CASES ON TORTS- DAMAGES
redundancy premium/separation pay, on top of his
LENN MORALES, Petitioner, v. METROPOLITAN
BANK AND TRUST COMPANY, Respondent.
FACTS
PEREZ, J.:
Filed pursuant to Rule 45 of the 1997 Rules on Civil
Procedure, the Petition for Review on Certiorari at
bench primarily assails the Decision1ςrνll dated 20
September 2007 rendered by the then Nineteenth
Division of the Court of Appeals (CA) in CA-G.R. SP
No. 02405,2ςrνll the dispositive portion of which
states:
WHEREFORE, the petition for certiorari filed by
Morales is hereby xxx DENIED for lack of merit.
Accordingly, the assailed decision and resolution of
the NLRC dated June 28, 2006 and September 15,
2006, are hereby UPHELD respectively.
SO ORDERED.3ςrνll
The facts are not in dispute.
Sometime in August 1992, petitioner Lenn Morales
was hired by Solidbank as Teller for its Rizal Avenue
Branch in Tacloban City. With said banks merger with
respondent Metropolitan Bank & Trust Company
(Metrobank ) in September 2000, the latter, as
surviving entity, absorbed Morales and assigned him
to its Customer Service Relations-Reserve Pool
(CSR-RP) which was composed of employees who,
with no permanent places of assignment, acted as
relievers whenever temporary vacancies arise in
other branches. Designated as reliever for
Metrobanks Main Branch in Tacloban City, Morales
was likewise assigned to work in the same capacity
for the banks other Visayas Region III branches. From
a job with a grade four rank, Morales was
subsequently promoted in April 20034ςrνll to the
position of Customer Service Representative (CSR),
with a job grade 6 rank and a gross monthly salary of
P16,250.00. It was while occupying the latter position
that Morales was informed by Federico Mariano , the
Senior Manager of Metrobanks Tacloban City Main
Branch, that he was covered by the banks Special
Separation Program (SSP) and that, in accordance
therewith, his employment was going to be terminated
on the ground of redundancy.5ςrνll
On 27 August 2003, Morales was furnished a copy of
a memorandum of the same date informing him that,
after a review of its organizational structure,
Metrobank had found his services redundant and will
consider him separated effective 1 October 2003.
Assured that his termination was through no fault of
his own but mainly due to business exigencies and
developments in the banking industry, Morales was
‚rνll
notified that he shall be paid the following: (a) a
entitlements under the banks retirement plan; (b)
proportionate 13th month pay; (c) cash conversion of his
outstanding vacation and sick leave credits; and, if
applicable, (d) the return of his Provident Fund
contributions; and, (e) cash surrender value of his
Insurance.6ςrνll Having signed a form on the same day
signifying his unqualified and unconditional acceptance of
Metrobanks decision to terminate his
employment,7ςrνll Morales executed on 10 November
2003 a Release, Waiver and Quitclaim acknowledging
receipt of the sum of P158,496.95 as full payment of his
monetary entitlements.8ςrνll
On 20 February 2004, Morales filed against Metrobank a
complaint for illegal dismissal, separation pay,
backwages, moral and exemplary damages as well as
attorneys fees.9ςrνll Together with a similar complaint
filed by one Raymundo Piczon , Morales complaint was
docketed as NLRC RAB Case No. 2-0046-04 before the
Regional Arbitration Branch No. VIII of the National Labor
Relations Commission (NLRC). In support of his
complaint, Morales alleged that, despite being an organic
member of the Rizal Avenue Branch, he was assigned to
Metrobanks Zamora St. Branch in view of his having
signed a petition against the driver of the armored car who
was eventually dismissed. With his actions suddenly
closely watched and blown out of proportion, Morales
claimed that he started receiving directives for him to
explain his unauthorized absences and out of town
allowances which, far from being infractions, were simply
the results of miscommunication. Arbitrarily singled out for
termination, he was supposedly forced to sign the
Release, Waiver and Quitclaim by Mariano who
embarrassed him by announcing that his services had
already been terminated and that he was no longer
required to report for work.10ςrνll
In its position paper, Metrobank averred that it had
adopted the SSP since 1995 as a way of addressing
worsening economic conditions and stiff competition with
strategies designed to make its operations efficient but
cost-effective. Towards said end, it claimed to have
embarked on a major component of SSP called the
Headcount Rationalization Program (HRP) which, taking
into consideration the volume of its transactions vis-vis
the massive computerization and automation of its
operating systems, targeted the reduction of its existing
workforce by 10% by the end of 2003. Having created
and/or consolidated branches, centralized loan
processing and adopted a branch headcount reduction
scheme, Metrobank asserted that it identified 291
positions as superfluous, utilizing as criteria such factors
as performance, work attitude and cost. Among the areas
where the HRP was conducted was Visayas Region III
which was directed to reduce the manpower of its 13
branches spread out in three provinces by 15 employees.
Affected was its eight-man reserve pool which was
composed of former Solidbank employees who acted as
relievers whenever temporary vacancies occurred in the
Regions branches.
Metrobank further asserted that the volume of the
Regions transactions required only six employees in
the reserve pool, thereby rendering two positions
superfluous. As a member of the reserve pool,
Morales allegedly had a record of unauthorized
absences as well as complaints for undesirable and
unprofessional conduct from various Branch Heads.
In view of the absence of redeployment opportunities
for him, Metrobank claimed Morales was included in
the SSP and was eventually considered for
termination on the ground of redundancy. Aside from
the fact that Morales was duly informed of the
managements decision more than one month ahead
of his actual severance from service, Metrobank
claimed to have served the Department of Labor and
Employment (DOLE) the required Establishment
Termination Report on 29 August 2003. Likewise
accorded the separation benefits included in the SSP,
Morales supposedly expressed his unqualified and
unconditional acceptance of his termination and,
upon receipt of his monetary entitlements, voluntarily
executed the aforesaid Release, Waiver and
Quitclaim. Claiming good faith in the implementation
of its redundancy program, Metrobank prayed for the
dismissal of Morales complaint for lack of
merit.12ςrνll
On 11 November 2005, Executive Labor Arbiter
Jesselito Latoja rendered a decision finding Morales
termination from service illegal on the ground that his
promotion in April 2003 contradicted Metrobanks
claim that his poor work performance contributed to
his inclusion in the SSP. Brushing aside the Release,
Waiver and Quitclaim for having been prepared by
Metrobank, the Labor Arbiter ruled that Morales was
entitled to reinstatement without loss of seniority
rights, backwages assessed at P390,005.00 at the
time of the rendition of the decision, 13th month pay
in the sum of P32,500.50, quarterly bonus in the sum
of P130,002.00 and CBA signing bonus in the sum of
P120,000.00. On the ground that Morales dismissal
from service was tainted with bad faith and malice, the
Labor Arbiter likewise held Metrobank liable to pay
said employee P100,000.00 in moral damages,
P100,000.00 in exemplary damages and attorneys
fees which, at 10% of the total award, was computed
at P87,250.65. From the grand total of P959,757.15
in monetary awards, the Labor Arbiter decreed the
deduction of the sum of P158,496.95 which Morales
had acknowledged to have received by way of
separation benefits.13ςrνll
On appeal, the foregoing decision was reversed and
set aside in the 20 July 2006 Decision rendered by
the Fourth Division of the NLRC in NLRC Case No. V-
000200-2006. Finding that Metrobank validly
implemented the HRP on a nationwide scale in
connection with the SSP, the NLRC ruled that
Morales termination in accordance therewith belied
the latters claim that he was arbitrarily singled out for
dismissal from service. Given that the reserve pool in
Visayas Region III was overstaffed, Morales was
legitimately terminated in view of his poor work
