PNB vs CA

Posted: April 12, 2017 in case digests, civil law, torts
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PNB vs CA

FACTS

Private respondent Loreto Tan (Tan) is the owner of a parcel of land abutting the national highway in Mandalagan, Bacolod City. Expropriation proceedings were instituted by the government against private respondent Tan and other property owners before the then Court of First Instance of Negros Occidental, Branch IV. Tan filed a motion dated May 10, 1978 requesting issuance of an order for the release to him of the expropriation price of P3 2,480.00. On May 22, 1978, petitioner PNB (Bacolod Branch) was required by the trial court to release to Tan the amount of P32,480.00 deposited with it by the government. On May 24, 1978, petitioner, through its Assistant Branch Manager Juan Tagamolila, issued a managers check for P3 2,480.00 and delivered the same to one Sonia Gonzaga without Tans knowledge, consent or authority. Sonia Gonzaga deposited it in her account with Far East Bank and Trust Co. (FEBTC) and later on withdrew the said amount.

Private respondent Tan subsequently demanded payment in the amount of P32,480.00 from petitioner, but the same was refused on the ground that petitioner had already paid and delivered the amount to Sonia Gonzaga on the strength of a Special Power of Attorney (SPA) allegedly executed in her favor by Tan. When he failed to recover the amount from PNB, private respondent filed a motion with the court to require PNB to pay the same to him. Petitioner filed an opposition contending that Sonia Gonzaga presented to it a copy of the May 22, 1978 order and a special power of attorney by virtue of which petitioner delivered the check to her.

The matter was set for hearing on July 21, 1978 and petitioner was directed by the court to produce the said special power of attorney thereat. However, petitioner failed to do so. The court decided that there was need for the matter to be ventilated in a separate civil action and thus private respondent filed a complaint with the Regional Trial Court in Bacolod City (Branch 44) against petitioner and Juan Tagamolila, PNBs Assistant Branch Manager, to recover the said amount.

In its defense, petitioner contended that private respondent had duly authorized Sonia Gonzaga to act as his agent.

Tagamolila, in his answer, stated that Sonia Gonzaga presented a Special Power of Attorney to him but borrowed it later with the promise to return it, claiming that she needed it to encash the check.

The  trial court rendered judgment ordering petitioner and Tagamolila to pay private respondent jointly and severally the amount of P32,480.00 with legal interest, damages and attorneys fees.

Court of Appeals affirmed the decision of the trial court against petitioner, with the modification that the award of P5,000.00 for exemplary damages and P5,000.00 for attorneys fees by the trial court was deleted.

ISSUE

Whether CA erred in deleting exemplary damages in this case.

RULING

No. As for the award of exemplary damages, the court agree with the appellate court that the same should be deleted.

 

Under Art. 2232 of the Civil Code, exemplary damages may be awarded if a party acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. However, they cannot be recovered as a matter of right; the court has yet to decide whether or not they should be adjudicated.

 

Jurisprudence has set down the requirements for exemplary damages to be awarded:

  1. they may be imposed by way of example in addition to compensatory damages, and only after the claimants right to them has been established;
  2. they cannot be recovered as a matter of right, their determination depending upon the amount of compensatory damages that may be awarded to the claimant;
  3. the act must be accompanied by bad faith or done in a wanton, fraudulent, oppressive or malevolent manner.9

 

In the case at bench, while there is a clear breach of petitioners obligation to pay private respondents, there is no evidence that it acted in a fraudulent, wanton, reckless or oppressive manner. Furthermore, there is no award to compensatory damages which is a prerequisite before exemplary damages may be awarded. Therefore, the award by the trial court of P5,000.00 as exemplary damages is baseless.

 

WHEREFORE, the decision of the Court of Appeals is AFFIRMED with the modification that the award by the Regional Trial Court of P5,000.00 as attorneys fees is REINSTATED.

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