SECOND DIVISION

G.R. No. 165339 : August 23, 2010

EQUITABE !CI BAN", Petitioner, vs. ARCEITO B. TAN, Respondent.
D E C I S I O N
!ERATA, J .:chanroblesvirtuallawlibrar
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to
set aside the Decision
1
cralaw and the Resolution

cralaw of the Court of !ppeals "C!# in C!$%.R. C& 'o.

41().
*he antecedents are as follows:chanroblesvirtuallawlibrar
Respondent !rcelito B.*an +aintained a current and savings account with ,hilippine Co++ercial
-nternational Bank ",C-B#, now petitioner ./uitable ,C- Bank.
0
cralaw 1n 2a3 10, 1((, respondent issued
,C-B Check 'o. 45155 postdated 2a3 05, 1((
4
cralaw in the a+ount of ,04,5)).4 in favor of 6ulpicio
7ines, -nc. !s of 2a3 14, 1((, respondent8s balance with petitioner was ,05,144.5(. 1n 2a3 14,
1((, 6ulpicio 7ines, -nc. deposited the aforesaid check to its account with 6olid Bank, Carbon
Branch, Cebu Cit3. !fter clearing, the a+ount of the check was i++ediatel3 debited b3 petitioner fro+
respondent8s account thereb3 leaving hi+ with a balance of onl3 ,55).)4.
2eanwhile, respondent issued three checks fro+ 2a3 ( to 2a3 19, 1((, specificall3, ,C-B Check
'o. 455)5 dated 2a3 (, 1((, pa3able to !gusan del 6ur .lectric Cooperative -nc. "!6.7C1# for
the a+ount of ,9,44.9): ,C-B Check 'o. 455(4 dated 2a3 15, 1(( pa3able to !gusan del 'orte
.lectric Cooperative -nc., "!'.C1# for the a+ount of ,9,44.51: and ,C-B Check 'o. 014154 dated
2a3 19, 1(( pa3able in cash for the a+ount of ,15,555.55. ;hen presented for pa3+ent, ,C-B
Check 'os. 455)5, 455(4 and 014514 were dishonored for being drawn against insufficient funds.
!s a result of the dishonor of Check 'os. 455)5 and 455(4 which were pa3able to !6.7C1 and
!'.C1, respectivel3, the electric power suppl3 for the two +ini$saw+ills owned and operated b3
respondent, located in *alacogon, !gusan del 6ur: and in %olden Ribbon, Butuan Cit3, was cut off on
<une 1, 1(( and 2a3 ), 1((, respectivel3, and it was restored onl3 on <ul3 5 and !ugust 4, 1((,
respectivel3.
Due to the foregoing, respondent filed with the Regional *rial Court "R*C# of Cebu Cit3 a co+plaint
against petitioner, pra3ing for pa3+ent of losses consisting of unreali=ed inco+e in the a+ount of
,1,)94,555.55. >e also pra3ed for pa3+ent of +oral da+ages, e?e+plar3 da+ages, attorne38s fees and
litigation e?penses.
Respondent clai+ed that Check 'o. 45155 was a postdated check in pa3+ent of Bills of 7ading 'os.
15, 19 and 14, and that his account with petitioner would have had sufficient funds to cover pa3+ent of
the three other checks were it not for the negligence of petitioner in i++ediatel3 debiting fro+ his
account Check 'o. 45155, in the a+ount of ,04,5)).4, even as the said check was postdated to 2a3
05, 1((. !s a conse/uence of petitioner8s error, which brought about the dishonor of the two checks
paid to !6.7C1 and !'.C1, the electric suppl3 to his two +ini$saw+ills was cut off, the business
operations thereof were stopped, and purchase orders were not dul3 served causing tre+endous losses
to hi+.
-n its defense, petitioner denied that the /uestioned check was postdated 2a3 05, 1(( and clai+ed
that it was a current check dated 2a3 0, 1((. -t alleged further that the disconnection of the electric
suppl3 to respondent8s saw+ills was not due to the dishonor of the checks, but for other reasons not
attributable to the bank.
!fter trial, the R*C, in its Decision
5
cralaw dated <une 1, 1((0, ruled in favor of petitioner and dis+issed
the co+plaint.
!ggrieved b3 the Decision, respondent filed a 'otice of !ppeal.
9
cralaw -n its Decision dated 2a3 01,
554, the Court of !ppeals reversed the decision of the trial court and directed petitioner to pa3
respondent the su+ of ,1,)94,555.55 as actual da+ages, ,55,555.55 b3 wa3 of +oral da+ages,
,55,555.55 as e?e+plar3 da+ages and attorne38s fees in the a+ount of ,05,555.55. ,etitioner filed a
+otion for reconsideration, which the C! denied in a Resolution dated !ugust 4, 554.
>ence, the instant petition assigning the following errors:chanroblesvirtuallawlibrar
-
*>. @1AR*> D-&-6-1' 1@ *>. C1AR* 1@ !,,.!76 D.@-.D 1@@-C. 1RD.R '1. )$54$
C% BB >17D-'% 1' *1 *>-6 C!6. !'D D.C-D-'% -* -'6*.!D 1@ A'71!D-'% -* !'D
>!&-'% -* R.$R!@@7.D !21'% *>. D-&-6-1'6 -' C.BA C-*B.
