G.R. No.

L-10126 October 22, 1957

SALUD VILLANUEVA VDA. DE BATACLAN and the minors NORMA, LUZVIMINDA, ELENITA,
OSCAR and ALFREDO BATACLAN, represented by their Natural guardian, SALUD
VILLANUEVA VDA. DE BATACLAN, plaintiffs-appellants,
vs.
MARIANO MEDINA, defendant-appellant.

Lope E. Adriano, Emmanuel Andamo and Jose R. Francisco for plaintiffs-appellants.

Fortunato Jose for defendant and appellant.

MONTEMAYOR, J.:

Shortly after midnight, on September 13, 1952 bus no. 30 of the Medina Transportation,
operated by its owner defendant Mariano Medina under a certificate of public convenience, left
the town of Amadeo, Cavite, on its way to Pasay City, driven by its regular chauffeur, Conrado
Saylon. There were about eighteen passengers, including the driver and conductor. Among the
passengers were Juan Bataclan, seated beside and to the right of the driver, Felipe Lara, sated
to the right of Bataclan, another passenger apparently from the Visayan Islands whom the
witnesses just called Visaya, apparently not knowing his name, seated in the left side of the
driver, and a woman named Natalia Villanueva, seated just behind the four last mentioned. At
about 2:00 o'clock that same morning, while the bus was running within the jurisdiction of Imus,
Cavite, one of the front tires burst and the vehicle began to zig-zag until it fell into a canal or
ditch on the right side of the road and turned turtle. Some of the passengers managed to leave
the bus the best way they could, others had to be helped or pulled out, while the three
passengers seated beside the driver, named Bataclan, Lara and the Visayan and the woman
behind them named Natalia Villanueva, could not get out of the overturned bus. Some of the
passengers, after they had clambered up to the road, heard groans and moans from inside the
bus, particularly, shouts for help from Bataclan and Lara, who said they could not get out of the
bus. There is nothing in the evidence to show whether or not the passengers already free from
the wreck, including the driver and the conductor, made any attempt to pull out or extricate and
rescue the four passengers trapped inside the vehicle, but calls or shouts for help were made to
the houses in the neighborhood. After half an hour, came about ten men, one of them carrying a
lighted torch made of bamboo with a wick on one end, evidently fueled with petroleum. These
men presumably approach the overturned bus, and almost immediately, a fierce fire started,
burning and all but consuming the bus, including the four passengers trapped inside it. It would
appear that as the bus overturned, gasoline began to leak and escape from the gasoline tank on
the side of the chassis, spreading over and permeating the body of the bus and the ground
under and around it, and that the lighted torch brought by one of the men who answered the call
for help set it on fire.

That same day, the charred bodies of the four deemed passengers inside the bus were
removed and duly identified that of Juan Bataclan. By reason of his death, his widow, Salud
Villanueva, in her name and in behalf of her five minor children, brought the present suit to
recover from Mariano Medina compensatory, moral, and exemplary damages and attorney's
fees in the total amount of P87,150. After trial, the Court of First Instance of Cavite awarded
P1,000 to the plaintiffs plus P600 as attorney's fee, plus P100, the value of the merchandise
being carried by Bataclan to Pasay City for sale and which was lost in the fire. The plaintiffs and
the defendants appealed the decision to the Court of Appeals, but the latter endorsed the
appeal to us because of the value involved in the claim in the complaint.
Our new Civil Code amply provides for the responsibility of common carrier to its passengers
and their goods. For purposes of reference, we are reproducing the pertinent codal provisions:

ART. 1733. Common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods and
for the safety of the passengers transported by them, according to all the circumstances
of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in
articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extra ordinary diligence for the
safety of the passengers is further set forth in articles 1755 and 1756.

ART. 1755. A common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with
a due regard for all the circumstances.

ART. 1756. In case of death of or injuries to passengers, common carriers are presumed
to have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755

ART. 1759. Common carriers are liable for the death of or injuries to passengers through
the negligence or willful acts of the former's employees, although such employees may
have acted beyond the scope of their authority or in violation of the order of the common
carriers.

This liability of the common carriers does not cease upon proof that they exercised all
the diligence of a good father of a family in the selection and supervision of their
employees.

