UNDER PRESCRIPTION:
against the private respondent before Branch 117 of the Regional Trial
G.R. No. L-83524 October 13, 1989
ERNESTO KRAMER, JR. and MARIA KRAMER, petitioners,
vs.
HON. COURT OF APPEALS and TRANS-ASIA SHIPPING LINES,
INC., respondents.
GANCAYCO, J.:
The principal issue in this Petition for Review is whether or not a
Complaint for damages instituted by the petitioners against the private
respondent arising from a marine collision is barred by the statute of
limitations.
The record of the case discloses that in the early morning of April 8,
1976, the F/B Marjolea, a fishing boat owned by the petitioners Ernesto
Kramer, Jr. and Marta Kramer, was navigating its way from Marinduque
to Manila. Somewhere near Maricabon Island and Cape Santiago, the
boat figured in a collision with an inter-island vessel, the M/V Asia
Philippines owned by the private respondent Trans-Asia Shipping Lines,
Inc. As a consequence of the collision, the F/B Marjolea sank, taking
with it its fish catch.
After the mishap, the captains of both vessels filed their respective
marine protests with the Board of Marine Inquiry of the Philippine Coast
Guard. The Board conducted an investigation for the purpose of
determining the proximate cause of the maritime collision.
On October 19, 1981, the Board concluded that the loss of the F/B
Marjolea and its fish catch was attributable to the negligence of the
employees of the private respondent who were on board the M/V Asia
Philippines during the collision. The findings made by the Board served
as the basis of a subsequent Decision of the Commandant of the
Philippine Coast Guard dated April 29, 1982 wherein the second mate of
the M/V Asia Philippines was suspended from pursuing his profession as
a marine officer.1
On May 30, 1985, the petitioners instituted a Complaint for damages
Court in Pasay City.2 The suit was docketed as Civil Case No. 2907-P.
The private respondent filed a Motion seeking the dismissal of the
Complaint on the ground of prescription. He argued that under Article
1146 of the Civil Code, 3 the prescriptive period for instituting a
Complaint for damages arising from a quasi-delict like a maritime
collision is four years. He maintained that the petitioners should have
filed their Complaint within four years from the date when their cause of
action accrued, i.e., from April 8, 1976 when the maritime collision took
place, and that accordingly, the Complaint filed on May 30, 1985 was
instituted beyond the four-year prescriptive period.
For their part, the petitioners contended that maritime collisions have
peculiarities and characteristics which only persons with special skill,
training and experience like the members of the Board of Marine Inquiry
can properly analyze and resolve. The petitioners argued that the
running of the prescriptive period was tolled by the filing of the marine
protest and that their cause of action accrued only on April 29, 1982,
the date when the Decision ascertaining the negligence of the crew of
the M/V Asia Philippines had become final, and that the four-year
prescriptive period under Article 1146 of the Civil Code should be
computed from the said date. The petitioners concluded that inasmuch
as the Complaint was filed on May 30, 1985, the same was seasonably
filed.
In an Order dated September 25, 1986,4 the trial court denied the
Motion filed by the private respondent. The trial court observed that in
ascertaining negligence relating to a maritime collision, there is a need
to rely on highly technical aspects attendant to such collision, and that
the Board of Marine Inquiry was constituted pursuant to the Philippine
Merchant Marine Rules and Regulations, which took effect on January 1,
1975 by virtue of Letter of Instruction No. 208 issued on August 12,
1974 by then President Ferdinand E. Marcos, precisely to answer the
need. The trial court went on to say that the four-year prescriptive
period provided in Article 1146 of the Civil Code should begin to run only
from April 29, 1982, the date when the negligence of the crew of the
M/V Asia Philippines had been finally ascertained. The pertinent portions
of the Order of the trial court are as follows —
Considering that the action concerns an incident
involving a collision at sea of two vehicles and to
determine negligence for that incident there is an
absolute need to rely on highly technical aspects
attendant to such collisions. It is obviously to answer
such a need that the Marine Board of Inquiry (Sic) was
constituted pursuant to the Philippine Merchant Marine
Rules and Regulations which became effective January
1, 1975 under Letter of Instruction(s) No. 208 dated
August 12, 1974. The relevant section of that law (Art.
XVI/b/ provided as follow(s):
1. Board of Marine
Inquiry (BMI) — Shall
have the jurisdiction to
investigate marine
accidents or casualties
relative to the liability of
shipowners and officers,
exclusive jurisdiction to
investigate
cases/complaints against
the marine officers; and
to review all proceedings
or investigation
conducted by the Special
Boards of Marine
Inquiry.
2. Special Board of
Marine Inquiry. — Shall
have original jurisdiction
to investigate marine
casualties and disasters
which occur or are
committed within the
limits of the Coast Guard
District concerned or
those referred by the
Commandant.
The Court finds reason in the argument of the plaintiff
that marine incidents have those 'peculiarities which
only persons of special skill, training and exposure can
rightfully decipher and resolve on the matter of the
negligence and liabilities of parties involved and
inasmuch as the report of the Board of Inquiry (sic)
admittedly came out only on April 29, 1982, the
prescriptive period provided x x x under Art. 1146 of the
Civil Code should begin to run only from that date. The
complaint was filed with this Court on May 10, 1985,
hence the statute of limitations can not constitute a bar
to the filing of this case.5
The private respondent elevated the case to the Court of Appeals by
way of a special civil action for certiorari and prohibition, alleging therein
that the trial court committed a grave abuse of discretion in refusing to
dismiss the Complaint filed by the petitioners. The case was assigned to
the Second Division of the appellate court and was docketed as Case No.
CA-G.R. SP No. 12032.6
In a Decision dated November 27, 1987,7 and clarified in a Resolution
dated January 12, 1988,8 the Court of Appeals granted the Petition filed
by the private respondent and ordered the trial court to dismiss the
Complaint. The pertinent portions of the Decision of the appellate court
are as follows —
It is clear that the cause of action of private respondent
(the herein petitioners Ernesto Kramer, Jr. and Marta
Kramer) accrued from the occurrence of the mishap
because that is the precise time when damages were
inflicted upon and sustained by the aggrieved party and
from which relief from the court is presently sought.
Private respondents should have immediately instituted
a complaint for damages based on a quasi-delict within
four years from the said marine incident because its
cause of action had already definitely ripened at the
onset of the collision. For this reason, he (sic) could cite
the negligence on the part of the personnel of the
petitioner to exercise due care and lack of (sic) diligence
 to prevent the collision that resulted in the total loss of
their x x x boat.
We can only extend scant consideration to respondent
judge's reasoning that in view of the nature of the
marine collision that allegedly involves highly technical
aspects, the running of the prescriptive period should
only commence from the finality of the investigation
conducted by the Marine Board of Inquiry (sic) and the
decision of the Commandant, Philippine Coast Guard,
who has original jurisdiction over the mishap. For one,
while it is true that the findings and recommendation of
the Board and the decision of the Commandant may be
helpful to the court in ascertaining which of the parties
are at fault, still the former (court) is not bound by said
findings and decision. Indeed, the same findings and
decision could be entirely or partially admitted, modified,
amended, or disregarded by the court according to its
lights and judicial discretion. For another, if the accrual
of a cause of action will be made to depend on the
action to be taken by certain government agencies, then
necessarily, the tolling of the prescriptive period would
hinge upon the discretion of such agencies. Said
alternative it is easy to foresee would be fraught with
hazards. Their investigations might be delayed and lag
and then witnesses in the meantime might not be
available or disappear, or certain documents may no
longer be available or might be mislaid. ... 9
The petitioners filed a Motion for the reconsideration of the said Decision
but the same was denied by the Court of Appeals in a Resolution dated
May 27, 1988.10
Hence, the instant Petition wherein the arguments raised by the
petitioner before the trial court are reiterated.11 In addition thereto, the
petitioner contends that the Decision of the Court of Appeals 12 The
private respondent filed its Comment on the Petition seeking therein the
dismissal of the same.13 It is also contended by the private respondent
that the ruling of the Court in Vasquez is not applicable to the case at
bar because the said case involves a maritime collision attributable to a
fortuitous event. In a subsequent pleading, the private respondent
argues that the Philippine Merchant Marine Rules and Regulations
cannot have the effect of repealing the provisions of the Civil Code on
prescription of actions.14
On September 19,1988, the Court resolved to give due course to the
petition.15 After the parties filed their respective memoranda, the case
was deemed submitted for decision.
The petition is devoid of merit. Under Article 1146 of the Civil Code, an
action based upon a quasi-delict must be instituted within four (4)
years. The prescriptive period begins from the day the quasi-delict is
committed. In Paulan vs. Sarabia,16 this Court ruled that in an action for
damages arising from the collision of two (2) trucks, the action being
based on a quasi-delict, the four (4) year prescriptive period must be
counted from the day of the collision.
In Espanol vs. Chairman, Philippine Veterans Administration, 17 this
Court held as follows-
The right of action accrues when there exists a cause of
action, which consists of 3 elements, namely: a) a right
in favor of the plaintiff by whatever means and under
whatever law it arises or is created; b) an obligation on
the part of defendant to respect such right; and c) an
act or omission on the part of such defendant violative
of the right of the plaintiff ... It is only when the last
element occurs or takes place that it can be said in law
that a cause of action has arisen ... .
From the foregoing ruling, it is clear that the prescriptive period must be
counted when the last element occurs or takes place, that is, the time of
the commission of an act or omission violative of the right of the
plaintiff, which is the time when the cause of action arises.
It is therefore clear that in this action for damages arising from the
collision of two (2) vessels the four (4) year prescriptive period must be
counted from the day of the collision. The aggrieved party need not wait
for a determination by an administrative body like a Board of Marine
Inquiry, that the collision was caused by the fault or negligence of the
other party before he can file an action for damages. The ruling in
Vasquez does not apply in this case. Immediately after the collision the
aggrieved party can seek relief from the courts by alleging such
negligence or fault of the owners, agents or personnel of the other
vessel.
Thus, the respondent court correctly found that the action of petitioner
has prescribed. The collision occurred on April 8, 1976. The complaint
for damages was filed iii court only on May 30, 1 985, was beyond the
four (4) year prescriptive period.
WHEREFORE, the petition is dismissed. No costs.
SO ORDERED.
G.R. No. L-47926 August 13, 1990
ROMUALDO F. DUMUK, Petitioner, vs. HON. ANGEL A. DAQUIGAN,
BERNARDO MIRANDA y JUGAL and THE PHILIPPINE NATIONAL
RAILWAYS, Respondents.
Joaquin Ortega for petitioner.chanrobles virtual law library
Luis T. Mojica for private respondent.
GANCAYCO, J.:
The center of controversy in this case is whether or not a civil action
that was filed arising from the acts or omissions subject of a separate
criminal action had already prescribed of is
premature.chanroblesvirtualawlibrarychanrobles virtual law library
On March 2, 1962, private respondent was charged with the crime of
serious physical injuries through reckless imprudence in an information
that was filed in the Municipal Court of Bacnotan, La Union. An amended
information was filed on October 17, 1969 charging private respondent
Miranda with the higher category of serious physical injuries through
reckless imprudence.chanroblesvirtualawlibrarychanrobles virtual law
library
On November 20, 1969, pending trial of said respondent Miranda in the
Municipal Court of Bacnotan, La Union, the petitioner who is the
offended party in the case filed an express reservation to file a separate
action as to the civil liability arising from the offense. In a decision
rendered by the Municipal Court dated October 12, 1971 the private
respondent was convicted of the offense charged. He appealed his
conviction to the Court of First
Instance.chanroblesvirtualawlibrarychanrobles virtual law library
Before any information could be filed by the provincial fiscal's office, the
petitioner wrote the provincial fiscal on February 3, 1972 informing him
that on account of the felony committed by the private respondent he
suffered P100,000.00 damages and he requested the provincial fiscal to
include the said damages in the information. He stated that the reason
why he reserved his right to file a separate civil action for damages in
the inferior court was because his claim was beyond the jurisdiction of
said court. 1 Hence, on February 14, 1972 an information was filed by
the fiscal for the same offense alleging therein the claim for actual,
moral and exemplary damages in the amount of P100,000.00 of the
petitioner. 2chanrobles virtual law library
During the trial of said criminal case a private prosecutor appeared in
behalf of petitioner who attempted to prove the damages suffered by
petitioner but the trial court refused to receive the evidence on the civil
aspect. Thus, in the decision of the trial court of October 14, 1977
private respondent was found guilty of the offense charged and
sentenced to three months of arresto mayor and to pay the costs. It was
also therein stated that the right to file a separate civil action for
damages was reserved in favor of petitioner. The said decision was
appealed by private respondent to the Court of
Appeals.chanroblesvirtualawlibrarychanrobles virtual law library
Petitioner earlier filed a complaint for damages against private
respondent and the Philippine National Railways (PNR) in the Court of
First Instance of La Union on August 17, 1977 arising from the criminal
acts of private respondent on January 2, 1962 apparently because of the
refusal of the trial court to receive evidence on the civil liability in the
criminal case. An amended complaint was filed by petitioner which
added as allegation that the defendant corporation failed to exercise
care in the selection and supervision of its employees which was clearly
manifest in this case. In the answer of the defendants in said case the
defense of prescription was interposed. The actual court, acting on the
motions of respondents for a hearing on the affirmative defenses and
after receiving the memoranda of the parties, issued an order on
September 2, 1977 dismissing the complaint on the ground of
prescription of action and/or for lack of cause of action. 3chanrobles
virtual law library
A motion for reconsideration filed by petitioner was denied in an order
dated November 28, 1977. Hence, the herein petition for review
on certiorari of the said orders of the trial
court.chanroblesvirtualawlibrarychanrobles virtual law library
The main thrust of the appeal is to the effect that the trial court erred
when it held that the filing of the civil action had prescribed and/or was
otherwise premature.chanroblesvirtualawlibrarychanrobles virtual law
library
In the questioned order it was ruled that if the civil liability is based
on quasi-delict the period of prescription arises from the date the
alleged quasi-delict was committed on January 2, 1962 and it prescribes
in four (4) years in accordance with Article 1146 of the Civil Code, so
the civil action has prescribed. On the other hand it also held that if the
civil action arises from the criminal act which is impliedly instituted with
the criminal action, the filing of the civil action is premature because the
liability of respondent PNR is subsidiary. Petitioner must await final
judgment in the criminal action against respondent Miranda before the
civil action impleading respondent PNR may be
instituted.chanroblesvirtualawlibrarychanrobles virtual law library
On the other hand petitioner contends that prescription has not set in
that although he has made a reservation to file a separate civil action in
the Municipal Court on November 20, 1969, when the information was
filed in the Court of First Instance on February 14, 1972, it included the
claim for civil liability of petitioner, thus the filing of the information
tolled the running of the period of prescription. As such, only two years,
four months and 25 days had
expired.chanroblesvirtualawlibrarychanrobles virtual law library
Sections 1 and 2 of Rule 111 of the Rules of Court then in force provide
as follows-
SECTION 1. -Institution of criminal and civil actions. - When a criminal
action is instituted, the civil action for recovery of civil liability arising
from the offense charged is impliedly instituted with the criminal action,
unless the offended party expressly waives the civil action or reserves
his right to institute it separately.chanroblesvirtualawlibrarychanrobles
virtual law library
SECTION 2. -Independent civil action - In the cases provided for in
Articles 31, 32, 33, 34 and 2177 of the Civil Code of the Philippines, an
independent civil action entirely separate and distinct from the criminal
action, may be brought by the injured party during the pendency of the
criminal case, provided the right is reserved as required in the preceding
section. Such civil action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of evidence.
From the foregoing rules it is clear that once a criminal action is
instituted, the civil action for the recovery of civil liability arising from
the offense is impliedly instituted with the criminal action. However, for
damages arising under Articles 31, 32, 33, 34 and 2177 of the Civil
Code of the Philippines, an independent civil action entirely separate and
distinct from the criminal action, may be brought by the injured party
during the pendency of the criminal case, provided the right is reserved
in the criminal action.chanroblesvirtualawlibrarychanrobles virtual law
library
In the present case when an information for the crime of serious
physical injuries through reckless imprudence was filed on March 2,
1962 in the Municipal Court of Bacnotan, La Union, the civil action for
recovery of civil liability arising from the offense was deemed impliedly
instituted with the filing of said information and amended information
thereafter. However, on November 20, 1969, the petitioner informed the
inferior court in writing that he was making an express reservation to
file a separate civil action as to the civil liability arising from the offense.
Thus on October 12, 1971 when respondent Miranda was convicted by
the municipal court, no damages were awarded to the
petitioner.chanroblesvirtualawlibrarychanrobles virtual law library
When respondent Miranda appealed to the CFI, petitioner then wrote the
provincial fiscal on February 3, 1972 asking that the damages that he
suffered in the amount of P100,000.00 be included in the information
explaining that he reserved his right to file a separate civil action in the
municipal court because his claim exceeded the jurisdiction of the
municipal court. Forthwith the provincial fiscal on February 14, 1972
filed an information which included the claim for damages of the
petitioner.chanroblesvirtualawlibrarychanrobles virtual law library
The period of prescription within which to file a civil action as to the civil
liability arising from the offense started to run on November 20, 1969
when the petitioner informed the municipal court in writing that he was
reserving his right to file a separate civil action. It was interrupted upon
the filing of the information in the CFI on February 14, 1972 alleging the
claim for damages. On said date a period of only two (2) years, three
(3) months and twenty-three (23) days more or less have lapsed
then.chanroblesvirtualawlibrarychanrobles virtual law library
Obviously, at the time the information was filed the four-year
prescriptive period for the action had not yet lapsed. Because of the
refusal of the trial court to accept evidence of damages in the criminal
case (perhaps because the express reservation of petitioner was still in
the records of the case), a separate civil action was instituted by
petitioner on August 17, 1976.chanroblesvirtualawlibrarychanrobles
virtual law library
Consequently, in the criminal case, the trial court rendered judgment
affirming the conviction of private respondent Miranda but recognizing
the right of petitioner to file a separate civil action for
damages.chanroblesvirtualawlibrarychanrobles virtual law library
From the foregoing set of facts, it is clear that the civil action instituted
by the petitioner for damages arising from the offense has not
prescribed. It was filed well within the period of
prescription.chanroblesvirtualawlibrarychanrobles virtual law library
However, the civil action based on quasi-delict had prescribed. Petitioner
did not reserve the filing of an independent civil action arising therefrom
nor did he file the civil action within the four (4) year reglementary
period. The acts complained of occurred on February 2, 1962 while the
separate civil action for damages was fued by petitioner only on August
17, 1976 which was amended only on January 17, 1977 to include the
claim for damages arising from quasi-delict. No doubt the civil action
arising from quasi-delict had
prescribed.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, the petition is GRANTED. The questioned orders of the
trial court dated September 2, 1972 and November 20, 1979 are hereby
modified in that the civil action arising from the offense has not
prescribed and must take its due course. However, the civil action based
on quasi-delict had prescribed.chanroblesvirtualawlibrarychanrobles
virtual law library
SO ORDERED.
ALLIED BANKING CORPORATION, petitioner, vs. COURT OF
APPEALS and POTENCIANO L. GALANIDA, respondents.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review[1] assailing the
Decision[2] of 27 April 2000 and the Resolution of 8 August 2000 of the
Court of Appeals in CA-G.R. SP No. 51451. The Court of Appeals upheld
the Decision[3] of 18 September 1998 and the Resolution of 24 December
1998 of the National Labor Relations Commission (NLRC) in NLRC Case
No. V-000180-98. The NLRC modified the Decision dated 23 December
1997 of Labor Arbiter Dominador A. Almirante (Labor Arbiter) in NLRC
Case No. RAB VII-05-0545-94 holding that Allied Banking Corporation
(Allied Bank) illegally dismissed Potenciano L. Galanida (Galanida). The
NLRC awarded Galanida separation pay, backwages, moral and exemplary
damages, and other amounts totaling P1,264,933.33.
Antecedent Facts
For a background of this case, we quote in part from the Decision of
the Court of Appeals:
Private respondent Potenciano Galanida was hired by petitioner Allied
Banking Corporation on 11 January 1978 and rose from accountant-
book(k)eeper to assistant manager in 1991. His appointment was
covered by a Notice of Personnel Action which provides as one of the
conditions of employment the provision on petitioners right to transfer
employees:
REGULAR APPOINTMENT: xxx It is understood that the bank reserves
the right to transfer or assign you to other departments or branches of
the bank as the need arises and in the interest of maintaining smooth
and uninterrupted service to the public.
Private respondent was promoted several times and was transferred to
several branches as follows:
a) January, 1978 to March, 1982
Tagbilaran City Branch
b) April, 1982 to May, 1984
Lapulapu City Branch
c) June, 1984
Mandaue City Branch
d) July, 1984 to April, 1986
Tagbilaran City Branch
e) May, 1986 to May, 1987
Dumaguete City Branch
f) June, 1987 to August, 1987
Carbon Branch, Cebu City
g) September, 1987 to Sept. 1989
Lapulapu City Branch, Cebu
h) October, 1989 to Sept. 1992
Carbon Branch, Cebu City
i) October 1992 to Sept. 1994
Jakosalem Regional Branch,
Cebu City (Rollo, p. 47)
Effecting a rotation/movement of officers assigned in
the Cebu homebase, petitioner listed respondent as second in the order
of priority of assistant managers to be assigned outside
of Cebu City having been stationed in Cebu for seven years
already. Private respondent manifested his refusal to be transferred
to Bacolod City in a letter dated 19 April 1994 citing as reason parental
obligations, expenses, and the anguish that would result if he is away
from his family. He then filed a complaint before the Labor Arbiter for
constructive dismissal.
Subsequently, petitioner bank informed private respondent (Rollo, p.
86) that he was to report to the Tagbilaran City Branch effective 23 May
1994. Private respondent refused. In a letter dated 13 June 1994,
petitioner warned and required of private respondent as follows:
There is no discrimination in your transfer. In fact, among the officers
mentioned, only you have refused the new assignment citing difficulty of
working away from your family as if the other officers concerned do not
suffer the same predicament. To exempt you from the officer transfer
would result in favoritism in your favor and discrimination as against the
other officers concerned.
In furtherance of maintaining a smooth and uninterrupted service to the
public, and in accordance with the Banks order of priority of rotating its
accountants places of assignments, you are well aware that Roberto
Isla, AM/Accountant, assigned in Cebu for more than ten (10) years,
was, on February 14, 1994, reassigned to Iligan City Branch and then to
Cagayan de Oro City Branch on June 8, 1994. Hence, your objection on
the ground of your length of service is without merit.
xxx
As discussed, your refusal to follow instruction concerning your transfer
and reassignment to Bacolod City and to Tagbilaran City is penalized
under Article XII of the Banks Employee Discipline Policy and Procedure
[which] provides:
XII Transfer and Reassignment
Refusal to follow instruction concerning transfers and reassignments.
First and subsequent offenses
The penalty may range from suspension to dismissal as determined by
management. The employee shall be required to comply with the order
of transfer and reassignment, if the penalty is not termination of
employment.
In view of the foregoing, please explain in writing within three (3) days
from receipt hereof why no disciplinary action should be meted against
you for your having refused to follow instructions concerning the
foregoing transfer and reassignment. xxx[4]
On 16 June 1994, Galanida replied that (w)hether the banks penalty
for my refusal be Suspension or Dismissal xxx it will all the more establish
and fortify my complaint now pending at NLRC, RAB 7.[5] In the same
letter, he charged Allied Bank with discrimination and favoritism in
ordering his transfer, thus:
xxx What I cannot decipher now under the headship of Mr. Olveda is
managements discriminatory act of transferring only the long staying
accountants of Cebu in the guise of its exercise of management
prerogative when in truth and in fact, the ulterior motive is to
accommodate some new officers who happen to enjoy favorable
connection with management. How can the bank ever justify the
transfer of Melinda T. Co, a new officer who had experienced being
assigned outside of Cebu for more than a year only to Tabunok
Branch? If the purpose is for check and balance, is management
implying that Melinda Co can better carry out such function over Mr.
Larry Sabelino, who is a seasoned and experienced accountant or any of
the Metro Cebu accountants for that matter? Isnt this act of
management an obvious display of favoritism? xxx[6]
On 5 October 1994, Galanida received an inter-office
communication[7] (Memo) dated 8 September 1994 from Allied Banks
Vice-President for Personnel, Mr. Leonso C. Pe. The Memo informed
Galanida that Allied Bank had terminated his services effective 1
September 1994. The reasons given for the dismissal were: (1) Galanidas
continued refusal to be transferred from the
Jakosalem, Cebu City branch; and (2) his refusal to report for work
despite the denial of his application for additional vacation leave. The
salient portion of the Memo reads:
Therefore, your refusal to follow instruction concerning your transfer
and reassignment to Bacolod City and to Tagbilaran City is without any
justifiable reason and constituted violations of Article XII of the Banks
EDPP xxx
In view of the foregoing, please be informed that the Bank has
terminated your services effective September 1, 1994 and
considered whatever benefit, if any, that you are entitled as forfeited in
accordance with 04, V Administrative Penalties, page 6 of the Banks
EDPP which provides as follows:
04. Dismissal.
Dismissal is a permanent separation for cause xxx
Notice of termination shall be issued by the Investigation Committee
subject to the confirmation of the President or his authorized
representative as officer/employee who is terminated for cause shall not
be eligible to receive any benefit arising from her/his employment with
the Bank or to termination pay.
It is understood that the termination of your service shall be without
prejudice to whatever legal remedies which the Bank may have already
undertaken and/or will undertake against you.
Please be guided accordingly. (Emphasis supplied)[8]
 The Ruling of the Labor Arbiter
After several hearings, the Labor Arbiter held that Allied Bank had
abused its management prerogative in ordering the transfer of Galanida
to its Bacolod and Tagbilaran branches. In ruling that Galanidas refusal to
transfer did not amount to insubordination, the Labor
Arbiter misquoted this Courts decision in Dosch v. NLRC,[9] thus:
As a general rule, the right to transfer or reassign an employee is
recognized as an employers exclusive right and the prerogative of
management (Abbott Laboratories vs. NLRC, 154 SCRA 713 [1987]).
The exercise of this right, is not however, absolute. It has certain
limitations. Thus, in Helmut Dosch vs. NLRC, et al. 123 SCRA 296
(1983), the Supreme Court, ruled:
While it may be true that the right to transfer or reassign an employee
is an employers exclusive right and the prerogative of
management, such right is not absolute. The right of an employer to
freely select or discharge his employee is limited by the paramount
police power xxx for the relations between capital and labor are not
merely contractual but impressed with public interest. xxx And neither
capital nor labor shall act oppressively against each other.
Refusal to obey a transfer order cannot be considered insubordination
where employee cited reason for said refusal, such (sic) as that of being
away from the family.[10] (Underscoring supplied by the Labor Arbiter)
The Labor Arbiter reasoned that Galanidas transfer was inconvenient
and prejudicial because Galanida would have to incur additional expenses
for board, lodging and travel. On the other hand, the Labor Arbiter held
that Allied Bank failed to show any business urgency that would justify
the transfer.
The Labor Arbiter also gave credence to Galanidas claim that Allied
Bank gave Ms. Co special treatment. The Labor Arbiter stated that Allied
Bank deliberately left out Ms. Cos name from the list of accountants
transferred to Cebu as contained in Allied Banks letter dated 13 June
1994. However, Mr. Regidor Olveda, Allied Banks Vice President for
Operations Accounting, testified that the bank transferred Ms. Co to the
Tabunok, Cebu branch within the first half of 1994.
Still, the Labor Arbiter declined to award Galanida back wages
because he was not entirely free from blame. Since another bank had
already employed Galanida, the Labor Arbiter granted Galanida
separation pay in lieu of reinstatement. The dispositive portion of the
Labor Arbiters Decision of 23 December 1997 provides:
WHEREFORE, premises considered, judgment is hereby rendered
ordering respondent Allied Banking Corporation to pay complainant the
aggregate total amount of Three Hundred Twenty Four Thousand Pesos
(P324,000.00) representing the following awards:
a) Separation pay for P272,000.00;
b) Quarter bonus for 1994 P16,000.00;
c) 13th month pay for 1994 P16,000.00;
d) Refund of contribution to Provident Fund - P20,000.00.
SO ORDERED.[11]
The Ruling of the NLRC
On appeal, the NLRC likewise ruled that Allied Bank terminated
Galanida without just cause. The NLRC agreed that the transfer order was
unreasonable and unjustified, considering the family considerations
mentioned by Galanida. The NLRC characterized the transfer as a
demotion since the Bacolod and Tagbilaran branches were smaller than
the Jakosalem branch, a regional office, and because the bank wanted
Galanida, an assistant manager, to replace an assistant accountant in the
Tagbilaran branch. The NLRC found unlawful discrimination since Allied
Bank did not transfer several junior accountants in Cebu. The NLRC also
held that Allied Bank gave Ms. Co special treatment by assigning her
to Cebu even though she had worked for the bank for less than two years.
The NLRC ruled that Galanidas termination was illegal for lack of due
process. The NLRC stated that Allied Bank did not conduct any
hearing. The NLRC declared that Allied Bank failed to send a termination
notice, as required by law for a valid termination. The Memo merely
stated that Allied Bank would issue a notice of termination, but the bank
did not issue any notice.
The NLRC concluded that Allied Bank dismissed Galanida in bad faith,
tantamount to an unfair labor practice as the dismissal undermined
Galanidas right to security of tenure and equal protection of the laws. On
these grounds, the NLRC promulgated its Decision of 18 September 1998,
the relevant portion of which states:
In this particular case, We view as impractical, unrealistic and no longer
advantageous to both parties to order reinstatement of the
complainant. xxx For lack of sufficient basis, We deny the claim for 1994
quarter bonus. Likewise, no attorneys fees is awarded as counsels for
complainant-appellee are from the City Prosecutors Office of Cebu.
WHEREFORE, premises considered, the decision of the Labor Arbiter
dated December 23, 1997 is hereby MODIFIED by increasing the award
of separation pay and granting in addition thereto backwages, moral
and exemplary damages. The respondent-appellant, ALLIED BANKING
CORPORATION, is thus ordered to pay to herein complainant-appellee,
POTENCIANO L. GALANIDA, the following amounts:
a) P336,000.00, representing separation pay
b) P833,600.00, representing backwages
c) P 5,333.23 representing proportional 1994 13th month pay
d) P 20,000.00 representing refund of Provident Fund
Contribution
e) P 50,000.00 representing moral damages
f) P 20,000.00 representing exemplary damages
===========
P1,264,933.33 TOTAL AWARD
All other claims are dismissed for lack of basis. The other respondents
