FIRST DIVISION
[G.R. No. 116181. April 17, 1996.]
PHILIPPINE NATIONAL BANK, Petitioner, v. COURT OF APPEALS and CARMELO H. FLORES, Respondents.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; DOCUMENTARY EVIDENCE; RECEIPT; ADMISSIBILITY. — A "receipt" is defined as: A written and signed acknowledgment that money has been paid or goods have been delivered. A receipt is merely presumptive evidence and is not conclusive. A written acknowledgment that money or a thing of value has been received. Since a receipt is a mere acknowledgement of payment, it may, be subject to explanation or contradiction. A receipt may be used as evidence against one just as any other declaration or admission. A simple receipt not under seal is presumptive evidence only and may be rebutted or explained by other evidence of mistake in giving it, or of non-payment or of the circumstances under which it was given.
2. ID.; ID.; ID.; ID.; AFFORDS THE BEST PROOF OF PAYMENT. — Although a receipt is not conclusive evidence, in the case at bench, an exhaustive review of the records fails to disclose any other evidence sufficient and strong enough to overturn the acknowledgment embodied in petitioner’s own receipt (as to the amount of money it actually received). Petitioner contends that it offered in court evidence of the particulars or the actual denominations of the money it received from Flores in exchange for its managerial checks. However, aside from the self-serving testimonies of petitioner’s witnesses, we fail to discover any such evidence in the records. In the words of the trial court: After having thoroughly evaluated the evidences (sic) on record, the Court finds and so believes that plaintiff indeed paid defendant the amount of P1,000,040.00 when he purchased the two (2) manager’s checks woth (sic) P1,000,000.00. This is clearly manifested from the receipt issued by the defendant wherein it explicitly admits that the amount stated therein is what plaintiff actually paid. While the defendant does not dispute the receipt it issued to the plaintiff, it endeavored to prove that the actual amount involved in the entire transaction is only P900,000.00 that is P450,000.00 manager’s check and P450,000.00 cash by submitting in evidence, the application forms filled up by the plaintiff, Exhibits "1, 2, 3 and 4." As may be readily seen these application forms relied upon by the defendant have no probative value for they do not yield any direct proof of payment. Besides defendant even failed to adduce concrete evidence showing that these forms which were crumpled and retrieved from the waste basket were made the basis of the approval of the purchased (sic) made. At any rate, the Court finds such pieces of evidence not only unconvincing but also self-defeating in the light of the receipt, the accuracy, correctness and due execution of which was indubitably established. It is a cardinal rule in the law on evidence that the best proof of payment is the receipt.
3. CIVIL LAW; DAMAGES; NEGLIGENCE; ISSUANCE THEREOF CREATES A FIDUCIARY RELATIONSHIP BETWEEN THE BANK AND THE PURCHASER OF THE CHECK AND THEREFORE ANY BREACH THEREOF MUST BE BORNE BY THE NEGLIGENT PARTY. — Since there is no doubt as to the fact that the plaintiff purchased from the defendant bank two (2) manager’s check worth P500,000.00 each as this was evidenced by an official receipt, then, following the above jurisprudential ruling, the existence of the manager’s check (sic) created as (sic) fiduciary relationship between the defendant bank and the plaintiff and therefore any breach thereof must be borne by the negligent party. In this case, the money counter who, among her other duties, is in charge of counting the money received from a client purchasing a manager’s check did not perform her duty with diligence and due care. This may be gathered from her testimony that she did not wait for the counting machine to finish counting the money for the plaintiff is a VIP client and he was in a hurry as he was tapping the window. Equally negligent is Reynaldo Castor for not doing anything when he noticed that their money counters who entertained the plaintiff were rattled. From these unfolded facts, the so-called honest mistake pleaded is therefore misplaced and perforced, defendant must suffer the consequences of its own negligent acts.
4. ID.; ID.; MORAL DAMAGES; GRANTED WHERE THE PLAINTIFF’S INTEGRITY AS A BUSINESSMAN WAS TARNISHED DUE TO DEFENDANTS BAD FAITH. — Appellee Flores narrated his woes to the lower court when appellant bank refused to honor his Manager’s Checks worth P1 Million because of the alleged shortage in appellee’s payment to the effect that he had to go back and forth the bank to encash said checks, and that he lost a deal of (sic) a house for sale in Baguio City worth P1 Million as he could not produce said amount withheld by the appellant bank. Appellee Flores further testified as to the effect of the incident on his integrity as a businessman. In the case of Makabali v. C. A., 157 SCRA 253, the Supreme Court reiterated the doctrine on the grant of moral and exemplary damages, as follows: "To begin with, there is no hard and fast rule in the determination of what would be a fair amount of moral damages, since each case must be governed by its own peculiar circumstances." Article 2217 of the Civil Code recognizes that moral damages which include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury, are incapable of pecuniary estimation.
5. ID.; ID.; ID.; MUST BE COMMENSURATE WITH THE LOSS OR INJURY SUFFERED. — Second, the award of moral damages in the amount of P1,000,000.00 is obviously not proportionate to the actual losses of P100,000.00 sustained by Flores. In RCPI v. Rodriguez (182 SCRA 899 [1990]) we ruled thus: x x x. Nevertheless, we find the award of P100,000.00 as moral damages in favor of respondent Rodriguez excessive and unconscionable. In the case of Prudenciado v. Alliance Transport System, Inc. (148 SCRA 440 [1987]) we said: "x x x [I]t is undisputed that the trial courts are given discretion to determine the amount of moral damages (Alcantara v. Surro, 93 Phil. 472) and that the Court of Appeals can only modify or change the amount awarded when they are palpably and scandalously excessive ‘so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court’ (Gellada v. Warner Barnes & Co., Inc., 57 O.G. [4] 7347, 7358; and other cases cited). But in more recent cases where the awards of moral and exemplary damages are far too excessive compared to the actual losses sustained by the aggrieved party, this Court ruled that they should be reduced to more reasonable amounts. x x x." In other words, the moral damages awarded must be commensurate with the loss or injury suffered.
6. ID.; ID.; EXEMPLARY DAMAGES; GRANTED ONLY IF THE PLAINTIFF CAN PROVE THAT HE IS ENTITLED TO MORAL, TEMPERATE OR COMPENSATORY DAMAGES. — As to exemplary damages, Article 2229 of the Civil Code provides that such damages may be imposed by way of example or correction for the public good. While exemplary damages cannot be recovered as a matter of right, they need not be proved, although plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded.
7. ID.; ID.; ATTORNEY’S FEES; GRANTED IF PLAINTIFF IS COMPELLED TO LITIGATE DUE TO DEFENDANT’S NON-COMPLIANCE WITH HIS OBLIGATION. — We see no reason to disturb the award of attorney’s fees in the amount of P50,000.00. We concur with the findings of the Court of Appeals on this matter: As for the award of attorney’s fees, We find the same in order considering that "defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim" (Art. 2208 [5], New Civil Code), and it is just and equitable to award plaintiff-appellee his attorney’s fees (Art. 2208 [11], id.). Since plaintiff was compelled to litigate to protect its interest due to the non-compliance of defendant’s obligation, he is therefore entitled to attorney’s fees (pars. 5, Article 2208, Civil Code of the Philippines).
