Republic of the
Supreme Court
SECOND DIVISION
METROPOLITAN BANK AND TRUST COMPANY, Petitioner, - versus - LARRY MARIÑAS, Respondent. |
G.R.
No. 179105
Present: CARPIO, J.,
Chairperson, NACHURA, PERALTA, ABAD, and MENDOZA, JJ. Promulgated: July 26,
2010 |
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DECISION
NACHURA, J.:
This
is a petition for review on certiorari
under Rule 45 of the Rules of Court, seeking to annul and set aside the Court
of Appeals (CA) Decision[1]
dated July 31, 2007, affirming with modification the Regional Trial Court (RTC)
decision[2]
dated October 14, 2004.
The
factual and procedural antecedents are as follows:
Sometime
in April 1998, respondent Larry Mariñas returned to the P2,300,000.00,
evidenced by Promissory Note No. 355873.[4]
From the initial deposit of US$100,000.00, respondent withdrew[5]
US$67,227.95,[6] then
deposited it under Account No. 0-26400171-6 (Foreign Currency Deposit [FCD] No.
505671),[7] which
he used as security[8] for the P2,300,000.00
loan.
Respondent
subsequently opened two more foreign currency accounts ― Account No.
0-26400244-5 (FCD No. 505688)[9]
and Account No. 0-264-00357-3 (FCD No. 739809)[10] ―
depositing therein US$25,000.00 and US$17,000.00, respectively. On April 30,
1999, respondent obtained a second loan of P645,150.00,[11]
secured[12]
by Account No. 0-264-00357-3 (FCD No. 739809).
When
he inquired about his dollar deposits, respondent discovered that petitioner
made deductions against the former’s accounts. On May 31, 1999, respondent,
through his counsel, demanded from petitioner a proper and complete accounting
of his dollar deposits, and the restoration of his deposits to their proper
amount without the deductions.[13] In response, petitioner explained that the
deductions made from respondent’s dollar accounts were used to pay the interest
due on the latter’s loan with the former.
These deductions, according to petitioner, were authorized by respondent
through the Deeds of Assignment with Power of Attorney voluntarily executed by
respondent.[14]
Unsatisfied,
and believing that the deductions were unauthorized, respondent commenced an
action for Damages against petitioner
and its Kabihasnan, Parañaque City Branch Manager Expedito Fernandez
(Fernandez) before the RTC, Las Piñas City.
The case was docketed as Civil Case No. 99-0172 and was raffled to Branch
255. While admitting the existence of the P2,300,000.00 and P645,150.00
loans, respondent claimed that when he signed the loan documents, they were all
in blank and they were actually filled up by petitioner. Aside from the
complete accounting of his dollar accounts and the restoration of the true
amounts of his deposits, respondent sought the payment of P400,000.00 as
moral damages, P100,000.00 as exemplary damages, and P100,000.00 as
attorney’s fees.[15]
On
its part, petitioner insisted that respondent freely and voluntarily signed the
loan documents. While admitting the full payment of respondent’s P2,300,000.00
and P645,150.00 loans, petitioner claimed that the payments were made
using the former’s US$67,227.95, US$25,000.00, and US$17,000.00 time deposits. Accordingly,
there was nothing to account for and restore.
By way of counterclaim, petitioner prayed for the payment of P200,000.00
as attorney’s fees, P1,000,000.00 as moral damages, and P500,000.00
as exemplary damages.[16]
As
no amicable settlement was reached, trial on the merits ensued.
On
October 14, 2004, the RTC rendered a decision in favor of respondent, the
dispositive portion of which reads:
WHEREFORE,
the foregoing considered, judgment is hereby rendered in favor of plaintiff
Larry Mari[ñ]as, and against the defendants Metropolitan Bank and Trust Company
and Expedito Fernandez, ordering the said defendants to account for the dollar
deposits of the plaintiff in the amounts of US$30,000.00 and US$25,000.00,
respectively, and then return the same, including the interests due thereon
reckoned from 31 May 1999 until fully paid.
