MHP GARMENTS and DE GUZMAN v CA, VILLA CRUZ, LUGATIMAN, and GONZALES

PUNO J.
G.R. No.86720. – September 2, 1994.
FACTS
● Feb. 22, 1983: MHP Garments was awarded by the Boy Scouts of the PH exclusive franchise to sell and distribute
official Boy Scouts uniforms, supplies, badges, and insignias
 Their Memorandum of Agreement (MoA) stated that MHP had the authority to “undertake or cause to be
undertaken the prosecution in court of all illegal sources of scout uniforms and other scouting supplies”
● Oct. 1983: MHP received information that Villa Cruz, Lugatiman, and Gonzales were selling unauthorized Boy Scouts
items at the Marikina Public Market
 de Guzman, an employee of MHP, was tasked to:
o Undertake the necessary surveillance
o Make a report to the Philippine Constabulary (PC)
● Oct. 25, 1983: de Guzman, and 3 members of the PC went to the stores of the private respondents
 Without any warrant, they seized the boy and girl scouts pants, dresses, and suits on display in their stalls
 They issued receipts for the seized items, which were turned over to MHP for safekeeping
● MHP filed a criminal complaint for unfair competition against Villa Cruz et al.
 During the pendency of the complaint in the Office of the Prosecutor, de Guzman exacted 3100 pesos from
Lugatiman in order for the latter to be dropped from the complaint
● Dec. 6, 1983: The Provincial Fiscal of Rizal dismissed the complaint against all private respondents
 The Fiscal ordered the return of the seized items on Feb. 6, 1984
 However, said items were not returned immediately despite demands
o Private respondents had to go personally to the office of MHP to recover the seized items
o Not all seized items were recovered, and other items were of inferior quality
● Villa Cruz et. al filed a claim for Recovery of Sum of Money and Damages
● Jan. 9, 1987: RTC ruled in favor of private respondents
● Jan. 18, 1989: On appeal, the CA affirmed RTC Decision with modification
 CA found that the manner of confiscation was tortious
 Ordered the return of the 3100 pesos exacted by de Guzman
 Ordered MHP to pay the value of the unreturned items with interest, as well as damages and attorney’s fees
● MHP filed a petition for certiorari
 Contended that it was the PC, and not MHP, who committed the act of confiscation

ISSUES/HELD/RATIO:
1. W/N the warrantless search and seizure of private respondents’ goods was justified – NO
● The progression of time between the receipt of the information and the raid of the stores of private respondents
shows there was sufficient time for petitioners and the PC raiding party to apply for a judicial warrant
 Found out about unauthorized selling in October 1983 (exact date could not be established in the evidence
adduced)
 Raid on respondents’ stores was made on October 25, 1983
● In failing to apply for a warrant despite sufficiency of time, petitioners and the PC took the risk of a suit for damages,
in case seizure would be proved to violate the right of private respondents against unreasonable search and seizure
● In the case at bar, there was no probable cause for the search
 Petitioners failed to show facts and circumstances that would lead a reasonably discreet and prudent man to
believe that an offense has been committed and that the objects sought in connection with the offense are
in the place sought to be searched
MHP cannot deflect their liability to the PC because:
a) The fact that the PC raiding team should have been included in the complaint for violation of respondents’
constitutional rights CANNOT exculpate petitioners
● MHP was indirectly involved in transgressing the rights of private respondents
 The acts of the PC soldiers were for the protection and benefit of MHP

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 o It was upon MHP’s instance that they conducted the raid in the first place, and effected the illegal
seizure
 This is evidenced by the fact that:
o The PC soldiers immediately turned over the seized items to MHP, who refused to surrender the
seized items for some time
o de Guzman, MHP’s employee, actively participated in the raid
 He assented to the seizure of the items
 Therefore, he is liable to the same extent as the PC officers themselves
● CA correctly awarded damages to Villa Cruz et al. as MHP is indirectly responsible for the transgression, making it
joint tortfeasors along with the PC raiding team
 Lim v Ponce de Leon: Pursuant to Art. 32(9) and Art. 2219(6), a person whose constitutional rights have been
violated or impaired is entitled to actual and moral damages from the public officer or employee responsible
therefor
 Aberca v Ver: Art. 32 of the Civil Code makes the persons who are directly, as well as indirectly, responsible
for the transgression joint tortfeasors
b) Letter of Instruction No. 1299 directs all law enforcement agencies of the Republic of the Philippines, to apprehend
immediately unauthorized manufacturers and distributors of Scout paraphernalia upon proper application by the
Boy Scouts of the Philippines and/or Girl Scouts of the Philippines for warrant of arrest and/or search warrant with a
judge

● In the case at bar, MHP and the PC raiding team failed to report the unauthorized sale of scouting goods to the Boy
Scouts of the Philippines for the proper application of a warrant
c) If MHP truly did not have a hand in the raid, they should have filed a third-party complaint against the raiding team
for contribution in respect of Villa Cruz et al.’s claim for Recovery of Sum of Money with Damages, but they did not

2. [DAMAGES ISSUE] W/N private respondents are entitled to moral damages and exemplary damages – YES
● Moral damages are not awarded to penalize the defendant but to compensate the plaintiff for the injuries he may
have suffered
● There can be no doubt that petitioners must have suffered sleepless nights, serious anxiety, and wounded feelings
due the tortious raid caused by petitioners
 Private respondents' avowals of embarrassment and humiliation during the seizure of their merchandise
were supported by their testimonies
● Needles to state, the wantonness of the wrongful seizure justifies the award of exemplary damages.
 It will also serve as a stern reminder to all and sundry that the constitutional protection against
unreasonable search and seizure is a virile reality and not a mere burst of rhetoric

DISPOSITIVE PORTION
IN VIEW WHEREFORE, the appealed decision is AFFIRMED WITH MODIFICATION. We impose a SIX PERCENT (6%) interest
from January 9, 1987 on the TWO THOUSAND PESOS (P2,000.00) for the unreturned twenty-six (26) pieces of girl scouts
items and a TWELVE PERCENT (12%) interest, in lieu of SIX PERCENT (6%), on the said amount upon finality of this
Decision until the payment thereof. Costs against petitioners.