BANK OF THE PHILIPPINE ISLANDS VS. REYNALD R.

SUAREZ
[G.R. No. 167750, March 15, 2010]
Facts:
Respondent Reynald R. Suarez (Suarez) is a lawyer who used to maintain both savings and current
accounts with petitioner Bank of the Philippine Islands (BPI) from 1988 to 1997.
Sometime in 1997, Suarez had a client who planned to purchase several parcels of land in Tagaytay City,
but preferred not to deal directly with the land owners. Suarez transacted with the owners of the Tagaytay
properties, making it appear that he was the buyer of the lots. As regards the payment of the purchase
money, Suarez and his client made an arrangement such that Suarezs client would deposit the money in
Suarezs BPI account and then, Suarez would issue checks to the sellers.
On 16 June 1997, Suarezs client deposited a RCBC check with a face value of P19,129,100, in BPI Pasong
Tamo Branch to be credited to Suarezs current account in BPI Ermita Branch. Suarez instructed his
secretary, Petronila Garaygay (Garaygay), to confirm from BPI whether the face value of the RCBC check
was already credited to his account that same day of 16 June 1997. According to Garaygay, BPI allegedly
confirmed the same-day crediting of the RCBC check. Relying on this confirmation, Suarez issued on the
same day five checks of different amounts totaling P19,129,100 for the purchase of the Tagaytay
properties.
While Suarez was in the US for a vacation, Garaygay informed him that the five checks he issued were all
dishonored by BPI due to insufficiency of funds and that his current account had been debited a total of
P57,200 as penalty for the dishonor.
On 19 June 1997, the payees of the five BPI checks that Suarez issued on 16 June 1997 presented the
checks again. Since the RCBC check had already been cleared by that time, rendering Suarezs available
funds sufficient, the checks were honored by BPI. Subsequently, Suarez sent a letter to BPI demanding an
apology and the reversal of the charges debited from his account. Suarez received a call from the manager
who requested a meeting with him to explain BPIs side. However, the meeting did not transpire.
Upon Suarezs request, BPI delivered to him the five checks which he issued on 16 June 1997. Suarez
claimed that the checks were tampered with, specifically the reason for the dishonor. In reply, BPI offered
to reverse the penalty charges which were debited from his account, but denied Suarezs claim for
damages. Suarez rejected BPIs offer.
Suarez then filed with the RTC a complaint for damages claiming that BPI mishandled his account through
negligence. The RTC rendered judgment in favor of Suarez.
BPI appealed to the Court of Appeals, which affirmed the trial courts decision.
Arguments:
Suarez:

Insists that BPI was negligent in handling his account when BPI dishonored the checks he issued to
various payees on 16 June 1997, despite the RCBC check deposit covers the total amount of the
BPI checks.

BPI is estopped from dishonoring his checks since BPI confirmed the same-day crediting of the
RCBC check deposit and assured the adequacy of funds in his account.

That he relied on this confirmation for the issuance of his checks to the owners of the Tagaytay
properties. Thus, BPI made a representation that he had sufficient available funds to cover the
total value of his checks
Issues:
1. W/N BPI was negligent in handling the account of Suarez.
2. W/N BPI is liable to pay Suarez moral and exemplary damage fees and costs of litigation.
Ruling:
Petition is partly meritorious.
1.

Negligence is defined as "the omission to do something which a reasonable man, guided upon those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of
something which a prudent man and reasonable man could not do."
The question concerning BPI's negligence, however, depends on whether BPI indeed confirmed the
same-day crediting of the RCBC checks face value to Suarezs BPI account.

Based on the records, there is no sufficient evidence to show that BPI conclusively confirmed the
same-day crediting of the RCBC check which Suarezs client deposited late on 16 June 1997. Garaygay
failed to (1) identify and name the alleged BPI employee, and (2) establish that this particular male
employee was authorized by BPI either to disclose any information regarding a depositors bank
account to a person other than the depositor over the telephone, or to assure Garaygay that Suarez
could issue checks totaling the face value of the RCBC check. Moreover, a same-day clearing of a
P19,129,100 check requires approval of designated bank official or officials, and not any bank official
can grant such approval. Thus, BPI was not estopped from dishonoring the checks for inadequacy of
available funds in Suarezs account since the RCBC check remained uncleared at that time.
While BPI had the discretion to undertake the same-day crediting of the RCBC check, and disregard the
banking industrys 3-day check clearing policy, Suarez failed to convincingly show his entitlement to
such privilege as he had no credit or bill purchase line with BPI which would qualify him to the
exceptions to the 3-day check clearing policy
Considering that there was no binding representation on BPIs part as regards the same-day crediting
of the RCBC check, no negligence can be ascribed to BPIs dishonor of the checks because BPI was
justified in dishonoring the checks for lack of available funds in Suarezs account.
2.

BPI however mistakenly marked the dishonored checks with "drawn against insufficient funds (DAIF), "
instead of "drawn against uncollected deposit (DAUD)." In the case of DAUD, the depositor has, on its
face, sufficient funds in his account, although it is not available yet at the time the check was drawn.
On the other hand, in DAIF, the depositor lacks sufficient funds in his account to pay the check.
Moreover, DAUD does not expose the drawer to possible prosecution for estafa and violation of BP 22,
while DAIF subjects the depositor to liability for such offenses. Thus, it is clear therefore that DAIF
differs from DAUD. Does the erroneous marking of DAIF, instead of DAUD, give rise to BPIs liability for
damages?
The following are the conditions for the award of moral damages:
a. There is an injury whether physical, mental or psychological clearly sustained by the
claimant;
b. The culpable act or omission is factually established;
c. The wrongful act or omission of the defendant is the proximate cause of the injury sustained
by the claimant;
d. The award of damages is predicated on any of the cases stated in Article 2219 of the CC.
In the present case, Suarez failed to establish that his claimed injury was proximately caused by the
erroneous marking of DAIF on the checks. Proximate cause has been defined as "any cause which, in
natural and continuous sequence, unbroken by any efficient intervening cause, produces the result
complained of and without which would not have occurred." There is nothing in Suarezs testimony
which convincingly shows that the erroneous marking of DAIF on the checks proximately caused his
alleged psychological or social injuries. Suarez merely testified that he suffered humiliation and that
the prospective consolidation of the titles to the Tagaytay properties did not materialize due to the
dishonor of his checks, not due to the erroneous marking of DAIF on his checks. Hence, Suarez had
only himself to blame and cannot recover compensatory damages for his own negligence.
However, while the erroneous marking of DAIF, which BPI belatedly rectified, was not the proximate
cause of Suarezs claimed injury, the Court reminds BPI that its business is affected with public
interest. It must at all times maintain a high level of meticulousness and should guard against injury
attributable to negligence or bad faith on its part. Suarez had a right to expect such high level of care
and diligence from BPI. Since BPI failed to exercise such diligence, Suarez is thus entitled to nominal
damages to vindicate Suarezs right to such high degree of care and diligence. Thus, we award Suarez
P75,000.00 nominal damages.
On the award of actual damages, we find the same without any basis. Considering that BPI legally
dishonored the checks for being drawn against uncollected deposit, BPI was justified in debiting the
penalty charges against Suarezs account, pursuant to the Rules of the Philippine Clearing House
Corporation (see: Sec. 27. Penalty Charges on Returned Items)
WHEREFORE, the Court grants the petition in part. The Court sets aside the 30 November 2004
Decision and 11 April 2005 Resolution of the CA and deletes the award of all damages and fees. The
Court awards to respondent Suarez nominal damages in the sum of P75,000.00.