GR 113103; (June, 1997) (Digest)
G.R. No. 113103 June 13, 1997
NATIONAL POWER CORPORATION, THE NATIONAL POWER CORPORATION BOARD OF DIRECTORS, CONRADO D. DEL ROSARIO and MARCELINO ILAO, petitioners, vs. THE HON. COURT OF APPEALS, HON. TOMAS V. TADEO, JR., in his capacity as Presiding Judge, Regional Trial Court of Quezon City, Branch 105 and GROWTH LINK, INC., respondents. GROWTH LINK, INC., petitioner, vs. COURT OF APPEALS and NATIONAL POWER CORPORATION, respondents.
FACTS
Growth Link, Inc. (Growth Link) was a pre-qualified and accredited supplier of the National Power Corporation (NPC) since 1982, with total sales exceeding P60 million. NPC later refused to transact with and blacklisted Growth Link based on three grounds: (1) supplying allegedly second-hand piston skirts under Purchase Order No. 086653, which were initially accepted but later rejected, leading Growth Link to replace them under pressure; (2) supplying piston rings under Indent Order No. 07600 which allegedly did not reach their expected lifespan, though an NPC report later indicated a lack of evidence and unavailable damaged rings for inspection; and (3) supplying exhaust valve bodies under Purchase Order No. 095435 manufactured by Fuji Diesel Co., Ltd., which was not a licensed manufacturer of SEMT Pielstick, leading to immediate rejection. Growth Link filed a Petition for Mandamus with Preliminary Mandatory Injunction and Damages. The Regional Trial Court ruled in favor of Growth Link, ordering NPC to reinstate its accreditation, pay actual damages, and award attorney’s fees of P1,000,000.00 plus P5,000.00 per court appearance. The Court of Appeals affirmed the trial court’s decision but reduced the attorney’s fees to P500,000.00. Both parties filed separate petitions before the Supreme Court: NPC challenged the award of attorney’s fees as exorbitant, while Growth Link sought the affirmance in toto of the trial court’s decision.
ISSUE
The primary issue raised was the propriety and reasonableness of the award of attorney’s fees.
RULING
The Supreme Court dismissed both consolidated petitions for lack of merit. It held that the award of attorney’s fees was justified under Article 2208 of the Civil Code because NPC acted in gross and evident bad faith in refusing to satisfy Growth Link’s plainly valid claim and in arbitrarily blacklisting it without due process. The Court found NPC’s actions to be oppressive, warranting exemplary damages, which in turn supports the award of attorney’s fees. The amount of P500,000.00, as modified by the Court of Appeals, was deemed reasonable and not unconscionable considering the extent of the litigation, the vindication of Growth Link’s rights, and the professional standing of its counsel. The Supreme Court affirmed the Court of Appeals’ decision in its entirety.