Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 150228 July 30, 2009
BANK OF AMERICA NT SA, Petitioner,
vs.
P!I"IPPINE RACING C"UB, Respondent.
D ! I S I O N
"EONAR#O$#E CASTRO, J.:
This is a petition for revie" on certiorari under Rule #$ of the Rules of !ourt fro% the
Decision
&
pro%ul'ated on (ul) &*, +,,& b) the for%er Second Division of the !ourt of
-ppeals .!-/, in !-01.R. !V No. #$23& entitled 4Philippine Racin' !lub, Inc. v. 5an6
of -%erica NT 7 S-,4 affir%in' the Decision
+
dated March &3, &88# of the Re'ional
Trial !ourt .RT!/ of Ma6ati, 5ranch &2$ in !ivil !ase No. 980$*$,, in favor of the
respondent. :i6e"ise, the present petition assails the Resolution
2
pro%ul'ated on
Septe%ber +9, +,,&, den)in' the Motion for Reconsideration of the !- Decision.
The facts of this case as narrated in the assailed !- Decision are as follo"s;
Plaintiff0appellee PR!I is a do%estic corporation "hich %aintains several accounts "ith
different ban6s in the Metro Manila area. -%on' the accounts %aintained "as !urrent
-ccount No. $998&0,&+ "ith defendant0appellant 5- .Paseo de Ro<as 5ranch/. The
authori=ed >oint si'natories "ith respect to said !urrent -ccount "ere plaintiff0appellee?s
President .-ntonia Re)es/ and Vice President for Finance .1re'orio Re)es/.
On or about the +nd "ee6 of Dece%ber &899, the President and Vice President of
plaintiff0appellee corporation "ere scheduled to 'o out of the countr) in connection "ith
the corporation?s business. In order not to disrupt operations in their absence, the) pre0
si'ned several chec6s relatin' to !urrent -ccount No. $998&0,&+. The intention "as to
insure continuit) of plaintiff0appellee?s operations b) %a6in' available cash@%one)
especiall) to settle obli'ations that %i'ht beco%e due. These chec6s "ere entrusted to the
accountant "ith instruction to %a6e use of the sa%e as the need arose. The internal
arran'e%ent "as, in the event there "as need to %a6e use of the chec6s, the accountant
"ould prepare the correspondin' voucher and thereafter co%plete the entries on the pre0
si'ned chec6s.
It turned out that on Dece%ber &*, &899, a (ohn Doe presented to defendant0appellant
ban6 for encash%ent a couple of plaintiff0appellee corporation?s chec6s .Nos. #,&&&* and
#,&&&3/ "ith the indicated value of P&&,,,,,.,, each. It is ad%itted that these + chec6s
"ere a%on' those presi'ned b) plaintiff0appellee corporation?s authori=ed si'natories.
The t"o .+/ chec6s had si%ilar entries "ith si%ilar infir%ities and irre'ularities. On the
space "here the na%e of the pa)ee should be indicated .Pa) To The Order Of/ the
follo"in' +0line entries "ere instead t)pe"ritten; on the upper line "as the "ord
4!-SA4 "hile the lo"er line had the follo"in' t)pe"ritten "ords, vi=; 4ON
ABNDRD TN TAOBS-ND PSOS ON:C.4 Despite the hi'hl) irre'ular entries on
the face of the chec6s, defendant0appellant ban6, "ithout as %uch as verif)in' and@or
confir%in' the le'iti%ac) of the chec6s considerin' the substantial a%ount involved and
the obvious infir%it)@defect of the chec6s on their faces, encashed said chec6s. -
verification process, even b) "as of a telephone call to PR!I office, "ould have ta6en
less than ten .&,/ %inutes. 5ut this "as not done b) 5-. Investi'ation conducted b)
plaintiff0appellee corporation )ielded the fact that there "as no transaction involvin'
PR!I that call for the pa)%ent of P++,,,,,.,, to an)one. The chec6s appeared to have
co%e into the hands of an e%plo)ee of PR!I .one !larita Mesina "ho "as subseDuentl)
cri%inall) char'ed for Dualified theft/ "ho eventuall) co%pleted "ithout authorit) the
entries on the pre0si'ned chec6s. PR!I?s de%and for defendant0appellant to pa) fell on
deaf ears. Aence, the co%plaint.
