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T HI RD D IV IS IO N

G.R. No. 174646, August 22, 2012

(ST ANFI L CO ) PH I L I PPI NE S, I NC. , PE T I T I O NE R,

VS. DO L E RE YNAL DO B . RO DRI G UE Z AND

L I B O R I O A F R I C A , R E S P O N D E N T S .

D E C I S I O N

PERALTA, J.:

As sai led i n t hi s p et it io n f or r evi ew on certiorari under Rule 45 of the Rules

of Court are the Court of Appeals (CA) Decision[1] d ated June 1, 2006 and

Resolution[2] d a t e d S e p t e m b e r 6 , 2 0 0 6 i n C A - G . R . C V N o . 5 8 6 3 2 . T h e

C A d eci si on mo di fi ed t he R egi on al T ri al C our t ( RT C)[3] Decision[4] d a t e d

S e p t e m b e r 1 3 , 1 9 9 6 i n Ci v i l Ca se N o . 9 2 - 9 6 1 , w h i l e t h e CA r e so l u t i o npartially granted the motion for reconsideration filed by petitioners Standard

( Ph il ip pi ne s) F ru it C or po ra ti on o r S ta nf ii co , a d iv is io n o f D ol e P hi li pp in es ,

Inc. (Dole), Orlando Bulaun (Bulaun), Mario Murillo (Murillo), and

Wilhelm Epelepsia (Epelepsia).

The case stemmed from the following factual and procedural antecedents:

Respondent Liborio Africa (Africa) i s t he registered owner o f a banana

plantation containing an area of 17.0829 hectares situated in General Santos

C it y, c ov er ed b y O ri gi na l C er ti fi ca te o f T it le ( OC T)[5] N o . ( V - 2 6 4 2 ) ( P -

237) P- 54 69 . On November 1, 1966, Africa entered into a Farm

Management Contract[6] (FMC) with his Farm Manager Alfonso Yuchengco

(Yuchengco) for the development, cultivation, improvement, administration,

a nd g en er al m an ag em en t o f t he a bo ve -d es cr ib ed p ro pe rt y a s a n a gr ic ul tu ra l

development project, more particularly for the purpose of planting and

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g rowi ng b anan as a nd /o r ot her cr ops and of m ar ke ti ng t he p ro du ct s an d fr ui ts

thereof.[7] The cont ract was es tabli shed for a peri od of ten (10) year s from

t he d at e o f e xe cu ti on t he re of .[8] T h e sa m e w a s l a t e r e x t e n d e d f o r a t o ta l

period of twenty-five (25) years, or up to November 1, 1991.[9]

On Octo ber 2 , 1 967, t he par ti es amen ded th e F MC by gi vi ng Yuchengco

the right to assign, convey, or transfer its rights under the contract to any

person or entity, provided due notice is given to Africa.[10] O n December 4,

1 96 7, Y uc he ng co -a ssig ne d h is r ig ht s a s f ar m m an ag er t o Che ck er ed F ar ms,

I nc . ( Ch ec ke re d F ar ms).[11]

O n J an uar y 8, 1 96 8, C heck er ed F ar ms e nt er ed i nt o a n E xc lu si ve P ur cha si ngAgreement[12] with petitioner which bound itself to purchase all the

accep tabl e ban anas th at woul d b e pr oduced by t he f orm er o n th e lot s ubj ect

of the FMC.[13] C he ck er ed F ar ms , f or i ts p ar t, u nd er to ok t o a ll ow p et it io ne r

t o i nt ro du ce i nsta ll at io ns a nd i mp ro ve me nt s o n t he l an d a nd t o d isma nt le a nd

r em ov e a ll n on -p er ma ne nt i nsta ll at io ns a nd i mp ro ve me nt s i t h as i nt ro du ce d

u po n t he e xp ir at io n of t he p er io d of t he c on tr ac t, p ro vi ded t hat p et it io ner h as

the option to leave them on the land without cos t to C heckered Farms.[14]

I t ap pea rs t ha t o ver t he y ea rs , p et it io ner i nt rod uce d on t he s ub jec t p ar cel o f

l an d sev er al i mp ro ve me nt s c on si st in g o f, a mo ng o th er s, p la nt at io n r oa ds a nd

c an al s, f oo tb ri dg es , i rr ig at io n p um ps , p ip el in es , h os es , a nd o ve rh ea d c ab le

proppings.[15] O n May 30 , 19 91, Ch ecke re d F ar ms r equ es ted[16] for a ten

(10)-year extension[17] of the contract due to expire on November 1, 1991,

but the request was not acted upon by Africa.[18]

On October 15, 1991, Africa executed a Deed of Payment by Cession and

Quitclaim[19] wh er ei n Af ri ca c ed ed a nd a ss ig ne d t he 1 7- hec tar e s ub jec t l an d

t o Rey na ld o Rod ri gu ez ( Ro dr ig ue z) a s p ay me nt a nd i n f ul l sat isfa ct io n o f t he

f or mer 's o bl ig at io n t o t he l at ter am ou nt in g t o P 3 mi ll io n. I n a l et ter [20] dated

D ec emb er 4 , 1 99 1, R od ri gue z i nt ro du ce d hi ms el f t o C he ck er ed F ar ms a s

Africa's successor-in-interest and informed it that he was taking over complete possession and absolute control of the subject land effective

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immediately without prejudice to whatever acceptable new business

a rr an ge me nt s t ha t m ay b e a gr ee d u po n. O n e ve n d at e, Rod ri gu ez m an if este d

h is i nt er es t i n p et it io ne r' s b an an a g ro we r' s p ro gr am . S in ce h e w as i nt er es te d

i n p et it io ne r' s c or po ra te g ro we r' s c on tr ac t, R od ri gu ez a ll ow ed p et it io ne r t o

a ssum e t em po ra ri ly t he c on ti nu ed o pe ra ti on a nd m an ag em en t o f t he b an an aplantation, including the harvesting and marketing of all produce pending the

a pp ro va l o f t he c on tr ac t.[21]

On December 5, 1 991, C heckered Farms asked Rodriguez that it be

a ll owe d t o o pe ra te t he b an an a p la nt at ion u nt il F eb ru ar y 1 99 2 t o f ul ly w in d u p

t he o pe ra ti on al a ct iv it ie s i n t he a re a.[22] In a letter[23] dated December 11,

1 99 1, R od ri gu ez de ni ed t he r eq ues t as h e a lr ea dy a ut ho ri ze d p et it ion er t omanage the plantation under an interim arrangement pending final resolution

of their negotiation. In the same letter, Rodriguez demanded for the

accounting of fruits harvested from the expiration of their contract.

