Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 170984 January 30, 2009
SECURITY !N" !N# TRUST COMP!NY, Petitioner,
vs.
RI$!% COMMERCI!% !N"ING CORPOR!TION, Respondent.
! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
G.R. No. 170987 January 30, 2009
RI$!% COMMERCI!% !N"ING CORPOR!TION, Petitioner,
vs.
SECURITY !N" !N# TRUST COMP!NY, Respondent.
D E C I S I O N
&UISUMING, Acting C.J.:
"efore us are opposin# parties$ petitions for revie% of the Decision
&
dated March '(,
'))* and Resolution
'
dated Dece+ber &', '))* of the Court of ,ppeals in C,!-.R. CV
No. ./01/. 2he t%o petitions are herein consolidated as the3 ste+ fro+ the sa+e set of
factual circu+stances.
2he facts, as found b3 the trial and appellate courts, are as follo%s4
On 5anuar3 (, &(1&, Securit3 "an6 and 2rust Co+pan3 7S"2C8 issued a +ana#er$s chec6
for P1 +illion, pa3able to 9C,S:,9 as proceeds of the loan #ranted to -uidon
Construction and Develop+ent Corporation 7-CDC8. On the sa+e da3, the P1!+illion
chec6, alon# %ith other chec6s, %as deposited b3 Continental Manufacturin# Corporation
7CMC8 in its Current ,ccount No. )&)(!)''111 %ith Ri;al Co++ercial "an6in#
Corporation 7RC"C8. I++ediatel3, RC"C honored the P1!+illion chec6 and allo%ed
CMC to %ithdra% the sa+e.
0
On the net ban6in# da3, 5anuar3 &', &(1&, -CDC issued a 9Stop Pa3+ent Order9 to
S"2C, clai+in# that the P1!+illion chec6 %as released to a third part3 b3 +ista6e.
Conse<uentl3, S"2C dishonored and returned the +ana#er$s chec6 to RC"C. 2hereafter,
the chec6 %as returned bac6 and forth bet%een the t%o ban6s, resultin# in auto+atic
debits and credits in each ban6$s clearin# balance.
=
On >ebruar3 &0, &(1&, RC"C filed a co+plaint
*
for da+a#es a#ainst S"2C %ith the then
Court of >irst Instance of Ri;al, "ranch ??II. Said case %as doc6eted as Civil Case No.
&)1& and later transferred to the Re#ional 2rial Court 7R2C8 of Ma6ati Cit3, "ranch &=0.
Mean%hile, follo%in# the rules of the Philippine Clearin# :ouse, RC"C and S"2C
stopped returnin# the chec6s to each other. "3 %a3 of a te+porar3 arran#e+ent pendin#
resolution of the case, the P1!+illion chec6 %as e<uall3 divided bet%een, and credited to,
RC"C and S"2C.
.
On Ma3 (, '))), the R2C of Ma6ati Cit3, "ranch &=0, rendered a Decision
/
in favor of
RC"C. 2he dispositive portion of the decision reads4
PREMISES CONSIDERED, the Court renders @ud#+ent in favor of plaintiff ARC"CB
and finds defendant S"2C @ustl3 liable to ARC"CB and sentences AS"2CB to pa3 ARC"CB
the a+ount of4
&. PhP=,))),))).)) as and for actual da+a#esC
'. PhP&)),))).)) as and for attorne3$s feesC and,
0. the costs.
SO ORDERED.
1
On appeal, the Court of ,ppeals affir+ed %ith +odification the above Decision, to %it4
'(ERE)ORE, the appealed Decision is !))IRME# %ith MO#I)IC!TION.
,ppellant Securit3 "an6 and 2rust Co. shall pa3 appellee Ri;al Co++ercial "an6in#
Corporation not onl3 the principal a+ount of P=,))),))).)) but also interest thereon at
7.D8 per annu+ coverin# appellee$s unearned inco+e on interest co+puted fro+ the ti+e
of filin# of the co+plaint on >ebruar3 &0, &(1& to the date of finalit3 of this Decision.
>or lac6 of factual and le#al basis, the a%ard of attorne3$s fees is #E%ETE#.
SO OR#ERE#.
