THIRD DIVISION

[ G.R. No. 163990, July 23, 2018 ]

CHINA BANKING CORPORATION, PETITIONER, V. WELBILT
CONSTRUCTION CORPORATION, RESPONDENT

Sirs and Mesdames:

Please take notice that the Court, Third Division, issued a Resolution dated July 23,
2018, which reads as follows:

"G.R. No. 163990 (CHINA BANKING CORPORATION, Petitioner, v. WELBILT

CONSTRUCTION CORPORATION, Respondent.) - The petitioner seeks the
review and reversal of the decision promulgated on January 21, 2004,[1] whereby
the Court of Appeals (CA) affirmed the judgment of the Regional Trial Court
(RTC), Branch 56, in Makati City holding the petitioner liable to pay to the
respondent: (a) actual damages of P1,964,396.80 "plus interest thereon, computed
from the date of the filing of the complaint up to the time that payment is
actually made;" (b) moral damages of P1,000,000.00; (c) exemplary damages of
P500,000.00; (d) attorney's fees of P500,000.00; and (e) costs of suit.[2]

The factual and procedural antecedents follow.

At the time material to this case, the respondent was engaged in the construction
and leasing of condominium units, and its office was located at the second floor
of the Cacho-Gonzalez Building in Makati City. It maintained Current Account No.
1-150001-231-6 and Savings Account No. 115-001232-9 at the petitioner's branch
office whose premises were found at the ground floor of the same building.

The parties had a satisfactory business relationship until May 1993, when
Cristina Gonzalez Feibel informed her father, Eugenio Juan Gonzalez, then the
president of the respondent and signatory of the respondent's corporate current
account, that she had failed to encash the check he had issued to her for
P47,000.00 a few days earlier due to insufficiency of funds. The information took
him aback; hence, he confronted Cesar Evangelista, the petitioner's branch
manager, who also could not explain the depletion of the respondent's current
account. Thus, Gonzalez summoned and demanded an explanation from Anna
Maria L. Mabutas, his confidential secretary of more than 10 years, who had
been placed in charge of the preparation of checks. Finding her explanation
unsatisfactory, and concluding that she was involved in the anomaly, he
immediately terminated her employment.

Based on documents furnished by the petitioner, Gonzalez discovered that

Mabutas had been altering checks by adding words, letters and numbers, and
replacing the names of the payees with her own name or with the names of
certain janitors working in the building, or forging the names of the payees to
make the checks appear to have been duly endorsed; that she had also forged the
signature of Matilde Gonzalez, Gonzalez's wife; and that she had encashed the
forged checks at the branch of the petitioner.

An audit of the respondent's funds with the petitioner's branch revealed that 84
checks issued for the total amount of P1,964,396.80 drawn against the
respondent's Current Account No. 115-00123-1-6 in the period from December
1991 to May 1993 had been altered and falsified; that the irregularities had
resulted in some payees, including the Bureau of Internal Revenue Office in
Makati City, not being paid; and that because of the non-payment of dues, the
respondent had even lost its membership in the Metropolitan Club and the
Calatagan Golf and Country Club.[3]

The respondent then sued, alleging that the petitioner had negligently honoured
the altered or forged checks to its damage and prejudice despite the easily
noticeable alterations, erasures, superimpositions, and intercalations that would
have prompted the trained employees of the petitioner to refuse to honor the
checks.

The petitioner countered that it did not have a hand in the alterations committed
prior to the presentation of the checks for payment by Mabutas; that assuming
that there were alterations, such alterations had been duly authenticated by the
full signatures of the authorized signatories of the respondent; that it had
believed that there was nothing irregular with the checks considering the
fiduciary relationship between Mabutas and Gonzalez, which the acts and
declarations of the latter made known to it; and that the proximate cause of the
losses suffered by the respondent had been the acts of Mabutas to whom the
respondent had granted the authority to prepare, deposit and encash checks, and
to perform other acts relative to the accounts of the respondent.

According to the petitioner, it had regularly conducted lectures and workshops

for its officers and employees to inculcate diligence and proper care of the
accounts of the respondent. It insisted that the delay in discovering the
alterations had defeated the rights of the respondent against it, especially
because it had regularly returned to the respondent the paid or cancelled checks,
and had furnished the respondent the monthly statements of accounts from
which the respondent could have known its current balances; that the inaction
of the respondent in that respect had abetted the commission of fraud by the
respondent's own employee; and that the proviso contained in the monthly
statements of accounts to the effect that the depositor should report any
discrepancies and errors in the monthly bank statements within 10 days from
receipt estopped the respondent from questioning discrepancies in its accounts.
[4]
After trial, the RTC ruled  in  favor of the respondent through the decision
rendered on June 18, 2001, disposing as follows:

WHEREFORE, premises considered, judgment is hereby rendered

adjudging defendant China Banking Corp. liable to pay plaintiff Welbilt
Construction Corp. the following:

(A)Actual damages in the amount of P1,964,396.80, plus legal interest

thereon, computed from the date of the filing of the complaint up to the
time that payment is actually made;

(B)Moral damages in the amount of P1,000,000.00;

(C)Exemplary damages of P500,000.00;

(D)Attorney's fees in the amount of P500,000.00; and

(E) Costs of suit.

SO ORDERED.[5]

On the alteration of the checks, the RTC discoursed as follows:

The issue of the checks (Exhibits "W," "Y," "BB," "CC," "EE," "II," "QQ,"
"SS," "UU," and "VV") containing the forged signatures of Matilde
Gonzalez is relatively simple to resolve. When a signature is forged or
made without authority of the person whose signature it purports to
be, it is wholly inoperative, and no right to retain the instrument, or to
give a discharge therefor, or to enforce payment thereof against any
party thereto, can be acquired through or under such signature unless
the party against whom it is sought to enforce such right is precluded
from setting up the forgery or want of authority (Section 23, Negotiable
Instruments Law). While defendant contends that the signatures on
these checks purporting to be that of Matilde Gonzalez are genuine as
per the specimens it had on file, these signatures had been analyzed by
the NBI Questioned Documents Division and it was determined that
they were not written by the same person (Exhibits "XXXXX" and
"ZZZZZ"). In addition, as testified to by Eliodoro Constantino of the NBI,
these forged signatures may be difficult for laymen to detect but they
should not pass as genuine for those who have undergone training on
questioned documents and specimen signatures (TSN dated September
16, 1996). Defendant's check verifier, Wilfredo Santos, testified that he
had training in documents verification and has also attended a number
of seminars. As such, these forged signatures should not have passed
his scrutiny.

