PETITIONER, VS. COURT OF payment in conformity with APPEALS AND FELIPE petitioner bank’s procedure. LUSTRE, RESPONDENTS. Petitioner then, in a letter dated G.R. No. 133107, March 25, January 21, 1993, demanded from 1999 private respondent the payment of DOCTRINE: Article 1170 of the the balance of the debt, including Civil Code states that those who in liquidated damages. The latter the performance of their refused, prompting petitioner to obligations are guilty of delay are file an action for replevin and liable for damages. The delay in damages. Private respondent the performance of the obligation, interposed a counterclaim for however, must be either malicious damages. or negligent. After trial, the RTC dismissed the complaint for lack of In 1993, private respondent cause of action and ordered the Atty. Lustre purchased a Toyota plaintiff to pay private respondent Corolla from Toyota Shaw for moral and exemplary damages. On which he made a down payment of appeal, the CA affirmed the P164,620.00, the balance of the decision of the RTC. It held that purchase price to be paid in 24 petitioner bank was remiss in the equal monthly installments. Private performance of its functions for it respondent thus issued 24 could have easily called the private postdated checks and to secure the respondent’s attention to the lack balance, he executed a promissory of signature on the check and sent note and a contract of chattel the check to, or summoned, the mortgage over the vehicle in favor latter to affix his signature. of Toyota Shaw. The contract of Petitioner’s imputation of default mortgage provided for an to private respondent rested solely acceleration clause stating that on the fact that the 5 th check should the mortgagor default in issued by the latter was recalled the payment of any installment, for lack of signature. However, the the whole amount remaining check was recalled only after the unpaid shall become due and that amount covered thereby had been the mortgagor shall be liable for deducted from private 25% of the principal due as respondent’s account. The default liquidated damages. Subsequently, was therefore not a case of failure Toyota Shaw assigned all its rights to pay, the check being sufficiently and interests in the mortgage to funded, and which amount was in petitioner RCBC. fact already debitted from private All the checks dated April respondent’s account by the 10, 1991 to January 10, 1993 were petitioner which subsequently re- thereafter encashed and debited credited the amount to the by RCBC from private respondent's former’s account for lack of account, except for the check signature. All these actions RCBC representing the payment for did on its own without notifying August 10, 1991, which was defendant until sixteen months unsigned. Because of this unsigned later when it wrote its demand check, the last two checks (for letter. Hence, this appeal. justice, give everyone his due, and observe honesty and good ISSUE: Is private respondent faith.” behooved the bank to do considered in delay and liable to so. petitioner by virtue of their Failing thus, petitioner is agreement? liable for damages caused to private respondent. These include RULING: NO. moral damages for the mental Article 1170 of the Civil anguish, serious anxiety, Code states that those who in besmirched reputation, the performance of their wounded feelings and social obligations are guilty of delay humiliation suffered by the are liable for damages. The latter. The trial court found that delay in the performance of the private respondent was a client obligation, however, must be who has shared transactions for either malicious or negligent. over twenty years with a bank. The Thus, assuming that private shabby treatment given the respondent was guilty of delay in defendant is unpardonable since the payment of the value of the he was put to shame and unsigned check, private embarrassment after the case was respondent cannot be held liable filed in Court. He is a lawyer in his for damages. There is no own right, married to another imputation, much less member of the bar. He sired evidence, that private children who are all professionals respondent acted with malice in their chosen field. He is known or negligence in failing to sign to the community of golfers with the check. Indeed, we agree with whom he gravitates. Surely, the the Court of Appeals' finding that filing of the case made defendant such omission was mere feel so bad and bothered. "inadvertence" on the part of To deter others from private respondent. Even when emulating petitioners callous the checks were delivered to example, we affirm the award of petitioner, it did not object to the exemplary damages. As exemplary unsigned check. In view of the lack damages are warranted, so are of malice or negligence on the part attorney's fees. of private respondent, petitioner's blind and mechanical invocation of paragraph 11 of the contract of chattel mortgage was unwarranted. As pointed out by the trial court, this whole controversy could have been avoided if only petitioner bothered to call up private respondent and ask him to sign the check. Good faith not only in compliance with its contractual obligations, but also in observance of the standard in human relations, for every person "to act with