FIRST DIVISION

[G.R. No. 115902. September 27, 1995.]

FILINVEST CREDIT CORPORATION , petitioner, vs. HON. COURT OF

APPEALS and SPOUSES EDILBERTO and MARCIANA TADIAMAN ,
respondents. cdlex

Labaguis, Loyola, Atienza, Felipe, Santos & Associates for petitioner.

Napoleon R. Sta. Romana for private respondents.

SYLLABUS

1. REMEDIAL LAW; PROVISIONAL REMEDIES; REPLEVIN; RULE IN CARRYING

OUT THE WRIT. — The Court of Appeals correctly ruled that Filinvest is liable for damages
not because it commenced an action for replevin to recover possession of the truck prior
to its foreclosure, but because of the manner it carried out the seizure of the vehicle.
Sections 3 and 4, Rule 60 of the Rules of Court are very clear and direct as to the procedure
for the seizure of property under a writ of replevin. In the instant case, it was not the sheriff
or any other proper o cer of the trial court who implement the writ of replevin. Because it
was aware that no other person can implement the writ, Filinvest asked the trial court to
appoint a special sheriff. Yet, it used its own employees who misrepresented themselves
as deputy sheriffs to seize the truck without having been authorized by the court to do so.
Filinvest justi ed its seizure by citing a statement in Bachrach Motor Co. vs. Summers (42
Phil. 3 [1921]), to wit, "the only restriction on the mode by which the mortgagee shall
secure possession of the mortgaged property after breach of condition is that he must act
in an orderly manner and without creating a breach of the peace, subjecting himself to an
action for trespass." This justi cation is misplaced and misleading for Bachrach itself had
ruled that if a mortgagee cannot obtain possession of a mortgaged property for its sale
on foreclosure, it must bring a civil action either to recover such possession as a
preliminary step to the sale or to obtain judicial foreclosure. cdasia

2. ID.; ID.; ID.; UPON THE DEFAULT OF THE MORTGAGOR OF HIS OBLIGATION,
MORTGAGEE IS ENTITLED TO INSTITUTE ACTION THEREFOR. — Replevin is, of course, the
appropriate action to recover possession preliminary to the extrajudicial foreclosure of a
chattel mortgage. Filinvest did in fact instituted such an action and obtained a writ of
replevin. And, by ling it, Filinvest admitted that it cannot acquire possession of the
mortgaged vehicle in an orderly or peaceful manner. Accordingly, it should have left the
enforcement of the writ in accordance with Rule 60 of the Rules of Court which it had
voluntarily invoked. Parenthetically, it must be observed that the trial court erred in holding
that the action for replevin was "not in order as [Filinvest] is not the owner of the property
(Sec. 2 par. [a] Rule 60)." It is not only the owner who can institute a replevin suit. A person
"entitled to the possession" of the property also can, as provided in the same paragraph
cited by the trial court. Upon the default by the mortgagor in his obligations, Filinvest, as a
mortgagee, had the right to the possession of the property mortgaged preparatory to its
sale in a public auction.
3. CIVIL LAW; HUMAN RELATIONS; "GOOD FAITH"; DEFINED. — In common
usage, good faith is ordinarily used to describe that state of mind denoting honesty of
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 purpose, freedom from intention to defraud, and, generally speaking, means being faithful
to one's duty or obligation. It consists of the honest intention to abstain from taking an
unconscionable and unscrupulous advantage of another.
4. ID.; DAMAGES; MORAL DAMAGES; MAY BE RECOVERED IN CASES
INVOLVING ACTS REFERRED TO IN ARTICLE 21 OF THE CIVIL CODE. — Anent the moral
damages, the trial court ruled that the acts of the petitioner were in total disregard of
Articles 19, 20, and 21 of the Civil Code. It added that the petitioner had not only caused
actual damages in lost earnings, but had also caused the private respondents to suffer
indignities at the hands of the petitioner's personnel in hiding the truck in question,
misleading them, and making them work for the release of the truck for about two weeks,
thereby justifying the award of moral damages along with the exemplary and other
damages in favor of the private respondents. We agree with this nding of the trial court.
The petitioner's acts clearly fall within the contemplation of Articles 19 and 21 of the Civil
Code. The acts of fraudulently taking the truck, hiding it from the private respondents, and
removing its spare parts show nothing but a willful intention to cause loss to the private
respondents that is punctuated with bad faith and is obviously contrary to good customs.
Thus, the private respondents are entitled to the moral damages they prayed for, for under
Article 2219 of the Civil Code, moral damages may be recovered in cases involving acts
referred to in Article 21 of the same Code. cdtai

