Malaluan vs. Commission on Elections

Actual or compensatory damages in election contests may only be awarded in accordance with law, requiring the existence of a breach of obligations arising from contracts or quasi-contracts, tortious acts, crimes, or a specific legal provision authorizing the money claim. The victorious party in an election case cannot be indemnified for expenses incurred in an electoral contest in the absence of a wrongful act or omission or breach of obligation clearly attributable to the losing party.

Petitioner Luis Malaluan and private respondent Joseph Evangelista were rival candidates for Municipal Mayor of Kidapawan, North Cotabato in the May 11, 1992 Synchronized National and Local Elections. The Omnibus Election Code (B.P. Blg. 881, Sec. 259) provides that actual or compensatory damages may be granted in all election contests or in quo warranto proceedings in accordance with law, while the COMELEC Rules of Procedure (Rule 35, Sec. 19) require that such claims be included in the pleadings and established by evidence. The Civil Code provisions on damages, particularly Articles 2199, 2201, 2202, and 2208, govern the proper setting for the allowance of actual or compensatory damages.

Petitioner Luis Malaluan and private respondent Joseph Evangelista were both mayoralty candidates in the Municipality of Kidapawan, North Cotabato in the May 11, 1992 Synchronized National and Local Elections. The Municipal Board of Canvassers proclaimed Evangelista as the duly elected Mayor with 10,498 votes against Malaluan's 9,792 votes, a winning margin of 706 votes. On May 22, 1992, Malaluan filed an election protest with the Regional Trial Court contesting 64 out of the total 181 precincts of the municipality.

The trial court declared Malaluan as the duly elected municipal mayor with a plurality of 154 votes, and, acting without precedent, found Evangelista liable not only for Malaluan's protest expenses but also for moral and exemplary damages and attorney's fees. On February 3, 1994, Evangelista appealed the trial court decision to the COMELEC. A day thereafter, on February 4, 1994, Malaluan filed a motion for execution pending appeal, which was granted by the trial court on March 8, 1994, after Malaluan posted a bond in the amount of P500,000.00. By virtue of said order, Malaluan assumed the office of Municipal Mayor and exercised the powers and functions of said office.

The COMELEC First Division reversed the trial court, finding Evangelista to be the duly elected Municipal Mayor, and ordered Malaluan to vacate the office. The COMELEC En Banc affirmed the decision. The First Division awarded actual damages to Evangelista consisting of: (1) P372,500.00 for attorney's fees for new counsel who handled the appeal and petition for certiorari; (2) P11,235.00 for xerox copying of appellant's brief and annexes; (3) P3,919.20 for xerox copying of ballots; and (4) P169,456.00 for loss of salary and other emoluments from March 1994 to April 1995. After deducting P300,000.00 representing the "success fee" portion of attorney's fees, the COMELEC awarded P257,110.00 in actual damages, to be collected from the bond posted by Malaluan in case of default.

The COMELEC found the election protest filed by Malaluan to be clearly unfounded and filed in bad faith, and found the order granting execution pending appeal to be defective for alleged non-compliance with the requirement of a good and special reason. The COMELEC also ruled that Malaluan occupied the position in an illegal manner as a usurper, having been installed through a baseless court order. The term of office of the local officials elected in the May 1992 elections expired on June 30, 1995, rendering the issue of the right to the mayoralty seat moot and academic.

• Lack of Legal Basis for Damages: Petitioner argued that the award of damages in favor of private respondent was improper and illegal because said damages were not alleged and proved during trial.
• Mootness of the Electoral Controversy: Petitioner contended that the petition had become moot and academic insofar as it concerned his right to the mayoralty seat because the term of office contested in the election protest had expired.

• Clearly Unfounded Protest: Respondent COMELEC argued that the election protest filed by petitioner was clearly unfounded, having been filed in bad faith without sufficient cause or for the sole purpose of molesting the protestee, as borne out by the results of the appreciation of ballots conducted by the Commission.
• Grave Abuse of Discretion in Execution Pending Appeal: Respondent COMELEC contended that the order granting execution pending appeal was issued with grave abuse of discretion, there being no good and special reason to justify it, given the narrow margins of victory.
• Petitioner as Usurper: Respondent COMELEC argued that petitioner occupied the mayoralty position in an illegal manner as a usurper, not having been elected to the office but merely installed through a baseless court order, and thus had no right to the salaries and emoluments of the office.

• Mootness: Whether the petition had become moot and academic due to the expiration of the term of office of the Municipal Mayor of Kidapawan, North Cotabato.
• Award of Actual Damages: Whether the COMELEC gravely abused its discretion in awarding actual damages in favor of private respondent, consisting of attorney's fees, actual expenses for xerox copies, and unearned salary and other emoluments.
• Propriety of Execution Pending Appeal: Whether the trial court's order granting execution pending appeal was proper and justified.

