G.R. No.

171303 January 20, 2016
ELIZABETH L. DIAZ, Petitioner, vs. GEORGINA R. EN CANTO, ERNESTO
G. TABUJARA, GEMINO H. ABAD and UNIVERSITY OF THE
PHILIPPINES, Respondents.
DECISION
LEONARDO-DE CASTRO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of
Court, as amended, which seeks to reverse and set aside the April 28, 2005
Decision1 and January 20, 2006 Resolution2 of the Court of Appeals in CA-
G.R. CV No. 55165,3 which reversed the April 17, 1996 Decision4 and
September 1 7, 1996 Order5 of the Regional Trial Court (RTC), Branch 71,
Pasig City, in Civil Case No. 58397.
The undisputed facts as narrated by the Court of Appeals are as follows:
sabbatical application has not yet been approved and that she did not teach
that semester. Consequently, Diaz's name was deleted in the payroll from
September 1988 to January 1989.
On July 4, 1988, Tabujara recommended instead that Diaz be granted a leave
without pay in order to enable the CMC to hire a substitute. The next day, the
U.P.'s Secretary referred to Abad, VicePresident (VP) for Academic Affairs,
the fact of denial of such sabbatical request, for his own
comment/recommendation to the U.P. President. Meantime, Diaz confessed
her problems to Abad. On July 8, 1988, Abad returned the Reference Slip
indicating therein that Diaz had promised him earlier "to put down in writing,
from her point of view, the historical backdrop as it were to the latest denial of
her sabbatical leave." With comments, Abad then referred the matter to the U
.P. President.
Pursuant to Administrative Order No. 42 issued by the U.P. President, the
Academic Policy Coordinating Committee (APCC), on July 21, 1988, reviewed
the case of Diaz. When reminded by Abad, Diaz again promised to give the
background information.

Plaintiff-appellant [Elizabeth L. Diaz] has been in the service of [the University
of the Philippines] U.P. since 1963. In 1987, she was an associate professor
in the College of Mass Communication (CMC). During the second semester
for Academic Year (A Y) 1987-1988, she was a full time member of the faculty
and taught 12 units on full load. After 2 to 3 weeks of teaching, she applied for
sick leave effective November 23, 1987 until March 1, 1988. She returned on
March 2, 1988 and submitted a Report for Duty Form.
On May 3, 1988, Diaz filed a letter-application directly with U.P.'s "Office of the
President (Abueva) for sabbatical leave with pay for one (1) year effective June
1988 to May 1989, for "rest, renewal and study." Cecilia Lazaro, Chair of the
Broadcast Department, initially recommended to CMC Dean Encanto that
Diaz's sabbatical application be granted. After they discussed the options
available to the CMC, Lazaro, on May 10, 1988, recommended instead that
Diaz be granted any leave of absence she may be qualified for. In her May 2,
1988 letter, Diaz indicated her unwillingness to teach. Considering the CMC's
experience with Diaz who dropped her courses in the previous semester,
Lazaro deleted Diaz's name in the final schedule of classes for the 1st
semester of A Y 1988-89 beginning June 6, 1988. Incidentally, Diaz received
her salary for June 1988, indicating that her sabbatical might be approved.
Thereafter, Encanto referred Diaz's sabbatical application to the Secretary of
U.P., recommending its denial. When requested by (Chancellor) Tabujara,
Encanto transmitted to the former a Reference Slip together with her
comments thereon. Meanwhile, Encanto requested Ermelina Kalagayan to
hold Diaz's salary effective July 1, 1988 until further notice considering that her
On Diaz's request to teach for that semester, AY 1988-89, the Vice Chancellor
for Academic Affairs, Edgardo Pacheco, and the HRDO Director, Atty. Pio
Frago, instructed Encanto that "Until Prof. Diaz officially reports for duty,
accomplishes the Certificate of Report for Duty, and the Dean of CMC confirms
her date of actual report for duty, she is considered absent without official leave
(AWOL) for the University."
On November 8, 1988, Abad, then as OIC, issued a Memorandum to Diaz to
confirm as valid Encanto' s reason of shortage of teaching staff in denying her
sabbatical. Later, he also informed Diaz of her lack of service during the first
semester of A Y 1988-89, hence, she is not entitled to be paid and asked her
to clarify her status of being on leave without pay.
[While Diaz was able to teach during the second semester of AY 1988-89, she
was not able to claim her salaries for her refusal to submit the Report for Duty
Form.6 She received her salaries for June to July 15, 1989, but could no longer
claim her salary after July 15, 1989, when Encanto reminded the University
Cashier, in a letter dated July 26, 1989,7 that Diaz had to "accomplish the
Report for Duty Form to entitle her to salaries and make official her return to
the service of the University."8 Diaz's name was subsequently included in the
payroll starting July 1990, when she submitted a Report for Duty after her
return from compulsory summer leave.9]
xxxx
In the meantime, on January 3, 1989, Diaz filed a complaint with the Office of
the Ombudsman (OMB-00-89-0049), against Gemino H. Abad, Ernesto G.
Tabujara and Georgina R. Encanto, all officials of the University of the
Philippines, for the alleged violation of Section 3(e) of R.A. 3019, involving the
legality of a Report for Duty Form as a prerequisite to the payment of her
salary.
On May 4, 1989, the Ombudsman dismissed the said complaint and ruled,
inter alia:
Considering that Prof. Diaz was rightfully considered on leave without pay
during the first semester of A Y 1988-1989, to make official her return to the
service of the University, it is advised that she accomplish the Report for Duty
Form which will then be the basis to establish the date of her actual return to
the service. However, if possible, the University authorities can perhaps
dispense with the requirement and pay her salaries for actual services
rendered from November 3, 1988.
Diaz's initial Petition for Certiorari in the Supreme Court (G.R. No. 88834)
assailing the above-quoted Ombudsman's ruling was subsequently dismissed.
She filed another Petition (G.R. No. 89207) raising exactly the same issued
found in G.R. No. 88834.
Meanwhile, on July 18, 1989, Diaz instituted a complaint against the U.P.,
Abueva, Encanto, Tabujara and Abad with the Regional Trial Court, Pasig,
Metro Manila praying that the latter be adjudged, jointly and severally to pay
her damages. She claimed, among others, that [respondents] conspired
together as joint tortfeasors, in not paying her salaries from July 1, 1988 in the
first semester of academic year 1988-89, for the entire period when her
sabbatical application was left unresolved, as well as the salaries she earned
from teaching in the second semester from November 1988 to May 1989. She
likewise claimed moral and exemplary damages and attorney's fees.
On August 31, 1989, the Supreme Court En Banc dismissed Diaz's Petition in
G.R. No. 89207, viz.:
It is noted that the Ombudsman found no manifest partiality, evident bad faith,
or gross inexcusable negligence on the part of the private respondents in
denying the application for sabbatical leave of petitioner (Diaz) and in requiring
her to fill up a Report for Duty Form as a requisite for her entitlement to salary.
To the petitioner's contentions, the Ombudsman observed, among others, the
following: that, the denial of her sabbatical leave application was due to the
exigencies of the service; that petitioner was not given a teaching assignment
for the first semester of A Y 1988-1989, because she did not want to teach
then; that the delay in action on her leave application was due to petitioner's
own fault for not following the usual procedures in the processing of her
application; and that there is no malice on the part of the private respondents
in requiring petitioner to accomplish the Report for Duty Form which is the
basis of the date of her actual return to the service.10 (Citations omitted.)
In a Decision dated April 1 7, 1996, the R TC ruled in favor of petitioner Diaz,
the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendants:
1. Ordering defendants, except Abueva, to pay plaintiff, jointly and
severally, the amount of P133,665.50 representing the total unpaid
salaries from July 1, 1988 to May 31, 1989 and from July 16, 1989 to
May 31, 1990 to be covered by corresponding certificate of service,
with legal rate of interest from the date of this Decision until its full
payment.
2. Ordering defendants, except the University and Abueva, to pay
plaintiff, jointly and severally, the amount of P300,000.00 as moral
damages.
3. Ordering defendants, except the University and Abueva, to pay
plaintiff, jointly and severally, the amount of P60,000.00 as exemplary
damages.
4. Ordering defendants, except the University and Abueva, to pay
plaintiff, jointly and severally, the reduced amount of PS0,000.00 as
and by way of attorney's fees.
5. Costs of suit.
The counterclaims filed by defendant Tabujara are DISMISSED.11
The RTC, ruling that a sabbatical leave is not a right but a privilege, held that
petitioner Diaz was entitled to such privilege and found that the delay in
the_resolution of her application was unreasonable and unconscionable.
However, on September 17, 1996, the RTC, in denying the Motions for
Reconsideration of the respondents in said case, also amended its earlier
decision by absolving respondent Encanto from any liability, to wit:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendants:
1. Ordering defendants, except Abueva and Encanto, to pay plaintiff,
jointly and severally, the amount of P133,665.50 representing the total
unpaid salaries from July 1, 1988 to May 31, 1989 and from July 16,
1989 to May 31, 1990 to be covered by corresponding certificate of
service, with legal rate of interest from the date of this Decision until
its full payment.
2. Ordering defendants, except the University, Abueva and Encanto,
to pay plaintiff, jointly and severally, the amount of P300,000.00 as
moral damages.
3. Ordering defendants, except the University, Abueva and Encanto,
to pay plaintiff, jointly and severally, the amount of P60,000.00 as
exemplary damages.
4. Ordering defendants, except University, Abueva and Encanto, to
pay plaintiff, jointly and severally, the reduced amount of P50,000.00
as and by way of attorney's fees.
5. Costs of suit.
The counterclaims filed by defendant Tabujara are DISMISSED.12
The RTC dismissed the claim of petitioner Diaz against respondent Encanto
on the ground that her function was purely recommendatory in nature. It held
that she was not instrumental in the unreasonable and unconscionable delay
in the resolution of petitioner Diaz's sabbatical application as she transmitted
her recommendation to Abueva within eighteen days from her receipt of such
application.13
Petitioner Diaz14 and respondents Tabujara,15 U.P., Abad16 and even
Encanto17 appealed the RTC's ruling to the Court of Appeals.
As respondent Encanto was absolved of liability by the R TC in its September
1 7, 1996 Order, the Court of Appeals admitted her Brief,18 as an incorporation
to the other respondents' Brief,19 and as a comment on petitioner Diaz's
appeal.20
The respondents mainly argued that the R TC erred in holding them liable for
damages despite the absence of bad faith on their part, as held by both the
Ombudsman in OMB-00-89-0049 and the Supreme Court in G.R. No. 89207.
Petitioner Diaz, on the other hand, questioned the reversal of the R TC ruling
only with respect to the liability of respondent Encanto, in a lone assignment
of error, viz.:
THE LOWER COURT GRAVELY ERRED IN REVERSING ITS ORIGINAL
DECISION WITH REGARD TO PRINCIPAL DEFENDANT GEORGINA R.
ENCANTO BY ABSOLVING HER OF LIABILITY FOR DAMAGES TO
PLAINTIFF-APPELLANT ELIZABETH L. DIAZ WITHOUT ALTERING IN
ANY MATERIAL RESPECT WHATSOEVER THE FINDINGS OF FACT IN
THE ORIGINAL DECISION SHOWING CLEARLY THE RESPONSIBILITY
OF DEFENDANT ENCANTO FOR (I) THE WRONGFUL DISAPPROVAL OF
PLAINTIFF'S SABBATICAL APPLICATION; (II) THE UNJUST
DEPRIVATION OF SALARIES DUE THE PLAINTIFF FOR ALMOST ONE
WHOLE SEMESTER DURING WHICH HER SABBATICAL APPLICATION
REMAINED UNRESOLVED; AND (III) THE WRONGFUL WITHHOLDING OF
PLAINTIFF'S EARNED SALARIES IN THE THREE SUCCEEDING
SEMESTERS DURING WHICH THE PLAINTIFF TAUGHT WITHOUT BEING
PAID.21
Ruling of the Court of Appeals
The Court of Appeals trimmed down the issue to whether or not respondents
U.P., Tabujara and Abad were negligent or acted in bad faith in denying
petitioner Diaz's application for sabbatical leave and in withholding her
salaries. In its Decision promulgated on April 28, 2005, it effectively reversed
the decision of the R TC, viz.:
WHEREFORE, the appealed Decision is REVERSED and SET ASIDE and
a NEW JUDGMENT is RENDERED, as follows: (1) defendant-appellant
University of the Philippines, through its appropriate officials, is DIRECTED to
pay plaintiff-appellant Elizabeth Diaz the sum of Twenty-One Thousand, Eight
Hundred Seventy-Nine and 64/100 (P21,879.64) as unpaid salaries and
allowances, and (2) the sums awarded as moral and exemplary damages and
attorney's fees are hereby DELETED. This is without prejudice to the
enforcement of valid rules and regulations of the University of the Philippines
pertaining to Diaz's employment status.22
The Court of Appeals found neither negligence nor bad faith on the part of the
respondents in their denial of petitioner Diaz's sabbatical leave application and
in withholding her salaries.
The Court of Appeals emphasized that a sabbatical leave is not a right which
could be demanded at will, even by petitioner Diaz who has been a veteran
professor of 24 years at U.P. Moreover, the Court of Appeals said that the
eventual denial of her sabbatical leave application was not actionable in view
of the fact that (i) it would be unfair to impute negligence to respondents in the
regular discharge of their functions; and (ii) assuming that there was delay in
the resolution of her application, she herself caused such delay.23
The Court of Appeals also held that petitioner Diaz's own recalcitrance and
defiance to comply with certain documentary requirements was the reason her
salaries were withheld.24
Petitioner Diaz filed a Motion for Reconsideration to the aforementioned
decision, which was subsequently denied for lack of merit in a Resolution
dated January 20, 2006.
Issues
Undaunted, petitioner Diaz is again before this Court, with the following
Assignments of Error:
FIRST ASSIGNMENT OF ERROR
WITHOUT DISTURBING THE FINDINGS OF FACT OF. THE TRIAL COURT
BASED ON OVERWHELMING EVIDENCE REVEALING THE COMMISSION
BY RESPONDENTS OF THE TORTIOUS ACTS COMPLAINED OF BY
PETITIONER IN DENYING HER SABBATICAL LEA VE, THE COURT OF
APPEALS GRIEVOUSLY ERRED IN IGNORING THOSE FINDINGS AND
ADOPTING AND TREATING AS VALID THE FLIMSY EXCUSES OF
RESPONDENTS TO A VOID THE LEGAL CONSEQUENCES OF THEIR
ACTS.
SECOND ASSIGNMENT OF ERROR
THE COURT OF APPEALS ERRED IN HOLDING CONTRARY TO THE
EVIDENCE ON RECORD, THAT "THERE WAS JUDICIOUS EXERCISE" BY
RESPONDENTS "OF THEIR DISCRETIONARY POWER WITH RESPECT
TO THE DENIAL OF THE SUBJECT SABBATICAL LEAVE."
THIRD ASSIGNMENT OF ERROR
THE COURT OF APPEALS ERRED IN TREATING AS LAWFUL THE
WITHHOLDING OF PETITIONER'S SALARIES, CONTRARY TO THE
EVIDENCE ON RECORD.
FOURTH ASSIGNMENT OF ERROR
THE COURT OF APPEALS ERRED IN CONCLUDING, CONTRARY TO THE
EVIDENCE ON RECORD, THAT PETITIONER "FAILED TO SHOW BY A
PREPONDERANCE OF EVIDENCE THE NEGLIGENCE OF
RESPONDENTS SO AS TO BE ENTITLED TO THE DAMAGES SOUGHT."
FIFTH ASSIGNMENT OF ERROR
THE COURT OF APPEALS ERRED IN NOT CORRECTLY COMPUTING
THE SUM OF PETITIONER'S UNPAID AND EARNED SALARIES, IN UTTER
DISREGARD OF THE EVIDENCE ON RECORD.
SIXTH ASSIGNMENT OF ERROR
THE COURT OF APPEALS ERRED IN NOT FINDING, CONTRARY TO THE
EVIDENCE ON RECORD, THAT RESPONDENTS EN CANTO, TABUJARA
AND ABAD ARE JOINTLY AND SEVERALLY LIABLE TO PETITIONER FOR
ACTUAL, MORAL AND EXEMPLARY DAMAGES AS JOINT TORTFEASORS
UNDER THE LAW.25
The issue in this case boils down to whether or not the respondents acted in
bad faith when they resolved petitioner Diaz's application for sabbatical leave
and withheld her salaries.
Ruling of the Court
The resolution of this case hinges on the question of bad faith on the part of
the respondents in denying petitioner Diaz's sabbatical leave application and
withholding of her salaries. Bad faith, however, is a question of fact and is
evidentiary.26 Thus, contrary to petitioner Diaz's belief that " [ w ]hat is involved
in this stage of the case is the legal interpretation or the legal consequence of
the material facts of this case," the resolution of the issue at hand involves a
question of fact, which the respondents rightly assert, is not within the province
of a Rule 45 petition.27Nonetheless, the Court makes an exception in this case
especially so that both the RTC and the Court of Appeals have the same
findings of fact, but they arrived at different conclusions.28
Application for Sabbatical Leave
Petitioner Diaz's complaint29 for recovery of damages before the RTC was
based on the alleged bad faith of the respondents in denying her application
for sabbatical leave vis-a-vis Articles 19 and 20 of the Civil Code.30
Articles 19 and 20 read as follows:
Art. 19. Every person must, in the exercise of his rights and in the performance
of his duties, act with justice, give everyone his due, and observe honesty and
good faith.
Art. 20. Every person who, contrary to law, willfully or negligently causes
damage to another, shall indemnify the latter for the same.
Article 19 of the Civil Code "prescribes a 'primordial limitation on all rights' by
setting certain standards that must be observed in the exercise
thereof."31 Abuse of right under Article 19 exists when the following elements
are present: (1) there is a legal right or duty; (2) which is exercised in bad faith;
(3) for the sole intent of prejudicing or injuring another.32
This Court, expounding on the concept of bad faith under Article 19, held:
Malice or bad faith is at the core of Article 19 of the Civil Code. Good faith
refers to the state of mind which is manifested by the acts of the individual
concerned. It consists of the intention to abstain from taking an unconscionable
and unscrupulous advantage of another. It is presumed. Thus, he who alleges
bad faith has the duty to prove the same. Bad faith does not simply connote
bad judgment or simple negligence; it involves a dishonest purpose or some
moral obloquy and conscious doing of a wrong, a breach of known duty due to
some motives or interest or ill will that partakes of the nature of fraud. 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.33(Citations omitted.)
Undoubtedly, the respondents had a duty to resolve petitioner Diaz's
sabbatical leave application. The crucial question is if they did so with the
intention of prejudicing or injuring petitioner Diaz.
We hold in the negative.
There is no dispute, and both the RTC and the Court of Appeals agree, that
the grant of a sabbatical leave is not a matter of right, but a privilege. Moreover,
the issue of whether or not the respondents acted in bad faith when they
denied petitioner Diaz's application for sabbatical leave has been answered
several times, in separate jurisdictions.
On May 4, 1989, the Ombudsman issued a Resolution 34 in Case No. OMB-0-
89-0049 on the complaint filed by petitioner Diaz against respondents Encanto,
Tabujara, and Abad for violation of Section 3(e) of Republic Act No. 3019,
recommending the dismissal of the complaint for lack of merit. It found no
manifest partiality, evident bad faith, or gross inexcusable negligence on the
part of the respondents in their denial of petitioner Diaz's application for
sabbatical leave and in requiring her to accomplish a Report for Duty form as
a prerequisite for her entitlement to salary.
Petitioner Diaz protested the outcome of this resolution by filing a special civil
action for certiorari with this Court, on two occasions. When G.R. No. 88834
was dismissed for non-compliance with Circular No. 1-88,35 petitioner Diaz re-
filed her petition, raising exactly the same issues, and this was docketed as
G.R. No. 89207.36
On August 31, 1989, this Court issued a Resolution,37 dismissing petitioner
Diaz's petition in G.R. No. 89207. This Court noted the Ombudsman's findings
and observations and found them to be supported by substantial evidence.
On April 28, 2005, the Court of Appeals had the same findings and held that
the denial of petitioner Diaz's application for sabbatical leave was "a collegial
decision based on UP. 's established rules, the grant of which is subject to the
exigencies of the service, like acute shortage in teaching staff" It added
that "the UP. officials' eventual denial of [Diaz's} application is not actionable
xx x it is unfair to impute negligence to [respondents] in the regular discharge
of their official functions. "38
The Ombudsman and all three courts, starting from the R TC to this Court,
have already established that a sabbatical leave is not a right and therefore
petitioner Diaz cannot demand its grant. It does not matter that there was only
one reason for the denial of her application, as the approving authorities found
that such reason was enough. Moreover, not only the Court of Appeals but
also the Ombudsman, and this Court, have ruled that the respondents did not
act in bad faith when petitioner Diaz's sabbatical leave application was denied.
Those three separate rulings verily must be given great weight in the case at
bar.
The Court does not find any reason to disregard those findings, especially
when our own perusal of the evidence showed no traces of bad faith or malice
in the respondents' denial of petitioner Diaz's application for sabbatical leave.
They processed her application in accordance with their usual procedure - with
more leeway, in fact, since petitioner Diaz was given the chance to support her
application when she was asked to submit a historical background; and the
denial was based on the recommendation of respondent Encanto, who was in
the best position to know whether petitioner Diaz's application should be
granted or not.
While the RTC declared that petitioner Diaz should have been granted a
sabbatical leave, it is important to note that the RTC awarded damages to
petitioner Diaz merely for the unreasonable and unconscionable delay in
the resolution of her sabbatical leave application,39 and not its denial per
se. Thus, petitioner Diaz's entitlement to a sabbatical leave should no longer
be an issue in this case. This is supported by petitioner Diaz's own action when
she did not move for the reconsideration of the April 17, 1996 Decision of the
RTC for awarding her damages due only to the delay in the resolution of her
sabbatical leave application and not for its denial; and more so by the prayer
in her petition to this Court wherein she asked that the April 17, 1996 Decision
of the RTC be "reinstated and affirmed in toto."40
Nevertheless, on the question of whether or not there was bad faith in the delay
of the resolution of petitioner Diaz's sabbatical leave application, the Court still
rules in the negative. "It is an elementary rule in this jurisdiction that good faith
is presumed and that the burden of proving bad faith rests upon the party
alleging the same."41 Petitioner Diaz has failed to prove bad faith on the part
of the respondents. There is nothing in the records to show that the
respondents purposely delayed the resolution of her application to prejudice
and injure her. She has not even shown that the delay of six months in
resolving a sabbatical leave application has never happened prior to her case.
On the contrary, any delay that occurred was due to the fact that petitioner
Diaz's application for sabbatical leave did not follow the usual procedure;
hence, the processing of said application took time.42
In petitioner Diaz's petition, she criticized the Court of Appeals for imputing the
cause of delay to her, arguing that as the requirement that a sabbatical leave
application be filed at least one semester before its intended date of effectivity
was only imposed in 1990, long after she had filed hers in 1988. 43 But,
precisely, this rule may have been imposed by U.P. to address any untoward
delays and to likewise provide a time frame for the approving authorities in
resolving sabbatical leave applications.
This Court understands petitioner Diaz's frustration, but she cannot keep on
arguing that the facts, as established, and which she herself does not dispute,
had been misappreciated.in different occasions.
Petitioner Diaz's Withheld Salaries
Petitioner Diaz is entitled to her withheld salaries from July 1, 1988 to October
31, 1988, and from November 1, 1988 to May 31, 1989, and July 16, 1989 to
May 31, 1990, upon submission of the required documents.
The denial of petitioner Diaz's salaries during the first semester of Academic
Year (AY) 1988-1989 was due to the fact that she did not teach that semester.
But when respondent Lazaro removed petitioner Diaz's name from the final
schedule of teaching assignments in CMC for the first semester of AY 1988-
89, it was without petitioner Diaz's prior knowledge, as admitted by respondent
Lazaro herself, to wit:
ATTY. DIAZ: Now, did Prof. Diaz ask you to remove her from [the] schedule of
classes?
LAZARO: I did it.
Q: Because you said you did it on your own?
A: Yes.
xxxx
Q: She did not [ask] you?
A: No.44
The Court, however, observes that respondent Lazaro, in so doing, did not act
in bad faith as she expected petitioner Diaz's application for leave, of whatever
nature, to be granted. As such, she did not want Diaz to have to drop the
classes she was already handling once her sabbatical leave was approved, as
was the case the semester before, when petitioner Diaz dropped her classes,
three weeks into the start of the semester, when her application for sick leave
was approved, viz.:
ATTY. GUNO: You mentioned a while ago that you deleted the name of
Professor Diaz from this final schedule of classes.1âwphi1 Why did you delete
it?
LAZARO: I presumed in good faith that based on the letter she sent which was
routed to me where she stated she could no longer be efficient and effective
as a teacher and she was suffering from fatigue and that she could no longer
work under those circumstances, I felt, as a gesture of sympathy to her that
this should be granted suggesting that she be given a leave of absence of
whatever kind she was qualified for and based on my previous experience on
the second semester where two to three weeks into the course she dropped
her courses, I did not want that to happen again.45
ATTY. GUNO: You also testified that because of the application for sabbatical
leave and the reasons she gave in that letter, you deleted her name in the final
list of class schedule for school year 1988-89 first semester?
LAZARO: Yes.
Q: Why did you delete her name, will you tell the Court?
A: She had applied for sabbatical leave for the whole year of 1988-89 and
based on the experience of her sick leave during the previous semester which
was the second semester of the previous school year where three (3) weeks
into classes she filed for a sick leave and did not teach, based on that
experience, I did not include her name in the class list because the same thing
could happen again.46
While petitioner Diaz was not consulted about the removal of her name from
the class schedule, she did not contest such upon the belief that her
application for sabbatical leave would be approved, as in fact, she was given
her salary in June 1988. As such, this Court believes, in the interest of equity
and fairness, that petitioner Diaz should be entitled to her salary during the
semester when her name was dropped from the final list of schedule of
classes, without her knowledge and consent, and while action on her
application for sabbatical leave was still pending.47
On the matter of her salaries from the second semester of A Y 1988-89 up until
A Y 1989-1990, the respondents legally withheld such, as found by the
Ombudsman and the Court of Appeals for petitioner Diaz's own refusal to
comply with the documentary requirements of U.P. Even the RTC, in its
Omnibus Order of January 12, 1990, denied petitioner Diaz's petition for
mandatory injunction upon the finding that the Report for Duty Form required
of her is a basic and standard requirement that is asked from all employees of
U.P. The RTC held:
It is therefore clear that the acts sought to be enjoined [by Diaz] are in fact
pursuant to the proper observance of administrative or internal rules of the
University. This Court sympathizes with [Diaz] for not being able to receive her
salaries after July 15, 1989. However, such predicament cannot be outrightly
attributable to the defendants, as their withholding of her salaries appears to
be in accordance with existing University regulations.
Apart from such reasons, this Court believes that petitioner Diaz failed to show
why she should be spared from the Report for Duty requirement, which
remains a standard practice even in other offices or institutions. To be entitled
to an injunctive writ, one must show an unquestionable right and/or blatant
violation of said right to be entitled to its issuance.48
But it cannot be denied that during the periods of November 1, 1988 to May
31, 1988 and July 16, 1989 to May 31, 1990, petitioner Diaz rendered service
to U.P. for which she should be compensated.
Given the foregoing, petitioner Diaz should be paid, as the RTC had computed,
her salaries from July l, 1988 to October 1988, the semester when petitioner
Diaz's name was dropped from the final list of schedule of classes, without her
prior knowledge and consent; and for the periods of November 1, 1988 to May
31, 1989 and July 16, 1989 to May 31, 1990, for the work she rendered
during said periods, but upon petitioner Diaz's submission of the
documents required by U.P.
No Payment of Other Damages
Given that the respondents have not abused their rights, they should not be
held liable for any damages sustained by petitioner Diaz. "The law affords no
remedy for damages resulting from an act which does not amount to a legal
wrong. Situations like this have been appropriately denominated damnum
absque injuria."49 Similarly, the Court cannot grant petitioner Diaz's claim for
attorney's fees as no premium should be placed on the right to litigate. "Even
when a claimant is compelled to litigate or to incur expenses to protect his
rights, still attorney's fees may not be awarded where there is no sufficient
showing of bad faith in a party's persistence in a case other than an erroneous
conviction of the righteousness of his cause."50
Legal Interest Due on the Salaries Withheld
Pursuant to Nacar v. Gallery Frames,51 the applicable rate of legal interest due
on petitioner Diaz's withheld salaries - (i) from July 1, 1988 to October 31,
1988, the period corresponding to the first semester of A Y 1988-89, when her
name was removed from the final list of class schedule without her prior
knowledge and consent, less the amount she had received in June 1988 - will
be from April 17, 1996, the date of the Decision of the RTC, up to the full
satisfaction thereof, is 6% per annum; and (ii) from November 1, 1988 to May
31, 1989, and July 16, 1989 to May 31, 1990, the periods when she was
refused payment of her salaries for not accomplishing a Report for Duty Form
- will be from the time petitioner Diaz submits the required Report for Duty
Form up to the full satisfaction thereof, is 6% per annum.
WHEREFORE, the instant petition is DENIED. The assailed Decision of the
Court of Appeals in CA-G.R. CV No. 55165 is hereby AFFIRMED with
MODIFICATION in that the University of the Philippines, through its
appropriate officials, is directed to pay petitioner Elizabeth L. Diaz her withheld
salaries 1) from July 1, 1988 to October 31, 1988, with legal interest at the rate
of six percent (6%) per annum, computed from the date of the Decision of the
R TC on April 17, 1996 until fully paid; and 2) from November 1, 1988 to May
31, 1989 and July 16, 1989 to May 31, 1990, with legal interest at the rate of
six percent (6%) per annum computed from the date petitioner Elizabeth L.
Diaz submits the documents required by the University of the Philippines until
fully paid.
SO ORDERED.
G.R. No. 88694 January 11, 1993
ALBENSON ENTERPRISES CORP., JESSE YAP, AND BENJAMIN
MENDIONA, petitioners, vs. THE COURT OF APPEALS AND EUGENIO S.
BALTAO, respondents.
BIDIN, J.:
This petition assails the decision of respondent Court of Appeals in
CA-GR CV No. 14948 entitled "Eugenio S. Baltao, plaintiff-appellee vs.
Albenson Enterprises Corporation, et al, defendants-appellants", which
modified the judgment of the Regional Trial Court of Quezon City, Branch
XCVIII in Civil Case No. Q-40920 and ordered petitioner to pay private
respondent, among others, the sum of P500,000.00 as moral damages and
attorney's fees in the amount of P50,000.00.
The facts are not disputed.
In September, October, and November 1980, petitioner Albenson Enterprises
Corporation (Albenson for short) delivered to Guaranteed Industries, Inc.
(Guaranteed for short) located at 3267 V. Mapa Street, Sta. Mesa, Manila, the
mild steel plates which the latter ordered. As part payment thereof, Albenson
was given Pacific Banking Corporation Check No. 136361 in the amount of
P2,575.00 and drawn against the account of E.L. Woodworks (Rollo, p. 148).
When presented for payment, the check was dishonored for the reason
"Account Closed." Thereafter, petitioner Albenson, through counsel, traced the
origin of the dishonored check. From the records of the Securities and
Exchange Commission (SEC), Albenson discovered that the president of
Guaranteed, the recipient of the unpaid mild steel plates, was one "Eugenio S.
Baltao." Upon further inquiry, Albenson was informed by the Ministry of Trade
and Industry that E.L. Woodworks, a single proprietorship business, was
registered in the name of one "Eugenio Baltao". In addition, upon verification
with the drawee bank, Pacific Banking Corporation, Albenson was advised that
the signature appearing on the subject check belonged to one "Eugenio
Baltao."
After obtaining the foregoing information, Albenson, through counsel, made an
extrajudicial demand upon private respondent Eugenio S. Baltao, president of
Guaranteed, to replace and/or make good the dishonored check.
Respondent Baltao, through counsel, denied that he issued the check, or that
the signature appearing thereon is his. He further alleged that Guaranteed was
a defunct entity and hence, could not have transacted business with Albenson.
On February 14, 1983, Albenson filed with the Office of the Provincial Fiscal
of Rizal a complaint against Eugenio S. Baltao for violation of Batas Pambansa
Bilang 22. Submitted to support said charges was an affidavit of petitioner
Benjamin Mendiona, an employee of Albenson. In said affidavit, the above-
mentioned circumstances were stated.
It appears, however, that private respondent has a namesake, his son Eugenio
Baltao III, who manages a business establishment, E.L. Woodworks, on the
ground floor of the Baltao Building, 3267 V. Mapa Street, Sta. Mesa, Manila,
the very same business address of Guaranteed.
On September 5, 1983, Assistant Fiscal Ricardo Sumaway filed an information
against Eugenio S. Baltao for Violation of Batas Pambansa Bilang 22. In filing
said information, Fiscal Sumaway claimed that he had given Eugenio S. Baltao
opportunity to submit controverting evidence, but the latter failed to do so and
therefore, was deemed to have waived his right.
Respondent Baltao, claiming ignorance of the complaint against him,
immediately filed with the Provincial Fiscal of Rizal a motion for reinvestigation,
alleging that it was not true that he had been given an opportunity to be heard
in the preliminary investigation conducted by Fiscal Sumaway, and that he
never had any dealings with Albenson or Benjamin Mendiona, consequently,
the check for which he has been accused of having issued without funds was
not issued by him and the signature in said check was not his.
On January 30, 1984, Provincial Fiscal Mauro M. Castro of Rizal reversed the
finding of Fiscal Sumaway and exonerated respondent Baltao. He also
instructed the Trial Fiscal to move for dismissal of the information filed against
Eugenio S. Baltao. Fiscal Castro found that the signature in PBC Check No.
136361 is not the signature of Eugenio S. Baltao. He also found that there is
no showing in the records of the preliminary investigation that Eugenio S.
Baltao actually received notice of the said investigation. Fiscal Castro then
castigated Fiscal Sumaway for failing to exercise care and prudence in the
performance of his duties, thereby causing injustice to respondent who was
not properly notified of the complaint against him and of the requirement to
submit his counter evidence.
Because of the alleged unjust filing of a criminal case against him for allegedly
issuing a check which bounced in violation of Batas Pambansa Bilang 22 for a
measly amount of P2,575.00, respondent Baltao filed before the Regional Trial
Court of Quezon City a complaint for damages against herein petitioners
Albenson Enterprises, Jesse Yap, its owner, and Benjamin Mendiona, its
employee.
In its decision, the lower court observed that "the check is drawn against the
account of "E.L. Woodworks," not of Guaranteed Industries of which plaintiff
used to be President. Guaranteed Industries had been inactive and had
ceased to exist as a corporation since 1975. . . . . The possibility is that it was
with Gene Baltao or Eugenio Baltao III, a son of plaintiff who had a business
on the ground floor of Baltao Building located on V. Mapa Street, that the
defendants may have been dealing with . . . ." (Rollo, pp. 41-42).
The dispositive portion of the trial court 's decision reads:
WHEREFORE, judgment is hereby rendered in favor of
plaintiff and against defendants ordering the latter to pay
plaintiff jointly and severally:
1. actual or compensatory damages of P133,350.00;
2. moral damages of P1,000,000.00 (1 million pesos);
3. exemplary damages of P200,000.00;
4. attorney's fees of P100,000.00;
5 costs.
Defendants' counterclaim against plaintiff and claim for
damages against Mercantile Insurance Co. on the bond for
the issuance of the writ of attachment at the instance of
plaintiff are hereby dismissed for lack of merit. (Rollo, pp. 38-
39).
On appeal, respondent court modified the trial court's decision as follows:
WHEREFORE, the decision appealed from is MODIFIED by reducing
the moral damages awarded therein from P1,000,000.00 to
P500,000.00 and the attorney's fees from P100,000.00 to P50,000.00,
said decision being hereby affirmed in all its other aspects. With costs
against appellants. (Rollo, pp. 50-51)
Dissatisfied with the above ruling, petitioners Albenson Enterprises Corp.,
Jesse Yap, and Benjamin Mendiona filed the instant Petition, alleging that the
appellate court erred in:
1. Concluding that private respondent's cause of action is not one based
on malicious prosecution but one for abuse of rights under Article 21 of the
Civil Code notwithstanding the fact that the basis of a civil action for
malicious prosecution is Article 2219 in relation to Article 21 or Article 2176
of the Civil Code . . . .
2. Concluding that "hitting at and in effect maligning (private respondent)
with an unjust criminal case was, without more, a plain case of abuse of
rights by misdirection" and "was therefore, actionable by itself," and which
"became inordinately blatant and grossly aggravated when . . . (private
respondent) was deprived of his basic right to notice and a fair hearing in
the so-called preliminary investigation . . . . "
3. Concluding that petitioner's "actuations in this case were coldly
deliberate and calculated", no evidence having been adduced to support
such a sweeping statement.
4. Holding the petitioner corporation, petitioner Yap and petitioner
Mendiona jointly and severally liable without sufficient basis in law and in
fact.
5. Awarding respondents —
5.1. P133,350.00 as actual or compensatory damages, even in
the absence of sufficient evidence to show that such was actually
suffered.
5.2. P500,000.00 as moral damages considering that the
evidence in this connection merely involved private respondent's
alleged celebrated status as a businessman, there being no
showing that the act complained of adversely affected private
respondent's reputation or that it resulted to material loss.
5.3. P200,000.00 as exemplary damages despite the fact that
petitioners were duly advised by counsel of their legal recourse.
5.4. P50,000.00 as attorney's fees, no evidence having been
adduced to justify such an award (Rollo, pp. 4-6).
Petitioners contend that the civil case filed in the lower court was one for
malicious prosecution. Citing the case of Madera vs. Lopez (102 SCRA 700
[1981]), they assert that the absence of malice on their part absolves them
from any liability for malicious prosecution. Private respondent, on the other
hand, anchored his complaint for Damages on Articles 19, 20, and 21 ** of the
Civil Code.
Article 19, known to contain what is commonly referred to as the principle of
abuse of rights, sets certain standards which may be observed not only in the
exercise of one's rights but also in the performance of one's duties. These
standards are the following: to act with justice; to give everyone his due; and
to observe honesty and good faith. The law, therefore, recognizes the
primordial limitation on all rights: that in their exercise, the norms of human
conduct set forth in Article 19 must be observed. A right, though by itself legal
because recognized or granted by law as such, may nevertheless become the
source of some illegality. When a right is exercised in a manner which does
not conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must be
held responsible. Although the requirements of each provision is different,
these three (3) articles are all related to each other. As the eminent Civilist
Senator Arturo Tolentino puts it: "With this article (Article 21), combined with
articles 19 and 20, the scope of our law on civil wrongs has been very greatly
broadened; it has become much more supple and adaptable than the Anglo-
American law on torts. It is now difficult to conceive of any malevolent exercise
of a right which could not be checked by the application of these articles"
(Tolentino, 1 Civil Code of the Philippines 72).
There is however, no hard and fast rule which can be applied to determine
whether or not the principle of abuse of rights may be invoked. The question
of whether or not the principle of abuse of rights has been violated, resulting
in damages under Articles 20 and 21 or other applicable provision of law,
depends on the circumstances of each case. (Globe Mackay Cable and Radio
Corporation vs. Court of Appeals, 176 SCRA 778 [1989]).
The elements of an abuse of right under Article 19 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. Article 20 speaks of the general
sanction for all other provisions of law which do not especially provide for their
own sanction (Tolentino, supra, p. 71). Thus, anyone who,
whether willfully or negligently, in the exercise of his legal right or duty, causes
damage to another, shall indemnify his victim for injuries suffered thereby.
Article 21 deals with acts contra bonus mores, and has the following elements:
1) There is an act which is legal; 2) but which is contrary to morals, good
custom, public order, or public policy; 3) and it is done with intent to injure.
Thus, under any of these three (3) provisions of law, an act which causes injury
to another may be made the basis for an award of damages.
There is a common element under Articles 19 and 21, and that is, the act must
be intentional. However, Article 20 does not distinguish: the act may be done
either "willfully", or "negligently". The trial court as well as the respondent
appellate court mistakenly lumped these three (3) articles together, and cited
the same as the bases for the award of damages in the civil complaint filed
against petitioners, thus:
With the foregoing legal provisions (Articles 19, 20, and 21) in focus, there
is not much difficulty in ascertaining the means by which appellants' first
assigned error should be resolved, given the admitted fact that when there
was an attempt to collect the amount of P2,575.00, the defendants were
explicitly warned that plaintiff Eugenio S. Baltao is not the Eugenio Baltao
defendants had been dealing with (supra, p. 5). When the defendants
nevertheless insisted and persisted in filing a case — a criminal case no
less — against plaintiff, said defendants ran afoul of the legal provisions
(Articles 19, 20, and 21 of the Civil Code) cited by the lower court and
heretofore quoted (supra).
Defendants, not having been paid the amount of P2,575.00, certainly had
the right to complain. But that right is limited by certain constraints.
Beyond that limit is the area of excess, of abuse of rights. (Rollo, pp.
44-45).
Assuming, arguendo, that all the three (3) articles, together and not
independently of each one, could be validly made the bases for an award of
damages based on the principle of "abuse of right", under the circumstances,
We see no cogent reason for such an award of damages to be made in favor
of private respondent.
Certainly, petitioners could not be said to have violated the aforestated
principle of abuse of right. What prompted petitioners to file the case for
violation of Batas Pambansa Bilang 22 against private respondent was their
failure to collect the amount of P2,575.00 due on a bounced check which they
honestly believed was issued to them by private respondent. Petitioners had
conducted inquiries regarding the origin of the check, and yielded the following
results: from the records of the Securities and Exchange Commission, it was
discovered that the President of Guaranteed (the recipient of the unpaid mild
steel plates), was one "Eugenio S. Baltao"; an inquiry with the Ministry of Trade
and Industry revealed that E.L. Woodworks, against whose account the check
was drawn, was registered in the name of one "Eugenio Baltao"; verification
with the drawee bank, the Pacific Banking Corporation, revealed that the
signature appearing on the check belonged to one "Eugenio Baltao".
In a letter dated December 16, 1983, counsel for petitioners wrote private
respondent demanding that he make good the amount of the check. Counsel
for private respondent wrote back and denied, among others, that private
respondent ever transacted business with Albenson Enterprises Corporation;
that he ever issued the check in question. Private respondent's counsel even
went further: he made a warning to defendants to check the veracity of their
claim. It is pivotal to note at this juncture that in this same letter, if indeed
private respondent wanted to clear himself from the baseless accusation made
against his person, he should have made mention of the fact that there are
three (3) persons with the same name, i.e.: Eugenio Baltao, Sr., Eugenio S.
Baltao, Jr. (private respondent), and Eugenio Baltao III (private respondent's
son, who as it turned out later, was the issuer of the check). He, however,
failed to do this. The last two Baltaos were doing business in the same building
— Baltao Building — located at 3267 V. Mapa Street, Sta. Mesa, Manila. The
mild steel plates were ordered in the name of Guaranteed of which respondent
Eugenio S. Baltao is the president and delivered to Guaranteed at Baltao
building. Thus, petitioners had every reason to believe that the Eugenio Baltao
who issued the bouncing check is respondent Eugenio S. Baltao when their
counsel wrote respondent to make good the amount of the check and upon
refusal, filed the complaint for violation of BP Blg. 22.
Private respondent, however, did nothing to clarify the case of mistaken
identity at first hand. Instead, private respondent waited in ambush and
thereafter pounced on the hapless petitioners at a time he thought was
propitious by filing an action for damages. The Court will not countenance this
devious scheme.
The criminal complaint filed against private respondent after the latter refused
to make good the amount of the bouncing check despite demand was a
sincere attempt on the part of petitioners to find the best possible means by
which they could collect the sum of money due them. A person who has not
been paid an obligation owed to him will naturally seek ways to compel the
debtor to pay him. It was normal for petitioners to find means to make the
issuer of the check pay the amount thereof. In the absence of a wrongful act
or omission or of fraud or bad faith, moral damages cannot be awarded and
that the adverse result of an action does not per se make the action wrongful
and subject the actor to the payment of damages, for the law could not have
meant to impose a penalty on the right to litigate (Rubio vs. Court of Appeals,
141 SCRA 488 [1986]).
In the case at bar, private respondent does not deny that the mild steel plates
were ordered by and delivered to Guaranteed at Baltao building and as part
payment thereof, the bouncing check was issued by one Eugenio Baltao.
Neither had private respondent conveyed to petitioner that there are two
Eugenio Baltaos conducting business in the same building — he and his son
Eugenio Baltao III. Considering that Guaranteed, which received the goods in
payment of which the bouncing check was issued is owned by respondent,
petitioner acted in good faith and probable cause in filing the complaint before
the provincial fiscal.
To constitute malicious prosecution, there must be proof that the prosecution
was prompted by a sinister design to vex and humiliate a person, and that it
was initiated deliberately by the defendant knowing that his charges were false
and groundless. Concededly, the mere act of submitting a case to the
authorities for prosecution does not make one liable for malicious prosecution.
(Manila Gas Corporation vs. Court of Appeals, 100 SCRA 602 [1980]). Still,
private respondent argues that liability under Articles 19, 20, and 21 of the Civil
Code is so encompassing that it likewise includes liability for damages for
malicious prosecution under Article 2219 (8). True, a civil action for damages
for malicious prosecution is allowed under the New Civil Code, more
specifically Articles 19, 20, 26, 29, 32, 33, 35, and 2219 (8) thereof. In order
that such a case can prosper, however, the following three (3) elements must
be present, to wit: (1) The fact of the prosecution and the further fact that the
defendant was himself the prosecutor, and that the action was finally
terminated with an acquittal; (2) That in bringing the action, the prosecutor
acted without probable cause; (3) The prosecutor was actuated or impelled by
legal malice (Lao vs. Court of Appeals, 199 SCRA 58, [1991]).
Thus, a party injured by the filing of a court case against him, even if he is later
on absolved, may file a case for damages grounded either on the principle of
abuse of rights, or on malicious prosecution. As earlier stated, a complaint for
damages based on malicious prosecution will prosper only if the three (3)
elements aforecited are shown to exist. In the case at bar, the second and third
elements were not shown to exist. It is well-settled that one cannot be held
liable for maliciously instituting a prosecution where one has acted with
probable cause. "Probable cause is the existence of such facts and
circumstances as would excite the belief, in a reasonable mind, acting on the
facts within the knowledge of the prosecutor, that the person charged was
guilty of the crime for which he was prosecuted. In other words, a suit will lie
only in cases where a legal prosecution has been carried on without probable
cause. The reason for this rule is that it would be a very great discouragement
to public justice, if prosecutors, who had tolerable ground of suspicion, were
liable to be sued at law when their indictment miscarried" (Que vs. Intermediate
Appellate Court, 169 SCRA 137 [1989]).
The presence of probable cause signifies, as a legal consequence, the
absence of malice. In the instant case, it is evident that petitioners were not
motivated by malicious intent or by sinister design to unduly harass private
respondent, but only by a well-founded anxiety to protect their rights when they
filed the criminal complaint against private respondent.
To constitute malicious prosecution, there must be proof that
the prosecution was prompted by a sinister design to vex and
humiliate a person, that it was initiated deliberately by the
defendant knowing that his charges were false and
groundless. Concededly, the mere act of submitting a case to
the authorities for prosecution does not make one liable for
malicious prosecution. Proof and motive that the institution of
 the action was prompted by a sinister design to vex and
humiliate a person must be clearly and preponderantly
established to entitle the victims to damages (Ibid.).
In the case at bar, there is no proof of a sinister design on the part of petitioners
to vex or humiliate private respondent by instituting the criminal case against
him. While petitioners may have been negligent to some extent in determining
the liability of private respondent for the dishonored check, the same is not so
gross or reckless as to amount to bad faith warranting an award of damages.
The root of the controversy in this case is founded on a case of mistaken
identity. It is possible that with a more assiduous investigation, petitioners
would have eventually discovered that private respondent Eugenio S. Baltao
is not the "Eugenio Baltao" responsible for the dishonored check. However,
the record shows that petitioners did exert considerable effort in order to
determine the liability of private respondent. Their investigation pointed to
private respondent as the "Eugenio Baltao" who issued and signed the
dishonored check as the president of the debtor-corporation Guaranteed
Enterprises. Their error in proceeding against the wrong individual was
obviously in the nature of an innocent mistake, and cannot be characterized
as having been committed in bad faith. This error could have been discovered
if respondent had submitted his counter-affidavit before investigating fiscal
Sumaway and was immediately rectified by Provincial Fiscal Mauro Castro
upon discovery thereof, i.e., during the reinvestigation resulting in the dismissal
of the complaint.
Furthermore, the adverse result of an action does not per se make the act
wrongful and subject the actor to the payment of moral damages. The law
could not have meant to impose a penalty on the right to litigate, such right is
so precious that moral damages may not be charged on those who may even
exercise it erroneously. And an adverse decision does not ipso facto justify the
award of attorney's fees to the winning party (Garcia vs. Gonzales, 183 SCRA
72 [1990]).
Thus, an award of damages and attorney's fees is unwarranted where the
action was filed in good faith. If damage results from a person's exercising his
legal rights, it is damnum absque injuria (Ilocos Norte Electric Company vs.
Court of Appeals, 179 SCRA 5 [1989]).
Coming now to the claim of private respondent for actual or compensatory
damages, the records show that the same was based solely on his allegations
without proof to substantiate the same. He did not present proof of the cost of
the medical treatment which he claimed to have undergone as a result of the
nervous breakdown he suffered, nor did he present proof of the actual loss to
his business caused by the unjust litigation against him. In determining actual
damages, the court cannot rely on speculation, conjectures or guesswork as
to the amount. Without the actual proof of loss, the award of actual damages
becomes erroneous (Guilatco vs. City of Dagupan, 171 SCRA 382 [1989]).
Actual and compensatory damages are those recoverable because of
pecuniary loss — in business, trade, property, profession, job or occupation —
and the same must be proved, otherwise, if the proof is flimsy and
unsubstantiated, no damages will be given (Rubio vs. Court of Appeals, 141
SCRA 488 [1986]). For these reasons, it was gravely erroneous for respondent
court to have affirmed the award of actual damages in favor of private
respondent in the absence of proof thereof.
Where there is no evidence of the other party having acted in wanton,
fraudulent or reckless, or oppressive manner, neither may exemplary damages
be awarded (Dee Hua Liong Electrical Equipment Corporation vs. Reyes, 145
SCRA 488 [1986]).
As to the award of attorney's fees, it is well-settled that the same is the
exception rather than the general rule. Needless to say, the award of attorney's
fees must be disallowed where the award of exemplary damages is eliminated
(Article 2208, Civil Code; Agustin vs. Court of Appeals, 186 SCRA 375 [1990]).
Moreover, in view of the fact that there was no malicious prosecution against
private respondent, attorney's fees cannot be awarded him on that ground.
In the final analysis, there is no proof or showing that petitioners acted
maliciously or in bad faith in the filing of the case against private respondent.
Consequently, in the absence of proof of fraud and bad faith committed by
petitioners, they cannot be held liable for damages (Escritor, Jr. vs.
Intermediate Appellate Court, 155 SCRA 577 [1987]). No damages can be
awarded in the instant case, whether based on the principle of abuse of rights,
or for malicious prosecution. The questioned judgment in the instant case
attests to the propensity of trial judges to award damages without basis. Lower
courts are hereby cautioned anew against awarding unconscionable sums as
damages without bases therefor.
WHEREFORE, the petition is GRANTED and the decision of the Court of
Appeals in C.A. G.R. C.V. No. 14948 dated May 13, 1989, is hereby
REVERSED and SET ASIDE. Costs against respondent Baltao.
SO ORDERED.
G.R. No. 126486 February 9, 1998
BARONS MARKETING CORP., petitioner, vs. COURT OF APPEALS and
PHELPS DODGE PHILS., INC. respondents.
KAPUNAN, J.:
The instant petition raises two issues: (1) whether or not private respondent is
guilty of abuse of right; and (2) whether or not private respondent is entitled to
interest and attorney's fees.
The facts are undisputed:
On August 31, 1973, plaintiff [Phelps Dodge, Philippines, Inc. private
respondent herein] appointed defendant [petitioner Barons Marketing,
Corporation] as one of its dealers of electrical wires and cables
effective September 1, 1973 (Exh. A). As such dealer, defendant was
given by plaintiff 60 days credit for its purchases of plaintiff's electrical
products. This credit term was to be reckoned from the date of delivery
by plaintiff of its products to defendant (Exh. 1).
During the period covering December 1986 to August 17, 1987,
defendant purchased, on credit, from plaintiff various electrical wires
and cables in the total amount of P4,102,438.30 (Exh. B to K). These
wires and cables were in turn sold, pursuant to previous
arrangements, by defendant to MERALCO, the former being the
accredited supplier of the electrical requirements of the latter. Under
the sales invoices issued by plaintiff to defendant for the subject
purchases, it is stipulated that interest at 12% on the amount due for
attorney's fees and collection (Exh. BB).1 On September 7, 1987,
defendant paid plaintiff the amount of P300,000.00 out of its total
purchases as above-stated (Exh. S), thereby leaving an unpaid
account on the aforesaid deliveries of P3,802,478.20. On several
occasions, plaintiff wrote defendant demanding payment of its
outstanding obligations due plaintiff (Exhs. L, M, N, and P). In
response, defendant wrote plaintiff on October 5, 1987 requesting the
latter if it could pay its outstanding account in monthly installments of
P500,000.00 plus 1% interest per month commencing on October 15,
1987 until full payment (Exh. O and O-4). Plaintiff, however, rejected
defendant's offer and accordingly reiterated its demand for the full
payment of defendant's account (Exh. P).2
On 29 October 1987, private respondent Phelps Dodge Phils., Inc. filed a
complaint before the Pasig Regional Trial Court against petitioner Barons
Marketing Corporation for the recovery of P3,802,478.20 representing the
value of the wires and cables the former had delivered to the latter, including
interest. Phelps Dodge likewise prayed that it be awarded attorney's fees at
the rate of 25% of the amount demanded, exemplary damages amounting to
at least P100,000.00, the expenses of litigation and the costs of suit.
Petitioner, in its answer, admitted purchasing the wires and cables from private
respondent but disputed the amount claimed by the latter. Petitioner likewise
interposed a counterclaim against private respondent, alleging that it suffered
injury to its reputation due to Phelps Dodge's acts. Such acts were purportedly
calculated to humiliate petitioner and constituted an abuse of rights.
After hearing, the trial court on 17 June 1991 rendered its decision, the
dispositive portion of which reads:
WHEREFORE, from all the foregoing considerations, the Court finds
Phelps Dodge Phils., Inc. to have preponderantly proven its case and
hereby orders Barons Marketing, Inc. to pay Phelps Dodge the
following:
1. P3,108,000.00 constituting the unpaid balance of defendant's
purchases from plaintiff and interest thereon at 12% per
annum computed from the respective expiration of the 60 day credit
term, vis-a-vis the various sales invoices and/or delivery receipts;
2. 25% of the preceding obligation for and as attorney's fees;
3. P10,000.00 as exemplary damages;
4. Costs of suit.3
Both parties appealed to respondent court. Private respondent claimed that
the trial court should have awarded it the sum of P3,802,478.20, the amount
which appeared in the body of the complaint and proven during the trial rather
than P3,1081000.00 The latter amount appears in petitioner's prayer
supposedly as a result of a typographical error.
On the other hand, petitioner reiterated its claims for damages as a result of
"creditor's abuse." It also alleged that private respondent failed to prove its
cause of action against it.
On 25 June 1996, the Court of Appeals rendered a decision modifying the
decision of the trial court, thus:
 WHEREFORE, from all the foregoing considerations, the Court finds
Phelps Dodge Phils., Inc. to have preponderantly proven its case and
hereby orders Barons Marketing, Inc. to pay Phelps Dodge the
following:
1. P3,802,478.20 constituting the unpaid balance of defendant's
purchases from plaintiff and interest thereon at 12% per
annum computed from the respective expiration of the 60 day credit
term, vis-a-vis the various sales invoices and/or delivery receipts; and
2. 5% of the preceding obligation for and as attorney's fees.
No costs.4
Petitioner Barons Marketing is now before this Court alleging that respondent
court erred when it held (1) private respondent Phelps Dodge not guilty of
"creditor's abuse," and (2) petitioner liable to private respondent for interest
and attorney's fees.
I relationship between the parties had been a fruitful one especially for
Petitioner does not deny private respondent's rights to institute an action for
collection and to claim full payment. Indeed, petitioner's right to file an action
for collection is beyond cavil.5 Likewise, private respondent's right to reject
petitioner's offer to pay in installments is guaranteed by Article 1248 of the Civil
Code which states:
Art. 1248. Unless there is an express stipulation to that effect, the
creditor cannot be compelled partially to receive the prestations in
which the obligation consists. Neither may the debtor be required to
make partial payments.
However, when the debt is in part liquidated and in part unliquidated,
the creditor may demand and the debtor may effect the payment of
the former without waiting for the liquidation of the latter.
Under this provision, the prestation, i.e., the object of the obligation, must be
performed in one act, not in parts.
Tolentino concedes that the right has its limitations:
Partial Prestations. — Since the creditor cannot be compelled to
accept partial performance, unless otherwise stipulated, the creditor
who refuses to accept partial prestations does not incur in delay
or mora accipiendi, except when there is abuse of right or if good faith
requires acceptance.6
Indeed, the law, as set forth in Article 19 of the Civil Code, prescribes a
"primordial limitation on all rights" by setting certain standards that must be
observed in the exercise thereof.7 Thus:
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.
Petitioner now invokes Article 19 and Article 218 of the Civil Code, claiming
that private respondent abused its rights when it rejected petitioner's offer of
settlement and subsequently filed the action for collection considering:
. . . that the relationship between the parties started in 1973 spanning
more than 13 years before the complaint was filed, that the petitioner
had been a good and reliable dealer enjoying a good credit standing
during the period before it became delinquent in 1987, that the
the private respondent, that the petitioner exerted its outmost efforts
to settle its obligations and avoid a suit, that the petitioner did not
evade in the payment of its obligation to the private respondent, and
that the petitioner was just asking a small concession that it be allowed
to liquidate its obligation to eight (8) monthly installments of
P500,000.00 plus 1% interest per month on the balance which
proposal was supported by post-dated checks.9
Expounding on its theory, petitioner states:
In the ordinary course of events, a suit for collection of a sum of money
filed in court is done for the primary purpose of collecting a debt or
obligation. If there is an offer by the debtor to pay its debt or obligation
supported by post-dated checks and with provision for interests, the
normal response of a creditor would be to accept the offer of
compromise and not file the suit for collection. It is of common
knowledge that proceedings in our courts would normally take years
before an action is finally settled. It is always wiser and more prudent
to accept an offer of payment in installment rather than file an action
in court to compel the debtor to settle his obligation in full in a single
payment.
xxx xxx xxx
 . . . Why then did private respondent elect to file a suit for collection
rather than accept petitioner's offer of settlement, supported by post-
dated checks, by paying monthly installments of P500,000.00 plus 1%
per month commencing on October 15, 1987 until full payment? The
answer is obvious. The action of private respondent in filling a suit for
collection was an abuse of right and exercised for the sole purpose of
prejudicing and injuring the petitioner.10
Petitioner prays that the Court order private respondent to pay petitioner moral
and exemplary damages, attorney's fees, as well as the costs of suit. It likewise
asks that it be allowed to liquidate its obligation to private respondent, without
interests, in eight equal monthly installments.
Petitioner's theory is untenable.
Both parties agree that to constitute an abuse of rights under Article 19 the
defendant must act with bad faith or intent to prejudice the plaintiff. They cite
the following comments of Tolentino as their authority:
Test of Abuse of Right. — Modern jurisprudence does not permit acts
which, although not unlawful, are anti-social. There is undoubtedly an
abuse of right when it is exercised for the only purpose of prejudicing
or injuring another. When the objective of the actor is illegitimate, the
illicit act cannot be concealed under the guise of exercising a right.
The principle does not permit acts which, without utility or legitimate
purpose cause damage to another, because they violate the concept
of social solidarity which considers law as rational and just. Hence,
every abnormal exercise of a right, contrary to its socio-economic
purpose, is an abuse that will give rise to liability. The exercise of a
right must be in accordance with the purpose for which it was
established, and must not be excessive or unduly harsh; there must
be no intention to injure another. Ultimately, however, and in practice,
courts, in the sound exercise of their discretion, will have to determine
all the facts and circumstances when the exercise of a right is unjust,
or when there has been an abuse of right.11
The question, therefore, is whether private respondent intended to prejudice
or injure petitioner when it rejected petitioner's offer and filed the action for
collection.
We hold in the negative. It is an elementary rule in this jurisdiction that good
faith is presumed and that the burden of proving bad faith rests upon the party
alleging the same.12 In the case at bar, petitioner has failed to prove bad faith
on the part of private respondent. Petitioner's allegation that private
respondent was motivated by a desire to terminate its agency relationship with
petitioner so that private respondent itself may deal directly with Meralco is
simply not supported by the evidence. At most, such supposition is merely
speculative.
Moreover, we find that private respondent was driven by very legitimate
reasons for rejecting petitioner's offer and instituting the action for collection
before the trial court. As pointed out by private respondent, the corporation had
its own "cash position to protect in order for it to pay its own obligations." This
is not such "a lame and poor rationalization" as petitioner purports it to be. For
if private respondent were to be required to accept petitioner's offer, there
would be no reason for the latter to reject similar offers from its other debtors.
Clearly, this would be inimical to the interests of any enterprise, especially a
profit-oriented one like private respondent. It is plain to see that what we have
here is a mere exercise of rights, not an abuse thereof Under these
circumstances, we do not deem private respondent to have acted in a manner
contrary to morals, good customs or public policy as to violate the provisions
of Article 21 of the Civil Code.
Consequently, petitioner's prayer for moral and exemplary damages must thus
be rejected. Petitioner's claim for moral damages is anchored on Article 2219
(10) of the Civil Code which states:
Art. 2219. Moral damages may be recovered in the following and
analogous cases:
xxx xxx xxx
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32,
34, and 35.
xxx xxx xxx
Having ruled that private respondent's acts did not transgress the provisions
of Article 21, petitioner cannot be entitled to moral damages or, for that matter,
exemplary damages. While the amount of exemplary damages need not be
proved, petitioner must show that he is entitled to moral, temperate or
compensatory damages before the court may consider the question of whether
or not exemplary damages should be awarded.13 As we have observed above;
petitioner has failed to discharge this burden.
It may not be amiss to state that petitioner's contract with private respondent
has the force of law between them.14Petitioner is thus bound to fulfill what has
been expressly stipulated therein.15 In the absence of any abuse of right,
private respondent cannot be allowed to perform its obligation under such
contract in parts. Otherwise, private respondent's right under Article 1248 will
be negated, the sanctity of its contract with petitioner defiled. The principle of
autonomy of contracts16 must be respected.
II
Under said contract, petitioner is liable to private respondent for the unpaid
balance of its purchases from private respondent plus 12% interest. Private
respondent's sales invoices expressly provide that:
. . . Interest at 12% per annum will be charged on all overdue
account plus 25% on said amount for attorney's fees and collection. .
. .17
It may also be noted that the above stipulation, insofar as it provides for the
payment of "25% on said amount for attorney's fees and collection (sic),"
constitutes what is known as a penal clause.18 Petitioner is thus obliged to pay
such penalty in addition to the 12% annual interest, there being an express
stipulation to that effect.
Petitioner nevertheless urges this Court to reduce the attorney's fees for being
"grossly excessive," "considering the nature of the case which is a mere action
for collection of a sum of money." It may be pointed out however that the above
penalty is supposed to answer not only for attorney's fees but for collection
fees as well. Moreover:
. . . the attorneys' fees here provided is not, strictly speaking, the
attorneys' fees recoverable as between attorney and client spoken of
and regulated by the Rules of Court. Rather, the attorneys' fees here
are in the nature of liquidated damages and the stipulation therefor is
aptly called a penal clause. It has been said that so long as such
stipulation does not contravene law, morals, or public order, it is strictly
binding upon defendant. The attorneys' fees so provided are awarded
in favor of the litigant, not his counsel. It is the litigant, not counsel,
who is the judgment creditor entitled to enforce the judgment by
execution. 19
The sentiments of the law are echoed in Article 2227 of the same Code:
Art. 2227. Liquidated damages, whether intended as an indemnity or
a penalty, shall be equitably reduced if they are iniquitous or
unconscionable.
It is true that we have upheld the reasonableness of penalties in the form of
attorney's fees consisting of twenty-five percent (25%) of the principal debt
plus interest.20 In the case at bar, however, the interest alone runs to some
four and a half million pesos (P4.5M), even exceeding the principal debt
amounting to almost four million pesos (P4.0M). Twenty five percent (25%) of
the principal and interest amounts to roughly two million pesos (P2M). In real
terms, therefore, the attorney's fees and collection fees are manifestly
exorbitant. Accordingly, we reduce the same to ten percent (10%) of
the principal.
Private respondent, however, argues that petitioner failed to question the
award of attorney's fees on appeal before respondent court and raised the
issue only in its motion for reconsideration. Consequently, petitioner should be
deemed to have waived its right to question such award.
Private respondent's attempts to dissuade us from reducing the penalty are
futile. The Court is clothed with ample authority to review matters, even if they
are not assigned as errors in their appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case.21
WHEREFORE, the decision of the Court of Appeals is hereby MODIFIED in
that the attorney's and collection fees are reduced to ten percent (10%) of the
principal but is AFFIRMED in all other respects.
SO ORDERED.

