ISIDRO V. SABA, PETITIONER, VS. THE HON. COURT OF APPEALS, EMIL L. ONG, EMIL L. ONG CHUAN AND JOSE ONG CHUAN, RESPONDENTS.

This is a petition for review on certiorari of the decision
of the Court of Appeals in AC-G.R. CV No. 05391 dated March 17, 1987 which
affirmed in toto the decision of the Regional Trial Court of
Laoang, Northern Samar in Civil Case No. 1012 dated May 30, 1984.

The pertinent facts are as follows:

Pedro de la Cruz is a grantee of a lease of a portion of marshy
land in Laoang, Northern Samar awarded to him by the Bureau of Lands under
Miscellaneous Lease Application No. 810 for 2,050 square meters. The award of lease was granted in 1934 (TSN,
Nov. 8, 1976, p. 5). The award of lease
to Pedro de la Cruz was not presented in court but its existence was not
disputed by the parties. In 1939,
Gregoria Nalazon, wife of Pedro de la Cruz, died and the estate became the
subject of an intestate estate proceeding in Special Proceedings No. 2 of the
CFI of Laoang, Northern Samar. The
leasehold (MLA No. 810) was included in this special proceeding wherein 50%
thereof was adjudicated pro-indiviso to Pedro de la Cruz while the other
50% was adjudicated pro-indiviso to the children, namely: Jesus,
Alfredo, Lourdes, Amada, Josefa, Genaro, Eufemio and Ramon, all surnamed de la
Cruz. The improvements introduced by
Pedro de la Cruz consisted of rock fillings and three warehouses. In 1953, private respondent Jose Ongchuan
leased the warehouse from Pedro de la Cruz (Exhibit “K”). In 1959 or so, the seven children of Pedro
de la Cruz, namely: Jesus, Alfredo, Amada, Josefa, Genaro, Eufemio and Ramon,
all surnamed de la Cruz sold their leasehold rights (7/8 of the 50% of MLA 810)
to private respondent Emil Ong, while Lourdes C. Agbayani sold her leasehold
right (1/8) pro-indiviso to petitioner Isidro V. Saba in March 1966
(Exhibit “J”). In 1961, the
warehouse which was being leased by private respondent Jose Ongchuan was
levelled to the ground by fire (TSN, May 18, 1976, p. 13). After the fire, private respondent Emil Ong
constructed a new building on the same area formerly occupied by the burned
warehouse (TSN, March 25, 1983, p. 3). Later, Lourdes C. Agbayani sent a letter to private respondents
notifying them of the sale of her 1/8 share in the leasehold to petitioner and
requested that payment of rentals be given to the new owner instead of
her. Private respondents did not heed
the request. Petitioner reiterated the
demand of Lourdes C. Agbayani several times yet private respondents ignored
said demand. Thus, petitioner was
forced to file a case for collection of rentals against private respondents in
the Municipal Court of Laoang. For
improper venue, the court dismissed the case. Petitioner appealed the decision to the Court of First Instance of
Laoang but the decision of dismissal was affirmed. Still not satisfied, petitioner filed this case on August 6, 1974
for collection of rentals over the 1/8 share of Lourdes C. Agbayani in the
amount of P8,271.12 plus interest from August, 1966 until full payment.

On the other hand, private respondents prayed for moral and
exemplary damages as well as attorney’s fees. They contended that the complaint is baseless and intended to harass
them. Because of this complaint,
private respondent Emil Ong’s reputation as a businessman, CPA, lawyer and a
constitutional convention delegate of Northern Samar was tarnished and he was
exposed to ridicule. Private respondent
Jose Ongchuan contended that his reputation as a respected businessman in the
community was likewise affected.

On May 30, 1984, the trial court rendered judgment against
petitioner, the dispositive portion of which reads (p. 438, Original Record):

“WHEREFORE, judgment is hereby rendered dismissing the
complaint and ordering plaintiff to pay to defendants jointly and severally,
P40,000.00 as moral damages; P30,000.00 as exemplary damages and P15,000.00 as
attorney’s fees. With costs against
plaintiff.

“SO ORDERED.”

On appeal, respondent Court of Appeals affirmed in toto
the trial court’s decision (p. 33, Rollo). Hence, the present petition.

The issues are, stated simply, whether or not (1) petitioner has
a cause of action against private respondents and (2) the award of damages is
proper.

As aforestated, the award of lease was granted to Pedro de la
Cruz in 1934. The Secretary of
Agriculture and Commerce set the maximum period of his lease at fifteen (15)
years (Exhibit “16”). Therefore, the period of lease was up to 1949 only. There is no evidence on record of renewal of
the term of the lease. Evidently, when
Lourdes C. Agbayani sold her “leasehold right” (1/8) pro-indiviso
to petitioner in 1966, there was no longer a leasehold right that she
conveyed. Corollarily, petitioner did
not acquire any right from her that can be enforced against the private
respondents or anybody for that matter. In this regard, the affirmance of the dismissal of the complaint was
correct.

