G.R. No. 138123. March 12, 2002. Mindex Resources Development, Petitioner, EPHRAIM MORILLO, Respondent

12/12/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 379
144 SUPREME COURT REPORTS ANNOTATED

Mindex Resources Development vs. Morillo
*
G.R. No. 138123. March 12, 2002.
MINDEX RESOURCES DEVELOPMENT, petitioner, vs.

EPHRAIM MORILLO, respondent.
Appeals; Evidence; Well-settled is the rule that factual findings of the

trial court, particularly when affirmed by the Court of Appeals, are binding
on the Supreme Court.—Both the RTC and the CA found petitioner
negligent and thus liable for the loss or destruction of the leased truck. True,
both parties may have suffered from the burning of the truck; however, as
found by both lower courts, the negligence of petitioner makes it
responsible for the loss. Well-settled is the rule that factual findings of the
trial court, particularly when affirmed by the Court of Appeals, are binding
on the Supreme Court. Contrary to its allegations, petitioner has not
adequately shown that the RTC and the CA overlooked or disregarded
significant facts and circumstances that, when considered, would alter the
outcome of the disposition. Article 1667 of the Civil Code holds lessees re-
______________
* THIRD DIVISION.
145
VOL. 379, MARCH 12, 2002 145
sponsible for the deterioration or loss of the thing leased, unless they prove
that it took place without their fault.
Obligations and Contracts; Fortuitous Events; An act of God cannot
be invoked to protect a person who has failed to take steps to forestall the
possible adverse consequences of such a loss-when the effect is found to be
partly the result of a person’s participation, whether by active intervention,
neglect or failure to act, the whole occurrence is humanized and removed
www.central.com.ph/sfsreader/session/0000016efa98c4fe0092354b003600fb002c009e/t/?o=False 1/15
from the rules applicable to acts of God.—In order for a fortuitous event to
exempt one from liability, it is necessary that one has committed no
negligence or misconduct that may have occasioned the loss. An act of God
cannot be invoked to protect a person who has failed to take steps to
forestall the possible adverse consequences of such a loss. One’s negligence
may have concurred with an act of God in producing damage and injury to
another; nonetheless, showing that the immediate or proximate cause of the
damage or injury was a fortuitous event would not exempt one from
liability. When the effect is found to be partly the result of a person’s
participation—whether by active intervention, neglect or failure to act—the
whole occurrence is humanized and removed from the rules applicable to
acts of God.
Same; Same; Requisites; The often-invoked doctrine of “fortuitous
event” or “caso fortuito” has become a convenient and easy defense to
exculpate an obligor from liability.—This often-invoked doctrine of
“fortuitous event” or “caso fortuito” has become a convenient and easy
defense to exculpate an obligor from liability. To constitute a fortuitous
event, the following elements must concur: (a) the cause of the unforeseen
and unexpected occurrence or of the failure of the debtor to comply with
obligations must be independent of human will; (b) it must be impossible to
foresee the event that constitutes the caso fortuito or, if it can be foreseen, it
must be impossible to avoid; (c) the occurrence must be such as to render it
impossible for the debtor to fulfill obligations in a normal manner; and (d)
the obligor must be free from any participation in the aggravation of the
injury or loss.
Same; Same; Words and Phrases; Negligence, as commonly
understood, is that conduct that naturally or reasonably creates undue risk
or harm to others.—As can be gleaned from the foregoing testimony,
petitioner failed to employ reasonable foresight, diligence and care that
would have exempted it from liability resulting from the burning of the
truck. Negligence, as commonly understood, is that conduct that naturally or
reasonably creates undue risk or harm to others. It may be a failure to
observe that degree of care, precaution or vigilance that the circumstances
146
justly demand; or to do any other act that would be done by a prudent and
reasonable person, who is guided by considerations that ordinarily regulate
the conduct of human affairs.
Same; Same; Leases; Damages; Article 1667 of the Civil Code holds
the lessee responsible for the deterioration or loss of the thing leased;
Courts begin with the assumption that compensatory damages are for
pecuniary losses that result from an act or omission of the defendant.—The

