Monday, February 27, 2012

Simex International Inc. vs. CA [G.R. No. 88013 March 19, 1990]

Facts: Simex International is a private corporation engaged in the exportation of food products. It buys these products from various local suppliers and then sells them abroad, particularly in the United States, Canada and the Middle East. Most of its exports are purchased by the petitioner on credit. 

Simex is a depositor of TRB and maintained a checking account in its Cubao branch. Simex maintained an account in the amount of P100,000.00, thus increasing its balance as of that date to P190,380.74. Subsequently, the petitioner issued several (8) checks against its deposit but was surprised to learn later that they had been dishonored for insufficient funds. 

As a consequence, actions on the pending orders of SIMEX with the other suppliers (California Manufacturing Comp., Malabon Longlife Trading Corp., etc.) whose checks were dishonored was deferred. And thus made these companies send demand letters to SIMEX threatening prosecution if the checks were not made good. 

SIMEX complained to TRB and found out that the sum of P100,000.00 deposited had not been credited. The error was rectified on June 17, 1981, and the dishonored checks were paid after they were re-deposited. SIMEX sent demand letter for reparation against TRB, which was not met, thus a complaint was filed in CFI Rizal by SIMEX. The court denied the moral & exemplary damages but upheld and ordered TRB to pay for nominal damages in the amount of P20,000.00 plus attys fees & costs, which was then affirmed by the CA. The CA found with the trial court that the private respondent was guilty of negligence but agreed that the petitioner was nevertheless not entitled to moral damages. It said: 

The essential ingredient of moral damages is proof of bad faith (De Aparicio vs. Parogurga, 150 SCRA 280). Indeed, there was the omission by the defendant-appellee bank to credit appellant's deposit of P100,000.00 on May 25, 1981. But the bank rectified its records. It credited the said amount in favor of plaintiff-appellant in less than a month. The dishonored checks were eventually paid. These circumstances negate any imputation or insinuation of malicious, fraudulent, wanton and gross bad faith and negligence on the part of the defendant-appellant. 

It is this ruling that is faulted in the petition now before us. 

Issue: Whether or not TRB is guilty of negligence which warrants SIMEX reparation for damages. 

Held: YES. Award SIMEX with moral damages (P20,000) and exemplary damages (P50,000). 

The initial carelessness of the respondent bank, aggravated by the lack of promptitude in repairing its error, justifies the grant of moral damages. This rather lackadaisical attitude toward the complaining depositor constituted the gross negligence, if not wanton bad faith, that the respondent court said had not been established by the petitioner. 

There was also prejudice suffered by SIMEX in the fact that the petitioner's credit line was canceled and its orders were not acted upon pending receipt of actual payment by the suppliers. Its business declined. Its reputation was tarnished. Its standing was reduced in the business community. All this was due to the fault of the respondent bank which was undeniably remiss in its duty to the petitioner. 

We shall recognize that the petitioner did suffer injury because of the private respondent's negligence that caused the dishonor of the checks issued by it. The immediate consequence was that its prestige was impaired because of the bouncing checks and confidence in it as a reliable debtor was diminished. 

In the case at bar, it is obvious that the respondent bank was remiss in that duty and violated that relationship. What is especially deplorable is that, having been informed of its error in not crediting the deposit in question to the petitioner, the respondent bank did not immediately correct it but did so only one week later or twenty-three days after the deposit was made. It bears repeating that the record does not contain any satisfactory explanation of why the error was made in the first place and why it was not corrected immediately after its discovery. Such ineptness comes under the concept of the wanton manner contemplated in the Civil Code that calls for the imposition of exemplary damages.

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