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G.R. No.

88694 January 11, 1993

ENDIONA, petitioners,
Puruganan, Chato, Chato & Tan for petitioners.
Lino M. Patajo, Francisco Ma. Chanco, Ananiano Desierto and Segundo Mangohig for
private respondent.

This petition assails the decision of respondent Court of Appeals in
CA-GR CV No. 14948 entitled !u"enio #. $altao, plaintiff-appellee vs. Al%enson
!nterprises Corporation, et al, defendants-appellants, &hich 'odified the (ud"'ent of the
Re"ional Trial Court of )ue*on Cit+, $ranch ,CV--- in Civil Case No. )-4.9/. and ordered
petitioner to pa+ private respondent, a'on" others, the su' of 01..,...... as 'oral
da'a"es and attorne+2s fees in the a'ount of 01.,.......
The facts are not disputed.
-n #epte'%er, 3cto%er, and Nove'%er 198., petitioner Al%enson !nterprises Corporation
4Al%enson for short5 delivered to Guaranteed -ndustries, -nc. 4Guaranteed for short5 located
at 6/78 V. 9apa #treet, #ta. 9esa, 9anila, the 'ild steel plates &hich the latter ordered. As
part pa+'ent thereof, Al%enson &as "iven 0acific $an:in" Corporation Chec: No. 167671
in the a'ount of 0/,181... and dra&n a"ainst the account of !.;. <ood&or:s 4Roo, p.
<hen presented for pa+'ent, the chec: &as dishonored for the reason Account Closed.
Thereafter, petitioner Al%enson, throu"h counsel, traced the ori"in of the dishonored chec:.
=ro' the records of the #ecurities and !>chan"e Co''ission 4#!C5, Al%enson discovered
that the president of Guaranteed, the recipient of the unpaid 'ild steel plates, &as one
!u"enio #. $altao. ?pon further in@uir+, Al%enson &as infor'ed %+ the 9inistr+ of Trade
and -ndustr+ that !.;. <ood&or:s, a sin"le proprietorship %usiness, &as re"istered in the
na'e of one !u"enio $altao. -n addition, upon verification &ith the dra&ee %an:, 0acific
$an:in" Corporation, Al%enson &as advised that the si"nature appearin" on the su%(ect
chec: %elon"ed to one !u"enio $altao.
After o%tainin" the fore"oin" infor'ation, Al%enson, throu"h counsel, 'ade an e>tra(udicial
de'and upon private respondent !u"enio #. $altao, president of Guaranteed, to replace
andAor 'a:e "ood the dishonored chec:.
Respondent $altao, throu"h counsel, denied that he issued the chec:, or that the si"nature
appearin" thereon is his. Be further alle"ed that Guaranteed &as a defunct entit+ and
hence, could not have transacted %usiness &ith Al%enson.
3n =e%ruar+ 14, 1986, Al%enson filed &ith the 3ffice of the 0rovincial =iscal of Ri*al a
co'plaint a"ainst !u"enio #. $altao for violation of $atas 0a'%ansa $ilan" //. #u%'itted
to support said char"es &as an affidavit of petitioner $en(a'in 9endiona, an e'plo+ee of
Al%enson. -n said affidavit, the a%ove-'entioned circu'stances &ere stated.
-t appears, ho&ever, that private respondent has a na'esa:e, his son !u"enio $altao ---,
&ho 'ana"es a %usiness esta%lish'ent, !.;. <ood&or:s, on the "round floor of the $altao
$uildin", 6/78 V. 9apa #treet, #ta. 9esa, 9anila, the ver+ sa'e %usiness address of
3n #epte'%er 1, 1986, Assistant =iscal Ricardo #u'a&a+ filed an infor'ation a"ainst
!u"enio #. $altao for Violation of $atas 0a'%ansa $ilan" //. -n filin" said infor'ation,
=iscal #u'a&a+ clai'ed that he had "iven !u"enio #. $altao opportunit+ to su%'it
controvertin" evidence, %ut the latter failed to do so and therefore, &as dee'ed to have
&aived his ri"ht.
Respondent $altao, clai'in" i"norance of the co'plaint a"ainst hi', i''ediatel+ filed &ith
the 0rovincial =iscal of Ri*al a 'otion for reinvesti"ation, alle"in" that it &as not true that he
had %een "iven an opportunit+ to %e heard in the preli'inar+ investi"ation conducted %+
=iscal #u'a&a+, and that he never had an+ dealin"s &ith Al%enson or $en(a'in 9endiona,
conse@uentl+, the chec: for &hich he has %een accused of havin" issued &ithout funds &as
not issued %+ hi' and the si"nature in said chec: &as not his.
