 Article 19.

Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good faith.

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

 Article 21. Any person who wilfully causes loss or injury to another in manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.

 Article 22. Every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him.

 Article 23. Even when an act or event causing damage to another's property was not
due to the fault or negligence of the defendant, the latter shall be liable for indemnity if
through the act or event he was benefited.

 Article 24. In all contractual, property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance, indigence, mental
weakness, tender age or other handicap, the courts must be vigilant for his protection.

 Article 25. Thoughtless extravagance in expenses for pleasure or display during a

period of acute public want or emergency may be stopped by order of the courts at the
instance of any government or private charitable institution.

 Article 26. Every person shall respect the dignity, personality, privacy and peace of
mind of his neighbors and other persons. The following and similar acts, though they
may not constitute a criminal offense, shall produce a cause of action for damages,
prevention and other relief:

(1) Prying into the privacy of another's residence;

(2) Meddling with or disturbing the private life or family relations of another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his religious beliefs, lowly
station in life, place of birth, physical defect, or other personal condition.

 Article 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 28. Unfair competition in agricultural, commercial or industrial enterprises or

in labor through the use of force, intimidation, deceit, machination or any other unjust,
oppressive or highhanded method shall give rise to a right of action by the person who
thereby suffers damage.
 CEBU COUNTRY CLUB V. ELIZAGAQUE

FACTS: Cebu Country Club, Inc. (CCCI), petitioner, is a domestic corporation operating as a
non-profit and non-stock private membership club, having its principal place of business in
Banilad, Cebu City. Petitioners herein are members of its Board of Directors. In 1996,
respondent filed with CCCI an application for proprietary membership. The application was
indorsed by CCCI’s two (2) proprietary members, namely: Edmundo T. Misa and Silvano Ludo.
As the price of a proprietary share was around the P5 million range, Benito Unchuan, then
president of CCCI, offered to sell respondent a share for only P3.5 million. Respondent,
however, purchased the share of a certain Dr. Butalid for only P3 million. Consequently, on
September 6, 1996, CCCI issued Proprietary Ownership Certificate No. 1446 to respondent.

During the meetings dated April 4, 1997 and May 30, 1997 of the CCCI Board of Directors,
action on respondent’s application for proprietary membership was deferred. In another
Board meeting held on July 30, 1997, respondent’s application was voted upon. As shown by
the records, the Board adopted a secret balloting known as the “black ball system” of voting
wherein each member will drop a ball in the ballot box. A white ball represents conformity to
the admission of an applicant, while a black ball means disapproval. Pursuant to Section 3(c),
as amended, cited above, a unanimous vote of the directors is required. When respondent’s
application for proprietary membership was voted upon during the Board meeting on July 30,
1997, the ballot box contained one (1) black ball. Thus, for lack of unanimity, his application
was disapproved.

On August 6, 1997, Edmundo T. Misa, on behalf of respondent, wrote CCCI a letter of

reconsideration. As CCCI did not answer, respondent, on October 7, 1997, wrote another letter
of reconsideration. Still, CCCI kept silent. On November 5, 1997, respondent again sent CCCI a
letter inquiring whether any member of the Board objected to his application. Again, CCCI did
not reply. Consequently, on December 23, 1998, respondent filed with the Regional Trial Court
(RTC), Branch 71, Pasig City a complaint for damages against petitioners

ISSUE: Whether or not in disapproving respondent’s application for proprietary membership

with CCCI, petitioners are liable to respondent for damages, and if so, whether their liability is
joint and several.

HELD: YES. As shown by the records, the Board adopted a secret balloting known as the "black
ball system" of voting wherein each member will drop a ball in the ballot box. A white ball
represents conformity to the admission of an applicant, while a black ball means disapproval.
Pursuant to Section 3(c), as amended, cited above, a unanimous vote of the directors is
required. When respondent’s application for proprietary membership was voted upon during
the Board meeting on July 30, 1997, the ballot box contained one (1) black ball. Thus, for lack
of unanimity, his application was disapproved.

Obviously, the CCCI Board of Directors, under its Articles of Incorporation, has the right to
approve or disapprove an application for proprietary membership. But such right should not
be exercised arbitrarily. Articles 19 and 21 of the Civil Code on the Chapter on Human
Relations provide restrictions, thus:

Article 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.

Article 21. Any person who willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.

In GF Equity, Inc. v. Valenzona,5 we expounded Article 19 and correlated it with Article 21,
thus:

This article, known to contain what is commonly referred to as the principle of abuse of
rights, sets certain standards which must be observed not only in the exercise of one's
rights but also in the performance of one's duties. These standards are the following: to
act with justice; to give everyone his due; and to observe honesty and good faith. The
law, therefore, recognizes a primordial limitation on all rights; that in their exercise, the
norms of human conduct set forth in Article 19 must be observed. A right, though by
itself legal because recognized or granted by law as such, may nevertheless become the
source of some illegality. When a right is exercised in a manner which does not conform
with the norms enshrined in Article 19 and results in damage to another, a legal wrong
is thereby committed for which the wrongdoer must be held responsible. But while
Article 19 lays down a rule of conduct for the government of human relations and for
the maintenance of social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article 21 would be proper.
(Emphasis in the original)

In rejecting respondent’s application for proprietary membership, we find that petitioners

violated the rules governing human relations, the basic principles to be observed for the
rightful relationship between human beings and for the stability of social order. The trial court
and the Court of Appeals aptly held that petitioners committed fraud and evident bad faith in
disapproving respondent’s applications. This is contrary to morals, good custom or public
policy. Hence, petitioners are liable for damages pursuant to Article 19 in relation to Article 21
of the same Code.

