Republic of the
Supreme Court
THIRD DIVISION
SPOUSES
GREGORIO and G.R.
NO. 155868
JOSEFA
YU,
Petitioners,
Present:
YNARES-SANTIAGO,
J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO,
JJ.
NGO
YET TE, doing business
under
the name and style,
ESSENTIAL
MANUFACTURING, Promulgated:
Respondent. February 6, 2007
x-
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - x
D E C I S I O N
AUSTRIA-MARTINEZ,
J.:
Before us is a Petition for Review on
Certiorari under Rule 45 of the Rules of Court assailing the March 21,
2001 Decision[1]
of the Court of Appeals (CA) in CA-G.R. CV No. 52246[2]
and its October 14, 2002 Resolution.[3]
The antecedent facts are not
disputed.
Spouses Gregorio and Josefa Yu
(Spouses Yu) purchased from Ngo Yet Te (Te) bars of detergent soap worth P594,240.00,
and issued to the latter three postdated checks [4]
as payment of the purchase price. When Te presented the checks at maturity for
encashment, said checks were returned dishonored and stamped “ACCOUNT CLOSED”.[5]
Te demanded[6]
payment from Spouses Yu but the latter did not heed her demands. Acting
through her son and attorney-in-fact, Charry Sy (Sy), Te filed with the
Regional Trial Court (RTC), Branch 75, Valenzuela, Metro Manila, a Complaint,[7]
docketed as Civil Case No. 4061-V-93, for Collection of Sum of Money and
Damages with Prayer for Preliminary Attachment.
In support of her prayer for
preliminary attachment, Te attached to her
Complaint an Affidavit executed by Sy that Spouses Yu were guilty of fraud in
entering into the purchase agreement for they never intended to pay the contract
price, and that, based on reliable information, they were about to move or
dispose of their properties to defraud their creditors.[8]
Upon Te’s posting of an attachment bond,[9]
the RTC issued an Order of Attachment/Levy[10]
dated March 29, 1993 on the basis of which Sheriff Constancio Alimurung (Sheriff
Alimurung) of RTC, Branch 19, Cebu City
levied and attached Spouses Yu’s properties in Cebu City consisting of
one parcel of land (known as Lot No. 11)[11] and four units of motor vehicle,
specifically, a Toyota Ford Fierra, a jeep,
a Canter delivery van, and a passenger bus.[12]
On P1,500.00 per day;
moral damages, P1,000,000.00; and exemplary damages, P50,000.00.
They also sought payment of P120,000.00 as attorney’s fees and P80,000.00
as litigation expenses.[14] On the same date, Spouses Yu filed an Urgent
Motion to Dissolve Writ of Preliminary Attachment.[15]
They also filed a Claim Against Surety Bond[16]
in which they demanded payment from Visayan Surety and Insurance Corporation
(Visayan Surety), the surety which issued the attachment bond, of the sum of P594,240.00, representing the damages
they allegedly sustained as a consequence of the wrongful attachment of their
properties.
While
the RTC did not resolve the Claim Against Surety Bond, it issued an Order[17]
dated
Dissatisfied, they filed with the CA a Petition for Certiorari,[20]
docketed as CA-G.R. SP No. 31230, in which a Decision[21]
was rendered on
In
the case before Us, the complaint and the accompanying affidavit in support of
the application for the writ only contains general averments. Neither pleading
states in particular how the fraud was committed or the badges of fraud
purportedly committed by the petitioners to establish that the latter never had
an intention to pay the obligation; neither is there a statement of the
particular acts committed to show that the petitioners are in fact disposing of
their properties to defraud creditors. x x x.
x x x x
Moreover,
at the hearing on the motion to discharge the order of attachment x x x
petitioners presented evidence showing that private respondent has been
extending multi-million peso credit facilities
to the petitioners for the past seven years and that the latter have
consistently settled their obligations. This was not denied by private respondent.
