The Law On Obligations and Contracts
[G.R. NO. 167346: April 2, 2007]
SOLIDBANK CORPORATION/ METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v.
SPOUSES PETER and SUSAN TAN, Respondents.
A. Case Summary
On December 2, 1991 at Juan Luna, Manila Branch, respondent’s representative, Remigia Frias deposited with
Grace Neri, petitioner’s teller no.8, a ten checks worth 455,962. After verification of two deposit slips, Frias kept a
duplicate copy and Neri kept an original copy. Later on, the respondent’s discovered in their passbook that one of the
checks, Metropolitan Bank and Trust Company (Metrobank) check no. 403954, payable to cash in the sum of
P250,000 was not posted therein.
Upon notification of respondent Peter Tan, the petitioner showed a duplicate copy of a deposit slip indicating the list
of checks deposited by Frias, but it did not include the missing check. The deposit slip bore the stamp mark “teller
no.7” instead of “teller no.8” who previously received the checks.
Still later, the respondent learned from Metrobank (where he maintained an account) that Metrobank check no.
403954 had been cleared after it was inexplicably deposited by a certain Dolores Lagsac in Premier Bank in San
Pedro, Laguna. Respondents demanded that the petitioner pay the amount of the check but it refused, hence, they
filed a case for collection of a sum of money in the RTC of Manila, Branch 31.
In its answer, petitioner averred that the deposit slips Frias used when she deposited the checks were spurious.
Petitioner accused respondents of engaging in a scheme to illegally exact money from it. It added that, contrary to
the claim of respondents, it was “teller no.7” who received the deposit slips, and although respondents insisted that
Frias deposited ten checks, only nine checks were actually received by said teller. By way of counterclaim, it sought
payment of P1,000,000 as actual and moral damages and P500,000 as exemplary damages.
ISSUES
1. Deposit of Ten Checks
Issue:
The respondents representative, Remigia Frias, deposited ten checks with Teller No. 8, Grace Neri.
But the bank, Solidbank, said they only received nine checks.
Explanation:
The problem is that the respondents claim they deposited ten checks, while the bank's records show only
nine. This could be due to an error or carelessness during the deposit process, or possibly a more serious
issue, like mishandling by the bank.
2. Missing Check (Metrobank Check No. 403954)
Issue:
A check worth P250,000 was missing from the account and later showed up deposited by someone
else, Dolores Lagsac, at another bank in San Pedro, Laguna.
Explanation:
The missing check being deposited by a third party at a different bank raises concerns about whether it was
lost, mishandled, or stolen. This suggests negligence on the part of Solidbank, and the involvement of
someone else points to potential fraud.
3. Discrepancy in Teller Stamps
Issue:
The deposit slip had the stamp of Teller No. 7, even though Teller No. 8 was the one who accepted the
checks.
Explanation:
The fact that the deposit slip was stamped by a different teller than the one who handled the checks
suggests confusion or tampering within the bank. This raises doubts about whether the deposit slip was
altered and casts suspicion on the bank's actions, especially since they couldn't produce the original slip.
ART. 1173 of the Civil Code states that “the fault or negligence of the obligor consists in the omission of that
diligence which is required by the nature of the obligation and corresponds with the circumstances of the
person of the time and of the place”; and that “if the law or contract does not state the diligence which is to be
observed in the performance, the same as expected of a good father of a family shall be required.”
‘For failure to comply with its obligation, [petitioner] is presumed to have been at fault or to have acted negligently
unless that they observe extraordinary diligence as prescribed in Arts. 1733 and 1735 of the Civil Code (Art.1756.)’
Article 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Under Article 1735 of the Civil Code, the carrier is presumed negligent if the goods are lost, destroyed, or
deteriorated while in its custody, unless the carrier can prove that it exercised extraordinary diligence.
Explanation: Article 1173 establishes that the fault or negligence of an obligor arises from failing to exercise the
required diligence that corresponds with the specific circumstances. The duty of diligence is contextual, varying
depending on the nature of the obligation and the expectations placed on a “good father of a family,” which is a
standard of care expected from a reasonably prudent person.
