G.R. No. 8228. January 16, 1914
TAN TI (ALIAS TAN TICO), PLAINTIFF AND APPELLEE, VS. JUAN ALVEAR, AS SHERIFF, ET AL., DEFENDANTS AND APPELLANTS. [G.R. No. 8229, January 16, 1914] TIU UCO (ALIAS TION OCCO), PLA…
TRENT, J.:
tried together in the court below. Damages were awarded in each case and all
were appealed by the defendants. They will be considered together. Tan Ti, Tiu
Uco, and Tiu Tiao et al., the respective plaintiffs, each owned a retail store
in Dagupan. The Court of First Instance of Manila issued execution on the
effects of one Lim Kok Tiu, and ordered notices of garnishment to be served on
each of the above named present plaintiffs. These notices were forwarded to the
sheriff of Pangasinan. It appears that the sheriff himself was not in his office
when the notices were received and they were attended to by his deputy, Lopez.
Lopez delivered the notices to another deputy sheriff, Zulueta, for service.
Zulueta, instead of merely serving the notices, informed each of the present
plaintiffs that unless they submitted their respective bonds in the sum of
P15,000, he would close their stores. The respective owners asked for time to go
to Manila to secure bondsmen, which was granted them. On arriving at Manila they
consulted their lawyers, who informed them that the sheriff had no right to
close their stores upon garnishment process, and told them to return to Dagupan
and so inform the sheriff and his deputies, with the further admonition that
such action would render the latter liable for damages. The three plaintiffs
returned to Dagupan and notified deputies Lopez and Zulueta accordingly, but the
latter went ahead and closed the stores on November 13, 1911, placing guards at
each one. The owners thereupon returned to Manila for further consultation with
their lawyers. Their attorneys consulted with attorney for the plaintiff in the
case from which the garnishment process had issued, and the latter sent a
telegram to the sheriff on November 14th, instructing him not to close the
stores but to proceed in accordance with section 431 of the Code of Civil
Procedure. At the same time he wrote a letter to the sheriff containing the same
instructions. Notwithstanding the fact that the contents of the notices which
the sheriff’s deputies had served on the owners of these stores clearly showed
that they were not writs of attachment, and the further instructions from the
counsel for the plaintiff in that civil case to the same effect, the deputy
sheriffs refused to raise the attachment. The owners of the stores thereupon
filed the complaints in the present civil actions on November 17, 1911, after
notification to the deputy sheriff that such was their intention. On November
21, 1911, the attachments were raised and the plaintiffs were allowed to resume
business.
The lower court awarded damages to the plaintiff Tan Ti as follows:
For loss of profits on the sale of goods during the time the store
was closedP 90.00 Impairment of credit edit 500.00 Counsels’ fees 500.00 Rent 22.50 Wages of employees 67.50 Loss of profits from sales of cigarettes 7.50 Two trips to Manila 40.00 Total 1,227.50
The loss of profits on cigarrette sales was fixed by stipulation of the
parties. The two items of rent for the building and wages of employees, being
the pro rata parts of the plaintiffs monthly expenses for these
services, should be allowed. It is urged that as one of plaintiff’s two trips to
Manila was made before the wrongful attachment of his property, this item should
be cut in half. The first trip, however, was the direct result of defendants’
representations to the plaintiff in their official capacity. We are of the
opinion that the defendants would have been liable for this expense even if they
had followed the instructions which they received from Manila as the result of
plaintiff’s first trip to Manila. They had no right to make such representations
to the plaintiff on the strength of the notices which they were called upon to
serve, and such representations were the direct and proximate cause which
induced plaintiff to make the trip. The expenses of both trips should be
allowed, and this item of damages is therefore approved. . Loss of profits from
sales for the time the store was closed was based upon the record of sales made
by the plaintiff during the months of October, November, and December, 1911. The
figures were as follows: October, P1,517.54; November, P924.19; and December,
P1,651.54. Upon these figures, the reduction in gross sales was fixed at P600
and profits allowed at 15 per cent, or P90. This seems to be a fair and
reasonable method of arriving at plaintiff’s loss on this item and should be
allowed.