3n Canuar+ 6., 1984, 0rovincial =iscal 9auro 9. Castro of Ri*al reversed the findin" of
=iscal #u'a&a+ and e>onerated respondent $altao. Be also instructed the Trial =iscal to
'ove for dis'issal of the infor'ation filed a"ainst !u"enio #. $altao. =iscal Castro found
that the si"nature in 0$C Chec: No. 167671 is not the si"nature of !u"enio #. $altao. Be
also found that there is no sho&in" in the records of the preli'inar+ investi"ation that
!u"enio #. $altao actuall+ received notice of the said investi"ation. =iscal Castro then
casti"ated =iscal #u'a&a+ for failin" to e>ercise care and prudence in the perfor'ance of
his duties, there%+ causin" in(ustice to respondent &ho &as not properl+ notified of the
co'plaint a"ainst hi' and of the re@uire'ent to su%'it his counter evidence.
$ecause of the alle"ed un(ust filin" of a cri'inal case a"ainst hi' for alle"edl+ issuin" a
chec: &hich %ounced in violation of $atas 0a'%ansa $ilan" // for a 'easl+ a'ount of
0/,181..., respondent $altao filed %efore the Re"ional Trial Court of )ue*on Cit+ a
co'plaint for da'a"es a"ainst herein petitioners Al%enson !nterprises, Cesse Dap, its
o&ner, and $en(a'in 9endiona, its e'plo+ee.
-n its decision, the lo&er court o%served that the chec: is dra&n a"ainst the account of
!.;. <ood&or:s, not of Guaranteed -ndustries of &hich plaintiff used to %e 0resident.
Guaranteed -ndustries had %een inactive and had ceased to e>ist as a corporation since
1981. . . . . The possi%ilit+ is that it &as &ith Gene $altao or !u"enio $altao ---, a son of
plaintiff &ho had a %usiness on the "round floor of $altao $uildin" located on V. 9apa
#treet, that the defendants 'a+ have %een dealin" &ith . . . . 4Roo, pp. 41-4/5.
The dispositive portion of the trial court 2s decision readsE
<B!R!=3R!, (ud"'ent is here%+ rendered in favor of plaintiff and a"ainst
defendants orderin" the latter to pa+ plaintiff (ointl+ and severall+E
1. actual or co'pensator+ da'a"es of 0166,61....F
/. 'oral da'a"es of 01,...,...... 41 'illion pesos5F
6. e>e'plar+ da'a"es of 0/..,......F
4. attorne+2s fees of 01..,......F
1 costs.
Gefendants2 counterclai' a"ainst plaintiff and clai' for da'a"es a"ainst
9ercantile -nsurance Co. on the %ond for the issuance of the &rit of
attach'ent at the instance of plaintiff are here%+ dis'issed for lac: of 'erit.
4Roo, pp. 68-695.
3n appeal, respondent court 'odified the trial court2s decision as follo&sE
<B!R!=3R!, the decision appealed fro' is 93G-=-!G %+ reducin" the
'oral da'a"es a&arded therein fro' 01,...,...... to 01..,...... and the
attorne+2s fees fro' 01..,...... to 01.,......, said decision %ein" here%+
affir'ed in all its other aspects. <ith costs a"ainst appellants. 4Roo, pp. 1.-
Gissatisfied &ith the a%ove rulin", petitioners Al%enson !nterprises Corp., Cesse Dap, and
$en(a'in 9endiona filed the instant 0etition, alle"in" that the appellate court erred inE
1. Concludin" that private respondent2s cause of action is not one %ased on
'alicious prosecution %ut one for a%use of ri"hts under Article /1 of the Civil
Code not&ithstandin" the fact that the %asis of a civil action for 'alicious
prosecution is Article //19 in relation to Article /1 or Article /187 of the Civil
Code . . . .
/. Concludin" that hittin" at and in effect 'ali"nin" 4private respondent5 &ith
an un(ust cri'inal case &as, &ithout 'ore, a plain case of a%use of ri"hts %+
'isdirection and &as therefore, actiona%le %+ itself, and &hich %eca'e
inordinatel+ %latant and "rossl+ a""ravated &hen . . . 4private respondent5
&as deprived of his %asic ri"ht to notice and a fair hearin" in the so-called
preli'inar+ investi"ation . . . .