#

-fter due proceedin's, the trial court rendered a Decision in favor of respondent, the
dispositive portion of "hich reads;
PRMISS !ONSIDRD, >ud'%ent is hereb) rendered in favor of plaintiff and a'ainst
the defendant, and the latter is ordered to pa) plaintiff;
.&/ The su% of T"o Aundred T"ent) Thousand .P++,,,,,.,,/ Pesos, "ith le'al
interest to be co%puted fro% date of the filin' of the herein co%plaintE
.+/ The su% of T"ent) Thousand .P+,,,,,.,,/ Pesos b) "a) of attorne)?s feesE
.2/ The su% of Ten Thousand .P&,,,,,.,,/ Pesos for liti'ation e<penses, and
.#/ To pa) the costs of suit.
SO ORDRD.
$
Petitioner appealed the aforesaid trial court Decision to the !- "hich, ho"ever, affir%ed
said decision in toto in its (ul) &*, +,,& Decision. Petitioner?s Motion for
Reconsideration of the !- Decision "as subseDuentl) denied on Septe%ber +9, +,,&.
Petitioner no" co%es before this !ourt ar'uin' that;
I. The !ourt of -ppeals 'ravel) erred in holdin' that the pro<i%ate cause of respondent?s
loss "as petitioner?s encash%ent of the chec6s.
-. The !ourt of -ppeals 'ravel) erred in holdin' that petitioner "as liable for the
a%ount of the chec6s despite the fact that petitioner "as %erel) fulfillin' its
obli'ation under la" and contract.
5. The !ourt of -ppeals 'ravel) erred in holdin' that petitioner had a dut) to
verif) the encash%ent, despite the absence of an) obli'ation to do so.
!. The !ourt of -ppeals 'ravel) erred in not appl)in' Section &# of the
Ne'otiable Instru%ents :a", despite its clear applicabilit) to this caseE
II. The !ourt of -ppeals 'ravel) erred in not holdin' that the pro<i%ate cause of
respondent?s loss "as its o"n 'rossl) ne'li'ent practice of pre0si'nin' chec6s "ithout
pa)ees and a%ounts and deliverin' these pre0si'ned chec6s to its e%plo)ees .other than
their si'natories/.
III. The !ourt of -ppeals 'ravel) erred in affir%in' the trial court?s a"ard of attorne)?s
fees despite the absence of an) applicable 'round under -rticle ++,9 of the !ivil !ode.
IV. The !ourt of -ppeals 'ravel) erred in not a"ardin' attorne)?s fees, %oral and
e<e%plar) da%a'es, and costs of suit in favor of petitioner, "ho clearl) deserves the%.
*
Fro% the discussions of both parties in their pleadin's, the 6e) issue to be resolved in the
present case is "hether the pro<i%ate cause of the "ron'ful encash%ent of the chec6s in
Duestion "as due to .a/ petitioner?s failure to %a6e a verification re'ardin' the said
chec6s "ith the respondent in vie" of the %isplace%ent of entries on the face of the
chec6s or .b/ the practice of the respondent of pre0si'nin' blan6 chec6s and leavin' the
sa%e "ith its e%plo)ees.