We accept the statement of counsel for the defendants to the effect that of
the item of P500 for attorneys’ fees, P200 were paid for services rendered in
securing the release of the goods and P300 for prosecuting the present suit for
damages.
That attorney’s fees in excess of the amount fixed by statute cannot be taxed
as costs against the adverse party in any case is well settled. (Sees. 489 and
492, Code Civ. Proc; Mendiola vs. Villa, 15 Phil. Rep., 131; Orense
vs. Jaucian, 18 Phil. Rep., 553.) Can such fees be allowed in this
jurisdiction as an element of damages?
The decisions of the State courts in the American Union on this question are
pot uniform. They are irreconcilable, some holding that reasonable counsel fees
incurred in procuring the dissolution of injunctions, attachments, and in
recovering property wrongfully seized is a proper element of damages, the amount
being limited to fees paid for procuring the dissolution or recovery and not for
the general defense of the case or for prosecuting suits for damages. These
holdings proceed upon the idea that the party has been compelled to employ
counsel to rid himself of an unjust restriction which his adversary has placed
upon him. The courts which take the opposite view say that it is difficult to
see upon what ground counsel fees incurred by the adverse party should be
charged up to the defeated party any more in attachment and injunction cases
than in other litigations upon contracts or for damages for torts. The
litigation they say may be equally unjust and oppressive in other cases as in
cases of attachment, injunctions and replevin. It is true, however, they reason,
that attachments and injunctions are in some respects more summary and may
entail damages arising out of the seizure of defendant’s property; but all of
this is provided for by the terms of the bond required to cover damages
sustained. But counsel fees are as necessary in the one class of cases as in the
other and are neither peculiar nor more erroneous in cases of attachments and
injunctions than in other cases.
The authorities on either side of this question are eminent and there is no
middle ground upon which to stand. The authorities pro and con may be found
collated in the case notes of the following cases: Littleton vs.
Burgess (16 L. R. A., N. S., 49) ; Lindeberg vs. Howard (8 Am. &
Eng. Ann. Cas., 709, injunction) ; Plymouth Gold Mining Co. vs. U. S.
Fidelity & Guaranty Co. (10 Am. & Eng. Ann. Cas., 951, attachment) ;
Lake vs. Hargis (30 L. R. A., N. S., 366, replevin) ; Winkler
vs. Roeder (8 Am. St. Rep., 155, attorneys’ fees as element of
damages).
In the United States Supreme Court and in the Federal Courts such fees are
not allowed. The case first decided by the United States Supreme Court upon this
point and which has been steadfastly adhered to ever since is Oelrichs vs.
Spain (15 Wall., 211, 221). In this case the court said:
“The point here in question has never been expressly decided by this court,
but it is clearly within the reasoning of the case last referred to, and we
think is substantially determined by that adjudication. In debt, covenant and
assumpsit damages are recovered, but counsel fees are never included. So in
equity cases, where there is no injunction bond, only the taxable costs are
allowed to the complainants. The same rule is applied to the defendant, however
unjust the litigation on the other side, and however large the expensa
litis to which he may have been subjected. The parties in this respect are
upon a footing of equality. There is no fixed standard by which the honorarium
can be measured. Some counsel demand much more than others. Some clients are
willing to pay more than others. More counsel may be employed than are
necessary. When both client and counsel know that the fees are to be paid by the
other party there is danger of abuse. A reference to a master, or an issue to a
jury, might be necessary to ascertain the proper amount, and this grafted
litigation might possibly be more animated and protracted than that in the
original cause. It would be an office of some delicacy on the part of the court
to scale down the charges, as might sometimes be necessary.”
