Ardiente vs. Spouses Pastorfide

A party who requests the disconnection of another's utility service without prior notice, even if the account remains in the requester's name, commits abuse of rights under Article 19 of the Civil Code and is liable for damages when the act is done with intention to harm and without observing honesty and good faith.

Joyce Ardiente and her husband owned a housing unit at Emily Homes, Balulang, Cagayan de Oro City, covered by Transfer Certificate of Title No. 69905. On June 2, 1994, she sold the unit to Ma. Theresa Pastorfide under a Memorandum of Agreement, with Pastorfide assuming the mortgage loan from the National Home Mortgage and agreeing to shoulder water and power bills effective June 1, 1994. The water connection, however, remained registered in Ardiente's name with the Cagayan de Oro Water District (COWD), whose general manager was respondent Gaspar Gonzalez, Jr.

Joyce Ardiente and her husband, Dr. Roberto S. Ardiente, owned a housing unit at Emily Homes, Balulang, Cagayan de Oro City, with a lot area of 153 square meters covered by Transfer Certificate of Title No. 69905. On June 2, 1994, Ardiente entered into a Memorandum of Agreement selling, transferring, and conveying to Ma. Theresa Pastorfide all her rights and interests in the housing unit for ₱70,000.00. The agreement stipulated that water and power bills would be for Pastorfide's account effective June 1, 1994, and Pastorfide likewise assumed payment of the mortgage loan Ardiente had secured from the National Home Mortgage.

For four years, Ma. Theresa's use of the water connection—still registered in Ardiente's name with COWD—was never questioned or disturbed. On March 12, 1999, however, without any prior notice, the Pastorfides' water connection was cut off. When Ma. Theresa proceeded to the COWD office to complain, a certain Mrs. Madjos informed her that she was delinquent for three months—December 1998, January 1999, and February 1999. Ma. Theresa countered that the due date for her payment was March 18, 1999. Mrs. Madjos later told her that the disconnection was done at the instance of Joyce Ardiente.

On March 15, 1999, Ma. Theresa paid the delinquent bills. On the same date, through her lawyer, she wrote COWD demanding an explanation as to who authorized the cutting of the water line. On March 18, 1999, COWD, through general manager Gaspar Gonzalez, Jr., replied, reiterating that the disconnection was made at Ardiente's instance. Despite payment of the arrears, COWD did not reconnect the water supply. The Pastorfides' water line was restored only when the RTC issued a writ of preliminary mandatory injunction on December 14, 1999—more than nine months after the disconnection.

Aggrieved, the Spouses Pastorfide filed a complaint for damages on April 14, 1999 against Ardiente, COWD, and Gonzalez. After trial, the RTC found that all three defendants failed to act with justice and observe honesty and good faith: COWD and Gonzalez disconnected the water supply without prior notice and were negligent in being swayed by Ardiente's prodding without investigating the present ownership of the house; Ardiente, for her part, should have requested the Pastorfides to pay before seeking disconnection and should have been more careful, knowing it was the Pastorfides who had been using the water for four years. The RTC held all three jointly and severally liable for ₱200,000 moral damages, ₱200,000 exemplary damages, and ₱50,000 attorney's fees. The CA affirmed with modification, reducing the damages to ₱100,000 each for moral and exemplary damages and ₱25,000 for attorney's fees, finding that Ardiente had a legal duty to honor the Pastorfides' possession and use of the water line under their Memorandum of Agreement and that she acted in bad faith when she applied for its disconnection.

• Improper Solidary Liability: Petitioner argued that she should not be held jointly and solidarily liable with COWD and Gonzalez for the latter's failure to serve notice prior to disconnection, because even without her request, COWD was already set to effect disconnection due to the Pastorfides' non-payment for three months.
• Contributory Negligence: Petitioner maintained that respondents were guilty of contributory negligence for failing to pay their water bills for three months and for failing to transfer the COWD account to their name, which violated their Memorandum of Agreement, and for deliberately failing to exercise the diligence of a good father of the family to minimize damage under Article 2203 of the Civil Code.
• Article 19 Applies to Respondents: Petitioner argued that respondents are likewise bound to observe Article 19 of the Civil Code—to act with justice, give everyone his due, and observe honesty and good faith.
• Improper Award of Damages: Petitioner contended that the grant of moral and exemplary damages and attorney's fees against her was erroneous.

