HUMAN RELATIONS CASES

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 88694 January 11, 1993

ALBENSON ENTERPRISES CORP., JESSE YAP, AND BENJAMIN MENDIONA, petitioners,
vs.
THE COURT OF APPEALS AND EUGENIO S. BALTAO, respondents.
Puruganan, Chato, Chato & Tan for petitioners.
Lino M. Patajo, Francisco Ma. Chanco, Ananiano Desierto and Segundo Mangohig for private
respondent.

BIDIN, J.:
This petition assails the decision of respondent Court of Appeals in
CA-GR CV No. 14948 entitled "Eugenio S. Baltao, plaintiff-appellee vs. Albenson Enterprises
Corporation, et al, defendants-appellants", which modified the judgment of the Regional Trial Court
of Quezon City, Branch XCVIII in Civil Case No. Q-40920 and ordered petitioner to pay private
respondent, among others, the sum of P500,000.00 as moral damages and attorney's fees in the
amount of P50,000.00.
The facts are not disputed.
In September, October, and November 1980, petitioner Albenson Enterprises Corporation (Albenson
for short) delivered to Guaranteed Industries, Inc. (Guaranteed for short) located at 3267 V. Mapa
Street, Sta. Mesa, Manila, the mild steel plates which the latter ordered. As part payment thereof,
Albenson was given Pacific Banking Corporation Check No. 136361 in the amount of P2,575.00 and
drawn against the account of E.L. Woodworks (Rollo, p. 148).
When presented for payment, the check was dishonored for the reason "Account Closed."
Thereafter, petitioner Albenson, through counsel, traced the origin of the dishonored check. From the
records of the Securities and Exchange Commission (SEC), Albenson discovered that the president
of Guaranteed, the recipient of the unpaid mild steel plates, was one "Eugenio S. Baltao." Upon
further inquiry, Albenson was informed by the Ministry of Trade and Industry that E.L. Woodworks, a
single proprietorship business, was registered in the name of one "Eugenio Baltao". In addition,
upon verification with the drawee bank, Pacific Banking Corporation, Albenson was advised that the
signature appearing on the subject check belonged to one "Eugenio Baltao."

After obtaining the foregoing information, Albenson, through counsel, made an extrajudicial demand
upon private respondent Eugenio S. Baltao, president of Guaranteed, to replace and/or make good
the dishonored check.
Respondent Baltao, through counsel, denied that he issued the check, or that the signature
appearing thereon is his. He further alleged that Guaranteed was a defunct entity and hence, could
not have transacted business with Albenson.
On February 14, 1983, Albenson filed with the Office of the Provincial Fiscal of Rizal a complaint
against Eugenio S. Baltao for violation of Batas Pambansa Bilang 22. Submitted to support said
charges was an affidavit of petitioner Benjamin Mendiona, an employee of Albenson. In said
affidavit, the above-mentioned circumstances were stated.
It appears, however, that private respondent has a namesake, his son Eugenio Baltao III, who
manages a business establishment, E.L. Woodworks, on the ground floor of the Baltao Building,
3267 V. Mapa Street, Sta. Mesa, Manila, the very same business address of Guaranteed.
On September 5, 1983, Assistant Fiscal Ricardo Sumaway filed an information against Eugenio S.
Baltao for Violation of Batas Pambansa Bilang 22. In filing said information, Fiscal Sumaway claimed
that he had given Eugenio S. Baltao opportunity to submit controverting evidence, but the latter
failed to do so and therefore, was deemed to have waived his right.
Respondent Baltao, claiming ignorance of the complaint against him, immediately filed with the
Provincial Fiscal of Rizal a motion for reinvestigation, alleging that it was not true that he had been
given an opportunity to be heard in the preliminary investigation conducted by Fiscal Sumaway, and
that he never had any dealings with Albenson or Benjamin Mendiona, consequently, the check for
which he has been accused of having issued without funds was not issued by him and the signature
in said check was not his.
On January 30, 1984, Provincial Fiscal Mauro M. Castro of Rizal reversed the finding of Fiscal
Sumaway and exonerated respondent Baltao. He also instructed the Trial Fiscal to move for
dismissal of the information filed against Eugenio S. Baltao. Fiscal Castro found that the signature in
PBC Check No. 136361 is not the signature of Eugenio S. Baltao. He also found that there is no
showing in the records of the preliminary investigation that Eugenio S. Baltao actually received
notice of the said investigation. Fiscal Castro then castigated Fiscal Sumaway for failing to exercise
care and prudence in the performance of his duties, thereby causing injustice to respondent who
was not properly notified of the complaint against him and of the requirement to submit his counter
evidence.
Because of the alleged unjust filing of a criminal case against him for allegedly issuing a check which
bounced in violation of Batas Pambansa Bilang 22 for a measly amount of P2,575.00, respondent
Baltao filed before the Regional Trial Court of Quezon City a complaint for damages against herein
petitioners Albenson Enterprises, Jesse Yap, its owner, and Benjamin Mendiona, its employee.
In its decision, the lower court observed that "the check is drawn against the account of "E.L.
Woodworks," not of Guaranteed Industries of which plaintiff used to be President. Guaranteed
Industries had been inactive and had ceased to exist as a corporation since 1975. . . . . The
possibility is that it was with Gene Baltao or Eugenio Baltao III, a son of plaintiff who had a business

on the ground floor of Baltao Building located on V. Mapa Street, that the defendants may have been
dealing with . . . ." (Rollo, pp. 41-42).
The dispositive portion of the trial court 's decision reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendants ordering the latter to pay plaintiff jointly and severally:
1. actual or compensatory damages of P133,350.00;
2. moral damages of P1,000,000.00 (1 million pesos);
3. exemplary damages of P200,000.00;
4. attorney's fees of P100,000.00;
5 costs.
Defendants' counterclaim against plaintiff and claim for damages against Mercantile
Insurance Co. on the bond for the issuance of the writ of attachment at the instance
of plaintiff are hereby dismissed for lack of merit. (Rollo, pp. 38-39).
On appeal, respondent court modified the trial court's decision as follows:
WHEREFORE, the decision appealed from is MODIFIED by reducing the moral
damages awarded therein from P1,000,000.00 to P500,000.00 and the attorney's
fees from P100,000.00 to P50,000.00, said decision being hereby affirmed in all its
other aspects. With costs against appellants. (Rollo, pp. 50-51)
Dissatisfied with the above ruling, petitioners Albenson Enterprises Corp., Jesse Yap, and Benjamin
Mendiona filed the instant Petition, alleging that the appellate court erred in:
1. Concluding that private respondent's cause of action is not one based on
malicious prosecution but one for abuse of rights under Article 21 of the Civil Code
notwithstanding the fact that the basis of a civil action for malicious prosecution is
Article 2219 in relation to Article 21 or Article 2176 of the Civil Code . . . .
2. Concluding that "hitting at and in effect maligning (private respondent) with an
unjust criminal case was, without more, a plain case of abuse of rights by
misdirection" and "was therefore, actionable by itself," and which "became
inordinately blatant and grossly aggravated when . . . (private respondent) was
deprived of his basic right to notice and a fair hearing in the so-called preliminary
investigation . . . . "
3. Concluding that petitioner's "actuations in this case were coldly deliberate and
calculated", no evidence having been adduced to support such a sweeping
statement.

4. Holding the petitioner corporation, petitioner Yap and petitioner Mendiona jointly
and severally liable without sufficient basis in law and in fact.
5. Awarding respondents
5.1. P133,350.00 as actual or compensatory damages, even in the
absence of sufficient evidence to show that such was actually
suffered.
5.2. P500,000.00 as moral damages considering that the evidence in
this connection merely involved private respondent's alleged
celebrated status as a businessman, there being no showing that the
act complained of adversely affected private respondent's reputation
or that it resulted to material loss.
5.3. P200,000.00 as exemplary damages despite the fact that
petitioners were duly advised by counsel of their legal recourse.
5.4. P50,000.00 as attorney's fees, no evidence having been
adduced to justify such an award (Rollo, pp. 4-6).
Petitioners contend that the civil case filed in the lower court was one for malicious prosecution.
Citing the case ofMadera vs. Lopez (102 SCRA 700 [1981]), they assert that the absence of malice
on their part absolves them from any liability for malicious prosecution. Private respondent, on the
other hand, anchored his complaint for Damages on Articles 19, 20, and 21 ** of the Civil Code.
Article 19, known to contain what is commonly referred to as the principle of abuse of rights, sets
certain standards which may be observed not only in the exercise of one's rights but also in the
performance of one's duties. These standards are the following: to act with justice; to give everyone
his due; and to observe honesty and good faith. The law, therefore, recognizes the primordial
limitation on all rights: that in their exercise, the norms of human conduct set forth in Article 19 must
be observed. A right, though by itself legal because recognized or granted by law as such, may
nevertheless become the source of some illegality. When a right is exercised in a manner which
does not conform with the norms enshrined in Article 19 and results in damage to another, a legal
wrong is thereby committed for which the wrongdoer must be held responsible. Although the
requirements of each provision is different, these three (3) articles are all related to each other. As
the eminent Civilist Senator Arturo Tolentino puts it: "With this article (Article 21), combined with
articles 19 and 20, the scope of our law on civil wrongs has been very greatly broadened; it has
become much more supple and adaptable than the Anglo-American law on torts. It is now difficult to
conceive of any malevolent exercise of a right which could not be checked by the application of
these articles" (Tolentino, 1 Civil Code of the Philippines 72).
There is however, no hard and fast rule which can be applied to determine whether or not the
principle of abuse of rights may be invoked. The question of whether or not the principle of abuse of
rights has been violated, resulting in damages under Articles 20 and 21 or other applicable provision
of law, depends on the circumstances of each case. (Globe Mackay Cable and Radio Corporation
vs. Court of Appeals, 176 SCRA 778 [1989]).

The elements of an abuse of right under Article 19 are the following: (1) There is a legal right or duty;
(2) which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Article 20
speaks of the general sanction for all other provisions of law which do not especially provide for their
own sanction (Tolentino, supra, p. 71). Thus, anyone who, whether willfully or negligently, in the
exercise of his legal right or duty, causes damage to another, shall indemnify his victim for injuries
suffered thereby. Article 21 deals with acts contra bonus mores, and has the following elements: 1)
There is an act which is legal; 2) but which is contrary to morals, good custom, public order, or public
policy; 3) and it is done with intent to injure.
Thus, under any of these three (3) provisions of law, an act which causes injury to another may be
made the basis for an award of damages.
There is a common element under Articles 19 and 21, and that is, the act must be intentional.
However, Article 20 does not distinguish: the act may be done either "willfully", or "negligently". The
trial court as well as the respondent appellate court mistakenly lumped these three (3) articles
together, and cited the same as the bases for the award of damages in the civil complaint filed
against petitioners, thus:
With the foregoing legal provisions (Articles 19, 20, and 21) in focus, there is not
much difficulty in ascertaining the means by which appellants' first assigned error
should be resolved, given the admitted fact that when there was an attempt to collect
the amount of P2,575.00, the defendants were explicitly warned that plaintiff Eugenio
S. Baltao is not the Eugenio Baltao defendants had been dealing with (supra, p. 5).
When the defendants nevertheless insisted and persisted in filing a case a
criminal case no less against plaintiff, said defendants ran afoul of the legal
provisions (Articles 19, 20, and 21 of the Civil Code) cited by the lower court and
heretofore quoted (supra).
Defendants, not having been paid the amount of P2,575.00, certainly had the right to
complain. But that right is limited by certain constraints. Beyond that limit is the area
of excess, of abuse of rights. (Rollo, pp.
44-45).
Assuming, arguendo, that all the three (3) articles, together and not independently of each one,
could be validly made the bases for an award of damages based on the principle of "abuse of right",
under the circumstances, We see no cogent reason for such an award of damages to be made in
favor of private respondent.
Certainly, petitioners could not be said to have violated the aforestated principle of abuse of right.
What prompted petitioners to file the case for violation of Batas Pambansa Bilang 22 against private
respondent was their failure to collect the amount of P2,575.00 due on a bounced check which they
honestly believed was issued to them by private respondent. Petitioners had conducted inquiries
regarding the origin of the check, and yielded the following results: from the records of the Securities
and Exchange Commission, it was discovered that the President of Guaranteed (the recipient of the
unpaid mild steel plates), was one "Eugenio S. Baltao"; an inquiry with the Ministry of Trade and
Industry revealed that E.L. Woodworks, against whose account the check was drawn, was registered
in the name of one "Eugenio Baltao"; verification with the drawee bank, the Pacific Banking
Corporation, revealed that the signature appearing on the check belonged to one "Eugenio Baltao".

In a letter dated December 16, 1983, counsel for petitioners wrote private respondent demanding
that he make good the amount of the check. Counsel for private respondent wrote back and denied,
among others, that private respondent ever transacted business with Albenson Enterprises
Corporation; that he ever issued the check in question. Private respondent's counsel even went
further: he made a warning to defendants to check the veracity of their claim. It is pivotal to note at
this juncture that in this same letter, if indeed private respondent wanted to clear himself from the
baseless accusation made against his person, he should have made mention of the fact that there
are three (3) persons with the same name, i.e.: Eugenio Baltao, Sr., Eugenio S. Baltao, Jr. (private
respondent), and Eugenio Baltao III (private respondent's son, who as it turned out later, was the
issuer of the check). He, however, failed to do this. The last two Baltaos were doing business in the
same building Baltao Building located at 3267 V. Mapa Street, Sta. Mesa, Manila. The mild
steel plates were ordered in the name of Guaranteed of which respondent Eugenio S. Baltao is the
president and delivered to Guaranteed at Baltao building. Thus, petitioners had every reason to
believe that the Eugenio Baltao who issued the bouncing check is respondent Eugenio S. Baltao
when their counsel wrote respondent to make good the amount of the check and upon refusal, filed
the complaint for violation of BP Blg. 22.
Private respondent, however, did nothing to clarify the case of mistaken identity at first hand.
Instead, private respondent waited in ambush and thereafter pounced on the hapless petitioners at a
time he thought was propitious by filing an action for damages. The Court will not countenance this
devious scheme.
The criminal complaint filed against private respondent after the latter refused to make good the
amount of the bouncing check despite demand was a sincere attempt on the part of petitioners to
find the best possible means by which they could collect the sum of money due them. A person who
has not been paid an obligation owed to him will naturally seek ways to compel the debtor to pay
him. It was normal for petitioners to find means to make the issuer of the check pay the amount
thereof. In the absence of a wrongful act or omission or of fraud or bad faith, moral damages cannot
be awarded and that the adverse result of an action does not per se make the action wrongful and
subject the actor to the payment of damages, for the law could not have meant to impose a penalty
on the right to litigate (Rubio vs. Court of Appeals, 141 SCRA 488 [1986]).
In the case at bar, private respondent does not deny that the mild steel plates were ordered by and
delivered to Guaranteed at Baltao building and as part payment thereof, the bouncing check was
issued by one Eugenio Baltao. Neither had private respondent conveyed to petitioner that there are
two Eugenio Baltaos conducting business in the same building he and his son Eugenio Baltao III.
Considering that Guaranteed, which received the goods in payment of which the bouncing check
was issued is owned by respondent, petitioner acted in good faith and probable cause in filing the
complaint before the provincial fiscal.
To constitute malicious prosecution, there must be proof that the prosecution was prompted by a
sinister design to vex and humiliate a person, and that it was initiated deliberately by the defendant
knowing that his charges were false and groundless. Concededly, the mere act of submitting a case
to the authorities for prosecution does not make one liable for malicious prosecution. (Manila Gas
Corporation vs. Court of Appeals, 100 SCRA 602 [1980]). Still, private respondent argues that
liability under Articles 19, 20, and 21 of the Civil Code is so encompassing that it likewise includes
liability for damages for malicious prosecution under Article 2219 (8). True, a civil action for damages
for malicious prosecution is allowed under the New Civil Code, more specifically Articles 19, 20, 26,
29, 32, 33, 35, and 2219 (8) thereof. In order that such a case can prosper, however, the following

three (3) elements must be present, to wit: (1) The fact of the prosecution and the further fact that
the defendant was himself the prosecutor, and that the action was finally terminated with an
acquittal; (2) That in bringing the action, the prosecutor acted without probable cause; (3) The
prosecutor was actuated or impelled by legal malice (Lao vs. Court of Appeals, 199 SCRA 58,
[1991]).
Thus, a party injured by the filing of a court case against him, even if he is later on absolved, may file
a case for damages grounded either on the principle of abuse of rights, or on malicious prosecution.
As earlier stated, a complaint for damages based on malicious prosecution will prosper only if the
three (3) elements aforecited are shown to exist. In the case at bar, the second and third elements
were not shown to exist. It is well-settled that one cannot be held liable for maliciously instituting a
prosecution where one has acted with probable cause. "Probable cause is the existence of such
facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within
the knowledge of the prosecutor, that the person charged was guilty of the crime for which he was
prosecuted. In other words, a suit will lie only in cases where a legal prosecution has been carried
on without probable cause. The reason for this rule is that it would be a very great discouragement
to public justice, if prosecutors, who had tolerable ground of suspicion, were liable to be sued at law
when their indictment miscarried" (Que vs. Intermediate Appellate Court, 169 SCRA 137 [1989]).
The presence of probable cause signifies, as a legal consequence, the absence of malice. In the
instant case, it is evident that petitioners were not motivated by malicious intent or by sinister design
to unduly harass private respondent, but only by a well-founded anxiety to protect their rights when
they filed the criminal complaint against private respondent.
To constitute malicious prosecution, there must be proof that the prosecution was
prompted by a sinister design to vex and humiliate a person, that it was initiated
deliberately by the defendant knowing that his charges were false and groundless.
Concededly, the mere act of submitting a case to the authorities for prosecution does
not make one liable for malicious prosecution. Proof and motive that the institution of
the action was prompted by a sinister design to vex and humiliate a person must be
clearly and preponderantly established to entitle the victims to damages (Ibid.).
In the case at bar, there is no proof of a sinister design on the part of petitioners to vex or humiliate
private respondent by instituting the criminal case against him. While petitioners may have been
negligent to some extent in determining the liability of private respondent for the dishonored check,
the same is not so gross or reckless as to amount to bad faith warranting an award of damages.
The root of the controversy in this case is founded on a case of mistaken identity. It is possible that
with a more assiduous investigation, petitioners would have eventually discovered that private
respondent Eugenio S. Baltao is not the "Eugenio Baltao" responsible for the dishonored check.
However, the record shows that petitioners did exert considerable effort in order to determine the
liability of private respondent. Their investigation pointed to private respondent as the "Eugenio
Baltao" who issued and signed the dishonored check as the president of the debtor-corporation
Guaranteed Enterprises. Their error in proceeding against the wrong individual was obviously in the
nature of an innocent mistake, and cannot be characterized as having been committed in bad faith.
This error could have been discovered if respondent had submitted his counter-affidavit before
investigating fiscal Sumaway and was immediately rectified by Provincial Fiscal Mauro Castro upon
discovery thereof, i.e., during the reinvestigation resulting in the dismissal of the complaint.

Furthermore, the adverse result of an action does not per se make the act wrongful and subject the
actor to the payment of moral damages. The law could not have meant to impose a penalty on the
right to litigate, such right is so precious that moral damages may not be charged on those who may
even exercise it erroneously. And an adverse decision does not ipso facto justify the award of
attorney's fees to the winning party (Garcia vs. Gonzales, 183 SCRA 72 [1990]).
Thus, an award of damages and attorney's fees is unwarranted where the action was filed in good
faith. If damage results from a person's exercising his legal rights, it is damnum absque
injuria (Ilocos Norte Electric Company vs. Court of Appeals, 179 SCRA 5 [1989]).
Coming now to the claim of private respondent for actual or compensatory damages, the records
show that the same was based solely on his allegations without proof to substantiate the same. He
did not present proof of the cost of the medical treatment which he claimed to have undergone as a
result of the nervous breakdown he suffered, nor did he present proof of the actual loss to his
business caused by the unjust litigation against him. In determining actual damages, the court
cannot rely on speculation, conjectures or guesswork as to the amount. Without the actual proof of
loss, the award of actual damages becomes erroneous (Guilatco vs. City of Dagupan, 171 SCRA
382 [1989]).
Actual and compensatory damages are those recoverable because of pecuniary loss in business,
trade, property, profession, job or occupation and the same must be proved, otherwise, if the
proof is flimsy and unsubstantiated, no damages will be given (Rubio vs. Court of Appeals, 141
SCRA 488 [1986]). For these reasons, it was gravely erroneous for respondent court to have
affirmed the award of actual damages in favor of private respondent in the absence of proof thereof.
Where there is no evidence of the other party having acted in wanton, fraudulent or reckless, or
oppressive manner, neither may exemplary damages be awarded (Dee Hua Liong Electrical
Equipment Corporation vs. Reyes, 145 SCRA 488 [1986]).
As to the award of attorney's fees, it is well-settled that the same is the exception rather than the
general rule. Needless to say, the award of attorney's fees must be disallowed where the award of
exemplary damages is eliminated (Article 2208, Civil Code; Agustin vs. Court of Appeals, 186 SCRA
375 [1990]). Moreover, in view of the fact that there was no malicious prosecution against private
respondent, attorney's fees cannot be awarded him on that ground.
In the final analysis, there is no proof or showing that petitioners acted maliciously or in bad faith in
the filing of the case against private respondent. Consequently, in the absence of proof of fraud and
bad faith committed by petitioners, they cannot be held liable for damages (Escritor, Jr. vs.
Intermediate Appellate Court, 155 SCRA 577 [1987]). No damages can be awarded in the instant
case, whether based on the principle of abuse of rights, or for malicious prosecution. The questioned
judgment in the instant case attests to the propensity of trial judges to award damages without basis.
Lower courts are hereby cautioned anew against awarding unconscionable sums as damages
without bases therefor.
WHEREFORE, the petition is GRANTED and the decision of the Court of Appeals in C.A. G.R. C.V.
No. 14948 dated May 13, 1989, is hereby REVERSED and SET ASIDE. Costs against respondent
Baltao.
SO ORDERED.

SECOND DIVISION
[G.R. No. 116100. February 9, 1996]

SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO

and MARIA CRISTINA SANTOS, petitioners, vs. COURT OF
APPEALS, HEIRS OF PACIFICO C. MABASA and REGIONAL
TRIAL COURT OF PASIG, METRO MANILA, BRANCH
181, respondents.
DECISION
REGALADO, J.:

This petition for review on certiorari assails the decision of respondent

Court of Appeals in CA-G.R. CV No. 29115, promulgated on November 10,
1993, which affirmed with modification the decision of the trial court, as well as
its resolution dated July 8, 1994denying petitioners motion for reconsideration.
[1]

On August 26, 1982, Civil Case No. 47466 for the grant of an easement of
right of way was filed by Pacifico Mabasa against Cristino Custodio, Brigida R.
Custodio, Rosalina R. Morato, Lito Santos and Maria Cristina C. Santos
before the Regional Trial Court of Pasig and assigned to Branch 22 thereof.[2]
The generative facts of the case, as synthesized by the trial court and
adopted by the Court of Appeals, are as follows:
Perusing the record, this Court finds that the original plaintiff Pacifico Mabasa died
during the pendency of this case and was substituted by Ofelia Mabasa, his surviving
spouse [and children].
The plaintiff owns a parcel of land with a two-door apartment erected thereon situated
at Interior P. Burgos St., Palingon, Tipas, Taguig, Metro Manila. The plaintiff was able
to acquire said property through a contract of sale with spouses Mamerto Rayos and
Teodora Quintero as vendors last September 1981. Said property may be described to
be surrounded by other immovables pertaining to defendants herein. Taking P. Burgos
Street as the point of reference, on the left side, going to plaintiffs property, the row of
houses will be as follows: That of defendants Cristino and Brigido Custodio, then that

of Lito and Maria Cristina Santos and then that of Ofelia Mabasa. On the right side
(is) that of defendant Rosalina Morato and then a Septic Tank (Exhibit D). As an
access to P. Burgos Street from plaintiffs property, there are two possible
passageways. The first passageway is approximately one meter wide and is about 20
meters distan(t) from Mabasas residence to P. Burgos Street. Such path is passing in
between the previously mentioned row of houses. The second passageway is about 3
meters in width and length from plaintiff Mabasas residence to P. Burgos Street; it is
about 26 meters. In passing thru said passageway, a less than a meter wide path
through the septic tank and with 5-6 meters in length has to be traversed.
When said property was purchased by Mabasa, there were tenants occupying the
premises and who were acknowledged by plaintiff Mabasa as tenants. However,
sometime in February, 1982. one of said tenants vacated the apartment and when
plaintiff Mabasa went to see the premises, he saw that there had been built an adobe
fence in the first passageway making it narrower in width. Said adobe fence was first
constructed by defendants Santoses along their property which is also along the first
passageway. Defendant Morato constructed her adobe fence and even extended said
fence in such a way that the entire passageway was enclosed (Exhibit 1-Santoses and
Custodios, Exh. D for plaintiff, Exhs. 1-C, 1-D and I -E) And it was then that the
remaining tenants of said apartment vacated the area. Defendant Ma. Cristina Santos
testified that she constructed said fence because there was an incident when her
daughter was dragged by a bicycle pedalled by a son of one of the tenants in said
apartment along the first passageway. She also mentioned some other inconveniences
of having (at) the front of her house a pathway such as when some of the tenants were
drunk and would bang their doors and windows. Some of their footwear were even
lost. x x x[3] (Italics in original text; corrections in parentheses supplied)
On February 27, 1990, a decision was rendered by the trial court, with this
dispositive part:
Accordingly, judgment is hereby rendered as follows:
1) Ordering defendants Custodios and Santoses to give plaintiff permanent access ingress and egress, to the public street;
2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum of Eight
Thousand Pesos (P8,000) as indemnity for the permanent use of the passageway.
The parties to shoulder their respective litigation expenses. [4]

Not satisfied therewith, therein plaintiff represented by his heirs, herein

private respondents, went to the Court of Appeals raising the sole issue of
whether or not the lower court erred in not awarding damages in their
favor. On November 10, 1993, as earlier stated, the Court of Appeals
rendered its decision affirming the judgment of the trial court with modification,
the decretal portion of which disposes as follows:
WHEREFORE, the appealed decision of the lower court is hereby AFFIRMED WITH
MODIFICATION only insofar as the herein grant of damages to plaintiffs-appellants.
The Court hereby orders defendants-appellees to pay plaintiffs-appellants the sum of
Sixty Five Thousand (P65,000)Pesos as Actual Damages, Thirty Thousand (P30,000)
Pesos as Moral Damages, and Ten Thousand (P10,000) Pesos as Exemplary Damages.
The rest of the appealed decision is affirmed to all respects. [5]
On July 8, 1994, the Court of Appeals denied petitioners motion for
reconsideration.[6] Petitioners then took the present recourse to us, raising two
issues, namely, whether or not the grant of right of way to herein private
respondents is proper, and whether or not the award of damages is in order.
With respect to the first issue, herein petitioners are already barred from
raising the same. Petitioners did not appeal from the decision of the court a
quo granting private respondents the right of way, hence they are presumed to
be satisfied with the adjudication therein. With the finality of the judgment of
the trial court as to petitioners, the issue of propriety of the grant of right of
way has already been laid to rest.
For failure to appeal the decision of the trial court to the Court of Appeals,
petitioners cannot obtain any affirmative relief other than those granted in the
decision of the trial court. That decision of the court below has become final
as against them and can no longer be reviewed, much less reversed, by this
Court. The rule in this jurisdiction is that whenever an appeal is taken in a civil
case, an appellee who has not himself appealed may not obtain from the
appellate court any affirmative relief other than what was granted in the
decision of the lower court. The appellee can only advance any argument that
he may deem necessary to defeat the appellants claim or to uphold the
decision that is being disputed, and he can assign errors in his brief if such is
required to strengthen the views expressed by the court a quo. These
assigned errors, in turn, may be considered by the appellate court solely to
maintain the appealed decision on other grounds, but not for the purpose of

reversing or modifying the judgment in the appellees favor and giving him
other affirmative reliefs.[7]
However, with respect to the second issue, we agree with petitioners that
the Court of Appeals erred in awarding damages in favor of private
respondents. The award of damages has no substantial legal basis. A reading
of the decision of the Court of Appeals will show that the award of damages
was based solely on the fact that the original plaintiff, Pacifico Mabasa,
incurred losses in the form of unrealized rentals when the tenants vacated the
leased premises by reason of the closure of the passageway.
However, the mere fact that the plaintiff suffered losses does not give rise
to a right to recover damages. To warrant the recovery of damages, there
must be both a right of action for a legal wrong inflicted by the defendant, and
damage resulting to the plaintiff therefrom. Wrong without damage, or damage
without wrong, does not constitute a cause of action, since damages are
merely part of the remedy allowed for the injury caused by a breach or wrong.
[8]

There is a material distinction between damages and injury. Injury is the

illegal invasion of a legal right; damage is the loss, hurt, or harm which results
from the injury; and damages are the recompense or compensation awarded
for the damage suffered. Thus, there can be damage without injury in those
instances in which the loss or harm was not the result of a violation of a legal
duty. These situations are often called damnum absque injuria.[9] in order that a
plaintiff may maintain an action for the injuries of which he complains, he must
establish that such injuries resulted from a breach of duty which the defendant
owed to the plaintiff - a concurrence of injury to the plaintiff and legal
responsibility by the person causing it.[10] The underlying basis for the award of
tort damages is the premise that an individual was injured in contemplation of
law. Thus, there must first be the breach of some duty and the imposition of
liability for that breach before damages may be awarded; it is not sufficient to
state that there should be tort liability merely because the plaintiff suffered
some pain and suffering)[11]
Many accidents occur and many injuries are inflicted by acts or omissions
which cause damage or loss to another but which violate no legal duty to such
other person, and consequently create no cause of action in his favor. In such
cases, the consequences must be borne by the injured person alone. The law

affords no remedy for damages resulting from an act which does not amount
to a legal injury or wrong. [12]
In other words, in order that the law will give redress for an act causing
damage, that act must be not only hurtful, but wrongful. There must
be damnum et injuria.[13] If, as may happen in many cases, a person sustains
actual damage, that is, harm or loss to his person or property, without
sustaining any legal injury, that is, an act or omission which the law does not
deem an injury, the damage is regarded as damnum absque injuria.[14]
In the case at bar, although there was damage, there was no legal injury.
Contrary to the claim of private respondents, petitioners could not be said to
have violated the principle of abuse of right. In order that the principle of
abuse of right provided in Article 21 of the Civil Code can be applied, it is
essential that the following requisites concur: (1) The defendant should have
acted in a manner that is contrary to morals, good customs or public
policy; (2) The acts should be willful; and (3) There was damage or injury to
the plaintiff.[15]
The act of petitioners in constructing a fence within their lot is a valid
exercise of their right as owners, hence not contrary to morals, good customs
or public policy. The law recognizes in the owner the right to enjoy and
dispose of a thing, without other limitations than those established by law.[16] It
is within the right of petitioners, as owners, to enclose and fence their
property. Article 430 of the Civil Code provides that (e)very owner may
enclose or fence his land or tenements by means of walls, ditches, live or
dead hedges, or by any other means without detriment to servitudes
constituted thereon.
At the time of the construction of the fence, the lot was not subject to any
servitudes. There was no easement of way existing in favor of private
respondents, either by law or by contract. The fact that private respondents
had no existing right over the said passageway is confirmed by the very
decision of the trial court granting a compulsory right of way in their favor after
payment of just compensation. It was only that decision which gave private
respondents the right to use the said passageway after payment of the
compensation and imposed a corresponding duty on petitioners not to
interfere in the exercise of said right.

