DEAN’S CIRCLE 2019 – UST FACULTY OF CIVIL LAW

RULING:

Petitioner invokes Article 19 and Article 21[8] of the Civil Code, claiming that private respondent
abused its rights when it rejected petitioner's offer of settlement and subsequently filed the action
for collection.

It is an elementary rule in this jurisdiction that good faith is presumed and that the burden of proving
bad faith rests upon the party alleging the same. In the case at bar, petitioner has failed to prove bad
faith on the part of private respondent. Petitioner's allegation that private respondent was motivated
by a desire to terminate its agency relationship with petitioner so that private respondent itself may
deal directly with Meralco is simply not supported by the evidence. At most, such supposition is
merely speculative.

Moreover, the SC found that private respondent was driven by very legitimate reasons for rejecting
petitioner's offer and instituting the action for collection before the trial court. As pointed out by
private respondent, the corporation had its own "cash position to protect in order for it to pay its
own obligations." This is not such "a lame and poor rationalization" as petitioner purports it to be.
For if private respondent were to be required to accept petitioner's offer, there would be no reason
for the latter to reject similar offers from its other debtors. Clearly, this would be inimical to the
interests of any enterprise, especially a profit-oriented one like private respondent. It is plain to see
that what we have here is a mere exercise of rights, not an abuse thereof. Under these circumstances,
the SC did not deem private respondent to have acted in a manner contrary to morals, good customs
or public policy as to violate the provisions of Article 21 of the Civil Code.

CALIFORNIA CLOTHING v. SHIRLEY G. QUIÑONES

GR No.175822, DIVISION, October 23, 2013, PERALTA, J.

A person should not use his right unjustly or contrary to honesty and good faith, otherwise, he opens
himself to liability. 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. In this case, petitioners obviously abused their
rights.It is evident from the circumstances of the case that petitioners went overboard and tried to force
respondent to pay the amount they were demanding. In the guise of asking for assistance, petitioners
even sent a demand letter to respondent's employer not only informing it of the incident but obviously
imputing bad acts on the part of respondent.

FACTS:

On July 25, 2001, respondent, a Reservation Ticketing Agent of Cebu Pacific Air, went inside the Guess
USA Boutique of Robinson's Department Store in Cebu City. She fitted four items: two jeans, a blouse
and a shorts, then decided to purchase the black jeans. Respondent allegedly paid to the cashier
evidenced by a receipt issued by the store. While she was walking through the skywalk connecting
Robinson's and Mercury Drug Store, a Guess employee approached and informed her that she failed
to pay. She, however, insisted that she paid and showed the employee the receipt. She then suggested
that they talk about it at the Cebu Pacific Office located at the basement of the mall.

When she arrived at the Cebu Pacific Office, the Guess employees allegedly subjected her to
humiliation in front of the clients of Cebu Pacific and repeatedly demanded payment. They
supposedly even searched her wallet to check how much money she had, followed by another
argument.

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 DEAN’S CIRCLE 2019 – UST FACULTY OF CIVIL LAW

On the same day, the Guess employees allegedly gave a letter to the Director of Cebu Pacific Air
narrating the incident, but the latter refused to receive it as it did not concern the office and the same
took place while respondent was off duty. Another letter was allegedly prepared and was supposed
to be sent to the Cebu Pacific Office in Robinson's, but the latter again refused to receive
it. Respondent also claimed that the Human Resource Department of Robinson's was furnished said
letter and the latter in fact conducted an investigation for purposes of canceling respondent's
Robinson's credit card. With the above experience, respondent claimed to have suffered physical
anxiety, sleepless nights, mental anguish, fright, serious apprehension, besmirched reputation, moral
shock and social humiliation. She thus filed the Complaint for Damages against petitioners.

The RTC found no evidence to prove bad faith on the part of the Guess employees to warrant the
award of damages. On appeal, the CA reversed and set aside the RTC decision.

ISSUE:

Whether or not petitioners are guilty of abuse of right. (YES)

RULING:

The issuance of the receipt notwithstanding, petitioners had the right to verify from respondent
whether she indeed made payment if they had reason to believe that she did not. However, the
exercise of such right is not without limitations. Any abuse in the exercise of such right causing
damage or injury to another is actionable under the Civil Code.

The elements of abuse of rights are as follows: (1) there is a legal right or duty; (2) which is exercised
in bad faith; (3) for the sole intent of prejudicing or injuring another.

In this case, it is evident from the circumstances of the case that petitioners went overboard and tried
to force respondent to pay the amount they were demanding. In the guise of asking for assistance,
petitioners even sent a demand letter to respondent's employer not only informing it of the incident
but obviously imputing bad acts on the part of respondent.

Petitioners accused respondent that not only did she fail to pay for the jeans she purchased but that
she deliberately took the same without paying for it and later hurriedly left the shop to evade
payment. These accusations were made despite the issuance of the receipt of payment and the release
of the item purchased. There was, likewise, no showing that respondent had the intention to evade
payment. Contrary to petitioners' claim, respondent was not in a rush in leaving the shop or the mall.
This is evidenced by the fact that the Guess employees did not have a hard time looking for her when
they realized the supposed non-payment.

It can be inferred from the foregoing that in sending the demand letter to respondent's employer,
petitioners intended not only to ask for assistance in collecting the disputed amount but to tarnish
respondent's reputation in the eyes of her employer.

In view of the foregoing, respondent is entitled to an award of moral damages and attorney's fees.

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