Orosa v. Court of Appeals
REITERATIONFacts
The Antecedents: FCP Credit Corporation filed a complaint for replevin and damages against Jose S. Orosa to recover a 1983 Ford Laser 1.5 Sedan. Orosa purchased the vehicle on installment, executing a promissory note and a chattel mortgage in favor of Fiesta Motor Sales Corporation, which later assigned the note and mortgage to FCP Credit Corporation. FCP alleged that Orosa failed to pay installments due from July to October 1984. Procedural History: The Regional Trial Court (RTC) dismissed FCP's complaint, ruling that Orosa had paid the installments and that FCP was not entitled to the writ of replevin. The RTC awarded Orosa P400,000.00 in moral damages, P100,000.00 in exemplary damages, and P50,000.00 in attorney's fees, and ordered the return of the vehicle. A Supplemental Decision held the surety, Stronghold Insurance Co., Inc., jointly and severally liable. The surety filed a petition for certiorari, which was dismissed by the Court of Appeals (CA) and affirmed by the Supreme Court, though the writ of execution pending appeal was deleted. In a separate appeal by FCP, the CA partially affirmed the RTC decision, deleting the awards for moral, exemplary damages, and attorney's fees, and the order to return the vehicle. Instead, the CA ordered FCP to pay Orosa the value of the fourteen (14) monthly installments paid, with interest. The Petition: Orosa filed a petition for review, assailing the CA's decision for allegedly reversing a co-equal court's decision, considering causes of action not raised in the complaint, and misapplying jurisprudence. He also contested the deletion of the awards for damages and attorney's fees.
Issue(s)
Whether the Court of Appeals erred in considering issues not raised in the complaint, and whether it erred in deleting the awards for moral damages, exemplary damages, and attorney's fees. Whether the Court of Appeals erred in ordering the return of the value of installments paid instead of the vehicle itself.
Ruling
The petition is denied. The Court of Appeals' Decision dated April 19, 1993, and its Resolution dated July 22, 1993, are affirmed in toto.
Ratio Decidendi
On the issue of considering causes of action not raised in the complaint: The Court held that while FCP belatedly pointed out provisions of the promissory note regarding waiver of prior notice, late payment charges, and the acceleration clause, and the alleged violation of the chattel mortgage by assigning the car, these arguments were not raised in the original complaint. The Court of Appeals correctly applied the basic rule that matters not raised in the complaint can not be raised for the first time on appeal, as it would be offensive to the basic rule of fair play, justice, and due process. The appellate court's mention of default was merely to justify the deletion of damages, consistent with its finding that FCP acted in good faith. On the deletion of moral damages: The Court denied Orosa's claim for moral damages. It reiterated that moral damages must be the proximate result of a wrongful act or omission causing physical suffering, mental anguish, besmirched reputation, or social humiliation. Orosa's alleged embarrassment from explaining the suit to his daughter's in-laws could have been avoided had he been prompt in his payments and not assigned the car to his daughter. The Court found that FCP filed the complaint in good faith, believing it had a meritorious cause of action, and there was no proof of a sinister design to vex or humiliate Orosa. The law presumes good faith, and the burden of proving bad faith rests on the claimant. On the deletion of exemplary damages: The Court affirmed the deletion of exemplary damages, citing jurisprudence that where a party is not entitled to actual or moral damages, an award of exemplary damages is likewise baseless. Since Orosa failed to establish his entitlement to moral damages, the award for exemplary damages was consequently deleted. On the deletion of attorney's fees: The Court denied Orosa's claim for attorney's fees. It stated that not every winning party is entitled to an automatic grant of attorney's fees; the party must show they fall under the instances enumerated in Article 2208 of the Civil Code. Orosa failed to do so. Furthermore, where the awards for moral and exemplary damages are eliminated, the award for attorney's fees must also be deleted. On the order to return the vehicle or its equivalent: The Court agreed with the Court of Appeals that the RTC erred in ordering the return of the subject car or its equivalent, as Orosa had not fully paid the purchase price. Such an order would amount to unjust enrichment. The appellate court correctly ordered FCP to return only the amount equivalent to the fourteen installments actually paid, with interest, which represented the payments made by Orosa.
Main Doctrine
A party seeking to recover moral damages must prove that the wrongful act or omission was the proximate cause of the physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, or similar injury. Furthermore, the act must be wrongful, and the prosecution must not have been prompted by a sincere belief in the cause of action.