Gonzales v. Camarines Sur II Electric Cooperative
REITERATIONFacts
The Antecedents: Petitioners, the owners of a rental apartment, leased Unit No. 11-A to the Samsons, who failed to pay their electric bills for the second semester of 1992. Respondent CASURECO disconnected the power supply but restored it after the Samsons executed a promissory note. The property owners protested the restoration due to the accumulating unpaid bills. CASURECO eventually terminated the power supply when the Samsons vacated. Upon securing a new lessee, the owners reached a compromise agreement with CASURECO to restore power, requiring a deposit equivalent to two months of the Samsons' bills, which the owners paid. Power was cut again later, but restored after the owners reminded CASURECO of the agreement. The unit was then occupied by the owners' son, Rey, and his family. However, CASURECO continued to include the Samsons' past unpaid bills in subsequent statements, threatening disconnection. This pattern persisted from 1992 to 1999, despite the owners' repeated reminders of the compromise agreement to write off the old accountabilities. Procedural History: In response to CASURECO's continued inclusion of the Samsons' old accountabilities in the bills and refusal to accept payment for current consumption only, petitioners filed a complaint for consignation, mandamus, injunction, and damages before the Regional Trial Court (RTC). The RTC ruled in favor of the petitioners, declaring their consignation valid, affirming the compromise agreement, and holding them not liable for the Samsons' past unpaid bills. The RTC also awarded actual, moral, and exemplary damages, as well as attorney's fees and costs, finding that CASURECO had harassed petitioners with threats of disconnection for seven years. CASURECO appealed to the Court of Appeals (CA), which affirmed the RTC's ruling regarding the compromise agreement but deleted the awards for actual and exemplary damages, attorney's fees, and reduced the moral damages, citing lack of proof for actual damages, absence of bad faith for exemplary damages, and lack of basis for attorney's fees, and deeming the moral damages excessive. The Petition: Petitioners filed a Rule 45 Petition with the Supreme Court, seeking a review of the CA's decision. They contend that the CA erred in deleting the awards for actual damages, exemplary damages, and attorney's fees, and in reducing the award for moral damages. Petitioners argue for actual damages or, in the alternative, temperate damages, citing their expenses in repeatedly addressing the issue with CASURECO. They also assert entitlement to exemplary damages due to CASURECO's alleged bad faith in betraying the compromise agreement and threatening disconnection. Consequently, they claim attorney's fees are warranted. Finally, they seek an increase in moral damages, emphasizing the prolonged harassment and stress caused by CASURECO's actions. The core issue before the Supreme Court is whether petitioners are entitled to the damages sought, particularly in light of the CA's modifications.
Issue(s)
Whether petitioners are entitled to actual damages. Whether petitioners are entitled to temperate damages. Whether petitioners are entitled to exemplary damages. Whether petitioners are entitled to attorney's fees. Whether the award of moral damages should be increased.
Ruling
The Supreme Court modified the Court of Appeals' decision. It granted temperate damages of ₱3,000 to the petitioners. It reinstated the awards for exemplary damages, attorney's fees, and moral damages as determined by the Regional Trial Court.
Ratio Decidendi
On Actual Damages: The Court affirmed the CA's deletion of actual damages, citing the lack of receipts or other documentary proof to substantiate the claimed expenses for transportation, postage, photocopying, and printing incurred over seven years. The Court reiterated that actual damages require competent proof of pecuniary loss, with receipts being the best evidence. On Temperate Damages: The Court ruled in favor of petitioners, granting temperate damages. It acknowledged that while the claim was raised for the first time on appeal, it was closely related to assigned errors. Applying Article 2224 of the Civil Code, the Court held that temperate damages are recoverable when pecuniary loss is suffered but its amount cannot be proven with certainty. Even if the loss is capable of proof, temperate damages are not precluded and may be granted from equity to provide relief to those definitely injured. The Court found that petitioners incurred undue costs in pursuing their rights against CASURECO, justifying an award of ₱3,000. On Exemplary Damages: The Court reinstated the RTC's award of exemplary damages, disagreeing with the CA's finding of no bad faith. The Court found that CASURECO acted in bad faith by repeatedly including the Samsons' old accountabilities in petitioners' bills despite the promissory note and the compromise agreement, and by threatening and disconnecting service. These actions were deemed wanton, fraudulent, reckless, oppressive, or malevolent, warranting exemplary damages under Article 2232 of the Civil Code. On Attorney's Fees: The Court reinstated the award of attorney's fees, finding a basis in the award of exemplary damages and the finding of gross and evident bad faith on the part of CASURECO in refusing to satisfy petitioners' plainly valid claim, as provided under Article 2208 of the Civil Code. On Moral Damages: The Court affirmed the RTC's original award of ₱50,000 for moral damages, disagreeing with the CA's reduction. The Court found the RTC's award appropriate given the severe sufferings inflicted on petitioners by CASURECO's irresponsible failure to update its records for seven years despite constant reminders and the compromise agreement. The Court emphasized that CASURECO offered no valid explanation for this omission and maintained the original grant to exact better service from utility companies.
Main Doctrine
While actual damages require proof of pecuniary loss with receipts, temperate damages may be awarded when pecuniary loss is suffered but its amount cannot be proven with certainty, even if the loss is capable of proof. Exemplary damages require proof of bad faith, oppression, or malice, and attorney's fees are awarded when exemplary damages are granted or when a claim is plainly valid, just, and demandable but refused in bad faith. Moral damages are awarded for mental anguish, fright, or other forms of suffering, with the amount determined by the circumstances.