Crismina Garments v.

CA
G.R. No. 128721, March 9, 1999, 304 SCRA 356
Lessons Applicable: Innterest (Torts and Damages)
Laws Applicable: Article 2209-2213 CC

FACTS:
During the period from February 1979 to April 1979, Crismina Garments, Inc.
contracted the services of D’Wilmar Garments, for the sewing of 20,762 pieces of
assorted girls denims for P76,410. At first, the respondent was told that the sewing of
some of the pants were defective. She offered to take them back, but then she was later
told by the petitioner’s representative that it was good already and asked her to return
for her check of P76,410. However, the petitioner failed to pay her the aforesaid
amount. This prompted her to hire the services of counsel who, on November 12, 1979,
wrote a letter to the petitioner demanding payment of the aforesaid amount within ten
days from receipt thereof.
On February 7, 1990, the petitioner’s vice-president-comptroller, wrote a letter to
respondent’s counsel, averring, inter alia, that the pairs of jeans sewn by her,
numbering 6,164 pairs, were defective and that she was liable to the petitioner for the
amount of P49,925.51 which was the value of the damaged pairs of denim pants and
demanded refund of the aforesaid amount.
On January 8, 1981, the respondent filed a complaint against the petitioner with
the trial court. The RTC rendered judgment in favor of the respondent, ordering the
petitioner to pay the sum of P76,140 with 12% interest per annum. CA affirmed.

ISSUE: Whether or not it is proper to impose 12% interest rate per annum for an
obligation that does not involve a loan or forbearance of money in the absence of
stipulation of the parties.

RULING:

No.
The amount due in this case arose from a contract for a piece of work, not from a
loan or forbearance of money. Hence, the legal rate of interest shall be 6% per annum,
computed from the time of the filing of the Complaint in the trial court until the finality of
the judgment. If the adjudged principal and the interest (or any part thereof) remain
unpaid thereafter, the interest rate shall be 12% per annum computed from the time the
judgment becomes final and executory until it is fully satisfied.
Cerrano vs. Tan
38 Phil. 392
Lessons Applicable: Mitigation of Liability (Torts and Damages)
Laws Applicable: Article 1106, Article 1107 and Article 1581 of the Civil Code

FACTS:
On January, 1916: Tan Chuco owner of casco No. 1033 rented it to Vivencio
Cerrano for P70/month payable at the end of each month. No duration was
stipulated.Sometime in May, 1916, Tan notified Cerrano that it was necessary to repair
it at Malabon. Cerrano was interested to rent it after the repair but Tan told him that it
was already for P80/month.A week before the end of the repair, Tan sold it to Siy Cong
Bieng & Co. Siy Cong Bieng & Co. induced Santos to refuse to take orders from the
new owners. Siy Cong Bieng & Co. were obliged to bring an action of replevin against
Santos for the recovery of the possession of their casco. The sheriff took possession of
the casco under a writ of replevin, but redelivered it to Santos upon a delivery bond and
his wife as sureties.After the casco had been in possession of Santos for some three
months, the replevin suit held that casco was the property of Siy Cong Bieng & Co. at
the time of the suit was commenced, and that the "illegal detention" of the casco by
Santos had caused damages of P457.98 to Siy Cong Bieng & Co. Cerrano paid the
judgment in favor of Siy Cong Bieng & Co. and the attorney's fees of Santos which
shows that Santos was only a nominal defendant in the replevin suit,which was entirely
controlled by Cerrano.
The CFI ruled tha casco was rented 10 months at the rate of P60, P457.98 for
damages and P500 for attorney's fees.