P132,750 repair and overhaul costs was correctly granted by the lower
courts. Article 1667 of the Civil Code holds the lessee responsible for the
deterioration or loss of the thing leased. In addition, Article 1665 of the
same Code provides that “the lessee shall return the thing leased, upon the
termination of the lease, just as he received it, save what has been lost or
impaired by the lapse of time, or by ordinary wear and tear, or from an
inevitable cause.” Courts begin with the assumption that compensatory
damages are for pecuniary losses that result from an act or omission of the
defendant. Having been found to be negligent in safeguarding the leased
truck, petitioner must shoulder its repair and overhaul costs to make it
serviceable again. Such expenses are duly supported by receipts; thus, the
award of P132,750 is definitely in order.
Attorney’s Fees; Where granted, the court must explicitly state in the
body of the decision, and not only in the dispositive portion thereof, the
legal reason for the award of attorney’s fees.—We find the award of
attorney’s fees to be improper. The reason which the RTC gave—because
petitioner had compelled respondent to file an action against it—falls short
of our requirement in Scott Consultants and Resource Development v. CA,
from which we quote: “It is settled that the award of attorney’s fees is the
exception rather than the rule and counsel’s fees are not to be awarded every
time a party wins suit. The power of the court to award attorney’s fees under
Article 2208 of the Civil Code demands factual, legal, and equitable
justification; its basis cannot be left to speculation or conjecture. Where
granted, the court must explicitly state in the body of the decision, and not
only in the dispositive portion thereof, the legal reason for the award of
attorney’s fees.”
Same; In the absence of stipulation, a winning party may be awarded
attorney’s fees only in case plaintiff’s action or defendant’s stand is so
untenable as to amount to gross and evident bad faith.—Moreover, a recent
case ruled that “in the absence of stipulation, a winning party may be
awarded attorney’s fees only in case plaintiff’s action or defendant’s stand is
so untenable as to amount to gross and evident bad faith.” Indeed,
respondent was compelled to file this suit to vindicate his rights. However,
147
VOL. 379, MARCH 12, 2002 147
such fact by itself will not justify an award of attorney’s fees, when there is
no sufficient showing of petitioner’s bad faith in refusing to pay the said
rentals as well as the repair and overhaul costs.
PETITION for review on certiorari of a decision of the Court of

Appeals.
The facts are stated in the opinion of the Court.

Quisumbing and Torres for petitioner.
Westwood Law and Edgardo C. Aceron for private respondent.
PANGANIBAN, J.:
Attorney’s fees cannot be granted simply because one was

compelled to sue to protect and enforce one’s right. The grant must
be proven by facts; it cannot depend on mere speculation or
conjecture—its basis must be stated in the text of the decision.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of

1
Court, assailing the March 26, 1999 Decision of the Court of
Appeals (CA) in CA-GR CV No. 46967. The dispositive portion of
the challenged Decision reads as follows:
“WHEREFORE, the appealed decision is AFFIRMED with

MODIFICATION that the legal interest to be paid on the rentals of
P76,000.00 and costs of repair in the amount of P132,750.00 is six (6%)
percent per annum from June 22, 1994, the date of the decision of the court
a quo to the date of its finality. Thereafter, if the amounts adjudged remain
unpaid, the interest rate shall be twelve (12%) percent per annum from the
2
date of finality of the decision until fully paid.”
______________
1 Special Tenth Division. Written by Justice Salvador J. Valdez, Jr. (Acting

Division chair) and concurred in by Justices Eloy R. Bello, Jr. and Renato C. Dacudao
(members).
2 Assailed Decision, p. 10; Rollo, p. 35.
148