performance and negative attitude which, at one point,
gravely jeopardized the operations of the branch to which
he was temporarily assigned. Applying the general rule
that the characterization of an employees services as
redundant is a management prerogative which should not
be interfered with absent showing of abuse, the NLRC
also upheld the validity of the Release, Waiver and
Quitclaim on the ground that the P158,496.95 Morales
received represented a reasonable settlement of his
claims.14ςrνll Morales motion for reconsideration of the
decision was denied for lack of merit in the NLRCs
Resolution dated 15 September 2006.15ςrνll
Aggrieved, Morales filed the Rule 65 Petition for Certiorari
docketed before the CA Cebu City Station as CA-G.R. SP
No. 02405, on the ground that the NLRC gravely abused
its discretion in reversing the Labor Arbiters decision.
Maintaining that Metrobanks claim of redundancy was
belied by its hiring of one Abigail Perez as replacement
for his position, Morales also argued that Metrobank did
not comply with the notice requirement for a termination
of employment on the ground of redundancy. 16ςrνll On
20 September 2007, however, the CAs Nineteenth
Division rendered the herein assailed decision, denying
the foregoing petition for lack of merit. Upholding the
validity of Morales termination from employment, the CA
discounted the grave abuse of discretion imputed against
the NLRC for ruling that Metrobanks redundancy program
legitimately entailed reduction of its workforce to make it
more responsive to the actual demands and necessities
of its business. Considering that Abigail Perez was hired
as a clerk on a permanent status for the banks Ormoc
Branch, the CA also ruled that said employee could not
be considered as Morales replacement. Finding that
Metrobank complied with the noticerequirement under
Article 283 of the Labor Code, the CA ultimately sustained
the validity of the Release, Waiver and Quitclaim
executed by Morales.17ςrνll
Dissatisfied, Morales filed the Rule 45 petition for review
at bench,18ςrνll seeking the reversal of the CAs 20
September 2007 Decision on the following grounds:
ISSUE:
(a)
THE COURT OF APPEALS ERRONEOUSLY UPHELD
THE DISMISSAL OF HEREIN PETITIONER ON
AUTHORIZED CAUSE OF REDUNDANCY WHICH WAS
MADE KNOWN TO PETITIONER ON THE SAME DATE
HE WAS INFORMED HE [WAS] NO LONGER
REQUIRED TO REPORT FOR OFFICE AND WITHOUT
SUBJECTING OTHER SIMILARLY SITUATED
EMPLOYEES OF THE SAME POSITION AND
RESPONSIBILITIES TO THE STANDARD OF
TERMINATION ON REDUNDANCY
(b)
THE COURT OF APPEALS ERRONEOUSLY
UPHELD THE DISMISSAL OF HEREIN
PETITIONER THOUGH THE DISMISSAL IS
TAINTED WITH ARBITRARINESS AND BAD FAITH
AS FOUND BY THE LABOR ARBITER AS THE
HEREIN PETITIONER WAS EVEN PROMOTED
FIVE MONTHS BEFORE HIS TERMINATION
CONTRARY TO THE CRITERIA IN THE SSP OR
HRP ON NON-PROMOTION WITHIN THE PERIOD
OF FIVE YEARS
(c)
THE COURT OF APPEALS ERRONEOUSLY
UPHELD THE DISMISSAL ON AMBIVALENT AND
EQUIVOCAL PROGRAMS WHICH ON ANALYSIS
ARE ACTUALLY RETRENCHMENT PROGRAM[S]
AND THE REQUISITES FOR VALID TERMINATION
BY RETRENCHMENT NOT HAVING BEEN
COMPLIED WITH
(d) THE COURT OF APPEALS ERRONEOUSLY
UPHELD THE VALIDITY OF THE QUITCLAIM
ALTHOUH IT IS APPARENT THAT THE
PETITIONER WAS COMPELLEDH TO ACCEDE TO
IT BY ECONOMIC REASONS.
HELD:
We find the petition bereft of merit.
One of the authorized causes for the dismissal of an
employee,20ςrνll redundancy exists when the
service capability of the workforce is in excess of what
is reasonably needed to meet the demands of the
business enterprise.21ςrνll A position is redundant
when it is superfluous, and superfluity of a position or
positions could be the result of a number of factors,
such as the overhiring of workers, a decrease in the
volume of business or the dropping of a particular line
or service previously manufactured or undertaken by
the enterprise.22ςrνll Time and again, it has been
ruled that an employer has no legal obligation to keep
more employees than are necessary for the operation
of its business.23ςrνll For the implementation of a
redundancy program to be valid, however, the
employer must comply with the following requisites:
(1) written notice served on both the employees and
the DOLE at least one month prior to the intended
date of termination of employment; (2) payment of
separation pay equivalent to at least one month pay
for every year of service; (3) good faith in abolishing
the redundant positions; and (4) fair and reasonable
criteria in ascertaining what positions are to be
declared redundant and accordingly
abolished.24ςrνll
Contrary to the first and second errors Morales
imputes against the CA, our perusal of the record
shows that Metrobank has more than amply proven
compliance with the third and fourth of the above-
enumerated requisites for the validity of his termination
from service on the ground of redundancy. Under the SSP
which Metrobank adopted in 1995, employees who
voluntarily gave up their employment were paid the
amount of separation pay they were entitled under the law
and a premium equivalent to 50%-75% of their salaries. It
appears that employees "whose work evaluation showed
consistent poor performance and/or those who had not
been promoted for five years" were also considered
primary candidates for optional separation from
service.25ςrνll In order to meet the challenges of the
business and to make its operations efficient and cost
effective, however, it was shown that Metrobank further
conducted a bank-wide operational review and study
which resulted in the adoption in March 2003 of the HRP,
a major component of the SSP which was designed to
reduce its workforce by 10%. Entailing various initiatives
like conversion of regular branches into mini-branches,
consolidation of branches, centralization of loans
processing and branch headcount reduction, the HRP
yielded 291 employees who could no longer be
redeployed, fifteen (15) of whom belonged to Visayas
Region III.26ςrνll
In implementing a redundancy program, it has been ruled
that the employer is required to adopt a fair and
reasonable criteria, taking into consideration such factors
as (a) preferred status; (b) efficiency; and (c)
seniority,27ςrνll among others. Consistent with this
principle, Metrobank established that, as a direct result of
the adoption of the HRP, it was determined that the
volume of transactions in Visayas Region III required the
further reduction of its eight-man reserve pool by two
employees.28ςrνll As these employees had no
permanent place of assignment and merely acted as
relievers whenever temporary vacancies arise in other
branches, they were the most logical candidates for
inclusion in the SSP. Already lacking preferred status in
Metrobanks hierarchy of positions, Morales was included
in the SSP because of his poor work performance which
reportedly caused complaints from the branches where
he was temporarily assigned as reliever. 29ςrνll To our
mind, the foregoing circumstances contradict Morales
claim that he was arbitrarily singled out for termination by
Metrobank which, having validly determined the surplus
in its manpower complement, appears to have
appropriately identified him as a candidate for the SSP on
account of his work attitude.
As evidence of the bad faith which supposedly attended
his termination from service, Morales argues that his
promotion in April 2003 should have excluded him from
the coverage of the SSP. Aside from the fact that his
promotion rendered his position less cost-effective,
however, Morales loses sight of the fact that it was
precisely his work performance subsequent to his
promotion which was cited by Metrobank as reason for his
inclusion in the SSP. In his 19 May 2003 Memorandum,
R.D. Barrientos , the Branch Manager of Metrobanks
Baybay Branch, reported that Morales caused delay in the
processing of over-the-counter transactions on a busy
Monday when he was absent
himself without an approved leave. Since it was
Morales third absence while he was assigned at said
branch as reliever of an employee who was on
maternity leave, Barrientos even requested for
another reliever on the ground that the risk of losing
clients as a consequence of Morales unpredictability
which was inimical to the banks
interest.30ςrνllDespite being advised against being
absent from work on Mondays and Fridays in view
of the expected volume of transactions on said
