FIRST DIVISION
[G.R. No. 179385. October 21, 2015.]
LAND BANK OF THE PHILIPPINES, petitioner,vs. VAL P. CONCHA, JR., and SOCORRO V. CONCHA, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated October 21, 2015 which reads as follows:
"G.R. No. 179385 — LAND BANK OF THE PHILIPPINES, Petitioner, v. VAL P. CONCHA, JR., and SOCORRO V. CONCHA, Respondents.
Land Bank of the Philippines (LBP) seeks the review and undoing of the decision promulgated on July 31, 2007 in CA-G.R. CV No. 68685, 1 whereby the Court of Appeals (CA) affirmed the judgment rendered on July 3, 2000 by the Regional Trial Court (RTC) in Dipolog City adjudging LBP liable for damages to the respondents, its clients. 2
The factual and procedural antecedents are summarized by the CA, as follows:
. . . on February 17, 1998, plaintiff-appellees Val P. Concha, Jr., a retired government employee, a former Chief of Police of Dipolog City and former Assistant Provincial Prosecutor of Zamboanga del Norte, and his wife, Socorro V. Concha, (hereinafter, appellees) opened with the Malvar Street, Dipolog City Branch of defendant-appellant Land Bank of the Philippines (hereinafter, appellant) Current Account No. 0512-0045-71, a non-interest bearing joint checking account. Whereupon, appellant issued to appellees a checkbook with 50 checks numbered consecutively from 5321926 to 5321975.
. . . on March 4, 1998, appellee Val Concha (Val) issued Check No. 5321926 in the amount of P12,367.55 to a Mrs. Gloria Nunag, which, upon presentment, was honored by appellant bank. On April 13, appellee Socorro Concha (Socorro) issued Check No. 5321927 in the amount of P750.00 in favor of a Dr. Jessie Tiu as payment for the latter's medical services. On April 28, Val received a letter from Dr. Tiu informing him that Check No. 5321927 was dishonored for the reason that appellees' account was closed. aCIHcD
In their Complaint, appellees alleged that, upon opening their current account, they had initially deposited P30,000.00. Thus, Val, a quadruple heart by-pass patient suffering from hypertension and diabetes, upon receiving Dr. Tiu's letter, which threatened legal action on the bounced check, "was shocked, bewildered and pained beyond relief at this unexpected turn of events and angrily confronted [Socorro] for indiscriminately issuing checks which possibly exhausted the funds of their newly opened joint current account . . . Socorro also flew into a rage because [Check No. 5321927] in the stated amount of P750.00 was the first check she issued and she could not believe their [account] was already exhausted or closed by reason of said check". Supposedly to establish if their account had really been closed, Socorro issued Check No. 5321928 to Val Ian Concha, III, which appellant subsequently honored. Alleging that appellant's negligence had subjected them to public ridicule, social humiliation, besmirched reputation, tortured feeling, serious anxiety and sleepless nights, appellees prayed for P1,000,00.00 n as moral damages, P50,000.00 exemplary damages, and P100,000.00 as litigation expenses and attorney's fees.
In its Answer, appellant, while admitting the material allegations in the Complaint, raised the defense that when appellees opened the subject account they deposited only P20,000.00 and that sometime thereafter Socorro came to the bank to deposit an additional P10,000.00. When she did so, appellant informed her that the joint account was non-interest bearing and an interest-bearing current account was available to her. Socorro signified her intention to change to the latter account and a new account, Current Account No. 0512-0045-80, was opened and the original account closed. This was allegedly with the full knowledge of Socorro who was asked by appellant to surrender her checkbook under the old account. This she never did. Appellant claims that the first check (Check No. 5321926) was honored because "the bank was aware of the internal agreement". When the second check (Check No. 5321927) was presented for encashment, "it was inadvertently marked closed account" because "the regular bookkeeper was on leave and his function was temporarily taken over by an alternate bookkeeper who was not aware of the arrangement". Appellant contended that Socorro's failure to turn over the checkbook under the original account was the proximate cause of the dishonor of the second check and that the bank was not aware of its error until the filing of the case. Whereupon, appellant's personnel visited appellees to apologize for the incident. Appellant prayed for P1,000,000.00 in moral damages and P500,000.00 in exemplary and corrective damages.
