G.R. No. 188492 - Guagua National Colleges vs. Court of Appeals

In 1989, Ma. Lourdes Ong, wife of the petitioner Jose T. Ong Bun, purchased three (3) Silver Custodian Certificates (CC) from Far East Bank & Trust Company (FEBTC) jointly in their names:

The instrument is transferable only in the books of the custodian upon surrender along with a deed of assignment;
The holder or transferee may withdraw the Silver Certificate of Deposit anytime during office hours;
The instrument ceases to have effect upon payment;
Validity depends on authorized bank signatures.

FEBTC merged with BPI around 2000, about 11 years after the CCs were purchased.
Ma. Lourdes Ong passed away in December 2002, after which petitioner found the three CCs among her belongings. They had never been surrendered to FEBTC/BPI.
On August 12, 2003, petitioner sought guidance from BPI about claiming the certificates. BPI responded that no Silver Certificates of Deposit were outstanding post-merger, implying full payment upon maturity (by 1991).
Petitioner made further communications and a final written demand for payment, all refused by BPI.

On March 7, 2006, petitioner filed a complaint for collection of money and damages with the Regional Trial Court (RTC), Branch 33, Iloilo City (Civil Case No. 06-28822), seeking:

All CCs had been fully paid by 1991, the maturity date, and that no CCs were outstanding as of 2000 merger;
Presentation or surrender of certificates was not a condition precedent for payment;
Claim was made beyond the 10-year prescriptive period under Article 1144 of the Civil Code;
Counterclaimed for attorney’s fees, litigation expenses, exemplary damages, and costs.

RTC ruled in favor of petitioner, awarding payment for the three CCs with interest, moral and exemplary damages, attorney’s fees, and costs.
BPI appealed to the Court of Appeals (CA).

The custodian certificates alone do not prove outstanding deposits but only custody of certificates;
Possession of the custodian certificates does not ipso facto prove unpaid deposits;
Surrender of CCs is not required to withdraw the certificates of deposit or for payment.

Petitioner filed a Petition for Review on Certiorari under Rule 45.
Petitioner argued that possession of CCs is incontrovertible evidence of outstanding Silver Certificates of Deposit in respondent’s custody and unpaid obligation.
Respondent defended absence of outstanding CCs, relying on books and claims of full payment at maturity.
Issues of prescription and laches raised by respondent were not passed upon by the CA and thus not raised before the Supreme Court.

Whether the possession of Silver Custodian Certificates is sufficient proof of an outstanding deposit and demandable payment by the bank.
Whether respondent had discharged its burden of proving payment and extinguishment of the obligation.
Whether moral damages, exemplary damages, and attorney’s fees are properly awarded given the circumstances.
Whether the complaint is barred by prescription under Article 1144 of the Civil Code.