Case Summary (G.R. No. 47777)
Key Dates
Withdrawal and incident: 1995–1996 (during Bangkok trip).
Notice and pre-litigation exchanges: Early 1996.
RTC decision: May 22, 1998 (dismissing complaint; awarding respondent attorney’s fees).
CA decision: December 7, 2006 (affirmed RTC; deleted attorney’s fees award).
Supreme Court decision: April 26, 2017.
Applicable Law
1987 Philippine Constitution (due process, contract obligations).
General Banking Act of 2000 (imposes highest standards of diligence on banks).
Civil Code of the Philippines:
– Article 1980 (loan relationship governs deposits).
– Article 2220 (moral damages in breach of contract only for fraud or bad faith).
Rules of Court, Rule 130, Section 27 (offers of compromise inadmissible as evidence).
Facts
Having withdrawn US$1,000 in US$100 notes, the Carbonells exchanged five bills in Bangkok; one was rejected as “no good.” A bank teller seized it and threatened police action. Using the remaining four, they purchased jewelry, only to be publicly accused of cheating when those bills proved counterfeit. On return, respondent insisted its notes were genuine. BSP examination certified four notes as “near perfect genuine notes,” prompting petitioners to demand moral and exemplary damages (P10 million).
Procedural History
Petitioners filed Civil Case No. 65725 in RTC, Pasig City, for damages. Respondent counterclaimed for attorney’s fees.
RTC (1998): dismissed complaint; awarded P20,000 attorney’s fees to respondent.
CA (2006): affirmed dismissal; deleted attorney’s fees award.
Petitioners elevated the case to the Supreme Court.
Issues Presented
- Whether respondent’s release of counterfeit notes constituted gross negligence, misrepresentation or bad faith amounting to fraud, meriting liability beyond simple negligence.
- Whether moral and exemplary damages are recoverable absent proof of fraud or bad faith.
- Whether respondent’s news-clipping evidence was improperly admitted or relied upon.
Supreme Court Holding
- Banks owe a high degree of diligence under the General Banking Act and customary fiduciary standards, but liability depends on case-specific circumstances.
- Gross negligence requires a conscious indifference and willful failure to observe precautions; mere acceptance of deceptive “supernotes” does not establish such indifference.
- BSP certification and testimony demonstrated that the notes were “highly deceptive” and undetectable even with due diligence; both RTC and CA found respondent complied with standard procedures and supervision.
- In creditor-debtor deposit relationships, moral damages for breach of contract require proof of fraud or bad faith. No evidence showed respondent acted with malice or fraud.
- The petitioners’ embarrassment abroad, though regrettable, constituted damnum absque injuria (damage without legal injury) and does not warrant compensation.
- Offers of compromise (reinstating US$500 and offering a trip) are not admissions of liability.
Legal Anal
Case Syllabus (G.R. No. 47777)
Antecedents
- Petitioners Cristino and Edna Carbonell withdrew US$1,000 in US$100 bills from their dollar account at Metrobank’s Pateros branch.
- While in Bangkok, they successfully exchanged four bills but the fifth was rejected as “no good.”
- At Norkthon Bank, a teller confirmed the bill was counterfeit, confiscated it, and threatened police action if they insisted on its return.
- Using the remaining four bills, they bought jewelry; next day these too proved counterfeit, and the shop owner publicly accused them of cheating.
- Back in the Philippines, Metrobank’s branch manager insisted the bills were genuine; petitioners submitted the bills to the BSP, which certified four as “near perfect genuine notes.”
- Petitioners’ counsel demanded P10 million in moral and exemplary damages; Metrobank expressed sympathy but disclaimed absolute guarantee of genuineness and asserted it had exercised required diligence.
- Metrobank offered to reinstate US$500 in their account and provide an all-expense-paid trip to Hong Kong, but petitioners rejected the compromise and filed suit.
Procedural History
- RTC, Branch 157, Pasig City (May 22, 1998): Dismissed petitioners’ complaint for lack of merit; granted Metrobank P20,000 attorney’s fees on counterclaim.
- CA (Dec 7, 2006): Affirmed dismissal; deleted attorney’s fees award.
- SC Petition: Petitioners contend CA erred, asserting Metrobank’s bad faith, misrepresentation and gross negligence