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SECOND DIVISION

JOSE T. ONG BUN, G.R. No. 212362

Petitioner,
Present:

CARPIO,* J., Chairperson,

- versus - PERALTA,
PERLAS-BERNABE,
CAGUIOA, and
REYES, JR., JJ.

BANK OF THE PHILIPPINE Promulgated:

x-~~~~~~-~:------------------~~~~~~~~~~:---------------~-~-~-~x
DECISION

PERALTA,J.:

This is to resolve the Petition for Review on Certiorari under Rule 45

of the Rules of Court, dated May 22, 2014, of petitioner Jose T. Ong Bun, that
seeks to reverse and set aside the Decision 1 dated September 25, 2012 and
Resolution2 dated March 19, 2014 of the Court of Appeals (CA) in CA-G.R.
CV No. 02715 dismissing petitioner's complaint for collection of sum of
money and damages against respondent Bank of the Philippine Islands (BPI).

The facts follow.

Acting Chief Justice per Special Order No. 2539 dated February 28, 2018.
Penned by Associate Justice Gabriel T. Jngles, with the concurrence of then Associate Justices
Pampio A. Abarintos and Melchor Q. C. Sadang; rollo, pp. 26-35.
2 Rollo, pp. 47-49.
(;t
Decision -2- G.R. No. 212362

In 1989, Ma. Lourdes Ong, the wife of petitioner, purchased the

following three (3) silver custodian certificates (CC) in the Spouses' name
from the Far East Bank & Trust Company (FEBTC):

a) CC No. 131157 dated June 9, 1989 in the name of Jose Ong Bun or
Ma. Lourdes Ong for One Hundred Thousand Pesos;

b) CC No. 131200 dated July 25, 1989 in the name of Jose Ong Bun or
Ma. Lourdes Ong for Five Hundred Thousand Pesos; and

c) CC No. 224826 dated November 8, 1989 in the name of Jose or Ma.

Lourdes Ong Bun for One Hundred Fifty Thousand Pesos.

The three CCs have the following common provisions:

This instrument is transferable only in the books of the Custodian

by the holder, or in the event of transfer, by the transferee or buyer thereof
in person or by a duly authorized attorney-in-fact upon surrender of this
instrument together with an acceptable deed of assignment.

The Holder hereof or transferee can withdraw at anytime during

office hours his/her Silver Certificate of Deposit herein held in custody.

This instrument shall not be valid unless duly signed by the

authorized signatories of the Bank, and shall cease to have force and effect
upon payment under the terms hereof.

Thereafter, FEBTC merged with BPI after about eleven years since the
said CCs were purchased. After the death of Ma. Lourdes Ong in December
2002, petitioner discovered that the three CCs bought from FEBTC were still
in the safety vault of his deceased wife and were not surrendered to FEB TC.
As such, petitioner sent a letter dated August 12, 2003 to BPI, through the
manager of its Trust Department Asset Management, to advise him on the
procedure for the claim of the said certificates. BPI replied to petitioner and
informed the latter that upon its merger with FEBTC in 2000, there were no
Silver Certificates of Deposit outstanding, which meant that the certificates
were fully paid on their respective participation's maturity dates which did
not go beyond 1991. There were further exchanges of written communications
between petitioner and BPI, but the latter still refused to pay petitioner's claim
because his certificates were no longer outstanding in its records. Thus,
petitioner, with the assistance of counsel, made a final demand in writing for
the payment of the certificates, to no avail. ·

cl
Decision -3- G.R. No. 212362

After about three years from his discovery of the certificates, petitioner
filed a complaint for collection of sum of money and damages against BPI on
March 7, 2006 with the Regional Trial Comi (RTC), Branch 33, Iloilo City
(Civil Case No. 06-28822) praying that BPI be ordered to pay him
1!750,000.00 for the three CCs, legal interest, 1!75,000.00 for attorney's fees,
1!100,000.0Q for moral damages, and an unspecified amount for exemplary
damages as well as cost of suit.