Hence, prior to said decision, petitioners had an absolute right over their
property and their act of fencing and enclosing the same was an act which
they may lawfully perform in the employment and exercise of said right. To
repeat, whatever injury or damage may have been sustained by private
respondents by reason of the rightful use of the said land by petitioners
is damnum absque injuria.[17]
A person has a right to the natural use and enjoyment of his own property,
according to his pleasure, for all the purposes to which such property is
usually applied. As a general rule, therefore, there is no cause of action for
acts done by one person upon his own property in a lawful and proper
manner, although such acts incidentally cause damage or an unavoidable loss
to another, as such damage or loss is damnum absque injuria.[18] When the
owner of property makes use thereof in the general and ordinary manner in
which the property is used, such as fencing or enclosing the same as in this
case, nobody can complain of having been injured, because the
inconvenience arising from said use can be considered as a mere
consequence of community life.[19]
The proper exercise of a lawful right cannot constitute a legal wrong for
which an action will lie,[20] although the act may result in damage to another, for
no legal right has been invaded[21] One may use any lawful means to
accomplish a lawful purpose and though the means adopted may cause
damage to another, no cause of action arises in the latters 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.[22]
WHEREFORE, under the compulsion of the foregoing premises, the
appealed decision of respondent Court of Appeals is hereby REVERSED and
SET ASIDE and the judgment of the trial court is correspondingly
REINSTATED.
SO ORDERED.

THIRD DIVISION
[G. R. No. 126486. February 9, 1998]

BARONS MARKETING CORP., petitioner, vs. COURT OF APPEALS

and PHELPS DODGE PHILS., INC. respondents.
DECISION
KAPUNAN, J.:

The instant petition raises two issues: (1) whether or not private respondent is guilty
of abuse of right; and (2) whether or not private respondent is entitled to interest and
attorneys fees.
The facts are undisputed:

On August 31, 1973, plaintiff [Phelps Dodge, Philippines, Inc. private

respondent herein] appointed defendant [petitioner Barons Marketing,
Corporation] as one of its dealers of electrical wires and cables effective
September 1, 1973 (Exh. A). As such dealer, defendant was given by plaintiff
60 days credit for its purchases of plaintiffs electrical products. This credit term
was to be reckoned from the date of delivery by plaintiff of its products to
defendant (Exh. 1).
During the period covering December 1986 to August 17, 1987, defendant
purchased, on credit, from plaintiff various electrical wires and cables in the
total amount of P4,102,438.30 (Exh. B to K). These wires and cables were in
turn sold, pursuant to previous arrangements, by defendant to MERALCO, the
former being the accredited supplier of the electrical requirements of the
latter. Under the sales invoices issued by plaintiff to defendant for the subject
purchases, it is stipulated that interest at 12% on the amount due for attorneys
fees and collection (Exh. BB). On September 7, 1987, defendant paid plaintiff
the amount of P300,000.00 out of its total purchases as above-stated (Exh.
S), thereby leaving an unpaid account on the aforesaid deliveries
of P3,802,478.20. On several occasions, plaintiff wrote defendant demanding
payment of its outstanding obligations due plaintiff (Exhs. L, M, N, and P). In
response, defendant wrote plaintiff on October 5, 1987 requesting the latter if
it could pay its outstanding account in monthly installments ofP500,000.00
[1]

plus 1% interest per month commencing on October 15, 1987 until full
payment (Exh. O and O-4). Plaintiff, however, rejected defendants offer and
accordingly reiterated its demand for the full payment of defendants account
(Exh. P).
[2]

On 29 October 1987, private respondent Phelps Dodge Phils., Inc. filed a complaint
before the Pasig Regional Trial Court against petitioner Barons Marketing Corporation
for the recovery of P3,802,478.20 representing the value of the wires and cables the
former had delivered to the latter, including interest. Phelps Dodge likewise prayed that
it be awarded attorneys fees at the rate of 25% of the amount demanded, exemplary
damages amounting to at least P100,000.00, the expenses of litigation and the costs of
suit.
Petitioner, in its answer, admitted purchasing the wires and cables from private
respondent but disputed the amount claimed by the latter. Petitioner likewise interposed
a counterclaim against private respondent, alleging that it suffered injury to its reputation
due to Phelps Dodges acts. Such acts were purportedly calculated to humiliate
petitioner and constituted an abuse of rights.
After hearing, the trial court on 17 June 1991 rendered its decision, the dispositive
portion of which reads:

WHEREFORE, from all the foregoing considerations, the Court finds Phelps
Dodge Phils., Inc. to have preponderantly proven its case and hereby orders
Barons Marketing, Inc. to pay Phelps Dodge the following:
1. P3,108,000.00 constituting the unpaid balance of defendants purchases
from plaintiff and interest thereon at 12% per annum computed from the
respective expiration of the 60 day credit term, vis--vis the various sales
invoices and/or delivery receipts;
2. 25% of the preceding obligation for and as attorneys fees;
3. P10,000.00 as exemplary damages;
4. Costs of suit.

[3]

Both parties appealed to respondent court. Private respondent claimed that the trial
court should have awarded it the sum of P3,802,478.20, the amount which appeared in
the body of the complaint and proven during the trial rather than P3,108,000.00. The
latter amount appears in petitioners prayer supposedly as a result of a typographical
error.

On the other hand, petitioner reiterated its claims for damages as a result
of creditors abuse. It also alleged that private respondent failed to prove its cause of
action against it.
On 25 June 1996, the Court of Appeals rendered a decision modifying the decision
of the trial court, thus:

WHEREFORE, from all the foregoing considerations, the Court finds Phelps
Dodge Phils., Inc. to have preponderantly proven its case and hereby orders
Barons Marketing, Inc. to pay Phelps Dodge the following:
1. P3,802,478.20 constituting the unpaid balance of defendants purchases
from plaintiff and interest thereon at 12% per annum computed from the
respective expiration of the 60 day credit term, vis--vis the various sales
invoices and/or delivery receipts; and
2. 5% of the preceding obligation for and as attorneys fees.
No costs.

[4]

Petitioner Barons Marketing is now before this Court alleging that respondent court
erred when it held (1) private respondent Phelps Dodge not guilty of creditors abuse,
and (2) petitioner liable to private respondent for interest and attorneys fees.
I

Petitioner does not deny private respondents rights to institute an action for
collection and to claim full payment. Indeed, petitioners right to file an action for
collection is beyond cavil. Likewise, private respondents right to reject petitioners offer
to pay in installments is guaranteed by Article 1248 of the Civil Code which states:
[5]

ART. 1248. Unless there is an express stipulation to that effect, the creditor
cannot be compelled partially to receive the prestations in which the obligation
consists. Neither may the debtor be required to make partial payments.
However, when the debt is in part liquidated and in part unliquidated, the
creditor may demand and the debtor may effect the payment of the former
without waiting for the liquidation of the latter.
Under this provision, the prestation , i.e., the object of the obligation, must be performed
in one act, not in parts.

Tolentino concedes that the right has its limitations:

Partial Prestations. Since the creditor cannot be compelled to accept partial
performance, unless otherwise stipulated, the creditor who refuses to accept partial
prestations does not incur in delay or mora accipiendi, except when there is abuse of
right or if good faith requires acceptance.
[6]

Indeed, the law, as set forth in Article 19 of the Civil Code, prescribes a primordial
limitation on all rights by setting certain standards that must be observed in the exercise
thereof . Thus:
[7]

ART. 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and observe
honesty and good faith.
Petitioner now invokes Article 19 and Article 21 of the Civil Code, claiming that
private respondent abused its rights when it rejected petitioners offer of settlement and
subsequently filed the action for collection considering:
[8]

xxx that the relationship between the parties started in 1973 spanning more
than 13 years before the complaint was filed, that the petitioner had been a
good and reliable dealer enjoying a good credit standing during the period
before it became delinquent in 1987, that the relationship between the parties
had been a fruitful one especially for the private respondent, that the petitioner
exerted its outmost efforts to settle its obligations and avoid a suit, that the
petitioner did not evade in the payment of its obligation to the private
respondent, and that the petitioner was just asking a small concession that it
be allowed to liquidate its obligation to eight (8) monthly installments
of P500,000.00 plus 1% interest per month on the balance which proposal
was supported by post-dated checks.
[9]

Expounding on its theory, petitioner states:

In the ordinary course of events, a suit for collection of a sum of money filed in
court is done for the primary purpose of collecting a debt or obligation. If there
is an offer by the debtor to pay its debt or obligation supported by post-dated
checks and with provision for interests, the normal response of a creditor
would be to accept the offer of compromise and not file the suit for
collection. It is of common knowledge that proceedings in our courts would
normally take years before an action is finally settled. It is always wiser and
more prudent to accept an offer of payment in installment rather than file an

action in court to compel the debtor to settle his obligation in full in a single
payment.
xxx.

xxx. Why then did private respondent elect to file a suit for collection rather
than accept petitioners offer of settlement, supported by post-dated checks, by
paying monthly installments of P500,000.00 plus 1% per month commencing
on October 15, 1987 until full payment? The answer is obvious. The action of
private respondent in filling a suit for collection was an abuse of right and
exercised for the sole purpose of prejudicing and injuring the petitioner.
[10]

Petitioner prays that the Court order private respondent to pay petitioner moral and
exemplary damages, attorneys fees, as well as the costs of suit. It likewise asks that it
be allowed to liquidate its obligation to private respondent, without interests, in eight
equal monthly installments.
Petitioners theory is untenable.
Both parties agree that to constitute an abuse of rights under Article 19 the
defendant must act with bad faith or intent to prejudice the plaintiff. They cite the
following comments of Tolentino as their authority:

Test of Abuse of Right. Modern jurisprudence does not permit acts which,
although not unlawful, are anti-social. There is undoubtedly an abuse of right
when it is exercised for the only purpose of prejudicing or injuring
another. When the objective of the actor is illegitimate, the illicit act cannot be
concealed under the guise of exercising a right. The principle does not permit
acts which, without utility or legitimate purpose cause damage to another,
because they violate the concept of social solidarity which considers law as
rational and just. Hence, every abnormal exercise of a right, contrary to its
socio-economic purpose, is an abuse that will give rise to liability. The
exercise of a right must be in accordance with the purpose for which it was
established, and must not be excessive or unduly harsh; there must be no
intention to injure another. Ultimately, however, and in practice, courts, in the
sound exercise of their discretion, will have to determine all the facts and
circumstances when the exercise of a right is unjust, or when there has been
an abuse of right.
[11]

The question, therefore, is whether private respondent intended to prejudice or

injure petitioner when it rejected petitioners offer and filed the action for collection.

We hold in the negative. It is an elementary rule in this jurisdiction that good faith is
presumed and that the burden of proving bad faith rests upon the party alleging the
same. In the case at bar, petitioner has failed to prove bad faith on the part of private
respondent. Petitioners allegation that private respondent was motivated by a desire to
terminate its agency relationship with petitioner so that private respondent itself may
deal directly with Meralco is simply not supported by the evidence. At most, such
supposition is merely speculative.
[12]

Moreover, we find that private respondent was driven by very

legitimate reasons for rejecting petitioners offer and instituting the action for collection
before the trial court. As pointed out by private respondent, the corporation had its own
cash position to protect in order for it to pay its own obligations. This is not such a lame
and poor rationalization as petitioner purports it to be. For if private respondent were to
be required to accept petitioners offer, there would be no reason for the latter to reject
similar offers from its other debtors. Clearly, this would be inimical to the interests of any
enterprise, especially a profit-oriented one like private respondent. It is plain to see that
what we have here is a mere exercise of rights, not an abuse thereof. Under these
circumstances, we do not deem private respondent to have acted in a manner contrary
to morals, good customs or public policy as to violate the provisions of Article 21 of the
Civil Code.
Consequently, petitioners prayer for moral and exemplary damages must thus be
rejected. Petitioners claim for moral damages is anchored on Article 2219 (10) of the
Civil Code which states:

ART. 2219. Moral damages may be recovered in the following and analogous
cases:
xxx.

(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and
35.
xxx.
Having ruled that private respondents acts did not transgress the provisions of Article
21, petitioner cannot be entitled to moral damages or, for that matter, exemplary
damages. While the amount of exemplary damages need not be proved, petitioner must
show that he is entitled to moral, temperate or compensatory damages before the court
may consider the question of whether or not exemplary damages should be awarded.
As we have observed above, petitioner has failed to discharge this burden.
[13]

It may not be amiss to state that petitioners contract with private respondent has the
force of law between them. Petitioner is thus bound to fulfill what has been expressly
stipulated therein. In the absence of any abuse of right, private respondent cannot be
allowed to perform its obligation under such contract in parts. Otherwise, private
respondents right under Article 1248 will be negated, the sanctity of its contract with
petitioner defiled. The principle of autonomy of contracts must be respected.
[14]

[15]

[16]

II

Under said contract, petitioner is liable to private respondent for the unpaid balance
of its purchases from private respondent plus 12% interest. Private respondents sales
invoices expressly provide that:

xxx. Interest at 12% per annum will be charged on all overdue account plus
25% on said amount for attorneys fees and collection. xxx.
[17]

It may also be noted that the above stipulation, insofar as it provides for the
payment of 25% on said amount for attorneys fees and collection (sic), constitutes what
is known as a penal clause. Petitioner is thus obliged to pay such penalty in addition to
the 12% annual interest, there being an express stipulation to that effect.
[18]

Petitioner nevertheless urges this Court to reduce the attorneys fees for being
grossly excessive, considering the nature of the case which is a mere action for
collection of a sum of money. It may be pointed out however that the above penalty is
supposed to answer not only for attorneys fees but for collection fees as well. Moreover:

x x x the attorneys fees here provided is not, strictly speaking, the attorneys
fees recoverable as between attorney and client spoken of and regulated by
the Rules of Court. Rather, the attorneys fees here are in the nature of
liquidated damages and the stipulation therefor is aptly called a penal
clause. It has been said that so long as such stipulation does not contravene
law, morals, or public order, it is strictly binding upon defendant. The attorneys
fees so provided are awarded in favor of the litigant, not his counsel. It is the
litigant, not counsel, who is the judgment creditor entitled to enforce the
judgment by execution.
[19]

Nonetheless, courts are empowered to reduce such penalty if the same is iniquitous
or unconscionable. Article 1229 of the Civil Code states thus:

ART. 1229. The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even if

there has been no performance, the penalty may also be reduced by the
courts if it is iniquitous or unconscionable. (Underscoring supplied.)
The sentiments of the law are echoed in Article 2227 of the same Code:

ART. 2227. Liquidated damages, whether intended as an indemnity or a

penalty, shall be equitably reduced if they are iniquitous or unconscionable.
It is true that we have upheld the reasonableness of penalties in the form of
attorneys fees consisting of twenty-five percent (25%) of the principal debt plus interest.
In the case at bar, however, the interest alone runs to some four and a half million
pesos (P4.5M), even exceeding the principal debt amounting to almost four million
pesos (P4.0M). Twenty five percent (25%) of the principal and interest amounts to
roughly two million pesos (P2M). In real terms, therefore, the attorneys fees and
collection fees are manifestly exorbitant. Accordingly, we reduce the same to ten
percent (10%) of the principal.
[20]

Private respondent, however, argues that petitioner failed to question the award of
attorneys fees on appeal before respondent court and raised the issue only in its motion
for reconsideration. Consequently, petitioner should be deemed to have waived its right
to question such award.
Private respondents attempts to dissuade us from reducing the penalty are
futile. The Court is clothed with ample authority to review matters, even if they are not
assigned as errors in their appeal, if it finds that their consideration is necessary in
arriving at a just decision of the case.
[21]

WHEREFORE, the decision of the Court of Appeals is hereby MODIFIED in that the
attorneys and collection fees are reduced to ten percent (10%) of the principal but is
AFFIRMED in all other respects.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 81262 August 25, 1989
GLOBE MACKAY CABLE AND RADIO CORP., and HERBERT C. HENDRY, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and RESTITUTO M. TOBIAS, respondents.
Atencia & Arias Law Offices for petitioners.
Romulo C. Felizmena for private respondent.

CORTES, J.:
Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay Cable and Radio
Corporation (GLOBE MACKAY) in a dual capacity as a purchasing agent and administrative
assistant to the engineering operations manager. In 1972, GLOBE MACKAY discovered fictitious
purchases and other fraudulent transactions for which it lost several thousands of pesos.
According to private respondent it was he who actually discovered the anomalies and reported them
on November 10, 1972 to his immediate superior Eduardo T. Ferraren and to petitioner Herbert C.
Hendry who was then the Executive Vice-President and General Manager of GLOBE MACKAY.
On November 11, 1972, one day after private respondent Tobias made the report, petitioner Hendry
confronted him by stating that he was the number one suspect, and ordered him to take a one week
forced leave, not to communicate with the office, to leave his table drawers open, and to leave the
office keys.
On November 20, 1972, when private respondent Tobias returned to work after the forced leave,
petitioner Hendry went up to him and called him a "crook" and a "swindler." Tobias was then ordered
to take a lie detector test. He was also instructed to submit specimen of his handwriting, signature,
and initials for examination by the police investigators to determine his complicity in the anomalies.
On December 6,1972, the Manila police investigators submitted a laboratory crime report (Exh. "A")
clearing private respondent of participation in the anomalies.
Not satisfied with the police report, petitioners hired a private investigator, retired Col. Jose G.
Fernandez, who on December 10, 1972, submitted a report (Exh. "2") finding Tobias guilty. This
report however expressly stated that further investigation was still to be conducted.
Nevertheless, on December 12, 1972, petitioner Hendry issued a memorandum suspending Tobias
from work preparatory to the filing of criminal charges against him.

On December 19,1972, Lt. Dioscoro V. Tagle, Metro Manila Police Chief Document Examiner, after
investigating other documents pertaining to the alleged anomalous transactions, submitted a second
laboratory crime report (Exh. "B") reiterating his previous finding that the handwritings, signatures,
and initials appearing in the checks and other documents involved in the fraudulent transactions
were not those of Tobias. The lie detector tests conducted on Tobias also yielded negative results.
Notwithstanding the two police reports exculpating Tobias from the anomalies and the fact that the
report of the private investigator, was, by its own terms, not yet complete, petitioners filed with the
City Fiscal of Manila a complaint for estafa through falsification of commercial documents, later
amended to just estafa. Subsequently five other criminal complaints were filed against Tobias, four of
which were for estafa through Falsification of commercial document while the fifth was for of Article
290 of' the Revised Penal Code (Discovering Secrets Through Seizure of Correspondence). Two of
these complaints were refiled with the Judge Advocate General's Office, which however, remanded
them to the fiscal's office. All of the six criminal complaints were dismissed by the fiscal. Petitioners
appealed four of the fiscal's resolutions dismissing the criminal complaints with the Secretary of
Justice, who, however, affirmed their dismissal.
lwph1.t

In the meantime, on January 17, 1973, Tobias received a notice (Exh. "F") from petitioners that his
employment has been terminated effective December 13, 1972. Whereupon, Tobias filed a complaint
for illegal dismissal. The labor arbiter dismissed the complaint. On appeal, the National Labor
Relations Commission (NLRC) reversed the labor arbiter's decision. However, the Secretary of
Labor, acting on petitioners' appeal from the NLRC ruling, reinstated the labor arbiter's decision.
Tobias appealed the Secretary of Labor's order with the Office of the President. During the pendency
of the appeal with said office, petitioners and private respondent Tobias entered into a compromise
agreement regarding the latter's complaint for illegal dismissal.
Unemployed, Tobias sought employment with the Republic Telephone Company (RETELCO).
However, petitioner Hendry, without being asked by RETELCO, wrote a letter to the latter stating that
Tobias was dismissed by GLOBE MACKAY due to dishonesty.
Private respondent Tobias filed a civil case for damages anchored on alleged unlawful, malicious,
oppressive, and abusive acts of petitioners. Petitioner Hendry, claiming illness, did not testify during
the hearings. The Regional Trial Court (RTC) of Manila, Branch IX, through Judge Manuel T. Reyes
rendered judgment in favor of private respondent by ordering petitioners to pay him eighty thousand
pesos (P80,000.00) as actual damages, two hundred thousand pesos (P200,000.00) as moral
damages, twenty thousand pesos (P20,000.00) as exemplary damages, thirty thousand pesos
(P30,000.00) as attorney's fees, and costs. Petitioners appealed the RTC decision to the Court of
Appeals. On the other hand, Tobias appealed as to the amount of damages. However, the Court of
Appeals, an a decision dated August 31, 1987 affirmed the RTC decision in toto. Petitioners' motion
for reconsideration having been denied, the instant petition for review on certiorari was filed.
The main issue in this case is whether or not petitioners are liable for damages to private
respondent.
Petitioners contend that they could not be made liable for damages in the lawful exercise of their
right to dismiss private respondent.

On the other hand, private respondent contends that because of petitioners' abusive manner in
dismissing him as well as for the inhuman treatment he got from them, the Petitioners must
indemnify him for the damage that he had suffered.
One of the more notable innovations of the New Civil Code is the codification of "some basic
principles that are to be observed for the rightful relationship between human beings and for the
stability of the social order." [REPORT ON THE CODE COMMISSION ON THE PROPOSED CIVIL
CODE OF THE PHILIPPINES, p. 39]. The framers of the Code, seeking to remedy the defect of the
old Code which merely stated the effects of the law, but failed to draw out its spirit, incorporated
certain fundamental precepts which were "designed to indicate certain norms that spring from the
fountain of good conscience" and which were also meant to serve as "guides for human conduct
[that] should run as golden threads through society, to the end that law may approach its supreme
ideal, which is the sway and dominance of justice" (Id.) Foremost among these principles is that
pronounced in Article 19 which provides:
Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.
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.
Article 20, which pertains to damage arising from a violation of law, provides that:
Art. 20. Every person who contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.
However, in the case at bar, petitioners claim that they did not violate any provision of law since they
were merely exercising their legal right to dismiss private respondent. This does not, however, leave
private respondent with no relief because Article 21 of the Civil Code provides that:
Art. 21. 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.
This article, adopted to remedy the "countless gaps in the statutes, which leave so many victims of
moral wrongs helpless, even though they have actually suffered material and moral injury" [Id.]
should "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" [Id. it p. 40; See also PNB v.
CA, G.R. No. L-27155, May 18,1978, 83 SCRA 237, 247].

In determining whether or not the principle of abuse of rights may be invoked, there is no rigid test
which can be applied. While the Court has not hesitated to apply Article 19 whether the legal and
factual circumstances called for its application [See for e.g., Velayo v. Shell Co. of the Phil., Ltd., 100
Phil. 186 (1956); PNB v. CA, supra;Grand Union Supermarket, Inc. v. Espino, Jr., G.R. No. L-48250,
December 28, 1979, 94 SCRA 953; PAL v. CA, G.R. No. L-46558, July 31,1981,106 SCRA 391;
United General Industries, Inc, v. Paler G.R. No. L-30205, March 15,1982,112 SCRA 404; Rubio v.
CA, G.R. No. 50911, August 21, 1987, 153 SCRA 183] the question of whether or not the principle of
abuse of rights has been violated resulting in damages under Article 20 or Article 21 or other
applicable provision of law, depends on the circumstances of each case. And in the instant case, the
Court, after examining the record and considering certain significant circumstances, finds that all
petitioners have indeed abused the right that they invoke, causing damage to private respondent
and for which the latter must now be indemnified.
The trial court made a finding that notwithstanding the fact that it was private respondent Tobias who
reported the possible existence of anomalous transactions, petitioner Hendry "showed belligerence
and told plaintiff (private respondent herein) that he was the number one suspect and to take a one
week vacation leave, not to communicate with the office, to leave his table drawers open, and to
leave his keys to said defendant (petitioner Hendry)" [RTC Decision, p. 2; Rollo, p. 232]. This,
petitioners do not dispute. But regardless of whether or not it was private respondent Tobias who
reported the anomalies to petitioners, the latter's reaction towards the former upon uncovering the
anomalies was less than civil. An employer who harbors suspicions that an employee has committed
dishonesty might be justified in taking the appropriate action such as ordering an investigation and
directing the employee to go on a leave. Firmness and the resolve to uncover the truth would also be
expected from such employer. But the high-handed treatment accorded Tobias by petitioners was
certainly uncalled for. And this reprehensible attitude of petitioners was to continue when private
respondent returned to work on November 20, 1972 after his one week forced leave. Upon reporting
for work, Tobias was confronted by Hendry who said. "Tobby, you are the crook and swindler in this
company." Considering that the first report made by the police investigators was submitted only on
December 10, 1972 [See Exh. A] the statement made by petitioner Hendry was baseless. The
imputation of guilt without basis and the pattern of harassment during the investigations of Tobias
transgress the standards of human conduct set forth in Article 19 of the Civil Code. The Court has
already ruled that the right of the employer to dismiss an employee should not be confused with the
manner in which the right is exercised and the effects flowing therefrom. If the dismissal is done
abusively, then the employer is liable for damages to the employee [Quisaba v. Sta. Ines-Melale
Veneer and Plywood Inc., G.R. No. L-38088, August 30, 1974, 58 SCRA 771; See also Philippine
Refining Co., Inc. v. Garcia, G.R. No. L-21871, September 27,1966, 18 SCRA 107] Under the
circumstances of the instant case, the petitioners clearly failed to exercise in a legitimate manner
their right to dismiss Tobias, giving the latter the right to recover damages under Article 19 in relation
to Article 21 of the Civil Code.
But petitioners were not content with just dismissing Tobias. Several other tortious acts were
committed by petitioners against Tobias after the latter's termination from work. Towards the latter
part of January, 1973, after the filing of the first of six criminal complaints against Tobias, the latter
talked to Hendry to protest the actions taken against him. In response, Hendry cut short Tobias'
protestations by telling him to just confess or else the company would file a hundred more cases
against him until he landed in jail. Hendry added that, "You Filipinos cannot be trusted." The threat
unmasked petitioner's bad faith in the various actions taken against Tobias. On the other hand, the
scornful remark about Filipinos as well as Hendry's earlier statements about Tobias being a "crook"
and "swindler" are clear violations of 'Tobias' personal dignity [See Article 26, Civil Code].

