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[ G.R. No. 138072. June 23, 1999]

VICTOR CHAN vs. COURT OF APPEALS, et al.

FIRST DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JUN 23, 1999.

G.R. No. 138072 (Victor Chan vs. Court of Appeals and S & A Gaisano, et al.)

Petitioner assails the decision of the Court of Appeals modifying the decision of the regional trial court, consequently deleting all awards for damages and attorney's fees.

The present controversy stemmed from an action for the declaration of nullity of the deed of sale and the cancellation of title issued in the name of petitioner over a parcel of lot situated in Butuan City. Also sought was the declaration of the validity of the sale of the respondent Cupin to his co-respondent, S & A Gaisano, Inc.

After trial, the regional trial court disposed:

WHEREFORE, judgment is hereby rendered:

1. DISMISSING PLAINTIFFS COMPLAINT;

2. DECLARING PLAINTIFFS, JOOINTLY AND SEVERALLY, LIABLE TO PAY DEFENDANT, VICTOR CHAN, THE FOLLOWING:

a) Two Million and Two Hundred Fifty Thousand Pesos (P2,250,000.00) as actual and compensatory damages;

b) Fifty Thousand Pesos (P50,000.00 as moral damages;

c) Fifty Thousand Pesos (P50,000.00) as exemplary damages;

d) One Hundred Thousand Pesos P100,000.00) as attorney's fees; and

e) Ten thousand Pesos (P10,000.00) as cost of the suit.

Private respondents' appeal was dismissed, but the Court of Appeals disallowed the trial court's awards of damages and attorney's fees.

Thus, the instant petition which we find unavailing.

We find no error in the Court of Appeal's ratiocination that the filing of a complaint which may later be found to be unfounded does not necessarily connote bad faith unless it be shown that there was a deliberate attempt to cause damage to the other party, which petitioner failed to prove in the case at bar. Thus, absent any finding of malice or bad faith on the part of private respondents the Court agrees with the Court of Appeals that there is no reason for the award of moral damages. Verily, the Court has ruled that moral damages can not be recovered from a person who has filed a complaint in good faith (China Banking Corporation vs. CA, 231 SCRA 472 [1994]). Bad faith cannot be presumed; it must be established by clear and convincing evidence (PAL vs. Miano, 242 SCRA 233 [1995]). There must be no premium placed on the right to litigate.

Anent the award of attorney's fees, the reason the award for the same not having been stated in the text of trial court's decision, the same must be disallowed on appeal (RCPI vs. Rodriguez, 182 SCRA 899 [1990]).

An award of attorney's fees without justification is a "conclusion without a premise, its basis being improperly left to speculation and conjecture" (Francel Realty Corporation vs. Court of Appeals, 252 SCRA 127 [1997]).

In accordance with Article 2234 of the Civil Code, absent any prayer for exemplary damages, as in the case at bar, and considering that petitioner is not entitled to moral, temperate, or compensatory damages, the trial court's award for exemplary damages was likewise improper.

As to the deletion of the award for actual and compensatory damages, in the case at bar, no specific amount was prayed for petitioner thus, the award is uncalled for and unjustified. Actual damages, if not supported by evidence on record, cannot be granted (Fuentes, Jr. vs. CA, 253 SCRA 430 [1997]).

WHEREFORE, petition is denied due course.

Very truly yours,

(Sgd.) VIRGINIA ANCHETA-SORIANO

Clerk of Court

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