Case Digest (G.R. No. 64515)
Case Digest (G.R. No. 64515)
Facts:
R & B Surety & Insurance Co., Inc. v. The Intermediate Appellate Court and Angelina Uson, G.R. No. L-64515, June 22, 1984, Supreme Court First Division, Gutierrez, Jr., J., writing for the Court.In January 1969 the Philippine National Bank granted a P20,000 loan to Maria Isabel Diaz, which was secured by a surety bond (Exh. B) issued by petitioner R & B Surety & Insurance Co., Inc. To indemnify R & B, Diaz and co-obligors executed an indemnity agreement embodied in a chattel mortgage (Exh. C) that purportedly bore, among others, the signature of private respondent Angelina Uson. The indemnity agreement contained a clause obligating the indemnitors to reimburse R & B for payments, advances, expenses and attorney’s fees (not less than 20% of the amount claimed).
Maria Isabel Diaz defaulted on the loan and was declared in default for failing to answer. Eliseo Santos admitted signing the indemnity agreement but claimed he intended to be a mere character witness; he counterclaimed for attorney’s fees and other damages. Angelina Uson answered separately, averring that the signatures purporting to be hers on Exh. C were forgeries; she counterclaimed for P100,000 moral damages and counsel fees, and later cross-claimed against Diaz for forging her signature.
After trial the Court of First Instance (Manila, Branch XVI) rendered judgment ordering Maria Isabel Diaz and Eliseo Santos, jointly and severally, to pay R & B P20,000 with interest from January 16, 1974, plus 20% attorney’s fees and costs; the complaint against Uson was dismissed and the counterclaims of Santos and Uson were dismissed.
Uson appealed only the dismissal of her counterclaim. On April 29, 1982 the Intermediate Appellate Court modified the trial court’s decision and found that R & B acted in bad faith in including Uson as a defendant; it awarded Uson P100,000 moral damages, attorney’s fees equal to 25% of that amount, and P10,000 exemplary damages. R & B filed a motion for reconsideration which was denied, and then petitioned this Court by petition for review on certiorari under Rule 45 to set aside the Intermediate Appellate Court’s award.
R & B assigned errors challenging the finding of bad faith and negligence, the appellate court’s inferences from the facts, the grant of exemplary damages not pleaded or prayed for, and general nonconformity with law and precedent. The dispositive factual disputes below included whether Uson’s signatures on Exh. C were forged, whether R & B was negligent (e.g., by supplying blank indemnity forms or failing to require a residence certificate under Commonwealth Act No. 465), and whether R & B acted with malice or bad faith in filing suit against Uson despite her extrajudicial denial of signatures.
Issues:
- Did the Intermediate Appellate Court correctly find that petitioner acted in bad faith and negligence in filing the complaint against Angelina Uson so as to warrant an award of moral damages?
- Were exemplary damages and attorney’s fees properly awarded against petitioner on the basis of the appellate court’s finding of bad faith?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)