A.

Abuse of Rights

[ G.R. No. 81262, August 25, 1989 ]

GLOBE MACKAY CABLE AND RADIO CORP., AND HERBERT C. HENDRY,

PETITIONERS, VS. THE HONORABLE COURT OF APPEALS AND
RESTITUTO M. TOBIAS, RESPONDENTS.

DECISION

CORTES, J.:

Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay Cable and
Radio Corporation (GLOBE MACKAY) in a dual capacity as a purchasing agent and
administrative assistant to the engineering operations manager. In 1972, GLOBE MACKAY
discovered fictitious purchases and other fraudulent transactions for which it lost several
thousands of pesos.

According to private respondent it was he who actually discovered the anomalies and reported
them on November 10, 1972 to his immediate superior Eduardo T. Ferraren and to petitioner
Herbert C. Hendry who was then the Executive Vice-President and General Manager of GLOBE
MACKAY.

On November 11, 1972, one day after private respondent Tobias made the report, petitioner
Hendry confronted him by stating that he was the number one suspect, and ordered him to take
a one week forced leave, not to communicate with the office, to leave his table drawers open,
and to leave the office keys.

On November 20, 1972, when private respondent Tobias returned to work after the forced
leave, petitioner Hendry went up to him and called him a “crook” and a “swindler.” Tobias was
then ordered to take a lie detector test. He was also instructed to submit specimen of his
handwriting, signature, and initials for examination by the police investigators to determine his
complicity in the anomalies.
On December 6, 1972, the Manila police investigators submitted a laboratory crime report (Exh.
“A”) clearing private respondent of participation in the anomalies.

Not satisfied with the police report, petitioners hired a private investigator, retired Col. Jose G.
Fernandez, who on December 10, 1972, submitted a report (Exh. “2”) finding Tobias guilty. This
report however expressly stated that further investigation was still to be conducted.

Nevertheless, on December 12, 1972, petitioner Hendry issued a memorandum suspending

Tobias from work preparatory to the filing of criminal charges against him.

On December 19, 1972, Lt. Dioscoro V. Tagle, Metro Manila Police Chief Document Examiner,
after investigating other documents pertaining to the alleged anomalous transactions, submitted
a second laboratory crime report (Exh. “B”) reiterating his previous finding that the handwritings,
signatures, and initials appearing in the checks and other documents involved in the fraudulent
transactions were not those of Tobias. The lie detector tests conducted on Tobias also yielded
negative results.

Notwithstanding the two police reports exculpating Tobias from the anomalies and the fact that
the report of the private investigator, was, by its own terms, not yet complete, petitioners filed
with the City Fiscal of Manila a complaint for estafa through falsification of commercial
documents, later amended to just estafa. Subsequently, five other criminal complaints were filed
against Tobias, four of which were for estafa through falsification of commercial document while
the fifth was for violation of Article 290 of the Revised Penal Code (Discovering Secrets Through
Seizure of Correspondence). Two of these complaints were refiled with the Judge Advocate
General’s Office, which however, remanded them to the fiscal’s office. All of the six criminal
complaints were dismissed by the fiscal. Petitioners appealed four of the fiscal’s resolutions
dismissing the criminal complaints with the Secretary of Justice, who, however, affirmed their
dismissal.

In the meantime, on January 17, 1973, Tobias received a notice (Exh. “F”) from petitioners that
his employment has been terminated effective December 13, 1972. Whereupon, Tobias filed a
complaint for illegal dismissal. The labor arbiter dismissed the complaint. On appeal, the
National Labor Relations Commission (NLRC) reversed the labor arbiter’s decision. However,
the Secretary of Labor, acting on petitioners’ appeal from the NLRC ruling, reinstated the labor
arbiter’s decision. Tobias appealed the Secretary of Labor’s order with the Office of the
President. During the pendency of the appeal with said office, petitioners and private
respondent Tobias entered into a compromise agreement regarding the latter’s complaint for
illegal dismissal.

Unemployed, Tobias sought employment with the Republic Telephone Company (RETELCO).
However, petitioner Hendry, without being asked by RETELCO, wrote a letter to the latter
stating that Tobias was dismissed by GLOBE MACKAY due to dishonesty.
Private respondent Tobias filed a civil case for damages anchored on alleged unlawful,
malicious, oppressive, and abusive acts of petitioners. Petitioner Hendry, claiming illness, did
not testify during the hearings. The Regional Trial Court (RTC) of Manila, Branch IX, through
Judge Manuel T. Reyes rendered judgment in favor of private respondent by ordering
petitioners to pay him eighty thousand pesos (P80,000.00) as actual damages, two hundred
thousand pesos (P200,000.00) as moral damages, twenty thousand pesos (P20,000.00) as
exemplary damages, thirty thousand pesos (P30,000.00) as attorney’s fees, and costs.
Petitioners appealed the RTC decision to the Court of Appeals. On the other hand, Tobias
appealed as to the amount of damages. However, the Court of Appeals, in a decision dated
August 31, 1987, [*]​ affirmed the RTC decision ​in toto.​ Petitioners’ motion for reconsideration
having been denied, the instant petition for review on ​certiorari​ was filed.

The main issue in this case is whether or not petitioners are liable for damages to private
respondent.

Petitioners contend that they could not be made liable for damages in the lawful exercise of their
right to dismiss private respondent.

On the other hand, private respondent contends that because of petitioners’ abusive manner in
dismissing him as well as for the inhuman treatment he got from them, the petitioners must
indemnify him for the damage that he had suffered.

One of the more notable innovations of the New Civil Code is the codification of “some basic
principles that are to be observed for the rightful relationship between human beings and for the
stability of the social order.” [REPORT ON THE CODE COMMISSION ON THE PROPOSED
CIVIL CODE OF THE PHILIPPINES, p. 39]. The framers of the Code, seeking to remedy the
defect of the old Code which merely stated the effects of the law, but failed to draw out its spirit,
incorporated certain fundamental precepts which were “designed to indicate certain norms that
spring from the fountain of good conscience” and which were also meant to serve as “guides for
human conduct [that] should run as golden threads through society, to the end that law may
approach its supreme ideal, which is the sway and dominance of justice” (Id.) Foremost among
these principles is that pronounced in Article 19 which provides:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith.

This article, known to contain what is commonly referred to as the principle of abuse of rights,
sets certain standards which must be observed not only in the exercise of one’s rights but also
in the performance of one’s duties. These standards are the following: to act with justice; to give
everyone his due; and to observe honesty and good faith. The law, therefore, recognizes a
primordial limitation on all rights; that in their exercise, the norms of human conduct set forth in
Article 19 must be observed. A right, though by itself legal because recognized or granted by
law as such, may nevertheless become the source of some illegality. When a right is exercised
in a manner which does not conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for which the wrongdoer must be held
responsible. But while Article 19 lays down a rule of conduct for the government of human
relations and for the maintenance of social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article 21 would be proper.

Article 20, which pertains to damage arising from a violation of law, provides that:

Art. 20. Every person who contrary to law, willfully or negligently causes damage to another,
shall indemnify the latter for the same.

However, in the case at bar, petitioners claim that they did not violate any provision of law since
they were merely exercising their legal right to dismiss private respondent. This does not,
however, leave private respondent with no relief because Article 21 of the Civil Code provides
that:

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 the damage.

This article, 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”
[​Id.]​ 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” [​Id., at p. 40; See
also ​PNB v. CA,​ G.R. No. L-27155, May 18, 1978, 83 SCRA 237, 247].

In determining whether or not the principle of abuse of rights may be invoked, there is no rigid
test which can be applied. While the Court has not hesitated to apply Article 19 whether the
legal and factual circumstances called for its application [See for e.g., ​Velayo v. Shell Co. of the
Phil., Ltd., 100 Phil. 186 (1956); ​PNB v. CA, supra; Grand Union Supermarket, Inc. v. Espino,
​ .R. No. L-48250, December 28, 1979, 94 SCRA 953; ​PAL v. CA​, G.R. No. L-46558, July
Jr., G
31, 1981, 106 SCRA 391; ​United General Industries, Inc. v. Paler, G.R. No. L-30205, March 15,
1982, 112 SCRA 404; Rubio v. CA, G.R. No. 50911, August 21, 1987, 153 SCRA 183] the
question of whether or not the principle of abuse of rights has been violated resulting in
damages under Article 20 or Article 21 or other applicable provision of law, depends on the
circumstances of each case. And in the instant case, the Court, after examining the record and
considering certain significant circumstances, finds that petitioners have indeed abused the right
that they invoke, causing damage to private respondent and for which the latter must now be
indemnified.

The trial court made a finding that notwithstanding the fact that it was private respondent Tobias
who reported the possible existence of anomalous transactions, petitioner Hendry “showed
belligerence and told plaintiff (private respondent herein) that he was the number one suspect
and to take a one week vacation leave, not to communicate with the office, to leave his table
drawers open, and to leave his keys to said defendant (petitioner Hendry)” [RTC Decision, p. 2;
Rollo, p. 232]. This, petitioners, do not dispute. But regardless of whether or not it was private
respondent Tobias who reported the anomalies to petitioners, the latter’s reaction towards the
former upon uncovering the anomalies was less than civil. An employer who harbors suspicions
that an employee has committed dishonesty might be justified in taking the appropriate action
such as ordering an investigation and directing the employee to go on a leave. Firmness and
the resolve to uncover the truth would also be expected from such employer. But the
high-handed treatment accorded Tobias by petitioners was certainly uncalled for. And this
reprehensible attitude of petitioners was to continue when private respondent returned to work
on November 20, 1972 after his one week forced leave. Upon returning for work, Tobias was
confronted by Hendry who said “Tobby, you are the crook and swindler in this company.”
Considering that the first report made by the police investigators was submitted only on
December 10, 1972 [See Exh. “A”] the statement made by petitioner Hendry was baseless. The
imputation of guilt without basis and the pattern of harassment during the investigations of
Tobias transgress the standards of human conduct set forth in Article 19 of the Civil Coe. The
Court has already ruled that the right of the employer to dismiss an employee should not be
confused with the manner in which the right is exercised and the effects flowing therefrom. If the
dismissal is done abusively, then the employer is liable for damages to the employee [​Quisaba
v. Sta. Ines-Melale Veneer and Plywood Inc., G.R. No. L-38088, August 30, 1974, 58 SCRA
771; See also ​Philippine Refining Co., Inc. v. Garcia, G.R. No. L-21871, September 27, 1966,
18 SCRA 107]. Under the circumstances of the instant case, the petitioners clearly failed to
exercise in a legitimate manner their right to dismiss Tobias, giving the latter the right to recover
damages under Article 19 in relation to Article 21 of the Civil Code.

But petitioners were not content with just dismissing Tobias. Several other tortious acts were
committed by petitioners against Tobias after the latter’s termination from work. Towards the
latter part of January, 1973, after the filing of the first of six criminal complaints against Tobias,
the latter talked to Hendry to protest the actions taken against him. In response, Hendry cut
short Tobias’ protestations by telling him to just confess or else the company would file a
hundred more cases against him until he landed in jail. Hendry added that, “You Filipinos cannot
be trusted.” The threat unmasked petitioner’s bad faith in the various actions taken against
Tobias. On the other hand, the scornful remark about Filipinos as well as Hendry’s earlier
statements about Tobias being a “crook” and “swindler” are clear violations of Tobias’ personal
dignity [See Article 26, Civil Code].

The next tortious act committed by petitioners was the writing of a letter to RETELCO sometime
in October 1974, stating that Tobias had been dismissed by GLOBE MACKAY due to
dishonesty. Because of the letter, Tobias failed to gain employment with RETELCO and as a
result of which, Tobias remained unemployed for a longer period of time. For this further
damage suffered by Tobias, petitioners must likewise be held liable for damages consistent with
Article 2176 of the Civil Code. Petitioners, however, contend that they have a “moral, if not legal,
duty to forewarn other employers of the kind of employee the plaintiff (private respondent
herein) was.” [Petition, p. 14; Rollo, p. 15]. Petitioners further claim that “it is the accepted moral
and societal obligation of every man to advise or warn his fellowmen of any threat or danger to
the latter’s life, honor or property. And this includes warning one’s brethren of the possible
dangers involved in dealing with, or accepting into confidence, a man whose honesty and
integrity is suspect” [Id.]. These arguments, rather than justify petitioners’ act, reveal a seeming
obsession to prevent Tobias from getting a job, even after almost two years from the time
Tobias was dismissed.

Finally, there is the matter of the filing by petitioners of six criminal complaints against Tobias.
Petitioners contend that there is no case against them for malicious prosecution and that they
cannot be “penalized for exercising their right and prerogative of seeking justice by filing criminal
complaints against an employee who was their principal suspect in the commission of forgeries
and in the perpetration of anomalous transactions which defrauded them of substantial sums of
money” [Petition, p. 10, ​Rollo,​ p. 11].

While sound principles of justice and public policy dictate that persons shall have free resort to
the courts for redress of wrongs and vindication of their rights [​Buenaventura v. Sto. Domingo,
103 Phil. 239 (1958)], the right to institute criminal prosecutions can not be exercised
maliciously and in bad faith [​Ventura v. Bernabe, G.R. No. L-26760, April 30, 1971, 38 SCRA
587]. Hence, in ​Yutuk v. Manila Electric Co., G.R. No. L-13016, May 31, 1961, 2 SCRA 337, the
Court held that the right to file criminal complaints should not be used as a weapon to force an
alleged debtor to pay an indebtedness. To do so would be a clear perversion of the function of
the criminal processes and of the courts of justice. And in Hawpia v. CA, G.R. No. L-20047,
June 30, 1967, 20 SCRA 536, the Court upheld the judgment against the petitioner for actual
and moral damages and attorney’s fees after making a finding that petitioner, with persistence,
filed at least six criminal complaints against respondent, all of which were dismissed.

To constitute malicious prosecution, there must be proof that the prosecution was prompted by
a design to vex and humiliate a person and that it was initiated deliberately by the defendant
knowing that the charges were false and groundless [​Manila Gas Corporation v. CA, G.R. No.
L-44190, October 30, 1980, 100 SCRA 602]. Concededly, the filing of a suit, by itself, does not
render a person liable for malicious prosecution [​Inhelder Corporation v. CA, G.R. No. 52358,
May 30, 1983, 122 SCRA 576]. The mere dismissal by the fiscal of the criminal complaint is not
a ground for an award of damages for malicious prosecution if there is no competent evidence
to show that the complainant had acted in bad faith [​Sison v. David, G.R. No. L-11268, January
28, 1961, 1 SCRA 60].

In the instant case, however, the trial court made a finding that petitioners acted in bad faith in
filing the criminal complaints against Tobias, observing that:

xxx
Defendants (petitioners herein) filed with the Fiscal’s Office of Manila a total of six (6) criminal
cases, five (5) of which were for estafa thru falsification of commercial document and one for
violation of Art. 290 of the Revised Penal Code “discovering secrets thru seizure of
correspondence,” and all were dismissed for insufficiency or lack of evidence.” The dismissal of
four (4) of the cases was appealed to the Ministry of Justice, but said Ministry invariably
sustained the dismissal of the cases. As above adverted to, two of these cases were refiled with
the Judge Advocate General’s Office of the Armed Forces of the Philippines to railroad plaintiff’s
arrest and detention in the military stockade, but this was frustrated by a presidential decree
transferring criminal cases involving civilians to the civil courts.

xxx

To be sure, when despite the two (2) police reports embodying the findings of Lt. Dioscoro
Tagle, Chief Document Examiner of the Manila Police Department, clearing plaintiff of
participation or involvement in the fraudulent transactions complained of, despite the negative
results of the lie detector tests which defendants compelled plaintiff to undergo, and although
the police investigation was “still under follow-up and a supplementary report will be submitted
after all the evidence has been gathered,” defendants hastily filed six (6) criminal cases with the
city Fiscal’s Office of Manila, five (5) for estafa thru falsification of commercial document and
one (1) for violation of Art. 290 of the Revised Penal Code, so much so that as was to be
expected, all six (6) cases were dismissed, with one of the investigating fiscals, Asst. Fiscal de
Guia, commenting in one case that, “Indeed, the haphazard way this case was investigated is
evident. Evident likewise is the flurry and haste in the filing of this case against respondent
Tobias,” there can be no mistaking that defendants would not but be motivated by malicious and
unlawful intent to harass, oppress, and cause damage to plaintiff.

xxx

[RTC Decision, pp. 5-6; ​Rollo,​ pp. 235-236].

In addition to the observations made by the trial court, the Court finds it significant that the
criminal complaints were filed during the pendency of the illegal dismissal case filed by Tobias
against petitioners. This explains the haste in which the complaints were filed, which the trial
court earlier noted. But petitioners, to prove their good faith, point to the fact that only six
complaints were filed against Tobias when they could have allegedly filed one hundred cases,
considering the number of anomalous transactions committed against GLOBE MACKAY.
However, petitioners’ good faith is belied by the threat made by Hendry after the filing of the first
complaint that one hundred more cases would be filed against Tobias. In effect, the possible
filing of one hundred more cases was made to hang like the sword of Damocles over the head
of Tobias. In fine, considering the haste in which the criminal complaints were filed, the fact that
they were filed during the pendency of the illegal dismissal case against petitioners, the threat
made by Hendry, the fact that the cases were filed notwithstanding the two police reports
exculpating Tobias from involvement in the anomalies committed against GLOBE MACKAY,
coupled by the eventual dismissal of all the cases, the Court is led into no other conclusion than
that petitioners were motivated by malicious intent in filing the six criminal complaints against
Tobias.

Petitioners next contend that the award of damages was excessive. In the complaint filed
against petitioners, Tobias prayed for the following: one hundred thousand pesos (P100,000.00)
as actual damages; fifty thousand pesos (P50,000.00) as exemplary damages; eight hundred
thousand pesos (P800,000.00) as moral damages; fifty thousand pesos (P50,000.00) as
attorney’s fees; and costs. The trial court, after making a computation of the damages incurred
by Tobias [See RTC Decision, pp. 7-8; ​Rollo, pp. 154-155], awarded him the following: eighty
thousand pesos (P80,000.00) as actual damages; two hundred thousand pesos (P200,000.00)
as moral damages; twenty thousand pesos (P20,000.00) as exemplary damages; thirty
thousand pesos (P30,000.00) as attorney’s fees; and, costs. It must be underscored that
petitioners have been guilty of committing several actionable tortuous acts, i.e., the abusive
manner in which they dismissed Tobias from work including the baseless imputation of guilt and
the harassment during the investigations; the defamatory language heaped on Tobias as well as
the scornful remark on Filipinos; the poison letter sent to RETELCO which resulted in Tobias’
loss of possible employment; and, the malicious filing of the criminal complaints. Considering
the extent of the damage wrought on Tobias, the Court finds that, contrary to petitioners’
contention, the amount of damages awarded to Tobias was reasonable under the
circumstances.

Yet, petitioners still insist that the award of damages was improper, invoking the principle of
damnum absque injuria​. It is argued that “[t]he only probable actual damage that plaintiff (private
respondent herein) could have suffered was a direct result of his having been dismissed from
his employment, which was a valid and legal act of the defendants-appellants (petitioners
herein).” [Petition, p. 17; Rollo, p. 18].

According to the principle of ​damnum absque injuria, damage or loss which does not constitute
a violation of a legal right or amount to a legal wrong is not actionable [​Escano v. CA, G.R. No.
L-47207, September 25, 1980, 100 SCRA 197; See also ​Gilchrist v. Cuddy, 29 Phil. 542 (1915);
The Board of Liquidators v. Kalaw, G.R. No. L-18805, August 14, 1967, 20 SCRA 987]. This
principle finds no application in this case. It bears repeating that even granting that petitioners
might have had the right to dismiss Tobias from work, the abusive manner in which that right
was exercised amounted to a legal wrong for which petitioners must now be held liable.
Moreover, the damage incurred by Tobias was not only in connection with the abusive manner
in which he was dismissed but was also the result of several other quasi-delictual acts
committed by petitioners.

Petitioners next question the award of moral damages. However, the Court has already ruled in
Wassmer v. Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA 648, 653, that “[p]er
express provision of Article 2219 (10) of the New Civil Code, moral damages are recoverable in
the cases mentioned in Article 21 of said Code.” Hence, the Court of Appeals committed no
error in awarding moral damages to Tobias.

Lastly, the award of exemplary damages is impugned by petitioners. Although Article 2231 of
the Civil Code provides that “[i]n quasi-delicts, exemplary damages may be granted if the
defendant acted with gross negligence,” the Court, in ​Zulueta v. Pan American World Airways,
Inc., G.R. No. L-28589, January 8, 1973, 49 SCRA 1, ruled that if gross negligence warrants the
award of exemplary damages, with more reason is its imposition justified when the act
performed is deliberate, malicious and tainted with bad faith. As in the Zulueta case, the nature
of the wrongful acts shown to have been committed by petitioners against Tobias is sufficient
basis for the award of exemplary damages to the latter.

WHEREFORE, the petition is hereby ​DENIED and the decision of the Court of Appeals in
CA-G.R. CV No. 09055 is ​AFFIRMED.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr.,​ and ​Bidin, JJ.,​ concur.

Feliciano, J.,​ no part, former firm acted as counsel for petitioner corp. in other cases.

[*]
Penned by Justice Jorge R. Coquia and concurred in by Justice Josue N. Bellosillo and
Justice Venancio D. Aldecoa, Jr.

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[ G.R. No. 140420, February 15, 2001 ]

SERGIO AMONOY, PETITIONER, VS. SPOUSES JOSE GUTIERREZ AND

ANGELA FORNILDA, RESPONDENTS.

DECISION

PANGANIBAN, J.:

Damnum absque injuria. Under this principle, the legitimate exercise of a person's rights, even if
it causes loss to another, does not automatically result in an actionable injury. The law does not
prescribe a remedy for the loss. This principle does not, however, apply when there is an abuse
of a person's right, or when the exercise of this right is suspended or extinguished pursuant to a
court order. Indeed, in the availment of one's rights, one must act with justice, give others their
due, and observe honesty and good faith.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the April 21,
1999 Decision​[1] of the Court of Appeals (CA) in CA-GR CV No. 41451, which set aside the
judgment​[2] of the Regional Trial Court (RTC) of Tanay, Rizal. The RTC had earlier dismissed
the Complaint for damages filed by herein respondents against petitioner. The dispositive
portion of the challenged CA Decision reads as follows:
"WHEREFORE, the appealed Decision is SET ASIDE, and in its stead judgment is rendered
ordering the defendant-appellee Sergio Amonoy to pay the plaintiffs-appellants Bruno and
Bernardina Gutierrez as actual damages the sum of [t]wo [h]undred [f]ifty [t]housand [p]esos
(P250,000.00)."​[3]
Likewise assailed is the October 19, 1999 CA Resolution,​[4] which denied the Motion for
Reconsideration.

The Facts

The appellate court narrated the factual antecedents of this case as follows:
"This case had its roots in Special Proceedings No. 3103 of Branch I of the CFI of Pasig, Rizal,
for the settlement of the estate of the deceased Julio Cantolos, involving six (6) parcels of land
situated in Tanay, Rizal. Amonoy was the counsel of therein Francisca Catolos, Agnes Catolos,
Asuncion Pasamba and Alfonso Formilda. On 12 January 1965, the Project of Partition
submitted was approved and x x x two (2) of the said lots were adjudicated to Asuncion
Pasamba and Alfonso Formilda. The attorney's fees charged by Amonoy was P27,600.00 and
on 20 January 1965 Asuncion Pasamba and Alfonso Formilda executed a deed of real estate
mortgage on the said two (2) lots adjudicated to them, in favor of Amonoy to secure the
payment of his attorney's fees. But it was only on 6 August 1969 after the taxes had been paid,
the claims settled and the properties adjudicated, that the estate was declared closed and
terminated.

"Asuncion Pasamba died on 24 February 1969 while Alfonso Fornilda passed away on 2 July
1969. Among the heirs of the latter was his daughter, plaintiff-appellant Angela Gutierrez.

"Because his attorney's fees thus secured by the two lots were not paid, on 21 January 1970
Amonoy filed for their foreclosure in Civil Case No. 12726 entitled ​Sergio Amonoy vs. Heirs of
Asuncion Pasamba and Heirs of Alfonso Fornilda before the CFI of Pasig, Rizal, and this was
assigned to Branch VIII. The heirs opposed, contending that the attorney's fees charged [were]
unconscionable and that the agreed sum was only P11,695.92. But on 28 September 1972
judgment was rendered in favor of Amonoy requiring the heirs to pay within 90 days the
P27,600.00 secured by the mortgage, P11,880.00 as value of the harvests, and P9,645.00 as
another round of attorney's fees. Failing in that, the two (2) lots would be sold at public auction.

"They failed to pay. On 6 February 1973, the said lots were foreclosed and on 23 March 1973
the auction sale was held where Amonoy was the highest bidder at P23,760.00. On 2 May 1973
his bid was judicially confirmed. A deficiency was claimed and to satisfy it another execution
sale was conducted, and again the highest bidder was Amonoy at P12,137.50.

"Included in those sold was the lot on which the Gutierrez spouses had their house.

"More than a year after the Decision in Civil Case No. 12726 was rendered, the said decedent's
heirs filed on 19 December 1973 before the CFI of Pasig, Rizal[,] Civil Case No. 18731 entitled
Maria Penano, et al vs. Sergio Amonoy, et al,​ a suit for the annulment thereof. The case was
dismissed by the CFI on 7 November 1977, and this was affirmed by the Court of Appeals on 22
July 1981.

"Thereafter, the CFI on 25 July 1985 issued a Writ of Possession and pursuant to which a notice
to vacate was made on 26 August 1985. On Amonoy's motion of 24 April 1986, the Orders of 25
April 1986 and 6 May 1986 were issued for the demolition of structures in the said lots, including
the house of the Gutierrez spouses.

"On 27 September 1985 the petition entitled ​David Fornilda, et al vs Branch 164 RTC IVth
Pasig, Deputy Sheriff Joaquin Antonil and Atty. Sergio Amonoy,​ G.R. No. L-72306, was filed
before the Supreme Court. Among the petitioners was the plaintiff-appellant Angela Gutierrez.
On a twin ​Musiyun ​(Mahigpit na Musiyon Para Papanagutin Kaugnay ng Paglalapastangan, and
Musiyung Makahingi ng Utos sa Pagpapapigil ng Pagpapagiba at Pananagutin sa
Paglalapastangan) with full titles as fanciful and elongated as their ​Petisyung ​(Petisyung
Makapagsuri Taglay and Pagpigil ng Utos), a temporary restraining order was granted on 2
June 1986 enjoining the demolition of the petitioners' houses.

"Then on 5 October 1988 a Decision was rendered in the said G.R. No. L-72306 disposing that:
"WHEREFORE, Certiorari is granted; the Order of respondent Trial Court, dated 25 July 1985,
granting a Writ of Possession, as well as its Orders, dated 25 April 1986 and 16 May 1986,
directing and authorizing respondent Sheriff to demolish the houses of petitioners Angela and
Leocadia Fornilda are hereby set aside, and the Temporary Restraining Order heretofore
issued, is made permanent. The six (6) parcels of land herein controverted are hereby ordered
returned to petitioners unless some of them have been conveyed to innocent third persons."​[5]
But by the time the Supreme Court promulgated the above-mentioned Decision, respondents'
house had already been destroyed, supposedly in accordance with a Writ of Demolition ordered
by the lower court.

Thus, a Complaint for damages in connection with the destruction of their house was filed by
respondents against petitioner before the RTC on December 15, 1989.

In its January 27, 1993 Decision, the RTC dismissed respondents' suit. On appeal, the CA set
aside the lower court's ruling and ordered petitioner to pay respondents P250,000 as actual
damages. Petitioner then filed a Motion for Reconsideration, which was also denied.

Hence, this recourse.​[6]

The Issue

In his Memorandum,​[7]​petitioner submits this lone issue for our consideration:

"Whether or not the Court of Appeals was correct in deciding that the petitioner [was] liable to
the respondents for damages"​[8]

The Court's Ruling

The Petition has no merit.

Main Issue:
Petitioner's Liability

Well-settled is the maxim that damage resulting from the legitimate exercise of a person's rights
is a loss without injury -- damnum absque injuria ​-- for which the law gives no remedy.​[9] In other
words, one who merely exercises one's rights does no actionable injury and cannot be held
liable for damages.

Petitioner invokes this legal precept in arguing that he is not liable for the demolition of
respondents' house. He maintains that he was merely acting in accordance with the Writ of
Demolition ordered by the RTC.

We reject this submission. ​Damnum absque injuria ​finds no application to this case.

True, petitioner commenced the demolition of respondents' house on May 30, 1986 under the
authority of a Writ of Demolition issued by the RTC. But the records show that a Temporary
Restraining Order (TRO), enjoining the demolition of respondents' house, was issued by the
Supreme Court on June 2, 1986. The CA also found, based on the Certificate of Service of the
Supreme Court process server, that a copy of the TRO was served on petitioner himself on
June 4, 1986.

Petitioner, however, did not heed the TRO of this Court. We agree with the CA that he
unlawfully pursued the demolition of respondents' house well until the middle of 1987. This is
clear from Respondent Angela Gutierrez's testimony. The appellate court quoted the following
pertinent portion thereof:​[10]
"Q. On May 30, 1986, were they able to destroy your house?

A. Not all, a certain portion only

xxxxxxxxx

Q. Was your house completely demolished?

A. No, sir.

Q. How about the following day?

A. It was completely demolished"

xxxxxxxxx
 Q. Until when[,] Mrs. Witness?

A. Until 1987.

Q. About what month of 1987?

A. Middle of the year.

Q. Can you tell the Honorable Court who completed the demolition?

A. The men of Fiscal Amonoy."​[11]

The foregoing disproves the claim of petitioner that the demolition, which allegedly commenced
only on May 30, 1986, was completed the following day. It likewise belies his allegation that the
demolitions had already ceased when he received notice of the TRO.

