445 Phil. 770
CARPIO, J.:
“SEC. 19. Classes of Documents. – For the purpose of their presentation in evidence, documents are either public or private.The Court of Appeals opined that the following procedure outlined in Section 24, Rule 132 should be followed in proving foreign law:
Public documents are:
(a) The written official acts, or records of the official acts of the sovereign authority, official bodies and tribunals, and public officers, whether of the Philippines, or of a foreign country;
x x x.”
“SEC. 24. Proof of official record. – The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody. If the office in which the record is kept is in a foreign country, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office.”The Court of Appeals likewise rejected the Bank’s argument that Section 2, Rule 34 of the old Rules of Court allows the Bank to move with the supporting Walden affidavit for partial summary judgment in its favor. The Court of Appeals clarified that the Walden affidavit is not the supporting affidavit referred to in Section 2, Rule 34 that would prove the lack of genuine issue between the parties. The Court of Appeals concluded that even if the Walden affidavit is used for purposes of summary judgment, the Bank must still comply with the procedure prescribed by the Rules to prove the foreign law.
“x x x HOLDING THAT [THE BANK’S] PROOF OF FACTS TO SUPPORT ITS MOTION FOR SUMMARY JUDGMENT MAY NOT BE GIVEN BY AFFIDAVIT;First, the Bank argues that in moving for partial summary judgment, it was entitled to use the Walden affidavit to prove that the stipulated foreign law bars the claims for consequential, moral, temperate, nominal and exemplary damages and attorney’s fees. Consequently, outright dismissal by summary judgment of these claims is warranted.
x x x HOLDING THAT [THE BANK’S] AFFIDAVIT, WHICH PROVES FOREIGN LAW AS A FACT, IS “HEARSAY” AND THEREBY ‘CANNOT SERVE AS PROOF OF THE NEW YORK LAW RELIED UPON BY PETITIONERS IN THEIR MOTION FOR SUMMARY JUDGMENT x x x’.”[3]
“Section 2. Summary judgment for defending party. – A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting affidavits for a summary judgment in his favor as to all or any part thereof.”A court may grant a summary judgment to settle expeditiously a case if, on motion of either party, there appears from the pleadings, depositions, admissions, and affidavits that no important issues of fact are involved, except the amount of damages. In such event, the moving party is entitled to a judgment as a matter of law.[4]
“x x x:The Bank, however, cannot rely on Willamette Iron and Steel Works v. Muzzal or Collector of Internal Revenue v. Fisher to support its cause. These cases involved attorneys testifying in open court during the trial in the Philippines and quoting the particular foreign laws sought to be established. On the other hand, the Walden affidavit was taken abroad ex parte and the affiant never testified in open court. The Walden affidavit cannot be considered as proof of New York law on damages not only because it is self-serving but also because it does not state the specific New York law on damages. We reproduce portions of the Walden affidavit as follows:
Although it is desirable that foreign law be proved in accordance with the above rule, however, the Supreme Court held in the case of Willamette Iron and Steel Works v. Muzzal, that Section 41, Rule 123 (Section 25, Rule 132 of the Revised Rules of Court) does not exclude the presentation of other competent evidence to prove the existence of a foreign law. In that case, the Supreme Court considered the testimony under oath of an attorney-at-law of San Francisco, California, who quoted verbatim a section of California Civil Code and who stated that the same was in force at the time the obligations were contracted, as sufficient evidence to establish the existence of said law. Accordingly, in line with this view, the Supreme Court in the Collector of Internal Revenue v. Fisher et al., upheld the Tax Court in considering the pertinent law of California as proved by the respondents’ witness. In that case, the counsel for respondent “testified that as an active member of the California Bar since 1951, he is familiar with the revenue and taxation laws of the State of California. When asked by the lower court to state the pertinent California law as regards exemption of intangible personal properties, the witness cited Article 4, Sec. 13851 (a) & (b) of the California Internal and Revenue Code as published in Derring’s California Code, a publication of Bancroft-Whitney Co., Inc. And as part of his testimony, a full quotation of the cited section was offered in evidence by respondents.” Likewise, in several naturalization cases, it was held by the Court that evidence of the law of a foreign country on reciprocity regarding the acquisition of citizenship, although not meeting the prescribed rule of practice, may be allowed and used as basis for favorable action, if, in the light of all the circumstances, the Court is “satisfied of the authenticity of the written proof offered.” Thus, in a number of decisions, mere authentication of the Chinese Naturalization Law by the Chinese Consulate General of Manila was held to be competent proof of that law.” (Emphasis supplied)
“3. In New York, “[n]ominal damages are damages in name only, trivial sums such as six cents or $1. Such damages are awarded both in tort and contract cases when the plaintiff establishes a cause of action against the defendant, but is unable to prove” actual damages. Dobbs, Law of Remedies, § 3.32 at 294 (1993). Since Guerrero is claiming for actual damages, he cannot ask for nominal damages.The Walden affidavit states conclusions from the affiant’s personal interpretation and opinion of the facts of the case vis a vis the alleged laws and jurisprudence without citing any law in particular. The citations in the Walden affidavit of various U.S. court decisions do not constitute proof of the official records or decisions of the U.S. courts. While the Bank attached copies of some of the U.S. court decisions cited in the Walden affidavit, these copies do not comply with Section 24 of Rule 132 on proof of official records or decisions of foreign courts.