The parties proceeded to trial on the main issue of whether, in dishonoring Check No. 5321927, appellant had been negligent.
For appellees, Val Concha testified on the allegations in the Complaint. Dr. Tiu corroborated Val's testimony pertaining to his being the Concha family doctor and to the dishonor of the check Socorro Concha had issued in payment of his fees.
For the appellant, the following testified:
Land Bank Assistant Manager Domiciana Junsay testified that it was she who attended to appellees when they opened their regular checking account with appellant bank on February 17, 1998. After they signed the signature card and deposited P20,000.00 into their new account, she explained to them that the regular checking account was non-interest bearing but that the bank had another checking account that yielded interest. Mrs. Concha seemed to be interested. After the regular account was processed, a checkbook was issued to them. When they left, Junsay informed the New Accounts Clerk about the interest of Mrs. Concha in changing her regular account to an interest-bearing account but the Clerk told her that the checkbook that had just been issued had to be surrendered to be replaced by another one. Junsay then instructed the new accounts clerk to inform Mrs. Concha that her current regular account has to be closed and to request her to surrender the checkbook for replacement.
The New Accounts Clerk, Charito Laygo testified that when Mrs. Concha returned the following day (February 18) to deposit the additional sum of P10,000.00 to their regular current account, she (Laygo) told Mrs. Concha that they had to cancel her old account and so asked her to surrender the checkbook issued the previous day. Mrs. Concha promised to do so. The P10,000.00 was thus deposited in the new account (Account No. 0512-0045-80). Likewise, the P20,000.00 deposited by appellees the previous day was transferred to the said new account. The checkbook had not been surrendered.
Bookkeeper Gabriel Chiong testified that, sometime in February 1998, Junsay instructed him to "accommodate all the checks of Mrs. Concha". Thus, when "he received Check No. 53219[26] in the amount of P12,367.55, he debited the check to the new account of Socorro Concha". He did so despite the fact that "their computer screen displayed 'no record' which means that there is no existing account or that the account is already closed" because he remembered the instruction to honor the check".
Land Bank Accountant Caroline Sosa testified that, on April 22, 1998, she assisted the alternate Bookkeeper in posting incoming checks. When she received Check No. 5321927 in the amount of P750.00, she checked with the computer which displayed "no record found". Hence, she stamped the check "account closed".
Appellee Socorro Concha rebutted the testimonies of the bank officials. She denied that Charito Lagyo had talked to her on the proposal to change her account into an interest-bearing one. In fact, she never met any employee of appellant bank by that name. There was in fact no such proposal or any occasion when appellant proposed the change to her. When she received the statement of her account after she had issued the check to Dr. Tiu, appellant never informed her about such a change. Junsay never called her up to inform her that her regular current account was short of cash. 3 cHaCAS
After trial, the RTC ruled in favor of the respondents upon noting that the petitioner had failed to ensure the surrender of the check book corresponding to Account No. 512-0045-71 upon the opening of the respondents' new account (Account No. 0512-0045-80); that the petitioner had also failed to instruct Socorro not to issue checks from the check book corresponding to Account No. 512-0045-71; that the petitioner did not instruct the substitute bookkeeper to accommodate in the meantime the checks that could have been issued by Socorro under Account No. 512-004-71; and that the various notable circumstances showed the petitioner's negligence. However, the RTC held that Socorro had been guilty of contributory negligence considering that she had been informed of the need to surrender the check book issued under Account No. 512-0045-71 as the condition for the opening of the new account; that the incident would not have transpired had she surrendered the check book; and that, accordingly, her contributory negligence mitigated the petitioner's liability.
Thus, the RTC disposed:
WHEREFORE, judgment is hereby rendered ordering the defendant Bank to pay plaintiffs the sum of P50,000.00 as moral damages, P10,000.00 as exemplary damages and P10,000.00 as attorney's fees plus costs.