CUSTODIO V. COURT OF APPEALS

FACTS: Pacifico Mabasa owns a property behind the properties of spouses Cristino and Brigida
Custodio and spouses Lito and Ma. Cristina Santos. The passageway leading to Mabasa’s house
passes through the properties of the Custodios and the Santoses.

Sometime in 1981, the spouses Lito and Ma. Cristina Santos built a fence around their
property. This effectively deprived Mabasa passage to his house. Mabasa then sued the
Custodios and the Santoses to compel them to grant his right of way with damages. Mabasa
claims that he lost tenants because of the blockade done by the families in front. The trial court
ruled in favor of Mabasa. It ordered the Custodios and the Santoses to give Mabasa a
permanent easement and right of way and for Mabasa to pay just compensation. The Santoses
and the Custodios appealed. The Court of Appeals affirmed the decision of the trial court.
However, the CA modified the ruling by awarding damages in favor of Mabasa (Actual
damages: P65k, Moral damages: P30k, Exemplary damages: P10k).

ISSUE: Whether or not the grant of damages by the CA is proper.

HELD: No. The award is not proper. This is an instance of damnum absque injuria.

There is a material distinction between damages and injury. Injury is the illegal invasion of a
legal right; damage is the loss, hurt, or harm which results from the injury; and damages are
the recompense or compensation awarded for the damage suffered. Thus, there can be damage
without injury in those instances in which the loss or harm was not the result of a violation of a
legal duty.

In this case, it is true that Mabasa may have incurred losses (damage) when his tenants left
because of the fence made by the Santoses. However, when Santos built the fence, he was well
within his right. He built the fence inside his property. There was no existing easement
agreement, either by contract or by operation of law, on his property. Hence, Santos has all the
right to build the fence. It was only after the judgment in the trial court that the easement was
created which was even conditioned on the payment of Mabasa of the just compensation.
Santos did not commit a legal injury against Mabasa when he built the fence, therefore, there is
no actionable wrong as basis for the award of damages. In this case, the damage has to be
borne by Mabasa.

THE ORCHARD GOLD & COUNTRY CLUB V. YU & YUHICO

FACTS: Yu and Yuhico went to the Orchard Golf & Country Club to play a round of golf with
another member of the club. At the last minute, however, the other member informed them
that he could not play with them. Due to the "no twosome" policy of the Orchard contained in
the membership handbook prohibiting groups of less than three players from teeing off on
weekends and public holidays before 1:00 p.m.,respondents requested management to look for
another player to join them.

Because Orchard were unable to find their third player, Yu tried to convince Montallana,
Orchard's assistant golf director, to allow them to play twosome, even if they had to tee off
from hole no. 10 of the Palmer golf course. Montallana refused, stating that the flights which
started from the first nine holes might be disrupted. Yu then shouted invectives at Montallana,
at which point he told Yuhico that they should just tee off anyway, regardless of what
management's reaction would be. Respondents then teed off without permission from
Montallana. They were thus able to play, although they did so without securing a tee time
control slip before teeing off, again in disregard of a rule in the handbook. As a result of
respondents' actions, Montallana filed a report on the same day with the board of directors.
The board requested respondents to submit their written comments on Montallana's incident
report. Subsequently, the board resolved to suspend respondents. The RTC ruled in favor of
respondents. The decision of the Club's Board of Directors suspending Yu and Yuhico was
declared void and of no effect. Thus, petitioners were ordered to pay respondents moral
damages, exemplary damages, attorney‘s fees and costs of litigation.

ISSUE: Whether or not the award of damages is proper.

HELD: No. Yu acknowledged that there was an offense committed. Similarly, Yuhico admitted
that he was aware or had prior knowledge of the Club's "no twosome" policy as contained in
the Club's Membership Handbook and that they teed off without the required tee time
slip.Montallana cannot be faulted in exercising his prerogative to disallow respondents from
playing since they made no prior reservation and that there were standing flights waiting for
tee time.

With regard to the purported damages they incurred, respondents testified during the trial to
support their respective allegations. Yuhico stated that he distanced himself from his usual
group (the "Alabang Boys") and that he became the butt of jokes of fellow golfers. On the other
hand, Yu represented that some of his friends in the business like Freddy Lim, a certain Atty.
Benjie, and Jun Ramos started to evade or refuse to have dealings with him after his
suspension. Apart from these self-serving declarations, respondents presented neither
testimonial nor documentary evidence to bolster their claims. Worse, Yu even admitted that
Freddy Lim and Atty. Benjie did not tell him that his suspension was the reason why they did
not want to transact with him.

Records reveal that respondents were given due notice and opportunity to be heard before the
Board of Directors imposed the penalty of suspension as Club members.Respondents were
suspended in accordance with the procedure set forth in the Club's By-laws.

Way different from the trial court's findings, there is, therefore, no factual and legal basis to
grant moral and exemplary damages, attorney's fees and costs of suit in favor of respondents.
The damages suffered, if there are any, partake of the nature of a damnum absque injuria.