days,31ςrνll it appears, however, that Morales
obstinately went ahead with his planned absence
and simply apprised a colleague and the branch
security guard of his decision not to report for work
on 19 May 2003.32ςrνll
Given Morales previous record of not reporting for
work for one whole week without prior leave of
absence while assigned as reliever in its Borongan,
Samar Branch,33ςrνll we find that Metrobank
cannot be faulted for including him in the list of
employees covered by the SSP. The rule is settled
that "the determination that the employees services
are no longer necessary or sustainable and,
therefore, properly terminable for being redundant is
an exercise of business judgment of the
employer."34ςrνll "While it is true that management
may not, under the guise of invoking its prerogative,
ease out employees and defeat their constitutional
right to security of tenure,"35ςrνll the wisdom and
soundness of such characterization or decision is
not subject to discretionary review unless a violation
of law or arbitrary or malicious action is
shown.36ςrνll Against Morales bare assertion that
he was arbitrarily and maliciously terminated from
service, Metrobank was able to establish that its
action was based on the fair application of a criterion
established in connection with the implementation of
a well-thought redundancy program. For these
reasons, we find that the CA cannot be faulted for
upholding the NLRCs finding that Morales
termination pursuant to the SSP was valid.
Morales next insists that Metrobank failed to comply
in good faith with the notice requirement under
Article 283 of the Labor Code which allows the
employer to terminate the employment of any
employee due to redundancy by serving a written
notice on the worker and the DOLE at least one (1)
month before the intended date thereof. Intended to
enable the employee to prepare himself for the legal
battle to protect his tenure of employment and to find
other means of employment and ease the impact of
the loss of his job and his income,37ςrνll said notice
requirement is also designed to allow the DOLE to
ascertain the verity of the cause for the
termination.38ςrνll
As correctly determined by the CA, Metrobanks
compliance with this requirement is evident from its
service of the 27 August 2003 notice of termination
upon Morales on the same date, effective 1
October 2003 or 30 days after the date of saidBANK OF THE G.R. No. 167750
notice.39ςrνll On 29 August 2003, Metrobank similarlyPHILIPPINE ISLANDS,
served the DOLE with an Establishment Termination
Report, together with a list of the 43 employees about to
be terminated on the ground of redundancy, effective 1
October 2003.40ςrνllBy and of themselves, the notices of
termination Metrobank served to the DOLE and Morales
one month before their intended effectivity date
significantly belie the latters claim that he was told not to
report for work anymore immediately upon receipt thereof.
As proof of the bad faith and malice which supposedly
attended his separation from service, Morales asserted
that Mariano caused him great embarrassment by
announcing that he was no longer required to report for
work, within hearing distance of his colleagues. For one
who claims to have been immediately terminated from
employment, however, Morales quite distinctly indicated
in his 18 February 2004 complaint that he was dismissed
on 30 September 2003.41ςrνllReckoned from the service
of notice of termination upon Morales on 27 August 2003,
said admitted date of dismissal clearly confirms
Metrobanks compliance with the above-discussed one-
month prior notice that the law requires for severance
from service on the ground of redundancy. Neither are we
inclined to entertain Morales belated argument that the
real cause for his termination was retrenchment to
prevent losses and that Metrobank failed to establish the
requirements therefor. For one, said theory contradicts
Morales claim that he was dismissed from employment
for personal reasons, in a manner amounting to
constructive dismissal. For another, not having been
raised before the Labor Arbiter, the NLRC and the CA, it
stands to reason that Morales theory of termination to
preserve the viability of Metrobanks business cannot be
entertained for the first time in connection with the petition
at bench. Consistent with the principle that issues not
raised a quo cannot be raised for the first time on
appeal,42ςrνll points of law, theories and arguments not
brought to the attention of the CA need not and ordinarily
will not be considered by this Court.43ςrνll For a
reviewing court to allow otherwise would be offensive to
the basic rules of fair play, justice and due
process.44ςrνllMorales, finally, argues that the CA
erred in upholding the validity of the 10 November
2003 Release, Waiver and Quitclaim which he
supposedly signed out dire economic necessity. While
"it may be accepted as ground to annul a quitclaim if
the consideration is unconscionably low and the
employee was tricked into accepting it, dire necessity
is not, however, an acceptable ground for annulling
the release when it is not shown that the employee
has been forced to execute it."45 Not having ςrν ll
sufficiently proved that he was forced to sign said
Release, Waiver and Quitclaim, Morales cannot
expediently argue that quitclaims are looked upon
with disfavor and considered ineffective to bar claims
for the full measure of a workers legal rights. This
Court has held that not all quitclaims are per se
invalid or against public policy, except (1) where
there is clear proof that the waiver was wangled from
an unsuspecting or gullible person, or (2) where the
terms of settlement are unconscionable on their
face.46 These two instances are not present in this
ςrνll
case. WHEREFORE, premises considered, the
ςηαοbl ε ν ιrυ αllα ω lιb rαr
petition is DENIED for lack of merit. SO ORDERED. ςrαl αωlιb rα r
Petitioner, Present:
CARPIO, J., Chairperson,
- versus - BRION,
DEL CASTILLO,
ABAD, and
PEREZ, JJ.
REYNALD R. SUAREZ, Promulgated:
Respondent. March 15, 2010
x-------------------------------------------------------------
----------------------------x
DECISION
CARPIO, J.:
The Case
This petition for review[1] assails the Decision
dated 30 November 2004[2] and Resolution
dated 11 April 2005 of the Court of Appeals in
CA-G.R. CV No. 76988, affirming the trial court's
decision of 18 October 2002 and denying
reconsideration.
The 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) Ermita Branch 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. In accordance with his
clients instruction, 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. Hence, on 16
June 1997, Suarezs client deposited a Rizal
Commercial Banking Corporation (RCBC)
check with a face value of P19,129,100,
representing the total consideration of the sales,
in BPI Pasong Tamo Branch to be credited to
Suarezs current account in BPI Ermita Branch.
Aware of the banking systems 3-day check
clearing policy,[3] 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.[4]
The next day, Suarez left for the United States
(U.S.) for a vacation. While Suarez was in the
U.S., 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. Suarezs secretary
further told him that the checks were dishonored
despite an assurance from RCBC, the drawee
bank for the sum of P19,129,100, that this
amount had already been debited from the
account of the drawer on 16 June 1997 and the
RCBC check was fully funded.
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 (which Suarezs client issued) 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 Fe Gregorius, then manager
of the BPI Ermita Branch, who requested a
meeting with him to explain BPIs side.However,
the meeting did not transpire.
Suarez sent another letter to BPI addressed to
its president, Xavier Loinaz. Consequently, BPI
representatives asked another meeting with
Suarez. During the meeting, the BPI officers
handed Suarez a letter, the relevant text of
which reads:
Dear Atty. Suarez:
Your letter to our President, Xavier P. Loinaz
dated 02 July 1997 was referred to us for
investigation and reply.
Our investigation discloses that when the Court, Branch 136, of Makati
checks you issued against your account were is AFFIRMED in toto.
received for clearing, the checks you deposited
were not yet cleared.Hence, the dishonor of the SO ORDERED.[7]
your checks.