--
*>. C1AR* 1@ !,,.!76 .RR.D -' R.&.R6-'% *>. @-'D-'% 1@ *>. R.%-1'!7
*R-!7 C1AR* *>!* C>.CC '1. 45155 ;!6 D!*.D 2!B 0, 1((.
---
*>. C1AR* 1@ !,,.!76 .RR.D -' '1* >17D-'% *>!* R.6,1'D.'*86 ;!B 1@
;R-*-'% *>. D!*. 1' C>.CC '1. 45155 ;!6 *>. ,R1D-2!*. C!A6. 1@ *>.
D-6>1'1R 1@ >-6 *>R.. 1*>.R C>.CC6.
-&
*>. C1AR* 1@ !,,.!76 .RR.D -' !;!RD-'% !C*A!7 D!2!%.6, 21R!7 D!2!%.6,
.D.2,7!RB D!2!%.6 !'D !**1R'.B86 @..6.
!nent the first issue, petitioner sub+its that the C! defied 1ffice 1rder 'o. )$54$C% dated !pril 5,
554 issued b3 then C! ,residing <ustice Cancio C. %arcia when it failed to unload C!$%.R. C& 'o.
41() so that it +a3 be re$raffled a+ong the Divisions in Cebu Cit3.
1ffice 1rder 'o. )$54$C%
4
cralaw provides:chanroblesvirtuallawlibrar
? ? ?
-n view of the reorgani=ation of the different Divisions due to the appoint+ent of eighteen "1)# new
<ustices to the additional divisions in the cities of Cebu and Caga3an de 1ro, the raffle of civil,
cri+inal and special cases sub+itted for decision and falling within the Eurisdiction of the additional
divisions shall co++ence on !pril 9, 554.
*he raffle of newl3$filed cases and those for co+pletion likewise falling within the Eurisdiction of the
additional divisions, shall start on !pril 1, 554.
? ? ?
,etitioner alleged that since the afore+entioned 1ffice 1rder directed the raffle of civil, cri+inal and
special cases sub+itted for decision and falling within the Eurisdiction of the additional divisions on
!pril 9, 554, C!$%.R. C& 'o. 41() should have been unloaded b3 the C!8s @ourth Division and re$
raffled to the C!8s Division in Cebu Cit3 instead of deciding the case on 2a3 01, 554.
Respondent argued that the C!8s @ourth Division correctl3 acted in taking cogni=ance of the case. *he
C! defended its Eurisdiction b3 ruling that cases alread3 sub+itted for decision as of the effectivit3 of
Republic !ct "R.!.# )49
)
cralaw on @ebruar3 1, 1((4 were no longer included for re$raffle to the newl3$
created &isa3as and 2indanao Divisions of the C!, confor+able to 6ection 5 of the said statute.
,etitioner8s argu+ent is +isplaced. Ander 6ection 0 of R.!. )49, it is provided that:chanroblesvirtuallawlibrar
6ection 0. 6ection 15 of Batas ,a+bansa Blg. 1(, as a+ended, is hereb3 further a+ended to read as
follows:chanroblesvirtuallawlibrar
6ec. 15. Place of Holding Sessions. $ *he Court of !ppeals shall have its per+anent stations as
follows: *he first seventeen "14# divisions shall be stationed in the Cit3 of 2anila for cases co+ing
fro+ the @irst to the @ifth <udicial Regions: the .ighteenth, 'ineteenth, and *wentieth Divisions shall
be in Cebu Cit3 for cases co+ing fro+ the 6i?th, 6eventh and .ighth <udicial Regions: the *went3$
first, *went3$second and *went3$third Divisions shall be in Caga3an de 1ro Cit3 for cases co+ing
fro+ the 'inth, *enth, .leventh, and *welfth <udicial Regions. ;henever de+anded b3 public interest,
or whenever Eustified b3 an increase in case load, the 6upre+e Court, upon its own initiative or upon
reco++endation of the ,residing <ustice of the Court of !ppeals, +a3 authori=e an3 division of the
Court to hold sessions periodicall3, or for such periods and at such places as the 6upre+e Court +a3
deter+ine, for the purpose of hearing and deciding cases. *rials or hearings in the Court of !ppeals
+ust be continuous and +ust be co+pleted within three "0# +onths unless e?tended b3 the Chief
<ustice of the 6upre+e Court.
@urther, 6ection 5 of the sa+e !ct provides:chanroblesvirtuallawlibrar
Apon the effectivit3 of this !ct, all pending cases, except those which have been submitted for
resolution , shall be referred to the proper division of the Court of !ppeals.
(
cralaw
!lthough C!$%.R. C& 'o. 41() originated fro+ Cebu Cit3 and is thus referable to the C!8s
Divisions in Cebu Cit3, the said case was alread3 sub+itted for decision as of <ul3 5, 1((4.
