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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
September-2001 Jurisprudence                 

  • G.R. No. 137538 September 3, 2001 - OFFICE OF THE OMBUDSMAN v. HON. FRANCISCO B. IBAY

  • A.M. No. MTJ-00-1249 September 4, 2001 - PHIL. GERIATRICS FOUNDATION, ET AL. v. LYDIA QUERUBIN LAYOSA

  • A.M. No. P-00-1373 September 4, 2001 - ELIZABETH A. TIONGCO v. ROGELIO S. MOLINA, ET AL.

  • A.M. No. P-01-1501 September 4, 2001 - JOSEPHINE D. SARMIENTO v. ALBERT S. SALAMAT

  • A.M. No. P-01-1502 September 4, 2001 - CRESENCIO N. BONGALOS v. JOSE R. MONUNGOLH and VICTORIA D. JAMITO

  • A.M. No. P-99-1357 September 4, 2001 - SHERWIN M. BALOLOY v. JOSE B. FLORES

  • A.M. No. RTJ-01-1651 September 4, 2001 - PROSECUTOR LEO C. TABAO v. JUDGE FRISCO T. LILAGAN

  • G.R. No. 125359 September 4, 2001 - ROBERTO S. BENEDICTO and HECTOR T. RIVERA v. THE COURT OF APPEALS

  • G.R. No. 126859 September 4, 2001 - YOUSEF AL-GHOUL, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 127181 September 4, 2001 - LAND BANK OF THE PHIL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 132709 September 4, 2001 - CAMILO L. SABIO, ET AL. v. INTERNATIONAL CORPORATE BANK, ET AL.

  • G.R. No. 134490 September 4, 2001 - PEOPLE OF THE PHILIPPINES v. JOEL BRAGAT

  • G.R. Nos. 135356-58 September 4, 2001 - PEOPLE OF THE PHIL. v. MELECIO SAGARINO

  • G.R. No. 138923 September 4, 2001 - PEOPLE OF THE PHIL. v. ANITA AYOLA, ET AL.

  • A.M. No. MTJ-01-1344 September 5, 2001 - LYDIO ARCILLA, ET AL. v. LUCIO PALAYPAYON, ET AL.

  • G.R. No. 128145 September 5, 2001 - J.C. LOPEZ & ASSOCIATES v. COMMISSION ON AUDIT, ET AL.

  • G.R. No. 133886 September 5, 2001 - PEOPLE OF THE PHILIPPINES v. OSCAR PARBA

  • G.R. No. 134101 September 5, 2001 - PEOPLE OF THE PHIL. v. FELINO O. LLANITA

  • G.R. No. 136054 September 5, 2001 - SEVERINA SAN MIGUEL v. COURT OF APPEALS, ET AL.

  • G.R. No. 132714 September 6, 2001 - PEOPLE OF THE PHIL. v. RENATO LALINGJAMAN

  • G.R. Nos. 139064-66 September 6, 2001 - PEOPLE OF THE PHIL. v. ALBERTO ARCE

  • G.R. No. 140529 September 6, 2001 - JOSE P. LOPEZ v. OFFICE OF THE OMBUDSMAN, ET AL.

  • G.R. No. 141400 September 6, 2001 - PEOPLE OF THE PHIL. v. EVANGELINE GANENAS

  • Admin. Case. No. 4863 September 7, 2001 - URBAN BANK v. ATTY. MAGDALENO M. PEÑA

  • G.R. No. 114858-59 September 7, 2001 - COLUMBUS PHILIPPINES BUS CORPORATION v. NATIONAL LABOR RELATIONS COMMISSION

  • G.R. No. 126352 September 7, 2001 - GSIS v. COURT OF APPEALS, ET AL.

  • G.R. No. 127261 September 7, 2001 - VISAYAN SURETY & INSURANCE CORPORATION v. COURT OF APPEALS, ET AL.

  • G.R. No. 129644 September 7, 2001 - CHINA BANKING CORP. v. COURT OF APPEALS, ET AL.

  • G.R. No. 131805 September 7, 2001 - PEOPLE OF THE PHIL. v. GREGORIO HERMOSA, ET AL.

