FIRST DIVISION
[G.R. No. 111080. April 5, 2000]
JOSE S. OROSA
and MARTHA P. OROSA, petitioners, vs. HON. COURT OF APPEALS, FCP CREDIT
CORPORATION, respondents.francis
D E C I S I O N
YNARES_SANTIAGO, J.:
On December 6, 1984, private respondent FCP
Credit Corporation filed a complaint for replevin and damages[1] in the Regional Trial Court of Manila against
petitioner Jose S. Orosa and one John Doe to recover possession of a 1983 Ford
Laser 1.5 Sedan with Motor and Serial No. SUNKBT-14584. The complaint alleged
that on September 28, 1983, petitioner purchased the subject motor vehicle on
installment from Fiesta Motor Sales Corporation. He executed and delivered to
Fiesta Motor Sales Corp. a promissory note in the sum of P133,824.00
payable in monthly installments.[2] To secure payment, petitioner executed a chattel
mortgage over the subject motor vehicle in favor of Fiesta Motor Sales Corp. On
September 28, 1983, Fiesta Motor Sales assigned the promissory note and chattel
mortgage to private respondent FCP Credit Corporation. The complaint further
alleged that petitioner failed to pay part of the installment which fell due on
July 28, 1984 as well as three (3) consecutive installments which fell due on
August 28, September 28, and October 28, 1984. Consequently, private respondent
FCP Credit Corporation demanded from petitioner payment of the entire
outstanding balance of the obligation amounting to P106,154.48 with accrued
interest and to surrender the vehicle which petitioner was allegedly detaining. ella
After trial, the lower court dismissed
private respondent's complaint in a Decision dated March 25, 1988, the decretal
portion of which reads:
WHEREFORE,
judgment is rendered for the defendant, and against the plaintiff:
1) Dismissing the
complaint for lack of merit;
2) Declaring that
the plaintiff was not entitled to the Writ of Replevin, issued on January
7,1985, and is now liable to the defendant for actual damages under the
Replevin bond it filed; nigel
3) On defendant's
counter-claim, ordering the plaintiff to pay the defendant the sum of
P400,000.00 as moral damages, P100,000.00 as exemplary damages, and P50,000.00
as, and for, attorney's fees;
4) Ordering the
plaintiff to return to the defendant the subject 1983 Ford Laser Sedan, with
Motor or Serial No. SUNKBT-l4584, or its equivalent, in kind or value, in cash,
as of this date, and to pay the costs.
SO ORDERED. iska
The trial court ruled that private
respondent FCP had no reason to file the present action since petitioner
already paid the installments for the months of July to November 1984, which
are the sole bases of the complaint. The lower court declared that private
respondent was not entitled to the writ of replevin, and was liable to
petitioner for actual damages under the replevin bond it filed.[3]
Ruling on petitioner's counterclaim, the
trial court stated that there was no legal or factual basis for the writ of
replevin and that its enforcement by the sheriff was "highly irregular,
and unlawful, done, as it was, under shades of extortion, threats and force."[4] The trial
court ordered private respondent to pay the sum of P400,000.00 as moral
damages; P100,000.00 as exemplary damages and P50,000.00 as attorney's
fees. Private respondent was also ordered to return to petitioner the 1983 Ford
Laser 1.5 Sedan, or its equivalent, in kind or value in cash, as of date of
judgment and to pay the costs of the suit.[5]rodoflo
On June 7, 1988, a "Supplemental
Decision" was rendered by the trial court ordering private respondent's
surety, Stronghold Insurance Co., Inc. to jointly and severally [with private
respondent] return to petitioner the 1983 Ford Laser 1.5 Sedan or its
equivalent in kind or in cash and to pay the damages specified in the main
decision to the extent of the value of the replevin bond in the amount of P210,000.00.[6]
The surety company filed with the Court of
Appeals a petition for certiorari to annul the Order of the trial court
denying its motion for partial reconsideration, as well as the Supplemental
Decision. On the other hand, private respondent appealed the decision of the
RTC Manila to the Court of Appeals.
