December 1982 - Philippine Supreme Court Decisions/Resolutions
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G.R. No. L-59647 December 27, 1982 - PANAY ELECTRIC CO., INC. v. COURT OF APPEALS, ET AL.
204 Phil. 776:
204 Phil. 776:
FIRST DIVISION
[G.R. No. L-59647. December 27, 1982.]
PANAY ELECTRIC CO., INC., Petitioner, v. THE HONORABLE COURT OF APPEALS, FLORENTINO SARABIA and LUZON SURETY CO., INC., Respondents.
Tirol and Tirol for Petitioner.
Ricardo P.C. Castro, Jr. for Private Respondents.
SYNOPSIS
Private respondent, Florentino Sarabia, was employed by petitioner in 1952 as a bill collector. He posted two surety bonds in favor of petitioner in the total amount of P4,000 with his co-respondent as surety. In 1965, based on an auditing report showing that Sarabia incurred a shortage of P12,155.68 in his collections for a period of 7 1/2 years, he was not allowed to continue working by petitioner and a suit for reimbursement was thereafter filed against him and his surety. In his Answer, private respondent denied the shortage and attributed the same to erroneous accounting. He prayed for attorney’s fees and actual damages. Later, he filed an Amended Answer alleging dismissal without cause and praying for reinstatement with back salaries and damages. The Trial Court, finding the shortage to be only in the amount of P41.85, ordered Sarabia’s reinstatement with back wages and the payment to him of moral and exemplary damages, attorney’s fees, expenses of litigation, and costs. The complaint against the surety was dismissed. On appeal, the Court of Appeals affirmed the amount of the shortage and the reinstatement ordered but modified the judgment by limiting the backwages and reducing the amount of moral and exemplary damages.
On petition for review, the Supreme Court held that the finding as to the amount of shortage is a factual finding that is binding upon this Court in the absence of established exceptions; that respondent employee is entitled to reinstatement and backwages; but that the award of moral damages, in the absence of bad faith, fraud or malice, and of exemplary damages, where petitioner had not acted in a "wanton, fraudulent, reckless, oppressive, or malevolent manner," are uncalled for.
Judgment modified.
On petition for review, the Supreme Court held that the finding as to the amount of shortage is a factual finding that is binding upon this Court in the absence of established exceptions; that respondent employee is entitled to reinstatement and backwages; but that the award of moral damages, in the absence of bad faith, fraud or malice, and of exemplary damages, where petitioner had not acted in a "wanton, fraudulent, reckless, oppressive, or malevolent manner," are uncalled for.
Judgment modified.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF THE TRIAL COURT GENERALLY BINDING ON APPEAL; CASE AT BAR. — That Sarabia did not actually incur any shortages except for the amount of P41.85 is a factual finding that is binding upon this Court in the absence of established exceptions. Considering the error in the shortage, we agree that petitioner need not have terminated his services. He is thus entitled to reinstatement and backwages (Samuel Pepito v. Secretary of Labor, Et Al., 96 SCRA 454 [1980]) in the total amount of P16,480.00
2. ID.; CIVIL ACTIONS; PLEADINGS; AN AMENDMENT THEREOF WHICH SUPPLEMENTS THE FACTS ORIGINALLY ALLEGED RELATES BACK TO THE DATE OF THE COMMENCEMENT OF THE ACTION; CASE AT BAR. — The fact that reinstatement and additional damages were prayed for only in an Amended Answer filed approximately six years after the original Answer does not bar it on grounds of prescription and laches. The original answer had already alleged termination of services on account of shortage of collections, which shortage Sarabia disputed and was, in effect, an allegation that termination was without cause. The reinstatement prayed for merely supplemented and amplified the fact of termination. An amendment which merely supplements and amplifies the facts originally alleged relates back to the date of the commencement of the action and is not barred by the statute of limitations the period of which expires after service of the original complaint but before service of amendment (Barbosa, Et. Al. v. Mallari, Et Al., 99 Phil. 799 (1956), citing Moran, Rules of Court, Vol. 1, p. 384 (1952) ed.).