  • G.R. No. 132064 September 7, 2001 - PEOPLE OF THE PHIL. v. ISAGANI BAYENG, ET AL.

  • G.R. No. 132320 September 7, 2001 - PEOPLE OF THE PHIL. v. CONRADO OJERIO

  • G.R. Nos. 135402-03 September 7, 2001 - PEOPLE OF THE PHIL. v. IAN GONZAGA

  • G.R. No. 136779 September 7, 2001 - PEOPLE OF THE PHIL. v. ARNEL ASUNCION

  • G.R. No. 142065 September 7, 2001 - LENIDO LUMANOG v. HON. JAIME N. SALAZAR

  • G.R. No. 142875 September 7, 2001 - EDGAR AGUSTILO v. COURT OF APPEALS, ET AL.

  • G.R. No. 144877 September 7, 2001 - DEVELOPMENT BANK OF THE PHIL. v. VERONICA AGUIRRE, ET AL.

  • A.M. No. P-01-1506 September 10, 2001 - GEORGE S. BICBIC v. DHALIA E. BORROMEO

  • G.R. Nos. 104769 & 135016 September 10, 2001 - AFP MUTUAL BENEFIT ASSO. v. COURT OF APPEALS, ET AL.

  • G.R. No. 118943 September 10, 2001 - MARIO HORNALES v. NLRC, ET AL.

  • G.R. No. 130362 September 10, 2001 - INT’L FLAVORS & FRAGRANCES (PHIL.) v. MERLIN J. ARGOS, ET AL.

  • G.R. No. 138485 September 10, 2001 - DR. v. COMMISSIONER OF INTERNAL REVENUE

  • G.R. No. 141970 September 10, 2001 - METROPOLITAN BANK v. FLORO T. ALEJO

  • G.R. No. 145588 September 10, 2001 - ESPERIDION LOPEZ, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 140398 September 11, 2001 - FRANCISCO DELA MERCED, ET AL. v. GSIS, ET AL.

  • G.R. No. 121877 September 12, 2001 - PEOPLE OF THE PHIL v. ERLINDA GONZALES

  • G.R. Nos. 138431-36 September 12, 2001 - PEOPLE OF THE PHIL. v. DIOSCORA M. ARABIA, ET AL.

  • G.R. No. 140903 September 12, 2001 - HENRY SY v. COMMISSION ON SETTLEMENT OF LAND PROBLEMS, ET AL.

  • A.M. No. 00-1-4-03-SC September 13, 2001 - RE: REQUEST FOR LIVE RADIO-TV COVERAGE OF THE TRIAL IN THE SANDIGANBAYAN OF THE PLUNDER CASES AGAINST FORMER PRESIDENT JOSEPH E. ESTRADA v. JOSEPH E. ESTRADA and INTEGRATED BAR OF THE PHILIPPINES

  • A.M. No. 00-4-188-RTC September 13, 2001 - REQUEST OF MR. OSCAR T. LLAMAS FOR RE-ASSIGNMENT OSCAR T. LLAMAS v. EMMANUEL LACANDOLA AND ET. AL.

  • G.R. No. 120009 September 13, 2001 - DOLE PHILIPPINES v. NATIONAL LABOR RELATIONS COMMISSION

  • G.R. No. 122095 September 13, 2001 - PEOPLE OF THE PHILIPPINES v. DOMINGO DAWISAN

  • G.R. No. 127913 September 13, 2001 - RCBC v. METRO CONTAINER CORP.

  • G.R. No. 132354 September 13, 2001 - PEOPLE OF THE PHIL. v. DEOMEDES IGLESIA

  • G.R. Nos. 136840-42 September 13, 2001 - PEOPLE OF THE PHIL. v. ROMEO NAVARETTE

  • G.R. No. 137250-51 September 13, 2001 - PABLO MARGAREJO v. HON. ADELARDO ESCOSES

  • G.R. No. 138972-73 September 13, 2001 - PEOPLE OF THE PHIL. v. EUGENIO B. MARQUEZ, ET AL.

  • G.R. No. 140512 September 13, 2001 - PEOPLE OF THE PHIL. v. PETER PELERAS, ET AL.