Although the acts of petitioner may have been legally justified at the outset, their continuation
after the issuance of the TRO amounted to an insidious abuse of his right. Indubitably, his
actions were tainted with bad faith. Had he not insisted on completing the demolition,
respondents would not have suffered the loss that engendered the suit before the RTC. Verily,
his acts constituted ​not only an abuse of a right, but an invalid exercise of a right that had been
suspended w ​ hen he received the TRO from this Court on June 4, 1986. By then, he was no
longer entitled to proceed with the demolition.

A commentator on this topic explains:

"The exercise of a right ends when the right disappears, and it disappears when it is abused,
especially to the prejudice of others. The mask of a right without the spirit of justice which gives
it life, is repugnant to the modern concept of social law. It cannot be said that a person
exercises a right when he unnecessarily prejudices another x x x. Over and above the specific
precepts of positive law are the supreme norms of justice x x x; and he who violates them
violates the law. For this reason, it is not permissible to abuse our rights to prejudice others."​[12]
Likewise, in ​Albenson Enterprises Corp. v. CA,[13] ​ the Court discussed the concept of abuse of
rights as follows:
"Article 19, known to contain what is commonly referred to as the principle of abuse of rights,
sets certain standards which may be observed not only in the exercise of one's rights but also in
the performance of one's duties. These standards are the following: to act with justice; to give
everyone his due; and to observe honesty and good faith. The law, therefore, recognizes the
primordial limitation on all rights: that in their exercise, the norms of human conduct set forth in
Article 19 must be observed. A right, though by itself legal because recognized or granted by
law as such, may nevertheless become the source of some illegality. When a right is exercised
in a manner which does not conform with norms enshrined in Article 19 and results in damage
to another, a legal wrong is thereby committed for which the wrongdoer must be held
responsible x x x."
Clearly then, the demolition of respondents' house by petitioner, despite his receipt of the TRO,
was ​not only an abuse but also an unlawful exercise of such right.​ In insisting on his alleged
right, he wantonly violated this Court's Order and wittingly caused the destruction of
respondents' house.

Obviously, petitioner cannot invoke ​damnum absque injuria,​ a principle premised on the valid
exercise of a right.​[14] Anything less or beyond such exercise will not give rise to the legal
protection that the principle accords. And when damage or prejudice to another is occasioned
thereby, liability cannot be obscured, much less abated.

In the ultimate analysis, petitioner's liability is premised on the obligation to repair or to make
whole the damage caused to another by reason of one's act or omission, whether done
intentionally or negligently and whether or not punishable by law.​[15]

WHEREFORE​, the Petition is ​DENIED and the appealed Decision ​AFFIRMED​. Costs against
petitioner.

SO ORDERED.

Melo, (Chairman), Vitug, Gonzaga-Reyes,​ and ​Sandoval-Gutierrez, JJ.,​ concur.

[1]
Rollo, pp. 34-44. The CA Decision was penned by Justice Roberto A. Barrios, with the
concurrence of Justices Godardo A. Jacinto (Division chairman) and Renato C. Dacudao.

[2]​
Rollo, pp. 83-87; written by Judge Gil P. Fernandez.

[3]​
Rollo, p. 41.

[4]​
Rollo, pp. 43-44.

[5]​
Rollo, pp. 35-37.

[6]
The case was deemed submitted for resolution on July 21, 2000, upon receipt by this Court of
respondents' Memorandum signed by Attys. Romeo B. Igot and Liberato F. Mojica. Filed earlier
was petitioner's Memorandum, signed by Attys. Gelacio C. Mamaril and Roberto B. Arca.

[7]​
Rollo, pp. 180-210.

[8]​
Ibid., p. 192. Upper case used in the original.
[9]
​Custodio v. Court of Appeals, 253 SCRA 483, February 9, 1996; ​China Banking Corporation
v. Court of Appeals, 231 SCRA 472, March 28, 1994; ​Saba v. Court of Appeals, 189 SCRA 50,
August 24, 1990; ​Ilocos Norte Electric Company v. Court of Appeals, 179 SCRA 5, November 6,
1989; ​Auyong Hian v. CTA,​ 59 SCRA 110, September 12, 1974.

[10]​
CA Decision, pp. 6-7; ​rollo,​ pp. 39-40.

[11]​
TSN, February 12, 1991, pp.14-15.

[12]​
Alicia Gonzales-Decano, ​Notes on Torts and Damages,​ p.97.

[13]​
217 SCRA 16, 24-25, January 11, 1993, per Bidin, ​J.

[14]​
Globe Mackay Cable and Radio Corp​. v​. Court of Appeals,​ 1
​ 76 SCRA 778, August 25, 1989.

[15]​
​Occena v. Icamina,​ 181 SCRA 328, January 22, 1990.

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[ G.R. No. 132344, February 17, 2000 ]

UNIVERSITY OF THE EAST, PETITIONER, VS. ROMEO A. JADER,

RESPONDENT.

DECISION

YNARES-SANTIAGO, J.:

May an educational institution be held liable for damages for misleading a student into believing
that the latter had satisfied all the requirements for graduation when such is not the case? This
is the issue in the instant petition for review premised on the following undisputed facts as
summarized by the trial court and adopted by the Court of Appeals (CA),​[1]​to wit:
"Plaintiff was enrolled in the defendants’ College of Law from 1984 up to 1988. In the first
semester of his last year (School year 1987-1988), he failed to take the regular final
examination in Practice Court I for which he was given an incomplete grade (Exhibits ‘2’, also
Exhibit ‘H’). He enrolled for the second semester as fourth year law student (Exhibit ‘A’) and on
February 1, 1988 he filed an application for the removal of the incomplete grade given him by
Professor Carlos Ortega (Exhibits ‘H-2’, also Exhibit ‘2’) which was approved by Dean
Celedonio Tiongson after payment of the required fee. He took the examination on March 28,
1988. On May 30, 1988, Professor Carlos Ortega submitted his grade. It was a grade of five (5).
(Exhibits ‘H-4’, also Exhibits ‘2-L’, ‘2-N’).

"In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate on
who among the fourth year students should be allowed to graduate. The plaintiff’s name
appeared in the Tentative List of Candidates for graduation for the Degree of Bachelor of Laws
(LL.B) as of Second Semester (1987-1988) with the following annotation:
"JADER ROMEO A.
Def. Conflict of Laws - x-1-87-88, Practice Court I - Inc., 1-87-88. C-1 to submit transcript with
S.O. (Exhibits ‘3’, ‘3-C-1’, ‘3-C-2’)."
"The 35​th Investitures & Commencement Ceremonies for the candidates of Bachelor of Laws
was scheduled on the 16th of April 1988 at 3:00 o’clock in the afternoon, and in the invitation for
that occasion the name of the plaintiff appeared as one of the candidates. (Exhibits ‘B’, ‘B-6’,
‘B-6-A’). At the foot of the list of the names of the candidates there appeared however the
following annotation:
‘This is a tentative list. Degrees will be conferred upon these candidates who satisfactorily
complete requirements as stated in the University Bulletin and as approved of the Department
of Education, Culture and Sports (Exhibit ‘B-7-A’).
"The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E., Recto
Campus, during the program of which he went up the stage when his name was called,
escorted by her (sic) mother and his eldest brother who assisted in placing the Hood, and his
Tassel was turned from left to right, and he was thereafter handed by Dean Celedonio a rolled
white sheet of paper symbolical of the Law Diploma. His relatives took pictures of the occasion
(Exhibits ‘C’ to ‘C-6’, ‘D-3’ to ‘D-11’).

"He tendered a blow-out that evening which was attended by neighbors, friends and relatives
who wished him good luck in the forthcoming bar examination. There were pictures taken too
during the blow-out (Exhibits ‘D’ to ‘D-1’).

"He thereafter prepared himself for the bar examination. He took a leave of absence without pay
from his job from April 20, 1988 to September 30, 1988 (Exhibit ‘G’) and enrolled at the pre-bar
review class in Far Eastern University (Exhibits ‘F’ to ‘F-2’). Having learned of the deficiency he
dropped his review class and was not able to take the bar examination."​[2]
Consequently, respondent sued petitioner for damages alleging that he suffered moral shock,
mental anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights
when he was not able to take the 1988 bar examinations arising from the latter’s negligence. He
prayed for an award of moral and exemplary damages, unrealized income, attorney’s fees, and
costs of suit.

In its answer with counterclaim, petitioner denied liability arguing mainly that it never led
respondent to believe that he completed the requirements for a Bachelor of Laws degree when
his name was included in the tentative list of graduating students. After trial, the lower court
rendered judgment as follows:
WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the plaintiff and
against the defendant ordering the latter to pay plaintiff the sum of THIRTY FIVE THOUSAND
FOUR HUNDRED SEVENTY PESOS (P35,470.00) with legal rate of interest from the filing of
the complaint until fully paid, the amount of FIVE THOUSAND PESOS (P5,000.00) as attorney’s
fees and the cost of suit.

Defendant’s counterclaim is, for lack of merit, hereby dismissed.

SO ORDERED.​[3]
which on appeal by both parties was affirmed by the Court of Appeals (CA) with modification.
The dispositive portion of the CA decision reads:
WHEREFORE, in the light of the foregoing, the lower Court’s Decision is hereby AFFIRMED
with the MODIFICATION that defendant-appellee, in addition to the sum adjudged by the lower
court in favor of plaintiff-appellant, is also ORDERED to pay plaintiff-appellant the amount of
FIFTY THOUSAND (P50,000.00) PESOS for moral damages. Costs against
defendant-appellee.

SO ORDERED.​[4]
Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this Court
on a petition for review under Rule 45 of the Rules of Court, arguing that it has no liability to
respondent Romeo A. Jader, considering that the proximate and immediate cause of the alleged
damages incurred by the latter arose out of his own negligence in not verifying from the
professor concerned the result of his removal exam.

The petition lacks merit.

When a student is enrolled in any educational or learning institution, a contract of education is

entered into between said institution and the student. The professors, teachers or instructors
hired by the school are considered merely as agents and administrators tasked to perform the
school’s commitment under the contract. Since the contracting parties are the school and the
student, the latter is not duty-bound to deal with the former’s agents, such as the professors with
respect to the status or result of his grades, although nothing prevents either professors or
students from sharing with each other such information. The Court takes judicial notice of the
traditional practice in educational institutions wherein the professor directly furnishes his/her
students their grades. It is the contractual obligation of the school to timely inform and furnish
sufficient notice and information to each and every student as to whether he or she had already
complied with all the requirements for the conferment of a degree or whether they would be
included among those who will graduate. Although commencement exercises are but a formal
ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational
institution’s way of announcing to the whole world that the students included in the list of those
who will be conferred a degree during the baccalaureate ceremony have satisfied all the
requirements for such degree. Prior or subsequent to the ceremony, the school has the
obligation to promptly inform the student of any problem involving the latter’s grades and
performance and also most importantly, of the procedures for remedying the same.

Petitioner, in belatedly informing respondent of the result of the removal examination,

particularly at a time when he had already commenced preparing for the bar exams, cannot be
said to have acted in good faith. Absence of good faith must be sufficiently established for a
successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the
Civil Code. Good faith connotes an honest intention to abstain from taking undue advantage of
another, even though the forms and technicalities of the law, together with the absence of all
information or belief of facts, would render the transaction unconscientious.​[5] It is the school that
has access to those information and it is only the school that can compel its professors to act
and comply with its rules, regulations and policies with respect to the computation and the
prompt submission of grades. Students do not exercise control, much less influence, over the
way an educational institution should run its affairs, particularly in disciplining its professors and
teachers and ensuring their compliance with the school’s rules and orders. Being the party that
hired them, it is the school that exercises general supervision and exclusive control over the
professors with respect to the submission of reports involving the students’ standing. Exclusive
control means that no other person or entity had any control over the instrumentality which
caused the damage or injury.​[6]

The college dean is the senior officer responsible for the operation of an academic program,
enforcement of rules and regulations, and the supervision of faculty and student services.​[7] He
must see to it that his own professors and teachers, regardless of their status or position outside
of the university, must comply with the rules set by the latter. The negligent act of a professor
who fails to observe the rules of the school, for instance by not promptly submitting a student’s
grade, is not only imputable to the professor but is an act of the school, being his employer.

Considering further, that the institution of learning involved herein is a university which is
engaged in legal education, it should have practiced what it inculcates in its students, more
specifically the principle of good dealings enshrined in Articles 19 and 20 of the Civil Code
which states:
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith.

Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another,
shall indemnify the latter for the same.

Article 19 was intended to expand the concept of torts by granting adequate legal remedy for
the untold number of moral wrongs which is impossible for human foresight to provide
specifically in statutory law.​[8] In civilized society, men must be able to assume that others will do
them no intended injury – that others will commit no internal aggressions upon them; that their
fellowmen, when they act affirmatively will do so with due care which the ordinary understanding
and moral sense of the community exacts and that those with whom they deal in the general
course of society will act in good faith. The ultimate thing in the theory of liability is justifiable
reliance under conditions of civilized society.​[9] Schools and professors cannot just take students
for granted and be indifferent to them, for without the latter, the former are useless.
Educational institutions are duty-bound to inform the students of their academic status and not
wait for the latter to inquire from the former. The conscious indifference of a person to the rights
or welfare of the person/persons who may be affected by his act or omission can support a
claim for damages.​[10] Want of care to the conscious disregard of civil obligations coupled with a
conscious knowledge of the cause naturally calculated to produce them would make the erring
party liable.​[11] Petitioner ought to have known that time was of the essence in the performance
of its obligation to inform respondent of his grade. It cannot feign ignorance that respondent will
not prepare himself for the bar exams since that is precisely the immediate concern after
graduation of an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its
student’s grades at any time because a student has to comply with certain deadlines set by the
Supreme Court on the submission of requirements for taking the bar. Petitioner’s liability arose
from its failure to promptly inform respondent of the result of an examination and in misleading
the latter into believing that he had satisfied all requirements for the course. Worth quoting is the
following disquisition of the respondent court:
"It is apparent from the testimony of Dean Tiongson that defendant-appellee University had
been informed during the deliberation that the professor in Practice Court I gave
plaintiff-appellant a failing grade. Yet, defendant-appellee still did not inform plaintiff-appellant of
his failure to complete the requirements for the degree nor did they remove his name from the
tentative list of candidates for graduation. Worse, defendant-appellee university, despite the
knowledge that plaintiff-appellant failed in Practice Court I, ​again included plaintiff-appellant’s
name in the "tentative" list of candidates for graduation which was prepared after the
deliberation and which became the basis for the commencement rites program. Dean Tiongson
reasons out that plaintiff-appellant’s name was allowed to remain in the tentative list of
candidates for graduation in the hope that the latter would still be able to remedy the situation in
the remaining few days before graduation day. Dean Tiongson, however, did not explain how
plaintiff-appellant Jader could have done something to complete his deficiency if
defendant-appellee university did not exert any effort to inform plaintiff-appellant of his failing
grade in Practice Court I."​[12]
Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the
delayed relay of information to respondent. When one of two innocent parties must suffer, he
through whose agency the loss occurred must bear it.​[13] The modern tendency is to grant
indemnity for damages in cases where there is abuse of right, even when the act is not illicit.​[14]
If mere fault or negligence in one’s acts can make him liable for damages for injury caused
thereby, with more reason should abuse or bad faith make him liable. A person should be
protected only when he acts in the legitimate exercise of his right, that is, when he acts with
prudence and in good faith, but not when he acts with negligence or abuse.​[15]

However, while petitioner was guilty of negligence and thus liable to respondent for the latter’s
actual damages, we hold that respondent should not have been awarded moral damages. We
do not agree with the Court of Appeals’ findings that respondent suffered shock, trauma and
pain when he was informed that he could not graduate and will not be allowed to take the bar
examinations. At the very least, it behooved on respondent to verify for himself whether he has
completed all necessary requirements to be eligible for the bar examinations. As a senior law
student, respondent should have been responsible enough to ensure that all his affairs,
specifically those pertaining to his academic achievement, are in order. Given these
considerations, we fail to see how respondent could have suffered untold embarrassment in
attending the graduation rites, enrolling in the bar review classes and not being able to take the
bar exams. If respondent was indeed humiliated by his failure to take the bar, he brought this
upon himself by not verifying if he has satisfied all the requirements including his school
records, before preparing himself for the bar examination. Certainly, taking the bar examinations
does not only entail a mental preparation on the subjects thereof; there are also prerequisites of
documentation and submission of requirements which the prospective examinee must meet.

WHEREFORE, the assailed decision of the Court of Appeals is ​AFFIRMED with

MODIFICATION.​ Petitioner is ​ORDERED to P
​ AY respondent the sum of Thirty-five Thousand
Four Hundred Seventy Pesos (P35,470.00), with legal interest of 6% per annum computed from
the date of filing of the complaint until fully paid; the amount of Five Thousand Pesos
(P5,000.00) as attorney’s fees; and the costs of the suit. The award of moral damages is
DELETED.​

SO ORDERED.

Davide, Jr., C.J., Kapunan,​ and ​Pardo, JJ.,​ concur.

Puno, J.​, no part.

[1]
Court of Appeals (CA) Decision promulgated October 10, 1997 penned by Justice Barcelona,
with Justices Mabutas, Jr. and Aquino, concurring, pp. 5-6; ​Rollo​, pp. 12-13.

[2]
A check with the Attorney’s List in the Court shows that private respondent is not a member of
the Philippine Bar. (​http.//www.supremecourt.gov.ph)​

[3]
Decision of Regional Trial Court (RTC-Manila Branch IX) dated September 4, 1990 penned by
Judge Edilberto Sandoval, pp. 8-9; RTC Records, pp. 192-193; ​Rollo​, pp. 8-9

[4]​
CA Decision, p. 24; ​Rollo​, p. 31.

[5]
​Tolentino, New Civil Code of the Philippines​, Vol. I, (1960 ed.) citing ​Wood v. Conrad,​ 2, S.B.
83, 50 N.W. 95.

[6]
​ ahowald v. Minnesota Gas Co. (Minn) 344 NW2d 856. See also ​Jackson v. H.H. Robertson
M
Co.​, 118 Ariz 29, 574 P2d 82; ​Cummins v. West Linn,​ 21 Or. App 643, 536 P2d 455.

[7]
Hawes and Hawes, "The Concise Dictionary of Education," p. 62, 1982 ed. cited in Sarmiento,
Manual, p. 164.

[8]
​ NB v. CA​, 83 SCRA 237 (1978) cited in ​Sea Commercial Company v. CA,​ G.R. No. 122823,
P
November 25, 1999.

[9]​
Dean Roscoe Pound, ​Introduction to the Philosophy of Law.​

[10]​
​Texas Pacific & Oil Co. v. Robertson​, 125 Tex 4, 79 SW2d 830, 98 ALR 262.

[11]
See ​Helms v. Universal Atlas Cement Co., (CA5 Tex) 202 F2d 421 cert de 346 US 858, 98 L
ed 372, 74 S Ct 74; ​Otto Kuehne Preserving Co. v. Allen, (CA8 Mo) 148 F 166; See also
Alabama G.S.R. Co. v. Hill​, 93 Ala 514, 9 So 722; ​Richmond & P.R. Co. v. Vance,​ 93 Ala 144, 9
So 574.
[12]​
CA Decision, pp. 222-23; ​Rollo​, pp. 29-30.

[13]​
​Ohio Farmers, Ins. Co. v. Norman,​ (App) 122 Ariz 330, 594 P2d 1026.

[14]​
​Sea Commercial Company v. CA,​ G.R. No. 122823, November 25, 1999.

[15]​
Tolentino, ​Civil Code​, 1990 ed., Vol. I, p. 61.

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[ G.R. No. 120639, September 25, 1998 ]

BPI EXPRESS CARD CORPORATION, PETITIONER, VS. COURT OF

APPEALS AND RICARDO J. MARASIGAN, RESPONDENTS.

DECISION

KAPUNAN, J.:

The question before this Court is whether private respondent can recover moral damages
arising from the cancellation of his credit card by petitioner credit card corporation.

The facts of the case are as stated in the decision of the respondent court,​[1]​to wit:
The case arose from the dishonor of the credit card of the plaintiff Atty. Ricardo J. Marasigan by
Cafe Adriatico, a business establishment accredited with the defendant-appellant BPI Express
Card Corporation (BECC for brevity) on December 8, 1989 when the plaintiff entertained some
guests thereat.

The records of this case show that plaintiff, who is a lawyer by profession was a complimentary
member of BECC from February 1988 to February 1989 and was issued Credit Card No.
100-012-5534 with a credit limit of P3,000.00 and with a monthly billing every 27th of the month
(Exh. N), subject to the terms and conditions stipulated in the contract (Exh. 1-b). His
membership was renewed for another year or until February 1990 and the credit limit was
increased to P5,000.00 (Exh. A). The plaintiff oftentimes exceeded his credit limits (Exhs. I, I-1
to I-12) but this was never taken against him by the defendant and even his mode of paying his
monthly bills in check was tolerated. Their contractual relations went on smoothly until his
statement of account for October, 1989 amounting to P8,987.84 was not paid in due time. The
plaintiff admitted having inadvertently failed to pay his account for the said month because he
was in Quezon province attending to some professional and personal commitments. He was
informed by his secretary that defendant was demanding immediate payment of his outstanding
account, was requiring him to issue a check for P15,000.00 which would include his future bills,
and was threatening to suspend his credit card. Plaintiff issued Far East Bank and Trust Co.
Check No. 494675 in the amount of P15,000.00, postdated December 15, 1989 which was
received on November 23, 1989 by Tess Lorenzo, an employee of the defendant (Exhs. J and
J-1), who in turn gave the said check to Jeng Angeles, a co-employee who handles the account
of the plaintiff. The check remained in the custody of Jeng Angeles. Mr. Roberto Maniquiz, head
of the collection department of defendant was formally informed of the postdated check about a
week later. On November 28, 1989, defendant served plaintiff a letter by ordinary mail informing
him of the temporary suspension of the privileges of his credit card and the inclusion of his
account number in their Caution List. He was also told to refrain from further use of his credit
card to avoid any inconvenience/embarrassment and that unless he settles his outstanding
account with the defendant within 5 days from receipt of the letter, his membership will be
permanently cancelled (Exh. 3). There is no showing that the plaintiff received this letter before
December 8, 1989. Confident that he had settled his account with the issuance of the postdated
check, plaintiff invited some guests on December 8, 1989 and entertained them at Café
Adriatico. When he presented his credit card to Café Adriatico for the bill amounting to P735.32,
said card was dishonored. One of his guests, Mary Ellen Ringler, paid the bill by using her own
credit card, a Unibankard (Exhs. M, M-1 and M-2).

In a letter addressed to the defendant dated December 12, 1989, plaintiff requested that he be
sent the exact billing due him as of December 15, 1989, to withhold the deposit of his postdated
check and that said check be returned to him because he had already instructed his bank to
stop the payment thereof as the defendant violated their agreement that the plaintiff issue the
check to the defendant to cover his account amounting to only P8,987.84 on the condition that
the defendant will not suspend the effectivity of the card (Exh. D). A letter dated December 16,
1989 was sent by the plaintiff to the manager of FEBTC, Ramada Branch, Manila requesting the
bank to stop the payment of the check (Exhs. E, E-1). No reply was received by plaintiff from the
defendant to his letter dated December 12, 1989. Plaintiff sent defendant another letter dated
March 12, 1990 reminding the latter that he had long rescinded and cancelled whatever
arrangement he entered into with defendant and requesting for his correct billing, less the
improper charges and penalties, and for an explanation within five (5) days from receipt thereof
why his card was dishonored on December 8, 1989 despite assurance to the contrary by
defendant's personnel-in-charge, otherwise the necessary court action shall be filed to hold
defendant responsible for the humiliation and embarrassment suffered by him (Exh. F). Plaintiff
alleged further that after a few days, a certain Atty. Albano, representing himself to be working
with office of Atty. Lopez, called him inquiring as to how the matter can be threshed out
extrajudicially but the latter said that such is a serious matter which cannot be discussed over
the phone. The defendant served its final demand to the plaintiff dated March 21, 1990 requiring
him to pay in full his overdue account, including stipulated fees and charges, within 5 days from
receipt thereof or face court action also to replace the postdated check with cash within the
same period or face criminal suit for violation of the Bouncing Check Law (Exh. G/Exh. 13). The
plaintiff, in a reply letter dated April 5, 1990 (Exh. H), demanded defendant's compliance with his
request in his first letter dated March 12, 1990 within three (3) days from receipt, otherwise the
plaintiff will file a case against them, x x x.​[2]

Thus, on May 7, 1990 private respondent filed a complaint for damages against petitioner
before the Regional Trial Court of Makati, Branch 150, docketed as Civil Case No. 90-1174.
After trial, the trial court ruled for private respondent, finding that herein petitioner abused its
right in contravention of Article 19 of the Civil Code.​[3] The dispositive portion of the decision
reads:
Wherefore, judgment is hereby rendered ordering the defendant to pay plaintiff the following:

1. P100,000.00 as moral damages;

2. P50,000.00 as exemplary damages; and
3. P20,000.00 by way of attorney's fees.

On the other hand, plaintiff is ordered to pay defendant its outstanding obligation in the amount
of P14,439.41, amount due as of December 15, 1989.​[4]
The trial court's ruling was based on its findings and conclusions, to wit:
There is no question that plaintiff had been in default in the payment of his billings for more than
two months, prompting defendant to call him and reminded him of his obligation. Unable to
personally talk with him, this Court is convinced that somehow one or another employee of
defendant called him up more than once.

However, while it is true that, as indicated in the terms and conditions of the application for BPI
credit card, upon failure of the cardholder to pay his outstanding obligation for more than thirty
(30) days, the defendant can automatically suspend or cancel the credit card, that reserved right
should not have been abused, as it was in fact abused, in plaintiff's case. What is more peculiar
here is that there have been admitted communications between plaintiff and defendant prior to
the suspension or cancellation of plaintiff's credit card and his inclusion in the caution list.
However, nowhere in any of these communications was there ever a hint given to plaintiff that
his card had already been suspended or cancelled. In fact, the Court observed that while
defendant was trying its best to persuade plaintiff to update its account and pay its obligation, it
had already taken steps to suspend/cancel plaintiff's card and include him in the caution list.
While the Court admires defendant's diplomacy in dealing with its clients, it cannot help but
frown upon the backhanded way defendant dealt with plaintiff's case. For despite Tess
Lorenzo's denial, there is reason to believe that plaintiff was indeed assured by defendant of the
continued honoring of his credit card so long as he pays his obligation of P15,000.00. Worst,
upon receipt of the postdated check, defendant kept the same until a few days before it became
due and said check was presented to the head of the collection department, Mr. Maniquiz, to
take steps thereon, resulting to the embarrassing situation plaintiff found himself in on
December 8, 1989. Moreover, Mr. Maniquiz himself admitted that his request for plaintiff to
replace the check with cash was not because it was a postdated check but merely to tally the
payment with the account due.

Likewise, the Court is not persuaded by the sweeping denials made by Tess Lorenzo and her
claim that her only participation was to receive the subject check. Her immediate superior, Mr.
Maniquiz testified that he had instructed Lorenzo to communicate with plaintiff once or twice to
request the latter to replace the questioned check with cash, thus giving support to the
testimony of plaintiff's witness, Dolores Quizon, that it was one Tess Lorenzo who she had
talked over the phone regarding plaintiff's account and plaintiff's own statement that it was this
woman who assured him that his card has not yet been and will not be cancelled/suspended if
he would pay defendant the sum of P15,000.00.

Now, on the issue of whether or not upon receipt of the subject check, defendant had agreed
that the card shall remain effective, the Court takes note of the following:

1. An employee of defendant corporation unconditionally accepted the subject check upon its
delivery, despite its being a postdated one; and the amount did not tally with plaintiff's obligation;

2. Defendant did not deny nor controvert plaintiff's claim that all his payments were made in
checks;

3. Defendant's main witness, Mr. Maniquiz, categorically stated that the request for plaintiff to
replace his postdated check with cash was merely for the purpose of tallying plaintiff's
outstanding obligation with his payment and not to question the postdated check;

4. That the card was suspended almost a week after receipt of the postdated check;

5. That despite the many instances that defendant could have informed plaintiff over the phone
of the cancellation or suspension of his credit card, it did not do so, which could have prevented
the incident of December 8, 1989, the notice allegedly sent thru ordinary mail is not only
unreliable but takes a long time. Such action as suspension of credit card must be immediately
relayed to the person affected so as to avoid embarrassing situations.

6. And that the postdated check was deposited on December 20, 1989.

In view of the foregoing observations, it is needless to say that there was indeed an
arrangement between plaintiff and the defendant, as can be inferred from the acts of the
defendant's employees, that the subject credit card is still good and could still be used by the
plaintiff as it would be honored by the duly accredited establishment of defendant.​[5]
Not satisfied with the Regional Trial Court's decision, petitioner appealed to the Court of
Appeals, which, in a decision promulgated on March 9, 1995 ruled in its dispositive portion:
WHEREFORE, premises considered, the decision appealed from is hereby AFFIRMED with the
MODIFICATION that the defendant-appellant shall pay the plaintiff-appellee the following:
P50,000.00 as moral damages; P25,000.00 as exemplary damages; and P10,000.00 by way of
attorney's fees.

SO ORDERED.​[6]

Hence, the present petition on the following assignment of errors:

I

THE LOWER COURT ERRED IN DECLARING THAT THERE WAS INDEED AN AGREEMENT
OR ARRANGEMENT ENTERED INTO BETWEEN THE PARTIES WHEREIN THE
DEFENDANT REQUIRED THE PLAINTIFF TO ISSUE A POSTDATED CHECK IN ITS FAVOR
IN THE AMOUNT OF P15,000.00 AS PAYMENT FOR HIS OVERDUE ACCOUNTS, WITH THE
CONDITION THAT THE PLAINTIFF'S CREDIT CARD WILL NOT BE SUSPENDED OR
CANCELLED.

