Sps. Labao, Jr. v. Balagtas, Jr.

THIRD DIVISION

[G.R. No. 204756. April 21, 2014.]

SPS. CONRADO LABAO, JR. AND ERLINDA P. LABAO, ET AL., petitioners, vs. SPS. CIPRIANO I. BALAGTAS, JR., AND TERESITA DE GUIA BALAGTAS, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated April 21, 2014, which reads as follows:

"G.R. No. 204756 (Sps. Conrado Labao, Jr. and Erlinda P. Labao, et al. v. Sps. Cipriano I. Balagtas, Jr. and Teresita De Guia Balagtas) — This is a petition for review on certiorari1 under Rule 45 of the Rules of Court seeking to annul the August 31, 2012 Decision 2 and the December 7, 2012 Resolution 3 of the Court of Appeals (CA)-Cagayan de Oro, in CA-G.R. CV No. 00671-MIN, affirming with modification the July 30, 2004 Decision of the Regional Trial Court, Branch 33, Davao City (RTC), by further ordering the petitioners, spouses Conrado Labao, Jr. and Erlinda P. Labao (Labao couple), to pay P30,000.00 as exemplary damages; reducing the attorney's fees to P25,000.00; and deleting the award of compensatory damages in favor of the respondents, spouses Cipriano Balagtas, Jr. and Teresita Balagtas (Balagtas couple).

The Facts:

Respondent Teresita De Guia Balagtas (Teresita) was a sales representative of Whiteline Marketing, Inc. (Whiteline) authorized to sell and collect for and on behalf of the latter. She was considered as the top seller of the company.

On April 27, 1998, the stockholders of Whiteline agreed among themselves that (i) Whiteline shall cease to make purchases or incur additional liabilities; (ii) Whiteline's existing inventory would be sold, if not, would be used to liquidate its account payable; and (iii) the stocks-in-transit or received by Whiteline after April 27, 1998 shall be assumed by either the group led by the Labao couple or the group led by Marcelino H. Felisilda (Felisilda group), depending on the supplier-companies assigned to each group. It was also agreed that the products of the suppliers assigned to either group would be sold by the respective sales representatives using Whiteline invoices and receipts. The check payments would be in the name of Whiteline and would be deposited in its account. Then, Whiteline, through petitioner Erlinda P. Labao (Erlinda), would issue the corresponding check to either group. 4

On June 24 and 26, 1998, the Labao couple caused the publication of two (2) notices, one in the Mindanao Daily Mirror and another in Sun Star Davao, the leading newspapers in Davao City and the nearby provinces. The notices read this way: aCTADI

NOTICE TO THE PUBLIC	BEWARE
	(Teresita's picture)
WHITELINE MARKETING, INC.	Whiteline Marketing, Inc. is in the
has not authorized Teresita de Guia	process of liquidating its assets and
Balagtas to collect any amount for	liabilities. KADCO and/or
and in its behalf.	TERESITA DE GUIA
	BALAGTAS (whose picture
	appears above) is not authorized to
	collect for and in behalf of
	Whiteline Marketing, Inc.
Any transaction made by Teresita de
Guia Balagtas will not be honoured by
WHITELINE MARKETING, INC. 5
	Whiteline Marketing, Inc.
	By: PRESIDENT and
	OPERATIONS MANAGER 6

 

Feeling aggrieved, the Balagtas couple filed a complaint for damages and attorney's fees against the Labao couple 7 before the RTC. 8 The Balagtas couple alleged that their good name was tainted when the Labao couple caused the publication of the "notices to the public" which were done in bad faith to mislead the public and purposely ruin Teresita's reputation and future as a sales representative in violation of the law.

In their Answer, 9 the Labao couple countered that they published the said notices to protect the interests of Whiteline because they discovered some irregularities linking Teresita to various questionable collections of the company's receivables.

On July 30, 2004, the RTC ruled in favor of the Balagtas couple and ordered the Labao couple to pay them the following: (i) P22,831.55 as compensatory damages; (ii) P50,000.00 as moral damages; and P50,000.00 as attorney's fees. 10 The decretal portion of the said decision reads:

FOR ALL FOREGOING, the Court disposes this case as follows:

A. As against defendants NORMA QUIDATO and Mr. QUIDATO — The Court DISMISSES the complaint for want of evidence.

B. As against defendants SPOUSES CONRADO LABAO, JR. and ERLINDA LABAO — The Court renders judgment in favor of the plaintiffs and against the defendants ordering defendant SPOUSES CONRADO LABAO, JR. and ERLINDA LABAO to pay unto the plaintiffs SPOUSES CIPRIANO BALAGTAS, JR. and TERESITA BALAGTAS the following:

a) the amount of TWENTY TWO THOUSAND EIGHT HUNDRED THIRTY ONE PESOS & 55/100 (P22,831.55) as and for compensatory damages;

b) the amount of FIFTY THOUSAND PESOS (P50,000.00) as and for moral damages;

c) the sum of FIFTY THOUSAND PESOS (P50,000.00) as and for attorney's fees and

d) the cost of the suit.