5. ID.; ID.; EXEMPLARY DAMAGES; DETERMINATION THEREOF ADDRESSED TO

THE SOUND DISCRETION OF THE COURT UPON PROOF OF PLAINTIFF'S ENTITLEMENT
THERETO. — The award of exemplary damages is in order in view of the wanton, fraudulent,
and oppressive manner by which the petitioner sought to enforce its right to the
possession of the mortgaged vehicle. Article 2232 of the Civil Code provides: In contracts
and quasi-contracts, the court may award exemplary damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive, or malevolent manner. Of course, a plaintiff need
not prove the actual extent of exemplary damages, for its determination is addressed to
the sound discretion of the court upon proof of the plaintiff's entitlement to moral,
temperate, or actual or compensatory damages.
6. LEGAL ETHICS; ATTORNEY'S FEES; AWARD THEREOF, NOT PROPER IN THE
ABSENCE OF BAD FAITH IN FILING THE COMPLAINT. — The award for attorney's fees
must, however, be set aside. There is no question that the petitioner led in good faith its
complaint for replevin and damages to protect its rights under the promissory note and
the chattel mortgage. That the private respondents had defaulted in its obligation under
the promissory note thereby authorizing the petitioner to seek enforcement of its claim
thereunder and proceed against the mortgage of the vehicle was duly recognized by the
trial court by its judgment against the private respondents incorporated in the rst part of
the dispositive portion. The private respondents did not appeal therefrom. There would
then be no basis for awarding attorney's fees in favor of the private respondents for
whatever physical suffering, mental anguish, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, or any other similar injury they had
suffered, even if proven, were only such as are usually caused to parties haled into court as
a defendant and which are not compensable, for the law could not have meant to impose a
penalty on the right to litigate.

DECISION

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 DAVIDE, JR. , J : p

This petition for review on certiorari seeks to set aside the decision of the Court
of Appeals in CA-G.R. CV No. 30231 1 affirming in toto the decision of the Regional Trial
Court (RTC) of San Fernando (Pampanga), Branch 46, in Civil Case No. 6599. 2 cdt

The antecedent facts are summarized by the Court of Appeals as follows:

Defendants-appellees, spouses Edilberto and Marciana Tadiaman,
residents of Cabanatuan City, purchased a 10-wheeler Isuzu cargo truck from
Jordan Enterprises, Inc., in Quezon City, in installments. Said spouses executed a
promissory note for P196,680.00 payable in 24 monthly installments in favor of
Jordan Enterprises, Inc., and a Chattel Mortgage over the motor vehicle purchased
to secure the payment of the promissory note. Jordan Enterprises, Inc. assigned
its rights and interests over the said instruments to Filinvest Finance and Leasing
Corporation, which in turn assigned them to plaintiff-appellant Filinvest Credit
Corporation.

Subsequently, the spouses Tadiaman defaulted in the payment of the

installments due on the promissory note, and plaintiff-appellant filed an action for
replevin and damages against them with the court below. Upon motion of the
plaintiff-appellant, a writ of replevin was issued, and the truck was seized in the
province of Isabela, by persons who represented themselves to be special sheriffs
of the court, but who turned out to be employees of the plaintiff-appellant. The
truck was brought by such persons all the way back to Metro Manila. aisadc

Thereafter, defendant spouses led a counterbond, and the lower court

ordered the return of the truck. This was not immediately implemented because
the defendant spouses were met with delaying tactics of the plaintiff-appellant,
and when they nally recovered the truck, they found the same to be
"cannibalized." This was graphically recounted in the report (Exhibit "3") of Deputy
Sheriff Anastacio Dizon, who assisted the spouses in recovering the vehicle,
excerpts of which are as follows:

"On February 14, 1983, the undersigned contacted Mr. Villanueva, Branch Manager
of the FILINVEST at Bo. Dolores, San Fernando, Pampanga and he gave the information
that the said Isuzu Cargo Truck, subject of the aforesaid Court Order, was already
delivered to their main garage at Bo. Talon, Las Piñas, Metro Manila. Mr. Villanueva further
told the undersigned that in order to effectively enforce the aforementioned Court Order,
the undersigned should discuss the matter with Mr. Telesforo (Jun) Isidro, Collection in-
charge, and Mr. Gaspar Antonio delos Santos, Vice President for Branch Administration of
the FILINVEST main office at Makati, Metro Manila.
On February 18, 1983, defendant Marciana Tadiaman, Atty. Benites and the
undersigned contacted Messrs. Gaspar Antonio delos Santos and Telesforo (Jun) Isidro at
the main o ce, FILINVEST at Paseo de Roxas, Makati, Metro Manila and we discussed the
smooth retaking of possession by the defendants of the 10-wheeler Isuzu Cargo Truck
with motor No. E 120-22041, Serial No. SPM 710164864. Messrs. Delos Santos and Isidro
alternatively argued that the Traveler's Insurance Company is one of the black listed
Insurance rms, so much so, it is only the company's lawyer who can direct the delivery of
the above-cited Cargo Truck to us. They told us to wait for the arrival of their Lawyer at
5:40 p.m., and we agreed that in the meantime that their lawyer is not around, the said
vehicle would not be transferred to any other place. cdta

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 Came 5:30 P.M., but the company's lawyer never arrived and we were told to go
back February 21, 1983. Mr. delos Santos nally told us that the company will not deliver
to us the said Cargo Truck until and after their company lawyer would say so.
On February 19, 1983, Mr. Felicisimo Hogaldo, Atty. Benites, defendant Marciana
Tadiaman, three policemen of Las Piñas, Metro Manila, and the undersigned went directly
to the FILINVEST garage at Bo. Talon, Las Piñas, Metro Manila and there contracted Mr.
Ismael Pascual, Custodian of all repossessed vehicles of the said company, and Mr. Pedro
Gervacio, Security Guard of the company assigned by the Allied Investigation Bureau at 6th
Floor, Ramon Santos Bldg. They told us that the 10-wheeler Cargo Truck subject of the
above-cited court order is not one of the vehicles listed in their in-coming and out-going
ledger books and they told us to examine their books.
Defendant Marciana Tadiaman told Messrs. Pedro Gervacio and Ismael Pascual that
she saw the above-mentioned Cargo-Truck last February 14, 1983 at the end corner of the
garage. And for that purpose she requested us, including Mr. Pascual and the Security
Guard, to inspect the site where the said truck was supposed to have been placed when
she for the first time saw it on February 14, 1983. cdasia

Unexpectedly, she saw and pointed to us on the site oil leaks on the ground which
she believed came from the vehicle we were looking for. We also saw skid marks of tires
of a truck starting from the site where the cargo truck was previously placed as pointed to
by defendant Marciana Tadiaman up to around 20 meters before reaching the gate of the
compound. The other skid marks of tires of a truck was also seen on a portion of a road
leading to a compound owned by other person.
Mr. Gervacio and Pascual strongly insisted that they do not know the whereabouts
of the said Cargo Truck. The undersigned requested the Policemen of Las Piñas, Metro
Manila, Atty. Benites and defendant Marciana Tadiaman to see for ourselves the road
leading to a compound owned by another rm, about 1/3 of the length of which road is
completely blocked by a big and tall building. It was at this portion where the subject
Cargo Truck was placed.
Mr. Ismael Pascual called their main o ce, FILINVEST, by telephone about the
discovery of the whereabouts of said cargo truck by the undersigned Defendant Marciana
Tadiaman to Mr. Pascual that there were missing parts and that other parts of the truck
were completely changed with worn-out spare parts. Mr. Pascual told the undersigned that
he will only a x his signature on the acknowledgment receipt, below the line "GIVEN BY," if
the missing parts and replaced parts were not mentioned in said receipt.
It was because of the said actuations of the plaintiff-appellant that the
defendants-appellee [sic] filed a counterclaim for damages. . . ." 3

