1

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SECOND DIVISION
[G.R. No. 151866. September 9, 2004]
SOLEDAD
CARPIO, petitioner,
VALMONTE, respondent.

vs. LEONORA

A.

DECISION
TINGA, J.:
Assailed in the instant petition for review is the Decision of the
Court of Appeals in C.A.-G.R. CV No. 69537, [1] promulgated on 17
January 2002.[2] The appellate court reversed the trial courts
decision denying respondents claim for damages against petitioner
and ordered the latter to pay moral damages to the former in the
amount of P100,000.00.
Respondent
Leonora
Valmonte
is
a
wedding
coordinator. Michelle del Rosario and Jon Sierra engaged her
services for their church wedding on 10 October 1996. At about
4:30 p.m. on that day, Valmonte went to the Manila Hotel where the
bride and her family were billeted. When she arrived at Suite 326-A,
several persons were already there including the bride, the brides
parents and relatives, the make-up artist and his assistant, the
official photographers, and the fashion designer. Among those
present was petitioner Soledad Carpio, an aunt of the bride who
was preparing to dress up for the occasion.
After reporting to the bride, Valmonte went out of the suite
carrying the items needed for the wedding rites and the gifts from
the principal sponsors. She proceeded to the Maynila Restaurant
where the reception was to be held. She paid the suppliers, gave
the meal allowance to the band, and went back to the suite. Upon
entering the suite, Valmonte noticed the people staring at her. It
was at this juncture that petitioner allegedly uttered the following
words to Valmonte: Ikaw lang ang lumabas ng kwarto, nasaan ang
dala mong bag? Saan ka pumunta? Ikaw lang and lumabas ng

kwarto, ikaw ang kumuha. Petitioner then ordered one of the ladies
to search Valmontes bag. It turned out that after Valmonte left the
room to attend to her duties, petitioner discovered that the pieces
of jewelry which she placed inside the comfort room in a paper bag
were lost. The jewelry pieces consist of two (2) diamond rings, one
(1) set of diamond earrings, bracelet and necklace with a total
value of about one million pesos. The hotel security was called in to
help in the search. The bags and personal belongings of all the
people inside the room were searched. Valmonte was allegedly
bodily searched, interrogated and trailed by a security guard
throughout the evening. Later, police officers arrived and
interviewed all persons who had access to the suite and
fingerprinted them including Valmonte. During all the time
Valmonte was being interrogated by the police officers, petitioner
kept on saying the words Siya lang ang lumabas ng kwarto.
Valmontes car which was parked at the hotel premises was also
searched but the search yielded nothing.
A few days after the incident, petitioner received a letter from
Valmonte demanding a formal letter of apology which she wanted
to be circulated to the newlyweds relatives and guests to redeem
her smeared reputation as a result of petitioners imputations
against her. Petitioner did not respond to the letter. Thus, on 20
February 1997, Valmonte filed a suit for damages against her
before the Regional Trial Court (RTC) of Pasig City, Branch 268. In
her complaint, Valmonte prayed that petitioner be ordered to pay
actual, moral and exemplary damages, as well as attorneys fees.
Responding to the complaint, petitioner denied having uttered
words or done any act to confront or single out Valmonte during the
investigation and claimed that everything that transpired after the
theft incident was purely a police matter in which she had no
participation. Petitioner prayed for the dismissal of the complaint
and for the court to adjudge Valmonte liable on her counterclaim.
The trial court rendered its Decision on 21 August 2000,
dismissing Valmontes complaint for damages. It ruled that when
petitioner sought investigation for the loss of her jewelry, she was

Respondent appealed to the Court of Appeals alleging that the

trial court erred in finding that petitioner did not slander her good
name and reputation and in disregarding the evidence she
presented.
The Court of Appeals ruled differently. It opined that Valmonte
has clearly established that she was singled out by petitioner as the
one responsible for the loss of her jewelry. It cited the testimony of
Serena Manding, corroborating Valmontes claim that petitioner
confronted her and uttered words to the effect that she was the
only one who went out of the room and that she was the one who
took the jewelry. The appellate court held that Valmontes claim for
damages is not predicated on the fact that she was subjected to
body search and interrogation by the police but rather petitioners
act of publicly accusing her of taking the missing jewelry. It
categorized petitioners utterance defamatory considering that it
imputed upon Valmonte the crime of theft. The court concluded
that petitioners verbal assault upon Valmonte was done with malice
and in bad faith since it was made in the presence of many people
without any solid proof except petitioners suspicion. Such
unfounded accusation entitles Valmonte to an award of moral
damages in the amount of P100,000.00 for she was publicly
humiliated, deeply insulted, and embarrassed. However, the court
found no sufficient evidence to justify the award of actual damages.
Hence, this petition.
Petitioner contends that the appellate courts conclusion that
she publicly humiliated respondent does not conform to the
evidence presented. She adds that even on the assumption that

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merely exercising her right and if damage results from a person

exercising his legal right, it is damnum absque injuria. It added that
no proof was presented by Valmonte to show that petitioner acted
maliciously and in bad faith in pointing to her as the culprit. The
court said that Valmonte failed to show that she suffered serious
anxiety, moral shock, social humiliation, or that her reputation was
besmirched due to petitioners wrongful act.

she uttered the words complained of, it was not shown that she did
so with malice and in bad faith.
In essence, petitioner would want this Court to review the
factual conclusions reached by the appellate court. The cardinal
rule adhered to in this jurisdiction is that a petition for review must
raise only questions of law,[3] and judicial review under Rule 45 does
not extend to an evaluation of the sufficiency of evidence unless
there is a showing that the findings complained of are totally
devoid of support in the record or that they are so glaringly
erroneous as to constitute serious abuse of discretion.[4] This Court,
while not a trier of facts, may review the evidence in order to arrive
at the correct factual conclusion based on the record especially so
when the findings of fact of the Court of Appeals are at variance
with those of the trial court, or when the inference drawn by the
Court of Appeals from the facts is manifestly mistaken.[5]
Contrary to the trial courts finding, we find sufficient evidence
on record tending to prove that petitioners imputations against
respondent was made with malice and in bad faith.
Petitioners testimony was shorn of substance and consists
mainly of denials. She claimed not to have uttered the words
imputing the crime of theft to respondent or to have mentioned the
latters name to the authorities as the one responsible for the loss of
her jewelry. Well-settled is the rule that denials, if unsubstantiated
by clear and convincing evidence, are negative and self-serving
which merit no weight in law and cannot be given greater
evidentiary value over the testimony of credible witnesses who
testify on affirmative matters.[6]
Respondent, however, has successfully refuted petitioners
testimony. Quite credibly, she has narrated in great detail her
distressing experience on that fateful day. She testified as to how
rudely she was treated by petitioner right after she returned to the
room. Petitioner immediately confronted her and uttered the
words Ikaw lang ang lumabas ng kwarto. Nasaan ang dala mong
bag? Saan ka pumunta? Ikaw ang kumuha. Thereafter, her body
was searched including her bag and her car. Worse, during the

Serea Manding, a make-up artist, corroborated respondents

testimony. She testified that petitioner confronted respondent in
the presence of all the people inside the suite accusing her of being
the only one who went out of the comfort room before the loss of
the jewelry. Manding added that respondent was embarrassed
because everybody else in the room thought she was a thief. [8] If
only to debunk petitioners assertion that she did not utter the
accusatory remarks in question publicly and with malice, Mandings
testimony on the point deserves to be reproduced. Thus,

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reception, she was once more asked by the hotel security to go to

the ladies room and she was again bodily searched.[7]

Q What did the defendant Mrs. Carpio tell the plaintiff, Mrs.
Valmonte?
A Ikaw yung nakita ko sa C.R. nawawala yung alahas ko.
Q When the defendant Mrs. Carpio said that to plaintiff
Mrs. Valmonte were there other people inside the
room?
A Yes, sir.
Q Were they able to hear what Mrs. Carpio said to Mrs.
Valmonte?

Q After that what did she do?

A Yes, sir.
A Then Leo came out from the other room she said, she is
(sic) the one I only saw from the comfort room.
Q Now, what exact word (sic) were said by Mrs. Carpio on
that matter?
A She said siya lang yung nakita kong galing sa C.R.

Q What was your thinking at that time that Mrs. Carpio

said that to Mrs. Valmonte?
A Nakakahiya kasi akala ng iba doon na talagang
magnanakaw siya. Kasi marami na kaming
nandodoon, dumating na yung couturier pati yung
video man and we sir.

Q And who was Mrs. Carpio or the defendant referring to?

A Leo Valmonte.

Q Who was the person you [were] alleging na nakakahiya

whose (sic) being accused or being somebody who
stole those item of jewelry?

Q Did she say anything else, the defendant?

A Her jewelry were lost and Leo was the only one she saw
in the C.R. After that she get (sic) the paper bag then
the jewelry were already gone.
Q Did she confront the plaintiff Mrs. Valmonte regarding
that fact?
A Yes.

A Nakakahiya para kay Leo kasi pinagbibintangan siya. Sa

dami namin doon siya yung napagbintangan.
Q And who is Leo, what is her full name?
A Leo Valmonte.
Q Did the defendant tell this matter to other people inside
the room?

Q And who else did she talk to?

A The father of the bride also.
Q And what did the defendant tell the mother regarding
this matter?
A Nawawala yung alahas ko. Sabi naman nung mother
baka naman hindi mo dala tignan mo munang mabuti.
Q Who was that other person that she talked to?
A Father of the bride.[9]
Significantly, petitioners counsel elected not to pursue her crossexamination of the witness on this point following her terse and
firm declaration that she remembered petitioners exact defamatory
words in answer to the counsels question.[10]
Jaime Papio, Security Supervisor at Manila Hotel, likewise
contradicted petitioners allegation that she did not suspect or
mention the name of respondent as her suspect in the loss of the
jewelry.[11]
To warrant recovery of damages, there must be both a right of
action, for a wrong inflicted by the defendant, and the damage
resulting therefrom to the plaintiff. Wrong without damage, or
damage without wrong, does not constitute a cause of action.[12]
In the sphere of our law on human relations, the victim of a
wrongful act or omission, whether done willfully or negligently, is
not left without any remedy or recourse to obtain relief for the
damage or injury he sustained. Incorporated into our civil law are
not only principles of equity but also universal moral precepts
which are designed to indicate certain norms that spring from the
fountain of good conscience and which are meant to serve as
guides for human conduct.[13] First of these fundamental precepts is

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A Yes, the mother of the bride.

the principle commonly known as abuse of rights under Article 19

of the Civil Code. It provides that Every person must, in the
exercise of his rights and in the performance of his duties, act with
justice, give everyone his due and observe honesty and good
faith. To find the existence of an abuse of right, the following
elements must be present: (1) there is a legal right or duty; (2)
which is exercised in bad faith; (3) for the sole intent or prejudicing
or injuring another.[14] When a right is exercised in a manner which
discards these norms resulting in damage to another, a legal wrong
is committed for which the actor can be held accountable. [15] One is
not allowed to exercise his right in a manner which would cause
unnecessary prejudice to another or if he would thereby offend
morals or good customs. Thus, a person should be protected only
when he acts in the legitimate exercise of his right, that is when he
acts with prudence and good faith; but not when he acts with
negligence or abuse.[16]
Complementing the principle of abuse of rights are the
provisions of Articles 20 and 21 of the Civil Code which read, thus:
Art. 20. Every person who, contrary to law, willfully or negligently
causes damage to another, shall indemnify the latter for the same.
Art. 21. Any person who willfully causes loss or injury to another in
a manner that is contrary to morals or good customs or public
policy shall compensate the latter for the damage.
The foregoing rules provide the legal bedrock for the award of
damages to a party who suffers damage whenever one commits an
act in violation of some legal provision, or an act which though not
constituting a transgression of positive law, nevertheless violates
certain rudimentary rights of the party aggrieved.
In the case at bar, petitioners verbal reproach against
respondent was certainly uncalled for considering that by her own
account nobody knew that she brought such kind and amount of
jewelry inside the paper bag.[17] This being the case, she had no
right to attack respondent with her innuendos which were not
merely inquisitive but outrightly accusatory. By openly accusing

Owing to the rule that great weight and even finality is given to
factual conclusions of the Court of Appeals which affirm those of
the trial court,[18] we sustain the findings of the trial court and the
appellate court that respondents claim for actual damages has not
been substantiated with satisfactory evidence during the trial and
must therefore be denied. To be recoverable, actual damages must
be duly proved with reasonable degree of certainty and the courts
cannot rely on speculation, conjecture or guesswork.[19]
Respondent, however, is clearly entitled to an award of moral
damages. Moral damages may be awarded whenever the
defendants wrongful act or omission is the proximate cause of the
plaintiffs physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury[20] in the cases specified or
analogous to those provided in Article 2219 of the Civil Code.
[21]
Though no proof of pecuniary loss is necessary in order that
moral damages may be adjudicated, courts are mandated to take
into account all the circumstances obtaining in the case and assess
damages according to their discretion. [22] Worthy of note is that
moral damages are not awarded to penalize the defendant, [23] or to
enrich a complainant, but to enable the latter to obtain means,
diversions or amusements that will serve to alleviate the moral

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respondent as the only person who went out of the room before the
loss of the jewelry in the presence of all the guests therein, and
ordering that she be immediately bodily searched, petitioner
virtually branded respondent as the thief. True, petitioner had the
right to ascertain the identity of the malefactor, but to malign
respondent without an iota of proof that she was the one who
actually stole the jewelry is an act which, by any standard or
principle of law is impermissible. Petitioner had willfully caused
injury to respondent in a manner which is contrary to morals and
good customs. Her firmness and resolve to find her missing jewelry
cannot justify her acts toward respondent. She did not act with
justice and good faith for apparently, she had no other purpose in
mind
but
to
prejudice
respondent. Certainly,
petitioner
transgressed the provisions of Article 19 in relation to Article 21 for
which she should be held accountable.

suffering he has undergone, by reason of defendants culpable

action. In any case, award of moral damages must be proportionate
to the sufferings inflicted.[24]
Based on the foregoing jurisprudential pronouncements, we
rule that the appellate court did not err in awarding moral
damages. Considering respondents social standing, and the fact
that her profession is based primarily on trust reposed in her by her
clients, the seriousness of the imputations made by petitioner has
greatly tarnished her reputation and will in one way or the other,
affect her future dealings with her clients, the award
of P100,000.00 as moral damages appears to be a fair and
reasonable assessment of respondents damages.
WHEREFORE, the instant Petition is DENIED. Costs against
petitioner.
SO ORDERED.
Puno, (Chairman), and Callejo, Sr., JJ., concur.
Austria-Martinez, J., on official leave.
Chico-Nazario, J., on leave.

Page

Manila

Republic of the Philippines

SUPREME COURT

The Facts
Petitioner Eusebio Gonzales (Gonzales) was a client of PCIB

FIRST DIVISION

for a good 15 years before he filed the instant case. His account
EUSEBIO GONZALES,
Petitioner,

G.R. No. 180257

Present:

- versus -

PHILIPPINE COMMERCIAL AND

INTERNATIONAL BANK, EDNA
OCAMPO, and ROBERTO NOCEDA,
Respondents.

with PCIB was handled by respondent Edna Ocampo (Ocampo) until

she was replaced by respondent Roberto Noceda (Noceda).

CORONA, C.J., Chairperson,

In October 1992, PCIB granted a credit line to Gonzales
VELASCO, JR.,
through
the
execution
of
a
Credit-On-Hand
Loan
NACHURA,*
DEL CASTILLO, and
[3]
Agreement (COHLA), in which the aggregate amount of the
PEREZ, JJ.
accounts of Gonzales with PCIB served as collateral for and his
Promulgated:
availment limit under the credit line. Gonzales drew from said credit

February 23, 2011

x-----------------------------------------------------------------------------------------x
DECISION

line through the issuance of check. At the institution of the instant

case, Gonzales had a Foreign Currency Deposit (FCD) of USD
8,715.72 with PCIB.

VELASCO, JR., J.:

On October 30, 1995, Gonzales and his wife obtained a loan

The Case

for PhP 500,000. Subsequently, on December 26, 1995 and January

This is an appeal via a Petition for Review on Certiorari

under Rule 45 from the Decision[1] dated October 22, 2007 of the
Court of Appeals (CA) in CA-G.R. CV No. 74466, which denied
petitioners appeal from the December 10, 2001 Decision [2] in Civil
Case No. 99-1324 of the Regional Trial Court (RTC), Branch 138 in
Makati City. The RTC found justification for respondents dishonor of
petitioners check and found petitioner solidarily liable with the
spouses Jose

and

Jocelyn

Panlilio

(spouses

Panlilio) for

the three promissory notes they executed in favor of respondent

Philippine Commercial and International Bank (PCIB).

3, 1999, the spouses Panlilio and Gonzales obtained two additional

loans from PCIB in the amounts of PhP 1,000,000 and PhP 300,000,
respectively. These three loans amounting to PhP 1,800,000 were
covered by three promissory notes. [4] To secure the loans, a real
estate mortgage (REM) over a parcel of land covered by Transfer
Certificate of Title (TCT) No. 38012 was executed by Gonzales and
the spouses Panlilio. Notably, the promissory notes specified,
among others, the solidary liability of Gonzales and the spouses
Panlilio for the payment of the loans. However, it was the spouses
Panlilio who received the loan proceeds of PhP 1,800,000.

7
spouses Panlilio through the automatic debiting of their account

Page

The monthly interest dues of the loans were paid by the

On January 28, 1999, Gonzales, through counsel, wrote PCIB

insisting that the check he issued had been fully funded, and

with PCIB. But the spouses Panlilio, from the month of July 1998,

demanded the return of the proceeds of his FCD as well as

defaulted in the payment of the periodic interest dues from their

damages for the unjust dishonor of the check. [7] PCIB replied

PCIB account which apparently was not maintained with enough

on March 22, 1999 and stood its ground in freezing Gonzales

deposits. PCIB allegedly called the attention of Gonzales regarding

accounts due to the outstanding dues of the loans.[8] On May 26,

the July 1998 defaults and the subsequent accumulating periodic

1999, Gonzales reiterated his demand, reminding PCIB that it knew

interest dues which were left still left unpaid.

well that the actual borrowers were the spouses Panlilio and he
never benefited from the proceeds of the loans, which were

In the meantime, Gonzales issued a check dated September

serviced by the PCIB account of the spouses Panlilio.[9]

30, 1998 in favor of Rene Unson (Unson) for PhP 250,000 drawn
against the credit line (COHLA). However, on October 13, 1998,

PCIBs refusal to heed his demands compelled Gonzales to

upon presentment for payment by Unson of said check, it was

file the instant case for damages with the RTC, on account of the

dishonored by PCIB due to the termination by PCIB of the credit line

alleged unjust dishonor of the check issued in favor of Unson.

under COHLA on October 7, 1998 for the unpaid periodic interest

dues from the loans of Gonzales and the spouses Panlilio. PCIB

The Ruling of the RTC

likewise froze the FCD account of Gonzales.

After due trial, on December 10, 2001, the RTC rendered a
Consequently, Gonzales had a falling out with Unson due to
the dishonor of the check. They had a heated argument in the
premises of the Philippine Columbian Association (PCA) where they
are both members, which caused great embarrassment and
humiliation to Gonzales. Thereafter, on November 5, 1998, Unson
sent a demand letter[5] to Gonzales for the PhP 250,000. And
on December 3, 1998, the counsel of Unson sent a second demand
letter[6] to Gonzales with the threat of legal action. With his FCD
account that PCIB froze, Gonzales was forced to source out and pay
the PhP 250,000 he owed to Unson in cash.

Decision in favor of PCIB. The decretal portion reads:

WHEREFORE, judgment is rendered as follows
(a) on the first issue, plaintiff is liable to pay
defendant Bank as principal under the promissory
notes, Exhibits A, B and C;
(b) on the second issue, the Court finds that
there is justification on part of the defendant Bank to
dishonor the check, Exhibit H;
(c) on the third issue, plaintiff and defendants
are not entitled to damages from each other.

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No pronouncement as to costs.
SO ORDERED.[10]

the part of PCIB in dishonoring the check issued by Gonzales in

favor of Unson, ratiocinating that PCIB was merely exercising its
rights under the contractual stipulations in the COHLA brought

The RTC found Gonzales solidarily liable with the spouses

about by the outstanding past dues of the REM loan and interests

Panlilio on the three promissory notes relative to the outstanding

for which Gonzales was solidarily liable with the spouses Panlilio to

REM loan. The trial court found no fault in the termination by PCIB

pay under the promissory notes.

of the COHLA with Gonzales and in freezing the latters accounts to

answer for the past due PhP 1,800,000 loan. The trial court ruled

Thus, we have this petition.

that the dishonor of the check issued by Gonzales in favor of Unson

The Issues

was proper considering that the credit line under the COHLA had
already been terminated or revoked before the presentment of the
check.
Aggrieved, Gonzales appealed the RTC Decision before the
CA.
The Ruling of the CA
On September 26, 2007, the appellate court rendered its
Decision dismissing Gonzales appeal and affirming in toto the RTC
Decision. The fallo reads:
WHEREFORE, in view of the foregoing, the
decision, dated December 10, 2001, in Civil Case No.
99-1324 is hereby AFFIRMED in toto.
SO ORDERED.[11]

In dismissing Gonzales appeal, the CA, first, confirmed the

RTCs findings that Gonzales was indeed solidarily liable with the
spouses Panlilio for the three promissory notes executed for the
REM loan; second, it likewise found neither fault nor negligence on

Gonzales, as before the CA, raises again the following

assignment of errors:
I - IN NOT CONSIDERING THAT THE LIABILITY ARISING
FROM PROMISSORY NOTES (EXHIBITS A, B AND C,
PETITIONER; EXHIBITS 1, 2 AND 3, RESPONDENT)
PERTAINED TO BORROWER JOSE MA. PANLILIO AND
NOT TO
APPELLANT
AS
RECOGNIZED AND
ACKNOWLEDGE[D] BY RESPONDENT PHILIPPINE
COMMERCIAL & INDUSTRIAL BANK (RESPONDENT
BANK).
II - IN FINDING THAT THE RESPONDENTS WERE NOT
AT FAULT NOR GUILTY OF GROSS NEGLIGENCE IN
DISHONORING PETITIONERS CHECK DATED 30
SEPTEMBER 1998 IN THE AMOUNT OF P250,000.00
FOR THE REASON ACCOUNT CLOSED, INSTEAD OF
MERELY REFER TO DRAWER GIVEN THE FACT THAT
EVEN AFTER DISHONOR, RESPONDENT SIGNED A
CERTIFICATION DATED 7 DECEMBER 1998 THAT
CREDIT ON HAND (COH) LOAN AGREEMENT WAS
STILL VALID WITH A COLLATERAL OF FOREIGN
CURRENCY DEPOSIT (FCD) OF [USD] 48,715.72.
III - IN NOT AWARDING DAMAGES AGAINST
RESPONDENTS DESPITE PRESENTATION OF CLEAR
PROOF TO SUPPORT ACTION FOR DAMAGES.[12]

9
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The Courts Ruling

The core issues can be summarized, as follows: first,
whether Gonzales is liable for the three promissory notes covering
the PhP 1,800,000 loan he made with the spouses Panlilio where a
REM over a parcel of land covered by TCT No. 38012 was
constituted

as

security;

and second,

whether

PCIB

properly

dishonored the check of Gonzales drawn against the COHLA he had

with the bank.
The petition is partly meritorious.
First Issue: Solidarily Liability on Promissory Notes
A close perusal of the records shows that the courts a
quo correctly found Gonzales solidarily liable with the spouses
Panlilio for the three promissory notes.
The promissory notes covering the PhP 1,800,000 loan show
the following:
[13]

(1) Promissory Note BD-090-1766-95,

dated October 30,
1995, for PhP 500,000 was signed by Gonzales and his wife,
Jessica Gonzales;
(2) Promissory Note BD-090-2122-95,[14] dated December
26, 1995, for PhP 1,000,000 was signed by Gonzales and the
spouses Panlilio; and
(3) Promissory Note BD-090-011-96,[15] dated January 3,
1996, for PhP 300,000 was signed by Gonzales and the
spouses Panlilio.

Clearly, Gonzales is liable for the loans covered by the

above promissory notes. First, Gonzales admitted that he is an
accommodation party which PCIB did not dispute. In his testimony,
Gonzales admitted that he merely accommodated the spouses
Panlilio at the suggestion of Ocampo, who was then handling his
accounts, in order to facilitate the fast release of the loan. Gonzales
testified:
ATTY. DE JESUS:
Now in this case you filed against the bank you
mentioned there was a loan also applied for by the
Panlilios in the sum of P1.8 Million Pesos. Will you
please tell this Court how this came about?
GONZALES:
Mr. Panlilio requested his account officer . . . . at that
time it is a P42.0 Million loan and if he secures
another P1.8 Million loan the release will be longer
because it has to pass to XO.
Q: After that what happened?
A: So as per suggestion since Mr. Panlilio is a good
friend of mine and we co-owned the property I
agreed initially to use my name so that the
loan can be utilized immediately by Mr.
Panlilio.
Q: Who is actually the borrower of this P1.8 Million
Pesos?
A: Well, in paper me and Mr. Panlilio.
Q: Who received the proceeds of said loan?
A: Mr. Panlilio.
Q: Do you have any proof that it was Mr. Panlilio who
actually received the proceeds of this P1.8
Million Pesos loan?
A: A check was deposited in the account of Mr.
Panlilio.[16]
xxxx

Q: So these two officers Ocampo and Noceda knew

that this was actually the account of Mr.
Panlilio and not your account?
A: Yes, sir. In fact even if there is a change of account
officer they are always informing me that the
account will be debited to Mr. Panlilios
account.[17]
Moreover, the first note for PhP 500,000 was signed by
Gonzales and his wife as borrowers, while the two subsequent
notes showed the spouses Panlilio sign as borrowers with
Gonzales. It is, thus, evident that Gonzales signed, as borrower, the
promissory notes covering the PhP 1,800,000 loan despite not
receiving any of the proceeds.
Second, the records of PCIB indeed bear out, and was
admitted by Noceda, that the PhP 1,800,000 loan proceeds went to
the spouses Panlilio, thus:
ATTY. DE JESUS: [on Cross-Examination]
Is it not a fact that as far as the records of the bank
[are] concerned the proceeds of the 1.8 million loan
was received by Mr. Panlilio?
NOCEDA:
Yes sir.[18]

10
Page

Q: By the way upon whose suggestion was the loan

of Mr. Panlilio also placed under your name
initially?
A: Well it was actually suggested by the account
officer at that time Edna Ocampo.
Q: How about this Mr. Rodolfo Noceda?
A: As you look at the authorization aspect of the loan
Mr. Noceda is the boss of Edna so he has been
familiar with my account ever since its
inception.

The fact that the loans were undertaken by Gonzales when

he signed as borrower or co-borrower for the benefit of the spouses
Panlilioas shown by the fact that the proceeds went to the spouses
Panlilio who were servicing or paying the monthly duesis beside the
point. For signing as borrower and co-borrower on the promissory
notes with the proceeds of the loans going to the spouses Panlilio,
Gonzales has extended an accommodation to said spouses.
Third, as an accommodation party, Gonzales is solidarily
liable with the spouses Panlilio for the loans. In Ang v. Associated
Bank,[19] quoting the definition of an accommodation party under
Section 29 of the Negotiable Instruments Law, the Court cited that
an accommodation party is a person who has signed the
instrument as maker, drawer, acceptor, or indorser, without
receiving value therefor, and for the purpose of lending his name to
some other person.[20] The Court further explained:
[A]n accommodation party is one who meets
all the three requisites, viz: (1) he must be a party to
the instrument, signing as maker, drawer, acceptor,
or indorser; (2) he must not receive value therefor;
and (3) he must sign for the purpose of lending his
name or credit to some other person. An
accommodation party lends his name to enable the
accommodated party to obtain credit or to raise
money; he receives no part of the consideration for
the instrument but assumes liability to the other
party/ies thereto. The accommodation party is liable
on the instrument to a holder for value even though
the holder, at the time of taking the instrument,
knew him or her to be merely an accommodation
party, as if the contract was not for accommodation.
As petitioner acknowledged it to be, the
relation between an accommodation party and the
accommodated party is one of principal and
suretythe accommodation party being the surety. As
such, he is deemed an original promisor and debtor
from the beginning; he is considered in law as the
same party as the debtor in relation to whatever is

Thus, the knowledge, acquiescence, or even demand by

Ocampo for an accommodation by Gonzales in order to extend the
credit or loan of PhP 1,800,000 to the spouses Panlilio does not
exonerate Gonzales from liability on the three promissory notes.
Fourth, the solidary liability of Gonzales is clearly stipulated
in the promissory notes which uniformly begin, For value received,
the undersigned (the BORROWER) jointly and severally promise
to pay x x x. Solidary liability cannot be presumed but must be
established by law or contract. [22] Article 1207 of the Civil Code
pertinently states that there is solidary liability only when the
obligation expressly so states, or when the obligation requires
solidarity. This is true in the instant case where Gonzales, as
accommodation party, is immediately, equally, and absolutely
bound with the spouses Panlilio on the promissory notes which
indubitably
stipulated
solidary
liability
for
all
the
borrowers. Moreover, the three promissory notes serve as the
contract between the parties. Contracts have the force of law
between the parties and must be complied with in good faith. [23]
Second Issue: Improper Dishonor of Check
Having ruled that Gonzales is solidarily liable for the three
promissory notes, We shall now touch upon the question of whether

11
Page

adjudged touching the obligation of the latter since

their liabilities are interwoven as to be inseparable.
Although a contract of suretyship is in essence
accessory or collateral to a valid principal obligation,
the
suretys
liability
to
the
creditor
is immediate, primary and absolute;
he
is directly and equally bound with the principal. As an
equivalent of a regular party to the undertaking, a
surety becomes liable to the debt and duty of the
principal obligor even without possessing a direct or
personal interest in the obligations nor does he
receive any benefit therefrom.[21]

it was proper for PCIB to dishonor the check issued by Gonzales

against the credit line under the COHLA.
We answer in the negative.
As a rule, an appeal by certiorari under Rule 45 of the Rules
of Court is limited to review of errors of law. [24] The factual findings
of the trial court, especially when affirmed by the appellate court,
are generally binding on us unless there was a misapprehension of
facts or when the inference drawn from the facts was manifestly
mistaken.[25]The instant case falls within the exception.
The courts a quo found and held that there was a proper
dishonor of the PhP 250,000 check issued by Gonzales against the
credit line, because the credit line was already closed prior to the
presentment of the check by Unson; and the closing of the credit
line was likewise proper pursuant to the stipulations in the
promissory notes on the banks right to set off or apply all moneys
of the debtor in PCIBs hand and the stipulations in the COHLA on
the PCIBs right to terminate the credit line on grounds of default by
Gonzales.
Gonzales argues otherwise, pointing out that he was not
informed about the default of the spouses Panlilio and that the
September 21, 1998 account statement of the credit line shows a
balance of PhP 270,000 which was likewise borne out by the
December 7, 1998 PCIBs certification that he has USD 8,715.72 in
his FCD account which is more than sufficient collateral to
guarantee the PhP 250,000 check, dated September 30, 1998, he
issued against the credit line.
A careful scrutiny of the records shows that the courts a
quo committed reversible error in not finding negligence by PCIB in
the dishonor of the PhP 250,000 check.

We note that it is indeed understandable for Gonzales to

push the spouses Panlilio to pay the outstanding dues of the PhP
1,800,000 loan, since he was only an accommodation party and
was not personally interested in the loan. Thus, a meeting was set
by Gonzales with the spouses Panlilio and the PCIB officers, Noceda
and Ocampo, in the spouses Panlilios jewelry shop in SM Megamall
on October 5, 1998. Unfortunately, the meeting did not push
through due to the heavy traffic Noceda and Ocampo encountered.
Such knowledge of the default by Gonzales was, however,
not enough to properly apprise Gonzales about the default and the
outstanding dues. Verily, it is not enough to be merely informed to
pay over a hundred thousand without being formally apprised of
the exact aggregate amount and the corresponding dues pertaining
to specific loans and the dates they became due.
Gonzales testified that he was not duly notified about the
outstanding interest dues of the loan:
ATTY. DE JESUS:
Now when Mr. Panlilios was encountering problems
with the bank did the defendant bank [advise] you of
any problem with the same account?
GONZALES:
They never [advised] me in writing.

12
Page

First. There was no proper notice to Gonzales of the default

and delinquency of the PhP 1,800,000 loan. It must be borne in
mind that while solidarily liable with the spouses Panlilio on the PhP
1,800,000 loan covered by the three promissory notes, Gonzales is
only an accommodation party and as such only lent his name and
credit to the spouses Panlilio. While not exonerating his solidary
liability, Gonzales has a right to be properly apprised of the default
or delinquency of the loan precisely because he is a co-signatory of
the promissory notes and of his solidary liability.