(
No% for our resolution are the opposin# parties$ petitions for revie% on certiorari of the
abovecited decision. On its part, S"2C alle#es the follo%in# to support its petition4
I.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN RE>FSIN- 2O
,PPEG 2:E E,H "EC,FSE, IN I2S OPINION, 2O DO SO HOFED 9RESFE2 IN
,N IN5FS2ICE.9
II.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN :OEDIN- 2:,2
2O DE2ERMINE H:E2:ER OR NO2 , ",NI IS , :OEDER IN DFE COFRSE,
ONEG 2:E NE-O2I,"EE INS2RFMEN2S E,H NEED "E ,PPEIED 2O 2:E
E?CEFSION O> CEN2R,E ",NI RFEES ,ND RE-FE,2IONS.
III.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN >,IEIN- 2O
NO2E 2:,2 2:E M,N,-ER$S C:ECI IN JFES2ION H,S ,CCEP2ED >OR
DEPOSI2 "G 2:E RC"C ,ND H,S NO2 ENC,S:ED "G 2:E P,GEE.
IV.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN >,IEIN- 2O
CONSIDER 2:,2 PRIOR 2O 2:E DEPOSI2 O> 2:E C:ECIS HOR2: PhP*0
MIEEION, RC"C H,S :OEDIN- =0 C:ECIS 2O2,EIN- P=(,)&/,..(... DR,HN
"G CON2INEN2,E M,NF>,C2FRIN- CORPOR,2ION ,-,INS2 I2S CFRREN2
,CCOFN2 H:EN 2:E ",E,NCE O> 2:,2 ,CCOFN2 H,S , MERE P*/0..'.
V.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN >,IEIN- 2O
CONSIDER 2:,2 2:E C:ECIS DEPOSI2ED HI2: RC"C 2:E PROCEEDS O>
H:IC: HERE IMMEDI,2EEG HI2:DR,HN 2O :ONOR 2:E =0 C:ECIS
2O2,EIN- P=(,)&/,..(... DR,HN "G CON2INEN2,E M,NF>,C2FRIN-
CORPOR,2ION ON I2S CFRREN2 ,CCOFN2 HERE NO2 ,EE M,N,-ER$S
C:ECIASB "F2 INCEFDED ORDIN,RG C:ECIS IN 2:E 2O2,E ,MOFN2 O>
PhP&*,=0.,&=).1&.
VI.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN >,IEIN- 2O
CONSIDER 2:,2 E,C: O> 2:E =0 C:ECIS DR,HN "G 2:E CON2INEN2,E
M,NF>,C2FRIN- CORPOR,2ION HERE ,EE :ONORED "G RC"C ON 2:E
",SIS O> , MI?2FRE O> ,EE 2:E M,N,-ER$S ,ND ORDIN,RG C:ECIS
DEPOSI2ED ON 2:,2 D,G O> ( 5,NF,RG &(1&.
VII.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN :OEDIN- 2:,2
2:E RC"C IS , :OEDER IN DFE COFRSE.
VIII.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN :OEDIN- 2:,2
S"2C H,I2ED >OR 2:REE 708 D,GS 2O NO2I>G 2:E RC"C O> 2:E S2OP
P,GMEN2 ORDER.
I?.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN :OEDIN- 2:,2
S"2C S:OFED :,VE >IRS2 ,CJFIRED PERSON,E INOHEED-E O> 2:E
>,C2S H:IC: -,VE RISE 2O 2:E REJFES2 >OR 2:E S2OP P,GMEN2 ORDER
"E>ORE :ONORIN- SFC: REJFES2.
?.
2:E :ONOR,"EE COFR2 O> ,PPE,ES RFEED CORREC2EG IN RE>FSIN- 2O
:OED S"2C EI,"EE >OR D,M,-E CE,IMS ",SED SOEEEG ON
SPECFE,2ION, CON5EC2FRE ,ND -FESSHORI.
?I.
2:E :ONOR,"EE COFR2 O> ,PPE,ES RFEED CORREC2EG IN :OEDIN-
2:,2 RC"C IS NO2 EN2I2EED 2O E?EMPE,RG D,M,-ES.
?II.
