Bank of the Philippine Island vs. Reynald Suarez G.R. No. 167750, March 15, 2010

Facts:

Suarez represents a client who wants to buy parcels of land without having to directly deal with the land owners. They made arrangements that Suarez will make the transactions on his behalf to make it appear he is the one buying the lots. The client issued a check from Rizal Commercial Banking Co. to be credited to the checking account of Suarez with BPI in the amount of P19,129,100.00 as consideration to the lots. Knowing that the bank observes a 3-day clearing check policy, he asked his secretary to call BPI if the RCBC check was already credited to his account on the same day the check was issued by his client. Upon the confirmation of his secretary from BPI that the amount was already credited to his account, he subsequently issued 5 checks to the land owners and left to the US for a vacation the next day. He was thereafter informed by his secretary that the 5 checks were dishonored on June 16, 1997, the same day the 5 checks were issued and he incurred charges because of it. On June 19, 1997, the payees again presented the 5 checks and this time they were honored rendering the account of Suarez to be sufficiently funded. Suarez demanded an apology from BPI and for the reversal of the charges incurred from his account. His checks were apparently returned due to “drawn against insufficient funds” (DAIF) instead of “drawn against uncollected deposit (DAUD). Upon examination of the checks, Suarez insisted that the checks were tampered where the DAIF mark on the check was changed to DAUD. He sued the bank for damages and rejected the bank’s offer to reverse the charges from his account. The RTC ruled in favor of Suarez awarding him actual, moral and exemplary damages and attorney’s fees. On appeal, the Court of Appeals reaffirmed the RTC decision after establishing that there were indeed intercalations made on the DAIF marking to make it appear as DAUD. The court finds it proper to award moral and exemplary damages because Suarez could be criminally held liable in violation of BP 22 if the reason of dishonoring the check is due to DAIF. Although he may not have been liable for a criminal prosecution, he also suffered humiliation from his client because the land owners aborted their transaction thinking he is not capable of fulfilling his obligation. The act of reversion of the bank on the charges imposed on Suarez’s account is tantamount to their admission of having committed blunder in handling the account of their client. The bank however insisted that Suarez is liable for paying the charges mandated by Philippine Clearing House Rules and Regulations (PCHRR).




Issue:

hether or not BPI was negligent in handling the account of their client?

Whether or not the award for damages is proper?

Whether or not Suarez could be held liable to pay for the service charge imposed by PCHRR?

Ruling:

The Supreme Court held that for BPI to be held negligent in handling the account of Suarez it should be established whether BPI actually made the confirmation on the same-day crediting of the RCBC check on his account. He solely based such confirmation from his secretary who failed to identify the male bank employee who allegedly made the assurance on such fact and they failed to prove whether the said bank employee is authorized by the bank to disclose information about their depositor’s bank account to someone other than the depositor himself. The same-day clearing of check deposits requires approval from the bank officials which Suarez failed to prove of having secured such approval to the proper bank officials. Thus, BPI is not estopped from dishonoring the checks for inadequate funds on his account because the RCBC check remained uncleared at that time. The bank was not negligent in handling the account of Suarez.

The court finds it improper to award Suarez for moral and actual damages. To qualify for moral damages it must be shown that the plaintiff suffered injury, the act or omission primarily as the proximate cause of such injury. Suarez failed to establish that the injury he suffered is due to the erroneous marking on the check. The humiliation he sustained from his client is the result of a justified dishonoring of his checks. The bank was justified in dishonoring the check therefore it is not liable for actual damages as well. BPI was also justified in debiting the charges incurred by Suarez from his account due to the dishonored check pursuant to the PCHRR rules. The banking institution however is impressed with public interest. It should therefore observe the highest degree of diligence in handling the account of their clients. Suarez has the right to expect such high degree of care on his account therefore he is entitled to a nominal damage of P75,000.