The surety company's petition for certiorari,
docketed as CA-G.R. SP No. 14938, was dismissed by the Court of Appeals' First
Division which upheld the trial court's order of execution pending appeal.[7] On November 6, 1989, this Court affirmed the Court
of Appeals decision, but deleted the order for the issuance of a writ of
execution pending appeal.[8]
Meanwhile, in private respondent's appeal, the
Court of Appeals' Eighth Division partially affirmed the ruling of the trial
court, in a Decision dated April 19, 1993, the dispositive portion of which
reads:[9]
WHEREFORE, the
Decision of 25 March 1988 of the Regional Trial Court, Branch 3, Manila is
hereby AFFIRMED with the following modifications: brando
(1) The award of
moral damages, exemplary damages and attorney's fees is DELETED;
(2) The order
directing plaintiff-appellant FCP Credit Corporation to return to defendant-appellee
Jose S. Orosa the subject 1983 Ford Laser Sedan, with Motor and Serial No.
SUNKBT-14584, its equivalent, in kind or value in cash, as of 25 March 1988,
and to pay the costs is DELETED; and;
(3)
Plaintiff-appellant FCP Credit Corporation is ordered to pay defendant-appellee
Jose S. Orosa the amount equivalent to the value of the fourteen (14) monthly
installments made by the latter to the former on the subject motor vehicle,
with interest from the time of filing of the complaint or from 6 December 1984.
No costs. micks
SO ORDERED.
Hence, this petition for review, on the
following assignments of error:[10]
(1) The Hon. Court
of Appeals (former Eighth Division) acted without or in excess of jurisdiction
when it reversed a final decision dated September 9, 1988, of a co-equal
division of the Hon. Court of Appeals (Special First Division) promulgated in
CA G.R. No. 14938, and which was sustained by the Hon. Supreme Court in a final
decision promulgated in G.R. No. 84979 dated November 6, 1989 which cases have
the same causes of action, same set of facts, the same parties and the same
relief.
novero
(2) The Hon. Court
of Appeals (former Eighth Division) acted with grave abuse of discretion and
authority when it considered causes of actions not allege in the complaint and
which were raised for the first time on appeal in deciding this case.
(3) The Hon. Court
of Appeals (former Eighth Division) committed serious error in applying the
case of Filinvest Credit Corporation vs. Ivans Mendez, 152 SCRA 598, as basis
in deciding this case when said case has a different set of facts from this
case.
In its first assignment of error, petitioner
alleges that the Eighth Division of the Court of Appeals had no jurisdiction to
review the present case since the First Division of the Court of Appeals
already passed upon the law and the facts of the same. Petitioner alleges that
the present appeal involves the same causes of action, same parties, same facts
and same relief involved in the decision rendered by the First Division and
affirmed by this Court in G.R. No. 84979.[11]
Petitioner's argument is untenable.
Jurisdiction is simply the power or authority to hear a case. The appellate
jurisdiction of the Court of Appeals to review decisions and orders of lower
courts is conferred by Batas Pambansa Blg. 129. More importantly, petitioner
cannot now assail the Court of Appeals' jurisdiction after having actively
participated in the appeal and after praying for affirmative relief.[12]
Neither can petitioner argue that res
judicata bars the determination of the present case. The two cases involve
different subject matters, parties and seek different reliefs. decision
The petition docketed as CA-G.R. SP No.
14938 was for certiorari with injunction, brought by Stronghold
Insurance Company, Inc. alleging that there was grave abuse of discretion when
the trial court adjudged it liable for damages without due process, in
violation of Rule 60, Section 10 in relation to Rule 57, Section 20, of the
Rules of Court. The surety also questioned the propriety of the writ of
execution issued by the trial court pending appeal.[13]
On the other hand, CA-G.R. CV No. 25929 was
filed by petitioner Orosa under Rule 45 of the Revised Rules of Court raising
alleged errors of law on the part of the trial court. The subject of the appeal
was the main decision, while the subject of the petition in CA-G.R. SP No.
14938 was the Supplemental Decision.
We agree with the Court of Appeals that:[14]
The decisions of
the Court of Appeals in CA-G.R. SP No. 14938 and the Supreme Court in G.R. No.
