G.R. No. L-7817. October 31, 1956 ALFREDO M. VELAYO, in i! c"#"cit$ "! A!!i%nee o& t e in!

o'(ent )OMMER)*AL A*R L*NE+, *N). ,)AL*-, Plaintiff-Appellant, (!. +.ELL )OM/ANY OF 0.E /.*L*//*NE *+LAND+, L0D.,DefendantAppellee, YE1 .2A 0RAD*NG )OR/ORA0*ON, /A2L +Y)*/ "n3 MA4A+A 5 )O., inter(enor!. FEL*6, J.: Antecedents The Commercial Air Lines, Inc., which will be hereinafter referred to as CALI, is a corporation duly organized and existing in accordance with the hilippines laws, with offices in the City of !anila and pre"iously engaged in air transportation business. The #hell Company of the . I., Ltd., which will be designated as the Defendant, is on the other hand, a corporation organized under the laws of $ngland and duly licensed to do business in the hilippines, with principal offices at the %ong&ong and #hanghai 'an& building in the City of !anila. #ince the start of CALI(s operations, its fuel needs were all supplied by the Defendant. !r. )esmond *itzgerald, its Credit !anager who extended credit to CALI, was in charge of the collection thereof. %owe"er, all matters referring to extensions of the term of payment had to be decided first by !r. #tephen Crawford and later by !r. +ildred +ooding, who represented in this country Defendant(s 'oard of )irectors, the residence of which is in London, $ngland ,$xhs. -.' and -.A/. As of August, 01-2, the boo&s of the Defendant showed a balance of 034,056.72 in its fa"or for goods it sold and deli"ered to CALI. $"en before August 5, 01-2, Defendant had reasons to belie"e that the financial condition of the CALI was for from being satisfactory. As a matter of fact, according to !r. *itzgerald, CALI(s )ouglas C.7- plane, then in California, was offered to him by !r. Alfonso #ycip, CALI(s resident of the 'oard of )irectors, in partial settlement of their accounts, which offer was, howe"er, declined by !r. Crawford, probably because upon in8uiries made by !r. *itzgerald sometime before August 5, 01-2, for the purpose of preparing the report for its London office regarding CALI(s indebtedness, Col. Lambert, CALI(s 9ice resident and :eneral !anager, answered that the total outstanding liabilities of his corporation was only 774,444, and the management of Defendant probably assumed that the assets of the CALI could "ery well meet said liabilities and were not included to ta&e charge of the sale of CALI(s said )ouglas C.7- plane to collect its credit. ;n August 5, 01-2, the management of CALI informally con"ened its principal creditors ,excepting only the insignificant small claims/ who were in"ited to a luncheon that was held between 06<chanrobles"irtuallawlibrary44 and 6<chanrobles"irtuallawlibrary44 o(cloc& in the afternoon of that day in the Trade and Commerce 'uilding at 06= >uan Luna #t., !anila, and informed them that CALI was in a state of insol"ency and had to stop operation. The creditors present, or represented at the meeting, were<chanrobles"irtuallawlibrary !r. A. L. 'artolini, representing *irestone Tire ? @ubber Co.A chan robles"irtualawlibrary!r. Buintin Cu, representing Commercial DewsA chan robles"irtualawlibrary!r. !ar& ringle, representing #mith, 'ell ? Co. ,Lloyds of London/A chan robles"irtualawlibrary!essrs. 9icente Liwag, C. )ominguez and acifico Agcaoili, representing Dational Airports CorporationA chan robles"irtualawlibrary!essrs. +. >. 'unnel and !anuel Chan, representing :oodrich International @ubber Co.A chan robles"irtualawlibrary!r. :. $. Adair, representing :oodyear Tire ? @ubber Co.A chan robles"irtualawlibrary!r. >. T. Chuidian, representing :ibbs, :ibbs, Chuidian ? BuashaA chan robles"irtualawlibrary!r. $. 9alera, representing !abasa ? Co.A chan robles"irtualawlibrary!r. ). *itzgerald, representing #hell Co. .I. Ltd.A chan robles"irtualawlibraryand !r. Alfonso E. #ycip, representing himself, Ce& %ua Trading Corporation and aul #ycip ,$xhs. DD, >>>, !!, BBB, II.-, ##, TT, FF, 99, ++, GG, CC, EE, AAA, ''', CCC, ))), $$$, ***, :::, and %%%/. The persons present, including !r. )esmond *itzgerald, signed their names and the names of the companies they represented on a memorandum pad of the law firm Buisumbing, #ycip, and Buisumbing ,$xhs. 99 and 99.0/.

In that meeting at noontime of August 5, 01-2, out of the 01- creditors in all ,$xh. ;;/ 07 were listed as principal creditors ha"ing big balances ,$xh. DD/, to wit<chanrobles"irtuallawlibrary 0=th Air *orce 06,224.44

Ci"il Aeronautics Administration 12,063.44 :ibbs, :iibs, Chuidian ? Buasha 7,7--.14 :oodrich Int(l @ubber Co. =,0-6.-3 :oodyear Tire ? @ubber Co. 0,363.74 !abasa ? Co. -,253.36 !anila Int(l Airport 77,624.4!anila Int(l Air Terminal , AL/ =5,05=.52 #hell Co. of the hil., Ltd. 076,5-0.52 #mith, 'ell ? Co., Ltd. -7,7=-.44 aul #ycip 2,021.== !rs. 'uena"entura 64,444.44 *irestone Tire ? @ubber Co. -,100.36 Alfonso #ycip 737,224.2= Ce& %ua Trading Corp. -23,230.64 0,706,356.23 +hat occurred in that meeting may be summarized as follows<chanrobles"irtuallawlibrary !r. Alexander #ycip, #ecretary of the 'oard of )irectors of the CALI, informed the creditors present that this corporation was insol"ent and had to stop operations. %e explained the memorandum agreement executed by the CALI with the hilippine Air Lines, Inc., on August -, 01-2, regarding the proposed sale to the latter of the a"iation e8uipments of the former ,$xhs. !! and BBB, par. 0 memo of meetingA chan robles"irtualawlibrary$xhs. III and . Agcaoili(s memorandum dated August 3, 01-2, to the :eneral !anager of the Dational Airports Corp./. !r. Alexander #ycip was assisted in the explanation by C A Alfredo 9elayo of +ashington, #ycip ? Company, Auditors of the CALI, who discussed the balance sheets and distributed copies thereof to the creditors present ,$xhs. DD, DD.0 to 3A chan robles"irtualawlibrary$xh. >> . Agcaoili(s copy of balance sheet p. 661. 6=4 t.s.n., Do". 63, 0170, of the testimony of ). *itzgerald/. The said balance sheet made mention of a C.7- plane in the Fnited #tates, the property now in"ol"ed in this suit. %e was li&ewise assisted in his explanation by !r. Curtis L. Lambert, 9ice resident and :eneral !anager of the CALI, who described in greater detail the assets of the CALI. There was a general understanding among all the creditors present on the desirability of consummating the sale in fa"or of the hilippine Air Lines Inc. ,$xhs. !! and BBB, par. 6 !emo of meetingA chan robles"irtualawlibrary$xhs. III and , par. 7 . Agcoaili(s memorandum dated August 3, 01-2, to the :eneral !anager of the Dational Airports Corp.A chan robles"irtualawlibraryand pp. 611.=44 t.s.n., >anuary 07, 0176, of the testimony of )esmond *itzgerald/. Then followed a discussion on the payment of claims of creditors and the preferences claimed for the accounts due to the employees, the :o"ernment and the Dational Airports Corporation. The representati"es of the latter !essrs. 9icente %. Liwag, C. )ominguez and acifico 9. Agcaoili, contended that their accounts were preferred. The other creditors disputed such contention of preference ,$xhs. !! and BBB, par. =

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4070 !emo of meetingAchan robles"irtualawlibrary$xhs. III and , par. = . Agcaoili(s memorandum dated August 0, 01-2, to the :eneral !anager of the Dational Airports Corp.A chan robles"irtualawlibraryand pp. 6-3.6-2 t.s.n., >anuary 04, 0176, of the testimony of ). *itzgerald/. Do understanding was reached on this point and it was then generally agreed that the matter of preference be further studied by a wor&ing committee to be formed ,$xhs. !!, par. = !emo of meeting/. The creditors present agreed to the formation of a wor&ing committee to continue the discussion of the payment of claims and preferences alleged by certain creditors, and it was further agreed that said wor&ing committee would super"ise the preser"ation of the properties of the corporation while the creditors attempted to come to an understanding as to a fair distribution of the assets among them ,$xhs. !! and BBB, !emo of meeting/. *rom the latter exhibit the following is copied<chanrobles"irtuallawlibrary H-. Certain specific matters such as the amount owing to the hilippine Air Lines, Inc., and the claims of #mith, 'ell "s. Co., ,representing Lloyds of London/ that its claim should be offset against the payments which may be due to CALI from insurance claims were not ta&en up in detail. It was agreed that these matters together with the general 8uestion of what are preferred claims should be the subIect of further discussions, but shall not interfere with the consummation of the sale in fa"or of AL. H7. The creditors present agreed to the formation of the wor&ing committee to super"ise the preser"ation of the properties of the corporation and agreed further that !r. *itzgerald shall represent the creditors as a whole in this committee. It was understood, howe"er, that all 8uestions relating to preference of claims can be decided only by the creditors assembled. H5. It was the sense of the persons present that, if possible, the insol"ency court be a"oided but that should the creditors not meet in agreement, then all the profits from the sale will be submitted to an insol"ency court for proper di"ision among the creditors.J To this wor&ing committee, !r. )esmond *itzgerald, Credit !anager, of the Defendant, Atty. Agcaoili of the Dational Airports Corporation and Atty. Alexander #ycip ,$xhs. III and , par. 7 . Agcaoili(s memorandum dated August 3, 01-2, to the :eneral !anager of the Dational Airports ,Corp./ were appointed. After the creditors present &new the balance sheet and heard the explanations of the officers of the CALI, it was their unanimous opinion that it would be ad"antageous not to present suits against this corporation but to stri"e for a fair pro.rata di"ision of its assets ,$xh. !!, par 5, !emo of meeting/, although the management of the CALI announced that in case of non.agreement of the creditors on a pro.rata di"ision of the assets, it would file insol"ency proceedings ,p. 34, t.s.n., ;ctober 66, 0170/. !r. *itzgerald did not decline the nomination to form part of said wor&ing committee and on August 1, 01-2, the = members thereof discussed methods of achie"ing the obIecti"es of the committee as decided at the creditors( meeting, which were to preser"e the assets of the CALI and to study the way of ma&ing a fair di"ision of all the assets among the creditors. Atty. #ycip made an offer to !r. ). *itzgerald to name a representati"e to o"ersee the preser"ation of the assets of the CALI, but !r. *itzgerald replied that the creditors could rely on Col. Lambert. Atty. acifico Agcaoili promised to refer the arguments adduced at the second meeting to the :eneral !anager of the Dational Airports Corporations and to obtain the ad"ice of the Corporate Counsel, so the negotiation with respect to the di"ision of assets of the CALI among the creditors was left pending or under ad"ice when on that "ery day of the meeting of the wor&ing committee, August 1, 01-2, which !r. *itzgerald attended, Defendanteffected a telegraphic transfer of its credit against the CALI to the American corporation #hell ;il Company, Inc., assigning its credit, amounting to K31,--4.44, which was subse8uently followed by a deed of assignment of credit dated August 04, 01-2, the credit amounting this time to the sum of K27,420.61 ,$xh. I/. ;n August 06, 01-2, the American corporation #hell ;il Company, Inc., filed a complaint against the CALI in the #uperior Court of the #tate of California, F.#.A. in and for the County of #an 'ernardino, for the collection of an assigned credit of K31,--4.44 Case Do. 56735 of said Court ,$xhs. A, $, *, :, %, 9, and E/ and a writ of attachment was applied for and issued on the same date against a C.7- plane ,$xhs. ', C, ), C, +, G, and G.0/.

;n #eptember 03, 01-2, an amended complaint was filed to reco"er an assigned credit of K27,420.61 ,$xhs. I, L, L, !, B, @, #, T, F, ))/ and a supplemental attachment for a higher sum was applied for and issued against the C.7- plane, plus miscellaneous personal properties held by acific ;"erseas Air Lines for the CALI ,$xhs. D, ;, , AA, '', ''.0 and CC/ and on >anuary 7, 01-1, a Iudgment by default was entered by the American court ,$xhs. >, $$, **, ::, and %%/. Fnaware of Defendant(s assignments of credit and attachment suit, the stoc&holders of CALI resol"ed in a special meeting of August 06, 01-2, to appro"e the memorandum agreement of sale to the hilippine Air Lines, Inc, and noted Hthat the 'oard had been trying to reach an agreement with the creditors of the corporation to pre"ent insol"ency proceedings, but so far no definite agreement had been reachedJ ,$xh. ;; !inutes of August 06, 01-2, stoc&holders( meeting/. 'y the first wee& of #eptember, 01-2, the Dational Airports Corporation learned of Defendant(s action in the Fnited #tates and hastened to file its own complaint with attachment against the CALI in the Court of *irst Instance of !anila ,$xhs. LLL, LLL, and !!!/. The CALI, also prompted by Defendant(s action in getting the alleged undue preference o"er the other creditors by attaching the C.7- plane in the Fnited #tates, beyond the Iurisdiction of the hilippines, filed on ;ctober 3, 01-2, a petition for "oluntary insol"ency. ;n this date, an order of insol"ency was issued by the court ,$xh. >>/ which necessarily stayed the Dational Airports Corporation(s action against the CALI and dissol"ed its attachment ,$xh. DDD/, thus compelling the Dational Airports Corporation to file its claims with the insol"ency court ,$xh. ##/. 'y order of ;ctober 62, 01-2, the Court confirmed the appointment of !r. Alfredo !. 9elayo, who was unanimously elected by the creditors as Assignee in the proceedings, and ordered him to 8ualify as such by ta&ing the oath of office within 7 days from notice and filing a bond in the sum of =4,444.44 to be appro"ed by the Court conditioned upon the faithful performance of his duties, and pro"iding further that all funds that the Assignee may collect or recei"e from the debtors of the corporation, or from any other source or sources, be deposited in a local ban& ,$xh. LL/. ;n Do"ember =, 01-2, the cler& of court executed a deed of con"eyance in fa"or of the Assignee ,Alfredo !. 9elayo/ o"er all the assets of the CALI ,$xh. LL/. The Case. After properly 8ualifying as Assignee, Alfredo !. 9elayo instituted this case ,Do. 5155 of the Court of *irst Instance of !anila/ on )ecember 03, 01-2, against the #hell Company of . I., Ltd., for the purpose of securing from the Court a writ of inIunction restraining Defendant, its agents, ser"ants, attorneys and solicitors from prosecuting in and for the County of #an 'ernardino in the #uperior Court of the #tate of California, F.#.A. the aforementioned Ci"il Case Do. 56735 against the insol"ent Commercial Air Lines, Inc., begun by it in the name of the American corporation #hell ;il Company, Inc., and as an alternati"e remedy, in case the purported assignment of Defendant(s alleged credit to the American corporation #hell ;il Company, Inc., and the attachment issued against CALI in the said #uperior Court of California shall ha"e the effect of defeating the procurement by Plaintiff as Assignee in insol"ency of the abo"e. mentioned airplane, which is the property of the insol"ent CALI, situated in the ;ntario International Airport, with in the County of #an 'ernardino, #tate of California, F.#.A., that Iudgment for damages in double the "alue of the airplane be awarded in fa"or of Plaintiff against Defendant, with costs. The complaint further prays that upon the filing of a bond executed to the Defendant in an amount to be fixed by the Court, to the effect that Plaintiff will pay to Defendant all damages the latter may sustain by reason of the inIunction if the Court should finally decide that thePlaintiff was not entitled thereto, the Court issued a writ of preliminary inIunction enIoining the Defendant, its agent, ser"ants, attorney(s and solicitor, from prosecuting the aforementioned case Do. 56735, the same writ of preliminary inIunction to issue without notice to the Defendant it appearing by "erified complaint that the great irreparable inIury will result to the Plaintiff.Appellant before the matter could be on notice. The Plaintiff also prays for such other remedies that the Court may deem proper in the premises. ;n )ecember 64, 01-2, the Defendant filed an opposition to the Plaintiff(s petition for the issuance of a writ of the preliminary inIunction, and on )ecember 66, 01-2, the Court denied the same because whether the con"eyance of Defendant(s credit was fraudulent or not, the hilippine court would not be in position to Page82

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enforce its orders as against the American corporation #hell ;il Company, Inc., which is outside of the Iurisdiction of the hilippines. Plaintiff ha"ing failed to restrain the progress of the attachment suit in the Fnited #tates by denial of his application for a writ of preliminary inIunction and the conse8uences on execution of the C.7- plane in the County of #an 'ernardino, #tate of California, F. #. A., he confines his action to the reco"ery of damages against the Defendant. ;n )ecember 62, 01-2, Defendant filed its answer to the complaint, which was amended on *ebruary =, 01-1. In its answer, Defendant, besides denying certain a"erments of the complaint alleged, among other reasons, that the assignment of its credit in fa"or of the #hell ;il Company, Inc., in the Fnited #tates was for a "aluable consideration and made in accordance with the established commercial practices, there being no law prohibiting a creditor from assigning his credit to anotherA chan robles"irtualawlibrarythat it had no interest whatsoe"er in Ci"il Case Do. 56735 instituted in the #uperior Court in the #tate of California by the #hell ;il Company, Inc., which is a separate and distinct corporation organized and existing in the #tate of 9irginia and doing business in the #tate of California, F. #. A., the Defendant ha"ing as its stoc&holders the #hell etroleum Company of London and other persons residing in that City, while the #hell ;il Company Inc., of the Fnited #tate has its principal stoc&holders the #hell Fnion ;il Company of the F.#. and presumably countless American in"estors inasmuch as its shares of stoc& are being traded daily in the Dew Cor& stoc& mar&etA chan robles"irtualawlibrarythat !r. *itzgerald,Defendant(s Credit !anager, was merely in"ited to a luncheon.meeting at the Trade and Commerce 'uilding in the City of !anila on August 5, 01-2, without &nowing the purpose for which it was calledA chan robles"irtualawlibraryand that !r. *itzgerald could not ha"e officially represented theDefendant at that time because such authority resides on !r. #tephen Crawfurd. Defendant, therefore, prays that the complaint be dismissed with costs against the Plaintiff. Then Alfonso #ycip, Ce& %ua Trading Corporation and aul #ycip, as well as !abasa ? Co., filed, with permission of the Court, their respecti"e complaints in inter"ention ta&ing the side of the Plaintiff. These complaints in inter"ention were timely answered by Defendantwhich prayed that they be dismissed. After proper proceedings and hearing, the Court rendered decision on *ebruary 65, 017-, dismissing the complaint as well as the complaints in inter"ention, with costs against thePlaintiff. In "iew of this outcome, Plaintiff comes to us praying that the Iudgment of the lower court be re"ersed and that the Defendant be ordered to pay him damages in the sum of 554,444 ,being double the "alue of the airplane as established by e"idence, i.e., ==4,444/, with costs, and for such other remedy as the Court may deem Iust and e8uitable in the premises. The Issues. $ither admission of the parties, or by preponderance of e"idence, or by sheer weight of the circumstance attending the transactions herein in"ol"ed, +e find that the facts narrated in the preceding statement of the HantecedentsJ ha"e been sufficiently established, and the 8uestions at issue submitted to our determination in this instance may be boiled down to the following propositions<chanrobles"irtuallawlibrary ,0/ +hether or not under the facts of the case, the Defendant #hell Company of the . I., Ltd., ta&ing ad"antage of its &nowledge of the existence of CALI(s airplane C.7- at the ;ntario International Airport within the Country of #an 'ernardino, #tate of California, F. #. A., ,+hich &nowledge it ac8uired<chanrobles"irtuallawlibrary first at the informal luncheon.meeting of the principal creditors of CALI on August 7, 01-2, where its Credit !anager, !r. )esmond *itzgerald, was selected to form part of the +or&ing Committee to super"ise the preser"ation of CALI(s properties and to study the way of ma&ing a fair di"ision of all the assets among the creditors and thus a"oid the institution of insol"ency proceedings in courtA chan robles"irtualawlibraryand #ubse8uently, at the meeting of August 1, 01-2, when said !r. *itzgerald met the other members of the said +or&ing Committee and heard and discussed the contention of certain creditors of CALI on the accounts

due the employees, the :o"ernment and the Dational Airports Corporation who alleged that their claims were preferred/, acted in bad faith and betrayed the confidence and trust of the other creditors of CALI present in said meeting by affecting a hasty telegraphic transfer of its credit to the American corporation #hell ;il Company, Inc., for the sum of K31,--4 which was subse8uently followed by a deed of assignment of credit dated August 04, 01-2, amounting this time to the sum of K27,420.62 ,$xhs. E/, thus defeating the purpose of the informal meetings of CALI(s principal creditors end depri"ing the Plaintiff, as its Assignee, of the means of obtaining said C.7- plane, or the "alue thereof, to the detriment and preIudice of the other CALI(s creditors who were conse8uently depri"ed of their share in the distribution of said "alueA chan robles"irtualawlibraryand ,6/ +hether or not by reason of said betrayal of confidence and trust, Defendant may be made under the law to answer for the damages prayed by the PlaintiffA chan robles"irtualawlibraryand if so, what should be the amount of such damages. )I#CF##I;D ;* T%$ C;DT@;9$@#C I. The mere enunciation of the first proposition can lead to no other conclusion than that Defendant, upon learning the precarious economic situation of CALI and that with all probability, it could not get much of its outstanding credit because of the preferred claims of certain other creditors, forgot that H!an does not li"e by bread aloneJ and entirely disregarded all moral inhibitory tenets. #o, on the "ery day its Credit !anager attended the meeting of the +or&ing Committee on August 1, 01-2, it hastily made a telegraphic assignment of its credit against the CALI to its sister American Corporation, the #hell ;il Company, Inc., and by what is stated in the preceding pages hereof, +e &now that were the damaging effects of said assignment upon the right of other creditors of the CALI to participate in the proceeds of said CALI(s plane C.7-. Defendants endea"or to extricate itself from any liability caused by such e"ident misdeed of its part, alleging that !r. *itzgerald had no authority from his principal to commit the latter on any agreementA chan robles"irtualawlibrarythat the assignment of its credit in fa"or of its sister corporation, #hell ;il Company, Inc., was for a "aluable consideration and in accordance with the established commercial practicesA chan robles"irtualawlibrarythat there is no law prohibiting a creditor from assigning his credit to anotherA chan robles"irtualawlibraryand that the #hell ;il Company Inc., of the Fnited #tates is a corporation different and independent from the Defendant. 'ut all these defenses are entirely immaterial and ha"e no bearing on the main 8uestion at issue in this appeal. !oreo"er, we might say that Defendant could not ha"e accomplished the transfer of its credit to its sister corporation if all the #hell companies throughout the world would not ha"e a sort of union, relation or understanding among themsel"es to come to the aid of each other. The telegraphic transfer made without &nowledge and at the bac& of the other creditors of CALI may be a shrewd and surprise mo"e that enabled Defendant to collect almost all if not the entire amount of its credit, but the Court of >ustice cannot countenance such attitude at all, and much less from a foreign corporation to the detriment of our :o"ernment and local business. To Iustify its actions, Defendant may also claim that !r. *itzgerald, based on his feeling of distrust and apprehension, entertained the con"iction that inter"enors Alfonso #ycip and Ce& %ua Trading Corporation tried to ta&e undue ad"antage by infiltrating their credits. 'ut e"en assuming for the sa&e of argument, that these inter"enors really resorted to such strategem or fraudulent de"ice, yet Defendant(s act finds not Iustification for no misdeed on the part of a person is cured by any misdeed of another, and it is to be noted that neither Alfonso E. #ycip, nor Ce& %ua Trading Corporation were the only creditors of CALI, nor e"en preferred ones, and that the infiltration of one(s credit is of no se8uence if it cannot be pro"en in the insol"ency proceedings to the satisfaction of the court. Fnder the circumstances of the case, Defendant(s transfer of its aforementioned credit would ha"e been Iustified only if !r. *itzgerald had declined to ta&e part in the +or&ing Committee and fran&ly and honestly informed the other creditors present that he had no authority to bind his principal and that the latter was to be left free to collect its credit from CALI by whate"er means his principal deemed wise and were a"ailable to it. 'ut then such information would ha"e immediately dissol"ed all attempts to come to an amicable conciliation among the creditors and would ha"e precipitated

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the filing in court of CALI(s "oluntary insol"ency proceedings and nulified the intended transfer of Defendant(s credit to its abo"e.mentioned sister corporation. II. +e may agree with the trial Iudge, that the assignment of Defendant(s credit for a "aluable consideration is not "iolati"e of the pro"isions of sections =6 and 34 of the Insol"ency Law , ublic Act Do. 0175/, because the assignment was made since August 1, 01-2, the original complaint in the Fnited #tates was filed on August 06, 01-2, and the writ of attachment issued on this same date, while CALI filed its petition for insol"ency on ;ctober 3, 01-2. At his %onor correctly states, said #ections =6 and 34 only contemplate acts and transactions occuring within =4 days prior to the commencement of the proceedings in insol"ency and, conse8uently, all other acts outside of the =4.day period cannot possibly be considered as coming within the orbit of the operation. In addition to this, +e may add that Article 34 of the Insol"ency Law refers to acts of the debtor ,in this case the insol"ent CALI/ and not of the creditor, the #hell Company of the . I. Ltd. 'ut section 34 does not constitute the only pro"isions of the law pertinent to the matter. The Insol"ency Law also pro"ides the following<chanrobles"irtuallawlibrary H#$C. ==. The assignee shall ha"e the right to reco"er all the estate, debt and effects of said insol"ent. If at the time of the commencement of the proceedings in insol"ency, an action is pending in the name of the debtor, for the reco"ery of a debt or other thing might or ought to pass to the assignee by the assignment, the assignee shall be allowed to prosecute the action, in li&e manner and with life effect as if it had been originally commenced by him. If there are any rights of action in fa"or of the insol"ency for damages, on any account, for which an action is not pending the assignee shall ha"e the right to prosecute the same with effect as the insol"ent might ha"e done himself if no proceedings in insol"ency had been instituted cralaw .J It must not be forgotten that in accordance with the spirit of the Insol"ency Law and with the pro"isions of Chapter 9 thereof which deal with the powers and duties of a recei"er, the assignee represents the insol"ent as well as the creditors in "oluntary and in"oluntary proceedings Intestate of !ariano :. 9eloso, etc. "s. 9da. de 9eloso #. C. :. @. Do. -6-7-Achan robles"irtualawlibrary%unter, Lerr ? Co. "s. #amuel !urray, -2 hil. --1A chan robles"irtualawlibraryChartered 'an& "s. Imperial, -2 hil. 1=0A chan robles"irtualawlibraryAsia 'an&ing Corporation "s. %erridge, -7 hil. 763 ,II Tolentino(s Commercial Laws of the hilippines, 5==/. #ee also #ection =5 of the Insol"ency Law.*rom the foregoing, +e see that Plaintiff, as Assignee of the Insol"ent CALI, had personality and authority to institute this case for damages, and the only 8uestion that remains determination is whether the payment of damages sought to be reco"ered from Defendant may be ordered under the Law and the e"idence of record. I* ADC $@#;D, before the assignment is made, ha"ing notice of the commencement of the proceedings in insol"ency, or ha"ing reason to belie"e that insol"ency proceedings are about to be commenced, embezzles or disposes of any money, goods, chattels, or effects of the insol"ent, he is chargeable therewith, and liable to an action by the assignee for double the "alue of the property sought to be embezzled or disposed of, to be recei"ed for the benefit of the insol"ent estate. The writer of this decision does not entertain any doubt that the Defendant ta&ing ad"antage of his &nowledge that insol"ency proceedings were to be instituted by CALI if the creditors did not come to an understanding as to the manner of distribution of the insol"ent asset among them, and belie"ing it most probable that they would not arri"e at such understanding as it was really the case schemed and effected the transfer of its sister corporation in the Fnited #tates, where CALI(s plane C.7- was by that swift and unsuspected operation efficaciously disposed of said insol"ent(s property depri"ing the latter and the Assignee that was latter appointed, of the opportunity to reco"er said plane. In addition to the aforementioned #ection =3, Chapter 6 of the @$LI!IDA@C TITL$ of the Ci"il Code, dealing on %uman @elations, pro"ides the following<chanrobles"irtuallawlibrary HArt 01. Any person must, in the exercise of his rights and in the performances of his duties, act with Iustice, gi"e e"eryone his due and obser"e honesty and good faithJ.

It maybe said that this article only contains a mere declarations of principles and while such statement may be is essentially correct, yet +e find that such declaration is implemented by Article 60 and se8uence of the same Chapter which prescribe the following<chanrobles"irtuallawlibrary HArt. 60. Any person who wilfully causes loss or inIury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damageJ. The Code Commission commenting on this article, says the following<chanrobles"irtuallawlibrary

Page HThus at one stro&e, the legislator, if the forgoing rule is appro"ed ,as it was appro"ed/, would "ouchsafe | 4
ade8uate legal remedy for that untold numbers of moral wrongs which is impossible for human foresight to pro"ide for specifically in the statutes. H'ut, it may be as&ed, would this proposed article obliterate the boundary line between morality and lawM The answer is that, in the last analysis, e"ery good law draws its breath of life from morals, from those principles which are written with words of fire in the conscience of man. If this premises is admitted, then the proposed rule is a prudent earnest of Iustice in the face of the impossibility of enumerating, one by one, all wrongs which cause damages. +hen it is reflected that while codes of law and statutes ha"e changed from age to age, the conscience of man has remained fixed to its ancient moorings, one cannot but feel that it is safe and salutary to transmute, as far as may be, moral norms into legal rules, thus imparting to e"ery legal system that enduring 8uality which ought to be one of its superlati"e attributes. H*urthermore, there is no belief of more baneful conse8uence upon the social order than that a person may with impunity cause damage to his fellow.men so long as he does not brea& any law of the #tate, though he may be defying the most sacred postulates of morality. +hat is more, the "ictim loses faith in the ability of the go"ernment to afford him protection or relief. HA pro"ision similar to the one under consideration is embodied in article 265 of the :erman Ci"il Code. HThe same obser"ations may be made concerning inIurious acts that are contrary to public policy but are not forbidden by statute. There are countless acts of such character, but ha"e not been foreseen by the lawma&ers. Among these are many business practices that are unfair or oppressi"e, and certain acts of landholders and employers affecting their tenants and employees which contra"ene the public policy of social Iustice. HAnother rule is expressed in Article 6- which compels the return of a thing ac8uired Nwithout Iust or legal grounds(. This pro"ision embodies the doctrine that no person should unIustly enrich himself at the expense of another, which has been one of the mainstays of e"ery legal system for centuries. It is most needful that this ancient principles be clearly and specifically consecrated in the proposed Ci"il Code to the end that in cases not foreseen by the lawma&er, no one may unIustly benefit himself to the preIudice of another. The :erman Ci"il Code has a similar pro"ision ,art. 206/.J ,@eport of the Code Commission on the roposed Ci"il Code of the hilippines, p. -4. -0/. *rom the Ci"il Code Annotated by Ambrosio following<chanrobles"irtuallawlibrary adilla, 9ol. I, p. 70, 0175 edition, +e also copy the

HA moral wrong or inIury, e"en if it does not constitute a "iolation of a statute law, should be compensated by damages. !oral damages ,Art. 6603/ may be reco"ered ,Art. 6601/. In Article 64, the liability for damages arises from a willful or negligent act contrary to law. In this article, the act is contrary to morals, good customs or public policy.J Dow, if Article 6= of the Ci"il Code goes as far as to pro"ide that<chanrobles"irtuallawlibrary Page82 H$"en if an act or e"ent causing damage to another(s property was not due to the fault or negligence of the Defendant, the latter shall be liable for indemnity if through the act or e"ent he was benefited.J

with mere much more reason the Defendant should be liable for indemnity for acts it committed in bad faith and with betrayal of confidence. It may be argued that the afore8uoted pro"isions of the Ci"il Code only came into effect on August =4, 0174, and that they cannot be applicable to acts that too& place in 01-2, prior to its effecti"ity. 'ut Article 6676 of the Ci"il Code, though pro"iding that<chanrobles"irtuallawlibrary HChanges made and new pro"isions and rules laid down by this Code which may be preIudice or impair "ested or ac8uired rights in accordance with the old legislation, shall ha"e no retroacti"e effect cralaw .J implies that when the new pro"isions of the Code does nor preIudice or impair "ested or ac8uired rights in accordance with the old legislation and it cannot be alleged that in the case at bar Defendant had any "ested or ac8uired right to betray the confidence of the insol"ent CALI or of its creditors said new pro"isions, li&e those on %uman @elations, can be gi"en retroacti"e effect. !oreo"er, Article 667= of the Ci"il Code further pro"ides<chanrobles"irtuallawlibrary H cralaw 'ut if a right should be declared for the first time in this Code, it shall be effecti"e at once, e"en though the act or e"ent which may gi"e rise thereto may ha"e been done or may ha"e occurred under the prior legislation, pro"ided said new right does not preIudice or impair any "ested or ac8uired right, of the same origin.J and according to Article 667-, Hno "ested or ac8uired right can arise from acts or omissions which are against the law or which infringe upon the right of others.J In case of >uan Castro "s. Acro Taxicab Company, ,26 hil., =71A chan robles"irtualawlibrary-3 ;ff. :az., O7P 646=/, one of the 8uestion at issue was whether or not the pro"isions of the Dew Ci"il Code of the hilippines on moral damages should be applied to an act of negligence which occurred before the effecti"ity of said code, and this Court, through !r. >ustice 'riones, sustaining the affirmati"e proposition and citing decisions of the #upreme Court of #pain of *ebruary 0-, 01-0, and Do"ember 0-, 01=-, as well as the comment of !r. Castan, Chief >ustice of the #upreme Court of #pain, about the re"olutionary tendency of #panish Iurisprudence, said the following<chanrobles"irtuallawlibrary H+e conclude, therefore, reaffirming the doctrine laid down in the case of Lilius ,71 >. *. 244/ in the sense that indemnity lies for moral and patrimonial damages which include physical and pain sufferings. +ith this ,doctrine/, +e effect in this Iurisdiction a real symbiosis 0 of the #panish and American Laws and, at the same time, +e act in consonance with the spirit and progressi"e march of timeJ ,translation/ The writer of this decision does not see any reason for not applying the pro"isions of #ection =3 of the Insol"ency Law to the case at bar, specially if +e ta&e into consideration that the term Hany personJ used therein cannot be limited to the officers or employee of the insol"ent, as no such limitation exist in the wording of the section ,#ee also #ec. =2 of the same Act/, and that, as stated before, the Defendant schemed and affected the transfer of its credits ,from which it could deri"e practically nothing/ to its sister corporation in the Fnited #tates where CALI(s plane C.7- was then situated, succeeding by such swift and unsuspected operation in disposing of said insol"ent(s property by remo"ing it from the possession and ownership of the insol"ent. %owe"er, some members of this Court entertain doubt as to the applicability of said section =3 because in their opinion what Defendant in reality disposed of was its own credit and not the insol"ent(s property, although this was practically the effect and result of the scheme. %a"ing in mind this obIection and that the pro"isions of Article =3 ma&ing the person coming within its pur"iew liable for double the "alue of the property sought to be disposed of constitute a sort of penal clause which shall be strictly construed, and considering further that the same result may be obtained, by applying only the pro"isions of the Ci"il Code, the writer of this decision yields to the obIection aforementioned. Articles 6661, 66=6, 66=-, 60-6, and 60-= of the Ci"il Code read as follows<chanrobles"irtuallawlibrary

HArt. 6661. $xemplary or correcti"e damages are imposed, by way of example or correction for the public good, in addition to the moral, temperate, li8uidated or compensatory damages.J HArt. 66=6. In contracts 8uasi.contracts, the Court may award exemplary damages if the Defendant acted in a wanton, fraudulent, rec&less, oppressi"e, or male"olent manner.J HArt. 66=-. +hile the amount of the exemplary damages need not be pro"ed, the Plaintiffmust show that he is entitled to moral, temperate, or compensatory damages before the court may consider the 8uestion of whether or not exemplary damages should be awarded. In case li8uidated damages should be upon, although no proof of loss is necessary in order that such li8uidated damages be reco"ered, ne"ertheless, before the court may consider the 8uestion of granting exemplary in addition to the li8uidated damages, the Plaintiff must show that he would be entitled to moral, temperate or compensatory damages were it not for the stipulation for li8uidated damages.J HArt. 60-6. Certain lawful, "oluntary and unilateral acts gi"e rise to the Iuridical relation of 8uasi.contract to the end that no one shall be unIustly enriched or benefited at the expense of another.J HArt, 60-=. The pro"isions for 8uasi.contracts in this Chapter do not exclude other 8uasi.contracts which may come within the pur"iew of the preceding article.J In accordance with these 8uoted pro"isions of the Ci"il Code, +e hold Defendant liable to pay to the Plaintiff, for the benefit of the insol"ent CALI and its creditors, as compensatory damages a sum e8ui"alent to the "alue of the plane at the time aforementioned and another e8ual sum as exemplary damages. There is no clear proof in the record about the real "alue of CALI(s plane C.7- at the time when Defendant(s credit was assigned to its sister corporation in the Fnited #tates. >udgment +herefore, and on the strength of the foregoing considerations, the decision appealed from is re"ersed and Defendant.Appellee., #hell Company of the hilippine Islands, Ltd., is hereby sentenced to pay to Plaintiff.Appellant, as Assignee of the insol"ent CALI, damages in a sum double the amount of the "alue of the insol"ent(s airplane C.7- at the time Defendant(s credit against the CALI was assigned to its sister corporation in the Fnited #tates, which "alue shall be determined in the corresponding incident in the lower court after this decision becomes final. Costs are taxed against Defendant.Appellee. It is +O ORDERED. /"r"!, C.J., /"3i''", Monte7"$or, 4"8ti!t" An%e'o, L"br"3or, )once#cion, Re$e!, 9. 4. L., "n3 En3enci", conc8r.

Page |5

RE+OL20*ON FEL*6, J.:

July 30, 1957

Plaintiff.Appellant and inter"enors on one hand and Defendant #hell Company of the hilippine Islands, Ltd., on the other, ha"e filed their respecti"e motions for reconsideration of ;ur decision rendered in this case. The motion of Plaintiff Appellant and the inter"enors see&s the reconsideration of said decision in so far as it held that<chanrobles"irtuallawlibrary HThere is no clear proof in the record about the real "alue of CALI(s plane C.7-, at the time when Defendant(s credit was assigned to its sister corporation in the Fnited #tates.J and, upon such holding, it orders that the "alue of the C.7- plane Page82 Hbe determined in the corresponding incident in the lower Court after this decision becomes final.J

The mo"ants maintain that there is e"idence sufficient to support a finding that CALI(s C.7- plane had a fair mar&et "alue of K057,444 at or about the time Defendant credit was assigned to its sister corporation in the Fnited #tates and the plane attached. This motion was opposed by Defendant.Appellee which was replied by Plaintiff. Appellant with a supplemental motion for reconsideration, and then retorted with a manifestation and motion ofDefendant.Appellant followed by Defendant(s answer to Plaintiff(s motion for reconsideration. After considering the e"idence pointed out by said parties in support of their respecti"e contentions, we are more con"inced that the proofs relati"e to the real "alue of CALI plane C.7- at the time Defendant(s credit was assigned to its sister corporation in the Fnited #tates, is not clear. %ence, Plaintiff.Appellant(s and inter"enors( motion for reconsideration is hereby o"erruled. The main grounds on which Defendant.Appellee bases its motion for reconsideration, as relied upon in its counsel(s memoranda and oral argument, may be reduced to the following<chanrobles"irtuallawlibrary ,0/ That the Defendant Appellee is not guilty of bad faith, it ha"ing done nothing but to protect legitimately its own interest or credit against the bad faith of its debtor, the insol"ent CALI, under the control of the latter(s resident Alfonso #ycipA ,6/ That Appellee(s transfer of its credit to its sister corporation in the Fnited #tates, did not preIudice the :o"ernment, because its claims were fully paid, nor caused any loss or inIury to other creditors, except the entities and groups controlled by Alfonso E. #ycipA ,=/ That Appellee is not liable for exemplary damages because the pro"isions of the new Ci"il Code on the matter are not applicable to this caseA ,-/ That the Plaintiff.Appellant has no cause of action against Defendant.Appellant and is not the real party in interestA chan robles"irtualawlibraryand ,7/ That Plaintiff(s right of action was based and prosecuted in the lower court under the pro"isions of the Insol"ency Law and conse8uently that he is stopped from pursuing another theory and is not entitled to damages under the pro"isions of the Dew Ci"il Code. I. The facts on which this Court based its conclusion that Defendant corporation acted in bad faith are plainly and explicitly narrated in the decision. They are not and cannot be denied or contradicted by said Defendant. ;n the contrary they are in many respects admitted by the Defendant and no amount of reasoning can ma&e Fs change that conclusion. II. As pointed out by counsel for Plaintiff, Defendant choses to ignore that besides the claims of inter"enors Alfonso E. #ycip and Ce& %ua Trading Corporation, which counsel for the #hell says to constitute 04Q00 of the appro"ed ordinary claims, there is still 0Q00 of the other creditors whose claims ha"e been also appro"ed by the insol"ency Court, in addition to the ordinary creditors whose claims are yet unappro"ed by the insol"ency Court, amounting to 754,615,=6, and Hno good reason suggests itself why these unappro"ed but pending claims should be ta&en into account in considering the preIudice caused all the creditors of the insol"ent CALI. As long as these claims are pending, the contingency exist, that these creditors may reco"er from the insol"ent estate and when they do, they will suffer to the diminution of CALI(s asset resulting from the attachment of the plane by Appellee #hell.J Answering Defendant(s contention that the transfer of its credit to its sister corporation in the Fnited #tates did not preIudice the :o"ernment or the other creditors of CALI, counsel for Plaintiff.Appellant has the following to say<chanrobles"irtuallawlibrary H#o far as the claims of the :o"ernment are concerned, it is true that they were preferred claims and ha"e all been paid. 'ut this circumstance cannot erase the fact that the Appellee(s action Ieopardised the :o"ernment(s claims as well as the other claims. There was doubt as to the preferential character of the :o"ernment(s claims. Indeed, the preferential character of one of the :o"ernment(s claims necessitated a litigation to establish. %ad it been held to be an ordinary claim, the :o"ernment would ha"e suffered as other

creditors. 'ut that is neither here nor thereA chan robles"irtualawlibraryneither the character of the claim nor the identity of the claimant can possibly affect the application of a principle that no person may profit from his betrayal of a trust.J And the Appellant continues thus<chanrobles"irtuallawlibrary HAppellee had a credit of 034,444 against the insol"ent CALI as of August 01-2, which is assigned to its sister corporation in the Fnited #tates for 064.444. %ence, Appellee reco"ered 34R of its credit and immediately upon ma&ing the assignment in 01-2. !ore than this, the stated consideration was fixed by and and between two sister companies. The fact remains that Appellee(s sister company was enabled to get hold of a C.7- plane worth about ==4,444. H;n the other hand, the ordinary creditors who filed their claims against the insol"ent CALI had to wait until Do"ember 0175 to get their di"idends and only at the rate of =4R, computed as follows<chanrobles"irtuallawlibrary Assets as of ;ctober =4, 0175 Less<chanrobles"irtuallawlibrary referred claims still uncollected, assignee and attorney(s fees and other reser"es Amount a"ailable for distribution 761,227.71 0=2,301.75 552,547.07

Page |6

)i"ident<chanrobles"irtuallawlibrary Amount a"ailable for distribution S =4R Total of all ordinary claims appro"ed and unappro"ed 0,3-5,666.== %ad Appellee not assigned its credit in 01-2, the insol"ent CALI would ha"e realized from the sale of the plane ,which was attached by Appellee/ ==4,444 representing the fair mar&et "alue of the plane at the time of the attachment. Therefore, if this amount of ==4,444 is added to the distributable amount of 761,. 227.71, the share of each of the ordinary creditos would certainly amount to approximately 0 0Q6 times the di"idend each of them has recei"edAchan robles"irtualawlibraryin other words, each ordinary creditors would recei"ed not =4R but approximately -7R of his claim, and Appellee would reco"er approximately only -7R and not 34R of its credit.J And e"en if the sale of CALI(s plane would not ha"e obtained the sum of ==4,444.44, the proceeds thereof that might be diminished though affecting, no doubt, the calculated di"idend of each of the ordinary creditors, estimated at -7R by reducing it proportionately, such diminution would at the same time increase the difference between the di"idend paid CALI(s ordinary creditors in Do"ember, 0175, and the di"idend of 34R secured by Defendant#hell in 01-2. III and I9. That Appellee #hell is not liable for exemplary damages in this case and that Plaintiff. Appellant has no cause of action against Defendant.Appellee, for he is not the real party in interest, are matters fully discussed in ;ur decision and +e find no sensible reason for disturbing the conclusions +e reached therein. 761,227.71

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9. As to the fifth 8uestion raised by counsel for Appellee in the course of his oral argument at the hearing in the City of 'aguio of his motion, i.e., Hthat Plaintiff(s right of action was based and prosecuted in the lower court under the pro"isions of the Insol"ency Law and he is, therefore, stopped from pursuing on appeal another theory under which he might be entitled to damages in consonance with the pro"isions of the new Ci"il CodeJ, +e may in"o&e the decision in the case of )imaliwat "s. Asuncion, 71 hil., =15, -40. In that decision +e said the following<chanrobles"irtuallawlibrary H9icente )imaliwat contends that $speranza )imaliwat has no right to claim the ownership of the property in 8uestion to the exclusion of the children of the third marriage, under the foregoing pro"isions of the Ci"il Code, because the case was not tried on that theory in the lower court. +e find no merit in that contention. The decision cited are not in point. Articles 152 and 151 of the Ci"il Code are rules of substanti"e law, and if they are applicable to the facts of this case they must be gi"en effect.J The same thing can be said in the case at bar. Articles 01, 60, 6661, 66=6, 66=-, 60-6 and 60-= of the new Ci"il Code are rules of substanti"e law, and if they are applicable to the facts of this case, which +e hold they do, they must be made operati"e and gi"en effect in this litigation. x x x xxx It maybe seen from the foregoing that the abo"e mentioned grounds on which the motion for reconsideration of the Defendant #hell stand, are not well ta&en. %owe"er, and despite this finding, +e insist to del"e in the 8uestion of whether the exemplary damages imposed in this Court upon Defendant Appellee, which the latter(s counsel contends to be ine8uitable and unfair, may be modified. It will be remembered that this case was loo&ed into from the point of "iew of the pro"isions of #ection =3 of the Insol"ency Law, which reads as follows<chanrobles"irtuallawlibrary #$C. =3. I* ADC $@#;D, before the assignment is made, ha"ing notice of the commencement of the proceedings in insol"ency, or ha"ing reason to belie"e that insol"ency proceedings are about to be commenced, embezzles or disposses of any of the money, goods, chattels, or effects of the insol"ent, he is chargeable therewith, and liable to an action by the assignee for double the "alue of the property sought to be embezzled or disposed of, to be recei"ed for the benefit of the insol"ent estate. The writer of the decision was then and still is of the opinion that the pro"isions of this section were applicable to the case, and accordingly, that Defendant #hell was liable in this action instituted by the Assignee for double the "alue of the property disposed of, to be recei"ed for the benefit of the Insol"ent estate. %owe"er, some of the members of this Court, for the reasons already stated in the decision, entertained some doubt as to the applicability of said #ection =3, and yielding to their obIections the writer of the decision turned his eyes to the pro"isions of the new Ci"il Code, inasmuch as the same result could be achie"ed. In the case at bar, it cannot be denied that<chanrobles"irtuallawlibrary HDefendant ta&ing ad"antage of his &nowledge that insol"ency proceedings were to be instituted by CALI if the creditors did not come to an understanding as to the manner of distribution of the insol"ent assets among them, and belie"ing as most probable that they would not arri"e at such understanding, as it was really the case. schemed and effected the transfer of its credit to its sister corporation in the Fnited #tates where CALI(s plane C.7- was and by this swift and unsuspected operation efficaciously disposed of said insol"ent(s property depri"ing the latter and the Assignee that was later appointed, of the opportunity to reco"er said plane.J These acts of Defendant #hell come s8uarely within the sanction prescribed by Congress by similar acts and no reflection can be reasonably cast on Fs if in the measure of the exemplary damages that were to be imposed upon Defendant.Appellee, +e were influenced by the pro"isions of #ection =3 of the Insol"ency Law. In this connection it is to be noted that, according to the Ci"il Code, exemplary or correcti"e damages are imposed by way of example or correction for the public good, in addition of the moral, temperate, li8uidated or compensatory damages Art. 6661, and that the amount of the exemplary damages need not be pro"ed ,Art. 66=-/, for it is left to the sound discretion of the Court.

Dotwithstanding the foregoing, a maIority of this Court was of the belief that the "alue of CALI(s plane C.7-, at the time when Defendant(s credit was assigned to its sister corporation in the Fnited #tates, might result 8uite high, and that exemplary damages should not be left to speculation but properly determined by a certain and fixed amount. #o they "oted for the reconsideration of the decision with regard to the amount of exemplary damages which this Court fixed at 67,444.44. 'ecause of this attitude of the Court, the dispositi"e part of our decision rendered in this case is hereby amended to read as follows<chanrobles"irtuallawlibrary

Page +herefore, and on the strength of the foregoing considerations, the decision appealed from is re"ersed | 7
and Defendant.Appellee, #hell Company of the hilippine Islands Ltd., is hereby sentenced to pay Plaintiff. Appellant, as Assignee of the insol"ent CALI, compensatory damages in a sum e8ual to the "alue of the insol"ent(s airplane C.7- at the time Defendant(s credit against CALI was assigned to its sister corporation in the Fnited #tates . which shall be determined in the corresponding incident in the lower Court after this decision becomes final . and exemplary damages in the sum of 67,444. Costs are taxed against Defendant.Appellee. It is +O ORDERED.

G.R. No. 1::191. October 8, 1998 +A2D* ARA4*AN A*RL*NE+, petitioner, vs. )O2R0 OF A//EAL+, M*LAGRO+ /. MORADA "n3 .ON. RODOLFO A. OR0*;, in i! c"#"cit$ "! /re!i3in% 983%e o& 4r"nc 89, Re%ion"' 0ri"' )o8rt o& <8e=on )it$, respondents. <2*+2M4*NG, J.> This petition for certiorari pursuant to @ule -7 of the @ules of Court see&s to annul and set aside the @esolutionO0P dated #eptember 63, 0117 and the )ecisionO6P dated April 04, 0115 of the Court of AppealsO=P in CA.:.@. # Do. =57==,O-P and the ;rdersO7P dated August 61, 011-O5P and *ebruary 6, 0117O3P that were issued by the trial court in Ci"il Case Do. B.1=.02=1-.O2P The pertinent antecedent facts which ga"e rise to the instant petition, as stated in the 8uestioned )ecisionO1P, are as follows< H;n >anuary 60, 0122 defendant #AF)IA hired plaintiff as a *light Attendant for its airlines based in >eddah, #audi Arabia. x x x ;n April 63, 0114, while on a lay.o"er in >a&arta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer Al.:azzawi and Allah Al.:azzawi, both #audi nationals. 'ecause it was almost morning when they returned to their hotels, they agreed to ha"e brea&fast together at the room of Thamer. +hen they were in te ,sic/ room, Allah left on some pretext. #hortly after he did, Thamer attempted to rape plaintiff. *ortunately, a roomboy and se"eral security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah Al.:azzawi, the latter as an accomplice. +hen plaintiff returned to >eddah a few days later, se"eral #AF)IA officials interrogated her about the >a&arta incident. They then re8uested her to go bac& to >a&arta to help arrange the release of Thamer and Allah. In >a&arta, #AF)IA Legal ;fficer #irah A&&ad and base manager 'aharini negotiated with the police for the immediate release of the detained crew members but did not succeed because plaintiff refused to cooperate. #he was afraid that she might be tric&ed into something she did not want because of her inability to understand the local dialect. #he also declined to sign a blan& paper and a document written in the local dialect. $"entually, #AF)IA allowed plaintiff to return to >eddah but barred her from the >a&arta flights.

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laintiff learned that, through the intercession of the #audi Arabian go"ernment, the Indonesian authorities agreed to deport Thamer and Allah after two wee&s of detention. $"entually, they were again put in ser"ice by defendant #AF)I ,sic/. In #eptember 0114, defendant #AF)IA transferred plaintiff to !anila. ;n >anuary 0-, 0116, Iust when plaintiff thought that the >a&arta incident was already behind her, her superiors re8uested her to see !r. Ali !eniewy, Chief Legal ;fficer of #AF)IA, in >eddah, #audi Arabia. +hen she saw him, he brought her to the police station where the police too& her passport and 8uestioned her about the >a&arta incident. !iniewy simply stood by as the police put pressure on her to ma&e a statement dropping the case against Thamer and Allah. Dot until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of >eddah. ;ne year and a half later or on >une 05, 011=, in @iyadh, #audi Arabia, a few minutes before the departure of her flight to !anila, plaintiff was not allowed to board the plane and instead ordered to ta&e a later flight to >eddah to see !r. !iniewy, the Chief Legal ;fficer of #AF)IA. +hen she did, a certain Lhalid of the #AF)IA office brought her to a #audi court where she was as&ed to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on >une 63, 011=. laintiff then returned to !anila. #hortly afterwards, defendant #AF)IA summoned plaintiff to report to >eddah once again and see !iniewy on >une 63, 011= for further in"estigation. laintiff did so after recei"ing assurance from #AF)IA(s !anila manager, Aslam #aleemi, that the in"estigation was routinary and that it posed no danger to her. In >eddah, a #AF)IA legal officer brought plaintiff to the same #audi court on >une 63, 011=. Dothing happened then but on >une 62, 011=, a #audi Iudge interrogated plaintiff through an interpreter about the >a&arta incident. After one hour of interrogation, they let her go. At the airport, howe"er, Iust as her plane was about to ta&e off, a #AF)IA officer told her that the airline had forbidden her to ta&e flight. At the Inflight #er"ice ;ffice where she was told to go, the secretary of !r. Cahya #addic& too& away her passport and told her to remain in >eddah, at the crew 8uarters, until further orders. ;n >uly =, 011= a #AF)IA legal officer again escorted plaintiff to the same court where the Iudge, to her astonishment and shoc&, rendered a decision, translated to her in $nglish, sentencing her to fi"e months imprisonment and to 625 lashes. ;nly then did she realize that the #audi court had tried her, together with Thamer and Allah, for what happened in >a&arta. The court found plaintiff guilty of ,0/ adulteryA ,6/ going to a disco, dancing and listening to the music in "iolation of Islamic lawsA and ,=/ socializing with the male crew, in contra"ention of Islamic tradition.JO04P *acing con"iction, pri"ate respondent sought the help of her employer, petitioner #AF)IA. Fnfortunately, she was denied any assistance. #he then as&ed the hilippine $mbassy in >eddah to help her while her case is on appeal. !eanwhile, to pay for her up&eep, she wor&ed on the domestic flight of #AF)IA, while Thamer and Allah continued to ser"e in the international flights.O00P 'ecause she was wrongfully con"icted, the rince of !a&&ah dismissed the case against her and allowed her to lea"e #audi Arabia. #hortly before her return to !anila,O06P she was terminated from the ser"ice by #AF)IA, without her being informed of the cause. ;n Do"ember 6=, 011=, !orada filed a ComplaintO0=P for damages against #AF)IA, and Lhaled Al. 'alawi ,HAl. 'alawiJ/, its country manager.

;n >anuary 01, 011-, #AF)IA filed an ;mnibus !otion To )ismiss O0-P which raised the following grounds, to wit< ,0/ that the Complaint states no cause of action against #audiaA ,6/ that defendant Al.'alawi is not a real party in interestA ,=/ that the claim or demand set forth in the Complaint has been wai"ed, abandoned or otherwise extinguishedA and ,-/ that the trial court has no Iurisdiction to try the case. ;n *ebruary 04, 011-, !orada filed her ;pposition ,To !otion to )ismiss/ O07P #audia filed a replyO05P thereto on !arch =, 011-. ;n >une 6=, 011-, !orada filed an Amended Complaint O03P wherein Al.'alawi was dropped as party defendant. ;n August 00, 011-, #audia filed its !anifestation and !otion to )ismiss Amended Complaint O02P. The trial court issued an ;rder O01P dated August 61, 011- denying the !otion to )ismiss Amended Complaint filed by #audia. *rom the ;rder of respondent >udgeO64P denying the !otion to )ismiss, #AF)IA filed on #eptember 64, 011-, its !otion for @econsiderationO60P of the ;rder dated August 61, 011-. It alleged that the trial court has no Iurisdiction to hear and try the case on the basis of Article 60 of the Ci"il Code, since the proper law applicable is the law of the Lingdom of #audi Arabia. ;n ;ctober 0-, 011-, !orada filed her ;ppositionO66P ,To )efendant(s !otion for @econsideration/. In the @eplyO6=P filed with the trial court on ;ctober 6-, 011-, #AF)IA alleged that since its !otion for @econsideration raised lac& of Iurisdiction as its cause of action, the ;mnibus !otion @ule does not apply, e"en if that ground is raised for the first time on appeal. Additionally, #AF)IA alleged that the hilippines does not ha"e any substantial interest in the prosecution of the instant case, and hence, without Iurisdiction to adIudicate the same. @espondent >udge subse8uently issued another ;rder O6-P dated *ebruary 6, 0117, denying #AF)IA(s !otion for @econsideration. The pertinent portion of the assailed ;rder reads as follows< HActing on the !otion for @econsideration of defendant #audi Arabian Airlines filed, thru counsel, on #eptember 64, 011-, and the ;pposition thereto of the plaintiff filed, thru counsel, on ;ctober 0-, 011-, as well as the @eply therewith of defendant #audi Arabian Airlines filed, thru counsel, on ;ctober 6-, 011-, considering that a perusal of the plaintiff(s Amended Complaint, which is one for the reco"ery of actual, moral and exemplary damages plus attorney(s fees, upon the basis of the applicable hilippine law, Article 60 of the Dew Ci"il Code of the hilippines, is, clearly, within the Iurisdiction of this Court as regards the subIect matter, and there being nothing new of substance which might cause the re"ersal or modification of the order sought to be reconsidered, the motion for reconsideration of the defendant, is )$DI$). #; ;@)$@$).JO67P Conse8uently, on *ebruary 64, 0117, #AF)IA filed its etition for Certiorari and rohibition with rayer for Issuance of +rit of reliminary InIunction andQor Temporary @estraining ;rder O65P with the Court of Appeals. @espondent Court of Appeals promulgated a @esolution with Temporary @estraining ;rder O63P dated *ebruary 6=, 0117, prohibiting the respondent >udge from further conducting any proceeding, unless otherwise directed, in the interim. In another @esolutionO62P promulgated on #eptember 63, 0117, now assailed, the appellate court denied #AF)IA(s etition for the Issuance of a +rit of reliminary InIunction dated *ebruary 02, 0117, to wit< Page82 HThe etition for the Issuance of a +rit of reliminary InIunction is hereby )$DI$), after considering the Answer, with rayer to )eny +rit of reliminary InIunction ,Rollo, p. 0=7/ the @eply and @eIoinder, it appearing that herein petitioner is not clearly entitled thereto ,Fnciano

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aramedical College, et. Al., v. Court of Appeals, et. Al., 044==7, April 3, 011=, #econd )i"ision/. #; ;@)$@$).J ;n ;ctober 64, 0117, #AF)IA filed with this %onorable Court the instant etition O61P for @e"iew with rayer for Temporary @estraining ;rder dated ;ctober 0=, 0117. %owe"er, during the pendency of the instant etition, respondent Court of Appeals rendered the )ecisionO=4P dated April 04, 0115, now also assailed. It ruled that the hilippines is an appropriate forum considering that the Amended Complaint(s basis for reco"ery of damages is Article 60 of the Ci"il Code, and thus, clearly within the Iurisdiction of respondent Court. It further held that certiorari is not the proper remedy in a denial of a !otion to )ismiss, inasmuch as the petitioner should ha"e proceeded to trial, and in case of an ad"erse ruling, find recourse in an appeal. ;n !ay 3, 0115, #AF)IA filed its #upplemental etition for @e"iew with rayer for Temporary @estraining ;rderO=0P dated April =4, 0115, gi"en due course by this Court. After both parties submitted their !emoranda,O=6P the instant case is now deemed submitted for decision. etitioner #AF)IA raised the following issues< ?*. The trial court has no Iurisdiction to hear and try Ci"il Case Do. B.1=.02=1- based on Article 60 of the Dew Ci"il Code since the proper law applicable is the law of the Lingdom of #audi Arabia inasmuch as this case in"ol"es what is &nown in pri"ate international law as a Nconflicts problem(. ;therwise, the @epublic of the hilippines will sit in Iudgment of the acts done by another so"ereign state which is abhorred. **.. Lea"e of court before filing a supplemental pleading is not a Iurisdictional re8uirement. 'esides, the matter as to absence of lea"e of court is now moot and academic when this %onorable Court re8uired the respondents to comment on petitioner(s April =4, 0115 #upplemental etition *or @e"iew +ith rayer *or A Temporary @estraining ;rder +ithin Ten ,04/ )ays *rom Dotice Thereof. *urther, the @e"ised @ules of Court should be construed with liberality pursuant to #ection 6, @ule 0 thereof. ***. etitioner recei"ed on April 66, 0115 the April 04, 0115 decision in CA.:.@. # D;. =57== entitled N#audi Arabian Airlines v. %on. @odolfo A. ;rtiz, et al.( and filed its April =4, 0115 #upplemental etition *or @e"iew +ith rayer *or A Temporary @estraining ;rder on !ay 3, 0115 at 04<61 a.m. or within the 07.day reglementary period as pro"ided for under #ection 0, @ule -7 of the @e"ised @ules of Court. Therefore, the decision in CA.:.@. # D;. =57== has not yet become final and executory and this %onorable Court can ta&e cognizance of this case.JO==P *rom the foregoing factual and procedural antecedents, the following issues emerge for our resolution< I. +%$T%$@ @$# ;D)$DT A $LLAT$ C;F@T $@@$) ID %;L)ID: T%AT T%$ @$:I;DAL T@IAL C;F@T ;* BF$E;D CITC %A# >F@I#)ICTI;D T; %$A@ AD) T@C CI9IL CA#$ D;. B.1=.02=1- $DTITL$) H!ILA:@;# . !;@A)A 9. #AF)I A@A'IAD AI@LID$#.J +%$T%$@ @$# ;D)$DT A $LLAT$ C;F@T $@@$) ID @FLID: T%AT ID T%$ CA#$ %ILI ID$ LA+ #%;FL) :;9$@D.

;n the other hand, pri"ate respondent contends that since her Amended Complaint is based on Articles 01O=7P and 60O=5P of the Ci"il Code, then the instant case is properly a matter of domestic law.O=3P Fnder the factual antecedents obtaining in this case, there is no dispute that the interplay of e"ents occurred in two states, the hilippines and #audi Arabia. As stated by pri"ate respondent in her Amended ComplaintO=2P dated >une 6=, 011-< H6. )efendant #AF)I A@A'IAD AI@LID$# or #AF)IA is a foreign airlines corporation doing business in the hilippines. It may be ser"ed with summons and other court processes at Tra"el +ide Associated #ales , hils./, Inc., =rd *loor, Cougar 'uilding, 00- 9alero #t., #alcedo 9illage, !a&ati, !etro !anila. x x x x x x 5. laintiff learned that, through the intercession of the #audi Arabian go"ernment, the Indonesian authorities agreed to deport Thamer and Allah after two wee&s of detention. $"entually, they were again put in ser"ice by defendant #AF)IA. In #eptember 0114, defendant #AF)IA transferred plaintiff to !anila. 3. ;n >anuary 0-, 0116, Iust when plaintiff thought that the >a&arta incident was already behind her, her superiors re8uested her to see !@. Ali !eniewy, Chief Legal ;fficer of #AF)IA, in >eddah, #audi Arabia. +hen she saw him, he brought her to the police station where the police too& her passport and 8uestioned her about the >a&arta incident. !iniewy simply stood by as the police put pressure on her to ma&e a statement dropping the case against Thamer and Allah. Dot until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of >eddah. 2. ;ne year and a half later or on >une 05, 011=, in @iyadh, #audi Arabia, a few minutes before the departure of her flight to !anila, plaintiff was not allowed to board the plane and instead ordered to ta&e a later flight to >eddah to see !r. !eniewy, the Chief Legal ;fficer of #AF)IA. +hen she did, a certain Lhalid of the #AF)IA office brought her to a #audi court where she was as&ed to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on >une 63, 011=. laintiff then returned to !anila. 1. #hortly afterwards, defendant #AF)IA summoned plaintiff to report to >eddah once again and see !iniewy on >une 63, 011= for further in"estigation. laintiff did so after recei"ing assurance from #AF)IA(s !anila manager, Aslam #aleemi, that the in"estigation was routinary and that it posed no danger to her. 04. In >eddah, a #AF)IA legal officer brought plaintiff to the same #audi court on >une 63, 011=. Dothing happened then but on >une 62, 011=, a #audi Iudge interrogated plaintiff through an interpreter about the >a&arta incident. After one hour of interrogation, they let her go. At the airport, howe"er, Iust as her plane was about to ta&e off, a #AF)IA officer told her that the airline had forbidden her to ta&e that flight. At the Inflight #er"ice ;ffice where she was told to go, the secretary of !r. Cahya #addic& too& away her passport and told her to remain in >eddah, at the crew 8uarters, until further orders. 00. ;n >uly =, 011= a #AF)IA legal officer again escorted plaintiff to the same court where the Iudge, to her astonishment and shoc&, rendered a decision, translated to her in $nglish, sentencing her to fi"e months imprisonment and to 625 lashes. ;nly then did she realize that the #audi court had tried her, together with Thamer and Allah, for what happened in >a&arta. The court found plaintiff guilty of ,0/ adulteryA ,6/ going to a disco, dancing, and listening to the music in "iolation of Islamic lawsA ,=/ socializing with the male crew, in contra"ention of Islamic tradition.