Q: How did you come to know that there was a

problem?
A: When my check bounced sir.[26]

On the other hand, the PCIB contends otherwise, as Corazon

Nepomuceno testified:
ATTY. PADILLA:
Can you tell this Honorable Court what is it that you
told Mr. Gonzales when you spoke to him at the
celphone?
NEPOMUCENO:
I just told him to update the interest so that we would
not have to cancel the COH Line and he could
withdraw the money that was in the deposit because
technically, if an account is past due we are not
allowed to let the client withdraw funds because they
are allowed to offset funds so, just to help him get his
money, just to update the interest so that we could
allow him to withdraw.
Q: Withdraw what?
A: His money on the COH, whatever deposit he has
with us.
Q: Did you inform him that if he did not update the
interest he would not be able to withdraw his
money?
A: Yes sir, we will be forced to hold on to any assets
that he has with us so thats why we
suggested just to update the interest because
at the end of everything, he would be able to
withdraw more funds than the interest that
the money he would be needed to update the
interest.[27]

From the foregoing testimonies, between the denial of

Gonzales and the assertion by PCIB that Gonzales was properly
apprised, we find for Gonzales. We find the testimonies of the
former PCIB employees to be self-serving and tenuous at best, for

PCIB is well aware and did not dispute the fact that Gonzales
is an accommodation party. It also acted in accordance with such
fact by releasing the proceeds of the loan to the spouses Panlilio
and likewise only informed the spouses Panlilio of the interest
dues. The spouses Panlilio, through their account [28] with PCIB, were
paying the periodic interest dues and were the ones periodically
informed by the bank of the debiting of the amounts for the
periodic interest payments. Gonzales never paid any of the periodic
interest dues. PCIBs Noceda admitted as much in his crossexamination:
ATTY. DE JESUS: [on Cross-Examination]
And there was no instance that Mr. Gonzales ever
made even interest for this loan, is it not, its always
Mr. Panlilio who was paying the interest for this loan?
NOCEDA:
Yes sir.[29]

Indeed, no evidence was presented tending to show that

Gonzales was periodically sent notices or notified of the various
periodic interest dues covering the three promissory notes. Neither
do the records show that Gonzales was aware of amounts for the
periodic interests and the payment for them. Such were serviced by
the spouses Panlilio.
Thus, PCIB ought to have notified Gonzales about the status
of the default or delinquency of the interest dues that were not paid
starting July 1998. And such notification must be formal or in
written form considering that the outstanding periodic interests
became due at various dates, i.e., on July 8, 17, and 28, 1998, and
the various amounts have to be certain so that Gonzales is not only

13
Page

there was no proper written notice given by the bank. The record is
bereft of any document showing that, indeed, Gonzales was
formally informed by PCIB about the past due periodic interests.

properly apprised but is given the opportunity to pay them being

solidarily liable for the loans covered by the promissory notes.
It is the bank which computes these periodic interests and
such dues must be put into writing and formally served to Gonzales
if he were asked to pay them, more so when the payments by the
spouses Panlilio were charged through the account of the spouses
Panlilio where the interest dues were simply debited. Such
arrangement did not cover Gonzales bank account with PCIB, since
he is only an accommodation party who has no personal interest in
the PhP 1,800,000 loan. Without a clear and determinate demand
through a formal written notice for the exact periodic interest dues
for the loans, Gonzales cannot be expected to pay for them.
In business, more so for banks, the amounts demanded from
the debtor or borrower have to be definite, clear, and without
ambiguity. It is not sufficient simply to be informed that one must
pay over a hundred thousand aggregate outstanding interest dues
without clear and certain figures. Thus, We find PCIB negligent in
not properly informing Gonzales, who is an accommodation party,
about the default and the exact outstanding periodic interest
dues. Without being properly apprised, Gonzales was not given the
opportunity to properly act on them.
It was only through a letter[30] sent by PCIB dated October 2,
1998 but incongruously showing the delinquencies of the PhP
1,800,000 loan at a much later date, i.e., as of October 31, 1998,
when Gonzales was formally apprised by PCIB. In it, the interest
due was PhP 106,1616.71 and penalties for the unpaid interest due
of PhP 64,766.66, or a total aggregate due of PhP 171,383.37. But it
is not certain and the records do not show when the letter was sent
and when Gonzales received it. What is clear is that such letter was
belatedly sent by PCIB and received by Gonzales after the fact that
the latters FCD was already frozen, his credit line under the COHLA

And way much later, or on May 4, 1999, was a demand

letter from the counsel of PCIB sent to Gonzales demanding
payment of the PhP 1,800,000 loan. Obviously, these formal written
notices sent to Gonzales were too late in the day for Gonzales to
act properly on the delinquency and he already suffered the
humiliation and embarrassment from the dishonor of his check
drawn against the credit line.

14

COHLA. Noceda testified on cross-examination on the Offering

Ticket[32] recommending the termination of the credit line, thus:

Page

was terminated or suspended, and his PhP 250,000 check in favor

of Unson was dishonored.

ATTY. DE JESUS: [on Cross-Examination]

This Exhibit 8, you have not furnished at anytime a
copy to the plaintiff Mr. Gonzales is it not?
NOCEDA:
No sir but verbally it was relayed to him.
Q: But you have no proof that Mr. Gonzales came to
know about this Exhibit 8?
A: It was relayed to him verbally.

To reiterate, a written notice on the default and deficiency of

the PhP 1,800,000 loan covered by the three promissory notes was
required to apprise Gonzales, an accommodation party. PCIB is
obliged to formally inform and apprise Gonzales of the defaults and
the outstanding obligations, more so when PCIB was invoking the
solidary liability of Gonzales. This PCIB failed to do.

Q: But there is no written proof?

A: No sir.
Q: And it is only now that you claim that it was
verbally relayed to him, its only now when
you testified in Court?
A: Before . . .
Q: To whom did you relay this information?
A: It was during the time that we were going to
Megamall, it was relayed by Liza that he has
to pay his obligations or else it will adversely
affect the status of the account.[33]

Second. PCIB was grossly negligent in not giving prior

notice to Gonzales about its course of action to suspend, terminate,
or revoke the credit line, thereby violating the clear stipulation in
the COHLA.
The COHLA, in its effectivity clause, clearly provides:
4. EFFECTIVITY The COH shall be effective for
a period of one (1) year commencing from the
receipt by the CLIENT of the COH checkbook issued
by the BANK, subject to automatic renewals for same
periods unless terminated by the BANK upon prior
notice served on CLIENT.[31] (Emphasis ours.)

It is undisputed that the bank unilaterally revoked,

suspended, and terminated the COHLA without giving Gonzales
prior notice as required by the above stipulation in the

On the other hand, the testimony of Corazon Nepomuceno

shows:
ATTY. DE JESUS: [on Cross-Examination]
Now we go to the other credit facility which is the
credit on hand extended solely of course to Mr.
Eusebio Gonzales who is the plaintiff here, Mr. Panlilio
is not included in this credit on hand facility. Did I
gather from you as per your Exhibit 7 as of October
2, 1998 you were the one who recommended the
cancellation of this credit on hand facility?
NEPOMUCENO:

Q: And you approved it?

A: Yes sir.
Q: Did you inform Mr. Gonzales that you have already
cancelled his credit on hand facility?
A: As far as I know, it is the account officer who will
inform him.
Q: But you have no record that he was informed?
A: I dont recall and we have to look at the folder to
determine if they were informed.
Q: If you will notice, this letter . . . what do you call
this letter of yours?
A: That is our letter advising them or reminding them
of their unpaid interest and that if he is able
to update his interest he can extend the
promissory
note
or
restructure
the
outstanding.
Q: Now, I call your attention madam witness, there is
nothing in this letter to the clients advising
them or Mr. Gonzales that his credit on hand
facility was already cancelled?
A: I dont know if there are other letters aside from
this.
Q: So in this letter there is nothing to inform or to
make Mr. Eusebio aware that his credit on
hand facility was already cancelled?
A: No actually he can understand it from the last
sentence. If you will be able to update your
outstanding interest, we can apply the
extention of your promissory note so in other
words we are saying that if you dont, you
cannot extend the promissory note.
Q: You will notice that the subject matter of this
October 2, 1998 letter is only the loan of 1.8
million is it not, as you can see from the
letter? Okay?
A: Ah . . .

15
Page

It was recommended by the account officer and I

supported it.

Q: Okay. There is nothing there that will show that

that also refers to the credit on hand facility
which was being utilized by Mr. Gonzales is it
not?
A: But I dont know if there are other letters that are
not presented to me now.[34]

The foregoing testimonies of PCIB officers clearly show that

not only did PCIB fail to give prior notice to Gonzales about the
Offering Ticket for the process of termination, suspension, or
revocation of the credit line under the COHLA, but PCIB likewise
failed to inform Gonzales of the fact that his credit line has been
terminated. Thus, we find PCIB grossly negligent in the termination,
revocation, or suspension of the credit line under the COHLA. While
PCIB invokes its right on the so-called cross default provisions, it
may not with impunity ignore the rights of Gonzales under the
COHLA.
Indeed, the business of banking is impressed with public
interest and great reliance is made on the banks sworn profession
of diligence and meticulousness in giving irreproachable service.
Like a common carrier whose business is imbued with public
interest, a bank should exercise extraordinary diligence to negate
its liability to the depositors.[35] In this instance, PCIB is sorely
remiss in the diligence required in treating with its client,
Gonzales. It may not wantonly exercise its rights without respecting
and honoring the rights of its clients.
Art. 19 of the New Civil Code clearly provides that [e]very
person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe
honesty and good faith. This is the basis of the principle of abuse of
right which, in turn, is based upon the maxim suum jus summa
injuria (the abuse of right is the greatest possible wrong).[36]

Malice or bad faith is at the core of Art. 19. Malice or bad

faith implies a conscious and intentional design to do a wrongful act
for a dishonest purpose or moral obliquity. [38] In the instant case,
PCIB was able to send a letter advising Gonzales of the unpaid
interest on the loans[39] but failed to mention anything about the
termination of the COHLA. More significantly, no letter was ever
sent to him about the termination of the COHLA. The failure to give
prior notice on the part of PCIB is already prima facie evidence of
bad faith.[40] Therefore, it is abundantly clear that this case falls
squarely within the purview of the principle of abuse of rights as
embodied in Art. 19.
Third. There is no dispute on the right of PCIB to suspend,
terminate, or revoke the COHLA under the cross default provisions
of both the promissory notes and the COHLA. However, these cross
default provisions do not confer absolute unilateral right to PCIB, as
they are qualified by the other stipulations in the contracts or
specific circumstances, like in the instant case of an
accommodation party.

16
Page

In order for Art. 19 to be actionable, the following elements

must be present: (1) the existence of a legal right or duty, (2) which
is exercised in bad faith, and (3) for the sole intent of prejudicing or
injuring another.[37] We find that such elements are present in the
instant case. The effectivity clause of the COHLA is crystal clear
that termination of the COH should be done only upon prior
notice served on the CLIENT. This is the legal duty of PCIBto
inform Gonzales of the termination. However, as shown by the
above testimonies, PCIB failed to give prior notice to Gonzales.

the payment of this Note any and all moneys

which may be in its hands on deposit or
otherwise belonging to the Borrower. The
Borrower irrevocably appoint/s the Lender, effective
upon the nonpayment of this Note on demand/at
maturity or upon the happening of any of the events
of default, but without any obligation on the Lenders
part should it choose not to perform this mandate, as
the attorney-in-fact of the Borrower, to sell and
dispose of any property of the Borrower, which may
be in the Lenders possession by public or private
sale, and to apply the proceeds thereof to the
payment of this Note; the Borrower, however, shall
remain liable for any deficiency.[41] (Emphasis ours.)

The above provisos are indeed qualified with the specific

circumstance of an accommodation party who, as such, has not
been servicing the payment of the dues of the loans, and must first
be properly apprised in writing of the outstanding dues in order to
answer for his solidary obligation.
The same is true for the COHLA, which in its default clause
provides:
16. DEFAULT The CLIENT shall be considered in
default under the COH if any of the following events
shall occur:
1. x x x
2. Violation of the terms and conditions of this
Agreement or any contract of the CLIENT with
the BANK or any bank, persons, corporations
or entities for the payment of borrowed
money, or any other event of default in such
contracts.[42]

The promissory notes uniformly provide:

The lender is hereby authorized, at its
option and without notice, to set off or apply to

The above pertinent default clause must be read in

conjunction with the effectivity clause (No. 4 of the COHLA, quoted

Fourth. We find the testimony[43] of Ocampo incredible on

the point that the principal borrower of the PhP 1,800,000 loan
covered by the three promissory notes is Gonzales for which the
bank officers had special instructions to grant and that it was
through the instructions of Gonzales that the payment of the
periodic interest dues were debited from the account of the
spouses Panlilio.
For one, while the first promissory note dated October 30,
1995 indeed shows Gonzales as the principal borrower, the other
promissory notes dated December 26, 1995 and January 3, 1996
evidently show that it was Jose Panlilio who was the principal
borrower with Gonzales as co-borrower. For another, Ocampo
cannot feign ignorance on the arrangement of the payments by the
spouses Panlilio through the debiting of their bank account. It is
incredulous that the payment arrangement is merely at the behest
of Gonzales and at a mere verbal directive to do so. The fact that
the spouses Panlilio not only received the proceeds of the loan but
were servicing the periodic interest dues reinforces the fact that
Gonzales was only an accommodation party.
Thus, due to PCIBs negligence in not giving Gonzalesan
accommodation partyproper notice relative to the delinquencies in
the PhP 1,800,000 loan covered by the three promissory notes, the

17
Page

above), which expressly provides for the right of client to prior

notice. The rationale is simple: in cases where the bank has the
right to terminate, revoke, or suspend the credit line, the client
must be notified of such intent in order for the latter to act
accordinglywhether to correct any ground giving rise to the right of
the bank to terminate the credit line and to dishonor any check
issued or to act in accord with such termination, i.e., not to issue
any check drawn from the credit line or to replace any checks that
had been issued. This, the bankwith gross negligencefailed to
accord Gonzales, a valued client for more than 15 years.

unjust termination, revocation, or suspension of the credit line

under the COHLA from PCIBs gross negligence in not honoring its
obligation to give prior notice to Gonzales about such termination
and in not informing Gonzales of the fact of such termination,
treating Gonzales account as closed and dishonoring his PhP
250,000 check, was certainly a reckless act by PCIB. This resulted
in the actual injury of PhP 250,000 to Gonzales whose FCD account
was frozen and had to look elsewhere for money to pay Unson.
With banks, the degree of diligence required is more than
that of a good father of the family considering that the business of
banking is imbued with public interest due to the nature of their
function. The law imposes on banks a high degree of obligation to
treat the accounts of its depositors with meticulous care, always
having in mind the fiduciary nature of banking. [44] Had Gonzales
been properly notified of the delinquencies of the PhP 1,800,000
loan and the process of terminating his credit line under the
COHLA, he could have acted accordingly and the dishonor of the
check would have been avoided.
Third Issue: Award of Damages
The banking system has become an indispensable
institution in the modern world and plays a vital role in the
economic life of every civilized societybanks have attained a
ubiquitous presence among the people, who have come to regard
them with respect and even gratitude and most of all, confidence,
and it is for this reason, banks should guard against injury
attributable to negligence or bad faith on its part.[45]
In the instant case, Gonzales suffered from the negligence
and bad faith of PCIB. From the testimonies of Gonzales witnesses,
particularly those of Dominador Santos [46]and Freddy Gomez,[47] the
embarrassment and humiliation Gonzales has to endure not only
before his former close friend Unson but more from the members

The termination of the COHLA by PCIB without prior notice

and the subsequent dishonor of the check issued by Gonzales
constitute acts of contra bonus mores. Art. 21 of the Civil Code
refers to such acts when it says, Any person who willfully causes
loss or injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter for
damage.
Accordingly, this Court finds that such acts warrant the
payment of indemnity in the form of nominal damages. Nominal
damages are recoverable where a legal right is technically violated
and must be vindicated against an invasion that has produced no
actual present loss of any kind x x x. [49] We further explained the
nature of nominal damages in Almeda v. Cario:
x x x Its award is thus not for the purpose of
indemnification for a loss but for the recognition and
vindication of a right. Indeed, nominal damages are
damages in name only and not in fact. When granted
by the courts, they are not treated as an equivalent
of a wrong inflicted but simply a recognition of the
existence of a technical injury. A violation of the
plaintiffs right, even if only technical, is sufficient to
support an award of nominal damages. Conversely,
so long as there is a showing of a violation of
the right of the plaintiff, an award of nominal
damages is proper.[50] (Emphasis Ours.)
In the present case, Gonzales had the right to be informed
of the accrued interest and most especially, for the suspension of

18
Page

and families of his friends and associates in the PCA, which he

continues to experience considering the confrontation he had with
Unson and the consequent loss of standing and credibility among
them from the fact of the apparent bouncing check he
issued. Credit is very important to businessmen and its loss or
impairment needs to be recognized and compensated.[48]

his COHLA. For failure to do so, the bank is liable to pay nominal
damages. The amount of such damages is addressed to the sound
discretion of the court, taking into account the relevant
circumstances.[51] In this case, the Court finds that the grant of PhP
50,000 as nominal damages is proper.
Moreover, as We held in MERALCO v. CA,[52] failure to give
prior notice when required, such as in the instant case, constitutes
a breach of contract and is a clear violation of Art. 21 of the Code.
In cases such as this, Art. 2219 of the Code provides that moral
damages may be recovered in acts referred to in its Art. 21.
Further, Art. 2220 of the Code provides that [w]illful injury to
property may be a legal ground for awarding moral damages if the
court should find that, under the circumstances, such damages are
justly due. The same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith. Similarly, every person
who, contrary to law, willfully or negligently causes damage to
another, shall indemnify the latter for the same. [53] Evidently,
Gonzales is entitled to recover moral damages.
Even in the absence of malice or bad faith, a depositor still
has the right to recover reasonable moral damages, if the depositor
suffered mental anguish, serious anxiety, embarrassment, and
humiliation.[54] Although incapable of pecuniary estimation, moral
damages are certainly recoverable if they are the proximate result
of the defendants wrongful act or omission. The factual
antecedents bolstered by undisputed testimonies likewise show the
mental anguish and anxiety Gonzales had to endure with the threat
of Unson to file a suit. Gonzales had to pay Unson PhP 250,000,
while his FCD account in PCIB was frozen, prompting Gonzales to
demand from PCIB and to file the instant suit.
The award of moral damages is aimed at a restoration within
the limits of the possible, of the spiritual status quo anteit must
always reasonably approximate the extent of injury and be

Furthermore, the initial carelessness of the banks omission

in not properly informing Gonzales of the outstanding interest
duesaggravated by its gross neglect in omitting to give prior notice
as stipulated under the COHLA and in not giving actual notice of
the termination of the credit linejustifies the grant of exemplary
damages of PhP 10,000. Such an award is imposed by way of
example or correction for the public good.
Finally, an award for attorneys fees is likewise called for
from PCIBs negligence which compelled Gonzales to litigate to
protect his interest. In accordance with Art. 2208(1) of the Code,
attorneys fees may be recovered when exemplary damages are
awarded. We find that the amount of PhP 50,000 as attorneys fees
is reasonable.
WHEREFORE,
this
petition
is PARTLY GRANTED. Accordingly, the CA Decision dated October
22, 2007 in CA-G.R. CV No. 74466 is hereby REVERSED and SET
ASIDE. The Philippine Commercial and International Bank (now
Banco De Oro) is ORDERED to pay Eusebio Gonzales PhP 50,000 as
nominal damages, PhP 50,000 as moral damages, PhP 10,000 as
exemplary damages, and PhP 50,000 as attorneys fees.
No pronouncement as to costs.
SO ORDERED.

19
Page

proportional to the wrong committed. [55] Thus, an award of PhP

50,000 is reasonable moral damages for the unjust dishonor of the
PhP 250,000 which was the proximate cause of the consequent
humiliation, embarrassment, anxiety, and mental anguish suffered
by Gonzales from his loss of credibility among his friends,
colleagues and peers.

EN BANC

20
Page

Republic of the Philippines

SUPREME COURT
Manila

NOTHING CHANGED REST ASSURED RETURNING

VERY SOON APOLOGIZE MAMA PAPA LOVE .
PAKING
Thereafter Velez did not appear nor was he heard from again.

G.R. No. L-20089

December 26, 1964

BEATRIZ P. WASSMER, plaintiff-appellee,

vs.
FRANCISCO X. VELEZ, defendant-appellant.
Jalandoni & Jamir for defendant-appellant.
Samson S. Alcantara for plaintiff-appellee.
BENGZON, J.P., J.:
The facts that culminated in this case started with dreams and
hopes, followed by appropriate planning and serious endeavors, but
terminated in frustration and, what is worse, complete public
humiliation.
Francisco X. Velez and Beatriz P. Wassmer, following their mutual
promise of love, decided to get married and set September 4, 1954
as the big day. On September 2, 1954 Velez left this note for his
bride-to-be:
Dear Bet
Will have to postpone wedding My mother opposes
it. Am leaving on the Convair today.
Please do not ask too many people about the reason
why That would only create a scandal.
Paquing
But the next day, September 3, he sent her the following telegram:

Sued by Beatriz for damages, Velez filed no answer and was

declared in default. Plaintiff adduced evidence before the clerk of
court as commissioner, and on April 29, 1955, judgment was
rendered ordering defendant to pay plaintiff P2,000.00 as actual
damages; P25,000.00 as moral and exemplary damages; P2,500.00
as attorney's fees; and the costs.
On June 21, 1955 defendant filed a "petition for relief from orders,
judgment and proceedings and motion for new trial and
reconsideration." Plaintiff moved to strike it cut. But the court, on
August 2, 1955, ordered the parties and their attorneys to appear
before it on August 23, 1955 "to explore at this stage of the
proceedings the possibility of arriving at an amicable settlement." It
added that should any of them fail to appear "the petition for relief
and the opposition thereto will be deemed submitted for
resolution."
On August 23, 1955 defendant failed to appear before court.
Instead, on the following day his counsel filed a motion to defer for
two weeks the resolution on defendants petition for relief. The
counsel stated that he would confer with defendant in Cagayan de
Oro City the latter's residence on the possibility of an
amicable element. The court granted two weeks counted from
August 25, 1955.
Plaintiff manifested on June 15, 1956 that the two weeks given by
the court had expired on September 8, 1955 but that defendant
and his counsel had failed to appear.
Another chance for amicable settlement was given by the court in
its order of July 6, 1956 calling the parties and their attorneys to
appear on July 13, 1956. This time. however, defendant's counsel

On July 20, 1956 the court issued an order denying defendant's

aforesaid petition. Defendant has appealed to this Court. In his
petition of June 21, 1955 in the court a quo defendant alleged
excusable negligence as ground to set aside the judgment by
default. Specifically, it was stated that defendant filed no answer in
the belief that an amicable settlement was being negotiated.
A petition for relief from judgment on grounds of fraud, accident,
mistake or excusable negligence, must be duly supported by an
affidavit of merits stating facts constituting a valid defense. (Sec. 3,
Rule 38, Rules of Court.) Defendant's affidavit of merits attached to
his petition of June 21, 1955 stated: "That he has a good and valid
defense against plaintiff's cause of action, his failure to marry the
plaintiff as scheduled having been due to fortuitous event and/or
circumstances beyond his control." An affidavit of merits like this
stating mere conclusions or opinions instead of facts is not valid.
(Cortes vs. Co Bun Kim, L-3926, Oct. 10, 1951; Vaswani vs. P.
Tarrachand Bros., L-15800, December 29, 1960.)
Defendant, however, would contend that the affidavit of merits was
in fact unnecessary, or a mere surplusage, because the judgment
sought to be set aside was null and void, it having been based on
evidence adduced before the clerk of court. In Province
of Pangasinan vs. Palisoc, L-16519, October 30, 1962, this Court
pointed out that the procedure of designating the clerk of court as
commissioner to receive evidence is sanctioned by Rule 34 (now
Rule 33) of the Rules of Court. Now as to defendant's consent to
said procedure, the same did not have to be obtained for he was
declared in default and thus had no standing in court (Velez vs.
Ramas, 40 Phil. 787; Alano vs. Court of First Instance, L-14557,
October 30, 1959).
In support of his "motion for new trial and reconsideration,"
defendant asserts that the judgment is contrary to law. The reason
given is that "there is no provision of the Civil Code authorizing" an
action for breach of promise to marry. Indeed, our ruling

21
Page

informed the court that chances of settling the case amicably were
nil.

in Hermosisima vs. Court of Appeals (L-14628, Sept. 30, 1960), as

reiterated in Estopa vs. Biansay (L-14733, Sept. 30, 1960), is that
"mere breach of a promise to marry" is not an actionable wrong. We
pointed out that Congress deliberately eliminated from the draft of
the new Civil Code the provisions that would have it so.
It must not be overlooked, however, that the extent to which acts
not contrary to law may be perpetrated with impunity, is not
limitless for Article 21 of said Code provides that "any person who
wilfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the
latter for the damage."
The record reveals that on August 23, 1954 plaintiff and defendant
applied for a license to contract marriage, which was subsequently
issued (Exhs. A, A-1). Their wedding was set for September 4, 1954.
Invitations were printed and distributed to relatives, friends and
acquaintances (Tsn., 5; Exh. C). The bride-to-be's trousseau, party
drsrses and other apparel for the important occasion were
purchased (Tsn., 7-8). Dresses for the maid of honor and the flower
girl were prepared. A matrimonial bed, with accessories, was
bought. Bridal showers were given and gifts received (Tsn., 6; Exh.
E). And then, with but two days before the wedding, defendant,
who was then 28 years old,: simply left a note for plaintiff stating:
"Will have to postpone wedding My mother opposes it ... " He
enplaned to his home city in Mindanao, and the next day, the day
before the wedding, he wired plaintiff: "Nothing changed rest
assured returning soon." But he never returned and was never
heard from again.
Surely this is not a case of mere breach of promise to marry. As
stated, mere breach of promise to marry is not an actionable
wrong. But to formally set a wedding and go through all the abovedescribed preparation and publicity, only to walk out of it when the
matrimony is about to be solemnized, is quite different. This is
palpably and unjustifiably contrary to good customs for which
defendant must be held answerable in damages in accordance with
Article 21 aforesaid.

Per express provision of Article 2219 (10) of the New Civil Code,
moral damages are recoverable in the cases mentioned in Article
21 of said Code. As to exemplary damages, defendant contends
that the same could not be adjudged against him because under
Article 2232 of the New Civil Code the condition precedent is that
"the defendant acted in a wanton, fraudulent, reckless, oppressive,
or malevolent manner." The argument is devoid of merit as under
the above-narrated circumstances of this case defendant clearly
acted in a "wanton ... , reckless [and] oppressive manner." This
Court's opinion, however, is that considering the particular
circumstances of this case, P15,000.00 as moral and exemplary
damages is deemed to be a reasonable award.
PREMISES CONSIDERED, with the above-indicated modification, the
lower court's judgment is hereby affirmed, with costs.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera, Paredes,
Dizon, Regala, Makalintal, and Zaldivar, JJ., concur.

22
Page

Defendant urges in his afore-stated petition that the damages

awarded were excessive. No question is raised as to the award of
actual damages. What defendant would really assert hereunder is
that the award of moral and exemplary damages, in the amount of
P25,000.00, should be totally eliminated.

THIRD DIVISION

G.R. No. 97336 February 19, 1993

GASHEM SHOOKAT BAKSH, petitioner,
vs.
HON. COURT OF APPEALS and MARILOU T.
GONZALES, respondents.
Public Attorney's Office for petitioner.
Corleto R. Castro for private respondent.

DAVIDE, JR., J.:

This is an appeal by certiorari under Rule 45 of the Rules of Court
seeking to review and set aside the Decision 1of the respondent
Court of Appeals in CA-G.R. CV No. 24256 which affirmed in toto the
16 October 1939 Decision of Branch 38 (Lingayen) of the Regional
Trial Court (RTC) of Pangasinan in Civil Case No. 16503. Presented is
the issue of whether or not damages may be recovered for a
breach of promise to marry on the basis of Article 21 of the Civil
Code of the Philippines.
The antecedents of this case are not complicated:
On 27 October 1987, private respondent, without the assistance of
counsel, filed with the aforesaid trial court a complaint 2 for
damages against the petitioner for the alleged violation of their
agreement to get married. She alleges in said complaint that: she is
twenty-two (22) years old, single, Filipino and a pretty lass of good

23
Page

Republic of the Philippines

SUPREME COURT
Manila

moral character and reputation duly respected in her community;

petitioner, on the other hand, is an Iranian citizen residing at the
Lozano Apartments, Guilig, Dagupan City, and is an exchange
student taking a medical course at the Lyceum Northwestern
Colleges in Dagupan City; before 20 August 1987, the latter
courted and proposed to marry her; she accepted his love on the
condition that they would get married; they therefore agreed to get
married after the end of the school semester, which was in October
of that year; petitioner then visited the private respondent's
parents in Baaga, Bugallon, Pangasinan to secure their approval to
the marriage; sometime in 20 August 1987, the petitioner forced
her to live with him in the Lozano Apartments; she was a virgin
before she began living with him; a week before the filing of the
complaint, petitioner's attitude towards her started to change; he
maltreated and threatened to kill her; as a result of such
maltreatment, she sustained injuries; during a confrontation with a
representative of the barangay captain of Guilig a day before the
filing of the complaint, petitioner repudiated their marriage
agreement and asked her not to live with him anymore and; the
petitioner is already married to someone living in Bacolod City.
Private respondent then prayed for judgment ordering the
petitioner to pay her damages in the amount of not less than
P45,000.00, reimbursement for actual expenses amounting to
P600.00, attorney's fees and costs, and granting her such other
relief and remedies as may be just and equitable. The complaint
was docketed as Civil Case No. 16503.
In his Answer with Counterclaim, 3 petitioner admitted only the
personal circumstances of the parties as averred in the complaint
and denied the rest of the allegations either for lack of knowledge
or information sufficient to form a belief as to the truth thereof or
because the true facts are those alleged as his Special and
Affirmative Defenses. He thus claimed that he never proposed
marriage to or agreed to be married with the private respondent;
he neither sought the consent and approval of her parents nor
forced her to live in his apartment; he did not maltreat her, but only
told her to stop coming to his place because he discovered that she
had deceived him by stealing his money and passport; and finally,
no confrontation took place with a representative of the barangay

After conducting a pre-trial on 25 January 1988, the trial court

issued a Pre-Trial Order 4 embodying the stipulated facts which the
parties had agreed upon, to wit:
1. That the plaintiff is single and resident (sic) of
Baaga, Bugallon, Pangasinan, while the defendant is
single, Iranian citizen and resident (sic) of Lozano
Apartment, Guilig, Dagupan City since September 1,
1987 up to the present;
2. That the defendant is presently studying at
Lyceum Northwestern, Dagupan City, College of
Medicine, second year medicine proper;
3. That the plaintiff is (sic) an employee at Mabuhay
Luncheonette , Fernandez Avenue, Dagupan City
since July, 1986 up to the present and a (sic) high
school graduate;
4. That the parties happened to know each other
when the manager of the Mabuhay Luncheonette,
Johhny Rabino introduced the defendant to the
plaintiff on August 3, 1986.
After trial on the merits, the lower court, applying Article 21 of the
Civil Code, rendered on 16 October 1989 a decision 5 favoring the
private respondent. The petitioner was thus ordered to pay the
latter damages and attorney's fees; the dispositive portion of the
decision reads:

24
Page

captain. Insisting, in his Counterclaim, that the complaint is

baseless and unfounded and that as a result thereof, he was
unnecessarily dragged into court and compelled to incur expenses,
and has suffered mental anxiety and a besmirched reputation, he
prayed for an award of P5,000.00 for miscellaneous expenses and
P25,000.00 as moral damages.