The issue of the altered checks is somewhat more complicated. Where

a negotiable instrument is materially altered without the assent of all
parties liable thereon, it is avoided except as against a party who has
 himself made, authorized or assented to the alteration and subsequent
indorsers x x x. (Section 124, Negotiable Instruments Law).

It appears that Mr. Eugenio Gonzalez, the company president and an

authorized signatory to plaintiffs account with defendant, affixed his
countersignature to these checks, [i]n some instances signing his
indorsement at the dorsal portion thereof. This countersignature or
indorsement would ordinarily mean that the drawer had authorized or
assented to the alteration, thus regularizing the same. However, as
testified to by Mr. Gonzalez, his former executive assistant, Anna
Mabutas, would intentionally make small clerical errors for a given
check, ask him to countersign the same and thereafter alter the amount
and payee thereof. In other words, the alterations which allowed
Mabutas to take plaintiffs funds were made only after Mr. Gonzalez
was deceived into affixing his countersignature on the checks. Under
the circumstances, Mr. Gonzalez cannot be said to have authorized or
assented to these alterations because he did not know about them in
the first place. Defendant therefore should not have allowed these
altered checks to be encashed.

This Court is not unmindful that defendant had no means of knowing

whether these alterations were made before or after the
countersignature was affixed, and that on the face of the checks, it
appeared that the alterations were authorized.[6] (Bold emphasis
supplied.)

The RTC held the petitioner liable to restitute the total value of the encashed
altered checks, and also to pay damages, citing Philippine Bank of
Communications v. Court of Appeals,[7] opining as follows:

It can be established from the testimony of defendant's check verifier,

Wilfredo Santos, that he knew about the alterations on the subject
checks but he cleared them because of Mr. Gonzalez's
countersignature and/or indorsement. However, Santos also
admitted that it was unusual for such a large number of altered checks
to come from a single depositor, that he was acquainted with Anna
Mabutas, who was the payee in most of these checks, and that from
December 1991 to January 1993, all his attempts to call Mr. Gonzalez
for confirmation failed because this same Anna Mabutas would always
give one reason or another why he cannot talk to Mr. Gonzalez. Santos
stated that during this two year period, he made two attempts to go up
to plaintiffs offices during lunch break to personally inform Mr.
Gonzalez about the problem but was not allowed entry on both
occasions, so he did not try to do so again.

Santos also admitted that he never brought up the matter with any of
his superiors in the bank.
 Defendant cannot be completely faulted for honoring one or two
altered checks if the alterations thereon appear to be
countersigned by the drawer. Banks are not expected to be
infallible. However, the case at bar involves not merely one or two
checks but a total of eighty-four altered and/or forged checks drawn
against plaintiffs account from December 1991 to January 1993. Over
this extended length of time, it is incomprehensible how defendant
and its personnel could ignore the large number of erasures and
alterations in the checks coming from plaintiff. The situation was
apparently facilitated by defendant's violation of its procedures.
According to its witnesses, Hilda Valderrama and Wilfredo Santos,
defendant calls the drawer for confirmation if a given check contains
technicalities, i.e., alterations and erasures, or when the check is above
a certain amount. However, Santos stated that there were instances
when he would no longer make any confirmation even if the
aforementioned circumstances were present because he personally
knew Anna Mabutas, the payee of the subject checks. In the instances
when he claimed to have called, it is still incomprehensible how he or
any one of defendant's officers and employees consistently failed to
contact Mr. Gonzalez during all that time.

Defendant's contention that plaintiff was furnished monthly

statements of account which should have allowed it to discover the
fraud early on cannot be given any weight inasmuch as defendant was
unable to present any evidence to prove its point. On the other hand, as
testified to by Mr. Gonzalez, plaintiff received these monthly bank
statements very late, if at all, such that they were forced to create their
own internal system for keeping track of how much money was in their
accounts.

The officers and employees of defendant's Legaspi AIM branch proved

to be negligent in safeguarding plaintiffs account. In the case of Bank of
Philippine Islands vs. Intermediate Appellate Court (206 SCRA 408), the
Supreme Court ruled that "(T)he bank xxx must bear the blame for not
discovering the mistake of its teller despite the established procedure
requiring the papers and bank book to pass through a battery of bank
personnel whose duty is to check and countercheck them for possible
errors. Apparently, the officials and employees tasked to do that did not
perform their duties with due care." So it must be in the case at bar.[8]
(Bold underscoring supplied for emphasis)

On appeal, the CA affirmed the RTC on January 21, 2004.[9]

Anent whether the checks marked and offered as Exhibits A to GGGG should be
stricken off the record for being mere machine copies of the originals of the
checks, the CA observed:
 Records show that the originals of a number of the checks were indeed
presented before the court for identification and examination by the
defendant's counsel, and that the latter had occasion to study the same.
Defendant therefore had the opportunity to peruse the originals of
these checks, and therefore, could have satisfied itself about the
identity of the checks in due time, particularly, whether the
photo/machine copies of the checks marked and submitted in evidence
are faithful reproductions of the originals.

It also appears from the proceedings that the photo/machine copies of

other checks were derived or reproduced from the microfilm copies
grudgingly made available by the defendant itself, because of the
unavailability of the originals.

Furthermore, defendant itself marked and offered in evidence the

same 84 checks in support of its own defense, offering them as records
of the propriety and validity of its own actions relating to the
transactions and payments being questioned by the plaintiff. It is
estopped therefore from questioning the identity and authenticity of
the same checks offered in evidence, as it has admitted the identity and
faithfulness of the subject checks on record.[10]

On the effect of the alterations on the checks, the CA, citing Section 124 of the Act
No. 2031 (The Negotiable Instruments Law),[11] pronounced:

Under this rule, a check that is materially altered without assent of all
the parties thereon is avoided. The check is not avoided, however, and
is considered valid as against a party who has himself, made,
authorized or assented to the alteration. Pertinently, the check is also
not avoided, and is deemed valid as against a subsequent indorser,
who by law, warrants under Sections 66 and 65 of the Negotiable
Instruments Law that the check is genuine and is in all respects what it
purports to be.

In this case, however, plaintiff's president Eugenio Juan Gonzalez

specifically denies that he had authorized or assented to the alterations
pointed out in the checks. Indeed, it appears that Gonzalez had no
knowledge at all of, much less authorize(d), any wrongful alteration or
intercalation in any of the checks which bear such visible alterations.