II

THE LOWER COURT ERRED IN HOLDING DEFENDANT LIABLE FOR DAMAGES AND
ATTORNEY'S FEES ARISING OUT FROM THE DISHONOR OF THE PLAINTIFF'S CREDIT
CARD.​[7]
We find the petition meritorious.

The first issue to be resolved is whether petitioner had the right to suspend the credit card of the
private respondent.

Under the terms and conditions of the credit card, signed by the private respondent, any card
with outstanding balances after thirty (30) days from original billing/statement shall automatically
be suspended, thus:
PAYMENT OF CHARGES - BECC shall furnish the Cardholder a monthly statement of account
made through the use of the CARD and the Cardholder agrees that all charges made through
the use of the CARD shall be paid by the Cardholder on or before the last day for payments,
which is twenty (20) days from the date of the said statement of account, and such payment due
date may be changed to an earlier date if the Cardholder's account is considered overdue
and/or with balances in excess of the approved credit limit; or to such other date as may be
deemed proper by the CARD issuer with notice to the Cardholder on the same monthly
statement of account. If the last day for payment falls on a Saturday, Sunday or Holiday, the last
day for payment automatically becomes the last working day prior to said payment date.
However, notwithstanding the absence or lack of proof of service of the statement of charges to
the Cardholder, the latter shall pay any or all charges made through the use of the CARD within
thirty (30) days from the date or dates thereof. Failure of Cardholder to pay any and all charges
made through the CARD within the payment period as stated in the statement of charges or
within thirty (30) days from actual date or dates whichever occur earlier, shall render him in
default without the necessity of demand from BECC, which the Cardholder expressly waives.
These charges or balance thereof remaining unpaid after the payment due date indicated on the
monthly statement of account shall bear interest at the rate of 3% per month and an additional
penalty fee equivalent to another 3% of the amount due for every month or a fraction of a
month's delay. PROVIDED, that if there occurs any change on the prevailing market rates.
BECC shall have the option to adjust the rate of interest and/or penalty fee due on the
outstanding obligation with prior notice to the Cardholder.
xxx xxx xxx

Any CARD with outstanding balances unpaid after thirty (30) days from original billing/statement
date shall automatically be suspended, and those with accounts unpaid after sixty (60) days
from said original billing/statement date shall automatically be cancelled, without prejudice to
BECC's right to suspend or cancel any CARD any time and for whatever reason. In case of
default in his obligation as provided for in the preceding paragraph, Cardholder shall surrender
his CARD to BECC and shall in addition to the interest and penalty charges aforementioned,
pay the following liquidated damages and/or fees (a) a collection fee of 25% of the amount due
if the account is referred to a collection agency or attorney; (b) a service fee of P100 for every
dishonored check issued by the Cardholder in payment of his account, with prejudice, however,
to BECC's right of considering Cardholder's obligation unpaid, cable cost for demanding
payment or advising cancellation of membership shall also be for Cardholder's account; and (c)
a final fee equivalent to 25% of the unpaid balance, exclusive of litigation expenses and judicial
costs, if the payment of the account is enforced through court action.​[8]
The aforequoted provision of the credit card cannot be any clearer. By his own admission,
private respondent made no payment within thirty days for his original billing/statement dated 27
September 1989. Neither did he make payment for his original billing/statement dated 27
October 1989. Consequently, as early as 28 October 1989, thirty days from the non-payment of
his billing dated 27 September 1989, petitioner corporation could automatically suspend his
credit card.

The next issue is whether prior to the suspension of private respondent's credit card on 28
November 1989, the parties entered into an agreement whereby the card could still be used and
would be duly honored by duly accredited establisments.

We agree with the findings of the respondent court, that there was an arrangement between the
parties, wherein the petitioner required the private respondent to issue a check worth P15,000
as payment for the latter's billings. However, we find that the private respondent was not able to
comply with his obligation.

As the testimony of private respondent himself bears out, the agreement was for the immediate
payment of the outstanding account:
Q In said statement of account that you are supposed to pay the
P8,974.84 the charge of interest and penalties, did you note that?

A Yes, sir. I noted the date.

Q When?

A When I returned from the Quezon province, sir.

Q When?

A I think November 22, sir.

Q So that before you used again the credit card you were not able to pay
immediately this P8,987.84 in cash?

A I paid P15,000.00, sir.

Q My question Mr. Witness is, did you pay this P8,987.84 in charge of
interest and penalties immediately in cash?

A In cash no, but in check, sir.

Q You said that you noted the word "immediately" in bold letters in your
statement of account, why did you not pay immediately?

A Because I received that late, sir.

Q Yes, on November 22 when you received from the secretary of the

defendant telling you to pay the principal amount of P8,987.84, why
did you not pay?

A There was a communication between me and the defendant, I was

required to pay P8,000.00 but I paid in check for P15,000.00, sir.

Q Do you have any evidence to show that the defendant required you to
pay in check for P15,000.00?

A Yes, sir.

Q Where is it?

A It was by telecommunication, sir.

Q So there is no written communication between you and the defendant?

A There was none, sir.

Q There is no written agreement which says that P8,987.84 should be

paid for P15,000.00 in check, there is none?

A Yes, no written agreement, sir.

Q And you as a lawyer you know that a check is not considered as cash
specially when it is postdated sent to the defendant?

A That is correct, sir.

Clearly, the purpose of the arrangement between the parties on November 22, 1989, was for
the immediate payment of the private respondent's outstanding account, in order that his credit
card would not be suspended.

As agreed upon by the parties, on the following day, private respondent did issue a check for
P15,000. However, the check was postdated 15 December 1989. Settled is the doctrine that a
check is only a substitute for money and not money, the delivery of such an instrument does
not, by itself operate as payment.​[9]​This is especially true in the case of a postdated check.

Thus, the issuance by the private respondent of the postdated check was not effective payment.
It did not comply with his obligation under the arrangement with Miss Lorenzo. Petitioner
corporation was therefore justified in suspending his credit card.

Finally, we find no legal and factual basis for private respondent's assertion that in canceling the
credit card of the private respondent, petitioner abused its right under the terms and conditions
of the contract.

To find the existence of an abuse of right under Article 19 the following elements must be
present: (1) There is a legal right or duty; (2) which is exercised in ​bad faith; (3) for the sole
intent of prejudicing or injuring another.​[10]

Time and again this Court has held that good faith is presumed and the burden of proving bad
faith is on the party alleging it.​[11] This private respondent failed to do. In fact, the action of the
petitioner belies the existence of bad faith. As early as 28 October 1989, petitioner could have
suspended private respondent's card outright. Instead, petitioner allowed private respondent to
use his card for several weeks. Petitioner had even notified private respondent of the impending
suspension of his credit card and made special accommodations for him for settling his
outstanding account. As such, petitioner cannot be said to have capriciously and arbitrarily
canceled the private respondent's credit card.

We do not dispute the findings of the lower court that private respondent suffered damages as a
result of the cancellation of his credit card. However, there is a material distinction between
damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or
harm which results from the injury; and damages are the recompense or compensation awarded
for the damage suffered. Thus, there can be damage without injury in those instances in which
the loss or harm was not the result of a violation of a legal duty. In such cases, the
consequences must be borne by the injured person alone, the law affords no remedy for
damages resulting from an act which does not amount to a legal injury or wrong. These
situations are often called ​damnum absque injuria.[12]
​

In other words, in order that a plaintiff may maintain an action for the injuries of which he
complains, he must establish that such injuries resulted from a breach of duty which the
defendant owed to the plaintiff - a concurrence of injury to the plaintiff and legal responsibility by
the person causing it. The underlying basis for the award of tort damages is the premise that an
individual was injured in contemplation of law. Thus, there must first be a breach of some duty
and the imposition of liability for that breach before damages may be awarded;​[13] and the
breach of such duty should be the proximate cause of the injury.

We therefore disagree with the ruling of the respondent court that the dishonor of the credit card
of the private respondent by Café Adriatico is attributable to petitioner for its willful or gross
neglect to inform the private respondent of the suspension of his credit card, the unfortunate
consequence of which brought social humiliation and embarrassment to the private
respondent.​[14]

It was petitioner's failure to settle his obligation which caused the suspension of his credit card
and subsequent dishonor at Café Adriatico. He can not now pass the blame to the petitioner for
not notifying him of the suspension of his card. As quoted earlier, the application contained the
stipulation that the petitioner could automatically suspend a card whose billing has not been
paid for more than thirty days. Nowhere is it stated in the terms and conditions of the application
that there is a need of notice before suspension may be effected as private respondent
claims.​[15]

This notwithstanding, on November 28, 1989, the day of the suspension of private respondent's
card, petitioner sent a letter by ordinary mail notifying private respondent that his card had been
temporarily suspended. Under the Rules on Evidence, there is a disputable presumption that
letters duly directed and mailed were received on the regular course of mail.​[16] Aside from the
private respondent's bare denial, he failed to present evidence to rebut the presumption that he
received said notice. In fact upon cross examination, private respondent admitted that he did
received the letter notifying him of the cancellation:
Q Now you were saying that there was a first letter sent to you by the
defendant?

A Your letter, sir.

Q Was that the first letter that you received?

A Yes, sir.

Q Is it that there was a communication first between you and the

defendant?

A There was none, sir. I received a cancellation notice but that was after
November 27.​[17]
As it was private respondent's own negligence which was the proximate cause of his
embarrassing and humiliating experience, we find the award of damages by the respondent
court clearly unjustified. We take note of the fact that private respondent has not yet paid his
outstanding account with petitioner.
IN VIEW OF THE FOREGOING, the decision of the Court of Appeals ordering petitioner to pay
private respondent P100,000.00 as moral damages, P50,000.00 as exemplary damages and
P20,000.00 as attorney's fees, is ​SET ASIDE. Private respondent is ​DIRECTED to pay his
outstanding obligation with the petitioner in the amount of P14,439.41.

SO ORDERED.

Narvasa, C.J., (Chairman), and Romero, J.,​ concur.

Purisima, J.,​ no part, being signatory to CA decision.

[1]
CA decision penned by: Justice Salome A. Montoya, concurred by: Justices Fidel P. Purisima
and Godardo A. Jacinto, Rollo, p. 12.

[2]​
Id., at 24-26.

[3]
Article 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.

[4]​
See note 1, p. 45.

[5]​
Id., at 42-44.

[6]​
Id., at 35.

[7]​
Id., at 6.

[8]​
Records, p. 104.

[9]​
Roman Catholic Bishop of Malolos, Inc. vs. IAC, 191 SCRA 411 (1990).

[10]​
Albenson Enterprises Corp. vs. CA, 217 SCRA 16, 25 (1993).

[11]
Barons Marketing Corp. vs. Court of Appeals and Phelps Dodge Phils., Inc., G.R. No.
126486, February 9, 1998.

[12]​
Custodio vs. CA, 253 SCRA 483 (1996) citing 22 Am Jur 2d, Damages, Sec. 4, 35-36.

[13]​
Ibid.

[14]​
See note 1, p. 33.
[15]
During cross-examination of plaintiff-private respondent Ricardo Marasigan by counsel for
the defendant-petitioner, the following exchange ensued:

Q Now you know that after using the credit card you have to pay the monthly charges as they
fall due in accordance with the obligation/application that you signed?

A Yes, sir.

Q And if the payments were not made on time they are supposed to earn interest?

A Yes, sir.

Q They also earn charges, may we know your answer Mr. Witness?

A Yes, sir.

Q Thank you. In case collection suit is filed you know that there were litigation charges that will
be claimed against you, is it not?

A I don't know sir.

Q But you as a practicing lawyer?

A Yes, as matter of fact that is the procedure.

Q But you did not read the contents?

A Yes, sir.

Q But how did you come to know that you are supposed to pay the charges since you have not
read the contents?

A By the statement of account, sir.

Q What about the date when you should pay your monthly charges, did you know when to pay
it?

A It is also stated there, sir.

Q In the monthly statement of account?

A Yes, sir.
Q When you received this monthly statement of account did you not complain to the defendant
the credit card since you have not read the contents of your application?

A No, sir. I did not.

Q You continued using that credit card until it was suspended and terminated?

A Yes, sir.

Q Now do you also know from the terms and conditions of the contract between you and the
defendant that if the charges for the use of the credit card are not paid it will be suspended?

A Yes, sir. But there has got to be a prior notice.

Q Thank you. After a suspension is still not paid your credit card has to be terminated?

A I think that is the procedure, sir (TSN, November 5, 1990, pp. 39-42).

[16]​
Revised Rules of Court, Rule 131 Sec. 3 (m).

[17]​
TSN, November 5, 1990, pp. 51-52.

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B. Acts contra bonus mores

[ G.R. No. L-15526, December 28, 1963 ]

ENRIQUE J.L. RUIZ AND JOSE V. HERRERA, IN THEIR BEHALF AND AS

MINORITY STOCKHOLDERS OF THE ALLIED TECHNOLOGISTS, INC.,
PLAINTIFFS AND APPELLANTS, VS. THE SECRETARY OF NATIONAL
DEFENSE, ET AL., DEFENDANTS AND APPELLEES.

DECISION

PAREDES, J.:

Enrique J.L. Ruiz and Jose V. Herrera from an order of the Court of First Instance of Manila, in
Civil Case No. 26601, dated ​February 25, 1959, dismissing plaintiffs' complaint.
On September 11, 1950, a contract was executed between the defendant Allied Technologists
Inc., (corporation, for short), and the Republic of the Philippines, for the construction of the
Veterans Memorial Hospital. Ruiz and Herrera were stockholders and officers of the corporation.
The construction of the hospital was terminated in 1955. On August 20, 1954, and June 20,
1955, Civil Case Nos. 2S778 and 26601, respectively, were filed by same plaintiffs herein,
making as parties-defendants in both cases, the same defendants herein, the Secretary of
National Defense, Col. Nicolas Jimenez (Engineer), the Finance Officer, and the Auditor of the
Dept. of National Defense, Pablo D. Panlilio and Allied Technologists, Inc. Civil Case No. 23778
was dismissed by the CFI on October 12, 1954 and the dismissal was affirmed by this Court on
July 7, 1955, in G.R. No. L-8638. Civil Case No. 26601 was also dismissed on September 13,
1955. On appeal, this Court reversed the order of dismissal, under the impression that the real
controversy was confined merely between defendant Panlilio and plaintiffs Ruiz and Herrera over
the 15 percent of the contract price, which was retained by the Department of National Defense.
The retention of the 15 percent of the contract price in the sum of P34,740.000 was made to
answer for any claim or lien that might arise, in the course of the construction. The last case,
however, was remanded to the court of origin, for further proceedings. Panlilio and the
corporation filed their amended answers, stating that the amount retained by the Department of
National Defense was already paid to defendant corporation, as sought for by the plaintiffs in
their complaint. In view of this development, the trial court invited the parties to a conference, in
which the plaintiffs indicated their conformity, to the dismissal of the complaint with respect to
the retention of the 15% of the contract price; but insisted upon the hearing of the second
question, which sought the declaration and recognition of plaintiffs Ruiz and Herrera, as two of
the three architects of the hospital. The trial court, nevertheless, dismissed the complaint, for
being already academic and moot. Hence, this appeal by plaintiffs-appellants, who alleged in
their lone assignment of error that "the lower court grievously erred in ordering the dismissal of
the case, with costs against the plaintiffs."
Plaintiffs-appellants contend that the only ground relied upon by the lower court to dismissing
the case, without any trial, is the allegation contained in pars. 4 and (e) of the answers of the
appellees Panlilio and Allied Technologists, Inc., respectively, that the amount retained by the
Department of National Defense had already been paid; that except for this bare allegation of the
appellees, no evidence was adduced to prove the truth of the same; that even assuming for the
sake of argument, that the same is true, nevertheless the first part of the first cause of action
still remains, for which they had insisted upon a hearing in order to establish their right to be
recognized as two of the three architects of the hospital; that because the pleadings do not show
any ground which might legally justify the action taken by the lower court, the latter should not
have ordered the dismissal of the entire case but should have ordered only the striking out of the
moot portion of appellants' first cause of action, citing Pacal vs. Ramos, 81 Phil. 30, 33; 27 C.
J.S. 209-210; Bush vs. Murray 205 N.Y.S. 21, 26, 209 App. Div. 563; Bearden vs. Longino, 190
S.E. 12, 183, Ga. 819). Appellants further argue in their brief that they base their cause of action
on article 21, New Civil Code.
The appeal has no merit. The order appealed from, states—
"Considering tie manifestation of counsel for plaintffs that the latter would insist on the hearing
of the above entitled case for the purpose of establishing their right to be recognized as the
architects of the Veterans Hospital together with defendant Pablo D. Panlllio, and it appearing
that plaintiffs' Amended Complaint with Injunction prays, among others, 'That this Hon. Court
order defendants Secretary of National Defense, Col. Nicolas Jimenez, and the Finance Officer
and Auditor of the Department of National Defense to pay the Allied Technologists, Inc. the
balance unpaid by virtue of the contract executed on Sept. 11, 1950 (Annex ‘C’ hereof) for
services rendered under Title and to be rendered under Title II of said contract; that paragraph 4
of defendant Pablo Panlilio's Amended Answer to said complaint alleges 'That whatever amounts
were retained by the Dept, of National Defense on the contract price which retention was
authorized by the contract was paid by the Dept. of National Defense to the Allied Technologists,
Inc., as sought by the plaintiffs; that paragraph (e) of the answer to the amended complaint of
defendant Allied Technologists, Inc., also alleges 'That, whatever amounts were retained by the
Department of National Defense, per the stipulations contained in the contract, have already
been paid by the said Department of National Defense to the Allied Technologists, Inc. and,
therefore, the present action seeking to compel the aforementioned Department of National
Defense to pay to defendant Allied Technologists, Inc. the amounts retained by the Department
of National Defense is academic, groundless, unfounded and malicious'; that the said allegations
of the separate answers of defendants Pablo, Panlilio and Allied Technologists, Inc., are not and
can not be denied by plaintiffs, and that it is this Court's understanding that defendant has no
objection to the dismissal of this case—it Is ordered that this case be, as it is hereby DISMISSED,
with costs against plaintiffs."
A cursory reading of pars. 18 and 19 of the amended complaint with injunction and prayers (1)
and (2) thereof, reveals that appellants' first cause of action is composed of two parts, as
follows:
(a) A judicial declaration or recognition that appellants .Ruiz and Herrera, together with appellee
Panlilio, were the architects of the ​Veterans Hospital; and
(b) An injunction restraining the appellee government officials from paying their co-appellee
Panlilio the sum retained by the former, as per stipulation contained in the contract for the
construction of the hospital because “they will not only be deprived of the monetary value of the
services legally due them, but that their professional prestige and standing will be seriously
impaired”.
As appellants admitted, they no longer consider the Secretary and other officials of the
Department of National Defense, as parties-defendants in the ease, said officials can no longer
be compelled to recognize the appellants, Ruiz and Herrera, as co-architects with appellee
Panlilio of the Veterans Hospital. And, as the amount retained by the Department on the contract
price, which retention was authorized by the contract, was, as sought by the appellants, already
paid to the Allied Technologists, Inc., there is nothing more for the trial court to decide, even
without first ruling on the special defenses of appellees Panlilio and the corporation.
Moreover, by discarding the Secretary and other officials of the Department of National Defense,
as parties-defendants, appellants could hot expect the trial court to order them to recognize and
declare appellants as co-architects in the construction of the hospital. And this must be so,
because the construction, agreement expressly provides that the architect being contracted by
the Government was appellee Pablo Panlilio. The said agreement states that the same was
entered into by the government, party of the first part and "Allied Technologists, Inc. x x and Mr.
Pablo D. Panlilio, architect, hereinafter called the party of the second part" and "The Allied
Technologists, Inc. for rendering engineering' services and Mr. Pablo D. Panlilio, architect, for
rendering architect services". And the contract was signed for the Government by "Ramon
Magsaysay, Secretary of National Defense (party of the first part)," and "Allied Technologists,
Inc. as to By Enrique J. L. Ruiz, President, Contractor, Pablo D. Panlilio, Architect."
Appellants maintain that their claim for recognition is divisible and separable from their
allegations regarding the non-payment by the government of a portion of the architectural fees;
thereby concluding that what the lower court should have done, should have been merely to
order the striking out of the moot, portion of appellants cause of action, and should have
proceeded with .hearing their claim for recognition. But the allegations in pars. 18 and 19 of the
amended complaint, show otherwise. There is an indivisible and single cause of action which is
primarily to prevent payment exclusively to defendant Panlilio of the amount of P34,740.00,
which said appellants contend should be paid to appellee. Allied Technologists, Inc.; the matter
of recognizing them together with Pablo Panlilio as architects of the hospital, being merely
incidental thereto. The case of Pacal vs. Ramos, 81 Phil. 30, cited by appellants is not applicable.
In this case, the grounds for quo warrant are separable from the grounds for election
irregularities which are distinct and separate causes of action, entitling the petitioner to separate
and unrelated reliefs. These two grounds were alleged under separate paragraphs and they were
two independent actions improperly joined in one proceeding. In the case at bar, in one
paragraph, (par. 19 of the amended complaint), as first cause of action, the claim for recognition
is inseparably linked with their allegations regarding alleged threatened, payment of the
P34,740.00 to Panlilio alone, because "they will not only be deprived of the monetary value of
the services legally due them, but that their professional prestige and standing will be seriously
impaired". When the very defendant Allied Technologists, Inc. itself asserted in its answer to the
amended complaint, that the amount was paid to it, an assertion which was not at all denied,
plaintiffs-appellants' cause of action under said par. 19 dissipated entirely.
There is a veiled insinuation that appellants' thesis would fall under the provisions of the Rules on
declaratory relief, because appellants wanted merely a declaration of their rights in a contract in
which they were interested. The trial court, however, was correct in refusing to make such
declaration, because it was not necessary and proper under the circumstances (Sec. 6, Rule 66).
Appellants were not parties to the construction agreement. The sole object of the appeal is only
to secure for them a recognition, that they were allegedly the co-architects of Panlilio, in the
construction of the hospital, so as to enhance their professional prestige and not to impair their
standing. If this is the goal of appellants, a judicial declaration to that effect would seem
unnecessary. Let us ponder over the thought that a brilliant professional enjoys the respect and
esteem of his fellowmen, even without any court declaration of such fact, and that an
incompetent one may summon all the tribunals in the world, to proclaim his genius in vain.
But appellants invoke Article 21 of the Civil Code, which states—
"Any person who wilfully cause loss or injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter for the damages."
contending that the word "injury" in the said article, refers not only to any indeterminate right or
property, but also to honor or credit (I Tolentino Civ. Code, p. 67). It may be added, however,
that this article also envisions a. situation where a person has a legal right, and such right is
violated by another in a manner contrary to morals, good customs or public policy; it
presupposes losses or injuries, material or otherwise, which one may suffer as a result of said
violation. The pleadings do not show that damages were ever asked or alleged in connection with
this case, predicted upon the article aforecited. And under the facts and circumstances obtaining
in this case, one cannot plausibly sustain the contention that the failure or refusal to extend the
recognition, was an act contrary to morals, good customs or public policy.
In view hereof, the Order appealed from, is affirmed, with costs against plaintiffs-appellants.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon,
Regala​ and ​Makalintal, JJ.,​ concur.

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a. Breach of Promise

[ G.R. No. L-20089, December 26, 1964 ]

BEATRIZ P. WASSMER, PLAINTIFF AND APPELLEE, VS. FRANCISCO X.

VELEZ, DEFENDANT AND APPELLANT.

DECISION

BENGZON, J. P., J.:

The facts that culminated in this case started with dreams and hopes, followed by appropriate
planning and serious endeavors, but terminated in frustration and, what is worse, complete
public humiliation.
Francisco X. Velez and Beatriz P. Wassmer, following their mutual promise of love, decided to
get married and set September 4, 1954 as the big day. On September 2, 1954 Velez left this
note for his bride-to-be:
"Dear Bet-

Will have to postpone wedding. My mother oppose it. Am leaving on the

Convair today.

"Please do not ask too many people about the reason why. That would
only create a scandal.

Paquing"
 But the next day, September 3, he sent her the following telegram:

"NOTHING CHANGED REST ASSURED RETURNING VERY SOON

APOLOGIZE MAMA PAPA

LOVE

PAKING"
Thereafter Velez did not appear nor was he heard from again.
Sued by Beatriz for damages, Velez filed no answer and was declared in default. Plaintiff
adduced evidence before the clerk of court as commissioner, and on April 29, 1955, judgment
was rendered ordering defendant to pay plaintiff P2,000.00 as actual damages; P25,000.09 as
moral and exemplary damages; P2,500.00 as attorney's fees; and the costs.
On June 21, 1955 defendant filed a "petition for relief from orders, judgment and proceedings
and motion for new trial and reconsideration." Plaintiff moved to strike it out. But the court, on
August 2, 1955, ordered the parties and their attorneys to appear before it on August 23, 1955
"to explore at this stage of the proceedings the possibility of arriving at an amicable settlement."
It added that should any of them fail to appear "the petition for relief and the opposition thereto
will be deemed submitted for resolution."
On August 23, 1955 defendant failed to appear before the court. Instead, on the following day
his counsel filed a motion to defer for two weeks the resolution on defendant's petition for relief.
The counsel stated that he would confer with defendant in Cagayan de Oro City-the latter's
residence-on the possibility of an amicable settlement. The court granted two weeks counted
from August 25, 1955.
Plaintiff manifested on June 15, 1956 that the two weeks given by the court had expired on
September 8, 1955 but that defendant and his counsel had failed to appear.
Another chance for amicable settlement was given by the court in its order of July 6, 1956
calling the parties and their attorneys to appear on July 13, 1956. This time, however,
defendant's counsel informed the court that chances of settling the case amicably were nil.
On July 20, 1956 the court issued an order denying defendant's aforesaid petition. Defendant
has appealed to this Court.
In his petition of June 21,1956 in the court ​a ​quo defendant alleged excusable negligence as
ground to set aside the judgment by default. Specifically, it was stated that defendant filed no
answer in the belief that an amicable settlement was being negotiated.
A petition for relief from judgment on grounds of fraud, accident, mistake or excusable
negligence, must be duly supported by an affidavit of merit stating ​facts constituting a valid
defense. (Sec. 3, Rule 38, Rules of Court.) Defendant's affidavit of merits attached to his petition
of June 21, 1955 stated: "That he has a good and valid defense against plaintiff's cause of
action, his failure to marry the plaintiff as scheduled having been due to fortuitous event and/or
circumstances beyond his control". An affidavit of merits like this, stating mere conclusions or
opinions instead of ​facts is not valid. (Cortes vs. Co Bun Kim, 90 Phil., 167; Vaswani vs. P.
Tarachand Bros., 110 Phil., 521.)
Defendant, however, would contend that the affidavit of merits was in fact unnecessary, or a
mere surplusage, because the judgment sought to be set aside was null and void, it having
been based on evidence adduced before the clerk of court. In Province of Pangasinan vs.
Palisoc, L-16519, October 30, 1962, this Court pointed out that the procedure of designating the
clerk of court as commissioner to receive evidence is sanctioned by Rule 34 (now Rule 33) of
the Rules of Court. Now as to defendant's consent to said procedure, the same did not have to
be obtained for he was declared in default and thus had no standing in court (Velez vs. Ramas,
40 Phil., 787; Alano vs. Court of First Instance, 106 Phil., 445).
In support of his "motion for now trial and reconsideration," defendant asserts that the judgment
is contrary to law. The reason given is that "there is no provision of the Civil Code authorizing"
an action for breach of promise to marry. Indeed, our ruling in Hermosisima vs. Court of
Appeals, 109 Phil., 629, as reiterated in Estopa vs. Piansay (109 Phil, 640), is that "​mere breach
of a promise to marry" is not an actionable wrong. We pointed out that Congress deliberately
eliminated from the draft of the new Civil Code the provisions that would have it so.
It must not be overlooked, however, that the extent to which acts not contrary to law may be
perpetrated with impunity, is not limitless for Article 21 of said Code provides that "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 the damage".
The record reveals that on August 23, 1954 plaintiff and defendant applied for a license to
contract marriage, which was subsequently issued. (Exhs. A, A-1). Their wedding was set for
September 4, 1954. Invitations were printed and distributed to relatives, friends and
acquaintances (Tsn., 5; Exh. C). The bride-to-be's trousseau, party dresses and other apparel
for the important occasion were purchased (Tsn., 7-8). Dresses for the maid of honor and the
flower girl were prepared. A matrimonial bed, with accessories, was bought. Bridal showers
were given and gifts received (Tsn., 6; Exh. E). And then, with but two days before the wedding,
defendant, who was then 28 years old, simply left a note for plaintiff stating: "Will have to
postpone wedding-My mother opposes it . . ." He enplaned to his home city in Mindanao, and
the next day, the day before the wedding, he wired plaintiff: "Nothing changed rest assured
returning soon". But he never returned and was never heard from again.
Surely this is not a case of ​mere breach of promise to marry. As stated, mere breach of promise
to marry is not an actionable wrong. But to formally set a wedding and go through all the
above-described preparation, and publicity, only to walk out of it when the matrimony is about to
be solemnized, is quite different. This is palpably and unjustifiably contrary to good customs, for
which defendant must be held answerable in damages in accordance with Article 21 aforesaid.
Defendant urges in his afore-stated petition that the damages awarded were excessive. No
question is raised as to the award of actual damages. What defendant would really assert
hereunder is that the award of moral and exemplary damages, in the amount of P25,000.00,
should be totally eliminated.
Per express provision of Article 2219 (10) of the new Civil Code, moral damages are
recoverable in the cases mentioned in Article 21 of said Code. As to exemplary damages,
defendant contends that the same could not be adjudged against him because under Article
2232 of the new Civil Code the condition precedent is that "the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner". The argument is devoid of merit as
under the above-narrated circumstances of this case defendant clearly acted in a "wanton . . .
reckless [and] oppressive manner." This Court's opinion, however, is that considering the
particular circumstances of this case, P15,000.00 as moral and exemplary damages is deemed
to be a reasonable award.
Premises considered, with the above-indicated modification, the lower court's judgment is
hereby affirmed, with costs.
Bengzon, C. J., Bautista Angelo, Concepcion, Reyes, J. B. L., Barrera, Paredes, Dizon, Regala,
Makalintal,​ and ​Zaldivar, JJ.,​ concur.

