Professional Documents
Culture Documents
Medical fees K P,!((.((1 @ost income K P='(.((1 Moral damages K P=,(((.((1 and
,ttorney/s fees K P),(((.((.
G.R. No. 31513 M$,#" 21, 1959
FLORENTINA A. GUILATCO, petitioner,
vs.
CIT< OF DAGUPAN, $!( t") HONORA-LE COURT OF APPEALS, respondents.
!o"an R. 6van$e"ista for petitioner.
=he #it1 Le$a" Officer for respondents.
SARMIENTO, J.:
#n a civil action 1 for recovery of da"a+es filed by the petitioner !lorentina $. Huilatco, the follo*in+ /ud+"ent *as rendered a+ainst the respondent
City of 8a+upanA
- - -
1) Orderin+ defendant City of 8a+upan to pay plaintiff actual da"a+es in the a"ount of P 1B,94' na"ely P5,0B'.00 as hospital, "edical
and other e-penses D9-hs. < to <.60E, P (,'40.00 as lost inco"e for one 1) year D9-h. !E and P 'B0.00 as bonus). P 1B0,000.00 as "oral
da"a+es, P B0,000.00 as e-e"plary da"a+es, and P ;,000.00 as attorney,s fees, and liti+ation e-penses, plus costs and to appropriate
throu+h its %an++unian+ Pan+lunsod City Council) said a"ounts for said purposeF
4) 8is"issin+ plaintiffs co"plaint as a+ainst defendant City 9n+r. $lfredo H. Tan+coF and
;) 8is"issin+ the counterclai"s of defendant City of 8a+upan and defendant City 9n+r. $lfredo H. Tan+co, for lack of "erit. 2
The facts found by the trial court are as follo*sA 8
#t *ould appear fro" the evidences that on 7uly 4B, 19(5, herein plaintiff, a Court #nterpreter of 2ranch ###, C!#..8a+upan City, *hile she
*as about to board a "otori0ed tricycle at a side*alk located at Pere0 2lvd. a ?ational &oad, under the control and supervision of the
City of 8a+upan) accidentally fell into a "anhole located on said side*alk, thereby causin+ her ri+ht le+ to be fractured. $s a result
thereof, she had to be hospitali0ed, operated on, confined, at first at the Pan+asinan Provincial <ospital, fro" 7uly 4B to $u+ust ;, 19(5
or for a period of 16 days). %he also incurred hospitali0ation, "edication and other e-penses to the tune of P 5,0B;.6B 9-h. < to <.60) or
a total of P 10,000.00 in all, as other receipts *ere either lost or "isplacedF durin+ the period of her confine"ent in said t*o hospitals,
plaintiff suffered severe or e-cruciatin+ pain not only on her ri+ht le+ *hich *as fractured but also on all parts of her bodyF the pain has
persisted even after her dischar+e fro" the >edical City Heneral <ospital on October 9, 19(5, to the present. 8espite her dischar+e fro"
the <ospital plaintiff is presently still *earin+ crutches and the Court has actually observed that she has difficulty in loco"otion. !ro" the
ti"e of the "ishap on 7uly 4B, 19(5 up to the present, plaintiff has not yet reported for duty as court interpreter, as she has difficulty of
loco"otion in +oin+ up the stairs of her office, located near the city hall in 8a+upan City. %he earns at least P (40.00 a "onth consistin+ of
her "onthly salary and other "eans of inco"e, but since 7uly 4B, 19(5 up to the present she has been deprived of said inco"e as she
has already consu"ed her accrued leaves in the +overn"ent service. %he has lost several pounds as a result of the accident and she is
no lon+er her for"er /ovial self, she has been unable to perfor" her reli+ious, social, and other activities *hich she used to do prior to the
incident.
8r. ?orberto !eli- and 8r. 8o"inado >an0ano of the Provincial <ospital, as *ell as 8r. $ntonio %ison of the >edical City Heneral <ospital
in >andaluyon+ &i0al 9-h. #F see also 9-hs. !, H, H.1 to H.19) have confir"ed beyond shado* of any doubt the e-tent of the fracture
and in/uries sustained by the plaintiff as a result of the "ishap. On the other hand, Patrol"an Claveria, 8e $sis and Cere0o corroborated
the testi"ony of the plaintiff re+ardin+ the "ishap and they have confir"ed the e-istence of the "anhole 9-hs. $, 2, C and sub.e-hibits)
on the side*alk alon+ Pere0 2lvd., at the ti"e of the incident on 7uly 4B, 19(5 *hich *as partially covered by a concrete flo*er pot by
leavin+ +apin+ hole about 4 ft. lon+ by 1 1N4 feet *ide or '4 c"s. *ide by (B c"s. lon+ by 1B0 c"s. deep see 9-hs. 8 and 8.1).
8efendant $lfredo Tan+co, City 9n+ineer of 8a+upan City and ad"ittedly e-.officio <i+h*ay 9n+ineer, City 9n+ineer of the Public 6orks
and 2uildin+ Official for 8a+upan City, ad"itted the e-istence of said "anhole alon+ the side*alk in Pere0 2lvd., ad"ittedly a ?ational
&oad in front of the 3u0on Colle+es. <e also ad"itted that said "anhole there are at least 11 in all in Pere0 2lvd.) is o*ned by the
?ational Hovern"ent and the side*alk on *hich they are found alon+ Pere0 2lvd. are also o*ned by the ?ational Hovern"ent. 2ut as
City 9n+ineer of 8a+upan City, he supervises the "aintenance of said "anholes or draina+e syste" and sees to it that they are properly
covered, and the /ob is specifically done by his subordinates, >r. %antia+o de Gera >aintenance !ore"an) and 9n+r. 9rnesto %oler"o
also a "aintenance 9n+ineer. #n his ans*er defendant Tan+co e-pressly ad"itted in par. (.1 thereof, that in his capacity as e-.officio
<i+h*ay 9n+ineer for 8a+upan City he e-ercises supervision and control over ?ational roads, includin+ the Pere0 2lvd. *here the
incident happened.
On appeal by the respondent City of 8a+upan, the appellate court 9 reversed the lo*er court findin+s on the +round that no evidence *as presented by the
plaintiff. appellee to prove that the City of 8a+upan had Ccontrol or supervisionC over Pere0 2oulevard. 5
The city contends that Pere0 2oulevard, *here the fatal draina+e hole is located, is a national road that is not under the control or supervision of the City of
8a+upan. <ence, no liability should attach to the city. #t sub"its that it is actually the >inistry of Public <i+h*ays that has control or supervision throu+h the
<i+h*ay 9n+ineer *hich, by "ere coincidence, is held concurrently by the sa"e person *ho is also the City 9n+ineer of 8a+upan.
$fter e-a"ination of the findin+s and conclusions of the trial court and those of the appellate court, as *ell as the ar+u"ents presented by the parties, *e a+ree
*ith those of the trial court and of the petitioner. <ence, *e +rant the petition.
#n this revie* on certiorari, *e have si"plified the errors assi+ned by the petitioner to a sin+le issueA *hether or not control or supervision over a national road by
the City of 8a+upan e-ists, in effect bindin+ the city to ans*er for da"a+es in accordance *ith article 4159 of the Civil Code.
The liability of public corporations for da"a+es arisin+ fro" in/uries suffered by pedestrians fro" the defective condition of roads is e-pressed in the Civil Code
as follo*sA
$rticle 4159. Provinces, cities and "unicipalities shall be liable for da"a+es for the death of, or in/uries suffered by, any person by reason
of the defective condition of roads, streets, brid+es, public buildin+s, and other public *orks under their control or supervision.
#t is not even necessary for the defective road or street to belon+ to the province, city or "unicipality for liability to attach. The article only re=uires that either
control or supervision is e-ercised over the defective road or street. 3
#n the case at bar, this control or supervision is provided for in the charter of 8a+upan and is e-ercised throu+h the City 9n+ineer *ho has the follo*in+ dutiesA
%ec. 44. The City 9n+ineer..<is po*ers, duties and co"pensation.There shall be a city en+ineer, *ho shall be in char+e of the
depart"ent of 9n+ineerin+ and Public 6orks. <e shall receive a salary of not e-ceedin+ three thousand pesos per annu". <e shall have
the follo*in+ dutiesA
- - -
/) <e shall have the care and custody of the public syste" of *ater*orks and se*ers, and all sources of *ater supply, and shall control,
"aintain and re+ulate the use of the sa"e, in accordance *ith the ordinance relatin+ theretoF shall inspect and re+ulate the use of all
private syste"s for supplyin+ *ater to the city and its inhabitants, and all private se*ers, and their connection *ith the public se*er
syste".
- - -
The sa"e charter of 8a+upan also provides that the layin+ out, construction and i"prove"ent of streets, avenues and alleys and side*alks, and re+ulation of
the use thereof, "ay be le+islated by the >unicipal 2oard . 7 Thus the charter clearly indicates that the city indeed has supervision and control over the side*alk
*here the open draina+e hole is located.
The e-press provision in the charter holdin+ the city not liable for da"a+es or in/uries sustained by persons or property due to the failure of any city officer to
enforce the provisions of the charter, can not be used to e-e"pt the city, as in the case at bar.5
The charter only lays do*n $enera" ru"es re+ulatin+ the liability of the city. On the other hand article 4159 applies in particu"ar to the liability arisin+ fro"
Cdefective streets, public buildin+s and other public *orks.C 9
The City 9n+ineer, >r. $lfredo H. Tan+co, ad"its that he e-ercises control or supervision over the said road. 2ut the city can not be e-cused fro" liability by the
ar+u"ent that the duty of the City 9n+ineer to supervise or control the said provincial road belon+s "ore to his functions as an e-.officio <i+h*ay 9n+ineer of the
>inistry of Public <i+h*ay than as a city officer. This is because *hile he is entitled to an honorariu" fro" the >inistry of Public <i+h*ays, his salary fro" the
city +overn"ent substantially e-ceeds the honorariu".
6e do not a+ree.
$lfredo H. Tan+co Ci)n his official capacity as City 9n+ineer of 8a+upan, as 9-. Officio <i+h*ay 9n+ineer, as 9-.Officio City 9n+ineer of the 2ureau of Public
6orks, and, last but not the least, as 2uildin+ Official for 8a+upan City, receives the follo*in+ "onthly co"pensationA P 1,510.66 fro" 8a+upan CityF P 400.00
fro" the >inistry of Public <i+h*aysF P 100.00 fro" the 2ureau of Public 6orks and P B00.00 by virtue of P.8. 1096, respectively.C 14 This function of
supervision over streets, public buildin+s, and other public *orks pertainin+ to the City 9n+ineer is coursed throu+h a >aintenance !ore"an and a >aintenance
9n+ineer.11 $lthou+h these last t*o officials are e"ployees of the ?ational Hovern"ent, they are detailed *ith the City of 8a+upan and hence receive instruction
and supervision fro" the city throu+h the City 9n+ineer.
There is, therefore, no doubt that the City 9n+ineer e-ercises control or supervision over the public *orks in =uestion. <ence, the liability of the city to the
petitioner under article 4195 of the Civil Code is clear.
2e all that as it "ay, the actual da"a+es a*arded to the petitioner in the a"ount of P 10,000.00 should be reduced to the proven e-penses of P 5,0B;.6B only.
The trial court should not have rounded off the a"ount. #n deter"inin+ actual da"a+es, the court can not rely on Cspeculation, con/ecture or +uess *orkC as to
the a"ount. 6ithout the actual proof of loss, the a*ard of actual da"a+es beco"es erroneous. 12
On the other hand, "oral da"a+es "ay be a*arded even *ithout proof of pecuniary loss, inas"uch as the deter"ination of the a"ount is discretionary on the
court.18 Thou+h incapable of pecuniary esti"ation, "oral da"a+es are in the nature of an a*ard to co"pensate the clai"ant for actual in/ury suffered but *hich
for so"e reason can not be proven. <o*ever, in a*ardin+ "oral da"a+es, the follo*in+ should be taken into considerationA
1) !irst, the pro-i"ate cause of the in/ury "ust be the clai"ee,s acts.19
4) %econd, there "ust be co"pensatory or actual da"a+es as satisfactory proof of the factual basis for da"a+es.15
;) Third, the a*ard of "oral da"a+es "ust be predicated on any of the cases enu"erated in the Civil Code. 13
#n the case at bar, the physical sufferin+ and "ental an+uish suffered by the petitioner *ere proven. 6itnesses fro" the petitioner,s place of *ork testified to the
de+eneration in her disposition.fro" bein+ /ovial to depressed. %he refrained fro" attendin+ social and civic activities.17
?evertheless the a*ard of "oral da"a+es at P 1B0,000.00 is e-cessive. <er handicap *as not per"anent and disabled her only durin+ her treat"ent *hich
lasted for one year. Thou+h evidence of "oral loss and an+uish e-isted to *arrant the a*ard of da"a+es, 15 the "oderatin+ hand of the la* is called for. The
Court has ti"e and a+ain called attention to the reprehensible propensity of trial /ud+es to a*ard da"a+es *ithout basis,19 resultin+ in e-horbitant a"ounts.24
$lthou+h the assess"ent of the a"ount is better left to the discretion of the trial court 21 under precedin+ /urisprudence, the a"ount of "oral da"a+es should be
reduced to P 40,000.00.
$s for the a*ard of e-e"plary da"a+es, the trial court correctly pointed out the basisA
To serve as an e-a"ple for the public +ood, it is hi+h ti"e that the Court, throu+h this case, should serve *arnin+ to the city or cities
concerned to be "ore conscious of their duty and responsibility to their constituents, especially *hen they are en+a+ed in construction
*ork or *hen there are "anholes on their side*alks or streets *hich are uncovered, to i""ediately cover the sa"e, in order to "ini"i0e
or prevent accidents to the poor pedestrians.22
Too often in the 0eal to put up Cpublic i"pactC pro/ects such as beautification drives, the end is "ore i"portant than the "anner in *hich the *ork is carried out.
2ecause of this obsession for sho*in+ off, such trivial details as "isplaced flo*er pots betray the careless e-ecution of the pro/ects, causin+ public
inconvenience and invitin+ accidents.
Pendin+ appeal by the respondent City of 8a+upan fro" the trial court to the appellate court, the petitioner *as able to secure an order for +arnish"ent of the
funds of the City deposited *ith the Philippine ?ational 2ank, fro" the then presidin+ /ud+e, <on. 6illel"o !ortun. This order for +arnish"ent *as revoked
subse=uently by the succeedin+ presidin+ /ud+e, <on. &o"eo 8. >a+at, and beca"e the basis for the petitioner,s "otion for reconsideration *hich *as also
denied. 28
6e rule that the e-ecution of the /ud+"ent of the trial court pendin+ appeal *as pre"ature. 6e do not find any +ood reason to /ustify the issuance of an order of
e-ecution even before the e-piration of the ti"e to appeal .29
6<9&9!O&9, the petition is H&$?T98. The assailed decision and resolution of the respondent Court of $ppeals are hereby &9G9&%98 and %9T $%#89 and
the decision of the trial court, dated >arch 14, 19(9 and a"ended on >arch 1;, 19(9, is hereby &9#?%T$T98 *ith the indicated "odifications as re+ards the
a"ounts a*ardedA
1) Orderin+ the defendant City of 8a+upan to pay the plaintiff actual da"a+es in the a"ount of P 1B,94' na"ely P 5,0B'.00 as hospital,
"edical and other e-pensesF P (,'40.00 as lost inco"e for one 1) year and P 'B0.00 as bonus)F P 40,000.00 as "oral da"a+es and P
10,000.00 as e-e"plary da"a+es.
The attorney,s fees of P ;,000.00 re"ain the sa"e.
%O O&89&98.
Me"encio:;errera, (#haiperson), %aras, %adi""a and Re$a"ado, --., concur.
G.R. No. L:97551 O#to6), 8, 1953
'UAN F. NA1PIL B SONS, $!( 'UAN F. NA1PIL, petitioners,
vs.
THE COURT OF APPEALS, UNITED CONSTRUCTION COMPAN<, INC., 'UAN '. CARLOS, $!( t") PHILIPPINE -AR ASSOCIATION, respondents.
G.R. No. L:97538 O#to6), 8, 1953
THE UNITED CONSTRUCTION CO., INC., %)tto!),,
=s.
COURT OF APPEALS, ET AL., ,)s%o!()!ts.
G.R. No. L:97593 O#to6), 8, 1953
PHILIPPINE -AR ASSOCIATION, ET AL., %)tto!),s,
=s.
COURT OF APPEALS, ET AL., ,)s%o!()!ts.
PARAS, J.:
T")s) $,) %)tto!s *o, ,)=)? o! #),to,$, o* t") No=);6), 25, 1977 ()#so! o* t") Cou,t o* A%%)$+s ! CA:G.R. No. 51771:R ;o(*&!g t") ()#so!
o* t") Cou,t o* F,st I!st$!#) o* M$!+$, -,$!#" /, ! C=+ C$s) No. 79955 ($t)( S)%t);6), 21, 1971 $s ;o(*)( 6& t") O,(), o* t") +o?), #ou,t ($t)(
D)#);6), 5, 1971. T") Cou,t o* A%%)$+s ! ;o(*&!g t") ()#so! o* t") +o?), #ou,t !#+u()( $! $?$,( o* $! $((to!$+ $;ou!t o* P244,444.44 to t")
P"+%%!) -$, Asso#$to! to 6) %$( 7o!t+& $!( s)=),$++& 6& t") ()*)!($!t U!t)( Co!st,u#to! Co. $!( 6& t") t",(:%$,t& ()*)!($!ts 'u$! F. N$C%+
$!( So!s $!( 'u$! F. N$C%+.
T") (s%ost=) %o,to! o* t") ;o(*)( ()#so! o* t") +o?), #ou,t ,)$(sA
>HEREFORE, 7u(g;)!t s "),)6& ,)!(),)(A
D$E O,(),!g ()*)!($!t U!t)( Co!st,u#to! Co., I!#. $!( t",(:%$,t& ()*)!($!ts D)0#)%t Ro;$! OF$)t$E to %$& t") %+$!t**,
7o!t+& $!( s)=),$++&, t") su; o* P959,885.35 ?t" !t),)st $t t") +)g$+ ,$t) *,o; No=);6), 29, 1935, t") ($t) o* t") *+!g o* t")
#o;%+$!t u!t+ *u++ %$&;)!tG
D6E Ds;ss!g t") #o;%+$!t ?t" ,)s%)#t to ()*)!($!t 'u$! '. C$,+osG
D#E Ds;ss!g t") t",(:%$,t& #o;%+$!tG
D(E Ds;ss!g t") ()*)!($!tHs $!( t",(:%$,t& ()*)!($!tsH #ou!t),#+$;s *o, +$#C o* ;),tG
D)E O,(),!g ()*)!($!t U!t)( Co!st,u#to! Co., I!#. $!( t",(:%$,t& ()*)!($!ts D)0#)%t Ro;$! OF$)t$E to %$& t") #osts ! )Iu$+
s"$,)s.
SO ORDERED. DR)#o,( o! A%%)$+ %. 521G Ro++o, L: 97551, %. 139E.
T") (s%ost=) %o,to! o* t") ()#so! o* t") Cou,t o* A%%)$+s ,)$(sA
>HEREFORE, t") 7u(g;)!t $%%)$+)( *,o; s ;o(*)( to !#+u() $! $?$,( o* P244,444.44 ! *$=o, o* %+$!t**:$%%)++$!t
P"+%%!) -$, Asso#$to!, ?t" !t),)st $t t") +)g$+ ,$t) *,o; No=);6), 29, 1935 u!t+ *u++ %$&;)!t to 6) %$( 7o!t+& $!(
s)=),$++& 6& ()*)!($!t U!t)( Co!st,u#to! Co., I!#. $!( t",( %$,t& ()*)!($!ts D)0#)%t Ro;$! OF$)t$E. I! $++ ot"), ,)s%)#ts, t")
7u(g;)!t ($t)( S)%t);6), 21, 1971 $s ;o(*)( ! t") D)#);6), 5, 1971 O,(), o* t") +o?), #ou,t s "),)6& $**,;)( ?t" COSTS
to 6) %$( 6& t") ()*)!($!t $!( t",( %$,t& ()*)!($!t D)0#)%t Ro;$! OF$)t$E ! )Iu$+ s"$,)s.
SO ORDERED.
P)tto!),s 'u$! F. N$C%+ B So!s ! L:97551 $!( U!t)( Co!st,u#to! Co., I!#. $!( 'u$! '. C$,+os ! L:97538 s))C t") ,)=),s$+ o* t") ()#so! o* t")
Cou,t o* A%%)$+s, $;o!g ot"), t"!gs, *o, )0o!),$to! *,o; +$6+t& ?"+) %)tto!), P"+%%!) -$, Asso#$to! ! L:97593 s))Cs t") ;o(*#$to! o*
$*o,)s$( ()#so! to o6t$! $! $?$,( o* P1,584,444.44 *o, t") +oss o* t") P-A 6u+(!g %+us *ou, D9E t;)s su#" $;ou!t $s ($;$g)s ,)su+t!g !
!#,)$s)( #ost o* t") 6u+(!g, P144,444.44 $s )0);%+$,& ($;$g)sG $!( P144,444.44 $s $tto,!)&Hs *))s.
T")s) %)tto!s $,s!g *,o; t") s$;) #$s) *+)( ! t") Cou,t o* F,st I!st$!#) o* M$!+$ ?),) #o!so+($t)( 6& t"s Cou,t ! t") ,)so+uto! o* M$& 14,
1975 ,)Iu,!g t") ,)s%)#t=) ,)s%o!()!ts to #o;;)!t. DRo++o, L:97551, %. 172E.
T") *$#ts $s *ou!( 6& t") +o?), #ou,t DD)#so!, C.C. No. 79955G R)#o,( o! A%%)$+, %%. 239:895G %%. 524:521G Ro++o, L:97551, %. 139E $!( $**,;)( 6&
t") Cou,t o* A%%)$+s $,) $s *o++o?sA
T") %+$!t**, P"+%%!) -$, Asso#$to!, $ #=#:!o!:%,o*t $sso#$to!, !#o,%o,$t)( u!(), t") Co,%o,$to! L$?, ()#()( to #o!st,u#t $! o**#)
6u+(!g o! ts 594 sIu$,) ;)t),s +ot +o#$t)( $t t") #o;), o* A(u$!$ $!( A,Fo6s%o St,))ts, I!t,$;u,os, M$!+$. T") #o!st,u#to! ?$s u!(),t$C)! 6&
t") U!t)( Co!st,u#to!, I!#. o! $! J$(;!st,$to!J 6$ss, o! t") sugg)sto! o* 'u$! '. C$,+os, t") %,)s()!t $!( g)!),$+ ;$!$g), o* s$(
#o,%o,$to!. T") %,o%os$+ ?$s $%%,o=)( 6& %+$!t**Hs 6o$,( o* (,)#to,s $!( sg!)( 6& ts %,)s()!t Ro;$! OF$)t$, $ t",(:%$,t& ()*)!($!t ! t"s
#$s). T") %+$!s $!( s%)#*#$to!s *o, t") 6u+(!g ?),) %,)%$,)( 6& t") ot"), t",(:%$,t& ()*)!($!ts 'u$! F. N$C%+ B So!s. T") 6u+(!g ?$s
#o;%+)t)( ! 'u!), 1933.
I! t") )$,+& ;o,!!g o* August 2, 1935 $! u!usu$++& st,o!g )$,t"Iu$C) "t M$!+$ $!( ts )!=,o!s $!( t") 6u+(!g ! Iu)sto! sust$!)( ;$7o,
($;$g). T") *,o!t #o+u;!s o* t") 6u+(!g 6u#C+)(, #$us!g t") 6u+(!g to t+t *o,?$,( ($!g),ous+&. T") t)!$!ts =$#$t)( t") 6u+(!g ! =)? o* ts
%,)#$,ous #o!(to!. As $ t);%o,$,& ,);)($+ ;)$su,), t") 6u+(!g ?$s s"o,)( u% 6& U!t)( Co!st,u#to!, I!#. $t t") #ost o* P18,331.25.
O! No=);6), 29, 1935, t") %+$!t** #o;;)!#)( t"s $#to! *o, t") ,)#o=),& o* ($;$g)s $,s!g *,o; t") %$,t$+ #o++$%s) o* t") 6u+(!g $g$!st
U!t)( Co!st,u#to!, I!#. $!( ts P,)s()!t $!( G)!),$+ M$!$g), 'u$! '. C$,+os $s ()*)!($!ts. P+$!t** $++)g)s t"$t t") #o++$%s) o* t") 6u+(!g ?$s
$##us)( 6& ()*)#ts ! t") #o!st,u#to!, t") *$+u,) o* t") #o!t,$#to,s to *o++o? %+$!s $!( s%)#*#$to!s $!( =o+$to!s 6& t") ()*)!($!ts o* t") t),;s
o* t") #o!t,$#t.
D)*)!($!ts ! tu,! *+)( $ t",(:%$,t& #o;%+$!t $g$!st t") $,#"t)#ts ?"o %,)%$,)( t") %+$!s $!( s%)#*#$to!s, $++)g!g ! )ss)!#) t"$t t") #o++$%s)
o* t") 6u+(!g ?$s (u) to t") ()*)#ts ! t") s$( %+$!s $!( s%)#*#$to!s. Ro;$! OF$)t$, t") t")! %,)s()!t o* t") %+$!t** -$, Asso#$to! ?$s
!#+u()( $s $ t",(:%$,t& ()*)!($!t *o, ($;$g)s *o, "$=!g !#+u()( 'u$! '. C$,+os, P,)s()!t o* t") U!t)( Co!st,u#to! Co., I!#. $s %$,t& ()*)!($!t.
O! M$,#" 8, 1939, t") %+$!t** $!( t",(:%$,t& ()*)!($!ts 'u$! F. N$C%+ B So!s $!( 'u$! F. N$C%+ %,)s)!t)( $ ?,tt)! st%u+$to! ?"#" ,)$(sA
1. T"$t ! ,)+$to! to ()*)!($!tsH $!s?), ?t" #ou!t),#+$;s $!( t",(: %$,t& #o;%+$!ts $!( t") t",(:%$,t& ()*)!($!ts N$C%+ B
So!sH $!s?), t"),)to, t") %+$!t** !))( !ot $;)!( ts #o;%+$!t 6& !#+u(!g t") s$( 'u$! F. N$C%+ B So!s $!( 'u$! F. N$C%+
%),so!$++& $s %$,t)s ()*)!($!t.
2. T"$t ! t") )=)!t Du!)0%)#t)( 6& t") u!(),sg!)(E t"$t t") Cou,t s"ou+( *!( $*t), t") t,$+ t"$t t") $6o=):!$;)( ()*)!($!ts
'u$! '. C$,+os $!( U!t)( Co!st,u#to! Co., I!#. $,) *,)) *,o; $!& 6+$;) $!( +$6+t& *o, t") #o++$%s) o* t") P-A -u+(!g, $!(
s"ou+( *u,t"), *!( t"$t t") #o++$%s) o* s$( 6u+(!g ?$s (u) to ()*)#ts $!(Ko, !$()Iu$#& o* t") %+$!s, ()sg!s, $!(
s%)#*#$to!s % 6& t") t",(:%$,t& ()*)!($!ts, o, ! t") )=)!t t"$t t") Cou,t ;$& *!( 'u$! F. N$C%+ $!( So!s $!(Ko, 'u$! F.
N$C%+ #o!t,6uto,+& !)g+g)!t o, ! $!& ?$& 7o!t+& $!( so+($,+& +$6+) ?t" t") ()*)!($!ts, 7u(g;)!t ;$& 6) ,)!(),)( ! ?"o+)
o, ! %$,t. $s t") #$s) ;$& 6), $g$!st 'u$! F. N$C%+ B So!s $!(Ko, 'u$! F. N$C%+ ! *$=o, o* t") %+$!t** to $++ !t)!ts $!(
%u,%os)s $s * %+$!t**Hs #o;%+$!t "$s 6))! (u+& $;)!()( 6& !#+u(!g t") s$( 'u$! F. N$C%+ B So!s $!( 'u$! F. N$C%+ $s
%$,t)s ()*)!($!t $!( 6& $++)g!g #$us)s o* $#to! $g$!st t"); !#+u(!g, $;o!g ot"),s, t") ()*)#ts o, !$()Iu$#& o* t")
%+$!s, ()sg!s, $!( s%)#*#$to!s %,)%$,)( 6& t"); $!(Ko, *$+u,) ! t") %),*o,;$!#) o* t"), #o!t,$#t ?t" %+$!t**.
8. -ot" %$,t)s "),)6& 7o!t+& %)tto! t"s Ho!o,$6+) Cou,t to $%%,o=) t"s st%u+$to!. DR)#o,( o! A%%)$+, %%. 279:275G Ro++o, L:
97551,%.139E.
U%o! t") ssu)s 6)!g 7o!)(, $ %,):t,$+ ?$s #o!(u#t)( o! M$,#" 7, 1939, (u,!g ?"#" $;o!g ot"),s, t") %$,t)s $g,))( to ,)*), t") t)#"!#$+ ssu)s
!=o+=)( ! t") #$s) to $ Co;;sso!),. M,. A!(,)s O. HFo!, ?"o ?$s u+t;$t)+& $%%o!t)( 6& t") t,$+ #ou,t, $ssu;)( "s o**#) $s Co;;sso!),,
#"$,g)( ?t" t") (ut& to t,& t") *o++o?!g ssu)sA
1. >")t"), t") ($;$g) sust$!)( 6& t") P-A 6u+(!g (u,!g t") August 2, 1935 )$,t"Iu$C) "$( 6))! #$us)(, (,)#t+& o,
!(,)#t+&, 6&A
D$E T") !$()Iu$#)s o, ()*)#ts ! t") %+$!s $!( s%)#*#$to!s %,)%$,)( 6& t",(:%$,t& ()*)!($!tsG
D6E T") ()=$to!s, * $!&, ;$() 6& t") ()*)!($!ts *,o; s$( %+$!s $!( s%)#*#$to!s $!( "o? s$( ()=$to!s #o!t,6ut)( to t")
($;$g) sust$!)(G
D#E T") $++)g)( *$+u,) o* ()*)!($!ts to o6s),=) t") ,)Iust) Iu$+t& o* ;$t),$+s $!( ?o,C;$!s"% ! t") #o!st,u#to! o* t")
6u+(!gG
D(E T") $++)g)( *$+u,) to )0),#s) t") ,)Iust) ()g,)) o* su%),=so! )0%)#t)( o* t") $,#"t)#t, t") #o!t,$#to, $!(Ko, t") o?!),
o* t") 6u+(!gG
D)E A! $#t o* Go( o, $ *o,tutous )=)!tG $!(
D*E A!& ot"), #$us) !ot "),)! $6o=) s%)#*)(.
2. I* t") #$us) o* t") ($;$g) su**),)( 6& t") 6u+(!g $,os) *,o; $ #o;6!$to! o* t") $6o=):)!u;),$t)( *$#to,s, t") ()g,)) o,
%,o%o,to! ! ?"#" )$#" !(=(u$+ *$#to, #o!t,6ut)( to t") ($;$g) sust$!)(G
8. >")t"), t") 6u+(!g s !o? $ tot$+ +oss $!( s"ou+( 6) #o;%+)t)+& ();o+s")( o, ?")t"), t ;$& st++ 6) ,)%$,)( $!( ,)sto,)(
to $ t)!$!t$6+) #o!(to!. I! t") +$tt), #$s), t") ()t),;!$to! o* t") #ost o* su#" ,)sto,$to! o, ,)%$,, $!( t") =$+u) o* $!&
,);$!!g #o!st,u#to!, su#" $s t") *ou!($to!, ?"#" ;$& st++ 6) ut+F)( o, $=$+)( o* DR)#o,( o! A%%)$+, %%. 275:273G Ro++o,
L:97551, %. 139E.
T"us, t") ssu)s o* t"s #$s) ?),) (=()( !to t)#"!#$+ ssu)s $!( !o!:t)#"!#$+ ssu)s. As $*o,)st$t)( t") t)#"!#$+ ssu)s ?),) ,)*),,)( to t")
Co;;sso!),. T") !o!:t)#"!#$+ ssu)s ?),) t,)( 6& t") Cou,t.
M)$!?"+), %+$!t** ;o=)( t?#) *o, t") ();o+to! o* t") 6u+(!g o! t") g,ou!( t"$t t ;$& to%%+) (o?! ! #$s) o* $ st,o!g )$,t"Iu$C). T") ;oto!s
?),) o%%os)( 6& t") ()*)!($!ts $!( t") ;$tt), ?$s ,)*),,)( to t") Co;;sso!),. F!$++&, o! A%,+ 84, 1979 t") 6u+(!g ?$s $ut"o,F)( to 6)
();o+s")( $t t") )0%)!s) o* t") %+$!t**, 6ut !ot $!ot"), )$,t"Iu$C) o* "g" !t)!st& o! A%,+ 7, 1974 *o++o?)( 6& ot"), st,o!g )$,t"Iu$C)s o! A%,+
9, $!( 12, 1974, #$us)( *u,t"), ($;$g) to t") %,o%),t&. T") $#tu$+ ();o+to! ?$s u!(),t$C)! 6& t") 6u&), o* t") ($;$g)( 6u+(!g. DR)#o,( o!
A%%)$+, %%. 275:254G Ibid.E
A*t), t") %,ot,$#t)( ")$,!gs, t") Co;;sso!), )=)!tu$++& su6;tt)( "s ,)%o,t o! S)%t);6), 25, 1974 ?t" t") *!(!gs t"$t ?"+) t") ($;$g)
sust$!)( 6& t") P-A 6u+(!g ?$s #$us)( (,)#t+& 6& t") August 2, 1935 )$,t"Iu$C) ?"os) ;$g!tu() ?$s )st;$t)( $t 7.8 t")& ?),) $+so #$us)(
6& t") ()*)#ts ! t") %+$!s $!( s%)#*#$to!s %,)%$,)( 6& t") t",(:%$,t& ()*)!($!tsH $,#"t)#ts, ()=$to!s *,o; s$( %+$!s $!( s%)#*#$to!s 6& t")
()*)!($!t #o!t,$#to,s $!( *$+u,) o* t") +$tt), to o6s),=) t") ,)Iust) ?o,C;$!s"% ! t") #o!st,u#to! o* t") 6u+(!g $!( o* t") #o!t,$#to,s,
$,#"t)#ts $!( )=)! t") o?!),s to )0),#s) t") ,)Iust) ()g,)) o* su%),=so! ! t") #o!st,u#to! o* su67)#t 6u+(!g.
A++ t") %$,t)s ,)gst),)( t"), o67)#to!s to $*o,)s$( *!(!gs ?"#" ! tu,! ?),) $!s?),)( 6& t") Co;;sso!),.
T") t,$+ #ou,t $g,))( ?t" t") *!(!gs o* t") Co;;sso!), )0#)%t $s to t") "o+(!g t"$t t") o?!), s #"$,g)( ?t" *u++ !!) su%),=so! o* t")
#o!st,u#to!. T") Cou,t s))s !o +)g$+ o, #o!t,$#tu$+ 6$ss *o, su#" #o!#+uso!. DR)#o,( o! A%%)$+, %%. 849:825G I6(E.
T"us, o! S)%t);6), 21, 1971, t") +o?), #ou,t ,)!(),)( t") $ss$+)( ()#so! ?"#" ?$s ;o(*)( 6& t") I!t),;)($t) A%%)++$t) Cou,t o! No=);6),
25, 1977.
A++ t") %$,t)s "),)! $%%)$+)( *,o; t") ()#so! o* t") I!t),;)($t) A%%)++$t) Cou,t. H)!#), t")s) %)tto!s.
O! M$& 11, 1975, t") U!t)( A,#"t)#ts o* t") P"+%%!)s, t") Asso#$to! o* C=+ E!g!)),s, $!( t") P"+%%!) I!sttut) o* A,#"t)#ts *+)( ?t" t")
Cou,t $ ;oto! to !t),=)!) $s amicus curiae. T")& %,o%os)( to %,)s)!t $ %osto! %$%), o! t") +$6+t& o* $,#"t)#ts ?")! $ 6u+(!g #o++$%s)s $!(
to su6;t +C)?s) $ #,t#$+ $!$+&ss ?t" #o;%ut$to!s o! t") (=),g)!t =)?s o! t") ()sg! $!( %+$!s $s su6;tt)( 6& t") )0%),ts %,o#u,)( 6& t")
%$,t)s. T") ;oto! "$=!g 6))! g,$!t)(, t") amicus curiae ?),) g,$!t)( $ %),o( o* 34 ($&s ?t"! ?"#" to su6;t t"), %osto!.
A*t), t") %$,t)s "$( $++ *+)( t"), #o;;)!ts, >) g$=) (u) #ou,s) to t") %)tto!s ! Ou, R)so+uto! o* 'u+& 21, 1975.
T") %osto! %$%),s o* t") amicus curiae Dsu6;tt)( o! No=);6), 29, 1975E ?),) (u+& !ot)(.
T") amicus curiae g$=) t") o%!o! t"$t t") %+$!s $!( s%)#*#$to!s o* t") N$C%+s ?),) !ot ()*)#t=). -ut t") Co;;sso!),, ?")! $sC)( 6& Us to
#o;;)!t, ,)t),$t)( "s #o!#+uso! t"$t t") ()*)#ts ! t") %+$!s $!( s%)#*#$to!s !())( )0st)(.
Us!g t") s$;) $ut"o,t)s $=$+)( o* 6& t") amicus curiae su#" $s t") M$!+$ Co() DO,(. No. 9181E $!( t") 1933 As)% Co(), t") Co;;sso!),
$(()( t"$t )=)! * t #$! 6) %,o=)( t"$t t") ()*)#ts ! t") construction $+o!) D$!( !ot ! t") %+$!s $!( ()sg!E #$us)( t") ($;$g) to t") 6u+(!g, st++
t") ()*#)!#& ! t") o,g!$+ ()sg! $!( 7$#C o* s%)#*# %,o=so!s $g$!st to,so! ! t") o,g!$+ %+$!s $!( t") o=),+o$( o! t") g,ou!( *+oo, #o+u;!s
D*ou!( 6& $! t") )0%),ts !#+u(!g t") o,g!$+ ()sg!),E #),t$!+& #o!t,6ut)( to t") ($;$g) ?"#" o##u,,)(. DIbid, %. 179E.
I! t"), ,)s%)#t=) 6,)*s %)tto!),s, $;o!g ot"),s, ,$s)( t") *o++o?!g $ssg!;)!ts o* ),,o,sA P"+%%!) -$, Asso#$to! #+$;)( t"$t t") ;)$su,)
o* ($;$g)s s"ou+( !ot 6) +;t)( to P1,144,444.44 $s )st;$t)( #ost o* ,)%$,s o, to t") %),o( o* s0 D3E ;o!t"s *o, +oss o* ,)!t$+s ?"+) U!t)(
Co!st,u#to! Co., I!#. $!( t") N$C%+s #+$;)( t"$t t ?$s $! $#t o* Go( t"$t #$us)( t") *$+u,) o* t") 6u+(!g ?"#" s"ou+( )0);%t t"); *,o;
,)s%o!s6+t& $!( !ot t") ()*)#t=) #o!st,u#to!, %oo, ?o,C;$!s"%, ()=$to!s *,o; %+$!s $!( s%)#*#$to!s $!( ot"), ;%),*)#to!s ! t") #$s) o*
U!t)( Co!st,u#to! Co., I!#. o, t") ()*#)!#)s ! t") ()sg!, %+$!s $!( s%)#*#$to!s %,)%$,)( 6& %)tto!),s ! t") #$s) o* t") N$C%+s. -ot" UCCI
$!( t") N$C%+s o67)#t to t") %$&;)!t o* t") $((to!$+ $;ou!t o* P244,444.44 ;%os)( 6& t") Cou,t o* A%%)$+s. UCCI $+so #+$;)( t"$t t s"ou+( 6)
,);6u,s)( t") )0%)!s)s o* s"o,!g t") 6u+(!g ! t") $;ou!t o* P18,331.25 ?"+) t") N$C%+s o%%os)( t") %$&;)!t o* ($;$g)s 7o!t+& $!(
so+($,t& ?t" UCCI.
T") %=ot$+ ssu) ! t"s #$s) s ?")t"), o, !ot $! $#t o* Go(:$! u!usu$++& st,o!g )$,t"Iu$C):?"#" #$us)( t") *$+u,) o* t") 6u+(!g, )0);%ts *,o;
+$6+t&, %$,t)s ?"o $,) ot"),?s) +$6+) 6)#$us) o* t"), !)g+g)!#).
T") $%%+#$6+) +$? go=),!!g t") ,g"ts $!( +$6+t)s o* t") %$,t)s "),)! s A,t#+) 1728 o* t") N)? C=+ Co(), ?"#" %,o=()sA
A,t. 1728. T") )!g!)), o, $,#"t)#t ?"o (,)? u% t") %+$!s $!( s%)#*#$to!s *o, $ 6u+(!g s +$6+) *o, ($;$g)s * ?t"! **t))!
&)$,s *,o; t") #o;%+)to! o* t") st,u#tu,) t") s$;) s"ou+( #o++$%s) 6& ,)$so! o* $ ()*)#t ! t"os) %+$!s $!( s%)#*#$to!s, o,
(u) to t") ()*)#ts ! t") g,ou!(. T") #o!t,$#to, s +C)?s) ,)s%o!s6+) *o, t") ($;$g) * t") )(*#) *$gs ?t"! t") s$;) %),o(
o! $##ou!t o* ()*)#ts ! t") #o!st,u#to! o, t") us) o* ;$t),$+s o* !*),o, Iu$+t& *u,!s")( 6& ";, o, (u) to $!& =o+$to! o*
t") t),;s o* t") #o!t,$#t. I* t") )!g!)), o, $,#"t)#t su%),=s)s t") #o!st,u#to!, ") s"$++ 6) so+($,+& +$6+) ?t" t")
#o!t,$#to,.
A##)%t$!#) o* t") 6u+(!g, $*t), #o;%+)to!, (o)s !ot ;%+& ?$=), o* $!& o* t") #$us)s o* $#to! 6& ,)$so! o* $!& ()*)#t
;)!to!)( ! t") %,)#)(!g %$,$g,$%".
T") $#to! ;ust 6) 6,oug"t ?t"! t)! &)$,s *o++o?!g t") #o++$%s) o* t") 6u+(!g.
O! t") ot"), "$!(, t") g)!),$+ ,u+) s t"$t !o %),so! s"$++ 6) ,)s%o!s6+) *o, )=)!ts ?"#" #ou+( !ot 6) *o,)s))! o, ?"#" t"oug" *o,)s))!, ?),)
!)=t$6+) DA,t#+) 1179, N)? C=+ Co()E.
A! $#t o* Go( "$s 6))! ()*!)( $s $! $##()!t, (u) (,)#t+& $!( )0#+us=)+& to !$tu,$+ #$us)s ?t"out "u;$! !t),=)!to!, ?"#" 6& !o $;ou!t o*
*o,)sg"t, %$!s o, #$,), ,)$so!$6+& to "$=) 6))! )0%)#t)(, #ou+( "$=) 6))! %,)=)!t)(. D1 Co,%us 'u,s 1179E.
T"),) s !o (s%ut) t"$t t") )$,t"Iu$C) o* August 2, 1935 s $ *o,tutous )=)!t o, $! $#t o* Go(.
To )0);%t t") o6+go, *,o; +$6+t& u!(), A,t#+) 1179 o* t") C=+ Co(), *o, $ 6,)$#" o* $! o6+g$to! (u) to $! J$#t o* Go(,J t") *o++o?!g ;ust
#o!#u,A D$E t") #$us) o* t") 6,)$#" o* t") o6+g$to! ;ust 6) !()%)!()!t o* t") ?++ o* t") ()6to,G D6E t") )=)!t ;ust 6) )t"), u!*o,s))$6+) o,
u!$=o($6+)G D#E t") )=)!t ;ust 6) su#" $s to ,)!(), t ;%oss6+) *o, t") ()6to, to *u+*++ "s o6+g$to! ! $ !o,;$+ ;$!!),G $!( D(E t") ()6to, ;ust
6) *,)) *,o; $!& %$,t#%$to! !, o, $gg,$=$to! o* t") !7u,& to t") #,)(to,. D/$sIu)F =. Cou,t o* A%%)$+s, 185 SCRA 558G Est,$($ =. Co!so+$#o!, 71
SCRA 928G Aust,$ =. Cou,t o* A%%)$+s, 89 SCRA 527G R)%u6+# o* t") P"+. =. LuFo! St)=)(o,!g Co,%., 21 SCRA 279G L$s$; =. S;t", 95 P"+. 357E.
T"us, * u%o! t") "$%%)!!g o* $ *o,tutous )=)!t o, $! $#t o* Go(, t"),) #o!#u,s $ #o,,)s%o!(!g *,$u(, !)g+g)!#), ()+$& o, =o+$to! o,
#o!t,$=)!to! ! $!& ;$!!), o* t") t)!o, o* t") o6+g$to! $s %,o=()( *o, ! A,t#+) 1174 o* t") C=+ Co(), ?"#" ,)su+ts ! +oss o, ($;$g), t")
o6+go, #$!!ot )s#$%) +$6+t&.
T") %,!#%+) );6o()( ! t") $#t o* Go( (o#t,!) st,#t+& ,)Iu,)s t"$t t") $#t ;ust 6) o!) o##$so!)( )0#+us=)+& 6& t") =o+)!#) o* !$tu,) $!( $++
"u;$! $g)!#)s $,) to 6) )0#+u()( *,o; #,)$t!g o, )!t),!g !to t") #$us) o* t") ;s#")*. >")! t") )**)#t, t") #$us) o* ?"#" s to 6) #o!s(),)(,
s *ou!( to 6) ! %$,t t") ,)su+t o* t") %$,t#%$to! o* ;$!, ?")t"), t 6) *,o; $#t=) !t),=)!to! o, !)g+)#t, o, *$+u,) to $#t, t") ?"o+) o##u,,)!#) s
t"),)6& "u;$!F)(, $s t ?),), $!( ,);o=)( *,o; t") ,u+)s $%%+#$6+) to t") $#ts o* Go(. D1 Co,%us 'u,s, %%. 1179:1175E.
T"us t "$s 6))! ")+( t"$t ?")! t") !)g+g)!#) o* $ %),so! #o!#u,s ?t" $! $#t o* Go( ! %,o(u#!g $ +oss, su#" %),so! s !ot )0);%t *,o; +$6+t&
6& s"o?!g t"$t t") ;;)($t) #$us) o* t") ($;$g) ?$s t") $#t o* Go(. To 6) )0);%t *,o; +$6+t& *o, +oss 6)#$us) o* $! $#t o* Go(, ") ;ust 6) *,))
*,o; $!& %,)=ous !)g+g)!#) o, ;s#o!(u#t 6& ?"#" t"$t +oss o, ($;$g) ;$& "$=) 6))! o##$so!)(. DFs" B E+)#t=) Co. =. P"+. Moto,s, 55 P"+.
129G Tu#C), =. M+$!, 99 O.G. 9879G L;%$!g#o B So!s =. <$!g#o St)$;s"% Co., 89 P"+. 599, 349G L$s$; =. S;t", 95 P"+. 357E.
T") !)g+g)!#) o* t") ()*)!($!t $!( t") t",(:%$,t& ()*)!($!ts %)tto!),s ?$s )st$6+s")( 6)&o!( (s%ut) 6ot" ! t") +o?), #ou,t $!( ! t")
I!t),;)($t) A%%)++$t) Cou,t. D)*)!($!t U!t)( Co!st,u#to! Co., I!#. ?$s *ou!( to "$=) ;$() su6st$!t$+ ()=$to!s *,o; t") %+$!s $!(
s%)#*#$to!s. $!( to "$=) *$+)( to o6s),=) t") ,)Iust) ?o,C;$!s"% ! t") #o!st,u#to! $s ?)++ $s to )0),#s) t") ,)Iust) ()g,)) o* su%),=so!G
?"+) t") t",(:%$,t& ()*)!($!ts ?),) *ou!( to "$=) !$()Iu$#)s o, ()*)#ts ! t") %+$!s $!( s%)#*#$to!s %,)%$,)( 6& t");. As #o,,)#t+& $ss)ss)(
6& 6ot" #ou,ts, t") ()*)#ts ! t") #o!st,u#to! $!( ! t") %+$!s $!( s%)#*#$to!s ?),) t") %,o0;$t) #$us)s t"$t ,)!(),)( t") P-A 6u+(!g u!$6+)
to ?t"st$!( t") )$,t"Iu$C) o* August 2, 1935. Fo, t"s ,)$so! t") ()*)!($!t $!( t",(:%$,t& ()*)!($!ts #$!!ot #+$; )0);%to! *,o; +$6+t&.
DD)#so!, Cou,t o* A%%)$+s, %%. 84:81E.
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s%$#!g o* t") s%,$+s $!( t)s ! t") #o+u;!s ?),) g,)$t), t"$! t"$t #$++)( *o, ! t") s%)#*#$to!sG t"$t t") "o++o? ! #o+u;! A9, s)#o!( *+oo,, t")
)##)!t,#t)s ! t") #o+u;!s, t") +$#C o* %,o%), +)!gt" o* s%+#!g o* s%,$+s, $!( t") #ut ! t") s%,$+s ! #o+u;! A5, g,ou!( *+oo,, (( !ot $gg,$=$t)
o, #o!t,6ut) to t") ($;$g) su**),)( 6& t") 6u+(!gG t"$t t") ()*)#ts ! t") #o!st,u#to! ?),) ?t"! t") to+),$6+) ;$,g! o* s$*)t&G $!( t"$t t")
#utt!g o* t") s%,$+s ! #o+u;! A5, g,ou!( *+oo,, ?$s (o!) 6& t") %+u;6), o, "s ;)!, $!( !ot 6& t") ()*)!($!ts.
