Metropolitan Waterworks and Sewerage System v. Act Theater, Inc.
REITERATIONFacts
The Antecedents: Four employees of Act Theater, Inc. were apprehended for allegedly tampering a water meter, in violation of P.D. No. 401, as amended by B.P. Blg. 876. Consequently, Act Theater, Inc.'s water service connection was cut off by the Metropolitan Waterworks and Sewerage System (MWSS). Act Theater, Inc. filed a complaint for injunction with damages against MWSS, alleging that the disconnection was arbitrary, whimsical, and capricious, done without prior notice, and adversely affected the health and sanitation of its patrons and the surrounding premises. Procedural History: The Regional Trial Court (RTC) of Quezon City, Branch 77, in a consolidated trial, acquitted the accused in the criminal case for violation of P.D. No. 401 for failure to prove guilt beyond reasonable doubt. In the civil case, the RTC ordered MWSS to pay Act Theater, Inc. actual damages of ₱25,000.00, return the ₱200,000.00 deposited for restoration of water services, dismiss MWSS's counterclaim, pay costs of suit, and award ₱5,000.00 as attorney's fees, making the mandatory injunction permanent. The Court of Appeals (CA) affirmed the civil aspect of the RTC decision, holding that MWSS's act of cutting off the water service connection without prior notice was arbitrary, injurious, and prejudicial, justifying the award of damages under Article 19 of the Civil Code. The Petition: MWSS filed a petition for review on certiorari with the Supreme Court, questioning the CA's affirmation of the RTC decision, specifically the award of damages and attorney's fees, and arguing that the CA erred in applying Article 19 of the Civil Code without considering Article 429 thereof. MWSS also pointed out a typographical error in the CA's quoted dispositive portion regarding the attorney's fees.
Issue(s)
Whether the Court of Appeals validly affirmed the Decision of the Regional Trial Court in resolving the Petitioner's appeal. Whether the Court of Appeals validly upheld the award of attorney's fees. Whether the Court of Appeals correctly applied Article 19 of the Civil Code without considering Article 429 of the same Code.
Ruling
The petition is devoid of merit. The Decision of the Court of Appeals dated January 31, 2001 in CA-G.R. CV No. 58581 is affirmed in toto.
Ratio Decidendi
On the issue of whether the Court of Appeals validly affirmed the Decision of the Regional Trial Court: The Court affirmed the findings of the lower courts. While MWSS possessed the right to exclude others from the enjoyment of its property under Article 429 of the Civil Code, the exercise of this right is not absolute and must be tempered by the principles of justice, honesty, and good faith as mandated by Article 19 of the Civil Code. The CA correctly found that MWSS's act of cutting off Act Theater, Inc.'s water service connection was arbitrary, injurious, and prejudicial. The notice of investigation was given only a few hours before disconnection, and Act Theater, Inc.'s representative was treated badly when attempting to clarify the matter. The disconnection occurred at midnight, effectively denying Act Theater, Inc. due process and compelling it to secure alternative water sources and deposit a substantial sum for service restoration. On the issue of whether the Court of Appeals validly upheld the award of attorney's fees: The Court found the award of ₱5,000.00 as attorney's fees to be reasonable and warranted. Attorney's fees may be awarded when a party is compelled to litigate or incur expenses to protect its interest due to the unjustified act of another party. In this case, Act Theater, Inc. was forced to file a civil case and incur expenses to protect its rights and interests due to the arbitrary disconnection of its water services by MWSS. The Court clarified that the ₱500,000 mentioned in the CA's quoted dispositive portion was a typographical error, and the actual award affirmed was ₱5,000.00. On the issue of whether the Court of Appeals correctly applied Article 19 of the Civil Code without considering Article 429 of the same Code: The Court held that the CA correctly applied Article 19 of the Civil Code. Article 429 grants the owner the right to exclude others from his property, which MWSS, as the provider of water services, possessed. However, the exercise of this right must be done with justice, honesty, and good faith, as stipulated in Article 19. The arbitrary and injurious manner in which MWSS exercised its right, by disconnecting water services without adequate notice and opportunity to be heard, constituted a legal wrong for which MWSS can be held accountable. Therefore, the application of Article 19 was proper to address the manner of exercising the right granted under Article 429.
Main Doctrine
The exercise of a right, such as the right to exclude others from property, must be done in accordance with law and with justice, giving others their due, and observing honesty and good faith. An arbitrary and injurious exercise of such right, causing damage to another, can give rise to liability under Article 19 of the Civil Code.