Araneta v. Bank of America PDF

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144 SUPREME COURT REPORTS ANNOTATED
 Araneta vs. Bank of America
No. L-25414. July 30, 1971.LEOPOLDO ARANETA, petitioner,
vs.
 BANK OF AMERICA,respondent.
Civil Code; Adverse reflection against financial credit is a materialloss; Temperate damages are awarded.
—The financial credit of abusinessman is a prized and valuable asset, it
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 Araneta vs. Bank of America
being a significant part of the foundation of his business. Any adversereflection thereon constitutes some material loss to him. As stated in thecase of Atlanta National Bank vs. Davis, 96 Ga 334, 23 SE 190, citing 2Morse Banks, Sec. 458, “it can hardly be possible that a customer’s checkcan be wrongfully refused payment without some impeachment of hiscredit, which must in fact be an actual injury, though he cannot, from thenature of the case, furnish independent, distinct proof thereof.”
Same; Concept of temperate damages.
—In some States of theAmerican Union, temperate damages are allowed. There are cases wherefrom the nature of the case, definite proof of pecuniary loss cannot beoffered, although the court is convinced that there has been such loss. Forinstance, injury to one’s commercial credit or to the goodwill of a businessfirm is often hard to show with certainty in terms of money. Should damagesbe denied for that reason? The judge should be empowered to calculatemoderate damages in such cases, rather than that the plaintiff should suffer,without redress from the defendant’s wrongful act.
Same; Court may increase amount of attorney’s fees.
—Considering thenature and extent of the services rendered by the petitioner’s counsel both inthe trial and appellate courts, the amount should be increased to P4,000.This may be done
motu proprio
 by this Court under Article 2208 of theCivil Code, which provides that attorney’s fees may be recovered in the
 
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instances therein enumerated and “in any other case where the Court deemsit first and equitable that attorney’s fees. . . should be recovered,” providedthe amount thereof be reasonable in all cases.
 Remedial law; Review of the evidence and reappraisal of its probativevalue is not within the appellate jurisdiction of the Supreme Court.
—Areview of the evidence and a reappraisal of its probative value is not withinthe appellate jurisdiction of this Court.
PETITION for review by certiorari of a decision of the Court of Appeals. Alvendia,
 J.
The facts are stated in the opinion of the Court. 
Gatchalian & Sison
 for petitioner. 
 Lichauco, Picazo & Agcaoili
 for respondent.
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146 SUPREME COURT REPORTS ANNOTATED
 Araneta vs. Bank of America
MAKALINTAL,
 J.
:Petition for review by certiorari of the decision of the Court of Appeals in CA-G.R. No. L-34508-R modifying that of the Court of First Instance of Manila in the Civil Case No. 52442.Leopoldo Araneta, the petitioner herein, was a local merchantengaged in the import and export business. On June 30, 1961 heissued a check for $500 payable to cash and drawn against the SanFrancisco main office of the Bank of America, where he had beenmaintaining a dollar current account since 1948. At that time he hada credit balance of $523.81 in his account, confirmed by the bank’sassistant cashier in a letter to Araneta dated September 7, 1961.However, when the check was received by the bank on September 8,1961, a day after the date of the letter, it was dishonored andstamped with the notation “Account Closed.”Upon inquiry by Araneta as to why his check had beendishonored, the Bank of America acknowledged that it was an error,explaining that for some reason the check had been encoded withwrong account number, and promising that “we shall make everyeffort to see that this does not reoccur.” The bank sent a letter of apology to the payee of the check, a Mr. Harry Gregory of Hongkong, stating that “the check was returned through an error onour part and should not reflect adversely upon Mr. Araneta.” In allprobability the matter would have been considered closed, butanother incident of a similar nature occurred later.On May 25, and 31, 1962 Araneta issued Check No. 110 for $500and Check No. 111 for $150, respectively, both payable to cash anddrawn against the Bank of America. These two checks were
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received by the bank on June 3, 1962. The first check appeared tohave come into the hands of Rufina Saldaña, who deposited it to heraccount with the First National City Bank of New York, which inturn
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 Araneta vs. Bankof America
cleared it through the Federal Reserve Bank. The second checkappeared to have been cleared through the Wells Fargo Bank.Despite the sufficiency of Araneta’s deposit balance to cover bothchecks, they were again stamped with the notation “AccountClosed” and returned to the respective clearingbanks.In the particular case of Check No. 110, it was actually paid bythe Bank of America to the First National City Bank. Subsequently,however, the Bank of America, claiming that the payment had beeninadvertently made, returned the check to the First National CityBank with the request that the amount thereof be credited back to theBank of America. In turn, the First National City Bank wrote to thedepositor of the check, Rufina Saldaña, informing her about itsreturn with the notation “Account Closed” and asking her consent tothe deduction of its amount from her deposit. However, before Mrs.Saldaña’s reply could be received, the Bank of America recalled thecheck from the First National City Bank and honored it.In view of the foregoing incidents, Araneta, through counsel, senta letter to the Bank of America demanding damages in the sum of $20,000. While admitting responsibility for the inconveniencecaused to Araneta, the bank claimed that the amount demanded wasexcessive, and offered to pay the sum of P2,000.00. The offer wasrejected.On December 11, 1962 Araneta filed the complaint in this caseagainst the Bank of America for the recovery of thefollowing:
1. Actual or compensatorydamages..............................P 30,000.002. Moraldamages..........................................................20,000.003. Temperatedamages.................................................. 50,000.004. Exemplarydamages.................................................. 10,000.005. Attorney’sfees.......................................................... 10,000.00 T O T A L .......................................... P120,000.00
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“(1)“(2)
148 SUPREME COURT REPORTS ANNOTATED
 Araneta vs. Bank of America
The judgment of the trial court awarded all the items prayed for, buton appeal by the defendant the Court of Appeals eliminated theaward of compensatory and temperate damages and reduced themoral damages to P8,-000.00, the exemplary damages to P1,000.00and the attorney’s fees to P1,000.00.Not satisfied with the decision of the appellate court, the plaintiff filed the instant petition for review, alleging two reasons why itshould be allowed, as follows:The Court of Appeals erred in holding that temperatedamages cannot be awarded without proof of actualpecuniary loss. There is absolutely no legal basis for thisruling; worse yet, it runs counter to the very provisions of ART. 2216 of the New Civil Code and to the established jurisprudence on the matter;The Court of Appeals erred in not holding that moraldamages may be recovered as an item separate and distinctfrom the damages recoverable for injury to businessstanding and commercial credit. This involves theapplication of paragraph (2) of Art. 2205 of the New CivilCode which up to now has not yet received an authoritativeinterpretation from the Supreme Court. x x x.”In his brief, however, the petitioner assigned five (5) errorscommitted by the appellate court, namely: (1) in concluding that thepetitioner, on the basis of the evidence, had not sufficiently provenhis claim for actual damages, where such evidence, both testimonialand documentary, stands uncontradicted on the record; (2) in holdingthat temperate damages cannot be awarded to the petitioner withoutproof of actual pecuniary loss; (3) in not granting moral damages formental anguish, besmirched reputation, wounded feelings, socialhumiliation, etc., separate and distinct from the damages recoverablefor injury to business reputation; (4) in reducing, without anyostensible reason, the award of exemplary damages granted by thelower court; and (5) in reducing, without special reason, the awardof attorney’s fees by the lower court.
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 Araneta vs. Bank of America
We consider the second and third errors, as they present the issuesraised in the petition for review and on the basis of which it was
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