On December 1 2, 1 99 1, Checkered Farms claimed that the plantation

produced 382 boxes of exportable fruits equivalent to P8,564.44 and

i nc ur re d e xp en se s o f P 91 ,9 73 .4 8.[24] On December 20, 1991,[25] petitionerrejected Rodriguez's proposal for the company's contract growing

a rr an ge me nt o n t h e s a me t e rm s a s C h e ck e r ed F a r ms . I ns te ad , p et it io ne r

o ff er ed to gr ant t he s ame t er ms a nd con di ti on s as t hos e gi ve n t o i nde pen den t

small growers in General Santos City. Rodriguez was also requested to

inform petitioner of his decision as there was a need to finalize the work plan

to dismantle the irrigation system and overhead cable propping system should

n o a gr ee me nt b e r ea ch ed .[26]

On J an ua ry 2, 1 99 2, R od ri gu ez ex pr es sed hi s d ou bt on C he cke red F ar ms '

accounting of the fruits harvested from the subject land as well as the

e xp en se s i nc ur red i n i ts o pe rat io ns . He , t hu s, b il le d C hec ke re d F ar ms t he

amount o f P1 ,100 ,60 0. 00 for the fruits harvested, and if no payment is

made, t o r etur n al l t he har ves t.[27]

O n J an ua ry 1 1, 1 99 2, R od ri gu ez r eq ue st ed f or r ec on si de ra ti on o f t he d en ia l

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o f h is a pp li ca ti on f or t he c om pa ny 's c on tr act g ro wi ng a rr an ge me nt a nd a sk ed

petitioner to desist from dismantling the improvements thereon.[28] A s n o

agreement was reached between petitioner and Rodriguez, the latter

d emanded f ro m th e f or mer an acco unt ing o f wh at was h ar ves ted du ri ng th e

interim period and a statement of the charges due him.[29]

In its reply,petition er stated that it was able to produce only 753 boxes of bananas

v al ue d a t P 17 ,7 36 .4 8.[30] Petitioner eventually dismantled and removed the

improvements in the plantation.[31]

On Febr uar y 10, 1992, R odr iguez s ent a l ett er to peti ti oner demandi ng t he

payment of the bananas harvested during the interim administration of

petitioner and protesting the "unwarranted and wanton destruction of thefarm."[32] Petitioner, however, refused to heed the demand. Instead, it

q ue st io ne d Rod ri gu ez 's o wn er sh ip o f t he sub je ct l an d, d en ie d t he l iq ui da te d

price support of P12 per kilo or restitution of the harvest in equivalent

v ol ume an d qu ali ty, an d den ied t he accu sati on of i ll egal de str uct ion i n th e

plantation.[33]

On April 6, 1992, respondents filed a Complaint for Recovery of Sum of M on ey a nd D am ag es[34] a ga in st p et it io ne r a nd i ts o ff ic ia ls Bul au n, M ur il lo

and Epelepsia. Respondents claimed that despite repeated demands,

petitioner and its officials refused and failed, without valid, just, reasonable or

lawful ground, to pay the amount of P107,484.00 with interest at the legal

r at e un ti l f ul l p ay men t, o r t o gi ve an ac cou nt in g o f t he en ti re h ar ve st ac tual ly

made by them during the period that it was given such interim authority to

harvest.[35] R es po nd en ts a ls o a ll eg ed t ha t p et it io ne r' s s ta ff , a ct in g u nd er t hedirect supervision of Epelepsia who has been working directly with the

instructions of Bulaun, all performing under the administrative and operational

r es ponsi bili ty of M ur il lo , s te al th il y, t re ac he ro us ly a nd r ut hl es sl y r ai de d t he

subject plantation destroying the facilities therein which makes them liable for

damages.[36] T h e se a c t s, w h i c h a r e c o n t r a r y t o m o r a l s, g o o d c u st o m s o r

public policy, allegedly made petitioner liable for damages.[37] Respondents

also demanded indemnity for damages suffered from petitioner's act of d ep ri vi ng t he f or me r f ro m u si ng t he w at er f ac il it ie s i nsta ll ed i n t he p la nt at io n

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t hat r es ul ted i n t he s po il ag e of r es pon den ts ' p lan ts .[38] Respondent likewise

a cc us ed p et it io ne r o f k no wi ng ly a nd f ra ud ul en tl y o pe ra ti ng a nd h ar ve st in g

within respondents' premises, making it liable for damages.[39] Lastly,

respondents prayed for the payment of moral, exemplary and nominal

damages plus litigation expenses.[40]