Petitioner insists that it %erel) fulfilled its obli'ation under la" and contract "hen it
encashed the aforesaid chec6s. Invo6in' Sections &+*
3
and &9$
9
of the Ne'otiable
Instru%ents :a" .NI:/, petitioner clai%s that its dut) as a dra"ee ban6 to a dra"er0client
%aintainin' a chec6in' account "ith it is to pa) orders for chec6s bearin' the dra"er0
client?s 'enuine si'natures. The 'enuine si'natures of the client?s dul) authori=ed
si'natories affi<ed on the chec6s si'nif) the order for pa)%ent. Thus, pursuant to the said
obli'ation, the dra"ee ban6 has the dut) to deter%ine "hether the si'natures appearin'
on the chec6 are the dra"er0client?s or its dul) authori=ed si'natories. If the si'natures are
'enuine, the ban6 has the unavoidable le'al and contractual dut) to pa). If the si'natures
are for'ed and falsified, the dra"ee ban6 has the corollar), but eDuall) unavoidable le'al
and contractual, dut) not to pa).
8

Further%ore, petitioner %aintains that there e<ists a dut) on the dra"ee ban6 to inDuire
fro% the dra"er before encashin' a chec6 onl) "hen the chec6 bears a %aterial
alteration. - %aterial alteration is defined in Section &+$ of the NI: to be one "hich
chan'es the date, the su% pa)able, the ti%e or place of pa)%ent, the nu%ber or relations
of the parties, the currenc) in "hich pa)%ent is to be %ade or one "hich adds a place of
pa)%ent "here no place of pa)%ent is specified, or an) other chan'e or addition "hich
alters the effect of the instru%ent in an) respect. Fith respect to the chec6s at issue,
petitioner points out that the) do not contain an) %aterial alteration.
&,
This is a fact "hich
"as affir%ed b) the trial court itself.
&&

There is no dispute that the si'natures appearin' on the sub>ect chec6s "ere 'enuine
si'natures of the respondent?s authori=ed >oint si'natoriesE na%el), -ntonia Re)es and
1re'orio Re)es "ho "ere respondent?s President and Vice0President for Finance,
respectivel). 5oth pre0si'ned the said chec6s since the) "ere both scheduled to 'o abroad
and it "as apparentl) their practice to leave "ith the co%pan) accountant chec6s si'ned
in blac6 to ans"er for co%pan) obli'ations that %i'ht fall due durin' the si'natories?
absence. It is li6e"ise ad%itted that neither of the sub>ect chec6s contains an) %aterial
alteration or erasure.
Ao"ever, on the blan6 space of each chec6 reserved for the pa)ee, the follo"in'
t)pe"ritten "ords appear; 4ON ABNDRD TN TAOBS-ND PSOS ON:C.4 -bove
the sa%e is the t)pe"ritten "ord, 4!-SA.4 On the blan6 reserved for the a%ount, the
sa%e a%ount of One Aundred Ten Thousand Pesos "as indicated "ith the use of a chec6
"riter. The presence of these irre'ularities in each chec6 should have alerted the
petitioner to be cautious before proceedin' to encash the% "hich it did not do.
It is "ell0settled that ban6s are en'a'ed in a business i%pressed "ith public interest, and
it is their dut) to protect in return their %an) clients and depositors "ho transact business
"ith the%. The) have the obli'ation to treat their client?s account %eticulousl) and "ith
the hi'hest de'ree of care, considerin' the fiduciar) nature of their relationship. The
dili'ence reDuired of ban6s, therefore, is %ore than that of a 'ood father of a fa%il).
&+
Petitioner asserts that it "as not dut)0bound to verif) "ith the respondent since the
a%ount belo" the t)pe"ritten "ord 4!-SA,4 e<pressed in "ords, is the ver) sa%e
a%ount indicated in fi'ures b) %eans of a chec6 "riter on the a%ount portion of the
chec6. The a%ount stated in "ords is, therefore, a %ere reiteration of the a%ount stated in
fi'ures. Petitioner e%phasi=es that a reiteration of the a%ount in "ords is %erel) a
repetition and that a repetition is not an alteration "hich if present and %aterial "ould
have en>oined it to co%%ence verification "ith respondent.