Nonetheless, courts are empowered to reduce such penalty if the same is

"iniquitous or unconscionable." Article 1229 of the Civil Code states thus:

Art. 1229. The judge shall equitably reduce the penalty when the
principal obligation has been partly or been irregularly complied with
by the debtor. Even if there has no performance, the penalty may also
be reduced by the courts if it is iniquitous or unconscionable.
(Emphasis supplied.)
G.R. No. 175822 October 23, 2013
CALIFORNIA CLOTHING INC. and MICHELLE S. YBAÑEZ, Petitioners, vs.
SHIRLEY G. QUIÑONES, Respondent.
DECISION
PERALTA, J.:
Assailed in this petition for review on certiorari under Rule 45 of the ; Rules of Court are
the Court of Appeals Decision1 dated August 3, 2006 and Resolution2 dated November
14, 2006 in CA-G.R. CV No. 80309. The assailed decision reversed and set aside the
June 20, 2003 Decision3 of the Regional Trial Court of Cebu City (RTC), Branch 58, in
Civil Case No. CEB-26984; while the assailed resolution denied the motion for
reconsideration filed by petitioner Michelle Ybañez (Ybañez).
The facts of the case, as culled from the records, are as follows:
On July 25, 2001, respondent Shirley G. Quiñones, a Reservation Ticketing
Agent of Cebu Pacific Air in Lapu Lapu City, went inside the Guess USA
Boutique at the second floor of Robinson’s Department Store (Robinson’s) in
Cebu City. She fitted four items: two jeans, a blouse and a shorts, then decided
to purchase the black jeans worth ₱2,098.00.4 Respondent allegedly paid to
the cashier evidenced by a receipt5 issued by the store.6
While she was walking through the skywalk connecting Robinson’s and
Mercury Drug Store (Mercury) where she was heading next, a Guess
employee approached and informed her that she failed to pay the item she got.
She, however, insisted that she paid and showed the employee the receipt
issued in her favor.7 She then suggested that they talk about it at the Cebu
Pacific Office located at the basement of the mall. She first went to Mercury
then met the Guess employees as agreed upon.8
When she arrived at the Cebu Pacific Office, the Guess employees allegedly
subjected her to humiliation in front of the clients of Cebu Pacific and
repeatedly demanded payment for the black jeans.9 They supposedly even
searched her wallet to check how much money she had, followed by another
argument. Respondent, thereafter, went home.10
On the same day, the Guess employees allegedly gave a letter to the Director
of Cebu Pacific Air narrating the incident, but the latter refused to receive it as
it did not concern the office and the same took place while respondent was off
duty.11 Another letter was allegedly prepared and was supposed to be sent to
the Cebu Pacific Office in Robinson’s, but the latter again refused to receive
it.12 Respondent also claimed that the Human Resource Department (HRD) of
Robinson’s was furnished said letter and the latter in fact conducted an
investigation for purposes of canceling respondent’s Robinson’s credit card.
Respondent further claimed that she was not given a copy of said damaging
letter.13 With the above experience, respondent claimed to have suffered
physical anxiety, sleepless nights, mental anguish, fright, serious
apprehension, besmirched reputation, moral shock and social
humiliation.14 She thus filed the Complaint for Damages15 before the RTC
against petitioners California Clothing, Inc. (California Clothing), Excelsis
Villagonzalo (Villagonzalo), Imelda Hawayon (Hawayon) and Ybañez. She
demanded the payment of moral, nominal, and exemplary damages, plus
attorney’s fees and litigation expenses.16
In their Answer,17 petitioners and the other defendants admitted the issuance of the
receipt of payment. They claimed, however, that instead of the cashier (Hawayon)
issuing the official receipt, it was the invoicer (Villagonzalo) who did it manually. They
explained that there was miscommunication between the employees at that time
because prior to the issuance of the receipt, Villagonzalo asked Hawayon " Ok na ?,"
and the latter replied " Ok na ," which the former believed to mean that the item has
already been paid.18 Realizing the mistake, Villagonzalo rushed outside to look for
respondent and when he saw the latter, he invited her to go back to the shop to make
clarifications as to whether or not payment was indeed made. Instead, however, of
going back to the shop, respondent suggested that they meet at the Cebu Pacific Office.
Villagonzalo, Hawayon and Ybañez thus went to the agreed venue where they talked
to respondent.19 They pointed out that it appeared in their conversation that respondent
could not recall whom she gave the payment.20 They emphasized that they were gentle
and polite in talking to respondent and it was the latter who was arrogant in answering
their questions.21 As counterclaim, petitioners and the other defendants sought the
payment of moral and exemplary damages, plus attorney’s fees and litigation
expenses.22
On June 20, 2003, the RTC rendered a Decision dismissing both the complaint and
counterclaim of the parties. From the evidence presented, the trial court concluded that
the petitioners and the other defendants believed in good faith that respondent failed to
make payment. Considering that no motive to fabricate a lie could be attributed to the
Guess employees, the court held that when they demanded payment from respondent,
they merely exercised a right under the honest belief that no payment was made. The
RTC likewise did not find it damaging for respondent when the confrontation took place
in front of Cebu Pacific clients, because it was respondent herself who put herself in
that situation by choosing the venue for discussion. As to the letter sent to Cebu Pacific
Air, the trial court also did not take it against the Guess employees, because they
merely asked for assistance and not to embarrass or humiliate respondent. In other
words, the RTC found no evidence to prove bad faith on the part of the Guess
employees to warrant the award of damages.23
On appeal, the CA reversed and set aside the RTC decision, the dispositive portion of
which reads:
WHEREFORE, the instant appeal is GRANTED. The decision of the Regional Trial
Court of Cebu City, Branch 58, in Civil Case No. CEB-26984 (for: Damages) is hereby
REVERSED and SET ASIDE. Defendants Michelle Ybañez and California Clothing,
Inc. are hereby ordered to pay plaintiff-appellant Shirley G. Quiñones jointly and
solidarily moral damages in the amount of Fifty Thousand Pesos (₱50,000.00) and
attorney’s fees in the amount of Twenty Thousand Pesos (₱20,000.00).
SO ORDERED.24
While agreeing with the trial court that the Guess employees were in good faith
when they confronted respondent inside the Cebu Pacific Office about the
alleged non-payment, the CA, however, found preponderance of evidence
showing that they acted in bad faith in sending the demand letter to
respondent’s employer. It found respondent’s possession of both the official
receipt and the subject black jeans as evidence of payment. 25 Contrary to the
findings of the RTC, the CA opined that the letter addressed to Cebu Pacific’s
director was sent to respondent’s employer not merely to ask for assistance
for the collection of the disputed payment but to subject her to ridicule,
humiliation and similar injury such that she would be pressured to
pay.26 Considering that Guess already started its investigation on the incident,
there was a taint of bad faith and malice when it dragged respondent’s
employer who was not privy to the transaction. This is especially true in this
case since the purported letter contained not only a narrative of the incident
but accusations as to the alleged acts of respondent in trying to evade
payment.27 The appellate court thus held that petitioners are guilty of abuse of
right entitling respondent to collect moral damages and attorney’s fees.
Petitioner California Clothing Inc. was made liable for its failure to exercise
extraordinary diligence in the hiring and selection of its employees; while
Ybañez’s liability stemmed from her act of signing the demand letter sent to
respondent’s employer. In view of Hawayon and Villagonzalo’s good faith,
however, they were exonerated from liability.28
Ybañez moved for the reconsideration29 of the aforesaid decision, but the
same was denied in the assailed November 14, 2006 CA Resolution.
Petitioners now come before the Court in this petition for review on certiorari
under Rule 45 of the Rules of Court based on the following grounds:
I. THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE
LETTER SENT TO THE CEBU PACIFIC OFFICE WAS MADE TO SUBJECT
HEREIN RESPONDENT TO RIDICULE, HUMILIATION AND SIMILAR
INJURY.
II. THE HONORABLE COURT OF APPEALS ERRED IN AWARDING MORAL
DAMAGES AND ATTORNEY’S FEES.30
The petition is without merit.
Respondent’s complaint against petitioners stemmed from the principle of
abuse of rights provided for in the Civil Code on the chapter of human relations.
Respondent cried foul when petitioners allegedly embarrassed her when they
insisted that she did not pay for the black jeans she purchased from their shop
despite the evidence of payment which is the official receipt issued by the
shop. The issuance of the receipt notwithstanding, petitioners had the right to
verify from respondent whether she indeed made payment if they had reason
to believe that she did not. However, the exercise of such right is not without
limitations. Any abuse in the exercise of such right and in the performance of
duty causing damage or injury to another is actionable under the Civil Code.
The Court’s pronouncement in Carpio v. Valmonte31 is noteworthy:
In the sphere of our law on human relations, the victim of a wrongful act or
omission, whether done willfully or negligently, is not left without any remedy
or recourse to obtain relief for the damage or injury he sustained. Incorporated
into our civil law are not only principles of equity but also universal moral
precepts which are designed to indicate certain norms that spring from the
fountain of good conscience and which are meant to serve as guides for
human conduct. First of these fundamental precepts is the principle commonly
known as "abuse of rights" under Article 19 of the Civil Code. It provides that "
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."x x x32 The elements of abuse of rights are as follows: (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.33
In this case, petitioners claimed that there was a miscommunication between
the cashier and the invoicer leading to the erroneous issuance of the receipt
to respondent. When they realized the mistake, they made a cash count and
discovered that the amount which is equivalent to the price of the black jeans
was missing. They, thus, concluded that it was respondent who failed to make
such payment. It was, therefore, within their right to verify from respondent
whether she indeed paid or not and collect from her if she did not. However,
the question now is whether such right was exercised in good faith or they
went overboard giving respondent a cause of action against them.
Under the abuse of rights principle found in Article 19 of the Civil Code, a
person must, in the exercise of legal right or duty, act in good faith. He would
be liable if he instead acted in bad faith, with intent to prejudice
another.34 Good faith refers to the state of mind which is manifested by the
acts of the individual concerned. It consists of the intention to abstain from
taking an unconscionable and unscrupulous advantage of another. 35 Malice or
bad faith, on the other hand, implies a conscious and intentional design to do
a wrongful act for a dishonest purpose or moral obliquity. 36
Initially, there was nothing wrong with petitioners asking respondent whether
she paid or not. The Guess employees were able to talk to respondent at the
Cebu Pacific Office. The confrontation started well, but it eventually turned
sour when voices were raised by both parties. As aptly held by both the RTC
and the CA, such was the natural consequence of two parties with conflicting
views insisting on their respective beliefs. Considering, however, that
respondent was in possession of the item purchased from the shop, together
with the official receipt of payment issued by petitioners, the latter cannot insist
that no such payment was made on the basis of a mere speculation. Their
claim should have been proven by substantial evidence in the proper forum.
It is evident from the circumstances of the case that petitioners went overboard
and tried to force respondent to pay the amount they were demanding. In the
guise of asking for assistance, petitioners even sent a demand letter to
respondent’s employer not only informing it of the incident but obviously
imputing bad acts on the part of respondent.1âwphi1 Petitioners claimed that
after receiving the receipt of payment and the item purchased, respondent
"was noted to hurriedly left (sic) the store." They also accused respondent that
she was not completely being honest when she was asked about the
circumstances of payment, thus:
x x x After receiving the OR and the item, Ms. Gutierrez was noted to hurriedly
left (sic) the store. x x x
When I asked her about to whom she gave the money, she gave out a blank
expression and told me, "I can’t remember." Then I asked her how much
money she gave, she answered, "₱2,100; 2 pcs 1,000 and 1 pc 100 bill." Then
I told her that that would (sic) impossible since we have no such denomination
in our cash fund at that moment. Finally, I asked her if how much change and
if she received change from the cashier, she then answered, "I don’t
remember." After asking these simple questions, I am very certain that she is
not completely being honest about this. In fact, we invited her to come to our
boutique to clear these matters but she vehemently refused saying that she’s
in a hurry and very busy.37
Clearly, these statements are outrightly accusatory. Petitioners accused
respondent that not only did she fail to pay for the jeans she purchased but
that she deliberately took the same without paying for it and later hurriedly left
the shop to evade payment. These accusations were made despite the
issuance of the receipt of payment and the release of the item purchased.
There was, likewise, no showing that respondent had the intention to evade
payment. Contrary to petitioners’ claim, respondent was not in a rush in leaving
the shop or the mall. This is evidenced by the fact that the Guess employees
did not have a hard time looking for her when they realized the supposed non-
payment.
It can be inferred from the foregoing that in sending the demand letter to
respondent’s employer, petitioners intended not only to ask for assistance in
collecting the disputed amount but to tarnish respondent’s reputation in the
eyes of her employer. To malign respondent without substantial evidence and
despite the latter’s possession of enough evidence in her favor, is clearly
impermissible. A person should not use his right unjustly or contrary to honesty
and good faith, otherwise, he opens himself to liability. 38
The exercise of a right must be in accordance with the purpose for which it
was established and must not be excessive or unduly harsh.39 In this case,
petitioners obviously abused their rights.
Complementing the principle of abuse of rights are the provisions of Articles
20 and 2 of the Civil Code which read:40
Article 20. Every person who, contrary to law, willfully or negligently causes
damage to another, shall indemnify the latter for the same.
Article 21. Any person who willfully causes loss or injury to another in a manner
that is contrary to morals or good customs, or public policy shall compensate
the latter for the damage.
In view of the foregoing, respondent is entitled to an award of moral damages
and attorney s fees. Moral damages may be awarded whenever the defendant
s wrongful act or omission is the proximate cause of the plaintiffs physical
suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation and similar injury in the
cases specified or analogous to those provided in Article 2219 of the Civil
Code.41 Moral damages are not a bonanza. They are given to ease the
defendant s grief and suffering. They should, thus, reasonably approximate
the extent of hurt caused and the gravity of the wrong done. 42 They are
awarded not to enrich the complainant but to enable the latter to obtain means,
diversions, or amusements that will serve to alleviate the moral suffering he
has undergone.43 We find that the amount of ₱50,000.00 as moral damages
awarded by the CA is reasonable under the circumstances. Considering that
respondent was compelled to litigate to protect her interest, attorney s fees in
the amount of of₱20,000.00 is likewise just and proper.
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
The Court of Appeals Decision dated August 3, 2006 and Resolution dated
November 14, 2006 in CA-G.R. CV No. 80309, are AFFIRMED.
SO ORDERED.
G.R. No. 138964 August 9, 2001
VICENTE RELLOSA, CYNTHIA ORTEGA assisted by husband Roberto
Ortega, petitioner, vs. GONZALO PELLOSIS, INESITA MOSTE, and
DANILO RADAM, respondents.
VITUG, J.:
"Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good
faith." 1 This provision in our law is not just a declaration of principle for it can
in itself constitute, when unduly ignored or violated, a valid source of a cause
of action or defense.
The case seeks to reverse the Court of Appeals in not countenancing an
attempt to abridge and render inutile a legal right to contest an adverse ruling
of an agency of government.
Respondents were lessees of a parcel of land, owned by one Marta Reyes,
located at San Pascual Street, Malate, Manila. Respondents had built their
houses on the land which, over the years, underwent continuous
improvements. After the demise of Marta, the land was inherited by her son
Victor Reyes. Sometime in 1986, Victor informed respondents that, for being
lessees of the land for more than twenty (20) years, they would have a right of
first refusal to buy the land. Sometime in the early part of 1989, without the
knowledge of respondents, the land occupied by them was sold to petitioner
Cynthia Ortega who was able to ultimately secure title to the property in her
name.
On 25 May 1989, Cynthia Ortega, filed a petition for condemnation, docketed
Condemnation Case No. 89-05-007, with the Office of the Building Official, City
of Manila, of the structures on the land.
On 31 May 1989, respondents filed with the Regional Trial Court of Manila a
suit for the "Declaration of Nullity of the Sale," docketed as Civil Case No. 89-
49176, made in favor of petitioner Cynthia Ortega predicated upon their right
of first refusal which was claimed to have been impinged upon the sale of the
land to petitioner Ortega without their knowledge.
After due hearing in the condemnation case, the Office of the Building Official
issued a resolution, dated 27 November 1989, ordering the demolition of the
houses of respondents. Copies of the resolution were served upon
respondents and their counsel on 07 December 1989. The following day, or
on 08 December 1989, Cynthia Ortega, together with her father and co-
petitioner, Vicente Rellosa, hired workers to commence the demolition of
respondents' houses. Due to the timely intervention of a mobile unit of the
Western Police District, the intended demolition did not take place following
talks between petitioner Rellosa and counsel who pleaded that the demolition
be suspended since the order sought to be implemented was not yet final and
executory. On 11 December 1989, respondents filed their appeal contesting
the order of the Office of the Building Official. On 12 December 1989,
petitioners once again hired workers and proceeded with the demolition of
respondents' houses.
Resultantly, respondents filed Civil Case No. 89-49176 before the Regional
Trial Court of Manila, Branch 54, praying that petitioners be ordered to pay
moral and exemplary damages, as well as attorney's fee, for the untimely
demolition of the houses. After trial, the court dismissed the complaint of
respondents and instead ordered them to pay petitioners moral damages. On
appeal, the Court of Appeals, on the basis of its findings and conclusions,
reversed the decision of the trial court and ordered petitioners to pay
respondents the following sums:
"1) Seventy Five Thousand Pesos (P75,000.00), or Twenty Five
Thousand Pesos (P25,000.00) for each appellant, by way of moral
damages;"
"2) Seventy Five Thousand Pesos (P75,000.00), or Twenty Five
thousand Pesos (P25,000.00) for each appellant, by way of exemplary
damages;"
"3) Fifteen Thousand Pesos (P15,000.00) as and for attorney's fees;
and
"4) The costs of suit."2
The appellate court ruled:
"Thus, by the clear provisions of paragraph 23 of the Implementing
Rules and Regulations of PD 1096 (otherwise known as the Building
Code), above, appellants, being the parties adversely affected by the
November 27, 1989 Resolution of the Office of the Building Official,
had fifteen (15) days from receipt of a copy of the same within which
to perfect an administrative appeal. Thus, since appellants received a
copy of the Resolution on December 7, 1989, they had until December
22, 1989 within which to perfect an administrative appeal and until
such time, the said Resolution was not yet final and executory."
xxx xxx xxx
 "It cannot be denied, therefore, that when appellees commenced to
demolish appellants' houses as early as December 8, 1989 and
eventually on December 12, 1989, neither the Resolution of the
Building Official nor the Demolition Order itself were final and
executory."3
The Court, however, finds the award of P75,000.00 exemplary damages and
another of P75,000.00 moral damages for each respondent to be rather
excessive given the circumstances; the awards must be reduced to the
reasonable amounts of P20,000.00 exemplary damages and P20,000.00
moral damages.

Petitioners filed the instant petition contending that the appellate court gravely
erred in ruling that the premature demolition of respondents' houses entitled
them to the award of damages. Petitioners pointed out that the order of the
Office of the Building Official was eventually upheld on appeal by the
Department of Public Works and Highways in its decision of 14 March 1990.
Furthermore, petitioners added, the structures subject matter of the demolition
order were declared to be dangerous structures by the Office of the Building
Official and, as such, could be abated to avoid danger to the public.
WHEREFORE, the assailed decision of the Court of Appeals is MODIFIED by
reducing the awards of P75,000.00 exemplary damages and of P75,000.00
moral damages to each respondent reduced to P20,000.00 exemplary
damages and P20,000.00 moral damages for each respondent. In all other
respects, the decision of the appellate court is AFFIRMED. No costs.
SO ORDERED.

The Court rules for affirmance of the assailed decision.