It also does not conclusively appear that any of the indorsements or

counter-signatures made by Gonzales was made subsequent to the
alteration in the altered checks. Even as some checks appear to bear
the indorsement or counter-signature by Gonzalez, there is no
direct or convincing circumstantial proof that the indorsements
were made by Gonzalez subsequent to and with the knowledge of
the wrongful alterations. On the contrary, Gonzalez himself
recounted on cross examination how his secretary Anna Mabutas
 would have him or other authorized signatories countersign checks,
and thereafter alter them and make it appear that the alterations were
authorized and countersigned by him.[12] (Bold emphasis supplied.)

In awarding damages to the respondent, the CA observed that moral damages

should be awarded to the respondent even if it was a corporation considering
that the respondent had a reputation that could be besmirched; and that the
award of exemplary damages and attorney's fees was proper "taking into
consideration the circumstances of the instant case," and in order to "deter
similar acts of negligence" by banking institutions.[13]

The petitioner filed a motion for reconsideration, but the CA denied the motion
for lack of "new and cogent reasons that could engender a reversal" of its
decision, and for lack of merit.

Issues

Hence, this appeal, in which the petitioner urges as follows:

I.
THE EIGHTY FOUR [84] CHECKS MARKED AS EXHIBITS "A" TO "GGGG,"
INCLUSIVE, ARE ALL XEROX OF THE MICROFILM COPIES, HENCE,
INADMISSIBLE PURSUANT TO THE BEST EVIDENCE RULE (SECTION 3,
RULE 130 OF THE RULES OF COURT). MOREOVER, SOME ORIGINALS
HAVE BEEN PRESENTED AND THUS EXIST BUT WERE NEVER OFFERED
IN EVIDENCE, HENCE, THE SECONDARY EVIDENCE IS LIKEWISE
INADMISSIBLE.

II.
ASSUMING WITHOUT ADMITTING THAT THE XEROX COPIES WERE
CORRECTLY ADMITTED BY THE TRIAL COURT, STILL, THE
HONORABLE COURT OF APPEALS FAILED TO GIVE EVIDENTIARY
WEIGHT AND CREDENCE TO THE COUNTERSIGNATURE OF THE
DRAWER APPEARING IN OR NEAR THE INTERCALATIONS OR
ALTERATIONS SIGNIFYING ITS ASSENT THERETO, AND, WORSE,
REQUIRED OF PETITIONER, AS DRAWEE BANK, PROOF THAT SAID
COUNTERSIGNATURES WERE PLACED THEREIN AFTER AND WITH
KNOWLEDGE OF THE CLAIMED INTERCALATIONS OR ALTERATIONS.

III.
RESPONDENT'S DULY AUTHORIZED SIGNATORY, EUGEN1O JUAN
GONZALEZ, INDORSED AT THE BACK OF THE EIGHTEEN [18] CHECKS,
TO WIT: EXHIBITS "A", "B", "H", "L", "R", "T", "V", "AA", "GG", "HH", "JJ",
"KK", "LL", "MM", "NN", "00", "SS", AND "MMM","  UNDERTAKING
THEREBY THE WARRANTIES OF A GENERAL ENDORSER AS PROVIDED
BY SECTION 66, IN RELATION TO SECTION 65 OF NEGOTIABLE
INSTRUMENTS LAW (ACT NO. 2031), WHICH NEGATE ANY CLAIM OF
INTERCALATIONS, ALTERATIONS, AND FORGERY.

IV.
THE FINDING THAT PETITIONER BANK "FAILED TO CALL OR INQUIRE
WITH THE PROPER OFFICERS OF PLAINTIFF" IS CONTRARY TO
OVERWHELMING EVIDENCE. TRUTH OF THE MATTER IS THAT IT IS
RESPONDENT WHO WAS CLEARLY NEGLIGENT IN FAILING TO DO ITS
DUTY TO MONITOR ITS CHECKS AND RECONCILE THE AMOUNT IN ITS
CHECKING ACCOUNT WITH THE CHECK BOOK STUB, BANK
STATEMENT OF ACCOUNT AND OTHER PERTINENT DOCUMENTS.

V.
THE HONORABLE COURT OF APPEALS AWARDED MORAL DAMAGES
NOTWITHSTANDING THE ADMITTED FACT THAT RESPONDENT IS A
CORPORATION, HENCE IS NOT ENTITLED TO MORAL DAMAGES (ABS-
CBN BROADCASTING CORPORATION VS. COURT OF APPEALS, 301
SCRA 572, 602).

VI.
THE AWARD OF EXEMPLARY DAMAGES AND ATTORNEY'S FEES ARE
UNJUST AND UNREASONABLE INASMUCH AS PETITIONER BANK DID
NOT ACT IN A WANTON, FRAUDULENT, RECKLESS, OPPRESSIVE OR
MALEVOLENT MANNER.[14]

The respondent opposes the appeal, countering thusly:

I
THE PETITION MUST BE DENIED DUE COURSE AS IT DOES NOT RAISE
ANY REAL QUESTION OF LAW, BUT RATHER, IMPROPERLY SEEKS TO
ASSAIL THE FINDINGS OF FACT MADE BY THE TRIAL COURT AND THE
COURT OF APPEALS.

II
THE TRIAL COURT AND THE COURT OF APPEALS CORRECTLY RULED
IN FAVOR OF ADMISSIBILITY OF THE RESPONDENT'S EVIDENCE.

A.
THE ORIGINAL CHECKS IN THE POSSESSION OF RESPONDENT
WELBILT WERE PRESENTED FOR THE EXAMINATION OF THE TRIAL
COURT, AND SUFFICIENT BASIS HAD BEEN LAID FOR THE ADMISSION
OF TFIE PHOTOCOPIES, WHICH IN THE FIRST PLACE HAD BEEN
SOURCED FROM PETITIONER CBC'S OWN MICROFILM RECORDS.

B.
ASSUMING FOR THE SAKE OF PURE ARGUMENT THAT BASIS HAD NOT
BEEN LAID FOR THE ADMISSION OF THE PHOTOCOPIED CHECKS,
PETITIONER NEVERTHELESS WAIVED ITS OBJECTION TO THE SAME
WHEN IT USED THESE EXACT SAME PHOTOCOPIES AS ITS OWN
EVIDENCE.

III
THE TRIAL COURT CORRECTLY FOUND, AND THE COURT OF APPEALS
CORRECTLY AFFIRMED, THAT PETITIONER CBC WAS NEGLIGENT IN
CONSISTENTLY HONORING OR ALLOWING THE ENCASHMENT OF
SUCH A LARGE NUMBER OF OBVIOUSLY ALTERED AND FORGED
CHECKS OVER A SPAN OF MORE THAN TWO (2) YEARS.

