WHEREFORE, judgment is rendered dismissing this case insofar as the spouses Moises Andrada and Clemencia Andrada, Jose Andrada, Sr. and BA Finance Corporation, now accordingly BA Savings Bank, including the counterclaims.
SO ORDERED.
WHEREFORE, the judgment appealed from is AFFIRMED with the modification that the sale of the Hino truck by defendant Jose Andrada, Jr. in favor of defendant-appellant Moises Andrada is declared valid, subject to the rights of BA Finance as mortgagee and highest bidder.
SO ORDERED.
- Whether or not Pilhino should be held liable for the damages the petitioners sustained from Pilhino's levy on execution upon the Hino truck under Civil Case No. 20,489-90; and
- Whether or not Pilhino was guilty of bad faith when it proceeded with the levy on execution upon the Hino truck owned by Moises Andrada.
Section 1. Filing of petition with Supreme Court. ” A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth. (1a, 2a)8
(a) When the findings are grounded entirely on speculation, surmises, or conjectures;
(b) When the inference made is manifestly mistaken, absurd, or impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of facts;
(e) When the findings of facts are conflicting;
(f) When in making its findings the CA went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee;
(g) When the CA's findings are contrary to those by the trial court;
(h) When the findings are conclusions without citation of specific evidence on which they are based;
(i) When the facts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent;
(j) When the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or
(k) When the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.
However, the circumstances of this case do not warrant reversing or modifying the findings of the CA, which are consistent with the established facts. Verily, the petitioners did not prove the concurrence of the elements of abuse of rights.
The petitioners further seek attorney's fees based on Article 2208 (4) of the Civil Code, which provides that "in the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except xxx (4) in cases of clearly unfounded civil action or proceeding against the plaintiff xxx."
The petitioners are not entitled to attorney's fees.
It is well accepted in this jurisdiction that no premium should be placed on the right to litigate and that not every winning party is entitled to an automatic grant of attorney's fees.10 Indeed, before the effectivity of the new Civil Code, such fees could not be recovered in the absence of a stipulation.11 It was only with the advent of the new Civil Code that the right to collect attorney's fees in the instances mentioned in Article 2208 was recognized,12 and such fees are now included in the concept of actual damages.13 One such instance is where the defendant is guilty of gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim.14 This is a corollary of the general principle expressed in Article 19 of the Civil Code that everyone must, in the performance of his duties, observe honesty and good faith and the rule embodied in Article 1170 that anyone guilty of fraud (bad faith) in the performance of his obligation shall be liable for damages.
But, as noted by the Court in Morales v. Court of Appeals,15 the award of attorney's fees is the exception rather than the rule. The power of a court to award attorney's fees under Article 2208 of the Civil Code demands factual, legal, and equitable justification; its basis cannot be left to speculation and conjecture.16 The general rule is that attorney's fees cannot be recovered as part of damages because of the policy that no premium should be placed on the right to litigate.17
Herein, the element of bad faith on the part of Pilhino in commencing and prosecuting Civil Case No. 21,898-93, which was necessary to predicate the lawful grant of attorney's fees based on Article 2208 (4) of the Civil Code, was not established. Accordingly, the petitioners' demand for attorney's fees must fail.
WHEREFORE, we deny the petition for review on certiorari for its lack of merit, and affirm the decision of the Court of Appeals.
SO ORDERED.
Brion, (Acting Chairperson),* Bersamin, Abad,** Villarama, Jr., and Sereno, JJ., concur.
Endnotes:
* Acting Chairperson in lieu of Justice Conchita Carpio Morales who is on leave per Special Order No. 925 dated January 24, 2011.
** Additional member per Special Order No. 926 dated January 24, 2011.
1 Rollo,/i> pp. 32-40.
2 Id., pp. 71-81; penned by Associate Justice Ruben T. Reyes (later Presiding Justice and a Member of the Court, but already retired), and concurred in by Associate Justice Renato C. Dacudao (retired) and Associate Justice Mariano C. Del Castillo (now a Member of the Court).
