300

SUPREMECOURTREPORTSANNOTATED
ASJ Corporation vs. Evangelista
*

G.R.No.158086.February14,2008.

ASJ CORPORATION and ANTONIO SAN JUAN,

petitioners,vs.SPS. EFREN & MAURA EVANGELISTA,
respondents.
Certiorari; Appeals; Pleadings and Practice; Only errors of law
are reviewable by the Supreme Court in a petition for review under
Rule 45.Petitionersseektoestablishasetoffactscontrarytothe
factual findings of the trial and appellate courts. However, as well
established in our jurisprudence, only errors of law are reviewable
bythisCourtinapetitionforreviewunderRule45.Thetrialcourt,
having had the opportunity to personally observe and analyze the
demeanorofthewitnesseswhiletestifying,isinabetterpositionto
pass judgment on their credibility. More importantly, factual
findings of the trial court, when amply supported by evidence on
record and affirmed by the appellate court, are binding upon this
Court and will not be disturbed on appeal. While there are
exceptional circumstances when these findings may be set aside,
noneofthemispresentinthiscase.
Actions; Corporation Law; Piercing the Veil of Corporate
Fiction; Factors.Althoughnohardandfastrulecanbeaccurately
laiddownunderwhichthejuridicalpersonalityofacorporateentity
may be disregarded, the following probative factors of identity
justifytheapplicationofthedoctrineofpiercingtheveilofcorporate
fiction in this case: (1) San Juan and his wife own the bulk of
sharesofASJCorp.;(2)Thelotwherethehatcheryplantislocated
is owned by the San Juan spouses; (3) ASJ Corp. had no other
propertiesorassets,exceptforthehatcheryplantandthelotwhere
itislocated;(4)SanJuanisincompletecontrolofthecorporation;
(5)ThereisnobonafideintentiontotreatASJCorp.asadifferent
entity from San Juan; and (6) The corporate fiction of ASJ Corp.
wasusedbySanJuantoinsulatehimselffromthelegitimateclaims
of respondents, defeat public convenience, justify wrong, defend

crime, and evade a corporations subsidiary liability for damages.

These findings, being purely one of fact, should be respected. We
neednotassessandevaluatetheevidencealloveragainwherethe
findingsofbothcourtsonthesematterscoincide.
_______________
* SECONDDIVISION.

301

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301

ASJ Corporation vs. Evangelista

Obligations and Contracts; Application of Payment; Under
Article 1248 of the Civil Code, the creditor cannot be compelled to
accept partial payments from the debtor, unless there is an express
stipulation to that effect.Petitioners obligation to deliver the
chicks and byproducts corresponds to three dates: the date of
hatching, the delivery/pickup date and the date of respondents
payment. On several setting reports, respondents made delays on
their payments, but petitioners tolerated such delay. When
respondents accounts accumulated because of their successive
failuretopayonseveralsettingreports,petitionersoptedtodemand
thefullsettlementofrespondentsaccountsasaconditionprecedent
to the delivery. However, respondents were unable to fully settle
theiraccounts.Respondentsoffertopartiallysatisfytheiraccounts
is not enough to extinguish their obligation. Under Article 1248 of
the Civil Code, the creditor cannot be compelled to accept partial
paymentsfromthedebtor,unlessthereisanexpressstipulationto
thateffect.Moreso,respondentscannotsubstituteorapplyastheir
payment the value of the chicks and byproducts they expect to
derive because it is necessary that all the debts be for the same
kind,generallyofamonetarycharacter.Needlesstosay,therewas
novalidapplicationofpaymentinthiscase.
Same; Reciprocal obligations are those which arise from the
same cause, wherein each party is a debtor and a creditor of the
other, such that the performance of one is conditioned upon the
simultaneous fulfillment of the otherfrom the moment one of the
parties fulfills his obligation, delay by the other party begins.It
was respondents who violated the very essence of reciprocity in
contracts,consequentlygivingrisetopetitionersrightofretention.
This case is clearly one among the species of nonperformance of a