R​ ​E​ ​S​ ​O​ ​L​ ​U​ ​T​ ​I​ ​O​ ​N

February 26, 1965
Bengzon, J. P., J.:
Defendant-appellant has filed a motion for reconsideration of this Court's decision promulgated
December 26, 1964. The only point movant raises is the alleged validity of his affidavit of merits
attached to his petition for relief in the lower court.
The affidavit of merits in question states "that he (defendant) has a good and valid defense, his
failure to marry plaintiff as scheduled having been due to a fortuitous event and/or
circumstances beyond his control." The movant contends that this is not a mere opinion or
conclusion but positive and categorical statement of a valid defense; that it states there are
fortuitous events, i.e., fortuitous ​facts​, which defendant puts forward as a valid defense. The
previous rulings of this Court, movant further contends, held invalid only affidavits of merits that
disclosed no defense.
The rulings of this Court require affidavits of merits to state not mere conclusions or opinions but
facts (Vaswani vs. Tarachand Bros., 110 Phil., 521). An affidavit is a statement under oath of
facts. Defendant's affidavit of merits stated no facts, but merely an inference that defendant's
failure was due to fortuitous events and/or circumstances beyond his control. This is a
conclusion of fact, not a fact.
An affidavit of merits is required to avoid waste of the court's time if the defense turns out to be
ineffective (Vda. de Yulo vs. Chua Chuco, 87 Phil., 448; 48 Off. Gaz., 554, 555). Statements too
vague or merely general do not-as movant admits-serve the afore-stated purpose.
Defendant's affidavit of merits provides no means for the court to see the merits of his defense
and determine whether reopening the case would be worth its time. Said affidavit revealed
nothing of the "event" or "circumstances" constituting the defense. It stated, in substance, only
defendant's ​opinion that the event was "fortuitous" and that the circumstances were "beyond his
control"; and his conclusion that his failure to marry plaintiff on schedule was "due to" them. The
court, not the defendant, should form such opinions and draw such ​conclusions on the basis of
facts provided in the affidavit. As it is, defendant's affidavit leaves the court guessing as to the
facts.
Conformably to previous rulings of this Court, therefore, the affidavit of merits aforementioned is
not valid. To repeat, it states a conclusion of fact, not facts themselves; it leaves the court
guessing as to the facts; it provides no basis for determining the probable merits of the defense
as a justification for reopening the case.
WHEREFORE​, the motion for reconsideration is hereby denied.
SO ORDERED.
Bengzon, C. J., Bautista Angelo, Concepcion, Reyes, J. B. L., Barrera, Paredes, Dizon, Regala,
Makalintal​ and ​Zaldivar, JJ.,​ concur.

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[ G.R. No. L-18630, December 17, 1966 ]

APOLONIO TANJANCO, PETITIONER, VS. HON. COURT OF APPEALS AND

ARACELI SANTOS, RESPONDENTS.

DECISION

REYES, J.B.L., J.:

Appeal from a decision of the Court of Appeals (in its Case No. 27210-R) revoking an order of
the Court of First Instance of Rizal (in Civil Case No. Q-4797) dismissing appellant's action for
support and damages.
The essential allegations of the complaint are to the effect that, from December, 1957, the
defendant (appellee herein), Apolonio Tanjanco , courted the plaintiff, Araceli Santos, both
being of adult age; that "defendant expressed and professed his undying love and affection for
plaintiff who also in due time reciprocated the tender feelings"; that in consideration of
defendant1 s promises of marriage plaintiff consehted and acceded to defendant's pleas for
carnal knowledge; that regularly until December 1959, through his protestations of love and
promises of marriage, defendant succeeded in having carnal access to plaintiff, as a result of
which the latter conceived a child; that due to her pregnant condition, to avoid embarrassment
and social humiliation, plaintiff had to resign her job as secretary in IBM Philippines, Inc., where
she was receiving P230.00 a month; that thereby plaintiff became unable to support herself and
her baby; that due to defendant's refusal to marry plaintiff, as promised, the latter suffered
mental anguish, besmirched reputation, wounded feelings, moral shock, and social humiliation.
The prayer was for a decree compelling the defendant to recognize the unbom child that plaintiff
was bearing; to pay her not less than P430.00 a month for her support and that of her baby,
plus P100,000.00 in moral and exemplary damages, plus P10,000.00 attorney's fees.
Upon defendant's motion to dismiss, the court of first instance dismissed the complaint for
failure to state a cause of action.
Plaintiff Santos duly appealed to the Court of Appeals, and the latter ultimately decided the
case, holding with the lower court that no cause of action was shown to compel recognition of a
child as yet unborn, nor for its support, but decreed that the complaint did state a cause of
action for damages, premised on Article 21 of the Civil Code of the Philippines, prescribing as
follows:
"ART. 21. 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 the damage."
The Court of Appeals, therefore, entered judgment setting aside the dismissal and directing the
court of origin to proceed with the case.
Defendant, in turn, appealed to this Court, pleading that actions for breach of a promise to marry
are not permissible in this jurisdiction, and invoking the rulings of this Court in Estopa vs.
Piansay, L-14733, September 30, 1960; Hermosisima vs. Court of Appeals, L-14628, January
29, 1962; and De Jesus vs. SyQuia, 58 Phil. 886.
We find this appeal meritorious.
In holding that the complaint stated a cause of action for damages, under Article 21 above
mentioned, the Court of Appeals relied upon and quoted from the memorandum submitted by
the Code Commission to the Legislature in 1949 to support the original draft of the Civil Code.
Referring to Article 23 of the draft (now Article 21 of the Code), the Commission stated:
"But the Code Commission has gone farther than the sphere of wrongs defined or determined
by positive law. Fully sensible that there are countless gaps in the statutes, which leave so
many victims of moral wrongs helpless, even though they have actually suffered material and
moral injury, the Commission has deemed it necessary, in the interest of justice, to incorporate
in the proposed Civil Code the following rule:
'ART. 23. 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 the damage.'
"An example will illustrate the purview of the foregoing norm: 'A' seduces the nineteen-year old
daughter of 'X'. A promise of marriage either has not been made, or can not be proved. The girl
becomes pregnant. Under the present laws, there is no crime, as the girl is above eighteen
years of age. Neither can any civil action for breach of promise of marriage be filed. Therefore,
though the grievous moral wrong has been committed, and though the girl and her family have
suffered incalculable moral damage, she and her parents cannot bring any action for damages.
But under the proposed article, she and her parents would have such a right of action."
The Court of Appeals seems to have overlooked that the example set forth in the Code
Commission's memorandum refers to a tort upon a minor who has been ​seduced​. The essential
feature is seduction, that in law is more than mere sexual intercourse, or a breach of a promise
of marriage; it connotes essentially the idea of deceit, enticement, superior power or abuse of
confidence on the part of the seducer to which the woman has yielded (U.S. vs. Buenaventura,
27 Phil. 121; U. S. vs. Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra) that —
"To constitute seduction there must in all cases be some sufficient promise or Inducement ​and
the woman must yield because of the promise or other inducement​. If she consents merely from
carnal lust and the intercourse is from mutual desire, there is no seduction (43 Cent Dig. tit.
Seduction, par. 56). She must be induced to depart from the path of virtue by the use of some
species of arts, persuasions and wiles, which are calculated to have and do have that effect,
and which result in her ultimately submitting her person to the sexual embraces of her seducer"
(27 Phil. 123).
And in American Jurisprudence we find:
"On the other hand, in an action by the woman, the enticement, persuasion or deception is the
essence of the injury; and a mere proof of intercourse is insufficient to warrant a recovery.
Accordingly it is not seduction where the willingness arises out of sexual desire or curiosity of
the female, and the defendant merely affords her the needed opportunity for the commission of
the act. It has been emphasized that to allow a recovery in all such cases would tend to the
demoralization of the female sex, and would be a reward for unchastity by which a class of
adventuresses would be swift to profit." (47 Am. Jur. 662)
Bearing these principles in mind, let us examine the complaint. The material allegations there
are as follows:
"I. That the plaintiff is of legal age, single, and residing at 56 South E. Diliman, Quezon
City,while defendant is also of legal age, single and residing at 525 Padre Faura, Manila,where
he may be served with summons;
II. That the plaintiff and the defendant became acquainted with each other sometime in
December, 1957 and soon thereafter, the defendant started visiting and courting the plaintiff;
III. That the defendant's visits were regular and frequent and in due time the defendant
expressed and professed his undying love and affection for the plaintiff who also in due time
reciprocated the tender feelings;
IV. That in the course of their engagement, the plaintiff and the defendant as are wont of young
people in love had frequent outings and dates, became very close and intimate to each other
and sometime in July, 1958, in consideration of the defendant's promises of marriage, the
plaintiff consented and acceded to the former's earnest and repeated pleas to have carnal
knowledge with him;
V. That subsequent thereto and regularly until about July, 1959 except for a short period in
December, 1958 when the defendant was out of the country, the defendant through his
protestations of love and promises of marriage succeeded in having carnal knowledge with the
plaintiff;
VI. That as a result of their intimate relationship, the plaintiff started conceiving which was
confirmed by a doctor sometime in July, 1959;
VII. That upon being certain of her pregnant condition, the plaintiff informed the defendant and
pleaded with him to make good his promises of marriage, but instead of honoring his promises
and righting his wrong, the defendant stopped and refrained from seeing the plaintiff, since
about July, 1959 has not visited the plaintiff and to all intents and purposes has broken their
engagement and his promises."
Over and above the partisan allegations, the facts stand out that for one whole year, from 1958
to 1959, the plaintiff-appellee, a woman of adult age, maintained intimate sexual relations with
appellant, with repeated acts of intercourse. Such conduct is incompatible with the idea of
seduction. Plainly there is here voluntariness and mutual passion; for had the appellant been
deceived, had she surrendered exclusively because of the deceit, artful persuasions and wiles
of the defendant, she would not have again yielded to his embraces, much less for one year,
without exacting early fulfillment of the alleged promises of marriage, and would have cut short
all sexual relations upon finding that defendant did not intend to fulfil his promises. Hence, we
conclude that no case is made under Article 21 of the Civil Code, and no other cause of action
being alleged, no error was committed by the Court of First Instance in dismissing the complaint.
Of course, the dismissal must be understood as without prejudice to whatever actions may
correspond to the child of the plaintiff against the defendant-appellant, if any. On that point, this
Court makes no pronouncement, since the child's own rights are not here involved.
FOR THE FOREGOING REASONS​, the decision of the Court of Appeals is reversed, and that
of the Court of First Instance is affirmed. No costs.
Concepcion, C.J., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar, Sanchez and
Ruiz Castro, JJ.​ , concur.

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[ G.R. No. 101749, July 10, 1992 ]

CONRADO BUNAG, JR., PETITIONER, VS. HON. COURT OF APPEALS,

FIRST DIVISION, AND ZENAIDA B. CIRILO, RESPONDENTS.

DECISION

REGALADO, J.:

Petitioner appeals for the reversal of the decision​[1] of respondent Court of Appeals promulgated
on May 17, 1991 in CA-G.R. CV No. 07054, entitled "Zenaida B. Cirilo vs. Conrado Bunag, Sr.
and Conrado Bunag, Jr.," which affirmed ​in ​toto the decision of the Regional Trial Court, Branch
XI at Bacoor, Cavite, and, implicitly, respondent court's resolution of September 3, 1991​[2]
denying petitioner's motion for reconsideration.
Respondent court having assiduously discussed the salient antecedents of this case, vis-a-vis
the factual findings of the court below, the evidence of record and the contentions of the parties,
it is appropriate that its findings, which we approve and adopt, be extensively reproduced
hereunder:
"Based on the evidence on record, the following facts are considered indisputable. On the
afternoon of September 8, 1973, defendant-appellant Bunag, Jr. brought plaintiff-appellant to a
motel or hotel where they had sexual intercourse. Later that evening, said defendant-appellant
brought plaintiff-appellant to the house of his grandmother Juana de Leon in Pamplona, Las
Piñas, Metro Manila, where they lived together as husband and wife for 21 days, or until
September 29, 1973. On September 10, 1973, defendant-appellant Bunag, Jr. and
plaintiff-appellant filed their respective applications for a marriage license with the Office of the
Local Civil Registrar of Bacoor, Cavite. On October 1, 1973, after leaving plaintiff-appellant,
defendant-appellant Bunag, Jr. filed an affidavit withdrawing his application for a marriage
license.
"Plaintiff-appellant contends that on the afternoon of September 8, 1973, defendant-appellant
Bunag, Jr., together with an unidentified male companion, abducted her in the vicinity of the San
Juan de Dios Hospital in Pasay City and brought her to a motel where she was raped. The court
a​ ​quo​, which adopted her evidence, summarized the same which we paraphrased as follows:
“Plaintiff was 26 years old on November 5, 1974 when she testified, single and had finished a
college course in Commerce (t.s.n., p. 4, Nov. 5, 1974). It appears that on September 8, 1973,
at about 4:00 o'clock in the afternoon, while she was walking along Figueras Street, Pasay City
on her way to the San Juan de Dios Canteen to take her snack, defendant, Conrado Bunag, Jr.,
came riding in a car driven by a male companion. Plaintiff and defendant Bunag, Jr. were
sweethearts, but two weeks before September 8, 1973, they had a quarrel, and Bunag, Jr.,
wanted to talk matters over with plaintiff, so that he invited her to take their merienda at the
Aristocrat Restaurant in Manila instead of at the San Juan de Dios Canteen, to which plaintiff
obliged, as she believed in his sincerity (t.s.n., pp. 8-10, Nov. 5, 1974).
‘Plaintiff rode in the car and took the front seat beside the driver while Bunag, Jr. seated himself
by her right side. The car travelled north on its way to the Aristocrat Restaurant but upon
reaching San Juan Street in Pasay City, it turned abruptly to the right, to which plaintiff
protested, but which the duo ignored and instead threatened her not to make any noise as they
were ready to die and would bump the car against the post if she persisted. Frightened and
silenced, the car travelled its course thru F.B. Harrison Boulevard until they reached a motel.
Plaintiff was then pulled and dragged from the car against her will, and amidst her cries and
pleas. In spite of her struggle she was no match to the joint strength of the two male combatants
because of her natural weakness being a woman and her small stature. Eventually, she was
brought inside the hotel where the defendant Bunag, Jr. deflowered her against her will and
consent. She could not fight back and repel the attack because after Bunag, Jr. had forced her
to lie down and embraced her, his companion held her two feet, removed her panty, after which
he left. Bunag, Jr. threatened her that he would ask his companion to come back and hold her
feet if she did not surrender her womanhood to him, thus he succeeded in feasting on her
virginity. Plaintiff described the pains she felt and how blood came out of her private parts after
her vagina was penetrated by the penis of the defendant Bunag, Jr. (t.s.n. pp. 17-24, Nov. 5,
1974).
‘After that outrage on her virginity, plaintiff asked Bunag, Jr. once more to allow her to go home
but the latter would not consent and stated that he would only let her go ​after they were married
as he intended to marry her, so much so that she promised not to make any scandal a ​ nd to
marry him. Thereafter, they took a taxi together after the car that they used had already gone,
and proceeded to the house of Juana de Leon, Bunag, Jr.'s grandmother in Pamplona, Las
Piñas, Metro Manila where they arrived at 9:30 o'clock in the evening (t.s.n., p. 26, Nov. 5,
1974). At about ten (10) o'clock that same evening, defendant Conrado Bunag, Sr., father of
Bunag, Jr. arrived and assured plaintiff that the following day which was a Monday, she and
Bunag, Jr. would go to Bacoor, to apply for a marriage license, which they did. They filed their
applications for marriage license (Exhibits 'A' and 'C') and after that plaintiff and defendant
Bunag, Jr. returned to the house of Juana de Leon and lived there as husband and wife from
September 8, 1973 to September 29, 1973.
‘On September 29, 1973 defendant Bunag, Jr. left and never returned, humiliating plaintiff and
compelled her to go back to her parents on October 3, 1973. Plaintiff was ashamed when she
went home and could not sleep and eat because of the deception done against her by
defendants-appellants (t.s.n., p. 35, Nov. 5, 1974).
'The testimony of plaintiff was corroborated ​in ​toto by her uncle, Vivencio Bansagan who
declared that on September 8, 1973 when plaintiff failed to arrive home at 9:00 o'clock in the
evening, his sister who is the mother of plaintiff asked him to look for her but his efforts proved
futile, and he told his sister that plaintiff might have married (baka nag-asawa, t.s.n., pp. 5-6,
March 18, 1976). However, in the afternoon of the next day (Sunday), his sister told him that
Francisco Cabrera, accompanied by barrio captain Jacinto Manalili of Ligas, Bacoor, Cavite,
informed her that plaintiff and Bunag, Jr. were in Cabrera's house, so that her sister requested
him to go and see the plaintiff, which he did, and at the house of Mrs. Juana de Leon in
Pamplona, Las Piñas, Metro Manila he met defendant Conrado Bunag, Sr., who told him, 'Pare,
the children are here already. Let us settle the matter and have them married'.
'He conferred with plaintiff who told him that as she had already lost her honor, she would bear
her sufferings as Boy Bunag, Jr. and his father promised they would be married.'
“Defendants-appellants, on the other hand, deny that defendant-appellant Conrado Bunag, Jr.
abducted and raped plaintiff-appellant on September 8, 1973. On the contrary, plaintiff-appellant
and defendant-appellant Bunag, Jr. eloped on that date because of the opposition of the latter's
father to their relationship.
"Defendants-appellants claim that defendant-appellant Bunag, Jr. and plaintiff-appellant had
earlier made plans to elope and get married, and this fact was known to their friends, among
them, Architect Chito Rodriguez. The couple made good their plans to elope on the afternoon of
September 8, 1973, when defendants-appellant Bunag, Jr., accompanied by his friend
Guillermo Ramos, Jr., met plaintiff-appellant and her officemate named Lydia in the vicinity of
the San Juan de Dios Hospital. The foursome then proceeded to (the) aforesaid hospital's
canteen where they had some snacks. Later, Guillermo Ramos, Jr. took Lydia to Quirino
Avenue where she could get a ride home, thereby leaving the defendant-appellant Bunag, Jr.
and plaintiff-appellant alone. According to defendant-appellant Bunag, Jr., after Guillermo
Ramos, Jr., and Lydia left, he and plaintiff-appellant took a taxi to the Golden Gate and
Flamingo Hotels where they tried to get a room, but these were full. They finally got a room at
the Holiday Hotel, where defendant-appellant registered using his real name and residence
certificate number. Three hours later, the couple checked out of the hotel and proceeded to the
house of Juana de Leon at Pamplona, Las Piñas, where they stayed until September 19, 1973.
Defendant-appellant claims that bitter disagreements with plaintiff-appellant over money and the
threats made to his life prompted him to break off their plan to get married.
"During this period, defendant-appellant Bunag, Sr. denied having gone to the house of Juan de
Leon and telling plaintiff-appellant that she would be wed to defendant-appellant Bunag, Jr. In
fact, he phoned Atty. Conrado Adreneda, member of the board of directors of Mandala
Corporation, defendant-appellant Bunag, Jr.'s employer, three times between the evening of
September 8, 1973 and September 9, 1973 inquiring as to the whereabouts of his son. He came
to know about his son's whereabouts when he was told of the couple's elopement late in the
afternoon of September 9, 1973 by his mother Candida Gawaran. He likewise denied having
met relatives and emissaries of plaintiff-appellant and agreeing to her marriage to his son.​[3]
A complaint for damages for alleged breach of promise to marry was filed by herein private
respondent Zenaida B. Cirilo against petitioner Conrado Bunag, Jr. and his father, Conrado
Bunag, Sr., as Civil Case No. N-2028 of the Regional Trial Court, Branch XIX at Bacoor, Cavite.
On August 20, 1983, on a finding, ​inter ​alia​, that petitioner had forcibly abducted and raped
private respondent, the trial court rendered a decision​[4] ordering petitioner Bunag, Jr. to pay
private respondent P80,000.00 as moral damages, P20,000.00 as exemplary damages,
P20,000.00 by way of temperate damages, and P10,000.00 for and as attorney's fees, as well
as the costs of suit. Defendant Conrado Bunag, Sr. was absolved from any and all liability.
Private respondent appealed that portion of the lower court's decision disculpating Conrado
Bunag, Sr. from civil liability in this case. On the other hand, the Bunags, as
defendants-appellants, assigned in their appeal several errors allegedly committed by the trial
court, which were summarized by respondent court as follows: (1) in finding that
defendant-appellant Conrado Bunag, Jr. forcibly abducted and raped plaintiff-appellant; (2) in
finding that defendants-appellants promised plaintiff-appellant that she would be wed to
defendant-appellant Conrado Bunag, Jr.; and (3) in awarding plaintiff-appellant damages for the
breach of defendants-appellants’ promise of marriage.​[5]
As stated at the outset, on May 17, 1991 respondent Court of Appeals rendered judgment
dismissing both appeals and affirming ​in ​toto the decision of the trial court. His motion for
reconsideration having been denied, petitioner Bunag, Jr. is before us on a petition for review,
contending that (1) respondent court failed to consider vital exhibits, testimonies and incidents
for petitioner's defense, resulting in the misapprehension of facts and violative of the law on
preparation of judgments; and (2) it erred in the application of the proper law and jurisprudence
by holding that there was forcible abduction with rape, not just a simple elopement and an
agreement to marry, and in the award of excessive damages.​[6]
Petitioner Bunag, Jr. first contends that both the trial and appellate courts failed to take into
consideration the alleged fact that he and private respondent had agreed to marry, and that
there was no case of forcible abduction with rape, but one of simple elopement and agreement
to marry. It is averred that the agreement to marry has been sufficiently proven by the
testimonies of the witnesses for both parties and the exhibits presented in court.
This submission, therefore, clearly hinges on the credibility of the witnesses and evidence
presented by the parties and the weight accorded thereto in the factual findings of the trial court
and the Court of Appeals. In effect, what petitioner would want this Court to do is to evaluate
and analyze anew the evidence, both testimonial and documentary, presented before and
calibrated by the trial court, and as further meticulously reviewed and discussed by respondent
court.
The issue raised primarily and ineluctably involves questions of fact. We are, therefore, once
again constrained to stress the well-entrenched statutory and jurisprudential mandate that
findings of fact of the Court of Appeals are, as a rule, conclusive upon this Court. Only questions
of law, distinctly set forth, may be raised in a petition for review on ​certiorari under Rule 45 of
the Rules of Court, subject to clearly settled exceptions in case law.
Our jurisdiction in cases brought to us from the Court of Appeals is limited to reviewing and
revising the errors of law imputed to the latter, its findings of fact being conclusive. This Court
has emphatically declared that it is not its function to analyze or weigh such evidence all over
again, its jurisdiction being limited to reviewing errors of law that might have been committed by
the lower court. Barring, therefore, a showing that the findings complained of are totally devoid
of support in the record, or that they are so glaringly erroneous as to constitute serious abuse of
discretion, such findings must stand, for this Court is not expected or required to examine or
contrast the oral and documentary evidence submitted by the parties.​[7] Neither does the instant
case reveal any feature falling within any of the exceptions which under our decisional rules
may warrant a review of the factual findings of the Court of Appeals. On the foregoing
considerations and our review of the records, we sustain the holding of respondent court in
favor of private respondent.
Petitioner likewise asserts that since the action involves a breach of promise to marry, the trial
court erred in awarding damages.
It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of
promise to marry has no standing in the civil law, apart from the right to recover money or
property advanced by the plaintiff upon the faith of such promise.​[8] Generally, therefore, a
breach of promise to marry ​per ​se is not actionable, except where the plaintiff has actually
incurred expenses for the wedding and the necessary incidents thereof.
However, the award of moral damages is allowed in cases specified in or analogous to those
provided in Article 2219 of the Civil Code. Correlatively, under Article 21 of said Code, in relation
to paragraph 10 of said Article 2219, 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 moral damages.​[9] Article 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, and is intended to vouchsafe adequate legal remedy for that untold
number of moral wrongs which is impossible for human foresight to specifically provide for in the
statutes.​[10]
Under the circumstances obtaining in the case at bar, the acts of petitioner in forcibly abducting
private respondent and having carnal knowledge with her against her will, and thereafter
promising to marry her in order to escape criminal liability, only to thereafter renege on such
promise after cohabiting with her for twenty-one days, irremissibly constitute acts contrary to
morals and good customs. These are grossly insensate and reprehensible transgressions which
indisputably warrant and abundantly justify the award of moral and exemplary damages,
pursuant to Article 21 in relation to paragraphs 3 and 10, Article 2219, and Articles 2229 and
2234 of the Civil Code.
Petitioner would, however, belabor the fact that said damages were awarded by the trial court
on the basis of a finding that he is guilty of forcible abduction with rape, despite the prior
dismissal of the complaint therefor filed by private respondent with the Pasay City Fiscal's
Office.
Generally, the basis of civil liability from crime is the fundamental postulate of our law that every
person criminally liable for a felony is also civilly liable. In other words, 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.​[11] Hence, 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 fast from which the civil might arise did not exist.​[12]
In the instant 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. Consequently, the
dismissal did not in any way affect the right of herein private respondent to institute a civil action
arising from the offense because such preliminary dismissal of the penal action did not carry
with it the extinction of the civil action.
The reason most often given for this holding is that the two proceedings involved are not
between the same parties. Furthermore, it has long been emphasized, with continuing validity
up to now, that there are different rules as to the competency of witnesses and the quantum of
evidence in criminal and civil proceedings. In a criminal action, the State must prove its case by
evidence which shows the guilt of the accused beyond reasonable doubt, while in a civil action it
is sufficient for the plaintiff to sustain his cause by preponderance of evidence only.​[13] Thus, in
Rillon​, ​et ​al​. ​vs​. ​Rillon​,[14]
​ we stressed that it is not now necessary that a criminal prosecution for
rape be first instituted and prosecuted to final judgment before a civil action based on said
offense in favor of the offended woman can likewise be instituted and prosecuted to final
judgment.
WHEREFORE​, the petition is hereby DENIED for lack of merit, and the assailed judgment and
resolution are hereby AFFIRMED.
SO ORDERED.

​ nd​ Padilla, JJ., c​ oncur​.

Narvasa, C.J., (Chairman), a
Nocon, J., ​no part.

[1]
Penned by Presiding Justice Rodolfo A. Nocon, with Associate Justices Antonio M. Martinez
and Asaali S. Isnani, concurring; Annex A, Petition; ​Rollo,​ 14.
[2]​
​Rollo,​ 24-26.
[3]​
​Ibid.​ , 15-19.
[4]​
​Ibid.​ , 27-57; Annex C, Petition; per Executive Judge Ildefonso M. Bleza.
[5]​
​Ibid.​ , 15.
[6]​
​Ibid.​ , 7.
[7]​
Morales ​vs​. Court of Appeals, et al., 197 SCRA 391 (1991).
[8]​
De Jesus, et al. ​vs.​ Syquia, 58 Phil. 866 (1933).
[9]​
Ford ​vs.​ Court of Appeals, et al., 186 SCRA 21 (1990).
[10]
Globe Mackay Cable and Radio Corp., et al. ​vs.​ Court of Appeals, et al., 176 SCRA 778
(1989).
[11]​
Calalang, et al. ​vs​. Intermediate Appellate Court, et al., 194 SCRA 514 (1991).
[12]
Sec. 2(b), Rule 111, 1985 Rules of Criminal Procedure; Faraon, et al. ​vs​. Prieta, 24 SCRA
582 (1968).
[13]​
Ocampo, et al. ​vs.​ Jenkins, et al., 14 Phil. 681 (1909).
[14]​
107 Phil. 783 (1960).
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[ G.R. No. 57227, May 14, 1992 ]

AMELITA CONSTANTINO AND MICHAEL CONSTANTINO, THE LATTER

REPRESENTED HEREIN BY THE FORMER, HIS MOTHER AND NATURAL
GUARDIAN, PETITIONERS, VS. IVAN MENDEZ AND THE HONOR​ABLE
COURT OF APPEALS, RESPONDENTS.