The Facts
The factual antecedents of the case are summarized by the CA in

this wise:
“On February 1991, a verbal agreement was entered into between Ephraim
Morillo and Mindex Resources Corporation (MINDEX for brevity) for the
lease of the former’s 6 x 6 ten-wheeler cargo truck for use in MINDEX’s
mining operations in Binaybay, Bigaan, San Teodoro, Oriental Mindoro, at
the stipulated rental of ‘P300.00 per hour for a minimum of eight hours a
day or a total of P2,400.00 daily.’ MINDEX had been paying the rentals
until April 10, 1991.
“Unknown to Morillo, on April 11, 1991, the truck was burned by
unidentified persons while it was parked unattended at Sitio Aras, Bigaan,
San Teodoro, Oriental Mindoro, due to mechanical trouble. The findings of
the Mindoro Oriental Integrated National Police in their investigation report
read:
‘3. On 121005H April 1991, Mr. Alexander Roxas, project coordinator of MINDEX
MINING CORP. reported to this office that on the morning of 12 April 1991 while
he was supposed to report for his work at their office at Sitio Tibonbon, Bigaan, San
Teodoro, Oriental Mindoro, he x x x noticed that their hired 6 x 6 Ten wheeler Cargo
Truck temporarily parked at Sitio Aras, Bigaan, San Teodoro, Oriental Mindoro for
Alpha Engine Trouble was burned on the night of April 11, 1991 by still unidentified
person.
‘x x x x x x x x x
‘5. x x x Based also on the facts gathered and incident scene searched it was also
found out that said 6 x 6 Ten Wheeler Cargo Truck was burned by means of using
coconut leaves and as a result of which said 6 x 6 was totally burned excluding the
engine which was partially damaged by still undetermined amount.’
“Upon learning of the burning incident, Morillo offered to sell the truck
to MINDEX but the latter refused. Instead, it replaced the vehicle’s burned
tires and had it towed to a shop for repair and overhauling.
“On April 15, 1991, Morillo sent a letter to Mr. Ami Isberg, the Finance
Manager of MINDEX, thru Mr. Ramoncito Gozar, Project Manager,
proposing the following:
‘I have written to let you know that I am entrusting to you the said vehicle in the
amount of P275,000.00 which is its cost price. I
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VOL. 379, MARCH 12, 2002 149

will not charge your company for the encumbrance of P76,800 + since you used it as
my friendly gesture on account of the unforeseen adversity.
‘In view of the tragic happening, I am asking you to pay us, in a way which will
not be hard for you to settle to pay us in four installment monthly as follows:
‘First payment - April 25/91 P[1]50,000.00

‘Second payment - May 15/91 50,000.00
‘Third payme(n)t - June 15/91 50,000.00
‘Fourth payme(n)t - July 15/91 25,000.00

TOTAL P275,000.00
‘I promise to relinquish all the necessary documents upon full payment of said account.
“Through Mr. Gozar, MINDEX responded by a handwritten letter to his

cousin Malou (wife of Ephraim Morillo), expressing their reservations on
the above demands due to their tight financial situation. However, he made
the following counter offers:
‘a) Pay the rental of the 6 x 6 truck (actual) in the amount of

P76,000.00.
‘b) Repair and overhaul the truck on our own expenses and;
‘c) Return it to you on (A1) good running condition after repair.’
“Morillo replied on April 18, 1991, (1) that he will relinquish to

MINDEX the damaged truck; (2) that he is amenable to receive the rental in
the amount of P76,000.00; and (3) that MINDEX will pay fifty thousand
pesos (P50,000.00) monthly until the balance of P275,000.00 is fully paid. It
is noteworthy that except for his acceptance of the proffered P76,000.00
unpaid rentals, Morillo’s stand has virtually not been changed as he merely
lowered the first payment on the P275,000.00 valuation of the truck from
P150,000.00 to P50,000.00.
“The parties had since remained intransigent and so on August 1991,
Morillo pulled out the truck from the repair shop of MINDEX and had it
3
repaired elsewhere for which he spent the total amount of P132,750.00.”
(Citations omitted)
______________
3 CA Decision, pp. 1-4; Rollo, pp. 26-29.
150

Ruling of the Trial Court
After evaluating the evidence adduced by both parties, the Regional