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II.

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etitioner #AF)IA claims that before us is a conflict of laws that must be settled at the outset. It maintains that pri"ate respondent(s claim for alleged abuse of rights occurred in the Lingdom of #audi Arabia. It alleges that the existence of a foreign element 8ualifies the instant case for the application of the law of the Lingdom of #audi Arabia, by "irtue of the lex loci delicti commissi rule.O=-P

06. 'ecause #AF)IA refused to lend her a hand in the case, plaintiff sought the help of the hilippine $mbassy in >eddah. The latter helped her pursue an appeal from the decision of the court. To pay for her up&eep, she wor&ed on the domestic flights of defendant #AF)IA while, ironically, Thamer and Allah freely ser"ed the international flights.JO=1P +here the factual antecedents satisfactorily establish the existence of a foreign element, we agree with petitioner that the problem herein could present a HconflictsJ case. A factual situation that cuts across territorial lines and is affected by the di"erse laws of two or more states is said to contain a Hforeign elementJ. The presence of a foreign element is ine"itable since social and economic affairs of indi"iduals and associations are rarely confined to the geographic limits of their birth or conception.O-4P The forms in which this foreign element may appear are many. O-0P The foreign element may simply consist in the fact that one of the parties to a contract is an alien or has a foreign domicile, or that a contract between nationals of one #tate in"ol"es properties situated in another #tate. In other cases, the foreign element may assume a complex form.O-6P In the instant case, the foreign element consisted in the fact that pri"ate respondent !orada is a resident hilippine national, and that petitioner #AF)IA is a resident foreign corporation. Also, by "irtue of the employment of !orada with the petitioner #audia as a flight stewardess, e"ents did transpire during her many occasions of tra"el across national borders, particularly from !anila, hilippines to >eddah, #audi Arabia, and "ice "ersa, that caused a HconflictsJ situation to arise. +e thus find pri"ate respondent(s assertion that the case is purely domestic, imprecise. A conflicts problem presents itself here, and the 8uestion of Iurisdiction O-=P confronts the court a quo. After a careful study of the pri"ate respondent(s Amended Complaint, O--P and the Comment thereon, we note that she aptly predicated her cause of action on Articles 01 and 60 of the Dew Ci"il Code. ;n one hand, Article 01 of the Dew Ci"il Code pro"idesA HArt. 01. $"ery person must, in the exercise of his rights and in the performance of his duties, act with Iustice gi"e e"eryone his due and obser"e honesty and good faith.J ;n the other hand, Article 60 of the Dew Ci"il Code pro"ides< HArt. 60. Any person who willfully causes loss or inIury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for damages.J Thus, in Philippine National Bank (PNB vs. Court of Appeals,O-7P this Court held that< HThe aforecited pro"isions on human relations were intended to expand the concept of torts in this Iurisdiction by granting ade8uate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically pro"ide in the statutes.J Although Article 01 merely declares a principle of law, Article 60 gi"es flesh to its pro"isions. Thus, we agree with pri"ate respondent(s assertion that "iolations of Articles 01 and 60 are actionable, with Iudicially enforceable remedies in the municipal forum. 'ased on the allegationsO-5P in the Amended Complaint, read in the light of the @ules of Court on IurisdictionO-3P we find that the @egional Trial Court ,@TC/ of Buezon City possesses Iurisdiction o"er the subIect matter of the suit. O-2P Its authority to try and hear the case is pro"ided for under #ection 0 of @epublic Act Do. 3510, to wit<

H#ection 0. #ection 01 of 'atas ambansa 'lg. 061, otherwise &nown as the H>udiciary @eorganization Act of 0124J, is hereby amended to read as follows< #$C. 01. >urisdiction in Ci"il Cases. T @egional Trial Courts shall exercise exclusi"e Iurisdiction< ,2/ In all other cases in which demand, exclusi"e of interest, damages of whate"er &ind, attorney(s fees, litigation expenses, and costs or the "alue of the property in contro"ersy exceeds ;ne hundred thousand pesos , 044,444.44/ or, in such other cases in !etro !anila, where the demand, exclusi"e of the abo"e. mentioned items exceeds Two hundred Thousand pesos , 644,444.44/. ,$mphasis ours/ And following #ection 6 ,b/, @ule - of the @e"ised @ules of Courtthe "enue, Buezon City, is appropriate< H#$C. 6 9enue in Courts of *irst Instance. TODow @egional Trial CourtP ,b/ ersonal actions. T All other actions may be commenced and tried where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiff resides, at the election of the plaintiff.J ragmatic considerations, including the con"enience of the parties, also weigh hea"ily in fa"or of the @TC Buezon City assuming Iurisdiction. aramount is the pri"ate interest of the litigant. $nforceability of a Iudgment if one is obtained is 8uite ob"ious. @elati"e ad"antages and obstacles to a fair trial are e8ually important. laintiff may not, by choice of an incon"enient forum, N"ex(, Nharass(, or Noppress( the defendant, e.g. by inflicting upon him needless expense or disturbance. 'ut unless the balance is strongly in fa"or of the defendant, the plaintiff(s choice of forum should rarely be disturbed.O-1P +eighing the relati"e claims of the parties, the court a quo found it best to hear the case in the hilippines. %ad it refused to ta&e cognizance of the case, it would be forcing plaintiff ,pri"ate respondent now/ to see& remedial action elsewhere, i.e. in the Lingdom of #audi Arabia where she no longer maintains substantial connections. That would ha"e caused a fundamental unfairness to her. !oreo"er, by hearing the case in the hilippines no unnecessary difficulties and incon"enience ha"e been shown by either of the parties. The choice of forum of the plaintiff ,now pri"ate respondent/ should be upheld. #imilarly, the trial court also possesses Iurisdiction o"er the persons of the parties herein. 'y filing her Complaint and Amended Complaint with the trial court, pri"ate respondent has "oluntary submitted herself to the Iurisdiction of the court. The records show that petitioner #AF)IA has filed se"eral motions O74P praying for the dismissal of !orada(s Amended Complaint. #AF)IA also filed an Answer In !x A"undante Cautelam dated *ebruary 64, 0117. +hat is "ery patent and explicit from the motions filed, is that #AF)IA prayed for other reliefs under the premises. Fndeniably, petitioner #AF)IA has effecti"ely submitted to the trial court(s Iurisdiction by praying for the dismissal of the Amended Complaint on grounds other than lac& of Iurisdiction. As held by this Court in Repu"lic vs. #er and Compan$, %td.<O70P H+e obser"e that the motion to dismiss filed on April 0-, 0156, aside from disputing the lower court(s Iurisdiction o"er defendant(s person, prayed for dismissal of the complaint on the ground that plaintiff(s cause of action has prescribed. 'y interposing such second ground in its motion to dismiss, Ler and Co., Ltd. a"ailed of an affirmati"e defense on the basis of which it prayed the court to resol"e contro"ersy in its fa"or. *or the court to "alidly decide the said plea

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of defendant Ler ? Co., Ltd., it necessarily had to ac8uire Iurisdiction upon the latter(s person, who, being the proponent of the affirmati"e defense, should be deemed to ha"e abandoned its special appearance and "oluntarily submitted itself to the Iurisdiction of the court.J #imilarly, the case of De &id'el$ vs. (erandos, held that< H+hen the appearance is by motion for the purpose of obIecting to the Iurisdiction of the court o"er the person, it must be for the sole and separate purpose of obIecting to the Iurisdiction of the court. If his motion is for any other purpose than to obIect to the Iurisdiction of the court o"er his person, he thereby submits himself to the Iurisdiction of the court. A special appearance by motion made for the purpose of obIecting to the Iurisdiction of the court o"er the person will be held to be a general appearance, if the party in said motion should, for example, as& for a dismissal of the action upon the further ground that the court had no Iurisdiction o"er the subIect matter.JO76P Clearly, petitioner had submitted to the Iurisdiction of the @egional Trial Court of Buezon City. Thus, we find that the trial court has Iurisdiction o"er the case and that its exercise thereof, Iustified. As to the choice of applicable law, we note that choice.of.law problems see& to answer two important 8uestions< ,0/ +hat legal system should control a gi"en situation where some of the significant facts occurred in two or more statesA and ,6/ to what extent should the chosen legal system regulate the situation.
O7=P

,7/ the place where an act is intended to come into effect, e.g., the place of performance of contractual duties, or the place where a power of attorney is to be exercisedA ,5/ the intention of the contracting parties as to the law that should go"ern their agreement, the lex loci intentionisA ,3/ the place where Iudicial or administrati"e proceedings are instituted or done. The lex fori the law of the forumis particularly important because, as we ha"e seen earlier, matters of Nprocedure( not going to the substance of the claim in"ol"ed are go"erned by itA and because the lex fori applies whene"er the content of the otherwise applicable foreign law is excluded from application in a gi"en case for the reason that it falls under one of the exceptions to the applications of foreign lawA and ,2/ the flag of a ship, which in many cases is decisi"e of practically all legal relationships of the ship and of its master or owner as such. It also co"ers contractual relationships particularly contracts of affreightment.JO54P ,Fnderscoring ours./ After a careful study of the pleadings on record, including allegations in the Amended Complaint deemed submitted for purposes of the motion to dismiss, we are con"inced that there is reasonable basis for pri"ate respondent(s assertion that although she was already wor&ing in !anila, petitioner brought her to >eddah on the pretense that she would merely testify in an in"estigation of the charges she made against the two #AF)IA crew members for the attac& on her person while they were in >a&arta. As it turned out, she was the one made to face trial for "ery serious charges, including adultery and "iolation of Islamic laws and tradition. There is li&ewise logical basis on record for the claim that the Hhanding o"erJ or Hturning o"erJ of the person of pri"ate respondent to >eddah officials, petitioner may ha"e acted beyond its duties as employer. etitioner(s purported act contributed to and amplified or e"en proximately caused additional humiliation, misery and suffering of pri"ate respondent. etitioner thereby allegedly facilitated the arrest, detention and prosecution of pri"ate respondent under the guise of petitioner(s authority as employer, ta&ing ad"antage of the trust, confidence and faith she reposed upon it. As purportedly found by the rince of !a&&ah, the alleged con"iction and imprisonment of pri"ate respondent was wrongful. 'ut these capped the inIury or harm allegedly inflicted upon her person and reputation, for which petitioner could be liable as claimed, to pro"ide compensation or redress for the wrongs done, once duly pro"en. Considering that the complaint in the court a quo is one in"ol"ing torts, the Hconnecting factorJ or Hpoint of contactJ could be the place or places where the tortious conduct or lex loci actus occurred. And applying the torts principle in a conflicts case, we find that the hilippines could be said as a situs of the tort ,the place where the alleged tortious conduct too& place/. This is because it is in the hilippines where petitioner allegedly decei"ed pri"ate respondent, a *ilipina residing and wor&ing here. According to her, she had honestly belie"ed that petitioner would, in the exercise of its rights and in the performance of its duties, Hact with Iustice, gi"e her her due and obser"e honesty and good faith.J Instead, petitioner failed to protect her, she claimed. That certain acts or parts of the inIury allegedly occurred in another country is of no moment. *or in our "iew what is important here is the place where the o"er.all harm or the fatality of the alleged inIury to the person, reputation, social standing and human rights of complainant, had lodged, according to the plaintiff below ,herein pri"ate respondent/. All told, it is not without basis to identify the hilippines as the situs of the alleged tort. !oreo"er, with the widespread criticism of the traditional rule of lex loci delicti commissi, modern theories and rules on tort liabilityO50P ha"e been ad"anced to offer fresh Iudicial approaches to arri"e at Iust results. In &eeping abreast with the modern theories on tort liability, we find here an occasion to apply the H#tate of the most significant relationshipJ rule, which in our "iew should be appropriate to apply now, gi"en the factual context of this case.

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#e"eral theories ha"e been propounded in order to identify the legal system that should ultimately control. Although ideally, all choice.of.law theories should intrinsically ad"ance both notions of Iustice and predictability, they do not always do so. The forum is then faced with the problem of deciding which of these two important "alues should be stressed.O7-P 'efore a choice can be made, it is necessary for us to determine under what category a certain set of facts or rules fall. This process is &nown as HcharacterizationJ, or the Hdoctrine of 8ualificationJ. It is the Hprocess of deciding whether or not the facts relate to the &ind of 8uestion specified in a conflicts rule.J O77P The purpose of HcharacterizationJ is to enable the forum to select the proper law.O75P ;ur starting point of analysis here is not a legal relation, but a factual situation, e"ent, or operati"e fact.O73P An essential element of conflict rules is the indication of a HtestJ or Hconnecting factorJ or Hpoint of contactJ. Choice.of.law rules in"ariably consist of a factual relationship ,such as property right, contract claim/ and a connecting factor or point of contact, such as the situs of the res, the place of celebration, the place of performance, or the place of wrongdoing.O72P Dote that one or more circumstances may be present to ser"e as the possible test for the determination of the applicable law.O71P These Htest factorsJ or Hpoints of contactJ or Hconnecting factorsJ could be any of the following< H,0/ The nationality of a person, his domicile, his residence, his place of soIourn, or his originA ,6/ the seat of a legal or Iuridical person, such as a corporationA ,=/ the situs of a thing, that is, the place where a thing is, or is deemed to be situated. In particular, the lex situs is decisi"e when real rights are in"ol"edA ,-/ t e #'"ce @ ere "n "ct "! been 3one, t e locus actus, !8c "! t e #'"ce @ ere " contr"ct "! been 7"3e, " 7"rri"%e ce'ebr"te3, " @i'' !i%ne3 or " tort co77itte3. 0 e le loci actus i! #"rtic8'"r'$ i7#ort"nt in contr"ct! "n3 tort!A

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In applying said principle to determine the #tate which has the most significant relationship, the following contacts are to be ta&en into account and e"aluated according to their relati"e importance with respect to the particular issue< ,a/ the place where the inIury occurredA ,b/ the place where the conduct causing the inIury occurredA ,c/ the domicile, residence, nationality, place of incorporation and place of business of the parties, and ,d/ the place where the relationship, if any, between the parties is centered. O56P As already discussed, there is basis for the claim that o"er.all inIury occurred and lodged in the hilippines. There is li&ewise no 8uestion that pri"ate respondent is a resident *ilipina national, wor&ing with petitioner, a resident foreign corporation engaged here in the business of international air carriage. Thus, the HrelationshipJ between the parties was centered here, although it should be stressed that this suit is not based on mere labor law "iolations. *rom the record, the claim that the hilippines has the most significant contact with the matter in this dispute, O5=P raised by pri"ate respondent as plaintiff below against defendant ,herein petitioner/, in our "iew, has been properly established. rescinding from this premise that the hilippines is the situs of the tort complaint of and the place Hha"ing the most interest in the problemJ, we find, by way of recapitulation, that the hilippine law on tort liability should ha"e paramount application to and control in the resolution of the legal issues arising out of this case. *urther, we hold that the respondent @egional Trial Court has Iurisdiction o"er the parties and the subIect matter of the complaintA the appropriate "enue is in Buezon City, which could properly apply hilippine law. !oreo"er, we find untenable petitioner(s insistence that HOsPince pri"ate respondent instituted this suit, she has the burden of pleading and pro"ing the applicable #audi law on the matter.J O5-P As aptly said by pri"ate respondent, she has Hno obligation to plead and pro"e the law of the Lingdom of #audi Arabia since her cause of action is based on Articles 01 and 60J of the Ci"il Code of the hilippines. In her Amended Complaint and subse8uent pleadings she ne"er alleged that #audi law should go"ern this case. O57P And as correctly held by the respondent appellate court, Hconsidering that it was the petitioner who was in"o&ing the applicability of the law of #audi Arabia, thus the burden was on it OpetitionerP to plead and to establish what the law of #audi Arabia isJ.O55P Lastly, no error could be imputed to the respondent appellate court in upholding the trial court(s denial of defendant(s ,herein petitioner(s/ motion to dismiss the case. Dot only was Iurisdiction in order and "enue properly laid, but appeal after trial was ob"iously a"ailable, and the expeditious trial itself indicated by the nature of the case at hand. Indubitably, the hilippines is the state intimately concerned with the ultimate outcome of the case below not Iust for the benefit of all the litigants, but also for the "indication of the country(s system of law and Iustice in a transnational setting. +ith these guidelines in mind, the trial court must proceed to try and adIudge the case in the light of rele"ant hilippine law, with due consideration of the foreign element or elements in"ol"ed. Dothing said herein, of course, should be construed as preIudging the results of the case in any manner whatsoe"er. B.EREFORE, the instant petition for certiorari is hereby )I#!I##$). Ci"il Case Do. B.1=.02=1entitled H!ilagros . !orada vs. #audi Arabia AirlinesJ is hereby @$!AD)$) to @egional Trial Court of Buezon City, 'ranch 21 for further proceedings. +O ORDERED.

engineering operations manager. In 0136, :L;'$ !ACLAC disco"ered fictitious purchases and other fraudulent transactions for which it lost se"eral thousands of pesos. According to pri"ate respondent it was he who actually disco"ered the anomalies and reported them on Do"ember 04, 0136 to his immediate superior $duardo T. *erraren and to petitioner %erbert C. %endry who was then the $xecuti"e 9ice. resident and :eneral !anager of :L;'$ !ACLAC. ;n Do"ember 00, 0136, one day after pri"ate respondent Tobias made the report, petitioner %endry confronted him by stating that he was the number one suspect, and ordered him to ta&e a one wee& forced lea"e, not to communicate with the office, to lea"e his table drawers open, and to lea"e the office &eys. ;n Do"ember 64, 0136, when pri"ate respondent Tobias returned to wor& after the forced lea"e, petitioner %endry went up to him and called him a Ucroo&U and a Uswindler.U Tobias was then ordered to ta&e a lie detector test. %e was also instructed to submit specimen of his handwriting, signature, and initials for examination by the police in"estigators to determine his complicity in the anomalies. ;n )ecember 5,0136, the !anila police in"estigators submitted a laboratory crime report ,$xh. UAU/ clearing pri"ate respondent of participation in the anomalies. Dot satisfied with the police report, petitioners hired a pri"ate in"estigator, retired Col. >ose :. *ernandez, who on )ecember 04, 0136, submitted a report ,$xh. U6U/ finding Tobias guilty. This report howe"er expressly stated that further in"estigation was still to be conducted. De"ertheless, on )ecember 06, 0136, petitioner %endry issued a memorandum suspending Tobias from wor& preparatory to the filing of criminal charges against him. ;n )ecember 01,0136, Lt. )ioscoro 9. Tagle, !etro !anila olice Chief )ocument $xaminer, after in"estigating other documents pertaining to the alleged anomalous transactions, submitted a second laboratory crime report ,$xh. U'U/ reiterating his pre"ious finding that the handwritings, signatures, and initials appearing in the chec&s and other documents in"ol"ed in the fraudulent transactions were not those of Tobias. The lie detector tests conducted on Tobias also yielded negati"e results. Dotwithstanding the two police reports exculpating Tobias from the anomalies and the fact that the report of the pri"ate in"estigator, was, by its own terms, not yet complete, petitioners filed with the City *iscal of !anila a complaint for estafa through falsification of commercial documents, later amended to Iust estafa. #ubse8uently fi"e other criminal complaints were filed against Tobias, four of which were for estafa through *alsification of commercial document while the fifth was for of Article 614 ofV the @e"ised enal Code ,)isco"ering #ecrets Through #eizure of Correspondence/.l)*ph+,.-.t Two of these complaints were refiled with the >udge Ad"ocate :eneralVs ;ffice, which howe"er, remanded them to the fiscalVs office. All of the six criminal complaints were dismissed by the fiscal. etitioners appealed four of the fiscalVs resolutions dismissing the criminal complaints with the #ecretary of >ustice, who, howe"er, affirmed their dismissal. In the meantime, on >anuary 03, 013=, Tobias recei"ed a notice ,$xh. U*U/ from petitioners that his employment has been terminated effecti"e )ecember 0=, 0136. +hereupon, Tobias filed a complaint for illegal dismissal. The labor arbiter dismissed the complaint. ;n appeal, the Dational Labor @elations Commission ,DL@C/ re"ersed the labor arbiterVs decision. %owe"er, the #ecretary of Labor, acting on petitionersV appeal from the DL@C ruling, reinstated the labor arbiterVs decision. Tobias appealed the #ecretary of LaborVs order with the ;ffice of the resident. )uring the pendency of the appeal with said

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G.R. No. 81:6: A8%8!t :5, 1989 GLO4E MA)1AY )A4LE AND RAD*O )OR/., "n3 .ER4ER0 ). .ENDRY, petitioners, "s. 0.E .ONORA4LE )O2R0 OF A//EAL+ "n3 RE+0*020O M. 0O4*A+, respondents. )OR0E+, J.: ri"ate respondent @estituto !. Tobias was employed by petitioner :lobe !ac&ay Cable and @adio Corporation ,:L;'$ !ACLAC/ in a dual capacity as a purchasing agent and administrati"e assistant to the

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office, petitioners and pri"ate respondent Tobias entered into a compromise agreement regarding the latterVs complaint for illegal dismissal. Fnemployed, Tobias sought employment with the @epublic Telephone Company ,@$T$LC;/. %owe"er, petitioner %endry, without being as&ed by @$T$LC;, wrote a letter to the latter stating that Tobias was dismissed by :L;'$ !ACLAC due to dishonesty. ri"ate respondent Tobias filed a ci"il case for damages anchored on alleged unlawful, malicious, oppressi"e, and abusi"e acts of petitioners. etitioner %endry, claiming illness, did not testify during the hearings. The @egional Trial Court ,@TC/ of !anila, 'ranch IG, through >udge !anuel T. @eyes rendered Iudgment in fa"or of pri"ate respondent by ordering petitioners to pay him eighty thousand pesos , 24,444.44/ as actual damages, two hundred thousand pesos , 644,444.44/ as moral damages, twenty thousand pesos , 64,444.44/ as exemplary damages, thirty thousand pesos , =4,444.44/ as attorneyVs fees, and costs. etitioners appealed the @TC decision to the Court of Appeals. ;n the other hand, Tobias appealed as to the amount of damages. %owe"er, the Court of Appeals, an a decision dated August =0, 0123 affirmed the @TC decision in toto. etitionersV motion for reconsideration ha"ing been denied, the instant petition for re"iew on certiorari was filed. The main issue in this case is whether or not petitioners are liable for damages to pri"ate respondent. etitioners contend that they could not be made liable for damages in the lawful exercise of their right to dismiss pri"ate respondent. ;n the other hand, pri"ate respondent contends that because of petitionersV abusi"e manner in dismissing him as well as for the inhuman treatment he got from them, the etitioners must indemnify him for the damage that he had suffered. ;ne of the more notable inno"ations of the Dew Ci"il Code is the codification of Usome basic principles that are to be obser"ed for the rightful relationship between human beings and for the stability of the social order.U O@$ ;@T ;D T%$ C;)$ C;!!I##I;D ;D T%$ @; ;#$) CI9IL C;)$ ;* T%$ %ILI ID$#, p. =1P. The framers of the Code, see&ing to remedy the defect of the old Code which merely stated the effects of the law, but failed to draw out its spirit, incorporated certain fundamental precepts which were Udesigned to indicate certain norms that spring from the fountain of good conscienceU and which were also meant to ser"e as Uguides for human conduct OthatP should run as golden threads through society, to the end that law may approach its supreme ideal, which is the sway and dominance of IusticeU ,/d./ *oremost among these principles is that pronounced in Article 01 which pro"ides< Art. 01. $"ery person must, in the exercise of his rights and in the performance of his duties, act with Iustice, gi"e e"eryone his due, and obser"e honesty and good faith. This article, &nown to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which must be obser"ed not only in the exercise of oneVs rights but also in the performance of oneVs duties. These standards are the following< to act with IusticeA to gi"e e"eryone his dueA and to obser"e honesty and good faith. The law, therefore, recognizes a primordial limitation on all rightsA that in their exercise, the norms of human conduct set forth in Article 01 must be obser"ed. A right, though by itself legal because recognized or granted by law as such, may ne"ertheless become the source of some illegality. +hen a right is exercised in a manner which does not conform with the norms enshrined in Article 01 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held

responsible. 'ut while Article 01 lays down a rule of conduct for the go"ernment of human relations and for the maintenance of social order, it does not pro"ide a remedy for its "iolation. :enerally, an action for damages under either Article 64 or Article 60 would be proper. Article 64, which pertains to damage arising from a "iolation of law, pro"ides that< Art. 64. $"ery person who contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. %owe"er, in the case at bar, petitioners claim that they did not "iolate any pro"ision of law since they were merely exercising their legal right to dismiss pri"ate respondent. This does not, howe"er, lea"e pri"ate respondent with no relief because Article 60 of the Ci"il Code pro"ides that< Art. 60. Any person who wilfully causes loss or inIury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. This article, adopted to remedy the Ucountless gaps in the statutes, which lea"e so many "ictims of moral wrongs helpless, e"en though they ha"e actually suffered material and moral inIuryU O/d.P should U"ouchsafe ade8uate legal remedy for that untold number of moral wrongs which it is impossible for human foresight to pro"ide for specifically in the statutesU O/d. it p. -4A 0ee also D' ". CA, :.@. Do. L.63077, !ay 02,0132, 2= #C@A 6=3, 6-3P. In determining whether or not the principle of abuse of rights may be in"o&ed, there is no rigid test which can be applied. +hile the Court has not hesitated to apply Article 01 whether the legal and factual circumstances called for its application O0ee for e.g., 9elayo ". #hell Co. of the hil., Ltd., 044 hil. 025 ,0175/A D' ". CA, supra1:rand Fnion #upermar&et, Inc. ". $spino, >r., :.@. Do. L.-2674, )ecember 62, 0131, 1- #C@A 17=A AL ". CA, :.@. Do. L.-5772, >uly =0,0120,045 #C@A =10A Fnited :eneral Industries, Inc, ". aler :.@. Do. L.=4647, !arch 07,0126,006 #C@A -4-A @ubio ". CA, :.@. Do. 74100, August 60, 0123, 07= #C@A 02=P the 8uestion of whether or not the principle of abuse of rights has been "iolated resulting in damages under Article 64 or Article 60 or other applicable pro"ision of law, depends on the circumstances of each case. And in the instant case, the Court, after examining the record and considering certain significant circumstances, finds that all petitioners ha"e indeed abused the right that they in"o&e, causing damage to pri"ate respondent and for which the latter must now be indemnified. The trial court made a finding that notwithstanding the fact that it was pri"ate respondent Tobias who reported the possible existence of anomalous transactions, petitioner %endry Ushowed belligerence and told plaintiff ,pri"ate respondent herein/ that he was the number one suspect and to ta&e a one wee& "acation lea"e, not to communicate with the office, to lea"e his table drawers open, and to lea"e his &eys to said defendant ,petitioner %endry/U O@TC )ecision, p. 6A @ollo, p. 6=6P. This, petitioners do not dispute. 'ut regardless of whether or not it was pri"ate respondent Tobias who reported the anomalies to petitioners, the latterVs reaction towards the former upon unco"ering the anomalies was less than ci"il. An employer who harbors suspicions that an employee has committed dishonesty might be Iustified in ta&ing the appropriate action such as ordering an in"estigation and directing the employee to go on a lea"e. *irmness and the resol"e to unco"er the truth would also be expected from such employer. 'ut the high.handed treatment accorded Tobias by petitioners was certainly uncalled for. And this reprehensible attitude of petitioners was to continue when pri"ate respondent returned to wor& on Do"ember 64, 0136 after his one wee& forced lea"e. Fpon reporting for wor&, Tobias was confronted by %endry who said. UTobby, you are the croo& and swindler in this company.U Considering that the first report made by the police in"estigators was submitted

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only on )ecember 04, 0136 O#ee $xh. AP the statement made by petitioner %endry was baseless. The imputation of guilt without basis and the pattern of harassment during the in"estigations of Tobias transgress the standards of human conduct set forth in Article 01 of the Ci"il Code. The Court has already ruled that the right of the employer to dismiss an employee should not be confused with the manner in which the right is exercised and the effects flowing therefrom. If the dismissal is done abusi"ely, then the employer is liable for damages to the employee OBuisaba ". #ta. Ines.!elale 9eneer and lywood Inc., :.@. Do. L.=2422, August =4, 013-, 72 #C@A 330A 0ee also hilippine @efining Co., Inc. ". :arcia, :.@. Do. L.60230, #eptember 63,0155, 02 #C@A 043P Fnder the circumstances of the instant case, the petitioners clearly failed to exercise in a legitimate manner their right to dismiss Tobias, gi"ing the latter the right to reco"er damages under Article 01 in relation to Article 60 of the Ci"il Code. 'ut petitioners were not content with Iust dismissing Tobias. #e"eral other tortious acts were committed by petitioners against Tobias after the latterVs termination from wor&. Towards the latter part of >anuary, 013=, after the filing of the first of six criminal complaints against Tobias, the latter tal&ed to %endry to protest the actions ta&en against him. In response, %endry cut short TobiasV protestations by telling him to Iust confess or else the company would file a hundred more cases against him until he landed in Iail. %endry added that, UCou *ilipinos cannot be trusted.U The threat unmas&ed petitionerVs bad faith in the "arious actions ta&en against Tobias. ;n the other hand, the scornful remar& about *ilipinos as well as %endryVs earlier statements about Tobias being a Ucroo&U and UswindlerU are clear "iolations of VTobiasV personal dignity O#ee Article 65, Ci"il CodeP. The next tortious act committed by petitioners was the writing of a letter to @$T$LC; sometime in ;ctober 013-, stating that Tobias had been dismissed by :L;'$ !ACLAC due to dishonesty. 'ecause of the letter, Tobias failed to gain employment with @$T$LC; and as a result of which, Tobias remained unemployed for a longer period of time. *or this further damage suffered by Tobias, petitioners must li&ewise be held liable for damages consistent with Article 6035 of the Ci"il Code. etitioners, howe"er, contend that they ha"e a Umoral, if not legal, duty to forewarn other employers of the &ind of employee the plaintiff ,pri"ate respondent herein/ was.U O etition, p. 0-A @ollo, p. 07P. etitioners further claim that Uit is the accepted moral and societal obligation of e"ery man to ad"ise or warn his fellowmen of any threat or danger to the latterVs life, honor or property. And this includes warning oneVs brethren of the possible dangers in"ol"ed in dealing with, or accepting into confidence, a man whose honesty and integrity is suspectU O/d.P. These arguments, rather than Iustify petitionersV act, re"eal a seeming obsession to pre"ent Tobias from getting a Iob, e"en after almost two years from the time Tobias was dismissed. *inally, there is the matter of the filing by petitioners of six criminal complaints against Tobias. etitioners contend that there is no case against them for malicious prosecution and that they cannot be Upenalized for exercising their right and prerogati"e of see&ing Iustice by filing criminal complaints against an employee who was their principal suspect in the commission of forgeries and in the perpetration of anomalous transactions which defrauded them of substantial sums of moneyU O etition, p. 04, @ollo, p. 00P. +hile sound principles of Iustice and public policy dictate that persons shall ha"e free resort to the courts for redress of wrongs and "indication of their rights O'uena"entura ". #to. )omingo, 04= hil. 6=1 ,0172/P, the right to institute criminal prosecutions can not be exercised maliciously and in bad faith O9entura ". 'ernabe, :.@. Do. L.65354, April =4, 0130, =2 #C@A 7230.P %ence, in 2utuk 3. &anila !lectric Co., :.@. Do. L. 0=405, !ay =0, 0150, 6 #C@A ==3, the Court held that the right to file criminal complaints should not be used as a weapon to force an alleged debtor to pay an indebtedness. To do so would be a clear per"ersion of the function of the criminal processes and of the courts of Iustice. And in 4a*pia CA, :.@. Do. L.644-3, >une =4, 0153. 64 #C@A 7=5 the Court upheld the Iudgment against the petitioner for actual and moral damages and attorneyVs fees after ma&ing a finding that petitioner, with persistence, filed at least six criminal complaints against respondent, all of which were dismissed.

To constitute malicious prosecution, there must be proof that the prosecution was prompted by a design to "ex and humiliate a person and that it was initiated deliberately by the defendant &nowing that the charges were false and groundless O!anila :as Corporation ". CA, :.@. Do. L.--014, ;ctober =4,0124, 044 #C@A 546P. Concededly, the filing of a suit by itself, does not render a person liable for malicious prosecution OInhelder Corporation ". CA, :.@. Do. 76=72, !ay =4012=066 #C@A 735P. The mere dismissal by the fiscal of the criminal complaint is not a ground for an award of damages for malicious prosecution if there is no competent e"idence to show that the complainant had acted in bad faith O#ison ". )a"id, :.@. Do. L.00652, >anuary 62,0150, 0 #C@A 54P. In the instant case, howe"er, the trial court made a finding that petitioners acted in bad faith in filing the criminal complaints against Tobias, obser"ing that< x x x )efendants ,petitioners herein/ filed with the *iscalVs ;ffice of !anila a total of six ,5/ criminal cases, fi"e ,7/ of which were for estafa thru falsification of commercial document and one for "iolation of Art. 614 of the @e"ised enal Code Udisco"ering secrets thru seizure of correspondence,U and all were dismissed for insufficiency or lac& of e"idence.U The dismissal of four ,-/ of the cases was appealed to the !inistry of >ustice, but said !inistry in"ariably sustained the dismissal of the cases. As abo"e ad"erted to, two of these cases were refiled with the >udge Ad"ocate :eneralVs ;ffice of the Armed *orces of the hilippines to railroad plaintiffs arrest and detention in the military stoc&ade, but this was frustrated by a presidential decree transferring criminal cases in"ol"ing ci"ilians to the ci"il courts. x x x To be sure, when despite the two ,6/ police reports embodying the findings of Lt. )ioscoro Tagle, Chief )ocument $xaminer of the !anila olice )epartment, clearing plaintiff of participation or in"ol"ement in the fraudulent transactions complained of, despite the negati"e results of the lie detector tests which defendants compelled plaintiff to undergo, and although the police in"estigation was Ustill under follow.up and a supplementary report will be submitted after all the e"idence has been gathered,U defendants hastily filed six ,5/ criminal cases with the city *iscalVs ;ffice of !anila, fi"e ,7/ for estafa thru falsification of commercial document and one ,0/ for "iolation of Art. 614 of the @e"ised enal Code, so much so that as was to be expected, all six ,5/ cases were dismissed, with one of the in"estigating fiscals, Asst. *iscal de :uia, commenting in one case that, UIndeed, the haphazard way this case was in"estigated is e"ident. $"ident li&ewise is the flurry and haste in the filing of this case against respondent Tobias,U there can be no mista&ing that defendants would not but be moti"ated by malicious and unlawful intent to harass, oppress, and cause damage to plaintiff. x x x O@TC )ecision, pp. 7.5A @ollo, pp. 6=7.6=5P. In addition to the obser"ations made by the trial court, the Court finds it significant that the criminal complaints were filed during the pendency of the illegal dismissal case filed by Tobias against petitioners. This explains the haste in which the complaints were filed, which the trial court earlier noted. 'ut petitioners, to pro"e their good faith, point to the fact that only six complaints were filed against Tobias when they could ha"e allegedly filed one hundred cases, considering the number of anomalous transactions committed against :L;'$ !ACLAC. %owe"er, petitionersV good faith is belied by the threat made by %endry after the filing of the first complaint that one hundred more cases would be filed against Tobias. In effect, the possible filing of one hundred more cases was made to hang li&e the sword of )amocles o"er the head of Tobias. In

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fine, considering the haste in which the criminal complaints were filed, the fact that they were filed during the pendency of the illegal dismissal case against petitioners, the threat made by %endry, the fact that the cases were filed notwithstanding the two police reports exculpating Tobias from in"ol"ement in the anomalies committed against :L;'$ !ACLAC, coupled by the e"entual dismissal of all the cases, the Court is led into no other conclusion than that petitioners were moti"ated by malicious intent in filing the six criminal complaints against Tobias. etitioners next contend that the award of damages was excessi"e. In the complaint filed against petitioners, Tobias prayed for the following< one hundred thousand pesos , 044,444.44/ as actual damagesA fifty thousand pesos , 74,444.44/ as exemplary damagesA eight hundred thousand pesos , 244,444.44/ as moral damagesA fifty thousand pesos , 74,444.44/ as attorneyVs feesA and costs. The trial court, after ma&ing a computation of the damages incurred by Tobias O0ee @TC )ecision, pp. 3.2A @ollo, pp. 07-.0770, awarded him the following< eighty thousand pesos , 24,444.44/ as actual damagesA two hundred thousand pesos , 644,444.44/ as moral damagesA twenty thousand pesos , 64,444.44/ as exemplary damagesA thirty thousand pesos , =4,444.44/ as attorneyVs feesA and, costs. It must be underscored that petitioners ha"e been guilty of committing se"eral actionable tortious acts, i.e., the abusi"e manner in which they dismissed Tobias from wor& including the baseless imputation of guilt and the harassment during the in"estigationsA the defamatory language heaped on Tobias as well as the scornful remar& on *ilipinosA the poison letter sent to @$T$LC; which resulted in TobiasV loss of possible employmentA and, the malicious filing of the criminal complaints. Considering the extent of the damage wrought on Tobias, the Court finds that, contrary to petitionersV contention, the amount of damages awarded to Tobias was reasonable under the circumstances. Cet, petitioners still insist that the award of damages was improper, in"o&ing the principle of damnum abs8uein5uria. It is argued that UOtPhe only probable actual damage that plaintiff ,pri"ate respondent herein/ could ha"e suffered was a direct result of his ha"ing been dismissed from his employment, which was a "alid and legal act of the defendants.appellants ,petitioners herein/.l)*ph+,.-.t U O etition, p. 03A @ollo, p. 02P. According to the principle of damnum a"sque in5uria, damage or loss which does not constitute a "iolation of a legal right or amount to a legal wrong is not actionable O$scano ". CA, :.@. Do. L.-3643, #eptember 67, 0124, 044 #C@A 013A #ee also :ilchrist ". Cuddy 61 hil, 7-6 ,0107/A The 'oard of Li8uidators ". Lalaw, :.@. Do. L.02247, August 0-, 0153, 64 #C@A 123P. This principle finds no application in this case. It bears repeating that e"en granting that petitioners might ha"e had the right to dismiss Tobias from wor&, the abusi"e manner in which that right was exercised amounted to a legal wrong for which petitioners must now be held liable. !oreo"er, the damage incurred by Tobias was not only in connection with the abusi"e manner in which he was dismissed but was also the result of se"eral other 8uasi.delictual acts committed by petitioners. etitioners next 8uestion the award of moral damages. %owe"er, the Court has already ruled in 6assmer v. 3ele7, :.@. Do. L.64421, )ecember 65, 015-, 06 #C@A 5-2, 57=, that OpPer express pro"ision of Article 6601 ,04/ of the Dew Ci"il Code, moral damages are reco"erable in the cases mentioned in Article 60 of said Code.U %ence, the Court of Appeals committed no error in awarding moral damages to Tobias. Lastly, the award of exemplary damages is impugned by petitioners. Although Article 66=0 of the Ci"il Code pro"ides that UOiPn 8uasi.delicts, exemplary damages may be granted if the defendant acted with gross negligence,U the Court, in 8ulueta v. Pan American 6orld Air*a$s, /nc., :.@. Do. L. 62721, >anuary 2, 013=, -1 #C@A 0, ruled that if gross negligence warrants the award of exemplary damages, with more reason is its imposition Iustified when the act performed is deliberate, malicious and tainted with bad faith. As in the 8uluetacase, the nature of the wrongful acts shown to ha"e been committed by petitioners against Tobias is sufficient basis for the award of exemplary damages to the latter.

+%$@$*;@$, the petition is hereby )$DI$) and the decision of the Court of Appeals in CA.:.@. C9 Do. 41477 is A**I@!$). #; ;@)$@$). G.R. No. 85C6C October 3, 1991 DAV*D /. LLOREN0E, petitioner, "s. 0.E +AND*GAN4AYAN ,0.*RD D*V*+*ON-, "n3 /EO/LE OF 0.E /.*L*//*NE+, respondents. +AM*EN0O, J.:p The petitioner 8uestions the )ecision of the #andiganbayan D holding him ci"illy liable in spite of an ac8uittal. The facts are not disputed< Atty. Llorente was employed in the CA, a public corporation ,#ec. 0, ) 0-52/ from 0137 to August =0, 0125, when he resigned. %e occupied the positions of Assistant Corporate #ecretary for a year, then Corporate Legal Counsel until Do"ember 6, 0120, and, finally, )eputy Administrator for Administrati"e #er"ices, *inance #er"ices, Legal Affairs )epartments. ... As a result of a massi"e reorganization in 0120, hundreds of CA employees resigned effecti"e ;ctober =0, 0120. Among them were !r. Curio, !rs. erez, !r. Azucena, and !rs. >a"ier ,T#D, ;ct. 66Q23, p. 6A $xhs. !.6, D.0, and ;.0/. They were all re8uired to apply for CA clearances in support of their gratuity benefits ,$xhs. C, !.6, D.0, and 4.0/. Condition ,a/ of the clearance pro"ided< The clearance shall be signed by the CA officers concemed only when there is no item appearing under U $D)ID: ACC;FDTA'ILITCU or after e"ery item pre"iously entered thereunder is fully settled. #ettlement thereof shall be written in @$) in&. ,$xhs. ) or ).0 and 0.'/ After the clearance was signed by the CA officers concerned, it was to be appro"ed, first, by Atty. Llorente, in the case of a ran&.and.file employee, or by Col. )uefias, the acting administrator, in the case of an officer, and then by Atty. @odriguez, the corporate auditor ... Dotwithstanding Condition ,a/ Iust 8uoted, the clearances of !rs erez and !r. Azucena both dated ;ctober =4, 0120, were fa"orably acted upon by the C A officers concerned, including !rs. #otto, acting for the accounting di"ision, e"en if the clearances showed they had pending accountabilities to the :#I# and the FC ', and subse8uently appro"ed by Attys. Llorente and @odriguez ,$xhs. ! and D/. Thereafter, the "ouchers for their gratuity benefits, also indicating their outstanding obligations were appro"ed, among others, by Atty Llorente, and their gratuity benefits released to them after deducting those accountabilities. ... The clearanceof !rs. >a"ier of the same date of ;ctober =4, 0110 was also signed by all CA officers concerned, including !rs. #otto e"en though the former had unsettled obligations noted thereon, vi7V#I# loan 7,=23.44 and FC ' car loan 01,347.44, or a total of 67,416.44, and later on appro"eed by Col. )ueWas, !rs >a"ier being an officer, and Atty. @odriguez U$xh. ,;/U. #imilari" the, "oucher of !rs >a"ier for her

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gratuity benefits li&ewise recited her accountabilities of 67,416.44 plus 16.444.44, which was handwritten. 'oth accounts were deducted from her gratuity benefits, and the balance released to her on Do"ember 05, 0120. The "oucher passed post.audit by Atty. @odriguez on )ecember 0, 0120 ,$xhs. L, L.0, L.6, and L.=/. The said 16,444.44 was the disallowed portion of the cash ad"ances recei"ed by !r. Curio in connection with his duties as Usuper cargoU in the distribution of seed nuts throughout the country. %e recei"ed them through and in the name of !rs. >a"ier from the FC '. +hen the amount was disallowed, the FC ' withheld from the CA certain recei"ablesA the latter, in turn, deducted the same amount from the gratuity benefits of !rs. >a"ier, she being primarily liable therefor ,$xhs, L, L.0, L.6, and L.=/, At the time of the deduction, the additional li8uidation papers had already been submitted and were in process. >ust in case she would not be successful in ha"ing the entire amount wiped out, she re8uested !r. Curio, who admittedly recei"ed it, to execute, as he did, an affida"it dated Do"ember 65, 0120, in which he assumed whate"er portion thereof might not be allowed ... The clearance of !r. Curio dated Do"ember -,0120, ,$xh. ) or ).0/ li&ewise fa"orably passed all officers concerned, including !rs. #otto, the latter signing despite the notation handwritten on )ecember 2, 0120, that !r. Curio had pending accountabilities, namely< :#I# loan 6,01=.3-, 640 accounts recei"able =,213.37, and FC ' loan =,56=.-1, or a total of 04,30-.32. %owe"er, when the clearance was submitted to Atty. Llorente for appro"al, he refused to appro"e it. *or this reason, the clearance was held up in his office and did not reach Atty. @odriguez, ... The reason gi"en by Atty. Llorente was that when the clearance was presented to him on )ecember 2, 0120, he was already aware of the affida"it dated Do"ember 65, 0120, in which !r. Curio assumed to pay any residual liability for the disallowed cash ad"ances, which at the time, )ecember 2, 0120, stood at 16,444.44 ,$xhs. 6 and 6. A/. !oreo"er, !r. Curio had other pending obligations noted on his clearance totalling l4,30-.12 ,$xh. 0.a/. To Iustify his stand, Atty. Llorente in"o&ed Condition ,a/ of the clearance ,$xhs. ) and I.'/, which, he said, was U"ery stringentU and could not be interpreted in any other way ... ;n )ecember 0, 0126, !r. Curio brought the matter of his unappro"ed clearance to Col. )ueWas ,$xh. :/, who referred it to the Legal )epartment, which was under Atty. Llorente as )eputy Administrator for legal affairs. After follow.up in that department, !r. Curio recei"ed the answer of Col. )ueWas dated *ebruary 00, 012=, saying that the clearance was being withheld until the former settled his alleged accountability for 16,444.44 reduced already to 75,444.44 ,$xh. I/. !r. Curio ele"ated the matter to the Chairman of the CA 'oard, who indorsed it to Col. )ueWas, who, in turn, sent it to the Legal )epartment. This time the latter, through its !anager, !anuel *. astor, >r., first cousin of Atty. Llorente, submitted a formal report under date of August 0-, 0125, to the CA Chairman, Iustifying the action ta&en by Atty. Llorente and Col. )ueWas ,$xh. 06/. The CA Chairman did not respond in writing, but ad"ised !r. Curio to wait for the resolution of the Tanodbayan with which he ,!r. Curio/ had filed this case initially against Atty. Llorente and, later on, against Col. )uerias also. ;n August =0, 0125, Atty. Llorente resigned from the CAA the clearance, howe"er, could not be

issued because, according to the CA Corporate Legal Counsel, Arthur >. Li8uate, the CA did not want to preempt the Tanodbayan. ;n Do"ember 06, 0125, the latter decided to institlite this case in court ... Dine days thereafter, or on Do"ember 60, 0125, !r. Curio accomplished another clearance, which no longer imposed Condition ,a/ of his earlier clearance ,$xh. $/. The new clearance was appro"ed, e"en if he still had pending accountabilities, totalling 04,30-.32 that had remained unsettled since )ecember 0120. %is "oucher was also appro"ed, and his gratuity benefits paid to him in the middle of )ecember 0125, after deducting those obligations ,$xh. */. Dothing was mentioned anymore about the disallowed cash ad"ances of 16,444.44, which had been reduced to 77,444.44 ... 'etween )ecember 0120 and )ecember 0125, !r. Curio failed to get gainful employmentA as a result, his family literally went hungry, In 0120, he applied for wor& with the hilippine Cotton Authority, but was refused, because he could not present his CA clearance. The same thing happened when he sought employment with the hilippine *ish !ar&eting Administration in >anuary 0126. In both prospecti"e employers, the item applied for was 6,744.44 a month. At that time, he was only about -7 years old and still competiti"e in the Iob mar&et. 'ut in 0125, being already past 74 years, he could no longer be hired permanently, there being a regulation to that effect. %is present employment with the hilippine orts Authority, which started on !arch 05, 0123, was casual for that reason. %ad his gratuity benefits been paid in 0120, he would ha"e recei"ed a bigger amount, considering that since then interest had accrued and the foreign exchange rate of the peso to the dollar had gone up ... 1 ;n )ecember 04, 0125, an Information for "iolation of #ection =,c/ of the Anti.:raft and Corrupt ractices Act was filed against the petitioner< That on or about )ecember 2, 0120 andQor subse8uent thereto, in Buezon City, hilippines, and within the Iurisdiction of this %onorable Court, accused )a"id astor Llorente, )eputy Administrator for the hilippine Coconut Authority , CA/, and as such was empowered among others to appro"e clearances of employees thereat, ta&ing ad"antage of his position, through e"ident bad faith, did then and there, wilfully and unlawfully refuse to issue a certificate of clearance to %erminigildo !. Curio, an employee thereat, who was forced to resign as a result of the abolition of his item pursuant to the 0120 reorganization of the CA, resulting in his depri"ation to recei"e his gratuity benefits amounting to 61,27-.14, and to secure employment with other offices to his damage and preIudice, and that of the public ser"ice. C;DT@A@C T; LA+. !anila, hilippines, )ecember 04, 0125. : As indicated at the outset, the #andiganbayan ac8uitted the petitioner in the absence of any e"idence that he acted in bad faith. 3 The #andiganbayan cited three considerations that precluded bad faith< Page82

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*irst, when Atty. Llorente withheld fa"orable action on the clearance on and after )ecember 2, 0120, there was still the possibility, remote though it was when "iewed after the fact, that the accountability, which !rs. >a"ier was primarily liable therefor and which was fully settled by deduction from her gratuity benefits on Do"ember 05, 0120 ,$xhs. L, L.0, L.6, and L.=/, would be reinstated and charged directly to !r. Curio, for the latter executed on Do"ember 65, 0120, an affida"it assuming responsibility for the obligation to the extent of the amount finally disallowed, and the affida"it was on )ecember 2, 0120, already pending consideration by the CA management ,$xhs. 6 and 6.A/. #econd, Atty. Llorente was appointed )eputy Administrator for administrati"e ser"ices, finance ser"ices, and legal affairs departments only on Do"ember 6,0120 ,T#D, !arch 1Q23, p. =/. 'eing new in his Iob, it was but natural that he was zealous in the performance of his functions in fact, o"erzealous in the protection of the CA interests, e"en if that protection was not necessary, as the 16,444.44 accountability had already been paid ,#ee $xh. 06, -th paragraph/. *inally, Atty. Llorente was officiously, though incidentally, ta&ing care also of the interest of !rs. >a"ier who, Iustice and e8uity demanded, should not be made to shoulder the 16,444.44 unli8uidated cash ad"ances, for the reason that it was !r. Curio who admittedly spent them or who, at the "ery least, should be able to get reimbursement of what she paid, totally or partially, from his gratuity benefits ,#ee $xh. 7, pp. 6.= /. C The #andiganbayan, as we also indicated earlier, too& the petitioner to tas& ci"illy, and ordered him to pay Ucompensatory damagesU in the sum of 14,444.44. According to the #andiganbayan, the petitioner was guilty nonetheless of abuse of right under Article 01 of the Ci"il Code and as a public officer, he was liable for damages suffered by the aggrie"ed party ,under Article 63/. The petitioner claims that the #andiganbayanVs )ecision is erroneous e"en if the #andiganbayan ac8uitted him therein, because he was ne"er in bad faith as indeed found by the #andiganbayan. Fnder the 0127 @ules of Criminal rocedure, amending @ules 004 through 063 of the @ules of Court, the Iudgment of the court shall include, in case of ac8uittal, and unless there is a clear showing that the act from which the ci"il liability might arise did not exist, Ua finding on the ci"il liability of the accused in fa"or of the offended party.U 5 The rule is based on the pro"isions of substanti"e law, 6 that if ac8uittal proceeds from reasonable doubt, a ci"il action, lies nonetheless. The challenged Iudgment found that the petitioner, in refusing to issue a certificate of clearance in fa"or of the pri"ate offended party, %erminigildo Curio, did not act with Ue"ident bad faith,U one of the elements of #ection =,e/ of @epublic Act Do. =201. 7 +e agree with tile Iudgment, insofar as it found lac& of e"ident bad faith by the petitioner, for the reasons cited therein basicall", because the petitioner was acting within the bounds of law in refusing to clear Curio although UOtPhe practice was that the clearance was ne"ertheless appro"ed, and then the amount of the unsettled obligation was deducted from the gratuity benefits of the employee.U 8 +e also agree with the #andiganbaya ,although the #andiganbayan did not say it/ that although the petitioner did not act with e"ident bad faith, he acted with bad faith ne"ertheless, for which he should respond for damages.

The records show that the office practice indeed in the hilippine Coconut Authority was to clear the employee ,retiree/ and deduct his accountabilities from his gratuity benefits. There seems to be no debate about the existence of this practice ,the petitioner admitted it later on/ and in fact, he cleared three employees on the condition that their obligations should be deducted from their benefits. 9 +e 8uote< Confronted with these e"idence ,sic/, Atty. Llorente conceded, albeit grudgingly, the existence of the practice by the accounting di"ision of not complying with Condition ,a/. %e, howe"er, claimed that he learned of the practice only during the trial of the case and that he must ha"e inad"ertently appro"ed the clearances of !rs. erez, !r. Azucena, and possibly others who were similarly situated ,T#D, !arch 1Q22,pp. -.7/. This the e"idence belies. (irst, he himself testified that when the clearance of !r. Curio was presented to him in )ecember 0120, it already bore the signature of !rs. #otto of the accounting di"ision and the notation set opposite her name about the outstanding accountabilities of !r. CurioA but he ,Atty. Llorente/ significantly did not as& her why she signed the clearance ,T#D, Do". 6-Q23, pp. 6-.67/. 0econd, in that month, Atty. Llorente appro"ed !rs. erezVs and !r. AzucenaVs "ouchers showing that hey has pending obligations to the :#I# and the FC ', which were being deducted from their gratuity benefits. Attached to those "ouchers were the clearances as supporting documents ,$xhs. !.6 and D.0A T#D, )ec. 3Q23, pp. 0=,6=/. And third, in the same month, Atty. Llorente was already aware of the cae of !rs. >a"ier whose clearance and "oucher were, according to him, preciselywithheld because of her unsettled accountability for the cash ad"ances of 16,444.44, but here later on gi"en due courseA and her gratuity benefits released on Do"ember 05, 0120, minus that amount ,T#D, Do". 6-Q23, pp. =0.=6A $xhs. L, L.0, L.6 and L.=/. The cash ad"ances of 16,444.44 were the primary obligation of !rs. >a"ier, since they were secured through her and in her name from the FC '. That was why they were charged to and deducted from, her gratuity benefits. Conse8uently, as early as that date and in so far as the CA and the FC ' were concerned, the accountability was already fully paid. The assumption of residual liability by !r. Curio for the cash ad"ances on Do"ember 65, 0120, was a matter between him and !rs. >a"ier ,$xhs. 6 and 6.A/. 1E The general rule is that this Court is bound by the findings of fact of the #andiganbayan. 11 As we said, the acts of the petitioner were legal ,that is, pursuant to procedures/, as he insists in this petition, yet it does not follow, as we said, that his acts were done in good faith. *or emphasis, he had no "alid reason to Ugo legalU all of a sudden with respect to !r. Curio, since he had cleared three employees who, as the #andiganbayan found, Uwere all similarly circumstanced in that they all had pending obligations when, their clearances were filed for consideration, warranting similar official action.U 1: The Court is con"inced that the petitioner had unIustly discriminated against !r. Curio. It is no defense that the petitioner was moti"ated by no ill.will ,a grudge, according to the #andiganbayan/, since the facts spea& for themsel"es. It is no defense either that he was, after all, complying merely with legal procedures since, as we indicated, he was not as strict with respect to the three retiring other employees. There can be no other logical conclusion that he was acting unfairly, no more, no less, to !r. Curio.

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It is the essence of Article 01 of the Ci"il Code, under which the petitioner was made to pay damages, together with Article 63, that the performance of duty be done with Iustice and good faith. In the case of 3ela$o vs. 0hell Co. of the Philippines, 13 *e held the defendant liable under Article 01 for disposing of its propert" a perfectly legal act in order to escape the reach of a creditor. In two fairly more recent cases, 0evilla vs. Court of Appeals 1Cand 3alen7uela vs. Court of Appeals, 15 we held that a principal is liable under Article 01 in terminating the agency again, a legal act when terminating the agency would depri"e the agent of his legitimate business. +e belie"e that the petitioner is liable under Article 01. The Court finds the award of 14,444.44 to be Iustified b" Article 6646 of the Ci"il Code, which holds the defendant liable for all Unatural and probableU damages. %ennenegildo Cunct presented e"idence that as a conse8uence of the petitionerVs refusal to clear him, he failed to land a Iob at the hilippine Cotton Authority and hilippine *irst !ar&eting Authority. %e also testified that a Iob in either office would ha"e earned him salary of 6,744.44 a month, or 074,444.44 in fi"e years. )educting his probable expenses of reasonably about 0,444.44 a month or 54,444.44 in fi"e years, the petitioner owes him a total actual damages of 14,444.44 +%$@$*;@$, premises considered, the etition is )$DI$). Do pronouncement as to costs. IT I# #; ;@)$@$). G.R. No. 1:E639. +e#te7ber :5, 1998 4/* E6/RE++ )ARD )OR/ORA0*ON, petitioner, vs. )O2R0 OF A//EAL+ "n3 R*)ARDO 9. MARA+*GAN,respondents. 1A/2NAN, J.> The 8uestion before this Court is whether pri"ate respondent can reco"er moral damages arising from the cancellation of his credit card by petitioner credit card corporation. The facts of the case are as stated in the decision of the respondent court,O0P to wit< The case arose from the dishonor of the credit card of the plaintiff Atty. @icardo >. !arasigan by Cafe Adriatico, a business establishment accredited with the defendant.appellant ' I $xpress Card Corporation ,'$CC for bre"ity/ on )ecember 2, 0121 when the plaintiff entertained some guests thereat. The records of this case show that plaintiff, who is a lawyer by profession was a complimentary member of '$CC from *ebruary 0122 to *ebruary 0121 and was issued Credit Card Do. 044. 406.77=- with a credit limit of =,444.44 and with a monthly billing e"ery 63th of the month ,$xh. D/, subIect to the terms and conditions stipulated in the contract ,$xh. 0.b/. %is membership was renewed for another year or until *ebruary 0114 and the credit limit was increased to 7,444.44 ,$xh. A/. The plaintiff oftentimes exceeded his credit limits ,$xhs. I, I.0 to I.06/ but this was ne"er ta&en against him by the defendant and e"en his mode of paying his monthly bills in chec& was tolerated. Their contractual relations went on smoothly until his statement of account for ;ctober, 0121 amounting to 2,123.2- was not paid in due time. The plaintiff admitted ha"ing inad"ertently failed to pay his account for the said month because he was in Buezon pro"ince attending to some professional and personal commitments. %e was informed by his secretary that defendant was demanding immediate payment of his outstanding account, was re8uiring him to issue a chec& for 07,444.44 which would include his future bills, and was threatening to suspend his credit card. laintiff issued *ar $ast 'an& and Trust Co.

Chec& Do. -1-537 in the amount of 07,444.44, postdated )ecember 07, 0121 which was recei"ed on Do"ember 6=, 0121 by Tess Lorenzo, an employee of the defendant ,$xhs. > and >. 0/, who in turn ga"e the said chec& to >eng Angeles, a co.employee who handles the account of the plaintiff. The chec& remained in the custody of >eng Angeles. !r. @oberto !ani8uiz, head of the collection department of defendant was formally informed of the postdated chec& about a wee& later. ;n Do"ember 62, 0121, defendant ser"ed plaintiff a letter by ordinary mail informing him of the temporary suspension of the pri"ileges of his credit card and the inclusion of his account number in their Caution List. %e was also told to refrain from further use of his credit card to a"oid any incon"enienceQembarrassment and that unless he settles his outstanding account with the defendant within 7 days from receipt of the letter, his membership will be permanently cancelled ,$xh. =/. There is no showing that the plaintiff recei"ed this letter before )ecember 2, 0121. Confident that he had settled his account with the issuance of the postdated chec&, plaintiff in"ited some guests on )ecember 2, 0121 and entertained them at CafX Adriatico. +hen he presented his credit card to CafX Adriatico for the bill amounting to 3=7.=6, said card was dishonored. ;ne of his guests, !ary $llen @ingler, paid the bill by using her own credit card, a Fniban&ard ,$xhs. !, !.0 and !.6/. In a letter addressed to the defendant dated )ecember 06, 0121, plaintiff re8uested that he be sent the exact billing due him as of )ecember 07, 0121, to withhold the deposit of his postdated chec& and that said chec& be returned to him because he had already instructed his ban& to stop the payment thereof as the defendant "iolated their agreement that the plaintiff issue the chec& to the defendant to co"er his account amounting to only 2,123.2- on the condition that the defendant will not suspend the effecti"ity of the card ,$xh. )/. A letter dated )ecember 05, 0121 was sent by the plaintiff to the manager of *$'TC, @amada 'ranch, !anila re8uesting the ban& to stop the payment of the chec& ,$xhs. $, $.0/. Do reply was recei"ed by plaintiff from the defendant to his letter dated )ecember 06, 0121. laintiff sent defendant another letter dated !arch 06, 0114 reminding the latter that he had long rescinded and cancelled whate"er arrangement he entered into with defendant and re8uesting for his correct billing, less the improper charges and penalties, and for an explanation within fi"e ,7/ days from receipt thereof why his card was dishonored on )ecember 2, 0121 despite assurance to the contrary by defendantVs personnel.in.charge, otherwise the necessary court action shall be filed to hold defendant responsible for the humiliation and embarrassment suffered by him ,$xh. */. laintiff alleged further that after a few days, a certain Atty. Albano, representing himself to be wor&ing with office of Atty. Lopez, called him in8uiring as to how the matter can be threshed out extraIudicially but the latter said that such is a serious matter which cannot be discussed o"er the phone. The defendant ser"ed its final demand to the plaintiff dated !arch 60, 0114 re8uiring him to pay in full his o"erdue account, including stipulated fees and charges, within 7 days from receipt thereof or face court action also to replace the postdated chec& with cash within the same period or face criminal suit for "iolation of the 'ouncing Chec& Law ,$xh. :Q$xh. 0=/. The plaintiff, in a reply letter dated April 7, 0114 ,$xh. %/, demanded defendantVs compliance with his re8uest in his first letter dated !arch 06, 0114 within three ,=/ days from receipt, otherwise the plaintiff will file a case against them, x x x.O6P Thus, on !ay 3, 0114 pri"ate respondent filed a complaint for damages against petitioner before the @egional Trial Court of !a&ati, 'ranch 074, doc&eted as Ci"il Case Do. 14.003-. After trial, the trial court ruled for pri"ate respondent, finding that herein petitioner abused its right in contra"ention of Article 01 of the Ci"il Code.O=P The dispositi"e portion of the decision reads<

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+herefore, Iudgment is hereby rendered ordering the defendant to pay plaintiff the following<

0. 044,444.44 as moral damagesA 6. 74,444.44 as exemplary damagesA and =. 64,444.44 by way of attorneyVs fees. ;n the other hand, plaintiff is ordered to pay defendant its outstanding obligation in the amount of 0-,-=1.-0, amount due as of )ecember 07, 0121.O-P The trial courtVs ruling was based on its findings and conclusions, to wit< There is no 8uestion that plaintiff had been in default in the payment of his billings for more than two months, prompting defendant to call him and reminded him of his obligation. Fnable to personally tal& with him, this Court is con"inced that somehow one or another employee of defendant called him up more than once. %owe"er, while it is true that, as indicated in the terms and conditions of the application for ' I credit card, upon failure of the cardholder to pay his outstanding obligation for more than thirty ,=4/ days, the defendant can automatically suspend or cancel the credit card, that reser"ed right should not ha"e been abused, as it was in fact abused, in plaintiffVs case. +hat is more peculiar here is that there ha"e been admitted communications between plaintiff and defendant prior to the suspension or cancellation of plaintiffVs credit card and his inclusion in the caution list. %owe"er, nowhere in any of these communications was there e"er a hint gi"en to plaintiff that his card had already been suspended or cancelled. In fact, the Court obser"ed that while defendant was trying its best to persuade plaintiff to update its account and pay its obligation, it had already ta&en steps to suspendQcancel plaintiffVs card and include him in the caution list. +hile the Court admires defendantVs diplomacy in dealing with its clients, it cannot help but frown upon the bac&handed way defendant dealt with plaintiffVs case. *or despite Tess LorenzoVs denial, there is reason to belie"e that plaintiff was indeed assured by defendant of the continued honoring of his credit card so long as he pays his obligation of 07,444.44. +orst, upon receipt of the postdated chec&, defendant &ept the same until a few days before it became due and said chec& was presented to the head of the collection department, !r. !ani8uiz, to ta&e steps thereon, resulting to the embarrassing situation plaintiff found himself in on )ecember 2, 0121. !oreo"er, !r. !ani8uiz himself admitted that his re8uest for plaintiff to replace the chec& with cash was not because it was a postdated chec& but merely to tally the payment with the account due. Li&ewise, the Court is not persuaded by the sweeping denials made by Tess Lorenzo and her claim that her only participation was to recei"e the subIect chec&. %er immediate superior, !r. !ani8uiz testified that he had instructed Lorenzo to communicate with plaintiff once or twice to re8uest the latter to replace the 8uestioned chec& with cash, thus gi"ing support to the testimony of plaintiffVs witness, )olores Buizon, that it was one Tess Lorenzo who she had tal&ed o"er the phone regarding plaintiffVs account and plaintiffVs own statement that it was this woman who assured him that his card has not yet been and will not be cancelledQsuspended if he would pay defendant the sum of 07,444.44. Dow, on the issue of whether or not upon receipt of the subIect chec&, defendant had agreed that the card shall remain effecti"e, the Court ta&es note of the following< 0. An employee of defendant corporation unconditionally accepted the subIect chec& upon its deli"ery, despite its being a postdated oneA and the amount did not tally with plaintiffVs obligationA 6. )efendant did not deny nor contro"ert plaintiffVs claim that all his payments were made in chec&sA

=. )efendantVs main witness, !r. !ani8uiz, categorically stated that the re8uest for plaintiff to replace his postdated chec& with cash was merely for the purpose of tallying plaintiffVs outstanding obligation with his payment and not to 8uestion the postdated chec&A -. That the card was suspended almost a wee& after receipt of the postdated chec&A 7. That despite the many instances that defendant could ha"e informed plaintiff o"er the phone of the cancellation or suspension of his credit card, it did not do so, which could ha"e pre"ented the incident of )ecember 2, 0121, the notice allegedly sent thru ordinary mail is not only unreliable but ta&es a long time. #uch action as suspension of credit card must be immediately relayed to the person affected so as to a"oid embarrassing situations. 5. And that the postdated chec& was deposited on )ecember 64, 0121. In "iew of the foregoing obser"ations, it is needless to say that there was indeed an arrangement between plaintiff and the defendant, as can be inferred from the acts of the defendantVs employees, that the subIect credit card is still good and could still be used by the plaintiff as it would be honored by the duly accredited establishment of defendant.O7P Dot satisfied with the @egional Trial CourtVs decision, petitioner appealed to the Court of Appeals, which, in a decision promulgated on !arch 1, 0117 ruled in its dispositi"e portion< +%$@$*;@$, premises considered, the decision appealed from is hereby A**I@!$) with the !;)I*ICATI;D that the defendant.appellant shall pay the plaintiff.appellee the following< 74,444.44 as moral damagesA 67,444.44 as exemplary damagesA and 04,444.44 by way of attorneyVs fees. #; ;@)$@$). O5P %ence, the present petition on the following assignment of errors< I. T%$ L;+$@ C;F@T $@@$) ID )$CLA@ID: T%AT T%$@$ +A# ID)$$) AD A:@$$!$DT ;@ A@@AD:$!$DT $DT$@$) IDT; '$T+$$D T%$ A@TI$# +%$@$ID T%$ )$*$D)ADT @$BFI@$) T%$ LAIDTI** T; I##F$ A ;#T)AT$) C%$CL ID IT# *A9;@ ID T%$ A!;FDT ;* 07,444.44 A# AC!$DT *;@ %I# ;9$@)F$ ACC;FDT#, +IT% T%$ C;D)ITI;D T%AT T%$ LAIDTI**V# C@$)IT CA@) +ILL D;T '$ #F# $D)$) ;@ CADC$LL$). T%$ L;+$@ C;F@T $@@$) ID %;L)ID: )$*$D)ADT LIA'L$ *;@ )A!A:$# AD) ATT;@D$CV# *$$# A@I#ID: ;FT *@;! T%$ )I#%;D;@ ;* T%$ LAIDTI**V# C@$)IT CA@).O3P

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II.

