G.R. No.

L-25265 May 9, 1978
PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
SOCORRO C. RAMOS, defendant-appellee, PHOENIX
PUBLISHING HOUSE INC., intervenor.
G.R. No. L-25644 May 9, 1978
SOCORRO C. RAMOS, petitioner,
vs.
HON. PLACIDO RAMOS, in his capacity as Presiding Judge,
Branch III, CFI, Manila; and the PEOPLE OF THE
PHILIPPINES, represented by State Prosecutor DELIA P.
MEDINA, respondents.
Solicitor General Arturo A. Alafriz, Assistant Solicitor General
Pacifica P. de Castro and Solicitor Sumilang V. Bernardo for
People of the Philippines.
Florence D. Regalado for Socorro C. Ramos.
respondents, including that involved in the police search of
September 4, 1963 were only confirmatory of the first. Under 91
of the Revised Penal Code and in the light of the afore-quoted
ruling announced in the Pangasinan Trans. Co. case, supra; the
prescriptive period, therefore, commenced to run on the day after
such discovery on July 17, 1963 and, accordingly, the offense has
long since prescribed since under the Copyright Law, Act 3134:
Sec. 24. All actions, suits, or proceedings arising under this Act
shall be originally cognizable by the Court of First Instance of the
Philippine Islands and shall prescribe after two years from the
time the cause of action arose.
Assuming arguendo, that the last actual sale should be the
starting point of computation, again the offense charged has
prescribed, since, as already pointed out, the documented
evidence on this point shows that the last sale was made on
August 30, 1963.
The prosecution, also in both cases, filed its Opposition to the
Motion to Quash 3 raising two issues, to wit:

1. That the issue of prescription in this case can be resolved only

Sevilla & Aquino Law Office for Intervenor.
after the presentation of evidence and hence, it is premature to
raise that issue before trial

2. That, as the violation committed by the defendant was a

SANTOS, J.:
The above-entitled cases — the first an appeal and the second a
special civil action — are decided jointly because they raise a
common — issue which arose from the prosecution of a common
defendant, Socorro C. Ramos, for alleged violations of the
copyright law—viz, whether or not the extra day in the leap year,
1964 should be taken into consideration in the computation of the
two-year period of prescription provided in Section 24 of the
copyright law.
The factual and procedural antecedents follow.
continuing offense, the two-year prescriptive period may be
counted from September 3, 1963, or one day before the search in
defendants' premises , which confirmed her possession of
spurious and pirated copies of the textbook in question.
The prosecution's theory is that "(T)he crime being a continuing
offense, the statute of limitations begins to run from the
completion of the last act or series of acts which constitute the
offense, " and this last act was committed on September 3, 1963.
Therefore when the information was filed on September 3, 1965,
it was filed within the two-year period, albeit the last day of the
prescriptive period.

On September 3, 1965, two criminal cases — No. 80006 of the
Court of First Instance of Manila, Branch III, and No. 80007 also
of the same Court, Branch XIV— identical in every respect, except
for the fact that they pertain to different editions of the same
textbook, were filed against Socorro C. Ramos, for alleged
violations of Act 3134, otherwise known as the Copyright Law, as
amended. The information in Criminal Case No. 80007 alleged —
That on or about July to September, 1963, in the City of Manila
and within the jurisdiction of this Honorable Court, the said
accused, as the proprietor aid general manager of the National
Book Store, as enterprise engaged in the business of publishing,
selling and distributing books, did then and there, wilfully and
illegaly sell and distribute spurious and pirated copies of the high
school textbook, entitled General Science Today for Philippine
School, First Year, by Gilam, Van Houten and Cornista, said
accused knowing that said book was duly copyrighted by the
Phoenix Publishing House, Inc., and was being distributed
exclusively by its sister corporation, Alemar's or Sibal and Sons,
Inc.1
On September 7, 1965, identical motions to quash 2 were filed by
accused Ramos on the ground of prescription, alleging
therein, inter alia, that:
xxx xxx xxx
Consequently, the delivery of the alleged offense was made as
early as July 17, 1963 and all subsequent knowledge or
discoveries of posterior sales and possession of said books by the
Again, in both the accused filed a "Reply to Opposition to Motion
to Quash." 4 She alleged that even assuming that the crime is a
continuing offense, the prescriptive period should start from
August 30, 1963, the date of the last invoiced sale, and not
September 3, 1963, as there was no indubitable proof that she
had sold copies of the questioned book on that date. Nonetheless,
accused contended that even if the prescriptive period should
start from September 3, 1963, as proposed by the prosecution,
the two-year period was tolled on September 2, 1965. She
pointed out that two years mean a period of 730 days in
accordance with Article 13 of the New Civil Code, and 1964, being
a leap year consisting of 366 days, the 730th day fell on
September 2, 1965. Hence, "... . when the information was filed
on September 3, 1965, the offense, if any, had already prescribed.
"
The prosecution filed a Rejoinder 5 in both cases alleging as
follow:
l. That February 28, and 29, 1964, should be regarded as one day
only, and consequently, the two-year period commencing on
September 3, 1963 would end on September 3, 1965;
2. That under Act No. 3326, the prescriptive period was
interrupted by the filing of the proceedings in the fiscal's office;
3. That prescription would not lie in this case because the
complainant never waived the right to prosecute the defendant.
1
Accused Ramos, also in cases, filed an Urgent Motion to Strike the
Rejoinder, 6 on the ground that it was filed after the case had
been submitted for resolution. She prayed that "in the event that
the same should at all be considered and allowed, that the
accused be notified thereof and granted reasonable opportunity
to file a surrejoinder...".
It appears that the Rejoinder was admitted by both trial courts,
but a Surrejoinder 7 was filed only in Criminal Case No. 80006.
Here, the accused traversed the prosecution's contentions in the
Rejoinder, thus:
1. Under applicable and specific provisions of Philippine law, the
two-year period of prescription commencing on September 3,
1963 ended on September 2, 1965 ...;
2. The filing (of) proceedings in the Office of the City Fiscal of
Manila did not interrupt the prescriptive period.
In Criminal Case No. 80007, Hon. Jesus De Veyra granted the
motion to quash by an order dated October 7, 1965. 8 Pertinent
portion of his order reads:
. . . . And now to the main issue - whether the crime has
prescribed. In the Opposition to the Motion to Quash, the
Prosecution, in its insistence on the theory of a continuing crime,
admits that the two-year prescriptive period should run from
September 3, 1963. This case was filed on September 3, 1965
- one day too late. Article 13, CCP provides that year shall mean a
period of 365 days. This had been applied to criminal cases
(People v. del Rosario, 51 O.G., 2686). 1964 was a leap year so
that when this case was filed, it was filed one day too late.
The Motion to Quash is, therefore, granted and this case
dismissed on the ground that the crime has already prescribed.
(Emphasis supplied.)
The prosecution appealed the above order to this Court on
October 15, 1965. 9
Meanwhile, in Criminal Case No. 80006, the motion to quash was
not resolved until December 23, 1965. On this date, Hon. Placido
Ramos denied the motion to quash, and set the arraignment of
the accused on January 12, 1966, thus —
Wherefore, finding the information to have been filed well within
the statutory period of two years from the date of the last offense
committed by the accused the Court denies the motion to quash.
The arraignment of the accused is hereby set on January 12,
1966 at 8:30 A.M.
The trial court refused to accept the prosecution's view that the
prescriptive period should run from September 3, held instead,
that the same should commence on September 4, 1963.
xxx xxx xxx
The evidence shows that on September 4, 1963, the Manila Police
by virtue of a search warrant procured by the offended party,
seized, among other articles, 69 copies of General Science Today
for Philippine Schools, First Year, by Gilman, Van Houten and
Cornista and one copy of the same textbook for Second Year
(Exhibit 5). The evidence likewise shows that on September 3,
1963, the National Book Store, run and managed by the accused,
sold one said textbook, Exhibit 'D' and Exhibit '2'. The mere
possession by the accused on September 4, 1963 of several
copies of this textbook which is the textbook alleged to be
spurious and pirated, indicates that said accused was distributing
or selling said textbook on September 4, 1963 . . . This being the
case, it follows of necessity that the period of prescription
commenced to run from September 4, 1963 and two years from
this date, by excluding the first and including the last, would
expire on September 4, 1965 and hence, the action, which was
instituted on September 3, 1965 is well within the prescriptive
period.
xxx xxx xxx
Furthermore, the trial court ignored the accused's theory on leap
year:
Even if the last sale of said textbook could be considered to have
taken place on September 3, 1963, Exhibits 'D' and '2', the Court
is also of the opinion that the two-year period would expire
September 3, 1965.
The argument that inasmuch as 1964 is a leap year the two-year
period must contain 731 days, as contemplated by Article 13 of
the Civil Code of the Philippines, is, in the opinion of the Court,
without merits for this particular legal provision that a year is
understood to be of 365 days each is applicable only in
determining the number of days a year must legally contain but
not for the purpose of ascertaining the period of prescription
based on years. In the computation of the period of prescription,
a year should be construed as the calendar year comprising the
whole period from January 1 to December 31, regardless of the
number of days it contains. Consequently, in this particular case,
if it is considered that the last sale took place on September 3,
1963, the two-year period, following the rule exclude the-
first-and-include-the-last, will expire on September 3, 1965.
The accused filed a Motion for Reconsideration. 10 Two more
pleadings were filed, 11 after which, the trial court finally denied
said motion for reconsideration for lack of merit, 12 and reset the
arraignment of the accused on February 24, 1966 at 8:30 A.M.
The accused thus filed with this Court this petition
for certiorari, mandamus and prohibition, 13 with the following
prayer:
(a) Forthwith issue, upon filing by petitioner of a bond in such
amount as this Honorable Court may fix, a Writ of Preliminary
Injunction restraining, enjoining and prohibiting respondents
from further proceedings in Criminal Case No. 80006 of the Court
of First instance of Manila, Branch III, daring the pendency of this
Action:
(b) After due hearing, to render judgment in favor of petitioner
and against respondents —
(1) Annulling and setting aside the Orders of the respondent
Judge of December 23, 1965 (Annex 'G') denying petitioner's
motion to quash, and of January 20, 1966 (Annex 'K') denying
petitioner's motion for reconsideration;
(2) Ordering respondent Judge to dismiss Criminal Case No.
80006 aforesaid; and
(3) Making the writ of preliminary injunction hereafter La be
issued permanent and final.
This Court on February 11, 1966, issued a writ of preliminary
injunction restraining the trial Court from further proceedings in
Criminal Case No. 80006. 14 Also on the same date, the two cases,
G.R. No. L-25265 and G.R. No. L-25644, were consolidated.
2
1. In G.R. No. L-25265, the appeal, then Solicitor General Arturo
Alafriz filed a four-page brief dated December 21,
1965 15 wherein he recommended affirmance of the order of
'Judge De Veyra quashing the information, and the dismissal of
the appeal, for the simple reason that "the order appealed from is
in accordance with law." Accused, now appellee Ramos, filed a
brief dated January 21, 1966 16 reiterating her previous
allegations in the lower court.
The Phoenix Publishing House, Inc., the offended party, filed a
motion to intervene in this appeal, on the following grounds:
a) That the Solicitor General, instead of prosecuting the appeal,
recommended its dismissal
b) That, to protect its interest, it is necessary that the movant be
allowed to intervene and to submit memorandum to sustain its
view that the criminal action against the accused had not yet
prescribed. 17
Over the opposition of the accused-appellee, this Court granted
the same. 18 Accordingly, the Phoenix Publishing House, Inc. filed
its Memorandum 19 wherein it alleged that the trial court erred
I. IN ACTING ON DEFENDANT'S MOTION TO QUASH WITHOUT
REQUIRING THE PRESENTATION OF EVIDENCE IN SUPPORT OF
THE PLEA OF PRESCRIPTION.
II. IN NOT APPLYING TO THIS CASE THE FOUR-YEAR
PRESCRIPTIVE PERIOD PROVIDED FOR IN ACT NO. 3326.
III. IN NOT HOLDING THAT THE PRELIMINARY INVESTIGATION
PROCEEDINGS IN THE MANILA CITY FISCAL'S OFFICE AND IN
THE DEPARTMENT OF JUSTICE INTERRUPTED PRESCRIPTION.
IV. IN NOT CONSIDERING FEBRUARY 28 AND 29, 1964, AS ONE
DAY FOR PURPOSES OF PRESCRIPTION.
Accused-appellee, Ramos, filed a Reply Memorandum 20 refuting
intervenor's assignment of errors. Subsequent
pleadings 21 focused on whether February 28, and 29 of a leap
year should be counted as one day or separate days in computing
the period of prescription.
2. In G.R. No. L-25644-the special civil action — the issues raised
in the foregoing assignment of errors were relied upon in
respondent People's Answer. 22 And, following respondent Judge
Ramos' reasoning, it was contended that the period of
prescription should start from September 4, 1963, and not
September 3, 1963, as originally proposed by the prosecution.
Furthermore, as an affirmative defense, it was alleged that the
petitioner has no cause of action for certiorari, prohibition and
mandamus since Judge Ramos did not commit any grave abuse of
discretion in refusing to quash the information. Respondent
contended that the "(P)etitioner's remedy is to appeal the
judgment of conviction rendered after a trial on the merits. " This
allegation was opposed by petitioner Ramos; 23 she insisted that
she had a cause of action for certiorari prohibition and mandamus.
Respondent People filed a Reply Memorandum 24 disputing
petitioner's allegations.
We are, thus, faced with conflicting orders of two different
Branches of the Court of First Instance of Manila-one holding that
the crime has prescribed, the other that it has not.
1. Now to resolve the preliminary issues:
a. On the propriety of the special civil action for certiorari and
prohibition.
We find for petitioner. As We had occasion to hold in Quizon vs.
Baltazar, 76 SCRA 559:
As to the contention of respondents that the denial of a motion to
quash is not a ground for certiorari and prohibition, suffice it to
state that to allow an accused to undergo the ordeals of trial and
conviction when the information or complaint against him is
patently defective or the offense charged therein has been
indisputably shown to have already prescribed is unfair and
unjust for which reason, procedurally, the ordinary remedy of
appeal cannot be plain and adequate.
As to mandamus, We are incline to agree with respondent's
allegation that "petitioner has no cause of action for mandamus
which is a writ intended to control the exercise of a purely
ministerial function. To quash an information is not a ministerial
function," 25 However, mandamus as a remedy is a superfluity
here, considering that petitioner can obtain full relief thru
certiorari and prohibition.
b. On the applicability of the four-year prescriptive period
provided in Act No. 3326. 26
The same is not applicable. Said Act provides:
Section 1. Violations penalized by special acts shall unless
otherwise provided in such acts, prescribe in accordance with the
following rules: (a)........... (b) after four years for those punished
by imprisonment for more than one month, but less than two
years; ... (Emphasis supplied.)
Act No. 3326 applies only if the special act does not provide for its
own prescriptive period. It has no application here, where the
Copyright Law provides for its own prescriptive period, viz:
Section 24. All actions, suits, or proceedings arising under this Act
shall be originally cognizable by the Courts of First Instance of the
Philippines and shall prescribe after two years from the time the
cause of action arose.
2. Now on the main issue of prescription. The question to be
resolved is the proper computation of the two-year period of
prescription from September 3, 1963. Resolution of this issue
hinges, in turn, on whether February 28, and 29 of a leap year,
1964, should be counted as one day, as proposed by the
prosecution; or as separate days, as alleged by the defense.
This issue which was in 1965 still undetermined is now a settled
matter. It was held in 1969 in Namarco vs. Tuazon 27 that
February 28 and 29 of a leap year should be counted as separate
days in computing periods of prescription. Thus, this Court,
speaking thru former Chief Justice Roberto Concepcion, held that
where the prescriptive period was supposed to commence on
December 21, 1955, the filing of the action on December 21,
1965, was done after the ten-year period has lapsed — since
1960 and 1964 were both leap years and the case was thus filed
two (2) days too late. Since this case was filed on September 3,
1965, it was filed one day too late; considering that the 730th day
fell on September 2, 1965 — the year 1964 being a leap year.
In explaining the rationale for its holding, the Court took pains to
trace the antecedent decisional and statutory bases for its
conclusion, thus —
Prior to the approval of the Civil Code of Spain, the Supreme
Court thereof held, on March 30, 1887, that, when the law spoke
of months, it meant a 'natural' month or 'solar' month, in the
absence of express provision to the contrary. Such provision was
incorporated into the Civil Code of Spain, subsequently
3
promulgated. Hence, the same Supreme Court declared that,
pursuant to Article 7 of said Code, 'whenever months are referred
to in the law. it shall be understood that months are of 30 days,'
not the 'natural', 'solar' or 'calendar' months, unless they are
'designated by name,' in which case, 'they shall be computed by
the actual number of days they have.' This concept was, later,
modified in the Philippines, by Section 13 of the Revised
Administrative Code, pursuant to which 'month shall be
understood to refer to a calendar month.' With the approval of
the Civil Code of the Philippines (RA 386) we have reverted to the
provisions of the Spanish Civil Code in accordance with which a
month is to be considered as the regular 30-month and not the
solar or civil month with the particularity that, whereas the
Spanish Civil Code merely mentioned 'months, days or nights,'
ours has added thereto the term 'years' and explicitly ordains in
Article 13 that it shall be understood that years are of three
hundred sixty-five days. 28

With respect to the opinion of some members of the Court that

Article 13 of the Civil Code is unrealistic, the Court adverted to the
proper remedy thus —

Although some justices of the Supreme Court are inclined to think

that Article 13 of the Civil Code defining 'years' to mean 365 days
is not realistic, the remedy is not judicial legislation. If public
interest demands a reversion to the policy embodied in the
Revised Administrative Code, this may be done through legislative
process, not by judicial decree. 29

Finally, there is no merit in the allegation that the reckoning of the

prescriptive period should start from September 4, 1963. This was
the date when the police authorities discovered several pirated
books in accused's store. But the accused was charged, in both
Criminal Cases Nos. 80006 and 80007, with having
allegedly sold and distributed spurious and pirated copies of the
textbook in question, not of illegal possession of the same. The
prosecution's claim that the preliminary investigation proceedings
in the Manila City Fiscal's Office and in the prosecution Division of
the Department of Justice interrupted the running of the
prescriptive period, is also without merit. We held in People vs.
Tayco 30 that the running of the period of prescription is
interrupted not by the act of the offended party in reporting the
offense to the final but the filing of the complaint or information in
court.

WHEREFORE, the order dated October 7, 1965 of the Court of

First Instance of Manila Branch XIV in Criminal Case No. 80007
dismissing the case on the ground of prescription, is AFFIRMED.
The order dated December 23, 1965 of the same court, Branch III,
in Criminal Case No. 80006, is REVERSED and SET ASIDE, and the
case is DISMISSED, on the ground that the crime charged therein
had already prescribed. Without pronouncement as to costs.

SO ORDERED.

Barredo, Acting (Chairman), Antonio, Concepcion, Jr. and

Guerrero, JJ., concur,

Fernando, J. and Aquino, JJ., took no part.

Guerrero, J., was designated to sit in the Second Division.

4
G.R. No. L-8883 July 14, 1959

ALFREDO M. VELAYO, ETC., plaintiff,

vs.
SHELL COMPANY OF THE PHILIPPINES ISLANDS,
LTD., defendant-appellee.
ALFONSO Z. SYCIP, ET. AL., intervenors-appellants.

Sycip, Quisumbing, Salazar and Associates for appellants.

Ozaeta, Lichauco and Picazo for appellee.