6. Concludin" that petitioner2s actuations in this case &ere coldl+ deli%erate
and calculated, no evidence havin" %een adduced to support such a
s&eepin" state'ent.
4. Boldin" the petitioner corporation, petitioner Dap and petitioner 9endiona
(ointl+ and severall+ lia%le &ithout sufficient %asis in la& and in fact.
1. A&ardin" respondents H
1.1. 0166,61.... as actual or co'pensator+ da'a"es, even in
the a%sence of sufficient evidence to sho& that such &as
actuall+ suffered.
1./. 01..,...... as 'oral da'a"es considerin" that the
evidence in this connection 'erel+ involved private
respondent2s alle"ed cele%rated status as a %usiness'an,
there %ein" no sho&in" that the act co'plained of adversel+
affected private respondent2s reputation or that it resulted to
'aterial loss.
1.6. 0/..,...... as e>e'plar+ da'a"es despite the fact that
petitioners &ere dul+ advised %+ counsel of their le"al recourse.
1.4. 01.,...... as attorne+2s fees, no evidence havin" %een
adduced to (ustif+ such an a&ard 4Roo, pp. 4-75.
0etitioners contend that the civil case filed in the lo&er court &as one for 'alicious
prosecution. Citin" the case ofMadera vs. Lope! 41./ #CRA 8.. I1981J5, the+ assert that
the a%sence of 'alice on their part a%solves the' fro' an+ lia%ilit+ for 'alicious
prosecution. 0rivate respondent, on the other hand, anchored his co'plaint for Ga'a"es
on Articles 19, /., and /1 $$ of the Civil Code.
Article 19, :no&n to contain &hat is co''onl+ referred to as the principle of a%use of ri"hts,
sets certain standards &hich 'a+ %e o%served not onl+ in the e>ercise of one2s ri"hts %ut
also in the perfor'ance of one2s duties. These standards are the follo&in"E to act &ith
(usticeF to "ive ever+one his dueF and to o%serve honest+ and "ood faith. The la&, therefore,
reco"ni*es the pri'ordial li'itation on all ri"htsE that in their e>ercise, the nor's of hu'an
conduct set forth in Article 19 'ust %e o%served. A ri"ht, thou"h %+ itself le"al %ecause
reco"ni*ed or "ranted %+ la& as such, 'a+ nevertheless %eco'e the source of so'e
ille"alit+. <hen a ri"ht is e>ercised in a 'anner &hich does not confor' &ith the nor's
enshrined in Article 19 and results in da'a"e to another, a le"al &ron" is there%+ co''itted
for &hich the &ron"doer 'ust %e held responsi%le. Althou"h the re@uire'ents of each
provision is different, these three 465 articles are all related to each other. As the e'inent
Civilist #enator Arturo Tolentino puts itE <ith this article 4Article /15, co'%ined &ith articles
19 and /., the scope of our la& on civil &ron"s has %een ver+ "reatl+ %roadenedF it has
%eco'e 'uch 'ore supple and adapta%le than the An"lo-A'erican la& on torts. -t is no&
difficult to conceive of an+ 'alevolent e>ercise of a ri"ht &hich could not %e chec:ed %+ the
application of these articles 4Tolentino, 1 Civil Code of the 0hilippines 8/5.
There is ho&ever, no hard and fast rule &hich can %e applied to deter'ine &hether or not
the principle of a%use of ri"hts 'a+ %e invo:ed. The @uestion of &hether or not the principle
of a%use of ri"hts has %een violated, resultin" in da'a"es under Articles /. and /1 or other
applica%le provision of la&, depends on the circu'stances of each case. 4Glo%e 9ac:a+
Ca%le and Radio Corporation vs. Court of Appeals, 187 #CRA 888 I1989J5.
The ele'ents of an a%use of ri"ht under Article 19 are the follo&in"E 415 There is a le"al
ri"ht or dut+F 4/5 &hich is e>ercised in "ad faithF 465 for the sole intent of pre(udicin" or
in(urin" another. Article /. spea:s of the "eneral sanction for all other provisions of la&
&hich do not especiall+ provide for their o&n sanction 4Tolentino, supra, p. 815. Thus,
an+one &ho, &hether #ifu$ or negigent$, in the e>ercise of his le"al ri"ht or dut+, causes
da'a"e to another, shall inde'nif+ his victi' for in(uries suffered there%+. Article /1 deals
&ith acts contra "onus %ores, and has the follo&in" ele'entsE 15 There is an act &hich is
le"alF /5 %ut &hich is contrar+ to 'orals, "ood custo', pu%lic order, or pu%lic polic+F 65 and it
is done &ith intent to in(ure.