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

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

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

At the time petitioners implemented the order of demolition, barely five days
after respondents received a copy thereof, the same was not yet final and
executory. The law provided for a fifteen-day appeal period in favor of a party
aggrieved by an adverse ruling of the Office of the Building Official but by the
precipitate action of petitioners in demolishing the houses of respondents (prior
to the expiration of the period to appeal), the latter were effectively deprived of
this recourse. The fact that the order of demolition was later affirmed by the
Department of Public Works and Highways was of no moment. The action of
petitioners up to the point where they were able to secure an order of
demolition was not condemnable but implementing the order unmindful of the
right of respondents to contest the ruling was a different matter and could only
be held utterly indefensible.
G.R. No. 126204 November 20, 2001
NATIONAL POWER CORPORATION, petitioner, vs. PHILIPP BROTHERS
OCEANIC, INC., respondent.
SANDOVAL-GUTIERREZ, J.:
Where a person merely uses a right pertaining to him, without bad faith or
intent to injure, the fact that damages are thereby suffered by another will not
make him liable.1
This principle finds useful application to the present case.
Before us is a petition for review of the Decision2 dated August 27, 1996 of the
Court of Appeals affirming in toto the Decision3 dated January 16, 1992 of the
Regional Trial Court, Branch 57, Makati City.
The facts are:
On May 14, 1987, the National Power Corporation (NAPOCOR) issued
invitations to bid for the supply and delivery of 120,000 metric tons of imported
coal for its Batangas Coal-Fired Thermal Power Plant in Calaca, Batangas.
The Philipp Brothers Oceanic, Inc. (PHIBRO) prequalified and was allowed to
participate as one of the bidders. After the public bidding was conducted,
PHIBRO's bid was accepted. NAPOCOR's acceptance was conveyed in a
letter dated July 8, 1987, which was received by PHIBRO on July 15, 1987.The
"Bidding Terms and Specifications"4provide for the manner of shipment of
coals, thus:
"SECTION V
SHIPMENT
The winning TENDERER who then becomes the SELLER shall
arrange and provide gearless bulk carrier for the shipment of coal to
arrive at discharging port on or before thirty (30) calendar days after
receipt of the Letter of Credit by the SELLER or its nominee as per
Section XIV hereof to meet the vessel arrival schedules at Calaca,
Batangas, Philippines as follows:
60,000 +/ - 10 % July 20, 1987
60,000 +/ - 10% September 4, 1987"5
On July 10, 1987, PHIBRO sent word to NAPOCOR that industrial disputes
might soon plague Australia, the shipment's point of origin, which could
seriously hamper PHIBRO's ability to supply the needed coal. 6 From July 23
to July 31, 1987, PHIBRO again apprised NAPOCOR of the situation in
Australia, particularly informing the latter that the ship owners therein are not
willing to load cargo unless a "strike-free" clause is incorporated in the charter
party or the contract of carriage.7 In order to hasten the transfer of coal,
PHIBRO proposed to NAPOCOR that they equally share the burden of a
"strike-free" clause. NAPOCOR refused.
On August 6, 1987, PHIBRO received from NAPOCOR a confirmed and
workable letter of credit. Instead of delivering the coal on or before the thirtieth
day after receipt of the Letter of Credit, as agreed upon by the parties in the
July contract, PHIBRO effected its first shipment only on November 17, 1987.
Consequently, in October 1987, NAPOCOR once more advertised for the
delivery of coal to its Calaca thermal plant. PHIBRO participated anew in this
subsequent bidding. On November 24, 1987, NAPOCOR disapproved
PHIBRO's application for pre-qualification to bid for not meeting the minimum
requirements.8 Upon further inquiry, PHIBRO found that the real reason for the
disapproval was its purported failure to satisfy NAPOCOR's demand for
damages due to the delay in the delivery of the first coal shipment.
This prompted PHIBRO to file an action for damages with application for
injunction against NAPOCOR with the Regional Trial Court, Branch 57, Makati
City.9 In its complaint, PHIBRO alleged that NAPOCOR's act of disqualifying it
in the October 1987 bidding and in all subsequent biddings was tainted with
malice and bad faith. PHIBRO prayed for actual, moral and exemplary
damages and attorney's fees.
In its answer, NAPOCOR averred that the strikes in Australia could not be
invoked as reason for the delay in the delivery of coal because PHIBRO itself
admitted that as of July 28, 1987 those strikes had already ceased. And, even
assuming that the strikes were still ongoing, PHIBRO should have shouldered
the burden of a "strike-free" clause because their contract was "C and F
Calaca, Batangas, Philippines," meaning, the cost and freight from the point of
origin until the point of destination would be for the account of PHIBRO.
Furthermore, NAPOCOR claimed that due to PHIBRO's failure to deliver the
coal on time, it was compelled to purchase coal from ASEA at a higher price.
NAPOCOR claimed for actual damages in the amount of P12,436,185.73,
representing the increase in the price of coal, and a claim of P500,000.00 as
litigation expenses.10
Thereafter, trial on the merits ensued.
On January 16, 1992, the trial court rendered a decision in favor of PHIBRO,
the dispositive portion of which reads:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff
Philipp Brothers Oceanic Inc. (PHIBRO) and against the defendant
National Power Corporation (NAPOCOR) ordering the said defendant
NAPOCOR:
1. To reinstate Philipp Brothers Oceanic, Inc. (PHIBRO) in the
defendant National Power Corporation's list of accredited bidders and
allow PHIBRO to participate in any and all future tenders of National
Power Corporation for the supply and delivery of imported steam coal;
2. To pay Philipp Brothers Oceanic, Inc. (PHIBRO);
a. The peso equivalent at the time of payment of $864,000 as
actual damages,
b. The peso equivalent at the time of payment of $100,000 as
moral damages;
c. The peso equivalent at the time of payment of $50,000 as
exemplary damages;
d. The peso equivalent at the time of payment of $73,231.91
as reimbursement for expenses, cost of litigation and
attorney's fees;
3. To pay the costs of suit;
4. The counterclaims of defendant NAPOCOR are dismissed for lack
of merit.
SO ORDERED."11
Unsatisfied, NAPOCOR, through the Solicitor General, elevated the case to
the Court of Appeals. On August 27, 1996, the Court of Appeals rendered a
Decision affirming in toto the Decision of the Regional Trial Court. It
ratiocinated that:
"There is ample evidence to show that although PHIBRO's delivery of
the shipment of coal was delayed, the delay was in fact caused by a)
Napocor's own delay in opening a workable letter of credit; and b) the
strikes which plaqued the Australian coal industry from the first week
of July to the third week of September 1987. Strikes are included in
the definition of force majeure in Section XVII of the Bidding Terms
and Specifications, (supra), so Phibro is not liable for any delay
caused thereby.
Phibro was informed of the acceptance of its bid on July 8, 1987.
Delivery of coal was to be effected thirty (30) days from Napocor's
opening of a confirmed and workable letter of credit. Napocor was only
able to do so on August 6, 1987.
By that time, Australia's coal industry was in the middle of a seething
controversy and unrest, occasioned by strikes, overtime bans, mine
stoppages. The origin, the scope and the effects of this industrial
unrest are lucidly described in the uncontroverted testimony of James
Archibald, an employee of Phibro and member of the Export
Committee of the Australian Coal Association during the time these
events transpired.
xxx xxx xxx
The records also attest that Phibro periodically informed Napocor of
these developments as early as July 1, 1987, even before the bid was
approved. Yet, Napocor did not forthwith open the letter of credit in
order to avoid delay which might be caused by the strikes and their
after-effects.
"Strikes" are undoubtedly included in the force majeure clause of the
Bidding Terms and Specifications (supra). The renowned civilist, Prof.
Arturo Tolentino, defines force majeure as "an event which takes
place by accident and could not have been foreseen." (Civil Code of
the Philippines, Volume IV, Obligations and Contracts, 126, [1991]) He
further states:
"Fortuitous events may be produced by two general causes:
(1) by Nature, such as earthquakes, storms, floods,
epidemics, fires, etc., and (2) by the act of man, such as an
armed invasion, attack by bandits, governmental prohibitions,
robbery, etc."
Tolentino adds that the term generally applies, broadly speaking, to
natural accidents. In order that acts of man such as a strike, may
constitute fortuitous event, it is necessary that they have the force of
an imposition which the debtor could not have resisted. He cites a
parallel example in the case of Philippine National Bank v. Court of
Appeals, 94 SCRA 357 (1979), wherein the Supreme Court said that
 the outbreak of war which prevents performance exempts a party from
liability.
Hence, by law and by stipulation of the parties, the strikes which took
place in Australia from the first week of July to the third week of
September, 1987, exempted Phibro from the effects of delay of the
delivery of the shipment of coal."12
Twice thwarted, NAPOCOR comes to us via a petition for review ascribing to
the Court of Appeals the following errors:
I. "Respondent Court of Appeals gravely and seriously erred in
concluding and so holding that PHIBRO's delay in the delivery of
imported coal was due to NAPOCOR's alleged delay in opening a
letter of credit and to force majeure, and not to PHIBRO's own
deliberate acts and faults."13
II. "Respondent Court of Appeals gravely and seriously erred in
concluding and so holding that NAPOCOR acted maliciously and
unjustifiably in disqualifying PHIBRO from participating in the
December 8, 1987 and future biddings for the supply of imported
coal despite the existence of valid grounds therefor such as
serious impairment of its track record."14
III. Respondent Court of Appeals gravely and seriously erred in
concluding and so holding that PHIBRO was entitled to injunctive
relief, to actual or compensatory, moral and exemplary damages,
attorney's fees and litigation expenses despite the clear absence
of legal and factual bases for such award."15
IV. "Respondent Court of Appeals gravely and seriously erred in
absolving PHIBRO from any liability for damages to NAPOCOR
for its unjustified and deliberate refusal and/or failure to deliver the
contracted imported coal within the stipulated period."16
V. "Respondent Court of Appeals gravely and seriously erred in
dismissing NAPOCOR's counterclaims for damages and litigation
expenses."17
It is axiomatic that only questions of law, not questions of fact, may be raised
before this Court in a petition for review under Rule 45 of the Rules of
Court.18 The findings of facts of the Court of Appeals are conclusive and
binding on this Court19 and they carry even more weight when the said court
affirms the factual findings of the trial court.20 Stated differently, the findings of
the Court of .Appeals, by itself, which are supported by substantial evidence,
are almost beyond the power of review by this Court.21
With the foregoing settled jurisprudence, we find it pointless to delve lengthily
on the factual issues raised by petitioner. The existence of strikes in Australia
having been duly established in the lower courts, we are left only with the
burden of determining whether or not NAPOCOR acted wrongfully or with bad
faith in disqualifying PHIBRO from participating in the subsequent public
bidding.
Let us consider the case in its proper perspective.
The Court of Appeals is justified in sustaining the Regional Trial Court's
decision exonerating PHIBRO from any liability for damages to NAPOCOR as
it was clearly established from the evidence, testimonial and documentary, that
what prevented PHIBRO from complying with its obligation under the July 1987
contract was the industrial disputes which besieged Australia during that time.
Extant in our Civil Code is the rule that no person shall be responsible for those
events which could not be foreseen, or which, though foreseen, were
inevitable.22 This means that when an obligor is unable to fulfill his obligation
because of a fortuitous event or force majeure, he cannot be held liable for
damages for non-performance.23
In addition to the above legal precept, it is worthy to note that PHIBRO and
NAPOCOR explicitly agreed in Section XVII of the "Bidding Terms and
Specifications"24 that "neither seller (PHIBRO) nor buyer (NAPOCOR) shall be
liable for any delay in or failure of the performance of its obligations, other than
the payment of money due, if any such delay or failure is due to
Force Majeure." Specifically, they defined force majeure as "any disabling
cause beyond the control of and without fault or negligence of the party, which
causes may include but are not restricted to Acts of God or of the public enemy;
acts of the Government in either its sovereign or contractual capacity;
governmental restrictions; strikes, fires, floods, wars, typhoons, storms,
epidemics and quarantine restrictions."
The law is clear and so is the contract between NAPOCOR and PHIBRO.
Therefore, we have no reason to rule otherwise.
However, proceeding from the premise that PHIBRO was prevented by
force majeure from complying with its obligation, does it necessarily follow that
NAPOCOR acted unjustly, capriciously, and unfairly in disapproving PHIBRO's
application for pre-qualification to bid?
First, it must be stressed that NAPOCOR was not bound under any contract
to approve PHIBRO's pre-qualification requirements. In fact, NAPOCOR had
expressly reserved its right to reject bids. The Instruction to Bidders found in
the "Post-Qualification Documents/Specifications for the Supply and Delivery
of Coal for the Batangas Coal-Fired Thermal Power Plant I at Calaca,
Batangas Philippines,"25 is explicit, thus:
 "IB-17 RESERVATION OF NAPOCOR TO REJECT BIDS
NAPOCOR reserves the right to reject any or all bids, to waive any
minor informality in the bids received. The right is also reserved to
reject the bids of any bidder who has previously failed to properly
perform or complete on time any and all contracts for delivery of coal
or any supply undertaken by a bidder."26(Emphasis supplied)
This Court has held that where the right to reject is so reserved, the lowest bid
or any bid for that matter may be rejected on a mere technicality.27 And where
the government as advertiser, availing itself of that right, makes its choice in
rejecting any or all bids, the losing bidder has no cause to complain nor right
to dispute that choice unless an unfairness or injustice is shown. Accordingly,
a bidder has no ground of action to compel the Government to award the
contract in his favor, nor to compel it to accept his bid. Even the lowest bid or
any bid may be rejected.28In Celeste v. Court of Appeals,29 we had the
occasion to rule:
"Moreover, paragraph 15 of the Instructions to Bidders states that 'the
Government hereby reserves the right to reject any or all bids
submitted.' In the case of A.C. Esguerra and Sons v. Aytona, 4 SCRA
1245, 1249 (1962), we held:
'x x x [I]n the invitation to bid, there is a condition imposed
upon the bidders to the effect that the bidders shall be subject
to the right of the government to reject any and all bids subject
to its discretion. Here the government has made its choice,
and unless an unfairness or injustice is shown, the losing
bidders have no cause to complain, nor right to dispute that
choice.'
Since there is no evidence to prove bad faith and arbitrariness on the
part of the petitioners in evaluating the bids, we rule that the private
respondents are not entitled to damages representing lost profits."
(Emphasis supplied)
Verily, a reservation of the government of its right to reject any bid, generally
vests in the authorities a wide discretion as to who is the best and most
advantageous bidder. The exercise of such discretion involves inquiry,
investigation, comparison, deliberation and decision, which are quasi-judicial
functions, and when honestly exercised, may not be reviewed by the
court.30 In Bureau Veritas v. Office of the President,31 we decreed:
"The discretion to accept or reject a bid and award contracts is vested
in the Government agencies entrusted with that function. The
discretion given to the authorities on this matter is of such wide latitude
that the Courts will not interfere therewith, unless it is apparent that it
is used as a shield to a fraudulent award. (Jalandoni v. NARRA, 108
Phil. 486 [1960]) x x x. The exercise of this discretion is a policy
decision that necessitates prior inquiry, investigation, comparison,
evaluation, and deliberation. This task can best be discharged by the
Government agencies concerned, not by the Courts. The role of the
Courts is to ascertain whether a branch or instrumentality of the
Government has transgresses its constitutional boundaries. But the
Courts will not interfere with executive or legislative discretion
exercised within those boundaries. Otherwise, it strays into the realm
of policy decision-making. x x x." (Emphasis supplied)
Owing to the discretionary character of the right involved in this case, the
propriety of NAPOCOR's act should therefore be judged on the basis of the
general principles regulating human relations, the forefront provision of which
is Article 19 of the Civil Code which provides that "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." 32Accordingly, a
person will be protected only when he acts in the legitimate exercise of his
right, that is, when he acts with prudence and in good faith; but not when he
acts with negligence or abuse.33
Did NAPOCOR abuse its right or act unjustly in disqualifying PHIBRO from the
public bidding?
We rule in the negative.
In practice, courts, in the sound exercise of their discretion, will have to
determine under all the facts and circumstances when the exercise of a right
is unjust, or when there has been an abuse of right.34
We went over the record of the case with painstaking solicitude and we are
convinced that NAPOCOR's act of disapproving PHIBRO's application for pre-
qualification to bid was without any intent to injure or a purposive motive to
perpetrate damage. Apparently, NAPOCOR acted on the strong conviction
that PHIBRO had a "seriously-impaired" track record. NAPOCOR cannot be
faulted from believing so. At this juncture, it is worth mentioning that at the time
NAPOCOR issued its subsequent Invitation to Bid, i.e., October 1987,
PHIBRO had not yet delivered the first shipment of coal under the July 1987
contract, which was due on or before September 5, 1987. Naturally,
NAPOCOR is justified in entertaining doubts on PHIBRO's qualification or
capability to assume an obligation under a new contract.
Moreover, PHIBRO's actuation in 1987 raised doubts as to the real situation
of the coal industry in Australia. It appears from the records that when
NAPOCOR was constrained to consider an offer from another coal supplier
(ASEA) at a price of US$33.44 per metric ton, PHIBRO unexpectedly offered
the immediate delivery of 60,000 metric tons of Ulan steam coal at US$31.00
per metric ton for arrival at Calaca, Batangas on September 20-21, 1987."35 Of
course, NAPOCOR had reason to ponder — how come PHIBRO could assure
the immediate delivery of 60,000 metric tons of coal from the same source to
arrive at Calaca not later than September 20/21, 1987 but it could not deliver
the coal it had undertaken under its contract?
Significantly, one characteristic of a fortuitous event, in a legal sense, and
consequently in relations to contracts, is that "the concurrence must be such
as to render it impossible for the debtor to fulfill his obligation in a normal
manner."36 Faced with the above circumstance, NAPOCOR is justified in
assuming that, may be, there was really no fortuitous event or
force majeure which could render it impossible for PHIBRO to effect the
delivery of coal. Correspondingly, it is also justified in treating PHIBRO's failure
to deliver a serious impairment of its track record. That the trial court,
thereafter, found PHIBRO's unexpected offer actually a result of its desire to
minimize losses on the part of NAPOCOR is inconsequential. In determining
the existence of good faith, the yardstick is the frame of mind of the actor at
the time he committed the act, disregarding actualities or facts outside his
knowledge. We cannot fault NAPOCOR if it mistook PHIBRO's unexpected
offer a mere attempt on the latter's part to undercut ASEA or an indication of
PHIBRO's inconsistency. The circumstances warrant such contemplation.
That NAPOCOR believed all along that PHIBRO's failure to deliver on time
was unfounded is manifest from its letters37 reminding PHIBRO that it was
bound to deliver the coal within 30 days from its (PHIBRO's) receipt of the
Letter of Credit, otherwise it would be constrained to take legal action. The
same honest belief can be deduced from NAPOCOR's Board Resolution, thus:
"On the legal aspect, Management stressed that failure of PBO to
deliver under the contract makes them liable for damages, considering
that the reasons invoked were not valid. The measure of the damages
will be limited to actual and compensatory damages. However, it was
reported that Philipp Brothers advised they would like to have
continuous business relation with NPC so they are willing to sit down
or even proposed that the case be submitted to the Department of
Justice as to avoid a court action or arbitration.
xxx xxx xxx
On the technical-economic aspect, Management claims that if PBO
delivers in November 1987 and January 1988, there are some
advantages. If PBO reacts to any legal action and fails to deliver, the
options are: one, to use 100% Semirara and second, to go into urgent
coal order. The first option will result in a 75 MW derating and oil will
be needed as supplement. We will stand to lose around P30 M. On
the other hand, if NPC goes into an urgent coal order, there will be an
additional expense of $786,000 or P16.11 M, considering the price of
the latest purchase with ASEA. On both points, reliability is
decreased."38
The very purpose of requiring a bidder to furnish the awarding authority its pre-
qualification documents is to ensure that only those "responsible" and
"qualified" bidders could bid and be awarded with government contracts. It
bears stressing that the award of a contract is measured not solely by the
smallest amount of bid for its performance, but also by the "responsibility" of
the bidder. Consequently, the integrity, honesty, and trustworthiness of the
bidder is to be considered. An awarding official is justified in considering a
bidder not qualified or not responsible if he has previously defrauded the public
in such contracts or if, on the evidence before him, the official bona fide
believes the bidder has committed such fraud, despite the fact that there is yet
no judicial determination to that effect.39Otherwise stated, if the awarding body
bona fide believes that a bidder has seriously impaired its track record because
of a particular conduct, it is justified in disqualifying the bidder. This policy is
necessary to protect the interest of the awarding body against irresponsible
bidders.
Thus, one who acted pursuant to the sincere belief that another willfully
committed an act prejudicial to the interest of the government cannot be
considered to have acted in bad faith. Bad faith has always been a question of
intention. It is that corrupt motive that operates in the mind. As understood in
law, it contemplates a state of mind affirmatively operating with furtive design
or with some motive of self-interest or ill-will or for ulterior purpose.40While
confined in the realm of thought, its presence may be ascertained through the
party's actuation or through circumstantial evidence.41 The circumstances
under which NAPOCOR disapproved PHIBRO's pre-qualification to bid do not
show an intention to cause damage to the latter. The measure it adopted was
one of self-protection. Consequently, we cannot penalize NAPOCOR for the
course of action it took. NAPOCOR cannot be made liable for actual, moral
and exemplary damages.
Corollarily, in awarding to PHIBRO actual damages in the amount of $864,000,
the Regional Trial Court computed what could have been the profits of
PHIBRO had NAPOCOR allowed it to participate in the subsequent public
bidding. It ruled that "PHIBRO would have won the tenders for the supply of
about 960,000 metric tons out of at least 1,200,000 metric tons" from the public
bidding of December 1987 to 1990. We quote the trial court's ruling, thus:
". . . PHIBRO was unjustly excluded from participating in at least five
(5) tenders beginning December 1987 to 1990, for the supply and
delivery of imported coal with a total volume of about 1,200,000 metric
tons valued at no less than US$32 Million. (Exhs. "AA," "AA-1-1," to
"AA-2"). The price of imported coal for delivery in 1988 was quoted in
June 1988 by bidders at US$41.35 to US$43.95 per metric ton (Exh.
"JJ"); in September 1988 at US$41.50 to US$49.50 per metric ton
(Exh. "J-1"); in November 1988 at US$39.00 to US$48.50 per metric
ton (Exh. "J-2") and for the 1989 deliveries, at US$44.35 to US$47.35
per metric ton (Exh. "J-3") and US$38.00 to US$48.25 per metric ton
in September 1990 (Exh. "JJ-6" and "JJ-7"). PHIBRO would have won
the tenders for the supply and delivery of about 960,000 metric tons of
coal out of at least 1,200,000 metric tons awarded during said period
based on its proven track record of 80%. The Court, therefore finds
that as a result of its disqualification, PHIBRO suffered damages
equivalent to its standard 3% margin in 960,000 metric tons of coal at
the most conservative price of US$30,000 per metric ton, or the total
of US$864,000 which PHIBRO would have earned had it been allowed
to participate in biddings in which it was disqualified and in subsequent
tenders for supply and delivery of imported coal."
We find this to be erroneous.
Basic is the rule that to recover actual damages, the amount of loss must not
only be capable of proof but must actually be proven with reasonable degree
of certainty, premised upon competent proof or best evidence obtainable of
the actual amount thereof.42 A court cannot merely rely on speculations,
conjectures, or guesswork as to the fact and amount of damages. Thus, while
indemnification for damages shall comprehend not only the value of the loss
suffered, but also that of the profits which the obligee failed to obtain, 43 it is
imperative that the basis of the alleged unearned profits is not too speculative
and conjectural as to show the actual damages which may be suffered on a
future period.
In Pantranco North Express, Inc. v. Court of Appeals,44 this Court denied the
plaintiff's claim for actual damages which was premised on a contract he was
about to negotiate on the ground that there was still the requisite public bidding
to be complied with, thus:
"As to the alleged contract he was about to negotiate with Minister
Hipolito, there is no showing that the same has been awarded to him.
If Tandoc was about to negotiate a contract with Minister Hipolito,
there was no assurance that the former would get it or that the latter
would award the contract to him since there was the requisite public
bidding. The claimed loss of profit arising out of that alleged contract
which was still to be negotiated is a mere expectancy. Tandoc's claim
that he could have earned P2 million in profits is highly speculative
and no concrete evidence was presented to prove the same. The only
unearned income to which Tandoc is entitled to from the evidence
presented is that for the one-month period, during which his business
was interrupted, which is P6,125.00, considering that his annual net
income was P73,500.00."
In Lufthansa German Airlines v. Court of Appeals,45 this Court likewise
disallowed the trial court's award of actual damages for unrealized profits in
the amount of US$75,000.00 for being highly speculative. It was held that "the
realization of profits by respondent . . . was not a certainty, but depended on a
number of factors, foremost of which was his ability to invite investors and to
win the bid." This Court went further saying that actual or compensatory
damages cannot be presumed, but must be duly proved, and proved with
reasonable degree of certainty.
And in National Power Corporation v. Court of Appeals,46 the Court, in denying
the bidder's claim for unrealized commissions, ruled that even if NAPOCOR
does not deny its (bidder's) claims for unrealized commissions, and that these
claims have been transmuted into judicial admissions, these admissions
cannot prevail over the rules and regulations governing the bidding for
NAPOCOR contracts, which necessarily and inherently include the reservation
by the NAPOCOR of its right to reject any or all bids.
The award of moral damages is likewise improper. To reiterate, NAPOCOR
did not act in bad faith. Moreover, moral damages are not, as a general rule,
granted to a corporation.47 While it is true that besmirched reputation is
included in moral damages, it cannot cause mental anguish to a corporation,
unlike in the case of a natural person, for a corporation has no reputation in
the sense that an individual has, and besides, it is inherently impossible for a
corporation to suffer mental anguish.48 In LBC Express, Inc. v. Court of
Appeals,49 we ruled:
"Moral damages are granted in recompense for physical suffering,
mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury.
A corporation, being an artificial person and having existence only in
legal contemplation, has no feelings, no emotions, no senses;
therefore, it cannot experience physical suffering and mental anguish.
Mental suffering can be experienced only by one having a nervous
system and it flows from real ills, sorrows, and griefs of life — all of
which cannot be suffered by respondent bank as an artificial person."
Neither can we award exemplary damages under Article 2234 of the Civil SO ORDERED.
Code. Before the court may consider the question of whether or not exemplary
damages should be awarded, the plaintiff must show that he is entitled to
moral, temperate, or compensatory damages.

NAPOCOR, in this petition, likewise contests the judgment of the lower courts
awarding PHIBRO the amount of $73,231.91 as reimbursement for expenses,
cost of litigation and attorney's fees.

We agree with NAPOCOR.

This Court has laid down the rule that in the absence of stipulation, a winning
party may be awarded attorney's fees only in case plaintiff's action or
defendant's stand is so untenable as to amount to gross and evident bad
faith.50This cannot be said of the case at bar. NAPOCOR is justified in resisting
PHIBRO's claim for damages. As a matter of fact, we partially grant the prayer
of NAPOCOR as we find that it did not act in bad faith in disapproving
PHIBRO's pre-qualification to bid.

Trial courts must be reminded that attorney's fees may not be awarded to a
party simply because the judgment is favorable to him, for it may amount to
imposing a premium on the right to redress grievances in court. We adopt the
same policy with respect to the expenses of litigation. A winning party may be
entitled to expenses of litigation only where he, by reason of plaintiff's clearly
unjustifiable claims or defendant's unreasonable refusal to his demands, was
compelled to incur said expenditures. Evidently, the facts of this case do not
warrant the granting of such litigation expenses to PHIBRO.

At this point, we believe that, in the interest of fairness, NAPOCOR should give
PHIBRO another opportunity to participate in future public bidding. As earlier
mentioned, the delay on its part was due to a fortuitous event.

But before we dispose of this case, we take this occasion to remind PHIBRO
of the indispensability of coal to a coal-fired thermal plant. With households
and businesses being entirely dependent on the electricity supplied by
NAPOCOR, the delivery of coal cannot be venturesome. Indeed, public
interest demands that one who offers to deliver coal at an appointed time must
give a reasonable assurance that it can carry through. With the deleterious
possible consequences that may result from failure to deliver the needed coal,
we believe there is greater strain of commitment in this kind of obligation.

WHEREFORE, the decision of the Court of Appeals in CA-G.R. CV No.

