G.R. No. 165500 August 30, 2006 PHILIPPINE BANK OF COMMUNICATIONS and ROMEO G. DELA ROSA, Petitioners, vs.

ELENITA B. TRAZO, Respondent. DECISION CHICO-NAZARIO, J.: Petitioners are asking Us to reverse, in this Petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, the Decision 1 of the Court of Appeals dated 25 March 2004 and its Resolution 2 dated 23 September 2004 denying petitioners Motion for Reconsideration. The facts of the case are as follows: In order to facilitate the payment of her salaries and other monetary benefits from her employer, petitioner Philippine Bank of Communications (PBCOM 3), respondent Elenita B. Trazo opened a payroll account with China Banking Corporation (CBC) under Current Account No. 101-003921-9. On or about 29 December 1997, petitioner Romeo G. dela Rosa, PBCOM assistant vice-president, instructed CBC to credit all accounts under its payroll with the medical and clothing subsidy for the year 1998. Accordingly, respondent Trazos current account was credited on that date with the amount of P7,000.00 for such annual subsidy. On 31 December 1997, respondent Trazo, then project manager of the information technology and management group, resigned from PBCOM. Since respondent Trazo severed her employment with PBCOM effective 1 January 1998 and was, therefore, no longer entitled to the medical and clothing subsidy for the year 1998, petitioner dela Rosa wrote William Lim, CBC senior assistant vice-president, on 5 January 1997 authorizing/directing

CBC/Lim to debit the sum of P7,000.00 from respondent Trazos current account. Acting upon such authority/directive, CBC/Lim debited said amount from respondent Trazos account on the same date. Meanwhile, respondent Trazo drew checks against her current account in favor of Bliss Development Corporation (BDC) and the House of Sara Lee Phils., Inc. However, the checks were dishonored by CBC due to insufficiency of funds, which was occasioned by the P7,000.00 debit from her current account. Averring that PBCOM, through dela Rosa, had no authority to unilaterally order the debiting of her current account and that CBC, through Lim, made such debit without her knowledge and consent resulting in the dishonor of her checks, respondent Trazo instituted an action for damages against PBCOM, dela Rosa, CBC, and Lim before the Regional Trial Court (RTC) of Quezon City (Branch 79). Summons was served on CBC and Lim on 19 May 1998 and on petitioners herein, PBCOM and dela Rosa, on 27 May 1998. On 27 May 1998 and 11 June 1998, or before the expiration of the reglementary period for filing their answers, CBC and Lim, and PBCOM and dela Rosa, respectively, filed motions for 15-day extension of time. On 8 June 1998, respondent Trazo filed a Motion to Declare Defendants China Banking Corporation and William Lim in Default and Opposition to Motion for Extension of Time to File Answer and/or Responsive Pleading. On 15 June 1998, respondent Trazo filed a Motion to Declare Defendants Philippine Bank of Communication and Romeo G. dela Rosa in Default. On 16 June 1998, CBC and Lim filed a Motion to Dismiss the case on the ground of improper venue. On 24 June 1998, PBCOM and dela Rosa filed their own Motion to Dismiss on the ground that the complaint failed to state a cause of action. On 7 October 1998, the lower court issued an Omnibus Order granting the motions to dismiss and declaring the motions to declare defendants in default

moot and academic. The dispositive portion of the Omnibus Order is as follows: PREMISES CONSIDERED, the case against defendants China Bank and William Lim is DISMISSED on the ground of improper venue. The case against defendants Philippine Bank of Communications and Romeo G. dela Rosa is DISMISSED for lack of cause of action. 4 Respondent Trazo filed with the trial court a Notice of Appeal. In the assailed Decision, the Court of Appeals ruled in favor of respondent Trazo, disposing of the case in the following manner: WHEREFORE, the omnibus order dated October 7, 1998 of the Regional Trial Court of Quezon City (Branch 79) is REVERSED and SET ASIDE and the complaint REINSTATED. Appellant is given ten (10) days from notice of finality of this decision within which to amend the complaint. 5 Petitioners filed their Motion for Reconsideration on 14 April 2004, while CBC and Lim filed their Motion for Reconsideration on 19 April 2004. On 23 September 2004, the Court of Appeals issued the assailed Resolution wherein both motions for reconsideration were denied for lack of merit. Hence, the instant Petition, where petitioners PBCOM and Trazo bring before us the following issues: A. WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE COMPLAINT STATED A CAUSE OF ACTION FOR DAMAGES AGAINST PETITIONERS ARISING OUT OF THE ALLEGED UNLAWFUL DEBITING OF RESPONDENTS CHINABANK ACCOUNT, NOTWITHSTANDING THAT IT WAS CHINABANK WHICH DEBITED THE ACCOUNT, NOT PETITIONERS. B.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN HOLDING THAT THE COMPLAINT PLEADED A CAUSE OF ACTION FOR ABUSE OF RIGHTS AGAINST PETITIONERS. C. WHETHER OR NOT THE COURT OF APPEALS ERRED IN ORDERING THE AMENDMENT OF THE COMPLAINT DESPITE THE COMPLAINTS ABSOLUTE FAILURE TO STATE A CAUSE OF ACTION AGAINST PETTIONERS. D. WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT THE VENUE CLAUSE IN THE APPLICATION FOR NEW CURRENT ACCOUNTS IS NOT EXCLUSIVE. 6 Only CBC, and not petitioners PBCOM and dela Rosa, can move for dismissal on the ground of improper venue. The Application for New Current Accounts, which embodies the terms and conditions of respondent Trazos relationship with CBC, contains a stipulation on venue, to wit: In case of litigation hereunder, venue shall be in the City Court or Court of First Instance of Manila as the case may be for determination of any and all questions arising thereunder. 7 The RTC of Quezon City dismissed the complaint against CBC and Lim based on this stipulation, but the Court of Appeals reversed said dismissal. According to the Court of Appeals, absent any qualifying or restrictive words, a stipulation on venue should be considered merely as an agreement on an additional forum, and not to be considered as limiting venue to the specified place. 8

Before proceeding any further, it bears to point out that among the multiple defendants in the case filed by respondent Trazo, only CBC and its officer Lim can assert the alleged impropriety of venue since they are privy to and covered by the contract containing the venue stipulation. Indeed, the dispositive portion of the RTC decision shows that the dismissal on the ground of improper venue was effective only as against CBC and Lim. As CBC and Lim did not appeal the decision of the Court of Appeals reversing the RTC ruling, such decision has become final and executory as regards its disposition on the issue regarding venue. Nevertheless, We agree with the Court of Appeals that it was incorrect for the RTC to dismiss the complaint on the ground of improper venue. The parties must be able to show that the stipulation is exclusive. Thus, sans words expressing the parties intention to restrict the filing of a suit in a particular place, courts will allow the filing of a case in any of the venues prescribed by law or stipulated by the parties, as long as the jurisdictional requirements are followed. 9 The subject clause contains no qualifying nor restrictive words, such as "must," or "exclusively," as would indicate the parties intention "mandatorily to restrict the venue of actions to the courts of (Manila) only." 10 In the 8 December 2000 case of Langkaan Realty Development, Inc. v. United Coconut Planters Bank, 11 where the venue stipulation contained the word "shall," 12 we held that the stipulations of the parties "lack qualifying or restrictive words to indicate the exclusivity of the agreed forum," 13 and therefore "the stipulated place is considered only as an additional, not a limiting venue." 14 Consequently, the dismissal by the RTC of the complaint against CBC and Lim on ground of improper venue is erroneous, and was correctly reversed by the Court of Appeals. Respondent Trazos complaint contains a cause of action against petitioners PBCOM and dela Rosa. As discussed above, the RTC dismissed the complaint, insofar as it operates against CBC and Lim, on the ground of improper venue. In the same Omnibus Order, the RTC also dismissed the same complaint on the ground of failure to state a cause of action, this time, insofar as the complaint operates against petitioners PBCOM and dela Rosa. The Court of Appeals, in reversing

the Order of the RTC dismissing the complaint on the ground of failure to state a cause of action, held: Par. 13 of the complaint recites appellants alleged cause of action against [PBCOM and dela Rosa]. It reads: "13. Upon further personal inquiry with [PBCOM], [respondent Trazo] found out that on January 5, 1998 [petitioner] ROMEO G. DE LA ROSA, without [respondent Trazos] knowledge, consent and approval, wrote a letter and authorized/directed x x x CHINABANK and WILLIAM LIM `to debit the account of Elenita Trazo under C/A #101-003921-9 in the amount of PESOS: SEVEN THOUSAND PESOS ONLY P7,000.00 representing her medical and clothing subsidy for the year 1998. He even acknowledged and admitted that [respondent Trazo] resigned from PBCom effective December 31, 1997. He further stated that CHINABANK make the `Managers check payable to Philippine Bank of Communications. x x x." Crucial to appellants action against [PBCOM and dela Rosa] is the issue of whether the latter had the right to authorize/direct [CBC and Lim] to debit the amount of P7,000.00 from appellants current account and, if so, whether appellant was entitled to notice of such authority/directive. In authorizing/directing [CBC and Lim] to debit appellants current account, [PBCOM and dela Rosa] had, in effect, sought to recover, without resorting to a court action, an amount erroneously credited to her. And because appellant was not given the courtesy of a notice of such authority/directive, she was lulled into the belief that her funds at CBC were sufficient to cover the checks she was issuing. Nevertheless, the lower court ruled that the averment in par. 13 of the complaint is insufficient to make out a cause of action against [PBCOM and dela Rosa] on the theory that the "debit (of) the amount of P7,000.00 from the account of [respondent Trazo] x x x cannot be attributed as the fault of (PBCOM) since the fiduciary relationship exists only between (CBC) and [respondent Trazo] as its depositor and the primary responsibility whether to deposit or not lies with (CBC) alone."

However, the lower court did not consider whether the act of authorizing/directing CBC/Lim to debit appellants current account without giving notice to her constitutes a cause of action against [PBCOM and dela Rosa], for abuse of rights. The modern tendency is to depart from the classical and traditional theory and to grant indemnity for damages in cases where there is an abuse of rights, even when the act is not illicit (Sea Commercial Company, Inc. vs. Court of Appeals, 319 SCRA 210). But even supposing that the asserted act of [PBCOM and dela Rosa] is insufficient to make out a case of abuse of rights, the lower court could have simply ordered appellant to amend the complaint. Thus, Sec. 1, Rule 10, in relation to Sec. 3, Rule 16, id., allows amendment of pleadings before a responsive pleading is served. Amendment of the complaint, by way of supplementing and amplifying facts as would carve out a clear abuse of rights situation, would prevent multiplicity of suits. This is so because of Our ruling that the dismissal of the complaint against [CBC and Lim] on ground of improper venue is erroneous, with the effect that the complaint against them is reinstated. However, affirmance of the dismissal of the complaint against [PBCOM and dela Rosa] anchored on failure to state a cause of action would trigger the filing of a new action against the latter, thereby spawning two suits, i.e., the instant action and the new one. Amendment, not dismissal, of the complaint is proper to avoid multiplicity of suits (Eugenio, Sr. vs. Velez, 185 SCRA 425). The policy in this jurisdiction is that amendment of pleadings is favored and liberally allowed in the interest of substantial justice. Amendment of the complaint may be allowed even if an order for its dismissal has been issued provided that the motion to amend is filed before the order of dismissal acquired finality (Tirona vs. Alejo, 367 SCRA 17). Rules of Procedure, after all, are but tools designed to facilitate the attainment of justice (Valenzuela vs. Court of Appeals, 363 SCRA 779). 15 Petitioners argue that the afore-quoted paragraph 13 shows that PBCOM and dela Rosa merely requested CBC to debit the account of respondent Trazo, and that nothing in said paragraph shows that PBCOM and dela Rosa were

