SECOND DIVISION
UNITED COCONUT
PLANTERS
BANK,
Petitioner,
G.R.
No.
147800
November 11, 2003
-versus-
TEOFILO C. RAMOS,
Respondent.
D E C I S I O N
CALLEJO,
SR., J.:
Before us is a Petition
for Review on
Certiorari of
the March 30, 2001 Decision[1]
of the Court of Appeals in CA-G.R. CV No. 56737 which affirmed the
Decision[2]
of the Regional Trial Court (RTC) of Makati City, Branch 148, in Civil
Case No. 94-1822. chanrobles virtuallaw libraryred
The Antecedents
On December 22, 1983,
the petitioner United Coconut Planters Bank (UCPB) granted a loan of
P2,800,000
to Zamboanga Development Corporation (ZDC) with Venicio Ramos and the
Spouses
Teofilo Ramos, Sr. and Amelita Ramos as sureties. Teofilo Ramos, Sr.
was
the Executive Officer of the Iglesia ni Cristo. In March 1984, the
petitioner
granted an additional loan to ZDC, again with Venicio Ramos and the
Spouses
Teofilo Ramos and Amelita Ramos as sureties.[3]
However, the ZDC failed to pay its account to the petitioner despite
demands.
The latter filed a complaint with the RTC of Makati against the ZDC,
Venicio
Ramos and the Spouses Teofilo Ramos, Sr. for the collection of the
corporation's
account. The case was docketed as Civil Case No. 16453. On February 15,
1989, the RTC of Makati, Branch 134, rendered judgment in favor of the
petitioner and against the defendants. The decretal portion of the
decision
reads:chanrobles virtuallaw libraryred
1. To pay
plaintiff
the sum of THREE MILLION ONE HUNDRED FIFTY THOUSAND PESOS
(P3,150,000.00)
plus interest, penalties and other charges;
2. To pay
plaintiff
the sum of P20,000.00 for attorney's fees; and
3. To pay the cost
of
suit.[4]
The decision became
final
and executory. On motion of the petitioner, the court issued on
December
18, 1990 a writ of execution for the enforcement of its decision
ordering
Deputy Sheriff Pioquinto P. Villapaña to levy and attach all the
real and personal properties belonging to the aforesaid defendants to
satisfy
the judgment.[5]
In the writ of execution, the name of one of the defendants was
correctly
stated as Teofilo Ramos, Sr.chanrobles virtuallaw libraryred
To help the Sheriff
implement the writ, Atty. Cesar Bordalba, the head of the Litigation
and
Enforcement Division (LED) of the petitioner, requested Eduardo C.
Reniva,
an appraiser of the petitioner's Credit and Appraisal Investigation
Department
(CAID) on July 17, 1992 to ascertain if the defendants had any leviable
real and personal property. The lawyer furnished Reniva with a copy of
Tax Declaration B-023-07600-R covering a property in Quezon City.[6]
In the course of his investigation, Reniva found that the property was
a residential lot, identified as Lot 12, Block 5, Ocampo Avenue, Don
Jose
Subdivision, Quezon City, with an area of 400 square meters, covered by
TCT No. 275167 (PR-13108) under the name of Teofilo C. Ramos, President
and Chairman of the Board of Directors of the Ramdustrial Corporation,
married to Rebecca F. Ramos.[7]
The property was covered by Tax Declaration No. B-023-07600-R under the
names of the said spouses. Reniva went to the property to inspect it
and
to verify the identity of the owner thereof. He saw workers on the
property
constructing a bungalow.[8]
However, he failed to talk to the owner of the property. Per
information
gathered from the neighborhood, Reniva confirmed that the Spouses
Teofilo
C. Ramos and Rebecca Ramos owned the property.chanrobles virtuallaw libraryred
On July 22, 1992, Reniva
submitted a report on his appraisal of the property. He stated therein
that the fair market value of the property as of August 1, 1992 was
P900,000
and that the owner thereof was Teofilo C. Ramos, married to Rebecca
Ramos.
