1

8epubllc of Lhe hlllpplnes

SUkLML CCUk1
Manlla
SLCCnu ulvlSlCn

G.k. No. 108630 Apr|| 2, 1996
nILIINL NA1ICNAL 8ANk, peLlLloner,
vs.
CCUk1 CI ALALS and LCkL1C 1AN, respondenLs.

kCMLkC, !"#!
eLlLloner hlllpplne naLlonal 8ank (n8) quesLlons Lhe declslon
1
of Lhe CourL of Appeals
parLlally afflrmlng Lhe [udgmenL of Lhe 8eglonal 1rlal CourL, 8ranch 44, 8acolod ClLy. 1he
dlsposlLlve porLlon of Lhe Lrlal courL's declslon sLaLes:
WPL8LlC8L, premlses consldered, Lhe CourL hereby renders [udgmenL ln favor of
Lhe plalnLlff and agalnsL Lhe defendanLs as follows:
1) Crderlng defendanLs Lo pay plalnLlff [olnLly and severally Lhe sum of
32,480.00, wlLh legal raLe of lnLeresL Lo be compuLed from May 2, 1979, daLe of
flllng of Lhls complalnL unLll fully pald,
2) Crderlng defendanLs Lo pay plalnLlff [olnLly and severally Lhe sum of 3,000.00
as exemplary damages,
3) Crderlng defendanLs Lo pay plalnLlff [olnLly and severally Lhe sum of 3,000.00
as aLLorney's fees, and
4) 1o pay Lhe cosLs of Lhls sulL.
SC C8uL8Lu.
2

