Académique Documents
Professionnel Documents
Culture Documents
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the ; Rules
of Court are the Court of Appeals Decision1 dated August 3, 2006 and
Resolution2 dated November 14, 2006 in CA-G.R. CV No. 80309. The
assailed decision reversed and set aside the June 20, 2003 Decision3 of
the Regional Trial Court of Cebu City (RTC), Branch 58, in Civil Case No.
CEB-26984; while the assailed resolution denied the motion for
reconsideration filed by petitioner Michelle Ybaez (Ybaez).
The facts of the case, as culled from the records, are as follows:
While she was walking through the skywalk connecting Robinsons and
Mercury Drug Store (Mercury) where she was heading next, a Guess
employee approached and informed her that she failed to pay the item she
got. She, however, insisted that she paid and showed the employee the
receipt issued in her favor.7 She then suggested that they talk about it at
the Cebu Pacific Office located at the basement of the mall. She first went
to Mercury then met the Guess employees as agreed upon.8
When she arrived at the Cebu Pacific Office, the Guess employees
allegedly subjected her to humiliation in front of the clients of Cebu Pacific
and repeatedly demanded payment for the black jeans.9 They supposedly
even searched her wallet to check how much money she had, followed by
another argument. Respondent, thereafter, went home.10
On the same day, the Guess employees allegedly gave a letter to the
Director of Cebu Pacific Air narrating the incident, but the latter refused to
receive it as it did not concern the office and the same took place while
respondent was off duty.11 Another letter was allegedly prepared and was
supposed to be sent to the Cebu Pacific Office in Robinsons, but the latter
again refused to receive it.12 Respondent also claimed that the Human
Resource Department (HRD) of Robinsons was furnished said letter and
the latter in fact conducted an investigation for purposes of canceling
respondents Robinsons credit card. Respondent further claimed that she
was not given a copy of said damaging letter.13 With the above experience,
respondent claimed to have suffered physical anxiety, sleepless nights,
mental anguish, fright, serious apprehension, besmirched reputation, moral
shock and social humiliation.14 She thus filed the Complaint for
Damages15 before the RTC against petitioners California Clothing, Inc.
(California Clothing), Excelsis Villagonzalo (Villagonzalo), Imelda Hawayon
(Hawayon) and Ybaez. She demanded the payment of moral, nominal,
and exemplary damages, plus attorneys fees and litigation expenses.16
On appeal, the CA reversed and set aside the RTC decision, the
dispositive portion of which reads:
SO ORDERED.24
While agreeing with the trial court that the Guess employees were in good
faith when they confronted respondent inside the Cebu Pacific Office about
the alleged non-payment, the CA, however, found preponderance of
evidence showing that they acted in bad faith in sending the demand letter
to respondents employer. It found respondents possession of both the
official receipt and the subject black jeans as evidence of
payment.25Contrary to the findings of the RTC, the CA opined that the letter
addressed to Cebu Pacifics director was sent to respondents employer not
merely to ask for assistance for the collection of the disputed payment but
to subject her to ridicule, humiliation and similar injury such that she would
be pressured to pay.26 Considering that Guess already started its
investigation on the incident, there was a taint of bad faith and malice when
it dragged respondents employer who was not privy to the transaction.
This is especially true in this case since the purported letter contained not
only a narrative of the incident but accusations as to the alleged acts of
respondent in trying to evade payment.27 The appellate court thus held that
petitioners are guilty of abuse of right entitling respondent to collect moral
damages and attorneys fees. Petitioner California Clothing Inc. was made
liable for its failure to exercise extraordinary diligence in the hiring and
selection of its employees; while Ybaezs liability stemmed from her act of
signing the demand letter sent to respondents employer. In view of
Hawayon and Villagonzalos good faith, however, they were exonerated
from liability.28
Ybaez moved for the reconsideration29 of the aforesaid decision, but the
same was denied in the assailed November 14, 2006 CA Resolution.
Petitioners now come before the Court in this petition for review on
certiorari under Rule 45 of the Rules of Court based on the following
grounds:
I.
II.
In the sphere of our law on human relations, the victim of a wrongful act or
omission, whether done willfully or negligently, is not left without any
remedy or recourse to obtain relief for the damage or injury he sustained.