+e find the petition meritorious. The first issue to be resol"ed is whether petitioner had the right to suspend the credit card of the pri"ate respondent. Fnder the terms and conditions of the credit card, signed by the pri"ate respondent, any card with outstanding balances after thirty ,=4/ days from original billingQstatement shall automatically be suspended, thus< AC!$DT ;* C%A@:$# . '$CC shall furnish the Cardholder a monthly statement of account made through the use of the CA@) and the Cardholder agrees that all charges made through the use of the CA@) shall be paid by the Cardholder on or before the last day for payments, which is twenty ,64/ days from the date of the said statement of account, and such payment Page82

due date may be changed to an earlier date if the CardholderVs account is considered o"erdue andQor with balances in excess of the appro"ed credit limitA or to such other date as may be deemed proper by the CA@) issuer with notice to the Cardholder on the same monthly statement of account. If the last day for payment falls on a #aturday, #unday or %oliday, the last day for payment automatically becomes the last wor&ing day prior to said payment date. %owe"er, notwithstanding the absence or lac& of proof of ser"ice of the statement of charges to the Cardholder, the latter shall pay any or all charges made through the use of the CA@) within thirty ,=4/ days from the date or dates thereof. *ailure of Cardholder to pay any and all charges made through the CA@) within the payment period as stated in the statement of charges or within thirty ,=4/ days from actual date or dates whiche"er occur earlier, shall render him in default without the necessity of demand from '$CC, which the Cardholder expressly wai"es. These charges or balance thereof remaining unpaid after the payment due date indicated on the monthly statement of account shall bear interest at the rate of =R per month and an additional penalty fee e8ui"alent to another =R of the amount due for e"ery month or a fraction of a monthVs delay. @;9I)$), that if there occurs any change on the pre"ailing mar&et rates. '$CC shall ha"e the option to adIust the rate of interest andQor penalty fee due on the outstanding obligation with prior notice to the Cardholder. xxx xxx xxx Any CA@) with outstanding balances unpaid after thirty ,=4/ days from original billingQstatement date shall automatically be suspended, and those with accounts unpaid after sixty ,54/ days from said original billingQstatement date shall automatically be cancelled, without preIudice to '$CCVs right to suspend or cancel any CA@) any time and for whate"er reason. In case of default in his obligation as pro"ided for in the preceding paragraph, Cardholder shall surrender his CA@) to '$CC and shall in addition to the interest and penalty charges aforementioned, pay the following li8uidated damages andQor fees ,a/ a collection fee of 67R of the amount due if the account is referred to a collection agency or attorneyA ,b/ a ser"ice fee of 044 for e"ery dishonored chec& issued by the Cardholder in payment of his account, with preIudice, howe"er, to '$CCVs right of considering CardholderVs obligation unpaid, cable cost for demanding payment or ad"ising cancellation of membership shall also be for CardholderVs accountA and ,c/ a final fee e8ui"alent to 67R of the unpaid balance, exclusi"e of litigation expenses and Iudicial costs, if the payment of the account is enforced through court action.O2P The afore8uoted pro"ision of the credit card cannot be any clearer. 'y his own admission, pri"ate respondent made no payment within thirty days for his original billingQstatement dated 63 #eptember 0121. Deither did he ma&e payment for his original billingQstatement dated 63 ;ctober 0121. Conse8uently, as early as 62 ;ctober 0121, thirty days from the non.payment of his billing dated 63 #eptember 0121, petitioner corporation could automatically suspend his credit card. The next issue is whether prior to the suspension of pri"ate respondentVs credit card on 62 Do"ember 0121, the parties entered into an agreement whereby the card could still be used and would be duly honored by duly accredited establisments. +e agree with the findings of the respondent court, that there was an arrangement between the parties, wherein the petitioner re8uired the pri"ate respondent to issue a chec& worth 07,444 as payment for the latterVs billings. %owe"er, we find that the pri"ate respondent was not able to comply with his obligation. As the testimony of pri"ate respondent himself bears out, the agreement was for the immediate payment of the outstanding account<

B In said statement of account that you are supposed to pay the 2,13-.2- the charge of interest and penalties, did you note thatM A Ces, sir. I noted the date. B +henM A +hen I returned from the Buezon pro"ince, sir. B +henM A I thin& Do"ember 66, sir. B #o that before you used again the credit card you were not able to pay immediately this 2,123.2in cashM A I paid 07,444.44, sir. B !y 8uestion !r. +itness is, did you pay this 2,123.2- in charge of interest and penalties immediately in cashM A In cash no, but in chec&, sir. B Cou said that you noted the word UimmediatelyU in bold letters in your statement of account, why did you not pay immediatelyM A 'ecause I recei"ed that late, sir. B Ces, on Do"ember 66 when you recei"ed from the secretary of the defendant telling you to pay the principal amount of 2,123.2-, why did you not payM A There was a communication between me and the defendant, I was re8uired to pay 2,444.44 but I paid in chec& for 07,444.44, sir. B )o you ha"e any e"idence to show that the defendant re8uired you to pay in chec& for 07,444.44M A Ces, sir. B +here is itM A It was by telecommunication, sir. B #o there is no written communication between you and the defendantM A There was none, sir. B There is no written agreement which says that 2,123.2- should be paid for 07,444.44 in chec&, there is noneM A Ces, no written agreement, sir. B And you as a lawyer you &now that a chec& is not considered as cash specially when it is postdated sent to the defendantM A That is correct, sir. Page82

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Clearly, the purpose of the arrangement between the parties on Do"ember 66, 0121, was for the immediate payment of the pri"ate respondentVs outstanding account, in order that his credit card would not be suspended. As agreed upon by the parties, on the following day, pri"ate respondent did issue a chec& for 07,444. %owe"er, the chec& was postdated 07 )ecember 0121. #ettled is the doctrine that a chec& is only a substitute for money and not money, the deli"ery of such an instrument does not, by itself operate as payment.O1PThis is especially true in the case of a postdated chec&. Thus, the issuance by the pri"ate respondent of the postdated chec& was not effecti"e payment. It did not comply with his obligation under the arrangement with !iss Lorenzo. etitioner corporation was therefore Iustified in suspending his credit card. *inally, we find no legal and factual basis for pri"ate respondentVs assertion that in canceling the credit card of the pri"ate respondent, petitioner abused its right under the terms and conditions of the contract. To find the existence of an abuse of right under Article 01 the following elements must be present< ,0/ There is a legal right or dutyA ,6/ which is exercised in bad faithA ,=/ for the sole intent of preIudicing or inIuring another.O04P Time and again this Court has held that good faith is presumed and the burden of pro"ing bad faith is on the party alleging it.O00P This pri"ate respondent failed to do. In fact, the action of the petitioner belies the existence of bad faith. As early as 62 ;ctober 0121, petitioner could ha"e suspended pri"ate respondentVs card outright. Instead, petitioner allowed pri"ate respondent to use his card for se"eral wee&s. etitioner had e"en notified pri"ate respondent of the impending suspension of his credit card and made special accommodations for him for settling his outstanding account. As such, petitioner cannot be said to ha"e capriciously and arbitrarily canceled the pri"ate respondentVs credit card. +e do not dispute the findings of the lower court that pri"ate respondent suffered damages as a result of the cancellation of his credit card. %owe"er, there is a material distinction between damages and inIury. InIury is the illegal in"asion of a legal rightA damage is the loss, hurt, or harm which results from the inIuryA and damages are the recompense or compensation awarded for the damage suffered. Thus, there can be damage without inIury in those instances in which the loss or harm was not the result of a "iolation of a legal duty. In such cases, the conse8uences must be borne by the inIured person alone, the law affords no remedy for damages resulting from an act which does not amount to a legal inIury or wrong. These situations are often called damnum a"sque in5uria.O06P In other words, in order that a plaintiff may maintain an action for the inIuries of which he complains, he must establish that such inIuries resulted from a breach of duty which the defendant owed to the plaintiff . a concurrence of inIury to the plaintiff and legal responsibility by the person causing it. The underlying basis for the award of tort damages is the premise that an indi"idual was inIured in contemplation of law. Thus, there must first be a breach of some duty and the imposition of liability for that breach before damages may be awardedAO0=P and the breach of such duty should be the proximate cause of the inIury. +e therefore disagree with the ruling of the respondent court that the dishonor of the credit card of the pri"ate respondent by CafX Adriatico is attributable to petitioner for its willful or gross neglect to inform the pri"ate respondent of the suspension of his credit card, the unfortunate conse8uence of which brought social humiliation and embarrassment to the pri"ate respondent.O0-P It was petitionerVs failure to settle his obligation which caused the suspension of his credit card and subse8uent dishonor at CafX Adriatico. %e can not now pass the blame to the petitioner for not notifying him of the suspension of his card. As 8uoted earlier, the application contained the stipulation that the petitioner could automatically suspend a card whose billing has not been paid for more than thirty days. Dowhere is it

stated in the terms and conditions of the application that there is a need of notice before suspension may be effected as pri"ate respondent claims.O07P This notwithstanding, on Do"ember 62, 0121, the day of the suspension of pri"ate respondentVs card, petitioner sent a letter by ordinary mail notifying pri"ate respondent that his card had been temporarily suspended. Fnder the @ules on $"idence, there is a disputable presumption that letters duly directed and mailed were recei"ed on the regular course of mail. O05P Aside from the pri"ate respondentVs bare denial, he failed to present e"idence to rebut the presumption that he recei"ed said notice. In fact upon cross examination, pri"ate respondent admitted that he did recei"ed the letter notifying him of the cancellation< B Dow you were saying that there was a first letter sent to you by the defendantM A Cour letter, sir. B +as that the first letter that you recei"edM A Ces, sir. B Is it that there was a communication first between you and the defendantM A There was none, sir. I recei"ed a cancellation notice but that was after Do"ember 63.O03P As it was pri"ate respondentVs own negligence which was the proximate cause of his embarrassing and humiliating experience, we find the award of damages by the respondent court clearly unIustified. +e ta&e note of the fact that pri"ate respondent has not yet paid his outstanding account with petitioner. *N V*EB OF 0.E FOREGO*NG , the decision of the Court of Appeals ordering petitioner to pay pri"ate respondent 044,444.44 as moral damages, 74,444.44 as exemplary damages and 64,444.44 as attorneyVs fees, is #$T A#I)$. ri"ate respondent is )I@$CT$) to pay his outstanding obligation with the petitioner in the amount of 0-,-=1.-0. +O ORDERED.

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G.R. No. 115E:C. Febr8"r$ 7, 1996 MA. LO2RDE+ VALEN;2ELA, petitioner, vs. )O2R0 OF A//EAL+, R*).ARD L* "n3 ALE6ANDER )OMMER)*AL, *N)., respondents. G.R. No. 1179CC. Febr8"r$ 7, 1996 R*).ARD L*, petitioner, vs. )O2R0 OF A//EAL+ "n3 MA. LO2RDE+ VALEN;2ELA, respondents. 1A/2NAN, J.: These two petitions for re"iew on certiorari under @ule -7 of the @e"ised @ules of Court stem from an action to reco"er damages by petitioner Lourdes 9alenzuela in the @egional Trial Court of Buezon City for inIuries sustained by her in a "ehicular accident in the early morning of >une 6-, 0114. The facts found by the trial court are succinctly summarized by the Court of Appeals below< This is an action to reco"er damages based on 8uasi.delict, for serious physical inIuries sustained in a "ehicular accident. laintiff(s "ersion of the accident is as follows< At around 6<44 in the morning of >une 6-, 0114, plaintiff !a. Lourdes 9alenzuela was dri"ing a blue !itsubishi lancer with late Do. **F 7-6 from her restaurant at !arcos highway to her home at alanza #treet, Araneta A"enue. #he was tra"elling along Aurora 'l"d. with a companion, Cecilia @amon, heading towards the direction of !anila. 'efore reaching A. La&e #treet, she noticed something wrong with her tiresA she stopped at a lighted place where there were people, to "erify

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whether she had a flat tire and to solicit help if needed. %a"ing been told by the people present that her rear right tire was flat and that she cannot reach her home in that car(s condition, she par&ed along the sidewal&, about 0Y feet away, put on her emergency lights, alighted from the car, and went to the rear to open the trun&. #he was standing at the left side of the rear of her car pointing to the tools to a man who will help her fix the tire when she was suddenly bumped by a 0123 !itsubishi Lancer dri"en by defendant @ichard Li and registered in the name of defendant Alexander Commercial, Inc. 'ecause of the impact plaintiff was thrown against the windshield of the car of the defendant, which was destroyed, and then fell to the ground. #he was pulled out from under defendant(s car. laintiff(s left leg was se"ered up to the middle of her thigh, with only some s&in and sucle connected to the rest of the body. #he was brought to the F$@! !edical !emorial Center where she was found to ha"e a Htraumatic amputation, leg, left up to distal thigh ,abo"e &nee/.J #he was confined in the hospital for twenty ,64/ days and was e"entually fitted with an artificial leg. The expenses for the hospital confinement , 064,444.44/ and the cost of the artificial leg , 63,444.44/ were paid by defendants from the car insurance. In her complaint, plaintiff prayed for moral damages in the amount of 0 million, exemplary damages in the amount of 044,444.44 and other medical and related expenses amounting to a total of 024,444.44, including loss of expected earnings. )efendant @ichard Li denied that he was negligent. %e was on his way home, tra"elling at 77 &phA considering that it was raining, "isibility was affected and the road was wet. Traffic was light. %e testified that he was dri"ing along the inner portion of the right lane of Aurora 'l"d. towards the direction of Araneta A"enue, when he was suddenly confronted, in the "icinity of A. La&e #treet, #an >uan, with a car coming from the opposite direction, tra"elling at 24 &ph, with Hfull bright lights.J Temporarily blinded, he instincti"ely swer"ed to the right to a"oid colliding with the oncoming "ehicle, and bumped plaintiff(s car, which he did not see because it was midnight blue in color, with no par&ing lights or early warning de"ice, and the area was poorly lighted. %e alleged in his defense that the left rear portion of plaintiff(s car was protruding as it was then Hat a standstill diagonallyJ on the outer portion of the right lane towards Araneta A"enue ,par. 02, Answer/. %e confirmed the testimony of plaintiff(s witness that after being bumped the car of the plaintiff swer"ed to the right and hit another car par&ed on the sidewal&. )efendants counterclaimed for damages, alleging that plaintiff was rec&less or negligent, as she was not a licensed dri"er. The police in"estigator, fc. *elic @amos, who prepared the "ehicular accident report and the s&etch of the three cars in"ol"ed in the accident, testified that the plaintiff(s car was Hnear the sidewal&JA this witness did not remember whether the hazard lights of plaintiffs car were on, and did not notice if there was an early warning de"iceA there was a street light at the corner of Aurora 'l"d. and *. @oman, about 044 meters away. It was not mostly dar&, i.e. Hthings can be seenJ ,p. 05, tsn, ;ct. 62, 0110/. A witness for the plaintiff, @ogelio @odriguez, testified that after plaintiff alighted from her car and opened the trun& compartment, defendant(s car came approaching "ery fast ten meters from the sceneA the car was Hzigzagging.J The rear left side of plaintiffs car was bumped by the front right portion of defendant(s carA as a conse8uence, the plaintiffs car swer"ed to the right and hit the par&ed car on the sidewal&. laintiff was thrown to the windshield of defendant(s car, which was destroyed, and landed under the car. %e stated that defendant was under the influence of li8uor as he could Hsmell it "ery wellJ ,pp. -=, 31, tsn., >une 03, 0110/. After trial, the lower court sustained the plaintiff(s submissions and found defendant @ichard Li guilty of gross negligence and liable for damages under Article 6035 of the Ci"il Code. The trial court li&ewise held Alexander Commercial, Inc., Li(s employer, Iointly and se"erally liable for damages pursuant to Article 6024. It ordered the defendants to Iointly and se"erally pay the following amounts<

0. -0,2-4.44, as actual damages, representing the miscellaneous expenses of the plaintiff as a result of her se"ered left legA 6. The sums of ,a/ =3,744.44, for the unrealized profits because of the stoppage of plaintiffs 'istro La Conga restaurant three ,=/ wee&s after the accident on >une 6-, 0114A ,b/ 64,444.44, a month, as unrealized profits of the plaintiff in her 'istro La Conga restaurant, from August, 0114 until the date of this IudgmentA and ,c/ =4,444.44, a month, for unrealized profits in plaintiffs two ,6/ beauty salons from >uly, 0114 until the date of this decisionA =. -. 7. 5. 0,444,444.44, in moral damagesA 74,444.44, as exemplary damages, 54,444.44, as reasonable attorney(s feesA and Costs.

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As a result of the trial court(s decision, defendants filed an ;mnibus !otion for Dew Trial and for @econsideration, citing testimony in Criminal Case ;.C. Do. 24-=53 , eople "s. @ichard Li/, tending to show that the point of impact, as depicted by the pieces of glassQdebris from the parties( cars, appeared to be at the center of the right lane of Aurora 'l"d. The trial court denied the motion. )efendants forthwith filed an appeal with the respondent Court of Appeals. In a )ecision rendered !arch =4, 011-, the Court of Appeals found that there was Hample basis from the e"idence of record for the trial court(s finding that the plaintiff(s car was properly par&ed at the right, beside the sidewal& when it was bumped by defendant(s car.JO0P )ismissing the defendants( argument that the plaintiff(s car was improperly par&ed, almost at the center of the road, the respondent court noted that e"idence which was supposed to pro"e that the car was at or near center of the right lane was ne"er presented during the trial of the case.O6P The respondent court furthermore obser"ed that< )efendant Li(s testimony that he was dri"ing at a safe speed of 99 &m.Qhour is self ser"ingA it was not corroborated. It was in fact contradicted by eyewitness @odriguez who stated that he was outside his beerhouse located at Aurora 'oule"ard after A. La&e #treet, at or about 6<44 a.m. of >une 6-, 0114 when his attention was caught by a beautiful lady ,referring to the plaintiff/ alighting from her car and opening the trun& compartmentA he noticed the car of @ichard Li Happroaching "ery fast ten ,04/ meters away from the sceneJA defendant(s car was zigzagging, although there were no holes and hazards on the street, and Hbumped the leg of the plaintiff( who was thrown against the windshield of defendant(s car, causing its destruction. %e came to the rescue of the plaintiff, who was pulled out from under defendant(s car and was able to say Hhurting wordsJ to @ichard Li because he noticed that the latter was under the influence of li8uor, because he Hcould smell it "ery wellJ ,p. =5, et. se8., tsn, >une 03, 0110/. %e &new that plaintiff owned a beerhouse in #ta. !esa in the 0134(s, but did not &now either plaintiff or defendant Li before the accident. In agreeing with the trial court that the defendant Li was liable for the inIuries sustained by the plaintiff, the Court of Appeals, in its decision, howe"er, absol"ed the Li(s employer, Alexander Commercial, Inc. from any liability towards petitioner Lourdes 9alenzuela and reduced the amount of moral damages to 744,444.44. *inding Iustification for exemplary damages, the respondent court allowed an award of 74,444.44 for the same, in addition to costs, attorney(s fees and the other damages. The Court of Appeals, li&ewise, dismissed the defendants( counterclaims.O=P

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Conse8uently, both parties assail the respondent court(s decision by filing two separate petitions before this Court. @ichard Li, in :.@. Do. 0031--, contends that he should not be held liable for damages because the proximate cause of the accident was !a. Lourdes 9alenzuela(s own negligence. Alternati"ely, he argues that in the e"ent that this Court finds him negligent, such negligence ought to be mitigated by the contributory negligence of 9alenzuela. ;n the other hand, in :.@. Do. 00746-, !a. Lourdes 9alenzuela assails the respondent court(s decision insofar as it absol"es Alexander Commercial, Inc. from liability as the owner of the car dri"en by @ichard Li and insofar as it reduces the amount of the actual and moral damages awarded by the trial court.
O-P

!oreo"er, the testimony that the streetlights on his side of Aurora 'oule"ard were on the night the accident transpired ,p. 2/ is not necessarily contradictory to the testimony of fc. @amos that there was a streetlight at the corner of Aurora 'oule"ard and *. @oman #treet ,p. -7, tsn., ;ct. 64, 0110/. +ith respect to the weather condition, @odriguez testified that there was only a drizzle, not a hea"y rain and the rain has stopped and he was outside his establishment at the time the accident transpired ,pp. 5-.57, tsn., >une 03, 0110/. This was consistent with plaintiffs testimony that it was no longer raining when she left 'istro La Conga ,pp. 04.00, tsn., April 61, 0110/. It was defendant Li who stated that it was raining all the way in an attempt to explain why he was tra"elling at only 74.77 &ph. ,p. 00, tsn., ;ct. 0-, 0110/. As to the testimony of fc. @amos that it was raining, he arri"ed at the scene only in response to a telephone call after the accident had transpired ,pp. 1.04, tsn, ;ct. 62, 0110/. +e find no substantial inconsistencies in @odriguez(s testimony that would impair the essential integrity of his testimony or reflect on his honesty. +e are compelled to affirm the trial court(s acceptance of the testimony of said eyewitness. Against the unassailable testimony of witness @odriguez we note that Li(s testimony was peppered with so many inconsistencies leading us to conclude that his "ersion of the accident was merely adroitly crafted to pro"ide a "ersion, ob"iously self.ser"ing, which would exculpate him from any and all liability in the incident. Against 9alenzuela(s corroborated claims, his allegations were neither bac&ed up by other witnesses nor by the circumstances pro"en in the course of trial. %e claimed that he was dri"ing merely at a speed of 99 &ph. when Hout of nowhere he saw a dar& maroon lancer right in front of him, which was ,the/ plaintiff(s car.J %e alleged that upon seeing this sudden HapparitionJ he put on his bra&es to no a"ail as the road was slippery.O1P ;ne will ha"e to suspend disbelief in order to gi"e credence to Li(s disingenuous and patently self. ser"ing asse"erations. The a"eragemotorist alert to road conditions will ha"e no difficulty applying the bra&es to a car tra"eling at the speed claimed by Li. :i"en a light rainfall, the "isibility of the street, and the road conditions on a principal metropolitan thoroughfare li&e Aurora 'oule"ard, Li would ha"e had ample time to react to the changing conditions of the road if he were alert . as e"ery dri"er should be . to those conditions. )ri"ing exacts a more than usual toll on the senses. hysiological Hfight or flightJ O04P mechanisms are at wor&, pro"ided such mechanisms were not dulled by drugs, alcohol, exhaustion, drowsiness, etc. O00P Li(s failure to react in a manner which would ha"e a"oided the accident could therefore ha"e been only due to either or both of the two factors< 0/ that he was dri"ing at a H"ery fastJ speed as testified by @odri8uezA and 6/ that he was under the influence of alcohol. O06P $ither factor wor&ing independently would ha"e diminished his responsi"eness to road conditions, since normally he would ha"e slowed down prior to reaching 9alenzuela(s car, rather than be in a situation forcing him to suddenly apply his bra&es. As the trial court noted ,8uoted with appro"al by respondent court/< #econdly, as narrated by defendant @ichard Li to the #an >uan olice immediately after the incident, he said that while dri"ing along Aurora 'l"d., out of nowhere he saw a dar& maroon lancer right in front of him, which was plaintiffs car, indicating, again, thereby that, indeed, he was dri"ing "ery fast, obli"ious of his surroundings and the road ahead of him, because if he was not, then he could not ha"e missed noticing at a still far distance the par&ed car of the plaintiff at the right side near the sidewal& which had its emergency lights on, thereby a"oiding forcefully bumping at the plaintiff who was then standing at the left rear edge of her car. #ince, according to him, in his narration to the #an >uan olice, he put on his bra&es when he saw the plaintiffs car in front of him, but that it failed as the road was wet and slippery, this goes to show again, that, contrary to his claim, he was, indeed, running "ery fast. *or, were it otherwise, he could ha"e easily completely stopped his car, thereby a"oiding the bumping of the plaintiff, notwithstanding that the road was wet and slippery. 9erily, since, if, indeed, he was running slow, as he claimed, at only about 77 &ilometers

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As the issues are intimately related, both petitions are hereby consolidated. It is plainly e"ident that the petition for re"iew in :.@. Do. 0031-- raises no substantial 8uestions of law. +hat it, in effect, attempts to ha"e this Court re"iew are factual findings of the trial court, as sustained by the Court of Appeals finding @ichard Li grossly negligent in dri"ing the !itsubishi Lancer pro"ided by his company in the early morning hours of >une 6-, 0114. This we will not do. As a general rule, findings of fact of the Court of Appeals are binding and conclusi"e upon us, and this Court will not normally disturb such factual findings unless the findings of fact of the said court are palpably unsupported by the e"idence on record or unless the Iudgment itself is based on a misapprehension of facts.O7P In the first place, 9alenzuela(s "ersion of the incident was fully corroborated by an uninterested witness, @ogelio @odriguez, the owner.operator of an establishment located Iust across the scene of the accident. ;n trial, he testified that he obser"ed a car being dri"en at a H"ery fastJ speed, racing towards the general direction of Araneta A"enue.O5P @odriguez further added that he was standing in front of his establishment, Iust ten to twenty feet away from the scene of the accident, when he saw the car hit 9alenzuela, hurtling her against the windshield of the defendant(s !itsubishi Lancer, from where she e"entually fell under the defendant(s car. #pontaneously reacting to the incident, he crossed the street, noting that a man ree&ing with the smell of li8uor had alighted from the offending "ehicle in order to sur"ey the incident.O3P $8ually important, @odriguez declared that he obser"ed 9alenzuela(s car par&ed parallel and "ery near the sidewal&, O2P contrary to Li(s allegation that 9alenzuela(s car was close to the center of the right lane. +e agree that as between Li(s Hself.ser"ingJ asse"erations and the obser"ations of a witness who did not e"en &now the accident "ictim personally and who immediately ga"e a statement of the incident similar to his testimony to the in"estigator immediately after the incident, the latter(s testimony deser"es greater weight. As the court emphasized< The issue is one of credibility and from ;ur own examination of the transcript, +e are not prepared to set aside the trial court(s reliance on the testimony of @odriguez negating defendant(s assertion that he was dri"ing at a safe speed. +hile @odriguez dri"es only a motorcycle, his perception of speed is not necessarily impaired. %e was subIected to cross.examination and no attempt was made to 8uestion his competence or the accuracy of his statement that defendant was dri"ing H"ery fast.J This was the same statement he ga"e to the police in"estigator after the incident, as told to a newspaper report ,$xh. H J/. +e see no compelling basis for disregarding his testimony. The alleged inconsistencies in @odriguez( testimony are not borne out by an examination of the testimony. @odriguez testified that the scene of the accident was across the street where his beerhouse is located about ten to twenty feet away ,pp. =7.=5, tsn, >une 03, 0110/. %e did not state that the accident transpired immediately in front of his establishment. The ownership of the Lambingan sa Lambingan is not materialA the business is registered in the name of his mother, but he explained that he owns the establishment ,p. 7, tsn., >une 64, 0110/.

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per hour, then, inspite of the wet and slippery road, he could ha"e a"oided hitting the plaintiff by the mere expedient or applying his bra&es at the proper time and distance. It could not be true, therefore, as he now claims during his testimony, which is contrary to what he told the police immediately after the accident and is, therefore, more belie"able, that he did not actually step on his bra&es, but simply swer"ed a little to the right when he saw the on.coming car with glaring headlights, from the opposite direction, in order to a"oid it. *or, had this been what he did, he would not ha"e bumped the car of the plaintiff which was properly par&ed at the right beside the sidewal&. And, it was not e"en necessary for him to swer"e a little to the right in order to safely a"oid a collision with the on.coming car, considering that Aurora 'l"d. is a double lane a"enue separated at the center by a dotted white paint, and there is plenty of space for both cars, since her car was running at the right lane going towards !anila and the on.coming car was also on its right lane going to Cubao.JO0=P %a"ing come to the conclusion that Li was negligent in dri"ing his company.issued !itsubishi Lancer, the next 8uestion for us to determine is whether or not 9alenzuela was li&ewise guilty of contributory negligence in par&ing her car alongside Aurora 'oule"ard, which entire area Li points out, is a no par&ing zone. +e agree with the respondent court that 9alenzuela was not guilty of contributory negligence. Contributory negligence is conduct on the part of the inIured party, contributing as a legal cause to the harm he has suffered, which falls below the standard to which he is re8uired to conform for his own protection. O0-P 'ased on the foregoing definition, the standard or act to which, according to petitioner Li, 9alenzuela ought to ha"e conformed for her own protection was not to par& at all at any point of Aurora 'oule"ard, a no par&ing zone. +e cannot agree. Courts ha"e traditionally been compelled to recognize that an actor who is confronted with an emergency is not to be held up to the standard of conduct normally applied to an indi"idual who is in no such situation. The law ta&es stoc& of impulses of humanity when placed in threatening or dangerous situations and does not re8uire the same standard of thoughtful and reflecti"e care from persons confronted by unusual and oftentimes threatening conditions.O07P Fnder the Hemergency ruleJ adopted by this Court in :an vs Court of Appeals,O05P an indi"idual who suddenly finds himself in a situation of danger and is re8uired to act without much time to consider the best means that may be adopted to a"oid the impending danger, is not guilty of negligence if he fails to underta&e what subse8uently and upon reflection may appear to be a better solution, unless the emergency was brought by his own negligence.O03P Applying this principle to a case in which the "ictims in a "ehicular accident swer"ed to the wrong lane to a"oid hitting two children suddenly darting into the street, we held, in &c #ee vs. /ntermediate Appellate Court,O02P that the dri"er therein, >ose Loh, Hadopted the best means possible in the gi"en situationJ to a"oid hitting the children. Fsing the Hemergency ruleJ the court concluded that Loh, in spite of the fact that he was in the wrong lane when the collision with an oncoming truc& occurred, was not guilty of negligence.O01P +hile the emergency rule applies to those cases in which reflecti"e thought, or the opportunity to ade8uately weigh a threatening situation is absent, the conduct which is re8uired of an indi"idual in such cases is dictated not exclusi"ely by the suddenness of the e"ent which absolutely negates thoughtful care, but by the o"er.all nature of the circumstances. A woman dri"ing a "ehicle suddenly crippled by a flat tire on a rainy night will not be faulted for stopping at a point which is both con"enient for her to do so and which is not a hazard to other motorists. #he is not expected to run the entire boule"ard in search for a par&ing zone or turn on a dar& #treet or alley where she would li&ely find no one to help her. It would be hazardous for her not to stop and assess the emergency ,simply because the entire length of Aurora 'oule"ard is a no.par&ing

zone/ because the hobbling "ehicle would be both a threat to her safety and to other motorists. In the instant case, 9alenzuela, upon reaching that portion of Aurora 'oule"ard close to A. La&e #t., noticed that she had a flat tire. To a"oid putting herself and other motorists in danger, she did what was best under the situation. As narrated by respondent court< H#he stopped at a lighted place where there were people, to "erify whether she had a flat tire and to solicit help if needed. %a"ing been told by the people present that her rear right tire was flat and that she cannot reach her home she par&ed along the sidewal&, about 0Y feet away, behind a Toyota Corona Car.JO64P In fact, respondent court noted, fc. *elix @amos, the in"estigator on the scene of the accident confirmed that 9alenzuela(s car was par&ed "ery close to the sidewal&. O60PThe s&etch which he prepared after the incident showed 9alenzuela(s car partly straddling the sidewal&, clear and at a con"enient distance from motorists passing the right lane of Aurora 'oule"ard. This fact was itself corroborated by the testimony of witness @odriguez.O66P Fnder the circumstances described, 9alenzuela did exercise the standard reasonably dictated by the emergency and could not be considered to ha"e contributed to the unfortunate circumstances which e"entually led to the amputation of one of her lower extremities. The emergency which led her to par& her car on a sidewal& in Aurora 'oule"ard was not of her own ma&ing, and it was e"ident that she had ta&en all reasonable precautions. ;b"iously in the case at bench, the only negligence ascribable was the negligence of Li on the night of the accident. HDegligence, as it is commonly understood is conduct which creates an undue ris& of harm to others.JO6=P It is the failure to obser"e that degree of care, precaution, and "igilance which the circumstances Iustly demand, whereby such other person suffers inIury. O6-P +e stressed, in Corliss vs. &anila Railroad Compan$,O67P that negligence is the want of care re8uired by the circumstances. The circumstances established by the e"idence adduced in the court below plainly demonstrate that Li was grossly negligent in dri"ing his !itsubishi Lancer. It bears emphasis that he was dri"ing at a fast speed at about 6<44 A.!. after a hea"y downpour had settled into a drizzle rendering the street slippery. There is ample testimonial e"idence on record to show that he was under the influence of li8uor. Fnder these conditions, his chances of effecti"ely dealing with changing conditions on the road were significantly lessened. As rosser and Leaton emphasize< OFPnder present day traffic conditions, any dri"er of an automobile must be prepared for the sudden appearance of obstacles and persons on the highway, and of other "ehicles at intersections, such as one who sees a child on the curb may be re8uired to anticipate its sudden dash into the street, and his failure to act properly when they appear may be found to amount to negligence. O65P Li(s ob"ious unpreparedness to cope with the situation confronting him on the night of the accident was clearly of his own ma&ing. +e now come to the 8uestion of the liability of Alexander Commercial, Inc. Li(s employer. In denying liability on the part of Alexander Commercial, the respondent court held that< There is no e"idence, not e"en defendant Li(s testimony, that the "isit was in connection with official matters. %is functions as assistant manager sometimes re8uired him to perform wor& outside the office as he has to "isit buyers and company clients, but he admitted that on the night of the accident he came from '* %omes araWa8ue he did not ha"e Nbusiness from the company( ,pp. 67.65, tsn, #ept. 6=, 0110/. The use ofthe company car was partly re8uired by the nature of his wor&, but the pri"ilege of using it for non.official business is a Nbenefit,( apparently referring to the fringe benefits attaching to his position.

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Fnder the ci"il law, an employer is liable for the negligence of his employees in the discharge of their respecti"e duties, the basis of which liability is not respondeat superior, but the relationship of pater familias, which theory bases the liability of the master ultimately on his own negligence and not on that of his ser"ant ,Cuisonv. Dorton and %arrison Co., 77 hil. 02/. 'efore an employer may be held liable for the negligence of his employee, the act or omission which caused damage must ha"e occurred while an employee was in the actual performance of his assigned tas&s or duties ,*rancis %igh #chool vs. Court of Appeals, 01- #C@A =-0/. In defining an employer(s liability for the acts done within the scope of the employee(s assigned tas&s, the #upreme Court has held that this includes any act done by an employee, in furtherance of the interests of the employer or for the account of the employer at the time of the infliction of the inIury or damage ,*ilamer Christian Institute vs. Intermediate Appellate Court, 606 #C@A 5=3/. An employer is expected to impose upon its employees the necessary discipline called for in the performance of any act Nindispensable to the business and beneficial to their employer( ,at p. 5-7/. In light of the foregoing, +e are unable to sustain the trial court(s finding that since defendant Li was authorized by the company to use the company car Neither officially or socially or e"en bring it home,( he can be considered as using the company car in the ser"ice of his employer or on the occasion of his functions. )ri"ing the company car was not among his functions as assistant managerA using it for non.official purposes would appear to be a fringe benefit, one of the per&s attached to his position. 'ut to impose liability upon the employer under Article 6024 of the Ci"il Code, earlier 8uoted, there must be a showing that the damage was caused by their employees in the ser"ice of the employer or on the occasion of their functions. There is no e"idence that @ichard Li was at the time of the accident performing any act in furtherance of the company(s business or its interests, or at least for its benefit. The imposition of solidary liability against defendant Alexander Commercial Corporation must therefore fail.O63P +e agree with the respondent court that the relationship in 8uestion is not based on the principle of respondeat superior, which holds the master liable for acts of the ser"ant, but that of pater familias, in which the liability ultimately falls upon the employer, for his failure to exercise the diligence of a good father of the family in the selection and super"ision of his employees. It is up to this point, howe"er, that our agreement with the respondent court ends. Ftilizing the "onus pater familias standard expressed in Article 6024 of the Ci"il Code,O62P we are of the opinion that Li(s employer, Alexander Commercial, Inc. is Iointly and solidarily liable for the damage caused by the accident of >une 6-, 0114. *irst, the case of 0t. (rancis 4i'h 0chool vs. Court of Appeals O61P upon which respondent court has placed undue reliance, dealt with the subIect of a school and its teacher(s super"ision of students during an extracurricular acti"ity. These cases now fall under the pro"ision on special parental authority found in Art. 602 of the *amily Code which generally encompasses all authorized school acti"ities, whether inside or outside school premises. #econd, the employer(s primary liability under the concept of pater familias embodied by Art. 6024 ,in relation to Art. 6035/ of the Ci"il Code is 8uasi.delictual or tortious in character. %is liability is relie"ed on a showing that he exercised the diligence of a good father of the family in the selection and super"ision of its employees. ;nce e"idence is introduced showing that the employer exercised the re8uired amount of care in selecting its employees, half of the employer(s burden is o"ercome. The 8uestion of diligent supervision, howe"er, depends on the circumstances of employment. ;rdinarily, e"idence demonstrating that the employer has exercised diligent super"ision of its employee durin' the performance of the latter;s assi'ned tasks would be enough to relie"e him of the liability imposed by Article 6024 in relation to Article 6035 of the Ci"il Code. The employer is not expected to exercise super"ision o"er either the employee(s pri"ate acti"ities or during the performance of tas&s either unsanctioned by the former or unrelated to the employee(s tas&s. The case at bench presents a situation of a

different character, in"ol"ing a practice utilized by large companies with either their employees of managerial ran& or their representati"es. It is customary for large companies to pro"ide certain classes of their employees with courtesy "ehicles. These company cars are either wholly owned and maintained by the company itself or are subIect to "arious plans through which employees e"entually ac8uire their "ehicles after a gi"en period of ser"ice, or after paying a to&en amount. !any companies pro"ide liberal Hcar plansJ to enable their managerial or other employees of ran& to purchase cars, which, gi"en the cost of "ehicles these days, they would not otherwise be able to purchase on their own. Fnder the first example, the company actually owns and maintains the car up to the point of turno"er of ownership to the employeeA in the second example, the car is really owned and maintained by the employee himself. In furnishing "ehicles to such employees, are companies totally absol"ed of responsibility when an accident in"ol"ing a company.issued car occurs during pri"ate use after normal office hoursM !ost pharmaceutical companies, for instance, which pro"ide cars under the first plan, re8uire rigorous tests of road worthiness from their agents prior to turning o"er the car ,subIect of company maintenance/ to their representati"es. In other words, li&e a good father of a family, they entrust the company "ehicle only after they are satisfied that the employee to whom the car has been gi"en full use of the said company car for company or pri"ate purposes will not be a threat or menace to himself, the company or to others. +hen a company gi"es full use and enIoyment of a company car to its employee, it in effect guarantees that it is, li&e e"ery good father, satisfied that its employee will use the pri"ilege reasonably and responsi"ely. In the ordinary course of business, not all company employees are gi"en the pri"ilege of using a company.issued car. *or large companies other than those cited in the example of the preceding paragraph, the pri"ilege ser"es important business purposes either related to the image of success an entity intends to present to its clients and to the public in general, or for practical and utilitarian reasons . to enable its managerial and other employees of ran& or its sales agents to reach clients con"eniently. In most cases, pro"iding a company car ser"es both purposes. #ince important business transactions and decisions may occur at all hours in all sorts of situations and under all &inds of guises, the pro"ision for the unlimited use of a company car therefore principall$ ser"es the business and goodwill of a company and onl$ incidentall$ the pri"ate purposes of the indi"idual who actually uses the car, the managerial employee or company sales agent. As such, in pro"iding for a company car for business use andQor for the purpose of furthering the company(s image, a company owes a responsibility to the public to see to it that the managerial or other employees to whom it entrusts "irtually unlimited use of a company issued car are able to use the company issue capably and responsibly. In the instant case, Li was an Assistant !anager of Alexander Commercial, Inc. In his testimony before the trial court, he admitted that his functions as Assistant !anager did not re8uire him to scrupulously &eep normal office hours as he was re8uired 8uite often to perform wor& outside the office, "isiting prospecti"e buyers and contacting and meeting with company clients. O=4P These meetings, clearly, were not strictly confined to routine hours because, as a managerial employee tas&ed with the Iob of representing his company with its clients, meetings with clients were both social as well as wor&.related functions. The ser"ice car assigned to Li by Alexander Commercial, Inc. therefore enabled both Li . as well as the corporation . to put up the front of a highly successful entity, increasing the latter(s goodwill before its clientele. It also facilitated meeting between Li and its clients by pro"iding the former with a con"enient mode of tra"el. !oreo"er, Li(s claim that he happened to be on the road on the night of the accident because he was coming from a social "isit with an officemate in araWa8ue was a bare allegation which was ne"er corroborated in the court below. It was ob"iously self.ser"ing. Assuming he really came from his officemate(s place, the same could gi"e rise to speculation that he and his officemate had Iust been from a wor&.related function, or they were together to discuss sales and other wor& related strategies.

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In fine, Alexander Commercial, Inc. has not demonstrated, to our satisfaction, that it exercised the care and diligence of a good father of the family in entrusting its company car to Li. Do allegations were made as to whether or not the company too& the steps necessary to determine or ascertain the dri"ing proficiency and history of Li, to whom it ga"e full and unlimited use of a company car. O=0P Dot ha"ing been able to o"ercome the burden of demonstrating that it should be absol"ed of liability for entrusting its company car to Li, said company, based on the principle of "onus pater familias, ought to be Iointly and se"erally liable with the former for the inIuries sustained by !a. Lourdes 9alenzuela during the accident. *inally, we find no reason to o"erturn the amount of damages awarded by the respondent court, except as to the amount of moral damages. In the case of moral damages, while the said damages are not intended to enrich the plaintiff at the expense of a defendant, the award should nonetheless be commensurate to the suffering inflicted. In the instant case we are of the opinion that the reduction in moral damages from an amount of 0,444,444.44 to 744,444.44 by the Court of Appeals was not Iustified considering the nature of the resulting damage and the predictable sequelae of the inIury. As a result of the accident, !a. Lourdes 9alenzuela underwent a traumatic amputation of her left lower extremity at the distal left thigh Iust abo"e the &nee. 'ecause of this, 9alenzuela will fore"er be depri"ed of the full ambulatory functions of her left extremity, e"en with the use of state of the art prosthetic technology. +ell beyond the period of hospitalization ,which was paid for by Li/, she will be re8uired to undergo adIustments in her prosthetic de"ise due to the shrin&age of the stump from the process of healing. These adIustments entail costs, prosthetic replacements and months of physical and occupational rehabilitation and therapy. )uring her lifetime, the prosthetic de"ise will ha"e to be replaced and re.adIusted to changes in the size of her lower limb effected by the biological changes of middle.age, menopause and aging. Assuming she reaches menopause, for example, the prosthetic will ha"e to be adIusted to respond to the changes in bone resulting from a precipitate decrease in calcium le"els obser"ed in the bones of all post. menopausal women. In other words, the damage done to her would not only be permanent and lasting, it would also be permanently changing and adIusting to the physiologic changes which her body would normall$ undergo through the years. The replacements, changes, and adIustments will re8uire corresponding adIusti"e physical and occupational therapy. All of these adIustments, it has been documented, are painful. The foregoing discussion does not e"en scratch the surface of the nature of the resulting damage because it would be highly speculati"e to estimate the amount of psychological pain, damage and inIury which goes with the sudden se"ering of a "ital portion of the human body. A prosthetic de"ice, howe"er technologically ad"anced, will only allow a reasonable amount of functional restoration of the motor functions of the lower limb. The sensory functions are fore"er lost. The resultant anxiety, sleeplessness, psychological inIury, mental and physical pain are inestimable. As the amount of moral damages are subIect to this Court(s discretion, we are of the opinion that the amount of 0,444,444.44 granted by the trial court is in greater accord with the extent and nature of the inIury .. physical and psychological . suffered by 9alenzuela as a result of Li(s grossly negligent dri"ing of his !itsubishi Lancer in the early morning hours of the accident. B.EREFORE, @$!I#$# C;D#I)$@$), the decision of the court of Appeals is modified with the effect of @$ID#TATID: the Iudgment of the @egional Trial Court. +O ORDERED.

Damnum a"sque in5uria. Fnder this principle, the legitimate exercise of a person(s rights, e"en if it causes loss to another, does not automatically result in an actionable inIury. The law does not prescribe a remedy for the loss. This principle does not, howe"er, apply when there is an abuse of a person(s right, or when the exercise of this right is suspended or extinguished pursuant to a court order. Indeed, in the a"ailment of one(s rights, one must act with Iustice, gi"e others their due, and obser"e honesty and good faith.
0 e )"!e

'efore us is a etition for @e"iew under @ule -7 of the @ules of Court, assailing the April 60, 0111 )ecisionO0P of the Court of Appeals ,CA/ in CA.:@ C9 Do. -0-70, which set aside the Iudgment O6P of the @egional Trial Court ,@TC/ of Tanay, @izal. The @TC had earlier dismissed the Complaint for damages filed by herein respondents against petitioner. The dispositi"e portion of the challenged CA )ecision reads as follows< H+%$@$*;@$, the appealed )ecision is #$T A#I)$, and in its stead Iudgment is rendered ordering the defendant.appellee #ergio Amonoy to pay the plaintiffs.appellants 'runo and 'ernardina :utierrez as actual damages the sum of OtPwo OhPundred OfPifty OtPhousand OpPesos , 674,444.44/.J O=P Li&ewise assailed is the ;ctober 01, 0111 CA @esolution, O-P which denied the !otion for @econsideration.
0 e F"ct!

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The appellate court narrated the factual antecedents of this case as follows< HThis case had its roots in #pecial roceedings Do. =04= of 'ranch I of the C*I of asig, @izal, for the settlement of the estate of the deceased >ulio Cantolos, in"ol"ing six ,5/ parcels of land situated in Tanay, @izal. Amonoy was the counsel of therein *rancisca Catolos, Agnes Catolos, Asuncion asamba and Alfonso *ormilda. ;n 06 >anuary 0157, the roIect of artition submitted was appro"ed and x x x two ,6/ of the said lots were adIudicated to Asuncion asamba and Alfonso *ormilda. The attorney(s fees charged by Amonoy was 63,544.44 and on 64 >anuary 0157 Asuncion asamba and Alfonso *ormilda executed a deed of real estate mortgage on the said two ,6/ lots adIudicated to them, in fa"or of Amonoy to secure the payment of his attorney(s fees. 'ut it was only on 5 August 0151 after the taxes had been paid, the claims settled and the properties adIudicated, that the estate was declared closed and terminated. HAsuncion asamba died on 6- *ebruary 0151 while Alfonso *ornilda passed away on 6 >uly 0151. Among the heirs of the latter was his daughter, plaintiff.appellant Angela :utierrez. H'ecause his attorney(s fees thus secured by the two lots were not paid, on 60 >anuary 0134 Amonoy filed for their foreclosure in Ci"il Case Do. 06365 entitled0er'io Amono$ vs. 4eirs of Asuncion Pasam"a and 4eirs of Alfonso (ornilda before the C*I of asig, @izal, and this was assigned to 'ranch 9III. The heirs opposed, contending that the attorney(s fees charged OwereP unconscionable and that the agreed sum was only 00,517.16. 'ut on 62 #eptember 0136 Iudgment was rendered in fa"or of Amonoy re8uiring the heirs to pay within 14 days the 63,544.44 secured by the mortgage, 00,224.44 as "alue of the har"ests, and 1,5-7.44 as another round of attorney(s fees. *ailing in that, the two ,6/ lots would be sold at public auction. HThey failed to pay. ;n 5 *ebruary 013=, the said lots were foreclosed and on 6= !arch 013= the auction sale was held where Amonoy was the highest bidder at 6=,354.44. ;n 6 !ay 013= his bid was Iudicially Page82

G.R. No. 1CEC:E. Febr8"r$ 15 , :EE1 +ERG*O AMONOY, petitioner, vs. +#o8!e! 9O+E G20*ERRE; "n3 ANGELA FORN*LDA, respondents. /ANGAN*4AN, J.>

confirmed. A deficiency was claimed and to satisfy it another execution sale was conducted, and again the highest bidder was Amonoy at 06,0=3.74. HIncluded in those sold was the lot on which the :utierrez spouses had their house. H!ore than a year after the )ecision in Ci"il Case Do. 06365 was rendered, the said decedent(s heirs filed on 01 )ecember 013= before the C*I of asig, @izalO,P Ci"il Case Do. 023=0 entitled &aria Penano, et al vs. 0er'io Amono$, et al, a suit for the annulment thereof. The case was dismissed by the C*I on 3 Do"ember 0133, and this was affirmed by the Court of Appeals on 66 >uly 0120. HThereafter, the C*I on 67 >uly 0127 issued a +rit of ossession and pursuant to which a notice to "acate was made on 65 August 0127. ;n Amonoy(s motion of 6- April 0125, the ;rders of 67 April 0125 and 5 !ay 0125 were issued for the demolition of structures in the said lots, including the house of the :utierrez spouses. H;n 63 #eptember 0127 the petition entitled David (ornilda, et al vs Branch ,<= R>C /3th Pasi', Deput$ 0heriff ?oaquin Antonil and Att$. 0er'io Amono$, :.@. Do. L.36=45, was filed before the #upreme Court. Among the petitioners was the plaintiff.appellant Angela :utierrez. ;n a twin &usi$un ,!ahigpit na !usiyon ara apanagutin Laugnay ng aglalapastangan, and !usiyung !a&ahingi ng Ftos sa agpapapigil ng agpapagiba at ananagutin sa aglalapastangan/ with full titles as fanciful and elongated as their Petis$un' , etisyung !a&apagsuri Taglay and agpigil ng Ftos/, a temporary restraining order was granted on 6 >une 0125 enIoining the demolition of the petitioners( houses. HThen on 7 ;ctober 0122 a )ecision was rendered in the said :.@. Do. L.36=45 disposing that< H+%$@$*;@$, Certiorari is grantedA the ;rder of respondent Trial Court, dated 67 >uly 0127, granting a +rit of ossession, as well as its ;rders, dated 67 April 0125 and 05 !ay 0125, directing and authorizing respondent #heriff to demolish the houses of petitioners Angela and Leocadia *ornilda are hereby set aside, and the Temporary @estraining ;rder heretofore issued, is made permanent. The six ,5/ parcels of land herein contro"erted are hereby ordered returned to petitioners unless some of them ha"e been con"eyed to innocent third persons.JO7P 'ut by the time the #upreme Court promulgated the abo"e.mentioned )ecision, respondents( house had already been destroyed, supposedly in accordance with a +rit of )emolition ordered by the lower court. Thus, a Complaint for damages in connection with the destruction of their house was filed by respondents against petitioner before the @TC on )ecember 07, 0121. In its >anuary 63, 011= )ecision, the @TC dismissed respondents( suit. ;n appeal, the CA set aside the lower court(s ruling and ordered petitioner to pay respondents 674,444 as actual damages. etitioner then filed a !otion for @econsideration, which was also denied. %ence, this recourse.O5P
0 e *!!8e

0 e )o8rtF! R8'in%

The etition has no merit.

M"in *!!8e> Petitioner!s "ia#ility

+ell.settled is the maxim that damage resulting from the legitimate exercise of a person(s rights is a loss without inIury .. damnum a"sque in5uria .. for which the law gi"es no remedy.O1P In other words, one who merely exercises one(s rights does no actionable inIury and cannot be held liable for damages. etitioner in"o&es this legal precept in arguing that he is not liable for the demolition of respondents( house. %e maintains that he was merely acting in accordance with the +rit of )emolition ordered by the @TC. +e reIect this submission. Damnum a"sque in5uria finds no application to this case. True, petitioner commenced the demolition of respondents( house on !ay =4, 0125 under the authority of a +rit of )emolition issued by the @TC. 'ut the records show that a Temporary @estraining ;rder ,T@;/, enIoining the demolition of respondents( house, was issued by the #upreme Court on >une 6, 0125. The CA also found, based on the Certificate of #er"ice of the #upreme Court process ser"er, that a copy of the T@; was ser"ed on petitioner himself on >une -, 0125. etitioner, howe"er, did not heed the T@; of this Court. +e agree with the CA that he unlawfully pursued the demolition of respondents( house well until the middle of 0123. This is clear from @espondent Angela :utierrez(s testimony. The appellate court 8uoted the following pertinent portion thereof<O04P HB. ;n !ay =4, 0125, were they able to destroy your houseM A. Dot all, a certain portion only B. +as your house completely demolishedM A. Do, sir. B. %ow about the following dayM A. It was completely demolishedJ B. Fntil whenO,P !rs. +itnessM A. Fntil 0123. B. About what month of 0123M A. !iddle of the year. B. Can you tell the %onorable Court who completed the demolitionM A. The men of *iscal Amonoy.JO00P The foregoing dispro"es the claim of petitioner that the demolition, which allegedly commenced only on !ay =4, 0125, was completed the following day. It li&ewise belies his allegation that the demolitions had already ceased when he recei"ed notice of the T@;.

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In his !emorandum,O3P petitioner submits this lone issue for our consideration< H+hether or not the Court of Appeals was correct in deciding that the petitioner OwasP liable to the respondents for damagesJO2P

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Although the acts of petitioner may ha"e been legally Iustified at the outset, their continuation after the issuance of the T@; amounted to an insidious abuse of his right. Indubitably, his actions were tainted with bad faith. %ad he not insisted on completing the demolition, respondents would not ha"e suffered the loss

that engendered the suit before the @TC. 9erily, his acts constituted not onl$ an a"use of a ri'ht, "ut an invalid exercise of a ri'ht that had "een suspended when he recei"ed the T@; from this Court on >une -, 0125. 'y then, he was no longer entitled to proceed with the demolition. A commentator on this topic explains< HThe exercise of a right ends when the right disappears, and it disappears when it is abused, especially to the preIudice of others. The mas& of a right without the spirit of Iustice which gi"es it life, is repugnant to the modern concept of social law. It cannot be said that a person exercises a right when he unnecessarily preIudices another x x x. ;"er and abo"e the specific precepts of positi"e law are the supreme norms of Iustice x x xA and he who "iolates them "iolates the law. *or this reason, it is not permissible to abuse our rights to preIudice others.JO06P Li&ewise, in Al"enson !nterprises Corp. v. CA,O0=P the Court discussed the concept of abuse of rights as follows< HArticle 01, &nown to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which may be obser"ed not only in the exercise of one(s rights but also in the performance of one(s duties. These standards are the following< to act with IusticeA to gi"e e"eryone his dueA and to obser"e honesty and good faith. The law, therefore, recognizes the primordial limitation on all rights< that in their exercise, the norms of human conduct set forth in Article 01 must be obser"ed. A right, though by itself legal because recognized or granted by law as such, may ne"ertheless become the source of some illegality. +hen a right is exercised in a manner which does not conform with norms enshrined in Article 01 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible x x x.J Clearly then, the demolition of respondents( house by petitioner, despite his receipt of the T@;, was not onl$ an a"use "ut also an unla*ful exercise of such ri'ht . In insisting on his alleged right, he wantonly "iolated this Court(s ;rder and wittingly caused the destruction of respondents( house. ;b"iously, petitioner cannot in"o&e damnum a"sque in5uria, a principle premised on the "alid exercise of a right.O0-P Anything less or beyond such exercise will not gi"e rise to the legal protection that the principle accords. And when damage or preIudice to another is occasioned thereby, liability cannot be obscured, much less abated. In the ultimate analysis, petitioner(s liability is premised on the obligation to repair or to ma&e whole the damage caused to another by reason of one(s act or omission, whether done intentionally or negligently and whether or not punishable by law.O07P B.EREFORE, the petitioner. +O ORDERED. etition is D!N/!D and the appealed )ecision A((/R&!D. Costs against

The principal issue raised in this petition is whether or not mandamus is the proper remedy to compel a uni"ersity to confer a degree with honors. The secondary 8uestion is whether or not the refusal of that uni"ersity to confer honors would constitute bad faith so as to ma&e it liable for damages. ri"ate respondent >ennifer C. Lee filed an action for mandamus with damages against petitioners Fni"ersity of #an Carlos and 9ictoria A. #atorre, doc&eted as Ci"il Case Do. @66466 in the @egional Trial Court, 'ranch G9III, Cebu, as&ing that petitioners be compelled to confer upon her the degree of 'achelor of #cience in Commerce, maIor in Accounting, cum laude, retroacti"e to !arch 62, 0126, to execute and deli"er to her all necessary credentials e"idencing her graduation with honors, and to pay her moral damages in the amount of =44,444.44, exemplary damages in the amount of 74,444.44, and attorneyVs fees in the amount of 64,444.44. After trial, the lower court rendered its )ecision dated >anuary 61, 0125, 1 the dispositi"e portion of which reads as follows< +%$@$*;@$, Iudgment is hereby rendered in fa"or of plaintiff, and accordingly, defendants Fni"ersity of #an Carlos and )ean 9ictoria A. #atorre are ordered to confer upon plaintiff, >ennifer C. Lee, the degree of 'achelor of #cience in Commerce, maIor in accounting, with cum laude honors ,sic/, retroacti"e to !arch 62, 0126, and to execute and deli"er to plaintiff all the necessary school credentials e"idencing her graduation with such honorsA and said defendants are ordered to pay plaintiff Iointly and se"erally the sum of 37,444 as moral damages, the sum of 64,444 as exemplary damages, with interest thereon at 06R per annum beginning >uly 66, 0126, until said amounts are fully paid< and the sum of 07,444 as attorneyVs fees. The counterclaim is ordered dismissed. Costs against defendants. : etitioners appealed to the respondent Court of Appeals where the case was doc&eted as CA.:.@. Do. # . 41=52. In a decision dated !ay 62, 0123, the appellate court affirmed in toto the decision of the trial court. 3 The motion for reconsideration filed by petitioners was denied in a @esolution of the appellate court dated >uly 3, 0123. C %ence, this petition where petitioners allege as grounds thereof. ,a/ A uni"ersity may not be compelled by mandamus to grant graduation honors to any student who, according to the uni"ersityVs standards, rules and regulations, does not 8ualify for such honorsA and ,b/ The decision penalizing petitioners to pay excessi"e moral and exemplary damages and attorneyVs fees is not Iustified by the facts and circumstances of this case and disregards the many decisions of this %onorable Court setting reasonable standards and limits in the award of such damages. , . 6, petitionA p. 06, rollo/ ri"ate respondent enrolled in the College of Architecture, Fni"ersity of #an Carlos ,F#C/, during the first semester of school year 0132.31. At the end of the second semester of that school year, she obtained a grade of UI.C.U ,Incomplete/ in Architecture 060, and grades of U7VsU ,failures/ in Architecture 066 and Architecture 06=.

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G.R. No. 79:37 October 18, 1988 2N*VER+*0Y OF +AN )ARLO+ "n3 V*)0OR*A A. +A0ORRE petitioners, "s. )O2R0 OF A//EAL+ "n3 9ENN*FER ). LEE, respondents. GAN)AY)O, J.:

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The following school year, 0131.0124, she shifted to the College of Commerce of the F#C. #ome of the units she had completed when she was still an architecture student were then carried o"er and credited in her new course. As a commerce student, she obtained good grades. %owe"er, she was aware of her earlier failing grades in the College of Architecture and that the same would be ta&en into consideration in the e"aluation of her o"erall academic performance to determine if she could graduate with honors. #o, on )ecember 04, 0120, she wrote 5 the Council of )eans of the F#C, re8uesting that her grades of 7s in Architecture 060 and Architecture 066 be disregarded in the computation of her grade a"erage. #he wrote a similar letter to the !inistry of $ducation, Culture and #ports !$C# in @egion 9II on >anuary 7, 0126 6 and this letter was referred to the resident of the F#C for comment and return to the !$C#. In the =rd Indorsement dated *ebruary -, 0126, the resident of the F#C informed the !$C# that the uni"ersity policy was that any failing grade obtained by a student in any course would dis8ualify the student for honorsA that to de"iate from that policy would mean inIustice to students similarly situated before who were not allowed to graduate with honorsA that the bad grades gi"en to her were Iustified and could not be deleted or remo"ed because her subIects were not UdroppedU as re8uiredA that she had two failures and one incomplete grade which became a failure upon her inaction to attend to the incomplete grade within one yearA and that while her three failures did not affect her graduation from the College of Commerce, they nonetheless caused her dis8ualification from graduating with honors. #he was furnished a copy of said indorsement but she did not as& for a reconsideration. ;n !arch 03, 0126, when the F#C resident was out of town, pri"ate respondent wrote to the F#C @egistrarV re8uesting that her failing grades be changed. The F#C @egistrar 7 referred her letter to the !$C# and the re8uest for change of grades was appro"ed in a -th indorsement of !arch 66, 0126. 8 Thus, her grade of IC in Architecture 060 was changed to U0.1U by rofessor 9ictor Le"es >r. and the grades of U7U in Architecture 066 and Architecture 06= were changed to U+U ,+ithdrawn/. ;n !arch 6-, 0126, !r. !arcelo 'acalso of !$C#V %igher $ducation )i"ision disco"ered that the change of the grade of pri"ate respondent from UICU to U0.1U did not ha"e the supporting class record re8uired, so he wrote to !$C# #uper"isor !r. ;rtiz re8uesting the submission of the class record. 9 ;n !arch 62, 0126, the F#C held its graduation exercises, and the pri"ate respondent graduated with the degree of 'achelor of #cience in Commerce, maIor in Accounting, without honors. ;n !arch =0, 0126, the pri"ate respondent, assisted by counsel, demanded from )ean 9ictoria A. #atorre that she be allowed to graduate, cum laude. 1E )ean #atorre explained that the matter was held in abeyance pending compliance with certain re8uirements of the !$C# through the memo of !r. 'acalso. 11 ;n !ay 6-, 0126, Arch. Le"es >r., the teacher re8uired to produce the class records, reported he could not produce the same. 1: Thus, on !ay 63, 0126, )ean #atorre wrote to the !$C# @egional )irector Aurelio Tiro as&ing for the re"ocation of the change of grades of pri"ate respondent. 13 The re8uest was denied as there was no positi"e proof of fraud. 1C It is an accepted principle that schools of teaming are gi"en ample discretion to formulate rules and guidelines in the granting of honors for purposes of graduation. This is part of academic freedom. +ithin the parameters of these rules, it is within the competence of uni"ersities and colleges to determine who are entitled to the grant of honors among the graduating students. Its discretion on this academic matter may not be disturbed much less controlled by the courts unless there is gra"e abuse of discretion in its exercise.

In this case, the petitionerVs bulletin of information pro"ides all students and all other interested parties ad"ise on the Fni"ersity policies and rules on enrollment and academic achie"ements. Therein it is pro"ided, among others, that a student may not officially withdraw from subIects in the curriculum if he does not ha"e the written permission of his parents or guardian. 15 *or an incomplete grade, there must be an application for completion or remo"al within the period announced by the school calendar and when not remo"ed within one ,0/ year, it automatically becomes final. 16 A U)@U ,)ropped/ subIect which is in the same category, as a U7U dis8ualifies a student from recei"ing honors. 17 A candidate for honors should ha"e earned no less than 02 units per semester but a wor&ing student should earn no less that 06 units. A failure in any subIect dis8ualifies a student from honors. 18 :ood moral character and exemplary conduct are as important criteria for honors as academic achie"ements. 19 ri"ate respondent should &now and is presumed to &now those Fni"ersity policies and is bound to comply therewith. It is precisely because she &new of these rules that she exerted all efforts to ha"e her final grades of U7VsU in Architecture 066 and Architecture 06= be disregarded in the computation of honors. +hen her re8uest was denied by the uni"ersity, she did not as& for a reconsideration thereof. Instead, in the middle part of !arch 0126 when the F#C resident was out of town, she wrote another letter to the F#C registrar as&ing her failing grades be changed as abo"e related. The matter was referred to the !$C# and the re8uest was appro"ed on !arch 66,0126. %owe"er, when it was disco"ered thereafter that the change of pri"ate respondentVs grades from UICU T; U0.1U was not supported by the corresponding class records and its production was re8uired the same could not be produced. There is thus no Iustification for said change of grade. !oreo"er, the re8uest for the change of the grade of incomplete was not made by pri"ate respondent within one ,0/ year so that it became final according to the rules. 'y the same to&en, the change of the grades of pri"ate respondent from U7U to U+U ,+ithdrawn/ in Architecture 066 and Architecture 06= was without the written permission of her parents or guardian. Indeed, it is unusual that a student who got a U7U in a subIect, as in this case, should still be allowed to withdraw from such subIect. +ithdrawal from subIects is not ordinarily allowed after mid.term examination :E much less after a failing grade in the subIect has been recei"ed. The change of grades of pri"ate respondent is thus open to 8uestion. ;b"iously, pri"ate respondent employed undue and improper pressure on the !$C# authorities to appro"e the change of her grades to remo"e all obstacle to her graduation with honors. etitionersV claim that the change of grades of the pri"ate respondent was attended with fraud is not entirely misplaced. etitioners cannot be faulted for refusing to "est the honors demanded of them by the pri"ate respondent. ;ne failure would ha"e been sufficient to dis8ualify her but she had one incomplete and two failures. %er only change was to re"erse her failing grades. This she accomplished thru the bac& door. De"ertheless, e"en if she succeeded in remo"ing her failing grades, it was still within the sound discretion of the petitioners to determine whether pri"ate respondent was entitled to graduate with honors. The Court finds that petitioners did not commit a gra"e abuse of discretion in denying the honors sought by pri"ate respondent under the circumstances. Indeed, the aforesaid change of grades did not automatically entitle her to the award of honors. ri"ate respondent not ha"ing demonstrated that she has a clear legal right to the honors sought, her claim for damages must necessarily fail.

