First Planters v.CIR Facts: Petitioner First Planters Pawnshop received a Formal Assessment Notice directing payment of value-added tax (VAT) deficiency and documentary stamp tax (DST) deficiency, inclusive of surcharge and interest for the year 2000. Petitioner protests the said deficiency assessments and argues that: (1) it is not a lending investor within the purview of Section 108(A) of the NIRC and therefore not subject to VAT and (2) a pawn ticket is not subject to DST because it is not proof of the pledge transaction, and even assuming that it is so, it is not subject to tax since a documentary stamp tax is levied on the document issued and not on the transaction. Issues: (1) Is petitioner subject to value-added tax for the year 2000? (2) Is petitioner liable for documentary stamp tax? Held: (1) NO. Petitioner pawnshop is a nonbank financial intermediary and is subject to 10% VAT for the tax years 1996 to 2002. However, with the levy, assessment and collection of VAT from non-bank financial intermediaries being specifically deferred by law, then petitioner is not liable for VAT during these tax years. But with the full implementation of the VAT system on non-bank financial intermediaries starting January 1, 2003, petitioner is liable for 10% VAT for said tax year. And beginning 2004 up to the present, by virtue of R.A. No. 9238, petitioner is no longer liable for VAT but it is subject to percentage tax on gross receipts from 0% to 5 %, as the case may be. Simex v. CA (2) YES. The subject of a DST is not limited to the document embodying the enumerated transactions. A DST is an excise tax on the exercise of a right or privilege to transfer obligations, rights or properties incident thereto. Section 195, NIRC unqualifiedly subjects all pledges to DST. The business of pawnshops essentially involves entering into contracts of pledge. While the law does not consider a pawn ticket as an evidence of security or indebtedness, the said ticket is proof of an exercise of a taxable privilege of concluding a contract of pledge. It is not said ticket that creates the pawnshop’s obligation to pay DST but the exercise of the privilege to enter into a contract of pledge. Furthermore, a pawnshop ticket is not one of the enumerated documents which Section 199, NIRC exempts from stamp tax. Facts: Simex International is a private corporation engaged in the exportation of food products. It buys these products from various local suppliers and then sells them abroad, particularly in the United States, Canada and the Middle East. Most of its exports are purchased by the petitioner on credit. Simex is a depositor of TRB and maintained a checking account in its Cubao branch. Simex maintained an account in the amount of P100,000.00, thus increasing its balance as of that date to P190,380.74. Subsequently, the petitioner issued several (8) checks against its deposit but was surprised to learn later that they had been dishonored for insufficient funds. As a consequence, actions on the pending orders of SIMEX with the other suppliers (California Manufacturing Comp., Malabon Longlife Trading Corp., etc.) whose checks were dishonored was deferred. And thus made these companies send demand letters to SIMEX threatening prosecution if the checks were not made good. SIMEX complained to TRB and found out that the sum of P100,000.00 deposited had not been credited. The error was rectified on June 17, 1981, and the dishonored checks were paid after they were re-deposited. SIMEX sent demand letter for reparation against TRB, which was not met, thus a complaint was filed in CFI Rizal by SIMEX. The court denied the moral & exemplary damages but upheld and ordered TRB to pay for nominal damages in the amount of P20,000.00 plus attys fees & costs, which was then affirmed by the CA. The CA found with the trial court that the private respondent was guilty of negligence but agreed that the petitioner was nevertheless not entitled to moral damages. It said: The essential ingredient of moral damages is proof of bad faith (De Aparicio vs. Parogurga, 150 SCRA 280). Indeed, there was the omission by the defendant-appellee bank to credit appellant's deposit of P100,000.00 on May 25, 1981. But the bank rectified its records. It credited the said amount in favor of plaintiff-appellant in less than a month. The dishonored checks were eventually paid. These circumstances negate any imputation or insinuation of malicious, fraudulent, wanton and gross bad faith and negligence on the part of the defendant-appellant. It is this ruling that is faulted in the petition now before us. Issue: Whether or not TRB is guilty of negligence which warrants reparation for damages. SIMEX Held: YES. Award SIMEX with moral damages (P20,000) and exemplary damages (P50,000). The initial carelessness of the respondent bank, aggravated by the lack of promptitude in repairing its