126204 dated August 27, 1996 is hereby MODIFIED. The award, in favor of
PHIBRO, of actual, moral and exemplary damages, reimbursement for
expenses, cost of litigation and attorney's fees, and costs of suit, is DELETED.
G.R. No. 151866 September 9, 2004
SOLEDAD CARPIO, petitioner, vs. LEONORA A. VALMONTE, respondent.
DECISION
TINGA, J.:
Assailed in the instant petition for review is the Decision of the Court of Appeals in
C.A.-G.R. CV No. 69537,1promulgated on 17 January 2002.2 The appellate court
reversed the trial court’s decision denying respondent’s claim for damages against
petitioner and ordered the latter to pay moral damages to the former in the amount
ofP100,000.00.
Respondent Leonora Valmonte is a wedding coordinator. Michelle del Rosario and
Jon Sierra engaged her services for their church wedding on 10 October 1996. At
about 4:30 p.m. on that day, Valmonte went to the Manila Hotel where the bride
and her family were billeted. When she arrived at Suite 326-A, several persons
were already there including the bride, the bride’s parents and relatives, the make-
up artist and his assistant, the official photographers, and the fashion designer.
Among those present was petitioner Soledad Carpio, an aunt of the bride who was
preparing to dress up for the occasion.
After reporting to the bride, Valmonte went out of the suite carrying the items
needed for the wedding rites and the gifts from the principal sponsors. She
proceeded to the Maynila Restaurant where the reception was to be held. She paid
the suppliers, gave the meal allowance to the band, and went back to the suite.
Upon entering the suite, Valmonte noticed the people staring at her. It was at this
juncture that petitioner allegedly uttered the following words to Valmonte: "Ikaw
lang ang lumabas ng kwarto, nasaan ang dala mong bag? Saan ka pumunta? Ikaw
lang and lumabas ng kwarto, ikaw ang kumuha." Petitioner then ordered one of
the ladies to search Valmonte’s bag. It turned out that after Valmonte left the room
to attend to her duties, petitioner discovered that the pieces of jewelry which she
placed inside the comfort room in a paper bag were lost. The jewelry pieces consist
of two (2) diamond rings, one (1) set of diamond earrings, bracelet and necklace
with a total value of about one million pesos. The hotel security was called in to
help in the search. The bags and personal belongings of all the people inside the
room were searched. Valmonte was allegedly bodily searched, interrogated and
trailed by a security guard throughout the evening. Later, police officers arrived
and interviewed all persons who had access to the suite and fingerprinted them
including Valmonte. During all the time Valmonte was being interrogated by the
police officers, petitioner kept on saying the words "Siya lang ang lumabas ng
kwarto." Valmonte’s car which was parked at the hotel premises was also searched
but the search yielded nothing.
A few days after the incident, petitioner received a letter from Valmonte demanding
a formal letter of apology which she wanted to be circulated to the newlyweds’
relatives and guests to redeem her smeared reputation as a result of petitioner’s
imputations against her. Petitioner did not respond to the letter. Thus, on 20
February 1997, Valmonte filed a suit for damages against her before the Regional
Trial Court (RTC) of Pasig City, Branch 268. In her complaint, Valmonte prayed
that petitioner be ordered to pay actual, moral and exemplary damages, as well as
attorney’s fees.
Responding to the complaint, petitioner denied having uttered words or done any
act to confront or single out Valmonte during the investigation and claimed that
everything that transpired after the theft incident was purely a police matter in
which she had no participation. Petitioner prayed for the dismissal of the complaint
and for the court to adjudge Valmonte liable on her counterclaim.
The trial court rendered its Decision on 21 August 2000, dismissing Valmonte’s
complaint for damages. It ruled that when petitioner sought investigation for the
loss of her jewelry, she was merely exercising her right and if damage results from
a person exercising his legal right, it is damnum absque injuria. It added that no
proof was presented by Valmonte to show that petitioner acted maliciously and in
bad faith in pointing to her as the culprit. The court said that Valmonte failed to
show that she suffered serious anxiety, moral shock, social humiliation, or that her
reputation was besmirched due to petitioner’s wrongful act.
Respondent appealed to the Court of Appeals alleging that the trial court erred in
finding that petitioner did not slander her good name and reputation and in
disregarding the evidence she presented.
The Court of Appeals ruled differently. It opined that Valmonte has clearly
established that she was singled out by petitioner as the one responsible for the
loss of her jewelry. It cited the testimony of Serena Manding, corroborating
Valmonte’s claim that petitioner confronted her and uttered words to the effect that
she was the only one who went out of the room and that she was the one who took
the jewelry. The appellate court held that Valmonte’s claim for damages is not
predicated on the fact that she was subjected to body search and interrogation by
the police but rather petitioner’s act of publicly accusing her of taking the missing
jewelry. It categorized petitioner’s utterance defamatory considering that it imputed
upon Valmonte the crime of theft. The court concluded that petitioner’s verbal
assault upon Valmonte was done with malice and in bad faith since it was made in
the presence of many people without any solid proof except petitioner’s suspicion.
Such unfounded accusation entitles Valmonte to an award of moral damages in
the amount of ₱100,000.00 for she was publicly humiliated, deeply insulted, and
embarrassed. However, the court found no sufficient evidence to justify the award
of actual damages.
Hence, this petition.
Petitioner contends that the appellate court’s conclusion that she publicly
humiliated respondent does not conform to the evidence presented. She adds that
even on the assumption that she uttered the words complained of, it was not shown
that she did so with malice and in bad faith.
In essence, petitioner would want this Court to review the factual conclusions
reached by the appellate court. The cardinal rule adhered to in this jurisdiction is
that a petition for review must raise only questions of law, 3 and judicial review
under Rule 45 does not extend to an evaluation of the sufficiency of evidence
unless there is a showing that the findings complained of are totally devoid of
support in the record or that they are so glaringly erroneous as to constitute serious
abuse of discretion.4 This Court, while not a trier of facts, may review the evidence
in order to arrive at the correct factual conclusion based on the record especially
so when the findings of fact of the Court of Appeals are at variance with those of
the trial court, or when the inference drawn by the Court of Appeals from the facts
is manifestly mistaken.5
Contrary to the trial court’s finding, we find sufficient evidence on record tending to
prove that petitioner’s imputations against respondent was made with malice and
in bad faith.
Petitioner’s testimony was shorn of substance and consists mainly of denials. She
claimed not to have uttered the words imputing the crime of theft to respondent or
to have mentioned the latter’s name to the authorities as the one responsible for
the loss of her jewelry. Well-settled is the rule that denials, if unsubstantiated by
clear and convincing evidence, are negative and self-serving which merit no weight
in law and cannot be given greater evidentiary value over the testimony of credible
witnesses who testify on affirmative matters.6
Respondent, however, has successfully refuted petitioner’s testimony. Quite
credibly, she has narrated in great detail her distressing experience on that fateful
day. She testified as to how rudely she was treated by petitioner right after she
returned to the room. Petitioner immediately confronted her and uttered the words
"Ikaw lang ang lumabas ng kwarto. Nasaan ang dala mong bag? Saan ka
pumunta? Ikaw ang kumuha." Thereafter, her body was searched including her
bag and her car. Worse, during the reception, she was once more asked by the
hotel security to go to the ladies room and she was again bodily searched.7
Sereña Manding, a make-up artist, corroborated respondent’s testimony. She
testified that petitioner confronted respondent in the presence of all the people
inside the suite accusing her of being the only one who went out of the comfort
room before the loss of the jewelry. Manding added that respondent was
embarrassed because everybody else in the room thought she was a thief.8 If only
to debunk petitioner’s assertion that she did not utter the accusatory remarks in
question publicly and with malice, Manding’s testimony on the point deserves to
be reproduced. Thus,
Q After that what did she do?
A Then Leo came out from the other room she said, she is (sic) the one I
only saw from the comfort room.
Q Now, what exact word (sic) were said by Mrs. Carpio on that matter?
A She said "siya lang yung nakita kong galing sa C.R."
Q And who was Mrs. Carpio or the defendant referring to?
A Leo Valmonte.
Q Did she say anything else, the defendant?
A Her jewelry were lost and Leo was the only one she saw in the C.R.
After that she get (sic) the paper bag then the jewelry were already gone.
Q Did she confront the plaintiff Mrs. Valmonte regarding that fact?
A Yes.
Q What did the defendant Mrs. Carpio tell the plaintiff, Mrs. Valmonte?
A "Ikaw yung nakita ko sa C.R. nawawala yung alahas ko."
Q When the defendant Mrs. Carpio said that to plaintiff Mrs. Valmonte
were there other people inside the room?
A Yes, sir.
Q Were they able to hear what Mrs. Carpio said to Mrs. Valmonte?
A Yes, sir.
Q What was your thinking at that time that Mrs. Carpio said that to Mrs.
Valmonte?
A "Nakakahiya kasi akala ng iba doon na talagang magnanakaw siya.
Kasi marami na kaming nandodoon, dumating na yung couturier pati yung
video man and we sir.
Q Who was the person you [were] alleging "na nakakahiya" whose (sic)
being accused or being somebody who stole those item of jewelry?
A "Nakakahiya para kay Leo kasi pinagbibintangan siya. Sa dami namin
doon siya yung napagbintangan."
Q And who is Leo, what is her full name?
A Leo Valmonte.
Q Did the defendant tell this matter to other people inside the room?
A Yes, the mother of the bride.
Q And who else did she talk to?
A The father of the bride also.
Q And what did the defendant tell the mother regarding this matter?
A "Nawawala yung alahas ko." Sabi naman nung mother baka naman
hindi mo dala tignan mo munang mabuti.
Q Who was that other person that she talked to?
A Father of the bride.9
Significantly, petitioner’s counsel elected not to pursue her cross-examination of
the witness on this point following her terse and firm declaration that she
remembered petitioner’s exact defamatory words in answer to the counsel’s
question.10
Jaime Papio, Security Supervisor at Manila Hotel, likewise contradicted petitioner’s
allegation that she did not suspect or mention the name of respondent as her
suspect in the loss of the jewelry.11
To warrant recovery of damages, there must be both a right of action, for a wrong
inflicted by the defendant, and the damage resulting therefrom to the plaintiff.
Wrong without damage, or damage without wrong, does not constitute a cause of
action.12
In the sphere of our law on human relations, the victim of a wrongful act or
omission, whether done willfully or negligently, is not left without any remedy or
recourse to obtain relief for the damage or injury he sustained. Incorporated into
our civil law are not only principles of equity but also universal moral precepts
which are designed to indicate certain norms that spring from the fountain of good
conscience and which are meant to serve as guides for human conduct.13 First of
these fundamental precepts is the principle commonly known as "abuse of rights"
under Article 19 of the Civil Code. It provides that "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." To find the existence of an
abuse of right, the following elements must be present: (1) there is a legal right or
duty; (2) which is exercised in bad faith; (3) for the sole intent or prejudicing or
injuring another.14 When a right is exercised in a manner which discards these
norms resulting in damage to another, a legal wrong is committed for which the
actor can be held accountable.15 One is not allowed to exercise his right in a
manner which would cause unnecessary prejudice to another or if he would
thereby offend morals or good customs. Thus, a person should be protected only
when he acts in the legitimate exercise of his right, that is when he acts with
prudence and good faith; but not when he acts with negligence or abuse.16
Complementing the principle of abuse of rights are the provisions of Articles 20
and 21 of the Civil Code which read, thus:
Art. 20. Every person who, contrary to law, willfully or negligently causes
damage to another, shall indemnify the latter for the same.
Art. 21. Any person who willfully causes loss or injury to another in a
manner that is contrary to morals or good customs or public policy shall
compensate the latter for the damage.
The foregoing rules provide the legal bedrock for the award of damages
to a party who suffers damage whenever one commits an act in violation
of some legal provision, or an act which though not constituting a
transgression of positive law, nevertheless violates certain rudimentary
rights of the party aggrieved.
In the case at bar, petitioner’s verbal reproach against respondent was certainly
uncalled for considering that by her own account nobody knew that she brought
such kind and amount of jewelry inside the paper bag.17 This being the case, she
had no right to attack respondent with her innuendos which were not merely
inquisitive but outrightly accusatory. By openly accusing respondent as the only
person who went out of the room before the loss of the jewelry in the presence of
all the guests therein, and ordering that she be immediately bodily searched,
petitioner virtually branded respondent as the thief. True, petitioner had the right to
ascertain the identity of the malefactor, but to malign respondent without an iota of
proof that she was the one who actually stole the jewelry is an act which, by any
standard or principle of law is impermissible. Petitioner had willfully caused injury
to respondent in a manner which is contrary to morals and good customs. Her
firmness and resolve to find her missing jewelry cannot justify her acts toward
respondent. She did not act with justice and good faith for apparently, she had no
other purpose in mind but to prejudice respondent. Certainly, petitioner
transgressed the provisions of Article 19 in relation to Article 21 for which she
should be held accountable.
Owing to the rule that great weight and even finality is given to factual conclusions
of the Court of Appeals which affirm those of the trial court,18 we sustain the
findings of the trial court and the appellate court that respondent’s claim for actual
damages has not been substantiated with satisfactory evidence during the trial and
must therefore be denied. To be recoverable, actual damages must be duly proved
with reasonable degree of certainty and the courts cannot rely on speculation,
conjecture or guesswork.19
Respondent, however, is clearly entitled to an award of moral damages. Moral
damages may be awarded whenever the defendant’s wrongful act or omission is
the proximate cause of the plaintiff’s physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury20in the cases specified or analogous to those
provided in Article 2219 of the Civil Code.21 Though no proof of pecuniary loss is
necessary in order that moral damages may be adjudicated, courts are mandated
to take into account all the circumstances obtaining in the case and assess
damages according to their discretion.22 Worthy of note is that moral damages are
not awarded to penalize the defendant,23 or to enrich a complainant, but to enable
the latter to obtain means, diversions or amusements that will serve to alleviate the
moral suffering he has undergone, by reason of defendant’s culpable action. In any
case, award of moral damages must be proportionate to the sufferings inflicted. 24
Based on the foregoing jurisprudential pronouncements, we rule that the appellate
court did not err in awarding moral damages. Considering respondent’s social
standing, and the fact that her profession is based primarily on trust reposed in her
by her clients, the seriousness of the imputations made by petitioner has greatly
tarnished her reputation and will in one way or the other, affect her future dealings
with her clients, the award of ₱100,000.00 as moral damages appears to be a fair
and reasonable assessment of respondent’s damages.
WHEREFORE, the instant Petition is DENIED. Costs against petitioner.
SO ORDERED.
G.R. No. 161921 July 17, 2013
JOYCE V. ARDIENTE, PETITIONER, vs. SPOUSES JAVIER AND MA.
THERESA PASTORFIDE, CAGAYAN DE ORO WATER DISTRICT AND
GASPAR GONZALEZ,* JR., RESPONDENTS.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules
of Court seeking to reverse and set aside the Decision 1 and Resolution2 of the
Court of Appeals (CA), dated August 28, 2003 and December 17, 2003,
respectively, in CA-G.R. CV No. 73000. The CA Decision affirmed with
modification the August 15, 2001 Decision3of the Regional Trial Court (RTC)
of Cagayan de Oro City, Branch 24, while the CA Resolution denied
petitioner's Motion for Reconsideration.
The facts, as summarized by the CA, are as follows:
[Herein petitioner] Joyce V. Ardiente and her husband Dr. Roberto S. Ardiente
are owners of a housing unit at Emily Homes, Balulang, Cagayan de Oro City
with a lot area of one hundred fifty-three (153) square meters and covered by
Transfer Certificate of Title No. 69905.
On June 2, 1994, Joyce Ardiente entered into a Memorandum of Agreement
(Exh. "B", pp. 470-473, Records) selling, transferring and conveying in favor of
[respondent] Ma. Theresa Pastorfide all their rights and interests in the housing
unit at Emily Homes in consideration of ₱70,000.00. The Memorandum of
Agreement carries a stipulation:
"4. That the water and power bill of the subject property shall be for the account
of the Second Party (Ma. Theresa Pastorfide) effective June 1, 1994."
(Records, p. 47)
vis-a-vis Ma. Theresa Pastorfide's assumption of the payment of the mortgage
loan secured by Joyce Ardiente from the National Home Mortgage (Records,
Exh. "A", pp. 468-469)
For four (4) years, Ma. Theresa's use of the water connection in the name of
Joyce Ardiente was never questioned nor perturbed (T.S.N., October 31, 2000,
pp. 7-8) until on March 12, 1999, without notice, the water connection of Ma.
Theresa was cut off. Proceeding to the office of the Cagayan de Oro Water
District (COWD) to complain, a certain Mrs. Madjos told Ma. Theresa that she
was delinquent for three (3) months corresponding to the months of December
1998, January 1999, and February 1999. Ma. Theresa argued that the due
date of her payment was March 18, 1999 yet (T.S.N., October 31, 2000, pp.
11-12). Mrs. Madjos later told her that it was at the instance of Joyce Ardiente
that the water line was cut off (T.S.N., February 5, 2001, p. 31).
On March 15, 1999, Ma. Theresa paid the delinquent bills (T.S.N., October 31,
2000, p. 12). On the same date, through her lawyer, Ma. Theresa wrote a letter
to the COWD to explain who authorized the cutting of the water line (Records,
p. 160).
On March 18, 1999, COWD, through the general manager, [respondent]
Gaspar Gonzalez, Jr., answered the letter dated March 15, 1999 and reiterated
that it was at the instance of Joyce Ardiente that the water line was cut off
(Records, p. 161).
Aggrieved, on April 14, 1999, Ma. Theresa Pastorfide [and her husband] filed
[a] complaint for damages [against petitioner, COWD and its manager Gaspar
Gonzalez] (Records, pp. 2-6).
In the meantime, Ma. Theresa Pastorfide's water line was only restored and
reconnected when the [trial] court issued a writ of preliminary mandatory
injunction on December 14, 1999 (Records, p. 237).4
After trial, the RTC rendered judgment holding as follows:
xxxx
In the exercise of their rights and performance of their duties, defendants did
not act with justice, gave plaintiffs their due and observe honesty and good
faith. Before disconnecting the water supply, defendants COWD and Engr.
Gaspar Gonzales did not even send a disconnection notice to plaintiffs as
testified to by Engr. Bienvenido Batar, in-charge of the Commercial
Department of defendant COWD. There was one though, but only three (3)
days after the actual disconnection on March 12, 1999. The due date for
payment was yet on March 15. Clearly, they did not act with justice. Neither
did they observe honesty.
They should not have been swayed by the prodding of Joyce V. Ardiente. They
should have investigated first as to the present ownership of the house. For
doing the act because Ardiente told them, they were negligent. Defendant
Joyce Ardiente should have requested before the cutting off of the water
supply, plaintiffs to pay. While she attempted to tell plaintiffs but she did not
have the patience of seeing them. She knew that it was plaintiffs who had been
using the water four (4) years ago and not hers. She should have been very
careful. x x x5
The dispositive portion of the trial court's Decision reads, thus:
WHEREFORE, premises considered, judgment is hereby rendered ordering
defendants [Ardiente, COWD and Gonzalez] to pay jointly and severally
plaintiffs, the following sums:
(a) ₱200,000.00 for moral damages;
(b) 200,000.00 for exemplary damages; and
(c) 50,000.00 for attorney's fee.
The cross-claim of Cagayan de Oro Water District and Engr. Gaspar Gonzales
is hereby dismissed. The Court is not swayed that the cutting off of the water
supply of plaintiffs was because they were influenced by defendant Joyce
Ardiente. They were negligent too for which they should be liable.
SO ORDERED.6
Petitioner, COWD and Gonzalez filed an appeal with the CA.
On August 28, 2003, the CA promulgated its assailed Decision disposing as
follows:
IN VIEW OF ALL THE FOREGOING, the appealed decision is AFFIRMED,
with the modification that the awarded damages is reduced to ₱100,000.00
each for moral and exemplary damages, while attorney's fees is lowered to
₱25,000.00. Costs against appellants.
SO ORDERED.7
The CA ruled, with respect to petitioner, that she has a "legal duty to honor the
possession and use of water line by Ma. Theresa Pastorfide pursuant to their
Memorandum of Agreement" and "that when [petitioner] applied for its
disconnection, she acted in bad faith causing prejudice and [injury to] Ma.
Theresa Pastorfide."8
As to COWD and Gonzalez, the CA held that they "failed to give a notice of
disconnection and derelicted in reconnecting the water line despite payment
of the unpaid bills by the [respondent spouses Pastorfide]."9
Petitioner, COWD and Gonzalez filed their respective Motions for
Reconsideration, but these were denied by the CA in its Resolution dated
December 17, 2003.
COWD and Gonzalez filed a petition for review on certiorari with this Court,
which was docketed as G.R. No. 161802. However, based on technical
grounds and on the finding that the CA did not commit any reversible error in
its assailed Decision, the petition was denied via a Resolution10 issued by this
Court on March 24, 2004. COWD and Gonzalez filed a motion for
reconsideration, but the same was denied with finality through this Court's
Resolution11 dated June 28, 2004.
Petitioner, on the other hand, timely filed the instant petition with the following
Assignment of Errors:
7.1 HONORABLE COURT OF APPEALS (ALTHOUGH IT HAS
REDUCED THE LIABILITY INTO HALF) HAS STILL COMMITTED
GRAVE AND SERIOUS ERROR WHEN IT UPHELD THE JOINT AND
SOLIDARY LIABILITY OF PETITIONER JOYCE V. ARDIENTE WITH
CAGAYAN DE ORO WATER DISTRICT (COWD) AND ENGR.
GASPAR D. GONZALES FOR THE LATTER'S FAILURE TO SERVE
NOTICE UPON RESPONDENTS SPOUSES PASTORFIDE PRIOR
TO THE ACTUAL DISCONNECTION DESPITE EVIDENCE
ADDUCED DURING TRIAL THAT EVEN WITHOUT PETITIONER'S
REQUEST, COWD WAS ALREADY SET TO EFFECT
DISCONNECTION OF RESPONDENTS' WATER SUPPLY DUE TO
NON-PAYMENT OF ACCOUNT FOR THREE (3) MONTHS.
7.2 THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
AND SERIOUS ERROR WHEN IT RULED TOTALLY AGAINST
PETITIONER AND FAILED TO FIND THAT RESPONDENTS ARE
GUILTY OF CONTRIBUTORY NEGLIGENCE WHEN THEY FAILED
TO PAY THEIR WATER BILLS FOR THREE MONTHS AND TO
MOVE FOR THE TRANSFER OF THE COWD ACCOUNT IN THEIR
NAME, WHICH WAS A VIOLATION OF THEIR MEMORANDUM OF
AGREEMENT WITH PETITIONER JOYCE V. ARDIENTE.
RESPONDENTS LIKEWISE DELIBERATELY FAILED TO
EXERCISE DILIGENCE OF A GOOD FATHER OF THE FAMILY TO
MINIMIZE THE DAMAGE UNDER ART. 2203 OF THE NEW CIVIL
CODE.
7.3 THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
WHEN IT DISREGARDED THE FACT THAT RESPONDENT
SPOUSES PASTORFIDE ARE LIKEWISE BOUND TO OBSERVE
ARTICLE 19 OF THE NEW CIVIL CODE, i.e., IN THE EXERCISE OF
THEIR RIGHTS AND IN THE PERFORMANCE OF THEIR DUTIES
TO ACT WITH JUSTICE, GIVE EVERYONE HIS DUE AND
OBSERVE HONESTY AND GOOD FAITH.
 7.4 THE HONORABLE COURT OF APPEALS GRAVELY ERRED
WHEN IT GRANTED AN AWARD OF MORAL AND EXEMPLARY
DAMAGES AND ATTORNEY'S FEES AS AGAINST PETITIONER
ARDIENTE.12
At the outset, the Court noticed that COWD and Gonzalez, who were
petitioner's co-defendants before the RTC and her co-appellants in the CA,
were impleaded as respondents in the instant petition. This cannot be done.
Being her co-parties before the RTC and the CA, petitioner cannot, in the
instant petition for review on certiorari, make COWD and Gonzalez, adversary
parties. It is a grave mistake on the part of petitioner's counsel to treat COWD
and Gonzalez as respondents. There is no basis to do so, considering that, in
the first place, there is no showing that petitioner filed a cross-claim against
COWD and Gonzalez. Under Section 2, Rule 9 of the Rules of Court, a cross-
claim which is not set up shall be barred. Thus, for failing to set up a cross-
claim against COWD and Gonzalez before the RTC, petitioner is already
barred from doing so in the present petition.
More importantly, as shown above, COWD and Gonzalez's petition for review
on certiorari filed with this Court was already denied with finality on June 28,
2004, making the presently assailed CA Decision final and executory insofar
as COWD and Gonzalez are concerned. Thus, COWD and Gonzalez are
already precluded from participating in the present petition. They cannot
resurrect their lost cause by filing pleadings this time as respondents but,
nonetheless, reiterating the same prayer in their previous pleadings filed with
the RTC and the CA.
As to the merits of the instant petition, the Court likewise noticed that the main
issues raised by petitioner are factual and it is settled that the resolution of
factual issues is the function of lower courts, whose findings on these matters
are received with respect and considered binding by the Supreme Court
subject only to certain exceptions, none of which is present in this instant
petition.13 This is especially true when the findings of the RTC have been
affirmed by the CA as in this case.14
In any case, a perusal of the records at hand would readily show that the
instant petition lacks merit.
Petitioner insists that she should not be held liable for the disconnection of
respondent spouses' water supply, because she had no participation in the
actual disconnection. However, she admitted in the present petition that it was
she who requested COWD to disconnect the Spouses Pastorfide's water
supply. This was confirmed by COWD and Gonzalez in their cross-claim
against petitioner. While it was COWD which actually discontinued respondent
spouses' water supply, it cannot be denied that it was through the instance of
petitioner that the Spouses Pastorfide's water supply was disconnected in the
first place.
It is true that it is within petitioner's right to ask and even require the Spouses
Pastorfide to cause the transfer of the former's account with COWD to the
latter's name pursuant to their Memorandum of Agreement. However, the
remedy to enforce such right is not to cause the disconnection of the
respondent spouses' water supply. The exercise of a right must be in
accordance with the purpose for which it was established and must not be
excessive or unduly harsh; there must be no intention to harm
another.15 Otherwise, liability for damages to the injured party will attach. 16 In
the present case, intention to harm was evident on the part of petitioner when
she requested for the disconnection of respondent spouses’ water supply
without warning or informing the latter of such request. Petitioner claims that
her request for disconnection was based on the advise of COWD personnel
and that her intention was just to compel the Spouses Pastorfide to comply
with their agreement that petitioner's account with COWD be transferred in
respondent spouses' name. If such was petitioner's only intention, then she
should have advised respondent spouses before or immediately after
submitting her request for disconnection, telling them that her request was
simply to force them to comply with their obligation under their Memorandum
of Agreement. But she did not. What made matters worse is the fact that
COWD undertook the disconnection also without prior notice and even failed
to reconnect the Spouses Pastorfide’s water supply despite payment of their
arrears. There was clearly an abuse of right on the part of petitioner, COWD
and Gonzalez. They are guilty of bad faith.
The principle of abuse of rights as enshrined in Article 19 of the Civil Code
provides that 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.
In this regard, the Court's ruling in Yuchengco v. The Manila Chronicle
Publishing Corporation17 is instructive, to wit:
xxxx
This provision of law sets standards which must be observed in the exercise
of one’s rights as well as in the performance of its duties, to wit: to act with
justice; give everyone his due; and observe honesty and good faith.
In Globe Mackay Cable and Radio Corporation v. Court of Appeals, it was
elucidated that while Article 19 "lays down a rule of conduct for the government
of human relations and for the maintenance of social order, it does not provide
a remedy for its violation. Generally, an action for damages under either Article
20 or Article 21 would be proper." The Court said:
One of the more notable innovations of the New Civil Code is the codification
of "some basic principles that are to be observed for the rightful relationship
between human beings and for the stability of the social order." [REPORT ON
THE CODE COMMISSION ON THE PROPOSED CIVIL CODE OF THE
PHILIPPINES, p. 39]. The framers of the Code, seeking to remedy the defect
of the old Code which merely stated the effects of the law, but failed to draw
out its spirit, incorporated certain fundamental precepts which were "designed
to indicate certain norms that spring from the fountain of good conscience" and
which were also meant to serve as "guides for human conduct [that] should
run as golden threads through society, to the end that law may approach its
supreme ideal, which is the sway and dominance of justice." (Id.) Foremost
among these principles is that pronounced in Article 19 x x x.
xxxx
This article, known to contain what is commonly referred to as the principle of
abuse of rights, sets certain standards which must be observed not only in the
exercise of one's rights, but also in the performance of one's duties. These
standards are the following: to act with justice; to give everyone his due; and
to observe honesty and good faith. The law, therefore, recognizes a primordial
limitation on all rights; that in their exercise, the norms of human conduct set
forth in Article 19 must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless become the source
of some illegality. When a right is exercised in a manner which does not
conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must be
held responsible. But while Article 19 lays down a rule of conduct for the
government of human relations and for the maintenance of social order, it does
not provide a remedy for its violation. Generally, an action for damages under
either Article 20 or Article 21 would be proper.
Corollarilly, Article 20 provides that "every person who, contrary to law, willfully
or negligently causes damage to another shall indemnify the latter for the
same." It speaks of the general sanctions of all other provisions of law which
do not especially provide for its own sanction. When a right is exercised in a
manner which does not conform to the standards set forth in the said provision
and results in damage to another, a legal wrong is thereby committed for which
the wrongdoer must be responsible. Thus, if the provision does not provide a
remedy for its violation, an action for damages under either Article 20 or Article
21 of the Civil Code would be proper.
The question of whether or not the principle of abuse of rights has been
violated resulting in damages under Article 20 or other applicable provision of
law, depends on the circumstances of each case. x x x 18
To recapitulate, petitioner's acts which violated the abovementioned provisions
of law is her unjustifiable act of having the respondent spouses' water supply
disconnected, coupled with her failure to warn or at least notify respondent
spouses of such intention. On the part of COWD and Gonzalez, it is their failure
to give prior notice of the impending disconnection and their subsequent
neglect to reconnect respondent spouses' water supply despite the latter's
settlement of their delinquent account.
On the basis of the foregoing, the Court finds no cogent reason to depart from
the ruling of both the RTC and the CA that petitioner, COWD and Gonzalez
are solidarily liable.
The Spouses Pastorfide are entitled to moral damages based on the
provisions of Article 2219,19 in connection with Articles 2020 and 2121 of the
Civil Code.
As for exemplary damages, Article 2229 provides that exemplary damages
may be imposed by way of example or correction for the public good.
Nonetheless, exemplary damages are imposed not to enrich one party or
impoverish another, but to serve as a deterrent against or as a negative
incentive to curb socially deleterious actions.22 In the instant case, the Court
agrees with the CA in sustaining the award of exemplary damages, although
it reduced the amount granted, considering that respondent spouses were
deprived of their water supply for more than nine (9) months, and such
deprivation would have continued were it not for the relief granted by the RTC.
With respect to the award of attorney's fees, Article 2208 of the Civil Code
provides, among others, that such fees may be recovered when exemplary
damages are awarded, when the defendant's act or omission has compelled
the plaintiff to litigate with third persons or to incur expenses to protect his
interest, and where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiffs’ plainly valid, just and demandable claim.
WHEREFORE, instant petition for review on certiorari is DENIED. The
Decision and Resolution of the Court of Appeals, dated August 28, 2003 and
December 17, 2003, respectively, in CA-G.R. CV No. 73000 are AFFIRMED.
SO ORDERED.
G.R. No. 168512 March 20, 2007
ORLANDO D. GARCIA, JR., doing business under the name and style
COMMUNITY DIAGNOSTIC CENTER and BU CASTRO,1 Petitioners, vs.
RANIDA D. SALVADOR and RAMON SALVADOR, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review2 under Rule 45 of the Rules of Court assailing the
February 27, 2004 Decision3 of the Court of Appeals in CA-G.R. CV No. 58668
finding petitioner Orlando D. Garcia liable for gross negligence; and its June
16, 2005 Resolution4 denying petitioner’s motion for reconsideration.
On October 1, 1993, respondent Ranida D. Salvador started working as a
trainee in the Accounting Department of Limay Bulk Handling Terminal, Inc.
(the Company). As a prerequisite for regular employment, she underwent a
medical examination at the Community Diagnostic Center (CDC). Garcia who
is a medical technologist, conducted the HBs Ag (Hepatitis B Surface Antigen)
test and on October 22, 1993, CDC issued the test result 5 indicating that
Ranida was "HBs Ag: Reactive." The result bore the name and signature of
Garcia as examiner and the rubber stamp signature of Castro as pathologist.
When Ranida submitted the test result to Dr. Sto. Domingo, the Company
physician, the latter apprised her that the findings indicated that she is suffering
from Hepatitis B, a liver disease. Thus, based on the medical report 6submitted
by Sto. Domingo, the Company terminated Ranida’s employment for failing the
physical examination.7
When Ranida informed her father, Ramon, about her ailment, the latter
suffered a heart attack and was confined at the Bataan Doctors Hospital.
During Ramon’s confinement, Ranida underwent another HBs Ag test at the
said hospital and the result8 indicated that she is non-reactive. She informed
Sto. Domingo of this development but was told that the test conducted by CDC
was more reliable because it used the Micro-Elisa Method.
Thus, Ranida went back to CDC for confirmatory testing, and this time, the
Anti-HBs test conducted on her indicated a "Negative" result.9
Ranida also underwent another HBs Ag test at the Bataan Doctors Hospital
using the Micro-Elisa Method. The result indicated that she was non-reactive.10
Ranida submitted the test results from Bataan Doctors Hospital and CDC to
the Executive Officer of the Company who requested her to undergo another
similar test before her re-employment would be considered. Thus, CDC
conducted another HBs Ag test on Ranida which indicated a "Negative"
result.11 Ma. Ruby G. Calderon, Med-Tech Officer-in-Charge of CDC, issued a
Certification correcting the initial result and explaining that the examining
medical technologist (Garcia) interpreted the delayed reaction as positive or
reactive.12
Thereafter, the Company rehired Ranida.
On July 25, 1994, Ranida and Ramon filed a complaint13 for damages against
petitioner Garcia and a purportedly unknown pathologist of CDC, claiming that,
by reason of the erroneous interpretation of the results of Ranida’s
examination, she lost her job and suffered serious mental anxiety, trauma and
sleepless nights, while Ramon was hospitalized and lost business
opportunities.
On September 26, 1994, respondents amended their complaint14 by naming
Castro as the "unknown pathologist."
Garcia denied the allegations of gross negligence and incompetence and
reiterated the scientific explanation for the "false positive" result of the first HBs
Ag test in his December 7, 1993 letter to the respondents.15
For his part, Castro claimed that as pathologist, he rarely went to CDC and
only when a case was referred to him; that he did not examine Ranida; and
that the test results bore only his rubber-stamp signature.
On September 1, 1997,16 the trial court dismissed the complaint for failure of
the respondents to present sufficient evidence to prove the liability of Garcia
and Castro. It held that respondents should have presented Sto. Domingo
because he was the one who interpreted the test result issued by CDC.
Likewise, respondents should have presented a medical expert to refute the
testimonies of Garcia and Castro regarding the medical explanation behind the
conflicting test results on Ranida.17
Respondents appealed to the Court of Appeals which reversed the trial court’s
findings, the dispositive portion of which states:
WHEREFORE, the decision appealed from is REVERSED and SET ASIDE
and another one entered ORDERING defendant-appellee Orlando D. Garcia,
Jr. to pay plaintiff-appellant Ranida D. Salvador moral damages in the amount
of P50,000.00, exemplary damages in the amount of P50,000.00 and
attorney’s fees in the amount of P25,000.00.
SO ORDERED.18
The appellate court found Garcia liable for damages for negligently issuing an
erroneous HBs Ag result. On the other hand, it exonerated Castro for lack of
participation in the issuance of the results.
After the denial of his motion for reconsideration, Garcia filed the instant
petition.
The main issue for resolution is whether the Court of Appeals, in reversing the
decision of the trial court, correctly found petitioner liable for damages to the
respondents for issuing an incorrect HBsAG test result.
Garcia maintains he is not negligent, thus not liable for damages, because he
followed the appropriate laboratory measures and procedures as dictated by
his training and experience; and that he did everything within his professional
competence to arrive at an objective, impartial and impersonal result.
At the outset, we note that the issues raised are factual in nature. Whether a
person is negligent or not is a question of fact which we cannot pass upon in
a petition for review on certiorari which is limited to reviewing errors of law.19
Negligence is the failure to observe for the protection of the interest of another
person that degree of care, precaution and vigilance which the circumstances
justly demand,20 whereby such other person suffers injury. For health care
providers, the test of the existence of negligence is: did the health care provider
either fail to do something which a reasonably prudent health care provider
would have done, or that he or she did something that a reasonably prudent
health care provider would not have done; and that failure or action caused
injury to the patient;21 if yes, then he is guilty of negligence.
Thus, the elements of an actionable conduct are: 1) duty, 2) breach, 3) injury,
and 4) proximate causation.
All the elements are present in the case at bar.
Owners and operators of clinical laboratories have the duty to comply with
statutes, as well as rules and regulations, purposely promulgated to protect
and promote the health of the people by preventing the operation of
substandard, improperly managed and inadequately supported clinical
laboratories and by improving the quality of performance of clinical laboratory
examinations.22 Their business is impressed with public interest, as such, high
standards of performance are expected from them.
In F.F. Cruz and Co., Inc. v. Court of Appeals, we found the owner of a furniture
shop liable for the destruction of the plaintiff’s house in a fire which started in
his establishment in view of his failure to comply with an ordinance which
required the construction of a firewall. In Teague v. Fernandez, we stated that
where the very injury which was intended to be prevented by the ordinance
has happened, non-compliance with the ordinance was not only an act of
negligence, but also the proximate cause of the death.23
In fine, violation of a statutory duty is negligence. Where the law imposes upon
a person the duty to do something, his omission or non-performance will
render him liable to whoever may be injured thereby.
Section 2 of Republic Act (R.A.) No. 4688, otherwise known as The Clinical
Laboratory Law, provides:
Sec. 2. It shall be unlawful for any person to be professionally in-charge of a
registered clinical laboratory unless he is a licensed physician duly qualified in
laboratory medicine and authorized by the Secretary of Health, such
authorization to be renewed annually.
No license shall be granted or renewed by the Secretary of Health for the
operation and maintenance of a clinical laboratory unless such laboratory is
under the administration, direction and supervision of an authorized physician,
as provided for in the preceding paragraph.
Corollarily, Sections 9(9.1)(1), 11 and 25(25.1)(1) of the DOH Administrative
Order No. 49-B Series of 1988, otherwise known as the Revised Rules and
Regulations Governing the Registration, Operation and Maintenance of
Clinical Laboratories in the Philippines, read:
Sec. 9. Management of the Clinical Laboratory:
9.1 Head of the Clinical Laboratory: The head is that person who assumes
technical and administrative supervision and control of the activities in the
laboratory.
For all categories of clinical laboratories, the head shall be a licensed physician
certified by the Philippine Board of Pathology in either Anatomic or Clinical
Pathology or both provided that:
(1) This shall be mandatory for all categories of free-standing clinical
laboratories; all tertiary category hospital laboratories and for all secondary
category hospital laboratories located in areas with sufficient available
pathologist.
xxxx
Sec. 11. Reporting: All laboratory requests shall be considered as
consultations between the requesting physician and pathologist of the
laboratory. As such all laboratory reports on various examinations of human
specimens shall be construed as consultation report and shall bear the name
of the pathologist or his associate. No person in clinical laboratory shall issue
a report, orally or in writing, whole portions thereof without a directive from the
pathologist or his authorized associate and only to the requesting physician or
his authorized representative except in emergencies when the results may be
released as authorized by the pathologist.
xxxx
Sec. 25. Violations:
25.1 The license to operate a clinical laboratory may be suspended or revoked
by the Undersecretary of Health for Standards and Regulation upon violation
of R.A. 4688 or the rules and regulations issued in pursuance thereto or the
commission of the following acts by the persons owning or operating a clinical
laboratory and the persons under their authority.
(1) Operation of a Clinical Laboratory without a certified pathologist or qualified
licensed physician authorized by the Undersecretary of Health or without
employing a registered medical technologist or a person not registered as a
medical technologist in such a position.
And Section 29(b) of R.A. No. 5527, otherwise known as The Philippine
Medical Technology Act of 1969, reads:
Section 29. Penal Provisions.- Without prejudice to the provision of the Medical
Act of 1959, as amended relating to illegal practice of Medicine, the following
shall be punished by a fine of not less than two thousand pesos nor more than
five thousand pesos, or imprisonment for not less than six months nor more
than two years, or both, in the discretion of the court:
xxxx
(b) Any medical technologist, even if duly registered, who shall practice
medical technology in the Philippines without the necessary supervision of a
qualified pathologist or physician authorized by the Department of Health;
From the foregoing laws and rules, it is clear that a clinical laboratory must be
administered, directed and supervised by a licensed physician authorized by
the Secretary of Health, like a pathologist who is specially trained in methods
of laboratory medicine; that the medical technologist must be under the
supervision of the pathologist or a licensed physician; and that the results of
any examination may be released only to the requesting physician or his
authorized representative upon the direction of the laboratory pathologist.
These rules are intended for the protection of the public by preventing
performance of substandard clinical examinations by laboratories whose
personnel are not properly supervised. The public demands no less than an
effective and efficient performance of clinical laboratory examinations through
compliance with the quality standards set by laws and regulations.
We find that petitioner Garcia failed to comply with these standards.
First, CDC is not administered, directed and supervised by a licensed
physician as required by law, but by Ma. Ruby C. Calderon, a licensed Medical
Technologist.24 In the License to Open and Operate a Clinical Laboratory for
the years 1993 and 1996 issued by Dr. Juan R. Nañagas, M.D.,
Undersecretary for Health Facilities, Standards and Regulation, defendant-
appellee Castro was named as the head of CDC.25 However, in his Answer
with Counterclaim, he stated:
3. By way of affirmative and special defenses, defendant pathologist further
avers and plead as follows:
Defendant pathologist is not the owner of the Community Diagnostic Center
nor an employee of the same nor the employer of its employees. Defendant
pathologist comes to the Community Diagnostic Center when and where a
problem is referred to him. Its employees are licensed under the Medical
Technology Law (Republic Act No. 5527) and are certified by, and registered
with, the Professional Regulation Commission after having passed their Board
Examinations. They are competent within the sphere of their own profession
in so far as conducting laboratory examinations and are allowed to sign for and
in behalf of the clinical laboratory. The defendant pathologist, and all
pathologists in general, are hired by laboratories for purposes of complying
with the rules and regulations and orders issued by the Department of Health
through the Bureau of Research and Laboratories. Defendant pathologist does
not stay that long period of time at the Community Diagnostic Center but only
periodically or whenever a case is referred to him by the laboratory. Defendant
pathologist does not appoint or select the employees of the laboratory nor does
he arrange or approve their schedules of duty.26
Castro’s infrequent visit to the clinical laboratory barely qualifies as an effective
administrative supervision and control over the activities in the laboratory.
"Supervision and control" means the authority to act directly whenever a
specific function is entrusted by law or regulation to a subordinate; direct the
performance of duty; restrain the commission of acts; review, approve, revise
or modify acts and decisions of subordinate officials or units.27
Second, Garcia conducted the HBsAG test of respondent Ranida without the
supervision of defendant-appellee Castro, who admitted that:
[He] does not know, and has never known or met, the plaintiff-patient even up
to this time nor has he personally examined any specimen, blood, urine or any
other tissue, from the plaintiff-patient otherwise his own handwritten signature
would have appeared in the result and not merely stamped as shown in Annex
"B" of the Amended Complaint.28
Last, the disputed HBsAG test result was released to respondent Ranida
without the authorization of defendant-appellee Castro.29
damages, we see no reason to disturb the award of exemplary damages and
attorney’s fees. Exemplary damages are imposed, by way of example or
correction for the public good, in addition to moral, temperate, liquidated or
compensatory damages,33 and attorney’s fees may be recovered when, as in
the instant case, exemplary damages are awarded.34
WHEREFORE, the Decision of the Court of Appeals in CA-G.R. CV No. 58668
dated February 27, 2004 finding petitioner Orlando D. Garcia, Jr. guilty of gross
negligence and liable to pay to respondents ₱50,000.00 as moral damages,
₱50,000.00 as exemplary damages, and ₱25,000.00 as attorney’s fees, is
AFFIRMED.
SO ORDERED.

Garcia may not have intended to cause the consequences which followed after
the release of the HBsAG test result. However, his failure to comply with the
laws and rules promulgated and issued for the protection of public safety and
interest is failure to observe that care which a reasonably prudent health care
provider would observe. Thus, his act or omission constitutes a breach of duty.

Indubitably, Ranida suffered injury as a direct consequence of Garcia’s failure

to comply with the mandate of the laws and rules aforequoted. She was
terminated from the service for failing the physical examination; suffered
anxiety because of the diagnosis; and was compelled to undergo several more
tests. All these could have been avoided had the proper safeguards been
scrupulously followed in conducting the clinical examination and releasing the
clinical report.

Article 20 of the New Civil Code provides:

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

The foregoing provision provides the legal basis for the award of damages to
a party who suffers damage whenever one commits an act in violation of some
legal provision.30 This was incorporated by the Code Commission to provide
relief to a person who suffers damage because another has violated some
legal provision.31

We find the Court of Appeals’ award of moral damages reasonable under the
circumstances bearing in mind the mental trauma suffered by respondent
Ranida who thought she was afflicted by Hepatitis B, making her "unfit or
unsafe for any type of employment."32 Having established her right to moral
G.R. No. L-39019 January 22, 1988
MANILA ELECTRIC COMPANY and PEDRO YAMBAO, petitioners-
appellants, vs. THE HONORABLE COURT OF APPEALS and ISAAC
CHAVEZ, SR., ISAAC O. CHAVEZ, JR., ROSENDO O. CHAVES, and JUAN
O. CHAVES, respondents-appellees.
YAP, J.:
In an action for recovery of damages for embarassment, humiliation, wounded
feelings and hurt pride, caused to herein private respondents, by reason of the
disconnection of their electrical service by the petitioners, the then Court of
First Instance of Manila, Sixth Judicial District, Branch XXIV, rendered a
decision dated December 13,1967, ordering herein petitioners jointly and
severally to pay private respondents the sum of Ten Thousand (P10,000.00)
Pesos as moral damages, Two Thousand (P2,000.00) Pesos as exemplary
damages and, One Thousand (P1,000.00) Pesos as attorney's fees, and
dismissing petitioners' counterclaim.
On appeal, the Court of Appeals and in toto the trial court's decision. Their
Motion for Reconsideration having been denied, petitioners filed the instant
petition for certiorari.
Petitioner Manila Electric Company (MERALCO) is a public utility corporation
providing electric power for the consumption of the general public in Metro
Manila. Petitioner Pedro Yambao is a bill collector of MERALCO.
Private respondents Isaac Chaves and Juana O. Chaves, husband and wife,
filed the complaint for damages, together with their children, Isaac O. Chaves,
Jr. and Rosendo O. Chaves. Isaac Sr. and Isaac Jr. and Rosendo were
members of the Philippine Bar; Isaac, Sr. and Isaac, Jr. were practicing
lawyers and Rosendo was a Legal Officer at the Agricultural Productivity
Commission. Juana O. Chaves was a public school teacher.
The facts as found by the trial court and adopted by the Court of Appeals are
as follows:
Plaintiff Isaac Chaves became a customer of defendant MERALCO in the
year 1953 when he and his family were residing at No. 211-D Rubi,
Manila. In connection with the contract for electrical service, he deposited
the sum of P5.00 (Exh. "A") with defendant MERALCO on February 12,
1953. This deposit in the name of plaintiff Isaac Chaves was retained by
MERALCO and made to apply to subsequent contracts for electrical
service entered into after subsequent transfers of the Chaves family to
other residences and up to the time this family went to reside at the place
aforementioned, at No. 2656 Mercedes Street, Singalong, Manila. ...
At or about the end of March, 1965, defendant Pedro Yambao went to the
residence of plaintiffs and presented two overdue bills, one for January
11 to February 9,1965, for the sum of P7.90 (Exhibit "C"), and the other
for February 9 to March 10, 1965, for the amount of P7.20 (Exhibit "C").
Juana O. Chaves, however, informed Yambao that these bills would be
paid at the MERALCO main office.
Accordingly, on April 2, 1965, Isaac Chaves went to the defendant's main
office at San Marcelino, Manila, but paid only the bill marked as Exhibit
'C" leaving the other bill Identified as Exhibit "C-l" unpaid.
Past 2:30 o'clock in the afternoon of April 21,1965, MERALCO caused
the electric service in plaintiff's residence to be discontinued and the
power line cut off.
The next day, April 22, 1965, at about 9:00 a.m., plaintiff Rosendo O.
Chaves went to the MERALCO main office and paid the amount of P7.20
for the bill marked as Exhibit "C-l", and the sum of P7.00 for the
subsequent bill corresponding to the period from March 10 up to April 8,
1965 (Exhibit "C-2") after his attention was called to the latter account.
Rosendo O. Chaves then sought the help of Atty. Lourdy Torres, one of
the defendants' counsel, and, thereafter, the power line was reconnected
and electric service restored to the Chaves residence at about 7:00 p.m.
of that same day. 1
Petitioners dispute the finding that there was no notice given to herein
respondent. However, since only questions of law may be raised in a petition
for certiorari under Rule 45 of the Revised Rules of Court, petitioners, 'for the
sake of argument and for the purpose of giving focus on the legal issues', do
not take issue with such finding.
Petitioners contend that in the absence of bad faith, they could not be held
liable for moral and exemplary damages as well as attorney's fees. The failure
to give a notice of disconnection to private respondents might have been a
breach of duty or breach of contract, but by itself does not constitute bad faith
or fraud; it must be shown that such a failure was motivated by in or done with
fraudulent intent.Petitioners also maintain that ' private respondents were in
arrears in the payment of their electricity bills when their electric service was
connected, no moral damages may be recovered by them under the 'clean
hands' doctrine enunciated in Mabutas vs. Calapan Electric Company, CA-
G.R. No. L-9683-R, May 26, 1964.
In its decision, the respondent Court of Appeals held that MERALCO's right to
disconnect the electric service of a delinquent customer "is an absolute one,
subject only to the requirement that defendant MERALCO should give the
customer a written notice of disconnection 48 hours in advance." This
requirement is embodied in Section 97 of the Revised Order No. 1 of the Public
Service Commission which provides as follows:
Section 97. Payment of bills. — A public service, may require that bills for
service be paid within a specified time after rendition. When the billing
period covers a month or more, the minimum time allowed will be ten days
and upon expiration of the specified time, service may be discontinued for
the non-payment of bills, provided that a 48 hours' written notice of such
disconnection has been given the customer: Provided, however, that
disconnections of service shall not be made on Sundays and official
holidays and never after 2 p.m. of any working day: Provided, further, that
if at the moment the disconnection is to be made the customer tenders
payment of the unpaid bill to the agent or employee of the operator who
is to effect the disconnection, the said agent or employee shall be obliged
to accept tender of payment and issue a temporary receipt for the amount
and shall desist from disconnecting the service. 2
The respondent court stressed the importance and necessity of the 48-hour
advance written notification before a disconnection of service may be effected.
Said the court:
... It sets in motion the disconnection of an electrical service
of the customer by giving the notice, determining the
expiration date thereof, and executing the disconnection. It,
therefore, behooves the defendant MERALCO that before it
disconnects a customer's electrical service, there should be
sufficient evidence that the requirements for the disconnection
had been duly complied with, otherwise, the poor consumer
can be subjected to the whims and caprices of the defendant,
by the mere pretension that the written notice had been duly
served upon the customer. 3
We find no reversible error in the decision appealed from. One can not deny
the vital role which a public utility such as MERALCO, having a monopoly of
the supply of electrical power in Metro Manila and some nearby municipalities,
plays in the life of people living in such areas. Electricity has become a
necessity to most people in these areas justifying the exercise by the State of
its regulatory power over the business of supplying electrical service to the
public, in which petitioner MERALCO is engaged. Thus, the state may
regulate, as it has done through Section 97 of the Revised Order No. 1 of the
Public Service Commission, the conditions under which and the manner by
which a public utility such as MERALCO may effect a disconnection of service
to a delinquent customer. Among others, a prior written notice to the customer
is required before disconnection of the service. Failure to give such prior notice
amounts to a tort, as held by us in a similar case, 4 where we said:
... petitioner's act in 'disconnecting respondent Ongsip's gas
service without prior notice constitutes breach of contract
amounting to an independent tort. The prematurity of the
action is indicative of an intent to cause additional mental and
moral suffering to private respondent. This is a clear violation
of Article 21 of the Civil Code which provides that any person
who wilfully causes loss or injury to another in a manner that
is contrary to morals, good customs or public policy shall
compensate the latter for damages. This is reiterated by
paragraph 10 of Article 2219 of the Code. Moreover, the
award of moral damages is sanctioned by Article 2220 which
provides that wilfull injury to property may be a legal ground
for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due. The
same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith.
Likewise, we find no merit in petitioners' contention that being in arrears in the
payment of their bills, the private respondents are not entitled to moral
damages under the doctrine that "he who comes to court in demand of equity,
must come with clean hands." We rejected this argument in the Manila Gas
Corporation case, supra, wherein we held that respondents' default in the
payment of his bills "cannot be utilized by petitioner to defeat or null the claim
for damages. At most, this circumstance can be considered as a mitigating
factor in ascertaining the amount of damages to which respondent ... is
entitled."
Accordingly, we find no grave abuse of discretion committed by respondent
court in affirming the trial court's decision. The petition is hereby DISMISSED
for lack of merit.
SO ORDERED.
G.R. No. 116100 February 9, 1996
SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO and
MARIA CRISTINA SANTOS, petitioners, vs. COURT OF APPEALS, HEIRS
OF PACIFICO C. MABASA and REGIONAL TRIAL COURT OF PASIG,
METRO MANILA, BRANCH 181, respondents.
DECISION
REGALADO, J.:
This petition for review on certiorari assails the decision of respondent Court
of Appeals in CA-G.R. CV No. 29115, promulgated on November 10, 1993,
which affirmed with modification the decision of the trial court, as well as its
resolution dated July 8, 1994 denying petitioner's motion for reconsideration. 1
On August 26, 1982, Civil Case No. 47466 for the grant of an easement of
right of way was filed by Pacifico Mabasa against Cristino Custodio, Brigida R.
Custodio, Rosalina R. Morato, Lito Santos and Maria Cristina C. Santos before
the Regional Trial Court of Pasig and assigned to Branch 22 thereof.2
The generative facts of the case, as synthesized by the trial court and adopted
by the Court of Appeals, are as follows:
Perusing the record, this Court finds that the original plaintiff Pacifico
Mabasa died during the pendency of this case and was substituted by
Ofelia Mabasa, his surviving spouse [and children].
The plaintiff owns a parcel of land with a two-door apartment erected
thereon situated at Interior P. Burgos St., Palingon, Tipas, Tagig,
Metro Manila. The plaintiff was able to acquire said property through
a contract of sale with spouses Mamerto Rayos and Teodora Quintero
as vendors last September 1981. Said property may be described to
be surrounded by other immovables pertaining to defendants herein.
Taking P. Burgos Street as the point of reference, on the left side,
going to plaintiff's property, the row of houses will be as follows: That
of defendants Cristino and Brigido Custodio, then that of Lito and
Maria Cristina Santos and then that of Ofelia Mabasa. On the right
side (is) that of defendant Rosalina Morato and then a Septic Tank
(Exhibit "D"). As an access to P. Burgos Street from plaintiff's property,
there are two possible passageways. The first passageway is
approximately one meter wide and is about 20 meters distan(t) from
Mabasa's residence to P. Burgos Street. Such path is passing in
between the previously mentioned row of houses. The second
passageway is about 3 meters in width and length from plaintiff
Mabasa's residence to P. Burgos Street; it is about 26 meters. In
passing thru said passageway, a less than a meter wide path through
the septic tank and with 5-6 meters in length, has to be traversed.
When said property was purchased by Mabasa, there were tenants
occupying the remises and who were acknowledged by plaintiff
Mabasa as tenants. However, sometime in February, 1982, one of
said tenants vacated the apartment and when plaintiff Mabasa went to
see the premises, he saw that there had been built an adobe fence in
the first passageway making it narrower in width. Said adobe fence
was first constructed by defendants Santoses along their property
which is also along the first passageway. Defendant Morato
constructed her adobe fence and even extended said fence in such a
way that the entire passageway was enclosed. (Exhibit "1-Santoses
and Custodios, Exh. "D" for plaintiff, Exhs. "1-C", "1-D" and "1-E") And
it was then that the remaining tenants of said apartment vacated the
area. Defendant Ma. Cristina Santos testified that she constructed
said fence because there was an incident when her daughter was
dragged by a bicycle pedalled by a son of one of the tenants in said
apartment along the first passageway. She also mentioned some
other inconveniences of having (at) the front of her house a pathway
such as when some of the tenants were drunk and would bang their
doors and windows. Some of their footwear were even lost. . .
.3 (Emphasis in original text; corrections in parentheses supplied)
On February 27, 1990, a decision was rendered by the trial court, with this
dispositive part:
Accordingly, judgment is hereby rendered as follows:
1) Ordering defendants Custodios and Santoses to give plaintiff
permanent access ingress and egress, to the public street;
2) Ordering the plaintiff to pay defendants Custodios and Santoses the
sum of Eight Thousand Pesos (P8,000) as indemnity for the
permanent use of the passageway.
The parties to shoulder their respective litigation expenses.4
Not satisfied therewith, therein plaintiff represented by his heirs, herein private
respondents, went to the Court of Appeals raising the sole issue of whether or
not the lower court erred in not awarding damages in their favor. On November
10, 1993, as earlier stated, the Court of Appeals rendered its decision affirming
the judgment of the trial court with modification, the decretal portion of which
disposes as follows:
 WHEREFORE, the appealed decision of the lower court is hereby
AFFIRMED WITH MODIFICATION only insofar as the herein grant of
damages to plaintiffs-appellants. The Court hereby orders defendants-
appellees to pay plaintiffs-appellants the sum of Sixty Five Thousand
(P65,000) Pesos as Actual Damages, Thirty Thousand (P30,000)
Pesos as Moral Damages, and Ten Thousand (P10,000) Pesos as
Exemplary Damages. The rest of the appealed decision is affirmed to
all respects.5
On July 8, 1994, the Court of Appeals denied petitioner's motion for
reconsideration.6 Petitioners then took the present recourse to us, raising two
issues, namely, whether or not the grant of right of way to herein private
respondents is proper, and whether or not the award of damages is in order.
With respect to the first issue, herein petitioners are already barred from raising
the same. Petitioners did not appeal from the decision of the court a
quo granting private respondents the right of way, hence they are presumed
to be satisfied with the adjudication therein. With the finality of the judgment of
the trial court as to petitioners, the issue of propriety of the grant of right of way
has already been laid to rest.
For failure to appeal the decision of the trial court to the Court of Appeals,
petitioners cannot obtain any affirmative relief other than those granted in the
decision of the trial court. That decision of the court below has become final as
against them and can no longer be reviewed, much less reversed, by this
Court. The rule in this jurisdiction is that whenever an appeal is taken in a civil
case, an appellee who has not himself appealed may not obtain from the
appellate court any affirmative relief other than what was granted in the
decision of the lower court. The appellee can only advance any argument that
he may deem necessary to defeat the appellant's claim or to uphold the
decision that is being disputed, and he can assign errors in his brief if such is
required to strengthen the views expressed by the court a quo. These
assigned errors, in turn, may be considered by the appellate court solely to
maintain the appealed decision on other grounds, but not for the purpose of
reversing or modifying the judgment in the appellee's favor and giving him
other affirmative reliefs.7
However, with respect to the second issue, we agree with petitioners that the
Court of Appeals erred in awarding damages in favor of private respondents.
The award of damages has no substantial legal basis. A reading of the decision
of the Court of Appeals will show that the award of damages was based solely
on the fact that the original plaintiff, Pacifico Mabasa, incurred losses in the
form of unrealized rentals when the tenants vacated the leased premises by
reason of the closure of the passageway.
However, the mere fact that the plaintiff suffered losses does not give rise to a
right to recover damages. To warrant the recovery of damages, there must be
both a right of action for a legal wrong inflicted by the defendant, and damage
resulting to the plaintiff therefrom. Wrong without damage, or damage without
wrong, does not constitute a cause of action, since damages are merely part
of the remedy allowed for the injury caused by a breach or wrong.8
There is a material distinction between damages and injury. Injury is the illegal
invasion of a legal right; damage is the loss, hurt, or harm which results from
the injury; and damages are the recompense or compensation awarded for the
damage suffered. Thus, there can be damage without injury in those instances
in which the loss or harm was not the result of a violation of a legal duty. These
situations are often called damnum absque injuria.9
In order that a plaintiff may maintain an action for the injuries of which he
complains, he must establish that such injuries resulted from a breach of duty
which the defendant owed to the plaintiff a concurrence of injury to the plaintiff
and legal responsibility by the person causing it. 10 The underlying basis for the
award of tort damages is the premise that an individual was injured in
contemplation of law. Thus, there must first be the breach of some duty and
the imposition of liability for that breach before damages may be awarded; it is
not sufficient to state that there should be tort liability merely because the
plaintiff suffered some pain and suffering.11
Many accidents occur and many injuries are inflicted by acts or omissions
which cause damage or loss to another but which violate no legal duty to such
other person, and consequently create no cause of action in his favor. In such
cases, the consequences must be borne by the injured person alone. The law
affords no remedy for damages resulting from an act which does not amount
to a legal injury or wrong.12
In other words, in order that the law will give redress for an act causing
damage, that act must be not only hurtful, but wrongful. There must
be damnum et injuria.13 If, as may happen in many cases, a person sustains
actual damage, that is, harm or loss to his person or property, without
sustaining any legal injury, that is, an act or omission which the law does not
deem an injury, the damage is regarded as damnum absque injuria.14
In the case at bar, although there was damage, there was no legal injury.
Contrary to the claim of private respondents, petitioners could not be said to
have violated the principle of abuse of right. In order that the principle of abuse
of right provided in Article 21 of the Civil Code can be applied, it is essential
that the following requisites concur: (1) The defendant should have acted in a
manner that is contrary to morals, good customs or public policy; (2) The acts
should be willful; and (3) There was damage or injury to the plaintiff.15
The act of petitioners in constructing a fence within their lot is a valid exercise WHEREFORE, under the compulsion of the foregoing premises, the appealed
of their right as owners, hence not contrary to morals, good customs or public decision of respondent Court of Appeals is hereby REVERSED and SET
policy. The law recognizes in the owner the right to enjoy and dispose of a ASIDE and the judgment of the trial court is correspondingly REINSTATED.
thing, without other limitations than those established by law. 16 It is within the
right of petitioners, as owners, to enclose and fence their property. Article 430
of the Civil Code provides that "(e)very owner may enclose or fence his land
or tenements by means of walls, ditches, live or dead hedges, or by any other
means without detriment to servitudes constituted thereon."