A!s?),!g t") s$( o67)#to!s, t") Co;;sso!), st$t)( t"$t, s!#) ;$!& o* t") ()*)#ts ?),) ;!o, o!+& t") tot$+t& o* t") ()*)#ts ?$s #o!s(),)(.
As ,)g$,(s t") o67)#to! $s to *$+u,) to st$t) t") !u;6), o* #$s)s ?"),) t") s%,$+s $!( t)s ?),) !ot #$,,)( *,o; t") *+oo, +)=)+ to t") 6otto;
,)!*o,#);)!t, t") Co;;sso!), s%)#*)( g,ou!(*+oo, #o+u;!s -:3 $!( C:5 t") *,st o!) ?t"out s%,$+s *o, 48 !#")s $t t") to%, $!( ! t") +$tt),,
t"),) ?),) !o s%,$+s *o, 14 !#")s $t t") 6otto;. T") Co;;sso!), +C)?s) s%)#*)( t") *,st sto,)& #o+u;!s ?"),) t") s%$#!gs ?),) g,)$t), t"$!
t"$t #$++)( *o, ! t") s%)#*#$to!s to 6) #o+u;!s -:5, -:3, C:7, C:3, C:5, D:5 $!( -:7. T") o67)#to! to t") *$+u,) o* t") Co;;sso!), to s%)#*& t")
!u;6), o* #o+u;!s ?"),) t"),) ?$s +$#C o* %,o%), +)!gt" o* s%+#!g o* s%,$+s, t") Co;;sso!), ;)!to!)( g,ou!(*+oo, #o+u;!s -:3 $!( -:5
?"),) $++ t") s%+#)s ?),) +)ss t"$! 1:1K2 tu,!s $!( ?),) !ot ?)+()(, ,)su+t!g ! so;) +oss o* st,)!gt" ?"#" #ou+( 6) #,t#$+ !)$, t") )!(s o* t")
#o+u;!s. H) $!s?),)( t") su%%osto! o* t") ()*)!($!ts t"$t t") s%,$+s $!( t") t)s ;ust "$=) 6))! +oot)(, 6& #$++!g $tt)!to! to t") *$#t t"$t t")
;ss!g s%,$+s $!( t)s ?),) o!+& ! t?o out o* t") 25 #o+u;!s, ?"#" ,)!(),)( s$( su%%osto! to 6) ;%,o6$6+).
T") Co;;sso!), #o!#)()( t"$t t") "o++o? ! #o+u;! A:9, s)#o!( *+oo,, (( !ot $gg,$=$t) o, #o!t,6ut) to t") ($;$g), 6ut $=),,)( t"$t t s
J)=()!#) o* %oo, #o!st,u#to!.J O! t") #+$; t"$t t") )##)!t,#t& #ou+( 6) $6so,6)( ?t"! t") *$#to, o* s$*)t&, t") Co;;sso!), $!s?),)( t"$t,
?"+) t") s$;) ;$& 6) t,u), t $+so #o!t,6ut)( to o, $gg,$=$t)( t") ($;$g) su**),)( 6& t") 6u+(!g.
T") o67)#to! ,)g$,(!g t") #utt!g o* t") s%,$+s ! Co+u;! A:5, g,ou!(*+oo,, ?$s $!s?),)( 6& t") Co;;sso!), 6& ,)t),$t!g t") o6s),=$to! !
"s ,)%o,t t"$t ,,)s%)#t=) o* ?"o (( t") #utt!g o* t") s%,$+s, t") ()*)!($!ts s"ou+( 6) ")+( +$6+) *o, t") s$;) $s t") g)!),$+ #o!t,$#to, o* t")
6u+(!g. T") Co;;sso!), *u,t"), st$t)( t"$t t") +oss o* st,)!gt" o* t") #ut s%,$+s $!( !)+$st# ()*+)#to!s o* t") su%%os)( +$tt#) ?o,C ()*)$t)(
t") %u,%os) o* t") s%,$+ #o!t$!;)!t ! t") #o+u;! $!( ,)su+t)( ! t") +oss o* st,)!gt", $s )=()!#)( 6& t") $#tu$+ *$+u,) o* t"s #o+u;!.
Ag$!, t") Cou,t #o!#u,s ! t") *!(!gs o* t") Co;;sso!), o! t")s) ssu)s $!( *$+s to *!( $!& su**#)!t #$us) to (s,)g$,( o, ;o(*& t") s$;).
As *ou!( 6& t") Co;;sso!),, t") J()=$to!s ;$() 6& t") ()*)!($!ts *,o; t") %+$!s $!( s%)#*#$to!s #$us)( !(,)#t+& t") ($;$g) sust$!)(
$!( t"$t t"os) ()=$to!s !ot o!+& $(()( 6ut $+so $gg,$=$t)( t") ($;$g) #$us)( 6& t") ()*)#ts ! t") %+$!s $!( s%)#*#$to!s %,)%$,)( 6& t",(:
%$,t& ()*)!($!ts. DRo++o, /o+. I, %%. 125:192E
T") $*o,):;)!to!)( *$#ts #+)$,+& !(#$t) t") ?$!to! !)g+g)!#) o* 6ot" t") ()*)!($!t $!( t") t",(:%$,t& ()*)!($!ts ! )**)#t!g t") %+$!s, ()sg!s,
s%)#*#$to!s, $!( #o!st,u#to! o* t") P-A 6u+(!g $!( >) "o+( su#" !)g+g)!#) $s )Iu=$+)!t to bad faith ! t") %),*o,;$!#) o* t"), ,)s%)#t=)
t$sCs.
R)+$t=) t"),)to, t") ,u+!g o* t") Su%,);) Cou,t ! Tucker v. Milan D99 O.G. 9879, 9854E ?"#" ;$& 6) ! %o!t ! t"s #$s) ,)$(sA
O!) ?"o !)g+g)!t+& #,)$t)s $ ($!g),ous #o!(to! #$!!ot )s#$%) +$6+t& *o, t") !$tu,$+ $!( %,o6$6+) #o!s)Iu)!#)s t"),)o*, $+t"oug" t") $#t o* $
t",( %),so!, o, $! $#t o* Go( *o, ?"#" ") s !ot ,)s%o!s6+), !t),=)!)s to %,)#%t$t) t") +oss.
As $+,)$(& (s#uss)(, t") ()st,u#to! ?$s !ot %u,)+& $! $#t o* Go(. T,ut" to t)++ "u!(,)(s o* $!#)!t 6u+(!gs ! t") =#!t& ?),) "$,(+& $**)#t)( 6&
t") )$,t"Iu$C). O!+& o!) t"!g s%)++s out t") *$t$+ (**),)!#)G g,oss !)g+g)!#) $!( )=()!t 6$( *$t", ?t"out ?"#" t") ($;$g) ?ou+( !ot "$=)
o##u,,)(.
>HEREFORE, t") ()#so! $%%)$+)( *,o; s "),)6& MODIFIED $!( #o!s(),!g t") s%)#$+ $!( )!=,o!;)!t$+ #,#u;st$!#)s o* t"s #$s), >) ());
t ,)$so!$6+) to ,)!(), $ ()#so! ;%os!g, $s >) (o "),)6& ;%os), u%o! t") ()*)!($!t $!( t") t",(:%$,t& ()*)!($!ts D?t" t") )0#)%to! o*
Ro;$! OF$)t$E $ solidary DA,t. 1728, C=+ Co(), Supra, %. 14E !();!t& ! *$=o, o* t") P"+%%!) -$, Asso#$to! o* FI/E MILLION DP5,444,444.44E
P)sos to #o=), $++ ($;$g)s D?t" t") )0#)%to! o* $tto,!)&Hs *))sE o##$so!)( 6& t") +oss o* t") 6u+(!g D!#+u(!g !t),)st #"$,g)s $!( +ost ,)!t$+sE
$!( $! $((to!$+ ONE HUNDRED THOUSAND DP144,444.44E P)sos $s $!( *o, $tto,!)&Hs *))s, t") tot$+ su; 6)!g %$&$6+) u%o! t") *!$+t& o* t"s
()#so!. U%o! *$+u,) to %$& o! su#" *!$+t&, t?)+=) D12ME %), #)!t !t),)st %), $!!u; s"$++ 6) ;%os)( u%o! $*o,):;)!to!)( $;ou!ts *,o; *!$+t&
u!t+ %$(. So+($,& #osts $g$!st t") ()*)!($!t $!( t",(:%$,t& ()*)!($!ts D)0#)%t Ro;$! OF$)t$E.
SO ORDERED.
Feria (hairman!, Fernan, "lampay and ru#, JJ., concur.
G.R. No. 148872 'u!) 22, 1992
EPG CONSTRUCTION COMPAN<, INC., $!( EMMANUEL P. DE GU2MAN, petitioner,
vs.
HONARA-LE COURT OF APPEALS D17t" D=so!E, D R)%u6+# o* t") P"+%%!)sE, UNI/ERSIT< OF THE PHILIPPINES, respondents.
CRU2, J.:
Petitioner 9PH Construction Co., #nc. and the @niversity of the Philippines, herein private respondent, entered into a contract for the construction of the @P 3a*
3ibrary 2uildin+ for the stipulated price of P(,B'B,000.00. The a+ree"ent included the follo*in+ provisionA
$&T#C39 1#
H@$&$?T99
CO?T&$CTO& +uarantees that the *ork co"pleted under the contract and any chan+e order, thereto, shall be in accordance *ith the
plans and specification prepared by $&C<#T9CT, and shall confor" to the specific re=uire"ents, perfor"ances, and capacities re=uired
by the contract, and shall be free fro" i"perfect *ork"anship or "aterials. CO?T&$CTO& shall repair at his o*n cost and e-penses for
a period of one 1) year fro" date of substantial co"pletion and acceptance of the *ork by the O6?9&, all the *ork covered under the
contract and chan+e orders that "ay prove defective e-cept "aintenance *orks. The CO?T&$CTO& shall be liable in accordance *ith
$rt. 1(4; of the Civil Code in case, *ithin 1B years fro" co"pletion of the pro/ect, the buildin+ collapses on account of defects in the
construction or the use of "aterials of inferior =uality furnished by hi" or due to any violation of the ter"s of contract.
@pon its co"pletion, the buildin+ *as for"ally turned over by 9PH to the private respondent. @P issued a certification of acceptance dated 7anuary 1;, 195;,
readin+ as follo*sA
This is to certify that the Heneral Construction 6ork of the Colle+e of 3a* 3ibrary $nne- 2uildin+, @niversity of the Philippines, 8ili"an,
Jue0on City, has been satisfactorily co"pleted as per plans and specifications as of 7anuary 11, 195; *ithout any defects *hatsoever
and therefore accepted.
&elease of the 10L retention is hereby reco""ended in favor of 9PH Construction, #nc.
%o"eti"e in 7uly, 195;, the private respondent co"plained to the petitioner that 6 air.conditionin+ units on the third floor of the buildin+ *ere not coolin+
properly. $fter inspection of the e=uip"ent, 9PH a+reed to shoulder the e-penses for their repair, includin+ labor and "aterials, in the a"ount of P;5.000.00.
!or *hatever reason, the repair *as never undertaken. @P repeated its co"plaints to 9PH, *hich a+ain sent its representatives to assess the defects. !inally, it
"ade @P a *ritten offer to repair the syste" for P19',000.00.
@P insisted that 9PH *as obli+ated to repair the defects at its o*n e-pense under the +uarantee provision in their contract. 9PH de"urred. @P then contracted
*ith another co"pany, *hich repaired the defects for P190,000.00.
The private respondent subse=uently de"anded fro" 9PH rei"burse"ent of the said a"ount plus an e=ual su" as li=uidated da"a+es. 6hen the de"and *as
re/ected, @P sued 9PH and its president, 9""anuel P. de Hu0"an, in the &e+ional Trial Court of Jue0on City. 8e Hu0"an "oved to dis"iss the co"plaint as
to hi" for lack of a cause of action, but the "otion *as denied.
$fter trial, /ud+"ent *as rendered by 7ud+e $ntonio P. %olano re=uirin+ both defendants /ointly and severally to pay the plaintiff P190,000.00 as actual da"a+es,
PB0,000.00 as li=uidated da"a+es, P10,000.00 as attorney,s fees, and costs.
The petitioners appealed to the Court of $ppeals, *hich sustained the trial court.
1
They then ca"e to this Court to fault the respondent
court for not holdin+ thatA 1) @P *as estopped by its certificate of acceptance fro" i"putin+ liability to 9PH for
the defectsF 4) the defects *ere due to force majeure or fortuitous eventF and ;) 9""anuel de Hu0"an has a
separate personality fro" that of 9PH Construction Co., #nc.
The petitioners ar+ue that by issuin+ the certificate of acceptance, @P *aived the +uarantee provision and is
no* estopped fro" invokin+ it. The ar+u"ent is absurd. $ll @P certified to *as that the buildin+ *as in +ood
condition at the ti"e it *as turned over to it on 7anuary 1;, 195;. #t did not thereby relieve the petitioners of
liability for any defect that "i+ht arise or be discovered later durin+ the one.year period of the +uarantee. $ny
other interpretation *ould "ake the +uarantee provision useless to be+in *ith as it *ould have auto"atically
beco"e functus officio *ith the turn.over of the construction.
The petitioners bolster their ar+u"ent by =uotin+ $rticle 1(19 of the Civil Code thus, C$cceptance of the *ork by
the e"ployer relieves the contractor of liability . . . C and stoppin$ there. The $rticle reads in full as follo*sA
$rt. 1(19. $cceptance of the *ork by the e"ployer relieves the contractor of liability for any
defect in the *ork, unlessA
1) The defect is hidden and the e"ployer is not, by his special kno*led+e, e-pected to
reco+ni0e the sa"eF or
4) The e"ployer e-pressly reserves his ri+hts a+ainst the contractor by reason of the defect.
The e-ceptions *ere o"itted by the petitioners for obvious reasons. The defects co"plained a+ainst *ere
hidden and the e"ployer *as not e-pected to reco+ni0e the" at the ti"e the *ork *as accepted. >oreover,
there *as an e-press reservation by @P of its ri+ht to hold the contractor liable for the defects durin+ a period of
one year.
The petitioners, contention that the defects *ere caused by force majeure or fortuitous event as a result of the
fre=uent bro*n.outs in >etro >anila is not "eritorious. The Court is not prepared to accept that the recurrent
po*er cut.offs can be classified as force majeure or a fortuitous event, 6e a+ree that the real cause of the
proble", accordin+ to the petitioners, o*n subcontractor, *as poor *ork"anship, as discovered upon inspection
of the coolin+ syste", $"on+ the detects noted *ere i"proper interlockin+ of the entire electrical syste" in all
the si- unitsF *ron+ specification of the ti"e delay relay, also in all the si- unitsF incorrect *irin+ connections on
the oil pressure s*itchesF i"proper settin+ of the <i and 3o pressure s*itchesF and "any "issin+ parts like bolts
and scre*s of panels, and the co"pressor ter"inal insulation, and the ter"inal scre*s of a circuit breaker.
2
Curiously, it has not been sho*n that the coolin+ syste" in buildin+s *ithin the sa"e area have been si"ilarly
da"a+ed by the po*er cut.offs. The bro*n.outs have beco"e an intolerable annoyance, but they cannot e-cuse
all contractual irre+ularities, includin+ the petitioners, shortco"in+s.
The petitioners also clai" that the breakdo*n of the coolin+ syste" *as caused by the failure of @P to do
"aintenance *ork thereon. 6e do not see ho* "ere "aintenance *ork could have corrected the above.
"entioned defects. $t any rate, *hether the repairs in the air.conditionin+ syste" can be considered "ere
"aintenance *ork is a factual issue. The resolution thereof by the lo*er courts is bindin+ upon this Court in the
absence of a clear sho*in+ that it co"es under the accepted e-ceptions to the rule. There is no such sho*in+
here.
The final point of the petition is that 9""anuel P. de Hu0"an has a separate le+al personality fro" 9PH
Construction Co., #nc. and should not be held solidarity liable *ith it. <e stresses that the acts of the co"pany
are its o*n responsibility and there is no reason *hy any liability arisin+ fro" such acts should be ascribed to
hi". ThusA
#t is a doctrine *ell.established and obtains both at la* and in e=uity that a corporation is a
distinct le+al entity to be considered as separate and apart fro" the individual stockholders or
"e"bers *ho co"pose it, and is not affected by the personal ri+hts, obli+ations and
transactions of its stockholders or "e"bers.
8
The trial court did not e-plain *hy 9""anuel de Hu0"an *as held solidarity liable *ith 9PH Construction Co.,
#nc., and neither did the respondent court *hen it affir"ed the appealed decision, #n its Co""ent on the present
petition, @P also did not refute the petitioners, ar+u"ent and si"ply passed upon it sub si"entio althou+h the
"atter *as s=uarely raised and discussed in the petition.
?otably, *hen 9""anuel de Hu0"an "oved to dis"iss the co"plaint as to hi", @P said in its opposition to the
"otion that it *as suin+ hi" Cin his officia" capacity and not in his personal capacity.C <is inclusion as President
of the co"pany *as therefore superfluous, as 8e Hu0"an correctly contended, because his acts as such *ere
corporate acts i"putable to 9PH itself as his principal. #t is settled thatF
$ corporation is invested by la* *ith a personality separate and distinct fro" those of the
persons co"posin+ it as *ell as fro" that of any other entity to *hich it "ay be related. >ere
o*nership by a sin+le stockholder or by another corporation of all or nearly all of the capital
stock of a corporation is not of itself sufficient +round for disre+ardin+ the separate corporate
personality. The +eneral "ana+er of a corporation therefore should not be "ade personally
ans*erable for the pay"ent of the e"ployee,s back*a+es unless he had acted "aliciously or in
bad faith in ter"inatin+ the services of the e"ployee.
9
The e-ception noted is *here the official Chad acted "aliciously or in bad faith,C in *hich event he "ay be "ade
personally liable for his o*n act. That e-ception is not applicable in the case at bar, because it has not been
proved that 8e Hu0"an acted "aliciously or in bad faith *hen, as President of 9PH, he sou+ht to protect its
interests and resisted @P,s clai"s. 6hatever da"a+e *as caused to @P as a result of his acts is the sole
responsibility of 9PH even thou+h 8e Hu0"an *as its principal officer and controllin+ stockholder.
#n su", *e hold that the lo*er court did not err in holdin+ 9PH liable for the repair of the air.conditionin+ syste"
at its e-pense pursuant to the +uarantee provision in the construction contract *ith @P. <o*ever, 9""anuel de
Hu0"an is not solidarily liable *ith it, havin+ acted on its behalf *ithin the scope of his authority and *ithout any
de"onstrated "alice or bad faith.
6<9&9!O&9, the appealed decision is $!!#&>98 but *ith the "odification that 9PH Construction Co., #nc.
shall be solely liable for the da"a+es a*arded in favor of the @niversity of the Philippines. #t is so ordered.
Gri<o:'*uino, Media"dea and Be""osi""o, --., concur.
G.R. No. L:84212 S)%t);6), 84, 1957
-IEN/ENIDO GELISAN, petitioner,
vs.
-ENITO ALDA<, ,)s%o!()!t.
PADILLA, J.:
&evie* on certiorari of the /ud+"ent N rendered by the Court of $ppeals, dated 11 October 1965, as a"ended by its resolution, dated
11 !ebruary 1969, in C$.H.&. ?o. ;46(0.&, entitledA C2enito $lday, plaintiff.appellant, vs. &oberto 9spiritu and 2ienvenido Helisan, defendants.appellees,C *hich
ordered the herein petitioner 2ienvenido Helisan to pay, /ointly and severally, *ith &oberto 9spiritu, the respondent 2enito $lday the a"ount of PB,;9(.;0, *ith.
le+al interest thereon fro" the filin+ of the co"plaint, and the costs of suitF and for the said &oberto 9spiritu to pay or refund the petitioner 2ienvenido Helisan
*hatever a"ount the latter "ay have paid to the respondent 2enito $lday by virtue of the /ud+"ent.
The uncontroverted facts of the case are, as follo*sA
8efendant 2ienvenido Helisan is the o*ner of a frei+ht truck bearin+ plate ?o. T<.4;((. On 7anuary ;1, 1964, defendant 2ienvenido
Helisan and &oberto 9spiritu entered into a contract "arked 9-hibit ;.Helisan under *hich 9spiritu hired the sa"e frei+ht truck of Helisan
for the purpose of haulin+ rice, su+ar, flour and fertili0er at an a+reed price of P15.00 per trip *ithin the li"its of the City of >anila provided
the loads shall not e-ceed 400 sacks. #t is also a+reed that 9spiritu shall bear and pay all losses and da"a+es attendin+ the carria+e of
the +oods to be hauled by hi". The truck *as taken by a driver of &oberto 9spiritu on !ebruary 1, 1964. Plaintiff 2enito $lday, a truckin+
operator, and *ho o*ns about 1B frei+ht trucks, had kno*n the defendant &oberto 9spiritu since 19'5 as a truck operator. Plaintiff had a
contract to haul the fertili0ers of the $tlas !ertili0er Corporation fro" Pier ', ?orth <arbor, to its 6arehouse in >andaluyon+. $lday "et
9spiritu at the +ate of Pier ' and the latter offered the use of his truck *ith the driver and helper at 9 centavos per ba+ of fertili0er. The
offer *as accepted by plaintiff $lday and he instructed his checker Celso <enson to let &oberto 9spiritu haul the fertili0er. 9spiritu "ade
t*o hauls of 400 ba+s of fertili0er per trip. The fertili0er *as delivered to the driver and helper of 9spiritu *ith the necessary *ay bill
receipts, 9-hibits $ and 2. 9spiritu, ho*ever, did not deliver the fertili0er to the $tlas !ertoli0er bode+a at >andaluyon+. The si+natures
appearin+ in the *ay bill receipts 9-hibits $ and 2 of the $lday Transportation ad"ittedly not the si+nature of any representative or
e"ployee of the $tlas !ertili0er Corporation. &oberto 9spiritu could not be found, and plaintiff reported the loss to the >anila Police
8epart"ent. &oberto 9spiritu *as later arrested and booked for theft. ...
%ubse=uently, plaintiff $iday sa* the truck in =uestion on %to. Cristo %t. and he notified the >anila Police 8epart"ent, and it *as
i"pounded by the police. #t *as clai"ed by 2ienvenido Helisan fro" the Police 8epart"ent after he had been notified by his e"ployees
that the truck had been i"pounded by the policeF but as he could not produce at the ti"e the re+istration papers, the police *ould not
release the truck to Helisan. $s a result of the i"poundin+ of the truck accordin+ to Helisan, ... and that for the release of the truck he paid
the pre"iu" of P;00 to the surety co"pany. 1
2enito $lday *as co"pelled to pay the value of the '00 ba+s of fertili0er, in the a"ount of PB,;9(.;;, to $tlas !ertili0er Corporation so that, on 14 !ebruary 1964,
he $lday) filed a co"plaint a+ainst &oberto 9spiritu and 2ienvenido Helisan *ith the Court of !irst #nstance of >anila, docketed therein as Civil Case ?o.
'960;, for the recovery of da"a+es suffered by hi" thru the cri"inal acts co""itted by the defendants.
The defendant, &oberto 9spiritu failed to file an ans*er and *as, accordin+ly, declared in default.
The defendant, 2ienvenido Helisan, upon the other hand, diso*ned responsibility. <e clai"ed that he had no contractual relations *ith the plaintiff 2enito $lday
as re+ards the haulin+ andNor delivery of the '00 ba+s of fertili0er "entioned in the co"plaintF that the alle+ed "isappropriation or nondelivery by defendant
&oberto 9spiritu of plaintiff,s '00 ba+s of fertili0er, *as entirely beyond his Helisan,s) control and kno*led+e, and *hich fact beca"e kno*n to hi", for the first
ti"e, on 5 !ebruary 1964 *hen his frei+ht truck, *ith plate ?o. T<.4;((, *as i"pounded by the >anila Police 8epart"ent, at the instance of the plaintiffF and
that in his *ritten contract of hire *ith &oberto 9spiritu, it *as e-pressly provided that the latter *ill bear and pay all loss and da"a+es attendin+ the carria+e of
+oods to be hauled by said &oberto 9spiritu.
$fter trial, the Court of !irst #nstance of >anila ruled that &oberto 9spiritu alone *as liable to 2enito $lday, since 2ienvenido Helisan *as not privy to the contract
bet*een 9spiritu and $lday. The dispositive portion of the decision reads, as follo*sA
6<9&9!O&9, /ud+"ent is hereby rendered in favor of the plaintiff and a+ainst the defendant &oberto 9spiritu for the su" of P6,000 *ith
interest at the le+al rate fro" the ti"e of the filin+ of the co"plaint, and the costs of the suit. Plantiff,s co"plaint is dis"issed *ith respect
to defendant 2ienvenido Helisan, and /ud+"ent is rendered in favor of defendant 2ienvenido Helisan and a+ainst the plaintiff for the su"
of P;B0.
2
On appeal, ho*ever, the Court of $ppeals, citin+ the case of Monto1a vs. I$nacio,
8
found that 2ienvenido
Helisan is like*ise liable for bein+ the re+istered o*ner of the truckF and that the lease contract, e-ecuted by and
bet*een 2ienvenido Helisan and &oberto 9spiritu, is not bindin+ upon 2enito $lday for not havin+ been
previously approved by the Public %ervice Co""ission. $ccordin+ly, it sentenced 2ienvenido Helisan to pay,
/ointly and severally *ith &oberto 9spiritu, 2enito $lday the a"ount of PB,;9(.;0, *ith le+al interest thereon fro"
the filin+ of the co"plaintF and to pay the costs. &oberto 9spiritu, in turn, *as ordered to pay or refund
2ienvenido Helisan *hatever a"ount the latter "ay have paid to 2enito $lday by virtue of the /ud+"ent.
9
<ence, the present recourse by 2ienvenido Helisan.
The petition is *ithout "erit. The /ud+"ent rendered by the Court of $ppeals, *hich is sou+ht to be revie*ed, is
in accord *ith the facts and the la* on the case and *e find no co+ent reason to disturb the sa"e. The Court
has invariably held in several decisions that the re+istered o*ner of a public service vehicle is responsible for
da"a+es that "ay arise fro" conse=uences incident to its operation or that "ay be caused to any of the
passen+ers therein.
5
The clai" of the petitioner that he is not hable in vie* of the lease contract e-ecuted by
and bet*een hi" and &oberto 9spiritu *hich e-e"pts hi" fro" liability to third persons, cannot be sustained
because it appears that the lease contract, adverted to, had not been approved by the Public %ervice
Co""ission. #t is settled in our /urisprudence that if the property covered by a franchise is transferred or leased
to another *ithout obtainin+ the re=uisite approval, the transfer is not bindin+ upon the public and third persons.
3
6e also find no "erit in the petitioner,s ar+u"ent that the rule re=uirin+ the previous approval by the Public
%ervice Co""ission, of the transfer or lease of the "otor vehicle, "ay be applied only in cases *here there is
no positive #dentification of the o*ner or driver, or *here there are very scant "eans of #dentification, but not in
those instances *here the person responsible for da"a+es has been fi-ed or deter"ined beforehand, as in the
case at bar. The reason for the rule *e reiterate in the present case, *as e-plained by the Court in Monto1a vs.
I$nacio,
7
thusA
There is "erit in this contention. The la* really re=uires the approval of the Public %ervice
Co""ission in order that a franchise, or any privile+e pertainin+ thereto, "ay be sold or leased
*ithout infrin+in+ the certificate issued to the +rantee. The reason is obvious. %ince a franchise
is personal in nature any transfer or lease thereof should be notified to the Public %ervice
Co""ission so that the latter "av take proper safe+uards to protect the interest of the public. #n
fact, the la* re=uires that, before the approval is +ranted, there should be a public hearin+, *ith
notice to all interested parties, in order that the Co""ission "ay deter"ine if there are +ood and
reasonable +rounds /ustifyin+ the transfer or lease of the property covered by the franchise, or if
the sale or lease is detri"ental to public interest. %uch bein+ the reason and philosophy behind
this re=uire"ent, it follo*s that if the property covered by the franchise is transferred, or leased
to another *ithout obtainin+ the re=uisite approval, the transfer is not bindin+ a+ainst the Public
%ervice Co""ission and in conte"plation of la* the +rantee continues to be responsible under
the franchise in relation to the Co""ission and to the Public. %ince the lease of the /eepney in
=uestion *as "ade *ithout such approval the only conclusion that can be dra*n is that
>arcelino #+nacio still continues to be its operator in conte"plation of la*, and as such is
responsible for the conse=uences incident to its operation, one of the" bein+ the collision under
consideration.
2ienvenido Helisan, the re+istered o*ner, is not ho*ever *ithout recourse. <e has a ri+ht to be inde"nified by
&oberto 9spiritu for the a"ount titat he "ay be re=uired to pay as da"a+es for the in/ury caused to 2enito $lday,
since the lease contract in =uestion, althou+h not effective a+ainst the public for not havin+ been approved by
the Public %ervice Co""ission, is valid and bindin+ bet*een the contractin+ parties.
5
6e also find no "erit in the petitioner,s contention that his liability is only subsidiary. The Court has consistently
considered the re+istered o*nerNoperator of a public service vehicle to be /ointly and severally liable *ith the
driver for da"a+es incurred by passen+ers or third persons as a conse=uence of in/uries sustained in the
operation of said vehicles. Thus, in the case of /ar$as vs. Lan$ca1,
9
the Court saidA
6e hold that the Court of $ppeals erred in considerin+ appellant.petitioner 8i*ata Gar+as only
subsidiarily liable under $rticle 10; of the &evised Penal Code. This court, in previous decisions,
has al*ays considered the re+istered o*nerNoperator of a passen+er vehicle, /ointly and
severally liable *ith the driver, for da"a+es incurred by passen+ers or third persons as a
conse=uence of in/uries or death) sustained in the operation of said vehicles. >ontoya vs.
#+nacio, 9' Phil., 154F Ti"bol vs. Osias, H.&. ?o. 3.(B'(, $pril ;0, 19BBF Gda. de >edina vs.
Cresencia, 99 Phil., B06F ?ecesito vs. Paras, 10' Phil., (BF 9re0o vs. 7epte, 104 Phil., 10;F
Ta"ayo vs. $=uino and &ayos vs Ta"ayo, 10B Phil., 9'9F B6 Off. Ha0. D;6E B61(.) #n the case of
9re0o vs. 7epte, &upra, 6e heldA
Q Q Q #n synthesis, *e hold that the re+istered o*ner, the defendant.appellant herein, is pri"arily
responsible for the da"a+e caused Q Q Q 9"phasis supplied)
#n the case of Ta"ayo vs. $=uino, supra, 6e saidA
Q Q Q $s Ta"ayo is the re+istered o*ner of the truck, his responsibffity to the public or to any
passen+er ridin+ in the vehicle or truck "ust be direct Q Q Q 9"phasis supplied)
6<9&9!O&9, the petition is hereby 89?#98. 6ith costs a+ainst the petitioner.
%O O&89&98.
ap (#hairman), Me"encio:;errera, %aras and &armiento, --., concur.
.R. No. 94553 'u+& 28, 1992
ARTURO DE GU2MAN, petitioner,
vs.
NATIONAL LA-OR RELATIONS COMMISSION, LA-OR AR-ITER MA. LOURDES A.
SALES, A/ELINO D. /ALLESTEROL, ALE'ANDRO Q. FRIAS, LINDA DE LA CRU2,
CORA2ON M. DE LA FUENTE, LILIA F. FLORO, $!( MARIO F. 'A<ME, respondents.
CRU2, J.:
#t is a funda"ental principle of la* and hu"an conduct that a person C"ust, in the e-ercise of
his ri+hts and in the perfor"ance of his duties, act *ith /ustice, +ive every one his due, and
observe honesty and +ood faith.C
1
This is the principle *e shall apply in the case at bar to +au+e the
petitioner,s "otives in his dealin+s *ith the private respondents.
$rturo de Hu0"an *as the +eneral "ana+er of the >anila office of the $ffiliated >achineries $+ency, 3td., *hich
*as based in <on+kon+. On 7une ;0, 1956, he received a tele- "essa+e fro" 3eo $. !ialla, "ana+in+ director
of $>$3 in its "ain office, advisin+ hi" of the closure of the co"pany due to financial reverses. This "essa+e
tri++ered the series of events that are the sub/ect of this liti+ation.
#""ediately upon receipt of the advise, 8e Hu0"an notified all the personnel of the >anila office. The
e"ployees then sent a letter to $>$3 acceptin+ its decision to close, sub/ect to the pay"ent to the" of their
current salaries, severance pay, and other statutory benefits. 8e Hu0"an /oined the" in these representations.
These re=uests *ere, ho*ever, not heeded. Conse=uently, the e"ployees, no* herein private respondents,
lod+ed a co"plaint *ith the ?3&C a+ainst $>$3, throu+h 3eo $. !ialla and $rturo de Hu0"an, for ille+al
dis"issal, unpaid *a+es or co""issions, separation pay, sick and vacation leave benefits, 1;th "onth pay, and
bonus.
!or his part, the petitioner be+an sellin+ so"e of $>$3,s assets and applied the proceeds thereof, as *ell as the
re"ainin+ assets, to the pay"ent of his clai"s a+ainst the co"pany. <e also or+ani0ed %usarco, #nc., *ith
hi"self as its president and his *ife as one of the incorporators and a "e"ber of the board of directors. This
co"pany is en+a+ed in the sa"e line of business and has the sa"e clients as that of the dissolved $>$3.
6ith this develop"ent, %usarco and its officers *ere i"pleaded in the a"ended co"plaint of the private
respondents. 3ater, 6illia" Juasha andNor Cirilo $sperilla *ere also included in the suit as the resident a+ents
of $>$3 of the Philippines.
On ?ove"ber (, 1956, the petitioner filed his o*n co"plaint *ith the ?3&C a+ainst $>$3 for his re"ainin+
unsatisfied clai"s.
On >ay 49, 195(, 3abor $rbiter 9duardo H. >a+no, to *ho" the petitioner,s co"plaint *as assi+ned, rendered
a decision orderin+ $>$3 to pay the petitioner the a"ount of P;(1,'69.B9 as separation pay, unpaid salary and
co""issions, after deductin+ the value of the assets earlier appropriated by the petitioner.
2
On %epte"ber ;0, 195(, 3abor $rbiter >a. 3ourdes $. %ales, *ho tried the private respondents, co"plaint,
rendered a decision M
1. Orderin+ &espondents $>$3 and $rturo de Hu0"an to pay /ointly and severally to each
Co"plainant separation pay co"puted at one.half "onth pay for every year of service,
back*a+es for one "onth, unpaid salaries for 7une 16.;0, 1956, 1;th "onth pay fro" 7anuary
to 7une ;0, 1956 and incentive leave pay e=uivalent to t*o and.a.half days payF
4. 8is"issin+ the co"plaint a+ainst respondents 3eo !ialla, 6illia" Juasha, %usarco, #nc. and
its directors %usan de Hu0"an, Pacita Castaneda, Heor+e 9sto"ata and Cynthia %errano for
lack of basis andNor "eritF
;. 8is"issin+ the clai"s for da"a+es for lack of basisF
'. Orderin+ respondents $>$3 and $rturo de Hu0"an to pay /ointly and severally attorney,s fees
to Co"plainants e=uivalent to 10L of the "onetary a*ards herein.
8
This decision *as on appeal affir"ed in toto by the ?3&C, *hich is no* faulted for +rave abuse of discretion in
this petition for certiorari.
The petitioner does not dispute the /urisdiction of the 3abor $rbiter and ?3&C over the co"plaint of the private
respondents a+ainst $>$3 in vie* of their previous e"ploy"ent relationship. <e ar+ues, ho*ever, that the
public respondents acted *ithout or in e-cess of /urisdiction in holdin+ hi" /ointly and severally liable *ith $>$3
as he *as not an e"ployer of the private respondents.
The %olicitor Heneral and the private respondents disa+ree. They "aintain that the petitioner, bein+ $>$3,s
hi+hest local representative in the Philippines, "ay be held personally ans*erable for the private respondents,
clai"s because he is included in the ter" Ce"ployerC under $rt. 414 c),
no* e) of the 3abor Code *hich providesA
$rt. 414. 8efinitions. M
--- --- ---
c. C9"ployerC includes any person actin+ in the interest of an e"ployer, directly or indirectly. . . .
#n the leadin+ case of '.#. Ransom Labor ?nion:##L? vs. !LR#,
9
as affir"ed in the subse=uent cases of
Gude, vs. !LR#,
5
and Ma$"utac vs.
!LR#,
3
this Court treated the president of the e"ployer corporation as an Ce"ployerC and held hi" solidarily
liable *ith the said corporation for the pay"ent of the e"ployees, "oney clai"s. %o *as the vice.president of
the e"ployer corporation in the case of #hua vs. !LR#.
7
The aforecited cases *ill not apply to the instant case, ho*ever, because the persons *ho *ere there "ade
personally liable for the e"ployees, clai"s *ere stockholders.officers of the respondent corporation. #n the case
at bar, the petitioner, *hile ad"ittedly the hi+hest rankin+ local representative of $>$3 in the Philippines, is
nevertheless not a stockholder and "uch less a "e"ber of the board of directors or an officer thereof. <e is at
"ost only a "ana+erial e"ployee under $rt. 414 ") of the 3abor Code, *hich reads in relevant part as follo*sA
$rt 414. 8efinitions. M
--- --- ---
". >ana+erial e"ployee is one *ho is vested *ith po*ers and prero+atives to lay do*n and
e-ecute "ana+e"ent policies andNor to
hire, transfer, suspend, lay off, recall, dischar+e, assi+n or discipline e"ployees. . . .
$s such, the petitioner cannot be held directly responsible for the decision to close the business that resulted in
his separation and that of the private respondents. That decision ca"e directly and e-clusively fro" $>$3. The
petitioner,s participation *as li"ited to the enforce"ent of this decision in line *ith his duties as +eneral "ana+er
of the co"pany. 9ven in a nor"al situation, in fact, he *ould not be liable, as a "ana+erial e"ployee of $>$3,
for the "onetary clai"s of its e"ployees. There should be no =uestion that the private respondents, recourse for
such clai"s cannot be a+ainst the petitioner but a+ainst $>$3 and $>$3 alone.
The /ud+"ent in favor of the private respondents could have been enforced a+ainst the properties of $>$3
located in this country e-cept for one difficulty. The proble" is that these properties have already been
appropriated by the petitioner to satisfy his o*n clai"s a+ainst the co"pany.
2y so doin+, has the petitioner incurred liability to the private respondentsK
The 3abor $rbiter believed he had because of his bad faith and ruled as follo*sA
Considerin+ that &espondent $. de Hu0"an is +uilty of bad faith in appropriatin+ for hi"self the
properties of &espondent $>$3 to the pre/udice of Co"plainants herein *hose clai"s are
kno*n to &espondent at the ti"e he "ade the disposition of $>$3,s properties, he is held /ointly
and severally liable *ith &espondent $>$3 for the a*ard of unpaid *a+es, separation pay,
back*a+es for one "onth, 1;th "onth pay and cash value of unused vacation leave.
#n /e"a1o v. &he"" #o. of the %hi"ippines, 5 #ommercia" 'ir Lines, Inc. (#'LI), kno*in+ that it did not have enou+h assets to pay off its liabilities,
called a "eetin+ of its creditors *here it announced that in case of non.a+ree"ent on a pro.rata distribution of its assets, includin+ the C.B' plant in California, it
*ould file insolvency proceedin+s. %hell Co"pany of the Philippines, one of its creditors, took advanta+e of this infor"ation and i""ediately "ade a tele+raphic
assi+n"ent of its credits in favor of its sister corporation in the @nited %tates. The latter thereupon pro"ptly attached the plane in California and disposed of the
sa"e, thus deprivin+ the other creditors of their proportionate share in its value. The Court declared that %hell had acted in bad faith and betrayed the trust of the
other creditors of C$3#. The said co"pany *as ordered to pay the" co"pensatory da"a+es in a su" e=ual to the value of the C.B' plane at the ti"e it assi+ned
its credit and e-e"plary da"a+es in the su" of P4B,000.00.
6e =uote *ith approval the follo*in+ observations of 3abor $rbiter %ales in her decisionA
6hile the le+iti"acy of &espondent $. de Hu0"an,s clai"s a+ainst $>$3 is not =uestioned, it "ust be stated that the "anner and the
"eans by *hich he satisfied such clai"s are evidently characteri0ed by bad faith on his part. !or one, &espondent $. de Hu0"an took
advanta+e of his position as Heneral >ana+er and arro+ated to hi"self the ri+ht to retain possession and o*nership of all properties
o*ned and left by $>$3 in the Philippines, even if he kne* that Co"plainants herein have si"ilar valid clai"s for unpaid *a+es and other
e"ployee benefits fro" the &espondent $>$3. . . .
$nother stron+ indication of bad faith on the part of &espondent $. de Hu0"an is his filin+ of a separate co"plaint a+ainst $>$3 before
the ?3&C $rbitration 2ranch about four ') "onths after the filin+ of the instant case *ithout infor"in+ this Office about the e-istence of
said case durin+ the proceedin+s in the instant case. This case *as dee"ed sub"itted for decision on >ay 15, 195( but it *as only on
7une 4, 195( that &espondent $. de Hu0"an for"ally notified this Office throu+h his %upple"ental Position Paper of his pendin+
co"plaint before $rbiter 9duardo >a+no docketed as ?3&C Case ?o. 11.'''1.56. @nder &ule G, %ection ' of the revised rules of the
?3&C, it is provided thatA
%ec. '. CO?%O3#8$T#O? O! C$%9% M *here there are t*o or "ore cases pendin+ before different 3abor
$rbiters in the sa"e &e+ional $rbitration 2ranch involvin+ the same emp"o1er and issues or the sa"e parties *ith
different issues, the case *hich *as filed last shall be consolidated *ith the first to avoid unnecessary costs or
delay. %uch cases shall be disposed of by the 3abor $rbiter to *ho" the first case *as assi+ned. 9"phasis
supplied).
<ad &espondent $. de Hu0"an +iven ti"ely notice of his co"plaint, his case could have been consolidated *ith this case and the issues
in both cases could have been resolved in a "anner that *ould +ive due consideration to the ri+hts and liabilities of all parties in interest
at the least, in case consolidation is ob/ected to or no lon+er possible, the Co"plainants herein could have been +iven a chance to
intervene in the other case so that *hatever disposition "i+ht be rendered by $rbiter >a+no *ould include consideration of Co"plainants,
clai"s herein.
#t is not disputed that the petitioner in the case at bar had his o*n clai"s a+ainst $>$3 and conse=uently had so"e proportionate ri+ht over its assets. <o*ever,
this ri+ht ceased to e-ist *hen, kno*in+ fully *ell that the private respondents had si"ilarly valid clai"s, he took advanta+e of his position as +eneral "ana+er
and applied $>$3,s assets in pay"ent e-clusively of his o*n clai"s.
$ccordin+ to Tolentino in his distin+uished *ork on the Civil CodeA
The e-ercise of a ri+ht ends *hen the ri+ht disappears, and it disappears *hen it is abused, especially to the pre/udice of others. The
"ask of a ri+ht *ithout the spirit of /ustice *hich +ives it life, is repu+nant to the "odern concept of social la*. #t cannot be said that a
person e-ercises a ri+ht *hen he unnecessarily pre/udices another or offends "orals or +ood custo"s. Over and above the specific
precepts of positive la* are the supre"e nor"s of /ustice *hich the la* develops and *hich are e-pressed in three principlesA honeste
vivere, alteru" non laedre and /ust suu" =ui=ue tribuereF and he *ho violates the" violates the la*. !or this reason, it is not per"issible
to abuse our ri+hts to pre/udice others.
9
The "odern tendency, he continues, is to depart fro" the classical and traditional theory, and to +rant inde"nity
for da"a+es in cases *here there is an abuse of ri+hts, even *hen the act is not illicit. 3a* cannot be +iven an
anti.social effect. #f "ere fault or ne+li+ence in one,s acts can "ake hi" liable for da"a+es for in/ury caused
thereby, *ith "ore reason should abuse or bad faith "ake hi" liable. $ person should be protected only *hen
he acts in the le+iti"ate e-ercise of his ri+ht, that is, *hen he acts *ith prudence and in +ood faithF but not *hen
he acts *ith ne+li+ence or abuse.
14
The above."entioned principles are contained in $rticle 19 of the Civil Code *hich providesA
$rt. 19. 9very person "ust, in the e-ercise of his ri+hts and in the perfor"ance of his duties, act
*ith /ustice, +ive everyone his due, and observe honesty and +ood faith.
This is supple"ented by $rticle 41 of the sa"e Code thusA
$rt. 41. $ny person *ho *illfully causes loss or in/ury to another in a "anner that is contrary to
"orals, +ood custo"s or public policy shall co"pensate the latter for the da"a+e.
$pplyin+ these provisions, *e hold that althou+h the petitioner cannot be "ade solidarily liable *ith $>$3 for the
"onetary de"and of its e"ployees, he is nevertheless directly liable to the" for his =uestionable conduct in
atte"ptin+ to deprive the" of their /ust share in the assets of $>$3.
@nder $rt. 4419, 10) of the Civil Code, "oral da"a+es "ay be recovered for the acts referred to in $rt. 41. #n
Bert Osme<a & 'ssociates vs. #ourt of 'ppea"s,
11
*e held that Cfraud and bad faith havin+ been established,
the a*ard of "oral da"a+es is in order.C $nd in %an %acific #ompan1 (%hi".) vs. %hi". 'dvertisin$ #orp.,
12
"oral da"a+es *ere a*arded a+ainst the defendant for its *anton and deliberate refusal to pay the /ust debt
due the plaintiff.
#t is settled that the court can +rant the relief *arranted by the alle+ation and the proof even if it is not specifically
sou+ht by the in/ured party.
18
#n the case at bar, *hile the private respondents did not cate+orically pray for
da"a+es, they did alle+e that the petitioner, takin+ advanta+e of his position as +eneral "ana+er, had
appropriated the properties of $>$3 in pay"ent of his o*n clai"s a+ainst the co"pany. That *as aver"ent
enou+h of the in/ury they suffered as a result of the petitioner,s bad faith.
The fact that no actual or co"pensatory da"a+es *as proven before the trial court does not adversely affect the
private respondents, ri+ht to recover "oral da"a+es. 6e have held that "oral da"a+es "ay be a*arded in the
cases referred to in the chapter on <u"an &elations of the Civil Code $rticles 19.;6) *ithout need of proof that
the *ron+ful act co"plained of had caused any physical in/ury upon the co"plainant.
19
6hen "oral da"a+es are a*arded, e-e"plary da"a+es "ay also be decreed.
15
9-e"plary da"a+es are
i"posed by the *ay of e-a"ple or correction for the public +ood, in additional to "oral, te"perate, li=uidated or
co"pensatory da"a+es.
13
$ccordin+ to the Code Co""ission, Ce-e"plary da"a+es are re=uired by public
policy, for *anton acts "ust be suppressed. They are an antidote so that the poison of *ickedness "ay not run
throu+h the body politic.C
17
These da"a+es are le+ally assessible a+ainst hi".
The petitioner asserts that, assu"in+ the private respondents to have a cause of action a+ainst hi" for his
alle+ed bad faith, the civil courts and not the 3abor $rbiter have /urisdiction over the case.
#n 'ssociated #iti,en Ban9, et a". vs. -ud$e -apson,
15
this Court heldA
Pri"arily, the issue to be resolved is *hether or not the respondent court has /urisdiction to hear
and decide an action for da"a+es based on the dis"issal of the e"ployee.
On all fours to the above issue is the rulin+ of this Court in %rimero v. Intermediate 'ppe""ate
#ourt 1B6 %C&$ ';B D195(E) *hich once a+ain reiterated the doctrine that the /urisdiction of the
3abor $rbiter under $rticle 41( of the 3abor Code is broad and co"prehensive enou+h to include
clai"s for "oral and e-e"plary da"a+es sou+ht to be recovered by an e"ployee *hose
services has been ille+ally ter"inated by is e"ployer 9bon v. 8e Hu0"an, 11; %C&$ BB D1954EF
$+uda v. Galle/os, 11; %C&$ 69 D1954EF Het0 Corporation v. Court of $ppeals, 116 %C&$ 56
D1954E).
!or the unla*ful ter"ination of e"ploy"ent, this Court in %rimero v. Intermediate 'ppe""ate
#ourt, supra, ruled that the 3abor $rbiter had the e-clusive and ori+inal /urisdiction over clai"s
for "oral and other for"s of da"a+es, so that the e"ployee in the proceedin+s before the 3abor
$rbiter should prosecute his clai"s not only for reliefs specified under the 3abor Code but also
for da"a+es under the Civil Code.
. . . Juestion of da"a+es *hich arose out of or connected with the "abor dispute should be
deter"ined by the labor tribunal to the e-clusion of the re+ular courts of /ustice 3i"=uiaco, 7r. v.
&a"olete, 1B6 %C&$ 164 D195(E). The re+ular courts have no /urisdiction over clai"s for "oral
and e-e"plary da"a+es arisin+ fro" ille+al dis"issal of an e"ployee Gar+as v. $kai
Philippines, #nc., 1B6 %C&$ B;1 D195(E).
