FIRST DIVISION

[G.R. No. 116181. April 17, 1996]

PHILIPPINE NATIONAL BANK, petitioner, vs. COURT OF APPEAL
!"# CAR$ELO H. FLORE, respondents.
%LLABU
1. RE$E&IAL LA'( E)I&ENCE( &OCU$ENTAR% E)I&ENCE( RECEIPT(
A&$IIBILIT%. * A receipt is defined as: A written and signed acknowledgment
tat mone! as "een paid or goods a#e "een deli#ered$ A receipt is merely
presumptive evidence and is not conclusive. A written acknowledgment tat mone!
or a ting of #al%e as "een recei#ed$ Since a receipt is a mere acknowledgement
of payment, it may be subject to explanation or contradiction. A receipt ma! "e %sed
as e#idence against one &%st as an! oter declaration or admission$ A simple receipt
not %nder seal is pres%mpti#e e#idence onl! and ma! "e re"%tted or e'plained "!
oter e#idence of mistake in gi#ing it( or of non)pa!ment or of te circ%mstances
%nder wic it was gi#en$
+. I&.( I&.( I&.( I&.( AFFOR& THE BET PROOF OF PA%$ENT. , Alto%g a
receipt is not concl%si#e e#idence( in te case at "enc( an e'a%sti#e re#iew of te
records fails to disclose an! oter e#idence s%fficient and strong eno%g to o#ert%rn
te acknowledgment em"odied in petitioner*s own receipt +as to te amo%nt of
mone! it act%all! recei#ed,$ -etitioner contends tat it offered in co%rt e#idence of
te partic%lars or te act%al denominations of te mone! it recei#ed from Flores in
e'cange for its managerial cecks$ .owe#er( aside from te self)ser#ing
testimonies of petitioner*s witnesses( we fail to disco#er an! s%c e#idence in te
records$ In te words of te trial co%rt: After a#ing toro%gl! e#al%ated te
e#idences +sic, on record( te /o%rt finds and so "elie#es tat plaintiff indeed paid
defendant te amo%nt of - 0(111(121$11 wen e p%rcased te two +3, manager*s
cecks wort +sic, - 0(111(111$11$ Tis is clearl! manifested from te receipt
iss%ed "! te defendant werein it e'plicitl! admits tat te amo%nt stated terein is
wat plaintiff act%all! 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 P!!,!!!.!! that is P"#!,!!!.!! manager$s check and
P"#!,!!!.!! cash by submitting in evidence, the application forms filled up by the
plaintiff, %xhibits &', (, ) and "*. As may be readily seen these application forms
relied upon by the defendant have no probative value for they do not yield any
direct proof of payment. 4esides defendant e#en failed to add%ce concrete
e#idence sowing tat tese forms wic were cr%mpled and retrie#ed from te
waste "asket were made te "asis of te appro#al of te p%rcased +sic, made$ At
an! rate( te /o%rt finds s%c pieces of e#idence not onl! %ncon#incing "%t also
self)defeating in te ligt of te receipt( te acc%rac!( correctness and d%e
e'ec%tion of wic was ind%"ita"l! esta"lised$ It is a cardinal r%le in te law on
e#idence tat te "est proof of pa!ment is te receipt$
-. CI)IL LA'( &A$AGE( NEGLIGENCE( IUANCE THEREOF CREATE A
FI&UCIAR% RELATIONHIP BET'EEN THE BANK AN& THE PURCHAER OF
THE CHECK AN& THEREFORE AN% BREACH THEREOF $UT BE BORNE B%
THE NEGLIGENT PART%. , Since tere is no do%"t as to te fact tat te plaintiff
p%rcased from te defendant "ank two +3, manager*s ceck wort -511(111$11
eac as tis was e#idenced "! an official receipt( ten( following te a"o#e
&%rispr%dential r%ling( te e'istence of te manager*s ceck +sic, created as +sic,
fid%ciar! relationsip "etween te defendant "ank and te plaintiff and terefore an!
"reac tereof m%st "e "orne "! te negligent part!$ In tis case( te mone!
co%nter wo( among er oter d%ties( is in carge of co%nting te mone! recei#ed
from a client p%rcasing a manager*s ceck did not perform er d%t! wit diligence
and d%e care$ Tis ma! "e gatered from er testimon! tat se did not wait for te
co%nting macine to finis co%nting te mone! for te plaintiff is a VI- client and e
was in a %rr! as e was tapping te window$ 67%all! negligent is Re!naldo /astor
for not doing an!ting wen e noticed tat teir mone! co%nters wo entertained
te plaintiff were rattled$ From tese %nfolded facts( te so)called onest mistake
pleaded is terefore misplaced and perforced( defendant m%st s%ffer te
conse7%ences of its own negligent acts$
.. I&.( I&.( $ORAL &A$AGE( GRANTE& 'HERE THE PLAINTIFF/ INTEGRIT%
A A BUINE$AN 'A TARNIHE& &UE TO &EFEN&ANT BA& FAITH.