IN THE LIGHT of the foregoing consideration,

judgment is hereby rendered in favor of the plaintiff
and against the defendant.
1. Condemning (sic) the defendant to pay the
plaintiff the sum of twenty thousand (P20,000.00)
pesos as moral damages.
2. Condemning further the defendant to play the
plaintiff the sum of three thousand (P3,000.00) pesos
as atty's fees and two thousand (P2,000.00) pesos at
(sic) litigation expenses and to pay the costs.
3. All other claims are denied. 6
The decision is anchored on the trial court's findings and
conclusions that (a) petitioner and private respondent were lovers,
(b) private respondent is not a woman of loose morals or
questionable virtue who readily submits to sexual advances, (c)
petitioner, through machinations, deceit and false pretenses,
promised to marry private respondent, d) because of his persuasive
promise to marry her, she allowed herself to be deflowered by him,
(e) by reason of that deceitful promise, private respondent and her
parents in accordance with Filipino customs and traditions
made some preparations for the wedding that was to be held at the
end of October 1987 by looking for pigs and chickens, inviting
friends and relatives and contracting sponsors, (f) petitioner did not
fulfill his promise to marry her and (g) such acts of the petitioner,
who is a foreigner and who has abused Philippine hospitality, have
offended our sense of morality, good customs, culture and
traditions. The trial court gave full credit to the private respondent's
testimony because, inter alia, she would not have had the temerity
and courage to come to court and expose her honor and reputation
to public scrutiny and ridicule if her claim was false. 7
The above findings and conclusions were culled from the detailed
summary of the evidence for the private respondent in the
foregoing decision, digested by the respondent Court as follows:

25
Page

According to plaintiff, who claimed that she was a

virgin at the time and that she never had a boyfriend
before, defendant started courting her just a few
days after they first met. He later proposed marriage
to her several times and she accepted his love as
well as his proposal of marriage on August 20, 1987,
on which same day he went with her to her
hometown of Baaga, Bugallon, Pangasinan, as he
wanted to meet her parents and inform them of their
relationship and their intention to get married. The
photographs Exhs. "A" to "E" (and their submarkings)
of defendant with members of plaintiff's family or
with plaintiff, were taken that day. Also on that
occasion, defendant told plaintiffs parents and
brothers and sisters that he intended to marry her
during the semestral break in October, 1987, and
because plaintiff's parents thought he was good and
trusted him, they agreed to his proposal for him to
marry their daughter, and they likewise allowed him
to stay in their house and sleep with plaintiff during
the few days that they were in Bugallon. When
plaintiff and defendant later returned to Dagupan
City, they continued to live together in defendant's
apartment. However, in the early days of October,
1987, defendant would tie plaintiff's hands and feet
while he went to school, and he even gave her
medicine at 4 o'clock in the morning that made her
sleep the whole day and night until the following day.
As a result of this live-in relationship, plaintiff became
pregnant, but defendant gave her some medicine to
abort the fetus. Still plaintiff continued to live with
defendant and kept reminding him of his promise to
marry her until he told her that he could not do so
because he was already married to a girl in Bacolod
City. That was the time plaintiff left defendant, went
home to her parents, and thereafter consulted a
lawyer who accompanied her to the barangay
captain in Dagupan City. Plaintiff, her lawyer, her
godmother, and a barangay tanod sent by the

barangay captain went to talk to defendant to still

convince him to marry plaintiff, but defendant
insisted that he could not do so because he was
already married to a girl in Bacolod City, although the
truth, as stipulated by the parties at the pre-trial, is
that defendant is still single.
Plaintiff's father, a tricycle driver, also claimed that
after defendant had informed them of his desire to
marry Marilou, he already looked for sponsors for the
wedding, started preparing for the reception by
looking for pigs and chickens, and even already
invited many relatives and friends to the forthcoming
wedding. 8
Petitioner appealed the trial court's decision to the respondent
Court of Appeals which docketed the case as CA-G.R. CV No. 24256.
In his Brief, 9 he contended that the trial court erred (a) in not
dismissing the case for lack of factual and legal basis and (b) in
ordering him to pay moral damages, attorney's fees, litigation
expenses and costs.
On 18 February 1991, respondent Court promulgated the
challenged decision 10 affirming in toto the trial court's ruling of 16
October 1989. In sustaining the trial court's findings of fact,
respondent Court made the following analysis:
First of all, plaintiff, then only 21 years old when she
met defendant who was already 29 years old at the
time, does not appear to be a girl of loose morals. It
is uncontradicted that she was a virgin prior to her
unfortunate experience with defendant and never
had boyfriend. She is, as described by the lower
court, a barrio lass "not used and accustomed to
trend of modern urban life", and certainly would (sic)
not have allowed
"herself to be deflowered by the defendant if there
was no persuasive promise made by the defendant
to marry her." In fact, we agree with the lower court

Upon the other hand, appellant does not appear to

be a man of good moral character and must think so
low and have so little respect and regard for Filipino
women that he openly admitted that when he
studied in Bacolod City for several years where he

26
Page

that plaintiff and defendant must have been

sweethearts or so the plaintiff must have thought
because of the deception of defendant, for otherwise,
she would not have allowed herself to be
photographed with defendant in public in so (sic)
loving and tender poses as those depicted in the
pictures Exhs. "D" and "E". We cannot believe,
therefore, defendant's pretense that plaintiff was a
nobody to him except a waitress at the restaurant
where he usually ate. Defendant in fact admitted that
he went to plaintiff's hometown of Baaga, Bugallon,
Pangasinan, at least thrice; at (sic) the town fiesta on
February 27, 1987 (p. 54, tsn May 18, 1988), at (sic)
a beach party together with the manager and
employees of the Mabuhay Luncheonette on March 3,
1987 (p. 50, tsn id.), and on April 1, 1987 when he
allegedly talked to plaintiff's mother who told him to
marry her daughter (pp. 55-56, tsn id.). Would
defendant have left Dagupan City where he was
involved in the serious study of medicine to go to
plaintiff's hometown in Baaga, Bugallon, unless
there was (sic) some kind of special relationship
between them? And this special relationship must
indeed have led to defendant's insincere proposal of
marriage to plaintiff, communicated not only to her
but also to her parents, and (sic) Marites Rabino, the
owner of the restaurant where plaintiff was working
and where defendant first proposed marriage to her,
also knew of this love affair and defendant's proposal
of marriage to plaintiff, which she declared was the
reason why plaintiff resigned from her job at the
restaurant after she had accepted defendant's
proposal (pp. 6-7, tsn March 7, 1988).

finished his B.S. Biology before he came to Dagupan

City to study medicine, he had a common-law wife in
Bacolod City. In other words, he also lived with
another woman in Bacolod City but did not marry
that woman, just like what he did to plaintiff. It is not
surprising, then, that he felt so little compunction or
remorse in pretending to love and promising to marry
plaintiff, a young, innocent, trustful country girl, in
order to satisfy his lust on her. 11
and then concluded:
In sum, we are strongly convinced and so hold that it
was defendant-appellant's fraudulent and deceptive
protestations of love for and promise to marry
plaintiff that made her surrender her virtue and
womanhood to him and to live with him on the
honest and sincere belief that he would keep said
promise, and it was likewise these (sic) fraud and
deception on appellant's part that made plaintiff's
parents agree to their daughter's living-in with him
preparatory to their supposed marriage. And as these
acts of appellant are palpably and undoubtedly
against morals, good customs, and public policy, and
are even gravely and deeply derogatory and insulting
to our women, coming as they do from a foreigner
who has been enjoying the hospitality of our people
and taking advantage of the opportunity to study in
one of our institutions of learning, defendantappellant should indeed be made, under Art. 21 of
the Civil Code of the Philippines, to compensate for
the moral damages and injury that he had caused
plaintiff, as the lower court ordered him to do in its
decision in this case. 12
Unfazed by his second defeat, petitioner filed the instant petition
on 26 March 1991; he raises therein the single issue of whether or
not Article 21 of the Civil Code applies to the case at bar. 13

On 26 August 1991, after the private respondent had filed her

Comment to the petition and the petitioner had filed his Reply
thereto, this Court gave due course to the petition and required the
parties to submit their respective Memoranda, which they
subsequently complied with.
As may be gleaned from the foregoing summation of the
petitioner's arguments in support of his thesis, it is clear that
questions of fact, which boil down to the issue of the credibility of
witnesses, are also raised. It is the rule in this jurisdiction that
appellate courts will not disturb the trial court's findings as to the
credibility of witnesses, the latter court having heard the witnesses

27
Page

It is petitioner's thesis that said Article 21 is not applicable because

he had not committed any moral wrong or injury or violated any
good custom or public policy; he has not professed love or
proposed marriage to the private respondent; and he has never
maltreated her. He criticizes the trial court for liberally invoking
Filipino customs, traditions and culture, and ignoring the fact that
since he is a foreigner, he is not conversant with such Filipino
customs, traditions and culture. As an Iranian Moslem, he is not
familiar with Catholic and Christian ways. He stresses that even if
he had made a promise to marry, the subsequent failure to fulfill
the same is excusable or tolerable because of his Moslem
upbringing; he then alludes to the Muslim Code which purportedly
allows a Muslim to take four (4) wives and concludes that on the
basis thereof, the trial court erred in ruling that he does not posses
good moral character. Moreover, his controversial "common law
life" is now his legal wife as their marriage had been solemnized in
civil ceremonies in the Iranian Embassy. As to his unlawful
cohabitation with the private respondent, petitioner claims that
even if responsibility could be pinned on him for the live-in
relationship, the private respondent should also be faulted for
consenting to an illicit arrangement. Finally, petitioner asseverates
that even if it was to be assumed arguendo that he had professed
his love to the private respondent and had also promised to marry
her, such acts would not be actionable in view of the special
circumstances of the case. The mere breach of promise is not
actionable. 14

and having had the opportunity to observe closely their deportment

and manner of testifying, unless the trial court had plainly
overlooked facts of substance or value which, if considered, might
affect the result of the case. 15
Petitioner has miserably failed to convince Us that both the
appellate and trial courts had overlooked any fact of substance or
values which could alter the result of the case.
Equally settled is the rule that only questions of law may be raised
in a petition for review on certiorari under Rule 45 of the Rules of
Court. It is not the function of this Court to analyze or weigh all over
again the evidence introduced by the parties before the lower
court. There are, however, recognized exceptions to this rule. Thus,
in Medina vs. Asistio, Jr., 16 this Court took the time, again, to
enumerate these exceptions:
xxx xxx xxx
(1) When the conclusion is a finding grounded
entirely on speculation, surmises or conjectures
(Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When
the inference made is manifestly mistaken, absurb or
impossible (Luna v. Linatok, 74 Phil. 15 [1942]); (3)
Where there is a grave abuse of discretion (Buyco v.
People, 95 Phil. 453 [1955]); (4) When the judgment
is based on a misapprehension of facts (Cruz v.
Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact
are conflicting (Casica v. Villaseca, L-9590 Ap. 30,
1957; unrep.) (6) When the Court of Appeals, in
making its findings, went beyond the issues of the
case and the same is contrary to the admissions of
both appellate and appellee (Evangelista v. Alto
Surety and Insurance Co., 103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are contrary
to those of the trial court (Garcia v. Court of Appeals,
33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142
SCRA 593 [1986]); (8) When the findings of fact are

Petitioner has not endeavored to joint out to Us the existence of

any of the above quoted exceptions in this case. Consequently, the
factual findings of the trial and appellate courts must be respected.
And now to the legal issue.
The existing rule is that a breach of promise to marry per se is not
an actionable wrong. 17 Congress deliberately eliminated from the
draft of the New Civil Code the provisions that would have made it
so. The reason therefor is set forth in the report of the Senate
Committees on the Proposed Civil Code, from which We quote:
The elimination of this chapter is proposed. That
breach of promise to marry is not actionable has
been definitely decided in the case of De Jesus vs.
Syquia. 18 The history of breach of promise suits in
the United States and in England has shown that no
other action lends itself more readily to abuse by
designing women and unscrupulous men. It is this
experience which has led to the abolition of rights of
action in the so-called Heart Balm suits in many of
the American states. . . . 19
This notwithstanding, the said Code contains a provision, Article 21,
which is designed to expand the concept of torts or quasi-delict in
this jurisdiction by granting adequate legal remedy for the untold
number of moral wrongs which is impossible for human foresight to
specifically enumerate and punish in the statute books. 20
As the Code Commission itself stated in its Report:

28
Page

conclusions without citation of specific evidence on

which they are based (Ibid.,); (9) When the facts set
forth in the petition as well as in the petitioners main
and reply briefs are not disputed by the respondents
(Ibid.,); and (10) The finding of fact of the Court of
Appeals is premised on the supposed absence of
evidence and is contradicted by the evidence on
record (Salazar v. Gutierrez, 33 SCRA 242 [1970]).

But the Code Commission had gone farther than the

sphere of wrongs defined or determined by positive
law. Fully sensible that there are countless gaps in
the statutes, which leave so many victims of moral
wrongs helpless, even though they have actually
suffered material and moral injury, the Commission
has deemed it necessary, in the interest of justice, to
incorporate in the proposed Civil Code the following
rule:
Art. 23. Any person who wilfully causes
loss or injury to another in a manner
that is contrary to morals, good
customs or public policy shall
compensate the latter for the damage.
An example will illustrate the purview of the
foregoing norm: "A" seduces the nineteen-year old
daughter of "X". A promise of marriage either has not
been made, or can not be proved. The girl becomes
pregnant. Under the present laws, there is no crime,
as the girl is above nineteen years of age. Neither
can any civil action for breach of promise of marriage
be filed. Therefore, though the grievous moral wrong
has been committed, and though the girl and family
have suffered incalculable moral damage, she and
her parents cannot bring action for damages. But
under the proposed article, she and her parents
would have such a right of action.
Thus at one stroke, the legislator, if the forgoing rule
is approved, would vouchsafe adequate legal remedy
for that untold number of moral wrongs which it is
impossible for human foresight to provide for
specifically in the statutes. 21
Article 2176 of the Civil Code, which defines a quasi-delict thus:

is limited to negligent acts or omissions and excludes the

notion of willfulness or intent. Quasi-delict, known in Spanish
legal treatises as culpa aquiliana, is a civil law concept
while torts is an Anglo-American or common law
concept. Torts is much broader than culpa aquiliana because
it includes not only negligence, but international criminal
acts as well such as assault and battery, false imprisonment
and deceit. In the general scheme of the Philippine legal
system envisioned by the Commission responsible for
drafting the New Civil Code, intentional and malicious acts,
with certain exceptions, are to be governed by the Revised
Penal Code while negligent acts or omissions are to be
covered by Article 2176 of the Civil Code. 22 In between
these opposite spectrums are injurious acts which, in the
absence of Article 21, would have been beyond redress.
Thus, Article 21 fills that vacuum. It is even postulated that
together with Articles 19 and 20 of the Civil Code, Article 21
has greatly broadened the scope of the law on civil wrongs;
it has become much more supple and adaptable than the
Anglo-American law on torts. 23
In the light of the above laudable purpose of Article 21, We are of
the opinion, and so hold, that where a man's promise to marry is in
fact the proximate cause of the acceptance of his love by a woman
and his representation to fulfill that promise thereafter becomes the
proximate cause of the giving of herself unto him in a sexual
congress, proof that he had, in reality, no intention of marrying her
and that the promise was only a subtle scheme or deceptive device
to entice or inveigle her to accept him and to obtain her consent to
the sexual act, could justify the award of damages pursuant to
Article 21 not because of such promise to marry but because of the
fraud and deceit behind it and the willful injury to her honor and

29
Page

Whoever by act or omission causes damage to

another, there being fault or negligence, is obliged to
pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed
by the provisions of this Chapter.

reputation which followed thereafter. It is essential, however, that

such injury should have been committed in a manner contrary to
morals, good customs or public policy.
In the instant case, respondent Court found that it was the
petitioner's "fraudulent and deceptive protestations of love for and
promise to marry plaintiff that made her surrender her virtue and
womanhood to him and to live with him on the honest and sincere
belief that he would keep said promise, and it was likewise these
fraud and deception on appellant's part that made plaintiff's
parents agree to their daughter's living-in with him preparatory to
their supposed marriage." 24 In short, the private respondent
surrendered her virginity, the cherished possession of every single
Filipina, not because of lust but because of moral seduction the
kind illustrated by the Code Commission in its example earlier
adverted to. The petitioner could not be held liable for criminal
seduction punished under either Article 337 or Article 338 of the
Revised Penal Code because the private respondent was above
eighteen (18) years of age at the time of the seduction.
Prior decisions of this Court clearly suggest that Article 21 may be
applied in a breach of promise to marry where the woman is a
victim of moral seduction. Thus, in Hermosisima vs. Court of
Appeals, 25 this Court denied recovery of damages to the woman
because:
. . . we find ourselves unable to say that petitioner
is morally guilty of seduction, not only because he is
approximately ten (10) years younger than the
complainant who was around thirty-six (36) years
of age, and as highly enlightened as a former high
school teacher and a life insurance agent are
supposed to be when she became intimate with
petitioner, then a mere apprentice pilot, but, also,
because the court of first instance found that,
complainant "surrendered herself" to petitioner
because, "overwhelmed by her love" for him, she
"wanted to bind" him by having a fruit of their

In Tanjanco vs. Court of Appeals, 26 while this Court likewise hinted

at possible recovery if there had been moral seduction, recovery
was eventually denied because We were not convinced that such
seduction existed. The following enlightening disquisition and
conclusion were made in the said case:
The Court of Appeals seem to have overlooked that
the example set forth in the Code Commission's
memorandum refers to a tort upon a minor who had
been seduced. The essential feature is seduction,
that in law is more than mere sexual intercourse, or a
breach of a promise of marriage; it connotes
essentially the idea of deceit, enticement, superior
power or abuse of confidence on the part of the
seducer to which the woman has yielded (U.S. vs.
Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil.
595).
It has been ruled in the Buenaventura case (supra)
that
To constitute seduction there must in
all cases be some sufficient promise or
inducement and the woman must yield
because of the promise or other
inducement. If she consents merely
from carnal lust and the intercourse is
from mutual desire, there is no
seduction (43 Cent. Dig. tit. Seduction,
par. 56) She must be induced to depart
from the path of virtue by the use of
some species of arts, persuasions and
wiles, which are calculated to have and
do have that effect, and which result in
her person to ultimately submitting her

30
Page

engagement even before they had the benefit of

clergy.

person to the sexual embraces of her

seducer (27 Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the
woman, the enticement, persuasion or
deception is the essence of the injury;
and a mere proof of intercourse is
insufficient to warrant a recovery.
Accordingly it is not seduction where
the willingness arises out of sexual
desire of curiosity of the female, and
the defendant merely affords her the
needed opportunity for the
commission of the act. It has been
emphasized that to allow a recovery in
all such cases would tend to the
demoralization of the female sex, and
would be a reward for unchastity by
which a class of adventuresses would
be swift to profit. (47 Am. Jur. 662)
xxx xxx xxx
Over and above the partisan allegations, the fact
stand out that for one whole year, from 1958 to
1959, the plaintiff-appellee, a woman of adult age,
maintain intimate sexual relations with appellant,
with repeated acts of intercourse. Such conduct is
incompatible with the idea of seduction. Plainly there
is here voluntariness and mutual passion; for had the
appellant been deceived, had she surrendered
exclusively because of the deceit, artful persuasions
and wiles of the defendant, she would not have again
yielded to his embraces, much less for one year,
without exacting early fulfillment of the alleged
promises of marriage, and would have cut short all

In his annotations on the Civil Code, 28 Associate Justice Edgardo L.

Paras, who recently retired from this Court, opined that in a breach
of promise to marry where there had been carnal knowledge, moral
damages may be recovered:
. . . if there be criminal or moral seduction, but not if
the intercourse was due to mutual lust. (Hermosisima
vs. Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L14733, Sept. 30, 1960; Batarra vs. Marcos, 7 Phil. 56
(sic); Beatriz Galang vs. Court of Appeals, et al., L17248, Jan. 29, 1962). (In other words, if the CAUSE
be the promise to marry, and the EFFECT be the
carnal knowledge, there is a chance that there
was criminal or moral seduction, hence recovery of
moral damages will prosper. If it be the other way
around, there can be no recovery of moral damages,
because here mutual lust has intervened). . . .
together with "ACTUAL damages, should there be any, such
as the expenses for the wedding presentations (See
Domalagon v. Bolifer, 33 Phil. 471).
Senator Arturo M. Tolentino

29

is also of the same persuasion:

It is submitted that the rule in Batarra

vs. Marcos, 30 still subsists, notwithstanding the
incorporation of the present article 31 in the Code.
The example given by the Code Commission is
correct, if there was seduction, not necessarily in the
legal sense, but in the vulgar sense of deception. But

31
Page

sexual relations upon finding that defendant did not

intend to fulfill his defendant did not intend to fulfill
his promise. Hence, we conclude that no case is
made under article 21 of the Civil Code, and no other
cause of action being alleged, no error was
committed by the Court of First Instance in
dismissing the complaint. 27

when the sexual act is accomplished without any

deceit or qualifying circumstance of abuse of
authority or influence, but the woman, already of
age, has knowingly given herself to a man, it cannot
be said that there is an injury which can be the basis
for indemnity.
But so long as there is fraud, which is characterized
by willfulness (sic), the action lies. The court,
however, must weigh the degree of fraud, if it is
sufficient to deceive the woman under the
circumstances, because an act which would deceive
a girl sixteen years of age may not constitute deceit
as to an experienced woman thirty years of age. But
so long as there is a wrongful act and a resulting
injury, there should be civil liability, even if the act is
not punishable under the criminal law and there
should have been an acquittal or dismissal of the
criminal case for that reason.
We are unable to agree with the petitioner's alternative proposition
to the effect that granting, for argument's sake, that he did promise
to marry the private respondent, the latter is nevertheless also at
fault. According to him, both parties are in pari delicto; hence,
pursuant to Article 1412(1) of the Civil Code and the doctrine laid
down in Batarra vs. Marcos, 32 the private respondent cannot
recover damages from the petitioner. The latter even goes as far as
stating that if the private respondent had "sustained any injury or
damage in their relationship, it is primarily because of her own
doing, 33 for:
. . . She is also interested in the petitioner as the
latter will become a doctor sooner or later. Take
notice that she is a plain high school graduate and a
mere employee . . . (Annex "C") or a waitress (TSN, p.
51, January 25, 1988) in a luncheonette and without
doubt, is in need of a man who can give her
economic security. Her family is in dire need of
financial assistance. (TSN, pp. 51-53, May 18, 1988).

These statements reveal the true character and motive of the

petitioner. It is clear that he harbors a condescending, if not
sarcastic, regard for the private respondent on account of the
latter's ignoble birth, inferior educational background, poverty and,
as perceived by him, dishonorable employment. Obviously then,
from the very beginning, he was not at all moved by good faith and
an honest motive. Marrying with a woman so circumstances could
not have even remotely occurred to him. Thus, his profession of
love and promise to marry were empty words directly intended to
fool, dupe, entice, beguile and deceive the poor woman into
believing that indeed, he loved her and would want her to be his
life's partner. His was nothing but pure lust which he wanted
satisfied by a Filipina who honestly believed that by accepting his
proffer of love and proposal of marriage, she would be able to enjoy
a life of ease and security. Petitioner clearly violated the Filipino's
concept of morality and brazenly defied the traditional respect
Filipinos have for their women. It can even be said that the
petitioner committed such deplorable acts in blatant disregard of
Article 19 of the Civil Code which directs every person to act with
justice, give everyone his due and observe honesty and good faith
in the exercise of his rights and in the performance of his
obligations.
No foreigner must be allowed to make a mockery of our laws,
customs and traditions.
The pari delicto rule does not apply in this case for while indeed,
the private respondent may not have been impelled by the purest
of intentions, she eventually submitted to the petitioner in sexual
congress not out of lust, but because of moral seduction. In fact, it
is apparent that she had qualms of conscience about the entire
episode for as soon as she found out that the petitioner was not
going to marry her after all, she left him. She is not, therefore,
in pari delicto with the petitioner. Pari delicto means "in equal fault;

32

in a similar offense or crime; equal in guilt or in legal fault."

most, it could be conceded that she is merely in delicto.

Page

And this predicament prompted her to accept a

proposition that may have been offered by the
petitioner. 34

35

At

Equity often interferes for the relief of the less guilty

of the parties, where his transgression has been
brought about by the imposition of undue influence
of the party on whom the burden of the original
wrong principally rests, or where his consent to the
transaction was itself procured by
fraud. 36
In Mangayao vs. Lasud,

37

We declared:

Appellants likewise stress that both parties being at

fault, there should be no action by one against the
other (Art. 1412, New Civil Code). This rule, however,
has been interpreted as applicable only where the
fault on both sides is, more or less, equivalent. It
does not apply where one party is literate or
intelligent and the other one is not. (c.f. Bough vs.
Cantiveros, 40 Phil. 209).
We should stress, however, that while We find for the private
respondent, let it not be said that this Court condones the
deplorable behavior of her parents in letting her and the petitioner
stay together in the same room in their house after giving approval
to their marriage. It is the solemn duty of parents to protect the
honor of their daughters and infuse upon them the higher values of
morality and dignity.
WHEREFORE, finding no reversible error in the challenged decision,
the instant petition is hereby DENIED, with costs against the
petitioner.
SO ORDERED.

33
Page

THIRD DIVISION
[G.R. No. 142943. April 3, 2002]
Spouses ANTONIO and LORNA QUISUMBING, petitioners, vs.
MANILA ELECTRIC COMPANY (MERALCO), respondent.
DECISION
PANGANIBAN, J.:
Under the law, the Manila Electric Company (Meralco)
may immediately disconnect electric service on the ground of
alleged meter tampering, but only if the discovery of the cause is
personally witnessed and attested to by an officer of the law or by
a duly authorized representative of the Energy Regulatory Board.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of
Court, assailing the February 1, 2000 Decision [1] and the April 10,
2000 Resolution[2] of the Court of Appeals (CA) in CA-GR SP No.
49022. The decretal portion of the said Decision reads as follows:
WHEREFORE, the challenged decision in Civil Case No. Q-95-23219
is hereby SET ASIDE and the complaint against defendantappellant MERALCO is hereby DISMISSED. Plaintiffs-appellees are
hereby ORDERED to pay defendant-appellant MERALCO the
differential billing of P193,332.00 representing the value of used
but unregistered electrical consumption.[3]
The assailed
Reconsideration.

Resolution

denied

petitioners

Motion

for

The Facts
The facts of the case are summarized by the Court of Appeals
in this wise:

Defendant-appellant Manila Electric Company (MERALCO) is a

private corporation, authorized by law to charge all persons,
including the government, for the consumption of electric power at
rates duly authorized and approved by the Board of Energy (now
the Energy Regulatory Board).
Plaintiffs-appellees Spouses Antonio and Lorna Quisumbing are
owners of a house and lot located at No. 94 Greenmeadows
Avenue, Quezon City, which they bought on April 7, 1994 from Ms.
Carmina Serapio Santos. They alleged to be business entrepreneurs
engaged in the export of furnitures under the business name Loran
Industries and recipient of the 1993 Agora Award and 1994 Golden
Shell Award.Mrs. Quisumbing is a member of the Innerwheel Club
while Mr. Quisumbing is a member of the Rotary Club, Chairman of
Cebu Chamber of Commerce, and Director of Chamber of Furniture.
On March 3, 1995 at around 9:00 a.m., defendant-appellants
inspectors headed by Emmanuel C. Orlino were assigned to
conduct a routine-on-the-spot inspection of all single phase meters
at Greenmeadows Avenue. House no. 94 of Block 8, Lot 19
Greenmeadows Avenue owned by plaintiffs-appellees was
inspected after observing a standard operating procedure of asking
permission from plaintiffs-appellees, through their secretary which
was granted. The secretary witnessed the inspection. After the
inspection, defendant-appellants inspectors discovered that the
terminal seal of the meter was missing; the meter cover seal was
deformed; the meter dials of the meter was mis-aligned and there
were scratches on the meter base plate. Defendant-appellants
inspectors relayed the matter to plaintiffs-appellees secretary, who
in turn relayed the same to plaintiff-appellee, Lorna Quisumbing,
who was outraged of the result of the inspection and denied liability
as to the tampering of the meter. Plaintiffs-appellees were advised
by defendant-appellants inspectors that they had to detach the
meter and bring it to their laboratory for verification/confirmation of
their findings. In the event the meter turned out to be tampered,
defendant-appellant had to temporarily disconnect the electric
services of plaintiffs-appellees. The laboratory testing conducted on
the meter has the following findings to wit:

3. The 1000th, 100th and 10th dial pointers of the

register were found out of alignment and with
circular scratches at the face of the register which
indicates that the meter had been opened to
manipulate the said dial pointers and set manually
to the desired reading. In addition to this, the
meter terminal blades were found full of scratches.
After an hour, defendant-appellants head inspector, E. Orlina
returned to the residence of plaintiffs-appellees and informed them
that the meter had been tampered and unless they pay the amount
of P178,875.01 representing the differential billing, their electric
supply would be disconnected. Orlina informed plaintiffs-appellees
that they were just following their standard operating
procedure. Plaintiffs-appellees were further advised that questions
relative to the results of the inspection as well as the disconnection
of her electrical services for Violation of Contract (VOC) may be
settled with Mr. M. Manuson of the Special Accounts, Legal Service
Department. However, on the same day at around 2:00 oclock in
the afternoon defendant-appellants officer through a two-way radio
instructed its service inspector headed by Mr. Orlino to reconnect
plaintiffs-appellees electric service which the latter faithfully
complied.
On March 6, 1995, plaintiffs-appellees filed a complaint for
damages with prayer for the issuance of a writ of preliminary
mandatory injunction, despite the immediate reconnection, to order
defendant-appellant to furnish electricity to the plaintiffs-appellees
alleging that defendant-appellant acted with wanton, capricious,
malicious and malevolent manner in disconnecting their power
supply which was done without due process, and without due
regard for their rights, feelings, peace of mind, social and business
reputation.

34

2. Lead cover seals (90 ERB 1-Meralco 21) were

tampered by forcibly pulling out from the sealing
wire.

Page

1. Terminal seal was missing.

In its Answer, defendant-appellant admitted disconnecting the

electric service at the plaintiffs-appellees house but denied liability
citing the Terms and Conditions of Service, and Republic Act No.
7832 otherwise known as Anti-Electricity and Electric Transmission
Lines/Materials Pilferage Act of 1994.
After trial on the merits, the lower court rendered judgment, ruling
in favor of plaintiffs-appellees.[4] (Citations omitted)
Ruling of the Trial Court
The trial court held that Meralco (herein respondent) should
have given the Quisumbing spouses (herein petitioners) ample
opportunity to dispute the alleged meter tampering.
It held that respondent had acted summarily and without
procedural due process in immediately disconnecting the electric
service of petitioners. Respondents action, ruled the RTC,
constituted a quasi delict.
Ruling of the Court of Appeals
The Court of Appeals overturned the trial courts ruling and
dismissed the Complaint. It held that respondents representatives
had acted in good faith when they disconnected petitioners electric
service. Citing testimonial and documentary evidence, it ruled that
the disconnection was made only after observing due
process. Further, it noted that petitioners had not been able to
prove their claim for damages. The appellate court likewise upheld
respondents counterclaim for the billing differential in the amount
of P193,332[5] representing the value of petitioners used but
unregistered electrical consumption, which had been established
without being controverted.
Hence, this Petition.[6]
The Issues

4.1 Whether a prima facie presumption of tampering of electrical

meter enumerated under Sec. 4 (a) iv of RA 7832 (Anti-Electricity
and Electric Transmission Lines/Materials Pilferage Act of 1994) may
be had despite the absence of an ERB representative or an officer
of the law?
4.2 Whether the enumeration of instances to establish a prima
facie presumption of tampering of electrical meter enumerated
under Sec. 4 (a) iv of RA 7832 (Anti-Electricity and Electric
Transmission Lines/Materials Pilferage Act of 1994) is exclusive?
4.3 What constitutes notice prior to disconnection of electricity
service? Corollarily, whether the definition of notice under Meralco
v. Court of Appeals (157 SCRA 243) applies to the case at bar?
4.4 Whether a prima facie presumption may contradict logic?
4.5 Whether documentary proof is pre-requisite for award of
damages?[8]

35
Page

In their Memorandum,[7] petitioners submit the following issues

for our consideration:

Petitioners contend that the immediate disconnection of

electrical service was not validly effected because of respondents
noncompliance with the relevant provisions of RA 7832, the AntiElectricity and Electric Transmission Lines/Materials Pilferage Act of
1994. They insist that the immediate disconnection of electrical
supply may only be validly effected only when there is prima facie
evidence of its illegal use. To constitute prima facie evidence, the
discovery of the illegal use must be personally witnessed and
attested to by an officer of the law or a duly authorized
representative of the Energy Regulatory Board (ERB).
Respondent, on the other hand, points out that the issue raised
by petitioners is a question of fact which this Court cannot pass
upon. It argues further that this issue, which was not raised in the
court below, can no longer be taken up for the first time on
appeal. Assuming arguendo that the issue was raised below, it also
contends that petitioners were not able to specifically prove the
absence of an officer of the law or a duly authorized representative
of the ERB when the discovery was made.
Prima facie Evidence of Illegal Use of Electricity
We agree with petitioners. Section 4 of RA 7832 states:

In sum, this Petition raises three (3) main issues which this
Court will address: (1) whether respondent observed the requisites
of law when it disconnected the electrical supply of petitioners, (2)
whether such disconnection entitled petitioners to damages, and
(3) whether petitioners are liable for the billing differential
computed by respondent.

(a) The presence of any of the following circumstances

shall constitute prima facie evidence of illegal use of
electricity, as defined in this Act, by the person
benefited thereby, and shall be the basis for: (1) the
immediate disconnection by the electric utility to such
person after due notice, x x x

The Courts Ruling

xxxxxxxxx
The Petition is partly meritorious.
First Issue:
Compliance with Requisites of Law

(viii) x x x Provided, however, That the discovery of any of the

foregoing circumstances, in order to constitute prima
facie evidence, must be personally witnessed and attested to by an
officer of the law or a duly authorized representative of the Energy
Regulatory Board (ERB).[9] (Italics supplied)

As a rule, this Court reviews only questions of law, not of

facts. However, it may pass upon the evidence when the factual
findings of the trial court are different from those of the Court of
Appeals, as in this case.[10]
A careful review of the evidence on record negates the
appellate courts holding that the actions of defendant-appellants
service inspectors were all in accord with the requirement of the
law.[11]
Respondents own witnesses provided the evidence on who
were actually present when the inspection was made. Emmanuel C.
Orlino, the head of the Meralco team, testified:
Q When you were conducting this inspection, and you
discovered these findings you testified earlier, who
was present?
A The secretary, sir.[12]
ATTY. REYES - Who else were the members of your team
that conducted this inspection at Greenmeadows
Avenue on that day, March 3, 1995?
A The composition of the team, sir?
Q Yes.
A Including me, we are about four (4) inspectors, sir.
Q You were four (4)?
A Yes, sir.

36
Page

Under the above provision, the prima facie presumption that

will authorize immediate disconnection will arise only upon the
satisfaction of certain requisites. One of these requisites is the
personal witnessing and attestation by an officer of the law or by
an authorized ERB representative when the discovery was made.

Q Who is the head of this team?

