Case: Albenson Enterprises Corp., Jesse Yap and Benjamin Mendiona v.

The Court
of Appeals and Eugenio S. Baltao (217 SCRA 16), January 11, 1993 (G.R No. 88694)
FACTS PETITIONERS-APPELLEES: : Albenson Enterprises Corp., Jesse Yap and Benjamin
Mendiona
OPPOSITOR-APPELLANT: The Court of Appeals and Eugenio S. Baltao

Two separate cases are related to this Supreme Court case.

The initial case was filed by the Petitioner pursuant to the alleged violation of the
respondent against Batas Pambansa Blg. 22 which should have allowed them to
retrieve the monies owed to them for the goods (mild steel plates) that they
delivered to the respondent, in place of the dishonored check that they issued. It
was also mentioned that the Assistant Fiscal of the Office of the Provincial Fiscal of
Rizal has filed information that an opportunity to submit controverting evidence
was provided to Baltao but failed to do so. Thus, Baltao was deemed to have
waived his right.

Baltao, through the Provincial Fiscal, filed a motion for reinvestigation claiming that
he was not given the opportunity to be heard in the preliminary investigation. He
also claimed that he never had dealings with Albenson Enterprises and Benjamin
Mendiona. Consequently, he claimed that he did not issue the dishonored check
and the signature was not his.

The Provincial Fiscal of Rizal reversed the initial finding of the Assistant Fiscal
exonerating Baltao.

The second case was filed in the Regional Trial Court of Quezon City by Eugenio S.
Baltao. He claimed that damages were done to him by Albenson Enterprises, Jesse
Yap and Benjamin Mendiona because of the alleged unjust filing of the initial case.

The lower courts decision were the following:

1. Actual or compensatory damages of Php133,350.00
2. Moral damages of Php1,000,000.00
3. Exemplary damages of Php200,000.00
4. Attorneys fees of Php100,000

Albenson Enterprises, Jesse Yap and Benjamin Mendiona filed an appeal and the
respondent court modified the trial courts decisions. Only a reduction of fees were
ordered and they were not happy with it, thus leading to the filing of the case to
the Supreme Court.
Petitioners stand was against malicious prosecution (Article 2219, Section 8, Civil
Code) as absence of malice on their part absolves them from any liability for
malicious prosecution. On the other hand, the respondents argument were based
on Articles 19, 20 and 21 of the Civil Code and that the principle of abuse of right
was violated resulting in damages.

ISSUE/S Did the petitioners incur violations against Articles 19, 20 and 21 of the Civil Code
that could entail the sustainment of judgement by the Court of Appeals?
LAWS Batas Pambansa Blg.22: An Act penalizing the making or drawing and issuance of a
check without sufficient funds or credit and for other purposes.

Article 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and
observe honesty and good faith.

Abuse of right under Article 19 has the following elements:

1. There is legal right or duty
2. Which is exercised in bad faith
3. For the sole intent of prejudicing or injuring another

Article 20. Every person who, contrary to law, willfully or negligently causes damage
to another, shall indemnify the latter for the same.

Article 21. Any person who willfully causes loss or injury to another in manner that
is contrary to morals, good customs or public policy shall compensate the latter for
the damages.

1. There is an act which is legal
2. But which is contrary to morals, good custom, public order, or public policy
3. And it is done with intent to injure
HOLDINGS Based on these same articles of the Civil Code, petitioners did not have the intent
to cause damage to the respondent. All they wanted was to collect what was due to
them. They have exerted a sincere attempt to find the best possible means by
which they could collect the sum of money due to them and when the respondent
denied he check, they had the right to sue based on the BP Blg. 22.

Moreover, Albenson Corporation, Jesse Yap and Benjamin Mendiona (the
petitioners) honestly believed that it was private respondent Eugenio S. Baltao
(the respondent) who issued the bouncing check based on the inquiries made that
are mentioned below:

The Securities and Exchange Commission found that the dishonored check
from Guaranteed Industries (the recipient of the mild steel plates) was from
its president, Eugenio S. Baltao
Ministry of Trade and Industry verified that EL Woodworks, a single
proprietorship business was registered to the name of Eugenio Baltao
Pacific Banking Corporation verified that the signature found on the check
belonged to one Eugenio Baltao

Eugenio S. Baltao did not exert any effort to clarify that there were in fact three
Eugenio Baltaos Senior, Junior and the third.

