56. Phil. Savings Bank v. Sps.

Castillo FACTS: Respondent spouses Alfredo Castillo and Elizabeth Capati-Castillo and Romeo Capati and Aquilina Lobo obtained a loan with real estate mortgage over their respective properties from petitioner Philippine Savings Bank, as evidenced by a Promissory Note. From the release of the loan in May 1997 until December 1999, petitioner had increased and decreased the rate of interest with notification of such in writing to the respondents. While the respondents neither gave their confirmation thereto nor did they formally question the changes, respondent Alfredo Castillo nevertheless requested petitioner in writing for the reduction of the interest rates to which the latter denied. When respondents defaulted in their payment in December 1999 due to financial constraints, petitioner initiated an extrajudicial foreclosure sale of the mortgaged properties with the latter as the only bidder. Thereafter, the respondents failed to redeem the property within the redemption period. As such, the respondents filed a case for Reformation of Instruments, Declaration of Nullity of Notarial Foreclosure Proceedings and Certificate of Sale, Cancellation of Annotations on TCT Nos. 233242 and 227858, and Damages. The CA affirmed with modifications the ruling of the RTC in favor of the respondents. Hence, this petition. ISSUE: Whether or not the respondents are entitled to an award of damages. HELD: NO. Moral damages are not recoverable simply because a contract has been breached. They are recoverable only if the party from whom it is claimed acted fraudulently or in bad faith or in wanton disregard of his contractual obligations. The breach must be wanton, reckless, malicious or in bad faith, and oppressive or abusive. Likewise, a breach of contract may give rise to exemplary damages only if the guilty party acted in a fraudulent or malevolent manner. In this case, the Court is not sufficiently convinced that fraud, bad faith, or wanton disregard of contractual obligations can be imputed to petitioner simply because it unilaterally imposed the changes in interest rates, which can be attributed merely to bad business judgment or attendant negligence. 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. Respondents failed to sufficiently establish this requirement. Thus, the award of moral and exemplary damages is unwarranted.

57. People of the Phils. v. Rosendo Rebucan y Lamsin FACTS: Accused-appellant Rosendo Rebucan was charged with the crime of double murder for allegedly assaulting Felipe Lagera and Ranil Tagpis with the use of a long bolo, thereby inflicting upon the latter wounds which caused their death. After trial, the RTC convicted accused-appellant of the crime of double murder and awarded damages to the heirs of the victims. On appeal, in addition to the damages that were reduced by the CA, exemplary damages were also awarded. Hence, this petition. ISSUE: Whether or not the award of damages by the lower court is proper. HELD: YES. Anent the award of damages, when death occurs due to a crime, the following may be recovered: (1) civil indemnity ex delicto for the death of the victim; (2) actual or compensatory damages; (3) moral damages; (4) exemplary damages; (5) attorney's fees and expenses of litigation; and (6) interest, in proper cases. Civil indemnity is mandatory and granted to the heirs of the victim without need of proof other than the commission of the crime. Similarly, moral damages may be awarded by the court for the mental anguish suffered by the heirs of the victim by reason of the latters death. The purpose for making such an award is not to enrich the heirs of the victim but to compensate them for injuries to their feelings. The award of exemplary damages, on the other hand, is provided under Articles 2229-2230 of the Civil Code. Thus, the Court affirms the Court of Appeals award of damages. In lieu of actual or compensatory damages, the Court further orders the award of P25,000.00 temperate damages to the heirs of the two victims in this case. Such award of damages in homicide or murder cases is proper when no evidence of burial and funeral expenses is presented in the trial court. Under Article 2224 of the Civil Code, temperate damages may be recovered, as it cannot be denied that the heirs of the victim suffered pecuniary loss, although the exact amount was not proven.