actually responsible for the alleged unlawful debiting of respondents account. 16 As regards the Court of Appeals finding that the complaint contains a cause of action against petitioners for abuse of rights, 17 petitioners claim that the elements of abuse of rights are not found in the complaint, since no bad faith was imputed to PBCOM and dela Rosa in requesting the debiting of the amount stated, and since there was no allegation showing that PBCOM and dela Rosa acted with the sole intent of prejudicing or injuring respondent in requesting the same. 18 While we agree with petitioners that the complaint does not contain a cause of action against them for abuse of rights, their petition would, nonetheless, fail. A cause of action is an act or omission of one party in violation of the legal right of the other. 19 A motion to dismiss based on lack of cause of action hypothetically admits the truth of the allegations in the complaint. 20 The allegations in a complaint are sufficient to constitute a cause of action against the defendants if, hypothetically admitting the facts alleged, the court can render a valid judgment upon the same in accordance with the prayer therein. A cause of action exists if the following elements are present, namely: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of damages. 21 The Court of Appeals, like the RTC, seems to have acquiesced in the petitioners statement 22 that respondents cause of action against them is found exclusively in paragraph 13 of the complaint. An examination of the subject complaint, 23 however, reveals that it contains other provisions establishing the cause of action against petitioners PBCOM and de la Rosa, not the least of which is paragraph 23, which provides: 23. In debiting the checking/current account of the plaintiff, without her knowledge, consent and approval, defendants acted in a wanton, reckless and

oppressive manner. Defendants PBCOM and ROMEO G. DE LA ROSA had no cause nor reason to unilaterally order the debiting of plaintiffs account as it was her personal property and not of defendant PBCOM. Even if defendant PBCOM erroneously credited plaintiff with monetary benefits, plaintiff was to receive, as she did receive separation benefits equivalent to more than FIVE HUNDRED THOUSAND PESOS (P500,000.00) more or less, from defendant PBCOM itself. A reasonable set-off or compensation should and could have been resorted to. However, defendant PBCOM never utilized this option. Defendant PBCOM neither informed plaintiff of said transaction, much less seek her approval and authority to debit her CHINABANK account when at the time of the debitting (sic), January 5, 1998, she was no longer an employee of PBCOM. (Emphasis supplied.) 24 As regards respondent Trazos entitlement to damages, the complaint recites that: In order not to jeopardize her housing loan obligations with BDC and Sara Lee, Phil., Inc., and considering the legal actions foisted against her, x x x [respondent Trazo] made immediate restitution to BDC and Sara Lee Phil., Inc. for her outstanding obligations, which included unwarranted charges and penalties which were not [respondent Trazos] making. 25 The Complaint also claims that the actions of defendants therein, including petitioners PBCOM and dela Rosa, caused "mental anguish, moral shock, besmirched reputation, social humiliation, serious fright and anxiety, sleepless nights and wounded feelings." 26 The same was reiterated in Annex K of said complaint, wherein respondent Trazo, through her legal representative, wrote to petitioner dela Rosa, in his capacity as Assistant VicePresident of petitioner PBCOM, stating: On January 5, 1997, you, as AVP of PBCOMs Human Resource Management Department, authorized CHINA BANKING CORPORATION to debit our clients account under C/A # 101-003921-9 in the amount of SEVEN THOUSAND PESOS (P7,000.00), representing her medical and clothing subsidy for the year 1998, without notifying our client, much less acquiring her consent and approval. However, our client resigned from PBCOM

effective July 1, 1998, during which time the same account already ceased to be a payroll account. As a result of your action[,] our client incurred damages and injury in several personal transactions involving check payments made by her under said checking account with CHINA BANKING CORPORATION. This unfortunate incident caused her untold sufferings, not to mention lost opportunities in her profession and other businesses, besmirched reputation, sleepless nights, mental anguish and wounded feelings. 27 Paragraph 20 28 of the complaint makes its Annex K an integral part thereof. We find a sufficient cause of action in the above-quoted allegations. If these allegations are assumed to be true, respondent Trazo would indeed be entitled to damages, though the amount of the same would still depend on the evidence presented during trial. We carefully scrutinize the allegations in the Complaint. It provides that "(d)efendants PBCOM and ROMEO G. DE LA ROSA had no cause nor reason to unilaterally order the debitting (sic) of plaintiffs account as it was her personal property and not of defendant PBCOM." 29 The Complaint also described the action of all defendants, including petitioners PBCOM and dela Rosa, as unjust and illegal, 30 and done in a wanton, reckless and oppressive manner. 31 The cause of action stated in the Complaint, therefore, consists in (1) a right in favor of the plaintiff, which in this case consists of a right to her personal property; 32 (2) an obligation on the part of the named defendant to respect her right to her personal property; and (3) an act of such defendant violative of the right of the plaintiff, which in this case is the order by petitioners to CBC and Lim to debit respondent Trazos account, an act which petitioners allege to have caused them damage. In the case at bar, the allegations in the complaint verily show a cause of action. To sustain a motion to dismiss for lack of cause of action, the Complaint must show that the claim for relief does not exist rather than that a claim has been defectively stated or is ambiguous, indefinite or uncertain. 33

We, however, disagree with the Court of Appeals when it decided that the allegations in the complaint show a cause of action against petitioners for abuse of rights under Article 19 34 of the Civil Code. The elements of abuse of rights are: (1) a legal right or duty; (2) which is exercised in bad faith; and (3) for the sole intent of prejudicing or injuring another. 35 Rather, the allegations bare commission of an act contrary to law under Article 20 of the same Code, which provides: Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. Whereas Article 19 provides for a cause of action for damages in cases when there is no law violated, the act causing damage being within rights or duties of defendant, Article 20 furnishes a general sanction for violations of provisions of law which do not especially provide their own sanction. 36 The complaint clearly alleges a violation of respondent Trazos property rights with respect to her checking account. Article 429 of the Civil Code provides that the owner or lawful possessor of the thing has the right to exclude any person from the enjoyment and disposal thereof. Petitioners retort that the complaint did not base its claim for damages on Articles 19, 20 and 21 of the Civil Code, 37 and faults the Court of Appeals for making out "a cause of action for respondent on grounds not even alleged in the Complaint. 38 We, however, have held in Consolidated Dairy Products, Co. v. Court of Appeals, 39 that the applicable law to a set of facts stated in the complaint need not be set out directly. Consequently, the complaint need not state that the property right alleged to have been violated is found in Article 429 of the Civil Code, or that such violation entitled petitioner Trazo to damages pursuant to Article 20 of the same Code, which provides a cause of action therefor. Petitioners claim that respondent failed to specify in the complaint the standard of proper conduct and decency required of PBCOM and the basis of invoking such standard on PBCOM 40 did not improve their position any. The complaint should state only ultimate facts, not conclusions of law, nor evidentiary facts. In determining whether the allegations of a complaint are sufficient to support a cause of action, the complaint does not have to

establish or allege the facts proving the existence of a cause of action at the outset; this will have to be done at the trial on the merits of the case. 41 Ultimate facts refer to the principal, determinative, constitutive facts upon the existence of which the cause of action rests. The term does not refer to details of probative matter or particulars of evidence which establish the material ingredients. 42 In their last ditch efforts to save their cause, petitioners assert that the duty to notify respondent regarding the debiting of her account properly belongs to CBC 43 and that, had CBC denied petitioners "request," then there would have been no alleged debit of respondents account. 44 Petitioners add that the mere act of "requesting" a bank to return a certain amount of money erroneously credited to one of the banks depositors cannot be considered an act which violates the rights of said depositor. 45 Petitioners allegations are in the nature of defenses, and, thus, cannot be considered in determining the sufficiency of the cause of action. For the complaint to be dismissed for failure to state the cause of action, the insufficiency of the cause of action must appear on the face of the complaint. 46 If the allegations in a complaint can furnish a sufficient basis by which the complaint can be maintained, the same should not be dismissed regardless of the defenses that may be assessed by the defendants. 47 WHEREFORE, the instant petition is DENIED for lack of merit. The assailed Decision and Resolution of the Court of Appeals, which reversed and set aside the Regional Trial Court of Quezon Citys 7 October 1998 Omnibus Order dismissing respondents complaint, are AFFIRMED. Costs against petitioners. SO ORDERED. CASE DIGEST ON GLOBE MACKAY V. CA For more case digests visit http://www.pinaylawyer.com

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digest, pinaylawyer.com, www.pinaylawyer.com, case digest, case digest of, case digest on, supreme court case digest, supreme court case digests

Appeal from the order of the Court of First Instance of Rizal, Caloocan City Branch, dismissing on the ground that the "complaint states no cause of action" its Civil Case No. C-628, an action for damages based upon an alleged malicious prosecution. According to the record on appeal, for the crime of falsification of a private document allegedly committed against appellee Eusebio Bernabe, appellant Joaquina Ventura stood trial in the Court of First Instance of Rizal upon the following complaint filed with the fiscal's office: The undersigned accuses JOAQUINA DE VENTURA of the crime of "Falsification of Private Document" under Art. 172 subpar. (2) of the Revised Penal Code, committed as follows: That on or about October 4, 1958, in the Municipality of Caloocan, Province of Rizal, Philippines, and within the jurisdiction of this Honorable Court, the said accused, did then and there willfully and feloniously commit falsification in a private document, to wit: the said accused WILLFULLY, UNLAWFULLY and FELONIOUSLY presented to Mr. Eusebio B. Bernabe a supposed letter of Cmdr. Marcelino Calinawan, Jr. of the Presidential Fact Finding Committee addressed to Mr. Bernabe asking for a loan of P350.00 and the accused further stating that Cmdr. Calinawan was then in her residence waiting for the money and with the instruction to hand to her the money for delivery to Cmdr. Calinawan which Mr. Bernabe did by issuing a Bank of America Check No. 703659 dated October 5, 1958 for P350.00 and handing the same to the accused; that upon verification, it has been found out that the letter above referred to was never and has never been made by Cmdr. Calinawan and that the signature appearing on the same is not the signature of Cmdr. Calinawan; that the said check has already been cash(ed) on or about October 7, 1958 to the damage and prejudice of Mr. Eusebio B. Bernabe in the sum of P350.00 Philippine Currency.

CASE DIGEST ON GLOBE MACKAY V. CA [176 S 778 (1989)] - While an employer has the right to dismiss an employee who was involved in anomalous transactions, the right of dismissal should not be exercised in an abusive manner, such as by making accusations of being a crook, forcing him to take a forced leave, threatening to file a hundred suits against him. Hence, the employer is liable for damages. Art. 21 was adopted to remedy the countless gaps in the statutes, which leave so many victims of moral wrongs helpless, even though they have actually suffered material and moral injury. This article should vouchsafe adequate legal remedy for that untold number of moral wrongs which it is impossible for human foresight to provide for specifically in the statutes. For more case digests visit http://www.pinaylawyer.com

case digest, case digests, supreme court case digests, supreme court case digest, pinaylawyer.com, www.pinaylawyer.com, case digest, case digest of, case digest on, supreme court case digest, supreme court case digests JOAQUINA VENTURA assisted by her husband, JOSE VENTURA, plaintiff-appellant, vs. EUSEBIO BERNABE, defendant-appellee. Adriano R. Osorio for plaintiff-appellant. Felizardo Y. Viray for defendant-appellee.