&2
Fe do not a'ree "ith petitioner?s %)opic vie" and carefull) crafted defense. -lthou'h
not in the strict sense 4%aterial alterations,4 the %isplace%ent of the t)pe"ritten entries
for the pa)ee and the a%ount on the sa%e blan6 and the repetition of the a%ount usin' a
chec6 "riter "ere 'larin'l) obvious irre'ularities on the face of the chec6. !learl),
so%eone %ade a %ista6e in fillin' up the chec6s and the repetition of the entries "as
possibl) an atte%pt to rectif) the %ista6e. -lso, if the chec6 had been filled up b) the
person "ho custo%aril) acco%plishes the chec6s of respondent, it should have occurred
to petitioner?s e%plo)ees that it "ould be unli6el) such %ista6es "ould be %ade. -ll
these circu%stances should have alerted the ban6 to the possibilit) that the holder or the
person "ho is atte%ptin' to encash the chec6s did not have proper title to the chec6s or
did not have authorit) to fill up and encash the sa%e. -s noted b) the !-, petitioner
could have %ade a si%ple phone call to its client to clarif) the irre'ularities and the loss
to respondent due to the encash%ent of the stolen chec6s "ould have been prevented.
In the case at bar, e<traordinar) dili'ence de%ands that petitioner should have ascertained
fro% respondent the authenticit) of the sub>ect chec6s or the accurac) of the entries
therein not onl) because of the presence of hi'hl) irre'ular entries on the face of the
chec6s but also of the decidedl) unusual circu%stances surroundin' their encash%ent.
Respondent?s "itness testified that for chec6s in a%ounts 'reater than T"ent) Thousand
Pesos .P+,,,,,.,,/ it is the co%pan)?s practice to ensure that the pa)ee is indicated b)
na%e in the chec6.
&#
This "as not rebutted b) petitioner. Indeed, it is hi'hl) unco%%on
for a corporation to %a6e out chec6s pa)able to 4!-SA4 for substantial a%ounts such as
in this case. If each irre'ular circu%stance in this case "ere ta6en sin'l) or isolated, the
ban6?s e%plo)ees %i'ht have been >ustified in i'norin' the%. Ao"ever, the confluence
of the irre'ularities on the face of the chec6s and circu%stances that depart fro% the usual
ban6in' practice of respondent should have put petitioner?s e%plo)ees on 'uard that the
chec6s "ere possibl) not issued b) the respondent in due course of its business.
Petitioner?s subtle sophistr) cannot e<culpate it fro% behavior that fell e<tre%el) short of
the hi'hest de'ree of care and dili'ence reDuired of it as a ban6in' institution.
Indeed, ta6in' this "ith the testi%on) of petitioner?s operations %ana'er that in case of
an irre'ularit) on the face of the chec6 .such as "hen blan6s "ere not properl) filled out/
the ban6 %a) or %a) not call the client dependin' on ho" bus) the ban6 is on a particular
da),
&$
"e are even %ore convinced that petitioner?s safe'uards to protect clients fro%
chec6 fraud are arbitrar) and sub>ective. ver) client should be treated eDuall) b) a
ban6in' institution re'ardless of the a%ount of his deposits and each client has the ri'ht
to e<pect that ever) centavo he entrusts to a ban6 "ould be handled "ith the sa%e de'ree
of care as the accounts of other clients. Perforce, "e find that petitioner plainl) failed to
adhere to the hi'h standard of dili'ence e<pected of it as a ban6in' institution.
In defense of its cashier@teller?s Duestionable action, petitioner insists that pursuant to
Sections &#
&*
and &*
&3
of the NI:, it could validl) presu%e, upon presentation of the
chec6s, that the part) "ho filled up the blan6s had authorit) and that a valid and
intentional deliver) to the part) presentin' the chec6s had ta6en place. Thus, in
petitioner?s vie", the sole bla%e for this debacle should be shifted to respondent for
havin' its si'natories pre0si'n and deliver the sub>ect chec6s.
