BANKING the amount of P1,629.

21 for interest and charges as well as late payment charges

[71] CITIBANK, N.A. v DINOPOL as stated in his Statement of Account dated January 26, 1997. Atty. Dinopol paid
GR No. 188412 | Nov 22 2010 | Mendoza, J. said interests and charges on February 26, 1997.
● On March 6, 1997, Atty. Dinopol issued a check using his credit checkbook
PETITIONER: CITIBANK, N.A. account with Citibank in the amount of P30,000.00 in favor of one Dr. Marietta
RESPONDENT: ATTY. ERNESTO S. DINOPOL M. Geonzon (Dr. Geonzon) for investment purposes in her restaurant business.
TOPIC: Nature of Business o However, when the check was deposited on March 12, 1997, it was
dishonored for the reason, 'Drawn Against Insufficient Funds' or
CASE SUMMARY: Dinopol applied for Citibanks “Ready Credit Checkbooks.” He 'DAIF.'
was granted a credit line of Php 30,000. Later on, Dinopol was billed for interest and ● Atty. Dinopol filed a civil action for damages against Citibank before the RTC.
other charges, which he paid. In March 1997, Dinopol issued a check to invest in a Atty. Dinopol alleged that said bank was grossly negligent and acted in bad
restaurant but it was dishonored for being “Drawn Against Insufficient Funds.” He faith in dishonoring his check.
sued the bank for damages. The SC ruled in favor of Dinopol because Citibank was ● In defense, Citibank averred that it was completely justified in dishonoring Atty.
not able to disclose the terms and conditions of their service properly and that Dinopol's check because the account did not have sufficient funds at the time it
Dinopol was not yet a delinquent account holder. was issued. Citibank explained that when said check in the amount of
P30,000.00 was issued, his credit line was already insufficient to accommodate it.
DOCTRINE: The banking business is impressed with public interest. Of paramount o His credit limit had been reduced by the interests and penalty
importance is the trust and confidence of the public in general in the banking charges imposed as a result of his late payment. Citibank argued
industry. Consequently, the diligence required of banks is more than that of a Roman that had Atty. Dinopol been prompt in the payment of his
pater familias or a good father of a family. The highest degree of diligence is obligations, he would not have incurred interests and penalty
expected. charges and his credit line of P30,000.00 would have been available
at the time the check was issued and presented for payment.
In its declaration of policy, the General Banking Law of 2000 requires of banks the ● RTC ruled in favor of Dinopol and ordered Citibank to pay 100k moral
highest standards of integrity and performance. Needless to say, a bank is 'under damages, 50k atty fees, and costs.
obligation to treat the accounts of its depositors with meticulous care.' The fiduciary o Held that Citibank failed to disclose the terms and conditions ofits
nature of the relationship between the bank and the depositors must always be of 'Citybank Ready Credit Account' when Atty. Dinopol applied for it.
paramount concern. Only the general provisions of the agreement were explained to
him.
FACTS: ● CA affirmed RTC but increase the moral damages to 500k and exemplary
● In December 1996, Atty. Dinopol availed of Citibank's 'Ready Credit damages of 50k.
Checkbooks'.
● Citibank granted Atty. Dinopol a credit line limit of P30,000.00. ISSUES and RULING:
o Dinopol received from Citibank a check booklet consisting of ● WON Citibank is liable to Dinopol for damages. – YES. A perusal of the
several checks with a letter stating that the account was 'ready to evidentiary records shows that Citibank was at fault when it dishonored the
use.' subject check.
● Later, Citibank billed Atty. Dinopol the sum of P1,545.00 representing Ready o First, Citibank claims that, as a matter of standard operating procedure, it
Credit Documentary Stamp and Annual Membership Fee as reflected in his sent to Atty. Dinopol the Citibank Ready Credit Customer Guidebook upon
Statement of Account dated December 26, 1996. Thereafter, Citibank billed him
 the approval of his Ready Credit Account application and so, he was aware bank is 'under obligation to treat the accounts of its depositors with
of the terms and conditions stated therein. meticulous care.' The fiduciary nature of the relationship between the bank
▪ Yet, except for its bare allegation, no other substantial and the depositors must always be of paramount concern.
proof was presented by Citibank that the guidebook was
indeed sent to Atty. Dinopol. In fact, its witness, DISPOSITIVE: WHEREFORE, the December 16, 2008 Decision of the Court of
Hernando, admitted that the subject handbook was not at Appeals is MODIFIED to read as follows:
all delivered to him.
o Second, when Atty. Dinopol issued the subject check for the full amount of In view of the foregoing, judgment is hereby rendered ordering defendant Citibank
P30,000.00 and Citibank dishonored it because of insufficiency of funds by N.A to pay plaintiff Atty. Ernesto S. Dinopol the following:chanrobles virtual law
P58.33 representing the amount charged on his credit line for penalties and library
charges, the said amount was not yet overdue.
▪ Contrary to Citibank's insistence, Atty. Dinopol was 1] P100,000.00 as and for moral damages;chanroblesvirtualawlibrary
definitely not yet a delinquent account holder. More
importantly, Citibank failed to consider the fact that Atty. 2] P50,000.00 as and for exemplary damages;chanroblesvirtualawlibrary
Dinopol issued the check on March 6, 1997 after paying
the full amount of P1,629.21 and clearing with the bank if 3] P50,000.00 as and for attorney's fees; and
he could issue a check in the amount of P30,000.00.
Citibank did not even refute the allegation that it gave 4] Costs of suit,
Atty. Dinopol the go-signal to issue such a check.
o Court agrees with the award of moral and exemplary damages but the moral plus interest at the legal rate reckoned from the filing of the complaint.
damages must be the amount awarded by the RTC (a more reasonable
amount of 100k) SO ORDERED.
o As to the award of exemplary damages, the law allows it by way of example
for the public good. The business of banking is impressed with public
interest and great reliance is made on the bank's sworn profession of
diligence and meticulousness in giving irreproachable service. Thus, the
Court affirms the award as a way of setting an example for the public good.
o In any event, Citibank should have been more cautious in dealing with its
clients since its business is imbued with public interest. Banks must always
act in good faith and must win the confidence of clients and people in
general. It is irrelevant whether the client is a lawyer or not.
o It cannot be over emphasized that the banking business is impressed with
public interest. Of paramount importance is the trust and confidence of the
public in general in the banking industry. Consequently, the diligence
required of banks is more than that of a Roman pater familias or a good
father of a family. The highest degree of diligence is expected.
o In its declaration of policy, the General Banking Law of 2000 requires of
banks the highest standards of integrity and performance. Needless to say, a