error, justifies the grant of moral damages. This rather lackadaisical attitude toward the complaining depositor constituted the gross negligence, if not wanton bad faith, that the respondent court said had not been established by the petitioner. There was also prejudice suffered by SIMEX in the fact that the petitioner's credit line was canceled and its orders were not acted upon pending receipt of actual payment by the suppliers. Its business declined. Its reputation was tarnished. Its standing was reduced in the business community. All this was due to the fault of the respondent bank which was undeniably remiss in its duty to the petitioner. We shall recognize that the petitioner did suffer injury because of the private respondent's negligence that caused the dishonor of the checks issued by it. The immediate consequence was that its prestige was impaired because of the bouncing checks and confidence in it as a reliable debtor was diminished. In the case at bar, it is obvious that the respondent bank was remiss in that duty and violated that relationship. What is especially deplorable is that, having been informed of its error in not crediting the deposit in question to the petitioner, the respondent bank did not immediately correct it but did so only one week later or twenty-three days after the deposit was made. It bears repeating that the record does not contain any satisfactory explanation of why the error was made in the first place and why it was not corrected immediately after its discovery. Such ineptness comes under the concept of the wanton manner contemplated in the Civil Code that calls for the imposition of exemplary damages. Sandejas v. ignacio FACTS: Arturo drew up a check, UCPB Check No. GRH-560239 and wrote on it the name of the payee, Dr. Manuel Borja, but left blank the date and amount. He signed the check. The check was left with Arturo's sister-in-law, who was instructed to deliver or give it to Benjamin. The check later came to the possession of Alice who felt that Arturo cheated their sister Rosita in the amount of three million pesos (P3,000,000.00). She believed that Arturo and Rosita had a joint and/or money market placement in the amount of P3 million with the UCPB branch at Ortigas Ave., San Juan and that Ignacio preterminated the placement and ran away with it, which rightfully belonged to Rosita. She together with Rosita drew up a scheme to recover the P3 million from Arturo. Alice got her driver, Kudera, to stand as the payee of the check, Dr. Borja. Alice and Rosita came to SBC Greenhills Branch together with a man (Kudera) who[m] they introduced as Dr. Borja to the then Assistant Cashier Luis. They opened a Joint Savings Account. As initial deposit for the Joint Savings Account, Alice, Rosita and Kudera deposited the check. Thereafter, they successfully widraw the amount. Arturo Ignacio, Jr. and Evelyn Ignacio (respondents) filed a verified complaint for recovery of a sum of money and damages. Judgment is rendered in favor of plaintiffs as against defendants Security Bank and Trust Co., Rene Colin Gray, Sonia Ortiz Luis, Alice A.I. Sandejas and Rosita A.I. Cusi. The counterclaims of Patricia A.I. Sandejas are dismissed.wBoth parties appealed the RTC Decision to the CA. The defendants-appellants Security Bank and Trust Company, Rene Colin D. Gray, Sonia OrtizLuis, Alice A.I. Sandejas, and Rosita A.I. Cusi, are ordered to jointly and severally pay the plaintiffs. Petitioners and SBTC, together with Gray and Ortiz-Luis, filed their respective petitions for review before this Court. ISSUE: 1. Whether or not Alice and Rosita are justified in encashing the subject check given the factual circumstances established in the present case. 2. Whether or not the petitioners can hold respondent liable for moral damages as effect of his complaint. HELD: Petitioners' posture is not sanctioned by law. If they truly believe that Arturo took advantage of and violated the rights of Rosita, petitioners should have sought redress from the courts and should not have simply taken the law into their own hands. Our laws are replete with specific remedies designed to provide relief for the violation of one's rights. It is true that Article 151 of the Family Code requires that earnest efforts towards a compromise be made before family members can institute suits against each other. However, nothing in the law sanctions or allows the commission of or resort to any extra-legal or illegal measure or remedy in order for family members to avoid the filing of suits against another family member for the enforcement or protection of their respective rights. As to Patricia's entitlement to damages, this Court has held that while no proof of pecuniary loss is necessary in order that moral damages may be awarded, the amount of indemnity being left to the discretion of the court, it is nevertheless essential