2:E :ONOR,"EE COFR2 O> ,PPE,ES ERRED -R,VEEG IN :OEDIN- S"2C
EI,"EE >OR 2:E ,22ORNEG$S >EES O> RC"C ASICB.
&)
On RC"C$s part, the follo%in# issues are sub+itted for resolution4
I.
H:E2:ER OR NO2 S"2C IS EI,"EE >OR 2:E M,N,-ER$S C:ECI I2 ISSFED.
II.
H:E2:ER OR NO2 RC"C IS EN2I2EED 2O COMPENS,2ORG D,M,-ES
EJFIV,EEN2 2O 2:E IN2ERES2 INCOME EOS2 ,S , RESFE2 O> 2:E
IEEE-,E RE>FS,E O> S"2C 2O :ONOR I2S OHN M,N,-ER$S C:ECI, ,S
HEEE ,S >OR E?EMPE,RG D,M,-ES ,ND ,22ORNEG$S >EES.
&&
Si+pl3 stated, %e find that in these consolidated petitions, the le#al issues for our
resolution are4 7&8 Is S"2C liable to RC"C for the re+ainin# P= +illionK and 7'8 Is
S"2C liable to pa3 for lost interest inco+e on the re+ainin# P= +illion, ee+plar3
da+a#es and attorne3$s feesK
RC"C avers that the +ana#er$s chec6 issued b3 S"2C is substantiall3 as #ood as the
+one3 it represents because b3 its peculiar character, its issuance has the effect of an
advance acceptance. RC"C clai+s that it is a holder in due course %hen it credited the
P1!+illion +ana#er$s chec6 to CMC$s account. ,ccordin#l3, RC"C asserts that S"2C$s
refusal to honor its obli#ation @ustifies RC"C clai+ for lost interest inco+e, ee+plar3
da+a#es and attorne3$s fees.
On the other hand, S"2C contends that RC"C violated Monetar3 "oard Resolution No.
'')' of the Central "an6 of the Philippines +andatin# all ban6s to verif3 the #enuineness
and validit3 of all chec6s before allo%in# dra%in#s of the sa+e. S"2C insists that RC"C
should bear the conse<uences of allo%in# CMC to %ithdra% the a+ount of the chec6
before it %as cleared.
&'
He shall rule on the issues seriati+.
,t the outset, it +ust be noted that the <uestioned chec6 issued b3 S"2C is not @ust an
ordinar3 chec6 but a +ana#er$s chec6. , +ana#er$s chec6 is one dra%n b3 a ban6$s
+ana#er upon the ban6 itself. It stands on the sa+e footin# as a certified chec6,
&0
%hich
is dee+ed to have been accepted b3 the ban6 that certified it.
&=
,s the ban6$s o%n chec6,
a +ana#er$s chec6 beco+es the pri+ar3 obli#ation of the ban6 and is accepted in
advance b3 the act of its issuance.
&*
In this case, RC"C, in i++ediatel3 creditin# the a+ount of P1 +illion to CMC$s
account, relied on the inte#rit3 and honor of the chec6 as it is re#arded in co++ercial
transactions. Hhere the <uestioned chec6, %hich %as pa3able to 9Cash,9 appeared re#ular
on its face, and the ban6 found nothin# unusual in the transaction, as the dra%er usuall3
issued chec6s in bi# a+ounts +ade pa3able to cash, RC"C cannot be faulted in pa3in#
the value of the <uestioned chec6.
&.
In our considered vie%, S"2C cannot escape liabilit3 b3 invo6in# Monetar3 "oard
Resolution No. '')' dated Dece+ber '&, &(/(, prohibitin# dra%in#s a#ainst uncollected
deposits. >or %e +ust point out that the Central "an6 at that ti+e issued a Me+orandu+
dated 5ul3 (, &(1), %hich interpreted said Monetar3 "oard Resolution No. '')'. In its
pertinent portion, said Me+orandu+ reads4
9MEMOR,NDFM 2O ,EE ",NIS
5ul3 (, &(1)
>or the #uidance of all concerned, Monetar3 "oard Resolution No. '')' dated Dece+ber
0&, &(/( prohibitin#, as a +atter of polic3, dra%in# a#ainst uncollected deposit effective
5ul3 &, &(1), uncollected deposits representin# +ana#er$s cashier$sL treasurer$s chec6s,
treasur3 %arrants, postal +one3 orders and dul3 funded 9on us9 chec6s %hich +a3 be
per+itted at the discretion of each ban6, covers dra%in#s a#ainst de+and deposits as %ell
as %ithdra%als fro+ savin#s deposits.9
&/
2hus, it is clear fro+ the 5ul3 (, &(1) Me+orandu+ that ban6s %ere #iven the discretion
to allo% i++ediate dra%in#s on uncollected deposits of +ana#er$s chec6s, a+on# others.