For a malicious prosecution to exist or progress, there must be proof that:

1. The fact of the prosecution and the further fact that the defendant was
himself the prosecutor, and that the action was finally terminated with an
acquittal;
2. That in bringing the action, the prosecutor acted without probable cause;
3. The prosecutor was actuated or impelled by legal malice (Lao vs. Court of
Appeals, 199 SCRA 58, [1991]).

All complaints for damages on malicious prosecution will only prosper with all three
elements aforecited are mentioned to exist. In this case, the 2
nd
and 3
rd
elements
were non- existent. The prosecution was not prompted by a sinister design to vex
and humiliate the respondent.

On Article 21 which deals with acts contra bonos mores, again, petitioner did not
mean to injure that may be the basis for an award for damages

Article 20 speaks of the general sanction for all other provisions of law which do not
specially provide their own sanction. Thus, anyone who, whether willfully nor
negligently, in the exercise oh his legal right or duty, causes damage to another,
shall indemnify his or her victim for injuries suffered thereby. This could have been
the only basis for the non-reversal of the case. However, the respondent did not
have any sound evidence that could have proven that these damages were
incurred:
Coming now to the claim of private respondent for actual or compensatory
damages, the records show that the same was based solely on his allegations
without proof to substantiate the same. He did not present proof of the cost of the
medical treatment which he claimed to have undergone as a result of the nervous
breakdown he suffered, nor did he present proof of the actual loss to his business
caused by the unjust litigation against him. In determining actual damages, the
court cannot rely on speculation, conjectures or guesswork as to the amount.
Without the actual proof of loss, the award of actual damages becomes erroneous
(Guilatco vs. City of Dagupan, 171 SCRA 382 [1989]).
1. Actual and compensatory damages are those recoverable because of
pecuniary loss in business, trade, property, profession, job or occupation
and the same must be proved, otherwise, if the proof is flimsy and
unsubstantiated, no damages will be given (Rubio vs. Court of Appeals, 141
SCRA 488 [1986]). For these reasons, it was gravely erroneous for
respondent court to have affirmed the award of actual damages in favor of
private respondent in the absence of proof thereof.
2. Moral damages cannot be awarded and that the adverse result of an action
does not per se make the action wrongful and subject the actor to the
payment of damages, for the law could not have meant to impose a penalty
on the right to litigate (Rubio vs. Court of Appeals, 141 SCRA 488 [1986]).


3. Where there is no evidence of the other party having acted in wanton,
fraudulent or reckless, or oppressive manner, neither may exemplary
damages be awarded (Dee Hua Liong Electrical Equipment Corporation vs.
Reyes, 145 SCRA 488 [1986]).
4. And lastly, there was no malicious prosecution against private respondent
thats why attorney's fees cannot be awarded as well.
5. In the final analysis, there is no proof or showing that petitioners acted
maliciously or in bad faith in the filing of the case against private
respondent. Consequently, in the absence of proof of fraud and bad faith
committed by petitioners, they cannot be held liable for damages (Escritor,
Jr. vs. Intermediate Appellate Court, 155 SCRA 577 [1987]). No damages can
be awarded in the instant case, whether based on the principle of abuse of
rights, or for malicious prosecution

The root of the controversy in this case is founded on a case of mistaken identity. It
is possible that with a more assiduous investigation, petitioners would have
eventually discovered that private respondent Eugenio S. Baltao is not the "Eugenio
Baltao" responsible for the dishonored check. However, the record shows that
petitioners did exert considerable effort in order to determine the liability of
private respondent.

A person who has not been paid an obligation owed to him will naturally seek ways
to compel the debtor to pay him. It was normal for petitioners to find means to
make the issuer of the check pay the amount thereof. In the absence of a wrongful
act or omission of fraud or bad faith, moral damages cannot be awarded and that
the adverse result of an action does not per se make the action wrongful and
subject the actor to the payment of damages, for the law could not have meant to
impose a penalty on the right to litigate.

With the reasonings mentioned, the petition was granted, the decision of the court
of appeals was reversed and set aside. Costs against respondent Baltao.