Incorporated into our civil law are not only principles of equity but also
universal moral precepts which are designed to indicate certain norms that
spring from the fountain of good conscience and which are meant to serve
as guides for human conduct. First of these fundamental precepts is the
principle commonly known as "abuse of rights" under Article 19 of the Civil
Code. It provides that " 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."x x x32The elements of abuse of rights are
as follows: (1) there is a legal right or duty; (2) which is exercised in bad
faith; (3) for the sole intent of prejudicing or injuring another.33
Under the abuse of rights principle found in Article 19 of the Civil Code, a
person must, in the exercise of legal right or duty, act in good faith. He
would be liable if he instead acted in bad faith, with intent to prejudice
another.34 Good faith refers to the state of mind which is manifested by the
acts of the individual concerned. It consists of the intention to abstain from
taking an unconscionable and unscrupulous advantage of another.35Malice
or bad faith, on the other hand, implies a conscious and intentional design
to do a wrongful act for a dishonest purpose or moral obliquity.36
Initially, there was nothing wrong with petitioners asking respondent
whether she paid or not. The Guess employees were able to talk to
respondent at the Cebu Pacific Office. The confrontation started well, but it
eventually turned sour when voices were raised by both parties. As aptly
held by both the RTC and the CA, such was the natural consequence of
two parties with conflicting views insisting on their respective beliefs.
Considering, however, that respondent was in possession of the item
purchased from the shop, together with the official receipt of payment
issued by petitioners, the latter cannot insist that no such payment was
made on the basis of a mere speculation. Their claim should have been
proven by substantial evidence in the proper forum.
x x x After receiving the OR and the item, Ms. Gutierrez was noted to
hurriedly left (sic) the store. x x x
When I asked her about to whom she gave the money, she gave out a
blank expression and told me, "I cant remember." Then I asked her how
much money she gave, she answered, "P2,100; 2 pcs 1,000 and 1 pc 100
bill." Then I told her that that would (sic) impossible since we have no such
denomination in our cash fund at that moment. Finally, I asked her if how
much change and if she received change from the cashier, she then
answered, "I dont remember." After asking these simple questions, I am
very certain that she is not completely being honest about this. In fact, we
invited her to come to our boutique to clear these matters but she
vehemently refused saying that shes in a hurry and very busy.37
It can be inferred from the foregoing that in sending the demand letter to
respondents employer, petitioners intended not only to ask for assistance
in collecting the disputed amount but to tarnish respondents reputation in
the eyes of her employer. To malign respondent without substantial
evidence and despite the latters possession of enough evidence in her
favor, is clearly impermissible. A person should not use his right unjustly or
contrary to honesty and good faith, otherwise, he opens himself to
liability.38
The exercise of a right must be in accordance with the purpose for which it
was established and must not be excessive or unduly harsh.39 In this case,
petitioners obviously abused their rights.
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 a
manner that is contrary to morals or good customs, or public policy shall
compensate the latter for the damage.
SO ORDERED.
G.R. No. 161921 July 17, 2013
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the
Rules of Court seeking to reverse and set aside the Decision1 and
Resolution2 of the Court of Appeals (CA), dated August 28, 2003 and
December 17, 2003, respectively, in CA-G.R. CV No. 73000. The CA
Decision affirmed with modification the August 15, 2001 Decision3 of the
Regional Trial Court (RTC) of Cagayan de Oro City, Branch 24, while the
CA Resolution denied petitioner's Motion for Reconsideration.
"4. That the water and power bill of the subject property shall be for the
account of the Second Party (Ma. Theresa Pastorfide) effective June 1,
1994." (Records, p. 47)
On March 15, 1999, Ma. Theresa paid the delinquent bills (T.S.N., October
31, 2000, p. 12). On the same date, through her lawyer, Ma. Theresa wrote
a letter to the COWD to explain who authorized the cutting of the water line
(Records, p. 160).
Aggrieved, on April 14, 1999, Ma. Theresa Pastorfide [and her husband]
filed [a] complaint for damages [against petitioner, COWD and its manager
Gaspar Gonzalez] (Records, pp. 2-6).
In the meantime, Ma. Theresa Pastorfide's water line was only restored
and reconnected when the [trial] court issued a writ of preliminary
mandatory injunction on December 14, 1999 (Records, p. 237).4
xxxx
They should not have been swayed by the prodding of Joyce V. Ardiente.
