G.R. No.

118342 January 5, 1998

DEVELOPMENT BANK O T!E P!"L"PP"NE#, petitioner,
vs.
$O%RT O APPEAL# an& L'D"A $%BA, respondents.
G.R. No. 1183() January 5, 1998
L'D"A P. $%BA, petitioner,
vs.
$O%RT O APPEAL#, DEVELOPMENT BANK O T!E P!"L"PP"NE# an&
AGR"P"NA P. $APERAL,respondents.

DAV"DE, JR., J.:
These two consolidated cases stemmed from a complaint
1
filed against the
Development Bank of the Philippines (hereafter DBP) and Agripina Caperal
filed b !dia C"ba (hereafter C#BA) on $% &a %'() with the *egional Trial
Co"rt of Pangasinan, Branch )+. The said complaint so"ght (%) the
declaration of n"llit of DBP,s appropriation of C#BA,s rights, title, and
interests over a ++-hectares fishpond located in Bolinao, Pangasinan, for
being violative of Article $.(( of the Civil Code/ ($) the ann"lment of the Deed
of Conditional 0ale e1ec"ted in her favor b DBP/ (2) the ann"lment of DBP,s
sale of the s"b3ect fishpond to Caperal/ (+) the restoration of her rights, title,
and interests over the fishpond/ and ()) the recover of damages, attorne,s
fees, and e1penses of litigation.
After the 3oinder of iss"es following the filing b the parties of their respective
pleadings, the trial co"rt cond"cted a pre-trial where C#BA and DBP agreed
on the following facts, which were embodied in the pre-trial order4
2
%. Plaintiff !dia P. C"ba is a grantee of a 5ishpond !ease
Agreement 6o. $.(2 (new) dated &a %2, %'7+ from the
8overnment/
$. Plaintiff !dia P. C"ba obtained loans from the Development
Bank of the Philippines in the amo"nts of P%.',....../
P%.',....../ and P'(,7..... "nder the terms stated in the
Promissor 6otes dated 0eptember 9, %'7+/ A"g"st %%, %'7)/
and April +, %'77/
2. As sec"rit for said loans, plaintiff !dia P. C"ba e1ec"ted two
Deeds of Assignment of her !easehold *ights/
+. Plaintiff failed to pa her loan on the sched"led dates thereof
in accordance with the terms of the Promissor 6otes/
). :itho"t foreclos"re proceedings, whether 3"dicial or e1tra-
3"dicial, defendant DBP appropriated the !easehold *ights of
plaintiff !dia C"ba over the fishpond in ;"estion/
9. After defendant DBP has appropriated the !easehold *ights
of plaintiff !dia C"ba over the fishpond in ;"estion, defendant
DBP, in t"rn, e1ec"ted a Deed of Conditional 0ale of the
!easehold *ights in favor of plaintiff !dia C"ba over the same
fishpond in ;"estion/
7. <n the negotiation for rep"rchase, plaintiff !dia C"ba
addressed two letters to the &anager DBP, Dag"pan Cit dated
6ovember 9, %'7' and December $., %'7'. DBP thereafter
accepted the offer to rep"rchase in a letter addressed to plaintiff
dated 5ebr"ar %, %'($/
(. After the Deed of Conditional 0ale was e1ec"ted in favor of
plaintiff !dia C"ba, a new 5ishpond !ease Agreement 6o.
$.(2-A dated &arch $+, %'(. was iss"ed b the &inistr of
Agric"lt"re and 5ood in favor of plaintiff !dia C"ba onl,
e1cl"ding her h"sband/
'. Plaintiff !dia C"ba failed to pa the amorti=ations stip"lated
in the Deed of Conditional 0ale/
%.. After plaintiff !dia C"ba failed to pa the amorti=ation as
stated in Deed of Conditional 0ale, she entered with the DBP a
temporar arrangement whereb in consideration for the
deferment of the 6otarial *escission of Deed of Conditional
0ale, plaintiff !dia C"ba promised to make certain paments as
stated in temporar Arrangement dated 5ebr"ar $2, %'($/
%%. Defendant DBP thereafter sent a 6otice of *escission thr"
6otarial Act dated &arch %2, %'(+, and which was received b
plaintiff !dia C"ba/
%$. After the 6otice of *escission, defendant DBP took
possession of the !easehold *ights of the fishpond in ;"estion/
%2. That after defendant DBP took possession of the !easehold
*ights over the fishpond in ;"estion, DBP advertised in the
0#6DA> P#6C? the p"blic bidding dated @"ne $+, %'(+, to
dispose of the propert/
%+. That the DBP thereafter e1ec"ted a Deed of Conditional
0ale in favor of defendant Agripina Caperal on A"g"st %9, %'(+/
%). Thereafter, defendant Caperal was awarded 5ishpond !ease
Agreement 6o. $.(2-A on December $(, %'(+ b the &inistr of
Agric"lt"re and 5ood.
