G.R. No. L-8706. December 14, 1956

These are two appeals from  one and the same decision of the Court of First Instance of Negros Oriental, in civil case No. 2678 thereof.

On  Febraury 13, 1952, the same was instituted by the Philippine  National Bank,  for  the recovery  of  two  promissory notes of defendant Julian L.  Teves, in the aggregate  sum of P3,130.00, plus  attorney’s  fees and costs. Simultaneously, plaintiff filed a verified ex parte motion for a writ of preliminary attachment, which was granted by the court the next day.  In  due course,  defendant  filed an answer alleging that the  sum of money  delivered to him by  the plaintiff  consisted  of valueless  notes,  which were not legal tender, and  setting up a  counter-claim for P20,000.00, for moral damages on account of the allegations of said ex parte motion, which were branded as defamatory and absolutely false.  After appropriate proceedings,  decision was  rendered, the dispositive part  of  which is of the following tenor:

“Premises considered, the Court  hereby holds and so orders: “(1)  For the defendant Mr. Julian L. Teves to  pay to .the plaintiff, thru the Iatter’s Negros Oriental Agency with office in  Dumar guete  City, the following  amounts: One thousand  four hundred eighty-nine pesos (Pl,489.00) in full payment of the loan of P3,130.00 released in emergency notes; Twenty pesos (P20.00)  for the filing fees; and One hundred forty-eight and 90/100 pesos (P148.90) as attorney’s fees  in  accordance with the  promissory notes  signed by defendant;

“(2)  For the dismissal  of the  counter-claim of  defendant for moral damages of P20,000.00;

“(3)  For the dismissal of the claim of Pl,000.00 by defendant for attorney’s fees, said defendant having caused the bringing of this action by reason of his refusal to pay unless so ordered by the Court.

“No  pronouncement  is made  as to the  expenses  incurred by plaintiff in relation to the attachment of defendant’s properties, said attachment being unfounded and unjustified.”

Both parties have appealed  from said decision and the questions for determination  by this  Court are: (1) whether the sums of money received by the defendant from the plaintiff were legal tender or not;  (2)  in  the  affirmative case,  what  amount is due from the defendant under his aforementioned promissory notes;  and  (3)  whether the defendant should recover  moral damages from  the plaintiff.

With reference to the first question, defendant testified that the consideration for his aforementioned  promissory notes  was   paid  to him by the  plaintiff in  emergency currency, which  the people  in the mountains, where he and his family stayed, for some time, refused  to receive, and  that part of  said  notes  were  destroyed, when  his house was  consumed by fire.   The lower court found correctly  that, this  notwithstanding, defendant is bound to comply with the obligation  set forth in  said  promissory notes.   Indeed, his promissory note Exhibit C, for P2,235.00, is dated April 23,  1942.  His  other  promissory note Exhibit D, for  P895.00, is dated May 18, 1942.  At  that time, the province of Negros Oriental was still  unoccupied by the Japanese, who  landed  therein on May 26,  1942. Hence, it is  not claimed that the  amounts  represented by said promissory notes were paid by the plaintiff in Japanese military notes.  What is more, the very defendant testified that said payment was  made in “emergency notes”, referring to the currency which the  officers  of the Commonwealth  in unoccupied areas were  authorized to issue by President Quezon before he left the  Philippines in 1942. Said emergency notes were then valid and legal tender.  Otherwise, the same would not have been accepted by the defendant.  In the language of the lower court:

* * * That these  so-called ‘Emergency Notes’  were  valid and can be implied further from the fact that immediately after liberation, the President of the Commonwealth issued an  Executive Order No. 25, dated November 18, 1944, which prohibited  the further use and circulation of such kind of ‘notes’ from said date (see Monde jar vs. Nicolo, 43 Off.  Gaz.  No. 12, 5099; De Asis vs. Melendreras et al., C.A. 44  Off.  Gaz. No. 9, 3327).  Moreover, the fact that the government redeemed  such ‘Emergency Notes’ under the  provisions of Republic  Act  No.  369 in  relation to Republic  Act  No. 22, is additional  proof  that the said. ‘Notes’ were  considered  as legal tender at the time that  they were  printed  and issued.”   (Record on Appeal, p. 17.)   (Italics supplied.)

Obviously, the  alleged refusal of some people to receive said emergency notes  from the  defendant and the alleged destruction thereof, while in his posession, by fire, affects neither the validity of the promissory notes in question, nor plaintiffs right to demand payment thereof. The second question was  decided by the lower court in the light of the spirit of Republic Act No. 369, entitled “An Act  providing for the redemption of emergency and guerrilla currency notes registered and  deposited under the provisions of Republic Act Numbered Twenty-two, appropriating funds therefor, and for other  purposes.”  Applying paragraph  (6) of section 1 of said Act, reading:

“For holders of the following registered post-guerrilla  notes one hundred per centum  for  the first five hundred pesos;  fifty per centum for  all amounts  in excess  of  five  hundred pesos up  to one thousand pesos; thirty per centum for  all  amounts  in excess of one thousand pesos up to  ten thousand pesos;  and fifteen per centum for all amounts in excess of ten thousand  pesos, with pre ference to the payment in favor of holders of small amounts.”

the lower court concluded that P3,130  in emergency notes is equivalent to P1,489 in present currency and sentenced the defendant to pay  this sum to the plaintiff.

Both parties concede the applicability of said Act  of Congress,  but defendant  assails the computation  of the lower court as  erroneous, and asserts that the  amount collectible by the plaintiff is Pl,389 only, whereas the latter contends that, instead of invoking subdivision (b) of section 1 of Republic  Act No. 369, the lower court should have applied subdivision  (a)  of the same section, pursuant to which  holders of emergency currency issues shall  be paid in post liberation  currency at the rate of one hundred (100%) per centum.