2. ID.; ID.; ID.; ID.; AFFORDS THE BEST PROOF OF PAYMENT. — Although a receipt is not conclusive evidence, in the case at bench, an exhaustive review of the records fails to disclose any other evidence sufficient and strong enough to overturn the acknowledgment embodied in petitioner’s own receipt (as to the amount of money it actually received). Petitioner contends that it offered in court evidence of the particulars or the actual denominations of the money it received from Flores in exchange for its managerial checks. However, aside from the self-serving testimonies of petitioner’s witnesses, we fail to discover any such evidence in the records. In the words of the trial court: After having thoroughly evaluated the evidences (sic) on record, the Court finds and so believes that plaintiff indeed paid defendant the amount of P1,000,040.00 when he purchased the two (2) manager’s checks woth (sic) P1,000,000.00. This is clearly manifested from the receipt issued by the defendant wherein it explicitly admits that the amount stated therein is what plaintiff actually paid. While the defendant does not dispute the receipt it issued to the plaintiff, it endeavored to prove that the actual amount involved in the entire transaction is only P900,000.00 that is P450,000.00 manager’s check and P450,000.00 cash by submitting in evidence, the application forms filled up by the plaintiff, Exhibits "1, 2, 3 and 4." As may be readily seen these application forms relied upon by the defendant have no probative value for they do not yield any direct proof of payment. Besides defendant even failed to adduce concrete evidence showing that these forms which were crumpled and retrieved from the waste basket were made the basis of the approval of the purchased (sic) made. At any rate, the Court finds such pieces of evidence not only unconvincing but also self-defeating in the light of the receipt, the accuracy, correctness and due execution of which was indubitably established. It is a cardinal rule in the law on evidence that the best proof of payment is the receipt.
3. CIVIL LAW; DAMAGES; NEGLIGENCE; ISSUANCE THEREOF CREATES A FIDUCIARY RELATIONSHIP BETWEEN THE BANK AND THE PURCHASER OF THE CHECK AND THEREFORE ANY BREACH THEREOF MUST BE BORNE BY THE NEGLIGENT PARTY. — Since there is no doubt as to the fact that the plaintiff purchased from the defendant bank two (2) manager’s check worth P500,000.00 each as this was evidenced by an official receipt, then, following the above jurisprudential ruling, the existence of the manager’s check (sic) created as (sic) fiduciary relationship between the defendant bank and the plaintiff and therefore any breach thereof must be borne by the negligent party. In this case, the money counter who, among her other duties, is in charge of counting the money received from a client purchasing a manager’s check did not perform her duty with diligence and due care. This may be gathered from her testimony that she did not wait for the counting machine to finish counting the money for the plaintiff is a VIP client and he was in a hurry as he was tapping the window. Equally negligent is Reynaldo Castor for not doing anything when he noticed that their money counters who entertained the plaintiff were rattled. From these unfolded facts, the so-called honest mistake pleaded is therefore misplaced and perforced, defendant must suffer the consequences of its own negligent acts.
4. ID.; ID.; MORAL DAMAGES; GRANTED WHERE THE PLAINTIFF’S INTEGRITY AS A BUSINESSMAN WAS TARNISHED DUE TO DEFENDANTS BAD FAITH. — Appellee Flores narrated his woes to the lower court when appellant bank refused to honor his Manager’s Checks worth P1 Million because of the alleged shortage in appellee’s payment to the effect that he had to go back and forth the bank to encash said checks, and that he lost a deal of (sic) a house for sale in Baguio City worth P1 Million as he could not produce said amount withheld by the appellant bank. Appellee Flores further testified as to the effect of the incident on his integrity as a businessman. In the case of Makabali v. C. A., 157 SCRA 253, the Supreme Court reiterated the doctrine on the grant of moral and exemplary damages, as follows: "To begin with, there is no hard and fast rule in the determination of what would be a fair amount of moral damages, since each case must be governed by its own peculiar circumstances." Article 2217 of the Civil Code recognizes that moral damages which include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury, are incapable of pecuniary estimation.
5. ID.; ID.; ID.; MUST BE COMMENSURATE WITH THE LOSS OR INJURY SUFFERED. — Second, the award of moral damages in the amount of P1,000,000.00 is obviously not proportionate to the actual losses of P100,000.00 sustained by Flores. In RCPI v. Rodriguez (182 SCRA 899 [1990]) we ruled thus: x x x. Nevertheless, we find the award of P100,000.00 as moral damages in favor of respondent Rodriguez excessive and unconscionable. In the case of Prudenciado v. Alliance Transport System, Inc. (148 SCRA 440 [1987]) we said: "x x x [I]t is undisputed that the trial courts are given discretion to determine the amount of moral damages (Alcantara v. Surro, 93 Phil. 472) and that the Court of Appeals can only modify or change the amount awarded when they are palpably and scandalously excessive ‘so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court’ (Gellada v. Warner Barnes & Co., Inc., 57 O.G. [4] 7347, 7358; and other cases cited). But in more recent cases where the awards of moral and exemplary damages are far too excessive compared to the actual losses sustained by the aggrieved party, this Court ruled that they should be reduced to more reasonable amounts. x x x." In other words, the moral damages awarded must be commensurate with the loss or injury suffered.
6. ID.; ID.; EXEMPLARY DAMAGES; GRANTED ONLY IF THE PLAINTIFF CAN PROVE THAT HE IS ENTITLED TO MORAL, TEMPERATE OR COMPENSATORY DAMAGES. — As to exemplary damages, Article 2229 of the Civil Code provides that such damages may be imposed by way of example or correction for the public good. While exemplary damages cannot be recovered as a matter of right, they need not be proved, although plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded.
7. ID.; ID.; ATTORNEY’S FEES; GRANTED IF PLAINTIFF IS COMPELLED TO LITIGATE DUE TO DEFENDANT’S NON-COMPLIANCE WITH HIS OBLIGATION. — We see no reason to disturb the award of attorney’s fees in the amount of P50,000.00. We concur with the findings of the Court of Appeals on this matter: As for the award of attorney’s fees, We find the same in order considering that "defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim" (Art. 2208 [5], New Civil Code), and it is just and equitable to award plaintiff-appellee his attorney’s fees (Art. 2208 [11], id.). Since plaintiff was compelled to litigate to protect its interest due to the non-compliance of defendant’s obligation, he is therefore entitled to attorney’s fees (pars. 5, Article 2208, Civil Code of the Philippines).
D E C I S I O N
KAPUNAN, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court assailing the decision and resolution of the respondent Court of Appeals in CA-G.R. CV No. 38281 dated 31 January 1994 and 5 July 1994, respectively, which affirmed the decision of the Regional Trial Court in Civil Case No. Q-89-4033 declaring Philippine National Bank liable to Carmelo H. Flores for damages.
