G.R. No. 116487 - People vs. Cabal y Dumadag

Petitioner: Clarissa U. Mata, doing business under the firm name Bessang Pass Security Agency.
Respondents: Former employees Eddie E. Santillan, Patricio A. Armodia, Alejandro A. Almaden, and Hermenegildo G. Saldo, who were formerly employed as security guards by the agency.

On October 27, 1993, the respondents, represented by counsel Atty. Alexander Agravante, filed a complaint with the National Labor Relations Commission (NLRC) in Cebu City, alleging the non-payment of salaries/wages and other benefits.
Shortly thereafter, they submitted an affidavit-complaint with the Philippine National Police (PNP) in Camp Crame, Quezon City, seeking an investigation of the security agency and the cancellation of its license due to alleged violations of labor laws.
Copies of the affidavit-complaint were sent to seven government offices, including high-ranking agencies such as the Office of the President and the Department of Public Works and Highways (DPWH), the latter being the petitioner’s biggest client.

On January 6, 1994, Clarissa Mata instituted an action for damages against the respondents, alleging that their complaints were unfounded and were filed with the intent to malign the reputation of her business.
The petitioner claimed that disseminating these complaints, particularly to a major client like the DPWH, resulted in a loss of contracts and income estimated at P5,000,000.00.
She further asserted that the defendants’ actions violated Articles 19, 20, and 21 of the Civil Code, seeking P1,000,000.00 in moral damages, along with attorney’s fees amounting to P200,000.00, as well as other reliefs.

On August 4, 1999, the trial court ruled in favor of the petitioner and awarded moral damages amounting to P1,000,000.00.
The trial court based its judgment on the preponderance of evidence that suggested the respondents submitted the letter-complaint with the sole motive of prejudicing the petitioner’s good name and reputation.
The claim for the estimated loss of income (P5,000,000.00) was excluded for being deemed speculative.

The Court of Appeals (CA) reversed the trial court’s decision, setting aside the verdict and dismissing the complaint for lack of merit.
In its decision, the CA found that the respondents’ action of filing the complaint with the PNP and sending copies to several government offices was neither motivated by malice nor tainted with bad faith.
The CA held that the respondents’ actions were a legitimate exercise of their rights to seek government intervention and redress for alleged labor law violations, despite the petitioner’s allegations of a deliberate campaign to malign her reputation.

Petitioner asserted that the CA committed reversible error and grave abuse of discretion in reversing the trial court's award of damages.
It was contended that the respondents’ actions were driven by vindictiveness toward the agency and intended to destroy both her reputation and business, which resulted in substantial collateral harm—including potential job losses for employees.
The petitioner maintained that the acts of the respondents violated Articles 19 and 21 of the Civil Code, for being contrary to the standards of justice, good faith, and the prohibition against abuse of rights.

Whether the respondents’ act of filing the complaint with the NLRC and subsequently with the PNP, along with furnishing copies to multiple government agencies (including the petitioner’s major client), was executed with the requisite malice and bad faith to support an award of moral damages.
Whether the actions of the respondents, in pursuing available legal avenues regarding alleged labor law abuses, constituted an abuse of rights under Articles 19 and 21 of the Civil Code.
Whether there was any violation of due process or evidence of ulterior, malicious motives that would justify holding the respondents liable for the reputational damage and economic loss claimed by the petitioner.