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+%$@$*;@$, the petition is :@ADT$) and the subIect decision of the respondent court of !ay 62, 0123 and its resolution of >uly 3, 0123, are hereby @$9$@#$) and #$T A#I)$ and another Iudgment is hereby rendered )I#!I##ID: the complaint without pronouncement as to costs. #; ;@)$@$).

+%$@$*;@$, from all the foregoing considerations, the Court finds helps )odge hils., Inc. to ha"e preponderantly pro"en its case and hereby orders 'arons !ar&eting, Inc. to pay helps )odge the following< 0. =,042,444.44 constituting the unpaid balance of defendant(s purchases from plaintiff and interest thereon at 06R per annum computed from the respecti"e expiration of the 54 day credit term, "is.Z."is the "arious sales in"oices andQor deli"ery receiptsA 6. 67R of the preceding obligation for and as attorney(s feesA =. 04,444.44 as exemplary damagesA

G. R. No. 1:6C86. Febr8"r$ 9, 1998 4ARON+ MAR1E0*NG )OR/., petitioner, vs. )O2R0 OF A//EAL+ "n3 /.EL/+ DODGE /.*L+., *N).respondents. 1A/2NAN, J.> The instant petition raises two issues< ,0/ whether or not pri"ate respondent is guilty of abuse of rightA and ,6/ whether or not pri"ate respondent is entitled to interest and attorney(s fees. The facts are undisputed< ;n August =0, 013=, plaintiff O helps )odge, hilippines, Inc. pri"ate respondent hereinP appointed defendant Opetitioner 'arons !ar&eting, CorporationP as one of its dealers of electrical wires and cables effecti"e #eptember 0, 013= ,$xh. A/. As such dealer, defendant was gi"en by plaintiff 54 days credit for its purchases of plaintiff(s electrical products. This credit term was to be rec&oned from the date of deli"ery by plaintiff of its products to defendant ,$xh. 0/. )uring the period co"ering )ecember 0125 to August 03, 0123, defendant purchased, on credit, from plaintiff "arious electrical wires and cables in the total amount of -,046,-=2.=4 ,$xh. ' to L/. These wires and cables were in turn sold, pursuant to pre"ious arrangements, by defendant to !$@ALC;, the former being the accredited supplier of the electrical re8uirements of the latter. Fnder the sales in"oices issued by plaintiff to defendant for the subIect purchases, it is stipulated that interest at 06R on the amount due for attorney(s fees and collection ,$xh. ''/.O0P ;n #eptember 3, 0123, defendant paid plaintiff the amount of =44,444.44 out of its total purchases as abo"e.stated ,$xh. #/, thereby lea"ing an unpaid account on the aforesaid deli"eries of =,246,-32.64. ;n se"eral occasions, plaintiff wrote defendant demanding payment of its outstanding obligations due plaintiff ,$xhs. L, !, D, and /. In response, defendant wrote plaintiff on ;ctober 7, 0123 re8uesting the latter if it could pay its outstanding account in monthly installments of 744,444.44 plus 0R interest per month commencing on ;ctober 07, 0123 until full payment ,$xh. ; and ;.-/. laintiff, howe"er, reIected defendant(s offer and accordingly reiterated its demand for the full payment of defendant(s account ,$xh. /.O6P ;n 61 ;ctober 0123, pri"ate respondent helps )odge hils., Inc. filed a complaint before the asig @egional Trial Court against petitioner 'arons !ar&eting Corporation for the reco"ery of =,246,-32.64 representing the "alue of the wires and cables the former had deli"ered to the latter, including interest. helps )odge li&ewise prayed that it be awarded attorney(s fees at the rate of 67R of the amount demanded, exemplary damages amounting to at least 044,444.44, the expenses of litigation and the costs of suit. etitioner, in its answer, admitted purchasing the wires and cables from pri"ate respondent but disputed the amount claimed by the latter. etitioner li&ewise interposed a counterclaim against pri"ate respondent, alleging that it suffered inIury to its reputation due to helps )odge(s acts. #uch acts were purportedly calculated to humiliate petitioner and constituted an abuse of rights. After hearing, the trial court on 03 >une 0110 rendered its decision, the dispositi"e portion of which reads<

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-. Costs of suit.O=P 'oth parties appealed to respondent court. ri"ate respondent claimed that the trial court should ha"e awarded it the sum of =,246,-32.64, the amount which appeared in the body of the complaint and pro"en during the trial rather than =,042,444.44. The latter amount appears in petitioner(s prayer supposedly as a result of a typographical error. ;n the other hand, petitioner reiterated its claims for damages as a result of Hcreditor(s abuse.J It also alleged that pri"ate respondent failed to pro"e its cause of action against it. ;n 67 >une 0115, the Court of Appeals rendered a decision modifying the decision of the trial court, thus< +%$@$*;@$, from all the foregoing considerations, the Court finds helps )odge hils., Inc. to ha"e preponderantly pro"en its case and hereby orders 'arons !ar&eting, Inc. to pay helps )odge the following< 0. =,246,-32.64 constituting the unpaid balance of defendant(s purchases from plaintiff and interest thereon at 06R per annum computed from the respecti"e expiration of the 54 day credit term, "is.Z."is the "arious sales in"oices andQor deli"ery receiptsA and 6. 7R of the preceding obligation for and as attorney(s fees. Do costs.O-P etitioner 'arons !ar&eting is now before this Court alleging that respondent court erred when it held ,0/ pri"ate respondent helps )odge not guilty of Hcreditor(s abuse,J and ,6/ petitioner liable to pri"ate respondent for interest and attorney(s fees. I. etitioner does not deny pri"ate respondent(s rights to institute an action for collection and to claim full payment. Indeed, petitioner(s right to file an action for collection is beyond ca"il.O7P Li&ewise, pri"ate respondent(s right to reIect petitioner(s offer to pay in installments is guaranteed by Article 06-2 of the Ci"il Code which states<

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A@T. 06-2. Fnless there is an express stipulation to that effect, the creditor cannot be compelled partially to recei"e the prestations in which the obligation consists. Deither may the debtor be re8uired to ma&e partial payments.

%owe"er, when the debt is in part li8uidated and in part unli8uidated, the creditor may demand and the debtor may effect the payment of the former without waiting for the li8uidation of the latter. Fnder this pro"ision, the prestation , i.e., the obIect of the obligation, must be performed in one act, not in parts. Tolentino concedes that the right has its limitations< /"rti"' /re!t"tion!. #ince the creditor cannot be compelled to accept partial performance, unless otherwise stipulated, the creditor who refuses to accept partial prestations does not incur in delay or mora accipiendi, except when there is abuse of right or if good faith re8uires acceptance.O5P Indeed, the law, as set forth in Article 01 of the Ci"il Code, prescribes a Hprimordial limitation on all rightsJ by setting certain standards that must be obser"ed in the exercise thereof .O3P Thus< A@T. 01. $"ery person must, in the exercise of his rights and in the performance of his duties, act with Iustice, gi"e e"eryone his due, and obser"e honesty and good faith. etitioner now in"o&es Article 01 and Article 60 O2P of the Ci"il Code, claiming that pri"ate respondent abused its rights when it reIected petitioner(s offer of settlement and subse8uently filed the action for collection considering< xxx that the relationship between the parties started in 013= spanning more than 0= years before the complaint was filed, that the petitioner had been a good and reliable dealer enIoying a good credit standing during the period before it became delin8uent in 0123, that the relationship between the parties had been a fruitful one especially for the pri"ate respondent, that the petitioner exerted its outmost efforts to settle its obligations and a"oid a suit, that the petitioner did not e"ade in the payment of its obligation to the pri"ate respondent, and that the petitioner was Iust as&ing a small concession that it be allowed to li8uidate its obligation to eight ,2/ monthly installments of 744,444.44 plus 0R interest per month on the balance which proposal was supported by post.dated chec&s.O1P $xpounding on its theory, petitioner states< In the ordinary course of e"ents, a suit for collection of a sum of money filed in court is done for the primary purpose of collecting a debt or obligation. If there is an offer by the debtor to pay its debt or obligation supported by post.dated chec&s and with pro"ision for interests, the normal response of a creditor would be to accept the offer of compromise and not file the suit for collection. It is of common &nowledge that proceedings in our courts would normally ta&e years before an action is finally settled. It is always wiser and more prudent to accept an offer of payment in installment rather than file an action in court to compel the debtor to settle his obligation in full in a single payment. xxx. xxx. +hy then did pri"ate respondent elect to file a suit for collection rather than accept petitioner(s offer of settlement, supported by post.dated chec&s, by paying monthly installments of 744,444.44 plus 0R per month commencing on ;ctober 07, 0123 until full paymentM The answer is ob"ious. The action of pri"ate respondent in filling a suit for collection was an abuse of right and exercised for the sole purpose of preIudicing and inIuring the petitioner.O04P

etitioner prays that the Court order pri"ate respondent to pay petitioner moral and exemplary damages, attorney(s fees, as well as the costs of suit. It li&ewise as&s that it be allowed to li8uidate its obligation to pri"ate respondent, without interests, in eight e8ual monthly installments. etitioner(s theory is untenable. 'oth parties agree that to constitute an abuse of rights under Article 01 the defendant must act with bad faith or intent to preIudice the plaintiff. They cite the following comments of Tolentino as their authority< 0e!t o& Ab8!e o& Ri% t. T !odern Iurisprudence does not permit acts which, although not unlawful, are anti.social. There is undoubtedly an abuse of right when it is exercised for the only purpose of preIudicing or inIuring another. +hen the obIecti"e of the actor is illegitimate, the illicit act cannot be concealed under the guise of exercising a right. The principle does not permit acts which, without utility or legitimate purpose cause damage to another, because they "iolate the concept of social solidarity which considers law as rational and Iust. %ence, e"ery abnormal exercise of a right, contrary to its socio.economic purpose, is an abuse that will gi"e rise to liability. The exercise of a right must be in accordance with the purpose for which it was established, and must not be excessi"e or unduly harshA there must be no intention to inIure another. Fltimately, howe"er, and in practice, courts, in the sound exercise of their discretion, will ha"e to determine all the facts and circumstances when the exercise of a right is unIust, or when there has been an abuse of right.O00P The 8uestion, therefore, is whether pri"ate respondent intended to preIudice or inIure petitioner when it reIected petitioner(s offer and filed the action for collection. +e hold in the negati"e. It is an elementary rule in this Iurisdiction that good faith is presumed and that the burden of pro"ing bad faith rests upon the party alleging the same. O06P In the case at bar, petitioner has failed to pro"e bad faith on the part of pri"ate respondent. etitioner(s allegation that pri"ate respondent was moti"ated by a desire to terminate its agency relationship with petitioner so that pri"ate respondent itself may deal directly with !eralco is simply not supported by the e"idence. At most, such supposition is merely speculati"e. !oreo"er, we find that pri"ate respondent was dri"en by "ery legitimate reasons for reIecting petitioner(s offer and instituting the action for collection before the trial court. As pointed out by pri"ate respondent, the corporation had its own Hcash position to protect in order for it to pay its own obligations.J This is not such Ha lame and poor rationalizationJ as petitioner purports it to be. *or if pri"ate respondent were to be re8uired to accept petitioner(s offer, there would be no reason for the latter to reIect similar offers from its other debtors. Clearly, this would be inimical to the interests of any enterprise, especially a profit.oriented one li&e pri"ate respondent. It is plain to see that what we ha"e here is a mere exercise of rights, not an a"use thereof. Fnder these circumstances, we do not deem pri"ate respondent to ha"e acted in a manner contrary to morals, good customs or public policy as to "iolate the pro"isions of Article 60 of the Ci"il Code. Conse8uently, petitioner(s prayer for moral and exemplary damages must thus be reIected. etitioner(s claim for moral damages is anchored on Article 6601 ,04/ of the Ci"il Code which states< A@T. 6601. !oral damages may be reco"ered in the following and analogous cases< ,04/ Acts and actions referred to in articles :1, 65, 63, 62, 61, =4, =6, =-, and =7. xxx.

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%a"ing ruled that pri"ate respondent(s acts did not transgress the pro"isions of Article 60, petitioner cannot be entitled to moral damages or, for that matter, exemplary damages. +hile the amount of exemplary damages need not be pro"ed, petitioner must show that he is entitled to 7or"', temperate or compensatory damages before the court may consider the 8uestion of whether or not exemplary damages should be awarded.O0=PAs we ha"e obser"ed abo"e, petitioner has failed to discharge this burden. It may not be amiss to state that petitioner(s contract with pri"ate respondent has the force of law between them.O0-P etitioner is thus bound to fulfill what has been expressly stipulated therein. O07P In the absence of any abuse of right, pri"ate respondent cannot be allowed to perform its obligation under such contract in parts. ;therwise, pri"ate respondent(s right under Article 06-2 will be negated, the sanctity of its contract with petitioner defiled. The principle of autonomy of contractsO05P must be respected. II. Fnder said contract, petitioner is liable to pri"ate respondent for the unpaid balance of its purchases from pri"ate respondent #'8! 1:G intere!t. ri"ate respondent(s sales in"oices expressly pro"ide that<

It is true that we ha"e upheld the reasonableness of penalties in the form of attorney(s fees consisting of twenty.fi"e percent ,67R/ of the principal debt plus interest.O64P In the case at bar, howe"er, the interest alone runs to some four and a half million pesos , -.7!/, e"en exceeding the principal debt amounting to almost four million pesos , -.4!/. Twenty fi"e percent ,67R/ of the principal and interest amounts to roughly two million pesos , 6!/. In real terms, therefore, the attorney(s fees and collection fees are manifestly exorbitant. Accordingly, we reduce the same to ten percent ,04R/ of the principal. ri"ate respondent, howe"er, argues that petitioner failed to 8uestion the award of attorney(s fees on appeal before respondent court and raised the issue only in its motion for reconsideration. Conse8uently, petitioner should be deemed to ha"e wai"ed its right to 8uestion such award. ri"ate respondent(s attempts to dissuade us from reducing the penalty are futile. The Court is clothed with ample authority to re"iew matters, e"en if they are not assigned as errors in their appeal, if it finds that their consideration is necessary in arri"ing at a Iust decision of the case. O60P B.EREFORE, the decision of the Court of Appeals is hereby !;)I*I$) in that the attorney(s and collection fees are reduced to ten percent ,04R/ of the principal but is A**I@!$) in all other respects. +O ORDERED. G.R. No. 13:3CC Febr8"r$ 17, :EEE 2N*VER+*0Y OF 0.E EA+0, petitioner, "s. ROMEO A. 9ADER, respondent. YNARE+-+AN0*AGO, J.: !ay an educational institution be held liable for damages for misleading a student into belie"ing that the latter had satisfied all the re8uirements for graduation when such is not the caseM This is the issue in the instant petition for re"iew premised on the following undisputed facts as summarized by the trial court and adopted by the Court of Appeals ,CA/,0 to wit< laintiff was enrolled in the defendantsV College of Law from 012- up to 0122. In the first semester of his last year ,#chool year 0123.0122/, he failed to ta&e the regular final examination in ractice Court I for which he was gi"en an incomplete grade ,$xhibits U6U, also $xhibit U%U/. %e enrolled for the second semester as fourth year law student ,$xhibit UAU/ and on *ebruary 0, 0122 he filed an application for the remo"al of the incomplete grade gi"en him by rofessor Carlos ;rtega ,$xhibits U%.6U, also $xhibit U6U/ which was appro"ed by )ean Celedonio Tiongson after payment of the re8uired fee. %e too& the examination on !arch 62, 0122. ;n !ay =4, 0122, rofessor Carlos ;rtega submitted his grade. It was a grade of fi"e ,7/. ,$xhibits U%.-U, also $xhibits U6.LU, U6.DU/.,)*phi,.n@t In the meantime, the )ean and the *aculty !embers of the College of Law met to deliberate on who among the fourth year students should be allowed to graduate. The plaintiffVs name appeared in the Tentati"e List of Candidates for graduation for the )egree of 'achelor of Laws ,LL.'/ as of #econd #emester ,0123.0122/ with the following annotation< >A)$@ @;!$; A. )ef. Conflict of Laws x.0.23.22, ractice Court I Inc., 0.23.22 C.0 to submit transcript with #.;. ,$xhibits U=U, U=.C.0U, U=.C.6U/.

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xxx. Interest at 06R per annum will be charged on all o"erdue account plus 67R on said amount for attorney(s fees and collection. xxx.O03P It may also be noted that the abo"e stipulation, insofar as it pro"ides for the payment of H67R on said amount for attorney(s fees and collection ,sic/,J constitutes what is &nown as a penal clause.O02P etitioner is thus obliged to pay such penalty in addition to the 06R annual interest, there being an express stipulation to that effect. etitioner ne"ertheless urges this Court to reduce the attorney(s fees for being Hgrossly excessi"e,J Hconsidering the nature of the case which is a mere action for collection of a sum of money.J It may be pointed out howe"er that the abo"e penalty is supposed to answer not only for attorney(s fees but for collection fees as well. !oreo"er< x x x the attorneys( fees here pro"ided is not, strictly spea&ing, the attorneys( fees reco"erable as between attorney and client spo&en of and regulated by the @ules of Court. @ather, the attorneys( fees here are in the nature of li8uidated damages and the stipulation therefor is aptly called a penal clause. It has been said that so long as such stipulation does not contra"ene law, morals, or public order, it is strictly binding upon defendant. The attorneys( fees so pro"ided are awarded in fa"or of the litigant, not his counsel. It is the litigant, not counsel, who is the Iudgment creditor entitled to enforce the Iudgment by execution.O01P Donetheless, courts are empowered to reduce such penalty if the same is Hini8uitous or unconscionable.J Article 0661 of the Ci"il Code states thus< A@T. 0661. The Iudge shall e8uitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. $"en if there has been no performance, the penalty may also be reduced by the courts if it is ini8uitous or unconscionable. ,Fnderscoring supplied./ The sentiments of the law are echoed in Article 6663 of the same Code< A@T. 6663. Li8uidated damages, whether intended as an indemnity or a penalty, shall be e8uitably reduced if they are ini8uitous or unconscionable.

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The =7th In"estitures ? Commencement Ceremonies for the candidates of 'achelor of Laws was scheduled on the 05th of April 0122 at =<44 oVcloc& in the afternoon, and in the in"itation for that occasion the name of the plaintiff appeared as one of the candidates. ,$xhibits U'U, U'.5U, U'.5. AU/. At the foot of the list of the names of the candidates there appeared howe"er the following annotation< This is a tentati"e list )egrees will be conferred upon these candidates who satisfactorily complete re8uirements as stated in the Fni"ersity 'ulletin and as appro"ed of the )epartment of $ducation, Culture and #ports ,$xhibit U'.3.AU/. The plaintiff attended the in"estiture ceremonies at *. dela Cruz Buadrangle, F.$., @ecto Campus, during the program of which he went up the stage when his name was called, escorted by her ,sic/ mother and his eldest brother who assisted in placing the %ood, and his Tassel was turned from left to right, and he was thereafter handed by )ean Celedonio a rolled white sheet of paper symbolical of the Law )iploma. %is relati"es too& pictures of the occasion ,$xhibits UCU to UC.5U, U).=U to U).00U/. %e tendered a blow.out that e"ening which was attended by neighbors, friends and relati"es who wished him good luc& in the forthcoming bar examination. There were pictures ta&en too during the blow.out ,$xhibits U)U to U).0U/. %e thereafter prepared himself for the bar examination. %e too& a lea"e of absence without pay from his Iob from April 64, 0122 to #eptember =4, 0122 ,$xhibit U:U/ and enrolled at the pre.bar re"iew class in *ar $astern Fni"ersity. ,$xhibits U*U to U*.6U/. %a"ing learned of the deficiency he dropped his re"iew class and was not able to ta&e the bar examination. 6 Conse8uently, respondent sued petitioner for damages alleging that he suffered moral shoc&, mental anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights when he was not able to ta&e the 0122 bar examinations arising from the latterVs negligence. %e prayed for an award of moral and exemplary damages, unrealized income, attorneyVs fees, and costs of suit. In its answer with counterclaim, petitioner denied liability arguing mainly that it ne"er led respondent to belie"e that he completed the re8uirements for a 'achelor of Laws degree when his name was included in the tentati"e list of graduating students. After trial, the lower court rendered Iudgment as follows< +%$@$*;@$, in "iew of the foregoing Iudgment is hereby rendered in fa"or of the plaintiff and against the defendant ordering the latter to pay plaintiff the sum of T%I@TC *I9$ T%;F#AD) *;F@ %FD)@$) #$9$DTC $#;# , =7,-34.44/ with legal rate of interest from the filing of the complaint until fully paid, the amount of *I9$ T%;F#AD) $#;# , 7,444.44/ as attorneyVs fees and the cost of suit. )efendantVs counterclaim is, for lac& of merit, hereby dismissed. #; ;@)$@$).= which on appeal by both parties was affirmed by the Court of Appeals ,CA/ with modification. The dispositi"e portion of the CA decision reads<

+%$@$*;@$, in the light of the foregoing, the lower CourtVs )ecision is hereby A**I@!$) with the !;)I*ICATI;D that defendant.appellee, in addition to the sum adIudged by the lower court in fa"or of plaintiff.appellant, is also ;@)$@$) to pay plaintiff.appellant the amount of *I*TC T%;F#AD) , 74,444.44/ $#;# for moral damages. Costs against defendant.appellee. #; ;@)$@$).Fpon the denial of its motion for reconsideration, petitioner F$ ele"ated the case to this Court on a petition for re"iew under @ule -7 of the @ules of Court, arguing that it has no liability to respondent @omeo A. >ader, considering that the proximate and immediate cause of the alleged damages incurred by the latter arose out of his own negligence in not "erifying from the professor concerned the result of his remo"al exam. The petition lac&s merit. +hen a student is enrolled in any educational or learning institution, a contract of education is entered into between said institution and the student. The professors, teachers or instructors hired by the school are considered merely as agents and administrators tas&ed to perform the schoolVs commitment under the contract. #ince the contracting parties are the school and the student, the latter is not duty.bound to deal with the formerVs agents, such as the professors with respect to the status or result of his grades, although nothing pre"ents either professors or students from sharing with each other such information. The Court ta&es Iudicial notice of the traditional practice in educational institutions wherein the professor directly furnishes hisQher students their grades. It is the contractual obligation of the school to timely inform and furnish sufficient notice and information to each and e"ery student as to whether he or she had already complied with all the re8uirements for the conferment of a degree or whether they would be included among those who will graduate. Although commencement exercises are but a formal ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational institutionVs way of announcing to the whole world that the students included in the list of those who will be conferred a degree during the baccalaureate ceremony ha"e satisfied all the re8uirements for such degree. rior or subse8uent to the ceremony, the school has the obligation to promptly inform the student of any problem in"ol"ing the latterVs grades and performance and also most importantly, of the procedures for remedying the same. etitioner, in belatedly informing respondent of the result of the remo"al examination, particularly at a time when he had already commenced preparing for the bar exams, cannot be said to ha"e acted in good faith. Absence of good faith must be sufficiently established for a successful prosecution by the aggrie"ed party in a suit for abuse of right under Article 01 of the Ci"il Code. :ood faith connotes an honest intention to abstain from ta&ing undue ad"antage of another, e"en though the forms and technicalities of the law, together with the absence of all information or belief of facts, would render the transaction unconscientious. 7 It is the school that has access to those information and it is only the school that can compel its professors to act and comply with its rules, regulations and policies with respect to the computation and the prompt submission of grades. #tudents do not exercise control, much less influence, o"er the way an educational institution should run its affairs, particularly in disciplining its professors and teachers and ensuring their compliance with the schoolVs rules and orders. 'eing the party that hired them, it is the school that exercises general super"ision and exclusi"e control o"er the professors with respect to the submission of reports in"ol"ing the studentsV standing. $xclusi"e control means that no other person or entity had any control o"er the instrumentality which caused the damage or inIury.5 The college dean is the senior officer responsible for the operation of an academic program, enforcement of rules and regulations, and the super"ision of faculty and student ser"ices.3 %e must see to it that his own professors and teachers, regardless of their status or position outside of the uni"ersity, must comply with the rules set by the latter. The negligent act of a professor who fails to obser"e the rules of the school, for

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instance by not promptly submitting a studentVs grade, is not only imputable to the professor but is an act of the school, being his employer. Considering further, that the institution of learning in"ol"ed herein is a uni"ersity which is engaged in legal education, it should ha"e practiced what it inculcates in its students, more specifically the principle of good dealings enshrined in Articles 01 and 64 of the Ci"il Code which states< Art. 01. $"ery person must, in the exercise of his rights and in the performance of his duties, act with Iustice, gi"e e"eryone his due, and obser"e honesty and good faith. Art. 64. $"ery person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same. Art. 01 was intended to expand the concept of torts by granting ade8uate legal remedy for the untold number of moral wrongs which is impossible for human foresight to pro"ide specifically in statutory law. 2 In ci"ilized society, men must be able to assume that others will do them no intended inIury that others will commit no internal aggressions upon themA that their fellowmen, when they act affirmati"ely will do so with due care which the ordinary understanding and moral sense of the community exacts and that those with whom they deal in the general course of society will act in good faith. The ultimate thing in the theory of liability is Iustifiable reliance under conditions of ci"ilized society.1 #chools and professors cannot Iust ta&e students for granted and be indifferent to them, for without the latter, the former are useless. $ducational institutions are duty.bound to inform the students of their academic status and not wait for the latter to in8uire from the former. The conscious indifference of a person to the rights or welfare of the personQpersons who may be affected by his act or omission can support a claim for damages.04 +ant of care to the conscious disregard of ci"il obligations coupled with a conscious &nowledge of the cause naturally calculated to produce them would ma&e the erring party liable.00 etitioner ought to ha"e &nown that time was of the essence in the performance of its obligation to inform respondent of his grade. It cannot feign ignorance that respondent will not prepare himself for the bar exams since that is precisely the immediate concern after graduation of an LL.'. graduate. It failed to act seasonably. etitioner cannot Iust gi"e out its studentVs grades at any time because a student has to comply with certain deadlines set by the #upreme Court on the submission of re8uirements for ta&ing the bar. etitionerVs liability arose from its failure to promptly inform respondent of the result of an examination and in misleading the latter into belie"ing that he had satisfied all re8uirements for the course. +orth 8uoting is the following dis8uisition of the respondent court< It is apparent from the testimony of )ean Tiongson that defendant.appellee Fni"ersity had been informed during the deliberation that the professor in ractice Court I ga"e plaintiff.appellant a failing grade. Cet, defendant.appellee still did not inform plaintiff.appellant of his failure to complete the re8uirements for the degree nor did they remo"e his name from the tentati"e list of candidates for graduation. +orse, defendant.appellee uni"ersity, despite the &nowledge that plaintiff.appellant failed in ractice Court I, a'ain included plaintiff.appellantVs name in the Utentati"e list of candidates for graduation which was prepared after the deliberation and which became the basis for the commencement rites program. )ean Tiongson reasons out that plaintiff. appellantVs name was allowed to remain in the tentati"e list of candidates for graduation in the hope that the latter would still be able to remedy the situation in the remaining few days before graduation day. )ean Tiongson, howe"er, did not explain how plaintiff appellant >ader could ha"e done something to complete his deficiency if defendant.appellee uni"ersity did not exert any effort to inform plaintiff.appellant of his failing grade in ractice Court I.06

etitioner cannot pass on its blame to the professors to Iustify its own negligence that led to the delayed relay of information to respondent. +hen one of two innocent parties must suffer, he through whose agency the loss occurred must bear it.0= The modern tendency is to grant indemnity for damages in cases where there is abuse of right, e"en when the act is not illicit.0- If mere fault or negligence in oneVs acts can ma&e him liable for damages for inIury caused thereby, with more reason should abuse or bad faith ma&e him liable. A person should be protected only when he acts in the legitimate exercise of his right, that is, when he acts with prudence and in good faith, but not when he acts with negligence or abuse.07 %owe"er, while petitioner was guilty of negligence and thus liable to respondent for the latterVs actual damages, we hold that respondent should not ha"e been awarded moral damages. +e do not agree with the Court of AppealsV findings that respondent suffered shoc&, trauma and pain when he was informed that he could not graduate and will not be allowed to ta&e the bar examinations. At the "ery least, it behoo"ed on respondent to "erify for himself whether he has completed all necessary re8uirements to be eligible for the bar examinations. As a senior law student, respondent should ha"e been responsible enough to ensure that all his affairs, specifically those pertaining to his academic achie"ement, are in order. :i"en these considerations, we fail to see how respondent could ha"e suffered untold embarrassment in attending the graduation rites, enrolling in the bar re"iew classes and not being able to ta&e the bar exams. If respondent was indeed humiliated by his failure to ta&e the bar, he brought this upon himself by not "erifying if he has satisfied all the re8uirements including his school records, before preparing himself for the bar examination. Certainly, ta&ing the bar examinations does not only entail a mental preparation on the subIects thereofA there are also prere8uisites of documentation and submission of re8uirements which the prospecti"e examinee must meet. +%$@$*;@$, the assailed decision of the Court of Appeals is A**I@!$) with !;)I*ICATI;D. etitioner is ;@)$@$) to AC respondent the sum of Thirty.fi"e Thousand *our %undred #e"enty esos , =7,-34.44/, with legal interest of 5R per annum computed from the date of filing of the complaint until fully paidA the amount of *i"e Thousand esos , 7,444.44/ as attorneyVs feesA and the costs of the suit. The award of moral damages is )$L$I$). #; ;@)$@$).

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G.R. No. L-:EE89 Dece7ber :6, 196C 4EA0R*; /. BA++MER, plaintiff.appellee, "s. FRAN)*+)O 6. VELE;, defendant.appellant. 4ENG;ON, 9./., J.: The facts that culminated in this case started with dreams and hopes, followed by appropriate planning and serious endea"ors, but terminated in frustration and, what is worse, complete public humiliation. *rancisco G. 9elez and 'eatriz . +assmer, following their mutual promise of lo"e, decided to get married and set #eptember -, 017- as the big day. ;n #eptember 6, 017- 9elez left this note for his bride.to.be< )ear 'et +ill ha"e to postpone wedding !y mother opposes it. Am lea"ing on the Con"air today. lease do not as& too many people about the reason why That would only create a scandal. Page82

a8uing 'ut the next day, #eptember =, he sent her the following telegram< D;T%ID: C%AD:$) @$#T A##F@$) @$TF@DID: 9$@C #;;D A ;L;:IE$ !A!A A A L;9$ . ALID: Thereafter 9elez did not appear nor was he heard from again. #ued by 'eatriz for damages, 9elez filed no answer and was declared in default. laintiff adduced e"idence before the cler& of court as commissioner, and on April 61, 0177, Iudgment was rendered ordering defendant to pay plaintiff 6,444.44 as actual damagesA 67,444.44 as moral and exemplary damagesA 6,744.44 as attorneyVs feesA and the costs. ;n >une 60, 0177 defendant filed a Upetition for relief from orders, Iudgment and proceedings and motion for new trial and reconsideration.U laintiff mo"ed to stri&e it cut. 'ut the court, on August 6, 0177, ordered the parties and their attorneys to appear before it on August 6=, 0177 Uto explore at this stage of the proceedings the possibility of arri"ing at an amicable settlement.U It added that should any of them fail to appear Uthe petition for relief and the opposition thereto will be deemed submitted for resolution.U ;n August 6=, 0177 defendant failed to appear before court. Instead, on the following day his counsel filed a motion to defer for two wee&s the resolution on defendants petition for relief. The counsel stated that he would confer with defendant in Cagayan de ;ro City the latterVs residence on the possibility of an amicable element. The court granted two wee&s counted from August 67, 0177. laintiff manifested on >une 07, 0175 that the two wee&s gi"en by the court had expired on #eptember 2, 0177 but that defendant and his counsel had failed to appear. Another chance for amicable settlement was gi"en by the court in its order of >uly 5, 0175 calling the parties and their attorneys to appear on >uly 0=, 0175. This time. howe"er, defendantVs counsel informed the court that chances of settling the case amicably were nil. ;n >uly 64, 0175 the court issued an order denying defendantVs aforesaid petition. )efendant has appealed to this Court. In his petition of >une 60, 0177 in the court a quo defendant alleged excusable negligence as ground to set aside the Iudgment by default. #pecifically, it was stated that defendant filed no answer in the belief that an amicable settlement was being negotiated. A petition for relief from Iudgment on grounds of fraud, accident, mista&e or excusable negligence, must be duly supported by an affida"it of merits stating facts constituting a "alid defense. ,#ec. =, @ule =2, @ules of Court./ )efendantVs affida"it of merits attached to his petition of >une 60, 0177 stated< UThat he has a good and "alid defense against plaintiffVs cause of action, his failure to marry the plaintiff as scheduled ha"ing been due to fortuitous e"ent andQor circumstances beyond his control.U An affida"it of merits li&e this stating mere conclusions or opinions instead of facts is not "alid. ,Cortes "s. Co 'un Lim, L.=165, ;ct. 04, 0170A 9aswani "s. . Tarrachand 'ros., L.07244, )ecember 61, 0154./

)efendant, howe"er, would contend that the affida"it of merits was in fact unnecessary, or a mere surplusage, because the Iudgment sought to be set aside was null and "oid, it ha"ing been based on e"idence adduced before the cler& of court. In ro"ince of Pan'asinan vs. Palisoc, L.05701, ;ctober =4, 0156, this Court pointed out that the procedure of designating the cler& of court as commissioner to recei"e e"idence is sanctioned by @ule =- ,now @ule ==/ of the @ules of Court. Dow as to defendantVs consent to said procedure, the same did not ha"e to be obtained for he was declared in default and thus had no standing in court ,9elez "s. @amas, -4 hil. 323A Alano "s. Court of *irst Instance, L.0-773, ;ctober =4, 0171/. In support of his Umotion for new trial and reconsideration,U defendant asserts that the Iudgment is contrary to law. The reason gi"en is that Uthere is no pro"ision of the Ci"il Code authorizingU an action for breach of promise to marry. Indeed, our ruling in 4ermosisima vs. Court of Appeals ,L.0-562, #ept. =4, 0154/, as reiterated in !stopa vs. Biansa$ ,L.0-3==, #ept. =4, 0154/, is that Umere breach of a promise to marryU is not an actionable wrong. +e pointed out that Congress deliberately eliminated from the draft of the new Ci"il Code the pro"isions that would ha"e it so. It must not be o"erloo&ed, howe"er, that the extent to which acts not contrary to law may be perpetrated with impunity, is not limitless for Article 60 of said Code pro"ides that Uany person who wilfully causes loss or inIury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.U The record re"eals that on August 6=, 017- plaintiff and defendant applied for a license to contract marriage, which was subse8uently issued ,$xhs. A, A.0/. Their wedding was set for #eptember -, 017-. In"itations were printed and distributed to relati"es, friends and ac8uaintances ,Tsn., 7A $xh. C/. The bride.to.beVs trousseau, party drsrses and other apparel for the important occasion were purchased ,Tsn., 3.2/. )resses for the maid of honor and the flower girl were prepared. A matrimonial bed, with accessories, was bought. 'ridal showers were gi"en and gifts recei"ed ,Tsn., 5A $xh. $/. And then, with but two days before the wedding, defendant, who was then 62 years old,< simply left a note for plaintiff stating< U+ill ha"e to postpone wedding !y mother opposes it ... U %e enplaned to his home city in !indanao, and the next day, the day before the wedding, he wired plaintiff< UDothing changed rest assured returning soon.U 'ut he ne"er returned and was ne"er heard from again. #urely this is not a case of mere breach of promise to marry. As stated, mere breach of promise to marry is not an actionable wrong. 'ut to formally set a wedding and go through all the abo"e.described preparation and publicity, only to wal& out of it when the matrimony is about to be solemnized, is 8uite different. This is palpably and unIustifiably contrary to good customs for which defendant must be held answerable in damages in accordance with Article 60 aforesaid. )efendant urges in his afore.stated petition that the damages awarded were excessi"e. Do 8uestion is raised as to the award of actual damages. +hat defendant would really assert hereunder is that the award of moral and exemplary damages, in the amount of 67,444.44, should be totally eliminated. er express pro"ision of Article 6601 ,04/ of the Dew Ci"il Code, moral damages are reco"erable in the cases mentioned in Article 60 of said Code. As to exemplary damages, defendant contends that the same could not be adIudged against him because under Article 66=6 of the Dew Ci"il Code the condition precedent is that Uthe defendant acted in a wanton, fraudulent, rec&less, oppressi"e, or male"olent manner.U The argument is de"oid of merit as under the abo"e.narrated circumstances of this case defendant clearly acted in a Uwanton ... , rec&less OandP oppressi"e manner.U This CourtVs opinion, howe"er, is that considering

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the particular circumstances of this case, 07,444.44 as moral and exemplary damages is deemed to be a reasonable award. @$!I#$# C;D#I)$@$), with the abo"e.indicated modification, the lower courtVs Iudgment is hereby affirmed, with costs. G.R. No. 97336 Febr8"r$ 19, 1993 GA+.EM +.OO1A0 4A1+., petitioner, "s. .ON. )O2R0 OF A//EAL+ "n3 MAR*LO2 0. GON;ALE+, respondents. DAV*DE, 9R., J.: This is an appeal by certiorari under @ule -7 of the @ules of Court see&ing to re"iew and set aside the )ecision 1of the respondent Court of Appeals in CA.:.@. C9 Do. 6-675 which affirmed in toto the 05 ;ctober 01=1 )ecision of 'ranch =2 ,Lingayen/ of the @egional Trial Court ,@TC/ of angasinan in Ci"il Case Do. 0574=. resented is the issue of whether or not damages may be reco"ered for a breach of promise to marry on the basis of Article 60 of the Ci"il Code of the hilippines. The antecedents of this case are not complicated< ;n 63 ;ctober 0123, pri"ate respondent, without the assistance of counsel, filed with the aforesaid trial court a complaint : for damages against the petitioner for the alleged "iolation of their agreement to get married. #he alleges in said complaint that< she is twenty.two ,66/ years old, single, *ilipino and a pretty lass of good moral character and reputation duly respected in her communityA petitioner, on the other hand, is an Iranian citizen residing at the Lozano Apartments, :uilig, )agupan City, and is an exchange student ta&ing a medical course at the Lyceum Dorthwestern Colleges in )agupan CityA before 64 August 0123, the latter courted and proposed to marry herA she accepted his lo"e on the condition that they would get marriedA they therefore agreed to get married after the end of the school semester, which was in ;ctober of that yearA petitioner then "isited the pri"ate respondentVs parents in 'aWaga, 'ugallon, angasinan to secure their appro"al to the marriageA sometime in 64 August 0123, the petitioner forced her to li"e with him in the Lozano ApartmentsA she was a "irgin before she began li"ing with himA a wee& before the filing of the complaint, petitionerVs attitude towards her started to changeA he maltreated and threatened to &ill herA as a result of such maltreatment, she sustained inIuriesA during a confrontation with a representati"e of the barangay captain of :uilig a day before the filing of the complaint, petitioner repudiated their marriage agreement and as&ed her not to li"e with him anymore andA the petitioner is already married to someone li"ing in 'acolod City. ri"ate respondent then prayed for Iudgment ordering the petitioner to pay her damages in the amount of not less than -7,444.44, reimbursement for actual expenses amounting to 544.44, attorneyVs fees and costs, and granting her such other relief and remedies as may be Iust and e8uitable. The complaint was doc&eted as Ci"il Case Do. 0574=. In his Answer with Counterclaim, 3 petitioner admitted only the personal circumstances of the parties as a"erred in the complaint and denied the rest of the allegations either for lac& of &nowledge or information sufficient to form a belief as to the truth thereof or because the true facts are those alleged as his #pecial and Affirmati"e )efenses. %e thus claimed that he ne"er proposed marriage to or agreed to be married with the pri"ate respondentA he neither sought the consent and appro"al of her parents nor forced her to li"e in his apartmentA he did not maltreat her, but only told her to stop coming to his place because he disco"ered that she had decei"ed him by stealing his money and passportA and finally, no confrontation too& place with a representati"e of the barangay captain. Insisting, in his Counterclaim, that the complaint is baseless and unfounded and that as a result thereof, he was unnecessarily dragged into court and compelled to incur

expenses, and has suffered mental anxiety and a besmirched reputation, he prayed for an award of 7,444.44 for miscellaneous expenses and 67,444.44 as moral damages. After conducting a pre.trial on 67 >anuary 0122, the trial court issued a re.Trial ;rder C embodying the stipulated facts which the parties had agreed upon, to wit< 0. That the plaintiff is single and resident ,sic/ of 'aWaga, 'ugallon, angasinan, while the defendant is single, Iranian citizen and resident ,sic/ of Lozano Apartment, :uilig, )agupan City since #eptember 0, 0123 up to the presentA 6. That the defendant is presently studying at Lyceum Dorthwestern, )agupan City, College of !edicine, second year medicine properA =. That the plaintiff is ,sic/ an employee at !abuhay Luncheonette , *ernandez A"enue, )agupan City since >uly, 0125 up to the present and a ,sic/ high school graduateA -. That the parties happened to &now each other when the manager of the !abuhay Luncheonette, >ohhny @abino introduced the defendant to the plaintiff on August =, 0125. After trial on the merits, the lower court, applying Article 60 of the Ci"il Code, rendered on 05 ;ctober 0121 a decision 5 fa"oring the pri"ate respondent. The petitioner was thus ordered to pay the latter damages and attorneyVs feesA the dispositi"e portion of the decision reads< ID T%$ LI:%T of the foregoing consideration, Iudgment is hereby rendered in fa"or of the plaintiff and against the defendant. 0. Condemning ,sic/ the defendant to pay the plaintiff the sum of twenty thousand , 64,444.44/ pesos as moral damages. 6. Condemning further the defendant to play the plaintiff the sum of three thousand , =,444.44/ pesos as attyVs fees and two thousand , 6,444.44/ pesos at ,sic/ litigation expenses and to pay the costs. =. All other claims are denied. 6 The decision is anchored on the trial courtVs findings and conclusions that ,a/ petitioner and pri"ate respondent were lo"ers, ,b/ pri"ate respondent is not a woman of loose morals or 8uestionable "irtue who readily submits to sexual ad"ances, ,c/ petitioner, through machinations, deceit and false pretenses, promised to marry pri"ate respondent, d/ because of his persuasi"e promise to marry her, she allowed herself to be deflowered by him, ,e/ by reason of that deceitful promise, pri"ate respondent and her parents in accordance with *ilipino customs and traditions made some preparations for the wedding that was to be held at the end of ;ctober 0123 by loo&ing for pigs and chic&ens, in"iting friends and relati"es and contracting sponsors, ,f/ petitioner did not fulfill his promise to marry her and ,g/ such acts of the petitioner, who is a foreigner and who has abused hilippine hospitality, ha"e offended our sense of morality, good customs, culture and traditions. The trial court ga"e full credit to the pri"ate respondentVs testimony

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because, inter alia, she would not ha"e had the temerity and courage to come to court and expose her honor and reputation to public scrutiny and ridicule if her claim was false. 7 The abo"e findings and conclusions were culled from the detailed summary of the e"idence for the pri"ate respondent in the foregoing decision, digested by the respondent Court as follows< According to plaintiff, who claimed that she was a "irgin at the time and that she ne"er had a boyfriend before, defendant started courting her Iust a few days after they first met. %e later proposed marriage to her se"eral times and she accepted his lo"e as well as his proposal of marriage on August 64, 0123, on which same day he went with her to her hometown of 'aWaga, 'ugallon, angasinan, as he wanted to meet her parents and inform them of their relationship and their intention to get married. The photographs $xhs. UAU to U$U ,and their submar&ings/ of defendant with members of plaintiffVs family or with plaintiff, were ta&en that day. Also on that occasion, defendant told plaintiffs parents and brothers and sisters that he intended to marry her during the semestral brea& in ;ctober, 0123, and because plaintiffVs parents thought he was good and trusted him, they agreed to his proposal for him to marry their daughter, and they li&ewise allowed him to stay in their house and sleep with plaintiff during the few days that they were in 'ugallon. +hen plaintiff and defendant later returned to )agupan City, they continued to li"e together in defendantVs apartment. %owe"er, in the early days of ;ctober, 0123, defendant would tie plaintiffVs hands and feet while he went to school, and he e"en ga"e her medicine at - oVcloc& in the morning that made her sleep the whole day and night until the following day. As a result of this li"e.in relationship, plaintiff became pregnant, but defendant ga"e her some medicine to abort the fetus. #till plaintiff continued to li"e with defendant and &ept reminding him of his promise to marry her until he told her that he could not do so because he was already married to a girl in 'acolod City. That was the time plaintiff left defendant, went home to her parents, and thereafter consulted a lawyer who accompanied her to the barangay captain in )agupan City. laintiff, her lawyer, her godmother, and a barangay tanod sent by the barangay captain went to tal& to defendant to still con"ince him to marry plaintiff, but defendant insisted that he could not do so because he was already married to a girl in 'acolod City, although the truth, as stipulated by the parties at the pre.trial, is that defendant is still single. laintiffVs father, a tricycle dri"er, also claimed that after defendant had informed them of his desire to marry !arilou, he already loo&ed for sponsors for the wedding, started preparing for the reception by loo&ing for pigs and chic&ens, and e"en already in"ited many relati"es and friends to the forthcoming wedding. 8 etitioner appealed the trial courtVs decision to the respondent Court of Appeals which doc&eted the case as CA.:.@. C9 Do. 6-675. In his 'rief, 9 he contended that the trial court erred ,a/ in not dismissing the case for lac& of factual and legal basis and ,b/ in ordering him to pay moral damages, attorneyVs fees, litigation expenses and costs. ;n 02 *ebruary 0110, respondent Court promulgated the challenged decision 1E affirming in toto the trial courtVs ruling of 05 ;ctober 0121. In sustaining the trial courtVs findings of fact, respondent Court made the following analysis<

*irst of all, plaintiff, then only 60 years old when she met defendant who was already 61 years old at the time, does not appear to be a girl of loose morals. It is uncontradicted that she was a "irgin prior to her unfortunate experience with defendant and ne"er had boyfriend. #he is, as described by the lower court, a barrio lass Unot used and accustomed to trend of modern urban lifeU, and certainly would ,sic/ not ha"e allowed Uherself to be deflowered by the defendant if there was no persuasi"e promise made by the defendant to marry her.U In fact, we agree with the lower court that plaintiff and defendant must ha"e been sweethearts or so the plaintiff must ha"e thought because of the deception of defendant, for otherwise, she would not ha"e allowed herself to be photographed with defendant in public in so ,sic/ lo"ing and tender poses as those depicted in the pictures $xhs. U)U and U$U. +e cannot belie"e, therefore, defendantVs pretense that plaintiff was a nobody to him except a waitress at the restaurant where he usually ate. )efendant in fact admitted that he went to plaintiffVs hometown of 'aWaga, 'ugallon, angasinan, at least thriceA at ,sic/ the town fiesta on *ebruary 63, 0123 ,p. 7-, tsn !ay 02, 0122/, at ,sic/ a beach party together with the manager and employees of the !abuhay Luncheonette on !arch =, 0123 ,p. 74, tsn id./, and on April 0, 0123 when he allegedly tal&ed to plaintiffVs mother who told him to marry her daughter ,pp. 77.75, tsn id./. +ould defendant ha"e left )agupan City where he was in"ol"ed in the serious study of medicine to go to plaintiffVs hometown in 'aWaga, 'ugallon, unless there was ,sic/ some &ind of special relationship between themM And this special relationship must indeed ha"e led to defendantVs insincere proposal of marriage to plaintiff, communicated not only to her but also to her parents, and ,sic/ !arites @abino, the owner of the restaurant where plaintiff was wor&ing and where defendant first proposed marriage to her, also &new of this lo"e affair and defendantVs proposal of marriage to plaintiff, which she declared was the reason why plaintiff resigned from her Iob at the restaurant after she had accepted defendantVs proposal ,pp. 5.3, tsn !arch 3, 0122/. Fpon the other hand, appellant does not appear to be a man of good moral character and must thin& so low and ha"e so little respect and regard for *ilipino women that he openly admitted that when he studied in 'acolod City for se"eral years where he finished his '.#. 'iology before he came to )agupan City to study medicine, he had a common.law wife in 'acolod City. In other words, he also li"ed with another woman in 'acolod City but did not marry that woman, Iust li&e what he did to plaintiff. It is not surprising, then, that he felt so little compunction or remorse in pretending to lo"e and promising to marry plaintiff, a young, innocent, trustful country girl, in order to satisfy his lust on her. 11 and then concluded< In sum, we are strongly con"inced and so hold that it was defendant.appellantVs fraudulent and decepti"e protestations of lo"e for and promise to marry plaintiff that made her surrender her "irtue and womanhood to him and to li"e with him on the honest and sincere belief that he would &eep said promise, and it was li&ewise these ,sic/ fraud and deception on appellantVs part that made plaintiffVs parents agree to their daughterVs li"ing.in with him preparatory to their supposed marriage. And as these acts of appellant are palpably and undoubtedly against morals, good customs, and public policy, and are e"en gra"ely and deeply derogatory and insulting to our women, coming as they do from a foreigner who has been enIoying the hospitality of our

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people and ta&ing ad"antage of the opportunity to study in one of our institutions of learning, defendant.appellant should indeed be made, under Art. 60 of the Ci"il Code of the hilippines, to compensate for the moral damages and inIury that he had caused plaintiff, as the lower court ordered him to do in its decision in this case. 1: Fnfazed by his second defeat, petitioner filed the instant petition on 65 !arch 0110A he raises therein the single issue of whether or not Article 60 of the Ci"il Code applies to the case at bar. 13 It is petitionerVs thesis that said Article 60 is not applicable because he had not committed any moral wrong or inIury or "iolated any good custom or public policyA he has not professed lo"e or proposed marriage to the pri"ate respondentA and he has ne"er maltreated her. %e criticizes the trial court for liberally in"o&ing *ilipino customs, traditions and culture, and ignoring the fact that since he is a foreigner, he is not con"ersant with such *ilipino customs, traditions and culture. As an Iranian !oslem, he is not familiar with Catholic and Christian ways. %e stresses that e"en if he had made a promise to marry, the subse8uent failure to fulfill the same is excusable or tolerable because of his !oslem upbringingA he then alludes to the !uslim Code which purportedly allows a !uslim to ta&e four ,-/ wi"es and concludes that on the basis thereof, the trial court erred in ruling that he does not posses good moral character. !oreo"er, his contro"ersial Ucommon law lifeU is now his legal wife as their marriage had been solemnized in ci"il ceremonies in the Iranian $mbassy. As to his unlawful cohabitation with the pri"ate respondent, petitioner claims that e"en if responsibility could be pinned on him for the li"e.in relationship, the pri"ate respondent should also be faulted for consenting to an illicit arrangement. *inally, petitioner asse"erates that e"en if it was to be assumed ar'uendo that he had professed his lo"e to the pri"ate respondent and had also promised to marry her, such acts would not be actionable in "iew of the special circumstances of the case. The mere breach of promise is not actionable. 1C ;n 65 August 0110, after the pri"ate respondent had filed her Comment to the petition and the petitioner had filed his @eply thereto, this Court ga"e due course to the petition and re8uired the parties to submit their respecti"e !emoranda, which they subse8uently complied with. As may be gleaned from the foregoing summation of the petitionerVs arguments in support of his thesis, it is clear that 8uestions of fact, which boil down to the issue of the credibility of witnesses, are also raised. It is the rule in this Iurisdiction that appellate courts will not disturb the trial courtVs findings as to the credibility of witnesses, the latter court ha"ing heard the witnesses and ha"ing had the opportunity to obser"e closely their deportment and manner of testifying, unless the trial court had plainly o"erloo&ed facts of substance or "alue which, if considered, might affect the result of the case. 15 etitioner has miserably failed to con"ince Fs that both the appellate and trial courts had o"erloo&ed any fact of substance or "alues which could alter the result of the case. $8ually settled is the rule that only 8uestions of law may be raised in a petition for re"iew on certiorari under @ule -7 of the @ules of Court. It is not the function of this Court to analyze or weigh all o"er again the e"idence introduced by the parties before the lower court. There are, howe"er, recognized exceptions to this rule. Thus, in&edina vs. Asistio, ?r., 16 this Court too& the time, again, to enumerate these exceptions< xxx xxx xxx ,0/ +hen the conclusion is a finding grounded entirely on speculation, surmises or conIectures ,>oa8uin ". Da"arro, 1= hil. 673 O017=P/A ,6/ +hen the inference made is manifestly mista&en, absurb or impossible ,Luna ". Linato&, 3- hil. 07 O01-6P/A ,=/ +here there is a gra"e abuse of discretion ,'uyco ". eople, 17 hil. -7= O0177P/A ,-/ +hen the Iudgment is based on a misapprehension of facts ,Cruz ". #osing,

L.-237, Do". 63, 017=/A ,7/ +hen the findings of fact are conflicting ,Casica ". 9illaseca, L.1714 Ap. =4, 0173A unrep./ ,5/ +hen the Court of Appeals, in ma&ing its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellate and appellee ,$"angelista ". Alto #urety and Insurance Co., 04= hil. -40 O0172P/A ,3/ The findings of the Court of Appeals are contrary to those of the trial court ,:arcia ". Court of Appeals, == #C@A 566 O0134PA #acay ". #andiganbayan, 0-6 #C@A 71= O0125P/A ,2/ +hen the findings of fact are conclusions without citation of specific e"idence on which they are based ,/"id.,/A ,1/ +hen the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondents ,/"id.,/A and ,04/ The finding of fact of the Court of Appeals is premised on the supposed absence of e"idence and is contradicted by the e"idence on record ,#alazar ". :utierrez, == #C@A 6-6 O0134P/. etitioner has not endea"ored to Ioint out to Fs the existence of any of the abo"e 8uoted exceptions in this case. Conse8uently, the factual findings of the trial and appellate courts must be respected. And now to the legal issue. The existing rule is that a breach of promise to marry per se is not an actionable wrong. 17 Congress deliberately eliminated from the draft of the Dew Ci"il Code the pro"isions that would ha"e made it so. The reason therefor is set forth in the report of the #enate Committees on the roposed Ci"il Code, from which +e 8uote< The elimination of this chapter is proposed. That breach of promise to marry is not actionable has been definitely decided in the case of )e >esus "s. #y8uia. 18 The history of breach of promise suits in the Fnited #tates and in $ngland has shown that no other action lends itself more readily to abuse by designing women and unscrupulous men. It is this experience which has led to the abolition of rights of action in the so.called %eart 'alm suits in many of the American states. . . . 19 This notwithstanding, the said Code contains a pro"ision, Article 60, which is designed to expand the concept of torts or quasiAdelict in this Iurisdiction by granting ade8uate legal remedy for the untold number of moral wrongs which is impossible for human foresight to specifically enumerate and punish in the statute boo&s. :E As the Code Commission itself stated in its @eport< 'ut the Code Commission had gone farther than the sphere of wrongs defined or determined by positi"e law. *ully sensible that there are countless gaps in the statutes, which lea"e so many "ictims of moral wrongs helpless, e"en though they ha"e actually suffered material and moral inIury, the Commission has deemed it necessary, in the interest of Iustice, to incorporate in the proposed Ci"il Code the following rule< Art. 6=. Any person who wilfully causes loss or inIury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage.

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An example will illustrate the pur"iew of the foregoing norm< UAU seduces the nineteen. year old daughter of UGU. A promise of marriage either has not been made, or can not be pro"ed. The girl becomes pregnant. Fnder the present laws, there is no crime, as the girl is abo"e nineteen years of age. Deither can any ci"il action for breach of promise of marriage be filed. Therefore, though the grie"ous moral wrong has been committed, and though the girl and family ha"e suffered incalculable moral damage, she and her parents cannot bring action for damages. 'ut under the proposed article, she and her parents would ha"e such a right of action. Thus at one stro&e, the legislator, if the forgoing rule is appro"ed, would "ouchsafe ade8uate legal remedy for that untold number of moral wrongs which it is impossible for human foresight to pro"ide for specifically in the statutes. :1 Article 6035 of the Ci"il Code, which defines a quasiAdelict thus< +hoe"er by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. #uch fault or negligence, if there is no pre.existing contractual relation between the parties, is called a quasiAdelict and is go"erned by the pro"isions of this Chapter. is limited to negligent acts or omissions and excludes the notion of willfulness or intent. BuasiA delict, &nown in #panish legal treatises as culpa aquiliana, is a ci"il law concept while torts is an Anglo.American or common law concept. >orts is much broader than culpa aquiliana because it includes not only negligence, but international criminal acts as well such as assault and battery, false imprisonment and deceit. In the general scheme of the hilippine legal system en"isioned by the Commission responsible for drafting the Dew Ci"il Code, intentional and malicious acts, with certain exceptions, are to be go"erned by the @e"ised enal Code while negligent acts or omissions are to be co"ered by Article 6035 of the Ci"il Code. :: In between these opposite spectrums are inIurious acts which, in the absence of Article 60, would ha"e been beyond redress. Thus, Article 60 fills that "acuum. It is e"en postulated that together with Articles 01 and 64 of the Ci"il Code, Article 60 has greatly broadened the scope of the law on ci"il wrongsA it has become much more supple and adaptable than the Anglo.American law on torts. :3 In the light of the abo"e laudable purpose of Article 60, +e are of the opinion, and so hold, that where a manVs promise to marry is in fact the proximate cause of the acceptance of his lo"e by a woman and his representation to fulfill that promise thereafter becomes the proximate cause of the gi"ing of herself unto him in a sexual congress, proof that he had, in reality, no intention of marrying her and that the promise was only a subtle scheme or decepti"e de"ice to entice or in"eigle her to accept him and to obtain her consent to the sexual act, could Iustify the award of damages pursuant to Article 60 not because of such promise to marry but because of the fraud and deceit behind it and the willful inIury to her honor and reputation which followed thereafter. It is essential, howe"er, that such inIury should ha"e been committed in a manner contrary to morals, good customs or public policy. In the instant case, respondent Court found that it was the petitionerVs Ufraudulent and decepti"e protestations of lo"e for and promise to marry plaintiff that made her surrender her "irtue and womanhood to him and to li"e with him on the honest and sincere belief that he would &eep said promise, and it was li&ewise these fraud and deception on appellantVs part that made plaintiffVs parents agree to their daughterVs li"ing.in with him preparatory to their supposed marriage.U :C In short, the pri"ate respondent surrendered her "irginity, the cherished possession of e"ery single *ilipina, not because of lust but because of moral

seduction the &ind illustrated by the Code Commission in its example earlier ad"erted to. The petitioner could not be held liable for criminal seduction punished under either Article ==3 or Article ==2 of the @e"ised enal Code because the pri"ate respondent was abo"e eighteen ,02/ years of age at the time of the seduction. rior decisions of this Court clearly suggest that Article 60 may be applied in a breach of promise to marry where the woman is a "ictim of moral seduction. Thus, in 4ermosisima vs. Court of Appeals, :5 this Court denied reco"ery of damages to the woman because< . . . we find oursel"es unable to say that petitioner is morall$ guilty of seduction, not only because he is approximately ten ,04/ years younger than the complainant who was around thirty.six ,=5/ years of age, and as highly enlightened as a former high school teacher and a life insurance agent are supposed to be when she became intimate with petitioner, then a mere apprentice pilot, but, also, because the court of first instance found that, complainant Usurrendered herselfU to petitioner because, Uo"erwhelmed by her lo"eU for him, she U*anted to "indU him "$ havin' a fruit of their en'a'ement even "efore the$ had the "enefit of cler'$. In >an5anco vs. Court of Appeals, :6 while this Court li&ewise hinted at possible reco"ery if there had been moral seduction, reco"ery was e"entually denied because +e were not con"inced that such seduction existed. The following enlightening dis8uisition and conclusion were made in the said case< The Court of Appeals seem to ha"e o"erloo&ed that the example set forth in the Code CommissionVs memorandum refers to a tort upon a minor who had been seduced. The essential feature is seduction, that in law is more than mere sexual intercourse, or a breach of a promise of marriageA it connotes essentially the idea of deceit, enticement, superior power or abuse of confidence on the part of the seducer to which the woman has yielded ,F.#. "s. 'uena"entura, 63 hil. 060A F.#. "s. Arlante, 1 hil. 717/. It has been ruled in the Buenaventura case ,supra/ that To constitute seduction there must in all cases be some sufficient promise or inducementand the *oman must $ield "ecause of the promise or other inducement. If she consents merely from carnal lust and the intercourse is from mutual desire, there is no seduction ,-= Cent. )ig. tit. #eduction, par. 75/ #he must be induced to depart from the path of "irtue by the use of some species of arts, persuasions and wiles, which are calculated to ha"e and do ha"e that effect, and which result in her person to ultimately submitting her person to the sexual embraces of her seducer ,63 hil. 06=/. And in American >urisprudence we find< ;n the other hand, in an action by the woman, the enticement, persuasion or deception is the essence of the inIuryA and a mere proof of intercourse is insufficient to warrant a reco"ery.