  • G.R. No. 142043 September 13, 2001 - PEOPLE OF THE PHIL. v. NELSON BITUON

  • G.R. No. 142430 September 13, 2001 - PEOPLE OF THE PHIL. v. RONNIE QUINICIO, ET AL.

  • G.R. No. 142444 September 13, 2001 - OFELIA D. ARTUZ v. COURT OF APPEALS, ET AL.

  • G.R. No. 142649 September 13, 2001 - ANTONIO C. SAN LUIS v. COURT OF APPEALS

  • G.R. No. 143702 September 13, 2001 - PEOPLE OF THE PHIL. v. ZALDY MENDOZA

  • G.R. No. 129212 September 14, 2001 - PEOPLE OF THE PHILIPPINES v. MARIO LACUESTA, ET AL.

  • A.M. No. RTJ-00-1575 September 17, 2001 - ISAGANI RIZON v. JUDGE OSCAR E. ZERNA

  • A.M. No. RTJ 99-1498 September 17, 2001 - VICENTE P. LIM v. JUDGE JACINTA B. TAMBAGO, ET AL.

  • G.R. No. 111584 September 17, 2001 - PRODUCERS BANK OF THE PHILIPPINES v. COURT OF APPEALS and SPOUSES SALVADOR Y. CHUA and EMILIA U. CHUA

  • G.R. No. 135644 September 17, 2001 - GOVERNMENT SERVICE INSURANCE SYSTEM v. SPOUSES GONZALO and MATILDE LABUNG-DEANG

  • G.R. No. 135912 September 17, 2001 - ODIN SECURITY AGENCY v. SANDIGANBAYAN, ET AL.

  • G.R. No. 138219 September 17, 2001 - GERARDO V. TAMBAOAN, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 138943-44 September 17, 2001 - PEOPLE OF THE PHIL. v. HENRY ALMAZAN

  • G.R. No. 141209 September 17, 2001 - ANTONIA HUFANA, ET AL. v. WILLIAM ONG GENATO

  • A. C. No. 5043 September 19, 2001 - ABEDIN L. OSOP v. ATTY. V. EMMANUEL C. FONTANILLA

  • G.R. No. 135936 September 19, 2001 - THE PEOPLE OF THE PHILIPPINES v. GUALBERTO MIRADOR alias "GOLING"

  • G.R. No. 144400 September 19, 2001 - DOMINGO O. IGNACIO v. COCA-COLA BOTTLERS PHILS.

  • A.M. No. MTJ-01-1369 September 20, 2001 - GUILLERMA D. CABAÑERO v. JUDGE ANTONIO K. CAÑON

  • A.M. No. MTJ-01-1371 September 20, 2001 - ATTY. NESCITO C. HILARIO v. JUDGE ROMEO A. QUILANTANG

  • A.M. No. RTJ-99-1472 September 20, 2001 - SPOUSES HERMINIO, ET Al. v. HON. DEMETRIO D. CALIMAG

  • A.M. No. P-01-1483 September 20, 2001 - EDNA FE F. AQUINO v. ISABELO LAVADIA

  • G.R. No. 116938 September 20, 2001 - LEONILA GARCIA-RUEDA v. REMEDIOS A. AMOR, ET AL.

  • G.R. No. 127405 September 20, 2001 - MARJORIE TOCAO and WILLIAM T. BELO v. COURT OF APPEALS and NENITA A. ANAY

  • G.R. No. 130399 September 20, 2001 - PUBLIC UTILITIES DEPARTMENT v. HON. TEOFISTO T. GUINGONA

  • G.R. Nos. 135068-72 September 20, 2001 - PEOPLE OF THE PHIL. v. MAXIMO RAMOS

  • G.R. No. 137674 September 20, 2001 - WILLIAM GO KIM HUY v. SANTIAGO GO KIM HUY, ET AL.

  • G.R. No. 139410 September 20, 2001 - PEOPLE OF THE PHILIPPINES v. SILVERIO AGUERO

  • G.R. No. 140898 September 20, 2001 - THE PEOPLE OF THE PHILIPPINES v. JOSE ISHIKAWA AMBA

  • A.M. No. P-99-1289 September 21, 2001 - JUDGE NAPOLEON S. DIAMANTE v. ANTHONY A. ALAMBRA

  • G.R. Nos. 119609-10 September 21, 2001 - PCGG v. HONORABLE SANDIGANBAYAN (Third Division), ET AL.