A.
RESPONDENT WELBILT'S AUTHORIZED SIGNTORY DID NOT
COUNTERSIGN ANY OF THE ALTERED CHECKS, VIRTUALLY ALL OF
WHICH BEAR ALTERATIONS THAT ARE READILY APPARENT TO THE
MOST UNTRAINED EYE, NOR DID HE INDORSE THE SAME; EVEN IF IT
IS ASSUMED FOR THE SAKE OF PURE ARGUMENT THAT THERE WAS
SUCH INDORSEMENT, THE PETITIONER BANK WAS NONETHELESS
NEGLIGENT IN ALLOWING ENCASHMENT INASMUCH AS THE
WARRANTIES OF A GENERAL INDORSER AS PROVIDED FOR IN SECS.
65 & 66 OF THE NEGOTIABLE INSTRUMENTS LAW ONLY EXTEND TO
SUBSEQUENT HOLDERS IN DUE COURSE, WHICH PETITIONER CBC IS
NOT.

B.
RESPONDENT WELBILT COULD NOT HAVE BEEN DEFRAUDED OF
ALMOST TWO MILLION PESOS WERE IT NOT FOR THE NEGLIGENCE,
IF NOT ACTIVE PARTICIPATION AND CONNIVANCE, OF CERTAIN
OFFICERS AND EMPLOYEES IN PETITIONER CBC'S LEGASPI-AIM
BRANCH.

C.
AN INHERENT FLAW IN PETITIONER CBC'S PROCEDURE FOR
PROCESSING CHECKS PRESENTED TO IT FOR PAYMENT ALLOWED
RESPONDENT WELBILT'S BANK ACCOUNT TO BE SYSTEMATICALLY
LOOTED FOR A PERIOD STRETCHING MORE THAN TWO YEARS.

IV
THE TRIAL COURT CORRECTLY FOUND, AND THE COURT OF APPEALS
RIGHTLY AFFIRMED, THAT THERE WAS NO NEGLIGENCE ON THE
PART OF RESPONDENT WELBILT CONSIDERING THAT PETITIONER
CBC WAS NOT ONLY THE PROXIMATE CAUSE OF THE RESPONDENT'S
LOSS, BUT MORE IMPORTANTLY, IT HAD THE LAST CLEAR CHANCE TO
PREVENT SUCH LOSS.

V
PETITIONER CBC IRRESPONSIBLY AND RECKLESSLY ACCUSED THE
COURT OF APPEALS OF GRAVE ERROR FOR SUPPOSEDLY MIS-CITING
THE BANK OF THE PHILIPPINE ISLANDS CASE IN AFFIRMING THE
AWARD OF MORAL DAMAGES TO HEREIN RESPONDENT WHEN A
PLAIN EXAMINATION OF THE DECISION SUBJECT OF THE PRESENT
 PETITION WOULD READILY SHOW THAT THE COURT OF APPEALS
NEVER CITED BANK OF THE PHILIPPINE ISLANDS INSOFAR AS MORAL
DAMAGES ARE CONCERNED.

VI
THE TRIAL COURT RIGHTLY ORDERED, AND THE COURT OF APPEALS
CORRECTLY AFFIRMED, THE AWARD OF EXEMPLARY DAMAGES AND
ATTORNEY'S FEES IN VIEW NOT ONLY OF THE WANTON AND
RECKLESS NEGLIGENCE WHICH CHARACTERIZED THE PETITIONER
BANK'S MISMANAGEMENT OF RESPONDENT WELBILT'S ACCOUNT,
BUT MORE SO IN THE OPPRESSIVE AND MALEVOLENT MANNER IN
WHICH IT THEREAFTER TRIED TO DISAVOW ALL FAULT AND
RESPONSIBILITY FOR ITS WRONGFUL ACTIONS.[15]

Ruling of the Court

The appeal lacks merit, but the Court tempers the award of damages.

1.
Admissibility of secondary evidence of the checks

The cause of action of the respondent rested on its suffering damages as the
consequence of the payment of the total sum of PI,964,936.80 from its current
account representing the value of 84 checks allegedly altered by Mabutas and
other persons. Thus, the respondent, as the party alleging the unauthorized
alterations, carried the burden of proving its allegation,[16] and should have
proved the unauthorized alterations of the 84 checks through the presentation of
the originals of the checks.

The RTC needed to examine the originals of the checks themselves because the
defilement of the 84 checks through unauthorized alteration would only be
detected from an examination of the originals of the checks. In the end, only 32
originals of the checks were produced in court.[17] Named payees in the 32
checks were Mabutas, Atty. James D. Lansang, Orlando de Lara, Chona Ilagan,
Meralco, PLDT, Marilou Maniego, Clemente Sentino, Architectural Centre Club,
Inc. and Galmani Tradingola and/or Roberto Gonzalez, with three checks being
payable to cash.[18] The transcripts of the trial proceedings show that whenever
the counsel for the petitioner asked Gonzalez on the witness stand for the
original of the 52 other checks, either he or his counsel only stated that the
particular check in question was either not in the possession of the respondent
or not available.[19]

The respondent's non-presentation of the originals of all the checks signified that
only the 32 originals were admissible in evidence. In view of the practice of
banks to return the encashed checks to the drawer, however, the originals of all
the checks could only be in the possession of the respondent in line with the
presumption that the ordinary course of business had been followed.[20] Thus,
the respondent failed to prove the unauthorized alterations of the 52 remaining
checks because of its non-presentation of the originals of said checks.

All that the respondent produced as to the 52 checks were the printouts of their
microfilms in the custody of the petitioner. Could such printouts serve the
avowed purpose?

The printouts were inadmissible to prove the unauthorized alterations. To

accord with the Best Evidence Rule, the originals of the 52 checks should be
produced because their defilement by means of the unauthorized alterations
went to the contents of each check, and, as such, was the subject of inquiry. The
Best Evidence Rule requires the production of the highest degree of proof
available. Such proof is the original of the document whose contents are the
subject of inquiry. The printouts, being secondary or substitutionary evidence,
[21] should be excluded.