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Accordingly it is not seduction where the willingness arises out of sexual desire of curiosity of the female, and the defendant merely affords her the needed opportunity for the commission of the act. It has been emphasized that to allow a reco"ery in all such cases would tend to the demoralization of the female sex, and would be a reward for unchastity by which a class of ad"enturesses would be swift to profit. ,-3 Am. >ur. 556/ xxx xxx xxx ;"er and abo"e the partisan allegations, the fact stand out that for one whole year, from 0172 to 0171, the plaintiff.appellee, a woman of adult age, maintain intimate sexual relations with appellant, with repeated acts of intercourse. #uch conduct is incompatible with the idea of seduction. lainly there is here "oluntariness and mutual passionA for had the appellant been decei"ed, had she surrendered exclusi"ely because of the deceit, artful persuasions and wiles of the defendant, she would not ha"e again yielded to his embraces, much less for one year, without exacting early fulfillment of the alleged promises of marriage, and would ha"e cut short all sexual relations upon finding that defendant did not intend to fulfill his defendant did not intend to fulfill his promise. %ence, we conclude that no case is made under article 60 of the Ci"il Code, and no other cause of action being alleged, no error was committed by the Court of *irst Instance in dismissing the complaint. :7 In his annotations on the Ci"il Code, :8 Associate >ustice $dgardo L. aras, who recently retired from this Court, opined that in a breach of promise to marry where there had been carnal &nowledge, moral damages may be reco"ered< . . . if there be criminal or moral seduction, but not if the intercourse was due to mutual lust. ,%ermosisima "s. Court of Appeals, L.0-562, #ept. =4, 0154A $stopa "s. iansay, >r., L.0-3==, #ept. =4, 0154A 'atarra "s. !arcos, 3 hil. 75 ,sic/A 'eatriz :alang "s. Court of Appeals, et al., L.036-2, >an. 61, 0156/. ,In other words, if the CAF#$ be the promise to marry, and the $**$CT be the carnal &nowledge, there is a chance that there was criminal or moral seduction, hence reco"ery of moral damages will prosper. If it be the other way around, there can be no reco"ery of moral damages, because here mutual lust has inter"ened/. . . . together with UACTFAL damages, should there be any, such as the expenses for the wedding presentations ,#ee )omalagon ". 'olifer, == hil. -30/. #enator Arturo !. Tolentino is also of the same persuasion< It is submitted that the rule in Batarra vs. &arcos, still subsists, notwithstanding the incorporation of the present article 31 in the Code. The example gi"en by the Code Commission is correct, if there was seduction, not necessarily in the legal sense, but in the "ulgar sense of deception. 'ut when the sexual act is accomplished without any deceit or 8ualifying circumstance of abuse of authority or influence, but the woman, already of age, has &nowingly gi"en herself to a man, it cannot be said that there is an inIury which can be the basis for indemnity.
3E :9

Page | 40 +e are unable to agree with the petitionerVs alternati"e proposition to the effect that granting, for argumentVs
sa&e, that he did promise to marry the pri"ate respondent, the latter is ne"ertheless also at fault. According to him, both parties are in pari delictoA hence, pursuant to Article 0-06,0/ of the Ci"il Code and the doctrine laid down inBatarra vs. &arcos, 3: the pri"ate respondent cannot reco"er damages from the petitioner. The latter e"en goes as far as stating that if the pri"ate respondent had Usustained any inIury or damage in their relationship, it is primarily because of her own doing, 33 for< . . . #he is also interested in the petitioner as the latter will become a doctor sooner or later. Ta&e notice that she is a plain high school graduate and a mere employee . . . ,Annex UCU/ or a waitress ,T#D, p. 70, >anuary 67, 0122/ in a luncheonette and without doubt, is in need of a man who can gi"e her economic security. %er family is in dire need of financial assistance. ,T#D, pp. 70.7=, !ay 02, 0122/. And this predicament prompted her to accept a proposition that may ha"e been offered by the petitioner. 3C These statements re"eal the true character and moti"e of the petitioner. It is clear that he harbors a condescending, if not sarcastic, regard for the pri"ate respondent on account of the latterVs ignoble birth, inferior educational bac&ground, po"erty and, as percei"ed by him, dishonorable employment. ;b"iously then, from the "ery beginning, he was not at all mo"ed by good faith and an honest moti"e. !arrying with a woman so circumstances could not ha"e e"en remotely occurred to him. Thus, his profession of lo"e and promise to marry were empty words directly intended to fool, dupe, entice, beguile and decei"e the poor woman into belie"ing that indeed, he lo"ed her and would want her to be his lifeVs partner. %is was nothing but pure lust which he wanted satisfied by a *ilipina who honestly belie"ed that by accepting his proffer of lo"e and proposal of marriage, she would be able to enIoy a life of ease and security. etitioner clearly "iolated the *ilipinoVs concept of morality and brazenly defied the traditional respect *ilipinos ha"e for their women. It can e"en be said that the petitioner committed such deplorable acts in blatant disregard of Article 01 of the Ci"il Code which directs e"ery person to act with Iustice, gi"e e"eryone his due and obser"e honesty and good faith in the exercise of his rights and in the performance of his obligations. Do foreigner must be allowed to ma&e a moc&ery of our laws, customs and traditions. The pari delicto rule does not apply in this case for while indeed, the pri"ate respondent may not ha"e been impelled by the purest of intentions, she e"entually submitted to the petitioner in sexual congress not out of lust, but because of moral seduction. In fact, it is apparent that she had 8ualms of conscience about the entire episode for as soon as she found out that the petitioner was not going to marry her after all, she left him. #he is not, therefore, in pari delicto with the petitioner. Pari delicto means Uin e8ual faultA in a similar offense or crimeA e8ual in guilt or in legal fault.U 35 At most, it could be conceded that she is merely in delicto. Page82 $8uity often interferes for the relief of the less guilty of the parties, where his transgression has been brought about by the imposition of undue influence of the party on whom the burden of the original wrong principally rests, or where his consent to the

'ut so long as there is fraud, which is characterized by willfulness ,sic/, the action lies. The court, howe"er, must weigh the degree of fraud, if it is sufficient to decei"e the woman under the circumstances, because an act which would decei"e a girl sixteen years of age may not constitute deceit as to an experienced woman thirty years of age. 'ut so long as there is a wrongful act and a resulting inIury, there should be ci"il liability, e"en if the act is not punishable under the criminal law and there should ha"e been an ac8uittal or dismissal of the criminal case for that reason.

transaction was itself procured by fraud. 36 In &an'a$ao vs. %asud, 37 +e declared< Appellants li&ewise stress that both parties being at fault, there should be no action by one against the other ,Art. 0-06, Dew Ci"il Code/. This rule, howe"er, has been interpreted as applicable only where the fault on both sides is, more or less, e8ui"alent. It does not apply where one party is literate or intelligent and the other one is not. ,c.f. 'ough "s. Canti"eros, -4 hil. 641/. +e should stress, howe"er, that while +e find for the pri"ate respondent, let it not be said that this Court condones the deplorable beha"ior of her parents in letting her and the petitioner stay together in the same room in their house after gi"ing appro"al to their marriage. It is the solemn duty of parents to protect the honor of their daughters and infuse upon them the higher "alues of morality and dignity. +%$@$*;@$, finding no re"ersible error in the challenged decision, the instant petition is hereby )$DI$), with costs against the petitioner. #; ;@)$@$).

the "icinity of the #an >uan de )ios %ospital in asay City and brought her to a motel where she was raped. The court a quo, which adopted her e"idence, summarized the same which we paraphrased as follows< laintiff was 65 years old on Do"ember 7, 013- when she testified, single and had finished a college course in Commerce ,t.s.n., p. -, Do". 7, 013-/. It appears that on #eptember 2, 013=, at about -<44 oVcloc& in the afternoon, while she was wal&ing along *igueras #treet, asay City on her way to the #an >uan de )ios Canteen to ta&e her snac&, defendant, Conrado 'unag, >r., came riding in a car dri"en by a male companion. laintiff and defendant 'unag, >r. were sweethearts, but two wee&s before #eptember 2, 013=, they had a 8uarrel, and 'unag, >r. wanted to tal& matters o"er with plaintiff, so that he in"ited her to ta&e their merienda at the Aristocrat @estaurant in !anila instead of at the #an >uan de )ios Canteen, to which plaintiff obliged, as she belie"ed in his sincerity ,t.s.n., pp. 2.04, Do". 7, 013-/. laintiff rode in the car and too& the front seat beside the dri"er while 'unag, >r. seated himself by her right side. The car tra"elled north on its way to the Aristocrat @estaurant but upon reaching #an >uan #treet in asay City, it turned abruptly to the right, to which plaintiff protested, but which the duo ignored and instead threatened her not to ma&e any noise as they were ready to die and would bump the car against the post if she persisted. *rightened and silenced, the car tra"elled its course thru *.'. %arrison 'oule"ard until they reached a motel. laintiff was then pulled and dragged from the car against her will, and amidst her cries and pleas. In spite of her struggle she was no match to the Ioint strength of the two male combatants because of her natural wea&ness being a woman and her small stature. $"entually, she was brought inside the hotel where the defendant 'unag, >r. deflowered her against her will and consent. #he could not fight bac& and repel the attac& because after 'unag, >r. had forced her to lie down and embraced her, his companion held her two feet, remo"ed her panty, after which he left. 'unag, >r. threatened her that he would as& his companion to come bac& and hold her feet if she did not surrender her womanhood to him, thus he succeeded in feasting on her "irginity. laintiff described the pains she felt and how blood came out of her pri"ate parts after her "agina was penetrated by the penis of the defendant 'unag, >r. ,t.s.n. pp. 03.6-, Do". 7, 013-/. After that outrage on her "irginity, plaintiff as&ed 'unag, >r. once more to allow her to go home but the latter would not consent and stated that he would only let her go after they were married as he intended to marry her, so much so that she promised not to ma&e any scandal and to marry him. Thereafter, they too& a

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G.R. No. 1E17C9 98'$ 1E, 199: )ONRADO 42NAG, 9R., petitioner, "s. .ON. )O2R0 OF A//EAL+, Fir!t Di(i!ion, "n3 ;ENA*DA 4. )*R*LO, respondents. REGALADO, J.: etitioner appeals for the re"ersal of the decision 1 of respondent Court of Appeals promulgated on !ay 03, 0110 in CA.:.@. C9 Do. 4347-, entitled UEenaida '. Cirilo "s. Conrado 'unag, #r. and Conrado 'unag, >r.,U which affirmed in toto the decision of the @egional Trial Court, 'ranch GI at 'acoor, Ca"ite, and, implicitly, respondent courtVs resolution of #eptember =, 0110 : denying petitionerVs motion for reconsideration. @espondent court ha"ing assiduously discussed the salient antecedents of this case, visAaAvis the factual findings of the court below, the e"idence of record and the contentions of the parties, it is appropriate that its findings, which we appro"e and adopt, be extensi"ely reproduced hereunder< 'ased on the e"idence on record, the following facts are considered indisputable< ;n the afternoon of #eptember 2, 013=, defendant.appellant 'unag, >r. brought plaintiff. appellant to a motel or hotel where they had sexual intercourse. Later that e"ening, said defendant.appellant brought plaintiff.appellant to the house of his grandmother >uana de Leon in amplona, Las iWas, !etro !anila, where they li"ed together as husband and wife for 60 days, or until #eptember 61, 013=. ;n #eptember 04, 013=, defendant.appellant 'unag, >r. and plaintiff.appellant filed their respecti"e applications for a marriage license with the ;ffice of the Local Ci"il @egistrar of 'acoor, Ca"ite. ;n ;ctober 0, 013=, after lea"ing plaintiff.appellant, defendant.appellant 'unag, >r. filed an affida"it withdrawing his application for a marriage license. laintiff.appellant contends that on the afternoon of #eptember 2, 013=, defendant. appellant 'unag, >r., together with an unidentified male companion, abducted her in

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taxi together after the car that they used had already gone, and proceeded to the house of >uana de Leon, 'unag, >r.Vs grandmother in amplona, Las iWas, !etro !anila where they arri"ed at 1<=4 oVcloc& in the e"ening ,t.s.n., p. 65, Do". 7, 013-/. At about ten ,04/ oVcloc& that same e"ening, defendant Conrado 'unag, #r., father of 'unag, >r. arri"ed and assured plaintiff that the following day which was a !onday, she and 'unag, >r. would go to 'acoor, to apply for a marriage license, which they did. They filed their applications for marriage license ,$xhibits UAU and UCU/ and after that plaintiff and defendant 'unag, >r. returned to the house of >uana de Leon and li"ed there as husband and wife from #eptember 2, 013= to #eptember 61, 013=. ;n #eptember 61, 013= defendant 'unag, >r. left and ne"er returned, humiliating plaintiff and compelled her to go bac& to her parents on ;ctober =, 013=. laintiff was ashamed when she went home and could not sleep and eat because of the deception done against her by defendants.appellants ,t.s.n., p. =7, Do". 7, 013-/. The testimony of plaintiff was corroborated in toto by her uncle, 9i"encio 'ansagan who declared that on #eptember 2, 013= when plaintiff failed to arri"e home at 1<44 oVcloc& in the e"ening, his sister who is the mother of plaintiff as&ed him to loo& for her but his efforts pro"ed futile, and he told his sister that plaintiff might ha"e married ,ba&a nag.asawa, t.s.n., pp. 7.5, !arch 02, 0135/. %owe"er, in the afternoon of the next day ,#unday/, his sister told him that *rancisco Cabrera, accompanied by barrio captain >acinto !analili of Ligas, 'acoor, Ca"ite, informed her that plaintiff and 'unag, >r. were in CabreraVs house, so that her sister re8uested him to go and see the plaintiff, which he did, and at the house of !rs. >uana de Leon in amplona, Las iWas, !etro !anila he met defendant Conrado 'unag, #r., who told him, U are, the children are here already. Let us settle the matter and ha"e them married.U %e conferred with plaintiff who told him that as she had already lost her honor, she would bear her sufferings as 'oy 'unag, >r. and his father promised they would be married. )efendants.appellants, on the other hand, deny that defendant.appellant Conrado 'unag, >r. abducted and raped plaintiff.appellant on #eptember 2, 013=. ;n the contrary, plaintiff.appellant and defendant.appellant 'unag, >r. eloped on that date because of the opposition of the latterVs father to their relationship. )efendant.appellants claim that defendant.appellant 'unag, >r. and plaintiff.appellant had earlier made plans to elope and get married, and this fact was &nown to their friends, among them, Architect Chito @odriguez. The couple made good their plans to

elope on the afternoon of #eptember 2, 013=, when defendant.appellant 'unag, >r., accompanied by his friend :uillermo @amos, >r., met plaintiff.appellant and her officemate named Lydia in the "icinity of the #an >uan de )ios %ospital. The foursome then proceeded to ,the/ aforesaid hospitalVs canteen where they had some snac&s. Later, :uillermo @amos, >r. too& Lydia to Buirino A"enue where she could get a ride home, thereby lea"ing the defendant.appellant 'unag, >r. and plaintiff.appellant alone. According to defendant.appellant 'unag, >r., after :uillermo @amos, >r. and Lydia left, he and plaintiff.appellant too& a taxi to the :olden :ate and *lamingo %otels where they tried to get a room, but these were full. They finally got a room at the %oliday %otel, where defendant.appellant registered using his real name and residence certificate number. Three hours later, the couple chec& out of the hotel and proceeded to the house of >uana de Leon at amplona, Las iWas, where they stayed until #eptember 01, 023=. )efendant.appellant claims that bitter disagreements with the plaintiff.appellant o"er money and the threats made to his life prompted him to brea& off their plan to get married. )uring this period, defendant.appellant 'unag, #r. denied ha"ing gone to the house of >uan de Leon and telling plaintiff.appellant that she would be wed to defendant. appellant 'unag, >r. In fact, he phoned Atty. Conrado Adreneda, member of the board of directors of !andala Corporation, defendant.appellant 'unag, >r.Vs employer, three times between the e"ening of #eptember 2, 013= and #eptember 1, 013= in8uiring as to the whereabouts of his son. %e came to &now about his sonVs whereabouts when he was told of the coupleVs elopement late in the afternoon of #eptember 1, 013= by his mother Candida :awaran. %e li&ewise denied ha"ing met relati"es and emissaries of plaintiff.appellant and agreeing to her marriage to his son. 3 A complaint for damages for alleged breach of promise to marry was filed by herein pri"ate respondent Eenaida '. Cirilo against petitioner Conrado 'unag, >r. and his father, Conrado 'unag, #r., as Ci"il Case Do. D.6462 of the @egional Trial Court, 'ranch GIG at 'acoor, Ca"ite. ;n August 64, 012=, on a finding, inter alia, that petitioner had forcibly abducted and raped pri"ate respondent, the trial court rendered a decision C ordering petitioner 'unag, >r. to pay pri"ate respondent 24,444.44 as moral damages, 64,444.44 as exemplary damages, 64,444.44 by way of temperate damages, and 04,444.44 for and as attorneyVs fees, as well as the costs of suit. )efendant Conrado 'unag, #r. was absol"ed from any and all liability. ri"ate respondent appealed that portion of the lower courtVs decision disculpating Conrado 'unag, #r. from ci"il liability in this case. ;n the other hand, the 'unags, as defendants.appellants, assigned in their appeal se"eral errors allegedly committed by trial court, which were summarized by respondent court as follows< ,0/ in finding that defendant.appellant Conrado 'unag, >r. forcibly abducted and raped plaintiff.appellantA ,6/ in finding that defendants.appellants promised plaintiff.appellant that she would be wed to defendant.appellant Conrado 'unag, >r.A and ,=/ in awarding plaintiff.appellant damages for the breach of defendants.appellantsV promise of marriage. 5 As stated at the outset, on !ay 03, 0110 respondent Court of Appeals rendered Iudgment dismissing both appeals and affirming in toto the decision of the trial court. %is motion for reconsideration ha"ing been denied, petitioner 'unag, >r. is before us on a petition for re"iew, contending that ,0/ respondent court failed to consider "ital exhibits, testimonies and incidents for petitionerVs defense, resulting in the misapprehensions of facts and "iolati"e of the law on preparation of IudgmentA and ,6/ it erred in the application of the proper law and Iurisprudence by holding that there was forcible abduction with rape, not Iust a simple elopement and an agreement to marry, and in the award of excessi"e damages. 6

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etitioner 'unag, >r. first contends that both the trial and appellate courts failed to ta&e into consideration the alleged fact that he and pri"ate respondent had agreed to marry, and that there was no case of forcible abduction with rape, but one of simple elopement and agreement to marry. It is a"erred that the agreement to marry has been sufficiently pro"en by the testimonies of the witnesses for both parties and the exhibits presented in court. This submission, therefore, clearly hinges on the credibility of the witnesses and e"idence presented by the parties and the weight accorded thereto in the factual findings of the trial court and the Court of Appeals. In effect, what petitioner would want this Court to do is to e"aluate and analyze anew the e"idence, both testimonial and documentary, presented before and calibrated by the trial court, and as further meticulously re"iewed and discussed by respondent court. The issue raised primarily and ineluctably in"ol"es 8uestions of fact. +e are, therefore, once again constrained to stress the well.entrenched statutory and Iurisprudential mandate that findings of fact of the Court of Appeals are, as a rule, conclusi"e upon this Court. ;nly 8uestions of law, distinctly set forth, may be raised in a petition for re"iew on certiorari under @ule -7 of the @ules of Court, subIect to clearly settled exceptions in case law. ;ur Iurisdiction in cases brought to us from the Court of Appeals is limited to re"iewing and re"ising the errors of law imputed to the latter, its findings of fact being conclusi"e. This Court has emphatically declared that it is not its function to analyze or weigh such e"idence all o"er again, its Iurisdiction being limited to re"iewing errors of law that might ha"e been committed by the lower court. 'arring, therefore, a showing that the findings complained of are totally de"oid of support in the record, or that they are so glaringly erroneous as to constitute serious abuse of discretion, such findings must stand, for this Court is not expected or re8uired to examine or contrast the oral and documentary e"idence submitted by the parties. 7 Deither does the instant case re"eal any feature falling within, any of the exceptions which under our decisional rules may warrant a re"iew of the factual findings of the Court of Appeals. ;n the foregoing considerations and our re"iew of the records, we sustain the holding of respondent court in fa"or of pri"ate respondent. etitioner li&ewise asserts that since action in"ol"es a breach of promise to marry, the trial court erred in awarding damages. It is true that in this Iurisdiction, we adhere to the time.honored rule that an action for breach of promise to marry has no standing in the ci"il law, apart from the right to reco"er money or property ad"anced by the plaintiff upon the faith of such promise. 8 :enerally, therefore, a breach of promise to marry per se is not actionable, except where the plaintiff has actually incurred expenses for the wedding and the necessary incidents thereof. %owe"er, the award of moral damages is allowed in cases specified in or analogous to those pro"ided in Article 6601 of the Ci"il Code. Correlati"ely, under Article 60 of said Code, in relation to paragraph 04 of said Article 6601, any person who wilfully causes loss or inIury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for moral damages. 9 Article 60 was adopted to remedy the countless gaps in the statutes which lea"e so many "ictims of moral wrongs helpless e"en though they ha"e actually suffered material and moral inIury, and is intended to "ouchsafe ade8uate legal remedy for that untold number of moral wrongs which is impossible for human foresight to specifically pro"ide for in the statutes. 1E Fnder the circumstances obtaining in the case at bar, the acts of petitioner in forcibly abducting pri"ate respondent and ha"ing carnal &nowledge with her against her will, and thereafter promising to marry her in

order to escape criminal liability, only to thereafter renege on such promise after cohabiting with her for twenty.one days, irremissibly constitute acts contrary to morals and good customs. These are grossly insensate and reprehensible transgressions which indisputably warrant and abundantly Iustify the award of moral and exemplary damages, pursuant to Article 60 in relation to paragraphs = and 04, Article 6601, and Article 6661 and 66=- of Ci"il Code. etitioner would, howe"er, belabor the fact that said damages were awarded by the trial court on the basis of a finding that he is guilty of forcible abduction with rape, despite the prior dismissal of the complaint therefor filed by pri"ate respondent with the asay City *iscalVs ;ffice. :enerally, the basis of ci"il liability from crime is the fundamental postulate of our law that e"ery person criminally liable for a felony is also ci"illy liable. In other words, criminal liability will gi"e rise to ci"il liability ex delicto only if the same felonious act or omission results in damage or inIury to another and is the direct and proximate cause thereof. 11 %ence, extinction of the penal action does not carry with it the extinction of ci"il liability unless the extinction proceeds from a declaration in a final Iudgment that the fact from which the ci"il might arise did not exist. 1: In the instant case, the dismissal of the complaint for forcible abduction with rape was by mere resolution of the fiscal at the preliminary in"estigation stage. There is no declaration in a final Iudgment that the fact from which the ci"il case might arise did not exist. Conse8uently, the dismissal did not in any way affect the right of herein pri"ate respondent to institute a ci"il action arising from the offense because such preliminary dismissal of the penal action did not carry with it the extinction of the ci"il action. The reason most often gi"en for this holding is that the two proceedings in"ol"ed are not between the same parties. *urthermore, it has long been emphasized, with continuing "alidity up to now, that there are different rules as to the competency of witnesses and the 8uantum of e"idence in criminal and ci"il proceedings. In a criminal action, the #tate must pro"e its case by e"idence which shows the guilt of the accused beyond reasonable doubt, while in a ci"il action it is sufficient for the plaintiff to sustain his cause by preponderance of e"idence only. 13 Thus, in Rillon, et al. vs. Rillon, 1C we stressed that it is not now necessary that a criminal prosecution for rape be first instituted and prosecuted to final Iudgment before a ci"il action based on said offense in fa"or of the offended woman can li&ewise be instituted and prosecuted to final Iudgment. +%$@$*;@$, the petition is hereby )$DI$) for lac& of merit, and the assailed Iudgment and resolution are hereby A**I@!$). #; ;@)$@$).

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G.R. No. L-17396 M"$ 3E, 196: )E)*L*O /E, E0 AL., plaintiffs.appellants, "s. ALFON+O /E, defendant.appellee. 4A20*+0A ANGELO, J.: laintiffs brought this action before the Court of *irst Instance of !anila to reco"er moral, compensatory, exemplary and correcti"e damages in the amount of 1-,444.44 exclusi"e of attorneyVs fees and expenses of litigation. )efendant, after denying some allegations contained in the complaint, set up as a defense that the facts alleged therein, e"en if true, do not constitute a "alid cause of action.

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After trial, the lower court, after finding that defendant had carried on a lo"e affair with one Lolita e, an unmarried woman, being a married man himself, declared that defendant cannot be held liable for moral damages it appearing that plaintiffs failed to pro"e that defendant, being aware of his marital status, deliberately and in bad faith tried to win LolitaVs affection. #o it rendered decision dismissing the complaint.,C*phD,.-Et laintiffs brought this case on appeal before this Court on the ground that the issues in"ol"ed are purely of law. The facts as found by the trial court are< laintiffs are the parents, brothers and sisters of one Lolita e. At the time of her disappearance on April 0-, 0173, Lolita was 6- years old and unmarried. )efendant is a married man and wor&s as agent of the La erla Cigar and Cigarette *actory. %e used to stay in the town of :asan, !arindu8ue, in connection with his aforesaid occupation. Lolita was staying with her parents in the same town. )efendant was an adopted son of a Chinaman named e 'eco, a collateral relati"e of LolitaVs father. 'ecause of such fact and the similarity in their family name, defendant became close to the plaintiffs who regarded him as a member of their family. #ometime in 0176, defendant fre8uented the house of Lolita on the pretext that he wanted her to teach him how to pray the rosary. The two e"entually fell in lo"e with each other and conducted clandestine trysts not only in the town of :asan but also in 'oac where Lolita used to teach in a barrio school. They exchanged lo"e notes with each other the contents of which re"eal not only their infatuation for each other but also the extent to which they had carried their relationship. The rumors about their lo"e affairs reached the ears of LolitaVs parents sometime, in 0177, and since then defendant was forbidden from going to their house and from further seeing Lolita. The plaintiffs e"en filed deportation proceedings against defendant who is a Chinese national. The affair between defendant and Lolita continued nonetheless. #ometime in April, 0173, Lolita was staying with her brothers and sisters at their residence at 7-.' $spaWa $xtension, Buezon City. ;n April 0-, 0173, Lolita disappeared from said house. After she left, her brothers and sisters chec&ed up her thing and found that LolitaVs clothes were gone. %owe"er, plaintiffs found a note on a crumpled piece of paper inside LolitaVs aparador. #aid note, written on a small slip of paper approximately -U by =U in size, was in a handwriting recognized to be that of defendantVs. In $nglish it reads< %oney, suppose I lea"e here on #unday night, and thatVs 0=th of this month and we will ha"e a date on the 0-th, thatVs !onday morning at 04 a.m. @eply Lo"e The disappearance of Lolita was reported to the police authorities and the D'I but up to the present there is no news or trace of her whereabouts. The present action is based on Article 60 of the Dew Ci"il Code which pro"ides< Any person who wilfully causes loss or inIury to another in a manner which is contrary to morals, good customs or public policy shall compensate the latter for the damage. There is no doubt that the claim of plaintiffs for damages is based on the fact that defendant, being a married man, carried on a lo"e affair with Lolita e thereby causing plaintiffs inIury in a manner contrary to morals,

good customs and public policy. 'ut in spite of the fact that plaintiffs ha"e clearly established that in illicit affair was carried on between defendant and Lolita which caused great damage to the name and reputation of plaintiffs who are her parents, brothers and sisters, the trial court considered their complaint not actionable for the reason that they failed to pro"e that defendant deliberately and in bad faith tried to win LolitaVs affection Thus, the trial court said< UIn the absence of proof on this point, the court may not presume that it was the defendant who deliberately induced such relationship. +e cannot be unmindful of the uncertainties and sometimes inexplicable mysteries of the human emotions. It is a possibility that the defendant and Lolita simply fell in lo"e with each other, not only without any desire on their part, but also against their better Iudgment and in full consciousness of what it will bring to both of them. This is specially so with respect to Lolita, being an unmarried woman, falling in lo"e with defendant who is a married man.U +e disagree with this "iew. The circumstances under which defendant tried to win LolitaVs affection cannot lead, to any other conclusion than that it was he who, thru an ingenious scheme or tric&ery, seduced the latter to the extent of ma&ing her fall in lo"e with him. This is shown by the fact that defendant fre8uented the house of Lolita on the pretext that he wanted her to teach him how to pray the rosary. 'ecause of the fre8uency of his "isits to the latterVs family who was allowed free access because he was a collateral relati"e and was considered as a member of her family, the two e"entually fell in lo"e with each other and conducted clandestine lo"e affairs not only in :asan but also in 'oac where Lolita used to teach in a barrio school. +hen the rumors about their illicit affairs reached the &nowledge of her parents, defendant was forbidden from going to their house and e"en from seeing Lolita. laintiffs e"en filed deportation proceedings against defendant who is a Chinese national. De"ertheless, defendant continued his lo"e affairs with Lolita until she disappeared from the parental home. Indeed, no other conclusion can be drawn from this chain of e"ents than that defendant not only deliberately, but through a cle"er strategy, succeeded in winning the affection and lo"e of Lolita to the extent of ha"ing illicit relations with her. The wrong he has caused her and her family is indeed immeasurable considering the fact that he is a married man. 9erily, he has committed an inIury to LolitaVs family in a manner contrary to morals, good customs and public policy as contemplated in Article 60 of the new Ci"il Code. +%$@$*;@$, the decision appealed from is re"ersed. )efendant is hereby sentenced to pay the plaintiffs the sum of 7,444.44 as damages and 6,444.44 as attorneyVs fees and expenses of litigations. Costs against appellee. October :E, 197E G.R. No. L-:6CE3 )E)*L*A DEL VALLE-0*ONG+ON, E0 AL., #'"inti&&!-"##e''ee!, (!. MELE)*O FERNANDE;, 3e&en3"nt"##e''"nt, ENR*<2E MA0*4AG, E0 AL., inter(enor!-"##e''"nt!. Appeal from a decision of the Court of *irst Instance of Buezon ro"ince in its Ci"il Case Do. 7311, rendered in 66 April 0155, resol"ing a conflict between the parties about rights to use the water of the Taguan @i"er and the Doynoyin Cree& in Tiaong and Candelaria of the ro"ince of Buezon. *or the proper understanding of the contro"ersy, it is important to recall the general topography of the region. As shown in the defendants.appellants( s&etch plan, $xhibit H04,J which was admitted and adopted by plaintiffs.appellees ,t.s.n., page 231/, the main source of the water for the areas in dispute is the Taguna @i"er that enters the region from the north and flows south. This Taguan @i"er di"ides into two main branches, one that flows southeast ,called by the court below HTaguan #egundoJ and untorJ by appellants/and another branch called the Doynoyin, that arches first southwest and later southeast, forming an are with the conca"ity to the east, and reIoins the other branch further south at the Iuncture with Aguirra cree& or canal, that continues southward. Another ri"er which is pertinent to this case is the Cabay @i"er which is to the $ast of the Aguirra Cree& and bounds the irrigated riceland of plaintiffs.appellees )el 9alle on the west and south.

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In 0102, defendants were granted water appropriation rights on the Taguan ri"er by the )epartment of Commerce and Communications, after due in"estigation ,$xhibit H'J/. 'ut in 01-4, plaintiffs constructed at the mouth of the Aguirra, and across it, a concrete dam ,designated as )el 9alle dam/ that impeded and reduced the water flow into the Aguirra. Later on, in 0176, plaintiffs.appellees increased the height of this dam, shutting off completely the water supply of the Aguirra cree& ,an old irrigation canal/ so that Honly a flood or hea"y rain can cause the water to o"erflow [ the crest of the concrete dam.0 lantiffs are the owners of a parcel of irrigated riceland with an area of twenty ,64/ hectares, more or less, situated in "arrio Linatihan, Candelaria, Buezon, which property was inherited from their deceased grandfather, !anuel del 9alle. laintiffs, in their complaint dated 5 ;ctober 0177, alleged ha"ing irrigated the abo"e riceland by means of water coming from Doynoying Cree& in "arrio Cabay, Tiaong, Buezon, since #panish times up to the present, and they claim ha"ing ac8uired by prescription, to the exclusion of all others, the use of all the "olume of the Doynoy in cree&(s water passing o"er the dam of one Dicolas !aralit which is in the upper part of that cree&. )efendant and inter"enors ,otherwise &nown as the Cabay irrigators/ are the owners of irrigated ricelands that about the Aguirra Cree& below the dam in contro"ersy. It is their position that Doynoyin Cree& is part of the Taguan @i"er and, therefore, as prior appropriators of the Taguan @i"er waters by "irtue of the 0102 administrati"e concession, $xhibit H',J plaintiffs cannot depri"e them from the use of the same. ;n 63 #eptember 0177, defendant !elecio *ernandez dug a ditch on his property connecting the Doynoyin and Aguirra Cree&s to draw water therefrom. This ditch was closed in the first wee& of >anuary, 0175 when the parties reached a temporary agreement in the case, by the terms of which the plaintiffs on one hand, and the defendant and the inter"enors on the other, were to use the waters from the Doynoyin Cree& on a fifty.fifty basis. laintiffs contend that Doynoyin Cree& is a water way separate and independent of the Taguan @i"er, ha"ing its own source of water, so that while they wholly agree that defendant and the inter"enors are listed in $xhibit H'J as prior appropriators of the Taguan @i"er waters, any such right should not encroach on the Doynoyin Cree&waters which are not part of the Taguan @i"er. It is alleged by plaintiffs that the Cabay irrigators a"ailed of the use of a flume ,alulod/ o"er plaintiffs( dam at the Aguirra Cree& to catch all the "olume of water from the Taguan @i"er bed to ma&e it fall into and flow through the said cree& to irrigate their own lands. This practice originated allegedly from time immemorial up to the last time that the Cabay irrigators made use of Taguan @i"er waters. It is plaintiffs( further contention that the Cabay irrigators a"ailed exclusi"ely of the said ri"er waters for irrigation purposes and that with the digging of the ditch by defendant *ernandez ,already closed pursuant to a temporary agreement between the parties/ the whose "olume of natural water of the Doynoyin Cree& was di"erted to the Aguirra Cree&, thus depri"ing plaintiffs of their own exclusi"e right to use the Doynoyin Cree& waters. Alleging that if defendant will not be immediately enIoined to desist from di"erting any using the Doynoyin Cree& waters they would be unable to plow and prepare their abo"e riceland for the planting season and would suffer damages of no less than 2,444.44 for palay crop that would not be har"ested for the year, the plaintiffs del 9alle as&ed for 0,444.44 attorney(s fees and other damages sufferedA prayed for the immediate issuance of a writ of mandatory preliminary inIunction against the defendant to maintain the status quo and restroe to plaintiffs the exclusi"e use of the water of Doynoyin Cree& and a writ of perpetual inIunction to issue against defendant after the trial of the case. Lastly, plaintiffs prayed that they an their predecessor.in.interest be declared as ha"ing ac8uired a prescripti"e right for the exclusi"e use of Doynoyin Cree& waters below the dam of Dicolas !aralit. )efendant %ernandez and inter"enors contend that, prior to the construction of the del 9alle dam across the Aguirra Cree&, there was plenty of water flowing into the cree& from two sources, namely< the Doynoyin Cree& and the bed of Taguan @i"er. +ith the construction of the dam, there is no more water ,not Iust scarcity/ flowing into the Aguirra Cree&. It is, howe"er admitted by defendant that plaintiffs and their

predecessor.in.interest used to irrigate their riceland with water flowing along the Aguirra Cree& by di"erting the said water from time to time through an old canal which was connected with, and in perpendicular position to, the Aguirra Cree&, about 044 meters below the present concrete dam. This practice was allegedly due to an arrangement between plaintiffs and defendant, his predecessor.in.interest and other Cabay irrigators, which was considered satisfactory and e8uitable. %ence, defendant contends that all the said parties shared a common interest, not ad"erse to each other, in the use of water flowing along the Aguirra Cree& coming from Doynoyin Cree& and Taguan @i"er. The use of a flume is denied by both the defendant and inter"enors. 'ecause of the concrete dam constructed by plaintiffs,appellees/, defendant and inter"enors as&ed that plaintiffs pay to them Iointly and se"erally a total of 057,444.44 in moral damages and 55,444 in exemplary damages, excluding such further damages which defendant and inter"enors may pro"e at the trial. The lower court decided the case against the defendant and inter"enors, declaring that defendant %ernandez and no right to dig his canal connecting the Doynoyin to the Aguirra and enIoined him from ma&ing any construction on his land the effect of which would reduce the water accumulating at the Hdel 9alleJ dam across the Aguirra Cree&. laintiffs were allowed to remo"e the water gate which impedes the flow of water from the contro"ersial dam to plaintiffs( ricefields and Hto restroe the del 9alledam to its condition at the beginning of the suit.J The lower court dismissed plaintiffs( claim for damages as well as the counterclaim of defendant and inter"enors, but sentenced defendant to pay to plaintiffs attorney(s fees in the sum of 744.44. The defendant and inter"enors appealed from the decision, raising both 8uestions of fact and law. The "alue in contro"ersy exceeds 644,444.44, exclusi"e of interest and costs, appellants( total claim for damages caused by the alleged public nuisance ,the contro"ersial dam/ alone being ==1,1=5.44. #ince this appeal was perfected prior to the effecti"ity of @.A. Do. 7--4 on 1 #eptember 0152, this Court still retains exclusi"e appellate Iusrisdiction o"er the same. Appellants claim that the lower court erred in holding that ,a/ the Taguan @i"er enters the region from the north flowing generally to the south thus excluding the Doynoyin Cree&A ,b/ the Doynoyin Cree& is an independent and separate natural waterway from the Taguan @i"erA ,c/ the natural waterways Doynoyin Cree& and Taguna #egundo end at the contro"ersial damA ,d/ the Aguirra Cree& is an old irrigation canal that has been dug running southwardsA ,e/ there was preponderant e"idence that plaintiffs ac8uired a prescripti"e right to use the Doynoyin Cree& watersA ,f/ the cement dam across theAguirra Cree& may be restored and continued in use by plaintiffA ,g/ the remedy of defendant and inter"enors is not against plaintiffs but to institute proceedings under sections - and 6 of Irrigation Act Do. 6067A and ,h/ defendant is liable to pay to plaintiffs attorney(s fees in the amount of 744.44 plus costs of suit. The most important issue in this appeal is whether plaintiffs indeed ha"e ac8uired a prescripti"e right o"er all the "olume of the Doynoyin Cree& waters that pass through the !aralit dam, to the exclusion of all others, as was in effect held by the lower court when it found that Hin 0167 and for more than 64 years prior to 0106, plaintiffs had built the 9alle and Cabay dams from the irrigation of plaintiffs( ricefields.J 'ut the 9alle dam, the lower court ob"iously meant the contro"ersial dam across the Aguirra Cree& 6 and by the Cabay dam, the lower court expressly referred to the dam further east across the Cabay @i"er.= The trial court(s conclusion is based H,i/ on the complaint in 0167 in"ol"ing those dams- filed against plaintiffs by !aria @amos #ales and >uan :. @amos who then appeared to ha"e lands abutting on the AguirraA ,ii/ in the official reports of :o"ernment $ngineers *ernando $. 9. #ison ,$xhibit H>.0\/ and >.9. 'agtas ,$xhibit H>J/A ,iii/ on the affida"it of !anuel del 9alle ,$xhibit HIJ/A and ,"/ on the easement of buttress ,see #olis ". uIeda, -6 hil. 513/ which has existed for so many years on defendant(s land without obIection from his predecessors.in.interest.J

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It can readily be seen in the foregoing that the lower court concluded that the del 9alle dam across the Aguirra Cree& was also a dam in dispute in 0167 when !aria @amos #ales and >uan :. @amos filed a complaint against !anuel del 9alle. A close examination, howe"er, of $xhibit H>.0,J dated 0- #eptember 0167, which is the report of engineer #ison regarding said dispute in"estigated by him on 00 #eptember 0167, shows that the stream referred to therein, and from which di"ersion of water was to be made, was,and still is/ locally and officially called the Cabay @i"er. #e"eral sources of water of the 0167 irrigation system are mentioned in the report, and they are ,a/ the ricefields at sitioDoynoyin,7 ,b/ Talon #pring, and ,c/ ricefields at the north side of the lot belonging to !r. del 9alle.5 aragraph 04 of the said report emphasized that the following should be clearly understood<3 ,a/ that water flowing through the ri"er abo"e )am ' ,which is the Cabay dam/,and through the irrigation canal E ,which flows to the east from the Cabay dam, cur"ing to the south to connect with the Cabay @i"er / 2 are all coming from ricefields, and ,b/that Talon #pring, under )am ', constitutes mainly the source of the Cabay @i"er proper. 1 +hile in the #ison 0167 @eport, $xhibit H>.0,J Cabay @i"er is repeatedly mentioned, and its main source of water used by del 9alle is emphatically stated to be the Talon #pring, no mention is made of the Doynoyin Cree& ,which was already &nown to be such during the #panish times/as a source. If the del 9alle dam across the Aguirra Cree& was already an accessory to the whole del 9alle irrigation system in 0167 and it was already used to di"ert waters of Doynoyin Cree& to irrigate plaintiffs( ricelands in #ampaloc,as subse8uently reported by irrigation engineer $scobar in 0177, $xhibit HAJ/, engineer #ison could ha"e readily mentioned it in his report, or at least indicated the same in H lan ',J attached thereto. In one concluding paragraph of his 0167 report, engineer #ison said that Hduring the dry season, if the water a"ailable is not enough to both the complainants and the respondent, pri"ilege should be granted to !r. del 9alle, the respondent, since he ac8uired the right of priority of appropriations, ha"ing used the water uninterruptedly for more than 74 years.J #ince the report was confied only the Cabay @i"er, the Cabay dam and the sources of water already specified, of which Doynoyin Cree& was ne"er stated to be one, it is erroneous for the trial court to conclude that the del 9alle dam in the present contro"ersy was li&ewise existing, Iust li&e the Cabay dam Hin 0167 and for more than 64 years prior to 0106.J The main basis for engineer #ison(s conclusion that !r. del 9alle had been using the water uninterruptedly for more than 74 years, and, conse8uently, also that of engineer 'agtas when he appro"ed engineer #ison(s report ,$xhibit H>,J H>.0\/, was the attached statement of !r. del 9alle, dated 1 #eptember 0167. 04 An analysis of this statement will show that it spea&s of Ha dam in 8uestion which is an old existing dam more than fifty ,74/ years old.J !r. del 9alle stated as ha"ing repaired it and Hextended both ends so as to close the Cabay @i"er.J 00 There is only one dam mentioned in the statement and the same clearly referred to the Cabay dam, east of the Taguan. Again, there is no mention of Doynoyin Cree& in $xhibit HL,J hence, there is no basis at all to conclude that the Doynoyin Cree&waters were also being referred to. Therefore, plaintiffs ha"e not ac8uired a prescripti"e right o"er the said waters on the basis of said $xhibit HL.J The report of engineer $scobar ,$xhibit HGJ/ dated 02 April 0177 was presented by plaintiffs to pro"e that an earthen dam across the Aguirra Cree& was already an accessory to the del 9alle irrigation system in 0167. The existence of such a dam was merely conIectured, and the same author of that report, engineer )ionisio D. $scobar,who was plaintiffs( own witness in court/ testified on cross.examination that the dam across the Aguirra, now in contro"ersy, was not a part of the del 9alle irrigation system in 0167A that said dam was constructed only in 01-4 and that there is no record to show that said dam existed in 0167 06 ,t.s.n., pages -1=.-1-, 65 !arch 0172/. The same witness categorically denied that the source of the del 9alle irrigation system in 0167 was the Doynoyin Cree& or the Taguan @i"er, because he said that Haccording to the record it comes from Cabay @i"erJ ,t.s.n., page 744, Id./. +itness $scobar thus re"ersed pre"ious statements made by him on these material points in his earlier report, $xhibit HA,J relied upon by plaintiffs del 9alle. %e further clarified that Hthe source of the present system 0= is from Doynoyin Cree& and the Taguan Cree& as per s&etch.J The s&etch referred to is $xhibit HLJ prepared in April, 0177 by one >ose . eralta and accompanied still another report, dated 00 April 0177, of go"ernment engineer 9icente :. Alcaneses. 0-

This $xhibit HLJ is a modification of the old plan prepared by engineer #ison in 0167 07 and already embodies those subse8uent impro"ements actually seen during the course of engineer Alcaneses ocular inspection in 0177. A close loo& at $xhibit HLJ will re"eal that the old canal HGJ indicated in the 0167 H lan 'J still appears. In the 0167 report, engineer #ison 05 had stated that Hthe water flowing thru G ,see attached plan '/ comes from the ricefields at sitio DoynoyinA and the water flowing thru C is that of course from G in addition to that flowing front Talon #pring [J This canal HGJ is clearly different from the Hman.made.canalJ shown on $xhibit HLJ ,mar&ed H$xhibit 6\ therein/ connecting the Aguirra Cree& and Cabay dams. 'oth, as already stated, appear on $xhibit HL,J canal HGJ being lower. %ence, while it is clear that the canal, $xhibit H6,J di"erts the waters of the Doynoyin Cree& eastward towards the Cabay dam from the del 9alle dam across the mouth of the Aguirra Cree&, its existence in 0167 is by no means establishedA for the plan attached to the 0167 #ison report ,$xhibit H-\/ does not show it. That connecting canal can not be the canal HGJ in $xhibit H-,J since the arrows indicate that the flow of water in the latter comes from the south and not from the west. *inally, engineer $scobar testified that he could not definitely say whether this Hman.made.canalJ ,$xhibit H6,J supra/ connecting the Aguirra Cree& dam and the Cabay dam existed when H lan 'J was prepared in 0167. %e said that if that existed at the time, it would ha"e been placed on the said plan. $scobar(s testimony is further strengthened by the report of engineer 9icente Alcaneses dated 00 April 0177 03 that Hthe decision handed down by the then )istrict engineer, >. 9. 'agtas, 02 concerning the water rights of del 9alle o"er the Cabay @i"er cannot be applied to the present dispute.J Alcaneses found it clear, as a result of his ocular inspection, that the dam in contro"ersy in the present del 9alle.%ernandez case could not ha"e been the dam under litigation in the @amos.#ales "s. )el 9alle case of 0167, inasmuch as the dam in contro"ersy in the present appeal was found by him to ha"e been construed only in 01-4, with impro"ements and repairs done in April, 0176. It is indeed remar&able that among the concessionaires of appropriators of water from the Taguan @i"er listed in the :o"ernment concession of 0102 ,$xhibit H'J/, the name of del 9alle does not appear, while those of appellants are specified. The attempted explanation of appellees, and their witnesses, that appellants drew water exclusi"ely from the Taguan and Taguan #egundo ,or untor/ by means of a wooden flume ,alulod/ o"er the Doynoyin cannot be true, for the :o"ernment concession, $xhibit H',J ma&es no mention thereof, despite its manifest importance for excluding the waters of the Doynoyin Cree& from those of the Taguan @i"er granted to appellants. Deither is any such structure mentioned in the #ison.'agtas report of 0167, or in the Alcaneses report of 0177. #uch an unusual de"ice could not ha"e escaped the attention of the engineers that inspected the site in 0102, 0167 and 0177. Clearer still against the del 9alles( claim of exclusi"e use of the waters of the Doynoyin Cree& in the undenied fact that Dicolas !aralit, one of the water concessionaires of the :o"ernment in 0102 ,Do. 6 in $xhibit H'J/ had his own di"ersion dam in the Doynoyin Cree& abo"e the mouth of the Aguirra ,shown in the lan, $xhibit H04,J with the label H#ala !aralitJ/. And there is no e"idence that the del 9alles e"er protested against the construction of this dam. At any rate, the abusi"eness of the erection ,and subse8uent ele"ation/ of the del 9alle dam across the mouth of the Aguirra, to the detriment of appellants who deri"e from the latter the water for their own ricefields, is the remar& of plaintiffs.appellees( own witness, engineer $scobar, in his report, $xhibit HA,J paragraph -<. 'ut with the construction of the Aguirra dam, !r. )el 9alle is not only appropriating water from the Doynoyin @i"er but also from the Taguan @i"er, allowing only water which o"erflows for the use of the irrigation ,irrigators/ below the dam in contro"ersy. ,$mphasis supplied/.

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The other basis for the lower court(s conclusion that plaintiffs.appellees ac8uired a prescpriti"e right o"er the Doynoyin Cree& waters is the easement of buttress ,#olis "s. uIeda, -6 hil. 513/ which allegedly existed

on the land of defendant.appellant %ernandez for many years without obIect in on his part. The easement of buttress is specifically pro"ided for under Article 0-= of the Law of +aters, which states that .. If the dam is for the use of public waters the :o"ernment shall ma&e an in"estigation of record, and upon granting the concession, shall after hearing the owner of the land, decree also the compulsory easement of buttress. If the waters are of pri"ate ownership, the easement shall be imposed by the go"ernor of the pro"ince subIect to the procedure established for the easement of conduit. In the abo"e.cited case of #olis "s. uIeda, it was held that, by Article 0-= of the Law of +aters, an easement of buttress can be imposed by administrati"e authority with respect to land lying adIacent to public or pri"ate watersA but in such case it is re8uired that an in"estigation of record shall be made before the easement of buttress is decreed.OO01PP The Court further said that .. (or the purpose of this decision it ma$ "e taken for 'ranted that the Bureau of %ands is the proper repositor$ of the administrative authorit$ conferred in said article *ith respect to the decreein' of the easement in case of pu"lic *aters, and the Director of %ands ma$ "e assumed to "e the proper official to conduct the investi'ation and make the appropriate order. Nevertheless, the makin' of the investi'ation of record is an essential prerequisite to the exercise of the po*er. >his implies that the interested parties shall have an opportunit$ to "e heard and that record "e made of the proof adduced *ith reference to the proposed servitude and the dama'e to result therefrom. >hese formalities are essential1 other*ise, the decreein' of the servitude *ould "e o"noxious to the constitutional provision *hich for"ids the takin' of propert$ *ithout due process of la*. >he administrative investi'ation contemplated in article ,=F of the %a* of 6aters must proceed alon' the lines of a 5udicial inquir$, at least to the extent of 'ivin' the parties an opportunit$ to "e heard and makin' record of the proof pertinent to their respective contentions. (!mphasis supplied )efendant !elecio %ernandez in his depositions 64 stated that the concrete dam was constructed in 01-4 stealthily and without his &nowledge and that when he disco"ered the same about one.half year later after its construction, he re8uested the o"erseer of !r. del 9alle to ha"e the dam opened, but the re8uest went unheeded. Instead, the dam was increased in height in April, 0176, thereby closing the source of water of the Aguirra Cree&. The defendant stated that he was angered when he learned of the dam being abutted to his riceland but he was unable to do anything after its disco"ery because of the disorder during the >apanese times. %owe"er, a petition by the Cabay irrigators was later on filed with the local municipal authorities, 60 a copy of which was subse8uently presented to the CAC, !alacaWan, with an accompanying letter of Atty. *rancisco %ernandez, 66 but no effecti"e redress was obtained. Instead, an indorsement of the pre"ious findings of engineers >.9. 'agtas and $. 9. #ison, 6= already discussed, was made. laintiffs tried to pro"e notice to the appellees of the construction of the concrete dam through witness Anastacio de @osales, but this witness( credibility becomes doubtful when he testified that he contacted #ebastian @odriguez, o"erseer of )ionisio Cabuniag ,among other Cabay irrigators/,in !ay, 01-4 and tal&ed to him ,t.s.n., page -1, 04 )ecember 0175/, but #ebastian @odriguez turned out to be dead as early as *ebruary 0175, as shown in his death certificate, $xhibit HI.J The applicable laws on prescription re8uire 64 years ad"erse uninterrupted possession. Art. =1. The right to enIoy in perpetuity the waters of springs and cree&s is ac8uired by the owners of lower estates, and in the same way by those adIoining estates when they ha"e appropriated said waters without interruption for a space of twenty years.J ,#panish Law of +aters of = August 0255./ Art. 01-. Any person who has enIoyed the use of public waters for a term of twenty years without obIection on the in its enIoyment, e"en though he may not be able to show that he secured proper permission. ,Id./ Art. -41. The use of public waters is ac8uired<

,0/ 'y administrati"e concession. ,6/ 'y prescription of twenty years. ,Ci"il Code of 0221, now Art. 74-, D.C.C./ *or prescription to set in, the possession must be ad"erse, continuous, public and to the exclusion of all other persons. 6This Court finds no clear, preponderant e"idence that plaintiffs ha"e been using the water of Doynoyin Cree& uninterruptedly for twenty years or more, much less to the exclusion of all others. %ence, they cannot be declared to ha"e ac8uired a prescripti"e right o"er the said waters. #uch preponderance must be clear, to nullify the 0102 :o"ernment grant of water rights in fa"or of appellants herein. laintiffs( theory that the Aguirra Cree& dam was an accessory to the whole del 9alle irrigation system in 0167 must be reIected as without basis. The only clear proof is that appellees del 9alle started to appropriate Doynoyin Cree& waters exclusi"ely for themsel"es only in 01-4 when a concrete dam was constructed at the mouth of the Aguirra Cree&. #ince only about 07 years ha"e elapsed from the time the waters were first appropriated by the appellees in 01-4 up to the filing of the complaint in ;ctober, 0177, it is this Court(s opinion that the parties shared Iointly in the use of Doynoyin Cree& waters before 01-4 and, therefore, the use by appellees del 9alle was not exclusi"e nor ad"erse to others. Fnder the facts, defendant %ernandez must be absol"ed from the liability to pay attorney(s fees to plaintiffs. Appellants( claim for damage to their crops must be denied for the reason that they are already sharing in the use of the waters pursuant to an arrangement agreed upon during the trial of the case in >anuary, 0175, and their e"idence of crop losses during the pre"ious years is far from satisfactory. It is not only the shares of the tenants that must be deducted from the "alue of the crops allegedly lost, but also the land taxes and production costs should ered by them, and there is no proof of their import. !oreo"er, the law places on the shoulders of the party suffering loss or inIury the duty of exercising the diligence of a good father of a family to minimize his damages ,Ci"il Code of the hilippines, Article 664=A Castel"i "s. Cia. :eneral de Tabacos, -1 hil. 112/A and it is clear from the record that appellees herein only sought remedy in )ecember, 017-. De"ertheless, considering that plaintiffs.appellees del 9alle, not content with reducing the water a"ailable for the appellant(s field by the construction of the dam in contro"ersy, deliberately bloc&ed totally their water supply by increasing the ele"ation of the dam in 0176, without appellants( consent and without go"ernment authorization, this Court finds that said appellants are entitled to reco"er moral damages, pursuant to the first part of Article 6664 of the Ci"il Code of the hilippines, pro"iding that .. Art. 6664. +ilful inIury to property may be legal ground for awarding moral damages if the court should find that under the circumstances such damages are Iustly due. These damages are assessed at 6,444.44 for each of the appellants, defendant as well as inter"enors. In addition, Iustice and e8uity demand that plaintiffs.appellees be further sentenced to pay appellants 7,444.44 by way of attorney(s fees, since appellants, who are small and holders, were forced to enter into a litigation that they could ill afford in order to protect their interests ,Article 6642, paragraphs 6 and 00, Ci"il Code/. +%$@$*;@$, the decision appealed from is re"ersed, and a new one entered dismissing the complaint and sentencing plaintiffs.appellees del 9alle to demolish at their expense the dam they erected at the confluence of the Doynoyin and Aguirra cree&s in the municipalities of Tiaong and Candelaria, Buezon ro"ince, within ninety ,14/ days from the finality of this decisionA to pay Iointly and se"erally to defendant.appellant !elecio

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%ernandez 6,444.44 byway of moral damages, and a li&e sum to each and e"ery inter"enor.appellant. In addition, said appellee shall pay 7,444.44 attorneys( fees, and the costs. G.R. No. 8869C 9"n8"r$ 11, 1993 AL4EN+ON EN0ER/R*+E+ )OR/., 9E++E YA/, AND 4EN9AM*N MEND*ONA, petitioners, "s. 0.E )O2R0 OF A//EAL+ AND E2GEN*O +. 4AL0AO, respondents. 4*D*N, J.: This petition assails the decision of respondent Court of Appeals in CA.:@ C9 Do. 0-1-2 entitled U$ugenio #. 'altao, plaintiff.appellee "s. Albenson $nterprises Corporation, et al, defendants.appellantsU, which modified the Iudgment of the @egional Trial Court of Buezon City, 'ranch GC9III in Ci"il Case Do. B.-4164 and ordered petitioner to pay pri"ate respondent, among others, the sum of 744,444.44 as moral damages and attorneyVs fees in the amount of 74,444.44. The facts are not disputed. In #eptember, ;ctober, and Do"ember 0124, petitioner Albenson $nterprises Corporation ,Albenson for short/ deli"ered to :uaranteed Industries, Inc. ,:uaranteed for short/ located at =653 9. !apa #treet, #ta. !esa, !anila, the mild steel plates which the latter ordered. As part payment thereof, Albenson was gi"en acific 'an&ing Corporation Chec& Do. 0=5=50 in the amount of 6,737.44 and drawn against the account of $.L. +oodwor&s ,Rollo, p. 0-2/. +hen presented for payment, the chec& was dishonored for the reason UAccount Closed.U Thereafter, petitioner Albenson, through counsel, traced the origin of the dishonored chec&. *rom the records of the #ecurities and $xchange Commission ,#$C/, Albenson disco"ered that the president of :uaranteed, the recipient of the unpaid mild steel plates, was one U$ugenio #. 'altao.U Fpon further in8uiry, Albenson was informed by the !inistry of Trade and Industry that $.L. +oodwor&s, a single proprietorship business, was registered in the name of one U$ugenio 'altaoU. In addition, upon "erification with the drawee ban&, acific 'an&ing Corporation, Albenson was ad"ised that the signature appearing on the subIect chec& belonged to one U$ugenio 'altao.U After obtaining the foregoing information, Albenson, through counsel, made an extraIudicial demand upon pri"ate respondent $ugenio #. 'altao, president of :uaranteed, to replace andQor ma&e good the dishonored chec&. @espondent 'altao, through counsel, denied that he issued the chec&, or that the signature appearing thereon is his. %e further alleged that :uaranteed was a defunct entity and hence, could not ha"e transacted business with Albenson. ;n *ebruary 0-, 012=, Albenson filed with the ;ffice of the ro"incial *iscal of @izal a complaint against $ugenio #. 'altao for "iolation of 'atas ambansa 'ilang 66. #ubmitted to support said charges was an affida"it of petitioner 'enIamin !endiona, an employee of Albenson. In said affida"it, the abo"e.mentioned circumstances were stated. It appears, howe"er, that pri"ate respondent has a namesa&e, his son $ugenio 'altao III, who manages a business establishment, $.L. +oodwor&s, on the ground floor of the 'altao 'uilding, =653 9. !apa #treet, #ta. !esa, !anila, the "ery same business address of :uaranteed.

;n #eptember 7, 012=, Assistant *iscal @icardo #umaway filed an information against $ugenio #. 'altao for 9iolation of 'atas ambansa 'ilang 66. In filing said information, *iscal #umaway claimed that he had gi"en $ugenio #. 'altao opportunity to submit contro"erting e"idence, but the latter failed to do so and therefore, was deemed to ha"e wai"ed his right. @espondent 'altao, claiming ignorance of the complaint against him, immediately filed with the ro"incial *iscal of @izal a motion for rein"estigation, alleging that it was not true that he had been gi"en an opportunity to be heard in the preliminary in"estigation conducted by *iscal #umaway, and that he ne"er had any dealings with Albenson or 'enIamin !endiona, conse8uently, the chec& for which he has been accused of ha"ing issued without funds was not issued by him and the signature in said chec& was not his. ;n >anuary =4, 012-, ro"incial *iscal !auro !. Castro of @izal re"ersed the finding of *iscal #umaway and exonerated respondent 'altao. %e also instructed the Trial *iscal to mo"e for dismissal of the information filed against $ugenio #. 'altao. *iscal Castro found that the signature in 'C Chec& Do. 0=5=50 is not the signature of $ugenio #. 'altao. %e also found that there is no showing in the records of the preliminary in"estigation that $ugenio #. 'altao actually recei"ed notice of the said in"estigation. *iscal Castro then castigated *iscal #umaway for failing to exercise care and prudence in the performance of his duties, thereby causing inIustice to respondent who was not properly notified of the complaint against him and of the re8uirement to submit his counter e"idence. 'ecause of the alleged unIust filing of a criminal case against him for allegedly issuing a chec& which bounced in "iolation of 'atas ambansa 'ilang 66 for a measly amount of 6,737.44, respondent 'altao filed before the @egional Trial Court of Buezon City a complaint for damages against herein petitioners Albenson $nterprises, >esse Cap, its owner, and 'enIamin !endiona, its employee. In its decision, the lower court obser"ed that Uthe chec& is drawn against the account of U$.L. +oodwor&s,U not of :uaranteed Industries of which plaintiff used to be resident. :uaranteed Industries had been inacti"e and had ceased to exist as a corporation since 0137. . . . . The possibility is that it was with :ene 'altao or $ugenio 'altao III, a son of plaintiff who had a business on the ground floor of 'altao 'uilding located on 9. !apa #treet, that the defendants may ha"e been dealing with . . . .U ,Rollo, pp. -0.-6/. The dispositi"e portion of the trial court Vs decision reads< +%$@$*;@$, Iudgment is hereby rendered in fa"or of plaintiff and against defendants ordering the latter to pay plaintiff Iointly and se"erally< 0. actual or compensatory damages of 0==,=74.44A 6. moral damages of 0,444,444.44 ,0 million pesos/A =. exemplary damages of 644,444.44A -. attorneyVs fees of 044,444.44A 7 costs.

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)efendantsV counterclaim against plaintiff and claim for damages against !ercantile Insurance Co. on the bond for the issuance of the writ of attachment at the instance of plaintiff are hereby dismissed for lac& of merit. ,Rollo, pp. =2.=1/. ;n appeal, respondent court modified the trial courtVs decision as follows< +%$@$*;@$, the decision appealed from is !;)I*I$) by reducing the moral damages awarded therein from 0,444,444.44 to 744,444.44 and the attorneyVs fees from 044,444.44 to 74,444.44, said decision being hereby affirmed in all its other aspects. +ith costs against appellants. ,Rollo, pp. 74.70/ )issatisfied with the abo"e ruling, petitioners Albenson $nterprises Corp., >esse Cap, and 'enIamin !endiona filed the instant etition, alleging that the appellate court erred in< 0. Concluding that pri"ate respondentVs cause of action is not one based on malicious prosecution but one for abuse of rights under Article 60 of the Ci"il Code notwithstanding the fact that the basis of a ci"il action for malicious prosecution is Article 6601 in relation to Article 60 or Article 6035 of the Ci"il Code . . . . 6. Concluding that Uhitting at and in effect maligning ,pri"ate respondent/ with an unIust criminal case was, without more, a plain case of abuse of rights by misdirectionU and Uwas therefore, actionable by itself,U and which Ubecame inordinately blatant and grossly aggra"ated when . . . ,pri"ate respondent/ was depri"ed of his basic right to notice and a fair hearing in the so.called preliminary in"estigation . . . . U =. Concluding that petitionerVs Uactuations in this case were coldly deliberate and calculatedU, no e"idence ha"ing been adduced to support such a sweeping statement. -. %olding the petitioner corporation, petitioner Cap and petitioner !endiona Iointly and se"erally liable without sufficient basis in law and in fact. 7. Awarding respondents 7.0. 0==,=74.44 as actual or compensatory damages, e"en in the absence of sufficient e"idence to show that such was actually suffered. 7.6. 744,444.44 as moral damages considering that the e"idence in this connection merely in"ol"ed pri"ate respondentVs alleged celebrated status as a businessman, there being no showing that the act complained of ad"ersely affected pri"ate respondentVs reputation or that it resulted to material loss. 7.=. 644,444.44 as exemplary damages despite the fact that petitioners were duly ad"ised by counsel of their legal recourse.