A I was the head of the team, sir.[13]
Further, Catalino A. Macaraig, the area head of the Orlino team,
stated that only Meralco personnel had been present during the
inspection:
Q By the way you were not there at Green Meadows on
that day, right?
A Yes, sir.
Q Only Mr. Orlino and who else were there?
A Two or three of his men.
Q All members of the inspection team?
A Yes, sir.[14]
These testimonies clearly show that at the time the alleged
meter tampering was discovered, only the Meralco inspection team
and petitioners secretary were present. Plainly, there was no officer
of the law or ERB representative at that time. Because of the
absence of government representatives, the prima facie authority
to disconnect, granted to Meralco by RA 7832, cannot apply.
Neither can respondent find solace in the fact that petitioners
secretary was present at the time the inspection was made. The
law clearly states that for the prima facie evidence to apply, the
discovery must be personally witnessed and attested to by an
officer of the law or a duly authorized representative of the Energy
Regulatory Board (ERB).[15] Had the law intended the presence of
the owner or his/her representative to suffice, then it should have
said so. Embedded in our jurisprudence is the rule that courts may
not construe a statute that is free from doubt. [16] Where the law is
clear and unambiguous, it must be taken to mean exactly what it

In fact, during the Senate deliberations on RA 7832, Senator

John H. Osmea, its author, stressed the need for the presence of
government officers during inspections of electric meters.He said:
Mr. President, if a utility like MERALCO finds certain circumstances
or situations which are listed in Section 2 of this bill to be prima
facie evidence, I think they should be prudent enough to bring in
competent authority, either the police or the NBI, to verify or
substantiate their finding. If they were to summarily proceed to
disconnect on the basis of their findings and later on there would
be a court case and the customer or the user would deny the
existence of what is listed in Section 2, then they could be in a lot
of trouble.[18] (Italics supplied)
Neither can we accept respondents argument that when the
alleged tampered meter was brought to Meralcos laboratory for
testing, there was already an ERB representative present.
The law says that before immediate disconnection may be
allowed, the discovery of the illegal use of electricity must have
been personally witnessed and attested to by an officer of the law
or by an authorized ERB representative. In this case, the
disconnection was effected immediately after the discovery of the
alleged meter tampering, which was witnessed only by Meralcos
employees. That the ERB representative was allegedly present
when the meter was examined in the Meralco laboratory will not
cure the defect.
It is undisputed that after members of the Meralco team
conducted their inspection and found alleged meter tampering,
they immediately disconnected petitioners electrical supply.Again,
this verity is culled from the testimony of Meralcos Orlina:
A When she went inside then she came out together with
Mrs. Lourdes Quis[u]mbing at that time. We did tell our

37
Page

says, and courts have no choice but to see to it that the mandate is
obeyed.[17]

findings regarding the meter and the consequence

with it. And she was very angry with me.
Q When you say consequence of your findings, what
exactly did you tell Mrs. Quisumbing?
A We told her that the service will be temporarily
disconnected and that we are referring to our Legal
Department so could know the violation, sir.[19]
A Yes, sir. At that time, I referred her to Mr. Macaraig, sir.
Q What is the first name of this supervisor?
A Mr. Catalino Macara[i]g, sir.
Q Then after talking to Mr. Catalino Macara[i]g, this is over
the telephone, what happened?
A The supervisor advised her that the service will be
temporarily disconnected and she has to go to our
Legal Department where she could settle the VOC, sir.
Q You are talking of VOC, what is this all about Mr. Orlino?
A VOC is violation of contract, sir.[20]
As to respondents argument that the presence of an authorized
ERB representative had not been raised below, it is clear, however,
that the issue of due process was brought up by petitioners as a
valid issue in the CA. The presence of government agents who may
authorize immediate disconnections go into the essence of due
process. Indeed, we cannot allow respondent to act virtually as
prosecutor and judge in imposing the penalty of disconnection due
to alleged meter tampering. That would not sit well in a democratic
country. After all, Meralco is a monopoly that derives its power from
the government. Clothing it with unilateral authority to disconnect
would be equivalent to giving it a license to tyrannize its hapless
customers.

Contractual Right to Disconnect

Electrical Service
Neither may respondent rely on its alleged contractual right to
disconnect electrical service based on Exhibits 10 [22] and 11,[23] or
on Decisions of the Board of Energy (now the Energy Regulatory
Board). The relevant portion of these documents concerns
discontinuance of service. It provides:

38
Page

Besides, even if not specifically raised, this Court has already

ruled that [w]here the issues already raised also rest on other
issues not specifically presented, as long as the latter issues bear
relevance and close relation to the former and as long as they arise
from matters on record, the Court has the authority to include them
in its discussion of the controversy as well as to pass upon them. [21]

justified. In the instant case, these requisites were obviously not

complied with.
Second Issue
Damages
Having ruled that the immediate disconnection effected by
Meralco lacks legal, factual or contractual basis, we will now pass
upon on the right of petitioners to recover damages for the
improper disconnection.
Petitioners are asking for the reinstatement of the RTC
Decision, which awarded them actual, moral and exemplary
damages as well as attorneys fees. All these were overturned by
the CA.

The Company reserves the right to discontinue service in case the

Customer is in arrears in the payment of bills or for failure to pay
the adjusted bills in those cases where the meter stopped or failed
to register the correct amount of energy consumed, or for failure to
comply with any of these terms and conditions, or in case of or to
prevent fraud upon the Company. Before disconnection is made in
case of or to prevent fraud, the Company may adjust the bill of said
Customer accordingly and if the adjusted bill is not paid, the
Company may disconnect the same. In case of disconnection, the
provisions of Revised Order No. 1 of the former Public Service
Commission (now the Board of Energy) shall be observed. Any such
suspension of service shall not terminate the contract between the
Company and the Customer.[24]

As to actual damages, we agree with the CA that competent

proof is necessary before our award may be made. The appellate
court ruled as follows:

Petitioners situation can fall under disconnection only in case of

or to prevent fraud upon the Company. However, this too has
requisites before a disconnection may be made. An adjusted bill
shall be prepared, and only upon failure to pay it may the company
discontinue service. This is also true in regard to the provisions of
Revised Order No. 1 of the former Public Service Commission, which
requires a 48-hour written notice before a disconnection may be

Actual damages are compensation for an injury that will put the
injured party in the position where it was before it was injured.
[26]
They pertain to such injuries or losses that are actually
sustained and susceptible of measurement. [27] Except as provided
by law or by stipulation, a party is entitled to an adequate
compensation only for such pecuniary loss as it has duly proven.[28]

Considering further, it is a settled rule that in order for damages to

be recovered, the best evidence obtainable by the injured party
must be presented. Actual and compensatory damages cannot be
presumed but must be duly proved and proved with reasonable
degree and certainty. A court cannot rely on speculation, conjecture
or guess work as to the fact and amount of damages, but must
depend upon competent proof that they have been suffered and on
evidence of actual amount thereof. If the proof is flimsy and
unsubstantial, no damages will be awarded.[25]

Petitioners claim for actual damages was premised only upon

Lorna Quisumbings bare testimony as follows:

39
Page

Basic is the rule that to recover actual damages, not only must
the amount of loss be capable of proof; it must also be actually
proven with a reasonable degree of certainty, premised upon
competent proof or the best evidence obtainable.[29]

A We brought them in a restaurant in Makati at Seasons

Restaurant. But it was very embar[r]assing for us
because we faxed them ahead of time before they
came to Manila.
Q Now as a result of this change of your schedule because
of the disconnection of the electric power on that day,
Friday, what damage did you suffer?

A Actually that da[y] I was really scheduled to go to that

furniture exhibit. That furniture exhibit is only once a
year.

A I cancelled the catering service and that is so much of a

h[a]ssle it was so embarras[s]ing for us.

Q What is this furniture exhibit?

Q Can you tell us how much amount?

A The SITEM, that is a government agency that takes care

of exporters and exclusive marketing of our products
around the world. We always have that once a year
and thats the time when all our buyers are here for us
to show what we had that was exhibited to go
around. So, my husband had to [fly] from Cebu to
Manila just for this occasion. So we have an
appointment with our people and our buyers with
SITEM and also that evening we will have to treat them
[to] dinner.

A Approximately P50,000.00.[30]

Q Whereat?
A At our residence, we were supposed to have a dinner at
our residence.
Q What happened to this occasion?
A So when they disconnected our electric power we had to
get in touch with them and change the venue.
Q Which venue did you transfer your dinner for your
buyers?

No other evidence has been proffered to substantiate her bare

statements. She has not shown how she arrived at the amount
of P50,000; it is, at best, speculative. Her self-serving testimonial
evidence, if it may be called such, is insufficient to support alleged
actual damages.
While respondent does not rebut this testimony on the
expenses incurred by the spouses in moving the dinner out of their
residence due to the disconnection, no receipts covering such
expenditures have been adduced in evidence. Neither is the
testimony corroborated. To reiterate, actual or compensatory
damages cannot be presumed, but must be duly proved with a
reasonable degree of certainty. It is dependent upon competent
proof of damages that petitioners have suffered and of the actual
amount thereof.[31] The award must be based on the evidence
presented, not on the personal knowledge of the court; and
certainly not on flimsy, remote, speculative and unsubstantial
proof.[32] Consequently, we uphold the CA ruling denying the grant
of actual damages.
Having said that, we agree with the trial court, however, that
petitioners are entitled to moral damages, albeit in a reduced
amount.

Article 2219 of the Civil Code lists the instances when moral
damages may be recovered. One such case[34] is when the rights of
individuals, including the right against deprivation of property
without due process of law, are violated.[35]
Moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury. [36]Although
incapable of pecuniary computation, such damages may be
recovered if they are the proximate results of the defendants
wrongful act or omission.[37]
Case law establishes the following requisites for the award of
moral damages: (1) there is an injury -- whether physical, mental or
psychological -- clearly sustained by the claimant; (2) there is a

40

This Court agrees with the defendant regarding [its] right by law
and equity to protect itself from any fraud. However, such right
should not be exercised arbitrarily but with great caution and with
due regard to the rights of the consumers. Meralco having a virtual
monopoly of the supply of electric power should refrain from taking
drastic actions against the consumers without observing due
process. Even assuming that the subject meter has had history of
meter tampering, defendant cannot simply assume that the
present occupants are the ones responsible for such
tampering. Neither does it serve as a license to deprive the
plaintiffs of their right to due process. Defendant should have given
the plaintiffs simple opportunity to dispute the electric charges
brought about by the alleged meter-tampering, which were not
included in the bill rendered them. Procedural due process requires
reasonable notice to pay the bill and reasonable notice to
discontinue supply. Absent due process the defendant may be held
liable for damages. While this Court is aware of the practice of
unscrupulous individuals of stealing electric curre[n]t which causes
thousands if not millions of pesos in lost revenue to electric
companies, this does not give the defendant the right to trample
upon the rights of the consumers by denying them due process.[33]

Page

The RTC opined as follows:

culpable act or omission factually established; (3) the wrongful act

or omission of the defendant is the proximate cause of the injury
sustained by the claimant; and (4) the award of damages is
predicated on any of the cases stated in Article 2219 of the Civil
Code.[38]
To reiterate, respondent had no legal right to immediately
disconnect petitioners electrical supply without observing the
requisites of law which, in turn, are akin to due process. Had
respondent been more circumspect and prudent, petitioners could
have been given the opportunity to controvert the initial finding of
alleged meter tampering. Said the RTC:
More seriously, the action of the defendant in maliciously
disconnecting the electric service constitutes a breach of public
policy. For public utilities, broad as their powers are, have a clear
duty to see to it that they do not violate nor transgress the rights of
the consumers. Any act on their part that militates against the
ordinary norms of justice and fair play is considered an infraction
that gives rise to an action for damages. Such is the case at bar.[39]
Indeed, the Supreme Court has ruled in Meralco v. CA[40] that
respondent is required to give notice of disconnection to an alleged
delinquent customer. The Court said:
x x x One can not deny the vital role which a public utility such as
MERALCO, having a monopoly of the supply of electrical power in
Metro Manila and some nearby municipalities, plays in the life of
people living in such areas. Electricity has become a necessity to
most people in these areas, justifying the exercise by the State of
its regulatory power over the business of supplying electrical
service to the public, in which petitioner MERALCO is
engaged. Thus, the state may regulate, as it has done through
Section 97 of the Revised Order No. 1 of the Public Service
Commission, the conditions under which and the manner by which
a public utility such as MERALCO may effect a disconnection of
service to a delinquent customer. Among others, a prior written
notice to the customer is required before disconnection of the
service. Failure to give such prior notice amounts to a tort.[41]

However, the amount of moral damages, which is left largely to

the sound discretion of the courts, should be granted in reasonable
amounts, considering the attendant facts and circumstances.
[43]
Moral damages, though incapable of pecuniary estimation, are
designed to compensate the claimant for actual injury suffered and
not to impose a penalty.[44] Moral damages are not intended to
enrich a plaintiff at the expense of the defendant. [45] They are
awarded only to obtain a means, a diversion or an amusement that
will serve to alleviate the moral suffering the injured party has
undergone by reason of the defendants culpable action. [46] They
must be proportionate to the suffering inflicted.[47]
It is clear from the records that respondent was able to restore
the electrical supply of petitioners on the same day. Verily, the
inconvenience and anxiety they suffered as a result of the
disconnection was thereafter corrected. Thus, we reduce the RTCs
grant of moral damages to the more equitable amount of P100,000.
Exemplary damages, on the other hand, are imposed by way of
example or correction for the public good in addition to moral,
temperate, liquidated or compensatory damages.[48] It is not given
to enrich one party and impoverish another, but to serve as a
deterrent against or as a negative incentive to socially deleterious
actions.[49] In this case, to serve an example -- that before a
disconnection of electrical supply can be effected by a public utility
like Meralco, the requisites of law must be faithfully complied with
-- we award the amount of P50,000 to petitioners.
Finally, with the award of exemplary damages, the award of
attorneys fees is likewise granted. [50] It is readily apparent that
petitioners needed the services of a lawyer to argue their cause,

41
Page

Observance of the rights of our people is sacred in our

society. We cannot allow such rights to be trifled with or
trivialized. Although the Court sympathizes with respondents efforts
to stamp out the illegal use of electricity, such action must be done
only with strict observance of the rights of our people. As has been
we succinctly said: there is a right way to do the right thing at the
right time for the right reason.[42]

even to the extent of elevating the matter to this Court; [51] thus, an
award of P50,000 is considered sufficient.
Final Issue:
Billing Differential
Finally, this Court holds that despite the basis for the award of
damages -- the lack of due process in immediately disconnecting
petitioners electrical supply -- respondents counterclaim for the
billing differential is still proper. We agree with the CA that
respondent should be given what it rightfully deserves. The
evidence it presented, both documentary and testimonial,
sufficiently proved the amount of the differential.
Not only did respondent show how the meter examination had
been conducted by its experts, but it also established the amount
of P193,332.96 that petitioners owed respondent. The procedure
through which this amount was arrived at was testified to by
Meralcos Senior Billing Computer Enrique Katipunan. His testimony
was corroborated by documentary evidence showing the accounts
billing history and the corresponding computations. Neither do we
doubt the documents of inspections and examinations presented by
respondent to prove that, indeed there had been meter tampering
that resulted in unrecorded and unpaid electrical consumption.
The mere presentation by petitioners of a Contract to Sell with
Assumption of Mortgage[52] does not necessarily mean that they are
no longer liable for the billing differential. There was no sufficient
evidence to show that they had not been actually residing in the
house before the date of the said document. Lorna Quisumbing
herself admitted[53] that they did not have any contract for electrical
service in their own name. Hence, petitioners effectively assumed
the bills of the former occupants of the premises.
Finally, the CA was correct in ruling that the convincing
documentary and testimonial evidence presented by respondent,
was not controverted by petitioners.

SO ORDERED.

42
Page

WHEREFORE, the Petition is hereby PARTLY GRANTED. The

assailed
CA
Decision
is MODIFIED as
follows: petitioners
are ORDERED to
pay
respondent
the
billing
differential
of P193,332.96;
while
respondent
is
ordered
to
pay
petitioners P100,000 as moral damages, P50,000 as exemplary
damages, and P50,000 as attorneys fees. No pronouncement as to
costs.

[G.R. No. 129132. July 8, 1998]

ISABELITA VITAL-GOZON, petitioner, vs. HONORABLE COURT
OF
APPEALS
and
ALEJANDRO
DE
LA
FUENTE, respondents.
DECISION
DAVIDE, JR., J.:*
This is a sequel to our decision[1] of 5 August 1992 in G.R. No.
101428, entitled Isabelita Vital-Gozon v. The Honorable Court of
Appeals, et al., which held that the Court of Appeals had
jurisdiction, in a special civil action for mandamus against a public
officer (docketed therein as CA-G.R. SP No. 16438 and entitled Dr.
Alejandro S. de la Fuente v. Dr. Isabelita Vital-Gozon, et al.), to take
cognizance of the claim for damages against respondent public
officer.
Specifically, the instant petition seeks to reverse the Resolution
of 7 May 1997[2] of respondent Court of Appeals in CA-G.R. SP No.
16438 awarding to petitioner below, now private respondent, moral
and exemplary damages and attorneys fees after hearing the
evidence thereon sometime after this Courts decision in G.R. No.
101428 became final.
The factual antecedents then, as found by us in G.R. No.
101428, must be restated, thus:
In the early months of 1987 -- and pursuant to Executive
Order No. 119 issued on January 30, 1987 by President
Corazon C. Aquino -- reorganization of the various offices
of the Ministry of Health commenced; existing offices were
abolished, transfers of personnel effected.

43
Page

FIRST DIVISION

At the time of the reorganization, Dr. Alejandro S. de la

Fuente was the Chief of Clinics of the National Children's
Hospital, having been appointed to that position on
December 20, 1978. Prior thereto, he occupied the post of
Medical Specialist II, a position to which he was promoted
in 1977 after serving as Medical Specialist I of the same
hospital for six (6) years (since 1971).
On February 4, 1988 Dr. de la Fuente received notice from
the Department of Health that he would be re-appointed
Medical Specialist II. Considering this to be a demotion by
no less than two ranks from his post as Chief of Clinics, Dr.
de la Fuente filed a protest with the DOH Reorganization
Board. When his protest was ignored, he brought his case
to the Civil Service Commission where it was docketed as
CSC Case No. 4. In the meantime the duties and
responsibilities pertaining to the position of Chief of Clinics
were turned over to and were allowed to be exercised by
Dr. Jose D. Merencilla, Jr.
Dr. de la Fuentes case was decided by the Civil Service
Commission in a Resolution dated August 9, 1988. In that
Resolution, the Commission made the following conclusion
and disposition, to wit:
xxx (The Commission) declares the
demotion/transfer of appellant dela Fuente, Jr.
from Chief of Clinics to Medical Specialist II as null
and void: hence, illegal. Considering further that
since the National Children's Hospital was not
abolished and the positions therein remained
intact although the title or the position of Chief of
Clinics was changed to 'Chief of Medical
Professional Staff' with substantially the same
functions and responsibilities, the Commission
hereby orders that:

2. He be paid back salaries, transportation,

representation and housing allowances and
such other benefits withheld from him from
the date of his illegal demotion/transfer.
No motion for reconsideration of this Resolution was ever
submitted nor appeal therefrom essayed to the Supreme
Court, within the thirty-day period prescribed therefor by
the Constitution. Consequently, the resolution became
final, on September 21, 1988.
De la Fuente thereupon sent two (2) letters to Dr. VitalGozon, the Medical Center Chief of the National Childrens
Hospital, demanding implementation of the Commission's
decision. Dr. Vital-Gozon referred de la Fuentes claims to
the Department of Health Assistant Secretary for Legal
Affairs for appropriate advice and/or action xxx (She did
this allegedly because, according to the Solicitor General,
she was) unaware when and how a CSC Resolution
becomes final and executory, whether such Resolution
had in fact become final and executory and whether the
DOH Legal Department would officially assail the
mentioned Resolution. But she did not answer Dr. de la
Fuentes letters, not even to inform him of the referral
thereof to the Assistant Secretary. She chose simply to
await legal guidance from the DOH Legal Department. On
the other hand, no one in the DOH Legal Department
bothered to reply to Dr. de la Fuente, or to take steps to
comply or otherwise advise compliance, with the final and
executory Resolution of the Civil Service Commission. In
fact, de la Fuente claims that Vital-Gozon had actually
threatened to stop paying xxx (his) salary and allowances

44
Page

1. Appellant dela Fuente, Jr. be retained or considered

as never having relinquished his position of
Chief of Clinics (now Chief of Medical
Professional Staff) without loss of seniority
rights; and

on the pretext that he has as yet no 'approved'

appointment even as Medical Specialist II x x x.
Three months having elapsed without any word from VitalGozon or anyone in her behalf, or any indication whatever
that the CSC Resolution of August 9, 1988 would be
obeyed, and apprehensive that the funds to cover the
salaries and allowances otherwise due him would revert to
the General Fund, Dr. de la Fuente repaired to the Civil
Service Commission and asked it to enforce its judgment.
He was however told to file in court a petition for
mandamus because of the belief that the Commission
had no coercive powers -- unlike a court -- to enforce its
final decisions/resolutions.
So he instituted in the Court of Appeals on December 28,
1988 an action of mandamus and damages with
preliminary injunction to compel Vital-Gozon, and the
Administrative Officer, Budget Officer and Cashier of the
NCH to comply with the final and executory resolution of
the Civil Service Commission. He prayed for the following
specific reliefs:
(1) (That) xxx a temporary restraining order be issued
immediately, ordering the principal and other
respondents to revert the funds of the NCH
corresponding to the amounts necessary to
implement the final resolution of the CSC in CSC
Case No. 4 in favor of herein petitioner, Dr. Alejandro
S. de la Fuente, Jr., and to pay such sums which have
accrued and due and payable as of the date of said
order;
(2) After hearing on the prayer for preliminary injunction,
that the restraining order be converted to a writ of
preliminary injunction; and that a writ of preliminary
mandatory injunction be issued ordering principal
respondent and the other respondents to implement
in full the said final resolution; and

xxx
The Court of Appeals required the respondents to answer.
It also issued a temporary restraining order as prayed for,
and required the respondents to show cause why it should
not be converted to a writ of preliminary injunction. The
record shows that the respondents prayed for and were
granted an extension of fifteen (15) days to file their
answer through counsel, who, as the Court of Appeals was
later to point out, did not bother to indicate his address,
thus notice was sent to him through the individual
respondents xxx (However, no) answer was filed; neither
was there any show cause [sic] against a writ of
preliminary injunction. It was a certain Atty. Jose Fabia who
appeared in Vital-Gozon's behalf.
About a month afterwards, de la Fuente filed with the
same Court a Supplemental/Amended Petition dated
February 2, 1989. The second petition described as one
for quo warranto aside from mandamus, added three
respondents including Dr. Jose Merencilla, Jr.; and
alleged inter alia that he (de la Fuente) had clear title to
the position in question [by] virtue of the final and
executory judgment of the Civil Service Commission; that
even after the Commission's judgment had become final
and executory and been communicated to Vital-Gozon,
the latter allowed Dr. Merencilla, Jr. as OIC Professional
Service to further usurp, intrude into and unlawfully hold

45
Page

(3) That, after hearing on the merits of the petition, that

judgment be rendered seeking (sic) permanent writs
issued and that principal respondent be ordered and
commanded to comply with and implement the said
final resolution without further delay; and,
furthermore, that the principal respondent be
ordered to pay to the petitioner the sums
of P100,000.00 and P20,000.00 as moral and
exemplary damages, and P10,000.00 for litigation
expenses and attorney's fees.

and exercise the public office/position of petitioner (under

a duly approved permanent appointment as Chief of
Clinics since 1978). De la Fuente thus prayed, additionally,
for judgment:
(a) Declaring that principal respondent Dr. Jose D.
Merencilla, Jr. is not legally entitled to the office of
Chief of Clinics (now retitled/known as Chief of
Medical Professional Staff, NCH), ousting him
therefrom and ordering said respondent to
immediately cease and desist from further
performing as OIC Professional Service any and all
duties and responsibilities of the said office; (and)
(b) Declaring that the petitioner, Dr. Alejandro S.
de la Fuente, Jr., is the lawful or de jure Chief of
Clinics (now known as Chief of the Medical
Professional Staff and placing him in the
possession of said office/position, without the
need of reappointment or new appointment as
held by the Civil Service Commission in its
resolution of August 9, 1988, in CSC Case No. 4.
xxx."
Copy of the Supplemental/Amended Petition was sent to
Atty. Jose A. Favia, Counsel for Respondents c/o Dr. Ma.
Isabelita Vital-Gozon, etc., National Children's Hospital, E.
Rodriguez Ave., Quezon City (Atty. Fabia's address not
being indicated or mentioned in his motion for Extension
of Time).
Again the Court of Appeals required answer of the
respondents. Again, none was filed. The petitions were
consequently resolved on the basis of their allegations and
the annexes. The Appellate Court promulgated its
judgment on June 9, 1989. It held that --

and accordingly ordered

xxx respondents, particularly Dr. Isabelita VitalGozon, xxx to forthwith comply with, obey and
implement the resolution in CSC Case No. 4 (and)
xxx Dr. Jose D. Merencilla, Jr., who is not entitled to
the office, xx to immediately cease and desist
from further performing and acting as OIC
Professional Service.
But de la Fuente's prayer for damages -- founded
essentially on the refusal of Gozon, et al. to obey the final
and executory judgment of the Civil Service Commission,
which thus compelled him to litigate anew in a different
forum -- was denied by the Court of Appeals on the ground
that the petitions (for mandamus) are not the vehicle nor
is the Court the forum for xxx (said) claim of damages.
Gozon acknowledged in writing that she received a copy
of the Appellate Tribunal's Decision of June 9, 1989 on June
15, 1989. Respondent de la Fuente acknowledged receipt

46
Page

The question of whether petitioner may be

divested of his position as Chief of Clinics by the
expedient of having him appointed to another,
lower position is no longer an issue. It ceased to
be such when the resolution in CSC Case No. 4
became final. The said resolution is explicit in its
mandate; petitioner was declared the lawful
and de jureChief of Clinics (Chief of the Medical
Professional Staff) of the National Childrens
Hospital, and by this token, respondent Dr. Jose D.
Merencilla, Jr. is not legally entitled to the
office. Respondents, particularly Dr. Isabelita VitalGozon, had no discretion or choice on the matter;
the resolution had to be complied with. It was illadvised of principal respondent, and violative of
the rule of law, that the resolution has not been
obeyed or implemented.

of his own copy on June 15, 1989. Neither Vital-Gozon nor

her co-party, Dr. Merencilla, Jr., moved for reconsideration
of, or attempted to appeal the decision.
It was de la Fuente who sought reconsideration of the
judgment, by motion filed through new counsel, Atty.
Ceferino Gaddi. He insisted that the Appellate Court had
competence to award damages in a mandamus action. He
argued that while such a claim for damages might not
have been proper in a mandamus proceeding in the
Appellate Court before the enactment of B.P. Blg. 129
because the Court of Appeals had authority to issue such
writs only in aid of its appellate jurisdiction, the situation
was changed by said BP 129 in virtue of which three levels
of courts -- the Supreme Court, the Regional Trial Court,
and the Court of Appeals -- were conferred concurrent
original jurisdiction to issue said writs, and the Court of
Appeals was given power to conduct hearings and receive
evidence to resolve factual issues. To require him to
separately litigate the matter of damages, he continued,
would lead to that multiplicity of suits which is abhorred
by the law.
While his motion for reconsideration was pending, de la
Fuente sought to enforce the judgment of the Court of
Appeals of June 9, 1989 -- directing his reinstatement
pursuant to the Civil Service Commissions Resolution of
August 9, 1988, supra. He filed on July 4, 1989 a Motion
for Execution, alleging that the judgment of June 9, 1989
had become final and executory for failure of Gozon, et al.
-- served with notice thereof on June 16, 1989 -- to move
for its reconsideration or elevate the same to the Supreme
Court. His motion was granted by the Court of Appeals in a
Resolution dated July 7, 1989, reading as follows:
The decision of June 9, 1989 having become final
and executory, as prayed for, let the writ of
execution issue forthwith.

The writ of execution notwithstanding, compliance with

the June 9, 1989 judgment was not effected.
Consequently, de la Fuente filed, on July 20, 1989, an
Urgent Ex ParteManifestation with Prayer to Cite
Respondents for Contempt, complaining that although
Gozon and her co-parties had been served with the writ of
execution on July 14, they had not complied therewith. By
Resolution dated July 26, 1989, the Court required Gozon
and Merencilla to appear before it on August 3, 1989 to
answer the charge and show cause why they should not
be adjudged in contempt for disobeying and/or resisting
the judgment.
At the hearing Gozon and Merencilla duly presented
themselves, accompanied by their individual private
lawyers -- one for Gozon (Felipe Hidalgo, Jr.), two for
Merencilla (Bernardo S. Nera and Moises S. Rimando). One
other lawyer appeared in their behalf, from the Health
Department, Artemio Manalo, who stated that he was
there in behalf of Jose A. Fabia. They explained that they
had no intention to defy the Court, they had simply
referred the matter to their superiors in good faith; and
they were perfectly willing to comply with the judgment,
undertaking to do so even in the afternoon of that same
day. The Court consequently ordered them "to comply with
their undertaking xxx without any further delay, and
report the action taken towards this end, within five (5)
days.
On August 9, 1989, Gozon, as Medical Center Chief, sent a
letter to Associate Justice Pedro A. Ramirez, advising that

47
Page

The corresponding writ of execution issued on July 13,

1989, on the invoked authority of Section 9, Rule 39. The
writ quoted the dispositive portion of the judgment of June
9, 1989, including, as the Solicitor Generals Office points
out, the second paragraph to the effect that the petitions
are not the vehicle nor is the Court the forum for the claim
of damages; (hence,) the prayer therefor is denied.

under Hospital Special Order No. 31 dated August 3, 1989,

de la Fuente had been directed to assume the position of
Chief of the Medical Professional Staff, and that a voucher
for the payment of his allowances had been prepared and
was being processed.
More than a month later, or more precisely on September
27, 1989, the Court of Appeals promulgated another
Resolution, this time resolving de la Fuente's motion for
reconsideration of June 29, 1989. It modified the Decision
of June 9, 1989 by (a) deleting its last paragraph
(disallowing the claim of damages, supra), (b)
consequently describing and treating it as a PARTIAL
DECISION, and (c) scheduling further proceedings for the
purpose of receiving evidence (of damages), since said
question cannot be resolved by mere reference to the
pleadings. This was done in reliance on Section 3, Rule 65
of the Rules of Court, invoked by de la Fuente, which reads
as follows:
SEC. 3. Mandamus. -- When any tribunal,
corporation, board, or person unlawfully neglects
the performance of an act which the law
specifically enjoins as a duty resulting from an
office, trust, or station, or unlawfully excludes
another from the use and enjoyment of a right or
office to which such other is entitled, and there is
no other plain, speedy and adequate remedy in
the ordinary course of law, the person aggrieved
thereby may file a verified petition in the proper
court alleging the facts with certainty and praying
that judgment be rendered commanding the
defendant, immediately or at some other specified
time, to do the act required to be done to protect
the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of
the wrongful acts of the defendant.

48

in G.R. No. 87977 (Urbano, et al. v. Chavez, et al.)

and G.R. No. 88578 (Co v. Regional Trial Court of
Pasig).

Page

At about this time, yet another lawyer, Atty. Pedro F.

Martinez entered his appearance for Isabelita Gozon. At
his instance, the Court gave him an opportunity to xxx file
a motion for reconsideration of the Resolution of
September 27, 1989. That motion he filed by registered
mail on November 10, 1989. His basic contentions were
(a) that the decision of June 9, 1989 could no longer be
altered, having become final and executory and having in
fact been executed, and (b) that under BP 129, the
Appellate Court had no jurisdiction over the question of
damages in a mandamus action.

Notice of this Resolution of January 11, 1991 was served

on the Solicitor Generals Office on January 18, 1991. Again
the Solicitor General sought reconsideration, by motion
dated January 25, 1991 and filed on January 30,
1991. Again it was rebuffed. In a Resolution rendered on
August 7, 1991, served on the Solicitor Generals Office on
August 20, 1991, the Court of Appeals denied the
motion. It ruled that the question of the authority of the
Solicitor General to appear as counsel for respondent
Gozon xxx (had already) been extensively discussed, and
that its jurisdiction xxx to hear and determine issues on
damages proceeds from Sec. 9, Batas Pambansa 129 as
amended.

The Office of the Solicitor General also put in an

appearance in Gozon's behalf at this juncture, saying that
the case had been referred to it only on November 14,
1989. It, too, sought reconsideration of the Resolution of
September 27, 1989. It filed on November 16, 1989 an
Omnibus Motion: I. For Reconsideration of Resolution
dated September 27, 1989; and II. To defer hearing on
petitioner's claims for damages.