Defendant Caperal admitted onl the facts stated in paragraphs %+ and %) of
the pre-trial order.
3
Trial was thereafter had on other matters.
The principal iss"e presented was whether the act of DBP in appropriating to
itself C#BA,s leasehold rights over the fishpond in ;"estion witho"t
foreclos"re proceedings was contrar to Article $.(( of the Civil Code and,
therefore, invalid. C#BA insisted on an affirmative resol"tion. DBP stressed
that it merel e1ercised its contract"al right "nder the Assignments of
!easehold *ights, which was not a contract of mortgage. Defendant Caperal
sided with DBP.
The trial co"rt resolved the iss"e in favor of C#BA b declaring that DBP,s
taking possession and ownership of the propert witho"t foreclos"re was
plainl violative of Article $.(( of the Civil Code which provides as follows4
Art. $.((. The creditor cannot appropriate the things given b
wa of pledge or mortgage, or dispose of them. An stip"lation
to the contrar is n"ll and void.
<t disagreed with DBP,s stand that the Assignments of !easehold *ights were
not contracts of mortgage beca"se (%) the were given as sec"rit for loans,
($) altho"gh the Afishpond landA in ;"estion is still a p"blic land, C#BA,s
leasehold rights and interest thereon are alienable rights which can be the
proper s"b3ect of a mortgage/ and (2) the intention of the contracting parties to
treat the Assignment of !easehold *ights as a mortgage was obvio"s and
"nmistakable/ hence, "pon C#BA,s defa"lt, DBP,s onl right was to foreclose
the Assignment in accordance with law.
The trial co"rt also declared invalid condition no. %$ of the Assignment of
!easehold *ights for being a clear case of pactum commissorium e1pressl
prohibited and declared n"ll and void b Article $.(( of the Civil Code. <t then
concl"ded that since DBP never ac;"ired lawf"l ownership of C#BA,s
leasehold rights, all acts of ownership and possession b the said bank were
void. Accordingl, the Deed of Conditional 0ale in favor of C#BA, the notarial
rescission of s"ch sale, and the Deed of Conditional 0ale in favor of
defendant Caperal, as well as the Assignment of !easehold *ights e1ec"ted
b Caperal in favor of DBP, were also void and ineffective.
As to damages, the trial co"rt fo"nd Aample evidence on recordA that in %'(+
the representatives of DBP e3ected C#BA and her caretakers not onl from
the fishpond area b"t also from the ad3oining big ho"se/ and that when
C#BA,s son and caretaker went there on %) 0eptember %'(), the fo"nd the
said ho"se "nocc"pied and destroed and C#BA,s personal belongings,
machineries, e;"ipment, tools, and other articles "sed in fishpond operation
which were kept in the ho"se were missing. The missing items were val"ed at
abo"t P)).,.... <t f"rther fo"nd that when C#BA and her men were e3ected
b DBP for the first time in %'7', C#BA had stocked the fishpond with
$).,... pieces of bang"s fish (milkfish), all of which died beca"se the DBP
representatives prevented C#BA,s men from feeding the fish. At the
conservative price of P2... per fish, the gross val"e wo"ld have been
P9'.,..., and after ded"cting $)B of said val"e as reasonable allowance for
the cost of feeds, C#BA s"ffered a loss of P)%7,)... <t then set the aggregate
of the act"al damages s"stained b C#BA at P%,.97,)...
The trial co"rt f"rther fo"nd that DBP was g"ilt of gross bad faith in falsel
representing to the B"rea" of 5isheries that it had foreclosed its mortgage on
C#BA,s leasehold rights. 0"ch representation ind"ced the said B"rea" to
terminate C#BA,s leasehold rights and to approve the Deed of Conditional
0ale in favor of C#BA. And considering that b reason of her "nlawf"l
e3ectment b DBP, C#BA As"ffered moral shock, degradation, social
h"miliation, and serio"s an1ieties for which she became sick and had to be
hospitali=edA the trial co"rt fo"nd her entitled to moral and e1emplar
damages. The trial co"rt also held that C#BA was entitled to P%..,...
attorne,s fees in view of the considerable e1penses she inc"rred for lawers,
fees and in view of the finding that she was entitled to e1emplar damages.