Section 3, Rule 130 of the Rules of Court enunciates the Best Evidence
Rule, to wit:

Section 3. Original document must be produced; exceptions. - When the

subject of inquiry is the contents of a document, no evidence shall
be admissible other than the original document itself, except in the
following cases:

(a) When the original has been lost or destroyed, or cannot be

produced in court, without bad faith on the part of the offeror;

(b) When the original is in the custody or under the control of the party
against whom the evidence is offered, and the latter fails to produce it
after reasonable notice;

(c) When the original  consists  of numerous  accounts or other

documents which cannot be examined in court without great loss of
time and the fact sought to be established from them is only the general
result of the whole; and

(d) When the original is a public record in the custody of a public

officer or is recorded in a public office. (Bold emphasis supplied.)

The Court expounds on the purpose of the Best Evidence Rule, viz.:

Before the onset of liberal rules of discovery, and modern technique of

electronic copying, the best evidence rule was designed to guard
against incomplete or fraudulent proof and the introduction of altered
copies and the withholding of the originals. But the modern
justification for the rule has expanded from the prevention of fraud
to a recognition that writings occupy a central position in the law.
The importance of the precise terms of writings in the world of
 legal relations; the fallibility of the human memory as reliable
evidence of the terms, and the hazards of inaccurate or incomplete
duplicate are the concerns addressed by the best evidence rule.

The rule does not apply to proof of facts collateral to the issues such as
the nature, appearance or condition of physical objects or to evidence
relating to a matter which does not come from the foundation of the
cause of action or defense; or when a party uses a document to prove
the existence of an independent fact, as to which the writing is merely
collated or incidental.[22] (Emphasis supplied.)

Section 4, Rule 130 of the Rules of Court defines what the original of a document
is, to wit:

Sec. 4. Original of document. - (a) The original of a document is one

the contents of which are the subject of inquiry.

(b)When a document is in two or more copies executed at or about the

same "time, with identical contents, all such copies are equally
regarded as originals.

(c)When an entry is repeated in the regular course of business, one

being copied from another at or near the time of the transaction, all the
entries are likewise   equally disregarded as originals. (Bold emphasis
supplied.)

It bears emphasis that a photocopy or machine copy of a check, being merely

secondary evidence, is not admissible  in evidence to prove the contents of the
check unless it is shown that the original is not available.[23] Accordingly, if the
originals of the 52 checks were not available, the respondent should have
followed the procedure laid down in Section 5 of Rule 130, to wit:

Section 5. When original document is unavailable. - When the original

document has been lost or destroyed, or cannot be produced in court,
the offeror, upon proof of its execution or existence and the cause of its
unavailability without bad faith on his part, may prove its contents by
a copy, or by a recital of its contents in some authentic document, or by
the testimony of witnesses in the order stated. (Emphasis supplied.)

Section 5 called upon the respondent as the offeror of secondary evidence to

prove: (1) the existence or due execution of the original checks; (2) the loss or
destruction of the original checks or the reason for their non-production in court;
and (3) the absence of bad faith on the part of the offeror to which the
unavailability of the original checks could be attributed.[24] The correct order of
proof in this regard was as follows: existence, execution, loss, and contents.[25]

Although the printouts of the microfilms of the 52 checks that the petitioner kept
were presented, the responsibility of proving the loss or unavailability of the
originals of the checks devolved upon the respondent as the logical possessor of
the originals of the checks. However, the respondent did not explain the
unavailability of the originals of the checks. There is, indeed, no record showing
that the respondent established the loss or unavailability of the originals of said
checks.[26] The mere assertions at the trial about the unavailability of the
originals of the checks by Gonzalez and the respondent's counsel, without more,
did not render the printouts of the checks admissible as evidence.

Moreover, the production and marking in court of the originals of the checks
alone would not have sufficed for their admission as evidence and for their
eventual consideration by the trial court in deciding the case. Rule 132 of the
Rules of Court further required that the respondent formally offer such originals,
to wit:

Section 34. Offer of evidence. - The court shall consider no evidence

which has not been formally offered. The purpose for which the
evidence is offered must be specified.

Conformably with the rule, evidence not formally offered is no evidence in law
at all.

Nonetheless, the petitioner asserts that "while it is true respondent presented

some original copies during the trial, the original or faithful reproduction of the
original were never offered in evidence" in the trial court.[27]

The assertion is unwarranted.

The need to formally offer evidence cannot be overemphasized. According to

Union Bank of the Philippines v. Tiu:[28]

x x x a formal offer is necessary because judges are mandated to rest

their findings of facts and their judgment only and strictly upon the
evidence offered by the parties at the trial. It has several functions: (1)
to enable the trial judge to know the purpose or purposes for which the
proponent is presenting the evidence; (2) to allow opposing parties to
examine the evidence and object to its admissibility; and (3) to
facilitate review by the appellate-court, which will not be required to
review documents not previously scrutinized by the trial court, x x x.

Only after the formal offer of evidence may the objection thereto be registered.
[29]Thereafter, the trial court has to rule on the admissibility of the offered
evidence bearing in mind that where a document is the foundation of the action,
more stringent proof is required than where the document is only collaterally
involved.[30] Thus, "[unless and until admitted by the court in evidence for the
purpose or purposes for which such document is offered, the same is merely a
scrap of paper barren of probative weight."[31]
The respondent actually submitted an "Offer of Exhibits,"[32] and the petitioner
then filed its "Objections and/or Comments to Plaintiffs Offer of Exhibits."[33]In
the "Offer of Exhibits," the respondent sought the admission of the "exhibits and
the testimony of witnesses Cristina Gonzalez-Feibel, Eugenio Juan Gonzalez, and
Eliodoro M. Constantino." The respondent thereby sufficiently complied with the
requirement for the formal offer of evidence of the originals of the 32 checks.

The RTC and the CA did not mention in their respective decisions that the loss or
unavailability of the rest of the altered checks had been duly established. Hence,
the admission by the RTC of the printouts of such checks, although part of the
respondent's formal offer of evidence, was irregular and erroneous.

The respondent insists that the petitioner was already estopped from
questioning the value of the 52 machine-copied checks because they had been
copied from its own microfilms of the checks, and the petitioner had even
marked the photocopies as its own evidence.[34] The respondent adds that the
RTC had in fact ruled on the admissibility of the photocopied evidence. As such,
the respondent insists that the petitioner, being the source of the photo or
machine-copied 52 checks, had no right to question them on the basis of their
lack of authenticity.

The insistence of the respondent does not persuade.

Even if the printous had been sourced from the microfilms in the possession and
under the control of the petitioner, the 52 copies, albeit formally offered in
evidence, had no evidentiary value simply because the respondent had not
proved the loss or unavailability of the originals of the checks. Thus, they were
improperly admitted as evidence. At any rate, the decisive issue of alteration
could not be determined from the examination of the photocopies of the 52
checks generated from the microfilms. Thus, the case should be decided based
only on the 32 originals but tampered checks formally offered and admitted as
evidence.