$lthou+h the =uestion of da"a+es arisin+ fro" the petitioner,s bad faith has not directly sprun+ fro" the ille+al
dis"issal, it is clearly intert*ined there*ith. The predica"ent of the private respondents caused by their
dis"issal *as a++ravated by the petitioner,s act in the arro+atin+ to hi"self all of $>$3,s assets to the e-clusion
of its other creditors, includin+ its e"ployees. The issue of bad faith is incidental to the "ain action for ille+al
dis"issal and is thus properly co+ni0able by the 3abor $rbiter.
6e a+ree that, strictly speakin+, the deter"ination of the a"ount thereof *ould re=uire a re"and to the 3abor
$rbiter. <o*ever, inas"uch as the private respondents *ere separated in 1956 and this case has been pendin+
since then, the interests of /ustice de"and the direct resolution of this "otion in this proceedin+.
$s this Court has consistently declaredA
. . . it is a cherished rule of procedure for this Court to al*ays strive to settle the entire
controversy in a sin+le proceedin+ leavin+ no root or branch to bear the seeds of future liti+ation.
?o useful purpose *ill be served if this case is re"anded to the trial court only to have its
decision raised a+ain tot the #ndeter"inate $ppellate Court and fro" there to this Court. $l+er
9lectric, #nc. v. Court of $ppeals, 1;B %C&$ ;()
&e"and of the case to the lo*er court for further reception of evidence is not necessary *here
the court is in a position to resolve the dispute based on the records before it. On "any
occasions, the Court, in the public interest and the e-peditious ad"inistration of /ustice, has
resolved actions on the "erits instead of re"andin+ the" to the trial court for further
proceedin+s, such as *here the ends of /ustice *ould not be subserved by the re"and of the
case or *hen public interest de"ands an early disposition of the case. 3ian+a 2ay 3o++in+ Co.,
#nc. v. C$, 1B( %C&$ ;B()
%ound practice seeks to acco""odate the theory *hich avoids *aste of ti"e, effort and
e-pense, both to the parties and the +overn"ent, not to speak of delay in the disposal of the
case cf. !ernande0 v. Harcia, 94 Phil. B94, B9(). $ "arked characteristics of our /udicial set.up
is that *here the dictates of /ustice so de"and . . . the %upre"e Court should act, and act *ith
finality. 3i %iu 3iat v. &epublic, 41 %C&$ 10;9, 10'6, citin+ %a"al v. C$, 99 Phil. 4;0 and @.%. v.
Hi"ene0, ;' Phil. ('). #n this case, the dictates of /ustice do de"and that this Court act, and act
*ith finality. 2eautifont, #nc. v. C$, 1B( %C&$ '51)
#t is stressed that the petitioner,s liability to the private respondents is a direct liability in the for" of "oral and
e-e"plary da"a+es and not a solidary liability *ith $>$3 for the clai"s of its e"ployees a+ainst the co"pany.
<e is bein+ held liable not because he is the +eneral "ana+er of $>$3 but because he took advanta+e of his
position by applyin+ the properties of $>$3 to the pay"ent e-clusively of his o*n clai"s to the detri"ent of
other e"ployees.
6<9&9!O&9, the =uestioned decision is $!!#&>98 but *ith the "odification that the petitioner shall not be
held /ointly and severally liable *ith $>$3 for the private respondents, "oney clai"s a+ainst the latter. <o*ever,
for his bad faith in arro+atin+ to hi"self $>$3,s properties to the pre/udice of the private respondents, the
petitioner is orderedA 1) to pay the private respondents "oral da"a+es in the su" of P40,00.00 and e-e"plary
da"a+es in the su" of P40,00.00F and 4) to return the assets of $>$3 that he has appropriated, or the value
thereof, *ith le+al interests thereon fro" the date of the appropriation until they are actually restored, these
a"ounts to be proportionately distributed a"on+ the private respondents in satisfaction of the /ud+"ent
rendered in their favor a+ainst $>$3.
%O O&89&98.
Gri<o:'*uino, Media"dea and Be""osi""o, --., concur.
8< 4,<C
G.R. No. L-///) 5#%7 14, 1959
ALFREDO M. VELA.O, ET*., plaintiff,
vs.
SHELL *OMPAN. OF THE PHILIPPINES ISLANDS, LTD., defendant-appellee.
ALFONSO 2. S.*IP, ET. AL., intervenors-appellants.
Sycip, <uisu'bin", Sala.ar and Associates for appellants.
O.aeta, !ichauco and ica.o for appellee.
1A+TISTA ANGELO, J.
An 5ecember ", >!;, ,lfredo M. 2elayo as assignees of the insolvent Commercial ,irlines, Inc.,
instituted an action against 6hell Company of the Philippine Islands, @td., in the Court of First Instance
of Manila for injunction and damages $Civil Case <o. +>++%. An Actober )+, >', a complaint in
intervention #as filed by ,lfonso 6ycip, Paul 6ycip, and Fe3 Trading Corporation, and on <ovember
!, >', by Mabasa L Company.
,fter trial #herein plaintiff presented evidence in his behalf, but none in behalf of intervenors, the
court rendered decision dismissing plaintiff/s complaint as #ell as those filed by the intervenors. An
March =, >'!, counsel for plaintiff filed a notice of appeal, appeal bond, and record on appeal in
behalf only of plaintiff even if they also represent the intervenors, #hich in due time #ere approved,
the Court instructing its cler3 to for#ard the record on appeal to the 6upreme Court together #ith all
the evidence presented in the case. This instruction #as actually complied #ith.
An ,ugust =, >'!, the 5eputy Cler3 of the 6upreme Court notified counsel of plaintiff that the
record as #ell as the evidence have already been received and that they should file their brief #ithin !'
days from receipt of the notice. An <ovember ), >'!, counsel filed their brief for appellants. An
<ovember +, >'!, or " months after the judgment had become final as against the intervenors, and !
days after counsel for appellants had submitted the latter/s brief, counsel for intervenors filed #ith the
6upreme Court a petition for correction of the record on appeal in order to enable them to insert therein
the names of the intervenors as appellants, the petition being based, among others, on the ground that
the omission of the names of the intervenors in said record on appeal #as due to the mista3e of the
typist #ho prepared it #hile the attorney in charge #as on vacation. The petition #as vigorously
opposed by counsel for defendant, contending that the same #ould serve no purpose, #hatsoever
considering that the intervenors had not presented any evidence in support of their claim, aside from
the fact that the alleged absence of the attorney of the intervenors cannot constitute a justification for
the alleged omission of the intervenors as appellants. An <ovember ), >'!, the Court denied the
petition. Counsel intervenors moved for a reconsideration of the order, but the same #as denied.
An <ovember >, >'!, counsel for intervenors filed #ith the lo#er court a petition for relief under
Eule =; of the Eules of Court, #herein he reiterated the same grounds they alleged in the petition for
correction filed by them in the 6upreme Court, #hich petition #as denied on <ovember )", >'!, for
having been filed outside the reglementary period fi*ed in said Eule =;. Counsel filed a motion for
reconsideration, #hich #as again denied, the Court stating that &no judgment or order has been
rendered, nor any other proceeding ta3en by this Court on the right of the intervenors to appeal.&
An 5ecember )(, >'!, counsel filed once more a motion to amend the record on appeal based on
grounds identical #ith those alleged in the petition for correction filed before the 6upreme Court. An
5ecember )", >'!, the lo#er court denied the motion. An Canuary +, >'', counsel filed a petition for
relief from this last order entered on 5ecember )", >'!, to #hich counsel for defendant filed an
opposition. An February ', >'', hearing #as had on both the petition for relief and the opposition, and
on February >, >'', the petition #as denied on the ground that the case is already before the 6upreme
Court on appeal. It is from this order that the counsel for intervenors has ta3en the appeal no# before
us.
The instant appeal has no merit.
To begin #ith, the only remedy #hich appellants no# see3 in this appeal is the inclusion of the
intervenors as appellants in the appeal from the decision rendered in the main case, but this remedy has
already been denied t#ice by this Court, first, in its resolution of <ovember ), >'! denying their
petition for correction of the record on appeal, and, second, in denying their motion for reconsideration
of said resolution. It should be noted that the grounds relied upon in this appeal are the same grounds
alleged in said petition for correction.
In the second place, the intervenors have no right or reason to appeal from the decision in the main
case, it appearing that they did not introduce any evidence during the trial in support of their complaint,
#hich sho#s that their appeal #ould be merely pro-for'a. ,nd, in any event, they made the attempt to
amend the record on appeal seven =>? 'onths after the decision had become final against them.
In the third place, the intervenors have no right or reason to file a petition for relief under Eule =; of
the Eules of Court from the order of the lo#er court issued on 5ecember )", >'!, for the reason that
the same #as entered upon a motion filed by them. Indeed they cannot reasonably assert that the order
#as entered against them through fraud, accident, mista3e, or negligence. The fraud mentioned in Eule
=; is the fraud committed by the adverse party and certainly the same cannot be attributed to the Court.
Finally, it appears that the main case has already been decided by this Court on the merits on Actober
=, >'+, reversing the decision of the lo#er court and a#arding damages to plaintiff, #hich apparently
is the very purpose #hich the intervenors see3 to accomplish in joining the appeal as co-appellants.
This appeal, therefore, has already become moot.
9herefore, the order appealed from is affirmed, #ith costs against appellants.
aras, C.*., Ben".on, adilla, $onte'ayor, !abrador, Concepcion, 0ndencia and Barrera, **., concur.
G.R. No. 115942 S)%t);6), 27, 1995
FILIN/EST CREDIT CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS $!( SPOUSES EDIL-ERTO $!( MARCIANA TADIAMAN, respondents.
DA/IDE, 'R., J.:
This petition for revie* on certiorari seeks to set aside the decision of the Court of $ppeals in C$.H.&. CG ?o. ;04;1
1
affir"in+ in toto the decision
of the &e+ional Trial Court &TC) of %an !ernando Pa"pan+a), 2ranch '6, in Civil Case ?o. 6B99.
2
The antecedent facts are su""ari0ed by the Court of $ppeals as follo*sA
8efendants.appellees, spouses 9dilberto and >arciana Tadia"an, residents of Cabanatuan
City, purchased a 10.*heeler #0usu car+o truck fro" 7ordan 9nterprises, #nc., in Jue0on City, in
install"ents. %aid spouses e-ecuted a pro"issory note for P196,650.00 payable in 4' "onthly
install"ents in favor of 7ordan 9nterprises, #nc., and a Chattel >ort+a+e over the "otor vehicle
purchased to secure the pay"ent of the pro"issory note. 7ordan 9nterprises, #nc. assi+ned its
ri+hts and interests over the said instru"ents to !ilinvest !inance and 3easin+ Corporation,
*hich in turn assi+ned the" to plaintiff.appellant !ilinvest Credit Corporation.
%ubse=uently, the spouses Tadia"an defaulted in the pay"ent of the install"ents due on the
pro"issory note, and plaintiff.appellant filed an action for replevin and da"a+es a+ainst the"
*ith the court belo*. @pon "otion of the plaintiff.appellant, a *rit of replevin *as issued, and the
truck *as sei0ed in the province of #sabela, by persons *ho represented the"selves to be
special sheriffs of the court, but *ho turned out to be e"ployees of the plaintiff.appellant. The
truck *as brou+ht by such persons all the *ay back to >etro >anila.
Thereafter, defendant spouses filed a counterbond, and the lo*er court ordered the return of the
truck. This *as not i""ediately i"ple"ented because the defendant spouses *ere "et *ith
delayin+ tactics of the plaintiff.appellant, and *hen they finally recovered the truck, they found
the sa"e to be Ccannibali0edC. This *as +raphically recounted in the report 9-hibit C;C) of
8eputy %heriff $nastacio 8i0on, *ho assisted the spouses in recoverin+ the vehicle, e-cerpts of
*hich are as follo*sA
On !ebruary 1', 195;, the undersi+ned contacted >r. Gillanueva, 2ranch
>ana+er of the !#3#?G9%T at 2o. 8olores, %an !ernando, Pa"pan+a and he
+ave the infor"ation that the said #su0u Car+o Truck, sub/ect of the aforesaid
Court Order, *as already delivered to their "ain +ara+e at 2o. Talon, 3as PiRasF
>etro >anila. >r. Gillanueva further told the undersi+ned that in order to
effectively enforce the afore"entioned Court Order, the undersi+ned should
discuss the "atter *ith >r. Telesforo 7un) #sidro, Collection in.char+e, and >r.
Haspar $ntonio delos %antos, Gice President for 2ranch $d"inistration of the
!#3#?G9%T "ain office at >akati, >etro >anila.
On !ebruary 15, 195;, defendant >arciana Tadia"an, $tty. 2enites and the
undersi+ned contacted >essrs. Haspar $ntonio delos %antos and Telesforo
7un) #sidro at the "ain office, !#3#?G9%T at Paseo de &o-as, >akati, >etro
>anila and *e discussed the s"ooth retakin+ of possession by the defendants
of the 10.*heeler #su0u Car+o Truck *ith "otor ?o. 9 140.440'1, %erial ?o.
%P> (1016'56'. >essrs. 8elos %antos and #sidro alternatively ar+ued that the
Traveler,s #nsurance Co"pany is one of the black listed #nsurance fir", so "uch
so, it is only the co"pany,s la*yer *ho can direct the delivery of the above.cited
Car+o Truck to us. They told us to *ait for the arrival of their 3a*yer at BA'0
p."., and *e a+reed that in the "eanti"e that their la*yer is not around, the
said vehicle *ould not be transferred to any other place.
Ca"e BA;0 P.>., but the co"pany,s la*yer never arrived and *e *ere told to +o
back on !ebruary 41, 195;. >r. delos %antos finally told us that the co"pany *ill
not deliver to us the said Car+o Truck until and after their co"pany la*yer *ould
say so.
On !ebruary 19, 195;, >r. !elicisi"o <o+aldo, $tty. 2enites, defendant
>arciana Tadia"an, three police"en of 3as Pinas, >etro >anila, and the
undersi+ned *ent directly to the !#3#?G9%T +ara+e at 2o. Talon, 3as Pinas,
>etro >anila and there contracted >r. #s"ael Pascual, Custodian of all
repossessed vehicles of the said co"pany, and >r. Pedro Hervacio, %ecurity
Huard of the co"pany assi+ned by the $llied #nvesti+ation 2ureau at 6th !loor,
&a"on %antos 2ld+. They told us that the 10.*heeler Car+o Truck sub/ect of the
above.cited court order is not one of the vehicles listed in their in.co"in+ and
out.+oin+ led+er books and they told us to e-a"ine their books.
8efendant >arciana Tadia"an told >essrs. Pedro Hervacio and #s"ael Pascual
that she sa* the above."entioned Car+o.Truck last !ebruary 1', 195; at the
end corner of the +ara+e. $nd for that purpose she re=uested us, includin+ >r.
Pascual and the %ecurity Huard, to inspect the site *here the said truck *as
supposed to have been placed *hen she for the first ti"e sa* it on !ebruary 1',
195;.
@ne-pectedly, she sa* and pointed to us on the site oil leaks on the +round
*hich she believed ca"e fro" the vehicle *e *ere lookin+ for. 6e also sa* skid
"arks of tires of a truck startin+ fro" the site *here the car+o truck *as
previously placed as pointed to by defendant >arciana Tadia"an up to around
40 "eters before reachin+ the +ate of the co"pound. The other skid larks of
tires of a truck *as also seen on a portion of a road leadin+ to a co"pound
o*ned by other person.
>r. Hervacio and Pascual stron+ly insisted that they do not kno* the
*hereabouts of the said Car+o Truck. The undersi+ned re=uested the Police"en
of 3as Pinas, >etro >anila, $tty. 2enites and defendant >arciana Tadia"an to
see for ourselves the road leadin+ to a co"pound o*ned by another fir", about
1N; of the 3en+th of *hich road is co"pletely blocked by a bi+ and tall buildin+. #t
*as at this portion *here the sub/ect Car+o Truck *as placed.
>r. #s"ael Pascual called their "ain office, !#3#?G9%T, by telephone about the
discovery of the *hereabouts of said car+o truck by the undersi+ned. 8efendant
>arciana Tadia"an to
>r. Pascual that there *ere "issin+ parts and that other parts of the truck *ere
co"pletely chan+ed *ith *orn.out spare parts.
>r. Pascual told the undersi+ned that he *ill only affi- his si+nature on the
ackno*led+"ent receipt, belo* the line CH#G9? 2IC, if the "issin+ parts and
replaced parts *ere not "entioned in said receipt.
#t *as because of the said actuations of the plaintiff.appellant that the defendants.appellee DsicE
filed a counterclai" for da"a+es. . . .
8
$fter trial, the trial court rendered a decision the dispositive portion of *hich reads as follo*sA
6<9&9!O&9, /ud+"ent is hereby rendered on the "ain action, in favor of plaintiff and a+ainst
defendants, orderin+ the latter, /ointly and severally, to pay the plaintiff the follo*in+ su"sA
a) The su" of P55,;;;.;4 *hich is the balance of the pro"issory note as of
%epte"ber 46, 1954, *ith interest thereon at 1'L per annum fro" said date.
b) The su" e=uivalent to 4BL of the a"ount sued upon, as and for attorney,s
fees, that is P55,;;;.;4 plus the stipulated interestF and
c) The costs of suit.
On the Counterclai"A
Plaintiff not havin+ successfully rebutted the defendants, evidence respectin+ da"a+es caused
to the" by virtue of the ille+al sei0ure of the property, and hidin+ the truck in so"e other place
not their +ara+e, fei+nin+ kno*led+e that the sa"e had been recorded in their inco"in+ led+er
books, the Ccannibali0in+C done *hile the truck *as in the custody of plaintiff,s +ara+e, the
frustrations *hich the defendants had to under+o for t*o *eeks before the truck *as finally
placed in the hands of %heriff 8i0on, all point to the liability of plaintiff for its failure intentionally
or other*ise Cto observe certain nor"s that sprin+ fro" the fountain of +ood conscience and
+uide hu"an conduct to the end that la* "ay approach its supre"e ideal, *hich is the s*ay and
do"inance of /ustice.
6<9&9!O&9, /ud+"ent is rendered in favor of counter.clai"ants defendants and a+ainst
plaintiff, orderin+ the latter to pay to the defendants the follo*in+ su"sA
1) $ctual da"a+es representin+ lost spare parts *hile in the custody of plaintiff
in its +ara+e bein+ hidden fro" defendants, in the su" of PB0,000.00F
4) PB0,000.00 as "oral da"a+esF
;) P40,000.00 as e-e"plary da"a+esF
') P40,000.00 as attorney,s feeF and
B) Proportionate part of the costs ad/ud+ed a+ainst plaintiff.
%O O&89&98.
9
Petitioner !ilinvest Credit Corporation hereinafter 0i"invest) appealed that portion of the /ud+"ent on the
counterclai" to the Court of $ppeals C$.H.&. CG ?o. ;04;1) and assi+ned the follo*in+ errors of the lo*er
courtA
#
T<9 T&#$3 CO@&T 9&&98 #? $6$&8#?H 8$>$H9%F $CT@$3, >O&$3, 919>P3$&I $?8
$TTO&?9I,% !99% $?8 P&OPO&T#O?$T9 P$&T O! T<9 CO%T% #? !$GO& O! T<9
89!9?8$?T% #? T<9#& CO@?T9&.C3$#>% #? T<9 $2%9?C9 O! $?I $CT#O?$239 3O%%
%@%T$#?98 2I T<9> !O& #T 6$% T<9 89!9?8$?T% 6<O G#O3$T98 T<9#&
P&O>#%%O&I ?OT9 $?8 C<$TT93 >O&TH$H9 6#T< T<9 P3$#?T#!!.
##
T<9 T&#$3 CO@&T 9&&98 #? <O38#?H T<$T T<9 P3$#?T#!! O& $?I O! #T%
&9P&9%9?T$T#G9% <$8 ?O &#H<T TO T$K9 T<9 >O&TH$H98 P&OP9&TI $!T9& T<9
2&9$C< O! T<9 CO?8#T#O?% #? T<9 P&O>#%%O&I ?OT9 $?8 C<$TT93 >O&TH$H9
2I T<9 89!9?8$?T%.
5
#n its decision of 46 >ay 199', the Court of $ppeals affir"ed in toto the decision of the trial court. #t found no
"erit in the appeal. ThusA
The plaintiff.appellant ar+ues that it had the ri+ht to sei0e the truck fro" the "o"ent that the
defendants.appellees defaulted in the pay"ent of the "onthly install"ents, and to institute an
action for replevin preli"inary to effectin+ a foreclosure of the property "ort+a+ed e-tra/udicially.
The plaintiff.appellant "isses the point entirely. #n the first place, it has not been held liable for
filin+ an action for replevin in order to recover possession of the truck prior to its foreclosure, but
for the "anner in *hich it carried out the sei0ure of the vehicle. #t is ironic that, in spite of
plaintiff.appellant,s apparent reco+nition of the necessity of le+al "eans for the recovery of the
truck, in the end, it utili0ed ille+al "eans in the actual sei0ure of the vehicle by havin+ its
e"ployees pose as special a+ents of the court in effectin+ the sa"e. Plaintiff.appellant even
*ent to the e-tent of askin+ the appoint"ent of a special sheriff to enforce the order of sei0ure,
but still had the truck sei0ed by its o*n people instead. #t is as if the plaintiff.appellant utili0ed the
court only to clothe its e"ployees *ith apparent authority to sei0e the vehicle concerned.
#n the second place, plaintiff.appellant *as held liable for hidin+ the truck and "akin+ it difficult
for the defendants.appellees to recover the sa"e. 8efendants.appellDeesE *ere able to have the
*rit of sei0ure =uashed on the basis of a counterbond. Plaintiff.appellant should have been the
first to obey the order for the return of the sei0ed truck, considerin+ its avo*ed adherence to la*
and order. $nd yet, it "ade it difficult for the defendants.appellees to actually recover the vehicle,
as reported by the deputy sheriff above.
#n the third place, there is unrebutted evidence that the truck *as Ccannibali0edC *hile in the
custody of the plaintiff.appellant. The latter ar+ues that such evidence is not credible, because, if
the truck *as stripped of vital parts, it could not have been driven by the defendants.appellees
all the *ay back to Cabanatuan City. Plaintiff.appellant conveniently overlooks the testi"ony of
defendant.appellee >rs. Tadia"an that they had to buy the "issin+ parts in order to "ake the
truck run t.s.n., p. '0, October 4, 1956, 9-hibits C,9C, C10C and C11C).
3
!ilinvest no* co"es to us alle+in+ that the Court of $ppealsA
a) . . . 89C#898 $ J@9%T#O? O! %@2%T$?C9 #? $ 6$I ?OT #? $CCO&8 6#T< 3$6 $?8
T<9 $PP3#C$239 89C#%#O?% O! T<#% <O?O&$239 CO@&T 6<9? #T &9G9&%98 T<9
89C#%#O? O! T<9 &9H#O?$3 T&#$3 CO@&T O! >$?#3$, 2&$?C< 9F
b) . . . $CT98 6#T< H&$G9 $2@%9 O! 8#%C&9T#O? $>O@?T#?H TO 3$CK O!
7@&#%8#CT#O? 6<9? #T %@%T$#?98 T<9 9&&O?9O@% 89C#%#O? O! T<9 <O?O&$239
&9H#O?$3 T&#$3 CO@&T 2&$?C< '6 O! %$? !9&?$?8O, P$>P$?H$F
c) . . . $CT98 6#T< H&$G9 $2@%9 O! 8#%C&9T#O? $?8 CO?T&$&I TO 91#%T#?H 3$6
$?8 7@&#%P&@89?C9 6<9? D#TE %@%T$#?98 T<9 %P9C@3$T#G9 !#?8#?H O! T<9 &TC
T<$T T<9 P9T#T#O?9& CC$??#2$3#:98C T<9 >O&TH$H98 G9<#C39F
d) . . . 9&&98 H	GO@%3I 6<9? #T 91O?9&$T98 P&#G$T9 &9%PO?89?T% !&O>
P$I#?H T<9 P9T#T#O?9& O? T<9 3$TT9&,% 39H#T#>$T9 C3$#>% @?89& T<9
CO>P3$#?T P$&T#C@3$&3I O? T<9 @?P$#8 P&O>#%%O&I ?OT9 >$89 2I T<9
P&#G$T9 &9%PO?89?T%F
e) . . . $CT98 CO?T&$&I TO 3$6 6<9? #T #H?O&98 T<9 P3$#? $8>#%%#O?% #? T<9
$?%69& $T P$&$H&$P< 4, O ;, P$H9 1) O! T<9 89!9?8$?T% P&#G$T9
&9%PO?89?T%) T<$T T<9I <$G9 8@3I 919C@T98 $ P&O>#%%O&I ?OT9 %9C@&98
2I $ 8998 O! C<$TT93 >O&TH$H9 $?8 T<$T T<9 P&#G$T9 &9%PO?89?T% G#O3$T98
T<9 T9&>% O! T<9 P&O>#%%O&I ?OT9 #? !$#3#?H TO P$I T<9 #?%T$33>9?T% 8@9
T<9&9O? !O& ?OG. 1B, 1951 $?8 T<9 %@2%9J@9?T 9 #?%T$33>9?T% O& @P TO
$@H@%T 1B, 1954F
f) . . . 9&&98 #? &9!@%#?H TO $PP3I T<9 T9&>% $?8 CO?8#T#O?% O! T<9
P&O>#%%O&I ?OT9 $?8 T<9 8998 O! C<$TT93 >O&TH$H9 %#H?98 2I T<9 PO?C9%
C$% T<9 3$6 29T699? T<9 P$&T#9%C TO T<9 CO?T&$CT %@279CT O! T<9 %@#T #?
T<9 &TC.
7
$dditionally, !ilinvest "aintains thatA
+) T<9&9 #% ?O P&OO! TO %@%T$#? T<9 $6$&8 O! >O&$3 8$>$H9% !O& PB0,000.00
$CCO&8#?H3I T<9&9 #% ?O 2$%#% !O& T<9 $6$&8 O! 919>P3$&I 8$>$H9%.
5
6e +ave due course to the petition and re=uired the parties to sub"it their respective "e"oranda after the filin+
of the co""ent to the petition by the private respondents and of the reply thereto by !ilinvest. The parties
subse=uently filed their "e"oranda *hich "erely reiterated the ar+u"ents in their respective initiatory
pleadin+s.
The only relevant issue in this petition is *hether or not the Court of $ppeals co""itted reversible error in
dis"issin+ !ilinvest,s appeal fro" the decision of the trial court on the private respondents, counterclai" and in
affir"in+ in toto the said decision. The first +round raised herein by !ilinvest is baseless since the discussions or
ar+u"ents in !ilinvest,s petition and "e"orandu" fail to disclose *hat the decision of 2ranch 9 of the &TC of
>anila is all about. %o is the fourth +round, for, the unappealed portion of the trial court,s decision did in fact
order the private respondents to pay !ilinvest the unpaid balance of the pro"issory note, *ith interest and
attorney,s fees. $ll the other +rounds are dee"ed *aived for not havin+ been raised in the appeal to the Court of
$ppeals. #n any event, !ilinvest,s dis=uisitions on such irrelevant issues are confounded.
$s to the sole issue defined above, the Court of $ppeals correctly ruled that !ilinvest is liable for da"a+es not
because it co""enced an action for replevin to recover possession of the truck prior to its foreclosure, but
because of the manner it carried out the sei0ure of the vehicle. %ections ; and ', &ule 60 of the &ules of Court
are very clear and direct as to the procedure for the sei0ure of property under a *rit of replevin, thusA
%ec. ;. Order. M @pon the filin+ of such affidavit and bond *ith the clerk or /ud+e of the court in
*hich the action is pendin+, the /ud+e of such court shall issue an order describin+ the personal
property alle+ed to be *ron+fully detained, and re=uirin+ the sheriff or other proper officer of the
court forthwith to ta9e such propert1 into his custod1.
%ec. '. .ut1 of the officer. M @pon receivin+ such order the officer "ust serve a copy thereof on
the defendant to+ether *ith a copy of the application, affidavit and bond, and "ust forthwith ta9e
the propert1, if it be in the possession of the defendant or his a$ent, and retain it in his
custod1. . . . e"phasis supplied)
#n the instant case, it *as not the sheriff or any other proper officer of the trial court *ho i"ple"ented the *rit of
replevin. 2ecause it *as a*are that no other person can i"ple"ent the *rit, !ilinvest asked the trial court to
appoint a special sheriff. Iet, it used its o*n e"ployees *ho "isrepresented the"selves as deputy sheriffs to
sei0e the truck *ithout havin+ been authori0ed by the court to do so. !ilinvest /ustified its sei0ure by citin+ a
state"ent in Bachrach Motor #o. vs. &ummers,
9
to *it, Cthe only restriction on the "ode by *hich the
"ort+a+ee shall secure possession of the "ort+a+ed property after breach of condition is that he "ust act in an
orderly "anner and *ithout creatin+ a breach of the peace, sub/ectin+ hi"self to an action for trespass.C
This /ustification is "isplace and "isleadin+ for 2achrach itself had ruled that if a "ort+a+ee cannot obtain
possession of a "ort+a+ed property for its sale on foreclosure, it "ust brin+ a civil action either to recover such
possession as a preli"inary step to the sale or to obtain /udicial foreclosure. Pertinent portions of Bachrach read
as follo*sA
6here, ho*ever, debtor refuses to yield up the property, the creditor "ust institute an action,
either to effect a /udicial foreclosure directly, to secure possession as a preli"inary to the sale
conte"plated in the provision above =uoted. <e cannot la*fully take the property by force
a+ainst the *ill of the debtor. @pon this point the $"erican authorities are even "ore
har"onious that they are upon the point that the creditor is entitled to possession. $s *as said
"ay years a+o by the *riter of this opinion in a "ono+raphic article contributed to an
encyclopedic le+al treatise, Cif possession cannot be peaceably obtained the "ort+a+ee "ust
brin+ an action.C Trust 8eeds and Po*er of %ale >ort+a+es, 45 $". O 9n+. 9ncyc. of 3a*, 4d
ed., (5;.) #n the $rticle of Chattel >ort+a+es, in Corpus 7uris, *e find the follo*in+ state"ent of
the la* on the sa"e pointA CThe only restriction on the "ode by *hich the "ort+a+ee shall
secure possession of the "ort+a+ed property after breach of condition is that he "ust act in an
orderly "anner and *ithout creatin+ a breach of the peace, sub/ectin+ hi"self to an action to
trespass. 11 #.-., B60F see a"so B &.C.3., '64.)
The reason *hy the la* does not allo* the creditor to possess hi"self of the "ort+a+ed property
*ith violence and a+ainst the *ill of the debtor is to be found in the fact that the creditor,s ri+ht of
possession is conditioned upon the fact of default, and the e-istence of this fact "ay naturally be
the sub/ect of controversy. The debtor, for instance, "ay clai" in +ood faith, and ri+htly or
*ron+ly, that the debt is paid, or that for so"e other reason the alle+ed default is none-istent.
<is possession in this situation is as fully entitled to protection as that of any other person, and in
the lan+ua+e of article ''6 of the Civil Code he "ust be respected therein. To allo* the creditor
to sei0e the property a+ainst the *ill of the debtor *ould "ake the for"er to a certain e-tent both
/ud+e and e-ecutioner in his o*n cause M a thin+ *hich is inad"issible in the absence of
une=uivocal a+ree"ent in the contract itself or e-press provision to that effect in the statute.
#t *ill be observed that the la* places the responsibility of conductin+ the sale upon Ca public
officerFC and it "i+ht be supposed that an officer, such as the sheriff, can sei0e the property
*here the creditor could not. This su++estion is, *e think, *ithout force, as it is "anifest that the
sheriff or other officer proceedin+ under the authority of the lan+ua+e already =uoted fro"
section 1' of the Chattel >ort+a+e 3a*, beco"es pro hac vice the "ere a+ent of the creditor.
There is nothin+ in this provision *hich creates a specific duty on the part of the officer to sei0e
the "ort+a+ed propertyF and no intention on the part of the la*."akin+ body to i"pose such a
duty can be i"plied. The conclusion is clear that for the recovery of possession, *here the ri+ht
is disputed, the creditor "ust proceed alon+ the usual channels by action in court. 6hether the
sheriff, upon bein+ inde"nified by the creditor, could safely proceed to take the property fro" the
debtor, is a point upon *hich *e e-press no opinion. . . .
2ut *hatever conclusion "ay be dra*n in the pre"ises *ith respect to the true nature of a
chattel "ort+a+e, the result "ust in this case be the sa"eF for *hether the "ort+a+ee beco"es
the real o*ner of the "ort+a+ed property M as so"e suppose M or ac=uires only certain ri+hts
therein, it is none the less clear that he has after default the ri+ht of possessionF thou+h it cannot
be ad"itted that he "ay take the la* into his o*n hands and *rest the property violently fro"
the possession of the "ort+a+or. ?either can he do throu+h the "ediu" of a public officer that
*hich he cannot directly do hi"self. The conse=uence is that in such case the creditor "ust
either resort to a civil action to recover possession as a preli"inary to a sale, or preferably he
"ay brin+ an action to obtain a /udicial foreclosure in confor"ity, so far as *ith the provisions of
the Chattel to >ort+a+e 3a*.
14
&eplevin is, of course, the appropriate action to recover possession preli"inary to the e-tra/udicial foreclosure of
a chattel "ort+a+e. !ilinvest did in fact institute such an action and obtained a *rit of replevin. $nd, by filin+ it,
!ilinvest ad"itted that it cannot ac=uire possession of the "ort+a+ed vehicle in an orderly or peaceful "anner.
$ccordin+ly, it should have left the enforce"ent of the *rit in accordance *ith &ule 60 of the &ules of Court
*hich it had voluntarily invoked.
Parenthetically, it "ust be observed that the trial court erred in holdin+ that the action for replevin *as Cnot in
order as D!ilinvestE is not the o*ner of the property %ec, 4 par. a) &ule 60).C
11
#t is not only the o*ner *ho can
institute a replevin suit. $ person Centitled to the possessionC of the property also can, as provided in the sa"e
para+raph cited by the trial court, *hich readsA
%ec. 4. 'ffidavit and bond. M @pon applyin+ for such order the plaintiff "ust sho* . . .
a) That the plaintiff is the o*ner of the property clai"ed, particularly describin+
it, or is entit"ed to the possession thereof@ . . . e"phasis supplied)
@pon the default by the "ort+a+or in his obli+ations, !ilinvest, as a "ort+a+ee, had the ri+ht to the
possession of the property "ort+a+ed preparatory to its sale in a public auction.
12
<o*ever, for
e"ployin+ subterfu+e in sei0in+ the truck by "isrepresentin+ its e"ployees as deputy sheriffs and then
hidin+ and cannibali0in+ it, !ilinvest co""itted bad faith in violation of $rticle 19 of the Civil Code *hich
providesA
9very person "ust, in the e-ercise of his ri+hts and in the perfor"ance of his duties, act *ith
/ustice, +ive everyone his due, and observe honesty and +ood faith.
#n co""on usa+e, $ood faith is ordinarily used to describe that state of "ind denotin+ honesty of purpose,
freedo" fro" intention to defraud, and, +enerally speakin+, "eans bein+ faithful to one,s duty or obli+ation.
18
#t
consists of the honest intention to abstain fro" takin+ an unconscionable and unscrupulous advanta+e of
another.
19
This leaves us to the issue of da"a+es and attorney,s fees.
#n their ans*er *ith counterclai", the private respondents asked for a) actual da"a+es of PB0,000.00 for the
spare parts found "issin+ after their recovery of the truck and another PB0,000.00 for unearned profits due to
the failure to use the truck in their rice"ill businessF b) "oral da"a+es of PB0,000.00 for Cthe "ental an+uish,
serious an-iety, physical sufferin+, *ounded feelin+s, social hu"iliation, "oral shock, sleepless ni+hts and other
si"ilar in/uryC *hich they suffered as a Cpro-i"ate result of the Dpetitioner,s ille+al, *ron+ful and unla*ful actsCF
c) no"inal da"a+es of P;0,000.00F d) e-e"plary da"a+es of P40,000.00F and e) attorney,s fees of
P40,000.00 *hich they incurred Cas a direct result of Dpetitioner,sE ille+al and un*arranted actuations and in
connection *ith the defense of this action.C
15
$s to actual da"a+es, the petitioner ad"its that per 9-hibits C1,C C9,C and C10C of the private respondents, only
the su" of P;;,444.00 M and not PB0,000.00 M *as Csupposedly spent for the alle+ed lost spare parts.C
13
The
petitioner "ay thus be held liable only for such a"ount for actual or co"pensatory da"a+es.
$nent the "oral da"a+es, the trial court ruled that the acts of the petitioner *ere in total disre+ard of $rticles 19,
40, and 41 of the Civil Code.
17
#t added that the petitioner had not only caused actual da"a+es in lost earnin+s,
but had also caused the private respondents to suffer indi+nities at the hands of the petitioner,s personnel in
hidin+ the truck in =uestion, "isleadin+ the", and "akin+ the" *ork for the release of the truck for about t*o
*eeks, thereby /ustifyin+ the a*ard of "oral da"a+es alon+ *ith the e-e"plary and other da"a+es in favor of
the private respondents.
15
6e a+ree *ith this findin+ of the trial court. The petitioner,s acts clearly fall *ithin the conte"plation of $rticles 19
and 41 of the Civil Code.
19
The acts of fraudulently takin+ the truck, hidin+ it fro" the private respondents, and
re"ovin+ its spare parts sho* nothin+ but a *illful intention to cause loss to the private respondents that is
punctuated *ith bad faith and is obviously contrary to +ood custo"s. Thus, the private respondents are entitled
to the "oral da"a+es they prayed for, for under $rticle 4419 of the Civil Code, "oral da"a+es "ay be
recovered in cases involvin+ acts referred to in $rticle 41 of the sa"e Code.
The private respondents prayed for no"inal da"a+es of P;0,000.00 *hich the trial court did not a*ard the".
<avin+ failed to appeal this o"ission by the trial court, *e cannot "ake any"ore such a*ard at this point.
The a*ard of e-e"plary da"a+es is in order in vie* of the *anton, fraudulent, and oppressive "anner by *hich
the petitioner sou+ht to enforce its ri+ht to the possession of the "ort+a+ed vehicle. $rticle 44;4 of the Civil
Code providesA
#n contracts and *uasi.contracts, the court "ay a*ard e-e"plary da"a+es if the defendant
acted in a *anton, fraudulent, reckless, oppressive, or "alevolent "anner.
Of course, a plaintiff need not prove the actual e-tent of e-e"plary da"a+es, for its deter"ination is
addressed to the sound discretion of the court upon proof of the plaintiff,s entitle"ent to "oral,
te"perate, or actual or co"pensatory da"a+es. $rticle 44;' of the Civil Code thus provides in part as
follo*sA
6hile the a"ount of the e-e"plary da"a+es need not be proved, the plaintiff "ust sho* that he
is entitled to "oral, te"perate or co"pensatory da"a+es before the court "ay consider the
=uestion of *hether or not e-e"plary da"a+es should be a*arded. . . .
The a*ard for attorney,s fees "ust, ho*ever, be set aside. There is no =uestion that the petitioner filed in +ood
faith its co"plaint for replevin and da"a+es to protect its ri+hts under the pro"issory note and the chattel
"ort+a+e. That the private respondents had defaulted in its obli+ation under the pro"issory note thereby
authori0in+ the petitioner to seek enforce"ent of its clai" thereunder and proceed a+ainst the "ort+a+e of the
vehicle *as duly reco+ni0ed by the trial court by its /ud+"ent a+ainst the private respondents incorporated in the
first part of the dispositive portion. The private respondents did not appeal therefro". There *ould then be no
basis for a*ardin+ attorney,s fees in favor of the private respondents for *hatever physical sufferin+, "ental
an+uish, serious an-iety, bes"irched reputation, *ounded feelin+s, "oral shock, social hu"iliation, or any other
si"ilar in/ury they had suffered, even if proven, *ere only such as are usually caused to parties haled into court
as a defendant and *hich are not co"pensable, for the la* could not have "eant to i"pose a penalty on the
ri+ht to liti+ate.
24
6<9&9!O&9, the assailed /ud+"ent of the Court of $ppeals in C$.H.&. CG ?o. ;04;1 as *ell as that of the
&e+ional Trial Court of %an !ernando, Pa"pan+a, 2ranch '6 in Civil Case ?o. 6B99 on the counterclai" is
$!!#&>98, sub/ect to the "odifications abovestated. $s so "odified, the petitioner is hereby ordered to pay the
private respondents only the follo*in+A
a) actual da"a+es in the reduced a"ount of P;;,444.00F
b) "oral da"a+es in the a"ount of PB0,000.00F and
c) e-e"plary da"a+es in the a"ount of P40,000.00.
?o pronounce"ent as to costs.
%O O&89&98.
G.R. No. L-1462/ S!"'!:$!r )0, 1960
FRAN*IS*O HERMOSISIMA, petitioner,
vs.
THE HON. *O+RT OF APPEALS, ET AL., respondents.
-e"ino ,er'osisi'a for petitioner.
1.. Gabriel, *r. for respondents.
*ON*EP*ION, J.-
,n appeal by certiorari, ta3en by petitioner Francisco 0ermosisima, from a decision of Court of
,ppeals modifying that of the Court of First Instance of Cebu.
An Actober !, >'!, 6oledad Cagigas, hereinafter referred to as complaint, filed #ith said of her child,
Chris 0ermosisima, as natural child and moral damages for alleged breach of promise. Petitioner
admitted the paternity of child and e*pressed #illingness to support the latter, but denied having ever
promised to marry the complainant. :pon her motion, said court ordered petitioner, on Actober )",
>'!, to pay, by #ay of alimony pendente lite, P'(.(( a month, #hich #as, on February +, >'',
reduced to P=(.(( a month. In due course, later on, said court rendered a decision the dispositive part of
#hich reads.
908E8FAE8, judgment is hereby rendered, declaring the child, Chris 0ermosisima, as the
natural daughter of defendant, and confirming the order pendente lite, ordering defendant to pay
to the said child, through plaintiff, the sum of thirty pesos $P=(.((%, payable on or before the
fifth day of every month sentencing defendant to pay to plaintiff the sum of FA:E
T0A:6,<5 FI28 0:<5E85 P86A6 $P!,'((.((% for actual and compensatory damages1 the
sum of FI28 T0A:6,<5 P86A6 $P',(((.((% as moral damages1 and the further sum of FI28
0:<5E85 P86A6 $P'((.((% as attorney/s fees for plaintiff, #ith costs against defendant.
An appeal ta3en by petitioner, the Court of ,ppeals affirmed this decision, e*cept as to the actual and
compensatory damages and the moral damages, #hich #ere increased to P',+!.)' and P",(((.((,
respectively.
The main issue before us is #hether moral damages are recoverable, under our la#s, for breach of
promise to marry. The pertinent facts are.
Complainant 6oledad Cagigas, #as born in Culy >". 6ince >'(, 6oledad then a teacher in the
6ibonga Provincial 0igh 6chool in Cebu, and petitioner, #ho #as almost ten $(% years younger than
she, used to go around together and #ere regarded as engaged, although he had made no promise of
marriage prior thereto. In >', she gave up teaching and became a life insurance under#riter in the
City of Cebu, #here intimacy developed among her and the petitioner, since one evening in >'=, #hen
after coming from the movies, they had se*ual intercourse in his cabin on board MH2 &8scaMo,& to
#hich he #as then attached as apprentice pilot. In February >'!, 6oledad advised petitioner that she
#as in the family #ay, #hereupon he promised to marry her. Their child, Chris 0ermosisima, #as born
on Cune ", >'!, in a private maternity and clinic. 0o#ever, subse7uently, or on Culy )!, >'!,
defendant married one Eomanita Pere?. 0ence, the present action, #hich #as commenced on or about
Actober !, >'!.
Eeferring no# to the issue above referred to, it #ill be noted that the Civil Code of 6pain permitted the
recovery of damages for breach to marry. ,rticle != and !! of said Code provides.
,ET. !=. , mutual promise of marriage shall not give rise to an obligation to contract marriage.
<o court shall entertain any complaint by #hich the enforcement of such promise is sought.
,ET. !!. If the promise has been in a public or private instrument by an adult, or by a minor
#ith the concurrence of the person #hose consent is necessary for the celebration of the
marriage, or if the banns have been published, the one #ho #ithout just cause refuses to marry
shall be obliged to reimburse the other for the e*penses #hich he or she may have incurred by
reason of the promised marriage.
The action for reimbursement of e*penses to #hich the foregoing article refers must be brought
#ithin one year, computed from the day of the refusal to celebrate the marriage.
Inasmuch as these articles #ere never in force in the Philippines, this Court ruled in %e *esus vs.
Sy/uia $'; Phil., ;++%, that &the action for breach of promises to marry has no standing in the civil la#,
apart from the right to recover money or property advanced . . . upon the faith of such promise&. The
Code Commission charged #ith the drafting of the Proposed Civil Code of the Philippines deem it best,
ho#ever, to change the la# thereon. 9e 7uote from the report of the Code Commission on said
Proposed Civil Code.
,rticles != and !! the Civil Code of ;;> refer to the promise of marriage. 4ut these articles
are not enforced in the Philippines. The subject is regulated in the Proposed Civil Code not only
as to the aspect treated of in said articles but also in other particulars. It is advisable to furnish
legislative solutions to some 7uestions that might arise relative to betrothal. ,mong the
provisions proposed are. That authori?ing the adjudication of moral damages, in case of breach
of promise of marriage, and that creating liability for causing a marriage engagement to be
bro3en.4a(ph@l.nAt
,ccordingly, the follo#ing provisions #ere inserted in said Proposed Civil Code, under Chapter I, Title
III, 4oo3 I thereof.
,rt. '+. , mutual promise to marry may be made e*pressly or impliedly.
,rt. '". ,n engagement to be married must be agreed directly by the future spouses.
,rt. ';. , contract for a future marriage cannot, #ithout the consent of the parent or guardian,
be entered into by a male bet#een the ages of si*teen and t#enty years or by a female bet#een
the ages of si*teen and eighteen years. 9ithout such consent of the parents or guardian, the
engagement to marry cannot be the basis of a civil action for damages in case of breach of the
promise.
,rt. '>. , promise to marry #hen made by a female under the age of fourteen years is not
civilly actionable, even though approved by the parent or guardian.
,rt. +(. In cases referred to in the proceeding articles, the criminal and civil responsibility of a
male for seduction shall not be affected.
,rt. +. <o action for specific performance of a mutual promise to marry may be brought.
,rt. +). ,n action for breach of promise to marry may be brought by the aggrieved party even
though a minor #ithout the assistance of his parent or guardian. 6hould the minor refuse to
bring suit, the parent or guardian may institute the action.
,rt. +=. 5amages for breach of promise to marry shall include not only material and pecuniary
losses but also compensation for mental and moral suffering.
,rt. +!. ,ny person, other than a rival, the parents, guardians and grandparents, of the affianced
parties, #ho cause a marriage engagement to be bro3en shall be liable for damages, both
material and moral, to the engaged person #ho is rejected.
,rt. +'. In case of breach of promise to marry, the party brea3ing the engagement shall be
obliged to return #hat he or she has received from the other as gift on account of the promise of
the marriage.
These article #ere, ho#ever, eliminated in Congress. The reason therefor are set forth in the report of
the corresponding 6enate Committee, from #hich #e 7uote.
The elimination of this Chapter is proposed. That breach of promise to marry is not actionable has been
definitely decide in the case of %e *esus vs. Sy/uia, '; Phil., ;++. The history of breach of promise suit
in the :nited 6tates and in 8ngland has sho#n that no other action lends itself more readily to abuse by
designing #omen and unscrupulous men. It is this e*perience #hich has led to the abolition of the
rights of action in the so-called 4alm suit in many of the ,merican 6tates.
6ee statutes of.
Florida >!' K pp. =!) K =!!
Maryland >!' K pp. "'> K "+)
<evada >!= K p. "'
Maine >! K pp. !( K !
<e# 0ampshire >! K p. ))=
California >=> K p. )!'
Massachusetts >=; K p. =)+
Indiana >=+ K p. ((>
Michigan >=' K p. )(
<e# For3 >='
Pennsylvania p. !'(
The Commission perhaps though that it has follo#ed the more progression trend in legislation
#hen it provided for breach of promise to marry suits. 4ut it is clear that the creation of such
causes of action at a time #hen so many 6tates, in conse7uence of years of e*perience are doing
a#ay #ith them, may #ell prove to be a step in the #rong direction. $Congressional Eecord,
2ol. I2, <o. ">, Thursday, May >, >!>, p. )=').%
The vie#s thus e*pressed #ere accepted by both houses of Congress. In the light of the clear and
manifest intent of our la# ma3ing body not to sanction actions for breach of promise to marry, the
a#ard of moral damages made by the lo#er courts is, accordingly, untenable. The Court of ,ppeals
said a#ard.
Moreover, it appearing that because of defendant-appellant/s seduction po#er, plaintiff-appellee,
over#helmed by her love for him finally yielded to his se*ual desires in spite of her age and
self-control, she being a #oman after all, #e hold that said defendant-appellant is liable for
seduction and, therefore, moral damages may be recovered from him under the provision of
,rticle ))>, paragraph =, of the ne# Civil Code.
