CITYTRUST BANKING CORPORATION, PETITIONER, VS. THE INTERMEDIATE APPELLATE COURT AND EMME HERRERO, RESPONDENTS.

This case emanated from a complaint filed by private respondent Emme
Herrero for damages against petitioner Citytrust Banking Corporation. In her complaint, private respondent averred
that she, a businesswoman, made regular deposits, starting September of 1979,
with petitioner Citytrust Banking Corporation at its Burgos branch in Calamba,
Laguna. On 15 May 1980, she deposited
with petitioner the amount of Thirty One Thousand Five Hundred Pesos
(P31,500.00), in cash, in order to amply
cover six (6) postdated checks she issued, viz:

Check No.                                           Amount

007383                        –                       P1,507.00

007384                        –                       1,262.00

007387                        –                       4,299.00

007389                        –                       2,204.00

007492                        –                       6,281.00

007400                        –                       4,716.00

When presented for encashment upon
maturity, all the checks were dishonored due to “insufficient funds.”
The last check No. 007400, however, was personally redeemed by private
respondent in cash before it could be redeposited.

Petitioner, in its answer, asserted that it was due to private
respondent’s fault that her checks were dishonored. It averred that instead of stating her correct account number,
i.e., 29000823, in her deposit slip, she inaccurately wrote 2900823.

The Regional Trial Court (Branch XXXIV) of Calamba, Laguna, on 27
February 1984, dismissed the complaint for lack of merit; thus:

“WHEREFORE, judgment is hereby rendered in favor of the
defendant and against the plaintiff, DISMISSING the complaint for lack of
merit, plaintiff is hereby adjudged to pay the defendant reasonable attorney’s
fee in the amount of FIVE THOUSAND PESOS (P5,000.00) plus cost of suit.”

Private respondent went to the Court of Appeals, which found the
appeal meritorious. Hence, it rendered
judgment, on 15 July 1988, reversing the trial court’s decision. The appellate court ruled:

“WHEREFORE, the
judgment appealed from is REVERSED and
a new one entered thereby ordering defendant to pay plaintiff nominal damages
of P2,000.00, temperate and moderate damages of P5,000.00, and attorney’s fees
of P4,000.00.”

“The counterclaim of defendant is dismissed for lack of merit,
with costs against him.”

Petitioner Citytrust Banking Corporation is now before us in this
petition for review on certiorari.

Petitioner bank concedes that it is its obligation to honor
checks issued by private respondent which are sufficiently funded, but, it
contends, private respondent has also the duty to use her account in accordance with the rules
of petitioner bank to which she has contractually acceded. Among such rules, contained in its
“brochures” governing current account deposits, is the following printed provision:

“In making a deposit x x
x kindly insure accuracy in filing said deposit slip forms as we hold ourselves free of any
liability for loss due to an incorrect account number indicated in the deposit
slip although the name of the depositor is correctly written.”

Exactly the same issue was addressed by the appellate court,
which, after its deliberations, made the following findings and conclusions^[1]:

“We cannot uphold the position of defendant. For, even if it be true that there was error
on the part of the plaintiff in omitting a ‘zero’ in her account number, yet,
it is a fact that her name, ‘Emme E. Herrero,’ is clearly written on said
deposit slip (Exh. ‘B’). This is
controlling in determining in whose account the deposit is made or should be
posted. This is so because it is not
likely to commit an error in one’s name than merely relying on numbers which
are difficult to remember, especially a number with eight (8) digits as the
account numbers of defendant’s depositors. We view the use of numbers as simply for the convenience of the bank but
was never intended to disregard the real name of its depositors. The bank is engaged in business impressed
with public interest, and it is its duty to protect in return its many clients
and depositors who transact business with it. It should not be a matter of the bank alone receiving deposits, lending
out money and collecting interests. It
is also its obligation to see to it that all funds invested with it are
properly accounted for and duly posted in its ledgers.