1he facLs are Lhe followlng:
rlvaLe respondenL LoreLo 1an (1an) ls Lhe owner of a parcel of land abuLLlng Lhe naLlonal
hlghway ln Mandalagan, 8acolod ClLy. LxproprlaLlon proceedlngs were lnsLlLuLed by Lhe
governmenL agalnsL prlvaLe respondenL 1an and oLher properLy owners before Lhe Lhen CourL of
llrsL lnsLance of negros CccldenLal, 8ranch lv, dockeLed as Clvll Case no. 12924.
2
1an flled a moLlon daLed May 10, 1978 requesLlng lssuance of an order for Lhe release Lo hlm of
Lhe exproprlaLlon prlce of 32,480.00.
Cn May 22, 1978, peLlLloner n8 (8acolod 8ranch) was requlred by Lhe Lrlal courL Lo release Lo
1an Lhe amounL of 32,480.00 deposlLed wlLh lL by Lhe governmenL.
Cn May 24, 1978, peLlLloner, Lhrough lLs AsslsLanL 8ranch Manager !uan 1agamollla, lssued a
manager's check for 32,480.00 and de||vered the same to one Son|a Gonzaga w|thout 1an's
know|edge, consent or author|ty. Sonla Conzaga deposlLed lL ln her accounL wlLh lar LasL 8ank
and 1rusL Co. (lL81C) and laLer on wlLhdrew Lhe sald amounL.
r|vate respondent 1an subsequent|y demanded payment |n the amount of 32,480.00 from
pet|t|oner, but the same was refused on the ground that pet|t|oner had a|ready pa|d and
de||vered the amount to Son|a Gonzaga on the strength of a Spec|a| ower of Attorney (SA)
a||eged|y executed |n her favor by 1an.
Cn !une 8, 1978, 1an execuLed an affldavlL before peLlLloner's lawyer, Ale[andro S. Some, sLaLlng
LhaL:
1) he had never execuLed any Speclal ower of ALLorney ln favor of Sonla S. Conzaga,
2) he had never auLhorlzed Sonla Conzaga Lo recelve Lhe sum of 32,480.00 from peLlLloner,
3) he slgned a moLlon for Lhe courL Lo lssue an Crder Lo release Lhe sald sum of money Lo hlm
and gave Lhe same Lo Mr. nllo Conzaga (husband of Sonla) Lo be flled ln courL. Powever, afLer
Lhe Crder was subsequenLly lssued by Lhe courL, a cerLaln Lnglneer uecena of Lhe Plghway
Lnglneer's Cfflce lssued Lhe auLhorlLy Lo release Lhe funds noL Lo hlm buL Lo Mr. Conzaga.
When he falled Lo recover Lhe amounL from n8, prlvaLe respondenL flled a moLlon wlLh Lhe
courL Lo requlre n8 Lo pay Lhe same Lo hlm.
eLlLloner flled an opposlLlon conLendlng LhaL Sonla Conzaga presenLed Lo lL a copy of Lhe May
22, 1978 order and a speclal power of aLLorney by vlrLue of whlch peLlLloner dellvered Lhe check
Lo her.
1he maLLer was seL for hearlng on !uly 21, 1978 and peLlLloner was dlrecLed by Lhe courL Lo
produce Lhe sald speclal power of aLLorney LhereaL. Powever, peLlLloner falled Lo do so.
1he courL declded LhaL Lhere was need for Lhe maLLer Lo be venLllaLed ln a separaLe clvll acLlon
and Lhus prlvaLe respondenL flled a complalnL wlLh Lhe 8eglonal 1rlal CourL ln 8acolod ClLy
(8ranch 44) agalnsL peLlLloner and !uan 1agamollla, n8's AsslsLanL 8ranch Manager, Lo recover
Lhe sald amounL.
ln lLs defense, peLlLloner conLended LhaL prlvaLe respondenL had duly auLhorlzed Sonla Conzaga
Lo acL as hls agenL.
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Cn SepLember 28, 1979, peLlLloner flled a Lhlrd-parLy complalnL agalnsL Lhe spouses nllo and
Sonla Conzaga praylng LhaL Lhey be ordered Lo pay prlvaLe respondenL Lhe amounL of
32,480.00. Powever, for fa||ure of pet|t|oner to have the summons served on the Gonzagas
desp|te opportun|t|es g|ven to |t, the th|rd-party comp|a|nt was d|sm|ssed.
1agamollla, ln hls answer, sLaLed LhaL Sonla Conzaga presenLed a Speclal ower of ALLorney Lo
hlm buL borrowed lL laLer wlLh Lhe promlse Lo reLurn lL, clalmlng LhaL she needed lL Lo encash
Lhe check.
Cn !une 7, 1989, Lhe Lrlal courL rendered [udgmenL orderlng peLlLloner and 1agamollla Lo pay
prlvaLe respondenL [olnLly and severally Lhe amounL of 32,480.00 wlLh legal lnLeresL, damages
and aLLorney's fees.
8oLh peLlLloner and 1agamollla appealed Lhe case Lo Lhe CourL of Appeals.
ln a resoluLlon daLed Aprll 8, 1991, Lhe appellaLe courL dlsmlssed 1agamollla's appeal for fallure
Lo pay Lhe dockeL fee wlLhln Lhe reglemenLary perlod.
Cn AugusL 31, 1992, Lhe CourL of Appeals afflrmed Lhe declslon of Lhe Lrlal courL agalnsL
peLlLloner, wlLh Lhe modlflcaLlon LhaL Lhe award of 3,000.00 for exemplary damages and
3,000.00 for aLLorney's fees by Lhe Lrlal courL was deleLed.
Pence, Lhls peLlLlon.
eLlLloner n8 sLaLes LhaL Lhe lssue ln Lhls case ls wheLher or noL Lhe SA ever exlsLed. lL argues
LhaL Lhe exlsLence of Lhe SA need noL be proved by lL under Lhe "besL evldence rule" because lL
already proved Lhe exlsLence of Lhe SA from Lhe LesLlmonles of lLs wlLnesses and by Lhe
cerLlflcaLlon lssued by Lhe lar LasL 8ank and 1rusL Company LhaL lL allowed Sonla Conzaga Lo
encash 1an's check on Lhe basls of Lhe SA.
We flnd Lhe peLlLlon unmerlLorlous.
1here ls no quesLlon LhaL no paymenL had ever been made Lo prlvaLe respondenL as Lhe check
was never dellvered Lo hlm. When Lhe courL ordered peLlLloner Lo pay prlvaLe respondenL Lhe
amounL of 32,480.00, lL had Lhe obllgaLlon Lo dellver Lhe same Lo hlm. under Art. 1233 of the
C|v|| Code, a debt sha|| not be understood to have been pa|d un|ess the th|ng or serv|ce |n
wh|ch the ob||gat|on cons|sts has been comp|ete|y de||vered or rendered, as the case may be.
1he burden of proof of such paymenL lles wlLh Lhe debLor.
3
ln Lhe lnsLanL case, nelLher Lhe SA
nor Lhe check lssued by peLlLloner was ever presenLed ln courL.
1he LesLlmonles of peLlLloner's own wlLnesses regardlng Lhe check were confllcLlng. 1agamollla
LesLlfled LhaL Lhe check was lssued Lo Lhe order of "Sonla Conzaga as aLLorney-ln-facL of LoreLo
1an,"
4
whlle Llvlra 1lbon, asslsLanL cashler of n8 (8acolod 8ranch), sLaLed LhaL Lhe check was
lssued Lo Lhe order of "LoreLo 1an."
S