The bank was liable for the missing check and the Court ruled that the bank failed to meet the standard of
extraordinary diligence required by law when handling the check. (So, there is another diligence stipulated.) The
diligence required goes beyond the standard of a good father of a family.. The law recognizes that financial
institutions have an elevated duty to ensure the integrity and security of their clients' transactions. And remember,
ang bangko may naghawid sa original copy sa deposit slip pero (why) ang ilang gipakita sa respondents kay
duplicate copy? The presumption here is that the original copy is lost by the bank. And Mr. Frias made the
transaction with teller no. 8, but the stamp shown in the deposit slip is teller no.7. These actions were acts of
negligence, hence the decision of the Court is…
Upon examination of the oral, as well as the documentary evidence which the parties presented at the trial in support
of their respective contentions, and after taking into consideration all the circumstances of the case, the Court
believes that the loss of Metrobank check no. 403954 in the sum of 250,000 was due to the fault of [petitioner]. [It]
retained the original copy of the deposit slip marked by ‘teller no.7’]. There is a presumption in law that evidence
willfully suppressed would be adverse if produced.
WHEREFORE, premises considered, judgment is hereby rendered in favor of [respondents], ordering [petitioner] to
pay the sum of P250,000 with legal interest from the time the complaint was filed until satisfied; P25,000.00 moral
damages; P25,000.00 exemplary damages plus 20% of the amount due [respondents] as and for attorney’s fees. With
costs.
[ppt]
Reason for Damages Awarded
Exemplary Damages due to
● Negligence
● Bad Faith
● Public Interest
Moral Damages
Attorney's fees
[Script]
Reason for Damages Awarded
The court found the petitioner liable for the loss of the check due to negligence and bad faith. The specific reasons
for awarding awards are:
Exemplary Damages:
● Negligence: Petitioner failed to exercise due diligence in handling the lost deposit slips and checks. This
negligence led to the loss of the check.
● Bad Faith: The petitioner's actions by presenting false deposit slips and withholding evidence demonstrate
bad faith and dishonest intent.
● Public Interest: The banking industry is considered a public service. And banks are expected to use the
utmost diligence in conducting transactions. Petitioner's failure to do so will likely result in the payment of
exemplary damages as a preventative measure.
Moral Damages: The respondents receive moral damages as compensation for the intangible damages they have
suffered. In this case, the petitioner's actions may have caused the respondent to experience emotional distress,
anxiety, or any other type of mental anguish.
Attorney's fees: These are awarded to compensate the respondents for the legal costs they incurred in pursuing the
case.
-End
1. How many checks did Remigia Frias deposited at
the bank? 6. Who was the person that deposited the missing
check in Premier Bank?
a) 8 checks
b) 9 checks a) Peter Tan
c) 10 checks answer b) Grace Neri
d) 11 checks c) Dolores Lagsac answer
d) Susan Tan
2. What was the total value of the checks deposited
by Frias? 7. Which teller number was supposed to receive the
checks according to the respondents?
a) P250,000
b) P455,962 answer a) Teller no. 6
c) P500,000 b) Teller no. 7
d) P600,000 c) Teller no. 8 answer
d) Teller no. 9
3. Which check was missing from the passbook?
8. What was the legal fault of the bank according to
a) A Solidbank check the court?
b) A Premier Bank check
c) A Metrobank check answer a) The bank lost the checks.
d) A Banco de Oro check b) The bank didn’t exercise enough diligence.
answer
c) The bank didn’t respond to the complaint.
4. How much was the missing Metrobank check d) The bank refused the deposit.
worth?
a) P500,000
b) P250,000 answer 9. How much was awarded as moral damages to the
c) P100,000 respondents?
d) P300,000
a) P10,000
b) P15,000
5. Where was the missing check deposited by c) P25,000 answer
another person? d) P50,000
a) Metrobank
b) Solidbank 10. What was the court's final decision?
c) Premier Bank answer
d) Banco de Oro a) The bank was not at fault.
b) The bank had to pay the value of the missing
check and damages. answer
c) The case was dismissed.
d) The respondents were ordered to pay damages to
the bank.
The Law On Obligations and Contracts
[G.R. NO. 167346: April 2, 2007]
SOLIDBANK CORPORATION/ METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v.
SPOUSES PETER and SUSAN TAN, Respondents.