ISSUE: Wheter or not the contract of rent is broken by Tan Chuco's act as
proximate cause making him liable to Cerrano for damages

HELD:

No.
Article 1581 of the Civil Code provides that when no definite agreement has been
made regarding its duration, the lease of a house is deemed to have been made from
day to day, from month to month, or from year to year, according to whether a daily,
monthly, or yearly rent is to be paid.There is reasonable presumption that one who
agrees to pay a monthly rent intends that his tenancy is to endure for a like period,
subject to indefinite tacit renewals at the end of each month as long as the arrangement
is agreeable to both parties
Article 1106 of the Civil Code establishes the rule that prospective profits may be
recovered as damages. Article 1107 of the same Code provides that the damages
recoverable for the breach of obligations not originating in fraud (dolo) are those which
were or might have been foreseen at the time the contract was entered into. It is
unquestionable that defendant must be deemed to have foreseen at the time he made
contract that in the event of his failure perform it, the plaintiff would be damaged by the
loss of the profit he might reasonably have expected to derive from its use.
 The general rule is that plaintiff may recover compensation for any gain which he
can make it appear with reasonable certainty the defendant's wrongful act prevented
him from acquiring. Plaintiff would have earned a net profit of P50 from the use of the
casco in the month during which he was entitled to its possession. Damages resulting
from avoidable consequences of the breach of a contract or other legal duty are not
recoverable. It is the duty of one injured by the unlawful act of another to take such
measures as prudent men usually take under such circumstances to reduce the
damages as much as possible.The burden of proof rests upon the defendant to show
that the plaintiff might have reduced the damages - none in this case
The contract of lease or hiring does not create a right in rem in favor of the
lessee, except in the case of a recorded lease of real estate. Santos' attempt to retain
possession of it against the lawful owners by whom he had been placed in charge of it,
was unlawful. If Cerrano is unable to recover from Santos the money paid by him will
not justify us in imposing the burden of repaying this money to him.
Damages suffered by reason of his voluntary assumption of the liability incurred
by Santos by reason of his unlawful attempt to withhold possession of the casco from its
owners, by whom he was put in charge of it, are not attributable to Cerrano and he is
not responsible for them -NOT proximate cause (proximate cause is Cerrano's own
imprudence)
Kierulf vs. CA
269 SCRA 433
Lessons Applicable: Concept of Moral Damages (Torts and Damages)

FACTS:
On February 28, 1987, the Pantranco bus driven by Jose Malanum lost control
and swerved to the left flying over the center island occupying the east-bound lane of
EDSA. The front of the bus hit the front of the Isuzu pickup driven by Legaspi smashed
to pieces and inflicting physical injury to Legaspi and his passenger Lucila Kierulf. Both
were treated at the Quezon City General Hospital. The bus also hit and injured a
pedestrian who was then crossing EDSA.Despite the impact, the bus continued to move
forward and its front portion rammed against a Caltex gasoline station, damaging its
building and gasoline dispensing equipment
The RTC ruled that the proximate cause was the negligence of the defendant's
driver. It likewise ruled that Pantranco North Express Incorporated to
pay Lucila Kierulf, Victor Kierulf for the damages of the Isuzu pick-up and Porfirio
Legaspi
The CA Affirmed with modification by adding P25,000 attorney's fees and to pay
costs

ISSUE: Whether or not both Lucila should be awarded moral damages

HELD:

YES.
The Rodriguez case ruled that when a person is injured to the extent that he/she
is no longer capable of giving love, affection, comfort and sexual relations to his or her
spouse, that spouse has suffered a direct and real personal loss. The loss is immediate
and consequential rather than remote and unforeseeable; it is personal to the spouse
and separate and distinct from that of the injured person. Victor's claim for deprivation of
his right to consortium, although argued before Respondent Court, is not supported by
the evidence on record.
The social and financial standing of Lucila cannot be considered in awarding
moral damages. There is no "rude and rough" reception, no "menacing attitude," no
"supercilious manner," no "abusive language and highly scornful reference" was given
to her. It will only be awarded if he or she was subjected to contemptuous conduct
despite the offender's knowledge of his or her social and financial standing. It is
therefore proper to award moral damages to Lucila for her physical sufferings, mental
anguish, fright, serious anxiety and wounded feelings. She sustained multiple injuries on
the scalp, limbs and ribs. She lost all her teeth. She had to undergo several corrective
operations and treatments. Despite treatment and surgery, her chin was still numb and
thick. She felt that she has not fully recovered from her injuries. She even had to
undergo a second operation on her gums for her dentures to fit. She suffered sleepless
nights and shock as a consequence of the vehicular accident.
In order that moral damages may be awarded, there must be pleading and
proof of moral suffering, mental anguish, fright and the like. While no proof of pecuniary
loss is necessary in order that moral damages may be awarded, the amount of
indemnity being left to the discretion of the court it is nevertheless essential that the
claimant should satisfactorily show the existence of the factual basis of damages and its
causal connection to defendant's acts. This is so because moral damages, though
incapable of pecuniary estimation, are in the category of an award designed to
compensate the claimant for actual injury suffered and not to impose a penalty on the
wrongdoer.
Moral damages are awarded to enable the injured party to obtain means,
diversions or amusements that will serve to alleviate the moral suffering he/she has
undergone, by reason of the defendant's culpable action.
Its award is aimed at restoration, as much as possible, of the spiritual status quo
ante; thus, it must be proportionate to the suffering inflicted. Since each case must be
governed by its own peculiar circumstances, there is no hard and fast rule in
determining the proper amount. The yardstick should be that the amount awarded
should not be so palpably and scandalously excessive as to indicate that it was the
result of passion, prejudice or corruption on the part of the trial judge. Neither should it
be so little or so paltry that it rubs salt to the injury already inflicted on plaintiffs.
Miranda-Ribaya vs. Carbonell
95 SCRA 58
Lessons Applicable: Proof and Proximate Cause (Torts and Damages)

FACTS:

On April 23, 1968, Mrs. Josefina Roco-Robles, agent of Mrs. Ribaya, told her
that Marino Bautista, a millionaire logger was interested to buy diamonds. Mrs. Ribaya
went to the spouses Bautista's home to sell 10 pieces of jewelry for P224,000 which
was haggled down to P222,000. As a consequence, a receipt was signed by Marino
Bautista and he issued in exchange of 2 Equitable Banking Corporation checks
of P112,000 and P110,000. Mrs. Ribaya then issued a voucher evidencing the check
payment
Sometime in April 24, 1968, Mrs. Ribaya accompanied by Ms. Narcisa Gosioco
requested the check of P110,000 to be divided since some were owned by her. 4
checks of Bank of America with amounts of P64,000 to Mrs. Ribaya and P34,000 to
Gosioco postdated on June 23, 1968. Mrs. Ribaya also sold 4 more pieces of jewelry
for P94,000 in exchange for four checks by Bank of America. This was transacted at
the office of Mr. Bautista at Bank of Philippine Islands Building. Thereafter, Mrs. Ribaya
wanted to replace the 3 pieces sold by her because the owners want them back. She
left it at the Bautista's residence but instead of returning the 3 pieces, Mr. Bautista
issued her a check of P45,000 by Bank of America since the 3 pieces were already
given as gifts to bank officers.
When the maturity dates came, she tried to contact Mr. Bautista but failed
because he was on a logging concession so she deposited the checks to her account
and it was dishonored due to closed accounts. She also discovered that her jewelries
were pawned to different pawnshops in Manila in the name of the driver, secretary of
the daughter of Bautista and a certain Balagot. Some of which were pawned the same
day it was bought.
Mrs. Ribaya was able to retrieve one-by-one the pawn tickets of the jewelries she
sold and other 3 tickets of jewelries not owned by her. In order to retrieve them, she
had to close down her shop. But there is still a balance of P125,460.79 excluding those
of Ms. Gosioco. Mrs. Ribaya also promised her attorney 25% of the unpaid obligation.
The RTC ruled in favour of Mrs. Ribaya for P125,460.79 plus 25% attorney's fees
but did not grant moral and exemplary damages. This was later on affirmed by the Court
of Appeals.