I n t he ir A nswe r w it h Com pu lsor y Cou nt er cl ai ms,[41] p e ti ti on er a dm it te d i ts

c on tr ac tu al r el at io ns hi p w it h A fr ic a b ut a ll eg ed t ha t R od ri gu ez d up ed a nd

fraudulently misled p et it io ne r i nt o b el ie vi ng t ha t h e w a s t h e o w n e r o f t he

s ubj ect pl antat ion wher e in f act i t was owned by Afr ica.[42] Petitioner alleged

that he was t he owner of the ir rigation sys tem on t he subject pl antation. Thus ,

it has the right to remove them after the expiration of its contract withAfrica.[43] It added that the removal of the irrigation system from the subject

plantation was a valid exercise of its rights as owner of the irrigation system

and an exercise of the right to dismantle and remove the same under the

Exclusive Purchasing Agreement with Checkered Farms. It denied

r espo nd en ts' a cc usat io n t ha t t he d isma nt li ng t oo k p la ce a t n ig ht ti me a nd w it h

the aid of armed men. Petitioner also denied causing the destruction of

standing crops or the canals.[44] I n i ts c ou nt er cl ai m, p et it i on er d em an de df ro m r es po nd en ts t he p ay me nt o f P 58 ,5 62 .1 1 r ep re se nt in g t he e xp en se s i t

i nc ur re d d ur in g t he i nt er im m an ag em en t o f t he p la nt at io n a ft er d ed uc ti ng t he

f ar m r ev en ue . P et it io ne r al so p ra ye d f or t he p ay men t o f m or al a nd e xe mp lar y

damages plus attorney's fees.[45]

On September 13, 1 996, the RTC rendered a Decision[46] in favor of

respondents and against petitioner, the dispositive portion of which reads:

WHEREFORE, in view of all the foregoing, judgment is hereby

r en de red i n f avo r of t he p lai nt if fs an d a ga ins t d ef end an t c or po rat io n

ordering the latter to pay to the former the sum of P17,786.48,

r ep re se nt in g t he v al ue o f t he b an an a f ru it s h ar ve st ed d ur in g t he i nt er im

a rr an gem ent ; t he amou nt o f P5 00, 000 .00 f or t he des tr uct io n of thebanana plants and for the rehabilitation of the plantation; the sum of

P 50 ,0 00 .0 0 a s l it ig at io n e xp en se s a nd P 50 ,0 00 .0 0 a s a tt or ne y' s f ee s,

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and the costs of suit.

The complaint, as against defendants Orlando Bulaun, Wilhelm

Epelepsia and Mario Murillo, is hereby Dismissed.

Defendant's counterclaim is DENIED. SO ORDERED.[47]

Wi th the admis sion of petit ioner that it harvest ed 753 boxes of banana fr uits

v al ue d a t P 17 ,7 86. 00 f ro m t he s ub jec t pl an tat io n b ut wer e no t t ur ne d o ver t o

r es pon de nt s, t he t ri al c ou rt f ou nd t he l at ter en ti tl ed t o s aid a mo un t a s o wn er s

of the property.

[48]

The trial court further found respondents entitled toP 5 0 0 ,0 00 .0 0 a c tu a l d a ma g e s f or t h e d e st r o y e d ba n a n a p l a n t s c a use d b y

petitioner when it exercised its right to remove the improvements it

introduced on the plantation.[49] T he R TC , h ow ev er , f ou nd t ha t r es po nd en ts

do not have the right to use the improvements owned by petitioner. Thus,

w he n p et it io ne r r em ov ed sai d i mp ro ve me nt s, r espo nd en ts c an no t i nsist t ha t

t hey be awar ded damages for t he deprivati on of t he use thereof. Neit her can

they insist that petitioner leave said improvements on the subjectplantation.[50] The trial court also did not award res pondents ' claim for the

value of the crops harvested on the two-hectare property of respondents

adjoining the Aparente property, because such portion was believed to

belong to the Aparente family.[51] Respondents' prayer for moral, exemplary

a nd no mi nal da mag es wer e d en ied bec aus e p et it io ne r di d n ot a ct i n bad f ai th

but only exercised its right to dismantle the improvements in accordance with

the terms of the Exclusive Purchasing Agreement.

[52]

In view of thed estr uc ti on o f t he p la nt at io n a nd r espo nd en ts' e ff or ts t o p ro te ct t he ir i nt er est,

t he R TC a war ded P 50 ,00 0. 00 l it igat io n exp en ses and t he s ame amo un t as

a tt or ney 's fees.[53] The trial court further absolved Bulaun, Murillo and

E pe le ps ia f ro m l ia bi li ty a nd m ad e p et it io ne r s ol el y l ia bl e. A s t o p et it io ne r' s

co un te rc la im , t he c our t f ound no r eas on t o a war d t he s ame as r es pond ent s1

acts were not meant to harass them but were undertaken to protect their

interest.

[54]

P et it io ne r a nd r es po nd en ts i nt er po sed s ep ar at e a pp ea ls . On J un e 1 , 2 00 6,

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t he C A m odi fi ed th e RT C decis ion. T he di sp os it iv e por ti on of t he decis ion i s

q uo te d b el ow f or e asy r ef er en ce :

WHEREFORE, in the light of the foregoing premises, the decision

s ubject of this appeal is her eby MODIFIED. T he d ef en d a nt -a pp el la nt

S TA NF IL CO i s h er eb y o rd er ed t o p ay p la in ti ff -a pp el la nt R od ri gu ez

the following amounts:

(a) P200,000.00 as temperate damages for the banana plants

that were felled and for the damage done on the ground;

(b) P50, 000 by way of moral damages;( c) P 50, 00 0 b y w ay of e xem pl ar y d am age s;

( d) P 50 ,0 00 b y w ay o f l it ig at io n e xp en se s;

( e) P 50, 000 b y way of a tt or ney 's f ees .