reciprocal obligation. Reciprocal obligations are those which arise

fromthesamecause,whereineachpartyisadebtorandacreditor
of the other, such that the performance of one is conditioned upon
the simultaneous fulfillment of the other. From the moment one of
thepartiesfulfillshisobligation,delaybytheotherpartybegins.
Abuse of Rights; Elements; Even if a party has the right to do
something, he has no right to engage in highhanded and
oppressive acts.San Juans subsequent acts of threatening
respondentsshouldnotremainamongthosetreatedwithimpunity.
Under Article 19 of the Civil Code, an act constitutes an abuse of
right if the following elements are present: (a) the existence of a
legalrightorduty;(b)
302

302

SUPREMECOURTREPORTSANNOTATED
ASJ Corporation vs. Evangelista

which is exercised in bad faith; and (c) for the sole intent of
prejudicing or injuring another. Here, while petitioners had the
right to withhold delivery, the highhanded and oppressive acts of
petitioners,asaptlyfoundbythetwocourtsbelow,hadnolegalleg
tostandon.Weneednotweighthecorrespondingpiecesofevidence
all over again because factual findings of the trial court, when
adopted and confirmed by the appellate court, are binding and
conclusiveandwillnotbedisturbedonappeal.
Same; Damages; Where it was established that a person
suffered some pecuniary loss anchored on another persons abuse of
rights, although the exact amount of actual damages cannot be
ascertained, temperate damages are recoverable.Since it was
establishedthatrespondentssufferedsomepecuniarylossanchored
onpetitionersabuseofrights,althoughtheexactamountofactual
damages cannot be ascertained, temperate damages are
recoverable.Inarrivingatareasonableleveloftemperatedamages
of P408,852.10, which is equivalent to the value of the chicks and
byproducts, which respondents, on the average, are expected to
derive,thisCourtwasguidedbythefollowingfactors:(a)awardof
temperate damages will cover only Setting Report Nos. 109 to 113
sincethethreatsstartedonlyonFebruary10and11,1993,which
arethepickupdatesforSettingReportNos.109and110;therates
of (b) 41% and (c) 17%, representing the average rates of
conversion of broiler eggs into hatched chicks and egg byproducts

as tabulated by the trial court based on available statistical data

which was unrebutted by petitioners; (d) 68,784 eggs, or the total
number of broiler eggs under Setting Report Nos. 109 to 113; and
(e)P14.00and(f)P1.20,orthethenunitmarketpriceofthechicks
andbyproducts,respectively.
Same; Same; Where a persons conduct flouts the norms of civil
society, it justifies the award of moral and exemplary damagesas
enshrined in civil law jurisprudence: Honeste vivere, non alterum
laedere et jus suum cuique tribuere (To live virtuously, not to injure
others and to give everyone his due).We agree that petitioners
conduct flouts the norms of civil society and justifies the award of
moral and exemplary damages. As enshrined in civil law
jurisprudence: Honeste vivere, non alterum laedere et jus suum
cuique tribuere. To live virtuously, not to injure others and to give
everyone his due. Since exemplary damages are awarded,
attorneysfeesarealsoproper.
303

VOL.545,FEBRUARY14,2008

303

ASJ Corporation vs. Evangelista

PETITIONforreviewoncertiorariofadecisionoftheCourt
ofAppeals.
ThefactsarestatedintheopinionoftheCourt.
E.G. Ferry Law Officesforpetitioner.
Venustiano S. Roxas & Associates Law Office for
respondents.
QUISUMBING,J.:
1

ForreviewoncertiorariistheDecision datedApril30,2003
oftheCourtofAppealsinCAG.R.CVNo.56082,whichhad
2
affirmed the Decision dated July 8, 1996 of the Regional
Trial Court (RTC) of Malolos, Bulacan, Branch 9 in Civil
Case No. 745M93. The Court of Appeals, after applying
the doctrine of piercing the veil of corporate fiction, held
petitioners ASJ Corporation (ASJ Corp.) and Antonio San
Juan solidarily liable to respondents Efren and Maura
Evangelista for the unjustified retention of the chicks and
3
eggbyproductscoveredbySettingReportNos.108to113.
Thepertinentfacts,asfoundbytheRTCandtheCourt
ofAppeals,areasfollows:
Respondents, under the name and style of R.M. Sy