Conse<uentl3, RC"C, in allo%in# the i++ediate %ithdra%al a#ainst the sub@ect
+ana#er$s chec6, onl3 eercised a prero#ative epressl3 #ranted to it b3 the Monetar3
"oard.
Moreover, neither Monetar3 "oard Resolution No. '')' nor the 5ul3 (, &(1)
Me+orandu+ alters the etraordinar3 nature of the +ana#er$s chec6 and the relative
ri#hts of the parties thereto. S"2C$s liabilit3 as dra%er re+ains the sa+e M b3 dra%in#
the instru+ent, it ad+its the eistence of the pa3ee and his then capacit3 to indorseC and
en#a#es that on due present+ent, the instru+ent %ill be accepted, or paid, or both,
accordin# to its tenor.
&1
Concernin# RC"C$s clai+ for lost interest inco+e on the re+ainin# P= +illion, this is
alread3 covered b3 the a+ount of da+a#es in the for+ of le#al interest of .D, based on
,rticle ''))
&(
and '')(
')
of the Civil Code of the Philippines, as a%arded b3 the Court of
,ppeals in its decision.
In addition to the above!+entioned a%ard of co+pensator3 da+a#es, %e also find +erit
in the need to a%ard ee+plar3 da+a#es in order to set an ea+ple for the public #ood.
2he ban6in# s3ste+ has beco+e an indispensable institution in the +odern %orld and
pla3s a vital role in the econo+ic life of ever3 civili;ed societ3. Hhether as +ere passive
entities for the safe!6eepin# and savin# of +one3 or as active instru+ents of business and
co++erce, ban6s have attained an ubi<uitous presence a+on# the people, %ho have
co+e to re#ard the+ %ith respect and even #ratitude and, above all, trust and confidence.
In this connection, it is i+portant that ban6s should #uard a#ainst in@ur3 attributable to
ne#li#ence or bad faith on its part. ,s repeatedl3 e+phasi;ed, since the ban6in# business
is i+pressed %ith public interest, the trust and confidence of the public in it is of
para+ount i+portance. Conse<uentl3, the hi#hest de#ree of dili#ence is epected, and
hi#h standards of inte#rit3 and perfor+ance are re<uired of it. S"2C havin# failed in this
respect, the a%ard of ee+plar3 da+a#es to RC"C in the a+ount of P*),))).)) is
%arranted.
'&
Pursuant to current @urisprudence, %ith the findin# of liabilit3 for ee+plar3 da+a#es,
attorne3$s fees in the a+ount of P'*,))).))
''
+ust also be a%arded a#ainst S"2C and in
favor of RC"C.
H:ERE>ORE, the assailed Decision dated March '(, '))* and Resolution dated
Dece+ber &', '))* of the Court of ,ppeals in C,!-.R. CV No. ./01/ is hereb3
!))IRME# %ith MODI>IC,2ION. Securit3 "an6 and 2rust Co+pan3 is ordered to
pa3 Ri;al Co++ercial "an6in# Corporation4 7&8 the re+ainin# P=,))),))).)), %ith le#al
interest thereon at si percent 7.D8 per annu+ fro+ the ti+e of filin# of the co+plaint on
>ebruar3 &0, &(1& to the date of finalit3 of this DecisionC 7'8 ee+plar3 da+a#es of
P*),))).))C and 708 attorne3$s fees of P'*,))).)).
No pronounce+ent as to costs.
SO OR#ERE#.
%EON!R#O !. &UISUMING
,ctin# Chief 5ustice
Chairperson
HE CONCFR4
REN!TO C. CORON!
N
,ssociate 5ustice
CONC(IT! C!RPIO MOR!%ES
,ssociate 5ustice
#!NTE O. TING!