are dropped for lack of sufficient basis that they acted in excess of their
corporate powers.
SO ORDERED.[12]
Allied Bank filed a motion for reconsideration which the NLRC denied
in its Resolution of 24 December 1998.[13]
Dissatisfied, Allied Bank filed a petition for review questioning the
Decision and Resolution of the NLRC before the Court of Appeals.
The Ruling of the Court of Appeals
Citing Dosch v. NLRC,[14] the Court of Appeals held that Galanidas
refusal to comply with the transfer orders did not warrant his
dismissal. The appellate court ruled that the transfer from a regional office
to the smaller Bacolod or Tagbilaran branches was effectively a
demotion. The appellate court agreed that Allied Bank did not afford
Galanida procedural due process because there was no hearing and no
notice of termination. The Memo merely stated that the bank would issue
a notice of termination but there was no such notice.
The Court of Appeals affirmed the ruling of the NLRC in its Decision
of 27 April 2000, thus:
WHEREFORE, for lack of merit, the petition is DISMISSED and the
assailed Decision of public respondent NLRC is AFFIRMED.
SO ORDERED. [15]
Allied Bank filed a motion for reconsideration which the appellate
court denied in its Resolution of 8 August 2000.[16]
On 26 April 2001, Allied Bank appealed the appellate courts decision
and resolution to the Supreme Court. Allied Bank prayed that the
Supreme Court: (1) issue a temporary restraining order or writ of
preliminary injunction ex parte to restrain the implementation or
execution of the questioned Decision and Resolution; (2) declare
Galanidas termination as valid and legal; (3) set aside the Court of
Appeals Decision and Resolution; (4) make permanent the restraining
order or preliminary injunction; (5) order Galanida to pay the costs; and
(6) order other equitable reliefs.
 The Issues
Allied Bank raises the following issues:
1. WHETHER UNDER THE FACTS PRESENTED THERE IS LEGAL
BASIS IN PETITIONERS EXERCISE OF ITS MANAGEMENT
PREROGATIVE.
2. WHETHER PRIVATE RESPONDENTS VIOLATIONS OF
COMPANY RULES CONSTITUTE A GROUND TO WARRANT THE
PENALTY OF DISMISSAL.
3. WHETHER UNDER THE FACTS PRESENTED, THERE IS LEGAL
BASIS TO HOLD THAT ALLIED BANK AFFORDED PRIVATE
RESPONDENT THE REQUIRED DUE PROCESS.
4. WHETHER UNDER THE FACTS, THERE IS LEGAL BASIS TO
HOLD THAT PRIVATE RESPONDENT CANNOT RECOVER ANY
MONETARY AWARD.[17]
In sum, Allied Bank argues that the transfer of Galanida was a valid
exercise of its management prerogative. Allied Bank contends that
Galanidas continued refusal to obey the transfer orders constituted willful
disobedience or insubordination, which is a just cause for termination
under the Labor Code.
On the other hand, Galanida defended his right to refuse the transfer
order. The memorandum for Galanida filed with this Court, prepared by
Atty. Loreto M. Durano, again misquotedthe Courts ruling in Dosch v.
NLRC, thus:
xxx His [Galanidas] refusal to transfer falls well within the ruling of the
Supreme Court in Helmut Dosch vs. NLRC, et. al., 123 SCRA 296 (1983)
quoted as follows:
xxx
Refusal to obey a transfer order cannot be considered insubordination
where employee cited reason for said refusal, such as that of being
away from the family.[18]
The Ruling of the Court
The petition is partly meritorious.
Preliminary Matter: Misquoting Decisions of the Supreme Court
The memorandum prepared by Atty. Durano and, worse, the assailed
Decision of the Labor Arbiter, both misquoted the Supreme Courts ruling
in Dosch v. NLRC. The Court held in Dosch:
We cannot agree to Northwests submission that petitioner was guilty of
disobedience and insubordination which respondent Commission
sustained. The only piece of evidence on which Northwest bases the
charge of contumacious refusal is petitioners letter dated August 28,
1975 to R.C. Jenkins wherein petitioner acknowledged receipt of the
formers memorandum dated August 18, 1975, appreciated his
promotion to Director of International Sales but at the same time
regretted that at this time for personal reasons and reasons of my
family, I am unable to accept the transfer from the Philippines and
thereafter expressed his preference to remain in his position, saying: I
would, therefore, prefer to remain in my position of Manager-Philippines
until such time that my services in that capacity are no longer required
by Northwest Airlines. From this evidence, We cannot discern even the
slightest hint of defiance, much less imply insubordination on the part of
petitioner.[19]
The phrase [r]efusal to obey a transfer order cannot be considered
insubordination where employee cited reason for said refusal, such as that
of being away from the family does not appear anywhere in
the Dosch decision. Galanidas counsel lifted the erroneous phrase from
one of the italicized lines in the syllabus of Dosch found in the Supreme
Court Reports Annotated (SCRA).
The syllabus of cases in official or unofficial reports of Supreme Court
decisions or resolutions is not the work of the Court, nor does it state this
Courts decision. The syllabus is simply the work of the reporter who gives
his understanding of the decision. The reporter writes the syllabus for the
convenience of lawyers in reading the reports. A syllabus is not a part of
the courts decision.[20] A counsel should not cite a syllabus in place of the
carefully considered text in the decision of the Court.
In the present case, Labor Arbiter Almirante and Atty. Durano began
by quoting from Dosch, but substituted a portion of the decision with a
headnote from the SCRA syllabus, which they even underscored. In short,
they deliberately made the quote from the SCRA syllabus appear as the
words of the Supreme Court. We admonish them for what is at the least
patent carelessness, if not an outright attempt to mislead the parties and
the courts taking cognizance of this case. Rule 10.02, Canon 10 of the
Code of Professional Responsibility mandates that a lawyer shall not
knowingly misquote or misrepresent the text of a decision or authority. It
is the duty of all officers of the court to cite the rulings and decisions of
the Supreme Court accurately.[21]
Whether Galanida was dismissed for just cause
We accord great weight and even finality to the factual findings of
the Court of Appeals, particularly when they affirm the findings of the
NLRC or the lower courts. However, there are recognized exceptions to
this rule. These exceptions are: (1) when the findings are grounded on
speculation, surmise and conjecture; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is grave abuse
of discretion in the appreciation of facts; (4) when the factual findings of
the trial and appellate courts are conflicting; (5) when the Court of
Appeals, in making its findings, has gone beyond the issues of the case
and such findings are contrary to the admissions of both appellant and
appellee; (6) when the judgment of the appellate court is premised on a
misapprehension of facts or when it has failed to consider certain relevant
facts which, if properly considered, will justify a different conclusion; (7)
when the findings of fact are conclusions without citation of specific
evidence on which they are based; and (8) when the findings of fact of
the Court of Appeals are premised on the absence of evidence but are
contradicted by the evidence on record.[22] After a scrutiny of the records,
we find that some of these exceptions obtain in the present case.
The rule is that the transfer of an employee ordinarily lies within the
ambit of the employers prerogatives.[23] The employer exercises the
prerogative to transfer an employee for valid reasons and according to
the requirement of its business, provided the transfer does not result in
demotion in rank or diminution of the employees salary, benefits and
other privileges.[24] In illegal dismissal cases, the employer has the
burden of showing that the transfer is not unnecessary, inconvenient and
prejudicial to the displaced employee.[25]
The constant transfer of bank officers and personnel with accounting
responsibilities from one branch to another is a standard practice of Allied
Bank, which has more than a hundred branches throughout the
country.[26] Allied Bank does this primarily for internal control. It also
enables bank employees to gain the necessary experience for eventual
promotion. The Bangko Sentral ng Pilipinas, in its Manual of Regulations
for Banks and Other Financial Intermediaries,[27] requires the rotation of
these personnel. The Manual directs that the duties of personnel handling
cash, securities and bookkeeping records should be rotated and that such
rotation should be irregular, unannounced and long enough to permit
disclosure of any irregularities or manipulations.[28]
Galanida was well aware of Allied Banks policy of periodically
transferring personnel to different branches. As the Court of Appeals
found, assignment to the different branches of Allied Bank was a condition
of Galanidas employment. Galanida consented to this condition when he
signed the Notice of Personnel Action.[29]
The evidence on record contradicts the charge that Allied Bank
discriminated against Galanida and was in bad faith when it ordered his
transfer. Allied Banks letter of 13 June 1994[30]showed that at least 14
accounting officers and personnel from various branches, including
Galanida, were transferred to other branches. Allied Bank did not single
out Galanida. The same letter explained that Galanida was second in line
for assignment outside Cebu because he had been in Cebu for seven
years already. The person first in line, Assistant Manager Roberto Isla,
who had been in Cebu for more than ten years, had already transferred
to a branch in Cagayan de Oro City. We note that none of the other
transferees joined Galanida in his complaint or corroborated his
allegations of widespread discrimination and favoritism.
As regards Ms. Co, Galanidas letter of 16 June 1994 itself showed
that her assignment to Cebu was not in any way related to Galanidas
transfer. Ms. Co was supposed to replace a certain Larry Sabelino in the
Tabunok branch. The employer has the prerogative, based on its
assessment of the employees qualifications and competence, to rotate
them in the various areas of its business operations to ascertain where
they will function with maximum benefit to the company.[31]
Neither was Galanidas transfer in the nature of a demotion. Galanida
did not present evidence showing that the transfer would diminish his
salary, benefits or other privileges. Instead, Allied Banks letter of 13 June
1994 assured Galanida that he would not suffer any reduction in rank or
grade, and that the transfer would involve the same rank, duties and
obligations. Mr. Olveda explained this further in the affidavit he submitted
to the Labor Arbiter, thus:
19. There is no demotion in position/rank or diminution of complainants
salary, benefits and other privileges as the transfer/assignment of
branch officers is premised on the role/functions that they will assume in
the management and operations of the branch, as shown below:
(a) The Branch Accountant, as controller of the branch is responsible for
the proper discharge of the functions of the accounting section of the
branch, review of documentation/proper accounting and control of
transaction. As such, the accounting functions in the branch can be
assumed by any of the following officers with the rank of: Senior
Manager/Acctg.; Manager/ Acctg.; Senior Asst. Manager/Acctg.; Asst.
Manager/Acctg.; Accountant or Asst. Accountant.
xxx
20. The transfer/assignment of branch officer from one branch, to
another branch/office is lateral in nature and carries with it the same
position/rank, salary, benefits and other privileges. The
assignment/transfer is for the officer to assume the functions relative to
his job and NOT the position/rank of the officer to be replaced.
There is also no basis for the finding that Allied Bank was guilty of
unfair labor practice in dismissing Galanida. Unfair labor practices relate
only to violations of the constitutional right of workers and employees to
self-organization[32] and are limited to the acts enumerated in Article 248
of the Labor Code, none of which applies to the present case. There is no
evidence that Galanida took part in forming a union, or even that a union
existed in Allied Bank.
This leaves the issue of whether Galanida could validly refuse the
transfer orders on the ground of parental obligations, additional expenses,
and the anguish he would suffer if assigned away from his family.
The Court has ruled on this issue before. In the case
of Homeowners Savings and Loan Association, Inc. v. NLRC,[33] we
held:
The acceptability of the proposition that transfer made by an employer
for an illicit or underhanded purpose i.e., to defeat an employees right
to self-organization, to rid himself of an undesirable worker, or to
penalize an employee for union activities cannot be upheld is self-
evident and cannot be gainsaid. The difficulty lies in the situation where
no such illicit, improper or underhanded purpose can be ascribed to the
employer, the objection to the transfer being grounded solely upon the
personal inconvenience or hardship that will be caused to the employee
by reason of the transfer. What then?
This was the very same situation we faced in Phil. Telegraph and
Telephone Corp. v. Laplana. In that case, the employee, Alicia
Laplana, was a cashier at the Baguio City Branch of PT&T who was
directed to transfer to the companys branch office at Laoag City. In
refusing the transfer, the employee averred that she had
established Baguio City as her permanent residence and that such
transfer will involve additional expenses on her part, plus the fact that
an assignment to a far place will be a big sacrifice for her as she will be
kept away from her family which might adversely affect her
efficiency. In ruling for the employer, the Court upheld the transfer from
one city to another within the country as valid as long as there is no bad
faith on the part of the employer. We held then:
Certainly the Court cannot accept the proposition that when an
employee opposes his employers decision to transfer him to another
work place, there being no bad faith or underhanded motives on the
part of either party, it is the employees wishes that should be made to
prevail.
Galanida, through counsel, invokes the Courts ruling in Dosch v.
NLRC.[34] Dosch, however, is not applicable to the present case. Helmut
Dosch refused a transfer consequential to a promotion. We upheld the
refusal because no law compels an employee to accept a promotion, and
because the position Dosch was supposed to be promoted to did not even
exist at that time.[35] This left as the only basis for the charge of
insubordination a letter from Dosch in which the Court found not even the
slightest hint of defiance, much less xxx insubordination.[36]
Moreover, the transfer of an employee to an overseas post, as in
the Dosch case, cannot be likened to a transfer from one city to another
within the country,[37] which is the situation in the present case. The
distance from Cebu City to Bacolod City or
from Cebu City to Tagbilaran City does not exceed the distance
from Baguio City to Laoag City or from Baguio City to Manila, which the
Court considered a reasonable distance in PT&T v. Laplana.[38]
The refusal to obey a valid transfer order constitutes willful
disobedience of a lawful order of an employer.[39] Employees may object
to, negotiate and seek redress against employers for rules or orders that
they regard as unjust or illegal. However, until and unless these rules or
orders are declared illegal or improper by competent authority, the
employees ignore or disobey them at their
peril.[40] For Galanidas continued refusal to obey Allied Banks transfer
orders, we hold that the bank dismissed Galanida for just cause in
accordance with Article 282 (a) of the Labor Code.[41] Galanida is thus not
entitled to reinstatement or to separation pay.
Whether Galanidas dismissal violated the
requirement of notice and hearing
To be effective, a dismissal must comply with Section 2 (d), Rule 1,
Book VI of the Omnibus Rules Implementing the Labor Code (Omnibus
Rules), which provides:
For termination of employment based on just causes as defined in
Article 282 of the Labor Code:
(i) A written notice served on the employee specifying the
ground or grounds of termination, and giving said
employee reasonable opportunity within which to explain
his side.
(ii) A hearing or conference during which the employee
concerned, with the assistance of counsel if he so desires
is given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him.
(iii) A written notice of termination served on the employee
indicating that upon due consideration of all the
circumstances, grounds have been established to justify
his termination.
The first written notice was embodied in Allied Banks letter of 13 June
1994. The first notice required Galanida to explain why no disciplinary
action should be taken against him for his refusal to comply with the
transfer orders.
On the requirement of a hearing, this Court has held that the essence
of due process is simply an opportunity to be heard.[42] An actual hearing
is not necessary. The exchange of several letters, in which Galanidas wife,
a lawyer with the City Prosecutors Office, assisted him, gave Galanida an
opportunity to respond to the charges against him.
The remaining issue is whether the Memo dated 8 September
1994 sent to Galanida constitutes the written notice of termination
required by the Omnibus Rules. In finding that it did not, the Court of
Appeals and the NLRC cited Allied Banks rule on dismissals, quoted in the
Memo, that, Notice of termination shall be issued by the Investigation
Committee subject to the confirmation of the President or his authorized
representative.[43] The appellate court and NLRC held that Allied Bank did
not send any notice of termination to Galanida. The Memo, with the
heading Transfer and Reassignment, was not the termination notice
required by law.
We do not agree.
Even a cursory reading of the Memo will show that it unequivocally
informed Galanida of Allied Banks decision to dismiss him. The statement,
please be informed that the Bank has terminated your
services effective September 1, 1994 and considered whatever benefit,
if any, that you are entitled [to] as forfeited xxx[44] is plainly worded and
needs no interpretation.The Memo also discussed the findings of the
Investigation Committee that served as grounds for Galanidas
dismissal. The Memo referred to Galanidas open defiance and refusal to
transfer first to the Bacolod City branch and then to
the Tagbilaran City branch. The Memo also mentioned his continued
refusal to report for work despite the denial of his application for
additional vacation leave.[45] The Memo also refuted Galanidas charges of
discrimination and demotion, and concluded that he had violated Article
XII of the banks Employee Discipline Policy and Procedure.
The Memo, although captioned Transfer and Reassignment, did not
preclude it from being a notice of termination. The Court has held that
the nature of an instrument is characterized not by the title given to it but
by its body and contents.[46] Moreover, it appears that Galanida himself
regarded the Memo as a notice of termination. We quote from the
Memorandum for Private Respondent-Appellee, as follows:
The proceedings may be capsulized as follows:
1. On March 13, 1994[47] Private Respondent-Appellee filed before the
Region VII Arbitration Branch a Complaint for Constructive Dismissal. A
copy of the Complaint is attached to the Petition as Annex H;
xxx
5. On September 8, 1994, Petitioner-Appellant issued him a
Letter of Termination. A copy of said letter is attached to the Petition
as Annex N;
6. Private Respondent-Appellee filed an Amended/ Supplemental
Complaint wherein he alleged illegal dismissal. A copy of the
Amended/Supplemental Complaint is attached to the Petition as Annex
O; xxx [48] (Emphasis supplied)
The Memorandum for Private Respondent-Appellee refers to the
Memo as a Letter of Termination. Further, Galanida amended his
complaint for constructive dismissal[49] to one for illegal dismissal[50] after
he received the Memo. Clearly, Galanida had understood the Memo to
mean that Allied Bank had terminated his services.
The Memo complied with Allied Banks internal rules which required
the banks President or his authorized representative to confirm the
notice of termination. The banks Vice-President for Personnel, as the head
of the department that handles the movement of personnel within Allied
Bank, can certainly represent the bank president in cases involving the
dismissal of employees.
Nevertheless, we agree that the Memo suffered from certain
errors. Although the Memo stated that Allied Bank terminated Galanidas
services as of 1 September 1994, the Memo bore the date 8 September
1994. More importantly, Galanida only received a copy of the Memo on 5
October 1994, or more than a month after the supposed date of his
dismissal. To be effective, a written notice of termination must
be served on the employee.[51] Allied Bank could not terminate Galanida
on 1 September 1994 because he had not received as of that date the
notice of Allied Banks decision to dismiss him. Galanidas dismissal could
only take effect on 5 October 1994, upon his receipt of the Memo. For this
reason, Galanida is entitled to backwages for the period from 1
September 1994 to 4 October 1994.
Under the circumstances, we also find an award of P10,000 in
nominal damages proper. Courts award nominal damages to recognize or
vindicate the right of a person that another has violated.[52] The law
entitles Galanida to receive timely notice of Allied Banks decision to
dismiss him. Allied Bank should have exercised more care in issuing the
notice of termination.
WHEREFORE, the Decision of 27 April 2000 of the Court of Appeals
in CA-G.R. SP No. 51451 upholding the Decision of 18 September 1998
of the NLRC in NLRC Case No. V-000180-98 is AFFIRMED, with the
following MODIFICATIONS:
1) The awards of separation pay, moral damages and exemplary
damages are hereby deleted for lack of basis;
2) Reducing the award of backwages to cover only the period from 1
September 1994 to 4 October 1994; and
3) Awarding nominal damages to private respondent for P10,000.
This case is REMANDED to the Labor Arbiter for the computation,
within thirty (30) days from receipt of this Decision, of the backwages,
inclusive of allowances and other benefits, due to Potenciano L. Galanida
for the time his dismissal was ineffectual from 1 September 1994 until 4
October 1994.
Labor Arbiter Dominador A. Almirante and Atty. Loreto M. Durano
are ADMONISHED to be more careful in citing the decisions of the
Supreme Court in the future.
SO ORDERED.
AS DISTINGUISHED FROM CRIME:
G.R. No. L-27760 May 29, 1974
CRISPIN ABELLANA and FRANCISCO ABELLANA, petitioners,
vs.
HONORABLE GERONIMO R. MARAVE, Judge, Court of First
Instance of Misamis Occidental, Branch II; and GERONIMO
CAMPANER, MARCELO LAMASON, MARIA GURREA, PACIENCIOSA
FLORES and ESTELITA NEMEN0, respondents.
Prud. V. Villafuerte for petitioners.
Hon. Geronimo R. Marave in his own behalf.
FERNANDO, J.:p
This petition for certiorari is characterized by a rather vigorous
insistence on the part of petitioners Crispin Abellana and Francisco
Abellana that an order of respondent Judge was issued with grave abuse
of discretion. It is their contention that he ought to have dismissed an
independent civil action filed in his court, considering that the plaintiffs,
as offended parties, private respondents here,1 failed to reserve their
right to institute it separately in the City Court of Ozamis City, when the
criminal case for physical injuries through reckless imprudence was
commenced. Such a stand of petitioners was sought to be bolstered by
a literal reading of Sections 1 and 2 of Rule 111.2 It does not take into
account, however, the rule as to a trial de novo found in Section 7 of
Rule 123.3 What is worse, petitioners appear to be oblivious of the
principle that if such an interpretation were to be accorded the
applicable Rules of Court provisions, it would give rise to a grave
constitutional question in view of the constitutional grant of power to
this Court to promulgate rules concerning pleading, practice, and
procedure being limited in the sense that they "shall not diminish,
increase, or modify substantive rights."4 It thus appears clear that the
petition for certiorari is without merit.
The relevant facts were set forth in the petition and admitted in the
answer. The dispute had its origins in a prosecution of petitioner
Francisco Abellana of the crime of physical injuries through reckless
imprudence in driving his cargo truck, hitting a motorized pedicab
resulting in injuries to its passengers, namely, private respondents
Marcelo Lamason, Maria Gurrea, Pacienciosa Flores, and Estelita
Nemeño. The criminal case was filed with the city court of Ozamis City,
which found the accused Francisco Abellana guilty as charged, damages
in favor of the offended parties likewise being awarded. The accused,
now petitioner, Francisco Abellana appealed such decision to the Court
of First Instance.5 At this stage, the private respondents as the offended
parties filed with another branch of the Court of First Instance of
Misamis Occidental, presided by respondent Judge, a separate and
independent civil action for damages allegedly suffered by them from
the reckless driving of the aforesaid Francisco Abellana.6 In such
complaint, the other petitioner, Crispin Abellana, as the alleged
employer, was included as defendant. Both of them then sought the
dismissal of such action principally on the ground that there was no
reservation for the filing thereof in the City Court of Ozamis. It was
argued by them that it was not allowable at the stage where the
criminal case was already on appeal.7
Respondent Judge was not persuaded. On April 28, 1967, he issued the
following order: "This is a motion to dismiss this case on the ground that
in Criminal Case No. OZ-342 which was decided by the City Court and
appealed to this Court, the offended parties failed to expressly waive the
civil action or reserve their right to institute it separately in said City
Court, as required in Section 1, Rule 111, Rules of Court. From the
Records of Criminal Case No. OZ-342, it appears that the City Court
convicted the accused. On appeal to this Court, the judgment of the City
Court was vacated and a trial de novo will have to be conducted. This
Court has not as yet begun trying said criminal case. In the meantime,
the offended parties expressly waived in this Court the civil action
impliedly instituted with the criminal action, and reserve their right to
institute a separate action as in fact, they did file. The Court is of the
opinion that at this stage, the offended parties may still waive the civil
action because the judgment of the City Court is vacated and a trial de
novo will have to be had. In view of this waiver and reservation, this
Court would be precluded from judging civil damages against the
accused and in favor of the offended parties. [Wherefore], the motion to
dismiss is hereby denied. ..."8 There was a motion for reconsideration
which was denied. Hence this petition.
The only basis of petitioners for the imputation that in the issuance of
the challenged order there was a grave abuse of discretion, is their
reading of the cited Rules of Court provision to the effect that upon the
institution of a criminal action "the civil action for recovery of civil
liability arising from the offense charge is impliedly instituted with the
criminal action, unless the offended party ...reserves his right to
institute it
separately."9 Such an interpretation, as noted, ignores the de
novo aspect of appealed cases from city courts.10 It does likewise, as
mentioned, give rise to a constitutional question to the extent that it
could yield a meaning to a rule of court that may trench on a
substantive right. Such an interpretation is to be rejected. Certiorari, to
repeat, clearly does not lie.
1. In the language of the petition, this is the legal proposition submitted
for the consideration of this Court : "That a separate civil action can be
legally filed and allowed by the court only at the institution, or the right
to file such separate civil action reserved or waived, at such institution
of the criminal action, and never on appeal to the next higher
court."11 It admits of no doubt that an independent civil action was filed
by private respondents only at the stage of appeal. Nor was there any
reservation to that effect when the criminal case was instituted in the
city court of Ozamis. Petitioners would then take comfort from the
language of the aforesaid Section 1 of Rule 111 for the unwarranted
conclusion that absent such a reservation, an independent civil action is
barred. In the first place, such an inference does not per se arise from
the wording of the cited rule. It could be looked upon plausibly as a non-
sequitur. Moreover, it is vitiated by the grievous fault of ignoring what is
so explicitly provided in Section 7 of Rule 123: "An appealed case shall
be tried in all respects anew in the Court of First Instance as if it had
been originally instituted in that court."12 Unlike petitioners, respondent
Judge was duly mindful of such a norm. This Court has made clear that
its observance in appealed criminal cases is mandatory.13 In a 1962
decision, People v. Carreon,14Justice Barrera, as ponente, could trace
such a rule to a 1905 decision, Andres v. Wolfe.15 Another case cited by
him is Crisostomo v. Director of Prisons,16 where Justice Malcolm
emphasized how deeply rooted in Anglo-American legal history is such a
rule. In the latest case in point, People v. Jamisola,17 this Court, through
Justice Dizon, reiterated such a doctrine in these words: "The rule in this
jurisdiction is that upon appeal by the defendant from a judgment of
conviction by the municipal court, the appealed decision is vacated and
the appealed case 'shall be tried in all respects anew in the court of first
instance as if it had been originally instituted in that court.'"18 So it is in
civil cases under Section 9 of Rule 40.19 Again, there is a host of
decisions attesting to its observance.20 It cannot be said then that there
was an error committed by respondent Judge, much less a grave abuse
of discretion, which is indispensable if this petition were to prosper.
2. Nor is the above the only ground for rejecting the contention of
petitioners. The restrictive interpretation they would place on the
applicable rule does not only result in its emasculation but also gives
rise to a serious constitutional question. Article 33 of the Civil Code is
quite clear: "In cases of ... physical injuries, a civil action for damages,
entirely separate and distinct from the criminal action, may be brought
by the injured party. Such civil action shall proceed independently of the
criminal prosecution, and shall require only a preponderance of
evidence."21 That is a substantive right, not to be frittered away by a
construction that could render it nugatory, if through oversight, the
offended parties failed at the initial stage to seek recovery for damages
in a civil suit. As referred to earlier, the grant of power to this Court,
both in the present Constitution and under the 1935 Charter, does not
extend to any diminution, increase or modification of substantive
right.22 It is a well-settled doctrine that a court is to avoid construing a
statute or legal norm in such a manner as would give rise to a
constitutional doubt. Unfortunately, petitioners, unlike respondent
Judge, appeared to lack awareness of the undesirable consequence of
their submission. Thus is discernible another insuperable obstacle to the
success of this suit.
3. Nor is this all that needs to be said. It is understandable for any
counsel to invoke legal propositions impressed with a certain degree of
plausibility if thereby the interest of his client would be served. That is
though, merely one aspect of the matter. There is this other
consideration. He is not to ignore the basic purpose of a litigation, which
is to assure parties justice according to law. He is not to fall prey, as
admonished by Justice Frankfurter, to the vice of literalness. The law as
an instrument of social control will fail in its function if through an
ingenious construction sought to be fastened on a legal norm,
particularly a procedural rule, there is placed an impediment to a litigant
being given an opportunity of vindicating an alleged right.23 The
commitment of this Court to such a primordial objective has been
manifested time and time again.24
WHEREFORE, this petition for certiorari is dismissed.
Costs against petitioners.
G.R. No. 91856 October 5, 1990
YAKULT PHILIPPINES AND LARRY SALVADO, petitioner,
vs.
COURT OF APPEALS, WENCESLAO M. POLO, in his capacity as
Presiding Judge of Br. 19 of the RTC of Manila, and ROY
CAMASO, respondents.
GANCAYCO, J.:
Can a civil action instituted after the criminal action was filed prosper
even if there was no reservation to file a separate civil action? This is
the issue in this petition.
On December 24, 1982, a five-year old boy, Roy Camaso, while
standing on the sidewalk of M. de la Fuente Street, Sampaloc, Manila,
was sideswiped by a Yamaha motorcycle owned by Yakult Philippines
and driven by its employee, Larry Salvado.
Salvado was charged with the crime of reckless imprudence resulting to
slight physical injuries in an information that was filed on January 6,
1983 with the then City Court of Manila, docketed as Criminal Case No.
027184. On October 19, 1984 a complaint for damages was filed by Roy
Camaso represented by his father, David Camaso, against Yakult
Philippines and Larry Salvado in the Regional Trial Court of Manila
docketed as Civil Case No. 84-27317.
In due course a decision was rendered in the civil case on May 26, 1989
ordering defendants to pay jointly and severally the plaintiff the sum of
P13,006.30 for actual expenses for medical services and hospital bills;
P3,000.00 attorney's fees and the costs of the suit. Although said
defendants appealed the judgment, they nevertheless filed a petition
for certiorari in the Court of Appeals challenging the jurisdiction of the
trial court over said civil case.
Petitioners' thesis is that the civil action for damages for injuries arising
from alleged criminal negligence of Salvado, being without malice,
cannot be filed independently of the criminal action under Article 33 of
the Civil Code. Further, it is contended that under Section 1, Rule 111 of
the 1985 Rules on Criminal Procedure such a separate civil action may
not be filed unless reservation thereof is expressly made.
In a decision dated November 3, 1989, the Court of Appeals dismissed
the petition.1 A motion for reconsideration thereof filed by petitioners
was denied on January 30, 1990. Hence this petition.
The petition is devoid of merit.
Section 1, Rule 111 of the 1985 Rules of Criminal Procedure provides as
follows:
SEC. 1. Institution of criminal and civil actions. — When
a criminal action is instituted, the civil action for the
recovery of civil liability is impliedly instituted with the
criminal action, unless the offended party waives the
civil action, reserves his right to institute it separately,
or institutes the civil action prior to the criminal action.
 Such civil action includes recovery of indemnity under
the Revised Penal Code, and damages under Articles 32,
33, 34 and 2176 of the Civil Code of the Philippines
arising from the same act or omission of the accused.
A waiver of any of the civil actions extinguishes the
others. The institution of, or the reservation of the right
to file, any of said civil actions separately waives the
others.
The reservation of the right to institute the separate civil
actions shall be made before the prosecution starts to