The next tortious act committed by petitioners was the writing of a letter to RETELCO sometime in
October 1974, stating that Tobias had been dismissed by GLOBE MACKAY due to dishonesty.
Because of the letter, Tobias failed to gain employment with RETELCO and as a result of which,
Tobias remained unemployed for a longer period of time. For this further damage suffered by Tobias,
petitioners must likewise be held liable for damages consistent with Article 2176 of the Civil Code.
Petitioners, however, contend that they have a "moral, if not legal, duty to forewarn other employers
of the kind of employee the plaintiff (private respondent herein) was." [Petition, p. 14; Rollo, p. 15].
Petitioners further claim that "it is the accepted moral and societal obligation of every man to advise
or warn his fellowmen of any threat or danger to the latter's life, honor or property. And this includes
warning one's brethren of the possible dangers involved in dealing with, or accepting into
confidence, a man whose honesty and integrity is suspect" [Id.]. These arguments, rather than justify
petitioners' act, reveal a seeming obsession to prevent Tobias from getting a job, even after almost
two years from the time Tobias was dismissed.
Finally, there is the matter of the filing by petitioners of six criminal complaints against Tobias.
Petitioners contend that there is no case against them for malicious prosecution and that they cannot
be "penalized for exercising their right and prerogative of seeking justice by filing criminal complaints
against an employee who was their principal suspect in the commission of forgeries and in the
perpetration of anomalous transactions which defrauded them of substantial sums of money"
[Petition, p. 10, Rollo, p. 11].
While sound principles of justice and public policy dictate that persons shall have free resort to the
courts for redress of wrongs and vindication of their rights [Buenaventura v. Sto. Domingo, 103 Phil.
239 (1958)], the right to institute criminal prosecutions can not be exercised maliciously and in bad
faith [Ventura v. Bernabe, G.R. No. L-26760, April 30, 1971, 38 SCRA 5871.] Hence, in Yutuk V.
Manila Electric Co., G.R. No. L-13016, May 31, 1961, 2 SCRA 337, the Court held that the right to
file criminal complaints should not be used as a weapon to force an alleged debtor to pay an
indebtedness. To do so would be a clear perversion of the function of the criminal processes and of
the courts of justice. And in Hawpia CA, G.R. No. L-20047, June 30, 1967. 20 SCRA 536 the Court
upheld the judgment against the petitioner for actual and moral damages and attorney's fees after
making a finding that petitioner, with persistence, filed at least six criminal complaints against
respondent, all of which were dismissed.
To constitute malicious prosecution, there must be proof that the prosecution was prompted by a
design to vex and humiliate a person and that it was initiated deliberately by the defendant knowing
that the charges were false and groundless [Manila Gas Corporation v. CA, G.R. No. L-44190,
October 30,1980, 100 SCRA 602]. Concededly, the filing of a suit by itself, does not render a person
liable for malicious prosecution [Inhelder Corporation v. CA, G.R. No. 52358, May 301983122 SCRA
576]. The mere dismissal by the fiscal of the criminal complaint is not a ground for an award of
damages for malicious prosecution if there is no competent evidence to show that the complainant
had acted in bad faith [Sison v. David, G.R. No. L-11268, January 28,1961, 1 SCRA 60].
In the instant case, however, the trial court made a finding that petitioners acted in bad faith in filing
the criminal complaints against Tobias, observing that:
xxx
Defendants (petitioners herein) filed with the Fiscal's Office of Manila a total of six (6)
criminal cases, five (5) of which were for estafa thru falsification of commercial

document and one for violation of Art. 290 of the Revised Penal Code "discovering
secrets thru seizure of correspondence," and all were dismissed for insufficiency or
lack of evidence." The dismissal of four (4) of the cases was appealed to the Ministry
of Justice, but said Ministry invariably sustained the dismissal of the cases. As above
adverted to, two of these cases were refiled with the Judge Advocate General's
Office of the Armed Forces of the Philippines to railroad plaintiffs arrest and detention
in the military stockade, but this was frustrated by a presidential decree transferring
criminal cases involving civilians to the civil courts.
xxx
To be sure, when despite the two (2) police reports embodying the findings of Lt.
Dioscoro Tagle, Chief Document Examiner of the Manila Police Department, clearing
plaintiff of participation or involvement in the fraudulent transactions complained of,
despite the negative results of the lie detector tests which defendants compelled
plaintiff to undergo, and although the police investigation was "still under follow-up
and a supplementary report will be submitted after all the evidence has been
gathered," defendants hastily filed six (6) criminal cases with the city Fiscal's Office
of Manila, five (5) for estafa thru falsification of commercial document and one (1) for
violation of Art. 290 of the Revised Penal Code, so much so that as was to be
expected, all six (6) cases were dismissed, with one of the investigating fiscals, Asst.
Fiscal de Guia, commenting in one case that, "Indeed, the haphazard way this case
was investigated is evident. Evident likewise is the flurry and haste in the filing of this
case against respondent Tobias," there can be no mistaking that defendants would
not but be motivated by malicious and unlawful intent to harass, oppress, and cause
damage to plaintiff.
xxx
[RTC Decision, pp. 5-6; Rollo, pp. 235-236].
In addition to the observations made by the trial court, the Court finds it significant that the criminal
complaints were filed during the pendency of the illegal dismissal case filed by Tobias against
petitioners. This explains the haste in which the complaints were filed, which the trial court earlier
noted. But petitioners, to prove their good faith, point to the fact that only six complaints were filed
against Tobias when they could have allegedly filed one hundred cases, considering the number of
anomalous transactions committed against GLOBE MACKAY. However, petitioners' good faith is
belied by the threat made by Hendry after the filing of the first complaint that one hundred more
cases would be filed against Tobias. In effect, the possible filing of one hundred more cases was
made to hang like the sword of Damocles over the head of Tobias. In fine, considering the haste in
which the criminal complaints were filed, the fact that they were filed during the pendency of the
illegal dismissal case against petitioners, the threat made by Hendry, the fact that the cases were
filed notwithstanding the two police reports exculpating Tobias from involvement in the anomalies
committed against GLOBE MACKAY, coupled by the eventual dismissal of all the cases, the Court is
led into no other conclusion than that petitioners were motivated by malicious intent in filing the six
criminal complaints against Tobias.
Petitioners next contend that the award of damages was excessive. In the complaint filed against
petitioners, Tobias prayed for the following: one hundred thousand pesos (P100,000.00) as actual

damages; fifty thousand pesos (P50,000.00) as exemplary damages; eight hundred thousand pesos
(P800,000.00) as moral damages; fifty thousand pesos (P50,000.00) as attorney's fees; and costs.
The trial court, after making a computation of the damages incurred by Tobias [See RTC Decision,
pp. 7-8; Rollo, pp. 154-1551, awarded him the following: eighty thousand pesos (P80,000.00) as
actual damages; two hundred thousand pesos (P200,000.00) as moral damages; twenty thousand
pesos (P20,000.00) as exemplary damages; thirty thousand pesos (P30,000.00) as attorney's fees;
and, costs. It must be underscored that petitioners have been guilty of committing several actionable
tortious acts, i.e., the abusive manner in which they dismissed Tobias from work including the
baseless imputation of guilt and the harassment during the investigations; the defamatory language
heaped on Tobias as well as the scornful remark on Filipinos; the poison letter sent to RETELCO
which resulted in Tobias' loss of possible employment; and, the malicious filing of the criminal
complaints. Considering the extent of the damage wrought on Tobias, the Court finds that, contrary
to petitioners' contention, the amount of damages awarded to Tobias was reasonable under the
circumstances.
Yet, petitioners still insist that the award of damages was improper, invoking the principle of damnum
absqueinjuria. It is argued that "[t]he only probable actual damage that plaintiff (private respondent
herein) could have suffered was a direct result of his having been dismissed from his employment,
which was a valid and legal act of the defendants-appellants (petitioners herein). " [Petition, p. 17;
Rollo, p. 18].
lwph1.t

According to the principle of damnum absque injuria, damage or loss which does not constitute a
violation of a legal right or amount to a legal wrong is not actionable [Escano v. CA, G.R. No. L47207, September 25, 1980, 100 SCRA 197; See also Gilchrist v. Cuddy 29 Phil, 542 (1915); The
Board of Liquidators v. Kalaw, G.R. No. L-18805, August 14, 1967, 20 SCRA 987]. This principle
finds no application in this case. It bears repeating that even granting that petitioners might have had
the right to dismiss Tobias from work, the abusive manner in which that right was exercised
amounted to a legal wrong for which petitioners must now be held liable. Moreover, the damage
incurred by Tobias was not only in connection with the abusive manner in which he was dismissed
but was also the result of several other quasi-delictual acts committed by petitioners.
Petitioners next question the award of moral damages. However, the Court has already ruled
in Wassmer v. Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA 648, 653, that [p]er 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." Hence, the Court of Appeals committed no error in awarding
moral damages to Tobias.
Lastly, the award of exemplary damages is impugned by petitioners. Although Article 2231 of the
Civil Code provides that "[i]n quasi-delicts, exemplary damages may be granted if the defendant
acted with gross negligence," the Court, in Zulueta v. Pan American World Airways, Inc., G.R. No. L28589, January 8, 1973, 49 SCRA 1, ruled that if gross negligence warrants the award of exemplary
damages, with more reason is its imposition justified when the act performed is deliberate, malicious
and tainted with bad faith. As in the Zuluetacase, the nature of the wrongful acts shown to have been
committed by petitioners against Tobias is sufficient basis for the award of exemplary damages to
the latter.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals in CA-G.R.
CV No. 09055 is AFFIRMED.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-44748 August 29, 1986
RADIO COMMUNICATIONS OF THE PHILS., INC. (RCPI). petitioner,
vs.
COURT OF APPEALS and LORETO DIONELA, respondents.
O. Pythogoras Oliver for respondents.

PARAS, J.:
Before Us, is a Petition for Review by certiorari of the decision of the Court of Appeals, modifying the
decision of the trial court in a civil case for recovery of damages against petitioner corporation by
reducing the award to private respondent Loreto Dionela of moral damages from P40,000 to
Pl5,000, and attorney's fees from P3,000 to P2,000.
The basis of the complaint against the defendant corporation is a telegram sent through its Manila
Office to the offended party, Loreto Dionela, reading as follows:
176 AS JR 1215PM 9 PAID MANDALUYONG JUL 22-66 LORETO DIONELA
CABANGAN LEGASPI CITY
WIRE ARRIVAL OF CHECK FER
LORETO DIONELA-CABANGAN-WIRE ARRIVAL OF CHECK-PER
115 PM
SA IYO WALANG PAKINABANG DUMATING KA DIYAN-WALA-KANG PADALA
DITO KAHIT BULBUL MO
(p. 19, Annex "A")
Plaintiff-respondent Loreto Dionela alleges that the defamatory words on the telegram sent to him
not only wounded his feelings but also caused him undue embarrassment and affected adversely his
business as well because other people have come to know of said defamatory words. Defendant
corporation as a defense, alleges that the additional words in Tagalog was a private joke between
the sending and receiving operators and that they were not addressed to or intended for plaintiff and
therefore did not form part of the telegram and that the Tagalog words are not defamatory. The
telegram sent through its facilities was received in its station at Legaspi City. Nobody other than the
operator manned the teletype machine which automatically receives telegrams being transmitted.

The said telegram was detached from the machine and placed inside a sealed envelope and
delivered to plaintiff, obviously as is. The additional words in Tagalog were never noticed and were
included in the telegram when delivered.
The trial court in finding for the plaintiff ruled as follows:
There is no question that the additional words in Tagalog are libelous. They clearly
impute a vice or defect of the plaintiff. Whether or not they were intended for the
plaintiff, the effect on the plaintiff is the same. Any person reading the additional
words in Tagalog will naturally think that they refer to the addressee, the plaintiff.
There is no indication from the face of the telegram that the additional words in
Tagalog were sent as a private joke between the operators of the defendant.
The defendant is sued directly not as an employer. The business of the defendant is
to transmit telegrams. It will open the door to frauds and allow the defendant to act
with impunity if it can escape liability by the simple expedient of showing that its
employees acted beyond the scope of their assigned tasks.
The liability of the defendant is predicated not only on Article 33 of the Civil Code of
the Philippines but on the following articles of said Code:
ART. 19.- Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good
faith.
ART. 20.-Every person who, contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.
There is sufficient publication of the libelous Tagalog words. The office file of the
defendant containing copies of telegrams received are open and held together only
by a metal fastener. Moreover, they are open to view and inspection by third parties.
It follows that the plaintiff is entitled to damages and attorney's fees. The plaintiff is a
businessman. The libelous Tagalog words must have affected his business and
social standing in the community. The Court fixes the amount of P40,000.00 as the
reasonable amount of moral damages and the amount of P3,000.00 as attorney's fee
which the defendant should pay the plaintiff. (pp. 15-16, Record on Appeal)
The respondent appellate court in its assailed decision confirming the aforegoing findings of the
lower court stated:
The proximate cause, therefore, resulting in injury to appellee, was the failure of the
appellant to take the necessary or precautionary steps to avoid the occurrence of the
humiliating incident now complained of. The company had not imposed any
safeguard against such eventualities and this void in its operating procedure does
not speak well of its concern for their clientele's interests. Negligence here is very
patent. This negligence is imputable to appellant and not to its employees.

The claim that there was no publication of the libelous words in Tagalog is also
without merit. The fact that a carbon copy of the telegram was filed among other
telegrams and left to hang for the public to see, open for inspection by a third party is
sufficient publication. It would have been otherwise perhaps had the telegram been
placed and kept in a secured place where no one may have had a chance to read it
without appellee's permission.
The additional Tagalog words at the bottom of the telegram are, as correctly found by
the lower court, libelous per se, and from which malice may be presumed in the
absence of any showing of good intention and justifiable motive on the part of the
appellant. The law implies damages in this instance (Quemel vs. Court of Appeals, L22794, January 16, 1968; 22 SCRA 44). The award of P40,000.00 as moral
damages is hereby reduced to P15,000.00 and for attorney's fees the amount of
P2,000.00 is awarded. (pp. 22-23, record)
After a motion for reconsideration was denied by the appellate court, petitioner came to Us with the
following:
ASSIGNMENT OF ERRORS
I
The Honorable Court of Appeals erred in holding that Petitioner-employer should
answer directly and primarily for the civil liability arising from the criminal act of its
employee.
II
The Honorable Court of Appeals erred in holding that there was sufficient publication
of the alleged libelous telegram in question, as contemplated by law on libel.
III
The Honorable Court of Appeals erred in holding that the liability of petitionercompany-employer is predicated on Articles 19 and 20 of the Civil Code, Articles on
Human Relations.
IV
The Honorable Court of Appeals erred in awarding Atty's. fees. (p. 4, Record)
Petitioner's contentions do not merit our consideration. The action for damages was filed in the lower
court directly against respondent corporation not as an employer subsidiarily liable under the
provisions of Article 1161 of the New Civil Code in relation to Art. 103 of the Revised Penal Code.
The cause of action of the private respondent is based on Arts. 19 and 20 of the New Civil Code
(supra). As well as on respondent's breach of contract thru the negligence of its own employees. 1

Petitioner is a domestic corporation engaged in the business of receiving and transmitting

messages. Everytime a person transmits a message through the facilities of the petitioner, a contract
is entered into. Upon receipt of the rate or fee fixed, the petitioner undertakes to transmit the
message accurately. There is no question that in the case at bar, libelous matters were included in
the message transmitted, without the consent or knowledge of the sender. There is a clear case of
breach of contract by the petitioner in adding extraneous and libelous matters in the message sent to
the private respondent. As a corporation, the petitioner can act only through its employees. Hence
the acts of its employees in receiving and transmitting messages are the acts of the petitioner. To
hold that the petitioner is not liable directly for the acts of its employees in the pursuit of petitioner's
business is to deprive the general public availing of the services of the petitioner of an effective and
adequate remedy. In most cases, negligence must be proved in order that plaintiff may recover.
However, since negligence may be hard to substantiate in some cases, we may apply the doctrine of
RES IPSA LOQUITUR (the thing speaks for itself), by considering the presence of facts or
circumstances surrounding the injury.
WHEREFORE, premises considered, the judgment of the appellate court is hereby AFFIRMED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 132344

February 17, 2000

UNIVERSITY OF THE EAST, petitioner,

vs.
ROMEO A. JADER, respondent.
YNARES-SANTIAGO, J.:
May an educational institution be held liable for damages for misleading a student into believing that
the latter had satisfied all the requirements for graduation when such is not the case? This is the
issue in the instant petition for review premised on the following undisputed facts as summarized by
the trial court and adopted by the Court of Appeals (CA),1 to wit:
Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the first
semester of his last year (School year 1987-1988), he failed to take the regular final
examination in Practice Court I for which he was given an incomplete grade (Exhibits "2",
also Exhibit "H"). He enrolled for the second semester as fourth year law student (Exhibit
"A") and on February 1, 1988 he filed an application for the removal of the incomplete grade
given him by Professor Carlos Ortega (Exhibits "H-2", also Exhibit "2") which was approved
by Dean Celedonio Tiongson after payment of the required fee. He took the examination on
March 28, 1988. On May 30, 1988, Professor Carlos Ortega submitted his grade. It was a
grade of five (5). (Exhibits "H-4", also Exhibits "2-L", "2-N").
1wphi1.nt

In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate
on who among the fourth year students should be allowed to graduate. The plaintiff's name
appeared in the Tentative List of Candidates for graduation for the Degree of Bachelor of
Laws (LL.B) as of Second Semester (1987-1988) with the following annotation:
JADER ROMEO A.
Def. Conflict of Laws x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to submit transcript with
S.O. (Exhibits "3", "3-C-1", "3-C-2").
The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor of Laws
was scheduled on the 16th of April 1988 at 3:00 o'clock in the afternoon, and in the invitation
for that occasion the name of the plaintiff appeared as one of the candidates. (Exhibits "B",
"B-6", "B-6-A"). At the foot of the list of the names of the candidates there appeared however
the following annotation:
This is a tentative list Degrees will be conferred upon these candidates who
satisfactorily complete requirements as stated in the University Bulletin and as
approved of the Department of Education, Culture and Sports (Exhibit "B-7-A").

The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E., Recto
Campus, during the program of which he went up the stage when his name was called,
escorted by her (sic) mother and his eldest brother who assisted in placing the Hood, and his
Tassel was turned from left to right, and he was thereafter handed by Dean Celedonio a
rolled white sheet of paper symbolical of the Law Diploma. His relatives took pictures of the
occasion (Exhibits "C" to "C-6", "D-3" to "D-11").
He tendered a blow-out that evening which was attended by neighbors, friends and relatives
who wished him good luck in the forthcoming bar examination. There were pictures taken too
during the blow-out (Exhibits "D" to "D-1").
He thereafter prepared himself for the bar examination. He took a leave of absence without
pay from his job from April 20, 1988 to September 30, 1988 (Exhibit "G") and enrolled at the
pre-bar review class in Far Eastern University. (Exhibits "F" to "F-2"). Having learned of the
deficiency he dropped his review class and was not able to take the bar examination. 2
Consequently, respondent sued petitioner for damages alleging that he suffered moral shock, mental
anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights when he
was not able to take the 1988 bar examinations arising from the latter's negligence. He prayed for an
award of moral and exemplary damages, unrealized income, attorney's fees, and costs of suit.
In its answer with counterclaim, petitioner denied liability arguing mainly that it never led respondent
to believe that he completed the requirements for a Bachelor of Laws degree when his name was
included in the tentative list of graduating students. After trial, the lower court rendered judgment as
follows:
WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the plaintiff
and against the defendant ordering the latter to pay plaintiff the sum of THIRTY FIVE
THOUSAND FOUR HUNDRED SEVENTY PESOS (P35,470.00) with legal rate of interest
from the filing of the complaint until fully paid, the amount of FIVE THOUSAND PESOS
(P5,000.00) as attorney's fees and the cost of suit.
Defendant's counterclaim is, for lack of merit, hereby dismissed.
SO ORDERED.3
which on appeal by both parties was affirmed by the Court of Appeals (CA) with modification. The
dispositive portion of the CA decision reads:
WHEREFORE, in the light of the foregoing, the lower Court's Decision is hereby AFFIRMED
with the MODIFICATION that defendant-appellee, in addition to the sum adjudged by the
lower court in favor of plaintiff-appellant, is also ORDERED to pay plaintiff-appellant the
amount of FIFTY THOUSAND (P50,000.00) PESOS for moral damages. Costs against
defendant-appellee.
SO ORDERED.4

Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this Court on a
petition for review under Rule 45 of the Rules of Court, arguing that it has no liability to respondent
Romeo A. Jader, considering that the proximate and immediate cause of the alleged damages
incurred by the latter arose out of his own negligence in not verifying from the professor concerned
the result of his removal exam.
The petition lacks merit.
When a student is enrolled in any educational or learning institution, a contract of education is
entered into between said institution and the student. The professors, teachers or instructors hired
by the school are considered merely as agents and administrators tasked to perform the school's
commitment under the contract. Since the contracting parties are the school and the student, the
latter is not duty-bound to deal with the former's agents, such as the professors with respect to the
status or result of his grades, although nothing prevents either professors or students from sharing
with each other such information. The Court takes judicial notice of the traditional practice in
educational institutions wherein the professor directly furnishes his/her students their grades. It is the
contractual obligation of the school to timely inform and furnish sufficient notice and information to
each and every student as to whether he or she had already complied with all the requirements for
the conferment of a degree or whether they would be included among those who will graduate.
Although commencement exercises are but a formal ceremony, it nonetheless is not an ordinary
occasion, since such ceremony is the educational institution's way of announcing to the whole world
that the students included in the list of those who will be conferred a degree during the
baccalaureate ceremony have satisfied all the requirements for such degree. Prior or subsequent to
the ceremony, the school has the obligation to promptly inform the student of any problem involving
the latter's grades and performance and also most importantly, of the procedures for remedying the
same.
Petitioner, in belatedly informing respondent of the result of the removal examination, particularly at
a time when he had already commenced preparing for the bar exams, cannot be said to have acted
in good faith. Absence of good faith must be sufficiently established for a successful prosecution by
the aggrieved party in a suit for abuse of right under Article 19 of the Civil Code. Good faith connotes
an honest intention to abstain from taking undue advantage of another, even though the forms and
technicalities of the law, together with the absence of all information or belief of facts, would render
the transaction unconscientious.5 It is the school that has access to those information and it is only
the school that can compel its professors to act and comply with its rules, regulations and policies
with respect to the computation and the prompt submission of grades. Students do not exercise
control, much less influence, over the way an educational institution should run its affairs, particularly
in disciplining its professors and teachers and ensuring their compliance with the school's rules and
orders. Being the party that hired them, it is the school that exercises general supervision and
exclusive control over the professors with respect to the submission of reports involving the students'
standing. Exclusive control means that no other person or entity had any control over the
instrumentality which caused the damage or injury.6
The college dean is the senior officer responsible for the operation of an academic program,
enforcement of rules and regulations, and the supervision of faculty and student services. 7 He must
see to it that his own professors and teachers, regardless of their status or position outside of the
university, must comply with the rules set by the latter. The negligent act of a professor who fails to
observe the rules of the school, for instance by not promptly submitting a student's grade, is not only
imputable to the professor but is an act of the school, being his employer.

Considering further, that the institution of learning involved herein is a university which is engaged in
legal education, it should have practiced what it inculcates in its students, more specifically the
principle of good dealings enshrined in Articles 19 and 20 of the Civil Code which states:
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties,
act with justice, give everyone his due, and observe honesty and good faith.
Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another,
shall indemnify the latter for the same.
Art. 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.8 In civilized society, men must be able to assume that others will do them no intended injury
that others will commit no internal aggressions upon them; that their fellowmen, when they act
affirmatively will do so with due care which the ordinary understanding and moral sense of the
community exacts and that those with whom they deal in the general course of society will act in
good faith. The ultimate thing in the theory of liability is justifiable reliance under conditions of
civilized society.9 Schools and professors cannot just take students for granted and be indifferent to
them, for without the latter, the former are useless.
Educational institutions are duty-bound to inform the students of their academic status and not wait
for the latter to inquire from the former. The conscious indifference of a person to the rights or
welfare of the person/persons who may be affected by his act or omission can support a claim for
damages.10 Want of care to the conscious disregard of civil obligations coupled with a conscious
knowledge of the cause naturally calculated to produce them would make the erring party
liable.11 Petitioner ought to have known that time was of the essence in the performance of its
obligation to inform respondent of his grade. It cannot feign ignorance that respondent will not
prepare himself for the bar exams since that is precisely the immediate concern after graduation of
an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its student's grades at
any time because a student has to comply with certain deadlines set by the Supreme Court on the
submission of requirements for taking the bar. Petitioner's liability arose from its failure to promptly
inform respondent of the result of an examination and in misleading the latter into believing that he
had satisfied all requirements for the course. Worth quoting is the following disquisition of the
respondent court:
It is apparent from the testimony of Dean Tiongson that defendant-appellee University had
been informed during the deliberation that the professor in Practice Court I gave plaintiffappellant a failing grade. Yet, defendant-appellee still did not inform plaintiff-appellant of his
failure to complete the requirements for the degree nor did they remove his name from the
tentative list of candidates for graduation. Worse, defendant-appellee university, despite the
knowledge that plaintiff-appellant failed in Practice Court I, againincluded plaintiff-appellant's
name in the "tentative list of candidates for graduation which was prepared after the
deliberation and which became the basis for the commencement rites program. Dean
Tiongson reasons out that plaintiff-appellant's name was allowed to remain in the tentative
list of candidates for graduation in the hope that the latter would still be able to remedy the
situation in the remaining few days before graduation day. Dean Tiongson, however, did not
explain how plaintiff appellant Jader could have done something to complete his deficiency if
defendant-appellee university did not exert any effort to inform plaintiff-appellant of his failing
grade in Practice Court I.12

Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the
delayed relay of information to respondent. When one of two innocent parties must suffer, he
through whose agency the loss occurred must bear it.13 The modern tendency is to grant indemnity
for damages in cases where there is abuse of right, even when the act is not illicit. 14 If mere fault or
negligence in one's acts can make him liable for damages for injury caused thereby, with more
reason should abuse or bad faith make him liable. A person should be protected only when he acts
in the legitimate exercise of his right, that is, when he acts with prudence and in good faith, but not
when he acts with negligence or abuse.15
However, while petitioner was guilty of negligence and thus liable to respondent for the latter's actual
damages, we hold that respondent should not have been awarded moral damages. We do not agree
with the Court of Appeals' findings that respondent suffered shock, trauma and pain when he was
informed that he could not graduate and will not be allowed to take the bar examinations. At the very
least, it behooved on respondent to verify for himself whether he has completed all necessary
requirements to be eligible for the bar examinations. As a senior law student, respondent should
have been responsible enough to ensure that all his affairs, specifically those pertaining to his
academic achievement, are in order. Given these considerations, we fail to see how respondent
could have suffered untold embarrassment in attending the graduation rites, enrolling in the bar
review classes and not being able to take the bar exams. If respondent was indeed humiliated by his
failure to take the bar, he brought this upon himself by not verifying if he has satisfied all the
requirements including his school records, before preparing himself for the bar examination.
Certainly, taking the bar examinations does not only entail a mental preparation on the subjects
thereof; there are also prerequisites of documentation and submission of requirements which the
prospective examinee must meet.
WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with MODIFICATION.
Petitioner is ORDERED to PAY respondent the sum of Thirty-five Thousand Four Hundred Seventy
Pesos (P35,470.00), with legal interest of 6% per annum computed from the date of filing of the
complaint until fully paid; the amount of Five Thousand Pesos (P5,000.00) as attorney's fees; and
the costs of the suit. The award of moral damages is DELEIED.
1wphi1.nt

SO ORDERED.