When appraised by the petitioner of the said report, the Sheriff
prepared
a notice of levy in Civil Case No. 16453 stating, inter alia, that the
defendants were Teofilo Ramos, Sr. and his wife Amelita Ramos and
caused
the annotation thereof by the Register of Deeds on the said title.[9]chanrobles virtuallaw libraryred
Meanwhile, in August
of 1993, Ramdustrial Corporation applied for a loan with the UCPB, a
sister
company of the petitioner, using the property covered by TCT No. 275167
(PR-13108) as collateral therefor. The Ramdustrial Corporation intended
to use the proceeds of the loan as additional capital as it needed to
participate
in a bidding project of San Miguel Corporation.[10]
In a meeting called for by the UCPB, the respondent was informed that
upon
verification, a notice of levy was annotated in TCT No. 275167 in favor
of the petitioner as plaintiff in Civil Case No. 16453, entitled United
Coconut Planters Bank v. Zamboanga Realty Development Corporation,
Venicio
A. Ramos and Teofilo Ramos, Sr., because of which the bank had to hold
in abeyance any action on its loan application. chanrobles virtuallaw libraryred
The respondent was shocked
by the information. He was not a party in the said case; neither was he
aware that his property had been levied by the sheriff in the said
case.
His blood temperature rose so much that immediately after the meeting,
he proceeded to his doctor, Dr. Gatchalian, at the St. Lukes Medical
Center,
who gave the respondent the usual treatment and medication for
cardio-vascular
and hypertension problems.[11]chanrobles virtuallaw libraryred
Upon advise from his
lawyer, Atty. Carmelito Montano, the respondent executed an affidavit
of
denial[12]
declaring that he and Teofilo Ramos, Sr., one of the judgment debtors
in
Civil Case No. 16453, were not one and the same person. On September
30,
1993, the respondent, through counsel, Atty. Carmelito A. Montano,
wrote
Sheriff Villapaña, informing him that a notice of levy was
annotated
on the title of the residential lot of the respondent, covered by TCT
No.
275167 (PR-13108); and that such annotation was irregular and unlawful
considering that the respondent was not Teofilo Ramos, Sr. of Iglesia
ni
Cristo, the defendant in Civil Case No. 16453. He demanded that Sheriff
Villapaña cause the cancellation of the said annotation within
five
days from notice thereof, otherwise the respondent would take the
appropriate
civil, criminal or administrative action against him. Appended thereto
was the respondent's affidavit of denial. For his part, Sheriff
Villapaña
furnished the petitioner with a copy of the said letter.cralaw:red
In a conversation over
the phone with Atty. Carmelito Montano, Atty. Cesar Bordalba, the head
of the petitioner's LED, suggested that the respondent file the
appropriate
pleading in Civil Case No. 16453 to prove his claim that Atty.
Montano's
client, Teofilo C. Ramos, was not defendant Teofilo Ramos, Sr., the
defendant
in Civil Case No. 16453.cralaw:red
On October 21, 1993,
the respondent was informed by the UCPB that Ramdustrial Corporation's
credit line application for P2,000,000 had been approved.[13]
Subsequently, on October 22, 1993, the respondent, in his capacity as
President
and Chairman of the Board of Directors of Ramdustrial Corporation, and
Rebecca F. Ramos executed a promissory note for the said amount payable
to the UCPB in installments for a period of 180 days.[14]
Simultaneously, the respondent and his wife Rebecca F. Ramos acted as
sureties
to the loan of Ramdustrial Corporation.[15]
However, the respondent was concerned because when the proceeds of the
loan were released, the bidding period for the San Miguel Corporation
project
had already elapsed.[16]
As business did not go well, Ramdustrial Corporation found it difficult
to pay the loan. It thus applied for an additional loan with the UCPB
which
was, however, denied. The corporation then applied for a loan with the
Planters Development Bank (PDB), the proceeds of which would be used to
pay its account to the UCPB. The respondent offered to use his property
covered by TCT No. 275167 as collateral for its loan. PDB agreed to pay
off the outstanding loan obligation of Ramdustrial Corporation with
UCPB,
on the condition that the mortgage with the latter would be released.
