Filipinas Broadcasting vs.

Ago Medical Center

GRN 141994 January 17, 2005

Carpio, J.:

FACTS:

Rima & Alegre were host of FBNI radio program “Expose”. Respondent Ago was the owner of the
Medical & Educational center, subject of the radio program “Expose”. AMEC claimed that the
broadcasts were defamatory and owner Ago and school AMEC claimed for damages. The complaint
further alleged that AMEC is a reputable learning institution. With the supposed expose, FBNI, Rima
and Alegre “transmitted malicious imputations and as such, destroyed plaintiff’s reputation. FBNI was
included as defendant for allegedly failing to exercise due diligence in the selection and supervision of
its employees. The trial court found Rima’s statements to be within the bounds of freedom of speech
and ruled that the broadcast was libelous. It ordered the defendants Alegre and FBNI to pay AMEC
300k for moral damages.”

ISSUE:

Whether or not AMEC is entitled to moral damages.

RULING:

A juridical person is generally not entitled to moral damages because, unlike a natural person, it
cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental
anguish or moral shock. Nevertheless, AMEC’s claim, or moral damages fall under item 7 of Art – 2219
of the NCC.

This provision expressly authorizes the recovery of moral damages in cases of libel, slander or any
other form of defamation. Art 2219 (7) does not qualify whether the plaintiff is a natural or juridical
person. Therefore, a juridical person such as a corporation can validly complain for libel or any other
form of defamation and claim for moral damages. Moreover, where the broadcast is libelous per se,
the law implied damages. In such a case, evidence of an honest mistake or the want of character or
reputation of the party libeled goes only in mitigation of damages. In this case, the broadcasts are
libelous per se. thus, AMEC is entitled to moral damages. However, we find the award P500,000 moral
damages unreasonable. The record shows that even though the broadcasts were libelous, per se,
AMEC has not suffered any substantial or material damage to its reputation. Therefore, we reduce the
award of moral damages to P150k.

v JOIN TORT FEASORS are all the persons who command, instigate, promote, encourage, advice
countenance, cooperate in, aid or abet the commission of a tort, as who approve of it after it is done,
for its benefit.

Negotiable Instruments Digest: METROPOLITAN BANK AND TRUST COMPANY (formerly ASIANBANK
CORPORATION) V. BA FINANCE CORPORATION and MALAYAN INSURANCE CO. INC.

METROPOLITAN BANK AND TRUST COMPANY (formerly ASIANBANK CORPORATION) V. BA FINANCE

CORPORATION and MALAYAN INSURANCE CO. INC.

[G.R. No. 179952, Dec. 4, 2009] (607 SCRA 620)

FACTS:
 Lamberto Bitanga (Bitanga) obtained from respondent BA Finance Corporation (BA
Finance) a loan to secure which, he mortgaged his car to respondent BA Finance. Bitanga thus had
the mortgaged car insured by respondent Malayan Insurance Co., Inc. (Malayan Insurance). The car
was stolen. On Bitangas claim, Malayan Insurance issued a check payable to the order of B.A. Finance
Corporation and Lamberto Bitanga for P224,500, drawn against China Banking Corporation (China
Bank). The check was crossed with the notation For Deposit Payees Account Only.

Without the indorsement or authority of his co-payee BA Finance, Bitanga deposited the check
to his account with the Asianbank Corporation (Asianbank), now merged with petitioner Metropolitan
Bank and Trust Company (Metrobank). Bitanga subsequently withdrew the entire proceeds of the
check.

In the meantime, Bitangas loan became past due, but despite demands, he failed to settle it.
BA Finance thereupon demanded the payment of the value of the check from Asianbank but to no
avail, prompting it to file a complaint for sum of money and damages against Asianbank and Bitanga
alleging that, inter alia, it is entitled to the entire proceeds of the check.