, Appellee Flores narrated is woes to te lower co%rt wen appellant "ank ref%sed
to onor is 8anager*s /ecks wort -0 8illion "eca%se of te alleged sortage in
appellee*s pa!ment to te effect tat e ad to go "ack and fort te "ank to
encas said cecks( and tat e lost a deal of +sic, a o%se for sale in 4ag%io /it!
wort -0 8illion as e co%ld not prod%ce said amo%nt witeld "! te appellant
"ank$ Appellee Flores f%rter testified as to te effect of te incident on is integrit!
as a "%sinessman$ In te case of 8aka"ali v. /$ A$( 059 S/RA 35:( te S%preme
/o%rt reiterated te doctrine on te grant of moral and e'emplar! damages( as
follows: To "egin wit( tere is no ard and fast r%le in te determination of wat
wo%ld "e a fair amo%nt of moral damages( since eac case m%st "e go#erned "! its
own pec%liar circ%mstances$ Article 3309 of te /i#il /ode recogni;es tat moral
damages wic incl%de p!sical s%ffering( mental ang%is( frigt( serio%s an'iet!(
"esmirced rep%tation( wo%nded feelings( moral sock( social %miliation and
similar in&%r!( are incapa"le of pec%niar! estimation$
0. I&.( I&.( I&.( $UT BE CO$$ENURATE 'ITH THE LO OR IN1UR%
UFFERE&. , Second( te award of moral damages in te amo%nt of
-0(111(111$11 is o"#io%sl! not proportionate to te act%al losses of - 011(111$11
s%stained "! Flores$ In +,P- v. +odrigue., +0<3 S/RA <== >0==1, we r%led t%s: '
' '$ Ne#erteless( we find te award of - 011(111$11 as moral damages in fa#or of
respondent Rodrig%e; e'cessi#e and %nconsciona"le$ In te case of Prudenciado
v. Alliance /ransport System, -nc. +02< S/RA 221 >0=<9?, we said: ' ' ' >I?t is
%ndisp%ted tat te trial co%rts are gi#en discretion to determine te amo%nt of
moral damages +Alcantara v. S%rro( =: -il$ 293, and tat te /o%rt of Appeals can
onl! modif! or cange te amo%nt awarded wen te! are palpa"l! and
scandalo%sl! e'cessi#e @so as to indicate tat it was te res%lt of passion( pre&%dice
or corr%ption on te part of te trial co%rt* +Aellada v. Barner 4arnes C /o$( Inc$( 59
O$A$ >2? 9:29( 9:5<D and oter cases cited,$ 0ut 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 ,ourt ruled that they should be
reduced to more reasonable amounts. ' ' '$ In oter words( te moral damages
awarded m%st "e commens%rate wit te loss or in&%r! s%ffered$
6. I&.( I&.( E2E$PLAR% &A$AGE( GRANTE& ONL% IF THE PLAINTIFF CAN
PRO)E THAT HE I ENTITLE& TO $ORAL, TE$PERATE OR CO$PENATOR%
&A$AGE. , As to e'emplar! damages( Article 333= of te /i#il /ode pro#ides
tat s%c damages ma! "e imposed "! wa! of e'ample or correction for te p%"lic
goodD Bile e'emplar! damages cannot "e reco#ered as a matter of rigt( te!
need not "e pro#ed( alto%g plaintiff m%st sow tat e is entitled to moral(
temperate or compensator! damages "efore te co%rt ma! consider te 7%estion of
weter or not e'emplar! damages so%ld "e awarded$
7. I&.( I&.( ATTORNE%/ FEE( GRANTE& IF PLAINTIFF I CO$PELLE& TO
LITIGATE &UE TO &EFEN&ANT/ NON,CO$PLIANCE 'ITH HI OBLIGATION.