S O O RD ERED .[55]

The CA fi rst settled the legal s tanding of Africa and R odriguez t o institute the

action before the lower court. As registered owner of the property, the

a pp el la te c ou rt co ns id er ed Af ri ca an indispensable p ar ty . A s ass ignee of

Africa, the CA likew'ise upheld Rodriguez's legal standing. Contrary to

petitioner's protestation, the CA considered petitioner estopped from

impugning the equitable o wn er sh ip o f R od ri gu ez o f t he s ubject plantation

considering that it was Rodriguez who gave petitioner the authority to

supervise and operate the plantation awaiting the results of Rodriguez's

application for corporate grower's contract with petitioner.[56]

T he C A aff ir med the R TC' s concl usi on t hat duri ng t he i nteri m per iod when it

w as g iv en t he a ut ho ri ty t o o pe ra te t he p la nt at io n, p et it io ne r h ar ve st ed 7 53

boxes of bananas valued at P17,786.48. However, during the same period,

petitioner incurred expenses of P76,348.57. Thus, respondents still owe

petitioner P58,562.11.[57] As to the nature of the facilities and

i mp ro ve me nt s i nsta ll ed b y p et it io ne r, t he a pp el la te c ou rt r ef used t o c on si de r

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them immovable as they were installed not by the owner but by a tenant.

P ur su an t, t he re fo re , t o t he E xc lu si ve P ur ch as in g A gr ee me nt , t he a pp el la te

court upheld petitioner's right to dismantle the facilities and improvements.[58]

M o r e o v e r , t h e CA e c h o e d t h e RT C c o n c l u si o n t h a t r e sp o n d e n t s a r e n o t

e nt it le d t o t he c r op s h ar ve st ed f ro m t he t wo -h ec ta re p r op er ty b el ie ve d t obelong to the Aparente family as they were indeed cultivated for the benefit

of said fami ly and not for respondents.[59] T he co ur t f ur th er s us tai ned t he

RTC's c on cl usio n t o e xe mp t p et it io ne rs' o ff ic er s f ro m l ia bi li ty a s t he y m er el y

f ol lo we d t he o rd er s o f t he ir sup er io rs.[60] While sustaining respondents' claim

f or t he d am ag es susta in ed w he n p et it io ne r e xe rci se d i ts r ig ht t o d isma nt le t he

improvements and facilities introduced on the subject plantation, the appellate

court deemed it proper to reduce the amount awarded by the RTC fromP 50 0, 00 0. 00 t o P 20 0, 00 0. 00 a s temperate damages.[61] In addition to

l it ig at io n e xp en se s a nd a tt or ne y' s f ee s, t he C A a wa rd ed P 50 ,0 00 .0 0 m or al

damages and P 50 ,0 00 .0 0 exemplary damages.[62] The appellate court

further modified the decision in a Resolution dated September 6, 2006 by

i nc lu di ng t he sta te me nt t hat t he sum o f P 58 ,5 62 .1 1 r ep re sen ti ng t he e xp en se s

incurred during the interim p er io d b e deducted from the award gi ven to

respondents.[63]

A ggr iev ed , p et it io ne r c om es b ef or e t he C ou rt i n t hi s p et it io n f or r ev ie w o n

certiorari with the following assigned errors:

T H E CO U RT O F A P P E A L S E RRE D I N N O T A P P L Y I N G

THE LEGAL PRINCIPLE O F DAMNUM ABSQUEINJURIA TO RENDER JUDGMENT REVERSING AND

SETTING ASIDE THE DECISION O F THE LOWER

C O U R T A N D D I S M IS S I N G T H E C O MP L AI N T B E LO W ,

C ONS IDER ING THAT I T FOUND THE R EM OVAL AND

DI SM ANT LI NG O F T H E D OL E I NS TA LL AT IO NS AND

I M P RO V E M E N T S T O BE I N M E RE D I S CH A RG E O F A

CONTRACTUAL RIGHT.

I.

THE COURT O F APPEALS ERRED I N AWARDINGII.

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TEMPERATE, MORAL AND EXEMPLARY DAMAGES

AND, AS WELL, ATTORNEY'S FEES TO THE

RESPONDENTS, THERE BEING N O FACTUAL AND

LEGAL BASES THEREFOR, AS THE CONCL USI ON

THAT THE AFRICA FARM WAS DESTROYED ONACCOUNT O F PETITIONER STANFILCO DOLE'S

A LL EGE D L AC K O F P RE CAU TI ON I N R EM OV ING A ND

DISMANTLING THE INSTALLATIONS AND/OR

I MP ROV EM ENT S I NT RO DU CE D O N T HE S AI D F AR M:

A. IS IN FACT CONTRARY TO FACTUALF IN DI NG S B Y T HE C OUR T OF A PPE AL S;

B . H AS N OT B EE N S UF FI CI EN TL Y E ST AB LI SH ED

BY SUBSTANTIAL, DIRECT AND POSITIVE

EVIDENCE; AND

C . I S ALSO CONTRARY TO THE ESTABLISHEDEVIDENCE.

III. THE COURT O F APPEALS ERRED IN NOT

GRANTING PETITIONER STANFILCO DOLE'S

COUNTERCLAIMS, IT BEING ESTABLISHED THAT

R ES PO ND EN TS A CT ED T O W AR D S I T I N A M AN NE R

W IT H M AL IC E A FOR ET HOU GH T A ND A TT EN DE D B Y

BAD FAITH.[64]

Peti tioner s ubmi ts t hat the CA er red i n f ai ling to recogni ze that the cas e at bar

i s a c l e a r c a se o f d a m n u m a b sq u e i n j u ri a , warranting the reversal of the

R TC 's dec is ion an d t he d is mi ss al of t he co mp lai nt b el ow .[65] Petitioner adds

that there are no factual and legal bases for t he grant of temper ate, moral,and exemplary damages.[66] It explains that the resulting injury to

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r espo nd en ts a ri si ng f ro m t he r em ov al a nd d isma nt li ng o f i mp ro ve me nt s t ha t

petitioner undertook pursuant to the provisions of the Exclusive Purchasing

A gr ee me nt wi th C he ck er ed F ar ms i s damnum absque injuria.[67] I t p oi nt s

o ut t ha t i t r em ov ed o nl y t he r em ov ab le irrigation facilities refraining from

ex erc is ing s aid leg al ri gh t wi th r es pect t o t he d rai na ge cana ls , t he r oads andthe overhead proppings which covered the entire length of the farm.[68]

Petitioner also claims that the CA was uncertain as to the proximate cause of

the alleged destruction resulting in damages to respondents. Thus, the

appellate court allegedly erred in charging petitioner with acting wrongfully,

wantonly, and in bad faith against respondents warranting the award of

temperate, moral, and exemplary damages.[69] Lastly, petitioner asserts that

t he l owe r c our t er red i n n ot aw ar di ng i ts c ou nt er cl ai ms i t b ei ng es tab li she dt hat res pon dent s f iled t he compl ai nt bel ow wit h mal ice and at tended by b ad

faith.[70]

The petition is without merit.