We do not see much in your allegation that you

have suffered damages just because the reason
for the return was DAIF and not DAUD. In both
instances, there is a dishonor nonetheless.[5]
The Court of Appeals denied BPIs motion for
reconsideration in its 11 April 2005 Resolution.
Hence, this petition.

Upon Suarezs request, BPI delivered to him the

The Court of Appeals Ruling
five checks which he issued on 16 June 1997.

Suarez claimed that the checks were tampered

In affirming the trial courts decision, the Court of
with, specifically the reason for the dishonor,
Appeals ruled as follows:
prompting him to send another letter informing

BPI of its act of falsification by making it appear

Contrary to its contention, plaintiff-appellees
that it marked the checks with drawn against
evidence convincingly established the latters
uncollected deposit (DAUD) and not drawn
entitlement to damages, which was the direct
against insufficient fund (DAIF). In reply, BPI
result of defendant-appellants negligence in
offered to reverse the penalty charges which
handling his account. It was duly proven that
were debited from his account, but denied
after his client deposited a check in the amount
Suarezs claim for damages. Suarez rejected
of P19,129,100.00 on 16 June 1997, it was
BPIs offer.
confirmed through plaintiff-appellees secretary
Claiming that BPI mishandled his account
through negligence, Suarez filed with the by an employee of defendant-appellant bank
Regional Trial Court a complaint for damages,
that the aforesaid amount was, on the same day,
docketed as Civil Case No. 98-574.
already credited to his account. It was on the
The Regional Trial Court, Makati City, Branch
136 rendered judgment in favor of Suarez, thus: basis of this confirmation which made plaintiff-

WHEREFORE, judgment is hereby rendered appellee issue five (5) checks in the amount
ordering defendant bank to pay the following
of P19,129,100.00 to different payees. And
amounts:
despite RCBCs assurance that the
The costs of litigation.
aforementioned amount had already been
SO ORDERED.[6]
debited from the account of the drawer bank,

defendant-appellant bank still dishonored the

BPI appealed to the Court of Appeals, which five (5) checks for DAIF as reason when the

affirmed the trial courts decision. The dispositive various payees presented them for payment on

portion of the 30 November 2004 Decision of the 17 June 1997.

Court of Appeals reads: It was also proven that defendant-appellant

bank through its employee inadvertently marked
WHEREFORE, premises the dorsal sides of the checks as DAIF instead
considered, the instant of DAUD. A closer look at the checks would
appeal is DISMISSED. The indicate that intercalations were made marking
decision dated 18 October the acronym DAIF thereon to appear as
2002 of the Regional Trial DAUD. Although the intercalation was obvious
in the P12 million check, still the fact that there
was intercalation made in the said check cannot DAMAGES, ATTORNEYS FEES AND
be denied. It bears to stress that there lies a big COSTS OF LITIGATION.[9]
difference between a check dishonored for
reasons of DAUD and a check dishonored for
DAIF. A check dishonored for reasons of DAIF
would unduly expose herein plaintiff-appellee to The Courts Ruling
criminal prosecution for violation of B.P. 22 while
a check dishonored for reasons of DAUD would
not. Thus, it was erroneous on the part of
defendant-appellant bank to surmise that The petition is partly meritorious.
plaintiff-appellee would not suffer damages
anyway for the dishonored checks for reasons
of DAUD or DAIF because there was dishonor As a rule, this Court is not a trier of facts.
nonetheless.
However, there are well- recognized exceptions
While plaintiff-appellee had been spared from
any criminal prosecution, his reputation, to this rule, one of which is when certain relevant
however, was sullied on account of the
facts were overlooked by the lower court, which
dishonored checks by reason of DAIF. His
transaction with the would be sellers of the facts, if properly appreciated, would justify a
property in Tagaytay was aborted because the
latter doubted his capacity to fulfill his obligation different conclusion from the one reached in the
as buyer of their [properties.] As the agent of the
true buyers, he had a lot of explaining to do with assailed decision.[10] Reviewing the records, we
his client. In short, he suffered humiliation. find that the lower courts misappreciated the
Defendant-appellant bank also contends that
plaintiff-appellee is liable to pay the charges evidence in this case.
mandated by the Philippine Clearing House
Rules and Regulations (PCHRR).

If truly these charges were mandated by the Suarez insists that BPI was negligent in handling
PCHRR, defendant-appellant bank should not his account when BPI dishonored the checks he
have attempted to renege on its act of debiting
the charges to plaintiff-appellees account. In its issued to various payees on 16
letter dated 28 July 1997 addressed to plaintiff-
appellee, the former has offered to reverse June 1997, despite the RCBC check deposit
these charges in order to mitigate the effects of
the returned checks on the latter. This, to the made to his account on the same day to cover
mind of the court, is tantamount to an admission the total amount of the BPI checks.
on their (defendant-appellant banks employees)
part that they have committed a blunder in
handling plaintiff-appellees account. Perforce, Negligence is defined as the omission to do
defendant-appellant bank should return the
amount of the service charges debited to something which a reasonable man, guided
plaintiff-appellee. It is basic in the law governing
upon those considerations which ordinarily
human relations that no one shall be unjustly
enriched at the expense of others.[8] regulate the conduct of human affairs, would do,

or the doing of something which a prudent man

The Issues and reasonable man could not do.[11]The

question concerning BPI's negligence,

In its Memorandum, BPI raised the following however, depends on whether BPI indeed
issues:
confirmed the same-day crediting of the RCBC
A. WHETHER [BPI] WAS NEGLIGENT IN
HANDLING THE ACCOUNT OF [SUAREZ]; checks face value to Suarezs BPI account.

