Case Summary (G.R. No. 118861)
Factual Background
Respondent Engr. Elmer T. Fudalan applied for electrical service through his wife at BOHECO I to power their farmhouse in Baclayon, Bohol. He paid the membership fee and was advised to have an authorized electrician from BOHECO I install the connection. Upon employing Sabino Albelda Sr., an authorized electrician, Fudalan was informed that installation required certification from Crispina Raso, chairperson of the Barangay Power Association (BAPA). Unable to obtain Raso’s certification due to her unavailability, respondent consented to tap his electrical line to BAPA’s with assurances from Albelda that billing would be proper and no pilferage charges would be applied.
Conflict and Petitioners’ Actions
Raso, upon learning of the tapping, refused to issue the required certification, vowed never to grant it, and reported the matter to BOHECO I for disconnection. Respondent and his wife protested this to BOHECO I, where Lomarda, clerk and petitioner, promised to inspect respondent’s farmhouse. Despite repeated meetings among respondent, Raso, and Lomarda—during which the phrase “Sabut sabuton lang ni nato” (“let us just settle this”) was repeatedly used to placate respondent—Raso withheld the certification, and Lomarda demanded payment of P1,750 or a promissory note before proceeding. Respondent refused, and Lomarda publicly accused him of illegal tapping, ultimately cutting off his electricity in the presence of police, barangay officials, and onlookers.
Legal Claims and Arguments
Respondent filed a damage complaint against Lomarda and Raso, alleging malice, bad faith, malicious delay in issuing certification, false accusations of premature tapping, and illegal extortion. Petitioners defended themselves by asserting that respondent engaged in premature and unauthorized tapping without a formal “turn-on” order and argued that the disconnection was lawful, conditioned on payment or promissory note.
RTC Decision
The RTC ruled in favor of respondent, holding petitioners liable under Article 21 of the Civil Code for damages caused by malicious conduct and abuse of rights. It found respondent acted in good faith, relying on an authorized electrician's advice, and exerted diligent efforts to comply with requirements. The court found petitioners’ conduct dishonest and malicious, especially for extorting an inflated payment and causing public humiliation through unlawful disconnection. The RTC awarded respondent actual damages (P451.65), moral damages (P200,000.00), exemplary damages (P100,000.00), attorney’s fees (P50,000.00), and litigation expenses (P20,000.00).
Court of Appeals Affirmation
The CA affirmed the RTC decision, noting respondent’s consistent good faith compliance efforts and absence of flagrante delicto of unauthorized tapping. The CA recognized petitioners’ acts as malicious, done in bad faith, and injurious to respondent’s rights and reputation. It also dismissed petitioners’ motion for reconsideration.
Issues for Supreme Court Review
The central issue was whether the CA correctly upheld the award of damages under Article 21 of the Civil Code concerning petitioner’s alleged abuse of rights and whether respondent was entitled to moral damages in the absence of concrete proof of moral suffering.
Supreme Court Analysis on Abuse of Rights and Liability
The Supreme Court emphasized the sanctity of factual findings by the RTC and CA unless there is compelling evidence of error. It clarified Articles 19 and 21 of the Civil Code, underscoring that while a right is legal, it can become illegal when exercised abusively, contrary to morals, good customs, public order, or public policy, resulting in damages to another party. Article 21 provides redress for such acts.
The court found respondent’s good faith efforts to comply with BOHECO I’s requirements were proven, while petitioners’ actions repeatedly delayed certification, misled respondent, sought unwarranted payment, and subjected him to public humiliation. The “clean hands” doctrine cited by petitioners did not apply here because respondent’s actions were not intended to violate rules but were obstructed by petitioners’ own bad faith acts.
Supreme Court Findings on Damages Awarded
The Court confirmed the RTC and CA’s award of actual damages based on evidenced losses, affirming P451.65. However, it deemed the moral damages (P200,000.00), exemplary damages (P100,000.00), attorney’s fees (P50,000.00), and litigation expenses (P20,000.00) excessive given the circumstances.
Moral damages were warranted due to proven mental anguish, public humiliation, and injury to reputation, but the Court adjusted the award to P50,000.00 to align with the modest ac
Case Syllabus (G.R. No. 118861)
Background and Parties Involved
- The case arose from a complaint for damages filed by respondent Engr. Elmer T. Fudalan against petitioners Ismael G. Lomarda and Crispina Raso, affiliates of BOHECO I Electric Cooperative Inc. (BOHECO I).
- Respondent applied for electrical service in 2006 to illuminate his farmhouse in Baclayon, Bohol.
- Petitioners are BOHECO I employees or representatives who were involved in processing respondent’s application and subsequent disconnection of electricity.
- The proceedings stemmed from disputes regarding the proper requirements and procedures for electrical connection installation and allegations of premature tapping of electricity.
Factual Background
- Respondent attended a pre-membership seminar at BOHECO I, paid a membership fee of P48.12, and was advised to hire an authorized electrician from BOHECO I.
- On October 7, 2006, respondent employed Sabino Albelda Sr., an authorized electrician, who stated that electrical connection required certification from Crispina Raso, Chairperson of the Barangay Power Association (BAPA).
- Multiple attempts to obtain the certification from Raso failed as she was unavailable or refused to issue it.
- Respondent consented to the tapping of his electrical line to BAPA’s line based on Albelda’s assurance that he would not be charged for pilferage and would be billed accordingly by the check meter.
- Raso reacted angrily upon learning of the tapping, vowed not to issue certification, and reported the matter to BOHECO I for disconnection.
- Respondent and his wife attempted to resolve the matter with petitioners Lomarda (a receiving clerk at BOHECO I) and Raso, who repeatedly said, “Sabut sabuton lang ni nato,” meaning “Let us just settle this.”
- Despite assurances, petitioners demanded P1,750.00 or a promissory note to avoid disconnection.
- Respondent refused to comply, after which Lomarda publicly declared respondent’s tapping as illegal, ordered disconnection, and caused public humiliation.
- Respondent discovered his actual electric usage was only P20.00, contrary to the excessive penalty demanded.
RTC Decision
- The Regional Trial Court (RTC) found petitioners liable for damages under Article 21 of the Civil Code.
- Petitioners were ordered to pay jointly and severally actual damages (P451.65), moral damages (P200,000.00), exemplary damages (P100,000.00), attorney’s fees (P50,000.00), and litigation expenses (P20,000.00).
- RTC ruled respondent did not commit premature tapping in violation of BOHECO I rules, since installation was done under the advice of an authorized electrician.
- Petitioners acted maliciously, dishonestly, and in bad faith by withholding BAPA certification, demanding improper payments, and causing unjust disconnection.
Court of Appeals Ruling
- The Court of Appeals (CA) affirmed the RTC decision.
- CA highlighted respondent’s good faith efforts to comply with rules, and absence of flagrante delicto for the tapping.
- CA found petitioners acted with malice and bad faith, violating morals, good customs, and public policy.
- Petitioners’ motion for reconsideration was denied.
Issue Before the Supreme Court
- Whether the CA correctly upheld the award of damages under Article 21 of the Civil Code.