ISSUE: Wheter or not Mrs. Ribaya should be entitled to moral and exemplary damages

HELD:

YES.
In awarding moral damages, there should be pleading and proof of moral
suffering, mental anguish, fright.It does not need to be the precise legal terms or
"sacramental phrases" of "mental anguish, fright, serious anxiety, wounded feelings or
moral shock" and the like
Niceta vividly portrayed in simple terms the moral shock and suffering she
underwent as a result of respondents' wanton abuse of her good faith and
confidence.Petitioners' testimonial evidence to the effect that petitioner Niceta suffered
"extremely" and that for three months she could not sleep was a clear demonstration of
her physical suffering, mental anguish and serious anxiety and similar injury, resulting
from respondents' malevolent acts that show her to be clearly entitled to moral
damages.
Del Rosario vs. CA
267 SCRA 58
Lessons Applicable: Proof and Proximate Cause (Torts and Damages)
Laws Applicable: Article 2229 of the Civil Code, Article 2208 of the Civil Code

FACTS:

Metal Forming Corp.(MFC) advertised there metal shingles as "STRUCTURALLY

SAFE AND STRONG" and that the "BANAWE METAL TILE structure acts as a single
unit against wind and storm pressure due to the strong hook action on its
overlaps." The Spouses Del Rosario through their contractor Engineer Puno purchased
believing their representation. The proper installation procedure expressly specified in
the former's brochures and advertisements for installation, i.e., the metal tile attached to
the roof panels should be by 2 self-drilling screws for 1 metal cleat but instead what was
attached was metal cleats with only 1-inch ordinary nail each and others were fastened
with only 1 wood screw each so the roof was blown by Typhoon Ruping 2 months later.
On this instance, MFC replaced the roof free of charge, in acknowledgment of its
one-year warranty on the materials and their installation. Esteban Adjusters and
Valuers, Inc. hired by the Spouses Del Rosario determined that only with a single wood
screw or a combination of a single wood screw and a 1-inch nail was used. The
Department of Trade and Industry charged MFC administrative fine of P10,000
otherwise its registration will be deemed suspended and its establishment closed until
the fine was fully paid which was also affirmed by the office of the President. However,
MFC is declining to concede to liability for the other damages to its electrical wiring,
ceiling, furtures, walls, wall paper, wood parquet flooring and furniture, the Spouses Del
Rosario filed in the RTC for total damage of P1,008,003 also praying for moral and
exemplary damages
The RTC ruled in favor of Spouses Del Rosario. However, the CA reversed
holding there is no privity between the Spouses Del Rosario and MFC

ISSUE: Whether or not the Spouses Del Rosario should be awarded damages.

HELD:
YES.
Since MFC, in bad faith and with gross negligence, infringed the express
warranty made by it to the general public in connection with the "Banawe" tiles brought
to and set up in the house of the Del Rosarios who had relied on the warranty, and
thereby caused them considerable injury. The identity of the individual who actually
dealt with MFC and asked the latter to make such delivery and installation is of little
moment.
Actual or compensatory damages cannot be presumed, but must be duly proved
and proved with reasonable degree of certainty. They relied only on the report of the
Esteban Adjusters and Valuers, Inc. which contains no statement whatever of the
amount of the damage therefore no evidentiary foundation upon which to lay an award
of actual damages.
 The law explicitly authorizes the award of moral damages "in breaches of
contract where the defendant acted fraudulently or in bad faith." There being, moreover,
satisfactory evidence of the psychological and mental trauma actually suffered by the
Del Rosarios, the grant to them of moral damages is warranted
Raagas vs. Traya
22 SCRA 839
Lessons Applicable: Proof and Proximate Cause (Torts and Damages)

FACTS:
On April 9, 1958, Octavio Traya recklessly driving a truck owned by Canciller ran
over the 3-year old son of the spouses Melquiades Raagas and Adela Laudiano
Raagas causing his instantaneous death. As a consequence, Spouses Raagas prayed
for actual damages of P10,000, moral, nominal and corrective damages, P1,000 as
attorney's fees, P1,000 for expenses of litigation, plus costs.
The RTC held Traya and Bienvenido Canciller jointly and severally
liable P10,000 for the death of their child Regino Laudiano Raagas, P2,000 for moral
damages, P1,000 actual damages, P1,000 for attorney's fees, and the costs
Hence, Traya and Canciller appealed to CA, which certified the case to the SC
because the issues raised are purely of law

ISSUE: Whether or not the damages should be proven.

