Metropolitan Bank and Trust Company vs.

Court of Appeals, Rural Bank of Padre

Garcia, Inc. and Isabel Katigbak
G.R. No. 112576, October 26, 1994
ROMERO, J.:

FACTS:
Respondent Isabel Katigbak is the president and director of Rural Bank of Padre
Garcia, and petitioner Metrobank serves as RBPG’s depository bank and it is also
where Katigbak maintains her current accounts.
On April 6, 1982, Metrobank received a credit memo from the Central Bank
amounting to P304,000 in favor of RBPG that represented loans granted by the Central
Bank. In lieu of the credit memo, Katigbak issued checks amounting to P300,000
against its Metrobank account.
Two checks, amounting to P25,000 each, were made payable to a certain Dr.
Felipe Roque and Mrs. Eliza Roque. The checks were then deposited by the Spouses
Roque to Philippine Banking Corporation. However, when the checks were forwarded to
Metrobank for payment, the checks were returned with the annotation that the checks
were drawn against insufficient funds. It was redeposited in the next clearing but the
checks were still dishonored and returned unpaid.
Dr. Felipe Roque, who was apparently a member of the Board of Directors of
Philippine Banking Corporation, went to berate an officer of RBPG because of the
bouncing checks. To calm the doctor, he was given P50,000 cash to replace the
aforesaid checks.
On April 13, 1982, Isabel Katigbak and her sons were on a business-vacation trip
in Hongkong. They then received an overseas call from Mrs. Maria Katigbak-San Juan
and was informed that Mr. Rizal Dungo, who was an Assistant Cashier of Metrobank,
kept berating her about the bounced checks even though he was informed that Mrs.
San Juan was not connected to RBPG. The following day, Mrs. San Juan received
another insulting call from Mr. Dungo about the bounced checks, and when he was told
to verify the records regarding the Central Bank credit memo, he ignored it and
sarcastically told her that such credit memo does not exist. Being informed about this
second incident, the Katigbaks cut their trip short and immediately flew back to Manila.
Upon arriving in Manila, Mrs. Katigbak immediately called Metrobank to re-
examine the records regarding the Central Bank credit memo, but Mr. Dungo again
ignored this and instead arrogantly said: “Bakit kayo magagalit, wala naman kayong
pondo?” Mrs. Katigbak was so shocked by Mr. Dungo’s remarks that she had to
undergo medical treatment because her blood pressure reached a dangerous level.
 Metrobank not only dishonored the two checks that were issued, but petitioner
also issued 4 debit memos drawn against RBPG for service and penalty charges for the
returned checks. RBPG and Mrs. Katigbak then filed a civil case against Metrobank for
damages.
Metrobank alleged that on April 6, 1982, their messenger received several credit
memos from the Central Bank, which apparently included one made in favor of RBPG.
The said credit memo was apparently lost because of the messenger’s carelessness
and was thus, not processed. This resulted to RBPG’s account to have insufficient
funds when the checks were drawn. It was only on April 15, 1982 when the P304,000
was credited to RBPG’s account, when the Central Bank confirmed the veracity of a
credit advice issued in favor of RBPG.
The trial court ruled against Metrobank and was ordered to pay Mrs. Katigbak
P50,000 as temperate damages, P500,000 as moral damages and P100,000 as
attorney’s fees and to pay the costs of suit.
Metrobank appealed to the Court of Appeals alleging that there is no factual or
legal basis for the award of temperate and moral damages, and attorney’s fees. The
Court of Appeals affirmed the decision of the trial court but modified the same by
deleting the award of temperate damages and reduced the moral damages to P50,000,
P100,000 to be paid to Mrs. Katigbak, and P50,000 as attorney’s fees.
Hence, this petition.

ISSUE:
Whether or not petitioner is liable for moral and temperate damages.

RULING:
Yes, petitioner is liable for damages.
Moral damages comprise of physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and
similar injury. Temperate or moderate damages which are more than nominal but less
than compensatory damages, can be recovered when the court finds that pecuniary
loss has been suffered but that the amount cannot be proved with absolute certainty
due to the nature of the case.
Moral and temperate damages not susceptible of pecuniary estimation are
granted to compensate the respondents for injuries or losses suffered as a result of the
petitioner’s fault and negligence and not simply to penalize the petitioner. The amount of
such losses does not need to be precisely established, exactly because of their nature.
 In this case, the dishonoring of the respondent’s checks committed through
negligence by the petitioner bank was rectified only on April 15, 1992 or 9 days after
they received the Central Bank credit memo. Petitioner bank was clearly remiss in its
duty and obligation to treat private respondents’ account with the highest degree of
care, considering the fiduciary nature of their relationship.
It must therefore, bear the blame for failing to discover the mistake of its
employee despite the established procedure requiring bank papers to pass through
bank personnel whose duty it is to check and countercheck them for possible errors.