"Xxx.
Meanwhile, Section 3(f) of Republic Act No. 3019 states:
(f) Neglecting or refusing, after due demand or request, without sufficient justification, to act within a reasonable time on any matter pending before him for the purpose of obtaining, directly or indirectly, from any person interested in the matter some pecuniary or material benefit or advantage, or for the purpose of favoring his own interest or giving undue advantage in favor of or discriminating against any other interested party.
The violation of this provision has the following elements:
[1.] The offender is a public officer;
[2.] The said officer has neglected or has refused to act without sufficient justification after due demand or request has been made on him;
[3.] Reasonable time has elapsed from such demand or request without the public officer having acted on the matter pending before him; and
[4.] Such failure to so act is for the purpose of obtaining, directly or indirectly, from any person interested in the matter some pecuniary or material benefit or advantage in favor of an interested party, or discriminating against another.112
Petitioner alleges that respondents neglected to respond to its December 29, 2009 letter within the 15-day period required by law. According to petitioner's, this demonstrates respondents' malicious intent in increasing petitioner's rental arrears.113 Moreover, respondents' refusal to heed petitioner's requests to alter the schedule of its unpaid rental obligations, and refusal to create a Joint Committee, were unreasonable and oppressive acts which failed to give effect to the objective of the lease.114
We are not convinced.
The alleged delay in responding to petitioner's letter beyond the 15-day period under Section 5(a) of Republic Act No. 6713, by itself, is not sufficient to establish malice. There must be intentional inaction or deliberate refusal to act on the part of the public officer to do what is incumbent upon him or her. Moreover, the inaction or refusal to act must be unjustified.
In Lacap v. Sandiganbayan,115 the mayor of Masantol, Pampanga was convicted for violation of Section 3(f) of Republic Act No. 3019 because of her intentional inaction or deliberate refusal to act on an application for mayor's permit despite submission of complete requirements. Lacap rule that the mayor's refusal to act on the application was unjustified and was motivated by her personal grudges against and political rivalry with the applicant:
The Constitution mandates that: "Public office is a public trust. Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives." Thus, "[they] are called upon to act expeditiously on matters pending before them. For only in acting thereon either by signifying approval or disapproval may the [public] continue on to the next step of the bureaucratic process. On the other hand, official inaction brings to a standstill the administrative process and the [public] is left in the darkness of uncertainty."
In an application for a mayor's permit or license to do business in a municipality or city, the procedure is fairly standard and uncomplicated. It requires the submission of the required documents and the payment of the assessed business taxes and fees. In case of failure to comply with the requirements, the application deserves to be disapproved. If the application is compliant, then approval is the action to be taken. An inaction or refusal to act is a course of action anathema to public service with utmost responsibility and efficiency. If the deliberate refusal to act or intentional inaction on an application for mayor's permit is motivated by personal conflicts and political considerations, it thus becomes discriminatory, and constitutes a violation of the Anti-Graft and Corrupt Practices Act.116 (Citations omitted)
In this case, the Ombudsman found no proof of the alleged delay and/or refusal of respondents to perform their obligations under RMOA:
There is no proof of the alleged delay and/or refusal of respondents to perform their obligations under RMOA. Records show that the parties' dispute hinges on who actually defaulted in their contractual obligations. Even assuming that there was a delay or refusal to perform an act/s on the part of respondents, there is no showing that the same was unjustified or for the purpose of securing material or pecuniary benefits from interested parties and/or to discriminate complainant.
To note, BCDA's obligation under the RMOA has been in existence prior to the assumption of office of herein respondents, as shown by the letter-reply of BCDA signed by its then President and CEO Narciso Abaya, which letter-reply complainant claims was sent only after 60 days from the time it sent its letter request.117 (Emphasis supplied)
In addition, petitioner failed to show that respondents' refusal to create a joint committee to settle a dispute was unjustified. Records show that respondents have previously denied the creation of a joint committee and suspension of payments as it found no compelling reason to grant petitioner's requests:
This refers to your letter dated December 29, 2009, which is a response to BCDA's demand letter of December 2, 2009.
....