  • G.R. No. 128876 September 21, 2001 - PEOPLE OF THE PHILIPPINES v. MANOLITO FELIZAR y CAPULI

  • G.R. No. 132384 September 21, 2001 - PEOPLE OF THE PHILIPPINES v. MARLON GADIA

  • G.R. No. 134596 September 21, 2001 - RAYMUND ARDONIO v. THE PEOPLE OF THE PHILIPPINES

  • G.R. No. 142889 September 21, 2001 - EXECUTIVE LABOR ARBITER RICARDO N. OLAIREZ v. OMBUDSMAN ANIANO A. DESIERTO

  • G.R. No. 145416 September 21, 2001 - GOLDEN HORIZON REALTY CORPORATION v. SY CHUAN

  • A.M. No. 99-6-79-MTC September 24, 2001 - REPORT ON THE JUDICIAL AUDIT CONDUCTED IN THE MUNICIPAL TRIAL COURT

  • A.M. No. P-01-1512 September 24, 2001 - TERESITA H. ZIPAGAN v. JOVENCIO N. TATTAO

  • G.R. Nos. 132442-44 September 24, 2001 - PEOPLE OF THE PHILIPPINES v. BERNARDINO ARANZADO

  • G.R. Nos. 135524-25 September 24, 2001 - PEOPLE OF THE PHILIPPINES v. MANOLITO AGUSTIN

  • G.R. No. 141897 September 24, 2001 - METRO CONSTRUCTION v. CHATHAM PROPERTIES

  • G.R. No. 144404 September 24, 2001 - PEOPLE OF THE PHILIPPINES v. LEODEGARIO BASCUGUIN Y AGQUIZ

  • G.R. Nos. 127759-60 September 25, 2001 - PEOPLE OF THE PHIL. v. PO3 NOEL FELICIANO

  • G.R. Nos. 134527-28 September 25, 2001 - PEOPLE OF THE PHILIPPINES v. SERAPIO REY alias APIONG

  • G.R. Nos. 136867-68 September 25, 2001 - PEOPLE OF THE PHILIPPINES v. RODRIGO GALVEZ y JEREZ

  • G.R. No. 137612 September 25, 2001 - PEOPLE OF THE PHILIPPINES v. FRANCISCO ANTINERO BERIARMENTE

  • A.C. No. 4497 September 26, 2001 - MR. and MRS. VENUSTIANO G. SABURNIDO v. ATTY. FLORANTE E. MADROÑO

  • A.C. No. 4990 September 26, 2001 - ELENA ZARATE-BUSTAMANTE and LEONORA SAVET CATABIAN v. ATTY. FLORENTINO G. LIBATIQUE

  • G.R. No. 122824 September 26, 2001 - AURORA F. IGNACIO v. VALERIANO BASILIO,

  • G.R. No. 123058 September 26, 2001 - PEOPLE OF THE PHIL. v. ALFREDO NAPUD, JR.

  • G.R. No. 129107 September 26, 2001 - ALFONSO L. IRINGAN v. HON. COURT OF APPEALS , ET AL.

  • G.R. Nos. 129530-31 September 26, 2001 - PEOPLE OF THE PHILIPPINES v. WILFREDO OLARTE

  • G.R. Nos. 138308-10 September 26, 2001 - THE PEOPLE OF THE PHILIPPINES v. PABLO SANTOS

  • G.R. No. 142564 September 26, 2001 - PEOPLE OF THE PHILIPPINES v. HILGEM NERIO y GIGANTO

  • G.R. Nos. 143108-09 September 26, 2001 - REPUBLIC OF THE PHILIPPINES. v. COURT OF APPEALS

  • Adm. Case. No. 5505 September 27, 2001 - SEVERINO RAMOS v. ATTY. ELLIS JACOBA and ATTY. OLIVIA VELASCO JACOBA