UCPB
agreed. Pending negotiations with UCPB, the respondent discovered that
the notice of levy annotated on TCT No. 275167 (PR-13108) at the
instance
of the petitioner had not yet been cancelled.[17]
When apprised thereof, PDB withheld the release of the loan pending the
cancellation of the notice of levy. The account of Ramdustrial
Corporation
with UCPB thus remained outstanding. The monthly amortization on its
loan
from UCPB became due and remained unpaid. When the respondent went to
the
petitioner for the cancellation of the notice of levy annotated on his
title, the petitioner's counsel suggested to the respondent that he
file
a motion to cancel the levy on execution to enable the court to resolve
the issue. The petitioner assured the respondent that the motion would
not be opposed. Rather than wait for the petitioner to act, the
respondent,
through counsel, filed the said motion on April 8, 1994. As promised,
the
petitioner did not oppose the motion. The court granted the motion and
issued an order on April 12, 1994 ordering the Register of Deeds to
cancel
the levy. The Register of Deeds of Quezon City complied and cancelled
the
notice of levy.[18]chanrobles virtuallaw libraryred
Despite the cancellation
of the notice of levy, the respondent filed, on May 26, 1994, a
complaint
for damages against the petitioner and Sheriff Villapaña before
the RTC of Makati City, raffled to Branch 148 and docketed as Civil
Case
No. 94-1822. Therein, the respondent (as plaintiff) alleged that he was
the owner of a parcel of land covered by TCT No. 275167; that Teofilo
Ramos,
Sr., one of the judgment debtors of UCPB in Civil Case No. 16453, was
only
his namesake; that without any legal basis, the petitioner and Sheriff
Villapaña caused the annotation of a notice to levy on the TCT
of
his aforesaid property which caused the disapproval of his loan from
UCPB
and, thus made him lose an opportunity to participate in the bidding of
a considerable project; that by reason of such wrongful annotation of
notice
of levy, he suffered sleepless nights, moral shock, mental anguish and
almost a heart attack due to high blood pressure. He thus
prayed: chanrobles virtuallaw libraryred
WHEREFORE,
premises considered, it is most respectfully prayed of the Honorable
Regional
Trial Court that after due hearing, judgment be rendered in his favor
by
ordering defendants jointly and severally, to pay as follows:chanrobles virtuallaw libraryred
1.
P3,000,000.00
as moral damages;chanrobles virtuallaw libraryred
2. 300,000.00 as
exemplary
damages;chanrobles virtuallaw libraryred
3. 200,000.00 as
actual
damages;chanrobles virtuallaw libraryred
4. 200,000.00 as
attorney's
fees;chanrobles virtuallaw libraryred
5. Cost of suit.[19]chanrobles virtuallaw libraryred
In its answer, the
petitioner,
while admitting that it made a mistake in causing the annotation of
notice
of levy on the TCT of the respondent, denied that it was motivated by
malice
and bad faith. The petitioner alleged that after ascertaining that it
indeed
made a mistake, it proposed that the respondent file a motion to cancel
levy with a promise that it would not oppose the said motion. However,
the respondent dilly-dallied and failed to file the said motion;
forthwith,
if any damages were sustained by the respondent, it was because it took
him quite a long time to file the motion. The petitioner should not
thus
be made to suffer for the consequences of the respondent's delay.chanrobles virtuallaw libraryred
The petitioner
further
asserted that it had no knowledge that there were two persons bearing
the
same name Teofilo Ramos; it was only when Sheriff Villapaña
notified
the petitioner that a certain Teofilo C. Ramos who appeared to be the
registered
owner of TCT No. 275167 that it learned for the first time the notice
of
levy on the respondent's property; forthwith, the petitioner held in
abeyance
the sale of the levied property at public auction; barred by the
failure
of the respondent to file a third-party claim in Civil Case No. 16453,
the petitioner could not cause the removal of the levy; in lieu
thereof,
it suggested to the respondent the filing of a motion to cancel levy
and
that the petitioner will not oppose such motion; surprisingly, it was
only
on April 12, 1994 that the respondent filed such motion; the petitioner
was thus surprised that the respondent filed an action for damages
against
it for his failure to secure a timely loan from the UCPB and PDB. The
petitioner
thus prayed:chanrobles virtuallaw libraryred
WHEREFORE,
in view of the foregoing premises, it is respectfully prayed of this
Honorable
Court that judgment be rendered in favor of defendant UCPB, dismissing
the complaint in toto and ordering the plaintiff to:chanrobles virtuallaw libraryred
1. pay
moral
damages in the amount of PESOS: THREE MILLION P3,000,000.00 and
exemplary
damages in the amount of PESOS: FIVE HUNDRED THOUSAND P500,000.00;chanrobles virtuallaw libraryred
2. pay
attorney's fees
and litigation expenses in an amount of not less than PESOS: TWO
HUNDRED
THOUSAND P200,000.00;
Other reliefs and
remedies
deemed just and equitable under the premises are also prayed for.[20]
In the meantime, in
1995,
PDB released the proceeds of the loan of Ramdustrial Corporation which
the latter remitted to UCPB.