We reiterated our pos1t10n on the matter contained in our December 2, 2009 letter. The OSAC has been fully established and functional the way it was envisioned in all other special economic zones (SEZs). Per the report submitted by JHMC/OSAC, the causes of delay in the processing of permits are not attributable to OSAC's failure to fulfill its duties in the timely issuance and/or endorsement of permits to appropriate agencies but to the incomplete and incorrect submission of documentary requirements by CJHDC, its subsidiaries and its locators. It is clear in the report of JHMC that the OSAC is not remiss in reminding CJHDC, its subsidiaries and its locators through constant follow-ups, written or thru telephone calls, to submit a complete application for the permits to be processed. JHMC even allowed your locators to operate their business within the JSHEZ while their permits are being processed. With this kind of accommodation we cannot think of how CJHDC can justify that it was unable to internally generate revenues from sale of its inventory because of alleged delays of issuance of permits by the OSAC.
We maintain that BCDA and the JHMC/OSAC is compliant to the provisions of the RMOA more particularly the provisions under Article IV, Section 3 and Article V on the establishment of the OSAC, and that, there is no more compelling reason for CJHDC to suspend payment and to convene a joint committee to resolve this alleged dispute.118
As previously discussed, petitioner did not even dispute its failure to submit complete requirements for its applications for permits and licenses. Unlike in Lacap, there is no discriminatory motive that this Court can infer from respondents alleged non-issuance of permits and clearances because its duty did not even arise. Mere delay in replying to the December 29, 2009 letter of petitioner is not indicative of respondents' malice. It must be shown that such delay is for the purpose of (1) "obtaining . . . from any person interested in the matter some pecuniary or material benefit," or (2) gaining "advantage in favor of an interested party," or (3) "discriminating against another."119
Petitioner attempts to prove BCDA's discrimination and antagonism against it through the following acts: (1) filing of a complaint for estafa against the officers of CJHDC; (2) publication of malicious advertisements against CJHDC, its officers and affiliates; and (3) publication of notice to the public which allegedly shows tortious interference with its third party contracts.120 These acts were supposedly calculated to discredit and destroy petitioner's reputation and shows a pattern of deceit and fraud by respondents to evade from complying with their contractual obligations.121
We fail to see how these acts are discriminatory against petitioner and violative of Section 3(f) of Republic Act No. 3019.1aшphi1 Respondents admitted the foregoing acts and explained the context behind them:
14. Apart from and in addition to CJH DevCo's breach of its financial obligations, BCDA also discovered that CJH DevCo committed other material and incurable breaches of its contractual obligations by undertaking several activities that were not only fraudulent, but also threatened the viability and efficient functioning of Camp John Hay. For instance, BCDA discovered that one of the properties that CJH DevCo dacioned to it under the 2008 RMOA had been previously sold in 1999 to a third person, Wilson Sy.
15. Consequently, BCDA filed a complaint for estafa with the National Prosecution Service of the Department of Justice, asking what CJH DevCo's responsible officers be prosecuted for estafa for having falsely pretended to own VOA Loghome No. 9 and to possess the power and right to transfer it to BCDA when in reality, CJH DevCo had already sold and transferred the ownership of the property to Wilson Sy as early as July 27, 1999. The case, entitled "Bases Conversion and Development Authority v. Robert John Sobrepena, et al.," was docketed as NPS No. XVI-12C-00136.
16. Moreover. it appears that the Housing and Land Use Regulatory Board (HLURB) wrote a letter dated March 14, 2012 to CJH DevCo, notifying it of its violation of Presidential Decree No. 957 with respect to the then Camp John Hay Suites[.]
....
17. BCDA also received reports about questionable business practices of CJH DevCo. For instance, Kim Sung Hwan, a Korean national who bought a unit in the Camp John Hay Suites from CJH DevCo, informed BCDA that, contrary to the clear provisions of the 1996 Lease Agreement, CJH DevCo misled and misrepresented to him and his family that its lease with BCDA had a guaranteed term of fifty (50) years. Moreover, Kim Sung Hwan disclosed that, contrary to CJH DevCo's promises to him and his family, CJH DevCo failed to deliver the unit despite the full payment of the purchase price.
18. Under these factual circumstances, BCDA caused the publication of a Notice in the April 10, 2012 issue of the Philippine Daily Inquirer. In furtherance of the public trust reposed in Respondents' public offices, BCDA informed the public of the foregoing events involving the properties in Camp John Hay[.]
....