,part from the fact that the general tenor of said ,rticle ))>, particularly the paragraphs preceding
and those follo#ing the one cited by the Court of ,ppeals, and the language used in said paragraph
strongly indicates that the &seduction& therein contemplated is the cri'e punished as such in ,rticle as
such in ,rticle ==" and ==; of the Eevised Penal Code, #hich admittedly does not e*ist in the present
case, #e find ourselves unable to say that petitioner is 'orally guilty of seduction, not only because he
is appro*imately ten $(% years younger than the complainant K #ho around thirty-si* $=+% years of
age, and as highly enlightened as a former high school teacher and a life insurance agent are supposed
to be K #hen she became intimate #ith petitioner, then a mere apprentice pilot, but, also, because, the
court of first instance found that, complainant &surrendered herself& to petitioner because,
&over#helmed by her love& for him, she 6(anted to bind6 6by havin" a fruit of their en"a"e'ent even
before they had the benefit of cler"y.&
The court of first instance sentenced petitioner to pay the follo#ing. $% a monthly pension of P=(.((
for the support of the child. $)% P!,'((, representing the income that complainant had allegedly failed
to earn during her pregnancy and shortly after the birth of the child, as actual and compensation
damages1 $=% P',(((, as moral damages1 and $!% P'((.((, as attorney/s fees. The Court of ,ppeals
added to the second item the sum of P,!.)' K consisting of P!!.)(, for hospitali?ation and
medical attendance, in connection #ith the parturiation, and the balance representing e*penses incurred
to support the child K and increased the moral damages to P",(((.((.
9ith the elimination of this a#ard for damages, the decision of the Court of ,ppeals is hereby
affirmed, therefore, in all other respects, #ithout special pronouncement as to cost in this instance. It is
so ordered.
aras, C.*., Ben".on, adilla, Bautista An"elo, !abrador, -eyes, *.B.!., Barrera, Gutierre. %avid,
aredes and %i.on, **., concur.
G.R. No. 97883 F)6,u$,& 19, 1998
GASHEM SHOO1AT -A1SH, petitioner,
vs.
HON. COURT OF APPEALS $!( MARILOU T. GON2ALES, respondents.
%ub"ic 'ttorne1As Office for petitioner.
#or"eto R. #astro for private respondent.
DA/IDE, 'R., J.:
This is an appeal by certiorari under &ule 'B of the &ules of Court seekin+ to revie* and set aside the 8ecision
1
of the respondent Court of
$ppeals in C$.H.&. CG ?o. 4'4B6 *hich affir"ed in toto the 16 October 19;9 8ecision of 2ranch ;5 3in+ayen)
of the &e+ional Trial Court &TC) of Pan+asinan in Civil Case ?o. 16B0;. Presented is the issue of *hether or
not da"a+es "ay be recovered for a breach of pro"ise to "arry on the basis of $rticle 41 of the Civil Code of
the Philippines.
The antecedents of this case are not co"plicatedA
On 4( October 195(, private respondent, *ithout the assistance of counsel, filed *ith the aforesaid trial court a
co"plaint
2
for da"a+es a+ainst the petitioner for the alle+ed violation of their a+ree"ent to +et "arried. %he
alle+es in said co"plaint thatA she is t*enty.t*o 44) years old, sin+le, !ilipino and a pretty lass of +ood "oral
character and reputation duly respected in her co""unityF petitioner, on the other hand, is an #ranian citi0en
residin+ at the 3o0ano $part"ents, Huili+, 8a+upan City, and is an e-chan+e student takin+ a "edical course at
the 3yceu" ?orth*estern Colle+es in 8a+upan CityF before 40 $u+ust 195(, the latter courted and proposed to
"arry herF she accepted his love on the condition that they *ould +et "arriedF they therefore a+reed to +et
"arried after the end of the school se"ester, *hich *as in October of that yearF petitioner then visited the private
respondent,s parents in 2aRa+a, 2u+allon, Pan+asinan to secure their approval to the "arria+eF so"eti"e in 40
$u+ust 195(, the petitioner forced her to live *ith hi" in the 3o0ano $part"entsF she *as a vir+in before she
be+an livin+ *ith hi"F a *eek before the filin+ of the co"plaint, petitioner,s attitude to*ards her started to
chan+eF he "altreated and threatened to kill herF as a result of such "altreat"ent, she sustained in/uriesF durin+
a confrontation *ith a representative of the baran+ay captain of Huili+ a day before the filin+ of the co"plaint,
petitioner repudiated their "arria+e a+ree"ent and asked her not to live *ith hi" any"ore andF the petitioner is
already "arried to so"eone livin+ in 2acolod City. Private respondent then prayed for /ud+"ent orderin+ the
petitioner to pay her da"a+es in the a"ount of not less than P'B,000.00, rei"burse"ent for actual e-penses
a"ountin+ to P600.00, attorney,s fees and costs, and +rantin+ her such other relief and re"edies as "ay be /ust
and e=uitable. The co"plaint *as docketed as Civil Case ?o. 16B0;.
#n his $ns*er *ith Counterclai",
8
petitioner ad"itted only the personal circu"stances of the parties as averred
in the co"plaint and denied the rest of the alle+ations either for lack of kno*led+e or infor"ation sufficient to
for" a belief as to the truth thereof or because the true facts are those alle+ed as his %pecial and $ffir"ative
8efenses. <e thus clai"ed that he never proposed "arria+e to or a+reed to be "arried *ith the private
respondentF he neither sou+ht the consent and approval of her parents nor forced her to live in his apart"entF he
did not "altreat her, but only told her to stop co"in+ to his place because he discovered that she had deceived
hi" by stealin+ his "oney and passportF and finally, no confrontation took place *ith a representative of the
baran+ay captain. #nsistin+, in his Counterclai", that the co"plaint is baseless and unfounded and that as a
result thereof, he *as unnecessarily dra++ed into court and co"pelled to incur e-penses, and has suffered
"ental an-iety and a bes"irched reputation, he prayed for an a*ard of PB,000.00 for "iscellaneous e-penses
and P4B,000.00 as "oral da"a+es.
$fter conductin+ a pre.trial on 4B 7anuary 1955, the trial court issued a Pre.Trial Order
9
e"bodyin+ the
stipulated facts *hich the parties had a+reed upon, to *itA
1. That the plaintiff is sin+le and resident sic) of 2aRa+a, 2u+allon, Pan+asinan, *hile the
defendant is sin+le, #ranian citi0en and resident sic) of 3o0ano $part"ent, Huili+, 8a+upan City
since %epte"ber 1, 195( up to the presentF
4. That the defendant is presently studyin+ at 3yceu" ?orth*estern, 8a+upan City, Colle+e of
>edicine, second year "edicine properF
;. That the plaintiff is sic) an e"ployee at >abuhay 3uncheonette , !ernande0 $venue,
8a+upan City since 7uly, 1956 up to the present and a sic) hi+h school +raduateF
'. That the parties happened to kno* each other *hen the "ana+er of the >abuhay
3uncheonette, 7ohhny &abino introduced the defendant to the plaintiff on $u+ust ;, 1956.
$fter trial on the "erits, the lo*er court, applyin+ $rticle 41 of the Civil Code, rendered on 16 October 1959 a
decision
5
favorin+ the private respondent. The petitioner *as thus ordered to pay the latter da"a+es and
attorney,s feesF the dispositive portion of the decision readsA
#? T<9 3#H<T of the fore+oin+ consideration, /ud+"ent is hereby rendered in favor of the
plaintiff and a+ainst the defendant.
1. Conde"nin+ sic) the defendant to pay the plaintiff the su" of t*enty thousand P40,000.00)
pesos as "oral da"a+es.
4. Conde"nin+ further the defendant to play the plaintiff the su" of three thousand P;,000.00)
pesos as atty,s fees and t*o thousand P4,000.00) pesos at sic) liti+ation e-penses and to pay
the costs.
;. $ll other clai"s are denied.
3
The decision is anchored on the trial court,s findin+s and conclusions that a) petitioner and private respondent
*ere lovers, b) private respondent is not a *o"an of loose "orals or =uestionable virtue *ho readily sub"its to
se-ual advances, c) petitioner, throu+h "achinations, deceit and false pretenses, pro"ised to "arry private
respondent, d) because of his persuasive pro"ise to "arry her, she allo*ed herself to be deflo*ered by hi", e)
by reason of that deceitful pro"ise, private respondent and her parents M in accordance *ith !ilipino custo"s
and traditions M "ade so"e preparations for the *eddin+ that *as to be held at the end of October 195( by
lookin+ for pi+s and chickens, invitin+ friends and relatives and contractin+ sponsors, f) petitioner did not fulfill
his pro"ise to "arry her and +) such acts of the petitioner, *ho is a forei+ner and *ho has abused Philippine
hospitality, have offended our sense of "orality, +ood custo"s, culture and traditions. The trial court +ave full
credit to the private respondent,s testi"ony because, inter a"ia, she *ould not have had the te"erity and
coura+e to co"e to court and e-pose her honor and reputation to public scrutiny and ridicule if her clai" *as
false.
7
The above findin+s and conclusions *ere culled fro" the detailed su""ary of the evidence for the private
respondent in the fore+oin+ decision, di+ested by the respondent Court as follo*sA
$ccordin+ to plaintiff, *ho clai"ed that she *as a vir+in at the ti"e and that she never had a
boyfriend before, defendant started courtin+ her /ust a fe* days after they first "et. <e later
proposed "arria+e to her several ti"es and she accepted his love as *ell as his proposal of
"arria+e on $u+ust 40, 195(, on *hich sa"e day he *ent *ith her to her ho"eto*n of 2aRa+a,
2u+allon, Pan+asinan, as he *anted to "eet her parents and infor" the" of their relationship
and their intention to +et "arried. The photo+raphs 9-hs. C$C to C9C and their sub"arkin+s) of
defendant *ith "e"bers of plaintiff,s fa"ily or *ith plaintiff, *ere taken that day. $lso on that
occasion, defendant told plaintiffs parents and brothers and sisters that he intended to "arry her
durin+ the se"estral break in October, 195(, and because plaintiff,s parents thou+ht he *as
+ood and trusted hi", they a+reed to his proposal for hi" to "arry their dau+hter, and they
like*ise allo*ed hi" to stay in their house and sleep *ith plaintiff durin+ the fe* days that they
*ere in 2u+allon. 6hen plaintiff and defendant later returned to 8a+upan City, they continued to
live to+ether in defendant,s apart"ent. <o*ever, in the early days of October, 195(, defendant
*ould tie plaintiff,s hands and feet *hile he *ent to school, and he even +ave her "edicine at '
o,clock in the "ornin+ that "ade her sleep the *hole day and ni+ht until the follo*in+ day. $s a
result of this live.in relationship, plaintiff beca"e pre+nant, but defendant +ave her so"e
"edicine to abort the fetus. %till plaintiff continued to live *ith defendant and kept re"indin+ hi"
of his pro"ise to "arry her until he told her that he could not do so because he *as already
"arried to a +irl in 2acolod City. That *as the ti"e plaintiff left defendant, *ent ho"e to her
parents, and thereafter consulted a la*yer *ho acco"panied her to the baran+ay captain in
8a+upan City. Plaintiff, her la*yer, her +od"other, and a baran+ay tanod sent by the baran+ay
captain *ent to talk to defendant to still convince hi" to "arry plaintiff, but defendant insisted
that he could not do so because he *as already "arried to a +irl in 2acolod City, althou+h the
truth, as stipulated by the parties at the pre.trial, is that defendant is still sin+le.
Plaintiff,s father, a tricycle driver, also clai"ed that after defendant had infor"ed the" of his
desire to "arry >arilou, he already looked for sponsors for the *eddin+, started preparin+ for the
reception by lookin+ for pi+s and chickens, and even already invited "any relatives and friends
to the forthco"in+ *eddin+.
5
Petitioner appealed the trial court,s decision to the respondent Court of $ppeals *hich docketed the case as C$.
H.&. CG ?o. 4'4B6. #n his 2rief,
9
he contended that the trial court erred a) in not dis"issin+ the case for lack of
factual and le+al basis and b) in orderin+ hi" to pay "oral da"a+es, attorney,s fees, liti+ation e-penses and
costs.
On 15 !ebruary 1991, respondent Court pro"ul+ated the challen+ed decision
14
affir"in+ in toto the trial court,s
rulin+ of 16 October 1959. #n sustainin+ the trial court,s findin+s of fact, respondent Court "ade the follo*in+
analysisA
!irst of all, plaintiff, then only 41 years old *hen she "et defendant *ho *as already 49 years
old at the ti"e, does not appear to be a +irl of loose "orals. #t is uncontradicted that she *as a
vir+in prior to her unfortunate e-perience *ith defendant and never had boyfriend. %he is, as
described by the lo*er court, a barrio lass Cnot used and accusto"ed to trend of "odern urban
lifeC, and certainly *ould sic) not have allo*ed
Cherself to be deflo*ered by the defendant if there *as no persuasive pro"ise "ade by the
defendant to "arry her.C #n fact, *e a+ree *ith the lo*er court that plaintiff and defendant "ust
have been s*eethearts or so the plaintiff "ust have thou+ht because of the deception of
defendant, for other*ise, she *ould not have allo*ed herself to be photo+raphed *ith defendant
in public in so sic) lovin+ and tender poses as those depicted in the pictures 9-hs. C8C and C9C.
6e cannot believe, therefore, defendant,s pretense that plaintiff *as a nobody to hi" e-cept a
*aitress at the restaurant *here he usually ate. 8efendant in fact ad"itted that he *ent to
plaintiff,s ho"eto*n of 2aRa+a, 2u+allon, Pan+asinan, at least thriceF at sic) the to*n fiesta on
!ebruary 4(, 195( p. B', tsn >ay 15, 1955), at sic) a beach party to+ether *ith the "ana+er
and e"ployees of the >abuhay 3uncheonette on >arch ;, 195( p. B0, tsn id.), and on $pril 1,
195( *hen he alle+edly talked to plaintiff,s "other *ho told hi" to "arry her dau+hter pp. BB.
B6, tsn id.). 6ould defendant have left 8a+upan City *here he *as involved in the serious study
of "edicine to +o to plaintiff,s ho"eto*n in 2aRa+a, 2u+allon, unless there *as sic) so"e kind
of special relationship bet*een the"K $nd this special relationship "ust indeed have led to
defendant,s insincere proposal of "arria+e to plaintiff, co""unicated not only to her but also to
her parents, and sic) >arites &abino, the o*ner of the restaurant *here plaintiff *as *orkin+
and *here defendant first proposed "arria+e to her, also kne* of this love affair and defendant,s
proposal of "arria+e to plaintiff, *hich she declared *as the reason *hy plaintiff resi+ned fro"
her /ob at the restaurant after she had accepted defendant,s proposal pp. 6.(, tsn >arch (,
1955).
@pon the other hand, appellant does not appear to be a "an of +ood "oral character and "ust
think so lo* and have so little respect and re+ard for !ilipino *o"en that he openly ad"itted that
*hen he studied in 2acolod City for several years *here he finished his 2.%. 2iolo+y before he
ca"e to 8a+upan City to study "edicine, he had a co""on.la* *ife in 2acolod City. #n other
*ords, he also lived *ith another *o"an in 2acolod City but did not "arry that *o"an, /ust like
*hat he did to plaintiff. #t is not surprisin+, then, that he felt so little co"punction or re"orse in
pretendin+ to love and pro"isin+ to "arry plaintiff, a youn+, innocent, trustful country +irl, in
order to satisfy his lust on her.
11
and then concludedA
#n su", *e are stron+ly convinced and so hold that it *as defendant.appellant,s fraudulent and
deceptive protestations of love for and pro"ise to "arry plaintiff that "ade her surrender her
virtue and *o"anhood to hi" and to live *ith hi" on the honest and sincere belief that he *ould
keep said pro"ise, and it *as like*ise these sic) fraud and deception on appellant,s part that
"ade plaintiff,s parents a+ree to their dau+hter,s livin+.in *ith hi" preparatory to their supposed
"arria+e. $nd as these acts of appellant are palpably and undoubtedly a+ainst "orals, +ood
custo"s, and public policy, and are even +ravely and deeply dero+atory and insultin+ to our
*o"en, co"in+ as they do fro" a forei+ner *ho has been en/oyin+ the hospitality of our people
and takin+ advanta+e of the opportunity to study in one of our institutions of learnin+, defendant.
appellant should indeed be "ade, under $rt. 41 of the Civil Code of the Philippines, to
co"pensate for the "oral da"a+es and in/ury that he had caused plaintiff, as the lo*er court
ordered hi" to do in its decision in this case.
12
@nfa0ed by his second defeat, petitioner filed the instant petition on 46 >arch 1991F he raises therein the sin+le
issue of *hether or not $rticle 41 of the Civil Code applies to the case at bar.
18
#t is petitioner,s thesis that said $rticle 41 is not applicable because he had not co""itted any "oral *ron+ or
in/ury or violated any +ood custo" or public policyF he has not professed love or proposed "arria+e to the
private respondentF and he has never "altreated her. <e critici0es the trial court for liberally invokin+ !ilipino
custo"s, traditions and culture, and i+norin+ the fact that since he is a forei+ner, he is not conversant *ith such
!ilipino custo"s, traditions and culture. $s an #ranian >osle", he is not fa"iliar *ith Catholic and Christian
*ays. <e stresses that even if he had "ade a pro"ise to "arry, the subse=uent failure to fulfill the sa"e is
e-cusable or tolerable because of his >osle" upbrin+in+F he then alludes to the >usli" Code *hich purportedly
allo*s a >usli" to take four ') *ives and concludes that on the basis thereof, the trial court erred in rulin+ that
he does not posses +ood "oral character. >oreover, his controversial Cco""on la* lifeC is no* his le+al *ife as
their "arria+e had been sole"ni0ed in civil cere"onies in the #ranian 9"bassy. $s to his unla*ful cohabitation
*ith the private respondent, petitioner clai"s that even if responsibility could be pinned on hi" for the live.in
relationship, the private respondent should also be faulted for consentin+ to an illicit arran+e"ent. !inally,
petitioner asseverates that even if it *as to be assu"ed ar$uendo that he had professed his love to the private
respondent and had also pro"ised to "arry her, such acts *ould not be actionable in vie* of the special
circu"stances of the case. The "ere breach of pro"ise is not actionable.
19
On 46 $u+ust 1991, after the private respondent had filed her Co""ent to the petition and the petitioner had
filed his &eply thereto, this Court +ave due course to the petition and re=uired the parties to sub"it their
respective >e"oranda, *hich they subse=uently co"plied *ith.
$s "ay be +leaned fro" the fore+oin+ su""ation of the petitioner,s ar+u"ents in support of his thesis, it is clear
that =uestions of fact, *hich boil do*n to the issue of the credibility of *itnesses, are also raised. #t is the rule in
this /urisdiction that appellate courts *ill not disturb the trial court,s findin+s as to the credibility of *itnesses, the
latter court havin+ heard the *itnesses and havin+ had the opportunity to observe closely their deport"ent and
"anner of testifyin+, unless the trial court had plainly overlooked facts of substance or value *hich, if
considered, "i+ht affect the result of the case.
15
Petitioner has "iserably failed to convince @s that both the appellate and trial courts had overlooked any fact of
substance or values *hich could alter the result of the case.
9=ually settled is the rule that only =uestions of la* "ay be raised in a petition for revie* on certiorari under
&ule 'B of the &ules of Court. #t is not the function of this Court to analy0e or *ei+h all over a+ain the evidence
introduced by the parties before the lo*er court. There are, ho*ever, reco+ni0ed e-ceptions to this rule. Thus, in
Medina vs. 'sistio, -r.,
13
this Court took the ti"e, a+ain, to enu"erate these e-ceptionsA
--- --- ---
1) 6hen the conclusion is a findin+ +rounded entirely on speculation, sur"ises or con/ectures
7oa=uin v. ?avarro, 9; Phil. 4B( D19B;E)F 4) 6hen the inference "ade is "anifestly "istaken,
absurb or i"possible 3una v. 3inatok, (' Phil. 1B D19'4E)F ;) 6here there is a +rave abuse of
discretion 2uyco v. People, 9B Phil. 'B; D19BBE)F ') 6hen the /ud+"ent is based on a
"isapprehension of facts Cru0 v. %osin+,
3.'5(B, ?ov. 4(, 19B;)F B) 6hen the findin+s of fact are conflictin+ Casica v. Gillaseca, 3.9B90
$p. ;0, 19B(F unrep.) 6) 6hen the Court of $ppeals, in "akin+ its findin+s, *ent beyond the
issues of the case and the sa"e is contrary to the ad"issions of both appellate and appellee
9van+elista v. $lto %urety and #nsurance Co., 10; Phil. '01 D19B5E)F
() The findin+s of the Court of $ppeals are contrary to those of the trial court Harcia v. Court of
$ppeals, ;; %C&$ 644 D19(0EF %acay v. %andi+anbayan, 1'4 %C&$ B9; D1956E)F 5) 6hen the
findin+s of fact are conclusions *ithout citation of specific evidence on *hich they are based
Ibid.,)F 9) 6hen the facts set forth in the petition as *ell as in the petitioners "ain and reply
briefs are not disputed by the respondents Ibid.,)F and 10) The findin+ of fact of the Court of
$ppeals is pre"ised on the supposed absence of evidence and is contradicted by the evidence
on record %ala0ar v. Hutierre0, ;; %C&$ 4'4 D19(0E).
Petitioner has not endeavored to /oint out to @s the e-istence of any of the above =uoted e-ceptions in this case.
Conse=uently, the factual findin+s of the trial and appellate courts "ust be respected.
$nd no* to the le+al issue.
The e-istin+ rule is that a breach of pro"ise to "arry per se is not an actionable *ron+.
17
Con+ress
deliberately eli"inated fro" the draft of the ?e* Civil Code the provisions that *ould have "ade it so. The
reason therefor is set forth in the report of the %enate Co""ittees on the Proposed Civil Code, fro" *hich 6e
=uoteA
The eli"ination of this chapter is proposed. That breach of pro"ise to "arry is not actionable
has been definitely decided in the case of 8e 7esus vs. %y=uia.
15
The history of breach of
pro"ise suits in the @nited %tates and in 9n+land has sho*n that no other action lends itself
"ore readily to abuse by desi+nin+ *o"en and unscrupulous "en. #t is this e-perience *hich
has led to the abolition of ri+hts of action in the so.called <eart 2al" suits in "any of the
$"erican states. . . .
19
This not*ithstandin+, the said Code contains a provision, $rticle 41, *hich is desi+ned to e-pand the concept of
torts or *uasi:de"ict in this /urisdiction by +rantin+ ade=uate le+al re"edy for the untold nu"ber of "oral *ron+s
*hich is i"possible for hu"an foresi+ht to specifically enu"erate and punish in the statute books.
24
$s the Code Co""ission itself stated in its &eportA
2ut the Code Co""ission had +one farther than the sphere of *ron+s defined or deter"ined by
positive la*. !ully sensible that there are countless +aps in the statutes, *hich leave so "any
victi"s of "oral *ron+s helpless, even thou+h they have actually suffered "aterial and "oral
in/ury, the Co""ission has dee"ed it necessary, in the interest of /ustice, to incorporate in the
proposed Civil Code the follo*in+ ruleA
$rt. 4;. $ny person *ho *ilfully causes loss or in/ury to another in a "anner that
is contrary to "orals, +ood custo"s or public policy shall co"pensate the latter
for the da"a+e.
$n e-a"ple *ill illustrate the purvie* of the fore+oin+ nor"A C$C seduces the nineteen.year old
dau+hter of C1C. $ pro"ise of "arria+e either has not been "ade, or can not be proved. The +irl
beco"es pre+nant. @nder the present la*s, there is no cri"e, as the +irl is above nineteen years
of a+e. ?either can any civil action for breach of pro"ise of "arria+e be filed. Therefore, thou+h
the +rievous "oral *ron+ has been co""itted, and thou+h the +irl and fa"ily have suffered
incalculable "oral da"a+e, she and her parents cannot brin+ action for da"a+es. 2ut under the
proposed article, she and her parents *ould have such a ri+ht of action.
Thus at one stroke, the le+islator, if the for+oin+ rule is approved, *ould vouchsafe ade=uate
le+al re"edy for that untold nu"ber of "oral *ron+s *hich it is i"possible for hu"an foresi+ht to
provide for specifically in the statutes.
21
$rticle 41(6 of the Civil Code, *hich defines a *uasi:de"ict thusA
6hoever by act or o"ission causes da"a+e to another, there bein+ fault or ne+li+ence, is
obli+ed to pay for the da"a+e done. %uch fault or ne+li+ence, if there is no pre.e-istin+
contractual relation bet*een the parties, is called a *uasi:de"ict and is +overned by the
provisions of this Chapter.
is li"ited to ne+li+ent acts or o"issions and e-cludes the notion of *illfulness or intent. Buasi:de"ict,
kno*n in %panish le+al treatises as cu"pa a*ui"iana, is a civil la* concept *hile torts is an $n+lo.
$"erican or co""on la* concept. =orts is "uch broader than cu"pa a*ui"iana because it includes not
only ne+li+ence, but international cri"inal acts as *ell such as assault and battery, false i"prison"ent
and deceit. #n the +eneral sche"e of the Philippine le+al syste" envisioned by the Co""ission
responsible for draftin+ the ?e* Civil Code, intentional and "alicious acts, *ith certain e-ceptions, are
to be +overned by the &evised Penal Code *hile ne+li+ent acts or o"issions are to be covered by
$rticle 41(6 of the Civil Code.
22
#n bet*een these opposite spectru"s are in/urious acts *hich, in the
absence of $rticle 41, *ould have been beyond redress. Thus, $rticle 41 fills that vacuu". #t is even
postulated that to+ether *ith $rticles 19 and 40 of the Civil Code, $rticle 41 has +reatly broadened the
scope of the la* on civil *ron+sF it has beco"e "uch "ore supple and adaptable than the $n+lo.
$"erican la* on torts.
28
#n the li+ht of the above laudable purpose of $rticle 41, 6e are of the opinion, and so hold, that *here a "an,s
pro"ise to "arry is in fact the pro-i"ate cause of the acceptance of his love by a *o"an and his representation
to fulfill that pro"ise thereafter beco"es the pro-i"ate cause of the +ivin+ of herself unto hi" in a se-ual
con+ress, proof that he had, in reality, no intention of "arryin+ her and that the pro"ise *as only a subtle
sche"e or deceptive device to entice or invei+le her to accept hi" and to obtain her consent to the se-ual act,
could /ustify the a*ard of da"a+es pursuant to $rticle 41 not because of such pro"ise to "arry but because of
the fraud and deceit behind it and the *illful in/ury to her honor and reputation *hich follo*ed thereafter. #t is
essential, ho*ever, that such in/ury should have been co""itted in a "anner contrary to "orals, +ood custo"s
or public policy.
#n the instant case, respondent Court found that it *as the petitioner,s Cfraudulent and deceptive protestations of
love for and pro"ise to "arry plaintiff that "ade her surrender her virtue and *o"anhood to hi" and to live *ith
hi" on the honest and sincere belief that he *ould keep said pro"ise, and it *as like*ise these fraud and
deception on appellant,s part that "ade plaintiff,s parents a+ree to their dau+hter,s livin+.in *ith hi" preparatory
to their supposed "arria+e.C
29
#n short, the private respondent surrendered her vir+inity, the cherished
possession of every sin+le !ilipina, not because of lust but because of "oral seduction M the kind illustrated by
the Code Co""ission in its e-a"ple earlier adverted to. The petitioner could not be held liable for cri"inal
seduction punished under either $rticle ;;( or $rticle ;;5 of the &evised Penal Code because the private
respondent *as above ei+hteen 15) years of a+e at the ti"e of the seduction.
Prior decisions of this Court clearly su++est that $rticle 41 "ay be applied in a breach of pro"ise to "arry *here
the *o"an is a victi" of "oral seduction. Thus, in ;ermosisima vs. #ourt of 'ppea"s,
25
this Court denied
recovery of da"a+es to the *o"an becauseA
. . . *e find ourselves unable to say that petitioner is mora""1 +uilty of seduction, not only
because he is appro-i"ately ten 10) years youn+er than the co"plainant M *ho *as around
thirty.si- ;6) years of a+e, and as hi+hly enli+htened as a for"er hi+h school teacher and a life
insurance a+ent are supposed to be M *hen she beca"e inti"ate *ith petitioner, then a "ere
apprentice pilot, but, also, because the court of first instance found that, co"plainant
Csurrendered herselfC to petitioner because, Cover*hel"ed by her loveC for hi", she Cwanted to
bindC him b1 havin$ a fruit of their en$a$ement even before the1 had the benefit of c"er$1.
#n =anjanco vs. #ourt of 'ppea"s,
23
*hile this Court like*ise hinted at possible recovery if there had been "oral
seduction, recovery *as eventually denied because 6e *ere not convinced that such seduction e-isted. The
follo*in+ enli+htenin+ dis=uisition and conclusion *ere "ade in the said caseA
The Court of $ppeals see" to have overlooked that the e-a"ple set forth in the Code
Co""ission,s "e"orandu" refers to a tort upon a "inor *ho had been seduced. The essential
feature is seduction, that in la* is "ore than "ere se-ual intercourse, or a breach of a pro"ise
of "arria+eF it connotes essentially the idea of deceit, entice"ent, superior po*er or abuse of
confidence on the part of the seducer to *hich the *o"an has yielded @.%. vs. 2uenaventura,
4( Phil. 141F @.%. vs. $rlante, 9 Phil. B9B).
#t has been ruled in the Buenaventura case supra) that M
To constitute seduction there "ust in all cases be so"e sufficient pro"ise or
induce"ent and the woman must 1ie"d because of the promise or other
inducement. #f she consents "erely fro" carnal lust and the intercourse is fro"
"utual desire, there is no seduction '; Cent. 8i+. tit. %eduction, par. B6) %he
"ust be induced to depart fro" the path of virtue by the use of so"e species of
arts, persuasions and *iles, *hich are calculated to have and do have that
effect, and *hich result in her person to ulti"ately sub"ittin+ her person to the
se-ual e"braces of her seducer 4( Phil. 14;).
$nd in $"erican 7urisprudence *e findA
On the other hand, in an action by the *o"an, the entice"ent, persuasion or
deception is the essence of the in/uryF and a "ere proof of intercourse is
insufficient to *arrant a recovery.
$ccordin+ly it is not seduction *here the *illin+ness arises out of se-ual desire
of curiosity of the fe"ale, and the defendant "erely affords her the needed
opportunity for the co""ission of the act. #t has been e"phasi0ed that to allo* a
recovery in all such cases *ould tend to the de"orali0ation of the fe"ale se-,
and *ould be a re*ard for unchastity by *hich a class of adventuresses *ould
be s*ift to profit. '( $". 7ur. 664)
--- --- ---
Over and above the partisan alle+ations, the fact stand out that for one *hole year, fro" 19B5 to
19B9, the plaintiff.appellee, a *o"an of adult a+e, "aintain inti"ate se-ual relations *ith
appellant, *ith repeated acts of intercourse. %uch conduct is inco"patible *ith the idea of
seduction. Plainly there is here voluntariness and "utual passionF for had the appellant been
deceived, had she surrendered e-clusively because of the deceit, artful persuasions and *iles of
the defendant, she *ould not have a+ain yielded to his e"braces, "uch less for one year,
*ithout e-actin+ early fulfill"ent of the alle+ed pro"ises of "arria+e, and *ould have cut short
all se-ual relations upon findin+ that defendant did not intend to fulfill his defendant did not
intend to fulfill his pro"ise. <ence, *e conclude that no case is "ade under article 41 of the Civil
Code, and no other cause of action bein+ alle+ed, no error *as co""itted by the Court of !irst
#nstance in dis"issin+ the co"plaint.
27
#n his annotations on the Civil Code,
25
$ssociate 7ustice 9d+ardo 3. Paras, *ho recently retired fro" this Court,
opined that in a breach of pro"ise to "arry *here there had been carnal kno*led+e, "oral da"a+es "ay be
recoveredA
. . . if there be crimina" or mora" seduction, but not if the intercourse *as due to "utual lust.
<er"osisi"a vs. Court of $ppeals,
3.1'645, %ept. ;0, 1960F 9stopa vs. Piansay, 7r., 3.1'(;;, %ept. ;0, 1960F 2atarra vs. >arcos, (
Phil. B6 sic)F 2eatri0 Halan+ vs. Court of $ppeals, et al., 3.1(4'5, 7an. 49, 1964). #n other
*ords, if the C$@%9 be the pro"ise to "arry, and the 9!!9CT be the carnal kno*led+e, there
is a chance that there *as crimina" or mora" seduction, hence recovery of "oral da"a+es *ill
prosper. #f it be the other *ay around, there can be no recovery of "oral da"a+es, because here
"utual lust has intervened). . . .
to+ether *ith C$CT@$3 da"a+es, should there be any, such as the e-penses for the *eddin+
presentations %ee 8o"ala+on v. 2olifer, ;; Phil. '(1).
%enator $rturo >. Tolentino
29
is also of the sa"e persuasionA
#t is sub"itted that the rule in Batarra vs. Marcos,
84
still subsists, not*ithstandin+ the
incorporation of the present article
81
in the Code. The e-a"ple +iven by the Code Co""ission
is correct, if there *as seduction, not necessarily in the le+al sense, but in the vul+ar sense of
deception. 2ut *hen the se-ual act is acco"plished *ithout any deceit or =ualifyin+
circu"stance of abuse of authority or influence, but the *o"an, already of a+e, has kno*in+ly
+iven herself to a "an, it cannot be said that there is an in/ury *hich can be the basis for
inde"nity.
2ut so lon+ as there is fraud, *hich is characteri0ed by *illfulness sic), the action lies. The
court, ho*ever, "ust *ei+h the de+ree of fraud, if it is sufficient to deceive the *o"an under the
circu"stances, because an act *hich *ould deceive a +irl si-teen years of a+e "ay not
constitute deceit as to an e-perienced *o"an thirty years of a+e. 2ut so lon+ as there is a
*ron+ful act and a resultin+ in/ury, there should be civil liability, even if the act is not punishable
under the cri"inal la* and there should have been an ac=uittal or dis"issal of the cri"inal case
for that reason.
6e are unable to a+ree *ith the petitioner,s alternative proposition to the effect that +rantin+, for ar+u"ent,s
sake, that he did pro"ise to "arry the private respondent, the latter is nevertheless also at fault. $ccordin+ to
hi", both parties are in pari de"ictoF hence, pursuant to $rticle 1'141) of the Civil Code and the doctrine laid
do*n in Batarra vs. Marcos,
82
the private respondent cannot recover da"a+es fro" the petitioner. The latter
even +oes as far as statin+ that if the private respondent had Csustained any in/ury or da"a+e in their
relationship, it is pri"arily because of her o*n doin+,
88
forA
. . . %he is also interested in the petitioner as the latter *ill beco"e a doctor sooner or later. Take
notice that she is a plain hi+h school +raduate and a "ere e"ployee . . . $nne- CCC) or a
*aitress T%?, p. B1, 7anuary 4B, 1955) in a luncheonette and *ithout doubt, is in need of a "an
*ho can +ive her econo"ic security. <er fa"ily is in dire need of financial assistance. T%?, pp.
B1.B;, >ay 15, 1955). $nd this predica"ent pro"pted her to accept a proposition that "ay have
been offered by the petitioner.
89
These state"ents reveal the true character and "otive of the petitioner. #t is clear that he harbors a
condescendin+, if not sarcastic, re+ard for the private respondent on account of the latter,s i+noble birth, inferior
educational back+round, poverty and, as perceived by hi", dishonorable e"ploy"ent. Obviously then, fro" the
very be+innin+, he *as not at all "oved by +ood faith and an honest "otive. >arryin+ *ith a *o"an so
circu"stances could not have even re"otely occurred to hi". Thus, his profession of love and pro"ise to "arry
*ere e"pty *ords directly intended to fool, dupe, entice, be+uile and deceive the poor *o"an into believin+ that
indeed, he loved her and *ould *ant her to be his life,s partner. <is *as nothin+ but pure lust *hich he *anted
satisfied by a !ilipina *ho honestly believed that by acceptin+ his proffer of love and proposal of "arria+e, she
*ould be able to en/oy a life of ease and security. Petitioner clearly violated the !ilipino,s concept of "orality and
bra0enly defied the traditional respect !ilipinos have for their *o"en. #t can even be said that the petitioner
co""itted such deplorable acts in blatant disre+ard of $rticle 19 of the Civil Code *hich directs every person to
act *ith /ustice, +ive everyone his due and observe honesty and +ood faith in the e-ercise of his ri+hts and in the
perfor"ance of his obli+ations.
?o forei+ner "ust be allo*ed to "ake a "ockery of our la*s, custo"s and traditions.
The pari de"icto rule does not apply in this case for *hile indeed, the private respondent "ay not have been
i"pelled by the purest of intentions, she eventually sub"itted to the petitioner in se-ual con+ress not out of lust,
but because of "oral seduction. #n fact, it is apparent that she had =ual"s of conscience about the entire
episode for as soon as she found out that the petitioner *as not +oin+ to "arry her after all, she left hi". %he is
not, therefore, in pari de"icto *ith the petitioner. %ari de"icto "eans Cin e=ual faultF in a si"ilar offense or cri"eF
e=ual in +uilt or in le+al fault.C
85
$t "ost, it could be conceded that she is "erely in de"icto.
9=uity often interferes for the relief of the less +uilty of the parties, *here his trans+ression has
been brou+ht about by the i"position of undue influence of the party on *ho" the burden of the
ori+inal *ron+ principally rests, or *here his consent to the transaction *as itself procured by
fraud.
83
#n Man$a1ao vs. Lasud,
87
6e declaredA
$ppellants like*ise stress that both parties bein+ at fault, there should be no action by one
a+ainst the other $rt. 1'14, ?e* Civil Code). This rule, ho*ever, has been interpreted as
applicable only *here the fault on both sides is, "ore or less, e=uivalent. #t does not apply *here
one party is literate or intelli+ent and the other one is not. c.f. 2ou+h vs. Cantiveros, '0 Phil.
409).
6e should stress, ho*ever, that *hile 6e find for the private respondent, let it not be said that this Court
condones the deplorable behavior of her parents in lettin+ her and the petitioner stay to+ether in the sa"e roo"
in their house after +ivin+ approval to their "arria+e. #t is the sole"n duty of parents to protect the honor of their
dau+hters and infuse upon the" the hi+her values of "orality and di+nity.
6<9&9!O&9, findin+ no reversible error in the challen+ed decision, the instant petition is hereby 89?#98, *ith
costs a+ainst the petitioner.
%O O&89&98.
0e"iciano, Bidin, Romero and Me"o, --., concur.
Gutierre,, -r., -., is on "eave.
G.R. No. 79159 M$& 3, 1992
ERLINDA L. PONCE, petitioner,
vs.
/ALENTINO L. LEGASPI $!( THE HON. COURT OF APPEALS, respondents.
0.&. 0aro"an & 'ssociates Law Offices for petitioner.
GUTIERRE2, 'R., J.:
This controversy calls for the balancin+ of t*o conflictin+ interestsA the petitioner,s ri+ht to liti+ate versus the respondent,s ri+ht to be protected fro" "alicious
prosecution.
The present case ste""ed fro" the filin+ before the %upre"e Court on October ;, 19(( of a co"plaint for disbar"ent a+ainst respondent $tty. Galentino
3e+aspi by petitioner 9rlinda Ponce.
$t the ti"e of the filin+ of the disbar"ent proceedin+s, petitioner Ponce, to+ether *ith her husband >anuel, o*ned forty three percent ';L) of the stockholdin+s
of 3,?O& >arine %ervices, #nc. 3,?O&). %he *as then Treasurer and director of the 2oard of 8irectors of 3,?O& *hile her husband *as a director. !orty ei+ht
percent '5L) of 3,?O&,s stocks *as o*ned by the spouses 9d*ard and ?or"a Porter *ho *ere then servin+ as PresidentNHeneral >ana+er and %ecretary
respectively.
The pertinent portions of the co"plaint are reproduced belo*A
--- --- ---
10. 8urin+ the ti"e or period *hile respondent is the le+al counsel of the aforecited corporation, there occurred certain fraudulent
"anipulations, ano"alous "ana+e"ent and pre/udicial operations by certain officers of said corporation, na"elyA 9d*ard 7. Porter,
PresidentNHeneral >ana+erF ?or"a I. Porter, %ecretaryF and :enaida T. >analoto, 8irector, *ho caused +reat da"a+e and pre/udice
*hich *ill be related hereunderF
--- --- ---
1'. $bout 7uly, 19(6, said spouses 9d*ard 7. Porter and ?or"a I. Porter, to+ether *ith :enaida T. >analoto, facilitated, assisted and
aided by herein respondent 3e+aspi $nne-es C2C and C2.1C here*ith), incorporated the Irasport 8rydocks, #nc., hereinafter desi+nated
I&$%PO&T, *hich they control *ith the follo*in+ stockholdin+sA
9d*ard 7. Porter 150 shares
?or"a I. Porter 150 shares
9riberto !. Irastor0a 16 shares
:enaida T. >analoto 5 shares
&o"an >. >aceda 5 shares
$ndres $. ?o"brado 5 shares
and *hose line of business is in direct co"petition *ith 3,?O&F
1B. I&$%PO&T, like Irasport 9nterprises, *as launched *ithout the kno*led+e of the "inority stockholders o*nin+ ';L of 3,?O&, and
*as really desi+ned to co"pete, if not eli"inate, 3,?O& as a co"petitorF
16. That as a "atter of fact atte"pts *ere "ade to secure one of 3,?O& /obs in favor of I&$%PO&T, *hich fraudulent sche"e *as
ho*ever frustrated only by the ti"ely opposition of herein co"plainantF
1(. I&$%PO&T like*ise availed of and used the office space, e=uip"ent, personnel, funds, other physical facilities, and +ood*ill of
3,?O& *hile co"petin+ at the sa"e ti"e a+ainst and causin+ the latter +reat da"a+e and irreparable in/uryF
--- --- ---
41. 9d*ard 7. Porter, President.Heneral >ana+er of 3,?O&, purchased fro" #%9CO& #ndustrial %upply Corporation) on ?ove"ber ;,
19(' one skaa+it *inch *ith its cables for P10,000.00F that on ?ove"ber 15, 19(' said 9d*ard 7. Porter assi+ned the purchase of said
skaa+it *inch *ith its cables in favor of 3,?O& at the price of P10,000.00F and that the latter corporation then assu"ed the a+reed
obli+ation coverin+ the P10,000.00 purchase price in favor of #%9CO&F
44. %ubse=uently, on or about October 15, 19(B, said President.Heneral >ana+er 9d*ard 7. Porter "isrepresented facts re+ardin+ the
ac=uisition cost of said skaa+it *inch *ith its cables to the effect that the sa"e *as sold by #%9CO& at the cost of P40,000.00F that he
collected the su" fro" 3,?O& for direct pay"ent to #%9CO& alle+edly to li=uidate in full the obli+ation of P40,000.00 in favor of #%9CO&,
*hen, in truth and in fact, the obli+ation is only P10,000.00 and not "oreF
4;. On account of the aforecited fla+rant fraud, a char+e of 9stafa *as filed a+ainst 9d*ard 7. Porter and the office of the City !iscal
handed do*n a resolution to prosecute hi" in court, copy of pertinent e-hibits here*ith "arked as $nne-es CCC, CC.1C, CC.4C, CC.;C, CC.'C
and CC.BCF
4'. #n vie* of the aforesaid ille+al "anipulations, illicit sche"es, palpable frauds and estafa co""itted by said President.Heneral
>ana+er 9d*ard 7. Porter, in confabulation and conspiracy *ith the other officers of the corporation, na"elyA his *ife ?or"a I. Porter and
:enaida T. >analoto, herein co"plainant re=uested respondent Galentino 3e+aspi to take and pursue appropriate local steps and
seasonable actions in order to protect the para"ount interest of 3,?O& of *hich he is the le+al counsel by retainer, but the latter, *ithout
any valid e-cuse *hatsoever, refused to do so, althou+h he is still collectin+ his "onthly retainerF
4B. On account of the refusal of said corporate attorney of 3,?O&, respondent 3e+aspi, co"plainant *as forced to retain the services of
another counsel to prosecute the appropriate derivative suit in the Court of !irst #nstance of Cebu, copy here*ith "arked $nne- C8CF and
that, in opposition to the sa"e, respondent 3e+aspi appeared as le+al counsel and attorney of 9d*ard 7. Porter and his confederates,
copy of e-hibits "arked $nne- C8.1C here*ithF
46. #n the Cri"inal Case filed a+ainst 9d*ard 7. Porter for 9stafa $nne- CCC supra), respondent 3e+aspi like*ise appeared as counsel for
respondent Porter despite the fact that he is the le+al counsel of 3,?O& *hich is the pre/udiced party and for *hose benefit the cri"inal
case *as really bein+ prosecuted, copy of letter of respondent, "arked as $nne- CC.6C here*ithF
4(. @p to the present ti"e respondent is still collectin+ his "onthly retainer, and for his appearance for 9d*ard 7. Porter, et. als. in the
derivative suit, he collected the su" of P4,000.00 fro" 3,?O& as pay"ent for his illicit le+al services in defendin+ the Porters and
>analoto a+ainst the very interest of the corporation payin+ hi" "onthly retainerF
45. %aid 9d*ard 7. Porter and his confederates, in their respective capacity as such officers of 3,?O&, continue and persist in perpetratin+
"alicious acts, ano"alous "ana+e"ent and fraudulent operations a+ainst the interest of 3,?O&, and that respondent 3e+aspi *as duly
adviced verbally and also in *ritin+ by co"plainant to take the necessary action in his capacity as le+al counsel of 3,?O& to protect
0ealously the interest of the latter, but respondent 3e+aspi has done absolutely nothin+, and +rossly ne+lected and fla+rantly violated his
duties as le+al counsel up to the present ti"e, pertinent e-hibits here*ith "arked as $nne-es C9C, C9.1C, C9.4C, C9.'C, C9.BC, C9.6CF
49. That, on the contrary, respondent 3e+aspi in his dual capacity as le+al counsel of 3,?O& and I&$%PO&T, and at the sa"e ti"e actin+
in his capacity as corporate secretary of I&$%PO&T, facilitated, assisted, aided or other*ise abetted the ille+al "anipulations, illicit
sche"es, fraudulent operations and +rave frauds co""itted by said 9d*ard 7. Porter and his confederates *ho are officers of 3,?O&
a+ainst the interest of the latter and to further the "alicious co"petitive sabota+e of I&$%PO&T alle+ed heretoforeF and
;0. That, upon the fore+oin+, *e "ost respectfully prefer a+ainst respondent Galentino 3e+aspi the follo*in+ char+esA
0irst &pecificationC
That respondent Galentino 3e+aspi has co""itted +ross "isconduct in office as a practicin+ la*yer and "e"ber of the Philippine 2ar,
because, as le+al counsel, he violated his duty to and the trust of his client, 3,?O& >arine %ervices, #nc., *ho" he is professionally duty
bound to represent *ith entire devotion faithfully as such attorney, and *hose para"ount interest he should protect in all +ood faith *ith
absolute fidelity, but that, in truth and in fact, he did not do so.
&econd &pecificationC
That respondent Galentino 3e+aspi, *hile actin+ as le+al counsel of 3,?O& under continuin+ "onthly retainer, has acted at the sa"e ti"e
as la*yer of 9d*ard 7. Porter, et. als., *ho have co""itted ano"alous acts, pre/udicial "anipulations and +rave frauds a+ainst his client
3,?O& >arine services, #nc., that he therefore represented professionally conflictin+ interestF and that he co""itted +rave "alpractice
that is in fla+rant violation of the reco+ni0ed canons of le+al ethics.
=hird &pecificationC
That respondent Galentino 3e+aspi co""itted +rossly corrupt or dishonest conduct *hile under retainer and actin+ as attorney of 3,?O&
>arine %ervices, #nc., *hen he facilitated, assisted, aided or other*ise abetted the or+ani0ation, re+istration and operation of another
co"petin+ entity, Irasport 8rydocks, #nc., in *hich he is also the la*yer and corporate %ecretary, at the e-pense of and to *hich the
business and transactions of 3,?O& are bein+ diverted or other*ise appropriated, includin+ the piratin+ of skilled personnel and also
facilities, and that respondent co""itted the sa"e *ith evident bad faith and absolute lack of fidelity to his client 3,?O&, thereby
de+radin+ the +ood estee", inte+rity and honor of the profession. &ecords, $d"inistrative Case ?o. 1519, pp. '.1;)
#n his co""ent, $tty. 3e+aspi denied the alle+ations in para+raphs 10, 41, 44, 4;, 4', 45, 49 and ;0. <e =ualifiedly ad"itted the alle+ations in para+raphs 1' and
1B, statin+ that Irasport *as not or+ani0ed to co"pete directly *ith 3,?O&. <e averred that 3,?O& could not cope up *ith the business and Irasport *as for"ed
for the purpose of co"ple"entin+ 3,?O&,s business. <e added that there is nothin+ in the la* nor contract *hich prohibits a stockholder fro" co"petin+ *ith the
business of the corporation.
$tty. 3e+aspi ad"itted the alle+ations in para+raphs 46 and 4( that he appeared for 9d*ard Porter in the estafa case filet a+ainst the latter, reasonin+ that his
appearances *ere direct orders of "ana+e"ent and that it *as not i"proper for counsel to represent both the corporate officers *hen they are bein+ sued at the
sa"e ti"e.
