Civil Law, Mercantile Law

CITYTRUST BANKING CORPORATION vs.CA and EMME HERRERO G.R. No. 84281 May 27,1994 Nature of Banks, Damages, Nominal damages, Temperate damages


Private respondent averred that she, a businesswoman, made regular deposits, starting September of 1979, with petitioner Citytrust at its Burgos branch in Calamba, Laguna. On 15 May 1980, she deposited with petitioner the amount of Thirty One Thousand Five Hundred Pesos(P31,500.00), in cash, in order to amply cover 6 postdated checks she issued. When presented for encashment upon maturity, all the checks were dishonored due to “insufficient funds.”Petitioner, in its answer, asserted that it was due to private respondent’s fault that her checks were dishonored. It averred that instead of stating her correct account number, i.e., 29000823, inh er deposit slip, she inaccurately wrote 2900823. The RTC dismissed the complaint for lack of merit.

The CA reversed the trial court’s decision.


ISSUE: Whether petitioner bank is liable.



We are not persuaded that defendant bank was not free from blame for the fiasco. The depositors are not concerned with banking procedure. That is the responsibility of the bank and its employees. Bank clients are supposed to rely on the services extended by the bank, including the assurance that their deposits will be duly credited them as soon as they are made. For, any delay in crediting their account can be embarrassing to them as in the case of plaintiff.

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. However it is wrong to award, along with nominal damages, temperate or moderate damages. The two awards are incompatible and cannot be granted concurrently. Nominal damages are given in order that a right of the plaintiff, which has been violated or invaded by the defendant,may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him (Art. 2221).


Temperate or moderate damages, which are more than nominal but less than compensatory damages, on the other hand, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with reasonable certainty (Art. 2224, New Civil Code). In the instant case, we also find need for vindicating the wrong done on private respondent, and we accordingly agree with the Court of Appeals in granting to her nominal damages but not in similarly awarding temperate or moderate damages.

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