&9
Petitioner ar'ues that
there "as indeed deliver) in this case because, follo"in' -%erican >urisprudence, the
'ross ne'li'ence of respondent?s accountant in safe6eepin' the sub>ect chec6s "hich
resulted in their theft should be treated as a voluntar) deliver) b) the %a6er "ho is
estopped fro% clai%in' non0deliver) of the instru%ent.
&8

Petitioner?s contention "ould have been correct if the sub>ect chec6s "ere correctl) and
properl) filled out b) the thief and presented to the ban6 in 'ood order. In that instance,
there "ould be nothin' to 'ive notice to the ban6 of an) infir%it) in the title of the holder
of the chec6s and it could validl) presu%e that there "as proper deliver) to the holder.
The ban6 could not be faulted if it encashed the chec6s under those circu%stances.
Ao"ever, the undisputed facts plainl) sho" that there "ere circu%stances that should
have alerted the ban6 to the li6elihood that the chec6s "ere not properl) delivered to the
person "ho encashed the sa%e. In all, "e see no reason to depart fro% the findin' in the
assailed !- Decision that the sub>ect chec6s are properl) characteri=ed as inco%plete and
undelivered instru%ents thus %a6in' Section &$
+,
of the NI: applicable in this case.
Ao"ever, "e do a'ree "ith petitioner that respondent?s officers? practice of pre0si'nin'
of blan6 chec6s should be dee%ed seriousl) ne'li'ent behavior and a hi'hl) ris6) %eans
of purportedl) ensurin' the efficient operation of businesses. It should have occurred to
respondent?s officers and %ana'ers that the pre0si'ned blan6 chec6s could fall into the
"ron' hands as the) did in this case "here the said chec6s "ere stolen fro% the co%pan)
accountant to "ho% the chec6s "ere entrusted.
Nevertheless, even if "e assu%e that both parties "ere 'uilt) of ne'li'ent acts that led to
the loss, petitioner "ill still e%er'e as the part) fore%ost liable in this case. In instances
"here both parties are at fault, this !ourt has consistentl) applied the doctrine of last
clear chance in order to assi'n liabilit).
In Fest%ont 5an6 v. On',
+&
"e ruled;
GHIIt is petitioner Hban6I "hich had the last clear chance to stop the fraudulent
encash%ent of the sub>ect chec6s had it e<ercised due dili'ence and follo"ed the proper
and re'ular ban6in' procedures in clearin' chec6s. -s "e had earlier ruled, the one "ho
had a last clear opportunit) to avoid the i%pendin' har% but failed to do so is char'eable
"ith the conseDuences thereof.
++
.e%phasis ours/
In the case at bar, petitioner cannot evade responsibilit) for the loss b) attributin'
ne'li'ence on the part of respondent because, even if "e concur that the latter "as indeed
ne'li'ent in pre0si'nin' blan6 chec6s, the for%er had the last clear chance to avoid the
loss. To reiterate, petitioner?s o"n operations %ana'er ad%itted that the) could have
called up the client for verification or confir%ation before honorin' the dubious chec6s.
Veril), petitioner had the final opportunit) to avert the in>ur) that befell the respondent.
Failin' to %a6e the necessar) verification due to the volu%e of ban6in' transactions on
that particular da) is a fli%s) and unacceptable e<cuse, considerin' that the 4ban6in'
business is so i%pressed "ith public interest "here the trust and confidence of the public
in 'eneral is of para%ount i%portance such that the appropriate standard of dili'ence
%ust be a hi'h de'ree of dili'ence, if not the ut%ost dili'ence.4
+2
Petitioner?s ne'li'ence
has been undoubtedl) established and, thus, pursuant to -rt. &&3, of the N!!,
+#
it %ust
suffer the conseDuence of said ne'li'ence.
