THE MANILA BANKING CORPORATION, PETITIONER, VS. INTERMEDIATE APPELLATE COURT AND WILFREDO J. RIVERA, RESPONDENTS.

Appeal from the judgment of the Intermediate Appellate Court in AC-G.R.
CV No. 64721, entitled: Wilfredo J. Rivera, plaintiff-appellee vs. The
Manila Banking Corporation, defendant-appellant, which reads:

“WHEREFORE, except as modified in the sense that the award of
actual damage in the sum of P75,000.00 be eliminated and instead the sum
of Ten Thousand (P10,000.00) Pesos be awarded as temperate damage and
the reduction of the award of attorney’s fees to the sum of Fifteen
Thousand (P15,000.00) Pesos, the decision is affirmed in toto in all other respects.

Costs against the appellant.”

(page 28, rollo).

Records show that in the morning of July 10, 1975 herein private
respondent Wilfredo J. Rivera deposited with petitioner bank the sum of
P80,189.19. In the afternoon of the same day, private respondent Rivera
issued a Manila Banking Corporation Check No. 16756626 in the amount of
P80,000.00 under Current Account No. 6-05350-5 payable to Collins
Philippines with whom he had a business transaction. Thereafter,
private respondent’s wife received a letter of demand from Collins
Philippines, dated July 15, 1975, saying that –

“Quite frankly, we are surprised why this has to happen
considering our pleasant business relationship in the past and the
representations and commitments you made to us prior to the issuance of
the above check. At any rate, just to be sure, we are redepositing the
same check with the fair warning that if the said check will again be
dishonored, we shall close our business dealings and institute proper
action for the protection of our interest.” (p. 26, rollo).

His wife immediately informed him in the province about the letter of
demand. Upon receipt of the message, Mr. Rivera complained to the
Public Relations Officer of petitioner bank, inviting attention to the
letter received by him from Collins Philippines complaining against the
dishonor of his check. The Public Relations Officer of the bank, upon
investigation, found that the money deposited was credited into another
account and that was the reason why the check issued by him could not be
encashed upon presentation.

As a consequence, private respondent claimed that he suffered
humiliation and embarrassment due to the bank’s gross negligence.
Complaint was filed in court which awarded private respondent damages,
as follows:

“1) P75,000.00 as actual damages, to compensate plaintiff for the loss of business and business opportunities;

2) P25,000.00 as moral damages, to compensate plaintiff for the embarrassment, humiliation and mental anguish suffered;

3) P10,000.00 as exemplary damages;

4) P25,000.00 as and for attorney’s fees; and

5) Cost of suit.”

(pages 25-26, rollo).

On appeal to the Intermediate Appellate Court, the judgment of the trial court was modified in the sense that –

“x x x the award of actual damage in the sum of P75,000.00 be
eliminated and instead the sum of Ten Thousand (P10,000.00) Pesos be
awarded as temperate damage and the reduction of the award of attorney’s
fees to the sum of Fifteen Thousand (P15,000.00) Pesos, the decision is
affirmed in toto in all other respects.” (page 28, rollo).

Upon the foregoing facts, respondent court ruled that –

“The award for actual damages has no factual basis. How the sum
of P75,000.00 in the form of actual and compensatory damages was arrived
at, was not at all shown by any means before the Court a quo.
While actual damages may have been suffered, the law requires that such
damages be proven by facts and figures. Indeed, while the appellee
overlooked pre­senting adequate proof of actual and compensatory
damages, We, however, find and so hold that there may indeed have been
actual damages although the amount thereof was not established. We
merely award the sum of P10,000.00 in the form of temperate damage in
favor of the appellee.

“The appellant belittle the negligence of the bank especially so
since the appellee’s check was ultimately encashed. The argument is
specious. It does not require too much imagination to visualize the
possibility that the appellee could have died right after the deposit
was made. Then the appellee could not have issued the check in
question. The appellee could not have complained to the appellant about
his check that was dishonored. The Bank may not have known about the
wrong entry to the irreparable loss of the appellee. Indeed, the
appellee is entitled to temperate damage.

“Regarding the award of attor­ney’s fees, we find no reason to
disturb it except as to the amount awarded which We find quite
exorbitant and which We accordingly reduce to the sum of P15,000.00.
Appellee is ob­viously entitled to it. (Art. 2208, New Civil Code)

“We, however, find no merit in the challenge against the award for
moral and exemplary damages. The ap­pellant argues that no moral
damage should have been awarded because no court action was taken by
Collins Philippines against the appellee for issuing a check that was
dishonored. Moreover, the check was encashed the second time it was
presented. This being so, whatever warning or threat the Collins’
letter posed the same was rendered moot and academic when the check was
ultimately honored. We do not agree. When the Collins’ letter (Exhibit
“C”) was received by the appellee, the latter immediately felt
embarrassed and humiliated. The mere fact that the check was honored
afterwards, did not repair the harm done. It may have only mitigated
it.

“Insofar as the award for the exemplary damage is concerned,
suf­fice it to say that Banks are re­quired to safeguard public interest
as mandated by Banking Laws, practices and procedure. They are called
upon to protect the faith of the people in the banking system. The bank
was remiss with its sworn duty. The Court a quo correctly awarded the sum of P10,000.00 by way of exemplary damages.” (pp. 27-28, rollo).

It is the submission of petitioner that (1) there is no evidence on
record to support an award of temperate damages in favor of respondent
Rivera; (2) pri­vate respondent is not entitled to moral damages because
his credit and business standing was not impaired and he did not suffer
serious anxiety and/or mental anguish; and (3) petitioner should not be
made to pay exemplary damages, attorney’s fees and the costs of suit.

It will be noted that in respondent appellate court’s decision, judgment
was rendered eliminating the award of actual damages and, instead, the
amount of P10,000.00 was awarded the private respondent by way of
temperate damages and attorney’s fees in the reduced amount of
P15,000.00, and affirming the lower court’s decision in all other
respects. This would mean that the amount of P25,000.00 as moral
damages and P10,000.00 as exemplary damages still stay.

We agree with petitioner that private respondent is not entitled to
moral damages considering that in a matter of four hours the mistake was
rectified and the payee, Collins Philippines, was paid the full amount
of the check. In the case of Singson vs. Bank of Philippine Island, 23
SCRA 1117, the plaintiffs commenced the action against the bank and its
President, Santiago Freixas, for damages (P100,000.00 as moral damages,
P20,000.00 as exemplary damages, P20,000.00 as nominal damages, and
P10,000.00 for attorney’s fees and expenses of litigation, plus the
costs) in consequence of illegal freezing of plaintiffs’ account. This
Court held that since “the wrong done to the plaintiffs was remedied as
soon as the President of the bank realized the mistake he and his
subordinate employee had committed, the Court finds that an award of
nominal damages – the amount of which need not be proven – in the sum of
P1,000.00, in addition to attorney’s fees in the sum of P500.00, would
suffice to vindicate plaintiffs’ rights.”

In the case at bar, temperate or moderate damages are proper not for
indemnification of loss suffered but for the vindication or recognition
of a right violated or invaded. Considering the facts of the case under
appeal, the sum of P5,000.00 as temperate or moderate damages would
suffice, plus attorney’s fees of P5,000.00.

WHEREFORE, the judgment appealed from is modified in the sense that
petitioner bank is hereby sentenced to pay private respondent Wilfredo
J. Rivera the sums of P5,000.00, as temperate or moderate damages and
P5,000.00, as attorney’s fees, apart from the costs.

SO ORDERED.

Teehankee, Acting C.J., Melencio-Herrera, Plana, Gutierrez, Jr., and De La Fuente, JJ., concur.