BAUTISTA ANGELO, J.:

On December 17, 1948, Alfredo M. Velayo as assignees of the

insolvent Commercial Airlines, Inc., instituted an action against
Shell Company of the Philippine Islands, Ltd., in the Court of First

5
Instance of Manila for injunction and damages (Civil Case No.
6966). On October 26, 1951, a complaint in intervention was filed
by Alfonso Sycip, Paul Sycip, and Yek Trading Corporation, and on
November 14, 1951, by Mabasa & Company.
After trial wherein plaintiff presented evidence in his behalf, but
none in behalf of intervenors, the court rendered decision
dismissing plaintiff's complaint as well as those filed by the
intervenors. On March 31, 1954, counsel for plaintiff filed a notice
of appeal, appeal bond, and record on appeal in behalf only of
plaintiff even if they also represent the intervenors, which in due
time were approved, the Court instructing its clerk to forward the
record on appeal to the Supreme Court together with all the
evidence presented in the case. This instruction was actually
complied with.
On August 31, 1954, the Deputy Clerk of the Supreme Court
notified counsel of plaintiff that the record as well as the evidence
have already been received and that they should file their brief
within 45 days from receipt of the notice. On November 2, 1954,
counsel filed their brief for appellants. On November 6, 1954, or 7
months after the judgment had become final as against the
intervenors, and 4 days after counsel for appellants had
submitted the latter's brief, counsel for intervenors filed with the
Supreme Court a petition for correction of the record on appeal in
order to enable them to insert therein the names of the
intervenors as appellants, the petition being based, among others,
on the ground that the omission of the names of the intervenors
in said record on appeal was due to the mistake of the typist who
prepared it while the attorney in charge was on vacation. The
petition was vigorously opposed by counsel for defendant,
contending that the same would serve no purpose, whatsoever
considering that the intervenors had not presented any evidence
in support of their claim, aside from the fact that the alleged
absence of the attorney of the intervenors cannot constitute a
justification for the alleged omission of the intervenors as
appellants. On November 12, 1954, the Court denied the petition.
Counsel intervenors moved for a reconsideration of the order, but
the same was denied.
resolution of November 12, 1954 denying their petition for
correction of the record on appeal, and, second, in denying their
motion for reconsideration of said resolution. It should be noted
that the grounds relied upon in this appeal are the same grounds
alleged in said petition for correction.
In the second place, the intervenors have no right or reason to
appeal from the decision in the main case, it appearing that they
did not introduce any evidence during the trial in support of their
complaint, which shows that their appeal would be
merely pro-forma. And, in any event, they made the attempt to
amend the record on appeal seven (7) months after the decision
had become final against them.
In the third place, the intervenors have no right or reason to file a
petition for relief under Rule 38 of the Rules of Court from the
order of the lower court issued on December 27, 1954, for the
reason that the same was entered upon a motion filed by them.
Indeed they cannot reasonably assert that the order was entered
against them through fraud, accident, mistake, or negligence.
The fraud mentioned in Rule 38 is the fraud committed by the
adverse party and certainly the same cannot be attributed to the
Court.
Finally, it appears that the main case has already been decided by
this Court on the merits on October 31, 1956, reversing the
decision of the lower court and awarding damages to plaintiff,
which apparently is the very purpose which the intervenors seek
to accomplish in joining the appeal as co-appellants. This appeal,
therefore, has already become moot.
Wherefore, the order appealed from is affirmed, with costs
against appellants.
Paras, C.J., Bengzon, Padilla, Montemayor, Labrador, Concepcion,
Endencia and Barrera, JJ., concur.

On November 19, 1954, counsel for intervenors filed with the

lower court a petition for relief under Rule 38 of the Rules of Court,
wherein he reiterated the same grounds they alleged in the
petition for correction filed by them in the Supreme Court, which
petition was denied on November 27, 1954, for having been filed
outside the reglementary period fixed in said Rule 38. Counsel
filed a motion for reconsideration, which was again denied, the
Court stating that "no judgment or order has been rendered, nor
any other proceeding taken by this Court on the right of the
intervenors to appeal."

On December 20, 1954, counsel filed once more a motion to

amend the record on appeal based on grounds identical with
those alleged in the petition for correction filed before the
Supreme Court. On December 27, 1954, the lower court denied
the motion. On January 6, 1955, counsel filed a petition for relief
from this last order entered on December 27, 1954, to which
counsel for defendant filed an opposition. On February 5, 1955,
hearing was had on both the petition for relief and the opposition,
and on February 9, 1955, the petition was denied on the ground
that the case is already before the Supreme Court on appeal. It is
from this order that the counsel for intervenors has taken the
appeal now before us.

The instant appeal has no merit.

To begin with, the only remedy which appellants now seek in this
appeal is the inclusion of the intervenors as appellants in the
appeal from the decision rendered in the main case, but this
remedy has already been denied twice by this Court, first, in its

6

G.R. No. 122823 November 25, 1999
SEA COMMERCIAL COMPANY, INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, JAMANDRE
INDUSTRIES, INC. and TIRSO JAMANDRE, respondents.
GONZAGA-REYES, J.:
In this petition for review by certiorari, SEA Commercial Company,
Inc. (SEACOM) assails the decision of the Court of Appeals in
CA-G.R. CV NO. 31263 affirming in toto the decision of the
Regional Trial Court of Manila, Branch 5, in Civil Case No. 122391,
in favor of Jamandre Industries, Inc. (JII) et al., the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the
defendant and against the plaintiff, ordering the plaintiff:
1) To pay defendant the sum of P66,156.15 (minus 18,843.85)
with legal interest thereon, from the date of the filing of the
counterclaim until fully paid;
2) To pay defendant P2,000.00 as moral and exemplary
damages;
3) To pay attorney's fees in the sum of P10,000.00; and
4) To pay the costs of this suit.
SO ORDERED.
SEACOM is a corporation engaged in the business of selling and
distributing agricultural machinery, products and equipment. On
September 20, 1966, SEACOM and JII entered into a dealership
agreement whereby SEACOM appointed JII as its exclusive dealer
in the City and Province of Iloilo 1. Tirso Jamandre executed a
suretyship agreement binding himself jointly and severally with
JII to pay for all obligations of JII to SEACOM 2. The agreement
was subsequently amended to include Capiz in the territorial
coverage and to make the dealership agreement on a
non-exclusive basis 3 . In the course of the dealership agreement,
JII allegedly incurred a balance of P18,843.85 for unpaid
deliveries, and SEACOM brought action to recover said amount
plus interest and attorney's fees.
JII filed an Answer denying the obligation and interposing a
counterclaim for damages representing unrealized profits when
JII sold to the Farm System Development Corporation (FSDC)
twenty one (21) units of Mitsubishi power tillers. In the
counterclaim, JII alleged that as a dealer in Capiz, JII contracted
to sell in 1977 twenty-four (24) units of Mitsubishi power tillers to
a group of farmers to be financed by said corporation, which fact
JII allegedly made known to petitioner, but the latter taking
advantage of said information and in bad faith, went directly to
FSDC and dealt with it and sold twenty one (21) units of said
tractors, thereby depriving JII of unrealized profit of eighty-five
thousand four hundred fifteen and 61/100 pesos (P85,415.61).
The trial court rendered its decision on January 24, 1990 ordering
JII to pay SEACOM the amount of Eighteen Thousand Eight
Hundred Forty Three and 85/100 (P18,843.85) representing its
outstanding obligation. The trial court likewise granted JII's
counterclaim for unrealized profits, and for moral and exemplary
damages and attorney' fees as above quoted.
SEACOM appealed the decision on the counterclaim.
The Court of Appeals held that while there exists no agency
relationship between SEACOM and JII, SEACOM is liable for
damages and unrealized profits to JII.
This Court, however, is convinced that with or without the
existence of an agency relationship between appellant SEACOM
and appellee JII and notwithstanding the error committed by the
lower court in finding that an agency relationship existed between
appellant and defendant corporation the former is liable for the
unrealized profits which the latter could have gained had not
appellant unjustly stepped in and in bad faith unethically
intervened.
It should be emphasized that the very purpose of the dealership
agreement is for SEACOM to have JII as its dealer to sell its
products in the provinces of Capiz and Iloilo. In view of this
agreement, the second assigned error that the lower court erred
in holding that appellant learned of the FSDC transaction from
defendant JII is clearly immaterial and devoid of merit. The fact
that the dealership is on a non-exclusive basis does not entitle
appellant SEACOM to join the fray as against its dealer. To do so,
is to violate the norms of conduct enjoined by Art. 19 of the Civil
Code. By virtue of such agreement, the competition in the market
as regards the sale of farm equipment shall be between JII, as
the dealer of SEACOM and other companies, not as against
SEACOM itself. However, SEACOM, not satisfied with the
presence of its dealer JII in the market, joined the competition
even as the against the latter and, therefore, changed the
scenario of the competition thereby rendering inutile the
dealership agreement which they entered into the manifest
prejudice of JII. Hence, the trial court was correct when it applied
Art. 19 of the Civil Code in the case at bar in that appellant
SEACOM acted in bad faith when it competed with its own dealer
as regards the sale of farm machineries, thereby depriving
appellee JII of the opportunity to gain a clear profit of
P85,000.00.
and affirmed the judgment appealed from in toto.
Hence this petition for review on certiorari, which submits the
following reasons for the allowance thereof:
THE RESPONDENT COURT OF APPEALS DECIDED QUESTIONS
OF SUBSTANCE IN A WAY NOT IN ACCORDANCE WITH LAW AND
JURISPRUDENCE, CONSIDERING THAT:
A
THE RESPONDENT COURT OF APPEALS GARAVELY ERRED IN
RULING THAT PETITIONER IS LIABLE TO PAY DAMAGES AND
UNREALIZED PROFITS TO THE PRIVATE RESPONDENTS
DESPITE THE FACT THAT NO AGENCY RELATIONSHIP EXISTS
BETWEEN THEM.
B
7
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PETITIONER ACTED IN BAD FAITH AGAINST THE
PRIVATE RESPONDENT CORPORATION DESPITE THE FACT
THAT SAID RULING IS CONTRARY TO THE EVIDENCE ON
RECORD.
C not cash vouchers were issued to JII by SEACOM for every
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT THE NON-EXCLUSIVITY CLAUSE IN THE
DEALERSHIP AGREEMENT EXECUTED BETWEEN THE
PETITIONER AND PRIVATE RESPONDENT CORPORATION
PRECLUDES THE PETITIONER FROM COMPETING WITH THE
PRIVATE RESPONDENT CORPORAITON.
D contention in previous pleadings. Additionally, it is contended that
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PRIVATE RESPONDENT IS ENTITLED TO
UNREALIZED PROFITS, MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY'S FEES. 4
Petitioner SEACOM disputes the conclusion of the Court of
Appeals that despite the fact that no agency relationship existed
between the parties, the SEACOM is still liable in damages and
unrealized profits for the reason that it acted in bad faith.
Petitioner SEACOM invokes the non-exclusivity clause in the
dealership agreement and claims that the transaction with FSDC
was concluded pursuant to a public bidding and not on the basis
of alleged information it received from private respondent Tirso
Jamandre. Moreover, petitioner SEACOM claims that it did not
underprice its products during the public bidding wherein both
SEACOM and JII participated. Petitioner also disputes the award
of moral damages to JII which is a corporation, in the absence of
any evidence that the said corporation had a good reputation
which was debased.
Private respondents in their comment, contends that the four
assigned errors raise mixed questions of fact and law and are
therefore beyond the jurisdiction of the Supreme Court which
may take cognizance of only questions of law. The assigned
errors were also refuted to secure affirmance of the appealed
decision. JII maintains that the bidding set by FSDC on March 24,
1997 was scheduled after the demonstration conducted by JII,
and after JII informed SEACOM about the preference of the
farmers to buy Mitsubishi tillers. JII further rebuts the SEACOM's
contention that the transaction with FSDC was pursuant to a
public bidding with full disclosure to the public and private
respondent JII considering that JII had nothing to do with the list
of 37 bidders and cannot be bound by the listing made by
SEACOM's employee; moreover, JII did not participate in the
bidding not having been informed about it. Furthermore, the price
at which SEACOM sold to FSDC was lower than the price it gave to
JII. Also, even if the dealership agreement was not exclusive, it
was breached when petitioner in bad faith sold directly to FSDC
with whom JII had previously offered the subject farm equipment.
With respect to the awards of moral and exemplary damages, JII
seeks an affirmation of the ruling of the Court of Appeals
justifying the awards.
SEACOM filed Reply defending the jurisdiction of this Court over
the instant petition since the decision of the Court of Appeals was
"based on a misapprehension of facts". SEACOM insists that
FSDC's purchase was made pursuant to a public bidding, and
even if SEACOM did not participate thereon, JII would not
necessarily have closed the deal since thirty seven (37) bidders
participated. SEACOM contends that no evidence was presented
to prove that the bidding was a fraudulent scheme of SEACOM
and FSDC. SEACOM further controverts JII's contention that JII
did not take part in the bidding as Tirso Jamandre was one of the
bidders and that SEACOM underpriced its products to entice FSDC
to buy directly from it. In fine, JII is not entitled to the award of
unrealized profits and damages.
In its Rejoinder, private responder insist that there is an agency
relationship, citing the evidence showing that credit memos and
delivery from November 26, 1976 to December 24, 1978. Private
respondents maintain that SEACOM "torpedoed the emerging
deal between JII and FSDC after being informed about it by JII by
dealing directly with FSDC at a lower price" and after betraying JII,
SEACOM would cover up the deceit by conniving with FSDC to
post up a "sham public bidding.
SEACOM's sur-rejoinder contains basically a reiteration of its
private respondents are barred from questioning in their
Rejoinder, the finding of the Court of Appeals that there is no
agency relationship between the parties since this matter was not
raised as error in their comment.
The core issue is whether SEACOM acted in bad faith when it
competed with its own dealer as regards the sale of farm
machineries to FSDC.
Both the trial court and the Court of Appeals held affirmatively;
the trial court found that JII was an agent of SEACOM and the act
of SEACOM in dealing directly with FSDC was unfair and unjust to
its agent, and that there was fraud in the transaction between
FSDC and SEACOM to the prejudice of JII. On the other hand, the
Court of Appeals ruled that there was no agency relationship
between the parties but SEACOM is nevertheless liable in
damages for having acted in bad faith when it competed with its
own dealer in the sale of the farm machineries to FSDC. Both
courts invoke as basis for the award Article 19 of the Civil Code
which reads as follows:
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.
The principle of abuse of rights stated in the above article,
departs from the classical theory that "he who uses a right injures
no one". The modern tendency is to depart from the classical and
traditional theory, and to grant indemnity for damages in cases
where there is an abuse of rights, even when the act is not illicit. 5
Art. 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. 6 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. The absence of
good faith is essential to abuse of right. Good faith is an honest
intention to abstain from taking any unconscientious advantage
of another, even through the forms or technicalities of the law,
together with an absence of all information or belief of fact which
would render the transaction unconscientious. In business
relations, it means good faith as understood by men of affairs. 7
While Article 19 may have been intended as a mere declaration
of
principle 8, the "cardinal law on human conduct" expressed in said
article has given rise to certain rules, e.g. that where a person
exercises his rights but does so arbitrarily or unjustly or performs
his duties in a manner that is not in keeping with honesty and
good faith, he opens himself to liability. 9 The elements of an
abuse of rights under Article 19 are: (1) there is a legal right or
duty; (2) which is exercised in bad faith; (3) for the sole intent of
8
prejudicing or injuring
another. 10
The issue whether JII is "entitled to recovery on its counterclaim
for unrealized profit in the twenty one (21) units of Mitsubishi
power tillers sold by SEACOM to FSDC" was resolved by the trial
court in favor of JII on the basis of documentary
evidence 11 showing that (1) JII has informed SEACOM as early as
February 1977 of the promotions undertaken by JII for the sale of
24 contracted units to FSDC and in connection therewith,
requested a 50% discount to make the price competitive, and to
increase the warranty period for eight months to one year. In said
letter Jamandre clarified that they were not amenable to
SEACOM's offering directly to FSDC" and to be only given the
usual overriding commission as "we have considerable
investments on this transaction". (2) In response, the general
sales manager of SEACOM declined to give the requested 50%
discount and offered a "less 30% less 10% up to end March . . .
on cash before delivery basis", granted the requested extension
of the warranty period and stated that "we are glad to note that
you have quite a number of units pending with the FSDC."
The trial court ruled that with said information, SEACOM dealt
directly with FSDC and offered its units at a lower price, leaving
FSDC "no choice but to accept the said offer of (SEACOM)".
In affirming the judgment of the of the trial court, the Court of
Appeals held that by virtue of the dealership agreement the
competition in the market as regards the sale of farm equipment
shall be between JII, as the dealer of SEACOM, and other
companies, not as against SEACOM itself, the Court stated:
However, SEACOM not satisfied with the presence of its dealer JII
in the market, joined the competition even as against the latter,
and thereby changed the scenario of the competition thereby
rendering inutile the dealership agreement which they entered
into to the manifest prejudice of JII. Hence the trial court trial
court was correct when it applied Art. 19 of the Civil Code in the
case at bar in that appellant SEACOM acted in bad faith when it
competed with its own dealer as regards the sale of farm
machineries, thereby depriving appellee JII of the opportunity to
gain a clear profit of P85,000.00.
role and undertaking of JII to promote and sell said equipment.
Under the dealership agreement, JII was to act as a middleman to
sell SEACOM's products, in its area of operations, i.e. Iloilo and
Capiz provinces, to the exclusion of other places, 16 to send its
men to Manila for training on repair, servicing and installation of
the items to be handled by it, and to comply with other personnel
and vehicle requirements intended for the benefit of the
dealership. 17 After being informed of the demonstrations JII had
conducted to promote the sales of SEACOM equipment, including
the operations at JII's expense conducted for five months, and
the approval of its facilities (service and parts) by
FSDC, 18 SEACOM participated in the bidding for the said
equipment at a lower price, placing itself in direct competition
with its own dealer. The actuations of SEACOM are tainted by bad
faith.
Even if the dealership agreement was amended to make it on a
non-exclusive basis, 19 SEACOM may not exercise its right
unjustly or in a manner that is not in keeping with honesty or
good faith; otherwise it opens itself to liability under the abuse of
right rule embodied in Article 19 of the Civil Code above-quoted.
This provision, together with the succeeding article on human
relation, was intended to embody certain basic principles "that
are to be observed for the rightful relationship between human
being. and for the stability of the social order." 20 What is sought
to be written into the law is the pervading principle of equity and
justice above strict legalism. 21
We accordingly resolve to affirm the award for unrealized profits.
The Court of Appeals noted that the trial court failed to specify to
which the two appellees the award for moral and exemplary
damages in granted. However, in view of the fact that moral
damages are not as a general rule granted to a corporation, and
that Tirso Jamandre was the one who testified on his feeling very
aggrieved and on his mental anguish and sleepless nights
thinking of how SEACOM "dealt with us behind (our)
backs", 22 the award should go to defendant Jamandre, President
of JII.
WHEREFORE. the judgment appealed from is AFFIRMED with the
modification that the award of P2,000.00 in moral and exemplary
damages shall be paid to defendant Tirso Jamandre.