Likewise,
the defendants are hereby directed to pay to the herein plaintiff the following
amounts, to wit:
1. P100,000.00 in moral damages;
2. P50,000.00 in exemplary damages;
3. P50,000.00 as and by way of attorney’s fees; and
4. Costs of suit.
SO ORDERED.[17]
The
RTC sustained the validity and regularity of the loan documents signed by
respondent, and consequently the existence of the P2,300,000.00 and P645,150.00
loans obtained from petitioner. Acknowledging the full payment of both loans,
the trial court found that the payments were made from respondent’s foreign
currency deposits, particularly Account Numbers 0-26400171-6 (FCD No. 505671)
and 0-264-00357-3 (FCD No. 739809), amounting to US$67,227.95 and US$17,000.00,
respectively. There is no doubt that respondent specifically assigned these
accounts to secure the payment of his loans pursuant to the Deeds of Assignment
with Power of Attorney. Hence, the deductions made from such accounts were
valid. However, the RTC found that petitioner should account for and eventually
return the US$30,000.00 and US$25,000.00 deposits of respondent since they were
not assigned to answer for the latter’s loans, and that any deductions made
from these accounts were, therefore, illegal. Consequently, petitioner was made
to answer for damages suffered by respondent.[18]
Being the petitioner’s Kabihasnan Branch Manager, Fernandez was declared
solidarily liable with petitioner.
On
appeal, the CA modified the RTC decision by absolving Fernandez from liability.
The appellate court held that Fernandez could not be made to answer for acts
done in the performance of his duty absent any showing that he assented to
patently unlawful acts of the corporation or was guilty of bad faith or gross
negligence in directing its affairs, or that he agreed to hold himself
personally and solidarily liable with the corporation.[19] No proof was adduced in this regard.
Hence, the instant petition raising the following
issues:
1. WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN ORDERING PETITIONER TO ACCOUNT FOR AND RETURN TO RESPONDENT THE SUMS
OF US$30,000.00 AND US$25,000.00.
2. WHETHER OR NOT THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING PETITIONER LIABLE TO RESPONDENT FOR MORAL AND EXEMPLARY
DAMAGES, AS WELL AS ATTORNEY’S FEES AND COSTS OF SUIT.[20]
Petitioner
assails the CA Decision affirming the former’s culpability for making unlawful
deductions from respondent’s dollar accounts without the latter’s consent. Additionally, it questions the award of moral
and exemplary damages, as well as attorney’s fees.
We agree with the CA’s factual findings as to the deposits
and withdrawals made and loans obtained by respondent. We do not, however,
agree with its conclusion that petitioner absolutely lacked the authority to
make deductions from respondent’s deposits for the payment of his outstanding
obligations.
It is apt to stress the well-settled
principle that factual findings of the trial court, affirmed by the CA, are
binding and conclusive upon this Court.[21] In the absence of any showing that the
findings complained of are totally devoid of support in the evidence on record,
or that they are so glaringly erroneous as to constitute serious abuse of
discretion, such findings must stand.[22] The Court is not a trier of facts, its
jurisdiction being limited to reviewing only errors of law that may have been
committed by the lower courts.[23] It is not the function of the Court to
analyze or weigh all over again the evidence or premises supportive of such
factual determination.[24] The law creating the CA was intended mainly to
take away from the Supreme Court the work of examining the evidence, so that it
may confine its task to the determination of questions which do not call for
the reading and study of transcripts containing the testimony of witnesses.[25]
In
the present case, we find no justification to deviate from the factual findings
of the trial court and the appellate court.
Petitioner has utterly failed to convince us that the assailed findings
are devoid of basis or are not supported by substantial evidence.
It is noteworthy that respondent opened four accounts with
petitioner: 1) Account No. 2264-00145-0 for US$100,000.00; 2) Account No.
0-26400171-6 (FCD No. 505671) for US$67,227.95; 3) Account No. 0-26400244-5
(FCD No. 505688) for US$25,000.00; and
4) Account No. 0-264-00357-3 (FCD No. 739809) for US$17,000.00. Admittedly,
respondent withdrew $70,000.00 from Account No. 2264-00145-0, leaving a balance
of $30,000.00.
It is likewise undisputed that
respondent obtained two separate loans from petitioner in amounts of P2,300,000.00
and P645,150.00. These were
evidenced by promissory notes and secured by respondent’s two dollar accounts ―
Account Numbers 0-26400171-6 (FCD No. 505671) and 0-264-00357-3 (FCD No.
739809) ― for US$67,227.95 and US$17,000.00, respectively. Respondent’s
first loan of P2,300,000.00, obtained on April 13, 1998, was payable on
April 8, 1999; while the second loan of P645,150.00, obtained on April
30, 1999, was payable on April 24, 2000.