With respect to the award of damages, both the trial court and
the respondent court erred. It was
their opinion that (pp. 32-33, Rollo):

“‘Indeed, has (sic) plaintiff been extra careful in analyzing
the facts and circumstances, this case could have been avoided and had never
been filed at all, not to mention that one of the heirs of Pedro de la Cruz who
sold his very share to defendant Emil L. Ong and a lawyer at that, is now the
very counsel prosecuting this case for the plaintiff. This case alone has been pending for almost 10 years now and this
court is aware and not closing its eyes to the cases previously filed one after
the other by plaintiff against defendant. So, practically defendants must have spent most of their lives (about 15
years or so) answering and worrying about the cases filed by plaintiff against
them. That feeling of antipathy and
negative intentions of plaintiff against defendants cannot be hidden, and can
be felt from reading the records of this case. Defendant Emil L. Ong has to come every now and then to testify in this
case leaving behind the management of his business in Manila. He has to engage the services of counsels
one after another because either the previous counsel is appointed to the bench
or to any government office. Defendant
Jose Ongchuan is the father of Emil L. Ong a big and progressive businessman in
Laoang and Manila, while defendant Emil Ong is a businessman, a CPA and lawyer
and the delegate of N. Samar to the Constitutional Convention, somehow the
cases filed by plaintiff affected their names and reputations, for which reason
the grant of moral as well as exemplary damages is in order. Attorney’s fees can also be granted in this
case considering the length of time of the pendency of this case.’ (p. 438,
Records).”

Moral damages may be awarded to compensate one for diverse
injuries such as mental anguish, besmirched reputation, wounded feelings and
social humiliation. It is however not
enough that such injuries have arisen; it is essential that they have sprung
from a wrongful act or omission, fraud, malice, or bad faith which was
the proximate cause thereof (see Guita v. Court of Appeals, et al., G.R. No.
60409, November 11, 1985, 139 SCRA 576 cited in Suario v. Bank of the
Philippine Islands, et al., G.R. No. 50459, August 25, 1989; R & B Surety
& Insurance Co., Inc. v. Intermediate Appellate Court, et al., G.R. No.
64515, June 22, 1984, 129 SCRA 736). The adverse result of an action does not per se make the
action wrongful and subject the actor to make payment of damages, for the law
could not have meant to impose a penalty on the right to litigate (Rubio v.
Court of Appeals, et al., G.R. No. 50911, March 12, 1986, 141 SCRA 488). One who exercises his rights does no
injury. Qui jure suo
utitur nullum damnum facit. If damage results from a person’s exercising
his legal rights, it is damnum absque injuria (Auyong Hian
v. Court of Tax Appeals, et al., G.R. No. L-28782, September 12, 1974, 59 SCRA
110 cited in The Ilocos Norte Electric Company v. Hon. Court of Appeals, et
al., G.R. No. 53401, November 6, 1989).

Petitioner was in good faith when he filed the collection suit
against private respondents. He thought
that by virtue of the sale of Lourdes C. Agbayani’s leasehold right to him
(Exhibit “J”), her right to 1/8 pro-indiviso of the property
has already been transferred to him, which includes the right to collect
rentals. Lourdes C. Agbayani even
notified the private respondents that the property being rented by them has
been sold to petitioner and effective April 1, 1966, petitioner became the
proprietor of her property (Exhibit “N”). The failure by private respondents to pay the rentals prompted
petitioner to file a complaint against them. A person may have erred but error alone is not a ground for moral
damages (Lagman, et al. v. Honorable Intermediate Appellate Court, et al., G.R.
No. 72281, October 28, 1988, 166 SCRA 734). And although cases were previously filed one after another by petitioner
against private respondents, no evidence was adduced that these cases were baseless
and intended merely to harass private respondents. The acts performed by petitioner cannot be said to have
disparaged the reputation of private respondents (see Litam v. Espiritu, et
al., 100 Phil. 364). Lastly, whatever
worries, anxieties and expenses private respondents may have suffered were only
such as are usually caused to a party haled into court as a defendant in a
litigation (see Philippine National Bank v. The Hon. Court of Appeals, et al.,
G.R. No.           L-45770, March 30,
1988, 159 SCRA 433). Clearly, there is
no sufficient justification for the award of moral damages, exemplary damages
and attorney’s fees.

We find it unnecessary to resolve the other issues raised by
petitioner, being extraneous to the present case.

ACCORDINGLY, the petition is hereby PARTLY GRANTED. The decision of the respondent Court of
Appeals is MODIFIED insofar as the award of moral damages, exemplary damages
and attorney’s fees is concerned, which is DELETED.

SO ORDERED.

Narvasa, (Chairman), Cruz, Gancayco, and Griño-Aquino, JJ., concur.