As elaborated in Spouses Custodio v. CA: xxx [T]he mere fact that the plaintiff suffered losses
does not give rise to a right to recover damages. To warrant the recovery of damages, there
must be both a right of action for a legal wrong inflicted by the defendant, and damage
resulting to the plaintiff therefrom. Wrong without damage, or damage without wrong, does
not constitute a cause of action, since damages are merely part of the remedy allowed for the
injury caused by a breach or wrong.

There is a material distinction between damages and injury. Injury is the illegal invasion of a
legal right; damage is the loss, hurt, or harm which results from the injury; and damages are
the recompense or compensation awarded for the damage suffered. Thus, there can be damage
without injury in those instances in which the loss or harm was not the result of a violation of a
legal duty. These situations are often called damnum absque injuria.
In order that a plaintiff may maintain an action for the injuries of which he complains, he must
establish that such injuries resulted from a breach of duty which the defendant owed to the
plaintiff - a concurrence of injury to the plaintiff and legal responsibility by the person causing
it. The underlying basis for the award of tort damages is the premise that an individual was
injured in contemplation of law. Thus, there must first be the breach of some duty and the
imposition of liability for that breach before damages may be awarded; it is not sufficient to
state that there should be tort liability merely because the plaintiff suffered some pain and
suffering.

Many accidents occur and many injuries are inflicted by acts or omissions which cause damage
or loss to another but which violate no legal duty to such other person, and consequently
create no cause of action in his favor. In such cases, the consequences must be borne by the
injured person alone. The law affords no remedy for damages resulting from an act which does
not amount to a legal injury or wrong.

In other words, in order that the law will give redress for an act causing damage, that act must
be not only hurtful, but wrongful. There must be damnum et injuria. If, as may happen in many
cases, a person sustains actual damage, that is, harm or loss to his person or property, without
sustaining any legal injury, that is, an act or omission which the law does not deem an injury,
the damage is regarded as damnum absque injuria.
xxxx

The proper exercise of a lawful right cannot constitute a legal wrong for which an action will
lie, although the act may result in damage to another, for no legal right has been invaded. One
may use any lawful means to accomplish a lawful purpose and though the means adopted may
cause damage to another, no cause of action arises in the latter's favor. Any injury or damage
occasioned thereby is damnum absque injuria. The courts can give no redress for hardship to
an individual resulting from action reasonably calculated to achieve a lawful end by lawful
means.

"One who makes use of his own legal right does no injury. Qui jure suo utitur nullum damnum
facit. If damage results from a person's exercising his legal rights, it is damnum absque injuria.
In this case, respondents failed to prove by preponderance of evidence that there is fault or
negligence on the part of petitioners in order to oblige them to pay for the alleged damage
sustained as a result of their suspension as Club members. Certainly, membership in the Club is
a privilege.Regular members are entitled to use all the facilities and privileges of the Club,
subject to its rules and regulations.As correctly pointed out by petitioners, the mental anguish
respondents experienced, assuming to be true, was brought upon them by themselves for
deliberately and consciously violating the rules and regulations of the Club. Considering that
respondents were validly suspended, there is no reason for the Club to compensate them.
Indeed, the penalty of suspension provided for in Section 1, Article XIV of the By-Laws is a
means to protect and preserve the interest and purposes of the Club. This being so, the
suspension of respondents does not fell under any of the provisions of the Civil Code
pertaining to the grant of moral and exemplary damages, attorney's fees, and litigation costs.

DAMNUM ABSQUE INJURIA

 MANALOTO V. VELASCO III

FACTS: A complaint for unlawful detainer case filed by [herein petitioners] against [herein
respondent]. It was alleged that they are the lessors of a residential house located at No. 42 Big
Horseshoe Drive, Horseshoe Village, Quezon City [subject property] which was leased to
respondent at a monthly rental of P17,000.00. The action was instituted on the ground of
respondents failure to pay rentals from May 23, 1997 to December 22, 1998 despite repeated
demands. Respondent denied the non-payment of rentals and alleged that he made an advance
payment of P825,000.00 when he paid for the repairs done on the leased property.

MeTC decided in favor of petitioners. On appeal, RTC, Branch 88, Quezon City reversed the
MeTC decision. Respondent was ordered to pay arrearages from May 23, 1997 up to the date of
the decision but he was also given an option to choose between staying in the leased property
or vacating the same, subject to the reimbursement by petitioners of one half of the value of
the improvements which it found to be in the amount of P120,000.00. Respondent was also
given the right to remove said improvements pursuant to Article 1678 of the Civil Code, should
petitioners refuse to pay P60,000.00.

After successive appeals to the CA and the SC, the decision of the RTC which reversed the
decision of the MeTC, became final and executory.Whilst respondent‘s appeal of the (MeTC)
judgment in the unlawful detainer case was pending before the RTC-Branch 88, respondent
filed before the RTC-Branch 227 a Complaint for Breach of Contract and Damages docketed as
Civil Case No. Q-02- 48341. The compalaint‘s first cause of action was for damages because
the respondent supposedly suffered embarrassment and humiliation when petitioners
distributed copies of the above-mentioned MeTC decision in the unlawful detainer case to the
homeowners of Horseshoe Village while respondents appeal was still pending before the
Quezon City RTC-Branch 88. The second cause of action was for breach of contract since
petitioners, as lessors, failed to make continuing repairs on the subject property to preserve
and keep it tenantable.