It is, however, clear from  the  language of  said subdivision  (b)  of section 1, that the same refers to holders of “guerrilla” notes, to which class those received by  the defendant from the plaintiff did not belong.  As  already adverted to, the promissory notes in question were issued, and the consideration therefor  was received by the defendant from the plaintiff, prior to the military occupation of Negros Oriental by the Japanese.  At that time, there could have been, and there were, neither guerrillas, nor  guerilla notes,  in Negros Oriental.   What is more, defendant’s evidence positively shows that said consideration was delivered to the defendant in “emergency” notes, which  are  the subject-matter of subdivision (a) of section 1, pursuant to which  “holders of * * * emergency currency issues” shall be paid at the rate of “one hundred (100%) per centum“. Obviously, therefore, the plaintiff is entitled to recover the face value  of  the said notes,  or  the  aggregate  sum  of P3,130.00 in present currency.

The lower court decided the third question in favor of the plaintiff and against the defendant upon the ground; (a) that, by his inaction, the latter had waived his objection to the  irregularity in the issuance of the writ of preliminary attachment; (b) that, under the facts of the case, defendant would be entitled only to actual damages, which have  not been proven; and (c) that the false  and defamatory  character of the allegations in plaintiff’s ex parte  motion for a writ of preliminary  attachment, do not warrant a recovery of moral damages, said motion being in  the nature of a privileged communication.

Said motion of the plaintiff was granted because of the averment  therein to  the effect “that  the defendant  has removed or; disposed of  his properties, and is about to do  so, with intent to defraud his creditors,  especially the plaintiff herein”.  Defendant established by his testimony, which has not been  contradicted,  that this allegation is not true.   Moreover,  it appears that the defendant is the owner of  extensive  lands and has a sugar quota of about 20,000  piculs  a year; that he had been municipal mayor and provincial governor for  several terms that  he was a member of  Congress  once; and that he is a prominent member of the community, which regards him with great respect.  We  note,  however, that the  main allegation in his counter-claim relative to the moral damages he seeks to recover is:

3. “That  the  foregoing allegations by  plaintiff  in  its  aforesaid motion ex parte for the issuance of a writ of preliminary attachment,  are defamatory and absolutely false, and have no foundation of truth whatsoever,  plaintiff knowing  them to  be  false;  have greatly embarrassed and hurt defendant’s position in the  social, political and business  world;  have exposed  and placed  defendant to public ridicule; and! have caused him great and  extreme mental anguish and moral suffering, to the value of not less than Twenty thousand pesos  (P20,000.00).

4. “That  to  defend  defendant’s honor and for  the purpose of securing the present redress  for the wrong done him  by plaintiff, defendant has to secure  attorney’s services at P1,000.00.”

Upon the other hand, testifying thereon,  he said:

“R.  Una  manana, se  me  acerc6—no  se,  no  le  he  conocido, que es encargado del  Sheriff—me hablo  sobre esa cuenta y juntamente dijo, “Esa casa voy a embargar.’  Le pregunte, ‘Que cuenta es esa?’; me contesto, ‘Esta cuenta del banco.’  Le dije, ‘Mejor que se aclare esto ante los tribunales.”  Entonces, me  acerco el driver y me  dijo que iba  a embargar  mi automovil.  Entonces, dije, ‘No lo toque el  coche; porque si  no, a  ver  si ocurre  algo, no  ya  a punetazoes  sino  que lo llevare a  los tribunales.’  Entonces, cogi el coche y me marche y nadia mas me ha molestado” (p.  22, ten.)  (Italics  supplied.)

In other words, defendant’s answer relies upon the falsity of the averments in plaintiff’s motion as the cause for his alleged mental anguish and moral suffering, whereas his testimony  stresses  the embarrassment occasioned by the alleged attempt of a deputy sheriff to attach a  car of the defendant.  It will  be observed,  also, that a  driver (defendant  did not say whose  driver  he  was), merely told him that said officer wanted to levy attachment upon defendant’s car.  It does not appear that the deputy sheriff had conveyed such  intent, either to the defendant or to said driver, who was not placed on the witness stand and might have simply jumped at a conclusion, the accuracy of which  we are not in a position to verify.  Again, the record does not disclose any overt act of said  officer to seize the aforementioned car.  In fact, defendant drove it away without being molested, either then, or at any time thereafter.

Considering, therefore, that defendant appears to have suffered no actual damages;  that the assessment of moral damages “is left to  the discretion of the court, according to the circumstances of each case.”  (Art. 2216, Civil Code of the Philippines); that the writ of preliminary attachment was never executed;  that we  do not know  what specific acts, if any, were performed by the deputy sheriff in his alleged  attempt  to levy attachment upon the car of defendant herein; that  his debts to the plaintiff  drew no interest whatsoever; and that said  debts had been outstanding for about  ten  (10) years,  when this  case was filed,  and about thirteen  (13)  years, when the .decision appealed from was rendered, we are not prepared to hold that the  lower court had erred, or  abused its discretion, in not sentencing  the plaintiff  to pay moral damages.

Wherefore, with the  modification that defendant  shall pay to the plaintiff  the sum of P3,130.00 in present currency, plus P313.00 by way of attorney’s fees, the decision appealed from is  hereby affirmed, in all other  respects, with the  costs of  both instances against  the defendant. It is so ordered.

Paras,  C.  J., Bengzon, Padilla,  Montemayor, Bautista Angelo, Labrador, Reyes, J. B. L., Endencia, and Felix, JJ., concur.