3 Id., pp. 14-15.
4 Albenson Enterprises Corp. v. Court of Appeals, G.R. No.88694, January 11, 1993, 217 SCRA 16, 25.
5 Rollo, p. 80.
6 Ibid.
7 Id., pp. 37-38. The RTC said:
The evidence adduced by the plaintiff is convincing that the DEED OF SALE OF A MOTOR VEHICLE (Exh. "K") executed by Jose Andrada, Jr. in favor of his brother Moises was simulated to put it beyond the reach of his creditors, especially the plaintiff, considering that the purported consideration for the Hino truck was only P50,000.00; and that only three days after the purported sale, Moises Andrada was able to secure a loan from the BA Finance in the amount of P235,632.00 by giving the Hino truck as collateral; and that thereafter, Jose Andrada, Jr. continued to operate the Hino truck in hauling for Dole Philippines. This finding by this Court is notwithstanding the Special Power of Attorney executed by Moises Andrada in favor of Jose Andrada, Jr. and the former's explanation about his not having yet an approved franchise from the LTFRB. It is hard to believe that, after selling the Hino truck to Moises for only P50,000.00 even when it was being utilized in his hauling business with Dole Philippines, Jose Andrada, Jr. would agree to continue to operate it in that same business for the benefit of Moises Andrada, the buyer! Why did he sell it to him for P50,000.00 only in the first place?
8 The rule, which has been amended by A.M. No. 07-7-12-SC, effective December 27, 2007, now reads:
Section 1. Filing of petition with Supreme Court. --A party desiring to appeal by certiorari from a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts, whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition may include an application for a writ of preliminary injunction or other provisional remedies and shall raise only questions of law, which must be distinctly set forth. The petitioner may seek the same provisional remedies by verified motion filed in the same action or proceeding at any time during its pendency.
9 Sampayan v. Court of Appeals, G.R. No. 156360, January 14, 2005, 448 SCRA 220; Insular Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850, April 28, 2004, 428 SCRA 79; Langkaan Realty Development, Inc. v. United Coconut Planters Bank, G.R. No. 139437, December 8, 2000, 347 SCRA 542, 549; Nokom v. National Labor Relations Commission, G.R. No. 140043, July 18, 2000, 336 SCRA 97; Commissioner of Internal Revenue v. Embroidery and Garments Industries (Phil.), Inc., G.R. No. 96262, March 22, 1999, 305 SCRA 70; Sta. Maria v. Court of Appeals, G.R. No. 127549, January 28, 1998, 285 SCRA 351.
10 Tanay Recreation Center and Development Corporation v. Fausto, G.R. No. 140182. April 12, 2005, 455 SCRA 436 ; Firestone Tire & Rubber Co. of the Phils. v. Ines Chaves & Co., Ltd., G.R. No. L-17106, October 19, 1966, 18 SCRA 356, 358; Heirs of Basilia Justiva v. Gustilo, L-16396, January 31, 1963, 7 SCRA 72.
11 Firestone Tire & Rubber Co. of the Phils. v. Ines Chaves & Co., Ltd., supra.
12 See Reyes v. Yatco, 100 Phil. 964 (1957); Tan Ti v. Alvear, 26 Phil. 566 (1914); Castueras v. Bayona, 106 Phil. 340.
13 Fores v. Miranda, 105 Phil. 266 (1959).
14 Article 2208 (5), Civil Code.
15 G. R. No. 117228, June 19, 1997; 274 SCRA 282, 309.
16 Citing Scott Consultants & Resource Development Corporation v. Court of Appeals, G.R. No. 112911, March 16, 1995, 242 SCRA 393, 406.
17 Citing Firestone Tire & Rubber Co. of the Phils. v. Ines Chaves & Co., Ltd., G.R. No. L-17106, October 19, 1966, 18 SCRA 356, 358; Philippine Air Lines v. Miano, G.R. No. 106664, March 8, 1995, 242 SCRA 235, 240.