G.R. No. 246012 - Lomarda vs. Fudalan

On September 27, 2006, respondent Engr. Elmer T. Fudalan, through his wife Alma Fudalan, applied for electrical service from BOHECO I Electric Cooperative Inc. for their farmhouse in Cambanac, Baclayon, Bohol.
Attended pre-membership seminar and paid membership fee of P48.12.
Advised to employ services of an authorized electrician from BOHECO I.

On October 7, 2006, respondent employed Sabino Albelda Sr., a BOHECO I authorized electrician.
Albelda informed respondent that electrical connection could only be installed if respondent procured a certification from Crispina Raso, BAPA Chairperson.
Respondent's farmhand attempted to secure certification from Raso but was unable to reach her.
Respondent consented to tapping electric line to BAPA's line upon Albelda’s assurance no pilferage charges would be applied and billing would be based on cooperative’s check meter.

On October 8, 2006, respondent personally tried to get the BAPA certification from Raso, who refused and reported the tapping to BOHECO I for disconnection.
Respondent and wife visited BOHECO I on October 17, 2006; attended by petitioner Ismael Lomarda, the receiving clerk, who promised to conduct ocular inspection.
In subsequent meetings:

Raso assured not to order disconnection but refused to issue certification.
Raso repeatedly used phrase “Sabut sabuton lang ni nato” (“let us just settle this”) indicating informal negotiation.
Raso claimed she was about to issue certification but was prevented by Lomarda, who allegedly informed her of a complaint against respondent for premature tapping.
Lomarda scheduled ocular inspection for November 6, 2006.

On November 6, 2006, respondent was assured electricity would not be disconnected and that certification would be issued if he paid P1,750.00 or signed a promissory note.
Respondent refused to comply due to absence of official order.
Lomarda publicly accused respondent of illegal tapping, with police and barangay officials present, and ordered disconnection of electricity.

On November 9, 2006, respondent inquired BOHECO I on electric dues and was informed he only owed P20.00 and no evidence of pilferage.
Feeling aggrieved by petitioners’ acts that allegedly defamed his honor and reputation, respondent filed a complaint for damages before the Regional Trial Court (RTC).
Petitioners claimed respondent committed premature tapping without BOHECO I approval and denied liability since they gave respondent option to pay penalty or sign promissory note.

RTC found petitioners liable for damages under Article 21 of the Civil Code and awarded:

RTC held respondent acted in good faith and petitioners acted maliciously and in bad faith.
Court of Appeals affirmed RTC decision with same factual findings.
Petitioners’ motion for reconsideration denied, leading to this petition for review on certiorari.

Whether the Court of Appeals correctly upheld the award of damages under Article 21 of the Civil Code against petitioners.