SECOND DIVISION

[G.R. No. 105410. July 25, 1994.]

PILIPINAS BANK , petitioner, vs. HON. COURT OF APPEALS AND

FLORENCIO REYES , respondents.

DECISION

PUNO , J : p

This is a petition for review of the Decision of the respondent court 1 in CA-G.R. CV
No. 29524 dated May 13, 1992 which ordered petitioner to pay the private respondent the
sum of P50,000.00 as moral damages, P25,000.00 as attorney's fees and cost of suit. prcd

The facts as found both by the trial court 2 and the respondent court are:
"As payments for the purchased shoe materials and rubber shoes,
Florencio Reyes issued postdated checks to Winner Industrial Corporation for
P20,927.00 and Vicente Tui, for P11,419.50, with due dates on October 10 and 12,
1979, respectively.
To cover the face value of the checks, plaintiff, on October 10, 1979,
requested PCIB Money Shop's manager Mike Potenciano to effect the withdrawal
of P32,000.00 from his savings account therein and have it deposited with his
current account with Pilipinas Bank (then Filman Bank), Biñan Branch. Roberto
Santos was requested to make the deposit.

In depositing in the name of FLORENCIO REYES, he inquired from the teller

the current account number of Florencio Reyes to complete the deposit slip he
was accomplishing. He was informed that it was '815' and so this was the same
current account number he placed on the deposit slip below the depositor's name
FLORENCIO REYES.

Noting that the account number coincided with the name Florencio, Efren
Alagasi, then Current Account Bookkeeper of Pilipinas Bank, thought it was for
Florencio Amador who owned the listed account number. He, thus, posted the
deposit in the latter's account not noticing that the depositor's surname in the
deposit slip was REYES.
On October 11, 1979, the October 10 check in favor of Winner Industrial
Corporation was presented for payment. Since the ledger of Florencio Reyes
indicated that his account had only a balance of P4,078.43, it was dishonored
and the payee was advised to try it for next clearing.
LexLib

On October 15, 1979, the October 10, 1979 check was redeposited but was
again dishonored. Likewise, the October 12, 1979 check in favor of Vicente Tui
when presented for payment on that same date met the same fate but was
advised to try the next clearing. Two days after the October 10 check was again
dishonored, the payee returned the same to Florencio Reyes and demanded a
cash payment of its face value which he did if only to save his name. The October
12, 1979 check was redeposited on October 18, 1979, but again dishonored for
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 the reason that the check was drawn against insufficient fund.

Furious over the incident, he immediately proceeded to the bank and urged
an immediate verification of his account.

Upon veri cation, the bank noticed the error. The P32,000.00 deposit
posted in the account of Florencio Amador was immediately transferred to the
account of Reyes upon being cleared by Florencio Amador that he did not effect a
deposit in the amount of P32,000.00. The transfer having been effected, the bank
then honored the October 12, 1979 check (Exh. "C")."

On the basis of these facts, the trial court ordered petitioner to pay to the private
respondent: (1) P200,000.00 as compensatory damages; (2) P100,000.00 as moral
damages; (3) P25,000.00 as attorney's fees, and (4) the costs of suit. On appeal to the
respondent court, the judgment was modified as aforestated.
In this petition for review, petitioner argues:
"I. Respondent Court of Appeals erred on a matter of law, in not
applying the rst sentence of Article 2179, New Civil Code, in view of its own
nding that respondent Reyes' own representative committed the mistake in
writing down the correct account number;

II. Respondent Court of Appeals erred, on a matter of law, in holding

that respondent Reyes has the right to recover moral damages and in awarding
the amount of P50,000.00, when there is no legal nor factual basis for it;

III. The Honorable Court of Appeals erred, on a matter of law, in holding

petitioner liable for attorney's fees in the amount of P20,000.00, when there is no
legal nor factual basis for it."

We find no merit in the petition.

First. For Article 2179 3 of the Civil Code to apply, it must be established that private
respondent's own negligence was the immediate and proximate cause of his injury. The
concept of proximate cause is well de ned in our corpus of jurisprudence as "any cause
which, in natural and continuous sequence, unbroken by any e cient intervening cause,
produces the result complained of and without which would not have occurred and from
which it ought to have been foreseen or reasonably anticipated by a person of ordinary
case that the injury complained of or some similar injury, would result therefrom as a
natural and probable consequence." 4 In the case at bench, the proximate cause of the
injury is the negligence of petitioner's employee in erroneously posting the cash deposit of
private respondent in the name of another depositor who had a similar rst name. As held
by the trial court:
xxx xxx xxx

"Applying the test, the bank employee is, on that basis, deemed to have
failed to exercise the degree of care required in the performance of his duties. As
earlier stated, the bank employee posted the cash deposit in the account of
Florencio Amador from his assumption that the name Florencio appearing on the
ledger without, however, going through the full name, is the same Florencio stated
in the deposit slip. He should have continuously gone beyond mere assumption,
which was proven to be erroneous, and proceeded with clear certainty,
considering the amount involved and the repercussions it would create on the
totality of the person notable of which is the credit standing of the person
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 involved should a mistake happen. The checks issued by the plaintiff in the
course of his business were dishonored by the bank because the ledger of
Florencio Reyes indicated a balance insu cient to cover the face value of
checks." prLL

Second. In light of this negligence, the liability of petitioner for moral damages
cannot be impugned. so we held in Bank of the Philippine Islands vs. IAC, et al. 5
"The bank is not expected to be infallible but, as correctly observed by
respondent Appellate Court, in this instance, it must bear the blame for not
discovering the mistake of its teller despite the established procedure requiring
the papers and bank books to pass through a battery of bank personnel whose
duty it is to check and countercheck them for possible errors. Apparently, the
o cials and employees tasked to do that did not perform their duties with due
care, as may be gathered from the testimony of the bank's lone witness, Antonio
Enciso, who casually declared that 'the approving o cer does not have to see the
account numbers and all those things. Those are very petty things for the
approving manager to look into' (p. 78, Record on Appeal). Unfortunately, it was a
'petty thing,' like the incorrect account number that the bank teller wrote on the
initial deposit slip for the newly-opened joint current account of the Canlas
spouses, that sparked this half-a-million-peso damage suit against the bank.

While the bank's negligence may not have been attended with malice and
bad faith, nevertheless, it caused serious anxiety, embarrassment and humiliation
to the private respondents for which they are entitled to recover reasonable moral
damages (American Express International, Inc. IAC, 167 SCRA 209). The award of
reasonable attorney's fees is proper for the private respondents were compelled to
litigate to protect their interest (Art. 2208, Civil Code). However, the absence of
malice and bad faith renders the award of exemplary damages improper (Globe
Mackay Cable and Radio Corp. vs. Court of Appeals, 176 SCRA 778)."

IN VIEW WHEREOF, the petition is denied there being no reversible error in the
Decision of the respondent court. Cost against petitioner. cdll

SO ORDERED.

Footnotes
1. Second Division composed of Justices Jose A.R. Melo (Chairman), Segundino Chua
(ponente) and Artemon D. Luna (member).
2. RTC of Biñan, Laguna, Br. XXV.

3. It states in part: "When the plaintiff's own negligence was the immediate and proximate
cause of his injury, he cannot recover damages. . ."

4. People vs. Desalina, 57 OG 8694.

5. G.R. No. 69162, February 21, 1992, 206 SCRA 408, 413.

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