BPI, in its Answer, insists that as early as 1991, all the Silver
Certificates of Deposits, including those issued to petitioner and his wife, were
already paid. It claimed that the CCs had terms of only 25 months and that
by the year 2000, when it merged with FEBTC and when the Trust and
Investments Group of FEBTC was no longer in existence, there were .no
longer any outstanding CCs in its books. It had checked and double-checked
its records as well as those of FEB TC. It also claimed that FEB TC had fuily
paid all of its silver certificates of time deposit on their maturity dates.
According to BPI, contrary to petitioner's assertion, the presentation or
surrender of the certificates is not a condition precedent for its payment by
FEBTC. It also argued that petitioner filed his claim for the first time only on
August 12, 2003, or 12 years after the maturity of the CCs and under Article
1144 of the Civil Code, actions based on a written contract must be brought
within 10 years from the time the right accrues. In this case, according to BPI,
petitioner's right accrued upon the maturity of the CCs in 1991, and the same
has prescribed by the time he filed his claim. As a counterclaim, BPI prayed
that petitioner be ordered to pay it 1!75,000.00 as attorney's fees, 1!2,000.00
per court appearance, at least P20,000.00 for litigation expenses, and
Pl,000,000.00 for exemplary damages. It further prayed that the complaint
be dismissed and that petitioner be ordered to pay for the cost of the suit.

After trial on . the merits, the RTC found in favor of petitioner and
disposed of the case as follows:

WHEREFORE, judgment is hereby rendered:

(a) Ordering defendant to pay plaintiff the sum of One Hundred

Thousand Pesos (P~00,000.00) for the Custodian Certificate dated June 9,
1989 bearing Serial CC No. 13115; the sum of Five Hundred Thousand
Pesos (P500,000.00) for the Custodian Certificate dated July 25, 1989
bearing Serial CC No. 131200; and the sum of One Hundred Fifty Thousand
Pesos (P150,000.00) for the Custodian Certificate dated November 8, 1989
bearing Serial CC No. 224826, including their respective interests for
twenty-five (25) months under the terms and conditions of the Silver
Certificate of Deposit - entrusted for custody to defendant by plaintiff- that
the said Custodian Certificates represent; plus legal interest thereon as

ff
regular savings deposit of the investments and their accrued interests from
• the time of their respective maturity up to the time of payment.
Decision -4- G.R. No. 212362

(b) Ordering defendant to pay the plaintiff Pl00,000.00 for moral

damages and another Pl00,000.00 as exemplary damages; and

(c) Ordering the defendant to pay P75,000.00 as attorney's fees, plus

costs of the suit. ·

SO ORDERED. 3

As a consequence, BPI elevated the case to the CA wherein the latter

granted the appeal of the former. The dispositive p~rtion of the CA's decision
reads as follows: ·

WHEREFORE, the appeal is hereby GRANTED. The 5 JUNE 2008

Decision rendered ih Civil Case No. 06-28822 by Branch 33 of the Regional
Trial Court in Iloilo City is hereby REVERSED and SET ASIDE and the
complaint filed in the said case is hereby DISMISSED.

SO ORDERED. 4

The CA ruled that petitioner failed to prove that the deposits, which he
claims to be unpaid, are still outstanding. According to the appellate court,
the custodian certificates, standing alone, do not prove an outstanding deposit
with the bank, but merely certify that FEBTC had in its custody for and in
behalf of either petiti.oner or his late wife the corresponding Silver Certificates
of Deposit and nothillg more. The CA further ruled that the surrender of the
custodian certificates is not required for the withdrawal of the certificates 'of
deposits themselv~s or for the payment of the Silver Certificates of Deposit,
hence, even if the holder has in his possession the said custodian certificates,
this does not ipso facto mean that he is an unpaid depositor of the bank.

Hence, the present petition.