, Be see no reason to dist%r" te award of attorne!*s fees in te amo%nt of
-51(111$11$ Be conc%r wit te findings of te /o%rt of Appeals on tis matter: As
for te award of attorne!*s fees( Be find te same in order considering tat
defendant acted in gross and e#ident "ad fait in ref%sing to satisf! te plaintiff*s
plainl! #alid( &%st and demanda"le claim +Art$ 331< >5?, New /i#il /ode,( and it is
&%st and e7%ita"le to award plaintiff)appellee is attorne!*s fees +Art$ 331<
>00?( id.1. Since plaintiff was compelled to litigate to protect its interest d%e to te
non)compliance of defendant*s o"ligation( e is terefore entitled to attorne!*s$ fees
+pars$ #, Article 331<( /i#il /ode of te -ilippines,$
APPEARANCE OF COUNEL
/he ,hief 2egal ,ounsel for petitioner$
2aw 3irm of +aymundo A. Armovit for pri#ate respondent$
& E C I I O N
KAPUNAN, J.:
Tis is a -etition for Re#iew on /ertiorari %nder R%le 25 of te Re#ised R%les of
/o%rt assailing te decision and resol%tion of te respondent /o%rt of Appeals in /A)
A$R$ /V No$ :<3<0 dated:0 Ean%ar! 0==2 and # E%l! 0==2( respecti#el!( wic affirmed
te decision of te Regional Trial /o%rt in /i#il /ase No$ F)<=)21:: declaring -ilippine
National 4ank lia"le to /armelo .$ Flores for damages$
Te facts of te case are as follows:
On 00 E%l! 0=<=( pri#ate respondent /armelo .$ Flores +Flores, p%rcased from
petitioner at its 8anila -a#ilion .otel %nit( two +3, manager*s cecks wort -511(111$11
eac( pa!ing a total of -0(111(121$11( incl%ding te ser#ice carge$
0
A receipt for said
amo%nt was iss%ed "! te petitioner$
3
On 03 E%l! 0=<=( Flores presented tese cecks at te 4ag%io .!att /asino %nit of
petitioner$ -etitioner ref%sed to encas te cecks "%t after a lengt! disc%ssion( it
agreed to encas one +0, of te cecks$
:
.owe#er( it deferred te pa!ment of te oter
ceck %ntil after Flores agreed tat it "e "roken down to fi#e 4#1 manager*s cecks of -
011(111$11 eac$ F%rtermore( petitioner ref%sed to encas one of te fi#e cecks %ntil
after it is cleared "! te 8anila -a#ilion .otel %nit$
2
.a#ing no oter
option( Flores agreed to s%c an arrangement$ .owe#er( %pon is ret%rn to 8anila( e
made representations to petitioner tro%g its 8alate 4ranc so tat te ceck ma! "e
encased "%t to no a#ail$
5
Flores( tereafter( wrote a letter to is co%nsel informing te
latter of te aforementioned e#ents$
G
A Formal Demand was made "! pri#ate
respondent*s co%nsel "%t petitioner persisted in its ref%sal to onor te ceck$
9
Heft wit no oter coice( Flores filed a case wit te Regional Trial /o%rt of
F%e;on /it!( 4ranc 011( docketed as /i#il /ase No$ F)<=)21::$
<
In its Answer wit /omp%lsor! /o%nterclaim( petitioner insisted tat onl!
-=11(111$11 and -21$11 "ank carges were act%all! paid "! Flores wen e
p%rcased te two +3, manager*s cecks wort -0(111(111$11$ It alleged tat d%e
to Flores* demanding attit%de and temper( petitioner*s mone! co%nter( Rowena
8ontes( wo( at tat time was still new at er &o"( made an error in good fait in iss%ing
te receipt for -0(111(121$11$
=
Te act%ations of Flores allegedl! distracted te
personnel manning te %nit$
01
After trial( te co%rt rendered its decision on 5 8a! 0==3( te dispositi#e portion of
wic states:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiff and against the defendant Philippine National an! as follo"s#
a$% ordering the defendant to pay plaintiff the sum of P &'','''$'' representing the
amount of the chec! dishonored "ith interest thereon at the legal rate per annum