that the claimant should satisfactorily show the existence of the factual basis of damages and its causal connection to defendants acts. In the present case, both the RTC and the CA were not convinced that Patricia is entitled to damages. In addition, and with respect to Benjamin, the Court agrees with the CA that in the absence of a wrongful act or omission, or of fraud or bad faith, moral damages cannot be awarded. WHEREFORE, the instant petition is DENIED. The Decision of the Court of Appeals dated August 27, 2002 in CA-G.R. CV No. 62404 is AFFIRMED. Costs against the petitioners. Bank of Paranaque to Yasuma. ISSUE: Whether or not Bulos is correct. HELD: No. The dacion en pago merely paid off a portion of the loan. Second, Yasuma is a foreign national and is banned by law to be shareholder in a rural bank. The additional penalty of paying an additional 20% for atty’s fees is valid for it was agreed upon in the promissory note. The parties are bound by it. The 48% per annum interest rate is excessive as well as the reduced amount of 21% per annum. Though the ceiling of interest rate has been removed by CB Circular 905, in no way shall interest rates be excessive as to enslave borrowers. Interest rates of 3% per month or higher is already excessive. Hence, the interest is reduced to the legal rate which is at 12% per annum. Busuego vs. CA Facts: The 16th regular examination of the books and records of PAL Employees Savings and Loan Association (PESALA) was conducted by a team of CB Examiners. Several irregularities were found to have been committed by the PESALA officers. Hence, CB sent a letter to petitioners for them to be present at a meeting specifically for the purpose of investigating said anomalies. Petitioners did not respond. Hence, the Monetary Board adopted a resolution including the names of the officers of PESALA in the watchlist to prevent them from holding responsible positions in any institution under CB supervision. Petitioners filed a petition Bulos v. Yasuma FACTS: In 1988, Bulos, Atty. Tabalingcos and Dr. Lim incurred a P2.5M loan from Yasuma, a Japanese national. The terms of the loan provide that it is payable in 3 months at 4% interest rate; that in case of nonpayment, it shall continue at that rate until paid or 48% per annum. And in case of litigation, plus 20% of principal balance for atty’s fees. Dr. Lim signed the promissory note in behalf of the others as agreed upon. Each of them mortgaged their respective properties in favor of Yasuma. The three failed to pay upon maturity in 1989. Loan then was already at P2.7M. Yasuma foreclosed the mortgaged properties. The sale amounted to P1.6M leaving a balance of P1.06M. Interest also accrued and other penalties ballooning the balance to P2.4M. Yasuma won a subsequent collection suit. Bulos appealed. The Court of Appeals affirmed the lower court. It ruled that Yasuma is entitled to the 20% principal balance for atty’s fees as per contract. The CA however reduced the interest rate to 21% per annum. In the main, Bulos claims that his obligation was extinguished when his property was foreclosed via dacion en pago and when he offered his shares of stock in the Rural for injunction against the MB in order to prevent their names from being added in the said watchlist. RTC issued the TRO. The MB appealed to the CA which reversed RTC. Hence, this petition for certiorari with the SC. Petitioners contend that the MB resolution was null and void for being violative of their right to due process by imposing administrative sanctions where the MB is not vested with authority to disqualify persons from occupying positions in institutions under the supervision of CB. Issue: Whether or not the MB resolution was null and void. Held: NO. The CB, through the MB, is the government agency charged with the responsibility of administering the monetary, banking and credit system of the country and is granted the power of supervision and examination over banks and non-bank financial institutions performing quasibanking functions of which savings and loan associations, such as PESALA, form part of. The special law governing savings and loan associations is R.A. 3779, the Savings and Loan Association Act. Said law authorizes the MB to conduct regular yearly examinations of the books and records of savings and loan associations, to suspend a savings and loan association for violation of law, to decide any controversy over the obligations and duties of directors and officers, and to take remedial measures. Hence, the CB, through the MB, is empowered to conduct investigations and examine the records of savings and loan associations. If any irregularity is discovered in the process, the MB may impose appropriate sanctions, such as suspending the offender from holding office or from being employed with the CB, or placing the names of the offenders in a watchlist.