BARREDO, J.:

CONTRARY TO LAW and was ultimately acquitted in a decision of said court as follows: During the trial of this case, Eusebio Bernabe pointed at the accused and told the Court that he had known her and her husband as early as 1958; that he and accused's husband, are compadres. Bernabe testified that Maj. Ventura, accused's husband, in the year 1958, was one of the members of the Presidential Fact Finding Committee, which was under the chairmanship of Commander Calinawan. He said that he was an agent of Ventura and as such he had some dealings with Commander Calinawan, thru Ventura; that during the year 1968, Marcelino Calinawan on five occasions asked him for sums of money thru Maj. Ventura, which sums all amounted to P2,000.00; that he gave all this money to Marcelino Calinawan thru Ventura altho he admitted that he does not know and has not yet met the said Commander Calinawan. On October 4, 1958, Bernabe said the accused went to his house and showed to him a letter purporting to be, signed by Commander Calinawan, asking for the sum of P350.00; that on the strength of this letter and the representation of the accused that Calinawan was in her house waiting for the money, he right away made a check, Exh. B, and delivered it to the said accused, Bernabe further testified that later on he went to see Commander Calinawan and inquired whether he received the money and the latter replied that he never received any; that he showed Calinawan the letter, Exh. A, and the latter denied that he wrote the said letter. In her defense, the accused vigorously denied that she went to the house of Eusebio Bernabe and gave the letter, Exh. A. She also denied having received the check on October 4, 1962. She said that on October 4, 1962 she did not go out of her house because she has just delivered and was still weak. The accused further testified that the complainant in filing this case against her must have been motivated because of a series

of misunderstandings he had with her husband. The accused claims that she does not know Commander Calinawan. After hearing the evidence of the prosecution and that of the accused the Court finds the following as established facts: That Eusebio Bernabe was an agent of Maj. Ventura. Major Ventura in turn was an agent of Commander Calinawan who was at that time the Chairman of the Presidential Fact Finding Committee. Bernabe does not know Calinawan and has no direct contact with him, and that as an agent of Maj. Ventura Bernabe has been giving money to Calinawan which totalled all in all P2,000.00. Now, on these facts, several questions puzzled the Court. Why was Bernabe giving money to Calinawan when according to his own testimony he does not know the said Calinawan? Why did Bernabe go to Calinawan in order to verify about the letter, Exh. A, and also to find out whether he has received the money that he gave to the accused when he did not do so when he gave Calinawan the sums of money that totalled all in all P2,000.00? The failure of Bernabe to explain these circumstances has made the evidence of the prosecution incoherent and vague and, eventually, affected the credibility of the said Bernabe. On the other hand, the Court finds that the testimony of the accused is more credible. The accused said that Bernabe filed the instant case because of a series of misunderstandings that the said Bernabe had with her husband, Maj. Ventura. This was not even rebutted by the prosecution. IN VIEW OF THE FOREGOING, the Court finds the accused NOT GUILTY of the crime charged, and, therefore ACQUITS her, with costs de oficio. SO ORDERED.

Subsequent to this acquittal, appellant, with the assistance of her husband, her co-appellant, filed the above-mentioned civil case against appellee Bernabe praying "that judgment be rendered in favor of the plaintiff and against the defendant: (a) ordering the defendant to pay the plaintiff the sum of P30,000.00 for moral damages and another amount of P10,000.00 as exemplary and/or corrective damages; (b) ordering the defendant to pay the plaintiff the sum of P2,000.00 for actual damages for attorney's fees incurred in connection with Criminal Case No. 9003, the sum of P720.00 for premium paid on plaintiff's bail bond for 4 years in connection with the Criminal Case No. 9003 and another sum of P2,000.00 as attorney's fees in the instant case; (c) and to pay the cost of suit and such other just and equitable reliefs and remedies in and about the premises. upon the allegation that said "defendant formulated against the plaintiff (the above) criminal charge before the Fiscal's Office, with malicious intent and/or malice aforethought, and without justifiable cause or motive whatsoever, other than to wreck vengeance on the plaintiff and her husband (against) whom defendant had an axe to grind, and for the purpose of smearing the honor, reputation and prestige of the plaintiff and her family and to embarrass and expose her to public ridicule and contempt, which led to the filing before the Court of First Instance of Rizal of a criminal case docketed as No. 9003 for Estafa thru Falsification of Private Document; copy of the information (criminal complaint above-quoted) is hereto attached and marked Annex A of this complaint" and "by reason of defendant's malicious and unjustifiable filing of the criminal action", she suffered the damages claimed in the above-quoted prayer. In due time, appellee filed a motion to dismiss grounded thus:

It is the theory of the defendant that the facts alleged in the complaint does not state a cause of action because the Supreme Court ruled that: "No civil action for damages on account of malicious prosecution can be maintained unless the court in acquitting the defendant of the criminal charge orders a criminal prosecution to be commenced against the complaining witness for false prosecution. (Gonzales Quiros vs. Palanca Tan Guinlay, 5 Phil. 675; Herrera vs. Escoto, 56 Phil. 804; Eclarin vs. Municipality of Tayabas, 32 Phil. 368; US vs. Barrera, 4 Phil. 461)" "(For) An action instituted for the recovery for (the) injury and damage as a result of a false denunciation or libelous accusation, (may) to be proper and maintainable before the courts it is indispensable that, in the judgment, whereby the accused is absolved or in the order of the final dismissal, the said denunciation or accusation is expressly certified to be false or libelous, otherwise the action cannot prosper. (Grattage vs. Standard Fuel Co., 20 Phil. 460)" As gleaned from the above-named rulings of the Supreme Court, action for damages based on malicious prosecution would only lie if the court that renders the decision acquitting the accused declares that the offense charged is false and malicious or orders the prosecution of the complaining witness. A careful perusal of the decision at bar, will show that the same does not contain such declaration or order. The Honorable Judge Andres Reyes simply absolved the accused or the herein plaintiff of the offense charged without, however, making any pronouncement or explicit statements

that the accusation is false and libelous; neither did he order that the complaining witness or the herein defendant be proceeded against through an information by the prosecuting officer. Moreover, after examining the findings of the Court in the instant case, it is safe to conclude that the herein plaintiff was acquitted not because the accusation against him is fabricated but on the ground of insufficiency of evidence or failure of the prosecution to prove his guilt beyond reasonable doubt. and over the vigorous objection of the appellant, the trial court issued the appealed order of dismissal, pertinent portions of which read: Acting now on said motion and upon careful consideration and study of the case at bar, as well as the arguments adduced for and against said motion, the Court is of the opinion that the complaint states no cause of action. This conclusion is buttressed by the doctrine enunciated in the case of Grattage vs. Standard Fuel Co., Inc., 20 Phil. 460 wherein it is stated that: Malicious Prosecution; Declaration by the Trial Judge; Action for Damages.In order that an action for damages may lie upon a false charge or accusation of a crime of a public nature, it is indispensable that the final decree of acquittal or dismissal in such case should declare that it is false and slanderous. In the absence of such declaration, the false accuser can not be prosecuted upon a claim for indemnity under article 326 of the Penal Code. Id; Id; Id.When in proceedings had in the investigation of a crime falsely charged, the judgment or order of dismissal does not expressly declare that the denunciation or accusation is false and libelous, there is no basis upon which to rest a claim of civil liability, which is merely a consequence of the

criminal responsibility. (Gonzales Quiros vs. Palanca Tan Guinlay, 5 Phil. Rep. 675) In this appeal, appellants' brief, which, incidentally, leaves much room for improvement, assigns three errors allegedly committed by the court below but centers its discussion only on the point that His Honor has erroneously relied on old decisions of this Court applying Article 326 of the Spanish Penal Code of 1887 which required as a condition precedent for the filing of a suit for malicious prosecution (acusacion o denuncia falsa) a previous court finding specifically to the effect that the previous accusation was false, inasmuch as, according to appellants, said Article 326 has not been carried over in the Revised Penal Code. While it is obvious that the argument that the stated requirement of the old penal code Article 326 no longer holds under the present laws under which appellants' complaint was filed is well taken, appellants' brief has left it to this Court to note by itself what in fact is the more serious and fatal error committed by the trial court, namely, that it dismissed appellants' complaint notwithstanding that it sufficiently states in form and in substance a cause of action for malicious prosecution under Article 2219 and related provisions of the Civil Code. Exercising Our discretion as authorized by Section 7 of Rule 51 of the Rules of Court, We opt to consider said plain error on Our own initiative and, in consequence, We reverse the appealed order of dismissal. The sole point raised by appellants regarding Article 326 of the Spanish Penal Code and the decisions applying the same, Grattage v. Standard Fuel Co., 20 Phil. 460; Gonzales Quiros v. Palanca Tan Guinlay, 5 Phil. 675; Herrera v. Escoto, 56 Phil. 804; U.S. v. Barrera, 4 Phil. 461 and Eclarin v. Municipality of Tayabas, 32 Phil. 368, cited by the trial court as well as by appellee, needs no elaborate discussion. People vs. Rivera, 59 Phil. 326, settled definitely that Article 326 of the Spanish Penal Code "does not appear in the Revised Penal Code, which contains no offense denominated "acusacion o denuncia falsa" or its equivalent." The only provision of the Revised Penal Code which may be said to refer to the same subject is Article 363 on Incriminatory Machination providing thus: ART. 363. Incriminating innocent person.Any person who, by any act not constituting perjury, shall directly incriminate

or impute to an innocent person the commission of a crime shall be punished by arresto mayor. As has already been held in Rivera, this article does not contemplate the idea of malicious prosecution in the sense of someone prosecuting or instigating a criminal charge in court: Comparing now article 363 of the Revised Penal Code with article 326 of the old Penal Code, it will be observed that under article 326 of the former Penal Code, the gravamen of the offense is the imputation itself when made before an administrative or judicial officer, whereas in article 363 of the Revised Penal Code the gravamen (sic) of the offense is performing an act which "tends directly" to such an imputation. Article 326 of the old Penal Code punishes false prosecutions whereas article 363 of the Revised Penal Code punishes any act which may tend directly to cause a false prosecution. It is well settled law that where the text of a statute is clear, it is improper to resort to a caption or title to make it obscure. Such secondary sources may be resorted to in order to remove, not to create doubt. (Cf. People vs. Yabut, 58 Phil. 499.) In the present case we think it proper to call attention to the title immediately preceding article 363 of the Revised Penal Code which is as follows: "Asechanzas Inculpatorias", as throwing some light on the classes of acts which tend directly to lead to false prosecutions. The word asechanza, as defined in standard dictionaries, means as follows: "Intriga, lazo, red, zancadilla, tranquilla, amao, engao, artificio, trama, treta especie de maquinacion urdida, de celada dispuesta contraalguno, bien sea para perderlo enteramente, bien para jugarle (sinhundirlo) alguno mala pasada. Engao o artificio para hacer dao a otro. Usase, por lo comun, en el plural, asechanzas". Accion y efecto de asechar. It seems to us a forced extension of the term

asechanza to bring aformal criminal complaint within the conception of intriga, engao, artificio, etc. It seems the more reasonable and sensible interpretation to limit article 363 of the Revised Penal Code to acts of "planting" evidence and the like, which do not in themselves constitute false prosecutions but tend directly to cause false prosecutions. Appellants do not pretend, neither have they alleged in their complaint that appellee has planted evidence against them. At the most, what appellee is alleged to have done is that he had filed the criminal complaint above-quoted against appellant Joaquina Ventura without justifiable cause or motive and had caused the same to be prosecuted, with him (appellee) testifying falsely as witness for the prosecution. These acts do not constitute incriminatory machination, particularly, because Article 363 of the Revised Penal Code punishing said crime expressly excludes perjury 1 as a means of committing the same. To be sure, for the purposes of the present civil case, it is of no moment that there is no such crime of malicious prosecution in the Revised Penal Code. The present civil action need not be based on the existence of such a crime Article 2219 of the Civil Code which provides that "moral damages may be recovered in the following cases: (8) Malicious prosecution" would more than sufficiently serve as a basis for relief in court against a party who has maliciously caused another to baselessly and unjustifiably undergo a criminal prosecution for an offense he knows the latter has not committed. Related provisions like Article 21 of the same code providing, "any person who willfully causes loss or injury to another in a manner contrary to morals, good customs or public policy shall compensate the latter for the damage" and Article 2176 on torts or quasi-delict may also serve the purpose. We have referred to Rivera only to show that the provision of Article 326 of the Spanish Penal Code to the effect that "no se procedera, sin embargo, contra el denunciador o acusador sino en virtud de sentencia firme o auto, tambien firme de sobreseimiento del tribunal que hubiere conocido del delito imputado", whether it referred to a subsequent civil or criminal proceeding, has no counterpart in the articles of the Civil Code just mentioned nor in any other law or rule of court. Thus, all that the aggrieved party in a case of