In an attempt to nullify the adverse dispositions of the

Court of Appeals -- and obtain the ultimate and corollary
relief of dismissing respondent de la Fuentes claim for
damages - the Solicitor Generals Office has instituted the
special civil action of certiorari at bar. It contends that the
Court of Appeals is not legally competent to take
cognizance of and decide the question of damages in
a mandamus suit. xxx[3]

Both motions were denied by the Court of Appeals in a

Resolution dated January 11, 1991. In that Resolution, the
Court
1) declared that the amended decision had
already become final and could no longer be reopened because, although a copy of the
amendatory resolution was received by counsel
who was representing Gozon on October 3, 1989,
the first motion for reconsideration was not mailed
until November 10, 1989 and the Solicitor
Generals Omnibus Motion was not filed until
November 16, 1989; and
2) prohibited the Solicitor General from
representing Gozon in connection with xx (de la
Fuentes) claim for damages, on the authority of
this Courts ruling promulgated on March 19, 1990

On 5 May 1993, the Court of Appeals issued a

Resolution[4] which noted that our decision in G.R. No. 101428 had
become final and left the option to reopen the case to de la Fuente.
In its resolution of 26 October 1995, [5] the Court of
Appeals, inter alia, set the hearing for reception of evidence on the
matter of damages on 7 December 1995.
After de la Fuente presented his evidence, the Court of Appeals
set reception of Vital-Gozons evidence on 16 and 17 January 1996.
[6]

The Court of Appeals then ordered the parties to submit their

respective memoranda,[9] after which, the Court of Appeals
promulgated, on 20 March 1997, a resolution denying petitioners
motion
to
admit
her
Answer
to
the
petition
and
supplemental/amended petition for mandamus with damages, on
the ground that the period to file the answer had long prescribed,
thus:
It was too late that the answer was filed in this Court on
September 18, 1992, after promulgation on August 5,
1992, of the decision of the Supreme Court in G.R. No.
101428. The prescribed period to file such answer as well
as the extended period had long expired on January 24,
1989 (pp. 35, 37, 55, Rollo) by the time respondents
answer was filed in this Court on September 18, 1992. She
had another opportunity to answer when petitioner filed a
supplemental/amended petition. (pp. 57, 72, Rollo). Still,
she filed none. It is evident respondent just ignored the
case filed against her or gave no importance to the

49
Page

At the scheduled hearing on 16 January 1996, Conrado M. Dela

Fuente sought to block the presentation of Vital-Gozons evidence
on the ground that the former had not filed an answer, which the
latter refuted. The hearing was then reset to other dates for the
parties to prove their respective claims. Vital-Gozon submitted, on
18 January 1996, copies of a Manifestation and Motion dated 10
September 1992 to which was attached an Answer likewise dated
10 September 1992. It was claimed in the Manifestation that the
answer to the claim for damages could not have been filed earlier
as the jurisdiction of the Court of Appeals over de la Fuentes claim
for damages had been questioned before the Supreme Court. VitalGozon likewise claimed that copies of the Manifestation and Motion
were received by the Court of Appeals on 18 September 1992 at
3:40 p.m. and sent by registered mail to counsel for dela Fuente.
[7]
The filing of the Manifestation and Motion with the Court of
Appeals was confirmed by Remigio M. Escalada, Jr., Division Clerk of
Court of the Fifth Division of the Court of Appeals in an undated
Report.[8] He further disclosed that the pleading was transmitted to
the Archives Section on 19 September 1992.

petitions and the notices sent to her by this Court. The

delay in filing her answer is inexcusable.
After promulgation and upon finality of this Courts decision
granting the principal relief sought by the petitioner, the
instant case for mandamus was virtually disposed of with
the exception of the incidental damages that petitioner
has claimed. It was uncontested in view of respondents
failure to answer the petition setting up her
defenses. Consequently, the allegations in the petition and
supplemental petition were deemed admitted; unpleaded
defenses were deemed waived and any counterclaim not
set up, barred (Sections 1, 2 and 4, Rule 9, Revised Rules
of Court). Such procedural rules would become
meaningless unless strictly complied with by litigants. As
clearly indicated in the proposed answer, respondents
purpose is to set up a counterclaim already barred and to
plead defenses already waived.
Besides, the parties as well as this Court are bound by the
comprehensive findings and conclusions of the Supreme
Court in its final decision in G.R. No. 101428, based on the
uncontroverted allegations of the verified petitions. So are
they bound thereby in this proceeding which deals with
the lone issue of incidental damages claimed by
petitioner. What remains to be done by this Court is but
the determination of whether respondents wrongful act or
refusal/failure to perform an official duty caused injury to
the claimant and the amount of the damages that may be
awarded in his favor.[10]
Respondent court then set the hearing of the case on 22-23 April
1997 for the presentation of [Vital-Gozons] evidence to controvert
or rebut that of [de la Fuente] which he has adduced in support of
his claim for damages.
In its resolution[11] of 21 April 1997, the Court of Appeals denied
petitioners motion to reconsider[12] the 20 March 1997 resolution.

On 7 May 1997, the Court of Appeals promulgated a

Resolution[14] finding petitioner liable for damages and ordered her
to
pay
private
respondent P50,000.00
as
moral
damages, P20,000.00 as exemplary damages and P10,000.00 as
attorneys fees. In support thereof, respondent court quoted our
finding in G.R. No. 101428,[15] to wit:
The record demonstrates that Vital-Gozon was fully aware of the
following acts and events:
1) the proceeding commenced by de la Fuente in the Civil
Service Commission in protest against his demotion;
2) the Commissions Resolution of August 9, 1988 as well,
particularly, as the direction therein that de la Fuente
be reinstated and paid all his back salaries and other
monetary benefits otherwise due him, this being
couched in fairly simple language obviously
understandable to persons of ordinary or normal
intelligence;
3) no less than two (2) written demands of de la Fuente for
implementation of the CSCs aforesaid Resolution of
August 9, 1988;
4) the petition filed by de la Fuente in the Court of Appeals
for enforcement of the CSC Resolution of August 9,
1988;
5) the extension granted by said Court of Appeals within
which to file answer, notice thereof having been sent
directly to her and her co-respondents since the
attorney who sought the extension in their behalf

50
Page

Petitioner then opted not to present her evidence, as she

intended to file a petition with the Supreme Court questioning the
validity of the 20 March 1997 resolution and 21 April 1997 order of
the Court of Appeals.[13]

(Atty. Fabia) did not set out his address in his motion
for extension;
6) the supplemental/amended petition subsequently
presented by de la Fuente, copy of which was sent to
Atty. Fabia, c/o Dr. Vital-Gozon; and
7) the Decision and Amendatory Decision sent to her
counsel on October 3, 1989.
To all these, her reaction, and that of the officials of the Department
of Health concerned, was a regrettably cavalier one, to say the
least. Neither she nor the Health officials concerned accorded said
acts and events any importance. She never bothered to find out
what was being done to contest or negate de la Fuentes petitions
and actions, notwithstanding that as time went by, de la Fuentes
efforts were being met with success.
Nothing in the record even remotely suggests that Vital-Gozon
merits relief from the final and executory Resolution of the Civil
Service Commission. This Court will not disturb that Resolution. It is
satisfied that no procedural or substantive errors taint that
Resolution, or its becoming final and executory.
The Court of Appeals then considered the evidence for private
respondent and the applicable law, thus:
Upon respondents continued refusal without justifiable
cause to implement the final resolution of the Civil Service
Commission upholding petitioners right to the position he
has been claiming with back salaries, transportation,
representation and housing allowances and other benefits
withheld from him, petitioner is entitled to the damages
he claims.Testifying in his own behalf petitioner declared
that he was greatly disturbed, shocked and frustrated
during the three months preceding the filing of his
petition; that he had sleepless nights and suffered from
mental anxiety, mental anguish, worry, tension and
humiliation when respondent ignored and disregarded the

Petitioner, therefore, is entitled to recover moral damages

from respondent for her refusal and neglect without just
cause to perform her official duty to reinstate petitioner to
the position he was entitled, as ordered by the Civil Service
Commission in its decision. While he was reinstated to his
position, petitioner had to seek the aid of the courts for
that purpose. In point is the case of San Luis vs. Court of
Appeals, decided by the Supreme Court on June 26, 1989
(174 SCRA 258, 276), which involves the unlawful
suspension and dismissal by a Provincial Governor of a
quarry superintendent and the Governors obstinate refusal
to comply with the final decisions of the Civil Service
Commission and the Office of the President which declared
said suspension and dismissal unlawful or without just
cause. The Supreme Court held that the Governor (who
was sued both in his official and private capacities) was
personally liable for the damages claimed and awarded in
favor of the offended party P50,000 as moral damages
and P20,000 for attorneys fees and litigation expenses. Tan
Kapoe vs. Masa, decided January 21, 1985 (134 SCRA 231),
is also pertinent. There the Supreme Court upheld the
award of moral damages although it was made on the
basis of documentary evidence x x x without supporting
oral testimonies. And the award of exemplary damages, in
addition to moral damages, was also deemed proper even
if not expressly pleaded in the complaint nor proved. Such
award of exemplary damages is by way of example or
correction for the public good, in addition to moral
damages (Article 2229, Civil Code). Inasmuch as petitioner

51
Page

final resolution of the Civil Service Commission; that he

felt harassed by her refusal because he had to go to court
to obtain relief and had to incur additional expenses for
litigation which he could hardly afford; and that he had to
spend no less than P5,000 for court fees and incidental
expenses and to pay his counsel P10,000 at the end of the
litigation (pp. 6, 7, 12, 13, t.s.n., Dec. 7, 1995). All these
respondent has not successfully rebutted by her evidence
since she adduced none in her behalf.

is entitled to exemplary damages, he should be awarded

attorneys fees. The award in favor of petitioner of moral
and exemplary damages are attorneys fees in the amounts
of P50,000, P20,000 and P10,000, respectively, is but fair
and just and not excessive.[16]
Unsatisfied, petitioner forthwith filed the instant petition for
review on certiorari under Rule 45 of the Rules of Court. She prays
that we reverse and set aside the challenged Resolution on the
following grounds:
1. There is absolutely no ground for the award of moral and
exemplary damages, as well as attorneys fees.
2. Petitioners right to due process was violated.
Anent the first ground, petitioner asserts there is no factual
basis for the award of moral damages for, concretely, private
respondent was unable to show any causal connection between his
supposed
injury
and
petitioners
alleged
actionable
wrong. Petitioner argues that while testifying, private respondent
simply made generalized statements that he had sleepless nights
and suffered mental anxiety, mental anguish, worry, tension and
humiliation. Petitioner next reiterates her stand that she had
nothing to do with the Civil Service case relative to respondents
original position, as she was not yet connected with the NCH when
said case was filed. Moreover, the failure to immediately reinstate
private respondent was caused by the directive of the Legal
Department of the Department of Health, to which office she
forwarded the decision of the Civil Service Commission for
guidance, pursuant to standard procedure. Petitioner, therefore,
acted in good faith. She likewise faults the Court of Appeals for
considering our observations in G.R. No. 101428 as factual findings
which bound respondent court.
As to exemplary damages, petitioner asserts that she did not
act with vindictiveness nor wantonness, hence the award of said
damages was unwarranted,[17] as such, there could likewise be no
basis for the award of attorneys fees.[18]

Petitioner further argues that the Court of Appeals denied her

due process by refusing to admit her answer, considering that: (a)
she
personally
attended
each
and
every
hearing
of
the mandamus case; (b) in its decision of 9 June 1989, the Court of
Appeals explicitly declared that it was not the proper forum for the
claim for damages, at which point then the necessity of an answer
had become moot; (c) it was only on 27 September 1989 that the
Court of Appeals reconsidered its decision of 9 June 1989 thereby
upholding its jurisdiction to hear the claims for damages; (d) but
then, consistent with her stand that the Court of Appeals had no
jurisdiction over the claims for damages, she assailed such ruling
before this Court, hence she could not have been expected to file
an answer; (e) nonetheless, upon receipt of the adverse decision of
this Court of 4 August 1992 in G.R. No. 101428, she immediately
filed her answer with a corresponding motion for its admission; and
(f) while her motion for admission of the answer had been pending
since 18 October 1992, the Court of Appeals did not act on it until it
was already her turn to present her evidence on the claim for
damages.
In his comment on the petition submitted in compliance with
the Resolution of 21 July 1997, private respondent contends that:
(a) petitioners incomplete and slanted version of the facts of the
case cannot be relied upon; (b) the factual findings of this Court in
G.R. No. 101428 are conclusive and binding, hence the Court of
Appeals did not err nor abuse its discretion in relying on said
findings; (c) petitioners invocation of state immunity is untenable
as she was sued not in her official capacity, and assuming
otherwise, petitioner could nevertheless be held liable for damages
under Articles 20, 27 and 2176 of the Civil Code and Section 3, Rule
65 of the Rules of Court; (d) the Court of Appeals did not err in
denying petitioners motion to admit her answer; and (e) the Court

52
Page

Anent the second ground, petitioner contends that she was

sued in her official capacity, hence could not be held liable for
damages, and to hold otherwise would violate her right to due
process as a private individual, citing Cario v. Agricultural Credit
and Cooperative Financing Administration[19] and Animos v.
Philippine Veterans Affairs Office.[20]

of Appeals awards of moral and exemplary damages and attorneys

fees were proper, fair, reasonable, justified and in accord with the
law and precedent.
Two principal issues thus confront us, viz: (a) whether
petitioner was denied due process when her answer to the petition
was not admitted; and (b) whether the awards of moral and
exemplary damages and attorneys fees were proper. These will be
resolved in seriatim.
I
We do not hesitate to rule that petitioner was not denied due
process. The record of CA-G.R. SP No. 16438 shows that in the
resolution of 29 December 1998, the Court of Appeals gave due
course to private respondents petition and required herein
petitioner and the other respondents to answer the petition within
10 days from notice of the resolution. [21] On 9 January 1988,
petitioner and the other respondents, represented by Atty. Jose
Fabia, filed a motion for an extension of 15 days from said date
within which to file their answer, which respondent court granted in
its resolution of 17 January 1989.[22] Likewise, on 17 January 1989,
private respondent, as petitioner below, was granted leave to file a
supplemental/amended petition.[23]
The Supplemental/Amended Petition was filed on 3 February
1989,[24] and in the resolution of 9 February 1989, [25] the Court of
Appeals required petitioner herein and her co-respondents in CAG.R. SP No. 16438 to file their answer thereto within 10 days from
notice. However, no such answer was filed, and on 9 June 1989, the
Court of Appeals rendered its decision. [26] De la Fuente seasonably
filed a motion for reconsideration, [27] principally as regards the
holding that the petitions are not the vehicle nor is the Court the
forum for the claim of damages. A copy of this motion was
furnished counsel for respondents. Respondents therein were then
required, in the resolution of 5 July 1989, [28] to comment within 10
days from notice. However, respondents below once more failed to
comply. Thus, on 27 September 1989, the Court of Appeals
promulgated a resolution[29] granting the motion for reconsideration

Respondents below, represented by new counsel, Atty. Pedro

Martinez, and the rest by the Office of the Solicitor General, filed
motions to reconsider the resolution of 27 September 1989,
primarily on the ground that the Court of Appeals had no
jurisdiction over the claim for damages in the petition
for mandamus. The incidental issue of the authority of the Solicitor
General to appear for herein petitioner in respect of the claim for
damages against her in her personal capacity was also
raised. These matters became the subject of various pleadings.
Eventually, on 11 January 1991, the Court of Appeals
promulgated a resolution[30] which gave rise to G.R. No. 101428,
after the Court of Appeals denied herein petitioners motion for
reconsideration.
Clearly, therefore, petitioners failure to file the answer to the
petition was due to her fault or negligence. She was, by formal
resolutions of the Court of Appeals, required to file answers to both
the original petition and the Supplemental/Amended Petition; yet,
she failed to heed both resolutions. As regards the resolution to
answer the Supplemental/Amended Petition, herein petitioner
totally disregarded the same. And if only to further evince that
herein petitioner had no one to blame but herself for her plight, as
regards the resolution to answer the original petition, this she
spurned despite the fact that she asked for and was granted an
extension of 15 days within which to do so. That she questioned the
jurisdiction of the Court of Appeals over the claims for damages is
entirely irrelevant, considering that she did so only after the Court
of Appeals promulgated its Resolution of 27 September 1989. Up to
that time, petitioner had absolutely no responsive pleading setting
forth her defense.
It may likewise be stressed that under Section 2.c.(4) of the
Revised Internal Rules of the Court of Appeals then in force, after
the expiration of the period for filing the answer or the reply in

53
Page

by deleting therefrom the challenged portion of its decision of 9

June 1989. Respondent court then set reception of evidence on the
claims for damages on 9 and 11 of October 1989.

special civil actions, a case is deemed submitted for

resolution. Thus, after the expiration of the 10-day period granted
to
herein
petitioner
to
file
her
Answer
to
the
Supplemental/Amended Petition, and in light of her failure to file
her answer to the original petition despite the grant of her motion
for extension of time to file it, then the case was automatically
deemed submitted for decision. After the decision was rendered,
she could then no longer be heard to raise a defense which, by her
inaction, she indubitably expressed no desire to raise.
It cannot then be successfully maintained that the Court of
Appeals committed reversible error, much less, grave abuse of
discretion, when it denied admission to an answer that was filed
only after this Courts decision in G.R. No. 101428 had long become
final and immutable.
What further militates against petitioners advocacy is that the
Court of Appeals, aside from affording petitioner an opportunity to
be heard through the filing of pleadings, likewise sustained
petitioners right to due process at the hearing. What petitioner
neglects to mention is that respondent court did not deprive her
the right to cross-examine private respondent when the latter
testified as to the matter of damages. Through the exercise of the
right, petitioner could have negated private respondents claims by
showing the absence of legal or factual basis therefor. Moreover,
the Court of Appeals explicitly allowed petitioner to present her
evidence against the claim for damages. However, petitioner again
failed to take the opportunity to have herself heard.
It may be pointed out that in her Answer, [31] she interposed the
following defenses against the claim for moral and exemplary
damages and attorneys fees, namely: (1) the claim was effectively
and exclusively a suit against the State, but without its consent; (2)
she had not committed any actionable wrong as she acted in good
faith and without malice or negligence; and (3) whatever injury
private respondent may have suffered were mere consequences of
his indiscretion, negligence and/or ignorance of the law which, at
best, constituted damnum absque injuria. From the nature of these
defenses, they could very well have been taken up, even indirectly,

II
Moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings,
moral shock, social humiliation, and similar injury. They may be
recovered if they are the proximate result of the defendants
wrongful act or omission.[32] The instances when moral damages
may be recovered are, inter alia, acts and actions referred to in
Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35 of the Civil Code,
[33]
which, in turn, are found in the Chapter on Human Relations of
the Preliminary Title of the Civil Code. Relevant to the instant case,
which involves public officers, is Article 27,[34] which provides:
ART. 27. Any person suffering material or moral loss because a
public servant or employee refuses or neglects, without just cause,
to perform his official duty may file an action for damages and
other relief against the latter, without prejudice to any disciplinary
administrative action that may be taken.
Article 27 must then be read in conjunction with Section 1 of Article
XI (Accountability of Public Officers) of the Constitution, [35] which
provides:
Section 1. Public office is a public trust. Public officers and
employees must at all times be accountable to the people, serve
them with utmost responsibility, integrity, loyalty, and efficiency,
act with patriotism and justice, and lead modest lives.
It is thus evident that under Article 27, in relation to Articles
2219 and 2217 of the Civil Code, a public officer, like petitioner
herein, may be liable for moral damages for as long as the moral
damages suffered by private respondent were the proximate result
of petitioners wrongful act or omission, i.e., refusal to perform an
official duty or neglect in the performance thereof.In fact, if only to

54
Page

on cross-examination of private respondent or in the course of

petitioners testimony had she chosen to present her evidence. All
told, the above discussion should readily refute petitioners claim of
a denial of due process.

underscore the vulnerability of public officials and employees to

suits for damages to answer for any form or degree of misfeasance,
malfeasance or nonfeasance, this Court has had occasion to rule
that under Articles 19 and 27 of the Civil Code, a public official may
be made to pay damages for performing a perfectly legal act, albeit
with bad faith or in violation of the abuse of right doctrine
embodied in the preliminary articles of the Civil Code concerning
Human Relations.[36]
Exemplary damages may be imposed by way of example or
correction for the public good, in addition to the moral, temperate,
liquidated or compensatory damages.[37]
Attorneys fees and other expenses of litigation may be
recovered as actual or compensatory damages when, inter alia,
exemplary damages are awarded; when the defendant acted in
gross and evident bad faith in refusing to satisfy the plaintiff's
plainly valid, just and demandable claim, and in any other case
where the court deems it just and equitable that attorneys fees and
expenses of litigation should be recovered.[38]
There can be no question that private respondent was entitled
to be restored to his position as Chief of Clinics by virtue of the final
and executory decision of the Civil Service Commission. Petitioner,
as head or chief of the National Childrens Hospital, then had the
duty to see to it that the decision be obeyed and implemented. This
she failed to do and private respondents two official demands for
compliance with the Civil Service Commissions decision were
merely referred by petitioner to the Legal Department of the
Department of Health; and as further noted by this Court in its
decision in G.R. No. 101428, she did not answer [private
respondents] letters not even to inform him of the referral thereof
to the Assistant Secretary [for Legal Affairs]. She chose simply to
await legal guidance from the DOH Legal Department. This Court
further noted:
To all these, [petitioners] reaction, and that of the officials of the
Department of Health concerned, was a regrettably cavalier one, to
say the least. Neither she nor the Health Department officials

That petitioner then committed an actionable wrong for

unjustifiably refusing or neglecting to perform an official duty is
undeniable. Private respondent testified on the moral damages
which he suffered by reason of such misfeasance or malfeasance of
petitioner, and the attorneys fees and litigation expenses he
incurred to vindicate his rights and protect his interests.The Court
of Appeals which heard him gave full faith and credit to his
testimony. Private respondent declared that by reason of the unjust
action or refusal of petitioner when she did not recognize, ignored
and disregarded the final and executory Civil Service Resolution,
he:
[W]as actually greatly disturbed, shocked and frustrated
during those three ... months. [He] had sleepless nights
and ... suffered from mental anxiety, worry, tension and
humiliation...[39]
Private respondents anguish even continued during the 5-month
period while the case was pending with the Court of Appeals, thus:
During this period my sleepless nights and my moral sufferings
continued. As a matter of fact, even worsened. I just could not
understand, actually I could not understand the action here of Dr.
Gozon for having not followed the decision of the Court of
Appeals. And that is why I felt very much aggrieved during this
period. I could not sleep at all and this has weakened me.[40]
Private respondent further testified that he spent not less
than P5,000.00 for court fees and as incidental expenses and had
committed himself to pay P10,000.00 to his counsel at the end of
the case.[41]

55
Page

concerned accorded said acts and events any importance. She

never bothered to find out what was being done to contest or
negate [private respondents] petitions and actions, notwithstanding
that as time went by, [private respondents] efforts were being met
with success.

While private respondent did not quantify the extent of his

moral damages, the Court of Appeals fixed the same at P50,000.00.
Since moral damages are, in the language of Article 2217 of the
Civil Code, incapable of pecuniary estimation, courts have the
discretion to fix the corresponding amount, not being bound by any
self-serving assessment by the claimants. On the other hand, a
claimants failure to state the monetary value of moral damages
suffered presents no legal obstacle to a courts determination
thereof, as long as there is factual basis for the award such as the
claimants testimony as to his sufferings. As a matter of fact, it is
not unusual for claimants to leave the determination of the amount
of the award to the discretion of the court.
Under Article 2233 of the Civil Code, exemplary damages
cannot be recovered as a matter of right; the court will decide
whether or not they should be adjudicated. In the instant case, the
Court of Appeals awarded exemplary damages in the amount
of P20,000.00. Considering that a public official is the culprit here,
the propriety of such an award cannot be questioned. It serve as an
example or deterrent so that other public officials be always
reminded that they are public servants bound to adhere faithfully to
the constitutional injunction that a public office is a public
trust. That the aggrieved party happened to be another public
official will not serve to mitigate the effects of petitioners having
failed to observe the required degree of accountability and
responsibility.
As to attorneys fees as actual damages, the Court of Appeals
determination of its propriety in this case and the extent thereof
were well within its discretion. The agreement between private
respondent and his counsel as to the amount does not control.
Petitioners contention that she cannot be liable for damages
since she was sued in her official capacity is without merit. Whether
petitioner was impleaded as respondent in an official capacity, i.e.,
solely in her capacity as Chief of the National Childrens Hospital, is
best
determined
from
the
Petition
as
well
as
the
Supplemental/Amended Petition. For one, in the captions in both,
she is named as one of the respondents without any express

16. For causing such mental suffering and anguish, etc.,[42] principal
respondent [herein petitioner] ought to and must be, in accordance
with the Civil Code, held personally answerable and liable to the
petitioner in the sum of not less than P100,000.00 as moral
damages, and another sum of P20,000.00 as exemplary damages,
by way of example or correction for the public good. [43] (emphasis
supplied)
In maintaining then that she was sued merely in her official
capacity, petitioner has either overlooked paragraph 16 or sought
to deliberately mislead this Court.
WHEREFORE, for utter failure to show that respondent Court
of Appeals committed reversible error in the challenged resolutions,
the instant petition is denied.
Costs against petitioner.
SO ORDERED.

56
Page

mention that she was so sued in her capacity, as Chief of the

National Childrens Hospital. For another, the allegations in the body
of the Petition clearly show that she was sued in both her official
and private capacities. As to the former, paragraphs 1 and 7
respectively allege petitioners position as a public official, and
specifically as Head of the Childrens Hospital; her duty to restore
private respondent to his position by virtue of the final decision of
the Civil Service Commission; and her refusal to allow private
respondent to perform and discharge his duties and responsibilities
as Chief of Clinics. As to the latter, paragraph 16 of the Petition
explicitly speaks of petitioners personal liability, thus:

EN BANC
G.R. No. L-16439

July 20, 1961

ANTONIO GELUZ, petitioner,

vs.
THE HON. COURT OF APPEALS and OSCAR LAZO, respondents.
Mariano H. de Joya for petitioner.
A.P. Salvador for respondents.
REYES, J.B.L., J.:
This petition for certiorari brings up for review question whether the
husband of a woman, who voluntarily procured her abortion, could
recover damages from physician who caused the same.
The litigation was commenced in the Court of First Instance of
Manila by respondent Oscar Lazo, the of Nita Villanueva, against
petitioner Antonio Geluz, a physician. Convinced of the merits of
the complaint upon the evidence adduced, the trial court rendered
judgment favor of plaintiff Lazo and against defendant Geluz,
ordering the latter to pay P3,000.00 as damages, P700.00
attorney's fees and the costs of the suit. On appeal, Court of
Appeals, in a special division of five, sustained the award by a
majority vote of three justices as against two, who rendered a
separate dissenting opinion.
The facts are set forth in the majority opinion as follows:
Nita Villanueva came to know the defendant (Antonio Geluz)
for the first time in 1948 through her aunt Paula Yambot.
In 1950 she became pregnant by her present husband
before they were legally married. Desiring to conceal her
pregnancy from her parent, and acting on the advice of her

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Republic of the Philippines

SUPREME COURT
Manila

aunt, she had herself aborted by the defendant. After her

marriage with the plaintiff, she again became pregnant. As
she was then employed in the Commission on Elections and
her pregnancy proved to be inconvenient, she had herself
aborted again by the defendant in October 1953. Less than
two years later, she again became pregnant. On February
21, 1955, accompanied by her sister Purificacion and the
latter's daughter Lucida, she again repaired to the
defendant's clinic on Carriedo and P. Gomez streets in
Manila, where the three met the defendant and his wife. Nita
was again aborted, of a two-month old foetus, in
consideration of the sum of fifty pesos, Philippine currency.
The plaintiff was at this time in the province of Cagayan,
campaigning for his election to the provincial board; he did
not know of, nor gave his consent, to the abortion.
It is the third and last abortion that constitutes plaintiff's basis in
filing this action and award of damages. Upon application of the
defendant Geluz we granted certiorari.
The Court of Appeals and the trial court predicated the award of
damages in the sum of P3,000.06 upon the provisions of the initial
paragraph of Article 2206 of the Civil Code of the Philippines. This
we believe to be error, for the said article, in fixing a minimum
award of P3,000.00 for the death of a person, does not cover the
case of an unborn foetus that is not endowed with personality.
Under the system of our Civil Code, "la criatura abortiva no alcanza
la categoria de persona natural y en consscuencia es un ser no
nacido a la vida del Derecho" (Casso-Cervera, "Diccionario de
Derecho Privado", Vol. 1, p. 49), being incapable of having rights
and obligations.
Since an action for pecuniary damages on account of personal
injury or death pertains primarily to the one injured, it is easy to
see that if no action for such damages could be instituted on behalf
of the unborn child on account of the injuries it received, no such
right of action could derivatively accrue to its parents or heirs. In
fact, even if a cause of action did accrue on behalf of the unborn
child, the same was extinguished by its pre-natal death, since no

The prevailing American jurisprudence is to the same effect; and it

is generally held that recovery can not had for the death of an
unborn child (Stafford vs. Roadway Transit Co., 70 F. Supp. 555;
Dietrich vs. Northampton, 52 Am. Rep. 242; and numerous cases
collated in the editorial note, 10 ALR, (2d) 639).
This is not to say that the parents are not entitled to collect any
damages at all. But such damages must be those inflicted directly
upon them, as distinguished from the injury or violation of the
rights of the deceased, his right to life and physical integrity.
Because the parents can not expect either help, support or services
from an unborn child, they would normally be limited to moral
damages for the illegal arrest of the normal development of
the spes hominis that was the foetus, i.e., on account of distress
and anguish attendant to its loss, and the disappointment of their
parental expectations (Civ. Code Art. 2217), as well as to exemplary
damages, if the circumstances should warrant them (Art. 2230).
But in the case before us, both the trial court and the Court of
Appeals have not found any basis for an award of moral damages,
evidently because the appellee's indifference to the previous
abortions of his wife, also caused by the appellant herein, clearly
indicates that he was unconcerned with the frustration of his
parental hopes and affections. The lower court expressly found, and
the majority opinion of the Court of Appeals did not contradict it,
that the appellee was aware of the second abortion; and the
probabilities are that he was likewise aware of the first. Yet despite
the suspicious repetition of the event, he appeared to have taken
no steps to investigate or pinpoint the causes thereof, and secure

58
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transmission to anyone can take place from on that lacked juridical

personality (or juridical capacity as distinguished from capacity to
act). It is no answer to invoke the provisional personality of a
conceived child (conceptus pro nato habetur) under Article 40 of
the Civil Code, because that same article expressly limits such
provisional personality by imposing the condition that the child
should be subsequently born alive: "provided it be born later with
the condition specified in the following article". In the present case,
there is no dispute that the child was dead when separated from its
mother's womb.

the punishment of the responsible practitioner. Even after learning

of the third abortion, the appellee does not seem to have taken
interest in the administrative and criminal cases against the
appellant. His only concern appears to have been directed at
obtaining from the doctor a large money payment, since he sued
for P50,000.00 damages and P3,000.00 attorney's fees, an
"indemnity" claim that, under the circumstances of record, was
clearly exaggerated.
The dissenting Justices of the Court of Appeals have aptly remarked
that:
It seems to us that the normal reaction of a husband who
righteously feels outraged by the abortion which his wife
has deliberately sought at the hands of a physician would be
highminded rather than mercenary; and that his primary
concern would be to see to it that the medical profession
was purged of an unworthy member rather than turn his
wife's indiscretion to personal profit, and with that idea in
mind to press either the administrative or the criminal cases
he had filed, or both, instead of abandoning them in favor of
a civil action for damages of which not only he, but also his
wife, would be the beneficiaries.
It is unquestionable that the appellant's act in provoking the
abortion of appellee's wife, without medical necessity to warrant it,
was a criminal and morally reprehensible act, that can not be too
severely condemned; and the consent of the woman or that of her
husband does not excuse it. But the immorality or illegality of the
act does not justify an award of damage that, under the
circumstances on record, have no factual or legal basis.
The decision appealed from is reversed, and the complaint ordered
dismissed. Without costs.
Let a copy of this decision be furnished to the Department of Justice
and the Board of Medical Examiners for their information and such
investigation and action against the appellee Antonio Geluz as the
facts may warrant.

59
Page

Bengzon, C.J., Padilla, Labrador, Barrera, Paredes, Dizon and

Natividad, JJ., concur.
Concepcion, J., took no part.
De Leon, J., took no part.

EN BANC

60

(b) to furnish petitioners with certified

true copies of the documents
evidencing their respective loans;
and/or

Page

Republic of the Philippines

SUPREME COURT
Manila

(c) to allow petitioners access to the

public records for the subject
information. (Petition, pp. 4-5;
paragraphing supplied.]

G.R. No. 74930 February 13, 1989

RICARDO VALMONTE, OSWALDO CARBONELL, DOY DEL
CASTILLO, ROLANDO BARTOLOME, LEO OBLIGAR, JUN
GUTIERREZ, REYNALDO BAGATSING, JUN "NINOY" ALBA,
PERCY LAPID, ROMMEL CORRO and ROLANDO
FADUL, petitioners,
vs.
FELICIANO BELMONTE, JR., respondent.

The controversy arose when petitioner Valmonte wrote respondent

Belmonte the following letter:
June 4, 1986

Ricardo C. Valmonte for and in his own behalf and his copetitioners.

Hon. Feliciano Belmonte

GSIS General Manager
Arroceros, Manila

The Solicitor General for respondent.

Sir:

CORTES, J.:
Petitioners in this special civil action for mandamus with
preliminary injunction invoke their right to information and pray
that respondent be directed:

(a) to furnish petitioners the list of the

names of the Batasang Pambansa
members belonging to the UNIDO and
PDP-Laban who were able to secure
clean loans immediately before the
February 7 election thru the
intercession/marginal note of the then
First Lady Imelda Marcos; and/or

As a lawyer, member of the media and plain citizen

of our Republic, I am requesting that I be furnished
with the list of names of the opposition members of
(the) Batasang Pambansa who were able to secure a
clean loan of P2 million each on guarranty (sic) of
Mrs. Imelda Marcos. We understand that OIC Mel
Lopez of Manila was one of those aforesaid MPs.
Likewise, may we be furnished with the certified true
copies of the documents evidencing their loan.
Expenses in connection herewith shall be borne by
us.
If we could not secure the above documents could
we have access to them?
We are premising the above request on the following
provision of the Freedom Constitution of the present
regime.

61

My opinion in this regard is that a confidential

relationship exists between the GSIS and all those
who borrow from it, whoever they may be; that the
GSIS has a duty to its customers to preserve this
confidentiality; and that it would not be proper for
the GSIS to breach this confidentiality unless so
ordered by the courts.

