Tan Ti v. Alevar
REITERATIONFacts
The Antecedents: Three plaintiffs, Tan Ti, Tiu Uco, and Tiu Tiao et al., each owned a retail store. The Court of First Instance of Manila issued an execution against one Lim Kok Tiu, and notices of garnishment were served on the plaintiffs. The sheriff's deputy, Lopez, received the notices and forwarded them to another deputy, Zulueta. Zulueta informed the plaintiffs that their stores would be closed unless they submitted bonds of P15,000. The plaintiffs sought time to secure bondsmen, which was granted. Upon consulting lawyers in Manila, they were advised that the sheriff had no right to close their stores based on garnishment process and that such action would render the deputies liable for damages. The plaintiffs returned to Dagupan and informed the deputies, but the stores were nevertheless closed on November 13, 1911, with guards posted. The owners again went to Manila. Their attorneys consulted with the attorney for the plaintiff in the garnishment case, who sent a telegram and a letter to the sheriff on November 14th, instructing him not to close the stores but to proceed according to section 431 of the Code of Civil Procedure. Despite these instructions and the fact that the notices were not writs of attachment, the deputy sheriffs refused to lift the attachment. The store owners filed their complaints on November 17, 1911. The attachments were lifted on November 21, 1911. Procedural History: The Court of First Instance of Manila awarded damages in each case. The defendants appealed. The Petition: The defendants appealed the decisions of the lower court awarding damages, particularly questioning the inclusion of attorney's fees and damages for impairment of credit.
Issue(s)
Whether attorney's fees incurred in procuring the dissolution of a wrongful attachment are recoverable as damages. Whether damages for impairment of credit are recoverable in cases of wrongful attachment. Whether the awarded damages for loss of profits, rent, wages, and travel expenses were proper.
Ruling
The Supreme Court modified the judgments of the lower court by reducing the awarded damages. Attorney's fees and damages for impairment of credit were disallowed. The damages for loss of profits, rent, and wages were allowed, and the expenses for two trips to Manila were approved. The judgments were modified as follows: Tan Ti's case reduced to P227.50; Tiu Uco's case to P460.50; and Tiu Tiao et al.'s case to P987. The modified judgments were affirmed.
Ratio Decidendi
On the issue of attorney's fees: The Court held that attorney's fees incurred in procuring the dissolution of wrongful attachments are not a proper element of damages in the Philippines. The Court cited the principle established in Oelrichs v. Spain by the United States Supreme Court, which disallowed such fees due to the potential for abuse, the difficulty in apportionment, and the lack of a clear basis for charging the defeated party for the successful party's counsel. The Court also referred to its own ruling in Ortiga Bros. & Co. v. Enage and Yap Tico, where attorney's fees for services in dissolving a wrongful attachment were disallowed. The Court reasoned that allowing such fees would place a penalty on the right to litigate and open the door to inflated charges. Therefore, the P500 awarded for attorney's fees in Tan Ti's case was disallowed. On the issue of damages for impairment of credit: The Court disallowed the P500 awarded for impairment of credit. While the plaintiff testified that his credit with wholesale houses was stopped, leading to an inability to secure merchandise for Christmas sales, his books showed significant sales in December, comparable to the previous year. The Court found that the wrongfulness of the seizure was apparent and could have been explained to the wholesale houses. Given that damages for loss of profits during the period of closure were already awarded, the Court concluded that any damage to credit was infinitesimal and speculative, thus not recoverable. On the issue of other damages (loss of profits, rent, wages, travel expenses): The Court found the method used by the lower court to calculate loss of profits to be fair and reasonable, based on sales records. The pro rata parts of monthly expenses for rent and wages were also deemed allowable. Regarding the two trips to Manila, the Court held that both expenses were justifiable. The first trip was a direct result of the deputies' misrepresentations, and the defendants would have been liable for this expense even if they had followed instructions received after the trip. The second trip was also necessitated by the deputies' continued wrongful actions. Therefore, these items of damages were approved.
Main Doctrine
Attorney's fees incurred in procuring the dissolution of wrongful attachments are not recoverable as damages in the Philippines, based on public policy and the reasoning of the United States Supreme Court in Oelrichs v. Spain.