malicious prosecution has to prove to merit the award of damages is that he has been denounced or charged falsely of an offense by the defendant, that the latter knows that the charge was false, that the said defendant acted with malice and, of course, the damages he has suffered. In Martinez v. United Finance Corporation, G.R. No. L-24017, August 31, 1970, 34 SCRA 524, Mr. Justice Makalintal, speaking for the Court, held: Malicious prosecution, to be the basis of a suit, requires the elements of malice and want of probable cause in the prosecution of an action against the plaintiff. A third element is that the defendant must himself be the prosecutor or the instigator of the prosecution, which ended in acquittal. These elements are discussed in the case of Buchanan vs. Vda. de Esteban, (32 Phil. 363.) thus: "To support an action for malicious prosecution under American law the plaintiff must prove, in the first place, the fact of the prosecution and the fact that the defendant was himself the prosecutor, or that he instigated its commencement, and that it finally terminated in his acquittal, that, in bringing it, the prosecutor had acted without probable cause, and that he was actuated by legal malice, i.e., by improper or sinister motives. These three elements must concur; and there is no distinction between actions for criminal prosecution, and civil suits. Both classes require substantially the same essentials. Malice is essential to the maintenance of an action for malicious prosecution and not merely to the recovery of exemplary damages. But malice alone does not make one liable for malicious prosecution, where probable cause is shown, even where it appears that the suit was brought for the mere purpose of vexing,

harassing and injuring his adversary. In other words, malice and want of probable cause must both exist in order to justify the action." (Quoted in Rehabilitation Finance Corp. v. Koh, L-15512, Feb. 28, 1962, 4 SCRA 535, 540.) It is true that in that case of Martinez, this Court sustained the order of dismissal of the complaint for malicious prosecution partly because a preliminary investigation had been conducted by the fiscal who had found probable cause for the filing of an estafa case against Martinez, but the main consideration for such action of this Court was the fact that from the recitals in the judgment acquitting the plaintiff, it appeared that although the court found that said plaintiff had been guilty of deceit, the issue resolved by the court was that in law such deceit did not constitute estafa, a matter which had been passed upon by the fiscal in a different way, naturally, without any fault on the part of the defendant. In other words, in Martinez case, the findings of the criminal court in the decision of acquittal negatived the imputation of malice on the part of the defendant in charging plaintiff with estafa before the fiscal. In the case at bar, the complaint alleges, as earlier stated, that "defendant formulated against the plaintiff (the above) criminal charge before the Fiscal's Office, with malicious intent and/or malice aforethought, and without justifiable cause or motive whatsoever, other than to wreck vengeance on the plaintiff and her husband (against) whom defendant had an axe to grind, and for the purpose of smearing the honor, reputation and prestige of the plaintiff and her family and to embarrass and expose her to public ridicule and contempt, which led to the filing before the Court of First Instance of Rizal of a criminal case docketed as No. 9003 for Estafa thru Falsification of Private Document; copy of the information (criminal complaint above-quoted) is hereto attached and marked Annex A of this complaint" and "by reason of defendant's malicious and unjustifiable filing of the criminal action", she suffered the damages claimed in the above-quoted prayer. Unlike in the Martinez case, We cannot say that the aforequoted decision that acquitted Bernabe suggests clearly that said respondent had good reasons to accuse appellant Joaquina Ventura as he did. Quite on the contrary, the findings of the court that the "testimony of the accused is more credible" and that the

testimony of said accused that "Bernabe filed the instant case because of a series of misunderstanding that the said Bernabe had with her husband, Maj. Ventura was not even rebutted by the prosecution", would seem to indicate otherwise, that is, that the exculpatory version of the accused was the true one. In any event, whether or not all the circumstances would show actual or legal malice is a matter of proof. At this juncture, the only question before Us is whether or not the complaint of appellants make out a case of damages for malicious prosecution. In Palma vs. Graciano, 99 Phil. 72, penned by no less than our present Chief Justice Concepcion, it was pertinently pointed out: ... The order of dismissal complained of is predicated upon the theory that the filing of the information above referred to, is "presumed" to have been made "in good faith" and that, in fact, the proper court had found the existence of probable cause against plaintiff herein, contrary to the allegations in the complaint, which specifically charges "bad faith", lack of "any probable cause", desire to give vent to "personal hatred and vengeance," and intent to harass and embarrass the plaintiff and to besmirch his honor and reputation. The only question for determination by the court, at the time of the issuance of said order, was whether or not the complaint states a cause of action. This implied that said issue was to be passed upon on the basis of allegations of the complaint, assuming them to be true. Instead, his honor, the trial judge inquired into the truth of said allegations and, in effect, found them to be false. And this it did without giving the plaintiff an opportunity to prove his aforesaid allegations. Thus, the lower court had, not only exceeded its jurisdiction, by going beyond the purview of the issue posed by defendants' motion to dismiss, but, also, denied due process of law to plaintiff herein, by, in effect deciding the case on the merits, before it had been submitted for decision and before plaintiff had a chance to introduce evidence in support of the allegations of his complaint."

As may be noted, the phraseology of the material allegations of the complaint in this case and those in the above case of Palma are practically identical, for which reason, a similar result is called for. After all, what could be a safe test as to whether or not there is malicious prosecution is indicated in Buenaventura, et al. v. Sto. Domingo and Ignacio, 103 Phil. 239, thus: It is true that the present action is not criminal but civil in nature, but the provisions of the Civil Code in making reference to malicious prosecution must necessarily imply that the person to be held liable to pay moral damages should have acted deliberately and with knowledge that his accusation of the person subject to such malicious prosecution, was false and groundless. The same thing is true as regards the demand for attorney's fees and expenses of litigation authorized under Article 2208, No. 3 of the Civil Code. Substantially, if not literally, and on the whole, this is what the complaint here in question alleges, hence Our conclusion that the same states a cause of action. For the rest, it might just as well be clarified here, lest some statements in Martinez and Buenaventura relative to the materiality of the fiscal's having filed an information on the question of malice of the accuser may be misunderstood, that such participation of the fiscal is not decisive and that malice may still be shown, the holding of a preliminary investigation and the finding of probable cause by the fiscal notwithstanding. The same may be said of cases where preliminary investigations are conducted by judges. The determination of the issue of malice must always be made to rest on all the attendant circumstances, including the possibility of the fiscal or judge being some-how misled by the accuser's evidence. No doubt, the very purpose of preliminary investigations is to avoid baseless and malicious prosecutions, still, whether or not in a particular case such an objective has been duly pursued is a matter of proof. Just as it is bad to encourage the indiscriminate filing of actions for damages by accused persons after they have been acquitted, whether correctly or incorrectly, a blanket clearance of all who may be minded to charge others with offenses, fancied or otherwise, without any

chance of the aggrieved parties in the appropriate cases of false accusation to obtain relief, is in Our opinion short of being good law. In this connection, it may be mentioned that in the original draft of the Civil Code prepared by the Code Commission, the present provisions on human relations, evidencing concern so that offended parties in criminal cases may have redress in civil actions independently of the fate of the corresponding criminal case or even without this, were in a sense counter-balanced by a proposal to make the state itself liable in damages to anyone who might, on the other hand, be erroneously or falsely charged with an offense by the government prosecutor. As has happened, however, such an idea did not gain legislative approval. This accounts for the absence of any specific provision on malicious prosecution in the chapter on human relations, but it also indicates that in the mind of the legislators the primary responsibility for a false charge is with the person who initiates or instigates the criminal prosecution and Articles 2219, 21 and 2176 may be availed of in particular instances where such person is actuated by malice or other evil motive. IN VIEW OF ALL THE FOREGOING, the appealed decision is reversed and this case is ordered remanded to the court of origin for further proceedings not inconsistent with the above opinion, with costs against appellee. MANILA GAS CORPORATION, petitioner-appellant, vs. COURT OF APPEALS and ISIDRO M. ONGSIP, respondents-appellees.

Manila Gas Corporation, the petitioner herein, is a public utility company duly authorized to conduct and operate the gainful business of servicing and supplying gas in the City of Manila and its suburbs for public necessity and convenience while private respondent, Isidro M. Ongsip, is a businessman holding responsible positions in a number of business firms and associations in the Philippines. On May 20, 1964, respondent Ongsip applied for gas service connection with petitioner Manila Gas Corporation. A 1 x 4 burner gas was installed by petitioner's employees in respondent's kitchen at his residence at 2685 Park Avenue, Pasay City. On July 27, 1965, respondent Ongsip requested petitioner to install additional appliances as well as additional gas service connections in his 46-door Reyno Apartment located also in the same compound. In compliance with said request, petitioner installed two 20-gallon capacity water storage heaters and two heavy-duty gas burners and replaced the original gas meter with a bigger 50-light capacity gas meter. The installations and connections were all done solely by petitioner's employees. There was no significant change in the meter reading despite additional installations. In May and June of 1966 no gas consumption was registered in the meter, prompting petitioner to issue a 'meter order' with instructions to change the gas meter in respondent's residence. On August 17, 1966, at around 1 o'clock in the afternoon, petitioner's employee led by Mariano Coronal, the then Chief of the Distribution Department, went to Ongsip's place. After Identifying themselves to the houseboy therein that they are from the Manila Gas Corporation, but without notifying or informing respondent Ongsip, they changed the gas meter and installed new tube connections. At the time the work was being undertaken, private respondent was taking a nap but he was informed afterwards of what had taken place by his houseboy. On that same afternoon, at about 5 o'clock, petitioner's employees returned with a photographer who took pictures of the premises. Respondent Ongsip inquired from Coronel why they were taking pictures but the latter simply

MAKASIAR, J.: This petition for certiorari treated as a special civil action seeks to review the decision of the Court of Appeals in CA-G.R. No. 50956-R dated July 6, 1976 affirming the decision of the Court of First Instance of Rizal, Pasay City Branch VII in Civil Case No. 3019-P dated May 2,1972.

gave him a calling card with instructions to go to his (Coronel's) office. There, he was informed about the existence of a by-pass valve or "jumper" in the gas connection and that unless he gave Coronel P3,000.00, he would be deported. Respondent Ongsip refused to give the money, saying that he was not afraid as he had committed no wrong and that he could not be deported because he is already a Filipino citizen.By the end of August, a reading was made on the new meter and expectedly, it registered a sudden increase in gas consumption. Thereafter, in October, 1966, a complaint for qualified theft was filed by petitioner against respondent Ongsip in the Pasay City Fiscal's Office docketed as I.S. No. 51441 (p. 3, Folder of Exhibits) In February, 1967, pending investigation of the criminal complaint, petitioner disconnected respondent's gas service for alleged failure and/or refusal to pay his gas consumptions from July, 1965 to January, 1967 in violation of petitioner's regulation agreed upon in the 'Application for Gas Service' which states that:

. . there is no evidence to establish the fact that there is an illegal installation or jumper in the premises of Isidro Ongsip and this is sustained by the fact that the prosecution witnesses did not attempt to excavate the premises of Isidro Ongsip in order to determine with certainty that there is an illegal installation. Without excavating the premises of Isidro Ongsip it is impossible to conclude with reasonable certainty that there is a jumper or illegal installation because illegal installation or jumper must not only proceed from an assumption but must be based from actual facts as proved (pp. 4-6 Folder of Exhibits). On July 14, 1967, following the dismissal by the investigating fiscal of the complaint for qualified theft and the disconnection by petitioner of his gas service, respondent Ongsip filed a complaint with the Court of First Instance of Rizal, Pasay City Branch VII for moral and exemplary damages against petitioner Manila Gas Corporation based on two causes of action, firstly: the malicious, oppressive and malevolent filing of the criminal complaint as a result of which "plaintiff has suffered mental anguish, serious anxiety, social humiliation, ridicule, embarrassment and degradation in the eyes of his business associates, friends, relatives and the general public"; and, secondly: the illegal closure of respondent Ongsip's gas service connection without court order and without notice of warning purely "to further harass, humiliate and ridicule plaintiff, thereby again exposing unjustly, cruelly and oppressively the plaintiff, as well as his family, to social humiliation and degradation, to public contempt and ridicule, to personal discredit and dishonor and thus causing the plaintiff plaintiff and the members of his family irreparable injuries consisting of business and social humiliation, personal dishonor, mental anguish, serious anxieties, wounded feelings and besmirched reputation". In addition to attorney's fees and costs of litigation, respondent Ongsip likewise prayed that "pending final determination of the case that a writ of preliminary mandatory injunction forthwith issue, commanding the defendant corporation, its agents and employees to reconnect the gas service and supply at the residence and apartment of plaintiff at 2685 Park Avenue, Pasay City" (pp. 1-11, ROA).