S tat ed i n s impl e t er ms , th e pr inc ipal qu es ti on s f or r esolution ar e whether

petitioner is liable to respondents for damages and if so, the amount of suchliability.

At the outset, we would like to specify the claims made by respondents

against petitioner brought about by the contractual relations previously

entered into by the parties. First, the payment of the value of the bananas

harvested by petitioner when it was given the authority to temporarily manage

t he pl antati on; s econd, p ayment o f the value of t he ban anas harves ted in t het wo -h ec ta re p ro pe rt y a dj oi ni ng t he A pa re nt e p ro pe rt y; t hi rd , i nd em ni ty f or

damages caused t o t he plantation in the cours e of r emoving the i rri gati on

f ac il it ie s o wn ed b y p et it io ne r; f ou rt h, i nd em ni ty f or d am ag es b ro ug ht a bo ut

by the deprivation of petitioner's right to use the irrigation facilities in

ques tion; and fifth, the payment of moral, exemplary a nd ot he r f or ms of

d am ag es . T he C A c or re ct ly d en ie d r es po nd en ts ' s ec on d a nd f ou rt h c la im s

and aptly granted (with qualification) respondents' first, third and fifth claims.

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As to the value of the bananas harvested during petitioner's interim

management of the plantation, we find no reason to disturb the RTC and

C A' s f in di ng s t ha t i nd eed , r es po nde nt s ar e en ti tl ed t o s ai d c la im. H owe ve r,

as pet it ion er i ncu rr ed exp ens es , t he co rr es po nd in g v al ue s ho ul d i n t ur n be

d ed uc te d f ro m t he t ot al h ar ve st s m ad e. T hu s, w hi le r es po nd en ts a re e nt it le dt o t he val ue of 75 3 bo xes o f ban anas a moun tin g t o P 17 ,786 .48 , t hey cann ot

be given said amount as petitioner's total expenses of P91,973.48 should be

d ed uc te d. C on se qu en tl y, r es po nd en ts , n ot p et it io ne rs , a re i nd eb te d t o t he

latter in the total amount of P58,562.11 as reflected in the CA's assailed

resolution modifying its earlier assailed decision.

As to t he bananas har ves ted on t he p ort ion whi ch was mis takenly bel ieved t obelong to the Aparente family but eventually adjudged in favor of

respondents, petitioner cannot be m ad e t o a nswer for the value thereof

consi deri ng that the proceeds i nured not to its benef it but to t he Aparente

family.

Now on the damages resulting from the dismantling and removal of the

facilities and improvements introduced by petitioner on the subject plantation,we find a cogent reason to sustain the CA's conclusions on respondents'

e nt it le me nt t o s uc h c la im s b ut f in d s uf fi ci en t g ro un d t o m od if y t he a mo un ts

a wa rd ed . I t i s s et tl ed t ha t p et it io ner wa s g iv en t he r igh t t o d is ma nt le the

i mp ro ve me nt s i nt ro du ce d o n t he sub je ct p la nt at io n a s c le ar ly p ro vi de d f or i n

i ts c on tr ac t w it h Che ck er ed F ar ms, t hu s:

The PLANTER [Checkered Farms] shall, among other things,

undertake and perform the following:

xxxx

f . A ll ow t he COM PAN Y [ pet it io ner ] t o d isman tl e an d r em ov e a ll

non-permanent installations and improvements it has introduced

on the land upon the expiration of the period of this Agreement

provided, that [petitioner] at its option may leave them on the

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l an d, w it ho ut c ost t o [ Ch ec ke re d F ar ms].[71]

On t he basi s of t he a bo ve contractual provision, petitioner insists that it

c an no t be he ld l iab le f or d am ag es ' a ll ege dl y s uf fe re d b y r es po nd en ts b as ed

o n t he pr in ci pl e o f d a m nu m a b sq ue i n j uri a .

We do not agree.

U nd er t he p ri nc ip le o f damnum absque injuria , the legitimate exercis e of a

person's rights, even if it causes loss to another, does not automatically result

in an actionable injury. The law does not prescribe a remedy for the loss.

This pr inci ple, however, does not apply when ther e is an abuse of a pers on's

right as in this case.[72] W hi le we r ecog ni ze p et it ion er 's r igh t t o r emo ve t he

i mp ro ve me nt s o n t he s ub je ct p la nt at io n, i t, h ow ev er , e xe rc is ed such right

arbitrarily, unjustly and excessively resulting in damage to respondents'

plantation. The exercise of a right, though legal by itself, must nonetheless be

i n accor dan ce wit h t he pr op er n orm . When th e ri ght i s exer cis ed a rbi trar ily ,

unjust ly or excess ivel y and results in damage to another , a legal wrong is

c omm it ted f or wh ic h t he w ro ng do er mu st b e h el d r espo nsib le .[73]

As aptly expl ai ned by t he C our t in GF Equity, Inc. v. Valenzona[74] -

The exercise of a right ends when the right disappears, and it

d is ap pea rs w hen i t i s a bu se d, es pe ci al ly t o t he p re ju di ce of o th er s. T hemask of a right without the spirit of justice which gives it life is

repugnant to the modern concept of social law. It cannot be said that a

person exercises a right when he unnecessarily prejudices another or

o ff en ds m or al s o r g oo d cu st oms . O ver a nd a bo ve t he s pe ci fi c p re cep ts

of positive law are the supreme norms of justice which the law

d ev el op s an d w hi ch ar e e xp re ss ed i n t hr ee p ri nc ip le s: honeste vivere,

a l t e r u m n o n l a e d e r e an d j u s s u u m q u i q u e t r i b u e r e ; a n d h e w h oviolates them viol ates the law. For this r eason, it is not permiss ible to

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a bu se o ur r ig ht s t o p re ju di ce o th er s.[75]

In the sphere of our law on human relations, the victim of a wrongful act or

omission, whether done willfully or negligently, is not left without any remedy

or recourse to obtain relief for the damage or injury he sustained.