They should have investigated first as to the present ownership of the
house. For doing the act because Ardiente told them, they were negligent.
Defendant Joyce Ardiente should have requested before the cutting off of
the water supply, plaintiffs to pay. While she attempted to tell plaintiffs but
she did not have the patience of seeing them. She knew that it was
plaintiffs who had been using the water four (4) years ago and not hers.
She should have been very careful. x x x5
SO ORDERED.6
The CA ruled, with respect to petitioner, that she has a "legal duty to honor
the possession and use of water line by Ma. Theresa Pastorfide pursuant
to their Memorandum of Agreement" and "that when [petitioner] applied for
its disconnection, she acted in bad faith causing prejudice and [injury to]
Ma. Theresa Pastorfide."8
As to COWD and Gonzalez, the CA held that they "failed to give a notice of
disconnection and derelicted in reconnecting the water line despite
payment of the unpaid bills by the [respondent spouses Pastorfide]."9
COWD and Gonzalez filed a petition for review on certiorari with this Court,
which was docketed as G.R. No. 161802. However, based on technical
grounds and on the finding that the CA did not commit any reversible error
in its assailed Decision, the petition was denied via a Resolution10 issued
by this Court on March 24, 2004. COWD and Gonzalez filed a motion for
reconsideration, but the same was denied with finality through this Court's
Resolution11 dated June 28, 2004.
Petitioner, on the other hand, timely filed the instant petition with the
following Assignment of Errors:
At the outset, the Court noticed that COWD and Gonzalez, who were
petitioner's co-defendants before the RTC and her co-appellants in the CA,
were impleaded as respondents in the instant petition. This cannot be
done. Being her co-parties before the RTC and the CA, petitioner cannot, in
the instant petition for review on certiorari, make COWD and Gonzalez,
adversary parties. It is a grave mistake on the part of petitioner's counsel to
treat COWD and Gonzalez as respondents. There is no basis to do so,
considering that, in the first place, there is no showing that petitioner filed a
cross-claim against COWD and Gonzalez. Under Section 2, Rule 9 of the
Rules of Court, a cross-claim which is not set up shall be barred. Thus, for
failing to set up a cross-claim against COWD and Gonzalez before the
RTC, petitioner is already barred from doing so in the present petition.
More importantly, as shown above, COWD and Gonzalez's petition for
review on certiorari filed with this Court was already denied with finality on
June 28, 2004, making the presently assailed CA Decision final and
executory insofar as COWD and Gonzalez are concerned. Thus, COWD
and Gonzalez are already precluded from participating in the present
petition. They cannot resurrect their lost cause by filing pleadings this time
as respondents but, nonetheless, reiterating the same prayer in their
previous pleadings filed with the RTC and the CA.
As to the merits of the instant petition, the Court likewise noticed that the
main issues raised by petitioner are factual and it is settled that the
resolution of factual issues is the function of lower courts, whose findings
on these matters are received with respect and considered binding by the
Supreme Court subject only to certain exceptions, none of which is present
in this instant petition.13 This is especially true when the findings of the RTC
have been affirmed by the CA as in this case.14
In any case, a perusal of the records at hand would readily show that the
instant petition lacks merit.
Petitioner insists that she should not be held liable for the disconnection of
respondent spouses' water supply, because she had no participation in the
actual disconnection. However, she admitted in the present petition that it
was she who requested COWD to disconnect the Spouses Pastorfide's
water supply. This was confirmed by COWD and Gonzalez in their cross-
claim against petitioner. While it was COWD which actually discontinued
respondent spouses' water supply, it cannot be denied that it was through
the instance of petitioner that the Spouses Pastorfide's water supply was
disconnected in the first place.
It is true that it is within petitioner's right to ask and even require the
Spouses Pastorfide to cause the transfer of the former's account with
COWD to the latter's name pursuant to their Memorandum of Agreement.