present its evidence and under circumstances affording
the offended party a reasonable opportunity to make
such reservation.
In no case may the offended party recover damages
twice for the same act or omission of the accused.
When the offended party seeks to enforce civil liability
against the accused by way of moral, nominal,
temperate or exemplary damages, the filing fees for
such civil action as provided in these Rules shall
constitute a first lien on the judgment except in an
award for actual damages.
In cases wherein the amount of damages, other than
actual, is alleged in the complaint or information, the
corresponding filing fees shall be paid by the offended
party upon the filing thereof in court for trial. (1a)
Although the incident in question and the actions arising therefrom were
instituted before the promulgation of the 1985 Rules of Criminal
Procedure, its provisions which are procedural may apply retrospectively
to the present case. 2
Under the aforecited provisions of the rule, the civil action for the
recovery of civil liability is impliedly instituted with the criminal action
unless the offended party waives the civil action, reserves his right to
institute it separately or institutes the civil action prior to the criminal
action.
Such civil action includes recovery of indemnity under the Revised Penal
Code, and damages under Articles 32, 33, 34 and 2176 of the Civil Code
of the Philippines arising from the same act or omission of the accused.
It is also provided that the reservation of the right to institute the
separate civil action shall be made before the prosecution starts to
present its evidence and under circumstances affording the offended
party a reasonable opportunity to make such reservation.
In this case, the offended party has not waived the civil action, nor
reserved the right to institute it separately. Neither has the offended
party instituted the civil action prior to the criminal action. However, the
civil action in this case was filed in court before the presentation of the
evidence for the prosecution in the criminal action of which the judge
presiding on the criminal case was duly informed, so that in the
disposition of the criminal action no damages was awarded.
The civil liability sought arising from the act or omission of the accused
in this case is a quasi delict as defined under Article 2176 of the Civil
Code as follows:
ART. 2176. Whoever by act or omission causes damage
to another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
The aforecited revised rule requiring such previous reservation also
covers quasi-delict as defined under Article 2176 of the Civil Code
arising from the same act or omission of the accused.
Although the separate civil action filed in this case was without previous
reservation in the criminal case, nevertheless since it was instituted
before the prosecution presented evidence in the criminal action, and
the judge handling the criminal case was informed thereof, then the
actual filing of the civil action is even far better than a compliance with
the requirement of an express reservation that should be made by the
offended party before the prosecution presents its evidence.
The purpose of this rule requiring reservation is to prevent the offended
party from recovering damages twice for the same act or omission.
Thus, the Court finds and so holds that the trial court had jurisdiction
over the separate civil action brought before it.
WHEREFORE, the petition is DENIED. The questioned decision of the
Court of Appeals dated November 3, 1989 and its resolution dated
January 30, 1990 are hereby AFFIRMED.
SO ORDERED.
Narvasa, Melencio
G.R. No. 74761 November 6, 1990
NATIVIDAD V. ANDAMO and EMMANUEL R. ANDAMO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT (First Civil Cases Division)
and MISSIONARIES OF OUR LADY OF LA SALETTE,
INC., respondents.
Lope E. Adriano for petitioners.
Padilla Law Office for private respondent.
FERNAN, C.J.:
The pivotal issue in this petition for certiorari, prohibition and
mandamus is whether a corporation, which has built through its agents,
waterpaths, water conductors and contrivances within its land, thereby
causing inundation and damage to an adjacent land, can be held civilly
liable for damages under Articles 2176 and 2177 of the Civil Code on
quasi-delicts such that the resulting civil case can proceed
independently of the criminal case.
The antecedent facts are as follows:
Petitioner spouses Emmanuel and Natividad Andamo are the owners of a
parcel of land situated in Biga (Biluso) Silang, Cavite which is adjacent
to that of private respondent, Missionaries of Our Lady of La Salette,
Inc., a religious corporation.
Within the land of respondent corporation, waterpaths and contrivances,
including an artificial lake, were constructed, which allegedly inundated
and eroded petitioners' land, caused a young man to drown, damaged
petitioners' crops and plants, washed away costly fences, endangered
the lives of petitioners and their laborers during rainy and stormy
seasons, and exposed plants and other improvements to destruction.
In July 1982, petitioners instituted a criminal action, docketed as
Criminal Case No. TG-907-82, before the Regional Trial Court of Cavite,
Branch 4 (Tagaytay City), against Efren Musngi, Orlando Sapuay and
Rutillo Mallillin, officers and directors of herein respondent corporation,
for destruction by means of inundation under Article 324 of the Revised
Penal Code.
Subsequently, on February 22, 1983, petitioners filed another action
against respondent corporation, this time a civil case, docketed as Civil
Case No. TG-748, for damages with prayer for the issuance of a writ of
preliminary injunction before the same court. 1
On March 11, 1983, respondent corporation filed its answer to the
complaint and opposition to the issuance of a writ of preliminary
injunction. Hearings were conducted including ocular inspections on the
land. However, on April 26, 1984, the trial court, acting on respondent
corporation's motion to dismiss or suspend the civil action, issued an
order suspending further hearings in Civil Case No, TG-748 until after
judgment in the related Criminal Case No. TG-907-82.
Resolving respondent corporation's motion to dismiss filed on June 22,
1984, the trial court issued on August 27, 1984 the disputed
order dismissing Civil Case No. TG-748 for lack of jurisdiction, as the
criminal case which was instituted ahead of the civil case was still
unresolved. Said order was anchored on the provision of Section 3 (a),
Rule III of the Rules of Court which provides that "criminal and civil
actions arising from the same offense may be instituted separately, but
after the criminal action has been commenced the civil action cannot be
instituted until final judgment has been rendered in the criminal
action." 2
Petitioners appealed from that order to the Intermediate Appellate
Court. 3
On February 17, 1986, respondent Appellate Court, First Civil Cases
Division, promulgated a decision 4 affirming the questioned order of the
trial court. 5 A motion for reconsideration filed by petitioners was denied
by the Appellate Court in its resolution dated May 19, 1986. 6
Directly at issue is the propriety of the dismissal of Civil Case No. TG-
748 in accordance with Section 3 (a) of Rule 111 of the Rules of Court.
Petitioners contend that the trial court and the Appellate Court erred in
dismissing Civil Case No. TG-748 since it is predicated on a quasi-delict.
Petitioners have raised a valid point.
It is axiomatic that the nature of an action filed in court is determined
by the facts alleged in the complaint as constituting the cause of
action. 7 The purpose of an action or suit and the law to govern it,
including the period of prescription, is to be determined not by the claim
of the party filing the action, made in his argument or brief, but rather
by the complaint itself, its allegations and prayer for relief. 8 The nature
of an action is not necessarily determined or controlled by its title or
heading but the body of the pleading or complaint itself. To avoid
possible denial of substantial justice due to legal technicalities, pleadings
as well as remedial laws should be liberally construed so that the
litigants may have ample opportunity to prove their respective claims. 9
Quoted hereunder are the pertinent portions of petitioners' complaint in
Civil Case No. TG-748:
4) That within defendant's land, likewise located at Biga
(Biluso), Silang, Cavite, adjacent on the right side of the
aforesaid land of plaintiffs, defendant constructed
waterpaths starting from the middle-right portion
thereof leading to a big hole or opening, also
constructed by defendant, thru the lower portion of its
concrete hollow-blocks fence situated on the right side
of its cemented gate fronting the provincial highway,
and connected by defendant to a man height inter-
connected cement culverts which were also constructed
and lain by defendant cross-wise beneath the tip of the
said cemented gate, the left-end of the said inter-
connected culverts again connected by defendant to a
big hole or opening thru the lower portion of the same
concrete hollowblocks fence on the left side of the said
cemented gate, which hole or opening is likewise
connected by defendant to the cemented mouth of a big
canal, also constructed by defendant, which runs
northward towards a big hole or opening which was also
built by defendant thru the lower portion of its concrete
hollow-blocks fence which separates the land of plaintiffs
from that of defendant (and which serves as the exit-
point of the floodwater coming from the land of
defendant, and at the same time, the entrance-point of
the same floodwater to the land of plaintiffs, year after
year, during rainy or stormy seasons.
5) That moreover, on the middle-left portion of its land
just beside the land of plaintiffs, defendant also
constructed an artificial lake, the base of which is soil,
which utilizes the water being channeled thereto from its
water system thru inter-connected galvanized iron pipes
(No. 2) and complimented by rain water during rainy or
stormy seasons, so much so that the water below it
seeps into, and the excess water above it inundates,
portions of the adjoining land of plaintiffs.
6) That as a result of the inundation brought about by
defendant's aforementioned water conductors,
contrivances and manipulators, a young man was
 drowned to death, while herein plaintiffs suffered and
will continue to suffer, as follows:
a) Portions of the land of plaintiffs were
eroded and converted to deep, wide and
long canals, such that the same can no
longer be planted to any crop or plant.
b) Costly fences constructed by plaintiffs
were, on several occasions, washed
away.
c) During rainy and stormy seasons the
lives of plaintiffs and their laborers are
always in danger.
d) Plants and other improvements on
other portions of the land of plaintiffs are
exposed to destruction. ... 10
A careful examination of the aforequoted complaint shows that the civil
action is one under Articles 2176 and 2177 of the Civil Code on quasi-
delicts. All the elements of a quasi-delict are present, to wit: (a)
damages suffered by the plaintiff, (b) fault or negligence of the
defendant, or some other person for whose acts he must respond; and
(c) the connection of cause and effect between the fault or negligence of
the defendant and the damages incurred by the plaintiff. 11
Clearly, from petitioner's complaint, the waterpaths and contrivances
built by respondent corporation are alleged to have inundated the land
of petitioners. There is therefore, an assertion of a causal connection
between the act of building these waterpaths and the damage sustained
by petitioners. Such action if proven constitutes fault or negligence
which may be the basis for the recovery of damages.
In the case of Samson vs. Dionisio, 12 the Court applied Article 1902,
now Article 2176 of the Civil Code and held that "any person who
without due authority constructs a bank or dike, stopping the flow or
communication between a creek or a lake and a river, thereby causing
loss and damages to a third party who, like the rest of the residents, is
entitled to the use and enjoyment of the stream or lake, shall be liable
to the payment of an indemnity for loss and damages to the injured
party.
While the property involved in the cited case belonged to the public
domain and the property subject of the instant case is privately owned,
the fact remains that petitioners' complaint sufficiently alleges that
petitioners have sustained and will continue to sustain damage due to
the waterpaths and contrivances built by respondent corporation.
Indeed, the recitals of the complaint, the alleged presence of damage to
the petitioners, the act or omission of respondent corporation
supposedly constituting fault or negligence, and the causal connection
between the act and the damage, with no pre-existing contractual
obligation between the parties make a clear case of a quasi
delict or culpa aquiliana.
It must be stressed that the use of one's property is not without
limitations. Article 431 of the Civil Code provides that "the owner of a
thing cannot make use thereof in such a manner as to injure the rights
of a third person." SIC UTERE TUO UT ALIENUM NON LAEDAS.
Moreover, adjoining landowners have mutual and reciprocal duties which
require that each must use his own land in a reasonable manner so as
not to infringe upon the rights and interests of others. Although we
recognize the right of an owner to build structures on his land, such
structures must be so constructed and maintained using all reasonable
care so that they cannot be dangerous to adjoining landowners and can
withstand the usual and expected forces of nature. If the structures
cause injury or damage to an adjoining landowner or a third person, the
latter can claim indemnification for the injury or damage suffered.
Article 2176 of the Civil Code imposes a civil liability on a person for
damage caused by his act or omission constituting fault or negligence,
thus:
Article 2176. Whoever by act or omission causes
damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual
 relation between the parties, is called a quasi-delict and
is governed by the provisions of this chapter.
Article 2176, whenever it refers to "fault or negligence", covers not only
acts "not punishable by law" but also acts criminal in character, whether
intentional and voluntary or negligent. Consequently, a separate civil
action lies against the offender in a criminal act, whether or not he is
criminally prosecuted and found guilty or acquitted, provided that the
offended party is not allowed, (if the tortfeasor is actually charged also
criminally), to recover damages on both scores, and would be entitled in
such eventuality only to the bigger award of the two, assuming the
awards made in the two cases vary. 13
The distinctness of quasi-delicta is shown in Article 2177 of the Civil
Code, which states:
Article 2177. Responsibility for fault or negligence under
the preceding article is entirely separate and distinct
from the civil liability arising from negligence under the
Penal Code. But the plaintiff cannot recover damages
twice for the same act or omission of the defendant.
According to the Report of the Code Commission "the foregoing
provision though at first sight startling, is not so novel or extraordinary
when we consider the exact nature of criminal and civil negligence. The
former is a violation of the criminal law, while the latter is a distinct and
independent negligence, which is a "culpa aquiliana" or quasi-delict, of
ancient origin, having always had its own foundation and individuality,
separate from criminal negligence. Such distinction between criminal
negligence and "culpa extra-contractual" or "cuasi-delito" has been
sustained by decisions of the Supreme Court of Spain ... 14
In the case of Castillo vs. Court of Appeals, 15 this Court held that a
quasi-delict or culpa aquiliana is a separate legal institution under the
Civil Code with a substantivity all its own, and individuality that is
entirely apart and independent from a delict or crime — a distinction
exists between the civil liability arising from a crime and the
responsibility for quasi-delicts or culpa extra-contractual. The same
negligence causing damages may produce civil liability arising from a
crime under the Penal Code, or create an action for quasi-delicts or
culpa extra-contractual under the Civil Code. Therefore, the acquittal or
conviction in the criminal case is entirely irrelevant in the civil case,
unless, of course, in the event of an acquittal where the court has
declared that the fact from which the civil action arose did not exist, in
which case the extinction of the criminal liability would carry with it the
extinction of the civil liability.
In Azucena vs. Potenciano, 16 the Court declared that in quasi-delicts,
"(t)he civil action is entirely independent of the criminal case according
to Articles 33 and 2177 of the Civil Code. There can be no logical
conclusion than this, for to subordinate the civil action contemplated in
the said articles to the result of the criminal prosecution — whether it be
conviction or acquittal — would render meaningless the independent
character of the civil action and the clear injunction in Article 31, that
his action may proceed independently of the criminal proceedings and
regardless of the result of the latter."
WHEREFORE, the assailed decision dated February 17, 1986 of the then
Intermediate Appellate Court affirming the order of dismissal of the
Regional Trial Court of Cavite, Branch 18 (Tagaytay City) dated August
17, 1984 is hereby REVERSED and SET ASIDE. The trial court is ordered
to reinstate Civil Case No. TG-748 entitled "Natividad V. Andamo and
Emmanuel R. Andamo vs. Missionaries of Our Lady of La Salette Inc."
and to proceed with the hearing of the case with dispatch. This decision
is immediately executory. Costs against respondent corporation.
SO ORDERED.
SAN ILDEFONSO LINES, INC., and EDUARDO JAVIER, petitioners,
vs. COURT OF APPEALS (Thirteenth Division) and PIONEER
INSURANCE and SURETY CORPORATION, respondents.
DECISION
MARTINEZ, J.:
At around 3:30 in the afternoon of June 24, 1991, a Toyota Lite Ace
Van being driven by its owner Annie U. Jao and a passenger bus of herein
petitioner San Ildefonso Lines, Inc. (hereafter, SILI) figured in a vehicular
mishap at the intersection of Julia Vargas Avenue and Rodriguez Lanuza
Avenue in Pasig, Metro Manila, totally wrecking the Toyota van and
injuring Ms. Jao and her two (2) passengers in the process.
A criminal case was thereafter filed with the Regional Trial Court of
Pasig on September 18, 1991 charging the driver of the bus, herein
petitioner Eduardo Javier, with reckless imprudence resulting in damage
to property with multiple physical injuries.
About four (4) months later, or on January 13, 1992, herein private
respondent Pioneer Insurance and Surety Corporation (PISC), as insurer
of the van and subrogee, filed a case for damages against petitioner SILI
with the Regional Trial Court of Manila, seeking to recover the sums it
paid the assured under a motor vehicle insurance policy as well as other
damages, totaling P564,500.00 (P454,000.00 as actual/compensatory
damages; P50,000.00 as exemplary damages; P50,000.00 as attorney's
fees; P10,000.00 as litigation expenses; and P500.00 as appearance
fees.)[1]
With the issues having been joined upon the filing of the petitioners'
answer to the complaint for damages and after submission by the parties
of their respective pre-trial briefs, petitioners filed on September 18, 1992
a Manifestation and Motion to Suspend Civil Proceedings grounded on the
pendency of the criminal case against petitioner Javier in the Pasig RTC
and the failure of respondent PISC to make a reservation to file a separate
damage suit in said criminal action. This was denied by the Manila
Regional Trial Court in its Order dated July 21, 1993,[2] ruling thus:
"Answering the first question thus posed, the court holds that plaintiff
may legally institute the present civil action even in the absence of a
reservation in the criminal action. This is so because it falls among the
very exceptions to the rule cited by the movant.
"It is true that the general rule is that once a criminal action has been
instituted, then civil action based thereon is deemed instituted together
with the criminal action, such that if the offended party did not reserve
the filing of the civil action when the criminal action was filed, then such
filing of the civil action is therefore barred; on the other hand, if there
was such reservation, still the civil action cannot be instituted until final
judgment has been rendered in the criminal action;
"But, this rule (Section 2, Rule 111, Revised Rules of Court) is subject to
exemptions, the same being those provided for in Section 3 of the same
rule which states:
'Section 3. When civil action may proceed independently. - In the cases
provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the
Philippines, the independent civil action which was been reserved may
be brought by the offended party, shall proceed independently of the
criminal action, and shall require only a preponderance of evidence.'
"Besides, the requirement in Section 2 of Rule 111 of the former Rules
on Criminal Procedure that there be a reservation in the criminal case of
the right to institute an independent civil action has been declared as
not in accordance with law. It is regarded as an unauthorized
amendment to our substantive law, i.e., the Civil Code which does not
require such reservation. In fact, the reservation of the right to file an
independent civil action has been deleted from Section 2, Rule 111 of
the 1985 Rules on Criminal Procedure, in consonance with the decisions
of this Court declaring such requirement of a reservation as ineffective.
(Bonite vs. Zosa, 162 SCRA 180)
"Further, the Court rules that a subrogee-plaintiff may institute and
prosecute the civil action, it being allowed by Article 2207 of the Civil
Code."
After their motion for reconsideration of said July 21, 1993 Order was
denied, petitioners elevated the matter to this Court via petition
for certiorari which was, however, referred to public respondent Court of
Appeals for disposition. On February 24, 1995, a decision adverse to
petitioners once again was rendered by respondent court, upholding the
assailed Manila Regional Trial Court Order in this wise:
"A separate civil action lies against the offender in a criminal act,
whether or not he is criminally prosecuted and found guilty or acquitted,
provided that the offended party is not allowed (if the tortfeasor is
actually charged also criminally), to recover damages on both scores,
and would be entitled in such eventuality only to the bigger award of the
two, assuming the awards made in the two cases vary.
"To subordinate the civil action contemplated in the said articles to the
result of the criminal prosecution - whether it be conviction or acquittal -
would render meaningless the independent character of the civil action
and the clear injunction in Art. 31, that this action may proceed
independently of the criminal proceedings and regardless of the result of
the latter.
"In Yakult Phil. vs. CA, the Supreme Court said:
'Even if there was no reservation in the criminal case and that the civil
action was not filed before the filing of the criminal action but before the
prosecution presented evidence in the criminal action, and the judge
handling the criminal case was informed thereof, then the actual filing of
the civil action is even far better than a compliance with the
requirement of an express reservation that should be made by the
offended party before the prosecution presented its evidence.'
"The purpose of this rule requiring reservation is to prevent the offended
party from recovering damages twice for the same act or omission.
"Substantial compliance with the reservation requirement may,
therefore, be made by making a manifestation in the criminal case that
the private respondent has instituted a separate and independent civil
action for damages.
"Oft-repeated is the dictum that courts should not place undue
importance on technicalities when by so doing, substantial justice is
sacrificed. While the rules of procedure require adherence, it must be
remembered that said rules of procedure are intended to promote, not
defeat, substantial justice, and therefore, they should not be applied in
a very rigid and technical sense."
Hence, this petition for review after a motion for reconsideration of said
respondent court judgment was denied.
The two (2) crucial issues to be resolved, as posited by petitioners,
are:
1) If a criminal case was filed, can an independent civil action based
on quasi-delict under Article 2176 of the Civil Code be filed if no
reservation was made in the said criminal case?
2) Can a subrogee of an offended party maintain an independent civil
action during the pendency of a criminal action when no reservation of
the right to file an independent civil action was made in the criminal action
and despite the fact that the private complainant is actively participating
through a private prosecutor in the aforementioned criminal case?
We rule for petitioners.
On the chief issue of "reservation", at the fore is Section 3, Rule 111
of the Rules of Court which reads:
"Sec. 3. When civil action may proceed independently. -- In the cases
provided for in Articles 32, 33, 34 and 2176 of the Civil Code of the
Philippines, the independent civil action which has been reserved may
be brought by the offended party, shall proceed independently of the
criminal action, and shall require only a preponderance of evidence."
There is no dispute that these so-called "independent civil actions" based
on the aforementioned Civil Code articles are the exceptions to the
primacy of the criminal action over the civil action as set forth in Section
2 of Rule 111.[3] However, it is easily deducible from the present wording
of Section 3 as brought about by the 1988 amendments to the Rules on
Criminal Procedure -- particularly the phrase " which has been reserved"
-- that the "independent" character of these civil actions does not do away
with the reservation requirement. In other words, prior reservation is a
condition sine qua non before any of these independent civil actions can
be instituted and thereafter have a continuous determination apart from
or simultaneous with the criminal action. That this should now be the
controlling procedural rule is confirmed by no less than retired Justice
Jose Y. Feria, remedial law expert and a member of the committee which
drafted the 1988 amendments, whose learned explanation on the matter
was aptly pointed out by petitioners, to wit:
"The 1988 amendment expands the scope of the civil action which is
deemed impliedly instituted with the criminal action unless waived,
reserved or previously instituted xxx.
Under the present Rule as amended, such a civil action includes not only
recovery of indemnity under the Revised Penal Code and damages under
Articles 32, 33, 34 of the Civil Code of the Philippines, but also damages
under Article 2176 of the said code. xxx
Objections were raised to the inclusion in this Rule of quasi-delicts under
Article 2176 of the Civil Code of the Philippines. However, in view of
Article 2177 of the said code which provides that the offended party
may not recover twice for the same act or omission of the accused, and
in line with the policy of avoiding multiplicity of suits, these objections
were overruled. In any event, the offended party is not precluded from
filing a civil action to recover damages arising from quasi-delict before
the institution of the criminal action, or from reserving his right to file
such a separate civil action, just as he is not precluded from filing a civil
action for damages under Articles 32, 33 and 34 before the institution of
the criminal action, or from reserving his right to file such a separate
civil action. It is only in those cases where the offended party has not
previously filed a civil action or has not reserved his right to file a
separate civil action that his civil action is deemed impliedly instituted
with the criminal action.
It should be noted that while it was ruled in Abella vs. Marave (57 SCRA
106) that a reservation of the right to file an independent civil action is
not necessary, such a reservation is necessary under the amended rule.
Without such reservation, the civil action is deemed impliedly instituted
with the criminal action, unless previously waived or
instituted. (Underscoring ours. Justice Jose Y. Feria [Ret.], 1988
Amendments to the 1985 Rules on Criminal Procedure, a pamphlet,
published by Central Lawbook Publishing Co., Inc., Philippine Legal
Studies, Series No. 3, 5-6).[4]
Sharing the same view on the indispensability of a prior reservation
is Mr. Justice Florenz D. Regalado, whose analysis of the historical
changes in Rule 111 since the 1964 Rules of Court is equally illuminating.
Thus,
"1. Under Rule 111 of the 1964 Rules of Court, the civil liability arising
from the offense charged was impliedly instituted with the criminal
action, unless such civil action was expressly waived or reserved. The
offended party was authorized to bring an independent civil action in the
cases provided for in Articles 31, 32, 33, 34 and 2177 of the Civil Code
provided such right was reserved.
In the 1985 Rules on Criminal Procedure, the same Rule 111 thereof
reiterated said provision on the civil liability arising from the offense
charged. The independent civil actions, however, were limited to the
cases provided for in Articles 32, 33 and 34 of the Civil Code, obviously
because the actions contemplated in Articles 31 and 2177 of said Code
are not liabilities ex delicto. Furthermore, no reservation was required in
order the civil actions in said Articles 32, 33 and 34 may be pursued
separately.
2. The present amendments introduced by the Supreme Court have the
following notable features on this particular procedural aspect, viz:
a. The civil action which is impliedly instituted with the
criminal action, barring a waiver, reservation or
prior institution thereof, need not arise from the
offense charged, as the phrase 'arising from the
offense charged' which creates that nexus has
been specifically eliminated.
b. The independent civil actions contemplated in the
present Rule 111 include the quasi-
delicts provided for in Art. 2176 of the Civil
Code, in addition to the cases provided in Arts.
32, 33 and 34 thereof. It is necessary, however,
that the civil liability under all the said articles
arise 'from the same act or omission of the
accused.' Furthermore, a reservation of the right
to institute these separate civil actions is again
required, otherwise, said civil actions are
impliedly instituted with the criminal action,
unless the former are waived or filed ahead of
the criminal action." (Emphasis supplied.)[5]
In fact, a deeper reading of the "Yakult Phils. vs. CA" case[6] relied
upon by respondent court reveals an acknowledgement of the reservation
requirement. After recognizing that the civil case instituted by private
respondent therein Roy Camaso (represented by his father David
Camaso) against petitioner Yakult Phils. (the owner of the motorcycle that
sideswiped Roy Camaso, only five years old at the time of the accident)
and Larry Salvado (the driver of the motorcycle) during the pendency of
the criminal case against Salvado for reckless imprudence resulting to
slight physical injuries, as one based on tort, this Court said:
"The civil liability sought arising from the act or omission of the accused
in this case is a quasi-delict as defined under Article 2176 of the Civil
Code as follows:
xxxxxxxxx
"The aforecited rule [referring to the amended Section 1,
Rule111] requiring such previous reservation also covers quasi-delict as
defined under Article 2176 of the Civil Code arising from the same act or
omission of the accused"(Underscoring supplied).
But what prompted the Court to validate the institution and non-
suspension of the civil case involved in "Yakult" was the peculiar facts
attendant therein. Thus,
"Although the separate civil action filed in this case was without previous
reservation in the criminal case, nevertheless since it was instituted
before the prosecution presented evidence in the criminal action, and
the judge handling the criminal case was informed thereof, then the
actual filing of the civil action is even far better than a compliance with
the requirement of an express reservation that should be made by the
offended party before the prosecution presents its evidence"
The distinct factual scenario in "Yakult" simply does not obtain in this
case. No satisfactory proof exists to show that private respondent PISC's
damage suit was instituted before the prosecution presented its evidence
in the criminal case pending in the Pasig Regional Trial Court. Neither is
there any indication that the judge presiding over the criminal action has
been made aware of the civil case. It is in this light that reliance on the
"Yakult" case is indeed misplaced.
Now that the necessity of a prior reservation is the standing rule that
shall govern the institution of the independent civil actions referred to in
Rule 111 of the Rules of Court, past pronouncements that view the
reservation requirement as an "unauthorized amendment" to substantive
law - i.e., the Civil Code, should no longer be controlling. There must be
a renewed adherence to the time-honored dictum that procedural rules
are designed, not to defeat, but to safeguard the ends of substantial
justice. And for this noble reason, no less than the Constitution itself has
mandated this Court to promulgate rules concerning the enforcement of
rights with the end in view of providing a simplified and inexpensive
procedure for the speedy disposition of cases which should not diminish,
increase or modify substantive rights.[7] Far from altering substantive
rights, the primary purpose of the reservation is, to borrow the words of
the Court in "Caos v. Peralta":[8]
" to avoid multiplicity of suits, to guard against oppression and abuse, to
prevent delays, to clear congested dockets, to simplify the work of the
trial court; in short, the attainment of justice with the least expense and
vexation to the parties-litigants."
Clearly then, private respondent PISC, as subrogee under Article
2207 of the Civil Code,[9] is not exempt from the reservation requirement
with respect to its damages suit based on quasi-delict arising from the
same act or omission of petitioner Javier complained of in the criminal
case. As private respondent PISC merely stepped into the shoes of Ms.
Jao (as owner of the insured Toyota van), then it is bound to observe the
procedural requirements which Ms. Jao ought to follow had she herself
instituted the civil case.
WHEREFORE, premises considered, the assailed decision of the
Court of Appeals dated February 24, 1995 and the Resolution dated April
3, 1995 denying the motion for reconsideration thereof are hereby
REVERSED and SET ASIDE. The "MANIFESTATION AND MOTION TO
SUSPEND CIVIL PROCEEDINGS" filed by petitioners is GRANTED.
SO ORDERED.
G.R. No. 80194 March 21, 1989
EDGAR JARANTILLA, petitioner,
vs.
COURT OF APPEALS and JOSE KUAN SING, respondents.
Corazon Miraflores and Vicente P. Billena for petitioner.
Manuel S. Gemarino for private respondent.
instituted since therein plaintiff failed to reserve the civil aspect and
actively participated in the criminal case. 8
Thereafter, acting on a motion to dismiss of therein defendant, the trial
court issued on April 3, 1975 an order of denial, with the suggestion
that "(t)o enrich our jurisprudence, it is suggested that the defendant
brings (sic) this ruling to the Supreme Court by certiorari or other
appropriate remedy, to review the ruling of the court". 9

