Garciano vs. Court of Appeals

Liability for damages under Articles 19, 20, and 21 of the Civil Code arises only from unlawful, willful, or negligent acts contrary to law, morals, good customs, or public policy; where the employer's Board of Directors alone has authority to terminate, a termination letter issued by unauthorized persons has no legal effect, and the employee's voluntary failure to report for work after being ordered reinstated is self-inflicted loss that bars recovery.

Petitioner Esteria F. Garciano was hired as a classroom teacher at the Immaculate Concepcion Institute, a school located on the Island of Camotes. The school's Board of Directors possessed sole authority to hire and fire teachers and other employees. Fr. Joseph Wiertz was the school's founder, and Emerito Labajo served as school principal. The dispute arose within the context of the school's internal governance, where the Board's authority over employment decisions was contested by certain members of the faculty and the founder.

Petitioner Esteria F. Garciano was hired to teach at the Immaculate Concepcion Institute on the Island of Camotes during the 1981–82 school year. On January 13, 1982, before the school year ended, she applied for an indefinite leave of absence because her daughter, who was employed in Austria, was taking her there. The application was recommended for approval by school principal Emerito Labajo and approved by the President of the school's Board of Directors.

On June 1, 1982, while petitioner was still abroad, Labajo addressed a letter to her through her husband, Sotero Garciano, informing her of the decision of Fr. Joseph Wiertz, the school's founder — concurred in by the president of the Parent-Teachers Association and the school faculty — to terminate her services as a member of the teaching staff. The stated grounds were: (1) the absence of any written contract of employment between her and the school due to her refusal to sign one, and (2) the difficulty of getting a substitute for her on a temporary basis as no one would accept the position without a written contract. Upon her return from Austria in the latter part of June 1982, petitioner received the letter and made inquiries from the school about the matter.

On July 7, 1982, the members of the Board of Directors, with the exception of Fr. Wiertz, signed a letter notifying petitioner that she was "reinstated to report and do your usual duties as Classroom Teacher . . . effective July 5, 1982," and that "any letter or notice of termination received by you before this date has no sanction or authority by the Board of Directors of this Institution, therefore it is declared null and void." Two days later, on July 9, 1982, the president, vice president, secretary, and three members of the Board of Directors — out of a membership of nine — resigned their positions, citing the faculty's acid reaction to the Board's deliberations for petitioner's reinstatement, which they perceived as questioning the integrity of the Board's decision. Despite the Board's order of reinstatement, petitioner did not report for work.

On September 3, 1982, petitioner filed a complaint for damages in the Regional Trial Court, Cebu, Branch XI, against Fr. Wiertz, Labajo, and some members of the faculty, alleging discrimination and unjust and illegal dismissal. The trial court found in her favor and awarded moral damages, exemplary damages, lost earnings, and attorney's fees. The Court of Appeals reversed, finding that the termination letter had no legal effect because the respondents lacked authority to dismiss her, and that her discontinuance from teaching was voluntary.

• Sole Assignment of Error: Petitioner maintained that the Court of Appeals gravely erred in absolving the private respondents from liability by faulting her for her failure to report back to work, implying that the circumstances surrounding the termination letter and the faculty's hostile reaction effectively prevented her from resuming her post.

• Liability for Damages: Whether the Court of Appeals erred in absolving the private respondents from liability by attributing petitioner's failure to resume teaching to her own voluntary choice rather than to any unlawful act of the respondents.

• Liability for Damages: No. The petition was dismissed and the Court of Appeals' decision affirmed, because the Board of Directors alone possessed authority to terminate employees, the respondents' termination letter had no legal effect, and petitioner voluntarily failed to report for work after the Board ordered her reinstatement.

• Liability for Damages: The Board of Directors of the Immaculate Concepcion Institute alone possessed the authority to hire and fire teachers and other employees. Although the private respondents — the school principal and the founder — sent petitioner a letter of termination through her husband, they admittedly had no authority to do so. That letter had no legal effect and did not effectively prevent her from reporting for work. The Board subsequently repudiated the termination and directed her to report for duty on July 5, 1982. No evidence was presented showing that the respondents physically or effectively prevented her from resuming her post. The respondents' disagreement with the Board's decision, and the faculty's acid reaction — even if accompanied by threats of mass resignation — amounted to nothing more than an exercise of their right to free speech and dissent. Such acts were not contrary to law, morals, good customs, or public policy, and thus did not give rise to liability under Articles 19, 20, and 21 of the Civil Code. Because the Board's decision to retain her prevailed, there was no illegal dismissal. Petitioner's failure to report for work was her own choice; whatever lost earnings she incurred were self-inflicted, invoking the maxim volenti non fit injuria. With respect to moral damages, the right to recover under Article 21 is based on equity, and one who comes to court seeking equity must come with clean hands. Petitioner was not without fault: she went on indefinite leave and failed to report back in time for the opening of classes, she refused to sign a written employment contract, and she ignored the Board's order to report for duty. The award of exemplary damages was likewise unwarranted because she was not entitled to moral, temperate, or compensatory damages under Article 2234 of the Civil Code.