EN BANC
[G.R. No. 131136. February 28, 2001]

CONRADO L. DE RAMA, petitioner, vs. THE COURT OF APPEALS

(NINTH DIVISION, THE CIVIL SERVICE COMMISSION), ELADIO
MARTINEZ, DIVINO DE JESUS, MORELL AYALA, ARISTEO
CATALLA, DAISY PORTA, FLORDELIZA ORIASEL, GRACIELA
GLORY, FELECIDAD ORINDAY, MA. PETRA MUFFET LUCE,
ELSA MARINO, BERNARDITA MENDOZA, JANE MACATANGAY,
ADELFO GLODOVIZA and FLORINO RAMOS, respondents.
DECISION
YNARES-SANTIAGO, J.:

Upon his assumption to the position of Mayor of Pagbilao, Quezon, petitioner

Conrado L. de Rama wrote a letter dated July 13, 1995 to the Civil Service
Commission (or CSC), seeking the recall of the appointments of fourteen (14)
municipal employees, namely:
NAME POSITION DATE OF
APPOINTMENT
Eladio Martinez Registration Officer I June 1, 1995
Divino de Jesus Bookbinder III June 1, 1995
Morell Ayala Accounting Clerk III June 16, 1995
Daisy Porta Clerk IV June 27, 1995
Aristeo Catalla Gen. Services Officer June 19, 1995
Elsa Marino Mun. Agriculturist June 19, 1995
Gracella Glory Bookkeeper II June 27, 1995
Ma. Petra Muffet Lucce Accounting Clerk III June 27, 1995

Felicidad Orindag Accounting Clerk II June 27, 1995

Bernardita Mendoza Agricultural Technologist June 27, 1995
Flordeliza Oriazel Clerk I June 27, 1995
Jane Macatangay Day Care Worker I June 27, 1995
Adolfo Glodoviza Utility Worker II June 27, 1995
Florencio Ramos Utility Foreman June 27, 1995[1]
Petitioner de Rama justified his recall request on the allegation that the
appointments of the said employees were midnight appointments of the former mayor,
Ma. Evelyn S. Abeja, done in violation of Article VII, Section 15 of the 1987
Constitution, which provides:
Section 15. Two months immediately before the next presidential elections and up to
the end of his term, a President or Acting President shall not make appointments,
except temporary appointments to executive positions when continued vacancies
therein will prejudice public service or endanger public safety. (Underscoring
supplied)
While the matter was pending before the CSC, three of the above-named
employees, namely: Elsa Marino, Morell Ayala, and Flordeliza Oriazel, filed with the
CSC a claim for payment of their salaries, alleging that although their appointments
were declared permanent by Conrado Gulim, Director II of the CSC Field Office
based in Quezon, petitioner de Rama withheld the payment of their salaries and
benefits pursuant to Office Order No. 95-01, which was issued on June 30, 1995,
wherein the appointments of the said fourteen (14) employees were recalled.
Based on the documents submitted by Marino, Ayala and Oriazel, the Legal and
Quasi-Judicial Division of the CSC issued an Order [2] finding that since the claimantsemployees had assumed their respective positions and performed their duties pursuant
to their appointments, they are therefore entitled to receive the salaries and benefits
appurtenant to their positions. Citing Rule V, Section 10 of the Omnibus Rules [3] which
provides, in part, that if the appointee has assumed the duties of the position, he shall
be entitled to receive his salary at once without awaiting the approval of his
appointment by the Commission, the CSC Legal and Quasi-Judicial Division ruled

that the said employees cannot be deprived of their salaries and benefits by the
unilateral act of the newly-assumed mayor.
On April 30, 1996, the CSC denied petitioners request for the recall of the
appointments of the fourteen employees, for lack of merit. The CSC also cited Rule V,
Sections 9 and 10 of the Omnibus Rules, and declared that the appointments of the
said employees were issued in accordance with pertinent laws. Thus, the same were
effective immediately, and cannot be withdrawn or revoked by the appointing
authority until disapproved by the CSC. The CSC also dismissed petitioners allegation
that these were midnight appointments, pointing out that the Constitutional provision
relied upon by petitioner prohibits only those appointments made by an outgoing
President and cannot be made to apply to local elective officials. Thus, the CSC
opined, the appointing authority can validly issue appointments until his term has
expired, as long as the appointee meets the qualification standards for the position. [4]
The CSC upheld the validity of the appointments on the ground that they had
already been approved by the Head of the CSC Field Office in Lucena City, and for
petitioners failure to present evidence that would warrant the revocation or recall of
the said appointments.
Petitioner moved for the reconsideration of the CSCs Resolution, as well as the
Order of the CSC Legal and Quasi-Judicial Division, averring that the CSC was
without jurisdiction: (1) to refuse to revoke the subject appointments; and (2) to
uphold the validity of said appointments, even assuming that there was failure to
present evidence that would prove that these appointments contravened existing laws
or rules. He also posited that the CSC erred in finding the appointments valid despite
the existence of circumstances showing that the same were fraudulently issued and
processed.
On November 21, 1996, the CSC denied
reconsideration. The CSC reiterated its ruling that:

petitioners

motion

for

In the absence of any showing that these alleged midnight appointments were
defective in form and in substance, nor is there evidence presented to show that
subject appointments were issued in contravention of law or rules, these appointments
are deemed valid and in effect.
xxxxxxxxx

Mayor de Rama failed to present evidence that subject appointments should be

revoked or recalled because of any of the abovementioned grounds enumerated. As a
matter of fact, said appointments were even approved by the Head, Civil Service Field
Office, Lucena City when submitted for attestation. In the absence of a clear showing
that these appointments were issued in violation of any of these grounds, the
Commission has no other recourse but to uphold their validity. (Underscoring
supplied)
The CSC also cited the Supreme Court ruling in the case of Aquino v. Civil
Service Commission[5] wherein this Court held that:
It is well-settled that once an appointment is issued and the moment the appointee
assumes a position in the civil service under a completed appointment, he acquires a
legal, not merely equitable right (to the position), which is protected not only by
statute, but also by the Constitution, and cannot be taken away from him either by
revocation of the appointment, or by removal, except for cause, and with previous
notice and hearing. (Emphasis supplied)
Consequently, petitioner filed a petition for review before the Court of Appeals,
arguing that the CSC arrived at the erroneous conclusion after it ignored his
supplement to the consolidated appeal and motion for reconsideration wherein he laid
out evidence showing that the subject appointments were obtained through fraud.
After reviewing the facts and issues raised by petitioner, the Court of Appeals
issued a Resolution[6] dated May 16, 1997 which held that there was no abuse of the power of appointment on
the part of the outgoing mayor.

The Court of Appeals further held that the fact that the appointments of Marino,
Ayala, Ramos, Mendoza and Glory were made more than four (4) months after the
publication of the vacancies to which they were appointed is of no moment. Setting
aside petitioners suppositions, the Court of Appeals ruled that Republic Act No. 7041
does not provide that every appointment to the local government service must be
made within four (4) months from publication of the vacancies. It cited Section 80 of
said Act, to wit:
Section 80. Public Notice of Vacancy: Personnel Selection Board. (a) Whenever a
local chief executive decides to fill a vacant career position, there shall be posted
notices of the vacancy in at least three (3) conspicuous public places in the local
government unit concerned for a period of not less than fifteen (15) days.

(b) There shall be established in every province, city or municipality a personnel

selection board to assist the local chief executive in the judicious and objective
selection of personnel for employment as well as for promotion, and in the
formulation of such policies as would contribute to employee welfare.
(c) The personnel selection board shall be headed by the local sanggunian
concerned. A representative of the Civil Service Commission, if any, and the
personnel officer of the local government unit concerned shall be ex officio members
of the board.[7]
Likewise, neither did the CSCs own Circular Order No. 27, Section 7, Series of
1991, require that vacant positions published in a government quarterly must be filled
up before the advent of the succeeding quarter.
On the basis of all the foregoing findings, the Court of Appeals denied for lack of
merit the petition for review.
Petitioner filed a motion for reconsideration arguing that the appellate court erred
in upholding the CSCs resolutions despite the following defects:
I. No screening process and no criteria were adopted by the Personnel Selection Board
in nominating the respondents;
II. No posting in three (3) conspicuous public places of notice of vacancy as required
by the rules and the law;
III. Merit and fitness requirements were not observed by the selection board and by
the appointing authority as required by the Civil Service rules;
IV. Petitioner has valid grounds to recall the appointments of respondents. [8]
In a Resolution dated October 20, 1997, the Court of Appeals denied the motion
for reconsideration.
Hence, the instant petition for review on certiorari on the following assigned
errors:
I. THE PUBLIC RESPONDENT COURT OF APPEALS, GRAVELY AND
SERIOUSLY ERRED IN FINDING THAT THE CIVIL SERVICE COMMISSION
WAS CORRECT IN NOT UPHOLDING THE PETITIONERS RECALL OF THE

APPOINTMENTS OF PRIVATE RESPONDENTS IN THE FACE OF FRAUD AND

VIOLATION OF RULES AND LAWS ON ISSUANCE OF APPOINTMENTS.
II. THE PUBLIC RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN
FINDING THAT THE PARTICULAR GROUNDS NAMELY:
I. No screening process and no criteria were adopted by the Personnel
Selection Board in nominating the respondents;
II. No posting in three (3) conspicuous public places of notice of vacancy as
required by the rules and the law;
III. Merit and fitness requirements were not observed by the selection board
and by the appointing authority as required by the Civil Service rules;
IV. Petitioner has valid grounds to recall the appointments of respondents.
ARE NEW ISSUES BECAUSE THE GROUNDS FOR RECALL OF THE
APPOINTMENTS BY THE PETITIONER WERE PRECISELY THE VIOLATION
OF LAWS AND REGULATIONS ON ISSUANCE OF APPOINTMENTS AS
RAISED BEFORE THE RESPONDENT CIVIL SERVICE COMMISSION.
Petitioner assails the findings of both the CSC and the Court of Appeals for being
contrary to law and not being supported by the evidence on record.
This argument is too specious to be given credence. The records reveal that when
the petitioner brought the matter of recalling the appointments of the fourteen (14)
private respondents before the CSC, the only reason he cited to justify his action was
that these were midnight appointments that are forbidden under Article VII, Section
15 of the Constitution. However, the CSC ruled, and correctly so, that the said
prohibition applies only to presidential appointments. In truth and in fact, there is no
law that prohibits local elective officials from making appointments during the last
days of his or her tenure. Petitioner certainly did not raise the issue of fraud on the
part of the outgoing mayor who made the appointments. Neither did he allege that the
said appointments were tainted by irregularities or anomalies that breached laws and
regulations governing appointments.His solitary reason for recalling these
appointments was that they were, to his personal belief, midnight appointments which
the outgoing mayor had no authority to make.

Even in petitioners consolidated appeal and motion for reconsideration, he did not
make any assertion that these appointments were violative of civil service rules and
procedures. Indeed, he harped on the CSCs alleged lack of jurisdiction to refuse to
recall the subject appointments. After first invoking the authority of the CSC to
approve or affirm his act, he then contradicted himself by arguing that the CSC had no
jurisdiction to do so, but only after the CSC had ruled that the recall was without legal
basis. He emphasized that he alone has sole discretion to appoint and recall the
appointment of municipal employees, an authority which, he stressed, the CSC cannot
usurp. Yet, nowhere in said pleading did he cite any other ground, much less present
proof that would warrant the recall of said appointments.
Perhaps realizing the weakness of his arguments, albeit belatedly, petitioner filed a
supplement to the appeal and motion for reconsideration where, for the very first time,
he alleged that the appointments were fraught with irregularities for failing to comply
with CSC rules and regulations.Nevertheless, the CSC overruled petitioners
assertions, holding that no new evidence had been presented to warrant a reversal of
its earlier resolution.
Thus, in a petition for review before the Court of Appeals, petitioner questioned
the CSCs conclusion because it had ignored the allegations and documents he
presented in the supplement to his earlier consolidated appeal and motion for
reconsideration. He argued that these form part of the records of the case and that the
CSC erred in failing to consider the assertions he raised therein. The appellate court,
however, agreed with the CSC when it ruled that the documents presented by
petitioner in the supplemental pleading did not constitute new evidence that would
convince the CSC to reverse its earlier ruling. In fine, the Court of Appeals, as did the
CSC, simply dismissed petitioners allegations and documents attached to the
supplemental pleading for they did not constitute new evidence that a court, board or
tribunal may entertain.
Herein lies the inconsistency of petitioners arguments. He faults the Court of
Appeals and the CSC for ignoring his supplemental pleading, while at the same time
arguing that the grounds for recall such as violations of laws and regulations on
issuance of appointments are not new issues because he had timely raised them before
the CSC.
There is no question that parties may file supplemental pleadings to supply
deficiencies in aid of an original pleading, but which should not entirely substitute the

latter.[9] The propriety and substance of supplemental pleadings are prescribed under
Rule 10, Section 6 of the 1997 Rules of Civil Procedure, which provides:
Sec. 6. Supplemental Pleadings. - Upon motion of a party the court may, upon
reasonable notice and upon such terms as are just, permit him to serve a supplemental
pleading setting forth transactions, occurrences or events which have happened since
the date of the pleading sought to be supplemented. The adverse party may plead
thereto within ten (10) days from notice of the order admitting the supplemental
pleading.
Supplemental pleadings must be with reasonable notice, and it is discretionary
upon the court or tribunal to allow the same or not. Thus, the CSC was under no
obligation to admit the supplemental pleading, or even to consider the averments
therein.
Secondly, a supplemental pleading must state transactions, occurrences or events
which took place since the time the pleading sought to be supplemented was filed. In
the instant case, petitioner alleged fraud and irregularities that supposedly occurred
contemporaneous to the execution of the appointments. They should have been raised
at the very first opportunity. They are not new events which petitioner could not have
originally included as grounds for the recall of the appointments.
Accordingly, the CSC, as well as the Court of Appeals, found that the allegations
in his supplemental pleading did not constitute new evidence that can be the proper
subject of a supplemental pleading. These were old facts and issues which he failed to
raise earlier. Consequently, the CSC and the Court of Appeals did not err in refusing
to give credence to the supplemental pleading.
Be that as it may, these alleged irregularities were considered by the CSC and the
Court of Appeals as new issues which were raised for the first time on appeal. It is
rather too late for petitioner to raise these issues for the first time on appeal. It is wellsettled that issues or questions of fact cannot be raised for the first time on appeal.
[10]
We have consistently held that matters, theories or arguments not brought out in the
original proceedings cannot be considered on review or appeal where they are raised
for the first time.[11] To consider the alleged facts and arguments raised belatedly in the
supplemental pleading to the appeal at this very late stage in the proceedings would
amount to trampling on the basic principles of fair play, justice and due process. [12]

The grounds for the recall of the appointments that petitioner raised in his
supplemental pleading to the consolidated appeal and motion for reconsideration are
that: (1) the rules on screening of applicants based on adopted criteria were not
followed; (2) there was no proper posting of notice of vacancy; and (3) the merit and
fitness requirements set by the civil service rules were not observed. These are
grounds that he could have stated in his order of recall, but which he did not. Neither
did he raise said grounds in his original appeal, but only by way of a supplemental
pleading.Failure of the petitioner to raise said grounds and to present supporting
documents constitute a waiver thereof, and the same arguments and evidence can no
longer be entertained on appeal before the CSC, nor in the Court of Appeals, and
much less in a petition for review before the Supreme Court. [13] In fine, the raising of
these factual issues for the first time in a pleading which is supplemental only to an
appeal is barred by estoppel.[14]
Petitioner asks this Court to appreciate and consider these factual issues. It must
be recalled that the jurisdiction of the Supreme Court 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. [15] That is, of course, unless the factual findings assailed by
petitioner are devoid of support by the evidence on record or the impugned judgment
is based on a misapprehension of facts.[16]
A thorough perusal of the records reveal that the CSCs ruling is supported by the
evidence and the law. The fourteen (14) employees were duly appointed following
two meetings of the Personnel Selection Board held on May 31 and June 26,
1995. There is no showing that any of the private respondents were not qualified for
the positions they were appointed to. Moreover, their appointments were duly attested
to by the Head of the CSC field office at Lucena City. By virtue thereof, they had
already assumed their appointive positions even before petitioner himself assumed his
elected position as town mayor. Consequently, their appointments took effect
immediately and cannot be unilaterally revoked or recalled by petitioner.
It has been held that upon the issuance of an appointment and the appointees
assumption of the position in the civil service, he acquires a legal right which cannot
be taken away either by revocation of the appointment or by removal except for cause
and with previous notice and hearing. [17]Moreover, it is well-settled that the person
assuming a position in the civil service under a completed appointment acquires a
legal, not just an equitable, right to the position. This right is protected not only by
statute, but by the Constitution as well, which right cannot be taken away by either

revocation of the appointment, or by removal, unless there is valid cause to do so,

provided that there is previous notice and hearing. [18]
Petitioner admits that his very first official act upon assuming the position of town
mayor was to issue Office Order No. 95-01 which recalled the appointments of the
private respondents. There was no previous notice, much less a hearing accorded to
the latter. Clearly, it was petitioner who acted in undue haste to remove the private
respondents without regard for the simple requirements of due process of law. In
doing so, he overstepped the bounds of his authority. While he argues that the
appointing power has the sole authority to revoke said appointments, there is no
debate that he does not have blanket authority to do so. Neither can he question the
CSCs jurisdiction to affirm or revoke the recall.
Rule V, Section 9 of the Omnibus Implementing Regulations of the Revised
Administrative Code specifically provides that an appointment accepted by the
appointee cannot be withdrawn or revoked by the appointing authority and shall
remain in force and in effect until disapproved by the Commission. Thus, it is the
CSC that is authorized to recall an appointment initially approved, but only when such
appointment and approval are proven to be in disregard of applicable provisions of the
civil service law and regulations.[19]
Moreover, Section 10 of the same rule provides:
Sec. 10. An appointment issued in accordance with pertinent laws and rules shall take
effect immediately upon its issuance by the appointing authority, and if the appointee
has assumed the duties of the position, he shall be entitled to receive his salary at once
without awaiting the approval of his appointment by the Commission. The
appointment shall remain effective until disapproved by the Commission. In no case
shall an appointment take effect earlier than he date of its issuance.
Section 20 of Rule VI also provides:
Sec. 20. Notwithstanding the initial approval of an appointment, the same may be
recalled on any of the following grounds:
(a) Non-compliance with the procedures/criteria provided in the agencys Merit Promotion Plan;
(b) Failure to pass through the agencys Selection/Promotion Board;
(c) Violation of the existing collective agreement between management and employees relative
to promotion; or

(d) Violation of other existing civil service law, rules and regulations.

Accordingly, the appointments of the private respondents may only be recalled on

the above-cited grounds. And yet, the only reason advanced by the petitioner to justify
the recall was that these were midnight appointments. The CSC correctly ruled,
however, that the constitutional prohibition on so-called midnight appointments,
specifically those made within two (2) months immediately prior to the next
presidential elections, applies only to the President or Acting President.
If ever there were other procedural or legal requirements that were violated in
implementing the appointments of the private respondents, the same were not
seasonably brought before the Civil Service Commission. These cannot be raised for
the first time on appeal.
WHEREFORE, in view of all the foregoing, the instant petition for review is
DENIED and the Resolution of the Court of Appeals in CA-G.R. SP No. 42896
affirming CSC Resolutions Nos. 96-2828 and 96-7527 is hereby AFFIRMED in toto.
No pronouncement as to costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-17396

May 30, 1962

CECILIO PE, ET AL., plaintiffs-appellants,

vs.
ALFONSO PE, defendant-appellee.
Cecilio L. Pe for and in his own behalf as plaintiff-appellant.
Leodegario L. Mogol for defendant-appellee.
BAUTISTA ANGELO, J.:
Plaintiffs brought this action before the Court of First Instance of Manila to recover moral,
compensatory, exemplary and corrective damages in the amount of P94,000.00 exclusive of
attorney's fees and expenses of litigation.
Defendant, after denying some allegations contained in the complaint, set up as a defense that the
facts alleged therein, even if true, do not constitute a valid cause of action.
After trial, the lower court, after finding that defendant had carried on a love affair with one Lolita Pe,
an unmarried woman, being a married man himself, declared that defendant cannot be held liable for
moral damages it appearing that plaintiffs failed to prove that defendant, being aware of his marital
status, deliberately and in bad faith tried to win Lolita's affection. So it rendered decision dismissing
the complaint.
1wph1.t

Plaintiffs brought this case on appeal before this Court on the ground that the issues involved are
purely of law.
The facts as found by the trial court are: Plaintiffs are the parents, brothers and sisters of one Lolita
Pe. At the time of her disappearance on April 14, 1957, Lolita was 24 years old and unmarried.
Defendant is a married man and works as agent of the La Perla Cigar and Cigarette Factory. He
used to stay in the town of Gasan, Marinduque, in connection with his aforesaid occupation. Lolita
was staying with her parents in the same town. Defendant was an adopted son of a Chinaman
named Pe Beco, a collateral relative of Lolita's father. Because of such fact and the similarity in their
family name, defendant became close to the plaintiffs who regarded him as a member of their family.
Sometime in 1952, defendant frequented the house of Lolita on the pretext that he wanted her to
teach him how to pray the rosary. The two eventually fell in love with each other and conducted
clandestine trysts not only in the town of Gasan but also in Boac where Lolita used to teach in a
barrio school. They exchanged love notes with each other the contents of which reveal not only their
infatuation for each other but also the extent to which they had carried their relationship. The rumors
about their love affairs reached the ears of Lolita's parents sometime, in 1955, and since then
defendant was forbidden from going to their house and from further seeing Lolita. The plaintiffs even
filed deportation proceedings against defendant who is a Chinese national. The affair between
defendant and Lolita continued nonetheless.

Sometime in April, 1957, Lolita was staying with her brothers and sisters at their residence at 54-B
Espaa Extension, Quezon City. On April 14, 1957, Lolita disappeared from said house. After she
left, her brothers and sisters checked up her thing and found that Lolita's clothes were gone.
However, plaintiffs found a note on a crumpled piece of paper inside Lolita's aparador. Said note,
written on a small slip of paper approximately 4" by 3" in size, was in a handwriting recognized to be
that of defendant's. In English it reads:
Honey, suppose I leave here on Sunday night, and that's 13th of this month and we will have
a date on the 14th, that's Monday morning at 10 a.m.
Reply
Love
The disappearance of Lolita was reported to the police authorities and the NBI but up to the present
there is no news or trace of her whereabouts.
The present action is based on Article 21 of the New Civil Code which provides:
Any person who wilfully causes loss or injury to another in a manner which is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
There is no doubt that the claim of plaintiffs for damages is based on the fact that defendant, being a
married man, carried on a love affair with Lolita Pe thereby causing plaintiffs injury in a manner
contrary to morals, good customs and public policy. But in spite of the fact that plaintiffs have clearly
established that in illicit affair was carried on between defendant and Lolita which caused great
damage to the name and reputation of plaintiffs who are her parents, brothers and sisters, the trial
court considered their complaint not actionable for the reason that they failed to prove that defendant
deliberately and in bad faith tried to win Lolita's affection Thus, the trial court said: "In the absence of
proof on this point, the court may not presume that it was the defendant who deliberately induced
such relationship. We cannot be unmindful of the uncertainties and sometimes inexplicable
mysteries of the human emotions. It is a possibility that the defendant and Lolita simply fell in love
with each other, not only without any desire on their part, but also against their better judgment and
in full consciousness of what it will bring to both of them. This is specially so with respect to Lolita,
being an unmarried woman, falling in love with defendant who is a married man."
We disagree with this view. The circumstances under which defendant tried to win Lolita's affection
cannot lead, to any other conclusion than that it was he who, thru an ingenious scheme or trickery,
seduced the latter to the extent of making her fall in love with him. This is shown by the fact that
defendant frequented the house of Lolita on the pretext that he wanted her to teach him how to pray
the rosary. Because of the frequency of his visits to the latter's family who was allowed free access
because he was a collateral relative and was considered as a member of her family, the two
eventually fell in love with each other and conducted clandestine love affairs not only in Gasan but
also in Boac where Lolita used to teach in a barrio school. When the rumors about their illicit affairs
reached the knowledge of her parents, defendant was forbidden from going to their house and even
from seeing Lolita. Plaintiffs even filed deportation proceedings against defendant who is a Chinese
national. Nevertheless, defendant continued his love affairs with Lolita until she disappeared from
the parental home. Indeed, no other conclusion can be drawn from this chain of events than that
defendant not only deliberately, but through a clever strategy, succeeded in winning the affection and

love of Lolita to the extent of having illicit relations with her. The wrong he has caused her and her
family is indeed immeasurable considering the fact that he is a married man. Verily, he has
committed an injury to Lolita's family in a manner contrary to morals, good customs and public policy
as contemplated in Article 21 of the new Civil Code.
WHEREFORE, the decision appealed from is reversed. Defendant is hereby sentenced to pay the
plaintiffs the sum of P5,000.00 as damages and P2,000.00 as attorney's fees and expenses of
litigations. Costs against appellee.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-14628

September 30, 1960

FRANCISCO HERMOSISIMA, petitioner,

vs.
THE HON. COURT OF APPEALS, ET AL., respondents.
Regino Hermosisima for petitioner.
F.P. Gabriel, Jr. for respondents.
CONCEPCION, J.:
An appeal by certiorari, taken by petitioner Francisco Hermosisima, from a decision of Court of
Appeals modifying that of the Court of First Instance of Cebu.
On October 4, 1954, Soledad Cagigas, hereinafter referred to as complaint, filed with said of her
child, Chris Hermosisima, as natural child and moral damages for alleged breach of promise.
Petitioner admitted the paternity of child and expressed willingness to support the latter, but denied
having ever promised to marry the complainant. Upon her motion, said court ordered petitioner, on
October 27, 1954, to pay, by way of alimonypendente lite, P50.00 a month, which was, on February
16, 1955, reduced to P30.00 a month. In due course, later on, said court rendered a decision the
dispositive part of which reads:
WHEREFORE, judgment is hereby rendered, declaring the child, Chris Hermosisima, as the
natural daughter of defendant, and confirming the order pendente lite, ordering defendant to
pay to the said child, through plaintiff, the sum of thirty pesos (P30.00), payable on or before
the fifth day of every month sentencing defendant to pay to plaintiff the sum of FOUR
THOUSAND FIVE HUNDRED PESOS (P4,500.00) for actual and compensatory damages;
the sum of FIVE THOUSAND PESOS (P5,000.00) as moral damages; and the further sum of
FIVE HUNDRED PESOS (P500.00) as attorney's fees for plaintiff, with costs against
defendant.
On appeal taken by petitioner, the Court of Appeals affirmed this decision, except as to the actual
and compensatory damages and the moral damages, which were increased to P5,614.25 and
P7,000.00, respectively.
The main issue before us is whether moral damages are recoverable, under our laws, for breach of
promise to marry. The pertinent facts are:
Complainant Soledad Cagigas, was born in July 1917. Since 1950, Soledad then a teacher in the
Sibonga Provincial High School in Cebu, and petitioner, who was almost ten (10) years younger than
she, used to go around together and were regarded as engaged, although he had made no promise
of marriage prior thereto. In 1951, she gave up teaching and became a life insurance underwriter in

the City of Cebu, where intimacy developed among her and the petitioner, since one evening in
1953, when after coming from the movies, they had sexual intercourse in his cabin on board M/V
"Escao," to which he was then attached as apprentice pilot. In February 1954, Soledad advised
petitioner that she was in the family way, whereupon he promised to marry her. Their child, Chris
Hermosisima, was born on June 17, 1954, in a private maternity and clinic. However, subsequently,
or on July 24, 1954, defendant married one Romanita Perez. Hence, the present action, which was
commenced on or about October 4, 1954.
Referring now to the issue above referred to, it will be noted that the Civil Code of Spain permitted
the recovery of damages for breach to marry. Article 43 and 44 of said Code provides:
ART. 43. A mutual promise of marriage shall not give rise to an obligation to contract
marriage. No court shall entertain any complaint by which the enforcement of such promise
is sought.
ART. 44. If the promise has been in a public or private instrument by an adult, or by a minor
with the concurrence of the person whose consent is necessary for the celebration of the
marriage, or if the banns have been published, the one who without just cause refuses to
marry shall be obliged to reimburse the other for the expenses which he or she may have
incurred by reason of the promised marriage.
The action for reimbursement of expenses to which the foregoing article refers must be
brought within one year, computed from the day of the refusal to celebrate the marriage.
Inasmuch as these articles were never in force in the Philippines, this Court ruled in De Jesus vs.
Syquia (58 Phil., 866), that "the action for breach of promises to marry has no standing in the civil
law, apart from the right to recover money or property advanced . . . upon the faith of such promise".
The Code Commission charged with the drafting of the Proposed Civil Code of the Philippines deem
it best, however, to change the law thereon. We quote from the report of the Code Commission on
said Proposed Civil Code:
Articles 43 and 44 the Civil Code of 1889 refer to the promise of marriage. But these articles
are not enforced in the Philippines. The subject is regulated in the Proposed Civil Code not
only as to the aspect treated of in said articles but also in other particulars. It is advisable to
furnish legislative solutions to some questions that might arise relative to betrothal. Among
the provisions proposed are: That authorizing the adjudication of moral damages, in case of
breach of promise of marriage, and that creating liability for causing a marriage engagement
to be broken.
1awphl.nt

