G.R. Nos. L-66870-72, June 29, 1985
Agapito Magbanua, et al., petitioners, vs. Hon. Intermediate Appellate Court, et al., respondents.

FACTS

The petitioners, Agapito Magbanua and five others, filed separate complaints before the defunct Court of Agrarian Relations in San Carlos City, Negros Occidental. They alleged they were share tenants of the private respondents, the Perezes. The core grievance was that the respondents, through their overseer, diverted the free flow of irrigation water to the petitioners’ farm lots, causing portions of their landholdings to dry up and their palay crops to wilt. This act was allegedly coupled with a directive for the petitioners to vacate their areas due to the induced lack of water. The petitioners prayed to be declared leasehold tenants and sought the payment of attorney’s fees and various damages.
The trial court ruled in favor of the petitioners. It declared them agricultural lessees entitled to peaceful cultivation, permanently enjoined the respondents from disrupting the water supply, and ordered the payment of moral and exemplary damages of P10,000 each, plus P5,000 in attorney’s fees. On appeal, the Intermediate Appellate Court affirmed the judgment but deleted the awards for moral and exemplary damages and attorney’s fees. It found no evidence of fraudulent or bad faith dealings by the respondents and no basis for attorney’s fees under Article 2208 of the Civil Code. The petitioners then elevated the case to the Supreme Court, seeking reinstatement of the deleted monetary awards.

ISSUE

Whether the Intermediate Appellate Court committed a reversible error in deleting the awards for moral damages, exemplary damages, and attorney’s fees granted by the trial court.

RULING

The Supreme Court granted the petition and reinstated the awards, albeit in reduced amounts. The legal logic centered on the application of the Civil Code provisions on damages in the context of agrarian relations. The Court held that the petitioners were entitled to moral damages under Article 2219 in relation to Article 21 of the Civil Code. Article 21 provides that any person who willfully causes loss or injury to another in a manner contrary to morals, good customs, or public policy shall compensate for the damage. The respondents’ act of unjustifiably diverting irrigation water to force the tenants to vacate constituted a willful disturbance of their peaceful possession and cultivation rights, an act contrary to the public policy of protecting tenant farmers.
Furthermore, the Court ruled that exemplary damages were warranted under Article 2232 of the Civil Code. The respondents’ oppressive manner in dealing with the petitioners—using water deprivation as a tool for ejectment—justified the imposition of exemplary damages to serve as a deterrent. Consequently, attorney’s fees were also deemed recoverable as a natural consequence of the petitioners being compelled to litigate to protect their rights. The Court, however, exercising its sound discretion, modified the amounts awarded by the trial court, granting each petitioner P1,000 in moral damages, P500 in exemplary damages, and a collective P1,000 in attorney’s fees, all payable jointly and severally by the private respondents.