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SPS. GREGORIO v. NGO YET TE

FACTS:

Spouses Gregorio and Josefa Yu bought detergent soap from Ngo Yet Te and issued postdated checks as payment, but the checks were dishonored. Te sued Spouses Yu for collection of sum of money and damages, alleging fraud and intent to defraud creditors. The RTC issued an order of attachment and properties were levied and attached by Sheriff Alimurung. Spouses Yu filed an answer with counterclaim and an urgent motion to dissolve the writ of attachment. The RTC discharged some properties but maintained custody of a parcel of land and a passenger bus. Spouses Yu filed a motion for reconsideration, which was denied. They then went to the CA and the RTC lifted the order of attachment on their remaining properties. However, the RTC rendered a decision in favor of Te ordering Spouses Yu to pay her.

Spouses Yu filed a motion for reconsideration, questioning the disposition of their counterclaim, which was denied by the RTC. The RTC also denied their notice of appeal and granted two motions filed by Te. Spouses Yu filed a petition before the CA, which granted their petition and modified the RTC decision. Spouses Yu appealed, only questioning the RTC's refusal to rule on their counterclaim for damages. The CA affirmed the RTC decision, stating that Spouses Yu failed to present sufficient evidence to support their claim. Their motion for reconsideration was denied by the CA. They then filed a petition before the Supreme Court, raising issues of alleged bad faith in procuring the writ of attachment and the failure of the CA to award damages.

ISSUES:

  1. Whether the appellate court erred in not holding that the writ of attachment was procured in bad faith, after it was established by final judgment that there was no true ground therefor.

  2. Whether the appellate court erred in refusing to award actual, moral and exemplary damages after it was established by final judgment that the writ of attachment was procured with no true ground for its issuance.

  3. Whether Spouses Yu presented sufficient evidence to support their counterclaim for actual damages.

  4. Whether Spouses Yu are entitled to temperate or moderate damages.

  5. Whether Spouses Yu are entitled to moral and exemplary damages.

  6. Whether or not the respondent acted with malice or bad faith in applying for the attachment writ.

  7. Whether or not the petitioners are entitled to actual, moral, exemplary, temperate damages, and attorney's fees.

RULING:

  1. The Court held that the wrongful nature of the attachment does not automatically warrant the award of damages to the attachment defendant. The attachment defendant must first prove the actual loss or injury suffered and the amount thereof with the best evidence obtainable. The evidence must be capable of proof and be actually proved with a reasonable degree of certainty. In particular, if the claim for actual damages covers unrealized profits, the amount of unrealized profits must be established and supported by independent evidence. In this case, the Court found that the counterclaimants failed to present sufficient evidence to prove their entitlement to damages. Thus, the appellate court did not err in refusing to award damages.

  2. The Court of Appeals (CA) ruled that Spouses Yu failed to present sufficient evidence to support their counterclaim for actual damages. The CA found that there was no clear and appreciable explanation on the supposed lost profits, and the evidence presented was speculative and conjectural.

  3. Despite the lack of sufficient evidence for actual damages, the Supreme Court recognized that Spouses Yu suffered some form of pecuniary loss when their properties were wrongfully seized. Thus, the Court awarded temperate or moderate damages in the amount of P50,000.00.

  4. To merit an award of moral and exemplary damages, it must be shown that the wrongful attachment was obtained with malice or bad faith. In this case, the Supreme Court found that Spouses Yu failed to prove that malice attended the issuance of the attachment bond. Therefore, they are not entitled to moral and exemplary damages.

  5. The respondent did not act with malice or bad faith in applying for the attachment writ.

  6. The petitioners are entitled to temperate damages and attorney's fees but not actual, moral, and exemplary damages.

PRINCIPLES:

  • The wrongful nature of the attachment does not automatically warrant the award of damages to the attachment defendant. The attachment defendant must first prove the actual loss or injury suffered and the amount thereof with the best evidence obtainable. (Javellana v. D.O. Plaza Enterprises, Inc.)

  • If the wrongful attachment is alleged and established to be not merely wrongful but also malicious, the attachment defendant may recover moral damages and exemplary damages. (Lazatin v. Twaño)

  • The amount of damages, particularly unrealized profits, must be measurable based on specific facts and supported by independent evidence. (Case-specific principle)

  • Actual damages must be proven with competent evidence and should not be speculative or conjectural.

  • In the absence of sufficient proof of actual damages, temperate or moderate damages may be awarded as an estimation of the loss.

  • To merit an award of moral and exemplary damages, it must be shown that the wrongful act was done with malice or bad faith.

  • The absence of malice or bad faith in applying for an attachment writ excuses the applicant from liability for damages.

  • Attorney's fees may be granted even when moral and exemplary damages are not awarded, especially when a party incurred expenses to lift a wrongfully issued writ of attachment.