xxx xxx xxx (8) The Corporation is authorized to discontinue service to the customer for any of the following reasons: After 72 hours' notice in writing for a) violation of the conditions herein set forth; b) Non-payment of bills overdue; xx xx (p. 1, Folder of Exhibits). Subsequently, the complaint was dismissed by the city fiscal of Pasay City in a resolution dated May 29, 1967, on the ground that

On July 19, 1967, petitioner filed a motion to dismiss alleging the complaint states no valid cause of action. Respondent Ongsip filed an opposition thereto (pp. 12-24, ROA). On August 11, 1967, the trial court issued an order denying petitioner's motion to dismiss (pp. 24-25, ROA). Consequently, on September 8, 1967, petitioner filed its answer stating that the filing of the criminal complaint in the Pasay City Fiscal's Office which was made the basis of the first cause of action was precipitated by the discovery of an illegal by-pas tube or "jumper" in the kitchen cabinet and immediately below the gas burners in respondent's residence. With respect to the second cause of action, petitioner stated that the cutting-off or the disconnection of private respondent's gas service was on account of the latter's failure to settle and pay outstanding and due payments representing gas consumptions from July, 1965 to January, 1967. In both instances, according to petitioner, there was no intent to threaten, ridicule, embarrass or humiliate respondent Ongsip. A counterclaim for actual or compensatory damages and exemplary damages was interposed therein (pp. 24-31, ROA). In the meantime, the court had issued an order dated September 6, 1967 granting the writ of preliminary mandatory injunction as prayed for in the complaint for damages upon respondent Ongsip's filing of a bond in the amount of P10,000.00 (pp. 33-34, ROA). On May 2, 1972, the trial court rendered its decision (a) Ordering defendant to pay plaintiff: (1) P50,000.00 as moral damages in the FIRST CAUSE OF ACTION; (2) P10,000.00 as exemplary damages in the FIRST CAUSE OF ACTION;

(3) P30,000.00 as moral damages in the SECOND CAUSE OF ACTION; (4) P5,000.00 as exemplary damages in the SECOND CAUSE OF ACTION; (5) P10,000.00 as attorney's fees; and (6) the costs of the suit; AND (b) Dismissing the defendant's counterclaim [pp. 44-76, ROA]. Within the reglementary period, petitioner appealed to the Court of Appeals assigning two errors, to wit: The lower court erred in concluding that the filing of the criminal complaint was motivated purely 'to harass, threaten and ridicule' plaintiff despite clear and convincing evidence showing the actual existence of a gas jumper by-pass in plaintiff's establishment. The lower court erred in concluding without basis and findings of facts that the closure of plaintiff's gas service was arrogant and abusive despite provision of a contract to the contrary (p. 7, Brief for Defendant-Appellant). On July 6, 1976, the said Court rendered its decision, pertinent portions of which are quoted hereinbelow: We are inclined to concur with the court a quo that the existence of a 'jumper' was merely a presumption on the part of Coronel. Indeed the discrepancy or fluctuation in the gas consumption in appellee's place could very well be attributed to many factors, such as a defective meter or a reduction in the use of the appliances on the premises considering that the restaurant/hotel business is transient. Neither can appellant

attribute any defect in the installation of the appliances to the appellee as the installation was undertaken by the former's employees (T.S.N. pp. 12-13, December 17, 1968). Similarly, the gas meter was installed by defendant corporation, so that when a report was made that the original meter was defective, a new one was installed (T.S.N., pp. 27-28, December 1, 1970). Again, according to the testimony of Delfin Custodia, mechanical engineer of defendant-appellant, the second meter that was installed on August 11, 1966 was replaced as being defective because 'some of its parts were worn out and that it was not properly registering,' (T.S.N., pp. 14-15, December 2, 1970). Therefore, rather than impute the fluctuation in gas consumption to a 'jumper' in the service connection, it would be more in keeping with the circumstance of the case to attribute this to the faulty meter installed by defendant-appellant. Indeed, from the evidence for the appellant itself that the old installation was embedded in the cement wall (which was later changed by appellant to exposed pipes; t.s.n. p. 55, March 3, 1971). We are of the belief that it was unlikely for the appellee to install a 'jumper' in the cement wall, a conclusion which bears support in the report of the City Fiscal, Pasay City that 'Isidro Ongsip was agreeable to have his place excavated and demolished provided that if there is no illegal installation or jumper found in the premises, the Manila Gas Corporation should answer for whatever damages that may be incurred in connection with its excavation of the premises "which offer was declined by appellant, indicating that it was not certain as to the existence of such jumper (Resolution, Exhibit 'D'). In the light of the foregoing, appellant's first assigmment of error must necessarily fail. Anent the second assignment of error, it appears that the gas service to appellee's compound was disconnected on the basis of non-payment of three-months bills, which were admittedly

computed only on the average consumption registered, without benefit of meter reading (T.s.n. p. 13, April 30, 1971), and without previous notice of disconnection or reminder to pay (T.s.n. pp. 44-45, Id., p. 30, May 18, 1971). Considering that the availability of the gas service was of utmost importance to appellee in the pursuit of his business venture (hotel-motel restaurant), it is not difficult to foresee the losses that the business must have incurred as a consequence of appellant's unwarranted and arbitrary act. It may not be amiss to take note at his juncture that in assessing the damages in favor of appellee, the court a quo did not award him actual damages, but merely moral and exemplary damages plus attorney's fees pursuant to Articles 2208 paragraphs (1) and (11); Articles 2217, 2219 paragraph (8) and 2229 of the New Civil Code. And, considering further the provisions of Article 2216 of said Code: No proof of pecuniary loss is necessary in order that moral nominal, temperate, liquidated or exemplary damages may be adjudicated. Theassessment of such damages, except liquidated ones, is left to the discretion of the Court, according to the circumstances of each case; which is amply supported by the evidence on record, taking into consideration appellee's standing in the community, WE find that the award must be sustained. WHEREFORE, the decision appealed from is hereby affirmed in toto, it being in accordance with the law and evidence adduced during the trial. Costs against appellant (pp. 75-85, rec.). Hence, on September 1, 1976, Manila Gas Corporation filed a petition for review by way of appeal to this Court based on the following grounds, to wit:

I. The derision is not supported by the facts and the evidence. Rather, the decision is belied and rebuked by the clear and overwhelming evidence. A. The finding that witness Mariano Coronel is an unreliable witness is totally unsupported by any evidence. B. The filing of the criminal complaint against Ongsip was not actuated by malice on the part of petitioner. C. The filing of the criminal complaint against respondent Ongsip was based on probable cause. D. The closure of Ongsip's gas service was made after due notice to pay his back accounts was given and after a warning of disconnection. II. The decision of respondent court is contrary to settled jurisprudence enunciated by this Honorable Supreme Court and is unsupported by any evidence.

IV. Under the facts and the law, petitioner is not liable for moral and exemplary damages. V. Assuming arguendo that the petitioner is liable for moral and exemplary damages, the amount awarded by the trial court and affirmed by the Court of Appeals are grossly, exorbitant as to call for a review thereof" (pp. 22-23, rec.). On December 13, 1976, this Court, after considerating the allegations, issues and arguments adduced in the petition for review on certiorari of the decision of the Court of Appeals, private respondent's comment thereon as well as petitioner's reply to said comment, resolved to GIVE LIMITED DUE COURSE to the petition as to whether or not the damages awarded by the trial court as affirmed by the Court of Appeals per its decision of July 6, 1976 are excessive and should be reduced and to TREAT the petition for review as a special civil action. WE are thus constricted to a single issue in this case: whether or not the amount of moral and exemplary damages awarded by the trial court and affirmed by the Court of appeals is excessive. Article 2217 of the Civil Code states that "moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral damages may be recovered if they are the proximate result of the defendant's wrongful act or omission." On the other hand, Article 2229 provides that "exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition, to the moral, temperate, liquidated or compensatory damages" (emphasis supplied). The first cause of action, for which respondent Ongsip was awarded moral and exemplary damages in the amount of P50,000.00 and P10,000.00, respectively, is predicated on Article 2219 of the Civil Code which states that

A. Advice of counsel is a complete defense against a suit for malicious prosecution. III. The decision of respondent court on the Second Cause of Action of respondent Ongsip is based on a misapprehension of facts.

"moral damages may be recovered in the following and analogous cases: .. . (8) malicious prosecution; .. . To constitute malicious prosecution, there must be proof that the prosecution was prompted by a siniter design to vex and humiliate a person that it was initiated deliberately by the defendant knowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution. (Salao vs. Salao, 70 SCRA 65 [March 16, 1976]; Ramos vs. Ramos, 61 SCRA 284 [December 3, 19741]; Solis & Yarisantos vs. Salvador, 14 SCRA 887] [August 14, 1965]; Buenaventura, et al. vs. Sto. Domingo, et al., 103 Phil. 239 [1958]; Barreto vs. Arevalo, 99 Phil. 771 [1956]). In the instant case, however, there is reason to believe that there was malicious intent in the filing of the complaint for qualified theft. This intent is traceable to that early afternoon of August 17, 1966, when petitioner's employees, upon being ordered, came to private respondent's residence and changed the defective gas meter and tube connections without notice. In other words, respondent Ongsip had no opportunity to observe the works. Nonetheless, if indeed he had installed an illegal by-pass tube or jumper, he could have easily asked for its immediate removal soon after his houseboy told him what petitioner's employees did. As established by the facts, he had not even attempted to refuse entrance to petitioner's employees headed by Mariano Coronel nor to question their authority upon their return later that same afternoon with a photographer. Little did he realize that the pictures of the premises that were being taken would be used as evidence against him. Surprisingly, when respondent Ongsip asked Coronel why they were taking pictures, Coronel just gave him a calling card and instructed him to go to his office. It was quite an unusual gesture. Obviously, Coronel had something in mind. As correctly observed by the trial court in its decision A significant fact brought about by the testimony of Coronel himself is the total absence of immediate accusation against Plaintiff right at the very moment when the by-pass valve was allegedly discovered. Right then and there Coronel should have told Plaintiff that he was using a by-pass valve and in effect stealing gas from Defendant. There would have

been nothing wrong with that. The circumstance was familiar to that of catching a thief in flagrante delicto. But the truth is that when Coronel and his men entered Plaintiff's compound and made changes therein, Plaintiff was sleeping. He had no knowledge of what was then going on. Coronel and his men told the 'boy' of Plaintiff that the changes were being made so that the consumption of gas could be decreased. So that when Plaintiff woke up at four o'clock in the afternoon, Coronel and his men had already made the changes and had already gone. They returned however at five o'clock, this time with a photographer. This was the time when Plaintiff met Coronel. Here was then the opportunity for Coronel to confront Plaintiff with the allegedly discovered 'by-pass valve' and bluntly, even brutally, tell him that there was thievery of gas. This, Coronel did not do. .. .. ." It bears noting that when he was informed as to the existence of a 'jumper' in his gas connection, respondent Ongsip did not show any sign of fear or remorse and did not yield to the threatening demand of Coronel. Experience tells us that this is not the attitude of a guilty person. On the contrary, this is the attitude of someone who knows how to take a firm stand where his principles and rights are concerned. To prove his innocence, he was even willing to have his place excavated but petitioner would not dare take the consequences. Besides, Delfin Custodio, petitioner's own mechanical engineer, testified that the second gas meter was replaced as being defective because "some of its parts were worn out and that it was not properly registering." Evidently, petitioner Manila Gas Corporation, in failing to recover its lost revenue caused by the gas meter's incorrect recording, sought to vindicate its financial loss by filing the complaint for qualified theft against respondent Ongsip knowing it to be false. It was actually intended to vex and humiliate private respondent and to blacken his reputation not only as a businessman but also as a person. Qualified theft is a serious offense indicating moral depravity in an individual. To be accused of such crime without basis is shocking and libelous. It stigmatized private respondent causing him emotional depression and social degradation. Petitioner should have realized

