G.R. No. L-48250 December 28, 1979
GRAND UNION SUPERMARKET, INC. and NELIA SANTOS FANDINO, petitioners, vs. JOSE J. ESPINO JR., and THE HONORABLE COURT OF APPEALS, respondents.

FACTS

Jose J. Espino Jr., a corporate executive, was shopping with his family at Grand Union Supermarket. He picked up a small file, placed it in his shirt pocket, and forgot to pay for it. Upon exiting, a store guard stopped him. Espino immediately apologized and offered to pay. However, the guard escorted him to a rear office in view of other customers, where he was made to write an incident report. He was then taken to manager Nelia Santos-Fandino. Despite his explanations and offer to pay, Fandino declared, “Ano, nakaw na naman ito,” fined him P5.00 as an “incentive” for the guards, and made him pay for the file separately at a checkout counter while other customers stared. Espino felt profound humiliation.
The trial court dismissed Espino’s complaint for damages. The Court of Appeals reversed, awarding moral and exemplary damages plus attorney’s fees. The supermarket and manager appealed to the Supreme Court, arguing they acted within their rights to protect property.

ISSUE

Did the petitioners act with such wanton disregard of the respondent’s rights as to justify the award of damages?

RULING

Yes, but the Supreme Court modified the damages awarded. The Court found the petitioners liable for moral damages but eliminated exemplary damages. The guard had probable cause to stop Espino, as an unpaid item was in his possession. The initial investigation was a lawful exercise of the right to protect property under Article 429 of the Civil Code. However, the manager’s subsequent actions transgressed this right. Her public accusation of theft (“nakaw na naman ito”), her imposition of an arbitrary fine, and her subjecting Espino to public scrutiny and embarrassment constituted an abusive and wanton manner of investigation. This abuse violated the principles of human dignity and Article 21 of the Civil Code, which holds a person liable for willfully causing injury in a manner contrary to morals. Thus, moral damages were warranted for the humiliation suffered.
However, exemplary damages were disallowed. These damages are punitive and require a showing of wrongful conduct in a wanton, fraudulent, or oppressive manner. The Court held that the petitioners’ initial acts were done in good faith to protect their property. Since exemplary damages are not intended to compensate but to punish and deter, and the core act of apprehension was based on probable cause, the factual basis for a punitive award was absent. Consequently, the Supreme Court reduced the moral damages to P5,000.00, reduced attorney’s fees to P2,000.00, and ordered the return of the P5.00 fine.