$s to the alle+ations in para+raphs 16 and 1(, $tty. 3e+aspi declared that he has no sufficient kno*led+e to for" a belief as to the truth or falsity of the
state"ents contained therein.
On 7anuary 4;, 19(5, the Court issued a resolution dis"issin+ the disbar"ent co"plaint a+ainst 3e+aspi. The resolution is =uoted hereunderA
$d"inistrative Case ?o. 1519 9rlinda 3. Ponce v. Galentino 3. 3e+aspi). SS Considerin+ the co"plaint for disbar"ent a+ainst $tty.
Galentino 3. 3e+aspi as *ell as said respondent,s co""ent thereon, the Court &esolved to 8#%>#%% the co"plaint for lack of "erit.
&ecords, $d"inistrative Case ?o. 1519 p. 91)
The petitioner filed a "otion for reconsideration *hich *as denied by the Court on >arch ;1, 19(5.
On !ebruary 10, 19(5, $tty. 3e+aspi filed before the Court of !irst #nstance no* &e+ional Trial Court of Cebu) a co"plaint for da"a+es a+ainst the petitioner.
The petitioner filed a "otion to dis"iss *hich *as denied by the trial court.
On 7uly 15, 195;, the lo*er court rendered /ud+"ent the dispositive portion of *hich reads as follo*sA
6<9&9!O&9, this court bein+ satisfied that the "aterial alle+ations of the co"plaint have been proved and re"ained uncontradicted
*ith the testi"onial and docu"entary evidence introduced and ad"itted by the court, /ud+"ent is hereby rendered in favor of the plaintiff
and a+ainst the defendant 9rlinda 3. Ponce orderin+ the defendant to pay Galentino 3. 3e+aspi, plaintiff herein, the a"ount of P1,000.00
as actual da"a+es, PB0,000.00 as "oral da"a+es and P4B,000.00 as e-e"plary da"a+es and to pay the costs. Ro""o, p. 11B)
The petitioner appealed to the Court of $ppeals. On >ay 46, 195(, the Court of $ppeals affir"ed the lo*er court,s /ud+"ent. #n affir"in+ the appealed decision,
the Court of $ppeals reasonedA
8efendant.appellant contends that plaintiff.appellee,s action for da"a+es is purely retaliatory in character and ste"s fro" an alle+ed
feelin+ of *ounded pride or amor proprio@ that +rantin+ *ithout ad"ittin+ that the appellee has suffered certain adverse effects in his
reputation because of the disbar"ent case, it does not constitute "alicious prosecution as *ould other*ise perhaps render the appellant
liable for da"a+esF that the facts on record indubitably sho* that the appellant *as "erely e-ercisin+ her ri+ht of access to courts for
redress of le+iti"ate +rievances *hen she filed the disbar"ent case believin+ then as she still does, that appellee co""itted a breach of
his professional duties as a la*yer. #n refutation, appellee alle+es that appellant belittles this action for da"a+es as Cpurely retaliatory in
character and ste"s fro" an alle+ed feelin+ of *ounded pride or a"or proprioCF that by such state"ent, appellant has un"asked herself
as to ho* little re+ard she has for the feelin+s of others and ho* she clin+s to the la* if only to secure her purposeF that *hat is bein+
sou+ht by appellee is co"pensation for appellee,s "alice, falsehoods and deceit in tryin+ to destroy the professional standin+ of a hu"ble
practitioner /ust because he did better than the other.
6hile free access to the courts is +uaranteed under %ection 9, $rticle #G of the 19(; Constitution no* %ection 11, $rticle ### of the 1956
Constitution), it does not +ive unbridled license to file any case, *hatever the "otives are. 6hoever files a case shall be responsible for
the conse=uences thereof *henever his act of filin+ infrin+es upon the ri+hts of others. #n the sa"e *ay that althou+h freedo" of speech
is +uaranteed, one cannot clai" to be protected under such freedo" *hen he is bein+ held liable for the libel he co""its.
The case at bar cannot be considered as one for recovery of da"a+es arisin+ fro" "alicious prosecution, for a disbar"ent proceedin+ is
not a cri"inal action. 8e 7esus.Paras v. Gailoces, 111 Phil. B69F 1 %C&$ 9B', 9B(). <o*ever, *e should not lose si+ht of the fact that
utterances "ade in the course of /udicial proceedin+s, includin+ all kinds of pleadin+s, petitions and "otions, belon+ to the class of
co""unications that are absolutely privile+ed. %ison v. 8avid, 110 Phil. 664F 1 %C&$ 60, (1 citin+ authorities) and no civil action for libel
or slander "ay arise therefro" unless the contents of the petition are irrelevant to the sub/ect "atter thereof. 1 %C&$ (1). #t has also
been held that a privile+ed co""unication should not be sub/ected to "icroscopic e-a"ination to discover +rounds of "alice or falsity.
%uch e-cessive scrutiny *ould defeat the protection *hich the la* thro*s over privile+ed co""unications. The ulti"ate test is that of
bona fides. 8eles v. $ra+ona, 7r., 4( %C&$ 6;;, 6'4). The privile+ed character of her co"plaint filed *ith the %upre"e Court "ust have
been *hat defendant had in "ind *hen she invokes her ri+ht to free access to the courts. <o*ever, defendant,s actuations before and
after the filin+ of ad"inistrative co"plaint *ith the %upre"e Court disprove her bona fides. On this issue, the trial court foundA
Iet, the uncontroverted evidence before the court belie these alle+ations because there are antecedent incidents
bet*een plaintiff and defendant that speak other*iseF that she filed this disbar"ent co"plaint a+ainst plaintiff *ith
"alice aforethou+ht. This conclusion is founded on the fact that defendant *as e"bittered a+ainst hi" for failin+ to
obtain a co"pro"ise a+ainst 9duardo Coronel before the "ilitary due to plaintiff,s defense of his clientF that she
*anted to dissolve the 3,?or Corporation in order to repossess the pre"ises leased to the for"er upon the
corporation,s dissolution and Porter,s ouster *hich *as th*arted by plaintiff,s advice as counsel for 3,?orF plaintiff,s
letter 9-hibit C<C) that she *as not authori0ed to use the title of Chair"an of the 2oardF not counter.si+nin+
plaintiff,s check 9-hibits #, #.1, and #.4)F her insistence to have the surplus profits declared as cash dividend *hich
like*ise failed due to plaintiff,s adviceF her letter 9-h. 7) askin+ plaintiff to desist fro" defendin+ the corporation
and its officersF plaintiff,s refusal to +ive her advice *ithout authority fro" the 2oard of 8irectorsF nu"erous cases
filed *ith the %ecurity and 9-chan+e Co""ission *hich *ere all dis"issed and *ith the Court of !irst #nstance and
Circuit Cri"inal Court *hich plaintiff ably defended causin+ their eventual dis"issal and other acts a+ainst plaintiff
*hich de"onstrated palpably defendant,s hatred for the plaintiff acts clearly evidencin+ "alice contrary to her
aver"ents in the $ns*er.
To top it all, not*ithstandin+ her evident support and advice by counsel, she cleverly hid the identity of said counsel
prosecutin+ all her acts of vilification and harass"ent in her o*n na"e. !urther"ore, the testi"ony of plaintiff that
she distributed copies of her co"plaint for disbar"ent a+ainst plaintiff to his clients re"ain uncontradicted. !inally,
instead of co"in+ to court in +ood faith she instead "oved fro" her residence at %eavie* <ei+hts, 3a*aan,
Talisay, Cebu *ithout infor"in+ the court nor her counsel and has not been heard fro". !ro" the fore+oin+, "alice
is evident.
$ppellant clai"s that the findin+ of the lo*er court that appellant disse"inated infor"ation re+ardin+ the filin+ of her co"plaint for
disbar"ent and caused a copy of the sa"e to be furnished appellee,s clients is totally unsupported by any evidence on record. The
contention is untenable. Plaintiff declared that he ca"e to kno* of the co"plaint a+ainst hi" even before the %upre"e Court re=uired hi"
to co""ent because t*o or three of his clients told hi" that they had a copy +iven to the". p. 5, t.s.n., 7une ;, 195;).
The fore+oin+ acts co""itted by the defendant violate the conduct that she should have observed in her relation to plaintiff, as provided in
the follo*in+ provisions of the Civil Code of the Philippines, to *itA
$rt. 19. 9very person "ust, in the e-ercise of his ri+hts and in the perfor"ance of his duties, act *ith /ustice, +ive everyone his due, and
observe honesty and +ood faith.
$rt. 40. 9very person *ho, contrary to la*, *ilfully or ne+li+ently causes da"a+e to another, shall inde"nify the latter for the sa"e.
$rt. 46. 9very person shall respect the di+nity, personality, privacy and peace of "ind of his nei+hbors and other persons. The follo*in+
and si"ilar acts, thou+h they "ay not constitute a cri"inal offense, shall produce a cause of action for da"a+es, prevention and other
reliefF
1) Pryin+ into the privacy of another,s residenceF
4) >eddlin+ *ith or disturbin+ the private life or fa"ily relations of anotherF
;) #ntri+uin+ to cause another to be alienated fro" his friendsF
') Ge-in+ or hu"iliatin+ another on account of his reli+ious beliefs, lo*ly station in life, place of birth, physical defect, or other personal
condition. Ro""o, pp. 'B.'5)
The petitioner,s "otion for reconsideration *as denied by the respondent Court in its resolution dated 7uly (, 195(. <ence, this petition.
The petitioner assi+ns the follo*in+ errorsA
#
T<9 &9%PO?89?T CO@&T O! $PP9$3% 9&&98 #? $!!#&>#?H T<9 89C#%#O? O! T<9 &9H#O?$3 T&#$3 CO@&T O! C92@,
2&$?C< 11#, 6<#C< !O@?8 T<9 <9&9#? P9T#T#O?9& H@#3TI O! 2$8 !$#T< #? #?%T#T@T#?H $ CO>P3$#?T !O&
8#%2$&>9?T $H$#?%T T<9 P&#G$T9 &9%PO?89?T.
##
T<9 &9%PO?89?T CO@&T O! $PP9$3% 9&&98 #? O&89&#?H T<9 P9T#T#O?9& TO P$I T<9 P&#G$T9 &9%PO?89?T $CT@$3,
>O&$3 $?8 919>P3$&I 8$>$H9% TO P$I T<9 CO%T%. Ro""o, p. 41)
2efore proceedin+ *ith the "erits of the case, the scope of an action for da"a+es arisin+ fro" "alicious prosecution needs to be clarified. 2oth the Court of
$ppeals and the petitioner are of the belief that the suit for da"a+es filed by $tty. 3e+aspi is not one arisin+ fro" "alicious prosecution because Ca disbar"ent
proceedin+ is not a cri"inal action. 8e 7esus.Paras v. Gailoces, 1 %C&$ 9B' D1961E).C The obvious inference is that only an unsuccessful cri"inal action "ay
subse=uently +ive rise to a clai" for da"a+es based on "alicious prosecution. This is not correct. 6hile +enerally, "alicious prosecution refers to unfounded
cri"inal actions and has been e-panded to include unfounded civil suits /ust to ve- and hu"iliate the defendant despite the absence of a cause of action or
probable cause 9=uitable 2ankin+ Corporation v. #nter"ediate $ppellate Court, 1;; %C&$ 1;5 D195'E) the foundation of an action for "alicious prosecution is
an ori+inal proceedin+, /udicial in character. 3orber v. %torro*, (0 P. 4d B1; D19;(EF %hi+eru <ayashida v. Tsunehachi Kaki"oto, 4; P. 4d ;11 D19;;EF Hraves v.
&ud"an, 4B( ?.I.%. 414 D19;4E). $ disbar"ent proceedin+ is, *ithout doubt, /udicial in character and therefore "ay be the basis for a subse=uent action for
"alicious prosecution.
$ perusal of the alle+ations in $tty. 3e+aspi,s co"plaint for da"a+es, particularly para+raphs 10, 11, 14 and 1B thereof Ro""o, pp. B6.B9) sho*s that his "ain
cause of action *as predicated on in/ury resultin+ fro" the institution of the disbar"ent case a+ainst hi". This bein+ the case, *e find that the suit filed by the
respondent la*yer "akes out a case of da"a+es for "alicious prosecution.
$n action for da"a+es arisin+ fro" "alicious prosecution is anchored on the provisions of $rticle 41, 441( and 4419 D5E of the ?e* Civil Code. @nder these
$rticlesA
$rt. 41. $ny person *ho *ilfully causes loss or in/ury to another in a "anner that is contrary to "orals, +ood custo"s or public policy shall
co"pensate the latter for da"a+es.
$rt. 441(. >oral da"a+es include physical sufferin+, "ental an+uish, fri+ht, serious an-iety, bes"irched reputation, *ounded feelin+s,
"oral shock, social hu"iliation and si"ilar in/ury. Thou+h incapable of pecuniary co"putation, "oral da"a+es "ay be recovered if they
are the pro-i"ate result of the defendant,s *ron+ful act or o"ission.
$rt. 4419. >oral da"a+es "ay be recovered in the follo*in+ and analo+ous casesA
--- --- ---
5) >alicious prosecution.
#n order, ho*ever, for the "alicious prosecution suit to prosper, the plaintiff "ust proveA 1) the fact of the prosecution and the further fact that the defendant *as
hi"self the prosecutor, and that the action finally ter"inated *ith an ac=uittalF 4) that in brin+in+ the action, the prosecutor acted *ithout probable causeF and ;)
that the prosecutor *as actuated or i"pelled by le+al "alice, that is by i"proper or sinister "otive. 3ao v. Court of $ppeals, 199 %C&$ B5 D1991EF &ehabilitation
!inance Corporation v. Kohl, ' %C&$ B;B D1964EF 2uchanan v. Giuda de 9steban, ;4 Phil. ;6; D191BE).
The fore+oin+ re=uisites are necessary safe+uards to preserve a person,s ri+ht to liti+ate *hich "ay other*ise be e"asculated by the undue filin+ of "alicious
prosecution cases. Thus, as further held in the aforecited case of Buchanan v. /iuda. de 6steban, supraA C>alice is essential to the "aintenance of an action for
"alicious prosecution and not "erely to the recovery of e-e"plary da"a+es. 2ut "alice alone does not "ake one liable for "alicious prosecution, *here
probable cause is sho*n, even *here it appears that the suit *as brou+ht for the "ere purpose of ve-in+, harassin+ and in/urin+ his adversary. In other words,
ma"ice and want of probab"e cause "ust both e-ist in order to /ustify the action.C 9"phasis suppliedF see also &ehabilitation !inance Corp. v. Koh, supra)
Probable cause is the e-istence of such facts and circu"stances as *ould e-cite the belief, in a reasonable "ind, actin+ on the facts *ithin the kno*led+e of the
prosecutor, that the person char+ed *as +uilty of the cri"e or in this case, the *ron+doin+) for *hich he *as prosecuted. %ee 2uchanan v. Giuda de 9steban,
supra)
The +eneral rule is *ell settled that one cannot be held liable in da"a+es for "aliciously institutin+ a prosecution *here he acted *ith probable cause. #n other
*ords, a suit *ill lie only in cases *here a le+al prosecution has been carried on without probab"e cause. Id.F e"phasis supplied)
The petitioner, at the ti"e of her filin+ of the ad"inistrative co"plaint a+ainst the respondent, held substantial stockholdin+s in 3,?O&. %he believed that 3,?O&
*as defrauded by its PresidentNHeneral >ana+er, 9d*ard Porter, and filed a co"plaint for estafa a+ainst the latter. Porter *as convicted by the trial court but,
upon appeal, *as ac=uitted by the appellate court.
&espondent did not deny that he represented Porter durin+ the preli"inary investi+ation and trial of the cri"inal case. #n his co""ent in the disbar"ent
co"plaint a+ainst hi", he /ustified his action by sayin+ that they *ere Cdirect orders of "ana+e"entC and that there is Cnothin+ i"proper for counsel to represent
both the corporation and corporate officers at the sa"e ti"e they are bein+ sued.C &ecords, $d"inistrative Case ?o. 1519, p. 6')
#t is of no "o"ent no* that Porter *as ac=uitted of the estafa char+e. $pparently, at that ti"e, petitioner Ponce sa* a conflict of interest situation. To her "ind,
the act of the respondent in appearin+ as counsel for Porter, *ho had alle+edly s*indled 3,?O&, the interest of *hich he *as duty bound to protect by virtue of
the retainer contract, constituted +rave "isconduct and +ross "alpractice.
$tty. 3e+aspi did not deny that he aided the Porters in facilitatin+ the incorporation of I&$%PO&T and that he hi"self *as its corporate secretary. <e
e"phasi0ed, thou+h, that due to 3,?O&,% li"ited capitali0ation, I&$%PO&T *as or+ani0ed to co"ple"ent 3,?O&,% business and not to co"pete *ith the
latter,s undertakin+s.
%ince the petitioner, ho*ever, *as of the honest perception that I&$%PO&T *as actually or+ani0ed to appropriate for itself so"e of 3,?O&,s business, then *e
find that she had probable cause to file the disbar"ent suit.
6e take e-ception to the respondent,s co""ent that, assu"in+ the petitioner,s accusation to be true, Cthere is nothin+ in Philippine la* *hich considers as
unethical the for"ation of co"petitive corporations and neither can it be considered *ith evident bad faith and absolute lack of fidelity.C &ecords, $d"inistrative
Case ?o. 1519, p. 69)
The circu"stances of the case do not depict a si"ple case of for"ation of co"petitive corporations. 6hat the petitioner ob/ects to is the fact that both the
respondent la*yer and Porter are fiduciaries of 3,?Or and are at the sa"e ti"e fiduciaries of I&$%PO&T, both of *hich are en+a+ed in the sa"e line of
business.
True, at that ti"e, the Corporation 3a* did not prohibit a director or any other person occupyin+ a fiduciary position in the corporate hierarchy fro" en+a+in+ in a
venture *hich co"peted *ith that of the corporation. 2ut as a la*yer, $tty. 3e+aspi should have kno*n that *hile so"e acts "ay appear to be per"itted throu+h
sheer lack of statutory prohibition, these acts are nevertheless circu"scribed upon ethical and "oral considerations. $nd had $tty. 3e+aspi turned to $"erican
/urisprudence *hich then, as no*, *ielded a persuasive influence on our la* on corporations, he *ould have kno*n that it *as unfair for hi" or for Porter, actin+
as fiduciary, to take advanta+e of an opportunity *hen the interest of the corporation /ustly calls for protection. %ee 2allantine, Corporations, 40', Calla+han O
Co., ?. I. D19'6E)
Parenthetically, this lapse in the old Corporation 3a* is no* cured by sections ;1 and ;' of the Corporation Code *hich provideA
%ec. ;1. Liabi"it1 of directors, trustees or officers. M 8irectors or trustees *ho *illfully and kno*in+ly vote for or assent to patently unla*ful
acts of the corporation or *ho are +uilty of +ross ne+li+ence or bad faith in directin+ the affairs of the corporation or ac=uire any personal
or pecuniary interest in conflict *ith their duty as such directors or trustees shall he liable /ointly and severally for all da"a+es resultin+
therefro" suffered by the corporation, its stockholders or "e"bers and other persons.
6hen a director, trustee or officer atte"pts to ac=uire or ac=uires, in violation of his duty, any interest adverse to the corporation in respect
of any "atter *hich has been reposed in hi" in confidence, as to *hich e=uity i"poses a disability upon hi" to deal in his o*n behalf, he
shall be liable as a trustee for the corporation and "ust account for the profits *hich other*ise have accrued to the corporation.
%ec. ;'. .is"o1a"t1 of a director. M 6here a director, by virtue of his office, ac=uires for hi"self a business opportunity *hich should
belon+ to the corporation, thereby obtainin+ profits to the pre/udice of such corporation, he "ust account to the latter for all such profits by
refundin+ the sa"e, unless his act has been ratified by a vote of the stockholders o*nin+ or representin+ at least t*o.thirds 4N;) of the
outstandin+ capital stock. This provision shall be applicable, not*ithstandin+ the fact that the director risked his o*n funds in the venture.
The Court finds it unnecessary to discuss all the other char+es i"puted to the respondent la*yer in the disbar"ent co"plaint. !ro" the fore+oin+ discussion, *e
have sufficient basis to declare that the petitioner had probable cause in filin+ the ad"inistrative case a+ainst $tty. 3e+aspi. !acts and circu"stances e-isted
*hich e-cited belief in >rs. Ponce,s "ind that the respondent indeed co""itted unethical acts *hich *arranted the i"position of ad"inistrative sanctions.
6hether or not the petitioner,s perception of these facts and circu"stances is actually correct is irrelevant to our in=uiry, the only issue bein+ *hether or not the
petitioner had probable cause in filin+ the co"plaint.
The above discussion should not be construed as a re.openin+ of the disbar"ent proceedin+ a+ainst $tty. 3e+aspi. &eferences to the co"plaint for disbar"ent
and the respondent,s co""ent thereto are "ade only for the purpose of deter"inin+ the e-istence of probable cause.
%ince *e ad/ud+e that petitioner Ponce *as "oved by probable cause, *e need not any"ore ascertain *hether or not the petitioner acted *ith "alice in filin+
the co"plaint. The e-istence of probable cause alone, re+ardless of considerations of "alice, is sufficient to defeat the char+e of "alicious prosecution.
The respondent court treated $tty. 3e+aspi,s co"plaint as one for da"a+es arisin+ fro" libel and applied the test of bona fides, citin+ the case of .e"es v.
'ra$ona 4( %C&$ 6;; D1969E). This is incorrect.
#n the first place, alle+ations and aver"ents in pleadin+s are absolutely privile+ed as lon+ as they are relevant or pertinent to the issues %ee >ontene+ro v.
>edina, (; Phil. 604 D19'4E). The test of +ood faith applies only to a =ualified privile+ed co""unication. <ad the respondent court studied the 8eles case "ore
closely, it *ould have traced the Cbona fidesC test to the case of ?.&. v. Bustos, ;( Phil. (;1 D1915E). #n the latter case, the Court *as referrin+ to a =ualified
privile+ed co""unication *hen it for"ulated the Cbona fidesC test.
>oreover, the test to break throu+h the protective barrier of an absolutely privile+ed co""unication is not Cbona fidesC but relevance. #n the present case, $tty.
3e+aspi,s co"plaint no*here alle+ed that the state"ents "ade by the petitioner *ere irrelevant. Thus, *e find that the petitioner,s co"plaint for disbar"ent is
still covered by the privile+e and "ay not be the basis of a da"a+e suit arisin+ fro" libel.
6e disa+ree *ith the findin+s of the t*o lo*er courts that it *as the petitioner *ho distributed copies of the co"plaint for disbar"ent to $tty. 3e+aspi,s clients. #t
should be noted that $tty. 3e+aspi did not even present these alle+ed clients in court to testify to the source of these copies. Considerin+ that a co"plaint for
disbar"ent beco"es of public record once it is filed *ith the Court, then the petitioner "ay not be pinpointed as the sole and indisputable source of the copies
received by the respondent,s clients.
$tty. 3e+aspi "ay have suffered in/ury as a conse=uence of the disbar"ent proceedin+s. 2ut the adverse result of an action does not per se "ake the action
*ron+ful and sub/ect the actor to "ake pay"ent of da"a+es for the la* could not have "eant to i"pose a penalty on the ri+ht to liti+ate %aba v. Court of
$ppeals, 159 %C&$ B0 D1990E, citin+ &ubio v. Court of $ppeals, 1'1 %C&$ '55 D1956EF see also %alao v. %alao, (0 %C&$ 6B D19(6E and &a"os v. &a"os, 61
%C&$ 45' D19('E, citin+ 2arreto v. $revalo, 99 Phil. ((1 D19B6E). One *ho e-ercises his ri+hts does no in/ury. %aba v. Court of $ppeals, supra, citin+ $uyon+
<ian v. Court of Ta- $ppeals, B9 %C&$ 110 D19('E). #f da"a+e results fro" a person,s e-ercisin+ his le+al ri+hts, it is damnum abs*ue injuria. DId.E
6<9&9!O&9, the petition is hereby H&$?T98. The decision of the respondent Court of $ppeals is %9T $%#89 and &9G9&%98.
%O O&89&98.
0e"iciano, Bidin and Romero, --., concur.
.avide, -r., -., too9 no part.
FIE6T 5I2I6IA<
G.R. No. 115519 M$& 23, 1995
PEDRO P. PECSON, petitioner,
vs.
COURT OF APPEALS, SPOUSES 'UAN NUGUID $!( ERLINDA NUGUID, respondents.
DA/IDE, 'R., J.:
This petition for revie* on certiorari seeks to set aside the decision
1
of the Court of $ppeals in C$.H.&. %P ?o. ;46(9 affir"in+ in
part the order
2
of the &e+ional Trial Court &TC) of Jue0on City, 2ranch 101, in Civil Case ?o. J.'1'(0.
The factual and procedural antecedents of this case as +athered fro" the record are as follo*sA
Petitioner Pedro P. Pecson *as the o*ner of a co""ercial lot located in Ka"ias %treet, Jue0on City, on *hich
he built a four.door t*o.storey apart"ent buildin+. !or his failure to pay realty ta-es a"ountin+ to t*elve
thousand pesos P14,000.00), the lot *as sold at public auction by the city Treasurer of Jue0on City to >a"erto
?epo"uceno *ho in turn sold it on 14 October 195; to the private respondents, the spouses 7uan ?u+uid and
9rlinda Tan.?u+uid, for one hundred three thousand pesos P10;,000.00).
The petitioner challen+ed the validity of the auction sale in Civil Case ?o. J.'1'(0 before the &TC of Jue0on
City. #n its decision of 5 !ebruary 1959, the &TC dis"issed the co"plaint, but as to the private respondents,
clai" that the sale included the apart"ent buildin+, it held that the issue concernin+ it *as Cnot a sub/ect of
the . . . liti+ation.C #n resolvin+ the private respondents, "otion to reconsider this issue, the trial court held that
there *as no le+al basis for the contention that the apart"ent buildin+ *as included in the sale.
8
2oth parties then appealed the decision to the Court of $ppeals. The case *as docketed as C$.H.&. CG ?o.
49;1. #n its decision of ;0 $pril 1994,
9
the Court of $ppeals affir"ed in toto the assailed decision. #t also a+reed
*ith the trial court that the apart"ent buildin+ *as not included in the auction sale of the co""ercial lot. ThusA
Indeed, e+aminin$ the record we are fu""1 convinced that it was on"1 the "and D without the
apartment bui"din$ D which was so"d at the auction sa"e, for p"aintiffAs fai"ure to pa1 the ta+es
due thereon. Thus, in the Certificate of %ale of 8elin=uent Property To Purchaser 9-h. K, p.
;B4, &ecord) the property sub/ect of the auction sale at *hich >a"erto ?epo"uceno *as the
purchaser is referred to as 3ot ?o. 41.$, 2lock ?o. K.;', at Ka"ias, 2aran+ay PiRahan, *ith an
area of 4B6.; s=. "., *ith no "ention *hatsoever, of the buildin+ thereon. The sa"e description
of the sub/ect property appears in the !inal ?otice To 9-ercise The &i+ht of &ede"ption over
sub/ect property) dated %epte"ber 1', 1951 9-h. 3, p. ;B;, &ecord) and in the !inal 2ill of %ale
over the sa"e property dated $pril 19, 1954 9-h. P, p. ;B(, &ecord). ?eedless to say, as it *as
only the land *ithout any buildin+ *hich ?epo"uceno had ac=uired at the auction sale, it *as
also only that land *ithout any buildin+ *hich he could have le+ally sold to the ?u+uids. /eri"1, in
the .eed of 'bso"ute &a"e of Re$istered Land e+ecuted b1 Mamerto !epomuceno in favor of
the !u$uids on October E7, 234F (6+h. ?, p. F55, Record) it c"ear"1 appears that the propert1
subject of the sa"e for %28F,888.88 was on"1 the parce" of "and, Lot E2:', B"9. K:FG containin$
an area of E75.F s*. meters, without an1 mention of an1 improvement, much "ess an1 bui"din$
thereon. e"phases supplied)
The petition to revie* the said decision *as subse=uently denied by this Court.
5
9ntry of /ud+"ent *as "ade
on 4; 7une 199;.
3
On ?ove"ber 199;, the private respondents filed *ith the trial court a "otion for delivery of possession of the lot
and the apart"ent buildin+, citin+ article B'6 of the Civil Code.
7
$ctin+ thereon, the trial court issued on 1B
?ove"ber 199; the challen+ed order
5
*hich reads as follo*sA
%ub"itted for resolution before this Court is an uncontroverted DsicE for the 8elivery of
Possession filed by defendants 9rlinda Tan, 7uan ?u+uid, et al. considerin+ that despite
personal service of the Order for plaintiff to file *ithin five B) days his opposition to said "otion,
he did not file any.
#n support of defendant,s "otion, "ovant cites the la* in point as $rticle B'6 of the Civil
Code . . .
>ovant a+rees to co"ply *ith the provisions of the la* considerin+ that plaintiff is a builder in
+ood faith and he has in fact, opted to pay the cost of the construction spent by plaintiff. !ro"
the co"plaint itself the plaintiff stated that the construction cost of the apart"ent is "uch "ore
than the lot, *hich apart"ent he constructed at a cost of PB;,000.00 in 196B par. 5 co"plaint).
This a"ount of PB;,000.00 is *hat the "ovant is supposed to pay under the la* before a *rit of
possession placin+ hi" in possession of both the lot and apart"ent *ould be issued.
<o*ever, the co"plaint alle+es in para+raph 9 that three doors of the apart"ent are bein+
leased. This is further confir"ed by the affidavit of the "ovant presented in support of the "otion
that said three doors are bein+ leased at a rental of P(,000.00 a "onth each. The "ovant further
alle+es in his said affidavit that the present co""ercial value of the lot is P10,000.00 per s=uare
"eter or P4,B00,000.00 and the reasonable rental value of said lot is no less than P41,000.00
per "onth.
The decision havin+ beco"e final as per 9ntry of 7ud+"ent dated 7une 4;, 199; and fro" this
date on, bein+ the uncontested o*ner of the property, the rents should be paid to hi" instead of
the plaintiff collectin+ the". !ro" 7une 4;, 199;, the rents collected by plaintiff a"ountin+ to
"ore than PB;,000.00 fro" tenants should be offset fro" the rents due to the lot *hich
accordin+ to "ovant,s affidavit is "ore than P41,000.00 a "onth.
6<9&9!O&9, findin+ "erit in the >otion, the Court hereby +rants the follo*in+ prayer thatA
1. The "ovant shall rei"burse plaintiff the construction cost of PB;,000.00.
4. The pay"ent of PB;,000.00 as rei"burse"ent for the construction cost,
"ovant 7uan ?u+uid is hereby entitled to i""ediate issuance of a *rit of
possession over the 3ot and i"prove"ents thereon.
;. The "ovant havin+ been declared as the uncontested o*ner of the 3ot in
=uestion as per 9ntry of 7ud+"ent of the %upre"e Court dated 7une 4;, 199;,
the plaintiff should pay rent to the "ovant of no less than P41,000.00 per "onth
fro" said date as this is the very sa"e a"ount paid "onthly by the tenants
occupyin+ the lot.
'. The a"ount of PB;,000.00 due fro" the "ovant is hereby offset a+ainst the
a"ount of rents collected by the plaintiff fro" 7une 4;, 199;, to %epte"ber 4;,
199;.
%O O&89&98.
The petitioner "oved for the reconsideration of the order but it *as not acted upon by the trial court. #nstead, on
15 ?ove"ber 199;, it issued a *rit of possession directin+ the deputy sheriff Cto place said "ovant 7uan ?u+uid
in possession of sub/ect property located at ?o. (9 Ka"ias &oad, Jue0on City, *ith all the i"prove"ents
thereon and to e/ect therefro" all occupants therein, their a+ents, assi+nees, heirs and representatives.C
9
The petitioner then filed *ith the Court of $ppeals a special civil action for certiorari and prohibition assailin+ the
order of 1B ?ove"ber 199;, *hich *as docketed as C$.H.&. %P ?o. ;46(9.
14
#n its decision of ( 7une 199',
the Court of $ppeals affir"ed in part the order of the trial court citin+ $rticle ''5 of the Civil Code. #n disposin+ of
the issues, it statedA
$s earlier pointed out, private respondent opted to appropriate the i"prove"ent introduced by
petitioner on the sub/ect lot, +ivin+ rise to the ri+ht of petitioner to be rei"bursed of the cost of
constructin+ said apart"ent buildin+, in accordance *ith $rticle B'6 of the . . . Civil Code, and of
the ri+ht to retain the i"prove"ents until he is rei"bursed of the cost of the i"prove"ents,
because, basically, the ri+ht to retain the i"prove"ent *hile the correspondin+ inde"nity is not
paid i"plies the tenancy or possession in fact of the land on *hich they are built . . . D4
TO39?T#?O, C#G#3 CO89 O! T<9 P<#3#PP#?9% 1994) p. 114E. 6ith the facts e-tant and the
settled principle as +uides, *e a+ree *ith petitioner that respondent /ud+e erred in orderin+ that
Cthe "ovant havin+ been declared as the uncontested o*ner of the lot in =uestion as per 9ntry
of 7ud+"ent of the %upre"e Court dated 7une 4;, 199;, the plaintiff should pay rent to the
"ovant of no less than P41,000 per "onth fro" said date as this is the very sa"e a"ount paid
"onthly by the tenants occupyin+ the lot.
6e, ho*ever, a+ree *ith the findin+ of respondent /ud+e that the a"ount of PB;,000.00 earlier
ad"itted as the cost of constructin+ the apart"ent buildin+ can be offset fro" the a"ount of
rents collected by petitioner fro" 7une 4;, 199; up to %epte"ber 4;, 199; *hich *as fi-ed at
P(,000.00 per "onth for each of the three doors. Our underlyin+ reason is that durin+ the period
of retention, petitioner as such possessor and receivin+ the fruits fro" the property, is obli+ed to
account for such fruits, so that the a"ount thereof "ay be deducted fro" the a"ount of
inde"nity to be paid to hi" by the o*ner of the land, in line *ith >endo0a vs. 8e Hu0"an, B4
Phil. 16' . . . .
The Court of $ppeals then ruled as follo*sA
6<9&9!O&9, *hile it appears that private respondents have not yet inde"nified petitioner *ith
the cost of the i"prove"ents, since $nne- # sho*s that the 8eputy %heriff has enforced the 6rit
of Possession and the pre"ises have been turned over to the possession of private
respondents, the =uest of petitioner that he be restored in possession of the pre"ises is
rendered "oot and acade"ic, althou+h it is but fair and /ust that private respondents pay
petitioner the construction cost of PB;,000.00F and that petitioner be ordered to account for any
and all fruits of the i"prove"ents received by hi" startin+ on 7une 4;, 199;, *ith the a"ount of
PB;,000.00 to be offset therefro".
#T #% %O O&89&98.
11
$++rieved by the Court of $ppeals, decision, the petitioner filed the instant petition.
The parties a+ree that the petitioner *as a builder in +ood faith of the apart"ent buildin+ on the theory that he
constructed it at the ti"e *hen he *as still the o*ner of the lot, and that the key issue in this case is the
application of $rticles ''5 and 'B6 of the Civil Code.
The trial court and the Court of $ppeals, as *ell as the parties, concerned the"selves *ith the application of
$rticles ''5 and B'6 of the Civil Code. These articles read as follo*sA
$rt. ''5. The o*ner of the land on *hich anythin+ has been built, so*n or planted in +ood faith,
shall have the ri+ht to appropriate as his o*n the *orks, so*in+ or plantin+, after pay"ent of the
inde"nity provided for in articles B'6 and B'5, or to obli+e the one *ho built or planted to pay
the price of the land, and the one *ho so*ed, the proper rent. <o*ever, the builder or planter
cannot be obli+ed to buy the land if its value is considerably "ore than that of the buildin+ or
trees. #n such case, he shall pay reasonable rent, if the o*ner of the land does not choose to
appropriate the buildin+ or trees after proper inde"nity. The parties shall a+ree upon the ter"s
of the lease and in case of disa+ree"ent, the court shall fi- the ter"s thereof. ;61a)
--- --- ---
$rt. B'6. ?ecessary e-penses shall be refunded to every possessorF but only the possessor in
+ood faith "ay retain the thin+ until he has been rei"bursed therefor.
@seful e-penses shall be refunded only to the possessor in +ood faith *ith the sa"e ri+ht of
retention, the person *ho has defeated hi" in the possession havin+ the option of refundin+ the
a"ount of the e-penses or of payin+ the increase in value *hich the thin+ "ay have ac=uired by
reason thereof. 'B;a)
2y its clear lan+ua+e, $rticle ''5 refers to a land *hose o*nership is clai"ed by t*o or "ore parties, one of
*ho" has built so"e *orks, or so*n or planted so"ethin+. The buildin+, so*in+ or plantin+ "ay have been
"ade in +ood faith or in bad faith. The rule on +ood faith laid do*n in $rticle B46 of the Civil Code shall be
applied in deter"inin+ *hether a builder, so*er or planter had acted in +ood faith.
12
$rticle ''5 does not apply to a case *here the o*ner of the land is the builder, so*er, or planter *ho then later
loses o*nership of the land by sale or donation. This Court said so in #o"eon$co vs. Re$a"adoA
18
$rticle ;61 of the old Civil Code is not applicable in this case, for &e+alado constructed the
house on his o*n land before he sold said land to Coleon+co. $rticle ;61 applies only in cases
*here a person constructs a buildin+ on the land of another in +ood or in bad faith, as the case
"ay be. #t does not apply to a case *here a person constructs a buildin+ on his o*n land, for
then there can be no =uestion as to +ood or bad faith on the part of the builder.
9lse*ise stated, *here the true o*ner hi"self is the builder of *orks on his o*n land, the issue of +ood faith or
bad faith is entirely irrelevant.
Thus in strict point of la*, $rticle ''5 is not apposite to the case at bar. ?evertheless, *e believe that the
provision therein on inde"nity "ay be applied by analo+y considerin+ that the pri"ary intent of $rticle ''5 is to
avoid a state of forced co.o*nership and that the parties, includin+ the t*o courts belo*, in the "ain a+ree that
$rticles ''5 and B'6 of the Civil Code are applicable and inde"nity for the i"prove"ents "ay be paid althou+h
they differ as to the basis of the inde"nity.
$rticle B'6 does not specifically state ho* the value of the useful i"prove"ents should be deter"ined. The
respondent court and the private respondents espouse the belief that the cost of construction of the apart"ent
buildin+ in 196B, and not its current "arket value, is sufficient rei"burse"ent for necessary and useful
i"prove"ents "ade by the petitioner. This position is, ho*ever, not in consonance *ith previous rulin+s of this
Court in si"ilar cases. #n -avier vs. #oncepcion, -r.,
19
this Court pe++ed the value of the useful i"prove"ents
consistin+ of various fruits, ba"boos, a house and ca"arin "ade of stron+ "aterial based on the "arket value
of the said i"prove"ents. #n &armiento vs. '$ana,
15
despite the findin+ that the useful i"prove"ent, a
residential house, *as built in 196( at a cost of bet*een ei+ht thousand pesos P5,000.00) to ten thousand
pesosP10,000.00), the lando*ner *as ordered to rei"burse the builder in the a"ount of forty thousand pesos
P'0,000.00), the value of the house at the ti"e of the trial. #n the sa"e *ay, the lando*ner *as re=uired to pay
the Cpresent valueC of the house, a useful i"prove"ent, in the case of .e Gu,man vs. .e "a 0uente,
13
cited by
the petitioner.
The ob/ective of $rticle B'6 of the Civil Code is to ad"inister /ustice bet*een the parties involved. #n this re+ard,
this Court had lon+ a+o stated in Rivera vs. Roman #atho"ic 'rchbishop of Mani"a
17
that the said provision *as
for"ulated in tryin+ to ad/ust the ri+hts of the o*ner and possessor in +ood faith of a piece of land, to ad"inister
co"plete /ustice to both of the" in such a *ay as neither one nor the other "ay enrich hi"self of that *hich
does not belon+ to hi". Huided by this precept, it is therefore the current "arket value of the i"prove"ents
*hich should be "ade the basis of rei"burse"ent. $ contrary rulin+ *ould un/ustly enrich the private
respondents *ho *ould other*ise be allo*ed to ac=uire a hi+hly valued inco"e.yieldin+ four.unit apart"ent
buildin+ for a "easly a"ount. Conse=uently, the parties should therefore be allo*ed to adduce evidence on the
present "arket value of the apart"ent buildin+ upon *hich the trial court should base its findin+ as to the
a"ount of rei"burse"ent to be paid by the lando*ner.
The trial court also erred in orderin+ the petitioner to pay "onthly rentals e=ual to the a++re+ate rentals paid by
the lessees of the apart"ent buildin+. %ince the private respondents have opted to appropriate the apart"ent
buildin+, the petitioner is thus entitled to the possession and en/oy"ent of the apart"ent buildin+, until he is paid
the proper inde"nity, as *ell as of the portion of the lot *here the buildin+ has been constructed. This is so
because the ri+ht to retain the i"prove"ents *hile the correspondin+ inde"nity is not paid i"plies the tenancy
or possession in fact of the land on *hich it is built, planted or so*n.
15
The petitioner not havin+ been so paid,
he *as entitled to retain o*nership of the buildin+ and, necessarily, the inco"e therefro".
#t follo*s, too, that the Court of $ppeals erred not only in upholdin+ the trial court,s deter"ination of the
inde"nity, but also in orderin+ the petitioner to account for the rentals of the apart"ent buildin+ fro" 4; 7une
199; to 4; %epte"ber 199;.
6<9&9!O&9, the decision of the Court of $ppeals in C$.H.&. %P ?o. ;46(9 and the Order of 1B ?ove"ber
199; of the &e+ional Trial Court, 2ranch 101, Jue0on City in Civil Case ?o. J.'1'(0 are hereby %9T $%#89.
The case is hereby re"anded to the trial court for it to deter"ine the current "arket value of the apart"ent
buildin+ on the lot. !or this purpose, the parties shall be allo*ed to adduce evidence on the current "arket value
of the apart"ent buildin+. The value so deter"ined shall be forth*ith paid by the private respondents to the
petitioner other*ise the petitioner shall be restored to the possession of the apart"ent buildin+ until pay"ent of
the re=uired inde"nity.
?o costs.
%O O&89&98.
%adi""a, Be""osi""o and Kapunan, --., concur.
G.R. No. 117449 O#to6), 11, 1995
SECURIT< -AN1 B TRUST COMPAN< $!( ROSITO C. MANHIT, petitioners,
vs.
COURT OF APPEALS $!( <SMAEL C. FERRER, respondents.
PADILLA, J.:
#n this petition for revie* under &ule 'B of the &ules of Court, petitioners seek a revie* and reversal of the decision N of respondent Court of $ppeals in C$.H.&.
CG ?o. '0'B0, entitled CIs"ael C. !errer v. %ecurity 2ank and Trust Co"pany, et. al.C dated ;1 $u+ust 199', *hich affir"ed the decision NN of the &e+ional Trial
Court, 2ranch 6;, >akati in Civil Case ?o. '4(14, a co"plaint for breach of contract *ith da"a+es.
Private respondent Is"ael C. !errer *as contracted by herein petitioners %ecurity 2ank and Trust Co"pany %2TC) and &osito C. >anhit to construct the
buildin+ of %2TC in 8avao City for the price of P1,(60,000.00. The contract dated ' !ebruary 1950 provided that !errer *ould finish the construction in t*o
hundred 400) *orkin+ days. &espondent !errer *as able to co"plete the construction of the buildin+ on 1B $u+ust 1950 *ithin the contracted period) but he
*as co"pelled by a drastic increase in the cost of construction "aterials to incur e-penses of about P;00,000.00 on top of the ori+inal cost. The additional
e-penses *ere "ade kno*n to petitioner %2TC thru its Gice.President !ely %ebastian and %upervisin+ $rchitect &udy de la &a"a as early as >arch 1950.
&espondent !errer "ade ti"ely de"ands for pay"ent of the increased cost. %aid de"ands *ere supported by receipts, invoices, payrolls and other docu"ents
provin+ the additional e-penses.
#n >arch 1951, %2TC thru $ssistant Gice.President %usan Huanio and a representative of an architectural fir" consulted by %2TC, verified !errer,s clai"s for
additional cost. $ reco""endation *as then "ade to settle !errer,s clai" but only for P400,000.00. %2TC, instead of payin+ the reco""ended additional
a"ount, denied ever authori0in+ pay"ent of any a"ount beyond the ori+inal contract price. %2TC like*ise denied any liability for the additional cost based on
$rticle #1 of the buildin+ contract *hich statesA
#f at any ti"e prior to the co"pletion of the *ork to be perfor"ed hereunder, increase in prices of construction "aterials andNor labor shall
supervene throu+h no fault on the part of the contractor *hatsoever or any act of the +overn"ent and its instru"entalities *hich directly or
indirectly affects the increase of the cost of the pro/ect, O6?9& shall e=uitably "ake the appropriate ad/ust"ent on "utual a+ree"ent of
both parties.
Is"ael C. !errer then filed a co"plaint for breach of contract *ith da"a+es. The trial court ruled for !errer and ordered defendants %2TC and &osito C. >anhit
to payA
a) P4B9,'1(.4; for the increase in price of labor and "aterials plus 14L interest thereon per annum fro" 1B $u+ust 1950 until fully paidF
b) P4',000.00 as actual da"a+esF
c) P40,000.00 as "oral da"a+esF
d) P40,000.00 as e-e"plary da"a+esF
e) attorney,s fees e=uivalent to 4BL of the principal a"ount dueF and
f) costs of suit.
On appeal, the Court of $ppeals affir"ed the trial court decision.
#n the present petition for revie*, petitioners assi+n the follo*in+ errors to the appellate courtA
. . . #? <O38#?H T<$T P3$#?T#!!.$PP93399 <$%, 2I P&9PO?89&$?C9 O! 9G#89?C9 %@!!#C#9?T3I P&OG9? <#% C3$#>
$H$#?%T T<9 89!9?8$?T%.$PP933$?T%.
. . . #? #?T9&P&9T#?H $? OT<9&6#%9 C39$& $?8 @?$>2#H@O@% P&OG#%#O? O! T<9 CO?%T&@CT#O? CO?T&$CT.
. . . #? 8#%&9H$&8#?H T<9 91P&9%% P&OG#%#O? O! T<9 CO?%T&@CT#O? CO?T&$CT, T<9 3O69& CO@&T G#O3$T98
89!9?8$?T%.$PP933$?T%, CO?%T#T@T#O?$3 H@$&$?TI O! ?O? #>P$#&>9?T O! T<9 O23#H$T#O? O! CO?T&$CT.
1
Petitioners ar+ue that under the afore=uoted $rticle #1 of the buildin+ contract, any increase in the price of labor
andNor "aterials resultin+ in an increase in construction cost above the stipulated contract price *ill not
auto"atically "ake petitioners liable to pay for such increased cost, as any pay"ent above the stipulated
contract price has been "ade sub/ect to the condition that the Cappropriate ad/ust"entC *ill be "ade Cupon
"utual a+ree"ent of both partiesC. #t is contended that since there *as no "utual a+ree"ent bet*een the
parties, petitioners, obli+ation to pay a"ounts above the ori+inal contract price never "ateriali0ed.
&espondent Is"ael C. !errer, throu+h counsel, on the other hand, opposed the ar+u"ents raised by petitioners.
#t is of note ho*ever that the pleadin+s filed *ith this Court by counsel for !errer hardly refute the ar+u"ents
raised by petitioners, as the contents of said pleadin+s are "ostly =uoted portions of the decision of the Court of
$ppeals, devoid of ade=uate discussion of the "erits of respondent,s case. The Court, to be sure, e-pects "ore
dili+ence and le+al kno*.ho* fro" la*yers than *hat has been e-hibited by counsel for respondent in the
present case. @nder these circu"stances, the Court had to revie* the entire records of this case to evaluate the
"erits of the issues raised by the contendin+ parties.
$rticle 44 of the Civil Code *hich e"bodies the "a-i", !emo e+ a"terius incommodo debet "ecup"etari no "an
ou+ht to be "ade rich out of another,s in/ury) statesA
$rt. 44. 9very person *ho throu+h an act of perfor"ance by another, or any other "eans,
ac=uires or co"es into possession of so"ethin+ at the e-pense of the latter *ithout /ust or le+al
+round, shall return the sa"e to hi".
The above.=uoted article is part of the chapter of the Civil Code on <u"an &elations, the provisions of *hich
*ere for"ulated as Cbasic principles to be observed for the ri+htful relationship bet*een hu"an bein+s and for
the stability of the social order, . . . desi+ned to indicate certain nor"s that sprin+ fro" the fountain of +ood
conscience, . . . +uides for hu"an conduct DthatE should run as +olden threads throu+h society to the end that
la* "ay approach its supre"e ideal *hich is the s*ay and do"inance of /ustice.C
2
#n the present case, petitioners, ar+u"ents to support absence of liability for the cost of construction beyond the
ori+inal contract price are not persuasive.
@nder the previously =uoted $rticle #1 of the construction contract, petitioners *ould "ake the appropriate
ad/ust"ent to the contract price in case the cost of the pro/ect increases throu+h no fault of the contractor
private respondent). Private respondent infor"ed petitioners of the drastic increase in construction cost as early
as >arch 1950.