2.
The signature and countersignatures
of the drawer in the altered checks

The petitioner posits that Gonzalez's denial of having authorized the alterations
found in the checks by his countersignature was erroneously considered by the
CA as a fact that needed proof of the time when he had actually affixed the
countersignatures - whether before or after the alterations.

On its part, the respondent claims that Mabutas secured the countersignature
either when Gonzales was being distracted or after telling Gonzales that she had
committed minor mistakes in the writing or typing or the dates or amounts of
the checks.[35]
The authenticity of the signatures of Gonzales was not disputed. Thus, as far as
the 32 originals were concerned, Gonzales affixed his signatures either as the
drawer or as the indorser. Being the authorized drawer of the checks in behalf of
the respondent, he thereby imposed upon the respondent the liabilities of a
drawer under the Negotiable Instruments Laws, viz.:

Sec. 61. Liability of drawer. - The drawer by drawing the instrument

admits the existence of the payee and his then capacity to indorse; and
engages that, on due presentment, the instrument will be accepted or
paid, or both, according to its tenor, and that if it be dishonored and the
necessary proceedings on dishonor be duly taken, he will pay the
amount thereof to the holder or to any subsequent indorser who may
be compelled to pay it. But the drawer may insert in the instrument an
express stipulation negativing or limiting his own liability to the
holder.

Considering that the original checks presented in evidence showed that the
respondent, through Gonzalez, did not express any "negativing or limiting"
stipulation on its liability as a drawer, such as "without recourse," the
respondent was liable as the drawer of the checks.

The petitioner alleges that Gonzalez indorsed 18 checks by affixing his signatures
at the dorsal side of the checks. Having signed the checks as an indorser, his
"signature, without additional words, is a sufficient indorsement."[36] It is settled
that when a person affixes his signature as a drawer or indorser of a check, "the
Negotiable Instruments Law specifies and defines his liability, and parol evidence
is not admissible to explain or defeat such liability."[37] It is noted, however, that
not all the 18 checks indorsed by Gonzalez were originals properly admitted in
evidence; some of the 18 checks were photocopies of the checks. These facts
should be considered in the determination of liabilities.

The contention that Gonzalez, by countersigning, authenticated the checks

resulting in the validation of the alterations, finds support in the meaning of
countersign, the use of which the respondent did not dispute in the pleadings. To
countersign means "to sign what has already been signed by a superior; to
authenticate by an additional signature; and hence, where the signature of a
person appeared on the instrument, it was not open to the objection that.it was
not signed though the signature was preceded by the word 'Countersigned.'"[38]
In other words, even a check with an altered amount is authenticated by the
countersignature of a person authorized to sign the check for someone else.

Evidence on when Gonzalez signed or countersigned a check may not affect its
admissibility and evidentiary weight. What is material are the facts that he did
countersign altered checks, and that the countersignature was his. This rule
applies with vigor herein where the evidence offered on how the
countersignature was obtained by Mabutas from Gonzalez was self-serving -it
was Gonzalez himself who testified on such fact without the supporting
testimony of an independent and credible witness. Accordingly, the petitioner
correctly honored the countersigned checks with alterations and charged them
to the account of the respondent as the drawer.

3.
Negligence of parties a factor in
the determination of liabilities

The RTC's erroneous admission of the photocopies of the 52 checks as evidence,

coupled with its acceptance as true of the self-serving claims of the witnesses of
both parties, could only serve to mitigate liabilities.

For instance, why did it take more than a year for the respondent to discover the
depletion of deposited amounts in its current account? If, indeed, its checks were
dishonored and some creditors like the Metropolitan Club acted accordingly by
delisting it from its roll of members, why did it take the daughter of Gonzalez,
not Gonzalez himself, to put in motion an investigation of its accounts? On the
part of the petitioner, even ordinary diligence would have led its branch officials
to notice and protest the continuous encashment of altered checks, particularly
because the office of the respondent was only a floor away from the branch
premises. The physical proximity of the petitioner to the respondent would
ordinarily produce a cordial relationship among their employees, but why was
the attempt of a representative of the petitioner to thresh out matters foiled by a
refusal of entry into the respondent's office?

Time and again, banks have borne the brunt in situations similar to the one at
hand primarily because the banking business is impressed with public interest.
No less than extraordinary diligence is required of banks in conducting
transactions because the law imposes on them "a high degree of obligation to
treat the accounts of its depositors with meticulous care, always having in mind
the fiduciary nature of banking."[39] In the interest of justice, however, in cases
where banks accept and pay altered checks, the Court has to determine which
between the bank and the drawer of the check was the proximate cause of the
resulting damage.

In Equitable PCI Bank v. Tan,[40] the Court observed:

Proximate cause is that cause which, in a natural and continuous

sequence," unbroken by any efficient intervening cause, produces the
injury, and without which the result would not have occurred. The
proximate cause of the loss is not respondent's manner of writing the
date of the check, as it was very clear that he intended Check No.
275100 to be dated May 30, 1992 and not May 3, 1992. The proximate
cause is petitioner's own negligence in debiting the account of the
respondent prior to the date as appearing in the check, which resulted
in the subsequent dishonor of several checks issued by the respondent
and the disconnection by ASELCO and ANECO of his electric supply.[41]
Proximate cause is determined by the facts of each case upon "mixed
considerations of logic, common sense, policy and precedent."[42] In the
determination of which of the parties' acts became the proximate cause of the
damage, the doctrine of "last clear chance" could be applied. As the Court has
explained in Philippine Bank of Commerce v. Court of Appeals:[43] that-

x x x where both parties are negligent, but the negligent act of one is
appreciably later in time than that of the other, or when it is impossible
to determine whose fault or negligence should be attributed to the
incident, the one who had the last clear opportunity to avoid the
impending harm and failed to do so is chargeable with the
consequences thereof. Stated differently, the rule would also mean that
an antecedent negligence of a person does not preclude the recovery of
damages for the supervening negligence of, or bar a defense against
liability sought by another, if the latter, who had the last fair chance,
could have avoided the impending harm by the exercise of due
diligence, x x x.