<n its decision of 2% @an"ar %''.,
4
the trial co"rt disposed as follows4
:?C*C5D*C, 3"dgment is hereb rendered in favor of plaintiff4
%. DCC!A*<68 n"ll and void and witho"t an legal effect the act
of defendant Development Bank of the Philippines in
appropriating for its own interest, witho"t an 3"dicial or e1tra-
3"dicial foreclos"re, plaintiff,s leasehold rights and interest over
the fishpond land in ;"estion "nder her 5ishpond !ease
Agreement 6o. $.(2 (new)/
$. DCC!A*<68 the Deed of Conditional 0ale dated 5ebr"ar
$%, %'(. b and between the defendant Development Bank of
the Philippines and plaintiff (C1h. C and C1h. %) and the acts of
notarial rescission of the Development Bank of the Philippines
relative to said sale (C1hs. %9 and $9) as void and ineffective/
2. DCC!A*<68 the Deed of Conditional 0ale dated A"g"st %9,
%'(+ b and between the Development Bank of the Philippines
and defendant Agripina Caperal (C1h. 5 and C1h. $%), the
5ishpond !ease Agreement 6o. $.(2-A dated December $(,
%'(+ of defendant Agripina Caperal (C1h. $2) and the
Assignment of !easehold *ights dated 5ebr"ar %$, %'()
e1ec"ted b defendant Agripina Caperal in favor of the
defendant Development Bank of the Philippines (C1h. $+)
as void ab initio/
+. D*DC*<68 defendant Development Bank of the Philippines
and defendant Agripina Caperal, 3ointl and severall, to restore
to plaintiff the latter,s leasehold rights and interests and right of
possession over the fishpond land in ;"estion, witho"t pre3"dice
to the right of defendant Development Bank of the Philippines to
foreclose the sec"rities given b plaintiff/
). D*DC*<68 defendant Development Bank of the Philippines
to pa to plaintiff the following amo"nts4
a) The s"m of D6C &<!!<D6 0<ET>-0CFC6
T?D#0A6D 5<FC ?#6D*CD PC0D0
(P%,.97,).....), as and for act"al damages/
b) The s"m of D6C ?#6D*CD T?D#0A6D
(P%..,......) PC0D0 as moral damages/
c) The s"m of 5<5T> T?D#0A6D (P).,......)
PC0D0, as and for e1emplar damages/
d) And the s"m of D6C ?#6D*CD T?D#0A6D
(P%..,......) PC0D0, as and for attorne,s fees/
9. And D*DC*<68 defendant Development Bank of the
Philippines to reimb"rse and pa to defendant Agripina Caperal
the s"m of D6C &<!!<D6 5<FC ?#6D*CD T?<*T>-T:D
T?D#0A6D 0<E ?#6D*CD TC6 PC0D0 A6D 0CFC6T>-5<FC
CC6TAFD0 (P%,)2$,9%..7)) representing the amo"nts paid b
defendant Agripina Caperal to defendant Development Bank of
the Philippines "nder their Deed of Conditional 0ale.
C#BA and DBP interposed separate appeals from the decision to the Co"rt of
Appeals. The former so"ght an increase in the amo"nt of damages, while the
latter ;"estioned the findings of fact and law of the lower co"rt.
<n its decision
5
of $) &a %''+, the Co"rt of Appeals r"led that (%) the trial
co"rt erred in declaring that the deed of assignment was n"ll and void and
that defendant Caperal co"ld not validl ac;"ire the leasehold rights from
DBP/ ($) contrar to the claim of DBP, the assignment was not a cession
"nder Article %$)) of the Civil Code beca"se DBP appeared to be the sole
creditor to C#BA G cession pres"pposes pl"ralit of debts and creditors/ (2)
the deeds of assignment represented the vol"ntar act of C#BA in assigning
her propert rights in pament of her debts, which amo"nted to a novation of
the promissor notes e1ec"ted b C#BA in favor of DBP/ (+) C#BA was
estopped from ;"estioning the assignment of the leasehold rights, since she
agreed to rep"rchase the said rights "nder a deed of conditional sale/ and ())
condition no. %$ of the deed of assignment was an e1press a"thorit from
C#BA for DBP to sell whatever right she had over the fishpond. <t also r"led
that C#BA was not entitled to loss of profits for lack of evidence, b"t agreed
with the trial co"rt as to the act"al damages of P%,.97,)... <t, however,
deleted the amo"nt of e1emplar damages and red"ced the award of moral
damages from P%..,... to P).,... and attorne,s fees, from P%..,... to
P).,....