Accordingly, the following provisions were inserted in said Proposed Civil Code, under Chapter I,
Title III, Book I thereof:
Art. 56. A mutual promise to marry may be made expressly or impliedly.
Art. 57. An engagement to be married must be agreed directly by the future spouses.
Art. 58. A contract for a future marriage cannot, without the consent of the parent or
guardian, be entered into by a male between the ages of sixteen and twenty years or by a
female between the ages of sixteen and eighteen years. Without such consent of the parents

or guardian, the engagement to marry cannot be the basis of a civil action for damages in
case of breach of the promise.
Art. 59. A promise to marry when made by a female under the age of fourteen years is not
civilly actionable, even though approved by the parent or guardian.
Art. 60. In cases referred to in the proceeding articles, the criminal and civil responsibility of a
male for seduction shall not be affected.
Art. 61. No action for specific performance of a mutual promise to marry may be brought.
Art. 62. An action for breach of promise to marry may be brought by the aggrieved party
even though a minor without the assistance of his parent or guardian. Should the minor
refuse to bring suit, the parent or guardian may institute the action.
Art. 63. Damages for breach of promise to marry shall include not only material and
pecuniary losses but also compensation for mental and moral suffering.
Art. 64. Any person, other than a rival, the parents, guardians and grandparents, of the
affianced parties, who cause a marriage engagement to be broken shall be liable for
damages, both material and moral, to the engaged person who is rejected.
Art. 65. In case of breach of promise to marry, the party breaking the engagement shall be
obliged to return what he or she has received from the other as gift on account of the
promise of the marriage.
These article were, however, eliminated in Congress. The reason therefor are set forth in the report
of the corresponding Senate Committee, from which we quote:
The elimination of this Chapter is proposed. That breach of promise to marry is not actionable has
been definitely decide in the case of De Jesus vs. Syquia, 58 Phil., 866. The history of breach of
promise suit 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 the rights of action in the so-called Balm suit in many of the American States.
See statutes of:
Florida 1945 pp. 1342 1344
Maryland 1945 pp. 1759 1762
Nevada 1943 p. 75
Maine 1941 pp. 140 141
New Hampshire 1941 p. 223
California 1939 p. 1245
Massachusetts 1938 p. 326
Indiana 1936 p. 1009
Michigan 1935 p. 201
New York 1935
Pennsylvania p. 450

The Commission perhaps though that it has followed the more progression trend in
legislation when it provided for breach of promise to marry suits. But it is clear that the
creation of such causes of action at a time when so many States, in consequence of years of
experience are doing away with them, may well prove to be a step in the wrong direction.
(Congressional Record, Vol. IV, No. 79, Thursday, May 19, 1949, p. 2352.)
The views thus expressed were accepted by both houses of Congress. In the light of the clear and
manifest intent of our law making body not to sanction actions for breach of promise to marry, the
award of moral damages made by the lower courts is, accordingly, untenable. The Court of Appeals
said award:
Moreover, it appearing that because of defendant-appellant's seduction power, plaintiffappellee, overwhelmed by her love for him finally yielded to his sexual desires in spite of her
age and self-control, she being a woman after all, we hold that said defendant-appellant is
liable for seduction and, therefore, moral damages may be recovered from him under the
provision of Article 2219, paragraph 3, of the new Civil Code.
Apart from the fact that the general tenor of said Article 2219, particularly the paragraphs preceding
and those following the one cited by the Court of Appeals, and the language used in said paragraph
strongly indicates that the "seduction" therein contemplated is the crime punished as such in Article
as such in Article 337 and 338 of the Revised Penal Code, which admittedly does not exist in the
present case, 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 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" "by having a fruit of
their engagement even before they had the benefit of clergy."
The court of first instance sentenced petitioner to pay the following: (1) a monthly pension of P30.00
for the support of the child: (2) P4,500, representing the income that complainant had allegedly failed
to earn during her pregnancy and shortly after the birth of the child, as actual and compensation
damages; (3) P5,000, as moral damages; and (4) P500.00, as attorney's fees. The Court of Appeals
added to the second item the sum of P1,114.25 consisting of P144.20, for hospitalization and
medical attendance, in connection with the parturiation, and the balance representing expenses
incurred to support the child and increased the moral damages to P7,000.00.
With the elimination of this award for damages, the decision of the Court of Appeals is hereby
affirmed, therefore, in all other respects, without special pronouncement as to cost in this instance. It
is so ordered.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-14733

September 30, 1960

ERLINDA ESTOPA, plaintiff-appellee,

vs.
LORETA PIANSAY, JR., defendant-appellant.
Excelso V. Araneta for appellant.
Arcadio C. Sevilla for appellee.
BENGZON, J.:
Appeal from the decision of the Negros Occidental court of first instance awarding to plaintiff the sum
of P5,000.00 by way of moral damages, P2,000.00 as exemplary damages and P1,000.00 as
attorney's fees.
As stated by the court below, "this is an action for recovery of moral and exemplary damages and
attorney's fees. There is no dispute regarding the facts of this case. The plaintiff Erlinda Estopa, a
beautiful girl of twenty-three, residing in Bago, Negros Occidental, with her widowed mother,
Felicidad Estopa, stated that she fell in love and submitted herself completely to the defendant
Loreta Piansay, Jr., sometime in September, 1957, after a courtship that lasted for a couple of
months during which period the defendant consistently promised and succeeded to make her
believe in him that he was going to marry her; that sometime in December, 1957, the plaintiff was
informed reliably that defendant was backing out from his promise of marriage so she demanded
defendant's compliance to his promise in order to vindicate her honor, and plaintiff went to the extent
of asking the help of defendant's parents, but all her efforts were in vain. Finally, realizing that her
efforts were futile but knowing that her cause was not completely lost, she decided to file her
complaint, not to compel defendant to marry her, but to demand from him a compensation for the
damages that she sustained."
There is no claim for any other kind of damages. In fact, Erlinda Estopa filed no brief here. And her
complaint merely alleged "social humiliation, mental anguish, besmirched reputation, wounded
feeling and moral shock."
1awphl.nt

We have today decided that in this jurisdiction, under the New Civil Code, the mere breach of a
promise to marry is not actionable. (Hermosisima vs. Court of Appeals, Supra, 631); and we have
reversed the Cebu court's award for moral damages in breach of promise suit. Consistently with
such ruling, Loreta Piansay, Jr. may not be condemned to pay moral damages, in this case.
Now, as plaintiff has no right to moral damages, she may not demand exemplary damages. (She
lays no claim to temperate or compensatory damages.)

While the amount of the exemplary damages need not be proved, the plaintiff must show that
he is entitled to moral, temperate or compensatory damages before the court may
consider the question of whether or not exemplary damages should be awarded. (Art. 2234,
New Civil Code) (Emphasis supplied.)
Therefore, as plaintiff is not entitled to any damages at all, there is no reason to require Piansay, Jr.
to satisfy attorney's fees.
Judgment reversed, defendant absolved from all liability. No costs.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
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:
NOTHING CHANGED REST ASSURED RETURNING VERY SOON APOLOGIZE
MAMA PAPA LOVE .
PAKING
Thereafter Velez did not appear nor was he heard from again.
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
informed the court that chances of settling the case amicably were nil.
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 in Hermosisima vs. Court of Appeals (L14628, 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.
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.
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.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION

G.R. No. 57227 May 14, 1992

AMELITA CONSTANTINO and MICHAEL CONSTANTINO, the latter represented herein by the former, his
mother and natural guardian, petitioners,
vs.
IVAN MENDEZ and the HONORABLE COURT OF APPEALS, respondents.
Roberto M. Sarenas for petitioners.
Bienvinido D. Cariaga for private respondent.

BIDIN, J.:
This is a petition for review on certiorari questioning the decision 1 dated April 30, 1981 of the Court of Appeals in

CA-G.R. No. 61552-R which dismissed petitioner's complaint and set aside the resolution 2 dated October
21, 1976 of the then Court of First Instance of Davao, 16th Judicial District, amending the dispositive
portion of its decision dated June 21, 1976 and ordering private respondent Ivan Mendez: (1) to
acknowledge the minor Michael Constantino as his illegitimate child; (2) to give a monthly support of
P300.00 to the minor child; (3) to pay complainant Amelita Constantino the sum of P8,200.00 as actual
and moral damages; and (4) to pay attorney's fees in the sum of P5,000 plus costs.
It appears on record that on June 5, 1975, petitioner Amelita Constantino filed an action for acknowledgment, support
and damages against private respondent Ivan Mendez. The case was filed with the then CFI of Davao, 10th Judicial
District and docketed as Civil Case No. 8881. In her complaint, Amelita Constantino alleges, among others, that
sometime in the month of August, 1974, she met Ivan Mendez at Tony's Restaurant located at Sta. Cruz, Manila,
where she worked as a waitress; that the day following their first meeting, Ivan invited Amelita to dine with him at
Hotel Enrico where he was billeted; that while dining, Ivan professed his love and courted Amelita; that Amelita asked
for time to think about Ivan's proposal; that at about 11:00 o'clock in the evening, Amelita asked Ivan to bring her
home to which the latter agreed, that on the pretext of getting something, Ivan brought Amelita inside his hotel room
and through a promise of marriage succeeded in having sexual intercourse with the latter; that after the sexual
contact, Ivan confessed to Amelita that he is a married man; that they repeated their sexual contact in the months of
September and November, 1974, whenever Ivan is in Manila, as a result of which Amelita got pregnant; that her pleas
for help and support fell on deaf ears; that Amelita had no sexual relations with any other man except Ivan who is the
father of the child yet to be born at the time of the filing of the complaint; that because of her pregnancy, Amelita was
forced to leave her work as a waitress; that Ivan is a prosperous businessman of Davao City with a monthly income
of P5,000 to P8,000. As relief, Amelita prayed for the recognition of the unborn child, the payment of actual, moral
and exemplary damages, attorney's fees plus costs.
In his answer dated August 5, 1975, Ivan admitted that he met Amelita at Tony's Cocktail Lounge but denied having
sexual knowledge or illicit relations with her. He prayed for the dismissal of the complaint for lack of cause of action.
By way of counterclaim, he further prayed for the payment of exemplary damages and litigation expense including
attorney's fees for the filing of the malicious complaint.

On September 1, 1975, Amelita Constantino filed a motion for leave to amend the complaint impleading as co-plaintiff
her son Michael Constantino who was born on August 3, 1975. In its order dated September 4, 1975, the trial court
admitted the amended complaint.
On September 11, 1975, Ivan Mendez filed his answer to the amended complaint reiterating his previous answer
denying that Michael Constantino is his illegitimate son.
After hearing, the trial court rendered a decision dated June 21, 1976, the dispositive portion of which reads, viz:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of plaintiff Amelita
Constantino and against defendant Ivan Mendez, ordering the latter to pay Amelita Constantino the
sum of P8,000.00 by way of actual and moral damages; and, the sum of P3,000.00, as and by way
of attorney's fees. The defendant shall pay the costs of this suit.
SO ORDERED.
From the above decision, both parties filed their separate motion for reconsideration. Ivan Mendez anchored his
motion on the ground that the award of damages was not supported by evidence. Amelita Constantino, on the other
hand, sought the recognition and support of her son Michael Constantino as the illegitimate son of Ivan Mendez.
In its resolution dated October 21, 1976, the trial court granted Amelita Constantino's motion for reconsideration, and
amended the dispositive portion of its decision dated June 21, 1976 to read as follows, viz:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of plaintiff Amelita
Constantino and plaintiff-minor Michael Constantino, and against defendant Ivan Mendez ordering
the latter to pay Amelita Constantino the sum of P8,000.00 by way of actual and moral damages
and the sum of P200.00 as and by way of payment of the hospital and medical bills incurred during
the delivery of plaintiff-minor Michael Constantino; to recognize as his own illegitimate child the
plaintiff-minor Michael Constantino who shall be entitled to all the rights, privileges and benefits
appertaining to a child of such status; to give a permanent monthly support in favor of plaintiff
Michael Constantino the amount of P300.00; and the sum of P5,000.00 as and by way of attorney's
fees. The defendant shall pay the costs of this suit.
Let this Order form part of the decision dated June 21, 1976.
SO ORDERED.
On appeal to the Court of Appeals, the above amended decision was set aside and the complaint was dismissed.
Hence, this petition for review.
Basically, the issue to be resolved in the case at bar is whether or not the Court of Appeals committed a reversible
error in setting aside the decision of the trial court and in dismissing the complaint.
Petitioners contend that the Court of Appeals erred in reversing the factual findings of the trial and in not affirming the
decision of the trial court. They also pointed out that the appellate court committed a misapprehension of facts when it
concluded that Ivan did not have sexual access with Amelita during the first or second week of November, 1976
(should be 1974), the time of the conception of the child.
It must be stressed at the outset that factual findings of the trial court have only a persuasive and not a conclusive
effect on the Court of Appeals. In the exercise of its appellate jurisdiction, it is the duty of the Court of Appeals to
review the factual findings of the trial court and rectify the errors it committed as may have been properly assigned
and as could be established by a re-examination of the evidence on record. It is the factual findings of the Court of
Appeals, not those of the trial court, that as a rule are considered final and conclusive even on this Court (Hermo v.
Hon. Court of Appeals, et al., 155 SCRA 24 [1987]). This being a petition for certiorari under Rule 45 of the Rules of

Court, this Court will review only errors of law committed by the Court of Appeals. It is not the function of this Court to
re-examine all over again the oral and documentary evidence submitted by the parties unless the findings of facts of
the Court of Appeals is not supported by the evidence on record or the judgment is based on misapprehension of
facts (Remalante v. Tibe, et al., 158 SCRA 138 [1988]; Hernandez v. Court of Appeals, et al., 149 SCRA 97 [1987]).
It is the conclusion of the Court of Appeals, based on the evidence on record, that Amelita Constantino has not
proved by clear and convincing evidence her claim that Ivan Mendez is the father of her son Michael Constantino.
Such conclusion based on the evaluation of the evidence on record is controlling on this Court as the same is
supported by the evidence on record. Even the trial court initially entertained such posture. It ordered the recognition
of Michael as the illegitimate son of Ivan only when acting on the motions for reconsideration, it reconsidered, on
October 21, 1976, its earlier decision dated June 21, 1976. Amelita's testimony on cross-examination that she had
sexual contact with Ivan in Manila in the first or second week of November, 1974 (TSN, December 8, 1975, p. 108) is
inconsistent with her response that she could not remember the date of their last sexual intercourse in November,
1974 (Ibid, p. 106). Sexual contact of Ivan and Amelita in the first or second week of November, 1974 is the crucial
point that was not even established on direct examination as she merely testified that she had sexual intercourse with
Ivan in the months of September, October and November, 1974.
Michael Constantino is a full-term baby born on August 3, 1975 (Exhibit 6) so that as correctly pointed out by private
respondent's counsel, citing medical science (Williams Obstetrics, Tenth Ed., p. 198) to the effect that "the mean
duration of actual pregnancy, counting from the day of conception must be close to 267 days", the conception of the
child (Michael) must have taken place about 267 days before August 3, 1975 or sometime in the second week of
November, 1974. While Amelita testified that she had sexual contact with Ivan in November, 1974, nevertheless said
testimony is contradicted by her own evidence (Exh. F), the letter dated February 11, 1975, addressed to Ivan
Mendez requesting for a conference, prepared by her own counsel Atty. Roberto Sarenas to whom she must have
confided the attendant circumstances of her pregnancy while still fresh in her memory, informing Ivan that Amelita is
four (4) months pregnant so that applying the period of the duration of actual pregnancy, the child was conceived on
or about October 11, 1974.
Petitioner's assertion that Ivan is her first and only boyfriend (TSN, December 8, 1975, p. 65) is belied by Exhibit 2,
her own letter addressed to Mrs. Mendez where she revealed the reason for her attachment to Ivan who possessed
certain traits not possessed by her boyfriend. She also confided that she had a quarrel with her boyfriend because of
gossips so she left her work. An order for recognition and support may create an unwholesome atmosphere or may
be an irritant in the family or lives of the parties so that it must be issued only if paternity or filiation is established by
clear and convincing evidence. The burden of proof is on Amelita to establish her affirmative allegations that Ivan is
the father of her son. Consequently, in the absence of clear and convincing evidence establishing paternity or filiation,
the complaint must be dismissed.
As regards Amelita's claim for damages which is based on Articles 19 3 & 21 4 of the Civil Code on the theory that

through Ivan's promise of marriage, she surrendered her virginity, we cannot but agree with the Court of
Appeals that more sexual intercourse is not by itself a basis for recovery. Damages could only be
awarded if sexual intercourse is not a product of voluntariness and mutual desire. At the time she met
Ivan at Tony's Restaurant, Amelita was already 28 years old and she admitted that she was attracted to
Ivan (TSN, December 3, 1975, p. 83). Her attraction to Ivan is the reason why she surrendered her
womanhood. Had she been induced or deceived because of a promise of marriage, she could have
immediately severed her relation with Ivan when she was informed after their first sexual contact
sometime in August, 1974, that he was a married man. Her declaration that in the months of September,
October and November, 1974, they repeated their sexual intercourse only indicates that passion and not
the alleged promise of marriage was the moving force that made her submit herself to Ivan.
WHEREFORE, the instant petition is Dismissed for lack of merit.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
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 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 captain. Insisting, in his Counterclaim, that the complaint
is baseless and unfounded and that as a result thereof, he was unnecessarily dragged into court and
compelled to incur expenses, and has suffered mental anxiety and a besmirched reputation, he prayed for
an award of P5,000.00 for miscellaneous expenses and P25,000.00 as moral damages.
After conducting a pre-trial on 25 January 1988, the trial court issued a Pre-Trial 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:
IN THE LIGHT of the foregoing consideration, judgment is hereby rendered in favor
of the plaintiff and against the defendant.
1. Condemning (sic) the defendant to pay the plaintiff the sum of twenty thousand
(P20,000.00) pesos as moral damages.
2. Condemning further the defendant to play the plaintiff the sum of three thousand
(P3,000.00) pesos as atty's fees and two thousand (P2,000.00) pesos at (sic)
litigation expenses and to pay the costs.
3. All other claims are denied. 6
The decision is anchored on the trial court's findings and conclusions that (a) petitioner and private
respondent were lovers, (b) private respondent is not a woman of loose morals or questionable
virtue who readily submits to sexual advances, (c) petitioner, through machinations, deceit and false

pretenses, promised to marry private respondent, d) because of his persuasive promise to marry
her, she allowed herself to be deflowered by him, (e) by reason of that deceitful promise, private
respondent and her parents in accordance with Filipino customs and traditions made some
preparations for the wedding that was to be held at the end of October 1987 by looking for pigs and
chickens, inviting friends and relatives and contracting sponsors, (f) petitioner did not fulfill his
promise to marry her and (g) such acts of the petitioner, who is a foreigner and who has abused
Philippine hospitality, have offended our sense of morality, good customs, culture and traditions. The
trial court gave full credit to the private respondent's testimony because, inter alia, she would not
have had the temerity and courage to come to court and expose her honor and reputation to public
scrutiny and ridicule if her claim was false. 7
The above findings and conclusions were culled from the detailed summary of the evidence for the
private respondent in the foregoing decision, digested by the respondent Court as follows:
According to plaintiff, who claimed that she was a virgin at the time and that she
never had a boyfriend before, defendant started courting her just a few days after
they first met. He later proposed marriage to her several times and she accepted his
love as well as his proposal of marriage on August 20, 1987, on which same day he
went with her to her hometown of 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 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).
Upon the other hand, appellant does not appear to be a man of good moral character
and must think so low and have so little respect and regard for Filipino women that
he openly admitted that when he studied in Bacolod City for several years where he
finished his B.S. Biology before he came to Dagupan City to study medicine, he had
a common-law wife in Bacolod City. In other words, he also lived with another woman
in Bacolod City but did not marry that woman, just like what he did to plaintiff. It is not
surprising, then, that he felt so little compunction or remorse in pretending to love
and promising to marry plaintiff, a young, innocent, trustful country girl, in order to
satisfy his lust on her. 11
and then concluded:

In sum, we are strongly convinced and so hold that it was defendant-appellant's

fraudulent and deceptive protestations of love for and promise to marry plaintiff that
made her surrender her virtue and womanhood to him and to live with him on the
honest and sincere belief that he would keep said promise, and it was likewise these
(sic) fraud and deception on appellant's part that made plaintiff's parents agree to
their daughter's living-in with him preparatory to their supposed marriage. And as
these acts of appellant are palpably and undoubtedly against morals, good customs,
and public policy, and are even gravely and deeply derogatory and insulting to our
women, coming as they do from a foreigner who has been enjoying the hospitality of
our people and taking advantage of the opportunity to study in one of our institutions
of learning, defendant-appellant should indeed be made, under Art. 21 of the Civil
Code of the Philippines, to compensate for the moral damages and injury that he had
caused plaintiff, as the lower court ordered him to do in its decision in this case. 12
Unfazed by his second defeat, petitioner filed the instant petition on 26 March 1991; he raises
therein the single issue of whether or not Article 21 of the Civil Code applies to the case at bar. 13
It is petitioner's thesis that said Article 21 is not applicable because he had not committed any moral
wrong or injury or violated any good custom or public policy; he has not professed love or proposed
marriage to the private respondent; and he has never maltreated her. He criticizes the trial court for
liberally invoking Filipino customs, traditions and culture, and ignoring the fact that since he is a
foreigner, he is not conversant with such Filipino customs, traditions and culture. As an Iranian
Moslem, he is not familiar with Catholic and Christian ways. He stresses that even if he had made a
promise to marry, the subsequent failure to fulfill the same is excusable or tolerable because of his
Moslem upbringing; he then alludes to the Muslim Code which purportedly allows a Muslim to take
four (4) wives and concludes that on the basis thereof, the trial court erred in ruling that he does not
posses good moral character. Moreover, his controversial "common law life" is now his legal wife as
their marriage had been solemnized in civil ceremonies in the Iranian Embassy. As to his unlawful
cohabitation with the private respondent, petitioner claims that even if responsibility could be pinned
on him for the live-in relationship, the private respondent should also be faulted for consenting to an
illicit arrangement. Finally, petitioner asseverates that even if it was to be assumed arguendo that he
had professed his love to the private respondent and had also promised to marry her, such acts
would not be actionable in view of the special circumstances of the case. The mere breach of
promise is not actionable. 14
On 26 August 1991, after the private respondent had filed her Comment to the petition and the
petitioner had filed his Reply thereto, this Court gave due course to the petition and required the
parties to submit their respective Memoranda, which they subsequently complied with.
As may be gleaned from the foregoing summation of the petitioner's arguments in support of his
thesis, it is clear that questions of fact, which boil down to the issue of the credibility of witnesses,
are also raised. It is the rule in this jurisdiction that appellate courts will not disturb the trial court's
findings as to the credibility of witnesses, the latter court having heard the witnesses and having had
the opportunity to observe closely their deportment and manner of testifying, unless the trial court
had plainly overlooked facts of substance or value which, if considered, might affect the result of the
case. 15
Petitioner has miserably failed to convince Us that both the appellate and trial courts had overlooked
any fact of substance or values which could alter the result of the case.

