ROBERTO BARBASA, PETITIONER, VS. HON. ARTEMIO G. TUQUERO, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF JUSTICE, GRACE GUARIN, NESTOR SANGALANG, VICTOR CALLUENG, RESPONDENTS.

Barbasa versus Tuquero

The Case

This is a petition for review brought by Roberto Barbasa against the Secretary of Justice, Honorable Artemio Tuquero, and against Grace Guarin, Nestor Sangalang, and Victor Callueng, the officers of Tutuban Properties, Incorporated. Barbasa asks the Supreme Court to overturn the finding of the Secretary of Justice, affirmed by the Court of Appeals, that there is no probable cause to charge the private respondents with grave coercion for cutting off the electricity in the commercial stalls he leased. The case matters because it fixes the elements of grave coercion and shows how a valid contractual penalty clause, faithfully invoked, removes the element of unlawful restraint that the crime requires.

Procedural History

Barbasa filed a criminal complaint for grave coercion before the Office of the City Prosecutor of Manila. The City Prosecutor dismissed the complaint against four of the respondents but found probable cause against Guarin, Sangalang, and Callueng, and an Information for grave coercion was filed in the Metropolitan Trial Court of Manila. Proceedings there were deferred when the private respondents appealed to the Secretary of Justice, who reversed the City Prosecutor and directed him to move for the dismissal of the criminal case. After his motion for reconsideration was denied, Barbasa went to the Court of Appeals on a petition for certiorari. The Court of Appeals dismissed the petition for lack of merit and likewise denied reconsideration. Barbasa then came to the Supreme Court by petition for review.

Facts

Barbasa was president of Push-Thru Marketing, Incorporated, which leased commercial stalls in Tutuban Center, owned by Tutuban Properties. On the thirtieth of June, 1999, Angelina Hipolito, the merchandising officer of Push-Thru Marketing, received from Grace Guarin, the credit and collection manager of Tutuban Properties, a notice of disconnection of utilities for failure to settle outstanding obligations for common usage and service area charges, utilities, electricity, and rentals. Barbasa paid the charges for common usage, utilities, and electricity, and Guarin accepted the payment, but he did not pay the back rentals.

On the first of July, 1999, Guarin, together with Nestor Sangalang, the engineering manager, Victor Callueng, the head of security, and several armed guards, disconnected the electricity in the stalls occupied by Push-Thru Marketing. Barbasa then filed a criminal complaint for grave coercion, alleging that the electricity was cut off in a violent and intimidating manner and that armed guards were used to intimidate him and his employees.

The private respondents answered that the disconnection was done peacefully, in the lawful performance of their duties, and in accordance with the lease agreements. They showed that Barbasa owed accumulated unpaid rentals, common usage and service area billings, electrical and water bills, and interest and penalties from June 1998 to May 1999 amounting to 267,513 pesos and 39 centavos, that he had been given written demand notices at least three times warning that electricity would be cut, and that he paid only 127,272 pesos and 18 centavos after the third notice. They also pointed to an outstanding account for priority premium fees of more than five million pesos, and to the penalty clause in the lease granting the lessor the option to cut off power upon default.

Issues

• Whether or not the act of disconnecting the supply of electricity to the petitioner's stalls, and the manner by which it was carried out, constitutes grave coercion.

Applicable Provisions

The decision does not quote the Revised Penal Code definition of grave coercion; it states the elements of the crime as follows:

The crime of grave coercion has three elements: (a) that a person is prevented by another from doing something not prohibited by law, or compelled to do something against his or her will, be it right or wrong; (b) that the prevention or compulsion is effected by violence, either by material force or such a display of it as would produce intimidation and, consequently, control over the will of the offended party; and (c) that the person who restrains the will and liberty of another has no right to do so; in other words, that the restraint is not made under authority of law or in the exercise of any lawful right.

These elements frame the whole inquiry, because the absence of any one of them means no crime was committed.

The decision also relies on the penalty clause of the contract of lease, which provides:

It is also expressly agreed that in case the LESSEE fails to pay at any time the installments on the priority premium, lease rentals or CUSA and utility charges corresponding to a total of three (3) months, even if not consecutively incurred, the LESSOR is hereby granted the option to cut off power and other utility services to the LESSEE until full payment of said charges, expenses, penalty and interest is made, without prejudice to any other remedies provided under this Contract, including the termination of this Contract.

This stipulation supplies the lawful right whose exercise negates the third element of grave coercion.

Ruling

The Court denied the petition. On the first element and the second, it found no violence, force, or display of force that would produce intimidation. The disconnection was done peacefully and after written notice. The presence of armed guards did not, by itself, amount to intimidation; the Court was inclined to believe the guards were there to prevent any untoward or violent event in the exercise of the lessor's rights, and observed that if the respondents had wanted a violent result they would have gone unannounced or used less conspicuous means.

On the third element, the Court held that the lessor acted under a lawful right. The penalty clause was clear and unambiguous, and there could be no grave coercion in exercising a right afforded by the solemn covenants of a contract that the petitioner had agreed to and signed. The Court reiterated that contracts constitute the law between the parties and must be read together and given life in all their parts, with the intent of the parties as shown by the clear language prevailing over after-the-fact explanations. It noted that the petitioner owed more than five million pesos, which was undisputed, so resort to the penalty clause was justified. A penal clause, the Court explained, is an accessory obligation attached to a principal one to insure performance, common in lease contracts, and there is nothing immoral or illegal in such a clause absent any showing that it was forced upon or fraudulently foisted on the obligor.

The Court added a reminder to counsel: a lawyer's duty to the client is matched by the duty, as an officer of the court, to advise the client on the objective merit of the case, and if the cause lacks merit, to say so.

Doctrine

Grave coercion requires, as its third element, that the person restraining another's will has no right to do so. Where the act is done in the exercise of a lawful right, no grave coercion is committed. A penalty clause in a lease granting the lessor the option to cut off power upon default is a valid contractual right, and its exercise, done peacefully and after notice, does not constitute grave coercion. Contracts are the law between the parties and must be interpreted so that all their provisions are reconciled and given effect.

Disposition

The petition was denied, and the decision and resolution of the Court of Appeals were affirmed, with costs against the petitioner.

Remember This

Memorize the third element: no grave coercion where the restraint is made under authority of law or in the exercise of a lawful right, and a valid penalty clause in a lease is such a right. Examiners use this case to test the elements of grave coercion and the binding force of contractual penalty clauses.