Petitioner insists that the CCs are evidence that the Silver Certificates
of Deposit in his name in varying amounts are in the possession of the Trust
Investments Group of FEBTC and constitute an outstanding obligation of
respondent with whom FEBTC merged. He adds that since it has been proved
that the CCs remained in the possession of the petitioner and has not been
contn~verted or shown to be non-existing, the said CCs remain
incontrovertible and unrebutted evidence of indebtedness of the respond~nt
because said CCs all openly admit that the Silver Certificates of Deposit in
varying amounts owned by the petitioner are in its possession and has not be.en
discharged by payment. Hence, according to petitioner, the CA erred in its
conclusion that the CCs in his possession do not prove an outstanding deposit

4
Rollo, p. 82.
Id. at 35.
cl
Decision -5- G.R. No. 212362

with the respondent simply because the CCs are not the Certificates of Deposit
themselves.

The Rules of Court require that only questions of law should be raised
in petitions filed under Rule 45. 5 This court is not a trier of facts. It will not
entertain questions of fact as the factual findings of the appellate courts are
"final, binding[,] or conclusive on the parties and upon this [c]ourt" 6 when
supported by substantial evidence. 7 Factual findings of the appellate courts
will not be reviewed nor disturbed on appeal to this court. 8

In Chessman v. Intermediate Appellate Court, 9 this Court distinguished

questions of law from questions of fact, thus:

As distinguished from a question of law - which exists "when the

doubt or difference arises as to what the law is on a certain state of facts"
- "there is a question of fact when the doubt or difference arises as to the
truth or the falsehood of alleged facts;" or when the "query necessarily
invites calibration of the whole evidence considering mainly the credibility
of witnesses, existence and relevancy of specific surrounding
circumstances, their relation to each other and to the whole and the
probabilities of the situation. 1110

However, these rules do admit of exceptions. I I Over time, the

exceptions to these rules have expanded. At present, there are 10 recognized
exceptions that were first listed in Medina v. Mayor Assistor, Jr. :I 2

(1) When the conclusion is a finding grounded entirely on

speculation, surmises or conjectures; (2) When the inference made is
manifestly mistaken, absurd or impossible; (3) Where there is a grave abuse
of discretion; (4) When the judgment is based. on a misapprehension of
facts; (5) When the findings of fact are conflicting; (6) When the Court of
Appeals, in making its findings, went beyond the issues of the case and the
same is contrary to the admissions of both appellant and appellate; (7) The
findings of the Court of Appeals are contrary to those of the trial court; (8)
When the findings of fact are conclusions without citation of specific
evidence on which they are based; (9) When the facts set forth in the petition
as well as in the petitioner's main and reply briefs are not disputed by the
respondents; and (10) The finding of fact of the Court of Appeals is

Rules of Court, Rule 45, Sec. I.

6 Commissioner of Internal Revenue v. Embroidery and Garments Industries (Phil), Inc., 364 Phil.

ti
541, 546 (l 999).
7 Siasat v. Court of Appeals, 425 Phil. 139, 145 (2002); Tabaco v. Court of Appeals, 239 Phil. 485,
490 (1994 ); and Padilla v. Court ofAppeals, 241 Phil. 776, 78 I (1988).
s Bank ofthe Philippine Islands v. Leobrera, 461 Phil. 461, 469 (2003).
9
271 Phil. 89 (1991).
10
Id. at 97-98.
11
Pascual v. Burgos, et al., 777 Phil. 167, 182 (2016).
12 269 Phil. 225 (1990).
Decision -6- G.R. No. 212362

premised on the supposed absence of evidence and is contradicted by the

evidence on record. 13

In the present case, the findings of facts of the R TC and the CA are
apparently in contrast, hence, this Court deems it proper to rule on the issues
raised in the petition.

·After careful consideration, this Court finds the petition to be

meritorious.

It is undisputed that petitioner is in possession of three (3) CCs from

FEBTC in the following amounts: (a) Custodian Certificate of Silver
Certificate of Deposit No. 131157 issued on June 9, 1989 in the amount of
One Hundred Thousand Pesos (Pl00,000.00); (b) Custodian Certificate of
Silver Certificate of I_)eposit No. 131200 issued on July 25, 1989, in the
amount of Five Hundred Thousand Pesos (P500,000.00); (c) Custodian
Certificate of Silver Certificate of Deposit No. 224826 issued on November
8, 1989 in the amount of One Hundred Fifty Thousand Pesos (P150,000.00).