REGALADO, J.:
The records show that private respondent Jose Kuan Sing was "side-
swiped by a vehicle in the evening of July 7, 1971 in lznart Street, Iloilo
City" 1 The respondent Court of Appeals concurred in the findings of the
court a quo that the said vehicle which figured in the mishap, a
Volkswagen (Beetle type) car, was then driven by petitioner Edgar
Jarantilla along said street toward the direction of the provincial capitol,
and that private respondent sustained physical injuries as a
consequence. 2
On June 17, 1975, petitioner filed in this Court a petition for certiorari,
prohibition and mandamus, which was docketed as G.R. No. L-
40992, 10 assailing the aforesaid order of the trial court. Said petition
was dismissed for lack of merit in the Court's resolution of July 23,
1975, and a motion for reconsideration thereof was denied for the same
reason in a resolution of October 28, 1975. 11
After trial, the court below rendered judgment on May 23, 1977 in favor
of the herein private respondent and ordering herein petitioner to pay
the former the sum of P 6,920.00 for hospitalization, medicines and so
forth, P2,000.00 for other actual expenses, P25,000.00 for moral
damages, P5,000.00 for attorney's fees, and costs. 12

Petitioner was accordingly charged before the then City Court of Iloilo
On July 29, 1987, the respondent Court of Appeals 13 affirmed the
for serious physical injuries thru reckless imprudence in Criminal Case
decision of the lower court except as to the award for moral damages
No. 47207 thereof. 3 Private respondent, as the complaining witness
which it reduced from P25,000.00 to P18,000.00. A motion for
therein, did not reserve his right to institute a separate civil action and
reconsideration was denied by respondent court on September 18,
he intervened in the prosecution of said criminal case through a private
1987. 14
prosecutor. 4 Petitioner was acquitted in said criminal case "on
reasonable doubt".5
The main issue for resolution by Us in the present recourse is whether
the private respondent, who was the complainant in the criminal action
On October 30, 1974, private respondent filed a complaint against the
for physical injuries thru reckless imprudence and who participated in
petitioner in the former Court of First Instance of Iloilo, Branch
the prosecution thereof without reserving the civil action arising from
IV, 6 docketed therein as Civil Case No. 9976, and which civil action
the act or omission complained of, can file a separate action for civil
involved the same subject matter and act complained of in Criminal
liability arising from the same act or omission where the herein
Case No. 47027. 7 In his answer filed therein, the petitioner alleged as
petitioner was acquitted in the criminal action on reasonable doubt and
special and affirmative detenses that the private respondent had no
no civil liability was adjudicated or awarded in the judgment of acquittal.
cause of action and, additionally, that the latter's cause of action, if any,
is barred by the prior judgment in Criminal Case No. 47207 inasmuch as
when said criminal case was instituted the civil liability was also deemed Prefatorily, We note that petitioner raises a collateral issue by faulting
the respondent court for refusing to resolve an assignment of error in
his appeal therein, said respondent court holding that the main issue
had been passed upon by this Court in G.R. No. L-40992 hereinbefore
mentioned. It is petitioner's position that the aforesaid two resolutions
of the Court in said case, the first dismissing the petition and the second
denying the motion for reconsideration, do not constitute the "law of the
case' which would control the subsequent proceed ings in this
controversy.
1. We incline favorably to petitioner's submission on this score.
The "doctrine of the law of the case" has no application at the aforesaid
posture of the proceedings when the two resolutions were handed down.
While it may be true that G.R. No. L-40992 may have involved some of
the issues which were thereafter submitted for resolution on the merits
by the two lower courts, the proceedings involved there was one
for certiorari, prohibition and mandamus assailing an interlocutory order
of the court a quo, specifically, its order denying therein defendants
motion to dismiss. This Court, without rendering a specific opinion or
explanation as to the legal and factual bases on which its two
resolutions were predicated, simply dismissed the special civil action on
that incident for lack of merit. It may very well be that such resolution
was premised on the fact that the Court, at that stage and on the basis
of the facts then presented, did not consider that the denial order of the
court a quo was tainted with grave abuse of discretion. 15 To repeat, no
rationale for such resolutions having been expounded on the merits of
that action, no law of the case may be said to have been laid down in
G.R. No. L-40992 to justify the respondent court's refusal to consider
petitioner's claim that his former acquittal barred the separate action.
'Law of the case' has been defined as the opinion
delivered on a former appeal. More specifically, it means
that whatever is once irrevocably established, as
the controlling legal rule of decision between the same
parties in the same case continues to be the law of the
case, whether correct on general principles or not, so
long as the facts on which such decision was predicated
continue to be the facts of the case before the court (21
C.J.S. 330). (Emphasis supplied). 16
It need not be stated that the Supreme Court being the
court of last resort, is the final arbiter of all legal
questions properly brought before it and that
its decision in any given case constitutes the law of that
particular case . . . (Emphasis supplied). 17
It is a rule of general application that the decision of an
appellate court in a case is the law of the case on the
points presented throughout all the subsequent
proceedings in the case in both the trial and the
appellate courts, and no question necessarily involved
and decided on that appeal will be considered on a
second appeal or writ of error in the same case,
provided the facts and issues are substantially the same
as those on which the first question rested and,
according to some authorities, provided the decision is
on the merits . . . 18
2. With the foregoing ancillary issue out of the way, We now consider
the principal plaint of petitioner.
Apropos to such resolution is the settled rule that the same act or
omission (in this case, the negligent sideswiping of private respondent)
can create two kinds of liability on the part of the offender, that is, civil
liability ex delicto and civil liability ex quasi delicto. Since the same
negligence can give rise either to a delict or crime or to a quasi-delict or
tort, either of these two types of civil liability may be enforced against
the culprit, subject to the caveat under Article 2177 of the Civil Code
that the offended party cannot recover damages under both types of
liability. 19
We also note the reminder of petitioner that in Roa vs. De la Cruz, et
al., 20 it was held that where the offended party elected to claim
damages arising from the offense charged in the criminal case through
her intervention as a private prosecutor, the final judgment rendered
therein constituted a bar to the subsequent civil action based upon the
same cause. It is meet, however, not to lose sight of the fact that the
criminal action involved therein was for serious oral defamation which,
while within the contemplation of an independent civil action under
Article 33 of the Civil Code, constitutes only a penal omen and cannot
otherwise be considered as a quasi-delict or culpa aquiliana under
Articles 2176 and 2177 of the Civil Code. And while petitioner draws
attention to the supposed reiteration of the Roa doctrine in the later
case of Azucena vs. Potenciano, et al., 21 this time involving damage to
property through negligence as to make out a case of quasi-delict under
Articles 2176 and 2180 of the Civil Code, such secondary reliance is
misplaced since the therein plaintiff Azucena did not intervene in the
criminal action against defendant Potenciano. The citation of Roa in the
later case of Azucena was, therefore, clearly obiter and affords no
comfort to petitioner.
These are aside from the fact that there have been doctrinal, and even
statutory, 22 changes on the matter of civil actions arising from criminal
offenses and quasi-delicts. We will reserve our discussion on the
statutory aspects for another case and time and, for the nonce, We will
consider the doctrinal developments on this issue.
In the case under consideration, private respondent participated and
intervened in the prosecution of the criminal suit against petitioner.
Under the present jurisprudential milieu, where the trial court acquits
the accused on reasonable doubt, it could very well make a pronounce
ment on the civil liability of the accused 23 and the complainant could
file a petition for mandamus to compel the trial court to include such
civil liability in the judgment of acquittal. 24
Private respondent, as already stated, filed a separate civil aciton after
such acquittal. This is allowed under Article 29 of the Civil Code. We
have ruled in the relatively recent case of Lontoc vs. MD Transit & Taxi
Co., Inc., et al. 25that:
In view of the fact that the defendant-appellee de la
Cruz was acquitted on the ground that 'his guilt was not
proven beyond reasonable doubt' the plaintiff-appellant
has the right to institute a separate civil action to
recover damages from the defendants-appellants (See
Mendoza vs. Arrieta, 91 SCRA 113). The well-settled
doctrine is that a person, while not criminally liable may
still be civilly liable. 'The judgment of acquittal
extinguishes the civil liability of the accused only when it
includes a declaration that the facts from which the civil
liability might arise did not exist'. (Padilla vs. Court of
Appeals, 129 SCRA 558 cited in People vs. Rogelio Ligon
y Tria, et al., G.R. No. 74041, July 29, 1987; Filomeno
Urbano vs. Intermediate Appellate Court, G.R. No.
72964, January 7, 1988). The ruling is based on Article
29 of the Civil Code which provides:
When the accused in a criminal
prosecution is acquitted on the ground
that his guilt has not been proved
beyond reasonable doubt, a civil action
for damages for the same act or
omission may be instituted. Such action
requires only a preponderance of
evidence ... 26
Another consideration in favor of private respondent is the doctrine that
the failure of the court to make any pronouncement, favorable or
unfavorable, as to the civil liability of the accused amounts to a
reservation of the right to have the civil liability litigated and determined
in a separate action. The rules nowhere provide that if the court fails to
determine the civil liability it becomes no longer enforceable. 27
Furthermore, in the present case the civil liability sought to be
recovered through the application of Article 29 is no longer that based
on or arising from the criminal offense. There is persuasive logic in the
view that, under such circumstances, the acquittal of the accused
foreclosed the civil liability based on Article 100 of the Revised Penal
Code which presupposes the existence of criminal liability or requires a
conviction of the offense charged. Divested of its penal element by such
acquittal, the causative act or omission becomes in effect a quasi-delict,
hence only a civil action based thereon may be instituted or prosecuted
thereafter, which action can be proved by mere preponderance of
evidence. 28 Complementary to such considerations, Article 29
enunciates the rule, as already stated, that a civil action for damages is
not precluded by an acquittal on reasonable doubt for the same criminal
act or omission.
The allegations of the complaint filed by the private respondent supports
and is constitutive of a case for a quasi-delict committed by the
petitioner, thus:
3. That in the evening of July 7, 197l at
about 7:00 o'clock, the plaintiff crossed
Iznart Street from his restaurant
situated at 220 lznart St., Iloilo City,
Philippines, on his way to a meeting of
the Cantonese Club at Aldeguer Street,
Iloilo City and while he was standing on
the middle of the street as there were
vehicles coming from the Provincial
Building towards Plazoleta Gay, Iloilo
City, he was bumped and sideswiped by
Volkswagen car with plate No. B-2508 W
which was on its way from Plazoleta Gay
towards the Provincial Capitol, Iloilo City,
which car was being driven by the
defendant in a reckless and negligent
manner, at an excessive rate of speed
and in violation of the provisions of the
Revised Motor Vehicle (sic) as amended,
in relation to the Land Transportation
and Traffic Code as well as in violation of
existing city ordinances, and by reason
of his inexcusable lack of precaution and
failure to act with due negligence and by
failing to take into consideration (sic) his
degree of intelligence, the atmospheric
conditions of the place as well as the
width, traffic, visibility and other
conditions of lznart Street; 29
Since this action is based on a quasi-delict, the failure of the respondent
to reserve his right to file a separate civil case and his intervention in
the criminal case did not bar him from filing such separate civil action
for damages. 30 The Court has also heretofore ruled in Elcano vs.
Hill 31 that —
... a separate civil action lies against the offender in a
criminal act whether or not he is criminally prosecuted
and found guilty or acquitted, provided that the offended
party is not allowed, if he is also actually charged
criminally, to recover damages on both scores; and
would be entitled in such eventuality only to the bigger
award of the two, assuming the awards made in the two
cases vary. In other words, the extinction of civil liability
referred to in Par. (c) of Sec. 3 Rule 111, refers
exclusively to civil liability founded on Article 100 of the
Revised Penal Code; whereas the civil liability for the
same act considered as a quasi-delict only and not as a
crime is not extinguished even by a declaration in the
criminal case that the criminal act charged has not
happened or has not been committed by the accused . .
.
The aforecited case of Lontoc vs. MD Transit & Taxi Co., Inc., et al.
involved virtually the same factual situation. The Court, in arriving at
the conclusion hereinbefore quoted, expressly declared that the failure
of the therein plaintiff to reserve his right to file a separate civil case is
not fatal; that his intervention in the criminal case did not bar him from
filing a separate civil action for damages, especially considering that the
accused therein was acquitted because his guilt was not proved beyond
reasonable doubt; that the two cases were anchored on two different
causes of action, the criminal case being on a violation of Article 365 of
the Revised Penal Code while the subsequent complaint for damages
was based on a quasi-delict; and that in the judgment in the criminal
case the aspect of civil liability was not passed upon and resolved.
Consequently, said civil case may proceed as authorized by Article 29 of
the Civil Code.
Our initial adverse observation on a portion of the decision of
respondent court aside, We hold that on the issues decisive of this case
it did not err in sustaining the decision a quo.
WHEREFORE, the writ prayed for is hereby DENIED and the decision of
the respondent Court of Appeals is AFFIRMED, without costs.
SO ORDERED.
G.R. No. 88582 March 5, 1991
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
HEINRICH S. RITTER, accused-appellant,
The Solicitor General for plaintiff-appellee.
Esteban B. Bautista for accused-appellant.
GUTIERREZ, JR., J.:
The appellant challenges his conviction of the crime involving a young
girl of about 12 years old who had been allegedly raped and who later
died because of a foreign object left inside her vaginal canal.
Heinrich Stefan Ritter was charged with the crime of rape with homicide
under an information which reads:
That on or about the tenth (10th day of October, 1986 in the
City of Olongapo, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused with lewd design
and with intent to kill one Rosario Baluyot, a woman under
twelve (12) years of age, did then and there wilfully, unlawfully
and feloniously have carnal knowledge of said Rosario Baluyot
and inserted a foreign object into the vaginal canal of said
Rosario Baluyot which caused her death shortly thereafter, to
the damage and prejudice of her relatives. (66)
When arraigned, the accused pleaded "Not Guilty". Thereafter, the case
was set for trial on the merits.
To prove the guilt of the accused, the prosecutor presented the following
witnesses, namely: (1) Jessie Ramirez, (2) Maria Burgos y Turla, (3)
P/Cpl. Mariano Victoria, (4) Policarpio Baluyot, (5) Dr. Reino Rosete, (6)
Sumulong Daniel, (7) Jessica Herrera, (8) Sister Eva Palencia, (9)
Conrado Salonga, (10) Dr. Devonne Loop, (11) Dr. Leo Cruz, (12) Paul
Maclor, (13) Aida Sarmiento, (14) Patricia Prollamanta (15) Mel Santos,
(16) Lorna Limos, (17) Eduard Lee Bungarner, (18) Ronaldo Marquez,
(19) Tom Bonte, (20) 2nd Asst. City Fiscal Nini Alcala, (21) lst Asst. City
Fiscal Dorentino Z. Floresta, (22) Corazon Caber, (23) Rodolfo Mercurio
and (24) Fe Israel.
On the other hand, the defense offered in evidence Exhibits "1" to "24"
and the testimonies of (1) Heinrich S. Ritter, (2) Father Roque
Villanueva, (3) Angelita Amulong (4) Gaspar Alcantara, (5) Dr. Val
Barcinal and (6) Dr. Pedro C. Solis.
The facts of the case upon which the lower court based its finding of
guilt beyond reasonable doubt are summarized in its decision, as
follows:
The people's evidence show that on October 10, 1986 about
midnight, accused Heinrich Stefan Ritter brought a boy and girl
namely: Jessie Ramirez and Rosario Baluyot inside his hotel
room at MGM Hotel along Magsaysay Drive, Olongapo City.
These two (2) children were chosen from among a bunch of
street children. Once inside the hotel room accused told them to
take a bath. Jessie Ramirez, alias "Egan", was the first to take a
bath and when he came out Rosario Baluyot went to the
bathroom to do the same. While Rosario Baluyot was inside the
bathroom, accused Ritter took out some pictures depicting
dressed up young boys, and put them on top of the table. Other
things which were taken out and placed on top of a table were
three (3) other objects which he described as like that of a vicks
inhaler. One of these objects the accused played with his hands
and placed it on his palms. The color of which is grayish blue
which turned out later to be the foreign object which was
inserted inside the vagina of Rosario Baluyot. The other objects
were later established to be anti-nasal inhalers against pollution
purchased by the accused in Bangkok when he went there as a
tourist. While Rosario was in the bathroom, accused told
Ramirez to lay down on bed, and so did the accused. He then
started masturbating the young boy and also guided the boy's
hand for him to be masturbated, so that they masturbated each
other, while they were both naked, and he gave Jessie Ramirez
an erection. When Rosario Baluyot came out of the bathroom,
she was told to remove her clothes by accused and to join him
in bed. The accused then placed himself between the two (2)
children and accused started fingering Rosario.
At this time, Ramirez was already sleepy, but Rosario touched
him to call his attention. He looked, and he saw accused placing
his penis against the vagina of Rosario and that he was trying to
penetrate the vagina but it would not fit. After what he saw,
Ramirez did not anymore bother to look because he was sleepy
and fell asleep.
The following morning, the accused, whom the juveniles
described as an "American, paid Ramirez alias"Egan" P200.00
and Rosario P300.00. He then left them in the hotel. After the
American left, they went downstairs, and Rosario told Egan that
the American inserted something in her vagina. But they could
not do anything anymore, because the American had already
left, and neither did they report the matter to the police.
Sometime the following day, Jessie saw Rosario and he asked
her whether the object was already removed from her body and
Rosario said "Yes". However, Jessie Ramirez claimed that on the
evening of that same date, he saw Rosario and she was
complaining of pain in her vagina and when Egan asked her, she
said that the foreign object was not yet removed. Then there
was another occasion wherein Jessie was summoned and when
he came he saw Rosario writhing in pain and when he tried to
talk to Rosario she scolded him with defamatory remarks.
Thereafter, he did not see Rosario anymore because he already
went home to his aunt's house who resided at Barrio Barretto
and resumed his studies in the primary grades.
On May 14, 1987, Gaspar Alcantara, a defense witness, while
garbage scavenging at Lot 21, near the gate of the U.S. Naval
Base saw Rosario at Magsaysay Drive near the Happy Bake
Shop near Lot 21, being ogled by people because Rosario's skirt
was bloodied and she was unconscious and foul smelling. Since
nobody helped Rosario, he took pity on her condition and
brought her to the Olongapo City General Hospital in an
unconscious condition, via jeepney. He went to the Information
desk and he was the one who gave the personal circumstances
of Rosario as to her name, age, her residence as Nagbakulaw,
Lower Kalaklan, and Gaspar Alcantara signed as "guardian" of
Rosario, while Rosario was already in the emergency room.
Although Gaspar Alcantara denied that he did not know the
name of Rosario Baluyot when he brought her to the hospital,
this is belied by the testimony of the Information clerk Lorna
Limos, who was then on duty. Limos testified that it was
Alcantara who supplied the personal circumstances of Rosario.
The Court gives more credence to the testimony of Miss Limos
as against Gaspar Alcantara who became a defense witness, for
the reason that through his own testimony, Gaspar Alcantara
claimed that even prior to May 14, 1987, he had already known
Rosario Baluyot for more than one (1) year, because he has
seen the said girl go to the house of his twin brother, Melchor
Alcantara, who is his immediate neighbor. Rosario used to visit a
girl by the name of "Nora" who was then in the custody of his
brother. His brother Melchor was also living with their mother,
brother and sister-in-law and their two (2) children in his house.
Rosario as per Gaspar's testimony even stays for one week or a
few days at his brother's house when she visits Nora. So the
Court can safely assume that of all the more than one (1) year
that he had regularly seen Rosario at his brother's house, he
must have already did come to know the name of Rosario
Baluyot including her age. In his testimony in Court he stated
that he even asked Rosario for movie and softdrinks money
which can safely be concluded that he knows her very well. It is
against normal behavior especially to a Filipino who have a
characteristic of curiosity not to have found out the real name of
the girl he claims to know only as "Tomboy".
While Rosario Baluyot was confined at the Olongapo City
General Hospital, nobody was attending to her since she is a
street child, having stowed away from the custody of her
grandmother. Three (3) good samaritans who belong to religious
and civic organizations, in the persons of Jessica Herrera, Fe
Israel and Sr. Eva Palencia, in one of their missions in the
hospital chanced upon Rosario Baluyot who was all alone with no
relatives attending to her and after finding out that she was only
12 years old decided to help her. After a short interview with
Rosario, regarding her name and age only because she clamped
up about her residence and her relatives, they decided to help
her by providing her the medicine she needed during her
confinement in readiness for an operation. It was Fe Israel who
was able to get the name and age of Rosario Baluyot from
Rosario Baluyot herself when she saw her for the first time. For
Fe Israel, the age of Rosario Baluyot was an important factor
because their program assisted only indigent patients from
infants up to 13 years old.
Rosario's first ailment at the Olongapo City General Hospital was
loose bowel movement and vomiting, which was first suspected
as gastro-enteritis, but which came out later as symptoms of
peritonitis due to a massive infection in the abdominal cavity.
Subsequently, on May 17, 1987, after she was examined by the
physicians at the hospital, it was found out that there was a
foreign object lodged in her vaginal canal and she had vaginal
discharge tinged with blood and foul smelling odor emanating
from her body. One of the doctors who attended to her was Dr.
Barcinal, an OB-GYNE. Dr. Barcinal tried to extract the foreign
object by means of a forceps, but several attempts proved futile
because said object was deeply embedded in the vaginal canal
and was covered by tissues. Her abdomen was enlarged, tender
and distended, symptoms of peritonitis. The patient was feverish
and incoherent when she was scheduled for operation on May
19, 1987, after the first attempt for an operation on May 17 was
aborted allegedly because the consent of Dr. Reino Rosete, the
hospital director was not obtained. The surgeon who operated
on her was Dr. Rosete himself. He testified that Rosario had to
be operated even in that condition in order to save her life. Her
condition was guarded. This was corroborated by Dr. Leo Cruz,
the anesthesiologist during Rosario's operation. It was in the
evening of May 19 at about 7:00 p.m. when Dr. Rosete opened
her abdomen by making a 5 inch incision on her stomach. He
found out that the fallopian tubes were congested with pus and
so with the peritonieum, and the pelvic cavity, and patches of
pus in the liver, although the gallbladder and kidney appeared to
have septicemia, poisoning of the blood. The peritonitis and
septicemia were traced to have been caused through infection
by the foreign object which has been lodged in the intra-vaginal
canal of Rosario. The foreign object which was already agreed
upon by both parties that it is a portion of a sexual vibrator was
extracted from the vagina of Rosario while under anesthesia.
Said object was coated with tissues, pus and blood. Dr. Rosete
gave it to the assisting surgical nurse for safekeeping and gave
instructions to release it to the authorized person. This object
was shown by the nurse to Dr. Leo Cruz. Dr. Rosete considered
the operation successful and the patient was alive when he left
her under Dr. Cruz. Dr. Cruz stayed with said patient in the
ward for about 30 minutes and thereafter he left. The following
day, Rosario got serious and it was Dr. Leo Cruz who
pronounced her death at 2:00 to 2:15 in the afternoon of May
20, 1987.
Thereafter, a death certificate was prepared under the direction
of Dr. Cruz which was indicated therein that the cause of death
was cardio-respiratory arrest, secondary to septicemia caused
by the foreign object lodged in the intra uteral vaginal canal of
Rosario Baluyot.
The foreign object was washed by nurse Obedina, then placed it
in a transparent small jar and labelled "Rosario Baluyot". Jessica
Herrera asked the nurse for the foreign object, and it was given
to her under proper receipt. Herrera then showed the same to
the persons who helped financially Rosario's case, and
afterwards she gave it to Sister Eva Palencia. Sis. Palencia was
in custody of the said object until Mr. Salonga came and asked
her for the object.
After Rosario Baluyot died, Sis. Palencia and a companion went
to Gaspar Alcantara to ask him in locating the relatives of
Rosario. They were able to trace Rosario's grandmother, Mrs.
Maria Burgos Turla, and informed her that her granddaughter
was already dead and lying in state at St. Martin Funeral Parlor.
Mrs. Turla went there with her son, who shouldered all the burial
expenses for Rosario.
Subsequently, Sis. Palencia, Fr. Cullens and Mr. Salonga came
to her residence at Sta. Rita and asked her if she was interested
in filing a case against the person who caused the death of her
granddaughter. Of course she agreed. Hence, she was brought
to the Fiscal's (City) Office to file the same.
After the case was filed against the herein accused, Atty.
Edmundo Legaspi with his messenger came to her house and
told her that the accused was willing to settle the case, but that
accused Ritter had only P15,000.00. The old woman did not
accept it because she knows that the accused is liable to pay
damages anyway. After that, she received a letter from Atty.
Legaspi telling her to get a lawyer for her case. By this time,
Mrs. Turla, who wanted to have the case settled once and for all
giving the reason that she can no longer bear the situation, sent
her nephew, Conrado Marcelo to Atty. Legaspi. Her nephew
obliged and told her that she will be paid at the office of Atty.
Legaspi. On a date not clear in the records, she went with her
nephew Conrado Marcelo, and Roberto Sundiam, an assistant
barangay tanod of Sta. Rita, and while they were there, she saw
Ritter arrive at the law office. Ritter and Atty. Legaspi talked at
the office near the bathroom, and thereafter Ritter left. After he
left, Atty. Legaspi told Rosario's grandmother that they are
willing to settle for P20,000.00, but that Ritter left only
P15,000.00, so she received the money with the understanding
that there was a balance of P5,000.00 yet. She was made to
sign a statement, and she was asked to change the age of her
granddaughter Rosario. With the document prepared, she and
the lawyer's messenger went to the Fiscal's office to have it
subscribed, and was subscribed before an assistant city fiscal.
But the balance of P5,000.00 was not paid, because later on
Atty. Legaspi became the OIC of Olongapo City and he could no
longer attend to it. Atty. Legaspi, during one of the hearings
before the Court even apologized to her.
As to the case, P/Cpl. Marino Victoria, as criminal investigator of
Station "A", was directed by Col. Daos, Station Commander of
the Olongapo Police Department to make a follow up of the case
of Rosario Baluyot. On the other hand, since the suspect who
inserted the foreign object inside Rosario's vagina was said to be
an American, the NISRA Subic Naval Base also conducted its
investigation headed by criminal investigator Agent Conrado
Salonga. Coordinating with the local police and with Sister Eva
Palencia, since Rosario was a street child at Magsaysay Drive,
they rounded up about 43 street children and from some of
them they learned that Rosario Baluyot was with Jessie Ramirez
with an American at the MGM Hotel when the foreign object was
inserted in her vagina. After finding Jessie Ramirez, they asked
him about Rosario Baluyot. They found out that indeed he was
with Rosario Baluyot sometime before Christmas of 1986 with
an American, who brought them to the said hotel. Jessie
Ramirez was taken inside the U.S. Naval Base, Olongapo City
and took his statement. Then he was brought to Mr. Edward Lee
Bungarner, a cartographer, and out of the description supplied
by Ramirez, a composite drawing was photocopied and copies
thereof were distributed to the local police and to the sentries at
the gate of the U.S. Naval Base. Some American servicemen
who had resemblance to the composite drawing were
photographed and these were shown to Jessie Ramirez, but the
result was negative. Aside from the physical description by
Ramirez about the appearance of the suspect, he also described
him as having the mannerisms of a homo-sexual.
After obtaining information that foreign homo-sexuals
frequented Ermita, Manila, and thinking that the so-called
American may be European or Australian national, the team
composed of Agent Salonga, Mr. Heinsell, P/Cpl. Marino Victoria
and P/Cpl. Andres Montaon, Jessie Ramirez and Michael
Johnson, another juvenile, proceeded to Manila. They first went
to the Manila NISRA Office, and thereafter checked in a hotel.
That was on September 23, 1987. On the first night, they went
to Luneta Park where foreign homo-sexuals were said to be
frequenting, but the result was negative. Then on September
25, at about 11:00 p.m., while they were standing at the corner
of A. Mabini and M.H. del Pilar Street, a male caucasian who
looked like a homo-sexual stopped by admiringly infront of the
two (2) juveniles, Ramirez and Johnson. Jessie Ramirez then
reported to Mr. Salonga that this foreigner had a similarity with
the American suspect, so the two minors were instructed to
follow the foreigner and to strike a conversation. They did, and
when they returned, Jessie Ramirez told them that indeed the
said foreigner was the one who brought him and Rosario Baluyot
to the MGM Hotel. Bobby Salonga told Ramirez that this
foreigner had no beard while the one previously described by
Ramirez had a beard. Jessie Ramirez told them that maybe he
have just shaved it off. The said caucasian then entered a bar,
and after several minutes he came out, and Jessie Ramirez upon
his signal with his thumbs up, as a signal to confirm that the
said foreigner is the suspect, arrested Ritter and brought him to
the Manila Western Police District. It could be mentioned at this
stage that in this operation they were accompanied by two (2)
policemen from the Western Police District. The foreigner was
hand cuffed and was told that he was a suspect for Rape with
Homicide. After the arrest, they first went to the pension house
of the suspect in Ermita, Manila to get his shoulder bag which
contained his personal belongings, and from there they brought
him to the Western Police Department. At the said police
headquarters, they were allowed a permissive search by the
foreigner of his clutch bag and his small shoulder bag and
confiscated his passport, I.D., 3 inhalers, money in the form of
dollars and travellers checks amounting about $1,500.00 and
about P100.00, all duly receipted for. From the passport they
learned that the suspect's name was Heinrich Stefan Ritter, an
Austrian national. During the questioning of Hitter, Salonga and
his team already left the headquarters and went to their hotel,
because at this time Jessie Ramirez was already shaking with
fear after he identified the accused.
The following day, they brought the accused to Olongapo and
was detained at the Olongapo City Jail. The case for Rape with
Homicide was filed against him at the City Fiscal of Olongapo. At
the preliminary investigation, accused was assisted by his own
counsel. The private complainant was Maria Burgos Turla
because it was she who had custody of Rosario Baluyot after her
mother Anita Burgos died on January 12, 1982, and their father
Policarpio Baluyot had left them under her custody. When this
case was filed, the father's whereabouts was unknown, and he
only appeared when the trial of this case before the Court was
already in progress. And upon his (Policarpio Baluyot) own
admission, he only learned about the death of his daughter
Rosario Baluyot from the newspaper, long after Rosario was
already gone.
The defense tried to dislodge the case by claiming that there
could be no crime of Rape with Homicide because the suspect
was described as an American while Ritter is an Austrian. Also
advanced by the defense is that, it is a case of mistaken
identity. That Rosario Baluyot was at the time of the commission
of the offense, already more than 13 years old, she having been
born on December 26, 1973 as per baptismal certificate,
wherein it appears that Rosario Baluyot was baptized on
December 25, 1974 and was born on December 26, 1973 as
testified to by Fr. Roque Villanueva of St. James Parish Church
who issued the Baptismal Certificate, having custody and
possession of the book of baptism for the year 1975, but
admitted that he had no personal knowledge about the matters
or entries entered therein. Likewise, the defense's stand is that
the accused cannot be liable for Homicide because a vibrator is
not a weapon of death but it is a thing for the purpose of giving
sexual pleasure, and that the death of Rosario Baluyot was due
to the incompetence of Dr. Rosete, the surgeon and Director of
the Olongapo City General Hospital, who operated on her.
(Rollo, pp. 109-116)
On March 29, 1989, the trial court rendered its decision. The dispositive
portion of the decision reads as follows:
WHEREFORE, IN VIEW OF ALL THE FOREGOING, the Court
holds, that the prosecution has established the GUILT of the
accused beyond reasonable doubt for the crime of Rape with
Homicide as defined and penalized in Art. 335 No. 3 of the
Revised Penal Code, and hereby sentences HEINRICH STEFAN
RITTER to a penalty of RECLUSION PERPETUA, to indemnify the
heirs of the deceased in the sum of SIXTY THOUSAND PESOS
(P60,000.00) Philippine Currency, and TEN THOUSAND PESOS
(Pl0,000.00) by way of attorney's fees to the private prosecutors
and to pay the costs. (Rollo, p. 126)
The accused now comes to this Court on the following assigned errors
allegedly committed by the court:
I
THE TRIAL COURT GRAVELY ERRED AND ABUSED ITS
DISCRETION IN FINDING THAT THE ALLEGED OFFENSE WAS
 COMMITTED ON OCTOBER 10, 1986 AND THAT IT WAS
ACCUSED-APPELLANT WHO COMMITTED IT.
II
THE TRIAL COURT GRAVELY ERRED AND ABUSED ITS
DISCRETION IN FINDING THAT ROSARIO BALUYOT WAS LESS
THAN TWELVE (12) YEARS OLD WHEN THE ALLEGED OFFENSE
WAS COMMITTED AND IN HOLDING THAT THERE WAS RAPE
WITH HOMICIDE.
III
THE TRIAL COURT GRAVELY ERRED AND ABUSED ITS
DISCRETION IN GIVING CREDENCE TO AND NOT REJECTING
THE PROSECUTION'S EVIDENCE AND IN NOT UPHOLDING THAT
OF THE DEFENSE AND ACQUITTING THE ACCUSED.
Inasmuch as it is the bounden duty of this Court to affirm a judgment of
conviction only if the guilt of the accused has been proved beyond
reasonable doubt, it behooves us to exert the most painstaking effort to
examine the records in the light of the arguments of both parties if only
to satisfy judicial conscience that the appellant indeed committed the
criminal act (See People v. Villapaña, 161 SCRA 73 [1988]).
The appellant was convicted by the trial court of the crime of rape with
homicide of a young girl who died after the rape because of a foreign
object, believed to be a sexual vibrator, left inside her vagina.
As stated by the trial court one crucial issue in this case is the age of the
victim—whether or not Rosario Baluyot was less than twelve (12) years
old at the time the alleged incident happened on October 10, 1986. The
age is important in determining whether or not there was statutory
rape, Article 335 of the Revised Penal Code defines the third type of
rape as having carnal knowledge of a woman under 12 years of age, in
which case force, intimidation, deprivation of reason or unconscious
state do not have to be present.
The trial court found that Rosario was below 12 years old when she was
sexually abused by the accused and, therefore, rape was committed
inspite of the absence of force or intimidation.
In resolving the issue, the trial court put great weight on the testimonies
of the victim's grandmother and father who testified that she was born
on December 22, 1975. These oral declarations were admitted pursuant
to then Rule 130, Section 33 of the Rules of Court where, in the absence
of a birth certificate, the act or declaration about pedigree may be
received in evidence on any notable fact in the life of a member of the
family. Since birth is a matter of pedigree within the rule which permits
the admission of hearsay evidence, oral declarations are therefore
admissible as proof of birth (Decision, p. 54).
The grandmother, Maria Burgos Turla, testified that she remembered
Rosario's birth date because her brother died in Pampanga and her
daughter, Anita (Rosario's mother) was the only one who failed to
attend the funeral because the latter has just given birth allegedly to
Rosario (T.S.N. p. 8, Jan. 13, 1988).
The father likewise testified that as far as he could remember, Rosario
was born on December 22, 1975 (T.S.N., p. 4, Jan. 27, 1988) and he
was certain that Rosario was more than one (1) year old when she was
baptized (T.S.N., p. 45, Jan. 27, 1988).
The trial court further added that their testimony is supported by the
clinical record and the death certificate indicating that she was 12 years
old when she was admitted at the Olongapo City General Hospital for
treatment. The age was supplied by Rosario's alleged guardian, Gaspar
Alcantara to the hospital's clinical record clerk, Lorna Limos. Fe Israel, a
social worker who interviewed Rosario Baluyot also testified that she
was told by Rosario that she was 12 years old. The trial court accepted
this as adequate evidence of the truth. Moreover, Jessie Ramirez, the
principal witness in this case declared that he was born on September 5,
1973 and that he was older than Rosario Baluyot. Therefore, since he
was 13 years old in 1986, Rosario must have been less than 12 yeas old
in 1986. (Decision, p. 55)
The trial court concluded that the oral declarations of the grandmother
and father supported by other independent evidence such as the clinical
record, death certificate and the testimonies of Fe Israel and Jessie
Ramirez, rendered the baptismal certificate presented by the defense
without any probative or evidentiary value. (Decision, p. 55)
The findings of the trial court with respect to Rosario Baluyot's age
cannot stand the application of evidentiary rules.
The trial court relied on Section 33, Rule 130 (now Section 40 of Rule
130 of the 1989 Revised Rules of Court).
For oral evidence to be admissible under this Rule, the requisites are:
(1) That the declarant must be dead or outside of the Philippines
or unable to testify;
(2) That pedigree is in issue;
(3) That the person whose pedigree is in question must be
related to the declarant by birth or marriage;
(4) That the declaration must be made before the controversy
occurred or ante litem motam; and
(5) That the relationship between the declarant and the person
whose pedigree is in question must as a general rule be shown
by evidence other than such act or declaration.
These requirements were not satisfied by the evidence for the
prosecution nor do the declarations fall within the purview of the rule.
The victim's grandmother and father whose declarations regarding
Rosario's age were admitted by the trial court are both alive, in the
Philippines and able to testify as they both did testify in court. Their
declarations were made at the trial which is certainly not before the
controversy arose. The other witnesses who testified on Rosario's age
are not members of the victim's family. The testimonies of Rosario's
relatives must be weighed according to their own personal knowledge of
what happened and not as hearsay evidence on matters of family
history.
At this point, we find the evidence regarding Rosario's age of doubtful
value.
The trial court justified the admissibility of the grandmother's testimony
pursuant to the ruling laid down in U.S. v. Bergantino, (3 Phil., 118
[1903]) where the Court accepted the testimony of the mother that her
daughter was 14 years old and 4 months old. The mother stated that
she knew the age because the child was born about the time of the
cholera epidemic of 1889. This was not hearsay, but came from one who
had direct knowledge of the child's birth.
It is however, equally true that human memory on dates or days is frail
and unless the day is an extraordinary or unusual one for the witness,
there is no reasonable assurance of its correctness. (People v. Dasig 93
Phil. 618, 632 [1953])
With respect to the grandmother's testimony, the date of the brother's
death or funeral was never established, which indicates that the day was
rather insignificant to be remembered. The father's declaration is
likewise not entirely reliable. His testimony in court does not at all show
that he had direct knowledge of his daughter's birth. He was certain
though that she was more than one (1) year old at the time she was
baptized.
The other witnesses are not at all competent to testify on the victim's
age, nor was there any basis shown to establish their competence for
the purpose. The clinical records were based on Gaspar Alcantara's
incompetent information given when he brought the victim to the
hospital. Alcantara came to know her only about a year before her
death. He had absolutely no knowledge about the circumstances of
Rosario's birth. The death certificate relied upon by the trial court was
merely based on the clinical records. It is even less reliable as a record
of birth.
All the evidence presented by the prosecution showing that Rosario
Baluyot was less than 12 years old at the time of the alleged incident
are not adequate to establish the exact date of birth, much less offset a
documentary record showing a different date.
The defense presented Rosario Baluyot's baptismal certificate which the
trial court rejected as being hearsay and of no value. As against the oral
declarations made by interested witnesses establishing Rosario's age to
be less than 12 years old, the evidence on record is more convincing
and worthy of belief. (See Filinvest Land, Inc. v. Court of Appeals, 183
SCRA 664, 673 [1990]).
By virtue of a subpoena duces tecum and ad testificandum, issued by
the lower court to the St. James Parish Church, Subic, Zambales, Fr.
Roque Villanueva a Roman Catholic priest testified and stated that he is
the head of said parish. He brought with him Baptismal Register No. 9
entitled "Liber Baptisnorum", a latin term for baptismal book or record.
On page 151, No. 3 of the said Registry Book, there appears the name
of Rosario Baluyot who was baptized on December 25, 1974, and born
on December 26, 1973. Parents are Policarpio Baluyot and Anita Burgos,
residents of Subic, Zambales. Edita R. Milan appears as the only sponsor
with Olongapo City as her address.
In the case of Macadangdang v. Court of appeals (100 SCRA 73 [1980]),
we held that:
xxx xxx xxx
In our jurisprudence, this Court has been more definite in its
pronouncements on the value of baptismal certificates. It thus
ruled that while baptismal and marriage certificates may be
considered public documents, they are evidence only to prove
the administration of the sacraments on the dates therein
specified—but not the veracity of the status or declarations
made therein with respect to his kinsfolk and/or citizenship (Paa
v. Chan, L-25945, Oct. 31, 1967). Again, in the case of Fortus v.
Novero (L-22378, 23 SCRA 1331 [1968]), this Court held that a
baptismal certificate is conclusive proof only of the baptism
administered, in conformity with the rites of the Catholic Church
by the priest who baptized the child, but it does not prove the
veracity of the declarations and statements contained in the
certificate that concern the relationship of the person baptized.
Such declarations and statements, in order that their truth may
be admitted, must indispensably be shown by proof recognized
by law. (At pp. 84-85)
In the same light, the entries made in the Registry Book may be
considered as entries made in the course of business under Section 43
of Rule 130, which is an exception to the hearsay rule. The baptisms
administered by the church are one of its transactions in the exercise of
ecclesiastical duties and recorded in a book of the church during the
course of its business. (U.S. v. de Vera, 28 Phil. 105 [1914] Hence, the
certificate (Exhibit "22") presented by the defense that Rosario Baluyot
was baptized on December 25, 1974 may be admitted in evidence as
proof of baptism. Policarpio Baluyot, the victim's father testified that he
had in his possession a baptismal certificate different from the one
presented in court. However, no other baptismal record was ever
presented to prove a date different from that brought by the official
custodian. Since the baptismal certificate states that Rosario was
baptized on December 25, 1974, it is therefore highly improbable that
Rosario could have been born on December 22, 1975. She could not
have been baptized before she was born. Exhibit "22" may be proof only
of baptism but it puts a lie to the declaration that Rosario was born in
1975. With the father's assertion that Rosario was more than one (1)
year old when she was baptized, we are then more inclined to agree
that Rosario was born in 1973 as stated in the Baptismal Registry.
In the case of People v. Rebancos (172 SCRA 425 [1989]), the Court
stated:
xxx xxx xxx
. . . Although no birth certificate was presented because her
birth had allegedly not been registered, her baptismal
certificate, coupled by her mother's testimony, was sufficient to
establish that Mary Rose was below twelve years old when she
was violated by Rebancos. (At. p. 426)
Unfortunately, in the instant case, nobody could corroborate the date on
a more reliable document as to Rosario's birth which could serve as
sufficient proof that she was born on December 26, 1973. Therefore,
she was more than 12 years old at the time of the alleged incident on
October 10, 1986.
Moreover, it is not incumbent upon the defense to prove Rosario's age.
The burden of proof lies on the prosecution to prove that Rosario was
less than 12 years old at the time of the alleged incident in a charge of
statutory rape. The prosecution failed in this respect.
Since Rosario was not established to have been under 12 years of age at
the time of the alleged sexual violation, it was necessary to prove that
the usual elements of rape were present; i.e. that there was force of
intimidation or that she was deprived of reason or otherwise
unconscious in accordance with Article 335 of the Revised Penal Code.
We agree with the defense that there was no proof of such facts. On the
contrary, the evidence shows that Rosario submitted herself to the
sexual advances of the appellant. In fact, she appears to have
consented to the act as she was paid P300.00 the next morning while
her companion, Jessie Ramirez was paid P200.00 (T.S.N. p. 50, January
6, 1988). The environmental circumstances coupled with the testimonies
and evidence presented in court clearly give the impression that Rosario
Baluyot, a poor street child, was a prostitute inspite of her tender age.
Circumstances in life may have forced her to submit to sex at such a
young age but the circumstances do not come under the purview of
force or intimidation needed to convict for rape.
In view of these clear facts which the prosecution failed to refute, no
rape was committed. But was Ritter guilty of homicide?
The trial court justified its ruling by saying that the death of the victim
was a consequence of the insertion of the foreign object into the victim's
vagina by the appellant.
We now ask "Was the appellant responsible for the sexual vibrator left
inside Rosario's vagina which led to her death?
The trial court convicted the accused based on circumstantial evidence.
Unfortunately, the circumstances are capable of varying interpretations
and are not enough to justify conviction.
Jessie Ramirez, the principal witness did not actually see the object
inserted in Rosario's vagina. Neither could he identify the object (Exhibit
"C-2") taken from Rosario as the same object which the appellant was
holding at that time of the alleged incident.
In his sworn statement given to the police investigator on September 4,
1987, he answered that:
xxx xxx xxx
T Habang kayo ay nasa loob ng kuwarto ng otel, mayroon ka
bang napansin na inilabas ng kano sa kanyang daladalahan
kung mayroon man?
S Ang Amerikano ay may dala-dalang shoulder bag na kulay
itim, at napansin ko na may inilabas siya sa kanyang bag na
parang vicks inhaler, na kanyang inamoy-amoy habang nasa
otel kami at pagkatapos niya ay inilapag niya sa lamiseta.
T Ilarawan mo nga sa akin ang bagay na nakita mong inilabas
ng Amerikano?
S Ito ay may habang tatlong pulgada at ang takip nito ay may
habang dalawang pulgada. Iyong takip ay bilog na patulis at
may tabang mga kalahating pulgada. Hindi ko napansin ang
hugis ng dulo ng bagay na may takip dahil natatakpan ng
kamay at ilong ng Amerikano.
T Ipinakikita ko sa iyo ang isang larawan. Tignan mong mabuti
ang larawang ito at sabihin mo nga sa akin kung makikilala mo
ang mga bagay na nasa larawang ito, na may kinalaman sa
nakita mong kinuha ng Amerikano sa kanyang bag?
 S Napansin ko na ang kulay asul na bagay sa larawan ay katulad
na katulad noong takip ng bagay na inilabas ng Amerikano sa
kanyang bag. Kaya lang ay bakit naging kulay asul gayong ng
makita ko ito ay kulay puti? (Exhibit "A", p. 2; Emphasis
Supplied)
Presumably, what Jessie Ramirez saw was merely the Vicks inhaler
which the appellant does not deny having possessed at that time. He
was certain that the object was white. (T.S.N. p. 91, January 6, 1988)
Later, Ramirez retracted and corrected himself. He said that it was
grayish in color with color blue (Medyo kulay abo na may kulay na
parang blue). (T.S.N. p. 92, January 6, 1988) The inconsistency of the
witness' testimony casts doubt as to the veracity of the statements
made especially when he answered on additional cross-examination that
the reason why he concluded that Exhibit "C-2" was the same object
being held by Ritter was because it was the only one shown to him by
the prosecution (T.S.N. pp. 109-110, January 6, 1988). Jessie Ramirez
was not all certain about the sexual vibrator because he did not actually
see it in the possession of the appellant.
What he merely remembers is the revelation made by Rosario the next
morning that the foreigner inserted something inside her vagina. The
trial court admitted such statement as part of the res gestae. In a
strained effort to accept such statement as part of res gestae, the trial
court focused the test of admissibility on the lapse of time between the
event and the utterance. For the average 13 years old, the insertion of a
mechanical device or anything for that matter into the vagina of a young
girl is undoubtedly startling. For Rosario and Jessie, however, there
must be more evidence to show that the statement, given after a night's
sleep had intervened, was given instinctively because the event was so
startling Res gestae does not apply. (Section 42, Rule 130, Rules of
Court)
Even if it were established that the appellant did insert something inside
Rosario's vagina, the evidence is still not adequate to impute the death
of Rosario to the appellant's alleged act.
Jessie Ramirez testified that Rosario was able to remove the object
inserted in her vagina. We quote:
Q Now, you also stated on direct examination that later on
Rosario even categorically admitted to you that she was already
able to remove the object allegedly inserted inside her vagina, is
that correct?
A Yes, sir.
xxx xxx xxx
ATTY. CARAAN:
Q Will you kindly tell to this Honorable Court the exact words
used by Rosario Baluyot later on when you met her when you
asked her and when she told you that she was already able to
remove that object from her vagina?
A "Oy, Jessie, natanggal na, "she told me that. I asked her,
"Was it already removed?" And she answered, "Yes, it was
removed." But the same night, she again complained of pain of
her stomach. She sent one of her friends to call for me. And as a
matter of fact, Tomboy was uttering defamatory words against
me as she was groaning in pain. (TSN, Jan. 6,1988, pp. 72-73)
This encounter happened on the night of the day following the day after
both children were invited by the foreigner to the hotel. (T.S.N. p. 73,
January 6, 1988). Rosario was said to be groaning in pain so we can just
imagine the distress she was undergoing at this point in time. If the
device inserted by the appellant caused the pain, it is highly
inconceivable how she was able to endure the pain and discomfort until
May, 1987, seven (7) months after the alleged incident. Evidence must
not only proceed from the mouth of a credible witness but it must be
credible in itself such as the common experience and observation of
mankind can approve as probable under the circumstances. (People vs.
Patog, 144 SCRA 429 [1986]).
At this juncture, we find Dr. Pedro Solis' testimony rather significant. Dr.
Pedro Solis, a witness for the defense is considered an expert witness.
(A Doctor of Medicine and a graduate of the State University in 1940, a
degree of Bachelor of Laws and member of the Bar 1949, and a
graduate of the Institute of Criminology University. He was awarded
Post Graduate Diploma in Criminology in 1963, and also a graduate of
United Nations Asia and Far East Asia Institute on the Prevention of
Crimes in Tokyo Japan 1965. He was appointed Medico Legal Officer of
the National Bureau of Investigation in 1940 until 1944. He became
Chief Medico Legal Officer in 1970 and became the Deputy Director of
the NBI up to 1984. He is at present a Professorial Lecturer on Legal
Medicine at the UP, FEU, UE, and Fatima College of Medicine; a Medico
Legal Consultant of the PGH Medical Center, Makati Medical Center,
UERM Medical Center, MCU Medical Center. He has been with the NBI for
43 years. He has attended no less than 13 conferences abroad. He is the
author of the textbooks entitled "Legal Medicine" and "Medical
Jurisprudence".) With his impressive legal and medical background, his
testimony is too authoritative to ignore. We quote the pertinent portions
of his testimony:
Q Now Dr. Solis, would you kindly go over this object marked as
Exh. "C-2" which object was described as a part of a sexual
vibrator battery operated. Now, given this kind of object, would
you kindly tell us what would be the probable effect upon a 12
years old girl when it is inserted into her vagina?
A Well, this vibrator must be considered a foreign body placed
into a human being and as such be considered a foreign object.
As a foreign object, the tendency of the body may be: No. 1—
expel the foreign body—No. 2.—The tendency of the body is to
react to that foreign body. One of the reactions that maybe
manifested by the person wherein such foreign body is
concerned is to cover the foreign body with human tissue, in a
way to avoid its further injury to the body.
Now, the second reaction is irritation thereby producing certain
manifest symptoms and changes in the area where the foreign
body is located.
In severe cases, the symptoms manifestation might not only be
localized but may be felt all over the body, we call it systemic
reaction. Now, considering the fact that this foreign body as
shown to me is already not complete, this shows exposure of its
different parts for the body to react. If there is mechanism to
cause the foreign body to vibrate, there must be some sort of
power from within and that power must be a dry cell battery.
[The] composition of the battery are, manganese dioxide
ammonium, salts, water and any substance that will cause
current flow. All of these substances are irritants including areas
of the container and as such, the primary reaction of the body is
to cause irritation on the tissues, thereby inflammatory changes
develop and in all likelihood, aside from those inflammatory
changes would be a supervening infection in a way that the
whole generative organ of the woman will suffer from diseased
process causing her the systemic reaction like fever, swelling of
the area, and other systemic symptoms. . . . . (TSN., pp. 13-15,
October 19,1988)
xxx xxx xxx
Q Now, given this object, how long would it take, Doctor before
any reaction such as an infection would set in, how many days
after the insertion of this object in the vagina of a 12 year old
girl?
A In the example given to me, considering that one of the ends
is exposed, in a way that vaginal secretion has more chance to
get in, well, liberation of this irritant chemicals would be
enhanced and therefore in a shorter period of time, there being
this vaginal reaction.
Q How many days or weeks would you say would that follow
after the insertion?
A As I said, with my experience at the NBI, insertion of any
foreign body in the vaginal canal usually developed within, a
period of two (2) weeks . . .
 xxx xxx xxx
Q . . . [T]he subject in this case was allegedly raped, and a
sexual vibrator was inserted in her vagina on October 10, 1986
and she was operated on, on May 19, 1987 the following year,
so it took more than 7 months before this was extracted, would
you say that it will take that long before any adverse infection
could set in inside the vagina?
A Infection and inflamatory changes will develop in a shorter
time. (TSN., Oct. 19,1988, p. 18)
xxx xxx xxx
Q When you said shorter, how long would that be, Doctor?
A As I said, in my personal experience, hair pins, cottonballs and
even this lipstick of women usually, there are only about two (2)
weeks time that the patient suffer some abnormal symptoms.
Q Now, considering that this is a bigger object to the object that
you mentioned, this object has a shorter time?
A Yes, Sir shorter time. (TSN., Oct. 19. 1988, p. 20)
The trial court, however, ruled that "there is no hard and fast rule as to
the time frame wherein infection sets in upon insertion of a foreign body
in the vagina canal. For Dr. Solis, the time frame is not more than 10
months, and this case is still within the said time frame."
A more generous time interval may be allowed in non-criminal cases.
But where an accused is facing a penalty of reclusion perpetua, the
evidence against him cannot be based on probabilities which are less
likely than those probabilities which favor him.
It should be clarified that the time frame depends upon the kind of
foreign body lodged inside the body. An examination of the object gave
the following results:
(1) Color: Blue
Size: (a) Circumference—3.031
inches (b) Length—approximately
2.179 inches.
Composition: Showed the general
characteristics of a styrene-butadiene plastic.
(2) The specimen can be electrically operated by means of a
battery as per certification dated 01 June 1988, signed by Mr.
Rodolfo D. Mercuric, Shipboard Electrical Systems Mechanics,
Foreman II, SRF Shop 51, Subic (see attached certification).
(3) No comparative examination was made on specimen #1 and
vibrator depicted in the catalog because no actual physical
dimensions and/or mechanical characteristics were shown in the
catalog. (Exhibit "LL")
The vibrator end was further subjected to a macro-photographic
examination on the open end portion which revealed the following:
Result of Examination
Macro-photographic examination on the open end portion of
specimen #1 shows the following inscription:
MABUCHI MOTOR JAPAN RE 14 PAT (Exhibit "MM")
From the above results, the subject object is certainly not considered as
inert and based on Dr. Solis' testimony, it is more likely that infection
should set in much earlier. Considering also that the object was inserted
inside the vagina which is part of the generative organ of a woman, an
organ which is lined with a very thin layer of membrane with plenty of
blood supply, this part of the body is more susceptible to infection.
(T.S.N. p. 34, October 19, 1988)
The truth of Dr. Solis' testimony is more probable under the
circumstances of the case. We see no reason why his opinions qualified
by training and experience should not be controlling and binding upon
the Court in the determination of guilt beyond reasonable doubt. (People canal and a foreign body invaded on the posterior part of the
v. Tolentino, 166 SCRA 469 [1988]). vaginal canal.