RTC-Branch 227 dismissed complaint in Civil Case No. Q-02-48341 for violating the rule
against splitting of cause of action, lack of jurisdiction, and failure to disclose the pendency of a
related case since it involved the same facts, parties, and causes of action as those in the
unlawful detainer case, and the MeTC had already properly taken cognizance of the latter case.
On appeal, the CA fully agreed with the RTC-Branch 227. However, it held that RTC-Branch 227
should have proceeded with the trial on the merits of the first cause of action (i.e., damages).
The CA found that petitioners were indeed liable to respondent for moral and exemplary
damages ruling that the distribution of the copies of MeTC Decision pending appeal was
primarily intended to embarrass respondent in the community he mingled in and found that
there was evident bad faith intended to mock respondents right to appeal which is a statutory
remedy to correct errors which might have been committed by the lower court.

ISSUE: Whether or not respondent has a cause of action in his complaint for damages.
HELD: YES The Courtruled that RTC-Branch 227 should not have dismissed respondents
complaint for damages on the ground of failure to state a cause of action. When the ground for
dismissal is that the complaint states no cause of action, such fact can be determined only from
the facts alleged in the complaint and from no other, and the court cannot consider other
matters aliunde. Thus, the test is whether, assuming the allegations of fact in the complaint to
be true, a valid judgment could be rendered in accordance with the prayer stated therein.

A cause of action for damages exists if the following elements are present: (1) a right in favor
of the plaintiff by whatever means and under whatever law it arises or is created; (2) an
obligation on the part of the named defendant to respect or not to violate such right; and (3) an
act or omission on the part of such defendant violative of the right of the plaintiff or
constituting a breach of the obligation of defendant to the plaintiff for which the latter may
maintain an action for recovery of damages. The Court found that all three elements exist in
the case at bar. Respondent may not have specifically identified each element, but it may be
sufficiently determined from the allegations in his complaint.

First, respondent filed the complaint to protect his good character, name, and reputation.
Every man has a right to build, keep, and be favored with a good name.This right is protected
by law with the recognition of slander and libel as actionable wrongs, whether as criminal
offenses or tortuous conduct.

Second, petitioners are obliged to respect respondent‘s good name even though they are
opposing parties in the unlawful detainer case. As Article 19 of the Civil Code requires, 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. A violation of such principle
constitutes an abuse of rights, a tortuous conduct. We expounded in Sea Commercial
Company, Inc. v. Court of Appeals that:

“The principle of abuse of rights stated in the above article, departs from the classical theory that
he who uses a right injures no one. The modern tendency is to depart from the classical and
traditional theory, and to grant indemnity for damages in cases where there is an abuse of rights,
even when the act is not illicit.”

“Article 19 was intended to expand the concept of torts by granting adequate legal remedy for the
untold number of moral wrongs which is impossible for human foresight to provide specifically in
statutory law. If mere fault or negligence in ones acts can make him liable for damages for injury
caused thereby, with more reason should abuse or bad faith make him liable. The absence of good
faith is essential to abuse of right. Good faith is an honest intention to abstain from taking any
unconscientious advantage of another, even through the forms or technicalities of the law,
together with an absence of all information or belief of fact which would render the transaction
unconscientious. In business relations, it means good faith as understood by men of affairs.”

“While Article 19 may have been intended as a mere declaration of principle, the cardinal law on
human conduct expressed in said article has given rise to certain rules, e.g. that where a person
exercises his rights but does so arbitrarily or unjustly or performs his duties in a manner that is
not in keeping with honesty and good faith, he opens himself to liability. The elements of an abuse
of rights under Article 19 are: (1) there is a legal right or duty; (2) which is exercised in bad faith;
(3) for the sole intent of prejudicing or injuring another.”

Petitioners are also expected to respect respondent‘s dignity, personality, privacy and peace of
mind under Article 261of the Civil Code.Thus, Article 2219(10) of the Civil Code allows the
recovery of moral damages for acts and actions referred to in Article 26, among other
provisions, of the Civil Code.In Concepcion v. Court of Appeals, the Court explained that:

“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. Thus, under this article, the rights of persons are amply protected, and damages are
provided for violations of a person’s dignity, personality, privacy and peace of mind.”

“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 person’s dignity, such as
profane, insulting, humiliating, scandalous or abusive language. 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.”

And third, respondent alleged that the distribution by petitioners to Horseshoe Village
homeowners of copies of the MeTC decision in the unlawful detainer case, which was adverse
to respondent and still on appeal before the RTC-Branch 88, had no apparent lawful or just
purpose except to humiliate respondent or assault his character. As a result, respondent
suffered damages becoming the talk of the town and being deprived of his political career.

Petitioners reason that respondent has no cause of action against them since the MeTC
decision in the unlawful detainer case was part of public records. It is already settled that the
public has a right to see and copy judicial records and documents. However, this is not a case of
the public seeking and being denied access to judicial records and documents. The controversy
is rooted in the dissemination by petitioners of the MeTC judgment against respondent to
Horseshoe Village homeowners, who were not involved at all in the unlawful detainer case,
thus, purportedly affecting negatively respondent‘s good name and reputation among said
homeowners. The unlawful detainer case was a private dispute between petitioners and
respondent, and the MeTC decision against respondent was then still pending appeal before
the RTC-Branch 88, rendering suspect petitioners intentions for distributing copies of said
MeTC decision to non-parties in the case. While petitioners were free to copy and distribute
such copies of the MeTC judgment to the public, the question is whether they did so with the
intent of humiliating respondent and destroying the latter‘s good name and reputation in the
community.