  • G.R. No. 131864-65 September 27, 2001 - PEOPLE OF THE PHILIPPINES v. SHERJOHN ARONDAIN and JOSE PRECIOSO

  • G.R. Nos. 134963-64 September 27, 2001 - ALFREDO LONG and FELIX ALMERIA v. LYDIA BASA

  • G.R. No. 137676 September 27, 2001 - PEOPLE OF THE PHILIPPINES v. ATTY. ROBERTO DIONISIO

  • G.R. No. 144035 September 27, 2001 - PEOPLE OF THE PHIL. v. VICENTE M. BASQUEZ

  • A.M. No. P-00-1391 September 28, 2001 - LIBRADA D. TORRES v. NELSON C. CABESUELA

  • G.R. No. 122425 September 28, 2001 - FLORDELIZA H. CABUHAT v. THE HONORABLE COURT OF APPEALS

  • G.R. No. 124535 September 28, 2001 - THE RURAL BANK OF LIPA CITY, ET AL. v. HONORABLE COURT OF APPEALS, ET AL.

  • G.R. No. 125154 September 28, 2001 - DIGNA VERGEL v. COURT OF APPEALS and DOROTEA-TAMISIN GONZALES

  • G.R. No. 125442 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. FERNANDO ARELLANO y ROBLES

  • G.R. No. 127232 September 28, 2001 - GOLDENROD v. HONORABLE COURT OF APPEALS and PATHFINDER HOLDINGS (PHILIPPINES)

  • G.R. No. 127241 September 28, 2001 - LA CONSOLACION COLLEGE, ET AL. v. NLRC , ET AL.

  • G.R. No. 134128 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. GERARDO DE LAS ERAS y ZAFRA

  • G.R. No. 134928 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. FILOMENO BARNUEVO. ET AL.

  • G.R. Nos. 140789-92 September 28, 2001 - THE PEOPLE OF THE PHILIPPINES v. ALIPIO CARBONELL and DIONISIO CARBONELL

  • G.R. No. 145371 September 28, 2001 - PEOPLE OF THE PHILIPPINES v. BEN AQUINO and ROMEO AQUINO

  •  





     
     

    G.R. No. 135644   September 17, 2001 - GOVERNMENT SERVICE INSURANCE SYSTEM v. SPOUSES GONZALO and MATILDE LABUNG-DEANG

     
    PHILIPPINE SUPREME COURT DECISIONS

    FIRST DIVISION

    [G.R. No. 135644. September 17, 2001.]

    GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner, v. SPOUSES GONZALO and MATILDE LABUNG-DEANG, Respondents.

    D E C I S I O N


    PARDO, J.:


    The petitioner in the case is the Government Service Insurance System (hereafter, "GSIS"). Having lost the case in the trial court and the Court of Appeals, it now comes to this Court for redress.chanrob1es virtua1 1aw 1ibrary

    At the onset, we state that the issue is not "suability" or whether GSIS may be sued despite the doctrine of state immunity from suit, but liability, whether or not GSIS may be liable to pay damages to respondent spouses given the applicable law and the circumstances of the case. 1

    The Case


    The case is a petition 2 for review on certiorari of the decision of the Court of Appeals 3 affirming the decision of the Regional Trial Court, Angeles City 4 ordering GSIS to pay respondents Gonzalo (now deceased) 5 and Matilde Labung-Deang (hereafter, "spouses Deang") temperate damages, attorney’s fees, legal interests and costs of suit for the loss of their title to real property mortgaged to the GSIS.

    The Facts


    Sometime in December 1969, the spouses Deang obtained a housing loan from the GSIS in the amount of eight thousand five hundred pesos (P8,500.00). Under the agreement, the loan was to mature on December 23, 1979. The loan was secured by a real estate mortgage constituted over the spouses’ property covered by Transfer Certificate of Title No. 14926-R issued by the Register of Deeds of Pampanga. 6 As required by the mortgage deed, the spouses Deang deposited the owner’s duplicate copy of the title with the GSIS. 7

