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VILLANUEVA v SALVADORPetitioner: ENRICO VILLANUEVA and EVER PAWNSHOPRespondent: SPS. ALEJO SALVADOR and VIRGINIA SALVADORPonente: Garcia, J.

DOCTRINE: Doctrine in Red and Underlined: 2nd page.

FACTS:

1. Respondents, the Salvadors, secured a loan from Ever Pawnshop owned by Villanueva (Petitioner). The respondents subsequently took out a second loan and pledged jewelry items for both loans. Redemption tickets were issued.2. The redemption periods expired, but the Salvadors failed to redeem. After the expiration, their son paid P7,000 to be applied against the first loan. The Petitioners then agreed to extend the second loan upon payment of the 20% of the second loan on or before June 4, 1992.3. On June 4, 1992, Ever Pawnshop issued a notice announcing the public auction of the unredeemed pledges in the Manila Bulletin. It was to be held that same day.4. July 1, 1992, the Salvadors tried to pay 20% of the second loan, but was informed that the jewelry items were already sold. The CA later found out that the jewelry items were still in the store.5. A month later, the Salvadors tried to redeem the items pledged for the first loan, but was given unclear information as to its whereabouts.6. On August 7, 1992, Mr. Salvador tendered payment of the amount due on both loans, with a demand for the return of the jewelry thus pledged. Ever Pawnshop, however, refused to accept the tender.7. The Salvadors filed a complaint for damages against Petitioners for holding the auction sale without notice to the former.8. Barely two days after Villanueva et al., received summons, their counsel informed the Salvadors of his clients willingness to accept payment heretofore tendered for the redemption of the jewelry pledged to secure the first loan. The Salvadors, however, turned down this belated offer.9. RTC ruled in favor the Salvadors due to the lack of notice of the auction sale. CA affirmed.

ISSUES: 1. Whether the items of jewelry under the first loan were actually sold by the petitioners;2. Whether valid notice of the sale of the pledged jewelry was effected;3. Whether the award of P20,000.00 as moral damages and P5,000.00 as attorneys fees are proper; and

PROVISIONS:

RULING + RATIO: 1. YES. a. However, they were able to find a way to recover the jewelry items. This is evidenced by their belated overture to accept payment after spurning the initial offer to pay can only be due to the fact that, when respondents offered to pay the first time around, they (petitioners) no longer had possession of the jewelry items in question, having previously disposed of them.2. No. It was an invalid notice.a. Sec. 13 of PD 114 requires prior notice of the auction sale to the party who pledged the item.b. The requirement is for the publication of such notice once in at least two daily newspapers during the week preceding the date of the auction sale.c. In this case, it was only published in 1 newspaper, and it was done on the very same day as the auction sale.3. No, the award of moral damages and attorneys fees are not proper.a. As to MORAL DAMAGES:i. Clear it is from the above that before moral damages may be assessed thereunder, the defendants act must be vitiated by bad faith or that there is willful intent to injure. Simply put, moral damages cannot arise from simple negligence.ii. As aptly pointed out by petitioners, the trial court concluded that the respondents cause of action arose merely from the negligence of the herein [petitioners]. It was only simple negligence.b. As to Attorneys Fees: It must be struck down because both the CA and Trial court failed to explain respondents entitlement thereto.i. As a matter of sound practice, an award of attorneys fee has always been regarded as the exception rather than the rule.ii. Counsels fees are, to be sure, not awarded every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate.iii. Attorneys fees, as part of damages, are assessed only in the instances specified in Article 2208 of the Civil Code.iv. And it is necessary for the trial court to make express findings of fact and law that would bring the case within the exception.v. In short, the factual, legal or equitable justification for the award must be set forth in the text of the decision. The matter of attorneys fees cannot be touched only in the fallo of the decision, else the award should be thrown out for being speculative and conjectural.vi. Certainly not lost on the Court is the fact that petitioners, after being served with summons, made an attempt to obviate litigation by offering to accept tender of payment and return the jewelry. This offer, however belated, could have saved much expense on the part of both parties, as well as the precious time of the court itself. The respondents chose to turn down this offer and pursue judicial recourse. With this in mind, it hardly seems fair to award them attorneys fees at petitioners expense.

DISPOSITION

WHEREFORE, with the MODIFICATION that the awards of moral damages and attorneys fees are deleted, the decision under review is hereby AFFIRMED. No pronouncement as to cost. SO ORDERED.