Case Summary (G.R. No. 209359)
Procedural History
• June 29, 1992: Petitioner filed suit for damages and injunctive relief before the RTC of Quezon City.
• March 30, 1999 & May 18, 2006: RTC entered judgment in favor of petitioner, awarding actual, nominal, exemplary damages and attorney’s fees.
• October 10, 2012 & September 30, 2013: Court of Appeals (CA) reversed and dismissed the complaint; denied petitioner’s motion for reconsideration.
• Petition for review on certiorari under Rule 45 filed before the Supreme Court.
Factual Background
• Petitioner secured a new MWSS service connection on Visayas Avenue (November 16, 1990) to resolve chronic low water pressure, at a cost of ₱190,000 funded by members.
• August 16, 1991: MWSS contracted CMS Construction to rehabilitate water mains in neighboring Sanville Subdivision and install related service connections.
• April 1992: CMS Construction, with MWSS’s knowledge but without petitioner’s consent or prior notice, cut off and transferred petitioner’s 100 mm pipeline, replacing it with a 150 mm line; petitioner’s subdivision went waterless for three days and PVC pipes valued at ~₱30,000 were stolen.
• Petitioner’s demand for restoration was met only with a temporary 2-inch rubber hose connection; full restoration and return of stolen materials did not occur.
Applicable Law
• Constitution: 1987 Philippine Constitution (decision date post-1990)
• Civil Code: Article 19 (abuse of rights doctrine)
• Corporation Code: Section 31 (liability of directors and officers)
Issues for Resolution
- Existence of prior notice to petitioner before implementation of the rehabilitation project.
- Applicability of Article 19 of the Civil Code and proof of abuse of rights.
- Personal liability of the Cruzes under Section 31 of the Corporation Code.
- Proper measure and award of damages.
Findings on Notice
• CA’s finding of prior notice was unsupported by documentary evidence.
• Testimony of CMS Construction’s president conceded no written notice was issued by CMS Construction or produced by MWSS.
• Standard operating procedure letters and meetings claimed by MWSS consultant were likewise unsubstantiated.
• Absence of notice precluded due regard for petitioner’s property interests.
Abuse of Rights under Article 19
• Article 19 requires that rights be exercised with justice, honesty and good faith.
• Elements: (1) valid legal right or duty; (2) exercise in bad faith; (3) intent to prejudice another.
• Respondents admitted cutting off and transferring petitioner’s line without consent or notification, causing unjustified water outage and theft of materials.
• Such conduct constituted abuse of rights, meriting civil liability.
Liability of the Cruzes
• Section 31, Corporation Code, imposes personal liability only for willful unlawful acts, gross negligence, bad faith, or conflict of interest.
• Petitioner did not prove the Cruzes personally engaged in such conduct; liability limited to M
Case Syllabus (G.R. No. 209359)
Procedural History
- Petitioner filed a complaint for damages, with prayer for injunctive relief, before the Regional Trial Court (RTC) of Quezon City on June 29, 1992.
- RTC Branch 77 rendered judgment in favor of petitioner on March 30, 1999, awarding actual, nominal, exemplary damages and attorneys’ fees.
- Respondents filed motions for new trial and notices of appeal. On May 18, 2006, the RTC affirmed its earlier decision.
- Respondents appealed to the Court of Appeals (CA), which on October 10, 2012 reversed and set aside the RTC decisions and dismissed the complaint. A CA resolution of September 30, 2013 denied petitioner’s motion for reconsideration.
- Petitioner filed a petition for review on certiorari under Rule 45 before the Supreme Court, raising errors on notice, abuse of rights, and civil liability.
Facts
- Metroheights Subdivision faced insufficient water supply; petitioner sought MWSS assistance to relocate its tap and enlarge its service line.
- On November 16, 1990, petitioner contracted with MWSS for a new water service connection tapping Visayas Avenue, funded by petitioner’s members (P190,000 inclusive).
- From installation until April 1992, the subdivision enjoyed 24-hour sufficient water pressure.
- In April 1992, CMS Construction, under MWSS contract for the neighboring Sanville Subdivision, excavated along nearby streets and—without petitioner’s knowledge or consent but with MWSS awareness—cut off petitioner’s new connection.
- From May 28 to 30, 1992, petitioner’s members suffered a three-day water outage; petitioner’s PVC pipes and fittings valued at around P30,000 were allegedly stolen by CMS Construction workers.
- Petitioner’s demand for restoration led CMS Construction to install a temporary 2-inch rubber-hose jumper; permanent restoration and return of stolen materials were never made.
Parties’ Contentions
- Petitioner: respondents acted without authority or notice, in bad faith, abusing their rights and causing damage.
- MWSS: its contract with CMS Construction for water-main rehabilitation required creek crossing and interconnection of existing pipes, including petitioner’s, by way of split-tap tees.
- CMS Construction and the Cruzes: project was duly approved by MWSS, working drawings reviewed, pipe replacement increased diameter from 100 mm to 150 mm, interruption was brief and unavoidable, prior consultations took place.