“In the case before Us, We are not persuaded that defendant
bank was not free from blame for the fiasco. In the first place, the teller should not have accepted plaintiff’s
deposit without correcting the account number on the deposit slip which,
obviously, was erroneous because, as pointed out by defendant, it contained
only seven (7) digits instead of eight (8). Second, the complete name of plaintiff depositor appears in bold letters
on the deposit slip (Exh. ‘B’). There
could be no mistaking in her name, and that the deposit was made in her name,
‘Emma E. Herrero.’ In fact, defendant’s teller should not have fed her deposit
slip to the computer knowing that her account number written thereon was wrong
as it contained only seven (7) digits. As it happened, according to defendant, plaintiff’s deposit had to be
consigned to the suspense accounts pending verification. This, indeed, could have been avoided at the
first instance had the teller of defendant bank performed her duties
efficiently and well. For then she
could have readily detected that the account number in the name of ‘Emma E.
Herrero’ was erroneous and would be rejected by the computer. That is, or should be, part of the training
and standard operating procedure of the bank’s employees. On the other hand, the depositors are not
concerned with banking procedure. That
is the responsibility of the bank and its employees. Depositors are only concerned with the facility of depositing
their money, earning interest thereon, if any, and withdrawing therefrom,
particularly businessmen, like plaintiff, who are supposed to be always ‘on­-the-go.’
Plaintiff’s account is a ‘current account’ which should immediately be
posted. After all, it does not earn
interest. At least, the forbearance
should be commensurated with prompt, efficient and satisfactory service.

“Bank clients are supposed to rely on the services extended by
the bank, including the assurance that their deposits will be duly credited
them as soon as they are made. For, any
delay in crediting their account can be embarrassing to them as in the case of
plaintiff.”

“We agree with plaintiff that ?

‘x x x even in computerized systems of accounts, ways and means are
available whereby deposits with erroneous account numbers are properly credited depositor’s correct account numbers. They add that failure on the part of the defendant to do so is
negligence for which they are liable. As proof thereof plaintiff alludes to five particular incidents where
plaintiff admittedly wrongly indicated her account number in her deposit slips
(Exhs. ‘J’, ‘L’, ‘N’, ‘O’ and ‘P’), but were nevertheless properly credited her
deposit (pp. 4-5, Decision).’

“We have already ruled in Mundin v. Far East Bank & Trust
Co., AC-G.R. CV No. 03639, prom. Nov. 2, 1985, quoting the court a quo in an
almost identical set of facts, that –

`Having accepted a deposit in the course of its business
transactions, it behooved upon defendant bank to see to it and without
recklessness – that the depositor was accurately credited therefor. To post a deposit in somebody else’s name
despite the name of the depositor clearly written on the deposit slip is indeed
sheer negligence which could have easily been avoided if defendant bank
exercised due diligence and circumspection in the acceptance and posting of
plaintiff’s deposit.’”

We subscribe to the above disquisitions of the appellate
court. In Simex International (Manila),
Inc., vs. Court of Appeals, 183 SCRA 360, reiterated in Bank of Philippine
Islands vs. Intermediate Appellate Court, 206 SCRA 408, we similarly said, in
cautioning depository banks on their fiduciary responsibility, that –

“In every case, the depositor expects the bank to treat his
account with utmost fidelity, whether such account consists only of a few
hundred pesos or of millions. The bank
must record every single transaction accurately, down to the last centavo, and
as promptly as possible. This has to be
done if the account is to reflect at any given time the amount of money the
depositor can dispose of as he sees fit, confident that the bank will deliver
it as and to whomever he directs. A
blunder on the part of the bank, such as the dishonor of a check without good
reason, can cause the depositor not a little embarrassment if not also
financial loss and perhaps even civil and criminal litigation.

“The point is 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 meticulous care, always having in
mind the fiduciary nature of their relationship.”

We agree with petitioner, however, that it is wrong to award,
along with nominal damages, temperate or moderate damages. The two awards are incompatible and cannot
be granted concurrently. Nominal
damages are given in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not
for the purpose of indemnifying the plaintiff for any loss suffered by him
(Art. 2221, New Civil Code;
Manila Banking Corp. vs. Intermediate Appellate Court, 131 SCRA 271). Temperate or moderate damages, which are
more than nominal but less than compensatory damages, on the other hand, may be
recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of
the case, be proved with reasonable certainty (Art. 2224, New Civil Code).

In the instant case, we also find need for vindicating the wrong
done on private respondent, and we accordingly agree with the Court of Appeals
in granting to her nominal damages but not in similarly awarding temperate or
moderate damages.

WHEREFORE, the appealed decision is MODIFIED by deleting
the award of temperate or moderate damages. In all other respects, the appellate court’s decision is AFFIRMED. No costs in this instance.

SO ORDERED.

Feliciano, (Chairman), Bidin, Romero, and Melo, JJ., concur.

^[1]
Penned by Mr. Justice Josue N. Bellosillo, concurred in by
Justices Felipe B. Kalalo and Regina G.
Ordoñez-Benitez.