DECISION

BIDIN, J.:

This is a petition for review on ​certiorari questioning the decision​* dated April 30, 1981 of the
Court of Appeals in CA-G.R. No. 61552-R which dismissed petitioner’s complaint and set aside
the resolution​** dated October 21, 1976 of the then Court of First Instance of Davao, 16th
Judicial District, amending the dispositive portion of its decision dated June 21, 1976 and
ordering private respondent Ivan Mendez: (1) to acknowledge the minor Michael Constantino as
his illegitimate child; (2) to give a monthly support of P300.00 to the minor child; (3) to pay
complainant Amelita Constantino the sum of P8,200.00 as actual and moral damages; and (4)
to pay attorney’s fees in the sum of P5,000 plus costs.
It appears on record that on June 5, 1975, petitioner Amelita Constantino filed an action for
acknowledgment, support and damages against private respondent Ivan Mendez. The case was
filed with the then CFI of Davao, 10th Judicial District and docketed as Civil Case No. 8881. In
her complaint, Amelita Constantino alleges, among others, that sometime in the month of
August, 1974, she met Ivan Mendez at Tony’s Restaurant located at Sta. Cruz, Manila, where
she worked as a waitress; that the day following their first meeting, Ivan invited Amelita to dine
with him at Hotel Enrico where he was billeted; that while dining, Ivan professed his love and
courted Amelita; that Amelita asked for time to think about Ivan’s proposal; that at about 11:00
o’clock in the evening, Amelita asked Ivan to bring her home to which the latter agreed, that on
the pretext of getting something, Ivan brought Amelita inside his hotel room and through a
promise of marriage succeeded in having sexual intercourse with the latter; that after the sexual
contact, Ivan confessed to Amelita that he is a married man; that they repeated their sexual
contact in the months of September and November, 1974, whenever Ivan is in Manila, as a
result of which Amelita got pregnant; that her pleas for help and support fell on deaf ears; that
Amelita had no sexual relations with any other man except Ivan who is the father of the child yet
to be born at the time of the filing of the complaint; that because of her pregnancy, Amelita was
forced to leave her work as a waitress; that Ivan is a prosperous businessman of Davao City
with a monthly income of P5,000 to P8,000. As relief, Amelita prayed for the recognition of the
unborn child, the payment of actual, moral and exem​plary damages, attorney’s fees plus costs.
In his answer dated August 5, 1975, Ivan admitted that he met Amelita at Tony’s Cocktail
Lounge but denied having sexual knowledge or illicit relations with her. He prayed for the
dismissal of the complaint for lack of cause of action. By way of counterclaim, he further prayed
for the payment of exemplary damages and litigation expense including attorney’s fees for the
filing of the malicious complaint.
On September 1, 1975, Amelita Constantino filed a motion for leave to amend the complaint
impleading as co-plaintiff her son Michael Constantino who was born on August 3, 1975. In its
order dated September 4, 1975, the trial court admit​ted the amended complaint.
On September 11, 1975, Ivan Mendez filed his answer to the amended complaint reiterating his
previous answer denying that Michael Constantino is his illegitimate son.
After hearing, the trial court rendered a decision dated June 21, 1976, the dispositive portion of
which reads, ​viz​:
“WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of plaintiff
Amelita Constantino and against defendant Ivan Mendez, ordering the latter to pay Amelita
Constan​tino the sum of P8,000.00 by way of actual and moral damages; and, the sum of
P3,000.00, as and by way of attorney’s fees. The defendant shall pay the costs of this suit.
SO ORDERED.”
From the above decision, both parties filed their separate motion for reconsideration. Ivan
Mendez anchored his motion on the ground that the award of damages was not supported by
evidence. Amelita Constantino, on the other hand, sought the recognition and support of her
son Michael Constantino as the illegitimate son of Ivan Mendez.
In its resolution dated October 21, 1976, the trial court granted Amelita Constantino’s motion for
reconsideration, and amended the dispositive portion of its decision dated June 21, 1976 to
read as follows, ​viz​:
“WHEREFORE, in view of the foregoing, judg​ment is hereby rendered in favor of plaintiff
Amelita Constantino and plaintiff-minor Michael Constantino, and against defendant Ivan
Mendez ordering the latter to pay Amelita Constantino the sum of P8,000.00 by way of actual
and moral damages and the sum of P200.00 as and by way of payment of the hospital and
medical bills incurred during the delivery of plaintiff-minor Michael Constantino; to recognize as
his own illegitimate child the plaintiff-minor Michael Constantino who shall be entitled to all the
rights, privileges and benefits appertaining to a child of such status; to give a permanent
monthly support in favor of plaintiff Michael Constantino the amount of P300.00; and the sum of
P5,000.00, as and by way of attorney’s fees. The defendant shall pay the costs of this suit.
Let this Order form part of the decision dated June 21, 1976.
SO ORDERED.”
On appeal to the Court of Appeals, the above amended decision was set aside and the
complaint was dismissed. Hence, this petition for review.
Basically, the issue to be resolved in the case at bar is whether or not the Court of Appeals
committed a reversible error in setting aside the decision of the trial court and in dismissing the
complaint.
Petitioners contend that the Court of Appeals erred in reversing the factual findings of the trial
court and in not affirming the decision of the trial court. They also pointed out that the appellate
court committed a misapprehen​sion of facts when it concluded that Ivan did not have sexual
access with Amelita during the first or second week of November, 1976 (should be 1974), the
time of the conception of the child.
It must be stressed at the outset that factual findings of the trial court have only a persuasive
and not a conclu​sive effect on the Court of Appeals. In the exercise of its appellate jurisdiction, it
is the duty of the Court of Appeals to review the factual findings of the trial court and rectify the
errors it committed as may have been properly assigned and as could be established by a
re-examination of the evidence on record. It is the factual findings of the Court of Appeals, not
those of the trial court, that as a rule are considered final and conclusive even on this Court
(Hermo v. Hon. Court of Appeals, et al., 155 SCRA 24 [1987]). This being a petition for ​certiorari
under Rule 45 of the Rules of Court, this Court will review only errors of law committed by the
Court of Appeals. It is not the function of this Court to re-examine all over again the oral and
documentary evidence submitted by the parties unless the findings of facts of the Court of
Appeals is not sup​ported by the evidence on record or the judgment is based on
misapprehension of facts (Remalante v. Tibe, et al., 158 SCRA 138 [1988]; Hernandez v. Court
of Appeals, et al., 149 SCRA 97 [1987]).
It is the conclusion of the Court of Appeals, based on the evidence on record, that Amelita
Constantino has not proved by clear and convincing evidence her claim that Ivan Mendez is the
father of her son Michael Constantino. Such conclusion based on the evaluation of the evidence
on record is controlling on this Court as the same is supported by the evidence on record. Even
the trial court initially entertained such posture. It ordered the recognition of Michael as the
illegitimate son of Ivan only when acting on the mo​tions for reconsideration, it reconsidered, on
October 21,1976, its earlier decision dated June 21, 1976. Amelita’s testimony on
cross-examination that she had sexual contact with Ivan in Manila in the first or second week of
November, 1974 (TSN, December 8, 1975, p. 108) is inconsistent with her response that she
could not remember the date of their last sexual intercourse in November, 1974 (Ibid, p. 106).
Sexual contact of Ivan and Amelita in the first or second week of November, 1974 is the crucial
point that was not even established on direct examination as she merely testi​fied that she had
sexual intercourse with Ivan in the months of September, October and November, 1974.
Michael Constantino is a full-term baby born on August 3, 1975 (Exhibit 6) so that as correctly
pointed out by private respondent’s counsel, citing medical science (Williams Obstetrics, Tenth
Ed., p. 198) to the effect that “the mean duration of actual pregnancy, counting from the day of
conception must be close to 267 days”, the conception of the child (Michael) must have taken
place about 267 days before August 3, 1975 or sometime in the second week of November,
1974. While Amelita testified that she had sexual contact with Ivan in November, 1974,
nevertheless said testi​mony is contradicted by her own evidence (Exh. F), the letter dated
February 11, 1975, addressed to Ivan Mendez requesting for a conference, prepared by her
own counsel Atty. Roberto Sarenas to whom she must have confided the attendant
circumstances of her pregnancy while still fresh in her memory, informing Ivan that Amelita is
four (4) months pregnant so that applying the period of the duration of actual pregnancy, the
child was conceived on or about October 11, 1974.
Petitioner’s assertion that Ivan is her first and only boyfriend (TSN, December 8, 1975, p. 65) is
belied by Exhibit 2, her own letter addressed to Mrs. Mendez where she revealed the reason for
her attachment to Ivan who possessed certain traits not possessed by her boyfriend. She also
confided that she had a quarrel with her boyfriend because of gossips so she left her work. An
order for recognition and support may create an unwholesome atmosphere or may be an irritant
in the family or lives of the parties so that it must be issued only if paternity or filiation is
established by clear and convincing evidence. The burden of proof is on Amelita to establish her
affirmative allegations that Ivan is the father of her son. Consequently, in the absence of clear
and convincing evidence establishing paternity or filiation, the complaint must be dismissed.
As regards Amelita’s claim for damages which is based on Articles19​* & 21​** of the Civil Code
on the theory that through Ivan’s promise of marriage, she surrendered her vir​ginity, we cannot
but agree with the Court of Appeals that mere sexual intercourse is not by itself a basis for
re​covery. Damages could only be awarded if sexual intercourse is not a product of voluntariness
and mutual desire. At the time she met Ivan at Tony’s Restaurant, Amelita was already 28 years
old and she admitted that she was attracted to Ivan (TSN, December 8, 1975, p. 83). Her
attraction to Ivan is the reason why she surrendered her womanhood. Had she been induced or
deceived because of a promise of marriage, she could have immediately severed her relation
with Ivan when she was informed after their first sexual contact sometime in August, 1974, that
he was a married man. Her declaration that in the months of September, October and
November, 1974, they repeated their sexual intercourse only indicates that passion and not the
alleged promise of mar​riage was the moving force that made her submit herself to Ivan.
WHEREFORE​, the instant petition is Dismissed for lack of merit.
SO ORDERED.

​ nd​ Romero, JJ., ​concur.

Gutierrez, Jr., (Chairman), Feliciano, Davide, Jr., a

* Penned by Associate Justice Simeon Gopengco and concurred in by Associate Justices Oscar
Victoriano and Jose Melo
**​ Issued by Judge Antonio M. Martinez
* ​Article 19. Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith.
** ​Article 21. Any person who wilfully causes loss or injury to another in a manner that is contrary
to mo​rals, good customs or public policy shall compensate the latter for damages.
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b. Malicious Prosecution

[ G.R. No. 47013, February 17, 2000 ]

ANDRES LAO, PETITIONER, VS. COURT OF APPEALS, THE ASSOCIATED

ANGLO-AMERICAN TOBACCO CORPORATION AND ESTEBAN CO,
RESPONDENTS.

[G.R. No. 60647]

ESTEBAN CO, PETITIONER, VS. COURT OF APPEALS AND ANDRES LAO,

RESPONDENTS.

[G.R. No. 60958-59]

THE ASSOCIATED ANGLO-AMERICAN TOBACCO CORPORATION,

PETITIONER, VS. COURT OF APPEALS, ANDRES LAO, JOSE LAO, AND
TOMAS LAO, RESPONDENTS.

DECISION

PURISIMA, J.:
These consolidated petitions for review on ​certiorari under Rule 45 of the Rules of Court revolve
around discrepant statements of accountability between a principal and its agent in the sale of
cigarettes.

The common factual background at bar follows:

On April 6, 1965, The Associated Anglo-American Tobacco Corporation (Corporation for brevity)
entered into a "Contract of Sales Agent" with Andres Lao. Under the contract, Lao agreed to sell
cigarettes manufactured and shipped by the Corporation to his business address in Tacloban
City. Lao would in turn remit the sales proceeds to the Corporation. For his services, Lao would
receive commission depending on the kind of cigarettes sold, fixed monthly salary, and
operational allowance. As a guarantee to Lao’s compliance with his contractual obligations, his
brother Jose and his father Tomas executed a deed of mortgage​[1] in favor of the Corporation in
the amount of P200,000.00

In compliance with the contract, Lao regularly remitted the proceeds of his sales to the
Corporation, generating, in the process, a great deal of business. Thus, the Corporation
awarded him trophies and plaques in recognition of his outstanding performance from 1966 to
1968. However, in February 1968 and until about seven (7) months later, Lao failed to
accomplish his monthly sales report. In a conference in Cebu, Ching Kiat Kam, the President of
the Corporation, reminded Lao of his enormous accounts and the difficulty of obtaining a tally
thereon despite Lao’s avowal of regular remittances of his collections.

Sometime in August and September 1969, Esteban Co, the vice-president and general
manager of the Corporation, summoned Lao to Pasay City for an accounting. It was then and
there established that Lao’s liability amounted to P525,053.47. And so, Lao and his brother Lao
Y Ka, enlisted the services of the Sycip Gorres and Velayo Accounting Firm (SGV) to check and
reconcile the accounts.

Ching Kiat Kam allowed Lao to continue with the sales agency provided Lao would reduce his
accountability to P200,000.00, the amount secured by the mortgage. The Corporation thereafter
credited in favor of Lao the amount of P325,053.47 representing partial payments he had made
but without prejudice to the result of the audit of accounts. However, the SGV personnel Lao
had employed failed to conclude their services because the Corporation did not honor its
commitment to assign two of its accountants to assist them. Neither did the Corporation allow
the SGV men access to its records.

Subsequently, the Corporation discovered that Lao was engaging in the construction business
so much so that it suspected that Lao was diverting the proceeds of his sales to finance his
business. In the demand letter of April 15, 1979,​[2] counsel for the Corporation sought payment
of the obligations of Lao, warning him of the intention of the Corporation to foreclose the
mortgage. Attached to said letter was a statement of account indicating that Lao’s total
obligations duly supported by receipts amounted to P248,990.82.
Since Lao appeared to encounter difficulties in complying with his obligations under the contract
of agency, the Corporation sent Ngo Kheng to supervise Lao’s sales operations in Leyte and
Samar. Ngo Kheng discovered that, contrary to Lao’s allegation that he still had huge
collectibles from his customers, nothing was due the Corporation from Lao’s clients. From then
on, Lao no longer received shipments from the Corporation which transferred its vehicles to
another compound controlled by Ngo Kheng. Shipments of cigarettes and the corresponding
invoices were also placed in the name of Ngo Kheng.

On May 21, 1970, Andres, Jose and Tomas Lao brought a complaint for accounting and
damages with writ of preliminary injunction​[3] against the Corporation, docketed as Civil Case
No. 4452 before the then Court of First Instance of Leyte, Branch I in Tacloban City, which
court​[4]​came out with its decision​[5]​on March 26, 1975, disposing as follows:
"IN VIEW OF ALL THE FOREGOING PREMISES, and upon a clear preponderance of evidence
in favor of the plaintiffs, the court hereby renders judgment as follows:

1. Ordering both the plaintiffs and defendant corporation to undergo a Court supervised
accounting of their respective account with the view of establishing once and for all, by a
reconciliation of their respective books of accounts, the true and correct accountability of
Andres Lao to the defendant corporation. Pursuant thereto, both plaintiff Andres Lao and
the defendant The Associated Anglo-American Tobacco Corporation are directed to
make available all their records pertainting [sic] to their business transactions with each
other under the contract of sales agent, from 1965 up to the time Andres Lao ceased
being the agent of the defendant. A Committee on Audit is hereby formed to be
composed of three (3) members, one member to be nominated by the plaintiffs, another
to be nominated by the defendant corporation and the third member who shall act as the
Committee Chairman to be appointed by this Court. As Committee Chairman, the Court
hereby appoints the Branch Clerk of Court of this Court, Atty. Victorio Galapon, who shall
immediately convene the Committee upon appointment of the other two members, and
undertake to finish their assigned task under his decision within two (2) months.

2. Ordering the defendant corporation to pay Plaintiffs the amount of P180,000

representing actual loss of earnings.

3. Ordering the defendant to pay plaintiffs moral damages in the amount of P130,000.00.

4. Ordering the defendant to pay to the plaintiffs, exemplary damages in the amount of
P50,000.00.

5. Ordering the defendant to pay to the plaintiffs, attorney’s fees in the amount of
P40,000.00.
 6. Ordering the plaintiffs and the defendant to pay the compensation of the commissioners
pro-rata.

7. Finally ordering the defendant to pay the cost of this suit.

SO ORDERED."
The Committee of Audit that was eventually constituted was composed of Atty. Victorio L.
Galapon, Jr., as chairman, Wilfredo Madarang, Jr. and Cesar F.P. Corcuera, as representatives
of the Corporation, and Lao himself. On September 16, 1976, said committee submitted a
report​[6]​with the following findings:
"Total remittances made by Mr. Andres Lao in favor of
Associated from April 10, 1965 to November 1969 which
are substantially supported by official receipt P13,686,148.8
..................................................... 0

Shipments by Associated to Mr. Andres Lao duly

supported by bills of lading, factory consignment invoices
and delivery receipts.................................. 9,110,777.00

Shipments by Associated to Mr. Andres Lao, covered by

bills of lading and factory consignment invoices but with
no supporting delivery receipts purported to have been
delivered to Mr. Lao on the basis of sales made by him
as reported in his monthly sales reports (except for sales
in December, 1968 and November and December 1968
where the sales reports were not available to the Audit
Committee)............................................... 4,018,927.60

Shipments covered by bills of lading and factory 597,239.40

consignment invoices but with no supporting delivery
receipts ............

Shipments with covering factory consignment invoices 126,950.00"

but not covered by bills of lading and delivery receipts
..............
On February 28, 1977, the trial court​[7] promulgated a supplemental decision wherein it
dismissed Lao’s claim that he had made an overpayment of P556,444.20. The alleged
overpayment was arrived at after deducting the total payment made by Lao in the amount of
P13,686,148.80 from the total volume of shipments made by the Corporation in the amount of
P13,129,704.60, without including the amount of P597,239.40, representing alleged shipments
covered by bills of lading and factory consignment invoices but with no supporting delivery
receipts, and the amount of P126,950.00, representing shipments with factory consignment
invoices but not covered by bills of lading and delivery receipts. The trial court, in rejecting the
claim of overpayment, held that "when he (referring to Lao) made partial payments amounting to
P325,053.47 subsequent to the demand in September, 1969, he is deemed to have admitted
his liability and his claim of overpayment is not only preposterous but devoid of logic."
Therefore, with the sums of P597,239.40 and P126,950.00 included in the total volume of
shipments made by the Corporation in the amount of P13,129,704.60, Lao’s total remittances of
P13,686,248.80 were short of P167,745.20. Thus, the trial court held:
"WHEREFORE, judgment is hereby rendered declaring plaintiff Andres Lao’s accountability to
defendant Corporation in the amount of P167,745.20 and ordering him to pay said amount of
P167,745.20 to defendant The Associated Anglo-American Tobacco Corporation."
The Corporation appealed the decision, dated March 26, 1975, just as Lao appealed the
supplemental decision, dated February 28, 1977, to the Court of Appeals. Docketed as CA-G.R.
No. 62532-R, the appeal was resolved in the Decision of the Court of Appeals dated October
26, 1981,​[8]​disposing thus:
"WHEREFORE, in connection with the decision of March 26, 1975, defendant corporation is
hereby ordered to pay plaintiffs P150,000.00 actual damages for loss of earnings, P30,000.00
by way of moral damages and P10,000.00 for exemplary damages. As modified, the decision is
AFFIRMED in all other respects.

As for the supplemental decision of February 28, 1977, the same is hereby reversed and set
aside, and defendant-appellant corporation sentenced to reimburse Andres Lao’s overpayment
in the amount of P556,444.20. Costs against defendant-appellant corporation."
The Corporation presented a motion for reconsideration​[9] of the said Decision but the same was
denied in a Resolution dated May 18, 1982.​[10] A motion for leave to file a second motion for
reconsideration was likewise denied.​[11]

Meanwhile, on June 24, 1974 and during the pendency of Civil Case No. 4452, Esteban Co,
representing the Corporation as its new vice-president, filed an affidavit of complaint​[12] with the
Pasay City Fiscal’s Office under I.S. No. 90994; alleging that Lao failed to remit the amount of
P224,585.82 which he allegedly misappropriated and converted to his personal use. Although
the amount supposedly defalcated was put up as a counterclaim in Civil Case No. 4452 for
accounting, the Corporation averred that it reserved the right to institute a criminal case against
Lao.

On July 31, 1974, after finding a ​prima facie case against Lao, the Pasay City Fiscal filed an
information​[13] for estafa against Lao, docketed as Criminal Case No. 2650-P before the then
Court of First Instance of Rizal, Branch XXVII. Lao sought a reinvestigation​[14] of the case,
contending that he was never served a subpoena or notice of preliminary investigation that was
considered mandatory in cases cognizable by Court of First Instance, now Regional Trial Court.
Apparently, the preliminary investigation proceeded ​ex-parte because Esteban Co made it
appear that Lao could not be located.

On December 17, 1974, without awaiting the termination of the criminal case, Lao lodged a
complaint​[15] for malicious prosecution against the Corporation and Esteban Co, praying for an
award of damages for violation of Articles 20 and 21 of the Civil Code. The case was docketed
as Civil Case No. 5528 before Branch I of the then Court of First Instance in Cotabato City.

In his resolution dated January 3, 1975,​[16] then Pasay City Fiscal Jose Flaminiano found merit
in the petition for reinvestigation of the estafa case. He opined that Lao had not committed
estafa as his liability was essentially civil in nature. The Fiscal entertained doubts about the
motive of the Corporation in instituting the criminal case against Lao because of the undue
delay in its filing, aside from the fact that the estafa case involved the same subject matter the
Corporation sued upon by way of counterclaim in Civil Case No. 4452. Eventually, on May 13,
1976, the Court of First Instance of Rizal, Branch XXVII, in Pasay City, promulgated a
decision​[17] acquitting Lao of the crime charged and adopting ​in toto the said Resolution of Fiscal
Flaminiano.

On March 18, 1977, the Court of First Instance of Samar​[18] handed down a decision in Civil
Case No. 5528, the action for damages arising from malicious prosecution, disposing thus:
"WHEREFORE, the Court declares that the defendants filed Criminal Case No. 2650-P against
the plaintiff for estafa before the Court of First Instance of Rizal, Branch XXVII, Pasay City,
without probable cause and with malice and therefore orders the defendants Associated
Anglo-American Tobacco Corporation and Esteban Co to jointly and severally pay the plaintiff:

a. P30,000 as actual damages;

b. P150,000.00 as moral damages;

c. P100,000.00 as exemplary damages;

d. P50,000.00 as attorney’s fees and costs.

SO ORDERED."
The Corporation and Esteban Co both appealed the aforesaid decision to the Court of Appeals
under CA-G.R. No. 61925-R.

On April 18, 1977, Lao presented a motion for execution pending appeal​[19] before the trial court.
The opposition of the Corporation notwithstanding, on June 8, 1977 the trial court issued a
special order granting the motion for execution pending appeal,​[20] and on the following day, the
corresponding writ of execution issued.​[21]
On June 10, 1977, the Court of Appeals issued a Restraining Order enjoining the execution of
subject judgment.​[22] The said order was issued on account of a petition for ​certiorari​, prohibition
and ​mandamus with preliminary injunction​[23] filed by the Corporation and Esteban Co with the
said appellate court. Docketed as CA-G.R. No. 06761, the petition was received by the Court of
Appeals on June 9, 1977. A supplemental to the petition and a "compliance" were also received
on the same time and date.​[24]​On June 21, 1977, Lao moved to lift the restraining order.

On September 14, 1977, the Court of Appeals resolved in CA-G.R. No. 06761 thus:
"WHEREFORE, the petition for ​certiorari is hereby granted, the special order granting execution
pending appeal is annulled and the restraining order heretofore issued is made permanent.

No pronouncement as to costs."
On October 21, 1981, the Court of Appeals likewise rendered a Decision​[25] in CA-G.R. No.
62532-R, affirming the trial court’s finding that Criminal Case No. 2650-P was filed without
probable cause and with malice; and held the Corporation and Esteban Co solidarily liable for
damages, attorney’s fees and costs.

The Corporation and Esteban Co moved to reconsider​[26] the said decision in CA-G.R. No.
61925-R but to no avail. The motion for reconsideration was denied in a Resolution promulgated
on May 18, 1992. A motion for leave of court to file a second motion for reconsideration​[27] met
the same fate. It was likewise denied in a Resolution​[28]​dated June 23, 1982.

From the said cases sprung the present petitions which were ordered consolidated in the
Resolutions of December 15, 1982 and November 11, 1985.​[29] Subject petitions are to be
passed upon in the order they were filed.

G.R. No. 47013

A petition for review on ​certiorari of the Decision of the Court of Appeals in CA-G.R. No. 06761
that Lao filed, contending that:

1. The Court of Appeals cannot validly give due course to an original action for ​certiorari​,
prohibition and ​mandamus​ where the petition is fatally defective for not being
accompanied by a copy of the trial court’s questioned process/order.

2. The Court of Appeals, cannot, in a petition for ​certiorari​, prohibition and ​mandamus,​
disregard, disturb and substitute its own judgment for the findings of facts of the trial
court, particularly as in the present case, where the trial court did not exceed nor abuse
its discretion.
 3. The Court of Appeals did not act in accordance with established jurisprudence when it
overruled the trial court’s holding that the posting of a good and solvent bond is a good
or special reason for execution pending appeal.

For clarity, the petition for review on ​certiorari questioning the Decision of the Court of Appeals
that nullified the special order granting execution pending appeal is anchored on the antecedent
facts as follows:

After the Court of First Instance of Samar had decided in favor of Lao in the action for damages
by reason of malicious prosecution, Lao filed a motion for execution pending appeal​[30] even as
the Corporation and Co had interposed an appeal from the said decision. In that motion, Lao
theorized that the appeal had no merit and the judgment in his favor would be rendered
ineffectual on account of losses incurred by the Corporation in the 1972 floods in Luzon and in a
fire that cost the Corporation P5 million, as well as the fact that the properties of the Corporation
were heavily encumbered as it had even incurred an overdraft with a bank; for which reasons,
Lao evinced his willingness to post a bond although Section 2, Rule 39 of the Rules of Court
does not require such bond. Lao thereafter sent in a supplemental motion​[31] asserting that the
Corporation’s properties were mortgaged in the total amount of Seven Million (P7,000,000.00)
Pesos. The Corporation and Co opposed both motions.

On June 8, 1977, after hearing and presentation of evidence by both parties, the Court of First
Instance of Samar issued a special order granting the motion for execution pending appeal.​[32]
The following day, June 9, 1977, the corresponding writ of execution pending appeal issued.​[33]
At 8:00 a.m. on the same day, the Corporation and Co filed a petition for ​certiorari,​ prohibition
and ​mandamus with preliminary injunction with the Court of Appeals, the filling of which petition
was followed by the filing of a supplement to the petition and a "compliance" with each pleading
bearing the docket stamp showing that the Court of Appeals also received the same at 8:00
a.m.​[34]

In the petition under consideration, petitioner Lao contends that the supplemental petition and
"compliance" could not have been filed with the Court of Appeals at the same time as the
original petition; pointing out that the supplemental petition contains an allegation to the effect
that the special order granting execution pending appeal was then still "being flown to Manila"
and would be attached to the petition "as soon as it arrives in Manila which is expected
tomorrow, June 10, 1977 or Saturday."​[35] Petitioner Lao thus expressed incredulity on the fact
that both the supplemental petition and the "compliance" submitted to the appellate court a copy
of the special order bearing the same time of receipt. He theorized that the writ of execution
could have been issued by the Court of First Instance of Samar at the earliest, at 8:30 a.m. on
July 9, 1977. Petitioner Lao then noted that, the restraining order enjoining execution pending
appeal did not mention the date of issuance of the writ subsequently issued and the names of
the special sheriffs tasked to execute it simply because when the restraining order was issued
the copy of the writ of execution was not yet filed with the Court of Appeals. Petitioner Lao also
averred that because his counsel was furnished a copy of the restraining order through the mail,
he was deprived of the opportunity to take immediate "remedial steps in connection with the
improvident issuance of the restraining order."​[36]

In their comment on the petition, respondent Corporation and Co assail petitioner Lao’s
insinuation of irregularity in the filing of their pleadings. They aver that in view of petitioner Lao’s
allegation, they, made inquiries in the Docket Section of the Court of Appeals, and they were
informed that the receiving machine of said section was out of order when the pleadings were
received "as the time of receipt appearing therein is always 8:00 a.m."​[37]

This Court cannot gloss over, as it has never glossed over allegations of irregularity in the
handling of pleadings filed in the Court. However, in the absence of concrete proof that there
was malicious intent to derail the propriety of procedure, this Court has no basis on which to
arrive at a conclusion thereon. The documentary evidence of simultaneous receipt of pleadings
that should ordinarily be received one after another is simply insufficient to warrant any
conclusion on irregularity of procedure.

All court personnel are enjoined to do their jobs properly and according to law. Should they
notice anything in the performance of their duties that may generate even a mere suspicion of
irregularity, they are duty-bound to correct the same. In this case, more diligence on the part of
the personnel handling the receiving machine could have prevented the stamping on the
pleadings with erroneous date and time of receipt and would have averted suspicion of an
anomaly in the filing of pleadings. Persons responsible for the negligence should be taken to
task. However, since this is not the proper forum for whatever administrative measures may be
taken under the premises, the Court opts to discuss the merits of the petition for review on
certiorari at bar rather than tarry more on an administrative matter that is fundamentally
extraneous to the petition.

Petitioner Lao maintains that the Court of Appeals should not have been given due course to
the petition for ​certiorari,​ prohibition and ​mandamus considering that it was fatally defective for
failure of the petitioners to attach thereto a copy of the questioned writ of execution. On their
part, private respondents concede the mandatory character of the requirement of Section 1,
Rule 65 of the Rules of Court - that the petition "shall be accompanied by a certified true copy of
the judgment or order subject thereof, together with copies of all pleadings and documents
relevant and pertinent thereto." However, private respondents asked that their submission of a
certified true copy of the special order granting execution pending appeal attached to their
"compliance" dated June 9, 1977​[38]​be taken as substantial compliance with the rule.