After trial, the trial court rendered a decision the dispositive portion of which reads
as follows:
WHEREFORE, judgment is hereby rendered on the main action, in favor of
plaintiff and against defendants, ordering the latter, jointly and severally, to pay
the plaintiff the following sums:

(a) The sum of P88,333.32 which is the balance of the promissory

note as of September 26, 1982, with interest thereon at 14% per
annum from said date.
(b) The sum equivalent to 25% of the amount sued upon, as and for
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 attorney's fees, that is P88,333.32 plus the stipulated interest; and
(c) The cost of suit. aisadc

On the Counterclaim:
Plaintiff not having successfully rebutted the defendants' evidence
respecting damages caused to them by virtue of the illegal seizure of the property,
and hiding the truck in some other place not their garage, feigning knowledge that
the same had been recorded in their incoming ledger books, the "cannibalizing"
done while the truck was in the custody of plaintiff's garage, the frustrations
which the defendants had to undergo for two weeks before the truck was nally
placed in the hands of Sheriff Dizon, all point to the liability of plaintiff for its
failure intentionally or otherwise "to observe certain norms that spring from the
fountain of good conscience and guide human conduct to the end that law may
approach its supreme ideal, which is the sway and dominance of justice."
WHEREFORE, judgment is rendered in favor of counter-claimants
defendants and against plaintiff, ordering the latter to pay to the defendants the
following sums:

(1) Actual damages representing lost spare parts while in the custody
of plaintiff in its garage being hidden from defendants, in the sum
of P50,000.00;
(2) P50,000.00 as moral damages;
(3) P20,000.00 as exemplary damages; cdasia

(4) P20,000.00 as attorney's fee; and

(5) Proportionate part of the costs adjudged against plaintiff."

SO ORDERED. 4

Petitioner Filinvest Credit Corporation (hereinafter Filinvest) appealed that portion of

the judgment on the counterclaim to the Court of Appeals (CA-G.R. CV No. 30231) and
assigned the following errors of the lower court:
I
THE TRIAL COURT ERRED IN AWARDING DAMAGES; ACTUAL, MORAL,
EXEMPLARY AND ATTORNEY'S FEES AND PROPORTIONATE PART OF THE
COSTS IN FAVOR OF THE DEFENDANTS IN THEIR COUNTER-CLAIMS IN THE
ABSENCE OF ANY ACTIONABLE LOSS SUSTAINED BY THEM FOR IT WAS THE
DEFENDANTS WHO VIOLATED THEIR PROMISSORY NOTE AND CHATTEL
MORTGAGE WITH THE PLAINTIFF.

II
THE TRIAL COURT ERRED IN HOLDING THAT THE PLAINTIFF OR ANY OF
ITS REPRESENTATIVES HAD NO RIGHT TO TAKE THE MORTGAGED PROPERTY
AFTER THE BREACH OF THE CONDITIONS IN THE PROMISSORY NOTE AND
CHATTEL MORTGAGE BY THE DEFENDANTS. 5

In its decision of 26 May 1994, the Court of Appeals a rmed in toto the decision of
the trial court. It found no merit in the appeal. Thus:
The plaintiff-appellant argues that it had the right to seize the truck from
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 the moment that the defendants-appellees defaulted in the payment of the
monthly installments, and to institute an action for replevin preliminary to
effecting a foreclosure of the property mortgaged extrajudicially. The plaintiff-
appellant misses the point entirely. In the rst place, it has not been held liable for
ling an action for replevin in order to recover possession of the truck prior to its
foreclosure, but for the manner in which it carried out the seizure of the vehicle. It
is ironic that, in spite of plaintiff-appellant's apparent recognition of the necessity
of legal means for the recovery of the truck, in the end, it utilized illegal means in
the actual seizure of the vehicle by having its employees pose as special agents
of the court in effecting the same. Plaintiff-appellant even went to the extent of
asking the appointment of a special sheriff to enforce the order of seizure, but still
had the truck seized by its own people instead. It is as if the plaintiff-appellant
utilized the court only to clothe its employees with apparent authority to seize the
vehicle concerned.
In the second place, plaintiff-appellant was held liable for hiding the truck
and making it di cult for the defendants-appellees to recover the same.
Defendants-appell[ees] were able to have the writ of seizure quashed on the basis
of a counterbond. Plaintiff-appellant should have been the rst to obey the order
for the return of the seized truck, considering its avowed adherence to law and
order. And yet, it made it di cult for the defendants-appellees to actually recover
the vehicle, as reported by the deputy sheriff above. aisadc