3. CIVIL LAW; DAMAGES; MORAL DAMAGES; AWARD NOT PROPER IN ABSENCE OF MALICE, FRAUD, OR BAD FAITH. — The award of moral damages is uncalled for. In filing the present case, petitioner had not acted with malice, fraud, or bad faith. it relied solely on the letter of the accounting firm of Sycip, Gorres and Velayo. However, such reliance was misplaced, for, as found by the Court of Appeals, that letter was "only a brief letter mentioning some summaried findings which are unverified and undetailed. It even stressed the fact that there are unascertained differences ‘due to unavailable records and/or customer’s credit balances due to overpayment.’"
4. ID.; ID.; EXEMPLARY DAMAGES; AWARD THEREOF IMPROPER IN CASE AT BAR. — Neither are exemplary damages proper. Petitioner had not acted in a "wanton, fraudulent, reckless, oppressive, or malevolent manner" (Article 2232, Civil Code). Based on the accounting findings, incomplete though they may have been, petitioner can not be blamed for trying to protect itself.
2. ID.; CIVIL ACTIONS; PLEADINGS; AN AMENDMENT THEREOF WHICH SUPPLEMENTS THE FACTS ORIGINALLY ALLEGED RELATES BACK TO THE DATE OF THE COMMENCEMENT OF THE ACTION; CASE AT BAR. — The fact that reinstatement and additional damages were prayed for only in an Amended Answer filed approximately six years after the original Answer does not bar it on grounds of prescription and laches. The original answer had already alleged termination of services on account of shortage of collections, which shortage Sarabia disputed and was, in effect, an allegation that termination was without cause. The reinstatement prayed for merely supplemented and amplified the fact of termination. An amendment which merely supplements and amplifies the facts originally alleged relates back to the date of the commencement of the action and is not barred by the statute of limitations the period of which expires after service of the original complaint but before service of amendment (Barbosa, Et. Al. v. Mallari, Et Al., 99 Phil. 799 (1956), citing Moran, Rules of Court, Vol. 1, p. 384 (1952) ed.).
3. CIVIL LAW; DAMAGES; MORAL DAMAGES; AWARD NOT PROPER IN ABSENCE OF MALICE, FRAUD, OR BAD FAITH. — The award of moral damages is uncalled for. In filing the present case, petitioner had not acted with malice, fraud, or bad faith. it relied solely on the letter of the accounting firm of Sycip, Gorres and Velayo. However, such reliance was misplaced, for, as found by the Court of Appeals, that letter was "only a brief letter mentioning some summaried findings which are unverified and undetailed. It even stressed the fact that there are unascertained differences ‘due to unavailable records and/or customer’s credit balances due to overpayment.’"
4. ID.; ID.; EXEMPLARY DAMAGES; AWARD THEREOF IMPROPER IN CASE AT BAR. — Neither are exemplary damages proper. Petitioner had not acted in a "wanton, fraudulent, reckless, oppressive, or malevolent manner" (Article 2232, Civil Code). Based on the accounting findings, incomplete though they may have been, petitioner can not be blamed for trying to protect itself.
D E C I S I O N
MELENCIO-HERRERA, J.:
We resolved to give partial due course, in respect of the award of damages, in this appeal by Certiorari from the Decision of respondent Court of Appeals, 1 in CA-G.R. No. 65524-R, entitled "Panay Electric Co., Inc. v. Florentino Sarabia Luzon Surety Co., Inc."cralaw virtua1aw library
Private respondent, Florentino Sarabia, was employed in 1952 by petitioner company as a bill collector. To guarantee fulfillment of his obligations as such, he posted in favor of petitioner two surety bonds in the total amount of P4,000, with his co-respondent, Luzon Surety Co., Inc., as surety.
Contending that, an auditing report presented by the accounting firm of Sycip, Gorres and Velayo in January, 1965, showed that Florentino Sarabia had incurred a shortage in his collections for a period of 7 1/2 years in the sum of P12,155.68, petitioner filed against him and the surety company a suit for reimbursement on June 22, 1966. Prior thereto, or, in February, 1965, private respondent had not been allowed by petitioner to continue working.
In his Answer filed on October 31, 1966, Sarabia denied the shortgage, attributing it to erroneous accounting, and prayed for attorney’s fees in the sum of P800.00 and actual damages in the sum of P500.00. And, in an Amended Answer dated October 6, 1972, which was admitted by the lower Court, Sarabia alleged in an additional counterclaim that he was dismissed without cause and prayed for reinstatement with back salaries and damages. Respondent surety company disclaimed any liability because of Sarabia’s refusal to admit the shortage.