The facts of the case are as follows:chanrob1es virtual 1aw library
On 11 July 1989, private respondent Carmelo H. Flores (Flores) purchased from petitioner at its Manila Pavilion Hotel unit, two (2) manager’s checks worth P500,000.00 each, paying a total of P1,000,040.00, including the service charge. 1 A receipt for said amount was issued by the petitioner: 2
On 12 July 1989, Flores presented these checks at the Baguio Hyatt Casino unit of petitioner. Petitioner refused to encash the checks but after a lengthy discussion, it agreed to encash one (1) of the checks. 3 However, it deferred the payment of the other check until after Flores agreed that it be broken down to five (5) manager’s checks of P100,000.00 each. Furthermore, petitioner refused to encash one of the five checks until after it is cleared by the Manila Pavilion Hotel unit. 4 Having no other option, Flores agreed to such an arrangement. However, upon his return to Manila, he made representations to petitioner through its Malate Branch so that the check may be encashed but to no avail. 5 Flores, thereafter, wrote a letter to his counsel informing the latter of the aforementioned events. 6 A Formal Demand was made by private respondent’s counsel but petitioner persisted in its refusal to honor the check. 7
Left with no other choice, Flores filed a case with the Regional Trial Court of Quezon City, Branch 100, docketed as Civil Case No. Q-89-4033. 8
In its Answer with Compulsory Counterclaim, petitioner insisted that only P900,000.00 and P40.00 bank charges were actually paid by Flores when he purchased the two (2) manager’s checks worth P1,000,000.00. It alleged that due to Flores’ "demanding attitude and temper," petitioner’s money counter, Rowena Montes, who, at that time was still new at her job, made an error in good faith in issuing the receipt for P1,000,040.00. 9 The actuation’s of Flores allegedly distracted the personnel manning the unit. 10
After trial, the court rendered its decision on 5 May 1992, the dispositive portion of which states:chanrob1es virtual 1aw library
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant Philippine National Bank as follows:chanrob1es virtual 1aw library
a.) ordering the defendant to pay plaintiff the sum of P100,000.00 representing the amount of the check dishonored with interest thereon at the legal rate per annum from November 16, 1989 until fully paid;
b.) ordering defendant to pay plaintiff for the embarrassment caused him the amount of P1,000,000.00 as moral damages;
c.) ordering defendant to pay plaintiff the amount of P1,000,000.00 as exemplary damages brought about by the malevolent and malicious acts of the former;
d.) ordering defendant to pay plaintiff the sum of P50,000.00 as attorney’s fees; and
e.) ordering defendant to pay the costs of the suit.
SO ORDERED. 11
Petitioner interposed an appeal with the respondent court, docketed as CA-G.R. CV No. 38281 assigning the following errors, to wit:chanrob1es virtual 1aw library
THE TRIAL COURT ERRED IN HOLDING ON THE BASIS OF THE RECEIPT MARKED EXH. "A" THAT IN PURCHASING THE TWO MANAGER’S CHECKS ON JULY 11, 1989, APPELLEE FLORES PAID PNB P1,000,000.40 DESPITE (1) THAT THE SAID RECEIPT DOES NOT SHOW, OR AFFORD THE BEST PROOF OF THE CORRECT AMOUNT PAID BY FLORES TO PNB AND (2) THAT AS SHOWN BY PREPONDERANT AND CONCLUSIVE EVIDENCE, APPELLEE PAID PNB P900,040 ONLY IN ONE MANAGER’S CHECK AND MONETARY BILLS.
THE TRIAL COURT ERRED IN AWARDING FLORES P1 MILLION MORAL DAMAGES, P1 MILLION EXEMPLARY DAMAGES, AND P500,000 (sic) ATTORNEY’S FEES DESPITE (1) THAT PNB’S REFUSAL TO ENCASH THE P100,000 MANAGER’S CHECK (EXH. "B") WAS JUSTIFIED, AS FLORES WAS NEVER ENTITLED TO THE MONEY; (2) THAT THERE IS ABJECT ABSENCE OF EVIDENCE THAT PNB ACTED FRAUDULENTLY OR MALICIOUSLY, EVEN AS GOOD FAITH IS PRESUMED; AND (3) THAT FLORES’ ALLEGED EMBARRASSMENT FOR HIS FAILURE TO PURCHASE A HOUSE AND LOT DUE TO PNB’S REFUSAL TO ENCASH THE WHOLE P1 MILLION IS UNFOUNDED. 12
On 31 January 1994, the Court of Appeals rendered the questioned decision, the dispositive portion of which reads:chanrob1es virtual 1aw library
WHEREFORE, the appealed decision of the lower court in Civil Case No. Q-89-4033 is hereby AFFIRMED by the Court.
Costs against defendant-appellant.
SO ORDERED. 13
A motion for reconsideration was filed but it was likewise denied in a resolution dated 5 July 1994, 14 thus, the present action with petitioner raising the following issues, to wit:chanrob1es virtual 1aw library
WHETHER OR NOT THE CA ERRED IN LAW IN HOLDING THAT, THE BEST EVIDENCE TO SHOW WHETHER MR. FLORES PAID THE PNB CASINO UNIT P900,040 OR P1,000,040 IN PURCHASING THE TWO MANAGER’S CHECKS EACH WORTH P500,000 IS THE RECEIPT FOR P1 .000.040.
WHETHER OR NOT PNB CAN PRESENT COMPETENT AND RELEVANT EVIDENCE TO SUPPORT ITS ALLEGATION IN THE ANSWER THAT MR. FLORES ACTUALLY PAID P900,040 AND NOT P1,000,040 FOR THE SUBJECT MANAGER’S CHECKS.
WHETHER OR NOT THE AWARD FOR P1 MILLION MORAL DAMAGES, P1 MILLION EXEMPLARY DAMAGES, AND P50,000 ATTORNEY’S FEES, AS COMPARED TO THE ACTUAL CLAIM OF P100,000 IS DISPROPORTIONATE AND UNCONSCIONABLE. 15
We shall deal with the first and second issues raised by petitioner together as they are interrelated.
Petitioner concedes that it issued the subject receipt for P1,000,040.00 to Flores; yet, in the same breath, it immediately counters that said receipt is not the best evidence to prove how much money Flores actually paid for the purchase of petitioner’s manager’s checks.
Further, petitioner insists that the issue in the instant case is not the contents of the subject receipt but the exact amount of money Flores paid to PNB, an inquiry which, petitioner avers, allows the presentation of evidence aliunde.
Petitioners contentions are unmeritorious.
A "receipt" is defined as:chanrob1es virtual 1aw library
A written and signed acknowledgment that money has been paid or goods have been delivered. A receipt is merely Presumptive evidence and is not conclusive.
A written acknowledgment that money or a thing of value has been received. Since a receipt is a mere acknowledgement of Payment. it may be subject to explanation or contradiction. A receipt may be used as evidence against one just as any other declaration or admission. A simple receipt not under seal is presumptive evidence only and may be rebutted or explained by other evidence of mistake in giving it, or of non-payment or of the circumstances under which it was given. 16 (Emphasis ours.)