Neither does the private respondent contest the petitioners’ allegations that
they have been recently robbed of properties of substantial value, hence their
inability to pay on time. By the respondent court’s own pronouncements, it
appears that the order of attachment was upheld because of the admitted
financial reverses the petitioner is undergoing.
This is reversible error. Insolvency
is not a ground for attachment especially when defendant has not been shown to
have committed any act intended to
defraud its creditors x x x.
For lack of factual basis to justify
its issuance, the writ of preliminary attachment issued by the respondent court
was improvidently issued and should be discharged.[22]
From said CA Decision, Te filed a Motion for Reconsideration but to
no avail.[23]
Te filed with us a Petition for Review
on Certiorari[24]
but we denied the same in a Resolution dated
June 8, 1994 for having been filed late and for failure to show that a
reversible error was committed by the CA.[25]
Entry of Judgment of our June 8, 1994 Resolution was made on July 22, 1994.[26]
Thus, the finding of the CA in its September 14, 1993 Decision in CA-G.R. SP
No. 31230 on the wrongfulness of the attachment/levy of the properties of
Spouses Yu became conclusive and binding.
However, on
WHEREFORE, premises considered, the
Court finds that the plaintiff has
established a valid civil cause of action against the defendants, and
therefore, renders this judgment in favor of the plaintiff and against the
defendants, and hereby orders the following:
1)
Defendants are hereby ordered or directed to pay the plaintiff the sum of P549,404.00,
with interest from the date of the filing of this case (March 3, 1993);
2)
The Court, for reasons aforestated, hereby denies the grant of damages to the
plaintiff;
3)
The Court hereby adjudicates a reasonable attorney’s fees and litigation
expenses of P10,000.00 in favor of the plaintiff;
4) On the counterclaim, this Court declines to rule on this, considering that the question of the attachment which allegedly gave rise to the damages incurred by the defendants is being determined by the Supreme Court.
SO ORDERED.[27]
(Emphasis ours)
Spouses Yu filed with the RTC a
Motion for Reconsideration[28]
questioning the disposition of their counterclaim. They also filed a
Manifestation[29]
informing the RTC of our
The
RTC issued an Order dated
x
x x x
(2) With regard the counter claim
filed by the defendants against the plaintiff for the alleged improvident
issuance of this Court thru its former Presiding Judge (Honorable Emilio
Leachon, Jr.), the same has been ruled with definiteness by the Supreme Court
that, indeed, the issuance by the Court of the writ of preliminary attachment
appears to have been improvidently done, but nowhere in the decision of the
Supreme Court and for that matter, the Court of Appeal’s decision which was in
effect sustained by the High Court, contains any ruling or directive or
imposition, of any damages to be paid by the plaintiff to the defendants,
in other words, both the High Court and the CA, merely declared the previous
issuance of the writ of attachment by this Court thru its former presiding
judge to be improvidently issued, but it did not award any damages of any kind
to the defendants, hence, unless the High Court or the CA rules on this, this
Court coud not grant any damages by virtue of the improvident attachment made
by this Court thru its former presiding judge, which was claimed by the
defendants in their counter claim.
(3) This Court hereby reiterates in
toto its Decision in this case dated
The RTC also issued an Order dated
In
the same December 2, 1994 Order, the RTC granted two motions filed by Te, a
Motion to Correct and to Include Specific Amount for Interest and a Motion for Execution Pending Appeal.[33]
The RTC also denied Spouses Yu’s Notice of Appeal[34]
from the
From
said December 2, 1994 RTC Order, Spouses Yu filed another Notice of Appeal [35]
which the RTC also denied in an Order[36]
dated
Spouses Yu filed with the CA a
Petition[37]
for Certiorari, Prohibition and Mandamus, docketed as CA-G.R. SP
No. 36205, questioning the denial of their Notices of Appeal; and seeking the modification of the July 20,
1994 Decision and the issuance of a Writ of Execution. The CA granted the
Petition in a Decision[38]
dated
Hence, Spouses Yu filed with the CA an
appeal[39]
docketed as CA-G.R. CV No. 52246, questioning only that portion of the July 20,
1994 Decision where the RTC declined to rule on their counterclaim for damages.[40]
However, Spouses Yu did not dispute the specific monetary awards granted to
respondent Te; and therefore, the same have
become final and executory.