A. Case Summary
On December 2, 1991 at Juan Luna, Manila Branch, respondent’s representative, Remigia Frias deposited with
Grace Neri, petitioner’s teller no.8, a ten checks worth 455,962. After verification of two deposit slips, Frias kept a
duplicate copy and Neri kept an original copy. Later on, the respondent’s discovered in their passbook that one of the
checks, Metropolitan Bank and Trust Company (Metrobank) check no. 403954, payable to cash in the sum of
P250,000 was not posted therein. Upon notification of respondent Peter Tan, the petitioner showed a duplicate copy
of a deposit slip indicating the list of checks deposited by Frias, but it did not include the missing check. The deposit
slip bore the stamp mark “teller no.7” instead of “teller no.8” who previously received the checks. Still later, the
respondent learned from Metrobank (where he maintained an account) that Metrobank check no. 403954 had been
cleared after it was inexplicably deposited by a certain Dolores Lagsac in Premier Bank in San Pedro, Laguna.
Respondents demanded that the petitioner pay the amount of the check but it refused, hence, they filed a case for
collection of a sum of money in the RTC of Manila, Branch 31. In its answer, petitioner averred that the deposit slips
Frias used when she deposited the checks were spurious. Petitioner accused respondents of engaging in a scheme to
illegally exact money from it. It added that, contrary to the claim of respondents, it was “teller no.7” who received
the deposit slips, and although respondents insisted that Frias deposited ten checks, only nine checks were actually
received by said teller. By way of counterclaim, it sought payment of P1,000,000 as actual and moral damages and
P500,000 as exemplary damages.
SCRIPT: General Register. No. 167346-SOLIDBANK CORPORATION /METRO BANK & TRUST CO VS
SPOUSES. PETER & SUSAN TAN
The Parties Involved are:
● Petitioners: Solidbank Corporation and Metropolitan Bank & Trust Company
● Respondents: Spouses Peter and Susan Tan
Date of Decision: April 2, 2007
Factual Background: On December 2, 1991, Spouses Peter and Susan Tan deposited ten checks, totaling P455,962,
at Solidbank's Juan Luna branch in Manila, through their representative, Remigia Frias. The deposit was processed
by Teller No. 8, Grace Neri, who verified the checks.
Neri kept the original deposit slip and provided Frias with a duplicate.
Later, the Tans discovered that Metrobank Check No. 403954, in the sum of P250,000 and payable to cash, was not
recorded in their passbook.
Upon notification of respondent Peter Tan, the petitioner showed a duplicate copy of a deposit slip indicating the list
of checks deposited by Frias, but it did not include the missing check. The deposit slip bore the stamp mark “teller
no.7” instead of “teller no.8” who previously received the checks.
Still later, the respondent learned from Metrobank (where he maintained an account) that Metrobank check no.
403954 had been cleared after it was inexplicably deposited by a certain Dolores Lagsac in Premier Bank in San
Pedro, Laguna
The specifics of how Lagsac obtained the check were not detailed in the case summary, but it raised suspicions of
potential mishandling or fraudulent activities, suggesting that the check may have been improperly processed after
its initial deposit.
Respondents demanded that the petitioner pay the amount of the check but it refused, hence, they filed a case for
collection of a sum of money in the Regional Trial Court of Manila, Branch 31.
In its response, Solidbank argued that the deposit slips used by Remigia Frias were fake and accused the Tans of
trying to fraudulently obtain money from the bank. The bank claimed that it was actually Teller No. 7 who processed
the deposit slips, and although the Tans insisted that ten checks were deposited, the bank asserted that only nine
checks were received. As part of its defense, Solidbank filed a counterclaim seeking P1,000,000 for actual and moral
damages, as well as P500,000 in exemplary damages.
ISSUES
1. Deposit of Ten Checks
Issue:
The respondents representative, Remigia Frias, deposited ten checks with Teller No. 8, Grace Neri.
But the bank, Solidbank, said they only received nine checks.
Explanation:
The problem is that the respondents claim they deposited ten checks, while the bank's records show only
nine. This could be due to an error or carelessness during the deposit process, or possibly a more serious
issue, like mishandling by the bank.
2. Missing Check (Metrobank Check No. 403954)
Issue:
A check worth P250,000 was missing from the account and later showed up deposited by someone
else, Dolores Lagsac, at another bank in San Pedro, Laguna.