The Co"rt of Appeals th"s declared as valid the following4 (%) the act of DBP
in appropriating C"ba,s leasehold rights and interest "nder 5ishpond !ease
Agreement 6o. $.(2/ ($) the deeds of assignment e1ec"ted b C"ba in favor
of DBP/ (2) the deed of conditional sale between C#BA and DBP/ and (+) the
deed of conditional sale between DBP and Caperal, the 5ishpond !ease
Agreement in favor of Caperal, and the assignment of leasehold rights
e1ec"ted b Caperal in favor of DBP. <t then ordered DBP to t"rn over
possession of the propert to Caperal as lawf"l holder of the leasehold rights
and to pa C#BA the following amo"nts4 (a) P%,.97,).. as act"al damages/
P).,... as moral damages/ and P).,... as attorne,s fees.
0ince their motions for reconsideration were denied,
(
DBP and C#BA filed
separate petitions for review.
<n its petition (8.*. 6o. %%(2+$), DBP assails the award of act"al and moral
damages and attorne,s fees in favor of C#BA.
#pon the other hand, in her petition (8.*. 6o. %%(297), C#BA contends that
the Co"rt of Appeals erred (%) in not holding that the ;"estioned deed of
assignment was a pactum commissorium contrar to Article $.(( of the Civil
Code/ (b) in holding that the deed of assignment effected a novation of the
promissor notes/ (c) in holding that C#BA was estopped from ;"estioning the
validit of the deed of assignment when she agreed to rep"rchase her
leasehold rights "nder a deed of conditional sale/ and (d) in red"cing the
amo"nts of moral damages and attorne,s fees, in deleting the award of
e1emplar damages, and in not increasing the amo"nt of damages.
:e agree with C#BA that the assignment of leasehold rights was a mortgage
contract.
<t is "ndisp"ted that C#BA obtained from DBP three separate loans totalling
P22),..., each of which was covered b a promissor note. <n all of these
notes, there was a provision that4 A<n the event of foreclos"re of
the mortgage sec"ring this notes, <H:e f"rther bind mselfHo"rselves, 3ointl
and severall, to pa the deficienc, if an.A
)
0im"ltaneo"s with the e1ec"tion of the notes was the e1ec"tion of
AAssignments of !easehold *ightsA
8
where C#BA assigned her leasehold
rights and interest on a ++-hectare fishpond, together with the improvements
thereon. As pointed o"t b C#BA, the deeds of assignment constantl
referred to the assignor (C#BA) as AborrowerA/ the assigned rights, as
mortgaged properties/ and the instr"ment itself, as mortgage contract.
&oreover, "nder condition no. $$ of the deed, it was provided that Afail"re to
compl with the terms and condition of an of the loans shall ca"se all other
loans to become d"e and demandable and all mortgages shall be foreclosed.A
And, condition no. 22 provided that if"foreclosure is act"all accomplished, the
"s"al %.B attorne,s fees and %.B li;"idated damages of the total obligation
shall be imposed.A There is, therefore, no shred of do"bt that a mortgage was
intended.
Besides, in their stip"lation of facts the parties admitted that the assignment
was b wa of sec"rit for the pament of the loans/ th"s4
2. As sec"rit for said loans, plaintiff !dia P. C"ba e1ec"ted two
Deeds of Assignment of her !easehold *ights.
<n People's Bank & Trust Co. vs. Odom,
9
this Co"rt had the occasion to r"le
that an assignment to g"arantee an obligation is in effect a mortgage.