Although in the herein assailed
Decision[41]
dated
Spouses Yu filed a Motion for
Reconsideration[42]
but the CA denied it in the herein assailed Resolution[43]
dated
Spouses Yu filed the present Petition
raising the following issues:
I. Whether or not the appellate court
erred in not holding that the writ of attachment was procured in bad faith,
after it was established by final judgment that there was no true ground
therefor.
II. Whether or not the appellate court
erred in refusing to award actual, moral and exemplary damages after it was
established by final judgment that the writ of attachment was procured with no
true ground for its issuance.[44]
There
is one preliminary matter to set straight before we resolve the foregoing
issues.
According to respondent Te,[45]
regardless of the evidence presented by Spouses Yu, their counterclaim was
correctly dismissed for failure to comply with the procedure laid down in
Section 20 of Rule 57. Te contends that
as Visayan Surety was not notified of the counterclaim, no judgment thereon
could be validly rendered.
Such argument is not only flawed, it is
also specious.
As stated earlier, Spouses Yu filed a
Claim Against Surety Bond on the same day they filed their Answer and Urgent
Motion to Dissolve Writ of Preliminary Attachment.[46] Further, the records reveal that on
Moreover, even if it were true that
Visayan Surety was left in the proceedings a
quo, such omission is not fatal to the cause of Spouses Yu. In Malayan Insurance Company, Inc. v. Salas,[50]
we held that “x x x if the surety was
not given notice when the claim for damages against the principal in the
replevin bond was heard, then as a matter of procedural due process the surety
is entitled to be heard when the judgment for damages against the principal is
sought to be enforced against the surety’s replevin bond.”[51] This remedy is applicable for the
procedures governing
claims for damages
on an attachment bond and on a replevin bond are the same.[52]
We now proceed
to resolve the issues jointly.
Spouses Yu contend that they are
entitled to their counterclaim for damages as a matter of right in view of the
finality of our June 8, 1994 Resolution in G.R. No. 114700 which affirmed the
finding of the CA in its September 14, 1993 Decision in CA-G.R. SP No. 31230
that respondent Te had wrongfully caused the attachment of their properties.
Citing Javellana v. D.O. Plaza
Enterprises, Inc.,[53]
they argue that they should be awarded damages based solely on the CA finding
that the attachment was illegal for it already suggests that Te acted with malice when
she applied for attachment. And even if we
were to assume that Te did not act with malice, still she should be held liable
for the aggravation she inflicted when she applied for attachment even when she
was clearly not entitled to it.[54]
That is a rather limited
understanding of Javellana. The counterclaim disputed therein was not for
moral damages and therefore, there was no need to prove malice. As early as in Lazatin v. Twaño,[55]
we laid down the rule that where there is wrongful attachment, the attachment
defendant may recover actual damages even without proof that the attachment
plaintiff acted in bad faith in obtaining the attachment. However, if it is
alleged and established that the attachment was not merely wrongful but also malicious,
the attachment defendant may recover moral damages and exemplary damages as
well. [56] Either way, the wrongfulness of the
attachment does not warrant the automatic award of damages to the attachment
defendant; the latter must first
discharge the burden of proving the nature and extent of the loss or injury
incurred by reason of the wrongful attachment.[57]
In fine, the CA finding that the
attachment of the properties of Spouses Yu was wrongful did not relieve Spouses
Yu of the burden of proving the factual basis of their counterclaim for
damages.