19. Subsequently, on June 7 and 8, 2012, BCDA caused the publication of another Notice to inform the public that BCDA had terminated its lease with CJH DevCo. BCDA also requested all unit owners, sub-lessees, and locators in Camp John Hay "to register their interest and investments in the John Hay Special Economic Zone (JHSEZ) with the BCDA."122 (Citation omitted)
While this Court does not rule on the veracity of these factual allegations, We cannot infer that these acts were pursued to defraud and discredit petitioner. Instead, these acts were committed in response to petitioner's alleged breach of obligations. Any assertion of right against another necessarily opposes and competes with each other. Unless there is a clear showing of abuse of right, this Court will not infer malicious intent based on the exercise and protection of one's rights.
In Barons Marketing Corporation v. Court of Appeals,123 no abuse of right was imputed on a creditor exercising its right under Article 1248 of the Civil Code to refuse the debtor's proposal to pay in installments. The burden of proving bad faith in the exercise of rights falls on the party alleging the same:
Both parties agree that to constitute an abuse of rights under Article 19 the defendant must act with bad faith or intent to prejudice the plaintiff. They cite the following comments of Tolentino as their authority:
Test of Abuse of Right. - Modem jurisprudence does not permit acts which, although not unlawful, are antisocial. There is undoubtedly an abuse of right when it is exercised for the only purpose of prejudicing or injuring another. When the objective of the actor is illegitimate, the illicit act cannot be concealed under the guise of exercising a right. The principle does not permit acts which, without utility or legitimate purpose cause damage to another, because they violate the concept of social solidarity which considers law as rational and just. Hence, every abnormal exercise of a right, contrary to its socio-economic purpose, is an abuse that will give rise to liability. The exercise of a right must be in accordance with the purpose for which it was established, and must not be excessive or unduly harsh; there must be no intention to injure another. Ultimately, however, and in practice, courts, in the sound exercise of their discretion, will have to determine all the facts and circumstances when the exercise of a right is unjust, or when there has been an abuse of right.
The question, therefore, is whether private respondent intended to prejudice or injure petitioner when it rejected petitioner's offer and filed the action for collection.
We hold in the negative. It is an elementary rule in this jurisdiction that good faith is presumed and that the burden of proving bad faith rests upon the party alleging the same. In the case at bar, petitioner has failed to prove bad faith on the part of private respondent. Petitioner's allegation that private respondent was motivated by a desire to terminate its agency relationship with petitioner so that private respondent itself may deal directly with Meralco is simply not supported by the evidence. At most, such supposition is merely speculative.
Moreover, we find that private respondent was driven by very legitimate reasons for rejecting petitioner's offer and instituting the action for collection before the trial court. As pointed out by private respondent, the corporation had its own "cash position to protect in order for it to pay its own obligations." This is not such "a lame and poor rationalization" as petitioner purports it to be. For if private respondent were to be required to accept petitioner's offer, there would be no reason for the latter to reject similar offers from its other debtors. Clearly, this would be inimical to the interests of any enterprise, especially a profit-oriented one like private respondent. It is plain to see that what we have here is a mere exercise of rights, not an abuse thereof. Under these circumstances, we do not deem private respondent to have acted in a manner contrary to morals, good customs or public policy as to violate the provisions of Article 21 of the Civil Code.
....
It may not be amiss to state that petitioner's contract with private respondent has the force of law between them. Petitioner is thus bound to fulfill what has been expressly stipulated therein. In the absence of any abuse of right, private respondent cannot be allowed to perform its obligation under such contract in parts. Otherwise, private respondent's right under Article 1248 will be negated, the sanctity of its contract with petitioner defiled. The principle of autonomy of contracts must be respected.124 (Emphasis supplied, citations omitted)
In Barons, this Court held that parties are bound by the express stipulations in the contract, and the refusal of a creditor to accept payment of due and demandable obligation in parts is not an abuse of its rights.
Much like in Barons, petitioner in this case cannot compel BCDA to restructure the payment of its due and demandable obligation or to unilaterally suspend payments. Petitioner fails to cite any provision in the RMOA which compels the BCDA to agree to Camp John Hay Development's proposed payment schemes. Hence, BCDA, as the lessor, cannot be compelled to receive in installment payments of petitioner's due and demandable rental.
Article 1248 of the Civil Code states:
ARTICLE 1248. Unless there is an express stipulation to that effect, the creditor cannot be compelled partially to receive the prestations in which the obligation consists. Neither may the debtor be required to make partial payments.