Equally settled is the rule that only questions of law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court. It is not the function of this Court to analyze or
weigh all over again the evidence introduced by the parties before the lower court. There are,
however, recognized exceptions to this rule. Thus, inMedina vs. Asistio, Jr., 16 this Court took the time,
again, to enumerate these exceptions:
xxx xxx xxx
(1) When the conclusion is a finding grounded entirely on speculation, surmises or
conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When the inference made
is manifestly mistaken, absurb or impossible (Luna v. Linatok, 74 Phil. 15 [1942]); (3)
Where there is a grave abuse of discretion (Buyco v. People, 95 Phil. 453 [1955]); (4)
When the judgment is based on a misapprehension of facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are conflicting (Casica v.
Villaseca, L-9590 Ap. 30, 1957; unrep.) (6) When the Court of Appeals, in making its
findings, went beyond the issues of the case and the same is contrary to the
admissions of both appellate and appellee (Evangelista v. Alto Surety and Insurance
Co., 103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are contrary to those of the trial court (Garcia
v. Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA 593
[1986]); (8) When the findings of fact are conclusions without citation of specific
evidence on which they are based (Ibid.,); (9) When the facts set forth in the petition
as well as in the petitioners main and reply briefs are not disputed by the
respondents (Ibid.,); and (10) The finding of fact of the Court of Appeals is premised
on the supposed absence of evidence and is contradicted by the evidence on record
(Salazar v. Gutierrez, 33 SCRA 242 [1970]).
Petitioner has not endeavored to joint out to Us the existence of any of the above quoted exceptions
in this case. Consequently, the factual findings of the trial and appellate courts must be respected.
And now to the legal issue.
The existing rule is that a breach of promise to marry per se is not an actionable wrong. 17 Congress
deliberately eliminated from the draft of the New Civil Code the provisions that would have made it so.
The reason therefor is set forth in the report of the Senate Committees on the Proposed Civil Code, from
which We quote:
The elimination of this chapter is proposed. That breach of promise to marry is not
actionable has been definitely decided in the case of De Jesus vs. Syquia. 18 The
history of breach of promise suits in the United States and in England has shown that no
other action lends itself more readily to abuse by designing women and unscrupulous
men. It is this experience which has led to the abolition of rights of action in the so-called
Heart Balm suits in many of the American states. . . . 19
This notwithstanding, the said Code contains a provision, Article 21, which is designed to expand the
concept of torts or quasi-delict in this jurisdiction by granting adequate legal remedy for the untold
number of moral wrongs which is impossible for human foresight to specifically enumerate and
punish in the statute books. 20

As the Code Commission itself stated in its Report:

But the Code Commission had gone farther than the sphere of wrongs defined or
determined by positive law. Fully sensible that there are countless gaps in the
statutes, which leave so many victims of moral wrongs helpless, even though they
have actually suffered material and moral injury, the Commission has deemed it
necessary, in the interest of justice, to incorporate in the proposed Civil Code the
following rule:
Art. 23. Any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.
An example will illustrate the purview of the foregoing norm: "A" seduces the
nineteen-year old daughter of "X". A promise of marriage either has not been made,
or can not be proved. The girl becomes pregnant. Under the present laws, there is no
crime, as the girl is above nineteen years of age. Neither can any civil action for
breach of promise of marriage be filed. Therefore, though the grievous moral wrong
has been committed, and though the girl and family have suffered incalculable moral
damage, she and her parents cannot bring action for damages. But under the
proposed article, she and her parents would have such a right of action.
Thus at one stroke, the legislator, if the forgoing rule is approved, would vouchsafe
adequate legal remedy for that untold number of moral wrongs which it is impossible
for human foresight to provide for specifically in the statutes. 21
Article 2176 of the Civil Code, which defines a quasi-delict thus:
Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there
is no pre-existing contractual relation between the parties, is called a quasi-delict and
is governed by the provisions of this Chapter.
is limited to negligent acts or omissions and excludes the notion of willfulness or
intent. Quasi-delict, known in Spanish legal treatises as culpa aquiliana, is a civil law concept
while torts is an Anglo-American or common law concept. Torts is much broader than culpa
aquiliana because it includes not only negligence, but international criminal acts as well such
as assault and battery, false imprisonment and deceit. In the general scheme of the
Philippine legal system envisioned by the Commission responsible for drafting the New Civil
Code, intentional and malicious acts, with certain exceptions, are to be governed by the
Revised Penal Code while negligent acts or omissions are to be covered by Article 2176 of
the Civil Code. 22 In between these opposite spectrums are injurious acts which, in the absence
of Article 21, would have been beyond redress. Thus, Article 21 fills that vacuum. It is even
postulated that together with Articles 19 and 20 of the Civil Code, Article 21 has greatly
broadened the scope of the law on civil wrongs; it has become much more supple and adaptable
than the Anglo-American law on torts. 23
In the light of the above laudable purpose of Article 21, We are of the opinion, and so hold, that
where a man's promise to marry is in fact the proximate cause of the acceptance of his love by a

woman and his representation to fulfill that promise thereafter becomes the proximate cause of the
giving of herself unto him in a sexual congress, proof that he had, in reality, no intention of marrying
her and that the promise was only a subtle scheme or deceptive device to entice or inveigle her to
accept him and to obtain her consent to the sexual act, could justify the award of damages pursuant
to Article 21 not because of such promise to marry but because of the fraud and deceit behind it and
the willful injury to her honor and reputation which followed thereafter. It is essential, however, that
such injury should have been committed in a manner contrary to morals, good customs or public
policy.
In the instant case, respondent Court found that it was the petitioner's "fraudulent and deceptive
protestations of love for and promise to marry plaintiff that made her surrender her virtue and
womanhood to him and to live with him on the honest and sincere belief that he would keep said
promise, and it was likewise these fraud and deception on appellant's part that made plaintiff's
parents agree to their daughter's living-in with him preparatory to their supposed marriage." 24 In
short, the private respondent surrendered her virginity, the cherished possession of every single Filipina,
not because of lust but because of moral seduction the kind illustrated by the Code Commission in its
example earlier adverted to. The petitioner could not be held liable for criminal seduction punished under
either Article 337 or Article 338 of the Revised Penal Code because the private respondent was above
eighteen (18) years of age at the time of the seduction.
Prior decisions of this Court clearly suggest that Article 21 may be applied in a breach of promise to
marry where the woman is a victim of moral seduction. Thus, in Hermosisima vs. Court of
Appeals, 25 this Court denied recovery of damages to the woman because:
. . . we find ourselves unable to say that petitioner is morally guilty of seduction, not
only because he is approximately ten (10) years younger than the complainant
who was around thirty-six (36) years of age, and as highly enlightened as a former
high school teacher and a life insurance agent are supposed to be when she
became intimate with petitioner, then a mere apprentice pilot, but, also, because the
court of first instance found that, complainant "surrendered herself" to petitioner
because, "overwhelmed by her love" for him, she "wanted to bind" him by having a
fruit of their engagement even before they had the benefit of clergy.
In Tanjanco vs. Court of Appeals, 26 while this Court likewise hinted at possible recovery if there had
been moral seduction, recovery was eventually denied because We were not convinced that such
seduction existed. The following enlightening disquisition and conclusion were made in the said case:
The Court of Appeals seem to have overlooked that the example set forth in the
Code Commission's memorandum refers to a tort upon a minor who had
been seduced. The essential feature is seduction, that in law is more than mere
sexual intercourse, or a breach of a promise of marriage; it connotes essentially the
idea of deceit, enticement, superior power or abuse of confidence on the part of the
seducer to which the woman has yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S.
vs. Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra) that
To constitute seduction there must in all cases be some sufficient
promise or inducement and the woman must yield because of the

promise or other inducement. If she consents merely from carnal lust

and the intercourse is from mutual desire, there is no seduction (43
Cent. Dig. tit. Seduction, par. 56) She must be induced to depart from
the path of virtue by the use of some species of arts, persuasions and
wiles, which are calculated to have and do have that effect, and
which result in her person to ultimately submitting her person to the
sexual embraces of her seducer (27 Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the woman, the enticement,
persuasion or deception is the essence of the injury; and a mere
proof of intercourse is insufficient to warrant a recovery.
Accordingly it is not seduction where the willingness arises out of
sexual desire of curiosity of the female, and the defendant merely
affords her the needed opportunity for the commission of the act. It
has been emphasized that to allow a recovery in all such cases
would tend to the demoralization of the female sex, and would be a
reward for unchastity by which a class of adventuresses would be
swift to profit. (47 Am. Jur. 662)
xxx xxx xxx
Over and above the partisan allegations, the fact stand out that for one whole year,
from 1958 to 1959, the plaintiff-appellee, a woman of adult age, maintain intimate
sexual relations with appellant, with repeated acts of intercourse. Such conduct is
incompatible with the idea of seduction. Plainly there is here voluntariness and
mutual passion; for had the appellant been deceived, had she surrendered
exclusively because of the deceit, artful persuasions and wiles of the defendant, she
would not have again yielded to his embraces, much less for one year, without
exacting early fulfillment of the alleged promises of marriage, and would have cut
short all sexual relations upon finding that defendant did not intend to fulfill his
defendant did not intend to fulfill his promise. Hence, we conclude that no case is
made under article 21 of the Civil Code, and no other cause of action being alleged,
no error was committed by the Court of First Instance in dismissing the complaint. 27
In his annotations on the Civil Code, 28 Associate Justice Edgardo L. Paras, who recently retired from
this Court, opined that in a breach of promise to marry where there had been carnal knowledge, moral
damages may be recovered:
. . . if there be criminal or moral seduction, but not if the intercourse was due to
mutual lust. (Hermosisima vs. Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733, Sept. 30, 1960; Batarra
vs. Marcos, 7 Phil. 56 (sic); Beatriz Galang vs. Court of Appeals, et al., L-17248, Jan.
29, 1962). (In other words, if the CAUSE be the promise to marry, and the EFFECT
be the carnal knowledge, there is a chance that there was criminal or moral
seduction, hence recovery of moral damages will prosper. If it be the other way

around, there can be no recovery of moral damages, because here mutual lust has
intervened). . . .
together with "ACTUAL damages, should there be any, such as the expenses for the
wedding presentations (See Domalagon v. Bolifer, 33 Phil. 471).
Senator Arturo M. Tolentino 29 is also of the same persuasion:
It is submitted that the rule in Batarra vs. Marcos, 30 still subsists, notwithstanding the
incorporation of the present article 31 in the Code. The example given by the Code
Commission is correct, if there wasseduction, not necessarily in the legal sense, but in
the vulgar sense of deception. But when the sexual act is accomplished without any
deceit or qualifying circumstance of abuse of authority or influence, but the woman,
already of age, has knowingly given herself to a man, it cannot be said that there is an
injury which can be the basis for indemnity.
But so long as there is fraud, which is characterized by willfulness (sic), the action
lies. The court, however, must weigh the degree of fraud, if it is sufficient to deceive
the woman under the circumstances, because an act which would deceive a girl
sixteen years of age may not constitute deceit as to an experienced woman thirty
years of age. But so long as there is a wrongful act and a resulting injury, there
should be civil liability, even if the act is not punishable under the criminal law and
there should have been an acquittal or dismissal of the criminal case for that reason.
We are unable to agree with the petitioner's alternative proposition to the effect that granting, for
argument's sake, that he did promise to marry the private respondent, the latter is nevertheless also
at fault. According to him, both parties are in pari delicto; hence, pursuant to Article 1412(1) of the
Civil Code and the doctrine laid down in Batarra vs. Marcos, 32 the private respondent cannot recover
damages from the petitioner. The latter even goes as far as stating that if the private respondent had
"sustained any injury or damage in their relationship, it is primarily because of her own doing, 33 for:
. . . She is also interested in the petitioner as the latter will become a doctor sooner
or later. Take notice that she is a plain high school graduate and a mere
employee . . . (Annex "C") or a waitress (TSN, p. 51, January 25, 1988) in a
luncheonette and without doubt, is in need of a man who can give her economic
security. Her family is in dire need of financial assistance. (TSN, pp. 51-53, May 18,
1988). And this predicament prompted her to accept a proposition that may have
been offered by the petitioner. 34
These statements reveal the true character and motive of the petitioner. It is clear that he harbors a
condescending, if not sarcastic, regard for the private respondent on account of the latter's ignoble
birth, inferior educational background, poverty and, as perceived by him, dishonorable employment.
Obviously then, from the very beginning, he was not at all moved by good faith and an honest
motive. Marrying with a woman so circumstances could not have even remotely occurred to him.
Thus, his profession of love and promise to marry were empty words directly intended to fool, dupe,
entice, beguile and deceive the poor woman into believing that indeed, he loved her and would want
her to be his life's partner. His was nothing but pure lust which he wanted satisfied by a Filipina who
honestly believed that by accepting his proffer of love and proposal of marriage, she would be able
to enjoy a life of ease and security. Petitioner clearly violated the Filipino's concept of morality and

brazenly defied the traditional respect Filipinos have for their women. It can even be said that the
petitioner committed such deplorable acts in blatant disregard of Article 19 of the Civil Code which
directs every person to act with justice, give everyone his due and observe honesty and good faith in
the exercise of his rights and in the performance of his obligations.
No foreigner must be allowed to make a mockery of our laws, customs and traditions.
The pari delicto rule does not apply in this case for while indeed, the private respondent may not
have been impelled by the purest of intentions, she eventually submitted to the petitioner in sexual
congress not out of lust, but because of moral seduction. In fact, it is apparent that she had qualms
of conscience about the entire episode for as soon as she found out that the petitioner was not going
to marry her after all, she left him. She is not, therefore, in pari delicto with the petitioner. Pari
delicto means "in equal fault; in a similar offense or crime; equal in guilt or in legal fault." 35 At most, it
could be conceded that she is merely in delicto.
Equity often interferes for the relief of the less guilty of the parties, where his
transgression has been brought about by the imposition of undue influence of the
party on whom the burden of the original wrong principally rests, or where his
consent to the transaction was itself procured by
fraud. 36
In Mangayao vs. Lasud, 37 We declared:
Appellants likewise stress that both parties being at fault, there should be no action
by one against the other (Art. 1412, New Civil Code). This rule, however, has been
interpreted as applicable only where the fault on both sides is, more or less,
equivalent. It does not apply where one party is literate or intelligent and the other
one is not. (c.f. Bough vs. Cantiveros, 40 Phil. 209).
We should stress, however, that while We find for the private respondent, let it not be said that this
Court condones the deplorable behavior of her parents in letting her and the petitioner stay together
in the same room in their house after giving approval to their marriage. It is the solemn duty of
parents to protect the honor of their daughters and infuse upon them the higher values of morality
and dignity.
WHEREFORE, finding no reversible error in the challenged decision, the instant petition is hereby
DENIED, with costs against the petitioner.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 83122 October 19, 1990
ARTURO P. VALENZUELA and HOSPITALITA N. VALENZUELA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, BIENVENIDO M. ARAGON, ROBERT E. PARNELL,
CARLOS K. CATOLICO and THE PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY,
INC., respondents.
Albino B. Achas for petitioners.
Angara, Abello, Concepcion, Regala & Cruz for private respondents.

GUTIERREZ, JR., J.:

This is a petition for review of the January 29, 1988 decision of the Court of Appeals and the April 27,
1988 resolution denying the petitioners' motion for reconsideration, which decision and resolution
reversed the decision dated June 23,1986 of the Court of First Instance of Manila, Branch 34 in Civil
Case No. 121126 upholding the petitioners' causes of action and granting all the reliefs prayed for in
their complaint against private respondents.
The antecedent facts of the case are as follows:
Petitioner Arturo P. Valenzuela (Valenzuela for short) is a General Agent of private respondent
Philippine American General Insurance Company, Inc. (Philamgen for short) since 1965. As such, he
was authorized to solicit and sell in behalf of Philamgen all kinds of non-life insurance, and in
consideration of services rendered was entitled to receive the full agent's commission of 32.5% from
Philamgen under the scheduled commission rates (Exhibits "A" and "1"). From 1973 to 1975,
Valenzuela solicited marine insurance from one of his clients, the Delta Motors, Inc. (Division of
Electronics Airconditioning and Refrigeration) in the amount of P4.4 Million from which he was
entitled to a commission of 32% (Exhibit "B"). However, Valenzuela did not receive his full
commission which amounted to P1.6 Million from the P4.4 Million insurance coverage of the Delta
Motors. During the period 1976 to 1978, premium payments amounting to P1,946,886.00 were paid
directly to Philamgen and Valenzuela's commission to which he is entitled amounted to P632,737.00.
In 1977, Philamgen started to become interested in and expressed its intent to share in the
commission due Valenzuela (Exhibits "III" and "III-1") on a fifty-fifty basis (Exhibit "C"). Valenzuela
refused (Exhibit "D").
On February 8, 1978 Philamgen and its President, Bienvenido M. Aragon insisted on the sharing of
the commission with Valenzuela (Exhibit E). This was followed by another sharing proposal dated

June 1, 1978. On June 16,1978, Valenzuela firmly reiterated his objection to the proposals of
respondents stating that: "It is with great reluctance that I have to decline upon request to signify my
conformity to your alternative proposal regarding the payment of the commission due me. However, I
have no choice for to do otherwise would be violative of the Agency Agreement executed between
our goodselves." (Exhibit B-1)
Because of the refusal of Valenzuela, Philamgen and its officers, namely: Bienvenido Aragon, Carlos
Catolico and Robert E. Parnell took drastic action against Valenzuela. They: (a) reversed the
commission due him by not crediting in his account the commission earned from the Delta Motors,
Inc. insurance (Exhibit "J" and "2"); (b) placed agency transactions on a cash and carry basis; (c)
threatened the cancellation of policies issued by his agency (Exhibits "H" to "H-2"); and (d) started to
leak out news that Valenzuela has a substantial account with Philamgen. All of these acts resulted in
the decline of his business as insurance agent (Exhibits "N", "O", "K" and "K-8"). Then on December
27, 1978, Philamgen terminated the General Agency Agreement of Valenzuela (Exhibit "J", pp. 1-3,
Decision Trial Court dated June 23, 1986, Civil Case No. 121126, Annex I, Petition).
The petitioners sought relief by filing the complaint against the private respondents in the court a
quo (Complaint of January 24, 1979, Annex "F" Petition). After due proceedings, the trial court found:
xxx xxx xxx
Defendants tried to justify the termination of plaintiff Arturo P. Valenzuela as one of
defendant PHILAMGEN's General Agent by making it appear that plaintiff Arturo P.
Valenzuela has a substantial account with defendant PHILAMGEN particularly Delta
Motors, Inc.'s Account, thereby prejudicing defendant PHILAMGEN's interest
(Exhibits 6,"11","11- "12- A"and"13-A").
Defendants also invoked the provisions of the Civil Code of the Philippines (Article
1868) and the provisions of the General Agency Agreement as their basis for
terminating plaintiff Arturo P. Valenzuela as one of their General Agents.
That defendants' position could have been justified had the termination of plaintiff
Arturo P. Valenzuela was (sic) based solely on the provisions of the Civil Code and
the conditions of the General Agency Agreement. But the records will show that the
principal cause of the termination of the plaintiff as General Agent of defendant
PHILAMGEN was his refusal to share his Delta commission.
That it should be noted that there were several attempts made by defendant
Bienvenido M. Aragon to share with the Delta commission of plaintiff Arturo P.
Valenzuela. He had persistently pursued the sharing scheme to the point of
terminating plaintiff Arturo P. Valenzuela, and to make matters worse, defendants
made it appear that plaintiff Arturo P. Valenzuela had substantial accounts with
defendant PHILAMGEN.
Not only that, defendants have also started (a) to treat separately the Delta
Commission of plaintiff Arturo P. Valenzuela, (b) to reverse the Delta commission due
plaintiff Arturo P. Valenzuela by not crediting or applying said commission earned to
the account of plaintiff Arturo P. Valenzuela, (c) placed plaintiff Arturo P. Valenzuela's
agency transactions on a "cash and carry basis", (d) sending threats to cancel

existing policies issued by plaintiff Arturo P. Valenzuela's agency, (e) to divert plaintiff
Arturo P. Valenzuela's insurance business to other agencies, and (f) to spread wild
and malicious rumors that plaintiff Arturo P. Valenzuela has substantial account with
defendant PHILAMGEN to force plaintiff Arturo P. Valenzuela into agreeing with the
sharing of his Delta commission." (pp. 9-10, Decision, Annex 1, Petition).
xxx xxx xxx
These acts of harrassment done by defendants on plaintiff Arturo P. Valenzuela to
force him to agree to the sharing of his Delta commission, which culminated in the
termination of plaintiff Arturo P. Valenzuela as one of defendant PHILAMGEN's
General Agent, do not justify said termination of the General Agency Agreement
entered into by defendant PHILAMGEN and plaintiff Arturo P. Valenzuela.
That since defendants are not justified in the termination of plaintiff Arturo P.
Valenzuela as one of their General Agents, defendants shall be liable for the resulting
damage and loss of business of plaintiff Arturo P. Valenzuela. (Arts. 2199/2200, Civil
Code of the Philippines). (Ibid, p. 11)
The court accordingly rendered judgment, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against
defendants ordering the latter to reinstate plaintiff Arturo P. Valenzuela as its General
Agent, and to pay plaintiffs, jointly and severally, the following:
1. The amount of five hundred twenty-one thousand nine hundred sixty four and
16/100 pesos (P521,964.16) representing plaintiff Arturo P. Valenzuela's Delta
Commission with interest at the legal rate from the time of the filing of the complaint,
which amount shall be adjusted in accordance with Article 1250 of the Civil Code of
the Philippines;
2. The amount of seventy-five thousand pesos (P75,000.00) per month as
compensatory damages from 1980 until such time that defendant Philamgen shall
reinstate plaintiff Arturo P. Valenzuela as one of its general agents;
3. The amount of three hundred fifty thousand pesos (P350,000.00) for each plaintiff
as moral damages;
4. The amount of seventy-five thousand pesos (P75,000.00) as and for attorney's
fees;
5. Costs of the suit. (Ibid., P. 12)
From the aforesaid decision of the trial court, Bienvenido Aragon, Robert E. Parnell,
Carlos K. Catolico and PHILAMGEN respondents herein, and defendants-appellants
below, interposed an appeal on the following:
ASSIGNMENT OF ERRORS

I
THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF ARTURO P.
VALENZUELA HAD NO OUTSTANDING ACCOUNT WITH DEFENDANT
PHILAMGEN AT THE TIME OF THE TERMINATION OF THE AGENCY.
II
THE LOWER COURT ERRED IN HOLDING THAT PLAINTIFF ARTURO P.
VALENZUELA IS ENTITLED TO THE FULL COMMISSION OF 32.5% ON THE
DELTA ACCOUNT.
III
THE LOWER COURT ERRED IN HOLDING THAT THE TERMINATION OF
PLAINTIFF ARTURO P. VALENZUELA WAS NOT JUSTIFIED AND THAT
CONSEQUENTLY DEFENDANTS ARE LIABLE FOR ACTUAL AND MORAL
DAMAGES, ATTORNEYS FEES AND COSTS.
IV
ASSUMING ARGUENDO THAT THE AWARD OF DAMAGES AGAINST
DEFENDANT PHILAMGEN WAS PROPER, THE LOWER COURT ERRED IN
AWARDING DAMAGES EVEN AGAINST THE INDIVIDUAL DEFENDANTS WHO
ARE MERE CORPORATE AGENTS ACTING WITHIN THE SCOPE OF THEIR
AUTHORITY.
V
ASSUMING ARGUENDO THAT THE AWARD OF DAMAGES IN FAVOR OF
PLAINTIFF ARTURO P. VALENZUELA WAS PROPER, THE LOWER COURT
ERRED IN AWARDING DAMAGES IN FAVOR OF HOSPITALITA VALENZUELA,
WHO, NOT BEING THE REAL PARTY IN INTEREST IS NOT TO OBTAIN RELIEF.
On January 29, 1988, respondent Court of Appeals promulgated its decision in the appealed case.
The dispositive portion of the decision reads:
WHEREFORE, the decision appealed from is hereby modified accordingly and
judgment is hereby rendered ordering:
1. Plaintiff-appellee Valenzuela to pay defendant-appellant Philamgen the sum of one
million nine hundred thirty two thousand five hundred thirty-two pesos and seventeen
centavos (P1,902,532.17), with legal interest thereon from the date of finality of this
judgment until fully paid.
2. Both plaintiff-appellees to pay jointly and severally defendants-appellants the sum
of fifty thousand pesos (P50,000.00) as and by way of attorney's fees.

No pronouncement is made as to costs. (p. 44, Rollo)

There is in this instance irreconcilable divergence in the findings and conclusions of the Court of
Appeals, vis-a-visthose of the trial court particularly on the pivotal issue whether or not Philamgen
and/or its officers can be held liable for damages due to the termination of the General Agency
Agreement it entered into with the petitioners. In its questioned decision the Court of Appeals
observed that:
In any event the principal's power to revoke an agency at will is so pervasive, that the
Supreme Court has consistently held that termination may be effected even if the
principal acts in bad faith, subject only to the principal's liability for damages (Danon
v. Antonio A. Brimo & Co., 42 Phil. 133; Reyes v. Mosqueda, 53 O.G. 2158 and
Infante V. Cunanan, 93 Phil. 691, cited in Paras, Vol. V, Civil Code of the Philippines
Annotated [1986] 696).
The lower court, however, thought the termination of Valenzuela as General Agent
improper because the record will show the principal cause of the termination of the
plaintiff as General Agent of defendant Philamgen was his refusal to share his Delta
commission. (Decision, p. 9; p. 13, Rollo, 41)
Because of the conflicting conclusions, this Court deemed it necessary in the interest of substantial
justice to scrutinize the evidence and records of the cases. While it is an established principle that
the factual findings of the Court of Appeals are final and may not be reviewed on appeal to this
Court, there are however certain exceptions to the rule which this Court has recognized and
accepted, among which, are when the judgment is based on a misapprehension of facts and when
the findings of the appellate court, are contrary to those of the trial court (Manlapaz v. Court of
Appeals, 147 SCRA 236 [1987]); Guita v. Court of Appeals, 139 SCRA 576 [1986]). Where the
findings of the Court of Appeals and the trial court are contrary to each other, this Court may
scrutinize the evidence on record (Cruz v. Court of Appeals, 129 SCRA 222 [1984]; Mendoza v.
Court of Appeals, 156 SCRA 597 [1987]; Maclan v. Santos, 156 SCRA 542 [1987]). When the
conclusion of the Court of Appeals is grounded entirely on speculation, surmises or conjectures, or
when the inference made is manifestly mistaken, absurd or impossible, or when there is grave abuse
of discretion, or when the judgment is based on a misapprehension of facts, and when the findings
of facts are conflict the exception also applies (Malaysian Airline System Bernad v. Court of Appeals,
156 SCRA 321 [1987]).
After a painstaking review of the entire records of the case and the findings of facts of both the
court a quo and respondent appellate court, we are constrained to affirm the trial court's findings and
rule for the petitioners.
We agree with the court a quo that the principal cause of the termination of Valenzuela as General
Agent of Philamgen arose from his refusal to share his Delta commission. The records sustain the
conclusions of the trial court on the apparent bad faith of the private respondents in terminating the
General Agency Agreement of petitioners. It is axiomatic that the findings of fact of a trial judge are
entitled to great weight (People v. Atanacio, 128 SCRA 22 [1984]) and should not be disturbed on
appeal unless for strong and cogent reasons, because the trial court is in a better position to
examine the evidence as well as to observe the demeanor of the witnesses while testifying (Chase v.
Buencamino, Sr., 136 SCRA 365 [1985]; People v. Pimentel, 147 SCRA 25 [1987]; and Baliwag
Trans., Inc. v. Court of Appeals, 147 SCRA 82 [1987]). In the case at bar, the records show that the

findings and conclusions of the trial court are supported by substantial evidence and there appears
to be no cogent reason to disturb them (Mendoza v. Court of Appeals. 156 SCRA 597 [1987]).
As early as September 30,1977, Philamgen told the petitioners of its desire to share the Delta
Commission with them. It stated that should Delta back out from the agreement, the petitioners
would be charged interests through a reduced commission after full payment by Delta.
On January 23, 1978 Philamgen proposed reducing the petitioners' commissions by 50% thus giving
them an agent's commission of 16.25%. On February 8, 1978, Philamgen insisted on the reduction
scheme followed on June 1, 1978 by still another insistence on reducing commissions and proposing
two alternative schemes for reduction. There were other pressures. Demands to settle accounts, to
confer and thresh out differences regarding the petitioners' income and the threat to terminate the
agency followed. The petitioners were told that the Delta commissions would not be credited to their
account (Exhibit "J"). They were informed that the Valenzuela agency would be placed on a cash
and carry basis thus removing the 60-day credit for premiums due. (TSN., March 26, 1979, pp. 5457). Existing policies were threatened to be cancelled (Exhibits "H" and "14"; TSN., March 26, 1979,
pp. 29-30). The Valenzuela business was threatened with diversion to other agencies. (Exhibit
"NNN"). Rumors were also spread about alleged accounts of the Valenzuela agency (TSN., January
25, 1980, p. 41). The petitioners consistently opposed the pressures to hand over the agency or half
of their commissions and for a treatment of the Delta account distinct from other accounts. The
pressures and demands, however, continued until the agency agreement itself was finally
terminated.
It is also evident from the records that the agency involving petitioner and private respondent is one
"coupled with an interest," and, therefore, should not be freely revocable at the unilateral will of the
latter.
In the insurance business in the Philippines, the most difficult and frustrating period is the solicitation
and persuasion of the prospective clients to buy insurance policies. Normally, agents would
encounter much embarrassment, difficulties, and oftentimes frustrations in the solicitation and
procurement of the insurance policies. To sell policies, an agent exerts great effort, patience,
perseverance, ingenuity, tact, imagination, time and money. In the case of Valenzuela, he was able
to build up an Agency from scratch in 1965 to a highly productive enterprise with gross billings of
about Two Million Five Hundred Thousand Pesos (P2,500,000.00) premiums per annum. The
records sustain the finding that the private respondent started to covet a share of the insurance
business that Valenzuela had built up, developed and nurtured to profitability through over thirteen
(13) years of patient work and perseverance. When Valenzuela refused to share his commission in
the Delta account, the boom suddenly fell on him.
The private respondents by the simple expedient of terminating the General Agency Agreement
appropriated the entire insurance business of Valenzuela. With the termination of the General
Agency Agreement, Valenzuela would no longer be entitled to commission on the renewal of
insurance policies of clients sourced from his agency. Worse, despite the termination of the agency,
Philamgen continued to hold Valenzuela jointly and severally liable with the insured for unpaid
premiums. Under these circumstances, it is clear that Valenzuela had an interest in the continuation
of the agency when it was unceremoniously terminated not only because of the commissions he
should continue to receive from the insurance business he has solicited and procured but also for
the fact that by the very acts of the respondents, he was made liable to Philamgen in the event the
insured fail to pay the premiums due. They are estopped by their own positive averments and claims

for damages. Therefore, the respondents cannot state that the agency relationship between
Valenzuela and Philamgen is not coupled with interest. "There may be cases in which an agent has
been induced to assume a responsibility or incur a liability, in reliance upon the continuance of the
authority under such circumstances that, if the authority be withdrawn, the agent will be exposed to
personal loss or liability" (See MEC 569 p. 406).
Furthermore, there is an exception to the principle that an agency is revocable at will and that is
when the agency has been given not only for the interest of the principal but for the interest of third
persons or for the mutual interest of the principal and the agent. In these cases, it is evident that the
agency ceases to be freely revocable by the sole will of the principal (See Padilla, Civil Code
Annotated, 56 ed., Vol. IV p. 350). The following citations are apropos:
The principal may not defeat the agent's right to indemnification by a termination of
the contract of agency (Erskine v. Chevrolet Motors Co. 185 NC 479, 117 SE 706, 32
ALR 196).
Where the principal terminates or repudiates the agent's employment in violation of
the contract of employment and without cause ... the agent is entitled to receive
either the amount of net losses caused and gains prevented by the breach, or the
reasonable value of the services rendered. Thus, the agent is entitled to prospective
profits which he would have made except for such wrongful termination provided that
such profits are not conjectural, or speculative but are capable of determination upon
some fairly reliable basis. And a principal's revocation of the agency agreement
made to avoid payment of compensation for a result which he has actually
accomplished (Hildendorf v. Hague, 293 NW 2d 272; Newhall v. Journal Printing Co.,
105 Minn 44,117 NW 228; Gaylen Machinery Corp. v. Pitman-Moore Co. [C.A. 2 NY]
273 F 2d 340)
If a principal violates a contractual or quasi-contractual duty which he owes his
agent, the agent may as a rule bring an appropriate action for the breach of that duty.
The agent may in a proper case maintain an action at law for compensation or
damages ... A wrongfully discharged agent has a right of action for damages and in
such action the measure and element of damages are controlled generally by the
rules governing any other action for the employer's breach of an employment
contract. (Riggs v. Lindsay, 11 US 500, 3L Ed 419; Tiffin Glass Co. v. Stoehr, 54 Ohio
157, 43 NE 2798)
At any rate, the question of whether or not the agency agreement is coupled with interest is helpful
to the petitioners' cause but is not the primary and compelling reason. For the pivotal factor
rendering Philamgen and the other private respondents liable in damages is that the termination by
them of the General Agency Agreement was tainted with bad faith. Hence, if a principal acts in bad
faith and with abuse of right in terminating the agency, then he is liable in damages. This is in
accordance with the precepts in Human Relations enshrined in our Civil Code that "every person
must in the exercise of his rights and in the performance of his duties act with justice, give every one
his due, and observe honesty and good faith: (Art. 19, Civil Code), and every person who, contrary
to law, wilfully or negligently causes damages to another, shall indemnify the latter for the same (Art.
20, id). "Any person who wilfully causes loss or injury to another in a manner contrary to morals,
good customs and public policy shall compensate the latter for the damages" (Art. 21, id.).

