G.R. No. 148789; January 16, 2003
BPI FAMILY SAVINGS BANK, INC. AND HEDZELITO NOEL BAYABORDA, petitioners, vs. ROMEO MANIKAN, respondent.

FACTS

Respondent Romeo Manikan, the City Treasurer of Iloilo City, assessed petitioner BPI Family Savings Bank, Inc. business taxes for 1992 and 1993. On January 26, 1994, the bank issued two manager’s checks payable to the City Treasurer: one for P462,270.60 (1992 tax) and another for P482,988.45 (1993 tax). Hedzelito Bayaborda, the bank’s Iloilo Branch manager, instructed an employee to deliver the checks to the Secretary to the City Mayor, Toto Espinosa, who then gave them to his secretary, Leila Salcedo, for transmittal to the City Treasurer. The checks were credited to the City Treasurer’s account but were misapplied to pay the tax liabilities of other taxpayers, not the bank’s, upon the representation of Leila Salcedo. Upon discovering the misapplication, the bank demanded that the City Treasurer issue official receipts for its tax payments. When he refused, petitioners sued for mandamus and damages.

ISSUE

1. Whether petitioners have a clear legal right to demand, via a writ of mandamus, the issuance of official receipts for their business tax payments given the misapplication of the manager’s checks.
2. Whether the award of attorney’s fees in favor of the respondent City Treasurer was proper.

RULING

1. No. The Supreme Court denied the petition for mandamus. For a writ of mandamus to issue, the petitioner must have a clear legal right to the performance of a duty, and the respondent must have a correlative imperative duty to perform. The Court found no such clear right in this case. While a manager’s check is regarded as good as cash, the bank assumed the risk of misuse by delivering the checks to a person (the City Mayor’s Secretary) not directly charged with tax collection, instead of to the City Treasurer’s office itself. The bank fell short of the diligence expected. Thus, it could not compel the City Treasurer to issue receipts for payments not properly applied to its account. The bank’s remedy lies in pursuing an action against those responsible for the misapplication or who were unjustly benefited.
2. No. The Supreme Court deleted the award of attorney’s fees. The Court held that an award of attorney’s fees as damages requires factual and legal justification under Article 2208 of the Civil Code. No premium should be placed on the right to litigate, and attorney’s fees are not recoverable merely because a party obtains a favorable judgment. The Court found no justification for the award in this instance.
The appealed decision was AFFIRMED with the MODIFICATION that the award of attorney’s fees in favor of respondent was deleted.