In the third place, there is unrebutted evidence that the truck was
"cannibalized" while in the custody of the plaintiff-appellant. The latter argues
that such evidence is not credible, because, if the truck was stripped of vital parts,
it could not have been driven by the defendants-appellees all the way back to
Cabanatuan City. Plaintiff-appellant conveniently overlooks the testimony of
defendant-appellee Mrs. Tadiaman that they had to buy the missing parts in order
to make the truck run (t.s.n., p. 40, October 2, 1986, Exhibits "9", "10" and "11"). 6

Filinvest now comes to us alleging that the Court of Appeals

(a) . . . DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN
ACCORD WITH LAW AND THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT WHEN IT REVERSED THE DECISION OF THE
REGIONAL TRIAL COURT OF MANILA, BRANCH 9; cdta

(b) . . . ACTED WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO

LACK OF JURISDICTION WHEN IT SUSTAINED THE ERRONEOUS
DECISION OF THE HONORABLE REGIONAL TRIAL COURT BRANCH 46
OF SAN FERNANDO, PAMPANGA;
(c) . . . ACTED WITH GRAVE ABUSE OF DISCRETION AND CONTRARY TO
EXISTING LAW AND JURISPRUDENCE WHEN [IT] SUSTAINED THE
SPECULATIVE FINDING OF THE RTC THAT THE PETITIONER
"CANNIBALIZED" THE MORTGAGED VEHICLE;
(d) . . . ERRED GRIEVOUSLY WHEN IT EXONERATED PRIVATE
RESPONDENTS FROM PAYING THE PETITIONER ON THE LATTER'S
LEGITIMATE CLAIMS UNDER THE COMPLAINT PARTICULARLY ON
THE UNPAID PROMISSORY NOTE MADE BY THE PRIVATE
RESPONDENTS; cdasia

(e) . . . ACTED CONTRARY TO LAW WHEN IT IGNORED THE PLAIN

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 ADMISSIONS IN THE ANSWER (AT PARAGRAPHS 2, & 3, PAGE 1) OF
THE DEFENDANTS (PRIVATE RESPONDENTS) THAT THEY HAVE
DULY EXECUTED A PROMISSORY NOTE SECURED BY A DEED OF
CHATTEL MORTGAGE AND THAT THE PRIVATE RESPONDENTS
VIOLATED THE TERMS OF THE PROMISSORY NOTE IN FAILING TO
PAY THE INSTALLMENTS DUE THEREON FOR NOV. 15, 1981 AND
THE SUBSEQUENT 9 INSTALLMENTS OR UP TO AUGUST 15, 1982;
(f) . . . ERRED IN REFUSING TO APPLY THE TERMS AND CONDITIONS OF
THE PROMISSORY NOTE AND THE DEED OF CHATTEL MORTGAGE
SIGNED BY THE PONCES "AS THE LAW BETWEEN THE PARTIES" TO
THE CONTRACT SUBJECT OF THE SUIT IN THE RTC. 7
Additionally, Filinvest maintains that: cdt