• Mootness: Yes, in part. The petition had become moot and academic insofar as it concerned petitioner's right to the mayoralty seat because the term of office contested in the election protest had expired. However, the question as to damages remained ripe for adjudication, as a decision on the merits would have the practical value of either sustaining the monetary award for damages or relieving the private respondent from having to pay the amount thus awarded.
• Award of Actual Damages: No. The COMELEC gravely abused its discretion in awarding actual damages. The award was null and void for having been issued in grave abuse of discretion and in excess of jurisdiction, as the election protest was not a clearly unfounded one, and no breach of contract or quasi-contract, tortious act, or crime could be attributed to petitioner to make him liable for actual damages.
• Propriety of Execution Pending Appeal: Yes. The trial court acted judiciously in the exercise of its prerogatives under the law in issuing the order granting execution pending appeal, as the Rules of Court on execution pending appeal apply suppletorily to election contests, and the nexus of circumstances justified the grant of immediate execution.

• Mootness: The Court applied the rule established in Yorac vs. Magalona that when an appeal from a decision in an election case has become moot due to the expiration of the term of office, the appeal is dismissible on that ground, unless the rendering of a decision on the merits would be of practical value. Citing Atienza vs. Commission on Elections, the Court explained that unlike Yorac, a decision on the merits in the case at bench would clearly have the practical value of either sustaining the monetary award for damages or relieving the private respondent from having to pay the amount thus awarded. Thus, while the issue of the right to the mayoralty seat was moot, the question of damages remained ripe for adjudication.

• Award of Actual Damages: The Court held that Section 259 of the Omnibus Election Code provides that actual or compensatory damages may be granted in all election contests in accordance with law, and the COMELEC Rules of Procedure require that the award be just and borne out by the pleadings and evidence. Considering that actual or compensatory damages are appropriate only in breaches of obligations in cases of contracts and quasi-contracts and on the occasion of crimes and quasi-delicts, the monetary claim of a party in an election case must necessarily be hinged on either a contract or quasi-contract, a tortious act or omission, or a crime, in order to effectively recover actual or compensatory damages. The Court found that no breach of contract or quasi-contract, tortious act, or crime could be attributed to petitioner. The COMELEC's finding that the election protest was clearly unfounded was fallacious, as the actuations of the trial court after the filing of a case before it are its own, and any alleged error on its part does not, in the absence of clear proof, make the suit "clearly unfounded" for which the complainant ought to be penalized.

• Propriety of Execution Pending Appeal: The Court found that the trial court acted judiciously in granting execution pending appeal, citing Garcia vs. de Jesus which held that Section 2, Rule 39 of the Rules of Court may be applied by analogy or suppletorily to election contests. The Court noted that petitioner filed a bond of P500,000.00 as required, and that the trial court relied on the findings of the NBI handwriting experts which private respondent did not rebut. The Court also cited the undeniable urgency involved in the political situation in the Municipality of Kidapawan, as the appeal before the COMELEC would cause a political vacuum to persist. The Court held that the nexus of circumstances considered together justified the execution pending appeal.

• Petitioner as De Facto Officer: The Court held that petitioner was not a usurper because, while a usurper is one who undertakes to act officially without any color of right, petitioner exercised the duties of an elective office under color of election thereto. The Court reiterated that the decision of a judicial body is no less a basis than the proclamation made by the COMELEC-convened Board of Canvassers for a winning candidate's right to assume office. The Court deemed petitioner a de facto officer who, in good faith, had possession of the office and discharged the duties pertaining thereto, and is thus legally entitled to the emoluments of the office. Any damage suffered by private respondent due to the execution of judgment pending appeal was equivalent to damnum absque injuria.

• Mootness in Election Cases — When an appeal from a decision in an election case has become moot due to the expiration of the term of office contested, the appeal is dismissible on that ground, unless the rendering of a decision on the merits would be of practical value. The Court applied this doctrine to dismiss the issue of the right to the mayoralty seat but retained jurisdiction over the damages issue, as a decision thereon would have practical value.

• De Facto Officer Doctrine — An elective official who has been proclaimed as winner in an electoral contest and who assumed office and entered into the performance of the duties of that office, notwithstanding his subsequent ouster as a result of an election protest, is entitled to the compensation, emoluments, and allowances legally provided for the position. The Court applied this doctrine to hold that petitioner, who assumed office under color of a trial court decision and an order granting execution pending appeal, was a de facto officer in good faith entitled to the emoluments of the office.

• Damnum Absque Injuria — Damage without injury, or damage or injury inflicted without injustice, or loss or damage without violation of a legal right, or a wrong done to a man for which the law provides no remedy. The Court applied this principle to hold that any damage suffered by private respondent due to the execution of judgment pending appeal was not compensable, as no wrongful act or omission was attributable to petitioner.

• Execution Pending Appeal in Election Cases — Section 2, Rule 39 of the Rules of Court, which allows Regional Trial Courts to order executions pending appeal upon good reasons stated in a special order, may be made to apply by analogy or suppletorily to election contests decided by them. The Court applied this doctrine to uphold the trial court's order granting execution pending appeal.