Chicks, are engaged in the largescale business of buying

broiler eggs, hatching them,
and selling their hatchlings
4
(chicks)andeggbyproducts inBulacanandNuevaEcija.
Fortheincubationandhatchingoftheseeggs,respondents
availedofthehatcheryservicesofASJCorp.,acorporation
dulyregisteredinthenameofSanJuanandhisfamily.
_______________
1 Rollo, pp. 2842. Penned by Associate Justice Romeo A. Brawner,

with Associate Justices Eliezer R. De Los Santos and Regalado E.

Maambongconcurring.
2Id.,atpp.7997.PennedbyJudgeD.RoyA.Masadao,Jr.
3Id.,atpp.6466.
4Id.,atp.30.Suchasbalut,penoyandexploders.

304

304

SUPREMECOURTREPORTSANNOTATED
ASJ Corporation vs. Evangelista

Sometime in 1991, respondents delivered to petitioners

various quantities of eggs at an agreed service fee of 80
centavosperegg,whethersuccessfullyhatchedornot.Each
delivery was reflected in a Setting Report indicating the
following:thenumberofeggsdelivered;thedateofsetting
or the date the eggs were delivered and laid out in the
incubators; the date of candling or the date the eggs,
throughalightingsystem,wereinspectedanddeterminedif
viableorcapableofbeinghatchedintochicks;andthedate
ofhatching,whichisalsothedaterespondentswouldpick
up the chicks and byproducts. Initially, the service fees
were paid upon release of the eggs and byproducts to
respondents.Butastheirbusinesswentalong,respondents
delaysontheirpaymentsweretoleratedbySanJuan,who
justcarriedoverthebalance,astheremaybe,intothenext
delivery,outofkeepinggoodwillwithrespondents.
FromJanuary13toFebruary3,1993,respondentshad
5
deliveredtoSanJuanatotalof101,3[50]
eggs,detailedas
6
follows:
Date Set

SR
Number

No. of eggs
delivered

Date hatched/
Pickup date

1/13/1993

SR108

32,566eggs

February3,
1993

1/20/1993

SR109

21,485eggs

February10,
1993

1/22/1993

SR110

7,213eggs

February12,
1993

1/28/1993

SR111

14,495eggs

February18,
1993

1/30/1993

SR112

15,346eggs

February20,
1993

2/3/1993

SR113

10,24[5] eggs

February24,
1993

TOTAL

101,350eggs

On February 3, 1993, respondent Efren went to the

hatchery to pick up the chicks and byproducts covered by
SettingReportNo.108,butSanJuanrefusedtoreleasethe
same due to respondents failure to settle accrued service
feesonseveral
_______________
5101,347inotherpartsoftheRecords.
6Rollo,pp.6466,81.
710,242inotherpartsoftheRecords.

305

VOL.545,FEBRUARY14,2008

305

ASJ Corporation vs. Evangelista

setting reports starting from Setting Report No. 90.
Nevertheless, San Juan accepted from Efren 10,245
eggs
8
coveredbySettingReportNo.113andP15,000.00 incash
aspartialpaymentfortheaccruedservicefees.
OnFebruary10,1993,Efrenreturnedtothehatcheryto
pick up the chicks and byproducts covered by Setting
ReportNo.109,butSanJuanagainrefusedtoreleasethe
same unless respondents fully settle their accounts. In the
afternoonofthesameday,respondentMaura,withherson
9
Anselmo, tendered P15,000.00 to San Juan, and tried to
claim the chicks and byproducts. She explained that she
was unable to pay their balance because she was
hospitalizedforanundisclosedailment.SanJuanaccepted
the P15,000.00, but insisted on the full settlement of