In the interest of fairness, ho"ever, "e believe it is proper to consider respondent?s o"n
ne'li'ence to %iti'ate petitioner?s liabilit). -rticle +&38 of the !ivil !ode provides;
-rt. +&38. Fhen the plaintiff?s o"n ne'li'ence "as the i%%ediate and pro<i%ate cause
of his in>ur), he cannot recover da%a'es. 5ut if his ne'li'ence "as onl) contributor), the
i%%ediate and pro<i%ate cause of the in>ur) bein' the defendant?s lac6 of due care, the
plaintiff %a) recover da%a'es, but the courts shall %iti'ate the da%a'es to be
a"arded.1avvph!1
<plainin' this provision in :a%bert v. Aeirs of Ra) !astillon,
+$
the !ourt held;
The underl)in' precept on contributor) ne'li'ence is that a plaintiff "ho is partl)
responsible for his o"n in>ur) should not be entitled to recover da%a'es in full but %ust
bear the conseDuences of his o"n ne'li'ence. The defendant %ust thus be held liable onl)
for the da%a'es actuall) caused b) his ne'li'ence. <<< <<< <<<
-s "e previousl) stated, respondent?s practice of si'nin' chec6s in blan6 "henever its
authori=ed ban6 si'natories "ould travel abroad "as a dan'erous polic), especiall)
considerin' the lac6 of evidence on record that respondent had appropriate safe'uards or
internal controls to prevent the pre0si'ned blan6 chec6s fro% fallin' into the hands of
unscrupulous individuals and bein' used to co%%it a fraud a'ainst the co%pan). Fe
cannot believe that there "as no other secure and reasonable "a) to 'uarantee the non0
disruption of respondent?s business. -s testified to b) petitioner?s e<pert "itness, other
corporations "ould ordinaril) have another set of authori=ed ban6 si'natories "ho "ould
be able to si'n chec6s in the absence of the preferred si'natories.
+*
Indeed, if not for the
fortunate happenstance that the thief failed to properl) fill up the sub>ect chec6s,
respondent "ould e<pectedl) ta6e the bla%e for the entire loss since the defense of
for'er) of a dra"er?s si'nature.s/ "ould be unavailable to it. !onsiderin' that respondent
6no"in'l) too6 the ris6 that the pre0si'ned blan6 chec6s %i'ht fall into the hands of
"ron'doers, it is but >ust that respondent shares in the responsibilit) for the loss.
Fe also cannot i'nore the fact that the person "ho stole the pre0si'ned chec6s sub>ect of
this case fro% respondent?s accountant turned out to be another e%plo)ee, purportedl) a
cler6 in respondent?s accountin' depart%ent. -s the e%plo)er of the 4thief,4 respondent
supposedl) had control and supervision over its o"n e%plo)ee. This 'ives the !ourt
%ore reason to allocate part of the loss to respondent.
Follo"in' established >urisprudential precedents,
+3
"e believe the allocation of si<t)
percent .*,J/ of the actual da%a'es involved in this case .represented b) the a%ount of
the chec6s "ith le'al interest/ to petitioner is proper under the pre%ises. Respondent
should, in li'ht of its contributor) ne'li'ence, bear fort) percent .#,J/ of its o"n loss.
Finall), "e find that the a"ards of attorne)?s fees and liti'ation e<penses in favor of
respondent are not >ustified under the circu%stances and, thus, %ust be deleted. The
po"er of the court to a"ard attorne)?s fees and liti'ation e<penses under -rticle ++,9 of
the N!!
+9
de%ands factual, le'al, and eDuitable >ustification.
-n adverse decision does not ipso facto >ustif) an a"ard of attorne)?s fees to the "innin'
part).
+8
ven "hen a clai%ant is co%pelled to liti'ate "ith third persons or to incur
e<penses to protect his ri'hts, still attorne)?s fees %a) not be a"arded "here no sufficient
sho"in' of bad faith could be reflected in a part)?s persistence in a case other than an
erroneous conviction of the ri'hteousness of his cause.