HELD:

YES.
It is hereby remanded to the court of origin for trial on the merits. Even if the
allegations regarding the amount of damages in the complaint are not specifically
denied in the answer, such damages are not deemed admitted. An allegation is not
necessary in order that moral damages may be awarded, but it is, nevertheless,
essential that the claimant satisfactorily prove the existence of the factual basis of the
damage and its causal relation to defendant's acts. The preceding disquisition points up
the inescapable need of a full-blown trial on the merits at which the parties will be
afforded every opportunity to present evidence in support of their respective contentions
and defences.
Enervida vs. Dela Torre
55 SCRA 339
Lessons Applicable: Proof and Proximate Cause (Torts and Damages)
Laws Applicable: Article 2208

FACTS:

Roque Enervida filed a complaint against spouses Lauro de la Torre and Rosa
de la Torre praying that the deed of sale executed by his deceased father, Ciriaco
Enervida, over a parcel of land covered by a Homestead Patent be declared null and
void for having been executed within the prohibited period of five years, in violation of
the provision, of Section 118 of Commonwealth Act 141, otherwise known as the Public
Land Law. He further prayed that he be allowed to repurchase said parcel of land for
being the legitimate son and sole heir of his deceased father.
The RTC dismissed the case.
The CA affirmed the dismissal saying that the sale had been made in 1948, 7 yrs
after therefore beyond the 5-year phobitive period is valid

ISSUE: Whether or not the spouses Lauro de la Torre and Rosa de la Torre are
entitled moral and exemplary damages.

HELD:

NO.
The dismissal order is hereby affirmed with the modification that only attorney's
fees in the amount of P1,500 are hereby awarded to the respondents

Article 2208 — In the absence of stipulation, attorney's fees and expenses of

litigation, other than judicial costs, can not be recovered, except:

xxx xxx xxx

xxx xxx xxx

(4) In case of a clearly unfounded civil action or proceeding against the plaintiff
The case at bar is clearly an unfounded civil action, the respondents may recover
attorney's fees. It is clearly unfounded suit, which is expressly mentioned in Art. 2208
(par. 4), as justifying an award of attorney's fees, but is not included in the enumeration
of Art. 2219 in respect to moral damages
People vs. Bagayong
G.R. No. 126518, December 2, 1998
Lessons Applicable: Proof and Proximate Cause (Torts and Damages)

FACTS:
Alberto Cauan and Leticia Yu Cauan got married. They begot 3 children
namely Albert, Honeylet and Arlene. On 1983, Alberto and Leticia separated, Albert and
Arlene stayed with Leticia while Honeylet stayed with her grandmother Anita
Yu.Thereafter, Leticia cohabited with Rodelio Bugayong a.k.a. “BOY” which bore a
child Catherine Bugayong.
On October 15, 1994, Boy asked Arlene , 11-years old, to hold his penis and
when it was already hard and stiff placed it inside the mouth of Arlene and a white
substance came out. This was in the presence of Catherine who was 6 years old who
was the one who told Leticia. Leticia filed complained with the NBI. Arlene testified that
Boy had been doing the same since she was 9 years old. They were times when Boy
would insert his penis and when the white substance came out, he would pull it out.
The RTC held Boy guilty of the crime of Acts of Lasciviousness committed on
October 15, 1994 and he is hereby sentenced to suffer an indeterminate penalty of 6
months of arresto mayor as minimum to 4 years and 2 months of prision correccional as
maximum, and of the crime of Rape he committed in 1993 for which he is sentenced to
suffer the penalty of reclusion perpetua

ISSUE:
Whether or not moral damages may be awarded in a criminal proceeding without
the need for pleading or proof

HELD:
YES.
Moral damages may additionally be awarded to the victim in the criminal
proceeding, in such amount as the Court deems just, without the need for pleading or
proof of the basis thereof as has heretofore been the practice
Francisco vs. GSIS
7 SCRA 557
Lessons Applicable: Cases where Moral damages are allowed (Torts and
Damages)
Laws Applicable: Article 2208,Article 2220