Trial Court (RTC) found petitioner responsible for the destruction or
loss of the leased 6x6 truck and ordered it to pay respondent (1)
P76,000 as balance of the unpaid rental for the 6 x 6 truck with
interest of 12 percent from June 22, 1994 (the rendition of the
judgment) up to the payment of the amount; (2) P132,750
representing the costs of repair and overhaul of the said truck, with
interest rate of 12 percent until fully paid; and (3) P20,000 as

attorney’s fees for compelling respondent to secure the services of
counsel in filing his Complaint.
Ruling of the Court of Appeals
The appellate court sustained the RTC’s finding that petitioner was
not without fault for the loss and destruction of the truck and, thus,
liable therefor. The CA said:
“The burning of the subject truck was impossible to foresee, but not
impossible to avoid. MINDEX could have prevented the incident by
immediately towing the truck to a motor shop for the needed repair or by
having it guarded day and night. Instead, the appellant just left the vehicle
where its transfer case broke down. The place was about twelve (12)
kilometers away from the camp site of the appellant corporation and was
sparsely populated. It was guarded only during daytime. It stayed in that
place for two (2) weeks until it was burned on April 11, 1991 while its
transfer case was being repaired elsewhere. It was only after it had been
burned that the appellant had it towed to a repair shop.
“The appellant [respondent] was thus not free from fault for the burning
of the truck. It miserably failed to overcome the presumption of negligence
against it. Neither did it rescind the lease over the truck upon its burning. On
the contrary, it offered to pay P76,000.00 as rentals. It did not also complete
the needed repair. Hence, the appellee was forced to pull out the truck and
had it repaired at his own expense. Since under the law, the ‘lessee shall
return the thing leased, upon the termination of the lease, just as he receive
it,’ the appellant stands liable for the expenses incurred for the repair in the
4
aggregate amount of P132,750.00.”
______________
4 Ibid., pp. 8 & 33.
151
VOL. 379, MARCH 12, 2002 151

Nevertheless, the appellate court modified the Decision of the trial

court. The 12 percent interest rate on the P76,000 rentals and the
P132,750 repair costs, imposed by the RTC, was changed by the CA
to 6 percent per annum from June 22, 1994 to the date of finality of
the said Decision; and 12 percent per annum thereafter, if the
amounts adjudged would remain unpaid from such date of finality
until the rentals and the repair costs were fully paid. It affirmed the
award of attorney’s fees.
5
Hence, this Petition.
Issues
In its Memorandum, petitioner raises the following issues for the

Court’s consideration:
“4.1. Whether or not the Court of Appeals gravely erred in

finding that petitioner failed to overcome the presumption
of negligence against it considering that the facts show, as
admitted by the respondent, that the burning of the truck
was a fortuitous event.
“4.2. Whether or not the Court of Appeals gravely erred in
affirming the decision of the trial court finding petitioner
liable to pay unpaid rentals and cost of repairs.
“4.3. Whether or not the Court of Appeals also erred in affirming
the decision of the trial court finding petitioner liable to pay
6
attorney’s fees.”
This Court’s Ruling
The Petition is partly meritorious; the award of attorney’s fees

should be deleted.
______________
5 The case was deemed submitted for decision on June 21, 2001, upon the Court’s
receipt of respondent’s Memorandum, which was signed by Atty. Filibon Fabela
Tacardon. Petitioner’s Memorandum, signed by Atty. Ricardo P. C. Castro, Jr., was
received by the Court on January 29, 2001.
6 Petitioner’s Memorandum, p. 6; Rollo, p. 114.
152