Dr. Barcinal, another witness for the defense also testified that he xxx xxx xxx
examined Rosario Baluyot on May 17, 1986 as a referral patient from
the Department of Surgery to give an OB-GYN clearance to the patient A I referred back to Dr. Fernandez about my findings and he
prior to operation. (T.S.N. p. 6, September 28, 1988) asked me to try to remove the said foreign object by the use of
forceps which I tried to do so also but I failed to extract the
Q And how many times did you examine this patient Rosario same.
Baluyot on that day?
Q All this time that you were examining the patient Rosario
A I examined her twice on that day. Baluyot both in the first and second instance, Rosario Baluyot
was conscious and were you able to talk to her when you were
Q The first time that you examined her, what is the result of examining her?
your findings, if any?
A Yes, sir.
A My first examination, I examined the patient inside the
delivery room. The patient was brought to the delivery room Q And did you ask her why there is a foreign object lodge inside
wheel-chaired then from the wheel chair, the patient was her vagina?
ambigatory (sic). She was able to walk from the door to the
examining table. On examination, the patient is conscious, she A Yes, Sir I asked her.
was fairly nourished, fairly developed, she had fever, she was
uncooperative at that time and examination deals more on the
Q And what did she tell you, if any?
abdomen which shows slightly distended abdomen with muscle
guarding with tenderness all over, with maximum tenderness
over the hypogastric area. (T.S.N. p. 5, September 28, 1988) A She said in her own words that "GINAMIT AKO NG NEGRO AT
SIYA ANG NAGLAGAY NITO."
xxx xxx xxx
Q Did she also tell you when, this Negro who used her and who
inserted and placed the foreign object on her vagina?
Q What about your second examination to the patient, what was
your findings, if any?
A Yes, Sir I asked her and she said he used me three (3)
months ago from the time I examined her.
A In my second examination, I repeated the internal
examination wherein I placed my index finger and middle finger
inside the vagina of the patient and was able to palpate a hard Q Now, you said that you referred the patient to the ward, what
object. After which, I made a speculum examination wherein I happened next with your patient?
was able to visualize the inner portion of the vaginal canal, there
I saw purulent foul smelling, blood tints, discharge in the vaginal
 A To my knowledge, the patient is already scheduled on
operation on that date.
Q Meaning, May 17, 1987?
A Yes, Sir I was presuming that the patient would undergo
surgery after that?
(TSN, Sept. 28,1988, pp. 8-9; Emphasis supplied)
The trial court debunked Dr. Barcinals testimony considering Rosario's
condition at that time. It ruled that it is inconceivable that she would be
striking a normal conversation with the doctors and would be sitting on
the examination table since Gaspar Alcantara stated that when he
brought Rosario Baluyot to the hospital, she was unconscious and
writhing in pain.
It was not improbable for Rosario Baluyot to still be conscious and
ambulant at that time because there were several instances testified to
by different witnesses that she was still able to talk prior to her
operation:
(1) Fe Israel, a witness for the prosecution and a member of the
Olongapo Catholic Charismatic Renewal Movement testified that as a
member of this group she visits indigent children in the hospital every
Saturday and after office hours on working days.
On the Saturday prior to Rosario's death which was May 17, she was
still able to talk to Rosario Baluyot. In fact, one of her groupmates
helped Rosario go to the comfort room to urinate. (T.S.N., pp. 16-19,
May 25, 1988)
(2) Angelita Amulong, a witness for the defense is another para social
worker who worked at Pope John 23rd Community Center under Sister
Eva Palencia. In one of her hospital visits, she encountered Rosario
Baluyot in the month of May, 1987. She actually saw a child who
happened to be Rosario Baluyot seated on the cement floor and when
she asked why she was seated there, she was told that it was too hot in
the bed. She saw Rosario Baluyot for about 2 or 3 days successively.
(T.S.N. pp. 10-13, September 7, 1988)
(3) Gaspar Alcantara, the person who brought Rosario to the hospital
actually testified that she was conscious (T.S.N. p. 36, September 14,
1988) but writhing in pain. He took pity on her so he brought her to the
hospital (T.S.N. p. 12, September 14, 1988)
From the above testimonies, it is clear that Rosario was still conscious
and could still answer questions asked of her although she was
complaining of stomach pains. Unfortunately, the medical attention
given to her failed to halt the aggravation of her condition. The
operation on May 19 was too late.
Rosario died because of septicemia, which in layman's language is blood
poisoning, and peritonitis, which is massive infection, in the abdominal
cavity caused by the foreign object or the cut sexual vibrator lodged in
the vagina of the victim. This led to the infection from the uterus to the
fallopian tubes and into the peritoneum and the abdominal cavity.
The trial court convicted the accused citing the rationale of Article 4 of
the RPC
He who is the cause of the cause is the cause of the evil caused.
But before the conviction is affirmed, we must first follow the rule as
stated in the case of Urbano vs. Intermediate Appellate Court (157
SCRA 1 [1988]) to wit:
The rule is that the death of the victim must be the direct,
natural and logical consequence of the wounds inflicted upon
him by the accused. And since we are dealing with a criminal
conviction, the proof that the accused caused the victim's death
must convince a rational mind beyond reasonable doubt.
(Emphasis supplied)
In People v. Tempongko, Jr., (144 SCRA 583, 592 [1986]), we explained
that:
 xxx xxx xxx
The basic principle in every criminal prosecution is that
accusation is not synonymous with guilt. The accused is
presumed innocent until the contrary is proved by the
prosecution. If the prosecution fails, it fails utterly, even if the
defense is weak or, indeed, even if there is no defense at all.
The defendant faces the full panoply of state authority with all
"The People of the Philippines" arrayed against him. In a manner
of speaking, he goes to bat with all the bases loaded. The odds
are heavily against him. It is important, therefore, to equalize
the positions of the prosecution and the defense by presuming
the innocence of the accused until the state is able to refute the
presumption by proof of guilt beyond reasonable doubt. (At. p.
592)
The evidence for the accused maybe numerically less as against the
number of witnesses and preponderance of evidence presented by the
prosecution but there is no direct and convincing proof that the accused
was responsible for the vibrator left inside the victim's vagina which
caused her death seven (7) months after its insertion. What the
prosecution managed to establish were mere circumstances which were
not sufficient to overcome the constitutional presumption of innocence.
While circumstantial evidence may suffice to support a conviction it is
imperative, though, that the following requisites should concur:
(a) There is more than one circumstance;
(b) The facts from which the inferences are derived are proven;
and
(c) The combination of all the circumstances is such as to
produce a conviction beyond reasonable doubt. (Rule 133, Sec.
4 Revised Rules of Court)
For the well-entrenched rule in evidence is that "before conviction can
be had upon circumstantial evidence, the circumstances proved should
constitute an unbroken chain which leads to one fair and reasonable
conclusion pointing to the defendant, to the exclusion of all others, as
the author of the crime (People v. Subano, 73 Phil. 692 [1942];
Emphasis supplied). It must fairly exclude every reasonable hypothesis
of innocence (Dorado v. Court of Appeals, 153 SCRA 420, 433 [1987]).
In this case the circumstantial evidence presented by the prosecution
does not conclusively point to the liability of the appellant for the crime
charged. (People v. Tolentino, supra)
We are aware of the wide publicity given to the plight of Rosario Baluyot
and how her death exemplified starkly the daily terrors that most street
children encounter as they sell their bodies in order to survive. At an
age when innocence and youthful joys should preponderate in their
lives, they experience life in its most heartless and inhuman form.
Instead of nothing more than gentle disappointments occupying their
young minds, they daily cope with tragedies that even adults should
never be made to carry.
It is with distressing reluctance that we have to seemingly set back the
efforts of Government to dramatize the death of Rosario Baluyot as a
means of galvanizing the nation to care for its street children. It would
have meant a lot to social workers and prosecutors alike if one
pedophile-killer could be brought to justice so that his example would
arouse public concern, sufficient for the formulation and implementation
of meaningful remedies. However, we cannot convict on anything less
than proof beyond reasonable doubt. The protections of the Bill of Rights
and our criminal justice system are as much, if not more so, for the
perverts and outcasts of society as they are for normal, decent, and
law-abiding people.
The requirement of proof which produces in an unprejudiced mind moral
certainty or conviction that the accused did commit the offense has not
been satisfied.
By way of emphasis, we reiterate some of the factors arousing
reasonable doubt:
1. The evidence on Rosario Baluyot's baptism creates reasonable
doubt about her being less than 12 years old when the carnal
knowledge took place. If the evidence for the prosecution is to
be believed, she was not yet born on the date she was baptized.
 2. Since the proof of Rosario's being under 12 years of age is
not satisfactory, the prosecution has to prove force,
intimidation, or deprivation of reason in order to convict for
rape. There is no such proof. In fact, the evidence shows a
willingness to submit to the sexual act for monetary
considerations.
3. The only witness to the fact of Ritter's placing a vibrator
inside the vagina of Rosario was Jessie Ramirez. This witness did
not see Ritter insert the vibrator. The morning after the
insertion, he was only told by Rosario about it. Two days later,
he allegedly met Rosario who informed him that she was able to
remove the object. And yet, Ramirez testified that on the night
of that second encounter, he saw Rosario groaning because of
pain in her stomach. She was even hurling invectives. Ramirez'
testimony is not only hearsay, it is also contradictory.
4. It was improbable, according to expert medical testimony, for
a foreign object with active properties to cause pain, discomfort,
and serious infection only after seven months inside a young
girl's vaginal canal. Infection would have set in much earlier.
Jessie Ramirez recalled that the incident happened in December
of 1986. (TSN., January 6, 1988, pp. 15-17) The evidence,
however shows that the appellant was not here in the
Philippines that December. As per the Commission on
Immigration Arrival and Departure Report, Heinrich Ritter
arrived in the Philippines on October 7, 1986 and left on October
12, 1986. He never returned until September 23, 1987 (Exhibits
"DD" and "EE") The incident could have happened only in
October, but then it would have been highly improbable for the
sexual vibrator to stay inside the vagina for seven (7) months
with the kind of serious complications it creates.
5. The gynecologist who attended to Rosario during her hospital
confinement testified that she told him "Ginamit ako ng Negro at
siya ang naglagay nito." The accused is not a black.
Noteworthy is the fact that nothing was mentioned about Rosario's
activities after the hotel incident. Considering Dr. Barcinal's testimony
indicating that she was "used" by a "Negro" three (3) months prior to
admission in the hospital and Rosario's unfortunate profession, there is
always the possibility that she could have allowed herself to be violated
by this perverse kind of sexual behavior where a vibrator or vibrators
were inserted into her vagina between October, 1986 and May, 1987.
Moreover, the long delay of seven (7) months after the incident in
reporting the alleged crime renders the evidence for the prosecution
insufficient to establish appellant's guilty connection with the requisite
moral certainty. (SeePeople v. Mula Cruz, 129 SCRA 156 [1984]).
The established facts do not entirely rule out the possibility that the
appellant could have inserted a foreign object inside Rosario's vagina.
This object may have caused her death. It is possible that the appellant
could be the guilty person. However, the Court cannot base an
affirmance of conviction upon mere possibilities. Suspicions and
possibilities are not evidence and therefore should not be taken against
the accused. (People v. Tolentino, supra)
Well-established is the rule that every circumstance favorable to the
accused should be duly taken into account. This rule applies even to
hardened criminals or those whose bizarre behaviour violates the mores
of civilized society. The evidence against the accused must survive the
test of reason. The strongest suspicion must not be allowed to sway
judgment. (See Sacay v. Sandiganbayan, 142 SCRA 593 [1986]). As
stated in the case of People v. Ng (142 SCRA 615 [1986]):
. . . [F]rom the earliest years of this Court, it has emphasized
the rule that reasonable doubt in criminal cases must be
resolved in favor of the accused. The requirement of proof
beyond reasonable doubt calls for moral certainty of guilt. It has
been defined as meaning such proof "to the satisfaction of the
court, keeping in mind the presumption of innocence, as
precludes every reasonable hypothesis except that which it is
given to support. It is not sufficient for the proof to establish a
probability, even though strong, that the fact charged is more
likely to be true than the contrary. It must establish the truth of
the fact to a reasonable and moral certainty—a certainty that
convinces and satisfies the reason and the conscience of those
who are to act upon it. (Moreno, Philippine Law Dictionary, 1972
Edition, p. 379, citing U.S. v. Reyes, 3 Phil. 3). . . .
In the instant case, since there are circumstances which prevent our
being morally certain of the guilt of the appellant, he is, therefore,
entitled to an acquittal.
This notwithstanding, the Court can not ignore the acts of the appellant
on the children, Jessie Ramirez and Rosario Baluyot in October, 1986 at
the MGM Hotel. Inspite of his flat denials, we are convinced that he
comes to this country not to look at historical sights, enrich his intellect
or indulge in legitimate pleasures but in order to satisfy the urgings of a
sick mind.
With the positive Identification and testimony by Jessie Ramirez that it
was the appellant who picked him and Rosario from among the children
and invited them to the hotel; and that in the hotel he was shown
pictures of young boys like him and the two masturbated each other,
such actuations clearly show that the appellant is a pedophile. When
apprehended in Ermita, he was sizing up young children. Dr. Solis
defined pedophilia in his book entitled Legal Medicine, 1987 edition, as
follows:
Pedophilia—A form of sexual perversion wherein a person has
the compulsive desire to have sexual intercourse with a child of
either sex. Children of various ages participate in sexual
activities, like fellatio, cunnilingus, fondling with sex organs, or
anal sexual intercourse. Usually committed by a homosexual
between a man and a boy the latter being a passive partner.
Ritter was prosecuted for rape with homicide and not pedophilia,
assuming this is a crime by itself. Pedophilia is clearly a behavior
offensive to public morals and violative of the declared policy of the
state to promote and protect the physical, moral, spiritual and social
well-being of our youth. (Article II, Section 13, 1987 Constitution)
(Harvey v. Defensor Santiago, 162 SCRA 840, 848 [1989]). Pedophiles,
especially thrill seeking aliens have no place in our country.
In this case, there is reasonable ground to believe that the appellant
committed acts injurious not only to Rosario Baluyot but also to the
public good and domestic tranquility of the people. The state has
expressly committed itself to defend the right of children to assistance
and special protection from all forms of neglect, abuse, cruelty,
exploitation and other conditions prejudicial to their development. (Art.
XV, Section 3 [2] . . . (Harvey v. Santiago, supra). The appellant has
abused Filipino children, enticing them with money. The appellant
should be expelled from the country.
Furthermore, it does not necessarily follow that the appellant is also free
from civil liability which is impliedly instituted with the criminal action.
(Rule III, Section 1) The well-settled doctrine is that a person while not
criminally liable, may still be civilly liable. We reiterate what has been
stated in Urbano v. IAC, supra.
. . . While the guilt of the accused in a criminal prosecution must
be established beyond reasonable doubt, only a preponderance
of evidence is required in a civil action for damages. (Article 29,
Civil Code). The judgment of acquittal extinguishes the civil
liability of the accused only when it includes a declaration that
the facts from which the civil liability might arise did not exist.
(Padilla v. Court of Appeals, 129 SCRA 559).
The reason for the provisions of Article 29 of the Civil Code,
which provides that the acquittal of the accused on the ground
that his guilt has not been proved beyond reasonable doubt
does not necessarily exempt him from civil liability for the same
act or omission, has been explained by the Code Commission as
follows:
The old rule that the acquittal of the accused in a
criminal case also releases him from civil liability is one
of the most serious flaws in the Philippine legal system.
It has given rise to numberless instances of miscarriage
of justice, where the acquittal was due to a reasonable
doubt in the mind of the court as to the guilt of the
accused. The reasoning followed is that inasmuch as the
civil responsibility is derived from the criminal offense,
when the latter is not proved, civil liability cannot be
demanded.
 This is one of those causes where confused thinking
leads to unfortunate and deplorable consequences. Such
reasoning fails to draw a clear line of demarcation
between criminal liability and civil responsibility, and to
determine the logical result of the distinction. The two
liabilities are separate and distinct from each other. One
affects the social order and the other, private rights.
One is for the punishment or correction of the offender
while the other is for the reparation of damages suffered
by the aggrieved party. The two responsibilities are so
different from each other that article 1813 of the present
(Spanish) Civil Code reads thus: "There may be a
compromise upon the civil action arising from a crime;
but the public action for the imposition of the legal
penalty shall not thereby be extinguished." It is just and
proper that, for the purposes of the imprisonment of or
fine upon the accused, the offense should be proved
beyond reasonable doubt. But for the purpose of
indemnifying the complaining party, why should the
offense also be proved beyond reasonable doubt? Is not
the invasion or violation of every private right to be
proved only by a preponderance of evidence? Is the
right of the aggrieved person any less private because
the wrongful act is also punishable by the criminal law?
For these reasons, the Commission recommends the
adoption of the reform under discussion. It will correct a
serious defect in our law. It will close up an
inexhaustible source of injustice—a cause for
disillusionment on the part of the innumerable persons
injured or wronged.
Rosario Baluyot is a street child who ran away from her grandmother's
house.1âwphi1 Circumstances forced her to succumb and enter this
unfortunate profession. Nonetheless, she has left behind heirs who have
certainly suffered mental anguish, anxiety and moral shock by her
sudden and incredulous death as reflected in the records of the case.
Though we are acquitting the appellant for the crime of rape with
homicide, we emphasize that we are not ruling that he is innocent or
blameless. It is only the constitutional presumption of innocence and the
failure of the prosecution to build an airtight case for conviction which
saved him, not that the facts of unlawful conduct do not exist. As earlier
stated, there is the likelihood that he did insert the vibrator whose end
was left inside Rosario's vaginal canal and that the vibrator may have
caused her death. True, we cannot convict on probabilities or
possibilities but civil liability does not require proof beyond reasonable
doubt. The Court can order the payment of indemnity on the facts found
in the records of this case.
The appellant certainly committed acts contrary to morals, good
customs, public order or public policy (see Article 21 Civil Code). As
earlier mentioned, the appellant has abused Filipino children, enticing
them with money. We can not overstress the responsibility for proper
behavior of all adults in the Philippines, including the appellant towards
young children. The sexual exploitation committed by the appellant
should not and can not be condoned. Thus, considering the
circumstances of the case, we are awarding damages to the heirs of
Rosario Baluyot in the amount of P30,000.00.
And finally, the Court deplores the lack of criminal laws which will
adequately protect street children from exploitation by pedophiles,
pimps, and, perhaps, their own parents or guardians who profit from the
sale of young bodies. The provisions on statutory rape and other related
offenses were never intended for the relatively recent influx of
pedophiles taking advantage of rampant poverty among the forgotten
segments of our society. Newspaper and magazine articles, media
exposes, college dissertations, and other studies deal at length with this
serious social problem but pedophiles like the appellant will continue to
enter the Philippines and foreign publications catering to them will
continue to advertise the availability of Filipino street children unless the
Government acts and acts soon. We have to acquit the appellant
because the Bill of Rights commands us to do so. We, however, express
the Court's concern about the problem of street children and the evils
committed against them. Something must be done about it.
WHEREFORE, the appealed judgment is REVERSED and SET ASIDE.
Appellant HEINRICH STEFAN RITTER is ACQUITTED on grounds of
reasonable doubt. The appellant is ordered to pay the amount of
P30,000.00 by way of moral and exemplary damages to the heirs of
Rosario Baluyot. The Commissioner of Immigration and Deportation is
hereby directed to institute proper deportation proceedings against the
appellant and to immediately expel him thereafter with prejudice to re-
entry into the country.
SO ORDERED
TORTIOUS INTERFERENCE WITH CONTRACT (ARTICLE 1314)
G.R. No. L-9356 February 18, 1915
C. S. GILCHRIST, plaintiff-appellee,
vs.
E. A. CUDDY, ET AL., defendants.
JOSE FERNANDEZ ESPEJO and MARIANO
ZALDARRIAGA, appellants.
C. Lozano for appellants.
Bruce, Lawrence, Ross and Block for appellee.
TRENT, J.:
An appeal by the defendants, Jose Fernandez Espejo and Mariano
Zaldarriaga, from a judgment of the Court of First Instance of Iloilo,
dismissing their cross-complaint upon the merits for damages against
the plaintiff for the alleged wrongful issuance of a mandatory and a
preliminary injunction.
Upon the application of the appellee an ex parte mandatory injunction
was issued on the 22d of May, 1913, directing the defendant, E. A.
Cuddy, to send to the appellee a certain cinematograph film called
"Zigomar" in compliance with an alleged contract which had been
entered into between these two parties, and at the time an ex
partepreliminary injunction was issued restraining the appellants from
receiving and exhibiting in their theater the Zigomar until further orders
of the court. On the 26th of that month the appellants appeared and
moved the court to dissolve the preliminary injunction. When the case
was called for trial on August 6, the appellee moved for the dismissal of
the complaint "for the reason that there is no further necessity for the
maintenance of the injunction." The motion was granted without
objection as to Cuddy and denied as to the appellants in order to give
them an opportunity to prove that the injunction were wrongfully issued
and the amount of damages suffered by reason thereof.
The pertinent part of the trial court's findings of fact in this case is as
follows:
It appears in this case that Cuddy was the owner of the film
Zigomar and that on the 24th of April he rented it to C. S.
Gilchrist for a week for P125, and it was to be delivered on the
26th of May, the week beginning that day. A few days prior to
this Cuddy sent the money back to Gilchrist, which he had
forwarded to him in Manila, saying that he had made other
arrangements with his film. The other arrangements was the
rental to these defendants Espejo and his partner for P350 for
the week and the injunction was asked by Gilchrist against these
parties from showing it for the week beginning the 26th of May.
It appears from the testimony in this case, conclusively, that
Cuddy willfully violated his contract, he being the owner of the
picture, with Gilchrist because the defendants had offered him
more for the same period. Mr. Espejo at the trial on the
permanent injunction on the 26th of May admitted that he knew
that Cuddy was the owner of the film. He was trying to get it
through his agents Pathe Brothers in Manila. He is the agent of
the same concern in Iloilo. There is in evidence in this case on
the trial today as well as on the 26th of May, letters showing
that the Pathe Brothers in Manila advised this man on two
different occasions not to contend for this film Zigomar because
the rental price was prohibitive and assured him also that he
could not get the film for about six weeks. The last of these
letters was written on the 26th of April, which showed
conclusively that he knew they had to get this film from Cuddy
and from this letter that the agent in Manila could not get it, but
he made Cuddy an offer himself and Cuddy accepted it because
he was paying about three times as much as he had contracted
with Gilchrist for. Therefore, in the opinion of this court, the
 defendants failed signally to show the injunction against the
defendant was wrongfully procured.
The appellants duly excepted to the order of the court denying their
motion for new trial on the ground that the evidence was insufficient to
justify the decision rendered. There is lacking from the record before us
the deposition of the defendant Cuddy, which apparently throws light
upon a contract entered into between him and the plaintiff Gilchrist. The
contents of this deposition are discussed at length in the brief of the
appellants and an endeavor is made to show that no such contract was
entered into. The trial court, which had this deposition before it, found
that there was a contract between Cuddy and Gilchrist. Not having the
deposition in question before us, it is impossible to say how strongly it
militates against this findings of fact. By a series of decisions we have
construed section 143 and 497 (2) of the Code of Civil Procedure to
require the production of all the evidence in this court. This is the duty
of the appellant and, upon his failure to perform it, we decline to
proceed with a review of the evidence. In such cases we rely entirely
upon the pleadings and the findings of fact of the trial court and
examine only such assigned errors as raise questions of law.
(Ferrer vs. Neri Abejuela, 9 Phil. Rep., 324; Valle vs. Galera, 10 Phil.
Rep., 619; Salvacion vs. Salvacion, 13 Phil. Rep., 366; Breta vs. Smith,
Bell & Co., 15 Phil. Rep., 446; Arroyo vs. Yulo, 18 Phil. Rep., 236; Olsen
& Co. vs. Matson, Lord & Belser Co., 19 Phil. Rep., 102;
Blum vs. Barretto, 19 Phil. Rep., 161; Cuyugan vs. Aguas, 19 Phil. Rep.,
379; Mapa vs. Chaves, 20 Phil. Rep., 147; Mans vs. Garry, 20 Phil.
Rep., 134.) It is true that some of the more recent of these cases make
exceptions to the general rule. Thus, in Olsen & Co. vs.Matson, Lord &
Belser Co., (19 Phil. Rep., 102), that portion of the evidence before us
tended to show that grave injustice might result from a strict reliance
upon the findings of fact contained in the judgment appealed from. We,
therefore, gave the appellant an opportunity to explain the omission.
But we required that such explanation must show a satisfactory reason
for the omission, and that the missing portion of the evidence must be
submitted within sixty days or cause shown for failing to do so. The
other cases making exceptions to the rule are based upon peculiar
circumstances which will seldom arise in practice and need not here be
set forth, for the reason that they are wholly inapplicable to the present
case. The appellants would be entitled to indulgence only under the
doctrine of the Olsen case. But from that portion of the record before us,
we are not inclined to believe that the missing deposition would be
sufficient to justify us in reversing the findings of fact of the trial court
that the contract in question had been made. There is in the record not
only the positive and detailed testimony of Gilchrist to this effect, but
there is also a letter of apology from Cuddy to Gilchrist in which the
former enters into a lengthy explanation of his reasons for leasing the
film to another party. The latter could only have been called forth by a
broken contract with Gilchrist to lease the film to him. We, therefore, fail
to find any reason for overlooking the omission of the defendants to
bring up the missing portion of the evidence and, adhering to the
general rule above referred to, proceed to examine the questions of law
raised by the appellants.
From the above-quoted findings of fact it is clear that Cuddy, a resident
of Manila, was the owner of the "Zigomar;" that Gilchrist was the owner
of a cinematograph theater in Iloilo; that in accordance with the terms
of the contract entered into between Cuddy and Gilchrist the former
leased to the latter the "Zigomar" for exhibition in his (Gilchrist's)
theater for the week beginning May 26, 1913; and that Cuddy willfully
violate his contract in order that he might accept the appellant's offer of
P350 for the film for the same period. Did the appellants know that they
were inducing Cuddy to violate his contract with a third party when they
induced him to accept the P350? Espejo admitted that he knew that
Cuddy was the owner of the film. He received a letter from his agents in
Manila dated April 26, assuring him that he could not get the film for
about six weeks. The arrangement between Cuddy and the appellants
for the exhibition of the film by the latter on the 26th of May were
perfected after April 26, so that the six weeks would include and extend
beyond May 26. The appellants must necessarily have known at the
time they made their offer to Cuddy that the latter had booked or
contracted the film for six weeks from April 26. Therefore, the inevitable
conclusion is that the appellants knowingly induced Cuddy to violate his
contract with another person. But there is no specific finding that the
appellants knew the identity of the other party. So we must assume that
they did not know that Gilchrist was the person who had contracted for
the film.
The appellants take the position that if the preliminary injunction had
not been issued against them they could have exhibited the film in their
theater for a number of days beginning May 26, and could have also
subleased it to other theater owners in the nearby towns and, by so
doing, could have cleared, during the life of their contract with Cuddy,
the amount claimed as damages. Taking this view of the case, it will be
unnecessary for us to inquire whether the mandatory injunction against
Cuddy was properly issued or not. No question is raised with reference
to the issuance of that injunction.
The right on the part of Gilchrist to enter into a contract with Cuddy for
the lease of the film must be fully recognized and admitted by all. That
Cuddy was liable in an action for damages for the breach of that
contract, there can be no doubt. Were the appellants likewise liable for
interfering with the contract between Gilchrist and Cuddy, they not
knowing at the time the identity of one of the contracting parties? The
appellants claim that they had a right to do what they did. The ground
upon which the appellants base this contention is, that there was no
valid and binding contract between Cuddy and Gilchrist and that,
therefore, they had a right to compete with Gilchrist for the lease of the
film, the right to compete being a justification for their acts. If there had
been no contract between Cuddy and Gilchrist this defense would be
tenable, but the mere right to compete could not justify the appellants
in intentionally inducing Cuddy to take away the appellee's contractual
rights.
Chief Justice Wells in Walker vs. Cronin (107 Mass., 555), said:
"Everyone has a right to enjoy the fruits and advantages of his own
enterprise, industry, skill and credit. He has no right to be free from
malicious and wanton interference, disturbance or annoyance. If
disturbance or loss come as a result of competition, or the exercise of
like rights by others, it is damnum absque injuria, unless some superior
right by contract or otherwise is interfered with."
In Read vs. Friendly Society of Operative Stonemasons ([1902] 2 K. B.,
88), Darling, J., said: "I think the plaintiff has a cause of action against
the defendants, unless the court is satisfied that, when they interfered
with the contractual rights of plaintiff, the defendants had a sufficient
justification for their interference; . . . for it is not a justification that
`they acted bona fide in the best interests of the society of masons,' i.
e., in their own interests. Nor is it enough that `they were not actuated
by improper motives.' I think their sufficient justification for interference
with plaintiff's right must be an equal or superior right in themselves,
and that no one can legally excuse himself to a man, of whose contract
he has procured the breach, on the ground that he acted on a wrong
understanding of his own rights, or without malice, or bona fide, or in
the best interests of himself, or even that he acted as an altruist,
seeking only good of another and careless of his own advantage."
(Quoted with approval in Beekman vs. Marsters, 195 Mass., 205.)
It is said that the ground on which the liability of a third party for
interfering with a contract between others rests, is that the interference
was malicious. The contrary view, however, is taken by the Supreme
Court of the United States in the case of Angle vs. Railway Co. (151 U.
S., 1). The only motive for interference by the third party in that case
was the desire to make a profit to the injury of one of the parties of the
contract. There was no malice in the case beyond the desire to make an
unlawful gain to the detriment of one of the contracting parties.
In the case at bar the only motive for the interference with the Gilchrist
— Cuddy contract on the part of the appellants was a desire to make a
profit by exhibiting the film in their theater. There was no malice beyond
this desire; but this fact does not relieve them of the legal liability for
interfering with that contract and causing its breach. It is, therefore,
clear, under the above authorities, that they were liable to Gilchrist for
the damages caused by their acts, unless they are relieved from such
liability by reason of the fact that they did not know at the time the
identity of the original lessee (Gilchrist) of the film.
The liability of the appellants arises from unlawful acts and not from
contractual obligations, as they were under no such obligations to
induce Cuddy to violate his contract with Gilchrist. So that if the action
of Gilchrist had been one for damages, it would be governed by chapter
2, title 16, book 4 of the Civil Code. Article 1902 of that code provides
that a person who, by act or omission, causes damages to another when
there is fault or negligence, shall be obliged to repair the damage do
done. There is nothing in this article which requires as a condition
precedent to the liability of a tort-feasor that he must know the identity
of a person to whom he causes damages. In fact, the chapter wherein
this article is found clearly shows that no such knowledge is required in
order that the injured party may recover for the damage suffered.
But the fact that the appellants' interference with the Gilchrist contract
was actionable did not of itself entitle Gilchrist to sue out an injunction
against them. The allowance of this remedy must be justified under
section 164 of the Code of Civil Procedure, which specifies the
circumstance under which an injunction may issue. Upon the general
doctrine of injunction we said in Devesa vs. Arbes (13 Phil. Rep., 273):
An injunction is a "special remedy" adopted in that code (Act No.
190) from American practice, and originally borrowed from
English legal procedure, which was there issued by the authority
and under the seal of a court of equity, and limited, as in order
cases where equitable relief is sought, to cases where there is
no "plain, adequate, and complete remedy at law," which "will
not be granted while the rights between the parties are
undetermined, except in extraordinary cases where material and
irreparable injury will be done," which cannot be compensated in
damages, and where there will be no adequate remedy, and
which will not, as a rule, be granted, to take property out of the
possession of one party and put it into that of another whose
title has not been established by law.
We subsequently affirmed the doctrine of the Devesa case in
Palafox vs. Madamba (19 Phil., Rep., 444), and we take this occasion of
again affirming it, believing, as we do, that the indiscriminate use of
injunctions should be discouraged.
Does the fact that the appellants did not know at the time the identity of
the original lessee of the film militate against Gilchrist's right to a
preliminary injunction, although the appellant's incurred civil liability for
damages for such interference? In the examination of the adjudicated
cases, where in injunctions have been issued to restrain wrongful
interference with contracts by strangers to such contracts, we have
been unable to find any case where this precise question was involved,
as in all of those cases which we have examined, the identity of both of