Nevertheless, the CA erred in already awarding moral and exemplary damages in respondents
favor when the parties have not yet had the chance to present any evidence. In civil cases, he
who alleges a fact has the burden of proving it by a preponderance of evidence. It is incumbent
upon the party claiming affirmative relief from the court to convincingly prove its claim. Bare
allegations, unsubstantiated by evidence are not equivalent to proof under our Rules. In short,
mere allegations are not evidence.

At this point, the finding of the CA of bad faith and malice on the part of petitioners has no
factual basis. Good faith is presumed and he who alleges bad faith has the duty to prove the
same. Good faith refers to the state of the mind which is manifested by the acts of the
individual concerned. It consists of the intention to abstain from taking an unconscionable and
unscrupulous advantage of another. Bad faith, on the other hand, does not simply connote bad
judgment to simple negligence. It imports a dishonest purpose or some moral obliquity and
conscious doing of a wrong, a breach of known duty due to some motive or interest or ill will
that partakes of the nature of fraud. Malice connotes ill will or spite and speaks not in response
to duty. It implies an intention to do ulterior and unjustifiable harm.

The Court cannot subscribe to respondents argument that there is no more need for the
presentation of evidence by the parties since petitioners, in moving for the dismissal of
respondents complaint for damages, hypothetically admitted respondents allegations. The
hypothetical admission of respondent‘s allegations in the complaint only goes so far as
determining whether said complaint should be dismissed on the ground of failure to state a
cause of action. A finding that the complaint sufficiently states a cause of action does not
necessarily mean that the complaint is meritorious; it shall only result in the reinstatement of
the complaint and the hearing of the case for presentation of evidence by the parties.

RAVINA V. VILLA ABRILLE

FACTS: Mary Ann and Pedro Villa-Abrille are husband and wife. They begot 4 children. During
the marriage they acquired parcel of land (Lot 1) which is adjacent to a lot (Lot 2) acquired by
Pedro when he was still single. Through their joint efforts and a loan from the bank, they
constructed a house which covers both lots. However, Pedro eventually had a mistress and
began to neglect his family. He then sold the house and lot to Spouses Ravina without Mary
Ann‘s consent, as evidenced by a Deed of Sale without Mary Ann‘s signature.

One day, Pedro and Spouses Ravina, together with armed forces from CAFGU surreptitiously
transfer Mary Ann and her children‘s belongings outside the house and was eventually
prohibited from entering the same. Mary Ann filed a case for Annulment of Sale, Specific
Performance with prayer for damages.

Pedro proffered that the properties are exclusively his. He alleged that the money used to
purchase Lot 1 are proceeds from a previous sale of a parcel of land owned by him, in effect the
purchase of the subject land is by barter or exchange. Spouses Ravina, on the other hand, allege
that they are purchasers in good faith who merely relied on the title of the property. The RTC
ruled that the sale is valid as to one-half (1/2) of the properties and awarded moral damages
to Mary Ann and her children, as well as exemplary damages. The CA modified the decision. It
ruled that the sale of Lot 2 is valid while the sale of Lot 1 and the house is null and void. It also
ordered the payment of damages.

ISSUE: Whether or not the petitioners are liable.

HELD: The sale of Lot 2 is valid, the property exclusively belongs to Pedro. On the other hand,
the sale of Lot 1 and the house therein is void. Art. 160 of the New Civil Code provides that, “All
property of the marriage is presumed to belong to the conjugal partnership unless it be proved
it pertains exclusively to the husband or wife.” Lot 1 is acquired during the marriage, the
presumption of conjugal nature subsists in the absence of clear, satisfactory and convincing
evidence to overcome said presumption or to prove that the subject property is exclusively
owned. Pedro‘s bare assertion would not suffice to overcome said presumption. In addition the
house is a conjugal property having been built thru their joint efforts.

To further amplify the nullity of the sale, the Family Code provides that, a sale or encumbrance
of conjugal property concluded after the effectivity of the Family Code on August 3, 1988. The
Family Code provides that the disposition of a conjugal property shall be void if without the
consent of both the husband and wife. If the sale is with knowledge but without approval of
either spouse, the sale is annullable within 5 years from the date of the sale.In the present case,
the sale was concluded in 1991, hence covered by the Family Code, and Mary Ann brought the
case within 5 years from said sale.

As to Spouses Ravina they are not buyers in good faith. Indeed a buyer is only required to rely
on the face of the title, but the same is not true when the seller has restricted capacity to sell,
such as that provided in Art 124 of the Family Code. The buyer is now required to inquire the
seller‘s capacity to establish good faith. In the case, the property is registered in the name of
the Mary Ann and Pedro, however Mary Ann‘s conformity did not appear in the Deed of Sale.
Also at the time of the sale, Mary Ann and her children are the occupants of the said property,
the Spouses were even apprised by Mary Ann‘s lawyer that the property is not exclusively
Pedro‘s. All told, the circumstance does not establish Spouses Ravina‘s good faith.