To merit an award of actual damages
arising from a wrongful attachment, the attachment defendant must prove, with
the best evidence obtainable, the fact of loss or injury suffered and the
amount thereof.[58] Such loss or injury must be of the kind which
is not only capable of proof but must actually be proved with a reasonable
degree of certainty. As to its amount, the same must be measurable based on
specific facts, and not on guesswork or speculation. [59]
In particular, if the claim for actual damages covers unrealized profits, the
amount of unrealized profits must be estalished and supported by independent
evidence of the mean income of the business undertaking interrupted by the
illegal seizure. [60]
Spouses Yu insist that the evidence
they presented met the foregoing standards. They point to the lists of their
daily net income from the operation of said passenger bus based on used ticket
stubs[61]
issued to their passengers. They also cite unused ticket stubs as proof of
income foregone when the bus was wrongfully seized.[62]
They further cite the unrebutted testimony of Josefa Yu that, in the day-to-day
operation of their passenger bus, they use up at least three ticket stubs
and earn a minimum daily income of P1,500.00.[63]
In ruling that Spouses Yu failed to
adduce sufficient evidence to support their counterclaim for actual damages,
the CA stated, thus:
In
this case, the actual damages cannot be determined. Defendant-appellant Josefa
Yu testified on supposed lost profits without clear and appreciable
explanation. Despite her submission of the used and unused ticket stubs, there
was no evidence on the daily net income, the routes plied by the bus and the
average fares for each route. The submitted basis is too speculative and
conjectural. No reports regarding the average actual profits and other evidence
of profitability necessary to prove the amount of actual damages were
presented. Thus, the Court a quo did not err in not awarding
damages in favor of defendants-appellants.[64]
We usually defer to the expertise of
the CA, especially when it concurs with the factual findings of the RTC.[65] Indeed, findings of fact may be passed upon
and reviewed by the Supreme Court in the following instances: (1) when
the conclusion is a finding grounded entirely on speculations, surmises, or
conjectures; (2) when the inference made is manifestly mistaken, absurd, or
impossible; (3) where there is a grave abuse of discretion in the appreciation
of facts; (4) when judgment is based on a misapprehension of facts; (5)
when the lower court, in making its findings, went beyond the issues of the case
and such findings are contrary to the admissions of both appellant and
appellee; (6) when the factual findings of the CA are contrary to those of the
trial court; (7) when the findings of fact are themselves conflicting; (8) when
the findings of fact are conclusions made without a citation of specific
evidence on which they are based; (9) when the facts set forth in the petition
as well as in the petitioner’s main and reply briefs are not disputed by the
respondents; (10) when the findings of fact of the lower court are
premised on the supposed absence of evidence and are contradicted by the
evidence on record.[66]
However, the present case does not fall under any of the exceptions. We are in full accord with the CA that
Spouses Yu failed to prove their counterclaim.
Spouses Yu’s claim for unrealized income of P1,500.00
per day was based on their computation of their average daily income for the
year 1992. Said computation in turn is based on the value of three ticket stubs
sold over only five separate days in 1992.[67] By no stretch of the imagination can we
consider ticket sales for five days sufficient evidence of the average daily
income of the passenger bus, much less its mean income. Not even the unrebutted testimony of Josefa
Yu can add credence to such evidence for the
testimony itself lacks corroboration.[68]
Besides, based
on the August 29, 1994 Manifestation[69]
filed by Sheriff Alimurung, it would appear that long before the passenger bus
was placed under preliminary attachment in Civil Case No. 4061-V-93, the same had been previously attached by the
Sheriff of Mandaue City in connection with another case and that it was placed
in the Cebu Bonded Warehousing Corporation, Cebu City. Thus, Spouses Yu cannot
complain that they were unreasonably deprived of the use of the passenger bus
by reason of the subsequent wrongful attachment issued in Civil Case No. 4061-V-93.
Nor can they also attribute to the wrongful attachment their failure to earn
income or profit from the operation of the passenger bus.
Moreover,
petitioners did not present evidence as to the damages they suffered by reason
of the wrongful attachment of Lot No. 11.