15
cralaw >ence,
C!$%.R. C& 'o. 41(), which was alread3 sub+itted for decision as of the effectivit3 of R.!. )49,
i.e., @ebruar3 1, 1((4, can no longer be referred to the C!8s Division in Cebu Cit3. *hus, the C!8s
@or+er @ourth Division correctl3 ruled that C!$%.R. C& 'o. 41() pending in its division was not
a+ong those cases that had to be re$raffled to the newl3$created C! Divisions in the &isa3as Region.
@urther, ad+inistrative issuances +ust not override, supplant or +odif3 the law, but +ust re+ain
consistent with the law the3 intend to carr3 out.
11
cralaw *hus, 1ffice 1rder 'o. )$54$C% cannot defeat the
provisions of R.!. )49.
!s to the second issue, petitioner +aintains that the C! erred in reversing the finding of the R*C that
Check 'o. 45155 was dated 2a3 0, 1((. ,etitioner argued that in arriving at the conclusion that
Check 'o. 45155 was postdated 2a3 05, 1((, the C! Eust +ade a visual e?a+ination of the check,
unlike the R*C which verified the truth of respondent8s testi+on3 relative to the issuance of Check 'o.
45155. Respondent argued that the check was carefull3 e?a+ined b3 the C! which correctl3 found
that Check 'o. 45155 was postdated to 2a3 05, 1(( and not 2a3 0, 1((.
*he principle is well established that this Court is not a trier of facts. *herefore, in an appeal b3
certiorari under Rule 45 of the Rules of Court, onl3 /uestions of law +a3 be raised. *he resolution of
factual issues is the function of the lower courts whose findings on these +atters are received with
respect and are, as a rule, binding on this Court. >owever, this rule is subEect to certain e?ceptions.
1ne of these is when the findings of the appellate court are contrar3 to those of the trial court.
1
cralaw Due
to the divergence of the findings of the C! and the R*C, ;e shall re$e?a+ine the facts and evidence
presented before the lower courts.
*he R*C ruled that:chanroblesvirtuallawlibrar
? ? ?
*he issue to be resolved in this case is whether or not the date of ,C-B Check 'o. 45155 is 2a3 0,
1(( as contended b3 the defendant, or 2a3 05, 1(( as clai+ed b3 the plaintiff. *he date of the check
is written as follows $ 5F0F5F(. @ro+ the +anner b3 which the date of the check is written, the Court
cannot reall3 +ake a pronounce+ent as to whether the true date of the check is 2a3 0 or 2a3 05,
1((, without in/uiring into the background facts leading to the issuance of said check.
!ccording to the plaintiff, the check was issued to 6ulpicio 7ines in pa3+ent of bill of lading nos. 15,
19 and 14. !n e?a+ination of bill of lading no. 15, however, shows that the sa+e was issued, not in
favor of plaintiff but in favor of Coca Cola Bottlers ,hilippines, -nc. Bill of 7ading 'o. 19 is issued in
favor of 6uson 7u+ber and not to plaintiff. 7ikewise, Bill of 7ading 'o. 14 shows that it was issued to
<a== Cola and not to plaintiff. @urther+ore, the receipt for the pa3+ent of the freight for the ship+ents
reflected in these three bills of lading shows that the freight was paid b3 Coca Cola Bottlers
,hilippines, -nc. and not b3 plaintiff.
2oreover, the said receipt shows that it was paid in cash and not b3 check. @ro+ the foregoing, the
evidence on record does not support the clai+ of the plaintiff that Check 'o. 45155 was issued in
pa3+ent of bills of lading nos. 15, 19 and 14.
>ence, the conclusion of the Court is that the date of the check was 2a3 0, 1(( and not 2a3 05,
1((.
10
cralaw
? ? ?
-n fine, the R*C concluded that the check was dated 2a3 0, 1(( and not 2a3 05, 1((, because the
sa+e check was not issued to pa3 for Bills of 7ading 'os. 15, 19 and 14, as respondent clai+s. *he
trial court8s conclusion is preposterous and illogical. *he purpose for the issuance of the check has no
logical connection with the date of the check. Besides, the trial court need not look into the purpose for
which the check was issued. ! reading of Check 'o. 45155
14
cralaw would readil3 show that it was dated
2a3 05, 1((. !s correctl3 observed b3 the C!:chanroblesvirtuallawlibrar
1n the first issue, we agree with appellant that appellee Bank apparentl3 erred in +isappreciating the
date of Check 'o. 45155. ;e have carefull3 e?a+ined the check in /uestion ".?h. DDDD# and we
are convinced that it was indeed postdated to 2a3 05, 1(( and not 2a3 0, 1(( as urged b3 appellee.
