Araneta v. Bank Of America

MAKALINTAL, J.:

Petition for review by certiorari of the decision of Court of Appeals in CA-G.R. No. L-34508-R modifying that of the Court of First Instance of Manila in the Case No. 52442. Leopoldo Araneta, the petitioner herein, was a local merchant engaged in the import and export business. On June 30, 1961 he issued a check for $500 payable to cash and drawn against the San Francisco main office of the Bank of America, where he had been maintaining a dollar current account since 1948.

At that time he had a credit balance of $523.81 in his account, confirmed by the bank's assistant cashier in a letter to Araneta dated September 7, 1961. However, when the check was received by the bank on September 8, 1961, a day after the date of the letter, it was dishonored and stamped with the notation "Account Closed." Upon inquiry by Araneta as to why his check had been dishonored, the Bank of America acknowledged that it was an error, explaining that for some reason the check had been encoded with wrong account number, and promising that "we shall make every effort to see that this does not reoccur."

The bank sent a letter of apology to the payee of the check, a Mr. Harry Gregory of Hongkong, stating that "the check was returned through an error on our part and should not reflect adversely upon Mr. Araneta." In all probability the matter would have been considered closed, but another incident of a similar nature occurred later. On May 25, and 31, 1962 Araneta issued Check No. 110 for $500 and Check No. 111 for $150, respectively, both payable to cash and drawn against the Bank of America.ℒαwρhi৷ These two checks were received by the bank on June 3, 1962.

The first check appeared to have come into the hands of Rufina Saldana, who deposited it to her account the First National City Bank of New York, which in turn cleared it through the Federal Reserve Bank. The second check appeared to have been cleared through the Wells Fargo Bank. Despite the sufficiency of Araneta's deposit balance to cover both checks, they were again stamped with the notation "Account Closed"

and returned to the respective clearing banks. In the particular case of Check No. 110, it was actually paid by the Bank of America to the First National City Bank. Subsequently, however, the Bank of America, claiming that the payment had been inadvertently made, returned the check to the First National City Bank with the request that the amount thereof be credited back to the Bank of America.

In turn, the First National City Bank wrote to the depositor of the check, Rufina Saldana, informing her about its return with the notation "Account Closed" and asking her consent to the deduction of its amount from her deposit. However, before Mrs. Saldana's reply could be received, the Bank of America recalled the check from the First National City Bank and honored it.

In view of the foregoing incidents, Araneta, through counsel, sent a letter to the Bank of America demanding damages in the sum of $20,000. While admitting responsibility for the inconvenience caused to Araneta, the bank claimed that the amount demanded was excessive, and offered to pay the sum of P2,000.00. The offer was rejected.

On December 11, 1962 Araneta filed the complaint in this case against the Bank of America for the recovery of the following: 1. Actual or compensatory damages P30,000.00 2. Moral damages 20,000.00 3.

Temperate damages 50,000.00 4. Exemplary damages 10,000.00 5. Attorney's fees 10,000.00 TOTAL