First Issue:
Petitioner’s Negligence
Petitioner claims that the burning of the truck was a fortuitous7 event,
for which it should not be held liable pursuant to Article 1174 of the
Civil Code. Moreover, the letter of respondent dated April 15, 1991,
stating that the burning of the truck was an “unforeseen adversity,”
was an admission that should exculpate the former from liability.
We are not convinced. Both the RTC and the CA found petitioner
negligent and thus liable for the loss or destruction of the leased
truck. True, both parties may have suffered from the burning of the
truck; however, as found by both lower courts, the negligence of
petitioner makes it responsible for the loss. Well-settled is the rule
that factual findings of the trial court, particularly when affirmed by
the Court of Appeals, are binding on the Supreme Court. Contrary to
its allegations, petitioner has not adequately shown that the RTC and
the CA overlooked or disregarded significant facts and
circumstances that, when considered, would alter the outcome of the
8 9
disposition. Article 1667 of the Civil Code holds lessees
responsible for the deterioration or loss of the thing leased, unless
they prove that it took place without their fault.
______________
7 Article 1174 provides:
“Except in cases expressly specified by the law, or when it is otherwise declared by stipulation
or when the nature of the obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which though foreseen, were
inevitable.”
8 Spouses Belo v. Philippine National Bank, G.R. No. 134330, March 1, 2001, 353
SCRA 359; Republic v. CA, 349 SCRA 451, January 18, 2001; Halili v. CA, 287
SCRA 465, March 12, 1998.
9 “Art. 1667. The lessee is responsible for the deterioration or loss of the thing
leased, unless he proves that it took place without his fault. This burden of proof on
the lessee does not apply when the destruction is due to earthquake, flood, storm or
other natural calamity.”
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VOL. 379, MARCH 12, 2002 153

Fortuitous Event
In order for a fortuitous event to exempt one from liability, it is
necessary that one has committed no negligence or misconduct that
10
may have occasioned the loss. An act of God cannot be invoked to
protect a person who has failed to take steps to forestall the possible
adverse consequences of such a loss. One’s negligence may have
concurred with an act of God in producing damage and injury to
another; nonetheless, showing that the immediate or proximate
cause of the damage or injury was a fortuitous event would not
exempt one from liability. When the effect is found to be partly the
result of a person’s participation—whether by active intervention,
neglect or failure to act—the whole occurrence is humanized and

11
removed from the rules applicable to acts of God.
This often-invoked doctrine of “fortuitous event” or “caso
fortuito” has become a convenient and easy defense to exculpate an
obligor from liability. To constitute a fortuitous event, the following
elements must concur: (a) the cause of the unforeseen and
unexpected occurrence or of the failure of the debtor to comply with
obligations must be independent of human will; (b) it must be
impossible to foresee the event that constitutes the caso fortuito or, if
it can be foreseen, it must be impossible to avoid; (c) the occurrence
must be such as to render it impossible for the debtor to fulfill
obligations in a normal manner; and (d) the obligor must be free
12
from any participation in the aggravation of the injury or loss.
Article 1174 of the Civil Code states that no person shall be
responsible for a fortuitous event that could not be foreseen or,
______________
10 Tolentino, Civil Code of the Philippines, Vol. IV, 1991 ed., p. 126, citing Tan
Chiong Sian v. Inchausti & Co., 22 Phil. 152, March 8, 1912; Juan F. Nakpil & Sons
v. CA, 144 SCRA 596, 607, October 3, 1986. Cf. Metal Forming Corporation v.
Office of the President, 247 SCRA 731, 738-739, August 28, 1995.
11 Nakpil & Sons v. CA, supra, pp. 606-607.
12 Metal Forming Corp. v. Office of the President, 317 Phil. 853, 859; 247 SCRA
731, August 28, 1995; Vasquez v. Court of Appeals, 138 SCRA 553, 557, September
13, 1985, citing Lasam v. Smith, Jr. 45 Phil. 657, 661, February 2, 1924; Austria v.
CA, 148-A Phil. 462; 39 SCRA 527, June 10, 1971; Estrada v. Consolacion, 71
SCRA 523, 530, June 29, 1976.
154