As to the issue of whether or not the petitioners are liable to Philamgen for the unpaid and
uncollected premiums which the respondent court ordered Valenzuela to pay Philamgen the amount
of One Million Nine Hundred Thirty-Two Thousand Five Hundred Thirty-Two and 17/100 Pesos
(P1,932,532,17) with legal interest thereon until fully paid (Decision-January 20, 1988, p. 16;
Petition, Annex "A"), we rule that the respondent court erred in holding Valenzuela liable. We find no
factual and legal basis for the award. Under Section 77 of the Insurance Code, the remedy for the
non-payment of premiums is to put an end to and render the insurance policy not binding
Sec. 77 ... [N]otwithstanding any agreement to the contrary, no policy or contract of
insurance is valid and binding unless and until the premiums thereof have been paid
except in the case of a life or industrial life policy whenever the grace period
provision applies (P.D. 612, as amended otherwise known as the Insurance Code of
1974)
In Philippine Phoenix Surety and Insurance, Inc. v. Woodworks, Inc. (92 SCRA 419 [1979]) we held
that the non-payment of premium does not merely suspend but puts an end to an insurance contract
since the time of the payment is peculiarly of the essence of the contract. And in Arce v. The Capital
Insurance and Surety Co. Inc.(117 SCRA 63, [1982]), we reiterated the rule that unless premium is
paid, an insurance contract does not take effect. Thus:
It is to be noted that Delgado (Capital Insurance & Surety Co., Inc. v. Delgado, 9
SCRA 177 [1963] was decided in the light of the Insurance Act before Sec. 72 was
amended by the underscored portion. Supra. Prior to the Amendment, an insurance
contract was effective even if the premium had not been paid so that an insurer was
obligated to pay indemnity in case of loss and correlatively he had also the right to
sue for payment of the premium. But the amendment to Sec. 72 has radically
changed the legal regime in that unless the premium is paid there is no insurance. "
(Arce v. Capitol Insurance and Surety Co., Inc., 117 SCRA 66; Emphasis supplied)
In Philippine Phoenix Surety case, we held:
Moreover, an insurer cannot treat a contract as valid for the purpose of collecting
premiums and invalid for the purpose of indemnity. (Citing Insurance Law and
Practice by John Alan Appleman, Vol. 15, p. 331; Emphasis supplied)
The foregoing findings are buttressed by Section 776 of the insurance Code
(Presidential Decree No. 612, promulgated on December 18, 1974), which now
provides that no contract of Insurance by an insurance company is valid and binding
unless and until the premium thereof has been paid, notwithstanding any agreement
to the contrary (Ibid., 92 SCRA 425)
Perforce, since admittedly the premiums have not been paid, the policies issued have lapsed. The
insurance coverage did not go into effect or did not continue and the obligation of Philamgen as
insurer ceased. Hence, for Philamgen which had no more liability under the lapsed and inexistent
policies to demand, much less sue Valenzuela for the unpaid premiums would be the height of
injustice and unfair dealing. In this instance, with the lapsing of the policies through the nonpayment
of premiums by the insured there were no more insurance contracts to speak of. As this Court held
in the Philippine Phoenix Surety case, supra "the non-payment of premiums does not merely

suspend but puts an end to an insurance contract since the time of the payment is peculiarly of the
essence of the contract."
The respondent appellate court also seriously erred in according undue reliance to the report of
Banaria and Banaria and Company, auditors, that as of December 31, 1978, Valenzuela owed
Philamgen P1,528,698.40. This audit report of Banaria was commissioned by Philamgen after
Valenzuela was almost through with the presentation of his evidence. In essence, the Banaria report
started with an unconfirmed and unaudited beginning balance of account of P1,758,185.43 as of
August 20, 1976. But even with that unaudited and unconfirmed beginning balance of
P1,758,185.43, Banaria still came up with the amount of P3,865.49 as Valenzuela's balance as of
December 1978 with Philamgen (Exh. "38-A-3"). In fact, as of December 31, 1976, and December
31, 1977, Valenzuela had no unpaid account with Philamgen (Ref: Annexes "D", "D-1", "E",
Petitioner's Memorandum). But even disregarding these annexes which are records of Philamgen
and addressed to Valenzuela in due course of business, the facts show that as of July 1977, the
beginning balance of Valenzuela's account with Philamgen amounted to P744,159.80. This was
confirmed by Philamgen itself not only once but four (4) times on different occasions, as shown by
the records.
On April 3,1978, Philamgen sent Valenzuela a statement of account with a beginning balance of
P744,159-80 as of July 1977.
On May 23, 1978, another statement of account with exactly the same beginning balance was sent
to Valenzuela.
On November 17, 1978, Philamgen sent still another statement of account with P744,159.80 as the
beginning balance.
And on December 20, 1978, a statement of account with exactly the same figure was sent to
Valenzuela.
It was only after the filing of the complaint that a radically different statement of accounts surfaced in
court. Certainly, Philamgen's own statements made by its own accountants over a long period of
time and covering examinations made on four different occasions must prevail over unconfirmed and
unaudited statements made to support a position made in the course of defending against a lawsuit.
It is not correct to say that Valenzuela should have presented its own records to refute the
unconfirmed and unaudited finding of the Banaria auditor. The records of Philamgen itself are the
best refutation against figures made as an afterthought in the course of litigation. Moreover,
Valenzuela asked for a meeting where the figures would be reconciled. Philamgen refused to meet
with him and, instead, terminated the agency agreement.
After off-setting the amount of P744,159.80, beginning balance as of July 1977, by way of credits
representing the commission due from Delta and other accounts, Valenzuela had overpaid
Philamgen the amount of P530,040.37 as of November 30, 1978. Philamgen cannot later be heard
to complain that it committed a mistake in its computation. The alleged error may be given credence
if committed only once. But as earlier stated, the reconciliation of accounts was arrived at four (4)
times on different occasions where Philamgen was duly represented by its account executives. On
the basis of these admissions and representations, Philamgen cannot later on assume a different
posture and claim that it was mistaken in its representation with respect to the correct beginning

balance as of July 1977 amounting to P744,159.80. The Banaria audit report commissioned by
Philamgen is unreliable since its results are admittedly based on an unconfirmed and unaudited
beginning balance of P1,758,185.43 as of August 20,1976.
As so aptly stated by the trial court in its decision:
Defendants also conducted an audit of accounts of plaintiff Arturo P. Valenzuela after
the controversy has started. In fact, after hearing plaintiffs have already rested their
case.
The results of said audit were presented in Court to show plaintiff Arturo P.
Valenzuela's accountability to defendant PHILAMGEN. However, the auditor, when
presented as witness in this case testified that the beginning balance of their audit
report was based on an unaudited amount of P1,758,185.43 (Exhibit 46-A) as of
August 20, 1976, which was unverified and merely supplied by the officers of
defendant PHILAMGEN.
Even defendants very own Exhibit 38- A-3, showed that plaintiff Arturo P.
Valenzuela's balance as of 1978 amounted to only P3,865.59, not P826,128.46 as
stated in defendant Bienvenido M. Aragon's letter dated December 20,1978 (Exhibit
14) or P1,528,698.40 as reflected in defendant's Exhibit 46 (Audit Report of Banaria
dated December 24, 1980).
These glaring discrepancy (sic) in the accountability of plaintiff Arturo P. Valenzuela
to defendant PHILAMGEN only lends credence to the claim of plaintiff Arturo P.
Valenzuela that he has no outstanding account with defendant PHILAMGEN when
the latter, thru defendant Bienvenido M. Aragon, terminated the General Agency
Agreement entered into by plaintiff (Exhibit A) effective January 31, 1979 (see
Exhibits "2" and "2-A"). Plaintiff Arturo P. Valenzuela has shown that as of October
31, 1978, he has overpaid defendant PHILAMGEN in the amount of P53,040.37
(Exhibit "EEE", which computation was based on defendant PHILAMGEN's balance
of P744,159.80 furnished on several occasions to plaintiff Arturo P. Valenzuela by
defendant PHILAMGEN (Exhibits H-1, VV, VV-1, WW, WW-1 , YY , YY-2 , ZZ and ,
ZZ-2).
Prescinding from the foregoing, and considering that the private respondents terminated Valenzuela
with evidentmala fide it necessarily follows that the former are liable in damages. Respondent
Philamgen has been appropriating for itself all these years the gross billings and income that it
unceremoniously took away from the petitioners. The preponderance of the authorities sustain the
preposition that a principal can be held liable for damages in cases of unjust termination of agency.
In Danon v. Brimo, 42 Phil. 133 [1921]), this Court ruled that where no time for the continuance of the
contract is fixed by its terms, either party is at liberty to terminate it at will, subject only to the
ordinary requirements of good faith. The right of the principal to terminate his authority is absolute
and unrestricted, except only that he may not do so in bad faith.
The trial court in its decision awarded to Valenzuela the amount of Seventy Five Thousand Pesos
(P75,000,00) per month as compensatory damages from June 1980 until its decision becomes final
and executory. This award is justified in the light of the evidence extant on record (Exhibits "N", "N10", "0", "0-1", "P" and "P-1") showing that the average gross premium collection monthly of

Valenzuela over a period of four (4) months from December 1978 to February 1979, amounted to
over P300,000.00 from which he is entitled to a commission of P100,000.00 more or less per month.
Moreover, his annual sales production amounted to P2,500,000.00 from where he was given 32.5%
commissions. Under Article 2200 of the new Civil Code, "indemnification for damages shall
comprehend not only the value of the loss suffered, but also that of the profits which the obligee
failed to obtain."
The circumstances of the case, however, require that the contractual relationship between the
parties shall be terminated upon the satisfaction of the judgment. No more claims arising from or as
a result of the agency shall be entertained by the courts after that date.
ACCORDINGLY, the petition is GRANTED. The impugned decision of January 29, 1988 and
resolution of April 27, 1988 of respondent court are hereby SET ASIDE. The decision of the trial
court dated January 23, 1986 in Civil Case No. 121126 is REINSTATED with the MODIFICATIONS
that the amount of FIVE HUNDRED TWENTY ONE THOUSAND NINE HUNDRED SIXTY-FOUR
AND 16/100 PESOS (P521,964.16) representing the petitioners Delta commission shall earn only
legal interests without any adjustments under Article 1250 of the Civil Code and that the contractual
relationship between Arturo P. Valenzuela and Philippine American General Insurance Company
shall be deemed terminated upon the satisfaction of the judgment as modified.
SO ORDERED.

INDEPENDENT CIVIL ACTION

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-45404 August 7, 1987
G. JESUS B. RUIZ, petitioner,
vs.
ENCARNACION UCOL and THE COURT OF APPEALS, respondents.

GUTIERREZ, JR., J:
This is an appeal from the order of the Court of First Instance of Ilocos Norte dismissing the plaintiffappellant's complaint for damages against defendant-appellee on the ground of res judicata. The
issue involved being a pure question of law, the appellate court certified the appeal to us for decision
on the merits.
The facts are not disputed, Agustina Tagaca, laundrywoman for plaintiff-appellant Atty. Jesus B. Ruiz
filed an administrative charge against defendant-appellee Encarnacion Ucol, a midwife in the health
center of Sarratt Ilocos Norte. In her answer to the charges, Ucol alleged that Tagaca was merely
used as a tool by Atty. Ruiz who wanted to get back at the Ucol's because of a case filed by
Encarnacion Ucol's husband against Ruiz. She was also alleged to have made remarks that Atty.
Ruiz instigated the complaint and fabricated the charges.
The administrative case was dismissed. Ruiz decided to file his own criminal complaint for libel
against Ucol based on the alleged libelous portion of Ucol's answer.
Upon arraignment, Ucol entered a plea of not guilty. During the proceedings in the libel case,
complainant Atty. Ruiz entered his appearance and participated as private prosecutor. After trial, the
lower court rendered judgment acquitting Ucol on the ground that her guilt was not established
beyond reasonable doubt. No pronouncement was made by the trial court as to the civil liability of
the accused.
Instead of appealing the civil aspects of the case, Ruiz filed a separate complaint for damages
based on the same facts upon which the libel case was founded.
Ucol filed a motion to dismiss stating that the action had prescribed and that the cause of action was
barred by the decision in the criminal case for libel.

The trial court granted the motion to dismiss on the ground of res judicata. As earlier stated, on
appeal, the Court of Appeals certified the case to us, the only issue being whether or not the civil
action for damages was already barred by the criminal case of libel.
Before going into the merit of this appeal, it is noteworthy to mention that there are actually two
cases now before us involving the contending parties. Defendant-appellee Ucol filed an "appeal by
certiorari" before this Court questioning the dissenting opinion of the Court of Appeals.
Ucol prays for a ruling "that the respondent Court of Appeals committed a grave abuse of discretion
in not dismissing the present case but instead in ordering the same remanded to the lower court for
further proceedings ... ."
Any ordinary student in law school should readily know that what comprises a decision which can be
the subject of an appeal or a special civil action is the majority opinion of the members of the court,
but never the dissenting opinion. Moreover, no decision on appeal has as yet been rendered in this
case. The act of the defendant-appellee's counsel in filing such a petition defies logic or reason. It is
totally inexplicable how a member of the bar could be so careless or, if the act was deliberate, could
have the courage to come before this Court asking us to review a dissenting opinion. Counsel is
warned that we do not find his mistake in the slightest bit amusing.
Turning now to the present appeal, plaintiff-appellant Ruiz contends that there can be no res judicata
since nowhere in its decision did the trial court pass upon the civil aspect of the criminal case nor did
it make any express declaration that the fact on which said case was predicated did not exist. He
cites the pertinent provisions of Article 29 of the Civil Code and Rule III, Section 3 subsection (c) of
the Rules of Court which respectively provide:
ART. 29. When the accused in a criminal prosecution is acquitted on the ground that
his guilt has not been proved beyond reasonable doubt, a civil action for damages for
the same act or omission may be instituted. ...
xxx xxx xxx
RULE III, Sec. 3(c)
Extinction of the penal action does not carry with it extinction of the civil, unless the
extinction proceeds from a declaration in a final judgment that the fact from which the
civil might arise did not exist. ...
We may also mention Article 33 of the Civil Code which gives an offended party in cases of
defamation, among others, the right to file a civil action separate and distinct from the criminal
proceedings whether or not a reservation was made to that effect.
The plaintiff-appellant's contentions have no merit. The right of the plaintiff-appellant under the above
provisions to file the civil action for damages based on the same facts upon which he instituted the
libel case is not without limitation.
We find the appeal of G. Jesus B. Ruiz without merit. We see no advantage or benefit in adding to
the clogged dockets of our trial courts what plainly appears from the records to be a harassment suit.

In acquitting Encarnacion Ucol of the libel charge, the trial court made these factual findings:
Clearly then, Atty. Ruiz filed the instant Criminal Case against Encarnacion Ucol as
retaliation for what he believed was an act of ingratitude to him on the part of her
husband. The precipitate haste with which the administrative complaint was filed
shows that he was the one personally interested in the matter. All that Agustina
Tagaca told him was double hearsay. The incident, if there was, happened between
the accused and Ceferino in the absence of Agustina; so that, all that Ceferina
allegedly told her, and she in turn told Atty. Ruiz, was undoubtedly double check
hearsay; and Atty. Ruiz should therefore check the facts with Ceferino, but he did not
do that, and he did not even present Ceferino as a witness. For these reasons,
accused has every reason to believe that Atty. Ruiz was the author who concocted
the charges in the administrative complaint and had his laundry-woman, complainant
Agustina Tagaca, sign it. Agustina has very little education and could hardly speak
English, yet the administrative complaint was written in polished English, and who
else but Atty. Ruiz could have authored those phrases in the complaint: "The
retention of Mrs. Ucol in this government service is inimical to the good intentions of
the Department to serve humanity and a disgrace and liability to present
administration." As will be shown later on, it appears that it is this complaint signed
by Agustina, but authored by Atty. Ruiz, that is libelous and not the respondent's
answer; and even, assuming that the administrative complaint may not have been
impelled by actual malice, the charge(s) were certainly reckless in the face of proven
facts and circumstances. Court actions are not established for parties to give bent to
their prejudice. The poor and the humble are, as a general rule, grateful to a fault,
that intrigues and ingratitude are what they abhor. (Amended Record on Appeal, pp.
8-10).
The findings in the criminal case, therefore, show a pattern of harassment. First, petitioner Ruiz had
something to do with the administrative complaint. The complaint was dismissed. Second, he filed a
criminal case for libel based on portions of Mrs. Ucol's answer in the administrative case. Third, he
acted as private prosecutor in the criminal case actively handling as a lawyer the very case where he
was the complainant. And fourth, after the accused was acquitted on the basis of the facts stated
above, Atty. Ruiz pursued his anger at the Ucols with implacability by filing a civil action for damages.
As stated by the trial judge, "court actions are not established for parties to give bent to their
prejudice." This is doubly true when the party incessantly filing cases is a member of the bar. He
should set an example in sobriety and in trying to prevent false and groundless suits.
In Roa v. de la Cruz, et al. (107, Phil. 10) this Court ruled:
Under the above provisions (Art. 33 of the Civil Code), independently of a criminal
action for defamation, a civil suit for the recovery of damages arising therefrom may
be brought by the injured party. It is apparent, however, from the use of the words
"may be," that the institution of such suit is optional." (An Outline of Philippine Civil
Law by J.B.L. Reyes and R.C. Puno, Vol. I, p. 54) In other words, the civil liability
arising from the crime charged may still be determined in the criminal proceedings if
the offended party does not waive to have it adjudged, or does not reserve his right
to institute a separate civil action against the defendant. (The case of Reyes v. de la
Rosa (52 Off. Gaz., [15] 6548; 99 Phil., 1013) cited by plaintiff in support of her
contention that under Art. 33 of the New Civil Code the injured party is not required to

reserve her right to institute the civil action, is not applicable to the present case.
There was no showing in that case that the offended party intervened in the
prosecution of the offense, and the amount of damages sought to be recovered was
beyond the jurisdiction of the criminal court so that a reservation of the civil action
was useless or unnecessary.) (Dionisio v. Alvendia, 102 Phil., 443; 55 Off. Gaz.,
[25]4633.])
In the instant case, it is not disputed that plaintiff Maria C. Roa upon whose
initiative the criminal action for defamation against the defendant Segunda de la Cruz
was filed did not reserve her right to institute it, subject, always to the direction
and control of the prosecuting fiscal. (Section 15 in connection with section 4 of Rule
106, Rules of Court; Lim Tek Goan v. Yatco, 94 Phil., 197). The reason of the law in
not permitting the offended party to intervene in the prosecution of the offense if he
had waived or reserved his right to institute the civil action is that by such action her
interest in the criminal case has disappeared. Its prosecution becomes the sole
function of the public prosecutor. (Gorospe, et al., v. Gatmaitan, et al., 98 Phil., 600;
52 Off. Gaz., [15] 2526). The rule, therefore, is that the right of intervention reserved
to the injured party is for the sole purpose of enforcing the civil liability born of the
criminal act and not of demanding punishment of the accused. (People v. Orais, 65
Phil., 744; People v. Velez, 77 Phil., 1026; People v. Flores, et al., G.R. No. L-7528,
December 18,1957; see also U.S. v. Malabon, 1 Phil., 731; U.S. v. Heery, 25 Phil.,
600).
Plaintiff having elected to claim damages arising from the offense charged in the
criminal case through her appearance or intervention as private prosecutor we hold
that the final judgment rendered therein constitutes a bar to the present civil action
for damages based upon the same cause. (See Tan v. Standard Vacuum Oil Co., et
al., 91 Phil., 672; 48 Off. Gaz., [7] 2745.).
We are, therefore, constrained to dismiss the present appeal. Atty. Ruiz has more than had his day
in court. The then court of first instance acquitted Mrs. Ucol and stated in the dispositive portion of its
decision that her guilt was not established beyond reasonable doubt. A review of the court's findings,
however, indicates that the disputed Answer of Mrs. Ucol in the administrative case contains no libel.
As stated by the trial court, "As will be shown later, it appears that it is this complaint signed by
Agustina, but authored by Atty. Ruiz, that is libelous and not the respondent's answer." (Emphasis
supplied). The court found the charges against Ucol, if not malicious, at least reckless in the face of
proven facts and circumstances.
The trial court stated.
Analyzing defendant's answer Exh. "5", even with meticulous care, the Court did not
find any defamatory imputation which causes dishonor or discredit to the
complainant. She was the victim of an unprovoked, unjustified and libelous attack
against her honor, honesty, character and reputation; she has a right to self-defense,
which she did in her answer, to protect her honesty and integrity and the very job
upon which her family depend for their livelihood. Every sentence in her answer
(Exh. "5") is relevant, and constitutes privileged matter. She did not go further than
her interest or duties require. She did not go beyond explaining what was said of her
in the complaint for the purpose of repairing if not entirely removing the effects of the

charge against her. She had absolutely no motive to libel Atty. Ruiz who, by the way,
cast the first stone. ... (Amended Record on Appeal pp. 10-11)
WHEREFORE, the appeal filed by appellant Jesus B. Ruiz is DISMISSED for lack of merit. The
petition filed by petitioner Encarnacion Ucol is likewise DISMISSED for patent lack of merit.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-39999 May 31, 1984
ROY PADILLA, FILOMENO GALDONES, ISMAEL GONZALGO and JOSE FARLEY
BEDENIA, petitioners,
vs.
COURT OF APPEALS, respondent.
Sisenando Villaluz, Sr. for petitioners.
The Solicitor General for respondent.

GUTIERREZ, JR., J.:

This is a petition for review on certiorari of a Court of Appeals' decision which reversed the trial
court's judgment of conviction and acquitted the petitioners of the crime of grave coercion on the
ground of reasonable doubt but inspite of the acquittal ordered them to pay jointly and severally the
amount of P9,000.00 to the complainants as actual damages.
The petitioners were charged under the following information:
The undersigned Fiscal accused ROY PADILLA, FILOMENO GALDONES, PEPITO
BEDENIA, YOLLY RICO, DAVID BERMUNDO, VILLANOAC, ROBERTO ROSALES,
VILLANIA, ROMEO GARRIDO, JOSE ORTEGA, JR., RICARDO CELESTINO,
REALINGO alias "KAMLON", JOHN DOE alias TATO, and FOURTEEN (14)
RICARDO DOES of the crime of GRAVE COERCION, committed as follows:
That on or about February 8, 1964 at around 9:00 o'clock in the morning, in the
municipality of Jose Panganiban, province of Camarines Norte, Philippines, and
within the jurisdiction of this Honorable Court, the above- named accused, Roy
Padilla, Filomeno Galdones, Pepito Bedenia, Yolly Rico, David Bermundo, Villanoac,
Roberto Rosales, Villania, Romeo Garrido, Jose Ortega, Jr., Ricardo Celestino,
Realingo alias Kamlon, John Doe alias Tato, and Fourteen Richard Does, by
confederating and mutually helping one another, and acting without any authority of
law, did then and there wilfully, unlawfully, and feloniously, by means of threats, force
and violence prevent Antonio Vergara and his family to close their stall located at the
Public Market, Building No. 3, Jose Panganiban, Camarines Norte, and by
subsequently forcibly opening the door of said stall and thereafter brutally
demolishing and destroying said stall and the furnitures therein by axes and other
massive instruments, and carrying away the goods, wares and merchandise, to the
damage and prejudice of the said Antonio Vergara and his family in the amount of

P30,000.00 in concept of actual or compensatory and moral damages, and further

the sum of P20,000.00 as exemplary damages.
That in committing the offense, the accused took advantage of their public positions:
Roy Padilla, being the incumbent municipal mayor, and the rest of the accused being
policemen, except Ricardo Celestino who is a civilian, all of Jose Panganiban,
Camarines Norte, and that it was committed with evident premeditation.
The Court of First Instance of Camarines Norte, Tenth Judicial District rendered a decision, the
dispositive portion of which states that:
IN VIEW OF THE FOREGOING, the Court finds the accused Roy Padilla, Filomeno Galdonez,
Ismael Gonzalgo and Jose Parley Bedenia guilty beyond reasonable doubt of the crime of grave
coercion, and hereby imposes upon them to suffer an imprisonment of FIVE (5) months and One (1)
day; to pay a fine of P500.00 each; to pay actual and compensatory damages in the amount of
P10,000.00; moral damages in the amount of P30,000.00; and another P10,000.00 for exemplary
damages, jointly and severally, and all the accessory penalties provided for by law; and to pay the
proportionate costs of this proceedings.
The accused Federico Realingo alias 'Kamlon', David Bermundo, Christopher
Villanoac, Godofredo Villania, Romeo Garrido, Roberto Rosales, Ricardo Celestino
and Jose Ortega, are hereby ordered acquitted on grounds of reasonable doubt for
their criminal participation in the crime charged.
The petitioners appealed the judgment of conviction to the Court of Appeals. They contended that
the trial court's finding of grave coercion was not supported by the evidence. According to the
petitioners, the town mayor had the power to order the clearance of market premises and the
removal of the complainants' stall because the municipality had enacted municipal ordinances
pursuant to which the market stall was a nuisance per se. The petitioners stated that the lower court
erred in finding that the demolition of the complainants' stall was a violation of the very directive of
the petitioner Mayor which gave the stall owners seventy two (72) hours to vacate the market
premises. The petitioners questioned the imposition of prison terms of five months and one day and
of accessory penalties provided by law. They also challenged the order to pay fines of P500.00
each, P10,000.00 actual and compensatory damages, P30,000.00 moral damages, P10,000.00
exemplary damages, and the costs of the suit.
The dispositive portion of the decision of the respondent Court of Appeals states:
WHEREFORE, we hereby modify the judgment appealed from in the sense that the
appellants are acquitted on ground of reasonable doubt. but they are ordered to pay
jointly and severally to complainants the amount of P9,600.00, as actual damages.
The petitioners filed a motion for reconsideration contending that the acquittal of the defendantsappellants as to criminal liability results in the extinction of their civil liability. The Court of Appeals
denied the motion holding that:
xxx xxx xxx

