UCPB v. Ramos | G.R No. 147800 | November 11, 2003 | Callejo, Sr., J.
Nature: Petition for review on certiorari
Petitioner: United Coconut Planters Bank
Respondent: Teofilo C. Ramos
TOPIC Moral damages
SUMMARY Petitioner UCPB caused the annotation of a levy on Respondent’s property (Respondent and UCPB’s debtor
shares a name). When Respondent’s company tried to obtain a loan from UCPB, it wasn’t allowed because of the
existence of the levy. After suffering sleepless nights, moral shock, mental anguish, and almost having a heart attack,
because of the mistaken annotation, Respondent filed a complaint for damages against UCPB. All courts decided in favor
of the Respondent, and awarded him moral damages and attorney’s fees. SC deleted RTC’s award of exemplary
damages. Court held that UCPB’s negligence in causing the wrongful annotation on Respondent’s property was the
proximate cause of the latter’s sufferings and injury.
For the award of moral damages to be granted, the following must exist:
- There must be an injury clearly sustained by the claimant, whether physical, mental or psychological;
- There must be a culpable act or omission factually established;
- The wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant;
and
- The award for damages is predicated on any of the cases stated in Article 2219 of the Civil Code.
FACTS
UCPB granted ZDC (Zamboanga Development Corporation) a loan with Venicio Ramos and spouse Teofilo
Ramos, Sr. and Amelita Ramos as sureties. When ZDC failed to pay, UCPB filed a collection complaint and won.
o When the decision became final and executory, Deputy Sheriff Pioquinto Villapaña was ordered to levy
and attach real and personal properties of then-defendants to satisfy the judgment.
o Sheriff prepared a notice of levy and caused its annotation in the title of a property in Don Jose Subd,
Quezon City, registered under the name of Respondent Teofilo C. Ramos, married to Rebecca F. Ramos
and President of Ramdustrial Corporation.
Lot was a residential lot which is also the [insert abode]
Ramdustrial Corp applied for a loan with UCPB. They didn’t get the loan because there is a levy attached to the
property of Respondent.
o Because of shock, respondent had to go to the doctor because his blood temperature rose.
Respondent executed an affidavit of denial, saying that the Teofilo Ramos, Sr. in the case against ZDC is not the
same Teofilo C. Ramos, who is herein respondent.
o Respondent also informed the Sheriff that the annotation he made was irregular and unlawful, and
demanded that the Sheriff cause its cancellation.
Atty Cesar Bordalba (Petitioner’s counsel) suggested that respondent file the appropriate
pleading (instead of Petitioner or the Sheriff).
Ramdustrial’s credit line application was approved, and Respondent and his wife acted as sureties. BUT, when
the money was released, the bidding for the San Miguel Corporation project had already elapsed. As business
did not go well, Respondent had a difficult time paying the loan.
Respondents sought an additional loan with UCPB, but it was denied.
o Respondent went to PDB (Planters Development Bank) for a loan, the proceeds of which will be used to
pay off the loan with UCPB. PDB agreed to pay off Respondent’s outstanding loan with UCPB.
Respondent agreed to mortgage his property for the loan (same property that was mistakenly levied
against).
BUT, apparently, the levy had not yet been cancelled. Therefore, PDB withheld the release of
the loan.
Petitioner’s counsel again suggested that Respondent file a motion to cancel the levy. They assured Respondent
that the motion will not be opposed.
o Levy was eventually cancelled.
Respondent filed a complaint for damages against Sheriff Villapaña and Petitioner UCPB.
o Respondent aver that: Without legal basis, defendants caused the annotation of a notice of levy against
his property which caused the disapproval of his loan. Because of this, he lost an opportunity to
participate in the bidding of a considerable project. He suffered sleepless nights, moral shock, mental
anguish and almost had a heart attack due to high blood pressure.
o Prayed for: 3M moral damages, 330k exemplary damages, 200k actual damages, 200k atty’s fees, and
costs of suit.
o Petitioner: admitted their mistake but denied malice and bad faith. They told Respondent to file the
necessary pleadings, but Respondent dilly-dallied. Therefore, the damages he sustained was due to him,
and not to UCPB.
o RTC ruled in favor of Respondent but the complaint against the Sheriff was dismissed. Awarded
Respondents 800k moral damages, 100k exemplary damages, 100k atty’s fees and cost of suit. CA
affirmed.
RTC: Petitioner proceeded with hased in making the annotation despite the discrepancy in the owner’s name
and their debtor’s name. They did not conclusively ascertain that they were the same person.
o Property levied against was Respondent’s only property and where he and his family resided. The
thought of losing it gave rise to his entitlement to moral damages.
o Mere fact that Petitioner didn’t file an opposition to Respondent’s motion to cancel the levy did not
negate their negligence and bad faith. The cancellation of the levy is only mitigating.
o For failure to show that he suffered actual damages, court refused to award it to Respondent.
Petitioner filed the instant petition assigning the following errors:
o The borrower of the loan was Ramdustrial, not Respondent, hence it was Ramdustrial who suffered
damages, not Respondent.
o Delay in the cancellation of the annotation was caused by Respondent.
o Loan applications were granted even before the cancellation of the annotation.
o UCPB was not negligent when it caused the levy.
o Moral damages cannot be awarded on a finding of mere negligence.
o Award of exemplary damages and atty’s fees is contrary to law.
ISSUE: WON Respondent is entitled to moral damages? – YES
1) WON Petitioner was negligent? YES
Petitioner is a banking corporation, and is affected with public interest. A bank concerns itself with proper
information regarding its debtors, and are expected to ascertain and verify the identities of the persons it
transacts with.
Even when they were informed by Respondent, Petitioner failed to cause the cancellation of the annotation.
Petitioner should have acted more cautiously. But the disregarded the uncertainty in the owner of the
property as a flimsy matter, and gave more importance to the marketability of the said property.
Teofilo Ramos, Sr. (married to Amelita) and Teofilo C. Ramos (married to Rebecca). these are
material differences. If only Petitioner tried to ascertain the identity of the owner, they would have
found out that Respondent is a different person.
Petitioner acted negligently, and that negligence was the total proximate cause of the damages sustained by
Respondent.
2) WON Respondent was the real party in interest? – YES
Respondent clearly stated that he suffered sleepless nights, moral shock, and almost had a heart attack. He
was also the owner of the property. The levy prevented him to exercise his right to enjoy it (to mortgage it).
3) What is Respondent entitled to? Moral damages and atty’s fees. NOT exemplary damages.
For the award of moral damages to be granted, the following must exist:
There must be an injury clearly sustained by the claimant, whether physical, mental or
psychological;
There must be a culpable act or omission factually established;
The wrongful act or omission of the defendant is the proximate cause of the injury sustained by
the claimant; and
The award for damages is predicated on any of the cases stated in Article 2219 of the Civil Code.
All 4 requisites were established:
Respondent sustained injuries: his physical health suffered, and his reputation as mortgagor had
been tarnished.
Annotation of notice of levy was wrongful, arising as it did from Petitioner’s negligent act.
The wrongful levy was the proximate cause of Respondent’s misery.
Award is predicated on Article 2219, #10.
Exemplary damages: can’t be allowed since Respondent failed to show that Petitioner acted with malice and
bad faith.
Atty’s fees: is awarded when a party is compelled to litigate or to incur expenses to protect his interest by
reason of an unjustified act of the other party. Here, Respondent was forced to incur expenses of litigation.
DISPOSITION: WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No. 56737 is AFFIRMED WITH
MODIFICATION. The award for exemplary damages is deleted. No costs.