Simply put, the said CCs are proof that Silver Certificates of Deposits
are in the custody of a custodian, which is, in this case, FEBTC. The CA
therefore, erred in suggesting that the possession of petitioner of the same CCs
does I].Ot prove an outstanding deposit because the latter are not the certificates
of deposit themselves. What proves the deposits of the petitioner are the
Silver Certificates .~f Deposits that have been admitted by the Trust
Investments Group of the FEBTC to be in its custody as clearly shown by the
wordings used in the subject CCs. Custodian Certificate of Silver Certificate
.of Deposit No. 131.200 reads, in part:

This is to certify that the TRUSTS INVESTMENTS GROUP of

FAR EAST BANK AND TRUST COMPANY (Custodian) has in its
custody for and in behalf of *****JOSE ONG BUN OR MA. LOURDES
ONG***** (Holder) the Silver Certificate of Deposit in the amount of
PESOS: PhpS00,000.00.

This instrument is transferable only in the books of the Custodian

by the holder, or in the event of transfer, by the transferee or buyer thereof
in person or by a duly authorized attorney-in-fact upon surrender of this
instrument together with an acceptable deed of assignment.

The Holder hereof or transferee can withdraw at anytime during

office hours his/her Silver Certificate of Deposit herem held in custod~

13
Id. at 232.
Decision -7- G.R. No. 212362

This instrument shall not be valid unless duly signed by the

authorized signatories of the Bank, and shall cease to have force and effect
upon payment u~der the terms hereof. 14

The other two custodian certificates are of the same tenor.

In its Comment, respondent argued that upon its merger with FEBTC,
there were no longer ariy outstanding Silver Certificates of Deposits, thus:

As previously discussed, the nature of the Silver Custodian

Certificates of Time Deposit was issued by then FEB TC on the occasion of
its 25th year anniversary in the year 1989. Consequently, these certificates
had a term/maturity of twenty-five (25) months from its issuance or in the
year 1991. Further, these certificates should be accompanied by a
Confirmation of Participation which provides for the details of each
participant would have. Upon the merger of FEB TC and BPI sometime in
·the year 2000, there were no outstanding Silver Certificates of Deposit in
its books of accounts; neither did the petitioner present the Confirmation of
Participation which should have been attached to his Custodian
Certificates. 15

Such an argument does not prove that petitioner has already been paid
or that his deposits have already been returned. Likewise, there was no proof
.or evidence that petitioner or his late wife withdrew the said Silver Certificates
of Deposit. When the existence of a debt is fully established by the evidence
contained in the record, the burden of proving that it has been extinguished by
payment devolves upon the debtor who offers such defense to the claim of the
creditor. 16 Even where it is the plaintiff ([petitioner] herein) who alleges non-
payment, the general rule is that the burden rests on the defendant
([respondent] herein) to prove payment, rather than on the plaintiff to prove
non-payment. 17 Verily, an obligation may be extinguished by payment. 18
However, two requisites must concur: (1) identity of the prestation, and (2) its
integr.ity. The first means that the very thing due must be delivered or
released; and the second, that the prestation be fulfilled completely. 19 In tpis
case, no acknowledgment nor proof of full payment was presented by
respondent but merely a pronouncement that there are no longer apy
outstanding Silver Certificates of Deposits in its books of accounts. Thus, the
RTC did not err in.the following findings:

14
Rollo, p. 62.
15
Id. at 107-108.
16
See BP! v. Sps. Royeca, 581 Phil. 188 (2008).
17
See Cham v. Atty. Paita-Moya, 578 Phil. 566 (2008); BPI v. Sps. Royeca, supra.
18
Article 1231 of The Civil Code; CKH Industrial and Dev't. Corp v. Court ofAppeals, 338 Phil. 837,
852 (1997).
19
Alonzo, et al. v. Jaime and Perlita San Juan, 491 Phil. 232, 245 (2005), citing Tolentino,
Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. IV, 1991 Ed., p. 275.

