An act cannot be considered an abuse of right under Article 19 of the New Civil Code unless the claimant proves by clear and convincing evidence that the act was performed in bad faith or with a malicious intent to injure; merely enforcing a company policy or being blunt in communication, without a dishonest purpose or moral obliquity, does not give rise to liability for damages.

Petitioners Spouses Nestor and Ma. Belen Cabasal were engaged in a build-and-sell business and obtained a credit line from BPI Family Savings Bank (BPI), secured by mortgages on two real properties. After three years, they found a buyer, Eloisa Guevarra Co, who agreed to purchase the properties through a sale with assumption of mortgage. At the time of this proposed transaction, the petitioners' loan accounts with BPI were already past due. The dispute arose from the interaction between the petitioners, their buyer, and a BPI employee when they attempted to process the transaction at the bank.

• Petitioners Spouses Cabasal obtained a credit line from BPI for their build-and-sell business, secured by two Mortgage Loan Agreements for Php5,000,000.00 and Php3,360,000.00.
• After three years, they found a buyer, Eloisa Guevarra Co, who agreed to purchase their properties via a Deed of Sale with Assumption of Mortgage, with a down payment of Php7,850,000.00 and assumption of the remaining loan balance of Php4,462,226.00.
• On July 6, 2000, petitioner Nestor Cabasal and Eloisa went to BPI to get a statement of account and process the transfer.
• Respondent Alma De Leon, a BPI employee, informed them that the bank would not recognize the assumption of mortgage because Eloisa was not a client and it was against bank policy.
• Despite Nestor's pleas, De Leon insisted on the policy, allegedly stating in the vernacular that the transaction was "illegal" ("para pong illegal itong ginagawa niyo").
• The deal with Eloisa fell through, which petitioners claim caused them to lose an expected profit of Php3,387,773.96.
• Petitioners subsequently defaulted on one of their loan accounts, leading BPI to initiate extra-judicial foreclosure proceedings on the corresponding mortgaged property.
• BPI emerged as the highest bidder at the public auction, and after the redemption period lapsed, it consolidated ownership and filed for a writ of possession.
• Petitioners filed a suit for damages and annulment of the foreclosure, which was consolidated with BPI's petition for a writ of possession.

• Respondent Alma De Leon's irresponsible handling of the situation and her branding of their transaction as "illegal" caused their buyer to back out, resulting in financial losses.
• Respondents committed a breach of contract and an abuse of right under Articles 19 and 20 of the Civil Code, for which they should be held liable for damages.
• BPI is vicariously liable for the negligent acts of its employee, Alma De Leon, under Article 2180 of the Civil Code.
• Respondents' breach of contract gave petitioners the right to suspend payment of their mortgage loan, rendering the subsequent foreclosure of the property void.

• Alma De Leon acted in good faith and was merely enforcing a known bank policy, as stipulated in Section 35 of the Mortgage Loan Agreement, which prohibits the assumption of mortgage.
• De Leon's statement was not malicious but was a truthful explanation of the bank's policy, and she correctly suggested that the buyer should apply for a separate loan to pay off the petitioners' obligation.
• There was no bad faith or negligence, as her actions were in line with her duties and the bank's standard procedures to protect its financial interests.
• The foreclosure was valid because the petitioners were already in default on their loan obligations even before the incident with the prospective buyer occurred.
• The issuance of a writ of possession is a ministerial duty of the court after ownership has been consolidated in the purchaser's name following a valid foreclosure sale.

• Procedural Issues:
  • Whether the petition for review under Rule 45, which raises questions of fact, should be entertained by the Supreme Court.
• Substantive Issues:
  • Whether respondents committed an abuse of right under Article 19 of the Civil Code that would make them liable for damages.
  • Whether the extra-judicial foreclosure of the petitioners' property was valid.
  • Whether the issuance of the writ of possession in favor of BPI was proper.

