Willful injury

Moral damages may be awarded if: (1) there is physical or mental or psychological injury suffered by the claimant; (2) the culpable act or omission causing such injury has been factually established; (3) said act or omission is the proximate cause of the injury sustained by the claimant; (4) the award of damages is predicated on any of the cases enumerated in Article 2219 of the Civil Code such as causing loss or injury in a manner contrary to morals, good customs or public policy under Article 21 of the same code. The following case of Caridad illustrates when the award of moral damages is proper.

Caridad works in a local electric company in her province first as an executive secretary, then as a department secretary. She is also a deaconess in a protestant Church and a bank depositor of long standing in a large commercial bank (SBC).

In March 1990 Caridad issued SBC check no. 0293984 in the amount of P330 in payment of her purchases from a department store. When the check was deposited by the store to its account, the same was dishonored due to "Account Closed" despite the fact that at the time it was presented for payment Caridad’s checking account was still active and had a balance of P1,275.20.

As a consequence of the dishonor, the department store sent a demand letter to Caridad threatening her with criminal prosecution unless she redeemed the check within 5 days. To avoid criminal prosecution, Caridad paid P330 in cash to the store plus a surcharge of P33 for the bouncing check.

Thereupon Caridad filed a complaint against SBC for damages alleging that the bank, by its carelessness and recklessness in certifying that her account was closed despite the fact that it was still very much active and sufficiently funded had destroyed her good name and reputation and prejudiced not only herself but also her family in the form of mental anguish, sleepless nights, wounded feelings and social humiliation because the people she worked with, her friends, her family and even her daughter’s classmates learned and talked about her bounced check. She thus prayed for moral and exemplary damages and attorney’s fees.

In answer, SBC claimed good faith in declaring her account closed since one of the clerks, who substituted for the regular clerk, committed an honest mistake when he thought that the account was already closed because the ledger containing said account could not be found. Could Caridad recover the damages she was asking?

Yes. All the four requisites for the award of moral damages are present.

First, Caridad no doubt has a high social standing in the community because of the position she occupies in her work and in her church. Understandably she suffered mental anguish, serious anxiety, besmirched reputation, wounded feelings and social humiliation in her workplace, in her own home and in the church where she served as deaconess.

Second, SBC is guilty of wrongful act of dishonoring her check that was adequately funded.

Third, the wrongful dishonor of the check was the proximate cause of her embarrassment and humiliation since it was the cause which in natural and continues sequence unbroken by intervening cause produced the result complained of and without which it would not have occurred. Had the bank accepted and honored the check, Caridad would not have had to face the question of and explain her predicament to her officemates, her daughter’s classmates and the leaders and members of her church.

Fourth, treating Caridad’s account as closed merely because the ledger could not be found was a reckless act that could not be simply brushed off as an honest mistake. Banking industry is impressed with public interest that the highest degree of diligence is expected and high standards of integrity and performance are required. By the nature of its functions, a bank is under obligation to treat the accounts of its depositors with meticulous care and always to have in mind the fiduciary nature of its relationship with them. SBC’s negligence here was so gross as to amount to a willful injury to Caridad that renders it liable for moral and exemplary damages to her under Article 2219 in relation to Article 21 of the Civil Code. Caridad was thus awarded P20,000 moral damages, P20,000 exemplary damages and P20,000 attorney’s fees (Solidbank Corporation vs. Arrieta G.R. No. 152720, February 17, 2005. 451 SCRA 711).

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