At the time of the construction of the fence, the lot was not subject to any
servitudes. There was no easement of way existing in favor of private
respondents, either by law or by contract. The fact that private respondents
had no existing right over the said passageway is confirmed by the very
decision of the trial court granting a compulsory right of way in their favor after
payment of just compensation. It was only that decision which gave private
respondents the right to use the said passageway after payment of the
compensation and imposed a corresponding duty on petitioners not to interfere
in the exercise of said right.

Hence, prior to said decision, petitioners had an absolute right over their
property and their act of fencing and enclosing the same was an act which they
may lawfully perform in the employment and exercise of said right. To repeat,
whatever injury or damage may have been sustained by private respondents
by reason of the rightful use of the said land by petitioners is damnum absque
injuria.17

A person has a right to the natural use and enjoyment of his own property,
according to his pleasure, for all the purposes to which such property is usually
applied. As a general rule, therefore, there is no cause of action for acts done
by one person upon his own property in a lawful and proper manner, although
such acts incidentally cause damage or an unavoidable loss to another, as
such damage or loss is damnum absque injuria. 18 When the owner of property
makes use thereof in the general and ordinary manner in which the property is
used, such as fencing or enclosing the same as in this case, nobody can
complain of having been injured, because the incovenience arising from said
use can be considered as a mere consequence of community life. 19

The proper exercise of a lawful right cannot constitute a legal wrong for which
an action will lie, 20 although the act may result in damage to another, for no
legal right has been invaded. 21 One may use any lawful means to accomplish
a lawful purpose and though the means adopted may cause damage to
another, no cause of action arises in the latter's favor. An injury or damage
occasioned thereby is damnum absque injuria. The courts can give no redress
for hardship to an individual resulting from action reasonably calculated to
achieve a lawful means. 22
G.R. No. 97336 February 19, 1993
GASHEM SHOOKAT BAKSH, petitioner, vs. HON. COURT OF APPEALS
and MARILOU T. GONZALES, respondents.
DAVIDE, JR., J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to
review and set aside the Decision1 of the respondent Court of Appeals in CA-
G.R. CV No. 24256 which affirmed in toto the 16 October 1939 Decision of
Branch 38 (Lingayen) of the Regional Trial Court (RTC) of Pangasinan in Civil
Case No. 16503. Presented is the issue of whether or not damages may be
recovered for a breach of promise to marry on the basis of Article 21 of the
Civil Code of the Philippines.
The antecedents of this case are not complicated:
On 27 October 1987, private respondent, without the assistance of counsel,
filed with the aforesaid trial court a complaint 2 for damages against the
petitioner for the alleged violation of their agreement to get married. She
alleges in said complaint that: she is twenty-two (22) years old, single, Filipino
and a pretty lass of good moral character and reputation duly respected in her
community; petitioner, on the other hand, is an Iranian citizen residing at the
Lozano Apartments, Guilig, Dagupan City, and is an exchange student taking
a medical course at the Lyceum Northwestern Colleges in Dagupan City;
before 20 August 1987, the latter courted and proposed to marry her; she
accepted his love on the condition that they would get married; they therefore
agreed to get married after the end of the school semester, which was in
October of that year; petitioner then visited the private respondent's parents in
Bañaga, Bugallon, Pangasinan to secure their approval to the marriage;
sometime in 20 August 1987, the petitioner forced her to live with him in the
Lozano Apartments; she was a virgin before she began living with him; a week
before the filing of the complaint, petitioner's attitude towards her started to
change; he maltreated and threatened to kill her; as a result of such
maltreatment, she sustained injuries; during a confrontation with a
representative of the barangay captain of Guilig a day before the filing of the
complaint, petitioner repudiated their marriage agreement and asked her not
to live with him anymore and; the petitioner is already married to someone
living in Bacolod City. Private respondent then prayed for judgment ordering
the petitioner to pay her damages in the amount of not less than P45,000.00,
reimbursement for actual expenses amounting to P600.00, attorney's fees and
costs, and granting her such other relief and remedies as may be just and
equitable. The complaint was docketed as Civil Case No. 16503.
In his Answer with Counterclaim,3 petitioner admitted only the personal
circumstances of the parties as averred in the complaint and denied the rest
of the allegations either for lack of knowledge or information sufficient to form
a belief as to the truth thereof or because the true facts are those alleged as
his Special and Affirmative Defenses. He thus claimed that he never proposed
marriage to or agreed to be married with the private respondent; he neither
sought the consent and approval of her parents nor forced her to live in his
apartment; he did not maltreat her, but only told her to stop coming to his place
because he discovered that she had deceived him by stealing his money and
passport; and finally, no confrontation took place with a representative of the
barangay captain. Insisting, in his Counterclaim, that the complaint is baseless
and unfounded and that as a result thereof, he was unnecessarily dragged into
court and compelled to incur expenses, and has suffered mental anxiety and
a besmirched reputation, he prayed for an award of P5,000.00 for
miscellaneous expenses and P25,000.00 as moral damages.
After conducting a pre-trial on 25 January 1988, the trial court issued a Pre-
Trial Order4 embodying the stipulated facts which the parties had agreed upon,
to wit:
1. That the plaintiff is single and resident (sic) of Bañaga,
Bugallon, Pangasinan, while the defendant is single, Iranian
citizen and resident (sic) of Lozano Apartment, Guilig,
Dagupan City since September 1, 1987 up to the present;
2. That the defendant is presently studying at Lyceum
Northwestern, Dagupan City, College of Medicine, second
year medicine proper;
3. That the plaintiff is (sic) an employee at Mabuhay
Luncheonette , Fernandez Avenue, Dagupan City since July,
1986 up to the present and a (sic) high school graduate;
4. That the parties happened to know each other when the
manager of the Mabuhay Luncheonette, Johhny Rabino
introduced the defendant to the plaintiff on August 3, 1986.
After trial on the merits, the lower court, applying Article 21 of the Civil Code,
rendered on 16 October 1989 a decision5 favoring the private respondent. The
petitioner was thus ordered to pay the latter damages and attorney's fees; the
dispositive portion of the decision reads:
IN THE LIGHT of the foregoing consideration, judgment is hereby rendered
in favor of the plaintiff and against the defendant.
 1. Condemning (sic) the defendant to pay the plaintiff the sum of twenty
thousand (P20,000.00) pesos as moral damages.
2. Condemning further the defendant to play the plaintiff the sum of three
thousand (P3,000.00) pesos as atty's fees and two thousand (P2,000.00)
pesos at (sic) litigation expenses and to pay the costs.
3. All other claims are denied.6
The decision is anchored on the trial court's findings and conclusions that (a)
petitioner and private respondent were lovers, (b) private respondent is not a
woman of loose morals or questionable virtue who readily submits to sexual
advances, (c) petitioner, through machinations, deceit and false pretenses,
promised to marry private respondent, d) because of his persuasive promise
to marry her, she allowed herself to be deflowered by him, (e) by reason of that
deceitful promise, private respondent and her parents — in accordance with
Filipino customs and traditions — made some preparations for the wedding
that was to be held at the end of October 1987 by looking for pigs and chickens,
inviting friends and relatives and contracting sponsors, (f) petitioner did not
fulfill his promise to marry her and (g) such acts of the petitioner, who is a
foreigner and who has abused Philippine hospitality, have offended our sense
of morality, good customs, culture and traditions. The trial court gave full credit
to the private respondent's testimony because, inter alia, she would not have
had the temerity and courage to come to court and expose her honor and
reputation to public scrutiny and ridicule if her claim was false.7
The above findings and conclusions were culled from the detailed summary of
the evidence for the private respondent in the foregoing decision, digested by
the respondent Court as follows:
According to plaintiff, who claimed that she was a virgin at the time and
that she never had a boyfriend before, defendant started courting her just
a few days after they first met. He later proposed marriage to her several
times and she accepted his love as well as his proposal of marriage on
August 20, 1987, on which same day he went with her to her hometown
of Bañaga, Bugallon, Pangasinan, as he wanted to meet her parents and
inform them of their relationship and their intention to get married. The
photographs Exhs. "A" to "E" (and their submarkings) of defendant with
members of plaintiff's family or with plaintiff, were taken that day. Also on
that occasion, defendant told plaintiffs parents and brothers and sisters
that he intended to marry her during the semestral break in October, 1987,
and because plaintiff's parents thought he was good and trusted him, they
agreed to his proposal for him to marry their daughter, and they likewise
allowed him to stay in their house and sleep with plaintiff during the few
days that they were in Bugallon. When plaintiff and defendant later
returned to Dagupan City, they continued to live together in defendant's
apartment. However, in the early days of October, 1987, defendant would
tie plaintiff's hands and feet while he went to school, and he even gave
her medicine at 4 o'clock in the morning that made her sleep the whole
day and night until the following day. As a result of this live-in relationship,
plaintiff became pregnant, but defendant gave her some medicine to abort
the fetus. Still plaintiff continued to live with defendant and kept reminding
him of his promise to marry her until he told her that he could not do so
because he was already married to a girl in Bacolod City. That was the
time plaintiff left defendant, went home to her parents, and thereafter
consulted a lawyer who accompanied her to the barangay captain in
Dagupan City. Plaintiff, her lawyer, her godmother, and a barangay tanod
sent by the barangay captain went to talk to defendant to still convince
him to marry plaintiff, but defendant insisted that he could not do so
because he was already married to a girl in Bacolod City, although the
truth, as stipulated by the parties at the pre-trial, is that defendant is still
single.
Plaintiff's father, a tricycle driver, also claimed that after defendant had
informed them of his desire to marry Marilou, he already looked for
sponsors for the wedding, started preparing for the reception by looking
for pigs and chickens, and even already invited many relatives and friends
to the forthcoming wedding. 8
Petitioner appealed the trial court's decision to the respondent Court of
Appeals which docketed the case as CA-G.R. CV No. 24256. In his Brief,9 he
contended that the trial court erred (a) in not dismissing the case for lack of
factual and legal basis and (b) in ordering him to pay moral damages,
attorney's fees, litigation expenses and costs.
On 18 February 1991, respondent Court promulgated the challenged
decision 10 affirming in toto the trial court's ruling of 16 October 1989. In
sustaining the trial court's findings of fact, respondent Court made the following
analysis:
First of all, plaintiff, then only 21 years old when she met defendant
who was already 29 years old at the time, does not appear to be a girl
of loose morals. It is uncontradicted that she was a virgin prior to her
unfortunate experience with defendant and never had boyfriend. She
is, as described by the lower court, a barrio lass "not used and
accustomed to trend of modern urban life", and certainly would (sic)
not have allowed
"herself to be deflowered by the defendant if there was no persuasive
promise made by the defendant to marry her." In fact, we agree with
the lower court that plaintiff and defendant must have been
sweethearts or so the plaintiff must have thought because of the
 deception of defendant, for otherwise, she would not have allowed
herself to be photographed with defendant in public in so (sic) loving
and tender poses as those depicted in the pictures Exhs. "D" and "E".
We cannot believe, therefore, defendant's pretense that plaintiff was a
nobody to him except a waitress at the restaurant where he usually
ate. Defendant in fact admitted that he went to plaintiff's hometown of
Bañaga, Bugallon, Pangasinan, at least thrice; at (sic) the town fiesta
on February 27, 1987 (p. 54, tsn May 18, 1988), at (sic) a beach party
together with the manager and employees of the Mabuhay
Luncheonette on March 3, 1987 (p. 50, tsn id.), and on April 1, 1987
when he allegedly talked to plaintiff's mother who told him to marry her
daughter (pp. 55-56, tsn id.). Would defendant have left Dagupan City
where he was involved in the serious study of medicine to go to
plaintiff's hometown in Bañaga, Bugallon, unless there was (sic) some
kind of special relationship between them? And this special
relationship must indeed have led to defendant's insincere proposal of
marriage to plaintiff, communicated not only to her but also to her
parents, and (sic) Marites Rabino, the owner of the restaurant where
plaintiff was working and where defendant first proposed marriage to
her, also knew of this love affair and defendant's proposal of marriage
to plaintiff, which she declared was the reason why plaintiff resigned
from her job at the restaurant after she had accepted defendant's
proposal (pp. 6-7, tsn March 7, 1988).
Upon the other hand, appellant does not appear to be a man of good
moral character and must think so low and have so little respect and
regard for Filipino women that he openly admitted that when he
studied in Bacolod City for several years where he finished his B.S.
Biology before he came to Dagupan City to study medicine, he had a
common-law wife in Bacolod City. In other words, he also lived with
another woman in Bacolod City but did not marry that woman, just like
what he did to plaintiff. It is not surprising, then, that he felt so little
compunction or remorse in pretending to love and promising to marry
plaintiff, a young, innocent, trustful country girl, in order to satisfy his
lust on her. 11
and then concluded:
In sum, we are strongly convinced and so hold that it was defendant-
appellant's fraudulent and deceptive protestations of love for and
promise to marry plaintiff that made her surrender her virtue and
womanhood to him and to live with him on the honest and sincere
belief that he would keep said promise, and it was likewise these (sic)
fraud and deception on appellant's part that made plaintiff's parents
agree to their daughter's living-in with him preparatory to their
supposed marriage. And as these acts of appellant are palpably and
undoubtedly against morals, good customs, and public policy, and are
even gravely and deeply derogatory and insulting to our women,
coming as they do from a foreigner who has been enjoying the
hospitality of our people and taking advantage of the opportunity to
study in one of our institutions of learning, defendant-appellant should
indeed be made, under Art. 21 of the Civil Code of the Philippines, to
compensate for the moral damages and injury that he had caused
plaintiff, as the lower court ordered him to do in its decision in this
case. 12
Unfazed by his second defeat, petitioner filed the instant petition on 26 March
1991; he raises therein the single issue of whether or not Article 21 of the Civil
Code applies to the case at bar. 13
It is petitioner's thesis that said Article 21 is not applicable because he had not
committed any moral wrong or injury or violated any good custom or public
policy; he has not professed love or proposed marriage to the private
respondent; and he has never maltreated her. He criticizes the trial court for
liberally invoking Filipino customs, traditions and culture, and ignoring the fact
that since he is a foreigner, he is not conversant with such Filipino customs,
traditions and culture. As an Iranian Moslem, he is not familiar with Catholic
and Christian ways. He stresses that even if he had made a promise to marry,
the subsequent failure to fulfill the same is excusable or tolerable because of
his Moslem upbringing; he then alludes to the Muslim Code which purportedly
allows a Muslim to take four (4) wives and concludes that on the basis thereof,
the trial court erred in ruling that he does not posses good moral character.
Moreover, his controversial "common law life" is now his legal wife as their
marriage had been solemnized in civil ceremonies in the Iranian Embassy. As
to his unlawful cohabitation with the private respondent, petitioner claims that
even if responsibility could be pinned on him for the live-in relationship, the
private respondent should also be faulted for consenting to an illicit
arrangement. Finally, petitioner asseverates that even if it was to be
assumed arguendo that he had professed his love to the private respondent
and had also promised to marry her, such acts would not be actionable in view
of the special circumstances of the case. The mere breach of promise is not
actionable. 14
On 26 August 1991, after the private respondent had filed her Comment to the
petition and the petitioner had filed his Reply thereto, this Court gave due
course to the petition and required the parties to submit their respective
Memoranda, which they subsequently complied with.
As may be gleaned from the foregoing summation of the petitioner's arguments
in support of his thesis, it is clear that questions of fact, which boil down to the
issue of the credibility of witnesses, are also raised. It is the rule in this
jurisdiction that appellate courts will not disturb the trial court's findings as to
the credibility of witnesses, the latter court having heard the witnesses and
having had the opportunity to observe closely their deportment and manner of
testifying, unless the trial court had plainly overlooked facts of substance or
value which, if considered, might affect the result of the case. 15
Petitioner has miserably failed to convince Us that both the appellate and trial
courts had overlooked any fact of substance or values which could alter the
result of the case.
Equally settled is the rule that only questions of law may be raised in a petition
for review on certiorari under Rule 45 of the Rules of Court. It is not the function
of this Court to analyze or weigh all over again the evidence introduced by the
parties before the lower court. There are, however, recognized exceptions to
this rule. Thus, in Medina vs.Asistio, Jr., 16 this Court took the time, again, to
enumerate these exceptions:
xxx xxx xxx
(1) When the conclusion is a finding grounded entirely on speculation,
surmises or conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2)
When the inference made is manifestly mistaken, absurb or impossible
(Luna v. Linatok, 74 Phil. 15 [1942]); (3) Where there is a grave abuse
of discretion (Buyco v. People, 95 Phil. 453 [1955]); (4) When the
judgment is based on a misapprehension of facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are conflicting
(Casica v. Villaseca, L-9590 Ap. 30, 1957; unrep.) (6) When the Court
of Appeals, in making its findings, went beyond the issues of the case
and the same is contrary to the admissions of both appellate and
appellee (Evangelista v. Alto Surety and Insurance Co., 103 Phil. 401
[1958]);
(7) The findings of the Court of Appeals are contrary to those of the trial
court (Garcia v. Court of Appeals, 33 SCRA 622 [1970]; Sacay v.
Sandiganbayan, 142 SCRA 593 [1986]); (8) When the findings of fact
are conclusions without citation of specific evidence on which they are
based (Ibid.,); (9) When the facts set forth in the petition as well as in
the petitioners main and reply briefs are not disputed by the respondents
(Ibid.,); and (10) The finding of fact of the Court of Appeals is premised
on the supposed absence of evidence and is contradicted by the
evidence on record (Salazar v. Gutierrez, 33 SCRA 242 [1970]).
Petitioner has not endeavored to joint out to Us the existence of any of the
above quoted exceptions in this case. Consequently, the factual findings of the
trial and appellate courts must be respected.
And now to the legal issue.
The existing rule is that a breach of promise to marry per se is not an
actionable wrong. 17 Congress deliberately eliminated from the draft of the
New Civil Code the provisions that would have made it so. The reason therefor
is set forth in the report of the Senate Committees on the Proposed Civil Code,
from which We quote:
The elimination of this chapter is proposed. That breach of
promise to marry is not actionable has been definitely decided
in the case of De Jesus vs. Syquia. 18 The history of breach of
promise suits in the United States and in England has shown
that no other action lends itself more readily to abuse by
designing women and unscrupulous men. It is this experience
which has led to the abolition of rights of action in the so-called
Heart Balm suits in many of the American states. . . . 19
This notwithstanding, the said Code contains a provision, Article 21, which is
designed to expand the concept of torts or quasi-delict in this jurisdiction by
granting adequate legal remedy for the untold number of moral wrongs which
is impossible for human foresight to specifically enumerate and punish in the
statute books. 20
As the Code Commission itself stated in its Report:
But the Code Commission had gone farther than the sphere of wrongs
defined or determined by positive law. Fully sensible that there are
countless gaps in the statutes, which leave so many victims of moral
wrongs helpless, even though they have actually suffered material and
moral injury, the Commission has deemed it necessary, in the interest
of justice, to incorporate in the proposed Civil Code the following rule:
Art. 23. Any person who wilfully causes loss
or injury to another in a manner that is
contrary to morals, good customs or public
policy shall compensate the latter for the
damage.
An example will illustrate the purview of the foregoing norm: "A" seduces
the nineteen-year old daughter of "X". A promise of marriage either has
not been made, or can not be proved. The girl becomes pregnant. Under
the present laws, there is no crime, as the girl is above nineteen years
of age. Neither can any civil action for breach of promise of marriage be
filed. Therefore, though the grievous moral wrong has been committed,
and though the girl and family have suffered incalculable moral damage,
she and her parents cannot bring action for damages. But under the
proposed article, she and her parents would have such a right of action.
 Thus at one stroke, the legislator, if the forgoing rule is approved, would
vouchsafe adequate legal remedy for that untold number of moral
wrongs which it is impossible for human foresight to provide for
specifically in the statutes. 21
Article 2176 of the Civil Code, which defines a quasi-delict thus:
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.
is limited to negligent acts or omissions and excludes the notion of
willfulness or intent. Quasi-delict, known in Spanish legal treatises as culpa
aquiliana, is a civil law concept while torts is an Anglo-American or common
law concept. Torts is much broader than culpa aquiliana because it
includes not only negligence, but international criminal acts as well such as
assault and battery, false imprisonment and deceit. In the general scheme
of the Philippine legal system envisioned by the Commission responsible
for drafting the New Civil Code, intentional and malicious acts, with certain
exceptions, are to be governed by the Revised Penal Code while negligent
acts or omissions are to be covered by Article 2176 of the Civil Code. 22 In
between these opposite spectrums are injurious acts which, in the absence
of Article 21, would have been beyond redress. Thus, Article 21 fills that
vacuum. It is even postulated that together with Articles 19 and 20 of the
Civil Code, Article 21 has greatly broadened the scope of the law on civil
wrongs; it has become much more supple and adaptable than the Anglo-
American law on torts. 23
In the light of the above laudable purpose of Article 21, We are of the opinion,
and so hold, that where a man's promise to marry is in fact the proximate cause
of the acceptance of his love by a woman and his representation to fulfill that
promise thereafter becomes the proximate cause of the giving of herself unto
him in a sexual congress, proof that he had, in reality, no intention of marrying
her and that the promise was only a subtle scheme or deceptive device to
entice or inveigle her to accept him and to obtain her consent to the sexual act,
could justify the award of damages pursuant to Article 21 not because of such
promise to marry but because of the fraud and deceit behind it and the willful
injury to her honor and reputation which followed thereafter. It is essential,
however, that such injury should have been committed in a manner contrary
to morals, good customs or public policy.
In the instant case, respondent Court found that it was the petitioner's
"fraudulent and deceptive protestations of love for and promise to marry
plaintiff that made her surrender her virtue and womanhood to him and to live
with him on the honest and sincere belief that he would keep said promise,
and it was likewise these fraud and deception on appellant's part that made
plaintiff's parents agree to their daughter's living-in with him preparatory to their
supposed marriage." 24 In short, the private respondent surrendered her
virginity, the cherished possession of every single Filipina, not because of lust
but because of moral seduction — the kind illustrated by the Code Commission
in its example earlier adverted to. The petitioner could not be held liable for
criminal seduction punished under either Article 337 or Article 338 of the
Revised Penal Code because the private respondent was above eighteen (18)
years of age at the time of the seduction.
Prior decisions of this Court clearly suggest that Article 21 may be applied in a
breach of promise to marry where the woman is a victim of moral seduction.
Thus, in Hermosisima vs. Court of Appeals,25 this Court denied recovery of
damages to the woman because:
. . . we find ourselves unable to say that petitioner is morally guilty of
seduction, not only because he is approximately ten (10) years younger
than the complainant — who was around thirty-six (36) years of age,
and as highly enlightened as a former high school teacher and a life
insurance agent are supposed to be — when she became intimate with
petitioner, then a mere apprentice pilot, but, also, because the court of
first instance found that, complainant "surrendered herself" to petitioner
because, "overwhelmed by her love" for him, she "wanted to bind" him
by having a fruit of their engagement even before they had the benefit
of clergy.
In Tanjanco vs. Court of Appeals, 26 while this Court likewise hinted at possible
recovery if there had been moral seduction, recovery was eventually denied
because We were not convinced that such seduction existed. The following
enlightening disquisition and conclusion were made in the said case:
The Court of Appeals seem to have overlooked that the example set forth
in the Code Commission's memorandum refers to a tort upon a minor who
had been seduced. The essential feature is seduction, that in law is more
than mere sexual intercourse, or a breach of a promise of marriage; it
connotes essentially the idea of deceit, enticement, superior power or
abuse of confidence on the part of the seducer to which the woman has
yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil.
595).
It has been ruled in the Buenaventura case (supra) that —
 To constitute seduction there must in all cases be some
sufficient promise or inducement and the woman must
yield because of the promise or other inducement. If she
consents merely from carnal lust and the intercourse is
from mutual desire, there is no seduction (43 Cent. Dig.
tit. Seduction, par. 56) She must be induced to depart
from the path of virtue by the use of some species of
arts, persuasions and wiles, which are calculated to
have and do have that effect, and which result in her
person to ultimately submitting her person to the sexual
embraces of her seducer (27 Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the woman, the
enticement, persuasion or deception is the essence of
the injury; and a mere proof of intercourse is insufficient
to warrant a recovery.
Accordingly it is not seduction where the willingness
arises out of sexual desire of curiosity of the female, and
the defendant merely affords her the needed
opportunity for the commission of the act. It has been
emphasized that to allow a recovery in all such cases
would tend to the demoralization of the female sex, and
would be a reward for unchastity by which a class of
adventuresses would be swift to profit. (47 Am. Jur.
662)
xxx xxx xxx
Over and above the partisan allegations, the fact stand out
that for one whole year, from 1958 to 1959, the plaintiff-
appellee, a woman of adult age, maintain intimate sexual
relations with appellant, with repeated acts of intercourse.
Such conduct is incompatible with the idea of seduction.
Plainly there is here voluntariness and mutual passion; for had
the appellant been deceived, had she surrendered exclusively
because of the deceit, artful persuasions and wiles of the
defendant, she would not have again yielded to his embraces,
much less for one year, without exacting early fulfillment of the
alleged promises of marriage, and would have cut short all
sexual relations upon finding that defendant did not intend to
fulfill his defendant did not intend to fulfill his promise. Hence,
we conclude that no case is made under article 21 of the Civil
Code, and no other cause of action being alleged, no error
was committed by the Court of First Instance in dismissing the
complaint. 27
In his annotations on the Civil Code, 28 Associate Justice Edgardo L. Paras,
who recently retired from this Court, opined that in a breach of promise to marry
where there had been carnal knowledge, moral damages may be recovered:
. . . if there be criminal or moral seduction, but not if the
intercourse was due to mutual lust. (Hermosisima vs. Court of
Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733,
Sept. 30, 1960; Batarra vs. Marcos, 7 Phil. 56 (sic); Beatriz
Galang vs. Court of Appeals, et al., L-17248, Jan. 29, 1962).
(In other words, if the CAUSE be the promise to marry, and
the EFFECT be the carnal knowledge, there is a chance that
there was criminal or moral seduction, hence recovery of
moral damages will prosper. If it be the other way around,
there can be no recovery of moral damages, because here
mutual lust has intervened). . . .
together with "ACTUAL damages, should there be any, such as the
expenses for the wedding presentations (See Domalagon v. Bolifer,
33 Phil. 471).
Senator Arturo M. Tolentino 29 is also of the same persuasion:
It is submitted that the rule in Batarra vs. Marcos, 30 still
subsists, notwithstanding the incorporation of the present
article31 in the Code. The example given by the Code
Commission is correct, if there was seduction, not necessarily
in the legal sense, but in the vulgar sense of deception. But
when the sexual act is accomplished without any deceit or
qualifying circumstance of abuse of authority or influence, but
the woman, already of age, has knowingly given herself to a
man, it cannot be said that there is an injury which can be the
basis for indemnity.
But so long as there is fraud, which is characterized by
willfulness (sic), the action lies. The court, however, must
weigh the degree of fraud, if it is sufficient to deceive the
woman under the circumstances, because an act which would
deceive a girl sixteen years of age may not constitute deceit
as to an experienced woman thirty years of age. But so long
as there is a wrongful act and a resulting injury, there should
 be civil liability, even if the act is not punishable under the
criminal law and there should have been an acquittal or
dismissal of the criminal case for that reason.
We are unable to agree with the petitioner's alternative proposition to the effect
that granting, for argument's sake, that he did promise to marry the private
respondent, the latter is nevertheless also at fault. According to him, both
parties are in pari delicto; hence, pursuant to Article 1412(1) of the Civil Code
and the doctrine laid down in Batarra vs. Marcos, 32 the private respondent
cannot recover damages from the petitioner. The latter even goes as far as
stating that if the private respondent had "sustained any injury or damage in
their relationship, it is primarily because of her own doing, 33 for:
. . . She is also interested in the petitioner as the latter will
become a doctor sooner or later. Take notice that she is a
plain high school graduate and a mere employee . . . (Annex
"C") or a waitress (TSN, p. 51, January 25, 1988) in a
luncheonette and without doubt, is in need of a man who can
give her economic security. Her family is in dire need of
financial assistance. (TSN, pp. 51-53, May 18, 1988). And this
predicament prompted her to accept a proposition that may
have been offered by the petitioner. 34
These statements reveal the true character and motive of the petitioner. It is
clear that he harbors a condescending, if not sarcastic, regard for the private
respondent on account of the latter's ignoble birth, inferior educational
background, poverty and, as perceived by him, dishonorable employment.
Obviously then, from the very beginning, he was not at all moved by good faith
and an honest motive. Marrying with a woman so circumstances could not
have even remotely occurred to him. Thus, his profession of love and promise
to marry were empty words directly intended to fool, dupe, entice, beguile and
deceive the poor woman into believing that indeed, he loved her and would
want her to be his life's partner. His was nothing but pure lust which he wanted
satisfied by a Filipina who honestly believed that by accepting his proffer of
love and proposal of marriage, she would be able to enjoy a life of ease and
security. Petitioner clearly violated the Filipino's concept of morality and
brazenly defied the traditional respect Filipinos have for their women. It can
even be said that the petitioner committed such deplorable acts in blatant
disregard of Article 19 of the Civil Code which directs every person to act with
justice, give everyone his due and observe honesty and good faith in the
exercise of his rights and in the performance of his obligations.
No foreigner must be allowed to make a mockery of our laws, customs and
traditions.
The pari delicto rule does not apply in this case for while indeed, the private
respondent may not have been impelled by the purest of intentions, she
eventually submitted to the petitioner in sexual congress not out of lust, but
because of moral seduction. In fact, it is apparent that she had qualms of
conscience about the entire episode for as soon as she found out that the
petitioner was not going to marry her after all, she left him. She is not,
therefore, in pari delicto with the petitioner. Pari delicto means "in equal fault;
in a similar offense or crime; equal in guilt or in legal fault." 35At most, it could
be conceded that she is merely in delicto.
Equity often interferes for the relief of the less guilty of the
parties, where his transgression has been brought about by
the imposition of undue influence of the party on whom the
burden of the original wrong principally rests, or where his
consent to the transaction was itself procured by
fraud. 36
In Mangayao vs. Lasud, 37 We declared:
Appellants likewise stress that both parties being at fault,
there should be no action by one against the other (Art. 1412,
New Civil Code). This rule, however, has been interpreted as
applicable only where the fault on both sides is, more or less,
equivalent. It does not apply where one party is literate or
intelligent and the other one is not. (c.f. Bough vs. Cantiveros,
40 Phil. 209).
We should stress, however, that while We find for the private respondent, let
it not be said that this Court condones the deplorable behavior of her parents
in letting her and the petitioner stay together in the same room in their house
after giving approval to their marriage. It is the solemn duty of parents to protect
the honor of their daughters and infuse upon them the higher values of morality
and dignity.
WHEREFORE, finding no reversible error in the challenged decision, the
instant petition is hereby DENIED, with costs against the petitioner.
SO ORDERED.
G.R. No. 143958 July 11, 2003
ALFRED FRITZ FRENZEL, petitioner, vs. EDERLINA P.
CATITO, respondent.
CALLEJO, SR., J.:
Before us is a petition for review of the Decision 1 of the Court of Appeals in
CA-G.R. CV No. 53485 which affirmed the Decision 2 of the Regional Trial
Court of Davao City, Branch 14, in Civil Case No. 17,817 dismissing the
petitioner's complaint, and the resolution of the Court of Appeals denying his
motion for reconsideration of the said decision.
The Antecedents3
As gleaned from the evidence of the petitioner, the case at bar stemmed from
the following factual backdrop:
Petitioner Alfred Fritz Frenzel is an Australian citizen of German descent. He
is an electrical engineer by profession, but worked as a pilot with the New
Guinea Airlines. He arrived in the Philippines in 1974, started engaging in
business in the country two years thereafter, and married Teresita Santos, a
Filipino citizen. In 1981, Alfred and Teresita separated from bed and board
without obtaining a divorce.
Sometime in February 1983, Alfred arrived in Sydney, Australia for a vacation.
He went to King's Cross, a night spot in Sydney, for a massage where he met
Ederlina Catito, a Filipina and a native of Bajada, Davao City. Unknown to
Alfred, she resided for a time in Germany and was married to Klaus Muller, a
German national. She left Germany and tried her luck in Sydney, Australia,
where she found employment as a masseuse in the King's Cross nightclub.
She was fluent in German, and Alfred enjoyed talking with her. The two saw
each other again; this time Ederlina ended up staying in Alfred's hotel for three
days. Alfred gave Ederlina sums of money for her services. 4
Alfred was so enamored with Ederlina that he persuaded her to stop working
at King's Cross, return to the Philippines, and engage in a wholesome business
of her own. He also proposed that they meet in Manila, to which she assented.
Alfred gave her money for her plane fare to the Philippines. Within two weeks
of Ederlina's arrival in Manila, Alfred joined her. Alfred reiterated his proposal
for Ederlina to stay in the Philippines and engage in business, even offering to
finance her business venture. Ederlina was delighted at the idea and proposed
to put up a beauty parlor. Alfred happily agreed.
Alfred told Ederlina that he was married but that he was eager to divorce his
wife in Australia. Alfred proposed marriage to Ederlina, but she replied that
they should wait a little bit longer.
Ederlina found a building at No. 444 M.H. del Pilar corner Arquiza Street,
Ermita, Manila, owned by one Atty. Jose Hidalgo who offered to convey his
rights over the property for P18,000.00. Alfred and Ederlina accepted the offer.
Ederlina put up a beauty parlor on the property under the business name
Edorial Beauty Salon, and had it registered with the Department of Trade and
Industry under her name. Alfred paid Atty. Hidalgo P20,000.00 for his right
over the property and gave P300,000.00 to Ederlina for the purchase of
equipment and furniture for the parlor. As Ederlina was going to Germany, she
executed a special power of attorney on December 13, 19835 appointing her
brother, Aser Catito, as her attorney-in-fact in managing the beauty parlor
business. She stated in the said deed that she was married to Klaus Muller.
Alfred went back to Papua New Guinea to resume his work as a pilot.
When Alfred returned to the Philippines, he visited Ederlina in her Manila
residence and found it unsuitable for her. He decided to purchase a house and
lot owned by Victoria Binuya Steckel in San Francisco del Monte, Quezon City,
covered by Transfer Certificate of Title No. 218429 for US$20,000.00. Since
Alfred knew that as an alien he was disqualified from owning lands in the
Philippines, he agreed that only Ederlina's name would appear in the deed of
sale as the buyer of the property, as well as in the title covering the same. After
all, he was planning to marry Ederlina and he believed that after their marriage,
the two of them would jointly own the property. On January 23, 1984, a
Contract to Sell was entered into between Victoria Binuya Steckel as the
vendor and Ederlina as the sole vendee. Alfred signed therein as a
witness.6 Victoria received from Alfred, for and in behalf of Ederlina, the
amount of US$10,000.00 as partial payment, for which Victoria issued a
receipt.7 When Victoria executed the deed of absolute sale over the property
on March 6, 1984,8 she received from Alfred, for and in behalf of Ederlina, the
amount of US$10,000.00 as final and full payment. Victoria likewise issued a
receipt for the said amount.9 After Victoria had vacated the property, Ederlina
moved into her new house. When she left for Germany to visit Klaus, she had
her father Narciso Catito and her two sisters occupy the property.
Alfred decided to stay in the Philippines for good and live with Ederlina. He
returned to Australia and sold his fiber glass pleasure boat to John Reid for
$7,500.00 on May 4, 1984.10 He also sold his television and video business in
Papua New Guinea for K135,000.00 to Tekeraoi Pty. Ltd.11 He had his
personal properties shipped to the Philippines and stored at No. 14 Fernandez
Street, San Francisco del Monte, Quezon City. The proceeds of the sale were
deposited in Alfred's account with the Hong Kong Shanghai Banking
Corporation (HSBC), Kowloon Branch under Bank Account No. 018-2-
807016.12 When Alfred was in Papua New Guinea selling his other properties,
the bank sent telegraphic letters updating him of his account.13 Several checks
were credited to his HSBC bank account from Papua New Guinea Banking
Corporation, Westpac Bank of Australia and New Zealand Banking Group
Limited and Westpac Bank-PNG-Limited. Alfred also had a peso savings
account with HSBC, Manila, under Savings Account No. 01-725-183-01.14
Once, when Alfred and Ederlina were in Hong Kong, they opened another
account with HSBC, Kowloon, this time in the name of Ederlina, under Savings
Account No. 018-0-807950.15 Alfred transferred his deposits in Savings
Account No. 018-2-807016 with the said bank to this new account. Ederlina
also opened a savings account with the Bank of America Kowloon Main Office
under Account No. 30069016.16
On July 28, 1984, while Alfred was in Papua New Guinea, he received a Letter
dated December 7, 1983 from Klaus Muller who was then residing in Berlin,
Germany. Klaus informed Alfred that he and Ederlina had been married on
October 16, 1978 and had a blissful married life until Alfred intruded therein.
Klaus stated that he knew of Alfred and Ederlina's amorous relationship, and
discovered the same sometime in November 1983 when he arrived in Manila.
He also begged Alfred to leave Ederlina alone and to return her to him, saying
that Alfred could not possibly build his future on his (Klaus') misfortune. 17
Alfred had occasion to talk to Sally MacCarron, a close friend of Ederlina. He
inquired if there was any truth to Klaus' statements and Sally confirmed that
Klaus was married to Ederlina. When Alfred confronted Ederlina, she admitted
that she and Klaus were, indeed, married. But she assured Alfred that she
would divorce Klaus. Alfred was appeased. He agreed to continue the
amorous relationship and wait for the outcome of Ederlina's petition for divorce.
After all, he intended to marry her. He retained the services of Rechtsanwaltin
Banzhaf with offices in Berlin, as her counsel who informed her of the progress
of the proceedings.18 Alfred paid for the services of the lawyer.
In the meantime, Alfred decided to purchase another house and lot, owned by
Rodolfo Morelos covered by TCT No. 92456 located in Peña Street, Bajada,
Davao City.19 Alfred again agreed to have the deed of sale made out in the
name of Ederlina. On September 7, 1984, Rodolfo Morelos executed a deed
of absolute sale over the said property in favor of Ederlina as the sole vendee
for the amount of P80,000.00.20 Alfred paid US$12,500.00 for the property.
Alfred purchased another parcel of land from one Atty. Mardoecheo
Camporedondo, located in Moncado, Babak, Davao, covered by TCT No.
35251. Alfred once more agreed for the name of Ederlina to appear as the sole
vendee in the deed of sale. On December 31, 1984, Atty. Camporedondo
executed a deed of sale over the property for P65,000.00 in favor of Ederlina
as the sole vendee.21 Alfred, through Ederlina, paid the lot at the cost of
P33,682.00 and US$7,000.00, respectively, for which the vendor signed
receipts.22 On August 14, 1985, TCT No. 47246 was issued to Ederlina as the
sole owner of the said property.23
Meanwhile, Ederlina deposited on December 27, 1985, the total amount of
US$250,000 with the HSBC Kowloon under Joint Deposit Account No. 018-
462341-145.24
The couple decided to put up a beach resort on a four-hectare land in
Camudmud, Babak, Davao, owned by spouses Enrique and Rosela Serrano.
Alfred purchased the property from the spouses for P90,000.00, and the latter
issued a receipt therefor.25 A draftsman commissioned by the couple
submitted a sketch of the beach resort. 26 Beach houses were forthwith
constructed on a portion of the property and were eventually rented out by
Ederlina's father, Narciso Catito. The rentals were collected by Narciso, while
Ederlina kept the proceeds of the sale of copra from the coconut trees in the
property. By this time, Alfred had already spent P200,000.00 for the purchase,
construction and upkeep of the property.
Ederlina often wrote letters to her family informing them of her life with Alfred.
In a Letter dated January 21, 1985, she wrote about how Alfred had financed
the purchases of some real properties, the establishment of her beauty parlor
business, and her petition to divorce Klaus.27
Because Ederlina was preoccupied with her business in Manila, she executed
on July 8, 1985, two special powers of attorney28 appointing Alfred as attorney-
in-fact to receive in her behalf the title and the deed of sale over the property
sold by the spouses Enrique Serrano.
In the meantime, Ederlina's petition for divorce was denied because Klaus
opposed the same. A second petition filed by her met the same fate. Klaus
wanted half of all the properties owned by Ederlina in the Philippines before
he would agree to a divorce. Worse, Klaus threatened to file a bigamy case
against Ederlina.29
Alfred proposed the creation of a partnership to Ederlina, or as an alternative,
the establishment of a corporation, with Ederlina owning 30% of the equity
thereof. She initially agreed to put up a corporation and contacted Atty.
Armando Dominguez to prepare the necessary documents. Ederlina changed
her mind at the last minute when she was advised to insist on claiming
ownership over the properties acquired by them during their coverture.
Alfred and Ederlina's relationship started deteriorating. Ederlina had not been
able to secure a divorce from Klaus. The latter could charge her for bigamy
and could even involve Alfred, who himself was still married. To avoid
complications, Alfred decided to live separately from Ederlina and cut off all
contacts with her. In one of her letters to Alfred, Ederlina complained that he
had ruined her life. She admitted that the money used for the purchase of the
properties in Davao were his. She offered to convey the properties deeded to
her by Atty. Mardoecheo Camporedondo and Rodolfo Morelos, asking Alfred
to prepare her affidavit for the said purpose and send it to her for her
signature.30 The last straw for Alfred came on September 2, 1985, when
someone smashed the front and rear windshields of Alfred's car and damaged
the windows. Alfred thereafter executed an affidavit-complaint charging
Ederlina and Sally MacCarron with malicious mischief.31
On October 15, 1985, Alfred wrote to Ederlina's father, complaining that
Ederlina had taken all his life savings and because of this, he was virtually
penniless. He further accused the Catito family of acquiring for themselves the
properties he had purchased with his own money. He demanded the return of
all the amounts that Ederlina and her family had "stolen" and turn over all the
properties acquired by him and Ederlina during their coverture. 32
Shortly thereafter, Alfred filed a Complaint33 dated October 28, 1985, against
Ederlina, with the Regional Trial Court of Quezon City, for recovery of real and
personal properties located in Quezon City and Manila. In his complaint, Alfred
alleged, inter alia, that Ederlina, without his knowledge and consent, managed
to transfer funds from their joint account in HSBC Hong Kong, to her own
account with the same bank. Using the said funds, Ederlina was able to
purchase the properties subject of the complaints. He also alleged that the
beauty parlor in Ermita was established with his own funds, and that the
Quezon City property was likewise acquired by him with his personal funds.34
Ederlina failed to file her answer and was declared in default. Alfred adduced
his evidence ex parte.
In the meantime, on November 7, 1985, Alfred also filed a complaint35 against
Ederlina with the Regional Trial Court, Davao City, for specific performance,
declaration of ownership of real and personal properties, sum of money, and
damages. He alleged, inter alia, in his complaint:
4. That during the period of their common-law relationship, plaintiff
solely through his own efforts and resources acquired in the
Philippines real and personal properties valued more or less at
P724,000.00; The defendant's common-law wife or live-in partner did
not contribute anything financially to the acquisition of the said real
and personal properties. These properties are as follows:
I. Real Properties
a. TCT No. T-92456 located at Bajada, Davao City, consisting
of 286 square meters, (with residential house) registered in
the name of the original title owner Rodolfo M. Morelos but
already fully paid by plaintiff. Valued at P342,000.00;
b. TCT No. T-47246 (with residential house) located at Babak,
Samal, Davao, consisting of 600 square meters, registered in
the name of Ederlina Catito, with the Register of Deeds of
Tagum, Davao del Norte valued at P144,000.00;
c. A parcel of agricultural land located at Camudmud, Babak,
Samal, Davao del Norte, consisting of 4.2936 hectares
purchased from Enrique Serrano and Rosela B. Serrano.
Already paid in full by plaintiff. Valued at P228,608.32;
II. Personal Properties:
a. Furniture valued at P10,000.00.
...
5. That defendant made no contribution at all to the acquisition, of the
above-mentioned properties as all the monies (sic) used in acquiring
said properties belonged solely to plaintiff;36
Alfred prayed that after hearing, judgment be rendered in his favor:
WHEREFORE, in view of the foregoing premises, it is respectfully
prayed that judgment be rendered in favor of plaintiff and against
defendant:
a) Ordering the defendant to execute the corresponding deeds of
transfer and/or conveyances in favor of plaintiff over those real and
personal properties enumerated in Paragraph 4 of this complaint;
b) Ordering the defendant to deliver to the plaintiff all the above real
and personal properties or their money value, which are in defendant's
name and custody because these were acquired solely with plaintiffs
money and resources during the duration of the common-law
relationship between plaintiff and defendant, the description of which
are as follows:
(1) TCT No. T-92456 (with residential house) located at
Bajada, Davao City, consisting of 286 square meters,
 registered in the name of the original title owner Rodolfo
Morelos but already fully paid by plaintiff. Valued at
P342,000.00;
(2) TCT No. T-47246 (with residential house) located at
Babak, Samal, Davao, consisting of 600 square meters,
registered in the name of Ederlina Catito, with the Register of
Deeds of Tagum, Davao del Norte, valued at P144,000.00;
(3) A parcel of agricultural land located at Camudmud, Babak,
Samal, Davao del Norte, consisting of 4.2936 hectares
purchased from Enrique Serrano and Rosela B. Serrano.
Already fully paid by plaintiff. Valued at P228,608.32;
c) Declaring the plaintiff to be the sole and absolute owner of the
above-mentioned real and personal properties;
d) Awarding moral damages to plaintiff in an amount deemed
reasonable by the trial court;
e) To reimburse plaintiff the sum of P12,000.00 as attorney's fees for
having compelled the plaintiff to litigate;
f) To reimburse plaintiff the sum of P5,000.00 incurred as litigation
expenses also for having compelled the plaintiff to litigate; and
g) To pay the costs of this suit;
Plaintiff prays other reliefs just and equitable in the premises. 37
In her answer, Ederlina denied all the material allegations in the complaint,
insisting that she acquired the said properties with her personal funds, and as
such, Alfred had no right to the same. She alleged that the deeds of sale, the
receipts, and certificates of titles of the subject properties were all made out in
her name.38 By way of special and affirmative defense, she alleged that Alfred
had no cause of action against her. She interposed counterclaims against the
petitioner.39
In the meantime, the petitioner filed a Complaint dated August 25, 1987,
against the HSBC in the Regional Trial Court of Davao City40 for recovery of
bank deposits and damages.41 He prayed that after due proceedings,
judgment be rendered in his favor, thus:
WHEREFORE, plaintiff respectfully prays that the Honorable Court
adjudge defendant bank, upon hearing the evidence that the parties
might present, to pay plaintiff:
1. ONE HUNDRED TWENTY SIX THOUSAND TWO HUNDRED AND
THIRTY U.S. DOLLARS AND NINETY EIGHT CENTS
(US$126,230.98) plus legal interests, either of Hong Kong or of the
Philippines, from 20 December 1984 up to the date of execution or
satisfaction of judgment, as actual damages or in restoration of
plaintiffs lost dollar savings;
2. The same amount in (1) above as moral damages;
3. Attorney's fees in the amount equivalent to TWENTY FIVE PER
CENT (25%) of (1) and (2) above;
4. Litigation expenses in the amount equivalent to TEN PER CENT
(10%) of the amount in (1) above; and
5. For such other reliefs as are just and equitable under the
circumstances.42
On April 28, 1986, the RTC of Quezon City rendered its decision in Civil Case
No. Q-46350, in favor of Alfred, the decretal portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered
ordering the defendant to perform the following:
(1) To execute a document waiving her claim to the house and lot in
No. 14 Fernandez St., San Francisco Del Monte, Quezon City in favor
of plaintiff or to return to the plaintiff the acquisition cost of the same
in the amount of $20,000.00, or to sell the said property and turn over
the proceeds thereof to the plaintiff;
(2) To deliver to the plaintiff the rights of ownership and management
of the beauty parlor located at 444 Arquiza St., Ermita, Manila,
including the equipment and fixtures therein;
(3) To account for the earnings of rental of the house and lot in No. 14
Fernandez St., San Francisco Del Monte, Quezon City, as well as the
earnings in the beauty parlor at 444 Arquiza St., Ermita, Manila and
turn over one-half of the net earnings of both properties to the plaintiff;
 (4) To surrender or return to the plaintiff the personal properties of the
latter left in the house at San Francisco Del Monte, to wit:
"(1) Mamya automatic camera
(1) 12 inch "Sonny" T.V. set, colored with remote control.
(1) Micro oven
(1) Electric fan (tall, adjustable stand)
(1) Office safe with (2) drawers and safe
(1) Electric Washing Machine
(1) Office desk and chair
(1) Double bed suits
(1) Mirror/dresser
(1) Heavy duty voice/working mechanic
(1) "Sony" Beta-Movie camera
(1) Suitcase with personal belongings
(1) Cardboard box with belongings
(1) Guitar Amplifier
(1) Hanger with men's suit (white)."
To return to the plaintiff, (1) Hi-Fi Stereo equipment left at 444 Arquiza
Street, Ermita, Manila, as well as the Fronte Suzuki car.
(4) To account for the monies (sic) deposited with the joint account of
the plaintiff and defendant (Account No. 018-0-807950); and to restore
to the plaintiff all the monies (sic) spent by the defendant without
proper authority;
(5) To pay the amount of P5,000.00 by way of attorney's fees, and the
costs of suit.
SO ORDERED.43
However, after due proceedings in the RTC of Davao City, in Civil Case No.
17,817, the trial court rendered judgment on September 28, 1995 in favor of
Ederlina, the dispositive portion of which reads:
WHEREFORE, the Court cannot give due course to the complaint and
hereby orders its dismissal. The counterclaims of the defendant are
likewise dismissed.
SO ORDERED.44
The trial court ruled that based on documentary evidence, the purchaser of the
three parcels of land subject of the complaint was Ederlina. The court further
stated that even if Alfred was the buyer of the properties; he had no cause of
action against Ederlina for the recovery of the same because as an alien, he
was disqualified from acquiring and owning lands in the Philippines. The sale
of the three parcels of land to the petitioner was null and void ab initio. Applying
the pari delicto doctrine, the petitioner was precluded from recovering the
properties from the respondent.
Alfred appealed the decision to the Court of Appeals 45 in which the petitioner
posited the view that although he prayed in his complaint in the court a quo that
he be declared the owner of the three parcels of land, he had no intention of
owning the same permanently. His principal intention therein was to be
declared the transient owner for the purpose of selling the properties at public
auction, ultimately enabling him to recover the money he had spent for the
purchase thereof.
On March 8, 2000, the CA rendered a decision affirming in toto the decision of
the RTC. The appellate court ruled that the petitioner knowingly violated the
Constitution; hence, was barred from recovering the money used in the
purchase of the three parcels of land. It held that to allow the petitioner to
recover the money used for the purchase of the properties would embolden
aliens to violate the Constitution, and defeat, rather than enhance, the public
policy.46
Hence, the petition at bar.
The petitioner assails the decision of the court contending that:
THE HONORABLE COURT OF APPEALS ERRED IN APPLYING
THE RULE OF IN PARI DELICTO IN THE INSTANT CASE
BECAUSE BY THE FACTS AS NARRATED IN THE DECISION IT IS
APPARENT THAT THE PARTIES ARE NOT EQUALLY GUILTY BUT
RATHER IT WAS THE RESPONDENT WHO EMPLOYED FRAUD
AS WHEN SHE DID NOT INFORM PETITIONER THAT SHE WAS
ALREADY MARRIED TO ANOTHER GERMAN NATIONAL AND
WITHOUT SUCH FRAUDULENT DESIGN PETITIONER COULD
NOT HAVE PARTED WITH HIS MONEY FOR THE PURCHASE OF
THE PROPERTIES.47
and
THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING
THAT THE INTENTION OF THE PETITIONER IS NOT TO OWN
REAL PROPERTIES IN THE PHILIPPINES BUT TO SELL THEM AT
PUBLIC AUCTION TO BE ABLE TO RECOVER HIS MONEY USED
IN PURCHASING THEM.48
Since the assignment of errors are intertwined with each other, the Court shall
resolve the same simultaneously.
The petitioner contends that he purchased the three parcels of land subject of
his complaint because of his desire to marry the respondent, and not to violate
the Philippine Constitution. He was, however, deceived by the respondent
when the latter failed to disclose her previous marriage to Klaus Muller. It
cannot, thus, be said that he and the respondent are "equally guilty;" as such,
the pari delicto doctrine is not applicable to him. He acted in good faith, on the
advice of the respondent's uncle, Atty. Mardoecheo Camporedondo. There is
no evidence on record that he was aware of the constitutional prohibition
against aliens acquiring real property in the Philippines when he purchased
the real properties subject of his complaint with his own funds. The
transactions were not illegal per se but merely prohibited, and under Article
1416 of the New Civil Code, he is entitled to recover the money used for the
purchase of the properties. At any rate, the petitioner avers, he filed his
complaint in the court a quo merely for the purpose of having him declared as
the owner of the properties, to enable him to sell the same at public auction.
Applying by analogy Republic Act No. 13349 as amended by Rep. Act No. 4381
and Rep. Act No. 4882, the proceeds of the sale would be remitted to him, by
way of refund for the money he used to purchase the said properties. To bar
the petitioner from recovering the subject properties, or at the very least, the
money used for the purchase thereof, is to allow the respondent to enrich
herself at the expense of the petitioner in violation of Article 22 of the New Civil
Code.
The petition is bereft of merit.
Section 14, Article XIV of the 1973 Constitution provides, as follows:
Save in cases of hereditary succession, no private land shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands in the public domain.50
Lands of the public domain, which include private lands, may be transferred or
conveyed only to individuals or entities qualified to acquire or hold private lands
or lands of the public domain. Aliens, whether individuals or corporations, have
been disqualified from acquiring lands of the public domain. Hence, they have
also been disqualified from acquiring private lands.51
Even if, as claimed by the petitioner, the sales in question were entered into
by him as the real vendee, the said transactions are in violation of the
Constitution; hence, are null and void ab initio.52 A contract that violates the
Constitution and the law, is null and void and vests no rights and creates no
obligations. It produces no legal effect at all.53 The petitioner, being a party to
an illegal contract, cannot come into a court of law and ask to have his illegal
objective carried out. One who loses his money or property by knowingly
engaging in a contract or transaction which involves his own moral turpitude
may not maintain an action for his losses. To him who moves in deliberation
and premeditation, the law is unyielding.54 The law will not aid either party to
an illegal contract or agreement; it leaves the parties where it finds
them.55 Under Article 1412 of the New Civil Code, the petitioner cannot have
the subject properties deeded to him or allow him to recover the money he had
spent for the purchase thereof.56 Equity as a rule will follow the law and will not
permit that to be done indirectly which, because of public policy, cannot be
done directly.57 Where the wrong of one party equals that of the other, the
defendant is in the stronger position . . . it signifies that in such a situation,
neither a court of equity nor a court of law will administer a remedy. 58 The rule
is expressed. in the maxims: EX DOLO ORITUR ACTIO and IN PARI
DELICTO POTIOR EST CONDITIO DEFENDENTIS.59
The petitioner cannot feign ignorance of the constitutional proscription, nor
claim that he acted in good faith, let alone assert that he is less guilty than the
respondent. The petitioner is charged with knowledge of the constitutional
prohibition.60 As can be gleaned from the decision of the trial court, the
petitioner was fully aware that he was disqualified from acquiring and owning
lands under Philippine law even before he purchased the properties in
question; and, to skirt the constitutional prohibition, the petitioner had the deed
of sale placed under the respondent's name as the sole vendee thereof:
Such being the case, the plaintiff is subject to the constitutional
restrictions governing the acquisition of real properties in the
Philippines by aliens.
From the plaintiff's complaint before the Regional Trial Court, National
Capital Judicial Region, Branch 84, Quezon City in Civil Case No. Q-
46350 he alleged:
x x x "That on account that foreigners are not allowed by the
Philippine laws to acquire real properties in their name as in
the case of my vendor Miss Victoria Vinuya (sic) although
married to a foreigner, we agreed and I consented in having
the title to subject property placed in defendant's name alone
although I paid for the whole price out of my own exclusive
funds." (paragraph IV, Exhibit "W.")
and his testimony before this Court which is hereby quoted:
ATTY. ABARQUEZ:
 Q. In whose name the said house and lot placed, by the way, Q You were only separated, in fact, but not legally separated?
where is his house and lot located? A Thru my counsel in Australia I filed a separation case.
A. In 14 Fernandez St., San Francisco, del Monte, Manila. Q As of the present you are not legally divorce[d]?
Q. In whose name was the house placed? A I am still legally married.62
A. Ederlina Catito because I was informed being not a Filipino, I
cannot own the property. (tsn, p. 11, August 27, 1986). The respondent was herself married to Klaus Muller, a German citizen. Thus,
xxx xxx xxx the petitioner and the respondent could not lawfully join in wedlock. The
COURT: evidence on record shows that the petitioner in fact knew of the respondent's
Q. So you understand that you are a foreigner that you cannot marriage to another man, but nonetheless purchased the subject properties
buy land in the Philippines? under the name of the respondent and paid the purchase prices therefor. Even
A. That is correct but as she would eventually be my wife that if it is assumed gratia arguendi that the respondent and the petitioner were
would be owned by us later on. (tsn, p. 5, September 3, 1986) capacitated to marry, the petitioner is still disqualified to own the properties in
xxx xxx xxx tandem with the respondent.63
Q. What happened after that?
A. She said you foreigner you are using Filipinos to buy property. The petitioner cannot find solace in Article 1416 of the New Civil Code which
Q. And what did you answer?
reads:
A: I said thank you very much for the property I bought because
I gave you a lot of money (tsn., p. 14, ibid).
Art. 1416. When the agreement is not illegal per se but is merely
prohibited, and the prohibition by the law is designed for the protection
It is evident that the plaintiff was fully aware that as a non-citizen of the of the plaintiff, he may, if public policy is thereby enhanced, recover
Philippines, he was disqualified from validly purchasing any land within the
what he has paid or delivered.64
country.61
The provision applies only to those contracts which are merely prohibited, in
The petitioner's claim that he acquired the subject properties because of his order to benefit private interests. It does not apply to contracts void ab initio.
desire to marry the respondent, believing that both of them would thereafter
The sales of three parcels of land in favor of the petitioner who is a foreigner
jointly own the said properties, is belied by his own evidence. It is merely an is illegal per se. The transactions are void ab initio because they were entered
afterthought to salvage a lost cause. The petitioner admitted on cross-
into in violation of the Constitution. Thus, to allow the petitioner to recover the
examination that he was all along legally married to Teresita Santos Frenzel,
properties or the money used in the purchase of the parcels of land would be
while he was having an amorous relationship with the respondent: subversive of public policy.