4. There is no concept of temperate damages in New York law. I have reviewed Dobbs, a well-respected treatise, which does not use the phrase “temperate damages” in its index. I have also done a computerized search for the phrase in all published New York cases, and have found no cases that use it. I have never heard the phrase used in American law.
5. The Uniform Commercial Code (“UCC”) governs many aspects of a Bank’s relationship with its depositors. In this case, it governs Guerrero’s claim arising out of the non-payment of the $18,000 check. Guerrero claims that this was a wrongful dishonor. However, the UCC states that “justifiable refusal to pay or accept” as opposed to dishonor, occurs when a bank refuses to pay a check for reasons such as a missing indorsement, a missing or illegible signature or a forgery, § 3-510, Official Comment 2. ….. to the Complaint, MHT returned the check because it had no signature card on …. and could not verify Guerrero’s signature. In my opinion, consistent with the UCC, that is a legitimate and justifiable reason not to pay.
6. Consequential damages are not available in the ordinary case of a justifiable refusal to pay. UCC 1-106 provides that “neither consequential or special or punitive damages may be had except as specifically provided in the Act or by other rule of law”. UCC 4-103 further provides that consequential damages can be recovered only where there is bad faith. This is more restrictive than the New York common law, which may allow consequential damages in a breach of contract case (as does the UCC where there is a wrongful dishonor).
7. Under New York law, requests for lost profits, damage to reputation and mental distress are considered consequential damages. Kenford Co., Inc. v. Country of Erie, 73 N.Y.2d 312, 319, 540 N.Y.S.2d 1, 4-5 (1989) (lost profits); Motif Construction Corp. v. Buffalo Savings Bank, 50 A.D.2d 718, 374 N.Y.S..2d 868, 869-70 (4th Dep’t 1975) damage to reputation); Dobbs, Law of Remedies §12.4(1) at 63 (emotional distress).
8. As a matter of New York law, a claim for emotional distress cannot be recovered for a breach of contract. Geler v. National Westminster Bank U.S.A., 770 F. Supp. 210, 215 (S.D.N.Y. 1991); Pitcherello v. Moray Homes, Ltd., 150 A.D.2d 860,540 N.Y.S.2d 387, 390 (3d Dep’t 1989) Martin v. Donald Park Acres, 54 A.D.2d 975, 389 N.Y.S..2d 31, 32 (2nd Dep’t 1976). Damage to reputation is also not recoverable for a contract. Motif Construction Corp. v. Buffalo Savings Bank, 374 N.Y.S.2d at 869-70.
9. In cases where the issue is the breach of a contract to purchase stock, New York courts will not take into consideration the performance of the stock after the breach. Rather, damages will be based on the value of the stock at the time of the breach, Aroneck v. Atkin, 90 A.D.2d 966, 456 N.Y.S.2d 558, 559 (4th Dep’t 1982), app. den. 59 N.Y.2d 601, 449 N.E.2d 1276, 463 N.Y.S.2d 1023 (1983).
10. Under New York law, a party can only get consequential damages if they were the type that would naturally arise from the breach and if they were “brought within the contemplation of parties as the probable result of the breach at the time of or prior to contracting.” Kenford Co., Inc. v. Country of Erie, 73 N.Y.2d 312, 319, 540 N.Y.S.2d 1, 3 (1989), (quoting Chapman v. Fargo, 223 N.Y. 32, 36 (1918).
11. Under New York law, a plaintiff is not entitled to attorneys’ fees unless they are provided by contract or statute. E.g., Geler v. National Westminster Bank, 770 F. Supp. 210, 213 (S.D.N.Y. 1991); Camatron Sewing Mach, Inc. v. F.M. Ring Assocs., Inc., 179 A.D.2d 165, 582 N.Y.S.2d 396 (1st Dep’t 1992); Stanisic v. Soho Landmark Assocs., 73 A.D.2d 268, 577 N.Y.S.2d 280, 281 (1st Dep’t 1991). There is no statute that permits attorney’s fees in a case of this type.
12. Exemplary, or punitive damages are not allowed for a breach of contract, even where the plaintiff claims the defendant acted with malice. Geler v. National Westminster Bank, 770 F.Supp. 210, 215 (S.D.N.Y. 1991); Catalogue Service of …chester[11]_v. Insurance Co. of North America, 74 A.D.2d 837, 838, 425 N.Y.S.2d 635, 637 (2d Dep’t 1980); Senior v. Manufacturers Hanover Trust Co., 110 A.D.2d 833, 488 N.Y.S.2d 241, 242 (2d Dep’t 1985).
13. Exemplary or punitive damages may be recovered only where it is alleged and proven that the wrong supposedly committed by defendant amounts to a fraud aimed at the public generally and involves a high moral culpability. Walker v. Sheldon, 10 N.Y.2d 401, 179 N.E.2d 497, 223 N.Y.S.2d 488 (1961).
14. Furthermore, it has been consistently held under New York law that exemplary damages are not available for a mere breach of contract for in such a case, as a matter of law, only a private wrong and not a public right is involved. Thaler v. The North Insurance Company, 63 A.D.2d 921, 406 N.Y.S.2d 66 (1st Dep’t 1978).”[12]
“SEC. 3. Motion and proceedings thereon. – The motion shall be served at least ten (10) days before the time specified for the hearing. The adverse party prior to the day of hearing may serve opposing affidavits. After the hearing, the judgment sought shall be rendered forthwith if the pleadings, depositions and admissions on file, together with the affidavits, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Emphasis supplied)It is axiomatic that the term “may” as used in remedial law, is only permissive and not mandatory.[13]