REYNALDO VILLAFUERTE AND PERLITA T. VILLAFUERTE, PETITIONERS, VS. HON. COURT OF APPEALS, EDILBERTO DE MESA AND GONZALO DALEON, RESPONDENTS.

Villafuerte versus Court of Appeals

The Case

This is a petition for review on certiorari brought by the spouses Reynaldo Villafuerte and Perlita Tan Villafuerte against the Court of Appeals, Edilberto de Mesa, and Gonzalo Daleon. The spouses operated a gasoline station on three adjoining lots in Lucena City, two of which belonged to de Mesa and to the Daleon brothers. When their leases expired and they refused to vacate, the lot owners fenced off the station in the early morning of the first of February 1990, without notice and without any court order. The spouses sued for damages. The case matters because it draws the line between a landowner's supposed right of self-help and the command of the Civil Code that one who claims a right to deprive another of possession must go to court. It is a standard examination vehicle for actual damages, moral damages, exemplary damages, and the doctrine that the law takes no account of a wrong that is not a violation of a legal right.

Procedural History

The spouses filed a complaint for damages with preliminary mandatory injunction before the Regional Trial Court of Lucena City, Branch 55, docketed as Civil Case Number 90-11. The trial court denied their application for a writ of preliminary mandatory injunction, ruling that with the expiration of the leases they had no clear and unmistakable right to remain, and it denied their motion for reconsideration. The spouses then amended their complaint to plead actual damages in the total amount of two million one hundred seventy-six thousand two hundred ninety-three pesos and forty-four centavos, plus moral damages, exemplary damages, attorney's fees, and litigation expenses. After trial, the Regional Trial Court rendered judgment in favor of the spouses, holding the lot owners jointly and severally liable for the full amount of actual damages claimed, two hundred thousand pesos in moral damages, fifty thousand pesos in exemplary damages, fifty thousand pesos in attorney's fees, and costs. Both lot owners appealed. The Court of Appeals affirmed with modification: it reduced actual damages to twenty-seven thousand pesos, deleted the moral damages and the attorney's fees, retained exemplary damages at fifty thousand pesos, and ordered the spouses to pay unpaid rentals to de Mesa and to Daleon. The spouses then came to the Supreme Court by petition for review on certiorari, raising mainly the correctness of the reduction of damages.

Facts

The spouses operated Peewee's Petron Powerhouse Service Station and General Merchandise on three adjoining lots at the corner of Gomez Street and Quezon Avenue in Lucena City. One lot was owned by several persons, among them Edilberto de Mesa. Another was owned by Gonzalo Daleon and his brother Federico Daleon. The third belonged to Anicia Yap-Tan, mother of Perlita. The lot owners acquired their lots subject to an existing lease in favor of Petrophil Corporation, which had built the gasoline station. When that lease expired at the end of December 1988, the spouses obtained from de Mesa a new lease over his lot for one year, from the first of January 1989 to the thirty-first of December 1989, at a monthly rental of four thousand pesos. As for the Daleon lot, the spouses received not a renewal but demand letters from the brothers' counsel to vacate. They ignored the demand and continued operating. In May 1989 Gonzalo Daleon filed an ejectment complaint before the barangay, and no settlement was reached. When the de Mesa lease expired at the end of December 1989, it was not renewed, yet the spouses again stayed on and continued operating despite demands to vacate.

In the early morning of the first of February 1990, de Mesa and Daleon, with the aid of several persons and without the knowledge of the spouses, closed the gasoline station by constructing fences around it. The next day, the spouses filed their complaint for damages with preliminary mandatory injunction. The lot owners admitted causing the fencing but justified it by the spouses' refusal to vacate despite demands.

The spouses later amended their complaint to itemize their losses, including unrealized income from petroleum sales, storage fees, merchandise sales, hauling, and a balloon business, as well as uncollected debts, uncollected checks, damaged merchandise, damaged office equipment, damaged religious materials, petroleum products lost in underground tanks, and interest payments to a bank. The lot owners regained possession of the premises on the twenty-fifth of January 1991, and four days later obtained a judgment by compromise in the ejectment case against Petrophil Corporation, under which Petrophil bound itself to remove the materials and equipment related to the gasoline station.