FACTS:

Trinidad J. Francisco, in consideration of a loan in the amount of P400,000 out of

which the sum of P336,100 was released to her, mortgaged in favor of the Government
Service Insurance System a parcel of land containing an area of 18,232 square
meters within 10 years in monthly installments of P3,902.41, and with interest of 7% per
annum compounded monthly.On January 6, 1959, GSIS extrajudicially foreclosed the
mortgage. Thereafter Trinidad's father Atty. Vicente J. Francisco, sent a letter to the
general manager of GSIS propsing to pay P30,000 and pay the balance from the
P5,000 monthly rentals less P350 for the necessary expenses which the GSIS Board
approved the request. On February 28, 1959, Atty. Francisco remitted a check for
P30,000 and an official receipt was issued. Later on, Trinidad remitted P44,121.29 and
soon, P24,604.81. All were issued a receipt.Then the System sent 3 letters asking for a
proposal for the payment of her indebtedness since the 1-year redemption period has
expired.Atty. Francisco sent a letter of protest requesting the proper corrections since
their proposal have already commenced.

GSIS contends that for the foreclosure done, Francisco should pay attorney's
fees of P35,644.14, publication expenses, filing fee of P301.00, and surcharge of
P23.64 so remittances were not enoughGSIS filed for specific performance
The RTC ruled that Atty. Francisco's offer was unqualifiedly accepted, and was
binding which called attention to the unconscionability of defendant's charging the
attorney's fees, totalling over P35,000.00; and this point appears well-taken, considering
that the foreclosure was merely extra-judicial, and the attorneys' work was limited to
requiring the sheriff to effectuate the foreclosure

ISSUE: Whether or not Francisco should be awarded moral damages where there
is breach of contract regarding the redemption proposal but no malicious intent.

HELD:

NO.
Affirmed.There was no error in the appealed decision in denying moral
damages, not only on account of the plaintiff's failure to take the witness stand and
testify to her social humiliation, wounded feelings, anxiety, etc., as the decision holds,
but primarily because a breach of contract like that of defendant, not being malicious or
fraudulent, does not warrant the award of moral damages under Article 2220 of the Civil
Code. There is no basis for awarding exemplary damages either, because this species
of damages is only allowed in addition to moral, temperate, liquidated, or compensatory
damages, none of which have been allowed in this case, for reasons herein before
discussed.
 As to attorneys' fees, we agree with the trial court's stand that in view of the
absence of gross and evident bad faith in defendant's refusal to satisfy the plaintiff's
claim, and there being none of the other grounds enumerated in Article 2208 of the Civil
Code, such absence precludes a recovery. The award of attorneys' fees is essentially
discretionary in the trial court, and no abuse of discretion has been shown.
Expert Travel vs. CA
G.R. No. 130030 June 25, 1999
Lessons Applicable: Cases where Moral Damage is allowed (Torts and damages)
Laws Applicable: Article 2219, Article 1764, Article 2206

FACTS:

On 1987, Expert travel & Tours, Inc. issued to Ricardo Lo 4 round-trip plane
tickets for Hongkong with hotel accommodations and transfers for P39,677.20.Failing to
pay the amount due, Expert filed a complaint for recovery plus damages.
The CA affirmed the ruling of RTC saying that Lo remitted the Monte de Piedad
Check for P42,175.20 to Expert's chairperson Ms. Ma. Rocio de Vega who in turn
issued City Trust Check of P50,000.

ISSUE: Whether or not moral damages for negligence or quasi-delict that did not result
to physical injury be awarded to Lo.

HELD:

NO.