However, the remedy to enforce such right is not to cause the
disconnection of the respondent spouses' water supply. The exercise of a
right must be in accordance with the purpose for which it was established
and must not be excessive or unduly harsh; there must be no intention to
harm another.15 Otherwise, liability for damages to the injured party will
attach.16 In the present case, intention to harm was evident on the part of
petitioner when she requested for the disconnection of respondent
spouses water supply without warning or informing the latter of such
request. Petitioner claims that her request for disconnection was based on
the advise of COWD personnel and that her intention was just to compel
the Spouses Pastorfide to comply with their agreement that petitioner's
account with COWD be transferred in respondent spouses' name. If such
was petitioner's only intention, then she should have advised respondent
spouses before or immediately after submitting her request for
disconnection, telling them that her request was simply to force them to
comply with their obligation under their Memorandum of Agreement. But
she did not. What made matters worse is the fact that COWD undertook
the disconnection also without prior notice and even failed to reconnect the
Spouses Pastorfides water supply despite payment of their arrears. There
was clearly an abuse of right on the part of petitioner, COWD and
Gonzalez. They are guilty of bad faith.
xxxx
One of the more notable innovations of the New Civil Code is the
codification of "some basic principles that are to be observed for the rightful
relationship between human beings and for the stability of the social order."
[REPORT ON THE CODE COMMISSION ON THE PROPOSED CIVIL
CODE OF THE PHILIPPINES, p. 39]. The framers of the Code, seeking to
remedy the defect of the old Code which merely stated the effects of the
law, but failed to draw out its spirit, incorporated certain fundamental
precepts which were "designed to indicate certain norms that spring from
the fountain of good conscience" and which were also meant to serve as
"guides for human conduct [that] should run as golden threads through
society, to the end that law may approach its supreme ideal, which is the
sway and dominance of justice." (Id.) Foremost among these principles is
that pronounced in Article 19 x x x.
xxxx
On the basis of the foregoing, the Court finds no cogent reason to depart
from the ruling of both the RTC and the CA that petitioner, COWD and
Gonzalez are solidarily liable.
With respect to the award of attorney's fees, Article 2208 of the Civil Code
provides, among others, that such fees may be recovered when exemplary
damages are awarded, when the defendant's act or omission has
compelled the plaintiff to litigate with third persons or to incur expenses to
protect his interest, and where the defendant acted in gross and evident
bad faith in refusing to satisfy the plaintiffs plainly valid, just and
demandable claim.
WHEREFORE, instant petition for review on certiorari is DENIED. The
Decision and Resolution of the Court of Appeals, dated August 28, 2003
and December 17, 2003, respectively, in CA-G.R. CV No. 73000 are
AFFIRMED.
SO ORDERED.
G.R. No. 184315 November 28, 2011
R E S O L U T I ON
PERALTA, J.:
For resolution is the Motion for Reconsideration1 dated January 15, 2010,
filed by the respondents, and the Supplemental Motion for
Reconsideration2 of respondent Robert Coyiuto, Jr., dated March 17, 2010,
from the Decision rendered in favor of petitioner Alfonso T. Yuchengco,
dated November 25, 2009.
The present controversy arose when in the last quarter of 1993, several
allegedly defamatory articles against petitioner were published in The
Manila Chronicle by Chronicle Publishing Corporation. Consequently,
petitioner filed a complaint against respondents before the Regional Trial
Court (RTC) of Makati City, Branch 136, docketed as Civil Case No. 94-
1114, under three separate causes of action, namely: (1) for damages due
to libelous publication against Neal H. Cruz, Ernesto Tolentino, Noel
Cabrera, Thelma San Juan, Gerry Zaragoza, Donna Gatdula, Raul Valino,
Rodney P. Diola, all members of the editorial staff and writers of The
Manila Chronicle, and Chronicle Publishing; (2) for damages due to abuse
of right against Robert Coyiuto, Jr. and Chronicle Publishing; and (3) for
attorneys fees and costs against all the respondents.
Subsequently, petitioner filed the present recourse before this Court which
puts forth the following assignment of errors:
Meanwhile, respondent Coyiuto, Jr. also filed a Motion for Leave to File
Supplemental Motion for Reconsideration with Attached Supplemental
Motion, both dated March 17, 2010.
On April 21, 2010, this Court issued a Resolution9 resolving to recall the
Resolution dated March 3, 2010; grant Coyiuto, Jr.s motion for leave to file
supplemental motion for reconsideration; note the supplemental motion for
reconsideration; and require petitioner to comment on the motion for
reconsideration and supplemental motion for reconsideration.
On June 22, 2010, petitioner filed his Comment on the Motion for
Reconsideration10 dated January 15, 2010 and Comment on respondent
Coyiuto, Jr.s Supplemental Motion for Reconsideration11 dated 17 March
2010.