respondents accounts before releasing the chicks and by

products. Believing firmly that the total value of the eggs
deliveredwasmorethansufficienttocovertheoutstanding
balance,Maurapromisedtosettletheiraccountsonlyupon
properaccountingbySanJuan.SanJuandislikedtheidea
andthreatenedtoimpoundtheirvehicleanddetainthemat
the hatchery compound if they should come back
unpreparedtofullysettletheiraccountswithhim.
OnFebruary11,1993,respondentsdirectedtheirerrand
boy, Allan Blanco, to pick up the chicks and byproducts
covered by Setting Report No. 110 and also to ascertain if
San Juan was still willing to settle amicably their
differences.Unfortunately,SanJuanwasfirminhisrefusal
and reiterated his threats on respondents. Fearing San
Juans threats, respondents never went back to the
hatchery.
The parties tried to settle amicably their differences
beforepoliceauthorities,buttonoavail.Thus,respondents
filed with the RTC an action for damages based on
petitioners
_______________
8Rollo,p.67.
9Id.

306

306

SUPREMECOURTREPORTSANNOTATED
ASJ Corporation vs. Evangelista

retention of the chicks and byproducts covered by Setting

ReportNos.108to113.
OnJuly8,1996,theRTCruledinfavorofrespondents
andmadethefollowingfindings:(1)asofSettingReportNo.
10
107, respondents owed petitioners P102,336.80; (2)
petitioners withheld the release of the chicks11and by
productscoveredbySettingReportNos.108113; and (3)
theretentionofthechicksandbyproductswasunjustified
and accompanied
by threats and intimidations on
12
respondents.
TheRTCdisregardedthecorporatefictionof
13
ASJCorp., and held it and San Juan solidarily liable to
respondents for P529,644.80 as actual damages,
P100,000.00 as moral damages, P50,000.00 as attorneys
fees,plusinterestsandcostsofsuit.Thedecretalportionof

thedecisionreads:
WHEREFORE, based on the evidence on record and the
laws/jurisprudenceapplicablethereon,judgmentisherebyrendered
ordering the defendants to pay, jointly and severally, unto the
plaintiffstheamountsofP529,644.80,representingthevalueofthe
hatchedchicksandbyproductswhichtheplaintiffsontheaverage
expectedtoderiveunderSettingReportsNos.108to113,inclusive,
withlegalinterestthereonfromthedateofthisjudgmentuntilthe
same shall have been fully paid, P100,000.00 as moral damages
andP50,000.00asattorneysfees,plusthecostsofsuit.
14
SOORDERED.

BothpartiesappealedtotheCourtofAppeals.Respondents
prayed for an additional award of P76,139.00 as actual
damages for the cost of other unreturned byproducts and
P1,727,687.52 as unrealized profits, while petitioners
prayedforthereversalofthetrialcourtsentiredecision.
_______________
10Id.,atpp.8892.
11Id.,atpp.8788.
12Id.,atpp.9293.
13Id.,atpp.9394.
14Id.,atpp.9697.

307

VOL.545,FEBRUARY14,2008

307

ASJ Corporation vs. Evangelista

OnApril30,2003,theCourtofAppealsdeniedbothappeals
forlackofmeritandaffirmedthetrialcourtsdecision,with
theslightmodificationofincludinganawardofexemplary
damagesofP10,000.00infavorofrespondents.TheCourtof
Appeals, applying the doctrine of piercing the veil of
corporatefiction,consideredASJCorp.andSanJuanasone
entity,afterfindingthattherewasnobonafideintentionto
treat the corporation as separate and distinct from San
Juan and his wife Iluminada. The fallo of the Court of
Appealsdecisionreads:
WHEREFORE, in view of the foregoing, the Decision appealed
from is hereby AFFIRMED, with the slight modification that
exemplary damages in the amount of P10,000.00 are awarded to

plaintiffs.
Costsagainstdefendants.
15
SOORDERED.