:e find no merit in DBP,s contention that the assignment novated the
promissor notes in that the obligation to pa a s"m of mone the loans
("nder the promissor notes) was s"bstit"ted b the assignment of the rights
over the fishpond ("nder the deed of assignment). As correctl pointed o"t b
C#BA, the said assignment merel complemented or s"pplemented the
notes/ both co"ld stand together. The former was onl an accessor to the
latter. Contrar to DBP,s s"bmission, the obligation to pa a s"m of mone
remained, and the assignment merel served as sec"rit for the loans
covered b the promissor notes. 0ignificantl, both the deeds of assignment
and the promissor notes were e1ec"ted on the same dates the loans were
granted. Also, the last paragraph of the assignment stated4 AThe assignor
f"rther reiterates and states all terms, covenants, and conditions stipulated in
the promissory note or notes covering the proceeds of this loan, making said
promissor note or notes, to all intent and p"rposes, an integral part hereof.A
6either did the assignment amo"nt to pament b cession "nder Article %$))
of the Civil Code for the plain and simple reason that there was onl one
creditor, the DBP. Article %$)) contemplates the e1istence of two or more
creditors and involves the assignment of all the debtor,s propert.
6or did the assignment constit"te dation in pament "nder Article %$+) of the
civil Code, which reads4 Aationin pament, whereb propert is alienated to
the creditor in satisfaction of a debt in mone, shall be governed b the law on
sales.A <t bears stressing that the assignment, being in its essence a
mortgage, was b"t a sec"rit and not a satisfaction of indebtedness.
1*
:e do not, however, b" C#BA,s arg"ment that condition no. %$ of the deed
of assignment constit"ted pactum commissorium. 0aid condition reads4
%$. That effective "pon the breach of an condition of this
assignment, the Assignor hereb appoints the Assignee his
Attorne-in-fact with f"ll power and a"thorit to take act"al
possession of the propert above-described, together with all
improvements thereon, s"b3ect to the approval of the 0ecretar
of Agric"lt"re and 6at"ral *eso"rces, to lease the same or an
portion thereof and collect rentals, to make repairs or
improvements thereon and pa the same, to sell or otherwise
dispose of whatever rights the Assignor has or might have over
said propert andHor its improvements and perform an other act
which the Assignee ma deem convenient to protect its interest.
All e1penses advanced b the Assignee in connection with
p"rpose above indicated which shall bear the same rate of
interest aforementioned are also g"aranteed b this Assignment.
An amo"nt received from rents, administration, sale or disposal
of said propert ma be s"pplied b the Assignee to the
pament of repairs, improvements, ta1es, assessments and
other incidental e1penses and obligations and the balance, if
an, to the pament of interest and then on the capital of the
indebtedness sec"red hereb. <f after disposal or sale of said
propert and "pon application of total amo"nts received there
shall remain a deficienc, said Assignor hereb binds himself to
pa the same to the Assignee "pon demand, together with all
interest thereon "ntil f"ll paid. The power herein granted shall
not be revoked as long as the Assignor is indebted to the
Assignee and all acts that ma be e1ec"ted b the Assignee b
virt"e of said power are hereb ratified.
The elements of pactum commissorium are as follows4 (%) there sho"ld be a
propert mortgaged b wa of sec"rit for the pament of the principal
obligation, and ($) there sho"ld be a stip"lation for a"tomatic appropriation b
the creditor of the thing mortgaged in case of non-pament of the principal
obligation within the stip"lated period.
11
Condition no. %$ did not provide that the ownership over the leasehold rights
wo"ld a"tomaticall pass to DBP "pon C#BA,s fail"re to pa the loan on time.
<t merel provided for the appointment of DBP as attorne-in-fact with
a"thorit, among other things, to sell or otherwise dispose of the said real
rights, in case of defa"lt b C#BA, and to appl the proceeds to the pament
of the loan. This provision is a standard condition in mortgage contracts and is
in conformit with Article $.(7 of the Civil Code, which a"thori=es the
mortgagee to foreclose the mortgage and alienate the mortgaged propert for
the pament of the principal obligation.
DBP, however, e1ceeded the a"thorit vested b condition no. %$ of the deed
of assignment. As admitted b it d"ring the pre-trial, it had AIwJitho"t
foreclos"re proceedings, whether 3"dicial or e1tra3"dicial, . . . appropriatedthe
IlJeasehold IrJights of plaintiff !dia C"ba over the fishpond in ;"estion.A <ts
contention that it limited itself to mere administration b posting caretakers is
f"rther belied b the deed of conditional sale it e1ec"ted in favor of C#BA.
The deed stated4
:?C*CA0, the Fendor IDBPJ by virtue of a deed of
assignment e1ec"ted in its favor b the herein vendees IC"ba
spo"sesJ the former ac!uired all the right and interest of the
latter over the above-described propert/
111 111 111
The title to the real estate propert IsicJ and all improvements
thereon shall remain in the name of the "endor "ntil after the
p"rchase price, advances and interest shall have been f"ll
paid. (Cmphasis s"pplied).