I.
II.
4. Defendant Robert Coyiuto Jr. ADMITS that he was the Chairman of the
Board but not President of the Manila Chronicle during the period
Novemeber (sic) to December 1993.
xxxx
12. This case, based on plaintiffs Amended Complaint, is limited to the
publications in The Manila Chronicle marked plaintiffs Exhibits "A" to "G",
consecutively, published by defendant Manila Chronicle. Thus, only the
question of whether Mr. Robert Coyiuto, Jr. was Chairman and President of
defendant Manila Chronicle, during these publications and whether he
caused these publications, among all of plaintiffs queries, are relevant and
material to this case. And defendant Robert Coyiuto, Jr. has answered that:
"Yes", he was Chairman of the Board. "No", he was never President of The
Manila Chronicle. "No", he did not cause the publications in The Manila
Chronicle: it was the Manila Chronicle that published the news items
adverted to.15
Both the trial court and the CA affirmed this fact. We reiterate that factual
findings of the trial court, when adopted and confirmed by the CA, are
binding and conclusive on this Court and will generally not be reviewed on
appeal. While this Court has recognized several exceptions16 to this rule,
none of these exceptions exists in the present case. Accordingly, this Court
finds no reason to depart from the findings of fact of the trial court and the
CA.
More importantly and contrary again to Coyiuto, Jr.s contention, the cause
of action of petitioner based on "abuse of rights," or Article 19, in relation to
Article 20 of the Civil Code, warrants the award of damages.
Art. 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.
One of the more notable innovations of the New Civil Code is the
codification of "some basic principles that are to be observed for the rightful
relationship between human beings and for the stability of the social order."
[REPORT ON THE CODE COMMISSION ON THE PROPOSED CIVIL
CODE OF THE PHILIPPINES, p. 39]. The framers of the Code, seeking to
remedy the defect of the old Code which merely stated the effects of the
law, but failed to draw out its spirit, incorporated certain fundamental
precepts which were "designed to indicate certain norms that spring from
the fountain of good conscience" and which were also meant to serve as
"guides for human conduct [that] should run as golden threads through
society, to the end that law may approach its supreme ideal, which is the
sway and dominance of justice." (Id.) Foremost among these principles is
that pronounced in Article 19 which provides:
Art. 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.
The question of whether or not the principle of abuse of rights has been
violated resulting in damages under Article 20 or other applicable provision
of law, depends on the circumstances of each case. In the present case, it
was found that Coyiuto, Jr. indeed abused his rights as Chairman of The
Manila Chronicle, which led to the publication of the libelous articles in the
said newspaper, thus, entitling petitioner to damages under Article 19, in
relation to Article 20.
Consequently, the trial court and the CA correctly awarded moral damages
to petitioner. Such damages may be awarded when the transgression is the
cause of petitioners anguish.21 Further, converse to Coyiuto, Jr.s
argument, although petitioner is claiming damages for violation of Articles
19 and 20 of the Civil Code, still such violations directly resulted in the
publication of the libelous articles in the newspaper, which, by analogy, is
one of the ground for the recovery of moral damages under (7) of Article
2219.22
Even petitioner, in his Comment24 dated June 21, 2010, agree that moral
damages "are not awarded in order to punish the respondents or to make
the petitioner any richer than he already is, but to enable the latter to find
some cure for the moral anguish and distress he has undergone by reason
of the defamatory and damaging articles which the respondents wrote and
published."25 Further, petitioner cites as sufficient basis for the award of
damages the plain reason that he had to "go through the ordeal of
defending himself everytime someone approached him to ask whether or
not the statements in the defamatory article are true."
Moral damages are not a bonanza. They are given to ease the defendants
grief and suffering. Moral damages should be reasonably approximate to
the extent of the hurt caused and the gravity of the wrong done.28 The
Court, therefore, finds the award of moral damages in the first and second
cause of action in the amount ofP2,000,000.00 and P25,000,000.00,
respectively, to be too excessive and holds that an award of P1,000,000.00
and P10,000,000.00, respectively, as moral damages are more reasonable.