Hence,theinstantpetition,assigningthefollowingerrors:
I.
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED
IN HOLDING, AS DID THE COURT A QUO, THAT
PETITIONERS WITHHELD/OR FAILED TO RELEASE THE
CHICKS AND BYPRODUCTS COVERED BY SETTING REPORT
NOS.108AND109.
II.
THE HONORABLE COURT OF APPEALS ERRED IN
ADMITTING THE HEARSAY TESTIMONY OF MAURA
EVANGELISTA SUPPORTIVE OF ITS FINDINGS THAT
PETITIONERS WITHHELD/OR FAILED TO RELEASE THE
CHICKS AND BYPRODUCTS COVERED BY SETTING REPORT
NOS.108AND109.
III.
THE HONORABLE COURT OF APPEALS, AS DID THE
COURT A QUO, ERRED IN NOT FINDING THAT
RESPONDENTS FAILED TO RETURN TO THE PLANT TO GET
THECHICKSANDBY
_______________
15Id.,atpp.4142.

308

308

SUPREMECOURTREPORTSANNOTATED
ASJ Corporation vs. Evangelista

PRODUCTS COVERED BY SETTING REPORT NOS. 110, 111,

112AND113.
IV.
THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING,ASDIDTHECOURTA QUO, THAT THE PIERCING
OF THE VEIL OF CORPORATE ENTITY IS JUSTIFIED, AND

CONSEQUENTLY HOLDING PETITIONERS JOINTLY AND

SEVERALLY LIABLE TO PAY RESPONDENTS THE SUM OF
P529,644.[80].
V.
THE HONORABLE COURT OF APPEALS ERRED IN
HOLDING THAT PETITIONERS HAVE VIOLATED THE
PRINCIPLES ENUNCIATED IN ART. 19 OF THE NEW CIVIL
CODE AND CONSEQUENTLY IN AWARDING MORAL
DAMAGES,EXEMPLARYDAMAGESANDATTORNEYSFEES.
VI.
THE HONORABLE COURT OF APPEALS ERRED IN NOT
16
AWARDINGPETITIONERSCOUNTERCLAIM.

Plainly, the issues submitted for resolution are: First, did

the Court of Appeals err when (a) it ruled that petitioners
withheld or failed to release the chicks and byproducts
coveredbySettingReportNos.108and109;(b)itadmitted
the testimony of Maura; (c) it did not find that it was
respondentswhofailedtoreturntothehatcherytopickup
the chicks and byproducts covered by Setting Report Nos.
110to113;and(d)itpiercedtheveilofcorporatefictionand
held ASJ Corp. and Antonio San Juan as one entity?
Second,wasitpropertoholdpetitionerssolidarilyliableto
respondents for the payment of P529,644.80 and other
damages?
In our view, there are two sets of issues that the
petitionershaveraised.
Thefirstsetisfactual.Petitionersseektoestablishaset
of facts contrary to the factual findings of the trial and
appellate
_______________
16Id.,atpp.1213.

309

VOL.545,FEBRUARY14,2008

309

ASJ Corporation vs. Evangelista

courts. However, as well established in our jurisprudence,
onlyerrorsoflawarereviewablebythisCourtinapetition

17

forreviewunderRule45. Thetrialcourt,havinghadthe
opportunity to personally observe and analyze the
demeanor of the witnesses while testifying, is in 18
a better
position to pass judgment on their credibility. More
importantly,factualfindingsofthetrialcourt,whenamply
supported by evidence on record and affirmed by the
appellatecourt,arebindinguponthisCourtandwillnotbe
19
disturbed on20 appeal. While there are exceptional
circumstances whenthesefindingsmaybesetaside,none
ofthemispresentinthiscase.
Based on the records, as well as the parties own
admissions,thefollowingfactswereuncontroverted:(1)As
of Setting Report No. 107, respondents were indebted to
petitioners for P102,336.80 21as accrued service fees for
SettingReportNos.90to107;
(2)Petitioners,basedonSan
22
Juansownadmission, did not release the chicks and by
productscov
_______________
17Estate

of Salvador Serra Serra v. Heirs of Primitivo Hernaez, G.R.