84979 did not pass on the merits of this case. It merely
ruled on the issues of whether the surety, Stronghold Insurance Co., Inc., can
be held jointly and solidarily liable with plaintiff-appellant and
whether execution pending appeal is proper under the facts and
circumstances of this case. Consequently, this Court is not marinellaestopped from reviewing the conclusions reached by
the court a quo. (underscoring ours)
In its second assigned error, petitioner
posits that the Court of Appeals committed grave abuse of discretion when it
considered causes of actions which were raised for the first time on appeal.[15]
True, private respondent submitted issues to
the Court of Appeals which were not raised in the original complaint. Private
respondent belatedly pointed out that:[16]
1.1. It is
pertinent to note that Defendant-Appellee has waived prior notice
and demand in order to be rendered in default, as in fact the Promissory Note
expressly stipulates that the monthly installments shall be paid on the date
they fall due, without need of prior notice or demand. alonzo
1.2. Said
Promissory Note likewise expressly stipulates that a late payment charge of 2%
per month shall be added on each unpaid installment from maturity thereof until
fully paid.
1.3. Of equal
significance is the Acceleration Clause in the Promissory Note which states
that if default be made in the payment of any of the installments or late
payment charges thereon when the same became due and payable, the total
principal sum then remaining unpaid, together with the agreed late payment
charges thereon, shall at once become due and payable.
Private respondent argued that based on the
provisions of the Promissory Note itself, petitioner incurred in default since,
even though there was actual payment of the installments which fell due on July
28, 1984, as well as the three installments on August 28 to October 28, 1984, the
payments were all late and irregular.[17] Private respondent also argued that petitioner
assigned the subject car to his daughter without the written consent of the
obligee, and hence, violated the terms of the chattel mortgage.[18] Meritorious as these arguments are, they come too
late in the day. Basic is the rule that matters not raised in the complaint
cannot be raised for the first time on appeal. calr
Contrary to petitioner's accusation, the
Court of Appeals restricted the determination of the case to matters alleged in
the complaint and raised during trial.[19] Citing jurisprudence,[20] the Court of Appeals held that "it would be
offensive to the basic rule of fair play, justice and due process" if it
considered issue raised for the first time on appeal.[21]
The Court of Appeals' statement that
"under the terms and conditions of the chattel mortgage,
defendant-appellee Jose S. Orosa was already in default," was made only to
justify the deletion of the trial court's award of moral, exemplary damages and
attorney's fees, in consonance with its finding that private respondent was
motivated by a sincere belief that it had sufficient basis an acted in good
faith when it filed the claim.[22]jojo
We now come to the matter of moral damages.
Petitioner insists that he suffered untold embarrassment when the complaint was
filed against him. According to petitioner, the car subject of this case was
being used by his daughter, married to Jose Concepcion III, a scion of a
prominent family. Petitioner laments that he assigned the car to his daughter
so that she could "approximate without equaling the status of her
in-laws." This being the case, petitioner experienced anguish and
unquantifiable humiliation when he had to face his daughter's wealthy in-laws
to explain the "why and the whats of the subject case." Petitioner
further insists that an award of moral damages is especially justified since he
is no ordinary man, but a businessman of high social standing, a graduate of De
La Salle University and belongs to a well known family of bankers.[23]
We must deny the claim. The law clearly
states that one may only recover moral damages if they are the proximate
result of the other party's wrongful act or omission.[24] Two elements are required. First, the act or
omission must be the proximate result of the physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation and similar injury. Second, the act must be
wrongful.
manikan
Petitioner maintains that embarrassment
resulted when he had to explain the suit to his daughter's in-laws. However,
that could have been avoided had he not assigned the car to his daughter and
had he been faithful and prompt in paying the installments required. Petitioner
brought the situation upon himself and cannot now complain that private
respondent is liable for the mental anguish and humiliation he suffered.