from November &(, &)*) until fully paid+
b$% ordering defendant to pay plaintiff for the embarrassment caused him the amount
of P&,''','''$'' as moral damages+
c$% ordering defendant to pay plaintiff the amount of P&,''','''$'' as e,emplary
damages brought about by the malevolent and malicious acts of the former+
d$% ordering defendant to pay plaintiff the sum of P-','''$'' as attorney.s fees+ and
e$% ordering defendant to pay the costs of the suit$
/O OR0ERE0$
&&
-etitioner interposed an appeal wit te respondent co%rt( docketed as /A)A$R$ /V
No$ :<3<0 assigning te following errors( to wit:
I
1HE 1R234 5O6R1 ERRE0 2N HO402N7 ON 1HE 3/2/ OF 1HE RE5E2P1
83R9E0 E:H$ ;3< 1H31 2N P6R5H3/2N7 1HE 1WO 83N37ER./ 5HE59/
ON =64> &&, &)*), 3PPE44EE F4ORE/P320 PN P&,''','?'$'' 0E/P21E @&%
1H31 1HE /320 RE5E2P1 0OE/ NO1 /HOW, OR 3FFOR0 1HE E/1 PROOF
OF 1HE 5ORRE51 38O6N1 P320 > F4ORE/ 1O PN 3N0 @A% 1H31 3/
/HOWN > PREPON0ER3N1 3N0 5ON546/2BE EB20EN5E, 3PPE44EE
P320 PN P)'','?' ON4> 2N ONE 83N37ER./ 5HE59 3N0 8ONE13R>
244/$
II
1HE 1R234 5O6R1 ERRE0 2N 3W3R02N7 F4ORE/ P& 82442ON 8OR34
03837E/, P& 82442ON E:E8P43R> 03837E/, 3N0 P-'',''' @sic%
311ORNE>./ FEE/ 0E/P21E @&% 1H31 PN./ REF6/34 1O EN53/H 1HE
P&'',''' 83N37ER./ 5HE59 @E:H$ ;<% W3/ =6/12F2E0, 3/ F4ORE/ W3/
NEBER EN1214E0 1O 1HE 8ONE>+ @A% 1H31 1HERE 2/ 3=E51 3/EN5E
OF EB20EN5E 1H31 PN 351E0 FR36064EN14> OR 834252O6/4>,
EBEN 3/ 7OO0 F321H 2/ PRE/68E0+ 3N0 @C% 1H31 F4ORE/. 344E7E0
E83RR3//8EN1 FOR H2/ F3246RE 1O P6R5H3/E 3 HO6/E 3N0 4O1
06E 1O PN./ REF6/34 1O EN53/H 1HE WHO4E P& 82442ON 2/
6NFO6N0E0$
&A
On :0 Ean%ar! 0==2( te /o%rt of Appeals rendered te 7%estioned decision( te
dispositi#e portion of wic reads:
WHEREFORE, the appealed decision of the lo"er court in 5ivil 5ase No$ DE*)E?'CC
is hereby 3FF2R8E0 by the 5ourt$
5osts against defendantEappellant$
/O OR0ERE0$
&C
A motion for reconsideration was filed "%t it was likewise denied in a resol%tion
dated # E%l! 0==2(
02
t%s( te present action wit petitioner raising te following iss%es(
to wit:
I
WHE1HER OR NO1 1HE 53 ERRE0 2N 43W 2N HO402N7 1H31, 1HE E/1
EB20EN5E 1O /HOW WHE1HER 8R$ F4ORE/ P320 1HE PN 53/2NO 6N21
P)'','?' OR P&,''','?' 2N P6R5H3/2N7 1HE 1WO 83N37ER./ 5HE59/
E35H WOR1H P-'',''' 2/ 1HE RE5E2P1 FOR P&,''','?'$
II
WHE1HER OR NO1 PN 53N PRE/EN1 5O8PE1EN1 3N0 RE4EB3N1
EB20EN5E 1O /6PPOR1 21/ 344E7312ON 2N 1HE 3N/WER 1H31 8R$
F4ORE/ 3516344> P320 P)'','?' 3N0 NO1 P&,''','?' FOR 1HE /6=E51
83N37ER./ 5HE59/$
III
WHE1HER OR NO1 1HE 3W3R0 FOR P& 82442ON 8OR34 03837E/, P&
82442ON E:E8P43R> 03837E/, 3N0 P-',''' 311ORNE>./ FEE/, 3/
5O8P3RE0 1O 1HE 351634 54328 OF P&'',''' 2/ 02/PROPOR12ON31E
3N0 6N5ON/52ON34E$
&-
Be sall deal wit te first and second iss%es raised "! petitioner togeter as te!
are interrelated$
-etitioner concedes tat it iss%ed te s%"&ect receipt for -0(111(121$11 to FloresD
!et( in te same "reat( it immediatel! co%nters tat said receipt is not te "est
e#idence to pro#e ow m%c mone! Flores act%all! paid for te p%rcase of petitioner*s
manager*s cecks$
F%rter( petitioner insists tat te iss%e in te instant case is not te contents of te
s%"&ect receipt "%t te e'act amo%nt of mone! Flores paid to -N4( an in7%ir! wic(
petitioner a#ers( allows te presentation of e#idence aliunde$
-etitioner*s contentions are %nmeritorio%s$
A receipt is defined as:
3 "ritten and signed ac!no"ledgment that money has been paid or goods have been
delivered$ A receipt is merely presumptive evidence and is not conclusive.