B. WHETHER [SUAREZ] IS LIABLE TO PAY THE

SERVICE CHARGES IMPOSED BY
THE PHILIPPINE CLEARING HOUSE
CORPORATION; and
C. WHETHER [BPI] IS LIABLE TO PAY
[SUAREZ] MORAL AND EXEMPLARY
In essence, Suarez impresses upon this Court
that BPI is estopped[12] 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. Suarez points out that he relied on this
confirmation for the issuance of his checks to the
owners of the Tagaytay properties. In other
words, Suarez claims that BPI made a
representation that he had sufficient available
funds to cover the total value of his checks.
Suarez is mistaken.
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.[13] Suarezs secretary, Garaygay,
testified that she was able to talk to a BPI male
employee about the same-day crediting of the
RCBC check.[14] However, 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
a P19,129,100 check requires approval
designated bank official or officials, and not any
bank official can grant such approval. Clearly,
Suarez failed to prove that BPI confirmed the
same-day crediting of the RCBC check, or that
BPI assured Suarez that he had sufficient
available funds in his account. Accordingly, 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,[15] and
disregard the banking industrys 3-day check
clearing policy, Suarez failed to convincingly
show his entitlement to such privilege. As BPI
pointed out, Suarez had no credit or bill
purchase line with BPI which would qualify him
to the exceptions to the 3-day check clearing
policy.[16]
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 precisely because BPI was justified
in dishonoring the checks for lack of available
funds in Suarezs account.[17]
However, BPI mistakenly marked the
dishonored checks with drawn against
insufficient funds (DAIF), instead of drawn
against uncollected deposit (DAUD). DAUD
means that the account has, on its face,
sufficient funds but not yet available to the
drawer because the deposit, usually a check,
had not yet been cleared.[18] DAIF, on the other
hand, is a condition in which a depositors
balance is inadequate for the bank to pay a
check.[19] In other words, in the case of DAUD,
the depositor has, on its face, sufficient funds in
of his account, although it is not available yet at the
time the check was drawn, whereas in DAIF, the
of 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.[20] It is clear therefore that, contrary to
BPIs contention, DAIF differs from DAUD. Now,
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: (1)
THERE IS AN INJURY WHETHER PHYSICAL,
MENTAL OR PSYCHOLOGICAL CLEARLY
SUSTAINED BY THE CLAIMANT; (2) THE
CULPABLE ACT OR OMISSION IS
FACTUALLY ESTABLISHED; (3) THE
WRONGFUL ACT OR OMISSION OF THE
DEFENDANT IS THE PROXIMATE CAUSE OF
THE INJURY SUSTAINED BY THE CLAIMANT;
AND (4) THE AWARD OF DAMAGES IS
PREDICATED ON ANY OF THE CASES
STATED IN ARTICLE 2219[21] OF THE CIVIL
CODE.[22]
IN THE PRESENT CASE, SUAREZ FAILED TO
ESTABLISH THAT HIS CLAIMED INJURY
WAS PROXIMATELY CAUSED BY THE MUST AT ALL TIMES MAINTAIN A HIGH

ERRONEOUS MARKING OF DAIF ON THE LEVEL OF METICULOUSNESS AND SHOULD

CHECKS. PROXIMATE CAUSE HAS BEEN GUARD AGAINST INJURY ATTRIBUTABLE

DEFINED AS ANY CAUSE WHICH, IN TO NEGLIGENCE OR BAD FAITH ON ITS

NATURAL AND CONTINUOUS SEQUENCE, PART.[26] SUAREZ HAD A RIGHT TO EXPECT

UNBROKEN BY ANY EFFICIENT SUCH HIGH LEVEL OF CARE AND

INTERVENING CAUSE, PRODUCES THE DILIGENCE FROM BPI. SINCE BPI FAILED

RESULT COMPLAINED OF AND WITHOUT TO EXERCISE SUCH DILIGENCE, SUAREZ IS

WHICH WOULD NOT HAVE ENTITLED TO NOMINAL DAMAGES[27] TO

OCCURRED.[23] THERE IS NOTHING IN VINDICATE SUAREZS RIGHT TO SUCH HIGH

SUAREZS TESTIMONY WHICH DEGREE OF CARE AND DILIGENCE. THUS,

CONVINCINGLY SHOWS THAT THE WE AWARD SUAREZ P75,000.00 NOMINAL

ERRONEOUS MARKING OF DAIF ON THE DAMAGES.

CHECKS PROXIMATELY CAUSED HIS

ALLEGED PSYCHOLOGICAL OR SOCIAL ON THE AWARD OF ACTUAL DAMAGES, WE

INJURIES. SUAREZ MERELY TESTIFIED FIND THE SAME WITHOUT ANY

THAT HE SUFFERED HUMILIATION AND BASIS. CONSIDERING THAT BPI LEGALLY

THAT THE PROSPECTIVE CONSOLIDATION DISHONORED THE CHECKS FOR BEING

OF THE TITLES TO THE TAGAYTAY DRAWN AGAINST UNCOLLECTED DEPOSIT,

PROPERTIES DID NOT MATERIALIZE DUE BPI WAS JUSTIFIED IN DEBITING THE

TO THE DISHONOR OF HIS CHECKS,[24] NOT PENALTY CHARGES AGAINST SUAREZS

DUE TO THE ERRONEOUS MARKING OF ACCOUNT, PURSUANT TO THE RULES OF

DAIF ON HIS CHECKS. HENCE, SUAREZ HAD THE PHILIPPINE CLEARING HOUSE

ONLY HIMSELF TO BLAME FOR HIS HURT CORPORATION,[28] TO WIT:

FEELINGS AND THE UNSUCCESSFUL

TRANSACTION WITH HIS CLIENT AS THESE IN VIEW OF THE FOREGOING, THE COURT

WERE DIRECTLY CAUSED BY THE DEEMS IT UNNECESSARY TO RESOLVE THE

JUSTIFIED DISHONOR OF THE CHECKS. IN OTHER ISSUES RAISED IN THIS CASE.