Although a receipt is not conclusive evidence, in the case at bench, an exhaustive review of the records fails to disclose any other evidence sufficient and strong enough to overturn the acknowledgment embodied in petitioner’s own receipt (as to the amount of money it actually received).
Petitioner contends that it offered in court evidence of the particulars or the actual denominations of the money it received from Flores in exchange for its managerial checks. However, aside from the self-serving testimonies of petitioner’s witnesses, we fail to discover any such evidence in the records. In the words of the trial court:chanrob1es virtual 1aw library
After having thoroughly evaluated the evidences (sic) on record, the Court finds and so believes that plaintiff indeed paid defendant the amount of P1,000,040.00 when he purchased the two (2) manager’s checks worth (sic) P1,000,000.00. This is clearly manifested from the receipt issued by the defendant wherein it explicitly admits that the amount stated therein is what plaintiff actually paid. While the defendant does not dispute the receipt it issued to the plaintiff. it endeavored to prove that the actual amount involved in the entire transaction is only P900.000.00 that is P450,000.00 manager’s check and P450.000.00 cash by submitting in evidence. the application forms filled up by the plaintiff. Exhibits "1. 2, 3 and 4." As may be readily seen these application forms relied upon by the defendant have no probative value for they do not yield and direct Proof of Payment. Besides defendant even failed to adduce concrete evidence showing that these forms which were crumpled and retrieved from the waste basket were made the basis of the approval of the purchased (sic) made. At any rate, the Court finds such pieces of evidence not only unconvincing but also self-defeating in the light of the receipt, the accuracy, correctness and due execution of which was indubitably established. It is a cardinal rule in the law on evidence that the best proof of payment is the receipt. 17 (Emphasis ours.)
In Monfort v. Aguinaldo, 18 the receipts of payment, although not exclusive, were deemed to be the best evidence. Thus:chanrob1es virtual 1aw library
That the best evidence for proving payment is by the evidence of receipts showing the same is also admitted. What respondents claim is that there is no rule which provides that payment can only be proved by receipts. While receipts are deemed to be the best evidence, they are not exclusive. Other evidence may be presented in lieu thereof if they are not available, as in case of loss, destruction or disappearance. The fact of payment may be established not only by documentary evidence, but also by parol evidence (48 C.J. 727; Greenleaf, Law of Evidence, Vol. II, p. 486; Jones on Evidence [1913] Vol. II, p. 193), specially in civil cases where preponderance of evidence is the rule. Here respondents presented documentary as well as oral evidence which the Court of Appeals found to be sufficient, and this finding is final.
In the instant case, petitioner’s contention that Flores paid P900,000.00 only instead of P1,000,000.00 (exclusive of bank charges) in the following denominations: a managers check worth P450,000.00; P430,000.00 in P100.00 bills; and P20,000.00 in P500.00 bills, was based solely on the testimonies of petitioner’s bank employees--the very ones involved in the fiasco, 19 and not on any other independent evidence. Hence, having failed to adduce sufficient rebuttal evidence, petitioner is bound by the contents of the receipt it issued to Flores. The subject receipt remains to be the primary or best evidence or "that which affords the greatest certainty of the fact in question." 20
On the issue of damages, we concur with the findings of the trial court and the Court of Appeals, respectively:chanrob1es virtual 1aw library
Since there is no doubt as to the fact that the plaintiff purchased from the defendant bank two (2) manager’s check worth P500,000.00 each as this was evidenced by an official receipt (Exhibit "A"), then, following the above jurisprudential ruling, the existence of the manager’s check (sic) created as (sic) fiduciary relationship between the defendant bank and the plaintiff and therefore any breach thereof must be borne by the negligent party. In this case, the money counter who, among her other duties, is in charge of counting the money received from a client purchasing a manager’s check did not perform her duty with diligence and due care. This may be gathered from her testimony that she did not wait for the counting machine to finish counting the money for the plaintiff is a VIP client and he was in a hurry as he was tapping the window (p. 37, T.S.N., August 28, 1990). Equally negligent is Reynaldo Castor for not doing anything when he noticed that their money counters who entertained the plaintiff were rattled. From these unfolded facts, the so-called honest mistake pleaded is therefore misplaced and perforced, defendant must suffer the consequences of its own negligent acts.
The records further show that plaintiff is a prominent businessman, licensed and engaged in the real estate business, buying and selling houses and lots under the business name and style CMS Commercial. He is at the same time a consultant of Dizon-Esguerra Real Estate Company. Defendant treated him as a valued and VIP client. Because of the bank’s refusal to encash the entire one million face amount of his manager’s checks, he was so embarrassed for he was not able to purchase a house and lot in Monterroza Subdivision, Baguio City. Significantly, the foregoing undisputed facts made even more untenable defendant’s implicit supposition that the subject manager’s checks were not intended for the purchase of a house or for any business transaction but for gambling.
Finally. since plaintiff was compelled to litigate to protect its interest due to the non-compliance of defendant’s obligation, he is therefore entitled to attorney’s fees (pars. 5, article 2208, Civil Code of the Philippines). 21
Appellee Flores narrated his woes to the lower court when appellant bank refused to honor his Manager’s Checks worth P1 Million because of the alleged shortage in appellee’s payment to the effect that he had to go back and forth the bank to encash said checks (pp. 16-18, t.s.n., July 2, 1990), and that he lost a deal of (sic) a house for sale in Baguio City worth P1 Million as he could not produce said amount withheld by the appellant bank (p. 22, id.). Appellee Flores further testified as to the effect of the incident on his integrity as a businessman as follows:jgc:chanrobles.com.ph
"Yes, my integrity and dependability as a businessman is highly doubted in Baguio because of the PNB refusal to honor the two (2) manager’s checks inspite of them issuing me the receipt. So, whenever I make a deal in house and they would now even doubt whether I have the money to buy the house that I am buying, it greatly affected my integrity as a businessman in Baguio. (p. 25, t.s.n., Id.)
In the case of Makabali v. C. A., 157 SCRA 253, the Supreme Court reiterated the doctrine on the grant of moral and exemplary damages, as follows:jgc:chanrobles.com.ph
"To begin with, there is no hard and fast rule in the determination of what would be a fair amount of moral damages, since each case must be governed by its own peculiar circumstances.
"Article 2217 of the Civil Code recognizes that moral damages which include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury, are incapable of pecuniary estimation.