*he date written on the check clearl3 appears as G5F05F1((G ".?h. DDDD$4#.nad *he first bar "F# which
separates the nu+bers G5G and G05G and the second bar "F# which further separates the nu+ber G05G
fro+ the 3ear 1(( appear to have been done in heav3, well$defined and bold strokes, clearl3
indicating the date of the check as G5F05F1((G which obviousl3 +eans 2a3 05, 1((. 1n the other
hand, the alleged bar "F# which appellee points out as allegedl3 separating the nu+bers G0G and G5,G
thereb3 leading it to read the date as 2a3 0, 1((, is not actuall3 a bar or a slant but appears to be
+ore of an unintentional +arking or line done with a ver3 light stroke. *he presence of the figure G5G
after the nu+ber G0G is /uite significant. -n fact, a close e?a+ination thereof would unerringl3 show
that the said nu+ber =ero or G5G is connected to the preceeding nu+ber G0.G -n other words, the drawer
of the check wrote the figures G05G in one continuous stroke, thereb3 contradicting appellee8s theor3
that the nu+ber G0G is separated fro+ the figure G5G b3 a bar. Besides, appellee8s theor3 that the date of
the check is 2a3 0, 1(( is clearl3 untenable considering the presence of the figure G5G after G0G and
another bar before the 3ear 1((. !nd if we were to accept appellee8s theor3 that what we find to be an
unintentional +ark or line between the figures G0G and G5G is a bar separating the two nu+bers, the date
of the check would then appear as G5F0F5F1((, which is si+pl3 absurd. >ence, we cannot go along
with appellee8s theor3 which will lead us to an absurd result. -t is therefore our conclusion that the
check was postdated to 2a3 05, 1(( and appellee Bank or its personnel erred in debiting the a+ount
of the check fro+ appellant8s account even before the check8s due date. Andoubtedl3, had not appellee
bank pre+aturel3 debited the a+ount of the check fro+ appellant8s account before its due date, the two
other checks ".?hs. 7777 and %%%%# successivel3 dated 2a3 (, 1(( and 2a3 19, 1(( which were
paid b3 appellant to !6.7C1 and !'.C1, respectivel3, would not have been dishonored and the said
pa3ees would not have disconnected their suppl3 of electric power to appellant8s saw+ills, and the
latter would not have suffered losses.
*he law i+poses on banks high standards in view of the fiduciar3 nature of banking. 6ection of R.!.
)4(1
15
cralaw decrees:chanroblesvirtuallawlibrar
Declaration of Policy. $ *he 6tate recogni=es the vital role of banks in providing an environ+ent
conducive to the sustained develop+ent of the national econo+3 and the fiduciar3 nature of banking
that re/uires high standards of integrit3 and perfor+ance. -n furtherance thereof, the 6tate shall
pro+ote and +aintain a stable and efficient banking and financial s3ste+ that is globall3 co+petitive,
d3na+ic and responsive to the de+ands of a developing econo+3.
!lthough R.!. )4(1 took effect onl3 in the 3ear 555, the Court had alread3 i+posed on banks the
sa+e high standard of diligence re/uired under R.!. )4(1 at the ti+e of the unti+el3 debiting of
respondent8s account b3 petitioner in 2a3 1((. -n Simex International (anila!" Inc. v. #ourt of
$ppeals,
19
cralaw which was decided in 1((5, the Court held that as a business affected with public interest
and because of the nature of its functions, the bank is under obligation to treat the accounts of its
depositors with +eticulous care, alwa3s having in +ind the fiduciar3 nature of their relationship.
*he diligence re/uired of banks, therefore, is +ore than that of a good father of a fa+il3.
14
cralaw -n ever3
case, the depositor e?pects the bank to treat his account with the ut+ost fidelit3, whether such account
consists onl3 of a few hundred pesos or of +illions. *he bank +ust record ever3 single transaction
accuratel3, down to the last centavo, and as pro+ptl3 as possible. *his has to be done if the account is
to reflect at an3 given ti+e the a+ount of +one3 the depositor can dispose of as he sees fit, confident
that the bank will deliver it as and to who+ever he directs.
1)
cralaw @ro+ the foregoing, it is clear that
petitioner bank did not e?ercise the degree of diligence that it ought to have e?ercised in dealing with
its client.
;ith respect to the third issue, petitioner sub+its that respondent8s wa3 of writing the date on Check
'o. 45155 was the pro?i+ate cause of the dishonor of his three other checks. Contrar3 to petitioner8s
view, the Court finds that its negligence is the pro?i+ate cause of respondent8s loss.
,ro?i+ate cause is that cause which, in a natural and continuous se/uence, unbroken b3 an3 efficient
intervening cause, produces the inEur3, and without which the result would not have occurred.
1(
cralaw *he
pro?i+ate cause of the loss is not respondent8s +anner of writing the date of the check, as it was ver3
clear that he intended Check 'o. 45155 to be dated 2a3 05, 1(( and not 2a3 0, 1((. *he
pro?i+ate cause is petitioner8s own negligence in debiting the account of the respondent prior to the
date as appearing in the check, which resulted in the subse/uent dishonor of several checks issued b3
the respondent and the disconnection b3 !6.7C1 and !'.C1 of his electric suppl3.
*he bank on which the check is drawn, known as the drawee bank, is under strict liabilit3 to pa3 to the
order of the pa3ee in accordance with the drawer8s instructions as reflected on the face and b3 the ter+s
of the check.