(g) THERE IS NO PROOF TO SUSTAIN THE AWARD OF MORAL

DAMAGES FOR P50,000.00 ACCORDINGLY THERE IS NO BASIS FOR
THE AWARD OF EXEMPLARY DAMAGES. 8
We gave due course to the petition and required the parties to submit their
respective memoranda after the ling of the comment to the petition by the private
respondents and of the reply thereto by Filinvest. The parties subsequently led their
memoranda which merely reiterated the arguments in their respective initiatory pleadings.
The only relevant issue in this petition is whether or not the Court of Appeals
committed reversible error in dismissing Filinvest's appeal from the decision of the trial
court on the private respondents' counterclaim and in a rming in toto the said
decision. The rst ground raised herein by Filinvest is baseless since the discussions or
arguments in Filinvest's petition and memorandum fail to disclose what the decision of
Branch 9 of the RTC of Manila is all about. So is the fourth ground, for, the unappealed
portion of the trial court's decision did in fact order the private respondents to pay
Filinvest the unpaid balance of the promissory note, with interest and attorney's fees.
All the other grounds are deemed waived for not having been raised in the appeal to the
Court of Appeals. In any event, Filinvest's disquisitions on such irrelevant issues are
confounded.
As to the sole issue de ned above, the Court of Appeals correctly ruled that
Filinvest is liable for damages not because it commenced an action for replevin to
recover possession of the truck prior to its foreclosure, but because of the manner it
carried out the seizure of the vehicle. Sections 3 and 4, Rule 60 of the Rules of Court are
very clear and direct as to the procedure for the seizure of property under a writ of
replevin, thus:
SECTION 3. Order. — Upon the ling of such a davit and bond with
the clerk or judge of the court in which the action is pending, the judge of such
court shall issue an order describing the personal property alleged to be
wrongfully detained, and requiring the sheriff or other proper o cer of the court
forthwith to take such property into his custody.
SECTION 4. Duty of the officer. — Upon receiving such order the o cer
must serve a copy thereof on the defendant together with a copy of the
application, affidavit and bond, and must forthwith take the property , if it be in the
possession of the defendant or his agent, and retain it in his custody. . . .
(Emphasis supplied) aisadc

In the instant case, it was not the sheriff or any other proper o cer of the trial
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 court who implemented the writ of replevin. Because it was aware that no other person
can implement the writ, Filinvest asked the trial court to appoint a special sheriff. Yet, it
used its own employees who misrepresented themselves as deputy sheriff to seize the
truck without having been authorized by the court to do so. Filinvest justi ed its seizure
by citing a statement in Bachrach Motor Co. vs. Summers, 9 to wit, "the only restriction
on the mode by which the mortgagee shall secure possession of the mortgaged
property after breach of condition is that he must act in an orderly manner and without
creating a breach of the peace, subjecting himself to an action for trespass."
This justi cation is misplaced and misleading for Bachrach itself had ruled that if
a mortgagee cannot obtain possession of a mortgaged property for its sale on
foreclosure, it must bring a civil action either to recover such possession as a
preliminary step to the sale or to obtain judicial foreclosure. Pertinent portions of
Bachrach read as follows:
Where, however, debtor refuses to yield up the property, the creditor must
institute an action, either to effect a judicial foreclosure directly, or to secure
possession as a preliminary to the sale contemplated in the provision above
quoted. He cannot lawfully take the property by force against the will of the
debtor. Upon this point the American authorities are even more harmonious than
they are upon the point that the creditor is entitled to possession. As was said
many years ago by the writer of this opinion in a monographic article contributed
to an encyclopedic legal treatise, "if possession cannot be peaceably obtained the
mortgagee must bring an action." (Trust Deeds and Power of Sale Mortgages, 28
Am. & Eng. Encyc. of Law, 2d ed., 783.) In the Article of Chattel Mortgages, in
Corpus Juris, we nd the following statement of the law on the same point: "The
only restriction on the mode by which the mortgagee shall secure possession of
the mortgaged property after breach of condition is that he must act in an orderly
manner and without creating a breach of the peace, subjecting himself to an
action to trespass." (11 C.J., 560; see also 5 R.C.L., 462.)
cdta