• "The overriding requirement for a valid and proper award of damages, it must be remembered, is that the same is in accordance with law, specifically, the provisions of the Civil Code pertinent to damages." — This passage articulates the controlling standard for awarding damages in election cases, requiring compliance with the Civil Code provisions on damages.

• "In the absence of any or all of these, 'the claimant must be able to point out a specific provision of law authorizing a money claim for election protest expenses against the losing party.'" — This passage establishes the requirement that a claimant seeking actual or compensatory damages in an election case must demonstrate a legal basis for the money claim, whether through contract, quasi-contract, tort, crime, or specific legal provision.

• "We hold that petitioner was not a usurper because, while a usurper is one who undertakes to act officially without any color of right, the petitioner exercised the duties of an elective office under color of election thereto." — This passage defines the distinction between a usurper and a de facto officer, holding that petitioner's assumption of office under color of a trial court decision made him a de facto officer rather than a usurper.

• "Evidently, if any damage had been suffered by private respondent due to the execution of judgment pending appeal, that damage may be said to be equivalent to damnum absque injuria, which is, damage without injury, or damage or injury inflicted without injustice, or loss or damage without violation of a legal right, or a wrong done to a man for which the law provides no remedy." — This passage applies the principle of damnum absque injuria to hold that private respondent's damages were not compensable in the absence of a wrongful act or omission attributable to petitioner.

• Yorac vs. Magalona, 3 SCRA 76 — Controlling precedent establishing the rule that an appeal in an election case becomes moot upon expiration of the term of office, unless a decision on the merits would be of practical value. Distinguished in the instant case because the damages issue remained ripe for adjudication.

• Atienza vs. Commission on Elections, 239 SCRA 298 — Followed as the exception to the Yorac rule, holding that a decision on the merits has practical value when a monetary award for damages is involved. Cited extensively for the proposition that actual or compensatory damages in election cases must be hinged on a contract, quasi-contract, tortious act, or crime.

• Rodriguez vs. Tan, 91 Phil. 724 — Followed for the rule that an elective official who has been proclaimed as winner and assumed office is entitled to the compensation, emoluments, and allowances legally provided for the position, notwithstanding subsequent ouster. Distinguished by the COMELEC but applied by the Court to hold that petitioner was a de facto officer entitled to emoluments.

• Garcia vs. de Jesus, 206 SCRA 779 — Controlling precedent holding that Section 2, Rule 39 of the Rules of Court on execution pending appeal may be applied by analogy or suppletorily to election contests decided by Regional Trial Courts.

• Gahol vs. Riodique, 64 SCRA 494 — Cited for the proposition that as much recognition should be given to the value of the decision of a judicial body as a basis for the right to assume office as that given by law to the proclamation made by the Board of Canvassers.

• Tayco vs. Capistrano, 53 Phil. 866 — Cited for the definition of a usurper as one who undertakes to act officially without any color of right.

• Civil Liberties Union vs. The Executive Secretary, 194 SCRA 317 — Cited for the proposition that a de facto officer who in good faith has had possession of the office and discharged the duties pertaining thereto is legally entitled to the emoluments of the office.

• Section 259, Omnibus Election Code (B.P. Blg. 881) — Provides that actual or compensatory damages may be granted in all election contests or in quo warranto proceedings in accordance with law. The Court applied this provision to require that any award of damages in election cases must comply with the Civil Code provisions on damages.

• Rule 35, Section 19, COMELEC Rules of Procedure — Provides that in all election contests the Court may adjudicate damages and attorney's fees as it may deem just and as established by the evidence if the aggrieved party has included such claims in his pleadings. The Court applied this provision to require that the award be just and borne out by the pleadings and evidence.

• Article 2199, Civil Code — Provides that one is entitled to adequate compensation only for such pecuniary loss suffered as he has duly proved, referred to as actual or compensatory damages. The Court applied this provision to require proof of pecuniary loss for an award of actual damages.

• Articles 2201 and 2202, Civil Code — Provide for the measure of damages in contracts and quasi-contracts, and in crimes and quasi-delicts, respectively. The Court applied these provisions to hold that actual or compensatory damages in election cases must be hinged on a contract, quasi-contract, tortious act, or crime.

• Articles 19, 20, and 32, Civil Code — Create obligations not by contract, crime, or negligence, but directly by law, including the obligation to act with justice and give everyone his due, and liability for damages for obstructing or impairing the freedom of suffrage. The Court cited these provisions as examples of specific legal provisions that could authorize a money claim in election cases.

• Article 2208, Civil Code — Enumerates the specific instances when attorney's fees may be awarded, including when exemplary damages are awarded, in cases of clearly unfounded civil actions, and in any other case where the court deems it just and equitable. The Court applied this provision to hold that attorney's fees could not be awarded in the absence of a clearly unfounded action.

• Section 2, Rule 39, Rules of Court — Allows Regional Trial Courts to order executions pending appeal upon good reasons stated in a special order. The Court applied this provision, through Garcia vs. de Jesus, to hold that execution pending appeal may be granted in election contests by analogy or suppletorily.

Narvasa, Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco, and Panganiban, JJ., concurred.