The Court gives due consideration to private respondents’ stance. Strict adherence to
procedural rules must at all times be observed. However, it is not the end-all and be-all of
litigation. As this Court said:
"xxx adjective law is not to be taken lightly for, without it, the enforcement of substantive law
may not remain assured. The Court must add, nevertheless, that technical rules of procedure
are not ends in themselves but primarily devised and designed to help in the proper and
expedient dispensation of justice. In appropriate cases, therefore, the rules may have to be so
construed liberally as to meet and advance the cause of substantial justice."​[39]
Thus, in holding that the Court of Appeals may entertain a second motion for reconsideration of
its decision although the filing of such motion violates a prohibition thereof, the Court said:
"xxx (I)t is within the power of this Court to temper rigid rules in favor of substantial justice. While
it is desirable that the Rules of Court be faithfully and even meticulously observed, courts should
not be so strict about procedural lapses that do not really impair the proper administration of
justice. If the rules are intended to ensure the orderly conduct of litigation, it is because of the
higher objective they seek which is the protection of substantive rights of the parties."​[40]
In the case under consideration, private respondents substantially complied with the Rules of
Court when they submitted a copy of the writ of execution sought to be enjoined on the same
day they filed the petition for ​certiorari​, prohibition and ​mandamus​. Petitioner Co’s allegation of
irregularity as to the time of receipt of the "compliance" to which copy of the writ was attached
being unsubstantiated, the presumption of regularity of its receipt on the day the original petition
was filed should prevail.

Petitioner Co argues that the Court of Appeals cannot disturb the factual findings of the trial
court and substitute its own in a petition for ​certiorari,​ prohibition and ​mandamus where the
basic issue is one of jurisdiction or grave abuse of discretion. It is well-settled, however, that in a
petition for ​certiorari and ​mandamus​, the Court of Appeals, when inevitable, may examine the
factual merits of the case.​[41] In the present case, it was necessary and inevitable for the Court of
Appeals to look into the diverse factual allegations of the parties. It is worthy to note that
petitioner’s motion for execution pending appeal was premised on his contention that the award
of damages in his favor would be meaningless on account of respondent Corporation’s
precarious financial status. On the other hand, respondent Corporation countered that it was
operating at a profit, an assurance that at the time, it was a stable business entity that could
answer for its obligations. In the face of these contradictory allegations, the appellate court
correctly opted to make its own finding of facts on the issue of the propriety of the issuance of
the writ of execution pending appeal. It should be stressed that what was at issue was not the
award of damages itself but the issuance of said writ.

Petitioner Lao’s position that the posting of a good and solvent bond is a special reason for the
issuance of the writ of execution pending appeal is utterly barren of merit. Mere posting of a
bond to answer for damages does not suffice as a good reason for the granting of execution
pending appeal, within the context of "good reasons" under Section 2, Rule 39 of the Rules of
Court.​[42]​In ​Roxas v. Court of Appeals,​ [43]​
​ the Court held:
"It is not intended obviously that execution pending appeal shall issue as a matter of course.
‘Good reasons, special, important, pressing reasons must exist to justify it; otherwise, instead of
an instrument of solicitude and justice, it may well become a tool of oppression and inequity. But
to consider the mere posting of a bond a ‘good reason’ would precisely make immediate
execution of a judgment pending appeal routinary, the rule rather than the exception.
Judgments would be executed immediately, as a matter of course, once rendered, if all that the
prevailing party needed to do was to post a bond to answer for damages that might result
therefrom. This is a situation, to repeat, neither contemplated nor intended by law."​[44]
G.R. No. 60647

From the decision of the Court of First Instance of Samar in Civil Case No. 5528, finding that
they are liable for malicious prosecution and therefore, they must pay Lao damages, the
Corporation and Co appealed to the Court of Appeals. In affirming the lower court’s decision,
the Court of Appeals deduced from the facts established that the Corporation knew all along
that Lao’s liability was civil in nature. However, after around four (4) years had elapsed and
sensing that Civil Case No. 4452 would result in a decision against them, they instituted the
criminal case for estafa. In awarding damages in the total amount of P330,000, the Court of
Appeals took into account Lao’s social and business standing.​[45]

From the Decision of the Court of Appeals in CA-G.R. No. 61925-R, Co filed the instant petition
for review on ​certiorari;​ contending that the Court of Appeals erred in affirming the decision of
the Samar Court of First Instance because when the case for malicious prosecution was
commenced there was as yet no cause of action as the criminal case was still pending decision.
Co also asserted that he should not be held jointly and severally liable with the Corporation
because in filing the affidavit-complaint against respondent Lao, he was acting as the executive
vice-president of the Corporation and his action was within the scope of his authority as such
corporate officer.

The issue of whether the Court of Appeals correctly ruled that the Corporation and petitioner Co
should be held liable for damages on account of malicious prosecution shall be ratiocinated
upon and resolved with the issues submitted for resolution in G.R. Nos. 60958-59. What should
concern the Court here is whether petitioner Co should be held solidarily liable with the
Corporation for whatever damages would be imposed upon them for filing the complaint for
malicious prosecution.

Petitioner Co argues that following the dictum in agency, the suit should be against his principal
unless he acted on his own or exceeded the limits of his agency.

A perusal of his affidavit-complaint reveals that at the time he filed the same on June 24, 1974,
petitioner Co was the vice-president of the Corporation. As a corporate officer, his power to bind
the Corporation as its agent must be sought from statute, charter, by-laws, a delegation of
authority to a corporate officer, or from the acts of the board of directors formally expressed or
implied from a habit or custom of doing business.​[46] In this case, no such sources of petitioner’s
authority from which to deduce whether or not he was acting beyond the scope of his
responsibilities as corporate vice-president are mentioned, much less proven. It is thus logical to
conclude that the board of directors or by laws- of the corporation vested petitioner Co with
certain executive duties​[47]​one of which is a case for the Corporation.
That petitioner Co was authorized to institute the estafa case is buttressed by the fact that the
Corporation failed to make an issue out of his authority to file said case. Upon well-established
principles of pleading, lack of authority of an officer of a corporation to bind it by contract
executed by him in its name, is a defense which should have been specially pleaded by the
Corporation.​[48] The Corporation’s failure to interpose such a defense could only mean that the
filing of the affidavit-complaint by petitioner Co was with the consent and authority of the
Corporation. In the same vein, petitioner Co may not be held personally liable for acts
performed in pursuance of an authority and therefore, holding him solidarily liable with the
Corporation for the damages awarded to respondent Lao does accord with law and
jurisprudence.

G.R. No. 606958-59

In this petition for review on ​certiorari of the Decisions of the Court of Appeals in CA-G.R. No.
61925-R, regarding Lao’s claim for damages on account of malicious prosecution, and in
CA-G.R. No. 62532-R that arose from Lao’s complaint for accounting and damages, petitioner
Corporation assigns as errors, that:

1. The respondent Court of Appeals erred and/or committed a grave abuse of discretion in
affirming the erroneous decision of the lower court. The civil case for malicious
prosecution was filed during the pendency of the criminal case upon which the civil suit
was based. There is as yet no cause of action. xxx.

2. The respondent Court of Appeals erred and/or committed a grave abuse of discretion
when it reversed or set aside the supplemental decision of the lower court in Civil Case
No. 4452, which reversal was merely based on surmises and conjectures. xxx.

3. The respondent Court of Appeals erred and/or committed grave abuse of discretion
when it awarded moral damages in Civil Case No. 4452 which was not prayed for
because Andres Lao prayed for moral damages and was already awarded in Civil Case
No. 5528. Moral damages must be specifically prayed for. xxx.​[49]

Petitioner Corporation contends that the complaint for malicious prosecution brought by Lao
during the pendency of subject criminal case for estafa, states no cause of action as it was
prematurely filed when the criminal case that resulted in the acquittal of Lao was not yet
terminated. On the other hand, respondent Lao countered that the elements supportive of an
action for malicious prosecution are evidentiary in nature and their existence or non-existence
cannot be the subject of evaluation and conclusion upon the filing of the complaint. For Lao,
those elements must be determined at the time the plaintiff has offered all his evidence and
rested his case.

Malicious prosecution has been defined as an action for damages brought by one against whom
a criminal prosecution, civil suit or other legal proceeding has been instituted maliciously and
without probable cause, after the termination of such prosecution, suit or other proceeding in
favor of the defendant therein.​[50] As thus defined, the fact of termination of the criminal
prosecution, civil suit or legal proceeding maliciously filed and without probable cause, should
precede the complaint for malicious prosecution. Such a complaint states a cause of action if it
alleges: (a) that the defendant was himself the prosecutor or at least instigated the prosecution;
(b) that the prosecution finally terminated in the acquittal of the plaintiff; (c) that in bringing the
action the prosecutor acted without probable cause, and (d) that the prosecutor was actuated by
malice, ​i.e.,​ by improper and sinister motives.​[51]

Ocamp v. Buenaventura​[52] demonstrates the importance of the requirement that the case
maliciously commenced should be terminated before a claim for damages arising from the filing
of such case should be presented. In that case, a complaint for damages arising from the
alleged malicious filing of an administrative case for serious misconduct, grave abuse of
authority and commission of a felony, was held to be premature during the pendency of said
administrative case before the then Police Commission (POLCOM). Observing that the
complaint for damages was based on the claim that the administrative case brought before the
POLCOM was malicious, unfounded and aimed to harass the respondents, the Court there
held:
"xxx. The veracity of this allegation is not for us to determine, for if We rule and allow the civil
case for damages to proceed on that ground, there is the possibility that the court ​a quo in
deciding said case might declare the respondents victims of harassment and thereby indirectly
interfere with the proceedings before the POLCOM. The respondents’ case for damages before
the lower court is, therefore, premature as it was filed during the pendency of the administrative
case against the respondents before the POLCOM. The possibility cannot be overlooked that
the POLCOM may hand down a decision adverse to the respondents, in which case the
damage suit will become unfounded and baseless for wanting in cause of action. Of persuasive
force is the ruling in ​William H. Brown vs. Bank of the Philippine Islands and Santiago Freixas,​
101 Phil. 309, 312, where this Court said:
"xxx. In effect, plaintiff herein seeks to recover damages upon the ground that the detainer case
has been filed, and is being maintained, maliciously and without justification; but this pretense
affects the merits of said detainer case. Should final judgment be eventually rendered in that
case in favor of the plaintiffs therein, such as the one rendered in the municipal court, the
validity of the cause of action of said lessors against Brown, would thereby be conclusively
established, and necessarily, his contention in the present case would have to be rejected.
Similarly, we cannot sustain the theory of Brown in the case at bar, without prejudging the issue
in the detainer case, which is still pending. Until final determination of said case, plaintiff herein
cannot, and does not, have, therefore, a cause of action - if any, on which we do not express
our opinion - against the herein defendants. In short, the lower court has correctly held that the
present action is premature, and, that, consequently, the complain herein does not set forth a
cause of action against the defendants."​[53]
A similar ruling was laid down in ​Cabacungan v. Corrales​[54] where the Court sustained the
dismissal of an action for damages on the ground of prematurity. The records disclosed that the
alleged false and malicious complaint charging plaintiffs with malicious mischief was still
pending trial when the action for damages based on the subject complaint was brought.

Premises studiedly viewed in proper perspective, the contention of Lao that the elements of an
action for malicious prosecution are evidentiary in nature and should be determined at the time
the plaintiff offers evidence and rests his case, is untenable. To rule otherwise would, in effect,
sanction the filing of actions without a cause of action. The existence of a cause of action is
determined solely by the facts alleged in the complaint. Consideration of other facts is
proscribed and any attempt to prove extraneous circumstances is not allowed.​[55] As this Court
said in ​Surigao Mine Exploration Co., Inc. v. Harris​,[56]
​ "unless the plaintiff has a valid and
subsisting cause of action at the time his action is commenced, the defect cannot be cured or
remedied by the acquisition or accrual of one while the action is pending, and a supplemental
complaint or an amendment setting up such after-accrued cause of action is not permissible."​[57]
Thus, the circumstance that the estafa case concluded in respondent Lao’s acquittal during the
pendency of the complaint for malicious prosecution did not cure the defect of lack of cause of
action at the time of filing of the complaint.

Neither does the Court find merit in respondent Lao’s submission that the complaint for
malicious prosecution is viable inasmuch as it is also anchored on Articles 20 and 21 of the Civil
Code. This may appear to be a persuasive argument since there is no hard and fast rule which
can be applied in the determination of whether or not the principle of abuse of rights has been
violated, resulting in damages under the said articles of the Civil Code on Human Relations.
Indeed, a party injured by the filing of a court case against him, even if he is later on absolved,
may file a case for damages grounded either on the principle of abuse of rights or on malicious
prosecution.​[58] However, whether based on the principle of abuse of rights or malicious
prosecution, a reading of the complaint here reveals that it is founded on the mere filing of the
estafa charge against respondent Lao. As such, it was prematurely filed and it failed to allege a
cause of action. Should the action for malicious prosecution be entertained and the estafa
charge would result in respondent Lao’s conviction during the pendency of the damage suit,
even if it is based on Articles 20 and 21, such suit would nonetheless become groundless and
unfounded. To repeat; that the estafa case, in fact, resulted in respondent Lao’s acquittal would
not infuse a cause of action on the malicious prosecution case already commenced and
pending resolution.

The complaint for damages based on malicious prosecution and/or on Articles 20 and 21 should
have been dismissed for lack of cause of action and therefore, the Court of Appeals erred in
affirming the decision of the trial court of origin. It should be stressed, however, that the
dismissal of subject complaint should not be taken as an adjudication on the merits, the same
being merely grounded on the failure of the complaint to state a cause of action.​[59]

As regards the Decision in CA-G.R. No. 62532-R which was spawned by respondent Lao’s
complaint for accounting, petitioner contends that the appellate court erred when it reversed and
set aside the supplemental decision in Civil Case No. 4452 and directed the corporation to
reimburse the amount of P556,444.20, representing Lao’s overpayment to the Corporation. The
Court would normally have restricted itself to questions of law and shunned away from
questions of fact were it not for the conflicting findings of fact by the trial court and appellate
court on the matter. The Court is therefore constrained to relax the rule on conclusiveness of
factual findings of the Court of Appeals and, on the basis of the facts on record, make its own
findings.​[60]

It is significant to note that as per decision of the trial court dated March 26, 1975, a
court-supervised accounting was directed so as to ascertain the true and correct accountability
of Andres Lao to the defendant corporation. Thus, a three-man audit committee was formed
with the branch of clerk of court, Atty. Victorio Galapon, as chairman, and two other certified
public accountants respectively nominated by the parties, as members.

On September 16, 1976, the said Audit Committee submitted its report​[61] and in the hearing of
November 25, 1976, the parties interposed no objection thereto and unanimously accepted the
Audit Committee Report. The Committee found that Andres Lao has made a total overpayment
to defendant corporation in the amount of P556,444.20.

Trial by commissioners is allowed by the Rules of Court when a) the trial of an issue of fact
requires the examination of a long account on either side, in which case the commissioner may
be directed to hear and report upon the whole issue or any specific question involved therein; b)
when the taking of an account is necessary for the information of the court before judgment, or
for carrying a judgment or order into effect; and c) when a question of fact, other than upon the
pleadings, arises upon motion or otherwise, at any stage of a case, or for carrying a judgment or
order into effect.​[62] Ultimately, the trial court, in the exercise of its sound discretion, may either
adopt, modify, or reject in whole or in part, the commissioners’ report or it may recommit the
same with instructions, or require the parties to present additional evidence before the
commissioners or before the court.​[63]

In the case under consideration, it is thus within the power of the trial court to refer the
accounting to court-appointed commissioners because a true and correct accounting is
necessary for the information of the court before it can render judgment. Moreover, the technical
nature of the audit procedure necessitates the assistance of a certified public accountant. And
since both parties offered no objection to the commissioners’ report, they are deemed to have
accepted and admitted the findings therein contained.

There is no discernible cause for veering from the findings of the Audit Committee. In arriving at
its conclusion, the Audit Committee subtracted the total remittances of Lao in the amount of
P13,686,148.80 from the entire volume of shipments made by the corporation. In determining
the total volume of shipments made by the corporation, the Audit Committee did not include the
shipments covered by bills of lading and factory consignment invoices but without the
corresponding delivery receipts. These included shipments in the amount of P597, 239.40
covered by bills of lading and factory consignment invoices but with no supporting delivery
receipts, and shipments worth P126, 950.00 with factory consignment invoices but not covered
by bills of lading and delivery receipts. However, the Audit Committee considered shipments
made by the corporation to Lao in the amount of P9,110,777.00 covered by bills of lading and
factory invoices but without the corresponding delivery receipts because subject shipments
were duly reported in Lao’s monthly sales report.

The Audit Committee correctly excluded the shipments not supported by delivery receipts, albeit
covered by bills of lading and factory consignment invoices. Under Article 1497 of the Civil
Code, a thing sold shall be understood as delivered when it is placed in the control or
possession of the vendee. Unless possession or control has been transferred to the vendee, the
thing or goods sold cannot be considered as delivered. Thus, in the present case, the Audit
Committee was correct when it adopted as guideline that accountability over the goods shipped
was transferred from the corporation to Andres Lao only upon actual delivery of the goods to
him. For it is only when the goods were actually delivered to and received by Lao, did Lao have
control and possession over subject goods, and only when he had control and possession over
said goods could he sell the same.

Delivery is generally evidenced by a written acknowledgement of a person that he or she has

actually received the thing or the goods, as in delivery receipts. A bill of lading cannot substitute
for a delivery receipt. This is because it is a written acknowledgement of the receipt of the goods
by the carrier and an agreement to transport and deliver them at a specific place to a person
named or upon his order.​[64] It does not evidence receipt of the goods by the consignee or the
person named in the bill of lading; rather, it is evidence of receipt by the carrier of the goods
from the shipper for transportation and delivery.

Likewise, a factory consignment invoice is not evidence of actual delivery of the goods. An
invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing
sold.​[65] It is not proof that the thing or goods were actually delivered to the vendee or the
consignee. As admitted by the witness for the corporation:
A: Factory consignment invoices represents what the company billed the plaintiff Mr. Lao and
the bill of lading represents the goods which were supposed to have been shipped.

xxx xxx xxx

A: Shipments covered by factory consignment invoices simply meant these are billings made
again by the Associated Anglo-American Tobacco Corporation to plaintiff Andres Lao. (t.s.n.,
November 25, 1976, pp. 45-47 as cited in Respondent Lao’s Comment, ​Rollo​, p. 259)
Thus, in the absence of proof that the goods were actually received by Lao as evidenced by
delivery receipts, the shipments allegedly made by the corporation in the amount of
P597,239.40 and P126,950.00 covered only by bills of lading and factory consignment invoices
cannot be included in Lao’s accountability.
However, as to the shipments worth P4,018,927.60 likewise covered only by bills of lading and
factory consignment invoices, the Audit Committee correctly considered them in Lao’s account
because such shipments were reported in the latter’s sales reports. The fact that Lao included
them in his sales reports is an implied admission that subject goods were actually delivered to
him, and that he received the said goods for resale.

As regards the award of moral damages, petitioner Corporation faults the Court of Appeals for
awarding such damages not specifically prayed for in the complaint for accounting and
damages in Civil Case No. 4452. Petitioner Corporation argues that moral damages were
prayed for and duly awarded in Civil Case No. 5528 and therefore, it would be unfair and unjust
to allow once again, recovery of moral damages on similar grounds.

Contrary to the allegation of the petitioner Corporation, the award of moral damages was
specifically prayed for in the complaint albeit it left the amount of the same to the discretion of
the court.​[66] Moreover, Civil Case Nos. 4452 and 5528 were on varied causes of action. While
the award for moral damages in Civil Case No. 4452 was based on the evident bad faith of the
petitioner Corporation in unilaterally rescinding respondent Lao’s sales agency through his
immediate replacement by Ngo Kheng, the claim for moral damages in Civil Case No. 5528 was
anchored on the supposed malice that attended the filing of the criminal case for estafa.

Petitioner Corporation also opposes for being conjectural, the award of P150,000.00 in Civil
Case No. 4452, representing actual damages for loss of earnings. True, damages cannot be
presumed or premised on conjecture or even logic. A party is entitled to adequate compensation
only for duly substantiated pecuniary loss actually suffered by him or her.​[67] In this case,
however, the trial court correctly found that an award for actual damages was justified because
several months before their contract of agency was due to expire in 1969, the petitioner
Corporation replaced Lao with Ngo Kheng as sales agent for the areas of Leyte and Samar.
This, despite the fact that they had already agreed that Lao would continue to act as the
corporation’s sales agent provided that he would reduce his accountability to P200,000.00, the
amount covered by his bond, and engaged the services of an independent accounting firm to do
an audit to establish Lao’s true liability. Due to his ouster as sales agent, Lao failed to realize a
net income from his sales agency in the amount of P30,000.00 a year.

However, the amount of actual damages should be reduced to P30,000.00 only instead of the
P150,000.00 awarded by the appellate court. Since the contract of sales agency was on a
yearly basis, the actual damages Lao suffered should be limited to the annual net income he
failed to realize due to his unjust termination as sales agent prior to the expiration of his contract
in 1969. Unrealized income for the succeeding years cannot be awarded to Lao because the
corporation is deemed to have opted not to renew the contract with Lao for the succeeding
years.

As to the award of exemplary damages, suffice it to state that in contracts and quasi-contracts,
the court may award exemplary damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner.​[68] In the case under scrutiny, the Court finds the
award of exemplary damages unjustified or unwarranted in the absence of any proof that the
petitioner Corporation acted in a wanton, fraudulent, reckless, oppressive, and malevolent
manner. For the same reasons, the award for attorney’s fees should be deleted.

WHEREFORE,

In G.R. No. L-47013, the petition for review on certiorari is ​DENIED​ for lack of merit;

In G.R. No. 60647, the petition is ​GRANTED and the assailed decision is ​SET ASIDE;​ and the
Decision of the Court of Appeals in CA-G.R. No. 61925-R, finding Esteban Co solidarily liable
with the respondent Associated Anglo-American Tobacco Corporation for damages, is
REVERSED AND SET ASIDE.​ As above ratiocinated, the respondent corporation cannot be
held liable for damages.

In G.R. Nos. 60958-59, the Decision in CA-G.R. No. 61925-R is ​REVERSED AND SET ASIDE​;
the respondent corporation is adjudged not liable for malicious prosecution due to the
prematurity of the action; while the Decision in CA-G.R. No. 62532-R is ​AFFIRMED,​ insofar as it
ordered respondent corporation to reimburse Andres Lao’s overpayment in the amount of
P556,444.20, but ​MODIFIED,​ in that only an award of P30,000.00 for actual damages is
GRANTED​, and all the other monetary awards are deleted. No pronouncement as to costs.

SO ORDERED.

Melo, (Chairman), Vitug​, and ​Panganiban, JJ.,​ concur.

Gonzaga-Reyes, J.​, no part. Spouse is with counsel for respondents.

[1]​
​Rollo​ of G.R. Nos. 60958-59, Vol. II, p. 292.

[2]​
​Ibid.,​ p. 224; Record on Appeal of C.A. G.R. No. 61925-R, Vol. II, p. 202.

[3]​
​Ibid.,​ p. 273.

[4]​
Presided by Judge Gregorio G. Collantes.

[5]​
​Rollo​ of G.R. Nos. 60958-59, Vol. I, p. 225; Amended Record on Appeal, p. 476.

[6]​
​Ibid.,​ p. 867.

[7]​
Thru Judge Jose P. Arro who succeeded Judge Collantes.

[8]​
​Rollo​ of G.R. Nos. 60958-59, Vol. I, p. 141.
[9]​
Ibid.​, p. 142.

[10]​
Ibid.​, p. 177.

[11]​
​Ibid.​, p. 218.

[12]​
​Ibid.​, p. 224; Record on Appeal, G.R. No. 61925-R, Vol. II, p. 194.

[13]​
​Ibid.​, p. 205.

[14]​
​Ibid.​, p. 140.

[15]​
​Ibid.​, p. 16.

[16]​
​Ibid.​, p. 158.

[17]​
​Rollo​ of G.R. Nos. 60958-59, Vol. II, p. 296.

[18]​
Presided by Judge Segundo M. Zosa.

[19]​
​Rollo​ of G.R. No. 47013, p. 112.

[20]​
​Ibid.​, p. 166.

[21]​
​Ibid.​, p. 185.

[22]​
​Ibid.​, p. 187.

[23]​
​Ibid.​, p. 189.

[24]​
​Ibid.​, pp. 213 & 215.

[25]​
​Rollo​ of G.R. Nos. 60958-59, Vol. I, p. 51.

[26]​
​Rollo​ of G.R. No. 60647, p. 56.

[27]​
​Rollo​ of G.R. Nos. 60958-59, p. 178.

[28]​
​Ibid.​, pp. 217-218.

[29]​
​Rollo​ of G.R. No. 47013, p. 425 and G.R. No. 60647, p. 71.
[30]​
​Rollo​ of G.R. No. 47013, pp. 112-124.

[31]​
​Ibid.​, pp. 125-129.

[32]​
​Ibid.​, pp. 166-184.

[33]​
​Ibid.​, pp. 185-186.

[34]​
​Ibid.​, pp. 9-10.

[35]​
​Ibid.​, pp. 17-18.

[36]​
​Ibid.​, p. 19.

[37]​
​Ibid.​, p. 318.

[38]​
​Ibid.​, p. 215.

[39]​
​Republic of the Philippines v. Court of Appeals,​ 343 Phil. 428, 436 (1997)

[40]
​ SIS v. Court of Appeals,​ 334 Phil. 163, 174 (1997) citing ​Mauna v. Civil Service
G
Commission​, G.R. No. 97794, May 13, 1994, 232 SCRA 388, 398.

[41]
​ esina v. Intermediate Appellate Court,​ G.R. No. L- 70145, November 13, 1986, 145 SCRA
M
497, 506; ​Seechung-Federis v. Sunga,​ L-34803, January 17, 1985, 134 SCRA 16, 24.

[42]
Sec. 2. Execution pending appeal. - On motion of the prevailing party with notice to the
adverse party, the court may, in its discretion, order execution to issue even before the
expiration of the time to appeal, upon good reasons to be stated in a special order. If a record
on appeal is filed thereafter, the motion and the special order shall be included therein. (Italics
supplied.)

[43]​
G.R. No. 56960, January 28, 1988, 157 SCRA 370, 377-378.

[44]​
​Quoted in David v. Court of Appeals,​ 342 Phil. 387, 391 (1997)

[45]
The Court of Appeals found that petitioner "was held in high esteem in his community, being
the President of the Tacloban City Jaycees in 1969; a member of its Board of Directors; a
member in good standing of the Tacloban City Chapter of The Lions Club; a member of the
Bachelors Club of Tacloban City and was a participant in the Jaycees National Convention in
Cagayan de Oro and in Manila, attended by Jaycees representatives from all over the world. He
was also the adviser of the Tacloban Chinese Chamber of Commerce, co-founder of the
Tacloban Community Chest; and a consistent donor to charitable institutions in Catbalogan,
Samar" (Decision in CA-G.R. No. 61925-R, pp. 26-27). Lao was also the operations manager of
the Tomas Lao Construction Company and the Thomas and James Developers that engaged in
multimillion-peso projects (​Ibid.,​ p. 28)

[46]​
​Boyer-Roxas v. Court of Appeals,​ G.R. No. 100866, July 14, 1992, 211 SCRA 470, 486.

[47]​
See: De Leon, The Corporation Code of the Philippines, 1993 ed., p. 225.

[48]​
​Ramirez v. Orientalist Co. & Fernandez,​ 38 Phil. 634(1918)

[49]​
Petition in G.R. Nos. 60958-59, pp. 15-17.

[50]​
​Drilon v. Court of Appeals​, 336 Phil. 949, 957 (1997)

[51]
​Cometa and State Investment Trust, Inc. v. Court of Appeals​, G.R. No. 124062, January 21,
1999, 301 SCRA 459,466.

[52]​
(154 Phil. 253 (1974)

[53]​
​Ibid.​, pp. 257-258.

[54]​
95 Phil. 919 (1954)

[55]​
​Peltan Development Inc. v. Court of Appeals​, 336 Phil. 824 (1997)

[56]​
68 Phil. 113 (1939)

[57]
Cited in ​Young v. Court of Appeals,​ G.R. No. 83271, May 8, 1991, 196 SCRA 795, 801 and
Naga Development Corporation v. Court of Appeals​, 148-B Phil. 591, 599 (1971)

[58]
​Albenson Enterprises Corporation v. Court of Appeals,​ G.R. No. 88694, January 11, 1993,
217 SCRA 16, 25 & 28.

[59]​
1 Regalado, Remedial Law Compendium, Vol. I (1988 ed.) 161.

[60]​
​Suntay v. Court of Appeals​, 321 Phil. 809 (1995)

[61]​
​Supra,​ p. 6.

[62]​
Section 2, Rule 32, Revised Rules of Court.

[63]​
Section 11, ​ibid.​
[64]​
​Saludo, Jr. vs. Court of Appeals​, 207 SCRA 498.

[65]​
​Sy vs. Mina,​ 164 SCRA 312.

[66]​
​Rollo​ of G.R. Nos. 60958-59, Vol. 11, p. 282.

[67]​
​Oarde v. Court of Appeals​, G.R. Nos. 104774-75, October 8, 1997, 280 SCRA 235, 250.

[68]​
Article 2232, Civil Code.

Source: Supreme Court E-Library |

Date created: April 20, 2015
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[ G.R. No. 106922, April 20, 2001 ]

FRANKLIN M. DRILON, AURELIO C. TRAMPE, FERDINAND R. ABESAMIS

AND EULOGIO MANANQUIL, PETITIONERS, VS. COURT OF APPEALS,
HON. ERIBERTO U. ROSARIO, JR., IN HIS CAPACITY AS PRESIDING
JUDGE OF BRANCH 66, REGIONAL TRIAL COURT OF MAKATI AND JUAN
PONCE ENRILE, RESPONDENTS.

DECISION

DE LEON, JR., J.:

Before us is a petition for review of the Decision​[1] of the Court of Appeals and Resolution​[2]
dated June 29, 1992 and August 27, 1992 respectively which affirmed the Order​[3] dated
October 8, 1991 of the Regional Trial Court of Makati City, Branch 66, in Civil Case No. 90-2327
denying petitioners' motion to dismiss as well as the Order​[4] dated January 6, 1992 denying
petitioners' motion for reconsideration.