Records show that the first loan was paid on April 21, 1999, with the
payment therefor taken from Account No. 0-26400171-6. The second loan, on the
other hand, was paid on May 10, 1999, out of respondent’s Account No. 0-264-00357-3.
It should be clarified, though, that these payments referred only to the payment
of the principal (P2,300,000.00 and P645,150.00) of respondent’s
loans, exclusive of interests stipulated
in the promissory notes executed by the latter.
Aside from obligating himself to pay P2,300,000.00
as principal, respondent also agreed to pay interest at the rate of 22.929% per annum (not monthly) from April 13,
1998 until full payment. As respondent made full payment of the principal on
April 21, 1999, respondent was also obliged to pay interest until that date. As to the P645,150.00 loan, respondent
agreed to pay interest at the rate of 16.987% per annum.
Respondent later discovered that his
accounts with petitioner were all depleted. Upon inquiry from petitioner, it
explained that pursuant to the Deeds of Assignment with Power of Attorney
executed by respondent, it deducted from respondent’s accounts the interest due
on his loans.
Contrary to the conclusions of the
RTC and the CA, we find that petitioner is empowered to make lawful deductions
from respondent’s accounts for such amounts due it. This is authorized in the
Promissory Notes and Deeds of Assignment with Power of Attorney executed by
respondent, to wit:
I/We hereby give the Bank a general lien
upon, and/or right of set-off and/or right to hold and/or apply to the loan
account, or any claim of the Bank against any of us, all my/our rights, title
and interest in and to the balance of every deposit account, money, negotiable
instruments, commercial papers, notes, bonds, stocks, dividends, securities,
interest, credits, chose in action, claims, demands, funds or any interest in
any thereof, and in any other property, rights and interest of any of us or any
evidence thereof, which have been, or at any time shall be delivered to, or
otherwise come into the possession, control or custody of the Bank or any of
its subsidiaries, affiliates, agents or correspondents now or anytime
hereafter, for any purpose, whether or not accepted for the purpose or purposes
for which they are delivered or intended. For this purpose, I/We hereby appoint
the Bank as my/our irrevocable Attorney-in-fact with full power of
substitution/delegation to sign or endorse any and all documents and perform
any and all acts and things required or necessary in the premises.[26]
Effective upon default in the payment of
CREDIT, or any part thereof, the ASSIGNOR hereby grants to the ASSIGNEE, full
power and authority to collect/withdraw the deposit/proceeds/receivables/
investments/securities and apply the collection/deposit to the payment of the
outstanding principal, interest and other charges on the CREDIT. For this
purpose, the ASSIGNOR hereby names, constitutes and appoints the ASSIGNEE as
his/its true and lawful Attorney-in-Fact, with powers of substitution, to ask,
demand, collect, sue for, recover and receive the
deposit/proceeds/receivables/investments/securities or any part thereof, as
well as to encash, negotiate and endorse checks, drafts and other commercial
papers/instruments received by and paid to the ASSIGNEE, incident thereto and
to execute all instruments and agreements connected therewith. A written
Certification by the ASSIGNEE of the amount of its claims from the ASSIGNOR
and/or the BORROWER shall be conclusive on the ASSIGNOR and/or the BORROWER
absent manifest error.[27]
As provided in Article 1159 of the
Civil Code, “obligations arising from contract have the force of law between
the contracting parties and should be complied with in good faith.” Verily,
parties may freely stipulate their duties and obligations which perforce would
be binding on them. Not being repugnant to any legal proscription, the
agreement entered into between petitioner and respondent must be respected and given
the force of law between them.[28]
Upon the maturity of the first loan
on April 8, 1999, petitioner was authorized to automatically deduct, by way of
offsetting, respondent’s outstanding debt (including interests) to it from the
latter’s deposit accounts and their accumulated interest. Respondent did not
object to the deduction made from the proceeds of Account No. 0-26400171-6, but
would limit such deduction only to the payment of the principal of P2,300,000.00.
However, it should be borne in mind that in addition to the authority to effect
the said deduction for the principal loan amount, petitioner was authorized to
make further deductions for interest payments at the rate of 22.929% per annum until April 21, 1999.