Where it is difficult to determine which party had the last clear chance to avoid
the damage, the Court has adopted a formula to address the situation. In Bank of
Commerce v. Court of Appeals,[44] the Court, upon considering both the "wanton
and reckless negligence" of the employees of the bank, and the failure of the
depositor to exercise "even a little vigilance in their financial affair," has ruled
that "the demands of substantial justice are satisfied by allocating the damage on
a 60-40 ratio." In Consolidated Bank and Trust Corporation v. Court of Appeals, [45]
the Court applied the 60-40 ratio used in the sharing of actual damages,
explaining:

Under Article 1172, "liability (for culpa contractual) may be regulated

by the courts, according to the circumstances." This means that if the
defendant exercised the proper diligence in the selection and
supervision of its employee, or if the plaintiff was guilty of
contributory negligence, then the courts may reduce the award of
damages, x x x.

In Bank of America NT & SA v. Philippine Racing Club,[46] the Court followed the
"established jurisprudential precedents" and applied the same 60-40 allocation of
actual damages. In Philippine National Bank v. F.F. Cruz and Co., Inc., [47] the
Court affirmed the decision of the CA allocating actual damages on a 60-40 basis
upon a finding that the negligence of the bank was the proximate cause of the
loss and the depositor committed contributory negligence.

Herein, although the petitioner's negligence was the proximate cause of the
damage due to the encashment of the manifestly tampered checks, the
respondent's failure to discover and check the machinations of Mabutas, and its
apparent laxity in handling its current account contributed to such negligence.
Considering that 52 of the 84 checks were inadmissible in evidence, however, the
60-40 allocation of actual damages should be based only on the amounts of the
32 checks duly admitted in evidence.

Anent moral and exemplary damages, the following pronouncement AW in

Philippine National Bank v. Rocamora[48] is instructive:

Moral damages are not recoverable simply because a contract has been
breached. They are recoverable only if the defendant acted
fraudulently or in bad faith or in wanton disregard of his contractual
obligations. The breach must be wanton, reckless, malicious or in bad
faith, and oppressive or abusive. Likewise, a breach of contract may
give rise to exemplary damages only if the guilty party acted in a
wanton, fraudulent, reckless, oppressive or malevolent manner.[49]

There was no sufficient evidence to show that the petitioner had acted
fraudulently or in bad faith in honoring the altered checks. There was also no
proof sufficiently demonstrating that the petitioner had wantonly disregarded its
contractual obligation to take extraordinary care of the deposits of the
respondent. Moreover, the respondent, being a corporation, was not entitled to
moral damages. In that regard, the petitioner correctly cited the ruling in ABS-
CBN Broadcasting Corporation v. Court of Appeals,[50] to wit:

The award of moral damages cannot be granted in favor of a

corporation because, being an artificial person and having existence
only in legal contemplation, it has no feelings, no emotions, no senses.
It cannot, therefore, experience physical suffering and mental anguish,
which can be experienced only by one having a nervous system. The
statement in People vs Manero and Mambulao Lumber Co. v. PNB that a
corporation may recover moral damages if it "has a good reputation
that is debased, resulting in social humiliation" is an obiter dictum. On
this score alone the award of damages must be set aside, since RBS is a
corporation.[51]

Assuming, moreover, that it could recover moral damages, the respondent did
not sufficiently establish that its reputation had been besmirched by the acts of
the petitioner in the handling of its accounts. As a basis to claim damages for
moral injury, reputation could not be merely presumed but should be proved as
a fact. Nor would the fact that Gonzalez had to suffer sleepless nights and
anguish because of the acts of Mabutas and the petitioner entitle the respondent
to moral damages. The sufferance of Gonzalez should be differentiated from
those of the respondent by virtue of their personalities being distinct and
separate.

Anent exemplary damages, Article 2229 of the Civil Code provides that
exemplary damages are "imposed by way of example or correction for the public
good, in addition to the moral, temperate, liquidated or compensatory damages."
Article 2234 of the same Code provides that to be entitled to exemplary damages,
the "plaintiff must show that he is entitled to moral, temperate or compensatory
damages before the court may consider the question of whether or not
exemplary damages should be awarded."

In this connection, we held in Equitable PCI Bank v. Tan:[52]

The law allows the grant of exemplary damages to set an example for
the public good. The banking system has become an indispensable
institution in the modern world and plays a vital role in the economic
life of every civilized society. Whether as mere passive entities for the
safekeeping and saving of money or as active instruments of business
and commerce, banks have attained an ubiquitous presence among the
people, who have come to regard them with respect and even gratitude
and most of all, confidence. For this reason, banks should guard against
injury attributable to negligence or bad faith on its part. Without a
doubt, it has been repeatedly emphasized that since the banking
business is impressed with public interest, of paramount importance
thereto is the trust and confidence of the public in general.
Consequently, the highest degree of diligence is expected, and high
standards of integrity and performance are even required of it.
Petitioner, having failed in this respect, the award of exemplary
damages in the amount of f 50,000.00 is in order.[53]

In this case, the respondent was entitled to compensatory or actual damages,

although mitigated, but not to moral damages, it being a corporation that, by
jurisprudence, was not entitled to such damages. Since exemplary damages
cannot be recovered as a matter of right, and the law allows the court to decide
whether or not such damages should be adjudicated,[54] and considering that the
petitioner is a corporate body imbued with public interest, exemplary damages
may be awarded to the respondent but the amount is subject to our discretion in
light of the circumstances of the case. For this purpose, We deem the amount of
P50,000.00 as the proper amount of exemplary damages.

With respect to attorney's fees, Article 2208 of the Civil Code states that such fees
and expenses of litigation other than judicial costs cannot be recovered except "
[w]hen exemplary damages are awarded." As in Equitable PCI Bank v. Tan, the
respondent was compelled to resort to judicial action to protect its interest and,
by virtue thereof, it is entitled to attorney's fees but not in the exorbitant amount
of P500,000.00. Hence, we grant to the respondent attorney's fees of P50,000.00.

WHEREFORE, the Court AFFIRMS the decision of the Court of Appeals subject to
the following MODIFICATIONS, to wit: (1) ordering the petitioner to pay to the
respondent the equivalent of 60% of the value of the 32 original checks duly
admitted in evidence as actual damages, plus legal interest of 6% per annum
from the filing of the complaint until full satisfaction; (2) deleting the award of
moral damages; and (3) directing the petitioner to pay to the respondent
exemplary damages of P50,000.00, and attorney's fees.of P50,000.00.

The petitioner shall pay the costs of suit. "

SO ORDERED."

  Very truly yours,  

     
     
(Sgd.)WILFREDO
   
V. LAPITAN
Division Clerk of
   
Court

[1]Rollo,
pp. 10-21; penned by Associate Justice Rodrigo V. Cosico, and concurred
in by Associate Justice Mariano C. del Castillo (now a Member of the Court) and
Associate Justice Rosalinda Asuncion-Vicente.