Thus, under an+ of these three 465 provisions of la&, an act &hich causes in(ur+ to another
'a+ %e 'ade the %asis for an a&ard of da'a"es.
There is a co''on ele'ent under Articles 19 and /1, and that is, the act 'ust %e
intentional. Bo&ever, Article /. does not distin"uishE the act 'a+ %e done either &illfull+,
or ne"li"entl+. The trial court as &ell as the respondent appellate court 'ista:enl+ lu'ped
these three 465 articles to"ether, and cited the sa'e as the %ases for the a&ard of da'a"es
in the civil co'plaint filed a"ainst petitioners, thusE
<ith the fore"oin" le"al provisions 4Articles 19, /., and /15 in focus, there is
not 'uch difficult+ in ascertainin" the 'eans %+ &hich appellants2 first
assi"ned error should %e resolved, "iven the ad'itted fact that &hen there
&as an atte'pt to collect the a'ount of 0/,181..., the defendants &ere
e>plicitl+ &arned that plaintiff !u"enio #. $altao is not the !u"enio $altao
defendants had %een dealin" &ith 4supra, p. 15. <hen the defendants
nevertheless insisted and persisted in filin" a case H a cri'inal case no less
H a"ainst plaintiff, said defendants ran afoul of the le"al provisions 4Articles
19, /., and /1 of the Civil Code5 cited %+ the lo&er court and heretofore
@uoted 4supra5.
Gefendants, not havin" %een paid the a'ount of 0/,181..., certainl+ had the
ri"ht to co'plain. $ut that ri"ht is li'ited %+ certain constraints. $e+ond that
li'it is the area of e>cess, of a%use of ri"hts. 4Roo, pp.
Assu'in", arguendo, that all the three 465 articles, to"ether and not independentl+ of each
one, could %e validl+ 'ade the %ases for an a&ard of da'a"es %ased on the principle of
a%use of ri"ht, under the circu'stances, <e see no co"ent reason for such an a&ard of
da'a"es to %e 'ade in favor of private respondent.
Certainl+, petitioners could not %e said to have violated the aforestated principle of a%use of
ri"ht. <hat pro'pted petitioners to file the case for violation of $atas 0a'%ansa $ilan" //
a"ainst private respondent &as their failure to collect the a'ount of 0/,181... due on a
%ounced chec: &hich the+ honestl+ %elieved &as issued to the' %+ private respondent.
0etitioners had conducted in@uiries re"ardin" the ori"in of the chec:, and +ielded the
follo&in" resultsE fro' the records of the #ecurities and !>chan"e Co''ission, it &as
discovered that the 0resident of Guaranteed 4the recipient of the unpaid 'ild steel plates5,
&as one !u"enio #. $altaoF an in@uir+ &ith the 9inistr+ of Trade and -ndustr+ revealed
that !.;. <ood&or:s, a"ainst &hose account the chec: &as dra&n, &as re"istered in the
na'e of one !u"enio $altaoF verification &ith the dra&ee %an:, the 0acific $an:in"
Corporation, revealed that the si"nature appearin" on the chec: %elon"ed to one !u"enio
-n a letter dated Gece'%er 17, 1986, counsel for petitioners &rote private respondent
de'andin" that he 'a:e "ood the a'ount of the chec:. Counsel for private respondent
&rote %ac: and denied, a'on" others, that private respondent ever transacted %usiness
&ith Al%enson !nterprises CorporationF that he ever issued the chec: in @uestion. 0rivate
respondent2s counsel even &ent furtherE he 'ade a &arnin" to defendants to chec: the
veracit+ of their clai'. -t is pivotal to note at this (uncture that in this sa'e letter, if indeed
private respondent &anted to clear hi'self fro' the %aseless accusation 'ade a"ainst his
person, he should have 'ade 'ention of the fact that there are three 465 persons &ith the
sa'e na'e, i.e.E !u"enio $altao, #r., !u"enio #. $altao, Cr. 4private respondent5, and
!u"enio $altao --- 4private respondent2s son, &ho as it turned out later, &as the issuer of the
chec:5. Be, ho&ever, failed to do this. The last t&o $altaos &ere doin" %usiness in the
sa'e %uildin" H $altao $uildin" H located at 6/78 V. 9apa #treet, #ta. 9esa, 9anila. The
'ild steel plates &ere ordered in the na'e of Guaranteed of &hich respondent !u"enio #.
