This document summarizes a court case involving a bounced check issued by Guaranteed Industries to Albenson Enterprises for payment of steel plates. When the check bounced, Albenson investigated and discovered the president of Guaranteed was Eugenio Baltao. Albenson then criminally charged Baltao for issuing a bad check. However, the regional trial court found Baltao was not liable and had been improperly notified of the complaint. Baltao then filed a civil case against Albenson for damages. The court awarded Baltao damages, finding Albenson abused its rights by filing an unjust criminal case against Baltao without properly investigating. Albenson appealed but the court of appeals upheld
This document summarizes a court case involving a bounced check issued by Guaranteed Industries to Albenson Enterprises for payment of steel plates. When the check bounced, Albenson investigated and discovered the president of Guaranteed was Eugenio Baltao. Albenson then criminally charged Baltao for issuing a bad check. However, the regional trial court found Baltao was not liable and had been improperly notified of the complaint. Baltao then filed a civil case against Albenson for damages. The court awarded Baltao damages, finding Albenson abused its rights by filing an unjust criminal case against Baltao without properly investigating. Albenson appealed but the court of appeals upheld
This document summarizes a court case involving a bounced check issued by Guaranteed Industries to Albenson Enterprises for payment of steel plates. When the check bounced, Albenson investigated and discovered the president of Guaranteed was Eugenio Baltao. Albenson then criminally charged Baltao for issuing a bad check. However, the regional trial court found Baltao was not liable and had been improperly notified of the complaint. Baltao then filed a civil case against Albenson for damages. The court awarded Baltao damages, finding Albenson abused its rights by filing an unjust criminal case against Baltao without properly investigating. Albenson appealed but the court of appeals upheld
ALBENSON ENTERPRISES CORP., JESSE YAP, AND BENJAIN ENDIONA, petitioners, vs. T!E CO"RT O# APPEALS AND E"GENIO S. BALTAO, respondents. Puruganan, Chato, Chato & Tan for petitioners. Lino M. Patajo, Francisco Ma. Chanco, Ananiano Desierto and Segundo Mangohig for private respondent.
BIDIN, J.: 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. 1485. <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 Guaranteed. 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.- 115 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. 44-415. 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 $altao. -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 fiscal. 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 therefor. <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.
Eugene A. Stauch, III v. South Carolina Department of Corrections, Through the Following Employees Thereof P. Douglas Taylor, Warden, Lieber Correctional Institution, in His Official and Personal Capacity Willie Weldon, Unit Manager, Edisto Dorm (l.c.i.), in His Official and Personal Capacity Arthur Jordan, Inmate Relations Coordinator, Edisto Dorm (l.c.i.), in His Official and Personal Capacity John Aycock, Doctor, Regional Medical Director (l.c.i.), in His Official and Personal Capacity, 103 F.3d 120, 4th Cir. (1996)