3 "ritten ac!no"ledgment that money or a thing of value has been received$ Since a
receipt is a mere acknowledgment of payment, it may be subject to explanation or
contradiction. 3 receipt may be used as evidence against one just as any other
declaration or admission$ 3 simple receipt not under seal is presumptive evidence only
and may be rebutted or e,plained by other evidence of mista!e in giving it, or of nonE
payment or of the circumstances under "hich it "as given$
&(
@2talics ours$%
Alto%g a receipt is not concl%si#e e#idence( in te case at "enc( an e'a%sti#e
re#iew of te records fails to disclose an! oter e#idence s%fficient and strong eno%g
to o#ert%rn te acknowledgment em"odied in petitioner*s own receipt +as to te amo%nt
of mone! it act%all! recei#ed,$
-etitioner contends tat it offered in co%rt e#idence of te partic%lars or te act%al
denominations of te mone! it recei#ed from Flores in e'cange for its managerial
cecks$ .owe#er( aside from te self)ser#ing testimonies of petitioner*s witnesses( we
fail to disco#er an! s%c e#idence in te records$ In te words of te trial co%rt:
3fter having thoroughly evaluated the evidences @sic% on record, the 5ourt finds and
so believes that plaintiff indeed
paid defendant the amount of P&,''','?'$'' "hen he purchased the t"o @A%
manager.s chec!s "orth @sic% P&,''','''$''$ 1his is clearly manifested from the
receipt issued by the defendant "herein it e,plicitly admits that the amount stated
therein is "hat 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 P!!,!!!.!! that is P"#!,!!!.!! manager$s check and
P"#!,!!!.!! cash by submitting in evidence, the application forms filled up by the
plaintiff %xhibits & ', (, ) and ".* As may be readily seen these application forms
relied upon by the defendant have no probative value for they do not yield any direct
proof of payment. esides defendant even failed to adduce concrete evidence sho"ing
that these forms "hich "ere crumpled and retrieved from the "aste bas!et "ere made
the basis of the approval of the purchased @sic% made$ 3t any rate, the 5ourt finds such
pieces of evidence not only unconvincing but also selfEdefeating in the light of the
receipt, the accuracy, correctness and due e,ecution of "hich "as indubitably
established$ 2t is a cardinal rule in the la" on evidence that the best proof of payment
is the receipt$
&F
@2talics ours$%
-n 5onfort v. Aguinaldo,
0<
te receipts of pa!ment( alto%g not e'cl%si#e( were
deemed to "e te "est e#idence$ T%s:
1hat the best evidence for proving payment is by the evidence of receipts sho"ing the
same is also admitted$ What respondents claim is that there is no rule "hich provides
that payment can only be proved by receipts$ While receipts are deemed to be the best
evidence, they are not e,clusive$ Other evidence may be presented in lieu thereof if
they are not available, as in case of loss, destruction or disappearance$ 1he fact of
payment may be established not only by documentary evidence, but also by parol
evidence @?* 5$=$ FAF+ 7reenleaf, 4a" of Evidence, Bol$ 22, p$ ?*(+ =ones on Evidence
G&)&CH Bol$ 22, p$ &)C%, specially in civil cases "here preponderance of evidence is the
rule$ Here respondents presented documentary as "ell as oral evidence "hich the
5ourt of 3ppeals found to be sufficient, and this finding is final$
2n the instant case, petitioner.s contention that Flores paid P)'','''$'' only instead of
P&,''','''$'' @e,clusive of ban! charges% in the follo"ing denominations# a
manager.s chec! "orth P?-','''$''+ P?C','''$'' in P&''$'' bills+ and PA','''$'' in
P-''$'' bills, "as based solely on the testimonies of petitioner.s ban! employees E the
very ones involved in the fiasco,
&)
and not on any other independent evidence$ Hence,
having failed to adduce sufficient rebuttal evidence, petitioner is bound by the
contents of the receipt it issued to Flores$ 1he subject receipt remains to be the
primary or best evidence or ;that "hich affords the greatest certainty of the fact in
Iuestion$<
A'
On te iss%e of damages( we conc%r wit te findings of te trial co%rt and te /o%rt
of Appeals( respecti#el!:
/ince there is no doubt as to the fact that the plaintiff purchased from the defendant
ban! t"o @A% manager.s chec! "orth P-'','''$'' each as this "as evidenced by an
official receipt @E,hibit ;3<%, then, follo"ing the above jurisprudential ruling, the
e,istence of the manager.s chec! @sic% created as @sic% fiduciary relationship bet"een
the defendant ban! and the plaintiff and therefore any breach thereof must be borne by
the negligent party$ 2n this case, the money counter "ho, among her other duties, is in
charge of counting the money received from a client purchasing a manager.s chec!