tfY
Decision -8- G.R. No. 212362 ·

A promise had been obtained by plaintiff from defendant bank that

the custodian certificates would be paid upon maturity. Hence, the latter
reneged on its promise when it refused payment thereof after demands
were made by plaintiff for such payment considering that in 1989, his wife
Ma. Lourdes Ong "Bun acquired in their names three (3) certificates of
deposits from FEBTC in various amounts, to wit: (a) Custodian Certificate
of Silver Certificate of Deposit No. 131157 issued on June 9, 1989 in the
amount of One Hundred Thousand Pesos (Pl00,000.00), (Exhibit "A");
(b) Custodian Certificate of Silver Certificate of Deposit No. 131200
issued on July 25, 1989 in the amount of Five Hundred Thousand Pesos
(P500,000.00) (Exhibit "B"); (c) Custodian Certificate of Silver Certificate
of Deposit No. 224826 issued on November 8, 1989 in the amount of One
Hundred Fifty Thousand Pesos (Pl 50,000.00), (Exhibit "C"). His wife
kept these certificates of deposits. The claim of defendant bank, through
·the Manager of its Trust Department Asset Management, that the
aforementioned certificates had been paid, is not supported by credible
evidence and, therefore, unsubstantiated. Its position that the Silver
Certificates of Time Deposits in question and in the names of Jose Ong
Bun or Ma. Lourdes Ong had been paid by the Far East Bank and Trust
Company as early as the year 1991, when the same matured considering
that at the time of the merger between Far East Bank and Trust Company
and the Bank of Philippine Islands, no such Silver Certificates of Time
Deposits were outstanding on the books of Far East Bank and Trust
Company, is simply unconvincing.

The fact that the plaintiff still has [a] copy of the Custodian
Certificate of the Silver Certificates of Time Deposit is material, contrary
to the stance of defendant, as it is inconceivable that the bank would make
payment without requiring the surrender thereof. 20

Hence, the conclusion that the Silver. Certificates of Deposit may have
been withdrawn by the petitioner or his wife although they failed to
surrender the custodian certificates is speculative and replete of any proof or
evidence.

The CA further ruled that the surrender of the CCs is not required for
the withdrawal of ~he certificates of deposit themselves or for the payment of
the Silver Certificates of Deposit, hence, even if the holder has in his
possession the said custodian certificates, this does not ipso facto mean that
·he is an unpaid depositor of the bank. Such conclusion is illogical because
the very wordings contained in the CCs would suggest otherwise, thus:

This instrument is transferable only in the books of the Custodian

by the holder, or in the event of transfer, by the transferee or buyer thereof
in person or by a duly authorized attorney-in-fact upon surrender of this
instrument together with an acceptable deed of assignment.

cJ;
20
Rollo, p. 80.
Decision -9- G.R. No. 212362

The Holder hereof or transferee can withdraw at anytime during

office hours his/her Silver Certificate of Deposit herein held in custody.

This instrument shall not be valid unless duly signed by the

authorized signatories of the Bank, and shall cease to have force and effect
upon payment under the terms hereof. 21

Furthermore, the surrender of such certificates would have promoted

the protection of the bank and would have been more in line with the high
standards expected of any banking institution. Banks, their business being
impressed with public interest, are expected to exercise more care and
prudence than private individuals in their dealings. 22 The Court is not
unmindful of the fact that a bank owes great fidelity to the public it deals with,
its operation being essentially imbued with public interest xx x. 23

As to the issues of prescription and laches raised by the respondent in

its Comment, the same were not passed upon by the CA and cannot be raised
before this Court unless an appeal was filed by the same respondent raising
such issues.