ATTY. YAP:
Neither may the petitioner find solace in Rep. Act No. 133, as amended by
Rep. Act No. 4882, which reads:
Q When you were asked to identify yourself on direct examination
you claimed before this Honorable Court that your status is that of SEC. 1. Any provision of law to the contrary notwithstanding, private
being married, do you confirm that?
real property may be mortgaged in favor of any individual, corporation,
A Yes, sir.
or association, but the mortgagee or his successor-in-interest, if
Q To whom are you married?
disqualified to acquire or hold lands of the public domain in the
A To a Filipina, since 1976.
Philippines, shall not take possession of the mortgaged property
Q Would you tell us who is that particular person you are married during the existence of the mortgage and shall not take possession of
since 1976? mortgaged property except after default and for the sole purpose of
A Teresita Santos Frenzel.
foreclosure, receivership, enforcement or other proceedings and in no
Q Where is she now?
case for a period of more than five years from actual possession and
A In Australia.
shall not bid or take part in any sale of such real property in case of
Q Is this not the person of Teresita Frenzel who became an foreclosure: Provided, That said mortgagee or successor-in-interest
Australian citizen? may take possession of said property after default in accordance with
A I am not sure, since 1981 we were separated.
 the prescribed judicial procedures for foreclosure and receivership and
in no case exceeding five years from actual possession.65

From the evidence on record, the three parcels of land subject of the complaint
were not mortgaged to the petitioner by the owners thereof but were sold to
the respondent as the vendee, albeit with the use of the petitioner's personal
funds.

Futile, too, is petitioner's reliance on Article 22 of the New Civil Code which
reads:

Art. 22. Every person who through an act of performance by another,

or any other means, acquires or comes into possession of something
at the expense of the latter without just or legal ground, shall return
the same to him.66

The provision is expressed in the maxim: "MEMO CUM ALTERIUS DETER

DETREMENTO PROTEST" (No person should unjustly enrich himself at the
expense of another). An action for recovery of what has been paid without just
cause has been designated as an accion in rem verso.67 This provision does
not apply if, as in this case, the action is proscribed by the Constitution or by
the application of the pari delicto doctrine. 68 It may be unfair and unjust to bar
the petitioner from filing an accion in rem verso over the subject properties, or
from recovering the money he paid for the said properties, but, as Lord
Mansfield stated in the early case of Holman vs. Johnson:69 "The objection that
a contract is immoral or illegal as between the plaintiff and the defendant,
sounds at all times very ill in the mouth of the defendant. It is not for his sake,
however, that the objection is ever allowed; but it is founded in general
principles of policy, which the defendant has the advantage of, contrary to the
real justice, as between him and the plaintiff."

IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED. The

decision of the Court of Appeals is AFFIRMED in toto.

Costs against the petitioner.