did not perform her duty "ith diligence and due care$ 1his may be gathered from her
testimony that she did not "ait for the counting machine to finish counting the money
for the plaintiff is a B2P client and he "as in a hurry as he "as tapping the "indo" @p$
CF, 1$/$N$, 3ugust A*, &))'%$ EIually negligent is Reynaldo 5astor for not doing
anything "hen he noticed that their money counters "ho entertained the plaintiff "ere
rattled$ From these unfolded facts, the soEcalled honest mista!e pleaded is therefore
misplaced and perforced, defendant must suffer the conseIuences of its o"n negligent
acts$
1he records further sho" 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 58/ 5ommercial$ He is at the same time a consultant of
0iJonEEsguerra Real Estate 5ompany$ 0efendant treated him as a valued and B2P
client$ ecause of the ban!.s refusal to encash the entire one million face amount of
his manager.s chec!s, he "as so embarrassed for he "as not able to purchase a house
and lot in 8onterroJa /ubdivision, aguio 5ity$ /ignificantly, the foregoing
undisputed facts made even more untenable defendant.s implicit supposition that the
subject manager.s chec!s "ere not intended for the purchase of a house or for any
business transaction but for gambling$
Finally, since plaintiff "as compelled to litigate to protect its interest due to the nonE
compliance of defendant.s obligation, he is therefore entitled to attorney.s fees
@pars$ #, 3rticle AA'*, 5ivil 5ode of the Philippines%$
A&
''' ''' '''$
3ppellee Flores narrated his "oes to the lo"er court "hen appellant ban! refused to
honor his 8anager.s 5hec!s "orth P& 8illion because of the alleged shortage in
appellee.s payment to the effect that he had to go bac! and forth the ban! to encash
said chec!s @pp$ &(E&*, t$s$n$, =uly A, &))'%, and that he lost a deal of @sic% a house for
sale in aguio 5ity "orth P& 8illion as he could not produce said amount "ithheld
by the appellant ban! @p$ AA, id.+. 3ppellee Flores further testified as to the effect of
the incident on his integrity as a businessman as follo"s#
;>es, my integrity and dependability as a businessman is highly doubted
in aguio because of the PN refusal to honor the t"o @A% manager.s chec!s inspite
of them issuing me the receipt$ /o, "henever 2 ma!e a deal in house and they "ould
no" even doubt "hether 2 have the money to buy the house that 2 am buying, it
greatly affected my integrity as a businessman in aguio$< @p$ (#, t$s$n$, ,d.+
In te case of 8aka"ali v. /$ A$( 059 S/RA (#), te S%preme /o%rt reiterated te
doctrine on te grant of moral and e'emplar! damages( as follows:
;1o begin "ith, there is no hard and fast rule in the determination of "hat "ould be a
fair amount of moral damages, since each case must be governed by its o"n peculiar
circumstances$
;3rticle AA&F of the 5ivil 5ode recogniJes that moral damages "hich include
physical suffering, mental anguish, fright, serious an,iety, besmirched reputation,
"ounded feelings, moral shoc!, social humiliation and similar injury, are incapable of
pecuniary estimation$
;3s to e,emplary damages, 3rticle AAA) of the 5ivil 5ode provides that such
damages may be imposed by "ay of e,ample or correction for the public good$ While
e,emplary damages cannot be recovered as a matter of right, they need not be proved,
although plaintiff must sho" that he is entitled to moral, temperate or compensatory
damages before the court may consider the Iuestion of "hether or not e,emplary
damages should be a"arded$
AA
Ho"ever, "e give consideration to petitioner.s allegation that the a"ard of
P&,''','''$'' moral damages and P&,''','''$'' e,emplary damages in addition
to Flores. actual claim of P&'','''$'' is ;inordinately disproportionate and
unconscionable$<
AC
Inder te circ%mstances o"taining in te case at "enc( we r%le tat te award of
moral and e'emplar! damages is patentl! e'cessi#e and so%ld "e red%ced to a
reasona"le amo%nt$
Be take into consideration te following factors:
First( Flores* contention tat e lost te opport%nit! to p%rcase a o%se and lot in
4ag%io /it! d%e to petitioner*s gross negligence is "ased solel! on is own testimon!