that what is believed to be a vindication of a proprietary right is no justification for subjecting one's name to indignity and dishonor. One can thus imagine the anguish, anxiety, shock and humiliation suffered by respondent Ongsip. The fact that the complaint for qualified theft was dismissed by the Pasay City fiscal is no consolation. The damage had been done. Necessarily, indemnification had to be made. The trial court awarded P50,000.00 as moral damages and P10,000.00 as exemplary damages. WE give due consideration to respondent Ongsip's social and financial status as a businessman and the mental anguish he suffered as a result of the false imputation. However, We also consider petitioner's financial capability. Petitioner is a public utility corporation whose primary concern is service to the people, the profit motive being merely secondary. Under the circumstances, We are of the opinion that the award of moral and exemplary damages should be reduced to P25,000.00 and P5,000.00, respectively. This award is sanctioned by Article 2234 of the Civil Code which states that: When the amount of the exemplary damages need not be proved, the plaintiff 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. In case liquidated damages have been agreed upon, although no proof of loss is necessary in order that such liquidated damages may be recovered nevertheless, before the court may consider the question of granting exemplary in addition to the liquidated damages, the plaintiff must show that he would be entitled to moral, temperate or compensatory damages were it not for the stipulation for liquidated damages (emphasis supplied). On the second cause of action which is based on the illegal disconnection of respondent Ongsip's gas service constituting breach of contract, the trial court awarded P30,000.00 as moral damages and P5,000.00 as exemplary damages.

Petitioner contends that the disconnection was on account of respondent Ongsip's failure to pay his gas consumptions for more than three months. While private respondent admits having accounts with petitioner, he denies having been notified thereof or having received any warning of the disconnection In determining the propriety of the award, it is material to establish that prior notice or warning had been given to respondent Ongsip before the gas service was disconnected, in accordance with the terms of the contract. In this regard, We find the trial court's observation in its decision to be well-founded, to quote: Defendant would insist that the household helpers inside Plaintiff's premises refused to receive notices or to sign them. Defendant has not given the Court any plausible reason why these persons would refuse to receive, or sign for, notices of demands for payments or warnings of threatened disconnection of the service. The very evidence of Defendants indicates that Plaintiff had long been a customer of Defendant. Plaintiff has been paying his bills. Plaintiff had not suffered any financial reverses. As a matter of fact, upon the suggestion of the Court, Plaintiff readily made payment of his count with Defendant. He made payment not because the service would be restored. When he made the payment the Court had already issued a mandatory preliminary injunction, ordering Defendant to restore gas service in the premises of Plaintiff. Plaintiff made the payment to comply with the suggestion of the Court because the Court rather than enforce its order, would like the parties to settle the case amicably. What is peculiar in the stand of Defendant is that while it would insist on the giving of notices and warnings, it did not have any competent and sufficient evidence to prove the Same. Demands in open were made by Plaintiff counsel whether Defendant could show any written evidence showing that notices and warnings were sent to Plaintiff. Not a single piece of evidence was produced. Normally, if a notice is refused, then the original and its copies would still be in the

hands of the public utility concerned. In the instant case, it has to be repeated, not a single copy, original or duplicate, triplicate, etc. of any notice to pay or warning of disconnection was produced in court. The court cannot believe that Defendant, as what the testimonies of its witnesses would like to impress upon this Court, conducts its business that way. Defendant is a big business concern and it cannot be said that it treats its business as a joke. Its personnel should realize this, for only with such an awareness can they respond faithfully to their responsibilities as members of a big business enterprise imbued with public interest over which the Philippine Government is concerned. Quite obviously, petitioner's act in disconnecting respondent Ongsip's gas service without prior notice constitutes breach of contract amounting to an independent tort. The prematurity of the action is indicative of an intent to cause additional mental and moral suffering to private respondent. This is a clear violation of Article 21 of the Civil Code which provides that "any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages." This is reiterated by paragraph 10 of Article 2219 of the Code. Moreover, the award of moral damages is sanctioned by Article 2220 which provides that "willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith" (emphasis suplied). WE are not unmindful of the fact that at the time the gas service was disconnected, respondent Ongsip admitted having been in default of at least three months' bills. WE have established however that no notice to that effect has been served on him. It must be pointed out that respondent Ongsip is an old man involved in a number of business and social undertakings. It is quite natural and understandable that at times he forgets some minor obligations and details of his concern. This is the time when reminders and friendly notices become indispensable. The rudiments of procedural due proccess dictate that he should have been notified of any back accounts. In the past, respondent Ongsip had not been remiss in the payment of his bills. Petitioner

should have at least accorded him the courtesy, if not the right, as per contract, of being notified before effecting disconnection so that he could take steps or initiate measures to avoid such embarrassment. Apparently, such misconduct or omission on the part of petitioner formed part of a malevolent scheme to harass and humiliate private respondent, exposing him to further ignominy and greater mental torture. Respondent Ongsip's default in payment cannot be utilized by petitioner to defeat or nullify the claim for damages. At most, this circumstance can be considered as a mitigating factor in ascertaining the amount of damages to which respondent Ongsip is entitled. In consequence thereof, We reduce the amount of moral damages to P15,000.00 The award of P5,000.00 as exemplary damages, on the other hand, is sustained, being similarly warranted by Article 2234 of the Civil Code aforequoted as complemented by Article 2220. The award of attorney's fees in the amount of P10,000.00 is justified under the circumstances. WHEREFORE, PETITIONER MANILA GAS CORPORATION IS HEREBY DIRECTED TO PAY (1) RESPONDENT ISIDRO M. ONGSIP P25,000.00 AS MORAL DAMAGES AND P5,000.00 AS EXEMPLARY DAMAGES FOR THE FIRST CAUSE OF ACTION, P15,000.00 AS MORAL DAMAGES AND P5,000.00 AS EXEMPLARY DAMAGES FOR THE SECOND CAUSE OF ACTION, AND P10,000.00 AS ATTORNEY'S FEES; AND (2) THE COSTS. MODIFIED AS ABOVE STATED, THE DECISION OF RESPONDENT COURT OF APPEALS IS HEREBY AFFIRMED IN ALL OTHER RESPECTS. MANILA vs. ELECTRIC COMPANY, petitioner,

HON. COURT OF APPEALS, * HON. TERESITA DIZON-CAPULONG, as Presiding Judge, Regional Trial Court, Valenzuela, Metro Manila, Branch 172, and POLYSTYRENE MANUFACTURING CO., INC., respondents. Jardeleza, Sobrevias, Diaz, Hayudini & Bodegon for petitioner. Mario Z. Florentino for private respondent.

presenting any documentary evidence and instead requested that he be given until February 29, 1988 within which to file his written opposition to the petition. This was granted by the respondent Judge. On March 7, 1988, the respondent Judge granted the prayer for the issuance of a writ of preliminary injunction, the dispositive portion of her order reads, as follows: WHEREFORE, let the Writ of Preliminary Injunction prayed for to be (sic) issued whereby defendant or any person acting in its behalf is hereby enjoined from disconnecting the electrical service to plaintiff provided plaintiff posts an injunction bond in the amount of P500,000.00 conditioned that plaintiff will pay all damages which defendant may suffer by virtue of the issuance of the same writ. SO ORDERED. On March 23, 1988, petitioner MERALCO filed its Answer with affirmative defenses and counter-claims. On March 24, 1988, the respondent Judge issued an Order setting the pre-trial conference for April 28, 1988 at 8:30 a.m. with notice to both parties' counsels, to wit: xxx xxx xxx Enclosed herewith is a copy of the notice of the same reference to your client which you are required to serve upon him. You are also directed to inform your client of the purposes of such conference.

REGALADO, J.: This petition for review on certiorari impugns the decision of respondent court in CA-G.R. SP No. 15452, dated May 19, 1989, 1 dismissing herein petitioner's original action for certiorari which sought the nullification of the judgment by default and the orders of the Regional Trial Court of Valenzuela, Bulacan in its Civil Case No. 2769-V-88. The generative facts of the case, as correctly reported in the decision of respondent court, are as follows: On February 15, 1988, a petition for preliminary injunction was filed before the public respondent to enjoin the petitioner MERALCO from disconnecting electrical service to the private respondent Polystyrene Manufacturing Co., Inc. On February 17, 1988, the public respondent Judge issued a Temporary Restraining Order, commanding the defendant Meralco to maintain the status quo and not to disconnect electric service to Polystyrene at the same time, setting the hearing on the prayer for preliminary injunction. At the hearing on February 23, 1988 on the prayer for the writ of preliminary injunction, respondent Polystyrene presented evidence in support of its prayer. Petitioner MERALCO'S counsel appeared and manifested that he would not be

Notices to plaintiff and defendant were also sent. On the date set i.e. April 28, 1988, for the pre-trial, petitioner MERALCO's counsel failed to appear. Upon verbal motion of Polystyrene MERALCO was declared as in default and Polystyrene was allowed to present its evidence ex-parte on April 29, 1988 before a commissioner. On April 29, 1988, and on the evidence presented ex-parte, the respondent Judge rendered a judgment in default, the dispositive portion of which reads, as follows: WHEREFORE, finding the evidence presented by the plaintiff sufficient to support their (sic) petition, judgment is hereby rendered in favor of the plaintiff and against the defendant: 1. Ordering the defendant to cease and desist permanently from disconnecting its electrical services to plaintiff; 2. Ordering the defendant to pay plaintiff exemplary damages in the amount of P50.000.00; 3. Ordering the defendant to pay attorney's fees in the sum of P50,000.00; 4. Ordering the defendant to pay the cost of suit. SO ORDERED. A copy of the Decision was received by MERALCO's counsel on May 18, 1988.