2,
FARFOR, the Decision of the !ourt of -ppeals dated (ul) &*, +,,& and its
Resolution dated Septe%ber +9, +,,& are -FFIRMD "ith the follo"in'
MODIFI!-TIONS; .a/ petitioner 5an6 of -%erica NT 7 S- shall pa) to respondent
Philippine Racin' !lub si<t) percent .*,J/ of the su% of T"o Aundred T"ent)
Thousand Pesos .P++,,,,,.,,/ "ith le'al interest as a"arded b) the trial court and .b/
the a"ards of attorne)?s fees and liti'ation e<penses in favor of respondent are deleted.
Proportionate costs.
SO ORDRD.
TERESITA J. "EONAR#O$#E CASTRO
-ssociate (ustice
F !ON!BR;
RE%NATO S. PUNO
!hief (ustice
!hairperson
ANTONIO T. CARPIO
-ssociate (ustice
RENATO C. CORONA
-ssociate (ustice
"UCAS P. BERSAMIN
-ssociate (ustice
! R T I F I ! - T I O N
Pursuant to Section &2, -rticle VIII of the !onstitution, it is hereb) certified that the
conclusions in the above Decision "ere reached in consultation before the case "as
assi'ned to the "riter of the opinion of the !ourt?s Division.
RE%NATO S. PUNO
!hief (ustice
Foo&'o&()
&
Rollo, pp. 9,093.
+
Id. at &++0&+*.
2
Id. at 98.
#
Id. at 9&09+.
$
Id. at &+*.
*
Id. at $$0$*.
3
Sec. &+*. Bill of exchange defined. K - bill of e<chan'e is an unconditional order
in "ritin' addressed b) one person to another, si'ned b) the person 'ivin' it,
reDuirin' the person to "ho% it is addressed to pa) on de%and or at a fi<ed or
deter%inable future ti%e a su% certain in %one) to order or to bearer.
9
Sec. &9$. !hec6 defined. L - chec6 is a bill of e<chan'e dra"n on a ban6
pa)able on de%and. <cept as herein other"ise provided, the provisions of this
act applicable to a bill of e<chan'e pa)able on de%and appl) to a chec6.
8
Rollo, pp. +8*0+83.
&,
Id. at +89.
&&
Id. at &+$.
&+
Samsung Construction Company Philippines, Inc. v. ar !ast Ban" and #rust
Company, Inc., 1.R. No. &+8,&$, -u'ust &2, +,,#, #2* S!R- #,+, #+&.
&2
Id. at +88.
&#
TSN, testi%on) of !arlos A. Re)es, October &, &88&, p. 2.
&$
TSN, testi%on) of Rose -cuban, -u'ust +,, &88&, pp. 908.
&*
Sec. &#. Blan"s, $hen may %e filled. K Fhere the instru%ent is "antin' in an)
%aterial particular, the person in possession thereof has a prima facie authorit) to
co%plete it b) fillin' up the blan6s therein. -nd a si'nature on a blan6 paper
delivered b) the person %a6in' the si'nature in order that the paper %a) be
converted into a ne'otiable instru%ent operates as a prima facie authorit) to fill it
up as such for an) a%ount. In order, ho"ever, that an) such instru%ent "hen
co%pleted %a) be enforced a'ainst an) person "ho beca%e a part) thereto prior
to its co%pletion, it %ust be filled up strictl) in accordance "ith the authorit)
'iven and "ithin a reasonable ti%e. 5ut if an) such instru%ent, after co%pletion,
is ne'otiated to a holder in due course, it is valid and effectual for all purposes in
his hands, and he %a) enforce it as if it had been filled up strictl) in accordance
"ith the authorit) 'iven and "ithin a reasonable ti%e.
&3
Sec. &*, &elivery' $hen effectual' $hen presumed. K ver) contract on a
ne'otiable instru%ent is inco%plete and revocable until deliver) of the instru%ent
for the purpose of 'ivin' effect thereto. -s bet"een i%%ediate parties, and as
re'ards a re%ote part) other than a holder in due course, the deliver) in order to
be effectual, %ust be %ade either b) or under the authorit) of the part) %a6in',
dra"in', acceptin', or indorsin' as the case %a) beE and in such case the deliver)
%a) be sho"n to have been conditional, or for a special purpose onl), and not for
the purpose of transferrin' the propert) in the instru%ent. 5ut "here the
instru%ent is in the hands of a holder of a due course, a valid deliver) thereof b)
all parties prior to hi% so as to %a6e the% liable to hi% is conclusivel) presu%ed.
