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Torts and Damages Case Digest: Francisco v. GSIS (1963)

G.R. No. L-18287             March 30, 1963

Lessons Applicable: Cases where Moral damages are allowed (Torts and Damages)
Laws Applicable: Article 2208,Article 2220


  • October 10, 1956: Trinidad J. Francisco, in consideration of a loan in the amount of P400,000 out of which the sum of P336,100 was released to her, mortgaged in favor of the Government Service Insurance System a parcel of land containing an area of 18,232 square meters within 10 years in monthly installments of P3,902.41, and with interest of 7% per annum compounded monthly.
  • January 6, 1959: GSIS extrajudicially foreclosed the mortgage
  • February 20, 1959: Trinidad's father Atty. Vicente J. Francisco, sent a letter to the general manager of GSIS propsing to pay P30,000 and pay the balance from the P5,000 monthly rentals less P350 for the necessary expenses. 
    • GSIS Board approved the request
  • February 28, 1959: Atty. Francisco remitted a check for P30,000 and an official receipt was issued
  • March 4, 1960: Trinidad remitted P44,121.29 and soon, P24,604.81.  All were issued a receipt
  • Then the System sent 3 letters asking for a proposal for the payment of her indebtedness since the 1-year redemption period has expired
  • Atty. Francisco sent a letter of protest requesting the proper corrections since their proposal have already commenced
  • GSIS contends that for the foreclosure done, Francisco should pay attorney's fees of P35,644.14, publication expenses, filing fee of P301.00, and surcharge of P23.64 so remittances were not enough
  • GSIS filed for specific performance
  • RTC: Atty. Francisco's offer was unqualifiedly accepted, and was binding
    • called attention to the unconscionability of defendant's charging the attorney's fees, totalling over P35,000.00; and this point appears well-taken, considering that the foreclosure was merely extra-judicial, and the attorneys' work was limited to requiring the sheriff to effectuate the foreclosure
ISSUE: W/N Francisco should be awarded Moral damages where there is breach of contract regarding the redemption proposal but no malicious intent

HELD: NO. Affirmed.

  • Nor was there error in the appealed decision in denying moral damages, not only on account of the plaintiff's failure to take the witness stand and testify to her social humiliation, wounded feelings, anxiety, etc., as the decision holds, but primarily because a breach of contract like that of defendant, not being malicious or fraudulent, does not warrant the award of moral damages under Article 2220 of the Civil Code
  • There is no basis for awarding exemplary damages either, because this species of damages is only allowed in addition to moral, temperate, liquidated, or compensatory damages, none of which have been allowed in this case, for reasons herein before discussed
  • As to attorneys' fees, we agree with the trial court's stand that in view of the absence of gross and evident bad faith in defendant's refusal to satisfy the plaintiff's claim, and there being none of the other grounds enumerated in Article 2208 of the Civil Code, such absence precludes a recovery. The award of attorneys' fees is essentially discretionary in the trial court, and no abuse of discretion has been shown.