Page

The right of the people to information

on matters of public concern shall be
recognized. Access to official records,
and to documents and papers
pertaining to official acts, transactions
or decisions, shall be afforded the
citizen subject to such limitation as
may be provided by law. (Art. IV, Sec.
6).

As a violation of this confidentiality may mar the

image of the GSIS as a reputable financial institution,
I regret very much that at this time we cannot
respond positively to your request.

We trust that within five (5) days from receipt hereof

we will receive your favorable response on the
matter.

Very truly yours,

Very truly yours,
(Sgd.) MEYNARDO A. TIRO
(Sgd.) RICARDO C. VALMONTE
Deputy General Counsel
[Rollo, p. 40.]
[Rollo, p. 7.]
To the aforesaid letter, the Deputy General Counsel of the GSIS
replied:
June 17, 1986
Atty. Ricardo C. Valmonte
108 E. Benin Street
Caloocan City

On June 20, 1986, apparently not having yet received the reply of
the Government Service and Insurance System (GSIS) Deputy
General Counsel, petitioner Valmonte wrote respondent another
letter, saying that for failure to receive a reply, "(W)e are now
considering ourselves free to do whatever action necessary within
the premises to pursue our desired objective in pursuance of public
interest." [Rollo, p. 8.]
On June 26, 1986, Valmonte, joined by the other petitioners, filed
the instant suit.

Dear Compaero:
Possibly because he must have thought that it
contained serious legal implications, President &
General Manager Feliciano Belmonte, Jr. referred to
me for study and reply your letter to him of June 4,
1986 requesting a list of the opposition members of
Batasang Pambansa who were able to secure a clean
loan of P2 million each on guaranty of Mrs. Imelda
Marcos.

On July 19, 1986, the Daily Express carried a news item reporting
that 137 former members of the defunct interim and regular
Batasang Pambansa, including ten (10) opposition members, were
granted housing loans by the GSIS [Rollo, p. 41.]
Separate comments were filed by respondent Belmonte and the
Solicitor General. After petitioners filed a consolidated reply, the
petition was given due course and the parties were required to file

In his comment respondent raises procedural objections to the

issuance of a writ of mandamus, among which is that petitioners
have failed to exhaust administrative remedies.
Respondent claims that actions of the GSIS General Manager are
reviewable by the Board of Trustees of the GSIS. Petitioners,
however, did not seek relief from the GSIS Board of Trustees. It is
therefore asserted that since administrative remedies were not
exhausted, then petitioners have no cause of action.
To this objection, petitioners claim that they have raised a purely
legal issue, viz., whether or not they are entitled to the documents
sought, by virtue of their constitutional right to information. Hence,
it is argued that this case falls under one of the exceptions to the
principle of exhaustion of administrative remedies.
Among the settled principles in administrative law is that before a
party can be allowed to resort to the courts, he is expected to have
exhausted all means of administrative redress available under the
law. The courts for reasons of law, comity and convenience will not
entertain a case unless the available administrative remedies have
been resorted to and the appropriate authorities have been given
opportunity to act and correct the errors committed in the
administrative forum. However, the principle of exhaustion of
administrative remedies is subject to settled exceptions, among
which is when only a question of law is involved [Pascual v.
Provincial Board, 106 Phil. 466 (1959); Aguilar v. Valencia, et al.,
G.R. No. L-30396, July 30, 1971, 40 SCRA 210; Malabanan v.
Ramento, G.R. No. L-2270, May 21, 1984, 129 SCRA 359.] The issue
raised by petitioners, which requires the interpretation of the scope
of the constitutional right to information, is one which can be
passed upon by the regular courts more competently than the GSIS
or its Board of Trustees, involving as it does a purely legal question.
Thus, the exception of this case from the application of the general
rule on exhaustion of administrative remedies is warranted. Having
disposed of this procedural issue, We now address ourselves to the

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Page

their memoranda. The parties having complied, the case was

deemed submitted for decision.

issue of whether or not mandamus hes to compel respondent to

perform the acts sought by petitioners to be done, in pursuance of
their right to information.
We shall deal first with the second and third alternative acts sought
to be done, both of which involve the issue of whether or not
petitioners are entitled to access to the documents evidencing
loans granted by the GSIS.
This is not the first time that the Court is confronted with a
controversy directly involving the constitutional right to
information. In Taada v. Tuvera, G.R. No. 63915, April 24,1985, 136
SCRA 27 and in the recent case of Legaspi v. Civil Service
Commission, G.R. No. 72119, May 29, 1987,150 SCRA 530, the
Court upheld the people's constitutional right to be informed of
matters of public interest and ordered the government agencies
concerned to act as prayed for by the petitioners.
The pertinent provision under the 1987 Constitution is Art. 111,
Sec. 7 which states:
The right of the people to information on matters of
public concern shall be recognized. Access to official
records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to
government research data used as basis for policy
development, shall be afforded the citizen, subject to
such limitations as may be provided by law.
The right of access to information was also recognized in the 1973
Constitution, Art. IV Sec. 6 of which provided:
The right of the people to information on 'matters of
public concern shall be recognized. Access to official
records, and to documents and papers pertaining to
official acts, transactions, or decisions, shall be
afforded the citizen subject to such limitations as
may be provided by law.

Petitioners are practitioners in media. As such, they have both the

right to gather and the obligation to check the accuracy of
information the disseminate. For them, the freedom of the press
and of speech is not only critical, but vital to the exercise of their
professions. The right of access to information ensures that these
freedoms are not rendered nugatory by the government's
monopolizing pertinent information. For an essential element of
these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in
the interest of the State that the channels for free political
discussion be maintained to the end that the government may
perceive and be responsive to the people's will. Yet, this open
dialogue can be effective only to the extent that the citizenry is
informed and thus able to formulate its will intelligently. Only when
the participants in the discussion are aware of the issues and have
access to information relating thereto can such bear fruit.
The right to information is an essential premise of a meaningful
right to speech and expression. But this is not to say that the right
to information is merely an adjunct of and therefore restricted in
application by the exercise of the freedoms of speech and of the
press. Far from it. The right to information goes hand-in-hand with

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An informed citizenry with access to the diverse currents in

political, moral and artistic thought and data relative to them, and
the free exchange of ideas and discussion of issues thereon, is vital
to the democratic government envisioned under our Constitution.
The cornerstone of this republican system of government is
delegation of power by the people to the State. In this system,
governmental agencies and institutions operate within the limits of
the authority conferred by the people. Denied access to information
on the inner workings of government, the citizenry can become
prey to the whims and caprices of those to whom the power had
been delegated. The postulate of public office as a public trust,
institutionalized in the Constitution (in Art. XI, Sec. 1) to protect the
people from abuse of governmental power, would certainly be were
empty words if access to such information of public concern is
denied, except under limitations prescribed by implementing
legislation adopted pursuant to the Constitution.

the constitutional policies of full public disclosure * and honesty in

the public service. ** It is meant to enhance the widening role of
the citizenry in governmental decision-making as well as in
checking abuse in government.
Yet, like all the constitutional guarantees, the right to information is
not absolute. As stated in Legaspi, the people's right to information
is limited to "matters of public concern," and is further "subject to
such limitations as may be provided by law." Similarly, the State's
policy of full disclosure is limited to "transactions involving public
interest," and is "subject to reasonable conditions prescribed by
law."
Hence, before mandamus may issue, it must be clear that the
information sought is of "public interest" or "public concern," and is
not exempted by law from the operation of the constitutional
guarantee [Legazpi v. Civil Service Commission, supra, at p. 542.]
The Court has always grappled with the meanings of the terms
"public interest" and "public concern". As observed in Legazpi:
In determining whether or not a particular
information is of public concern there is no rigid test
which can be applied. "Public concern" like "public
interest" is a term that eludes exact definition. Both
terms embrace a broad spectrum of subjects which
the public may want to know, either because these
directly affect their lives, or simply because such
matters naturally arouse the interest of an ordinary
citezen. In the final analysis, it is for the courts to
determine on a case by case basis whether the
matter at issue is of interest or importance, as it
relates to or affects the public. [Ibid. at p. 541]
In the Taada case the public concern deemed covered by the
constitutional right to information was the need for adequate notice
to the public of the various laws which are to regulate the actions
and conduct of citezens. In Legaspi, it was the "legitimate concern
of citezensof ensure that government positions requiring civil

The information sought by petitioners in this case is the truth of

reports that certain Members of the Batasang Pambansa belonging
to the opposition were able to secure "clean" loans from the GSIS
immediately before the February 7, 1986 election through the
intercession of th eformer First Lady, Mrs. Imelda Marcos.
The GSIS is a trustee of contributions from the government and its
employees and the administrator of various insurance programs for
the benefit of the latter. Undeniably, its funds assume a public
character. More particularly, Secs. 5(b) and 46 of P.D. 1146, as
amended (the Revised Government Service Insurance Act of 1977),
provide for annual appropriations to pay the contributions,
premiums, interest and other amounts payable to GSIS by the
government, as employer, as well as the obligations which the
Republic of the Philippines assumes or guarantees to pay.
Considering the nature of its funds, the GSIS is expected to manage
its resources with utmost prudence and in strict compliance with
the pertinent laws or rules and regulations. Thus, one of the
reasons that prompted the revision of the old GSIS law (C.A. No.
186, as amended) was the necessity "to preserve at all times the
actuarial solvency of the funds administered by the System"
[Second Whereas Clause, P.D. No. 1146.] Consequently, as
respondent himself admits, the GSIS "is not supposed to grant
'clean loans.'" [Comment, p. 8.] It is therefore the legitimate
concern of the public to ensure that these funds are managed
properly with the end in view of maximizing the benefits that
accrue to the insured government employees. Moreover, the
supposed borrowers were Members of the defunct Batasang
Pambansa who themselves appropriated funds for the GSIS and
were therefore expected to be the first to see to it that the GSIS
performed its tasks with the greatest degree of fidelity and that an
its transactions were above board.
In sum, the public nature of the loanable funds of the GSIS and the
public office held by the alleged borrowers make the information
sought clearly a matter of public interest and concern.

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Page

service eligibility are occupied only by persons who are eligibles"

[Supra at p. 539.]

A second requisite must be met before the right to information may

be enforced through mandamus proceedings, viz., that the
information sought must not be among those excluded by law.
Respondent maintains that a confidential relationship exists
between the GSIS and its borrowers. It is argued that a policy of
confidentiality restricts the indiscriminate dissemination of
information.
Yet, respondent has failed to cite any law granting the GSIS the
privilege of confidentiality as regards the documents subject of this
petition. His position is apparently based merely on considerations
of policy. The judiciary does not settle policy issues. The Court can
only declare what the law is, and not what the law should be. Under
our system of government, policy issues are within the domain of
the political branches of the government, and of the people
themselves as the repository of all State power.
Respondent however contends that in view of the right to privacy
which is equally protected by the Constitution and by existing laws,
the documents evidencing loan transactions of the GSIS must be
deemed outside the ambit of the right to information.
There can be no doubt that right to privacy is constitutionally
protected. In the landmark case of Morfe v. Mutuc [130 Phil. 415
(1968), 22 SCRA 424], this Court, speaking through then Mr. Justice
Fernando, stated:
... The right to privacy as such is accorded
recognition independently of its identification with
liberty; in itself, it is fully deserving of constitutional
protection. The language of Prof. Emerson is
particularly apt: "The concept of limited government
has always included the idea that governmental
powers stop short of certain intrusions into the
personal life of the citizen. This is indeed one of the
basic distinctions between absolute and limited
government. UItimate and pervasive control of the
individual, in all aspects of his life, is the hallmark of

When the information requested from the government intrudes into

the privacy of a citizen, a potential conflict between the rights to
information and to privacy may arise. However, the competing
interests of these rights need not be resolved in this case. Apparent
from the above-quoted statement of the Court in Morfe is that the
right to privacy belongs to the individual in his private capacity,
and not to public and governmental agencies like the GSIS.
Moreover, the right cannot be invoked by juridical entities like the
GSIS. As held in the case of Vassar College v. Loose Wills Biscuit
Co. [197 F. 982 (1912)], a corporation has no right of privacy in its
name since the entire basis of the right to privacy is an injury to the
feelings and sensibilities of the party and a corporation would have
no such ground for relief.
Neither can the GSIS through its General Manager, the respondent,
invoke the right to privacy of its borrowers. The right is purely
personal in nature [Cf. Atkinson v. John Doherty & Co., 121 Mich
372, 80 N.W. 285, 46 L.RA. 219 (1899); Schuyler v. Curtis, 147 N.Y.
434, 42 N.E. 22, 31 L.R.A. 286 (1895)), and hence may be invoked
only by the person whose privacy is claimed to be violated.
It may be observed, however, that in the instant case, the
concerned borrowers themselves may not succeed if they choose

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the absolute. state, In contrast, a system of limited

government safeguards a private sector, which
belongs to the individual, firmly distinguishing it from
the public sector, which the state can control.
Protection of this private sector protection, in
other words, of the dignity and integrity of the
individual has become increasingly important as
modem society has developed. All the forces of
technological age industrialization, urbanization,
and organization operate to narrow the area of
privacy and facilitate intrusion into it. In modern
terms, the capacity to maintain and support this
enclave of private life marks the difference between
a democratic and a totalitarian society." [at pp. 444445.]

to invoke their right to privacy, considering the public offices they

were holding at the time the loans were alleged to have been
granted. It cannot be denied that because of the interest they
generate and their newsworthiness, public figures, most especially
those holding responsible positions in government, enjoy a more
limited right to privacy as compared to ordinary individuals, their
actions being subject to closer public scrutiny [Cf. Ayer Productions
Pty. Ltd. v. Capulong, G.R. Nos. 82380 and 82398, April 29,
1988; See also Cohen v. Marx, 211 P. 2d 321 (1949).]
Respondent next asserts that the documents evidencing the loan
transactions of the GSIS are private in nature and hence, are not
covered by the Constitutional right to information on matters of
public concern which guarantees "(a)ccess to official records, and
to documents, and papers pertaining to official acts, transactions,
or decisions" only.
It is argued that the records of the GSIS, a government corporation
performing proprietary functions, are outside the coverage of the
people's right of access to official records.
It is further contended that since the loan function of the GSIS is
merely incidental to its insurance function, then its loan
transactions are not covered by the constitutional policy of full
public disclosure and the right to information which is applicable
only to "official" transactions.
First of all, the "constituent ministrant" dichotomy characterizing
government function has long been repudiated. In ACCFA v.
Confederation of Unions and Government Corporations and
Offices (G.R. Nos. L-21484 and L-23605, November 29, 1969, 30
SCRA 6441, the Court said that the government, whether carrying
out its sovereign attributes or running some business, discharges
the same function of service to the people.
Consequently, that the GSIS, in granting the loans, was exercising a
proprietary function would not justify the exclusion of the
transactions from the coverage and scope of the right to
information.

xxx xxx xxx

THE PRESIDING OFFICER (Mr. Colayco).

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Moreover, the intent of the members of the Constitutional

Commission of 1986, to include government-owned and controlled
corporations and transactions entered into by them within the
coverage of the State policy of fun public disclosure is manifest
from the records of the proceedings:

distinguished from
contracts, agreements,
or treaties or whatever,
does the Gentleman
refer to the steps
leading to the
consummation of the
contract, or does he
refer to the contract
itself?

Commissioner Suarez is recognized.

MR. SUAREZ. Thank you. May I ask the Gentleman a
few question?
MR. OPLE. Very gladly.
MR. SUAREZ. Thank you.
When we declare a "policy of full public
disclosure of all its transactions"
referring to the transactions of the
State and when we say the "State"
which I suppose would include all of
the various agencies, departments,
ministries and instrumentalities of the
government....
MR. OPLE. Yes, and individual public officers, Mr.
Presiding Officer.
MR. SUAREZ. Including government-owned and
controlled corporations.
MR. OPLE. That is correct, Mr. Presiding Officer.
MR. SUAREZ. And when
we say "transactions"
which should be

MR. OPLE. The

"transactions" used here
I suppose is generic and,
therefore, it can cover
both steps leading to a
contract, and already a
consummated contract,
Mr. Presiding Officer.
MR. SUAREZ. This
contemplates inclusion
of negotiations leading
to the consummation of
the transaction.
MR. OPLE. Yes, subject
only to reasonable
safeguards on the
national interest.
MR. SUAREZ. Thank you.
[V Record of the
Constitutional
Commission 24-25.]
(Emphasis supplied.)
Considering the intent of the framers of the Constitution which,
though not binding upon the Court, are nevertheless persuasive,

In fine, petitioners are entitled to access to the documents

evidencing loans granted by the GSIS, subject to reasonable
regulations that the latter may promulgate relating to the manner
and hours of examination, to the end that damage to or loss of the
records may be avoided, that undue interference with the duties of
the custodian of the records may be prevented and that the right of
other persons entitled to inspect the records may be insured
[Legaspi v. Civil Service Commission, supra at p. 538, quoting
Subido v. Ozaeta, 80 Phil. 383, 387.] The petition, as to the second
and third alternative acts sought to be done by petitioners, is
meritorious.
However, the same cannot be said with regard to the first act
sought by petitioners, i.e., "to furnish petitioners the list of the
names of the Batasang Pambansa members belonging to the
UNIDO and PDP-Laban who were able to secure clean loans
immediately before the February 7 election thru the
intercession/marginal note of the then First Lady Imelda Marcos."
Although citizens are afforded the right to information and,
pursuant thereto, are entitled to "access to official records," the
Constitution does not accord them a right to compel custodians of
official records to prepare lists, abstracts, summaries and the like in
their desire to acquire information on matters of public concern.
It must be stressed that it is essential for a writ of mandamus to
issue that the applicant has a well-defined, clear and certain legal
right to the thing demanded and that it is the imperative duty of
defendant to perform the act required. The corresponding duty of
the respondent to perform the required act must be clear and
specific [Lemi v. Valencia, G.R. No. L-20768, November 29,1968,126

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and considering further that government-owned and controlled

corporations, whether performing proprietary or governmental
functions are accountable to the people, the Court is convinced that
transactions entered into by the GSIS, a government-controlled
corporation created by special legislation are within the ambit of
the people's right to be informed pursuant to the constitutional
policy of transparency in government dealings.

SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August 27, 1976,
72 SCRA 443.] The request of the petitioners fails to meet this
standard, there being no duty on the part of respondent to prepare
the list requested.
WHEREFORE, the instant petition is hereby granted and respondent
General Manager of the Government Service Insurance System is
ORDERED to allow petitioners access to documents and records
evidencing loans granted to Members of the former Batasang
Pambansa, as petitioners may specify, subject to reasonable
regulations as to the time and manner of inspection, not
incompatible with this decision, as the GSIS may deem necessary.
SO ORDERED.

EN BANC
G.R. No. 82380 April 29, 1988
AYER PRODUCTIONS PTY. LTD. and McELROY & McELROY
FILM PRODUCTIONS, petitioners,
vs.
HON.IGNACIO M. CAPULONG and JUAN PONCE
ENRILE, respondents.
G.R. No. 82398 April 29, 1988
HAL MCELROY petitioner,
vs.
HON. IGNACIO M. CAPULONG, in his capacity as Presiding
Judge of the Regional Trial Court of Makati, Branch 134 and
JUAN PONCE ENRILE, respondents.

FELICIANO, J.:
Petitioner Hal McElroy an Australian film maker, and his movie
production company, Petitioner Ayer Productions pty Ltd. (Ayer
Productions), 1 envisioned, sometime in 1987, the for commercial
viewing and for Philippine and international release, the histolic
peaceful struggle of the Filipinos at EDSA (Epifanio de los Santos
Avenue). Petitioners discussed this Project with local movie
producer Lope V. Juban who suggested th they consult with the
appropriate government agencies and also with General Fidel V.
Ramos and Senator Juan Ponce Enrile, who had played major roles
in the events proposed to be filmed.
The proposed motion picture entitled "The Four Day Revolution"
was endorsed by the Movie Television Review and Classification

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Republic of the Philippines

SUPREME COURT
Manila

Board as wel as the other government agencies consulted. General

Fidel Ramos also signified his approval of the intended film
production.
In a letter dated 16 December 1987, petitioner Hal McElroy
informed private respondent Juan Ponce Enrile about the projected
motion picture enclosing a synopsis of it, the full text of which is set
out below:
The Four Day Revolution is a six hour mini-series
about People Powera unique event in modern
history that-made possible the Peaceful revolution in
the Philippines in 1986.
Faced with the task of dramatising these rerkble
events, screenwriter David Williamson and history
Prof Al McCoy have chosen a "docu-drama" style and
created [four] fictitious characters to trace the
revolution from the death of Senator Aquino, to the
Feb revolution and the fleeing of Marcos from the
country.
These character stories have been woven through
the real events to help our huge international
audience understand this ordinary period inFilipino
history.
First, there's Tony O'Neil, an American television
journalist working for major network. Tony reflects
the average American attitude to the Phihppinence
once a colony, now the home of crucially important
military bases. Although Tony is aware of the
corruption and of Marcos' megalomania, for him,
there appears to be no alternative to Marcos except
the Communists.
Next, Angie Fox a fiery Australian photo-journalist. A
'new girl in town,' she is quickly caught up in the
events as it becomes dear that the time has come for

The fourth fictitious character is Ben Balano, a

middle-aged editor of a Manila newspaper who
despises the Marcos regime and is a supporter an
promoter of Cory Aquino. Ben has two daughters,
Cehea left wing lawyer who is a secret member of
the New People's Army, and Eva--a -P.R. girl,
politically moderate and very much in love with Tony.
Ultimately, she must choose between her love and
the revolution.
Through the interviews and experiences of these
central characters, we show the complex nature of
Filipino society, and thintertwining series of events
and characters that triggered these remarkable
changes. Through them also, we meet all of the
principal characters and experience directly dramatic
recreation of the revolution. The story incorporates
actual documentary footage filmed during the period
which we hope will capture the unique atmosphere
and forces that combined to overthrow President
Marcos.
David Williamson is Australia's leading playwright
with some 14 hugely successful plays to his
credit(Don's Party,' 'The Club,' Travelling North) and
11 feature films (The Year of Living Dangerously,'
Gallipoli,' 'Phar Lap').
Professor McCoy (University of New South Wales) is
an American historian with a deep understanding of
the Philippines, who has worked on the research for
this project for some 18 months. Together with Davi

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a change. Through Angle and her relationship with

one of the Reform Army Movement Colonels (a
fictitious character), we follow the developing
discontent in the armed forces. Their dislike for
General Ver, their strong loyalty to Defense Minister
Enrile, and ultimately their defection from Marcos.

Wilhamgon they have developed a script we believe

accurately depicts the complex issues and events
that occurred during th period .
The six hour series is a McElroy and McElroy coproduction with Home Box Office in American, the
Australian Broadcast Corporation in Australia and
Zenith Productions in the United Kingdom
The proposed motion picture would be essentially a re-enact. ment
of the events that made possible the EDSA revolution; it is
designed to be viewed in a six-hour mini-series television play,
presented in a "docu-drama" style, creating four (4) fictional
characters interwoven with real events, and utilizing actual
documentary footage as background.
On 21 December 1987, private respondent Enrile replied that "[he]
would not and will not approve of the use, appropriation,
reproduction and/or exhibition of his name, or picture, or that of
any member of his family in any cinema or television production,
film or other medium for advertising or commercial exploitation"
and further advised petitioners that 'in the production, airing,
showing, distribution or exhibition of said or similar film, no
reference whatsoever (whether written, verbal or visual) should not
be made to [him] or any member of his family, much less to any
matter purely personal to them.
It appears that petitioners acceded to this demand and the name of
private respondent Enrile was deleted from the movie script, and
petitioners proceeded to film the projected motion picture.
On 23 February 1988, private respondent filed a Complaint with
application for Temporary Restraining Order and Wilt of Pretion with
the Regional Trial Court of Makati, docketed as Civil Case No. 88151 in Branch 134 thereof, seeking to enjoin petitioners from
producing the movie "The Four Day Revolution". The complaint
alleged that petitioners' production of the mini-series without
private respondent's consent and over his objection, constitutes an
obvious violation of his right of privacy. On 24 February 1988, the

On 9 March 1988, Hal McElroy flied a Motion to Dismiss with

Opposition to the Petition for Preliminary Injunction contending that
the mini-series fim would not involve the private life of Juan Ponce
Enrile nor that of his family and that a preliminary injunction would
amount to a prior restraint on their right of free expression.
Petitioner Ayer Productions also filed its own Motion to Dismiss
alleging lack of cause of action as the mini-series had not yet been
completed.
In an Order 2 dated 16 March 1988, respondent court issued a writ
of Preliminary Injunction against the petitioners, the dispositive
portion of which reads thus:
WHEREFORE, let a writ of preliminary injunction be
issued, ordering defendants, and all persons and
entities employed or under contract with them,
including actors, actresses and members of the
production staff and crew as well as all persons and
entities acting on defendants' behalf, to cease and
desist from producing and filming the mini-series
entitled 'The Four Day Revolution" and from making
any reference whatsoever to plaintiff or his family
and from creating any fictitious character in lieu of
plaintiff which nevertheless is based on, or bears
rent substantial or marked resemblance or similarity
to, or is otherwise Identifiable with, plaintiff in the
production and any similar film or photoplay, until
further orders from this Court, upon plaintiff's filing of
a bond in the amount of P 2,000,000.00, to answer
for whatever damages defendants may suffer by
reason of the injunction if the Court should finally
decide that plaintiff was not entitled thereto.
xxx xxx xxx
(Emphasis supplied)

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Page

trial court issued ex-parte a Temporary Restraining Order and set

for hearing the application for preliminary injunction.

On 22 March 1988, petitioner Ayer Productions came to this Court

by a Petition for certiorari dated 21 March 1988 with an urgent
prayer for Preliminary Injunction or Restraining Order, which
petition was docketed as G.R. No. L-82380.
A day later, or on 23 March 1988, petitiioner Hal McElroy also filed
separate Petition for certiorari with Urgent Prayer for a Restraining
Order or Preliminary Injunction, dated 22 March 1988, docketed as
G.R. No. L-82398.
By a Resolution dated 24 March 1988, the petitions were
consolidated and private respondent was required to file a
consolidated Answer. Further, in the same Resolution, the Court
granted a Temporary Restraining Order partially enjoining the
implementation of the respondent Judge's Order of 16 March 1988
and the Writ of Preliminary Injunction issued therein, and allowing
the petitioners to resume producing and filming those portions of
the projected mini-series which do not make any reference to
private respondent or his family or to any fictitious character based
on or respondent.
Private respondent seasonably filed his Consolidated Answer on 6
April 1988 invoking in the main a right of privacy.
I
The constitutional and legal issues raised by the present Petitions
are sharply drawn. Petitioners' claim that in producing and "The
Four Day Revolution," they are exercising their freedom of speech
and of expression protected under our Constitution. Private
respondent, upon the other hand, asserts a right of privacy and
claims that the production and filming of the projected mini-series
would constitute an unlawful intrusion into his privacy which he is
entitled to enjoy.
Considering first petitioners' claim to freedom of speech and of
expression the Court would once more stress that this freedom
includes the freedom to film and produce motion pictures and to
exhibit such motion pictures in theaters or to diffuse them through

1. Motion pictures are important both as a medium

for the communication of Ideas and the expression of
the artistic impulse. Their effect on the perception by
our people of issues and public officials or public
figures as well as the pre cultural traits is
considerable. Nor as pointed out in Burstyn v.
Wilson (343 US 495 [19421) is the Importance of
motion pictures as an organ of public opinion
lessened by the fact that they are designed to
entertain as well as to inform' (Ibid, 501). There is no
clear dividing line between what involves knowledge
and what affords pleasure. If such a distinction were
sustained, there is a diminution of the basic right to
free expression. ... 4
This freedom is available in our country both to locally-owned and
to foreign-owned motion picture companies. Furthermore the
circumstance that the production of motion picture films is a
commercial activity expected to yield monetary profit, is not a
disqualification for availing of freedom of speech and of expression.
In our community as in many other countries, media facilities are
owned either by the government or the private sector but the
private sector-owned media facilities commonly require to be
sustained by being devoted in whole or in pailt to revenue
producing activities. Indeed, commercial media constitute the bulk
of such facilities available in our country and hence to exclude
commercially owned and operated media from the exerciseof
constitutionally protected om of speech and of expression can only
result in the drastic contraction of such constitutional liberties in
our country.

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television. In our day and age, motion pictures are a univesally

utilized vehicle of communication and medium Of expression. Along
with the press, radio and television, motion pictures constitute a
principal medium of mass communication for information,
education and entertainment. In Gonzales v. Katigbak, 3 former
Chief Justice Fernando, speaking for the Court, explained:

The counter-balancing of private respondent is to a right of privacy.

