G.R. No. 205405 - Atienza vs. Golden Ram Engineering Supplies and Equipment Corporation

Petitioner Eduardo Atienza operated MV Ace I, a passenger vessel on the Batangas–Mindoro route.
Respondent Golden Ram Engineering Supplies & Equipment Corporation (GRESEC) was dealer and distributor of engines; its President/Manager was Bartolome T. Torres.
On August 24, 1993 Atienza purchased two MAN Diesel engines (Type D 2840 LE, 470 HP each) for P3.5 million under a pro forma invoice providing a 12-month (or 18-month/2,000 hours) warranty per “General Conditions of Sale DK.0105.N-12-87, Art. XI.”

The engines were delivered and commissioned by GRESEC in March 1994. During sea trials the starboard engine under-performed (slow acceleration, black smoke).
On September 26, 1994 the starboard engine broke down (split connecting rod). GRESEC’s engineer, R.R. Torres, diagnosed a factory defect and reported to MAN B&W Diesel Singapore, which promised replacement. GRESEC ignored subsequent demands.
On October 28, 1994 Atienza sent a demand letter: replace the engine or reimburse losses. GRESEC failed to act, prompting Atienza to file suit on November 16, 1994.

In the RTC (Civil Case No. 94-72195), Atienza proved breach of warranty and bad faith. On August 28, 2008 the court ordered GRESEC and Torres solidarily to pay actual damages (P1,600,000), moral damages (P200,000), attorney’s fees and costs (P150,000).
On appeal (CA-G.R. CV No. 92372), the CA (May 31, 2012) affirmed breach of warranty and actual damages but, finding no bad faith, removed moral damages, fees and Torres’s solidarity. Its January 14, 2013 Resolution denied reconsideration.
Atienza filed a Rule 45 petition before the Supreme Court, challenging the CA’s exculpation of Torres and deletion of moral damages and fees.

Whether respondents denied Atienza’s warranty claim in bad faith so as to warrant moral damages and attorney’s fees.
Whether Bartolome T. Torres is personally and solidarily liable with GRESEC for all damages.