Mambulao Lumber Company vs PNB 22 SCRA 350

Facts:
Plaintiff applied for an industrial loan of 155,000 with Phil. National Bank (PNB) and
was approved for a loan of 100,000. To secure the payment, the plaintiff mortgaged
a parcel of land together with the buildings and improvements existing as well as
various equipments.
The plaintiff failed to pay the amortization even with repeated demands. Upon
inspection and verification it was found out that the plaintiff had already stopped
operation. Then PNB sent a letter to the Provincial Sheriff requesting him to take
possession of the parcel of land and the improvements thereon for the satisfaction
of the unpaid obligation. The mortgaged property and equipments were sold at
public auction. Aggrieved, hence this petition.
Issue:
Whether or not the plaintiff has the cause of action and can claim for moral
damages over the wrongful acts of the PNB and sheriff.
Rulling:
The law provide the requirements for a valid judicial and extra-judicial foreclosure
and as a consequence for the wrongful acts, the plaintiff is entitled to collect from
them jointly and severally the full value of the chattels in question at the time they
were illegally sold by them.
The claim for moral damages have no legal or factual basis. Obviously, an artificial
person like corporation cannot experience physical sufferings, mental anguish,
fright, serious anxiety, wounded feelings, moral shock or social humiliation which
are basis of moral damages. A corporation may have a good reputation which if
besmirched, may also be a ground for the award of moral damages. Under the facts
of this case, it cannot awarded because the company already ceased in its business
operation at the time of the foreclosure sale of the chattels.
Instead SC awarded exemplary damages for disposing the chattels in gross
miserable amount.