No.142913,August9,2005,466SCRA120,128129.
18 People

v. Galam, G.R. No. 114740, February 15, 2000, 325 SCRA

489,497.
19 MOF

Company, Inc. v. Enriquez, G.R. No. 149280, May 9, 2002,

382SCRA248,252.
20 Union

Refinery Corporation v. Tolentino, Sr., G.R. No. 155653,

September30,2005,471SCRA613,618619.
21Rollo,pp.8991.SeeTabulationofPaymentsandBalances.
22TSN,August16,1995,pp.2223.

ATTY.FERRY
xxxx
Q: Now,accordingtotheplaintiff[,]thechicksandspoiledeggs
correspondingtoSettingReportNos.108upto113werenot
releasedbyyourplantbecauseyourcompanyrefusedtorelease
thembecauseofthefactthatnopaymentwasmade,whatcanyou
saytothat?
xxxx
WITNESS
A: Thatistrue,sir.
310

310

SUPREMECOURTREPORTSANNOTATED
ASJ Corporation vs. Evangelista

ered by Setting Report Nos. 108 and 109 for failure of

respondents to fully settle their previous accounts; and (3)
Due to San Juans threats, respondents never returned to
thehatcherytopickupthosecoveredbySettingReportNos.
23
110to113.
Furthermore, although no hard and fast rule can be
accuratelylaiddownunderwhichthejuridicalpersonality
of a corporate entity may be disregarded, the following
probative factors of identity justify the application
of the
24
doctrineofpiercingtheveilofcorporatefiction inthiscase:
(1) San Juan and his wife own the bulk of shares of ASJ
Corp.; (2) The lot where the hatchery plant is located is
ownedbytheSanJuanspouses;(3)ASJCorp.hadnoother
properties or assets, except for the hatchery plant and the
lotwhereitislocated;(4)SanJuanisincompletecontrolof
thecorporation;(5)Thereisnobonafideintentiontotreat
ASJCorp.asadifferententityfromSanJuan;and(6)The
corporate fiction of ASJ Corp. was used by San Juan to
insulatehimselffromthelegitimateclaimsofrespondents,
defeatpublicconvenience,justifywrong,defendcrime,and
25
evade a corporations subsidiary liability for
damages.
26
These findings, being purely one of fact, should be
respected.Weneednotassessandevaluatetheevidenceall
over again where the findings of both courts on these
matterscoincide.
Onthesecondsetofissues,petitionerscontendthatthe
retention was justified and did not constitute an abuse of
rights since it was respondents who failed to comply with
their obligation. Respondents, for their part, aver that all
theelementsonabuseofrightswerepresent.Theyfurther
statethatdespitetheiroffertopartiallysatisfytheaccrued
servicefees,
_______________
23Rollo,pp.195196.
24

See Concept

Builders,

Inc.

v.

National

Labor

Relations

Commission,G.R.No.108734,May29,1996,257SCRA149,158.
25SeeRollo,pp.3437.
26 China

Banking Corporation v. DyneSem Electronics Corporation,

G.R.No.149237,July11,2006,494SCRA493,499.
311

VOL.545,FEBRUARY14,2008

311

ASJ Corporation vs. Evangelista

and the fact that the value of the chicks and byproducts
wasmorethansufficienttocovertheirunpaidobligations,
petitionersstillchosetowithholdthedelivery.
The crux of the controversy, in our considered view, is
simpleenough.Waspetitionersretentionofthechicksand
byproducts on account of respondents failure to pay the
corresponding service fees unjustified? While the trial and
appellate courts had the same decisions on the matter,
suffice it to say that a modification is proper. Worth
stressing,petitionersactofwithholdingthechicksandby
productsisentirelydifferentfrompetitionersunjustifiable
acts of threatening respondents. The retention had legal
basis;thethreatshadnone.
Tobeginwith,petitionersobligationtodeliverthechicks
and byproducts corresponds to three dates: the date of
hatching, the delivery/pickup date and the date of
respondents payment. On several setting reports,
respondentsmadedelaysontheirpayments,butpetitioners
tolerated such delay. When respondents accounts
accumulated because of their successive failure to pay on
severalsettingreports,petitionersoptedtodemandthefull
settlementofrespondentsaccountsasaconditionprecedent
tothedelivery.However,respondentswereunabletofully
settletheiraccounts.
Respondents offer to partially satisfy their accounts is
not enough
to extinguish their obligation. Under Article
27
1248 oftheCivilCode,thecreditorcannotbecompelledto
acceptpartialpaymentsfromthedebtor,unlessthereisan
express stipulation to that effect. More so, respondents
cannotsubstituteorapplyastheirpaymentthevalueofthe
chicks and byproducts they expect to derive because it is
necessarythatall
_______________
27ART.1248.Unlessthereisanexpressstipulationtothateffect,the

