G.R. No. 167750 March 15, 2010
BANK OF THE PHILIPPINE ISLANDS, Petitioner, vs. REYNALD R. SUAREZ, Respondent.

FACTS

Respondent Reynald R. Suarez, a lawyer, maintained accounts with petitioner Bank of the Philippine Islands (BPI). In 1997, acting for a client in a land purchase, Suarez arranged for the client to deposit an RCBC check for ₱19,129,100 into Suarez’s BPI current account to fund checks Suarez would issue to the sellers. On June 16, 1997, the check was deposited. Allegedly relying on a confirmation from a BPI employee (received by his secretary) that the amount was credited that same day, Suarez issued five checks totaling the same amount. The next day, the checks were dishonored by BPI for “Drawn Against Insufficient Funds” (DAIF), and his account was debited ₱57,200 in penalties. The checks were honored only when represented on June 19, after the RCBC check cleared. Suarez claimed the dishonor damaged his reputation and that BPI tampered with the checks by altering the dishonor reason from “Drawn Against Uncollected Deposit” (DAUD) to DAIF. He demanded damages. BPI offered to reverse the penalties but denied liability for damages. Suarez filed a complaint for damages. The Regional Trial Court ruled in favor of Suarez, awarding actual, moral, and exemplary damages. The Court of Appeals affirmed the decision. BPI appealed to the Supreme Court.

ISSUE

1. Whether BPI was negligent in handling Suarez’s account.
2. Whether Suarez is liable to pay the service charges imposed by the Philippine Clearing House Corporation.
3. Whether BPI is liable to pay Suarez moral and exemplary damages, attorney’s fees, and costs of litigation.

RULING

The Supreme Court granted the petition in part.
1. On Negligence: The Court found BPI was not negligent. Suarez failed to substantiate his claim that BPI confirmed the same-day crediting of the RCBC check. His secretary could not identify the alleged BPI employee or prove the employee had authority to provide such assurance. The banking rule is that a check deposit is not immediately credited as it is subject to clearing. Suarez, as a lawyer and experienced depositor, knew or should have known this rule. His own negligence in issuing checks against an uncollected deposit was the proximate cause of the dishonor. However, BPI was negligent in marking the checks “DAIF” instead of the correct “DAUD,” which exposed Suarez to potential criminal liability under B.P. 22.
2. On Service Charges: The Court ruled Suarez is not liable for the ₱57,200 service charges. BPI’s offer to reverse the charges was an admission of error. Since the dishonor was due to BPI’s incorrect marking (DAIF instead of DAUD), and Suarez was not at fault for the insufficiency of funds (as the deposit was for the exact amount), BPI could not retain the charges under the principle against unjust enrichment.
3. On Damages: The Court deleted the awards for moral and exemplary damages. Suarez failed to prove he suffered moral injury such as social humiliation, wounded feelings, or anxiety due to BPI’s actions. The fact that the payees eventually got paid and no criminal case was filed weakened his claim. However, the Court awarded nominal damages of ₱30,000 in recognition of the violation of his right due to BPI’s incorrect marking of the checks. The award of ₱1.00 as attorney’s fees and costs of litigation was sustained.
DISPOSITIVE:
BPI is ordered to pay Suarez ₱57,200 as actual damages (the reversed service charges) with legal interest from the date of the trial court’s decision until full payment, and ₱30,000 as nominal damages. The awards for moral and exemplary damages are deleted. The award of ₱1.00 as attorney’s fees and costs of litigation is affirmed.