BAYANI VS PANAY ELECTRIC COOP.

(PECO) GR 139680 APR 12, 2000

TORTS/II-INTENTIONAL TORTS/HUMAN RELATIONS/CATCH ALL PROVISIONS/ILLEGAL DISMISSAL

FACTS PECO discontinued supplying electrical services to two pension houses owned by Bayani on the ground
that the latter had been stealing electricity in said establishments. Subsequently, PECO filed 2 criminal complaints
against Bayani for violation of RA 7832. The City Prosecutor dismissed the complaint. Hence, PECO appealed with
the Sec of Justice.
Bayani filed an action for damages arising from malicious prosecution. (The RTC also approved Bayanis petition for
the issuance of a writ of preliminary mandatory injunction for PECO to restore electricity to said pension houses after
putting up a surety bond. RTC also approved Bayanis motion to substitute said surety with a cashiers check.)
PECO, in a petition for certiorari, sought, among others, to have the civil case dismissed.

Meanwhile, the secretary of justice upheld the prosecutors decision to dismiss the criminal complaint against
Bayani.
Later, the CA dismissed the civil case instituted by Bayanai against PECO on the ground of prematurity since
one of the elements of malicious prosecution, that of the final termination of the criminal action resulting in
acquittal, was absent. Hence, this petition by Bayani.
ISSUE: Was the civil case prematurely filed?
HELD - Petitioner faults respondent court for finding that his complaint in Civil Case No. 23276 was one for malicious
prosecution. Petitioner insists that its complaint was based on other causes of action, independent from malicious
prosecution. He alleged in particular, that by summarily disconnecting electrical service to petitioner's business
establishments, PECO violated Articles 19 6 and 21 7 of the Civil Code.
A review of petitioner's Amended Complaint, 8 however, clearly shows that petitioner's allegations deal mainly with the
criminal complaints instituted by PECO against petitioner for violating R.A. No. 7832. In addition to damages,
petitioner had sought a prohibitory injunction to prohibit private respondent from making "false imputations that
plaintiff allegedly continued to commit violations" of R.A. No. 7832." 9 What determines the nature of an action are the
allegations in the complaint and the character of the relief sought. 10 Conformably, no reversible error was committed
by the Court of Appeals in finding that petitioner's action was one based on malicious prosecution.
There is malicious prosecution when a person directly insinuates or imputes to an innocent person the commission of
a crime and the maliciously accused is compelled to defend himself in court. 11 While generally associated with
unfounded criminal actions, "the term has been expanded to include unfounded civil suits instituted just to vex and
humiliate the defendant despite the absence of a cause of action or probable cause." 12 The basis for a civil action for
damages arising from malicious prosecution is found in Articles 19, 21, 29, 13 35, 14 of the Civil Code.
The requisites for an action for damages based on malicious prosecution are: (1) 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 acquittal;
(2) that in bringing the action, the prosecutor acted without probable cause; and (3) the prosecutor was actuated or
impelled by legal malice. 15 Considering the facts in this case, we agree with the respondent appellate court that one
of the elements for an action based on malicious prosecution, the element of final termination of the action resulting
in an acquittal, was absent at the time petitioner filed Civil Case No. 23276. The records show that petitioner's action
for injunction and damages was filed on October 10, 1996, whereas the Secretary of Justice dismissed with finality
PECO's criminal complaints against herein petitioner only on March 4, 1998. Hence, Civil Case No. 23276 was
prematurely filed