creditor cannot be compelled partially to receive the prestations in

which the obligation consists. Neither may the debtor be required to
makepartialpayments.xxxx
312

312

SUPREMECOURTREPORTSANNOTATED
ASJ Corporation vs. Evangelista

the debts be for the same kind, generally of a monetary

character.Needlesstosay,therewasnovalidapplicationof
paymentinthiscase.
Furthermore, it was respondents who violated the very
essenceofreciprocityincontracts,consequentlygivingrise
to petitioners right of retention. This case is clearly one
among the species of nonperformance of a reciprocal
obligation.Reciprocalobligationsarethosewhicharisefrom
the same cause, wherein each party is a debtor and a
creditor of the other, such that the performance of one is
28
conditioneduponthesimultaneousfulfillmentoftheother.
From the moment one of the parties
fulfills his obligation,
29
delaybytheotherpartybegins.
Sincerespondentsareguiltyofdelayintheperformance
oftheirobligations,theyareliabletopaypetitionersactual
damages of P183,416.80, computed as follows: From
respondents outstanding balance of P102,336.80, as of
Setting Report No.
107, we add the corresponding services
30
feesofP81,080.00 forSettingReportNos.108to113which
hadremainunpaid.
Nonetheless,SanJuanssubsequentactsofthreatening
respondents should not remain
among those treated with
31
impunity. Under Article 19 of the Civil Code, an act
constitutes an abuse of right if the following elements are
present:(a)theexistenceofalegalrightorduty;(b)whichis
exercised in bad faith; and (c) for the sole intent of
prejudicingorinjuring
_______________
28 Cortes

v. Court of Appeals, G.R. No. 126083, July 12, 2006, 494

SCRA570,576.
29CIVILCODE,Art.1169,lastparagraph.
30 Service Fees for Setting Report Nos. 108113 = Total No. of Eggs

DeliveredXP0.80peregg.
P81,080.00=101,350eggsXP0.80peregg.
31 ART. 19. Every person must, in the exercise of his rights and in

the performance of his duties, act with justice, give everyone his due,
andobservehonestyandgoodfaith.
313

VOL.545,FEBRUARY14,2008

313

ASJ Corporation vs. Evangelista

32

another. Here,whilepetitionershadtherighttowithhold
delivery,thehighhandedandoppressiveactsofpetitioners,
asaptlyfoundbythetwocourtsbelow,hadnolegallegto
stand on. We need not weigh the corresponding pieces of
evidencealloveragainbecausefactualfindingsofthetrial
court, when adopted and confirmed by the appellate court,
are binding
and conclusive and will not be disturbed on
33
appeal.
Since it was established that respondents suffered some
pecuniary loss anchored on petitioners abuse of rights,
although the exact amount of actual damages cannot be
ascertained, temperate damages are recoverable. In
arriving at a reasonable level of temperate damages of
P408,852.10,whichisequivalenttothevalueofthechicks
and byproducts, which respondents, on the average, are
expected to derive, this Court was guided by the following
factors: (a) award of temperate damages will cover only
SettingReportNos.109to113sincethethreatsstartedonly
on February 10 and 11, 1993, which are the pickup dates
for Setting Report Nos. 109 and 110; the rates of (b) 41%
and(c)17%,representingtheaverageratesofconversionof
broiler eggs into hatched chicks and egg byproducts as
tabulated by the trial court based on available statistical
34
datawhichwasunrebuttedbypetitioners;(d)68,784eggs,
or the total number of broiler eggs under Setting Report
Nos.109to113;and(e)P14.00and(f)
_______________
32

Far East Bank and Trust Company v. Pacilan, Jr., G.R. No.