the contracting parties was known to the tort-feasors. We might say,
however, that this fact does not seem to have a controlling feature in
those cases. There is nothing in section 164 of the Code of Civil
Procedure which indicates, even remotely, that before an injunction may
issue restraining the wrongful interference with contrast by strangers,
the strangers must know the identity of both parties. It would seem that
this is not essential, as injunctions frequently issue against municipal
corporations, public service corporations, public officers, and others to
restrain the commission of acts which would tend to injuriously affect
the rights of person whose identity the respondents could not possibly
have known beforehand. This court has held that in a proper case
injunction will issue at the instance of a private citizen to restrain ultra
vires acts of public officials. (Severino vs. Governor-General, 16 Phil.
Rep., 366.) So we proceed to the determination of the main question of
whether or not the preliminary injunction ought to have been issued in
this case.
As a rule, injunctions are denied to those who have an adequate remedy
at law. Where the choice is between the ordinary and the extraordinary
processes of law, and the former are sufficient, the rule will not permit
the use of the latter. (In re Debs, 158 U. S., 564.) If the injury is
irreparable, the ordinary process is inadequate. In Wahle vs.Reinbach
(76 Ill., 322), the supreme court of Illinois approved a definition of the
term "irreparable injury" in the following language: "By `irreparable
injury' is not meant such injury as is beyond the possibility of repair, or
beyond possible compensation in damages, nor necessarily great injury
or great damage, but that species of injury, whether great or small, that
ought not to be submitted to on the one hand or inflicted on the other;
and, because it is so large on the one hand, or so small on the other, is
of such constant and frequent recurrence that no fair or reasonable
redress can be had therefor in a court of law." (Quoted with approval in
Nashville R. R. Co. vs. McConnell, 82 Fed., 65.)
The case at bar is somewhat novel, as the only contract which was
broken was that between Cuddy and Gilchrist, and the profits of the
appellee depended upon the patronage of the public, for which it is
conceded the appellants were at liberty to complete by all fair does not
deter the application of remarked in the case of the "ticket scalpers" (82
Fed., 65), the novelty of the facts does not deter the application of
equitable principles. This court takes judicial notice of the general
character of a cinematograph or motion-picture theater. It is a quite
modern form of the play house, wherein, by means of an apparatus
known as a cinematograph or cinematograph, a series of views
representing closely successive phases of a moving object, are exhibited
in rapid sequence, giving a picture which, owing to the persistence of
vision, appears to the observer to be in continuous motion. (The
Encyclopedia Britanica, vol. 6, p. 374.) The subjects which have lent
themselves to the art of the photographer in this manner have increased
enormously in recent years, as well as have the places where such
exhibition are given. The attendance, and, consequently, the receipts, at
one of these cinematograph or motion-picture theaters depends in no
small degree upon the excellence of the photographs, and it is quite
common for the proprietor of the theater to secure an especially
attractive exhibit as his "feature film" and advertise it as such in order
to attract the public. This feature film is depended upon to secure a
larger attendance that if its place on the program were filled by other
films of mediocre quality. It is evident that the failure to exhibit the
feature film will reduce the receipts of the theater.
Hence, Gilchrist was facing the immediate prospect of diminished profits
by reason of the fact that the appellants had induced Cuddy to rent to
them the film Gilchrist had counted upon as his feature film. It is quite
apparent that to estimate with any decree of accuracy the damages
which Gilchrist would likely suffer from such an event would be quite
difficult if not impossible. If he allowed the appellants to exhibit the film
in Iloilo, it would be useless for him to exhibit it again, as the desire of
the public to witness the production would have been already satisfied.
In this extremity, the appellee applied for and was granted, as we have
indicated, a mandatory injunction against Cuddy requiring him to deliver
the Zigomar to Gilchrist, and a preliminary injunction against the
appellants restraining them from exhibiting that film in their theater
during the weeks he (Gilchrist) had a right to exhibit it. These injunction
saved the plaintiff harmless from damages due to the unwarranted
interference of the defendants, as well as the difficult task which would
have been set for the court of estimating them in case the appellants
had been allowed to carry out their illegal plans. As to whether or not
the mandatory injunction should have been issued, we are not, as we
have said, called upon to determine. So far as the preliminary injunction
issued against the appellants is concerned, which prohibited them from
exhibiting the Zigomar during the week which Gilchrist desired to exhibit
it, we are of the opinion that the circumstances justified the issuance of
that injunction in the discretion of the court.
We are not lacking in authority to support our conclusion that the court
was justified in issuing the preliminary injunction against the appellants.
Upon the precise question as to whether injunction will issue to restrain
wrongful interference with contracts by strangers to such contracts, it
may be said that courts in the United States have usually granted such
relief where the profits of the injured person are derived from his
contractual relations with a large and indefinite number of individuals,
thus reducing him to the necessity of proving in an action against the
tort-feasor that the latter was responsible in each case for the broken
contract, or else obliging him to institute individual suits against each
contracting party and so exposing him to a multiplicity of suits. Sperry &
Hutchinson Co. vs.Mechanics' Clothing Co. (128 Fed., 800); Sperry &
Hutchinson Co. vs. Louis Weber & Co. (161 Fed., 219); Sperry &
Hutchinson Co. vs. Pommer (199 Fed., 309); were all cases wherein the
respondents were inducing retail merchants to break their contracts with
the company for the sale of the latters' trading stamps. Injunction
issued in each case restraining the respondents from interfering with
such contracts.
In the case of the Nashville R. R. Co. vs. McConnell (82 Fed., 65), the
court, among other things, said: "One who wrongfully interferes in a
contract between others, and, for the purpose of gain to himself induces
one of the parties to break it, is liable to the party injured thereby; and
his continued interference may be ground for an injunction where the
injuries resulting will be irreparable."
In Hamby & Toomer vs. Georgia Iron & Coal Co. (127 Ga., 792), it
appears that the respondents were interfering in a contract for prison
labor, and the result would be, if they were successful, the shutting
down of the petitioner's plant for an indefinite time. The court held that
although there was no contention that the respondents were insolvent,
the trial court did not abuse its discretion in granting a preliminary
injunction against the respondents.
In Beekman vs. Marsters (195 Mass., 205), the plaintiff had obtained
from the Jamestown Hotel Corporation, conducting a hotel within the
grounds of the Jamestown Exposition, a contract whereby he was made
their exclusive agent for the New England States to solicit patronage for
the hotel. The defendant induced the hotel corporation to break their
contract with the plaintiff in order to allow him to act also as their agent
in the New England States. The court held that an action for damages
would not have afforded the plaintiff adequate relief, and that an
injunction was proper compelling the defendant to desist from further
interference with the plaintiff's exclusive contract with the hotel
company.
In Citizens' Light, Heat & Power Co. vs. Montgomery Light & Water
Power Co. (171 Fed., 553), the court, while admitting that there are
some authorities to the contrary, held that the current authority in the
United States and England is that:
The violation of a legal right committed knowingly is a cause of
action, and that it is a violation of a legal right to interfere with
contractual relations recognized by law, if there be no sufficient
justification for the interference. (Quinn vs. Leatham, supra,
510; Angle vs. Chicago, etc., Ry. Co., 151 U. S., 1; 14 Sup. Ct.,
240; 38 L. Ed., 55; Martens vs. Reilly, 109 Wis., 464, 84 N. W.,
840; Rice vs. Manley, 66 N. Y., 82; 23 Am. Rep., 30;
Bitterman vs. L. & N. R. R. Co., 207 U. S., 205; 28 Sup. Ct., 91;
52 L. Ed., 171; Beekman vs. Marsters, 195 Mass., 205; 80 N.
E., 817; 11 L. R. A. [N. S.] 201; 122 Am. St. Rep., 232; South
Wales Miners' Fed. vs.Glamorgan Coal Co., Appeal Cases, 1905,
p. 239.)
See also Nims on Unfair Business Competition, pp. 351- 371.
In 3 Elliot on Contracts, section 2511, it is said: "Injunction is the proper
remedy to prevent a wrongful interference with contract by strangers to
such contracts where the legal remedy is insufficient and the resulting
injury is irreparable. And where there is a malicious interference with
lawful and valid contracts a permanent injunction will ordinarily issue
without proof of express malice. So, an injunction may be issued where
the complainant to break their contracts with him by agreeing to
indemnify who breaks his contracts of employment may be adjoined
from including other employees to break their contracts and enter into
new contracts with a new employer of the servant who first broke his
contract. But the remedy by injunction cannot be used to restrain a
legitimate competition, though such competition would involve the
violation of a contract. Nor will equity ordinarily enjoin employees who
have quit the service of their employer from attempting by proper
argument to persuade others from taking their places so long as they do
not resort to force or intimidations on obstruct the public
thoroughfares."
Beekman vs. Marster, supra, is practically on all fours with the case at
bar in that there was only one contract in question and the profits of the
injured person depended upon the patronage of the public. Hamby &
Toomer vs.Georgia Iron & Coal Co., supra, is also similar to the case at
bar in that there was only one contract, the interference of which was
stopped by injunction.
For the foregoing reasons the judgment is affirmed, with costs, against
the appellants.
Arellano, C.J., Torres, Carson and Araullo, JJ., concur.
Separate Opinions
MORELAND, J., concurring:
The court seems to be of the opinion that the action is one for a
permanent injunction; whereas, under my view of the case, it is one for
specific performance. The facts are simple. C. S. Gilchrist, the plaintiff,
proprietor of the Eagle Theater of Iloilo, contracted with E. A. Cuddy,
one of the defendants, of Manila, for a film entitled "Zigomar or Eelskin,
3d series," to be exhibited in his theater in Iloilo during the week
beginning May 26, 1913. Later, the defendants Espejo and Zaldarriaga,
who were also operating a theater in Iloilo, representing Pathe Freres,
also obtained from Cuddy a contract for the exhibition of the film
aforesaid in their theater in Iloilo during the same week.
The plaintiff commenced this action against Cuddy and the defendants
Espejo and Zaldarriaga for the specific performance of the contract with
Cuddy. The complaint prays "that the court, by a mandatory injunction,
order Cuddy to deliver, on the 24th of May, 1913, in accordance with
the aforesaid contract, the said film 'Zigomar, 3d series, or Eelskin,' to
the plaintiff Gilchrist, in accordance with the terms of the agreement, so
that plaintiff can exhibit the same during the last week beginning May
26, 1913, in the Eagle Theater, in Iloilo; that the court issue a
preliminary injunction against the defendants Espejo and Zaldarriaga
prohibiting them from receiving, exhibiting, or using said film in Iloilo
during the last week of May, 1913, or at any other time prior to the
delivery to the plaintiff ; that, on the trial, said injunction be made
perpetual and that Cuddy be ordered and commanded to specifically
perform his contract with the plaintiff ."
On the filing of the complaint the plaintiff made an application for a
mandatory injunction compelling the defendant Cuddy to deliver to
plaintiff the film in question by mailing it to him from Manila on the 24th
of May so that it would reach Iloilo for exhibition on the 26th; and for a
preliminary restraining order against the order two defendants
prohibiting them from receiving or exhibiting the said film prior to its
exhibition by plaintiff.
The court, on this application, entered an order which provided that
Cuddy should "not send said film 'Zigomar, 3d series, or Eelskin,' to the
defendants Espejo and Zaldarriaga and that he should send it to the
plaintiff, Gilchrist, on the 24th day of May, 1913, in the mail for Iloilo,"
This order was duly served on the defendants, including Cuddy, in
whose possession the film still was, and, in compliance therewith Cuddy
mailed the film to the plaintiff at Iloilo on the 24th of May. The latter
duly received it and exhibited it without molestation during the week
beginning the 26th of May in accordance with the contract which he
claimed to have made with Cuddy.
The defendants Espejo and Zaldarriaga having received due notice of
the issuance of the mandatory injunction and restraining order of the
22d of May, appeared before the court on the 26th of May and moved
that the court vacate so much of the order as prohibited them from
receiving and exhibiting the film. In other words, while the order of the
22d of May was composed of two parts, one a mandatory order for
immediate specific performance of the plaintiff's contract with the
defendant Cuddy, and the other a preliminary restraining order directed
to Espejo and Zaldarriaga prohibiting them from receiving and exhibiting
the film during the week beginning the 26th of May, their motion of the
26th of May referred exclusively to the injunction against them and
touched in no way that portion of the order which required the
immediate performance by Cuddy of his contract with Gilchrist. Indeed,
the defendants Espejo and Zaldarriaga did not even except to the order
requiring Cuddy to specifically perform his agreement with the plaintiff
nor did they in any way make an objection to or show their disapproval
of it. It was not excepted to or appealed from and is not before this
court for review.
The motion of Espejo and Zaldarriaga to vacate the injunction
restraining them from receiving the film was denied on the 26th of May.
After the termination of the week beginning May 26th, and after the
exhibition of the film by the plaintiff in accordance with the alleged
contract with Cuddy, the plaintiff came into court and moved that, in
view of the fact that he had already obtained all that he desired to
obtain or could obtain by his action, namely, the exhibition of the film in
question during the week beginning May 26th, there was no reason for
continuing it and moved for its dismissal. To this motion Cuddy
consented and the action was dismissed as to him. But the other
defendants objected to the dismissal of the action on the ground that
they desired to present to the court evidence showing the damages
which they had suffered by reason of the issuance of the preliminary
injunction prohibiting them from receiving and exhibiting the film in
question during the week beginning May 26. The court sustained their
objection and declined to dismiss the action as to them, and, on the 8th
of August, heard the evidence as to damages. He denied defendants the
relief asked for and dismissed their claim for damages. They thereupon
took an appeal from that order, and that is the appeal which we have
now before us and which is the subject of the opinion of the court with
which I am concurring.
We thus have this strange condition:
An action for specific performance of a contract to deliver a film for
exhibition during a given time. A preliminary mandatory injunction
ordering the delivery of the film in accordance with the contract. The
delivery of the film in accordance with the preliminary mandatory
injunction. The actual exhibition of the film during the time specified in
the contract. No objection to the issuance of the mandatory injunction,
to the delivery of the film, or to the ground that the plaintiff had
obtained full relief by means of the so-called preliminary remedy by
virtue of which the contract was actually specifically performed before
the action was tried. No objection or exception to the order requiring the
specific performance of the contract.
Under such conditions it is possible for the defendant Espejo and
Zaldarriaga to secure damages for the wrongful issuance of the
preliminary injunction directed against them even though it be admitted
that it was erroneously issued and that there was no ground therefor
whatever? It seems to me that it is not. At the time this action was
begun the film, as we have seen, was in the possession of Cuddy and,
while in his possession, he complied with a command of the court to
deliver it to plaintiff. In pursuance of that command he delivered it to
plaintiff, who used it during the time specified in his contract with
Cuddy; or, in other words, he made such use of it as he desired and
then returned it to Cuddy. This order and the delivery of the film under
it were made in an action in which the defendants Espejo and
Zaldarriaga were parties, without objection on their part and without
objection or exception to the order. The film having been delivered to
defendants' competitor, the plaintiff, under a decree of the court to
which they made no objection and took no exception and from which
they have not appealed, what injury can they show by reason of the
injunction restraining them from making use of the film? If they
themselves, by their conduct, permitted the plaintiff to make it
impossible for them to gain possession of the film and to use it, then the
preliminary injunction produced no injury for the reason that no harm
can result from restraining a party from doing a thing which, without
such restraint, it would be impossible for him to do. Moreover, the order
for the delivery of the film to plaintiff was a complete determination of
the rights of the parties to the film which, while the court had no right to
make, nevertheless, was valid and binding on all the parties, none of
them objecting or taking exception thereto. Being a complete
determination of the rights of the parties to the action, it should have
been the first point attacked by the defendants, as it foreclosed them
completely and, if left in force, eliminating every defense. This order
was made on May 22d and was not excepted to or appealed from. On
the 8th of August following the defendants appealed from the order
dismissing their claim to damages but the order for the delivery of the
film to plaintiff was final at that time and is now conclusive on this court.
Section 143 of the Code of Civil Procedure, providing for appeals by bill
of exceptions, provides that "upon the rendition of final
judgment disposing of the action, either party shall have the right to
perfect a bill of exceptions for a review by the Supreme Court of all
rulings, orders, and judgment made in the action, to which the party
has duly excepted at the time of making such ruling, order, or
judgment." While the order for the delivery of the film to plaintiff was in
one sense a preliminary order, it was in reality a final determination of
the rights of the parties to the film, as it ordered the delivery thereof to
plaintiff for his use. If it had been duly excepted to, its validity could
have been attacked in an appeal from the final judgment thereafter
entered in the action. Not having been excepted to as required by the
section just referred to, it became final and conclusive on all the parties
to the action, and when, on the 8th day of August following, the
defendants presented their claim for damages based on the alleged
wrongful issuance of a temporary restraining order, the whole
foundation of their claim had disappeared by virtue of the fact that the
execution of the order of the 22d of May had left nothing for them to
litigate. The trial court, on the 8th of August, would have been fully
justified in refusing to hear the defendants on their claim for damages.
Their right thereto had been adjudicated on the 22d of May and that
adjudication had been duly put into execution without protest, objection
or exception, and was, therefore, final and conclusive on them on the
8th of August.
I have presented this concurring opinion in an attempt to prevent
confusion, if any, which might arise from the theory on which the court
decides this case. It seems to me impossible that the action can be one
for a permanent injunction. The very nature of the case demonstrates
that a permanent injunction is out of the question. The only thing that
plaintiff desired was to be permitted to use the film for the week
beginning the 26th of May. With the termination of that week his rights
expired. After that time Cuddy was perfectly free to turn the film over to
the defendants Espejo and Zaldarriaga for exhibition at any time. An
injunction permanently prohibiting the defendants from exhibiting the
film in Iloilo would have been unjustifiable, as it was something that
plaintiff did not ask and did not want; and would have been an invasion
of the rights of Cuddy as, after the termination of the week beginning
May 26, he was at liberty, under his contract with plaintiff, to rent the
film to the defendants Espejo and Zaldarriaga and permit its exhibition
in Iloilo at any time. The plaintiff never asked to have
defendants permanently enjoined from exhibiting the film in Iloilo and
no party to the action has suggested such thing.
The action is one for specific performance purely; and while the court
granted plaintiff rights which should have been granted only after a trial
of the action, nevertheless, such right having been granted before trial
and none of the defendants having made objection or taken exception
thereto, and the order granting them having become final, such order
became a final determination of the action, by reason of the nature of
the action itself, the rights of the parties became thereby finally
determined and the defendants Espejo and Zaldarriaga, being parties to
the action, were precluded from further litigation relative to the subject
matter of the controversy.
No damages are claimed by reason of the issuance of the mandatory
injunction under which the film was delivered to plaintiff and used by
him during the week beginning the 26th of May. While the opinion says
in the first paragraph that the action is "for damages against the plaintiff
for the alleged wrongful issuance of a mandatory and preliminary
injunction," the opinion also says in a latter portion that "It will be
unnecessary for us to inquire whether the mandatory injunction against
Cuddy was properly issued or not. No question is raised with reference
to the issuance of that injunction;" and still later it is also stated that "as
to whether or not the mandatory injunction should have been issued, we
are not, as we have said, called upon to determine." I repeat that no
objection was made by the defendants to the issuance of the mandatory
injunction, no exception was taken to the order on which it was issued
and no appeal has been taken therefrom. That order is now final and
conclusive and was at the time this appeal was taken. That being so, the
rights of the defendants were foreclosed thereby. The defendants Espejo
and Zaldarriaga cannot now be heard to say that they were damaged by
the issuance of the preliminary restraining injunction issued on the same
day as the mandatory injunction.
From what has been said it is clear, it seems to me, that the question of
a breach of contract by inducement, which is substantially the only
question discussed and decided, is not in the case in reality and, in my
judgment, should not be touched upon. Courts will not proceed with a
litigation and discuss and decided question which might possibly be
involved in the case when it clearly appears that there remains nothing
about which to litigate, the whole subject matter of the original action
having been settled and the parties having no real controversy to
present. At the time the defendants Espejo and Zaldarriaga offered their
claim for damages arising out of the wrongful issuance of the restraining
order, there was nothing between them and the plaintiff to litigate, the
rightfulness of plaintiff's demand having already been finally adjudicated
and determined in the same action.
SO PING BUN, petitioner, vs. COURT OF APPEALS, TEK HUA
ENTERPRISING CORP. and MANUEL C.
TIONG, respondents.
DECISION
QUISUMBING, J.:
This petition for certiorari challenges the Decision[1] of the Court of
Appeals dated October 10, 1994, and the Resolution[2] dated June 5,
1995, in CA-G.R. CV No. 38784. The appellate court affirmed the decision
of the Regional Trial Court of Manila, Branch 35, except for the award of
attorneys fees, as follows:
"WHEREFORE, foregoing considered, the appeal of respondent-appellant
So Ping Bun for lack of merit is DISMISSED. The appealed decision
dated April 20, 1992 of the court a quo is modified by reducing the
attorney's fees awarded to plaintiff Tek Hua Enterprising Corporation
from P500,000.00 to P200,000.00."[3]
The facts are as follows:
In 1963, Tek Hua Trading Co, through its managing partner, So Pek
Giok, entered into lease agreements with lessor Dee C. Chuan & Sons Inc.
(DCCSI). Subjects of four (4) lease contracts were premises located at
Nos. 930, 930-Int., 924-B and 924-C, Soler Street, Binondo, Manila. Tek
Hua used the areas to store its textiles. The contracts each had a one-
year term. They provided that should the lessee continue to occupy the
premises after the term, the lease shall be on a month-to-month basis.
When the contracts expired, the parties did not renew the contracts,
but Tek Hua continued to occupy the premises. In 1976, Tek Hua Trading
Co. was dissolved. Later, the original members of Tek Hua Trading Co.
including Manuel C. Tiong, formed Tek Hua Enterprising Corp., herein
respondent corporation.
 So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So
Pek Gioks grandson, petitioner So Ping Bun, occupied the warehouse for
his own textile business, Trendsetter Marketing.
On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua
Enterprises, informing the latter of the 25% increase in rent effective
September 1, 1989. The rent increase was later on reduced to 20%
effective January 1, 1990, upon other lessees demand. Again on
December 1, 1990, the lessor implemented a 30% rent increase. Enclosed
in these letters were new lease contracts for signing. DCCSI warned that
failure of the lessee to accomplish the contracts shall be deemed as lack
of interest on the lessees part, and agreement to the termination of the
lease. Private respondents did not answer any of these letters. Still, the
lease contracts were not rescinded.
On March 1, 1991, private respondent Tiong sent a letter to
petitioner, which reads as follows:
March 1, 1991
Mr. So Ping Bun
930 Soler Street
Binondo, Manila
Dear Mr. So,
Due to my closed (sic) business associate (sic) for three decades with
your late grandfather Mr. So Pek Giok and late father, Mr. So Chong
Bon, I allowed you temporarily to use the warehouse of Tek Hua
Enterprising Corp. for several years to generate your personal business.
Since I decided to go back into textile business, I need a warehouse
immediately for my stocks. Therefore, please be advised to vacate all
your stocks in Tek Hua Enterprising Corp. Warehouse. You are hereby
given 14 days to vacate the premises unless you have good reasons
that you have the right to stay. Otherwise, I will be constrained to take
measure to protect my interest.
Please give this urgent matter your preferential attention to avoid
inconvenience on your part.
Very truly yours,
(Sgd) Manuel C. Tiong
MANUEL C. TIONG
President[4]
Petitioner refused to vacate. On March 4, 1992, petitioner requested
formal contracts of lease with DCCSI in favor Trendsetter Marketing. So
Ping Bun claimed that after the death of his grandfather, So Pek Giok, he
had been occupying the premises for his textile business and religiously
paid rent. DCCSI acceded to petitioners request. The lease contracts in
favor of Trendsetter were executed.
In the suit for injunction, private respondents pressed for the
nullification of the lease contracts between DCCSI and petitioner. They
also claimed damages.
After trial, the trial court ruled:
WHEREFORE, judgment is rendered:
1. Annulling the four Contracts of Lease (Exhibits A, A-1 to A-3,
inclusive) all dated March 11, 1991, between defendant So
Ping Bun, doing business under the name and style of
Trendsetter Marketing, and defendant Dee C. Chuan & Sons,
Inc. over the premises located at Nos. 924-B, 924-C, 930
and 930, Int., respectively, Soler Street, Binondo Manila;
2. Making permanent the writ of preliminary injunction issued
by this Court on June 21, 1991;
3. Ordering defendant So Ping Bun to pay the aggrieved party,
plaintiff Tek Hua Enterprising Corporation, the sum of
P500,000.00, for attorneys fees;
 4. Dismissing the complaint, insofar as plaintiff Manuel C. Tiong
is concerned, and the respective counterclaims of the
defendant;
5. Ordering defendant So Ping Bun to pay the costs of this
lawsuit;
This judgment is without prejudice to the rights of plaintiff Tek Hua
Enterprising Corporation and defendant Dee C. Chuan & Sons, Inc. to
negotiate for the renewal of their lease contracts over the premises
located at Nos. 930, 930-Int., 924-B and 924-C Soler Street, Binondo,
Manila, under such terms and conditions as they agree upon, provided
they are not contrary to law, public policy, public order, and morals.
SO ORDERED.[5]
Petitioners motion for reconsideration of the above decision was
denied.
On appeal by So Ping Bun, the Court of Appeals upheld the trial
court. On motion for reconsideration, the appellate court modified the
decision by reducing the award of attorneys fees from five hundred
thousand (P500,000.00) pesos to two hundred thousand (P200,000.00)
pesos.
Petitioner is now before the Court raising the following issues:
I. WHETHER THE APPELLATE COURT ERRED IN AFFIRMING THE
TRIAL COURTS DECISION FINDING SO PING BUN GUILTY OF
TORTUOUS INTERFERENCE OF CONTRACT?
II. WHETHER THE APPELLATE COURT ERRED IN AWARDING
ATTORNEYS FEES OF P200,000.00 IN FAVOR OF PRIVATE
RESPONDENTS.
The foregoing issues involve, essentially, the correct interpretation
of the applicable law on tortuous conduct, particularly unlawful
interference with contract. We have to begin, obviously, with certain
fundamental principles on torts and damages.
Damage is the loss, hurt, or harm which results from injury, and
damages are the recompense or compensation awarded for the damage
suffered.[6] One becomes liable in an action for damages for a
nontrespassory invasion of anothers interest in the private use and
enjoyment of asset if (a) the other has property rights and privileges with
respect to the use or enjoyment interfered with, (b) the invasion is
substantial, (c) the defendants conduct is a legal cause of the invasion,
and (d) the invasion is either intentional and unreasonable or
unintentional and actionable under general negligence rules.[7]
The elements of tort interference are: (1) existence of a valid
contract; (2) knowledge on the part of the third person of the existence
of contract; and (3) interference of the third person is without legal
justification or excuse.[8]
A duty which the law of torts is concerned with is respect for the
property of others, and a cause of action ex delicto may be predicated
upon an unlawful interference by one person of the enjoyment by the
other of his private property.[9] This may pertain to a situation where a
third person induces a party to renege on or violate his undertaking under
a contract. In the case before us, petitioners Trendsetter Marketing asked
DCCSI to execute lease contracts in its favor, and as a result petitioner
deprived respondent corporation of the latters property right. Clearly, and
as correctly viewed by the appellate court, the three elements of tort
interference above-mentioned are present in the instant case.
Authorities debate on whether interference may be justified where
the defendant acts for the sole purpose of furthering his own financial or
economic interest.[10] One view is that, as a general rule, justification for
interfering with the business relations of another exists where the actors
motive is to benefit himself. Such justification does not exist where his
sole motive is to cause harm to the other.Added to this, some authorities
believe that it is not necessary that the interferers interest outweigh that
of the party whose rights are invaded, and that an individual acts under
an economic interest that is substantial, not merely de minimis, such that
wrongful and malicious motives are negatived, for he acts in self-
protection.[11] Moreover, justification for protecting ones financial position
should not be made to depend on a comparison of his economic interest
in the subject matter with that of others.[12] It is sufficient if the impetus
of his conduct lies in a proper business interest rather than in wrongful
motives.[13]
As early as Gilchrist vs. Cuddy,[14] we held that where there was no
malice in the interference of a contract, and the impulse behind ones
conduct lies in a proper business interest rather than in wrongful motives,
a party cannot be a malicious interferer. Where the alleged interferer is
financially interested, and such interest motivates his conduct, it cannot
be said that he is an officious or malicious intermeddler.[15]
In the instant case, it is clear that petitioner So Ping Bun prevailed
upon DCCSI to lease the warehouse to his enterprise at the expense of
respondent corporation. Though petitioner took interest in the property of
respondent corporation and benefited from it, nothing on record imputes
deliberate wrongful motives or malice on him.
Section 1314 of the Civil Code categorically provides also that, Any
third person who induces another to violate his contract shall be liable for
damages to the other contracting party. Petitioner argues that damage is
an essential element of tort interference, and since the trial court and the
appellate court ruled that private respondents were not entitled to actual,
moral or exemplary damages, it follows that he ought to be absolved of
any liability, including attorneys fees.
It is true that the lower courts did not award damages, but this was
only because the extent of damages was not quantifiable. We had a
similar situation in Gilchrist, where it was difficult or impossible to
determine the extent of damage and there was nothing on record to serve
as basis thereof. In that case we refrained from awarding damages. We
believe the same conclusion applies in this case.
While we do not encourage tort interferers seeking their economic
interest to intrude into existing contracts at the expense of others,
however, we find that the conduct herein complained of did not transcend
the limits forbidding an obligatory award for damages in the absence of
any malice. The business desire is there to make some gain to the
detriment of the contracting parties. Lack of malice, however, precludes
damages. But it does not relieve petitioner of the legal liability for entering
into contracts and causing breach of existing ones. The respondent
appellate court correctly confirmed the permanent injunction and
nullification of the lease contracts between DCCSI and Trendsetter
Marketing, without awarding damages. The injunction saved the
respondents from further damage or injury caused by petitioners
interference.
Lastly, the recovery of attorneys fees in the concept of actual or
compensatory damages, is allowed under the circumstances provided for
in Article 2208 of the Civil Code.[16] One such occasion is when the
defendants act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest.[17] But we have
consistently held that the award of considerable damages should have
clear factual and legal bases.[18] In connection with attorneys fees, the
award should be commensurate to the benefits that would have been
derived from a favorable judgment. Settled is the rule that fairness of the
award of damages by the trial court calls for appellate review such that
the award if far too excessive can be reduced.[19] This ruling applies with
equal force on the award of attorneys fees.In a long line of cases we said,
It is not sound policy to place a penalty on the right to litigate. To compel
the defeated party to pay the fees of counsel for his successful opponent
would throw wide open the door of temptation to the opposing party and
his counsel to swell the fees to undue proportions.[20]
Considering that the respondent corporations lease contract, at the
time when the cause of action accrued, ran only on a month-to-month
basis whence before it was on a yearly basis, we find even the reduced
amount of attorneys fees ordered by the Court of Appeals still exorbitant
in the light of prevailing jurisprudence.[21] Consequently, the amount of
two hundred thousand (P200,000.00) awarded by respondent appellate
court should be reduced to one hundred thousand (P100,000.00) pesos
as the reasonable award for attorneys fees in favor of private respondent
corporation.
WHEREFORE, the petition is hereby DENIED. The assailed Decision
and Resolution of the Court of Appeals in CA-G.R. CV No. 38784 are
hereby AFFIRMED, with MODIFICATION that the award of attorneys fees
is reduced from two hundred thousand (P200,000.00) to one hundred
thousand (P100,000.00) pesos. No pronouncement as to costs.
SO ORDERED.
PHILIP S. YU, G.R. No. 154115
Petitioner,
Present:
PUNO, J.,
Chairman,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR.,
TINGA, and
 CHICO-NAZARIO, JJ.
HON. COURT OF APPEALS, During trial, private respondent moved for the issuance of a subpoena
Second Division, and VIVECA duces tecum and ad testificandum[4] to certain officers of Insular Life
LIM YU, Promulgated:
Respondents. Assurance Co. Ltd. to compel production of the insurance policy and
November 29, 2005
application of a person suspected to be petitioners illegitimate
x-------------------------------------------------------------------x child.[5] The trial court denied the motion.[6] It ruled that the insurance