    On January 19, 1979, eleven (11) months before the maturity of the loan, the spouses Deang settled their debt with the GSIS 8 and requested for the release of the owner’s duplicate copy of the title since they intended to secure a loan from a private lender and use the land covered by it as collateral security for the loan of fifty thousand pesos (P50,000.00) 9 which they applied for with one Milagros Runes. 10 They would use the proceeds of the loan applied for the renovation of the spouses’ residential house and for business. 11

    However, personnel of the GSIS were not able to release the owner’s duplicate of the title as it could not be found despite diligent search. 12 As stated earlier, the spouses as mortgagors deposited the owner’s duplicate copy of the title with the GSIS located at its office in San Fernando, Pampanga. 13

    Satisfied that the owner’s duplicate copy of the title was really lost, in 1979, GSIS commenced the reconstitution proceedings with the Court of First Instance of Pampanga for the issuance of a new owner’s copy of the same. 14

    On June 22, 1979, GSIS issued a certificate of release of mortgage. 15

    On June 26, 1979, after the completion of judicial proceedings, GSIS finally secured and released the reconstituted copy of the owner’s duplicate of Transfer Certificate of Title No. 14926-R to the spouses Deang. 16chanrob1es virtua1 1aw 1ibrary

    On July 6, 1979, the spouses Deang filed with the Court of First Instance, Angeles City a complaint against GSIS for damages, claiming that as result of the delay in releasing the duplicate copy of the owner’s title, they were unable to secure a loan from Milagros Runes, the proceeds of which could have been used in defraying the estimated cost of the renovation of their residential house and which could have been invested in some profitable business undertaking. 17

    In its defense, GSIS explained that the owners’ duplicate copy of the title was released within a reasonable time since it had to conduct standard pre-audit and post-audit procedures to verify if the spouses Deang’s account had been fully settled. 18

    On July 31, 1995, the trial court rendered a decision ruling for the spouses Deang. The trial court reasoned that the loss of the owner’s duplicate copy of the title "in the possession of GSIS as security for the mortgage . . . without justifiable cause constitutes negligence on the part of the employee of GSIS who lost it," making GSIS liable for damages. 19 We quote the dispositive portion of the decision: 20

    "IN VIEW OF THE FOREGOING, the Court renders judgment ordering the GSIS:jgc:chanrobles.com.ph

    "a) To pay the plaintiffs-spouses the amount of P20,000.00 as temperate damages;

    "b) To pay plaintiffs-spouses the amount of P15,000.00 as attorney’s fees;

    "c) To pay legal interest on the award in paragraphs a) and b) from the filing of the complaint; and,

    "d) To pay cost of the suit.

    "SO ORDERED."cralaw virtua1aw library

    On August 30, 1995, GSIS appealed the decision to the Court of Appeals. 21

    On September 21, 1998, the Court of Appeals promulgated a decision affirming the appealed judgment, ruling: First, since government owned and controlled corporations (hereafter, "GOCCs") whose charters provide that they can sue and be sued have a legal personality separate and distinct from the government, GSIS is not covered by Article 2180 22 of the Civil Code, and it is liable for damages caused by their employees acting within the scope of their assigned tasks. Second, the GSIS is liable to pay a reasonable amount of damages and attorney’s fees, which the appellate court will not disturb. We quote the dispositive portion: 23chanrob1es virtua1 1aw 1ibrary

    "WHEREFORE, finding no reversible error in the appealed judgment, the same is hereby AFFIRMED.

    "SO ORDERED."cralaw virtua1aw library

    Hence, this appeal. 24

    The Issue


    Whether the GSIS, as a GOCC primarily performing governmental functions, is liable for a negligent act of its employee acting within the scope of his assigned tasks.25cralaw:red

    The Court’s Ruling


    We rule that the GSIS is liable for damages. We deny the petition for lack of merit.

    GSIS, citing the sixth paragraph of Article 2180 of the Civil Code argues that as a GOCC, it falls within the term "State" and cannot be held vicariously liable for negligence committed by its employee acting within his functions. 26

    "Article 2180. The obligation imposed by Article 2176 is demandable not only for one’s own acts or omissions, but also for those of persons for whom one is responsible.

    x       x       x


    "Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business of industry.