An award of moral damages would require certain conditions to be met; to wit: (1)
First, there must be an injury, whether physical, mental or psychological, clearly
sustained by the claimant; (2) second, there must be a culpable act or omission
factually established; (3) third, the wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant; and (4) fourth, the award of
damages is predicated on any of the cases stated in Article 2219

o in culpa contractual or breach of contract:

 moral damages may be recovered when the defendant acted in bad
faith or was guilty of gross negligence (amounting to bad faith) or in
wanton disregard of his contractual obligation and, exceptionally,
when the act of breach of contract itself is constitutive of tort
resulting in physical injuries
o By special rule in Article 1764, in relation to Article 2206, of the Civil Code
 moral damages may also be awarded in case the death of a
passenger results from a breach of carriage
o In culpa aquiliana, or quasi-delict and contracts when breached by tort
 (a) when an act or omission causes physical injuries, or (b) where
the defendant is guilty of intentional tort
o In culpa criminal
 moral damages could be lawfully due when the accused is found
guilty of physical injuries, lascivious acts, adultery or concubinage,
illegal or arbitrary detention, illegal arrest, illegal search, or
defamation
o Malicious prosecution can also give rise to a claim for moral damages
o The term "analogous cases," referred to in Article 2219, following the
ejusdem generis rule, must be held similar to those expressly enumerated
by the law
o Excludes clearly unfounded civil suit
Mijares vs. CA
G.R. No.113558, April 18, 1997
Lessons Applicable: Unfounded Suits (Torts and Damages)

FACTS:

Spouses Editha Mijares and Glicerio T.Mijares under the business name Aklan
Drug purchased various products of P32,034.42 from Metro Drug, Inc. Editha Mijares,
aside from being the operator of Aklan Drug, was also an officer of the Ospital Ng
Maynila Consumers Cooperative, Inc. The Cooperative was subsequently dissolved
and operations stopped. Solomon Silverio was the new lessee of the store at Ospital ng
Maynila who and received delivery through Luz Espares and Hilda
Rodrigona totalling P32,034.42 from Metro through Dioscoro Lamenta. Solomon
Silverio, Jr. draw a check for Metro but it was dishonored for insufficient fund. Metro
demanded payment from Aklan Drug but Editha referred Lamenta to Silverio who
manages the store at Ospital ng Maynila. Lamenta never checked the owner of the
store he was delivering to and always perceived Editha as the owner. Metro Drug, Inc.
filed with the RTC for P32,034.42, 25% attorney's fees and cost of suit.

The RTC ruled Metro Drug, Inc. to pay P30,000 for moral damages, P10,000 as
attorney's fees and cost of suit since not delivered to Mijares which the CA reversed.

ISSUE: Whether or not RTC made an error in awarding moral damages to Mijares

HELD:

YES.
It failed to show that it was motivated by bad faith when it instituted the action for
collection. In malicious prosecution, both in criminal and civil cases, requires the
presence of two elements, to wit: a) malice; and b) absence of probable cause.
Moreover, there must be proof that the prosecution was prompted by a sinister design
to vex and humiliate a person, and that it was initiated deliberately knowing that the
charge was false and baseless. For the same reasons, the award for attorney's fees
and expenses of litigation must likewise be deleted
De la Pena vs. CA
G.R. No. L-81827 March 28, 1994
Lessons Applicable: Unfounded Suits (Torts and Damages)

FACTS:

Ciriaco Reducto was occupying a 24-hectare parcel of land in Sulongvale, Sulop,

Davao del Norte for which he filed Homestead Application with the Bureau of Lands.On
the other hand, Potenciano Nazaret also filed the same over the same lot. Ciriaco
transferred his possessory rights over 6 lots to Pantaleon de la Peña .
Thereafter, the Director of Lands directed Potenciano to apply for the portion
himself w/in 60 days but he did not. Ciriaco transferred his rights over another 1 1/2-
hectare to Michael Doble who sold it to Ricardo Tan . Upon a survey by the Bureau of
Lands, it was found that Tan's lot was smaller than what he had bought while De la
Peña's lot was bigger than what he had bought. Tan built a fence on his reclaimed
portion but Dela Peña keeps on destroying it.
Subsequently, Ricardo Tan then transferred the lot to Herotido Tan. Hence, Dela
Peña filed a complaint for forcible entry against Ricardo Tan amended to Herotido Tan.
The RTC and MTC favored Dela Peña. Dela Peña instituted action for reconveyance
with damages with the RTC.
The RTC rejected and a counterclaim was granted and Dela Peña was ordered
to pay P6,000 attorney's fees and expenses of litigation, P15,000 for moral damages
and the costs of the proceedings. On appeal the CA affirmed stating that fraud and
misrepresentation was not substantiated.