though foreseen, was inevitable. In other words, there must be13 an

exclusion of human intervention from the cause of injury or loss.
A review of the records clearly shows that petitioner failed to
exercise reasonable care and caution that an ordinarily prudent
person would have used in the same situation. Witness Alexander
Roxas testified how petitioner fell short of ordinary diligence in
safeguarding the leased truck against the accident, which could have
been avoided in the first place. Pertinent portions of his testimony
are reproduced hereunder:
“ATTY. ACERON
Q Now, this Barangay Aras where the 6 x 6 truck had transmission
trouble, how far is it from the camp site of the defendant
corporation?
ALEXANDER ROXAS
A Twelve (12) kilometers, more or less, sir.
Q Is this Barangay Aras populated?
A Not so many, sir.
Q The place where the 6 x 6 truck had transmission trouble, how
far is the nearest house from it?
A Perhaps three hundred meters, sir.
Q And how many houses are within the three hundred meter radius
from the place where the truck had engine trouble?
A Ten, more or less, in scattered.
Q You said that after hauling several sand to be used in the camp
site the 6 x 6 truck had transmission trouble, what did the
company do after the truck had that engine trouble?
A For at least two weeks the truck was installed in the place where
the said truck had engine trouble.
Q Meaning in Barangay Aras?
A Yes, sir.
Q Was there any guard in that place by the company during the
time that the truck was in that place?
A Yes, sir, during daytime but at nighttime, there was no guard.
______________
13 Vasquez v. CA, supra, p. 557.
155
VOL. 379, MARCH 12, 2002 155

Q What happened to that 6 x 6 truck?

A In the month of March, 1991, the company dismissed thirteen
(13) to seventeen (17) employees and these employees came
from Barangays Aras, Botolan, Calsapa, Camatis and Tibon- bon
and on April 11, 1991, the 6 x 6 truck was burned.
Q How did you come to know that the 6 x 6 truck was burned on
April 11, 1991?
A I together with my daughter, I met the service of the company
near the ORMECO and I was informed by the Project Engineer
that the 6 x 6 truck was burned, so, we returned to San Teodoro
and have the incident blottered at the police station.
Q Aside from that, what other action did you undertake in
connection with the burning of the 6 x 6 truck?

A When we were at the police station, the Project Manager of the
company arrived and from the police station we proceeded to the
place where the 6 x 6 truck was burned and the Project Manager
took pictures of the 6 x 6 truck.
Q Now, did you come to know who was responsible or who were
responsible for the burning of the 6 x 6 truck?
A The responsible is the Mindex Resources Development
Corporation, and as far as I know, the persons who actually
burned the said 6 x 6 truck were the dismissed employees of the
Min-dex Resources Development Corporation.
Q These dismissed employees of the corporation, why were they
employed by the corporation?
A Because we have to make a road going to the mining site and in
the process of opening the road these dismissed employees
happened to be the owners of the land where the road will pass,
so, we paid the land. The corporation likewise gave jobs to the
14
owners of the land.”
As can be gleaned from the foregoing testimony, petitioner failed to

employ reasonable foresight, diligence and care that would have
exempted it from liability resulting from the burning of the truck.
Negligence, as commonly understood, is that conduct that naturally
or reasonably creates undue risk or harm to others. It may be a
failure to observe that degree of care, precaution or vigilance that
______________
14 TSN, November 24, 1992, pp. 9-13.
156

15
the circumstances justly demand; or to do any other act that would
be done by a prudent and reasonable person, who is guided by
considerations
16
that ordinarily regulate the conduct of human
affairs.
Second Issue:
Unpaid Rentals and Cost of Repairs
Petitioner proceeds to argue that “it should be deemed to have

already paid the unpaid rentals in the amount of P76,000.00,” and
that it should not be made to pay the P132,750 repair and overhaul
costs. Nothing in the records, not even in the documentary evidence

it presented, would show that it already paid the aforesaid amounts.
In fact, it seeks to avoid payment of the rental by alleging that
respondent already condoned it in his letter dated April 15, 1991.
However, a perusal of the letter would show that his offer not to
charge petitioner for the P76,000 rental was premised on the
17
condition that it would buy the truck.
Moreover, the RTC based the P76,000 rental and the costs of
repair and overhaul on Exhibit “B,” wherein Chito Gozar, the
Project Manager of Mindex Resources Development Corporation,
proposed through a letter dated April 17, 1991, the following: (1) to
pay the P76,000 rental, (2) to repair the truck at the expense of
petitioner, and (3) to return the truck in good running condition after
the repair.
Likewise, the nonpayment of the said amount was corroborated
by Roxas thus:
“Q During that time when the 6 x 6 truck was already burned and
when you went to the Petron Gasoline Station to inform
plaintiff about the burning, was the plaintiff paid any amount
for the rental of the 6 x 6 truck?
______________
15 Valenzuela v. CA, 253 SCRA 303, February 7, 1996. Cf. Quibal v.