Petitioners in turn had the increased cost evaluated and audited. 6hen private respondent de"anded pay"ent
of P4B9,'1(.4;, petitioner bank,s Gice.President &osito C. >anhit and the bank,s architectural consultant *ere
directed by the bank to verify and co"pute private respondent,s clai"s of increased cost. $ reco""endation
*as then "ade to settle private respondent,s clai" for P400,000.00. 8espite this reco""endation and several
de"ands fro" private respondent, %2TC failed to "ake pay"ent. #t denied authori0in+ anyone to "ake a
settle"ent of private respondent,s clai" and like*ise denied any liability, contendin+ that the absence of a
mutua" a$reement made private respondentAs demand premature and base"ess.
Petitioners, ar+u"ents are specious.
#t is not denied that private respondent incurred additional e-penses in constructin+ petitioner bank,s buildin+
due to a drastic and une-pected increase in construction cost. #n fact, petitioner bank ad"itted liability for
increased cost *hen a reco""endation *as "ade to settle private respondent,s clai" for P400,000.00. Private
respondent,s clai" for the increased a"ount *as ade=uately proven durin+ the trial by receipts, invoices and
other supportin+ docu"ents.
@nder $rticle 1154 of the Civil Code, a conditional obli+ation shall be void if its fulfill"ent depends upon the sole
*ill of the debtor. #n the present case, the "utual a+ree"ent, the absence of *hich petitioner bank relies upon to
support its non.liability for the increased construction cost, is in effect a condition dependent on petitioner bank,s
sole *ill, since private respondent *ould naturally and lo+ically +ive consent to such an a+ree"ent *hich *ould
allo* hi" recovery of the increased cost.
!urther, it cannot be denied that petitioner bank derived benefits *hen private respondent co"pleted the
construction even at an increased cost.
<ence, to allo* petitioner bank to ac=uire the constructed buildin+ at a price far belo* its actual construction
cost *ould undoubtedly constitute un/ust enrich"ent for the bank to the pre/udice of private respondent. %uch
un/ust enrich"ent, as previously discussed, is not allo*ed by la*.
!inally, *ith respect to the a*ard of attorney,s fees to respondent, the Court has previously held that, Ceven *ith
the presence of an a+ree"ent bet*een the parties, the court "ay nevertheless reduce attorney,s fees thou+h
fi-ed in the contract *hen the a"ount thereof appears to be unconscionable or unreasonable.C
8
$s previously
noted, the dili+ence and le+al kno*.ho* e-hibited by counsel for private respondent hardly /ustify an a*ard of
4BL of the principal a"ount due, *hich *ould be at least P60,000.00. 2esides, the issues in this case are far
fro" co"ple- and intricate. The a*ard of attorney,s fees is thus reduced to P10,000.00.
6<9&9!O&9, *ith the above "odification in respect of the a"ount of attorney,s fees, the appealed decision of
the Court of $ppeals in C$ H.&. CG ?o. '0'B0 is $!!#&>98.
%O O&89&98.
.avide, -r., Be""osi""o, Kapunan and ;ermosisima, -r., --., concur.
T<#&8 8#G#%#O?
OG.R. No. 113859. F)6,u$,& 7, 2444P
/IOLA CRU2, petitioner, vs. NATIONAL LA-OR RELATIONS COMMISSION,
NOR1IS DISTRI-UTORS, INC., 'OSE RAMIRO A. CARPIO, 'R., >ESSIE
QUISUM-ING, $!( ELI2ALDE AMPALA<O, respondents.
D E C I S I O N
PURISIMA, J.A
This is a petition for certiorari under &ule 6B of the &ules of Court ascribin+ +rave abuse of
discretion to the ?ational 3abor &elations Co""ission ?3&C) in issuin+ its &esolution, dated
?ove"ber 19, 199;, dis"issin+ for lack of "erit petitionerTs co"plaint a+ainst the
respondents, ?orkis 8istributors, #nc., 7ose &a"iro $. Carpio, 7r., 6essie Juisu"bin+, and
9li0alde $"palayoF and the subse=uent Order, dated $pril 1;, 199', denyin+ petitionerTs
>otion for &econsideration.
The antecedent facts are as follo*sA
&espondent ?orkis 8istributors, #nc., a do"estic corporation *ith principal office and
business address at $. %. !ortuna %treet, >andaue City, Cebu, is en+a+ed in the business of
sellin+ "otorcycles and household appliances, *ith branches all over the country, one of
*hich branches is in Galencia, 2ukidnon. &espondents 6essie Juisu"bin+, 7ose &a"iro $.
Carpio, 7r., and 9li0alde $"palayo are its President, Gice.President and >ana+er,
respectively.
Petitioner Giola Cru0 *as hired and e"ployed by respondent ?orkis so"eti"e in >arch 199(
as cashierNbookkeeper at its branch in Ca+ayan de Oro City, and *as later transferred to its
Galencia, 2ukidnon branch. !or her loyalty and dedication to the co"pany, petitioner Cru0
*as +iven co"pensatin+ salary ad/ust"ent of One <undred P100.00) Pesos, effective 7uly
1, 1990.D1E
#n October 1990, the Galencia branch of ?orkis *as scheduled to transfer its office to another
place. On October 1', 1990, *hile petitioner and her co.e"ployees *ere busy packin+ up
and "akin+ an inventory of the thin+s to be "oved preparatory to such transfer, the petitioner
suddenly collapsed. %he *as rushed to the >onsanto Heneral <ospital in Galencia, 2ukidnon
in the evenin+ of the sa"e day but *as able to report for *ork the follo*in+ day.
On October 1(, 1990, petitioner *as transferred to the Capitol Colle+e Heneral <ospital in
Ca+ayan de Oro City and *as confined thereat until October 4B. %he *as dia+nosed to be
sufferin+ fro" CC?% #nfectionA T2 >enin+itis vs. Cryptococcal >enin+itisC. %he *as later
transferred to the >aria &eyna <ospital, *here she *as confined fro" October 4B to
8ece"ber B, 1990, and treated for C#r1ptococca" Menin$itis, %ottHs .isease, and .iabetes
Me""itus =1pe IIC.
%tartin+ October 1B, 1990, the petitioner stopped reportin+ for *ork. On October 19, 1990,
respondent ?orkis *as infor"ed by petitionerTs co.e"ployees of her condition, and it *as
able to recruit a replace"ent cashierNbookkeeper in the person of <ernando 7ua"an, t*o 4)
days after petitionerTs collapse.
On 8ece"ber 45, 1990, petitioner sent a letter to respondent ?orkis to verify the status of her
e"ploy"ent. $s an ans*er, she received a ter"ination letter, dated ?ove"ber 4, 1990,D4E
citin+ health reasons as the cause for her dis"issal, to *itA
C?orkis.G>?H
>andaue City
?ove"ber 4, 1990
ToA Giola Cru0
2ookkeeperNCashier . ?8C Galencia
ThruA 7o/o Cru0
!ro"A P.#. &. 8epart"ent
%ub/ectA &93#9G#?H O! 8@T#9% $?8 !@?CT#O?%
Iour present ill.health conditions has "ade you incapable of perfor"in+ your
assi+ned duties and functions effectively.
2ecause of the above reason, "ana+e"ent has decided to relieve you of your
present duties and responsibilities as 2ookkeeperNCashier of ?8C Galencia
effective i""ediately.
This is done to protect co"pany interest and to avoid disruption of the nor"al
business operations that "ay result to delay in the sub"ission of reports
affectin+ the entire or+ani0ation, and to avoid occurrence of substantial losses.
!urther, this is to protect you fro" any additional physical and "ental burden
that "ay result because of your incapable sic) to *ork nor"ally. This *ill serve
as your notice of ter"ination for health reason *hich *ill take effect upon receipt
of this letter.
!or your infor"ation and co"pliance.
%+d.) 9lenito P. Palan+
<&8 >ana+er
?otedA
%+d.) &a"iro $. Carpio
Gice.President
On >arch 15, 1991, petitioner lod+ed a co"plaint for ille+al dis"issal a+ainst the private
respondents, prayin+ for pay"ent of separation pay in lieu of reinstate"ent, service incentive,
leave pay, "aternity leave pay, 1;th "onth pay, holiday pay and other "oney clai"s, before
the $rbitration 2ranch of the ?3&C in Ca+ayan 8e Oro City.
On >ay 45, 199;, 3abor $rbiter 3eon P. >urillo rendered a decision for
co"plainantNpetitioner, disposin+ as follo*sA
C6<9&9!O&9, in vie* of all the fore+oin+ /ud+"ent is hereby entered orderin+
?orkis 8istributors, #nc. to pay co"plainant Giola Cru0 the follo*in+A
1) %eparation pay P 4B,5;4.10
4) %ervice #ncentive leave pay P 1,519.50
;) Proportionate 1;th "onth pay for 1990 P 4,909.4(
and all the above.na"ed respondents are hereby ordered to /ointly and
severally pay co"plainant Giola Cru0 P100,000.00 in "oral da"a+es and
P40,000.00 in e-e"plary da"a+es.
&espondent ?orkis 8istributors, #nc. is like*ise ordered to pay P1B,0B6.11 as
attorneyTs fees.CD;E
!ro" the said decision both parties appealed to the ?3&CF and on ?ove"ber 19, 199;, the
!ifth 8ivision of the ?3&C reversed and set aside the appealed decision of the 3abor $rbiter,
rulin+ thusA
C6<9&9!O&9, the decision appealed fro" is &eversed and %et $side and a
ne* one dis"issin+ the co"plaint for lack of "erit. <o*ever, respondent
co"pany is ordered to pay co"plainant her unpaid service incentive leave pay
and proportionate 1;th "onth pay for 1990 in the a++re+ate su" of
P',(49.0(.CD'E
$fter her receipt of the &esolution dated $pril 11, 199' of ?3&C, denyin+ her "otion for
reconsideration, petitioner found her *ay to this court via the present petition, i"putin+ +rave
abuse of discretion to the ?3&C, and posin+ as issuesA
#. 6<9T<9& O& ?OT P9T#T#O?9& 6$% #339H$33I 8#%>#%%98 2I
P&#G$T9 &9%PO?89?T%.
##. 6<9T<9& O& ?OT P9T#T#O?9& #% 9?T#T398 TO &9COG9& >O&$3
$?8 919>P3$&I 8$>$H9% $?8 $TTO&?9IT% !99% !&O> P&#G$T9
&9%PO?89?T%.
The petition is visited by "erit.
#n its Co""ent sent in on $pril 19, 199B, respondent ?ational 3abor &elations Co""ission
theori0ed that its factual findin+s cannot be looked into and re.e-a"ined by this Court
follo*in+ the *ell.entrenched doctrine that factual findin+s of =uasi./udicial a+encies like the
?3&C, *hich have ac=uired e-pertise because their /urisdiction is confined to specific
"atters, are +enerally accorded not only respect but even finality, *hen such findin+s are
supported by substantial evidence.
The Court a+rees *ith respondent ?3&C on the validity of the aforecited doctrine. <o*ever, it
is *ell.settled that there are /udicially reco+ni0ed e-ceptions to the said doctrine, one of *hich
is *hen the findin+s of fact of the 3abor $rbiter and of the ?ational 3abor &elations
Co""ission are at variance, such as in the case under scrutiny, *here the Court "ay cull its
o*n findin+ of facts on the basis of the evidence on record.
#n the said letter of ter"ination, dated ?ove"ber 4, 1990, private respondents cited Chea"th
reasonsC as the cause for petitionerTs dis"issal fro" *orkA
C--- This *ill therefore serve as your notice of ter"ination for health reason
*hich *ill take effect upon receipt of this letter. ---CDBE
@nder %ection 5, &ule #, 2ook G# of the &ules and &e+ulations #"ple"entin+ the 3abor Code,
for a disease to be a valid +round for the dis"issal of the e"ployee, the continued
e"ploy"ent of such e"ployee is prohibited by la* or pre/udicial to his health or the health of
his co.e"ployees, and there "ust be a certification by a co"petent public health authority
that the disease is of such nature or at such a sta+e that it cannot be cured *ithin a period of
si- 6) "onths, even *ith proper "edical treat"ent. %ince the burden of provin+ the validity of
the dis"issal of the e"ployee rests on the e"ployer, the latter should like*ise bear the
burden of sho*in+ that the re=uisites for a valid dis"issal due to a disease have been
co"plied *ith. #n the absence of the re=uired certification by a co"petent public health
authority, this Court has ruled a+ainst the validity of the e"ployeeTs dis"issal.D6E
Considerin+ that in the present case, the alle+ed reason for the dis"issal of petitioner *as
her illness, the private respondents have to prove that their decision to ter"inate the services
of petitioner *as reached after co"pliance *ith the aforestated re=uisites under %ection 5.
Private respondents havin+ failed to substantiate the sa"e, the dis"issal of petitioner on the
+round of illness cannot be upheld.
&espondent ?orkis cited as another +round for the dis"issal of petitioner, her alle+ed
une-plained absence for al"ost three ;) "onths, *hich they theori0ed upon as a"ountin+ to
abandon"ent. #t is ar+ued that since petitioner did not infor" the co"pany that she *as sick,
did not file a sick leave and did not also present a "edical certificate to support her illness for
a period of three "onths, she *as considered absent *ithout leave, and to have abandoned
her /ob.
On the other hand, petitioner "aintains that, contrary to private respondentsT alle+ation that
she abandoned her *ork, her serious illness *hich necessitated her confine"ent in a hospital
for al"ost three ;) "onths, caused her inability to report for *ork.
The petition is "eritorious.
!or une-plained absence to constitute abandon"ent, there "ust be a clear, deliberate and
un/ustified refusal on the part of the e"ployee to continue his e"ploy"ent, *ithout any
intention of returnin+.D(E The Court has repeatedly held that "ere absence does not suffice to
constitute abandon"ent. The absence "ust be acco"panied by overt acts unerrin+ly
sho*in+ that the e"ployee si"ply does not *ant to *ork any"ore. #n the case of 'rtemio
Labor, et a". vs. !LR# and Go"d #it1 #ommercia" #omp"e+, Inc. and Rud1 ?1,D5E it *as held
that to constitute abandon"ent, t*o ele"ents "ust concur, to *itA 1) the failure to report for
*ork or absence *ithout valid or /ustifiable reason, and 4) clear intention to sever the
e"ployer.e"ployee relationship, with the second e"ement as the more determinative factor
and bein$ manifested b1 some overt acts.
#n the case at bar, petitionerTs absence *as e-plained by the undeniable fact that she *as
confined for treat"ent in several hospitals for around three ;) "onths. The clai" of
respondent ?orkis that it *as not infor"ed of the sickness of petitioner is belied by the fact
that on October 1', 1990, the day before petitioner stopped +oin+ to *ork, she collapsed
*ithin the office pre"ises and *as i""ediately rushed to a hospital. %uch fact should e-plain
*hy petitioner dee"ed it unnecessary to infor" respondent ?orkis that she *as sick.
>oreover, private respondents *ere apparently told that the petitioner *as ill because in the
letter of ter"ination dated ?ove"ber 4, 1990, they advised petitioner that the co"pany has
decided to replace her as her Cpresent i"":hea"th condition has "ade you her) incapable of
perfor"in+ your her) assi+ned duties and functions effectively.C That she did not file any sick
leave *as of no "o"ent considerin+ that there *as no co""unication fro" the respondent
co"pany re+ardin+ the status of petitionerTs e"ploy"ent. The said letter of ter"ination, dated
?ove"ber 4, 1990, *as only received by petitioner in 7anuary 1991, after she *rote the"
private respondents) on 8ece"ber 45, 1990, re=uestin+ financial assistance.
The additional +round cited by the private respondents for the dis"issal of petitioner *as loss
of trust and confidence as a result of alle+ed defalcation of co"pany funds co""itted by
petitioner. They theori0ed that durin+ an audit and inventory conducted by >r. <ernando
7ua"an, *ho replaced petitioner as cashierNbookkeeper, unaccounted co"pany funds in
petitionerTs custody *ere discovered such that on October 19, 1990, a letter infor"in+
petitioner of such unaccounted funds, to+ether *ith an attached state"ent of account, *as
sent to petitioner and received by her husband 7o/o Cru0. $ follo*.up letter *as sent to
petitioner on October 4', 1990, but petitioner continued to i+nore the sa"e and failed to reply
thereto. #t is private respondentsT sub"ission that the discovery of the "issin+ funds in
petitionerTs custody, her une-plained disappearance and prolon+ed absence "ilitate a+ainst
the protestation of innocence of petitioner and are inculpatory facts and circu"stances of
defalcation a+ainst herF private respondents concluded.
!or her part, petitioner countered that the alle+ations of private respondents are baseless.
$ccordin+ to her, she *as not present *hen the audit *as alle+edly conducted and she *as
neither infor"ed of the char+es a+ainst her nor +iven an opportunity to refute the sa"e. %he
denied receivin+ the letters re=uirin+ her to e-plain the "issin+ funds on the dates they *ere
supposedly sent. >oreover, >r. 7ua"an, *ho alle+edly conducted the audit, did not testify
and neither *as his affidavit presented before the 3abor $rbiter. 6hat *as introduced as
evidence of the alle+ed defalcation *as the affidavit of a certain >r. 9lenito Palan+, *hich
affidavit could not be +iven credence because the latter *as not the one *ho conducted the
audit and had no personal kno*led+e of the defalcation. &eferences *ere "ade to
unaccounted co"pany funds alle+edly in the possession of petitioner but there *as no
cate+orical state"ent as to ho* such shorta+es *ere caused, the audit procedure observed
and it *as petitioner *ho *as responsible for the said shorta+esF petitioner pointed out.
PetitionerTs posture is sustainable. The letter dated October 19, 1990, alle+edly sent to
petitioner re+ardin+ the defalcation char+es, readsA
CThis is to for"ally infor"ed sic) you that due to your indisposition to dischar+e
your duties and responsibilities as the CashierN2ookkeeper of ?8C Galencia, *e
have no other recourse but to have another person to take your place.
#n the turnover and conduct of investi+ation of <ernando 7ua"an, $ccountin+
!ield %taff sent by the "ana+e"ent to take over your place, the follo*in+ thin+s
*ere uncoveredA
1. @naccounted cash fro" the collections of October 14 and 1;, 1990 of PB,;('
and P4,(14, respectively, totalin+ to P5,056F These unaccounted cash *ere
deter"ined fro" the official receipts copies of the branch.
4. @naccounted unclai"ed salaries and *a+es of C%&s Pedro Gersales and
?ilo Pa"utun+an of P596.1B and P(00.00 respectively, totalin+ to P1,B96.1B
%ince it is indeter"inable *hen you can report back to *ork and account the
above"entioned unaccounted cash *e *ill be forced to apply your provident
fund to these accountabilities. Please refer to the attached su""ary of your
partial accountabilities *ith the co"pany.CD9E
The aforesaid letter "ade "ention of the alle+ed unaccounted funds in petitionerTs custody
but no receipts, docu"ents and other proofs *ere attached to prove the collection and receipt
by petitioner of the a"ounts therein listed. The attached state"ent of account is of no
probative value because it *as /ust a su""ary of petitionerTs alle+ed accountabilities. #t does
not suffice to sho* that petitioner did receive, retain and convert funds in her custody.
6hat is "ore, private respondents failed to prove that a copy of the October 19, 1990 letter
*as really sent to and received by petitioner. The alle+ation that said letter as *ell as the
follo*.up letter dated October 4', 1990 *ere received by her husband cannot be relied upon
because the private respondents did not adduce any evidence that petitionerTs husband did
really receive sub/ect letters. #t is also ne+ated by the fact that in later co""unications of
private respondents to the petitioner, no "ention *as ever "ade about her alle+ed
defalcation. #n a letter dated !ebruary ', 1991, or al"ost four ') "onths after the petitioner
*as reportedly infor"ed of the defalcation char+es a+ainst her on October 19, 1990, no
"ention *as ever "ade of petitionerTs alle+ed accountabilities. $s a "atter of fact, the letter
/ust apprised petitioner of the a"ount of separation pay due her, and of the decision of the
co"pany to deduct therefro" the a"ount o*in+ fro" the vehicle she ac=uired fro" the
co"pany under a leasin+ unit planA
C--- the net a"ount due you at PesosA T*elve Thousand T*o <undred T*enty.
Three and t*enty centavos P14, 44;.40).
--- --- ---
--- *e *ill deduct the correspondin+ fees includin+ that for co"pulsory TP3
fro" your separation pay. ---.
6e *ill be preparin+ the separation pay after the re+istration has been rene*ed
and this *ill be for*arded to you i""ediately to+ether *ith the =uit clai" *hich
*ill serve as clearance for the branch to release your >C after you have si+ned
the sa"e.
--- --- ---CD10E
$nd in the follo*in+ letter sent to petitioner on 7anuary 1', 1991, reiteratin+ the co"panyTs
decision to ter"inate her for health reasons, the co"pany even assured her that she *ould
still be considered for any future vacancy in the co"pany, to *itA
C6e are +lad that you have already recovered althou+h partially, and rest
assured that once you *ill beco"e co"pletely healed in the future and certified
by your doctor to be physically fit to return to *ork, *e *ill still consider you for
any vacancy in the co"pany. --- --- ---CD11E
#f it *ere true that petitioner *as +uilty of "isappropriation of co"pany funds and she *as
ter"inated for loss of trust and confidence, *hy did respondent ?orkis still pro"ise petitioner
a future e"ploy"ent in the co"pany. @ntenable is respondentsT contention that *hen they
ter"inated petitioner for health reasons, they intentionally did not "ake "ention of the alle+ed
defalcation because they *anted to +ive petitioner a +raceful e-it fro" the co"pany.
8efalcation or "isappropriation of co"pany funds if true is too serious an offense and breach
of trust not to be e-posed at the first opportunity.
#n the case of 'rtemio Labor, et a". vs. !LR#, Go"d #it1 #ommercia" #omp"e+, Inc. and Rud1
?1,D14E this Court held that the ri+ht of an e"ployer to dis"iss e"ployees on the +round of
loss of trust and confidence "ust not be e-ercised arbitrarily and *ithout /ust cause. !or loss
of trust and confidence to be a valid +round for dis"issal of an e"ployee, it "ust be
substantial and founded on clearly established facts sufficient to *arrant the e"ployeeTs
separation fro" e"ploy"ent. 3oss of confidence "ust not be used as a subterfu+e for
causes *hich are i"proper, ille+al or un/ustifiedF it "ust be +enuine, not a "ere afterthou+ht,
to /ustify earlier action taken in bad faith.D1;E 2ecause of its sub/ective nature, this Court has
been very scrutini0in+ in cases of dis"issal based on loss of trust and confidence because
the sa"e can easily be concocted by an abusive e"ployer. Thus, *hen the breach of trust or
loss of confidence theori0ed upon is not borne by clearly established facts, such dis"issal on
the +round of loss and confidence cannot be allo*ed. #n the case under consideration,
evidence is utterly *antin+ as to the defalcation alle+edly perpetrated by the petitioner.
Conse=uently, her dis"issal on the +round of loss of confidence cannot be countenanced.
6hat is "ore, as inti"ated by petitioner, private respondents *ere re"iss in their duty to
afford her due process. $n e"ployee "ay only be dis"issed for /ust or authori0ed causes and
the le+ality of dis"issal of an e"ployee hin+es onA a) the le+ality of the act of dis"issalF that
is dis"issal on the +rounds provided for under $rticle 45; no* 454) of the ?e* 3abor Code
and b) the le+ality in the "anner of dis"issal.D1'E The la* re=uires that an e"ployee sou+ht
to be dis"issed "ust be served t*o *ritten notices before ter"ination of his e"ploy"ent.
The first notice is to apprise the e"ployee of the particular acts or o"issions by reason of
*hich his dis"issal has been decided uponF and the second notice is to infor" the e"ployee
of the e"ployerTs decision to dis"iss hi". !ailure to co"ply *ith the re=uire"ent of t*o
notices "akes the dis"issal ille+al. The procedure is "andatory. ?on.observance thereof
renders the dis"issal of an e"ployee ille+al and void.D1BE
&ecords on hand sho* that prior to the letter of ter"ination afore"entioned, petitioner *as
never notified, throu+h a "e"o or letter, of the "issin+ funds alluded to. ?either *as she
re=uired to +ive her side re+ardin+ the alle+ed "isappropriation or defalcation of co"pany
funds bein+ i"puted to her. $s pointed out by the %olicitor Heneral, petitioner *as never
served *ith notices by the private respondents, verbally or in *ritin+, to infor" her of the
char+es a+ainst her and to re=uire her to ans*er such char+es. #t bears stressin+ that the
respondents failed to establish that sub/ect letter of October 19, 1990 *as received by
petitioner or her husband. $s a "atter of fact, fro" the evidence it can be +leaned that the
said letter *as antedated so as to fei+n co"pliance *ith le+al re=uire"ents.
There is "erit in petitionerTs sub"ission that the a*ard of "oral and e-e"plary da"a+es in
her favor is *arranted by her un/ustified dis"issal. $*ard of "oral and e-e"plary da"a+es
for an ille+ally dis"issed e"ployee is proper *here the e"ployee had been harrassed and
arbitrarily ter"inated by the e"ployer.D16E >oral da"a+es "ay be a*arded to co"pensate
one for diverse in/uries such as "ental an+uish, bes"irched reputation, *ounded feelin+s
and social hu"iliation occasioned by the e"ployerTs unreasonable dis"issal of the e"ployee.
This Court has consistently accorded the *orkin+ class a ri+ht to recover da"a+es for un/ust
dis"issals tainted *ith bad faithF *here the "otive of the e"ployer in dis"issin+ the
e"ployee is far fro" noble. The a*ard of such da"a+es is based not on the 3abor Code but
on $rticle 440 of the Civil Code. <o*ever, under the attendant facts and circu"stances, the
Court is of the sense that the a"ount of One <undred T*enty Thousand P140,000.00)
Pesos a*arded by the 3abor $rbiter for "oral and e-e"plary da"a+es is too "uch. !ifty
Thousand PB0,000.00) Pesos of "oral da"a+es and Ten Thousand P10,000.00) Pesos of
e-e"plary da"a+es should suffice.
>HEREFORE, the petition is H&$?T98F the resolution of ?ational 3abor &elations
Co""ission in ?3&C Case ?o. >.001'B5.9; is %9T $%#89F and the resolution of the 3abor
$rbiter dated >ay 45, 199;, in ?3&C &$2 Case ?o. 10.0;.00411.91 is hereby
&9#?%T$T98, *ith the "odification that the a*ard of da"a+es is reduced to !ifty Thousand
PB0,000.00) Pesos, as "oral da"a+es, and Ten Thousand P10,000.00) Pesos, as
e-e"plary da"a+es. Costs a+ainst ?orkis 8istributors, #nc.
SO ORDERED.
Me"o, (#hairman), /itu$, and Gon,a$a:Re1es, --., concur.
%an$aniban, -., no part, for"er partner of a party,s counsel.
;G.R. No. 1(0/)0 A#<#9' 11, 2010=
PHIM*O IND+STRIES, IN*., PETITIONER, VS. PHIM*O IND+STRIES LA1OR
ASSO*IATION >PILA?, AND ERLINDA VA2-+E2, RI*ARDO @A SA*RISTAN, LEONIDA
*ATALAN, MABIMO PEDRO, NATHANIELA DIMA*+LANGAN,C RODOLFO MO5I*O,
ROMEO *ARAMAN2A, RE.NALDO GANITANO, AL1ERTO 1AS*ON*ILLO,CC AND
RAMON FAL*IS, IN THEIR *APA*IT. AS OFFI*ERS OF PILA, AND ANGELITA
1ALOSA,CCC DANILO 1ANAAG, A1RAHAM *ADA., ALFONSO *LA+DIO, FRAN*IS*O
DALISA.,CCCC ANGELITO DE5AN,CCCCC PHILIP GAR*ES, NI*ANOR ILAGAN,
FLOREN*IO LI1ONG*OGON,CCCCCC NEMESIO MAMONONG, TEOFILO MANALILI,
ALFREDO PEARSON,CCCCCCC MARIO PEREA,CCCCCCCC RENATO RAMOS, MARIANO
ROSALES, PA1LO SARMIENTO, RODOLFO TOLENTINO, FELIPE VILLAREAL,
ARSENIO 2AMORA, DANILO 1ALTA2AR, ROGER *A1ER,CCCCCCCCC RE.NALDO
*AMARIN, 1ERNARDO *+ADRA,CCCCCCCCCC ANGELITO DE G+2MAN, GERARDO
FELI*IANO,CCCCCCCCCCC ALEB I1ADEE2, 1EN5AMIN 5+AN, SR., RAMON MA*AALA.,
GON2ALO MANALILI, RA+L MI*IANO, HILARIO PEDEA, TERESA
PERMO*ILLO,CCCCCCCCCCCC ERNESTO RIO, RODOLFO SANIDAD, RAFAEL STA. ANA,
5+LIAN T+G+IN AND AMELIA 2AMORA, AS MEM1ERS OF PILA, RESPONDENTS.
D E * I S I O N
1RION, *.
4efore us is the petition for revie# on certiorariNO filed by petitioner Phimco Industries, Inc.
$,2$CO%, see3ing to reverse and set aside the decision,N)O dated February (, )((!, and the
resolution,N=O dated 5ecember ), )((', of the Court of ,ppeals $CA% in C,--.E. 6P <o. "(==+. The
assailed C, decision dismissed P0IMCA/s petition for certiorari that challenged the resolution, dated
5ecember )>, >>;, and the decision, dated February )(, )((), of the <ational @abor Eelations
Commission $3!-C%1 the assailed C, resolution denied P0IMCA/s subse7uent motion for
reconsideration.
FA*T+AL 1A*4GRO+ND
The facts of the case, gathered from the records, are briefly summari?ed belo#.
P0IMCA is a corporation engaged in the production of matches, #ith principal address at Phimco
Compound, Feli* Manalo 6t., 6ta. ,na, Manila. Eespondent Phimco Industries @abor ,ssociation
$2!A% is the duly authori?ed bargaining representative of P0IMCA/s daily-paid #or3ers. The !"
individually named respondents are PI@, officers and members.
9hen the last collective bargaining agreement #as about to e*pire on 5ecember =, >>!, P0IMCA
and PI@, negotiated for its rene#al. The negotiation resulted in a deadloc3 on economic issues, mainly
due to disagreements on salary increases and benefits.
An March >, >>', PI@, filed #ith the <ational Conciliation and Mediation 4oard $3C$B? a <otice
of 6tri3e on the ground of the bargaining deadloc3. 6even $"% days later, or on March +, >>', the
union conducted a stri3e vote1 a majority of the union members voted for a stri3e as its response to the
bargaining impasse. An March ", >>', PI@, filed the stri3e vote results #ith the <CM4. Thirty-five
$='% days later, or on ,pril ), >>', PI@, staged a stri3e.
An May =, >>', P0IMCA filed #ith the <@EC a petition for preliminary injunction and temporary
restraining order $+-O%, to enjoin the stri3ers from preventing - through force, intimidation and
coercion - the ingress and egress of non-stri3ing employees into and from the company premises. An
May ', >>', the <@EC issued an e)-parte TEA, effective for a period of t#enty $)(% days, or until
Cune ', >>'.
An Cune )=, >>', P0IMCA sent a letter to thirty-si* $=+% union members, directing them to e*plain
#ithin t#enty-four $)!% hours #hy they should not be dismissed for the illegal acts they committed
during the stri3e. Three days later, or on Cune )+, >>', the thirty-si* $=+% union members #ere
informed of their dismissal.
An Culy +, >>', PI@, filed a complaint for unfair labor practice and illegal dismissal $ille"al dis'issal
case% #ith the <@EC. The case #as doc3eted as <@EC <CE Case <o. ((-("-(!"('->', and raffled to
@abor ,rbiter $!A% Pablo C. 8spiritu, Cr.
An Culy ", >>', then ,cting @abor 6ecretary Cose 6. 4rillantes assumed jurisdiction over the labor
dispute, and ordered all the stri3ing employees $e*cept those #ho #ere handed termination papers on
Cune )+, >>'% to return to #or3 #ithin t#enty-four $)!% hours from receipt of the order. The 6ecretary
ordered P0IMCA to accept the stri3ing employees, under the same terms and conditions prevailing
prior to the stri3e.N!O An the same day, PI@, ended its stri3e.
An ,ugust );, >>', P0IMCA filed a Petition to 5eclare the 6tri3e Illegal $ille"al stri&e case% #ith the
<@EC, #ith a prayer for the dismissal of PI@, officers and members #ho 3no#ingly participated in
the illegal stri3e. P0IMCA claimed that the stri3ers prevented ingress to and egress from the P0IMCA
compound, thereby paraly?ing P0IMCA/s operations. The case #as doc3eted as <@EC <CE Case <o.
((-(;-(+(=->', and raffled to @, Covencio @l. Mayor.
An March !, >>+, the respondents filed their Position Paper in the illegal stri3e case. They countered
that they complied #ith all the legal re7uirements for the staging of the stri3e, they put up no barricade,
and conducted their stri3e peacefully, in an orderly and la#ful manner, #ithout incident.
@, Mayor decided the case on February !, >>;,N'O and found the stri3e illegal1 the respondents
committed prohibited acts during the stri3e by bloc3ing the ingress to and egress from P0IMCA/s
premises and preventing the non-stri3ing employees from reporting for #or3. 0e observed that it #as
not enough that the pic3et of the stri3ers #as a moving pic3et, since the stri3ers should allo# the free
passage to the entrance and e*it points of the company premises. Thus, @, Mayor declared that the
respondent employees, PI@, officers and members, have lost their employment status.
An March ', >>;, PI@, and its officers and members appealed @, Mayor/s decision to the <@EC.
THE NLR* R+LING
The <@EC decided the appeal on 5ecember )>, >>;, and set aside @, Mayor/s decision.N+O The
<@EC did not give #eight to P0IMCA/s evidence, and relied instead on the respondents/ evidence
sho#ing that the union conducted a peaceful moving pic3et.
An Canuary );, >>>, P0IMCA filed a motion for reconsideration in the illegal stri3e case.N"O
In a parallel development, @, 8spiritu decided the union/s illegal dismissal case on March ), >>>. 0e
ruled the respondents/ dismissal as illegal, and ordered their reinstatement #ith payment of bac3#ages.
P0IMCA appealed @, 8spiritu/s decision to the <@EC.
Pending the resolution of P0IMCA/s motion for reconsideration in the illegal stri3e case and the appeal
of the illegal dismissal case, P0IMCA moved for the consolidation of the t#o $)% cases. The <@EC
acted favorably on the motion and consolidated the t#o $)% cases in its Arder dated ,ugust ', >>>.
An February )(, )((), the <@EC rendered its 5ecision in the consolidated cases, ruling totally in the
union/s favor.N;O It dismissed the appeal of the illegal dismissal case, and denied P0IMCA/s motion for
reconsideration in the illegal stri3e case. The <@EC found that the pic3et conducted by the stri3ing
employees #as not an illegal bloc3ade and did not obstruct the points of entry to and e*it from the
company/s premises1 the pictures submitted by the respondents revealed that the pic3et #as moving,
not stationary. 9ith respect to the illegal dismissal charge, the <@EC observed that the stri3ing
employees #ere not given ample opportunity to e*plain their side after receipt of the Cune )=, >>'
letter. Thus, the <@EC affirmed the 5ecision of @, 8spiritu #ith respect to the payment of bac3#ages
until the promulgation of the decision, plus separation pay at one $% month salary per year of service in
lieu of reinstatement, and (I of the monetary a#ard as attorney/s fees. It ruled out reinstatement
because of the damages sustained by the company brought about by the stri3e.
An March !, )((), P0IMCA filed a motion for reconsideration of the consolidated decision.
An ,pril )+, )((), #ithout #aiting for the result of its motion for reconsideration, P0IMCA elevated
its case to the C, through a petition for certiorari under Eule +' of the Eules of Court.N>O
THE *A R+LING
In a 5ecisionN(O promulgated on February (, )((!, the C, dismissed P0IMCA/s petition for
certiorari. The C, noted that the <@EC findings, that the pic3et #as peaceful and that P0IMCA/s
evidence failed to sho# that the pic3et constituted an illegal bloc3ade or that it obstructed the points of
entry to and e*it from the company premises, #ere supported by substantial evidence.
P0IMCA came to us through the present petition after the C, deniedNO
P0IMCA/s motion for
reconsideration.N)O
THE PETITION
The petitioner argues that the stri3e #as illegal because the respondents committed the prohibited acts
under ,rticle )+!$e% of the @abor Code, such as bloc3ing the ingress and egress of the company
premises, threat, coercion, and intimidation, as established by the evidence on record.
THE *ASE FOR THE RESPONDENTS
The respondents, on the other hand, submit that the issues raised in this case are factual in nature that
#e cannot generally touch in a petition for revie#, unless compelling reasons e*ist1 the company has
not sho#n any such compelling reason as the pic3et #as peaceful and uneventful, and no human
barricade bloc3ed the company premises.
THE ISS+E
In $ontoya v. +rans'ed $anila Corporation,N=O #e laid do#n the basic approach that should be
follo#ed in the revie# of C, decisions in labor cases, thus.
In a Eule !' revie#, #e consider the correctness of the assailed C, decision, in contrast
#ith the revie# for jurisdictional error that #e underta3e under Eule +'. Furthermore, Eule
!' limits us to the revie# of 7uestions of la# raised against the assailed C, decision. In
ruling for legal correctness, #e have to vie# the C, decision in the same conte*t that the
petition for certiorari it ruled upon #as presented to it1 #e have to e*amine the C, decision
from the prism of #hether it correctly determined the presence or absence of grave abuse of
discretion in the <@EC decision before it, not on the basis of #hether the <@EC decision
on the merits of the case #as correct. In other #ords, #e have to be 3eenly a#are that the
C, undertoo3 a Eule +' revie#, not a revie# on appeal, of the <@EC decision challenged
before it. This is the approach that should be basic in a Eule !' revie# of a C, ruling in a
labor case. In 7uestion form, the 7uestion to as3 is. 5id the C, correctly determine #hether
the <@EC committed grave abuse of discretion in ruling on the caseB
In this light, the core issue in the present case is #hether the C, correctly ruled that the <@EC did not
act #ith grave abuse of discretion in ruling that the union/s stri3e #as legal.
O+R R+LING
/e find the petition partly meritorious.
!e3uisites of a alid stri2e
, stri3e is the most po#erful #eapon of #or3ers in their struggle #ith management in the course of
setting their terms and conditions of employment. 4ecause it is premised on the concept of economic
#ar bet#een labor and management, it is a #eapon that can either breathe life to or destroy the union
and its members, and one that must also necessarily affect management and its members.N!O
In light of these effects, the decision to declare a stri3e must be e*ercised responsibly and must al#ays
rest on rational basis, free from emotionalism, and uns#ayed by the tempers and tantrums of hot heads1
it must focus on legitimate union interests. To be legitimate, a stri3e should not be antithetical to public
#elfare, and must be pursued #ithin legal bounds. The right to stri3e as a means of attaining social
justice is never meant to oppress or destroy anyone, least of all, the employer.N'O
6ince stri3es affect not only the relationship bet#een labor and management but also the general peace
and progress of the community, the la# has provided limitations on the right to stri3e. Procedurally, for
a stri3e to be valid, it must comply #ith ,rticle )+=N+O of the @abor Code, #hich re7uires that. $a% a
notice of stri3e be filed #ith the 5epartment of @abor and 8mployment $%O!0% =( days before the
intended date thereof, or ' days in case of unfair labor practice1 $b% a stri3e vote be approved by a
majority of the total union membership in the bargaining unit concerned, obtained by secret ballot in a
meeting called for that purpose1 and $c% a notice be given to the 5A@8 of the results of the voting at
least seven days before the intended stri3e.
These re7uirements are mandatory, and the union/s failure to comply renders the stri3e illegal. N"O The
' to =(-day cooling-off period is designed to afford the parties the opportunity to amicably resolve the
dispute #ith the assistance of the <CM4 conciliatorHmediator, #hile the seven-day stri3e ban is
intended to give the 5A@8 an opportunity to verify #hether the projected stri3e really carries the
imprimatur of the majority of the union members.N;O
In the present case, the respondents fully satisfied the legal procedural re7uirements1 a stri3e notice #as
filed on March >, >>'1 a stri3e vote #as reached on March +, >>'1 notification of the stri3e vote
#as filed #ith the 5A@8 on March ", >>'1 and the actual stri3e #as launched only on ,pril )',
>>'.
Stri2e may be illegal for commission of prohibited acts
5espite the validity of the purpose of a stri3e and compliance #ith the procedural re7uirements, a stri3e
may still be held illegal #here the means employed are illegal.N>O The means become illegal #hen
they come #ithin the prohibitions under ,rticle )+!$e% of the @abor Code #hich provides.
<o person engaged in pic3eting shall commit any act of violence, coercion or intimidation
or obstruct the free ingress to or egress from the employer/s premises for la#ful purposes,
or obstruct public thoroughfares.
1a9!8 o6 o#r !Fa:&6a'&o6 oG 'h! !H&8!6c! Ih&ch 'h! LA H&!I!8 8&GG!r!6'%7 Gro: 'h! NLR* a68
'h! *A, I! G&68 'h! PILA 9'r&J! &%%!<a%. 9e intervene and rule even on the evidentiary and factual
issues of this case as both the <@EC and the C, grossly misread the evidence, leading them to
inordinately incorrect conclusions, both factual and legal. 9hile the stri3e undisputably had not been
marred by actual violence and patent intimidation, the pic3eting that respondent PI@, officers and
members undertoo3 as part of their stri3e activities effectively bloc3ed the free ingress to and egress
from P0IMCA/s premises, thus preventing non-stri3ing employees and company vehicles from
entering the P0IMCA compound. In this manner, the pic3eters violated ,rticle )+!$e% of the @abor
Code.
The Eidence
9e gather from the case record the follo#ing pieces of relevant evidence adduced in the compulsory
arbitration proceedings.N)(O
(or the Company
. Pictures ta3en during the stri3e, sho#ing that the respondents prevented free ingress to and egress
from the company premises1N)O
). ,ffidavit of P0IMCA 0uman Eesources Manager Francis Ferdinand Cinco, stating that he #as one
of the employees prevented by the stri3ers from entering the P0IMCA premises1N))O
=. ,ffidavit of Cinco, identifying 8rlinda 2a?7ue?, Eicardo 6acristan, @eonida Catalan, Ma*imo Pedro,
<athaniela E. 5imaculangan, Eodolfo Mojico, Eomeo Caraman?a, Eeynaldo -anitano, ,lberto
4asconcillo, and Eamon Falcis as PI@, officers1N)=O
!. ,ffidavit of Cinco identifying other members of PI@,1N)!O
'. Folder , containing pictures ta3en during the stri3e identifying and sho#ing @eonida Catalan,
Eenato Eamos, ,rsenio Pamora, Eeynaldo -anitano, ,melia Pamora, ,ngelito 5ejan, Teresa
Permocillo, and Francisco 5alisay as the persons preventing Cinco and his group from entering the
company premises1N)'O
+. Folder ), #ith pictures ta3en on May =(, >>', sho#ing Cinco, together #ith non-stri3ing P0IMCA
employees, reporting for #or3 but being refused entry by stri3ers Teofilo Manalili, <athaniela
5imaculangan, 4ernando Cuadra, Ma*imo Pedro, <icanor Ilagan, Culian Tuguin, <emesio Mamonong,
,braham Caday, 8rnesto Eio, 4enjamin Cuan, 6r., Eamon Macaalay, -erardo Feliciano, ,lberto
4asconcillo, Eodolfo 6anidad, Mariano Eosales, Eoger Caber, ,ngelito de -u?man, ,ngelito 4alosa
and Philip -arces #ho bloc3ed the company gate1N)+O
". Folder =, #ith pictures ta3en on May =(, >>', sho#ing the respondents denying free ingress to and
egress from the company premises1N)"O
;. Folder !, #ith pictures ta3en during the stri3e, sho#ing that non-stri3ing employees failed to enter
the company premises as a result of the respondents/ refusal to let them in1N);O
>. ,ffidavit of Coa7uin ,guilar stating that the pictures presented by Cinco #ere ta3en during the stri3e1
N)>O
(. Pictures ta3en by ,guilar during the stri3e, sho#ing non-stri3ing employees being refused entry by
the respondents1N=(O
. Coint affidavit of Arlando Marfil and Eodolfo 5igo, identifying the pictures they too3 during the
stri3e, sho#ing that the respondents bloc3ed ingress to and egress from the company premises1N=O
and,
). Testimonies of P0IMCA employees Eodolfo 8va, ,guilar and Cinco, as #ell as those of PI@,
officers Ma*imo Pedro and @eonida Catalan.
(or the !espondents
. ,ffidavit of @eonida Catalan, stating that the PI@, stri3e complied #ith all the legal re7uirements,
and the stri3eHpic3et #as conducted peacefully #ith no incident of any illegality1N=)O
). ,ffidavit of Ma*imo Pedro, stating that the stri3eHpic3et #as conducted peacefully1 the pic3et #as
al#ays moving #ith no acts of illegality having been committed during the stri3e1N==O
=. Certification of Police 6tation Commander 4ienvenido de los Eeyes that during the stri3e there #as
no report of any unto#ard incident1N=!O
!. Certification of Eev. Father 8ric3 ,deviso of 5ambanang 4ayan Parish Church that the stri3e #as
peaceful and #ithout any unto#ard incident1N='O
'. Certification of Priest-In-Charge ,ngelito Fausto of the Philippine Independent Church in Punta,
6anta ,na, that the stri3e complied #ith all the re7uirements for a la#ful stri3e, and the stri3ers
conducted themselves in a peaceful manner1N=+O
+. Clearance issued by unon" Baran"ay Mario A. dela Eosa and Baran"ay 6ecretary Pascual
-esmundo, Cr. that the stri3e from ,pril ) to Culy ", >>' #as conducted in an orderly manner #ith no
complaints filed1N="O and,
". Testimonies at the compulsory arbitration proceedings.
In its resolution of 5ecember )>, >>;,N=;O the <@EC declared that &the string of proofs& the company
presented #as &over#helmingly counterbalanced by the numerous pieces of evidence adduced by
respondents * * * all depicting a common story that respondents put up a peaceful moving pic3et, and
did not commit any illegal acts * * * specifically obstructing the ingress to and egress from the
company premisesN.O&N=>O
3! 8&9a<r!! I&'h 'h&9 G&68&6< as the purported &peaceful moving pic3et& upon #hich the <@EC
resolution #as anchored #as not an innocuous pic3et, contrary to #hat the <@EC said it #as1 the
pic3et, under the evidence presented, did effectively obstruct the entry and e*it points of the company
premises on various occasions.
To stri3e is to #ithhold or to stop #or3 by the concerted action of employees as a result of an industrial
or labor dispute.N!(O The #or3 stoppage may be accompanied by pic3eting by the stri3ing employees
outside of the company compound. 9hile a stri3e focuses on stoppage of #or3, pic3eting focuses on
publici?ing the labor dispute and its incidents to inform the public of #hat is happening in the company
struc3 against. , pic3et simply means to march to and from the employer/s premises, usually
accompanied by the display of placards and other signs ma3ing 3no#n the facts involved in a labor
dispute.N!O It is a stri3e activity separate and different from the actual stoppage of #or3.
9hile the right of employees to publici?e their dispute falls #ithin the protection of freedom of
e*pressionN!)O and the right to peaceably assemble to air grievances,N!=O these rights are by no means
absolute. Protected pic3eting does not e*tend to bloc3ing ingress to and egress from the company
premises.N!!O That the pic3et #as moving, #as peaceful and #as not attended by actual violence may
not free it from taints of illegality if the pic3et effectively bloc3ed entry to and e*it from the company
premises.
In this regard, P0IMCA employees Eodolfo 8va and Coa7uin ,guilar, and the company/s 0uman
Eesources Manager Francis Ferdinand Cinco testified during the compulsory arbitration hearings.
,TTF. E8F86. this incident on May )), >>', #hen a coaster or bus attempted to enter
P0IMCA compound, you mentioned that it #as refused entry. 9hy #as this $sic% it refused
entryB
9IT<866. 4ecause at that time, there #as a moving pic3et at the gate that is #hy the bus
#as not able to enter.N!'O
* * * *
Q. 5espite this TEA, #hich #as issued by the <@EC, #ere you allo#ed entry by the
stri3ersB
,. 9e made several attempts to enter the compound, I remember on May ", >>', #e tried
to enter the P0IMCA compound but #e #ere not allo#ed entry.
Q. ,side from May )", >>', #ere there any other instances #herein you #ere not allo#ed
entry at P0IMCA compoundB
,. An May )>, I recall I #as riding #ith our Production Manager #ith the Pic3-up. 9e
tried to enter but #e #ere not allo#ed by the stri3ers.N!+O
* * * *
,E4IT8E M,FAE. 0o# did the stri3ers bloc3 the ingress of the companyB
,. They hold around, joining hands, moving pic3et.N!"O
* * * *
,E4IT8E M,FAE. Eeform the 7uestion, and because of that moving pic3et conducted by
the stri3ers, no employees or vehicles can come in or go out of the premisesB
,. <one, sir.N!;O
These accounts #ere confirmed by the admissions of respondent PI@, officers Ma*imo Pedro and
@eonida Catalan that the stri3ers prevented non-stri3ing employees from entering the company
premises. ,ccording to these union officers.
,TTF. C0:,. Mr. #itness, do you recall an incident #hen a group of managers of
P0IMCA, #ith several of the monthly paid employees #ho tried to enter the P0IMCA
compound during the stri3eB
ME. P85EA. Fes, sir.