The reason why the law does not allow the creditor to possess himself of
the mortgaged property with violence and against the will of the debtor is to be
found in the fact that the creditor's right of possession is conditioned upon the
fact of default, and the existence of this fact may naturally be the subject of
controversy. The debtor, for instance, may claim good faith, and rightly or
wrongly, that the debt is paid, or that for some other reason the alleged default is
nonexistent. His possession in this situation is as fully entitled to protection as
that of any other person, and in the language of Article 446 of the Civil Code he
must be respected therein. To allow the creditor to seize the property against the
will of the debtor would make the former to a certain extent both judge and
executioner in his own cause — a thing which is inadmissible in the absence of
unequivocal agreement in the contract itself or express provision to that effect in
the statute.
It will be observed that the law places the responsibility of conducting the
sale upon "a public o cer;" and it might be supposed that an o cer, such as the
sheriff, can seize the property where the creditor could not. This suggestion is, we
think, without force, as it is manifest that the sheriff or other o cer proceeding
under the authority of the language already quoted from Section 14 of the Chattel
Mortgage Law, becomes pro hac vice the mere agent of the creditor. There is
nothing in this provision which creates a speci c duty on the part of the o cer to
seize the mortgaged property; and no intention on the part of the law-making
body to impose such a duty can be implied. The conclusion is clear that for the
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 recovery of possession, where the right is disputed, the creditor must proceed
along the usual channels by action in court. Whether the sheriff, upon being
indemni ed by the creditor, could safely proceed to take the property from the
debtor, is a point upon which we express no opinion. . . .
But whatever conclusion may be drawn in the premises with respect to the
true nature of a chattel mortgage, the result must in this case be the same; for
whether the mortgagee becomes the real owner of the mortgaged property — as
some suppose — or acquires only certain rights therein, it is nonetheless clear that
he has after default the right of possession; though it cannot be admitted that he
may take the law into his own hands and wrest the property violently from the
possession of the mortgagor. Neither can he do through the medium of a public
o cer that which he cannot directly do himself. The consequence is that in such
case the creditor must either resort to a civil action to recover possession as a
preliminary to a sale, or preferably he may bring an action to obtain a judicial
foreclosure in conformity, so far as practicable, with the provisions of the Chattel
Mortgage Law. 1 0 cdasia

Replevin is, of course, the appropriate action to recover possession preliminary to

the extrajudicial foreclosure of a chattel mortgage. Filinvest did in fact instituted such an
action and obtained a writ of replevin. And, by ling it, Filinvest admitted that it cannot
acquire possession of the mortgaged vehicle in an orderly or peaceful manner.
Accordingly, it should have left the enforcement of the writ in accordance with Rule 60 of
the Rules of Court which it had voluntarily invoked.
Parenthetically, it must be observed that the trial court erred in holding that the
action for replevin was "not in order as [Filinvest] is not the owner of the property (Sec. 2
par. (a) Rule 60)." 11 It is not only the owner who can institute a replevin suit. A person
"entitled to the possession" of the property also can, as provided in the same paragraph
cited by the trial court, which reads:
SECTION 2. A davit and bond . — Upon applying for such order the
plaintiff must show . . . cdtai

(a) That the plaintiff is the owner of the property claimed, particularly
describing it, or is entitled to the possession thereof ; . . . (Emphasis
supplied)

Upon the default by the mortgagor in his obligations, Filinvest, as a mortgagee, had the
right to the possession of the property mortgaged preparatory to its sale in a public
auction. 1 2 However, for employing subterfuge in seizing the truck by misrepresenting
its employees as deputy sheriffs and then hiding and cannibalizing it, Filinvest
committed bad faith in violation of Article 19 of the Civil Code which provides:
Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good
faith. cdasia

In common usage, good faith is ordinarily used to describe that state of mind denoting
honesty of purpose, freedom from intention to defraud, and, generally speaking, means
being faithful to one's duty or obligation. 1 3 It consists of the honest intention to
abstain from taking an unconscionable and unscrupulous advantage of another. 14
This leaves us to the issue of damages and attorney's fees.
In their answer with counterclaim, the private respondents asked for (a) actual
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 damages of P50,000.00 for the spare parts found missing after their recovery of the
truck and another P50,000.00 for unearned pro ts due to the failure to use the truck in
their ricemill business; (b) moral damages of P50,000.00 for "the mental anguish,
serious anxiety, physical suffering, wounded feelings, social humiliation, moral shock,
sleepless nights and other similar injury" which they suffered as a "proximate result of
the [petitioner's] illegal, wrongful and unlawful acts"; (c) nominal damages of
P30,000.00; (d) exemplary damages of P20,000.00; and (e) attorney's fees of
P20,000.00 which they incurred "as a direct result of [petitioner's] illegal and
unwarranted actuations and in connection with the defense of this action."15 cdtai