On the matter of attorneys fees and costs of suit, Article 2208 of the same
Code provides, among others, that attorneys fees and expenses of
litigation may be recovered in cases when exemplary damages are
awarded and where the court deems it just and equitable that attorneys
fees and expenses of litigation should be recovered. In any event, however,
such award must be reasonable, just and equitable.30 Thus, the award of
attorneys fees and costs is reduced from P1,000,000.00 to P200,000.00.
One final note, the case against respondent was one for damages based
on the publication of libelous articles against petitioner; hence, only civil in
nature. The rule is that a party who has the burden of proof in a civil case
must establish his cause of action by a preponderance of evidence. Thus,
respondents liability was proven only on the basis of preponderance of
evidence, which is quite different from a criminal case for libel where proof
beyond reasonable doubt must be established.
Corollarilly, under Article 360 of the Revised Penal Code, the person who
"caused the publication" of a defamatory article shall be responsible for the
same. Hence, Coyiuto, Jr. should have been held jointly and solidarily liable
with the other respondents in the first cause of action under this article and
not on the basis of violation of the principle of abuse of rights founded on
Articles 19 and 20 of the Civil Code. Because of the exclusion of Coyiuto,
Jr. in the first cause of action for libel, he cannot be held solidarily liable
with the other respondents in the first cause of action. Nonetheless, since
damage to petitioner was in fact established warranting the award of moral
and exemplary damages, the same could only be awarded based on
petitioners second cause of action impleading Coyiuto, Jr. for violation of
the principle of abuse of right.
It did not escape the attention of the Court that in filing two different causes
of action based on the same published articles, petitioner intended the
liability of Coyiuto, Jr. to be different from the other respondents. It can be
inferred that if Coyiuto, Jr. was impleaded in the first cause of action for
recovery of the civil liability in libel, petitioner could not have prayed for
higher damages, considering that the other respondents, who are jointly
and severally liable with one another, are not in the same financial standing
as Coyiuto, Jr. Petitioner, in effect, had spared the other respondents from
paying such steep amount of damages, while at the same time prayed that
Coyiuto, Jr. pay millions of pesos by way of moral and exemplary damages
in the second cause of action.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice
G.R. No. 149241 August 24, 2009
DECISION
NACHURA, J.:
On November 12, 1992, the trial court issued a writ of preliminary injunction
and directed petitioner to observe the terms and conditions of the
Distributorship Agreement and to honor, deliver and fulfill its obligations in
effecting deliveries of Tupperware products to respondents.17 In the
subsequent certiorari proceedings before the appellate court docketed as
CA-G.R. SP No. 29560, the CA ruled that the Distributorship Agreement
already expired; thus, the trial court committed grave abuse of discretion in
granting the writ of preliminary injunction which had the effect of enforcing a
contract that had long expired.18
Respondents then moved before the trial court, on June 14, 1993, for the
admission of their Supplemental Complaint,19 in which they alleged that
petitioner refused to award benefits to the members of respondents sales
force and coerced the said members to transfer to another distributor; that
petitioner refused to comply with Sections 8 and 920 of the Distributorship
Agreement by not paying respondents the value of the products on hand
and in their custody, and by not effecting the transfer of their good will to
the absorbing distributor; and that petitioner, by its actions which resulted in
the loss of respondents sales force, had made inutile respondents
investment in their building. Respondents thus prayed for additional actual
damages, specifically P4,495,000.00 for the good will, P1M for the products
on hand, and P3M for the cost of the building.
After trial on the merits, the RTC rendered its Decision24 on November 27,
1995. It ruled, among others, that the second audit was unreasonable and
was only made to harass respondents; that the shift from credit to pre-paid
basis in the purchase orders of respondents was another act of
harassment; that petitioner had no valid reason to refuse the renewal of the
distributorship agreement; and that petitioner abused its rights under the
said agreement. It then concluded that because of petitioners unjustified
acts, respondents suffered damages, among which were the salaries paid
to the internal auditors during the first audit, the good will money, the value
of the warehouse, moral and exemplary damages, and attorneys fees. The
dispositive portion of the RTC decision reads:
SO ORDERED.25
Aggrieved, petitioner timely interposed its appeal. In the assailed February
28, 2001 Decision,26 the appellate court affirmed with modification the
ruling of the trial court and disposed of the appeal as follows:
SO ORDERED.27
Preliminarily, the Court admits that, ordinarily, it will not review the findings
of fact made by the appellate court. However, jurisprudence lays down
several exceptions, among which are the following which obtain in this
case: when the judgment is based on a misapprehension of facts and when
the appellate court manifestly overlooked certain relevant facts not disputed
by the parties, which, if properly considered, could justify a different
conclusion.30 Thus, the Court finds it imperative to evaluate, as in fact it had
reviewed, the records of the case, including the evidence adduced during
the trial, in relation to the arguments of the parties and the applicable law
and jurisprudence.