On March 4, 1997, the
RTC rendered a decision in favor of the respondent. The complaint
against
Sheriff Villapaña was dismissed on the ground that he was merely
performing his duties. The decretal part of the decision is herein
quoted:chanrobles virtuallaw libraryred
WHEREFORE,
premises considered, judgment is hereby rendered in favor of the
plaintiff
and against the defendant UCPB, and the latter is hereby ordered to pay
the following:chanrobles virtuallaw libraryred
(1)
P800,000.00
as moral damages; chanrobles virtuallaw libraryred
(2) P100,000.00 as
exemplary damages;chanrobles virtuallaw libraryred
(3) P100,000.00 as
attorney's fees;chanrobles virtuallaw libraryred
(4) Cost of suit.[21]chanrobles virtuallaw libraryred
The trial court found
that
contrary to the contention of the petitioner, it acted with caution in
looking for leviable properties of the judgment debtors/defendants in
Civil
Case No. 16453, it proceeded with haste as it did not take into
consideration
that the defendant Teofilo Ramos was married to Amelita Ramos and had a
"Sr." in his name, while the respondent was married to Rebecca Ramos
and
had "C" for his middle initial. The investigation conducted by CAID
appraiser
Eduardo C. Reniva did not conclusively ascertain if the respondent and
Teofilo Ramos, Sr. were one and the same person.chanrobles virtuallaw libraryred
The trial court
further
stated that while it was Ramdustrial Corporation which applied for a
loan
with UCPB and PDB, the respondent, as Chairman of Ramdustrial
Corporation,
with his wife Rebecca Ramos signed in the promissory note and acted as
sureties on the said obligations. Moreover, the property which was
levied
was the respondent's only property where he and his family resided.
Thus,
the thought of losing it for reasons not of his own doing gave rise to
his entitlement to moral damages.chanrobles virtuallaw libraryred
The trial court
further
ruled that the mere fact that the petitioner did not file an opposition
to the respondent's motion to cancel levy did not negate its negligence
and bad faith. However, the court considered the cancellation of
annotation
of levy as a mitigating factor on the damages caused to the respondent.
For failure to show that he suffered actual damages, the court a quo
dismissed
the respondent's claim therefor.chanrobles virtuallaw libraryred
Dissatisfied, the
petitioner
interposed an appeal to the Court of Appeals (CA). On March 30, 2001,
the
CA rendered a decision affirming, in toto, the decision of the trial
court,
the decretal portion of which is herein quoted:chanrobles virtuallaw libraryred
WHEREFORE,
based on the foregoing premises, the assailed decision is hereby
AFFIRMED.[22]
The CA ruled that the
petitioner
was negligent in causing the annotation of notice of levy on the title
of the petitioner for its failure to determine with certainty whether
the
defendant Teofilo Ramos, Sr. in Civil Case No. 16453 was the registered
owner of the property covered by TCT No. 275167, and to inform the
sheriff
that the registered owners of the property were the respondent and his
wife Rebecca Ramos, and thereafter request for the cancellation of the
motion of levy on the property.chanrobles virtuallaw libraryred
Disappointed, the
petitioner
filed this instant petition assigning the following errors:
I
IN AFFIRMING THE
TRIAL
COURT'S ORDER, THE COURT OF APPEALS COMMITTED MANIFESTLY MISTAKEN
INFERENCES
AND EGREGIOUS MISAPPREHENSION OF FACTS AND GRAVE ERRORS OF LAW,
CONSIDERING
THAT:chanrobles virtuallaw libraryred
A. ON THE
EVIDENCE,
THE BORROWER OF THE LOAN, WHICH RESPONDENT RAMOS CLAIMED HE TRIED TO
OBTAIN,
WAS RAMDUSTRIAL CORPORATION. HENCE, ANY DAMAGE RESULTING FROM THE
ANNOTATION
WAS SUFFERED BY THE CORPORATION AND NOT BY RESPONDENT RAMOS.chanrobles virtuallaw libraryred
B. THE DELAY IN
THE
CANCELLATION OF THE ANNOTATION WAS OF RESPONDENT RAMOS'S (SIC) OWN
DOING.
