19, 1997. This
only shows that his account was not yet delinquent, both at the time when said
check was issued and when it was eventually presented for payment, thereby making the act of the bank of dishonoring the check wanting of any legal
Lastly, Atty. Dinopol charges
Citibank for having acted in bad faith when it dishonered the subject check for
a meager amount of
P58.33 and for imposing highly questionable charges
against his credit facility account. He believes that the bank, wilfully or
negligently, wronged him and damaged his reputation. Hence, it is liable to pay
The Court's Ruling
The general rule is that in petitions for review on certiorari, the Court will not re-examine the findings of fact of the appellate court except (a) when the latter's findings are grounded entirely on speculations, surmises or conjectures; (b) when its inference is manifestly mistaken, absurd or impossible; (c) when there is a grave abuse of discretion; (d) when its findings of fact are conflicting; and (e) when it goes beyond the issues of the case.cralaw3 Citibank fails to convince the Court that the case falls under any of the exceptions. Hence, the findings of fact should no longer be reviewed.
At any rate, the Courts agrees with the courts below in concluding that Citibank was liable to Atty. Dinopol for moral and exemplary damages and attorney's fees.
A perusal of the evidentiary records shows that Citibank was at fault when it dishonored the subject check. First, Citibank claims that, as a matter of standard operating procedure, it sent to Atty. Dinopol the Citibank Ready Credit Customer Guidebook upon the approval of his Ready Credit Account application and so, he was aware of the terms and conditions stated therein. Yet, except for its bare allegation, no other substantial proof was presented by Citibank that the guidebook was indeed sent to Atty. Dinopol. In fact, its witness, Hernando, admitted that the subject handbook was not at all delivered to him.
when Atty. Dinopol issued the subject check for the full amount of
and Citibank dishonored it because of insufficiency of funds by P58.33
representing the amount charged on his credit line for penalties and charges,
the said amount was not yet overdue. The
bank's Statement of Account dated
January 26, 1997cralaw4
showed that he must pay the total amount of P1,629.21 representing the
annual membership fee of P1,500.00, documentary stamp tax of P45.00,
late charges of P10.00 and interest/charges of P74.21. On
February 26, 1997, he
immediately paid the full amount of P1,629.21
as evidenced by his credit card payment slip.cralaw5 The full payment was reflected in his
statement of accountcralaw6
February 26, 1997. The same statement of accountcralaw7
indicated that there were still charges amounting to P58.33 due for
March 19, 1997. To reiterate, the check was issued on March 6, 1997
dishonored on March 12, 1997,cralaw9
both dates being days before the said due date. Contrary to Citibank's
insistence, Atty. Dinopol was definitely not yet a delinquent account holder.
More importantly, Citibank failed to consider the fact that Atty. Dinopol
issued the check on
1997 after paying the full amount of P1,629.21 and clearing
with the bank if he could issue a check in the amount of P30,000.00.
Citibank did not even refute the allegation that it gave Atty. Dinopol the
go-signal to issue such a check.
With respect to damages, the Court is in agreement with the CA in awarding moral and exemplary damages. However, the Court cannot sanction the modification by the CA, under the circumstances attending the case. It is of the considered view that the award of the RTC would suffice subject, of course, to the payment of legal interest.
The award of moral damages should be granted in reasonable amounts depending on the facts and circumstances of the case.cralaw10 Moral damages are meant to compensate the claimant for any physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injuries unjustly caused.cralaw11
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.cralaw12 Thus, the Court affirms the award as a way of setting an example for the public good. In addition, it also provided for attorney's fees. Both are subject to legal interest.
In any event, Citibank should have been more cautious in dealing with its clients since its business is imbued with public interest. Banks must always act in good faith and must win the confidence of clients and people in general. It is irrelevant whether the client is a lawyer or not.
It cannot be over emphasized that the banking business is impressed with public interest. Of paramount importance is the trust and confidence of the public in general in the banking industry. Consequently, the diligence required of banks is more than that of a Roman pater familias or a good father of a family. The highest degree of diligence is expected.
In its declaration of policy, the General Banking Law of 2000 requires of banks the highest standards of integrity and performance. Needless to say, a bank is 'under obligation to treat the accounts of its depositors with meticulous care.' The fiduciary nature of the relationship between the bank and the depositors must always be of paramount concern.cralaw13
WHEREFORE, the December 16, 2008 Decision of the Court of Appeals is MODIFIED to read as follows:
In view of the foregoing, judgment is hereby rendered ordering defendant Citibank N.A to pay plaintiff Atty. Ernesto S. Dinopol the following:chanrobles virtual law library
P100,000.00 as and for moral damages;chanroblesvirtualawlibrary
P50,000.00 as and for exemplary damages;chanroblesvirtualawlibrary
P50,000.00 as and for attorney's fees; and
4] Costs of suit,
plus interest at the legal rate reckoned from the filing of the complaint.
ANTONIO T. CARPIO
ANTONIO EDUARDO B. NACHURA
DIOSDADO M. PERALTA
A T T E S T A T I O N
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.
cralaw1 Rollo, pp. 10-25. Penned by Associate Justice Vicente S.E.Veloso with Associate Justice Rebecca De Guia-Salvador and Associate Justice Ricardo R. Rosario, concurring.
cralaw2 Id. at 317-329.
cralaw3 J. Hidalgo Uy v. Spouses Medina, G.R. No. 172541, August 8, 2010.
cralaw4 Rollo, p. 257.
cralaw5 Id. at 258.
cralaw6 Id. at. 284.
cralaw8 Id. at 259.
cralaw9 Id. at 260.
cralaw10 Manila Electric Company v. Spouses Edito and Felicidad Chua and Josefina Paqueo, G.R. No. 160422, July 5, 2010.
cralaw11 Cagungun v. Planters Development Bank, 510 Phil. 51, 62-63 (2005), citing Samson, Jr. v Bank of the PhilippineIslands, 453 Phil. 577, 583 (2003).
cralaw12 Solidbank Corporation/Metropolitan Bank and Trust Company v. Tan, G.R. No. 167346, April 2, 2007, 520 SCRA 123, 129.
cralaw13 Philippine Savings Bank v. Chowking Food Corporation, G.R. No. 177526, July 4, 2008, 557 SCRA 318, 330-331.