7.-. 74,444.44 as attorneyVs fees, no e"idence ha"ing been adduced to Iustify such an award ,Rollo, pp. -.5/. etitioners contend that the ci"il case filed in the lower court was one for malicious prosecution. Citing the case of&adera vs. %ope7 ,046 #C@A 344 O0120P/, they assert that the absence of malice on their part absol"es them from any liability for malicious prosecution. ri"ate respondent, on the other hand, anchored his complaint for )amages on Articles 01, 64, and 60 DD of the Ci"il Code. Article 01, &nown to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which may be obser"ed not only in the exercise of oneVs rights but also in the performance of oneVs duties. These standards are the following< to act with IusticeA to gi"e e"eryone his dueA and to obser"e honesty and good faith. The law, therefore, recognizes the primordial limitation on all rights< that in their exercise, the norms of human conduct set forth in Article 01 must be obser"ed. A right, though by itself legal because recognized or granted by law as such, may ne"ertheless become the source of some illegality. +hen a right is exercised in a manner which does not conform with the norms enshrined in Article 01 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held responsible. Although the re8uirements of each pro"ision is different, these three ,=/ articles are all related to each other. As the eminent Ci"ilist #enator Arturo Tolentino puts it< U+ith this article ,Article 60/, combined with articles 01 and 64, the scope of our law on ci"il wrongs has been "ery greatly broadenedA it has become much more supple and adaptable than the Anglo.American law on torts. It is now difficult to concei"e of any male"olent exercise of a right which could not be chec&ed by the application of these articlesU ,Tolentino, 0 Ci"il Code of the hilippines 36/. There is howe"er, no hard and fast rule which can be applied to determine whether or not the principle of abuse of rights may be in"o&ed. The 8uestion of whether or not the principle of abuse of rights has been "iolated, resulting in damages under Articles 64 and 60 or other applicable pro"ision of law, depends on the circumstances of each case. ,:lobe !ac&ay Cable and @adio Corporation "s. Court of Appeals, 035 #C@A 332 O0121P/. The elements of an abuse of right under Article 01 are the following< ,0/ There is a legal right or dutyA ,6/ which is exercised in "ad faithA ,=/ for the sole intent of preIudicing or inIuring another. Article 64 spea&s of the general sanction for all other pro"isions of law which do not especially pro"ide for their own sanction ,Tolentino, supra, p. 30/. Thus, anyone who, whether *illfull$ or ne'li'entl$, in the exercise of his legal right or duty, causes damage to another, shall indemnify his "ictim for inIuries suffered thereby. Article 60 deals with acts contra "onus mores, and has the following elements< 0/ There is an act which is legalA 6/ but which is contrary to morals, good custom, public order, or public policyA =/ and it is done with intent to inIure. Thus, under any of these three ,=/ pro"isions of law, an act which causes inIury to another may be made the basis for an award of damages. There is a common element under Articles 01 and 60, and that is, the act must be intentional. %owe"er, Article 64 does not distinguish< the act may be done either UwillfullyU, or UnegligentlyU. The trial court as well as the respondent appellate court mista&enly lumped these three ,=/ articles together, and cited the same as the bases for the award of damages in the ci"il complaint filed against petitioners, thus< +ith the foregoing legal pro"isions ,Articles 01, 64, and 60/ in focus, there is not much difficulty in ascertaining the means by which appellantsV first assigned error should be resol"ed, gi"en the admitted fact that when there was an attempt to collect the amount of 6,737.44, the defendants were explicitly warned that plaintiff $ugenio #. 'altao is

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not the $ugenio 'altao defendants had been dealing with ,supra, p. 7/. +hen the defendants ne"ertheless insisted and persisted in filing a case a criminal case no less against plaintiff, said defendants ran afoul of the legal pro"isions ,Articles 01, 64, and 60 of the Ci"il Code/ cited by the lower court and heretofore 8uoted ,supra/. )efendants, not ha"ing been paid the amount of 6,737.44, certainly had the right to complain. 'ut that right is limited by certain constraints. 'eyond that limit is the area of excess, of abuse of rights. ,Rollo, pp. --.-7/. Assuming, ar'uendo, that all the three ,=/ articles, together and not independently of each one, could be "alidly made the bases for an award of damages based on the principle of Uabuse of rightU, under the circumstances, +e see no cogent reason for such an award of damages to be made in fa"or of pri"ate respondent. Certainly, petitioners could not be said to ha"e "iolated the aforestated principle of abuse of right. +hat prompted petitioners to file the case for "iolation of 'atas ambansa 'ilang 66 against pri"ate respondent was their failure to collect the amount of 6,737.44 due on a bounced chec& which they honestly belie"ed was issued to them by pri"ate respondent. etitioners had conducted in8uiries regarding the origin of the chec&, and yielded the following results< from the records of the #ecurities and $xchange Commission, it was disco"ered that the resident of :uaranteed ,the recipient of the unpaid mild steel plates/, was one U$ugenio #. 'altaoUA an in8uiry with the !inistry of Trade and Industry re"ealed that $.L. +oodwor&s, against whose account the chec& was drawn, was registered in the name of one U$ugenio 'altaoUA "erification with the drawee ban&, the acific 'an&ing Corporation, re"ealed that the signature appearing on the chec& belonged to one U$ugenio 'altaoU. In a letter dated )ecember 05, 012=, counsel for petitioners wrote pri"ate respondent demanding that he ma&e good the amount of the chec&. Counsel for pri"ate respondent wrote bac& and denied, among others, that pri"ate respondent e"er transacted business with Albenson $nterprises CorporationA that he e"er issued the chec& in 8uestion. ri"ate respondentVs counsel e"en went further< he made a warning to defendants to chec& the "eracity of their claim. It is pi"otal to note at this Iuncture that in this same letter, if indeed pri"ate respondent wanted to clear himself from the baseless accusation made against his person, he should ha"e made mention of the fact that there are three ,=/ persons with the same name, i.e.< $ugenio 'altao, #r., $ugenio #. 'altao, >r. ,pri"ate respondent/, and $ugenio 'altao III ,pri"ate respondentVs son, who as it turned out later, was the issuer of the chec&/. %e, howe"er, failed to do this. The last two 'altaos were doing business in the same building 'altao 'uilding located at =653 9. !apa #treet, #ta. !esa, !anila. The mild steel plates were ordered in the name of :uaranteed of which respondent $ugenio #. 'altao is the president and deli"ered to :uaranteed at 'altao building. Thus, petitioners had e"ery reason to belie"e that the $ugenio 'altao who issued the bouncing chec& is respondent $ugenio #. 'altao when their counsel wrote respondent to ma&e good the amount of the chec& and upon refusal, filed the complaint for "iolation of ' 'lg. 66. ri"ate respondent, howe"er, did nothing to clarify the case of mista&en identity at first hand. Instead, pri"ate respondent waited in ambush and thereafter pounced on the hapless petitioners at a time he thought was propitious by filing an action for damages. The Court will not countenance this de"ious scheme. The criminal complaint filed against pri"ate respondent after the latter refused to ma&e good the amount of the bouncing chec& despite demand was a sincere attempt on the part of petitioners to find the best possible means by which they could collect the sum of money due them. A person who has not been paid an

obligation owed to him will naturally see& ways to compel the debtor to pay him. It was normal for petitioners to find means to ma&e the issuer of the chec& pay the amount thereof. In the absence of a wrongful act or omission or of fraud or bad faith, moral damages cannot be awarded and that the ad"erse result of an action does not per se ma&e the action wrongful and subIect the actor to the payment of damages, for the law could not ha"e meant to impose a penalty on the right to litigate ,@ubio "s. Court of Appeals, 0-0 #C@A -22 O0125P/. In the case at bar, pri"ate respondent does not deny that the mild steel plates were ordered by and deli"ered to :uaranteed at 'altao building and as part payment thereof, the bouncing chec& was issued by one $ugenio 'altao. Deither had pri"ate respondent con"eyed to petitioner that there are two $ugenio 'altaos conducting business in the same building he and his son $ugenio 'altao III. Considering that :uaranteed, which recei"ed the goods in payment of which the bouncing chec& was issued is owned by respondent, petitioner acted in good faith and probable cause in filing the complaint before the pro"incial fiscal. To constitute malicious prosecution, there must be proof that the prosecution was prompted by a sinister design to "ex and humiliate a person, and that it was initiated deliberately by the defendant &nowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not ma&e one liable for malicious prosecution. ,!anila :as Corporation "s. Court of Appeals, 044 #C@A 546 O0124P/. #till, pri"ate respondent argues that liability under Articles 01, 64, and 60 of the Ci"il Code is so encompassing that it li&ewise includes liability for damages for malicious prosecution under Article 6601 ,2/. True, a ci"il action for damages for malicious prosecution is allowed under the Dew Ci"il Code, more specifically Articles 01, 64, 65, 61, =6, ==, =7, and 6601 ,2/ thereof. In order that such a case can prosper, howe"er, the following three ,=/ elements must be present, to wit< ,0/ The fact of the prosecution and the further fact that the defendant was himself the prosecutor, and that the action was finally terminated with an ac8uittalA ,6/ That in bringing the action, the prosecutor acted without probable causeA ,=/ The prosecutor was actuated or impelled by legal malice ,Lao "s. Court of Appeals, 011 #C@A 72, O0110P/. Thus, a party inIured by the filing of a court case against him, e"en if he is later on absol"ed, may file a case for damages grounded either on the principle of abuse of rights, or on malicious prosecution. As earlier stated, a complaint for damages based on malicious prosecution will prosper only if the three ,=/ elements aforecited are shown to exist. In the case at bar, the second and third elements were not shown to exist. It is well.settled that one cannot be held liable for maliciously instituting a prosecution where one has acted with probable cause. U robable cause is the existence of such facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the &nowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted. In other words, a suit will lie only in cases where a legal prosecution has been carried on without probable cause. The reason for this rule is that it would be a "ery great discouragement to public Iustice, if prosecutors, who had tolerable ground of suspicion, were liable to be sued at law when their indictment miscarriedU ,Bue "s. Intermediate Appellate Court, 051 #C@A 0=3 O0121P/. The presence of probable cause signifies, as a legal conse8uence, the absence of malice. In the instant case, it is e"ident that petitioners were not moti"ated by malicious intent or by sinister design to unduly harass pri"ate respondent, but only by a well.founded anxiety to protect their rights when they filed the criminal complaint against pri"ate respondent. To constitute malicious prosecution, there must be proof that the prosecution was prompted by a sinister design to "ex and humiliate a person, that it was initiated deliberately by the defendant &nowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does

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not ma&e one liable for malicious prosecution. roof and moti"e that the institution of the action was prompted by a sinister design to "ex and humiliate a person must be clearly and preponderantly established to entitle the "ictims to damages ,/"id./. In the case at bar, there is no proof of a sinister design on the part of petitioners to "ex or humiliate pri"ate respondent by instituting the criminal case against him. +hile petitioners may ha"e been negligent to some extent in determining the liability of pri"ate respondent for the dishonored chec&, the same is not so gross or rec&less as to amount to bad faith warranting an award of damages. The root of the contro"ersy in this case is founded on a case of mista&en identity. It is possible that with a more assiduous in"estigation, petitioners would ha"e e"entually disco"ered that pri"ate respondent $ugenio #. 'altao is not the U$ugenio 'altaoU responsible for the dishonored chec&. %owe"er, the record shows that petitioners did exert considerable effort in order to determine the liability of pri"ate respondent. Their in"estigation pointed to pri"ate respondent as the U$ugenio 'altaoU who issued and signed the dishonored chec& as the president of the debtor.corporation :uaranteed $nterprises. Their error in proceeding against the wrong indi"idual was ob"iously in the nature of an innocent mista&e, and cannot be characterized as ha"ing been committed in bad faith. This error could ha"e been disco"ered if respondent had submitted his counter.affida"it before in"estigating fiscal #umaway and was immediately rectified by ro"incial *iscal !auro Castro upon disco"ery thereof, i.e., during the rein"estigation resulting in the dismissal of the complaint. *urthermore, the ad"erse result of an action does not per se ma&e the act wrongful and subIect the actor to the payment of moral damages. The law could not ha"e meant to impose a penalty on the right to litigate, such right is so precious that moral damages may not be charged on those who may e"en exercise it erroneously. And an ad"erse decision does not ipso facto Iustify the award of attorneyVs fees to the winning party ,:arcia "s. :onzales, 02= #C@A 36 O0114P/. Thus, an award of damages and attorneyVs fees is unwarranted where the action was filed in good faith. If damage results from a personVs exercising his legal rights, it is damnum a"sque in5uria ,Ilocos Dorte $lectric Company "s. Court of Appeals, 031 #C@A 7 O0121P/. Coming now to the claim of pri"ate respondent for actual or compensatory damages, the records show that the same was based solely on his allegations without proof to substantiate the same. %e did not present proof of the cost of the medical treatment which he claimed to ha"e undergone as a result of the ner"ous brea&down he suffered, nor did he present proof of the actual loss to his business caused by the unIust litigation against him. In determining actual damages, the court cannot rely on speculation, conIectures or guesswor& as to the amount. +ithout the actual proof of loss, the award of actual damages becomes erroneous ,:uilatco "s. City of )agupan, 030 #C@A =26 O0121P/. Actual and compensatory damages are those reco"erable because of pecuniary loss in business, trade, property, profession, Iob or occupation and the same must be pro"ed, otherwise, if the proof is flimsy and unsubstantiated, no damages will be gi"en ,@ubio "s. Court of Appeals, 0-0 #C@A -22 O0125P/. *or these reasons, it was gra"ely erroneous for respondent court to ha"e affirmed the award of actual damages in fa"or of pri"ate respondent in the absence of proof thereof. +here there is no e"idence of the other party ha"ing acted in wanton, fraudulent or rec&less, or oppressi"e manner, neither may exemplary damages be awarded ,)ee %ua Liong $lectrical $8uipment Corporation "s. @eyes, 0-7 #C@A -22 O0125P/.

As to the award of attorneyVs fees, it is well.settled that the same is the exception rather than the general rule. Deedless to say, the award of attorneyVs fees must be disallowed where the award of exemplary damages is eliminated ,Article 6642, Ci"il CodeA Agustin "s. Court of Appeals, 025 #C@A =37 O0114P/. !oreo"er, in "iew of the fact that there was no malicious prosecution against pri"ate respondent, attorneyVs fees cannot be awarded him on that ground. In the final analysis, there is no proof or showing that petitioners acted maliciously or in bad faith in the filing of the case against pri"ate respondent. Conse8uently, in the absence of proof of fraud and bad faith committed by petitioners, they cannot be held liable for damages ,$scritor, >r. "s. Intermediate Appellate Court, 077 #C@A 733 O0123P/. Do damages can be awarded in the instant case, whether based on the principle of abuse of rights, or for malicious prosecution. The 8uestioned Iudgment in the instant case attests to the propensity of trial Iudges to award damages without basis. Lower courts are hereby cautioned anew against awarding unconscionable sums as damages without bases therefor. +%$@$*;@$, the petition is :@ADT$) and the decision of the Court of Appeals in C.A. :.@. C.9. Do. 0-1-2 dated !ay 0=, 0121, is hereby @$9$@#$) and #$T A#I)$. Costs against respondent 'altao. #; ;@)$@$). G.R. No. 1E7E19. M"rc :E, 1997 FRAN1L*N M. DR*LON, A2REL*O ). 0RAM/E, GREGOR*O A. AR*;ALA, )E+AR M. +OL*+ "n3 FERD*NAND R. A4E+AM*+, petitioners, vs. )O2R0 OF A//EAL+, .ON. GEORGE ). MA)L*-*NG, in i! c"#"cit$ "! /re!i3in% 983%e o& 4r"nc 1EE o& t e Re%ion"' 0ri"' )o8rt o& <8e=on )it$, "n3 .OMO4ONO ADA;A,respondents. .ERMO+*+*MA, 9R., J.> etitioners see& the re"ersal of the @esolutions of respondent Court of Appeals in CA.:.@. # Do. 67424 dated >anuary =0, 0116 and #eptember 6, 0116 affirming the ;rders, dated *ebruary 2, 0110 and !ay 0-, 0110, of respondent >udge :eorge C. !acli.ing which denied herein petitioner(s !otion to )ismiss the complaint filed in Ci"il Case Do. B.14.543= by respondent %omobono Adaza. The facts are not in dispute. In a letter.complaint to then #ecretary of >ustice *ran&lin )rilon O0P dated !arch 64, 0114, :eneral @enato de 9illa,O6P who was then the Chief of #taff of the Armed *orces of the hilippines, re8uested the )epartment of >ustice to order the in"estigation of se"eral indi"iduals named therein, including herein pri"ate respondent %omobono Adaza, for their alleged participation in the failed )ecember 0121 coup dGetat. The letter.complaint was based on the affida"it of 'rigadier :eneral AleIandro :alido, Captain ;scarlito !apalo, Colonel >uan !amorno, Colonel %ernani *igueroa and !aIor $duardo #ebastian. :en. de 9illa(s letter.complaint with its annexes was referred for preliminary in8uiry to the #pecial Composite Team of rosecutors created pursuant to )epartment of >ustice ;rder Do. 7 dated >anuary 04, 0114. etitioner then Assistant Chief #tate rosecutor Aurelio Trampe,O=P the Team Leader, finding sufficient basis to continue the in8uiry, issued a subpoena to the indi"iduals named in the letter.complaint, Adaza included, and assigned the case for preliminary in"estigation to a panel of in"estigators composed of prosecutors :eorge Arizala, as Chairman, and *erdinand Abesamis and Cesar #olis as members. The case was doc&eted as I.#. Do. );>.#C.14.40=. Page82 ;n April 03, 0114, the panel released its findings, thru a @esolution, which reads<

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H @$!I#$# C;D#I)$@$), we find and so hold that there is probable cause to hold herein respondents for trial for the crime of @$'$LLI;D +IT% !F@)$@ AD) *@F#T@AT$) !F@)$@. %ence we respectfully recommend the filing of the corresponding information against them in court.JO-P The abo"e @esolution became the basis for the filing of an Information, dated April 02, 0114, charging pri"ate respondent with the crime of rebellion with murder and frustrated murder before the @egional Trial Court of Buezon City, with no recommendation as to bail.O5P *eeling aggrie"ed by the institution of these proceedings against him, pri"ate respondent Adaza filed a complaint for damages,O3P dated >uly 00, 0114, before 'ranch 044 of the @egional Trial Court of Buezon City. The complaint was doc&eted as Ci"il Case Do. B.14.543= entitled, H 4omo"ono Ada7a, plaintiff versus (ranklin Drilon, et al., respondents.J In his complaint, Adaza charged petitioners with engaging in a deliberate, willful and malicious experimentation by filing against him a charge of rebellion complexed with murder and frustrated murder when petitioners, according to Adaza, were fully aware of the non.existence of such crime in the statute boo&s. ;n ;ctober 07, 0114, petitioners filed a !otion to )ismiss Adaza(s complaint on the ground that said complaint states no actionable wrong constituting a "alid cause of action against petitioners. ;n *ebruary 2, 0110, public respondent Iudge issued an ;rder O2P denying petitioners( !otion to )ismiss. In the same ;rder, petitioners were re8uired to file their answer to the complaint within fifteen ,07/ days from receipt of the ;rder. etitioners mo"ed for a reconsideration of the ;rder of denial, but the same was li&ewise denied by respondent >udge in another ;rder dated !ay 0-, 0110. O1P The subse8uent ;rder reiterated that petitioners file their responsi"e pleading within the prescribed reglementary period. Instead of filing their answer as ordered, petitioners filed on >une 7, 0110 a petition for certiorari under @ule 57 before the Court of Appeals, doc&eted as CA.:.@. Do. 67424, alleging gra"e abuse of discretion on the part of the respondent >udge in ruling that sufficient cause of action exists to warrant a full.blown hearing of the case filed by Adaza and thus denying petitioners( !otion to )ismiss. In its @esolution promulgated on >anuary =0, 0116, the appellate court dismissed the petition for lac& of merit and ordered respondent >udge to proceed with the trial of Ci"il Case Do. B.14.543=. O04P A !otion for @econsideration ha"ing been subse8uently filed on *ebruary 62, 0116, the court a quo denied the same in a @esolution dated #eptember 6, 0116.O00P %ence, this petition, dated ;ctober 1, 0116, pleading this Court to exercise its power of re"iew under @ule -7 of the @e"ised @ules of Court. ;n >anuary 0=, 011=, howe"er, this Court, thru the #econd )i"ision, dismissed the petition for failure to comply with @e"ised Circular Do. 0.22, particularly the re8uirement on the payment of the prescribed doc&eting fees.O06P ;n !arch 2, 011=,O0=P we reinstated the petition and re8uired the respondents to comment on the aforesaid petition. In the same @esolution, a temporary restraining order was issued by this Court enIoining respondent >udge from further proceeding with Ci"il Case Do. B.14.543= until further orders from this Court. The petition has merit. In his Comment, dated !arch 6=, 011=, respondent Adaza maintains that his claim before the trial court was merely a suit for damages based on tort by reason of petitioners( "arious malfeasance, misfeasance and nonfeasance in office, as well as for "iolation by the petitioners of #ection = ,e/ of @epublic
O0-P O7P

Act Do. =401, otherwise &nown as the Anti.:raft and Corrupt ractices Act. It was not a suit for malicious prosecution. ri"ate respondent is ta&ing us for a ride. A cursory perusal of the complaint filed by Adaza before respondent >udge :eorge !acli.ing re"eals that it is one for malicious prosecution against the petitioners for the latter(s filing of the charge against him of rebellion with murder and frustrated murder. An examination of the records would show that this latest posture as to the nature of his cause of action is only being raised for the first time on appeal. Dowhere in his complaint filed with the trial court did respondent Adaza allege that his action is one based on tort or on #ection = ,e/ of @epublic Act Do. =401. #uch a change of theory cannot be allowed. +hen a party adopts a certain theory in the court below, he will not be permitted to change his theory on appeal, for to permit him to do so would not only be unfair to the other party but it would also be offensi"e to the basic rules of fair play, Iustice and due process. O07P Any member of the 'ar, e"en if not too schooled in the art of litigation, would easily discern that Adaza(s complaint is no doubt a suit for damages for malicious prosecution against the herein petitioners. Fnfortunately, howe"er, his complaint filed with the trial court suffers from a fatal infirmity .. that of failure to state a cause of action .. and should ha"e been dismissed right from the start. +e shall show why. The term malicious prosecution has been defined in "arious ways. In American Iurisdiction, it is defined as< H;ne begun in malice without probable cause to belie"e the charges can be sustained ,$ustace v. )echter, 62 Cal. App. 6d. 345,2= . 6d. 767/. Instituted with intention of inIuring defendant and without probable cause, and which terminates in fa"or of the person prosecuted. *or this inIury an action on the case lies, called the action of malicious prosecution ,%ic&s v. 'rantley, 61 #.$. -71, 046 :a. 65-A $ggett v. Allen, 15 D.+. 24=, 001 +is. 567/.JO05P In hilippine Iurisdiction, it has been defined as< HAn action for damages brought by one against whom a criminal prosecution, ci"il suit, or other legal proceeding has been instituted maliciously and without probable cause, after the termination of such prosecution, suit, or other proceeding in fa"or of the defendant therein. The gist of the action is the putting of legal process in force, regularly, for the mere purpose of "exation or inIury ,Cabasaan ". Anota, 0-051.@, Do"ember 01, 0175/.JO03P The statutory basis for a ci"il action for damages for malicious prosecution are found in the pro"isions of the Dew Ci"il Code on %uman @elations and on damages particularly Articles 01, 64, 60, 65, 61, =6, ==, =7, 6603 and 6601 ,2/.O02P To constitute malicious prosecution, howe"er, there must be proof that the prosecution was prompted by a sinister design to "ex and humiliate a person, and that it was initiated deliberately by the defendant &nowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not ma&e one liable for malicious prosecution. O01P Thus, in order for a malicious prosecution suit to prosper, the plaintiff must pro"e three ,=/ elements< ,0/ the fact of the prosecution and the further fact that the defendant was himself the prosecutor and that the action finally terminated with an ac8uittalA ,6/ that in bringing the action, the prosecutor acted without probable causeA and ,=/ that the prosecutor was actuated or impelled by legal malice, that is by improper or sinister moti"e.O64P All these re8uisites must concur. >udging from the face of the complaint itself filed by Adaza against the herein petitioners, none of the foregoing re8uisites ha"e been alleged therein, thus rendering the complaint dismissible on the ground of failure to state a cause of action under #ection 0 ,g/, @ule 05 of the @e"ised @ules of Court.

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There is nothing in the records which shows, and the complaint does not allege, that Criminal Case Do. B.14.00277, filed by the petitioners against respondent Adaza for @ebellion with !urder and *rustrated !urder, has been finally terminated and therein accused Adaza ac8uitted of the charge. Dot e"en Adaza himself, thru counsel, ma&es any positi"e asse"eration on this aspect that would establish his ac8uittal. Insofar as Criminal Case Do. B.14.00277 is concerned, what appears clear from the records only is that respondent has been discharged on a writ of habeas corpus and granted bail. O60P This is not, howe"er, considered the termination of the action contemplated under hilippine Iurisdiction to warrant the institution of a malicious prosecution suit against those responsible for the filing of the informaion against him. The complaint li&ewise does not ma&e any allegation that the prosecution acted without probable cause in filing the criminal information dated April 02, 0114 for rebellion with murder and frustrated murder. $lementarily defined, probable cause is the existence of such facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the &nowledge of the prosecutor, that the person charged was guilty of the crime for which he was prosecuted. It is well.settled that one cannot be held liable for maliciously instituting a prosecution where one has acted with probable cause. $lsewise stated, a suit for malicious prosecution will lie only in cases where a legal prosecution has been carried on without probable cause. The reason for this rule is that it would be a "ery great discouragement to public Iustice, if prosecutors, who had tolerable ground of suspicion, were liable to be sued at law when their indictment miscarried.O66P In the case under consideration, the decision of the #pecial Team of rosecutors to file the information for rebellion with murder and frustrated murder against respondent Adaza, among others, cannot be dismissed as the mere product of whim or caprice on the part of the prosecutors who conducted the preliminary in"estigation. #aid decision was fully Iustified in an eighteen ,02/.page @esolution dated April 03, 0114.O6=P +hile it is true that the petitioners were fully aware of the pre"ailing Iurisprudence enunciated in People v. 4ernande7,O6-P which proscribes the complexing of murder and other common crimes with rebellion, petitioners were of the honest con"iction that the %ernandez Case can be differentiated from the present case. The petitioners thus argued< H;f course we are aware of the ruling in eople vs. %ernandez, 11 hil. 707, which held that common crimes li&e murder, arson, etc. are absorbed by rebellion. %owe"er, the %ernandez case is different from the present case before us. In the %ernandez case, the common crimes of murder, arson, etc. were found by the fiscal to ha"e been committed as a necessary means to commit rebellion, or in furtherance thereof. Thus, the fiscal filed an information for rebellion alleging those common crimes as a necessary means of committing the offense charged under the second part of Article -2, @ C. +e, howe"er, find no occasion to apply the %ernandez ruling since as intimated abo"e, the crimes of murder and frustrated murder in this case were absolutely unnecessary to commit rebellion although they were the natural conse8uences of the unlawful bombing. %ence, the applicable pro"ision is the first part of Article -2 of the @ C.JO67P +hile the #upreme Court in the case of $nrile v. #alazar,O65P addressing the issue of whether or not the %ernandez doctrine is still good law, in a 04.= "ote, did not sustain the position espoused by the herein petitioners on the matter, three IusticesO63P felt the need to re.study the %ernandez ruling in light of present. day de"elopments, among whom was then Chief >ustice !arcelo *ernan who wrote a dissenting opinion in this wise< HI am constrained to write this separate opinion on what seems to be a rigid adherence to the 0175 ruling of the Court. The numerous challenges to the doctrine enunciated in the case of People vs. 4ernande7, 11

hil. 707 ,0175/, should at once demonstrate the need to redefine the applicability of said doctrine so as to ma&e it conformable with accepted and well.settled principles of criminal law and Iurisprudence. To my mind, the %ernandez doctrine should not be interpreted as an all.embracing authority for the rule that all common crimes committed on the occasion, or in furtherance of, or in connection with, rebellion are absorbed by the latter. To that extent, I cannot go along with the "iew of the maIority in the instant case that N%ernandez remains binding doctrine operating to prohibit the complexing of rebellion with any other offense committed on the occasion thereof, either as a means necessary to its commission or as an unintended effect of an acti"ity that constitutes rebellion( ,p. 1, )ecision/. The %ernandez doctrine has ser"ed the purpose for which it was applied by the Court in 0175 during the communist.inspired rebellion of the %u&s. The changes in our society in the span of =- years since then ha"e far.reaching effects on the all.embracing applicability of the doctrine considering the emergence of alternati"e modes of seizing the powers of the duly.constituted :o"ernment not contemplated in Articles 0=and 0=7 of the @e"ised enal Code and their conse8uent effects on the li"es of our people. The doctrine was good law then, but I belie"e that there is a certain aspect of the %ernandez doctrine that needs clarification.JO62P Apparently, not e"en the #upreme Court then was of one mind in debun&ing the theory being ad"anced by the petitioners in this case, some of whom were also the petitioners in the !nrile case. De"ertheless, we held in !nrile that the Information filed therein properly charged an offense .. that of simple rebellion ..O61P and thereupon ordered the remand of the case to the trial court for the prosecution of the named accusedO=4P in the Information therein. *ollowing this lead, the Information against Adaza in Criminmal Case Do. B.14.00277 was not 8uashed, but was instead treated li&ewise as charging the crime of simple rebellion. A doubtful or difficult 8uestion of law may become the basis of good faith and, in this regard, the law always accords to public officials the presumption of good faith and regularity in the performance of official duties.O=0P Any person who see&s to establish otherwise has the burden of pro"ing bad faith or ill. moti"e. %ere, since the petitioners were of the honest con"iction that there was probable cause to hold respondent Adaza for trial for the crime of rebellion with murder and frustrated murder, and since Adaza himself, through counsel, did not allege in his complaint lac& of probable cause, we find that the petitioners cannot be held liable for malicious prosecution. Deedless to say, probable cause was not wanting in the institution of Criminal Case Do. B.14.00277 against Adaza. As to the re8uirement that the prosecutor must be impelled by malice in bringing the unfounded action, suffice it to state that the presence of probable cause signifies, as a legal conse8uence, the absence of malice.O=6P At the ris& of being repetitious, it is e"ident in this case that petitioners were not moti"ated by malicious intent or by a sinister design to unduly harass pri"ate respondent, but only by a well.founded belief that respondent Adaza can be held for trial for the crime alleged in the information. All told, the complaint, dated >uly 00, 0114, filed by Adaza before 'ranch 044 of the @egional Trial Court against the petitioners does not allege facts sufficient to constitute a cause of action for malicious prosecution. Lac& of cause of action, as a ground for a motion to dismiss under #ection 0 ,g/, @ule 05 of the @e"ised @ules of Court, must appear on the face of the complaint itself, meaning that it must be determined from the allegations of the complaint and from none other. O==P The infirmity of the complaint in this regard is only too ob"ious to ha"e escaped respondent Iudge(s attention. aragraph 0- of the complaint which states< Page82 0-. The malicious prosecution, nay persecution, of plaintiff for a non.existent crime had se"erely inIured and besmirched plaintiff(s name and reputation and fore"er stigmatized his stature as a public figure, thereby

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causing him extreme physical suffering, serious anxiety, mental anguish, moral shoc& and social humiliation.JO=-P is a mere conclusion of law and is not an a"erment or allegation of ultimate facts. It does not, therefore, aid in any wise the complaint in setting forth a "alid cause of action against the petitioners. It is worthy to note that this case was ele"ated to the public respondent Court of Appeals and now to this Court because of respondent >udge !acli.ing(s denial of petitioners( motion to dismiss the Adaza complaint. The ordinary procedure, as a general rule, is that petitioners should ha"e filed an answer, go to trial, and if the decision is ad"erse, reiterate the issue on appeal. O=7P This general rule, howe"er, is subIect to certain exceptions, among which are, if the court denying the motion to dismiss acts without or in excess of Iurisdiction or with gra"e abuse of discretion, in which case certiorari under @ule 57 may be a"ailed of. The reason is that it would be unfair to re8uire the defendants ,petitioners in this case/ to undergo the ordeal and expense of trial under such circumstances, because the remedy of appeal then would then not be plain and ade8uate.O=5P >udge !acli.ing committed gra"e abuse of discretion in denying petitioners( motion to dismiss the Adaza complaint, and thus public respondent Court of Appeals should ha"e issued the writ of certiorari prayed for by the petitioners and annulled the *ebruary 2, 0110 and !ay 0-, 0110 ;rders of respondent >udge. It was grie"ous error on the part of the court a quo not to ha"e done so. This has to be corrected. @espondent Adaza(s baseless action cannot be sustained for this would unIustly compel the petitioners to needlessly go through a protracted trial and thereby unduly burden the court with one more futile and inconse8uential case. B.EREFORE, the petition is :@ADT$). The @esolutions of respondent Court of Appeals dated >anuary =0, 0116 and #eptember 6, 0116 affirming the *ebruary 2, 0110 and !ay 0-, 0110 ;rders of respondent >udge :eorge C. !acli.ing are all hereby DFLLI*I$) AD) #$T A#I)$. @espondent >udge is )I@$CT$) to ta&e no further action on Ci"il Case Do. B.14.543= except to )I#!I## the same. +O ORDERED.

UFpon the e"idence, and from the findings of the lower court, it appears that in the morning of August 66, 0134, plaintiff >ose >. $spino. >r., a ci"il engineer and an executi"e of rocter and :amble hilippines, Inc., and his wife and their two daughters went to shop at the defendantsV #outh #upermar&et in !a&ati. +hile his wife was shopping at the groceries section, plaintiff browsed around the other parts of the mar&et. *inding a cylindrical Urat tailU file which he needed in his hobby and had been wanting to buy, plaintiff pic&ed up that item from one of the shel"es. %e held it in his hand thin&ing that it might be lost, because of its tiny size, if he put it in his wifeVs grocery cart. In the course of their shopping, plaintiff and his wife saw the maid of plaintiffVs aunt. +hile tal&ing to this maid, plaintiff stuc& the file into the front breast poc&et of his shirt with a good part of the merchandise exposed. UAt the chec&.out counter, the plaintiff paid for his wifeVs purchases which amounted to 33.44, but he forgot to pay for the file. As he was lea"ing by the exit of the supermar&et on his way to his car, carrying two bags of groceries and accompanied by his wife and two daughter, plaintiff was approached by a uniformed guard of the supermar&et who said< U$xcuse me, !r., I thin& you ha"e something in your poc&et which you ha"e not paid for.U ,p. 7, tsn, Aug. 0=, 0130/, pointing to his left front breast poc&et. #uddenly reminded of the file, plaintiff apologized thus< UI am sorry,U and he turned bac& toward the cashier to pay for the file. 'ut the guard stopped him and led him instead toward the rear of the supermar&et. The plaintiff protested but the guard was firm saying< UDo, !r., please come with me. It is the procedure of the supermar&et to bring people that we apprehend to the bac& of the supermar&etU ,p. 2, Ibid/. The time was between 1 and 04 oVcloc&. A crowd of customers on their way into the supermar&et saw the plaintiff being stopped and led by a uniformed guard toward the rear of the supermar&et. laintiff ac8uiesced and signaled to his wife and daughters to wait. UInto a cubicle which was immediately adIacent to the area where deli"eries to the supermar&et were being made, the plaintiff was ushered. The guard directed him to a table and ga"e the file to the man seated at the des&. Another man stood beside the plaintiff. The man at the des& loo&ed at the plaintiff and the latter immediately explained the circumstances that led to the finding of the file in his possession. The man at the des& pulled out a sheet of paper and began to as& plaintiffVs name, age, residence and other personal data. laintiff was as&ed to ma&e a brief statement, and on the sheet of paper or UIncident @eportU he wrote down the following< U+hile tal&ing to my auntVs maid with my wife, I put this item in my shirt poc&et. I forgot to chec& it out with my wifeVs itemsU ,$xhibit A/. !eanwhile, the plaintiffVs wife Ioined him and as&ed what had ta&en him so long. UThe guard who had accosted plaintiff too& him bac& inside the supermar&et in the company of his wife. laintiff and his wife were directed across the main entrance to the shopping area, down the line of chec&. out counters, to a des& beside the first chec&out counter. To the woman seated at the des&, who turned out to be defendant Delia #antos.*andino, the guard presented the incident report and the file, $xhibit '. )efendant *andino read the report and addressing the guard remar&ed< UAno, na&aw na naman itoU ,p. 66, Id./. laintiff explained and narrated the incident that led to the finding of the file in his poc&et, telling *andino that he was going to pay for the file because he needed it. 'ut this defendant replied< UThat is all they say, the people whom we cause not paying for the goods say... They all intended to pay for the things that are found to them.U ,p. 6=, Id/. laintiff obIected and said that he was a regular customer of the supermar&et. U$xtracting a 7.44 bill from his poc&et, plaintiff told *andino that he was paying for the file whose cost was =.27. *andino reached o"er and too& the 7.44 bill from plaintiff with these words< U+e are fining you 7.44. That is your the fine.U laintiff was shoc&ed. %e and his wife obIected "igorously that he was not a common criminal, and they wanted to get bac& the 7.44. 'ut *andino told them that the money would be gi"en as an incenti"e to the guards who apprehend pilferers. eople were milling around them and staring at the plaintiff. laintiff ga"e up the discussion. %e drew a 74.44 bill and too& bac& the file. *andino directed him to the nearest chec&.out counter where he had to fall in line. The people who heard the exchange of words between *andino and plaintiff continued to stare at him. At the trial, plaintiff expressed his

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G.R. No. L-C8:5E Dece7ber :8, 1979 GRAND 2N*ON +2/ERMAR1E0, *N). "n3 NEL*A +AN0O+ FAND*NO, petitioners, "s. 9O+E 9. E+/*NO 9R., "n3 0.E .ONORA4LE )O2R0 OF A//EAL+, respondents. G2ERRERO, J. This is a petition tor certiorari by way of appeal from the decision of the Court of Appeals 1 dated #eptember 65, 0133 rendered in CA.:.@. Do. 77025.@ entitled U?ose ?. !spino, ?r., plaintiffAappellant. versus :rand Hnion 0upermarket, /nc. and Nelia 0antosA(andino, defendants.appellees,U the dispositi"e portion of which statesA +%$@$*;@$, the appealed Iudgment is hereby re"ersed and set aside. )efendants are ordered to pay plaintiff.Iointly and se"erally, the sum of #e"enty.*i"e Thousand esos , 37,444.44/ by way of moral damages. Twenty.*i"e Thousand esos , 67,444.44/ as exemplary damages, and *i"e Thousand esos , 7,444.44/ as attorneyVs fee, Costs of both instances shall be taxed against the defendant defendants. The facts of the case are as stated in the decision of the respondent court to wit<

Page82

embarrassment and humiliation thus< U I felt as though I wanted to disappear into a hole on the groundU ,p. =-, Id./. After paying for the file, plaintiff and his wife wal&ed as fast as they could out of the supermar&et. %is first impulse was to go bac& to the supermar&et that night to throw roc&s at its glass windows. 'ut reason pre"ailed o"er passion and he thought that Iustice should ta&e its due course. U laintiff was certain during the trial that when he signed the incident report, $xhibit A, inside the cubicle at the bac& of the supermar&et only his brief statement of the facts ,$xhibit A.6/, aside from his name and personal circumstances, was written thereon. %e swore that the following were not in the incident report at, the time he signed it< $xhibit A.I which says opposite the stenciled word #F'>$CT U#hopliftingU $xhibit A.= which says opposite the stenciled words Action Ta&en< @eleased by !rs. *andino after paying the item. $xhibit A.- which says opposite the stenciled words @emar&s Doted< U:rd. $breo re8uested :rd. aunil to apprehend subIect shoplifter. ri"ate respondentVs complaint filed on ;ctober 2, 0134 is founded on Article 60 in relation to Article 6601 of the Dew Ci"il Code and prays for moral damages, exemplary damages, attorney s fees and Vexpenses of litigation, costs of the suit and the return of the 7.44 fine. After trial, the Court of *irst Instance of asig, @izal, 'ranch GIG dismissed the complaint, Interposing the appeal to the Court of Appeals, the latter re"ersed and set aside the appealed Iudgment, granting and damages as earlier stated. Dot satisfied with the decision of the respondent court, petitioners instituted the present petition and submits the following grounds andQor assignment of errors, to wit< I. @espondent Court of Appeals erred in awarding moral and exemplary damages to the respondent $spino under Articles 01 and 60 in relation to Article 6601 of the Ci"il Code, considering that A. @espondent $spino was guilty of theftA '. etitioners legitimately exercised their right of defense of property within the context of Article -61 of the Ci"il Code negating the application of Articles 01 and 60 of the same CodeA C. etitioners acted upon probable cause in stopping and in"estigating respondent $spino for shoplifting and as held in "arious decisions in the Fnited #tates on shoplifting, a merchant who acts upon probable cause should not be held liable in damages by the suspected shoplifterA ). etitioners did not exercise their right maliciously, wilfully or in bad faithA andQor $. The proximate cause of respondent $spinoVs alleged inIury or suffering was his own negligence or forgetfulnessA petitioners acted in good faith.

II. Assuming ar'uendo that petitioners are hable for moral and exemplary damages, the award of 37,444.44 for moral damages and 67,444.44 for exemplary damages by the respondent Court of Appeals is not legally Iustified andQor is grossly excessi"e in the premises. III. The award of 7,444.44 for attorneyVs fees by the respondent Court of Appeals is unIustified and unwarranted under Article 6011 of the Ci"il Code.

+e agree with the holding of the respondent appellate court that Uthe e"idence sustains the courtVs finding that the plaintiff had absolutely no intention to steal the file.U The totality of the facts and circumstances as found by the Court of Appeals unerringly points to the conclusion that pri"ate respondent did not intend to steal the file and that is act of pic&ing up the file from the open shelf was not criminal nor done with malice or criminal intent for on the contrary, he too& the item with the intention of buying and paying for it. This Court needs only to stress the following undisputed facts which strongly and con"incingly uphold the conclusion that pri"ate respondent was not Ushoplifting.U Thus, the facts that pri"ate respondent after pic&ing the cylindrical Urat.tailU file costing =.27 had placed it inside his left front breast poc&et with a good portion of the item exposed to "iew and that he did not conceal it in his person or hid it from sight as well as the fact that he paid the purchases of his wife amounting to 33.44 at the chec&out counter of the #upermar&et, owed that he was not acting suspiciously or furti"ely. And the circumstance that he was with his family consisting of his wife !rs. Caridad >ayme $spino, and their two daughters at the time negated any criminal intent on his part to steal. !oreo"er, when pri"ate respondent was approached by the guard of the #upermar&et as he was lea"ing by the exit to his car who told him, U$xcuse me, !r., I thin& you ha"e something in your poc&et which you ha"e not paid for,U $spino, immediately apologized and answered, UI am sorry,U which indicated his sincere apology or regrets. %e turned bac& towards the cashier to pay for the file which pro"ed his honesty sincerity and good faith in buying the item, and not to shoplift the same. %is brief statement on the sheet of paper called the Incident @eport where pri"ate respondent wrote the following< U+hile tal&ing to my auntVs maid with my wife, I put this item in in my shirt poc&et. I forgot to chec& it out with my wifeVs item,U was an instant and contemporaneous explanation of the incident. Considering further the personal circumstances of the pri"ate respondent. his education, position and character showing that he is a graduate !echanical $ngineer from F. . Class 0174, employed as an executi"e of roctor ? :amble hils., Inc., a corporate manager incharge of motoring and warehousing thereinA honorably discharged from the hilippine Army in 01-5A a hilippine go"ernment pensionado of the Fnited #tates for six monthsA member of the hilippine "eterans LegionA author of articles published in the !anila #unday Times and hilippines *ree ressA member of the Lnights of Columbus, Council Do. =30=A son of the late >ose !aria $spino, retired !inister, )epartment of *oreign Affairs at the hilippine $mbassy +ashington, +e are fully con"inced, as the trial and appellate courts were, that pri"ate respondent did not intend to steal the article costing =.27. Dothing in the records intimates or hints whatsoe"er that pri"ate respondent has had any police record of any sort much less suspicion of stealing or shoplifting. +e do not lay down here any hard.and.fast rule as to what act or combination of acts constitute the crime of shoplifting for it must be stressed that each case must be considered and adIudged on a case.to.case basis and that in the determination of whether a person suspected of shoplifting has in truth and in fact committed the same, all the attendant facts and circumstances should be considered in their entirety and not from any single fact or circumstance from which to impute the stigma of shoplifting on any person suspected and apprehended therefor. +e li&ewise concur with the Court of Appeals that U,u/pon the facts and under the law, plaintiff has clearly made the cause of action for damages against the defendants. )efendants wilfully caused loss or inIury to

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plaintiff in a manner that was contrary to morals, good customs or public policy, ma&ing them amenable to damages under Articles 01 and 60 in relation to Article 6601 of the Ci"il Code.U : That pri"ate respondent was falsely accused of shoplifting is e"ident. The Incident @eport ,$xhibit A/ with the entries thereon under $xhibit A.0 which says opposite the stenciled word #F'>$CT< U#hoplifting,U $xhibit A. = which says opposite the stenciled words Action Ta&en< @elesed by !rs. *andino after paying the item,U $xhibit A.- which says opposite the stenciled words @emar&s Doted< :rd. $breo re8uested :rd. aunil to apprehend subIect shoplifter,U established the opinion, Iudgment or thin&ing of the management of petitionerVs supermar&et upon pri"ate respondentVs act of pic&ing up the file. ln plain words, pri"ate respondent was regarded and pronounced a shoplifter and had committed Ushoplifting.U +e also affirm the Court of AppealsV finding that petitioner Delia #antos *andino, after reading the incident report, remar&ed the following< UAno, na&aw na naman itoU. #uch a remar& made in the presence of pri"ate respondent and with reference to the incident report with its entries, was offensi"e to pri"ate respondentVs dignity and defamatory to his character and honesty. +hen $spino explained that he was going to pay the file but simply forgot to do so, *andino doubted the explanation. saying< UThat is all what they say, the people whom we caught not paying for the goods say... they all intended to pay for the things that are found to them.U ri"ate respondent obIected and said that he was a regular customer of the #upermar&et. The admission of *andino that she re8uired pri"ate respondent to pay a fine of 7.44 and did in fact ta&e the 7.44 bill of pri"ate respondent tendered by the latter to pay for the file, as a fine which would be gi"en as an incenti"e to the guards who apprehend pilferers clearly pro"ed that *andino branded pri"ate respondent as a thief which was not right nor Iustified. The testimony of the guard that management instructed them to bring the suspected customers to the public area for the people to see those &ind of customers in order that they may be embarassed ,p. 65, tsn, #ept. =4, 0130/A that management wanted Uthe customers to be embarrassed in public so that they will not repeat the stealing againU ,p. 6, tsn, )ec. 04, 0130/A that the management as&ed the guards Uto bring these customers to different cashiers in order that they will &now that they are pilferersU ,p. 6, Ibid./ may indicate the manner or pattern whereby a confirmed or self.confessed shoplifter is treated by the #upermar&et management but in the case at bar, there is no showing that such procedure was ta&en in the case of the pri"ate respondent who denied strongly and "ehemently the charge of shoplifting. Donetheless, the false accusation charged against the pri"ate respondent after detaining and interrogating him by the uniformed guards and the mode and manner in which he was subIected, shouting at him, imposing upon him a fine, threatening to call the police and in the presence and hearing of many people at the #upermar&et which brought and caused him humiliation and embarrassment, sufficiently rendered the petitioners liable for damages under Articles 01 and 60 in relation to Article 6601 of the Ci"il Code. +e rule that under the facts of the case at bar, petitioners wilfully caused loss or inIury to pri"ate respondent in a manner that was contrary to morals, good customs or public policy. It is against morals, good customs and public policy to humiliate, embarrass and degrade the dignity of a person. $"eryone must respect the dignity, personality, pri"acy and peace of mind of his neighbors and other persons ,Article 65, Ci"il Code/. And one must act with Iustice, gi"e e"eryone his due and obser"e honesty and good faith ,Article 01, Ci"il Code/. ri"ate respondent is entitled to damages but +e hold that the award of #e"enty.*i"e Thousand esos , 37,444.44/ for moral damages and Twenty.*i"e Thousand esos , 67,444.44, for exemplary damages is unconscionable and excessi"e.

+hile no proof of pecuniary loss is necessary in order that moral, nominal, temperate, li8uidated or exemplary damages may be adIudicated, the assessment of such damages, except li8uidated ones, is left to the discretion of the court, according to the circumstances of each case ,Art. 6605, Dew Ci"il Code/. In the case at bar, there is no 8uestion that the whole incident that befell respondent had arisen in such a manner that was created unwittingly by his own act of forgetting to pay for the file. It was his forgetfullness in chec&ing out the item and paying for it that started the chain of e"ents which led to his embarassment and humiliation thereby causing him mental anguish, wounded feelings and serious anxiety. Cet, pri"ate respondentVs act of omission contributed to the occurrence of his inIury or loss and such contributory negligence is a factor which may reduce the damages that pri"ate respondent may reco"er ,Art. 660-, Dew Ci"il Code/. !oreo"er, that many people were present and they saw and heard the ensuing interrogation and altercation appears to be simply a matter of coincidence in a supermar&et which is a public place and the crowd of onloo&ers, hearers or bystanders was not deliberately sought or called by management to witness pri"ate respondentVs predicament. +e do not belie"e that pri"ate respondent was intentionally paraded in order to humiliate or embarrass him because petitionerVs business depended for its success and patronage the good will of the buying public which can only be preser"ed and promoted by good public relations. As succinctly expressed by !r. >ustice >. '. L. @eyes in his concurring and dissenting opinion in angasinan Transportation Company, Inc, "s. Legaspi, 06 #C@A 712, the purpose of moral damages is essentially indemnity or reparation, both punishment or correction. !oral damages are emphatically not intended to enrich a complainant at the expense of a defendantA they are awarded only to enable the inIured party to obtain means, di"ersion or amusements that will ser"e to alle"iate the moral suffering he has undergone, by reason of the defendantVs culpable action. In other words, the award of moral damages is aimed at a restoration, within the limits of the possible, of the spiritual status quo ante and, it must be proportionate to the suffering inflicted. In ;ur considered estimation and assessment, moral damages in the amount of *i"e Thousand esos , 7,444.44/ is reasonable and Iust to award to pri"ate respondent. The grant of Twenty.*i"e Thousand esos , 67,444.44/ as exemplary damages is unIustified. $xemplary or correcti"e damages are imposed by way of example or correction for the public good, in addition to the moral, temperate, li8uidated or compensatory damages ,Art. 6661, Dew Ci"il Code/. $xemplary damages cannot be reco"ered as a matter of rightA the court will decide whether or not they could be adIudicated ,Art. 666=, Dew Ci"il Code/. Considering that exemplary damages are awarded for wanton acts, that they are penal in character granted not by way of compensation but as a punishment to the offender and as a warning to others as a sort of deterrent, +e hold that the facts and circumstances of the case at bar do not warrant the grant of exemplary damages. etitioners acted in good faith in trying to protect and reco"er their property, a right which the law accords to them. Fnder Article -61, Dew Ci"il Code, the owner or lawful possessor of a thing has a right to exclude any person from the enIoyment and disposal thereof and for this purpose, he may use such force as may be reasonably necessary to repel or pre"ent an actual or threatened unlawful physical in"asion or usurpation of his property. And since a person who acts in the fulfillment of a duty or in the lawful exercise of a right or office exempts him from ci"il or criminal liability, petitioner may not be punished by imposing exemplary damages against him. +e agree that petitioners acted upon probable cause in stopping and in"estigating pri"ate respondent for ta&ing the file without paying for it, hence, the imposition of exemplary damages as a warning to others by way of a deterrent is without legal basis. +e, therefore, eliminate the grant of exemplary damages to the pri"ate respondent.

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In the light of the reduction of the damages, +e hereby li&ewise reduce the original award of *i"e Thousand esos , 7,444.44/ as attorneyVs fees to Two Thousand esos , 6,444.44/. +%$@$*;@$, ID 9I$+ ;* T%$ *;@$:;ID:, the Iudgment of the Court of Appeals is hereby modified. etitioners are hereby ordered to pay, Iointly and se"erally, to pri"ate respondent moral damages in the sum of *i"e Thousand esos , 7,444.44/ and the amount of Two Thousand esos , 6,444.44/ as and for attorneyVs feesA and further, to return the 7.44 fine to pri"ate respondent. Do costs. #; ;@)$@$). G.R. No. 1:7685. 98'$ :3, 1998 4LA+ F. O/LE, petitioner, vs. R24EN D. 0ORRE+, ALE6ANDER AG2*RRE, .E)0OR V*LLAN2EVA, )*EL*0O .A4*0O, RO4ER0 4AR4ER+, )ARMEN)*0A REOD*)A, )E+AR +AR*NO, RENA0O VALEN)*A, 0OMA+ /. AFR*)A, .EAD OF 0.E NA0*ONAL )OM/20ER )EN0ER and ).A*RMAN OF 0.E )OMM*++*ON ON A2D*0, respondents. /2NO, 9.> The petition at bar is a commendable effort on the part of #enator 'las *. ;ple to pre"ent the shrin&ing of the right to pri"acy, which the re"ered !r. >ustice 'randeis considered as Uthe most comprehensi"e of rights and the right most "alued by ci"ilized men.UO0P etitioner ;ple prays that we in"alidate Administrati"e ;rder Do. =42 entitled UAdoption of a Dational Computerized Identification @eference #ystemU on two important constitutional grounds, "iz< one, it is a usurpation of the power of Congress to legislate, and two, it impermissibly intrudes on our citizenryVs protected zone of pri"acy. +e grant the petition for the rights sought to be "indicated by the petitioner need stronger barriers against further erosion. A.;. Do. =42 was issued by resident *idel 9. @amos on )ecember 06, 0115 and reads as follows< UA); TI;D ;* A DATI;DAL C;! FT$@IE$) I)$DTI*ICATI;D @$*$@$DC$ #C#T$! +%$@$A#, there is a need to pro"ide *ilipino citizens and foreign residents with the facility to con"eniently transact business with basic ser"ice and social security pro"iders and other go"ernment instrumentalitiesA +%$@$A#, this will re8uire a computerized system to properly and efficiently identify persons see&ing basic ser"ices on social security and reduce, if not totally eradicate, fraudulent transactions and misrepresentationsA +%$@$A#, a concerted and collaborati"e effort among the "arious basic ser"ices and social security pro"iding agencies and other go"ernment instrumentalities is re8uired to achie"e such a systemA D;+, T%$@$*;@$, I, *I)$L 9. @A!;#, resident of the @epublic of the hilippines, by "irtue of the powers "ested in me by law, do hereby direct the following< #$CTI;D 0. !sta"lishment of a National Computeri7ed /dentification Reference 0$stem. A decentralized Identification @eference #ystem among the &ey basic ser"ices and social security pro"iders is hereby established.

#$C. 6 /nterAA'enc$ Coordinatin' Committee. An Inter.Agency Coordinating Committee ,IACC/ to draw.up the implementing guidelines and o"ersee the implementation of the #ystem is hereby created, chaired by the $xecuti"e #ecretary, with the following as members< %ead, residential !anagement #taff

#ecretary, Dational $conomic )e"elopment Authority #ecretary, )epartment of the Interior and Local :o"ernment #ecretary, )epartment of %ealth Administrator, :o"ernment #er"ice Insurance #ystem, Administrator, #ocial #ecurity #ystem, Administrator, Dational #tatistics ;ffice !anaging )irector, Dational Computer Center. #$C. =. 0ecretariat. The Dational Computer Center ,DCC/ is hereby designated as secretariat to the IACC and as such shall pro"ide administrati"e and technical support to the IACC. #$C. -. %inka'e Amon' A'encies. The opulation @eference Dumber , @D/ generated by the D#; shall ser"e as the common reference number to establish a lin&age among concerned agencies. The IACC #ecretariat shall coordinate with the different #ocial #ecurity and #er"ices Agencies to establish the standards in the use of 'iometrics Technology and in computer application designs of their respecti"e systems. #$C. 7. Conduct of /nformation Dissemination Campai'n. The ;ffice of the ress #ecretary, in coordination with the Dational #tatistics ;ffice, the :#I# and ### as lead agencies and other concerned agencies shall underta&e a massi"e tri.media information dissemination campaign to educate and raise public awareness on the importance and use of the @D and the #ocial #ecurity Identification @eference. #$C. 5. (undin'. The funds necessary for the implementation of the system shall be sourced from the respecti"e budgets of the concerned agencies. #$C. 3. 0u"mission of Re'ular Reports. The D#;, :#I# and ### shall submit regular reports to the ;ffice of the resident, through the IACC, on the status of implementation of this underta&ing. #$C. 2. !ffectivit$. This Administrati"e ;rder shall ta&e effect immediately. );D$ in the City of !anila, this 06th day of )ecember in the year of ;ur Lord, Dineteen %undred and Dinety.#ix. ,#:)./ *I)$L 9. @A!;#U A.;. Do. =42 was published in four newspapers of general circulation on >anuary 66, 0113 and >anuary 6=, 0113. ;n >anuary 6-, 0113, petitioner filed the instant petition against respondents, then $xecuti"e #ecretary @uben Torres and the heads of the go"ernment agencies, who as members of the Inter. Agency Coordinating Committee, are charged with the implementation of A.;. Do. =42. ;n April 2, 0113, we issued a temporary restraining order enIoining its implementation.

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/etitioner conten3!< UA. T%$ $#TA'LI#%!$DT ;* A DATI;DAL C;! FT$@IE$) I)$DTI*ICATI;D @$*$@$DC$ #C#T$! @$BFI@$# A L$:I#LATI9$ ACT. T%$ I##FADC$ ;* A.;. D;. =42 'C T%$ @$#I)$DT ;* T%$ @$ F'LIC ;* T%$ %ILI ID$# I#, T%$@$*;@$, AD FDC;D#TITFTI;DAL F#F@ ATI;D ;* T%$ L$:I#LATI9$ ;+$@# ;* T%$ C;D:@$## ;* T%$ @$ F'LIC ;* T%$ %ILI ID$#. 4. T%$ A @; @IATI;D ;* F'LIC *FD)# 'C T%$ @$#I)$DT *;@ T%$ I! L$!$DTATI;D ;* A.;. D;. =42 I# AD FDC;D#TITFTI;DAL F#F@ ATI;D ;* T%$ $GCLF#I9$ @I:%T ;* C;D:@$## T; A @; @IAT$ F'LIC *FD)# *;@ $G $D)ITF@$. ). T%$ I! L$!$DTATI;D ;* A.;. D;. =42 ID#I)I;F#LC LAC# T%$ :@;FD)+;@L *;@ A #C#T$! +%IC% +ILL 9I;LAT$ T%$ 'ILL ;* @I:%T# $D#%@ID$) ID T%$ C;D#TITFTI;D.U O6P Re!#on3ent! co8nter-"r%8e< A. T%$ ID#TADT $TITI;D I# D;T A >F#TICIA'L$ CA#$ A# +;FL) +A@@ADT A >F)ICIAL @$9I$+A 4. A.;. D;. =42 O0115P +A# I##F$) +IT%ID T%$ $G$CFTI9$ AD) A)!IDI#T@ATI9$ ;+$@# ;* T%$ @$#I)$DT +IT%;FT $DC@;AC%ID: ;D T%$ L$:I#LATI9$ ;+$@# ;* C;D:@$##A ). T%$ *FD)# D$C$##A@C *;@ T%$ I! L$!$DTATI;D ;* T%$ I)$DTI*ICATI;D @$*$@$DC$ #C#T$! !AC '$ #;F@C$) *@;! T%$ 'F):$T# ;* T%$ C;DC$@D$) A:$DCI$#A D. A.;. D;. =42 O0115P @;T$CT# AD ID)I9I)FALV# IDT$@$#T ID @I9ACC.O=P

completed the guidelines for the national identification system. O3P All signals from the respondents show their unswer"ing will to implement A.;. Do. =42 and we need not wait for the formality of the rules to pass Iudgment on its constitutionality. In this light, the dissenters insistence that we tighten the rule on standing is not a commendable stance as its result would be to throttle an important constitutional principle and a fundamental right. ** Be no@ co7e to t e core i!!8e!. /etitioner c'"i7! t "t A.O. No. 3E8 i! not " 7ere "37ini!tr"ti(e or3er b8t " '"@ "n3 ence, be$on3 t e #o@er o& t e /re!i3ent to i!!8e . %e alleges that A.;. Do. =42 establishes a system of identification that is all.encompassing in scope, affects the life and liberty of e"ery *ilipino citizen and foreign resident, and more particularly, "iolates their right to pri"acy. etitionerVs sedulous concern for the $xecuti"e not to trespass on the lawma&ing domain of Congress is understandable. The blurring of the demarcation line between the power of the Legislature to ma&e laws and the power of the $xecuti"e to execute laws will disturb their delicate balance of power and cannot be allowed. %ence, the exercise by one branch of go"ernment of power belonging to another will be gi"en a!tricter !cr8tin$ by this Court. The line that delineates Legislati"e and $xecuti"e power is not indistinct. Le%i!'"ti(e #o@er is Uthe authority, under the Constitution, to ma&e laws, and to alter and repeal them.UO2P The Constitution, as the will of the people in their original, so"ereign and unlimited capacity, has "ested this power in the Congress of the hilippines.O1P The grant of legislati"e power to Congress is broad, general and comprehensi"e. O04P The legislati"e body possesses plenary power for all purposes of ci"il go"ernment. O00P Any power, deemed to be legislati"e by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it elsewhere.O06P In fine, except as limited by the Constitution, either expressly or impliedly, legislati"e power embraces all subIects and extends to matters of general concern or common interest. O0=P +hile Congress is "ested with the power to enact laws, t e /re!i3ent eHec8te! t e '"@!.O0-P The executi"e power is "ested in the resident. O07P It is generally defined as the power to enforce and administer the laws.O05P It is the power of carrying the laws into practical operation and enforcing their due obser"ance. O03P As head of the $xecuti"e )epartment, the resident is the Chief $xecuti"e. %e represents the go"ernment as a whole and sees to it that all laws are enforced by the officials and employees of his department.O02P %e has control o"er the executi"e department, bureaus and offices. This means that he has the authority to assume directly the functions of the executi"e department, bureau and office, or interfere with the discretion of its officials.O01P Corollary to the power of control, the resident also has the duty of super"ising the enforcement of laws for the maintenance of general peace and public order. Thus, he is granted "37ini!tr"ti(e #o@er o"er bureaus and offices under his control to enable him to discharge his duties effecti"ely.O64P A37ini!tr"ti(e #o@er i! concerne3 @it t e @orI o& "##'$in% #o'icie! "n3 en&orcin% or3er! "! 3eter7ine3 b$ #ro#er %o(ern7ent"' or%"n!.J:1K *t en"b'e! t e /re!i3ent to &iH " 8ni&or7 !t"n3"r3 o& "37ini!tr"ti(e e&&icienc$ "n3 c ecI t e o&&ici"' con38ct o& i! "%ent!. J::K 0o t i! en3, e c"n i!!8e "37ini!tr"ti(e or3er!, r8'e! "n3 re%8'"tion!. /re!cin3in% &ro7 t e!e #rece#t!, @e o'3 t "t A.O. No. 3E8 in(o'(e! " !8bLect t "t i! not "##ro#ri"te to be co(ere3 b$ "n "37ini!tr"ti(e or3er. An administrati"e order is< U#ec. =. Administrative Irders... Acts of the resident which relate to particular aspects of go"ernmental operation in pursuance of his duties as administrati"e head shall be promulgated in administrati"e orders.UO6=P

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+e now resol"e. * As is usual in constitutional litigation, respondents raise the threshold issues relating to the standing to sue of the petitioner and the Iusticiability of the case at bar. !ore specifically, respondents a"er that petitioner has no legal interest to uphold and that the implementing rules of A.;. Do. =42 ha"e yet to be promulgated. These submissions do not deser"e our sympathetic ear. etitioner ;ple is a distinguished member of our #enate. As a #enator, petitioner is possessed of the re8uisite standing to bring suit raising the issue that the issuance of A.;. Do. =42 is a usurpation of legislati"e power. O-P As taxpayer and member of the :o"ernment #er"ice Insurance #ystem ,:#I#/, petitioner can also impugn the legality of the misalignment of public funds and the misuse of :#I# funds to implement A.;. Do. =42.O7P The ripeness for adIudication of the petition at bar is not affected by the fact that the implementing rules of A.;. Do. =42 ha"e yet to be promulgated. etitioner ;ple assails A.;. Do. =42 as in"alid per se and as infirmed on its face. %is action is not premature for the rules yet to be promulgated cannot cure its fatal defects. !oreo"er, the respondents themsel"es ha"e started the implementation of A.;. Do. =42 without waiting for the rules. As early as >anuary 01, 0113, respondent #ocial #ecurity #ystem ,###/ caused the publication of a notice to bid for the manufacture of the Dational Identification ,I)/ card. O5P @espondent $xecuti"e #ecretary Torres has publicly announced that representati"es from the :#I# and the ### ha"e

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An administrati"e order is an ordinance issued by the resident which relates to specific aspects in the administrati"e operation of go"ernment. *t 78!t be in "r7on$ @it t e '"@ "n3 ! o8'3 be &or t e !o'e #8r#o!e o& i7#'e7entin% t e '"@ "n3 c"rr$in% o8t t e 'e%i!'"ti(e #o'ic$. J:CK Be reLect t e "r%87ent t "t A.O. No. 3E8 i7#'e7ent! t e 'e%i!'"ti(e #o'ic$ o& t e A37ini!tr"ti(e )o3e o& 1987 . The Code is a general law and Uincorporates in a unified document the maIor structural, functional and procedural principles of go"ernanceUO67P and Uembodies changes in administrati"e structures and procedures designed to ser"e the people.UO65P The Code is di"ided into se"en ,3/ 'oo&s< 'oo& I deals with #o"ereignty and :eneral Administration, 'oo& II with the )istribution of owers of the three branches of :o"ernment, 'oo& III on the ;ffice of the resident, 'oo& I9 on the $xecuti"e 'ranch, 'oo& 9 on the Constitutional Commissions, 'oo& 9I on Dational :o"ernment 'udgeting, and 'oo& 9II on Administrati"e rocedure. These 'oo&s contain pro"isions on the organization, powers and general administration of the executi"e, legislati"e and Iudicial branches of go"ernment, the organization and administration of departments, bureaus and offices under the executi"e branch, the organization and functions of the Constitutional Commissions and other constitutional bodies, the rules on the national go"ernment budget, as well as guidelines for the exercise by administrati"e agencies of 8uasi.legislati"e and 8uasi.Iudicial powers. The Code co"ers both the internal administration of go"ernment, i.e, internal organization, personnel and recruitment, super"ision and discipline, and the effects of the functions performed by administrati"e officials on pri"ate indi"iduals or parties outside go"ernment. O63P It cannot be simplistically argued that A.;. Do. =42 merely implements the Administrati"e Code of 0123. It establishes for the first time a Dational Computerized Identification @eference #ystem. #uch a #ystem re8uires a delicate adIustment of "arious contending state policies.. the primacy of national security, the extent of pri"acy interest against dossier.gathering by go"ernment, the choice of policies, etc. Indeed, the dissent of !r. >ustice !endoza states that the A.;. Do. =42 in"ol"es the all.important freedom of thought. As said administrati"e order redefines the parameters of some basic rights of our citizenry "is.a."is the #tate as well as the line that separates the administrati"e power of the resident to ma&e rules and the legislati"e power of Congress, it ought to be e"ident that it deals with a subIect that should be co"ered by law. Dor is it correct to argue as the dissenters do that A.;. Do. =42 is not a law because it confers no right, imposes no duty, affords no protection, and creates no office. Fnder A.;. Do. =42, a citizen cannot transact business with go"ernment agencies deli"ering basic ser"ices to the people without the contemplated identification card. Do citizen will refuse to get this identification card for no one can a"oid dealing with go"ernment. It is thus clear as daylight that without the I), a citizen will ha"e difficulty exercising his rights and enIoying his pri"ileges. :i"en this reality, the contention that A.;. Do. =42 gi"es no right and imposes no duty cannot stand. Again, with due respect, the dissenting opinions unduly expand the limits of administrati"e legislation and conse8uently erodes the plenary power of Congress to ma&e laws. This is contrary to the established approach defining the traditional limits of administrati"e legislation. As well stated by *isher< Ux x x M"n$ re%8'"tion! o@e(er, be"r 3irect'$ on t e #8b'ic. *t i! ere t "t "37ini!tr"ti(e 'e%i!'"tion 78!t be re!tricte3 in it! !co#e "n3 "##'ic"tion. Re%8'"tion! "re not !8##o!e3 to be " !8b!tit8te &or t e %ener"' #o'ic$-7"Iin% t "t )on%re!! en"ct! in t e &or7 o& " #8b'ic '"@. A't o8% "37ini!tr"ti(e re%8'"tion! "re entit'e3 to re!#ect, t e "8t orit$ to #re!cribe r8'e! "n3 re%8'"tion! i! not "n in3e#en3ent !o8rce o& #o@er to 7"Ie '"@!.MJ:8K *** A!!87in%, "r%8en3o, t "t A.O. No. 3E8 nee3 not be t e !8bLect o& " '"@, !ti'' it c"nnot #"!! con!tit8tion"' 78!ter "! "n "37ini!tr"ti(e 'e%i!'"tion bec"8!e &"ci"''$ it (io'"te! t e ri% t to #ri("c$. The essence of pri"acy is the Uright to be let alone.U O61P In the 0157 case of Gri!@o'3 (. )onnectic8t,O=4P the Fnited #tates #upreme Court ga"e more substance to the right of pri"acy when it ruled that the right has a constitutional foundation. It held that there is a right of

pri"acy which can be found within the penumbras of the *irst, Third, *ourth, *ifth and Dinth Amendments, O=0P "iz< U#pecific guarantees in the 'ill of @ights ha"e penumbras formed by emanations from these guarantees that help gi"e them life and substance x x x. 9arious guarantees create zones of pri"acy. The right of association contained in the penumbra of the *irst Amendment is one, as we ha"e seen. The Third Amendment in its prohibition against the 8uartering of soldiers ]in any houseV in time of peace without the consent of the owner is another facet of that pri"acy. The *ourth Amendment explicitly affirms the ]right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.V The *ifth Amendment in its #elf.Incrimination Clause enables the citizen to create a zone of pri"acy which go"ernment may not force him to surrender to his detriment. The Dinth Amendment pro"ides< ]The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.VU In the 0152 case of Mor&e (. M8t8c,O=6P we adopted the Gri!@o'3 ruling that t ere i! " con!tit8tion"' ri% t to #ri("c$. #pea&ing thru !r. >ustice, later Chief >ustice, $nri8ue *ernando, we held< Uxxx The :riswold case in"alidated a Connecticut statute which made the use of contracepti"es a criminal offense on the ground of its amounting to an unconstitutional in"asion of the right of pri"acy of married personsA rightfully it stressed Ua relationship lying within the zone of pri"acy created by se"eral fundamental constitutional guarantees.U It has wider implications though. The constitutional right to pri"acy has come into its own. #o it is li&ewise in our Iurisdiction. The right to pri"acy as such is accorded recognition independently of its identification with libertyA in itself, it is fully deser"ing of constitutional protection. The language of rof. $merson is particularly apt< VThe concept of limited go"ernment has always included the idea that go"ernmental powers stop short of certain intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between absolute and limited go"ernment. Fltimate and per"asi"e control of the indi"idual, in all aspects of his life, is the hallmar& of the absolute state. In contrast, a system of limited go"ernment safeguards a pri"ate sector, which belongs to the indi"idual, firmly distinguishing it from the public sector, which the state can control. rotection of this pri"ate sector.. protection, in other words, of the dignity and integrity of the indi"idual..has become increasingly important as modern society has de"eloped. All the forces of a technological age ..industrialization, urbanization, and organization.. operate to narrow the area of pri"acy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this encla"e of pri"ate life mar&s the difference between a democratic and a totalitarian society.VU *n3ee3, i& @e eHten3 o8r L83ici"' %"=e @e @i'' &in3 t "t t e ri% t o& #ri("c$ i! reco%ni=e3 "n3 en! rine3 in !e(er"' #ro(i!ion! o& o8r )on!tit8tion .O==P It is expressly recognized in #ection =,0/ of the 'ill of @ights< U0ec. F. ,0/ The pri"acy of communication and correspondence shall be in"iolable except upon lawful order of the court, or when public safety or order re8uires otherwise as prescribed by law.U ;ther facets of the right to pri"acy are protected in "arious pro"isions of the 4i'' o& Ri% t!, "iz<O=-P U0ec. ,. Do person shall be depri"ed of life, liberty, or property without due process of law, nor shall any person be denied the e8ual protection of the laws.