C. THE LOAN
APPLICATIONS
WITH UNITED COCONUT SAVINGS BANK AND PLANTERS DEVELOPMENT BANK WERE
GRANTED
PRIOR TO THE CANCELLATION OF THE ANNOTATION ON THE TITLE OF THE SUBJECT
PROPERTY. chanrobles virtuallaw libraryred
II
THE COURT OF
APPEALS'
DECISION AFFIRMING THE TRIAL COURT'S AWARD OF MORAL DAMAGES TO
RESPONDENT
RAMOS IN THE AMOUNT OF P800,000 ON A FINDING OF NEGLIGENCE IS CONTRARY
TO LAW AND EVIDENCE.chanrobles virtuallaw libraryred
A. UCPB
WAS
NOT NEGLIGENT WHEN IT CAUSED THE LEVY ON THE SUBJECT PROPERTY.
B. AS A MATTER
OF LAW,
MORAL DAMAGES CANNOT BE AWARDED ON A FINDING OF MERE NEGLIGENCE.
C. IN ANY EVENT,
THE
AWARD OF MORAL DAMAGES TO RESPONDENT RAMOS WAS UNREASONABLE AND
OPPRESSIVE. III
THE AWARD OF
EXEMPLARY
DAMAGES AND ATTORNEY'S FEES IS CONTRARY TO LAW SINCE THE AWARD OF MORAL
DAMAGES WAS IMPROPER IN THE FIRST PLACE.[23]chanrobles virtuallaw libraryred
UCPB prayed that:
WHEREFORE,
petitioner UNITED COCONUT PLANTERS BANK respectfully prays that this
Honorable
Court render judgment reversing and setting aside the Court of Appeals'
Decision dated 30 March 2001, and ordering the dismissal of respondent
Ramos' Complaint dated 05 May 1994.[24]chanrobles virtuallaw libraryred
In his comment, the
respondent
alleged that the CA did not err in affirming, in toto, the decision of
the trial court. He prayed that the petition be denied due course.
The issues posed for
our resolution are the following:
(a) whether
or not the petitioner acted negligently in causing the annotation of
levy
on the title of the respondent;
(b) if so, whether
or
not the respondent was the real party-in-interest as plaintiff to file
an action for damages against the petitioner considering that the loan
applicant with UCPB and PDB was RAMDUSTRIAL CORPORATION; andchanrobles virtuallaw libraryred
(c) if so, whether
or
not the respondent is entitled to moral damages, exemplary damages and
attorney's fees.
On the first issue, we
rule that the petitioner acted negligently when it caused the
annotation
of the notice of levy in TCT No. 275167.
It bears stressing that
the petitioner is a banking corporation, a financial institution with
power
to issue its promissory notes intended to circulate as money (known as
bank notes); or to receive the money of others on general deposit, to
form
a joint fund that shall be used by the institution for its own benefit,
for one or more of the purposes of making temporary loans and
discounts,
of dealing in notes, foreign and domestic bills of exchange, coin
bullion,
credits, and the remission of money; or with both these powers, and
with
the privileges, in addition to these basic powers, of receiving special
deposits, and making collection for the holders of negotiable paper, if
the institution sees fit to engage in such business.[25]
In funding these businesses, the bank invests the money that it holds
in
trust of its depositors. For this reason, we have held that the
business
of a bank is one affected with public interest, for which reason the
bank
should guard against loss due to negligence or bad faith.[26]
In approving the loan of an applicant, the bank concerns itself with
proper
informations regarding its debtors. The petitioner, as a bank and a
financial
institution engaged in the grant of loans, is expected to ascertain and
verify the identities of the persons it transacts business with.[27]
In this case, the petitioner knew that the sureties to the loan granted
to ZDC and the defendants in Civil Case No. 94-1822 were the Spouses
Teofilo
Ramos, Sr. and Amelita Ramos. The names of the Spouses Teofilo Ramos,
Sr.
and Amelita Ramos were specified in the writ of execution issued by the
trial court.chanrobles virtuallaw libraryred
The petitioner, with
Atty. Bordalba as the Chief of LED and handling lawyer of Civil Case
No.