5
cralaw *hus, pa3+ent +ade before the date specified b3 the drawer is clearl3 against the
drawee bank8s dut3 to its client.
-n its +e+orandu+
1
cralaw filed before the R*C, petitioner sub+its that respondent caused confusion on
the true date of the check b3 writing the date of the check as 5F0F5F(. -f, indeed, petitioner was
confused on whether the check was dated 2a3 0 or 2a3 05 because of the GFG which allegedl3
separated the nu+ber G0G fro+ the G5,G petitioner should have re/uired respondent drawer to
countersign the said GFG in order to ascertain the true intent of the drawer before honoring the check. !s
a +atter of practice, bank tellers would not receive nor honor such checks which the3 believe to be
unclear, without the counter$signature of its drawer. ,etitioner should have e?ercised the highest degree
of diligence re/uired of it b3 ascertaining fro+ the respondent the accurac3 of the entries therein, in
order to settle the confusion, instead of proceeding to honor and receive the check.
@urther, petitioner8s branch +anager, ,edro D. *radio, in a letter

cralaw addressed to !'.C1, e?plained

the circu+stances surrounding the dishonor of ,C-B Check 'o. 455(4. *hus:chanroblesvirtuallawlibrar
<une 11, 1((
!'.C1
!gusan del 'orte
%entle+en:chanroblesvirtuallawlibrar
*his refer "sic# to ,C-B Check 'o. 455(4 dated 2a3 19, 1(( in the a+ount of ,9,44.51 pa3able to
3our goodselves issued b3 2r. !rcelito B. *an "2!';11D -ndustries# which was returned b3 ,C-B
2andaue Branch for insufficienc3 of funds.
,lease be advised that the return of the aforesaid check was a result of an earlier negotiation to ,C-B$
2andaue Branch through a deposit +ade on 2a3 14, 1(( with 617-DB!'C Carbon Branch, or
through Central Bank clearing via ,hilippine Clearing >ouse Corporation facilities, of a postdated
check which ironicall3 and without bad faith passed undetected through several e3es fro+ the pa3ee of
the check down to the depositor3 bank and finall3 the drawee bank ",C-B# the aforesaid Check 'o.
455(4 issued to 3ou would have been honored because it would have been sufficientl3 funded at the
ti+e it was negotiated. -t should be e+phasi=ed, however, that 2r. !rcelito B. *an was in no wa3
responsible for the dishonor of said ,C-B Check 'o. 455(4.
;e hope that the foregoing will sufficientl3 e?plain the circu+stances of the dishonor of ,C-B Check
'o. 455(4 and would clear the na+e and credit of 2r. !rcelito *an fro+ an3 +isi+pressions which
+a3 have resulted fro+ the dishonor of said check.
*hank 3ou.
? ? ?
!lthough petitioner failed to specif3 in the letter the other details of this Gpostdated check,G which
passed undetected fro+ the e3es of the pa3ee down to the petitioner drawee bank, the Court finds that
petitioner was evidentl3 referring to no other than Check 'o. 45155 which was deposited to
6olidbank, and was postdated 2a3 05, 1((. !s correctl3 found b3 the C!:chanroblesvirtuallawlibrar
-n the afore/uoted letter of its 2anager, appellee Bank e?pressl3 acknowledged that Check 'o.
455(4 ".?h. %%%%# which appellant paid to !'.C1 Gwas sufficientl3 funded at the ti+e it was
negotiated,G but it was dishonored as a Gresult of an earlier negotiation to ,C-B$2andaue Branch
through a deposit +ade on 2a3 14, 1(( with 617-DB!'C ??? ??? ??? of a postdated check which
??? ??? passed undetected.G >e further ad+itted that G2r. !rcelito B. *an was in no wa3 responsible
for the dishonor of said ,C-B Check 'o. 455(4.G 'eedless to state, since appellee8s 2anager has
cleared appellant of an3 fault in the dishonor of the !'.C1 check, it Hnecessaril3I follows that
responsibilit3 therefor or fault for the dishonor of the check should fall on appellee bank. !ppellee8s
atte+pt to e?tricate itself fro+ its inadvertence +ust therefore fail in the face of its 2anager8s e?plicit
acknowledg+ent of responsibilit3 for the inadvertent dishonor of the !'.C1 check.
0
cralaw
.videntl3, the bank8s negligence was the result of lack of due care re/uired of its +anagers and
e+plo3ees in handling the accounts of its clients. ,etitioner was negligent in the selection and
supervision of its e+plo3ees. -n #itiban%" &.$. v. #abamongan"
4
cralaw the Court ruled:chanroblesvirtuallawlibrar
? ? ? Banks handle dail3 transactions involving +illions of pesos. B3 the ver3 nature of their works the
degree of responsibilit3, care and trustworthiness e?pected of their e+plo3ees and officials is far
greater than those of ordinar3 clerks and e+plo3ees. Banks are e?pected to e?ercise the highest degree
of diligence in the selection and supervision of their e+plo3ees.
;e now resolve the /uestion on the award of actual, +oral and e?e+plar3 da+ages, as well as
attorne38s fees b3 the C! to the respondent.