As to the award of damages, the Court ruled that the same was supported by evidence. The
manner by which Mary Ann and her children were removed from the family home deserves
condemnation. Firmly established in civil law is the doctrine 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. When a right is exercised in a manner that
does not conform with such norms and results in damages to another, a legal wrong is
thereby committed for which the wrong doer must be held responsible. Similarly, any
person who willfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damages
caused. It is patent in the case that the alleged acts fall short of these established civil
law standards.
 VALLEY GOLF & COUNTRY CLUB V. VDA. DE CARAM

MERALCO V. SPS. RAMOS

ARDIENTE V. PASTORFIDE

MARSMAN & CO. V. LIGOT

ALBENSON ENT. CORP. V. COURT OF APPEALS

DRILON V. COURT OF APPEALS

WASSMER V. VELEZ

REPUBLIC V. LACAP

UY V. PUBLIC ESTATE ATTORNEY

REPUBLIC V. COURT OF APPEALS

GREGORIO V. COURT OF APPEALS

FACTS: The case arose from the filing of an Affidavit of Complaint for violation of B.P. 22 by
Emma J. Datuin (Datuin), as Officer-in-Charge of the Accounts Receivables Department, and
upon authority of Sansio Philippines, Inc. (Sansio), against Zenaida R. Gregorio (Gregorio) and
one Vito Belarmino, as proprietors of Alvi Marketing, allegedly for delivering insufficiently
funded bank checks as payment for the numerous appliances bought by Alvi Marketing from
Sansio. As the address stated in the complaint was incorrect, Gregorio was unable to
controvert the charges against her. Consequently, she was indicted for three (3) counts of
violation of B.P. Blg. 22.

The MeTC issued a warrant for her arrest, and it was served upon her by the armed operatives
of the Public Assistance and Reaction Against Crime (PARAC) of the Department of Interior and
Local Government (DILG) on October 17, 1997, Friday, at around 9:30 a.m. in Quezon City
while she was visiting her husband and their two (2) daughters at their city residence.
Gregorio was brought to the PARAC-DILG Office where she was subjected to fingerprinting and
mug shots, and was detained. She was released in the afternoon of the same day when her
husband posted a bond for her temporary liberty.

On December 5, 1997, Gregorio filed before the MeTC a Motion for Deferment of Arraignment
and Reinvestigation, alleging that she could not have issued the bounced checks, since she did
not even have a checking account with the bank on which the checks were drawn, as certified
by the branch manager of the Philippine National Bank, Sorsogon Branch. She also alleged that
her signature was patently and radically different from the signatures appearing on the
bounced checks.
The MeTC granted the Motion and a reinvestigation was conducted. In the course of the
reinvestigation, Datuin submitted an Affidavit of Desistance stating, among others, that
Gregorio was not one of the signatories of the bounced checks subject of prosecution.

On August 18, 2000, Gregorio filed a complaint for damages against Sansio and Datuin before
the Regional Trial Court (RTC), Branch 12, Ligao, Albay. Sansio and Datuin filed a Motion to
Dismiss on the ground that the complaint, being one for damages arising from malicious
prosecution, failed to state a cause of action, as the ultimate facts constituting the elements
thereof were not alleged in the complaint.

ISSUE: Whether the complaint, a civil suit filed by Gregorio, is based on quasi-delict or
malicious prosecution.

HELD: A perusal of the allegations of Gregorio’s complaint for damages readily shows that she
filed a civil suit against Sansio and Datuin for filing against her criminal charges for violation of
B.P. Blg. 22; that respondents did not exercise diligent efforts to ascertain the true identity of
the person who delivered to them insufficiently funded checks as payment for the various
appliances purchased; and that respondents never gave her the opportunity to controvert the
charges against her, because they stated an incorrect address in the criminal complaint.
Gregorio claimed damages for the embarrassment and humiliation she suffered when she was
suddenly arrested at her city residence in Quezon City while visiting her family. She was, at the
time of her arrest, a respected Kagawad in Oas, Albay. Gregorio anchored her civil complaint
on Articles 26, 2176, and 2180 of the Civil Code. Noticeably, despite alleging either fault or
negligence on the part of Sansio and Datuin, Gregorio never imputed to them any bad faith in
her complaint.

Basic is the legal principle that the nature of an action is determined by the material averments
in the complaint and the character of the relief sought. Undeniably, Gregorio’s civil complaint,
read in its entirety, is a complaint based on quasi-delict under Article 2176, in relation to
Article 26 of the Civil Code, rather than on malicious prosecution.

In every tort case filed under Article 2176 of the Civil Code, the plaintiff has to prove by a
preponderance of evidence: (1) the damages suffered by him; (2) the fault or negligence of the
defendant or some other person to whose act he must respond; (3) the connection of cause
and effect between the fault or negligence and the damages incurred; and (4) that there must
be no preexisting contractual relation between the parties.

On the other hand, Article 26 of the Civil Code grants a cause of action for damages,
prevention, and other relief in cases of breach, though not necessarily constituting a criminal
offense, of the following rights: (1) right to personal dignity; (2) right to personal security; (3)
right to family relations; (4) right to social intercourse; (5) right to privacy; and (6) right to
peace of mind.