The facts are as follows:

After the unsuccessful December 1989 ​coup d' etat, t​ he Department of Justice, then headed by
petitioner Franklin Drilon, referred to the Special Composite Team of Prosecutors (Team of
Prosecutors, for brevity), composed of co-petitioners Aurelio C. Trampe, Ferdinand R. Abesamis
and Eulogio Mananquil, a letter-complaint from the National Bureau of Investigation (NBI, for
brevity) requesting for the investigation of private respondent Juan Ponce Enrile for his alleged
participation in the said coup attempt.

Finding sufficient basis to continue the inquiry, the Team of Prosecutors issued a subpoena to
private respondent with an order to submit his counter-affidavit to the letter-complaint. Instead
of filing his counter-affidavit, private respondent filed a Petition for Summary Dismissal of the
charge against him. He also filed an urgent motion praying that he be given a notice of at least
five (5) days before the filing of any information against him to enable him to take the
appropriate legal action. At the same time, private respondent sent "cautionary letters" to all
judges in Quezon City, Manila, Makati and Pasay City requesting that he be apprised of any
information which may be filed against him and that he be given the opportunity to personally
witness the raffle of the case against him. Said notice also appeared in several newspapers of
general circulation.

On February 27, 1990, the Team of Prosecutors filed before the Regional Trial Court of Quezon
City an Information charging private respondent with the complex crime of rebellion with murder
and frustrated murder. The Team of Prosecutors likewise filed before the Regional Trial Court
of Makati City an Information charging, among others, private respondent with the offense of
obstruction of justice for harboring an alleged felon under Presidential Decree No. 1829. Private
respondent was later arrested and detained overnight at the NBI headquarters in Taft Avenue,
Manila, and, on the following day, transferred to a detention room at Camp Karingal in Quezon
City. The lawyers of private respondent also discovered that the information against the latter
was first filed on February 21, 1990, but was subsequently withdrawn for re-filing on February
27, 1990. After a petition for writ of ​habeas corpus was filed before this Court entitled ​Enrile v.
Salazar​[5]​, we granted private respondent's provisional liberty upon posting of a cash bond.

On June 5, 1990, in the same case of ​Enrile v. Salazar,​ we ordered the modification of the
Information before the RTC of Quezon City to simple rebellion only in consonance with our
ruling in ​People v. Hernandez[6]​
​ . On September 13, 1990, in ​Enrile v. Amin,[7]​
​ this Court ruled
that the filing of a separate information for obstruction of justice also violated the Hernandez
doctrine and accordingly ordered the quashal of the said information.

As a consequence of our said Order dated September 13, 1990, private respondent on August
20, 1990 filed a Complaint for damages, docketed as Civil Case No. 90-2327, before the
Regional Trial Court of Makati City while the rebellion case was still pending litigation. Private
respondent's complaint impleaded as defendants herein petitioners, then Solicitor General
Francisco Chavez and Judge Jaime Salazar. The complaint basically accuses the petitioners of
bad faith in filing the information for rebellion complexed with murder and frustrated murder.
Thus, the complaint alleges:

2.5 The so-called "preliminary investigation" of the charge against plaintiff was railroaded
from the very start. Plaintiff's pleas and motions asking for strict compliance with the rules of
procedure and the norms of fairness and justice were either ignored or summarily denied by the
investigating panel. Plaintiff, in utter frustration, filed a petition for summary dismissal of the
charge and, anticipating the denial of that as well, also filed an urgent motion to be given at
least five (5) days notice to enable him to take the appropriate legal action, before the filing of
any information against him.

xxx

3.1 All of the defendants, in and by all their actuations in connection with the information
for rebellion "complexed"... individually, collectively, and with unity of purposes and intentions,
illegally and unjustly caused, directed and prolonged plaintiff's arrest and detention without bail,
through the expediency of disregarding the Hernandez doctrine prohibiting the complexing of
rebellion with other crimes.

In and by all their aforementioned actuations, all of the defendants individually, collectively and
with unity of purposes and intentions -

(a) wilfully, manifestly and maliciously obstructed, defeated,

violated, impeded and impaired plaintiff's constitutional and
legal right to due process, right to be secure in his person
against unreasonable and unwarranted arrest, and right to
bail, as enshrined in Sections 1, 2 and 13 of Article 14(1) of
the Bill of Rights of the Constitution;

(b) grossly abused their rights and violated their duties as

citizens, as members of the legal profession, and as public
officers;

(c) willfully acted in contravention of the basic standards of

good faith and justice; and

(d) willfully acted in a manner contrary to law, morals and

public policy

- all causing great suffering and injury to plaintiff.

3.2 Defendants Chavez, Drilon, Trampe, Abesamis and Mananquil knowingly,

manifestly and maliciously abused and exceeded their duties and authority as public officials in
charge of the enforcement and prosecution of laws, as well as violated the tenets of good faith
and justice in human relations, by directly and actively advocating and indulging in what these
defendants had publicly admitted and described to be a "legal experimentation" consisting in the
knowing disregard and defiance of the well-established Hernandez doctrine.

Defendant Drilon and his co-defendants Trampe, Abesamis and Mananquil, being the head and
members, respectively, of the Department of Justice, by their above-alleged actuations, violated
their principal responsibility, as legal counsel and prosecutors, to administer the criminal justice
system in accordance with the established and accepted laws and processes.
Defendant Drilon, being the Secretary of Justice having supervision, control and direction over
the actuations of co-defendants Trampe, Abesamis and Mananquil violated the tenets of good
faith and justice in human relations and abused his official duties and authority, by, among
others, expressly instigating, authorizing, ordering and causing the filing of the information for
rebellion "complexed" against the plaintiff.

xxx

3.3. Defendants Drilon, Trampe, Abesamis and Mananquil filed or caused the filing of
the information for rebellion "complexed" with manifest bad faith, deception and duplicity, all in
violation of the tenets of good faith and justice in human relations and in gross abuse of their
duties and authority as public prosecutors "to see that justice is done." (Canon 6, Rule 6.01,
Lawyers' Code of Professional Responsibility).

More particularly, these defendants originally filed or caused the filing of the information ...on 21
February 1990 but, for some mysterious reason, the information was subsequently withdrawn.
The initial filing and withdrawal of the information - defendant Chavez admitted these facts
during the Supreme Court hearing on 6 March 1990 - were done in total secrecy and without
the knowledge of plaintiff who learned of this incident only after his arrest on 27 February 1990.

Likewise, on or about 27 February 1990, these defendants deliberately misled plaintiff and his
lawyers and induced them to believe that the charge of rebellion "complexed" was set to be filed
against the plaintiff in the Regional Trial Court of Makati. While plaintiff's attention was diverted
to the Regional Trial Court of Makati, these defendants surreptitiously filed or caused the filing
of main information for rebellion "complexed" in the Regional Trial Court of Quezon City.

All of the above-named defendants' actuations were meant to conceal from the public in general
and the plaintiff and his counsel in particular, the filing of the information and to prevent plaintiff
and his lawyers from witnessing the raffle and from questioning the irregularity of the
assignment, the validity of the information, the authority of the court to issue the warrant of
arrest, the obvious lack of probable cause, and, finally, to prevent plaintiff from posting bail.

xxx

3.5 The defendants' unfounded and malicious persecution of plaintiff, calculated to

malign the person and reputation of the plaintiff, a duly elected Senator of the country, has
caused and continues to cause plaintiff extreme suffering, mental anguish, moral shock and
social humiliation,...

3.6 The reckless and wanton conduct of the defendants who, as public officials, are
supposed to be the guardians of the democratic institutions and civil liberties of citizens, in
charging, taking cognizance of, and defending a non-existent crime, and in causing the
harassment and persecution of the plaintiff, should be strongly condemned...​[8]​x x x

On October 9, 1990, the petitioners filed a Motion to Dismiss for failure of the Complaint to state
a cause of action. They claimed that there was no allegation of any actionable wrong
constituting a violation of any of the legal rights of private respondent. In addition, they put up
the defense of good faith and immunity from suit, to wit:

THE COMPLAINT FAILS TO STATE A CAUSE OF ACTION AGAINST DEFENDANTS IN

THAT:

(A) THE FILING OF THE INFORMATION AGAINST

PLAINTIFF FOR THE CRIME OF REBELLION WITH
MURDER AND FRUSTRATED MURDER WAS INITIATED
IN THE HONEST BELIEF THAT IT COULD BE
SUSTAINED UNDER THE FIRST PART OF ARTICLE 48
OF THE REVISED PENAL CODE; and

(B) DEFENDANTS, ACTING IN GOOD FAITH, WITHOUT

MALICE AND WITHIN THE SCOPE OF THEIR
AUTHORITY, CANNOT BE HELD PERSONALLY LIABLE
BY WAY OF DAMAGES FOR ANY ALLEGED INJURY
SUFFERED BY PLAINTIFF.​[9] On October 8, 1991,
respondent trial court issued an Order denying the Motion
to Dismiss and requiring petitioners to file their answer and
to present evidence in support of their defenses in a
full-blown trial inasmuch as the defense of good faith and
immunity from suit does not appear to be indubitable.​[10]
Petitioners' motion for reconsideration was likewise denied.

Before the Court of Appeals, petitioner Trampe, in his own behalf and in behalf of his
co-petitioners, filed a petition for certiorari under Rule 65 of the Revised Rules of Court alleging
that the respondent court committed grave abuse of discretion in denying their motion to
dismiss. On June 29, 1992, respondent appellate court dismissed the petition and the
subsequent motion for reconsideration ruling, thus:

We cannot perceive how respondent court could have acted with grave abuse of discretion in
denying the motion to dismiss. Before respondent court were two diametrically opposed
contentions. Which to believe, respondent court is at a loss. Hence, respondent court had no
alternative but to be circumspect in acting upon the motion to dismiss. This respondent court
accomplished by requiring petitioners to file their answer where they can raise the failure of the
complaint to state a cause of action as an affirmative defense. Indeed the better alternative
would be to conduct a full blown trial during which the parties could present their respective
evidences to prove their respective cause of action/defense.​[11]

Hence, this instant petition.

In view of the appointment of petitioner Trampe to the judiciary, petitioner Abesamis filed a
manifestation stating that he would act as counsel for his own behalf and in behalf of his
co-petitioners. In a Resolution dated March 8, 1993, we granted the Manifestation of petitioner
Abesamis to substitute for petitioner Trampe as counsel for himself and his co-petitioners.
Respondent did not file a motion for reconsideration.

Meanwhile, on February 12, 1993, or almost three (3) years after the filing of the complaint for
damages against petitioners, the Regional Trial Court of Makati dismissed with finality the
rebellion charges against private respondent​[12]​.

In their Memorandum,​[13]​petitioners raise the following assignment of errors:

THE RESPONDENT COURT HAS DECIDED A QUESTION OF SUBSTANCE IN A MANNER

NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT BY HOLDING THAT THE RESPONDENT JUDGE DID NOT ACT WITH
GRAVE ABUSE OF DISCRETION IN DENYING THE MOTION TO DISMISS FILED BY THE
PETITIONERS AND THAT IN ANY EVENT, THE DENIAL OF A MOTION TO DISMISS IS NOT
SUBJECT TO REVIEW BY CERTIORARI.

II

PETITIONER TRAMPE ACTED CORRECTLY IN REPRESENTING AND APPEARING ON

BEHALF OF THE OTHER PETITIONERS IN THE INSTANT PETITION. MOREOVER, BY HIS
LONG SILENCE AND INACTION, PRIVATE RESPONDENT CANNOT NOW QUESTION THE
PERSONALITY OF PETITIONER TRAMPE TO REPRESENT AND APPEAR ON BEHALF OF
THE OTHER PETITIONERS HEREIN.

Before ruling on the substance of the petition, let us first deal with the legal personalities of
petitioners Trampe and Abesamis to represent themselves and the rest of the petitioners in the
case at bar. Private respondent avers that Trampe's representation is a nullity for the reason
that under the Revised Administrative Code, it is not the function of the Office of the Chief State
Prosecutor to represent its prosecutors in suits that may be filed against them. Private
respondent likewise argues that Trampe and Abesamis are prohibited from acting as private
counsels for their co-petitioners inasmuch as it violates Republic Act No. 6713, the "Code of
Conduct and Ethical Standards for Public Officials and Employees."

It must be noted that petitioner Abesamis filed a Manifestation​[14] before this Court asking that he
be permitted to replace petitioner Trampe as counsel for the petitioners in view of Trampe's
appointment to the judiciary. No opposition thereto was filed by private respondent. Thus, we
granted the manifestation of petitioner Abesamis to substitute for Trampe as counsel for and in
behalf of himself and his co-petitioners. There being no motion for reconsideration filed by
private respondent, said resolution has become final. Private respondent did not dispute the
legal personality of petitioner Trampe to represent himself and his co-petitioners in his
Comment​[15] filed before the Court of Appeals. Private respondent belatedly raised this
contention in his opposition​[16] to the motion for reconsideration of the appellate court's decision.
Accordingly, private respondent is estopped and legally barred from questioning the
representation of petitioners Trampe and later, Abesamis to act as counsel for themselves and
their co-petitioners in this case.

Going now to the crux of the petition, petitioners contend that the complaint sets forth no cause
of action against them. They allege good faith, regularity in the performance of official duties
and lack of ultimate facts constituting an actionable wrong. On the other hand, private
respondent argues that a cause of action has been sufficiently pleaded and that the defenses of
good faith and performance of official duties are best disposed in a judicial hearing. Private
respondent likewise maintains that the defense of good faith is irrelevant for the reason that the
petitioners are sued under Article 32 of the New Civil Code where the defense of good faith is
irrelevant.

We find merit in the petition.

A cause of action is the act or omission by which a party violates a right of another.​[17] A cause
of action exists if the following elements are present: (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 defendant to the plaintiff for which the latter may maintain an action for recovery of
damages.​[18] The remedy of a party whenever the complaint does not allege a cause of action is
to set up this defense in a motion to dismiss or in the answer. A motion to dismiss on the
ground of failure to state a cause of action in the complaint hypothetically admits the truth of the
facts alleged therein. However, the hypothetical admission is limited to the "relevant and
material facts well pleaded in the complaint and inferences fairly deductible therefrom. The
admission does not extend to conclusion or interpretations of law; nor does it cover allegations
of fact the falsity of which is subject to judicial notice."​[19] In ​De Dios v. Bristol Laboratories
(Phils.), Inc.,​[20]​this Court was more particular in explaining that:
xxx. For the purpose, the motion to dismiss must hypothetically admit the truth of the facts
alleged in the complaint. The admission, however, is limited only to all material and relevant
facts which are well pleaded in the complaint. Thus, it had been ruled that a demurrer admits
only such matters of fact as are sufficiently pleaded; that the demurrer does not admit the truth
of mere epithets charging fraud; nor allegations of legal conclusions; nor an erroneous
statement of law. The admission of the truth of material and relevant facts well pleaded does
not extend to render a demurrer an admission of inferences or conclusions drawn therefrom,
even if alleged in the pleading ; nor mere influences or conclusions from facts not stated; nor
conclusions of law; nor matters of evidence; nor surplusage and irrelevant matter.xxx.

The main question in the instant petition is whether the allegations in the complaint sufficiently
plead a cause of action to hold the petitioners liable for damages. According to the complaint,
the petitioners violated private respondent's constitutional rights for knowingly and maliciously
filing a legally non-existent offense and for depriving him of his right to be notified of the filing of
the case against him. Inasmuch as private respondent seeks to hold the petitioners
accountable for the damage he has suffered as a result of the case filed against him, his suit
against the petitioners is one for malicious prosecution. In ​Drilon v. Court of Appeals,[21]​ where
[22]
the facts in said case are basically the same as in the instant case,​ we also labeled the
complaint filed by complainant Homobono Adaza as one for malicious prosecution. It is defined
as an action for damages brought by one against whom a criminal prosecution, civil suit, or
other legal proceeding has been instituted maliciously and without probable cause, after the
termination of such prosecution, suit, or other proceeding in favor of the defendant therein. The
gist of the action is the putting of legal process in force, regularly, for the mere purpose of
vexation or injury.​[23] The statutory bases for a civil action for damages for malicious prosecution
are found in the provisions of the New Civil Code on Human Relations and on damages
particularly Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217 and 2219(8).​[24] A complaint for
malicious prosecution states a cause of action if it alleges: 1) that the defendant was himself
the prosecutor or that at least he instigated the prosecution; 2) that the prosecution finally
terminated in the plaintiff's acquittal; 3) that in bringing the action the prosecutor acted without
probable cause; and, 4) that the prosecutor was actuated by malice, i.e., by improper and
sinister motives.​[25] We have no reason to depart from our ruling in the said ​Drilon case. It is our
view and we hold that private respondent's complaint fails to state a cause of action to hold the
petitioners liable for malicious prosecution.

First, the complaint for damages was filed long before private respondent's acquittal in the
rebellion charge thereby rendering the subject action premature. At the time the complaint was
filed, the criminal action against private respondent has not yet ended. That the criminal case
eventually resulted in private respondent's acquittal during the pendency of the civil case for
damages is of no moment inasmuch as the latter should be filed only after the accused is
acquitted in the criminal case. To allow private respondent to file a complaint, for damages
based on malicious prosecution, before his acquittal would stifle the prosecution of criminal
cases by the mere expediency of filing damage suits against the prosecutors.
The complaint for damages cannot be based on the dismissal of the separate charge for
violation of P.D. No. 1829 inasmuch as the complaint does not contain any allegation to that
effect. The complaint actually limits the claim for damages based on the filing of the rebellion
charge against the petitioners. Hence, it cannot be sustained based on the dismissal of the
case for violation of P.D. No. 1829.

Second, there are no factual allegations in the complaint that can support a finding that malice
and bad faith motivated the petitioners in filing the information against private respondent.
Allegations of bad faith, malice and other related words without ultimate facts to support the
same are mere conclusions of law that are not deemed admitted in a motion to dismiss for lack
of cause of action. From our reading of the complaint, we find no ultimate facts to buttress
these conclusions of law.

In ​Drilon,​ this Court held that;

xxx xxx xxx

Lack of cause of action, as a ground for a motion to dismiss... must appear on the face of the
complaint itself, meaning that it must be determined from the allegations of the complaint and
from none other. The infirmity of the complaint in this regard is only too obvious to have
escaped respondent judge's attention. Paragraph 14 of the complaint which states:

xxx xxx xxx

14. The malicious prosecution, nay persecution, of plaintiff for a non-existent crime had
severely injured and besmirched plaintiff's name and reputation and forever stigmatized his
stature as a public figure, thereby causing him extreme physical suffering , serious anxiety,
mental anguish, moral shock and social humiliation."

is a mere conclusion of law and is not an averment or allegation of ultimate facts. It does not,
therefore, aid in any wise the complaint in setting forth a valid cause of action against the
petitioners.

xxx xxx xxx

The allegations of bad faith and malice in the complaint are based on the ground that the
petitioners knowingly and allegedly maliciously filed the information for an offense that does not
exist in the statute books. But as we have ruled in ​Drilon:​

In the case under consideration, the decision of the Special Team of Prosecutors to file the
information for rebellion with murder and frustrated murder against respondent Adaza, among
others, cannot be dismissed as the mere product of whim or caprice on the part of the
prosecutors who conducted the preliminary investigation... While it is true that the petitioners
were fully aware of the prevailing jurisprudence enunciated in ​People v. Hernandez​, which
proscribes the complexing of murder and other common crimes with rebellion, petitioners were
of the honest conviction that the ​Hernandez Case can be differentiated from the present case.
The petitioners thus argued:

"Of course we are aware of the ruling in People v. Hernandez, 99 Phil 515, which held that
common crimes like murder, arson, etc., are absorbed by rebellion. However, the Hernandez
case is different from the present case before us. In the Hernandez case, the common crimes
of murder, arson, etc. were found by the fiscal to have been committed as a necessary means
to commit rebellion, or in furtherance thereof. Thus, the fiscal filed an information for rebellion
alleging those common crimes as a necessary means of committing the offense charged under
the second part of Article 48, RPC.

We, however, find no occasion to apply the Hernandez ruling since as intimated above, the
crimes of murder and frustrated murder in this case were absolutely unnecessary to commit
rebellion although they were the natural consequences of the unlawful bombing. Hence, the
applicable provision is the first part of Article 48 of the RPC."

While the Supreme Court in the case of ​Enrile v. Salazar​, addressing the issue of whether or not
the Hernandez doctrine is still good law, in a 10-3 vote, did not sustain the position espoused by
the herein petitioners on the matter, three justices felt the need to re-study the Hernandez ruling
in light of present-day developments, among whom was then Chief Justice Marcelo Fernan...

xxx

Apparently, not even the Supreme Court then was of one mind in debunking the theory being
advanced by the petitioners in this case, some of whom were also the petitioners in the ​Enrile
case.

xxx

A doubtful or difficult question of law may become the basis of good faith and, in this regard, the
law always accords to public officials the presumption of good faith and regularity in the
performance of official duties.[Tatad v. Garcia, Jr., 243 SCRA 436, 463 (1995)] Any person who
seeks to establish otherwise has the burden of proving bad faith or ill-motive. Here, since the
petitioners were of the honest conviction that there was probable cause to hold respondent
Adaza for trial for the crime of rebellion with murder and frustrated murder, and since Adaza
himself, through counsel , did not allege in his complaint lack of probable cause, we find that the
petitioners cannot be held liable for malicious prosecution. Needless to say, probable cause
was not wanting in the institution of Criminal Case No. Q-90-11855 against Adaza.

As to the requirement that the prosecutor must be impelled by malice in bringing the unfounded
action, suffice it to state that the presence of probable cause signifies, as a legal consequence,
the absence of malice.(Albenson Enterprises Corp., ​supra​.) At the risk of being repetitious, it is
evident in this case that petitioners were not motivated by malicious intent or by a sinister
design to unduly harass private respondent, but only by a well-founded belief that respondent
Adaza can be held for trial for the crime alleged in the information.

All told, the complaint, dated July 11, 1990, filed by Adaza before Branch 100 of the Regional
Trial Court against the petitioners does not allege facts sufficient to constitute a cause of action
for malicious prosecution. xxx

xxx

As a result, these general allegations do not help private respondent's action against petitioners.
It is well settled that one cannot be held liable for allegedly maliciously instituting a prosecution
where there is probable cause. Otherwise stated, a suit for malicious prosecution will lie only in
cases where a legal prosecution has been carried on without probable cause. The reason for
this rule is that it would be a very great discouragement to public justice, if prosecutors, who had
tolerable ground of suspicion, were liable to be sued at law when their indictment miscarried. [26]​
On the issue of whether the petitioners should be held accountable for knowingly filing a
non-existent offense, this Court has definitely ruled in ​Enrile v. Salazar t​ hat:

The plaint of petitioner's (herein private respondent) counsel that he is charged with a crime that
does not exist in the statute books, while technically correct in so far as the Court has ruled that
rebellion may not be complexed with other offenses committed on the occasion thereof, must
therefore be dismissed as a mere flight of rhetoric. Read in the context of ​Hernandez,​ the
information does indeed charge the petitioner with a crime defined and punished by the Revised
Penal code: simple rebellion.​[27]

Accordingly, despite its defect, the information filed by petitioners remained valid inasmuch as it
nevertheless charges an offense against the herein private respondent.

With respect to private respondent's second basis for the charge of malicious prosecution, that
is, he was denied by the petitioners the right to be notified before the criminal information
against him, his complaint alleges that:

xxx

More particularly, these defendants originally filed or caused the filing of the information ...on 21
February 1990 but, for some mysterious reason, the information was subsequently withdrawn.
The initial filing and withdrawal of the information - defendant Chavez admitted these facts
during the Supreme Court hearing on 6 March 1990 - were done in total secrecy and without the
knowledge of plaintiff who learned of this incident only after his arrest on 27 February 1990.
Likewise, on or about 27 February 1990, these defendants deliberately misled plaintiff and his
lawyers and induced them to believe that the charge of rebellion "complexed" was set to be filed
against the plaintiff in the Regional Trial Court of Makati. While plaintiff's attention was diverted
to the Regional Trial Court of Makati, these defendants surreptitiously filed or caused the filing
of the main information for rebellion "complexed" in the Regional Trial court of Quezon City.​[28]
xxx

However, we hold that the said allegations still fail to maintain a cause of action against the
petitioners. To reiterate, a cause of action exists if the following elements are present: (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 defendant to the plaintiff for which the latter may
maintain an action for recovery of damages.​[29]

In the case at bar, we fail to see any right of the private respondent supposedly violated by the
petitioners. Nowhere in the statute books is a prospective accused given the right to be notified
beforehand of the filing of an information against him. Likewise, the withdrawal of the
information and the subsequent re-filing of the same do not constitute an actionable wrong
inasmuch as the filing or re-filing of an information lies within the discretion of the prosecutor
who must act independently of the affected parties.

Private respondent claims that an appeal or an original action for certiorari is not the proper
remedy for a defendant whose motion to dismiss has been denied by the trial court for the
reason that the order does not terminate the proceedings, nor finally dispose of the contentions
of the parties. In its decision affirming the trial court's denial of the motion to dismiss, the
appellate court sustained this contention. However, as correctly pointed out by the petitioners,
the rule admits of an exception. Thus, where the denial of the motion to dismiss by the trial
court was tainted with grave abuse of discretion amounting to lack or excess of jurisdiction, as in
the case at bar, the aggrieved party may assail the order of denial on certiorari.​[30] A wide
breadth of discretion is granted in certiorari proceedings in the interest of substantial justice and
to prevent a substantial wrong.​[31] In the ​Drilon ​case, we also held that the denial by the trial
court of the motion to dismiss of herein petitioners based on the same grounds as in the instant
petition constituted grave abuse of discretion for the reason that "this (private respondent's
baseless action) would unjustly compel the petitioners to needlessly go through a protracted trial
and thereby unduly burden the court with one more futile and inconsequential case." [32] ​ The
appellate court therefore erred in not ruling that the trial court committed a grave abuse of
discretion when the latter refused to dismiss the case as against herein petitioners,
notwithstanding the obvious insufficiency of the complaint against them.

WHEREFORE​, the petition is GRANTED. The Decision dated June 29, 1992 of respondent
Court of Appeals and its Resolution dated August 27, 1992 which affirmed the Orders of the
respondent Regional Trial Court of Makati City, dated October 8, 1991 and January 6, 1992 are
hereby NULLIFIED AND SET ASIDE. The respondent Regional Trial Court of Makati is hereby
ordered to take no further action in Civil Case No. 90-2327 except to dismiss the same.

SO ORDERED.

Bellosillo, (Chairman), Mendoza,Quisumbing,​ and ​Buena, JJ.,​ concur.

[1]
Penned by Associate Justice Eduardo R. Bengzon, and concurred in by Associate Justices
Lorna S. Lombos-de la Fuente and Quirino D. Abad Santos, Jr.; Court of Appeals ​Rollo,​ pp.
159-167.

[2]​
Court of Appeals ​Rollo,​ p. 186.

[3]​
​Rollo,​ pp. 93-95.

[4]​
​Rollo, ​pp. 96-102.

[5]​
186 SCRA 218 (1990).

[6]​
99 Phil 515 (1956).

[7]​
189 SCRA 573 (1990).

[8]​
​Rollo,​ pp. 40-54.

[9]​
​Rollo,​ p. 72.

[10]​
​Rollo,​ p. 94.

[11]​
​Rollo,​ pp. 110-111.

[12]​
​Rollo,​ p. 305.

[13]​
​Rollo,​ pp. 269-270, 287.

[14]​
​Rollo,​ p. 201.

[15]​
Court of Appeals ​Rollo,​ pp. 129-156.

[16]​
Court of Appeals ​Rollo,​ pp. 179-183.
[17]​
Revised Rules of Civil Procedure, Rule 3, Sec. 2.

[18]​
Vergara v. Court of Appeals, 319 SCRA 323, 327 (1999).

[19]​
San Lorenzo Village Association, Inc. v. Court of Appeals, 288 SCRA 115, 126 (1998).

[20]​
55 SCRA 349, 354 (1974).

[21]​
270 SCRA 211 (1997).

[22]
Homobono Adaza was charged by the Special Team of Prosecutors composed of herein
petitioners and supervised by petitioner Drilon, with the crime of rebellion complexed with
murder and frustrated murder. Before the criminal case was terminated, Adaza then filed a
complaint for damages against the same petitioners for engaging in a deliberate, willful and
malicious experimentation by filing against him a charge of rebellion complexed with murder and
frustrated murder when petitioners, according to Adaza, were fully aware of the non-existence of
such crime in the statue books.

[23]​
​Supra, ​note 21, p. 220, ​citing C
​ abasaan v. Anota, 14169-R, November 19, 1956.

[24]
I​ d., citing Albenson Enterprises Corp. v. Court of Appeals, 217 SCRA 16, 28 (1993); Ponce v.
Legaspi, 208 SCRA 377, 388 (1992); 199 SCRA 63, 68-70 (1991).

[25]​
Cometa v. Court of Appeals, 301 SCRA 459, 466 (1999).

[26]
​Supra,​ note 21, p. 222 ​citing ​Albenson Enterprises Corp. v. Court of Appeals, 217 SCRA 16,
28 (1993); Que v. Intermediate Appellate Court, 169 SCRA 137 (1989).

[27]​
​Supra,​ note 5, p. 229.

[28]​
​Rollo,​ pp. 50-51.

[29]​
​Supra,​ note 18.

[30]
Gutib v. Court of Appeals, 312 SCRA 365, 378 (1999); Dizon v. Court of Appeals, 210 SCRA
107 (1992); Quisumbing v. Gumban, 193 SCRA 520 (1991); National Investment and
Development Corporation v. Aquino, 163 SCRA 153 (1988).