SO ORDERED.4
On appeal, the CA affirmed the RTC by finding that the petitioner had been grossly negligent in unilaterally closing the respondents' account. It declared that there was no evidence of authorization from the respondents for the petitioner to close Account No. 512-0045-71; and that the mitigation of the liability of the petitioner was not because of Socorro's contributory negligence, because there was none, but because of the excessiveness of the claim of the respondents. 5
In its present appeal, the petitioner contends that the CA erred in holding it liable for damages arising from the dishonor of Socorro's Check No. 5321927.
The Court upholds the assailed judgment.
To begin with, the Court cannot review and reverse the factual findings of the lower courts in order to absolve the petitioner of its liability arising from the dishonor of Check No. 5321927. Such review entails the re-evaluation and re-assessment of the records, a function that the Court cannot discharge due to its not being a trier of facts. As such, the factual findings of the CA, which affirmed those of the trial court, are already final and conclusive on the Court. 6
Secondly, the conclusion of the CA on the negligence of the petitioner was substantiated by the records. The petitioner had the duty to observe the highest degree of diligence 7 because the banking business was impressed with public trust by virtue of the fiduciary nature of the relationship between the bank and its depositors. 8 Thus, the petitioner was under the strict obligation to treat with meticulous care the account of the respondents as its depositors. 9 The degree of responsibility, care and trustworthiness expected of its officials and employees is far greater than the degree to be expected of the officers and employees of another enterprise. 10 It is the fiduciary nature of banking that requires high standards of integrity and performance from the banks. 11
The petitioner did not render appropriate justification for its closure of Account No. 512-0045-71 without the check book released under such account being first surrendered. Also, the petitioner did not show that Socorro had authorized the change of the account from a non-interest bearing account to an interest bearing account. Such disregard of prevailing basic banking practices constituted gross negligence on the part of the petitioner. 12
In our view, the RTC and the CA rightly assessed damages against the petitioner. We have held that the bank that breaches its obligations under its contract with its depositors is liable for moral damages if the bank acted fraudulently or in bad faith, or with gross negligence amounting to bad faith, or in wanton disregard of its contractual obligations. 13 Likewise, the imposition of exemplary damages 14 and attorney's fees 15 was proper under the circumstances.
WHEREFORE, the Court DENIES the petition for review on certiorari; and ORDERS the petitioner to pay the costs of suit.
SO ORDERED."PEREZ, J., on official business; VELASCO, JR., J., acting member per S.O. No. 2253 dated October 14, 2015.
Very truly yours,
(SGD.) EDGAR O. ARICHETADivision Clerk of Court
Footnotes
1. Rollo, pp. 28-44; penned by Associate Justice Romulo V. Borja, with the concurrence of Associate Justice Mario V. Lopez and Associate Justice Elihu A. Ybañez.
2. Id. at 47-65.
3. Id. at 29-33.
4. Id. at 65.
5. Supra note 1.
6. Castillo v. Court of Appeals, G.R. No. 106472, August 7, 1996, 260 SCRA 374, 375.
7. Philippine National Bank v. Cheah Chee Chong, G.R. No. 170865, April 25, 2012, 671 SCRA 49, 62.
8. Philippine National Bank v. F.F. Cruz and Co., Inc., G.R. No. 173259, July 25, 2011, 654 SCRA 333, 341.
9. Equitable PCI Bank v. Tan, G.R. No. 165339, August 23, 2010, 628 SCRA 520, 541.
10. Philippine National Bank v. F.F. Cruz & Co., supra note 8.
11. Section 2, Republic Act 8791 (General Banking Law of 2000).
12. Philippine National Bank v. Cheah Chee Chong, supra note 7.
13. Cagungun v. Planter's Development Bank, G.R. No. 158674, Ocotber 17, 2005, 473 SCRA 259, 271-272.
14. Article 2232, Civil Code.
15. Article 2208, Civil Code.
n Note from the Publisher: Copied verbatim from the official copy.