The Trial Court found the shortage to be only in the amount of P41.85; that the case was the product of "either a willful frame-up or a mistake in accounting" ; and ordered Sarabia’s reinstatement with back wages from January, 1965; the payment to him of moral damages of P20,00.00, exemplary damages of P10,000.00, attorney’s fees of P5,000.00, and expenses of litigation of P1,000.00, and costs. The complaint as against the surety company was dismissed.
Respondent Court of Appeals affirmed the amount of the shortage and the reinstatement ordered, but modified the judgment by limiting backwages to the monthly salary of P180.00 for a period of three years, or the total sum of P6,480.00, as actual damages, P10,000.00 as moral damages, P5,000.00 as exemplary damages, P2,000.00 for attorney’s fees and expenses of litigation, and costs; all such amounts to bear legal interest from the date when the judgment in this case shall become final, until fully paid. Reinstatement was conditioned upon Sarabia’s physical fitness, who was said to be "at present old and sick," and upon presentation of a duly verified certification by a Government physician.
That Sarabia did not actually incur any shortages except for the amount of P41.85 is a factual finding that is binding upon this Court in the absence of established exceptions. Considering the error in the shortage, we agree that petitioner need not have terminated his services. He is thus entitled to reinstatement and backwages 2 in the total sum of P6,480.00.
The fact that reinstatement and additional damages were prayed for only in an Amended Answer filed approximately six years after the original Answer does not bar it on grounds of prescription and laches. The original Answer had already alleged termination of services on account of shortage of collections, which shortage Sarabia disputed and was, in effect, an allegation that termination was without cause. The reinstatement prayed for merely supplemented and amplified the fact of termination. An amendment which merely supplements and amplifies the facts originally alleged relates back to the date of the commencement of the action and is not barred by the statute of limitations the period of which expires after service of the original complaint but before service of amendment. 3
The award of moral damages is uncalled for. In filing the present case, petitioner had not acted with malice, fraud, or in bad faith. It relied solely on the letter of the accounting firm of Sycip, Gorres & Velayo. However, such reliance was misplaced, for, as found by the Court of Appeals, that letter was "only a brief letter mentioning some summarized findings which are unverified and undetailed. It even stressed the fact that there are unascertained differences ‘due to unavailable records and/or customer’s credit balances due to overpayment’."cralaw virtua1aw library
Neither are exemplary damages proper. Petitioner had not acted in a "wanton, fraudulent, reckless, oppressive or malevolent manner." 4 Based on the accounting findings, incomplete though they may have been, petitioner cannot be blamed for trying to protect itself.
The grant of attorney’s fees and expenses of litigation of P2,000.00 is, we find, just and equitable.
ACCORDINGLY, the judgment under review is hereby modified by the elimination of the award of moral damages and exemplary damages; but affirmed as to: a) the order to reinstate Florentino Sarabia, subject to his physical fitness; b) the award of actual damages of P6,480.00, the same to bear interest at the legal rate from the time that this judgment becomes final and until fully paid; and c) the grant of counsel fees and litis expenses of P2,000.00.
Florentino Sarabia shall reimburse petitioner the amount of P41.85, with interest at the legal rate from the time this judgment becomes final and until fully paid.
Costs against petitioner.
SO ORDERED.
Teehankee (Chairman), Plana, Vasquez, Relova and Gutierrez, Jr., JJ., concur.
Private respondent, Florentino Sarabia, was employed in 1952 by petitioner company as a bill collector. To guarantee fulfillment of his obligations as such, he posted in favor of petitioner two surety bonds in the total amount of P4,000, with his co-respondent, Luzon Surety Co., Inc., as surety.
Contending that, an auditing report presented by the accounting firm of Sycip, Gorres and Velayo in January, 1965, showed that Florentino Sarabia had incurred a shortage in his collections for a period of 7 1/2 years in the sum of P12,155.68, petitioner filed against him and the surety company a suit for reimbursement on June 22, 1966. Prior thereto, or, in February, 1965, private respondent had not been allowed by petitioner to continue working.
