EDUARDO M. COJUANGCO JR., petitioner, vs. COURT OF APPEALS, THE PHILIPPINE CHARITY SWEEPSTAKES OFFICE and FERNANDO O. CARRASCOSO JR., respondents.; G.R. No. 119398 July 2, 1999

TOPIC:

Art. 32. Any public officer or employee, or any private individual, who directly or indirectly obstruct, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

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(6) The rights against deprivation of property without due process of law;

RATIONALE:

Regardless of the absence of bad faith, nominal damages may still be awarded to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for indemnifying the plaintiff for any loss suffered. (Art. 2221 of the Civil Code)

The court may also award nominal damages in every case where a property right has been invaded. The amount of such damages is addressed to the sound discretion of the court, with the relevant circumstances taken into account. 

FACTS:

1. Petitioner Eduardo Cojuangco Jr. is a known businessman-sportsman owning several acehorses which he entered in the sweepstakes races between the periods covering March 6, 1986 to September 18, 1989. Several of his horses won the races on various dates, landing first, second or third places, respectively, and winning prizes together with the 30% due for trainer/grooms. 

2. Cojuanco then sent demand letters dated: July 3, 1986, August 18, 1986, and September 11, 1990 for the collection of prices.

3. However, it was not subsequently released and was withheld by private respondent, Fernando Carrasco Jr., then  Philippine Charity Sweepstakes Office (PCSO) chairman, based on the advice of Presidential Commission on Good Government (PCGG) Commissioner Ramon A. Diaz. 

4. Petitioner finally brought the matter before RTC Manila on January 30, 1991 but before the receipt of summons, PCGG advised the defendants (PSCO and Carrasco) that "if poses no more objection to the remittance of the prize winnings."

5. Petitioner and his counsel refused to accept the prizes at this point since the matter had already been brought to court.

6. RTC ruled in favor of Cojuangco reasoning that PSCO and its then chairman Carrasco had no authority to withhold the subject racehorse winnings of petitioner, since no writ of sequestration therefor had been issued by the Presidential Commission on Good Government (PCGG). Furthermore, it ruled that Carrasco acted in bad faith amounting to the persecution and harassment of petitioner and his family for he was supposedly aware that petitioner's winning horses were not ill-gotten.

7. PCSO and Carrascoso were ordered to pay in solidum petitioner's claimed winnings plus interests. It further ordered Carrascoso to pay moral and exemplary damages, attorney's fees and costs of suit.

8. While the case was pending before the Court of Appeals, petitioner moved for the payment of the principal amount of his prize winnings as partial execution of the RTC  judgment.

9.  Respondent posed no objection and subsequently released the petitioner's winnings in the amount of P1,020,700. on May 20, 1992.

10. PSCO and Carrasco appealed to CA assigning that RTC committed the following errors:

  i. holding that the defendant-appellants acted in bad faith in withholding said prizes

  ii. awarding moral damages, exemplary damages, and attorney's fees in favor of plaintiff- appelee 

11. CA reversed RTC decision and dismissed the case holding that there was no bad faith shown and former PCSO chairman Carrasco cannot be faulted for merely carrying out the instruction of the PCGG in regard to the prize winnings of the petitioner. 

Carrasco's acts negated bad faith, to wit:

(1) he promptly replied to petitioner's demand for the release of his prizes, citing PCGG's instruction to withhold payment thereof;

(2) upon PCGG's subsequent advice to release petitioner's winnings, he immediately informed petitioner thereof; and

(3) he interposed no objection to the partial execution, pending appeal, of the RTC decision.

12. Hence, this petition for Review.

ISSUE:

Whether the award for damages against respondent Carrascoso, Jr. is warranted by the evidence and the law.

RULING:

YES. Carrasco must pay nominal damages to petitioner Cojuangco.

Although Carrasco's decision to withhold the prizes due to the petitioner was not whimsical and was in accordance with PCGG's statement that the subject prizes were part of those covered by the sequestration order and its instruction "to hold in proper bank deposits [sic] earning interest the amount due Mr. Cojuangco." Also, EO 2 had just been issued by then President Aquino freezeing all assets and properties in the Philippines of former President Marcos and/or his wife, . . . their close friends, subordinates, business associates . . ."; and enjoining the "transfer, encumbrance, concealment, or dissipation [thereof], under pain of such penalties as prescribed by law." Since Petitioner Cojuangco was known to be a very close political and business associate of the former President. Carrasco cannot be held to have acted in bad faith.

However, Art. 32. of the Civil Code provides:

Any public officer or employee, or any private individual, who directly or indirectly obstruct, defeats, violates or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

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(6) The rights against deprivation of property without due process of law;

While Carrasco acted based on PCGG's instructions, he could have further sought the specific legal basis therefor. A little exercise of prudence would have disclosed that there was no writ issued specifically for the sequestration of the racehorse winnings of petitioner. There was apparently no record of any such writ covering his racehorses either. The issuance of a sequestration order requires the showing of a prima facie case and due regard for the requirements of due process. 

Although it was apparent that Carrasco intended no malice, the withholding of the prize winnings of petitioner without a properly issued sequestration order clearly spoke of a violation of his property rights without due process of law. 

Carrasco may still be held liable for damages since under Art. 32, the public officer need not act with malice or bad faith. To be liable, it is enough that there was a violation of the constitutional rights of petitioner, even on the pretext of justifiable motives or good faith in the performance of one's duties.

Since petitioner's right to the use of his property was unduly impeded, petitioner is to be awarded damages pursuant to Art. 2221  which authorizes the award of nominal damages to a plaintiff whose right has been violated or invaded by the defendant, for the purpose of vindicating or recognizing that right, not for indemnifying the plaintiff for any loss suffered.

Hence, petition is partially granted. CA decision is affirmed and modified. Carrasco is ordered to pay P50,000.00 nominal damages to the petitioner.

REFERENCE:

Executive Order No. 2 (EO 2), in which she decreed the following:

(1) Freeze all assets and properties in the Philippines in which former President Marcos and/or his wife, Mrs. Imelda Romualdez Marcos, their close friends, subordinates, business associates, dummies, agents, or nominees have any interest or participation;

(2) Prohibit any person from transferring, conveying, encumbering or otherwise depleting or concealing such assets and properties or from assisting or taking part in their transfer, encumbrance, concealment, or dissipation, under pain of such penalties as are prescribed by law.

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writ of sequestration

- a prejudgment process that orders the seizure or attachment of property to be maintained in the custody of Marshall or designated official, under court order and supervision, until the court determines otherwise.