On the issue of whether or not BA Finance has a cause of action, Metrobank contends that
Bitanga is authorized to indorse the check as the drawer names him as one of the
payees. Moreover, his signature is not a forgery nor has he or anyone forged the signature of the
representative of BA Finance Corporation. No unauthorized indorsement appears on the check.
Absent the indispensable fact of forgery or unauthorized indorsement, the payee may not recover
from the collecting bank.

ISSUE 1:

Whether BA Finance has a cause of action against Metrobank even if the subject check had not
been delivered to BA Finance by the issuer itself?

HELD:

YES. Section 41 of the Negotiable Instruments Law provides:

Where an instrument is payable to the order of two or more payees or indorsees who are not
partners, all must indorse unless the one indorsing has authority to indorse for the others.

Bitanga alone endorsed the crossed check, and petitioner allowed the deposit and release of
the proceeds thereof, despite the absence of authority of Bitangas co-payee BA Finance to endorse it
on its behalf. Petitioners argument that since there was neither forgery, nor unauthorized
indorsement because Bitanga was a co-payee in the subject check, the dictum in Associated Bank v.
CA does not apply in the present case fails. The payment of an instrument over a missing indorsement
is the equivalent of payment on a forged indorsement or an unauthorized indorsement in itself in the
case of joint payees.

Accordingly, one who credits the proceeds of a check to the account of the indorsing payee is
liable in conversion to the non-indorsing payee for the entireamount of the check.

ISSUE 2:

Is Metrobank liable to BA Finance for the full value of the check, under the Negotiable
Instruments Law?

HELD:

YES. Section 68 of the Negotiable Instruments Law instructs that joint payees who indorse are
deemed to indorse jointly and severally. When the maker dishonors the instrument, the holder
thereof can turn to those secondarily liable the indorser for recovery.
 A collecting bank, Asianbank in this case, where a check is deposited and which indorses the
check upon presentment with the drawee bank, is an indorser. his is because in indorsing a check to
the drawee bank, a collecting bank stamps the back of the check with the phrase all prior
endorsements and/or lack of endorsement guaranteed and, for all intents and purposes, treats the
check as a negotiable instrument, hence, assumes the warranty of an indorser.

Petitioner, as the collecting bank or last indorser, generally suffers the loss because it has the
duty to ascertain the genuineness of all prior indorsements considering that the act of presenting the
check for payment to the drawee is an assertion that the party making the presentment has done its
duty to ascertain the genuineness of prior indorsements.

SIMEX INTERNATIONAL V. CA (G.R. NO. 88013)

Facts:

Petitioner, a private corporation engaged in the exportation of food products, was a depositor
maintaining a checking account with respondent Traders Royal Bank. Petitioner deposited to its
account increasing its balance and subsequently, issued several checks but was surprised to learn that
it had been dishonored for insufficient funds. As a consequence, petitioner received demand letters
from its suppliers for the dishonored checks. Investigation disclosed that the deposit was not credited
to it. The error was rectified and the dishonored checks were consequently paid. Petitioner
demanded reparation from respondent bank for its gross and wanton negligence but the later did not
heed. Petitioner then filed before the RTC which later held that respondent bank was guilty of
negligence but petitioner nonetheless was not entitled to moral damages. CA affirmed.

Issue:

Whether or not petitioner is entitled to damages due to respondent bank’s negligence.

Ruling: YES.

As the Court sees it, the initial carelessness of the respondent bank, aggravated by the lack of
promptitude in repairing its error, justifies the grant of moral damages. This rather lackadaisical
attitude toward the complaining depositor constituted the gross negligence, if not wanton bad faith,
that the respondent court said had not been established by the petitioner. We shall recognize that
the petitioner did suffer injury because of the private respondent’s negligence that caused the
dishonor of the checks issued by it. The immediate consequence was that its prestige was impaired
because of the bouncing checks and confidence in it as a reliable debtor was diminished.