Under Article 19 of the Civil Code, 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. To find the existence of
abuse of right under the said article, the following elements must be
present: (1) there is a legal right or duty; (2) which is exercised in bad faith;
(3) for the sole intent of prejudicing or injuring another.31 Accordingly, the
exercise of a right shall always be in accordance with the purpose for which
it has been established, and must not be excessive or unduly harshthere
must be no intention to injure another.32 A person will be protected only
when he acts in the legitimate exercise of his right, that is, when he acts
with prudence and in good faith, not when he acts with negligence or
abuse.33
Malice or bad faith is at the core of Article 19 of the Civil Code. Good faith
refers to the state of mind which is manifested by the acts of the individual
concerned. It consists of the intention to abstain from taking an
unconscionable and unscrupulous advantage of another. It is presumed.
Thus, he who alleges bad faith has the duty to prove the same.34 Bad faith
does not simply connote bad judgment or simple negligence; it involves a
dishonest purpose or some moral obloquy and conscious doing of a wrong,
a breach of known duty due to some motives or interest or ill will that
partakes of the nature of fraud. Malice connotes ill will or spite and speaks
not in response to duty. It implies an intention to do ulterior and unjustifiable
harm. Malice is bad faith or bad motive.35
At the crux of this controversy, therefore, is whether petitioner acted in bad
faith or intended to injure respondents when it caused the auditing of the
latters account, when it implemented the pre-paid basis in treating the
latters orders, and when it refused to renew the distributorship agreement.
The Court rules in the negative. We note that in the written correspondence
of petitioner to respondents on April 30, 1992 informing the latter of the
non-renewal of the distributorship agreement, petitioner already pointed out
respondents violations of the agreement. The letter pertinently reads:
We found that you have committed the following acts which are contrary to
provisions of Section 2(f) of our Agreement:
(c) Charging the managers for accounts of their dealers and for
overdue kits (Exhibits "C" and "D").36
From these facts, we find that bad faith cannot be attributed to the acts of
petitioner. Petitioners exercise of its rights under the agreement to conduct
an audit, to vary the manner of processing purchase orders, and to refuse
the renewal of the agreement was supported by legitimate reasons,
principally, to protect its own business. The exercise of its rights was not
impelled by any evil motive designed, whimsically and capriciously, to
injure or prejudice respondents. The rights exercised were all in accord with
the terms and conditions of the distributorship agreement, which has the
force of law between them.39 Clearly, petitioner could not be said to have
committed an abuse of its rights. It may not be amiss to state at this
juncture that a complaint based on Article 19 of the Civil Code must
necessarily fail if it has nothing to support it but innuendos and
conjectures.40
Given that petitioner has not abused its rights, it should not be held liable
for any of the damages sustained by respondents. The law affords no
remedy for damages resulting from an act which does not amount to a legal
wrong. Situations like this have been appropriately denominated damnum
absque injuria.41 To this end, the Court reverses and sets aside the trial
and appellate courts rulings. Nevertheless, the Court sustains the trial
courts order for the reimbursement by petitioner to respondents
of P23,500.17, with 12% interest per annum, computed from the filing of
the original complaint up to actual payment, representing the salaries of the
internal auditors, because, first, the award was never questioned by
petitioner, and second, petitioner was the one which engaged the services
of the auditors.
As regards petitioners claim for attorneys fees, the Court cannot grant the
same. We emphasized in prior cases that no premium should be placed on
the right to litigate. Attorneys fees are not to be awarded every time a party
wins a suit. Even when a claimant is compelled to litigate or to incur
expenses to protect his rights, still attorneys fees may not be awarded
where there is no sufficient showing of bad faith in a partys persistence in
a case other than an erroneous conviction of the righteousness of his
cause.42
With the above disquisition, the Court finds no compelling reason to resolve
the other issues raised in the petition.
SO ORDERED.