VOL.

237, OCTOBER 26, 1994 761

Metropolitan Bank and Trust Company vs. Court of
Appeals

*
G.R. No. 112576 (CA-GR CV No. 26571). October 26, 1994.

METROPOLITAN BANK AND TRUST COMPANY,

petitioner, vs. THE HON. COURT OF APPEALS, RURAL
BANK OF PADRE GARCIA, INC. and ISABEL R.
KATIGBAK, respondents.

Civil Law; Negligence; Damages; Responsibility arising from

negligence in the performance of every kind of obligation is
demandable.—Clearly, petitioner bank was remiss in its duty and
obligation to treat private respondents’ 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. Responsibility arising from negligence in the
performance of every kind of obligation is demandable.
Same; Same; Same; The bank’s negligence although not have
been attended with malice and bad faith, nevertheless, it caused
serious anxiety, embarassment and humiliation to private
respondents.—While 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.
Same; Same; Same; Damage to private respondents’
reputation and social standing entitles them to moral damages.—
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

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 * THIRD DIVISION.

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762 SUPREME COURT REPORTS ANNOTATED

Metropolitan Bank and Trust Company vs. Court of Appeals

feelings, moral shock, social humiliation and similar injury.

Temperate 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. Temperate 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.
Same; Same; Same; Moral and temperate damages 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.—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.

PETITION for review on certiorari to annul a decision of

the Court of Appeals.

The facts are stated in the opinion of the Court.

     Makalintal, Barot, Torres & Ibarra for petitioner.
     Fornier, Lava & Fornier for private respondents.

ROMERO, J.:

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.
 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.

763

VOL. 237, OCTOBER 26, 1994 763

Metropolitan Bank and Trust Company vs. Court of
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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.
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.”
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.
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.

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764 SUPREME COURT REPORTS ANNOTATED

Metropolitan Bank and Trust Company vs. Court of
Appeals

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 1na wala namang pondo,
Three Hundred Thousand na.”) When 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.
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.
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.
 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.
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

________________

1 TSN of January 6, 1984, p. 13.

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Metropolitan Bank and Trust Company vs. Court of
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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.
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
2
25, 1989, the RTC of Lipa City rendered a
decision in favor of plaintiffs and against the defendant
MBTC, ordering the latter to:

1. pay plaintiff Isabel Katigbak P50,000.00 as

temperate damages;
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;
3. pay P100,000.00 as attorney’s fees and litigation
expenses;

_______________

2 Rollo, pp. 61-79.

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766 SUPREME COURT REPORTS ANNOTATED

Metropolitan Bank and Trust Company vs. Court of
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and
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.
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.
On October
3
29, 1992, the Court of Appeals rendered a
decision affirming 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.
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, and
2. assuming that they are so entitled, whether or not
the amounts awarded are excessive and
unconscionable.

The petition is devoid of merit.

The case at bench was instituted to seek damages
caused by the dishonor through negligence of respondent
bank’s checks

_______________

3 Rollo, pp. 35-45.

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Metropolitan Bank and Trust Company vs. Court of
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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.
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.
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 respondents’ 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 4 is to check and countercheck them for
possible errors. Responsibility arising from negligence in5
the performance of every kind of obligation is demandable.
While 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 6
are entitled to recover
reasonable moral damages.

_______________

4 BPI v. IAC, G.R. No. 69162, February 21, 1992, 206 SCRA 408, citing
Simex International (Manila), Inc. v. CA, G.R. No. 88013, March 19, 1990,
183 SCRA 360.
5 Art. 1172, Civil Code.
6 American Express International, Inc. v. IAC, G.R. No. 70766,
November 9, 1988, 167 SCRA 209.

768

768 SUPREME COURT REPORTS ANNOTATED

Metropolitan Bank and Trust Company vs. Court of
Appeals

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. 7
In the case of Leopoldo Araneta v. Bank of America, we
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.
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,8
moral shock, social humiliation and similar injury.
Temperate 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,
9
from the nature of
the case, be proved with certainty. Temperate 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

_______________

7 G.R. No. L-25414, July 30, 1971, 40 SCRA 144.

8 De Leon v. CA, G.R. No. L-31931, August 31, 1988, 165 SCRA 166.
9 Art. 2224, Civil Code.

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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 10allegedly suffered by Mrs. Katigbak is susceptible
of proof.
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 11
established with exactitude, precisely due to their nature.
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.
Moreover, considering the nature and extent of the
services rendered by private respondents’ 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.
WHEREFORE, the decision of respondent Court of
Appeals is AFFIRMED in all respects.
SO ORDERED.

     Bidin, Melo and Vitug, JJ., concur.

     Feliciano, J., On leave.

Judgment affirmed in toto.

Note.—In the absence of malice and bad faith, moral

damages cannot be awarded. (Capco vs. Macasaet, 189
SCRA 561 [1990])

——o0o——

_______________

10 Rollo, CA decision, p. 40.

11 Art. 2216, Civil Code.

770
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