In his Answer filed on October 31, 1966, Sarabia denied the shortgage, attributing it to erroneous accounting, and prayed for attorney’s fees in the sum of P800.00 and actual damages in the sum of P500.00. And, in an Amended Answer dated October 6, 1972, which was admitted by the lower Court, Sarabia alleged in an additional counterclaim that he was dismissed without cause and prayed for reinstatement with back salaries and damages. Respondent surety company disclaimed any liability because of Sarabia’s refusal to admit the shortage.
The Trial Court found the shortage to be only in the amount of P41.85; that the case was the product of "either a willful frame-up or a mistake in accounting" ; and ordered Sarabia’s reinstatement with back wages from January, 1965; the payment to him of moral damages of P20,00.00, exemplary damages of P10,000.00, attorney’s fees of P5,000.00, and expenses of litigation of P1,000.00, and costs. The complaint as against the surety company was dismissed.
Respondent Court of Appeals affirmed the amount of the shortage and the reinstatement ordered, but modified the judgment by limiting backwages to the monthly salary of P180.00 for a period of three years, or the total sum of P6,480.00, as actual damages, P10,000.00 as moral damages, P5,000.00 as exemplary damages, P2,000.00 for attorney’s fees and expenses of litigation, and costs; all such amounts to bear legal interest from the date when the judgment in this case shall become final, until fully paid. Reinstatement was conditioned upon Sarabia’s physical fitness, who was said to be "at present old and sick," and upon presentation of a duly verified certification by a Government physician.
That Sarabia did not actually incur any shortages except for the amount of P41.85 is a factual finding that is binding upon this Court in the absence of established exceptions. Considering the error in the shortage, we agree that petitioner need not have terminated his services. He is thus entitled to reinstatement and backwages 2 in the total sum of P6,480.00.
The fact that reinstatement and additional damages were prayed for only in an Amended Answer filed approximately six years after the original Answer does not bar it on grounds of prescription and laches. The original Answer had already alleged termination of services on account of shortage of collections, which shortage Sarabia disputed and was, in effect, an allegation that termination was without cause. The reinstatement prayed for merely supplemented and amplified the fact of termination. An amendment which merely supplements and amplifies the facts originally alleged relates back to the date of the commencement of the action and is not barred by the statute of limitations the period of which expires after service of the original complaint but before service of amendment. 3
The award of moral damages is uncalled for. In filing the present case, petitioner had not acted with malice, fraud, or in bad faith. It relied solely on the letter of the accounting firm of Sycip, Gorres & Velayo. However, such reliance was misplaced, for, as found by the Court of Appeals, that letter was "only a brief letter mentioning some summarized findings which are unverified and undetailed. It even stressed the fact that there are unascertained differences ‘due to unavailable records and/or customer’s credit balances due to overpayment’."cralaw virtua1aw library
Neither are exemplary damages proper. Petitioner had not acted in a "wanton, fraudulent, reckless, oppressive or malevolent manner." 4 Based on the accounting findings, incomplete though they may have been, petitioner cannot be blamed for trying to protect itself.
The grant of attorney’s fees and expenses of litigation of P2,000.00 is, we find, just and equitable.
ACCORDINGLY, the judgment under review is hereby modified by the elimination of the award of moral damages and exemplary damages; but affirmed as to: a) the order to reinstate Florentino Sarabia, subject to his physical fitness; b) the award of actual damages of P6,480.00, the same to bear interest at the legal rate from the time that this judgment becomes final and until fully paid; and c) the grant of counsel fees and litis expenses of P2,000.00.
Florentino Sarabia shall reimburse petitioner the amount of P41.85, with interest at the legal rate from the time this judgment becomes final and until fully paid.
Costs against petitioner.
SO ORDERED.
Teehankee (Chairman), Plana, Vasquez, Relova and Gutierrez, Jr., JJ., concur.
Endnotes:
1. Per Nestor D. Alampay, J., ponente, concurred in by Isidro C. Borromeo and Vicente V. Mendoza, JJs.
2. Samuel Pepito v. Secretary of Labor, Et Al., 96 SCRA 454 (1980).
3. Barbosa, Et Al., v. Mallari, Et Al., 99 Phil. 799 (1956), citing Moran, Rules of Court, Vol. 1, p. 384 (1952) ed.
4. Art. 2232, Civil Code.