and a mere general statement at tat$ Te "roker e named d%ring is cross)
e'amination on 01 E%l! 0==1( a 8r$ Nick 4%endia was not e#en presented to confirm te
aforementioned allegation:
''' ''' '''
6. Jo% also stated tat tis amo%nt was intended for te p%rcase of te real estate
propert! in 4ag%io( is tat rigtK
A$ Jes$
6. /an !o% tell tis .onora"le /o%rt were is tis specific propert! located in 4ag%ioK
A$ It is located in 8onterosa S%"di#ision$
6. /an !o% tell %s te n%m"er of te streetK
A$ It is witin te 8onterosa$
6. /an !o% identif! te name of te person wit wom !o% transactedK
A$ Jo%r .onor( I a#e te papers and d%ring te ne't earing I will "ring it$
ATTJ$ D$ VAHD6L:
Is tat mean( Jo%r .onor tat we are contin%ing te cross e'amination on te ne't
earing considering tat e will sow a certain doc%ment$
6. /an !o% not re#eal to %s te name of te person wit wom !o% transactedK
A$ As I a#e said I co%ld not "e g%essing "eca%se it was co%rsed tro%g anoter
"roker$
And( tis "roker %s%all! did not tell !o% wo is te owner$
6. Bat I am asking !o% is te person wom !o% transacted and not necessaril! te
ownerK Be are s%pposed to know( Jo%r .onor$
/OIRT:
Te name of te "roker$
A$ Te name of te "roker( Jo%r .onor is Nick 4%endia$
6. Do !o% know wat s%"se7%entl! appened if tere was an!ting appened to tat
propert! tat was "eing soldK
A$ It was sold$
6. To someone elseK
A$ Jes$
6. At te time !o% were p%rcasing te manager*s cecks for one +0 8, million !o%
intended tis as a pa!ment for te propert!K
A$ Jes$
32
''' ''' '''$
Second( te award of moral damages in te amo%nt of - 0(111(111$11 is o"#io%sl!
not proportionate to te act%al losses of -011(111$11 s%stained "! Flores$ In +,P- v.
+odrigue.,
35
we r%led t%s:
, , ,$ Nevertheless, "e find the a"ard of P &'','''$'' as moral damages in favor of
respondent RodrigueJ e,cessive and unconscionable$ 2n the case of Prudenciado v.
Alliance -ransport System, ,nc. @&?* /5R3 ??' G&)*FH% "e said# ;, , , G2Ht is
undisputed that the trial courts are given discretion to determine the amount of moral
damages @3lcantara v. /urro, )C Phil$ ?FA% and that the 5ourt of 3ppeals can only
modify or change the amount a"arded "hen they are palpably and scandalously
e,cessive Kso as to indicate that it "as the result of passion, prejudice or corruption on
the part of the trial court, @7ellada v. Warner arnes L 5o$, 2nc$, -F O$7$ G?H FC?F,
FC-*+ /adie v. achrach 8otors 5o$, 2nc$, -F O$7$ G?H (C( and 3done v. achrach
8otor 5o$, 2nc$, -F O$7$ (-(%$ .ut 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 /ourt ruled that they should be reduced to more
reasonable amounts. , , , @2talics Ours$%
In oter words( te moral damages awarded m%st "e commens%rate wit te loss
or in&%r! s%ffered$
Similarl!( we a#e consistentl! declared tat:
8oral damages though incapable of pecuniary estimations, are in the category of an
a"ard designed to compensate the claimant for actual injury suffered and not to
impose a penalty on the "rongdoer @/an 3ndres v. 5ourt of 3ppeals, &&( /5R3 *-
G&)*AH cited in Prudenciado v. 3lliance 1ransport /ystem, 2nc$ supra+.