[31]​
Gutib v. Court of Appeals, 312 SCRA 365, 378 (1999).

[32]​
​Supra,​ note 21, p. 226.
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c. Public Humiliation

[ G.R. No. 51832, April 26, 1989 ]

RAFAEL PATRICIO, PETITIONER, VS. THE HONORABLE OSCAR LEVISTE,

JUDGE, CFI CAPIZ, BRANCH II, AND BIENVENIDO BACALOCOS,
RESPONDENTS.

DECISION

PADILLA, J.:

Petition for review on ​certiorari of the Order​[1] of the Court of First Instance of Capiz, Branch II,
on the motion for reconsideration filed by private respondent Bienvenido Bacalocos, dismissing
the complaint for damages against the latter, docketed as Civil Case No. V-3937.
Petitioner Rafael Patricio an ordained Catholic priest, and actively engaged in social and civic
affairs in Pilar, Capiz, where he is residing, was appointed Director General of the 1976
Religious and Municipal Town Fiesta of Pilar, Capiz.
On 16 May 1976 at about 10:00 o'clock in the evening, while a benefit dance was on-going in
connection with the celebration of the town fiesta, petitioner together with two (2) policemen
were posted near the gate of the public audito​rium to check on the assigned watchers of the
gate. Private respondent Bienvenido Bacalocos, President of the Association of Barangay
Captains of Pilar, Capiz and a member of the Sangguniang Bayan, who was in a state of
drunkenness and standing near the same gate together with his companions, struck a bottle of
beer on the table causing an injury on his hand which started to bleed. Then, he approached
petitioner in a hostile manner and asked the latter if he had seen his wounded hand, and before
petitioner could respond, private respondent, without provocation, hit petitioner's face with his
bloodied hand. As a consequence, a commotion ensued and private respondent was brought
by the policemen to the municipal building.​[2]
As a result of the incident, a criminal complaint for "Slander by Deed" was filed by petitioner with
the Municipal Trial Court of Pilar, Capiz, docketed as Criminal Case No. 2228, but the same was
dismissed.​[3] Subsequently, a complaint for damages was filed by petitioner with the court ​a ​quo​.
In a decision,​[4] dated 18 April 1978, the court ruled in favor of herein petitioner (as complainant),
holding private respondent liable to the former for moral damages as a result of the physical
suffering, moral shock and social humiliation caused by private respondent's act of hitting
petitioner on the face in public. The dispositive part of the decision reads as follows:
"WHEREFORE, the Court orders defendant to pay plaintiff the damages as follows:
a)​ ​Moral damages of P10,000.00
b)​ ​Exemplary damages, P1,000.00 and
c)​ ​Attorney's fees, P2,000.00.
SO ORDERED."​[5]
On 9 June 1978, petitioner filed a motion for execution of judgment, alleging that the 18 April
1978 decision had become final and executory after the lapse of thirty (30) days from receipt
thereof by private respondent, without any motion for reconsideration or appeal having been
filed.​[6] However, said motion was denied by the court ​a ​quo on the ground that there was a
pending motion for reconsideration filed by private respondent.​[7] Subsequently, private
respondent filed a supplemental motion for reconsideration​[8] and the court ordered petitioner to
file a reply (opposition) thereto.​[9] In compliance, petitioner filed a reply (opposition) to the motion
for reconsideration, alleging that the filing of said motion and supplement thereto was without
notice to the adverse party and proof of service, hence, the decision sought to be reconsidered
had already become final and unappealable.​[10]
Private respondent filed a rejoinder (reply) and a manifestation stating that petitioner was duly
served with a copy of said motion for reconsideration by ​ordinary ​mail​, attaching thereto the
affidavit of Godofredo Almazol who stated that he mailed the envelope to counsel for herein
petitioner.​[11] The court ​a ​quo then scheduled the motion for oral argument and the parties were
allowed to extensively argue their respective causes.
On 3 August 1979, an order​[12] of dismissal of the petitioner's complaint was issued by the trial
court, thus -
"O R D E R
This is a motion for reconsideration of the decision of this Court dated April 18, 1978, filed by
counsel for defendant on May 18, 1978.
In view of the recent trend in the Supreme Court to liberally construe the Rules, and in view of
Section 2, Rule 1, the Court resolves to give due course to the motion.
Upon review of the facts of the case, it appears and the Court finds merit in the motion for
reconsideration, particularly noting that there is indeed no showing of compensatory damages
being proved.
WHEREFORE, this Court reconsiders its decision to conform to the facts and the law, namely,
that moral and exemplary damages, in order to merit, the plaintiff ought to have proven actual or
compensatory damages.
WHEREFORE, this case is ordered dismissed.
SO ORDERED."
Not satisfied with said order, petitioner filed the petition at bar contending that no copy of the
Motion for Reconsideration was served upon petitioner and no proof of service as well as notice
of hearing were attached to said motion when filed with the court ​a ​quo​; thus, the motion for
reconsideration did not interrupt the running of the period to appeal. The alleged mailing of a
copy of said motion by ordinary mail did not, according to petitioner, cure the defect. Petitioner
further argues that respondent's admission that he slapped herein petitioner in public causing
him physical suffering and social humiliation, entitles the latter to moral damages. Actual and
compensatory damages need not be proven before an award of moral damages can be
granted, so petitioner contends.
On the other hand, private respondent claims that the order of the court ​a ​quo apprising
petitioner of the motion for reconsideration filed by private respondent and requiring the former
to file a reply (opposition) thereto, had cured the defect of lack of proof of service and notice of
hearing of said motion for reconsideration: and that the award of moral damages to petitioner is
without basis for lack of proof of bad faith on the part of private respondent.
With respect to the alleged lack of service on petitioner of a copy of the motion and notice of
hearing and failure to attach to the motion proof of service thereof, the general rule is that notice
of motion is required where a party has a right to resist the relief sought by the motion and
principles of natural justice demand that his rights be not affected without an opportunity to be
heard.​[13]
In the case at bar, a copy of the motion for reconsideration was served upon petitioner, although
service was effected through ordinary mail and not by registered mail as required by the rules.
But, petitioner was duly given the full opportunity to be heard and to argue his case when the
court ​a ​quo required him to file a reply (opposition) to the motion for reconsideration and
subsequently set the motion for oral argument.
What the law really eschews is not the lack of previous notice of hearing but the lack of
opportunity to be heard. It has been held that parties should not rely on mere technicalities
which, in the interest of justice, may be relaxed.​[14] The rules of procedure should be viewed as
mere tools designed to facilitate the attainment of justice. Their strict and rigid application,
which would result in technicalities that tend to frustrate rather than promote substantial justice,
must be avoided.​[15] Moreover, the case should, as much as possible, be decided on the merits
and not merely on technicalities.
As to the petitioner's claim for moral damages, we find the same to be meritorious. There is no
question that moral damages may be recovered in cases where a defendant's wrongful act or
omission has caused the complainant physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury.​[16]
An award of moral damages is allowed in cases specified or analogous to those provided in
Article 2219 of the Civil Code to wit:
"ART. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
xxx xxx x x x”
Private respondent's contention that there was no bad faith on his part in slapping petitioner on
the face and that the incident was merely accidental is not tenable. It was established before
the court ​a ​quo that there was an existing feud between the families of both petitioner and
private respondent and that private respondent slapped the petitioner without provocation in the
presence of several persons.
The act of private respondent in hitting petitioner on the face is contrary to morals and good
customs and caused the petitioner mental anguish, moral shock wounded feelings and social
humiliation. Private respondent has to take full responsibility for his act and his claim that he
was unaware of what he had done to petitioner because of drunkenness is definitely no excuse
and does not relieve him of his liability to the latter.
Pursuant to Art. 21 of the Civil Code in relation to par. (10) of Art. 2219 of the same Code, "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 the damage."
The fact that no actual or compensatory damage was proven before the trial court, does not
adversely affect petitioner's right to recover moral damages. Moral damages may be awarded
in appropriate cases referred to in the chapter on human relations of the Civil Code (Articles 19
to 36), without need of proof that the wrongful act complained of had caused any physical injury
upon the complainant.​[17] It is clear from the report of the Code Commission that the reason
underlying an award of damages under Art. 21 of the Civil Code is to compensate the injured
party for the ​moral injury​ caused upon his person, thus -
"x x x. Fully sensible that there are countless gaps in the statutes, which leave so many victims
of moral wrongs helpless, even though they have actually suffered material and moral injury, the
Commission has deemed it necessary, in the interest of justice, to incorporate in the proposed
Civil Code the following rule:
'ART. 23. 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 the damage.'
xxx xxx x x x."​[18]
In addition to the award of moral damages, exemplary or corrective damages may be imposed
upon herein private respondent by way of example or correction for the public good.​[19]
Exemplary damages are required by public policy to suppress the wanton acts of the offender.
They are an antidote so that the poison of wickedness may not run through the body politic.​[20]
The amount of exemplary damages need not be proved where it is shown that plaintiff is entitled
to either moral, temperate or compensatory damages, as the case may be,​[21] although such
award cannot be recovered as a matter of right.​[22]
In cases where exemplary damages are awarded to the injured party, attorney's fees are also
recoverable.​[23]
WHEREFORE, the petition is GRANTED. The order appealed from, dated 3 August 1979, is
REVERSED and the decision of the court ​a ​quo dated 18 April 1978 is hereby REINSTATED.
With costs against private respondent.
SO ORDERED.

​ nd​ Regalado, JJ., c​ oncur.

Melencio-Herrera, (Chairman), Paras, Sarmiento a
[1]​
Penned by Judge Oscar Leviste, dated 3 August 1979, ​Rollo,​ p. 46
[2]​
​Rollo,​ p. 22
[3]​
Memorandum for private respondent, ​Rollo​, p. 80
[4]​
Penned by Judge Oscar Leviste, CFI of Capiz, Branch II, ​Rollo,​ pp. 13-26
[5]​
​Rollo,​ p. 26
[6]​
​Ibid​., p. 31
[7]​
Order dated 16 June 1978, ​Rollo​ p. 33
[8]​
​Rollo,​ p. 34
[9]​
​Ibid​., p. 36
[10]​
​Rollo,​ pp. 37-39
[11]​
​Ibid​., pp. 40-43
[12]​
​Ibid​., p. 46
[13]​
Amante ​v​. Sunga, G.R. No. L-40491, 28 May 1975, 64 SCRA 192
[14]​
Un Giok ​vs​. Matusa, 101 Phil., 272, G.R. No. L-10304, 31 May 1957
[15]​
Aznar III ​vs​. Bernad, G.R. No. 81190, 9 May 1988
[16]​
Art. 2217, Civil Code
[17]​
Malonzo ​v.​ Galang, G.R. No. L-13851, 27 July 1960, 109 Phil. 16.
[18]​
Report of the Code Commission, pp. 39-40
[19]​
Art. 2229, Civil Code
[20]​
Report of the Code Commission, pp. 75-76
[21]​
Art. 2234, Civil Code
[22]​
Art. 2233, ​Ibid​.
[23]​
Tan Kapoe ​v​. Masa, G.R. No. L-50473, 21 Jan. 1985, 134 SCRA 231

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[ G.R.No. L-48250, December 28, 1979 ]

GRAND UNION SUPERMARKET, INC. AND NELIA SANTOS FANDINO,

PETITIONERS, VS. JOSE J. ESPINO, JR., AND THE HONORABLE COURT
OF APPEALS, RESPONDENTS.

DECISION

GUERRERO, J.:

This is a petition for ​certiorari by way of appeal from the decision of the Court of Appeals​[1] dated
September 26, 1977 rendered in CA-G.R. No. 55186-R entitled "​Jose J. Espino, Jr.,
plaintiff-appellant, versus Grand Union Supermarket, Inc. and Nelia Santos-Fandino,
defendants-appellees,'"​ the dispositive portion of which states:
"WHEREFORE, the appealed judgment is hereby reversed and set aside. Defendants are
ordered to pay plaintiff-jointly and severally, the sum of Seventy-Five Thousand Pesos
(P75,000.00) by way of moral damages, Twenty-Five Thousand Pesos (P25,000.00), as
exemplary damages, and Five Thousand Pesos (P5,000.00) as attorney's fee. Costs of both
instances shall be taxed against the defendants."
The facts of the case are as stated in the decision of the respondent court, to wit:

"Upon the evidence, and from the findings of the lower court, it appears that in the morning of
August 22, 1970, plaintiff Jose J. Espino, Jr., a civil engineer and an executive of Procter and
Gamble Philippines, Inc., and his wife and their two daughters went to shop at the defendants'
South Supermarket in Makati. While his wife was shopping at the groceries section, plaintiff
browsed around the other parts of the market. Finding a cylindrical "rat tail" file which he needed
in his hobby and had been wanting to buy, plaintiff picked up that item from one of the shelves.
He held it in his hand thinking that it might be lost, because of its tiny size, if he put it in his
wife's grocery cart. In the course of theii shopping, plaintiff and his wife saw the maid of plaintiff
s aunt. While talking to this maid, plaintiff stuck the file into the front breast pocket of his shirt
with a good part of the merchandise exposed.

"At the check-out counter, the plaintiff paid for his wife's purchases which amounted to P77.00,
but he forgot to pay for the file. As he was leaving by the exit of the supermarket on his way to
his car, carrying two bags of groceries and accompanied by his wife and two daughters, plaintiff
was approached by a uniformed guard of the supermarket who said: "Excuse me, Mr., I think
you have something in your pocket which you have not paid for." (p, 5, ten, Aug. 13, 1971),
pointing to his left front breast pocket. Suddenly reminded of the file, plaintiff apologized thus: I
am sorry." and he turned back toward the cashier to pay for the file. But the guard stopped him
and led him instead toward the rear of the supermarket. The plaintiff protested but the guard
was firm saying: "No, Mr., please come with me. It is the procedure of the supermarket to bring
people that we apprehend to the back of the supermarket" (p. 8, ibid.). The time was between 9
and 10 o'clock. A crowd of customers on their way into the supermarket saw the plaintiff being
stopped and led by a uniformed guard toward the rear of the supermarket, Plaintiff acquiesced
and signaled to his wife and daughters to wait.

''Into a cubicle which was immediately adjacent to the area where deliveries to the supermarket
were being made, the plaintiff was ushered. The guard directed him to a table and gave the file
to the man seated at the desk. Another man stood beside the plaintiff. The man at the desk
looked at the plaintiff and the latter immediately explained the circumstances that led to the
finding of the file in his possession. The man at the desk pulled out a sheet of paper and began
to ask plaintiffs name, age, residence and other personal data. Plaintiff was asked to make a
brief statement, and on the sheet of paper or "Incident Report" he wrote down the following;
"While talking to my aunt's maid with my wife, 1 put this item in my shirt pocket. I forgot to check
it out with my wife's items" (Exhibit A). Meanwhile, the plaintiffs wife joined him and asked what
had taken him so long.

"The guard who had accosted plaintiff took him back inside the supermarket in the company of
his wife. Plaintiff and his wife were directed across the main entrance to the shopping area,
down the line of check-out counters, to a desk beside the first checkout counter. To the woman
seated at the desk, who turned out to be defendant Nelia Santos-Fandino, the guard presented
the incident report and the file, Exhibit B. Defendant Fandino read the report and addressing the
guard remarked: "​Ano; nakaw na naman ito" (p. 22, Id.). Plaintiff explained and narrated the
incident that led to the finding of the file in his pocket, telling Fandino that he was going to pay
for the file because he needed it. But this defendant replied: "That is all they all say, the people
whom we caught not paying for the goods say ... They all intended to pay for the things that are
found to them." (p. 23, Id.). Plaintiff objected and said that he was a regular customer of the
supermarket.

"Extracting a P5.00 bill from his pocket, plaintiff told Fandino that he was paying for the file
whose cost was P3.85. Fandino reached over and took the P5.00 bill from plaintiff with these
words: "We are fining you £5.00. That is your fine." Plaintiff was shocked. He and his wife
objected vigorously that he was not a common criminal, and they wanted to get back the P5.00.
But Fandino told them that the money would be given as an incentive to the guards who
apprehend pilferers. People were milling around them and staring at the plaintiff. Plaintiff gave
up the discussion. He drew a P50.00 bill and took back the file. Fandino directed him to the
nearest check-out counter where he had to fall in line. The people who heard the exchange of
words between Fandino and plaintiff continued to stare at him. At the trial, plaintiff expressed his
embarrassment and humiliation thus: "I felt as though I wanted to disappear into a hole on the
ground" (p. 34, id.). After paying for the file, plaintiff and his wife walked as fast as they could out
of the supermarket. His first was to go back to the supermarket that night to throw rocks at its
glass windows. But reason prevailed over passion and he thought that justice should take its
due course.

"Plaintiff was certain during the trial that he signed the incident report, Exhibit A, inside the
cubicle at the back of the supermarket only his brief statement of the facts (Exhibit A-2), aside
from his name and personal circumstances, was written thereon. He swore the following were
not in the incident report at the time he signed it:
Exhibit A-l which says opposite the stenciled word SUBJECT: "Shoplifting"

Exhibit A-3 which says opposite the stenciled words Action Taken: Released by Mrs. Fandino
after paying the item."

Exhibit A-4 which says opposite the stenciled words Remarks Noted: "Grd. Ebreo requested
Grd. Paunil to apprehend subject shoplifter."
Private respondent's complaint filed on October 8, 1970 is founded on Article 21 in relation to
Article 2219 of the New Civil Code and prays for moral damages, exemplary damages,
attorney's fees and expenses of litigation, costs of the suit and the return of the P5.00 fine. After
trial, the Court of First Instance of Pasig, Rizal, Branch XIX dismissed the complaint. Interposing
the appeal to the Court of Appeals, the latter reversed and set aside the appealed judgment,
granting the damages as earlier stated.

Not satisfied with the decision of the respondent court, petitioners instituted the present petition
and submits the following grounds and/or assignment of errors, to wit:

I
Respondent Court of Appeals erred in awarding moral and exemplary damages to respondent
Espino under Articles 19 and 21 in relation to Article 2219 of the Civil Code, considering that —

A. Respondent Espino was guilty of theft;

B. Petitioners legitimately exercised their right of defense of property within the context of Article
429 of the Civil Code negating the application of Articles 19 and 21 of the same Code;

C. Petitioners acted upon probable cause in stopping and investigating respondent Espino for
shoplifting and as held in various decisions in the United States on shoplifting, a merchant who
acts upon probable cause should not be held liable in damages by the suspected shoplifter;

D. Petitioners did not exercise their right maliciously, wilfully or in bad faith; and/or
E. The proximate cause of respondent Espino's alleged injury or suffering was his own
negligence or forgetfulness; petitioners acted in good faith.

II

Assuming arguendo that petitioners are liable for moral and exemplary damages, the award of
P75,000.00 for moral damages and P25,000.00 for exemplary damages by the respondent
Court of Appeals is not legally justified and/or is grossly excessive in the premises.

III

The award of P5,000.00 for attorney's fees by the respondent Court of Appeals is unjustified
and unwarranted under Article 2199 of the Civil Code.
We agree with the holding of the respondent appellate court that "the evidence sustains the
court's finding that the plaintiff had absolutely no intention to steal the file." The totality of the
facts and circumstances as found by the Court of Appeals unerringlypoints to the conclusion
that private respondent did not intend to steal the file and that his act of picking up the file from
the open shelf was not criminal nor done with malice or criminal intent for on the contrary, he
took the item with the intention of buying and paying for it.

This Court needs only to stress the following undisputed facts which strongly and convincingly
uphold the conclusion that private respondent was not "shoplifting." Thus, the facts that private
respondent after picking the cylindrical "rat-tail" file costing P3.85 had placed it inside his left
front breast pocket with a good portion of the item exposed to view and that he did not conceal it
in his person or hid it from sight as well as the fact that he paid the purchases of his wife
amounting to P77.00 at the checkout counter of the Supermarket, showed that he was not
acting suspiciously or furtively. And the circumstance that he was with his family consisting of
his wife, Mrs. Caridad Jayme Espino, and their two daughters at the time negated any criminal
intent on his part to steal. Moreover, when private respondent was approached by the guard of
the Supermarket as he was leaving by the exit to his car who told him, "Excuse me, Mr., I think
you have something in your pocket which you have not paid for," Espino immediately
apologized and answered, "I am sorry," which indicated his sincere apology or regrets. He
turned back towards the cashier to pay for the file which proved his honesty, sincerity and good
faith in buying the item, and not to shoplift the same. His brief statement on the sheet of paper
called the Incident Report where private respondent wrote the following: "While talking to my
aunt's maid with my wife, 1 put this item in my shirt pocket. I forgot to check it out with my wife's
items," was an instant and contemporaneous explanation of the incident.

Considering further the persona! circumstances of the private respondent, his education,
position and character showing that he is a graduate Mechanical Engineer from U.P. Class
1950, employed as an executive of Procter & Gamble Phils., Inc., a corporate manager incharge
of motoring and warehousing therein; honorably discharged from the Philippine Army in 1946; a
Philippine, government ​pensionado of the United States for six months; member of the
Philippine Veterans Legion; author of articles published in the Manila Sunday Times and
Philippines Free Press; member of the Knights of Columbus, Council No. 3713; son of the late
Jose Maria Espino, retired Minister, Department of Foreign Affairs at the Philippine Embassy,
Washington, We are fully convinced, as the trial and appellate courts were, that private
respondent did not intend to steal the article costing £3.85. Nothing in the records intimates or
hints whatsoever that private respondent has had any police record of any sort much less
suspicion of stealing or shoplifting.

We do not lay down here any hard-and-fast rule as to what act or combination of acts constitute
the crime of shoplifting for it must be stressed that each case must be considered and adjudged
on a case-to-case basis and that in the determination of whether a person suspected of
shoplifting has in truth and in fact committed the same, all the attendant facts and
circumstances should be considered in their entirety and not from any single fact or
circumstance from which to impute the stigma of shoplifting on any person suspected and
apprehended therefor.

We likewise concur with the Court of Appeals that "(u) pon the facts and under the law, plaintiff
has clearly made the cause of action for damages against the defendants. Defendants wilfully
caused loss or injury to plaintiff in a manner that was contrary to morals, good customs or Public
policy, making them amenable to damages under Articles 19 and 21 in relation to Article 2219 of
the Civil Code."​[2]

That private respondent was falsely accused of shoplifting is evident. The Incident Report
(Exhibit A) with the entries thereon under Exhibit A-l which says opposite the stenciled word
SUBJECT: "Shoplifting," Exhibit A-3 which says opposite the stenciled words Action Taken:
''Released by Mrs. Fandino after paying the item," Exhibit A-4 which says opposite the stenciled
words Remarks Noted: "Grd. Ebreo requested Grd. Paunil to apprehend subject shoplifter,"
established the opinion, judgment or thinking of the management of petitioner's supermarket
upon private respondent's act of picking up the file. In plain words, private respondent was
regarded and pronounced a shoplifter and had committed "shoplifting."

We also affirm the Court of Appeals' finding that petitioner Nelia Santos, Fandino, after reading
the incident report, remarked the following: "​Ano, nakaw na naman ito​?" Such a remark made in
the presence of private respondent and with reference to the incident report with its entries, was
offensive to private respondent's dignity and defamatory to his character and honesty. When
Espino explained Lhat he was going to pay the file but simply forgot to do so, Fandino doubted
the explanation, saying: "That is all what they say, the people whom we caught not paying for
the goods say . . . they all intended to pay for the things that are found to them." Private
respondent objected and said that he was a regular customer of the Supermarket.

The admission of Fandino that she required private respondent to pay a fine of P5.00 and did in
fact take the P5.00 bill of private respondent tendered by the latter to pay for the file, as a fine
which would be given as an incentive to the guards who apprehend pilferers clearly proved that
Fandino branded private respondent as a thief which was not right nor justified.

The testimony of the guard that management instructed them to bring the suspected customers
to the public area for the people to see those kind of customers in order that they may be
embarrassed (p. 26, tsn, Sept. 30, 1971); that management wanted "the customers to be
embarrassed in public so that they will not repeat the stealing again" (p. 2, tsn, Dec. 10, 1971);
that the management asked the guards "to bring these customers to different cashiers in order
that they will know that they are pilferers" (p. 2, ​ibid​.) may indicate the manner or pattern
whereby a confirmed or self-confessed shoplifter is treated by the Supermarket management
but in the case at bar, there is no showing that such procedure was taken in the case of the
private respondent who denied strongly and vehemently the charge of shoplifting.

Nonetheless, the false accusation charged against the private respondent after detaining and
interrogating him by the uniformed guards and the mode and manner in which he was
subjected. shouting at him, imposing upon him a fine, threatening to call the police and in the
presence and hearing of many people at the Supermarket which brought and caused him
humiliation and embarrassment, sufficiently rendered the petitioners liable for damages under
Articles 19 and 21 in relation to Article 2219 of the Civil Code. We rule that under the facts of the
case at bar, petitioners wilfully caused loss or injury to private respondent in a manner that was
contrary to morals, good customs or public policy. It is against morals, good customs and public
policy to humiliate, embarrass and degrade the dignity of a person. Everyone must respect the
dignity, personality, privacy and peace of mind of his neighbors and other persons (Article 26,
Civil Code). And one must act with justice, give everyone his due and observe honesty and
good faith (Article 19, Civil Code).

Private respondent is entitled to damages but We hold that the award of Seventy-Five
Thousand Pesos (£75,000.00) for moral damages and Twenty-Five Thousand Pesos
(£25,000.00) for exemplary damages is unconscionable and excessive.

While no proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated
or exemplary damages may be adjudicated, the assessment of such damages, except
liquidated ones, is left to the discretion of the court, according to the circumstances of each case
(Art. 2216, New Civil Code). In the case at bar, there is no question that the whole incident that
befell respondent had arisen in such a manner that was created unwittingly by his own act of
forgetting to pay for the file. It was his forgetfulness in checking out the item and paying for it
that started the chain of events which led to his embarrassment and humiliation, thereby
causing him mental anguish, wounded feelings and serious anxiety. Yet, private respondent's
act of omission contributed to the occurrence of his injury or loss and such contributory
negligence is a factor which may reduce the damages that private respondent may recover (Art.
2214, New Civil Code). Moreover, that many people were present and they saw and heard the
ensuing interrogation and altercation appears to be simply a matter of coincidence in a
supermarket which is a public place and the crowd of onlookers, hearers or bystanders was not
deliberately sought or called by management to witness private respondent's predicament. We
"do not believe that private respondent was intentionally paraded in order to humiliate or
embarrass him because petitioner's business depended for its success and patronage the good
will of the buying public which can only be preserved and promoted by good public relations.

As succinctly expressed by Mr. Justice J. B. L. Reyes in his concurring and dissenting opinion in
Pangasinan Transportation Company, Inc. vs. Legaspi, 12 SCRA 598, the purpose of moral
damages is essentially indemnity or reparation, both punishment or correction. Moral damages
are emphatically not intended to enrich a complainant at the expense of a defendant; they are
awarded only to enable the injured party to obtain means, diversion or amusements that will
serve to alleviate the moral suffering he has undergone, by reason of the defendant's culpable
action. In other words, the award of moral damages is aimed at a restoration, within the limits of
the possible, of the spiritual ​status quo ante and, it must be proportionate to the suffering
inflicted.

In Our considered estimation and assessment, moral damages in the amount of Five Thousand
Pesos (P5.000.00) is reasonable and just to award to private respondent.

The grant of Twenty-Five Thousand Pesos (P25,000.00) as exemplary damages is unjustified.

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 (Art. 2229, New
Civil Code). Exemplary damages cannot be recovered as a matter of right; the court will decide
whether or not they could be adjudicated (Art. 2223, New Civil Code). Considering that
exemplary damages are awarded for wanton acts, that they are penal in character granted not
by way of compensation but as a punishment to the offender and as a warning to others as a
sort of deterrent. We hold that the facts and circumstances of the case at bar do not warrant the
grant of exemplary damages.

Petitioners acted in good faith in trying to protect and recover their property, a right which the
law accords to them. Under Article 429, New Civil Code, the owner or lawful possessor of a
thing has a right to exclude any person from the enjoyment and disposal thereof and for this
purpose, he may use such force as may be reasonably necessary to repel or prevent an actual
or threatened unlawful physical invasion or usurpation of his property. And since a person who
acts in the fulfillment of a duty or in the lawful exercise of a right or office exempts him from civil
or criminal liability, petitioner may not be punished by imposing exemplary damages against
him. We agree that petitioners acted upon probable cause in stopping and investigating private
respondent for taking the file without paying for it, hence, the imposition of exemplary damages
as a warning to others by way of a deterrent is without legal basis. We, therefore, eliminate the
grant of exemplary damages to the private respondent.

In the light of the reduction of the damages, We hereby likewise reduce the original award of
Five Thousand Pesos (P5,000.00) as attorney's fees to Two Thousand Pesos (P2,000.00).
WHEREFORE, IN VIEW OF THE FOREGOING, the judgment of the Court of Appeals is hereby
modified. Petitioners are hereby ordered to pay, jointly and severally, to private respondent
moral damages in the sum of Five Thousand Pesos (P5,000.00) and the amount of Two
Thousand Pesos (P2,000.00) as and for attorney's fees; and further, to return the P5.00 fine to
private respondent. No costs.

SO ORDERED.

Makasiar, Fernandez, De Castro,​ and M

​ elencio-Herrera, JJ.,​ concur.
Teehankee (Chairman), J.,​ took no part.

[1]
Special Second Division. A. Reyes, J.. ponente: with M. Serrano and H. Gutierrez. J., JJ.,
concurring.

[2]
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due. and observe honesty and good faith.

Art. 21. 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 the damage.

Art. 2219. Moral damages may be recovered in the following and analogous cases: . . . (10)
Acts and actions referred to in

Articles 21. 26. 27. 28. 29. 30, 32, 34, and 35. x x x"

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