Prudential Bank, petitioner

vs.
Court of Appeals et al., respondents
FACTS
Leticia Tupasi-Valenzuela opened Savings Account No. 5744 and Current Account No.
01016-3 in the Valenzuela Branch of petitioner Prudential Bank, with automatic transfer of funds
from the savings account to the current account.
On June 1, 1988, Leticia Tupasi-Valenzuela deposited in her savings account Check No. 666B
(104561 of even date) the amount of P35,271.60, drawn against the Philippine Commercial
International Bank (PCIB). Taking into account that deposit and a series of withdrawals, Leticia
Tupasi-Valenzuela as of June 21, 1988 had a balance of P35,993.48 in her savings account and
P776.93 in her current account, or total deposits of P36,770.41, with Prudential Bank.
Thereafter, Leticia Tupasi-Valenzuela issued Prudential Bank Check No. 983395 in the amount
of P11,500.00 post-dated June 20, 1988, in favor of one Belen Legaspi. It was issued to Legaspi
as payment for jewelry which private respondent had purchased. Legaspi, who was in jewelry
trade, endorsed the check to one Philip Lhuillier, a businessman also in the jewelry business.
When Lhuillier deposited the check in his account with the PCIB, Pasay Branch, it was
dishonored for being drawn against insufficient funds. Lhuillier's secretary informed the
secretary of Legaspi of the dishonor. The latter told the former to redeposit the check. Legaspi's
secretary tried to contact private respondent but to no avail.
Upon her return from the province, Leticia Tupasi-Valenzuela was surprised to learn of the
dishonor of the check. She went to the Valenzuela Branch of Prudential Bank on July 4, 1988, to
inquire why her check was dishonored. She approached one Albert Angeles Reyes, the officer
in charge of current account, and requested him for the ledger of her current account. Private
respondent discovered a debit of P300.00 penalty for the dishonor of her Prudential Check No.
983395. She asked why her check was dishonored when there were sufficient funds in her
account as reflected in her passbook. Reyes told her that there was no need to review the
passbook because the bank ledger was the best proof that she did not have sufficient funds.
Then, he abruptly faced his typewriter and started typing.
Later, it was found out that the check in the amount of P35,271.60 deposited by Leticia TupasiValenzuela on June 1, 1988, was credited in her savings account only on June 24, 1988, or
after a period of 23 days. Thus the P11,500.00 check was redeposited by Lhuillier on June 24,
1988, and properly cleared on June 27, 1988.
Because of this incident, the bank tried to mollify Leticia Tupasi-Valenzuela by explaining to
Legaspi and Lhuillier that the bank was at fault. Since this was not the first incident Leticia
Tupasi-Valenzuela had experienced with the bank, she was unmoved by the bank's apologies
and she commenced the present suit for damages before the RTC of Valenzuela.

After trial, the court rendered a decision on August 30, 1991, dismissing the complaint of Leticia
Tupasi-Valenzuela, as well as the counterclaim filed by the defendant, now petitioner.
Undeterred, Leticia Tupasi-Valenzuela appealed to the Court of Appeals. On January 31, 1996,
the Court of Appeals rendered a decision in her favor, setting aside the trial court's decision and
ordering herein petitioner to pay private respondent the sum of P100,000.00 by way of moral
damages; P50,000.00 exemplary damages; P50,000.00 for and as attorney's fees; and to pay
the costs. Petitioner filed a timely motion for reconsideration but it was denied.
ISSUE
Whether or not the Court of Appeals has erred and gravely abused its discretion in
awarding moral and exemplary damages and attorney's fees to be paid by Prudential Bank to
Leticia Tupasi-Valenzuela
HELD
No. Admittedly, as found by both the respondent appellate court and the trial court, petitioner
bank had committed a mistake. It misposted private respondent's check deposit to another
account and delayed the posting of the same to the proper account of the private respondent.
The mistake resulted to the dishonor of the private respondent's check.
In cases decided by the Supreme Court, it ruled that In every case, the depositor expects
the bank to treat his account with the utmost fidelity, whether such account consists only
of a few hundred pesos or of millions. The bank must record every single transaction
accurately, down to the last centavo, and as promptly as possible. This has to be done if
the account is to reflect at any given time the amount of money the depositor can
dispose of as he sees fit, confident that the bank will deliver it as and to whomever he
directs. A blunder on the part of bank, such as the dishonor of a check without good
reason, can cause the depositor not a little embarrassment if not also financial loss and
perhaps even civil and criminal litigation. The point is that as a business affected with public
interest and because of the nature of its functions, the bank is under obligation to treat the
account of its depositors with meticulous care, always having in mind the fiduciary nature of
their relationship.
The Prudential bank's negligence was the result of lack of due care and caution required of
managers and employees of a firm engaged in so sensitive and demanding business as
banking. Accordingly, the award of moral damages by the respondent Court of Appeals could
not be said to be in error nor in grave abuse of its discretion.
WHEREFORE, the assailed DECISION of the Court of Appeals is hereby AFFIRMED, with
MODIFICATION. Cost against the petitioner.
DOCTRINE