contract is inadmissible evidence in view of Circular Letter No. 11-2000,

DECISION
issued by the Insurance Commission which presumably prevents
TINGA, J.: insurance companies/agents from divulging confidential and privileged

information pertaining to insurance policies.[7] It added that the

This treats of the petition for review on certiorari of the Court of Appeals production of the application and insurance contract would violate Article
Decision and Resolution in CA G.R. SP No. 66252 dated 30 April 280[8] of the Civil Code and Section 5 of the Civil Registry Law, [9] both of
2002[1]and 27 June 2002,[2] respectively, which set aside the Order of the which prohibit the unauthorized identification of the parents of an
Regional Trial Court (RTC) of Pasig City[3] dated 10 May 2001, declaring illegitimate child.[10]Private respondent sought reconsideration of
an application for insurance and an insurance policy as inadmissible the Order, but the motion was denied by the trial court.[11]
evidence.

Aggrieved, private respondent filed a petition for certiorari before the

The facts of the case are undisputed. Court of Appeals, imputing grave abuse of discretion amounting to lack

or excess of jurisdiction on the part of Judge Hernandez in issuing the 10

On 15 March 1994, Viveca Lim Yu (private respondent) brought
against her husband, Philip Sy Yu (petitioner), an action for legal
separation and dissolution of conjugal partnership on the grounds of
marital infidelity and physical abuse. The case was filed before the RTC of
Pasig and raffled to Branch 158, presided by Judge Jose R. Hernandez.
May 2001 Order.[12] The Court of Appeals summarized the issues as
follows: (i) whether or not an insurance policy and its corresponding
application form can be admitted as evidence to prove a partys extra-
marital affairs in an action for legal separation; and (ii) whether or not a
trial court has the discretion to deny a partys motion to attach excluded
evidence to the record under Section 40, Rule 132 of the Rules of

Court.[13]

According to the Court of Appeals, private respondent was merely seeking
the production of the insurance application and contract, and was not yet
offering the same as part of her evidence. Thus, it declared that
petitioners objection to the admission of the documents was premature,
and the trial courts pronouncement that the documents are inadmissible,
precipitate.[14] The contents of the insurance application and insurance
documents cannot be considered as privileged information, the Court of
Appeals added, in view of the opinion of the Insurance Commissioner
dated 4 April 2001 to the effect that Circular Letter No.11-2000 was never
intended to be a legal impediment in complying with lawful
orders.[15]Lastly, the Court of Appeals ruled that a trial court does not
have the discretion to deny a partys privilege to tender excluded
evidence, as this privilege allows said party to raise on appeal the
exclusion of such evidence.[16] Petitioner filed a motion for reconsideration
but to no avail.
In the present petition, petitioner argues that the Court of Appeals
blundered in delving into errors of judgment supposedly committed by
the trial court as if the petition filed therein was an ordinary appeal and
not a special civil action. Further, he claims that the Court of Appeals
failed to show any specific instance of grave abuse of discretion on the
part of the trial court in issuing the assailed Order. Additionally, he posits
that private respondent had already mooted her petition before the Court
of Appeals when she filed her formal offer of rebuttal exhibits, with tender
of excluded evidence before the trial court.[17]
For her part, private respondent maintains that the details surrounding
the insurance policy are crucial to the issue of petitioners infidelity and
his financial capacity to provide support to her and their children. Further,
she argues that she had no choice but to make a tender of excluded
evidence considering that she was left to speculate on what the insurance
application and policy ruled out by the trial court would contain.[18]
A petition for certiorari under Rule 65 is the proper remedy to correct
errors of jurisdiction and grave abuse of discretion tantamount to lack or
excess of jurisdiction committed by a lower court.[19] Where a respondent
does not have the legal power to determine the case and yet he does so,
he acts without jurisdiction; where, being clothed with power to determine
the case, oversteps his authority as determined by law, he is performing
a function in excess of jurisdiction.[20]
Petitioner claims that the Court of Appeals passed upon errors of
judgment, not errors of jurisdiction, since it delved into the propriety of
the denial of the subpoena duces tecum and subpoena ad
testificandum. The argument must fail.
While trial courts have the discretion to admit or exclude
evidence, such power is exercised only when the evidence has been
formally offered.[21] For a long time, the Court has recognized that during
the early stages of the development of proof, it is impossible for a trial
court judge to know with certainty whether evidence is relevant or not,
and thus the practice of excluding evidence on doubtful objections to its
materiality should be avoided.[22] As well elucidated in the case of Prats & mere ruling on the admissibility of evidence; it was, more importantly, a

Co. v. Phoenix Insurance Co.:[23] ruling affecting the proper conduct of trial.[24]

Moreover, it must be remembered that in the heat

of the battle over which he presides a judge of first Excess of jurisdiction refers to any act which although falling
instance may possibly fall into error in judging of the
relevancy of proof where a fair and logical connection is within the general powers of the judge is not authorized and is
in fact shown. When such a mistake is made and the proof
consequently void with respect to the particular case because the
is erroneously ruled out, the Supreme Court, upon
appeal, often finds itself embarrassed and possibly unable conditions under which he was only authorized to exercise his general
to correct the effects of the error without returning the
case for a new trial, a step which this court is always very power in that case did not exist and therefore, the judicial power was not
loath to take. On the other hand, the admission of proof
legally exercised.[25] Thus, in declaring that the documents are irrelevant
in a court of first instance, even if the question as to its
form, materiality, or relevancy is doubtful, can never and inadmissible even before they were formally offered, much less
result in much harm to either litigant, because the trial
judge is supposed to know the law; and it is its duty, upon presented before it, the trial court acted in excess of its discretion.
final consideration of the case, to distinguish the relevant
and material from the irrelevant and immaterial. If this
course is followed and the cause is prosecuted to the Anent the issue of whether the information contained in the
Supreme Court upon appeal, this court then has all the
material before it necessary to make a correct judgment. documents is privileged in nature, the same was clarified and settled by

the Insurance Commissioners opinion that the circular on which the trial

In the instant case, the insurance application and the insurance court based its ruling was not designed to obstruct lawful court

policy were yet to be presented in court, much less formally offered before orders.[26]Hence, there is no more impediment to presenting the

it. In fact, private respondent was merely asking for the issuance insurance application and policy.

of subpoena duces tecum and subpoena ad testificandum when the trial

court issued the assailed Order. Even assuming that the documents would

eventually be declared inadmissible, the trial court was not then in a Petitioner additionally claims that by virtue of private respondents tender

position to make a declaration to that effect at that point. Thus, it barred of excluded evidence, she has rendered moot her petition before the Court

the production of the subject documents prior to the assessment of its of Appeals since the move evinced that she had another speedy and

probable worth. As observed by petitioners, the assailed Order was not a adequate remedy under the law. The Court holds otherwise.
Section 40, Rule 132 provides:
Sec.40. Tender of excluded evidence.If documents or
things offered in evidence are excluded by the court, the
offeror may have the same attached to or made part of
the record. If the evidence excluded is oral, the offeror
may state for the record the name and other personal
circumstances of the witness and the substance of the
proposed testimony.
It is thus apparent that before tender of excluded evidence is
made, the evidence must have been formally offered before the court.
And before formal offer of evidence is made, the evidence must have been
identified and presented before the court. While private respondent made
a Tender of Excluded Evidence, such is not the tender contemplated by
the above-quoted rule, for obviously, the insurance policy and application
were not formally offered much less presented before the trial court. At
most, said Tender of Excluded Evidence was a
manifestation of an undisputed fact that the subject documents were
declared inadmissible by the trial court even before these were presented
during trial. It was not the kind of plain, speedy and adequate remedy
which private respondent could have resorted to instead of the petition
for certiorari she filed before the Court of Appeals. It did not in any way
render the said petition moot.
WHEREFORE, premises considered, the petition is DENIED.
The Decision dated 30 April 2002 and Resolution dated 27 June 2002 are
AFFIRMED. Costs against petitioner.
SO ORDERED.
[G.R. No. 119107. March 18, 2005]
JOSE V. LAGON, petitioner, vs. HONORABLE COURT OF APPEALS
and MENANDRO V. LAPUZ, respondents.
DECISION
CORONA, J.:
On June 23, 1982, petitioner Jose Lagon purchased from the estate
of Bai Tonina Sepi, through an intestate court,[1] two parcels of land
located at Tacurong, Sultan Kudarat. A few months after the sale, private
respondent Menandro Lapuz filed a complaint for torts and damages
against petitioner before the Regional Trial Court (RTC) of Sultan Kudarat.
In the complaint, private respondent, as then plaintiff, claimed that
he entered into a contract of lease with the late Bai Tonina Sepi Mengelen
Guiabar over three parcels of land (the property) in Sultan Kudarat,
Maguindanao beginning 1964. One of the provisions agreed upon was for
private respondent to put up commercial buildings which would, in turn,
be leased to new tenants. The rentals to be paid by those tenants would
answer for the rent private respondent was obligated to pay Bai Tonina
Sepi for the lease of the land. In 1974, the lease contract ended but since
the construction of the commercial buildings had yet to be completed, the
lease contract was allegedly renewed.
 When Bai Tonina Sepi died, private respondent started remitting his
rent to the court-appointed administrator of her estate. But when the
administrator advised him to stop collecting rentals from the tenants of
the buildings he constructed, he discovered that petitioner, representing
himself as the new owner of the property, had been collecting rentals
from the tenants. He thus filed a complaint against the latter, accusing
petitioner of inducing the heirs of Bai Tonina Sepi to sell the property to
him, thereby violating his leasehold rights over it.
In his answer to the complaint, petitioner denied that he induced the
heirs of Bai Tonina to sell the property to him, contending that the heirs
were in dire need of money to pay off the obligations of the deceased. He
also denied interfering with private respondents leasehold rights as there
was no lease contract covering the property when he purchased it; that
his personal investigation and inquiry revealed no claims or
encumbrances on the subject lots.
Petitioner claimed that before he bought the property, he went to
Atty. Benjamin Fajardo, the lawyer who allegedly notarized the lease
contract between private respondent and Bai Tonina Sepi, to verify if the
parties indeed renewed the lease contract after it expired in 1974.
Petitioner averred that Atty. Fajardo showed him four copies of the lease
renewal but these were all unsigned. To refute the existence of a lease
contract, petitioner presented in court a certification from the Office of
the Clerk of Court confirming that no record of any lease contract
notarized by Atty. Fajardo had been entered into their files. Petitioner
added that he only learned of the alleged lease contract when he was
informed that private respondent was collecting rent from the tenants of
the building.
Finding the complaint for tortuous interference to be unwarranted,
petitioner filed his counterclaim and prayed for the payment of actual and
moral damages.
On July 29, 1986, the court a quo found for private respondent
(plaintiff below):
ACCORDINGLY, judgment is hereby rendered in favor of the plaintiff:
1. Declaring the Contract of Lease executed by Bai
Tonina Sepi Mangelen Guiabar in favor of the plaintiff on
November 6, 1974 (Exh. A and A-1) over Lot No. 6395,
Pls-73. Lot No 6396. Pls.-73. Lot No. 6399. 3ls-73, and
Lot no.9777-A. CSD-11-000076-D (Lot No. 3-A.
40124), all situated along Ledesma St., Tacurong,
Sultan Kudarat, which document was notarized by Atty.
Benjamin S. Fajardo, Sr. and entered into his notarial
register as Doc. No. 619. Page No. 24. Book No. II.
Series of 1974, to be authentic and genuine and as such
valid and binding for a period of ten (10) years specified
thereon from November 1, 1974 up to October 31,
1984;
2. Declaring the plaintiff as the lawful owner of the
commercial buildings found on the aforesaid lots and he
is entitled to their possession and the collection (of
rentals) of the said commercial buildings within the
period covered by this Contract of Lease in his favor;
3. Ordering the defendant to pay to the plaintiff the
following:
a) Rentals of the commercial buildings on the lots
covered by the Contract of Lease in favor of the
plaintiff for the period from October 1, 1978 up to
October 31, 1984, including accrued interests in the
total amount of Five Hundred Six Thousand Eight
Hundred Five Pesos and Fifty Six Centavos (P506,
850.56), the same to continue to bear interest at
the legal rate of 12% per annum until the whole
amount is fully paid by the defendant to the
plaintiff;
b) Moral damages in the amount of One Million Sixty
Two Thousand Five Hundred Pesos
(P1,062,500.00);
c) Actual or compensatory damages in the amount
of Three Hundred Twelve Thousand Five Hundred
Pesos (P312, 500.00);
 d) Exemplary or corrective damages in the amount
of One Hundred Eighty Thousand Five Hundred
Pesos (P187,500.00)
e) Temperate or moderate damages in the amount
of Sixty Two Thousand Five Hundred Pesos
(P62,500.00);
f) Nominal damages in the amount of Sixty Two
Thousand Five Hundred Pesos (P62,500.00);
g) Attorneys fees in the amount of One Hundred
Twenty Five Thousand Pesos (P125,000.00);
h) Expenses of litigation in the amount of Sixty Two
Thousand Five Hundred Pesos (P62,500.00);
i) Interest on the moral damages, actual or
compensatory damages temperate or moderate
damages, nominal damages, attorneys fees and
expenses of litigation in the amounts as specified
hereinabove from May 24, 1982 up to June 27,
1986, in the total amount of Nine Hundred
Thousand Pesos (P900,000.00); all of which will
continue to bear interests at a legal rate of 12% per
annum until the whole amounts are fully paid by
the defendants to the plaintiffs;
4. For failure of the defendant to deposit with this Court
all the rentals he had collected from the thirteen (13)
tenants or occupants of the commercial buildings in
question, the plaintiff is hereby restored to the
possession of his commercial buildings for a period of
seventy-three (73) months which is the equivalent of
the total period for which he was prevented from
collecting the rentals from the tenants or occupants of
his commercial buildings from October 1, 1978 up to
October 31, 1984, and for this purpose a Writ of
Preliminary Injunction is hereby issued, but the plaintiff
is likewise ordered to pay to the defendant the monthly
rental of Seven Hundred Pesos (P700.00) every end of
the month for the entire period of seventy three (73)
months. This portion of the judgment should be
considered as a mere alternative should the defendant
fail to pay the amount of Five Hundred Five Pesos and
Fifty Six Centavos (P506,805.56) hereinabove
specified;
5. Dismissing the counterclaim interposed by the
defendant for lack of merit;
6. With costs against the defendant.[2]
Petitioner appealed the judgment to the Court of Appeals.[3] In a
decision dated January 31, 1995,[4] the appellate court modified the
assailed judgment of the trial court as follows:
a) The award for moral damages,
compensatory damages, exemplary damages, temperate or
moderate damages, and nominal damages as well as
expenses of litigation in the amount of P62,500.00 and
interests under paragraph 3-a(a), (b), (c), (d), (e), (f), (g),
(h), and (i) are deleted;
b) The award for attorneys fees is
reduced to P30,000.00;
c) Paragraphs 1,2,5 and 6 are
AFFIRMED;
d) Additionally, the defendant is hereby
ordered to pay to the plaintiff by way of actual damages the
sum of P178,425.00 representing the amount of rentals he
collected from the period of October 1978 to August 1983,
and minus the amount of P42,700.00 representing rentals
due the defendant computed at P700.00 per month for the
period from August 1978 to August 1983, with interest
thereon at the rate until the same is fully paid;
e) Paragraph 4 is deleted.[5]
Before the appellate court, petitioner disclaimed knowledge of any
lease contract between the late Bai Tonina Sepi and private respondent.
On the other hand, private respondent insisted that it was impossible for
petitioner not to know about the contract since the latter was aware that
he was collecting rentals from the tenants of the building. While the
appellate court disbelieved the contentions of both parties, it nevertheless
held that, for petitioner to become liable for damages, he must have
known of the lease contract and must have also acted with malice or bad
faith when he bought the subject parcels of land.
Via this petition for review, petitioner cites the following reasons why
the Court should rule in his favor:
1. The Honorable Court of Appeals seriously erred in holding that
petitioner is liable for interference of contractual relation
under Article 1314 of the New Civil Code;
2. The Honorable Court of Appeals erred in not holding that
private respondent is precluded from recovering, if at all,
because of laches;
3. The Honorable Court of Appeals erred in holding petitioner
liable for actual damages and attorneys fees, and;
4. The Honorable Court of Appeals erred in dismissing
petitioners counterclaims.[6]
Article 1314 of the Civil Code provides that any third person who
induces another to violate his contract shall be liable for damages to the
other contracting party. The tort recognized in that provision is known as
interference with contractual relations.[7] The interference is penalized
because it violates the property rights of a party in a contract to reap the
benefits that should result therefrom.[8]
The core issue here is whether the purchase by petitioner of the
subject property, during the supposed existence of private respondents
lease contract with the late Bai Tonina Sepi, constituted tortuous
interference for which petitioner should be held liable for damages.
The Court, in the case of So Ping Bun v. Court of Appeals,[9] laid down
the elements of tortuous interference with contractual relations: (a)
existence of a valid contract; (b) knowledge on the part of the third person
of the existence of the contract and (c) interference of the third person
without legal justification or excuse. In that case, petitioner So Ping Bun
occupied the premises which the corporation of his grandfather was
leasing from private respondent, without the knowledge and permission
of the corporation. The corporation, prevented from using the premises
for its business, sued So Ping Bun for tortuous interference.
As regards the first element, the existence of a valid contract must
be duly established. To prove this, private respondent presented in court
a notarized copy of the purported lease renewal.[10] While the contract
appeared as duly notarized, the notarization thereof, however, only
proved its due execution and delivery but not the veracity of its contents.
Nonetheless, after undergoing the rigid scrutiny of petitioners counsel and
after the trial court declared it to be valid and subsisting, the notarized
copy of the lease contract presented in court appeared to be incontestable
proof that private respondent and the late Bai Tonina Sepi actually
renewed their lease contract. Settled is the rule that until overcome by
clear, strong and convincing evidence, a notarized document continues to
be prima facie evidence of the facts that gave rise to its execution and
delivery.[11]
The second element, on the other hand, requires that there be
knowledge on the part of the interferer that the contract exists.
Knowledge of the subsistence of the contract is an essential element to
state a cause of action for tortuous interference.[12] A defendant in such
a case cannot be made liable for interfering with a contract he is unaware
of.[13] While it is not necessary to prove actual knowledge, he must
nonetheless be aware of the facts which, if followed by a reasonable
inquiry, will lead to a complete disclosure of the contractual relations and
rights of the parties in the contract.[14]
In this case, petitioner claims that he had no knowledge of the lease
contract. His sellers (the heirs of Bai Tonina Sepi) likewise allegedly did
not inform him of any existing lease contract.
After a careful perusal of the records, we find the contention of
petitioner meritorious. He conducted his own personal investigation and
inquiry, and unearthed no suspicious circumstance that would have made
a cautious man probe deeper and watch out for any conflicting claim over
the property. An examination of the entire propertys title bore no
indication of the leasehold interest of private respondent. Even the
registry of property had no record of the same.[15]
Assuming ex gratia argumenti that petitioner knew of the contract,
such knowledge alone was not sufficient to make him liable for tortuous
interference. Which brings us to the third element. According to our ruling
in So Ping Bun, petitioner may be held liable only when there was no legal
justification or excuse for his action[16] or when his conduct was stirred by
a wrongful motive. To sustain a case for tortuous interference, the
defendant must have acted with malice[17] or must have been driven by
purely impious reasons to injure the plaintiff. In other words, his act of
interference cannot be justified.[18]
Furthermore, the records do not support the allegation of private
respondent that petitioner induced the heirs of Bai Tonina Sepi to sell the
property to him. The word induce refers to situations where a person
causes another to choose one course of conduct by persuasion or
intimidation.[19] The records show that the decision of the heirs of the late
Bai Tonina Sepi to sell the property was completely of their own volition
and that petitioner did absolutely nothing to influence their judgment.
Private respondent himself did not proffer any evidence to support his
claim. In short, even assuming that private respondent was able to prove
the renewal of his lease contract with Bai Tonina Sepi, the fact was that
he was unable to prove malice or bad faith on the part of petitioner in
purchasing the property. Therefore, the claim of tortuous interference was
never established.
In So Ping Bun, the Court discussed whether interference can be
justified at all if the interferer acts for the sole purpose of furthering a
personal financial interest, but without malice or bad faith. As the Court
explained it:
x x x, as a general rule, justification for interfering with the business
relations of another exists where the actors motive is to benefit himself.
Such justification does not exist where the actors motive is to cause
harm to the other. Added to this, some authorities believe that it is not
necessary that the interferers interest outweigh that of the party whose
rights are invaded, and that an individual acts under an economic
interest that is substantial, not merely de minimis, such that wrongful
and malicious motives are negatived, for he acts in self-protection.
Moreover, justification for protecting ones financial position should not
be made to depend on a comparison of his economic interest in the
subject matter with that of the others. It is sufficient if the impetus of
his conduct lies in a proper business interest rather than in wrongful
motives.[20]
The foregoing disquisition applies squarely to the case at bar. In our
view, petitioners purchase of the subject property was merely an
advancement of his financial or economic interests, absent any proof that
he was enthused by improper motives. In the very early case of Gilchrist
v. Cuddy,[21] the Court declared that a person is not a malicious interferer
if his conduct is impelled by a proper business interest. In other words, a
financial or profit motivation will not necessarily make a person an
officious interferer liable for damages as long as there is no malice or bad
faith involved.
In sum, we rule that, inasmuch as not all three elements to hold
petitioner liable for tortuous interference are present, petitioner cannot
be made to answer for private respondents losses.
This case is one of damnun absque injuria or damage without injury.
Injury is the legal invasion of a legal right while damage is the hurt, loss
or harm which results from the injury.[22] In BPI Express Card Corporation
v. Court of Appeals,,[23] the Court turned down the claim for damages of
a cardholder whose credit card had been cancelled by petitioner
corporation after several defaults in payment. We held there that there
can be damage without injury where the loss or harm is not the result of
a violation of a legal duty. In that instance, the consequences must be
borne by the injured person alone since the law affords no remedy for
damages resulting from an act which does not amount to legal injury or
wrong.[24] Indeed, lack of malice in the conduct complained of precludes
recovery of damages.[25]
With respect to the attorneys fees awarded by the appellate court to
private respondent, we rule that it cannot be recovered under the
circumstances. According to Article 2208 of the Civil Code, attorneys fees
may be awarded only when it has been stipulated upon or under the
instances provided therein.[26] Likewise, being in the concept of actual
damages, the award for attorneys fees must have clear, factual and legal
bases[27] which, in this case, do not exist.
Regarding the dismissal of petitioners counterclaim for actual and
moral damages, the appellate court affirmed the assailed order of the trial
court because it found no basis to grant the amount of damages prayed
for by petitioner. We find no reason to reverse the trial court and the
Court of Appeals. Actual damages are those awarded in satisfaction of, or
in recompense for, loss or injury sustained. To be recoverable, they must
not only be capable of proof but must actually be proved with a reasonable
degree of certainty.[28] Petitioner was unable to prove that he suffered LANDICHO and VINCENT D. May 4, 2010
loss or injury, hence, his claim for actual damages must fail. Moreover, TECSON,
petitioners prayer for moral damages was not warranted as moral Respondents.
damages should result from the wrongful act of a person. The worries and x-------------------------------------------------------------------------------
anxieties suffered by a party hailed to court litigation are not ----------x
compensable.[29]
DECISION
With the foregoing discussion, we no longer deem it necessary to
delve into the issue of laches. VILLARAMA, JR., J.:
WHEREFORE, premises considered, the petition is hereby
GRANTED. The assailed decision of the Court of Appeals is hereby
REVERSED and SET ASIDE. For review is the Decision[1] dated March 16, 2004 as modified by the

No costs. Resolution[2] dated July 22, 2004 of the Court of Appeals (CA) in CA-G.R.
CV No. 69113, which affirmed with modifications the
SO ORDERED.
Decision[3] dated May 31, 2000 of the Regional Trial Court (RTC)
ALLAN C. GO, doing business G.R. No. 164703
under the name and style ACG of Quezon City, Branch 85 in Civil Case No. 98-35332.
Express Liner,
Petitioner,
The factual antecedents:
- versus -

MORTIMER F. CORDERO, Sometime in 1996, Mortimer F. Cordero, Vice-President of Pamana

Respondent.
x------------------------------------ Marketing Corporation (Pamana), ventured into the business of marketing
-----x inter-island passenger vessels. After contacting various overseas fast

MORTIMER F. CORDERO,
Petitioner,
- versus -
ALLAN C. GO, doing business
underthe name and style
ACG Express Liner, FELIPE M.
G.R. No. 164747 ferry manufacturers from all over the world, he came to meet Tony
Robinson, an Australian national based in Brisbane, Australia, who is the
Present:
Managing Director of Aluminium Fast Ferries Australia (AFFA).
PUNO, C.J., Chairperson,
CARPIO MORALES,
LEONARDO-DE CASTRO, Between June and August 1997, Robinson signed documents appointing
BERSAMIN, and Cordero as the exclusive distributor of AFFA catamaran and other fast
VILLARAMA, JR., JJ.
ferry vessels in the Philippines.As such exclusive distributor, Cordero
Promulgated:
offered for sale to prospective buyers the 25-meter Aluminium Passenger
catamaran known as the SEACAT 25.[4]
After negotiations with Felipe Landicho and Vincent Tecson, lawyers of
Allan C. Go who is the owner/operator of ACG Express Liner of Cebu City,
a single proprietorship, Cordero was able to close a deal for the purchase
of two (2) SEACAT 25 as evidenced by the Memorandum of Agreement
dated August 7, 1997.[5] Accordingly, the parties executed Shipbuilding
Contract No. 7825 for one (1) high-speed catamaran (SEACAT 25) for the
price of US$1,465,512.00.[6] Per agreement between Robinson and
Cordero, the latter shall receive commissions totalling US$328,742.00, or
22.43% of the purchase price, from the sale of each vessel.[7]
Cordero made two (2) trips to the AFFA Shipyard in Brisbane, Australia,
and on one (1) occasion even accompanied Go and his family and
Landicho, to monitor the progress of the building of the vessel. He
shouldered all the expenses for airfare, food, hotel accommodations,
transportation and entertainment during these trips. He also spent for
long distance telephone calls to communicate regularly with Robinson,
Go, Tecson and Landicho.
However, Cordero later discovered that Go was dealing directly with
Robinson when he was informed by Dennis Padua of Wartsila Philippines
that Go was canvassing for a second catamaran engine from their
company which provided the ship engine for the first SEACAT
25. Padua told Cordero that Go instructed him to fax the requested
quotation of the second engine to the Park Royal Hotel in Brisbane where
Go was then staying. Cordero tried to contact Go and Landicho to confirm
the matter but they were nowhere to be found, while Robinson refused to
answer his calls. Cordero immediately flew to Brisbane to clarify matters
with Robinson, only to find out that Go and Landicho were already there
in Brisbane negotiating for the sale of the second SEACAT 25. Despite
repeated follow-up calls, no explanation was given by Robinson, Go,
Landicho and Tecson who even made Cordero believe there would be no
further sale between AFFA and ACG Express Liner.
In a handwritten letter dated June 24, 1998, Cordero informed Go that
such act of dealing directly with Robinson violated his exclusive
distributorship and demanded that they respect the same, without
prejudice to legal action against him and Robinson should they fail to heed
the same.[8] Corderos lawyer, Atty. Ernesto A. Tabujara, Jr. of ACCRA law
firm, also wrote ACG Express Liner assailing the fraudulent actuations and
misrepresentations committed by Go in connivance with his lawyers
(Landicho and Tecson) in breach of Corderos exclusive distributorship
appointment.[9]
Having been apprised of Corderos demand letter, Thyne & Macartney, the
lawyer of AFFA and Robinson, faxed a letter to ACCRA law firm asserting
that the appointment of Cordero as AFFAs distributor was for the purpose
of one (1) transaction only, that is, the purchase of a high-speed
catamaran vessel by ACG Express Liner in August 1997. The letter further
stated that Cordero was offered the exclusive distributorship, the terms
of which were contained in a draft agreement which Cordero allegedly
failed to return to AFFA within a reasonable time, and which offer is
already being revoked by AFFA.[10]
As to the response of Go, Landicho and Tecson to his demand letter,
Cordero testified before the trial court that on the same day, Landicho,
acting on behalf of Go, talked to him over the telephone and offered to
amicably settle their dispute. Tecson and Landicho offered to convince Go
to honor his exclusive distributorship with AFFA and to purchase all
vessels for ACG Express Liner through him for the next three (3) years. In
an effort to amicably settle the matter, Landicho, acting in behalf of Go,
set up a meeting with Cordero on June 29, 1998 between 9:30 p.m. to
10:30 p.m. at the Mactan Island Resort Hotel lobby. On said date,
however, only Landicho and Tecson came and no reason was given for
Gos absence. Tecson and Landicho proposed that they will convince Go to
pay him US$1,500,000.00 on the condition that they will get a cut of
20%. And so it was agreed between him, Landicho and Tecson that the
latter would give him a weekly status report and that the matter will be
settled in three (3) to four (4) weeks and neither party will file an action
against each other until a final report on the proposed settlement. No
such report was made by either Tecson or Landicho who, it turned out,
had no intention to do so and were just buying time as the catamaran
vessel was due to arrive from Australia. Cordero then filed a complaint
with the Bureau of Customs (BOC) to prohibit the entry of SEACAT 25
from Australia based on misdeclaration and
undervaluation. Consequently, an Alert Order was issued by Acting BOC
Commissioner Nelson Tan for the vessel which in fact arrived on July 17,
1998. Cordero claimed that Go and Robinson had conspired to undervalue
the vessel by around US$500,000.00.[11]
On August 21, 1998, Cordero instituted Civil Case No. 98-35332 seeking
to hold Robinson, Go, Tecson and Landicho liable jointly and solidarily for
conniving and conspiring together in violating his exclusive distributorship
in bad faith and wanton disregard of his rights, thus depriving him of his
due commissions (balance of unpaid commission from the sale of the first
vessel in the amount of US$31,522.01 and unpaid commission for the
sale of the second vessel in the amount of US$328,742.00) and causing
him actual, moral and exemplary damages, including P800,000.00
representing expenses for airplane travel to Australia,
telecommunications bills and entertainment, on account of AFFAs
untimely cancellation of the exclusive distributorship agreement. Cordero
also prayed for the award of moral and exemplary damages, as well as
attorneys fees and litigation expenses.[12]
Robinson filed a motion to dismiss grounded on lack of jurisdiction over
his person and failure to state a cause of action, asserting that there was
no act committed in violation of the distributorship agreement. Said
motion was denied by the trial court on December 20, 1999. Robinson
was likewise declared in default for failure to file his answer within the
period granted by the trial court.[13] As for Go and Tecson, their motion
to dismiss based on failure to state a cause of action was likewise denied
by the trial court on February 26, 1999.[14] Subsequently, they filed their
Answer denying that they have anything to do with the termination by
AFFA of Corderos authority as exclusive distributor in the Philippines. On
the contrary, they averred it was Cordero who stopped communicating
with Go in connection with the purchase of the first vessel from AFFA and
was not doing his part in making progress status reports and airing the
clients grievances to his principal, AFFA, such that Go engaged the
services of Landicho to fly to Australia and attend to the documents
needed for shipment of the vessel to the Philippines. As to the inquiry for
the Philippine price for a Wartsila ship engine for AFFAs other on-going
vessel construction, this was merely requested by Robinson but which
Cordero misinterpreted as indication that Go was buying a second
vessel. Moreover, Landicho and Tecson had no transaction whatsoever
with Cordero who had no document to show any such shipbuilding
contract. As to the supposed meeting to settle their dispute, this was due
to the malicious demand of Cordero to be given US$3,000,000 as
otherwise he will expose in the media the alleged undervaluation of the
vessel with the BOC. In any case, Cordero no longer had cause of action
for his commission for the sale of the second vessel under the
memorandum of agreement dated August 7, 1997 considering the
termination of his authority by AFFAs lawyers on June 26, 1998.[15]
Pre-trial was reset twice to afford the parties opportunity to reach a
settlement. However, on motion filed by Cordero through counsel, the
trial court reconsidered the resetting of the pre-trial to another date for
the third time as requested by Go, Tecson and Landicho, in view of the
latters failure to appear at the pre-trial conference on January 7, 2000
despite due notice. The trial court further confirmed that said defendants
misled the trial court in moving for continuance during the pre-trial
conference held on December 10, 1999, purportedly to go abroad for the
holiday season when in truth a Hold-Departure Order had been issued
against them.[16] Accordingly, plaintiff Cordero was allowed to present his
evidence ex parte.
Corderos testimony regarding his transaction with defendants Go,
Landicho and Tecson, and the latters offer of settlement, was
corroborated by his counsel who also took the witness stand. Further,
documentary evidence including photographs taken of the June 29, 1998
meeting with Landicho, Tecson and Atty. Tabujara at Shangri-las Mactan
Island Resort, photographs taken in Brisbane showing Cordero, Go with
his family, Robinson and Landicho, and also various documents,
communications, vouchers and bank transmittals were presented to prove
that: (1) Cordero was properly authorized and actually transacted in
behalf of AFFA as exclusive distributor in the Philippines; (2) Cordero
spent considerable sums of money in pursuance of the contract with Go
and ACG Express Liner; and (3) AFFA through Robinson paid Cordero his
commissions from each scheduled payment made by Go for the first
SEACAT 25 purchased from AFFA pursuant to Shipbuilding Contract No.
7825.[17]
On May 31, 2000, the trial court rendered its decision, the dispositive
portion of which reads as follows:
WHEREFORE, PREMISES CONSIDERED, judgment
is hereby rendered in favor of Plaintiff and against
defendants Allan C. Go, Tony Robinson, Felipe Landicho,
and Vincent Tecson.As prayed for, defendants are hereby
ordered to pay Plaintiff jointly and solidarily, the
following:
1. On the First Cause of Action, the sum total of
SIXTEEN MILLION TWO HUNDRED NINETY ONE
THOUSAND THREE HUNDRED FIFTY TWO AND
FORTY THREE CENTAVOS (P16,291,352.43) as
 actual damages with legal interest from 25 June
On August 18, 2000, the trial court denied the motion for reconsideration
1998 until fully paid;
and on August 21, 2000, the writ of execution pending appeal was
2. On the Second Cause of Action, the sum of ONE
issued.[23] Meanwhile, the notice of appeal was denied for failure to pay
MILLION PESOS (P1,000,000.00) as moral
damages; the appellate court docket fee within the prescribed period.[24] Defendants
filed a motion for reconsideration and to transmit the case records to the
3. On the Third Cause of Action, the sum of ONE
MILLION PESOS (P1,000,000.00) as exemplary CA.[25]
damages; and