"As to exemplary damages, Article 2229 of the Civil Code provides that such damages may be imposed by way of example or correction for the public good. While exemplary damages cannot be recovered as a matter of right, they need not be proved, although plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. 22
However, we give consideration to petitioner’s allegation that the award of P1,000,000.00 moral damages and P1,000,000.00 exemplary damages in addition to Flores’ actual claim of P100,000.00 is "inordinately disproportionate and unconscionable. 23
Under the circumstances obtaining in the case at bench, we rule that the award of moral and exemplary damages is patently excessive and should be reduced to a reasonable amount. We take into consideration the following factors:chanrob1es virtual 1aw library
First, Flores’ contention that he lost the opportunity to purchase a house and lot in Baguio City due to petitioner’s gross negligence is based solely on his own testimony and a mere general statement at that. The broker he named during his cross-examination on 10 July 1990, a Mr. Nick Buendia was not even presented to confirm the aforementioned allegation:chanrob1es virtual 1aw library
Q. You also stated that this amount was intended for the purchase of the real estate property in Baguio, is that right?
A. Yes.
Q. Can you tell this Honorable Court where is this specific property located in Baguio?
A. It is located in Monterosa Subdivision.
Q. Can you tell us the number of the street?
A. It is within the Menterosa.
Q. Can you identify the name of the person with whom you transacted?
A. Your Honor, I have the papers and during the next hearing I will bring it.
ATTY. D. VALDEZ:chanrob1es virtual 1aw library
Is that meant, Your Honor that we are continuing the cross examination on the next hearing considering that he will show a certain document
Q. Can you not reveal to us the name of the person with whom you transacted?
A. As I have said I could not be guessing because it was coursed through another broker.
And, this broker usually did not tell you who is the owner.
Q. What I am asking you is the person whom you transacted and not necessarily the owner? We are supposed to know, Your Honor.
COURT:chanrob1es virtual 1aw library
The name of the broken
A. The name of the broker, Your Honor is Nick Buendia.
Q. Do you know what subsequently happened if there was anything happened to that property that was being sold?
A. It was sold.
Q. To someone else?
A. Yes.
Q. At the time you were purchasing the manager’s checks for one (1 M) million you intended this as a payment for the property?
A. Yes. 24
Second, the award of moral damages in the amount of P1,000,000.00 is obviously not proportionate to the actual losses of P100,000.00 sustained by Flores. In RCPI v. Rodriguez, 25 we ruled thus:chanrob1es virtual 1aw library
. . . Nevertheless, we find the award of P100,000.00 as moral damages in favor of respondent Rodriguez excessive and unconscionable. In the case of Prudenciado v. Alliance Transport System, Inc. (148 SCRA 440 [1987]) we said: ". . . [I]t is undisputed that the trial courts are given discretion to determine the amount of moral damages (Alcantara v. Surro, 93 Phil. 472) and that the Court of Appeals can only modify or change the amount awarded when they are palpably and scandalously excessive ‘so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court (Gellada v. Warner Barnes & Co., Inc., 57 O.G. [4] 7347, 7358; Sadie v. Bachrach Motors Co., Inc., 57 O.G. [4] 636 and Adone v. Bachrach Motor Co., Inc., 57 O.G. 656). But in more recent cases where the awards of moral and exemplary damages are far too excessive compared to the actual losses sustained by the aggrieved Party, this Court ruled that they should be reduced to more reasonable amounts. . . . (Emphasis ours.)
In other words, the moral damages awarded must be commensurate with the loss or injury suffered.
Similarly, we have consistently declared that:chanrob1es virtual 1aw library
Moral damages though incapable of pecuniary estimations, are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer (San Andres v. Court of Appeals, 1 16 SCRA 85 [1982] cited in Prudenciado v. Alliance Transport System, Inc. supra). 26
We, likewise, take this opportunity to stress that:chanrob1es virtual 1aw library
... [M]oral damages are emphatically not intended to enrich a complainant at the expense of the defendant. They are awarded only to enable the injured party to obtain means, diversion or amusements that will serve to obviate the moral suffering he has undergone, by reason of the defendant’s culpable action. Its award is aimed at the restoration, within the limits of the possible, of the spiritual status quo ante, and it must be proportional to the suffering inflicted. 27 (Emphasis ours.)
It is because of the foregoing reasons that we have had to constantly remind the courts to desist from awarding excessive damages disproportionate to the peculiar circumstances of the case. "Judicial discretion granted to the courts in the assessment of damages must always be exercised with balanced restraint and measured objectivity." 28
Finally, we find petitioner’s act of issuing the manager’s checks and corresponding receipt before payment thereof was completely counted reckless and grossly negligent. It is an appalling breach of bank procedures and must never be repeated.
In Bautista v. Mangaldan Rural Bank, Inc., 29 we stated, thus:chanrob1es virtual 1aw library
The banking system has become an indispensable institution in the modern world and plays a vital role in the economic life of every civilized society. Whether as mere passive entities for the safe-keeping and saving of money or as active instruments of business and commerce, banks have attained an unbiquitous presence among the people, who have come to regard them with respect and even gratitude and, most of all, confidence. (Simex International [Manila], Inc. v. Court of Appeals, G.R. No. 88013, March 19, 1990, 183 SCRA 360).
However, the award of P1,000,000.00 exemplary damages is also far too excessive and should likewise be reduced to an equitable level. Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. 30
Therefore, based on the foregoing discussion, the award of moral damages is reduced to P100,000.00 and the exemplary damages is likewise reduced to P25,000.00.
We see no reason to disturb the award of attorney’s fees in the amount of P50,000.00. We concur with the findings of the Court of Appeals on this matter:chanrob1es virtual 1aw library
As for the award of attorney’s fees, We find the same in order considering that "defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim" (Art. 2208 [5], New Civil Code), and it is just and equitable to award plaintiff-appellee his attorney’s fees (Art. 2208 [11], id.). 31
WHEREFORE, premises considered, the assailed decision is hereby MODIFIED as follows:chanrob1es virtual 1aw library
1. The award of moral damages is reduced from P1,000,000.00 to P100,000.00; and
2. The award of exemplary damages is reduced from P1,000,000.00 to P25,000.00.
In all other respects, the assailed decision is hereby AFFIRMED.
SO ORDERED.
Padilla, Bellosillo, Vitug and Hermosisima, Jr., JJ., concur.