<t is obvio"s from the above-;"oted paragraphs that DBP had appropriated
and taken ownership of C#BA,s leasehold rights merel on the strength of the
deed of assignment.
DBP cannot take ref"ge in condition no. %$ of the deed of assignment to
3"stif its act of appropriating the leasehold rights. As stated earlier, condition
no. %$ did not provide that C#BA,s defa"lt wo"ld operate to vest in DBP
ownership of the said rights. Besides, an assignment to g"arantee an
obligation, as in the present case, is virt"all a mortgage and not an
absolute conveyance of title which confers ownership on the assignee.
12
At an rate, DBP,s act of appropriating C#BA,s leasehold rights was violative
of Article $.(( of the Civil Code, which forbids a credit or from appropriating,
or disposing of, the thing given as sec"rit for the pament of a debt.
The fact that C#BA offered and agreed to rep"rchase her leasehold rights
from DBP did not estop her from ;"estioning DBP,s act of appropriation.
Cstoppel is "navailing in this case. As held b this Co"rt in some
cases,
13
estoppel cannot give validit to an act that is prohibited b law or
against p"blic polic. ?ence, the appropriation of the leasehold rights, being
contrar to Article $.(( of the Civil Code and to p"blic polic, cannot be
deemed validated b estoppel.
<nstead of taking ownership of the ;"estioned real rights "pon defa"lt b
C#BA, DBP sho"ld have foreclosed the mortgage, as has been stip"lated in
condition no. $$ of the deed of assignment. B"t, as admitted b DBP, there
was no s"ch foreclos"re. >et, in its letter dated $9 Dctober %'7', addressed
to the &inister of Agric"lt"re and 6at"ral *eso"rces and co"rsed thro"gh the
Director of the B"rea" of 5isheries and A;"atic *eso"rces, DBP declared that
it Ahad foreclosed the mortgage and enforced the assignment of leasehold
rights on &arch $%, %'7' for fail"re of said spo"ses IC"ba spo"cesJ to pa
their loan amorti=ations.A
14
This onl goes to show that DBP was aware of the
necessit of foreclos"re proceedings.
<n view of the false representation of DBP that it had alread foreclosed the
mortgage, the B"rea" of 5isheries cancelled C#BA,s original lease permit,
approved the deed of conditional sale, and iss"ed a new permit in favor of
C#BA. 0aid acts which were predicated on s"ch false representation, as well
as the s"bse;"ent acts emanating from DBP,s appropriation of the leasehold
rights, sho"ld therefore be set aside. To validate these acts wo"ld open the
floodgates to circ"mvention of Article $.(( of the Civil Code.
Cven in cases where foreclos"re proceedings were had, this Co"rt had not
hesitated to n"llif the conse;"ent a"ction sale for fail"re to compl with the
re;"irements laid down b law, s"ch as Act 6o. 2%2), as amended.
15
:ith
more reason that the sale of propert given as sec"rit for the pament of a
debt be set aside if there was no prior fore clos"re proceeding.
?ence, DBP sho"ld render an acco"nting of the income derived from the
operation of the fishpond in ;"estion and appl the said income in accordance
with condition no. %$ of the deed of assignment which provided4 AAn amo"nt
received from rents, administration, . . . ma be applied to the pament of
repairs, improvements, ta1es, assessment, and other incidental e1penses and
obligations and the balance, if an, to the pament of interest and then on the
capital of the indebtedness. . .A
:e shall now take "p the iss"e of damages.
Article $%'' provides4
C1cept as provided b law or b stip"lation, one is entitled to an
ade;"ate compensation onl for s"ch pec"niar loss s"ffered b
him as he has d"l proved. 0"ch compensation is referred to as
act"al or compensator damages.
Act"al or compensator damages cannot be pres"med, b"t m"st be proved
with reasonable degree of certaint.
1(
A co"rt cannot rel on spec"lations,
con3ect"res, or g"esswork as to the fact and amo"nt of damages, b"t m"st
depend "pon competent proof that the have been s"ffered b the in3"red
part and on the best obtainable evidence of the act"al amo"nt thereof.
1)
<t
m"st point o"t specific facts which co"ld afford a basis for meas"ring
whatever compensator or act"al damages are borne.