    "The State is responsible in like manner when it acts though a special agent, but not when the damage has been caused by the official to whom the task was done properly pertains, in which case what is provided in Article 2176 shall be applicable.

    x       x       x


    (Emphasis supplied)"

    The argument is untenable. The cited provision of the Civil Code is not applicable to the case at bar. However, the trial court and the Court of Appeals erred in citing it as the applicable law. Nonetheless, the conclusion is the same. As heretofore stated, we find that GSIS is liable for damages.

    The trial court and the Court of Appeals treated the obligation of GSIS as one springing from quasi-delict. 27 We do not agree. Article 2176 of the Civil Code defines quasi-delict as follows:chanrob1es virtua1 1aw 1ibrary

    "Whoever by act or omission causes damages to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter (Emphasis supplied)."cralaw virtua1aw library

    Under the facts, there was a pre-existing contract between the parties. GSIS and the spouses Deang had a loan agreement secured by a real estate mortgage. The duty to return the owner’s duplicate copy of title arose as soon as the mortgage was released. 28 GSIS insists that it was under no obligation to return the owner’s duplicate copy of the title immediately. This insistence is not warranted. Negligence is obvious as the owners’ duplicate copy could not be returned to the owners. Thus, the more applicable provisions of the Civil Code are:jgc:chanrobles.com.ph

    "Article 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor thereof are liable for damages."cralaw virtua1aw library

    "Article 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted . . ."cralaw virtua1aw library

    Since good faith is presumed and bad faith is a matter of fact which should be proved, 29 we shall treat GSIS as a party who defaulted in its obligation to return the owners’ duplicate copy of the title. As an obligor in good faith, GSIS is liable for all the "natural and probable consequences of the breach of the obligation." The inability of the spouses Deang to secure another loan and the damages they suffered thereby has its roots in the failure of the GSIS to return the owners’ duplicate copy of the title.

    We come now to the amount of damages. In a breach of contract, moral damages are not awarded if the defendant is not shown to have acted fraudulently or with malice or bad faith. 30 The fact that the complainant suffered economic hardship 31 or worries and mental anxiety 32 is not enough.

    There is likewise no factual basis for an award of actual damages. Actual damages to be compensable must be proven by clear evidence. 33 A court can not rely on "speculation, conjecture or guess work" as to the fact and amount of damages, but must depend on actual proof. 34

    However, it is also apparent that the spouses Deang suffered financial damage because of the loss of the owners’ duplicate copy of the title. Temperate damages may be granted.

    "Article 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the nature of the case, be proved with certainty."cralaw virtua1aw library

    GSIS submits that there must be proof of pecuniary loss. This is untenable. The rationale behind temperate damages is precisely that from the nature of the case, definite proof of pecuniary loss cannot be offered. When the court is convinced that there has been such loss, the judge is empowered to calculate moderate damages, rather than let the complainant suffer without redress from the defendant’s wrongful act. 35

    The award of twenty thousand pesos (P20,000.00) in temperate damages is reasonable considering that GSIS spent for the reconstitution of the owners’ duplicate copy of the title.

    Next, the attorney’s fees. Attorney’s fees which are granted as an item of damages are generally not recoverable. 36 The award of attorney’s fees is the exception rather than the rule and counsel’s fees are not to be awarded every time a party wins a suit. The award of attorney’s fees demands factual, legal and equitable justification; its basis cannot be left to speculation or conjecture. 37

    We find no circumstance to justify the award of attorney’s fees. We delete the same.

    The Fallo

    WHEREFORE, we DENY the petition. We AFFIRM the decision of the Court of Appeals in CA-G. R. CV No. 51240 with the MODIFICATION that award of attorney’s fees is DELETED.chanrob1es virtua1 1aw 1ibrary

    No costs.

    SO ORDERED.

    Davide, Jr., Kapunan and Ynares-Santiago, JJ., concur.

    Puno, J , on leave.

    Endnotes:



    1. Distinction discussed in Municipality of San Fernando, La Union v. Firme, 195 SCRA 692, 697 [1991].

    2. Under Rule 45, Revised Rules of Court.

    3. In CA-G. R. CV No. 51240, promulgated on September 21, 1998, Hormachuelos, J., ponente, Guerrero and Villarama, Jr., JJ., concurring.

