Amonoy vs. Spouses Gutierrez

The principle of damnum absque injuria does not shield a person from liability for damages when the exercise of a right, though initially lawful, is continued after the right has been suspended by a court order, particularly a temporary restraining order personally served on the party. Such continued exercise constitutes an abuse of rights under Article 19 of the Civil Code and gives rise to an obligation to repair the damage caused.

Sergio Amonoy served as counsel for Francisca Catolos, Agnes Catolos, Asuncion Pasamba, and Alfonso Fornilda in Special Proceedings No. 3103 before the CFI of Pasig, Rizal, for the settlement of the estate of the deceased Julio Cantolos, involving six parcels of land in Tanay, Rizal. Two of those lots were adjudicated to Asuncion Pasamba and Alfonso Fornilda, who executed a real estate mortgage over them in favor of Amonoy to secure his attorney's fees of ₱27,600. Angela Gutierrez, one of the respondents, was a daughter and heir of Alfonso Fornilda. The Gutierrez spouses' house stood on one of the mortgaged lots. The dispute arose from Amonoy's foreclosure of the mortgage and the subsequent demolition of respondents' house pursuant to court process, which was later set aside by the Supreme Court.

Sergio Amonoy served as counsel for several heirs in Special Proceedings No. 3103 before the CFI of Pasig, Rizal, for the settlement of the estate of the deceased Julio Cantolos, which involved six parcels of land situated in Tanay, Rizal. On January 12, 1965, the Project of Partition was approved, and two of the lots were adjudicated to Asuncion Pasamba and Alfonso Fornilda. Amonoy's attorney's fees were fixed at ₱27,600, and on January 20, 1965, Pasamba and Fornilda executed a deed of real estate mortgage over the two adjudicated lots in favor of Amonoy to secure payment of those fees. The estate was declared closed and terminated on August 6, 1969, after taxes were paid, claims settled, and properties adjudicated. Pasamba died on February 24, 1969 and Fornilda on July 2, 1969; among Fornilda's heirs was his daughter, Angela Gutierrez, one of the respondents herein. The Gutierrez spouses' house stood on one of the mortgaged lots.

Because the attorney's fees secured by the mortgage remained unpaid, Amonoy filed on January 21, 1970 a foreclosure suit (Civil Case No. 12726) before the CFI of Pasig, Rizal, against the heirs of Pasamba and Fornilda. The heirs opposed, contending that the attorney's fees were unconscionable and that the agreed sum was only ₱11,695.92. On September 28, 1972, judgment was rendered in favor of Amonoy, requiring the heirs to pay within 90 days the ₱27,600 secured by the mortgage, ₱11,880 as value of harvests, and ₱9,645 as additional attorney's fees, failing which the two lots would be sold at public auction. The heirs failed to pay. The lots were foreclosed on February 6, 1973, and the auction sale was held on March 23, 1973, where Amonoy was the highest bidder at ₱23,760. His bid was judicially confirmed on May 2, 1973. A deficiency was claimed, and another execution sale was conducted, again with Amonoy as highest bidder at ₱12,137.50.

More than a year after the judgment in Civil Case No. 12726, the heirs filed on December 19, 1973 a suit for annulment thereof (Civil Case No. 18731), which the CFI dismissed on November 7, 1977, affirmed by the Court of Appeals on July 22, 1981. Thereafter, the CFI issued a Writ of Possession on July 25, 1985, and a notice to vacate was served on August 26, 1985. On Amonoy's motion, the trial court issued orders on April 25 and May 6, 1986 directing the demolition of structures on the lots, including the Gutierrez spouses' house. Meanwhile, a petition for certiorari (G.R. No. L-72306) was filed before the Supreme Court on September 27, 1985, with Angela Gutierrez among the petitioners, seeking to enjoin the demolition. The Supreme Court issued a temporary restraining order on June 2, 1986, enjoining the demolition of the petitioners' houses.

Amonoy commenced the demolition of respondents' house on May 30, 1986, under the authority of the writ of demolition. According to respondent Angela Gutierrez's testimony, the demolition was not completed that day or the next; only a portion was destroyed initially, and the demolition continued until the middle of 1987, when Amonoy's men completed the destruction. The Certificate of Service of the Supreme Court process server confirmed that a copy of the TRO was served on Amonoy himself on June 4, 1986. Amonoy claimed the demolition was completed the day after it commenced and had ceased before he received notice of the TRO, but the appellate court found otherwise based on Gutierrez's testimony. On October 5, 1988, the Supreme Court granted the certiorari petition and ordered the lots returned to the petitioners unless conveyed to innocent third parties, but by then respondents' house had already been destroyed. Respondents filed a complaint for damages before the RTC on December 15, 1989; the RTC dismissed the suit on January 27, 1993, but the Court of Appeals reversed and ordered Amonoy to pay ₱250,000 as actual damages.

• Damnum Absque Injuria: Petitioner argued that he was not liable for the demolition of respondents' house because he was merely acting in accordance with the Writ of Demolition ordered by the RTC, and that any damage resulting from the legitimate exercise of his rights constituted damnum absque injuria for which the law provides no remedy.
• Timing of Demolition: Petitioner claimed that the demolition commenced on May 30, 1986 and was completed the following day, and that the demolitions had already ceased when he received notice of the TRO.

