G.R. No. 116181 , April 17, 1996
PHILIPPINE NATIONAL BANK, PETITIONER, VS. COURT OF APPEALS AND CARMELO H. FLORES, RESPONDENTS.

FACTS

On July 11, 1989, private respondent Carmelo H. Flores purchased two manager’s checks worth P500,000 each from petitioner PNB’s Manila Pavilion Hotel unit, paying a total of P1,000,040, for which a receipt was issued. The following day, Flores presented these checks for encashment at PNB’s Baguio Hyatt Casino unit. PNB refused to encash both checks outright but, after discussion, agreed to encash one. For the other, PNB deferred payment, insisting it be broken into five checks of P100,000 each and further refusing to encash one of these until it was cleared by the Manila unit. Flores reluctantly agreed. Subsequent demands for payment in Manila were ignored, compelling Flores to file an action for damages.
PNB, in its defense, alleged that Flores only paid P900,040, not P1,000,040. It claimed a teller, distracted by Flores’s “demanding attitude,” made a good faith error in issuing the receipt for the higher amount. The Regional Trial Court ruled in favor of Flores, ordering PNB to pay the P100,000 check value, P1 million in moral damages, P1 million in exemplary damages, P50,000 in attorney’s fees, and costs. The Court of Appeals affirmed this decision in toto.

ISSUE

(1) Whether the receipt is the best evidence of the amount paid by Flores; (2) Whether PNB could present evidence aliunde to contradict the receipt; and (3) Whether the awards for moral and exemplary damages were excessive.

RULING

The Supreme Court modified the decision, affirming PNB’s liability but reducing the damages. On the first two issues, the Court held that while a receipt is merely presumptive evidence and can be contradicted, PNB failed to present clear and convincing evidence to overcome this presumption. The self-serving testimony of its teller, uncorroborated by other evidence like cash count sheets or audit reports, was insufficient to prove a mistake. The receipt thus remained credible evidence of full payment.
On the third issue, the Court sustained the award of moral damages but found the amount excessive. PNB’s unjustified refusal to honor its own manager’s check, a security supposed to be as good as cash, constituted gross negligence amounting to bad faith, causing Flores embarrassment and distress. However, reducing the award to P100,000 was deemed equitable. The award of exemplary damages was also excessive; reduced to P25,000, it serves as a deterrent. The award of P50,000 in attorney’s fees was affirmed as just under the circumstances. The bank’s failure to honor its solemn commitment undermines public confidence in banking institutions.