$altao is the president and delivered to Guaranteed at $altao %uildin". Thus, petitioners had
ever+ reason to %elieve that the !u"enio $altao &ho issued the %ouncin" chec: is
respondent !u"enio #. $altao &hen their counsel &rote respondent to 'a:e "ood the
a'ount of the chec: and upon refusal, filed the co'plaint for violation of $0 $l". //.
0rivate respondent, ho&ever, did nothin" to clarif+ the case of 'ista:en identit+ at first
hand. -nstead, private respondent &aited in a'%ush and thereafter pounced on the hapless
petitioners at a ti'e he thou"ht &as propitious %+ filin" an action for da'a"es. The Court
&ill not countenance this devious sche'e.
The cri'inal co'plaint filed a"ainst private respondent after the latter refused to 'a:e "ood
the a'ount of the %ouncin" chec: despite de'and &as a sincere atte'pt on the part of
petitioners to find the %est possi%le 'eans %+ &hich the+ could collect the su' of 'one+
due the'. A person &ho has not %een paid an o%li"ation o&ed to hi' &ill naturall+ see:
&a+s to co'pel the de%tor to pa+ hi'. -t &as nor'al for petitioners to find 'eans to 'a:e
the issuer of the chec: pa+ the a'ount thereof. -n the a%sence of a &ron"ful act or o'ission
or of fraud or %ad faith, 'oral da'a"es cannot %e a&arded and that the adverse result of an
action does not per se 'a:e the action &ron"ful and su%(ect the actor to the pa+'ent of
da'a"es, for the la& could not have 'eant to i'pose a penalt+ on the ri"ht to liti"ate
4Ru%io vs. Court of Appeals, 141 #CRA 488 I1987J5.
-n the case at %ar, private respondent does not den+ that the 'ild steel plates &ere ordered
%+ and delivered to Guaranteed at $altao %uildin" and as part pa+'ent thereof, the
%ouncin" chec: &as issued %+ one !u"enio $altao. Neither had private respondent
conve+ed to petitioner that there are t&o !u"enio $altaos conductin" %usiness in the sa'e
%uildin" H he and his son !u"enio $altao ---. Considerin" that Guaranteed, &hich received
the "oods in pa+'ent of &hich the %ouncin" chec: &as issued is o&ned %+ respondent,
petitioner acted in "ood faith and pro%a%le cause in filin" the co'plaint %efore the provincial
To constitute 'alicious prosecution, there 'ust %e proof that the prosecution &as pro'pted
%+ a sinister desi"n to ve> and hu'iliate a person, and that it &as initiated deli%eratel+ %+
the defendant :no&in" that his char"es &ere false and "roundless. Concededl+, the 'ere
act of su%'ittin" a case to the authorities for prosecution does not 'a:e one lia%le for
'alicious prosecution. 49anila Gas Corporation vs. Court of Appeals, 1.. #CRA 7./
I198.J5. #till, private respondent ar"ues that lia%ilit+ under Articles 19, /., and /1 of the Civil
Code is so enco'passin" that it li:e&ise includes lia%ilit+ for da'a"es for 'alicious
prosecution under Article //19 485. True, a civil action for da'a"es for 'alicious
prosecution is allo&ed under the Ne& Civil Code, 'ore specificall+ Articles 19, /., /7, /9,
6/, 66, 61, and //19 485 thereof. -n order that such a case can prosper, ho&ever, the
follo&in" three 465 ele'ents 'ust %e present, to &itE 415 The fact of the prosecution and the
further fact that the defendant &as hi'self the prosecutor, and that the action &as finall+
ter'inated &ith an ac@uittalF 4/5 That in %rin"in" the action, the prosecutor acted &ithout
pro%a%le causeF 465 The prosecutor &as actuated or i'pelled %+ le"al 'alice 4;ao vs. Court
of Appeals, 199 #CRA 18, I1991J5.
