Philippine National Bank v. Court of Appeals
REITERATIONFacts
The Antecedents: On July 11, 1989, Carmelo H. Flores (Flores) purchased two manager's checks worth P500,000.00 each from the Philippine National Bank (PNB) Manila Pavilion Hotel unit, paying P1,000,040.00, for which a receipt was issued. On July 12, 1989, Flores presented these checks at the PNB Baguio Hyatt Casino unit. PNB initially refused to encash one check and agreed to encash the other only after it was broken down into five P100,000.00 manager's checks, with one check requiring clearance from the Manila Pavilion Hotel unit. Flores agreed to this arrangement. Upon returning to Manila, PNB's Malate Branch also refused to encash the remaining check. A formal demand by Flores' counsel was also ignored. Procedural History: Flores filed a case for damages with the Regional Trial Court (RTC) of Quezon City. PNB claimed that Flores only paid P900,000.00 and P40.00 in bank charges, attributing the discrepancy in the receipt to an honest mistake by a new employee due to Flores' 'demanding attitude.' The RTC ruled in favor of Flores, ordering PNB to pay P100,000.00 for the dishonored check with interest, P1,000,000.00 for moral damages, P1,000,000.00 for exemplary damages, P50,000.00 for attorney's fees, and costs. PNB appealed to the Court of Appeals (CA), which affirmed the RTC decision. PNB's motion for reconsideration was denied, leading to the present petition. The Petition: PNB assailed the CA's decision, raising issues on whether the receipt was the best evidence of payment, whether PNB could present evidence aliunde to prove its claim of P900,000.00 payment, and whether the awarded damages were disproportionate.
Issue(s)
Whether the Court of Appeals erred in holding that the receipt for P1,000,040.00 is the best evidence of the amount paid by Flores, and whether PNB can present competent and relevant evidence to support its allegation that Flores actually paid P900,040.00. Whether the award for moral damages is disproportionate and unconscionable. Whether the award for exemplary damages and attorney's fees is disproportionate and unconscionable.
Ruling
The Supreme Court modified the decision of the Court of Appeals. The award for moral damages was reduced from P1,000,000.00 to P100,000.00, and the award for exemplary damages was reduced from P1,000,000.00 to P25,000.00. In all other respects, the decision was affirmed.
Ratio Decidendi
On the issue of payment and the best evidence rule: The Court affirmed the findings of the lower courts that Flores paid P1,000,040.00. The Court held that a receipt is presumptive evidence of payment and, while not conclusive, it is the best evidence. PNB's contention that the receipt was erroneous was not sufficiently supported by independent evidence. The testimonies of PNB's employees, who were involved in the transaction, were considered self-serving and insufficient to overturn the acknowledgment in PNB's own receipt. The Court reiterated that the best proof of payment is the receipt, citing Monfort v. Aguinaldo. PNB failed to adduce concrete evidence to prove its claim of P900,000.00 payment, relying solely on the testimonies of its employees and crumpled application forms retrieved from a waste basket, which lacked probative value. Therefore, PNB was bound by the contents of the receipt it issued. On the issue of moral damages: The Court found the award of P1,000,000.00 for moral damages to be excessive and unconscionable, considering the actual claim of P100,000.00. The Court emphasized that moral damages are compensatory and should be proportionate to the injury suffered, not intended to enrich the complainant. The Court noted that Flores' claim of losing a house and lot deal was based solely on his testimony, and the broker he named was not presented to confirm the allegation. The Court reiterated that moral damages are not a penalty but compensation for actual injury. Therefore, the Court reduced the moral damages to P100,000.00. On the issue of exemplary damages and attorney's fees: The Court found the award of P1,000,000.00 for exemplary damages to be excessive and unconscionable, and reduced it to P25,000.00. The Court reasoned that exemplary damages, while serving as a deterrent, should not be excessive. The Court found the award of P50,000.00 for attorney's fees to be in order. This was based on the finding that PNB acted in gross and evident bad faith in refusing to satisfy Flores' plainly valid, just, and demandable claim, making it just and equitable to award attorney's fees.
Main Doctrine
A bank's own receipt is considered the best evidence of payment, and self-serving testimonies of bank employees are insufficient to contradict it. Awards for moral and exemplary damages must be proportionate to the injury suffered and should not be excessive.