SHORT, SUAREZ CANNOT RECOVER WHEREFORE, THE COURT GRANTS THE

COMPENSATORY DAMAGES FOR HIS OWN PETITION IN PART. THE COURT SETS

NEGLIGENCE.[25] ASIDE THE 30 NOVEMBER 2004 DECISION

AND 11 APRIL 2005 RESOLUTION OF THE

COURT OF APPEALS IN CA-G.R. CV NO. 76988,

WHILE THE ERRONEOUS MARKING OF
AND DELETES THE AWARD OF ALL
DAIF, WHICH BPI BELATEDLY RECTIFIED,
DAMAGES AND FEES. THE COURT AWARDS
WAS NOT THE PROXIMATE CAUSE OF
TO RESPONDENT REYNALD R. SUAREZ
SUAREZS CLAIMED INJURY, THE COURT
NOMINAL DAMAGES IN THE SUM
REMINDS BPI THAT ITS BUSINESS IS
OF P75,000.00.
AFFECTED WITH PUBLIC INTEREST. IT
 The trial court rendered its decision in favor of
SO ORDERED. petitioners. The trial court held respondent civilly
liable for the death of Alfred under Article 2180 in
relation to Article 2176 of the Civil Code. Under the
Civil Code, respondent is liable for the damages
caused by Matibag on the occasion of the
Alfredo Pacis and Cleopatra Pacis vs performance of his duties, unless respondent
Morales proved that he observed the diligence of a good
Facts: petitioners Alfredo P. Pacis and father of a family to prevent the damage. The trial
Cleopatra D. Pacis (petitioners) filed with court held that respondent failed to observe the
the trial court a civil case for damages required diligence when he left the key to the
against respondent Jerome Jovanne drawer containing the loaded defective gun
Morales (respondent). Petitioners are without instructing his employees to be careful in
the parents of Alfred Dennis Pacis, Jr. handling the loaded gun. Respondent appealed to
(Alfred), a 17-year old student who died the Court of Appeals, which reversed the trial
in a shooting incident inside the Top Gun court's Decision and absolved respondent from
Firearms and Ammunitions Store (gun civil liability under Article 2180 of the Civil Code.
store) in Baguio City. Respondent is the The Court of Appeals held that respondent cannot
owner of the gun store. The bullet which be held civilly liable since there was no employer-
killed Alfred Dennis Pacis was fired from employee relationship between respondent and
a gun brought in by a customer of the Matibag. The Court of Appeals found that Matibag
gun store for repair. With Alfred Pacis at was not under the control of respondent with
the time of the shooting were Aristedes respect to the means and methods in the
Matibag and Jason Herbolario. They performance of his work. There can be no
were sales agents of the defendant, and employer-employee relationship where the
at that particular time, the caretakers of element of control is absent. Thus, Article 2180 of
the gun store. The gun was left by the Civil Code does not apply in this case and
defendant Morales in a drawer of a table respondent cannot be held liable. Hence this
located inside the gun store. Defendant petition for review.
Morales was in Manila at the time. His Issue: WON respondent-employer is liable under
employee Armando Jarnague, who was Article 2180 of the Civil Code.
the regular caretaker of the gun store
was also not around. He left earlier and Held: Yes. This case for damages arose out of the
requested sales agents Matibag and accidental shooting of petitioners' son. Under
Herbolario to look after the gun store Article 1161 10 of the Civil Code, petitioners may
while he and defendant Morales were enforce their claim for damages based on the civil
away. Jarnague entrusted to Matibag liability arising from the crime under Article 100 11
and Herbolario a bunch of keys used in of the Revised Penal Code or they may opt to file
the gun store which included the key to an independent civil action for damages under the
the drawer where the fatal gun was kept. Civil Code. In this case, instead of enforcing their
It appears that Matibag and Herbolario claim for damages in the homicide case filed
later brought out the gun from the drawer against Matibag, petitioners opted to file an
and placed it on top of the table. independent civil action for damages against
Attracted by the sight of the gun, the respondent whom they alleged was Matibag's
young Alfred Dennis Pacis got hold of employer. Petitioners based their claim
the same. Matibag asked Alfred Dennis
for damages under Articles 2176 and 2180 of the
Pacis to return the gun. The latter followedCivil
andCode. Unlike the subsidiary liability of the
employer under Article 103 of the Revised Penal
handed the gun to Matibag. It went off, the bullet
Code, the liability of the employer, or any person
hitting the young Alfred in the head. A criminal
case for homicide was filed against Matibag for that matter, under Article 2176 of the Civil
Code is primary and direct, based on a person's
before branch VII of this Court. Matibag, however,
own negligence.
was acquitted of the charge against him because This case involves the
accidental discharge of a firearm inside a gun
of the exempting circumstance of "accident" under
Art. 12, par. 4 of the Revised Penal Code. store.
By Under PNP Circular No. 9, entitled the
"Policy
agreement of the parties, the evidence adduced in on Firearms and
the criminal case for homicide against Matibag
was reproduced and adopted by them as part Ammunition
of Dealership/Repair," a person who is
their evidence in the instant case. in the business of purchasing and selling of
firearms and ammunition must maintain basic
security and safety requirements of a gun dealer, respondent Stephen Huang and own the
otherwise his License to Operate Dealership will red 1991 Toyota Corolla GLI Sedan with
be suspended or canceled. Unlike the ordinary
affairs of life or business which involve little or no plate number PTT 775 (car).
risk, a business dealing with dangerous
weapons requires the exercise of a higher
degree of care. As a gun store owner, These two vehicles figured in a
respondent is presumed to be knowledgeable
road accident on December 20, 1996 at
about firearms safety and should have known
never to keep a loaded weapon in his store to around 10:30 p.m. within the
avoid unreasonable risk of harm or injury to
others. Respondent has the duty to ensure that municipality of Taguig, Metro
all the guns in his store are not loaded. Firearms
should be stored unloaded and separate from Manila. Both were traversing the C-5
ammunition when the firearms are not needed Highway, north bound, coming from the
for ready-access defensive use. With more
reason, guns accepted by the store for repair general direction of Alabang going to Pasig
should not be loaded precisely because they are
defective and may cause an accidental City. The car was on the left innermost lane
discharge such as what happened in this case. while the truck was on the next lane to its
Respondent was clearly negligent when he
accepted the gun for repair and placed it inside right, when the truck suddenly swerved to
the drawer without ensuring first that it was not
loaded. In the first place, the defective gun its left and slammed into the front right side
should have been stored in a vault..
of the car. The collision hurled the car over
Furthermore, it was not shown in this case
whether respondent had a License to Repair the island where it hit a lamppost, spun
which authorizes him to repair defective firearms
to restore its original composition or enhance or around and landed on the opposite
upgrade firearms. Clearly, respondent did not
exercise the degree of care and diligence lane. The truck also hit a lamppost, ran over
required of a good father of a family, much less the car and zigzagged towards, and finally
the degree of care required of someone dealing
with dangerous weapons, as would exempt him stopped in front of Buellah Land Church. At
from liability in this case.
the time of the accident, petitioner Del
MERCURY DRUG G.R. No. Rosario only had a Traffic Violation Receipt
CORPORATION VS. 172122
SPOUSES HUANG (TVR). His drivers license had been
confiscated because he had been
previously apprehended for reckless
PUNO, C.J.:
driving.

Petitioner Mercury Drug

The car, valued at P300,000.00,
Corporation (Mercury Drug) is the
was a total wreck. Respondent Stephen
registered owner of a six-wheeler 1990
Huang sustained massive injuries to his
Mitsubishi Truck with plate number PRE
spinal cord, head, face, and
641 (truck). It has in its employ petitioner
lung. Despite a series of operations,
Rolando J. del Rosario as
respondent Stephen Huang is paralyzed
driver. Respondent spouses Richard and
for life from his chest down and requires
Carmen Huang are the parents of
continuous medical and rehabilitation
 0) actual
treatment. Respondents fault petitioner damages;
Del Rosario for committing gross 2. As
compensatory
negligence and reckless imprudence while damages:
driving, and petitioner Mercury Drug for a. Twenty
Three
failing to exercise the diligence of a good
Million
father of a family in the selection and Four
Hundred
supervision of its driver. Sixty One
Thousand
, and
In contrast, petitioners allege that Sixty-Two
Pesos
the immediate and proximate cause of the (P23,461,
062.00) fo
accident was respondent Stephen Huangs
r life care
recklessness. According to petitioner Del cost of
Stephen;
Rosario, he was driving on the left
b. Ten
innermost lane when the car bumped the Million
Pesos
trucks front right tire. The truck then (P10,000,
000.00) a
swerved to the left, smashed into an electric
s and for
post, crossed the center island, and lost or
impaired
stopped on the other side of the earning
capacity
highway. The car likewise crossed over the
of
center island and landed on the same Stephen;

portion of C-5. Further, petitioner Mercury 3. Four Million

Pesos
Drug claims that it exercised due diligence (P4,000,000.0
0) as moral
of a good father of a family in the selection damages;
and supervision of all its employees. 4. Two Million
Pesos
(P2,000,000.0
The trial court, found petitioners 0) as
exemplary
Mercury Drug and Del Rosario jointly and damages; and
severally liable to pay respondents actual, 5. One Million
Pesos
compensatory, moral and exemplary (P1,000,000.0
0) as
damages, attorneys fees, and litigation
attorneys fees
expenses and litigation
expense.[4]
1. Two Million
Nine Hundred
On February 16, 2006, the Court of
Seventy
Three Appeals affirmed the decision of the trial
Thousand
Pesos court but reduced the award of moral
(P2,973,000.0
damages to P1,000,000.00. The appellate
court also denied the motion for innermost left lane, while the lighter vehicl
reconsideration filed by petitioners. e was at its right.