• Liability for Damages: Whether the Court of Appeals was correct in holding petitioner liable to respondents for damages arising from the demolition of their house.

• Liability for Damages: Yes. The Court of Appeals was correct in ordering petitioner to pay ₱250,000 as actual damages, because the continued demolition of respondents' house after receipt of the Supreme Court's TRO constituted an abuse of rights under Article 19 of the Civil Code and an unlawful exercise of a right that had been suspended by judicial order, rendering the defense of damnum absque injuria inapplicable.

• Liability for Damages: The maxim damnum absque injuria applies only where damage results from the legitimate exercise of a person's rights; it affords no protection when the exercise of a right is abused or when the right has been suspended or extinguished by court order. Petitioner's demolition of respondents' house was initially lawful, having been undertaken under a writ of demolition issued by the RTC. However, the Supreme Court issued a TRO on June 2, 1986, enjoining the demolition, and a copy was personally served on petitioner on June 4, 1986, as confirmed by the Certificate of Service of the Supreme Court process server. Despite receipt of the TRO, petitioner continued the demolition until mid-1987, as established by respondent Angela Gutierrez's testimony that only a portion was destroyed on May 30, 1986 and that the demolition was completed by Amonoy's men around the middle of 1987. This testimony disproved petitioner's claim that the demolition was completed the day after it commenced and had ceased before the TRO was served. The continuation of the demolition after the TRO amounted to an insidious abuse of his right, tainted with bad faith, and constituted an invalid exercise of a right that had been suspended. Under Article 19 of the Civil Code, one must act with justice, give everyone his due, and observe honesty and good faith in the exercise of rights and the performance of duties; violation of these norms resulting in damage to another constitutes a legal wrong. Petitioner's liability was ultimately premised on the obligation to repair damage caused to another by one's act or omission, whether done intentionally or negligently.

• Damnum Absque Injuria — Damage resulting from the legitimate exercise of a person's rights is a loss without injury for which the law gives no remedy. The principle applies only to the valid exercise of a right; anything less or beyond such exercise will not give rise to the legal protection the principle accords. When damage to another is occasioned by abuse of right or by exercise of a right that has been suspended or extinguished by court order, liability attaches. In this case, the doctrine was held inapplicable because petitioner continued the demolition after receiving a TRO from the Supreme Court, converting an initially lawful act into an abuse and unlawful exercise of a suspended right.

• Abuse of Rights (Article 19, Civil Code) — Article 19 sets standards to be observed in the exercise of one's rights and the performance of one's duties: to act with justice, to give everyone his due, and to observe honesty and good faith. When these norms are violated and damage results to another, a legal wrong is committed for which the wrongdoer must be held responsible. The Court applied this principle to hold petitioner liable, as his insistence on completing the demolition despite the TRO constituted a wanton violation of the Supreme Court's order and a witting destruction of respondents' house.

• "Damnum absque injuria finds no application to this case." — This sentence marks the Court's rejection of petitioner's primary defense, signaling that the legitimate exercise of a right ceases to be protected when continued in defiance of a court order.

• "Although the acts of petitioner may have been legally justified at the outset, their continuation after the issuance of the TRO amounted to an insidious abuse of his right. Indubitably, his actions were tainted with bad faith." — This passage articulates the ratio decidendi: initially lawful acts become actionable when persisted in after the right underlying them has been suspended by judicial process.

• "Obviously, petitioner cannot invoke damnum absque injuria, a principle premised on the valid exercise of a right. Anything less or beyond such exercise will not give rise to the legal protection that the principle accords." — This formulation defines the outer boundary of the damnum absque injuria doctrine, clarifying that it protects only the valid exercise of rights and nothing beyond.

• Albenson Enterprises Corp. vs. CA, 217 SCRA 16 (1993) — Followed. The Court relied on this case for its discussion of the concept of abuse of rights under Article 19 of the Civil Code, quoting its formulation of the standards that must be observed in the exercise of one's rights and the performance of one's duties.

• Custodio vs. Court of Appeals, 253 SCRA 483 (1996) — Cited as authority for the settled maxim that damage resulting from the legitimate exercise of a person's rights is damnum absque injuria for which the law gives no remedy.

• Globe Mackay Cable and Radio Corp. vs. Court of Appeals, 176 SCRA 778 (1989) — Cited in support of the proposition that damnum absque injuria is premised on the valid exercise of a right.

• Occena vs. Icamina, 181 SCRA 328 (1990) — Cited as authority for the principle that liability is premised on the obligation to repair or make whole the damage caused to another by reason of one's act or omission, whether done intentionally or negligently and whether or not punishable by law.

• Article 19, Civil Code of the Philippines — Sets forth the principle of abuse of rights, requiring every person to act with justice, give everyone his due, and observe honesty and good faith in the exercise of rights and the performance of duties. Applied to hold petitioner liable for continuing the demolition after receipt of the TRO, as his actions violated these standards and caused damage to respondents.

• Article 20, Civil Code of the Philippines (implied through the discussion of liability for damage caused by act or omission) — Underlies the Court's statement that petitioner's liability is premised on the obligation to repair damage caused to another by one's act or omission, whether intentional or negligent.

Melo, Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ., concurred.