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[G.R. No. 163197. March 30, 2005]

LBP vs. PUA

THIRD DIVISION

Sirs/Mesdames:

Quoted hereunder, for your information, is a resolution of this Court dated MAR 30 2005.

G. R. No. 163197 (LAND BANK OF THE PHILIPPINES vs. SONIA PUA joined by her husband ORBITO PUA.)

In this petition for review under Rule 45 of the 1997 Rules of Civil Procedure, the petitioner Land Bank of the Philippines assails the November 13, 2003 decision of the Court of Appeals (CA) in CA-G.R. CV No. 75715. The CA decision affirmed with modification the decision of the Regional Trial Court (RTC) of Danao City, Branch 25 holding Land Bank liable to the respondent for moral damages, exemplary damages and attorney's fees.

In early 1996, Land Bank launched its socialized salary loan facility for government employees of the Municipality of Carmen in Cebu in an effort to attract potential depositors, particularly municipal employees. The respondent, a member of the Sangguniang Bayan of Carmen, Cebu, availed of the promotion and applied for a salary loan.

After examining the requirements submitted by the applicants, Land Bank approved the loan applications of the first batch of forty employees of the local government unit of Carmen, Cebu. The respondent's application was among those approved. The grantees, including the respondent, were subsequently advised by the municipal treasurer to report to Land Bank for the release of the proceeds of their respective loans.

On July 8, 1996, the respondent, with the thirty-nine other grantees, went to Land Bank to claim their individual salary loans. The names of each of the employees who were to receive the loan proceeds were called one by one, except that of the respondent. Instead, the respondent was approached by a personnel of Land Bank and was told to see the manager. The manager of Land Bank then informed the respondent that her loan could not be released to her because of misrepresentations in the respondent's application such as the pendency of a criminal or administrative case involving her and her delinquency as a borrower. The respondent denied the misrepresentations ascribed to her but Land Bank disregarded her protestations. Aggrieved and humiliated, the respondent filed an action for damages against Land Bank with the RTC of Danao City, Branch 25.

In its December 13, 1999 decision, the RTC held Land Bank liable to the respondent for the amounts of P2,000,000 as moral damages, P800,000 as exemplary damages and P40,000 as attorney's fees.

Land Bank subsequently appealed to the CA. The CA affirmed the decision of the RTC with the modification that the awards for moral and exemplary damages were reduced to P75,000 and P50,000, respectively, and the grant of attorney's fees was deleted.

Land Bank now contends that the CA erred in upholding the award of moral and exemplary damages on two grounds, to wit: (1) concealment and misrepresentation in the respondent's loan application, and (2) the grant or withholding of the loan was within the discretion of Land Bank as lender.

The Court is not persuaded.

The basis of the trial court and the CA in holding Land Bank liable for damages was Land Bank's bad faith in withholding the release of the proceeds of the loan subject of the respondent's approved application. The existence of bad faith is a question of fact and it is evidentiary. [1] cralaw As a rule, the Court will not disturb the factual findings of the trial court especially when affirmed by the appellate court.

The Court is not a trier of facts and it is not its function to analyze or weigh evidence anew. [2] cralaw The Court's jurisdiction in a petition for review is limited to reviewing or revising errors of law allegedly committed by the appellate court. [3] cralaw Factual findings of the trial court, when adopted and confirmed by the CA, are binding and conclusive upon the Court and generally will not be reviewed on appeal. [4] cralaw

While the Court has recognized several exceptions to this rule, [5] cralaw none of the established exceptions finds application here.

Here, the CA affirmed the trial court's finding that the manner by which the respondent was informed of the disapproval of her loan "smacks of indifference, injustice and moved by bad faith that would entitle her to damages." [6] cralaw The Court agrees.

First, the allegations of misrepresentation and concealment were very serious in nature. They imputed dishonesty and moral turpitude on the part of the respondent. They would reasonably cause besmirched reputation and social humiliation especially if not true.

As found by the RTC and the CA, the grounds of Land Bank's allegations of misrepresentation and concealment - the pendency of a criminal or administrative case involving the respondent and her delinquency in the payment of her loans -were not only unsubstantiated, they were contradicted by evidence as well. Thus, Land Bank was in bad faith and reckless when it failed to verify beforehand the truth of the serious and defamatory accusations it used as basis to withhold the release of the proceeds of respondent's loan.

Second, the trial court found that Land Bank did not investigate the credit standing of other grantees who had outstanding obligations with either the Pag-IBIG Fund or the Government Service Insurance System. On the other hand, the respondent was singled out and only her credit standing was scrutinized. [7] cralaw This oppressive act of discrimination and persecution against the respondent is an unmistakable badge of bad faith on the part of Land Bank.

Third, as correctly observed by the trial court and the appellate court, Land Bank approved the application of the respondent when� it had ample time to verify the statements contained therein. At the time of the processing of the loan, Land Bank should have promptly informed the respondent of the disapproval of her loan application and the reason therefor. Yet, Land Bank failed to do so. Instead, Land Bank approved the respondent's application, directed the respondent to claim her loan on July 8, 1996 and then suddenly withheld the loan proceeds on the appointed day of its release.

Clearly, bad faith attended the withholding by Land Bank of the proceeds of the loan applied for by the respondent causing the respondent to suffer mental anguish, besmirched reputation and social humiliation. Therefore, the award of moral damages was proper. The entitlement to moral damages having been established, exemplary damages may be awarded. [8] cralaw

The trial court and the CA correctly found that the respondent had satisfactorily proven the existence of bad faith - the factual basis for the damages adjudged against Land Bank. These findings refer to factual matters and, hence, they are binding and conclusive upon the Court.

WHEREFORE, the petition is hereby denied. Costs against petitioner.

SO ORDERED.

Very truly yours,

(Sgd.) LUCITA ABJELINA-SORIANO
Clerk of Court


Endnotes:

[1] cralaw Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMG-UWP) et al. v. Ramos, G.R.No. 113907, 20 April 2001, 357 SCRA 77; National Food Authority v. Court of Appeals, 370 Phil. 735(1999).

[2] cralaw Miranda v. Besa , G.R. No. 146513, 30 July 2004.

[3] cralaw Seri�a v. Caballero , G.R. No. 127382, 17 August 2004.

[4] cralaw Supra at note 2.

[5] cralaw The exceptions are as follows:(1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in making its findings, the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.

[6] cralaw Rollo, pp. 10 and 55; CA Decision, p. 4.

[7] cralaw Rollo, p. 24.

[8] cralaw Philippine Airlines, Inc. v. Court of Appeals, G.R. No. 50504-05, 13 August 1990, 188 SCRA 461.


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