On June 1, 1988, or on the 14th day, after receipt of the Decision, MERALCO filed a Motion for Reconsideration to Lift Order of Default and to Vacate Judgment by Default. The main reason given for the failure of MERALCO's counsel to appear in the pre-trial conference was that he was incapacitated by influenza. A medical certificate was submitted to support this allegation. After the Opposition and Reply and Rejoinder were filed, the respondent Judge denied the motion for reconsideration. The pertinent portion of her assailed Resolution of July 6, 1988 reads: xxx xxx xxx Defendant's counsel is referred to the ruling in the case of Jose Carandang vs. Hon. Jose R. Cabatuando etc., et al., G.R. No. L-25384, October 26, 1973. In following the ruling of this case, the Court is guided by the fact that due to the unexcusable negligence of defendant's counsel, nothing can be gained by lifting the Order of Default and setting aside the judgment, except delay in the disposition of the case and tacit subservience by the Court to the explicit indifference of counsel appearing before it. Motion for Reconsideration is DENIED. On July 20, 1988, MERALCO's counsel, Atty. Romeo M. Flores, filed his withdrawal of appearance and simultaneously, the latter's new counsel entered their appearance on July 22, 1988. The new counsel for MERALCO filed a Petition for Relief from Judgment praying that the

Decision dated April 29, 1988 be set aside and a new trial he held on the merits. On July 25, 1988, private respondent, Polystyrene was ordered to answer. After trial, the respondent Judge issued an order dated August 19, 1988 dismissing the petition for relief from judgment and, considering that the decision had become final and executory, issued a writ of execution. On August 26, 1988, MERALCO filed a Notice of Appeal from the Order dated August 19, 1988, to this Court of Appeals. On September 8, 1988, respondent Polystyrene filed its Opposition to MERALCO's Notice of Appeal. Earlier, on September 6, 1988, respondent Polystyrene in this instant action (CA-G.R. No. SP-15452) filed a Special Appearance with Manifestation, calling our attention to the fact that before petitioner Meralco filed the instant Petition for Certiorari on August 27, 1988, it had already filed a Notice of Appeal before the court a quo on August 26, 1988. 2 As earlier stated, respondent court dismissed the said petition for certiorari therein for lack of merit. Hence, the instant petition with the following submissions which allegedly warrant our review of the assailed decision, viz.: 1. The Court of Appeals erred when it ruled that the petition for certiorari filed with it was not the proper remedy to assail the questioned orders and judgment by default rendered by the respondent judge; 2. The Court of Appeals erred when it found that certiorari was availed of by petitioner MERALCO only after its right to appeal had elapsed into finality; and

3. The Court of Appeals not only departed from the usual course of proceeding, but also decided questions of substance contrary to law and the applicable decisions of this Honorable Court, when it refused to issue the equitable writ of certiorari to correct the palpable grave abuse of discretion committed by the respondent judge in issuing the questioned orders and judgment by default. 3 After a careful consideration of the issues raised, which we shall rule upon conjointly, we find the petition devoid of merit. While the special civil action of certiorari may be availed of in the alternative situation where an appeal would not constitute a plain, speedy and adequate remedy, this is on the theoretical assumption that the right to appeal is still available in the case. If, however, the remedy by appeal had already been lost and the loss was occasioned by petitioner's own neglect or error in the choice of remedies, certiorari cannot lie as a substitute or a tool to shield the petitioner from the adverse consequences of such neglect or error. The two remedies are mutually exclusive and not alternative or successive. 4 Applying this fundamental principle to the case at bar, it is readily evident that petitioner had ample opportunities to appeal the default judgment rendered against it by the court a quo, to wit, after the default judgment itself was rendered and, later, after its motion to lift the order of default and to vacate the default judgment was denied by the trial court. It nevertheless deliberately allowed the period for appeal to pass without interposing one. Worse, despite the then availability of the remaining period for appeal from the denial of its motion to lift the order of default and to vacate the default judgment, it opted to wait and subsequently file a petition for relief from the judgment 5 which by then was final and executory, with the added misfortune that said petition could not claim any procedural validity both technically and on the merits. On reglementary technical grounds, it is a firmly established doctrine that the relief provided for by Rule 38 of the Rules of Court is of equitable character and is allowed only in exceptional cases, that is, where there is no other available or adequate remedy. A petition for relief is not regarded with favor

and judgment will not be disturbed where the party complaining has, or by exercising proper diligence would have had, an adequate remedy at law, 6 as in the present case where petitioner could have proceeded by appeal to vacate or modify the default judgment. It is no creditable argument that petitioner supposedly preferred respondent judge to correct her own alleged errors. Being a special remedy, a petition for relief is available only under exceptional circumstances, 7 in which equity and justice will prompt the court to give the petitioner a last chance to defend his right or to protect his interest. Even so, the relief will not be granted to a party, like the petitioner, when the loss of remedy at law was due to his own negligence or a mistaken mode of procedure, otherwise, the petition for relief will be tantamount to reviving the right of appeal which had already been lost. 8 On the merits of the petition for relief, we likewise do not find excusable the failure of petitioner's counsel to attend the pre-trial hearing as to justify the grant of relief. It is of record that petitioner was represented in the case below by a number of readily available lawyers belonging to its own legal department who could have easily been sent to attend the pre-trial conference or, at the very least, to move for its postponement if they were not prepared for such hearing. Petitioner, however, utterly failed to comply with the rules to protect its interests. Certainly, the patent lack of coordination among or the cavalier response of the members of its own legal staff, despite due notice of the pre-trial conference, cannot exculpate petitioner from the adverse consequences of the default judgment. As aptly revealed by private respondent in its comment to the basic petition: In the instant case, petitioner is represented by a battery of lawyers headed by Attys. Gerardo R. Gonzales, Amador B. Factura, Vicente M. Montero and Romeo M. Flores. These lawyers appear as counsel on record for petitioner as shown no less in page 21 of the Answer (Annex "M" of Annex "D", Petition) and page 12 of the Opposition to Injunction (Annex "K" of Annex "D", Petition).

If indeed Atty. Romeo M. Flores was sick of influenza, one of the lawyers aforementioned should have had the decency to appear at the pre-trial even just to reset the same if such be their pleasure, but I certainly not to snub the Honorable Court, for such an actuation would further aggravate the seeming disrespect that some lawyers have for court orders. Petitioner and counsel were notified of the pre-trial setting. They knew that they did not attend the same. Good judgment and due diligence would have dictated that petitioner's counsel (a battery of them) should have called up or visited the Court to inquire as to what transpired during the pretrial, which move they did not do through sheer gross negligence and apathy. "The standard of care required of a defendant is that which an ordinary prudent man bestows upon his important business. (Gaylord vs. Berry, 169 N.C. 733, 86 SE 623) xxx xxx xxx . . . Moreover, Annex "2" of petitioner's motion to lift (Annex "P" of Annex "D", Petition) which is the medical consultation slip issued by Dr. Rogelio Sanchez of the J.F. Cotton Hospital (the hospital of Meralco located at the back of their main building in the same company compound), reveals that as early as April 27, 1988, Atty. Romeo Flores already knew that he was to be confined at home for such was the advice of the company doctor: "Advice: for house confinement and to report back to J.F. Cotton Hospital." Diligence, reason, prudence and practice dictates that Atty. Flores, (one of petitioner's counsel) should have gone back to his office which is in the same compound or called up his office from the doctor's office by intercom (local station) and advised the legal staff or his secretary of his situation so that the legal office could have sent the other lawyers (as appearing in the pleadings) to attend and postpone the pre-trial to be held the next day,

April 28. For petitioner's Atty. Flores to claim now that he did not have the means to communicate with his legal staff is purely an afterthought designed merely as a subterfuge to escape the consequences of his negligence as was his feigned illness. As aforestated, the hospital (J.F. Cotton) where Atty. Flores had his check-up is a company hospital and in the same compound as the Meralco Building, where he holds office. 9 (Emphasis in the original).itc-asl It is not arguable that negligence of counsel is binding on the client, just as the latter is bound by the mistakes of his lawyer. 10 This is especially true in petitioner's case where its lawyers are its own house attorneys who should have been more circumspect and vigilant in protecting the interests of their client which is also their employer. With regard to petitioner's contention that the order declaring it in default is a nullity due to its lack of notice of the pretrial hearing, the findings of fact both of the trial court and the respondent court, which are conclusive upon us there being absent any showing of grave abuse of discretion in the appreciation of such facts, belie such contention. Says the trial court on this issue: Defendant assails the decision as a nullity because notice of pre-trial to defendant Manila Electric Company was just enclosed in the notice of pre-trial to Atty. Romeo Flores. Suffice it to say that there were two different notices sent for the pre-trial of April 28, 1988, one for defendant Manila Electric Company and another to Atty. Flores. The enclosure of said notice in one envelope was necessary because both of them are in one and the same building and address that of 5th Floor Lopez Building, Ortigas Avenue, Pasig, Metro Manila. There was no problem regarding the procedure because both notices were received by both the said defendant and its counsel prior to the pre-trial date. 11 Indeed, even if the address of a party be different from that of the counsel, it is best that the trial courts uniformly serve such notice to the party through or

care of his counsel at counsel's address, with the express imposition upon counsel of the obligation of notifying the party of the date, time and place of the pre-trial conference and assuring that the party either appear thereat or deliver to counsel a written authority to represent the party with power to compromise the case, with the warning that a party who fails to do so may be non-suited or declared (as) in default. 12 Premises considered, we find no reversible error in the dismissal by respondent court of petitioner's special civil action for certiorari. It may not be amiss to stress at this juncture that while defaults are frowned upon and courts are encouraged as much as possible to hear cases and determine them on the merits; and that the rules of procedure ought not to be applied in a very rigid, technical sense but should be used to help secure and not to override substantial justice, this does not mean that a party may, by any remedy it chooses to pursue and at any time it decides to do so, except to obtain a desired favorable result, in this case the nullification of the default order or the setting aside of the default judgment. Needless to say, proper and timely challenge is a requisite provided by the rules and compliance therewith is essential for the orderly and expedient administration of justice for which said rules, in the first place, were primarily framed and prescribed. WHEREFORE, the petition is DENIED and the decision appealed from is hereby AFFIRMED. The temporary restraining order of September 13, 1989 is hereby lifted. SO ORDERED. RCPI VS. CA

G.R. No. 79578 March 13, 1991 Facts: Spouses Timan through RCPI sent a telegram, in order to express their condolences for the death of the mother-in-law of their cousins Mr. and Mrs.

Midoranda. The telegram, however, was written in a Happy Birthday card and inserted in a Christmasgram envelope. The spouses Timan, filed an action against RCPI in order to claim damages for the ridicule, contempt and humiliation that the latter caused to the private respondents. RCPI in its defense alleges that the "error" in the social form used does not come within the ambit of fraud, malice or bad faith as understood/defined under the law. Court rendered a decision in favor of Spouses Timan. Issue: Whether or not RCPI should be held liable HELD: YES We fully agree with the appellate court's endorsement of the trial court's conclusion that RCPI, a corporation dealing in telecommunications and offering its services to the public, is engaged in a business affected with public interest. As such, it is bound to exercise that degree of diligence expected of it in the performance of its obligation. In the present case, it is self-evident that a telegram of condolence is intended and meant to convey a message of sorrow and sympathy. Precisely, it is denominated "telegram of condolence" because it tenders sympathy and offers to share another's grief. It seems out of this world, therefore, to place that message of condolence in a birthday card and deliver the same in a Christmas envelope for such acts of carelessness and incompetence not only render violence to good taste and common sense, they depict a bizarre presentation of the sender's feelings. They ridicule the deceased's loved ones and destroy the atmosphere of grief and respect for the departed. Banal vs. Tadeo Facts:

Petitioner herein is one of the complainants in the criminal cases filed against Rosario Claudio. Claudio is charged with 15 separate information for violation of BP 22. Claudio pleaded not guilty, thus trial ensued. Petitioner moved to intervene through private prosecutor but it was rejected by respondent judge on the ground that the charge is for the violation of Batas Pambansa Blg. 22 which does not provide for any civil liability or indemnity and hence, it is not a crime against property but public order. Petitioner filed a motion for reconsideration but was denied by the respondent judge. Hence this appeal. Issue: Whether or not a private prosecutor may intervene in the prosecution for violation of BP 22 which does not provide for civil liability. Held: Yes. Under Art. 100 of the RPC, every person criminally liable for a felony is also civilly liable. Thus a person committing a felony offends namely (1) the society in which he lives in or the political entity called the State whose law he had violated; and (2) the individual member of that society whose person, right, honor, chastity or property was actually or directly injured or damaged by the same punishable act or omission. While an act or omission is felonious because it is punishable by law, it gives rise to civil liability not so much because it is a crime but because it caused damage to another. Viewing things pragmatically, we can readily see that what gives rise to the civil liability is really the obligation and the moral duty of everyone to repair or make whole the damage caused to another by reason of his own act or omission, done intentionally or negligently, whether or not the same be punishable by law. In other words, criminal liability will give rise to civil liability only if the same felonious act or omission results in damage or injury to another and is the direct and proximate cause thereof. Damage or injury to another is evidently the foundation of the civil action. Such is not the case in criminal actions for, to be criminally liable, it is enough that the act or omission complained of is punishable, regardless of whether or not it also causes material damage to another. Article 20 of the New Civil Code provides: Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same.