We find no cogent reason to overturn the factual finding of the Costs against appellant.
two courts that SEACOM joined the bidding for the sale of the
farm equipment after it was informed that JII was already SO ORDERED.
promoting the sales of said equipment to the FSDC. Moreover,
the conclusion of the trial court that the SEACOM offered FSDC a Melo, Vitug, Panganiban and Purisima, JJ., concur.
lower price than the price offered by JII to FSDC is supported by
the evidence: the price offered by JII to FSDC is P27,167 per
unit 12 but the prices at which SEACOM sold to FSDC were at
P22,867.00 for Model CT 83-2, P21,093.50 for model CT 83-E,
and P18,979.25 for model CT 534. The fact that SEACOM may
have offered to JII, in lieu of a requested 50% discount, a
discount effectively translating to 37% of the list price and
actually sold to FSDC at 35% less than the list price 13does not
detract from the fact that by participating in the bidding of FSDC,
it actually competed with its own dealer who had earlier
conducted demonstrations and promoted its own products for the
sale of the very same equipment, Exh. "N" for the plaintiff
confirms that both SEACOM and Jamandre participated in the
bidding. 14 However, the SEACOM was awarded the contract
directly from Manila. 15 The testimony of Tirso Jamandre that JII
was the sole representative of SEACOM in the local
demonstrations to convince the farmers and cooperative officers
to accept the Mitsubishi brand of equipment in preference to
other brands, was unrebutted by SEACOM.

Clearly, the bad faith of SEACOM was established. By appointing

as a dealer of its agricultural equipment, SEACOM recognized the

9
G.R. No. 128690 January 21, 1999

ABS-CBN BROADCASTING CORPORATION, petitioner,

vs.
HONORABLE COURT OF APPEALS, REPUBLIC
BROADCASTING CORP, VIVA PRODUCTION, INC., and
VICENTE DEL ROSARIO, respondents.

DAVIDE, JR., CJ.:

In this petition for review on certiorari, petitioner ABS-CBN

Broadcasting Corp. (hereafter ABS-CBN) seeks to reverse and set
aside the decision 1 of 31 October 1996 and the resolution 2 of 10
March 1997 of the Court of Appeals in CA-G.R. CV No. 44125. The
former affirmed with modification the decision 3 of 28 April 1993
of the Regional Trial Court (RTC) of Quezon City, Branch 80, in
Civil Case No. Q-92-12309. The latter denied the motion to
reconsider the decision of 31 October 1996.

The antecedents, as found by the RTC and adopted by the Court

of Appeals, are as follows:

In 1990, ABS-CBN and Viva executed a Film Exhibition Agreement

(Exh. "A") whereby Viva gave ABS-CBN an exclusive right to
exhibit some Viva films. Sometime in December 1991, in
accordance with paragraph 2.4 [sic] of said agreement stating
that —.

1.4 ABS-CBN shall have the right of first refusal to the next
twenty-four (24) Viva films for TV telecast under such terms as
may be agreed upon by the parties hereto, provided, however,
that such right shall be exercised by ABS-CBN from the actual
offer in writing.

Viva, through defendant Del Rosario, offered ABS-CBN, through

its vice-president Charo Santos-Concio, a list of three(3) film
packages (36 title) from which ABS-CBN may exercise its right of
first refusal under the afore-said agreement (Exhs. "1" par, 2, "2,"
"2-A'' and "2-B"-Viva). ABS-CBN, however through Mrs. Concio,
"can tick off only ten (10) titles" (from the list) "we can purchase"
(Exh. "3" - Viva) and therefore did not accept said list (TSN, June