A scrutiny of Gregorio’s civil complaint reveals that the averments thereof, taken together,
fulfill the elements of Article 2176, in relation to Article 26 of the Civil Code. It appears that
Gregorio’s rights to personal dignity, personal security, privacy, and peace of mind were
infringed by Sansio and Datuin when they failed to exercise the requisite diligence in
determining the identity of the person they should rightfully accuse of tendering insufficiently
funded checks. This fault was compounded when they failed to ascertain the correct address of
petitioner, thus depriving her of the opportunity to controvert the charges, because she was
not given proper notice. Because she was not able to refute the charges against her, petitioner
was falsely indicted for three (3) counts of violation of B.P. Blg. 22. Although she was never
found at No. 76 Peñaranda St., Legaspi City, the office address of Alvi Marketing as stated in the
criminal complaint, Gregorio was conveniently arrested by armed operatives of the PARAC-
DILG at her city residence at 78 K-2 St., Kamuning, Quezon City, while visiting her family. She
suffered embarrassment and humiliation over her sudden arrest and detention and she had to
spend time, effort, and money to clear her tarnished name and reputation, considering that she
had held several honorable positions in different organizations and offices in the public
service, particularly her being a Kagawad in Oas, Albay at the time of her arrest. There exists
no contractual relation between Gregorio and Sansio. On the other hand, Gregorio is
prosecuting Sansio, under Article 2180 of the Civil Code, for its vicarious liability, as employer,
arising from the act or omission of its employee Datuin.

These allegations, assuming them to be true, sufficiently constituted a cause of action against
Sansio and Datuin. Thus, the RTC was correct when it denied respondents’ motion to dismiss.

ZULUETA V. NICOLAS

The privacy of communication and correspondence shall be inviolable, except upon lawful order
of the court, or when public safety or order requires otherwise as prescrbied by law. Any evidence
obtained in violation of this or the preceeding section, shall inadmissible for any purpose in any
proceeding.

FACTS: Petitioner Cecilia Zulueta is the wife of private respondent Alfredo Martin. On March
26, 1962, petitioner entered the clinic of her husband, a doctor of medicine, and in the
presence of her mother, a driver and private respondent's secretary, forcibly opened the
drawers and cabinet of her husband's clinic and took 157 documents consisting of private
respondents between Dr. Martin and his alleged paramours, greeting cards, cancelled check,
diaries, Dr. Martin's passport, and photographs. The documents and papers were seized for use
in evidence in a case for legal separation and for disqualification from the practice of medicine
which petitioner had filed against her husband.

ISSUE: Whether or not the papers and other materials obtained from forcible entrusion and
from unlawful means are admissible as evidence in court regarding marital separation and
disqualification from medical practice.

HELD: Indeed the documents and papers in question are inadmissible in evidence. The
constitutional injuction declaring "the privacy of communication and correspondence to be
inviolable" is no less applicable simply because it is the wife (who thinks herself aggrieved by
her husband's infedility) who is the party against whom the constitutional provision is to be
enforced. The only exception to the prohibition in the constitution is if there is a "lawful order
from the court or which public safety or order require otherwise, as prescribed by law." Any
violation of this provision renders the evidence obtained inadmissible "for any purpose in any
proceeding."

The intimacies between husband and wife do not justify anyone of them in breaking the
drawers and cabinets of the other and in ransacking them for any telltale evidence of marital
infedility. A person, by contracting marriage, does not shed her/his integrity or her/his right to
privacy as an individual and the constitutional protection is ever available to him or to her.

The law insures absolute freedom of communication between the spouses by making it
privileged. Neither husband nor wife may testify for or against the other without the consent of
the affected spouse while the marriage subsists. Neither may be examined without the consent
of the other as to any communication received in confidence by one from the other during the
marriage, save for specified exceptions. But one thing is freedom of communication; quite
another is a compulsion for each one to share what one knows with the other. And this has
nothing to do with the duty of fidelity that each owes to the other.

WILLAWARE PRODUCTS CORP. V. JESICHRIS MANUFACTURING

FACTS: Jesichris Manufacturing Company the respondent filed this present complaint for
damages for unfair competition with prayer for permanent injunction to enjoin Willaware
Products Corporation the petitioner from manufacturing and distributing plastic-made
automotive parts similar to Jesichris Manufacturing Company. The respondent, alleged that it
is a duly registered partnership engaged in the manufacture and distribution of plastic and
metal products, with principal office at No. 100 Mithi Street, Sampalukan, Caloocan City. Since
its registration in 1992, Jesichris Manufacturing Company has been manufacturing in its
Caloocan plant and distributing throughout the Philippines plastic-made automotive parts.

Willaware Products Corporation, on the other hand, which is engaged in the manufacture and
distribution of kitchenware items made of plastic and metal has its office near that of the
Jesichris Manufacturing Company. Respondent further alleged that in view of the physical
proximity of petitioner’s office to respondent’s office, and in view of the fact that some of the
respondent’s employees had transferred to petitioner, petitioner had developed familiarity
with respondent’s products, especially its plastic-made automotive parts.

That sometime in November 2000, [respondent] discovered that [petitioner] had been
manufacturing and distributing the same automotive parts with exactly similar design, same
material and colors but was selling these products at a lower price as [respondent’s] plastic-
made automotive parts and to the same customers.