4
lurLhermore, conLrary Lo peLlLloner's conLenLlon LhaL all LhaL ls needed Lo be proved ls Lhe
exlsLence of Lhe SA, lL ls also necessary for evldence Lo be presenLed regardlng Lhe naLure and
exLenL of Lhe alleged powers and auLhorlLy granLed Lo Sonla Conzaga, more speclflcally, Lo
deLermlne wheLher Lhe documenL lndeed auLhorlzed her Lo recelve paymenL lnLended for
prlvaLe respondenL. Powever, no such evldence was ever presenLed.
SecLlon 2, 8ule 130 of Lhe 8ules of CourL sLaLes LhaL:
Sec. 2. "#$%$&'( *#$+$&% ,-.+ !#/0-120, 2312!+$/&.. 1here can be no evldence of
a wrlLlng Lhe conLenLs of whlch ls Lhe sub[ecL of lnqulry, oLher Lhan Lhe orlglnal
wrlLlng lLself, excepL ln Lhe followlng cases:
(a) When Lhe orlglnal has been losL, desLroyed, or cannoL be produced ln courL,
(b) When Lhe orlglnal ls ln Lhe possesslon of Lhe parLy agalnsL whom Lhe evldence
ls offered, and Lhe laLLer falls Lo produce lL afLer reasonable noLlce,
(c) When Lhe orlglnal ls a record or oLher documenL ln Lhe cusLody of a publlc
offlcer,
(d) When Lhe orlglnal has been recorded ln an exlsLlng record a cerLlfled copy of
whlch ls made evldence by law,
(e) When Lhe orlglnal conslsLs of numerous accounLs or oLher documenLs whlch
cannoL be examlned ln courL wlLhouL greaL loss of Llme and Lhe facL soughL Lo be
esLabllshed from Lhem ls only Lhe general resulL of Lhe whole.
SecLlon 4, 8ule 130 of Lhe 8ules of CourL allows Lhe presenLaLlon of secondary evldence when
Lhe orlglnal ls losL or desLroyed, Lhus:
Sec. 4. 421/&0'#5 26$02&12 *72& /#$%$&'( $. (/.+ /# 02.+#/520. When Lhe orlglnal
wrlLlng has been losL or desLroyed, or cannoL be produced ln courL, upon proof of
lLs execuLlon and loss or desLrucLlon, or unavallablllLy, lLs conLenLs may be proved
by a copy, or by a reclLal of lLs conLenLs ln some auLhenLlc documenL, or by Lhe
recollecLlon of wlLnesses.
Conslderlng LhaL Lhe conLenLs of Lhe SA are also ln lssue here, Lhe best ev|dence ru|e applles.
Pence, only Lhe orlglnal documenL (whlch has noL been presenLed aL all) ls Lhe besL evldence of
Lhe facL as Lo wheLher or noL prlvaLe respondenL lndeed auLhorlzed Sonla Conzaga Lo recelve
Lhe check from peLlLloner. ln Lhe absence of such documenL, peLlLloner's argumenLs regardlng
due paymenL musL fall.
8egardlng Lhe award of aLLorney's fees, we hold LhaL prlvaLe respondenL 1an ls enLlLled Lo Lhe
same. ArL. 2208 of Lhe Clvll Code allows aLLorney's fees Lo be awarded lf Lhe clalmanL ls
5
compelled Lo llLlgaLe wlLh Lhlrd persons or Lo lncur expenses Lo proLecL hls lnLeresL by reason of
an un[usLlfled acL or omlsslon of Lhe parLy from whom lL ls soughL.
6

ln 8'./&'9(2 6. :;8<= 2+ '(.,
7
we held LhaL when a parLy ls forced Lo llLlgaLe Lo proLecL hls rlghLs,
he ls enLlLled Lo an award of aLLorney's fees.
As for Lhe award of exemplary damages, we agree wlLh Lhe appellaLe courL LhaL Lhe same should
be deleLed.
under ArL. 2232 of Lhe Clvll Code, exemp|ary damages may be awarded |f a party acted |n a
wanton, fraudu|ent, reck|ess, oppress|ve, or ma|evo|ent manner. Powever, Lhey cannoL be
recovered as a maLLer of rlghL, Lhe courL has yeL Lo declde wheLher or noL Lhey should be
ad[udlcaLed.
8

!urlsprudence has seL down Lhe requlremenLs for exemplary damages Lo be awarded:
1. Lhey may be lmposed by way of example ln addlLlon Lo compensaLory damages, and only afLer
Lhe clalmanL's rlghL Lo Lhem has been esLabllshed,
2. Lhey cannoL be recovered as a maLLer of rlghL, Lhelr deLermlnaLlon dependlng upon Lhe
amounL of compensaLory damages LhaL may be awarded Lo Lhe clalmanL,
3. Lhe acL musL be accompanled by bad falLh or done ln a wanLon, fraudulenL, oppresslve or
malevolenL manner.
9

ln Lhe case aL bench, whlle Lhere ls a clear breach of peLlLloner's obllgaLlon Lo pay prlvaLe
respondenLs, Lhere ls no evldence LhaL lL acLed ln a fraudulenL, wanLon, reckless or oppresslve
manner. lurLhermore, Lhere ls no award of compensaLory damages whlch ls a prerequlslLe
before exemplary damages may be awarded. 1herefore, Lhe award by Lhe Lrlal courL of
3,000.00 as exemplary damages ls baseless.
WnLkLICkL, the dec|s|on of the Court of Appea|s |s AIIIkMLD w|th the mod|f|cat|on that the
award by the keg|ona| 1r|a| Court of S,000.00 as attorney's fees |s kLINS1A1LD.
SC CkDLkLD.