Issues

• Whether or not the Court of Appeals erred in substantially reducing the actual damages awarded by the trial court.
• Whether or not the spouses are entitled to moral damages despite the finding that they came to court with unclean hands.
• Whether or not the spouses are entitled to attorney's fees.
• Whether or not the lot owners may invoke the doctrine of self-help under Article 429 of the Civil Code to justify fencing the gasoline station.

Applicable Provisions

Article 536 of the Civil Code provides:

In no case may possession be acquired through force or intimidation as long as there is a possessor who objects thereto. He who believes that he has an action or a right to deprive another of the holding of a thing, must invoke the aid of the competent court, if the holder should refuse to deliver the thing.

This is the provision the lot owners violated when they fenced the station instead of going to court, and it is the source of their liability for the natural consequences of their illegal act.

Article 429 of the Civil Code, which the lot owners invoked, provides:

The owner or lawful possessor of a thing has the right to exclude any person from the enjoyment and disposal thereof. For this purpose, he may use such force as may be reasonably necessary to repel or prevent an actual or threatened unlawful physical invasion or usurpation of his property.

The Court of Appeals held, and the Supreme Court agreed, that this doctrine of self-help finds no application where the occupant's possession began through lawful means, as by lease, and the owner's remedy is to seek the aid of the court.

Ruling

On the first issue, the Court affirmed the reduction of actual damages. Actual or compensatory damages are awarded to compensate a party for an injury or loss suffered, and except as provided by law or stipulation, a party is entitled to adequate compensation only for such pecuniary loss as he has duly proven. The Court quoted the governing rule:

A party is entitled to an adequate compensation for such pecuniary loss actually suffered by him as he has duly proved. Such damages, to be recoverable, must not only be capable of proof, but must actually be proved with a reasonable degree of certainty.

The Court examined Perlita's testimony and found that her claims for unrealized income were repeatedly based on averages of her January 1990 sales, with no corroborative evidence, and that her summary of daily petroleum sales was self-serving. Her valuations of damaged merchandise, office equipment, and religious materials rested on her own assessment and approximation. Hence only the items sufficiently established were sustained, namely the detention of records, the detention of merchandise, the value of damaged merchandise and religious items, and the detention of office equipment, totaling twenty-seven thousand pesos.

On the second issue, the Court held that the spouses are not entitled to moral damages. Their continued occupation of the lot owners' properties without a subsisting lease meant they did not come to court with clean hands, and the case does not fall within the cases enumerated in Article 2219 of the Civil Code.

On the third issue, the Court sustained the deletion of attorney's fees, as the spouses failed to establish their entitlement to that award.

On the fourth issue, the Court held that the lot owners could not justify the fencing. Article 536 explicitly provides the proper recourse of one who claims to be entitled to possession of a thing. When the lot owners personally took it upon themselves to evict the spouses, in clear contravention of the law, they became liable for all the necessary and natural consequences of their illegal act. The Court nevertheless found them liable for exemplary damages, having taken the law into their own hands, and held the spouses liable for unpaid rentals from the expiration of the leases until the first of February 1990, when the fence was constructed.

Doctrine

First, possession may not be acquired through force or intimidation while a possessor objects; one who believes he has a right to deprive another of the holding of a thing must invoke the aid of the competent court. Second, the doctrine of self-help under Article 429 of the Civil Code applies only to repel or prevent an actual or threatened unlawful physical invasion or usurpation, and not where the occupant entered by lawful means such as a lease. Third, actual damages must be proved with a reasonable degree of certainty and cannot be presumed; a claimant's own estimates and averages, unsupported by competent evidence, will not sustain an award. Fourth, moral damages are not available where the claimant does not come to court with clean hands and the case is not among those enumerated in Article 2219 of the Civil Code. Fifth, exemplary damages may be imposed on a party who takes the law into his own hands in violation of Article 536.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals with modification, sustaining the reduced actual damages of twenty-seven thousand pesos, the exemplary damages of fifty thousand pesos, and the spouses' liability for unpaid rentals, while denying moral damages and attorney's fees.

Remember This

Memorize the line: a person who believes he has a right to deprive another of the holding of a thing must invoke the aid of the competent court, never force. Examiners use this case to test self-help under Article 429 against Article 536, and the strict proof required for actual damages.