• Articles 19, 20, and 21 of the Civil Code (Human Relations) — These articles establish the principle that every person must act with justice, give everyone their due, and observe honesty and good faith; that a person who, contrary to law, willfully or negligently causes damage to another must indemnify the latter; and that a person who willfully causes loss or injury in a manner contrary to morals, good customs, or public policy must compensate the damaged party. The Court applied these provisions to test whether the respondents' acts — sending an unauthorized termination letter and dissenting from the Board's reinstatement order — constituted unlawful, willful, or negligent acts causing damage. Finding that the acts were neither unlawful nor the proximate cause of petitioner's loss, the Court held that no liability arose under these articles.

• Volenti non fit injuria — To a willing person, no injury is done. The Court invoked this maxim to characterize petitioner's loss of earnings as self-inflicted, because she voluntarily chose not to report for work despite the Board's directive to do so, and no one prevented her from returning.

• Clean Hands Doctrine in Equity — He who comes to court to demand equity must come with clean hands. The Court applied this principle to deny petitioner's claim for moral damages under Article 21, which is based on equity, because petitioner was herself at fault: she took indefinite leave, refused to sign a written employment contract, and ignored the Board's reinstatement order.

• "Liability for damages under Articles 19, 20 and 21 of the Civil Code arises only from unlawful, willful or negligent acts that are contrary to law, or morals, good customs or public policy." — This passage states the ratio decidendi, defining the threshold for liability under the human relations provisions of the Civil Code and explaining why the respondents' acts did not meet it.

• "While the respondents admittedly wanted her service terminated, they actually did nothing to physically prevent her from reassuming her post, as ordered by the school's Board of Directors. That the school principal and Fr. Wiertz disagreed with the Board's decision to retain her, and some teachers allegedly threatened to resign en masse, even if true, did not make them liable to her for damages. They were simply exercising their right of free speech or their right to dissent from the Board's decision." — This passage articulates the Court's reasoning that dissent and disagreement, without more, do not constitute unlawful acts giving rise to damages.

• "Article 21 should be construed as granting the right to recover damages to injured persons who are not themselves at fault." — This passage defines the equitable limitation on Article 21 recovery, tying the clean hands doctrine to the human relations provisions.

• Mabutas vs. Calapan Electric Co., 50 OG 5828 — Cited for the proposition that Article 21 should be construed as granting the right to recover damages only to injured persons who are not themselves at fault, supporting the clean hands limitation on equitable recovery.

• Flordelis vs. Mar, 114 SCRA 41 — Cited for the rule that moral damages are recoverable only if the case falls under Article 2219 in relation to Article 21 of the Civil Code, establishing the statutory nexus required for moral damages claims.

• Article 19, Civil Code — Requires every person, in the exercise of rights and performance of duties, to act with justice, give everyone their due, and observe honesty and good faith. The Court found that the respondents' acts did not violate this provision because their dissent from the Board's decision was a lawful exercise of free speech.

• Article 20, Civil Code — Provides that a person who, contrary to law, willfully or negligently causes damage to another shall indemnify the latter. The Court found no liability because the respondents' termination letter had no legal effect and did not cause petitioner's loss.

• Article 21, Civil Code — Provides that a person who willfully causes loss or injury in a manner contrary to morals, good customs, or public policy shall compensate the damaged party. The Court held that the respondents' acts were not contrary to morals, good customs, or public policy, and that petitioner was not without fault, barring recovery under this equitable provision.

• Article 2219, Civil Code — Enumerates the cases in which moral damages may be recovered; cited in relation to Article 21 to establish the statutory basis for moral damages claims.

• Article 2234, Civil Code — Provides that exemplary damages may be awarded only when the claimant is entitled to moral, temperate, or compensatory damages. Because petitioner was not entitled to any of these, the award of exemplary damages was unwarranted.

Cruz, Medialdea, and Bellosillo, JJ., concurred.