SO ORDERED.
G.R. No. 178467 April 26, 2017
SPS. CRISTINO & EDNA CARBONELL, Petitioners, vs. METROPOLITAN
BANK AND TRUST COMPANY, Respondent.
DECISION
BERSAMIN, J.:
The petitioners assail the decision promulgated on December 7,
2006, 1 whereby the Court of Appeals (CA) affirmed with modification the
decision rendered on May 22, 19982 by the Regional Trial Court, Branch 157,
in Pasig City (RTC) dismissing the petitioners' complaint in Civil Case No.
65725 for its lack of merit, and awarded attorney's fees under the respondent's
counterclaim.
Antecedents
The petitioners initiated against the respondent Civil Case No. 65725, an
action for damages, alleging that they had experienced emotional shock,
mental anguish, public ridicule, humiliation, insults and embarrassment during
their trip to Thailand because of the respondent's release to them of five US$
100 bills that later on turned out to be counterfeit. They claimed that they had
travelled to Bangkok, Thailand after withdrawing US$ l ,000.00 in US$ 100
notes from their dollar account at the respondent's Pateros branch; that while
in Bangkok, they had exchanged five US$ 100 bills into Baht, but only four of
the US$ 100 bills had been accepted by the foreign exchange dealer because
the fifth one was "no good;" that unconvinced by the reason for the rejection,
they had asked a companion to exchange the same bill at Norkthon Bank in
Bangkok; that the bank teller thereat had then informed them and their
companion that the dollar bill was fake; that the teller had then confiscated the
US$ 100 bill and had threatened to report them to the police if they insisted in
getting the fake dollar bill back; and that they had to settle for a Foreign
Exchange Note receipt.3
The petitioners claimed that later on, they had bought jewelry from a shop
owner by using four of the remaining US$100 bills as payment; that on the next
day, however, they had been confronted by the shop owner at the hotel lobby
because their four US$ 100 bills had turned out to be counterfeit; that the shop
owner had shouted at them: "You Filipinos, you are all cheaters!;" and that the
incident had occurred within the hearing distance of fellow travelers and
several foreigners.
The petitioners continued that upon their return to the Philippines, they had
confronted the manager of the respondent's Pateros branch on the fake dollar
bills, but the latter had insisted that the dollar bills she had released to them
were genuine inasmuch as the bills had come from the head office; that in
order to put the issue to rest, the counsel of the petitioners had submitted the
subject US$ 100 bills to the Bangko Sentral ng Pilipinas (BSP) for examination;
that the BSP had certified that the four US$100 bills were near perfect genuine
notes;4 and that their counsel had explained by letter their unfortunate
experience caused by the respondent's release of the fake US dollar bills to
them, and had demanded moral damages of ₱10 Million and exemplary
damages.5
The petitioners then sent a written notice to the respondent, attaching the BSP
certification and informing the latter that they were giving it five days within
which to comply with their demand, or face court action.6 In response, the
respondent's counsel wrote to the petitioners on March 1996 expressing
sympathy with them on their experience but stressing that the respondent
could not absolutely guarantee the genuineness of each and every foreign
currency note that passed through its system; that it had also been a victim
like them; and that it had exercised the diligence required in dealing with
foreign currency notes and in the selection and supervision of its employees. 7
Prior to the filing of the suit in the RTC, the petitioners had two meetings with
the respondent's representatives. In the course of the two meetings, the latter's
representatives reiterated their sympathy and regret over the troublesome
experience that the petitioners had encountered, and offered to reinstate
US$500 in their dollar account, and, in addition, to underwrite a round-trip all-
expense-paid trip to Hong Kong, but they were adamant and staged a walk-
out.8
In its judgment rendered on May 22, 1998,9 the RTC ruled in favor of the
respondent, disposing as follows:
WHEREFORE, in the light of all the foregoing, judgment is hereby rendered:
1. Dismissing plaintiff’s complaint for lack of merit;
2. On the counterclaim, awarding Metrobank the amount of
₱20,000.00 as attorney's fees.
SO ORDERED.10
The petitioners appealed, but the CA ultimately promulgated its assailed
decision on December 7, 2006 affirming the judgment of the RTC with the
modification of deleting the award of attorney's fees, 11 to wit:
As to the award of attorneys fees, we agree with appellants that there is simply
no factual and legal basis thereto.
Unquestionably, appellants filed the present case for the humiliation and
embarrassment they suffered in Bangkok. They instituted the complaint in their
honest belief that they were entitled to damages as a result of appellee's
issuance of counterfeit dollar notes. Such being the case, they should not be
made answerable to attorney's fees. It is not good public policy to put a
premium on the right to litigate where such right is exercised in good faith,
albeit erroneously.
WHEREFORE, the appealed decision is AFFIRMED with modification that the
award of attorney's fees is deleted.
SO ORDERED.
Issues
Hence, this appeal, with the petitioners contending that the CA gravely erred
in affirming the judgment of the RTC. They insist that inasmuch as the business
of banking was imbued with public interest, the respondent's failure to exercise
the degree of diligence required in handling the affairs of its clients showed
that it was liable not just for simple negligence but for misrepresentation and
bad faith amounting to fraud; that the CA erred in giving weight and relying on
the news clippings allegedly showing that the "supernotes" had deceived even
the U.S. Secret Service and Central Intelligence Agency, for such news were
not based on facts. 12
Ruling of the Court
The appeal is partly meritorious.
The General Banking Act of 2000 demands of banks the highest standards of
integrity and performance. As such, the banks are under obligation to treat the
accounts of their depositors with meticulous care. 13 However, the banks'
compliance with this degree of diligence is to be determined in accordance
with the particular circumstances of each case.
The petitioners argue that the respondent was liable for failing to observe the
diligence required from it by not doing an act from which the material damage
had resulted by reason of inexcusable lack of precaution in the performance
of its duties. 14 Hence, the respondent was guilty of gross negligence,
misrepresentation and bad faith amounting to fraud.
The petitioners' argument is unfounded.
Gross negligence connotes want of care in the performance of one's duties; it
is a negligence characterized by the want of even slight care, acting or omitting
to act in a situation where there is duty to act, not inadvertently but wilfully and
intentionally, with a conscious indifference to consequences insofar as other
persons may be affected. It evinces a thoughtless disregard of consequences
without exe1iing any effort to avoid them. 15
In order for gross negligence to exist as to warrant holding the respondent
liable therefor, the petitioners must establish that the latter did not exert any
effort at all to avoid unpleasant consequences, or that it wilfully and
intentionally disregarded the proper protocols or procedure in the handling of
US dollar notes and in selecting and supervising its employees.
The CA and the RTC both found that the respondent had exercised the
diligence required by law in observing the standard operating procedure, in
taking the necessary precautions for handling the US dollar bills in question,
and in selecting and supervising its employees. 16 Such factual findings by the
trial court are entitled to great weight and respect especially after being
affirmed by the appellate court, and could be overturned only upon a showing
of a very good reason to warrant deviating from them.
In this connection, it is significant that the BSP certified that the falsity of the
US dollar notes in question, which were "near perfect genuine notes," could
be detected only with extreme difficulty even with the exercise of due diligence.
Ms. Nanette Malabrigo, BSP's Senior Currency Analyst, testified that the
subject dollar notes were "highly deceptive" inasmuch as the paper used for
them were similar to that used in the printing of the genuine notes. She
observed that the security fibers and the printing were perfect except for some
microscopic defects, and that all lines were clear, sharp and well defined. 17
Nonetheless, the petitioners contend that the respondent should be liable for
moral and exemplary damages18 on account of their suffering the unfortunate
experience abroad brought about by their use of the fake US dollar bills
withdrawn from the latter.
The contention cannot be upheld.
The relationship existing between the petitioners and the respondent that
resulted from a contract of loan was that of a creditor-debtor. 19 Even if the law
imposed a high standard on the latter as a bank by vi1iue of the fiduciary nature
of its banking business, bad faith or gross negligence amounting to bad faith
was absent. Hence, there simply was no legal basis for holding the respondent
liable for moral and exemplary damages. In breach of contract, moral damages
may be awarded only where the defendant acted fraudulently or in bad faith.
That was not true herein because the respondent was not shown to have acted
fraudulently or in bad faith. This is pursuant to Article 2220 of the Civil Code, to
wit:
Article 2220. Willful injury to property may be a legal ground for awarding moral
damages if the court should find that, under the circumstances, such damages
are justly due. The same rule applies to breaches of contract where
defendant acted fraudulently or in bad faith.
With the respondent having established that the characteristics of the subject
dollar notes had made it difficult even for the BSP itself as the country's own
currency note expert to identify the counterfeiting with ease despite adhering
to all the properly laid out standard operating procedure and precautions in the
handling of US dollar bills, holding it liable for damages in favor of the
petitioners would be highly unwarranted in the absence of proof of bad faith,
malice or fraud on its part. That it formally apologized to them and even offered
to reinstate the USD$500.00 in their account as well as to give them the all-
expense-paid round trip ticket to Hong Kong as means to assuage their
inconvenience did not necessarily mean it was liable. In civil cases, an offer of
compromise is not an admission of liability, and is inadmissible as evidence
against the offeror. 20
Even without taking into consideration the news clippings to the effect that the
US Secret Service and Central Intelligence Agency had themselves been
deceived by the 1990 series of the US dollar notes infamously known as the
"supernotes," the record had enough to show in that regard, not the least of
which was the testimony of Ms. Malabrigo as BSP's Senior Currency Analyst
about the highly deceptive nature of the subject US dollar notes and the
possibility for them to pass undetected.
Also, the petitioners' allegation of misrepresentation on the part of the
respondent was factually unsupported.1âwphi1 They had been satisfied with
the services of the respondent for about three years prior to the incident in
question.21 The incident was but an isolated one. Under the law, moral
damages for culpa contractual or breach of contract are recoverable only if the
defendant acted fraudulently or in bad faith, or is found guilty of gross
negligence amounting to bad faith, or in wanton disregard of his contractual
obligations.22 The breach must be wanton, reckless, malicious or in bad faith,
oppressive or abusive.23 In order to maintain their action for damages, the
petitioners must establish that their injury resulted from a breach of duty that
the respondent had owed to them, that is, there must be the concurrence of
injury caused to them as the plaintiffs and legal responsibility on the part of the
respondent. Underlying the award of damages is the premise that an individual
was injured in contemplation of law. In this regard, there must first be a breach
of some duty and the imposition of liability for that breach before damages may
be awarded; and the breach of such duty should be the proximate cause of the
injury. 24 That was not so in this case.
It is true that the petitioners suffered embarrassment and humiliation in
Bangkok. Yet, we should distinguish between damage and injury. In The
Orchard Golf & Country Club, Inc. v. Yu, 25 the Court has fittingly pointed out
the distinction, viz.:
x x x Injury is the illegal invasion of a legal right, damage is the loss, hurt, or
harm which results from the injury; and damages are the recompense or
compensation awarded for the damage suffered. Thus, there can be damage
without injury in those instances in which the loss or harm was not the result
of a violation of a legal duty. These situations are often called dmimum absque
injuria. 26
In every situation of damnum absque injuria, therefore, the injured person
alone bears the consequences because the law affords no remedy for
damages resulting from an act that does not amount to a legal injury or wrong.
For instance, in BP I Express Card Corporation v. Court of Appeals ,27 the
Court turned down the claim for damages of a cardholder whose credit card
had been cancelled after several defaults in payment, holding therein that
there could be damage without injury where the loss or harm was not the result
of a violation of a legal duty towards the plaintiff. In such situation, the injured
person alone should bear the consequences because the law afforded no
remedy for damages resulting from an act that did not
amount to a legal injury or wrong.28 Indeed, the lack of malice in the conduct
complained of precluded the recovery of damages.29
Here, although the petitioners suffered humiliation resulting from their unwitting
use of the counterfeit US dollar bills, the respondent, by virtue of its having
observed the proper protocols and procedure in handling the US dollar bills
involved, did not violate any legal duty towards them. Being neither guilty of
negligence nor remiss in its exercise of the degree of diligence required by law
or the nature of its obligation as a banking institution, the latter
was not liable for damages. Given the situation being one of damnum absque
injuria, they could not be compensated for the damage sustained.
WHEREFORE, the Court AFFIRMS the decision promulgated on December
7, 2006; and ORDERS the petitioners to pay the costs of suit.
SO ORDERED.
G.R. No. 134241 August 11, 2003
DAVID REYES (Substituted by Victoria R. Fabella), petitioner, vs. JOSE LIM,
CHUY CHENG KENG and HARRISON LUMBER, INC., respondents.
CARPIO, J.:
The Case
This is a petition for review on certiorari of the Decision1 dated 12 May 1998 of the
Court of Appeals in CA-G.R. SP No. 46224. The Court of Appeals dismissed the
petition for certiorari assailing the Orders dated 6 March 1997, 3 July 1997 and 3
October 1997 of the Regional Trial Court of Paranaque, Branch 2602 ("trial court")
in Civil Case No. 95-032.
The Facts
On 23 March 1995, petitioner David Reyes ("Reyes") filed before the trial court a
complaint for annulment of contract and damages against respondents Jose Lim
("Lim"), Chuy Cheng Keng ("Keng") and Harrison Lumber, Inc. ("Harrison
Lumber").
The complaint3 alleged that on 7 November 1994, Reyes as seller and Lim as
buyer entered into a contract to sell ("Contract to Sell") a parcel of land ("Property")
located along F.B. Harrison Street, Pasay City. Harrison Lumber occupied the
Property as lessee with a monthly rental of P35,000. The Contract to Sell provided
for the following terms and conditions:
1. The total consideration for the purchase of the aforedescribed parcel of
land together with the perimeter walls found therein is TWENTY EIGHT
MILLION (P28,000,000.00) PESOS payable as follows:
(a) TEN MILLION (P10,000,000.00) PESOS upon signing of this Contract
to Sell;
(b) The balance of EIGHTEEN MILLION (P18,000,000.00) PESOS shall
be paid on or before March 8, 1995 at 9:30 A.M. at a bank to be
designated by the Buyer but upon the complete vacation of all the tenants
or occupants of the property and execution of the Deed of Absolute Sale.
However, if the tenants or occupants have vacated the premises earlier
than March 8, 1995, the VENDOR shall give the VENDEE at least one
week advance notice for the payment of the balance and execution of the
Deed of Absolute Sale.
2. That in the event, the tenants or occupants of the premises subject of
this sale shall not vacate the premises on March 8, 1995 as stated above,
the VENDEE shall withhold the payment of the balance of P18,000,000.00
and the VENDOR agrees to pay a penalty of Four percent (4%) per month
to the herein VENDEE based on the amount of the downpayment of TEN
MILLION (P10,000,000.00) PESOS until the complete vacation of the
premises by the tenants therein.4
The complaint claimed that Reyes had informed Harrison Lumber to vacate the
Property before the end of January 1995. Reyes also informed Keng5 and Harrison
Lumber that if they failed to vacate by 8 March 1995, he would hold them liable for
the penalty of P400,000 a month as provided in the Contract to Sell. The complaint
further alleged that Lim connived with Harrison Lumber not to vacate the Property
until the P400,000 monthly penalty would have accumulated and equaled the
unpaid purchase price of P18,000,000.
On 3 May 1995, Keng and Harrison Lumber filed their Answer6 denying they
connived with Lim to defraud Reyes. Keng and Harrison Lumber alleged that
Reyes approved their request for an extension of time to vacate the Property due
to their difficulty in finding a new location for their business. Harrison Lumber
claimed that as of March 1995, it had already started transferring some of its
merchandise to its new business location in Malabon.7
On 31 May 1995, Lim filed his Answer8 stating that he was ready and willing to pay
the balance of the purchase price on or before 8 March 1995. Lim requested a
meeting with Reyes through the latter’s daughter on the signing of the Deed of
Absolute Sale and the payment of the balance but Reyes kept postponing their
meeting. On 9 March 1995, Reyes offered to return the P10 million down payment
to Lim because Reyes was having problems in removing the lessee from the
Property. Lim rejected Reyes’ offer and proceeded to verify the status of Reyes’
title to the Property. Lim learned that Reyes had already sold the Property to Line
One Foods Corporation ("Line One") on 1 March 1995 for P16,782,840. After the
registration of the Deed of Absolute Sale, the Register of Deeds issued to Line
One TCT No. 134767 covering the Property. Lim denied conniving with Keng and
Harrison Lumber to defraud Reyes.
On 2 November 1995, Reyes filed a Motion for Leave to File Amended Complaint
due to supervening facts. These included the filing by Lim of a complaint for estafa
against Reyes as well as an action for specific performance and nullification of sale
and title plus damages before another trial court.9 The trial court granted the motion
in an Order dated 23 November 1995.
In his Amended Answer dated 18 January 1996,10 Lim prayed for the cancellation
of the Contract to Sell and for the issuance of a writ of preliminary attachment
against Reyes. The trial court denied the prayer for a writ of preliminary attachment
in an Order dated 7 October 1996.
On 6 March 1997, Lim requested in open court that Reyes be ordered to deposit
the P10 million down payment with the cashier of the Regional Trial Court of
Parañaque. The trial court granted this motion.
On 25 March 1997, Reyes filed a Motion to Set Aside the Order dated 6 March
1997 on the ground the Order practically granted the reliefs Lim prayed for in his
Amended Answer.11 The trial court denied Reyes’ motion in an Order12 dated 3
July 1997. Citing Article 1385 of the Civil Code, the trial court ruled that an action
for rescission could prosper only if the party demanding rescission can return
whatever he may be obliged to restore should the court grant the rescission.
The trial court denied Reyes’ Motion for Reconsideration in its Order dated 3
13
October 1997. In the same order, the trial court directed Reyes to deposit the P10
million down payment with the Clerk of Court on or before 30 October 1997.
On 8 December 1997, Reyes14 filed a Petition for Certiorari15 with the Court of
Appeals. Reyes prayed that the Orders of the trial court dated 6 March 1997, 3
July 1997 and 3 October 1997 be set aside for having been issued with grave
abuse of discretion amounting to lack of jurisdiction. On 12 May 1998, the Court of
Appeals dismissed the petition for lack of merit.
Hence, this petition for review.
The Ruling of the Court of Appeals
The Court of Appeals ruled the trial court could validly issue the assailed orders in
the exercise of its equity jurisdiction. The court may grant equitable reliefs to
breathe life and force to substantive law such as Article 138516of the Civil Code
since the provisional remedies under the Rules of Court do not apply to this case.
The Court of Appeals held the assailed orders merely directed Reyes to deposit
the P10 million to the custody of the trial court to protect the interest of Lim who
paid the amount to Reyes as down payment. This did not mean the money would
be returned automatically to Lim.
The Issues
Reyes raises the following issues:
1. Whether the Court of Appeals erred in holding the trial court could issue
the questioned Orders dated March 6, 1997, July 3, 1997 and October 3,
1997, requiring petitioner David Reyes to deposit the amount of Ten
Million Pesos (P10,000,000.00) during the pendency of the action, when
deposit is not among the provisional remedies enumerated in Rule 57 to
61 of the 1997 Rules on Civil Procedure.
2. Whether the Court of Appeals erred in finding the trial court could issue
the questioned Orders on grounds of equity when there is an applicable
law on the matter, that is, Rules 57 to 61 of the 1997 Rules on Civil
Procedure.17
The Court’s Ruling
Reyes’ contentions are without merit.
Reyes points out that deposit is not among the provisional remedies enumerated
in the 1997 Rules of Civil Procedure. Reyes stresses the enumeration in the Rules
is exclusive. Not one of the provisional remedies in Rules 57 to 6118 applies to this
case. Reyes argues that a court cannot apply equity and require deposit if the law
already prescribes the specific provisional remedies which do not include deposit.
Reyes invokes the principle that equity is "applied only in the absence of, and never
against, statutory law or x x x judicial rules of procedure." 19 Reyes adds the fact
that the provisional remedies do not include deposit is a matter of dura lex sed
lex.20
The instant case, however, is precisely one where there is a hiatus in the law and
in the Rules of Court. If left alone, the hiatus will result in unjust enrichment to
Reyes at the expense of Lim. The hiatus may also imperil restitution, which is a
precondition to the rescission of the Contract to Sell that Reyes himself seeks. This
is not a case of equity overruling a positive provision of law or judicial rule for there
is none that governs this particular case. This is a case of silence or insufficiency
of the law and the Rules of Court. In this case, Article 9 of the Civil Code expressly
mandates the courts to make a ruling despite the "silence, obscurity or insufficiency
of the laws."21 This calls for the application of equity,22 which "fills the open spaces
in the law."23
Thus, the trial court in the exercise of its equity jurisdiction may validly order the
deposit of the P10 million down payment in court. The purpose of the exercise of
equity jurisdiction in this case is to prevent unjust enrichment and to ensure
restitution. Equity jurisdiction aims to do complete justice in cases where a court of
law is unable to adapt its judgments to the special circumstances of a case
because of the inflexibility of its statutory or legal jurisdiction. 24Equity is the
principle by which substantial justice may be attained in cases where the
prescribed or customary forms of ordinary law are inadequate.25
Reyes is seeking rescission of the Contract to Sell. In his amended answer, Lim is
also seeking cancellation of the Contract to Sell. The trial court then ordered Reyes
to deposit in court the P10 million down payment that Lim made under the Contract
to Sell. Reyes admits receipt of the P10 million down payment but opposes the
order to deposit the amount in court. Reyes contends that prior to a judgment
annulling the Contract to Sell, he has the "right to use, possess and enjoy" 26 the
P10 million as its "owner"27 unless the court orders its preliminary attachment.28
To subscribe to Reyes’ contention will unjustly enrich Reyes at the expense of Lim.
Reyes sold to Line One the Property even before the balance of P18 million under
the Contract to Sell with Lim became due on 8 March 1995. On 1 March 1995,
Reyes signed a Deed of Absolute Sale29 in favor of Line One. On 3 March 1995,
the Register of Deeds issued TCT No. 13476730 in the name of Line One.31 Reyes
cannot claim ownership of the P10 million down payment because Reyes had
already sold to another buyer the Property for which Lim made the down payment.
In fact, in his Comment32 dated 20 March 1996, Reyes reiterated his offer to return
to Lim the P10 million down payment.
On balance, it is unreasonable and unjust for Reyes to object to the deposit of the
P10 million down payment. The application of equity always involves a balancing
of the equities in a particular case, a matter addressed to the sound discretion of
the court. Here, we find the equities weigh heavily in favor of Lim, who paid the
P10 million down payment in good faith only to discover later that Reyes had
subsequently sold the Property to another buyer.
In Eternal Gardens Memorial Parks Corp. v. IAC,33 this Court held the plaintiff
could not continue to benefit from the property or funds in litigation during the
pendency of the suit at the expense of whomever the court might ultimately
adjudge as the lawful owner. The Court declared:
In the case at bar, a careful analysis of the records will show that petitioner
admitted among others in its complaint in Interpleader that it is still obligated to pay
certain amounts to private respondent; that it claims no interest in such amounts
due and is willing to pay whoever is declared entitled to said amounts. x x x
Under the circumstances, there appears to be no plausible reason for petitioner’s
objections to the deposit of the amounts in litigation after having asked for the
assistance of the lower court by filing a complaint for interpleader where the deposit
of aforesaid amounts is not only required by the nature of the action but is a
contractual obligation of the petitioner under the Land Development Program
(Rollo, p. 252).
There is also no plausible or justifiable reason for Reyes to object to the deposit of
the P10 million down payment in court. The Contract to Sell can no longer be
enforced because Reyes himself subsequently sold the Property to Line One. Both
Reyes and Lim are now seeking rescission of the Contract to Sell. Under Article
1385 of the Civil Code, rescission creates the obligation to return the things that
are the object of the contract. Rescission is possible only when the person
demanding rescission can return whatever he may be obliged to restore. A court
of equity will not rescind a contract unless there is restitution, that is, the parties
are restored to the status quo ante.34
Thus, since Reyes is demanding to rescind the Contract to Sell, he cannot refuse
to deposit the P10 million down payment in court.35 Such deposit will ensure
restitution of the P10 million to its rightful owner. Lim, on the other hand, has
nothing to refund, as he has not received anything under the Contract to Sell.36
In Government of the Philippine Islands v. Wagner and Cleland Wagner,37 the
Court ruled the refund of amounts received under a contract is a precondition to
the rescission of the contract. The Court declared:
The Government, having asked for rescission, must restore to the
defendants whatever it has received under the contract. It will only be just
if, as a condition to rescission, the Government be required to refund to
the defendants an amount equal to the purchase price, plus the sums
expended by them in improving the land. (Civil Code, art. 1295.)
The principle that no person may unjustly enrich himself at the expense of another
is embodied in Article 2238 of the Civil Code. This principle applies not only to
substantive rights but also to procedural remedies. One condition for invoking this
principle is that the aggrieved party has no other action based on contract, quasi-
contract, crime, quasi-delict or any other provision of law.39 Courts can extend this
condition to the hiatus in the Rules of Court where the aggrieved party, during the
pendency of the case, has no other recourse based on the provisional remedies of
the Rules of Court.
Thus, a court may not permit a seller to retain, pendente lite, money paid by a
buyer if the seller himself seeks rescission of the sale because he has
subsequently sold the same property to another buyer.40 By seeking rescission, a
seller necessarily offers to return what he has received from the buyer. Such a
seller may not take back his offer if the court deems it equitable, to prevent unjust
enrichment and ensure restitution, to put the money in judicial deposit.
There is unjust enrichment when a person unjustly retains a benefit to the loss of
another, or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience.41 In this case, it was
just, equitable and proper for the trial court to order the deposit of the P10 million
down payment to prevent unjust enrichment by Reyes at the expense of Lim.42
WHEREFORE, we AFFIRM the Decision of the Court of Appeals.
SO ORDERED.
G.R. No. L-39999 May 31, 1984
ROY PADILLA, FILOMENO GALDONES, ISMAEL GONZALGO and JOSE
FARLEY BEDENIA, petitioners, vs. COURT OF APPEALS, respondent.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari of a Court of Appeals' decision which
reversed the trial court's judgment of conviction and acquitted the petitioners
of the crime of grave coercion on the ground of reasonable doubt but inspite
of the acquittal ordered them to pay jointly and severally the amount of
P9,000.00 to the complainants as actual damages.
The petitioners were charged under the following information:
The undersigned Fiscal accused ROY PADILLA, FILOMENO
GALDONES, PEPITO BEDENIA, YOLLY RICO, DAVID
BERMUNDO, VILLANOAC, ROBERTO ROSALES,
VILLANIA, ROMEO GARRIDO, JOSE ORTEGA, JR.,
RICARDO CELESTINO, REALINGO alias "KAMLON", JOHN
DOE alias TATO, and FOURTEEN (14) RICARDO DOES of
the crime of GRAVE COERCION, committed as follows:
That on or about February 8, 1964 at around 9:00 o'clock in
the morning, in the municipality of Jose Panganiban, province
of Camarines Norte, Philippines, and within the jurisdiction of
this Honorable Court, the above- named accused, Roy
Padilla, Filomeno Galdones, Pepito Bedenia, Yolly Rico,
David Bermundo, Villanoac, Roberto Rosales, Villania,
Romeo Garrido, Jose Ortega, Jr., Ricardo Celestino, Realingo
alias Kamlon, John Doe alias Tato, and Fourteen Richard
Does, by confederating and mutually helping one another, and
acting without any authority of law, did then and there wilfully,
unlawfully, and feloniously, by means of threats, force and
violence prevent Antonio Vergara and his family to close their
stall located at the Public Market, Building No. 3, Jose
Panganiban, Camarines Norte, and by subsequently forcibly
opening the door of said stall and thereafter brutally
demolishing and destroying said stall and the furnitures
therein by axes and other massive instruments, and carrying
away the goods, wares and merchandise, to the damage and
prejudice of the said Antonio Vergara and his family in the
amount of P30,000.00 in concept of actual or compensatory
and moral damages, and further the sum of P20,000.00 as
exemplary damages.
That in committing the offense, the accused took advantage
of their public positions: Roy Padilla, being the incumbent
municipal mayor, and the rest of the accused being
policemen, except Ricardo Celestino who is a civilian, all of
Jose Panganiban, Camarines Norte, and that it was
committed with evident premeditation.
The Court of First Instance of Camarines Norte, Tenth Judicial District
rendered a decision, the dispositive portion of which states that:
IN VIEW OF THE FOREGOING, the Court finds the accused Roy Padilla,
Filomeno Galdonez, Ismael Gonzalgo and Jose Parley Bedenia guilty beyond
reasonable doubt of the crime of grave coercion, and hereby imposes upon
them to suffer an imprisonment of FIVE (5) months and One (1) day; to pay a
fine of P500.00 each; to pay actual and compensatory damages in the amount
of P10,000.00; moral damages in the amount of P30,000.00; and another
P10,000.00 for exemplary damages, jointly and severally, and all the
accessory penalties provided for by law; and to pay the proportionate costs of
this proceedings.
The accused Federico Realingo alias 'Kamlon', David
Bermundo, Christopher Villanoac, Godofredo Villania, Romeo
Garrido, Roberto Rosales, Ricardo Celestino and Jose
Ortega, are hereby ordered acquitted on grounds of
reasonable doubt for their criminal participation in the crime
charged.
The petitioners appealed the judgment of conviction to the Court of Appeals.
They contended that the trial court's finding of grave coercion was not
supported by the evidence. According to the petitioners, the town mayor had
the power to order the clearance of market premises and the removal of the
complainants' stall because the municipality had enacted municipal
ordinances pursuant to which the market stall was a nuisance per se. The
petitioners stated that the lower court erred in finding that the demolition of the
complainants' stall was a violation of the very directive of the petitioner Mayor
which gave the stall owners seventy two (72) hours to vacate the market
premises. The petitioners questioned the imposition of prison terms of five
months and one day and of accessory penalties provided by law. They also
challenged the order to pay fines of P500.00 each, P10,000.00 actual and
compensatory damages, P30,000.00 moral damages, P10,000.00 exemplary
damages, and the costs of the suit.
The dispositive portion of the decision of the respondent Court of Appeals
states:
 WHEREFORE, we hereby modify the judgment appealed
from in the sense that the appellants are acquitted on ground
of reasonable doubt. but they are ordered to pay jointly and
severally to complainants the amount of P9,600.00, as actual
damages.
The petitioners filed a motion for reconsideration contending that the acquittal
of the defendants-appellants as to criminal liability results in the extinction of
their civil liability. The Court of Appeals denied the motion holding that:
xxx xxx xxx
... appellants' acquittal was based on reasonable doubt
whether the crime of coercion was committed, not on facts
that no unlawful act was committed; as their taking the law into
their hands, destructing (sic) complainants' properties is
unlawful, and, as evidence on record established that
complainants suffered actual damages, the imposition of
actual damages is correct.
Consequently, the petitioners filed this special civil action, contending that:
I the criminal action is that arising from and as a consequence of the criminal
THE COURT OF APPEALS COMMITTED A GRAVE ERROR
OF LAW OR GRAVELY ABUSED ITS DISCRETION IN
IMPOSING UPON PETITIONERS PAYMENT OF DAMAGES
TO COMPLAINANTS AFTER ACQUITTING PETITIONERS
OF THE CRIME CHARGED FROM WHICH SAID LIABILITY
AROSE.
II
THE COURT OF APPEALS ERRED IN HOLDING IN ITS
RESOLUTION DATED DECEMBER 26, 1974 THAT SINCE
APPELLANTS' ACQUITTAL WAS BASED ON
REASONABLE DOUBT, NOT ON FACTS THAT NO
UNLAWFUL ACT WAS COMMITTED, THE IMPOSITION OF
ACTUAL DAMAGES IS CORRECT.
III
THE COURT OF APPEALS COMMITTED A LEGAL
INCONSISTENCY, IF NOT PLAIN JUDICIAL ERROR, IN
HOLDING IN ITS APPEALED RESOLUTION THAT
PETITIONERS COMMITTED AN UNLAWFUL ACT, THAT IS
TAKING THE LAW INTO THEIR HANDS, DESTRUCTING
(sic) 'COMPLAINANTS' PROPERTIES', AFTER HOLDING IN
ITS MAIN DECISION OF NOVEMBER 6,1974 THAT THE
ACTS FOR WHICH THEY WERE CHARGED DID NOT
CONSTITUTE GRAVE COERCION AND THEY WERE NOT
CHARGED OF ANY OTHER CRIME.
IV
THE COURT OF APPEALS ERRED IN ORDERING THE
PETITIONERS HEREIN, APPELLANTS IN CA-G.R. NO.
13456CR, JOINTLY AND SEVERALLY, TO PAY
COMPLAINANTS P9,600.00 IN SUPPOSED ACTUAL
DAMAGES.
The issue posed in the instant proceeding is whether or not the respondent
court committed a reversible error in requiring the petitioners to pay civil
indemnity to the complainants after acquitting them from the criminal charge.
Petitioners maintain the view that where the civil liability which is included in
act, and the defendant was acquitted in the criminal case, (no civil liability
arising from the criminal case), no civil liability arising from the criminal charge
could be imposed upon him. They cite precedents to the effect that the liability
of the defendant for the return of the amount received by him may not be
enforced in the criminal case but must be raised in a separate civil action for
the recovery of the said amount (People v. Pantig, 97 Phil. 748; following the
doctrine laid down in Manila Railroad Co. v. Honorable Rodolfo Baltazar, 49
O.G. 3874; Pueblo contra Abellera, 69 Phil. 623; People v. Maniago 69 Phil.
496; People v. Miranda, 5 SCRA 1067; Aldaba v. Elepafio 116 Phil. 457). In
the case before us, the petitioners were acquitted not because they did not
commit the acts stated in the charge against them. There is no dispute over
the forcible opening of the market stall, its demolition with axes and other
instruments, and the carting away of the merchandize. The petitioners were
acquitted because these acts were denominated coercion when they properly
constituted some other offense such as threat or malicious mischief.
The respondent Court of Appeals stated in its decision:
For a complaint to prosper under the foregoing provision, the
violence must be employed against the person, not against
property as what happened in the case at bar. ...
 xxx xxx xxx
The next problem is: May the accused be convicted of an
offense other than coercion?
From all appearances, they should have been prosecuted
either for threats or malicious mischief. But the law does not
allow us to render judgment of conviction for either of these
offenses for the reason that they were not indicted for, these
offenses. The information under which they were prosecuted
does not allege the elements of either threats or malicious
mischief. Although the information mentions that the act was
by means of threats', it does not allege the particular threat
made. An accused person is entitled to be informed of the
nature of the acts imputed to him before he can be made to
enter into trial upon a valid information.
We rule that the crime of grave coercion has not been proved
in accordance with law.
While appellants are entitled to acquittal they nevertheless are
liable for the actual damages suffered by the complainants by
reason of the demolition of the stall and loss of some of their
properties. The extinction of the penal action does not carry
with it that of the civil, unless the extinction proceeds from a
declaration in a final judgment that the fact from which the civil
might arise did not exist. (Rule 111, Sec. 3 (c), Rev. Rules of
Court; Laperal v. Aliza, 51 OG.R. 1311, People v. Velez, 44
OG. 1811). In the instant case, the fact from which the civil
might arise, namely, the demolition of the stall and loss of the
properties contained therein; exists, and this is not denied by
the accused. And since there is no showing that the
complainants have reserved or waived their right to institute a
separate civil action, the civil aspect therein is deemed
instituted with the criminal action. (Rule 111, Sec. 1, Rev.
Rules of Court).
xxx xxx xxx
Section 1 of Rule 111 of the Rules of Court states the fundamental proposition
that when a criminal action is instituted, the civil action for recovery of civil
liability arising from the offense charged is impliedly instituted with it. There is
no implied institution when the offended party expressly waives the civil action
or reserves his right to institute it separately. (Morte Sr. v. Alvizo, Jr., 101
SCRA 221).
The extinction of the civil action by reason of acquittal in the criminal case
refers exclusively to civil liability ex delicto founded on Article 100 of the
Revised Penal Code. (Elcano v. Hill, 77 SCRA 98; Virata v. Ochoa, 81 SCRA
472). In other words, the civil liability which is also extinguished upon acquittal
of the accused is the civil liability arising from the act as a crime.
As easily as 1942, the Supreme Court speaking through Justice Jorge Bocobo
in Barredo v. Garcia, et at. 73 Phil. 607 laid down the rule that the same
punishable act or omission can create two kinds of civil liabilities against the
accused and, where provided by law, his employer. 'There is the civil liability
arising from the act as a crime and the liability arising from the same act as
a quasi-delict. Either one of these two types of civil liability may be enforced
against the accused, However, the offended party cannot recover damages
under both types of liability. For instance, in cases of criminal negligence or
crimes due to reckless imprudence, Article 2177 of the Civil Code provides:
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.
Section 3 (c) of Rule 111 specifically provides that:
Sec. 3. Other civil actions arising from offenses. — In all cases
not included in the preceding section the following rules shall
be observed:
xxx xxx xxx
xxx xxx xxx
(c) Extinction of the penal action does not carry with it
extinction of the civil, unless the extinction proceeds from a
declaration in a final judgment that the fact from which the civil
might arise did not exist. In other cases, the person entitled to
the civil action may institute it in the Jurisdiction and in the
manner provided by law against the person who may be liable
for restitution of the thing and reparation or indemnity for the
damage suffered.
The judgment of acquittal extinguishes the liability of the accused for damages
only when it includes a declaration that the facts from which the civil might
arise did not exist. Thus, the civil liability is not extinguished by acquittal where
the acquittal is based on reasonable doubt (PNB v. Catipon, 98 Phil. 286) as
only preponderance of evidence is required in civil cases; where the court
expressly declares that the liability of the accused is not criminal but only civil
in nature (De Guzman v. Alvia, 96 Phil. 558; People v. Pantig, supra) as, for
instance, in the felonies of estafa, theft, and malicious mischief committed by
certain relatives who thereby incur only civil liability (See Art. 332, Revised
Penal Code); and, where the civil liability does not arise from or is not based
upon the criminal act of which the accused was acquitted (Castro v. Collector
of Internal Revenue, 4 SCRA 1093; See Regalado, Remedial Law
Compendium, 1983 ed., p. 623). Article 29 of the Civil Code also provides that:
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. Upon motion of the defendant,
the court may require the plaintiff to file a bond to answer for
damages in case the complaint should be found to be
malicious.
If in a criminal case the judgment of acquittal is based upon
reasonable doubt, the court shall so declare. In the absence
of any declaration to that effect, it may be inferred from the
text of the decision whether or not the acquittal is due to that
ground.
More recently, we held that the acquittal of the defendant in the criminal case
would not constitute an obstacle to the filing of a civil case based on the same
acts which led to the criminal prosecution:
... The finding by the respondent court that he spent said sum
for and in the interest of the Capiz Agricultural and Fishery
School and for his personal benefit is not a declaration that
the fact upon which Civil Case No. V-3339 is based does not
exist. The civil action barred by such a declaration is the civil
liability arising from the offense charged, which is the one
impliedly instituted with the criminal action. (Section 1, Rule
III, Rules of Court.) Such a declaration would not bar a civil
action filed against an accused who had been acquitted in the
criminal case if the criminal action is predicated on factual or
legal considerations other than the commission of the offense
charged. A person may be acquitted of malversation where,
as in the case at bar, he could show that he did not
misappropriate the public funds in his possession, but he
could be rendered liable to restore said funds or at least to
make a proper accounting thereof if he shall spend the same
for purposes which are not authorized nor intended, and in a
manner not permitted by applicable rules and regulations.
(Republic v. Bello, 120 SCRA 203)
There appear to be no sound reasons to require a separate civil action to still
be filed considering that the facts to be proved in the civil case have already
been established in the criminal proceedings where the accused was
acquitted. Due process has been accorded the accused. He was, in fact,
exonerated of the criminal charged. The constitutional presumption of
innocence called for more vigilant efforts on the part of prosecuting attorneys
and defense counsel, a keener awareness by all witnesses of the serious
implications of perjury, and a more studied consideration by the judge of the
entire records and of applicable statutes and precedents. To require a
separate civil action simply because the accused was acquitted would mean
needless clogging of court dockets and unnecessary duplication of litigation
with all its attendant loss of time, effort, and money on the part of all concerned.
The trial court found the following facts clearly established by the evidence
adduced by both the prosecution and the defense:
xxx xxx xxx
(9) In the morning of February 8, 1964, then Chief Galdones,
complying with the instructions contained in said
Memorandum No. 32 of the Mayor, and upon seeing that
Antonio Vergara had not vacated the premises in question,
with the aid of his policemen, forced upon the store or stall
and ordered the removal of the goods inside the store of
Vergara, at the same time taking inventory of the goods taken
out, piled them outside in front of the store and had it cordoned
with a rope, and after all the goods were taken out from the
store, ordered the demolition of said stall of Antonio Vergara.
Since then up to the trial of this case, the whereabouts of the
goods taken out from the store nor the materials of the
demolished stall have not been made known.
The respondent Court of Appeals made a similar finding that:
On the morning of February 8th, because the said Vergaras
had not up to that time complied with the order to vacate, the
co-accused Chief of Police Galdones and some members of
his police force, went to the market and, using ax, crowbars
and hammers, demolished the stall of the Vergaras who were
not present or around, and after having first inventoried the
goods and merchandise found therein, they had them brought
to the municipal building for safekeeping. Inspite of notice
 served upon the Vergaras to take possession of the goods
and merchandise thus taken away, the latter refused to do so.
The loss and damage to the Vergaras as they evaluated them
were:
Cost of stall construction P1,300.00
Value of furniture and
equipment
judgment destroyed 300.00
Value of goods and equipment taken
8,000.00
P9,600.00
It is not disputed that the accused demolished the grocery stall
of the complainants Vergaras and carted away its contents.
The defense that they did so in order to abate what they
considered a nuisance per se is untenable, This finds no
support in law and in fact. The couple has been paying rentals
for the premises to the government which allowed them to
lease the stall. It is, therefore, farfetched to say that the stall
was a nuisance per se which could be summarily abated.
The petitioners, themselves, do not deny the fact that they caused the
destruction of the complainant's market stall and had its contents carted away.
They state:
On February 8, 1964, despite personal pleas on Vergaras by
the Mayor to vacate the passageways of Market Building No.
3, the Vergaras were still in the premises, so the petitioners
Chief of Police and members of the Police Force of Jose
Panganiban, pursuant to the Mayor' 6 directives, demolished
the store of the Vergaras, made an inventory of the goods
found in said store, and brought these goods to the municipal
building under the custody of the Municipal Treasurer, ...
The only supposed obstacle is the provision of Article 29 of the Civil Code,
earlier cited, that "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." According
to some scholars, this provision of substantive law calls for a separate civil
action and cannot be modified by a rule of remedial law even in the interests
of economy and simplicity and following the dictates of logic and common
sense.
As stated by retired Judge J. Cezar Sangco:
... if the Court finds the evidence sufficient to sustain the civil
action but inadequate to justify a conviction in the criminal
action, may it render judgment acquitting the accused on
reasonable doubt, but hold him civilly liable nonetheless? An
affirmative answer to this question would be consistent with
the doctrine that the two are distinct and separate actions, and
win (a) dispense with the reinstituting of the same civil action,
or one based on quasi-delict or other independent civil action,
and of presenting the same evidence: (b) save the injured
party unnecessary expenses in the prosecution of the civil
action or enable him to take advantage of the free services of
the fiscal; and (c) otherwise resolve the unsettling implications
of permitting the reinstitution of a separate civil action whether
based on delict, or quasi-delict, or other independent civil
actions.
... But for the court to be able to adjudicate in the manner here
suggested, Art. 29 of the Civil Code should be amended
because it clearly and expressly provides that the civil action
based on the same act or omission may only be instituted in
a separate action, and therefore, may not inferentially be
resolved in the same criminal action. To dismiss the civil
action upon acquittal of the accused and disallow the
reinstitution of any other civil action, would likewise render,
unjustifiably, the acquittal on reasonable doubt without any
significance, and would violate the doctrine that the two
actions are distinct and separate.
In the light of the foregoing exposition, it seems evident that
there is much sophistry and no pragmatism in the doctrine that
it is inconsistent to award in the same proceedings damages
against the accused after acquitting him on reasonable doubt.
Such doctrine must recognize the distinct and separate
character of the two actions, the nature of an acquittal on
reasonable doubt, the vexatious and oppressive effects of a
reservation or institution of a separate civil action, and that the
injured party is entitled to damages not because the act or
omission is punishable but because he was damaged or
injured thereby (Sangco, Philippine Law on Torts and
Damages, pp. 288-289).
We see no need to amend Article 29 of the Civil Code in order to allow a court
to grant damages despite a judgment of acquittal based on reasonable doubt.
What Article 29 clearly and expressly provides is a remedy for the plaintiff in
case the defendant has been acquitted in a criminal prosecution on the ground
that his guilt has not been proved beyond reasonable doubt. It merely
emphasizes that a civil action for damages is not precluded by an acquittal for
the same criminal act or omission. The Civil Code provision does not state that
the remedy can be availed of only in a separate civil action. A separate civil
case may be filed but there is no statement that such separate filing is the only
and exclusive permissible mode of recovering damages.
There is nothing contrary to the Civil Code provision in the rendition of a
judgment of acquittal and a judgment awarding damages in the same criminal
action. The two can stand side by side. A judgment of acquittal operates to
extinguish the criminal liability. It does not, however, extinguish the civil liability
unless there is clear showing that the act from which civil liability might arise
did not exist.
A different conclusion would be attributing to the Civil Code a trivial
requirement, a provision which imposes an uncalled for burden before one who
has already been the victim of a condemnable, yet non-criminal, act may be
accorded the justice which he seeks.
We further note the rationale behind Art. 29 of the Civil Code in arriving at the
intent of the legislator that they could not possibly have intended to make it
more difficult for the aggrieved party to recover just compensation by making
a separate civil action mandatory and exclusive:
of the offender while the other is for reparation of damages
suffered by the aggrieved party... 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 preponderance of evidence? Is the right of the
aggrieved person any less private because the wrongful act is
also punishable by the criminal law? (Code Commission, pp.
45-46).
A separate civil action may be warranted where additional facts have to be
established or more evidence must be adduced or where the criminal case has
been fully terminated and a separate complaint would be just as efficacious or
even more expedient than a timely remand to the trial court where the criminal
action was decided for further hearings on the civil aspects of the case. The
offended party may, of course, choose to file a separate action. These do not
exist in this case. Considering moreover the delays suffered by the case in the
trial, appellate, and review stages, it would be unjust to the complainants in
this case to require at this time a separate civil action to be filed.
With this in mind, we therefore hold that the respondent Court of Appeals did
not err in awarding damages despite a judgment of acquittal.
WHEREFORE, we hereby AFFIRM the decision of the respondent Court of
Appeals and dismiss the petition for lack of merit.

The old rule that the acquittal of the accused in a criminal case SO ORDERED.
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 the
criminal offense, when the latter is not proved, civil liability
cannot be demanded.

This is one of those cases 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
G.R. No. 210148 December 8, 2014
ANTONIO L. DALURAYA, Petitioner, vs. MARLA OLIVA, Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated June
28, 2013 and the Resolution3 dated November 22, 2013 rendered by the Court
of Appeals (CA) in CA-G.R. SP No. 125113 finding petitioner Antonio L.
Daluraya (Daluraya) civilly liable for the death of Marina Arabit Oliva (Marina
Oliva) despite having been acquitted for Reckless Imprudence Resulting in
Homicide on the ground of insufficiency of evidence.
The Facts
On January 4, 2006, Daluraya was charged in an Information4 for Reckless
Imprudence Resulting in Homicide in connection with the death5 of Marina
Oliva. Records reveal that sometime in the afternoon of January 3, 2006,
Marina Oliva was crossing the street when a Nissan Vanette, bearing plate
number UPN-172 and traversing EDSA near the Quezon Avenue flyover in
Quezon City, ran her over.6 While Marina Oliva was rushed to the hospital to
receive medical attention,she eventually died, prompting her daughter, herein
respondent Marla Oliva (Marla), to file a criminal case for Reckless
Imprudence Resulting in Homicide against Daluraya, the purported driver of
the vehicle.7
During the proceedings, the prosecution presented as witness Shem Serrano
(Serrano), an eye-witness to the incident, who testified that on said date, he
saw a woman crossing EDSA heading towards the island near the flyover and
that the latter was bumped by a Nissan Vanette bearing plate number UPN-
172. The prosecution also offered the testimonies of (a) Marla, who testified
as to the civil damages sustained by her family as a result of her mother’s
death; (b) Dr. Paul Ortiz (Dr. Ortiz), who presented his findings on the autopsy
conducted upon the body of Marina Oliva; and (c) Police Senior Inspector
Lauro Gomez (PSI Gomez), who conducted the investigation following the
incident and claimed that Marina Oliva was hit by the vehicle being driven by
Daluraya, albeit he did not witness the incident. 8
After the prosecution rested its case, Daluraya filed an Urgent Motion to
Dismiss (demurrer)9 asserting, inter alia, that he was not positively identified
by any of the prosecution witnesses as the driver of the vehicle that hit the
victim, and that there was no clear and competent evidence of how the incident
transpired.10
The MeTC Ruling
In an Order11 dated May 24, 2010, the Metropolitan Trial Court of Quezon City,
Branch 38 (MeTC) granted Daluraya’s demurrer and dismissed the case for
insufficiency of evidence. It found that the testimonies of the prosecution
witnesses were wanting in material details and that they failed to sufficiently
establish that Daluraya committed the crime imputed upon
him.12 Deconstructing the testimonies of the prosecution witnesses
individually, the MeTC found that: (a) Marla merely testified on the damages
sustained by her family but she failed to identify Daluraya as the driver of the
vehicle that hit her mother; (b) Serrano also did not identify
Daluraya as the driver of the said vehicle; (c) Dr. Ortiz merely testified on the
autopsy results; and (d) PSI Gomez, while he did investigate the incident,
likewise declared thathe did not witness the same.13
Marla moved for reconsideration,14 which the MeTC denied in an
Order15 dated November 4, 2010, clarifying that the grant of Daluraya’s
demurrer had the effect of an acquittal and that reconsideration of its Order
granting Daluraya’s demurrer would violate the latter’s right against double
jeopardy.16 With respect to the civil aspect of the case, the MeTC likewise
denied the same, holding that no civil liability can be awarded absent any
evidence proving that Daluraya was the person responsible for Marina Oliva’s
demise.17
Aggrieved, Marla appealed18 to the Regional Trial Court of Quezon City,
Branch 76 (RTC), insisting that the MeTC failed to make any finding as to the
civil liability of Daluraya,19 which finding was not precluded by the dismissal of
the criminal aspect of the case.
The RTC Ruling
In a Decision20 dated September 8, 2011, the RTC dismissed the appeal and
affirmed the MeTC’s ruling,declaring that "the act from which the criminal
responsibility may spring did not at all exist."21
Marla filed a motion for reconsideration22 which, although filed beyond the
reglementary period, was nonetheless accepted. However, the RTC found the
same without merit and thus, sustained the factual findings and rulings of the
MeTC in its Order23 dated May 10, 2012. Dissatisfied, Marla elevated the case
to the CA via petition for review, maintaining that Daluraya must be held civilly
liable.
The CA Ruling
In a Decision24 dated June 28, 2013, the CA granted the petition and reversed
the RTC Decision, ordering Daluraya to pay Marla the amounts of ₱152,547.00
as actual damages, ₱50,000.00 as civil indemnity, and ₱50,000.00 as moral
damages.25 In so ruling, the CA held that the MeTC’s Order showed that
Daluraya’s acquittal was based on the fact that the prosecution failed to prove
his guilt beyond reasonable doubt. As such, Daluraya was not exonerated from
civil liability.26
Moreover, the CA considered the following pieces of evidence to support its
finding that Daluraya must be held civilly liable: (a) the inadmissible sworn
statement executed by Daluraya where he admitted that he drove the subject
vehicle which hit Marina Oliva; (b) the conclusion derived from Serrano’s
testimony that the woman he saw crossing the street who was hit by a Nissan
Vanette with plate number UPN-172, and the victim who eventually died, are
one and the same; (c) the Philippine National Police Referral Letter of one
Police Chief Inspector Virgilio Pereda identifying Daluraya as the suspectin the
case of Reckless Imprudence Resulting in Homicide involving the death of
Marina Oliva, and stating that he brought the victim to the Quezon City General
Hospital for treatment but was declared dead on arrival; and (d) the subject
vehicle was registered in the name of Daluraya’s aunt, Gloria Zilmar, 27 who
authorized him to claim the vehicle from the MeTC.28
Daluraya filed a motion for reconsideration,29 which the CA denied in a
Resolution30 dated November 22, 2013,hence, this petition.
The Issue Before the Court
The sole issue advanced for the Court’s resolution is whether or not the CA
was correct in finding Daluraya civilly liable for Marina Oliva’s death despite
his acquittal in the criminal case for Reckless Imprudence Resulting in
Homicide on the ground of insufficiency of evidence.
The Court’s Ruling
The petition is meritorious.
Every person criminally liable for a felony is also civilly liable. The acquittal of
an accused of the crime charged, however, does not necessarily extinguish
his civil liability.31 In Manantan v. CA,32 the Court expounded on the two kinds
of acquittal recognized by our law and their concomitant effects on the civil
liability of the accused, as follows:
Our law recognizes two kinds of acquittal, with different effects on the civil
liability of the accused. First is an acquittal on the ground that the accused is
not the author of the actor omission complained of. This instance closes the
door to civil liability, for a person who has been found to be not the perpetrator
of any act or omission cannot and can never be held liable for such act or
omission. There being no delict, civil liability ex delictois out of the question,
and the civil action, if any, which may be instituted must be based on grounds
other than the delict complained of. This is the situation contemplated inRule
111 of the Rules of Court. The second instance is an acquittal based on
reasonable doubt on the guilt of the accused. In this case, even if the guilt of
the accused has not been satisfactorily established, he is not exempt from civil
liability which may be proved by preponderance of evidence only.33
In Dayap v. Sendiong,34 the Court explained further:
The acquittal of the accused does not automatically preclude a judgment
against him on the civil aspect of the case.1âwphi1The extinction of the penal
action does not carry with it the extinction of the civil liability where: (a) the
acquittal is based on reasonable doubt as only preponderance of evidence is
required; (b) the court declares that the liability of the accused is only civil; and
(c) the civil liability of the accused does not arise from or is not based upon the
crime of which the accused is acquitted. However, the civil action based on
delictmay be deemed extinguished if there is a finding on the final judgment in
the criminal action that the act or omission from which the civil liability may
arise did not exist or where the accused did not commit the acts or omission
imputed to him.
Thus, if demurrer is granted and the accused is acquitted by the court, the
accused has the right to adduce evidence on the civil aspect of the case unless
the court also declares that the act or omission from which the civil liability may
arise did not exist. This is because when the accused files a demurrer to
evidence, he has not yet adduced evidence both on the criminal and civil
aspects of the case. The only evidence on record is the evidence for the
prosecution. What the trial court should do is issue an order or partial judgment
granting the demurrer to evidence and acquitting the accused, and set the
case for continuation of trial for the accused to adduce evidence on the civil
aspect of the case and for the private complainant to adduce evidence by way
of rebuttal. Thereafter, the court shall render judgment on the civil aspect of
the case.35
(Emphases supplied)
In case of an acquittal, the Rules of Court requires that the judgment state
"whether the evidence of the prosecution absolutely failed to prove the guilt of
the accused or merely failed to prove his guilt beyond reasonable doubt. In
either case, the judgment shall determine if the act or omission from which the
civil liability might arise did not exist."36
A punctilious examination of the MeTC’s Order, which the RTC sustained, will
show that Daluraya’s acquittal was based on the conclusion that the act or
omission from which the civil liability may arise did not exist, given that the
prosecution was not able to establish that he was the author of the crime
imputed against him. Such conclusion is clear and categorical when the MeTC
declared that "the testimonies of the prosecution witnesses are wanting in
material details and they did not sufficiently establish that the accused
precisely committed the crime charged against him."37 Furthermore, when
Marla sought reconsideration of the MeTC’s Order acquitting Daluraya, said
court reiterated and firmly clarified that "the prosecution was not able to
establish that the accused was the driver of the Nissan Vanette which bumped
Marina Oliva"38 and that "there is no competent evidence on hand which
proves that the accused was the person responsible for the death of Marina
Oliva."39

Clearly, therefore, the CA erred in construing the findings of the MeTC, as

affirmed by the RTC, that Daluraya’s acquittal was anchored on reasonable
doubt, which would necessarily call for a remand of the case to the court a quo
for the reception of Daluraya’s evidence on the civil aspect.1âwphi1 Records
disclose that Daluraya’s acquittal was based on the fact that "the act or
omission from which the civil liability may arise did not exist" in view of the
failure of the prosecution to sufficiently establish that he was the author of the
crime ascribed against him. Consequently, his civil liability should be deemed
as non-existent by the nature of such acquittal.

WHEREFORE, the petition is GRANTED. The Decision dated June 28, 2013
and the Resolution dated November 22, 2013 of the Court of Appeals in CA-
G.R. SP No. 125113 are hereby REVERSED and SET ASIDE. The Decision
dated September 8,2011 and the Order dated May 10, 2012 of the Regional
Trial Court of Quezon City, Branch 76 are REINSTATED.

SO ORDERED.
G.R. No. 183805 July 3, 2013
JAMES WALTER P. CAPILI, PETITIONER, vs. PEOPLE OF THE
PHILIPPINES AND SHIRLEY TISMO-CAPILI, RESPONDENTS.
DECISION
PERALTA, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court seeking the reversal of the Decision1 dated February 1, 2008 and
Resolution2 dated July 24, 2008 of the Court of Appeals (CA) in CA-G.R. CR
No. 30444.
The factual antecedents are as follows:
On June 28, 2004, petitioner was charged with the crime of bigamy before the
Regional Trial Court (RTC) of Pasig City in an Information which reads:
On or about December 8, 1999, in Pasig City, and within the jurisdiction of this
Honorable Court, the accused being previously united in lawful marriage with
Karla Y. Medina-Capili and without said marriage having been legally
dissolved or annulled, did then and there willfully, unlawfully and feloniously
contract a second marriage with Shirley G. Tismo, to the damage and
prejudice of the latter.
Contrary to law.3
Petitioner thereafter filed a Motion to Suspend Proceedings alleging that: (1)
there is a pending civil case for declaration of nullity of the second marriage
before the RTC of Antipolo City filed by Karla Y. Medina-Capili; (2) in the event
that the marriage is declared null and void, it would exculpate him from the
charge of bigamy; and (3) the pendency of the civil case for the declaration of
nullity of the second marriage serves as a prejudicial question in the instant
criminal case.
Consequently, the arraignment and pre-trial were reset by the RTC of Pasig
City, in view of the filing of the Motion to Suspend Proceedings filed by
petitioner.
In the interim, the RTC of Antipolo City rendered a decision declaring the
voidness or incipient invalidity of the second marriage between petitioner and
private respondent on the ground that a subsequent marriage contracted by
the husband during the lifetime of the legal wife is void from the beginning.
Thereafter, the petitioner accused filed his Manifestation and Motion (to
Dismiss) praying for the dismissal of the criminal case for bigamy filed against
him on the ground that the second marriage between him and private
respondent had already been declared void by the RTC.
In an Order4 dated July 7, 2006, the RTC of Pasig City granted petitioner’s
Manifestation and Motion to Dismiss, to wit:
The motion is anchored on the allegation that this case should be dismissed
as a decision dated December 1, 2004 had already been rendered by the
Regional Trial Court of Antipolo City, Branch 72 in Civil Case No. 01-6043
(entitled: "Karla Medina-Capili versus James Walter P. Capili and Shirley G.
Tismo," a case for declaration of nullity of marriage) nullifying the second
marriage between James Walter P. Capili and Shirley G. Tismo and said
decision is already final.
In the opposition filed by the private prosecutor to the motion, it was stated,
among others, that the issues raised in the civil case are not similar or
intimately related to the issue in this above-captioned case and that the
resolution of the issues in said civil case would not determine whether or not
the criminal action may proceed.
WHEREFORE, after a judicious evaluation of the issue and arguments of the
parties, this Court is of the humble opinion that there is merit on the Motion to
dismiss filed by the accused as it appears that the second marriage between
James Walter P. Capili and Shirley G. Tismo had already been nullified by the
Regional Trial Court, Branch 72 of Antipolo City which has declared "the
voidness, non-existent or incipient invalidity" of the said second marriage. As
such, this Court submits that there is no more bigamy to speak of.
SO ORDERED.
Aggrieved, private respondent filed an appeal before the CA.
Thus, in a Decision5 dated February 1, 2008, the CA reversed and set aside
the RTC’s decision. The fallo reads:
WHEREFORE, premises considered, the Order dated 07 July 2006 of the
Regional Trial Court of Pasig City, Branch 152 in Crim. Case No. 128370 is
REVERSED and SET ASIDE. The case is remanded to the trial court for
further proceedings. No costs.
SO ORDERED.6
Petitioner then filed a Motion for Reconsideration against said decision, but the
same was denied in a Resolution[7] dated July 24, 2008.
Accordingly, petitioner filed the present petition for review on certiorari alleging
that:
THERE IS NO LEGAL BASIS FOR THE COURT OF APPEALS TO
DISREGARD EXISTING JURISPRUDENCE PRONOUNCED BY
THIS HONORABLE SUPREME COURT AND TO REVERSE THE
ORDER DATED JULY 7, 2006 OF THE TRIAL COURT (REGIONAL
TRIAL COURT, PASIG CITY, BRANCH 152) ISSUED IN CRIMINAL
CASE NO. 128370 GRANTING THE MOTION TO DISMISS THE
CASE OF BIGAMY AGAINST PETITIONER, INASMUCH AS THE
ISSUANCE OF THE SAID ORDER IS BASED ON THE FINDINGS
AND/OR FACTS OF THE CASE IN THE DECISION OF THE
REGIONAL TRIAL COURT OF ANTIPOLO CITY, BRANCH 72, IN
CIVIL CASE NO. 01-6043 AND THE CONCLUDING AND
DISPOSITIVE PORTION IN THE SAID DECISION WHICH STATES
THAT, AFTER PERUSAL OF THE EVIDENCE ON RECORD AND
THE TESTIMONIES OF WITNESSES X X X, THE MARRIAGE
BETWEEN PETITIONER JAMES WALTER P. CAPILI AND PRIVATE
RESPONDENT SHIRLEY G. TISMO, IS HEREBY NULL AND VOID.
THE COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT THE DECLARATION OF NULLITY OF MARRIAGE
BETWEEN PETITIONER JAMES WALTER P. CAPILI AND SHIRLEY
G. TISMO BY THE REGIONAL TRIAL COURT OF ANTIPOLO CITY,
BRANCH 72 IN ITS DECISION IN CIVIL CASE NO. 01-6043, IS ON
THE GROUND THAT IT IS BIGAMOUS IN NATURE, DESPITE THE
ABSENCE OF ANY SUCH FINDINGS OR FACTS ON WHICH IT IS
BASED IN VIOLATION OF ARTICLE VIII, SECTION 14 OF THE 1987
CONSTITUTION, AND IN CONCLUDING THAT THE SAID
DECLARATION OF NULLITY OF MARRIAGE IS NOT A GROUND
FOR DISMISSAL OF THE BIGAMY CASE AGAINST THE
PETITIONER, WHICH RULING IS NOT IN ACCORDANCE WITH
THE FACTS OF THE CASE OF THE SAID DECISION AND WHICH
IS CONTRARY TO APPLICABLE LAWS AND ESTABLISHED
JURISPRUDENCE.
THE CASE OF TENEBRO V. COURT OF APPEALS SPEAKS FOR
ITSELF. IT IS AN EXCEPTION TO EXISTING JURISPRUDENCE
INVOLVING DECLARATION OF NULLITY OF MARRIAGE AND IS
APPLICABLE ONLY TO THE SET OF FACTS IN THE SAID CASE,
AND THE GROUND FOR DECLARATION OF NULLITY OF
MARRIAGE IS PSYCHOLOGICAL INCAPACITY, HENCE, THERE IS
NO LEGAL BASIS FOR ABANDONING EXISTING
JURISPRUDENCE AS WHERE IN THE INSTANT CASE THE
GROUND FOR DECLARATION OF NULLITY OF MARRIAGE IS
VIOLATIVE OF ARTICLE 3 IN RELATION TO ARTICLE 4 OF THE
FAMILY CODE.
THE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING
THAT THE USE BY RESPONDENT SHIRLEY G. TISMO OF THE
SURNAME "CAPILI" IS ILLEGAL INASMUCH AS THE DECISION OF
THE REGIONAL TRIAL COURT OF ANTIPOLO CITY, BRANCH 72
IN CIVIL CASE NO. 01-6043 DECLARING NULL AND VOID THE
MARRIAGE BETWEEN JAMES WALTER P. CAPILI AND SHIRLEY
G. TISMO HAD LONG BECOME FINAL AND UNAPPEALABLE AS
OF THE DATE OF THE SAID DECISION ON DECEMBER 1, 2004
AND DULY RECORDED IN THE RECORDS OF ENTRIES IN THE
CORRESPONDING BOOK IN THE OFFICE OF THE CIVIL
REGISTRAR OF PASIG CITY AND THE NATIONAL STATISTICS
OFFICE.8
In essence, the issue is whether or not the subsequent declaration of nullity of
the second marriage is a ground for dismissal of the criminal case for bigamy.
We rule in the negative.
Article 349 of the Revised Penal Code defines and penalizes the crime of
bigamy as follows:
Art. 349. Bigamy. – The penalty of prision mayor shall be imposed upon any
person who shall contract a second or subsequent marriage before the former
marriage has been legally dissolved, or before the absent spouse has been
declared presumptively dead by means of a judgment rendered in the proper
proceedings.
The elements of the crime of bigamy, therefore, are: (1) the offender has been
legally married; (2) the marriage has not been legally dissolved or, in case his
or her spouse is absent, the absent spouse could not yet be presumed dead
according to the Civil Code; (3) that he contracts a second or subsequent
marriage; and (4) that the second or subsequent marriage has all the essential
requisites for validity.9
In the present case, it appears that all the elements of the crime of bigamy
were present when the Information was filed on June 28, 2004.
It is undisputed that a second marriage between petitioner and private
respondent was contracted on December 8, 1999 during the subsistence of a
valid first marriage between petitioner and Karla Y. Medina-Capili contracted
on September 3, 1999. Notably, the RTC of Antipolo City itself declared the
bigamous nature of the second marriage between petitioner and private
respondent. Thus, the subsequent judicial declaration of the second marriage
for being bigamous in nature does not bar the prosecution of petitioner for the
crime of bigamy.
Jurisprudence is replete with cases holding that the accused may still be
charged with the crime of bigamy, even if there is a subsequent declaration of
the nullity of the second marriage, so long as the first marriage was still
subsisting when the second marriage was celebrated.
In Jarillo v. People,10 the Court affirmed the accused’s conviction for bigamy
ruling that the crime of bigamy is consummated on the celebration of the
subsequent marriage without the previous one having been judicially declared
null and void, viz.:
second marriage before the judicial declaration of the first marriage assumes
the risk of being prosecuted for bigamy.12
Finally, it is a settled rule that the criminal culpability attaches to the offender
upon the commission of the offense, and from that instant, liability appends to
him until extinguished as provided by law.13 It is clear then that the crime of
bigamy was committed by petitioner from the time he contracted the second
marriage with private respondent. Thus, the finality of the judicial declaration
of nullity of petitioner’s second marriage does not impede the filing of a criminal
charge for bigamy against him.
WHEREFORE, premises considered, the petition is DENIED. The Decision
dated February 1, 2008 and Resolution dated July 24, 2008 of the Court of
Appeals in CA-G.R. CR No. 30444 are hereby AFFIRMED.
SO ORDERED.

