9. Simex International Inc. vs CA 4.

Article 2205 of the Civil Code provides that actual or compensatory damages may be
183 SCRA 360 received "(2) for injury to the plaintiff's business standing or commercial credit." There is
March 19, 1990 no question that the petitioner did sustain actual injury as a result of the dishonored
TOPIC: Degree of Diligence checks and that the existence of the loss having been established "absolute certainty as
PETITIONER: Simex International Inc. to its amount is not required."  Such injury should bolster all the more the demand of
RESPONDENTS: Court of Appeals and Traders Royal Bank the petitioner for moral damages and justifies the examination by this Court of the
FACTS: validity and reasonableness of the said claim.
1. Petitioner, a private corporation engaged in the exportation of food products, was a 5. We agree that moral damages are not awarded to penalize the defendant but to
depositior maintaining a checking account with Traders Royal Bank. compensate the plaintiff for the injuries he may have suffered. 8In the case at bar, the
2. Petitioner deposited to its account increasing its balance and subsequently, issued petitioner is seeking such damages for the prejudice sustained by it as a result of the
several checks but was surprised to learn that it had been dishonored for insufficient private respondent's fault. The respondent court said that the claimed losses are purely
funds. speculative and are not supported by substantial evidence, but if failed to consider that
3. As a consequence, petitioner received demand letters from its suppliers for the the amount of such losses need not be established with exactitude, precisely because of
dishonored checks, Investigation diclosed that the deposit was not credited to it. their nature.
4. The error was rectified and the dishonored checks were consequently paid. Petitioner 6. Moral damages are not susceptible of pecuniary estimation. Article 2216 of the Civil
demanded reparation from respondent bank for its gross and wanton negligence but Code specifically provides that "no proof of pecuniary loss is necessary in order that
the later did not heed. moral, nominal, temperate, liquidated or exemplary damages may be adjudicated." That
5. Petitioner then filed before the RTC which later held that the respondent bank was is why the determination of the amount to be awarded (except liquidated damages) is
guilty of negligence but petitioner nonethless was not entitled to moral damages. They left to the sound discretion of the court, according to "the circumstances of each
were only awarded nominal damages amounting to 20K plus 5K for attorney’s fees. CA case." LexLib
affirmed the decision of the lower court. 7. From every viewpoint except that of the petitioner's, its claim of moral damages in the
amount of P1,000,000.00 is nothing short of preposterous. Its business certainly is not
ISSUE: that big, or its name that prestigious, to sustain such an extravagant pretense.
W/N petitoner is entitled damages from the respondent. (Yes) Moreover, a corporation is not as a rule entitled to moral damages because, not being a
RULING: natural person, it cannot experience physical suffering or such sentiments as wounded
1. This Court has carefully examined the facts of this case and finds that it cannot share feelings, serious anxiety, mental anguish and moral shock. The only exception to this
some of the conclusions of the lower courts. It seems to us that the negligence of the rule is where the corporation has a good reputation that is debased, resulting in its
private respondent had been brushed off rather lightly as if it were a minor infraction social humiliation. 
requiring no more than a slap on the wrist. We feel it is not enough to say that the 8. We shall recognize that the petitioner did suffer injury because of the private
private respondent rectified its records and credited the deposit in less than a month as respondent's negligence the caused the dishonor of the checks issued by it. The
if this were sufficient repentance. The error should not have been committed in the first immediate consequence was that its prestige was impaired because of the bouncing
place. The respondent bank has not even explained why it was committed at all. It is checks and confidence in it as a reliable debtor was diminished. The private respondent
true that the dishonored checks were, as the Court of Appeals put it, "eventually" paid. makes much of the one instance when the petitioner was sued in a collection case, but
However, this took almost a month when, properly, the checks should have been paid that did not prove that it did not have a good reputation that could not be marred, more
immediately upon presentment. llcd so since that case was ultimately settled.  t does not appear that, as the private
2. As the Court sees it, the initial carelessness of the respondent bank, aggravated by the respondent would portray it, the petitioner is an unsavory and disreputable entity that
lack of promptitude in repairing its error, justifies the grant of moral damages. This has no good name to protect.