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0ec. J. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whate"er nature and for any purpose shall be in"iolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the Iudge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized. 0ec. <. The liberty of abode and of changing the same within the limits prescribed by law shall not be impaired except upon lawful order of the court. Deither shall the right to tra"el be impaired except in the interest of national security, public safety, or public health, as may be pro"ided by law. 0ec. K. The right of the people, including those employed in the public and pri"ate sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged. 0ec. ,L. Do person shall be compelled to be a witness against himself.U ;one! o& #ri("c$ are li&ewise recognized and protected in our '"@!. The )i(i' )o3e pro"ides that UOeP"ery person shall respect the dignity, personality, pri"acy and peace of mind of his neighbors and other personsU and punishes as actionable torts se"eral acts by a person of meddling and prying into the pri"acy of another.O=7P It also holds a public officer or employee or any pri"ate indi"idual liable for damages for any "iolation of the rights and liberties of another person, O=5P and recognizes the pri"acy of letters and other pri"ate communications.O=3P The Re(i!e3 /en"' )o3e ma&es a crime the "iolation of secrets by an officer, O=2P the re"elation of trade and industrial secrets, O=1P and trespass to dwelling. O-4PIn"asion of pri"acy is an offense in !#eci"' '"@! li&e the Anti.+iretapping Law,O-0P the #ecrecy of 'an& )eposit ActO-6P and the Intellectual roperty Code.O-=P The R8'e! o& )o8rt on pri"ileged communication li&ewise recognize the pri"acy of certain information.O--P 2n'iIe t e 3i!!enter!, @e #re!cin3 &ro7 t e #re7i!e t "t t e ri% t to #ri("c$ i! " &8n3"7ent"' ri% t %8"r"ntee3 b$ t e )on!tit8tion, ence, it i! t e b8r3en o& %o(ern7ent to ! o@ t "t A.O. No. 3E8 i! L8!ti&ie3 b$ !o7e co7#e''in% !t"te intere!t "n3 t "t it i! n"rro@'$ 3r"@n . A.;. Do. =42 is predicated on two considerations< ,0/ the need to pro"ide our citizens and foreigners with the facility to con"eniently transact business with basic ser"ice and social security pro"iders and other go"ernment instrumentalities and ,6/ the need to reduce, if not totally eradicate, fraudulent transactions and misrepresentations by persons see&ing basic ser"ices. It is debatable whether these interests are compelling enough to warrant the issuance of A.;. Do. =42. 48t @ "t i! not "r%8"b'e i! t e bro"3ne!!, t e ("%8ene!!, t e o(erbre"3t o& A.O. No. 3E8 @ ic i& i7#'e7ente3 @i'' #8t o8r #eo#'eN! ri% t to #ri("c$ in c'e"r "n3 #re!ent 3"n%er. The e"rt o& A.O. No. 3E8 lies in its #ection - which pro"ides for a opulation @eference Dumber , @D/ as a Ucommon reference number to establish a lin&age among concerned agenciesU through the use of U'iometrics TechnologyU and Ucomputer application designs.U 4io7etr$ or bio7etric! is Uthe science of the application of statistical methods to biological factsA a mathematical analysis of biological data.UO-7P 0 e ter7 Mbio7etric!M "! no@ e(o'(e3 into " bro"3 c"te%or$ o& tec no'o%ie! @ ic #ro(i3e #reci!e con&ir7"tion o& "n in3i(i38"'N! i3entit$ t ro8% t e 8!e o& t e in3i(i38"'N! o@n # $!io'o%ic"' "n3 be "(ior"' c "r"cteri!tic!. JC6K A # $!io'o%ic"' c "r"cteri!tic is a relati"ely stable physical characteristic such as a fingerprint, retinal scan, hand geometry or facial features. A be "(ior"' c "r"cteri!tic is influenced by the indi"idualVs personality and includes "oice print, signature and &eystro&e. O-3P !ost biometric identification systems use a card or personal identification number , ID/ for initial identification. The biometric measurement is used to "erify that the indi"idual holding the card or entering the ID is the legitimate owner of the card or ID. O-2P

A most co77on &or7 of biological encoding is &in%er-!c"nnin% where technology scans a fingertip and turns the uni8ue pattern therein into an indi"idual number which is called a biocrypt. The biocr$#t is stored in computer data ban&sO-1P and becomes a means of identifying an indi"idual using a ser"ice. This technology re8uires oneVs fingertip to be scanned e"ery time ser"ice or access is pro"ided. O74P Another method is the retin"' !c"n. @etinal scan technology employs optical technology to map the capillary pattern of the retina of the eye. This technology produces a uni8ue print similar to a finger print. O70P Another biometric method is &nown as the M"rti&ici"' no!e.M This de"ice chemically analyzes the uni8ue combination of substances excreted from the s&in of people. O76P The latest on the list of biometric achie"ements is the t er7o%r"7. #cientists ha"e found that by ta&ing pictures of a face using infra.red cameras, a uni8ue heat distribution pattern is seen. The different densities of bone, s&in, fat and blood "essels all contribute to the indi"idualVs personal Uheat signature.UO7=P In the last few decades, technology has progressed at a galloping rate. #ome science fictions are now science facts. 0o3"$, bio7etric! i! no 'on%er 'i7ite3 to t e 8!e o& &in%er#rint to i3enti&$ "n in3i(i38"'. It is a new science that uses "arious technologies in encoding any and all biological characteristics of an indi"idual for identification. *t i! note@ort $ t "t A.O. No. 3E8 3oe! not !t"te @ "t !#eci&ic bio'o%ic"' c "r"cteri!tic! "n3 @ "t #"rtic8'"r bio7etric! tec no'o%$ ! "'' be 8!e3 to i3enti&$ #eo#'e @ o @i'' !eeI it! co(er"%e. )on!i3erin% t e b"nO8et o& o#tion! "("i'"b'e to t e i7#'e7entor! o& A.O. No. 3E8, t e &e"r t "t it t re"ten! t e ri% t to #ri("c$ o& o8r #eo#'e i! not %ro8n3'e!! . A.O. No. 3E8 ! o8'3 "'!o r"i!e o8r "ntenn"! &or " &8rt er 'ooI @i'' ! o@ t "t it 3oe! not !t"te @ et er enco3in% o& 3"t" i! 'i7ite3 to bio'o%ic"' in&or7"tion "'one &or i3enti&ic"tion #8r#o!e! . In fact, the #olicitor :eneral claims that the adoption of the Identification @eference #ystem will contribute to the Ugeneration of population data for de"elopment planning.U O7-P This is an admission that the @D will not be used solely for identification but for the generation of other data with remote relation to the a"owed purposes of A.;. Do. =42. )'e"r'$, t e in3e&initene!! o& A.O. No. 3E8 c"n %i(e t e %o(ern7ent t e ro(in% "8t orit$ to !tore "n3 retrie(e in&or7"tion &or " #8r#o!e ot er t "n t e i3enti&ic"tion o& t e in3i(i38"' t ro8% i! /RN. 0 e #otenti"' &or 7i!8!e o& t e 3"t" to be %"t ere3 8n3er A.O. No. 3E8 c"nnot be 8n3er#'"$e3 "! t e 3i!!enter! 3o. ursuant to said administrati"e order, an indi"idual must present his @D e"erytime he deals with a go"ernment agency to a"ail of basic ser"ices and security. %is transactions with the go"ernment agency will necessarily be recorded.. whether it be in the computer or in the documentary file of the agency. The indi"idualVs file may include his transactions for loan a"ailments, income tax returns, statement of assets and liabilities, reimbursements for medication, hospitalization, etc. 0 e 7ore &reO8ent t e 8!e o& t e /RN, t e better t e c "nce o& b8i'3in% " 8%e "n3 &or7i3"b'e in&or7"tion b"!e t ro8% t e e'ectronic 'inI"%e o& t e &i'e!.J55K 0 e 3"t" 7"$ be %"t ere3 &or %"in&8' "n3 8!e&8' %o(ern7ent #8r#o!e!A b8t t e eHi!tence o& t i! ("!t re!er(oir o& #er!on"' in&or7"tion con!tit8te! " co(ert in(it"tion to 7i!8!e, " te7#t"tion t "t 7"$ be too %re"t &or !o7e o& o8r "8t oritie! to re!i!t .O75P +e can e"en grant, arguendo, that the computer data file will be limited to the name, address and other basic personal information about the indi"idual. O73P $"en that hospitable assumption will not sa"e A.;. Do. =42 from constitutional infirmity &or "%"in !"i3 or3er 3oe! not te'' 8! in c'e"r "n3 c"te%oric"' ter7! o@ t e!e in&or7"tion %"t ere3 ! "'' be "n3'e3. *t 3oe! not #ro(i3e @ o ! "'' contro' "n3 "cce!! t e 3"t", 8n3er @ "t circ87!t"nce! "n3 &or @ "t #8r#o!e . These factors are essential to safeguard the pri"acy and guaranty the integrity of the information.O72P +ell to note, the computer lin&age gi"es other go"ernment agencies access to the information. Yet, t ere "re no contro'! to %8"r3 "%"in!t 'e"I"%e o& in&or7"tion. +hen the access code of the control programs of the particular computer system is bro&en, an intruder, without fear of sanction or penalty, can ma&e use of the data for whate"er purpose, or worse, manipulate the data stored within the system.O71P It is plain and we hold that A.;. Do. =42 falls short of assuring that personal information which will be gathered about our people will only be processed for 8neO8i(oc"''$ !#eci&ie3 #8r#o!e!.O54P The lac& of

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proper safeguards in this regard of A.;. Do. =42 may interfere with the indi"idualVs liberty of abode and tra"el by enabling authorities to trac& down his mo"ementA it may also enable unscrupulous persons to access confidential information and circum"ent the right against self.incriminationA it may pa"e the way for Ufishing expeditionsU by go"ernment authorities and e"ade the right against unreasonable searches and seizures. O50P 0 e #o!!ibi'itie! o& "b8!e "n3 7i!8!e o& t e /RN, bio7etric! "n3 co7#8ter tec no'o%$ "re "ccent8"te3 @ en @e con!i3er t "t t e in3i(i38"' '"cI! contro' o(er @ "t c"n be re"3 or #'"ce3 on i! *D, 78c 'e!! (eri&$ t e correctne!! o& t e 3"t" enco3e3. J6:K 0 e$ t re"ten t e (er$ "b8!e! t "t t e 4i'' o& Ri% t! !eeI! to #re(ent.O5=P The ability of a sophisticated data center to generate a comprehensi"e cr"3'e-to-%r"(e 3o!!ier on an indi"idual and transmit it o"er a national networ& is one of the most graphic threats of the computer re"olution.O5-P The computer is capable of producing a comprehensi"e dossier on indi"iduals out of information gi"en at different times and for "aried purposes. O57P It can continue adding to the stored data and &eeping the information up to date. @etrie"al of stored data is simple. +hen information of a pri"ileged character finds its way into the computer, it can be extracted together with other data on the subIect. O55P ;nce extracted, the information is putty in the hands of any person. The end of pri"acy begins. Though A.;. Do. =42 is undoubtedly not narrowly drawn, the dissenting opinions would dismiss its danger to the right to pri"acy as speculati"e and hypothetical. Again, we cannot countenance such a laidbac& posture. The Court will not be true to its role as the ultimate guardian of the peopleVs liberty if it would not immediately smother the spar&s that endanger their rights but would rather wait for the fire that could consume them. Be reLect t e "r%87ent o& t e +o'icitor Gener"' t "t "n in3i(i38"' "! " re"!on"b'e eH#ect"tion o& #ri("c$ @it re%"r3 to t e N"tion"' *D "n3 t e 8!e o& bio7etric! tec no'o%$ "! it !t"n3! on O8icI!"n3. The reasonableness of a personVs expectation of pri"acy depends on a two.part test< ,0/ whether by his conduct, the indi"idual has exhibited an expectation of pri"acyA and ,6/ whether this expectation is one that society recognizes as reasonable.O53P The factual circumstances of the case determines the reasonableness of the expectation.O52P%owe"er, other factors, such as customs, physical surroundings and practices of a particular acti"ity, may ser"e to create or diminish this expectation. O51P The use of biometrics and computer technology in A.;. Do. =42 does not assure the indi"idual of a reasonable expectation of pri"acy.O34P As technology ad"ances, the le"el of reasonably expected pri"acy decreases. O30P The measure of protection granted by the reasonable expectation diminishes as rele"ant technology becomes more widely accepted.O36P The security of the computer data file depends not only on the physical inaccessibility of the file but also on the ad"ances in hardware and software computer technology. A.O. No. 3E8 i! !o @i3e'$ 3r"@n t "t " 7ini787 !t"n3"r3 &or " re"!on"b'e eH#ect"tion o& #ri("c$, re%"r3'e!! o& tec no'o%$ 8!e3, c"nnot be in&erre3 &ro7 it! #ro(i!ion!. 0 e r8'e! "n3 re%8'"tion! to be 3r"@n b$ t e *A)) c"nnot re7e3$ t i! &"t"' 3e&ect . @ules and regulations merely implement the policy of the law or order. ;n its face, A.;. Do. =42 gi"es the IACC "irtually unfettered discretion to determine the metes and bounds of the I) #ystem. Nor 3o o8r #re!ent '"@! #ro(i3e "3eO8"te !"&e%8"r3! &or " re"!on"b'e eH#ect"tion o& #ri("c$. Commonwealth Act Do. 710 penalizes the disclosure by any person of data furnished by the indi"idual to the D#; with imprisonment and fine.O3=P @epublic Act Do. 0050 prohibits public disclosure of ### employment records and reports.O3-P These laws, howe"er, apply to records and data with the D#; and the ###. It is not clear whether they may be applied to data with the other go"ernment agencies forming part of the Dational I) #ystem. The need to clarify the penal aspect of A.;. Do. =42 is another reason why its enactment should be gi"en to Congress. Dext, the #olicitor :eneral urges us to "alidate A.;. Do. =42Vs abridgment of the right of pri"acy by using the r"tion"' re'"tion! i# te!t.O37P%e stressed that the purposes of A.;. Do. =42 are< ,0/ to streamline and speed up the implementation of basic go"ernment ser"ices, ,6/ eradicate fraud by

a"oiding duplication of ser"ices, and ,=/ generate population data for de"elopment planning. %e concludes that these purposes Iustify the incursions into the right to pri"acy for the means are rationally related to the end.O35P +e are not impressed by the argument. In Mor&e (. M8t8c,O33P we upheld the constitutionality of @.A. =401, the Anti.:raft and Corrupt ractices Act, as a "alid police power measure. +e declared that the law, in compelling a public officer to ma&e an annual report disclosing his assets and liabilities, his sources of income and expenses, did not infringe on the indi"idualVs right to pri"acy. The law was enacted to promote morality in public administration by curtailing and minimizing the opportunities for official corruption and maintaining a standard of honesty in the public ser"ice.O32P The same circumstances do not obtain in the case at bar. *or one, @.A. =401 is a statute, not an administrati"e order. #econdly, @.A. =401 itself is sufficiently detailed. The law is clear on what practices were prohibited and penalized, and it was narrowly drawn to a"oid abuses. In the case at bar, A.;. Do. =42 may ha"e been impelled by a worthy purpose, but, it cannot pass constitutional scrutiny for it is not narrowly drawn. An3 @e no@ o'3 t "t @ en t e inte%rit$ o& " &8n3"7ent"' ri% t i! "t !t"Ie, t i! co8rt @i'' %i(e t e c "''en%e3 '"@, "37ini!tr"ti(e or3er, r8'e or re%8'"tion " !tricter !cr8tin$. *t @i'' not 3o &or t e "8t oritie! to in(oIe t e #re!87#tion o& re%8'"rit$ in t e #er&or7"nce o& o&&ici"' 38tie!. Nor i! it eno8% &or t e "8t oritie! to #ro(e t "t t eir "ct i! not irr"tion"' &or " b"!ic ri% t c"n be 3i7ini! e3, i& not 3e&e"te3, e(en @ en t e %o(ern7ent 3oe! not "ct irr"tion"''$. 0 e$ 78!t !"ti!&"ctori'$ ! o@ t e #re!ence o& co7#e''in% !t"te intere!t! "n3 t "t t e '"@, r8'e, or re%8'"tion i! n"rro@'$ 3r"@n to #rec'83e "b8!e! . This approach is demanded by the 0123 Constitution whose entire matrix is designed to protect human rights and to pre"ent authoritarianism. In case of doubt, the least we can do is to lean towards the stance that will not put in danger the rights protected by the Constitution. The case of B "'en (. RoeO31P cited by the #olicitor :eneral is also off.line. In B "'en, the Fnited #tates #upreme Court was presented with the 8uestion of whether the #tate of Dew Cor& could &eep a centralized computer record of the names and addresses of all persons who obtained certain drugs pursuant to a doctorVs prescription. The Dew Cor& #tate Controlled #ubstances Act of 0136 re8uired physicians to identify patients obtaining prescription drugs enumerated in the statute, i.e., drugs with a recognized medical use but with a potential for abuse, so that the names and addresses of the patients can be recorded in a centralized computer file of the #tate )epartment of %ealth. The plaintiffs, who were patients and doctors, claimed that some people might decline necessary medication because of their fear that the computerized data may be readily a"ailable and open to public disclosureA and that once disclosed, it may stigmatize them as drug addicts.O24P The plaintiffs alleged that the statute in"aded a constitutionally protected zone of pri"acy, i.e, the indi"idual interest in a"oiding disclosure of personal matters, and the interest in independence in ma&ing certain &inds of important decisions. The F.#. #upreme Court held that while an indi"idualVs interest in a"oiding disclosure of personal matters is an aspect of the right to pri"acy, the statute did not pose a grie"ous threat to establish a constitutional "iolation. The Court found that the statute was necessary to aid in the enforcement of laws designed to minimize the misuse of dangerous drugs. 0 e #"tient-i3enti&ic"tion reO8ire7ent @"! " #ro38ct o& "n or3er'$ "n3 r"tion"' 'e%i!'"ti(e 3eci!ion 7"3e 8#on reco77en3"tion b$ " !#eci"''$ "##ointe3 co77i!!ion @ ic e'3 eHten!i(e e"rin%! on t e 7"tter. Moreo(er, t e !t"t8te @"! n"rro@'$ 3r"@n "n3 cont"ine3 n87ero8! !"&e%8"r3! "%"in!t in3i!cri7in"te 3i!c'o!8re. The statute laid down the procedure and re8uirements for the gathering, storage and retrie"al of the information. It enumerated who were authorized to access the data. It also prohibited public disclosure of the data by imposing penalties for its "iolation. In "iew of these safeguards, the infringement of the patientsV right to pri"acy was Iustified by a "alid exercise of police power. As we discussed abo"e, A.;. Do. =42 lac&s these "ital safeguards. Page82 E(en @ i'e @e !triIe 3o@n A.O. No. 3E8, @e !#e'' o8t in neon t "t t e )o8rt i! not #er !e "%"in!t t e 8!e o& co7#8ter! to "cc878'"te, !tore, #roce!!, retrie(e "n3 tr"n!7it 3"t" to i7#ro(e o8r b8re"8cr"c$. Computers wor& wonders to achie"e the efficiency which both go"ernment and pri"ate

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industry see&. !any information systems in different countries ma&e use of the computer to facilitate important social obIecti"es, such as better law enforcement, faster deli"ery of public ser"ices, more efficient management of credit and insurance programs, impro"ement of telecommunications and streamlining of financial acti"ities.O20P Fsed wisely, data stored in the computer could help good administration by ma&ing accurate and comprehensi"e information for those who ha"e to frame policy and ma&e &ey decisions. O26P The benefits of the computer has re"olutionized information technology. It de"eloped the internet, O2=P introduced the concept of cyberspaceO2-P and the information superhighway where the indi"idual, armed only with his personal computer, may surf and search all &inds and classes of information from libraries and databases connected to the net. *n no 8ncert"in ter7!, @e "'!o 8n3er!core t "t t e ri% t to #ri("c$ 3oe! not b"r "'' inc8r!ion! into in3i(i38"' #ri("c$. 0 e ri% t i! not inten3e3 to !ti&'e !cienti&ic "n3 tec no'o%ic"' "3("nce7ent! t "t en "nce #8b'ic !er(ice "n3 t e co77on %oo3. It merely re8uires that the law be narrowly focusedO27P and a compelling interest Iustify such intrusions.O25P Intrusions into the right must be accompanied by proper safeguards and well.defined standards to pre"ent unconstitutional in"asions. +e reiterate that any law or order that in"ades indi"idual pri"acy will be subIected by this Court to strict scrutiny. The reason for this stance was laid down in Mor&e (. M8t8c, to wit< UThe concept of limited go"ernment has always included the idea that go"ernmental powers stop short of certain intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between absolute and limited go"ernment. Fltimate and per"asi"e control of the indi"idual, in all aspects of his life, is the hallmar& of the absolute state. In contrast, a system of limited go"ernment safeguards a pri"ate sector, which belongs to the indi"idual, firmly distinguishing it from the public sector, which the state can control. rotection of this pri"ate sector.. protection, in other words, of the dignity and integrity of the indi"idual.. has become increasingly important as modern society has de"eloped. All the forces of a technological age.. industrialization, urbanization, and organization.. operate to narrow the area of pri"acy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this encla"e of pri"ate life mar&s the difference between a democratic and a totalitarian society.UO23P *V 0 e ri% t to #ri("c$ i! one o& t e 7o!t t re"tene3 ri% t! o& 7"n 'i(in% in " 7"!! !ociet$ . The threats emanate from "arious sources.. go"ernments, Iournalists, employers, social scientists, etc. O22P In the case at bar, the threat comes from the executi"e branch of go"ernment which by issuing A.;. Do. =42 pressures the people to surrender their pri"acy by gi"ing information about themsel"es on the pretext that it will facilitate deli"ery of basic ser"ices. Gi(en t e recor3-Iee#in% #o@er o& t e co7#8ter, on'$ t e in3i&&erent @i'' &"i' to #ercei(e t e 3"n%er t "t A.O. No. 3E8 %i(e! t e %o(ern7ent t e #o@er to co7#i'e " 3e("!t"tin% 3o!!ier "%"in!t 8n!8!#ectin% citi=en!. It is timely to ta&e note of the well.worded warning of Lal"in, >r., Uthe disturbing result could be that e"eryone will li"e burdened by an unerasable record of his past and his limitations. In a way, the threat is that because of its record.&eeping, the society will ha"e lost its benign capacity to forget.U O21P ;bli"ious to this counsel, the dissents still say we should not be too 8uic& in labelling the right to pri"acy as a fundamental right. +e close with the statement that the right to pri"acy was not engra"ed in our Constitution for flattery. *N V*EB B.EREOF, the petition is granted and Administrati"e ;rder Do. =42 entitled UAdoption of a Dational Computerized Identification @eference #ystemU declared null and "oid for being unconstitutional. +O ORDERED. G.R. No. L-C5551 Febr8"r$ 16, 198: 9O+E +. ANGELE+ "n3 G*L4ER0O G. MER)ADO, in i! c"#"cit$ "! De"n o& *n!tit8te o& 0ec no'o%$, FE2,petitioners, "s. .ON. RAFAEL +. +*+ON, "! 983%e o& t e )o8rt o& Fir!t *n!t"nce o& M"ni'",

EDGARDO /*)AR "n3 B*LFREDO /A0ABARAN, re#re!ente3 b$ i! &"t er BEN)E+LAO /A0ABARAN, respondents. FERNANDE;, J.: This is a petition for certiorari to re"iew the decision of the Court of *irst Instance of !anila, 'ranch GG9II, dated )ecember 61, 0135 in Ci"il Case Do. 040666 entitled, U$dgardo icar and +ilfredo atawaran, represented by his father, +enceslao atawaran, laintiffs, "ersus >ose #. Angeles, )ean :ilberto :. !ercado in his capacity as )ean of the Institute of Technology, )efendants,U the dispositi"e part of which reads< +%$@$*;@$, the petition prayed for by the plaintiffs is hereby :@ADT$), and the defendants are hereby perpetually enIoined from further proceeding with the administrati"e in"estigation against the plaintiffs. #o ordered. 1 The records disclose that sometime in Do"ember 0137 the petitioner, >ose Angeles, initiated an administrati"e case before the ;ffice of the )ean, :ilberto :. !ercado, of the Institute of Technology, *ar $astern Fni"ersity, by filing a complaint : against the pri"ate respondents $dgardo icar and +ilfredo atawaran for alleged breach of the uni"ersityVs rules and regulations. In the said complaint, it is alleged that on ;ctober 64, 0137, >ose Angeles, a professor in the Institute of Technology of *ar $astern Fni"ersity ,*$F/, was assaulted by $dgardo icar and +ilfredo atawaran, both students in mechanical engineering in the said institute at the ;a& 'arrel @estaurant located at . :omez #treet, Buiapo, !anila on the occasion of the birthday party of rofessor Alfonso 'ernabe, the #ecretary of the Institute of Technology of *$F. The same incident became also the subIect of a criminal complaint for assault against a person in authority instituted by the petitioner >ose Angeles in the ;ffice of the City *iscal of !anila against the pri"ate respondents icar and atawaran. Later, the complaint was ammended to assault andQor physical inIuries. The case was dismissed as against pri"ate respondent +ilfredo atawaran but an information for slight physical inIuries was filed against pri"ate respondent $dgardo icar in the City Court of !anila. 3 %owe"er, during the pendency of this case, on >uly 2, 0133, the criminal case for slight physical inIuries against $dgardo icar was dismissed on the basis of an affida"it of desistance C submitted by petitioner >ose Angeles before the City Court of !anila, 'ranch 9III, stating among others, that the subIect incident was only Ua result of a misunderstanding and nobody is to be blamed.U Acting on the administrati"e complaint filed before his ;ffice by the petitioner >ose Angeles, the )ean of the Institute, petitioner :ilberto !ercado, immediately created a committee headed by him to in"estigate the complaint. The pri"ate respondents icar and atawaran 8uestioned the authority of the )ean and his committee to conduct the administrati"e in"estigation because the act complained of the alleged assault of rofessor Angeles at the ;a& 'arrel @estaurant is not within his authority to in"estigate. They contend that the )eanVs authority to in"estigate under the Code of Conduct of *$F ,as amended/ from where he deri"es that power, is limited to acts done or committed within the premises of the compound of the Fni"ersity. The )ean proceeded to conduct the challenged administrati"e in"estigation. Thus the pri"ate respondents, icar and atawaran, the latter being then a minor, was represented by his father, +enceslao atawaran, filed on *ebruary 0=, 0135 in the Court of *irst Instance of !anila a complaint 5 with petition for issuance of a writ of preliminary inIunction to restrain the petitioners from proceeding with the administrati"e in"estigation against the pri"ate respondents.

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*orthwith, the respondent Iudge issued on the same day, *ebruary 0=, 0135, an ;rder 6 temporarily restraining the petitioners from further proceeding with the administrati"e in"estigation against the pri"ate respondents, and setting the motion for the issuance of the writ of preliminary inIunction for hearing. ;n !arch 04, 0135, the petitioners filed their answer to the complaint and an opposition to the petition for inIunction. 7 ;"er the opposition of the petitioners, the respondent >udge issued an ;rder on >une 3, 0135 granting the writ of preliminary inIunction and enIoining the petitioners from proceeding with the administrati"e in"estigation of pri"ate respondents until further orders from the Court. ;n >uly 0=, 0135, the petitioners mo"ed for a reconsideration of the order of the respondent Iudge and to lift the order granting plaintiffsV petition for preliminary inIunction. 9 The pri"ate respondents opposed the said motion for reconsideration on August 04, 0135. 1E ;n ;ctober 00, 0135, the respondent >udge issued an order denying the petitionersV motion for reconsideration.11 Conse8uently, the petitioners filed on Do"ember 03, 0135, a motion for summary Iudgment stating, among others, that Usince the issue before this Court is one of law and not of fact, and therefore, there exists no genuine contro"ersy as to any material fact, summary Iudgment will lie to effectuate the prompt disposition of this case.U 1: *inding no obIection to the rendition of a summary Iudgment, the pri"ate respondents filed to that effect a manifestation 13 on )ecember 2, 0135. ;n )ecember 61, 0135, the respondent Iudge rendered the decision under re"iew, perpetually enIoining the petitioners from further proceeding with the administrati"e in"estigation against the pri"ate respondents. *rom this decision, the petitioners interposed an appeal to this Court, assigning the following as errors< I. T%$ @$# ;D)$DT >F):$ $@@$) ID *ID)ID: T%AT *A@ $A#T$@D FDI9$@#ITC ,U*$FU, *;@ '@$9ITC/, T%@;F:% $TITI;D$@ :IL'$@T; :. !$@CA); +%; I# T%$ )$AD ;* T%$ ID#TITFT$ ;* T$C%D;L;:C, I# D;T AFT%;@IE$) T; ID9$#TI:AT$ AD) )I#CI LID$ T%$ @I9AT$ @$# ;D)$DT#, +%; A@$ #TF)$DT# ;* #AI) FDI9$@#ITC, *;@ T%$I@ C;D)FCT ;FT#I)$ ;* #C%;;L %;F@# AD) D;T +IT%ID T%$ #C%;;L @$!I#$# +%IC% )I@$CTLC A**$CT# T%$ :;;) ;@)$@ AD) +$L*A@$ ;* T%$ #C%;;L. T%$ @$# ;D)$DT >F):$ $@@$) ID *ID)ID: T%AT T%$ #$@9IC$ !ADFAL *;@ F'LIC #C%;;L# A LI$# T;, AD) ;9$@@I)$# T%$ @FL$# AD) @$:FLATI;D# ;* *$F A @I9AT$ #C%;;L, F ;D T%$ :@;FD) T%AT T%$@$ I# D; )I**$@$DC$ '$T+$$D A @I9AT$ #C%;;L AD) A F'LIC #C%;;L. T%$ @$# ;D)$DT >F):$ $@@$) ID *ID)ID: T%AT T%$ C;D)FCT ;* T%$ @I9AT$ @$# ;D)$DT# ID !AFLID: $TITI;D$@ >;#$ #. AD:$L$#, A *ACFLTC !$!'$@ ;* *$F, ;FT#I)$ T%$ @$!I#$# ;* T%$ #C%;;L I# D;T @$#C@I'$) 'C T%$ @FL$# AD) @$:FLATI;D# C;DTAID$) ID T%$ #$@9IC$ !ADFAL *;@ PHB%/C #C%;;L# .
8

IV.

T%$ @$# ;D)$DT >F):$ $@@$) ID *ID)ID: T%AT *$F, T%@;F:% $TITI;D$@ :IL'$@T; :. !$@CA);, I# L$:ALLC ID%I'IT$) *@;! ID9$#TI:ATID: @I9AT$ @$# ;D)$DT# *;@ C;D)FCT @$#C@I'$) 'C IT# @FL$# AD) @$:FLATI;D# '$CAF#$ ;* T%$ $D)$DCC ;* C@I!IDAL C%A@:$# A:AID#T #AI) @$# ;D)$DT#. 1C

The main legal issue presented in this petition is whether a school through its duly authorized representati"e has the Iurisdiction to in"estigate its student or students for an alleged misconduct committed outside the school premises and beyond school hours. The petitioners contend that the mauling incident, subIect matter of this case, was sought to be in"estigated under and pursuant to the following rules and regulations of the !anual of @egistration for ri"ate #chools. 15 ,0/ Para'raph l=9, 0ection /MN $"ery pri"ate school is re8uired to maintain good school discipline. Do cruel or physically harmful punishment shall be imposed nor shall corporal punishment be countenanced. The school rules go"erning discipline and the corresponding sanctions therefor must be clearly specified and defined in writing and made &nown to the students andQor their parents or guardians. #chools shall ha"e the authority and prerogati"e to promulgate such rules and regulations as they may deem necessary from time to time effecti"e as of the promulgation unless otherwise specified. Do penalty shall be imposed upon any student, except for cause as defined in this !anual andQor in the schoolVs rules and regulations duly promulgated and only after due in"estigation shall ha"e been conducted. ,6/ Para'raph l=<, 0ection /MN The three categories of disciplinary administrati"e sanctions which may be imposed upon erring students, commensurate with the nature and gra"ity of the "iolation of school rules and regulations committed, are< a. Droppin' a school may drop from its rolls during the school year or term a student who is considered undesirable. The student who is dropped should be issued immediately his transfer credentials. b. 0uspension a school may suspend an erring student during the school year or term for a maximum period not exceeding 64R of the prescribed school days. #uspension which will in"ol"e the loss of the entire year or term shall not be effecti"e unless appro"ed by the )irector of ri"ate #chools. c. !xpulsion the penalty of expulsion is an extreme form of administrati"e sanction which debars the student from all public and pri"ate schools. To be "alid and effecti"e the penalty of expulsion re8uires the appro"al of the #ecretary of $ducation. $xpulsion is usually considered proper punishment for gross misconduct or dishonesty andQor such offenses as hazing, carrying deadly weapons, immorality, drun&enness,

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II.

III.

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"andalism, hooliganism, assaulting a teacher or any other school authority, or his agent or student, instigating, leading or participating in concerted acti"ities leading to a stoppage of classes, pre"enting or threatening students or faculty members or school authorities from discharging their duties, or from attending classes or entering the school premises, forging or tampering ,with/ school records or transfer forms, or securing or using such forged transfer credentials. In accordance with the abo"e.8uoted pro"ision, the Ad"isory Council of *$F appro"ed on )ecember 6, 0130, the Code of Conduct 16 for all students to obser"e. The pertinent articles pro"ide< Article 0 :eneral Behavior #ection 6. #tudents shall not use language or commit acts which are disrespectful, "ulgar, or indecent, or which in any manner may cause or tend to cause molestation or inIury to other members of the uni"ersity community. xxx xxx xxx Article 9 Penalties #ection 0. 9iolation of any of the pro"isions of this Code of Conduct shall be punished, after due in"estigation by reprimand, dropping, suspension or expulsion in accordance with the &anual of Re'ulation for Private 0chools ta&ing into account the following factors< a/ pre"ious record of the studentA b/ inherent gra"ity of the offense committedA c/ position of the aggrie"ed person d/ established precedentsA and e/ other related circumstances, such as the pertinent and applicable mitigating and aggra"ating circumstances found in the @e"ised enal Code. #ection 6. In cases not co"ered by this Code, the categories of disciplinary administrati"e sanctions contained in the !anual of @egulations for ri"ate #chools shall apply upon the ground pro"ided in said !anual. xxx xxx xxx Article 9I !nforcement #ection 0. The )eans and rincipals shall enforce the pro"ision of this Code of Conduct. There shall be created in each Institute and #chool a committee on )iscipline, !anners and !orals, composed of two faculty members and one student, all

appointed by the )ean or rincipal, as the case may be, to in"estigate cases of "iolations of this Code of Conduct referred to it by the corresponding )ean or rincipal. #ection -. In cases in"ol"ing a student and a faculty member, the )ean or the rincipal concerned shall conduct the hearing. +here the case in"ol"es a student and an administrati"e personnel, the resident may appoint a Committee to in"estigate the same which shall submit its findings and recommendations to the resident for decision. Thus, the petitioner !ercado contends that in his capacity as )ean of the Institute of Technology, he is charged under #ections 0 and - of Article 9I of the Code of Conduct of *$F with the duty of conducting a hearing in cases in"ol"ing a student and a faculty member in furtherance of the uni"ersityVs legally recognized right to discipline its students. ;n the other hand, the pri"ate respondents submit that to apply the abo"e.8uoted rules to the instant case would be Ucapricious, malicious, palpably unreasonable, arbitrary or a clear abuse of discretionU 17 and that Uany in"estigation by the school of the said incident will be "iolati"e of the pri"ate respondentsV right to pri"acy and peace of mind.U 18 The respondent Iudge opined that the instant case falls under the general rule that the power of the school ends at the border of its campus. 19 %is basis is #ection 1, paragraph 0-7 of the !anual of @egulations for ri"ate #chools the opening paragraph of which states< U$"ery pri"ate school is re8uired to maintain good school discipline.U %e explains thus< +hat other interpretation could be placed on the phrase Uschool disciplineU except that it is a norm of action that must be obser"ed within a school. If the rules and regulations pro"ided by school authorities shall be deemed to extend outside of school premises and acti"ities, the term Uschool disciplineU would be a misnomer. +e must consider the fact that *$F as an institution can exercise only such powers expressly conferred, so that any authority not so gi"en shall be deemed to be withheld. In the absence of an express pro"ision on this matter, this Court could not see any reason why paragraph 077 of the #er"ice !anual relati"e to public schools should not be applied by way of analogy considering that there is actually no difference between a pri"ate and a public school. The obIecti"e for the promulgation of rules and regulations with respect to both institutions are one and the same. #ection 077, among others, states< #chool authorities are not, under ordinary circumstances, warranted in applying school punishment of pupils for acts committed outside of the Iurisdiction of the school building and grounds ... As a rule ... the authority and responsibility of the school stop at the border of the school grounds, and any action ta&en for acts committed without these boundaries should in general be left to the olice authorities, the courts of Iustice and the family concerned. ;f course, there are certain exceptions as correctly pointed out by the defendants, which are also pro"ided in the same #ection 077, but then, considering that defendants mo"ed for a summary Iudgment without presenting any e"idence to pro"e

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that the case of the plaintiffs fall under any of the afore8uoted exceptions, the Court has no other alternati"e except to apply the general rule. :E Implicit in aragraph 077 of the #er"ice !anual, *ourth @e"ision 8uoted by the respondent Iudge and reproduced as follows< A pupil who has committed an immoral act outside of the school Iurisdiction would be a source of danger to other pupils in the school building, and such pupil might with reason be excluded from the school. There are certain borderline cases, howe"er, which are hard to decide, and for which no definite rules can be laid down. #hould pupils in a concerted effort attempt to run a teacher out of town or try to ma&e life outside of school unbearable for him, such action might well be ta&en as ha"ing a direct and "ital effect on the school and therefore as coming under school discipline. upils engaged in school matters elsewhere than on the school grounds, such as school athletic affairs and trips, parades, literary contests, etc., are considered under the Iurisdiction of the school. is the recognition of the schoolVs authority and power to expel a pupil who has committed an immoral act outside of the school premises since the latter would be a Usource of danger to other pupils in the school building.U If the power to expel or to punish an immoral act committed outside the school premises is recognized in this pro"ision, why is the power to in"estigate the act of a student in mauling a faculty member outside the school premises not be accorded the same recognitionM It is thus error for respondent Iudge to state that there is nothing in the authorities relied upon by the defendants, petitioners herein, which compels any school authority to administrati"ely discipline students for incidents committed outside the school compound on an occasion which is not school.sponsored or connected with any acti"ity of the school. A college or any school for that matter, has a dual responsibility to its students. ;ne is to pro"ide opportunities for learning and the other is to help them grow and de"elop into mature, responsible, effecti"e and worthy citizens of the community. )iscipline is one of the means to carry out the second responsibility. Thus, there can be no doubt that the establishment of an educational institution re8uires rules and regulations necessary for the maintenance of an orderly educational program and the creation of an educational en"ironment conduci"e to learning. #uch rules and regulations are e8ually necessary for the protection of the students, faculty, and property. The power of school officials to in"estigate, an adIunct of its power to suspend or expel, is a necessary corollary to the enforcement of such rules and regulations and the maintenance of a safe and orderly educational en"ironment conduci"e to learning. The respondent Iudge correctly stated that the general rule is that the authority of the school is co.extensi"e with its territorial Iurisdiction, or its school grounds, so that any action ta&en for acts committed outside the school premises should, in general, be left to the police authorities, the courts of Iustice, and the family concerned. :1

%owe"er, this rule is not rigid or one without exceptions. It is the better "iew that there are instances when the school might be called upon to exercise its power o"er its student or students for acts committed outside the school and beyond school hours in the following< a/ In cases of "iolations of school policies or regulations occurring in connection with a school sponsored acti"ity off.campusA or ::

Page b/ In cases where the misconduct of the student in"ol"es his status as a student or affects the good name or | 65
reputation of the school. Common sense dictates that the school retains its power to compel its students in or off.campus to a norm of conduct compatible with their standing as members of the academic community. %ence, when as in the case at bar, the conduct complained of directly affects the suitability of the alleged "iolators as students, there is no reason why the school can not impose the same disciplinary action as when the act too& place inside the campus. There is a showing from the records of this case that the proximate cause of the alleged mauling incident, subIect of the administrati"e in"estigation in 8uestion, is attributable to the professor.student relationship of the parties concerned. The sworn statement :3 of the petitioner >ose Angeles submitted to the petitioner )ean :ilberto !ercado, as %ead of the In"estigating Committee states, inter aliaN -. That sometime after the end of this first semester mentioned earlier, $duardo icar under the influence of li8uor accosted me along the corridor of the Institute building and as&ed for an explanation why !r. :arcia ga"e him a failing grade in #hop =46. I told him I had no Idea. 7. That from this time on, said icar stopped being cordial to me and sometimes would loo& daggers at me whene"er we meet on the campus. 5. That also sometime last >uly 0137, +ilfredo atawaran accosted me along the corridors of the Technology building and as&ed me to enroll him in my class. 'ut I told him that I had already enough students for one section. 3. That from this time on, this atawaran a"oided me and together with icar they would show their contempt of me, by facial expressions, whene"er we met on the corridors of the Technology building or in the campus. These statements clearly establish the necessity for an Administrati"e in"estigation of the alleged mauling incident because it cannot be denied that the same is a "iolation of the norms of decency and good taste which is antithetical to one of the schoolVs duties "is.a."is the family, that of de"eloping the moral character of the youth. :C !oreo"er, from the facts of record, the alleged mauling of petitioner >ose Angeles at the ;a& 'arrel @estaurant in Buiapo, !anila can be regarded as a continuation or the climax of the alleged display of

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animosities by pri"ate respondents icar and atawaran towards Angeles which began at the corridors of the *$F Institute of Technology building. recisely, the administrati"e in"estigation in 8uestion is proper in order that the duly authorized school officials can determine whether the continued presence of pri"ate respondents, icar and atawaran, as students of *$F andQor petitioner, >ose Angeles, as faculty member, within the uni"ersity premises is detrimental to the maintenance of a moral climate conduci"e to learning. *urthermore, the true test of a schoolVs right to in"estigate, or otherwise, suspend or expel a student for a misconduct committed outside the school premises and beyond school hours is not the time or place of the offense, but its effect upon the morale and efficiency of the school and whether it, in fact, is ad"erse to the schoolVs good order welfare and the ad"ancement of its students. Li&ewise the power of the school o"er its students does not cease absolutely when they lea"e the school premises, and that conduct outside of school hours may subIect a student to school discipline if it directly affects the good order and welfare of the school or has a direct and immediate effect on the discipline or general welfare of the school. The pri"ate respondentVs a"erment that the dismissal of the criminal case against pri"ate respondent icar upon the filing of the affida"it of desistance of petitioner >ose Angeles has the effect of rendering this instant petition moot and academic :5 is unmeritorious. The pendency or the dismissal of the criminal action does not abate the administrati"e proceeding which in"ol"es the same cause of action. :6 The administrati"e action before the school authorities can proceed independently of the criminal action because these two actions are based on different considerations. In the former, the pri"ate respondentVs suitability or propriety as a student which is the paramount concern and interest of the school is in"ol"ed, while in the latter, what is at sta&e is his being a citizen who is subIect to the penal statutes and is the primary concern of the #tate. %ence, there being no withdrawal of the complaint filed by petitioner >ose Angeles before the petitioner )ean :ilberto !ercado, the administrati"e in"estigation should proceed. Therefore, as aptly stated by the petitioners to affirm the decision of the respondent >udge would gi"e nothing less than a license to students of a school, public or pri"ate, to assault and maul their teachers or professors without fear of being subIected to discipline by the school as long as the assault ta&es place off. campus or beyond school hours. +%$@$*;@$, the decision of the Court of *irst Instance of !anila sought to be re"iewed is hereby set aside and the writ of preliminary inIunction issued by the respondent Iudge is hereby dissol"ed, without pronouncement as to costs. #; ;@)$@$). G.R. No. 93833 +e#te7ber :8, 1995 +O)ORRO D. RAM*RE;, petitioner, "s. .ONORA4LE )O2R0 OF A//EAL+, "n3 E+0ER +. GAR)*A, respondents. 1A/2NAN, J.: A ci"il case damages was filed by petitioner #ocorro ). @amirez in the @egional Trial Court of Buezon City alleging that the pri"ate respondent, $ster #. :arcia, in a confrontation in the latterVs office, allegedly "exed,
:7

insulted and humiliated her in a Uhostile and furious moodU and in a manner offensi"e to petitionerVs dignity and personality,U contrary to morals, good customs and public policy.U 1 In support of her claim, petitioner produced a "erbatim transcript of the e"ent and sought moral damages, attorneyVs fees and other expenses of litigation in the amount of 504,444.44, in addition to costs, interests and other reliefs awardable at the trial courtVs discretion. The transcript on which the ci"il case was based was culled from a tape recording of the confrontation made by petitioner. : The transcript reads as follows< laintiff #occoro ). @amirez ,Chuchi/ :ood Afternoon !Vam. )efendant $ster #. :arcia ,$#:/ Ano ba ang nangyari sa Vyo, na&alimot &a na &ung paano &a napunta rito, por&e member &a na, magsumbong &a &ung ano ang gagawin &o sa Vyo. C%FC%I Lasi, na&a duty a&o noon. $#: Tapos iniwan no. ,0ic/ C%FC%I %indi mVam, pero ilan beses na nila a&ong binali&an, sabing ganoon $#: Ito and ,sic/ masasabi &o sa Vyo, ayaw &ung ,sic/ mag explain &a, &asi hanggang 04<44 p.m., &inabu&asan hindi &a na pumaso&. Dgayon a&o ang babali& sa Vyo, nag.aaply &a sa #tates, nag.aaply &a sa re"iew mo, &ung &a&ailanganin ang certification mo, &alimutan mo na &asi hindi &a sa a&in ma&a&ahingi. C%FC%I %indi !Vam. Lasi ang ano &o talaga noon i. cocontinue &o up to 04<44 p.m. $#: Bastos ka, na&alimutan mo na &ung paano &a pumaso& dito sa hotel. !agsumbong &a sa Fnion &ung gusto mo. Da&alimutan mo na &ung paano &a na&apaso& dito U)o you thin& that on your own ma&a&apaso& &a &ung hindi a&o. anunumbyoyan na &ita ,#inusumbatan na &ita/. C%FC%I Itutuloy &o na !Vam sana ang duty &o. $#: Laso ilang beses na a&ong binabali&an doon ng mga no ,sic/ &o. $#: Da&alimutan mo na ba &ung paano &a pumaso& sa hotel, &ung on your own merit alam &o naman &ung gaano &a U&a boboU mo. !arami ang nag.aaply alam &ong hindi &a papasa.

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C%FC%I Lumuha &ami ng exam noon. $#: ;o, pero hindi &a papasa. C%FC%I $h, ba&it a&o ang na&uha ni )r. Tamayo $#: Lu&unin &a &asi a&o. C%FC%I $h, di sana $#: %uwag mong ipagmala&i na may uta& &a &asi *ala kan' utak. A&ala mo ba ma&u&uha &a dito &ung hindi a&o. C%FC%I !ag.eexplain a&o. $#: %uwag na, hindi a&o mag.papa.explain sa Vyo, ma&aalala &a &ung paano &a puma.rito. UPutan'AinaU sasabi. sabihin mo &amag.ana& ng nanay at tatay mo ang mga magulang &o. $#: +ala na a&ong pa&ialam, dahil nandito &a sa loob, nasa labas &a puwede &a ng hindi pumaso&, o&ey yan nasaloob &a umalis &a doon. C%FC%I Lasi !Vam, binbali&an a&o ng mga taga Fnion. $#: Dandiyan na rin a&o, pero huwag mong &alimutan na hindi &a ma&a&apaso& &ung hindi a&o. Lung hindi mo &ini&ilala yan o&ey lang sa a&in, dahil tapos &a na. C%FC%I Ina.ano &o mVam na utang na loob. $#: %uwag na lang, hindi mo utang na loob, &asi &ung baga sa no, nilapastangan mo a&o. C%FC%I aano &ita nilapastangananM $#: !abuti pa lumabas &a na. %indi na a&o ma&i&ipagusap sa Vyo. Lumabas &a na. !agsumbong &a. 3 As a result of petitionerVs recording of the e"ent and alleging that the said act of secretly taping the confrontation was illegal, pri"ate respondent filed a criminal case before the @egional Trial Court of asay City for "iolation of @epublic Act -644, entitled UAn Act to prohibit and penalize wire tapping and other related "iolations of pri"ate communication, and other purposes.U An information charging petitioner of "iolation of the said Act, dated ;ctober 5, 0122 is 8uoted herewith<

/N(IR&A>/IN The Fndersigned Assistant City *iscal Accusses #ocorro ). @amirez of 9iolation of @epublic Act Do. -644, committed as follows< That on or about the 66nd day of *ebruary, 0122, in asay City !etro !anila, hilippines, and within the Iurisdiction of this honorable court, the abo"e.named accused, #ocorro ). @amirez not being authorized by $ster #. :arcia to record the latterVs con"ersation with said accused, did then and there willfully, unlawfully and feloniously, with the use of a tape recorder secretly record the said con"ersation and thereafter communicate in writing the contents of the said recording to other person. Contrary to law. asay City, !etro !anila, #eptember 05, 0122. !A@IAD; !. CFD$TA Asst. City *iscal Fpon arraignment, in lieu of a plea, petitioner filed a !otion to Buash the Information on the ground that the facts charged do not constitute an offense, particularly a "iolation of @.A. -644. In an order !ay =, 0121, the trial court granted the !otion to Buash, agreeing with petitioner that 0/ the facts charged do not constitute an offense under @.A. -644A and that 6/ the "iolation punished by @.A. -644 refers to a the taping of a communication by a personother than a participant to the communication. C *rom the trial courtVs ;rder, the pri"ate respondent filed a etition for @e"iew on Certiorari with this Court, which forthwith referred the case to the Court of Appeals in a @esolution ,by the *irst )i"ision/ of >une 01, 0121. ;n *ebruary 1, 0114, respondent Court of Appeals promulgated its assailed )ecision declaring the trial courtVs order of !ay =, 0121 null and "oid, and holding that< OTPhe allegations sufficiently constitute an offense punishable under #ection 0 of @.A. -644. In thus 8uashing the information based on the ground that the facts alleged do not constitute an offense, the respondent Iudge acted in gra"e abuse of discretion correctible by certiorari. 5 Conse8uently, on *ebruary 60, 0114, petitioner filed a !otion for @econsideration which respondent Court of Appeals denied in its @esolution 6 dated >une 01, 0114. %ence, the instant petition. etitioner "igorously argues, as her Umain and principal issueU 7 that the applicable pro"ision of @epublic Act -644 does not apply to the taping of a pri"ate con"ersation by one of the parties to the con"ersation. #he contends that the pro"ision merely refers to the unauthorized taping of a pri"ate con"ersation by a party other than those in"ol"ed in the communication. 8 In relation to this, petitioner a"ers that the substance or

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content of the con"ersation must be alleged in the Information, otherwise the facts charged would not constitute a "iolation of @.A. -644. 9 *inally, petitioner agues that @.A. -644 penalizes the taping of a Upri"ate communication,U not a Upri"ate con"ersationU and that conse8uently, her act of secretly taping her con"ersation with pri"ate respondent was not illegal under the said act. 1E +e disagree. *irst, legislati"e intent is determined principally from the language of a statute. +here the language of a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation would be resorted to only where a literal interpretation would be either impossible 11 or absurb or would lead to an inIustice. 1: #ection 0 of @.A. -644 entitled, U An Act to rohibit and enalized +ire Tapping and ;ther @elated 9iolations of ri"ate Communication and ;ther urposes,U pro"ides< #ec. 0. It shall be unlawfull for any person, not being authorized by all the parties to any pri"ate communication or spo&en word, to tap any wire or cable, or by using any other de"ice or arrangement, to secretly o"erhear, intercept, or record such communication or spo&en word by using a de"ice commonly &nown as a dictaphone or dictagraph or detectaphone or wal&ie.tal&ie or tape recorder, or howe"er otherwise described. The aforestated pro"ision clearly and une8ui"ocally ma&es it illegal for any person, not authorized by all the parties to any pri"ate communication to secretly record such communication by means of a tape recorder. The law ma&es no distinction as to whether the party sought to be penalized by the statute ought to be a party other than or different from those in"ol"ed in the pri"ate communication. The statuteVs intent to penalize all persons unauthorized to ma&e such recording is underscored by the use of the 8ualifier UanyU. Conse8uently, as respondent Court of Appeals correctly concluded, Ue"en a ,person/ pri"y to a communication who records his pri"ate con"ersation with another without the &nowledge of the latter ,will/ 8ualify as a "iolatorU 13 under this pro"ision of @.A. -644. A perusal of the #enate Congressional @ecords, moreo"er, supports the respondent courtVs conclusion that in enacting @.A. -644 our lawma&ers indeed contemplated to ma&e illegal, unauthorized tape recording of pri"ate con"ersations or communications ta&en either by the parties themsel"es or by third persons. Thus< #enator TaWada< That 8ualified only Uo"erhearU. #enator adilla< #o that when it is intercepted or recorded, the element of secrecy would not appear to be material. Dow, suppose, Cour %onor, the recording is not made by all the parties but by some parties and in"ol"ed not criminal cases that would be mentioned under section = but would co"er, for example ci"il cases or special proceedings whereby a recording is made not necessarily by all the parties but perhaps by some in an effort to show the intent of the parties because the actuation of the parties prior, simultaneous e"en subse8uent to the contract or the act may be indicati"e of their intention. #uppose there is such a recording, would you say, Cour %onor, that the intention is to co"er it within the pur"iew of this bill or outsideM #enator TaWada< That is co"ered by the pur"iew of this bill, Cour %onor.

#enator adilla< $"en if the record should be used not in the prosecution of offense but as e"idence to be used in Ci"il Cases or special proceedingsM #enator TaWada< That is right. This is a complete "an on tape recorded conversations taken *ithout the authori7ation of all the parties. #enator adilla< Dow, would that be reasonable, your %onorM #enator TaWada< I belie"e it is reasonable because it is not sportin' to record the o"servation of one *ithout his kno*in' it and then usin' it a'ainst him. /t is not fair, it is not sportsmanlike. If the purposeA Cour honor, is to record the intention of the parties. I belie"e that all the parties should &now that the obser"ations are being recorded. #enator adilla< This might reduce the utility of recorders. #enator TaWada< +ell no. *or example, I was to say that in meetings of the board of directors where a tape recording is ta&en, there is no obIection to this if all the parties &now. It is but fair that the people whose remar&s and obser"ations are being made should &now that the obser"ations are being recorded. #enator adilla< Dow, I can understand. #enator TaWada< That is why when we ta&e statements of persons, we say< U lease be informed that whate"er you say here may be used against you.U That is fairness and that is what we demand. Dow, in spite of that warning, he ma&es damaging statements against his own interest, well, he cannot complain any more. But if $ou are 'oin' to take a recordin' of the o"servations and remarks of a person *ithout him kno*in' that it is "ein' taped or recorded, *ithout him kno*in' that *hat is "ein' recorded ma$ "e used a'ainst him, / think it is unfair. ,Congression @ecord, 9ol. III, Do. =0, p. 72-, !arch 06, 015-/ #enator )io&no< )o you understand, !r. #enator, that under #ection 0 of the bill as now worded, if a part$ secretl$ records a pu"lic speech, he would be penalized under #ection 0M 'ecause the speech is public, but the recording is done secretly. #enator TaWada< +ell, that particular aspect is not contemplated by the bill. /t is the communication "et*een one person and another person O not "et*een a speaker and a pu"lic. ,Congressional @ecord, 9ol. III, Do. ==, p. 565, !arch 06, 015-/ The unambiguity of the express words of the pro"ision, ta&en together with the abo"e.8uoted deliberations from the Congressional @ecord, therefore plainly supports the "iew held by the respondent court that the pro"ision see&s to penalize e"en those pri"y to the pri"ate communications. +here the law ma&es no distinctions, one does not distinguish.

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#econd, the nature of the con"ersations is immaterial to a "iolation of the statute. The substance of the same need not be specifically alleged in the information. +hat @.A. -644 penalizes are the acts of secretly overhearin', interceptin' or recordin' pri"ate communications by means of the de"ices enumerated therein. The mere allegation that an indi"idual made a secret recording of a pri"ate communication by means of a tape recorder would suffice to constitute an offense under #ection 0 of @.A. -644. As the #olicitor :eneral pointed out in his C;!!$DT before the respondent court< UDowhere ,in the said law/ is it re8uired that before one can be regarded as a "iolator, the nature of the con"ersation, as well as its communication to a third person should be professed.U1C *inally, petitionerVs contention that the phrase Upri"ate communicationU in #ection 0 of @.A. -644 does not include Upri"ate con"ersationsU narrows the ordinary meaning of the word UcommunicationU to a point of absurdity. The word communicate comes from the latin word communicare, meaning Uto share or to impart.U In its ordinary signification, communication connotes the act of sharing or imparting signification, communication connotes the act of sharing or imparting, as in a conversation, 15 or signifies the Uprocess by which meanings or thoughts are shared between indi"iduals through a common system of symbols ,as language signs or gestures/U 16 These definitions are broad enough to include "erbal or non."erbal, written or expressi"e communications of Umeanings or thoughtsU which are li&ely to include the emotionally.charged exchange, on *ebruary 66, 0122, between petitioner and pri"ate respondent, in the pri"acy of the latterVs office. Any doubts about the legislati"e bodyVs meaning of the phrase Upri"ate communicationU are, furthermore, put to rest by the fact that the terms Ucon"ersationU and UcommunicationU were interchangeably used by #enator TaWada in his $xplanatory Dote to the bill 8uoted below< It has been said that innocent people ha"e nothing to fear from their conversations being o"erheard. 'ut this statement ignores the usual nature of conversations as well the undeniable fact that most, if not all, ci"ilized people ha"e some aspects of their li"es they do not wish to expose. *ree conversations are often characterized by exaggerations, obscenity, agreeable falsehoods, and the expression of anti.social desires of "iews not intended to be ta&en seriously. The right to the privac$ of communication, among others, has expressly been assured by our Constitution. Deedless to state here, the framers of our Constitution must ha"e recognized the nature of conversations between indi"iduals and the significance of manVs spiritual nature, of his feelings and of his intellect. They must ha"e &nown that part of the pleasures and satisfactions of life are to be found in the unaudited, and free exchange of communication between indi"iduals free from e"ery unIustifiable intrusion by whate"er means. 17 In :aanan vs. /ntermediate Appellate Court, 18 a case which dealt with the issue of telephone wiretapping, we held that the use of a telephone extension for the purpose of o"erhearing a pri"ate con"ersation without authorization did not "iolate @.A. -644 because a telephone extension de"ise was neither among those Ude"ice,s/ or arrangement,s/U enumerated therein, 19 following the principle that Upenal statutes must be construed strictly in fa"or of the accused.U :E The instant case turns on a different note, because the applicable facts and circumstances pointing to a "iolation of @.A. -644 suffer from no ambiguity, and the statute itself explicitly mentions the unauthorized UrecordingU of pri"ate communications with the use of tape. recorders as among the acts punishable. +%$@$*;@$, because the law, as applied to the case at bench is clear and unambiguous and lea"es us with no discretion, the instant petition is hereby )$DI$). The decision appealed from is A**I@!$). Costs against petitioner. #; ;@)$@$).

G.R. No. 7C93E Febr8"r$ 13, 1989 R*)ARDO VALMON0E, O+BALDO )AR4ONELL, DOY DEL )A+0*LLO, ROLANDO 4AR0OLOME, LEO O4L*GAR, 92N G20*ERRE;, REYNALDO 4AGA0+*NG, 92N MN*NOYM AL4A, /ER)Y LA/*D, ROMMEL )ORRO "n3 ROLANDO FAD2L, petitioners, "s. FEL*)*ANO 4ELMON0E, 9R., respondent. )OR0E+, J.: etitioners in this special ci"il action for mandamus with preliminary inIunction in"o&e their right to information and pray that respondent be directed<

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,a/ to furnish petitioners the list of the names of the 'atasang ambansa members belonging to the FDI); and ) .Laban who were able to secure clean loans immediately before the *ebruary 3 election thru the intercessionQmarginal note of the then *irst Lady Imelda !arcosA andQor ,b/ to furnish petitioners with certified true copies of the documents e"idencing their respecti"e loansA andQor ,c/ to allow petitioners access to the public records for the subIect information. , etition, pp. -.7A paragraphing supplied.P The contro"ersy arose when petitioner 9almonte wrote respondent 'elmonte the following letter< >une -, 0125 %on. *eliciano 'elmonte :#I# :eneral !anager Arroceros, !anila #ir< As a lawyer, member of the media and plain citizen of our @epublic, I am re8uesting that I be furnished with the list of names of the opposition members of ,the/ 'atasang ambansa who were able to secure a clean loan of 6 million each on guarranty ,sic/ of !rs. Imelda !arcos. +e understand that ;IC !el Lopez of !anila was one of those aforesaid ! s. Li&ewise, may we be furnished with the certified true copies of the documents e"idencing their loan. $xpenses in connection herewith shall be borne by us. If we could not secure the abo"e documents could we ha"e access to themM +e are premising the abo"e re8uest on the following pro"ision of the *reedom Constitution of the present regime.