"A bank is under obligation to treat the accounts of its depositors with meticulous care
whether such account consists only of a few hundred pesos or of millions of pesos.
Responsibility arising from negligence in the performance of every kind of obligation is
demandable. While petitioner's negligence in this case may not have been attended with
malice and bad faith, nevertheless, it caused serious anxiety, embarrassment and
humiliation". Hence we ruled that the offended party in said case was entitled to recover
reasonable moral damages.
Case: ABS-CBN BROADCASTING CORP. v. CA, REPUBLIC BROADCASTING CORP., VIVA
PRODUCTIONS, INC., and VICENTE DEL ROSARIO (301 SCRA 589)
Date: January 21, 1999
Ponente: C.J. Davide, Jr.
Facts:
In 1990, ABS-CBN and VIVA executed a Film Exhibition Agreement whereby
VIVA gave ABS-CBN an exclusive right to exhibit some VIVA films. According to the
agreement, ABS-CBN shall have the right of first refusal to the next 24 VIVA films for
TV telecast under such terms as may be agreed upon by the parties, however, such
right shall be exercised by ABS-CBN from the actual offer in writing.
Sometime in December 1991, VIVA, through Vicente Del Rosario (Executive
Producer), offered ABS-CBN through VP Charo Santos-Concio, a list of 3 film
packages from which ABS-CBN may exercise its right of first refusal. ABS-CBN,
however through Mrs. Concio, tick off only 10 titles they can purchase among which
is the film Maging Sino Ka Man which is one of the subjects of the present case,
therefore, it did not accept the said list as per the rejection letter authored by Mrs.
Concio sent to Del Rosario.
Subsequently, Del Rosario approached Mrs. Concio with another list
consisting of 52 original movie titles and 104 re-runs, proposing to sell to ABS-CBN
airing rights for P60M (P30M in cash and P30M worth of television spots). Del
Rosario and ABS-CBNs General Manager, Eugenio Lopez III, met at the Tamarind
Grill Restaurant in QC to discuss the package proposal but to no avail.
Four days later, Del Rosario and Mr. Graciano Gozon, Senior VP of Finance of
Republic Broadcasting Corporation (RBS/Channel 7) discussed the terms and
conditions of VIVAs offer. A day after that, Mrs. Concio sent the draft of the contract
between ABS-CBN and VIVA which contained a counter-proposal covering 53 films
for P35M. VIVAs Board of Directors rejected the counter-proposal as it would not sell
anything less than the package of 104 films for P60M. After said rejection, ABS-CBN
closed a deal with RBS including the 14 films previously ticked off by ABS-CBN.
Consequently, ABS-CBN filed a complaint for specific performance with prayer
for a writ of preliminary injunction and/or TRO against RBS, VIVA and Del Rosario.
RTC then enjoined the latter from airing the subject films. RBS posted a P30M
counterbond to dissolve the injunction. Later on, the trial court as well as the CA
dismissed the complaint holding that there was no meeting of minds between ABSCBN and VIVA, hence, there was no basis for ABS-CBNs demand, furthermore, the
right of first refusal had previously been exercised.