It was demonstrated sometime ago by the then Dean Irene R.
Cortes that our law, constitutional and statutory, does include a
right of privacy. 5 It is left to case law, however, to mark out the
precise scope and content of this right in differing types of
particular situations. The right of privacy or "the right to be let
alone," 6 like the right of free expression, is not an absolute right. A
limited intrusion into a person's privacy has long been regarded as
permissible where that person is a public figure and the information
sought to be elicited from him or to be published about him
constitute of apublic character. 7 Succinctly put, the right of privacy
cannot be invoked resist publication and dissemination of matters
of public interest. 8 The interest sought to be protected by the right
of privacy is the right to be free from unwarranted publicity, from
the wrongful publicizing of the private affairs and activities of an
individual which are outside the realm of legitimate public
concern. 9
Lagunzad v. Vda. de Gonzales, 10 on which private respondent relies
heavily, recognized a right to privacy in a context which included a
claim to freedom of speech and of expression. Lagunzad involved a
suit fortion picture producer as licensee and the widow and family
of the late Moises Padilla as licensors. This agreement gave the
licensee the right to produce a motion Picture Portraying the life of
Moises Padilla, a mayoralty candidate of the Nacionalista Party for
the Municipality of Magallon, Negros Occidental during the
November 1951 elections and for whose murder, Governor Rafael
Lacson, a member of the Liberal Party then in power and his men
were tried and convicted. 11 In the judgment of the lower court
enforcing the licensing agreement against the licensee who had
produced the motion picture and exhibited it but refused to pay the
stipulated royalties, the Court, through Justice Melencio-Herrera,
said:
Neither do we agree with petitioner's subon that the
Licensing Agreement is null and void for lack of, or
for having an illegal cause or consideration, while it is
true that petitioner bad pled the rights to the book
entitled "The Moises Padilla Story," that did not

Petitioners averment that private respondent did not

have any property right over the life of Moises Padilla
since the latter was a public figure, is neither well
taken. Being a public figure ipso facto does not
automatically destroy in toto a person's right to
privacy. The right to invade a person's privacy to
disseminate public information does not extend to a
fictional or novelized representation of a person, no
matter how public a he or she may be (Garner v.
Triangle Publications, DCNY 97 F. Supp., SU 549
[1951]). In the case at bar, while it is true that
petitioner exerted efforts to present a true-to-life
Story Of Moises Padilla, petitioner admits that he
included a little romance in the film because without
it, it would be a drab story of torture and brutality. 12
In Lagunzad, the Court had need, as we have in the instant case, to
deal with contraposed claims to freedom of speech and of
expression and to privacy. Lagunzad the licensee in effect claimed,
in the name of freedom of speech and expression, a right to
produce a motion picture biography at least partly "fictionalized" of
Moises Padilla without the consent of and without paying preagreed royalties to the widow and family of Padilla. In rejecting the
licensee's claim, the Court said:
Lastly, neither do we find merit in petitioners
contention that the Licensing Agreement infringes on

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dispense with the need for prior consent and

authority from the deceased heirs to portray publicly
episodes in said deceased's life and in that of his
mother and the member of his family. As held in
Schuyler v. Curtis, ([1895],147 NY 434,42 NE 31 LRA
286.49 Am St Rep 671), 'a privilege may be given the
surviving relatives of a deperson to protect his
memory, but the privilege wts for the benefit of the
living, to protect their feelings and to preventa
violation of their own rights in the character and
memory of the deceased.'

the constitutional right of freedom of speech and of

the press, in that, as a citizen and as a
newspaperman, he had the right to express his
thoughts in film on the public life of Moises Padilla
without prior restraint.The right freedom of
expression, indeed, occupies a preferred position in
the "hierarchy of civil liberties" (Philippine Blooming
Mills Employees Organization v. Philippine Blooming
Mills Co., Inc., 51 SCRA 191 [1963]). It is not,
however, without limitations. As held in Gonzales v.
Commission on Elections, 27 SCRA 835, 858 [1960]:
xxx xxx xxx
The prevailing doctine is that the clear and present
danger rule is such a limitation. Another criterion for
permissible limitation on freedom of speech and the
press, which includes such vehicles of the mass
media as radio, television and the movies, is the
"balancing of interest test" (Chief Justice Enrique M.
Fernando on the Bill of Rights, 1970 ed. p. 79). The
principle "requires a court to take conscious and
detailed consideration of the interplay of interests
observable in given situation or type of situation"
(Separation Opinion of the late Chief Justice Castro in
Gonzales v. Commission on Elections, supra, p. 899).
In the case at bar, the interests observable are the
right to privacy asserted by respondent and the right
of freedom of expression invoked by petitioner.
taking into account the interplay of those interests,
we hold that under the particular circumstances
presented, and considering the obligations assumed
in the Licensing Agreement entered into by
petitioner, the validity of such agreement will have to
be upheld particularly because the limits of freedom
of expression are reached when expression touches
upon matters of essentially private concern." 13

1. It may be observed at the outset that what is involved in the

instant case is a prior and direct restraint on the part of the
respondent Judge upon the exercise of speech and of expression by
petitioners. The respondent Judge has restrained petitioners from
filming and producing the entire proposed motion picture. It is
important to note that in Lagunzad, there was no prior restrain of
any kind imposed upon the movie producer who in fact completed
and exhibited the film biography of Moises Padilla. Because of the
speech and of expression, a weighty presumption of invalidity
vitiates. 14 The invalidity of a measure of prior restraint doesnot, of
course, mean that no subsequent liability may lawfully be imposed
upon a person claiming to exercise such constitutional freedoms.
The respondent Judge should have stayed his hand, instead of
issuing an ex-parte Temporary Restraining Order one day after filing
of a complaint by the private respondent and issuing a Preliminary
Injunction twenty (20) days later; for the projected motion picture
was as yet uncompleted and hence not exhibited to any audience.
Neither private respondent nor the respondent trial Judge knew
what the completed film would precisely look like. There was, in
other words, no "clear and present danger" of any violation of any
right to privacy that private respondent could lawfully assert.
2. The subject matter of "The Four Day Revolution" relates to the
non-bloody change of government that took place at Epifanio de los
Santos Avenue in February 1986, and the trian of events which led
up to that denouement. Clearly, such subject matter is one of
public interest and concern. Indeed, it is, petitioners' argue, of
international interest. The subject thus relates to a highly critical
stage in the history of this countryand as such, must be regarded
as having passed into the public domain and as an appropriate
subject for speech and expression and coverage by any form of

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Whether the "balancing of interests test" or the clear and present

danger test" be applied in respect of the instant Petitions, the Court
believes that a different conclusion must here be reached: The
production and filming by petitioners of the projected motion
picture "The Four Day Revolution" does not, in the circumstances of
this case, constitute an unlawful intrusion upon private
respondent's "right of privacy."

mass media. The subject mater, as set out in the synopsis provided
by the petitioners and quoted above, does not relate to the
individual life and certainly not to the private life of private
respondent Ponce Enrile. Unlike in Lagunzad, which concerned the
life story of Moises Padilla necessarily including at least his
immediate family, what we have here is not a film biography, more
or less fictionalized, of private respondent Ponce Enrile. "The Four
Day Revolution" is not principally about, nor is it focused upon, the
man Juan Ponce Enrile' but it is compelled, if it is to be historical, to
refer to the role played by Juan Ponce Enrile in the precipitating and
the constituent events of the change of government in February
1986.
3. The extent of the instrusion upon the life of private respondent
Juan Ponce Enrile that would be entailed by the production and
exhibition of "The Four Day Revolution" would, therefore, be limited
in character. The extent of that intrusion, as this Court understands
the synopsis of the proposed film, may be generally described as
such intrusion as is reasonably necessary to keep that film a
truthful historical account. Private respondent does not claim that
petitioners threatened to depict in "The Four Day Revolution" any
part of the private life of private respondent or that of any member
of his family.
4. At all relevant times, during which the momentous events,
clearly of public concern, that petitioners propose to film were
taking place, private respondent was what Profs. Prosser and
Keeton have referred to as a "public figure:"
A public figure has been defined as a person who, by
his accomplishments, fame, or mode of living, or by
adopting a profession or calling which gives the
public a legitimate interest in his doings, his affairs,
and his character, has become a 'public personage.'
He is, in other words, a celebrity. Obviously to be
included in this category are those who have
achieved some degree of reputation by appearing
before the public, as in the case of an actor, a
professional baseball player, a pugilist, or any other

Such public figures were held to have lost, to some

extent at least, their tight to privacy. Three reasons
were given, more or less indiscrimately, in the
decisions" that they had sought publicity and
consented to it, and so could not complaint when
they received it; that their personalities and their
affairs has already public, and could no longer be
regarded as their own private business; and that the
press had a privilege, under the Constitution, to
inform the public about those who have become
legitimate matters of public interest. On one or
another of these grounds, and sometimes all, it was
held that there was no liability when they were given
additional publicity, as to matters legitimately within
the scope of the public interest they had aroused.
The privilege of giving publicity to news, and other
matters of public interest, was held to arise out of
the desire and the right of the public to know what is
going on in the world, and the freedom of the press
and other agencies of information to tell it. "News"
includes all events and items of information which
are out of the ordinary hum-drum routine, and which
have 'that indefinable quality of information which
arouses public attention.' To a very great extent the
press, with its experience or instinct as to what its
readers will want, has succeeded in making its own
definination of news, as a glance at any morning
newspaper will sufficiently indicate. It includes
homicide and othe crimes, arrests and police raides,
suicides, marriages and divorces, accidents, a death

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entertainment. The list is, however, broader than

this. It includes public officers, famous inventors and
explorers, war heroes and even ordinary soldiers, an
infant prodigy, and no less a personage than the
Grand Exalted Ruler of a lodge. It includes, in short,
anyone who has arrived at a position where public
attention is focused upon him as a person.

from the use of narcotics, a woman with a rare

disease, the birth of a child to a twelve year old girl,
the reappearance of one supposed to have been
murdered years ago, and undoubtedly many other
similar matters of genuine, if more or less deplorable,
popular appeal.
The privilege of enlightening the public was not,
however, limited, to the dissemination of news in the
scene of current events. It extended also to
information or education, or even entertainment and
amusement, by books, articles, pictures, films and
broadcasts concerning interesting phases of human
activity in general, as well as the reproduction of the
public scene in newsreels and travelogues. In
determining where to draw the line, the courts were
invited to exercise a species of censorship over what
the public may be permitted to read; and they were
understandably liberal in allowing the benefit of the
doubt. 15
Private respondent is a "public figure" precisely because, inter alia,
of his participation as a principal actor in the culminating events of
the change of government in February 1986. Because his
participation therein was major in character, a film reenactment of
the peaceful revolution that fails to make reference to the role
played by private respondent would be grossly unhistorical. The
right of privacy of a "public figure" is necessarily narrower than that
of an ordinary citizen. Private respondent has not retired into the
seclusion of simple private citizenship. he continues to be a "public
figure." After a successful political campaign during which his
participation in the EDSA Revolution was directly or indirectly
referred to in the press, radio and television, he sits in a very public
place, the Senate of the Philippines.
5. The line of equilibrium in the specific context of the instant case
between the constitutional freedom of speech and of expression
and the right of privacy, may be marked out in terms of a
requirement that the proposed motion picture must be fairly

II
In a Manifestation dated 30 March 1988, petitioner Hal McElroy
informed this Court that a Temporary Restraining Order dated 25
March 1988, was issued by Judge Teofilo Guadiz of the Regional
Trial Court of Makati, Branch 147, in Civil Case No. 88-413, entitled
"Gregorio B. Honasan vs. Ayer Productions Pty. Ltd., McElroy Film
Productions, Hal McElroy, Lope Juban and PMP Motion for Pictures
Production" enjoining him and his production company from further
filimg any scene of the projected mini-series film. Petitioner alleged
that Honasan's complaint was a "scissors and paste" pleading, cut
out straight grom the complaint of private respondent Ponce Enrile
in Civil Case No. 88-151. Petitioner Ayer Productions, in a separate
Manifestation dated 4 April 1988, brought to the attention of the
Court the same information given by petitoner Hal McElroy,
reiterating that the complaint of Gregorio B. Honasan was
substantially identical to that filed by private respondent herein and
stating that in refusing to join Honasan in Civil Case No. 88-151,
counsel for private respondent, with whom counsel for Gregorio
Honasan are apparently associated, deliberately engaged in "forum
shopping."

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Page

truthful and historical in its presentation of events. There must, in

other words, be no knowing or reckless disregard of truth in
depicting the participation of private respondent in the EDSA
Revolution. 16 There must, further, be no presentation of the
private life of the unwilling private respondent and certainly no
revelation of intimate or embarrassing personal facts. 17 The
proposed motion picture should not enter into what Mme. Justice
Melencio-Herrera in Lagunzad referred to as "matters of essentially
private concern." 18 To the extent that "The Four Day Revolution"
limits itself in portraying the participation of private respondent in
the EDSA Revolution to those events which are directly and
reasonably related to the public facts of the EDSA Revolution, the
intrusion into private respondent's privacy cannot be regarded as
unreasonable and actionable. Such portrayal may be carried out
even without a license from private respondent.

Private respondent filed a Counter-Manifestation on 13 April 1988

stating that the "slight similarity" between private respondent's
complaint and that on Honasan in the construction of their legal
basis of the right to privacy as a component of the cause of action
is understandable considering that court pleadings are public
records; that private respondent's cause of action for invasion of
privacy is separate and distinct from that of Honasan's although
they arose from the same tortious act of petitioners' that the rule
on permissive joinder of parties is not mandatory and that, the
cited cases on "forum shopping" were not in point because the
parties here and those in Civil Case No. 88-413 are not identical.
For reasons that by now have become clear, it is not necessary for
the Court to deal with the question of whether or not the lawyers of
private respondent Ponce Enrile have engaged in "forum shopping."
It is, however, important to dispose to the complaint filed by former
Colonel Honasan who, having refused to subject himself to the legal
processes of the Republic and having become once again in fugitive
from justice, must be deemed to have forfeited any right the might
have had to protect his privacy through court processes.
WHEREFORE,
a) the Petitions for Certiorari are GRANTED DUE COURSE, and the
Order dated 16 March 1988 of respondent trial court granting a Writ
of Preliminary Injunction is hereby SET ASIDE. The limited
Temporary Restraining Order granted by this Court on 24 March
1988 is hereby MODIFIED by enjoining unqualifiedly the
implementation of respondent Judge's Order of 16 March 1988 and
made PERMANENT, and
b) Treating the Manifestations of petitioners dated 30 March 1988
and 4 April 1988 as separate Petitions for Certiorari with Prayer for
Preliminary Injunction or Restraining Order, the Court, in the
exercise of its plenary and supervisory jurisdiction, hereby
REQUIRES Judge Teofilo Guadiz of the Regional Trial Court of Makati,
Branch 147, forthwith to DISMISS Civil Case No. 88-413 and
accordingly to SET ASIDE and DISSOLVE his Temporary Restraining

No pronouncement as to costs.
SO ORDERED.

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Page

Order dated 25 March 1988 and any Preliminary Injunction that

may have been issued by him.

SECOND DIVISION

77

city life yet near all facilities. Plans took shape when
they heard of BROOKSIDE HILLS. With thrift and
determination, they bought a lot and built their
dream house ... for P31,000. The Arcadios are now
part of the friendly, thriving community of
BROOKSIDE HILLS... a beautiful first-class subdivision
planned for wholesome family living.

Page

Republic of the Philippines

SUPREME COURT
Manila

G.R. No. L-46061 November 14, 1984

Romeo Z. Comia for petitioner.

The same advertisement appeared in the Sunday Times dated

January 5, 1969. Doctor Aramil a neuropsychiatrist and a member
of the faculty of the U. E. Ramon Magsaysay Memorial Hospital,
noticed the mistake. On that same date, he wrote St. Louis Realty
the following letter of protest:

Roman R. Bersamin for private respondent.

Dear Sirs:

ST. LOUIS REALTY CORPORATION, petitioner,

vs.
COURT OF APPEALS and CONRADO J. ARAMIL, respondents.

AQUINO, J.:
This case is about the recovery of damages for a wrongful
advertisement in the Sunday Times where Saint Louis Realty
Corporation misrepresented that the house of Doctor Conrado J.
Aramil belonged to Arcadio S. Arcadio.
St. Louis Realty caused to be published with the permission of
Arcadio S. Arcadio (but without permission of Doctor Aramil) in the
issue of the Sunday Times of December 15, 1968 an advertisement
with the heading "WHERE THE HEART IS". Below that heading was
the photograph of the residence of Doctor Aramil and the Arcadio
family and then below the photograph was the following write-up:
Home is where the heart is. And the hearts of MR.
AND MRS. ARCADIO S. ARCADIO and their family
have been captured by BROOKSIDE HILLS. They used
to rent a small 2-bedroom house in a cramped
neighborhood, sadly inadequate and unwholesome
for the needs of a large family. They dream(ed) of a
more pleasant place free from the din and dust of

This is anent to your advertisements appearing in the

December 15, 1968 and January 5, 1969 issues of
the Sunday Times which boldly depicted my house at
the above-mentioned address and implying that it
belonged to another person. I am not aware of
any permission or authority on my part for the use of
my house for such publicity.
This unauthorized use of my house for your
promotional gain and much more the apparent
distortions therein are I believe not only
transgression to my private property but also
damaging to my prestige in the medical profession I
have had invited in several occasions numerous
medical colleagues, medical students and friends to
my house and after reading your December 15
advertisement some of them have uttered some
remarks purporting doubts as to my professional and
personal integrity. Such sly remarks although in light
vein as "it looks like your house," "how much are you
renting from the Arcadios?", " like your wife
portrayed in the papers as belonging to another

I have referred this matter to the Legal Panel of the

Philippine Medical Association and their final advice
is pending upon my submission of supporting
ownership papers.
I will therefore be constrained to pursue court action
against your corporation unless you could
satisfactorily explain this matter within a week upon
receipt of this letter.
The letter was received by Ernesto Magtoto, an officer of St. Louis
Realty in charge of advertising. He stopped publication of the
advertisement. He contacted Doctor Aramil and offered his
apologies. However, no rectification or apology was published.
On February 20, 1969, Aramil's counsel demanded from St. Louis
Realty actual, moral and exemplary damages of P110,000 (Exh. D).
In its answer dated March 10, St. Louis Realty claimed that there
was an honest mistake and that if Aramil so desired, rectification
would be published in the Manila Times (Exh. 3).
It published in the issue of the Manila Times of March 18, 1969 a
new advertisement with the Arcadio family and their real house.
But it did not publish any apology to Doctor Aramil and an
explanation of the error.
On March 29, Aramil filed his complaint for damages. St. Louis
Realty published in the issue of the Manila Times of April 15, 1969
the following "NOTICE OF RECTIFICATION" in a space 4 by 3 inches:
This will serve as a notice that our print ad 'Where
the Heart is' which appeared in the Manila
Times issue of March 18, 1969 is a rectification of the
same ad that appeared in the Manila Times issues
rectification of the same ad that appeal of December
15, 1968 and January 5, 1969 wherein a photo of the

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Page

husband," etc., have resulted in no little mental

anguish on my part.

house of another Brookside Homeowner (Dr. Aramilprivate respondent) was mistakenly used as a
background for the featured homeowner's the
Arcadio family.
The ad of March 18, 1969 shows the Arcadio family
with their real house in the background, as was
intended all along.
Judge Jose M. Leuterio observed that St. Louis Realty should
have immediately published a rectification and apology. He found
that as a result of St. Louis Realty's mistake, magnified by its utter
lack of sincerity, Doctor Aramil suffered mental anguish and his
income was reduced by about P1,000 to P1,500 a month. Moreover,
there was violation of Aramil's right to privacy (Art. 26, Civil Code).
The trial court awarded Aramil P8,000 as actual damages, P20,000
as moral damages and P2,000 as attorney's fees. St. Louis Realty
appealed to the Court of Appeals.
The Appellate Court affirmed that judgment, with Acting Presiding
Justice Magno S. Gatmaitan as ponente, and Justices Sixto A.
Domondon and Samuel F. Reyes concurring.
The Appellate Court reasoned out that St. Louis Realty committed
an actionable quasi-delict under articles 21 and 26 of the Civil Code
because the questioned advertisements pictured a beautiful house
which did not belong to Arcadio but to Doctor Aramil who, naturally,
was annoyed by that contretemps.
In this appeal, St. Louis Realty contends that the Appellate Court
ignored certain facts and resorted to surmises and conjectures. This
contention is unwarranted. The Appellate Court adopted the facts
found by the trial court. Those factual findings are binding on this
Court.
St. Louis Realty also contends that the decision is contrary to law
and that the case was decided in a way not in conformity with the
rulings of this Court. It argues that the case is not covered by

The damages fixed by Judge Leuterio are sanctioned by Articles

2200, 2208 and 2219 of the Civil Code. Article 2219 allows moral
damages for acts and actions mentioned in Article 26. As lengthily
explained by Justice Gatmaitan, the acts and omissions of the firm
fan under Article 26.
St. Louis Realty's employee was grossly negligent in mixing up the
Aramil and Arcadio residences in a widely circulated publication like
the Sunday Times. To suit its purpose, it never made any written
apology and explanation of the mix-up. It just contented itself with
a cavalier "rectification ".
Persons, who know the residence of Doctor Aramil, were confused
by the distorted, lingering impression that he was renting his
residence from Arcadio or that Arcadio had leased it from him.
Either way, his private life was mistakenly and unnecessarily
exposed. He suffered diminution of income and mental anguish.
WHEREFORE, the judgment of the Appellate Court is affirmed. Costs
against the petitioner.
SO ORDERED.

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Page

article 26 which provides that "every person shall respect the

dignity, personality, privacy and peace of mind of his neighbors and
other persons". "Prying into the privacy of another's residence" and
"meddling with or disturbing the private life or family relations of
another" and "similar acts", "though they may not constitute a
criminal offense, shall produce a cause of action for damages,
prevention and other relief".

EN BANC
G.R. No. L-19671

November 29, 1965

PASTOR B. TENCHAVEZ, plaintiff-appellant,

vs.
VICENTA F. ESCAO, ET AL., defendants-appellees.
I. V. Binamira & F. B. Barria for plaintiff-appellant.
Jalandoni & Jarnir for defendants-appellees.
REYES, J.B.L., J.:
Direct appeal, on factual and legal questions, from the judgment of
the Court of First Instance of Cebu, in its Civil Case No. R-4177,
denying the claim of the plaintiff-appellant, Pastor B. Tenchavez, for
legal separation and one million pesos in damages against his wife
and parents-in-law, the defendants-appellees, Vicente, Mamerto
and Mena,1 all surnamed "Escao," respectively.2
The facts, supported by the evidence of record, are the following:
Missing her late afternoon classes on 24 February 1948 in the
University of San Carlos, Cebu City, where she was then enrolled as
a second year student of commerce, Vicenta Escao, 27 years of
age (scion of a well-to-do and socially prominent Filipino family of
Spanish ancestry and a "sheltered colegiala"), exchanged marriage
vows with Pastor Tenchavez, 32 years of age, an engineer, ex-army
officer and of undistinguished stock, without the knowledge of her
parents, before a Catholic chaplain, Lt. Moises Lavares, in the house
of one Juan Alburo in the said city. The marriage was the
culmination of a previous love affair and was duly registered with
the local civil register.

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Page

Republic of the Philippines

SUPREME COURT
Manila

Vicenta's letters to Pastor, and his to her, before the marriage,

indicate that the couple were deeply in love. Together with a friend,
Pacita Noel, their matchmaker and go-between, they had planned
out their marital future whereby Pacita would be the governess of
their first-born; they started saving money in a piggy bank. A few
weeks before their secret marriage, their engagement was broken;
Vicenta returned the engagement ring and accepted another suitor,
Joseling Lao. Her love for Pastor beckoned; she pleaded for his
return, and they reconciled. This time they planned to get married
and then elope. To facilitate the elopement, Vicenta had brought
some of her clothes to the room of Pacita Noel in St. Mary's Hall,
which was their usual trysting place.
Although planned for the midnight following their marriage, the
elopement did not, however, materialize because when Vicente
went back to her classes after the marriage, her mother, who got
wind of the intended nuptials, was already waiting for her at the
college. Vicenta was taken home where she admitted that she had
already married Pastor. Mamerto and Mena Escao were surprised,
because Pastor never asked for the hand of Vicente, and were
disgusted because of the great scandal that the clandestine
marriage would provoke (t.s.n., vol. III, pp. 1105-06). The following
morning, the Escao spouses sought priestly advice. Father Reynes
suggested a recelebration to validate what he believed to be an
invalid marriage, from the standpoint of the Church, due to the lack
of authority from the Archbishop or the parish priest for the
officiating chaplain to celebrate the marriage. The recelebration did
not take place, because on 26 February 1948 Mamerto Escao was
handed by a maid, whose name he claims he does not remember, a
letter purportedly coming from San Carlos college students and
disclosing an amorous relationship between Pastor Tenchavez and
Pacita Noel; Vicenta translated the letter to her father, and
thereafter would not agree to a new marriage. Vicenta and Pastor
met that day in the house of Mrs. Pilar Mendezona. Thereafter,
Vicenta continued living with her parents while Pastor returned to
his job in Manila. Her letter of 22 March 1948 (Exh. "M"), while still
solicitous of her husband's welfare, was not as endearing as her
previous letters when their love was aflame.

On 24 June 1950, without informing her husband, she applied for a

passport, indicating in her application that she was single, that her
purpose was to study, and she was domiciled in Cebu City, and that
she intended to return after two years. The application was
approved, and she left for the United States. On 22 August 1950,
she filed a verified complaint for divorce against the herein plaintiff
in the Second Judicial District Court of the State of Nevada in and
for the County of Washoe, on the ground of "extreme cruelty,
entirely mental in character." On 21 October 1950, a decree of
divorce, "final and absolute", was issued in open court by the said
tribunal.
In 1951 Mamerto and Mena Escao filed a petition with the
Archbishop of Cebu to annul their daughter's marriage to Pastor
(Exh. "D"). On 10 September 1954, Vicenta sought papal
dispensation of her marriage (Exh. "D"-2).
On 13 September 1954, Vicenta married an American, Russell Leo
Moran, in Nevada. She now lives with him in California, and, by him,
has begotten children. She acquired American citizenship on 8
August 1958.
But on 30 July 1955, Tenchavez had initiated the proceedings at bar
by a complaint in the Court of First Instance of Cebu, and amended
on 31 May 1956, against Vicenta F. Escao, her parents, Mamerto
and Mena Escao, whom he charged with having dissuaded and

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Vicenta was bred in Catholic ways but is of a changeable

disposition, and Pastor knew it. She fondly accepted her being
called a "jellyfish." She was not prevented by her parents from
communicating with Pastor (Exh. "1-Escao"), but her letters
became less frequent as the days passed. As of June, 1948 the
newlyweds were already estranged (Exh. "2-Escao"). Vicenta had
gone to Jimenez, Misamis Occidental, to escape from the scandal
that her marriage stirred in Cebu society. There, a lawyer filed for
her a petition, drafted by then Senator Emmanuel Pelaez, to annul
her marriage. She did not sign the petition (Exh. "B-5"). The case
was dismissed without prejudice because of her non-appearance at
the hearing (Exh. "B-4").

discouraged Vicenta from joining her husband, and alienating her

affections, and against the Roman Catholic Church, for having,
through its Diocesan Tribunal, decreed the annulment of the
marriage, and asked for legal separation and one million pesos in
damages. Vicenta claimed a valid divorce from plaintiff and an
equally valid marriage to her present husband, Russell Leo Moran;
while her parents denied that they had in any way influenced their
daughter's acts, and counterclaimed for moral damages.
The appealed judgment did not decree a legal separation, but freed
the plaintiff from supporting his wife and to acquire property to the
exclusion of his wife. It allowed the counterclaim of Mamerto
Escao and Mena Escao for moral and exemplary damages and
attorney's fees against the plaintiff-appellant, to the extent of
P45,000.00, and plaintiff resorted directly to this Court.
The appellant ascribes, as errors of the trial court, the following:
1. In not declaring legal separation; in not holding defendant
Vicenta F. Escao liable for damages and in dismissing the
complaint;.
2. In not holding the defendant parents Mamerto Escano and
the heirs of Doa Mena Escao liable for damages;.
3 In holding the plaintiff liable for and requiring him to pay
the damages to the defendant parents on their
counterclaims; and.
4. In dismissing the complaint and in denying the relief
sought by the plaintiff.
That on 24 February 1948 the plaintiff-appellant, Pastor Tenchavez,
and the defendant-appellee, Vicenta Escao, were validly married
to each other, from the standpoint of our civil law, is clearly
established by the record before us. Both parties were then above
the age of majority, and otherwise qualified; and both consented to
the marriage, which was performed by a Catholic priest (army
chaplain Lavares) in the presence of competent witnesses. It is

The chaplain's alleged lack of ecclesiastical authorization from the

parish priest and the Ordinary, as required by Canon law, is
irrelevant in our civil law, not only because of the separation of
Church and State but also because Act 3613 of the Philippine
Legislature (which was the marriage law in force at the time)
expressly provided that
SEC. 1. Essential requisites. Essential requisites for marriage
are the legal capacity of the contracting parties and
consent. (Emphasis supplied)
The actual authority of the solemnizing officer was thus only a
formal requirement, and, therefore, not essential to give the
marriage civil effects,3 and this is emphasized by section 27 of said
marriage act, which provided the following:
SEC. 27. Failure to comply with formal requirements. No
marriage shall be declared invalid because of the absence of
one or several of the formal requirements of this Act if, when
it was performed, the spouses or one of them believed in
good faith that the person who solemnized the marriage was
actually empowered to do so, and that the marriage was
perfectly legal.
The good faith of all the parties to the marriage (and hence the
validity of their marriage) will be presumed until the contrary is
positively proved (Lao vs. Dee Tim, 45 Phil. 739, 745; Francisco vs.
Jason, 60 Phil. 442, 448). It is well to note here that in the case at
bar, doubts as to the authority of the solemnizing priest arose only
after the marriage, when Vicenta's parents consulted Father Reynes
and the archbishop of Cebu. Moreover, the very act of Vicenta in
abandoning her original action for annulment and subsequently
suing for divorce implies an admission that her marriage to plaintiff
was valid and binding.

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Page

nowhere shown that said priest was not duly authorized under civil
law to solemnize marriages.

Defendant Vicenta Escao argues that when she contracted the

marriage she was under the undue influence of Pacita Noel, whom
she charges to have been in conspiracy with appellant Tenchavez.
Even granting, for argument's sake, the truth of that contention,
and assuming that Vicenta's consent was vitiated by fraud and
undue influence, such vices did not render her marriage ab
initio void, but merely voidable, and the marriage remained valid
until annulled by a competent civil court. This was never done, and
admittedly, Vicenta's suit for annulment in the Court of First
Instance of Misamis was dismissed for non-prosecution.
It is equally clear from the record that the valid marriage between
Pastor Tenchavez and Vicenta Escao remained subsisting and
undissolved under Philippine law, notwithstanding the decree of
absolute divorce that the wife sought and obtained on 21 October
1950 from the Second Judicial District Court of Washoe County,
State of Nevada, on grounds of "extreme cruelty, entirely mental in
character." At the time the divorce decree was issued, Vicenta
Escao, like her husband, was still a Filipino citizen. 4 She was then
subject to Philippine law, and Article 15 of the Civil Code of the
Philippines (Rep. Act No. 386), already in force at the time,
expressly provided:
Laws relating to family rights and duties or to the status,
condition and legal capacity of persons are binding upon the
citizens of the Philippines, even though living abroad.
The Civil Code of the Philippines, now in force, does not admit
absolute divorce, quo ad vinculo matrimonii; and in fact does not
even use that term, to further emphasize its restrictive policy on
the matter, in contrast to the preceding legislation that admitted
absolute divorce on grounds of adultery of the wife or concubinage
of the husband (Act 2710). Instead of divorce, the present Civil
Code only provides for legal separation (Title IV, Book 1, Arts. 97 to
108), and, even in that case, it expressly prescribes that "the
marriage bonds shall not be severed" (Art. 106, subpar. 1).
For the Philippine courts to recognize and give recognition or effect
to a foreign decree of absolute divorce betiveen Filipino citizens

Prohibitive laws concerning persons, their acts or property,

and those which have for their object public order, policy
and good customs, shall not be rendered ineffective by laws
or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country.
Even more, the grant of effectivity in this jurisdiction to such
foreign divorce decrees would, in effect, give rise to an irritating
and scandalous discrimination in favor of wealthy citizens, to the
detriment of those members of our polity whose means do not
permit them to sojourn abroad and obtain absolute divorces outside
the Philippines.
From this point of view, it is irrelevant that appellant Pastor
Tenchavez should have appeared in the Nevada divorce court.
Primarily because the policy of our law cannot be nullified by acts
of private parties (Civil Code,Art. 17, jam quot.); and additionally,
because the mere appearance of a non-resident consort cannot
confer jurisdiction where the court originally had none (Area vs.
Javier, 95 Phil. 579).
From the preceding facts and considerations, there flows as a
necessary consequence that in this jurisdiction Vicenta Escao's
divorce and second marriage are not entitled to recognition as
valid; for her previous union to plaintiff Tenchavez must be declared
to be existent and undissolved. It follows, likewise, that her refusal
to perform her wifely duties, and her denial of consortium and her
desertion of her husband constitute in law a wrong caused through
her fault, for which the husband is entitled to the corresponding
indemnity (Civil Code, Art. 2176). Neither an unsubstantiated
charge of deceit nor an anonymous letter charging immorality
against the husband constitute, contrary to her claim, adequate
excuse. Wherefore, her marriage and cohabitation with Russell Leo
Moran is technically "intercourse with a person not her husband"
from the standpoint of Philippine Law, and entitles plaintiff-

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Page

could be a patent violation of the declared public policy of the

state, specially in view of the third paragraph of Article 17 of the
Civil Code that prescribes the following:

appellant Tenchavez to a decree of "legal separation under our law,

on the basis of adultery" (Revised Penal Code, Art. 333).
The foregoing conclusions as to the untoward effect of a marriage
after an invalid divorce are in accord with the previous doctrines
and rulings of this court on the subject, particularly those that were
rendered under our laws prior to the approval of the absolute
divorce act (Act 2710 of the Philippine Legislature). As a matter of
legal history, our statutes did not recognize divorces a
vinculo before 1917, when Act 2710 became effective; and the
present Civil Code of the Philippines, in disregarding absolute
divorces, in effect merely reverted to the policies on the subject
prevailing before Act 2710. The rulings, therefore, under the Civil
Code of 1889, prior to the Act above-mentioned, are now, fully
applicable. Of these, the decision in Ramirez vs. Gmur, 42 Phil. 855,
is of particular interest. Said this Court in that case:
As the divorce granted by the French Court must be ignored,
it results that the marriage of Dr. Mory and Leona Castro,
celebrated in London in 1905, could not legalize their
relations; and the circumstance that they afterwards passed
for husband and wife in Switzerland until her death is wholly
without legal significance. The claims of the very children to
participate in the estate of Samuel Bishop must therefore be
rejected. The right to inherit is limited to legitimate,
legitimated and acknowledged natural children. The children
of adulterous relations are wholly excluded. The word
"descendants" as used in Article 941 of the Civil Code
cannot be interpreted to include illegitimates born
of adulterous relations. (Emphasis supplied)
Except for the fact that the successional rights of the children,
begotten from Vicenta's marriage to Leo Moran after the invalid
divorce, are not involved in the case at bar, the Gmur case is
authority for the proposition that such union is adulterous in this
jurisdiction, and, therefore, justifies an action for legal separation
on the part of the innocent consort of the first marriage, that stands
undissolved in Philippine law. In not so declaring, the trial court
committed error.