The award of moral and exemplary damages, however, must be

deleted for failure of petitioner to show that respondent was in bad faith or
acted in any wanton, fraudulent, reckless, oppressive or malevolent manner
in its dealings with petitioner. "The person claiming moral damages must
prove the existence of bad faith by clear and convincing evidence for the law
always presumes good faith. It is not enough that one merely suffered
sleepless nights, mental anguish, serious anxiety as the result of the
actuations of the other party. Invariably such action must be shown to have
been willfully done in bad faith or with ill motive. "24 Also, in contracts and
quasi-contracts, the Court has the discretion to award exemplary damages if
the defendant acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner. 25 In this case, it appears that respondent had an honest
belief that before its merger with FEBTC, the subject CCs were already paid
and cleared from its books, hence, belying any claim that it acted in any
manner that would warrant the grant of moral and exemplary damages to the
petitioner.

21
Id. at 62.
22
Consolidated Rural Bank, Inc. v. CA, 489 Phil. 320, 337 (2005).
23
Philippine Commercial Industrial Bank v. Cabrera, 494 Phil. 735, 745 (2005).
24 Francisco, et al. v. Ferrer, Jr., 405 Phil. 741, 749(2001 ), citing Ace Haulers Corporation v. Court
ofAppeals, 393 Phil. 220, 230 (2000).
25 Sulpicio Lines, Inc. v. Sesante, G.R. No. 172682, July 27, 2016, 798 SCRA 459, 485, citing Article
2232, Civil Code. ~
Decision - 10 - G.R. No. 212362

The award of attorney's fees must also be omitted. We have

consistently held that an award of attorney's fees under Article 2208 26
demands factual, legal, and equitable justification to avoid speculation and
conjecture surrounding the grant thereof. 27 Due to the special nature of the
award of attorney's fees, a rigid standard is imposed on the courts before these
fees could be granted. Hence, it is imperative that they clearly and distinctly
set forth in their decisions the basis for the award thereof. It is not enough
that they merely state the amount of the grant in the dispositive portion of their
decisions. 28 It bears reiteration that the award of attorney's fees is an
exception rather than the general rule; thus, there must be compelling legal
reason to bring the case within the exceptions provided under Article 2208 of
the Civil Code to justify the award. 29 In this case, the RTC merely justified
the grant of attorney's fees on the reasoning that petitioner was forced to
litigate. Thus, the present case does not fall within the exception provided
under Article 2208 of the Civil Code.

WHEREFORE, the Petition for Review on Certiorari under Rule 45

of the Rules of Court, dated May 22, 2014, of petitioner Jose T. Ong Bun, is
GRANTED. Consequently, the Decision dated September 25, 2012 and
Resolution dated March 19, 2014 of the Court of Appeals in CA-G.R. CV No.
02715 are REVERSED and SET ASIDE, and the Decision dated June
5, 2008 of the Regional Trial Court, Branch 33, Iloilo City is AFFIRMED
and REINSTATED, with the MODIFICATION that the award of moral
damages, exemplary damages and attorney's fees be OMITTED.

26
Art. 2208. In the absence of stipulation, attorney's fees and expenses oflitigation, other than judicial
costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the
plaintiffs plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(I 0) When at least double judicial costs are awarded; and
(11) In any other case where the court deems it just and equitable that attorney's fees and
expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
27
Philippine National Construction Corporation v. APAC Marketing Corporation, 710 Phil. 389, 396
(2013), citing Delos Santos v. Papa, 605 Phil. 460, 473 (2009).
28
Philippine National Bank v. Court of Appeals, 443 Phil. 351, 368 (2003), citing Pimentel v. C;tlort
ofAppeals, 366 Phil. 494, 502 (1999).
29
Espino v. Spouses Bulut, 664 Phil. 702, 711 (2011 ).
Decision - 11 - G.R. No. 212362

SO ORDERED.

.PERALTA

WE CONCUR:

Wz:1
Acting Chief Justice
Chairperson

A£!. ilt._M/
ESTELA MJ PERLAS-BERNABE
Associate Justice

u
ANDRE
Asso !J REYES, JR.
te Justice .

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that

the conclusions in the -above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court's Division.

ANTONIO T. CA
Acting Chief Justice