Explanation:
The missing check being deposited by a third party at a different bank raises concerns about whether it was
lost, mishandled, or stolen. This suggests negligence on the part of Solidbank, and the involvement of
someone else points to potential fraud.
3. Discrepancy in Teller Stamps
Issue:
The deposit slip had the stamp of Teller No. 7, even though Teller No. 8 was the one who accepted the
checks.
Explanation:
The fact that the deposit slip was stamped by a different teller than the one who handled the checks
suggests confusion or tampering within the bank. This raises doubts about whether the deposit slip was
altered and casts suspicion on the bank's actions, especially since they couldn't produce the original slip.
Upon examination of the oral, as well as the documentary evidence which the parties presented at the trial in support
of their respective contentions, and after taking into consideration all the circumstances of the case, the Court
believes that the loss of Metrobank check no. 403954 in the sum of 250,000 was due to the fault of [petitioner]. [It]
retained the original copy of the deposit slip marked by ‘teller no.7’]. There is a presumption in law that evidence
willfully suppressed would be adverse if produced.
WHEREFORE, premises considered, judgment is hereby rendered in favor of [respondents], ordering [petitioner] to
pay the sum of P250,000 with legal interest from the time the complaint was filed until satisfied; P25,000.00 moral
damages; P25,000.00 exemplary damages plus 20% of the amount due [respondents] as and for attorney’s fees. With
costs.
[ppt]
Reason for Damages Awarded
Exemplary Damages due to
● Negligence
● Bad Faith
● Public Interest
Moral Damages
Attorney's fees
[Script]
Reason for Damages Awarded
The court found the petitioner liable for the loss of the check due to negligence and bad faith. The specific reasons
for awarding awards are:
Exemplary Damages:
● Negligence: Petitioner failed to exercise due diligence in handling the lost deposit slips and checks. This
negligence led to the loss of the check.
● Bad Faith: The petitioner's actions by presenting false deposit slips and withholding evidence demonstrate
bad faith and dishonest intent.
● Public Interest: The banking industry is considered a public service. And banks are expected to use the
utmost diligence in conducting transactions. Petitioner's failure to do so will likely result in the payment of
exemplary damages as a preventative measure.
Moral Damages: The respondents receive moral damages as compensation for the intangible damages they have
suffered. In this case, the petitioner's actions may have caused the respondent to experience emotional distress,
anxiety, or any other type of mental anguish.
Attorney's fees: These are awarded to compensate the respondents for the legal costs they incurred in pursuing the
case.
Quiz: SOLIDBANK CORPORATION v. SPOUSES PETER and SUSAN TAN
1. How many checks did Remigia Frias deposited at
the bank? 6. Who was the person that deposited the missing
check in Premier Bank?
a) 8 checks
b) 9 checks a) Peter Tan
c) 10 checks answer b) Grace Neri
d) 11 checks c) Dolores Lagsac answer
d) Susan Tan
2. What was the total value of the checks deposited
by Frias? 7. Which teller number was supposed to receive the
checks according to the respondents?
a) P250,000
b) P455,962 answer a) Teller no. 6
c) P500,000 b) Teller no. 7
d) P600,000 c) Teller no. 8 answer
d) Teller no. 9
3. Which check was missing from the passbook?
8. What was the legal fault of the bank according to
a) A Solidbank check the court?
b) A Premier Bank check
c) A Metrobank check answer a) The bank lost the checks.
d) A Banco de Oro check b) The bank didn’t exercise enough diligence.
answer
c) The bank didn’t respond to the complaint.
4. How much was the missing Metrobank check d) The bank refused the deposit.
worth?
a) P500,000
b) P250,000 answer 9. How much was awarded as moral damages to the
c) P100,000 respondents?
d) P300,000
a) P10,000
b) P15,000
5. Where was the missing check deposited by c) P25,000 answer
another person? d) P50,000
a) Metrobank
b) Solidbank 10. What was the court's final decision?
c) Premier Bank answer
d) Banco de Oro a) The bank was not at fault.
b) The bank had to pay the value of the missing
check and damages. answer
c) The case was dismissed.
d) The respondents were ordered to pay damages to
the bank.
