GAJETE, XYRA KREZEL I.

LEGAL

TECHNIQUE & LOGIC

Case Analysis of CALIFORNIA CLOTHING INC. and MICHELLE S. YBAEZ vs.
SHIRLEY G. QUIONES
G.R. No. 175822
October 23, 2013
I. Identify the parties
Respondent Shirley G. Quiones, a Reservation Ticketing Agent of Cebu
Pacific Air in Lapu Lapu City, bought an item in Guess USA Boutique (owned by
California Clothing, Inc.) at Robinsons in Cebu City worth P2,098.00 evidenced by a
receipt issued by the store.
Hawayon is the store cashier who issued the official receipt. Excelsis
Villagonzalo is the Guess employee who followed and informed the respondent that
she failed to pay the item she got. Michelle Ybaez , another employee, signed the
demand letter sent to respondents employer. California Clothing, Inc. and Ybaez
are the petitioners in the case at bar.
II. Prior Proceedings
On June 20, 2003, the RTC rendered a Decision dismissing both the complaint
and counterclaim of the parties. The trial court concluded that the petitioners and
the other defendants believed in good faith that respondent failed to make
payment. The RTC likewise did not find it damaging for respondent when the
confrontation took place in front of Cebu Pacific clients, because it was respondent
herself who chose the venue for discussion. As to the letter sent to Cebu Pacific Air,
the trial court also did not take it against the Guess employees, because they
merely asked for assistance and not to embarrass or humiliate respondent. 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 RTCs decision. CA found
preponderance of evidence showing that they acted in bad faith in sending the

demand letter to respondents employer. The letter addressed to Cebu Pacifics

director was sent not merely to ask for assistance for the collection of the disputed
payment but to subject her to ridicule, humiliation and similar injury such that she
would be pressured to pay. It found respondents possession of both the official
receipt and the subject black jeans as evidence of payment. CA held that petitioners
are guilty of abuse of right entitling respondent to collect moral damages and
attorneys fees. Petitioner California Clothing Inc. was made liable for its failure to
exercise extraordinary diligence in the hiring and selection of its employees; while
Ybaezs liability stemmed from her act of signing the demand letter sent to
respondents employer. In view of Hawayon and Villagonzalos good faith, however,
they were exonerated from liability.
Ybaez moved for the reconsideration of the aforesaid decision, but the same
was denied in the assailed November 14, 2006 CA Resolution.
Petitioners now come before the Court in this petition for review on certiorari
under Rule 45 of the Rules of Court.
III. Theories of the Parties
Respondents complaint against petitioners stemmed from the principle of
abuse of rights provided for in the Civil Code on the chapter of human relations.
Respondent cried foul when petitioners allegedly embarrassed her when they
insisted that she did not pay for the black jeans she purchased despite the evidence
that is the official receipt issued by the shop. The Supreme Court held that 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 and in the performance of duty causing damage
or injury to another is actionable under the Civil Code.
Petitioners claimed that there was a miscommunication between the cashier
and the invoicer leading to the erroneous issuance of the receipt to respondent.
When they realized the mistake, they made a cash count and discovered that the
amount which is equivalent to the price of the black jeans was missing. They, thus,

concluded that it was respondent who failed to make such payment. It was,
therefore, within their right to verify from respondent whether she indeed paid or
not and collect from her if she did not. However, the question now is whether such
right was exercised in good faith or they went overboard giving respondent a cause
of action against them. The Supreme Court held that there was nothing wrong with
petitioners asking respondent whether she paid or not. The Guess employees were
able to talk to respondent at the Cebu Pacific Office. The confrontation started well,
but it eventually turned sour when voices were raised by both parties. As aptly held
by both the RTC and the CA, such was the natural consequence of two parties with
conflicting views insisting on their respective beliefs. Considering, however, that
respondent was in possession of the item purchased from the shop, together with
the official receipt of payment issued by petitioners, the latter cannot insist that no
such payment was made on the basis of a mere speculation. Their claim should
have been proven by substantial evidence in the proper forum.
IV. Objectives of the Parties
On one hand, respondent demanded the payment of moral, nominal, and
exemplary damages, plus attorneys fees and litigation expenses for respondent
claimed to have suffered physical anxiety, sleepless nights, mental anguish, fright,
serious apprehension, besmirched reputation, moral shock and social humiliation.
On the other hand, petitioners and the other defendants sought the payment of
moral and exemplary damages, plus attorneys fees and litigation expenses.
V. Key Facts
The Key facts that are found by the Court that truly made a difference are:
1. that respondent was in possession of the item purchased from the shop,
together with the official receipt of payment issued by petitioners, the latter
cannot insist that no such payment was made on the basis of a mere
speculation;
2. that petitioners act of sending a letter to respondents employer was
overboard and obviously imputing bad acts on the part of respondent; and

3. That respondent had no intention to evade payment because was not in a

rush in leaving the shop or the mall. The Guess employees did not have a
hard time looking for her when they realized the supposed non-payment.
VI. Issues
The main issue in the case is whether or not petitioners are guilty of abuse of
right entitling respondent to collect moral damages and attorneys fees. Did the
petitioners act in bad faith in sending the demand letter to respondents employer?
Did the petitioners violate Articles 20 and 21 of Civil Code of the Philippines?

VII. Holdings and Findings

1. Conclusion of Facts: In sending the demand letter to respondents
employer, petitioners intended not only to ask for assistance in collecting the
disputed amount but to tarnish respondents reputation in the eyes of her employer.
To malign respondent without substantial evidence and despite the latters
possession of enough evidence in her favor, is clearly impermissible.
2. Conclusion of Law: Under the abuse of rights principle found in Article 19 of
the Civil Code, a person must, in the exercise of legal right or duty, act in good faith.
He would be liable if he instead acted in bad faith, with intent to prejudice another.
Good faith refers to the state of mind which is manifested by the acts of the
individual concerned. It consists of the intention to abstain from taking an
unconscionable and unscrupulous advantage of another. Malice or bad faith, on the
other hand, implies a conscious and intentional design to do a wrongful act for a
dishonest purpose or moral obliquity 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.

3. Obiter Dicta: In interpreting Art. 2219 of the Civil Code, the Supreme Court
stated that moral damages are not a bonanza. They are given to ease the
defendants grief and suffering. They should, thus, reasonably approximate the
extent of hurt caused and the gravity of the wrong done. They are awarded not to
enrich the complainant but to enable the latter to obtain means, diversions, or
amusements that will serve to alleviate the moral suffering he has undergone.
VIII. Ratio Decidendi
It is established that a person should not use his right unjustly or contrary to
honesty and good faith, otherwise, he opens himself to liability. In sending the
demand letter to respondents employer, petitioners intended not only to ask for
assistance in collecting the disputed amount but to tarnish respondents reputation
in the eyes of her employer. To malign respondent without substantial evidence and
despite the latters possession of enough evidence in her favor, is clearly
impermissible. Hence, petitioners had acted in bad faith and are therefore liable.

IX. Disposition
The Court denied the petition for lack of merit as petitioners were found to
have acted in bad faith. The Court of Appeals Decision dated August 3, 2006 and
Resolution dated November 14, 2006 in CA-G.R. CV No. 80309, are AFFIRMED.
Respondent is entitled to an award of moral damages and attorney s fees.