ISSUE: Whether or not Dela Peña should be liable for moral damages, attorney's
fees and cost of proceedings.

HELD:

NO.
The award for attorney's fees and moral damages is unfounded in the absence
of a deliberate intent to cause prejudice to the other party. The right to litigate is so
precious that a Penalty should not be charged on those who may exercise it
erroneously
“J” Marketing vs. Sia
G.R. No. 127823 January 29, 1998
Lessons Applicable:Unfounded Suits (Torts and Damages)

FACTS:

On 1983, J. Marketing Corporation received from Kawasaki Motors (Phils.) brand

new Kawasaki motorcycle.Unfortunately in 1987, the motorcycle went missing and was
reported to the police.J. Marketing was alleged that the motorcycle was found to be
with Felicidad Sia, Jr. who allegedly bought from Renato Pelande, Jr. who bought from
J. Marketing but with a different model.J. Marketing filed with the RTC against Felicidad
C. Sia Jr. who filed a third party complaint against Renato Pelante Jr.
The RTC dismissed the case but awarded damages and attorney’s fees to Sia
which the CA affirmed.

ISSUE: Whether or not J. Marketing should be penalized for damages and attorney's
fees for litigating an unfounded suit

HELD:
NO.
It cannot be said that the institution of the replevin suit was tainted with gross and
evident bad faith or was done maliciously to harass, embarrass, annoy or ridicule
private respondent.No damages can be charged on those who may exercise such
precious right in good faith, even if done erroneously. There being no bad faith reflected
in petitioner’s persistence in pursuing its case, other than an erroneous conviction of the
righteousness of its cause, attorney’s fees cannot be recovered as cost.
Cometa vs. CA
G.R. No. 124062, January 21, 1999
Lessons Applicable: Unfounded Suits (Torts and Damages)

FACTS:

On 1979, the State Investment Trust, Inc (SITI), formerly State Investment
House, Inc. (SIHI) extended loans in various amounts to Guevent Industrial
Development Corp. (GIDC) which failed to pay when due.A rehabilitation plan where
GIDC mortgaged its property but it still defaulted resulting in a foreclosure sale where
SITI is the highest bidder. GIDC filed in the RTC alleging irregularities in the foreclosure
of the mortgages and the sale of properties to petitioner SITI which ended with
a compromise agreement wherein HBI offered to purchasea and SITI agreed.The RTC
AND CA compelled SITI to accept HBI's offer to purchase.
Thereafter, HBI applied to the Housing and Land Use Regulatory Board for a
permit to develop the property submitting an affidavit by
SITI president Cometa releasing the mortgage. Unfortunately, Cometa denied executing
an affidavit as supported by the NBI's finding that it is forged. Cometa filed a complaint
for falsification of public document against HBI president Guevara which the RTC
dismissed.
HBI filed a complaint for malicious prosecution against petitioners Cometa and
SITI alleging that it was filed with the sole intent of harassing and pressuring Guevara,
in his capacity as chairman of GIDC, to give in to their illicit and malicious desire to
appropriate the remaining unsold properties of GIDC.

ISSUE: Whether or not Cometa and SITI should be penalized for malicious prosecution

HELD:

NO.
It is hardly necessary to say that to allow the present action to proceed is not to
impose a penalty on the right to litigate. For trial is still to be conducted and liability is
not automatic.
Just as it is bad to encourage the indiscriminate filing of actions for damages by
accused persons after they have been acquitted, whether correctly or incorrectly, a
blanket clearance of all who may be minded to charge others with offenses, fancied or
otherwise, without any chance of the aggrieved parties in the appropriate cases of false
accusation to obtain relief, is in Our Opinion short of being good law