Sandiganbayan (Second Division), 244 SCRA 224, May 22, 1995; Citibank, NA v.
Gatchalian, 240 SCRA 212, January 18, 1995.
16 Layugan v. Intermediate Appellate Court, 167 SCRA 363, 372-373, November
14, 1988; Bulilan v. COA, 300 SCRA 445, December 22, 1998.
17 See Exh. “C”; Records, p. 220.
157
VOL. 379, MARCH 12, 2002 157

A Before the burning of the 6 x 6 truck, the plaintiff Morillo was

18
already paid partially and there was a balance of P76,000.00.”
The P132,750 repair and overhaul costs was correctly granted by the
lower courts. Article 1667 of the Civil Code holds the lessee
responsible for the deterioration or loss of the thing leased. In
addition, Article 1665 of the same Code provides that “the lessee
shall return the thing leased, upon the termination of the lease, just
as he received it, save what has been lost or impaired by the lapse of
time, or by ordinary wear and tear, or from an inevitable cause.”
Courts begin with the assumption that compensatory damages are
for pecuniary losses that result from an act or omission of the
defendant. Having been found to be negligent in safeguarding the

leased truck, petitioner must shoulder its repair and overhaul costs to
make it serviceable again. Such expenses are duly supported by
receipts; thus, the award of P132,750 is definitely in order.
Third Issue:
Attorney’s Fees
We find the award of attorney’s fees to be improper. The reason

which the RTC gave—because petitioner had compelled respondent
to file an action against it—falls short of our requirement
19
in Scott
Consultants and Resource Development v. CA, from which we
quote:
“It is settled that the award of attorney’s fees is the exception rather than the
rule and counsel’s fees are not to be awarded every time a party wins suit.
The power of the court to award attorney’s fees under Article 2208 of the
Civil Code demands factual, legal, and equitable justification; its basis
cannot be left to speculation or conjecture. Where granted, the court must
explicitly state in the body of the decision, and not only in the dispositive
portion thereof, the legal reason for the award of attorney’s fees.”
______________
18 TSN, November 24, 1992, pp. 14-15.

19 242 SCRA 393, 406, March 16, 1995, per Davide Jr., CJ; see also Valiant
Machinery & Metal Corp. v. NLRC, 252 SCRA 369, January 25, 1996.
158

20
Moreover, a recent case ruled that “in the absence of stipulation, a
winning party may be awarded attorney’s fees only in case
plaintiff’s action or defendant’s stand is so untenable as to amount to
gross and evident bad faith.”
Indeed, respondent was compelled to file this suit to vindicate his
rights. However, such fact by itself will not justify an award of
attorney’s fees, when there is no sufficient showing of petitioner’s
bad faith in refusing to pay the said rentals as well as the repair and
21
overhaul costs.
WHEREFORE, the Petition is DENIED, but the assailed CA
Decision is MODIFIED by DELETING the award of attorney’s fees.
Costs against petitioner.
SO ORDERED.
Melo (Chairman), Vitug, Sandoval-Gutierrez and Carpio,

JJ., concur.
Petition denied, judgment modified.
Notes.—In order that a fortuitous event may exempt a person

from liability, it is necessary that he be free from negligence—an act
of God cannot be urged for the protection of a person who has been
guilty of gross negligence in not trying to avert its results. (Metal
Forming Corporation vs. Office of the President, 247 SCRA 731
[1995])
Factual findings of the trial court shall not be disturbed on appeal
unless the trial court has overlooked or ignored some fact or
circumstance of sufficient weight or significance which, if
considered, would alter the situation. (AHS/Philippines, Inc. vs.
Court of Appeals, 257 SCRA 319 [1996])
——o0o——
______________
20 National Power Corporation v. Philipp Brothers Oceanic, Inc., G.R. No.