Hence, the present petition, ABS-CBN argued that an agreement was made
during the meeting of Mr. Lopez and Del Rosario jotted down on a napkin (this was
never produced in court). Moreover, it had yet to fully exercise its right of first
refusal since only 10 titles were chosen from the first list. As to actual, moral and
exemplary damages, there was no clear basis in awarding the same.
Issue: WON a contract was perfected between ABS-CBN and VIVA and WON moral
damages may be awarded to a corporation
Held: Both NO.
Ratio:
Contracts that are consensual in nature are perfected upon mere meeting of
the minds. Once there is concurrence between the offer and the acceptance upon
the subject matter, consideration, and terms of payment a contract is
produced. The offer must be certain. To convert the offer into a contract, the
acceptance must be absolute and must not qualify the terms of the offer; it must be
plain, unequivocal, unconditional, and without variance of any sort from the
proposal. A qualified acceptance, or one that involves a new proposal, constitutes a
counter-offer and is a rejection of the original offer. Consequently, when something
is desired which is not exactly what is proposed in the offer, such acceptance is not
sufficient to generate consent because any modification or variation from the terms
of the offer annuls the offer.
After Mr. Del Rosario of Viva met Mr. Lopez of ABS-CBN to discuss the package
of films, ABS-CBN, sent through Ms. Concio, counter-proposal in the form a draft
contract. This counter-proposal could be nothing less than the counter-offer of Mr.
Lopez during his conference with Del Rosario. Clearly, there was no acceptance of
VIVAs offer, for it was met by a counter-offer which substantially varied the terms of
the offer.
In the case at bar, VIVA through its Board of Directors, rejected such
counter-offer. Even if it be conceded arguendo that Del Rosario had
accepted the counter-offer, the acceptance did not bind VIVA, as there was
no proof whatsoever that Del Rosario had the specific authority to do so.
Under the Corporation Code, unless otherwise provided by said
Code, corporate powers, such as the power to enter into contracts, are
exercised by the Board of Directors. However, the Board may delegate
such powers to either an executive committee or officials or contracted
managers. The delegation, except for the executive committee, must be
for specific purposes. Delegation to officers makes the latter agents of the
corporation; accordingly, the general rules of agency as to the binding effects of
their acts would apply. For such officers to be deemed fully clothed by the
corporation to exercise a power of the Board, the latter must specially authorize
them to do so. That Del Rosario did not have the authority to accept ABSCBNs counter-offer was best evidenced by his submission of the draft

contract to VIVAs Board of Directors for the latters approval. In any

event, there was between Del Rosario and Lopez III no meeting of minds.
The testimony of Mr. Lopez and the allegations in the complaint are clear
admissions that what was supposed to have been agreed upon at the Tamarind Grill
between Mr. Lopez and Del Rosario was not a binding agreement. It is as it
should be because corporate power to enter into a contract is lodged in
the Board of Directors. (Sec. 23, Corporation Code). Without such board
approval by the Viva board, whatever agreement Lopez and Del Rosario
arrived at could not ripen into a valid contact binding upon Viva.
However, the Court find for ABS-CBN on the issue of damages. Moral
damages are in the category of an award designed to compensate the claimant for
actual injury suffered and not to impose a penalty on the wrongdoer. The award of
moral damages cannot be granted in favor of a corporation because, being
an artificial person and having existence only in legal contemplation, it
has no feelings, no emotions, no senses. It cannot, therefore, experience
physical suffering and mental anguish, which can be experienced only by
one having a nervous system. The statement that a corporation may recover
moral damages if it has a good reputation that is debased, resulting in social
humiliation is an obiter dictum. On this score alone the award for damages must
be set aside, since RBS is a corporation.

G.R. No. L-16396

January 31, 1963

HEIRS OF BASILISA JUSTIVA, namely, LEON GREGORIOS, DOLORES

GREGORIOS,
TRINIDAD GREGORIOS, DELFIN GREGORIOS, LOLITA GREGORIOS,
for herself and as guardian ad litem of the heirs of the deceased LUCIO GREGORIOS,
the minors NIMFA GREGORIOS, PERLA GREGORIOS, ANTONIO GREGORIOS,
and ROSINI GREGORIOS, petitioners,
vs.
JESUS GUSTILO, PURIFICACION GUSTILO and THE COURT OF APPEALS (3rd
Division), respondents

Claro M. Recto for petitioners.

