G.R. No. 144322 - Metropolitan Bank and Trust Company, Inc. vs. National Wages and Productivity Commission

Petitioner: Philippine National Bank (PNB).
Respondents: Spouses Pedro Caguimbal and Vivian Caguimbal.
Context: The dispute arises from a transaction involving the deposit of checks issued by Baganga Plywood Corporation relating to logs delivered by Vivian, a sub-contractor of SAMMILIA Federation of People’s Forest Development Cooperative.

In 2010, Vivian delivered logs to Baganga Ply.
Baganga Ply issued six PNB-Mati checks totaling P3,494,129.50, specifically detailing:

On August 9, 2010, Faith Caguimbal, daughter of Vivian, visited the PNB-Butuan Branch to verify the checks.
Sales and Service Officer, Grace Besa, confirmed that Baganga Ply had issued a Stop Payment Order (SPO) on the checks.

On August 12, 2010, the checks were again presented for deposit at the PNB-Butuan Branch by Jill Martirez, a cousin of Faith.
Branch officer Carlos S. Lim, Jr. accepted all six checks, unaware of the earlier inquiry regarding the SPO.
On August 16, 2010, five of the six checks were returned with the stamp "SPO-funded" and their corresponding amounts debited from the joint account of Vivian and Faith.
One check, specifically Check No. 42399 for P1,000,000.00, was not returned, and its status became a matter of contention.

Vivian sent a letter to Baganga Ply on August 10, 2010, requesting that the SPO be lifted for the subject check.
On August 19, 2010, Faith checking the passbook found the P1,000,000.00 still credited, leading respondents to assume that the SPO had been lifted.

From August 18 to August 31, 2010, Faith performed transactions (deposits and withdrawals) while the P1,000,000.00 remained intact in the account.
On September 1, 2010, after a withdrawal of P25,000.00, Faith discovered that the account balance had suddenly dropped to P10,518.61.
Upon inquiry, the branch manager explained that the P1,000,000.00 had been debited to enforce the SPO on the check.

PNB informed respondents on September 2, 2010 that it had acted based on the SPO, which was only discovered on August 27, 2010 after a complaint from Baganga Ply.
Respondents, contending that the check had been effectively cleared based on the remaining credited balance, rejected PNB’s explanation.
Consequently, Vivian resorted to borrowing money from friends to meet her obligations, precipitating the filing of a complaint against PNB when the bank refused to return the P1,000,000.00.

Dismissed the complaint on the ground that respondents failed to provide concrete evidence that the SPO had been lifted.
Held that respondents should have impleaded Baganga Ply as the real party in interest.

Set aside the RTC’s Decision and awarded respondents P100,000.00 as moral damages, P100,000.00 as exemplary damages, and P50,000.00 as attorney’s fees and litigation costs.
Acknowledged that although PNB had the right to debit the erroneously credited amount, it was grossly negligent in abruptly debiting the account without prior notice.

PNB filed a Motion for Reconsideration which was denied on July 1, 2019.
PNB then petitioned for a review on certiorari, arguing that its actions were not arbitrary and that the damages awarded were contrary to settled jurisprudence.

Whether PNB’s action of debiting P1,000,000.00 from the respondents’ account was arbitrary despite the existence of a standing SPO on the subject check.

The petitioner contends that the debiting was necessary and not arbitrary, given that respondents were aware of the SPO prior to deposit.
The resolution hinges on whether the timing and method of debit violated proper banking standards and due diligence.

Whether the Court of Appeals erred in awarding moral damages, exemplary damages, and attorney’s fees against PNB.

Respondents argue that PNB’s conduct exhibited gross negligence in handling the account, which justified the imposition of additional damages.
The issue involves assessing the bank’s fiduciary duty and the extent of its negligence in maintaining accurate records and promptly communicating discrepancies.