126204, November 20, 2001, 369 SCRA 629, per Sandoval-Gutierrez, J.
21 National Steel Corporation v. CA, 283 SCRA 45, December 12, 1997.
159
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G.R. No. 138123. March 12, 2002. Mindex Resources Development, Petitioner, EPHRAIM MORILLO, Respondent

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12/12/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 379

144 SUPREME COURT REPORTS ANNOTATED

MINDEX RESOURCES DEVELOPMENT, petitioner, vs.

Appeals; Evidence; Well-settled is the rule that factual ﬁndings of the

VOL. 379, MARCH 12, 2002 145

Mindex Resources Development vs. Morillo

146 SUPREME COURT REPORTS ANNOTATED

Mindex Resources Development vs. Morillo

pecuniary losses that result from an act or omission of the defendant.—The

VOL. 379, MARCH 12, 2002 147

Mindex Resources Development vs. Morillo

PETITION for review on certiorari of a decision of the Court of

The facts are stated in the opinion of the Court.

Attorney’s fees cannot be granted simply because one was

Before us is a Petition for Review under Rule 45 of the Rules of

“WHEREFORE, the appealed decision is AFFIRMED with

1 Special Tenth Division. Written by Justice Salvador J. Valdez, Jr. (Acting

148 SUPREME COURT REPORTS ANNOTATED

The factual antecedents of the case are summarized by the CA in

VOL. 379, MARCH 12, 2002 149

‘First payment - April 25/91 P[1]50,000.00

‘Fourth payme(n)t - July 15/91 25,000.00

“Through Mr. Gozar, MINDEX responded by a handwritten letter to his

‘a) Pay the rental of the 6 x 6 truck (actual) in the amount of

“Morillo replied on April 18, 1991, (1) that he will relinquish to

3 CA Decision, pp. 1-4; Rollo, pp. 26-29.

150 SUPREME COURT REPORTS ANNOTATED

Ruling of the Trial Court

After evaluating the evidence adduced by both parties, the Regional

interest rate of 12 percent until fully paid; and (3) P20,000 as

Ruling of the Court of Appeals

4 Ibid., pp. 8 & 33.

VOL. 379, MARCH 12, 2002 151

Nevertheless, the appellate court modiﬁed the Decision of the trial

In its Memorandum, petitioner raises the following issues for the

“4.1. Whether or not the Court of Appeals gravely erred in

This Court’s Ruling

The Petition is partly meritorious; the award of attorney’s fees

152 SUPREME COURT REPORTS ANNOTATED

7 Article 1174 provides:

VOL. 379, MARCH 12, 2002 153

neglect or failure to act—the whole occurrence is humanized and

154 SUPREME COURT REPORTS ANNOTATED

though foreseen, was inevitable. In other words, there must be13 an

13 Vasquez v. CA, supra, p. 557.

VOL. 379, MARCH 12, 2002 155

Q What happened to that 6 x 6 truck?

connection with the burning of the 6 x 6 truck?

As can be gleaned from the foregoing testimony, petitioner failed to

14 TSN, November 24, 1992, pp. 9-13.

156 SUPREME COURT REPORTS ANNOTATED

Petitioner proceeds to argue that “it should be deemed to have

costs. Nothing in the records, not even in the documentary evidence

15 Valenzuela v. CA, 253 SCRA 303, February 7, 1996. Cf. Quibal v.

VOL. 379, MARCH 12, 2002 157

A Before the burning of the 6 x 6 truck, the plaintiff Morillo was

defendant. Having been found to be negligent in safeguarding the

We ﬁnd the award of attorney’s fees to be improper. The reason

18 TSN, November 24, 1992, pp. 14-15.