The facts of the case are as follows:chanrob1es virtual 1aw library
On 11 July 1989, private respondent Carmelo H. Flores (Flores) purchased from petitioner at its Manila Pavilion Hotel unit, two (2) manager’s checks worth P500,000.00 each, paying a total of P1,000,040.00, including the service charge. 1 A receipt for said amount was issued by the petitioner: 2
On 12 July 1989, Flores presented these checks at the Baguio Hyatt Casino unit of petitioner. Petitioner refused to encash the checks but after a lengthy discussion, it agreed to encash one (1) of the checks. 3 However, it deferred the payment of the other check until after Flores agreed that it be broken down to five (5) manager’s checks of P100,000.00 each. Furthermore, petitioner refused to encash one of the five checks until after it is cleared by the Manila Pavilion Hotel unit. 4 Having no other option, Flores agreed to such an arrangement. However, upon his return to Manila, he made representations to petitioner through its Malate Branch so that the check may be encashed but to no avail. 5 Flores, thereafter, wrote a letter to his counsel informing the latter of the aforementioned events. 6 A Formal Demand was made by private respondent’s counsel but petitioner persisted in its refusal to honor the check. 7
Left with no other choice, Flores filed a case with the Regional Trial Court of Quezon City, Branch 100, docketed as Civil Case No. Q-89-4033. 8
In its Answer with Compulsory Counterclaim, petitioner insisted that only P900,000.00 and P40.00 bank charges were actually paid by Flores when he purchased the two (2) manager’s checks worth P1,000,000.00. It alleged that due to Flores’ "demanding attitude and temper," petitioner’s money counter, Rowena Montes, who, at that time was still new at her job, made an error in good faith in issuing the receipt for P1,000,040.00. 9 The actuation’s of Flores allegedly distracted the personnel manning the unit. 10
After trial, the court rendered its decision on 5 May 1992, the dispositive portion of which states:chanrob1es virtual 1aw library
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant Philippine National Bank as follows:chanrob1es virtual 1aw library
a.) ordering the defendant to pay plaintiff the sum of P100,000.00 representing the amount of the check dishonored with interest thereon at the legal rate per annum from November 16, 1989 until fully paid;
b.) ordering defendant to pay plaintiff for the embarrassment caused him the amount of P1,000,000.00 as moral damages;
c.) ordering defendant to pay plaintiff the amount of P1,000,000.00 as exemplary damages brought about by the malevolent and malicious acts of the former;
d.) ordering defendant to pay plaintiff the sum of P50,000.00 as attorney’s fees; and
e.) ordering defendant to pay the costs of the suit.
SO ORDERED. 11
Petitioner interposed an appeal with the respondent court, docketed as CA-G.R. CV No. 38281 assigning the following errors, to wit:chanrob1es virtual 1aw library
I
THE TRIAL COURT ERRED IN HOLDING ON THE BASIS OF THE RECEIPT MARKED EXH. "A" THAT IN PURCHASING THE TWO MANAGER’S CHECKS ON JULY 11, 1989, APPELLEE FLORES PAID PNB P1,000,000.40 DESPITE (1) THAT THE SAID RECEIPT DOES NOT SHOW, OR AFFORD THE BEST PROOF OF THE CORRECT AMOUNT PAID BY FLORES TO PNB AND (2) THAT AS SHOWN BY PREPONDERANT AND CONCLUSIVE EVIDENCE, APPELLEE PAID PNB P900,040 ONLY IN ONE MANAGER’S CHECK AND MONETARY BILLS.
II
THE TRIAL COURT ERRED IN AWARDING FLORES P1 MILLION MORAL DAMAGES, P1 MILLION EXEMPLARY DAMAGES, AND P500,000 (sic) ATTORNEY’S FEES DESPITE (1) THAT PNB’S REFUSAL TO ENCASH THE P100,000 MANAGER’S CHECK (EXH. "B") WAS JUSTIFIED, AS FLORES WAS NEVER ENTITLED TO THE MONEY; (2) THAT THERE IS ABJECT ABSENCE OF EVIDENCE THAT PNB ACTED FRAUDULENTLY OR MALICIOUSLY, EVEN AS GOOD FAITH IS PRESUMED; AND (3) THAT FLORES’ ALLEGED EMBARRASSMENT FOR HIS FAILURE TO PURCHASE A HOUSE AND LOT DUE TO PNB’S REFUSAL TO ENCASH THE WHOLE P1 MILLION IS UNFOUNDED. 12
On 31 January 1994, the Court of Appeals rendered the questioned decision, the dispositive portion of which reads:chanrob1es virtual 1aw library
WHEREFORE, the appealed decision of the lower court in Civil Case No. Q-89-4033 is hereby AFFIRMED by the Court.
Costs against defendant-appellant.
SO ORDERED. 13
A motion for reconsideration was filed but it was likewise denied in a resolution dated 5 July 1994, 14 thus, the present action with petitioner raising the following issues, to wit:chanrob1es virtual 1aw library
I
WHETHER OR NOT THE CA ERRED IN LAW IN HOLDING THAT, THE BEST EVIDENCE TO SHOW WHETHER MR. FLORES PAID THE PNB CASINO UNIT P900,040 OR P1,000,040 IN PURCHASING THE TWO MANAGER’S CHECKS EACH WORTH P500,000 IS THE RECEIPT FOR P1 .000.040.
II
WHETHER OR NOT PNB CAN PRESENT COMPETENT AND RELEVANT EVIDENCE TO SUPPORT ITS ALLEGATION IN THE ANSWER THAT MR. FLORES ACTUALLY PAID P900,040 AND NOT P1,000,040 FOR THE SUBJECT MANAGER’S CHECKS.
III
WHETHER OR NOT THE AWARD FOR P1 MILLION MORAL DAMAGES, P1 MILLION EXEMPLARY DAMAGES, AND P50,000 ATTORNEY’S FEES, AS COMPARED TO THE ACTUAL CLAIM OF P100,000 IS DISPROPORTIONATE AND UNCONSCIONABLE. 15
We shall deal with the first and second issues raised by petitioner together as they are interrelated.
Petitioner concedes that it issued the subject receipt for P1,000,040.00 to Flores; yet, in the same breath, it immediately counters that said receipt is not the best evidence to prove how much money Flores actually paid for the purchase of petitioner’s manager’s checks.
Further, petitioner insists that the issue in the instant case is not the contents of the subject receipt but the exact amount of money Flores paid to PNB, an inquiry which, petitioner avers, allows the presentation of evidence aliunde.
Petitioners contentions are unmeritorious.
A "receipt" is defined as:chanrob1es virtual 1aw library
A written and signed acknowledgment that money has been paid or goods have been delivered. A receipt is merely Presumptive evidence and is not conclusive.
A written acknowledgment that money or a thing of value has been received. Since a receipt is a mere acknowledgement of Payment. it may be subject to explanation or contradiction. A receipt may be used as evidence against one just as any other declaration or admission. A simple receipt not under seal is presumptive evidence only and may be rebutted or explained by other evidence of mistake in giving it, or of non-payment or of the circumstances under which it was given. 16 (Emphasis ours.)
Although a receipt is not conclusive evidence, in the case at bench, an exhaustive review of the records fails to disclose any other evidence sufficient and strong enough to overturn the acknowledgment embodied in petitioner’s own receipt (as to the amount of money it actually received).
Petitioner contends that it offered in court evidence of the particulars or the actual denominations of the money it received from Flores in exchange for its managerial checks. However, aside from the self-serving testimonies of petitioner’s witnesses, we fail to discover any such evidence in the records. In the words of the trial court:chanrob1es virtual 1aw library
After having thoroughly evaluated the evidences (sic) on record, the Court finds and so believes that plaintiff indeed paid defendant the amount of P1,000,040.00 when he purchased the two (2) manager’s checks worth (sic) P1,000,000.00. This is clearly manifested from the receipt issued by the defendant wherein it explicitly admits that the amount stated therein is what plaintiff actually paid. While the defendant does not dispute the receipt it issued to the plaintiff. it endeavored to prove that the actual amount involved in the entire transaction is only P900.000.00 that is P450,000.00 manager’s check and P450.000.00 cash by submitting in evidence. the application forms filled up by the plaintiff. Exhibits "1. 2, 3 and 4." As may be readily seen these application forms relied upon by the defendant have no probative value for they do not yield and direct Proof of Payment. Besides defendant even failed to adduce concrete evidence showing that these forms which were crumpled and retrieved from the waste basket were made the basis of the approval of the purchased (sic) made. At any rate, the Court finds such pieces of evidence not only unconvincing but also self-defeating in the light of the receipt, the accuracy, correctness and due execution of which was indubitably established. It is a cardinal rule in the law on evidence that the best proof of payment is the receipt. 17 (Emphasis ours.)