18
<n the present case, the trial co"rt awarded in favor of C#BA P%,.97,).. as
act"al damages consisting of P)).,... which represented the val"e of the
alleged lost articles of C#BA and P)%7,).. which represented the val"e of
the $2.,... pieces of bang"s allegedl stocked in %'7' when DBP first
e3ected C#BA from the fishpond and the ad3oining ho"se. This award was
affirmed b the Co"rt of Appeals.
:e find that the alleged loss of personal belongings and e;"ipment was not
proved b clear evidence. Dther than the testimon of C#BA and her
caretaker, there was no proof as to the e1istence of those items before DBP
took over the fishpond in ;"estion. As pointed o"t b DBP, there was not
Ainventor of the alleged lost items before the loss which is normal in a pro3ect
which sometimes, if not most often, is left to the care of other persons.A
6either was a single receipt or record of ac;"isition presented.
C"rio"sl, in her complaint dated %7 &a %'(), C#BA incl"ded Alosses of
propertA as among the damages res"lting from DBP,s take-over of the
fishpond. >et, it was onl in 0eptember %'() when her son and a caretaker
went to the fishpond and the ad3oining ho"se that she came to know of the
alleged loss of several articles. 0"ch claim for Alosses of propert,A having
been made before knowledge of the alleged act"al loss, was therefore
spec"lative. The alleged loss co"ld have been a mere aftertho"ght or
s"bterf"ge to 3"stif her claim for act"al damages.
:ith regard to the award of P)%7,... representing the val"e of the alleged
$2.,... pieces of bang"s which died when DBP took possession of the
fishpond in &arch %'7', the same was not called for. 0"ch loss was not d"l
proved/ besides, the claim therefor was delaed "nreasonabl. 5rom %'7'
"ntil after the filing of her complaint in co"rt in &a %'(), C#BA did not bring
to the attention of DBP the alleged loss. <n fact, in her letter dated $+ Dctober
%'7',
19
she declared4
%. That from 5ebr"ar to &a %'7(, < was then serio"sl ill in
&anila and within the same period < neglected the management
and s"pervision of the c"ltivation and harvest of the prod"ce of
the aforesaid fishpond thereb res"lting to the irreparable loss in
the prod"ce of the same in the amo"nt of abo"t P)..,...... to
m great damage and pre3"dice d"e to fra"d"lent acts of some
of m fishpond workers.
6owhere in the said letter, which was written seven months after DBP took
possession of the fishpond, did C#BA intimate that "pon DBP,s take-over
there was a total of $2.,... pieces of bang"s, b"t all of which died beca"se
of DBP,s representatives prevented her men from feeding the fish.
The award of act"al damages sho"ld, therefore, be str"ck down for lack of
s"fficient basis.
<n view, however, of DBP,s act of appropriating C#BA,s leasehold rights which
was contrar to law and p"blic polic, as well as its false representation to the
then &inistr of Agric"lt"re and 6at"ral *eso"rces that it had Aforeclosed the
mortgage,A an award of moral damages in the amo"nt of P).,... is in order
conformabl with Article $$%'(%.), in relation to Article $%, of the Civil Code.
C1emplar or corrective damages in the amo"nt of P$),... sho"ld likewise
be awarded b wa of e1ample or correction for the p"blic good.
2*
There
being an award of e1emplar damages, attorne,s fees are also recoverable.
21
:?C*C5D*C, the $) &a %''+ Decision of the Co"rt of Appeals in CA-8.*.
CF 6o. $9)2) is hereb *CFC*0CD, e1cept as to the award of P).,... as
moral damages, which is hereb s"stained. The 2% @an"ar %''. Decision of
the *egional Trial Co"rt of Pangasinan, Branch )+, in Civil Case 6o. A-%)7+
is &DD<5<CD setting aside the finding that condition no. %$ of the deed of
assignment constit"ted pactum commissorium and the award of act"al
damages/ and b red"cing the amo"nts of moral damages from P%..,... to
P).,.../ the e1emplar damages, from P).,... to P$),.../ and the
attorne,s fees, from P%..,... to P$.,.... The Development Bank of the
Philippines is hereb ordered to render an acco"nting of the income derived
from the operation of the fishpond in ;"estion.
!et this case be *C&A6DCD to the trial co"rt for the reception of the income
statement of DBP, as well as the statement of the acco"nt of !dia P. C"ba,
and for the determination of each part,s financial obligation to one another.
0D D*DC*CD.