16453, in coordination with the sheriff, caused the annotation of
notice
of levy in the respondent's title despite its knowledge that the
property
was owned by the respondent and his wife Rebecca Ramos, who were not
privies
to the loan availment of ZDC nor parties-defendants in Civil Case No.
16453.
Even when the respondent informed the petitioner, through counsel, that
the property levied by the sheriff was owned by the respondent, the
petitioner
failed to have the annotation cancelled by the Register of
Deeds. chanrobles virtuallaw libraryred
In determining whether
or not the petitioner acted negligently, the constant test is: "Did the
defendant in doing the negligent act use that reasonable care and
caution
which an ordinarily prudent person would have used in the same
situation?
If not, then he is guilty of negligence."[28]
Considering the testimonial and documentary evidence on record, we are
convinced that the petitioner failed to act with the reasonable care
and
caution which an ordinarily prudent person would have used in the same
situation.cralaw:red
The petitioner has access
to more facilities in confirming the identity of their judgment
debtors.
It should have acted more cautiously, especially since some uncertainty
had been reported by the appraiser whom the petitioner had tasked to
make
verifications. It appears that the petitioner treated the uncertainty
raised
by appraiser Eduardo C. Reniva as a flimsy matter. It placed more
importance
on the information regarding the marketability and market value of the
property, utterly disregarding the identity of the registered owner
thereof.chanrobles virtuallaw libraryred
It should not be amiss
to note that the judgment debtor's name was Teofilo Ramos, Sr. We note,
as the Supreme Court of Washington in 1909 had, that a legal name
consists
of one given name and one surname or family name, and a mistake in a
middle
name is not regarded as of consequence. However, since the use of
initials,
instead of a given name, before a surname, has become a practice, the
necessity
that these initials be all given and correctly given in court
proceedings
has become of importance in every case, and in many, absolutely
essential
to a correct designation of the person intended.[29]
A middle name is very important or even decisive in a case in which the
issue is as between two persons who have the same first name and
surname,
did the act complained of, or is injured or sued or the like.[30]chanrobles virtuallaw libraryred
In this case, the name
of the judgment debtor in Civil Case No. 16453 was Teofilo Ramos, Sr.,
as appearing in the judgment of the court and in the writ of execution
issued by the trial court. The name of the owner of the property
covered
by TCT No. 275167 was Teofilo C. Ramos. It behooved the petitioner to
ascertain
whether the defendant Teofilo Ramos, Sr. in Civil Case No. 16453 was
the
same person who appeared as the owner of the property covered by the
said
title. If the petitioner had done so, it would have surely discovered
that
the respondent was not the surety and the judgment debtor in Civil Case
No. 16453. The petitioner failed to do so, and merely assumed that the
respondent and the judgment debtor Teofilo Ramos, Sr. were one and the
same person.chanrobles virtuallaw libraryred
In sum, we find that
the petitioner acted negligently in causing the annotation of notice of
levy in the title of the herein respondent, and that its negligence was
the proximate cause of the damages sustained by the respondent.chanrobles virtuallaw libraryred
On the second issue,
the petitioner insists that the respondent is not the real
party-in-interest
to file the action for damages, as he was not the one who applied for a
loan from UCPB and PDB but Ramdustrial Corporation, of which he was
merely
the President and Chairman of the Board of Directors.chanrobles virtuallaw libraryred
We do not agree. The
respondent very clearly stated in his complaint that as a result of the
unlawful levy by the petitioner of his property, he suffered sleepless
nights, moral shock, and almost a heart attack due to high blood
pressure.[31]chanrobles virtuallaw libraryred
It must be underscored
that the registered owner of the property which was unlawfully levied
by
the petitioner is the respondent. As owner of the property, the
respondent
has the right to enjoy, encumber and dispose of his property without
other
limitations than those established by law. The owner also has a right
of
action against the holder and possessor of the thing in order to
recover
it.[32]
Necessarily, upon the annotation of the notice of levy on the TCT, his
right to use, encumber and dispose of his property was diminished, if
not
negated. He could no longer mortgage the same or use it as collateral
for
a loan.chanrobles virtuallaw libraryred
Arising from his right
of ownership over the said property is a cause of action against
persons
or parties who have disturbed his rights as an owner.[33]