Incorporated into. our civil law are not only principles of equity but also

u ni ver sal mo ra l p re ce pt s wh ich a re d es ig ne d t o i nd ic at e c er ta in n or ms t hat

spring from the fountain of good conscience and which are meant to serve as

guides for human conduct.[76]

Abus e of ri ght under Ar ti cl e 19 of the New Ci vil Code pr ovides :

Art. 19. Every person must, in the exercise of his rights and in the

performance of his duties, act with justice, give everyone his due, and

o bser ve h on esty a nd g oo d f ai th .

The above provis ion s ets the s tandards which may be observed not only in

the exercise of one's rights but als o in the performance of one's duties. Whena right is exercised in a manner which does not conform with the norms

enshrined in Article 19 and results in damage to another, a legal wrong is

t her eb y co mmi tt ed f or wh ich t he wr ong doer mu st b e h el d r es po ns ib le.[77]

O ne is n ot al lo we d t o e xe rc i se hi s ri g ht i n a m an ne r w hi ch w ou ld c au se

unneces sary prejudice t o another or if he would thereby off end morals or

good cus toms. Thus, a pers on s hould be protected only when he acts in the

l eg iti mate ex er cis e o f his ri ght, that is when he act s wit h prudence and g oodfaith; but not when he acts with negligence or abuse.[78] The exercise of a

r ight mus t be i n accor dan ce wit h t he pu rp os e f or whic h it was es tabl is hed ,

and must not be excessive or unduly harsh; there must be no intention to

injure another.[79]

In this case, evidence presented by respondents shows that as a result of the

di ggi ngs made by pet it ioner in or der t o remov e t he pipes , banana plant s wer eup root ed. Some of thes e plant s in f act had f rui ts yet to be har ves ted caus ing

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l os s t o respondents. After the removal of s ai d pipes, petitioner failed to

restore the plantation to its original condition by its failure to cover the

diggings with soil. As found by the CA, the Damage Report submitted by

A ng el F lo re s sta te d t ha t t he re w as g ro un d d estr uc ti on b ec au se d ig gi ng s w er e

done indiscriminately w it ho ut c on ce rn f or t he s ta nd in g b an an a p lan ts . Heeven added that the destruction of the ground was extensive.[80] The

w it ne ss es f or p et it io ne r l ik ew is e a dm it te d t hat t he y h ad t he r es po ns ib il it y t o

cover the diggings made but failed to do so after the pipelines had been

r et ri ev ed . W it ne ss es a nd p ic tu re s a ls o s ho we d t ha t i nd ee d, b an an a p la nt s

w er e u pr oo te d a nd sca tt er ed a ro un d t he p la nt at io n.[81]

It is noteworthy that petitioner was given the right to remove only theimprovements and facilities that were "non-permanent" instead of giving it the

u nq ua li fi ed r ig ht t o r em ov e e ve ry th in g t ha t i t i nt ro du ce d t o t he p la nt at io n.

Though not specifically stated in the contract, the reason for said qualification

o n p et it ion er 's r ig ht o f r em ov al i s t he i mp er at iv e n eed t o p ro te ct t he p la nt at io n

f ro m unneces sary des truct ion that may be caus ed by t he exerci se o f t he ri ght .

If permanent structures were allowed to be removed, damage to the

plantation would not be avoided. This qualified right should have givenpetitioner the necessary warning to exercise its right with caution with due

r eg ar d t o t he o th er str uc tu re s i n t he p la nt at io n a nd m ost e sp ec ial ly t he b an an a

plants and fruits therein. If petitioner was able to consider cutting the pipes

underneath t he r oads within the plant ation s o as not to des troy s aid r oads,

why did it not take into consideration the banana plants and fruits that would

be destroyed by reason thereof? Petitioner would not have been unduly

prejudiced had it waited for the bananas to be harvested before removing thepipes. Clearly, petitioner abused its right.

While Article 19 lays down a rule of conduct for the government of human

relations a nd f or the maintenance of social order, i t d oe s not provide a

r em ed y f or i ts v io la ti on .[82] C om pl em en ti ng t he p ri nc ip le o f a bu se o f r ig ht s

are the provisions of Articles 20 and 21 of the Civil Code which read:

A rt icl e 20 . E ver y p er so n wh o, c on tr ar y t o l aw, w il lf ul ly or n eg li ge nt ly

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c au ses d am age t o an ot her , shal l i nd em ni fy t he l at ter f or t he same .

Ar ti cle 2 1. An y per so n who wil lf ul ly cau ses l os s or i nj ur y to ano ther i n

a manner that is contrary to morals, good customs, or public policy

sha ll c om pe nsat e t he l at te r f or t he d am ag e.

The foregoing r ules provide the legal bedrock f or the award of damages to a

party who suffers damage whenever one commits an act in violation of some

l eg al p rov is ion , o r an ac t whi ch t hou gh no t co ns ti tu ti ng a t ran sgr es si on o f

positive law, nevertheless violates certain rudimentary rights of the party

aggrieved.