Dr. Daza testified that given the foregoing

ISSUE: Whether or not the
assumptions, if the lighter vehicle hits the
petitioner commited gross negligence (and
right front portion of the heavier vehicle, the
the proper amount of damages)
general direction of the light vehicle after

RULING OF THE COURT: We the impact would be to the right side of the

affirm the findings of the trial court and the heavy vehicle, not the other way

appellate court that petitioner Del Rosario around. The truck, he opined, is more

was negligent. Del Rosario could not difficult to move as it is heavier. It is the car,

precisely tell which part of the truck was hit the lighter vehicle, which would move to the

by the car,[6] despite the fact that the truck right of, and away from the truck. Thus,

was snub-nosed and a lot higher than the there is very little chance that the car will

car. Petitioner Del Rosario could not also move towards the opposite side, i.e., to the

explain why the car landed on the opposite left of the truck. Worse still, petitioner Del

lane of C-5 which was on its left side. He Rosario further admitted that after the

said that the car did not pass in front of him impact, he lost control of the truck and

after it hit him or under him or over him or failed to apply his brakes. Considering that

behind him.[7] If the truck were really at the the car was smaller and lighter than the six-

left lane and the car were at its right, and wheeler truck, the impact allegedly caused

the car hit the truck at its front right side, the by the car when it hit the truck could not

car would not have landed on the opposite possibly be so great to cause petitioner to

side, but would have been thrown to the lose all control that he failed to even step

right side of the C-5 Highway. Noteworthy on the brakes. Petitioner Del Rosario failed

on this issue is the testimony of Dr. Marlon to do what a reasonable and prudent man

Rosendo H. Daza, an expert in the field of would have done under the circumstances.

physics which reported that 1. Two

We now come to the liability of
vehicles collided; 2. One vehicle is ten
petitioner Mercury Drug as employer of Del
times heavier, more massive than the
Rosario. Articles 2176 and 2180 of the Civil
other; 3. Both vehicles were moving in
Code provide:
the same direction and at the same speed
Art.
of about 85 to 90 kilometers per hour; 2176. Whoever by act or
4. The heavier vehicle was driving at the omission causes damage
to another, there being
fault or negligence, is
obliged to pay for the
 damage done. Such fault
or negligence, if there is no Petitioner Mercury Drug likewise
pre-existing contractual
relation between the failed to show that it exercised due
parties, is called a quasi-
diligence on the supervision and discipline
delict and is governed by
the provisions of this over its employees. In fact, on the day of
Chapter.
Art. 2180. The the accident, petitioner Del Rosario was
obligation imposed by
driving without a license. He was holding a
article 2176 is demandable
not only for ones own acts TVR for reckless driving. He testified that
or omissions, but also for
those of persons for whom he reported the incident to his superior, but
one is responsible.
nothing was done about it. He was not
xxx
The owners and suspended or reprimanded.[15] No
managers of an
disciplinary action whatsoever was taken
establishment or
enterprise are likewise against petitioner Del Rosario. We
responsible for damages
caused by their employees therefore affirm the finding that petitioner
in the service of the
branches in which the Mercury Drug has failed to discharge its
latter are employed or on
the occasion of their burden of proving that it exercised due
functions.
diligence in the selection and supervision of
xxx
its employee, petitioner Del Rosario.

The liability of the employer under

Art. 2180 of the Civil Code is direct or
immediate. It is not conditioned on a prior
recourse against the negligent employee,
We now consider the damages
which respondents should recover from the
petitioners.

or a prior showing of insolvency of such

The trial court awarded the
employee. It is also joint and solidary with
following amounts:
the employee.[11] It also appears that
1. Two Million Nine
petitioner Mercury Drug does not provide Hundred Seventy-
for a back-up driver for long trips. At the Three Thousand
Pesos
time of the accident, petitioner Del Rosario (P2,973,000.00) actua
l damages;
has been out on the road for more than
thirteen hours, without any
2. As compensatory
alternate. Mrs. Caamic testified that she damages:
does not know of any company policy a. Twenty-Three
[14] Million Four
requiring back-up drivers for long trips.
Hundred Sixty
One Thousand,
and Sixty-Two
Pesos
 (P23,461,062.00)
for life care cost of who attended to respondent Stephen are
Stephen; one in their prognosis that his chances of
b. Ten Million
Pesos walking again and performing basic body
(P10,000,000.00) functions are nil. For the rest of his life, he
as and for lost or
impaired earning will need continuous rehabilitation and
capacity of
Stephen; therapy to prevent further complications

3. Four Million Pesos such as pneumonia, bladder and rectum

(P4,000,000.00) as
infection, renal failure, sepsis and severe
moral damages;
4. Two Million Pesos bed sores, osteoporosis and fractures, and
(P2,000,000.00) as other spinal cord injury-related
exemplary damages;
and conditions. He will be completely
5. One Million Pesos dependent on the care and support of his
(P1,000,000.00) as
attorneys fees and family. We thus affirm the award
litigation expense.
of P23,461,062.00 for the life care cost of
respondent Stephen Huang, based on his
With regard to actual damages,
average monthly expense and the actuarial
Art. 2199 of the Civil Code provides that
computation of the remaining years that he
[E]xcept as provided by law or by stipulation
is expected to live; and the conservative
one is entitled to an adequate
amount of P10,000,000.00, as reduced by
compensation only for such pecuniary loss
the trial court, for the loss or impairment of
suffered by him as he has duly proved x x
his earning capacity,[17] considering his
x. In the instant case, we uphold the finding
age, probable life expectancy, the state of
that the actual damages claimed by
his health, and his mental and physical
respondents were supported by
condition before the accident.
receipts. The amount of P2,973,000.00
represented cost of hospital expenses,
The award of moral damages is
medicines, medical services and
aimed at a restoration, within the limits of
supplies, and nursing care services
the possible, of the spiritual status quo
provided respondent Stephen from
ante.[20] Moral damages are designed to
December 20, 1996, the day of the
compensate and alleviate in some way the
accident, until December 1998.
physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation,
Petitioners are also liable for all
wounded feelings, moral shock, social
damages which are the natural and
humiliation, and similar injury unjustly
probable consequences of the act or
caused a person. Although incapable of
omission complained of.[16] The doctors
pecuniary computation, they must be
proportionate to the suffering KAPUNAN, J.:

inflicted.[21] The amount of the award bears FACTS OF THE CASE:

no relation whatsoever with the wealth or
Vicente Ty AND Carmen Ty were
means of the offender. charged with the crime of kidnapping and
failure to return a minor in an information
filed by 2nd Assistant City Prosecutor of
On the matter of exemplary Kalookan City. Both accused were
arrested, and then arraigned on October
damages, Art. 2231 of the Civil Code 27, 1992 when they pleaded not guilty to
provides that in cases of quasi-delicts, the crime charged. And was found guilty
beyond reasonable doubt of the crime of
exemplary damages may be granted if the kidnapping a minor and failure to return the
same as defined and penalized by Article
defendant acted with gross 270 of the Revised Penal Code and hereby
sentences them to suffer imprisonment of
negligence. The records show that at the
reclusion perpetua. The accused are
time of the accident, petitioner Del Rosario hereby ordered to pay the private
complainant the sum of P100,000.00 by
was driving without a license because he way of moral damages.
was previously ticketed for reckless
driving.The evidence also shows that he On November 18, 1987, complainant
Johanna Sombong brought her sick
failed to step on his brakes immediately daughter Arabella, then only seven (7)
after the impact. Had petitioner Del Rosario months old, for treatment to the Sir John
Medical and Maternity Clinic located at No.
done so, the injuries which respondent 121 First Avenue, Grace
Park, Kalookan City which was owned and
Stephen sustained could have been greatly operated by the accused-
appellants. Arabella was diagnosed to be
reduced. Wanton acts such as that
suffering bronchitis and diarrhea, thus
committed by petitioner Del Rosario need complainant was advised to confine the
child at the clinic for speedy
be suppressed; and employers like recovery. About three (3) days later,
Arabella was well and was ready to be
petitioner Mercury Drug should be more
discharged but complainant was not
circumspect in the observance of due around to take her home. A week later,
complainant came back but did not have
diligence in the selection and supervision of enough money to pay the hospital bill in the
amount of P300.00. Complainant likewise
their employees. The award of exemplary confided to accused-appellant Dr. Carmen
damages in favor of the respondents is Ty that no one would take care of the child
at home as she was working. She then
therefore justified. inquired about the rate of the nursery and
upon being told that the same was P50.00
per day, she decided to leave her child to
the care of the clinic
[G.R. No. 121519. October 30, 1996] nursery. Consequently, Arabella was
transferred from the ward to the nursery. [4]
Thereafter, hospital bills started to
mount and accumulate. It was at this time
PEOPLE OF THE PHILIPPINES, plaintiff- that accused-appellant Dr. Ty suggested to
appellee, vs. VICENTE TY and the complainant that she hire a yaya
CARMEN TY, accused- for P400.00 instead of the daily nursery fee
appellants. of P50.00. Complainant agreed, hence, a
yaya was hired. Arabella was then again
transferred from the nursery to the
extension of the clinic which served as
residence for the hospital staff.[5]
From then on, nothing was heard of
the complainant. She neither visited her
child nor called to inquire about her
whereabouts. Her estranged husband
came to the clinic once but did not get the
child. Efforts to get in touch with the
complainant were unsuccessful as she left
no address or telephone number where she
can be reached. This development
prompted Dr. Ty to notify the barangay
captain of the childs
abandonment.[6] Eventually, the hospital
staff took turns in taking care of Arabella.[7]
Sometime in 1989, two (2) years after
Arabella was abandoned by complainant,
Dr. Fe Mallonga, a dentist at the clinic,
suggested during a hospital staff
conference that Arabella be entrusted to a
guardian who could give the child the love
and affection, personal attention and caring
she badly needed as she was thin and
sickly. The suggestion was favorably
considered, hence, Dr. Mallonga gave the
child to her aunt, Lilibeth Neri.[8]
In 1992, complainant came back to
claim the daughter she abandoned some
five (5) years back.
When her pleas allegedly went
unanswered, she filed a petition for habeas
corpus. Said petition was however denied
due course and was summarily dismissed
without prejudice on the ground of lack of
jurisdiction. Thereafter, the instant criminal
case was filed against accused-appellants.
Complainant likewise filed an
administrative case for dishonorable
conduct against accused-appellant Dr.
Carmen Ty before the Board of Medicine of
the Professional Regulation
Commission. This case was subsequently
dismissed for failure to prosecute.
On October 13, 1992, complainant
filed a petition for habeas corpus with the
Regional Trial Court of Quezon City, this
time against the alleged guardians of her
daughter, namely, Marietta Neri Alviar and
Lilibeth Neri. On January 15, 1993, the trial
court rendered a decision granting the
petition and ordering the guardians to
immediately deliver the person of Cristina
Grace Neri to the complainant, the court
having found Cristina to be the
complainants child. On appeal to the Court
of Appeals, however, said decision was
reversed on the ground that the guardians
were not unlawfully withholding from the
complainant the rightful custody of Cristina
after finding that Cristina and complainants
daughter are not one and the same person.
In this appeal, accused-appellants would
want us to take a second look and resolve
the issue of whether or not they are guilty
of kidnapping and failure to return a
minor. Accused-appellants of course
contend that they are not guilty and the
Solicitor General agrees. In its
Manifestations and Motion in lieu of
Appellees Brief, the Office of the Solicitor
General recommends their acquittal.
We agree. We note, among others,
that Dr. Trono, who is petitioners own
witness, testified in court that, together with
Arabella, there were several babies left in
the clinic and so she could not be certain
whether it was Arabella or some their baby
that was given to private
respondents. Petitioners own evidence
shows that, after the confinement of
Arabella in the clinic in 1987, she saw her
daughter again only in 1989 when she
visited the clinic. This corroborates the
testimony of petitioners own witness, Dra.
Ty, that Arabella was physically confined in
the clinic from November, 1987 to April,
1989.
Before a conviction for kidnapping and
failure to return a minor under Article 270 of
the Revised Penal Code can be had, two
elements must concur, namely: (a) the
offender has been entrusted with the
custody of the minor, and (b) the offender
deliberately fails to restore said minor to his
parents or guardians. The essential
element herein is that the offender is
entrusted with the custody of the minor but
what is actually punishable is not the
kidnapping of the minor, as the title of the
article seems to indicate, but rather
the deliberate failure or refusal of the
custodian of the minor to restore the latter
to his parents or guardians.
In the case at bar, it is evident that
there was no deliberate refusal or failure on
the part of the accused-appellants to
restore the custody of the complainants
child to her. When the accused-appellant
learned that complainant wanted her
daughter back after five (5) long years of
apparent wanton neglect, they tried their
best to help herein complainant find the
child as the latter was no longer under the
clinics care. Accused-appellant Dr. Ty did
not have the address of Arabellas
guardians but as soon as she obtained it
from Dr. Fe Mallonga who was already
working abroad, she personally went to the
guardians residence and informed them
that herein complainant wanted her
daughter back
The efforts taken by the accused-
appellants to help the complainant in
finding the child clearly negate the finding
that there was a deliberate refusal or failure
on their part to restore the child to her
mother. Evidence is simply wanting in this
regard.
It is worthy to note that accused-
appellants conduct from the moment the
child was left in the clinics care up to the
time the child was given up for guardianship
was motivated by nothing more than an
earnest desire to help the child and a high
regard for her welfare and well-being.
WHEREFORE, premises considered,
the decision appealed from is hereby
REVERSED and SET ASIDE. Accordingly,
accused-appellant VICENTE TY and
CARMEN TY are hereby ACQUITTED of
the crime charged