PNB Vs Rocamora

PHILIPPINE NATIONAL BANK, petitioner, vs. SPOUSES The RTC dismissed PNB’s complaint.
PNB’s complaint. The finding that the bank’s

AGUSTIN and PILAR ROCAMORA, respondents. actions were contrary to law, justice, and morals justified the award of
G.R. No. 164549. September 18, 2009 actual, moral, and exemplary damages to the respondents. Attorney’s
fees and costs of suit were also ordered paid.
FACTS:
Modifying RTC’s ruling by removing the actual damage and reducing
On September 25, 1981, the spouses Rocamora obtained a loan from other awarded damages, the Court of Appeals (CA) decision affirmed
PNB in the aggregate amount of P100,000.00 payable in five years. In the RTC ruling.
addition to the principal amount, the respondents agreed to pay
interest at the rate of 12% per annum, plus a penalty fee of 5% per ISSUE:
annum in case of delayed payments. The respondents signed two
promissory notes evidencing the loan. 1. WON PNB can recover the deficiency? [NO]
2. WON Sps. Rocamora are entitled to damages? [NO]
To secure their loan obligations, the respondents executed a real
estate mortgage in the amount of P10,000, and a chattel mortgage RULING:
in the amount of P25,000. Payment of the remaining P65,000 was
under the guarantee, with the respondents paying the required We find it significant that PNB has been consistently unable to provide
guarantee fee. Both the promissory note and the real estate mortgage a detailed and credible accounting of the claimed deficiency. What
deed contained an escalation clause that allowed PNB to increase appears clear is that after adding up the respondents’ partial
the 12% interest rate at anytime without notice, within the limits payments and the proceeds of the foreclosure, the PNB has already
allowed by law received a total of P107,883.68 as payment for the respondents’
P100,000.00 loan; the claimed P206,297.47 deficiency consisted
The respondents only paid a total of P32,383.655 on the loan. Hence, mainly of interests and penalty charges.
the PNB commenced foreclosure proceedings thereafter. The
foreclosure of the mortgaged properties yielded P75,500.00 as total Moral damages are not recoverable simply because a contract has
proceeds. After the foreclosure, PNB found that the recovered been breached. They are recoverable only if the defendant acted
proceeds and the amounts the respondents previously paid were not fraudulently or in bad faith or in wanton disregard of his contractual
sufficient to satisfy the loan obligations. PNB thus filed, on January obligations.
18, 1994, a complaint for deficiency judgment before the Regional
Trial Court (RTC). Art. 2220. Willful injury to property may be a legal ground for
awarding moral damages if the court should find that, under
The PNB claimed that the outstanding principal balance as of the circumstances, such damages are justly due. The same
foreclosure date (September 19, 1990) was P79,484.65, plus interest rule applies to breaches of contract where the defendant acted
and penalties, for a total due and demandable obligation of fraudulently or in bad faith.
P250,812.10. Allegedly, after deducting the P75,500 proceeds of the
foreclosure sale, the respondents still owed the bank P206,297.47. The breach must be wanton, reckless, malicious or in bad faith, and
oppressive or abusive. Likewise, a breach of contract may give rise to
The respondents refused to pay and alleged that the PNB “practically exemplary damages only if the guilty party acted in a wanton,
created” the deficiency by (a) increasing the interest rates from 12% fraudulent, reckless, oppressive or malevolent manner.
to 42% per annum, and (b) failing to immediately foreclose the
mortgage. We are not sufficiently convinced that PNB acted fraudulently, in bad
faith, or in wanton disregard of its contractual obligations, simply
because it increased the interest rates and delayed the foreclosure of
the mortgages. Bad faith pertains to a dishonest purpose, to some
moral obliquity, or to the conscious doing of a wrong, a breach of a
known duty attributable to a motive, interest or ill will that partakes of
the nature of fraud. Proof of actions of this character is undisputably
lacking in this case. Consequently, we do not find the respondents
entitled to an award of moral and exemplary damages. Under these
circumstances, neither should they recover attorney’s fees and
litigation expense.
Petition is DENIED. CA’s decision is MODIFIED by deleting the moral

and exemplary damages, attorney’s fees, and litigation costs awarded
to the respondents. All other aspects of the assailed decision are
AFFIRMED.

PNB Vs Rocamora

Uploaded by

Copyright:

Available Formats

PNB Vs Rocamora

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PNB Vs Rocamora

Uploaded by

Copyright:

Available Formats

PHILIPPINE NATIONAL BANK, petitioner, vs. SPOUSES The RTC dismissed PNB’s complaint.

PNB’s complaint. The finding that the bank’s

Petition is DENIED. CA’s decision is MODIFIED by deleting the moral

You might also like