A(
Be( likewise( take tis opport%nit! to stress tat:
0 123oral damages are emphatically not intended to enrich a complainant at the
expense of the defendant. 1hey are a"arded only to enable the injured party to obtain
means, diversion or amusements that "ill serve to obviate the moral suffering he has
undergone, by reason of the defendant.s culpable action$ 2ts a"ard is aimed at the
restoration, "ithin the limits of the possible, of the spiritual status 4uo ante, and it
must be proportional to the suffering inflicted$
AF
@2talics ours$%
2t is because of the foregoing reasons that "e have had to constantly remind the courts
to desist from a"arding e,cessive damages disproportionate to the peculiar
circumstances of the case$ ;=udicial discretion granted to the courts in the assessment
of damages must al"ays be e,ercised "ith balanced restraint and measured
objectivity$<
A*
Finall!( we find petitioner*s act of iss%ing te manager*s cecks and corresponding
receipt "efore pa!ment tereof was completel! co%nted reckless and grossl! negligent$
It is an appalling "reac of "ank proced%res and m%st ne#er "e repeated$
In 0autista v. 5angaldan +ural 0ank, -nc$(
3=
we stated( t%s:
1he ban!ing system has become an indispensable institution in the modern "orld and
plays a vital role in the economic life of every civiliJed society$ Whether as mere
passive entities for the safeE!eeping and saving of money or as active instruments of
business and commerce, ban!s have attained an ubiIuitous presence among the
people, "ho have come to regard them "ith respect and even gratitude and, most of
all, confidence$ @/ime, 2nternational G8anilaH, 2nc$ vs. 5ourt of 3ppeals, 7$R$ No$
**'&C, 8arch &), &))', &*C /5R3 C('%$
.owe#er( te award of -0(111(111$11 e'emplar! damages is also far too e'cessi#e
and so%ld likewise "e red%ced to an e7%ita"le le#el$ 6'emplar! damages are imposed
not to enric one part! or impo#eris anoter "%t to ser#e as a deterrent against or as a
negati#e incenti#e to c%r" sociall! deleterio%s actions$
:1
Terefore( "ased on te foregoing disc%ssion( te award of moral damages is
red%ced to - 011(111$11 and te e'emplar! damages is likewise red%ced to
-35(111$11$
Be see no reason to dist%r" te award of attorne!*s fees in te amo%nt of
-51(111$11$ Be conc%r wit te findings of te /o%rt of Appeals on tis matter:
As for te award of attorne!*s fees( Be find te same in order considering tat
defendant acted in gross and e#ident "ad fait in ref%sing to satisf! te plaintiffs plainl!
#alid( &%st and demanda"le claim +Art$ 331< >5?( New /i#il /ode,( and it is &%st and
e7%ita"le to award plaintiff)appellee is attorne!*s fees +Art$ 331< >00?( id.1.
:0
'HEREFORE( premises considered( te assailed decision is ere"! 8ODIFI6D as
follows:
0$ Te award of moral damages is red%ced from -0(111(111$11 to -011(111$11D
and
3$ Te award of e'emplar! damages is red%ced from -0(111(111$11 to -35(111$11$
In all oter respects( te assailed decision is ere"! AFFIR86D$
O OR&ERE&.
Padilla, 0ellosillo, 7itug, and 8ermosisima, 9r., 99., conc%r.
0
TSN( 3 E%l! 0==1( p$ 5$
3
Anne' A( Original Records( p$ #.
:
TSN( 3 E%l! 0==1( p$ '#.
2
-d., at 0G$
5
-d$( at 0<)31$
G
ld., at 30D Anne' D( Original Records( p$ <$
9
-d., at 3:$
<
Original Records( pp$ 0)2$
=
-d., at 33):1$
01
TSN( 3< A%g%st 0==1( p$ 0<$
00
Original Records( pp$ 093)095$
03
+ollo, pp$ :9):<$
0:
/A Decision( +ollo, pp$ :5)25$
02
+ollo, p$ 29$
05
8emorand%m of -etitioner( pp$ G)9$
0G
Si"al( Eose Agaton R$( -ilippine Hegal 6nc!clopedia( 0=<G( pp$ <3=)<:1$
09
Original Records( p$ 09:$
0<
A$R$ No$ H)2012( 3 8a! 0=53$
0=
TSN( 3< A%g%st 0==1( p$ 3=D TSN( 0: 8a! 0==0( p$ 9$
31
Francisco( Ricardo( E$( 6#idence( R%les of /o%rt in te -ilippines( R%les 03<)0:2( 0==: 6dition( p$3$
30
Original Records( pp$ 092)095$
33
+ollo, pp$ 23)2:$
3:
+ollo, p$ <$
32
TSN( 01 E%l! 0==1( pp$ 01)00$
35
0<3 S/RA <== +0==1,D see also De Heon v. /A( 0G5 S/RA 0GG +0=<<,$
3G
De Heon v. /A( 0G5 S/RA 0GG +0=<<,$ Te same r%le was reiterated in Sime' International +8anila,(
Inc$ v. /A( 0<: S/RA :G1 +0==1, and 4a%tista #$ 8angaldan R%ral 4ank( Inc$( 3:1 S/RA 0G+0==2,$
39
Visa!an Sawmill /o$( Inc$ v. /A( 30= S/RA :9< +0==:,D see also -AH v. /A( 33G S/RA 23: +0==:,D De
Heon v. /A( supra: R/-I v. Rodrig%e;( supra.
3<
Visa!an Sawmill /o$( Inc$ v. /A( supra, citing Inelder /orp$ v. /A( 033 S/RA 59G +0=<:,$
3=
3:1 S/RA 0G+0==2,$
:1
8ecenas v. /o%rt of Appeals( 0<1 S/RA <: +0=<=,$
:0
+ollo., pp$ 22)25$