Since the enunciation of this doctrine the Supreme Court of the United States
has had occasion to reverse several decisions of State courts where attorneys’
fees for services in dissolving writs of injunction and attachment were allowed,
the writs having issued out of Federal courts and actions for damages brought in
the State courts. (Tullock vs. Mulvane, 184 U. S., 497, reversing 61
Kan., 650; 46 L. ed., 657; Mo. etc. R. Co. vs. Elliott, 184 U. S., 530;
46 L. ed., 673, reversing 154 Mo., 300.)
The case at bar is one of replevin. In this country the damages must be
determined and assessed in the principal action. Two actions, one of replevin
and the other for damages, cannot be maintained. This makes the apportionment of
attorneys’ fees exceedingly difficult and in the absence of an agreement
practically impossible. In those jurisdictions where attorneys’ fees are allowed
as an element of damages two actions as a rule are required.
After an examination of all the available authorities we have concluded that
sound public policy demands that counsel fees in suits of the character of the
one under consideration should not be regarded as a proper element of damages,
even where they are capable of being apportioned so as to show the amount
incurred for the release of the goods as separate and distinct from the other
services necessary in the prosecution of the suit for damages. It is not sound
public policy to place a penalty on the right to litigate. To compel the
defeated party to pay the fees of counsel for his successful opponent would
throw wide the door of temptation to the opposing party and his counsel to swell
the fees to undue proportions, and to apportion them arbitrarily between those
pertaining properly to one branch of the case from the other.
This court has already placed itself on record as favoring the view taken by
those courts which hold that attorneys’ fees are not a proper element of
damages. In Ortiga Bros. & Co. vs. Enage and Yap Tico (18 Phil.
Rep., 345), a wrongful attachment on the pier belonging to plaintiffs had issued
at the request of Yap Tico. Ortiga Bros, sued out an injunction preventing the
attempted sale of the pier by the sheriff and the matter was then held in
statu quo pending judgment of the court as to the right of the sheriff
to attach and sell the property. Judgment in the lower court was in favor of the
plaintiffs and damages were awarded in the amount ofP600 which proved to consist
entirely of the fees of plaintiff’s attorney. This court expressly disallowed
the same, awarding the plaintiffs only the usual statutory costs.
As to the item of P500 for impairment of plaintiff’s credit: Plaintiff
testified that he was conducting a credit business with wholesale houses in
Manila, and that when his stock of goods was seized by the sheriff he so
informed these houses, who thereupon stopped his credit; that on being restored
to possession of his goods he so advised them. Although he states that by
stoppage of his credit he was unable to secure merchandise for Christmas sales,
it appears from his books,’ as stated above, that he sold P1,651.54 during the
month of December, which was as much as, if not more, than he had sold during
the same month of the previous year. The wrongfulness of the seizure was so
apparent that a satisfactory explanation of the same could easily have been
given to the wholesale houses with which he was doing business, and it
apparently had no effect on his sales for the month of December. As we have
allowed him the profits on P600 for sales which he was prevented from making
during the month of November, it appears that the damage from interruption to
his business has been fully compensated. So that, without touching upon the
vexatious question of whether damages to credit might be allowed in a proper
case, we are of the opinion that such damages in this case, if any, were so
infinitesimal and speculative, that they cannot be allowed.
Our decision in the Tan Ti case disposes of the questions raised in the other
two cases. All the items allowed in those cases being of a similar character and
having been computed in the same manner as those in the first case, should be
allowed, with the exception of the amounts allowed as attorneys’ fees and for
impairment of credit. In both cases these items are disallowed.
For the foregoing reasons, the judgments appealed from are modified as
follows: Damages in Tan Ti’s case are reduced to P227.50; in Tiu Uco’s case, to
P460.50; and in the case of Tiu Tiao et al., to P987. As thus modified, the
judgments appealed from are affirmed. Without costs in this instance.
Arellano, C. J., Carson and Araullo, JJ., concur.
Moreland, J., concurs in the result.