As to actual damages, the petitioner admits that per Exhibits "1", "9", and "10" of
the private respondents, only the sum of P33,222.00 — and not P50,000.00 — was
"supposedly spent for the alleged lost spare parts." 1 6 The petitioner may thus be held
liable only for such amount for actual or compensatory damages.
Anent the moral damages, the trial court ruled that the acts of the petitioner were
in total disregard of Articles 19, 20, and 21 of the Civil Code. 1 7 It added that the
petitioner had not only caused actual damages in lost earnings, but had also caused the
private respondents to suffer indignities at the hands of the petitioner's personnel in
hiding the truck in question, misleading them, and making them work for the release of
the truck for about two weeks, thereby justifying the award of moral damages along
with the exemplary and other damages in favor of the private respondents. 18
We agree with this nding of the trial court. The petitioner's acts clearly fall within
the contemplation of Articles 19 and 21 of the Civil Code. 19 The acts of fraudulently
taking the truck, hiding it from the private respondents, and removing its spare parts show
nothing but a willful intention to cause loss to the private respondents that is punctuated
with bad faith and is obviously contrary to good customs. Thus, the private respondents
are entitled to the moral damages they prayed for, for under Article 2219 of the Civil Code,
moral damages may be recovered in cases involving acts referred to in Article 21 of the
same Code. cdt

The private respondents prayed for nominal damages of P30,000.00 which the
trial court did not award them. Having failed to appeal this omission by the trial court,
we cannot make anymore such award at this point.
The award of exemplary damages is in order in view of the wanton, fraudulent,
and oppressive manner by which the petitioner sought to enforce its right to the
possession of the mortgaged vehicle. Article 2232 of the Civil Code provides:
In contracts and quasi-contracts, the court may award exemplary damages
if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent
manner.

Of course, a plaintiff need not prove the actual extent of exemplary damages, for its
determination is addressed to the sound discretion of the court upon proof of the
plaintiff's entitlement to moral, temperate, or actual or compensatory damages. Article
2234 of the Civil Code thus provides in part as follows:
While the amount of the exemplary damages need not be proved, the
plaintiff must show that he is entitled to moral, temperate or compensatory
damages before the court may consider the question of whether or not exemplary
damages should be awarded. . . .

The award for attorney's fees must, however, be set aside. There is no question that
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 the petitioner led in good faith its complaint for replevin and damages to protect its
rights under the promissory note and the chattel mortgage. That the private respondents
had defaulted in its obligation under the promissory note thereby authorizing the petitioner
to seek enforcement of its claim thereunder and proceed against the mortgage of the
vehicle was duly recognized by the trial court by its judgment against the private
respondents incorporated in the rst part of the dispositive portion. The private
respondents did not appeal therefrom. There would then be no basis for awarding
attorney's fees in favor of the private respondents for whatever physical suffering, mental
anguish, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, or any other similar injury they had suffered, even if proven, were only such as
are usually caused to parties haled into court as a defendant and which are not
compensable, for the law could not have meant to impose a penalty on the right to litigate.
20 cdta

WHEREFORE, the assailed judgment of the Court of Appeals in CA-G.R. CV No.

30231 as well as that of the Regional Trial Court of San Fernando, Pampanga, Branch 46 in
Civil Case No. 6599 on the counterclaim is AFFIRMED, subject to the modi cations
abovestated. As so modi ed, the petitioner is hereby ordered to pay the private
respondents only the following:
(a) actual damages in the reduced amount of P33,222.00;
(b) moral damages in the amount of P50,000.00; and
(c) exemplary damages in the amount of P20,000.00.
No pronouncement as to costs.
SO ORDERED.
Padilla, Bellosillo and Kapunan, JJ., concur. cdt

Hermosisima, Jr., J., is on official leave.

Footnotes

1. Rollo, 44-50. Per Hofileña, H., J., Ramirez, P., and Garcia, C., JJ., concurring.
2. Id., 51-56. Per Judge Norberto C. Ponce.
3. Rollo, 45-48.
4. Rollo, 55-56.
5. Rollo, 48-49.
6. Rollo, 49-50.
7. Rollo, 13-14.
8. Id., 22. cdt

9. 42 Phil. 3 [1921].

10. Supra, at pages 6-7, 9-10. See BPI Credit Corp. vs. Court of Appeals, 204 SCRA 601
[1991].
11. Rollo, 54.
12. See Bachrach Motor Co. vs. Summers, supra note 9; BPI Credit Corp. vs. Court of
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