As an owner, he is one who would be benefited or injured by the
judgment,
or who is entitled to the avails of the suit[34]
for an action for damages against one who disturbed his right of
ownership.cralaw:red
Hence, regardless of
the fact that the respondent was not the loan applicant with the UCPB
and
PDB, as the registered owner of the property whose ownership had been
unlawfully
disturbed and limited by the unlawful annotation of notice of levy or
his
TCT, the respondent had the legal standing to file the said action for
damages. In both instances, the respondent's property was used as
collateral
of the loans applied for by Ramdustrial Corporation. Moreover, the
respondent,
together with his wife was a surety of the aforesaid loans.chanrobles virtuallaw libraryred
While it is true that
the loss of business opportunities cannot be used as a reason for an
action
for damages arising from loss of business opportunities caused by the
negligent
act of the petitioner, the respondent, as a registered owner whose
right
of ownership had been disturbed and limited, clearly has the legal
personality
and cause of action to file an action for damages. Not even the
respondent's
failure to have the annotation cancelled immediately after he came to
know
of the said wrongful levy negates his cause of action.chanrobles virtuallaw libraryred
On the third issue,
for the award of moral damages to be granted, the following must exist:
(1) there
must
be an injury clearly sustained by the claimant, whether physical,
mental
or psychological;
(2) there must be a
culpable act or omission factually established;chanrobles virtuallaw libraryred
(3) the wrongful act
or omission of the defendant is the proximate cause of the injury
sustained
by the claimant; and
(4) the award for
damages
is predicated on any of the cases stated in Article 2219 of the Civil
Code.[35]chanrobles virtuallaw libraryred
In the case at bar,
although
the respondent was not the loan applicant and the business
opportunities
lost were those of Ramdustrial Corporation, all four requisites were
established.
First, the respondent sustained injuries in that his physical health
and
cardio-vascular ailment were aggravated; his fear that his one and only
property would be foreclosed, hounded him endlessly; and his reputation
as mortgagor had been tarnished. Second, the annotation of notice of
levy
on the TCT of the private respondent was wrongful, arising as it did
from
the petitioner's negligent act of allowing the levy without verifying
the
identity of its judgment debtor. Third, such wrongful levy was the
proximate
cause of the respondent's misery. Fourth, the award for damages is
predicated
on Article 2219 of the Civil Code, particularly, number 10 thereof.[36]chanrobles virtuallaw libraryred
Although the respondent
was able to establish the petitioner's negligence, we cannot, however,
allow the award for exemplary damages, absent the private respondent's
failure to show that the petitioner acted with malice and bad faith. It
is a requisite in the grant of exemplary damages that the act of the
offender
must be accompanied by bad faith or done in a wanton, fraudulent or
malevolent
manner.[37]chanrobles virtuallaw libraryred
Attorney's fees may
be awarded when a party is compelled to litigate or to incur expenses
to
protect his interest by reason of an unjustified act of the other
party.
In this case, the respondent was compelled to engage the services of
counsel
and to incur expenses of litigation in order to protect his interest to
the subject property against the petitioner's unlawful levy. The award
is reasonable in view of the time it has taken this case to be resolved.[38]chanrobles virtuallaw libraryred
In sum, we rule that
the petitioner acted negligently in levying the property of the
respondent
despite doubts as to the identity of the respondent vis-a-vis its
judgment
debtor. By reason of such negligent act, a wrongful levy was made,
causing
physical, mental and psychological injuries on the person of the
respondent.
Such injuries entitle the respondent to an award of moral damages in
the
amount of P800,000. No exemplary damages can be awarded because the
petitioner's
negligent act was not tainted with malice and bad faith. By reason of
such
wrongful levy, the respondent had to hire the services of counsel to
cause
the cancellation of the annotation; hence, the award of attorney's
fees.chanrobles virtuallaw libraryred
WHEREFORE, the decision
of the Court of Appeals in CA-G.R. CV No. 56737 is AFFIRMED WITH
MODIFICATION.
The award for exemplary damages is deleted. No costs.cralaw:red
SO ORDERED.chanrobles virtuallaw libraryred
Bellosillo, Quisumbing,
Austria-Martinez and Tinga, JJ.,
concur.chanrobles virtuallaw libraryred
____________________________
Endnotes:
[1]
Penned by Associate Justice Elvi John S. Asuncion with Associate
Justices
Cancio C. Garcia and Oswaldo D. Agcaoili concurring.