Regardless, therefore, of whether or not a special law so provides, indemnification of the offended party may be had on account of the damage, loss or injury directly suffered as a consequence of the wrongful act of another. TANJANCO VS. COURT OF APPEALS On Dec., 1957, Apolonio Tanjanco courted Araceli Santos. They were both of legal age then. After some time, they became a couple and in consideration of Tanjancos promise of marriage, Santos acceded to his pleas of carnal knowledge. This happened regularly for about one year until Dec. 1959. Santos conceived a child and as a result of her pregnancy, she was forced to resign from her job as a secretary in IBM Phil. where she received a salary of P230.00 monthly. Tanjanco refused to marry her causing her mental anguish, besmirched reputation, wounded feelings, moral shock & social humiliation. She sued Tanjanco for damages. ISSUE: WON Santos is entitled to damages? HELD: NO. Reversed. Petition dismissed. RATIO: 1. 2. Estopa v. Piansay, Hermosisima v. CA, De Jesus v. SyQuia: actions for breach of a promise to marry are not permissible in this jurisdiction. Purpose behind Art. 21 (any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages)

b.

c.

American Jurisprudence: enticement or deception or persuasion is essence of injury & mere proof of intercourse insufficient to warrant recovery. Case at bar: Santos entered into carnal act voluntarily with mutual passion. Had she been seduced then she could have gotten out of the relationship as soon as she can and not wait until after one year without him fulfilling his promise to marry her. Thus not covered by CC Art. 21.

DE JESUS VS. SYQUIA Cesar Syquia, then 23 years old, single and a scion of a prominent family in Manila, met Antonia de Jesus, then 20 and unmarried and employed as a cashier at the barber shop of Vicente Mendoza who was Syquias brother-inlaw. They became a couple and later on they engaged in an intimate relationship that led to the conception of Ismael Loanco who was born on June 17, 1931. Prior to the birth of the boy, Syquia sent a note to the priest who was expected to christen the baby telling him that he wanted his name to be given to the baby. Likewise, while he was away, he sent letters to De Jesus telling her to take care of herself and the baby whom he called Junior. He arranged everything for the arrival of his son. After De Jesus gave birth, they lived together in Manila like a regular family for about a year. When De Jesus began to show signs of a second pregnancy, Syquia left his family and is now married to another woman. De Jesus sued Syquia for damages for breaching his promise to marry and compelling him recognize his children. ISSUES: 1. WON letters & note to priest are valid acknowledgements of paternity? 2. WON Ismael had an uninterrupted possession of status as natural child? 3. WON there was breach of promise to marry? HELD: Recognize first child, and pay for his maintenance. All other aspects dismissed.

Fill countless gaps in statutes which leave so many victims or moral wrongs helpless, some even suffering material & moral injury. (ex. Seduction) 3. SEDUCTION a. US v. Buenaventura: its more than mere sexual intercourse; it connotes the idea of deceit, enticement, superior power or abuse of confidence on the part of the seducer to which the woman has yielded. Woman must yield because of promise or other inducement. If she consents merely from lust, its not seduction.

RATIO: 1. Yes. Though unborn, child can already obtain rights. Note to padre is sufficient, it being clear & not capable of 2 constructions. Doubt on the letter to the padre, removed by the letters sent by Syquia to de Jesus while he was away. All these letters can be put together to supplement each other. Yes. CC Art. 135(2) (Father may be compelled to acknowledge his natural child: when the child has been in the uninterrupted possession of a status of natural child of defendant father, justified by conduct of the father himself or that of his family). Law didnt fix period for continuous possession of status of natural child.

2.

BUENAVENTURA VS. URBANO: Recognition of children is verbally is not sufficient. It must appear in writing. . 3. Cant make him liable, due to lack of acknowledgment of paternity written in an unquestionable manner and child has not enjoyed uninterrupted possession of status of natural child.

BUNAG JR. v CA (CIRILO) 211 SCRA 440 REGALADO; July 10, 1992

Continuous: concession of status shall continue forever, but only that it shall not be of an intermittent (broken, inconsistent) character while it continues. 3. No. Its not satisfactorily proven and has no standing in civil law except when theres rt to recover money or property advanced upon faith of such promise. DISSENTING OPINION: 1. Written requirement must be complete in and by itself and should contain statements that are necessary to constitute a full and clear acknowledgement. Letters are vague. You cant ascertain who Junior or the creature coming out in June is. Youd need to prove illicit relationship between De Jesus and Syquia and in the process of investigating, youll violate rule which prohibits investigation on paternity except when under Art. 135 CC. Father may be compelled to acknowledge natural child if there is an Uninterrupted possession of status of natural child. In this case, no proof that status was uninterrupted. Proof based on letters done prior to birth of child is inadmissible. Unborn, thus, he has no rights yet.

NATURE Petition for review from the decision of the CA FACTS - On Sept. 8, 1973 Conrado Bunag Jr. brought Zenaida Cirilo to a motel or hotel where they had sexual intercourse and later that evening he brought Zenaida to the house of his grandmothers house where they lived together as husband and wife for 21 days until Sept. 29, 1973. They filed their application for marriage license with the Local Civil Registral of Bacoor, Cavite. However, after a few days, Conrado filed an affidavit withdrawing his application for a marriage license. Plaintiffs Claim Conrado Bunag Jr. abducted her in the vicinity of San Juan de Dios Hospital in Pasay City and brought her to a motel where she was raped. Afterwhich he said that he would not let her go unless they get married, as he intended to marry her , so much so that she promised not to make any scandal and to marry him. They went to his gradmothers house

2.

and lived together as husband and wife for 21 days until Bunag Jr. left and never returned which humiliated Zenaida and compelled her to go back to her parents. Respondents Comment Conrado Bunag Jr.and Zenaida Cirilo had earlier made plans to elope and get married (same as first set of facts) . And that the reason why Conrado broke off their plan to get married was their bitter disagreements over money and Zenaidas threats to his life. - The Cirilos filed a complaint for damages against Conrado Bunag Jr. and his father Conrado Bunag Sr. (Zenaidas uncle claims that Bunag Sr. assured them that the couple were to be married). The Trial Court ordered Bunag Jr. to pay damages (80K-moral damages,20Kexemplary damages, 20k-temperate damages and 10k attorneys fees) Bunag Sr. was absolved from any and all liability.CA affirmed in toto - Bunag Jr contends that both the trial court awarded the damages on the basis of a finding that he is guilty of forcible abduction with rape,despite the prior dismissal of the complaint therefore filed by Zenaida with the Pasay City Fiscals Office. ISSUE WON the Fiscals dismissal of the complaint for forcible abduction with rape extinguished the civil liability of Conrado Bunag Jr HELD NO - The dismissal did not in any way affect the right of Zenaida Cirilo to institute a civil action arising from the offense.

- Extinction of the penal action does not carry with it the extinction of civil liability unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil case might arise did not exist. Reasoning -Generally, every person criminally liable is also civilly liable. Criminal Liability will give rise to civil liability ex delicto only if the same felonious act or omission results in damage or injury to another and is the direct and proximate cause thereof. -The two proceedings involved are not between the same parties (the criminal action is between the State and the defendant and the civil case is between the offended party and the defendant). Also, there are different rules as to the competency of witnesses and the quantum of evidence in criminal and civil proceedings.(criminal action proof beyond reasonable doubt; civil action preponderance of evidence) - In this case the dismissal of the complaint for forcible abduction with rape was by mere resolution of the fiscal at the preliminary investigation stage. There is no declaration in a final judgment that the fact from which the civil case might arise did not exist. Gasheem vs ca Article 21 of the Civil Code This is an appeal by certiorari. On October 27, 1987, without the assistance of counsel, private respondent filed with the aforesaid trial court a complaint for damages against petitioner for the alleged violation of their agreement to get married. She alleges in said complaint that she is 20 years old, single, Filipino and a pretty lass of good moral character and reputation duly respected in her country; other petitioner, on the other hand, is an Iranian citizen residing at Lozano Apartments, Guilig, Dagupan City, and is an exchange student, before August 20, 1987 the latter courted and proposed to marry her, she accepted

his love on the condition that they get married; they therefore agreed to get married. The petitioner forced her to live with him in the Lozano apartments. She was a virgin at that time; after a week before the filing of complaint, petitioners attitude towards her started to change. He maltreated and threatened to kill her; as a result of the complaint. Petitioner repudiated the marriage agreement and asked her not to live with him anymore and that the petitioner is already married to someone in Bacolod City. Private respondent then prayed for judgment ordering petitioner to pay her damages. On the other hand, petitioner claimed that he never proposed marriage to or agreed to be married with the private respondent and denied all allegations against him. After trial on the merits, the lower court ordered petitioner to pay the private respondent damages. ISSUE: Whether or not Article 21 of the Civil Code applies to the case at bar. HELD: The existing rule is that a breach of promise to marry per se is not an actionable wrong. Notwithstanding, Article 21, which is designed to expand the concepts of torts and quasi-delicts in this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically enumerate and punish in the statute books. Article 2176 of the Civil Code, which defines quasi-delicts thus: Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. In the light of the above laudable purpose of Article 21, the court held that where a mans promise to marry in fact the proximate cause of the acceptance of his love by a woman and his representation to fulfill that promise thereafter becomes the proximate cause of the giving of herself unto him in sexual congress, proof that he had, in reality, no intention of marrying her and that the promise was only subtle scheme or deceptive device to entice or inveigle her to accept him and obtain her consent to sexual act could justify the award of damages pursuant to Article 21 not because of such breach of promise of marriage but because of the fraud and deceit behind it, and the willful injury

to her honor and reputation which followed thereafter. It is essential however, that such injury should have been committed in a manner contrary to morals, good customs, or public policy.

SERRANO V. CA

196 SCRA 107

FACTS: Serrano bought some jewelry from Ribaya. Due to need of finances, she decided to have the jewelry pawned. She instructed her secretary to do so for her, which the secretary did but absconded after receiving the proceeds. It is to be noted that the pawnshop ticket indicated that the jewelry was redeemable by presentation by the bearer. Afterwards, there was a lead on where the jewelry was pawned. An investigation was done to verify the suspicion. The jewelry was to be sold in a public auction then. The petitioner and police authorities informed the pawnshop owner not to sell the jewelry as she was the rightful owner thereof. Despite of this however, the jewelry was redeemed by a Tomasa de Leon who presented the pawnshop ticket.

HELD: Having been informed by the petitioner and the police that jewelry pawned to it was either stolen or involved in an embezzlement of the proceeds of the pledge, pawnbroker became duty bound to hold the things pledged and to give notice to the petitioner and authorities of any effort to redeem them. Such a duty was imposed by Article 21 of the CC. The circumstance that the pawn ticket stated that the pawn was redeemable by the bearer,

didnt dissolve this duty. The pawn ticket wasnt a negotiable instrument under the NIL, nor was it a negotiable document of title under Article 1507 of the CC. Garcia vs ca

DE 37 SCRA 160 FACTS:

GARCIA

V.

CA

Guevarra was the owner of a ladys diamond ring with white gold mounting, solitaire 2-karat diamond as well as 4 brills. It was stolen from her house. On a relevant date, while she was talking to Garcia, an owner of a restaurant, she recognized the ring on the latters finger and asked how she acquired the same. Garcia averred that she bought it from her comadre. Guevarra made Garcia know that the ring was stolen from her place days before. It was ascertained the ring was indeed Guevarras but despite written demands, Garcia refused to return the ring. HELD: One who has lost or has been unlawfully deprived of a movable may recover the same from the person in possession of the same and the only defense the latter may have is if he has acquired it in good faith at a public sale in which case the owner cannot obtain its return without reimbursing the price paid therefore. Guevarra who was unlawfully deprived of the ring was entitled to recover it from de Garcia who was found in possession of the same. The only exception provided by law is when the possessor acquired the property through a public sale, in which case, the owner cannot recover without reimbursement.