In Monfort v. Aguinaldo, 18 the receipts of payment, although not exclusive, were deemed to be the best evidence. Thus:chanrob1es virtual 1aw library
That the best evidence for proving payment is by the evidence of receipts showing the same is also admitted. What respondents claim is that there is no rule which provides that payment can only be proved by receipts. While receipts are deemed to be the best evidence, they are not exclusive. Other evidence may be presented in lieu thereof if they are not available, as in case of loss, destruction or disappearance. The fact of payment may be established not only by documentary evidence, but also by parol evidence (48 C.J. 727; Greenleaf, Law of Evidence, Vol. II, p. 486; Jones on Evidence [1913] Vol. II, p. 193), specially in civil cases where preponderance of evidence is the rule. Here respondents presented documentary as well as oral evidence which the Court of Appeals found to be sufficient, and this finding is final.
In the instant case, petitioner’s contention that Flores paid P900,000.00 only instead of P1,000,000.00 (exclusive of bank charges) in the following denominations: a managers check worth P450,000.00; P430,000.00 in P100.00 bills; and P20,000.00 in P500.00 bills, was based solely on the testimonies of petitioner’s bank employees--the very ones involved in the fiasco, 19 and not on any other independent evidence. Hence, having failed to adduce sufficient rebuttal evidence, petitioner is bound by the contents of the receipt it issued to Flores. The subject receipt remains to be the primary or best evidence or "that which affords the greatest certainty of the fact in question." 20
On the issue of damages, we concur with the findings of the trial court and the Court of Appeals, respectively:chanrob1es virtual 1aw library
Since there is no doubt as to the fact that the plaintiff purchased from the defendant bank two (2) manager’s check worth P500,000.00 each as this was evidenced by an official receipt (Exhibit "A"), then, following the above jurisprudential ruling, the existence of the manager’s check (sic) created as (sic) fiduciary relationship between the defendant bank and the plaintiff and therefore any breach thereof must be borne by the negligent party. In this case, the money counter who, among her other duties, is in charge of counting the money received from a client purchasing a manager’s check did not perform her duty with diligence and due care. This may be gathered from her testimony that she did not wait for the counting machine to finish counting the money for the plaintiff is a VIP client and he was in a hurry as he was tapping the window (p. 37, T.S.N., August 28, 1990). Equally negligent is Reynaldo Castor for not doing anything when he noticed that their money counters who entertained the plaintiff were rattled. From these unfolded facts, the so-called honest mistake pleaded is therefore misplaced and perforced, defendant must suffer the consequences of its own negligent acts.
The records further show that plaintiff is a prominent businessman, licensed and engaged in the real estate business, buying and selling houses and lots under the business name and style CMS Commercial. He is at the same time a consultant of Dizon-Esguerra Real Estate Company. Defendant treated him as a valued and VIP client. Because of the bank’s refusal to encash the entire one million face amount of his manager’s checks, he was so embarrassed for he was not able to purchase a house and lot in Monterroza Subdivision, Baguio City. Significantly, the foregoing undisputed facts made even more untenable defendant’s implicit supposition that the subject manager’s checks were not intended for the purchase of a house or for any business transaction but for gambling.
Finally. since plaintiff was compelled to litigate to protect its interest due to the non-compliance of defendant’s obligation, he is therefore entitled to attorney’s fees (pars. 5, article 2208, Civil Code of the Philippines). 21
x x x
Appellee Flores narrated his woes to the lower court when appellant bank refused to honor his Manager’s Checks worth P1 Million because of the alleged shortage in appellee’s payment to the effect that he had to go back and forth the bank to encash said checks (pp. 16-18, t.s.n., July 2, 1990), and that he lost a deal of (sic) a house for sale in Baguio City worth P1 Million as he could not produce said amount withheld by the appellant bank (p. 22, id.). Appellee Flores further testified as to the effect of the incident on his integrity as a businessman as follows:jgc:chanrobles.com.ph
"Yes, my integrity and dependability as a businessman is highly doubted in Baguio because of the PNB refusal to honor the two (2) manager’s checks inspite of them issuing me the receipt. So, whenever I make a deal in house and they would now even doubt whether I have the money to buy the house that I am buying, it greatly affected my integrity as a businessman in Baguio. (p. 25, t.s.n., Id.)
In the case of Makabali v. C. A., 157 SCRA 253, the Supreme Court reiterated the doctrine on the grant of moral and exemplary damages, as follows:jgc:chanrobles.com.ph
"To begin with, there is no hard and fast rule in the determination of what would be a fair amount of moral damages, since each case must be governed by its own peculiar circumstances.
"Article 2217 of the Civil Code recognizes that moral damages which include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury, are incapable of pecuniary estimation.
"As to exemplary damages, Article 2229 of the Civil Code provides that such damages may be imposed by way of example or correction for the public good. While exemplary damages cannot be recovered as a matter of right, they need not be proved, although plaintiff must show that he is entitled to moral, temperate or compensatory damages before the court may consider the question of whether or not exemplary damages should be awarded. 22
However, we give consideration to petitioner’s allegation that the award of P1,000,000.00 moral damages and P1,000,000.00 exemplary damages in addition to Flores’ actual claim of P100,000.00 is "inordinately disproportionate and unconscionable. 23
Under the circumstances obtaining in the case at bench, we rule that the award of moral and exemplary damages is patently excessive and should be reduced to a reasonable amount. We take into consideration the following factors:chanrob1es virtual 1aw library
First, Flores’ contention that he lost the opportunity to purchase a house and lot in Baguio City due to petitioner’s gross negligence is based solely on his own testimony and a mere general statement at that. The broker he named during his cross-examination on 10 July 1990, a Mr. Nick Buendia was not even presented to confirm the aforementioned allegation:chanrob1es virtual 1aw library
x x x
Q. You also stated that this amount was intended for the purchase of the real estate property in Baguio, is that right?
A. Yes.
Q. Can you tell this Honorable Court where is this specific property located in Baguio?
A. It is located in Monterosa Subdivision.
Q. Can you tell us the number of the street?
A. It is within the Menterosa.
Q. Can you identify the name of the person with whom you transacted?
A. Your Honor, I have the papers and during the next hearing I will bring it.
ATTY. D. VALDEZ:chanrob1es virtual 1aw library
Is that meant, Your Honor that we are continuing the cross examination on the next hearing considering that he will show a certain document
Q. Can you not reveal to us the name of the person with whom you transacted?
A. As I have said I could not be guessing because it was coursed through another broker.
And, this broker usually did not tell you who is the owner.