,TTF. C0:,. Can you tell us if these $sic% group of managers headed by Francis Cinco
entered the compound of P0IMCA on that day, #hen they tried to enterB
ME. P85EA. <o, sir. They #ere not able to enter.N!>O
* * * *
,TTF. C0:,. 5espite having been escorted by police 5elos Eeyes, you still did not give
#ay, and instead proceeded #ith your moving pic3etB
ME. P85EA. Fes, sir.
,TTF. C0:,. In short, these people #ere not able to enter the premises of P0IMCA, Fes
or <o.
ME. P85EA. Fes, sir.N'(O
* * * *
,TTF. C0:,. Madam #itness, even if Major 5elos Eeyes instructed you to give #ay so
as to allo# the employees and managers to enter the premises, you and your co-employees
did not give #ayB
M6. C,T,@,<. <o sir.
,TTF. C0:,. the managers and the employees #ere not able to enter the premisesB
M6. C,T,@,<. Fes, sir.N'O
The <@EC resolution itself noted the above testimonial evidence, &all building up a scenario that the
moving pic3et put up by NtheO respondents obstructed the ingress to and egress from the company
premisesN,O&N')O yet it ignored the clear import of the testimonies as to the true nature of the pic3et.
Contrary to the <@EC characteri?ation that it #as a &peaceful moving pic3et,& it stood, in fact, as an
obstruction to the company/s points of ingress and egress.
6ignificantly, the testimonies adduced #ere validated by the photographs ta3en of the stri3e area,
capturing the stri3e in its various stages and sho#ing ho# the stri3ers actually conducted the pic3et.
9hile the pic3et #as moving, it #as maintained so close to the co'pany "ates that it virtually
constituted an obstruction, especially #hen the stri3ers joined hands, as described by ,guilar, or #ere
moving in circles, hand-to-shoulder, as sho#n by the photographs, that, for all intents and purposes,
bloc3ed the free ingress to and egress from the company premises. In fact, on closer e*amination, it
could be seen that the respondents (ere conductin" the pic&et ri"ht at the co'pany "ates.N'=O
The obstructive nature of the pic3et #as aggravated by the place'ent of benches, #ith stri3ers standing
on top, directly in front of the open #ing of the company gates, clearly obstructin" the entry and e)it
points of the co'pany co'pound.N'!O
9ith a virtual human bloc3ade and real physical obstructions $benches and ma3eshift structures both
outside and inside the gates%,N''O it #as pure conjecture on the part of the <@EC to say that &NtOhe non-
stri3ers and their vehicles #ere * * * free to get in and out of the company compound undisturbed by
the pic3et line.&N'+O <otably, aside from non-stri3ers #ho #ished to report for #or3, company
vehicles li3e#ise could not enter and get out of the factory because of the pic3et and the physical
obstructions the respondents installed. The bloc3ade #ent to the point of causing the build up of traffic
in the immediate vicinity of the stri3e area, as sho#n by photographs.N'"O This, by itself, renders the
pic3et a prohibited activity. Pic3ets may not aggressively interfere #ith the right of peaceful ingress to
and egress from the employer/s shop or obstruct public thoroughfares1 pic3eting is not peaceful #here
the side#al3 or entrance to a place of business is obstructed by pic3eters parading around in a circle or
lying on the side#al3.N';O
9hat the records reveal belies the <@EC observation that &the evidence * * * tends to sho# that #hat
respondents actually did #as #al3ing or patrolling to and fro #ithin the company vicinity and by #ord
of mouth, banner or placard, informing the public concerning the dispute.&N'>O
The &peaceful moving pic3et& that the <@EC noted, influenced apparently by the certifications $Mayor
delos Eeyes, Fr. ,deviso, Fr. Fausto and Baran"ay 6ecretary -esmundo presented in evidence by the
respondents, #as &peaceful& only because of the absence of violence during the stri3e, but the
obstruction of the entry and e*it points of the company premises caused by the respondents/ pic3et #as
by no means a &petty bloc3ing act& or an &insignificant obstructive act.&N+(O
,s #e have stated, #hile the pic3et #as moving, the movement #as in circles, very close to the gates,
#ith the stri3ers in a hand-to-shoulder formation #ithout a brea3 in their ran3s, thus preventing non-
stri3ing #or3ers and vehicles from coming in and getting out. 6upported by actual bloc3ing benches
and obstructions, #hat the union demonstrated #as a very persuasive and 7uietly intimidating strategy
#hose chief aim #as to paraly?e the operations of the company, not solely by the #or3 stoppage of the
participating #or3ers, but by e*cluding the company officials and non-stri3ing employees from access
to and e*it from the company premises. <o doubt, the stri3e caused the company operations
considerable damage, as the <@EC itself recogni?ed #hen it ruled out the reinstatement of the
dismissed stri3ers.N+O
Intimidation
,rticle )+!$e% of the @abor Code tells us that pic3eting carried on #ith violence, coercion or
intimidation is unla#ful.N+)O ,ccording to ,merican jurisprudence, #hat constitutes unla#ful
intimidation depends on the totality of the circumstances.N+=O Force threatened is the e7uivalent of
force e*ercised. There may be unla#ful intimidation #ithout direct threats or overt acts of violence.
9ords or acts #hich are calculated and intended to cause an ordinary person to fear an injury to his
person, business or property are e7uivalent to threats.N+!O
The manner in #hich the respondent union officers and members conducted the pic3et in the present
case had created such an intimidating atmosphere that non-stri3ing employees and even company
vehicles did not dare cross the pic3et line, even #ith police intervention. Those #ho dared cross the
pic3et line #ere stopped. The compulsory arbitration hearings bear this out.
Ma*imo Pedro, a PI@, officer, testified, on Culy =(, >>", that a group of P0IMCA managers led by
Cinco, together #ith several monthly-paid employees, tried to enter the company premises on May )",
>>' #ith police escort1 even then, the pic3eters did not allo# them to enter.N+'O@eonida Catalan,
another union officer, testified that she and the other pic3eters did not give #ay despite the instruction
of Police Major de los Eeyes to the pic3eters to allo# the group to enter the company premises.N++O
$To be sure, police intervention and participation are, as a rule, prohibited acts in a stri3e, but #e note
this intervention solely as indicators of ho# far the union and its members have gone to bloc3 ingress
to and egress from the company premises.%
Further, P0IMCA employee Eodolfo 8va testified that on May )), >>', a company coaster or bus
attempted to enter the P0IMCA compound but it #as refused entry by the &moving pic3et.&N+"O Cinco,
the company personnel manager, also testified that on May )", >>', (hen the 3!-C +-O (as in
force, he and other employees tried to enter the P0IMCA compound, but they #ere not allo#ed entry1
on May )>, >>', Cinco #as #ith the P0IMCA production manager in a pic3-up and they tried to enter
the company compound but, again, they #ere not allo#ed by the stri3ers.N+;O ,nother employee,
Coa7uin ,guilar, #hen as3ed ho# the stri3ers bloc3ed the ingress of the company, replied that the
stri3ers &hold around, joining hands, moving pic3et& and, because of the moving pic3et, no employee
or vehicle could come in and go out of the premises.N+>O
The evidence adduced in the present case cannot be ignored. An balance, it supports the company/s
submission that the respondent PI@, officers and members committed acts during the stri3e prohibited
under ,rticle )+!$e% of the @abor Code. The testimonies of non-stri3ing employees, #ho #ere
prevented from gaining entry into the company premises, and confirmed no less by t#o officers of the
union, are on record.
The photographs of the stri3e scene, also on record, depict the true character of the pic3et1 #hile
moving, it, in fact, constituted a human bloc3ade, obstructing free ingress to and egress from the
company premises, reinforced by benches planted directly in front of the company gates. The
photographs do not lie - these photographs clearly sho# that the pic3eters #ere going in circles,
#ithout any brea3 in their ran3s or closely bunched together, right in front of the gates. Thus, company
vehicles #ere unable to enter the company compound, and #ere bac3ed up several meters into the
street leading to the company gates.
5espite all these clear pieces of evidence of illegal obstruction, the <@EC loo3ed the other #ay and
chose not to see the unmista3able violations of the la# on stri3es by the union and its respondent
officers and members. <eedless to say, #hile the la# protects the rights of the laborer, it authori?es
neither the oppression nor the destruction of the employer.N"(O For grossly ignoring the evidence
before it, the <@EC committed grave abuse of discretion1 for supporting these gross <@EC errors, the
C, committed its o#n reversible error.
)iabilities of union
officers and members
In the determination of the liabilities of the individual respondents, the applicable provision is ,rticle
)+!$a% of the @abor Code.
,rt. )+!. rohibited activities. - $a% * * *
* * * *
,ny union officer #ho 3no#ingly participates in an illegal stri3e and any #or3er or union
officer #ho 3no#ingly participates in the commission of illegal acts during a stri3e may be
declared to have lost his employment status. Provided, That mere participation of a #or3er
in a la#ful stri3e shall not constitute sufficient ground for termination of his employment,
even if a replacement had been hired by the employer during such la#ful stri3e.
9e e*plained in Sa'ahan" $an""a"a(a sa Sulpicio !ines, 2nc.-3A1!U v. Sulpicio !ines, 2nc.N"O
that the effects of illegal stri3es, outlined in ,rticle )+! of the @abor Code, ma3e a distinction bet#een
participating #or3ers and union officers. The services of an ordinary stri3ing #or3er cannot be
terminated for mere participation in an illegal stri3e1 proof must be adduced sho#ing that he or she
committed illegal acts during the stri3e. The services of a participating union officer, on the other hand,
may be terminated, not only #hen he actually commits an illegal act during a stri3e, but also if he
3no#ingly participates in an illegal stri3e.N")O
In all cases, the stri3er must be identified. 4ut proof beyond reasonable doubt is not re7uired1
substantial evidence, available under the attendant circumstances, suffices to justify the imposition of
the penalty of dismissal on participating #or3ers and union officers as above described.N"=O
In the present case, respondents 8rlinda 2a?7ue?, Eicardo 6acristan, @eonida Catalan, Ma*imo Pedro,
<athaniela 5imaculangan, Eodolfo Mojico, Eomeo Caraman?a, Eeynaldo -anitano, ,lberto
4asconcillo,
and Eamon Falcis stand to be dis'issed as participating union officers, pursuant to
,rticle )+!$a%, paragraph =, of the @abor Code. This provision imposes the penalty of dismissal on
&any union officer #ho 3no#ingly participates in an illegal stri3e.& The la# grants the employer the
option of declaring a union officer #ho participated in an illegal stri3e as having lost his employment.
N"!O
P0IMCA #as able to individually identify the participating union members thru the affidavits of
P0IMCA employees Martimer PanisN"'O and Eodrigo ,. Arti?,N"+O and Personnel Manager Francis
Ferdinand Cinco,N""O and the photographsN";O of Coa7uin ,guilar. Identified #ere respondents ,ngelita
4alosa, 5anilo 4anaag, ,braham Caday, ,lfonso Claudio, Francisco 5alisay, ,ngelito 5ejan, Philip
-arces, <icanor Ilagan, Florencio @ibongcogon, <emesio Mamonong, Teofilo Manalili, ,lfredo
Pearson, Mario Perea, Eenato Eamos, Mariano Eosales, Pablo 6armiento, Eodolfo Tolentino, Felipe
2illareal, ,rsenio Pamora, 5anilo 4alta?ar, Eoger Caber, Eeynaldo Camarin, 4ernardo Cuadra,
,ngelito de -u?man, -erardo Feliciano, ,le* IbaRSe?, 4enjamin Cuan, 6r., Eamon Macaalay,
-on?alo Manalili, Eaul Miciano, 0ilario PeRSa, Teresa Permocillo, 8rnesto Eio, Eodolfo 6anidad,
Eafael 6ta. ,na, Culian Tuguin and ,melia Pamora as the union members #ho actively participated in
the stri3e by bloc3ing the ingress to and egress from the company premises and preventing the passage
of non-stri3ing employees. For participating in illegally bloc3ing ingress to and egress from company
premises, these union members stand to be dismissed for their illegal acts in the conduct of the union/s
stri3e.
P*I0C6 failed to obsere due process
9e find, ho#ever, that P0IMCA violated the re7uirements of due process of the @abor Code #hen it
dismissed the respondents.
:nder ,rticle )""$b%N">O of the @abor Code, the employer must send the employee, #ho is about to be
terminated, a #ritten notice stating the causeHs for termination and must give the employee the
opportunity to be heard and to defend himself.
9e e*plained in Suico v. 3ational !abor -elations Co''ission,N;(O that ,rticle )""$b%, in relation to
,rticle )+!$a% and $e% of the @abor Code recogni?es the right to due process of all #or3ers, #ithout
distinction as to the cause of their termination, even if the cause #as their supposed involvement in
stri3e-related violence prohibited under ,rticle )+!$a%
and $e% of the @abor Code.
To meet the re7uirements of due process in the dismissal of an employee, an employer must furnish
him or her #ith t#o $)% #ritten notices. $% a #ritten notice specifying the grounds for termination and
"ivin" the e'ployee a reasonable opportunity to e)plain his side and $)% another #ritten notice
indicating that, upon due consideration of all circumstances, grounds have been established to justify
the employer/s decision to dismiss the employee.N;O
In the present case, P0IMCA sent a letter, on Cune )=, >>', to thirty-si* $=+% union members,
generally directing them to e*plain #ithin t#enty-four $)!% hours #hy they should not be dismissed for
the illegal acts they committed during the stri3e1 three days later, or on Cune )+, >>', the thirty-si*
$=+% union members #ere informed of their dismissal from employment.
9e do not find this company procedure to be sufficient compliance #ith the due process re7uirements
that the la# guards ?ealously. It does not appear from the evidence that the union officers #ere
specifically informed of the charges against them and given the chance to e*plain and present their
side. 9ithout the specifications they had to respond to, they #ere arbitrarily separated from #or3 in
total disregard of their rights to due process and security of tenure.
,s to the union members, only thirty-si* $=+% of the thirty-seven $="% union members included in this
case #ere notified of the charges against them thru the letters dated Cune )=, >>', but they #ere not
given an ample opportunity to be heard and to defend themselves1 the notice of termination came on
Cune )+, >>', only three $=% days from the first notice - a perfunctory and superficial attempt to
comply #ith the notice re7uirement under the @abor Code. The short interval of time bet#een the first
and second notice spea3s for itself under the circumstances of this case1 mere to3en recognition of the
due process re7uirements #as made, indicating the company/s intent to dismiss the union members
involved, #ithout any meaningful resort to the guarantees accorded them by la#.
:nder the circumstances, #here evidence sufficient to justify the penalty of dismissal has been adduced
but the #or3ers concerned #ere not accorded their essential due process rights, our ruling in A"abon v.
3!-CN;)O finds full application1 the employer, despite the just cause for dismissal, must pay the
dismissed #or3ers nominal damages as indemnity for the violation of the #or3ers/ right to statutory
due process. Prevailing jurisprudence sets the amount of nominal damages at P=(,(((.((, #hich same
amount #e find sufficient and appropriate in the present case.N;=O
3HEREFORE, in light of all the foregoing, #e hereby REVERSE and SET ASIDE the decision
dated February (, )((! and the resolution dated 5ecember ), )((' of the Court of ,ppeals in C,-
-.E. 6P <o. "(==+, upholding the rulings of the <ational @abor Eelations Commission.
The 5ecision, dated February !, >>;, of @abor ,rbiter Covencio @l. Mayor should prevail and is
E8I<6T,T85 #ith the MA5IFIC,TIA< that 8rlinda 2a?7ue?, Eicardo 6acristan, @eonida Catalan,
Ma*imo Pedro, <athaniela 5imaculangan, Eodolfo Mojico, Eomeo Caraman?a, Eeynaldo -anitano,
,lberto 4asconcillo, Eamon Falcis, ,ngelita 4alosa, 5anilo 4anaag, ,braham Caday, ,lfonso
Claudio, Francisco 5alisay, ,ngelito 5ejan, Philip -arces, <icanor Ilagan, Florencio @ibongcogon,
<emesio Mamonong, Teofilo Manalili, ,lfredo Pearson, Mario Perea, Eenato Eamos, Mariano
Eosales, Pablo 6armiento, Eodolfo Tolentino, Felipe 2illareal, ,rsenio Pamora, 5anilo 4alta?ar, Eoger
Caber,
Eeynaldo Camarin, 4ernardo Cuadra, ,ngelito de -u?man, -erardo Feliciano, ,le* IbaRSe?,
4enjamin Cuan, 6r., Eamon Macaalay, -on?alo Manalili, Eaul Miciano, 0ilario PeRSa, Teresa
Permocillo, 8rnesto Eio, Eodolfo 6anidad, Eafael 6ta. ,na, Culian Tuguin, and ,melia Pamora are
each a#arded nominal damages in the amount of P=(,(((.((. <o pronouncement as to costs.
SO ORDERED.
*ar"&o Mora%!9, >*ha&r"!r9o6?, 1!r9a:&6, A$a8, a68 V&%%ara:a, 5r., 55., co6c#r.
FIE6T 5I2I6IA<
G.R. No. L:22559 August 29, 1975
DELFIN LIM $!( 'I1IL TAHA, plaintiffs.appellants,
vs.
FRANCISCO PONCE DE LEON AND ORLANDO MADDELA, defendants.appellees.
Ricardo L. Mana"i"i$ for p"aintiffs:appe""ants.
I<i$o R. %e<a for defendants:appe""ees.
MARTIN, J.:
$ppeal on a =uestion of la* fro" the decision of the Court of !irst #nstance of Pala*an in Civil Case ?o. '16, entitled C8elfin 3i" and 7ikil Taha vs. !rancisco
Ponce de 3eon and Orlando >addelaC, dis"issin+ the co"plaint of the plaintiffs and orderin+ the" to pay each of the defendants /ointly and severally the su" of
PB00.00 by *ay of actual da"a+esF PB00.00 by *ay of attorney,s feesF and P1,000.00 by *ay of e-e"plary da"a+es.
On $pril 49, 1961, plaintiff.appellant 7ikil Taha sold to a certain $lberto Ti"ban+caya of 2rooke,s Point, Pala*an a "otor launch na"ed >N3 C%$? &$!$93C. $
year later or on $pril 9, 1964 $lberto Ti"ban+caya filed a co"plaint *ith the Office of the Provincial !iscal of Pala*an alle+in+ that after the sale 7ikil Taha
forcibly took a*ay the "otor launch fro" hi".
On >ay 1', 1964, after conductin+ a preli"inary investi+ation, !iscal !rancisco Ponce de 3eon in his capacity as $ctin+ Provincial !iscal of Pala*an, filed *ith
the Court of !irst #nstance of Pala*an the correspondin+ infor"ation for &obbery the !orce and #nti"idation upon Persons a+ainst 7ikil Taha. The case *as
docketed as Cri"inal Case ?o. 4(19.
On 7une 1B, 1964, !iscal !rancisco Ponce de 3eon, upon bein+ infor"ed that the "otor launch *as in 2alabac, Pala*an, *rote the Provincial Co""ander of
Pala*an re=uestin+ hi" to direct the detach"ent co""ander.in 2alabac to i"pound and take custody of the "otor launch.
1
On 7une 46, 1964, !iscal Ponce de 3eon reiterated his re=uest to the Provincial Co""ander to i"pound the
"otor launch, e-plainin+ that its subse=uent sale to a third party, plaintiff.appellant 8elfin 3i", cannot prevent the
court fro" takin+ custody of the sa"e.
2
%o, on 7uly 6, 1964 upon order of the Provincial Co""ander,
defendant.appellee Orlando >addela, 8etach"ent Co""ander of 2alabac, Pala*an, sei0ed the "otor launch
C%$? &$!$93C fro" plaintiff.appellant 8elfin 3i" and i"pounded it.
On 7uly 1B, 1964 plaintiff.appellant 8elfin 3i" pleaded *ith Orlando >addela to return the "otor launch but the
latter refused. 3ike*ise, on %epte"ber 40, 1964, 7ikil Taha throu+h his counsel "ade representations *ith !iscal
Ponce de 3eon to return the sei0ed property to plaintiff.appellant 8elfin 3i" but !iscal Ponce de 3eon refused,
on the +round that the sa"e *as the sub/ect of a cri"inal offense.
$ll efforts to recover the "otor launch +oin+ to nau+ht, plaintiffs.appellants 8elfin 3i" and 7ikil Taha, on
?ove"ber 19, 1964, filed *ith the Court of !irst #nstance of Pala*an a co"plaint for da"a+es a+ainst
defendants.appellees !iscal !rancisco Ponce de 3eon and Orlando >addela, alle+in+ that on 7uly 6, 1964
Orlando >addela entered the pre"ises of 8elfin 3i" *ithout a search *arrant and then and there took a*ay the
hull of the "otor launch *ithout his consentF that he effected the sei0ure upon order of !iscal Ponce de 3eon
*ho kne* fully *ell that his office *as not vested *ith authority to order the sei0ure of a private propertyF that
said "otor launch *as purchased by 8elfin 3i" fro" 7ikil Taha in consideration of Three Thousand Pesos
P;,000.00), T*o Thousand Pesos P4,000.00) of *hich has been +iven to 7ikil Taha as advance pay"entF that
as a conse=uence of the unla*ful sei0ure of the "otor launch, its sale did not "ateriali0eF and that since 7uly 6,
1964, the said "otor launch had been "oored at the 2alabac 2ay, Pala*an and because of e-posure to the
ele"ents it had beco"e *orthless and beyond repair. !or the alle+ed violation of their constitutional ri+hts,
plaintiffs.appellants prayed that defendants.appellees be ordered to pay /ointly and severally each of the" the
su" of PB,(B0.00 representin+ actual, "oral and e-e"plary da"a+es and attorney,s fees.
#n their ans*er, defendants.appellees denied the "aterial alle+ations of the co"plaint and as affir"ative
defenses alle+ed that the "otor launch in =uestion *hich *as sold by 7ikil Taha to $lberto Ti"ban+caya on $pril
49, 1961 *as so"eti"e in $pril 1964, forcibly taken *ith violence upon persons and *ith intent to +ain by 7ikil
Taha fro" $lfredo Ti"ban+caya *ithout the latter,s kno*led+e and consent, thus +ivin+ rise to the filin+ of a
cri"inal char+e of robbery a+ainst 7ikil TahaF that !iscal Ponce de 3eon, in his capacity as $ctin+ Provincial
!iscal of Pala*an ordered Orlando >addela to sei0e and i"pound the "otor launch C%$? &$!$93C, for bein+
the corpus de"icti of the robberyF and that Orlando >addela "erely obeyed the orders of his superior officer to
i"pound said launch. 2y *ay of counterclai", defendants.appellees alle+ed that because of the "alicious and
+roundless filin+ of the co"plaint by plaintiffs.appellants, they *ere constrained to en+a+e the services of
la*yers, each of the" payin+ PB00.00 as attorney,s feesF and that they suffered "oral da"a+es in the a"ount of
PB,000.00 each and actual da"a+es in the a"ount of PB00.00 each. They also prayed that each of the"
a*arded e-e"plary da"a+es in the a"ount of P1,000.00.
On %epte"ber 1;, 196B, the trial court rendered its decision, upholdin+ the validity of the sei0ure of the "otor
launch on the +round that Cthe authority to i"pound evidences or e-hibits or corpus de"icti in a case pendin+
investi+ation is inherent in the Provincial !iscal *ho controls the prosecution and *ho introduces those e-hibits
in the court.C $ccordin+ly, the trial court dis"issed the co"plaint of plaintiffs.appellants and ordered the" to pay
/ointly and severally each of the defendants.appellees the a"ount of PB00.00 by *ay of actual da"a+es another
a"ount of PB00.00 for attorney,s fees and P1,000.00 as e-e"plary da"a+es.
<ence, this appeal.
T*o vital issues call for resolution by this Court. !irst, *hether or not defendant.appellee !iscal Ponce de 3eon
had the po*er to order the sei0ure of the "otor launch in =uestion *ithout a *arrant of search and sei0ure even
if the sa"e *as ad"ittedly the corpus de"icti of the cri"e. %econd, *hether or not defendants.appellees are
civilly liable to plaintiffs.appellants for da"a+es alle+edly suffered by the" +rantin+ that the sei0ure of the "otor
launch *as unla*ful.
The +rava"en of plaintiffs.appellants, ar+u"ent is that the takin+ of the "otor launch on 7uly 6, 1964 by Orlando
>addela upon the order of !iscal Ponce de 3oon *as in violation of the constitutional +uarantee a+ainst
unreasonable searches and sei0ures since it *as done *ithout a *arrant.
The pertinent provision of the Constitution then in force readsA
;) The ri+ht of the people to be secure in their persons, houses, papers and effects a+ainst
unreasonable searches and sei0ures shall not be violated, and no *arrants shall issue but upon
probable cause, to be deter"ined by the /ud+e after e-a"ination under oath or affir"ation of the
co"plainant and the *itnesses he "ay produce, and particularly describin+ the place to be
searched, and the persons or thin+s to be sei0ed.
8
$ cursory readin+ of the above provision easily brin+s into focus the unreasonableness of the sei0ure of the
afore"entioned "otor launch. $ search and sei0ure to be reasonable, "ust be effected by "eans of a valid
search *arrant. $nd for a search *arrant to be validA 1) it "ust be issued upon probable causeF 4) the probable
cause "ust be deter"ined by the /ud+e hi"self and not by the applicant or any other personF ;) in the
deter"ination of probable cause, the /ud+e "ust e-a"ine, under oath or affir"ation, the co"plainant and such
*itnesses as the latter "ay produceF and ') the *arrant issued "ust particularly describe the place to be
searched and persons or thin+s to be sei0ed.
9
Thus in a lon+ line of decisions, this Court has declared invalid
search *arrants *hich *ere issued in utter disre+ard of the constitutional in/unction.
5
8efendants.appellees ad"itted that *hen Orlando >addela entered the pre"ises of 8elfin 3i" and i"pounded
the "otor launch he *as not ar"ed *ith a search *arrantF that he effected the sei0ure of the "otor launch in the
absence of and *ithout the consent of 8elfin 3i". There can be no =uestion that *ithout the proper search
*arrant, no public official has the ri+ht to enter the pre"ises of another *ithout his consent for the purpose of
search and sei0ure.
3
$nd since in the present case defendants.appellees sei0ed the "otor launch *ithout a
*arrant, they have violated the constitutional ri+ht of plaintiffs.appellants a+ainst unreasonable search and
sei0ure.
8efendants.appellees ho*ever *ould *ant to /ustify the sei0ure of the "otor launch even *ithout a *arrant
because of !iscal Ponce de 3eon,s alle+ed inherent po*er to order the sei0ure of a personal property *hich is
the corpus de"icti of a cri"e, he bein+ a *uasi /udicial officer *ho has the control of the prosecution and the
presentation of the evidence in the cri"inal case. They ar+ue that inas"uch as the "otor launch in =uestion *as
alle+edly stolen by 7ikil Taha fro" Ti"ban+caya, !iscal Ponce de 3eon could order its sei0ure even *ithout a
search *arrant. 6e cannot a+ree. @nder the old Constitution
7
the po*er to issue a search *arrant is vested in
a /ud+e or "a+istrate and in no other officer and no search and sei0ure can be "ade *ithout a proper *arrant.
$t the ti"e the act co"plained of *as co""itted, there *as no la* or rule that reco+ni0ed the authority of
Provincial !iscals to issue a search *arrant. #n his vain atte"pt to /ustify the sei0ure of the "otor launch in
=uestion *ithout a *arrant !iscal Ponce de 3eon invoked the provisions of &epublic $ct ?o. (;4, *hich
a"ended %ections 16(' and 165( of the &evised $d"inistrative Code. 2ut there is nothin+ in said la* *hich
confers upon the provincial fiscalF the authority to issue *arrants, "uch less to order *ithout *arrant the sei0ure
of a personal property even if it is the corpus de"icti of a cri"e. True, &epublic $ct ?o. (;4 has broadened the
po*er of provincial fiscals to conduct preli"inary investi+ations, but said la* did not divest the /ud+e or
"a+istrate of its po*er to deter"ine, before issuin+ the correspondin+ *arrant, *hether or not probable cause
e-ists therefor.
5
>oreover, under %ections 4 and ; of &ule 144 of the &ules of Court 9 *hich co"ple"ent the constitutional provision earlier cited,
t*o principles are "ade clear, na"elyA 1) that in the sei0ure of a stolen property search *arrant is still necessaryF and 4) that in issuin+ a search *arrant the
/ud+e alone deter"ines *hether or not there is a probable cause. The fact that a thin+ is a corpus de"icti of a cri"e does not /ustify its sei0ure *ithout a *arrant.
$s held in ?.&. v. de "os Re1es and 6s$uerra,
14
citin+ Mc#"ur$ v. BrentonA
11
The "ere fact that a "an is an officer, *hether of hi+h or lo* de+ree, +ives hi" no "ore ri+ht
than is possessed by the ordinary private citi0en to break in upon the privacy of a ho"e and
sub/ect its occupant to the indi+nity of a search for the evidence of cri"e, *ithout a le+al *arrant
procured for that purpose. !o amount of incriminatin$ evidence whatever its source, wi"" supp"1
the p"ace of such warrant. $t the closed door of the ho"e be it palace or hovel even
bloodhounds "ust *ait till the la*, by authoritative process, bids it open. 9"phasis supplied.)
8efendant.appellee !iscal Ponce de 3eon *ould also invoke lack of ti"e to procure a search *arrant as an
e-cuse for the sei0ure of the "otor launch *ithout one. <e clai"ed that the "otor launch had to be sei0ed
i""ediately in order to preserve it and to prevent its re"oval out of the locality, since 2alabac, Pala*an, *here
the "otor launch *as at the ti"e, could only be reached after three to four days, travel by boat.
12
The clai"
cannot be sustained. The records sho* that on 7une 1B, 1964
18
!iscal Ponce de 3eon "ade the first re=uest to
the Provincial Co""ander for the i"poundin+ of the "otor launchF and on 7une 46, 1964
19
another re=uest
*as "ade. The sei0ure *as not effected until 7uly 6, 1964. #n short, !iscal Ponce de 3eon had all the ti"e to
procure a search *arrant had he *anted to and *hich he could have taken in less than a day, but he did not.
2esides, there is no basis for the apprehension that the "otor launch "i+ht be "oved out of 2alabac because
even prior to its sei0ure the "otor launch *as already *ithout its en+ine.
15
#n su", the fact that there *as no
ti"e to secure a search *arrant *ould not le+ally /ustify a search *ithout one.
13
$s to *hether or not they are entitled to da"a+es, plaintiffs.appellants anchor their clai" for da"a+es on $rticles
;4 and 4419 of the ?e* Civil Code *hich provide in part as follo*sA
$&T. ;4. $ny public officer or e"ployee, or any private individual, *ho directly or indirectly
obstructs, defeats, violates or in any "anner i"pedes or i"pairs any of the follo*in+ ri+hts and
liberties of another person shall be liable to the latter for da"a+es.
--- --- ---
9) The ri+hts to be secure in one,s person, house, papers, and effects a+ainst unreasonable
searches and sei0ures.
--- --- ---
The inde"nity shall include "oral da"a+es. 9-e"plary da"a+es "ay also be ad/udicated.
$&T. 4419. >oral da"a+es "ay be recovered in the follo*in+ and analo+ous casesA
--- --- ---
6) #lle+al searchF
--- --- ---
1) $cts and action referred to in $rticles 41, 46, 4(, 45, 49, ;0, ;4, ;' and ;B.
Pursuant to the fore+oin+ provisions, a person *hose constitutional ri+hts have been violated or i"paired is
entitled to actual and "oral da"a+es fro" the public officer or e"ployee responsible therefor. #n addition,
e-e"plary da"a+es "ay also be a*arded. #n the instant case, plaintiff.appellant 8elfin 3i" clai"ed that he
purchased the "otor launch fro" 7ikil Taha in consideration of P;,000.00, havin+ +iven P4,000.00 as advanced
pay"entF that since or sei0ure on 7uly 6, 1964 the "otor launch had been "oored at 2alabac 2ay and because
of e-posure to the ele"ents it has beco"e *orthless at the ti"e of the filin+ of the present actionF that because
of the ille+ality of the sei0ure of the "otor launch, he suffered "oral da"a+es in the su" of P1,000.00F and that
because of the violation of their constitutional ri+hts they *ere constrained to en+a+e the services of a la*yer
*ho" they have paid P1,B00.00 for attorney,s fees. 6e find these clai"s of 8elfin 3i" a"ply supported by the
evidence and therefore should be a*arded the su" of P;,000.00 as actual da"a+esF P1,000.00 as "oral
da"a+es and P(B0.00 for attorney,s fees. <o*ever, *ith respect co plaintiff 7ikil Taha, he is not entitled to
recover any da"a+e *hich he alle+ed he had suffered fro" the unla*ful sei0ure of the "otor launch inas"uch
as he had already transferred the o*nership and possession of the "otor launch to 8elfin 3i" at the ti"e it *as
sei0ed and therefore, he has no le+al standin+ to =uestion the validity of the sei0ure. 6ell settled is the rule that
the le+ality of a sei0ure can be contested only by the party *hose ri+hts have been i"paired thereby, and that
the ob/ection to an unla*ful search and sei0ure is purely personal and cannot be availed of by third parties.
17
Conse=uently, one *ho is not the o*ner, lessee, or la*ful occupant of the pre"ise searched cannot raise the
=uestion of validity of the search and sei0ure.
15
7ikil Taha is not *ithout recourse thou+h. <e can still collect
fro" his co.plaintiff, 8elfin 3i" the unpaid balance of P1,000.00.
8efendant.appellee !iscal Ponce de 3eon *anted to *ash his hands of the incident by clai"in+ that Che *as in
+ood faith, *ithout "alice and *ithout the sli+htest intention of inflictin+ in/ury to plaintiff.appellant, 7ikil TahaC
19
*hen he ordered the sei0ure of the "otor launch. 6e are not prepared to sustain his defense of +ood faith. To
be liable under $rticle ;4 of the ?e* Civil Code it is enou+h that there *as a violation of the constitutional ri+hts
of the plaintiffs and it is not re=uired that defendants should have acted *ith "alice or bad faith. 8r. 7or+e
2ocobo, Chair"an of the Code Co""ission, +ave the follo*in+ reasons durin+ the public hearin+s of the 7oint
%enate and <ouse Co""ittees, *hy +ood faith on the part of the public officer or e"ployee is i""aterial. ThusA
89$? 2OCO2O. $rticle ;4, re+ardin+ individual ri+htsF $ttorney Cirilo Paredes proposes that
$rticle ;4 be so a"ended as to "ake a public official liable for violation of another person,s
constitutional ri+hts only if the public official acted "aliciously or in bad faith. The Code
Co""ission opposes this su++estion for these reasonsA
The very nature of $rticle ;4 is that the *ron+ "ay be civil or cri"inal. #t is not necessary
therefore that there should be "alice or bad faith. To "ake such a re=uisite *ould defeat the
"ain purpose of $rticle ;4 *hich is the effective protection of individual ri+hts. Public officials in
the past have abused their po*ers on the prete-t of /ustifiable "otives or +ood faith in the
perfor"ance of their duties. Precisely, the ob/ect of the $rticle is to put an end to official abuse by
the plea of +ood faith. #n the @nited %tates this re"edy is in he nature of a tort.
>r. Chair"an, this article is fir"ly one of the funda"ental articles introduced in the ?e* Civil
Code to i"ple"ent de"ocracy. There is no real de"ocracy if a public official is abusin+, and *e
"ade the article so stron+ and so co"prehensive that it concludes an abuse of individual ri+hts
even if done in +ood faith, that official is liable. $s a "atter of fact, *e kno* that there are very
fe* public officials *ho openly and definitely abuse the individual ri+hts of the citi0ens. #n "ost
cases, the abuse is /ustified on a plea of desire to enforce the la* to co"ply *ith one,s duty. $nd
so, if *e should li"it the scope of this article, that *ould practically nullify the ob/ect of the article.
Precisely, the openin+ ob/ect of the article is to put an end to abuses *hich are /ustified by a plea
of +ood faith, *hich is in "ost cases the plea of officials abusin+ individual ri+hts.
24
2ut defendant.appellee Orlando >addela cannot be held accountable because he i"pounded the "otor launch
upon the order of his superior officer. 6hile a subordinate officer "ay be held liable for e-ecutin+ unla*ful orders
of his superior officer, there are certain circu"stances *hich *ould *arrant >addela,s e-culpation fro" liability.
The records sho* that after !iscal Ponce de 3eon "ade his first re=uest to the Provincial Co""ander on 7une
1B, 1964 >addela *as reluctant to i"pound the "otor launch despite repeated orders fro" his superior officer.
21
#t *as only after he *as furnished a copy of the reply of !iscal Ponce de 3eon, dated 7une 46, 1964, to the
letter of the Provincial Co""ander, /ustifyin+ the necessity of the sei0ure of the "otor launch on the +round that
the subse=uent sale of the launch to 8elfin 3i" could not prevent the court fro" takin+ custody of the sa"e,
22
that he i"pounded the "otor launch on 7uly 6, 1964. 6ith said letter co"in+ fro" the le+al officer of the
province, >addela *as led to believe that there *as a le+al basis and authority to i"pound the launch. Then
ca"e the order of his superior officer to e-plain for the delay in the sei0ure of the "otor launch.
28
!aced *ith a
possible disciplinary action fro" his Co""ander, >addela *as left *ith no alternative but to sei0e the vessel. #n
the li+ht of the above circu"stances. 6e are not disposed to hold >addela ans*erable for da"a+es.
#? G#96 O! T<9 !O&9HO#?H, the decision appealed fro" is hereby reversed and another one entered
declarin+ the sei0ure ille+al and orderin+ defendant.appellee !iscal !rancisco Ponce de 3eon to pay to plaintiff.
appellant 8elfin 3i" the su" of P;,000.00 as actual da"a+es, plus P1,000.00 "oral da"a+es, and, in addition,
P(B0.00 for attorney,s fees. 6ith costs a+ainst defendant.appellee !iscal Ponce de 3eon.
%O O&89&98.
#astro (#hairman), =eehan9ee, Ma9asiar and 6s$uerra, --., concur.
Mu<o, %a"ma, -, is on "eave.
G.R. No. 53724 S)%t);6), 2, 1999
MHP GARMENTS, INC., $!( LARR< C. DE GU2MAN, petitioners,
vs.
THE HONORA-LE COURT OF APPEALS, AGNES /ILLA CRU2, MIRASOL LUGATIMAN, $!( GERTRUDES GON2ALES, respondents.
Benjamin M. .acana1 for petitioners.
6mmanue" O. =ansin$co for private respondents.
PUNO, J.:
The constitutional protection of our people a+ainst unreasonable search and sei0ure is not "erely a pleasin+ platitude. #t vouchsafes our ri+ht to privacy and
di+nity a+ainst undesirable intrusions co""itted by any public officer or private individual. $n infrin+e"ent of this ri+ht /ustifies an a*ard for da"a+es.
On !ebruary 44, 195;, petitioner ><P Har"ents, #nc., *as a*arded by the 2oy %couts of the Philippines, the e-clusive franchise to sell and distribute official
2oy %couts unifor"s, supplies, bad+es, and insi+nias. #n their >e"orandu" $+ree"ent, petitioner corporation *as +iven the authority to Cundertake or cause to
be undertaken the prosecution in court of all ille+al sources of scout unifor"s and other scoutin+ supplies.C
1
%o"eti"e in October 195;, petitioner corporation received infor"ation that private respondents $+nes Gilla
Cru0, >irasol 3u+ati"an, and Hertrudes Hon0ales *ere sellin+ 2oy %couts ite"s and paraphernalia *ithout any
authority. Petitioner de Hu0"an, an e"ployee of petitioner corporation, *as tasked to undertake the necessary
surveillance and to "ake a report to the Philippine Constabulary PC).
On October 4B, 195;, at about 10A;0 $.>., petitioner de Hu0"an, Captain &enato >. PeRafiel, and t*o 4) other
constabulary "en of the &eaction !orce 2attalion, %ikatuna Gilla+e, 8ili"an, Jue0on City *ent to the stores of
respondents at the >arikina Public >arket. 6ithout any *arrant, they sei0ed the boy and +irl scouts pants,
dresses, and suits on display at respondents, stalls. The sei0ure caused a co""otion and e"barrassed private
respondents. &eceipts *ere issued for the sei0ed ite"s. The ite"s *ere then turned over by Captain PeRafiel to
petitioner corporation for safekeepin+.
$ cri"inal co"plaint for unfair co"petition *as then filed a+ainst private respondents.
2
8urin+ its pendency,
petitioner de Hu0"an e-acted fro" private respondent 3u+ati"an the su" of T<&99 T<O@%$?8 O?9
<@?8&98 P9%O% P;,100.00) in order to be dropped fro" the co"plaint. On 8ece"ber 6, 195;, after a
preli"inary investi+ation, the Provincial !iscal of &i0al dis"issed the co"plaint a+ainst all the private
respondents. On !ebruary 6, 195', he also ordered the return of the sei0ed ite"s. The sei0ed ite"s *ere not
i""ediately returned despite de"ands.
8
Private respondents had to +o personally to petitioners, place of
business to recover their +oods. 9ven then, not all the sei0ed ite"s *ere returned. The other ite"s returned
*ere of inferior =uality.
Private respondents then filed Civil Case ?o. B11'' a+ainst the petitioners for su"s of "oney and da"a+es.
9
#n its 8ecision dated 7anuary 9, 195(, the trial court ruled for the private respondents, thusA
6<9&9!O&9, /ud+"ent is hereby rendered in favor of plaintiffs and a+ainst defendants,
orderin+ the latter /ointly and severallyA
1. To return the a"ount of P;,100.00 to plaintiff >irasol 3u+ati"an *ith interest at 14L per
annu" fro" 7anuary 14, 195', the date of the last receipt issued, until fully paidF
4. To pay plaintiff $+nes Gilla Cru0 the su" of P4,000.00 for the 46 pieces of +irl scout ite"s not
returnedF
;. To pay plaintiffs the a"ount of PB0,000.00 for and as "oral da"a+es and P1B,000.00 for and
as e-e"plary da"a+esF and
'. PB,000.00 for and as attorney,s fees and liti+ation e-penses.
Costs a+ainst the defendants.
%O O&89&98.
The decision *as appealed to the respondent court. On 7anuary 15, 1959, its !ifth 8ivision,
5
affir"ed the
8ecision *ith "odification, thusA
6<9&9!O&9, the decision appealed fro" is $!!#&>98 *ith >O8#!#C$T#O?F and, as
"odified, the dispositive portion thereof no* reads as follo*sA
7ud+"ent is hereby rendered in favor of plaintiffs private respondents) and a+ainst defendants
petitioners), orderin+ the latter /ointly and severallyF
1. To return the a"ount of P;,100.00 to plaintiff respondent) >irasol 3u+ati"an and cancel her
application for distributor,s licenseF
4. To pay plaintiff respondent) $+nes Gilla Cru0 the su" of P4,000.00 for the unreturned 46
pieces of +irl scouts ite"s *ith interest at 14L per annu" fro" 7une ', 195' date the co"plaint
*as filed) until it is fully paidF
;. To pay plaintiffs respondents) the a"ount of P10,000.00 each, or a total of P;0,000.00, for
and as "oral da"a+esF and PB,000.00 each, or a total of P1B,000.00, for and as e-e"plary
da"a+esF and
'. To pay plaintiffs respondents) PB,000.00 for and as attorney,s fees and liti+ation e-penses.
Costs of the case a =uo and the instant appeal are assessed /ointly and severally a+ainst
defendants.appellants petitioners) ><P Har"ents, #nc. and 3arry de Hu0"an.
%O O&89&98.
#n this petition for certiorari, petitioners contendA
0IR&= '&&IG!M6!= O0 6RROR
T<9 CO@&T O! $PP9$3% 9&&98 #? #>P@T#?H 3#$2#3#TI !O& 8$>$H9% TO T<9
P9T#T#O?9&% 6<O 8#8 ?OT 9!!9CT T<9 %9#:@&9 O! T<9 %@279CT >9&C<$?8#%9.
&6#O!. '&&IG!M6!= O0 6RROR
T<9 CO@&T O! $PP9$3% 9&&98 6<9? #T >$89 $ !#?8#?H T<$T T<9 >$??9& 6#T<
6<#C< T<9 CO?!#%C$T#O? O! P&#G$T9 &9%PO?89?T% 6$% TO&T#O@% 2@T
P9?$3#:98 #?%T9$8 T<9 P9T#T#O?9&% 6<O 8#8 ?OT CO>>#T T<9 $CT O!
CO?!#%C$T#O?.
=;IR. '&&IG!M6!= O0 6RROR
T<9 CO@&T O! $PP9$3% 9&&98 6<9? #T !O@?8 !O& T<9 P&#G$T9 &9%PO?89?T%
$?8 $H$#?%T T<9 P9T#T#O?9&%.
6e affir".
$rticle ###, section 4, of the Constitution protects our people fro" unreasonable search and sei0ure. #t providesA
The ri+ht of the people to be secure in their persons, houses, papers, and effects a+ainst
unreasonable searches and sei0ures of *hatever nature for any purpose shall be inviolable, and
no search *arrant or *arrant of arrest shall issue e-cept upon probable cause to be deter"ined
personally by the /ud+e after e-a"ination under oath or affir"ation of the co"plainant and the
*itnesses he "ay produce, and particularly describin+ the place to be searched and the persons
or thin+s to be sei0ed.
This provision protects not only those *ho appear to be innocent but also those *ho appear to be +uilty but are
nevertheless to be presu"ed innocent until the contrary is proved.
3
#n the case at bench, the sei0ure *as "ade
*ithout any *arrant. @nder the &ules of Court,
7
a *arrantless search can only be undertaken under the
follo*in+ circu"stanceA
%ec. 14. %earch incident to a la*ful arrest. . $ person la*fully arrested "ay be searched for
dan+erous *eapons or anythin+ *hich "ay be used as proof of the co""ission of an offense,
*ithout a search *arrant.
6e hold that the evidence did not /ustify the *arrantless search and sei0ure of private respondents, +oods.
Petitioner corporation received infor"ation that private respondents *ere ille+ally sellin+ 2oy %couts ite"s and
paraphernalia in October 195;. The specific date and ti"e are not established in the evidence adduced by the
parties. Petitioner de Hu0"an then "ade a surveillance of the stores of private respondents. They reported to
the Philippine Constabulary and on October 4B, 195;, the raid *as "ade on the stores of private respondents
and the supposed illicit +oods *ere sei0ed. The pro+ression of ti"e bet*een the receipt of the infor"ation and
the raid of the stores of private respondents sho*s there *as sufficient ti"e for petitioners and the PC raidin+
party to apply for a /udicial *arrant. 8espite the sufficiency of ti"e, they did not apply for a *arrant and sei0ed
the +oods of private respondents. #n doin+ so, they took the risk of a suit for da"a+es in case the sei0ure *ould
be proved to violate the ri+ht of private respondents a+ainst unreasonable search and sei0ure. #n the case at
bench, the search and sei0ure *ere clearly ille+al. There *as no probable cause for the sei0ure. Probable cause
for a search has been defined as Csuch facts and circu"stances *hich *ould lead a reasonably discreet and
prudent "an to believe that an offense has been co""itted and that the ob/ects sou+ht in connection *ith the
offense are in the place sou+ht to be searched.C
5
These facts and circu"stances *ere not in any *ay sho*n by
the petitioners to /ustify their *arrantless search and sei0ure. #ndeed, after a preli"inary investi+ation, the
Provincial !iscal of &i0al dis"issed their co"plaint for unfair co"petition and later ordered the return of the
sei0ed +oods.
Petitioners *ould deflect their liability *ith the ar+u"ent that it *as the Philippine Constabulary that conducted
the raid and their participation *as only to report the alle+ed ille+al activity of private respondents.
6hile undoubtedly, the "e"bers of the PC raidin+ tea" should have been included in the co"plaint for violation
of the private respondents, constitutional ri+hts, still, the o"ission *ill not e-culpate petitioners.
#n the case of Lim vs. %once de Leon,
9
*e ruled for the recovery of da"a+es for violation of constitutional ri+hts
and liberties fro" public officer or private individual, thusA
$rt. ;4. $ny public officer or emp"o1ee, or an1 private individua", who direct"1 or indirect"1
obstructs, defeats, violates or in any "anner i"pedes or i"pairs any of the follo*in+ ri+hts and
liberties of another person shall be liable to the latter for da"a+es.
--- --- ---
9) The ri+hts to be secure in one,s person, house, papers, and effects a+ainst unreasonable
searches and sei0ures.
--- --- ---
The inde"nity shall include "oral da"a+es. 9-e"plary da"a+es "ay also be ad/ud+ed.
$rt. 4419. >oral da"a+es "ay be recovered in the follo*in+ and analo+ous casesA
--- --- ---
6) #lle+al searchF
1) $cts and actions referred to in $rticles 41, 46, 4(, 45, 49, ;0, FE, ;', and ;B.
Pursuant to the fore+oin+ provisions, a person *hose constitutional ri+hts have been violated or
i"paired is entitled to actual and "oral da"a+es fro" the public officer or emp"o1ee responsib"e
therefor. #n addition, e-e"plary da"a+es "ay also be a*arded.
