Equitable PCI Bank vs.

Arcelito Tan
G.R. No. 165339 August 23, 2010

Nature of Action:
Petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the
Decision and the Resolution of the Court of Appeals

Facts:
Respondent Tan maintained a current and savings account with petitioner bank. On May 13,
1992, respondent issued a check post-dated May 30, 1992 in the amount of P34,588.72 in favor
of Sulpicio Lines, Inc. As of May 14, 1992, respondent's balance with petitioner was P35,147.59,
and on the same date, Sulpicio Lines, Inc. deposited the aforesaid check. After clearing, the
amount of the check was immediately debited by petitioner from respondent's account.

Meanwhile, respondent issued three checks from May 9 to May 16, 1992. One was payable to
Agusan del Sur Electric Cooperative Inc. (ASELCO), and another to Agusan del Norte Electric
Cooperative Inc., (ANECO). When presented for payment, the checks were dishonored for
being drawn against insufficient funds. As a result, the electric power supply for the two
mini-sawmills owned and operated by respondent was cut off. Due to the foregoing, respondent
filed with the RTC of Cebu City a complaint against petitioner, praying for payment of losses
consisting of unrealized income in the amount of P1,864,500.00. He also prayed for payment of
moral damages, exemplary damages, attorney's fees and litigation expenses.

In its defense, petitioner denied that the questioned check was post-dated May 30, 1992 and
claimed that it was a current check dated May 3, 1992. It alleged further that the disconnection
of the electric supply to respondent's sawmills was not due to the dishonor of the checks, but for
other reasons not attributable to the bank.

Issue:
Whether petitioner bank acted negligently in dealing with Tan’s account.

Ruling:
The petition is PARTIALLY GRANTED. The Decision and Resolution of the Court of Appeals in
CA-G.R. CV No. 41928, dated May 31, 2004 and August 24, 2004, respectively, are AFFIRMED
with the following MODIFICATIONS:
1. The award of One Million Eight Hundred Sixty-Four Thousand and Five Hundred Pesos
(P1,864,500.00) as actual damages, in favor of respondent Arcelito B. Tan, is
DELETED; and
2. Petitioner Equitable PCI Bank is instead directed to pay respondent the amount of Fifty
Thousand Pesos (P50,000.00) as temperate damages.

Ratio:
The law imposes on banks high standards in view of the fiduciary nature of banking. The
diligence required of banks is more than that of a good father of a family. In every case, the
depositor expects the bank to treat his account with the utmost fidelity.

In its memorandum filed before the RTC, petitioner submits that respondent caused confusion
on the true date of the check by writing the date of the check as 5/3/0/92. If, indeed, petitioner
was confused on whether the check was dated May 3 or May 30 because of the / which
allegedly separated the number 3 from the 0, petitioner should have required respondent drawer
to countersign the said / in order to ascertain the true intent of the drawer before honoring the
check. As a matter of practice, bank tellers would not receive nor honor such checks which they
believe to be unclear, without the counter-signature of its drawer. Petitioner should have
exercised the highest degree of diligence required of it by ascertaining from the respondent the
accuracy of the entries therein, in order to settle the confusion, instead of proceeding to honor
and receive the check.