The hardship of the existing divorce laws in the Philippine

Islands are well known to the members of the Legislature. It
is the duty of the Courts to enforce the laws of divorce as
written by Legislature if they are constitutional. Courts have
no right to say that such laws are too strict or too liberal. (p.
72)
The appellant's first assignment of error is, therefore, sustained.
However, the plaintiff-appellant's charge that his wife's parents, Dr.
Mamerto Escao and his wife, the late Doa Mena Escao,
alienated the affections of their daughter and influenced her
conduct toward her husband are not supported by credible
evidence. The testimony of Pastor Tenchavez about the Escao's
animosity toward him strikes us to be merely conjecture and
exaggeration, and are belied by Pastor's own letters written before
this suit was begun (Exh. "2-Escao" and "Vicenta," Rec. on App.,
pp. 270-274). In these letters he expressly apologized to the
defendants for "misjudging them" and for the "great unhappiness"
caused by his "impulsive blunders" and "sinful pride," "effrontery
and audacity" [sic]. Plaintiff was admitted to the Escao house to
visit and court Vicenta, and the record shows nothing to prove that
he would not have been accepted to marry Vicente had he openly
asked for her hand, as good manners and breeding demanded.
Even after learning of the clandestine marriage, and despite their
shock at such unexpected event, the parents of Vicenta proposed
and arranged that the marriage be recelebrated in strict conformity
with the canons of their religion upon advice that the previous one
was canonically defective. If no recelebration of the marriage
ceremony was had it was not due to defendants Mamerto Escao
and his wife, but to the refusal of Vicenta to proceed with it. That
the spouses Escao did not seek to compel or induce their
daughter to assent to the recelebration but respected her decision,

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Page

True it is that our ruling gives rise to anomalous situations where

the status of a person (whether divorced or not) would depend on
the territory where the question arises. Anomalies of this kind are
not new in the Philippines, and the answer to them was given
in Barretto vs. Gonzales, 58 Phil. 667:

or that they abided by her resolve, does not constitute in law an

alienation of affections. Neither does the fact that Vicenta's parents
sent her money while she was in the United States; for it was
natural that they should not wish their daughter to live in penury
even if they did not concur in her decision to divorce Tenchavez (27
Am. Jur. 130-132).
There is no evidence that the parents of Vicenta, out of improper
motives, aided and abetted her original suit for annulment, or her
subsequent divorce; she appears to have acted independently, and
being of age, she was entitled to judge what was best for her and
ask that her decisions be respected. Her parents, in so doing,
certainly cannot be charged with alienation of affections in the
absence of malice or unworthy motives, which have not been
shown, good faith being always presumed until the contrary is
proved.
SEC. 529. Liability of Parents, Guardians or Kin. The law
distinguishes between the right of a parent to interest
himself in the marital affairs of his child and the absence of
rights in a stranger to intermeddle in such affairs. However,
such distinction between the liability of parents and that of
strangers is only in regard to what will justify interference. A
parent isliable for alienation of affections resulting from his
own malicious conduct, as where he wrongfully entices his
son or daughter to leave his or her spouse, but he is not
liable unless he acts maliciously, without justification and
from unworthy motives. He is not liable where he acts and
advises his child in good faith with respect to his child's
marital relations in the interest of his child as he sees it, the
marriage of his child not terminating his right and liberty to
interest himself in, and be extremely solicitous for, his
child's welfare and happiness, even where his conduct and
advice suggest or result in the separation of the spouses or
the obtaining of a divorce or annulment, or where he acts
under mistake or misinformation, or where his advice or
interference are indiscreet or unfortunate, although it has
been held that the parent is liable for consequences
resulting from recklessness. He may in good faith take his

Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with

racial or social discrimination and with having exerted efforts and
pressured her to seek annulment and divorce, unquestionably
caused them unrest and anxiety, entitling them to recover
damages. While this suit may not have been impelled by actual
malice, the charges were certainly reckless in the face of the
proven facts and circumstances. Court actions are not established
for parties to give vent to their prejudices or spleen.
In the assessment of the moral damages recoverable by appellant
Pastor Tenchavez from defendant Vicente Escao, it is proper to
take into account, against his patently unreasonable claim for a
million pesos in damages, that (a) the marriage was celebrated in
secret, and its failure was not characterized by publicity or undue
humiliation on appellant's part; (b) that the parties never lived
together; and (c) that there is evidence that appellant had
originally agreed to the annulment of the marriage, although such a
promise was legally invalid, being against public policy (cf. Art. 88,
Civ. Code). While appellant is unable to remarry under our law, this
fact is a consequence of the indissoluble character of the union that
appellant entered into voluntarily and with open eyes rather than of
her divorce and her second marriage. All told, we are of the opinion
that appellant should recover P25,000 only by way of moral
damages and attorney's fees.
With regard to the P45,000 damages awarded to the defendants,
Dr. Mamerto Escao and Mena Escao, by the court below, we
opine that the same are excessive. While the filing of this
unfounded suit must have wounded said defendants' feelings and
caused them anxiety, the same could in no way have seriously
injured their reputation, or otherwise prejudiced them, lawsuits

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child into his home and afford him or her protection and
support, so long as he has not maliciously enticed his child
away, or does not maliciously entice or cause him or her to
stay away, from his or her spouse. This rule has more
frequently been applied in the case of advice given to a
married daughter, but it is equally applicable in the case of
advice given to a son.

having become a common occurrence in present society. What is

important, and has been correctly established in the decision of the
court below, is that said defendants were not guilty of any improper
conduct in the whole deplorable affair. This Court, therefore,
reduces the damages awarded to P5,000 only.
Summing up, the Court rules:
(1) That a foreign divorce between Filipino citizens, sought and
decreed after the effectivity of the present Civil Code (Rep. Act
386), is not entitled to recognition as valid in this jurisdiction; and
neither is the marriage contracted with another party by the
divorced consort, subsequently to the foreign decree of divorce,
entitled to validity in the country;
(2) That the remarriage of divorced wife and her co-habitation with
a person other than the lawful husband entitle the latter to a
decree of legal separation conformably to Philippine law;
(3) That the desertion and securing of an invalid divorce decree by
one consort entitles the other to recover damages;
(4) That an action for alienation of affections against the parents of
one consort does not lie in the absence of proof of malice or
unworthy motives on their part.
WHEREFORE, the decision under appeal is hereby modified as
follows;
(1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a
decree of legal separation from defendant Vicenta F. Escao;
(2) Sentencing defendant-appellee Vicenta Escao to pay plaintiffappellant Tenchavez the amount of P25,000 for damages and
attorneys' fees;
(3) Sentencing appellant Pastor Tenchavez to pay the appellee,
Mamerto Escao and the estate of his wife, the deceased Mena
Escao, P5,000 by way of damages and attorneys' fees.

86

Bengzon, C.J., Bautista Angelo, Concepcion, Dizon, Regala,

Makalintal, Bengzon, J.P. and Zaldivar, JJ., concur.

Page

Neither party to recover costs.

PHILIPPINE AEOLUS AUTOMOTIVE UNITED CORPORATION

and/or FRANCIS CHUA, petitioners, vs. NATIONAL LABOR
RELATIONS COMMISSION and ROSALINDA C.
CORTEZ, respondents.
DECISION
BELLOSILLO, J.:
This petition seeks to set aside the Decision of 15 February 1996
and the Resolution of 28 March 1996 of public respondent National
Labor Relations Commission in NLRC NCR CA No. 009753-95 (NLRC
NCR Case No. 00-12-08759-94) which modified the decision of the
Labor Arbiter finding petitioners not guilty of illegal dismissal.

87

[G.R. No. 124617. April 28, 2000]

Page

SECOND DIVISION

while her case was pending investigation the company placed her
under preventive suspension for thirty (30) days effective 9
October 1994 to 7 November 1994. Lexjuris
On 20 October 1994, while Cortez was still under preventive
suspension, another memorandum was issued by petitioner
corporation giving her seventy-two (72) hours to explain why no
disciplinary action should be taken against her for allegedly failing
to process the ATM applications of her nine (9) co-employees with
the Allied Banking Corporation. On 21 October 1994 private
respondent also refused to receive the second memorandum
although it was read to her by a co-employee. A copy of the
memorandum was also sent by the Personnel Manager to private
respondent at her last known address by registered mail. Jurismis
Meanwhile, private respondent submitted a written explanation
with respect to the loss of the P1,488.00 and the punching-in of her
time card by a co-employee.

Petitioner Philippine Aeolus Automotive United Corporation (PAAUC)

is a corporation duly organized and existing under Philippine laws,
petitioner Francis Chua is its President while private respondent
Rosalinda C. Cortez was a company nurse[1] of petitioner
corporation until her termination on 7 November 1994. Jlexj

On 3 November 1994 a third memorandum was issued to private

respondent, this time informing her of her termination from the
service effective 7 November 1994 on grounds of gross and
habitual neglect of duties, serious misconduct and fraud or willful
breach of trust.[2]

On 5 October 1994 a memorandum was issued by Ms. Myrna

Palomares, Personnel Manager of petitioner corporation, addressed
to private respondent Rosalinda C. Cortez requiring her to explain
within forty-eight (48) hours why no disciplinary action should be
taken against her (a) for throwing a stapler at Plant Manager
William Chua, her superior, and uttering invectives against him on
2 August 1994; (b) for losing the amount of P1,488.00 entrusted to
her by Plant Manager Chua to be given to Mr. Fang of the CLMC
Department on 23 August 1994; and, (c) for asking a co-employee
to punch-in her time card thus making it appear that she was in the
office in the morning of 6 September 1994 when in fact she was
not. The memorandum however was refused by private respondent
although it was read to her and discussed with her by a coemployee. She did not also submit the required explanation, so that

On 6 December 1994 private respondent filed with the Labor

Arbiter a complaint for illegal dismissal, non-payment of annual
service incentive leave pay, 13th month pay and damages against
PAAUC and its president Francis Chua.[3]
On 10 July 1995 the Labor Arbiter rendered a decision holding the
termination of Cortez as valid and legal, at the same time
dismissing her claim for damages for lack of merit.[4]
On appeal to the NLRC, public respondent reversed on 15 February
1996 the decision of the Labor Arbiter and found petitioner
corporation guilty of illegal dismissal of private respondent Cortez.
The NLRC ordered petitioner PAAUC to reinstate respondent Cortez

On 11 March 1996 petitioners moved for reconsideration. On 28

March 1996 the motion was denied;[6] hence, this petition
for certiorari challenging the NLRC Decision and Resolution.
The crux of the controversy may be narrowed down to two (2) main
issues: whether the NLRC gravely abused its discretion in holding
as illegal the dismissal of private respondent, and whether she is
entitled to damages in the event that the illegality of her dismissal
is sustained. Jjjuris
The Labor Code as amended provides specific grounds by which an
employer may validly terminate the services of an employee,
[7]
which grounds should be strictly construed since a persons
employment constitutes "property" under the context of the
constitutional protection that "no person shall be deprived of life,
liberty or property without due process of law" and, as such, the
burden of proving that there exists a valid ground for termination of
employment rests upon the employer.[8] Likewise, in light of the
employee's right to security of tenure, where a penalty less
punitive than dismissal will suffice, whatever missteps may have
been committed by labor ought not to be visited with a
consequence so severe.[9]
A perusal of the termination letter indicates that private respondent
was discharged from employment for "serious misconduct, gross
and habitual neglect of duties and fraud or willful breach of trust."
Specifically -justice
1. On August 2, 1994, you committed acts
constituting gross disrespect to your superior Mr.
William Chua, the Plant Manager.
2. On August 23, 1994, the Plant Manager entrusted
you the amount of P1,488.00 to be sent to CLMC for
Mr. Fang but the money was allegedly lost in your
possession and was not recovered.

88
Page

to her former position with back wages computed from the time of
dismissal up to her actual reinstatement.[5]

3. On September 6, 1994, you caused someone else

to punch-in your time card to show that you were at
work when in fact you were doing a personal errand
for Richard Tan. As per time card you were in at 8:02
A.M. but you only arrived at 12:35 P.M.
4. On July 28, 1994, you received an amount
of P900.00 from Miss Lucy Lao to open an ATM card
of nine (9) employees. On September 24, 1994, one
of the employees complained by the name of Tirso
Aquino about the status of his ATM Card and upon
query from the bank it was found out that no
application and no deposit for said person has been
made. Likewise, it was found out that you did not
open the ATM Card and deposit the P800.00 for the 8
other employees. It turned out that said deposit was
made after a month later.[10]
As to the first charge, respondent Cortez claims that as early as her
first year of employment her Plant Manager, William Chua, already
manifested a special liking for her, so much so that she was
receiving special treatment from him who would oftentimes invite
her "for a date," which she would as often refuse. On many
occasions, he would make sexual advances - touching her hands,
putting his arms around her shoulders, running his fingers on her
arms and telling her she looked beautiful. The special treatment
and sexual advances continued during her employment for four (4)
years but she never reciprocated his flirtations, until finally, she
noticed that his attitude towards her changed. He made her
understand that if she would not give in to his sexual advances he
would cause her termination from the service; and he made good
his threat when he started harassing her. She just found out one
day that her table which was equipped with telephone and
intercom units and containing her personal belongings was
transferred without her knowledge to a place with neither
telephone nor intercom, for which reason, an argument ensued
when she confronted William Chua resulting in her being charged
with gross disrespect.[11]

With respect to the third imputation, private respondent admits

that she asked someone to punch-in her time card because at that
time she was doing an errand for one of the company's officers,
Richard Tan, and that was with the permission of William Chua. She
maintains that she did it in good faith believing that she was
anyway only accommodating the request of a company executive
and done for the benefit of the company with the acquiescence of
her boss, William Chua. Besides, the practice was apparently
tolerated as the employees were not getting any reprimand for
doing so.[13]
As to the fourth charge regarding her alleged failure to process the
ATM cards of her co-employees, private respondent claims that she
has no knowledge thereof and therefore denies it. After all, she was
employed as a company nurse and not to process ATM cards for her
co-employees. Jksm

89
Page

Respondent Cortez explains, as regards the second charge, that the

money entrusted to her for transmittal was not lost; instead, she
gave it to the company personnel in-charge for proper transmittal
as evidenced by a receipt duly signed by the latter.[12]

The Supreme Court, in a litany of decisions on serious misconduct

warranting dismissal of an employee, has ruled that for misconduct
or improper behavior to be a just cause for dismissal (a) it must be
serious; (b) must relate to the performance of the employees
duties; and, (c) must show that the employee has become unfit to
continue working for the employer.[14] The act of private respondent
in throwing a stapler and uttering abusive language upon the
person of the plant manager may be considered, from a lay man's
perspective, as a serious misconduct. However, in order to consider
it a serious misconduct that would justify dismissal under the law, it
must have been done in relation to the performance of her duties
as would show her to be unfit to continue working for her employer.
The acts complained of, under the circumstances they were done,
did not in any way pertain to her duties as a nurse. Her
employment identification card discloses the nature of her
employment as a nurse and no other.[15] Also, the memorandum
informing her that she was being preventively suspended pending
investigation of her case was addressed to her as a nurse.[16]
As regards the third alleged infraction, i.e., the act of private
respondent in asking a co-employee to punch-in her time card,
although a violation of company rules, likewise
does not constitute serious misconduct. Firstly, it was done by her
in good faith considering that she was asked by an officer to
perform a task outside the office, which was for the benefit of the
company, with the consent of the plant manager. Secondly, it was
her first time to commit such infraction during her five (5)-year
service in the company. Finally, the company did not lose anything
by reason thereof as the offense was immediately known and
corrected. Es m
On alleged infraction No. 4, as may be gleaned from and admitted
in the memorandum of petitioners to private respondent dated 20
October 1994[17] and the notice of termination dated 3 November
1994, the money entrusted to her was in fact deposited in the
respective accounts of the employees concerned, although
belatedly. We agree with the submission of the Solicitor General
that -Es msc

Gross negligence implies a want or absence of or failure to exercise

slight care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any effort
to avoid them.[19] The negligence, to warrant removal from service,
should not merely be gross but also habitual. Likewise, the ground
"willful breach by the employee of the trust reposed in him by his
employer" must be founded on facts established by the employer
who must clearly and convincingly prove by substantial evidence
the facts and incidents upon which loss of confidence in the
employee may fairly be made to rest.[20] All these requirements
prescribed by law and jurisprudence are wanting in the case at bar.
On the issue of moral and exemplary damages, the NLRC ruled that
private respondent was not entitled to recover such damages for
her failure to prove that petitioner corporation had been motivated
by malice or bad faith or that it acted in a wanton, oppressive or
malevolent manner in terminating her services. In disbelieving the
explanation proffered by private respondent that the transfer of her
table was the response of a spurned lothario, public respondent
quoted the Labor Arbiter -

90
Page

The mere delay/failure to open an ATM account for

nine employees is not sufficient, by itself, to support
a conclusion that Rosalinda is guilty of gross and
habitual neglect of duties. First, petitioner did not
show that opening an ATM is one of her primary
duties as company nurse. Second, petitioner failed to
show that Rosalinda intentionally, knowingly, and
purposely delayed the opening of ATM accounts for
petitioners employees. It is of common knowledge
that a bank imposes upon an applicant certain
requirements before an ATM account can be
opened, i.e. properly filled up application forms,
identification cards, minimum deposit etc. In the
instant case, petitioner did not prove that the delay
was caused by Rosalindas neglect or willful act
(emphasis supplied).[18]

Complainants assertion that the cause of the

altercation between her and the Plant Manager
where she threw a stapler to him and uttered
invectives against him was her refusal to submit to
his advances to her which started from her early
days of employment and lasted for almost four years,
is hardly believable. For indeed, if there was such
harassment, why was there no complaints (sic) from
her during that period? Why did she stay there for so
long? Besides, it could not have taken that period for
the Plant Manager to react. This assertion of the
complainant deserves no credence at all.[21]
Public respondent in thus concluding appears baffled why it took
private respondent more than four (4) years to expose William
Chua's alleged sexual harassment. It reasons out that it would have
been more prepared to support her position if her act of throwing
the stapler and uttering invectives on William Chua were her
immediate reaction to his amorous overtures. In that case,
according to public respondent, she would have been justified for
such outburst because she would have been merely protecting her
womanhood, her person and her rights. Esmm is
We are not persuaded. The gravamen of the offense in sexual
harassment is not the violation of the employee's sexuality but the
abuse of power by the employer. Any employee, male or female,
may rightfully cry "foul" provided the claim is well substantiated.
Strictly speaking, there is no time period within which he or she is
expected to complain through the proper channels. The time to do
so may vary depending upon the needs, circumstances, and more
importantly, the emotional threshold of the employee. Esmso
Private respondent admittedly allowed four (4) years to pass before
finally coming out with her employer's sexual impositions. Not
many women, especially in this country, are made of the stuff that
can endure the agony and trauma of a public, even corporate,
scandal. If petitioner corporation had not issued the third
memorandum that terminated the services of private respondent,
we could only speculate how much longer she would keep her

In determining entitlement to moral and exemplary damages, we

restate the bases therefor. In moral damages, it suffices to prove
that the claimant has suffered anxiety, sleepless nights,
besmirched reputation and social humiliation by reason of the act
complained of.[22] Exemplary damages, on the other hand, are
granted in addition to, inter alia, moral damages "by way of
example or correction for the public good"[23] if the employer "acted
in a wanton, fraudulent, reckless, oppressive or malevolent
manner."[24]
Anxiety was gradual in private respondent's five (5)-year
employment. It began when her plant manager showed an obvious
partiality for her which went out of hand when he started to make it
clear that he would terminate her services if she would not give in
to his sexual advances. Sexual harassment is an imposition of
misplaced "superiority" which is enough to dampen an employee's
spirit in her capacity for advancement. It affects her sense of
judgment; it changes her life. If for this alone private respondent
should be adequately compensated. Thus, for the anxiety, the seen
and unseen hurt that she suffered, petitioners should also be made
to pay her moral damages, plus exemplary damages, for the
oppressive manner with which petitioners effected her dismissal

91
Page

silence. Moreover, few persons are privileged indeed to transfer

from one employer to another. The dearth of quality employment
has become a daily "monster" roaming the streets that one may
not be expected to give up one's employment easily but to hang on
to it, so to speak, by all tolerable means. Perhaps, to private
respondent's mind, for as long as she could outwit her employer's
ploys she would continue on her job and consider them as mere
occupational hazards. This uneasiness in her place of work thrived
in an atmosphere of tolerance for four (4) years, and one could only
imagine the prevailing anxiety and resentment, if not bitterness,
that beset her all that time. But William Chua faced reality soon
enough. Since he had no place in private respondent's heart, so
must she have no place in his office. So, he provoked her, harassed
her, and finally dislodged her; and for finally venting her pent-up
anger for years, he "found" the perfect reason to terminate
her. Mse sm

from the service, and to serve as a forewarning to lecherous

officers and employers who take undue advantage of their
ascendancy over their employees. Ex sm
All told, the penalty of dismissal is too excessive and not
proportionate to the alleged infractions committed considering that
it does not appear that private respondent was an incorrigible
offender or that she inflicted serious damage to the company, nor
would her continuance in the service be patently inimical to her
employers interest.[25] Even the suspension imposed upon her while
her case was pending investigation appears to be unjustified and
uncalled for.
WHEREFORE, the Decision of public respondent National Labor
Relations Commssion finding the dismissal of private respondent
Rosalinda C. Cortez to be without just cause and ordering
petitioners Philippine Aeolus Automotive United Corporation and/or
Francis Chua to pay her back wages computed from the time of her
dismissal, which should be full back wages, is AFFIRMED. However,
in view of the strained relations between the adverse parties,
instead of reinstatement ordered by public respondent, petitioners
should pay private respondent separation pay equivalent to one (1)
month salary for every year of service until finality of this
judgment. In addition, petitioners are ordered to pay private
respondent P25,000.00 for moral damages and P10,000.00 for
exemplary damages. Costs against petitioners. Kyle
SO ORDERED.

RODRIGO CONCEPCION, petitioner, vs. COURT OF APPEALS

and SPS. NESTOR NICOLAS and ALLEM
NICOLAS, respondents.
DECISION
BELLOSILLO, J.:
Petitioner Rodrigo Concepcion assails in this petition for review
on certiorari the Decision of the Court of Appeals dated 12
December 1994 which affirmed the decision of the Regional Trial
Court of Pasig City ordering him to pay respondent spouses Nestor
Nicolas and Allem Nicolas the sums of P50,000.00 for moral
damages, P25,000.00 for exemplary damages and P10,000.00 for
attorneys fees, plus the costs of suit.* Petitioner claims absence of
factual and legal basis for the award of damages. h Y
The courts a quo found that sometime in 1985 the spouses Nestor
Nicolas and Allem Nicolas resided at No. 51 M. Concepcion St., San
Joaquin, Pasig City, in an apartment leased to them by the owner
thereof, Florence "Bing" Concepcion, who also resided in the same
compound where the apartment was located. Nestor Nicolas was
then engaged in the business of supplying government agencies
and private entities with office equipment, appliances and other
fixtures on a cash purchase or credit basis. Florence Concepcion
joined this venture by contributing capital on condition that after
her capital investment was returned to her, any profit earned would
be divided equally between her and Nestor. Jksm
Sometime in the second week of July 1985 Rodrigo Concepcion,
brother of the deceased husband of Florence, angrily accosted
Nestor at the latters apartment and accused him of conducting an
adulterous relationship with Florence. He shouted, "Hoy
Nestor, kabit ka ni Bing! x x x Binigyan ka pa pala ni Bing
Concepcion ng P100,000.00 para umakyat ng Baguio. Pagkaakyat

92

[G.R. No. 120706. January 31, 2000]

Page

SECOND DIVISION

mo at ng asawa mo doon ay bababa ka uli para magkasarilinan

kayo ni Bing."[1]
To clarify matters, Nestor went with Rodrigo, upon the latters dare,
to see some relatives of the Concepcion family who allegedly knew
about the relationship. However, those whom they were able to see
denied knowledge of the alleged affair. The same accusation was
hurled by Rodrigo against Nestor when the two (2) confronted
Florence at the terrace of her residence. Florence denied the
imputations and Rodrigo backtracked saying that he just heard the
rumor from a relative. Thereafter, however, Rodrigo called Florence
over the telephone reiterating his accusation and threatening her
that should something happen to his sick mother, in case the latter
learned about the affair, he would kill Florence. Chief
As a result of this incident, Nestor Nicolas felt extreme
embarrassment and shame to the extent that he could no longer
face his neighbors. Florence Concepcion also ceased to do business
with him by not contributing capital anymore so much so that the
business venture of the Nicolas spouses declined as they could no
longer cope with their commitments to their clients and customers.
To make matters worse, Allem Nicolas started to doubt Nestors
fidelity resulting in frequent bickerings and quarrels during which
Allem even expressed her desire to leave her husband.
Consequently, Nestor was forced to write Rodrigo demanding public
apology and payment of damages. Rodrigo pointedly ignored the
demand, for which reason the Nicolas spouses filed a civil suit
against him for damages.
In his defense, Rodrigo denied that he maligned Nestor by accusing
him publicly of being Florence's lover. He reasoned out that he only
desired to protect the name and reputation of the Concepcion
family which was why he sought an appointment with Nestor
through Florence's son Roncali to ventilate his feelings about the
matter. Initially, he discussed with Nestor certain aspects of the
joint venture in a friendly and amiable manner, and then only
casually asked the latter about his rumored affair with his sister-inlaw.

Petitioner argues that in awarding damages to private respondents,

the Court of Appeals was without legal basis to justify its verdict.
The alleged act imputed to him by respondent spouses does not fall
under Arts. 26[2] and 2219[3] of the Civil Code since it does not
constitute libel, slander, or any other form of defamation. Neither
does it involve prying into the privacy of anothers residence or
meddling with or disturbing the private life or family relation of
another. Petitioner also insists that certain facts and circumstances
of the case were manifestly overlooked, misunderstood or glossed
over by respondent court which, if considered, would change the
verdict. Impugning the credibility of the witnesses for private
respondents and the manner by which the testimonial evidence
was analyzed and evaluated by the trial court, petitioner criticized
the appellate court for not taking into account the fact that the trial
judge who penned the decision was in no position to observe firsthand the demeanor of the witnesses of respondent spouses as he
was not the original judge who heard the case. Thus, his decision
rendered was flawed. Esmsc
The Court has ruled often enough that its jurisdiction in a petition
for review on certiorari under Rule 45 of the Revised Rules of Court
is limited to reviewing only errors of law, not of fact, unless the
factual findings complained of are devoid of support by the
evidence on record or the assailed judgment is based on
misapprehension of facts.[4] The reason behind this is that the
Supreme Court respects the findings of the trial court on the issue
of credibility of witnesses, considering that it is in a better position
to decide the question, having heard the witnesses themselves and
observed their deportment and manner of testifying during the
trial.[5] Thus it accords the highest respect, even finality, to the
evaluation made by the lower court of the testimonies of the
witnesses presented before it. Esmmis

93
Page

In contesting the decision of the appellate court, petitioner Rodrigo

Concepcion raises the following issues: (a) whether there is basis in
law for the award of damages to private respondents, the Nicolas
spouses; and, (b) whether there is basis to review the facts which
are of weight and influence but which were overlooked and
misapplied by the respondent appellate court. Esm

The Court is also aware of the long settled rule that when the issue
is on the credibility of witnesses, appellate courts will not generally
disturb the findings of the trial court; however, its factual findings
may nonetheless be reversed if by the evidence on record or lack of
it, it appears that the trial court erred.[6] In this respect, the Court is
not generally inclined to review the findings of fact of the Court of
Appeals unless its findings are erroneous, absurd, speculative,
conjectural, conflicting, tainted with grave abuse of discretion, or
contrary to the findings culled by the trial court of origin. [7] This rule
of course cannot be unqualifiedly applied to a case where the judge
who penned the decision was not the one who heard the case,
because not having heard the testimonies himself, the judge would
not be in a better position than the appellate courts to make such
determination.[8]
However, it is also axiomatic that the fact alone that the judge who
heard the evidence was not the one who rendered the judgment
but merely relied on the record of the case does not render his
judgment erroneous or irregular. This is so even if the judge did not
have the fullest opportunity to weigh the testimonies not having
heard all the witnesses speak nor observed their deportment and
manner of testifying. Thus the Court generally will not find any
misapprehension of facts as it can be fairly assumed under the
principle of regularity of performance of duties of public officers
that the transcripts of stenographic notes were thoroughly
scrutinized and evaluated by the judge himself.
Has sufficient reason then been laid before us by petitioner to
engender doubt as to the factual findings of the court a quo? We
find none. A painstaking review of the evidence on record
convinces us not to disturb the judgment appealed from. The fact
that the case was handled by different judges brooks no
consideration at all, for preponderant evidence consistent with their
claim for damages has been adduced by private respondents as to
foreclose a reversal. Otherwise, everytime a Judge who heard a
case, wholly or partially, dies or lives the service, the case cannot
be decided and a new trial will have to be conducted. That would
be absurb; inconceivable. Esmso

It is also argued by petitioner that private respondents failed to

present as witnesses the persons they named as eyewitnesses to
the incident and that they presented instead one Romeo Villaruel
who was not named as a possible witness during the pre-trial
proceedings. Charging that Villaruels testimony is not credible and
should never have been accorded any weight at all, petitioner
capitalizes on the fact that a great distance separates Villaruels
residence and that of private respondents as reflected in their
house numbers, the formers number being No. 223 M. Concepcion
St., while that of the Nicolas spouses, No. 51 along the same street.
This being so, petitioner concludes, Villaruel could not have
witnessed the ugly confrontation between Rodrigo and Nestor. It
appears however from Villaruels testimony that at the time of the
incident complained of, he was staying in an apartment inside the
compound adjacent to that of the Nicolas spouses. Whether his
apartment was then numbered 223 is not stated. What is definite
and clear is his statement that he and Nestor Nicolas were
neighbors on 14 July 1985.
There are other inconsistencies pointed out by petitioner in the
testimonial evidence of private respondents but these are not of
such significance as to alter the finding of facts of the lower court.

94
Page

According to petitioner, private respondents evidence is

inconsistent as to time, place and persons who heard the alleged
defamatory statement. We find this to be a gratuitous observation,
for the testimonies of all the witnesses for the respondents are
unanimous that the defamatory incident happened in the afternoon
at the front door of the apartment of the Nicolas spouses in the
presence of some friends and neighbors, and later on, with the
accusation being repeated in the presence of Florence, at the
terrace of her house. That this finding appears to be in conflict with
the allegation in the complaint as to the time of the incident bears
no momentous significance since an allegation in a pleading is not
evidence; it is a declaration that has to be proved by evidence. If
evidence contrary to the allegation is presented, such evidence
controls, not the allegation in the pleading itself, although
admittedly it may dent the credibility of the witnesses. But not in
the instant case. Msesm

Minor inconsistencies even guarantee truthfulness and candor, for

they erase any suspicion of a rehearsed testimony.
[9]
Inconsistencies in the testimonies of witnesses with on minor
details and collateral matters do not affect the substance of their
testimonies.[10]
All told, these factual findings provide enough basis in law for the
award of damages by the Court of Appeals in favor of respondents.
We reject petitioners posture that no legal provision supports such
award, the incident complained of neither falling under Art. 2219
nor Art. 26 of the Civil Code. It does not need further elucidation
that the incident charged of petitioner was no less than an invasion
on the right of respondent Nestor as a person. The philosophy
behind Art. 26 underscores the necessity for its inclusion in our civil
law. The Code Commission stressed in no uncertain terms that the
human personality must be exalted. The sacredness of human
personality is a concomitant consideration of every plan for human
amelioration. The touchstone of every system of law, of the culture
and civilization of every country, is how far it dignifies man. If the
statutes insufficiently protect a person from being unjustly
humiliated, in short, if human personality is not exalted - then the
laws are indeed defective.[11] Thus, under this article, the rights of
persons are amply protected, and damages are provided for
violations of a persons dignity, personality, privacy and peace of
mind. Exsm
It is petitioners position that the act imputed to him does not
constitute any of those enumerated in Arts 26 and 2219. In this
respect, the law is clear. The violations mentioned in the codal
provisions are not exclusive but are merely examples and do not
preclude other similar or analogous acts. Damages therefore are
allowable for actions against a persons dignity, such as profane,
insulting, humiliating, scandalous or abusive language.[12] Under
Art. 2217 of the Civil Code, moral damages which include physical
suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and
similar injury, although incapable of pecuniary computation, may
be recovered if they are the proximate result of the defendants
wrongful act or omission.

Testifying that until that very afternoon of his meeting with Nestor
he never knew respondent, had never seen him before, and was
unaware of his business partnership with Florence, his subsequent
declarations on the witness stand however belie this lack of
knowledge about the business venture for in that alleged encounter
he asked Nestor how the business was going, what were the
collection problems, and how was the money being spent. He even
knew that the name of the business, Floral Enterprises, was coined
by combining the first syllables of the name Florence and Allem,
the name of Nestors wife. He said that he casually asked Nestor
about the rumor between him and Florence which Nestor denied.
Not content with such denial, he dared Nestor to go with him to
speak to his relatives who were the source of his information.
Nestor went with him and those they were able to talk to denied
the rumor. Kycalr
We cannot help noting this inordinate interest of petitioner to know
the truth about the rumor and why he was not satisfied with the
separate denials made by Florence and Nestor. He had to confront
Nestor face to face, invade the latters privacy and hurl defamatory

95
Page

There is no question that private respondent Nestor Nicolas

suffered mental anguish, besmirched reputation, wounded feelings
and social humiliation as a proximate result of petitioners abusive,
scandalous and insulting language. Petitioner attempted to
exculpate himself by claiming that he made an appointment to see
Nestor through a nephew, Roncali, the son of Florence, so he could
talk with Nestor to find out the truth about his rumored illicit
relationship with Florence. He said that he wanted to protect his
nephews and nieces and the name of his late brother (Florences
husband).[13] How he could be convinced by some way other than a
denial by Nestor, and how he would protect his nephews and nieces
and his familys name if the rumor were true, he did not say.
Petitioner admitted that he had already talked with Florence herself
over the telephone about the issue, with the latter vehemently
denying the alleged immoral relationship. Yet, he could not let the
matter rest on the strength of the denial of his sister-in-law. He had
to go and confront Nestor, even in public, to the latter's
humiliation. Kyle

words at him in the presence of his wife and children, neighbors

and friends, accusing him - a married man - of having an adulterous
relationship with Florence. This definitely caused private
respondent much shame and embarrassment that he could no
longer show himself in his neighborhood without feeling distraught
and debased. This brought dissension and distrust in his family
where before there was none. This is why a few days after the
incident, he communicated with petitioner demanding public
apology and payment of damages, which petitioner ignored. Calrky
If indeed the confrontation as described by private respondents did
not actually happen, then there would have been no cause or
motive at all for them to consult with their lawyer, immediately
demand an apology, and not obtaining a response from petitioner,
file an action for damages against the latter. That they decided to
go to court to seek redress bespeaks of the validity of their claim.
On the other hand, it is interesting to note that while explaining at
great length why Florence Concepcion testified against him,
petitioner never advanced any reason why the Nicolas spouses,
persons he never knew and with whom he had no dealings in the
past, would sue him for damages. It also has not escaped our
attention that, faced with a lawsuit by private respondents,
petitioner sent his lawyer, a certain Atty. Causapin, to talk not to
the Nicolas spouses but to Florence, asking her not to be involved
in the case, otherwise her name would be messily dragged into it.
Quite succinctly, Florence told the lawyer that it was not for her to
decide and that she could not do anything about it as she was not a
party to the court case.
WHEREFORE, in light of the foregoing premises, the assailed
Decision of the Court of Appeals affirming the judgment of the
Regional Trial Court of Pasig City, Br. 167, holding Rodrigo
Concepcion liable to the spouses Nestor Nicolas and Allem Nicolas
for P50,000.00 as moral damages, P25,000.00 for exemplary
damages, P10,000.00 for attorney's fees, plus costs of suit, is
AFFIRMED. Mesm
SO ORDERED.

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