10
8, 1992, pp. 9-10). The titles ticked off by Mrs. Concio are not the
subject of the case at bar except the film ''Maging Sino Ka Man."
For further enlightenment, this rejection letter dated January 06,
1992 (Exh "3" - Viva) is hereby quoted:
6 January 1992
Dear Vic,
This is not a very formal business letter I am writing to you as I
would like to express my difficulty in recommending the purchase
of the three film packages you are offering ABS-CBN.
From among the three packages I can only tick off 10 titles we
can purchase. Please see attached. I hope you will understand my
position. Most of the action pictures in the list do not have big
action stars in the cast. They are not for primetime. In line with
this I wish to mention that I have not scheduled for telecast
several action pictures in out very first contract because of the
cheap production value of these movies as well as the lack of big
action stars. As a film producer, I am sure you understand what I
am trying to say as Viva produces only big action pictures.
In fact, I would like to request two (2) additional runs for these
movies as I can only schedule them in our non-primetime slots.
We have to cover the amount that was paid for these movies
because as you very well know that non-primetime advertising
rates are very low. These are the unaired titles in the first
contract.
1. Kontra Persa [sic].
2. Raider Platoon.
3. Underground guerillas
4. Tiger Command
5. Boy de Sabog
6. Lady Commando
7. Batang Matadero
8. Rebelyon
I hope you will consider this request of mine.
The other dramatic films have been offered to us before and have
been rejected because of the ruling of MTRCB to have them aired
at 9:00 p.m. due to their very adult themes.
As for the 10 titles I have choosen [sic] from the 3 packages
please consider including all the other Viva movies produced last
year. I have quite an attractive offer to make.
Thanking you and with my warmest regards.
(Signed)
Charo Santos-Concio
On February 27, 1992, defendant Del Rosario approached
ABS-CBN's Ms. Concio, with a list consisting of 52 original movie
titles (i.e. not yet aired on television) including the 14 titles
subject of the present case, as well as 104 re-runs (previously
aired on television) from which ABS-CBN may choose another 52
titles, as a total of 156 titles, proposing to sell to ABS-CBN airing
rights over this package of 52 originals and 52 re-runs for
P60,000,000.00 of which P30,000,000.00 will be in cash and
P30,000,000.00 worth of television spots (Exh. "4" to "4-C" Viva;
"9" -Viva).
On April 2, 1992, defendant Del Rosario and ABS-CBN general
manager, Eugenio Lopez III, met at the Tamarind Grill Restaurant
in Quezon City to discuss the package proposal of Viva. What
transpired in that lunch meeting is the subject of conflicting
versions. Mr. Lopez testified that he and Mr. Del Rosario allegedly
agreed that ABS-CRN was granted exclusive film rights to
fourteen (14) films for a total consideration of P36 million; that he
allegedly put this agreement as to the price and number of films
in a "napkin'' and signed it and gave it to Mr. Del Rosario (Exh. D;
TSN, pp. 24-26, 77-78, June 8, 1992). On the other hand, Del
Rosario denied having made any agreement with Lopez regarding
the 14 Viva films; denied the existence of a napkin in which Lopez
wrote something; and insisted that what he and Lopez discussed
at the lunch meeting was Viva's film package offer of 104 films
(52 originals and 52 re-runs) for a total price of P60 million. Mr.
Lopez promising [sic]to make a counter proposal which came in
the form of a proposal contract Annex "C" of the complaint (Exh.
"1"·- Viva; Exh. "C" - ABS-CBN).
On April 06, 1992, Del Rosario and Mr. Graciano Gozon of RBS
Senior vice-president for Finance discussed the terms and
conditions of Viva's offer to sell the 104 films, after the rejection
of the same package by ABS-CBN.
On April 07, 1992, defendant Del Rosario received through his
secretary, a handwritten note from Ms. Concio, (Exh. "5" - Viva),
which reads: "Here's the draft of the contract. I hope you find
everything in order," to which was attached a draft exhibition
agreement (Exh. "C''- ABS-CBN; Exh. "9" - Viva, p. 3) a
counter-proposal covering 53 films, 52 of which came from the
list sent by defendant Del Rosario and one film was added by Ms.
Concio, for a consideration of P35 million. Exhibit "C" provides
that ABS-CBN is granted films right to 53 films and contains a
right of first refusal to "1992 Viva Films." The said counter
proposal was however rejected by Viva's Board of Directors [in
the] evening of the same day, April 7, 1992, as Viva would not sell
anything less than the package of 104 films for P60 million pesos
(Exh. "9" - Viva), and such rejection was relayed to Ms. Concio.
On April 29, 1992, after the rejection of ABS-CBN and following
several negotiations and meetings defendant Del Rosario and
Viva's President Teresita Cruz, in consideration of P60 million,
signed a letter of agreement dated April 24, 1992. granting RBS
the exclusive right to air 104 Viva-produced and/or acquired films
(Exh. "7-A" - RBS; Exh. "4" - RBS) including the fourteen (14)
films subject of the present case. 4
On 27 May 1992, ABS-CBN filed before the RTC a complaint for
specific performance with a prayer for a writ of preliminary
injunction and/or temporary restraining order against private
respondents Republic Broadcasting Corporation 5 (hereafter
RBS ), Viva Production (hereafter VIVA), and Vicente Del Rosario.
The complaint was docketed as Civil Case No. Q-92-12309.
On 27 May 1992, RTC issued a temporary restraining
order 6 enjoining private respondents from proceeding with the
airing, broadcasting, and televising of the fourteen VIVA films
subject of the controversy, starting with the film Maging Sino Ka
Man, which was scheduled to be shown on private respondents
RBS' channel 7 at seven o'clock in the evening of said date.
On 17 June 1992, after appropriate proceedings, the RTC issued
an
11
order 7 directing the issuance of a writ of preliminary injunction
upon ABS-CBN's posting of P35 million bond. ABS-CBN moved for
the reduction of the bond, 8 while private respondents moved for
reconsideration of the order and offered to put up a
counterbound. 9
In the meantime, private respondents filed separate answers with
counterclaim. 10 RBS also set up a cross-claim against VIVA..
On 3 August 1992, the RTC issued an order 11 dissolving the writ
of preliminary injunction upon the posting by RBS of a P30 million
counterbond to answer for whatever damages ABS-CBN might
suffer by virtue of such dissolution. However, it reduced
petitioner's injunction bond to P15 million as a condition
precedent for the reinstatement of the writ of preliminary
injunction should private respondents be unable to post a
counterbond.
At the pre-trial 12 on 6 August 1992, the parties, upon suggestion
of the court, agreed to explore the possibility of an amicable
settlement. In the meantime, RBS prayed for and was granted
reasonable time within which to put up a P30 million counterbond
in the event that no settlement would be reached.
As the parties failed to enter into an amicable settlement RBS
posted on 1 October 1992 a counterbond, which the RTC
approved in its Order of 15 October 1992.13
On 19 October 1992, ABS-CBN filed a motion for
reconsideration 14 of the 3 August and 15 October 1992 Orders,
which RBS opposed. 15
On 29 October 1992, the RTC conducted a pre-trial. 16
Pending resolution of its motion for reconsideration, ABS-CBN
filed with the Court of Appeals a petition17challenging the RTC's
Orders of 3 August and 15 October 1992 and praying for the
issuance of a writ of preliminary injunction to enjoin the RTC from
enforcing said orders. The case was docketed as CA-G.R. SP No.
29300.
On 3 November 1992, the Court of Appeals issued a temporary
restraining order18 to enjoin the airing, broadcasting, and
televising of any or all of the films involved in the controversy.
On 18 December 1992, the Court of Appeals promulgated a
decision 19 dismissing the petition in CA -G.R. No. 29300 for being
premature. ABS-CBN challenged the dismissal in a petition for
review filed with this Court on 19 January 1993, which was
docketed as G.R. No. 108363.
In the meantime the RTC received the evidence for the parties in
Civil Case No. Q-192-1209. Thereafter, on 28 April 1993, it
rendered a decision 20 in favor of RBS and VIVA and against
ABS-CBN disposing as follows:
WHEREFORE, under cool reflection and prescinding from the
foregoing, judgments is rendered in favor of defendants and
against the plaintiff.
(1) The complaint is hereby dismissed;
(2) Plaintiff ABS-CBN is ordered to pay defendant RBS the
following:
a) P107,727.00, the amount of premium paid by RBS to the
surety which issued defendant RBS's bond to lift the injunction;
b) P191,843.00 for the amount of print advertisement for "Maging
Sino Ka Man" in various newspapers;
c) Attorney's fees in the amount of P1 million;
d) P5 million as and by way of moral damages;
e) P5 million as and by way of exemplary damages;
(3) For defendant VIVA, plaintiff ABS-CBN is ordered to pay
P212,000.00 by way of reasonable attorney's fees.
(4) The cross-claim of defendant RBS against defendant VIVA is
dismissed.
(5) Plaintiff to pay the costs.
According to the RTC, there was no meeting of minds on the price
and terms of the offer. The alleged agreement between Lopez III
and Del Rosario was subject to the approval of the VIVA Board of
Directors, and said agreement was disapproved during the
meeting of the Board on 7 April 1992. Hence, there was no basis
for ABS-CBN's demand that VIVA signed the 1992 Film Exhibition
Agreement. Furthermore, the right of first refusal under the 1990
Film Exhibition Agreement had previously been exercised per Ms.
Concio's letter to Del Rosario ticking off ten titles acceptable to
them, which would have made the 1992 agreement an entirely
new contract.
On 21 June 1993, this Court denied21 ABS-CBN's petition for
review in G.R. No. 108363, as no reversible error was committed
by the Court of Appeals in its challenged decision and the case
had "become moot and academic in view of the dismissal of the
main action by the court a quo in its decision" of 28 April 1993.
Aggrieved by the RTC's decision, ABS-CBN appealed to the Court
of Appeals claiming that there was a perfected contract between
ABS-CBN and VIVA granting ABS-CBN the exclusive right to
exhibit the subject films. Private respondents VIVA and Del
Rosario also appealed seeking moral and exemplary damages and
additional attorney's fees.
In its decision of 31 October 1996, the Court of Appeals agreed
with the RTC that the contract between ABS-CBN and VIVA had
not been perfected, absent the approval by the VIVA Board of
Directors of whatever Del Rosario, it's agent, might have agreed
with Lopez III. The appellate court did not even believe
ABS-CBN's evidence that Lopez III actually wrote down such an
agreement on a "napkin," as the same was never produced in
court. It likewise rejected ABS-CBN's insistence on its right of first
refusal and ratiocinated as follows:
As regards the matter of right of first refusal, it may be true that a
Film Exhibition Agreement was entered into between Appellant
ABS-CBN and appellant VIVA under Exhibit "A" in 1990, and that
parag. 1.4 thereof provides:
1.4 ABS-CBN shall have the right of first refusal to the next
twenty-four (24) VIVA films for TV telecast under such terms as
may be agreed upon by the parties hereto, provided, however,
that such right shall be exercised by ABS-CBN within a period of
fifteen (15) days from the actual offer in writing (Records, p. 14).
[H]owever, it is very clear that said right of first refusal in favor of
ABS-CBN shall still be subject to such terms as may be agreed
upon by the parties thereto, and that the said right shall be
exercised by ABS-CBN within fifteen (15) days from the actual
offer in writing.
12
Said parag. 1.4 of the agreement Exhibit "A" on the right of first
refusal did not fix the price of the film right to the twenty-four (24)
films, nor did it specify the terms thereof. The same are still left to
be agreed upon by the parties.
In the instant case, ABS-CBN's letter of rejection Exhibit 3
(Records, p. 89) stated that it can only tick off ten (10) films, and
the draft contract Exhibit "C" accepted only fourteen (14) films,
while parag. 1.4 of Exhibit "A'' speaks of the next twenty-four (24)
films.
The offer of V1VA was sometime in December 1991 (Exhibits 2,
2-A. 2-B; Records, pp. 86-88; Decision, p. 11, Records, p. 1150),
when the first list of VIVA films was sent by Mr. Del Rosario to
ABS-CBN. The Vice President of ABS-CBN, Ms. Charo
Santos-Concio, sent a letter dated January 6, 1992 (Exhibit 3,
Records, p. 89) where ABS-CBN exercised its right of refusal by
rejecting the offer of VIVA.. As aptly observed by the trial court,
with the said letter of Mrs. Concio of January 6, 1992, ABS-CBN
had lost its right of first refusal. And even if We reckon the fifteen
(15) day period from February 27, 1992 (Exhibit 4 to 4-C) when
another list was sent to ABS-CBN after the letter of Mrs. Concio,
still the fifteen (15) day period within which ABS-CBN shall
exercise its right of first refusal has already expired.22
Accordingly, respondent court sustained the award of actual
damages consisting in the cost of print advertisements and the
premium payments for the counterbond, there being adequate
proof of the pecuniary loss which RBS had suffered as a result of
the filing of the complaint by ABS-CBN. As to the award of moral
damages, the Court of Appeals found reasonable basis therefor,
holding that RBS's reputation was debased by the filing of the
complaint in Civil Case No. Q-92-12309 and by the non-showing
of the film "Maging Sino Ka Man." Respondent court also held that
exemplary damages were correctly imposed by way of example or
correction for the public good in view of the filing of the complaint
despite petitioner's knowledge that the contract with VIVA had
not been perfected, It also upheld the award of attorney's fees,
reasoning that with ABS-CBN's act of instituting Civil Case No,
Q-92-1209, RBS was "unnecessarily forced to litigate." The
appellate court, however, reduced the awards of moral damages
to P2 million, exemplary damages to P2 million, and attorney's
fees to P500, 000.00.
On the other hand, respondent Court of Appeals denied VIVA and
Del Rosario's appeal because it was "RBS and not VIVA which was
actually prejudiced when the complaint was filed by ABS-CBN."
Its motion for reconsideration having been denied, ABS-CBN filed
the petition in this case, contending that the Court of Appeals
gravely erred in
I
. . . RULING THAT THERE WAS NO PERFECTED CONTRACT
BETWEEN PETITIONER AND PRIVATE RESPONDENT VIVA
NOTWITHSTANDING PREPONDERANCE OF EVIDENCE ADDUCED
BY PETITIONER TO THE CONTRARY.
II
. . . IN AWARDING ACTUAL AND COMPENSATORY DAMAGES IN
FAVOR OF PRIVATE RESPONDENT RBS.
III
. . . IN AWARDING MORAL AND EXEMPLARY DAMAGES IN FAVOR
OF PRIVATE RESPONDENT RBS.
IV
. . . IN AWARDING ATTORNEY'S FEES IN FAVOR OF RBS.
ABS-CBN claims that it had yet to fully exercise its right of first
refusal over twenty-four titles under the 1990 Film Exhibition
Agreement, as it had chosen only ten titles from the first list. It
insists that we give credence to Lopez's testimony that he and Del
Rosario met at the Tamarind Grill Restaurant, discussed the terms
and conditions of the second list (the 1992 Film Exhibition
Agreement) and upon agreement thereon, wrote the same on a
paper napkin. It also asserts that the contract has already been
effective, as the elements thereof, namely, consent, object, and
consideration were established. It then concludes that the Court
of Appeals' pronouncements were not supported by law and
jurisprudence, as per our decision of 1 December 1995
in Limketkai Sons Milling, Inc. v. Court of Appeals, 23 which
cited Toyota Shaw, Inc. v. Court of Appeals, 24 Ang Yu Asuncion v.
Court of Appeals, 25 and Villonco Realty Company v. Bormaheco.
Inc.26
Anent the actual damages awarded to RBS, ABS-CBN disavows
liability therefor. RBS spent for the premium on the counterbond
of its own volition in order to negate the injunction issued by the
trial court after the parties had ventilated their respective
positions during the hearings for the purpose. The filing of the
counterbond was an option available to RBS, but it can hardly be
argued that ABS-CBN compelled RBS to incur such expense.
Besides, RBS had another available option, i.e., move for the
dissolution or the injunction; or if it was determined to put up a
counterbond, it could have presented a cash bond. Furthermore
under Article 2203 of the Civil Code, the party suffering loss or
injury is also required to exercise the diligence of a good father of
a family to minimize the damages resulting from the act or
omission. As regards the cost of print advertisements, RBS had
not convincingly established that this was a loss attributable to
the non showing "Maging Sino Ka Man"; on the contrary, it was
brought out during trial that with or without the case or the
injunction, RBS would have spent such an amount to generate
interest in the film.
ABS-CBN further contends that there was no clear basis for the
awards of moral and exemplary damages. The controversy
involving ABS-CBN and RBS did not in any way originate from
business transaction between them. The claims for such damages
did not arise from any contractual dealings or from specific acts
committed by ABS-CBN against RBS that may be characterized as
wanton, fraudulent, or reckless; they arose by virtue only of the
filing of the complaint, An award of moral and exemplary
damages is not warranted where the record is bereft of any proof
that a party acted maliciously or in bad faith in filing an
action. 27 In any case, free resort to courts for redress of wrongs
is a matter of public policy. The law recognizes the right of every
one to sue for that which he honestly believes to be his right
without fear of standing trial for damages where by lack of
sufficient evidence, legal technicalities, or a different
interpretation of the laws on the matter, the case would lose
ground. 28 One who makes use of his own legal right does no
injury. 29 If damage results front the filing of the complaint, it
is damnum absque injuria. 30 Besides, moral damages are
generally not awarded in favor of a juridical person, unless it
enjoys a good reputation that was debased by the offending party
resulting in social humiliation.31
As regards the award of attorney's fees, ABS-CBN maintains that
the same had no factual, legal, or equitable justification. In
sustaining the trial court's award, the Court of Appeals acted in
clear disregard of the doctrines laid down in Buan
v. Camaganacan 32 that the text of the decision should state the
reason why attorney's fees are being awarded; otherwise, the
award should be disallowed. Besides, no bad faith has been
13
imputed on, much less proved as having been committed by,
ABS-CBN. It has been held that "where no sufficient showing of
bad faith would be reflected in a party' s persistence in a case
other than an erroneous conviction of the righteousness of his
cause, attorney's fees shall not be recovered as cost." 33
On the other hand, RBS asserts that there was no perfected
contract between ABS-CBN and VIVA absent any meeting of
minds between them regarding the object and consideration of
the alleged contract. It affirms that the ABS-CBN's claim of a right
of first refusal was correctly rejected by the trial court. RBS insist
the premium it had paid for the counterbond constituted a
pecuniary loss upon which it may recover. It was obliged to put
up the counterbound due to the injunction procured by ABS-CBN.
Since the trial court found that ABS-CBN had no cause of action or
valid claim against RBS and, therefore not entitled to the writ of
injunction, RBS could recover from ABS-CBN the premium paid on
the counterbond. Contrary to the claim of ABS-CBN, the cash
bond would prove to be more expensive, as the loss would be
equivalent to the cost of money RBS would forego in case the P30
million came from its funds or was borrowed from banks.
RBS likewise asserts that it was entitled to the cost of
advertisements for the cancelled showing of the film "Maging Sino
Ka Man" because the print advertisements were put out to
announce the showing on a particular day and hour on Channel
7, i.e., in its entirety at one time, not a series to be shown on a
periodic basis. Hence, the print advertisement were good and
relevant for the particular date showing, and since the film could
not be shown on that particular date and hour because of the
injunction, the expenses for the advertisements had gone to
waste.
As regards moral and exemplary damages, RBS asserts that
ABS-CBN filed the case and secured injunctions purely for the
purpose of harassing and prejudicing RBS. Pursuant then to
Article 19 and 21 of the Civil Code, ABS-CBN must be held liable
for such damages. Citing Tolentino,34 damages may be awarded
in cases of abuse of rights even if the act done is not illicit and
there is abuse of rights were plaintiff institutes and action purely
for the purpose of harassing or prejudicing the defendant.
In support of its stand that a juridical entity can recover moral
and exemplary damages, private respondents RBS cited People
v. Manero,35 where it was stated that such entity may recover
moral and exemplary damages if it has a good reputation that is
debased resulting in social humiliation. it then ratiocinates; thus:
There can be no doubt that RBS' reputation has been debased by
ABS-CBN's acts in this case. When RBS was not able to fulfill its
commitment to the viewing public to show the film "Maging Sino
Ka Man" on the scheduled dates and times (and on two occasions
that RBS advertised), it suffered serious embarrassment and
social humiliation. When the showing was canceled, late viewers
called up RBS' offices and subjected RBS to verbal abuse
("Announce kayo nang announce, hindi ninyo naman ilalabas,"
"nanloloko yata kayo") (Exh. 3-RBS, par. 3). This alone was not
something RBS brought upon itself. it was exactly what ABS-CBN
had planned to happen.
The amount of moral and exemplary damages cannot be said to
be excessive. Two reasons justify the amount of the award.
The first is that the humiliation suffered by RBS is national extent.
RBS operations as a broadcasting company is [sic] nationwide. Its
clientele, like that of ABS-CBN, consists of those who own and
watch television. It is not an exaggeration to state, and it is a
matter of judicial notice that almost every other person in the
country watches television. The humiliation suffered by RBS is
multiplied by the number of televiewers who had anticipated the
showing of the film "Maging Sino Ka Man" on May 28 and
November 3, 1992 but did not see it owing to the cancellation.
Added to this are the advertisers who had placed commercial
spots for the telecast and to whom RBS had a commitment in
consideration of the placement to show the film in the dates and
times specified.
The second is that it is a competitor that caused RBS to suffer the
humiliation. The humiliation and injury are far greater in degree
when caused by an entity whose ultimate business objective is to
lure customers (viewers in this case) away from the
competition. 36
For their part, VIVA and Vicente del Rosario contend that the
findings of fact of the trial court and the Court of Appeals do not
support ABS-CBN's claim that there was a perfected contract.
Such factual findings can no longer be disturbed in this petition
for review under Rule 45, as only questions of law can be raised,
not questions of fact. On the issue of damages and attorneys fees,
they adopted the arguments of RBS.
The key issues for our consideration are (1) whether there was a
perfected contract between VIVA and ABS-CBN, and (2) whether
RBS is entitled to damages and attorney's fees. It may be noted
that the award of attorney's fees of P212,000 in favor of VIVA is
not assigned as another error.
I.
The first issue should be resolved against ABS-CBN. A contract is
a meeting of minds between two persons whereby one binds
himself to give something or to render some service to
another 37 for a consideration. there is no contract unless the
following requisites concur: (1) consent of the contracting parties;
(2) object certain which is the subject of the contract; and (3)
cause of the obligation, which is established.38 A contract
undergoes three stages:
(a) preparation, conception, or generation, which is the period of
negotiation and bargaining, ending at the moment of agreement
of the parties;
(b) perfection or birth of the contract, which is the moment when
the parties come to agree on the terms of the contract; and
(c) consummation or death, which is the fulfillment or
performance of the terms agreed upon in the contract. 39
Contracts that are consensual in nature are perfected upon mere
meeting of the minds, Once there is concurrence between the
offer and the acceptance upon the subject matter, consideration,
and terms of payment a contract is produced. The offer must be
certain. To convert the offer into a contract, the acceptance must
be absolute and must not qualify the terms of the offer; it must be
plain, unequivocal, unconditional, and without variance of any
sort from the proposal. A qualified acceptance, or one that
involves a new proposal, constitutes a counter-offer and is a
rejection of the original offer. Consequently, when something is
desired which is not exactly what is proposed in the offer, such
acceptance is not sufficient to generate consent because any
modification or variation from the terms of the offer annuls the
offer.40
When Mr. Del Rosario of VIVA met with Mr. Lopez of ABS-CBN at
the Tamarind Grill on 2 April 1992 to discuss the package of films,
said package of 104 VIVA films was VIVA's offer to ABS-CBN to
enter into a new Film Exhibition Agreement. But ABS-CBN, sent,
through Ms. Concio, a counter-proposal in the form of a draft
contract proposing exhibition of 53 films for a consideration of
P35 million. This counter-proposal could be nothing less than the
14
counter-offer of Mr. Lopez during his conference with Del Rosario
at Tamarind Grill Restaurant. Clearly, there was no acceptance of
VIVA's offer, for it was met by a counter-offer which substantially
varied the terms of the offer.
ABS-CBN's reliance in Limketkai Sons Milling, Inc. v. Court of
Appeals 41 and Villonco Realty Company v. Bormaheco, Inc., 42 is
misplaced. In these cases, it was held that an acceptance may
contain a request for certain changes in the terms of the offer and
yet be a binding acceptance as long as "it is clear that the
meaning of the acceptance is positively and unequivocally to
accept the offer, whether such request is granted or not." This
ruling was, however, reversed in the resolution of 29 March
1996, 43 which ruled that the acceptance of all offer must be
unqualified and absolute, i.e., it "must be identical in all respects
with that of the offer so as to produce consent or meeting of the
minds."
On the other hand, in Villonco, cited in Limketkai, the alleged
changes in the revised counter-offer were not material but merely
clarificatory of what had previously been agreed upon.
It cited the statement in Stuart v. Franklin Life Insurance
Co.44 that "a vendor's change in a phrase of the offer to purchase,
which change does not essentially change the terms of the offer,
does not amount to a rejection of the offer and the tender of a
counter-offer." 45However, when any of the elements of the
contract is modified upon acceptance, such alteration amounts to
a counter-offer.
In the case at bar, ABS-CBN made no unqualified acceptance of
VIVA's offer. Hence, they underwent a period of bargaining.
ABS-CBN then formalized its counter-proposals or counter-offer in
a draft contract, VIVA through its Board of Directors, rejected
such counter-offer, Even if it be conceded arguendo that Del
Rosario had accepted the counter-offer, the acceptance did not
bind VIVA, as there was no proof whatsoever that Del Rosario had
the specific authority to do so.
Under Corporation Code,46 unless otherwise provided by said
Code, corporate powers, such as the power; to enter into
contracts; are exercised by the Board of Directors. However, the
Board may delegate such powers to either an executive
committee or officials or contracted managers. The delegation,
except for the executive committee, must be for specific
purposes, 47 Delegation to officers makes the latter agents of the
corporation; accordingly, the general rules of agency as to the
bindings effects of their acts would
apply. 48 For such officers to be deemed fully clothed by the
corporation to exercise a power of the Board, the latter must
specially authorize them to do so. That Del Rosario did not have
the authority to accept ABS-CBN's counter-offer was best
evidenced by his submission of the draft contract to VIVA's Board
of Directors for the latter's approval. In any event, there was
between Del Rosario and Lopez III no meeting of minds. The
following findings of the trial court are instructive:
A number of considerations militate against ABS-CBN's claim that
a contract was perfected at that lunch meeting on April 02, 1992
at the Tamarind Grill.
FIRST, Mr. Lopez claimed that what was agreed upon at the
Tamarind Grill referred to the price and the number of films,
which he wrote on a napkin. However, Exhibit "C"
contains numerous provisions which, were not discussed at the
Tamarind Grill, if Lopez testimony was to be believed nor could
they have been physically written on a napkin. There was even
doubt as to whether it was a paper napkin or a cloth napkin. In
short what were written in Exhibit "C'' were not discussed, and
therefore could not have been agreed upon, by the parties. How
then could this court compel the parties to sign Exhibit "C" when
the provisions thereof were not previously agreed upon?
SECOND, Mr. Lopez claimed that what was agreed upon as the
subject matter of the contract was 14 films. The complaint in fact
prays for delivery of 14 films. But Exhibit "C" mentions 53 films as
its subject matter. Which is which If Exhibits "C" reflected the true
intent of the parties, then ABS-CBN's claim for 14 films in its
complaint is false or if what it alleged in the complaint is true,
then Exhibit "C" did not reflect what was agreed upon by the
parties. This underscores the fact that there was no meeting of
the minds as to the subject matter of the contracts, so as to
preclude perfection thereof. For settled is the rule that there can
be no contract where there is no object which is its subject matter
(Art. 1318, NCC).
THIRD, Mr. Lopez [sic] answer to question 29 of his affidavit
testimony (Exh. "D") states:
We were able to reach an agreement. VIVA gave us the exclusive
license to show these fourteen (14) films, and we agreed to pay
Viva the amount of P16,050,000.00 as well as grant Viva
commercial slots worth P19,950,000.00. We had already
earmarked this P16, 050,000.00.
which gives a total consideration of P36 million (P19,950,000.00
plus P16,050,000.00. equals P36,000,000.00).
On cross-examination Mr. Lopez testified:
Q. What was written in this napkin?
A. The total price, the breakdown the known Viva movies, the 7
blockbuster movies and the other 7 Viva movies because the price
was broken down accordingly. The none [sic] Viva and the seven
other Viva movies and the sharing between the cash portion and
the concerned spot portion in the total amount of P35 million
pesos.
Now, which is which? P36 million or P35 million? This weakens
ABS-CBN's claim.
FOURTH. Mrs. Concio, testifying for ABS-CBN stated that she
transmitted Exhibit "C" to Mr. Del Rosario with a handwritten note,
describing said Exhibit "C" as a "draft." (Exh. "5" - Viva; tsn pp.
23-24 June 08, 1992). The said draft has a well defined meaning.
Since Exhibit "C" is only a draft, or a tentative, provisional or
preparatory writing prepared for discussion, the terms and
conditions thereof could not have been previously agreed upon by
ABS-CBN and Viva Exhibit "C'' could not therefore legally bind
Viva, not having agreed thereto. In fact, Ms. Concio admitted that
the terms and conditions embodied in Exhibit "C" were prepared
by ABS-CBN's lawyers and there was no discussion on said terms
and conditions. . . .
As the parties had not yet discussed the proposed terms and
conditions in Exhibit "C," and there was no evidence whatsoever
that Viva agreed to the terms and conditions thereof, said
document cannot be a binding contract. The fact that Viva
refused to sign Exhibit "C" reveals only two [sic] well that it did
not agree on its terms and conditions, and this court has no
authority to compel Viva to agree thereto.
FIFTH. Mr. Lopez understand [sic] that what he and Mr. Del
Rosario agreed upon at the Tamarind Grill was only provisional, in
the sense that it was subject to approval by the Board of Directors
of Viva. He testified:
15
Q. Now, Mr. Witness, and after that Tamarind meeting ... the
second meeting wherein you claimed that you have the meeting
of the minds between you and Mr. Vic del Rosario, what
happened?
A. Vic Del Rosario was supposed to call us up and tell us
specifically the result of the discussion with the Board of
Directors.
Q. And you are referring to the so-called agreement which you
wrote in [sic] a piece of paper?
A. Yes, sir.
Q. So, he was going to forward that to the board of Directors for
approval?
A. Yes, sir. (Tsn, pp. 42-43, June 8, 1992)
Q. Did Mr. Del Rosario tell you that he will submit it to his Board
for approval?
A. Yes, sir. (Tsn, p. 69, June 8, 1992).
The above testimony of Mr. Lopez shows beyond doubt that he
knew Mr. Del Rosario had no authority to bind Viva to a contract
with ABS-CBN until and unless its Board of Directors approved it.
The complaint, in fact, alleges that Mr. Del Rosario "is the
Executive Producer of defendant Viva" which "is a corporation."
(par. 2, complaint). As a mere agent of Viva, Del Rosario could
not bind Viva unless what he did is ratified by its Board of
Directors. (Vicente vs. Geraldez, 52 SCRA 210; Arnold
vs. Willetsand Paterson, 44 Phil. 634). As a mere agent,
recognized as such by plaintiff, Del Rosario could not be held
liable jointly and severally with Viva and his inclusion as party
defendant has no legal basis. (Salonga vs. Warner Barner [sic] ,
COLTA , 88 Phil. 125; Salmon vs. Tan, 36 Phil. 556).
The testimony of Mr. Lopez and the allegations in the complaint
are clear admissions that what was supposed to have been
agreed upon at the Tamarind Grill between Mr. Lopez and Del
Rosario was not a binding agreement. It is as it should be
because corporate power to enter into a contract is lodged in the
Board of Directors. (Sec. 23, Corporation Code). Without such
board approval by the Viva board, whatever agreement Lopez
and Del Rosario arrived at could not ripen into a valid contract
binding upon Viva (Yao Ka Sin Trading vs. Court of Appeals, 209
SCRA 763). The evidence adduced shows that the Board of
Directors of Viva rejected Exhibit "C" and insisted that the film
package for 140 films be maintained (Exh. "7-1" - Viva ). 49
The contention that ABS-CBN had yet to fully exercise its right of
first refusal over twenty-four films under the 1990 Film Exhibition
Agreement and that the meeting between Lopez and Del Rosario
was a continuation of said previous contract is untenable. As
observed by the trial court, ABS-CBN right of first refusal had
already been exercised when Ms. Concio wrote to VIVA ticking off
ten films, Thus:
[T]he subsequent negotiation with ABS-CBN two (2) months after
this letter was sent, was for an entirely different package. Ms.
Concio herself admitted on cross-examination to having used or
exercised the right of first refusal. She stated that the list was not
acceptable and was indeed not accepted by ABS-CBN, (TSN, June
8, 1992, pp. 8-10). Even Mr. Lopez himself admitted that the right
of the first refusal may have been already exercised by Ms. Concio
(as she had). (TSN, June 8, 1992, pp. 71-75). Del Rosario himself
knew and understand [sic] that ABS-CBN has lost its rights of the
first refusal when his list of 36 titles were rejected (Tsn, June 9,
1992, pp. 10-11) 50
II
However, we find for ABS-CBN on the issue of damages. We shall
first take up actual damages. Chapter 2, Title XVIII, Book IV of
the Civil Code is the specific law on actual or compensatory
damages. Except as provided by law or by stipulation, one is
entitled to compensation for actual damages only for such
pecuniary loss suffered by him as he has duly proved. 51 The
indemnification shall comprehend not only the value of the loss
suffered, but also that of the profits that the obligee failed to
obtain. 52 In contracts and quasi-contracts the damages which
may be awarded are dependent on whether the obligor acted
with good faith or otherwise, It case of good faith, the damages
recoverable are those which are the natural and probable
consequences of the breach of the obligation and which the
parties have foreseen or could have reasonably foreseen at the
time of the constitution of the obligation. If the obligor acted with
fraud, bad faith, malice, or wanton attitude, he shall be
responsible for all damages which may be reasonably attributed
to the non-performance of the obligation. 53 In crimes and
quasi-delicts, the defendant shall be liable for all damages which
are the natural and probable consequences of the act or omission
complained of, whether or not such damages has been foreseen
or could have reasonably been foreseen by the defendant.54
Actual damages may likewise be recovered for loss or impairment
of earning capacity in cases of temporary or permanent personal
injury, or for injury to the plaintiff's business standing or
commercial credit.55
The claim of RBS for actual damages did not arise from contract,
quasi-contract, delict, or quasi-delict. It arose from the fact of
filing of the complaint despite ABS-CBN's alleged knowledge of
lack of cause of action. Thus paragraph 12 of RBS's Answer with
Counterclaim and Cross-claim under the heading COUNTERCLAIM
specifically alleges:
12. ABS-CBN filed the complaint knowing fully well that it has no
cause of action RBS. As a result thereof, RBS suffered actual
damages in the amount of P6,621,195.32. 56
Needless to state the award of actual damages cannot be
comprehended under the above law on actual damages. RBS
could only probably take refuge under Articles 19, 20, and 21 of
the Civil Code, which read as follows:
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 tile
same.
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.
It may further be observed that in cases where a writ of
preliminary injunction is issued, the damages which the
defendant may suffer by reason of the writ are recoverable from
the injunctive bond. 57 In this case, ABS-CBN had not yet filed the
required bond; as a matter of fact, it asked for reduction of the
bond and even went to the Court of Appeals to challenge the
order on the matter, Clearly then, it was not necessary for RBS to
file a counterbond. Hence, ABS-CBN cannot be held responsible
for the premium RBS paid for the counterbond.
16
Neither could ABS-CBN be liable for the print advertisements for
"Maging Sino Ka Man" for lack of sufficient legal basis. The RTC
issued a temporary restraining order and later, a writ of
preliminary injunction on the basis of its determination that there
existed sufficient ground for the issuance thereof. Notably, the
RTC did not dissolve the injunction on the ground of lack of legal
and factual basis, but because of the plea of RBS that it be
allowed to put up a counterbond.
As regards attorney's fees, the law is clear that in the absence of
stipulation, attorney's fees may be recovered as actual or
compensatory damages under any of the circumstances provided
for in Article 2208 of the Civil Code. 58
The general rule is that attorney's fees cannot be recovered as
part of damages because of the policy that no premium should be
placed on the right to litigate.59 They are not to be awarded every
time a party wins a suit. The power of the court to award
attorney's fees under Article 2208 demands factual, legal, and
equitable justification.60Even when claimant is compelled to
litigate with third persons or to incur expenses to protect his
rights, still attorney's fees may not be awarded where no
sufficient showing of bad faith could be reflected in a party's
persistence in a case other than erroneous conviction of the
righteousness of his cause. 61
As to moral damages the law is Section 1, Chapter 3, Title XVIII,
Book IV of the Civil Code. Article 2217 thereof defines what are
included in moral damages, while Article 2219 enumerates the
cases where they may be recovered, Article 2220 provides that
moral damages may be recovered in breaches of contract where
the defendant acted fraudulently or in bad faith. RBS's claim for
moral damages could possibly fall only under item (10) of Article
2219, thereof which reads:
circumstances; 69 in quasi-contracts, if the defendant acted with
gross negligence; 70 and in contracts and quasi-contracts, if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner.71
It may be reiterated that the claim of RBS against ABS-CBN is not
based on contract, quasi-contract, delict, or quasi-delict, Hence,
the claims for moral and exemplary damages can only be based
on Articles 19, 20, and 21 of the Civil Code.
The elements of abuse of right under Article 19 are the following:
(1) the existence of a legal right or duty, (2) which is exercised in
bad faith, and (3) for the sole intent of prejudicing or injuring
another. Article 20 speaks of the general sanction for all other
provisions of law which do not especially provide for their own
sanction; while Article 21 deals with acts contra bonus mores,
and has the following elements; (1) there is an act which is legal,
(2) but which is contrary to morals, good custom, public order, or
public policy, and (3) and it is done with intent to injure. 72
Verily then, malice or bad faith is at the core of Articles 19, 20,
and 21. Malice or bad faith implies a conscious and intentional
design to do a wrongful act for a dishonest purpose or moral
obliquity. 73 Such must be substantiated by evidence. 74
There is no adequate proof that ABS-CBN was inspired by malice
or bad faith. It was honestly convinced of the merits of its cause
after it had undergone serious negotiations culminating in its
formal submission of a draft contract. Settled is the rule that the
adverse result of an action does not per se make the action
wrongful and subject the actor to damages, for the law could not
have meant to impose a penalty on the right to litigate. If
damages result from a person's exercise of a right, it is damnum
absque injuria.75