Q. What I am asking you is the person whom you transacted and not necessarily the owner? We are supposed to know, Your Honor.
COURT:chanrob1es virtual 1aw library
The name of the broken
A. The name of the broker, Your Honor is Nick Buendia.
Q. Do you know what subsequently happened if there was anything happened to that property that was being sold?
A. It was sold.
Q. To someone else?
A. Yes.
Q. At the time you were purchasing the manager’s checks for one (1 M) million you intended this as a payment for the property?
A. Yes. 24
x x x
Second, the award of moral damages in the amount of P1,000,000.00 is obviously not proportionate to the actual losses of P100,000.00 sustained by Flores. In RCPI v. Rodriguez, 25 we ruled thus:chanrob1es virtual 1aw library
. . . Nevertheless, we find the award of P100,000.00 as moral damages in favor of respondent Rodriguez excessive and unconscionable. In the case of Prudenciado v. Alliance Transport System, Inc. (148 SCRA 440 [1987]) we said: ". . . [I]t is undisputed that the trial courts are given discretion to determine the amount of moral damages (Alcantara v. Surro, 93 Phil. 472) and that the Court of Appeals can only modify or change the amount awarded when they are palpably and scandalously excessive ‘so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court (Gellada v. Warner Barnes & Co., Inc., 57 O.G. [4] 7347, 7358; Sadie v. Bachrach Motors Co., Inc., 57 O.G. [4] 636 and Adone v. Bachrach Motor Co., Inc., 57 O.G. 656). But in more recent cases where the awards of moral and exemplary damages are far too excessive compared to the actual losses sustained by the aggrieved Party, this Court ruled that they should be reduced to more reasonable amounts. . . . (Emphasis ours.)
In other words, the moral damages awarded must be commensurate with the loss or injury suffered.
Similarly, we have consistently declared that:chanrob1es virtual 1aw library
Moral damages though incapable of pecuniary estimations, are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer (San Andres v. Court of Appeals, 1 16 SCRA 85 [1982] cited in Prudenciado v. Alliance Transport System, Inc. supra). 26
We, likewise, take this opportunity to stress that:chanrob1es virtual 1aw library
... [M]oral damages are emphatically not intended to enrich a complainant at the expense of the defendant. They are awarded only to enable the injured party to obtain means, diversion or amusements that will serve to obviate the moral suffering he has undergone, by reason of the defendant’s culpable action. Its award is aimed at the restoration, within the limits of the possible, of the spiritual status quo ante, and it must be proportional to the suffering inflicted. 27 (Emphasis ours.)
It is because of the foregoing reasons that we have had to constantly remind the courts to desist from awarding excessive damages disproportionate to the peculiar circumstances of the case. "Judicial discretion granted to the courts in the assessment of damages must always be exercised with balanced restraint and measured objectivity." 28
Finally, we find petitioner’s act of issuing the manager’s checks and corresponding receipt before payment thereof was completely counted reckless and grossly negligent. It is an appalling breach of bank procedures and must never be repeated.
In Bautista v. Mangaldan Rural Bank, Inc., 29 we stated, thus:chanrob1es virtual 1aw library
The banking system has become an indispensable institution in the modern world and plays a vital role in the economic life of every civilized society. Whether as mere passive entities for the safe-keeping and saving of money or as active instruments of business and commerce, banks have attained an unbiquitous presence among the people, who have come to regard them with respect and even gratitude and, most of all, confidence. (Simex International [Manila], Inc. v. Court of Appeals, G.R. No. 88013, March 19, 1990, 183 SCRA 360).
However, the award of P1,000,000.00 exemplary damages is also far too excessive and should likewise be reduced to an equitable level. Exemplary damages are imposed not to enrich one party or impoverish another but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. 30
Therefore, based on the foregoing discussion, the award of moral damages is reduced to P100,000.00 and the exemplary damages is likewise reduced to P25,000.00.
We see no reason to disturb the award of attorney’s fees in the amount of P50,000.00. We concur with the findings of the Court of Appeals on this matter:chanrob1es virtual 1aw library
As for the award of attorney’s fees, We find the same in order considering that "defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs plainly valid, just and demandable claim" (Art. 2208 [5], New Civil Code), and it is just and equitable to award plaintiff-appellee his attorney’s fees (Art. 2208 [11], id.). 31
WHEREFORE, premises considered, the assailed decision is hereby MODIFIED as follows:chanrob1es virtual 1aw library
1. The award of moral damages is reduced from P1,000,000.00 to P100,000.00; and
2. The award of exemplary damages is reduced from P1,000,000.00 to P25,000.00.
In all other respects, the assailed decision is hereby AFFIRMED.
SO ORDERED.
Padilla, Bellosillo, Vitug and Hermosisima, Jr., JJ., concur.
Endnotes:
1. TSN, 2 July 1990, p. 5.
2. Annex "A," Original Records, p. 5.
3. TSN, July 1990, p. 15.
4. Id., at 16.
5. Id., at 18-20.
6. Id., at 21; Annex "D," Original Records, p. 8.
7. Id., at 23.
8. Original Records, pp. 1-4.
9. Id., at 22-30.
10. TSN, 28 August 1990, p. 18.
11. Original Records, pp. 172-175.
12. Rollo, pp. 37-38.
13. CA Decision, Rollo, pp. 35-45.
14. Rollo, p. 47.
15. Memorandum of Petitioner, pp. 6-7.
16. Sibal, Jose Agaton R., Philippine Legal Encyclopedia, 1986, pp. 829-830.
17. Original Records, p. 173.
18. G.R. No. L-4104, 2 May 1952.
19. TSN, 28 August 1990, p. TSN, 13 May 1991, p. 7.
20. Francisco, Ricardo, J., Evidence, Rules of Court in the Philippines, Rules 128-134, 1993 Edition, p. 2.
21. Original Records, pp. 174-175.
22. Rollo, pp. 42-43.
23. Rollo, p. 8.
24. TSN, 10 July 1990, pp. 10-11.
25. 182 SCRA 899 (1990); see also De Leon v. CA, 165 SCRA 166 (1988).
26. De Leon v CA, 165 SCRA 166 (1988). The same rule was reiterated in Simex International (Manila), Inc. v. CA, 183 SCRA 360 (1990) and Bautista v. Mangaldan Rural Bank, Inc.. 230 SCRA 16 (1994).
27. Visayan Sawmill Co., Inc. v. CA, 219 SCRA 378 (1993) see also PAL v. CA, 226 SCRA 423 (1993); De Leon v. CA, supra; RCPI v. Rodriguez, supra.
28. Visayan Sawmill Co., Inc. v. CA, supra, citing Inhelder Corp. v. CA, 122 SCRA 567 (1983).
29. 230 SCRA 16 (1994).
30. Mercenas v. Court of Appeals, 180 SCRA 83 (1989).
31. Rollo., pp. 44-45.