,ssociate 5ustice
TERESIT! J. %EON!R#O*#E C!STRO
NN
,ssociate 5ustice
C E R 2 I > I C , 2 I O N
Pursuant to Section &0, ,rticle VIII of the Constitution, I certif3 that the conclusions in
the above Decision had been reached in consultation before the case %as assi#ned to the
%riter of the opinion of the Court$s Division.
%EON!R#O !. &UISUMING
,ctin# Chief 5ustice
)oo+no+,-
N
,dditional +e+ber in lieu of ,ssociate 5ustice Presbitero 5. Velasco, 5r. %ho is
abroad on official business.
NN
,dditional +e+ber in lieu of ,ssociate 5ustice ,rturo D. "rion %ho too6 no
part due to his bein# a for+er partner of one of the parties$ counsel.
&
Rollo 7-.R. No. &/)(1/8, pp. 0.!=1. Penned b3 ,ssociate 5ustice Ma#dan#al M.
De Eeon, %ith ,ssociate 5ustices Salvador 5. Valde;, 5r. and Mariano C. Del
Castillo concurrin#.
'
Id. at =(!*). Penned b3 ,ssociate 5ustice Ma#dan#al M. De Eeon, %ith
,ssociate 5ustices 5uan J. Enri<ue;, 5r. and Mariano C. Del Castillo concurrin#.
0
Id. at 0/.
=
Id.
*
Records, pp. &!*.
.
Rollo 7-.R. No. &/)(1/8, p. 01.
/
C, rollo, pp. (0!(.. Penned b3 ,ctin# Presidin# 5ud#e Salvador S. ,bad Santos.
1
Id. at (..
(
Rollo 7-.R. No. &/)(1=8, p. 11.
&)
Id. at '*.!'*1.
&&
Id. at &/1.
&'
Id. at '.=!'.(.
&0
Equitable PCI Bank v. Ong, -.R. No. &*.')/, Septe+ber &*, '))., *)' SCR,
&&(, &0'.
&=
2he Ne#otiable Instru+ents Ea% 7,ct No. ')0&8,
Sec. &1/. Certification of check; effect of. Hhere a chec6 is certified b3
the ban6 on %hich it is dra%n, the certification is e<uivalent to an
acceptance.
&*
International Corporate Bank v. Gueco, -.R. No. &=&(.1, >ebruar3 &', '))&,
0*& SCR, *&., *'1.
&.
Securit Bank !"ru#t Co$pan v. "riu$ph %u$ber an& Con#truction
Corporation, -.R. No. &'..(., 5anuar3 '&, &(((, 0)& SCR, *0/, **/.
&/
Rollo, 7-.R. No. &/)(1=8, p. '&1.
&1
2he Ne#otiable Instru+ents Ea% 7,ct No. ')0&8,
Sec. .&. Eiabilit3 of dra%er. O 2he dra%er b3 dra%in# the instru+ent
ad+its the eistence of the pa3ee and his then capacit3 to indorseC and
en#a#es that, on due present+ent, the instru+ent %ill be accepted, or paid,
or both, accordin# to its tenorP.
&(
,R2. '')). Inde+nification for da+a#es shall co+prehend not onl3 the value
of the loss suffered, but also that of the profits %hich the obli#ee failed to obtain.
')
,R2. '')(. If the obli#ation consists in the pa3+ent of a su+ of +one3, and the
debtor incurs in dela3, the inde+nit3 for da+a#es, there bein# no stipulation to
the contrar3, shall be the pa3+ent of the interest a#reed upon, and in the absence
of stipulation, the le#al interest, %hich is si percent per annu+.
'&
See "an6 of the Philippine Islands v. Roas, -.R. &./10, October &*, '))/, *0.
SCR, &.1, &/'.
''
Civil Code, ,rt. '')1. In the absence of stipulation, attorne3$s fees and
epenses of liti#ation, other than @udicial costs, cannot be recovered, ecept4
7&8 Hhen ee+plar3 da+a#es are a%ardedC

In all cases, the attorne3$s fees and epenses of liti#ation +ust be
reasonable.
"an6 of the Philippine Islands v. Roas, supra.