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, WHEREFORE, the instant petition is GRANTED. The challenged
32, 34, and 35. decision of the Court of Appeals in CA-G.R. CV No, 44125 is
hereby REVERSED except as to unappealed award of attorney's
Moral damages are in the category of an award designed to fees in favor of VIVA Productions, Inc.1âwphi1.nêt
compensate the claimant for actual injury suffered. and not to
impose a penalty on the wrongdoer.62 The award is not meant to No pronouncement as to costs.
enrich the complainant at the expense of the defendant, but to
enable the injured party to obtain means, diversion, or
SO ORDERED.
amusements that will serve to obviate then moral suffering he has
undergone. It is aimed at the restoration, within the limits of the
Melo, Kapunan, Martinez and Pardo JJ., concur.
possible, of the spiritual status quo ante, and should be
proportionate to the suffering inflicted.63 Trial courts must then
guard against the award of exorbitant damages; they should
exercise balanced restrained and measured objectivity to avoid
suspicion that it was due to passion, prejudice, or corruption on
the part of the trial court. 64

The award of moral damages cannot be granted in favor of a

corporation because, being an artificial person and having
existence only in legal contemplation, it has no feelings, no
emotions, no senses, It cannot, therefore, experience physical
suffering and mental anguish, which call be experienced only by
one having a nervous system. 65 The statement in People
v. Manero 66 and Mambulao Lumber Co. v. PNB 67 that a
corporation may recover moral damages if it "has a good
reputation that is debased, resulting in social humiliation" is
an obiter dictum. On this score alone the award for damages
must be set aside, since RBS is a corporation.

The basic law on exemplary damages is Section 5, Chapter 3,

Title XVIII, Book IV of the Civil Code. These are imposed by way
of example or correction for the public good, in addition to moral,
temperate, liquidated or compensatory damages. 68 They are
recoverable in criminal cases as part of the civil liability when the
crime was committed with one or more aggravating

17
 VICENTE RELLOSA, CYNTHIA ORTEGA assisted by
husband Roberto Ortega, petitioner,
vs.
GONZALO PELLOSIS, INESITA MOSTE, and DANILO
RADAM, respondents.

VITUG, J.:

"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." 1 This provision in our law
is not just a declaration of principle for it can in itself constitute,
when unduly ignored or violated, a valid source of a cause of
action or defense.

The case seeks to reverse the Court of Appeals in not

countenancing an attempt to abridge and render inutile a legal
right to contest an adverse ruling of an agency of government.

Respondents were lessees of a parcel of land, owned by one

Marta Reyes, located at San Pascual Street, Malate, Manila.
Respondents had built their houses on the land which, over the
years, underwent continuous improvements. After the demise of
Marta, the land was inherited by her son Victor Reyes. Sometime
in 1986, Victor informed respondents that, for being lessees of
the land for more than twenty (20) years, they would have a right
of first refusal to buy the land. Sometime in the early part of 1989,
without the knowledge of respondents, the land occupied by
them was sold to petitioner Cynthia Ortega who was able to
ultimately secure title to the property in her name.

On 25 May 1989, Cynthia Ortega, filed a petition for

condemnation, docketed Condemnation Case No. 89-05-007,
with the Office of the Building Official, City of Manila, of the
structures on the land.

On 31 May 1989, respondents filed with the Regional Trial Court

of Manila a suit for the "Declaration of Nullity of the Sale,"
docketed as Civil Case No. 89-49176, made in favor of petitioner
Cynthia Ortega predicated upon their right of first refusal which
was claimed to have been impinged upon the sale of the land to
petitioner Ortega without their knowledge.

After due hearing in the condemnation case, the Office of the

Building Official issued a resolution, dated 27 November 1989,
ordering the demolition of the houses of respondents. Copies of
the resolution were served upon respondents and their counsel
on 07 December 1989. The following day, or on 08 December
1989, Cynthia Ortega, together with her father and co-petitioner,
Vicente Rellosa, hired workers to commence the demolition of
respondents' houses. Due to the timely intervention of a mobile
unit of the Western Police District, the intended demolition did not
take place following talks between petitioner Rellosa and counsel
who pleaded that the demolition be suspended since the order
sought to be implemented was not yet final and executory. On 11
December 1989, respondents filed their appeal contesting the
order of the Office of the Building Official. On 12 December 1989,
petitioners once again hired workers and proceeded with the
demolition of respondents' houses.

Resultantly, respondents filed Civil Case No. 89-49176 before the

Regional Trial Court of Manila, Branch 54, praying that petitioners
be ordered to pay moral and exemplary damages, as well as
attorney's fee, for the untimely demolition of the houses. After
trial, the court dismissed the complaint of respondents and
instead ordered them to pay petitioners moral damages. On
appeal, the Court of Appeals, on the basis of its findings and
conclusions, reversed the decision of the trial court and ordered
G.R. No. 138964 August 9, 2001 petitioners to pay respondents the following sums:

18
"1) Seventy Five Thousand Pesos (P75,000.00), or Twenty Five
Thousand Pesos (P25,000.00) for each appellant, by way of moral
damages;"
"2) Seventy Five Thousand Pesos (P75,000.00), or Twenty Five
thousand Pesos (P25,000.00) for each appellant, by way of
exemplary damages;"
"3) Fifteen Thousand Pesos (P15,000.00) as and for attorney's
fees; and
fifteen-day appeal period in favor of a party aggrieved by an
adverse ruling of the Office of the Building Official but by the
precipitate action of petitioners in demolishing the houses of
respondents (prior to the expiration of the period to appeal), the
latter were effectively deprived of this recourse. The fact that the
order of demolition was later affirmed by the Department of
Public Works and Highways was of no moment. The action of
petitioners up to the point where they were able to secure an
order of demolition was not condemnable but implementing the
order unmindful of the right of respondents to contest the ruling
was a different matter and could only be held utterly indefensible.

"4) The costs of suit."2

The Court, however, finds the award of P75,000.00 exemplary
damages and another of P75,000.00 moral damages for each
The appellate court ruled:
respondent to be rather excessive given the circumstances; the
awards must be reduced to the reasonable amounts of
"Thus, by the clear provisions of paragraph 23 of the P20,000.00 exemplary damages and P20,000.00 moral damages.
Implementing Rules and Regulations of PD 1096 (otherwise
known as the Building Code), above, appellants, being the parties
WHEREFORE, the assailed decision of the Court of Appeals is
adversely affected by the November 27, 1989 Resolution of the
MODIFIED by reducing the awards of P75,000.00 exemplary
Office of the Building Official, had fifteen (15) days from receipt of
damages and of P75,000.00 moral damages to each respondent
a copy of the same within which to perfect an administrative
reduced to P20,000.00 exemplary damages and P20,000.00
appeal. Thus, since appellants received a copy of the Resolution
moral damages for each respondent. In all other respects, the
on December 7, 1989, they had until December 22, 1989 within
decision of the appellate court is AFFIRMED. No costs.
which to perfect an administrative appeal and until such time, the
said Resolution was not yet final and executory."
SO ORDERED.

xxx xxx xxx

Melo, Panganiban and Gonzaga-Reyes, JJ ., concur.
Sandoval-Gutierrez, J ., is on leave.
"It cannot be denied, therefore, that when appellees commenced
to demolish appellants' houses as early as December 8, 1989 and
eventually on December 12, 1989, neither the Resolution of the
Building Official nor the Demolition Order itself were final and
executory."3

Petitioners filed the instant petition contending that the appellate

court gravely erred in ruling that the premature demolition of
respondents' houses entitled them to the award of damages.
Petitioners pointed out that the order of the Office of the Building
Official was eventually upheld on appeal by the Department of
Public Works and Highways in its decision of 14 March 1990.
Furthermore, petitioners added, the structures subject matter of
the demolition order were declared to be dangerous structures by
the Office of the Building Official and, as such, could be abated to
avoid danger to the public.

The Court rules for affirmance of the assailed decision.

A right is a power, privilege, or immunity guaranteed under a

constitution, statute or decisional law, or recognized as a result of
long usage,4 constitutive of a legally enforceable claim of one
person against another.

Petitioner might verily be the owner of the land, with the right to
enjoy5 and to exclude any person from the enjoyment and
disposal thereof,6 but the exercise of these rights is not without
limitations. The abuse of rights rule established in Article 19 of the
Civil Code requires every person to act with justice, to give
everyone his due; and to observe honesty and good faith.7 When
a right is exercised in a manner which discards these norms
resulting in damage to another, a legal wrong is committed for
which the actor can be held accountable. In this instance, the
issue is not so much about the existence of the right or validity of
the order of demolition as the question of whether or not
petitioners have acted in conformity with, and not in disregard of,
the standard set by Article 19 of the Civil Code.

At the time petitioners implemented the order of demolition,

barely five days after respondents received a copy thereof, the
same was not yet final and executory. The law provided for a

19
20

G.R. No. L-68470 October 8, 1985
ALICE REYES VAN DORN, petitioner,
vs.
HON. MANUEL V. ROMILLO, JR., as Presiding Judge of
Branch CX, Regional Trial Court of the National Capital
Region Pasay City and RICHARD UPTON respondents.
MELENCIO-HERRERA, J.:\
In this Petition for certiorari and Prohibition, petitioner Alice Reyes
Van Dorn seeks to set aside the Orders, dated September 15,
1983 and August 3, 1984, in Civil Case No. 1075-P, issued by
respondent Judge, which denied her Motion to Dismiss said case,
and her Motion for Reconsideration of the Dismissal Order,
respectively.
The basic background facts are that petitioner is a citizen of the
Philippines while private respondent is a citizen of the United
States; that they were married in Hongkong in 1972; that, after
the marriage, they established their residence in the Philippines;
that they begot two children born on April 4, 1973 and December
18, 1975, respectively; that the parties were divorced in Nevada,
United States, in 1982; and that petitioner has re-married also in
Nevada, this time to Theodore Van Dorn.
Dated June 8, 1983, private respondent filed suit against
petitioner in Civil Case No. 1075-P of the Regional Trial Court,
Branch CXV, in Pasay City, stating that petitioner's business in
Ermita, Manila, (the Galleon Shop, for short), is conjugal property
of the parties, and asking that petitioner be ordered to render an
accounting of that business, and that private respondent be
declared with right to manage the conjugal property. Petitioner
moved to dismiss the case on the ground that the cause of action
is barred by previous judgment in the divorce proceedings before
the Nevada Court wherein respondent had acknowledged that he
and petitioner had "no community property" as of June 11, 1982.
The Court below denied the Motion to Dismiss in the mentioned
case on the ground that the property involved is located in the
Philippines so that the Divorce Decree has no bearing in the case.
The denial is now the subject of this certiorari proceeding.
Generally, the denial of a Motion to Dismiss in a civil case is
interlocutory and is not subject to appeal. certiorari and
Prohibition are neither the remedies to question the propriety of
an interlocutory order of the trial Court. However, when a grave
abuse of discretion was patently committed, or the lower Court
acted capriciously and whimsically, then it devolves upon this
Court in a certiorari proceeding to exercise its supervisory
authority and to correct the error committed which, in such a case,
is equivalent to lack of jurisdiction. 1 Prohibition would then lie
since it would be useless and a waste of time to go ahead with the
proceedings. 2 Weconsider the petition filed in this case within the
exception, and we have given it due course.
For resolution is the effect of the foreign divorce on the parties
and their alleged conjugal property in the Philippines.
Petitioner contends that respondent is estopped from laying claim
on the alleged conjugal property because of the representation
he made in the divorce proceedings before the American Court
that they had no community of property; that the Galleon Shop
was not established through conjugal funds, and that
respondent's claim is barred by prior judgment.
For his part, respondent avers that the Divorce Decree issued by
the Nevada Court cannot prevail over the prohibitive laws of the
Philippines and its declared national policy; that the acts and
declaration of a foreign Court cannot, especially if the same is
contrary to public policy, divest Philippine Courts of jurisdiction to
entertain matters within its jurisdiction.
For the resolution of this case, it is not necessary to determine
whether the property relations between petitioner and private
respondent, after their marriage, were upon absolute or relative
community property, upon complete separation of property, or
upon any other regime. The pivotal fact in this case is the
Nevada divorce of the parties.
The Nevada District Court, which decreed the divorce, had
obtained jurisdiction over petitioner who appeared in person
before the Court during the trial of the case. It also obtained
jurisdiction over private respondent who, giving his address as No.
381 Bush Street, San Francisco, California, authorized his
attorneys in the divorce case, Karp & Gradt Ltd., to agree to the
divorce on the ground of incompatibility in the understanding that
there were neither community property nor community
obligations. 3 As explicitly stated in the Power of Attorney he
executed in favor of the law firm of KARP & GRAD LTD., 336 W.
Liberty, Reno, Nevada, to represent him in the divorce
proceedings:
xxx xxx xxx
You are hereby authorized to accept service of Summons, to file
an Answer, appear on my behalf and do an things necessary and
21
proper to represent me, without further contesting, subject to the SO ORDERED.
following:
Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., De la
1. That my spouse seeks a divorce on the ground of Fuente and Patajo, JJ., concur.
incompatibility.

2. That there is no community of property to be adjudicated by

the Court.

3. 'I'hat there are no community obligations to be adjudicated by

the court.

xxx xxx xxx 4

There can be no question as to the validity of that Nevada divorce

in any of the States of the United States. The decree is binding on
private respondent as an American citizen. For instance, private
respondent cannot sue petitioner, as her husband, in any State of
the Union. What he is contending in this case is that the divorce is
not valid and binding in this jurisdiction, the same being contrary
to local law and public policy.

It is true that owing to the nationality principle embodied in

Article 15 of the Civil Code, 5 only Philippine nationals are covered
by the policy against absolute divorces the same being considered
contrary to our concept of public police and morality. However,
aliens may obtain divorces abroad, which may be recognized in
the Philippines, provided they are valid according to their national
law. 6 In this case, the divorce in Nevada released private
respondent from the marriage from the standards of American
law, under which divorce dissolves the marriage. As stated by
the Federal Supreme Court of the United States in Atherton vs.
Atherton, 45 L. Ed. 794, 799:

The purpose and effect of a decree of divorce from the bond of

matrimony by a court of competent jurisdiction are to change the
existing status or domestic relation of husband and wife, and to
free them both from the bond. The marriage tie when thus
severed as to one party, ceases to bind either. A husband without
a wife, or a wife without a husband, is unknown to the law. When
the law provides, in the nature of a penalty. that the guilty party
shall not marry again, that party, as well as the other, is still
absolutely freed from the bond of the former marriage.

Thus, pursuant to his national law, private respondent is no

longer the husband of petitioner. He would have no standing to
sue in the case below as petitioner's husband entitled to exercise
control over conjugal assets. As he is bound by the Decision of his
own country's Court, which validly exercised jurisdiction over him,
and whose decision he does not repudiate, he is estopped by his
own representation before said Court from asserting his right over
the alleged conjugal property.

To maintain, as private respondent does, that, under our laws,

petitioner has to be considered still married to private respondent
and still subject to a wife's obligations under Article 109, et. seq.
of the Civil Code cannot be just. Petitioner should not be obliged
to live together with, observe respect and fidelity, and render
support to private respondent. The latter should not continue to
be one of her heirs with possible rights to conjugal property. She
should not be discriminated against in her own country if the ends
of justice are to be served.

WHEREFORE, the Petition is granted, and respondent Judge is

hereby ordered to dismiss the Complaint filed in Civil Case No.
1075-P of his Court.

Without costs.