[83]

Art icle 20 per tai ns t o damag es ar is ing f rom a vi olati on of lawwhi ch d oes not obtai n here[84] as pe ti ti on er was per fe ct ly wi thi n it s r ig ht t o

r em ov e t he i mp ro ve me nt s i nt ro du ce d i n t he sub je ct p la nt at io n. A rt ic le 2 1, o n

the other hand, refers to acts contra bonus mores .[85] The act is within the

article only when it is done willfully. The act i s willful if it is done with

knowledge of its injurious effect; it is not required that the a ct b e done

purposely to produce the injury.[86] U n do ub te dl y, p et it io ne r r em ov ed t he

pipes with knowledge of its injurious effect which is the destruction of thebanana plants and fruits; and failed to cover the diggings which caused

ground destruction. Petitioner should, therefore, be liable for damages.

F o r th e da m a ge s s us t a i n ed b y r e a s on o f t h e u pr oo te d a nd f el l ed b an an a

plants, the RTC awarded respondents P500,000.00. The CA, however,

r edu ce d t he am oun t t o P 200 ,0 00 .0 0. U nd er Ar ti cl e 2 22 4 o f t he C ivi l C od e,

temperate or moderate damages are more than nominal but less thancompensatory[87] which are given in the absence of competent proof on the

actual damages suffered.[88] In view of the CA observations which we will

quote below, we deem it proper to further reduce the above amount to

P 10 0,00 0.00 a s t em pe ra te d am ag es:

T he a bo ve o bs er va ti on n ot wi th st an di ng, W e ar e no t ab ou t t o s us tai n t o

its full extent the award given by the court a q u o . Frankly, We are of

t he impres sion t hat the gr ant of P50 0,00 0 cal ls for t he temperi ng hand

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o f t hi s C ou rt , e spec ial ly s ince t he pi ct ur es s ho w t ha t wh il e t he re wer e

felled banana plants, a greater number were still left standing and

unharmed. Obviously, the number of felled plants as shown in the

picture was very minimal, missing the claimed number of 8,500 by quite

a long shot.

A lso i n t he t esti mo ny o f p la in ti ff -a pp el la nt Rod ri gu ez , h e a dm it te d t ha t

he cannot say for sure whether the felled banana plants as shown in the

pictures were those that were harvested.

x x x x

Thus, while it is poss ible that the banana plants shown in the pictures

wer e f el led when t he i rri gat ion p ip es were r emo ved, W e cann ot als o

discount the possibility that some of the fallen plants shown in the

pictures fell even earlier during the occasion of the recent harvest that

was conducted on the farm on the third week of January 1992, or a

week before the dismantling operations began.

Suffice it to say that no solid evidence exists that could sustain the

8 ,5 00 b an an a p la nt s al leg ed t o h av e b een d am ag ed . P er ha ps , t hi s hu ge

number could be attributed to the fact that around the time that the said

damage report was prepared (February 10, 1992 or almost a week

a ft er r emo va l o f t he i rr ig at io n f aci li ti es b eg an ), m an y o f t he p la nt s w er e

a lr eady wi lt ing d u e t o t h e v e r y d r y w e a t h er i n t h e a r e a w h i ch w a s

f ur ther aggravated by the absence of i rrigation, x x x

But then again, it is not for this Court to define exactly how many plants

were felled in the process of removing the pipes. For this reason, We

are poi sed t o grant temperate damages in the amount of Two Hundred

T h ou sa nd ( P 20 0,0 00 .00 ) p eso s.[89]

Under Article 2219 of the New Civil Code, moral damages may be

r eco ver ed, amo ng o th er s, in act s and acti on s r efe rr ed to in Art icl e 21.[90]

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M or al d am ag es m ay b e a wa r de d i n c as e s r ef er re d t o i n t he c ha pt er on

human r elations of the C ivil C ode without need of proof t hat the wrongful act

complained of had caused any physical injury upon the complainant.[91]

Anent the award of exemplary damages, Article 2229 allows it by way of

e xam pl e o r c or re ct ion f or t he pu bl ic g oo d.[92]

E xem pl ar y d am ag es ar e a nantidote so that the poison of wickedness may not run through the body

politic.[93] On t he m at ter o f a tt or ne y' s f ees a nd l it iga ti on e xpe ns es , A rt ic le

2208 of the same Code provides, among others, that attorney's fees and

e xp en se s o f l it iga ti on s ho ul d be r ec ove red , a s i n t hi s ca se .[94] We , t he re fo re ,

s us tain the awar ds made by t he CA.

One fi nal note. The r es ponsibil ity ar is ing f rom abuse of r ights has a mixedchar acter becaus e it imp li es a r econci li ati on bet ween an act, whi ch is t he

result o f a n individual juridical will, a n d t h e s ocial f uncti on of right. The

exer cis e of a r ig ht, which i s recogni zed by s ome s pecif ic pr ovis ion of law,

may nev ert he les s b e con tr ar y t o l aw i n t he gener al and mor e ab str act s ens e.

The theory is simply a step in the proces s of tempering law with equity.

WHEREFORE, p re mi se s c on si de re d, t he p et it io n i s DENIED. The Courtof Appeal s Decis ion dat ed J un e 1, 2006 and R es olu ti on dat ed S ept ember 6 ,

2006 in CA-G.R. CV N o. 58632, are AFFIRMED with

MODIFICATION by reducing the temperate damages from P200,000.00

t o P 1 00 , 00 0 .0 0.

SO ORDERED.

V e l a sc o , J r., ( Ch a i rp e rso n ) , A b a d , M e n d o za , a n d Perlas-Bernabe, JJ.,

concur.

[1] Penned by Associate Justice Bienvenido. L. Reyes, with Associate

J us ti ce s J os e C . R ey es , J r. a nd M ar if io r P . P un za ia n- Ca st il lo , c on cu rr in g;rollo, pp. 108-144.

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[2] Rollo, pp. 146-149.

[3] B ra nc h 1 34 , C it y o f M ak at i.