The subsequent judicial declaration of the nullity of the first marriage was
immaterial because prior to the declaration of nullity, the crime had already
been consummated. Moreover, petitioner’s assertion would only delay the
prosecution of bigamy cases considering that an accused could simply file a
petition to declare his previous marriage void and invoke the pendency of that
action as a prejudicial question in the criminal case. We cannot allow that.

The outcome of the civil case for annulment of petitioner’s marriage to [private
complainant] had no bearing upon the determination of petitioner’s innocence
or guilt in the criminal case for bigamy, because all that is required for the
charge of bigamy to prosper is that the first marriage be subsisting at the time
the second marriage is contracted.

Thus, under the law, a marriage, even one which is void or voidable, shall be
deemed valid until declared otherwise in a judicial proceeding. In this case,
even if petitioner eventually obtained a declaration that his first marriage was
void ab initio, the point is, both the first and the second marriage were
subsisting before the first marriage was annulled.11

In like manner, the Court recently upheld the ruling in the aforementioned case
and ruled that what makes a person criminally liable for bigamy is when he
contracts a second or subsequent marriage during the subsistence of a valid
first marriage. It further held that the parties to the marriage should not be
permitted to judge for themselves its nullity, for the same must be submitted to
the judgment of competent courts and only when the nullity of the marriage is
so declared can it be held as void, and so long as there is no such declaration
the presumption is that the marriage exists. Therefore, he who contracts a
G.R. No. L-48157 March 16, 1988
RICARDO QUIAMBAO, petitioner, vs. HON. ADRIANO OSORIO, ZENAIDA
GAZA BUENSUCERO, JUSTINA GAZA BERNARDO, and FELIPE GAZA,
respondents-appellees, LAND AUTHORITY, intervenor-appellant.
FERNAN, J.:
This case was certified to Us by the Court of Appeals as one involving pure
questions of law pursuant to Section 3, Rule 50 of the Revised Rules of Court.
The antecedents are as follows: In a complaint for forcible entry filed by herein
private respondents Zenaida Gaza Buensucero, Justina Gaza Bernardo and
Felipe Gaza against herein petitioner Ricardo Quiambao before the then
Municipal Court of Malabon, Rizal, docketed therein as Civil Case No. 2526, it
was alleged that private respondents were the legitimate possessors of a
30,835 sq. m. lot known as Lot No. 4, Block 12, Bca 2039 of the Longos Estate
situated at Barrio Longos, Malabon Rizal, by virtue of the Agreement to Sell
No. 3482 executed in their favor by the former Land Tenure Administration
[which later became the Land Authority, then the Department of Agrarian
Reform]; that under cover of darkness, petitioner surreptitiously and by force,
intimidation, strategy and stealth, entered into a 400 sq. m. portion thereof,
placed bamboo posts "staka" over said portion and thereafter began the
construction of a house thereon; and that these acts of petitioner, which were
unlawful per se, entitled private respondents to a writ of preliminary injunction
and to the ejectment of petitioner from the lot in question.
Petitioner filed a motion to dismiss the complaint, and upon denial thereof, filed
his Answer to the complaint, specifically denying the material allegations
therein and averring that the Agreement upon which private respondents base
their prior possession over the questioned lot had already been cancelled by
the Land Authority in an Order signed by its Governor, Conrado Estrella. By
way of affirmative defense and as a ground for dismissing the case, petitioner
alleged the pendency of L.A. Case No. 968, an administrative case before the
Office of the Land Authority between the same parties and involving the same
piece of land. In said administrative case, petitioner disputed private
respondents' right of possession over the property in question by reason of the
latter's default in the installment payments for the purchase of said lot.
Petitioner asserted that his administrative case was determinative of private
respondents' right to eject petitioner from the lot in question; hence a
prejudicial question which bars a judicial action until after its termination.
After hearing, the municipal court denied the motion to dismiss contained in
petitioner's affirmative defenses. It ruled that inasmuch as the issue involved
in the case was the recovery of physical possession, the court had jurisdiction
to try and hear the case.
Dissatisfied with this ruling, petitioner filed before the then Court of First
Instance of Rizal, Branch XII, Caloocan City in Civil Case No. C-1576 a petition
for certiorari with injunction against public respondent Judge Adriano Osorio
of the Municipal Court of Malabon and private respondents, praying for the
issuance of a writ of preliminary injunction ordering respondent judge to
suspend the hearing in the ejectment case until after the resolution of said
petition. As prayed for, the then CFI of Rizal issued a restraining order
enjoining further proceedings in the ejectment case.
In his answer, respondent municipal judge submitted himself to the sound
discretion of the CFI in the disposition of the petition for certiorari. Private
respondents, on the other hand, filed a motion to dismiss the petition,
maintaining that the administrative case did not constitute a prejudicial
question as it involved the question of ownership, unlike the ejectment case
which involved merely the question of possession.
Meanwhile, the Land Authority filed an Urgent Motion for Leave to Intervene in
Civil Case No. C-1576 alleging the pendency of an administrative case
between the same parties on the same subject matter in L.A. Case No. 968
and praying that the petition for certiorari be granted, the ejectment complaint
be dismissed and the Office of the Land Authority be allowed to decide the
matter exclusively.
Finding the issue involved in the ejectment case to be one of prior possession,
the CFI dismissed the petition for certiorari and lifted the restraining order
previously issued. Petitioner's motion for reconsideration of the dismissal
order, adopted in toto by Intervenor Land Authority was denied for lack of merit.
Hence, this appeal filed by petitioner Quiambao and intervenor Land Authority
with the Court of Appeals, and certified to Us as aforesaid.
The instant controversy boils down to the sole question of whether or not the
administrative case between the private parties involving the lot subject matter
of the ejectment case constitutes a prejudicial question which would operate
as a bar to said ejectment case.
A prejudicial question is understood in law to be that which arises in a case the
resolution of which is a logical antecedent of the issue involved in said case
and the cognizance of which pertains to another tribunal. 1 The doctrine of
prejudicial question comes into play generally in a situation where civil and
criminal actions are pending and the issues involved in both cases are similar
or so closely related that an issue must be pre-emptively resolved in the civil
case before the criminal action can proceed. Thus, the existence of a
prejudicial question in a civil case is alleged in the criminal case to cause the
suspension of the latter pending final determination of the former.
The essential elements of a prejudicial question as provided under Section 5,
Rule 111 of the Revised Rules of Court are: [a] the civil action involves an
issue similar or intimately related to the issue in the criminal action; and [b] the
resolution of such issue determines whether or not the criminal action may
proceed.
The actions involved in the case at bar being respectively civil and
administrative in character, it is obvious that technically, there is no prejudicial
question to speak of. Equally apparent, however, is the intimate correlation
between said two [2] proceedings, stemming from the fact that the right of
private respondents to eject petitioner from the disputed portion depends
primarily on the resolution of the pending administrative case. For while it may
be true that private respondents had prior possession of the lot in question, at
the time of the institution of the ejectment case, such right of possession had
been terminated, or at the very least, suspended by the cancellation by the
Land Authority of the Agreement to Sell executed in their favor. Whether or not
private respondents can continue to exercise their right of possession is but a
necessary, logical consequence of the issue involved in the pending
administrative case assailing the validity of the cancellation of the Agreement
to Sell and the subsequent award of the disputed portion to petitioner. If the
cancellation of the Agreement to Sell and the subsequent award to petitioner
are voided, then private respondents would have every right to eject petitioner
from the disputed area. Otherwise, private respondent's light of possession is
lost and so would their right to eject petitioner from said portion.
Faced with these distinct possibilities, the more prudent course for the trial
court to have taken is to hold the ejectment proceedings in abeyance until after
a determination of the administrative case. Indeed, logic and pragmatism, if
not jurisprudence, dictate such move. To allow the parties to undergo trial
notwithstanding the possibility of petitioner's right of possession being upheld
in the pending administrative case is to needlessly require not only the parties
but the court as well to expend time, effort and money in what may turn out to
be a sheer exercise in futility. Thus, 1 Am Jur 2d tells us:
The court in which an action is pending may, in the exercise of a sound
discretion, upon proper application for a stay of that action, hold the action
in abeyance to abide the outcome of another pending in another court,
especially where the parties and the issues are the same, for there is
power inherent in every court to control the disposition of causes on its
dockets with economy of time and effort for itself, for counsel, and for
litigants. Where the rights parties to the second action cannot be properly
determined until the questions raised in the first action are settled the
second action should be stayed.2
While this rule is properly applicable to instances involving two [2] court
actions, the existence in the instant case of the same considerations of Identity
of parties and issues, economy of time and effort for the court, the counsels
and the parties as well as the need to resolve the parties' right of possession
before the ejectment case may be properly determined, justifies the rule's
analogous application to the case at bar.
Fortich-Celdran, et al. vs. Celdran, et al., 19 SCRA 502, provides another
analogous situation. In sustaining the assailed order of the then Court of First
Instance of Misamis Oriental ordering the suspension of the criminal case for
falsification of public document against several persons, among them the
subscribing officer Santiago Catane until the civil case involving the issue of
the genuineness of the alleged forged document shall have been decided, this
Court cited as a reason therefor its own action on the administrative charges
against said Santiago Catane, as follows:
It should be mentioned here also that an administrative case filed in this
Court against Santiago Catane upon the same charge was held by Us in
abeyance, thus:
"As it appears that the genuineness of the document allegedly forged
by respondent attorneys in Administrative Case No. 77 [Richard
Ignacio Celdran vs. Santiago Catane, etc., et al.] is necessarily
involved in Civil Case No. R-3397 of the Cebu Court of First Instance,
action on the herein complaint is withheld until that litigation has
finally been decided. Complainant Celdran shall inform the Court
about such decision."3
If a pending civil case may be considered to be in the nature of a prejudicial
question to an administrative case, We see no reason why the reverse may
not be so considered in the proper case, such as in the petition at bar. Finally,
events occuring during the pendency of this petition attest to the wisdom of the
conclusion herein reached. For in the Manifestation filed by counsel for
petitioner, it was stated that the intervenor Land Authority which later became
the Department of Agrarian Reform had promulgated a decision in the
administrative case, L.A. Case No. 968 affiriming the cancellation of
Agreement to Sell No. 3482 issued in favor of private respondents. With this
development, the folly of allowing the ejectment case to proceed is too evident
to need further elaboration.
WHEREFORE, the instant petition is hereby GRANTED. Civil Case No. 2526
of the then Municipal Court of Malabon, Rizal is hereby ordered DISMISSED.
No Costs. SO ORDERED.
G.R. No. 112381 March 20, 1995
ISABELO APA, MANUEL APA and LEONILO JACALAN, petitioners,
vs. HON. RUMOLDO R. FERNANDEZ, HON. CELSO V. ESPINOSA, and
SPS. FELIXBERTO TIGOL, JR. and ROSITA TAGHOY TIGOL, respondents.
MENDOZA, J.:
This is a special civil action of certiorari to set aside orders of respondent
Judge Rumoldo R. Fernandez of the Regional Trial Court, Branch 54, at Lapu-
Lapu City, denying petitioners oral motion for the suspension of their
arraignment in Criminal Case No. 012489, entitled: "People of the Philippines
v. Isabelo Apa; Manuel Apa and Leonilo Jacalan," as well as their motion for
reconsideration.
Criminal Case No. 012489 is a prosecution for violation of P.D. 772 otherwise
known as the Anti-Squatting Law. The information alleges:
That on February 1990, or prior thereto, in Agus, Lapulapu
City, Philippines and within the jurisdiction of this Honorable
Court, the above-named accused [herein petitioners Isabelo
Apa, Manuel Apa and Dionisio Jacalan], conspiring,
confederating and mutually helping with one another, without
the knowledge and consent of the owner, ROSITA TIGOL, did
then and there wilfully, unlawfully and feloniously take
advantage of the absence or tolerance of the said owner by
occupying or possessing a portion of her real property, Lot No.
3635-B of Opon Cadastre, covered by Transfer Certificate of
Title No. 13250, situated in Agus Lapulapu City, whereon they
constructed their respective residential houses against the will
of Rosita Tigol, which acts of the said accused have deprived
the latter of the use of a portion of her land, to her damage
and prejudice because despite repeated demands the said
accused failed and refused, as they still fail and refuse to
vacate the premises above-mentioned.
Petitioners moved for the suspension of their arraignment on the ground that
there was a prejudicial question pending resolution in another case being tried
in Branch 27 of the same court. The case, docketed as Civil Case No. 2247-L
and entitled "Anselmo Taghoy and Vicente Apa versus Felixberto Tigol, Jr. and
Rosita T. Tigol, et al.," concerns the ownership of Lot No. 3635-B.1 In that case,
petitioners seek a declaration of the nullity of TCT No. 13250 of Rosita T. Tigol
and the partition of the lot in question among them and private respondent
Rosita T. Tigol as heirs of Filomeno and Rita Taghoy. The case had been filed
in 1990 by petitioners, three years before May 27, 1993 when the criminal case
for squatting was filed against them.
On August 25, 1993, the trial court denied the petitioners' motion and
proceeded with their arraignment. Petitioners, therefore, had to enter their plea
(not guilty) to the charge.
On September 2, 1993, petitioners filed a motion for reconsideration but their
motion was denied by the court in its order dated September 21, 1993. Hence,
this petition.
The only issue in this case is whether the question of ownership of Lot No.
3635-B, which was pending, in Civil Case No. 2247-L, is a prejudicial question
justifying suspension of the proceedings in the criminal case against
petitioners.
We hold that it is.
A prejudicial question is a question which is based on a fact distinct and
separate from the crime but so intimately connected with it that its resolution
is determinative of the guilt or innocence of the accused. To justify suspension
of the criminal action, it must appear not only that the civil case involves facts
intimately related to those upon which the criminal prosecution is based but
also that the decision of the issue or issues raised in the civil case would be
decisive of the guilt or innocence of the accused.2 Rule 111, §5 provides:
Sec. 6. Elements of prejudicial question. — The two (2)
essential elements of a prejudicial questions are: (a) the civil
action involves an issue similar or intimately related to the
issue raised in the criminal action; and (b) the resolution of
such issue determines whether or not the criminal action may
proceed.
In the criminal case, the question is whether petitioners occupied a piece of
land not belonging to them but to private respondent and against the latter's
will. As already noted, the information alleges that "without the knowledge and
consent of the owner, ROSITA TIGOL" petitioners occupied or took
possession of a portion of "her property" by building their houses thereon and
"deprived [her] of the use of portion of her land to her damage and prejudice.
Now the ownership of the land in question, known as Lot 3635-B of the Opon
cadastre covered by TCT No. 13250, is the issue in Civil Case 2247-L now
pending in Branch 27 of the RTC at Lapulapu City. The resolution, therefore,
of this question would necessarily be determinative of petitioners criminal
liability for squatting.
In fact it appears that on February 23, 1994, the court trying the civil case
rendered a decision nullifying TCT No. 13250 of private respondent and her
husband and declared the lot in question to be owned in common by the
spouses and the petitioners as inheritance from their parents Filomeno and
Rita Taghoy. While private respondents claim that the decision in that case is
not yet final because they have filed a motion for new trial, the point is that
whatever may be the ultimate resolution of the question of ownership, such
resolution will be determinative of the guilt or innocence of petitioners in the
criminal case. Surely, if petitioners are co-owners of the lot in question, they
cannot be found guilty of squatting because they are as much entitled to the
use and occupation of the land as are the private respondent Rosita T. Tigol
and her family.3

Private respondents argues that even the owner of a piece of a land can be
ejected from his property since the only issue in such a case is the right to its
physical possession. Consequently, they contend, he can also be prosecuted
under the Anti-Squatting Law.

The contention misses the case is the essential point that the owner of a piece
of land can be ejected only if for some reason, e.g., he has let his property to
the plaintiff, he has given up its temporary possession. But in the case at bar,
no such agreement is asserted by private respondent. Rather private
respondent claims the right to possession based on her claim of ownership.
Ownership is thus the pivotal question. Since this is the question in the civil
case, the proceedings in the criminal case must in the meantime be
suspended.

WHEREFORE, the petition is GRANTED and respondent judge is ordered to

SUSPEND the proceedings in Criminal Case No. 012489 until the question of
ownership in Civil Case No. 2247-L has been resolved with finality and
thereafter proceed with the trial of the criminal case if the civil case is decided
and terminated adversely against petitioners. Otherwise he should dismiss the
criminal case.

SO ORDERED.
G.R. No. 137567 June 20, 2000
MEYNARDO L. BELTRAN, petitioner, vs. PEOPLE OF THE PHILIPPINES,
and HON. JUDGE FLORENTINO TUAZON, JR., being the Judge of the
RTC, Brach 139, Makati City, respondents.
BUENA, J.:
This petition for review, filed under Rule 45 of the 1997 Rules of Civil
Procedure, seeks to review and set aside the Order dated January 28, 1999
issued by Judge Florentino A. Tuazon, Jr. of the Regional Trial Court of Makati
City, Branch 139 in Special Civil Case No. 98-3056, entitled "Meynardo Beltran
vs. People of the Philippines and Hon. Judge Alden Cervantes of the
Metropolitan Trial Court of Makati City, Branch 61." The said Order denied
petitioner's prayer for the issuance of a writ of preliminary injunction to enjoin
Judge Cervantes from proceeding with the trial of Criminal Case No. 236176,
a concubinage case against petitioner on the ground that the pending petition
for declaration of nullity of marriage filed by petitioner against his wife
constitutes a prejudicial question.
The antecedent facts of the case are undisputed:
Petitioner Meynardo Beltran and wife Charmaine E. Felix were married on
June 16, 1973 at the Immaculate Concepcion Parish Church in Cubao,
Quezon City.1
On February 7, 1997, after twenty-four years of marriage and four
children,2 petitioner filed a petition for nullity of marriage on the ground of
psychological incapacity under Article 36 of the Family Code before Branch 87
of the Regional Trial Court of Quezon City. The case was docketed as Civil
Case No. Q-97-30192.3
In her Answer to the said petition, petitioner's wife Charmaine Felix alleged
that it was petitioner who abandoned the conjugal home and lived with a
certain woman named Milagros Salting.4 Charmaine subsequently filed a
criminal complaint for concubinage5 under Article 334 of the Revised Penal
Code against petitioner and his paramour before the City Prosecutor's Office
of Makati who, in a Resolution dated September 16, 1997, found probable
cause and ordered the filing of an Information6 against them. The case,
docketed as Criminal Case No. 236176, was filed before the Metropolitan Trial
Court of Makati City, Branch 61.1awphi1
On March 20, 1998, petitioner, in order to forestall the issuance of a warrant
for his arrest, filed a Motion to Defer Proceedings Including the Issuance of the
Warrant of Arrest in the criminal case. Petitioner argued that the pendency of
the civil case for declaration of nullity of his marriage posed a prejudicial
question to the determination of the criminal case. Judge Alden Vasquez
Cervantes denied the foregoing motion in the Order 7 dated August 31, 1998.
Petitioner's motion for reconsideration of the said Order of denial was likewise
denied in an Order dated December 9, 1998.
In view of the denial of his motion to defer the proceedings in the concubinage
case, petitioner went to the Regional Trial Court of Makati City, Branch 139
on certiorari, questioning the Orders dated August 31, 1998 and December 9,
1998 issued by Judge Cervantes and praying for the issuance of a writ of
preliminary injunction.8 In an Order9 dated January 28, 1999, the Regional Trial
Court of Makati denied the petition for certiorari. Said Court subsequently
issued another Order 10 dated February 23, 1999, denying his motion for
reconsideration of the dismissal of his petition.
Undaunted, petitioner filed the instant petition for review.
Petitioner contends that the pendency of the petition for declaration of nullity
of his marriage based on psychological incapacity under Article 36 of the
Family Code is a prejudicial question that should merit the suspension of the
criminal case for concubinage filed against him by his wife.
Petitioner also contends that there is a possibility that two conflicting decisions
might result from the civil case for annulment of marriage and the criminal case
for concubinage. In the civil case, the trial court might declare the marriage as
valid by dismissing petitioner's complaint but in the criminal case, the trial court
might acquit petitioner because the evidence shows that his marriage is void
on ground of psychological incapacity. Petitioner submits that the possible
conflict of the courts' ruling regarding petitioner's marriage can be avoided, if
the criminal case will be suspended, until the court rules on the validity of
marriage; that if petitioner's marriage is declared void by reason of
psychological incapacity then by reason of the arguments submitted in the
subject petition, his marriage has never existed; and that, accordingly,
petitioner could not be convicted in the criminal case because he was never
before a married man.
Petitioner's contentions are untenable.
The rationale behind the principle of prejudicial question is to avoid two
conflicting decisions. It has two essential elements: (a) the civil action involves
an issue similar or intimately related to the issue raised in the criminal action;
and (b) the resolution of such issue determines whether or not the criminal
action may proceed. 11
The pendency of the case for declaration of nullity of petitioner's marriage is
not a prejudicial question to the concubinage case. For a civil case to be
considered prejudicial to a criminal action as to cause the suspension of the
latter pending the final determination of the civil case, it must appear not only
that the said civil case involves the same facts upon which the criminal
prosecution would be based, but also that in the resolution of the issue or
issues raised in the aforesaid civil action, the guilt or innocence of the accused
would necessarily be determined.
Art. 40 of the Family Code provides:
The absolute nullity of a previous marriage may be invoked for
purposes of remarriage on the basis solely of a final judgment
declaring such previous marriage void.
In Domingo vs. Court of Appeals, 12 this
Court ruled that the import of said
provision is that for purposes of remarriage, the only legally acceptable basis
for declaring a previous marriage an absolute nullity is a final judgment
declaring such previous marriage void, whereas, for purposes of other than
remarriage, other evidence is acceptable. The pertinent portions of said
Decision read:
. . . Undoubtedly, one can conceive of other instances where a party
might well invoke the absolute nullity of a previous marriage for
purposes other than remarriage, such as in case of an action for
liquidation, partition, distribution and separation of property between
the erstwhile spouses, as well as an action for the custody and support
of their common children and the delivery of the latters' presumptive
legitimes. In such cases, evidence needs must be adduced,
testimonial or documentary, to prove the existence of grounds
rendering such a previous marriage an absolute nullity. These needs
not be limited solely to an earlier final judgment of a court declaring
such previous marriage void.
Analogous to this case is that of Landicho vs. Relova 1 cited in Donato
vs. Luna 14 where this Court held that:
. . . Assuming that the first marriage was null and void on the ground
alleged by petitioner, that fact would not be material to the outcome of
the criminal case. Parties to the marriage should not be permitted to
judge for themselves its nullity, for the same must be submitted to the
judgment of the competent courts and only when the nullity of the
marriage is so declared can it be held as void, and so long as there is
no such declaration the presumption is that the marriage exists.
Therefore, he who contracts a second marriage before the judicial
declaration of nullity of the first marriage assumes the risk of being
prosecuted for bigamy.
Thus, in the case at bar it must also be held that parties to the marriage should
not be permitted to judge for themselves its nullity, for the same must be
submitted to the judgment of the competent courts and only when the nullity of
the marriage is so declared can it be held as void, and so long as there is no
such declaration the presumption is that the marriage exists for all intents and
purposes. Therefore, he who cohabits with a woman not his wife before the
judicial declaration of nullity of the marriage assumes the risk of being
prosecuted for concubinage. The lower court therefore, has not erred in
affirming the Orders of the judge of the Metropolitan Trial Court ruling that
pendency of a civil action for nullity of marriage does not pose a prejudicial
question in a criminal case for concubinage.
WHEREFORE, for lack of merit, the instant petition is DISMISSED.
SO ORDERED.

So that in a case for concubinage, the accused, like the herein petitioner need
not present a final judgment declaring his marriage void for he can adduce
evidence in the criminal case of the nullity of his marriage other than proof of
a final judgment declaring his marriage void.

With regard to petitioner's argument that he could be acquitted of the charge

of concubinage should his marriage be declared null and void, suffice it to state
that even a subsequent pronouncement that his marriage is void from the
beginning is not a defense.
G.R. No. 148595 July 12, 2004
SPOUSES ANTONIO S. PAHANG and LOLITA T. PAHANG, petitioners, vs.
HON. AUGUSTINE A. VESTIL, Presiding Judge of Regional Trial Court-
Branch 56, Mandaue City, DEPUTY SHERIFF, Regional Trial Court-Branch 56
and METROPOLITAN BANK and TRUST COMPANY, respondents.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari filed by the Spouses Antonio and
Lolita Pahang, for the nullification of the Decision1 and Resolution2 of the Court of
Appeals in CA-G.R. SP No. 59157.
The Antecedents
On January 5, 1996, the petitioners, Spouses Antonio and Lolita Pahang, received
a short-term loan of one million five hundred thousand pesos (P1,500,000.00) from
the respondent Metropolitan Bank & Trust Company payable on December 27,
1996. The loan was covered by Non-Negotiable Promissory Note No. 1906013 and
was, likewise, secured by a real estate mortgage on a parcel of land covered by
Transfer Certificate of Title (TCT) No. 29607.4 As the petitioners failed to pay the
loan, the interest and the penalties due thereon, the respondent foreclosed the real
estate mortgage extrajudicially. As a consequence, the mortgaged property was
sold at public auction on January 8, 1998 to the respondent bank as the highest
bidder. A certificate of sale was executed by Pasnonito D. Antiporda as Ex-Officio
Sheriff in favor of the respondent on January 14, 1998 and was registered with the
Register of Deeds of Mandaue City on January 27, 1998.
On December 29, 1998, the respondent wrote the petitioners that the one-year
redemption period of the property would expire on January 27, 1999.5 Instead of
redeeming the property, the petitioners filed, on January 19, 1999, a complaint for
annulment of extrajudicial sale against the respondent bank and the Sheriff in the
Regional Trial Court of Cebu (Mandaue City), Branch 56, docketed as Civil Case
No. MAN-3454.6 Therein, the petitioners alleged that the respondent bloated their
obligation of P1,500,000.00 to P2,403,770.73 by including excessive past due
interest, penalty charges, attorney’s fees and sheriff’s expense. They claimed that
such exorbitant charges were made to frustrate their chance to pay the loan, and
to ensure that the respondent bank would be the highest bidder during the auction
sale. They also asserted that the respondent failed to remit to the Sheriff the
purchase price of the property and was, likewise, guilty of fraud, collusion, breach
of trust or misconduct in the conduct of the auction sale of their property. Besides
praying for injunctive relief, the petitioners prayed for the following alternative
reliefs:
3. After trial on the merits, and after determination of plaintiffs’ true
obligation with defendant bank, to declare the foreclosure on the subject
property as null and void, and to allow the plaintiffs to pay the same; as
alternative prayer, to allow the plaintiffs to redeem the subject real
property based on the amount determined and established as true and
exact obligation of plaintiffs to defendant bank.7
After the expiration of the one-year redemption period, the respondent
consolidated its ownership over the foreclosed property. Consequently, TCT No.
44668 was issued by the Register of Deeds in its name. On July 23, 1999, the
respondent filed a Petition for Writ of Possession before the RTC of Mandaue City
(Branch 56), docketed as LRC Case No. 3.8
The petitioners, citing the ruling of this Court in Belisario v. The Intermediate
Appellate Court,9 opposed the petition on the ground that the core issue in their
complaint in Civil Case No. MAN-3454 constituted a prejudicial question, which
warranted a suspension of the proceedings before the court. The petitioners
averred that the filing of their complaint within the period to redeem the foreclosed
property was equivalent to an offer to redeem the same, and had the effect of
preserving such right. They also asserted that the respondent acted in bad faith in
procuring the title over the property despite the pendency of their complaint in Civil
Case No. MAN-3454.
On March 28, 2000, the RTC of Mandaue City, Branch 56, rendered a decision in
LRC Case No. 3 granting the petition and ordering the issuance of a writ of
possession in favor of the respondent.10
Citing the case of Javelosa v. Court of Appeals,11 and Gawaran v. Court of
Appeals,12 the RTC ruled that since the petitioners failed to redeem the property
within one year from the foreclosure, the respondent was entitled to a writ of
possession as a necessary consequence of the readjudication of ownership and
the corresponding issuance of the original certificate.13 The petitioners filed a
motion for reconsideration of the decision, but the court issued an order denying
the motion, stating that it was merely its ministerial function to issue a writ of
possession.14
The petitioners filed a petition for certiorari before the Court of Appeals, docketed
as CA-G.R. SP No. 59157 for the nullification of the March 28, 2000 Decision and
the May 19, 2000 Order of the RTC. Thepetitioners alleged that the RTC committed
a grave abuse of its discretion amounting to excess or lack of jurisdiction in
granting the petition of the respondent bank for a writ of possession in LRC Case
No. 3 instead of suspending the proceedings therein based on the ruling of this
Court in Belisario vs. The Intermediate Appellate Court.15
The Ruling of the Court of Appeals
Finding that the RTC did not act with grave abuse of discretion in ordering the
issuance of the writ of possession, the CA rendered a decision on March 2, 2001,
dismissing the petition.16 Citing the rulings of this Court in Vda. de Jacob v. Court
of Appeals17 and Navarra v. Court of Appeals,18 the CA explained that the
pendency of a separate proceeding questioning the validity of the mortgage and
the extrajudicial foreclosure thereof cannot bar the issuance of a writ of possession
in favor of the purchaser at public auction. The appellate court ruled that after a
title on the property has been consolidated in the mortgagee, the issuance of a writ
of possession becomes a ministerial act of the trial court. Furthermore, the right of
the respondent bank to possess the property was based on its right of ownership
as a purchaser of the properties in the foreclosure sale. The CA explained that the
ruling in the Belisariocase was inapplicable because it involved a complaint to
enforce the repurchase of the foreclosed property within the period of redemption,
whereas, the complaint filed by the petitioners in Civil Case No. MAN-3454 was for
the annulment of the mortgage or extrajudicial sale which was not equivalent to an
offer to redeem the property.19
The Present Petition
The motion for reconsideration of the petitioners of the decision, having been
denied by the appellate court, the petitioners filed this instant petition, assigning
the following errors:
1. THE HONORABLE COURT OF APPEALS ERRED IN FINDING
PETITIONERS’ RIGHT OF REDEMPTION OVER THEIR FORECLOSED
PROPERTY AS HAVING EXPIRED ON JANUARY 26, 1999, IN THE
LIGHT OF THEIR PENDING COMPLAINT TO ANNUL THE
FORECLOSURE FILED BEFORE THE EXPIRATION OF THE ONE-
YEAR REDEMPTION PERIOD, ON THE GROUND OF FRAUD, AND
CONSIDERING FURTHER THEIR SPECIFIC PRAYER THEREOF FOR
DETERMINATION OF THEIR TRUE OBLIGATION WITH PRIVATE
RESPONDENT, AND TO ALLOW THEM TO PAY THE SAME AND/OR
TO REDEEM THEIR FORECLOSED PROPERTY.20
2. PETITIONERS’ COMPLAINT FOR ANNULMENT OF THE
FORECLOSURE OF THEIR PROPERTY WITH A PRAYER FOR
TEMPORARY RESTRAINING ORDER AND INJUNCTION TO STOP
THE ISSUANCE OF A DEFINITE DEED OF SALE AND
CONSOLIDATION OF TITLE OF THEIR PROPERTY IN FAVOR OF
PRIVATE RESPONDENT, WHILE GIVING PREFERENCE AND ACTING
WITH DISPATCH ON PRIVATE RESPONDENT’S PETITION FOR
ISSUANCE OF WRIT OF POSSESSION ON THE SAME PROPERTY,
BY GRANTING THE WRIT OF POSSESSION THEREON THEREBY
RENDERING MOOT AND ACADEMIC PETITIONERS’ PRAYERS IN
THEIR COMPLAINT FOR ANNULMENT OF FORECLOSURE.21
3. THE HONORABLE COURT OF APPEALS ERRED IN FINDING THE
DECISION OF THIS HONORABLE SUPREME COURT IN THE CASE
OF BELISARIO VS. THE INTERMEDIATE APPELLATE COURT, G.R.
NO. L-73503, WHEREBY "THE FILING OF THE COMPLAINT TO
ENFORCE REPURCHASE WITHIN THE PERIOD FOR REDEMPTION
IS EQUIVALENT TO AN OFFER TO REDEEM AND HAS THE EFFECT
OF PRESERVING THE RIGHT OF REDEMPTION" INAPPLICABLE TO
THE CASE OF PETITIONERS.22
4. THE HONORABLE COURT OF APPEALS ERRED IN NOT
APPRECIATING THE FACT THAT THE ISSUE OR ISSUES JOINED IN
THE COMPLAINT FOR ANNULMENT BEFORE RESPONDENT JUDGE
DOCKETED AS CIVIL CASE NO. MAN-4353 (sic) IS A PREJUDICIAL
QUESTION TO THE ISSUE RAISED IN THE PETITION FOR WRIT OF
POSSESSION IN LRC CASE NO. 3.23
5. THE HONORABLE COURT OF APPEALS ERRED IN HAVING
FAILED TO CONSIDER THE VALID CAUSES OF ACTION OF
PETITIONERS IN THEIR COMPLAINT FOR ANNULMENT IN CIVIL
CASE NO. MAN-4354 (sic).24
The threshold issues are as follows: (a) whether or not the complaint of the
petitioners in Civil Case No. MAN-3454 for annulment of extrajudicial sale is a
prejudicial question to the petition of the respondent bank for the issuance of a writ
of possession in LRC Case No. 3; and, (b) whether or not the RTC committed a
grave abuse of its discretion amounting to excess or lack of jurisdiction in granting
the petition of the respondent in LRC Case No. 3 and in issuing the writ of
possession in its favor.
The issues being interrelated, the Court shall resolve the same simultaneously.
The petitioners contend that their complaint in Civil Case No. MAN-3454 and the
respondent’s petition for a writ of possession in LRC Case No. 3 were raffled to
Branch 56 of the RTC. Although their complaint in Civil Case No. MAN-3454 was
for the nullification of the extrajudicial sale at public auction on the ground of fraud,
they also prayed, as an alternative remedy, that they be allowed to redeem the
property based on the amount to be determined by the court after trial. Hence, they
assert, the filing of their complaint before the expiry of the redemption period to
enforce their right of redemption was equivalent to a formal offer to redeem the
property and had the effect of preserving their right of redemption. They argue that
the RTC should have suspended the proceedings in LRC Case No. 3 pending the
final resolution of Civil Case No. MAN-3454 so as not to render moot and academic
the latter case, conformably with the ruling of the Court in Belisario vs. The
Intermediate Appellate Court,25 after all, the two cases were pending before the
same court. The petitioners, thus, aver that the trial court committed grave abuse
of discretion amounting to excess or lack of jurisdiction in granting the petition of
the respondent bank for a writ of possession in LRC Case No. 3. They, likewise,
aver that the Court of Appeals erred when it affirmed the decision of the trial court
and declared, thus:
 Further, as to the applicability of the case of Belisario vs. Intermediate
Appellate Court (G.R. No. L-73503, Aug. 30, 1988, 165 SCRA 101, 108),
suffice it to say, that the cause of action therein was to enforce the
repurchase of the foreclosed property within the period of redemption,
which the Supreme Court held that it has the effect of preserving the right
of redemption. Whereas, Civil Case No. MAN-3454 filed by the petitioners
is for the annulment of mortgage or extrajudicial sale, which is not in effect
an offer to redeem. Verily, the pendency of said civil case does not
preserve the right of redemption of the petitioners after the period of
redemption.26
The Court’s Ruling
The contentions of the petitioners have no merit.
A prejudicial question is one that arises in a case the resolution of which is a logical
antecedent of the issue involved therein, and the cognizance of which pertains to
another tribunal. It generally comes into play in a situation where a civil action and
a criminal action are both pending and there exists in the former an issue that must
be preemptively resolved before the criminal action may proceed, because
howsoever the issue raised in the civil action is resolved would be determinative
juris et de jure of the guilt or innocence of the accused in the criminal case. The
rationale behind the principle of prejudicial question is to avoid two conflicting
decisions.27
In the present case, the complaint of the petitioners for Annulment of Extrajudicial
Sale is a civil action and the respondent’s petition for the issuance of a writ of
possession of Lot No. 3-A, Block 1, Psd-07-021410, TCT No. 44668 is but an
incident in the land registration case and, therefore, no prejudicial question can
arise from the existence of the two actions.28 A similar issue was raised in Manalo
vs. Court of Appeals,29 where we held that:
At any rate, it taxes our imagination why the questions raised in Case No.
98-0868 must be considered determinative of Case No. 9011. The basic
issue in the former is whether the respondent, as the purchaser in the
extrajudicial foreclosure proceedings, may be compelled to have the
property repurchased or resold to a mortgagor’s successor-in-interest
(petitioner); while that in the latter is merely whether the respondent, as
the purchaser in the extrajudicial foreclosure proceedings, is entitled to a
writ of possession after the statutory period for redemption has expired.
The two cases, assuming both are pending, can proceed separately and
take their own direction independent of each other.30
The focal issue in Civil Case No. MAN-3454 was whether the extrajudicial
foreclosure of the real estate mortgage executed by the petitioners in favor of the
respondent bank and the sale of their property at public auction for P2,403,770.73
are null and void, whereas, the issue in LRC Case No. 3 was whether the
respondent bank was entitled to the possession of the property after the statutory
period for redemption had lapsed and title was issued .
Our ruling in Belisario has no application in this case because in the said case, no
prejudicial question was involved. We merely held therein that the filing of an action
to enforce redemption within the period of redemption is equivalent to a formal offer
to redeem, and should the Court allow the redemption, the redemptioner should
then pay the amount already determined. In fine, the filing of an action by the
redemptioner to enforce his right to redeem does not suspend the running of the
statutory period to redeem the property, nor bar the purchaser at public auction
from procuring a writ of possession after the statutory period of redemption had
lapsed, without prejudice to the final outcome of such complaint to enforce the right
of redemption.31
The remedy of the petitioners from the assailed decision of the RTC in LRC Case
No. 3 was to appeal by writ of error to the Court of Appeals.32 However, instead of
appealing by writ of error, the petitioners filed their petition for certiorari. Certiorari
is not proper where the aggrieved party has a plain, speedy and adequate remedy
at law. Moreover, the error of the trial court in granting the respondent bank a writ
of possession, if at all, was an error of judgment correctible only by an ordinary
appeal.
It bears stressing that the proceedings in a petition and/or motion for the issuance
of a writ of possession, after the lapse of the statutory period for redemption, is
summary in nature.33 The trial court is mandated to issue a writ of possession upon
a finding of the lapse of the statutory period for redemption without the
redemptioner having redeemed the property. It cannot be validly argued that the
trial court abused its discretion when it merely complied with its ministerial duty to
issue the said writ of possession.34
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED DUE COURSE. The
assailed decision of the Court of Appeals in CA-G.R. SP No. 59157 is AFFIRMED.
Cost against the petitioners.
SO ORDERED.