22
23

G.R. No. 80116 June 30, 1989
IMELDA MANALAYSAY PILAPIL, petitioner,
vs.
HON. CORONA IBAY-SOMERA, in her capacity as
Presiding Judge of the Regional Trial Court of Manila,
Branch XXVI; HON. LUIS C. VICTOR, in his capacity as the
City Fiscal of Manila; and ERICH EKKEHARD
GEILING, respondents.
REGALADO, J.:
An ill-starred marriage of a Filipina and a foreigner which ended in
a foreign absolute divorce, only to be followed by a criminal
infidelity suit of the latter against the former, provides Us the
opportunity to lay down a decisional rule on what hitherto
appears to be an unresolved jurisdictional question.
On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a
Filipino citizen, and private respondent Erich Ekkehard Geiling, a
German national, were married before the Registrar of Births,
Marriages and Deaths at Friedensweiler in the Federal Republic of
Germany. The marriage started auspiciously enough, and the
couple lived together for some time in Malate, Manila where their
only child, Isabella Pilapil Geiling, was born on April 20, 1980. 1
Thereafter, marital discord set in, with mutual recriminations
between the spouses, followed by a separation de facto between
them.
After about three and a half years of marriage, such connubial
disharmony eventuated in private respondent initiating a divorce
proceeding against petitioner in Germany before the Schoneberg
Local Court in January, 1983. He claimed that there was failure of
their marriage and that they had been living apart since April,
1982. 2
Petitioner, on the other hand, filed an action for legal separation,
support and separation of property before the Regional Trial
Court of Manila, Branch XXXII, on January 23, 1983 where the
same is still pending as Civil Case No. 83-15866. 3
On January 15, 1986, Division 20 of the Schoneberg Local Court,
Federal Republic of Germany, promulgated a decree of divorce on
the ground of failure of marriage of the spouses. The custody of
the child was granted to petitioner. The records show that under
German law said court was locally and internationally competent
for the divorce proceeding and that the dissolution of said
marriage was legally founded on and authorized by the applicable
law of that foreign jurisdiction. 4
On June 27, 1986, or more than five months after the issuance of
the divorce decree, private respondent filed two complaints for
adultery before the City Fiscal of Manila alleging that, while still
married to said respondent, petitioner "had an affair with a
certain William Chia as early as 1982 and with yet another man
named Jesus Chua sometime in 1983". Assistant Fiscal Jacinto A.
de los Reyes, Jr., after the corresponding investigation,
recommended the dismissal of the cases on the ground of
insufficiency of evidence. 5 However, upon review, the
respondent city fiscal approved a resolution, dated January 8,
1986, directing the filing of two complaints for adultery against
the petitioner. 6 The complaints were accordingly filed and were
eventually raffled to two branches of the Regional Trial Court of
Manila. The case entitled "People of the Philippines vs. Imelda
Pilapil and William Chia", docketed as Criminal Case No. 87-52435,
was assigned to Branch XXVI presided by the respondent judge;
while the other case, "People of the Philippines vs. Imelda Pilapil
and James Chua", docketed as Criminal Case No. 87-52434 went
to the sala of Judge Leonardo Cruz, Branch XXV, of the same
court. 7
On March 14, 1987, petitioner filed a petition with the Secretary
of Justice asking that the aforesaid resolution of respondent fiscal
be set aside and the cases against her be dismissed. 8 A similar
petition was filed by James Chua, her co-accused in Criminal Case
No. 87-52434. The Secretary of Justice, through the Chief State
Prosecutor, gave due course to both petitions and directed the
respondent city fiscal to inform the Department of Justice "if the
accused have already been arraigned and if not yet arraigned, to
move to defer further proceedings" and to elevate the entire
records of both cases to his office for review. 9
Petitioner thereafter filed a motion in both criminal cases to defer
her arraignment and to suspend further proceedings
thereon. 10 As a consequence, Judge Leonardo Cruz suspended
proceedings in Criminal Case No. 87-52434. On the other hand,
respondent judge merely reset the date of the arraignment in
Criminal Case No. 87-52435 to April 6, 1987. Before such
scheduled date, petitioner moved for the cancellation of the
arraignment and for the suspension of proceedings in said
Criminal Case No. 87-52435 until after the resolution of the
petition for review then pending before the Secretary of
Justice. 11 A motion to quash was also filed in the same case on
the ground of lack of jurisdiction, 12 which motion was denied by
the respondent judge in an order dated September 8, 1987. The
same order also directed the arraignment of both accused therein,
that is, petitioner and William Chia. The latter entered a plea of
not guilty while the petitioner refused to be arraigned. Such
refusal of the petitioner being considered by respondent judge as
direct contempt, she and her counsel were fined and the former
was ordered detained until she submitted herself for
arraignment. 13 Later, private respondent entered a plea of not
guilty. 14
On October 27, 1987, petitioner filed this special civil action
for certiorari and prohibition, with a prayer for a temporary
restraining order, seeking the annulment of the order of the lower
court denying her motion to quash. The petition is anchored on
the main ground that the court is without jurisdiction "to try and
decide the charge of adultery, which is a private offense that
cannot be prosecuted de officio (sic), since the purported
complainant, a foreigner, does not qualify as an offended spouse
having obtained a final divorce decree under his national law prior
to his filing the criminal complaint." 15
On October 21, 1987, this Court issued a temporary restraining
order enjoining the respondents from implementing the aforesaid
order of September 8, 1987 and from further proceeding with
Criminal Case No. 87-52435. Subsequently, on March 23, 1988
Secretary of Justice Sedfrey A. Ordoñez acted on the aforesaid
petitions for review and, upholding petitioner's ratiocinations,
issued a resolution directing the respondent city fiscal to move for
the dismissal of the complaints against the petitioner. 16
We find this petition meritorious. The writs prayed for shall
accordingly issue.
Under Article 344 of the Revised Penal Code, 17 the crime of
adultery, as well as four other crimes against chastity, cannot be
prosecuted except upon a sworn written complaint filed by
the offended spouse. It has long since been established, with
24
unwavering consistency, that compliance with this rule is a
jurisdictional, and not merely a formal, requirement. 18 While in
point of strict law the jurisdiction of the court over the offense is
vested in it by the Judiciary Law, the requirement for a sworn
written complaint is just as jurisdictional a mandate since it is that
complaint which starts the prosecutory proceeding 19 and without
which the court cannot exercise its jurisdiction to try the case.
Now, the law specifically provides that in prosecutions for
adultery and concubinage the person who can legally file the
complaint should be the offended spouse, and nobody else.
Unlike the offenses of seduction, abduction, rape and acts of
lasciviousness, no provision is made for the prosecution of the
crimes of adultery and concubinage by the parents, grandparents
or guardian of the offended party. The so-called exclusive and
successive rule in the prosecution of the first four offenses above
mentioned do not apply to adultery and concubinage. It is
significant that while the State, as parens patriae, was added and
vested by the 1985 Rules of Criminal Procedure with the power to
initiate the criminal action for a deceased or incapacitated victim
in the aforesaid offenses of seduction, abduction, rape and acts of
lasciviousness, in default of her parents, grandparents or
guardian, such amendment did not include the crimes of adultery
and concubinage. In other words, only the offended spouse, and
no other, is authorized by law to initiate the action therefor.
Corollary to such exclusive grant of power to the offended spouse
to institute the action, it necessarily follows that such initiator
must have the status, capacity or legal representation to do so at
the time of the filing of the criminal action. This is a familiar and
express rule in civil actions; in fact, lack of legal capacity to sue,
as a ground for a motion to dismiss in civil cases, is determined as
of the filing of the complaint or petition.
The absence of an equivalent explicit rule in the prosecution of
criminal cases does not mean that the same requirement and
rationale would not apply. Understandably, it may not have been
found necessary since criminal actions are generally and
fundamentally commenced by the State, through the People of
the Philippines, the offended party being merely the complaining
witness therein. However, in the so-called "private crimes" or
those which cannot be prosecuted de oficio, and the present
prosecution for adultery is of such genre, the offended spouse
assumes a more predominant role since the right to commence
the action, or to refrain therefrom, is a matter exclusively within
his power and option.
This policy was adopted out of consideration for the aggrieved
party who might prefer to suffer the outrage in silence rather than
go through the scandal of a public trial. 20 Hence, as cogently
argued by petitioner, Article 344 of the Revised Penal Code thus
presupposes that the marital relationship is still subsisting at the
time of the institution of the criminal action for, adultery. This is a
logical consequence since the raison d'etre of said provision of
law would be absent where the supposed offended party had
ceased to be the spouse of the alleged offender at the time of the
filing of the criminal case. 21
In these cases, therefore, it is indispensable that the status and
capacity of the complainant to commence the action be definitely
established and, as already demonstrated, such status or capacity
must indubitably exist as of the time he initiates the action. It
would be absurd if his capacity to bring the action would be
determined by his status beforeor subsequent to the
commencement thereof, where such capacity or status existed
prior to but ceased before, or was acquired subsequent to but did
not exist at the time of, the institution of the case. We would
thereby have the anomalous spectacle of a party bringing suit at
the very time when he is without the legal capacity to do so.
To repeat, there does not appear to be any local precedential
jurisprudence on the specific issue as to when precisely the status
of a complainant as an offended spouse must exist where a
criminal prosecution can be commenced only by one who in law
can be categorized as possessed of such status. Stated differently
and with reference to the present case, the inquiry ;would be
whether it is necessary in the commencement of a criminal action
for adultery that the marital bonds between the complainant and
the accused be unsevered and existing at the time of the
institution of the action by the former against the latter.
American jurisprudence, on cases involving statutes in that
jurisdiction which are in pari materia with ours, yields the rule
that after a divorce has been decreed, the innocent spouse no
longer has the right to institute proceedings against the
offenders where the statute provides that the innocent spouse
shall have the exclusive right to institute a prosecution for
adultery. Where, however, proceedings have been properly
commenced, a divorce subsequently granted can have no legal
effect on the prosecution of the criminal proceedings to a
conclusion. 22
In the cited Loftus case, the Supreme Court of Iowa held that —
'No prosecution for adultery can be commenced except on the
complaint of the husband or wife.' Section 4932, Code. Though
Loftus was husband of defendant when the offense is said to have
been committed, he had ceased to be such when the prosecution
was begun; and appellant insists that his status was not such as
to entitle him to make the complaint. We have repeatedly said
that the offense is against the unoffending spouse, as well as the
state, in explaining the reason for this provision in the statute;
and we are of the opinion that the unoffending spouse must be
such when the prosecution is commenced. (Emphasis supplied.)
We see no reason why the same doctrinal rule should not apply in
this case and in our jurisdiction, considering our statutory law and
jural policy on the matter. We are convinced that in cases of such
nature, the status of the complainant vis-a-vis the accused must
be determined as of the time the complaint was filed. Thus, the
person who initiates the adultery case must be an offended
spouse, and by this is meant that he is still married to the accused
spouse, at the time of the filing of the complaint.
In the present case, the fact that private respondent obtained a
valid divorce in his country, the Federal Republic of Germany, is
admitted. Said divorce and its legal effects may be recognized in
the Philippines insofar as private respondent is concerned 23 in
view of the nationality principle in our civil law on the matter of
status of persons.
Thus, in the recent case of Van Dorn vs. Romillo, Jr., et
al., 24 after a divorce was granted by a United States court
between Alice Van Dornja Filipina, and her American husband,
the latter filed a civil case in a trial court here alleging that her
business concern was conjugal property and praying that she be
ordered to render an accounting and that the plaintiff be granted
the right to manage the business. Rejecting his pretensions, this
Court perspicuously demonstrated the error of such stance, thus:
There can be no question as to the validity of that Nevada divorce
in any of the States of the United States. The decree is binding on
private respondent as an American citizen. For instance, private
respondent cannot sue petitioner, as her husband, in any State of
the Union. ...
It is true that owing to the nationality principle embodied in
Article 15 of the Civil Code, only Philippine nationals are covered
by the policy against absolute divorces the same being considered
contrary to our concept of public policy and morality. However,
25
aliens may obtain divorces abroad, which may be recognized in
the Philippines, provided they are valid according to their national
law. ...

Thus, pursuant to his national law, private respondent is no

longer the husband of petitioner. He would have no standing to
sue in the case below as petitioner's husband entitled to exercise
control over conjugal assets. ... 25

Under the same considerations and rationale, private respondent,

being no longer the husband of petitioner, had no legal standing
to commence the adultery case under the imposture that he was
the offended spouse at the time he filed suit.

The allegation of private respondent that he could not have

brought this case before the decree of divorce for lack of
knowledge, even if true, is of no legal significance or consequence
in this case. When said respondent initiated the divorce
proceeding, he obviously knew that there would no longer be a
family nor marriage vows to protect once a dissolution of the
marriage is decreed. Neither would there be a danger of
introducing spurious heirs into the family, which is said to be one
of the reasons for the particular formulation of our law on
adultery, 26 since there would thenceforth be no spousal
relationship to speak of. The severance of the marital bond had
the effect of dissociating the former spouses from each other,
hence the actuations of one would not affect or cast obloquy on
the other.

The aforecited case of United States vs. Mata cannot be

successfully relied upon by private respondent. In applying Article
433 of the old Penal Code, substantially the same as Article 333 of
the Revised Penal Code, which punished adultery "although the
marriage be afterwards declared void", the Court merely stated
that "the lawmakers intended to declare adulterous the infidelity
of a married woman to her marital vows, even though it should be
made to appear that she is entitled to have her marriage contract
declared null and void, until and unless she actually secures a
formal judicial declaration to that effect". Definitely, it cannot be
logically inferred therefrom that the complaint can still be filed
after the declaration of nullity because such declaration that the
marriage is void ab initio is equivalent to stating that it never
existed. There being no marriage from the beginning, any
complaint for adultery filed after said declaration of nullity would
no longer have a leg to stand on. Moreover, what was
consequently contemplated and within the purview of the
decision in said case is the situation where the criminal action for
adultery was filed beforethe termination of the marriage by a
judicial declaration of its nullity ab initio. The same rule and
requisite would necessarily apply where the termination of the
marriage was effected, as in this case, by a valid foreign divorce.

Private respondent's invocation of Donio-Teves, et al. vs.

Vamenta, hereinbefore cited, 27 must suffer the same fate of
inapplicability. A cursory reading of said case reveals that the
offended spouse therein had duly and seasonably filed a
complaint for adultery, although an issue was raised as to its
sufficiency but which was resolved in favor of the complainant.
Said case did not involve a factual situation akin to the one at bar
or any issue determinative of the controversy herein.

WHEREFORE, the questioned order denying petitioner's motion to

quash is SET ASIDE and another one entered DISMISSING the
complaint in Criminal Case No. 87-52435 for lack of jurisdiction.
The temporary restraining order issued in this case on October 21,
1987 is hereby made permanent.

SO ORDERED.

Melencio-Herrera, Padilla and Sarmiento, JJ., concur.

26
G.R. No. 124862 December 22, 1998

FE D. QUITA, petitioner,
vs.
COURT OF APPEALS and BLANDINA
DANDAN, * respondents.

BELLOSILLO, J.:

FE D. QUITA and Arturo T. Padlan, both Filipinos, were married in

the Philippines on 18 May 1941. They were not however blessed
with children. Somewhere along the way their relationship soured.
Eventually Fe sued Arturo for divorce in San Francisco, California,
U.S.A. She submitted in the divorce proceedings a private writing
dated 19 July 1950 evidencing their agreement to live separately
from each other and a settlement of their conjugal properties. On
23 July 1954 she obtained a final judgment of divorce. Three (3)
weeks thereafter she married a certain Felix Tupaz in the same
locality but their relationship also ended in a divorce. Still in the
U.S.A., she married for the third time, to a certain Wernimont.

On 16 April 1972 Arturo died. He left no will. On 31 August 1972

Lino Javier Inciong filed a petition with the Regional Trial Court of
Quezon City for issuance of letters of administration concerning
the estate of Arturo in favor of the Philippine Trust Company.
Respondent Blandina Dandan (also referred to as Blandina
Padlan), claiming to be the surviving spouse of Arturo Padlan, and
Claro, Alexis, Ricardo, Emmanuel, Zenaida and Yolanda, all
surnamed Padlan, named in the children of Arturo Padlan
opposed the petition and prayed for the appointment instead of
Atty. Leonardo Casaba, which was resolved in favor of the latter.
27
Upon motion of the oppositors themselves, Atty. Cabasal was
later replaced by Higino Castillon. On 30 April 1973 the oppositors
(Blandina and Padlan children) submitted certified photocopies of
the 19 July 1950 private writing and the final judgment of divorce
between petitioner and Arturo. Later Ruperto T. Padlan, claiming
to be the sole surviving brother of the deceased Arturo,
intervened.
On 7 October 1987 petitioner moved for the immediate
declaration of heirs of the decedent and the distribution of his
estate. At the scheduled hearing on 23 October 1987, private
respondent as well as the six (6) Padlan children and Ruperto
failed to appear despite due notice. On the same day, the trial
court required the submission of the records of birth of the Padlan
children within ten (10) days from receipt thereof, after which,
with or without the documents, the issue on the declaration of
heirs would be considered submitted for resolution. The
prescribed period lapsed without the required documents being
submitted.
The trial court invoking Tenchavez v. Escaño 1 which held that
"a foreign divorce between Filipino citizens sought and
decreed after the effectivity of the present Civil Code
(Rep. Act 386) was not entitled to recognition as valid in
this jurisdiction," 2 disregarded the divorce between
petitioner and Arturo. Consecuently, it expressed the
view that their marriage subsisted until the death of
Arturo in 1972. Neither did it consider valid their
extrajudicial settlement of conjugal properties due to
lack of judicial approval. 3On the other hand, it opined
that there was no showing that marriage existed
between private respondent and Arturo, much less was it
shown that the alleged Padlan children had been
acknowledged by the deceased as his children with her.
As regards Ruperto, it found that he was a brother of
Arturo. On 27 November 1987 4 only petitioner and
Ruperto were declared the intestate heirs of Arturo.
Accordingly, equal adjudication of the net hereditary
estate was ordered in favor of the two intestate heirs. 5
On motion for reconsideration, Blandina and the Padlan
children were allowed to present proofs that the
recognition of the children by the deceased as his
legitimate children, except Alexis who was recognized as
his illegitimate child, had been made in their respective
records of birth. Thus on 15 February 1988 6 partial
reconsideration was granted declaring the Padlan
children, with the exception of Alexis, entitled to one-half
of the estate to the exclusion of Ruperto Padlan, and
petitioner to the other half. 7 Private respondent was not
declared an heir. Although it was stated in the
aforementioned records of birth that she and Arturo were
married on 22 April 1947, their marriage was clearly void
since it was celebrated during the existence of his
previous marriage to petitioner.
In their appeal to the Court of Appeals, Blandina and her
children assigned as one of the errors allegedly
committed by the trial court the circumstance that the
case was decided without a hearing, in violation of Sec. 1,
Rule 90, of the Rules of Court, which provides that if
there is a controversy before the court as to who are the
lawful heirs of the deceased person or as to the
distributive shares to which each person is entitled under
the law, the controversy shall be heard and decided as in
ordinary cases.
Respondent appellate court found this ground alone
sufficient to sustain the appeal; hence, on 11 September
1995 it declared null and void the 27 November 1987
decision and 15 February 1988 order of the trial court,
and directed the remand of the case to the trial court for
further proceedings. 8 On 18 April 1996 it denied
reconsideration. 9
Should this case be remanded to the lower court for
further proceedings? Petitioner insists that there is no
need because, first, no legal or factual issue obtains for
resolution either as to the heirship of the Padlan children
or as to the decedent; and, second, the issue as to who
between petitioner and private respondent is the proper
hier of the decedent is one of law which can be resolved
in the present petition based on establish facts and
admissions of the parties.
We cannot sustain petitioner. The provision relied upon
by respondent court is clear: If there is
a controversy before the court as to who are the lawful
heirs of the deceased person or as to the distributive
shares to which each person is entitled under the law, the
controversy shall be heard and decided as in ordinary
cases.
We agree with petitioner that no dispute exists either as
to the right of the six (6) Padlan children to inherit from
the decedent because there are proofs that they have
been duly acknowledged by him and petitioner herself
even recognizes them as heirs of Arturo Padlan; 10 nor as
to their respective hereditary shares. But controversy
remains as to who is the legitimate surviving spouse of
Arturo. The trial court, after the parties other than
petitioner failed to appear during the scheduled hearing
on 23 October 1987 of the motion for immediate
declaration of heirs and distribution of estate, simply
issued an order requiring the submission of the records of
birth of the Padlan children within ten (10) days from
receipt thereof, after which, with or without the
documents, the issue on declaration of heirs would be
deemed submitted for resolution.
We note that in her comment to petitioner's motion
private respondent raised, among others, the issue as to
whether petitioner was still entitled to inherit from the
decedent considering that she had secured a divorce in
the U.S.A. and in fact had twice remarried. She also
invoked the above quoted procedural rule. 11 To this,
petitioner replied that Arturo was a Filipino and as such
remained legally married to her in spite of the divorce
they obtained. 12 Reading between the lines, the
implication is that petitioner was no longer a Filipino
citizen at the time of her divorce from Arturo. This should
have prompted the trial court to conduct a hearing to
establish her citizenship. The purpose of a hearing is to
ascertain the truth of the matters in issue with the aid of
documentary and testimonial evidence as well as the
arguments of the parties either supporting or opposing
the evidence. Instead, the lower court perfunctorily
settled her claim in her favor by merely applying the
ruling in Tenchavez v. Escaño.
Then in private respondent's motion to set aside and/or
reconsider the lower court's decision she stressed that
the citizenship of petitioner was relevant in the light of
the ruling in Van Dorn v. Romillo Jr. 13 that aliens may
obtain divorces abroad, which may be recognized in the
Philippines, provided they are valid according to their
national law. She prayed therefore that the case be set
for hearing. 14 Petitioner opposed the motion but failed
to squarely address the issue on her citizenship. 15 The
trial court did not grant private respondent's prayer for a
hearing but proceeded to resolve her motion with the
finding that both petitioner and Arturo were "Filipino
28
citizens and were married in the Philippines." 16 It
maintained that their divorce obtained in 1954 in San
Francisco, California, U.S.A., was not valid in Philippine
jurisdiction. We deduce that the finding on their
citizenship pertained solely to the time of their marriage
as the trial court was not supplied with a basis to
determine petitioner's citizenship at the time of their
divorce. The doubt persisted as to whether she was still a
Filipino citizen when their divorce was decreed. The trial
court must have overlooked the materiality of this aspect.
Once proved that she was no longer a Filipino citizen at
the time of their divorce, Van Dorn would become
applicable and petitioner could very well lose her right to
inherit from Arturo.
Ricardo, Emmanuel, Zenaida and Yolanda, with the
exception of Alexis, all surnamed Padlan, instead of
Arturo's brother Ruperto Padlan, is likewise AFFIRMED.
The Court however emphasizes that the reception of
evidence by the trial court should he limited to the
hereditary rights of petitioner as the surviving spouse of
Arturo Padlan.
The motion to declare petitioner and her counsel in
contempt of court and to dismiss the present petition for
forum shopping is DENIED.
SO ORDERED.