The point is that as a business affected with public interest and because of the nature of its functions,
the bank is under obligation to treat the accounts of its depositors with meticulous care, always
having in mind the fiduciary nature of their relationship. In the case at bar, it is obvious that the
respondent bank was remiss in that duty and violated that relationship. What is especially deplorable
is that, having been informed of its error in not crediting the deposit in question to the petitioner, the
respondent bank did not immediately correct it but did so only one week later or twenty-three days
after the deposit was made. It bears repeating that the record does not contain any satisfactory
explanation of why the error was made in the first place and why it was not corrected immediately
after its discovery. Such ineptness comes under the concept of the wanton manner contemplated in
the Civil Code that calls for the imposition of exemplary damages.
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC.

v. ALFONSO VERCHEZ, et al.

481 SCRA 384 (2006)

Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those
who in any manner contravene the tenor thereof, are liable for damages.

Respondent Grace Verchez-Infante (Grace) hired the services of Radio Communications of the
Philippines, Inc. (RCPI) to send a telegram to her sister respondent Zenaida Verchez-Catibog (Zenaida),
asking her to send money for their mother Editha Verchez (Editha) who at that time was confined in a
hospital in Sorsogon. But it took 25 days before such message was conveyed to Zenaida.

When Editha died, her husband, respondent Alfonso Verchez (Alfonso), along with his daughters
Grace and Zenaida and their respective spouses, filed an action for damages against RCPI before
the Regional Trial Court (RTC) of Sorsogon. They alleged that the delay in the delivery of the message
contributed to the early death of Editha. RCPI argues that there is no privity of contract between
other respondents except with Grace, also the delay in the delivery is caused by force majeure,
maintaining further that they exercised due diligence in choosing their employees; hence they must
be released from any liability. The RTC rendered judgement against RCPI. RCPI appealed to the Court
of Appeals (CA). The CA affirmed the decision of the RTC.

ISSUE:

Whether or not the award of moral damages is proper despite the fact that there was no
direct connection between the injury and the alleged negligent acts

HELD:

RCPI‘s stand fails. It bears noting that its liability is anchored on culpa contractual or breach of
contract with regard to Grace, and on tort with regard to her co-plaintiffs-herein-co-respondents.
Article 1170 of the Civil Code provides that those who in the performance of their obligations are
guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are
liable for damages.

In the case at bar, RCPI bound itself to deliver the telegram within the shortest possible time. It took
25 days, however, for RCPI to deliver it. RCPI invokes force majeure, specifically, the alleged radio
noise and interferences which adversely affected the transmission and/or reception of the telegraphic
message. Additionally, its messenger claimed he could not locate the address of Zenaida and it was
only on the third attempt that he was able to deliver the telegram.

For the defense of force majeure to prosper, it is necessary that one has committed no negligence or
misconduct that may have occasioned the loss. An act of Godcannot be invoked to protect a person
who has failed to take steps to forestall the possible adverse consequences of such a loss. One‘s
negligence may have concurred with an act of God in producing damage and injury to another;
nonetheless, showing that the immediate or proximate cause of the damage or injury was a fortuitous
event would not exempt one from liability. When the effect is found to be partly the result of a
person‘s participation – whether by active intervention, neglect or failure to act – the whole
occurrence is humanized and removed from the rules applicable to acts of God.
Assuming arguendo that fortuitous circumstances prevented RCPI from delivering the telegram at the
soonest possible time, it should have at least informed Grace of the non-transmission and the
non-delivery s that she could have taken steps to remedy the situation. But it did not. There lies the
fault or negligence.

And for quasi-delict, RCPI is liable to Grace‘s co-respondents following Article 2176 of the Civil Code
which provides that whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and is governed by the provisions of
this Chapter.

RCPI‘s liability as an employer could of course be avoided if it could prove that it observed the
diligence of a good father of a family to prevent damage provided in Article 2180 of the Civil Code.
RCPI failed, however, to prove that it observed all the diligence of a good father of a family to prevent
damage.