[2]Id. at 307-317; presided by Judge Nemesio S. Felix.

[3]Id. at 412-427.

[4]Id. at 311-312.

[5]Supra note 2.

[6]Id. at 3 13-314.

[7]G.R. No. 109803, April 20, 1998, 289 SCRA 178.

[8]Rollo, pp. 319-330.

[9]Supra note I.

[10]Id. at 16.

[11]Thisprovision states:
Sec. 124. Alteration of instrument; effect of. - Where a negotiable instrument is
materially altered without the assent of all parties liable thereon, it is avoided,
except as against a party who has himself made, authorized, or assented to the
alteration and subsequent indorsers.
But when an instrument has been materially altered and is in the hands of a
holder in due course not a party to the alteration, he may enforce payment
thereof according to its original tenor.

[12]Rollo, pp. 17-18.

[13]Id. at 20.

[14]Id. at 42-44.

[15]Rollo, pp. 4 19-42 I.

[16]Citibank,N.A. Mastercard v.  Teodoro, G.R. No.  150905, September 23, 2003,
411  SCRA 577, 583 citing Intestate Estate of the Late Don Mariano San Pedro y
Esteban v. Court of Appeals, G.R. No. 103727, December 18, 2006, 265 SCRA 733
and Trans-Pacific Industrial Supplies, Inc. v. Court of Appeals, G.R. No. 109172,
August 19, 1994, 235 SCRA 494.

[17]The petitioner claims that only 23 were originals of the checks were
presented (see petition, p. 21; rollo, p. 46).

[18]Specifically,the checks were Exhibits F, G, H, I, J, K, L, M, N, O, Q, R, Y, Z, AA,

BB, CC, DD, EE, FF, GG, HH, 11, JJ, QQ, SS, UU, LLL, MMM, NNN, PPP, and SSS.

[19]TSN,June24, 1996, pp.11-12,20-21,25,27,55,57,61,63,65.

[20]Sec. 3 (q), Rule 131 of the Rules of Court.

[21]Citibank,
N.A. (Formerly First National City Bank) v. Sabeniano, G.R. No.
156132, October 16, 2006, 504 SCRA 378, 457.

[22]Lee v. People, G.R. No. 159288, October 19, 2004, 440 SCRA 662, 683.

[23]Country Bankers Insurance Corporation v. Lagman, G.R. No. 165487, July 13,
2011, 653 SCRA 765, 777.

[24]Id.

[25]Id.,
citing Citibank, N.A. Mastercard v. Teodoro, G.R. No. 150905, September 23,
2003, 411 SCR A 577, 585; and De Vera v. Agvilar, G.R. No. 83377, February 9,
1988, 218 SCRA 602, 606.
[26]CristinaGonzalez-Feibel claimed in the witness stand that respondent had
filed a criminal case against Anna Maria L. Mabutas (Rollo, p. 112).

[27]Rollo, p. 50.

[28]G.R.No. 173090-91, September 7, 2011, 657 SCRA 86, 110-111; Heirs of Pedro
Pasag v. Parocha, G.R. No. 155483, April 27, 2007, 522 SCRA 410, 416.

[29]Westmont Investment Corporation v. Fruncia, Jr., G.R. No. 194128, December 7,

2011, 661  SCRA 787, 794.

[30]Lee
v. People, supra note 21, at 683-684, citing Serirner v. American Car and
Foundry Co., 50 S.W. 1001.

[31]Heirs of the Deceased Carmen Cruz-Zamora v. Multiwood International, Inc.,

G.R. No. 146428, January 19, 2009, 576 SCRA 137, 145.

[32]Records, pp. 194-221.    

[33]Id. at 222-224.

[34]Rollo, pp. 431-440.

[35]Id. at 441.

[36]Sec. 31 of the Negotiable Instruments Law states: "The indorsement must be

written on the instrument itself or upon a paper attached thereto. The signature
of the indorser, without additional words, is a sufficient indorsement."
The Negotiable Instruments Law further states:
Sec. 65. Warranty where negotiation by delivery and so forth. - Every person
negotiating an instrument by delivery or by a qualified indorsement warrants:

(a)That the instrument is genuine and in all respects what it purports to be;
(b)That he has a good title to it;
(c)That all prior parties had capacity to contract;
(d)That he has no knowledge of any fact which would impair the validity of the
instrument or render it valueless.
But when the negotiation is by delivery only, the warranty extends in favor of no
holder other than the immediate transferee.
The provisions of subdivision (c) of this section do not apply to a person
negotiating public or corporation securities other than bills and notes.
Sec. 66. Liability of general indorser. - Every indorser who indorsees without
qualification, warrants to all subsequent holders in due course:
(a) The matters and things mentioned in subdivisions (a), (b), and (c) of the next
preceding section; and
(b) That the instrument is, at the time of his indorsement, valid and subsisting;
And, in addition, he engages that, on due presentment, it shall be accepted or
paid, or both, as the case may be, according to its tenor, and that if it be
dishonored and the necessary proceedings on dishonor be duly taken, he will
pay the amount thereof to the holder, or to any subsequent indorser who may be
compelled to pay it.

[37]Velasco v. Tan Liuan & Co., 43 Phil. 195, 202 (1922)

[38]10 Words and Phrases 44, citing Gurnee v. City of Chicago, 40 III. 165, 167

[39]Gonzales v. Philippine Commercial and International Bank, G.R. No. 180257,

February 23, 2011, 644 SCRA 180,201,205-206.

[40]G.R. No. 165339, August 23, 2010, 628 SCRA 520.

[41]Id. at 535.

[42]Philippine
Bank of Commerce v. Court of Appeals, G.R. No. 97626, March 14,
1997, 269 SCRA 695, 706.

[43]Id. at 707-708.

[44]Id. at 710.

[45]G.R. No. 138569, September 11,2003,410 SCRA 562, 581.

[46]G.R. No. 150228, July 30, 2009, 594 SCRA 301. 316.

[47]G.R. No. 173259, July 25, 2011, 654 SCRA 333.

[48]G.R. No. 164549, September 18, 2009, 600 SCRA 395.

[49]Id. at 411-412.

[50]G.R. No. 128690, January 21,1999, 301 SCRA 572.

[51]Id. at 602-603.

[52]G.R. No. 165339, August 23, 2010, 628 SCRA 520.

[53]Id. at 542.
[54]Civil Code, Art. 2233.

URES

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