China Banking Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner China Banking Corporation (CBC) filed a complaint against George U. Lim, Julia L. Wang, and private respondent Claro Ben Lim, officers of Pacific Mills, Inc. (Pacific), for violation of P.D. No. 115, arising from two trust receipts. One trust receipt was dated November 18, 1977, signed by George U. Lim and private respondent. The other was dated March 19, 1981, signed by George U. Lim and Julia L. Wang. Petitioner Orwil Ong, CBC's Section Chief, alleged in his affidavit-complaint that Pacific/George U. Lim and Julia L. Wang were guilty of estafa under P.D. No. 115 in relation to Article 315 of the Revised Penal Code under the March 19, 1981 trust receipt, and that Pacific/George U. Lim and private respondent were similarly guilty under the November 18, 1977 trust receipt. An information was filed charging George U. Lim and private respondent with violation of P.D. No. 115 involving the March 19, 1981 trust receipt. Private respondent, upon learning this, filed a counter-affidavit stating he was not a signatory to the March 19, 1981 trust receipt. CBC filed a motion for reinvestigation, alleging an inadvertent interchange of names: private respondent was charged in connection with the March 19, 1981 trust receipt, and Julia L. Wang with the November 18, 1977 trust receipt, when it should have been the other way around. Private respondent's motion to dismiss the criminal case was granted. Subsequently, private respondent filed a complaint for damages against petitioners, alleging perjury by Ong and fraudulent actions by petitioners in failing to ascertain his correct address, thus depriving him of the opportunity to appear in the preliminary investigation. He claimed mental torture, shock, humiliation, and business losses, and that his wife suffered a nervous breakdown. Petitioners maintained the interchange of names was made in absolute good faith. Procedural History: The Regional Trial Court (RTC), Branch 8, Manila, rendered a decision in favor of private respondent, ordering petitioners jointly and severally to pay P500,000.00 as moral damages and P25,000.00 as exemplary damages, plus costs. Petitioners appealed to the Court of Appeals (CA), which affirmed the RTC decision. The Petition: Petitioners filed a petition for review on certiorari with the Supreme Court, alleging that the CA gravely erred in concluding that petitioners acted with gross negligence in failing to furnish the correct address, in failing to consider that there was a basis for indictment under the Trust Receipt Law, and in holding that the interchange of names constituted gross negligence.
Issue(s)
Whether petitioners acted with gross negligence in failing to furnish the correct address of private respondent. Whether there was a basis for the indictment of private respondent for violation of the Trust Receipt Law. Whether the interchange of names between private respondent and Julia L. Wang constituted gross negligence. Whether petitioners are liable for damages under Articles 19, 20, and 21 of the Civil Code.
Ruling
The petition is granted, and the decision of the Court of Appeals is reversed. No pronouncement as to costs.
Ratio Decidendi
On the issue of gross negligence in failing to furnish the correct address: The Court held that petitioners did not act with gross negligence. The address furnished by petitioners to the investigating fiscal was private respondent's office address at Pacific, which appeared on the Trust Receipt Agreement and the application for a letter of credit. Petitioners were not advised of private respondent's resignation from Pacific nor were they given his new address. Therefore, as far as petitioners were concerned, the address they provided was the correct one based on their records. On the issue of the basis for indictment for violation of the Trust Receipt Law: The Court found that there was a basis for the filing of the criminal complaint against private respondent. The filing of criminal complaints arose from two trust receipt agreements. When Pacific failed to pay its obligation or return the articles covered by the trust receipts, private respondent, as a signatory to the trust receipt dated November 18, 1977, became criminally liable for estafa under P.D. No. 115. The offer to return the articles and the full payment of the obligation were made only after the filing of the criminal complaint and much later, respectively, indicating a basis for the initial complaint. On the issue of gross negligence due to interchange of names: The Court ruled that the interchange of names was not due to gross negligence. The affidavit-complaint was prepared by lawyers, and petitioner Ong's participation was limited to furnishing copies of the trust receipts. Upon discovery of the interchange, petitioners immediately moved for a reinvestigation, which negates any malice, ill-will, or bad faith on their part. This action demonstrated their intent to correct the oversight promptly. On the issue of liability for damages under Articles 19, 20, and 21 of the Civil Code: The Court held that petitioners are not liable for damages. A common thread in these articles is that the act complained of must be intentional and tainted with bad faith. Petitioners did not act with bad faith in filing the criminal complaint. Based on the trust receipt bearing private respondent's signature, there was a prima facie case against him for estafa. The interchange of names was an oversight, not a deliberate act. The immediate filing of a motion for reinvestigation further supported the absence of bad faith. The Court reiterated that mere filing of a suit does not render a person liable for malicious prosecution if done in good faith, and that moral damages cannot be recovered from a person who filed a complaint without malice or bad faith. The situation was analogous to Albenson Enterprises Corporation vs. Court of Appeals, where no damages were awarded despite an erroneous charge due to lack of bad faith.
Main Doctrine
The filing of a criminal complaint based on a trust receipt, even if later found to be based on an erroneous trust receipt due to an interchange of names, does not automatically give rise to a claim for damages under Articles 19, 20, and 21 of the Civil Code if the filing was done in good faith and without malice, especially when the error was promptly corrected through a motion for reinvestigation.