• Procedural:
  • The Court acknowledged that the petition raised factual issues generally not permissible under a Rule 45 review but exercised its discretion to review the case, ultimately sustaining the findings of the Court of Appeals.
• Substantive:
  • No, respondents did not commit an abuse of right. The Court found that petitioners failed to prove with clear and convincing evidence that Alma De Leon or BPI acted in bad faith. De Leon's actions were based on an existing bank policy, and her bluntness did not amount to a malicious intent to injure. Bad faith is not synonymous with bad judgment or negligence and requires a dishonest purpose, which was absent in this case.
  • Yes, the foreclosure was valid. Petitioners were already in default of their loan obligations prior to their attempt to sell the property. Their claim that they were justified in suspending payments is without merit, as there was no breach of contract on the part of the respondents.
  • Yes, the issuance of the writ of possession was proper. The Court reiterated the settled rule that once title to a property is consolidated in the buyer's name after the redemption period expires, the issuance of a writ of possession becomes a ministerial duty of the court. Questions regarding the validity of the mortgage or foreclosure are not grounds to refuse its issuance.

• Principle of Abuse of Rights (Article 19, New Civil Code) — This principle requires that every person, in the exercise of his rights and performance of his duties, must act with justice, give everyone his due, and observe honesty and good faith. The Court applied this by clarifying that Article 19 is not a panacea for all grievances and, to be actionable, must be coupled with proof of bad faith or intent to injure. Since petitioners failed to prove bad faith, their claim under this principle failed.
• Bad Faith — Defined as a dishonest purpose, moral obliquity, or a conscious doing of a wrong for a motive of interest or ill will. The Court emphasized that bad faith is never presumed and must be established by clear and convincing evidence. It ruled that petitioners did not meet this evidentiary standard, as De Leon's actions were merely an enforcement of bank policy.
• Ministerial Duty to Issue Writ of Possession — This doctrine states that after the lapse of the redemption period in a foreclosure sale, the court has a non-discretionary, or ministerial, duty to issue a writ of possession to the purchaser who has consolidated title. The Court applied this to affirm the CA's decision, holding that the writ should be issued as a matter of course.
• Vicarious Liability (Article 2180, New Civil Code) — This doctrine holds an employer liable for the torts committed by an employee acting within the scope of their assigned tasks. The Court found this inapplicable because the petitioners failed to establish that the employee, Alma De Leon, committed any tortious act (i.e., acted negligently or in bad faith). Without a primary wrong, there can be no vicarious liability.

• "Morality and ethics enjoin everyone to observe the unwritten rule that 'one's right ends where others' begin.' In a civilized and peaceful society, an abuse of one's right is eschewed. Statutorily, however, Article 19 of the New Civil Code, known to contain what is commonly referred to as the principle of abuse of rights, is not a panacea for all human hurts and social grievances. To warrant reliefs from the courts, the act complained of must be shown to be done in bad faith or with intent to injure."
• "Bad faith does not simply connote bad judgment or negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty through some motive or interest or ill will that partakes of the nature of fraud."

• Arco Pulp and Paper, Inc. v. Dan T. Lim — Cited to explain that Article 19 of the Civil Code is the general rule governing human relations but is not, by itself, a basis for an actionable tort; it must be connected with a violation of law or a willful act causing injury under Article 20 or 21.
• Nagtalon v. United Coconut Planters Bank — Referenced to support the ruling that the issuance of a writ of possession is a ministerial function of the court once the redemption period has expired and title is consolidated, and that questions on the mortgage's validity are not a valid reason to deny it.
• Litonjua v. L&R Corporation — Cited by the RTC to support its finding that the bank's policy against alienation of the mortgaged property was a circumvention of Article 2130 of the Civil Code. The Supreme Court, however, focused its ruling on the absence of bad faith rather than the validity of the bank's policy.

• Article 19, New Civil Code (Principle of Abuse of Rights) — This was the central legal provision invoked by the petitioners and analyzed by the Court, which concluded that its elements, particularly bad faith, were not met.
• Article 20, New Civil Code — Referenced as a legal basis for claiming damages for injury caused by acts contrary to law, done willfully or negligently.
• Article 21, New Civil Code — Referenced as a legal basis for claiming damages for injury caused by acts contrary to morals, good customs, or public policy.
• Article 2180, New Civil Code (Vicarious Liability) — Invoked by petitioners to hold BPI liable for its employee's actions. The Court found it inapplicable as no wrongful act by the employee was proven.
• Rule 45, Rules of Court — The procedural basis for the petition before the Supreme Court, which generally limits the Court's review to questions of law.