Puno, Mendoza and Martinez, JJ., concur.

Respondent again raised in her appeal the issue on
petitioner's citizenship; 17 it did not merit enlightenment
however from petitioner. 18 In the present proceeding,
petitioner's citizenship is brought anew to the fore by
private respondent. She even furnishes the Court with
the transcript of stenographic notes taken on 5 May 1995
during the hearing for the reconstitution of the original of
a certain transfer certificate title as well as the issuance
of new owner's duplicate copy thereof before another
trial court. When asked whether she was an American
citizen petitioner answered that she was since
1954. 19 Significantly, the decree of divorce of petitioner
and Arturo was obtained in the same year. Petitioner
however did not bother to file a reply memorandum to
erase the uncertainty about her citizenship at the time of
their divorce, a factual issue requiring hearings to be
conducted by the trial court. Consequently, respondent
appellate court did not err in ordering the case returned
to the trial court for further proceedings.

We emphasize however that the question to be

determined by the trial court should be limited only to
the right of petitioner to inherit from Arturo as his
surviving spouse. Private respondent's claim to heirship
was already resolved by the trial court. She and Arturo
were married on 22 April 1947 while the prior marriage
of petitioner and Arturo was subsisting thereby resulting
in a bigamous marriage considered void from the
beginning under Arts. 80 and 83 of the Civil Code.
Consequently, she is not a surviving spouse that can
inherit from him as this status presupposes a legitimate
relationship. 20

As regards the motion of private respondent for

petitioner and a her counsel to be declared in contempt
of court and that the present petition be dismissed for
forum shopping, 21 the same lacks merit. For forum
shopping to exist the actions must involve the same
transactions and same essential facts and circumstances.
There must also be identical causes of action, subject
matter and issue. 22 The present petition deals with
declaration of heirship while the subsequent petitions
filed before the three (3) trial courts concern the
issuance of new owner's duplicate copies of titles of
certain properties belonging to the estate of Arturo.
Obviously, there is no reason to declare the existence of
forum shopping.

WHEREFORE, the petition is DENIED. The decision of

respondent Court of Appeals ordering the remand of the
case to the court of origin for further proceedings and
declaring null and void its decision holding petitioner Fe
D. Quita and Ruperto T. Padlan as intestate heirs is
AFFIRMED. The order of the appellate court modifying its
previous decision by granting one-half (1/2) of the net
hereditary estate to the Padlan children, namely, Claro,
29

G.R. No. L-22595 November 1, 1927
Testate Estate of Joseph G. Brimo, JUAN MICIANO,
administrator, petitioner-appellee,
vs.
ANDRE BRIMO, opponent-appellant.
Ross, Lawrence and Selph for appellant.
Camus and Delgado for appellee.
ROMUALDEZ, J.:
The partition of the estate left by the deceased Joseph G. Brimo is
in question in this case.
The judicial administrator of this estate filed a scheme of partition.
Andre Brimo, one of the brothers of the deceased, opposed it.
The court, however, approved it.
The errors which the oppositor-appellant assigns are:
(1) The approval of said scheme of partition; (2) denial of his
participation in the inheritance; (3) the denial of the motion for
reconsideration of the order approving the partition; (4) the
approval of the purchase made by the Pietro Lana of the
deceased's business and the deed of transfer of said business;
and (5) the declaration that the Turkish laws are impertinent to
this cause, and the failure not to postpone the approval of the
scheme of partition and the delivery of the deceased's business to
Pietro Lanza until the receipt of the depositions requested in
reference to the Turkish laws.
The appellant's opposition is based on the fact that the partition
in question puts into effect the provisions of Joseph G. Brimo's will
which are not in accordance with the laws of his Turkish
nationality, for which reason they are void as being in violation or
article 10 of the Civil Code which, among other things, provides
the following:
Nevertheless, legal and testamentary successions, in respect to
the order of succession as well as to the amount of the
successional rights and the intrinsic validity of their provisions,
shall be regulated by the national law of the person whose
succession is in question, whatever may be the nature of the
property or the country in which it may be situated.
But the fact is that the oppositor did not prove that said
testimentary dispositions are not in accordance with the Turkish
laws, inasmuch as he did not present any evidence showing what
the Turkish laws are on the matter, and in the absence of
evidence on such laws, they are presumed to be the same as
those of the Philippines. (Lim and Lim vs. Collector of Customs,
36 Phil., 472.)
It has not been proved in these proceedings what the Turkish
laws are. He, himself, acknowledges it when he desires to be
given an opportunity to present evidence on this point; so much
so that he assigns as an error of the court in not having deferred
the approval of the scheme of partition until the receipt of certain
testimony requested regarding the Turkish laws on the matter.
The refusal to give the oppositor another opportunity to prove
such laws does not constitute an error. It is discretionary with the
trial court, and, taking into consideration that the oppositor was
granted ample opportunity to introduce competent evidence, we
find no abuse of discretion on the part of the court in this
particular. There is, therefore, no evidence in the record that the
national law of the testator Joseph G. Brimo was violated in the
testamentary dispositions in question which, not being contrary to
our laws in force, must be complied with and
executed. lawphil.net
Therefore, the approval of the scheme of partition in this respect
was not erroneous.
In regard to the first assignment of error which deals with the
exclusion of the herein appellant as a legatee, inasmuch as he is
one of the persons designated as such in will, it must be taken
into consideration that such exclusion is based on the last part of
the second clause of the will, which says:
Second. I like desire to state that although by law, I am a Turkish
citizen, this citizenship having been conferred upon me by
conquest and not by free choice, nor by nationality and, on the
other hand, having resided for a considerable length of time in
the Philippine Islands where I succeeded in acquiring all of the
property that I now possess, it is my wish that the distribution of
my property and everything in connection with this, my will, be
made and disposed of in accordance with the laws in force in the
Philippine islands, requesting all of my relatives to respect this
wish, otherwise, I annul and cancel beforehand whatever
disposition found in this will favorable to the person or persons
who fail to comply with this request.
The institution of legatees in this will is conditional, and the
condition is that the instituted legatees must respect the
testator's will to distribute his property, not in accordance with
the laws of his nationality, but in accordance with the laws of the
Philippines.
If this condition as it is expressed were legal and valid, any
legatee who fails to comply with it, as the herein oppositor who,
by his attitude in these proceedings has not respected the will of
the testator, as expressed, is prevented from receiving his legacy.
The fact is, however, that the said condition is void, being
contrary to law, for article 792 of the civil Code provides the
following:
Impossible conditions and those contrary to law or good morals
shall be considered as not imposed and shall not prejudice the
heir or legatee in any manner whatsoever, even should the
testator otherwise provide.
And said condition is contrary to law because it expressly ignores
the testator's national law when, according to article 10 of the
civil Code above quoted, such national law of the testator is the
one to govern his testamentary dispositions.
30
Said condition then, in the light of the legal provisions above cited,
is considered unwritten, and the institution of legatees in said will
is unconditional and consequently valid and effective even as to
the herein oppositor.
It results from all this that the second clause of the will regarding
the law which shall govern it, and to the condition imposed upon
the legatees, is null and void, being contrary to law.
All of the remaining clauses of said will with all their dispositions
and requests are perfectly valid and effective it not appearing that
said clauses are contrary to the testator's national law.
Therefore, the orders appealed from are modified and it is
directed that the distribution of this estate be made in such a
manner as to include the herein appellant Andre Brimo as one of
the legatees, and the scheme of partition submitted by the
judicial administrator is approved in all other respects, without
any pronouncement as to costs.
So ordered.
Street, Malcolm, Avanceña, Villamor and Ostrand, JJ., concur.
G.R. No. L-23678 June 6, 1967
TESTATE ESTATE OF AMOS G. BELLIS, deceased.
PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA
BELLIS, oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.
Vicente R. Macasaet and Jose D. Villena for oppositors appellants.
Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A.
Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.
BENGZON, J.P., J.:
This is a direct appeal to Us, upon a question purely of law, from
an order of the Court of First Instance of Manila dated April 30,
1964, approving the project of partition filed by the executor in
Civil Case No. 37089 therein.1äwphï1.ñët
The facts of the case are as follows:
Amos G. Bellis, born in Texas, was "a citizen of the State of Texas
and of the United States." By his first wife, Mary E. Mallen, whom
he divorced, he had five legitimate children: Edward A. Bellis,
George Bellis (who pre-deceased him in infancy), Henry A. Bellis,
Alexander Bellis and Anna Bellis Allsman; by his second wife,
Violet Kennedy, who survived him, he had three legitimate
children: Edwin G. Bellis, Walter S. Bellis and Dorothy Bellis; and
finally, he had three illegitimate children: Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis.
On August 5, 1952, Amos G. Bellis executed a will in the
Philippines, in which he directed that after all taxes, obligations,
and expenses of administration are paid for, his distributable
estate should be divided, in trust, in the following order and
manner: (a) $240,000.00 to his first wife, Mary E. Mallen; (b)
P120,000.00 to his three illegitimate children, Amos Bellis, Jr.,
Maria Cristina Bellis, Miriam Palma Bellis, or P40,000.00 each and
(c) after the foregoing two items have been satisfied, the
remainder shall go to his seven surviving children by his first and
second wives, namely: Edward A. Bellis, Henry A. Bellis,
Alexander Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter S.
Bellis, and Dorothy E. Bellis, in equal shares.1äwphï1.ñët
Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of
San Antonio, Texas, U.S.A. His will was admitted to probate in the
Court of First Instance of Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of the will,
paid all the bequests therein including the amount of $240,000.00
in the form of shares of stock to Mary E. Mallen and to the three
(3) illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and
Miriam Palma Bellis, various amounts totalling P40,000.00 each in
satisfaction of their respective legacies, or a total of P120,000.00,
which it released from time to time according as the lower court
approved and allowed the various motions or petitions filed by the
latter three requesting partial advances on account of their
respective legacies.
On January 8, 1964, preparatory to closing its administration, the
executor submitted and filed its "Executor's Final Account, Report
of Administration and Project of Partition" wherein it
reported, inter alia, the satisfaction of the legacy of Mary E.
Mallen by the delivery to her of shares of stock amounting to
$240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina
Bellis and Miriam Palma Bellis in the amount of P40,000.00 each
or a total of P120,000.00. In the project of partition, the executor
— pursuant to the "Twelfth" clause of the testator's Last Will and
Testament — divided the residuary estate into seven equal
portions for the benefit of the testator's seven legitimate children
by his first and second marriages.
On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis
filed their respective oppositions to the project of partition on the
ground that they were deprived of their legitimes as illegitimate
children and, therefore, compulsory heirs of the deceased.
Amos Bellis, Jr. interposed no opposition despite notice to him,
proof of service of which is evidenced by the registry receipt
submitted on April 27, 1964 by the executor.1
After the parties filed their respective memoranda and other
pertinent pleadings, the lower court, on April 30, 1964, issued an
order overruling the oppositions and approving the executor's
final account, report and administration and project of partition.
Relying upon Art. 16 of the Civil Code, it applied the national law
of the decedent, which in this case is Texas law, which did not
provide for legitimes.
Their respective motions for reconsideration having been denied
by the lower court on June 11, 1964, oppositors-appellants
appealed to this Court to raise the issue of which law must apply
— Texas law or Philippine law.
In this regard, the parties do not submit the case on, nor even
discuss, the doctrine of renvoi, applied by this Court in Aznar v.
Christensen Garcia, L-16749, January 31, 1963. Said doctrine is
usually pertinent where the decedent is a national of one country,
and a domicile of another. In the present case, it is not disputed
that the decedent was both a national of Texas and a domicile
thereof at the time of his death.2 So that even assuming Texas
has a conflict of law rule providing that the domiciliary system
(law of the domicile) should govern, the same would not result in
a reference back (renvoi) to Philippine law, but would still refer to
Texas law. Nonetheless, if Texas has a conflicts rule adopting the
situs theory (lex rei sitae) calling for the application of the law of
the place where the properties are situated, renvoi would arise,
31
since the properties here involved are found in the Philippines. In
the absence, however, of proof as to the conflict of law rule of
Texas, it should not be presumed different from ours.3 Appellants'
position is therefore not rested on the doctrine of renvoi. As
stated, they never invoked nor even mentioned it in their
arguments. Rather, they argue that their case falls under the
circumstances mentioned in the third paragraph of Article 17 in
relation to Article 16 of the Civil Code.
Article 16, par. 2, and Art. 1039 of the Civil Code, render
applicable the national law of the decedent, in intestate or
testamentary successions, with regard to four items: (a) the order
of succession; (b) the amount of successional rights; (e) the
intrinsic validity of the provisions of the will; and (d) the capacity
to succeed. They provide that —
ART. 16. Real property as well as personal property is subject to
the law of the country where it is situated.
Article 10 — now Article 16 — of the Civil Code states said
national law should govern.
The parties admit that the decedent, Amos G. Bellis, was a citizen
of the State of Texas, U.S.A., and that under the laws of Texas,
there are no forced heirs or legitimes. Accordingly, since the
intrinsic validity of the provision of the will and the amount of
successional rights are to be determined under Texas law, the
Philippine law on legitimes cannot be applied to the testacy of
Amos G. Bellis.
Wherefore, the order of the probate court is hereby affirmed in
toto, with costs against appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal,
Zaldivar, Sanchez and Castro, JJ., concur.

However, intestate and testamentary successions, both with

respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may he the
nature of the property and regardless of the country wherein said
property may be found.

ART. 1039. Capacity to succeed is governed by the law of the

nation of the decedent.

Appellants would however counter that Art. 17, paragraph three,

of the Civil Code, stating that —

Prohibitive laws concerning persons, their acts or property, and

those which have for their object public order, public policy and
good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions
agreed upon in a foreign country.

prevails as the exception to Art. 16, par. 2 of the Civil Code

afore-quoted. This is not correct. Precisely, Congress deleted the
phrase, "notwithstanding the provisions of this and the next
preceding article" when they incorporated Art. 11 of the old Civil
Code as Art. 17 of the new Civil Code, while reproducing without
substantial change the second paragraph of Art. 10 of the old Civil
Code as Art. 16 in the new. It must have been their purpose to
make the second paragraph of Art. 16 a specific provision in itself
which must be applied in testate and intestate succession. As
further indication of this legislative intent, Congress added a new
provision, under Art. 1039, which decrees that capacity to
succeed is to be governed by the national law of the decedent.

It is therefore evident that whatever public policy or good

customs may be involved in our System of legitimes, Congress
has not intended to extend the same to the succession of foreign
nationals. For it has specifically chosen to leave, inter alia,
the amount of successional rights, to the decedent's national law.
Specific provisions must prevail over general ones.

Appellants would also point out that the decedent executed two
wills — one to govern his Texas estate and the other his Philippine
estate — arguing from this that he intended Philippine law to
govern his Philippine estate. Assuming that such was the
decedent's intention in executing a separate Philippine will, it
would not alter the law, for as this Court ruled in Miciano v. Brimo,
50 Phil. 867, 870, a provision in a foreigner's will to the effect that
his properties shall be distributed in accordance with Philippine
law and not with his national law, is illegal and void, for his
national law cannot be ignored in regard to those matters that

32
G.R. No. L-16749 January 31, 1963

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E.

CHRISTENSEN, DECEASED.
ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN,
Heir of the deceased, Executor and Heir-appellees,
vs.
HELEN CHRISTENSEN GARCIA, oppositor-appellant.

M. R. Sotelo for executor and heir-appellees.

Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.

LABRADOR, J.:

This is an appeal from a decision of the Court of First Instance of

Davao, Hon. Vicente N. Cusi, Jr., presiding, in Special Proceeding
No. 622 of said court, dated September 14, 1949, approving
among things the final accounts of the executor, directing the
executor to reimburse Maria Lucy Christensen the amount of
P3,600 paid by her to Helen Christensen Garcia as her legacy, and
declaring Maria Lucy Christensen entitled to the residue of the
property to be enjoyed during her lifetime, and in case of death
without issue, one-half of said residue to be payable to Mrs.
Carrie Louise C. Borton, etc., in accordance with the provisions of
the will of the testator Edward E. Christensen. The will was
executed in Manila on March 5, 1951 and contains the following
provisions:

3. I declare ... that I have but ONE (1) child, named MARIA LUCY
CHRISTENSEN (now Mrs. Bernard Daney), who was born in the
Philippines about twenty-eight years ago, and who is now
residing at No. 665 Rodger Young Village, Los Angeles, California,
U.S.A.

4. I further declare that I now have no living ascendants, and no

descendants except my above named daughter, MARIA LUCY
CHRISTENSEN DANEY.

xxx xxx xxx

7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN,

now married to Eduardo Garcia, about eighteen years of age and
who, notwithstanding the fact that she was baptized Christensen,
is not in any way related to me, nor has she been at any time
adopted by me, and who, from all information I have now resides
in Egpit, Digos, Davao, Philippines, the sum of THREE THOUSAND
SIX HUNDRED PESOS (P3,600.00), Philippine Currency the same
to be deposited in trust for the said Maria Helen Christensen with
the Davao Branch of the Philippine National Bank, and paid to her
at the rate of One Hundred Pesos (P100.00), Philippine Currency
per month until the principal thereof as well as any interest which
may have accrued thereon, is exhausted..

xxx xxx xxx

12. I hereby give, devise and bequeath, unto my well-beloved

daughter, the said MARIA LUCY CHRISTENSEN DANEY (Mrs.
Bernard Daney), now residing as aforesaid at No. 665 Rodger
Young Village, Los Angeles, California, U.S.A., all the income from
the rest, remainder, and residue of my property and estate, real,
personal and/or mixed, of whatsoever kind or character, and
wheresoever situated, of which I may be possessed at my death
and which may have come to me from any source whatsoever,
during her lifetime: ....