Respondent alleged that it had originated the use of plastic in place of rubber in the
manufacture of automotive under chassis parts such as spring eye bushing, stabilizer bushing,
shock absorber bushing, center bearing cushions, among others. [Petitioner’s] manufacture of
the same automotive parts with plastic material was taken from respondent’s idea of using
plastic for automotive parts. Also, [petitioner] deliberately copied [respondent’s] products all
of which acts constitute unfair competition, is and are contrary to law, morals, good customs
and public policy and have caused [respondent] damages in terms of lost and unrealized
profits in the amount of 2,000,000 as of the date of respondent’s complaint.

ISSUES:
1. Whether or not there is unfair competition under human relations when the parties are
not competitors and there is actually no damage on the part of Jesichris?
2. Consequently, if there is no unfair competition, should there be moral damages and
attorney’s fees?
3. Whether or not the addition of nominal damages is proper although no rights have been
established?

HELD: Article 28 of the Civil Code provides that "unfair competition in agricultural,
commercial or industrial enterprises or in labor through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method shall give rise to a right of
action by the person who thereby suffers damage."

From the foregoing, it is clear that what is being sought to be prevented is not competition per
se but the use of unjust, oppressive or high handed methods which may deprive others of a fair
chance to engage in business or to earn a living. Plainly,what the law prohibits is unfair
competition and not competition where the means use dare fair and legitimate.

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.

However, since the award of Two Million Pesos (P2,000,000.00) in actual damages had been
deleted and in its place Two Hundred Thousand Pesos (P200,000.00) in nominal damages is
awarded, the attorney's fees should concomitantly be modified and lowered to Fifty Thousand
Pesos (P50,000.00).

COCA COLA BOTTLERS PHILS. V. SPS. BERNARDO

The use of unjust, oppressive, or high-handed business methods resulting in unfair competition
also gives a right of action to the injured party.

FACTS: Respondents, doing business under the name "Jolly Beverage Enterprises," are
distributors of petitioner under an exclusive dealership contract.

Sometime in late 1998 or early 1999, before the contract expired, petitioner required
respondents to submit a list of their customers on the pretext that it would formulate a policy
defining its territorial dealership in Quezon City. It assured respondents that their contract
would be renewed for a longer period, provided that they would submit the list. However,
despite their compliance, the promise did not materialize.

Respondents later discovered that petitioner has been reaching out to respondents’ clients.
Petitioner also employed pricing schemes that caused respondents to lose their major
customers. As a result, respondents filed a Complaint for damages, alleging that the acts of
petitioner constituted dishonesty, bad faith, gross negligence, fraud, and unfair competition in
commercial enterprise. Petitioner denied the allegations and claimed that the Complaint was a
mere ploy resorted to by respondents to evade the payment of the deliveries.

The RTC held petitioner liable for damages for abuse of rights in violation of Articles 19, 20,
and 21 of the Civil Code and for unfair competition under Article 28. The CA affirmed the RTC
ruling.

ISSUE: Whether or not the award of damages and attorney's fees was proper.

HELD: Articles 19, 20, and 21 of the Civil Code provide the legal bedrock for the award of
damages to a party who suffers damage whenever another person commits an act in violation
of some legal provision; or an act which, though not consitituting a transgression of positive
law, nevertheless violates certain rudimentary rights of the party aggrieved. Under any of
these provisions, an act that causes injury to another may be made the basis for an award of
damages. Meanwhile, the use of unjust, oppressive, or high-handed business methods resulting
in unfair competition also gives a right of action to the injured party, pursuant to Article 28 of
the Civil Code.

Here, petitioner had employed oppressive and high-handed schemes to unjustly limit the
market coverage and diminish the investment returns of respondents. Petitioner took
advantage of the information provided by respondents to facilitate its takeover of the latter's
usual business area. Distributors like respondents, who had assisted petitioner in its
marketing efforts, suddenly found themselves with fewer customers.

The CA correctly ruled that the award of temperate damages was justified, even if it was not
specifically prayed for, because 1) respondents prayed for the grant of "other reliefs," and 2)
the award was clearly warranted under the circumstances. Indeed, the law permits judges to
award a different kind of damages as an alternative to actual damages. Article 2224 of the Civil
Code provides that temperate or moderate damages, which are more than nominal but less
than compensatory damages, may be recovered when the court finds that some pecuniary loss
has been suffered but its amount can not, from the nature of the case, be provided with
certainty. Compensatory damages may be awarded in the concept of temperate damages for
injury to business reputation or business standing, loss of goodwill, and loss of customers who
shifted their patronage to competitors. In this case, both the RTC and the CA found that
respondents had suffered pecuniary loss by reason of petitioner's high-handed machinations
to eliminate competition in the market. However, the unpaid obligation of respondents shall be
offset against the temperate damages due them from petitioner.

The award of moral damages, on the other hand, finds legal basis under Article 2219(10) of the
Civil Code, which states that moral damages may be recovered in acts and actions referred to
in Articles 21 and 28. Similarly, the award of exemplary damages is justified by Article 2229 of
the Civil Code to caution powerful business owners against the use of oppressive and high-
handed commercial strategies to target and trample on the rights of small business owners,
who are striving to make a decent living. The grant of attorney's fees was also warranted
because of the award of exemplary damages.
VINSONS-CHATO V. FORTUNE TOBACCO CORP.