rather lackadaisical attitude toward the complaining depositor constituted the gross 9. Considering all this, we feel that the award of nominal damages in the sum of
negligence, if not wanton bad faith, that the respondent court said had not been P20,000.00 was not the proper relief to which the petitioner was entitled. Under Article
established by the petitioner. 2221 of the Civil Code, "nominal damages are adjudicated in order that a right of the
3. We also note that while stressing the rectification made by the respondent bank, the plaintiff, which has been violated or invaded by the defendant, may be vindicated or
decision practically ignored the prejudice suffered by the petitioner. This was simply recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by
glossed over if not, indeed, disbelieved. The fact is that the petitioner's credit line was him." As we have found that the petitioner has indeed incurred loss through the fault of
canceled and its orders were not acted upon pending receipt of actual payment by the the private respondent, the proper remedy is the award to it of moral damages, which
suppliers. Its business declined. Its reputation was tarnished. Its standing was reduced we impose, in our discretion, in the same amount of P20,000.00. LexLib
in the business community. All this was due to the fault of the respondent bank which 10. The pertinent provisions of the Civil Code are the following:
was undeniably remiss in its duty to the petitioner.
 a. Art. 2229. Exemplary or corrective damages are imposed, by way of P20,000.00, and exemplary damages in the amount of P50,000.00 plus the original award of
example or correction for the public good, in addition to the moral, attorney's fees in the amount of P5,000.00, and costs.
temperate, liquidated or compensatory damages.
b. Art. 2232. In contracts and quasi-contracts, the court may award
exemplary damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner.
11. The banking system is an indispensable institution in the modern world and plays a vital
role in the economic life of every civilized nation. Whether as mere passive entities for
the safekeeping and saving of money or as active instruments of business and
commerce, banks have become an ubiquitous presence among the people, who have
come to regard them with respect and even gratitude and, most of all, confidence.
12. Thus, even the humble wage-earner has not hesitated to entrust his life's savings to the
bank of his choice, knowing that they will be safe in its custody and will even earn some
interest for him. The ordinary person, with equal faith, usually maintains a modest
checking account for security and convenience in the settling of his monthly bills and the
payment of ordinary expenses. As for business entities like the petitioner, the bank is a
trusted and active associate that can help in the running of their affairs, not only in the
form of loans when needed but more often in the conduct of their day-to-day
transactions like the issuance or encashment of checks. prcd
13. In every case, the depositor expects the bank to treat his account with the utmost
fidelity, whether such account consists only of a few hundred pesos or of millions. The
bank must record every single transaction accurately, down to the last centavo, and as
promptly as possible.
14. This has to be done if the account is to reflect at any given time the amount of money
the depositor can dispose of as he sees fit, confident that the bank will deliver it as and
to whomever he directs. A blunder on the part of the bank, such as the dishonor of a
check without good reason, can cause the depositor not a little embarrassment if not
also financial loss and perhaps even civil and criminal litigation.
15. The point is that as a business affected with public interest and because of the nature of
its functions, the bank is under obligation to treat the accounts of its depositors with
meticulous care, always having in mind the fiduciary nature of their relationship. In the
case at bar, it is obvious that the respondent bank was remiss in that duty and violated
that relationship.
16. What is especially deplorable is that, having been informed of its error in not crediting
the deposit in question to the petitioner, the respondent bank did not immediately
correct it but did so only one week later or twenty-three days after the deposit was
made. It bears repeating that the record does not contain any satisfactory explanation
of why the error was made in the first place and why it was not corrected immediately
after its discovery. Such ineptness comes under the concept of the wanton manner
contemplated in the Civil Code that calls for the imposition of exemplary damages.
17. After deliberating on this particular matter, the Court, in the exercise of its discretion,
hereby imposes upon the respondent bank exemplary damages in the amount of
P50,000.00, "by way of example or correction for the public good," in the words of the
law. It is expected that this ruling will serve as a warning and deterrent against the
repetition of the ineptness and indifference that has been displayed here, lest the
confidence of the public in the banking system be further impaired. LLpr

ACCORDINGLY, the appealed judgment is hereby MODIFIED and the private respondent is
ordered to pay the petitioner, in lieu of nominal damages, moral damages in the amount of