-nd "here the instru%ent is no lon'er in the possession of a part) "hose
si'nature appears thereon, a valid and intentional deliver) b) hi% is presu%ed
until the contrar) is proved.
&9
Rollo, p. 2,#.
&8
Id. at 2,*.
+,
Sec. &$. Incomplete instrument not delivered. K Fhere an inco%plete
instru%ent has not been delivered it "ill not, if co%pleted and ne'otiated, "ithout
authorit), be a valid contract in the hands of an) holder, as a'ainst an) person
"hose si'nature "as placed thereon before deliver).
+&
1.R. No. &2+$*,, (anuar) 2,, +,,+, 23$ S!R- +&+.
++
Id. at ++2, citin' Philippine 5an6 of !o%%erce v. !-, 1.R. No. 83*+*, +*8
S!R- *8$, 3,303,9.
+2
(empesa$ v. C), 1.R. No. 8++##, Februar) 8, &882, +&9 S!R- *9+, *83.
+#
-rt. &&3,. Those "ho in the perfor%ance of their obli'ations are 'uilt) of fraud,
ne'li'ence, or dela), and those "ho in an) %anner contravene the tenor thereof,
are liable for da%a'es.
+$
1.R. No. &*,3,8, Februar) +2, +,,$, #$+ S!R- +9$, +82.
+*
TSN, testi%on) of 1erardo Martin, a certified public accountant@auditor fro%
S)cip 1orres 7 Vela)o, Februar) +$, &88+, p. *.
+3
Philippine 5an6 of !o%%erce v. !ourt of -ppeals, 1.R. No. 83*+*, March &#,
&883, +*8 S!R- *8$E !onsolidated 5an6 and Trust !orporation v. !ourt of
-ppeals, 1.R. No. &29$*8, Septe%ber &&, +,,2, #&, S!R- $*+.
+9
-rt. ++,9. In the absence of stipulation, attorne)?s fees and e<penses of
liti'ation, other than >udicial costs, cannot be recovered, e<cept;
.&/ Fhen e<e%plar) da%a'es are a"ardedE
.+/ Fhen the defendant?s act or o%ission has co%pelled the plaintiff to
liti'ate "ith third persons or to incur e<penses to protect his interestE
.2/ In cri%inal cases of %alicious prosecution a'ainst the plaintiffE
.#/ In case of a clearl) unfounded civil action or proceedin' a'ainst the
plaintiffE
.$/ Fhere the defendant acted in 'ross and evident bad faith in refusin' to
satisf) the plaintiff?s plainl) valid, >ust and de%andable clai%E
.*/ In actions for le'al supportE
.3/ In actions for the recover) of "a'es of household helpers, laborers and
s6illed "or6ersE
.9/ In actions for inde%nit) under "or6%en?s co%pensation and
e%plo)er?s liabilit) la"sE
.8/ In a separate civil action to recover civil liabilit) arisin' fro% a cri%eE
.&,/ Fhen at least double >udicial costs are a"ardedE
.&&/ In an) other case "here the court dee%s it >ust and eDuitable that
attorne)?s fees and e<penses of liti'ation should be recovered.
In all cases, the attorne)?s fees and e<penses of liti'ation %ust be
reasonable.
+8
*+* ,ar"eting Corp. v. Sia, +r., 1.R. No. &+39+2, (anuar) +8, &889, +9$ S!R-
$9,, $9#.
2,
elsan Realty - &evelopment Corporation v. Common$ealth of )ustralia, 1.R.
No. &*8*$*, October &&, +,,3, $2$ S!R- *&9, *2+.