157314,July29,2005,465SCRA372,382.
33

Estate of Salvador Serra Serra v. Heirs of Primitivo Hernaez,

supranote17,atp.128.
34

SettingReportNo.

No.ofeggsdelivered

SRNo.109

21,485eggs

SRNo.110

7,213eggs

SRNo.111

4,495eggs

SRNo.112

15,346eggs

SRNo.113

10,245eggs

TOTAL

68,784eggs

314

314

SUPREMECOURTREPORTSANNOTATED
ASJ Corporation vs. Evangelista

P1.20, or the then unit market price of the chicks and

byproducts,respectively.
Thus,thetemperatedamagesofP408,852.10iscomputed
asfollows:
[bX(dXe)+cX(d
Xf)]

= Temperate
Damages

41%X(68,784eggs
XP14)

= P394,820.16

17%X(68,784eggs
XP1.20)

= P14,031.94

[P394,820.16+
P14,031.94]

= P408,852.10

At bottom, we agree that petitioners conduct flouts the

norms of civil society and justifies the award of moral and
exemplary damages. As enshrined in civil law
jurisprudence: Honeste vivere, non alterum laedere et jus
suum cuique tribuere.Tolivevirtuously,nottoinjureothers
35
and to give everyone his due. Since exemplary damages
areawarded,attorneysfeesarealsoproper.Article2208of
theCivilCodeprovidesthat:
In the absence of stipulation, attorneys fees and expenses of
litigation,otherthanjudicialcosts,cannotberecovered,except:
(1)Whenexemplarydamagesareawarded;
xxxx

WHEREFORE, the petition is PARTLY GRANTED. The

Decision dated April 30, 2003 of the Court of Appeals in
CAG.R.CVNo.56082isherebyMODIFIEDasfollows:
a. Respondents are ORDERED to pay petitioners
P183,416.80asactualdamages,withinterestof6%
from the date of filing of the complaint until fully
paid, plus legal interest of 12% from the finality of
thisdecisionuntilfullypaid.

_______________
35 Uypitching

v. Quiamco, G.R. No. 146322, December 6, 2006, 510

SCRA172,173.
315

VOL.545,FEBRUARY14,2008

315

ASJ Corporation vs. Evangelista

b. The award of actual damages of P529,644.80 in
favor of respondents is hereby REDUCED to
P408,852.10, with legal interest of 12% from the
dateoffinalityofthisjudgmentuntilfullypaid.
c. The award of moral damages, exemplary damages
and attorneys fees of P100,000.00, P10,000.00,
P50,000.00, respectively, in favor of respondents is
herebyAFFIRMED.
d. AllotherclaimsareherebyDENIED.
Nopronouncementastocosts.
SOORDERED.
Carpio, CarpioMorales, TingaandVelasco, Jr., JJ.,
concur.
Petition partly granted, judgment modified.
Notes.TheprincipleofabuseofrightsstatedinArticle
19 of the Civil Code departs from the classical theory that
hewhousesarightinjuresnoonethemoderntendency
istodepartfromtheclassicalandtraditionaltheory,andto
grant indemnity for damages in cases where there is an
abuse of rights, even when the act is not illicit. (Sea
Commercial Company, Inc. vs. Court of Appeals,319SCRA
210[1999])
Article 19 of the Civil Code, known to contain what is
commonlyreferredtoastheprincipleofabuseofrights,is
notapanaceaforallhumanhurtsandsocialgrievances,the
object of the article being to set certain standards which
mustbeobservednotonlyintheexerciseofonesrightsbut
alsointheperformanceofonesduties.(Nikko Hotel Manila
Garden vs. Reyes,452SCRA532[2005])
o0o

316

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