... appellants' acquittal was based on reasonable doubt whether the crime of
coercion was committed, not on facts that no unlawful act was committed; as their
taking the law into their hands, destructing (sic) complainants' properties is unlawful,
and, as evidence on record established that complainants suffered actual damages,
the imposition of actual damages is correct.
Consequently, the petitioners filed this special civil action, contending that:
I
THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW OR GRAVELY
ABUSED ITS DISCRETION IN IMPOSING UPON PETITIONERS PAYMENT OF
DAMAGES TO COMPLAINANTS AFTER ACQUITTING PETITIONERS OF THE
CRIME CHARGED FROM WHICH SAID LIABILITY AROSE.
II
THE COURT OF APPEALS ERRED IN HOLDING IN ITS RESOLUTION DATED
DECEMBER 26, 1974 THAT SINCE APPELLANTS' ACQUITTAL WAS BASED ON
REASONABLE DOUBT, NOT ON FACTS THAT NO UNLAWFUL ACT WAS
COMMITTED, THE IMPOSITION OF ACTUAL DAMAGES IS CORRECT.
III
THE COURT OF APPEALS COMMITTED A LEGAL INCONSISTENCY, IF NOT
PLAIN JUDICIAL ERROR, IN HOLDING IN ITS APPEALED RESOLUTION THAT
PETITIONERS COMMITTED AN UNLAWFUL ACT, THAT IS TAKING THE LAW
INTO THEIR HANDS, DESTRUCTING (sic) 'COMPLAINANTS' PROPERTIES',
AFTER HOLDING IN ITS MAIN DECISION OF NOVEMBER 6,1974 THAT THE
ACTS FOR WHICH THEY WERE CHARGED DID NOT CONSTITUTE GRAVE
COERCION AND THEY WERE NOT CHARGED OF ANY OTHER CRIME.
IV
THE COURT OF APPEALS ERRED IN ORDERING THE PETITIONERS HEREIN,
APPELLANTS IN CA-G.R. NO. 13456CR, JOINTLY AND SEVERALLY, TO PAY
COMPLAINANTS P9,600.00 IN SUPPOSED ACTUAL DAMAGES.
The issue posed in the instant proceeding is whether or not the respondent court committed a
reversible error in requiring the petitioners to pay civil indemnity to the complainants after acquitting
them from the criminal charge.
Petitioners maintain the view that where the civil liability which is included in the criminal action is
that arising from and as a consequence of the criminal act, and the defendant was acquitted in the
criminal case, (no civil liability arising from the criminal case), no civil liability arising from the criminal
charge could be imposed upon him. They cite precedents to the effect that the liability of the
defendant for the return of the amount received by him may not be enforced in the criminal case but
must be raised in a separate civil action for the recovery of the said amount (People v. Pantig, 97

Phil. 748; following the doctrine laid down in Manila Railroad Co. v. Honorable Rodolfo Baltazar, 49
O.G. 3874; Pueblo contra Abellera, 69 Phil. 623; People v. Maniago 69 Phil. 496; People v. Miranda,
5 SCRA 1067; Aldaba v. Elepafio 116 Phil. 457). In the case before us, the petitioners were acquitted
not because they did not commit the acts stated in the charge against them. There is no dispute over
the forcible opening of the market stall, its demolition with axes and other instruments, and the
carting away of the merchandize. The petitioners were acquitted because these acts were
denominated coercion when they properly constituted some other offense such as threat or
malicious mischief.
The respondent Court of Appeals stated in its decision:
For a complaint to prosper under the foregoing provision, the violence must be
employed against the person, not against property as what happened in the case at
bar. ...
xxx xxx xxx
The next problem is: May the accused be convicted of an offense other than
coercion?
From all appearances, they should have been prosecuted either for threats or
malicious mischief. But the law does not allow us to render judgment of conviction for
either of these offenses for the reason that they were not indicted for, these offenses.
The information under which they were prosecuted does not allege the elements of
either threats or malicious mischief. Although the information mentions that the act
was by means of threats', it does not allege the particular threat made. An accused
person is entitled to be informed of the nature of the acts imputed to him before he
can be made to enter into trial upon a valid information.
We rule that the crime of grave coercion has not been proved in accordance with law.
While appellants are entitled to acquittal they nevertheless are liable for the actual
damages suffered by the complainants by reason of the demolition of the stall and
loss of some of their properties. The extinction of the penal action does not carry with
it that of the civil, unless the extinction proceeds from a declaration in a final
judgment that the fact from which the civil might arise did not exist. (Rule 111, Sec. 3
(c), Rev. Rules of Court; Laperal v. Aliza, 51 OG.R. 1311, People v. Velez, 44 OG.
1811). In the instant case, the fact from which the civil might arise, namely, the
demolition of the stall and loss of the properties contained therein; exists, and this is
not denied by the accused. And since there is no showing that the complainants have
reserved or waived their right to institute a separate civil action, the civil aspect
therein is deemed instituted with the criminal action. (Rule 111, Sec. 1, Rev. Rules of
Court).
xxx xxx xxx
Section 1 of Rule 111 of the Rules of Court states the fundamental proposition that when a criminal
action is instituted, the civil action for recovery of civil liability arising from the offense charged is

impliedly instituted with it. There is no implied institution when the offended party expressly waives
the civil action or reserves his right to institute it separately. (Morte Sr. v. Alvizo, Jr., 101 SCRA 221).
The extinction of the civil action by reason of acquittal in the criminal case refers exclusively to civil
liability ex delicto founded on Article 100 of the Revised Penal Code. (Elcano v. Hill, 77 SCRA 98;
Virata v. Ochoa, 81 SCRA 472). In other words, the civil liability which is also extinguished upon
acquittal of the accused is the civil liability arising from the act as a crime.
As easily as 1942, the Supreme Court speaking through Justice Jorge Bocobo in Barredo v. Garcia,
et at. 73 Phil. 607 laid down the rule that the same punishable act or omission can create two kinds
of civil liabilities against the accused and, where provided by law, his employer. 'There is the civil
liability arising from the act as a crime and the liability arising from the same act as a quasidelict. Either one of these two types of civil liability may be enforced against the accused, However,
the offended party cannot recover damages under both types of liability. For instance, in cases of
criminal negligence or crimes due to reckless imprudence, Article 2177 of the Civil Code provides:
Responsibility for fault or negligence under the preceding article is entirely separate
and distinct from the civil liability arising from negligence under the Penal Code. But
the plaintiff cannot recover damages twice for the same act or omission of the
defendant.
Section 3 (c) of Rule 111 specifically provides that:
Sec. 3. Other civil actions arising from offenses. In all cases not included in the
preceding section the following rules shall be observed:
xxx xxx xxx
xxx xxx xxx
(c) Extinction of the penal action does not carry with it extinction of the civil, unless
the extinction proceeds from a declaration in a final judgment that the fact from which
the civil might arise did not exist. In other cases, the person entitled to the civil action
may institute it in the Jurisdiction and in the manner provided by law against the
person who may be liable for restitution of the thing and reparation or indemnity for
the damage suffered.
The judgment of acquittal extinguishes the liability of the accused for damages only when it includes
a declaration that the facts from which the civil might arise did not exist. Thus, the civil liability is not
extinguished by acquittal where the acquittal is based on reasonable doubt (PNB v. Catipon, 98 Phil.
286) as only preponderance of evidence is required in civil cases; where the court expressly
declares that the liability of the accused is not criminal but only civil in nature (De Guzman v. Alvia,
96 Phil. 558; People v. Pantig, supra) as, for instance, in the felonies of estafa, theft, and malicious
mischief committed by certain relatives who thereby incur only civil liability (See Art. 332, Revised
Penal Code); and, where the civil liability does not arise from or is not based upon the criminal act of
which the accused was acquitted (Castro v. Collector of Internal Revenue, 4 SCRA 1093; See
Regalado, Remedial Law Compendium, 1983 ed., p. 623). Article 29 of the Civil Code also provides
that:

When the accused in a criminal prosecution is acquitted on the ground that his guilt
has not been proved beyond reasonable doubt, a civil action for damages for the
same act or omission may be instituted. Such action requires only a preponderance
of evidence. Upon motion of the defendant, the court may require the plaintiff to file a
bond to answer for damages in case the complaint should be found to be malicious.
If in a criminal case the judgment of acquittal is based upon reasonable doubt, the
court shall so declare. In the absence of any declaration to that effect, it may be
inferred from the text of the decision whether or not the acquittal is due to that
ground.
More recently, we held that the acquittal of the defendant in the criminal case would not constitute an
obstacle to the filing of a civil case based on the same acts which led to the criminal prosecution:
... The finding by the respondent court that he spent said sum for and in the interest
of the Capiz Agricultural and Fishery School and for his personal benefit is not a
declaration that the fact upon which Civil Case No. V-3339 is based does not exist.
The civil action barred by such a declaration is the civil liability arising from the
offense charged, which is the one impliedly instituted with the criminal action.
(Section 1, Rule III, Rules of Court.) Such a declaration would not bar a civil action
filed against an accused who had been acquitted in the criminal case if the criminal
action is predicated on factual or legal considerations other than the commission of
the offense charged. A person may be acquitted of malversation where, as in the
case at bar, he could show that he did not misappropriate the public funds in his
possession, but he could be rendered liable to restore said funds or at least to make
a proper accounting thereof if he shall spend the same for purposes which are not
authorized nor intended, and in a manner not permitted by applicable rules and
regulations. (Republic v. Bello, 120 SCRA 203)
There appear to be no sound reasons to require a separate civil action to still be filed considering
that the facts to be proved in the civil case have already been established in the criminal
proceedings where the accused was acquitted. Due process has been accorded the accused. He
was, in fact, exonerated of the criminal charged. The constitutional presumption of innocence called
for more vigilant efforts on the part of prosecuting attorneys and defense counsel, a keener
awareness by all witnesses of the serious implications of perjury, and a more studied consideration
by the judge of the entire records and of applicable statutes and precedents. To require a separate
civil action simply because the accused was acquitted would mean needless clogging of court
dockets and unnecessary duplication of litigation with all its attendant loss of time, effort, and money
on the part of all concerned.
The trial court found the following facts clearly established by the evidence adduced by both the
prosecution and the defense:
xxx xxx xxx
(9) In the morning of February 8, 1964, then Chief Galdones, complying with the
instructions contained in said Memorandum No. 32 of the Mayor, and upon seeing
that Antonio Vergara had not vacated the premises in question, with the aid of his
policemen, forced upon the store or stall and ordered the removal of the goods inside

the store of Vergara, at the same time taking inventory of the goods taken out, piled
them outside in front of the store and had it cordoned with a rope, and after all the
goods were taken out from the store, ordered the demolition of said stall of Antonio
Vergara. Since then up to the trial of this case, the whereabouts of the goods taken
out from the store nor the materials of the demolished stall have not been made
known.
The respondent Court of Appeals made a similar finding that:
On the morning of February 8th, because the said Vergaras had not up to that time
complied with the order to vacate, the co-accused Chief of Police Galdones and
some members of his police force, went to the market and, using ax, crowbars and
hammers, demolished the stall of the Vergaras who were not present or around, and
after having first inventoried the goods and merchandise found therein, they had
them brought to the municipal building for safekeeping. Inspite of notice served upon
the Vergaras to take possession of the goods and merchandise thus taken away, the
latter refused to do so.
The loss and damage to the Vergaras as they evaluated them were:
Cost of stall construction P1,300.00
Value of furniture and equipment
judgment destroyed 300.00
Value of goods and equipment taken 8,000.00
P9,600.00
It is not disputed that the accused demolished the grocery stall of the complainants
Vergaras and carted away its contents. The defense that they did so in order to abate
what they considered a nuisance per se is untenable, This finds no support in law
and in fact. The couple has been paying rentals for the premises to the government
which allowed them to lease the stall. It is, therefore, farfetched to say that the stall
was a nuisance per se which could be summarily abated.
The petitioners, themselves, do not deny the fact that they caused the destruction of the
complainant's market stall and had its contents carted away. They state:
On February 8, 1964, despite personal pleas on Vergaras by the Mayor to vacate the
passageways of Market Building No. 3, the Vergaras were still in the premises, so
the petitioners Chief of Police and members of the Police Force of Jose Panganiban,
pursuant to the Mayor' 6 directives, demolished the store of the Vergaras, made an
inventory of the goods found in said store, and brought these goods to the municipal
building under the custody of the Municipal Treasurer, ...
The only supposed obstacle is the provision of Article 29 of the Civil Code, earlier cited, that "when
the accused in a criminal prosecution is acquitted on the ground that his guilt has not been proved

beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted."
According to some scholars, this provision of substantive law calls for a separate civil action and
cannot be modified by a rule of remedial law even in the interests of economy and simplicity and
following the dictates of logic and common sense.
As stated by retired Judge J. Cezar Sangco:
... if the Court finds the evidence sufficient to sustain the civil action but inadequate to
justify a conviction in the criminal action, may it render judgment acquitting the
accused on reasonable doubt, but hold him civilly liable nonetheless? An affirmative
answer to this question would be consistent with the doctrine that the two are distinct
and separate actions, and win (a) dispense with the reinstituting of the same civil
action, or one based on quasi-delict or other independent civil action, and of
presenting the same evidence: (b) save the injured party unnecessary expenses in
the prosecution of the civil action or enable him to take advantage of the free
services of the fiscal; and (c) otherwise resolve the unsettling implications of
permitting the reinstitution of a separate civil action whether based on delict, or
quasi-delict, or other independent civil actions.
... But for the court to be able to adjudicate in the manner here suggested, Art. 29 of
the Civil Code should be amended because it clearly and expressly provides that the
civil action based on the same act or omission may only be instituted in a separate
action, and therefore, may not inferentially be resolved in the same criminal action.
To dismiss the civil action upon acquittal of the accused and disallow the reinstitution
of any other civil action, would likewise render, unjustifiably, the acquittal on
reasonable doubt without any significance, and would violate the doctrine that the
two actions are distinct and separate.
In the light of the foregoing exposition, it seems evident that there is much sophistry
and no pragmatism in the doctrine that it is inconsistent to award in the same
proceedings damages against the accused after acquitting him on reasonable doubt.
Such doctrine must recognize the distinct and separate character of the two actions,
the nature of an acquittal on reasonable doubt, the vexatious and oppressive effects
of a reservation or institution of a separate civil action, and that the injured party is
entitled to damages not because the act or omission is punishable but because he
was damaged or injured thereby (Sangco, Philippine Law on Torts and Damages, pp.
288-289).
We see no need to amend Article 29 of the Civil Code in order to allow a court to grant damages
despite a judgment of acquittal based on reasonable doubt. What Article 29 clearly and expressly
provides is a remedy for the plaintiff in case the defendant has been acquitted in a criminal
prosecution on the ground that his guilt has not been proved beyond reasonable doubt. It merely
emphasizes that a civil action for damages is not precluded by an acquittal for the same criminal act
or omission. The Civil Code provision does not state that the remedy can be availed of only in a
separate civil action. A separate civil case may be filed but there is no statement that such separate
filing is the only and exclusive permissible mode of recovering damages.
There is nothing contrary to the Civil Code provision in the rendition of a judgment of acquittal and a
judgment awarding damages in the same criminal action. The two can stand side by side. A

judgment of acquittal operates to extinguish the criminal liability. It does not, however, extinguish the
civil liability unless there is clear showing that the act from which civil liability might arise did not
exist.
A different conclusion would be attributing to the Civil Code a trivial requirement, a provision which
imposes an uncalled for burden before one who has already been the victim of a condemnable, yet
non-criminal, act may be accorded the justice which he seeks.
We further note the rationale behind Art. 29 of the Civil Code in arriving at the intent of the legislator
that they could not possibly have intended to make it more difficult for the aggrieved party to recover
just compensation by making a separate civil action mandatory and exclusive:
The old rule that the acquittal of the accused in a criminal case also releases him
from civil liability is one of the most serious flaws in the Philippine legal system. It has
given rise to numberless instances of miscarriage of justice, where the acquittal was
due to a reasonable doubt in the mind of the court as to the guilt of the accused. The
reasoning followed is that inasmuch as the civil responsibility is derived from the the
criminal offense, when the latter is not proved, civil liability cannot be demanded.
This is one of those cases where confused thinking leads to unfortunate and
deplorable consequences. Such reasoning fails to draw a clear line of demarcation
between criminal liability and civil responsibility, and to determine the logical result of
the distinction. The two liabilities are separate and distinct from each other. One
affects the social order and the other, private rights. One is for the punishment or
correction of the offender while the other is for reparation of damages suffered by the
aggrieved party... it is just and proper that, for the purposes of the imprisonment of or
fine upon the accused, the offense should be proved beyond reasonable doubt. But
for the purpose of indemnifying the complaining party, why should the offense also
be proved beyond reasonable doubt? Is not the invasion or violation of every private
right to be proved only by preponderance of evidence? Is the right of the aggrieved
person any less private because the wrongful act is also punishable by the criminal
law? (Code Commission, pp. 45-46).
A separate civil action may be warranted where additional facts have to be established or more
evidence must be adduced or where the criminal case has been fully terminated and a separate
complaint would be just as efficacious or even more expedient than a timely remand to the trial court
where the criminal action was decided for further hearings on the civil aspects of the case. The
offended party may, of course, choose to file a separate action. These do not exist in this case.
Considering moreover the delays suffered by the case in the trial, appellate, and review stages, it
would be unjust to the complainants in this case to require at this time a separate civil action to be
filed.
With this in mind, we therefore hold that the respondent Court of Appeals did not err in awarding
damages despite a judgment of acquittal.
WHEREFORE, we hereby AFFIRM the decision of the respondent Court of Appeals and dismiss the
petition for lack of merit.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 89306 September 13, 1990
MARCELO JERVOSO and NORMA CLOSA, petitioners,
vs.
PEOPLE OF THE PHILIPPINES & HON. COURT OF APPEALS, respondents.
Manuel M. Benedicto for petitioners.
The Solicitor General for respondents.

GRIO-AQUINO, J.:
In this petition for review, the petitioners assail the decision of the Court of Appeals affirming with
modification of the penalty only, the decision of the trial court which convicted petitioner Marcelo
Jervoso of homicide for the fatal stabbing of Rogelio Jervoso, but which appreciated in his favor the
mitigating circumstance of voluntary surrender. The trial court and the Court of Appeals also
convicted his wife, Norma Closa, of slight physical injuries committed against the deceased.
The Court of Appeals set forth in its decision the conflicting versions of the prosecution and the
defense as to how the crime was committed, thus:
The facts as summarized in the People's brief as borne out by the evidence and WE
quote, [are] as follows:
The evidence for the prosecution showed that on October 24, 1982, at about 2:20
o'clock in the afternoon, prosecution eyewitness Felicisimo Pamaus a childhood
friend of appellant spouses Marcelo Jervoso and Norma Closa as well as of the
victim, Rogelio Jervoso, was in the poblacion of MacArthur, Leyte going towards the
store of appellants for the purpose of buying bread. While said eyewitness was about
four meters distance from the store, he saw the victim, Rogelio Jervoso, walking
back and forth in front of said store and appellant Marcelo Jervoso was also present
thereat. It was while Rogelio, who was still walking back and forth, had his back
turned away from Marcelo when the latter, in the presence of his spouse and coappellant Norma Closa, pulled from his waist a short bolo or 'pisao' measuring about
7-1/2 inches in length (Exh. 'D') and stabbed Rogelio at the back with said weapon
(pp. 2-6, tsn, March 16, 1984).
After being wounded, Rogelio ran away but was chased by Marcelo who was still
holding the 'pisao' with his right hand and was closely being followed by his wife and
co-appellant, Norma Closa, across the national highway and inside the hollow

blockfenced yard of a certain Mrs. Olmedo. Catching up with Rogelio inside the
fenced yard of Mrs. Olmedo where Rogelio had already fallen face downward upon
entering the same, Marcelo stabbed Rogelio again at the back of the latter with the
'pisao.' Meanwhile, Norma Closa, who had picked up a stone measuring about 8
inches in length and 3-3/4 inches in width (Exh. 'E') struck the fallen Rogelio with said
stone held by both her hands, hitting the latter on the left side of the face near the ear
(pp. 5-8, 20, 21, 23, 24, tsn, March 16, 1984).
Another eyewitness who was present and who saw the incident in question from its
inception up to the time of its termination and who in fact tried to pacify Marcelo and
Rogelio was Eleno Requioma. After Marcelo inflicted on Rogelio the second stab
wound at the back and Norma Closa hit the latter with a stone (Exh. 'E') on the left
side of the face near the ear and appellants went back to their house, it was
Requioma, together with Dominador Moquia and Rolando Molero, who brought the
victim to the Abuyog General Hospital where he later expired (pp- 5, 25, 26, 28, tsn,
March 16, 1984). Requioma, however, failed to testify for the prosecution as he died
during the pendency of trial of the case (p. 6, decision, p. 229, record).
The defense' evidence was briefly stated in the appellant's brief which WE also
quote, as follows:
At the trial of this case, principal accused MARCELO JERVOSO declared that on
October 24, 1982 at about 2:00 o'clock in the afternoon he was in his office situated
in front of his main house which is also near his store, making list of goods to be
purchased in Tacloban City for his store; that his wife Norma Closa was inside their
house bathing their children preparatory to their taking their afternoon nap that
Rogelio Jervoso, son of the brother of his adoptive father, entered his office without
knocking, and arrogantly asked him why he was possessing the lands of Domingo
Jervoso when he is not the real son and he is not also a legally adopted son; that
Rogelio Jervoso was drunk at the time, demanded that an accounting of all the
produce of the coconuts and palay of Domingo Jervoso's lands; that he told Rogelio
to come back the next day so both of them would go and see his adoptive mother
Afra Diaz who can enlighten him (Rogelio) about the matter.
Seeing Rogelio already belligerent, Marcelo went outside his office. While he was
already outside and about a meter from his store, he saw Ramon Taro and heard him
shout: 'Boy, don't do that! Boy' is the nickname of Rogelio Jervoso. Upon hearing
Ramon Taro shout, Marcelo looked back just as Rogelio delivered a stabbing blow on
him, hitting him on the left back part of Ms upper arm, with a 'pisao'(Exhibit 'D')
After the first stab blow delivered by Rogelio, he (Marcelo) ran across the National
Highway towards the gate of the house of Mrs. Olmedo. Marcelo was able to enter
the front yard of Mrs. Olmedo's premises and he tried to escape, but Rogelio
intercepted him by passing the other way. Marcelo ran toward the corner but was met
by Rogelio, so he tried to retrace his steps to the gate, but when he was about to go
out of the gate, Rogelio lunged at him and delivered another stabbing blow but he
was able to get hold of the right wrist of Rogelio's hand holding the deadly weapon.
Meanwhile, Rogelio's left arm was choking his check (sic) and pushing him towards
the concrete fence of Mrs. Olmedo.

So, he struggled to get hold of the 'pisao' and was able to wrest it from the hold of
Rogelio by twisting Rogelio's right hand, but Rogelio was still holding his neck pinned
in his left arm against the concrete fence. To defend himself, Marcelo, delivered two
stabbing blows at the back of Rogelio the first blow, with a downward stroke on his
right back portion and the second by an upward stroke on his left back portion.
After stabbing the victim, Rogelio, he pushed Rogelio who fell to the ground on his
left side, he ran towards the gate of Mrs. Olmedo's premises and on his way out he
saw Ramon Taro and called him instructing him to fetch a policeman.' (pp. 31-34,
Rollo.)
The Court of Appeals affirmed the trial court's finding that the plea of self-defense was not proven by
clear and convincing evidence:
Regrettably missing in the appellants' evidence are the elements of self-defense
which are: (1) unlawful aggression; (2) reasonable necessity of the means employed
to prevent and repel it; and (3) lack of sufficient provocation on the part of the person
defending himself. The defense failed to demonstrate the concurrence of the three
essential elements with satisfactory evidence so as to entitle the appellant of the
defense of self-defense.
WE are entirely in accord with the trial court that the affirmative defense of selfdefense was not proven by clear and convincing evidence. The evidence is doubtful,
and lacks that requisite of certainty and sufficient credulity to sustain the plea of selfdefense.
Suffice it to say that the trial court did not err in finding that the guilt of both appellant
was proven with proof beyond reasonable doubt. (p. 36, Rollo.)
The dispositive part of its decision reads:
WHEREFORE, the appealed judgment is hereby MODIFIED in the sense that the
penalty to be imposed on appellant Marcelo Jervoso, should be an imprisonment of
six (6) years and one (1) day of prision mayor as minimum to twelve (12) years of
prision mayor as maximum, and to indemnify the heirs of the deceased Rogelio
Jervoso in the amount of P30,000.00, Philippine Currency.
In all other respects, the appealed judgment is hereby affirmed. Costs against both
appellants. (p. 37, Rollo.)
In their petition for review, the petitioners allege that the Court of Appeals erred:
(1) in ordering them (petitioners) to pay indemnity of P30,000 to the heirs of Rogelio
Jervoso despite the reservation by said heirs of their right to file a separate civil
action against the accused, which they did file in the Regional Trial Court of Manila,
Branch XXXI where it was docketed as Civil Case No. 83-18958 entitled, "Digna
Carino-Jervoso, et al. vs. Marcelo Jervoso and Norma Closa; and

(2) in finding the petitioners guilty of the crimes charged without support of competent
evidence and contrary to applicable laws and decisions of this Court.
The first assignment of error is meritorious. Section 1, Rule 111 of the Rules of Court provides:
Section 1. Institution of criminal and civil actions. When a criminal action is instituted,
the civil action for the recovery of civil liability is impliedly instituted with the criminal
action, unless the offended partywaives the civil action, reserves his right to institute
it separately, or institutes the civil action prior to the criminal action.
Such civil action includes recovery of indemnity under the Revised Penal Code, and
damages under Articles 32, 33, 34 and 2176 of the Civil Code of the Philippines
arising from the same act or omission of the accused.
A waiver of any of the civil actions extinguishes the others. The institution of, or the
reservation of the right to file, any of the said civil actions separately waives the
others.
The reservation of the right to institute the separate civil actions shall be made before
the prosecution starts to present its evidence and under circumstances affording the
offended party a reasonable opportunity to make such reservation.
In no case may the offended party recover damages twice for the same act or
omission of the accused.
xxx xxx xxx
The filing of a separate civil action for damages against the accused by the heirs of the deceased
victim is authorized under Article 33 of the Civil Code which provides:
Art. 33. In cases of defamation, fraud, and physical injuries, a civil action for
damages, entirely separate and distinct from the criminal action, may be brought by
the injured party. Such civil action shall proceed independently of the criminal
prosecution, and shall require only a preponderance of evidence.
The term "physical injuries" in Art. 33 is used in a generic sense. It includes consummated,
frustrated, or attempted homicide (Madeja vs. Cruz, 126 SCRA 293, cited in Vol. I, p. 62 Civil Code,
1990 Ed., by R.C. Aquino). Having reserved and filed in the Regional Trial Court of Manila a
separate civil action to recover the civil liability of the accused arising from the crimes charged, the
heirs of the deceased Rogelio Jervoso, are precluded from recovering damages in the criminal case
against the accused, for they are not entitled to recover damages twice for the same criminal act of
the accused. The trial court erred in awarding to the heirs of Rogelio Jervoso in the criminal case
P30,000 as civil indemnity for his death despite their reservation to file a separate civil action for that
purpose. The Court of Appeals likewise erred in affirming the award.
The second assignment of error raises a purely factual issue: whether the evidence is sufficient to
convict the accused of homicide. That issue may not be reviewed by this Court in an appeal by
certiorari under Rule 45 of the Rules of Court, where only legal issues may be raised.

WHEREFORE, the decision of the Court of Appeals in CA-G.R. CR No. 04472 entitled, "People of
the Philippines, plaintiff-appellee vs. Marcelo Jervoso and Norma Closa, defendants-appellants" is
affirmed, except the award of P30,000 as indemnity for damages to the heirs of Rogelio Jervoso,
which should be deleted. No costs.
SO ORDERED.