*he C! based the award of actual da+ages in the a+ount of ,1,)94,555.55 on the purchase orders
5
cralaw
sub+itted b3 respondent. *he C! ruled that:chanroblesvirtuallawlibrar
? ? ? -n the case at bar, appellant Hrespondent hereinI presented ade/uate evidence to prove losses
consisting of unreali=ed inco+e that he sustained as a result of the appellee Bank8s gross negligence.
!ppellant identified certain ,urchase 1rders fro+ various custo+ers which were not +et b3 reason of
the disruption of the operation of his saw+ills when !'.C1 and !6.7C1 disconnected their suppl3
of electricit3 thereto. ? ? ?
!ctual or co+pensator3 da+ages are those awarded in order to co+pensate a part3 for an inEur3 or loss
he suffered. *he3 arise out of a sense of natural Eustice and are ai+ed at repairing the wrong done.
.?cept as provided b3 law or b3 stipulation, a part3 is entitled to an ade/uate co+pensation onl3 for
such pecuniar3 loss as he has dul3 proven.
9
cralaw *o recover actual da+ages, not onl3 +ust the a+ount of
loss be capable of proof: it +ust also be actuall3 proven with a reasonable degree of certaint3,
pre+ised upon co+petent proof or the best evidence obtainable.
4
cralaw
Respondent8s clai+ for da+ages was based on purchase orders fro+ various custo+ers which were
allegedl3 not +et due to the disruption of the operation of his saw+ills. >owever, aside fro+ the
purchase orders and his testi+on3, respondent failed to present co+petent proof on the specific a+ount
of actual da+ages he suffered during the entire period his power was cut off. 'o other evidence was
provided b3 respondent to show that the foregoing purchase orders were not +et or were canceled b3
his various custo+ers. *he Court cannot si+pl3 rel3 on speculation, conEecture or guesswork in
deter+ining the a+ount of da+ages.
)
cralaw
2oreover, an e?a+ination of the purchase orders and Eob orders reveal that the orders were due for
deliver3 prior to the period when the power suppl3 of respondent8s two saw+ills was cut off on <une 1,
1(( to <ul3 5, 1(( and 2a3 ), 1(( to !ugust 4, 1((, respectivel3. ,urchase 1rder 'o. ((59
(
cralaw
deliver3 date is 2a3 4, 1((: ,urchase 1rder 'o. (9(
05
cralaw deliver3 date is 2arch 1(, 1((: ,urchase
1rder 'o. 1444(9
01
cralaw is due for deliver3 on <anuar3 01, 1((: ,urchase 1rder 'o. 49555
0
cralaw deliver3
date is @ebruar3 and 2arch 1((: and <ob 1rder 'o. 1)4,
00
cralaw dated 2arch 1), 1((, has a 15 da3s
duration of work. Clearl3, the disconnection of his electricit3 during the period 2a3 ), 1(( to
!ugust 4, 1(( could not possibl3 affect his saw+ill operations and prior orders therefro+.
%iven the dearth of respondent8s evidence on the +atter, the Court resolves to delete the award of
actual da+ages rendered b3 the C! in favor of respondent for his unreali=ed inco+e.
'onetheless, in the absence of co+petent proof on the actual da+ages suffered, respondent is entitled
to te+perate da+ages. Ander !rticle 4 of the Civil Code of the ,hilippines, te+perate or +oderate
da+ages, which are +ore than no+inal but less than co+pensator3 da+ages, +a3 be recovered when
the court finds that so+e pecuniar3 loss has been suffered but its a+ount cannot, fro+ the nature of the
case, be proved with certaint3.
04
cralaw *he allowance of te+perate da+ages when actual da+ages were not
ade/uatel3 proven is ulti+atel3 a rule drawn fro+ e/uit3, the principle affording relief to those
definitel3 inEured who are unable to prove how definite the inEur3.
05
cralaw
-t is apparent that respondent suffered pecuniar3 loss. *he negligence of petitioner triggered the
disconnection of his electrical suppl3, which te+poraril3 halted his business operations and the
conse/uent loss of business opportunit3. >owever, due to the insufficienc3 of evidence before As, ;e
cannot place its a+ount with certaint3. !rticle 19
09
cralaw of the Civil Code instructs that assess+ent of
da+ages is left to the discretion of the court according to the circu+stances of each case. Ander the
circu+stances, the su+ of ,55,555.55 as te+perate da+ages is reasonable.
!nent the award of +oral da+ages, it is settled that +oral da+ages are +eant to co+pensate the
clai+ant for an3 ph3sical suffering, +ental anguish, fright, serious an?iet3, bes+irched reputation,
wounded feelings, +oral shock, social hu+iliation and si+ilar inEuries unEustl3 caused.