Nonetheless, we recognize that
Spouses Yu suffered some form of pecuniary loss when their properties were
wrongfully seized, although the amount thereof cannot be definitively
ascertained. Hence, an award of temperate or moderate damages in the amount of P50,000.00
is in order.[70]
As to moral and exemplary damages, to
merit an award thereof, it must be shown
that the wrongful attachment was obtained by the attachment
plaintiff with malice or bad faith, such as by appending a false affidavit to
his application.[71]
Spouses Yu argue that malice attended
the issuance of the attachment bond as shown by the fact that Te deliberately appended
to her application for preliminary attachment an Affidavit where Sy perjured
himself by stating that they had no intention to pay their obligations even
when he knew this to be untrue given that they had always paid their
obligations; and by accusing them of disposing of their properties to defraud
their creditors even when he knew this to be false, considering that the
location of said properties was known to him.[72]
The testimony
of petitioner Josefa Yu herself negates their claim for moral and exemplary
damages. On cross-examination she testified, thus:
Q: Did you
ever deposit any amount at that time to fund the check?
A: We
requested that it be replaced and staggered into smaller amounts.
COURT: Did
you fund it or not?
Atty. Ferrer:
The three checks involved?
Atty. Florido: Already answered. She said that they
were not able to fund it.
Atty. Ferrer: And as a matter of fact, you went to the
bank to close your account?
A: We closed account with the bank because we
transferred the account to another bank.
Q: How much money did you transfer from that bank to
which the three checks were drawn to this new bank?
A: I don’t know how much was there but we
transferred already to the Solid Bank.
Q: Who transferred?
A: My daughter, sir.[73] (Emphasis ours)
Based on the foregoing testimony, it
is not difficult to understand why Te concluded
that Spouses Yu never intended to pay their obligation for they had available funds in their bank but chose
to transfer said funds instead of cover the checks they issued. Thus, we cannot attribute malice nor bad
faith to Te in applying for the attachment writ. We cannot hold her liable for
moral and exemplary damages.
As a rule, attorney’s fees cannot be
awarded when moral and exemplary damages are not granted, the exception however
is when a party incurred expenses to lift a wrongfully issued writ of
attachment.[74] Without a doubt, Spouses Yu waged a protracted
legal battle to fight off the illegal attachment of their properties and pursue
their claims for damages. It is only
just and equitable that they be awarded reasonable attorney’s fees in the
amount of P30,000.00.
In sum, we affirm the dismissal of
the counterclaim of petitioners Spouses Yu for actual, moral, and exemplary
damages. However, we grant them temperate damages and attorney’s fees.
WHEREFORE, the petition is partly GRANTED. The
March 21, 2001 Decision of the Court of Appeals is AFFIRMED with the MODIFICATION
that petitioners’ counterclaim is PARTLY GRANTED. Gregorio Yu and
Josefa Yu are awarded P50,000.00 temperate damages and P30,000.00
attorney’s fees.
No costs.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
ROMEO
J. CALLEJO, SR. MINITA V. CHICO-NAZARIO
Associate Justice Associate Justice
ATTESTATION
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
C
E R T I F I C A T I O N
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[1] Rollo, p. 26.
[2] Entitled “Ngo Yet Te, doing business under the name and style ESSENTIAL MANUFACTURING, represented by her attorney-in-fact Charry N. Sy, Plaintiff-Appellee, v. Sps. Gregorio and Josefa Yu, doing business under the name and style ARCHIE’S STORE, Defendants-Appellants.”
[3] Rollo, p. 45.
[4] Exhibit Envelope, Exhibits “A,” “B,” and “C,” envelope of exhibits.
[5] Exhibits “A-1,” “B-1,” and “C-1,” envelope of exhibits.
[6] Exhibit “H,” envelope of exhibits.
[7] Records, p. 1.
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21] Penned by Associate Justice Minerva P. Gonzaga-Reyes (now a retired member of this Court) and concurred in by Associate Justices Vicente V. Mendoza (now a retired member of this Court) and Pacita Canizares-Nye (deceased).
[22] Records,
pp. 226-227.
[23]
[24]
Docketed as G.R. No. 114700.
[25]
Records, p. 340.