[4] P en ned b y Ac ti ng P re si di ng J ud ge P au l T . A rc an gel ; r ec or ds , p p. 10 46 -

1056.

[5] Rollo,p. 109.

[6] R ec or ds , p p. 5 08 -5 12 .

[7] Id. at 508.

[8] Id. at 510.

[9] Id. at 518-519. ,

[10] Id. at 522.

[11] Rollo, p. 109.

[12] R ec or ds , p p. 5 27 -5 42 .

[13] Id. at 528,

[14] Id. at 533-534.

[15] Id. a t 1 04 9.

[16] Embodied in a letter dated May 30, 1991, id. at 580-581

[17] R ec or ds , p . 5 83 .

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[18] Id. at 1049,

[19] Id. at 363-364.

[20]

Id. at 547.

[21] Id. at 366-367.

[22] Id. at 936.

[23] Id. at 937.

[24] W.at 938-939.

[25] M a t 9 43 -9 44 .

[26] Rollo, pp. 111-112.

[27] R ec or ds , p p. 9 47 -9 49 .

[28] Id. at 945-946.

[29] Rollo, p. 112.

[30] Id. at 112.

[31] Id. at 113.

[32] Id. at 114.

[33] Id.

[34] R e co rd s, p p. 1 -2 0.

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[35] Id. at 6-7.

[36] Id. at 7.

[37]

Id. at 12.

[38] Id. at 13.

[39] Id. at 14-16.

[40] Id. at 16-17.

[41] Id. at 52-71.

[42] Id. at 56.

[43] Id. at 59.

[44] Id. at 68.

[45] Id. at 68-70.

[46] P enn ed b y Act ing P res idi ng J ud ge P au l T . Ar can ge l; i d. at 1 04 6- 10 56 .

[47] R ec or ds , p . 1 05 6.

[48] Id. at 1054.

[49] Id.

[50] Id. a t 1 05 5.

[51] Id.

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[52] Id.

[53] Id. at 1055-1056.

[54]

Id. at 1056.

[55] Rollo, p. 143.

[56] Id. at 120-121.

[57] Id. at 125.

[58] Id. at 132-133.

[59] Id. at 136.

[60] Id. at 133.

[61] Id. at 141-142.

[62] Id. at 142-143.

[63] Id. at 146-149.

[64] Rollo, p. 11.

[65] Id. at 72.

[66] Id. at 74.

[67] Id.

[68] Id. at 80.

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[69] Id. at 89.

[70] Id. at 94.

[71]

R ec or ds , p p. 9 4- 95 .

[72] Amonoy v. Spouses Gutierrez, 4 04 P hi l. 5 86 ,5 89 ( 20 01 ).

[73] Ce b u Co u n t ry Cl u b , I n c . v . E l i za g a q u e , G.R. No. 160273, January

18, 2008, 542 SCRA 65, 74-75.

[74] G.R. No. 156841, June 30, 2005, 462 SCRA 466.

[72] Amonoy v. Spouses Gutierrez, 4 04 P hi l. 5 86 ,5 89 ( 20 01 ).

[73] Ce b u Co u n t ry Cl u b , I n c . v . E l i za g a q u e , G.R. No. 160273, January

18, 2008, 542 SCRA 65, 74-75.

[74] G.R. No. 156841, June 30, 2005, 462 SCRA 466.

[75] G F E q u i t y , I n c . v . V a l e n zo n a , su p ra , a t 4 78 -4 79 , c it in g De Guzman

v . N at io na l L ab or R el at io ns C om mi ss io n, G.R. N o. 90 85 6, July 2 3,

1992, 211 SCRA 723.

[76] Carpio v. Valmonte, 481 Phi l. 352, 361 (2 004).

[77] Heir s ofP uri sima Nala v. Caba nsa g, G . R . N o . 1 6 1 1 8 8 , J u n e 1 3 ,

2 0 0 8 , 5 5 4 S C R A 4 3 7 , 4 4 2 ; C e b u C o u n t r y C l u b , I n c . v . E l i z a g a q u e ,

supra note 73, at 73. *

[78] Carpio v. Valmonte, supra note 76, at 362. S**~Pr

[79] Heirs of Purisima Nala v. Cabansag, supra not e 77, at 442-443.

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[80] R ec or ds , p p. 4 16 -4 17 .

[81] Rollo, pp. 38-42.

[82]

Cebu Country Club, Inc. v. EHzagaque, supra note 73, at 73.

[83] Carpio v. Valmonte, supra note 76, at 362-363.

[84] Nik ko Hote l Mani la Gard en v. Reye s , G .R. N o . 1 5 4 2 5 9 , F e b r u a r y

28 , 2005 ,452 S CRA 5 32, 547 .

[85] Id.

[86] Tolentino, Commentaries and Jurisprudence on the Civil Code of the

hilippines, Vol. I, p. 68.

[87] Wuerth Philippines, Inc. v . Rodante Ynson, G.R. N o. 175932,

F eb ru ar y 1 5, 2 01 2.

[88] Orix Metro Leasing and Finance Corporation (Formerly

Consolidated Orix Leasing and Finance Corporation) v . Minors:

e n n i s , M y l e n e , M e l a n i e a n d M a r i k r i s , a l l s u r n a m e d M a n g a l i n a o Y

i zo n , M a n u e l M . O n g , L o re t o L u c i l o , S o n n y L i , a n d A n t o n i o d el os

Santos, G. R. No. 17 408 9, J anu ar y 25, 20 12 .

[89] Rollo, pp. 141-142.

[90] C ebu C ou nt ry C lub , I nc . v. El iz ag aq ue, s up ra note 73, at 75.

[91] De Guzman v. National Labor Relations Commission, supra no te 7 5,

at 732.

[92] C ebu C ou nt ry C lub , I nc . v. El iz ag aq ue, s up ra note 73, at 75.

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