04
cralaw -n
Philippine &ational 'an% v. #ourt of $ppeals,
0)
cralaw the Court held that a bank is under obligation to
treat the accounts of its depositors with +eticulous care whether such account consists onl3 of a few
hundred pesos or of +illions of pesos. Responsibilit3 arising fro+ negligence in the perfor+ance of
ever3 kind of obligation is de+andable. ;hile petitioner8s negligence in that case +a3 not have been
attended with +alice and bad faith, the banks8 negligence caused respondent to suffer +ental anguish,
serious an?iet3, e+barrass+ent and hu+iliation. -n said case, ;e ruled that respondent therein was
entitled to recover reasonable +oral da+ages.
-n this case, the une?pected cutting off of respondent8s electricit3, which resulted in the stoppage of his
business operations, had caused hi+ to suffer hu+iliation, +ental anguish and serious an?iet3. *he
award of ,55,555.55 is reasonable, considering the reputation and social standing of respondent.
!s found b3 the C!, as an accredited supplier, respondent had been reposed with a certain degree
of trust b3 various reputable and well$ established corporations.
1n the award of e?e+plar3 da+ages, !rticle ( of the Civil Code states:chanroblesvirtuallawlibrar
!rt. (. .?e+plar3 or corrective da+ages are i+posed, b3 wa3 of e?a+ple or correction for the
public good, in addition to the +oral, te+perate, li/uidated or co+pensator3 da+ages.
*he law allows the grant of e?e+plar3 da+ages to set an e?a+ple for the public good. *he banking
s3ste+ has beco+e an indispensable institution in the +odern world and pla3s a vital role in the
econo+ic life of ever3 civili=ed societ3. ;hether as +ere passive entities for the safekeeping and
saving of +one3 or as active instru+ents of business and co++erce, banks have attained an ubi/uitous
presence a+ong the people, who have co+e to regard the+ with respect and even gratitude and +ost
of all, confidence. @or this reason, banks should guard against inEur3 attributable to negligence or bad
faith on its part. ;ithout a doubt, it has been repeatedl3 e+phasi=ed that since the banking business is
i+pressed with public interest, of para+ount i+portance thereto is the trust and confidence of the
public in general. Conse/uentl3, the highest degree of diligence is e?pected, and high standards of
integrit3 and perfor+ance are even re/uired of it.
0(
cralaw ,etitioner, having failed in this respect, the
award of e?e+plar3 da+ages in the a+ount of ,55,555.55 is in order.
!s to the award of attorne38s fees, !rticle 5)
45
cralaw of the Civil Code provides, a+ong others, that
attorne38s fees +a3 be recovered when e?e+plar3 da+ages are awarded or when the defendant8s act or
o+ission has co+pelled the plaintiff to litigate with third persons or to incur e?penses to protect his
interest.
41
cralaw Respondent has been forced to undergo unnecessar3 trouble and e?pense to protect his
interest. *he Court affir+s the appellate court8s award of attorne38s fees in the a+ount of ,05,555.55.
#$ERE%ORE, the petition is ,!R*-!77B %R!'*.D. *he Decision and Resolution of the Court of
!ppeals in C!$%.R. C& 'o. 41(), dated 2a3 01, 554 and !ugust 4, 554, respectivel3, are
!@@-R2.D with the following 21D-@-C!*-1'6:chanroblesvirtuallawlibrar
1. *he award of 1ne 2illion .ight >undred 6i?t3$@our *housand and @ive >undred ,esos
",1,)94,555.55# as actual da+ages, in favor of respondent !rcelito B. *an, is D.7.*.D: and
. ,etitioner ./uitable ,C- Bank is instead directed to pa3 respondent the a+ount of @ift3 *housand
,esos ",55,555.55# as te+perate da+ages.
SO ORDERED.
DIOSDADO &. !ERATA
$ssociate (ustice
#E CONCUR:
ANTONIO T. CAR!IO
$ssociate (ustice
#hairperson
ANTONIO EDUARDO B. NAC$URA
$ssociate (ustice
ROBERTO A. ABAD
$ssociate (ustice
'OSE CATRA &ENDO(A
$ssociate (ustice
ATTESTATION
- attest that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court8s Division.
ANTONIO T. CAR!IO
$ssociate (ustice
Second Division" #hairperson
CERTI%ICATION
,ursuant to 6ection 10, !rticle &--- of the Constitution and the Division Chairperson8s !ttestation, -
certif3 that the conclusions in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court8s Division.
RENATO C. CORONA
#hief (ustice
cralaw Endnotes:
1
cralaw ,enned b3 !ssociate <ustice %odardo !. <acinto, with !ssociate <ustices <ose 7. 6abio <r. and 'oel %. *iEa+, concurring: r ollo" pp. 05$0(.

cralaw Id. at 5.
0
cralaw ,ursuant to a +erger between ./uitable Bank and ,C- Bank, rollo, p. 5.
4
cralaw ,etitioner alleged that the check was dated 2a3 0, 1((.
5
cralaw Rollo, pp. 5$).
9
cralaw Records, p. 1.
4
cralaw Rollo, p. 54.
)
cralaw !n !ct Creating !dditional Divisions in the Court of !ppeals, -ncreasing the 'u+ber of Court of !ppeals <ustices fro+ @ift3$1ne "51# to 6i?t3$'ine "9(#,
!+ending for the ,urpose Batas ,a+bansa Bilang 1(, !s !+ended otherwise Cnown as the <udiciar3 Reorgani=ation !ct of 1()5, !ppropriating @unds *herefor,
and for other purposes.