It is in accordance with the above-quoted provisions that the

executor in his final account and project of partition ratified the
payment of only P3,600 to Helen Christensen Garcia and

33
proposed that the residue of the estate be transferred to his
daughter, Maria Lucy Christensen.
Opposition to the approval of the project of partition was filed by
Helen Christensen Garcia, insofar as it deprives her (Helen) of her
legitime as an acknowledged natural child, she having been
declared by Us in G.R. Nos. L-11483-84 an acknowledged natural
child of the deceased Edward E. Christensen. The legal grounds
of opposition are (a) that the distribution should be governed by
the laws of the Philippines, and (b) that said order of distribution
is contrary thereto insofar as it denies to Helen Christensen, one
of two acknowledged natural children, one-half of the estate in
full ownership. In amplification of the above grounds it was
alleged that the law that should govern the estate of the
deceased Christensen should not be the internal law of California
alone, but the entire law thereof because several foreign
elements are involved, that the forum is the Philippines and even
if the case were decided in California, Section 946 of the California
Civil Code, which requires that the domicile of the decedent
should apply, should be applicable. It was also alleged that Maria
Helen Christensen having been declared an acknowledged natural
child of the decedent, she is deemed for all purposes legitimate
from the time of her birth.
The court below ruled that as Edward E. Christensen was a citizen
of the United States and of the State of California at the time of
his death, the successional rights and intrinsic validity of the
provisions in his will are to be governed by the law of California, in
accordance with which a testator has the right to dispose of his
property in the way he desires, because the right of absolute
dominion over his property is sacred and inviolable (In re
McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re
Kaufman, 117 Cal. 286, 49 Pac. 192, cited in page 179, Record on
Appeal). Oppositor Maria Helen Christensen, through counsel,
filed various motions for reconsideration, but these were denied.
Hence, this appeal.
The most important assignments of error are as follows:
I
THE LOWER COURT ERRED IN IGNORING THE
DECISION OF THE HONORABLE SUPREME
COURT THAT HELEN IS THE ACKNOWLEDGED
NATURAL CHILD OF EDWARD E.
CHRISTENSEN AND, CONSEQUENTLY, IN
DEPRIVING HER OF HER JUST SHARE IN THE
INHERITANCE.
II
THE LOWER COURT ERRED IN ENTIRELY
IGNORING AND/OR FAILING TO RECOGNIZE
THE EXISTENCE OF SEVERAL FACTORS,
ELEMENTS AND CIRCUMSTANCES CALLING
FOR THE APPLICATION OF INTERNAL LAW.
III
THE LOWER COURT ERRED IN FAILING TO
RECOGNIZE THAT UNDER INTERNATIONAL
LAW, PARTICULARLY UNDER THE RENVOI
DOCTRINE, THE INTRINSIC VALIDITY OF THE
TESTAMENTARY DISPOSITION OF THE
DISTRIBUTION OF THE ESTATE OF THE
DECEASED EDWARD E. CHRISTENSEN
SHOULD BE GOVERNED BY THE LAWS OF THE
PHILIPPINES.
IV
THE LOWER COURT ERRED IN NOT
DECLARING THAT THE SCHEDULE OF
DISTRIBUTION SUBMITTED BY THE
EXECUTOR IS CONTRARY TO THE PHILIPPINE
LAWS.
V
THE LOWER COURT ERRED IN NOT
DECLARING THAT UNDER THE PHILIPPINE
LAWS HELEN CHRISTENSEN GARCIA IS
ENTITLED TO ONE-HALF (1/2) OF THE ESTATE
IN FULL OWNERSHIP.
There is no question that Edward E. Christensen was a citizen of
the United States and of the State of California at the time of his
death. But there is also no question that at the time of his death
he was domiciled in the Philippines, as witness the following facts
admitted by the executor himself in appellee's brief:
In the proceedings for admission of the will to probate, the facts
of record show that the deceased Edward E. Christensen was
born on November 29, 1875 in New York City, N.Y., U.S.A.; his
first arrival in the Philippines, as an appointed school teacher, was
on July 1, 1901, on board the U.S. Army Transport "Sheridan"
with Port of Embarkation as the City of San Francisco, in the State
of California, U.S.A. He stayed in the Philippines until 1904.
In December, 1904, Mr. Christensen returned to the United States
and stayed there for the following nine years until 1913, during
which time he resided in, and was teaching school in Sacramento,
California.
Mr. Christensen's next arrival in the Philippines was in July of the
year 1913. However, in 1928, he again departed the Philippines
for the United States and came back here the following year,
1929. Some nine years later, in 1938, he again returned to his
own country, and came back to the Philippines the following year,
1939.
Wherefore, the parties respectfully pray that the foregoing
stipulation of facts be admitted and approved by this Honorable
Court, without prejudice to the parties adducing other evidence to
prove their case not covered by this stipulation of
facts. 1äwphï1.ñët
Being an American citizen, Mr. Christensen was interned by the
Japanese Military Forces in the Philippines during World War II.
Upon liberation, in April 1945, he left for the United States but
returned to the Philippines in December, 1945. Appellees
Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as Exhibits "AA",
"BB" and "CC-Daney"; Exhs. "MM", "MM-l", "MM-2-Daney" and p.
473, t.s.n., July 21, 1953.)
In April, 1951, Edward E. Christensen returned once more to
California shortly after the making of his last will and testament
(now in question herein) which he executed at his lawyers' offices
in Manila on March 5, 1951. He died at the St. Luke's Hospital in
the City of Manila on April 30, 1953. (pp. 2-3)
In arriving at the conclusion that the domicile of the deceased is
the Philippines, we are persuaded by the fact that he was born in
New York, migrated to California and resided there for nine years,
and since he came to the Philippines in 1913 he returned to
California very rarely and only for short visits (perhaps to
relatives), and considering that he appears never to have owned
or acquired a home or properties in that state, which would
indicate that he would ultimately abandon the Philippines and
make home in the State of California.
34
Sec. 16. Residence is a term used with many shades of meaning
from mere temporary presence to the most permanent abode.
Generally, however, it is used to denote something more than
mere physical presence. (Goodrich on Conflict of Laws, p. 29)
As to his citizenship, however, We find that the citizenship that he
acquired in California when he resided in Sacramento, California
from 1904 to 1913, was never lost by his stay in the Philippines,
for the latter was a territory of the United States (not a state) until
1946 and the deceased appears to have considered himself as a
citizen of California by the fact that when he executed his will in
1951 he declared that he was a citizen of that State; so that he
appears never to have intended to abandon his California
citizenship by acquiring another. This conclusion is in accordance
with the following principle expounded by Goodrich in his Conflict
of Laws.
The terms "'residence" and "domicile" might well be taken to
mean the same thing, a place of permanent abode. But domicile,
as has been shown, has acquired a technical meaning. Thus one
may be domiciled in a place where he has never been. And he
may reside in a place where he has no domicile. The man with
two homes, between which he divides his time, certainly resides
in each one, while living in it. But if he went on business which
would require his presence for several weeks or months, he might
properly be said to have sufficient connection with the place to be
called a resident. It is clear, however, that, if he treated his
settlement as continuing only for the particular business in hand,
not giving up his former "home," he could not be a domiciled New
Yorker. Acquisition of a domicile of choice requires the exercise of
intention as well as physical presence. "Residence simply requires
bodily presence of an inhabitant in a given place, while domicile
requires bodily presence in that place and also an intention to
make it one's domicile." Residence, however, is a term used with
many shades of meaning, from the merest temporary presence to
the most permanent abode, and it is not safe to insist that any
one use et the only proper one. (Goodrich, p. 29)
The law that governs the validity of his testamentary dispositions
is defined in Article 16 of the Civil Code of the Philippines, which is
as follows:
ART. 16. Real property as well as personal property is subject to
the law of the country where it is situated.
However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may be the
nature of the property and regardless of the country where said
property may be found.
The application of this article in the case at bar requires the
determination of the meaning of the term "national law"is used
therein.
There is no single American law governing the validity of
testamentary provisions in the United States, each state of the
Union having its own private law applicable to its citizens only and
in force only within the state. The "national law" indicated in
Article 16 of the Civil Code above quoted can not, therefore,
possibly mean or apply to any general American law. So it can
refer to no other than the private law of the State of California.
The next question is: What is the law in California governing the
disposition of personal property? The decision of the court below,
sustains the contention of the executor-appellee that under the
California Probate Code, a testator may dispose of his property by
will in the form and manner he desires, citing the case of Estate of
McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But appellant
invokes the provisions of Article 946 of the Civil Code of California,
which is as follows:
If there is no law to the contrary, in the place where personal
property is situated, it is deemed to follow the person of its owner,
and is governed by the law of his domicile.
The existence of this provision is alleged in appellant's opposition
and is not denied. We have checked it in the California Civil Code
and it is there. Appellee, on the other hand, relies on the case
cited in the decision and testified to by a witness. (Only the case
of Kaufman is correctly cited.) It is argued on executor's behalf
that as the deceased Christensen was a citizen of the State of
California, the internal law thereof, which is that given in the
abovecited case, should govern the determination of the validity
of the testamentary provisions of Christensen's will, such law
being in force in the State of California of which Christensen was a
citizen. Appellant, on the other hand, insists that Article 946
should be applicable, and in accordance therewith and following
the doctrine of the renvoi, the question of the validity of the
testamentary provision in question should be referred back to the
law of the decedent's domicile, which is the Philippines.
The theory of doctrine of renvoi has been defined by various
authors, thus:
The problem has been stated in this way: "When the Conflict of
Laws rule of the forum refers a jural matter to a foreign law for
decision, is the reference to the purely internal rules of law of the
foreign system; i.e., to the totality of the foreign law minus its
Conflict of Laws rules?"
On logic, the solution is not an easy one. The Michigan court
chose to accept the renvoi, that is, applied the Conflict of Laws
rule of Illinois which referred the matter back to Michigan law. But
once having determined the the Conflict of Laws principle is the
rule looked to, it is difficult to see why the reference back should
not have been to Michigan Conflict of Laws. This would have
resulted in the "endless chain of references" which has so often
been criticized be legal writers. The opponents of the renvoi
would have looked merely to the internal law of Illinois, thus
rejecting the renvoi or the reference back. Yet there seems no
compelling logical reason why the original reference should be the
internal law rather than to the Conflict of Laws rule. It is true that
such a solution avoids going on a merry-go-round, but those who
have accepted the renvoi theory avoid this inextricabilis
circulas by getting off at the second reference and at that point
applying internal law. Perhaps the opponents of the renvoi are a
bit more consistent for they look always to internal law as the rule
of reference.
Strangely enough, both the advocates for and the objectors to
the renvoi plead that greater uniformity will result from adoption
of their respective views. And still more strange is the fact that
the only way to achieve uniformity in this choice-of-law problem is
if in the dispute the two states whose laws form the legal basis of
the litigation disagree as to whether the renvoi should be
accepted. If both reject, or both accept the doctrine, the result of
the litigation will vary with the choice of the forum. In the case
stated above, had the Michigan court rejected the renvoi,
judgment would have been against the woman; if the suit had
been brought in the Illinois courts, and they too rejected
the renvoi, judgment would be for the woman. The same result
would happen, though the courts would switch with respect to
which would hold liability, if both courts accepted the renvoi.
The Restatement accepts the renvoi theory in two instances:
where the title to land is in question, and where the validity of a
decree of divorce is challenged. In these cases the Conflict of
35
Laws rule of the situs of the land, or the domicile of the parties in
the divorce case, is applied by the forum, but any further
reference goes only to the internal law. Thus, a person's title to
land, recognized by the situs, will be recognized by every court;
and every divorce, valid by the domicile of the parties, will be
valid everywhere. (Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.)
X, a citizen of Massachusetts, dies intestate, domiciled in France,
leaving movable property in Massachusetts, England, and France.
The question arises as to how this property is to be distributed
among X's next of kin.
Assume (1) that this question arises in a Massachusetts court.
There the rule of the conflict of laws as to intestate succession to
movables calls for an application of the law of the deceased's last
domicile. Since by hypothesis X's last domicile was France, the
natural thing for the Massachusetts court to do would be to turn
to French statute of distributions, or whatever corresponds
thereto in French law, and decree a distribution accordingly. An
examination of French law, however, would show that if a French
court were called upon to determine how this property should be
distributed, it would refer the distribution to the national law of
the deceased, thus applying the Massachusetts statute of
distributions. So on the surface of things the Massachusetts court
has open to it alternative course of action: (a) either to apply the
French law is to intestate succession, or (b) to resolve itself into a
French court and apply the Massachusetts statute of distributions,
on the assumption that this is what a French court would do. If it
accepts the so-called renvoidoctrine, it will follow the latter
course, thus applying its own law.
This is one type of renvoi. A jural matter is presented which the
conflict-of-laws rule of the forum refers to a foreign law, the
conflict-of-laws rule of which, in turn, refers the matter back
again to the law of the forum. This is renvoi in the narrower sense.
The German term for this judicial process is 'Ruckverweisung.'"
(Harvard Law Review, Vol. 31, pp. 523-571.)
After a decision has been arrived at that a foreign law is to be
resorted to as governing a particular case, the further question
may arise: Are the rules as to the conflict of laws contained in
such foreign law also to be resorted to? This is a question which,
while it has been considered by the courts in but a few instances,
has been the subject of frequent discussion by textwriters and
essayists; and the doctrine involved has been descriptively
designated by them as the "Renvoyer" to send back, or the
"Ruchversweisung", or the "Weiterverweisung", since an
affirmative answer to the question postulated and the operation
of the adoption of the foreign law in toto would in many cases
result in returning the main controversy to be decided according
to the law of the forum. ... (16 C.J.S. 872.)
Another theory, known as the "doctrine of renvoi", has been
advanced. The theory of the doctrine of renvoi is that the court of
the forum, in determining the question before it, must take into
account the whole law of the other jurisdiction, but also its rules
as to conflict of laws, and then apply the law to the actual
question which the rules of the other jurisdiction prescribe. This
may be the law of the forum. The doctrine of the renvoi has
generally been repudiated by the American authorities. (2 Am. Jur.
296)
The scope of the theory of renvoi has also been defined and the
reasons for its application in a country explained by Prof.
Lorenzen in an article in the Yale Law Journal, Vol. 27, 1917-1918,
pp. 529-531. The pertinent parts of the article are quoted herein
below:
The recognition of the renvoi theory implies that the rules of the
conflict of laws are to be understood as incorporating not only the
ordinary or internal law of the foreign state or country, but its
rules of the conflict of laws as well. According to this theory 'the
law of a country' means the whole of its law.
xxx xxx xxx
Von Bar presented his views at the meeting of the Institute of
International Law, at Neuchatel, in 1900, in the form of the
following theses:
(1) Every court shall observe the law of its country as regards the
application of foreign laws.
(2) Provided that no express provision to the contrary exists, the
court shall respect:
(a) The provisions of a foreign law which disclaims the right to
bind its nationals abroad as regards their personal statute, and
desires that said personal statute shall be determined by the law
of the domicile, or even by the law of the place where the act in
question occurred.
(b) The decision of two or more foreign systems of law, provided
it be certain that one of them is necessarily competent, which
agree in attributing the determination of a question to the same
system of law.
xxx xxx xxx
If, for example, the English law directs its judge to distribute the
personal estate of an Englishman who has died domiciled in
Belgium in accordance with the law of his domicile, he must first
inquire whether the law of Belgium would distribute personal
property upon death in accordance with the law of domicile, and if
he finds that the Belgian law would make the distribution in
accordance with the law of nationality — that is the English law —
he must accept this reference back to his own law.
We note that Article 946 of the California Civil Code is its conflict
of laws rule, while the rule applied in In re Kaufman, Supra, its
internal law. If the law on succession and the conflict of laws rules
of California are to be enforced jointly, each in its own intended
and appropriate sphere, the principle cited In re Kaufman should
apply to citizens living in the State, but Article 946 should apply to
such of its citizens as are not domiciled in California but in other
jurisdictions. The rule laid down of resorting to the law of the
domicile in the determination of matters with foreign element
involved is in accord with the general principle of American law
that the domiciliary law should govern in most matters or rights
which follow the person of the owner.
When a man dies leaving personal property in one or more states,
and leaves a will directing the manner of distribution of the
property, the law of the state where he was domiciled at the time
of his death will be looked to in deciding legal questions about the
will, almost as completely as the law of situs is consulted in
questions about the devise of land. It is logical that, since the
domiciliary rules control devolution of the personal estate in case
of intestate succession, the same rules should determine the
validity of an attempted testamentary dispostion of the property.
Here, also, it is not that the domiciliary has effect beyond the
borders of the domiciliary state. The rules of the domicile are
recognized as controlling by the Conflict of Laws rules at the situs
property, and the reason for the recognition as in the case of
intestate succession, is the general convenience of the doctrine.
The New York court has said on the point: 'The general principle
that a dispostiton of a personal property, valid at the domicile of
the owner, is valid anywhere, is one of the universal application.
It had its origin in that international comity which was one of the
first fruits of civilization, and it this age, when business
36
intercourse and the process of accumulating property take but Padilla, Bautista Angelo, Concepcion, Reyes, Barrera, Paredes,
little notice of boundary lines, the practical wisdom and justice of Dizon, Regala and Makalintal, JJ., concur.
the rule is more apparent than ever. (Goodrich, Conflict of Laws, Bengzon, C.J., took no part.
Sec. 164, pp. 442-443.)

Appellees argue that what Article 16 of the Civil Code of the

Philippines pointed out as the national law is the internal law of
California. But as above explained the laws of California have
prescribed two sets of laws for its citizens, one for residents
therein and another for those domiciled in other jurisdictions.
Reason demands that We should enforce the California internal
law prescribed for its citizens residing therein, and enforce the
conflict of laws rules for the citizens domiciled abroad. If we must
enforce the law of California as in comity we are bound to go, as
so declared in Article 16 of our Civil Code, then we must enforce
the law of California in accordance with the express mandate
thereof and as above explained, i.e., apply the internal law for
residents therein, and its conflict-of-laws rule for those domiciled
abroad.

It is argued on appellees' behalf that the clause "if there is no law

to the contrary in the place where the property is situated" in Sec.
946 of the California Civil Code refers to Article 16 of the Civil
Code of the Philippines and that the law to the contrary in the
Philippines is the provision in said Article 16 that the national
law of the deceased should govern. This contention can not be
sustained. As explained in the various authorities cited above the
national law mentioned in Article 16 of our Civil Code is the law on
conflict of laws in the California Civil Code, i.e., Article 946, which
authorizes the reference or return of the question to the law of
the testator's domicile. The conflict of laws rule in California,
Article 946, Civil Code, precisely refers back the case, when a
decedent is not domiciled in California, to the law of his domicile,
the Philippines in the case at bar. The court of the domicile can
not and should not refer the case back to California; such action
would leave the issue incapable of determination because the
case will then be like a football, tossed back and forth between
the two states, between the country of which the decedent was a
citizen and the country of his domicile. The Philippine court must
apply its own law as directed in the conflict of laws rule of the
state of the decedent, if the question has to be decided, especially
as the application of the internal law of California provides no
legitime for children while the Philippine law, Arts. 887(4) and 894,
Civil Code of the Philippines, makes natural children legally
acknowledged forced heirs of the parent recognizing them.

The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera

vs. Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867;
Babcock Templeton vs. Rider Babcock, 52 Phil. 130; and Gibbs vs.
Government, 59 Phil. 293.) cited by appellees to support the
decision can not possibly apply in the case at bar, for two
important reasons, i.e., the subject in each case does not appear
to be a citizen of a state in the United States but with domicile in
the Philippines, and it does not appear in each case that there
exists in the state of which the subject is a citizen, a law similar to
or identical with Art. 946 of the California Civil Code.

We therefore find that as the domicile of the deceased

Christensen, a citizen of California, is the Philippines, the validity
of the provisions of his will depriving his acknowledged natural
child, the appellant, should be governed by the Philippine Law,
the domicile, pursuant to Art. 946 of the Civil Code of California,
not by the internal law of California..

WHEREFORE, the decision appealed from is hereby reversed and

the case returned to the lower court with instructions that the
partition be made as the Philippine law on succession provides.
Judgment reversed, with costs against appellees.

37