David Llorente v.

Sandiganbayan
G.R. No. 85464. October 3, 1991

Facts:

 During a massive reorganization of the Philippine Coconut Authority in 1981, hundreds of

employees resigned including Mrs. Perez, Mr. Azucena, Mrs. Javier and Mr. Curio.
 In order to receive gratuity benefits, employees are required to have their PCA clearance
signed by the PCA officers provided they have no pending accountabilities. Then, to be
signed by Atty. David Llorente (for rank-and-file employee) or by Col. Dueñas (in the
case of an officer), and then by the corporate auditor.
 Despite pending accountabilities, the clearances of Mrs. Perez and Mr. Azucena (rank-
and-file employees) were signed by the PCA officers and was subsequently approved by
Atty. Llorente and the corporate auditor. Their pending obligations were just deducted from
their gratuity benefits.
 The same practice was also applied to Mrs. Javier (an officer). Although it was initially
withheld because of her unsettled accountability for the cash advances of P92K, it was
later on released. The same amount was deducted in her gratuity benefits. Such P92k
pertains to the disallowed cash advances released by Mrs. Perez to Mr. Curio. Mr. Curio,
on his part, executed an affidavit that he will assume whatever portion of such amount
should the result of the pending liquidation process is unfavorable to Mrs. Javier albeit it
was already deducted to the gratuity benefits of Mrs. Javier.
 The above practice of deducting the obligations to their gratuity benefits, however, was
not applied in the case of Mr. Curio. On the same month (December 1981), Atty. Llorente
did not approve the clearance of Mr. Curio because of his pending accountabilities.
 Later in 1982, when Mr. Curio brought up the matter to Col. Dueñas who referred it to the
Legal Department, which was under Atty. Llorente as Deputy Administrator of legal affairs.
The same was not approved but the liability was reduced from P92k to P55k.
 Mr. Curio elevated the matter to the chairman of the PCA Board who indorsed it again to
Col. Dueñas. This time, Col. Dueñas, through his Manager (who is a cousin of Atty.
Llorente), submitted a formal report justifying the action taken by Atty. Llorente.
 The case was elevated to Tanodbayan (now Ombudsman). On 12 November 1986, the
Tanodbayan decided to institute this case in court.
 Later on, Mr. Curio received his gratuity benefits in the middle of December 1986. Between
December 1981 and December 1986, Mr. Curio failed to get an employment because of
his failure to present a PCA clearance. As a result, his family literally went hungry. Thus,
an Information for violation of Section 3(c) of the Anti-Graft and Corrupt Practices Act was
filed against Atty. Llorente.
 The Sandiganbayan acquitted Atty. Llorente in the absence of any evidence that he acted
in bad faith. However, he was ordered to pay compensatory damages of P90,000.00.
 According to the Sandiganbayan, Atty. Llorente was guilty of abuse of right (under Article
19 of the Civil Code) and as a public officer, he was liable for damages suffered by the
aggrieved party (under Article 27).
Issue:
  WON Atty. Llorente shall be liable for the damages.

Ruling:

 Yes. It is the essence of Article 19 of the Civil Code, under which the petitioner was made
to pay damages, together with Article 27, that the performance of duty be done with justice
and good faith.
 The Court agrees with the findings of the Sandiganbayan that it found lack of evident bad
faith on the part of Atty. Llorente’s in refusing to clear Curio as it is within the bounds of
law although the practice was that the clearance was nevertheless approved, and then
the amount of the unsettled obligation was deducted from the gratuity benefits of the
employee.
 However, although Atty. Llorente did not act with evident bad faith, he nevertheless acted
with bad faith for which he should respond for damages.
 The records show that the office practice in the PCA was to clear the retiree and deduct
his accountabilities from his gratuity benefits. The same was admitted by Atty. Llorente.
 It is not a defense that he is just complying merely with legal procedures since, as shown,
he was not as strict with respect to the three other retiring employees. There can be no
other logical conclusion that he was acting unfairly to Mr. Curio.
 Cited jurisprudence:
1. Velayo vs. Shell Co. of the Philippines – The defendant was liable under Article 19
of the Civil Code for disposing of its property (although a perfectly legal act) in
order to escape the reach of a creditor.
2. Sevilla vs. Court of Appeals and Valenzuela vs. Court of Appeals – a principal is
liable under Article 19 in terminating the agency (a legal act) when terminating the
agency would deprive the agent of his legitimate business.
 The award of P90,000.00 is justified by Article 2202 of the Civil Code, which holds the
defendant liable for all "natural and probable" damages. As a consequence of Atty.
Llorente’s refusal to clear Mr. Curio, the latter failed to get a job at the Philippine Cotton
Authority and Philippine First Marketing Authority. A job in either office would have earned
him a salary of P2,500.00 a month, or P150,000.00 in five years. Deducting his probable
expenses of reasonably about P1,000.00 a month, or P60,000.00 in five years, the
petitioner owes him a total of actual damages of P90,000.00.
 Note: Award of moral damages is designed to compensate claimant for actual damages
suffered and not as a penalty on the wrongdoer. (San Andres vs. Court of Appeals, 116
SCRA 81.)