4. On the Fourth Cause of Action, the sum of ONE On September 29, 2000, the CA issued a temporary restraining order at
MILLION PESOS (P1,000,000.00) as attorneys
fees; the instance of defendants in the certiorari case they filed with said court
docketed as CA-G.R. SP No. 60354 questioning the execution orders
Costs against the defendants.
issued by the trial court. Consequently, as requested by the defendants,
SO ORDERED.[18] the trial court recalled and set aside its November 6, 2000 Order granting
the ex-parte motion for release of garnished funds, cancelled the
scheduled public auction sale of levied real properties, and denied the ex-
Go, Robinson, Landicho and Tecson filed a motion for new trial, claiming
parte Motion for Break-Open Order and Ex-Parte Motion for Encashment
that they have been unduly prejudiced by the negligence of their counsel
of Check filed by Cordero.[26] On November 29, 2000, the trial court
who was allegedly unaware that the pre-trial conference on January 28,
reconsidered its Order dated August 21, 2000 denying due course to the
2000 did not push through for the reason that Cordero was then allowed
notice of appeal and forthwith directed the transmittal of the records to
to present his evidence ex-parte, as he had assumed that the said ex-
the CA.[27]
parte hearing was being conducted only against Robinson who was earlier
declared in default.[19] In its Order dated July 28, 2000, the trial court
denied the motion for new trial.[20] In the same order, Corderos motion On January 29, 2001, the CA rendered judgment granting the petition for

for execution pending appeal was granted. Defendants moved to certiorari in CA-G.R. SP No. 60354 and setting aside the trial courts orders

reconsider the said order insofar as it granted the motion for execution of execution pending appeal.Cordero appealed the said judgment in a

pending appeal.[21] On August 8, 2000, they filed a notice of appeal.[22] petition for review filed with this Court which was eventually denied under
our Decision dated September 17, 2002.[28]
 On March 16, 2004, the CA in CA-G.R. CV No. 69113 affirmed the
trial court (1) in allowing Cordero to present his evidence ex-parte after
the unjustified failure of appellants (Go, Tecson and Landicho) to appear
at the pre-trial conference despite due notice; (2) in finding that it was
Cordero and not Pamana who was appointed by AFFA as the exclusive
distributor in the Philippines of its SEACAT 25 and other fast ferry vessels,
which is not limited to the sale of one (1) such catamaran to Go on August
7, 1997; and (3) in finding that Cordero is entitled to a commission per
vessel sold for AFFA through his efforts in the amount equivalent to
22.43% of the price of each vessel or US$328,742.00, and with payments
of US$297,219.91 having been made to Cordero, there remained a
balance of US$31,522.09 still due to him. The CA sustained the trial court
in ruling that Cordero is entitled to damages for the breach of his exclusive
distributorship agreement with AFFA. However, it held that Cordero is
entitled only to commission for the sale of the first catamaran obtained
through his efforts with the remaining unpaid sum of US$31,522.09
or P1,355,449.90 (on the basis of US$1.00=P43.00 rate) with interest at
6% per annum from the time of the filing of the complaint until the same
is fully paid. As to the P800,000.00 representing expenses incurred by
Cordero for transportation, phone bills, entertainment, food and lodging,
the CA declared there was no basis for such award, the same being the
logical and necessary consequences of the exclusive distributorship
agreement which are normal in the field of sales and distribution, and the
expenditures having redounded to the benefit of the distributor (Cordero).
On the amounts awarded by the trial court as moral and
exemplary damages, as well as attorneys fees, the CA reduced the same
to P500,000.00, P300,000.00 and P50,000.00, respectively. Appellants
were held solidarily liable pursuant to the provisions of Article 1207 in
relation to Articles 19, 20, 21 and 22 of the New Civil Code. The CA further
ruled that no error was committed by the trial court in denying their
motion for new trial, which said court found to be pro forma and did not
raise any substantial matter as to warrant the conduct of another trial.
By Resolution dated July 22, 2004, the CA denied the motions for
reconsideration respectively filed by the appellants and appellee, and
affirmed the Decision dated March 16, 2004 with the sole modification
that the legal interest of 6% per annum shall start to run from June 24,
1998 until the finality of the decision, and the rate of 12% interest per
annum shall apply once the decision becomes final and executory until
the judgment has been satisfied.
The case before us is a consolidation of the petitions for review
under Rule 45 separately filed by Go (G.R. No. 164703) and Cordero (G.R.
No. 164747) in which petitioners raised the following arguments:
G.R. No. 164703
(Petitioner Go)
I. THE HONORABLE COURT OF APPEALS DISREGARDED
THE RULES OF COURT AND PERTINENT
JURISPRUDENCE AND ACTED WITH GRAVE ABUSE
OF DISCRETION IN NOT RULING THAT THE
RESPONDENT IS NOT THE REAL PARTY-IN-
INTEREST AND IN NOT DISMISSING THE INSTANT
CASE ON THE GROUND OF LACK OF CAUSE OF
ACTION;
 II. THE HONORABLE COURT OF APPEALS IGNORED THE
LAW AND JURISPRUDENCE AND ACTED WITH
GRAVE ABUSE OF DISCRETION IN HOLDING
HEREIN PETITIONER RESPONSIBLE FOR THE
BREACH IN THE ALLEGED EXCLUSIVE
DISTRIBUTORSHIP AGREEMENT WITH ALUMINIUM
FAST FERRIES AUSTRALIA;
III. THE HONORABLE APPELLATE COURT MISAPPLIED
THE LAW AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN FINDING PETITIONER LIABLE IN
SOLIDUMWITH THE CO-DEFENDANTS WITH
RESPECT TO THE CLAIMS OF RESPONDENT;
IV. THE HONORABLE COURT OF APPEALS MISAPPLIED
LAW AND JURISPRUDENCE AND GRAVELY ABUSED
ITS DISCRETION WHEN IT FOUND PETITIONER
LIABLE FOR UNPAID COMMISSIONS, DAMAGES,
ATTORNEYS FEES, AND LITIGATION EXPENSES;
and
V. THE HONORABLE APPELLATE COURT ACTED
CONTRARY TO LAW AND JURISPRUDENCE AND
GRAVELY ABUSED ITS DISCRETION WHEN IT
EFFECTIVELY DEPRIVED HEREIN PETITIONER OF
HIS RIGHT TO DUE PROCESS BY AFFIRMING THE
LOWER COURTS DENIAL OF PETITIONERS MOTION
FOR NEW TRIAL.[29]
G.R. No. 164747
(Petitioner Cordero)
I.
THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE
JUDGMENT OF THE TRIAL COURT AWARDING
PETITIONER ACTUAL DAMAGES FOR HIS COMMISSION
FOR THE SALE OF THE SECOND VESSEL, SINCE THERE IS
SUFFICIENT EVIDENCE ON RECORD WHICH PROVES
THAT THERE WAS A SECOND SALE OF A VESSEL.
A. THE MEMORANDUM OF AGREEMENT
DATED 7 AUGUST 1997 PROVIDES THAT
RESPONDENT GO WAS CONTRACTUALLY
BOUND TO BUY TWO (2) VESSELS FROM
AFFA.
B. RESPONDENT GOS POSITION PAPER AND
COUNTER-AFFIDAVIT/POSITION PAPER THAT
WERE FILED BEFORE THE BUREAU OF
CUSTOMS, ADMITS UNDER OATH THAT HE
HAD INDEED PURCHASED A SECOND VESSEL
FROM AFFA.
C. RESPONDENTS ADMITTED IN THEIR PRE-
TRIAL BRIEF THAT THEY HAD PURCHASED A
SECOND VESSEL.
II.
THE COURT OF APPEALS ERRED IN RULING THAT
PETITIONER IS NOT ENTITLED TO HIS COMMISSIONS
FOR THE PURCHASE OF A SECOND VESSEL, SINCE IT
WAS PETITIONERS EFFORTS WHICH ACTUALLY
FACILITATED AND SET-UP THE TRANSACTION FOR
RESPONDENTS.
III.
THE COURT OF APPEALS ERRED IN NOT IMPOSING THE
PROPER LEGAL INTEREST RATE ON RESPONDENTS
UNPAID OBLIGATION WHICH SHOULD BE TWELVE
PERCENT (12%) FROM THE TIME OF THE BREACH OF THE
OBLIGATION.
IV.
THE COURT OF APPEALS ERRED IN NOT SUSTAINING THE
ORIGINAL AMOUNT OF CONSEQUENTIAL DAMAGES
 AWARDED TO PETITIONER BY THE TRIAL COURT
On this issue, we agree with the CA in ruling that it was Cordero and not
CONSIDERING THE BAD FAITH AND FRAUDULENT
CONDUCT OF RESPONDENTS IN MISAPPROPRIATING THE Pamana who is the exclusive distributor of AFFA in the Philippines as
MONEY OF PETITIONER.[30]
shown by the Certification dated June 1, 1997 issued by Tony
Robinson.[33] Petitioner Go mentions the following documents also signed
The controversy boils down to two (2) main issues: (1) whether petitioner by respondent Robinson which state that Pamana Marketing Corporation
Cordero has the legal personality to sue the respondents for breach of represented by Mr. Mortimer F. Cordero was actually the exclusive
contract; and (2) whether the respondents may be held liable for distributor: (1) letter dated 1 June 1997 [34]; (2) certification dated 5
damages to Cordero for his unpaid commissions and termination of his August 1997[35]; and (3) letter dated 5 August 1997 addressed to
exclusive distributorship appointment by the principal, AFFA. petitioner Cordero concerning commissions to be paid to Pamana
Marketing Corporation.[36] Such apparent inconsistency in naming AFFAs
exclusive distributor in the Philippines is of no moment. For all intents and
I. Real Party-in-Interest
purposes, Robinson and AFFA dealt only with Cordero who alone made
decisions in the performance of the exclusive distributorship, as with other
First, on the issue of whether the case had been filed by the real party-
clients to whom he had similarly offered AFFAs fast ferry
in-interest as required by Section 2, Rule 3 of the Rules of Court, which
vessels. Moreover, the stipulated commissions from each progress
defines such party as the one (1) to be benefited or injured by the
payments made by Go were directly paid by Robinson to
judgment in the suit, or the party entitled to the avails of the suit. The
Cordero.[37] Respondents Landicho and Tecson were only too aware of
purposes of this provision are: 1) to prevent the prosecution of actions by
Corderos authority as the person who was appointed and acted as
persons without any right, title or interest in the case; 2) to require that
exclusive distributor of AFFA, which can be gleaned from their act of
the actual party entitled to legal relief be the one to prosecute the action;
immediately furnishing him with copies of bank transmittals everytime Go
3) to avoid a multiplicity of suits; and 4) to discourage litigation and keep
remits payment to Robinson, who in turn transfers a portion of funds
it within certain bounds, pursuant to sound public policy.[31] A case is
received to the bank account of Cordero in the Philippines as his
dismissible for lack of personality to sue upon proof that the plaintiff is
commission. Out of these partial payments of his commission, Cordero
not the real party-in-interest, hence grounded on failure to state a cause
would still give Landicho and Tecson their respective commission, or cuts
of action.[32]
from his own commission. Respondents Landicho and Tecson failed to
refute the evidence submitted by Cordero consisting of receipts signed by
them. Said amounts were apart from the earlier expenses shouldered by
Cordero for Landichos airline tickets, transportation, food and hotel
accommodations for the trip to Australia.[38]
Moreover, petitioner Go, Landicho and Tecson never raised petitioner
Corderos lack of personality to sue on behalf of Pamana, [39] and did so
only before the CA when they contended that it is Pamana and not
Cordero, who was appointed and acted as exclusive distributor for
AFFA.[40] It was Robinson who argued in support of his motion to dismiss
that as far as said defendant is concerned, the real party plaintiff appears
to be Pamana, against the real party defendant which is AFFA. [41] As
already mentioned, the trial court denied the motion to dismiss filed by
Robinson.
We find no error committed by the trial court in overruling
Robinsons objection over the improper resort to summons by publication
upon a foreign national like him and in an action in personam,
notwithstanding that he raised it in a special appearance specifically
raising the issue of lack of jurisdiction over his person. Courts acquire
jurisdiction over the plaintiffs upon the filing of the complaint, while
jurisdiction over the defendants in a civil case is acquired either through
the service of summons upon them in the manner required by
law or through their voluntary appearance in court and their submission
to its authority.[42] A party who makes a special appearance in court
challenging the jurisdiction of said court based on the ground of invalid
service of summons is not deemed to have submitted himself to the
jurisdiction of the court.[43]
In this case, however, although the Motion to Dismiss filed by
Robinson specifically stated as one (1) of the grounds the lack of personal
jurisdiction, it must be noted that he had earlier filed a Motion for Time
to file an appropriate responsive pleading even beyond the time provided
in the summons by publication.[44] Such motion did not state that it was
a conditional appearance entered to question the regularity of the service
of summons, but an appearance submitting to the jurisdiction of the court
by acknowledging the summons by publication issued by the court and
praying for additional time to file a responsive pleading. Consequently,
Robinson having acknowledged the summons by publication and also
having invoked the jurisdiction of the trial court to secure affirmative relief
in his motion for additional time, he effectively submitted voluntarily to
the trial courts jurisdiction. He is now estopped from asserting otherwise,
even before this Court.[45]
II. Breach of Exclusive Distributorship,
Contractual Interference and
Respondents Liability for Damages
In Yu v. Court of Appeals,[46] this Court ruled that the right to
perform an exclusive distributorship agreement and to reap the profits
resulting from such performance are proprietary rights which a party may
protect. Thus, injunction is the appropriate remedy to prevent a wrongful
interference with contracts by strangers to such contracts where the legal
remedy is insufficient and the resulting injury is irreparable. In that case,
the former dealer of the same goods purchased the merchandise from the
manufacturer in Englandthrough a trading firm in West Germany and sold
these in the Philippines. We held that the rights granted to the petitioner
under the exclusive distributorship agreement may not be diminished nor
rendered illusory by the expedient act of utilizing or interposing a person
or firm to obtain goods for which the exclusive distributorship was
conceptualized, at the expense of the sole authorized distributor.[47]
In the case at bar, it was established that petitioner Cordero was
not paid the balance of his commission by respondent Robinson. From the
time petitioner Go and respondent Landicho directly dealt with respondent
Robinson in Brisbane, and ceased communicating through petitioner
Cordero as the exclusive distributor of AFFA in the Philippines, Cordero
was no longer informed of payments remitted to AFFA in Brisbane. In
other words, Cordero had clearly been cut off from the transaction until
the arrival of the first SEACAT 25 which was sold through his
efforts. When Cordero complained to Go, Robinson, Landicho and Tecson
about their acts prejudicial to his rights and demanded that they respect
his exclusive distributorship, Go simply let his lawyers led by Landicho
and Tecson handle the matter and tried to settle it by promising to pay a
certain amount and to purchase high-speed catamarans through
Cordero. However, Cordero was not paid anything and worse, AFFA
through its lawyer in Australia even terminated his exclusive dealership
insisting that his services were engaged for only one (1) transaction, that
is, the purchase of the first SEACAT 25 in August 1997.
Petitioner Go argues that unlike in Yu v. Court of Appeals[48] there
is no conclusive proof adduced by petitioner Cordero that they actually
purchased a second SEACAT 25 directly from AFFA and hence there was
no violation of the exclusive distributorship agreement. Further, he
contends that the CA gravely abused its discretion in holding them
solidarily liable to Cordero, relying on Articles 1207, 19 and 21 of the Civil
Code despite absence of evidence, documentary or testimonial, showing
that they conspired to defeat the very purpose of the exclusive
distributorship agreement.[49]
We find that contrary to the claims of petitioner Cordero, there
was indeed no sufficient evidence that respondents actually purchased a
second SEACAT 25 directly from AFFA. But this circumstance will not
absolve respondents from liability for invading Corderos rights under the
exclusive distributorship. Respondents clearly acted in bad faith in
bypassing Cordero as they completed the remaining payments to AFFA
without advising him and furnishing him with copies of the bank
transmittals as they previously did, and directly dealt with AFFA through
Robinson regarding arrangements for the arrival of the first SEACAT 25 in
Manila and negotiations for the purchase of the second vessel pursuant
to the Memorandum of Agreement which Cordero signed in behalf of
AFFA. As a result of respondents actuations, Cordero incurred losses as
he was not paid the balance of his commission from the sale of the first
vessel and his exclusive distributorship revoked by AFFA.
Petitioner Go contends that the trial and appellate courts erred in
holding them solidarily liable for Corderos unpaid commission, which is
the sole obligation of the principal AFFA. It was Robinson on behalf of
AFFA who, in the letter dated August 5, 1997 addressed to Cordero,
undertook to pay commission payments to Pamana on a staggered
progress payment plan in the form of percentage of the commission per
payment. AFFA explicitly committed that it will, upon receipt of progress
payments, pay to Pamana their full commission by telegraphic transfer to
an account nominated by Pamana within one to two days of [AFFA]
receiving such payments.[50] Petitioner Go further maintains that he had
not in any way violated or caused the termination of the exclusive
distributorship agreement between Cordero and AFFA; he had also paid
in full the first and only vessel he purchased from AFFA.[51]
While it is true that a third person cannot possibly be sued for
breach of contract because only parties can breach contractual provisions,
a contracting party may sue a third person not for breach but for inducing
another to commit such breach.
Article 1314 of the Civil Code provides:
Art. 1314. Any third person who induces another
to violate his contract shall be liable for damages to the
other contracting party.
The elements of tort interference are: (1) existence of a valid contract;
(2) knowledge on the part of the third person of the existence of a
contract; and (3) interference of the third person is without legal
justification.[52]
The presence of the first and second elements is not disputed. Through
the letters issued by Robinson attesting that Cordero is the exclusive
distributor of AFFA in the Philippines, respondents were clearly aware of
the contract between Cordero and AFFA represented by Robinson. In fact,
evidence on record showed that respondents initially dealt with and
recognized Cordero as such exclusive dealer of AFFA high-speed
catamaran vessels in the Philippines. In that capacity as exclusive
distributor, petitioner Go entered into the Memorandum of Agreement and
Shipbuilding Contract No. 7825 with Cordero in behalf of AFFA.
As to the third element, our ruling in the case of So Ping Bun v.
Court of Appeals[53] is instructive, to wit:
A duty which the law of torts is concerned with is
respect for the property of others, and a cause of
action ex delicto may be predicated upon an unlawful
interference by one person of the enjoyment by the other
of his private property. This may pertain to a situation
where a third person induces a party to renege on or
violate his undertaking under a contract. In the case
before us, petitioners Trendsetter Marketing asked DCCSI
to execute lease contracts in its favor, and as a result
petitioner deprived respondent corporation of the latters
property right. Clearly, and as correctly viewed by the
appellate court, the three elements of tort interference
above-mentioned are present in the instant case.
Authorities debate on whether interference may be
justified where the defendant acts for the sole purpose of
furthering his own financial or economic interest. One
view is that, as a general rule, justification for interfering
with the business relations of another exists where the
actors motive is to benefit himself. Such justification does
not exist where his sole motive is to cause harm to the
other. Added to this, some authorities believe that it is
not necessary that the interferers interest outweigh that
of the party whose rights are invaded, and that an
individual acts under an economic interest that is
substantial, not merely de minimis, such that wrongful
and malicious motives are negatived, for he acts in self-
protection. Moreover, justification for protecting ones
financial position should not be made to depend on a
comparison of his economic interest in the subject matter
with that of others. It is sufficient if the impetus of his
conduct lies in a proper business interest rather than in
wrongful motives.
As early as Gilchrist vs. Cuddy, we held that
where there was no malice in the interference of a
contract, and the impulse behind ones conduct lies
in a proper business interest rather than in
wrongful motives, a party cannot be a malicious
interferer. Where the alleged interferer is financially
interested, and such interest motivates his conduct, it
cannot be said that he is an officious or malicious
intermeddler.
In the instant case, it is clear that petitioner
So Ping Bun prevailed upon DCCSI to lease the
warehouse to his enterprise at the expense of respondent
corporation. Though petitioner took interest in the
property of respondent corporation and benefited
from it, nothing on record imputes deliberate
wrongful motives or malice in him.
xxx
While we do not encourage tort interferers seeking
their economic interest to intrude into existing contracts
at the expense of others, however, we find that the
conduct herein complained of did not transcend the limits
forbidding an obligatory award for damages in the
absence of any malice. The business desire is there to
make some gain to the detriment of the contracting
parties. Lack of malice, however, precludes
damages. But it does not relieve petitioner of the
legal liability for entering into contracts and
causing breach of existing ones. The respondent
appellate court correctly confirmed the permanent
injunction and nullification of the lease contracts between
DCCSI and Trendsetter Marketing, without awarding
damages. The injunction saved the respondents from
further damage or injury caused by petitioners
interference.[54] [EMPHASIS SUPPLIED.]
Malice connotes ill will or spite, and speaks not in response to
duty. It implies an intention to do ulterior and unjustifiable harm. Malice
is bad faith or bad motive.[55] In the case of Lagon v. Court
of Appeals,[56] we held that to sustain a case for tortuous interference,
the defendant must have acted with malice or must have been driven by
purely impure reasons to injure the plaintiff; in other words, his act of
interference cannot be justified. We further explained that the word
induce refers to situations where a person causes another to choose one
course of conduct by persuasion or intimidation. As to the allegation of
private respondent in said case that petitioner induced the heirs of the
late Bai Tonina Sepi to sell the property to petitioner despite an alleged
renewal of the original lease contract with the deceased landowner, we
ruled as follows:
Assuming ex gratia argumenti that petitioner knew
of the contract, such knowledge alone was not sufficient
to make him liable for tortuous interference. x x x
Furthermore, the records do not support the
allegation of private respondent that
petitioner induced the heirs of Bai Tonina Sepi to sell the
property to him. The word induce refers to situations
where a person causes another to choose one course of
conduct by persuasion or intimidation. The records show
that the decision of the heirs of the late Bai Tonina Sepi
to sell the property was completely of their own volition
and that petitioner did absolutely nothing to influence
 their judgment. Private respondent himself did not proffer
As to the cessation of communication with Cordero, Go averred it was
any evidence to support his claim. In short, even
assuming that private respondent was able to prove the Cordero who was nowhere to be contacted at the time the shipbuilding
renewal of his lease contract with Bai Tonina Sepi, the
progress did not turn good as promised, and it was always Landicho and
fact was that he was unable to prove malice or bad faith
on the part of petitioner in purchasing the Tecson who, after several attempts, were able to locate him only to
property. Therefore, the claim of tortuous interference
obtain unsatisfactory reports such that it was Go who would still call up
was never established.[57]
Robinson regarding any progress status report, lacking documents for
In their Answer, respondents denied having anything to do with the
MARINA, etc., and go to Australia for ocular inspection. Hence, in May
unpaid balance of the commission due to Cordero and the eventual
1998 on the scheduled launching of the ship in Australia, Go engaged
termination of his exclusive distributorship by AFFA. They gave a
the services of Landicho who went to Australia to see to it that all
different version of the events that transpired following the signing of
documents needed for the shipment of the vessel to the Philippines would
Shipbuilding Contract No. 7825. According to them, several builder-
be in order. It was also during this time that Robinsons request for
competitors still entered the picture after the said contract for the
inquiry on the Philippine price of a Wartsila engine for AFFAs then on-
purchase of one (1) SEACAT 25 was sent to Brisbane in July 1997 for
going vessel construction, was misinterpreted by Cordero as indicating
authentication, adding that the contract was to be effective on August 7,
that Go was buying a second vessel.[59]
1997, the time when their funds was to become available. Go admitted he
called the attention of AFFA if it can compete with the prices of other
builders, and upon mutual agreement, AFFA agreed to give them a We find these allegations unconvincing and a mere afterthought as these

discounted price under the following terms and conditions: (1) that the were the very same averments contained in the Position Paper for the

contract price be lowered; (2) that Go will obtain another vessel; (3) that Importer dated October 9, 1998, which was submitted by Go on behalf

to secure compliance of such conditions, Go must make an advance of ACG Express Liner in connection with the complaint-affidavit filed by

payment for the building of the second vessel; and (4) that the payment Cordero before the BOC-SGS Appeals Committee relative to the

scheme formerly agreed upon as stipulated in the first contract shall still shipment valuation of the first SEACAT 25 purchased from AFFA.[60] It

be the basis and used as the guiding factor in remitting money for the appears that the purported second contract superseding the original

building of the first vessel. This led to the signing of another contract Shipbuilding Contract No. 7825 and stating a lower price of

superseding the first one (1), still to be dated 07 August 1997. Attached US$1,150,000.00 (not US$1,465,512.00) was only presented before the

to the answer were photocopies of the second contract stating a lower BOC to show that the vessel imported into the Philippines was not

purchase price (US$1,150,000.00) and facsimile transmission of AFFA to undervalued by almost US$500,000.00. Cordero vehemently denied

Go confirming the transaction.[58] there was such modification of the contract and accused respondents of
resorting to falsified documents, including the facsimile transmission of interest rather than in wrongful motives. The attendant circumstances,
AFFA supposedly confirming the said sale for only however, demonstrated that respondents transgressed the bounds of
US$1,150,000.00. Incidentally, another document filed in said BOC case, permissible financial interest to benefit themselves at the expense of
the Counter-Affidavit/Position Paper for the Importer dated November Cordero. Respondents furtively went directly to Robinson after Cordero
16, 1998,[61] states in paragraph 8 under the Antecedent facts thereof, had worked hard to close the deal for them to purchase from AFFA two
that -- (2) SEACAT 25, closely monitored the progress of building the first vessel
sold, attended to their concerns and spent no measly sum for the trip to
8. As elsewhere stated, the total remittances
made by herein Importer to AFFA does Australia with Go, Landicho and Gos family members. But what is
not alone represent the purchase price
appalling is the fact that even as Go, Landicho and Tecson secretly
for Seacat 25. It includes advance
payment for the acquisition of negotiated with Robinson for the purchase of a second vessel, Landicho
another vessel as part of the deal
and Tecson continued to demand and receive from Cordero their
due to the discounted price.[62]
commission or cut from Corderos earned commission from the sale of
the first SEACAT 25.
which even gives credence to the claim of Cordero that respondents
negotiated for the sale of the second vessel and that the nonpayment of
Cordero was practically excluded from the transaction when Go,
the remaining two (2) instalments of his commission for the sale of the
Robinson, Tecson and Landicho suddenly ceased communicating with
first SEACAT 25 was a result of Go and Landichos directly dealing with
him, without giving him any explanation. While there was nothing
Robinson, obviously to obtain a lower price for the second vessel at the
objectionable in negotiating for a lower price in the second purchase of
expense of Cordero.
SEACAT 25, which is not prohibited by the Memorandum of Agreement,
Go, Robinson, Tecson and Landicho clearly connived not only in ensuring
The act of Go, Landicho and Tecson in inducing Robinson and
that Cordero would have no participation in the contract for sale of the
AFFA to enter into another contract directly with ACG Express Liner to
second SEACAT 25, but also that Cordero would not be paid the balance
obtain a lower price for the second vessel resulted in AFFAs breach of its
of his commission from the sale of the first SEACAT 25. This, despite
contractual obligation to pay in full the commission due to Cordero and
their knowledge that it was commission already earned by and due to
unceremonious termination of Corderos appointment as exclusive
Cordero. Thus, the trial and appellate courts correctly ruled that the
distributor. Following our pronouncement in Gilchrist v. Cuddy (supra),
actuations of Go, Robinson, Tecson and Landicho were without legal
such act may not be deemed malicious if impelled by a proper business
justification and intended solely to prejudice Cordero.

The existence of malice, ill will or bad faith is a factual matter.
As a rule, findings of fact of the trial court, when affirmed by the
appellate court, are conclusive on this Court.[63] We see no compelling
reason to reverse the findings of the RTC and the CA that respondents
acted in bad faith and in utter disregard of the rights of Cordero under
the exclusive distributorship agreement.
The failure of Robinson, Go, Tecson and Landico to act with
fairness, honesty and good faith in securing better terms for the
purchase of high-speed catamarans from AFFA, to the prejudice of
Cordero as the duly appointed exclusive distributor, is further proscribed
by Article 19 of the Civil Code:
Art. 19. Every person must, in the exercise of his
rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and
good faith.
As we have expounded in another case:
Elsewhere, we explained that when a right is exercised in
a manner which does not conform with the norms
enshrined in Article 19 and results in damage to another,
a legal wrong is thereby committed for which the
wrongdoer must be responsible. The object of this article,
therefore, is to set certain standards which must be
observed not only in the exercise of ones rights but also
in the performance of ones duties. These standards are
the following: act with justice, give everyone his due and
observe honesty and good faith. Its antithesis,
necessarily, is any act evincing bad faith or intent to
injure. Its elements are the following: (1) There is a
legal right or duty; (2) which is exercised in bad faith; (3)
for the sole intent of prejudicing or injuring
another. When Article 19 is violated, an action for
damages is proper under Articles 20 or 21 of the Civil
Code. Article 20 pertains to damages arising from a
violation of law x x x. Article 21, on the other hand,
states:
Art. 21. Any person who willfully causes
loss or injury to another in a manner that is
contrary to morals, good customs or public
policy shall compensate the latter for the
damage.
Article 21 refers to acts contra bonus mores and has the
following elements: (1) There is an act which is legal; (2)
but which is contrary to morals, good custom, public
order, or public policy; and (3) it is done with intent to
injure.
A common theme runs through Articles 19 and 21,
and that is, the act complained of must be intentional.[64]
Petitioner Gos argument that he, Landicho and Tecson cannot be
held liable solidarily with Robinson for actual, moral and exemplary
damages, as well as attorneys fees awarded to Cordero since no law or
contract provided for solidary obligation in these cases, is equally bereft
of merit. Conformably with Article 2194 of the Civil Code, the
responsibility of two or more persons who are liable for the quasi-delict is
solidary.[65] In Lafarge Cement Philippines, Inc. v. Continental Cement
Corporation,[66] we held:
[O]bligations arising from tort are, by their
nature, always solidary. We have assiduously
maintained this legal principle as early as 1912
in Worcester v. Ocampo, in which we held:
 x x x The difficulty in the contention
of the appellants is that they fail to
recognize that the basis of the present
action is tort. They fail to recognize the
universal doctrine that each joint tort feasor
is not only individually liable for the tort in
which he participates, but is also jointly
liable with his tort feasors. x x x
It may be stated as a general rule
that joint tort feasors are all the persons
who command, instigate, promote,
encourage, advise, countenance, cooperate
in, aid or abet the commission of a tort, or
who approve of it after it is done, if done for
their benefit. They are each liable as
principals, to the same extent and in
the same manner as if they had
performed the wrongful act
themselves. x x x
Joint tort feasors are jointly and
severally liable for the tort which they
commit. The persons injured may sue all of
them or any number less than all. Each is
liable for the whole damages caused by all,
and all together are jointly liable for the
whole damage. It is no defense for one
sued alone, that the others who
participated in the wrongful act are not
joined with him as defendants; nor is it any
excuse for him that his participation in the
tort was insignificant as compared to that
of the others. x x x
Joint tort feasors are not liable pro
rata. The damages can not be apportioned
among them, except among
themselves. They cannot insist upon an
apportionment, for the purpose of each
paying an aliquot part. They are jointly and
severally liable for the whole amount. x x x
A payment in full for the damage
done, by one of the joint tort feasors, of
course satisfies any claim which might exist
against the others. There can be but
satisfaction. The release of one of the joint
tort feasors by agreement generally
operates to discharge all. x x x
Of course, the court during trial may
find that some of the alleged tort feasors
are liable and that others are not liable. The
courts may release some for lack of
evidence while condemning others of the
alleged tort feasors. And this is true even
though they are charged jointly and
severally.[67] [EMPHASIS SUPPLIED.]
The rule is that the defendant found guilty of interference with
contractual relations cannot be held liable for more than the amount for
which the party who was inducted to break the contract can be held
liable.[68] Respondents Go, Landicho and Tecson were therefore correctly
held liable for the balance of petitioner Corderos commission from the
sale of the first SEACAT 25, in the amount of US$31,522.09 or its peso
equivalent, which AFFA/Robinson did not pay in violation of the exclusive
distributorship agreement, with interest at the rate of 6% per annum
from June 24, 1998 until the same is fully paid.
Respondents having acted in bad faith, moral damages may be
recovered under Article 2219 of the Civil Code.[69] On the other hand,
the requirements of an award of exemplary damages are: (1) they may
be imposed by way of example in addition to compensatory damages, may also be awarded in consonance with Article 2208 (1).[72] We affirm
and only after the claimants right to them has been established; (2) that the appellate courts award of attorneys fees in the amount
they cannot be recovered as a matter of right, their determination of P50,000.00.
depending upon the amount of compensatory damages that may be
awarded to the claimant; and (3) the act must be accompanied by bad WHEREFORE, the petitions are DENIED. The Decision dated
faith or done in a wanton, fraudulent, oppressive or malevolent March 16, 2004 as modified by the Resolution dated July 22, 2004 of the
[70]
manner. The award of exemplary damages is thus in order. However, Court of Appeals in CA-G.R. CV No. 69113 are
we find the sums awarded by the trial court as moral and exemplary hereby AFFIRMED with MODIFICATION in that the awards of moral
damages as reduced by the CA, still excessive under the circumstances. and exemplary damages are hereby reduced to P300,000.00
and P200,000.00, respectively.
Moral damages are meant to compensate and alleviate the
physical suffering, mental anguish, fright, serious anxiety, besmirched With costs against the petitioner in G.R. No. 164703.
reputation, wounded feelings, moral shock, social humiliation, and similar
injuries unjustly caused. Although incapable of pecuniary estimation, the SO ORDERED.
amount must somehow be proportional to and in approximation of the
suffering inflicted. Moral damages are not punitive in nature and were
never intended to enrich the claimant at the expense of the
defendant. There is no hard-and-fast rule in determining what would be
a fair and reasonable amount of moral damages, since each case must be
governed by its own peculiar facts. Trial courts are given discretion in
determining the amount, with the limitation that it should not be palpably
and scandalously excessive. Indeed, it must be commensurate to the loss
or injury suffered.[71]

We believe that the amounts of P300,000.00 and P200,000.00

as moral and exemplary damages, respectively, would be sufficient and
reasonable. Because exemplary damages are awarded, attorneys fees