[26]
[27]
[28]
[29]
[30]
[31]
[32] In
the same December 2, 1994 Order, the RTC granted two motions filed by Te, a
Motion to Correct and to Include Specific Amount for Interest and a Motion for Execution Pending
Appeal. (
[33]
[34]
[35]
[36]
[37]
[38]
[39]
CA rollo, p. 43.
[40]
[41]
Penned by Associate Justice
Ruben T. Reyes and concurred in by Associate Justices Presbitero J. Velasco,
Jr. (now a member of this Court) and Juan Q. Enriquez, Jr., id. at 120.
[42]
[43] Penned by Associate Justice Ruben T. Reyes and concurred in by Associate Justices Cancio C. Garcia (now a member of this Court) and Juan Q. Enriquez, Jr., id. at 162.
[44] Petition, rollo, p. 12.
[45]
[46] See notes 13, 14 and 15.
[47] Records, p. 160.
[48]
[49]
[50] G.R. No. L-48820, May 25, 1979, 90
SCRA 252.
[51]
[52] Rules of Court (1964), Rule 60, Sec. 10, reads:
The amount, if any, to be awarded to either party upon any bond filed by the other in accordance with the provisions of this Rule, shall be claimed, ascertained, and granted under the same procedure as prescribed in Section 20 of Rule 57.
[53] 143
Phil. 129 (1970).
[54] Rollo,
pp. 13-16.
[55] 112
Phil. 733 (1961).
[56] Calderon
v. Intermediate Appellate Court, G.R.
No. 74696, November 11, 1987, 155 SCRA 531, 539.
[57]
MC Engineering, Inc. v. Court
of Appeals, 429 Phil. 634, 666 (2002). See also Carlos v. Sandoval, G.R. No. 135830,
[58] Carlos
v. Sandoval, supra; MC Engineering, Inc. v. Court of Appeals, supra; Rivera v.
Solidbank Corporation, G.R. No. 163269, April 19, 2006, 487 SCRA 512, 546.
[59] Saguid v. Security Finance, Inc., G.R. No. 159467, December 9, 2005, 477 SCRA 256, 275; Villafuerte v. Court of Appeals, G.R. No. 134239, May 26, 2005, 459 SCRA 58, 69.
[60] Public Estates Authority v. Chu, G.R. No. 145291, September 21, 2005, 470 SCRA 495, 503; Villafuerte v. Court of Appeals, supra note 59.
[61] Exhibits “11-A” to “11-C,” “12-A” to “12-C,” “13-A” to “13-C,” “14-A” to “14-C” and “15-A” to “15-C,” envelope of exhibits.
[62] Rollo, p. 17.
[63]
[64] CA rollo, pp. 129-130.
[65] Pilipinas Shell Petroleum Corporation v. John Bordman Ltd. of Iloilo, Inc., G.R. No. 159831, October 14, 2005, 473 SCRA 151, 162.
[66] Child Learning Center, Inc. v. Tagario, G.R. No. 150920, November 25, 2005, 476 SCRA 236, 241-242.
[67] There were 15 ticket stubs presented in evidence. Given that Spouses Yu issue three tickets stubs each day of operation, it follows that the 15 ticket stubs represent sales for five separate days.
[68] Saguid v. Security Finance, Inc., supra note 59.
[69] Records, p. 362.
[70] Villafuerte v. Court of Appeals, supra note 59, at 77.
[71]
MC Engineering, Inc. v. Court
of Appeals, supra note 57; Solidbank Corporation v. Mindanao Ferroalloy
Corporation, G.R. No. 153535, July 28, 2005, 464 SCRA 409, 429; Philippine
Commercial International Bank v. Intermediate Appellate Court, G.R. No.
73610, April 19, 1991, 196 SCRA 29, 36.
[72] Petition, rollo, pp. 13-16.
[73]
TSN,
[74] Carlos v. Sandoval, supra note 57, at 299-300; MC Engineering, Inc. v. Court of Appeals, supra note 57, at 667.