SO ORDERED. 11

In so ruling, the RTC explained that: (i) the Labao couple caused the publication of the earlier mentioned notices; and (ii) the notices alluded to some irregularity or dishonesty on the part of Teresita which run contrary to Article 19 of the New Civil Code. Thus, they should be liable to her pursuant to Article 21 of the same law. TDCAIS

The Labao couple filed a motion for reconsideration, 12 but the RTC denied it in its Order, dated September 23, 2004. 13

On appeal, the CA affirmed the RTC decision but modified the award of damages. Essentially, the award for compensatory damages was deleted, but an award for exemplary damages was added. The dispositive portion of the August 31, 2012 CA decision reads:

WHEREFORE, the appealed Decision of the Regional Trial Court, Branch 33, Davao City, in Civil Case No. 26,731-98 is AFFIRMED with MODIFICATION in that appellants spouses Conrado Labao, Jr. and Erlinda Labao are further ORDERED to pay appellees spouses Cipriano Balagtas, Jr. and Teresita Balagtas, jointly and severally, the amount of P30,000.00 as exemplary damages and P25,000.00 as attorney's fees and litigation expenses, in addition to the amount of P50,000.00 as moral damages. The award of P22,831.55 as compensatory damages is deleted for lack of factual basis.

SO ORDERED.

The CA reasoned out that the Labao couple imputed some irregularity in Teresita's conduct of collecting the proceeds of her sales from Whiteline costumers. They made it appear that Teresita was committing some fraud in the conduct of her duty as a Whiteline sales representative. As such, the said notices effectively discredited Teresita's good standing in the business world where one's reputation was paramount. Thus, malice attended the publication of these notices. 14 The CA also took note of the fact that Teresita was not even afforded any opportunity to explain the supposed irregularities being imputed against her. 15

The Labao couple moved for a reconsideration, but the CA denied the motion in its December 7, 2012 Resolution.

Hence, the present petition.

In advocacy of their position, the petitioners present the following errors:

I.

In additionally awarding exemplary damages which the RTC did not include in its decision and which decision was not appealed by the respondents, the Court of Appeals has decided a question of substance not in accord with law or applicable decisions of the Honorable Court.16

II.

In granting damages on the basis of notices which were not libelous, the Court of Appeals has likewise decided a question of substance not in accord with law or applicable decisions of the Honorable Court.17

The crux of controversy in this case is whether the CA erred in awarding exemplary damages to the Balagtas couple considering that they did not appeal the trial court's judgment.

The petition on that point is meritorious.

As a rule, a party who does not appeal from the decision may not obtain any affirmative relief from the appellate court other than what he has obtained from the lower court, if any, whose decision is brought up on appeal. 18 Similarly, an appellee who is not an appellant may assign errors in his brief where his purpose is to maintain the judgment, but he cannot seek modification or reversal of the judgment or claim affirmative relief unless he has also appealed. 19 There are exceptions to this rule, such as if they involve (1) errors affecting the lower court's jurisdiction over the subject matter, (2) plain errors not specified, (3) clerical errors, 20 and (4) when strict adherence to such technical rule will impair a substantive right, such as that of an illegally dismissed employee to monetary compensation as provided by law. 21 Unfortunately, none of the exceptions are attendant in the case. cDCaTH

Article 2229 provides that exemplary damages may be imposed by way of example or correction for the public good. Nonetheless, exemplary damages are imposed not to enrich one party or impoverish another, but to serve as a deterrent against or as a negative incentive to curb socially deleterious actions. 22

From the foregoing provision, it is apparent that an award of moral damages does automatically entitle the Balagtas couple to an award of exemplary damages. Exemplary damages, in addition to moral damages, may be granted in their favor but since they did not appeal the decision of the trial court, the decision was already final and binding insofar as they were concerned. Therefore, the Balagtas couple are no longer eligible to an additional affirmative relief even though the losing party appealed the trial court's decision before the CA.

For said reason, the Court deems it proper to delete the award of exemplary damages granted by the CA in favor of the Balagtas couple.

WHEREFORE, the petition is PARTIALLY GRANTED. Accordingly, the August 31, 2012 Decision and the December 7, 2012 Resolution of the Court of Appeals (CA)-Cagayan de Oro, in CA G.R. CV No. 00671-MIN, are AFFIRMED with MODIFICATION in that the award of exemplary damages in the sum of P30,000.00 in favor of spouses Cipriano I. Balagtas, Jr. and Teresita De Guia Balagtas is DELETED.

SO ORDERED."

Very truly yours,

(SGD.) LUCITA ABJELINA SORIANODivision Clerk of Court

Footnotes

1. Rollo, pp. 56-76.

2. Id. at 73-114. Penned by Associate Justice Ma. Luisa C. Quijano Padilla, with Associate Justice Romulo V. Borja and Associate Justice Marie Christine Azcarraga-Jacob, concurring.

3. Id. at 47-49.

4. Id. at 22-23.

5. Id. at 13.

6. Id. at 15.

7. Along with co-defendants, spouses Norma Quidato and Mr. Quidato.

8. Rollo, pp. 119-126.

9. Id. at 133-140.

10. Id. at 154-164.

11. Id. at 164.

12. Id. at 165-171.

13. Id. at 172-173.

14. Id. at 37.

15. Id.

16. Id. at 66-67.

17. Id. at 69.

18. Tangalin v. Court of Appeals, 422 Phil. 358, 364 (2001); Rural Bank of Sta. Maria, Pangasinan v. Court of Appeals, 373 Phil. 27, 45 (1999).

19. Acebedo Optical Company, Inc. v. Court of Appeals, 385 Phil. 956, 976 (2000).

20. Santos v. Court of Appeals, G.R. No. 100963, April 6, 1993, 221 SCRA 42, 46.

21. St. Michael's Institute v. Santos, 422 Phil. 723, 736 (2001).

22. Country Bankers Insurance Corporation v. Lianga Bay and Community Multi-Purpose Cooperative, Inc., 425 Phil. 511, 524 (2002).