However, when the debt is in part liquidated and in part unliquidated, the creditor may demand and the debtor may effect the payment of the former without waiting for the liquidation of the latter. (1169a)
Here, the parties are bound by the terms of payment in the RMOA:
a. LESSEE shall, upon signing of this Agreement and without further need of demand, pay LESSOR Pesos: One Hundred Mullion (Php100,000,000.00) in cash.ᇈWá‘HIL
b. LESSEE shall pay LESSOR Pesos: One Hundred Eight Mullion Three Hundred Forty One Thousand One Hundred Eighteen (Php180,341,118.00) by way of dacion en pago of various properties as detailed in Annex "B".
....
c. LESSEE shall pay LESSOR the remaining balance of Pesos: Two Billion Four Hundred Six Million One Hundred Forty Thousand Five Hundred Twenty Five (Php2,406,140,525.00), plus three percent (3%) interest on a diminishing balance basis, without further need of demand, after application of cash and property payments under Paragraphs (a) and (b) of this Section for a period of fifteen (15) years with three (3) years moratorium on the principal.
c.1. For calendar years 1 July 2008 to 30 June 2011, the three percent (3%) interest due on the remaining balance during the three (3) year moratorium shall be payable every 30th of June.
c.2. For calendar years 1 July 2011 to 30 June 2023, the principal of the remaining balance shall be paid in twelve equal yearly installments plus three percent (3%) interest per annum on a diminishing balance basis every 30th of June.
However, for the period 1 July 2011 to 30 June 2013, the annual principal due for the period shall be paid in twelve equal monthly installments plus three percent (3%) interest per annum on a diminishing balance basis every end of the month.
If LESSEE fails to pay any amortization, a surcharge of 3% per annum shall be imposed on the principal and the LESSOR can automatically terminate this Agreement pursuant to Article VIII below.125
However, in its letters to respondents, petitioner proposed a different payment scheme contrary to the schedule of payments stipulated in the RMOA.126 Moreover, it imposed a condition on its proposed settlement:
The Board of Directors of CJHDevCo resolved to condition the above settlement scheme on the BCDA's commitment to issue, within a thirty (30)-day period from the submission of all pertinent documentary requirements, all business, building and other developmental permits, certificates and licenses, local and national, from all government agencies to facilitate construction and commercial operations in Camp John Hay. It is understood that where by law, a permit, license, certificate may not directly be issued by the BCDA, as envisioned in the RMOA, to cause the issuance of all such permits, licenses, and certificates. It shall not be sufficient to simply endorse the applications therefore to some government agency in that the BCDA/JHMC shall remain contractually bound to see the timely and actual issuance of all permits, licenses, and certificate applied for by CJHDevCo and its locators.127
Respondents denied these proposals for being prejudicial to the best interest of the government and opted to exercise its right to demand the full payment of the rental obligations due under the RMOA:
43. BCDA did reject CJH DevCo's proposals, and legitimately so. After due deliberation, it was decided that it would not be to the best interest of Government if BCDA were to accept CJH DevCo's offer of settlement by paying only the amount of P428,948.913.00, the full payment of which was even conditional. Hence on December 6, 2011, Respondent Casanova, on behalf of BCDA, wrote a letter to CJH DevCo to demand the payment of its current obligation of P581,504,590.00.128
All considered, it cannot be said that respondents had any obligation to grant the proposed restructuring of petitioner's obligations. Thus, there is no unjust refusal to act that can be imputed to respondents' denial of the creation of a joint committee and suspension of due rental payments as petitioner is bound by the schedule of payment stipulated in the RMOA. One party cannot unilaterally change the terms of the contract. Hence, the Ombudsman was correct in dismissing the complaint for lack of probable cause for violation of Section 3(e) and (f) of Republic Act No. 3019.
Xxx."
THIRD DIVISION
[ G.R. No. 225565, January 13, 2021 ]
CAMP JOHN HAY DEVELOPMENT CORPORATION, REPRESENTED BY MANUEL T. UBARRA, JR., PETITIONER, VS. OFFICE OF THE OMBUDSMAN, ARNEL PACIANO D. CASANOVA, FELICITO C. PAYUMO, ZORAYDA AMELIA C. ALONZO, TERESITA A. DESIERTO, MA. AURORA GEOTINA-GARCIA, FERDINAND S. GOLEZ, ELMAR M. GOMEZ AND MAXIMO L. SANGIL, RESPONDENTS.