(
)mphasis supplied.
15
cralaw C!8s resolution dated <ul3 5, 1((4: C! rollo, p. 09.
11
cralaw #ommissioner of Internal Revenue v. ichel (. *huillier Pawnshop" Inc." %.R. 'o. 155(44, 450 ,hil. 1540, 155 "550#, citing #ommissioner of Internal
Revenue v. #$" 015 ,hil. 0( "1((5#.nad
1
cralaw +uillang v. 'edania" %.R. 'o. 19()4, 2a3 1, 55(, 5)) 6CR! 40, )4.
10
cralaw Decision dated <une 1, 1((0, rollo, p. 4.
14
cralaw .?hibit DDDD, C! rollo, p. 50.
15
cralaw *he %eneral Banking 7aw of 555.
19
cralaw %.R. 'o. ))510, 2arch 1(, 1((5, 1)0 6CR! 095, 094.
14
cralaw Samsung #onstruction #ompany Philippines" Inc. v. ,ar )ast 'an% and -rust #ompany" %.R. 'o. 1(515, !ugust 10, 554, 409 6CR! 45, 41.
1)
cralaw etropolitan 'an% and -rust #ompany v. #abil.o" %.R. 'o. 15449(, Dece+ber 9, 559, 515 6CR! 5(, 45.
1(
cralaw 'an% of the Philippine Islands v. *ifetime ar%eting #orporation" %.R. 'o. 149404, <une 5, 55), 555 6CR! 040, 0)1$0).
5
cralaw etropolitan 'an% and -rust #ompany v. #abil.o" supra note 1), at 4.
1
cralaw Records, p. 1)4.

cralaw C! rollo, p. 11.

0
cralaw Rollo, p. 05.
4
cralaw %.R. 'o. 149(1), 2a3 , 559, 4)) 6CR! 514, 50.
5
cralaw ,urchase 1rder 'o. ((59 of Coca$Cola Bottlers -nc in the a+ount of ,(4,555 ".?hibit BBB, C! rollo, p. 4)#.nad
,urchase 1rder 'o. (9( of Coca Cola Bottlers -nc. in the a+ount of ,1(5,555 ".?hibit JJJ, C! rollo, p. 4(#.nad
,urchase 1rder 'o. 1444(9 of Coca Cola Bottlers -nc in the a+ount of ,5(1,555 ".?hibit !!!!, C! rollo, p. 55#.nad
,urchase 1rder 'o. 49555 of 6an 2iguel Corporation in the a+ount of ,)),555 ".?hibit BBBB, C! rollo, p. 5#.nad
<ob 1rder 'o. 1)4 of Classic !+erican @lavors -nc. in the a+ount of ,((,555 ".?hibit CCCC, C! rollo, p. 51#.nad
9
cralaw Spouses /illafuerte v. #ourt of $ppeals" 4() ,hil. 155, 119 "555#.nad
4
cralaw Spouses 0uisumbing v. anila )lectric #ompany" 4( ,hil. 44, 444 "55#.nad
)
cralaw Dueas v. +uce1$frica" %.R. 'o. 19594(, 1ctober 5, 55(, 950 6CR! 11, .
(
cralaw C! rollo, p. 4).
05
cralaw Id. at 4(.
01
cralaw Id. at 55.
0
cralaw Id. at 5.
00
cralaw Id. at 51.
04
cralaw /iron -ransportation #o." Inc. v. Delos Santos" 0(( ,hil. 40, 55, 59 "555#.nad
05
cralaw Republic v. -uvera" %.R. 'o. 14)49, @ebruar3 19, 554, 519 6CR! 110, 15.
09
cralaw 'o proof of pecuniar3 loss is necessar3 in order that +oral, no+inal, te+perate, li/uidated or e?e+plar3 da+ages +a3 be adEudicated. *he assess+ent of such
da+ages, e?cept li/uidated ones, is left to the discretion of the Court, according to the circu+stances of each case.
04
cralaw Samson" (r. v. 'an% of the Philippine Islands" 450 ,hil. 544, 5)0 "550#.nad
0)
cralaw 040 ,hil. (4, (4) "1(((#.nad
0(
cralaw )2uitable P#I 'an% v. 3ng" %.R. 'o. 15954, 6epte+ber 15, 559, 55 6CR! 11(, 10).
45
cralaw -n the absence of stipulation, attorne38s fees and e?penses of litigation, other than Eudicial costs, cannot be recovered, e?cept:chanroblesvirtuallawlibrar
"1# ;hen e?e+plar3 da+ages are awarded:
"# ;hen the defendant8s act or o+ission has co+pelled the plaintiff to litigate with third persons or to incur e?pense to protect his interest:
? ? ? ?
41
cralaw Sande4as v Ignacio" (r. %.R. 'o. 155500, Dece+ber 1(, 554, 541 6CR! 91, )0$)4.