    4. In Civil Case No. 3114, dated July 31, 1995, Judge Carlos D. Rustia, presiding.

    5. Record of the Regional Trial Court, Manifestation with Motion to Substitute Heirs as Plaintiffs, pp. 105-106, Certificate of Death, p. 107. Gonzalo Daeng died on March 12, 1984, while the case was pending with the Regional Trial Court. Gonzalo Deang was substituted by his heirs Romeo, Nicolas, Marte, Peter, Regino, Alfredo, Eduardo and July, all surnamed "Deang" (Motion to Substitute was approved by the trial court on September 26, 1984, Record of the Regional Trial Court, Order, p. 114).

    6. Plaintiff’s Exhibit, RTC Record, p. 5.

    7. Complaint, Annex "A", Mortgage Agreement, RTC Record, pp. 6-7.

    8. Complaint, Annex "B" and "C", Official Receipts, RTC Record, p. 8.

    9. TSN, June 24, 1982, p. 5.

    10. TSN, March 5, 1982, p. 17.

    11. Ibid., pp. 5-6.

    12. TSN, November 25, 1982, pp. 8-9.

    13. Ibid., pp. 12-13.

    14. Petition, Rollo, pp. 9-18, at p. 14; Petition, Annex "A", Decision, Court of Appeals, Rollo, pp. 22-28, at p. 24; Petitioner’s Memorandum, Rollo, pp. 56-66, at p. 58.

    15. Plaintiff’s Exhibits, Mortgage Release, RTC Record, p. 11.

    16. TSN, November 25, 1982, pp. 17-18.

    17. Complaint, RTC Record. pp. 1-4.

    18. Petition, Annex "A", Decision, Court of Appeals, Rollo, pp. 22-28, at p. 23.

    19. Petition, Annex "B", Decision, Regional Trial Court, Rollo, pp. 29-33, at p. 32.

    20. Ibid., p. 33.

    21. Notice of Appeal, RTC Records, p. 133.

    22. Which provides, "The State is responsible in like manner when it acts through a special agent; but not when the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be applicable."cralaw virtua1aw library

    23. Petition, Annex "A", Decision, Court of Appeals, Rollo, pp. 22-28, at p.27.

    24. Petition filed on November 12, 1998, Rollo, pp. 8-18. On June 28, 2000, the Court resolved to give due course to the petition (Rollo, p. 54).

    25. Petition, Rollo, pp. 8-18, at pp. 12-13.

    26. Petition, Rollo, pp. 8-18, at p. 14.

    27. Under the Civil Code, "Article 1157. Obligations arise from: (1) Law; (2) Contracts; (3) Quasi-Contracts; (4) Acts or omissions punished by law; and (5) Quasi-delicts."cralaw virtua1aw library

    28. TSN, November 25, 1982, p. 11.

    29. Bermudez v. Gonzales, G. R. No. 132810, December 11, 2000.

    30. Morris and Whittier v. Court of Appeals, G. R. No. 127957, February 21, 2001; Perez v. Court of Appeals, 121 Phil. 149 [1965].

    31. Perez v. Court of Appeals, 121 Phil. 149, 154 [1965].

    32. Solis & Yarisantos v. Salvador, 122 Phil. 223 [1965].

    33. Caedo v. Yu Khe Thai, 135 Phil. 399 [1968]; Abesamis v. Woodcraft Works, Ltd., 141 Phil. 71 [1959].

    34. Delfin v. Court of Agrarian Relations, 125 Phil. 989, 990-991 [1967].

    35. Necesito v. Paras, 104 Phil. 75, 85 [1958], citing Report of the Code Commission, p. 75.

    36. Article 2208, Civil Code; Philippine Air Lines v. Miano, 312 Phil. 287, 294 [1995].

    37. Morales v. Court of Appeals, 340 Phil. 397, 422 [1997], citing Scott Consultants and Resource Development Corp. Inc. v. Court of Appeals, 312 Phil. 466, 481 [1995].

    G.R. No. 135644   September 17, 2001 - GOVERNMENT SERVICE INSURANCE SYSTEM v. SPOUSES GONZALO and MATILDE LABUNG-DEANG


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