Thus, a part+ in(ured %+ the filin" of a court case a"ainst hi', even if he is later on
a%solved, 'a+ file a case for da'a"es "rounded either on the principle of a%use of ri"hts,
or on 'alicious prosecution. As earlier stated, a co'plaint for da'a"es %ased on 'alicious
prosecution &ill prosper onl+ if the three 465 ele'ents aforecited are sho&n to e>ist. -n the
case at %ar, the second and third ele'ents &ere not sho&n to e>ist. -t is &ell-settled that
one cannot %e held lia%le for 'aliciousl+ institutin" a prosecution &here one has acted &ith
pro%a%le cause. 0ro%a%le cause is the e>istence of such facts and circu'stances as &ould
e>cite the %elief, in a reasona%le 'ind, actin" on the facts &ithin the :no&led"e of the
prosecutor, that the person char"ed &as "uilt+ of the cri'e for &hich he &as prosecuted. -n
other &ords, a suit &ill lie onl+ in cases &here a le"al prosecution has %een carried on
&ithout pro%a%le cause. The reason for this rule is that it &ould %e a ver+ "reat
discoura"e'ent to pu%lic (ustice, if prosecutors, &ho had tolera%le "round of suspicion,
&ere lia%le to %e sued at la& &hen their indict'ent 'iscarried 4)ue vs. -nter'ediate
Appellate Court, 179 #CRA 168 I1989J5.
The presence of pro%a%le cause si"nifies, as a le"al conse@uence, the a%sence of 'alice.
-n the instant case, it is evident that petitioners &ere not 'otivated %+ 'alicious intent or %+
sinister desi"n to undul+ harass private respondent, %ut onl+ %+ a &ell-founded an>iet+ to
protect their ri"hts &hen the+ filed the cri'inal co'plaint a"ainst private respondent.
To constitute 'alicious prosecution, there 'ust %e proof that the prosecution
&as pro'pted %+ a sinister desi"n to ve> and hu'iliate a person, that it &as
initiated deli%eratel+ %+ the defendant :no&in" that his char"es &ere false
and "roundless. Concededl+, the 'ere act of su%'ittin" a case to the
authorities for prosecution does not 'a:e one lia%le for 'alicious
prosecution. 0roof and 'otive that the institution of the action &as pro'pted
%+ a sinister desi"n to ve> and hu'iliate a person 'ust %e clearl+ and
preponderantl+ esta%lished to entitle the victi's to da'a"es 4&"id.5.
-n the case at %ar, there is no proof of a sinister desi"n on the part of petitioners to ve> or
hu'iliate private respondent %+ institutin" the cri'inal case a"ainst hi'. <hile petitioners
'a+ have %een ne"li"ent to so'e e>tent in deter'inin" the lia%ilit+ of private respondent for
the dishonored chec:, the sa'e is not so "ross or rec:less as to a'ount to %ad faith
&arrantin" an a&ard of da'a"es.
The root of the controvers+ in this case is founded on a case of 'ista:en identit+. -t is
possi%le that &ith a 'ore assiduous investi"ation, petitioners &ould have eventuall+
discovered that private respondent !u"enio #. $altao is not the !u"enio $altao
responsi%le for the dishonored chec:. Bo&ever, the record sho&s that petitioners did e>ert
considera%le effort in order to deter'ine the lia%ilit+ of private respondent. Their
investi"ation pointed to private respondent as the !u"enio $altao &ho issued and si"ned
the dishonored chec: as the president of the de%tor-corporation Guaranteed !nterprises.
Their error in proceedin" a"ainst the &ron" individual &as o%viousl+ in the nature of an
innocent 'ista:e, and cannot %e characteri*ed as havin" %een co''itted in %ad faith. This
error could have %een discovered if respondent had su%'itted his counter-affidavit %efore
investi"atin" fiscal #u'a&a+ and &as i''ediatel+ rectified %+ 0rovincial =iscal 9auro
Castro upon discover+ thereof, i.e., durin" the reinvesti"ation resultin" in the dis'issal of
the co'plaint.
=urther'ore, the adverse result of an action does not per se 'a:e the act &ron"ful and
su%(ect the actor to the pa+'ent of 'oral da'a"es. The la& could not have 'eant to
i'pose a penalt+ on the ri"ht to liti"ate, such ri"ht is so precious that 'oral da'a"es 'a+
not %e char"ed on those &ho 'a+ even e>ercise it erroneousl+. And an adverse decision
does not ipso facto (ustif+ the a&ard of attorne+2s fees to the &innin" part+ 4Garcia vs.
Gon*ales, 186 #CRA 8/ I199.J5.