• Procedural — Impleading Co-Defendants: Whether petitioner properly impleaded her co-defendants COWD and Gonzalez as respondents in the petition for review on certiorari.
• Reviewability of Issues: Whether the issues raised by petitioner are factual and thus not reviewable under Rule 45.
• Abuse of Rights: Whether petitioner committed abuse of rights under Article 19 of the Civil Code by requesting the disconnection of respondents' water supply without prior notice.
• Solidary Liability: Whether petitioner is jointly and solidarily liable with COWD and Gonzalez for damages.
• Contributory Negligence: Whether respondents were guilty of contributory negligence in failing to pay water bills and transfer the account to their name.
• Damages: Whether the award of moral and exemplary damages and attorney's fees against petitioner was proper.

• Procedural — Impleading Co-Defendants: No. Petitioner cannot make her co-defendants adversary parties in a petition for review on certiorari, having failed to file a cross-claim against them, which is barred under Section 2, Rule 9 of the Rules of Court; moreover, their case was already final.
• Reviewability of Issues: The issues are factual and not reviewable; findings of the RTC affirmed by the CA are binding on the Supreme Court.
• Abuse of Rights: Yes. Petitioner committed abuse of rights under Article 19 when she requested disconnection without notifying the Pastorfides, evidencing intention to harm.
• Solidary Liability: Yes. Petitioner, COWD, and Gonzalez are solidarily liable, all having acted in bad faith.
• Contributory Negligence: No. The Court did not find contributory negligence on the part of the Pastorfides.
• Damages: Yes. The awards of moral damages under Article 2219 in connection with Articles 20 and 21, exemplary damages under Article 2229, and attorney's fees under Article 2208 were proper.

• Procedural — Impleading Co-Defendants: Petitioner impleaded COWD and Gonzalez as respondents, but they were her co-defendants before the RTC and co-appellants before the CA. Under Section 2, Rule 9 of the Rules of Court, a cross-claim not set up is barred. Petitioner never filed a cross-claim against them at the trial level. Furthermore, COWD and Gonzalez's own separate petition before the Supreme Court (G.R. No. 161802) was already denied with finality on June 28, 2004, rendering the CA decision final and executory as to them. They are precluded from participating in the present petition or resurrecting their cause by filing pleadings as respondents.

• Reviewability of Issues: The main issues raised by petitioner are factual in nature. It is settled that the resolution of factual issues is the function of lower courts, whose findings are received with respect and considered binding by the Supreme Court, subject only to recognized exceptions, none of which is present. This is especially true when the RTC's findings have been affirmed by the CA, as in this case.

• Abuse of Rights: While it was within petitioner's right to ask and even require the Pastorfides to cause the transfer of her COWD account to their name pursuant to their Memorandum of Agreement, the remedy to enforce such right was not to cause the disconnection of their water supply. The exercise of a right must be in accordance with the purpose for which it was established, must not be excessive or unduly harsh, and must carry no intention to harm another. Intention to harm was evident when petitioner requested disconnection without warning or informing the Pastorfides. Had her sole intention been to compel compliance with the agreement, she should have advised the Pastorfides before or immediately after submitting her request. Her failure to do so, coupled with COWD's disconnection without prior notice and failure to reconnect despite payment, constituted abuse of rights under Article 19 and bad faith, giving rise to liability under Articles 20 and 21.

• Solidary Liability: Petitioner initiated the disconnection by her request; COWD carried it out without notice and neglected to reconnect despite payment of arrears. All three parties acted in bad faith, and the Court found no cogent reason to depart from the ruling of both the RTC and the CA that they are solidarily liable.

• Contributory Negligence: The Court did not sustain petitioner's claim of contributory negligence. The Pastorfides' payment due date was March 18, 1999, yet the disconnection occurred on March 12, 1999—before the due date. The Pastorfides paid the delinquent bills on March 15, 1999, but COWD still failed to reconnect. The Court found the petition without merit on this point.

• Damages: Moral damages were awarded under Article 2219 in connection with Articles 20 and 21 of the Civil Code, as the Pastorfides were deprived of water supply for more than nine months. Exemplary damages under Article 2229 were sustained, though reduced by the CA, to serve as a deterrent against socially deleterious actions. Attorney's fees under Article 2208 were proper, as exemplary damages were awarded and the defendants acted in gross and evident bad faith.

• Principle of Abuse of Rights (Article 19, Civil Code) — Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. A right, though by itself legal because recognized or granted by law, may nevertheless become the source of some illegality. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is committed for which the wrongdoer must be held responsible. While Article 19 lays down a rule of conduct, it does not provide a remedy for its violation; generally, an action for damages under either Article 20 or Article 21 would be proper. In this case, petitioner's request for disconnection of the Pastorfides' water supply without notice, when she knew they had been using the water for four years, constituted an abuse of her right to demand account transfer.

