ABS-CBN Broadcasting Corporation vs.

CA
301 SCRA 572 Business Organization Corporation Law Delegation of
Corporate Powers Moral Damages
In 1992, ABS-CBN Broadcasting Corporation, through its vice president Charo
Santos-Concio, requested Viva Production, Inc. to allow ABS-CBN to air at least 14
films produced by Viva. Pursuant to this request, a meeting was held between
Vivas representative (Vicente Del Rosario) and ABS-CBNs Eugenio Lopez
(General Manager) and Santos-Concio was held on April 2, 1992. During the
meeting Del Rosario proposed a film package which will allow ABS-CBN to air 104
Viva films for P60 million. Later, Santos-Concio, in a letter to Del Rosario, proposed
a counterproposal of 53 films (including the 14 films initially requested) for P35
million. Del Rosario presented the counter offer to Vivas Board of Directors but
the Board rejected the counter offer. Several negotiations were subsequently made
but on April 29, 1992, Viva made an agreement with Republic Broadcasting
Corporation (referred to as RBS or GMA 7) which gave exclusive rights to RBS to
air 104 Viva films including the 14 films initially requested by ABS-CBN.
ABS-CBN now filed a complaint for specific performance against Viva as it alleged
that there is already a perfected contract between Viva and ABS-CBN in the April
2, 1992 meeting. Lopez testified that Del Rosario agreed to the counterproposal
and he (Lopez) even put the agreement in a napkin which was signed and given to
Del Rosario. ABS-CBN also filed an injunction against RBS to enjoin the latter from
airing the films. The injunction was granted. RBS now filed a countersuit with a
prayer for moral damages as it claimed that its reputation was debased when they
failed to air the shows that they promised to their viewers. RBS relied on the ruling
in People vsManero and Mambulao Lumber vsPNB which states that a corporation
may recover moral damages if it has a good reputation that is debased, resulting
in social humiliation. The trial court ruled in favor of Viva and RBS. The Court of
Appeals affirmed the trial court.
ISSUE:
1.
Whether or not a contract was perfected in the April 2, 1992 meeting
between the representatives of the two corporations.
2.
Whether or not a corporation, like RBS, is entitled to an award of moral
damages upon grounds of debased reputation.
HELD:
1. No. There is no proof that a contract was perfected in the said meeting. Lopez
testimony about the contract being written in a napkin is not corroborated because
the napkin was never produced in court. Further, there is no meeting of the minds
because Del Rosarios offer was of 104 films for P60 million was not accepted. And
that the alleged counter-offer made by Lopez on the same day was not also

accepted because theres no proof of such. The counter offer can only be deemed
to have been made days after the April 2 meeting when Santos-Concio sent a letter
to Del Rosario containing the counter-offer. Regardless, there was no showing that
Del Rosario accepted. But even if he did accept, such acceptance will not bloom
into a perfected contract because Del Rosario has no authority to do so.
As a rule, corporate powers, such as the power; to enter into contracts; are
exercised by the Board of Directors. But this power may be delegated to a
corporate committee, a corporate officer or corporate manager. Such a delegation
must be clear and specific. In the case at bar, there was no such delegation to Del
Rosario. The fact that he has to present the counteroffer to the Board of Directors
of Viva is proof that the contract must be accepted first by the Vivas Board.
Hence, even if Del Rosario accepted the counter-offer, it did not result to a contract
because it will not bind Viva sans authorization.
2. No. The award of moral damages cannot be granted in favor of a corporation
because, being an artificial person and having existence only in legal
contemplation, it has no feelings, no emotions, no senses, It cannot, therefore,
experience physical suffering and mental anguish, which call be experienced only
by one having a nervous system. No moral damages can be awarded to a juridical
person. The statement in the case of People vs. Manero and Mambulao Lumber vs.
PNB is a mere obiter dictum hence it is not binding as a jurisprudence.