With respect to the second loan,
barely a month after the execution of the promissory note and definitely prior
to the maturity date, respondent already paid the principal of P645,150.00
out of the deposited amount in Account No. 0-264-00357-3. Pursuant to the
promissory note, respondent agreed to pay interest at the rate of 16.987% per annum. While it is conceded that
petitioner had the right to offset the unpaid interests due it against the
deposits of respondent, the issue of whether it acted judiciously is an
entirely different matter.[29] As
business affected with public interest, and because of the nature of their
functions, banks are under obligation to treat the accounts of their depositors
with meticulous care, always having in mind the fiduciary nature of their
relationship.[30]
Pursuant to the above disquisition,
it is clear that despite such authority, petitioner should still account for whatever
excess deductions made on respondent’s deposits and return to respondent such amounts
taken from him. To be sure, respondent had interest-earning deposits with petitioner
in accordance with their agreement. On the other hand, after respondent paid
the principal on April 21, 1999 and May 10, 1999 on the two loans which he
obtained from petitioner, the latter had the authority to make deductions for
the payment of interest as stipulated in respondent’s promissory notes.
When we consider the total amount of
respondent’s deposits in his dollar accounts inclusive of interests earned
vis-à-vis his total obligations to petitioner, we find that the total depletion
of his accounts is not warranted. Hence, we find no reason to disturb the CA
conclusion on the award of damages. As aptly explained in Bank of the Philippine
For the above reasons, the Court finds no
reason to disturb the award of damages granted by the CA against petitioner.
This whole incident would have been avoided had petitioner adhered to the
standard of diligence expected of one engaged in the banking business. A
depositor has the right to recover reasonable moral damages even if the bank’s
negligence may not have been attended with malice and bad faith, if the former
suffered mental anguish, serious anxiety, embarrassment and humiliation. Moral
damages are not meant to enrich a complainant at the expense of defendant. It
is only intended to alleviate the moral suffering she has undergone. The award
of exemplary damages is justified, on the other hand, when the acts of the bank
are attended by malice, bad faith or gross negligence. The award of reasonable
attorney’s fees is proper where exemplary damages are awarded. It is proper
where depositors are compelled to litigate to protect their interest.[31]
WHEREFORE,
premises considered, the Court of Appeals Decision dated July 31, 2007 is
hereby AFFIRMED with MODIFICATION. Petitioner is ordered to
account for respondent’s dollar deposits inclusive of interests, subject to its
right to deduct from the said deposits his loan obligations amounting to P2,300,000.00,
plus interest at 22.929% per annum
until full payment on April 21, 1999; and P645,150.00, plus interest at
16.987% per annum until full payment
on May 10, 1999. After such accounting, petitioner shall restore to respondent whatever
excess amounts may have been deducted from such deposits, together with the
earned interests.
All other aspects of the assailed
decision STAND.
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate
Justice
Chairperson
DIOSDADO M. PERALTA Associate
Justice |
ROBERTO A. ABAD Associate
Justice |
JOSE CATRAL
Associate
Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
ANTONIO T. CARPIO
Associate
Justice
Chairperson,
Second Division
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution and
the Division Chairperson's Attestation, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
RENATO
C. CORONA
Chief
Justice
[1] Penned by Associate Justice Myrna Dimaranan Vidal, with Associate Justices Jose L. Sabio, Jr. and Jose C. Reyes, Jr., concurring; rollo, pp. 32-42.
[2] Penned by Judge Raul Bautista Villanueva; records, pp. 425-439.
[3] Covered by Account No. 2264-00145-0; id. at 137.
[4]
[5] Evidenced by the Debit Account Slip signed by respondent; id. at 246.
[6] Or US$70,000.00.
[7] Records, p. 248.
[8] Evidenced by the Deed of Assignment with Power of Attorney; id. at 140.
[9]
[10]
[11] Evidenced by Promissory Note No. 355961; id. at 252.
[12] Evidenced by Deed of Assignment with Power of Attorney; id. at 254.
[13]
[14]
[15]
[16]
[17] Supra note 2, at 439.
[18] Records, pp. 10-13.
[19] Supra note 1.
[20] Rollo, p. 18.
[21] Citibank,
N.A. v. Jimenez, Sr., G.R. No. 166878,
[22] Philippine
National Bank v. Pike, G.R. No. 157845,
[23] Prudential
Bank v. Lim, G.R. No. 136371,
[24]
[25] Citibank, N.A. v. Jimenez, Sr., supra note 21, at 581, citing Sta. Ana, et al. v. Hernandez, 125 Phil. 61 (1966).
[26] Records, pp. 138 and 252.
[27]
[28] National Sugar Trading v. Philippine National Bank, 444 Phil. 599 (2003).
[29] Bank
of the Philippine
[30] Bank
of the Philippine
[31]