--- --- ---
The very nature of $rticle ;4 is that the *ron+ "ay be civil or cri"inal. #t is not necessary
therefore that there should be "alice or bad faith. To "ake such a re=uisite *ould defeat the
"ain purpose of $rticle ;4 *hich is the effective protection of individual ri+hts. Public officials in
the past have abused their po*ers on the prete-t of /ustifiable "otives or +ood faith in the
perfor"ance of their duties. Precisely, the ob/ect of the $rticle is to put an end to official abuse by
plea of the +ood faith. #n the @nited %tates this re"edy is in the nature of a tort. e"phasis
supplied)
#n the subse=uent case of 'berca vs. /er,
14
the Court 6n Banc e-plained the liability of persons indirectly
responsible, vi,A
DTEhe decisive factor in this case, in our vie*, is the lan+ua+e of $rticle ;4. The la* speaks of an
officer or emp"o1ee or person >direct"1 or indirect"1> responsible for the violation of the
constitutional ri+hts and liberties of another. Thus, it is not the actor alone i.e., the one directly
responsible) *ho "ust ans*er for da"a+es under $rticle ;4F the person indirectly responsible
has also to ans*er for the da"a+es or in/ury caused to the a++rieved party.
--- --- ---
6hile it *ould certainly be too naive to e-pect that violators of hu"an ri+hts *ould easily be
deterred by the prospect of facin+ da"a+es suits, it should nonetheless be "ade clear in no
uncertain ter"s that $rticle ;4 of the Civil Code "akes the persons *ho are directly, as we"" as
indirect"1, responsib"e for the trans$ression joint tortfeasors.
--- --- ---
D?Eeither can it be said that only those sho*n to have participated CdirectlyC should be held liable.
$rticle ;4 of the Civil Code enco"passes *ithin the a"bit of its provisions those directly, as we""
as indirect"1, responsib"e for its vio"ations. e"phasis supplied)
$pplyin+ the aforecited provisions and leadin+ cases, the respondent court correctly +ranted da"a+es to private
respondents. Petitioners *ere indirect"1 involved in trans+ressin+ the ri+ht of private respondents a+ainst
unreasonable search and sei0ure. !irstly, they insti+ated the raid pursuant to their covenant in the >e"orandu"
$+ree"ent to undertake the prosecution in court of all ille+al sources of scoutin+ supplies.
11
$s correctly
observed by respondent courtA
#ndeed, the acts co""itted by the PC soldiers of unla*fully sei0in+ appellees, respondents,)
"erchandise and of filin+ the cri"inal co"plaint for unfair co"petition a+ainst appellees
respondents) *ere for the protection and benefit of appellant petitioner) corporation. %uch
bein+ the case, it is, thus, reasonably fair to infer fro" those acts that it was upon appe""ant
(petitioner) corporationAs instance that the %# so"diers conducted the raid and effected the i""e$a"
sei,ure. These circu"stances should ans*er the trial court,s =uery M posed in its decision no*
under consideration M as to wh1 the %# so"diers immediate"1 turned over the sei,ed
merchandise to appe""ant (petitioner) corporation.
12
The raid *as conducted *ith the active participation of their e"ployee. 3arry de Hu0"an did not lift a fin+er to
stop the sei0ure of the boy and +irl scouts ite"s. 2y standin+ by and apparent"1 assentin$ thereto, he *as liable
to the sa"e e-tent as the officers the"selves.
18
%o *ith the petitioner corporation *hich even received for
safekeepin+ the +oods unreasonably sei0ed by the PC raidin+ tea" and de Hu0"an, and refused to surrender
the" for =uite a ti"e despite the dis"issal of its co"plaint for unfair co"petition.
%econdly, 3etter of #nstruction ?o. 1499 *as precisely crafted on >arch 9, 195; to safe+uard not only the
privile+e of franchise holder of scoutin+ ite"s but also the citi0en,s constitutional ri+hts, to witA
T#T39A $PP&9<9?%#O? O! @?$@T<O&#:98 >$?@!$CT@&9&%
$?8 8#%T@TO&% O! %CO@T P$&$P<9&?$3#$ $?8
#>PO@?8#?H O! %$#8 P$&$P<9&?$3#$.
$2%T&$CTA
8irects all la* enforce"ent a+encies of the &epublic of the Philippines, to apprehend
i""ediately unauthori0ed "anufacturers and distributors of %cout paraphernalia, upon proper
app"ication b1 the Bo1 &couts of the %hi"ippines andIor Gir" &couts of the %hi"ippines for warrant
of arrest andIor search warrant with a jud$e, or such other responsib"e officer as ma1 be
authori,ed b1 "awF and to i"pound the said paraphernalia to be used as evidence in court or
other appropriate ad"inistrative body. Orders the immediate and strict comp"iance with the
Instructions.
19
@nder the above provision and as aforediscussed, petitioners "iserably failed to report the unla*ful peddlin+ of
scoutin+ +oods to the 2oy %couts of the Philippines for the proper application of a *arrant. Private respondents,
ri+hts are i""utable and cannot be sacrificed to transient needs.
15
Petitioners did not have the unbridled
license to cause the sei0ure of respondents, +oods *ithout any *arrant.
$nd thirdly, if petitioners did not have a hand in the raid, they should have filed a third.party co"plaint a+ainst
the raidin+ tea" for contribution or any other relief,
13
in respect of respondents, clai" for &ecovery of %u" of
>oney *ith 8a"a+es. $+ain, they did not.
6e have consistently ruled that "oral da"a+es are not a*arded to penali0e the defendant but to co"pensate
the plaintiff for the in/uries he "ay have suffered.
17
Confor"ably *ith our rulin+ in Lim vs. %once de Leon, op.
cit., "oral da"a+es can be a*arded in the case at bench. There can be no doubt that petitioners "ust have
suffered sleepless ni+hts, serious an-iety, and *ounded feelin+s due the tortious raid caused by petitioners.
Private respondents, avo*als of e"barrass"ent and hu"iliation durin+ the sei0ure of their "erchandise *ere
supported by their testi"onies. &espondent Cru0 declaredA
# felt very nervous. # *as cryin+ to loss sic) "y +oods and capital because # a" doin+ business
*ith borro*ed "oney only, there *as co""otion created by the raidin+ tea" and they even
stepped on so"e of the pants and dresses on display for sale. $ll passersby stopped to *atch
and stared at "e *ith accusin+ e-pressions. # *as tre"blin+ and terribly asha"ed, sir.
15
&espondent 3u+ati"an testifiedA
# felt very nervous. # *as cryin+ and # *as very "uch asha"ed because "any people have been
*atchin+ the PC soldiers haulin+ "y ite"s, and "anyN# sic) heard say Cnaka* pala an+ "+a
iyanC for *hich # a" clai"in+ P4B,000.00 for da"a+es.
19
6hile respondent Hon0ale0 stated thusA
# do not like the *ay the raid *as conducted by the tea" sir because it looked like that *hat #
have been sellin+ *ere stolen ite"s that they should be confiscated by unifor"ed soldiers. >any
people *ere around and the "ore the confiscation *as "ade in a scandalous "annerF every
clothes, T.shirts, pants and dresses even those not *rapped dropped to the +round. # *as
terribly sha"ed in the presence of "arket +oers that "ornin+.
24
?eedles to state, the *antonness of the *ron+ful sei0ure /ustifies the a*ard of e-e"plary da"a+es.
21
#t *ill
also serve as a stern re"inder to all and sundry that the constitutional protection a+ainst unreasonable search
and sei0ure is a virile reality and not a "ere burst of rhetoric. The all enco"passin+ protection e-tends a+ainst
intrusions directly done both by +overn"ent and indirectly by private entities.
#? G#96 6<9&9O!, the appealed decision is $!!#&>98 6#T< >O8#!#C$T#O?. 6e i"pose a %#1 P9&C9?T
6L) interest fro" 7anuary 9, 195( on the T6O T<O@%$?8 P9%O% P4,000.00) for the unreturned t*enty.si-
46) pieces of +irl scouts ite"s and a T693G9 P9&C9?T 14L) interest, in lieu of %#1 P9&C9?T 6L), on the
said a"ount upon finality of this 8ecision until the pay"ent thereof.
22
Costs a+ainst petitioners.
%O O&89&98.
!arvasa, %adi""a, Re$a"ado, and Mendo,a, --., concur.
8< 4,<C
G.R. No. L-1)505 F!$r#ar7 4, 1919
GEO. 3. DA.3ALT, plaintiff-appellant,
vs.
LA *ORPORA*ION DE LOS PADRES AG+STINOS RE*OLETOS, ET AL., defendants-
appellees.
C. C. Cohn and +hos. %. Ait&en for appellant.
Crossfield B O'Brien for appellee.
STREET, J.
In the year >(), Teodorica 8ndencia, an unmarried #oman, resident in the Province of Mindoro,
e*ecuted a contract #hereby she obligated herself to convey to -eo. 9. 5ay#alt, a tract of land
situated in the barrio of Mangarin, municipality of 4ulalacao, no# 6an Cose, in said province. It #as
agreed that a deed should be e*ecuted as soon as the title to the land should be perfected by
proceedings in the Court of @and Eegistration and a Torrens certificate should be produced therefore in
the name of Teodorica 8ndencia. , decree recogni?ing the right of Teodorica as o#ner #as entered in
said court in ,ugust >(+, but the Torrens certificate #as not issued until later. The parties, ho#ever,
met immediately upon the entering of this decree and made a ne# contract #ith a vie# to carrying their
original agreement into effect. This ne# contract #as e*ecuted in the form of a deed of conveyance and
bears date of ,ugust +, >(+. The stipulated price #as fi*ed at P!,(((, and the area of the land
enclosed in the boundaries defined in the contract #as stated to be !') hectares and a fraction.
The second contract #as not immediately carried into effect for the reason that the Torrens certificate
#as not yet obtainable and in fact said certificate #as not issued until the period of performance
contemplated in the contract had e*pired. ,ccordingly, upon Actober =, >(;, the parties entered into
still another agreement, superseding the old, by #hich Teodorica 8ndencia agreed upon receiving the
Torrens title to the land in 7uestion, to deliver the same to the 0ong3ong and 6hanghai 4an3 in Manila,
to be for#arded to the Croc3er <ational 4an3 in 6an Francisco, #here it #as to be delivered to the
plaintiff upon payment of a balance of P=,((.
The Torrens certificate #as in time issued to Teodorica 8ndencia, but in the course of the proceedings
relative to the registration of the land, it #as found by official survey that the area of the tract inclosed
in the boundaries stated in the contract #as about .)!; hectares of !') hectares as stated in the
contract. In vie# of this development Teodorica 8ndencia became reluctant to transfer the #hole tract
to the purchaser, asserting that she never intended to sell so large an amount of land and that she had
been misinformed as to its area.
This attitude of hers led to litigation in #hich 5ay#alt finally succeeded, upon appeal to the 6upreme
Court, in obtaining a decree for specific performance1 and Teodorica 8ndencia #as ordered to convey
the entire tract of land to 5ay#alt pursuant to the contract of Actober =, >(;, #hich contract #as
declared to be in full force and effect. This decree appears to have become finally effective in the early
part of the year >!.
The defendant, @a Corporacion de los Padres Eecoletos, is a religious corporation, #ith its domicile in
the city of Manila. 6aid corporation #as formerly the o#ner of a large tract of land, 3no#n as the 6an
Cose 8state, on the island of Mindoro, #hich #as sold to the -overnment of the Philippine Islands in
the year >(>. The same corporation #as at this time also the o#ner of another estate on the same
island immediately adjacent to the land #hich Teodorica 8ndencia had sold to -eo. 9. 5ay#alt1 and
for many years the Eecoletos Fathers had maintained large herds of cattle on the farms referred to.
Their representative, charged #ith management of these farms, #as father Isidoro 6an?, himself a
members of the order. Father 6an? had long been #ell ac7uainted #ith Teodorica 8ndencia and e*erted
over her an influence and ascendency due to his religious character as #ell as to the personal friendship
#hich e*isted bet#een them. Teodorica appears to be a #oman of little personal force, easily subject to
influence, and upon all the important matters of business #as accustomed to see3, and #as given, the
advice of father 6an? and other members of his order #ith #hom she came in contact.
Father 6an? #as fully a#are of the e*istence of the contract of >() by #hich Teodorica 8ndencia
agreed to sell her land to the plaintiff as #ell as of the later important developments connected #ith the
history of that contract and the contract substituted successively for it1 and in particular Father 6an?, as
#ell as other members of the defendant corporation, 3ne# of the e*istence of the contract of Actober =,
>(;, #hich, as #e have already seen finally fi*ed the rights of the parties to the property in 7uestion.
9hen the Torrens certificate #as finally issued in >(> in favor of Teodorica 8ndencia, she delivered it
for safe3eeping to the defendant corporation, and it #as then ta3en to Manila #here it remained in the
custody and under the control of P. Cuan @abarga the procurador and chief official of the defendant
corporation, until the deliver thereof to the plaintiff #as made compulsory by reason of the decree of
the 6upreme Court in >!.
9hen the defendant corporation sold the 6an Cose 8state, it #as necessary to bring the cattle off of that
property1 and, in the first half of >(>, some ),=+; head #ere removed to the estate of the corporation
immediately adjacent to the property #hich the plaintiff had purchased from Teodorica 8ndencia. ,s
Teodorica still retained possession of said property Father 6an? entered into an arrangement #ith her
#hereby large numbers of cattle belonging to the defendant corporation #ere pastured upon said land
during a period e*tending from Cune , >(>, to May , >!.
:nder the first cause stated in the complaint in the present action the plaintiff see3s to recover from the
defendant corporation the sum of P)!,(((, as damages for the use and occupation of the land in
7uestion by reason of the pasturing of cattle thereon during the period stated. The trial court came to the
conclusion that the defendant corporation #as liable for damages by reason of the use and occupation
of the premises in the manner stated1 and fi*ed the amount to be recovered at P),!>". The plaintiff
appealed and has assigned error to this part of the judgment of the court belo#, insisting that damages
should have been a#arded in a much larger sum and at least to the full e*tent of P)!,(((, the amount
claimed in the complaint.
,s the defendant did not appeal, the property of allo#ing damages for the use and occupation of the
land to the e*tent o P),!>", the amount a#arded, is not no# in 7uestion an the only thing here to be
considered, in connection #ith this branch of the case, is #hether the damages allo#ed under this head
should be increased. The trial court rightly ignored the fact that the defendant corporation had paid
Teodorica 8ndencia of ruse and occupation of the same land during the period in 7uestion at the rate of
P!)' per annum, inasmuch as the final decree of this court in the action for specific performance is
conclusive against her right, and as the defendant corporation had notice of the rights of the plaintiff
under this contract of purchase, it can not be permitted that the corporation should escape liability in
this action by proving payment of rent to a person other than the true o#ner.
9ith reference to the rate of #hich compensation should be estimated the trial court came to the
follo#ing conclusion.
,s to the rate of the compensation, the plaintiff contends that the defendant corporation
maintained at leas one thousand head of cattle on the land and that the pasturage #as of the
value of forty centavos per head monthly, or P!,;(( annually, for the #hole tract. The court can
not accept this vie#. It is rather improbable that ,)!; hectares of #ild Mindoro land #ould
furnish sufficient pasturage for one thousand head of cattle during the entire year, and,
considering the locality, the rate of forty centavos per head monthly seems too high. The
evidence sho#s that after having recovered possession of the land the plaintiff rented it to the
defendant corporation for fifty centavos per hectares annually, the tenant to pay the ta*es on the
land, and this appears to be a reasonable rent. There is no reason to suppose that the land #as
#orth more for gra?ing purposes during the period from >(> to >=, than it #as at the later
period. :pon this basis the plaintiff is entitled to damages in the sum of p),!>", and is under no
obligation to reimburse the defendants for the land ta*es paid by either of them during the
period the land #as occupied by the defendant corporation. It may be mentioned in this
connection that the @onto3 tract adjoining the land in 7uestion and containing over three
thousand hectares appears to have been leased for only P,((( a year, plus the ta*es.
From this it #ill be seen that the trial court estimated the rental value of the land for gra?ing purposes at
'( centavos per hectare per annum, and roughly adopted the period of four years as the time for #hich
compensation at that rate should be made. ,s the court had already found that the defendant #as liable
for these damages from Cune, , >(>, to May , >!, or a period of four years and eleven months,
there seems some ground for the contention made in the appellant/s first assignment of error that the
court/s computation #as erroneous, even accepting the rule upon #hich the damages #ere assessed, as
it is manifest that at the rate of '( centavos per hectare per annum, the damages for four years and
eleven months #ould be P=,(>(.
<ot#ithstanding this circumstance, #e are of the opinion that the damages assessed are sufficient to
compensate the plaintiff for the use and occupation of the land during the #hole time it #as used. There
is evidence in the record strongly tending to sho# that the #rongful use of the land by the defendant
#as not continuous throughout the year but #as confined mostly to the reason #hen the forage
obtainable on the land of the defendant corporation #as not sufficient to maintain its cattle, for #hich
reason it became necessary to allo# them to go over to pasture on the land in 7uestion1 and it is not
clear that the #hole of the land #as used for pasturage at any time. Considerations of this character
probably led the trial court to adopt four years as roughly being the period during #hich compensation
should be allo#ed. 4ut #hether this #as advertently done or not, #e see no sufficient reason, in the
uncertainty of the record #ith reference to the number of the cattle gra?ed and the period #hen the land
#as used, for substituting our guess for the estimate made by the trial court.
In the second cause of action stated in the complaint the plaintiff see3s to recover from the defendant
corporation the sum of P'((,(((, as damages, on the ground that said corporation, for its o#n selfish
purposes, unla#fully induced Teodorica 8ndencia to refrain from the performance of her contract for
the sale of the land in 7uestion and to #ithhold delivery to the plaintiff of the Torrens title, and further,
maliciously and #ithout reasonable cause, maintained her in her defense to the action of specific
performance #hich #as finally decided in favor of the plaintiff in this court. The cause of action here
stated is based on liability derived from the #rongful interference of the defendant in the performance
of the contract bet#een the plaintiff and Teodorica 8ndencia1 and the large damages laid in the
complaint #ere, according to the proof submitted by the plaintiff, incurred as a result of a combination
of circumstances of the follo#ing nature. In >, it appears, the plaintiff, as the o#ner of the land
#hich he had bought from Teodorica 8ndencia entered into a contract $8*hibit C% #ith 6. 4. 9a3efield,
of 6an Francisco, for the sale and disposal of said lands to a sugar gro#ing and milling enterprise, the
successful launching of #hich depended on the ability of 5ay#alt to get possession of the land and the
Torrens certificate of title. In order to accomplish this end, the plaintiff returned to the Philippine
Islands, communicated his arrangement to the defendant,, and made repeated efforts to secure the
registered title for delivery in compliance #ith said agreement #ith 9a3efield. Teodorica 8ndencia
seems to have yielded her consent to the consummation of her contract, but the Torrens title #as then in
the possession of Padre Cuan @abarga in Manila, #ho refused to deliver the document. Teodorica also
#as in the end contract #ith the plaintiff, #ith the result that the plaintiff #as 3ept out of possession
until the 9a3efield project for the establishment of a large sugar gro#ing and milling enterprise fell
through. In the light of #hat has happened in recent years in the sugar industry, #e feel justified in
saying that the project above referred to, if carried into effect, must inevitably have proved a great
success.
The determination of the issue presented in this second cause of action re7uires a consideration of t#o
points. The first is #hether a person #ho is not a party to a contract for the sale of land ma3es himself
liable for damages to the vendee, beyond the value of the use and occupation, by colluding #ith the
vendor and maintaining him in the effort to resist an action for specific performance. The second is
#hether the damages #hich the plaintiff see3s to recover under this head are too remote and
speculative to be the subject of recovery.
,s preliminary to a consideration of the first of these 7uestions, #e deem it #ell it dispose of the
contention that the members of the defendants corporation, in advising and prompting Teodorica
8ndencia not to comply #ith the contract of sale, #ere actuated by improper and malicious motives.
The trial court found that this contention #as not sustained, observing that #hile it #as true that the
circumstances pointed to an entire sympathy on the part of the defendant corporation #ith the efforts of
Teodorica 8ndencia to defeat the plaintiff/s claim to the land, the fact that its officials may have advised
her not to carry the contract into effect #ould not constitute actionable interference #ith such contract.
It may be added that #hen one considers the hardship that the ultimate performance of that contract
entailed on the vendor, and the doubt in #hich the issue #as involved K to the e*tent that the decision
of the Court of the First Instance #as unfavorable to the plaintiff and the 6upreme Court itself #as
divided K the attitude of the defendant corporation, as e*hibited in the conduct of its procurador, Cuan
@abarga, and other members of the order of the Eecollect Fathers, is not difficult to understand. To our
mind a fair conclusion on this feature of the case is that father Cuan @abarga and his associates believed
in good faith that the contract cold not be enforced and that Teodorica #ould be #ronged if it should be
carried into effect. ,ny advice or assistance #hich they may have given #as, therefore, prompted by no
mean or improper motive. It is not, in our opinion, to be denied that Teodorica #ould have surrendered
the documents of title and given possession of the land but for the influence and promptings of
members of the defendants corporation. 4ut #e do not credit the idea that they #ere in any degree
influenced to the giving of such advice by the desire to secure to themselves the paltry privilege of
gra?ing their cattle upon the land in 7uestion to the prejudice of the just rights of the plaintiff.
The attorney for the plaintiff maintains that, by interfering in the performance of the contract in
7uestion and obstructing the plaintiff in his efforts to secure the certificate of tittle to the land, the
defendant corporation made itself a co-participant #ith Teodorica 8ndencia in the breach of said
contract1 and inasmuch as father Cuan @abarga, at the time of said unla#ful intervention bet#een the
contracting parties, #as fully a#are of the e*istence of the contract $8*hibit C% #hich the plaintiff had
made #ith 6. 4. 9a3efield, of 6an Francisco, it is insisted that the defendant corporation is liable for
the loss conse7uent upon the failure of the project outlined in said contract.
In this connection reliance is placed by the plaintiff upon certain ,merican and 8nglish decisions in
#hich it is held that a person #ho is a stranger to contract may, by an unjustifiable interference in the
performance thereof, render himself liable for the damages conse7uent upon non-performance. It is
said that the doctrine of these cases #as recogni?ed by this court in -ilchrist vs. Cuddy $)> Phil. Eep.,
'!)%1 and #e have been earnestly pressed to e*tend the rule there enunciated to the situation here
presente.
6ome#hat more than half a century ago the 8nglish Court of the Queen/s 4ench sa# its #ay clear to
permit an action for damages to be maintained against a stranger to a contract #rongfully interfering in
its performance. The leading case on this subject is @umley vs. -ye $N;'=O, ) 8l. L 4l., )+%. It there
appeared that the plaintiff, as manager of a theatre, had entered into a contract #ith Miss Cohanna
9agner, an opera singer,, #hereby she bound herself for a period to sing in the plaintiff/s theatre and
no#here else. The defendant, 3no#ing of the e*istence of this contract, and, as the declaration alleged,
&maliciously intending to injure the plaintiff,& enticed and produced Miss 9agner to leave the plaintiff/s
employment. It #as held that the plaintiff #as entitled to recover damages. The right #hich #as here
recogni?ed had its origin in a rule, long familiar to the courts of the common la#, to the effect that any
person #ho entices a servant from his employment is liable in damages to the master. The master/s
interest in the service rendered by his employee is here considered as a distinct subject of juridical
right. It being thus accepted that it is a legal #rong to brea3 up a relation of personal service, the
7uestion no# arose #hether it is illegal for one person to interfere #ith any contract relation subsisting
bet#een others. Prior to the decision of @umley vs. -ye NsupraO it had been supposed that the liability
here under consideration #as limited to the cases of the enticement of menial servants, apprentices, and
others to #hom the 8nglish 6tatutes of @aborers #ere applicable. 4ut in the case cited the majority of
the judges concurred in the opinion that the principle e*tended to all cases of hiring. This doctrine #as
follo#ed by the Court of ,ppeal in 4o#en vs. 0all $N;;O, + Q. 4., 5iv., ===%1 and in Temperton vs.
Eussell $N;>=O, Q. 4., "'%, it #as held that the right of action for maliciously procuring a breach of
contract is not confined to contracts for personal services, but e*tends to contracts in general. In that
case the contract #hich the defendant had procured to be breached #as a contract for the supply of
building material.
Malice in some form is generally supposed to be an essential ingredient in cases of interference #ith
contract relations. 4ut upon the authorities it is enough if the #rong-doer, having 3no#ledge of the
e*istence of the contract relations, in bad faith sets about to brea3 it up. 9hether his motive is to
benefit himself or gratify his spite by #or3ing mischief to the employer is immaterial. Malice in the
sense of ill-#ill or spite is not essential.
:pon the 7uestion as to #hat constitutes legal justification, a good illustration #as put in the leading
case. If a party enters into contract to go for another upon a journey to a remote and unhealthful
climate, and a third person, #ith a bona fide purpose of benefiting the one #ho is under contract to go,
dissuades him from the step, no action #ill lie. 4ut if the advice is not disinterested and the persuasion
is used for &the indirect purpose of benefiting the defendant at the e*pense of the plaintiff,& the
intermedler is liable if his advice is ta3en and the contract bro3en.
The doctrine embodied in the cases just cited has sometimes been found useful, in the complicated
relations of modern industry, as a means of restraining the activities of labor unions and industrial
societies #hen improperly engaged in the promotion of stri3es. ,n illustration of the application of the
doctrine in 7uestion in a case of this 3ind is found in 6outh 9ales Miners Federation vs. -lamorgan
Coal Co. $N>('O%, ,. C., )=>%. It there appeared that certain miners employed in the plaintiff/s
collieries, acting under the order of the e*ecutive council of the defendant federation, violated their
contract #ith the plaintiff by abstaining from #or3 on certain days. The federation and council acted
#ithout any actual malice or ill-#ill to#ards the plaintiff, and the only object of the order in 7uestion
#as that the price of coal might thereby be 3ept up, a factor #hich affected the miner/s #age scale. It
#as held that no sufficient justification #as sho#n and that the federation #as liable.
In the :nited 6tates, the rule established in 8ngland by @umley vs. -ye NsupraO and subse7uent cases is
commonly accepted, though in a fe# of the 6tates the broad idea that a stranger to a contract can be
held liable upon its is rejected, and in these jurisdictions the doctrine, if accepted at all, is limited to the
situation #here the contract is strictly for personal service. $4oyson vs. Thorn, >; Cal., '";1 Chambers
L Marshall vs. 4ald#in > Dy., )1 4ourlier vs. Macauley, > Dy., ='1 -lencoe @and L -ravel Co.
vs. 0udson 4ros. Com. Co., =; Mo., !=>.%
It should be observed in this connection that, according to the 8nglish and ,merican authorities, no
7uestion can be made as to the liability to one #ho interferes #ith a contract e*isting bet#een others by
means #hich, under 3no#n legal cannons, can be denominated an unla#ful means. Thus, if
performance is prevented by force, intimidation, coercion, or threats, or by false or defamatory
statements, or by nuisance or riot, the person using such unla#ful means is, under all the authorities,
liable for the damage #hich ensues. ,nd in jurisdictions #here the doctrine of @umley vs. -ye NsupraO
is rejected, no liability can arise from a meddlesome and malicious interference #ith a contract relation
unless some such unla#ful means as those just indicated are used. $6ee cases last above cited.%
This brings us to the decision made by this court in -ilchrist vs. Cuddy $)> Phil. Eep., '!)%. It there
appeared that one Cuddy, the o#ner of a cinematographic film, let it under a rental contract to the
plaintiff -ilchrist for a specified period of time. In violation of the terms of this agreement, Cuddy
proceeded to turn over the film also under a rental contract, to the defendants 8spejo and Paldarriaga.
-ilchrist thereupon restored to the Court of First Instance and produced an injunction restraining the
defendants from e*hibiting the film in 7uestion in their theater during the period specified in the
contract of Cuddy #ith -ilchrist. :pon appeal to this court it #as in effect held that the injunction #as
not improperly granted, although the defendants did not, at the time their contract #as made, 3no# the
identity of the plaintiff as the person holding the prior contract but did 3no# of the e*istence of a
contract in favor of someone. It #as also said ar"uendo, that the defendants #ould have been liable in
damages under article >() of the Civil Code, if the action had been brought by the plaintiff to recover
damages. The force of the opinion is, #e thin3, some#hat #ea3ened by the criticism contain in the
concurring opinion, #here it is said that the 7uestion of breach of contract by inducement #as not
really involved in the case. Ta3ing the decision upon the point #hich #as rally decided, it is authority
for the proposition that one #ho buys something #hich he 3no#s has been sold to some other person
can be restrained from using that thing to the prejudice of the person having the prior and better right.
Translated into terms applicable to the case at bar, the decision in -ilchrist vs. Cuddy $)> Phil. Eep.,
'!)%, indicates that the defendant corporation, having notice of the sale of the land in 7uestion to
5ay#alt, might have been enjoined by the latter from using the property for gra?ing its cattle thereon.
That the defendant corporation is also liable in this action for the damage resulting to the plaintiff from
the #rongful use and occupation of the property has also been already determined. 4ut it #ill be
observed that in order to sustain this liability it is not necessary to resort to any subtle e*egesis relative
to the liability of a stranger to a contract for unla#ful interference in the performance thereof. It is
enough that defendant use the property #ith notice that the plaintiff had a prior and better right.
,rticle >() of the Civil Code declares that any person #ho by an act or omission, characteri?ed by
fault or negligence, causes damage to another shall be liable for the damage so done. Ignoring so much
of this article as relates to liability for negligence, #e ta3e the rule to be that a person is liable for
damage done to another by any culpable act1 and by &culpable act& #e mean any act #hich is
blame#orthy #hen judged by accepted legal standards. The idea thus e*pressed is undoubtedly broad
enough to include any rational conception of liability for the tortious acts li3ely to be developed in any
society. Thus considered, it cannot be said that the doctrine of @umley vs. -ye NsupraO and related cases
is repugnant to the principles of the civil la#.
<evertheless, it must be admitted that the codes and jurisprudence of the civil la# furnish a some#hat
uncongenial field in #hich to propagate the idea that a stranger to a contract may sued for the breach
thereof. ,rticle )'" of the Civil Code declares that contracts are binding only bet#een the parties and
their privies. In conformity #ith this it has been held that a stranger to a contract has no right of action
for the nonfulfillment of the contract e*cept in the case especially contemplated in the second
paragraph of the same article. $:y Tam and :y Fet vs. @eonard, =( Phil. Eep., !".% ,s observed by
this court in Manila Eailroad Co. vs. CompaMia Transatlantica, E. -. <o. =; $=; Phil. Eep., ;"'%, a
contract, #hen effectually entered into bet#een certain parties, determines not only the character and
e*tent of the liability of the contracting parties but also the person or entity by #hom the obligation is
e*igible. The same idea should apparently be applicable #ith respect to the person against #hom the
obligation of the contract may be enforced1 for it is evident that there must be a certain mutuality in the
obligation, and if the stranger to a contract is not permitted to sue to enforce it, he cannot consistently
be held liable upon it.
If the t#o antagonistic ideas #hich #e have just brought into ju*taposition are capable of
reconciliation, the process must be accomplished by distinguishing clearly bet#een the right of action
arising from the improper interference #ith the contract by a stranger thereto, considered as an
independent act generate of civil liability, and the right of action e) contractu against a party to the
contract resulting from the breach thereof. 0o#ever, #e do not propose here to pursue the matter
further, inasmuch as, for reasons presently to be stated, #e are of the opinion that neither the doctrine
of @umley vs. -ye NsupraO nor the application made of it by this court in -ilchrist vs. Cuddy $)> Phil.
Eep., '!)%, affords any basis for the recovery of the damages #hich the plaintiff is supposed to have
suffered by reason of his inability to comply #ith the terms of the 9a3efield contract.
9hatever may be the character of the liability #hich a stranger to a contract may incur by advising or
assisting one of the parties to evade performance, there is one proposition upon #hich all must agree.
This is, that the stranger cannot become more e*tensively liable in damages for the nonperformance of
the contract than the party in #hose behalf he intermeddles. To hold the stranger liable for damages in
e*cess of those that could be recovered against the immediate party to the contract #ould lead to results
at once grotes7ue and unjust. In the case at bar, as Teodorica 8ndencia #as the party directly bound by
the contract, it is obvious that the liability of the defendant corporation, even admitting that it has made
itself coparticipant in the breach of the contract, can in no even e*ceed hers. This leads us to consider at
this point the e*tent of the liability of Teodorica 8ndencia to the plaintiff by reason of her failure to
surrender the certificate of title and to place the plaintiff in possession.
It should in the first place be noted that the liability of Teodorica 8ndencia for damages resulting from
the breach of her contract #ith 5ay#alt #as a proper subject for adjudication in the action for specific
performance #hich 5ay#alt instituted against her in >(> and #hich #as litigated by him to a
successful conclusion in this court, but #ithout obtaining any special adjudication #ith reference to
damages. Indemnification for damages resulting from the breach of a contract is a right inseparably
anne*ed to every action for the fulfillment of the obligation $art. )!, Civil Code%1 and its is clear that
if damages are not sought or recovered in the action to enforce performance they cannot be recovered
in an independent action. ,s to Teodorica 8ndencia, therefore, it should be considered that the right of
action to recover damages for the breach of the contract in 7uestion #as e*hausted in the prior suit.
0o#ever, her attorneys have not seen fit to interpose the defense of res 7udicata in her behalf1 and as
the defendant corporation #as not a party to that action, and such defense could not in any event be of
any avail to it, #e proceed to consider the 7uestion of the liability of Teodorica 8ndencia for damages
#ithout refernce to this point.
The most that can be said #ith refernce to the conduct of Teodorica 8ndencia is that she refused to
carry out a contract for the sale of certain land and resisted to the last an action for specific
performance in court. The result #as that the plaintiff #as prevented during a period of several years
from e*erting that control over the property #hich he #as entitled to e*ert and #as mean#hile unable
to dispose of the property advantageously. <o#, #hat is the measure of damages for the #rongful
detention of real property by the vender after the time has come for him to place the purchaser in
possessionB
The damages ordinarily and normally recoverable against a vendor for failure to deliver land #hich he
has contracted to deliver is the value of the use and occupation of the land for the time during #hich it
is #rongfully #ithheld. ,nd of course #here the purchaser has not paid the purchaser money, a
deduction may be made in respect to the interest on the money #hich constitutes the purchase price.
6ubstantially the same rule holds #ith respect to the liability of a landlord #ho fails to put his tenant in
possession pursuant to contract of lease. The measure of damages is the value of the leasehold interest,
or use and occupation, less the stipulated rent, #here this has not been paid. The rule that the measure
of damages for the #rongful detention of land is normally to be found in the value of use and
occupation is, #e believe, one of the things that may be considered certain in the la# $=> cyc., +=(1 )!
Cyc., (') 6edge#ic3 on 5amages, <inth ed., sec. ;'.% K almost as #ellsettled, indeed, as the rule
that the measure of damages for the #rongful detention of money is to be found in the interest.
9e recogni?e the possibility that more e*tensive damages may be recovered #here, at the time of the
creation of the contractual obligation, the vendor, or lessor, is a#are of the use to #hich the purchaser
or lessee desires to put the property #hich is the subject of the contract, and the contract is made #ith
the eyes of the vendor or lessor open to the possibility of the damage #hich may result to the other
party from his o#n failure to give possession. The case before us is not this character, inasmuch as at
the time #hen the rights of the parties under the contract #ere determined, nothing #as 3no#n to any
to them about the 6an Francisco capitalist #ho #ould be #illing to bac3 the project portrayed in
8*hibit C.
The e*tent of the liability for the breach of a contract must be determined in the light of the situation in
e*istence at the time the contract is made1 and the damages ordinarily recoverable are in all events
limited to such as might be reasonable are in all events limited to such as might be reasonably foreseen
in the light of the facts then 3no#n to the contracting parties. 9here the purchaser desires to protect
himself, in the contingency of the failure of the vendor promptly to give possession, from the
possibility of incurring other damages than such as the incident to the normal value of the use and
occupation, he should cause to be inserted in the contract a clause providing for stipulated amount to
the paid upon failure of the vendor to give possession1 and not case has been called to our attention
#here, in the absence of such a stipulation, damages have been held to be recoverable by the purchaser
in e*cess of the normal value of use and occupation. An the contrary, the most fundamental
conceptions of the la# relative to the assessment of damages are inconsistent #ith such idea.
The principles governing this branch of the la# #ere profoundly considered in the case 0adley vs.
4a*endale $> 8*ch., =!%, decided in the 8nglish Court of 8*che7uer in ;'!1 and a fe# #ords relative
to the principles governing #ill here be found instructive. The decision in that case is considered a
leading authority in the jurisprudence of the common la#. The plaintiffs in that case #ere proprietors of
a mill in -loucester, #hich #as propelled by steam, and #hich #as engaged in grinding and supplying
meal and flour to customers. The shaft of the engine got bro3en, and it became necessarily that the
bro3en shaft be sent to an engineer or foundry man at -reen#ich, to serve as a model for casting or
manufacturing another that #ould fit into the machinery. The bro3en shaft could be delivered at
-reen#ich on the second day after its receipts by the carrier it. It #as delivered to the defendants, #ho
#ere common carriers engaged in that business bet#een these points, and #ho had told plaintiffs it
#ould be delivered at -reen#ich on the second day after its delivery to them, if delivered at a given
hour. The carriers #ere informed that the mill #as stopped, but #ere not informed of the special
purpose for #hich the bro3en shaft #as desired to for#arded, They #ere not told the mill #ould remain
idle until the ne# shaft #ould be returned, or that the ne# shaft could not be manufactured at
-reen#ich until the bro3en one arrived to serve as a model. There #as delay beyond the t#o days in
delivering the bro3en shaft at -reen#ich, and a corresponding delay in starting the mill. <o
e*planation of the delay #as offered by the carriers. The suit #as brought to recover damages for the
lost profits of the mill, cause by the delay in delivering the bro3en shaft. It #as held that the plaintiff
could not recover.
The discussion contained in the opinion of the court in that case leads to the conclusion that the
damages recoverable in case of the breach of a contract are t#o sorts, namely, $% the ordinary, natural,
and in a sense necessary damage1 and $)% special damages.
Ardinary damages is found in all breaches of contract #here the are no special circumstances to
distinguish the case specially from other contracts. The consideration paid for an unperformed promise
is an instance of this sort of damage. In all such cases the damages recoverable are such as naturally
and generally #ould result from such a breach, &according to the usual course of things.& In case
involving only ordinary damage no discussion is ever indulged as to #hether that damage #as
contemplated or not. This is conclusively presumed from the immediateness and inevitableness of the
damage, and the recovery of such damage follo#s as a necessary legal conse7uence of the breach.
Ardinary damage is assumed as a matter of la# to be #ithin the contemplation of the parties.
6pecial damage, on the other hand, is such as follo#s less directly from the breach than ordinary
damage. It is only found in case #here some e*ternal condition, apart from the actual terms to the
contract e*ists or intervenes, as it #ere, to give a turn to affairs and to increase damage in a #ay that
the promisor, #ithout actual notice of that e*ternal condition, could not reasonably be e*pected to
foresee. Concerning this sort of damage, 0adley vs. 4a*endale $;'!% NsupraO lays do#n the definite
and just rule that before such damage can be recovered the plaintiff must sho# that the particular
condition #hich made the damage a possible and li3ely conse7uence of the breach #as 3no#n to the
defendant at the time the contract #as made.
The statement that special damages may be recovered #here the li3elihood of such damages flo#ing
from the breach of the contract is contemplated and foreseen by the parties needs to be supplemented
by a proposition #hich, though not enunciated in 0adley vs. 4a*endale, is yet clearly to be dra#n from
subse7uent cases. This is that #here the damage #hich a plaintiff see3s to recover as special damage is
so far speculative as to be in contemplation of la# remote, notification of the special conditions #hich
ma3e that damage possible cannot render the defendant liable therefor. To bring damages #hich #ould
ordinarily be treated as remote #ithin the category of recoverable special damages, it is necessary that
the condition should be made the subject of contract in such sense as to become an e*press or implied
term of the engagement. 0orne vs. Midland E. Co. $@. E., ; C. P., =% is a case #here the damage
#hich #as sought to be recovered as special damage #as really remote, and some of the judges rightly
places the disallo#ance of the damage on the ground that to ma3e such damage recoverable, it must so
far have been #ithin the contemplation of the parties as to form at least an implied term of the contract.
4ut others proceeded on the idea that the notice given to the defendant #as not sufficiently full and
definite. The result #as the same in either vie#. The facts in that case #ere as follo#s. The plaintiffs,
shoe manufacturers at D, #ere under contract to supply by a certain day shoes to a firm in @ondon for
the French government. They delivered the shoes to a carrier in sufficient time for the goods to reach
@ondon at the time stipulated in the contract and informed the railroad agent that the shoes #ould be
thro#n bac3 upon their hands if they did not reach the destination in time. The defendants negligently
failed to for#ard the good in due season. The sale #as therefore lost, and the mar3et having fallen, the
plaintiffs had to sell at a loss.
In the preceding discussion #e have considered the plaintiff/s right chiefly against Teodorica 8ndencia1
and #hat has been said suffices in our opinion to demonstrate that the damages laid under the second
cause of action in the complaint could not be recovered from her, first, because the damages laid under
the second cause of action in the complaint could not be recovered from her, first, because the damages
in 7uestion are special damages #hich #ere not #ithin contemplation of the parties #hen the contract
#as made, and secondly, because said damages are too remote to be the subject of recovery. This
conclusion is also necessarily fatal to the right of the plaintiff to recover such damages from the
defendant corporation, for, as already suggested, by advising Teodorica not to perform the contract,
said corporation could in no event render itself more e*tensively liable than the principle in the
contract.
Aur conclusion is that the judgment of the trial court should be affirmed, and it is so ordered, #ith costs
against the appellant.
Arellano, C.*., +orres, Carson, Araullo, $alcol', Avancea and $oir, **., concur.
8< 4,<C
G.R. No. 59482 August 29, 1959
ATT<. ELADIO CH. RU-IO, petitioner,
vs.
HON. COURT OF APPEALS, HON. NICOLAS P. LAPENA 'R., HON. FIDEL P. PURISIMA
$!( HON. SEGUNDINO CHUA, $++ Cou,t o* A%%)$+s Asso#$t) 'ust#)sG $!( HON.
MARTIN P. -ADONG o* RTC -,$!#" 15, T$6$#o, A+6$&, respondents.
6"adio #h. Rubio for and in his own beha"f.
!emesio R. Bac"ao for .omin$a '. &an %ab"o and her nine chi"dren.
&9%O3@T#O?
PER CURIAMA
The petitioner *as found +uilty of direct conte"pt and sentenced to five B) days
i"prison"ent and a fine of P 400.00 by 7ud+e >artin 2. 2adon+ of the &e+ional Trial Court of
$lbay. <e =uestioned this order in a petition for certiorari *ith the Court of $ppeals, *hich
denied the sa"e on the +round that certiorari *as not the proper re"edy and that, in any
case, the record sho*ed that the respondent /ud+e had i""ediately rectified the errors
i"puted to hi" in his earlier i"pu+ned order. The petitioner has no* co"e before us to
protest this decision.
6e hold at the outset that the respondent Court of $ppeals has co""itted no reversible error
and that, on the contrary, the challen+ed decision is in accordance *ith la* and
/urisprudence. $ccordin+ly, it "ust be, as it is hereby, affir"ed.
2ut the "atter does not end here. There is still the =uestionable conduct of the petitioner in
this case that has elicited the concern of the Court.
8isa+reein+ *ith the choice of ad"inistrator "ade by 7ud+e 2adon+ in the estate
proceedin+s, the petitioner filed in the trial court *hat he captioned an C@r+ent 9-.Parte
>otion Prayin+ that 7ud+e >artin P. 2adon+ <i"self motu proprio &econsider and %et $side
#""ediately <is O*n Order 8ated 7uly 9, 195( $ppointin+ Oppositor 9u+enia Tabinas as the
&e+ular $d"inistrator in this Case %pecial Proceedin+ ?o. T10B, 9tc.C #n this "otion, he
accused 7ud+e 2adon+ of the cri"e of C!$3%#!#C$T#O? for reco+ni0in+ 9u+enia Tabinas
%an Pablo as the le+iti"ate *ife of the decedentC and stressed that the /ud+e *as sub/ect to
the penalties i"posed by the &evised Penal Code. <e averred that the /ud+e *as Cen+a+ed
in $ross misconduct and serious misbehavior and in violatin+ his la*yer,s oath,C and *as
Cdoin+ fa"sehood in his own court and vio"atin$ his "aw1erAs oathC for *hich he should be
C8#%2$&&98.C #n addition, he attached to his "otion a copy of a petition for certiorari *ith a
notation on the "ar+in that it *ould be filed *ith the Court of $ppeals unless the /ud+e
i""ediately rectified his order.
6hen asked to sho* cause *hy he should not be cited for conte"pt, the petitioner filed a 16.
pa+e co"pliance in *hich he repeated substantially the sa"e alle+ations in his "otion in the
sa"e veno"ous lan+ua+e and *ithout any si+n of repentance or apolo+y. The /ud+e
therefore i"posed upon hi" the above."entioned penalty.
#n his present petition, $tty. &ubio has turned his bile on the three "e"bers of the Court of
$ppeals *ho dis"issed his petition and in effect sustained 7ud+e 2adon+,s =uestioned
decision. The sa"e obvious "alice and disdain reveal all too tellin+ly the petitioner,s
conte"ptuous attitude to*ard the said /ustices *ho" he also accuses of CT<9 C&#>9 of
!$3%#!#C$T#O? intentionally "aliciously, feloniously, and OP9?3I bein+ co""ittedC by
the". <e clai"s that they have "ade Cuntruthful state"entsC and that they ,$33 $&9 !@33I
$6$&9 of the @?T&@T<!@3 %T$T9>9?T% #? T<9#& O6? 89C#%#O? and that they are
openly co""ittin+ the cri"e of !$3%#!#C$T#O?.C &epeatedly, he insists that the said /ustices
are C$33 !@33I $6$&9 of T<9#& O6? !$3%9<OO8% #? T<9#& O6? 89C#%#O? and that
Cthey are doin+ !$3%9<OO8% &#H<T #? T<9#& O6? CO@&T $?8 G#O3$T#?H 6#T<
#>P@?#TI T<9#& 3$6I9&%, O$T< C <e stresses that the said /ustices Care no* actively
9?H$H98 #? G9&I %9&#O@% >#%CO?8@CT #? T<9 P9&!O&>$?C9 O! T<9#&
7@8#C#$3 8@T#9% and G9&I >@C< 6O&%9 than for"er 7ud+e 8ionisio ?. Capistrano *ho
*as recently dishonorably dis"issed fro" the /udiciary.C <e concludes that the said /ustices
Cdeserve ?O6 to be 8#%<O?O&$23I 8#%>#%%98 fro" the /udiciary *hich they have
intentionally dishonored and continue to OP9?3I dishonor until no* a) *ith their o*n
!$3%9<OO8 in courtF b) *ith their C&#>9 O! !$3%#!#C$T#O?, and *ith their G9&I, G9&I
%9&#O@% >#%CO?8@CT.C There are si"ilar state"ents found else*here in the records of
this case, "ost of the" capitali0ed to stress the petitioner,s ar+u"ents and also althou+h this
*as not intended) his "alice and boorishness.
The petition is *orded in scurrilous and offensive lan+ua+e that clearly "anifests the
petitioner,s +ross disrespect for the trial /ud+e and the "e"bers of the Court of $ppeals *ho
rendered the challen+ed decision. This conduct and attitude of the petitioner cannot be si"ply
disre+arded by this Court or e-cused as a "ere eccentricity.
6hile every la*yer is entitled to present his case before the courts of /ustice *ith vi+or and
coura+e, he is not per"itted to "anifest such enthusias" throu+h threatenin+ and abusive
lan+ua+e, as in the case before us. The insolence displayed by the petitioner all too clearly
de"onstrates not only his spiteful character but as *ell his lack of respect for the courts of
/ustice. #nti"idatin+ /ud+es and accusin+ the" of personal *ron+doin+, especially if such
accusations are clearly unfounded, ill beco"es a "e"ber of the bar *ho, as such, o*es a
fittin+ courtesy and respect to those *ho sit on the bench and before *ho" he pleads. 6hile
there is no doubt that counsel have every ri+ht to i"pute to /ud+es honest "istakes in their
decisions, ascribin+ to the" personal shortco"in+s and vices and even deliberate atte"pts to
falsify the truth, cannot be condoned under the Code of Professional &esponsibility *hich
every la*yer "ust observe.
The da"nin+ evidence of the petitioner,s o*n verified pleadin+s has indubitably established is
+rossly i"proper conduct *ithout need of further proof or proceedin+s.
The petitioner has clearly sho*n by his arro+ant conduct that he does not deserve to re"ain
in the Philippine 2ar, *hich re=uires the hi+hest standards of decoru" and courtesy a"on+
its "e"bers. 3ackin+ the proper spirit of respect for the courts of /ustice, *hich he has
threatened and abused C*ith i"punity,C to use his o*n *ords, he "ust be e-cluded fro" the
brotherhood he has dishonored until he has pur+ed hi"self of his insolence.
6<9&9!O&9, the Court holds as follo*sA
1. The petition is 89?#98 for lack of "erit.
4. $tty. 9ladio Ch. &ubio is hereby %@%P9?898 as a "e"ber of the Philippine
2ar and is prohibited fro" en+a+in+ in the practice of la* until other*ise ordered
by this Court. This resolution shall be spread in his personal record and is
i""ediately e-ecutory.
%O O&89&98.