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The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions or decisions, shall be afforded the citizen subIect to such limitation as may be pro"ided by law. ,Art. I9, #ec. 5/. +e trust that within fi"e ,7/ days from receipt hereof we will recei"e your fa"orable response on the matter. O@ollo, p. 3.P To the aforesaid letter, the )eputy :eneral Counsel of the :#I# replied< >une 03, 0125 Atty. @icardo C. 9almonte 042 $. 'enin #treet Caloocan City )ear CompaWero< ossibly because he must ha"e thought that it contained serious legal implications, resident ? :eneral !anager *eliciano 'elmonte, >r. referred to me for study and reply your letter to him of >une -, 0125 re8uesting a list of the opposition members of 'atasang ambansa who were able to secure a clean loan of 6 million each on guaranty of !rs. Imelda !arcos. !y opinion in this regard is that a confidential relationship exists between the :#I# and all those who borrow from it, whoe"er they may beA that the :#I# has a duty to its customers to preser"e this confidentialityA and that it would not be proper for the :#I# to breach this confidentiality unless so ordered by the courts. As a "iolation of this confidentiality may mar the image of the :#I# as a reputable financial institution, I regret "ery much that at this time we cannot respond positi"ely to your re8uest. 9ery truly yours, ,#gd./ !$CDA@); A. TI@; )eputy :eneral Counsel O@ollo, p. -4.P ;n >une 64, 0125, apparently not ha"ing yet recei"ed the reply of the :o"ernment #er"ice and Insurance #ystem ,:#I#/ )eputy :eneral Counsel, petitioner 9almonte wrote respondent another letter, saying that for failure to recei"e a reply, U,+/e are now considering oursel"es free to do whate"er action necessary within the premises to pursue our desired obIecti"e in pursuance of public interest.U O@ollo, p. 2.P

;n >une 65, 0125, 9almonte, Ioined by the other petitioners, filed the instant suit. ;n >uly 01, 0125, the Dail$ !xpress carried a news item reporting that 0=3 former members of the defunct interim and regular 'atasang ambansa, including ten ,04/ opposition members, were granted housing loans by the :#I# O@ollo, p. -0.P #eparate comments were filed by respondent 'elmonte and the #olicitor :eneral. After petitioners filed a consolidated reply, the petition was gi"en due course and the parties were re8uired to file their memoranda. The parties ha"ing complied, the case was deemed submitted for decision. In his comment respondent raises procedural obIections to the issuance of a writ of mandamus, among which is that petitioners ha"e failed to exhaust administrati"e remedies. @espondent claims that actions of the :#I# :eneral !anager are re"iewable by the 'oard of Trustees of the :#I#. etitioners, howe"er, did not see& relief from the :#I# 'oard of Trustees. It is therefore asserted that since administrati"e remedies were not exhausted, then petitioners ha"e no cause of action. To this obIection, petitioners claim that they ha"e raised a purely legal issue, vi7., whether or not they are entitled to the documents sought, by "irtue of their constitutional right to information. %ence, it is argued that this case falls under one of the exceptions to the principle of exhaustion of administrati"e remedies. Among the settled principles in administrati"e law is that before a party can be allowed to resort to the courts, he is expected to ha"e exhausted all means of administrati"e redress a"ailable under the law. The courts for reasons of law, comity and con"enience will not entertain a case unless the a"ailable administrati"e remedies ha"e been resorted to and the appropriate authorities ha"e been gi"en opportunity to act and correct the errors committed in the administrati"e forum. %owe"er, the principle of exhaustion of administrati"e remedies is subIect to settled exceptions, among which is when only a 8uestion of law is in"ol"ed O ascual ". ro"incial 'oard, 045 hil. -55 ,0171/A Aguilar ". 9alencia, et al., :.@. Do. L.=4=15, >uly =4, 0130, -4 #C@A 604A !alabanan ". @amento, :.@. Do. L.6634, !ay 60, 012-, 061 #C@A =71.P The issue raised by petitioners, which re8uires the interpretation of the scope of the constitutional right to information, is one which can be passed upon by the regular courts more competently than the :#I# or its 'oard of Trustees, in"ol"ing as it does a purely legal 8uestion. Thus, the exception of this case from the application of the general rule on exhaustion of administrati"e remedies is warranted. %a"ing disposed of this procedural issue, +e now address oursel"es to the issue of whether or not mandamus hes to compel respondent to perform the acts sought by petitioners to be done, in pursuance of their right to information. +e shall deal first with the second and third alternati"e acts sought to be done, both of which in"ol"e the issue of whether or not petitioners are entitled to access to the documents e"idencing loans granted by the :#I#. This is not the first time that the Court is confronted with a contro"ersy directly in"ol"ing the constitutional right to information. In >a-ada v. >uvera, :.@. Do. 5=107, April 6-,0127, 0=5 #C@A 63 and in the recent case of %e'aspi v. Civil 0ervice Commission, :.@. Do. 36001, !ay 61, 0123,074 #C@A 7=4, the Court upheld the peopleVs constitutional right to be informed of matters of public interest and ordered the go"ernment agencies concerned to act as prayed for by the petitioners. The pertinent pro"ision under the 0123 Constitution is Art. 000, #ec. 3 which states< Page82

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The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to go"ernment research data used as basis for policy de"elopment, shall be afforded the citizen, subIect to such limitations as may be pro"ided by law. The right of access to information was also recognized in the 013= Constitution, Art. I9 #ec. 5 of which pro"ided< The right of the people to information on Vmatters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, shall be afforded the citizen subIect to such limitations as may be pro"ided by law. An informed citizenry with access to the di"erse currents in political, moral and artistic thought and data relati"e to them, and the free exchange of ideas and discussion of issues thereon, is "ital to the democratic go"ernment en"isioned under our Constitution. The cornerstone of this republican system of go"ernment is delegation of power by the people to the #tate. In this system, go"ernmental agencies and institutions operate within the limits of the authority conferred by the people. )enied access to information on the inner wor&ings of go"ernment, the citizenry can become prey to the whims and caprices of those to whom the power had been delegated. The postulate of public office as a public trust, institutionalized in the Constitution ,in Art. GI, #ec. 0/ to protect the people from abuse of go"ernmental power, would certainly be were empty words if access to such information of public concern is denied, except under limitations prescribed by implementing legislation adopted pursuant to the Constitution. etitioners are practitioners in media. As such, they ha"e both the right to gather and the obligation to chec& the accuracy of information the disseminate. *or them, the freedom of the press and of speech is not only critical, but "ital to the exercise of their professions. The right of access to information ensures that these freedoms are not rendered nugatory by the go"ernmentVs monopolizing pertinent information. *or an essential element of these freedoms is to &eep open a continuing dialogue or process of communication between the go"ernment and the people. It is in the interest of the #tate that the channels for free political discussion be maintained to the end that the go"ernment may percei"e and be responsi"e to the peopleVs will. Cet, this open dialogue can be effecti"e only to the extent that the citizenry is informed and thus able to formulate its will intelligently. ;nly when the participants in the discussion are aware of the issues and ha"e access to information relating thereto can such bear fruit. The right to information is an essential premise of a meaningful right to speech and expression. 'ut this is not to say that the right to information is merely an adIunct of and therefore restricted in application by the exercise of the freedoms of speech and of the press. *ar from it. The right to information goes hand.in.hand with the constitutional policies of full pu"lic disclosure D and honest$ in the pu"lic service. DD It is meant to enhance the widening role of the citizenry in go"ernmental decision.ma&ing as well as in chec&ing abuse in go"ernment. Cet, li&e all the constitutional guarantees, the right to information is not absolute. As stated in %e'aspi, the peopleVs right to information is limited to Umatters of public concern,U and is further UsubIect to such limitations as may be pro"ided by law.U #imilarly, the #tateVs policy of full disclosure is limited to Utransactions in"ol"ing public interest,U and is UsubIect to reasonable conditions prescribed by law.U

%ence, before mandamus may issue, it must be clear that the information sought is of Upublic interestU or Upublic concern,U and is not exempted by law from the operation of the constitutional guarantee OLegazpi ". Ci"il #er"ice Commission, supra, at p. 7-6.P The Court has always grappled with the meanings of the terms Upublic interestU and Upublic concernU. As obser"ed in %e'a7piN In determining whether or not a particular information is of public concern there is no rigid test which can be applied. U ublic concernU li&e Upublic interestU is a term that eludes exact definition. 'oth terms embrace a broad spectrum of subIects which the public may want to &now, either because these directly affect their li"es, or simply because such matters naturally arouse the interest of an ordinary citezen. In the final analysis, it is for the courts to determine on a case by case basis whether the matter at issue is of interest or importance, as it relates to or affects the public. O/"id. at p. 7-0P In the >a-ada case the public concern deemed co"ered by the constitutional right to information was the need for ade8uate notice to the public of the "arious laws which are to regulate the actions and conduct of citezens. In%e'aspi, it was the Ulegitimate concern of citezensof ensure that go"ernment positions re8uiring ci"il ser"ice eligibility are occupied only by persons who are eligiblesU O0upra at p. 7=1.P The information sought by petitioners in this case is the truth of reports that certain !embers of the 'atasang ambansa belonging to the opposition were able to secure UcleanU loans from the :#I# immediately before the *ebruary 3, 0125 election through the intercession of th eformer *irst Lady, !rs. Imelda !arcos. The :#I# is a trustee of contributions from the go"ernment and its employees and the administrator of "arious insurance programs for the benefit of the latter. Fndeniably, its funds assume a public character. !ore particularly, #ecs. 7,b/ and -5 of .). 00-5, as amended ,the @e"ised :o"ernment #er"ice Insurance Act of 0133/, pro"ide for annual appropriations to pay the contributions, premiums, interest and other amounts payable to :#I# by the go"ernment, as employer, as well as the obligations which the @epublic of the hilippines assumes or guarantees to pay. Considering the nature of its funds, the :#I# is expected to manage its resources with utmost prudence and in strict compliance with the pertinent laws or rules and regulations. Thus, one of the reasons that prompted the re"ision of the old :#I# law ,C.A. Do. 025, as amended/ was the necessity Uto preser"e at all times the actuarial sol"ency of the funds administered by the #ystemU O#econd +hereas Clause, .). Do. 00-5.P Conse8uently, as respondent himself admits, the :#I# Uis not supposed to grant Vclean loans.VU OComment, p. 2.P It is therefore the legitimate concern of the public to ensure that these funds are managed properly with the end in "iew of maximizing the benefits that accrue to the insured go"ernment employees. !oreo"er, the supposed borrowers were !embers of the defunct 'atasang ambansa who themsel"es appropriated funds for the :#I# and were therefore expected to be the first to see to it that the :#I# performed its tas&s with the greatest degree of fidelity and that an its transactions were abo"e board. In sum, the public nature of the loanable funds of the :#I# and the public office held by the alleged borrowers ma&e the information sought clearly a matter of public interest and concern. A second re8uisite must be met before the right to information may be enforced through mandamus proceedings,vi7., that the information sought must not be among those excluded by law. Page82

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@espondent maintains that a confidential relationship exists between the :#I# and its borrowers. It is argued that a policy of confidentiality restricts the indiscriminate dissemination of information. Cet, respondent has failed to cite any law granting the :#I# the pri"ilege of confidentiality as regards the documents subIect of this petition. %is position is apparently based merely on considerations of policy. The Iudiciary does not settle policy issues. The Court can only declare what the law is, and not what the law should be. Fnder our system of go"ernment, policy issues are within the domain of the political branches of the go"ernment, and of the people themsel"es as the repository of all #tate power. @espondent howe"er contends that in "iew of the right to pri"acy which is e8ually protected by the Constitution and by existing laws, the documents e"idencing loan transactions of the :#I# must be deemed outside the ambit of the right to information. There can be no doubt that right to pri"acy is constitutionally protected. In the landmar& case of &orfe v. &utucO0=4 hil. -07 ,0152/, 66 #C@A -6-P, this Court, spea&ing through then !r. >ustice *ernando, stated< ... The right to pri"acy as such is accorded recognition independently of its identification with libertyA in itself, it is fully deser"ing of constitutional protection. The language of rof. $merson is particularly apt< UThe concept of limited go"ernment has always included the idea that go"ernmental powers stop short of certain intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between absolute and limited go"ernment. FItimate and per"asi"e control of the indi"idual, in all aspects of his life, is the hallmar& of the absolute. state, In contrast, a system of limited go"ernment safeguards a pri"ate sector, which belongs to the indi"idual, firmly distinguishing it from the public sector, which the state can control. rotection of this pri"ate sector protection, in other words, of the dignity and integrity of the indi"idual has become increasingly important as modem society has de"eloped. All the forces of technological age industrialization, urbanization, and organization operate to narrow the area of pri"acy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this encla"e of pri"ate life mar&s the difference between a democratic and a totalitarian society.U Oat pp. ---.--7.P +hen the information re8uested from the go"ernment intrudes into the pri"acy of a citizen, a potential conflict between the rights to information and to pri"acy may arise. %owe"er, the competing interests of these rights need not be resol"ed in this case. Apparent from the abo"e.8uoted statement of the Court in &orfe is that the right to pri"acy belongs to the indi"idual in his pri"ate capacity, and not to public and go"ernmental agencies li&e the :#I#. !oreo"er, the right cannot be in"o&ed by Iuridical entities li&e the :#I#. As held in the case of 3assar Colle'e v. %oose 6ills Biscuit Co. O013 *. 126 ,0106/P, a corporation has no right of pri"acy in its name since the entire basis of the right to pri"acy is an inIury to the feelings and sensibilities of the party and a corporation would ha"e no such ground for relief. Deither can the :#I# through its :eneral !anager, the respondent, in"o&e the right to pri"acy of its borrowers. The right is purely personal in nature OCf. At&inson ". >ohn )oherty ? Co., 060 !ich =36, 24 D.+. 627, -5 L.@A. 601 ,0211/A #chuyler ". Curtis, 0-3 D.C. -=-, -6 D.$. 66, =0 L.@.A. 625 ,0217//, and hence may be in"o&ed only by the person whose pri"acy is claimed to be "iolated. It may be obser"ed, howe"er, that in the instant case, the concerned borrowers themsel"es may not succeed if they choose to in"o&e their right to pri"acy, considering the public offices they were holding at the time the loans were alleged to ha"e been granted. It cannot be denied that because of the interest they

generate and their newsworthiness, public figures, most especially those holding responsible positions in go"ernment, enIoy a more limited right to pri"acy as compared to ordinary indi"iduals, their actions being subIect to closer public scrutiny OCf.Ayer roductions ty. Ltd. ". Capulong, :.@. Dos. 26=24 and 26=12, April 61, 0122A 0ee also Cohen ". !arx, 600 . 6d =60 ,01-1/.P @espondent next asserts that the documents e"idencing the loan transactions of the :#I# are private in nature and hence, are not co"ered by the Constitutional right to information on matters of public concern which guarantees U,a/ccess to official records, and to documents, and papers pertaining to official acts, transactions, or decisionsU only. It is argued that the records of the :#I#, a go"ernment corporation performing proprietary functions, are outside the co"erage of the peopleVs right of access to official records. It is further contended that since the loan function of the :#I# is merely incidental to its insurance function, then its loan transactions are not co"ered by the constitutional policy of full public disclosure and the right to information which is applicable only to UofficialU transactions. *irst of all, the Uconstituent ministrantU dichotomy characterizing go"ernment function has long been repudiated. In ACC(A v. Confederation of Hnions and :overnment Corporations and Iffices ,:.@. Dos. L. 60-2- and L.6=547, Do"ember 61, 0151, =4 #C@A 5--0, the Court said that the go"ernment, whether carrying out its so"ereign attributes or running some business, discharges the same function of ser"ice to the people. Conse8uently, that the :#I#, in granting the loans, was exercising a proprietary function would not Iustify the exclusion of the transactions from the co"erage and scope of the right to information. !oreo"er, the intent of the members of the Constitutional Commission of 0125, to include go"ernment. owned and controlled corporations and transactions entered into by them within the co"erage of the #tate policy of fun public disclosure is manifest from the records of the proceedings< xxx xxx xxx T%$ @$#I)ID: ;**IC$@ ,!r. Colayco/. Commissioner #uarez is recognized. !@. #FA@$E. Than& you. !ay I as& the :entleman a few 8uestionM !@. ; L$. 9ery gladly. !@. #FA@$E. Than& you. +hen we declare a Upolicy of full public disclosure of all its transactionsU referring to the transactions of the #tate and when we say the U#tateU which I suppose would include all of the "arious agencies, departments, ministries and instrumentalities of the go"ernment.... !@. ; L$. Ces, and indi"idual public officers, !r. residing ;fficer. Page82 !@. #FA@$E. /ncludin' 'overnmentAo*ned and controlled corporations.

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!@. ; L$. >hat is correct, &r. Presidin' Ifficer. !@. #FA@$E. And when we say UtransactionsU which should be distinguished from contracts, agreements, or treaties or whate"er, does the :entleman refer to the steps leading to the consummation of the contract, or does he refer to the contract itselfM !@. ; L$. >he PtransactionsP used here / suppose is 'eneric and, therefore, it can cover "oth steps leadin' to a contract, and alread$ a consummated contract, &r. Presidin' Ifficer. !@. #FA@$E. This contemplates inclusion of negotiations leading to the consummation of the transaction. !@. ; L$. Ces, subIect only to reasonable safeguards on the national interest. !@. #FA@$E. Than& you. O9 @ecord of the Constitutional Commission 6-.67.P ,$mphasis supplied./ Considering the intent of the framers of the Constitution which, though not binding upon the Court, are ne"ertheless persuasi"e, and considering further that go"ernment.owned and controlled corporations, whether performing proprietary or go"ernmental functions are accountable to the people, the Court is con"inced that transactions entered into by the :#I#, a go"ernment.controlled corporation created by special legislation are within the ambit of the peopleVs right to be informed pursuant to the constitutional policy of transparency in go"ernment dealings. In fine, petitioners are entitled to access to the documents e"idencing loans granted by the :#I#, subIect to reasonable regulations that the latter may promulgate relating to the manner and hours of examination, to the end that damage to or loss of the records may be a"oided, that undue interference with the duties of the custodian of the records may be pre"ented and that the right of other persons entitled to inspect the records may be insured OLegaspi ". Ci"il #er"ice Commission, supra at p. 7=2, 8uoting #ubido ". ;zaeta, 24 hil. =2=, =23.P The petition, as to the second and third alternati"e acts sought to be done by petitioners, is meritorious. %owe"er, the same cannot be said with regard to the first act sought by petitioners, i.e., Uto furnish petitioners the list of the names of the 'atasang ambansa members belonging to the FDI); and ) . Laban who were able to secure clean loans immediately before the *ebruary 3 election thru the intercessionQmarginal note of the then *irst Lady Imelda !arcos.U Although citizens are afforded the right to information and, pursuant thereto, are entitled to Uaccess to official records,U the Constitution does not accord them a right to compel custodians of official records to prepare lists, abstracts, summaries and the li&e in their desire to ac8uire information on matters of public concern. It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a well.defined, clear and certain legal right to the thing demanded and that it is the imperati"e duty of defendant to perform the act re8uired. The corresponding duty of the respondent to perform the re8uired act must be clear and specific OLemi ". 9alencia, :.@. Do. L.64352, Do"ember 61,0152,065 #C@A 64=A ;campo ". #ubido, :.@. Do. L.62=--, August 63, 0135, 36 #C@A --=.P The re8uest of the petitioners fails to meet this standard, there being no duty on the part of respondent to prepare the list re8uested.

+%$@$*;@$, the instant petition is hereby granted and respondent :eneral !anager of the :o"ernment #er"ice Insurance #ystem is ;@)$@$) to allow petitioners access to documents and records e"idencing loans granted to !embers of the former 'atasang ambansa, as petitioners may specify, subIect to reasonable regulations as to the time and manner of inspection, not incompatible with this decision, as the :#I# may deem necessary. #; ;@)$@$). G.R. No. L-C6E61 No(e7ber 1C, 198C +0. LO2*+ REAL0Y )OR/ORA0*ON, petitioner, "s. )O2R0 OF A//EAL+ "n3 )ONRADO 9. ARAM*L, respondents. A<2*NO, J.: This case is about the reco"ery of damages for a wrongful ad"ertisement in the 0unda$ >imes where #aint Louis @ealty Corporation misrepresented that the house of )octor Conrado >. Aramil belonged to Arcadio #. Arcadio. #t. Louis @ealty caused to be published with the permission of Arcadio #. Arcadio ,but without permission of )octor Aramil/ in the issue of the 0unda$ >imes of )ecember 07, 0152 an ad"ertisement with the heading U+%$@$ T%$ %$A@T I#U. 'elow that heading was the photograph of the residence of )octor Aramil and theArcadio famil$ and then below the photograph was the following write.up< %ome is where the heart is. And the hearts of !@. AD) !@#. A@CA)I; #. A@CA)I; and their family ha"e been captured by '@;;L#I)$ %ILL#. They used to rent a small 6.bedroom house in a cramped neighborhood, sadly inade8uate and unwholesome for the needs of a large family. They dream,ed/ of a more pleasant place free from the din and dust of city life yet near all facilities. lans too& shape when they heard of '@;;L#I)$ %ILL#. +ith thrift and determination, they bought a lot and built their dream house ... for =0,444. The Arcadios are now part of the friendly, thri"ing community of '@;;L#I)$ %ILL#... a beautiful first.class subdi"ision planned for wholesome family li"ing. The same ad"ertisement appeared in the 0unda$ >imes dated >anuary 7, 0151. )octor Aramil a neuropsychiatrist and a member of the faculty of the F. $. @amon !agsaysay !emorial %ospital, noticed the mista&e. ;n that same date, he wrote #t. Louis @ealty the following letter of protest< )ear #irs< This is anent to your ad"ertisements appearing in the )ecember 07, 0152 and >anuary 7, 0151 issues of the 0unda$ >imes which boldly depicted my house at the abo"e.mentioned address and implying that it belonged to another person. I am not aware of any permission or authorit$ on m$ partfor the use of my house for such publicity. >his unauthori7ed use of m$ house for $our promotional 'ain and much more the apparent distortions therein are / "elieve not onl$ trans'ression to m$ private propert$ "ut also dama'in' to m$ presti'e in the medical profession / have had invited in several occasions numerous medical collea'ues, medical students and friends to m$ house and after readin' $our Decem"er ,9 advertisement some of them have uttered some remarks purportin' dou"ts as to m$ professional and personal inte'rit$. 0uch sl$ remarks althou'h in li'ht vein as Pit looks like $our house,P Pho* much are $ou rentin' from the ArcadiosQP, P like $our

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*ife portra$ed in the papers as "elon'in' to another hus"and,P etc., have resulted in no little mental an'uish on m$ part. I ha"e referred this matter to the Legal anel of the hilippine !edical Association and their final ad"ice is pending upon my submission of supporting ownership papers. I will therefore be constrained to pursue court action against your corporation unless you could satisfactorily explain this matter within a wee& upon receipt of this letter. The letter was recei"ed by $rnesto !agtoto, an officer of #t. Louis @ealty in charge of ad"ertising. %e stopped publication of the ad"ertisement. %e contacted )octor Aramil and offered his apologies. %owe"er, no rectification or apology was published. ;n *ebruary 64, 0151, AramilVs counsel demanded from #t. Louis @ealty actual, moral and exemplary damages of 004,444 ,$xh. )/. In its answer dated !arch 04, #t. Louis @ealty claimed that there was an honest mista&e and that if Aramil so desired, rectification would be published in the &anila >imes ,$xh. =/. It published in the issue of the &anila >imes of !arch 02, 0151 a new ad"ertisement with the Arcadio family and their real house. 'ut it did not publish any apology to )octor Aramil and an explanation of the error. ;n !arch 61, Aramil filed his complaint for damages. #t. Louis @ealty published in the issue of the &anila >imes of April 07, 0151 the following UD;TIC$ ;* @$CTI*ICATI;DU in a space - by = inches< This will ser"e as a notice that our print ad V+here the %eart isV which appeared in the &anila >imesissue of !arch 02, 0151 is a rectification of the same ad that appeared in the &anila >imes issues rectification of the same ad that appeal of )ecember 07, 0152 and >anuary 7, 0151 wherein a photo of the house of another 'roo&side %omeowner ,)r. Aramil.pri"ate respondent/ was mista&enly used as a bac&ground for the featured homeownerVs the Arcadio family. The ad of !arch 02, 0151 shows the Arcadio family with their real house in the bac&ground, as was intended all along. >udge >ose !. Leuterio obser"ed that #t. Louis @ealty should ha"e immediatel$ pu"lished a rectification and apolo'$. %e found that as a result of #t. Louis @ealtyVs mista&e, magnified by its utter lac& of sincerity, )octor Aramil suffered mental anguish and his income was reduced by about 0,444 to 0,744 a month. !oreo"er, there was "iolation of AramilVs right to pri"acy ,Art. 65, Ci"il Code/. The trial court awarded Aramil 2,444 as actual damages, 64,444 as moral damages and 6,444 as attorneyVs fees. #t. Louis @ealty appealed to the Court of Appeals. The Appellate Court affirmed that Iudgment, with Acting residing >ustice !agno #. :atmaitan as ponente, and >ustices #ixto A. )omondon and #amuel *. @eyes concurring. The Appellate Court reasoned out that #t. Louis @ealty committed an actionable 8uasi.delict under articles 60 and 65 of the Ci"il Code because the 8uestioned ad"ertisements pictured a beautiful house which did not belong to Arcadio but to )octor Aramil who, naturally, was annoyed by that contretemps.

In this appeal, #t. Louis @ealty contends that the Appellate Court ignored certain facts and resorted to surmises and conIectures. This contention is unwarranted. The Appellate Court adopted the facts found by the trial court. Those factual findings are binding on this Court. #t. Louis @ealty also contends that the decision is contrary to law and that the case was decided in a way not in conformity with the rulings of this Court. It argues that the case is not co"ered by article 65 which pro"ides that Ue"ery person shall respect the dignity, personality, pri"acy and peace of mind of his neighbors and other personsU. U rying into the pri"acy of anotherVs residenceU and Umeddling with or disturbing the pri"ate life or family relations of anotherU and Usimilar actsU, Uthough they may not constitute a criminal offense, shall produce a cause of action for damages, pre"ention and other reliefU. The damages fixed by >udge Leuterio are sanctioned by Articles 6644, 6642 and 6601 of the Ci"il Code. Article 6601 allows moral damages for acts and actions mentioned in Article 65. As lengthily explained by >ustice :atmaitan, the acts and omissions of the firm fan under Article 65. #t. Louis @ealtyVs employee was grossly negligent in mixing up the Aramil and Arcadio residences in a widely circulated publication li&e the 0unda$ >imes. To suit its purpose, it ne"er made any written apology and explanation of the mix.up. It Iust contented itself with a ca"alier Urectification U. ersons, who &now the residence of )octor Aramil, were confused by the distorted, lingering impression that he was renting his residence from Arcadio or that Arcadio had leased it from him. $ither way, his pri"ate life was mista&enly and unnecessarily exposed. %e suffered diminution of income and mental anguish. +%$@$*;@$, the Iudgment of the Appellate Court is affirmed. Costs against the petitioner. #; ;@)$@$). A.M. No. R09-96-1351. +e#te7ber 3, 1998 +ARA. 4. VEDAPA, co$plainant, vs. 92DGE E2DARL*O 4. VALEN)*A, respondent. DAV*DE, 9R., J.> @espondent >udge $udarlio '. 9alencia, residing >udge of 'ranch 666 ,Buezon City/ of the @egional Trial Court, Dational Capital >udicial @egion, was charged with gross misconduct and immoral acts by complainant #arah '. 9edaWa in a sworn letter dated 07 !ay 0115 addressed to the Chief >ustice through then )eputy Court Administrator 'ernardo . Abesamis. Complainant ser"es as the court interpreter in respondentVs court, and at the same time, is distantly related to respondent as their maternal grandmothers are first cousins. Complainant narrated the factual basis of her charge thus< ;n !ay 2, 0115 on or about 6<44 p.m. before the start of the scheduled hearing of cases, the undersigned complainant in her capacity as a court employee, being a Court Interpreter &noc&ed at the door of the chamber of the respondent, opened the door to inform the respondent that the cases scheduled for hearing are ready. At this Iuncture, respondent directed the undersigned to come in said chamber. 'eing a subordinate and thin&ing that instructions will be gi"en, I did OsicP complied and went inside the chamber. +hen I was standing beside his table awaiting for instructions, respondent held my hands. 'earing in mind that the respondent is a relati"e and the holding of my hand was without malice, I did not ma&e any reaction. It was only when my hand was held for 8uite sometime and sensing ulterior

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moti"e, I pulled my hand. @espondent stood up from his chair, hugged me and tried to &iss me on the lips which I was able to e"ade and his lips landed on my chee&. *eeling totally shoc&ed by the actuation of the respondent and considering that he is a relati"e, I ran out from the chamber and went to my office table to ha"e a relief OsicP. +ith the dastardly acts committed in the person of the herein complainant that caused mental anguish, a re8uest was made on my co.employee, !r. $duard Lorenzo to ta&e my place in the court hearing. In the resolution of 07 >uly 0115, we re8uired respondent to comment on the complaint and, upon recommendation of the ;ffice of the Court Administrator, placed him under pre"enti"e suspension and referred the case to Associate >ustice )elilah 9. !agtolis of the Court of Appeals for in"estigation, report and recommendation. ;n 0= August 0115, respondent filed an Frgent !otion for @econsideration of his pre"enti"e suspension and as&ed to ha"e it lifted as he was entitled to< ,a/ the Hpresumption of innocence against a false and fabricated administrati"e complaintAJ and ,b/ Hdue process of law.J !oreo"er, Hthe lifting of OtheP suspension order will not affect the impartial in"estigation of OtheP caseAJ and the suspension order Hwill create a false impression of guilt.J ;n 07 August 0115, respondent filed his Comment , cum !otion to )ismiss/ wherein, as his defense, he alleged that< ,a/ the commission of the alleged misconduct His inherently and highly improbableAJ and ,b/ the complaint His moti"ated by OaP personal grudge.J %e then prayed once more that the suspension order be lifted. In the resolution of 6 #eptember 0115, we noted the motion for reconsideration and referred the comment to the designated in"estigating >ustice, !me. >ustice !agtolis, who was directed to conduct the in"estigation and submit her report and recommendation within ninety ,14/ days. ;n 01 #eptember 0115, complainant filed her reply to respondent(s comment. #he asserted that the denial of respondent could not pre"ail o"er her clear and positi"e assertion and that she could ha"e ne"er been moti"ated by a personal grudgeA if, indeed, respondent had not committed the imputed acts, he would not ha"e re8uested immediate common relati"es, such as the !ayor of !asbate, together with *iscal Darciso @esero, >r., to mediate and see& her forgi"eness. ;n 3 ;ctober 0115, respondent filed an Frgent #econd !otion to Lift Indefinite #uspension. re"enti"e

>ustice 'rawner conducted hearings and recei"ed the e"idence for the parties. Thereafter, on 0= !ay 0112, he submitted his @eport and @ecommendation, wherein he disclosed that the Htedious hearingOsP starting on !arch 7, 0113 and ending on )ecember 04, 0113 piled up 6,-=6 pages of transcripts of stenographic notes ta&en during the ele"en ,00/ trial datesJ when complainant and her witnesses !arife ;pulencia, >oselito 'acolod and 9ife Legaspi, and respondent and his witnesses 'ernardo !ortel and Deri :. Loi testifiedA and made the following findings of fact and conclusions< The complainant is the Court Interpreter while the respondent is the residing >udge, of the @egional Trial Court ,@TC/, 'ranch 666 at Buezon City. ;n !ay 2, 0115 at around 6<44 o(cloc& in the afternoon, as was her want to do, the complainant went to the respondent >udge(s chamber to inform him that the cases were ready for trial. #he &noc&ed on the door and upon being told to enter, she po&ed her head inside the room and told the respondent that the parties were all present. The respondent howe"er, called her inside the chamber and bidding to the re8uest, she went in and stood beside his table. The respondent then held her right hand and tried to &iss her on the lips. %owe"er, she e"aded the &iss and it landed on her chee&. The respondent then held her left breast. In her struggle to bea& free of the respondent(s hold, the pen she held in her hand fell to the floor. #he was able to free herself, hence she pic&ed up the pen and left the room in a hurry. Do one was in the staff room when she went out and she went straight to the courtroom to perform her duties as Court Interpreter. The rest of the staff were already at their respecti"e stations awaiting the >udge(s entrance. *eeling shoc&ed at what happened, the complainant approached $duardo Lorenzo who was then on apprenticeship training in the court and as&ed him to help her do the interpreting Iust in case the need would arise. $duardo Lorenzo acceded to her re8uest. The complainant, howe"er, remained in the courtroom during the entire session except for a few minutes when she went out to the staff room to get a needed record. )uring the whole time that she was inside the courtroom, the complainant ne"er re"ealed what happened. +hen the court session was o"er howe"er at around -<=4 o(cloc& in the afternoon, she approached the court stenographer, 9ife Legaspi, and as&ed her if she was going somewhere. @ecei"ing a negati"e answer, the complainant re8uested her to accompany her ,complainant/ to #hoemart #hopping !all ,#!/. They too& a cab and while inside and on their way to #!, the complainant could not hold it any longer and the dam bro&e. The complainant was hysterical, trembling and crying at the same time when she told 9ife Legaspi that something terrible happened. #he narrated what the respondent >udge did to her inside the chamber. Fpon reaching #!, the two ladies stayed at a fast food restaurant where they sat con"ersing for around = hours on what the complainant should do about the incident. +hile at #!, the complainant called her best friend and classmate at the !anuel Luis Buezon Fni"ersity College of Law, !arife ;pulencia. !arife ;pulencia recalls recei"ing a call from the complainant at around 5<44 o(cloc& in the e"ening of !ay 2, 0115. #he was then in her office wor&ing o"ertime when a distraught complainant who could hardly spea& called her up. #he then told the complainant to calm down, ta&e a deep breath and relate what happened. Crying o"er the phone, the complainant narrated what the respondent >udge did to her. !arife ;pulencia ad"ised the complainant to go home to her parents and tell them what happened as it was a family matter, the respondent >udge being a distant relati"e of the complainant. The complainant then went home to )agupan City and informed her parents who were both shoc&ed at what happened considering that the respondent >udge was a distant relati"e on complainant(s maternal side and a colleague, complainant(s father being a >udge in )agupan City.

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;n 0- ;ctober 0115, we granted the inhibition of !me. >ustice !agtolis because her daughter and respondent(s son were batchmates in law school and re.assigned the case to !me. >ustice ortia A. %ormachuelos for in"estigation, report and recommendation. %owe"er, the latter re8uested that she be allowed to inhibit herself to a"oid being UmisinterpretedU in "iew of her recommendation in another case in"ol"ing sexual harassment by a Iudge which resulted in the latterVs dismissal from the ser"ice. ;n 66 >anuary 0113, we granted the re8uest and designated !r. >ustice @omeo A. 'rawner of the Court of Appeals the in"estigating >ustice. ;n 3 !arch 0113, we re8uired !r. >ustice 'rawner to furnish a report and recommendation on respondent(s Frgent #econd !otion to Lift re"enti"e #uspensionA and in his @eport and @ecommendation filed on 6 April 0113, >ustice 'rawner recommended that the motion be granted. ;n 62 April 0113, we appro"ed >ustice 'rawnerVs recommendation and lifted respondentVs pre"enti"e suspension.

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The following day, !ay 1, 0115, the complainant(s mother went with her bac& to !anila as the former wanted to tal& to the respondent >udge about what happened. %owe"er, that day was the sports festi"al of the @TCs in Buezon City and thus it was not a wor&ing day. The respondent >udge was not around and hence there was no occasion for complainant(s mother to tal& to him. 'ecause of the incident, the complainant could not face going bac& to wor& at 'ranch 666 and hence she went on lea"e from !ay 04, to >une 04, 0115. #he subse8uently re8uested that she be detailed elsewhere, which letter.re8uest, although citing a different cause for the detail, was appro"ed and thus she was detailed in the office of >udge Amelia @. Andrade of the @TC, 'ranch 7 in !anila. +anting the respondent >udge to face sanctionOsP for his unbecoming beha"ior, the complainant instituted the present charges for H:ross !isconduct and Immoral ActsJ. In her complaint, complainant stated that the respondent >udge made attempts to try to dissuade her from continuing with her charges. #he presented a common relati"e, >oselito 'acolod, to pro"e this. >oselito 'acolod testified that respondent >udge is a grandson of his mother while complainant is his niece, complainant(s mother being his older sister. #ometime during the last wee& of >une, 0115, the respondent >udge paid a "isit to >oselito 'acolod(s mother. %is mother then called for him and his elder brother. The respondent >udge then re8uested all of them to go to )agupan City and try to persuade the complainant and her parents to drop the case against him as he was retiring from the ser"ice in two years time. +hen as&ed why he would do such a thing to a relati"e, the respondent >udge stated that it was only a fatherly &iss and besides, it was complainant(s hair that he &issed as her perfume smelled good. The respondent >udge ga"e >oselito 'acolod 0,444.44 for the use of his taxi to go to )agupan City. @espondent >udge absolutely denied all charges against him. %e categorically asserted that on that day at 6<44 o(cloc& in the afternoon, he was inside his chamber waiting to be called if the cases were ready. The complainant then came and &noc&ed on his door and entered informing him that the cases were ready for trial. %e then prepared himself and stood up and got his robe which was hanging on the wall and as soon as the complainant went out of his chamber, he followed, entered the courtroom and heard the cases that day. %e recalls that the complainant applied and was appointed as Court #tenographer in 0117 but she ne"er did any courtroom duty as such causing him to belie"e that she was not proficient at stenography. #he then transferred to the position of Court Interpreter sometime in ;ctober, 0117. The respondent admits that indeed he and the complainant are distant relati"es as their maternal grandmothers are first cousins and that they "isit each other(s families. The respondent further declares that the complainant came to him and re8uested that she be detailed somewhere near !anuel Luis Buezon Fni"ersity where she is a law student as she has difficulty commuting from the office to school. %owe"er, the respondent did not agree to a detail as the position would not be "acant and his court would be without an Interpreter. %e did agree to a transfer so he could fill in the "acancy and not unduly paralyze the operations of his office. As he denied the re8uest for detail, he surmised that this might ha"e prompted the complainant to file this false and malicious charges OsicP against him.

The complainant did not report for wor& after !ay 2, 0115 and he was informed by the Cler& of Court that she was on lea"e until >une 04, 0115. %owe"er, after the said date, the complainant did not yet put in an appearance so he recommended that she be declared absent without official lea"e ,A+;L/. %e only found out about the case against him on August 1, 0115 when he was re8uired by the #upreme Court to comment on the complaint at the same time putting him on pre"enti"e suspension.

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I9. 'oth executi"e an affida"it stating that Hbecause the Chamber(s door remained open, we saw !s. #arah 9edana and the >udge con"ersing and we did not see any untoward incident happening inside the chamber, much less the >udge allegedly hugging and &issing !s. #arah 9edanaJ ,>oint Affida"it, $xhibit H6=J/. *urther, both claimed that they "oluntarily executed the affida"it without any prodding nor pressure from the respondent. +ith these facts presented, the In"estigating >ustice has thoroughly sifted through the "oluminous transcript of records to separate the material from the immaterial facts, the true OsicP from the fiction. Amidst all the complainant(s assertions and the respondent(s counter.statements, one thing stands out< that the incident did happen the way the complainant said it be OsicP. *irst, the complainant narrated her story complete with details. #he narrated basically the same story without any change to her best friend and to the stenographer as soon as she was able to. Although the respondent 8uestions the time lapse between the actual happening of the incident to the time the complainant narrated her story to the stenographer, this cannot be ta&en against her. #he was aware that she had duties to attend to considering the absence of the Cler& of Court and the Legal @esearcher. #he could not ha"e left right after the incident nor go blurting it out as there were cases ready for trial. Thus, as soon as it was possible, she re"ealed it to the stenographer, 9ife Legaspi, who claimed that the complainant was hysterical, crying and angry at the time that she relayed the incident. #he did not e"en wait for them to reach their destination as she "ent OsicP it out during their taxi ride to #!. Again when she called her friend !arife ;pulencia, the latter manifested that she was crying and was not able to tal& such that she ,!arife/ ad"ised her to ta&e a deep breath and calm down. If it is true that she was Iust ma&ing up the story, then she must ha"e been the consummate actress as she could e"en fa&e her emotions and her hysteria. #econd, the respondent claims that the reason for the filing of the charges against him is his refusal to grant complainant(s re8uest that she be detailed in some other office nearer her school. There is something wrong with this reasoning. The complainant lodged her complaint against the respondent on !ay 07, 0115 with the ;ffice of the Court Administrator of the #upreme Court. #ubse8uently because of what happened, she could no longer report bac& to her wor&place and hence she made the letter.re8uest as&ing that she be detailed elsewhere using the difficulty of commuting as her excuse. The respondent >udge recommended the denial of the re8uest in his 6nd Indorsement dated >uly 02, 0115, which is more than 6 months after the incident on !ay 2, 0115. If we follow the reasoning of the respondent that the charges were an offshoot of the denial of complainant(s re8uest, how come the denial came long after the incident happened and long after the charges were already filedM It would appear that the complainant is psychic as she &new her re8uest would be denied and so to get e"en, she filed the complaint way ahead of the yet.to.come denial. The respondent >udge(s reasoning defies logic.

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Third, both complainant and respondent agree that they are distant relati"es who maintain friendly and close relations and who exchange fa"ors with each other. *ilipino families are close.&nit and would rather &eep s&eletons in the closet than air dirty linen in public. %owe"er, in this instance, complainant disregarded the close family ties, disregarded the relationship and went on to denounce the respondent for his act. +hy would she go to the extent of brea&ing up friendly relations between relati"es for no apparent reasonM Fnless, of course, that her charges against the respondent are true that she feels she has to right a wrong against her committed by the "ery person who she should loo& up to as her protector. %er act of re"ealing what happened to her despite the tension it may create between their families, despite the brea&.up of family relations, bespea&s the truth that indeed the respondent >udge committed such a dastardly act upon her person. Amidst this unfazed accusation hurdled against the respondent, he denies it all. 'ut his denial is a feeble attempt to exculpate him from the wrongdoing he is accused of. The clear assertion of the complainant and that of her witnesses pre"ails o"er the denial of the respondent. +hat must ha"e possessed the respondent >udge to commit such an act against his "ery own relati"e is difficult to comprehend. +as his lust too great that he would ta&e it out on his helpless female relati"e in the hope that being a relati"e, it would not lea& out as some things are better &ept within the familyM %e did not rec&on that the complainant would defy family relations and bare all if only to put a stop to respondent(s shenanigan OsicP, isolated though it may be. 'eing a person cloa&ed with authority to uphold the law, the respondent >udge should be the first to be circumspect in his beha"ior. As held in D$ >e"an 4ard*are and Auto 0uppl$ Co. 3.OsicP >apucar, 046 #C@A -1-< HThe personal and official actuations of e"ery member of the 'ench must be beyond reproach and abo"e suspicion. The faith and confidence of the public in the administration of Iustice cannot be maintained if a >udge who dispenses it is not e8uipped with the cardinal Iudicial "irtue of moral integrity, and if he obtusely continues to commit an affront to public decency. In fact, moral integrity is more than a "irtueA it is a necessity in the >udiciary. x x xJ This In"estigation OsicP >ustice belie"es that based on the facts and the law, the respondent >udge should be meted out a punishment. >ustice 'rawner then recommended< B.EREFORE, finding the respondent G2*L0Y of the complaint OsicP filed against him, the undersigned respectfully recommends that respondent >udge $F)A@LI; '. 9AL$DCIA be suspended from office for sixty ,54/ days without pay. The main issue in this case is factual and depends on the assessment of the credibility of the witnesses, a function which is primarily lodged in the in"estigating >ustice. The rule which concedes due respect, and e"en finality, to the assessment of credibility of witnesses by trial Iudges in ci"il and criminal cases where preponderance of e"idenceO0P and proof beyond reasonable doubt,O6P respecti"ely, are re8uired, applies, a fortiori, in administrati"e cases where the 8uantum of proof re8uired is only substantial e"idence. O=P The trial Iudge is in a better position to determine whether the witnesses are telling the truth or lying considering that the latter are in his immediate presence and can thus hear the witnesses themsel"es and

obser"e their deportment and manner of testifying. Fnless it be shown that the Iudge has plainly o"erloo&ed, misunderstood or misapplied certain facts or circumstances of weight and substance which, if otherwise ta&en into account, would alter the result, or it be clearly shown to be arbitrary, his e"aluation of the credibility of a witness should be upheld. O-P +e find no room to accommodate the exception to the rule in the case of >ustice 'rawnerVs assessment, which we find to be a meticulous and dispassionate analysis of the testimonies of the complainant, the respondent and their respecti"e witnesses. +hile we concur, without reser"ation, with >ustice 'rawner(s factual findings, we are, howe"er, unable to adopt his recommendation as to the penalty to be imposed, which we find too light in "iew of the gra"ity, nature and import of the offense as to complainant and the >udiciary. It is truly beyond us what possessed respondent >udge to commit acts which may be deemed deplorable, to say the least, against complainant, who, although a distant relati"e in legal contemplation, was from a family with whom respondent admittedly maintained friendly and close relations. If this were a criminal prosecution and assuming that the procedural and e"identiary re8uirements had been complied with, respondent would be found guilty of, at least, unIust "exation, as defined by and penalized in Article 623 of the @e"ised enal Code. As it stands, respondent(s "iolation of complainant(s personhood, coupled with his being a public official, holding a position in the >udiciary and specifically entrusted with the sacred duty of administering Iustice, breached Canon 6 of the Code of >udicial Conduct and Canon = of the Canons of >udicial $thics which mandate, respecti"ely, that Ua Iudge should a"oid impropriety and appearance of impropriety in all acti"ities,U and that Ua IudgeVs official conduct should be free from the appearance of impropriety, and his personal beha"ior, not only upon the bench and in the performance of Iudicial duties, but also in his e"eryday life, should be beyond reproach.U These most exacting standards of decorum are demanded from magistrates if only, in the language of @ule 6.40 of Canon 6 of the Code of >udicial Conduct, to Upromote public confidence in the integrity and impartiality of the Iudiciary.U The spirit and philosophy underlying these Canons is best expressed in Castillo v. Calano'O7Pthus< The Code of >udicial $thics mandates that the conduct of a Iudge must be free of a whiff of impropriety not only with respect to his performance of his Iudicial duties, but also to his beha"ior outside his sala and as a pri"ate indi"idual. There is no dichotomy of morality< a public official is also Iudged by his pri"ate morals. The Code dictates that a Iudge, in order to promote public confidence in the integrity and impartiality of the Iudiciary, must beha"e with propriety at all times. As we ha"e "ery recently explained, a IudgeVs official life can not simply be detached or separated from his personal existence< Thus< 'eing the subIect of constant public scrutiny, a Iudge should freely and willingly accept restrictions on conduct that might be "iewed as burdensome by the ordinary citizen. A Iudge should personify Iudicial integrity and exemplify honest public ser"ice. The personal beha"ior of a Iudge, both in the performance of official duties and in pri"ate life should be abo"e suspicion. O5P 9erily, no position is more demanding as regards moral righteousness and uprightness of any indi"idual than a seat on the 'ench. +ithin the hierarchy of courts, trial courts stand as an important and "isible symbol of go"ernment, especially considering that as opposed to appellate courts, trial court Iudges are those directly in contact with the parties, their counsel and the communities which the >udiciary is bound to ser"e. ;ccupying as he does an exalted position in the administration of Iustice, a Iudge must pay a high price for the honor bestowed upon him. Thus, the Iudge must comport himself at all times in such a manner that his conduct, official or otherwise, can bear the most searching scrutiny of the public that loo&s up to him

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as the epitome of integrity and Iustice.O3P In insulating the 'ench from unwarranted criticism, thus preser"ing our democratic way of life, it is essential that Iudges, li&e CaesarRs wife, should be abo"e suspicion. That the acts complained of were committed within respondentVs sanctum in his court and without any third party to witness the commission li&ewise compounded the reprehensible nature of respondentVs malfeasance. 'y daring to "iolate complainant within the sanctity and secrecy of his chambers, respondent did the utmost "iolence to complainant within a place which, properly "iewed, is an integral part of a temple of Iustice .. in his court. @espondent Iudge li&ewise "iolated Canon 66 of the Code of >udicial $thics which exhorts a Iudge to be Ustudiously careful himself to a"oid e"en the slightest infraction of the law, lest it be a demoralizing example to others.U In De la Pa7 v. /nutan,O2P we held that the Iudge is the "isible representation of the law and, more importantly, of Iustice. *rom him, people draw their will and awareness to obey the law. They see in him an intermediary of Iustice between two conflicting interests. Thus, for the Iudge to earn and reciprocate the respect, he must be the first to abide by the law and wea"e an example for others to follow. As such, he should be studiously careful to a"oid e"en the slightest infraction of the law. Indeed, when a Iudge himself becomes a transgressor of any law which he is sworn to apply in appropriate cases before him, or before any court for that matter, as where he commits any crime punished by the @e"ised enal Code or special laws, he places his office in disrepute, encourages disrespect for the law and impairs public confidence in the integrity of the >udiciary itself, as well as the legal system. 'efore closing, it is apropos to discuss the implications of the enactment of @.A. Do. 3233 O1P or the Anti.#exual %arassment Law to the >udiciary. Fnder our system of go"ernance, the "ery tenets of our republican democracy presuppose that the will of the people is expressed, in large part, through the statutes passed by the Legislature. Thus, the Court, in instances such as these, may ta&e Iudicial notice of the heightened sensiti"ity of the people to gender.related issues as manifested through legislati"e issuances. It would not be remiss to point out that no less than the Constitution itself has expressly recognized the in"aluable contributions of the women(s sector to national de"elopment,O04P thus the need to pro"ide women with a wor&ing en"ironment conduci"e to producti"ity and befitting their dignity.O00P In the community of nations, there was a time when discrimination was institutionalized through the legalization of now prohibited practices. Indeed, e"en within this century, persons were discriminated against merely because of gender, creed or the color of their s&in, to the extent that the "alidity of human beings being treated as mere chattel was Iudicially upheld in other Iurisdictions. 'ut in humanity(s march towards a more refined sense of ci"ilization, the law has stepped in and seen it fit to condemn this type of conduct for, at bottom, history re"eals that the mo"ing force of ci"ilization has been to realize and secure a more humane existence. Fltimately, this is what humanity as a whole see&s to attain as we stri"e for a better 8uality of life or higher standard of li"ing. Thus, in our nation(s "ery recent history, the people ha"e spo&en, through Congress, to deem conduct constituti"e of sexual harassment or hazing, O06P acts pre"iously considered harmless by custom, as criminal. In disciplining erring Iudges and personnel of the >udiciary then, this Court can do no less. lainly, respondentVs conduct against complainant, a woman young enough to be his daughter or niece, "iolated numerous Canons of Iudicial decorum. @espondent(s indiscretions may be deemed, for the lac& of more forceful and emphatic words, gra"e misconduct, conduct unbecoming of an officer of the >udiciary and conduct preIudicial to the best interests of the ser"ice. The penalty of suspension from office, without pay, for one ,0/ year is in order, this being his first offense. If only to underscore respondent(s temerity, he e"en attempted to insult the intelligence of this Court and its !embers by claiming ill moti"e on the part of complainant in filing this suit, but the folly of his charge was so readily exposed by >ustice 'rawner.

B.EREFORE, for "iolations of Canon 6 of the Code of >udicial Conduct and Canons = and 66 of the Code of >udicial $thics which amount to gra"e misconduct, conduct becoming an officer of the >udiciary and conduct preIudicial to the best interests of the ser"ice, respondent >udge E2DARL*O 4. VALEN)*A, residing >udge, 'ranch 666 ,Buezon City/, Dational Capital >udicial @egion, is +2+/ENDED from the office, without pay, for ;D$ ,0/ C$A@, with the period of pre"enti"e suspension he has thus ser"ed so far being credited to him in the ser"ice of said penalty. +O ORDERED. G.R. No. 1CE6EC. M"rc 6, :EE: DR. R*)O +. 9A)20*N, petitioner, vs. /EO/LE OF 0.E /.*L*//*NE+, respondent. V*02G, J.> In an accusatory Information, dated 66 >uly 0115, petitioner, City %ealth ;fficer @ico >acutin of Cagayan de ;ro City, was charged before the #andiganbayan, *ourth )i"ision, with the crime of #exual %arassment, thusly< HThat sometime on or about 40 )ecember 0117, in Cagayan de ;ro City, and within the Iurisdiction of this %onorable Court pursuant to the pro"isions of @A 3137, the accused, a public officer, being then the City %ealth ;fficer of Cagayan de ;ro City with salary grade 65 but a high ran&ing official by express pro"ision of @A 3137, committing the offense in relation to his official functions and ta&ing ad"antage of his position, did there and then, willfully, unlawfully and criminally, demand, solicit, re8uest sexual fa"ors from !s. >uliet B. Cee, a young 66 year.old woman, single and fresh graduate in 'achelor of #cience in Dursing who was see&ing employment in the office of the accused, namely< by demanding from !s. Cee that she should, expose her body and allow her pri"ate parts to be mashed and stimulated by the accused, which sexual fa"or was made as a condition for the employment of !s. Cee in the *amily rogram of the ;ffice of the accused, thus constituting sexual harassment.JO0P Fpon his arraignment, petitioner pled not guilty to the offense chargedA hence, trial proceeded. >uliet B. Cee, then a 66.year old fresh graduate of nursing, a"erred that on 62 Do"ember 0117 her father accompanied her to the office of petitioner at the City %ealth ;ffice to see& employment. >uliet(s father and petitioner were childhood friends. >uliet was informed by the doctor that the City %ealth ;ffice had Iust then filled up the "acant positions for nurses but that he would still see if he might be able to help her. The following day, 61 Do"ember 0117, >uliet and her father returned to the City %ealth ;ffice, and they were informed by petitioner that a medical group from Texas, F.#.A., was coming to town in )ecember to loo& into putting up a clinic in Lapasan, Cagayan de ;ro, where she might be considered. ;n 40 )ecember 0117, around nine o(cloc& in the morning, she and her father went bac& to the office of petitioner. The latter informed her that there was a "acancy in a family planning proIect for the city and that, if she were interested, he could inter"iew her for the Iob. etitioner then started putting up to her a number of 8uestions. +hen as&ed at one point whether or not she already had a boyfriend, she said Hno.J etitioner suggested that perhaps if her father were not around, she could afford to be honest in her answers to the doctor. The father, ta&ing the cue, decided to lea"e. etitioner then in8uired whether she was still a "irgin, explaining to her his theory on the "arious aspects of "irginity. %e HhypotheticallyJ as&ed whether she would tell her family or friends if a male friend happened to intimately touch her. etitioner later offered her the Iob where she would be the subIect of a HresearchJ program. #he was re8uested to be bac& after lunch. 'efore proceeding to petitioner(s office that afternoon, >uliet dropped by at the nearby church to see& di"ine guidance as she felt so Hconfused.J +hen she got to the office, petitioner made se"eral telephone Page82

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calls to some hospitals to in8uire whether there was any a"ailable opening for her. Dot finding any, petitioner again offered her a Iob in the family planning research underta&ing. #he expressed hesitation if a physical examination would include HhuggingJ her but petitioner assured her that he was only &idding about it. etitioner then in"ited her to go bowling. etitioner told her to meet him at 'orIa #treet so that people would not see them on board the same car together. #oon, at the designated place, a white car dri"en by petitioner stopped. #he got in. etitioner held her pulse and told her not to be scared. After dropping by at his house to put on his bowling attire, petitioner got bac& to the car. +hile dri"ing, petitioner casually as&ed her if she already too& her bath, and she said she was so in a hurry that she did not find time for it. etitioner then in8uired whether she had "aricose "eins, and she said Hno.J etitioner told her to raise her foot and lower her pants so that he might confirm it. #he felt assured that it was all part of the research. etitioner still pushed her pants down to her &nees and held her thigh. %e put his hands inside her panty until he reached her pubic hair. #urprised, she exclaimed Hhala ka^J and instincti"ely pulled her pants up. etitioner then touched her abdomen with his right hand saying words of endearment and letting the bac& of his palm touch her forehead. %e told her to raise her shirt to chec& whether she had nodes or lumps. #he hesitated for a while but, e"entually, raised it up to her na"el. etitioner then fondled her breast. #hoc&ed at what petitioner did, she lowered her shirt and embraced her bag to co"er herself, telling him angrily that she was through with the research. %e begged her not to tell anybody about what had Iust happened. 'efore she alighted from the car, petitioner urged her to reconsider her decision to 8uit. %e then handed o"er to her =44.44 for her expenses. Arri"ing home, she told her mother about her meeting with )r. >acutin and the money he ga"e her but she did not gi"e the rest of the story. %er mother scolded her for accepting the money and instructed her to return it. In the morning of 4- )ecember 011-, >uliet repaired to the clinic to return the money to petitioner but she was not able to see him until about one o(cloc& in the afternoon. #he tried to gi"e bac& the money but petitioner refused to accept it. A wee& later, >uliet told her sister about the incident. ;n 05 )ecember 0117, she attempted to slash her wrist with a fastener right after relating the incident to her mother. Doticing that >uliet was suffering from some psychological problem, the family referred her to )r. !erlita Adaza for counseling. )r. Adaza would later testify that >uliet, together with her sister, came to see her on 60 )ecember 0117, and that >uliet appeared to be emotionally disturbed, blaming herself for being so stupid as to allow )r. >acutin to molest her. )r. Adaza concluded that >uliet(s frustration was due to post trauma stress. etitioner contradicted the testimony of >uliet Cee. %e claimed that on 62 Do"ember 0117 he had a couple of people who went to see him in his office, among them, >uliet and her father, at. >ustin Cee, who was a boyhood friend. +hen it was their turn to tal& to petitioner, at. Cee introduced his daughter >uliet who expressed her wish to Ioin the City %ealth ;ffice. etitioner replied that there was no "acancy in his office, adding that only the City !ayor really had the power to appoint city personnel. ;n 40 )ecember 0117, the afternoon when the alleged incident happened, he was in a meeting with the Committee on Awards in the ;ffice of the City !ayor. ;n 4- )ecember 0117, when >uliet said she went to his office to return the =44.44, he did not report to the office for he was scheduled to lea"e for )a"ao at 6<=7 p.m. to attend a hearing before the ;ffice of the ;mbudsman for !indanao. %e submitted in e"idence a photocopy of his plane tic&et. %e asserted that the complaint for sexual harassment, as well as all the other cases filed against him by 9i"ian Cu, Iryn #alcedo, !ellie 9illanue"a and amela @odis, were but forms of political harassment directed at him. The #andiganbayan, through its *ourth )i"ision, rendered its decision, dated 47 Do"ember 0111, penned by !r. >ustice @odolfo :. alattao, finding the accused, )r. @ico >acutin, guilty of the crime of #exual %arassment under @epublic Act Do. 3233. The #andiganbayan concluded<

H+%$@$*;@$, Iudgment is hereby rendered, convictin% the accused @IC; >ACFTID C #ALC$); of the crime of #exual %arassment, defined and punished under @.A. Do. 3233, particularly #ecs. = and 3 of the same Act, properly &nown as the Anti.#exual %arassment Act of 0117, and is hereby sentenced to suffer the penalty of imprisonment of six ,5/ months and to pay a fine of Twenty Thousand , 64,444.44/ esos, with subsidiary imprisonment in case of insol"ency. Accused is further ordered to indemnify the offended party in the amount of Three %undred Thousand , =44,444.44/ esos, by way of moral damagesA Two %undred Thousand , 644,444.44/ esos, by way of $xemplary damages and to pay the cost of suit.JO6P In the instant recourse, it is contended that . HI. etitioner cannot be con"icted of the crime of sexual harassment in "iew of the inapplicability of @epublic Act Do. 3233 to the case at bar. HII. etitioner Ohas beenP denied x x x his constitutional right to due process of law and presumption of innocence on account of the insufficiency of the prosecution e"idence to sustain his con"iction.J O=P The abo"e contentions of petitioner are not meritorious. #ection = of @epublic Act 3233 pro"ides< H#$C. =. +or&, $ducation or Training.related #exual %arassment )efined. T +or&, education or training. related sexual harassment is committed by an employer, employee, manager, super"isor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, ha"ing authority, influence or moral ascendancy o"er another in a wor& or training or education en"ironment, demands, re8uests or otherwise re8uires any sexual fa"or from the other, regardless of whether the demand, re8uest or re8uirement for submission is accepted by the obIect of said Act. H,a/ In a wor&.related or employment en"ironment, sexual harassment is committed when< H,0/ The sexual fa"or is made as a condition in the hiring or in the employment, re.employment or continued employment of said indi"idual, or in granting said indi"idual fa"orable compensation, terms, conditions, promotions, or pri"ilegesA or the refusal to grant the sexual fa"or results in limiting, segregating or classifying the employee which in any way would discriminate, depri"e or diminish employment opportunities or otherwise ad"ersely affect said employee.J etitioner was the City %ealth ;fficer of Cagayan de ;ro City, a position he held when complainant, a newly graduated nurse, saw him to enlist his help in her desire to gain employment. %e did try to show an interest in her plight, her father being a boyhood friend, but finding no opening suitable for her in his office, he as&ed her about accepting a Iob in a family planning research proIect. It all started from thereA the #andiganbayan recited the rest of the story< Hx x x. #ucceeding in con"incing the complainant that her physical examination would be a part of a research, accused as&ed complainant if she would agree that her pri"ate parts ,bolts/ would be seen. Accused assured her that with her cooperation in the research, she would gain &nowledge from it. As complainant loo&ed upon the accused with utmost re"erence, respect, and paternal guidance, she agreed to undergo the physical examination. At this Iuncture, accused abruptly stopped the inter"iew and told the complainant to go home and be bac& at 6<44 o(cloc& in the afternoon of the same day, )ecember 0, 0117. Complainant returned at 6<44 o(cloc& in the afternoon, but did not proceed immediately to the office of the accused, as she dropped by a nearby church to as& di"ine guidance, as she was confused and at a loss on how to resol"e her present predicament. At =<44 o(cloc& in the afternoon, she went bac& to the office of

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the accused. And once inside, accused called up a certain !adonna, in8uiring if there was a "acancy, but he was told that she would only accept a registered nurse. Complainant was about to lea"e the office of the accused when the latter pre"ailed upon her to stay because he would call one more hospital. In her presence, a call was made. 'ut again accused told her that there was no "acancy. As all efforts to loo& for a Iob in other hospitals failed, accused renewed the offer to the complainant to be a part of the research in the *amily lanning rogram where there would be physical examination. Thereafter, accused motioned his two ,6/ secretaries to go out of the room. Fpon mo"ing closer to the complainant, accused as&ed her if she would agree to the offer. Complainant told him she would not agree because the research included hugging. %e then assured her that he was Iust &idding and that a pre.schooler and high schooler ha"e already been subIected to such examination. +ith assurance gi"en, complainant changed her mind and agreed to the research, for she is now con"inced that she would be of help to the research and would gain &nowledge from it. At this point, accused as&ed her if she was a Ntomboy(, she answered in the negati"e. %e then instructed her to go with him but he would first play bowling, and later proceed with the research ,physical examination/. ;n the understanding of the complainant that they will proceed to the clinic where the research will be conducted, she agreed to go with the accused. 'ut accused instructed her to proceed to 'orIa #t. where she will Iust wait for him, as it was not good for people to see them riding in a car together. #he wal&ed from the office of the accused and proceeded to 'orIa #t. as instructed. And after a while, a white car arri"ed. The door was opened to her and she was instructed by the accused to come inside. Inside the car, he called her attention why she was in a pensi"e mood. #he retorted she was not. As they were seated side by side, the accused held her pulse and told her not to be scared. %e informed her that he would go home for a while to put on his bowling attire. After a short while, he came bac& inside the car and as&ed her if she has ta&en a bath. #he explained that she was not able to do so because she left the house hurriedly. #till while inside the car, accused directed her to raise her foot so he could see whether she has "aricose "eins on her legs. Thin&ing that it was part of the research, she did as instructed. %e told her to raise it higher, but she protested. %e then instructed her to lower her pants instead. #he did lower her pants, exposing half of her legs. 'ut then the accused pushed it forward down to her &nees and grabbed her legs. %e told her to raise her shirt. *eeling as if she had lost control of the situation, she raised her shirt as instructed. #hoc&ed, she exclaimed, Nhala &a^( because he tried to insert his hand into her panty. Accused then held her abdomen, saying, Nyou are li&e my daughter, N)ay(^ ,9isayan word of endearment/,( and let the bac& of his palm touch her forehead, indicating the traditional way of ma&ing the young respect their elders. %e again told her to raise her shirt. *eeling embarrassed and uncomfortable, yet unsure whether she was entertaining malice, she raised her shirt up to her breast. %e then fondled her breast. @eacting, she impulsi"ely lower her shirt and embraced her bar while silently as&ing :od what was happening to her and as&ing the courage to resist accused(s physical ad"ances. After a short while, she as&ed him if there could be a right place for physical examination where there would be many doctors. %e Iust exclaimed, Nso you li&e that there are many doctors^( Then he as&ed her if she has tooth decay. Thin&ing that he was planning to &iss her, she answered that she has lots of decayed teeth. %e ad"ised her then to ha"e them treated. *inally, she informed him that she would not continue with the research. The accused retorted that complainant was entertaining malice and reminded her of what she earlier agreedA that she would not tell anybody about what happened. %e then promised to gi"e her 07,444.44 so that she could ta&e the examination. #he was about to open the door of the car when he suddenly grabbed her thigh, but this time, complainant instantly parried his hand with her bag.JO-P +hile the City !ayor had the exclusi"e prerogati"e in appointing city personnel, it should stand to reason, ne"ertheless, that a recommendation from petitioner in the appointment of personnel in the municipal health office could carry good weight. Indeed, petitioner himself would appear to ha"e con"eyed, by his words and actions, an impression that he could facilitate >uliet(s employment. Indeed, petitioner would not ha"e been able to ta&e undue liberalities on the person of >uliet had it not been for his high position in the City %ealth ;ffice of Cagayan de ;ro City. The findings of the #andiganbayan were bolstered by the testimony of 9i"ian Cu, petitioner(s secretary between 0131 to 011-, of Iryn Lago #alcedo, ublic

%ealth Durse II, and of *arah )ongallo y Al&uino, a city health nurse, all of whom were said to ha"e li&ewise been "ictims of per"erse beha"ior by petitioner. The #andiganbayan rightly reIected the defense of ali"i proffered by petitioner, i.e., that he was at a meeting of the Committee on AwardsA the court a quo said< HThere are some obser"ations which the Court would li&e to point out on the e"idence adduced by the defense, particularly in the !inutes of the meeting of the Awards Committee, as testified to by witness !yrna !aagad on #eptember 2, 0112. H*irst, admitted, Teresita I. @ozabal was the immediate super"isor of witness !yrna !aagad. The Dotices to hold the meeting ,$xh. N=.A( and N=.'(/ were signed by Teresita @ozabal. 'ut the !inutes of the meeting, $xh. N7(, was signed by !yrna !aagad and not by Teresita @ozabal. The documents, $xhs. N=.A( and N=.'( certify that the officially designated secretary of the Awards Committee was Teresita @ozabal. H#econd, why was !yrna !aagad in possession of the attendance logboo& and how was she able to personally bring the same in court when she testified on #eptember 2, 0112, when in fact, she admitted during her testimony that she retired from the go"ernment ser"ice on )ecember 0, 0113M #urely, !yrna !aagad could not still be the custodian of the logboo& when she testified. HAnd finally, in the logboo&, under the sub.heading, N;thers resent,( the attendance of those who attended was indi"idually handwritten by the persons concerned who wrote and signed their names. 'ut in the case of )r. Tiro and )r. @ico >acutin, their names were handwritten by cler& #yl"ia Tan.Derry, not by )r. Tiro and )r. >acutin. %owe"er, !yrna !aagad testified that the logboo& was passed around to attending indi"iduals inside the conference room.JO7P !ost importantly, the #upreme Court is not a trier of facts, and the factual findings of the #andiganbayan must be respected by, if not indeed conclusi"e upon, the tribunal, O5P no cogent reasons ha"ing been sufficiently shown to now hold otherwise. The assessment on the credibility of witnesses is a matter best left to the trial court because of its uni8ue position of being able to obser"e that elusi"e and incommunicable e"idence on the deportment of witnesses at the stand, an opportunity that is denied the appellate court.O3P Conformably with pre"ailing Iurisprudence, the grant of moral and exemplary damages by the #andiganbayan must be tempered to reasonable le"els. !oral damages are not intended to enrich a complainant but are awarded only to enable an inIured party obtain some means that would help ob"iate the sufferings sustained on account of the culpable action of an offender. Its award must not appear to be the result of passion or undue preIudice,O2P and it must always reasonably approximate the extent of inIury and be proportional to the wrong committed. Indeed, >uliet should be recompensed for her mental anguish. )r. !erlita *. Adaza, a psychological counseling expert, has found >uliet to be emotionally and psychologically disturbed and suffering from post trauma stress following her unpleasant experience with petitioner. The Court finds it fitting to award in fa"or of >uliet Cee =4,444.44 moral damages. In addition, she should be entitled to 64,444.44 exemplary damages to ser"e as a deterrent against, or as a negati"e incenti"e to curb, socially deleterious actions.O1P B.EREFORE, the 8uestioned decision of the #andiganbayan in Criminal Case Do. 6=311, finding )r. @ico >acutin y #alcedo :FILTC of the crime of #exual %arassment defined and punished under @epublic Act Do. 3233, particularly #ections = and 3 thereof, and penalizing him with imprisonment of six ,5/ months and to pay a fine of Twenty Thousand , 64,444.44/ esos, with subsidiary imprisonment in case of insol"ency, is A**I@!$). The #andiganbayan(s award of moral and exemplary damages are !;)I*I$)A

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instead, petitioner is ordered to indemnify the offended party, >uliet Cee, in the amount of =4,444.44 and 64,444.44 by way of, respecti"ely, moral damages and exemplary damages. Costs against petitioner. +O ORDERED.

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