[2]
Penned by Judge Oscar B. Pimentel.chanrobles virtuallaw libraryred
[3]
Exhibit "5," Records, p. 150.chanrobles virtuallaw libraryred
[4]
Id. at 151.chanrobles virtuallaw libraryred
[5]
Exhibit "D," id. at 77.chanrobles virtuallaw libraryred
[6]
TSN, 24 July 1996, pp. 7–8.chanrobles virtuallaw libraryred
[7]
Exhibit "7," Records, pp. 154–155.chanrobles virtuallaw libraryred
[8]
TSN, 24 July 1994, pp. 12–13.chanrobles virtuallaw libraryred
[9]
Exhibit "C," Records, p. 76.chanrobles virtuallaw libraryred
[10]
TSN, 14 February 1996, p. 21.chanrobles virtuallaw libraryred
[11]
Id. at 11.chanrobles virtuallaw libraryred
[12]
Exhibit "B," Records, p. 9.chanrobles virtuallaw libraryred
[13]
Exhibit "6," id. at 152.chanrobles virtuallaw libraryred
[14]
Exhibit "4," id. at 144.chanrobles virtuallaw libraryred
[15]
Exhibit "4-A," id. at 145.chanrobles virtuallaw libraryred
[16]
TSN, 14 February 1996, p. 24.chanrobles virtuallaw libraryred
[17]
Id. at 30.chanrobles virtuallaw libraryred
[18]
Exhibit "3," Records, p. 143.chanrobles virtuallaw libraryred
[19]
Id. at 5.chanrobles virtuallaw libraryred
[20]
Rollo, pp. 105–106.chanrobles virtuallaw libraryred
[21]
Records, p. 203.chanrobles virtuallaw libraryred
[22]
Rollo, p. 74.chanrobles virtuallaw libraryred
[23]
Id. at 46–47.chanrobles virtuallaw libraryred
[24]
Id. at 62.chanrobles virtuallaw libraryred
[25]
Morse, Jr., John T.: A Treatise on the Law of Banks and Banking, Vol.
I,
6th Edition, 1928, USA.chanrobles virtuallaw libraryred
[26]
Rural Bank of Sta. Ignacia, Inc. v. Pelagia Dimatulac, G.R. No. 142015,
April 29, 2003.chanrobles virtuallaw libraryred
[27]
Adriano v. Pangilinan, 373 SCRA 544 (2002).chanrobles virtuallaw libraryred
[28]
Evangelista v. People, 315 SCRA 525 (1999).chanrobles virtuallaw libraryred
[29]
Carney v. Bigham, 99 P. 21 (1909).chanrobles virtuallaw libraryred
[30]
Long v. Campbell, 17 SE 197 (1893).chanrobles virtuallaw libraryred
[31]
Records, p. 3.chanrobles virtuallaw libraryred
[32]
Article 428, Civil Code.chanrobles virtuallaw libraryred
[33]
A cause of action exists if the following elements are present: (1) a
right
in favor of the plaintiff by whatever means and under whatever means
and
under whatever law it arises or created; (2) an obligation on the part
of the named defendant to respect or not to violate such right; and (3)
an act or omission on the part of such defendant violative of the right
of the plaintiff or constituting a breach of the obligation of the
defendant
to the plaintiff for which the latter may maintain an action for
recovery
of damages. (Vergara v. Court of Appeals, 319 SCRA 323 [1999]).chanrobles virtuallaw libraryred
[34]
Aguila, Jr. v. Court of Appeals, 319 SCRA 246 (1999).chanrobles virtuallaw libraryred
[35]
Cathay Pacific Airways, Ltd. v. Spouses Daniel Vazquez and Maria Luisa
Madrigal Vazquez, G.R. No. 150843, March 14, 2003.chanrobles virtuallaw libraryred
[36]
36. Art. 2219. Moral damages may be recovered in the following and
analogous
cases: x x x 10. Cases and actions
referred to in articles 21, 26, 27, 28, 29, 30, 31, 32, 34 and 35.
[37]
See note 41.chanrobles virtuallaw libraryred
[38]
Ching Sen Ben v. Court of Appeals, 314 SCRA 762 (1999).chanrobles virtuallaw libraryred |