Furthermore, we agree with the appellate
court that when private respondent brought the complaint, it did so only to
exercise a legal right, believing that it had a meritorious cause of action
clearly borne out by a mere perusal of the promissory note and chattel
mortgage. To constitute malicious prosecution, there must be proof that the
prosecution was prompted by a sinister design to vex and humiliate a person,
and that it was initiated deliberately, knowing that the charges were false and
groundless.[25] Such was not the case when the instant complaint was
filed. The rule has always been that moral damages cannot be recovered from a
person who has filed a complaint against another in good faith.[26] The law always presumes good faith such that any
person who seeks to be awarded damages due to acts of another has the burden of
proving that the latter acted in bad faith or with ill motive.[27]juris
Anent the award of exemplary damages,
jurisprudence provides that where a party is not entitled to actual or moral
damages, an award of exemplary damages is likewise baseless.[28]
In the matter of attorney's fees, petitioner
avers that to prosecute and defend this case in the lower court and in the
appellate court, he incurred expenses amounting to P50,000.00,[29] and as such, attorney's fees should be granted. We
deny the claim. No premium should be placed on the right to litigate and not
every winning party is entitled to an automatic grant of attorney's fees.[30] The party must show that he falls under one of the
instances enumerated in Article 2208 of the Civil Code.[31] This, petitioner failed to do. Furthermore, where
the award of moral and exemplary damages is eliminated, so must the award for
attorney's fees be deleted.[32]
We also agree with the Court of Appeals that
the trial court erred when it ordered private respondent to return the subject
car or its equivalent considering that petitioner had not yet fully paid the
purchase price. Verily, to sustain the trial court's decision would amount to
unjust enrichment. The Court of Appeals was correct when it instead ordered
private respondent to return, not the car itself, but only the amount
equivalent to the fourteen installments actually paid with interest.[33]criminal
WHEREFORE, above premises considered, the petition is DENIED,
and the Court of Appeals' Decision of April 19, 1993 and its Resolution of July
22, 1993 are AFFIRMED in toto.
No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Kapunan, and Pardo, JJ., concur.
Puno, J., no part.
[1] Records, p. 1.
[2] Ibid.
[3] Rollo, p. 66.
[4] Rollo, p. 67.
[5] Rollo, p. 68.
[6] Records, p. 321.
[7] Rollo, pp. 220-228.
[8] Rollo, pp. 230-241.
[9] Rollo, p. 49-59.
[10] Rollo, p. 12.
[11] Rollo, p. 11.
[12] Francisco Motors Corporation v. Court of Appeals and
Spouses Gregorio and Librada Manuel, G.R. No. 100812, June 25, 1999.
[13] Records, p. 341.
[14] Rollo, p. 52.
[15] Rollo, p. 12.
[16] Rollo, p. 85.
[17] Rollo, p. 90.
[18] Rollo, pp. 99-100.
[19] Said the Court of Appeals: "Accordingly, the
Court will limit itself to the determination of whether or not
defendant-appellee Jose S. Orosa did in fact fail to pay the monthly
installments that fell due from 28 July 1984 to 28 October 1984." (Rollo,
p. 55.)
[20] Medida, et al. v. Court of Appeals, et al., 208 SCRA
887 (1992); Gevero, et al. v. Intermediate Appellate Court, et al., 189 SCRA
201 (1990).
[21] Rollo, p. 55.
[22] Rollo, p. 57.
[23] Rollo, p. 36.
[24] Civil Code, Art. 2217.
[25] Drilon, et al. v. Court of Appeals, et al., 270 SCRA
211 (1997).
[26] Mijares, et al. v. Court of Appeals, et al., 271 SCRA
558 (1997).
[27] Ford Philippines, Inc., et al. v. Court of Appeals,
et al., 267 SCRA 320 (1997).
[28] Bernardo v. Court of Appeals (Special Sixth
Division), et al., 275 SCRA 413 (1997).
[29] Rollo, p. 37.
[30] Philtranco Service Enterprises, Inc., et al. v. Court
of Appeals, et al., 273 SCRA 562 (1997).
[31] Article 2208 of the Civil Code
provides: In the absence of stipulation, attorney's fees and expenses of litigation,
other than judicial costs cannot be recovered except:
(1) When exemplary damages
are awarded;
(2) When the defendant's act
or omission has compelled the plaintiff to litigate with third persons or to
incur expenses to protect his interest;
(3) In criminal cases of
malicious prosecution against the plaintiff;
(4) In case of a clearly
unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant
acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly
valid, just and demandable claim;
(6) In actions for legal
support;
(7) In actions for recovery
of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity
under workmen's compensation and employer's liability laws;
(9) In a separate civil
action to recover civil liability arising from a crime;
(10) When at least double
judicial costs are awarded;
(11) In any other case where
the court deems it just and equitable that attorney's fees and expenses of
litigation should be recovered.
In all cases, the
attorney's fees and expenses of litigation must be reasonable.
[32] Bernardo v. Court of Appeals (Special Sixth
Division), et al., supra.
[33] Rollo, p. 57.