Leon P. Gellada for respondents.
BENGZON, C.J.:
This is a petition for review of that part of the decision of the Court of Appeals awarding to the
spouses Jesus Gustilo and Purificacion Gustilo, attorney's fees plus moral and actual damages.
It appears that in December, 1952, petitioners filed against said spouses a complaint for the
annulment of two deeds of sale executed in their favor by Isidra Justiva, of whom plaintiffs
claimed to be the legal heirs. They alleged that Isidra Justiva had signed said deeds because of
insidious words and machinations of the Gustilo spouses. Later, the complaint was amended in
September, 1954, to assert as basis therefor that the same defendants "had fraudulently
transferred in their names said two parcels of land belonging to Isidra Justiva without her
knowledge and consent, taking advantage of her credulity, ignorance and illiteracy, and abusing
the absolute confidence and trust she reposed on them." Again in June, 1955, petitioners
amended their complaint to add another ground of action, namely, that the signatures of Isidra
Justiva were forgeries.
Denying the charges, the defendant spouses prayed in their counterclaim for moral damages in
the amount of P10,000.00, attorney's fees in the amount of P2,000.00, and exemplary damages in
the amount of P5,000.00.
Dismissing the complaint, the court sentenced the plaintiffs (above petitioners) to pay defendants
(herein respondents) P2,000.00 for moral damages, P1,000.00 for actual damages and P2,000.00
for attorney's fees.
On appeal, the Court of Appeals affirmed the court's decision in toto.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and
approved by this Honorable Court, without prejudice to the parties adducing other evidence to
prove their case not covered by this stipulation of facts. 1wph1.t
Petitioners here assail the propriety and legality of the damages and attorney's fees assessed
against them. They no longer question the dismissal of their complaint.
Briefly stated, their arguments rests on the alleged absence of any finding in the decisions of the
lower court and of the Court of Appeals, that their complaint was malicious or that they had
acted in gross and evident bad faith in filing the same.
Generally, the attorney's fees are not a proper element of damages, for it is not sound policy to
set a premium on the right to litigate.1 Thus, no right to such fees can accrue merely because of

an adverse decision.2 This is precisely the rationale for taxing costs, in certain cases, against the
losing party. The payment therefor, from the viewpoint of sanction, is deemed sufficient.
Nonetheless, various exceptions are provided for by law.3 Some of these are: "In case of a clearly
unfounded civil action or preceeding" or where the Court deems it just and equitable that
attorney's fees be recovered.4
Petitioners' actuations in this case were expressly found to be insincere and baseless, by both the
Court of First Instance and the Court of Appeals. There was, therefore, no error in the award of
attorney's fees.5
For the same reason, this Court must sustain the imposition of moral damages.6 Patent indeed is
the insincerity of the petitioners' various amended complaints.
His Honor, the trial judge, F. Imperial Reyes, commented:
Antes de la demanda de fecha 13 de Diciembre de 1952, hubo otra de fecha 23 de
Octubre de 1952 (Exh. 2), la cual fue sobreseida. En aquella primera demanda sa alega
que la consideracion del otorgamiento de las dos escrituras era inadecuada o insuficiente.
Sin embargo, en la demanda de fecha 13 de Diciembre de 1952, y en las dos demandas
enmendadas, una de fecha 8 de Septiembre de 1952, y otra de fecha 7 de Junio de 1955
solo se alega que las firmas de Isidra Justiva en las dos escrituras han sido falsificadas y
si son genuinas, las mismas han sido obtenidas mediante fraude y sin ninguna
consideracion. Como se vera, la teoria en la primera demanda, que fue sobreseida ha sido
abandonada. ESTO NO HABLA BIEN DE LA SINCERIDAD DEPRETENSION DE
LOS DEMANDANTES.
And the allegation of forgery of the documents is all but a defamation, which in the light of Art.
2219(7) of the Civil Code, could by analogy be ground for payment of moral damages,
considering the wounded feelings and besmirched reputation of the defendants.
Is the award of actual damages proper? While the prayer by the respondents in their "Answer"
mentions only exemplary damages, moral damages and attorney's fees, therein also is a plea for
"such further relief ... as this Honorable Court may deem just and equitable." This prayer may
include "actual damages", if and when they are proved. It is to be observed that in the course of
the trial, defendants introduced evidence of actual damages; yet petitioners failed to object to
such presentation. Consequently, the unalleged but proved matter of actual damages may be
considered by the court. The trial judge mentioned such damages. And the Court of Appeals,
without going into specifics, approved the award, and declared explicitly that the evidence
sustained it. In this Court appellees quoted without contradiction portions of the oral evidence in
support of the judge's findings. So, the matter being factual, we must, in the circumstances,
affirm the appellate court's assessment of actual damages.

WHEREFORE, as this petition turns out to be without judicial foundation, the decision under
review is affirmed, with costs. So ordered.