• Article 20, Civil Code — Every person who, contrary to law, willfully or negligently causes damage to another shall indemnify the latter for the same. It speaks of the general sanction of all other provisions of law which do not especially provide for their own sanction. Applied here to hold petitioner, COWD, and Gonzalez liable for damages caused by their bad-faith conduct.

• Article 21, Civil Code — Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. Applied in conjunction with Article 2219(10) to support the award of moral damages.

• Bar of Cross-Claim (Section 2, Rule 9, Rules of Court) — A cross-claim which is not set up is barred. Petitioner, having failed to file a cross-claim against COWD and Gonzalez before the RTC, was precluded from doing so in the petition for review on certiorari.

• "The exercise of a right must be in accordance with the purpose for which it was established and must not be excessive or unduly harsh; there must be no intention to harm another." — This passage states the controlling standard for determining when the exercise of a legal right constitutes abuse of rights under Article 19, forming the ratio decidendi for holding petitioner liable.

• "This article, known to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which must be observed not only in the exercise of one's rights, but also in the performance of one's duties. These standards are the following: to act with justice; to give everyone his due; and to observe honesty and good faith." — This is the canonical formulation of Article 19 as quoted from Globe Mackay Cable and Radio Corporation vs. Court of Appeals, frequently cited in abuse-of-rights jurisprudence.

• "A right, though by itself legal because recognized or granted by law as such, may nevertheless become the source of some illegality. When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible." — This passage defines the critical bridge between Article 19 as a rule of conduct and the remedial provisions of Articles 20 and 21, explaining why a facially lawful act (requesting disconnection of one's own account) gave rise to liability.

• Yuchengco vs. The Manila Chronicle Publishing Corporation, G.R. No. 184315, November 28, 2011, 661 SCRA 392 — Controlling authority cited at length for the principle of abuse of rights under Article 19 and the relationship between Articles 19, 20, and 21 of the Civil Code. The Court reproduced its discussion of how Article 19 sets standards for the exercise of rights and how violation gives rise to an action for damages under Article 20 or 21.

• Globe Mackay Cable and Radio Corporation vs. Court of Appeals — Cited within the Yuchengco discussion for the elaboration that Article 19, while laying down a rule of conduct for human relations, does not itself provide a remedy; an action for damages under Article 20 or 21 is the proper remedy for its violation.

• Uypitching vs. Quiamco, G.R. No. 146322, December 6, 2006, 510 SCRA 172 — Cited for the principle that the exercise of a right must not be excessive or unduly harsh and must not be attended by intention to harm another; otherwise, liability for damages attaches.

• Philippine National Bank vs. DKS International, Inc., G.R. No. 179161, January 22, 2010, 610 SCRA 603 — Cited for the rule that the resolution of factual issues is the function of lower courts, whose findings are binding on the Supreme Court, and that this is especially true when the RTC's findings are affirmed by the CA.

• Article 19, Civil Code — Provides the principle of abuse of rights: every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. Applied to find that petitioner's request for disconnection without notice constituted abuse of her right to demand account transfer.

• Article 20, Civil Code — Every person who, contrary to law, willfully or negligently causes damage to another shall indemnify the latter. Applied as the remedial provision for violation of Article 19, holding petitioner, COWD, and Gonzalez liable for damages.

• Article 21, Civil Code — Any person who willfully causes loss or injury to another in a manner contrary to morals, good customs or public policy shall compensate the latter. Applied in conjunction with Article 2219(10) to support the award of moral damages.

• Article 2219, Civil Code — Enumerates cases in which moral damages may be recovered, including paragraph (10) for acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. Applied to authorize the award of moral damages to the Spouses Pastorfide.

• Article 2229, Civil Code — Exemplary damages may be imposed by way of example or correction for the public good. Applied to sustain the award of exemplary damages as a deterrent, given the nine-month deprivation of water supply.

• Article 2208, Civil Code — Attorney's fees may be recovered when exemplary damages are awarded, when the defendant's act or omission has compelled the plaintiff to litigate, and where the defendant acted in gross and evident bad faith. Applied to sustain the award of attorney's fees.

• Section 2, Rule 9, Rules of Court — A cross-claim which is not set up is barred. Applied to preclude petitioner from asserting any claim against COWD and Gonzalez in the petition for review, having failed to file a cross-claim before the RTC.

Velasco, Jr. (Chairperson), Abad, Mendoza, and Leonen, JJ., concurred.

None.