Thus, an a&ard of da'a"es and attorne+2s fees is un&arranted &here the action &as filed
in "ood faith. -f da'a"e results fro' a person2s e>ercisin" his le"al ri"hts, it is da%nu%
a"s'ue injuria 4-locos Norte !lectric Co'pan+ vs. Court of Appeals, 189 #CRA 1 I1989J5.
Co'in" no& to the clai' of private respondent for actual or co'pensator+ da'a"es, the
records sho& that the sa'e &as %ased solel+ on his alle"ations &ithout proof to
su%stantiate the sa'e. Be did not present proof of the cost of the 'edical treat'ent &hich
he clai'ed to have under"one as a result of the nervous %rea:do&n he suffered, nor did he
present proof of the actual loss to his %usiness caused %+ the un(ust liti"ation a"ainst hi'.
-n deter'inin" actual da'a"es, the court cannot rel+ on speculation, con(ectures or
"uess&or: as to the a'ount. <ithout the actual proof of loss, the a&ard of actual da'a"es
%eco'es erroneous 4Guilatco vs. Cit+ of Ga"upan, 181 #CRA 68/ I1989J5.
Actual and co'pensator+ da'a"es are those recovera%le %ecause of pecuniar+ loss H in
%usiness, trade, propert+, profession, (o% or occupation H and the sa'e 'ust %e proved,
other&ise, if the proof is fli's+ and unsu%stantiated, no da'a"es &ill %e "iven 4Ru%io vs.
Court of Appeals, 141 #CRA 488 I1987J5. =or these reasons, it &as "ravel+ erroneous for
respondent court to have affir'ed the a&ard of actual da'a"es in favor of private
respondent in the a%sence of proof thereof.
<here there is no evidence of the other part+ havin" acted in &anton, fraudulent or
rec:less, or oppressive 'anner, neither 'a+ e>e'plar+ da'a"es %e a&arded 4Gee Bua
;ion" !lectrical !@uip'ent Corporation vs. Re+es, 141 #CRA 488 I1987J5.
As to the a&ard of attorne+2s fees, it is &ell-settled that the sa'e is the e>ception rather
than the "eneral rule. Needless to sa+, the a&ard of attorne+2s fees 'ust %e disallo&ed
&here the a&ard of e>e'plar+ da'a"es is eli'inated 4Article //.8, Civil CodeF A"ustin vs.
Court of Appeals, 187 #CRA 681 I199.J5. 9oreover, in vie& of the fact that there &as no
'alicious prosecution a"ainst private respondent, attorne+2s fees cannot %e a&arded hi'
on that "round.
-n the final anal+sis, there is no proof or sho&in" that petitioners acted 'aliciousl+ or in %ad
faith in the filin" of the case a"ainst private respondent. Conse@uentl+, in the a%sence of
proof of fraud and %ad faith co''itted %+ petitioners, the+ cannot %e held lia%le for
da'a"es 4!scritor, Cr. vs. -nter'ediate Appellate Court, 111 #CRA 188 I1988J5. No
da'a"es can %e a&arded in the instant case, &hether %ased on the principle of a%use of
ri"hts, or for 'alicious prosecution. The @uestioned (ud"'ent in the instant case attests to
the propensit+ of trial (ud"es to a&ard da'a"es &ithout %asis. ;o&er courts are here%+
cautioned ane& a"ainst a&ardin" unconsciona%le su's as da'a"es &ithout %ases
<B!R!=3R!, the petition is GRANT!G and the decision of the Court of Appeals in C.A.
G.R. C.V. No. 14948 dated 9a+ 16, 1989, is here%+ R!V!R#!G and #!T A#-G!. Costs
a"ainst respondent $altao.
#3 3RG!R!G.
(utierre!, )r., Davide, )r., Ro%ero and Meo, ))., concur.

% #oo&no&'(
$$ Art. 19. !ver+ person 'ust, in the e>ercise of his ri"hts and in the
perfor'ance of his duties, act &ith (ustice, "ive ever+one his due, and
o%serve honest+ and "ood faith.
Art. /.. !ver+ person &ho, contrar+ to la&, &illfull+ or ne"li"entl+ causes
da'a"e to another, shall inde'nif+ the latter for the sa'e.
Art. /1. An+ person &ho &illfull+ causes loss or in(ur+ to another in a 'anner
that is contrar+ to 'orals, "ood custo's or pu%lic polic+ shall co'pensate the
latter for the da'a"e.