ART. 1763. A common carrier responsible for injuries suffered by a passenger on

account of the willful acts or negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the diligence of a good father of a
family could have prevented or stopped the act or omission.

We agree with the trial court that the case involves a breach of contract of transportation for
hire, the Medina Transportation having undertaken to carry Bataclan safely to his destination,
Pasay City. We also agree with the trial court that there was negligence on the part of the
defendant, through his agent, the driver Saylon. There is evidence to show that at the time of
the blow out, the bus was speeding, as testified to by one of the passengers, and as shown by
the fact that according to the testimony of the witnesses, including that of the defense, from the
point where one of the front tires burst up to the canal where the bus overturned after zig-
zaging, there was a distance of about 150 meters. The chauffeur, after the blow-out, must have
applied the brakes in order to stop the bus, but because of the velocity at which the bus must
have been running, its momentum carried it over a distance of 150 meters before it fell into the
canal and turned turtle.

There is no question that under the circumstances, the defendant carrier is liable. The only
question is to what degree. The trial court was of the opinion that the proximate cause of the
death of Bataclan was not the overturning of the bus, but rather, the fire that burned the bus,
including himself and his co-passengers who were unable to leave it; that at the time the fire
started, Bataclan, though he must have suffered physical injuries, perhaps serious, was still
alive, and so damages were awarded, not for his death, but for the physical injuries suffered by
him. We disagree. A satisfactory definition of proximate cause is found in Volume 38, pages
695-696 of American jurisprudence, cited by plaintiffs-appellants in their brief. It is as follows:

. . . 'that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result would not have
occurred.' And more comprehensively, 'the proximate legal cause is that acting first and
producing the injury, either immediately or by setting other events in motion, all
constituting a natural and continuous chain of events, each having a close causal
connection with its immediate predecessor, the final event in the chain immediately
effecting the injury as a natural and probable result of the cause which first acted, under
such circumstances that the person responsible for the first event should, as an ordinary
prudent and intelligent person, have reasonable ground to expect at the moment of his
act or default that an injury to some person might probably result therefrom.

It may be that ordinarily, when a passenger bus overturns, and pins down a passenger, merely
causing him physical injuries, if through some event, unexpected and extraordinary, the
overturned bus is set on fire, say, by lightning, or if some highwaymen after looting the vehicle
sets it on fire, and the passenger is burned to death, one might still contend that the proximate
cause of his death was the fire and not the overturning of the vehicle. But in the present case
under the circumstances obtaining in the same, we do not hesitate to hold that the proximate
cause was the overturning of the bus, this for the reason that when the vehicle turned not only
on its side but completely on its back, the leaking of the gasoline from the tank was not
unnatural or unexpected; that the coming of the men with a lighted torch was in response to the
call for help, made not only by the passengers, but most probably, by the driver and the
conductor themselves, and that because it was dark (about 2:30 in the morning), the rescuers
had to carry a light with them, and coming as they did from a rural area where lanterns and
flashlights were not available; and what was more natural than that said rescuers should
innocently approach the vehicle to extend the aid and effect the rescue requested from them. In
other words, the coming of the men with a torch was to be expected and was a natural
sequence of the overturning of the bus, the trapping of some of its passengers and the call for
outside help. What is more, the burning of the bus can also in part be attributed to the
negligence of the carrier, through is driver and its conductor. According to the witness, the driver
and the conductor were on the road walking back and forth. They, or at least, the driver should
and must have known that in the position in which the overturned bus was, gasoline could and
must have leaked from the gasoline tank and soaked the area in and around the bus, this aside
from the fact that gasoline when spilled, specially over a large area, can be smelt and directed
even from a distance, and yet neither the driver nor the conductor would appear to have
cautioned or taken steps to warn the rescuers not to bring the lighted torch too near the bus.
Said negligence on the part of the agents of the carrier come under the codal provisions above-
reproduced, particularly, Articles 1733, 1759 and 1763.

As regard the damages to which plaintiffs are entitled, considering the earning capacity of the
deceased, as well as the other elements entering into a damage award, we are satisfied that the
amount of SIX THOUSAND (P6,000) PESOS would constitute satisfactory compensation, this
to include compensatory, moral, and other damages. We also believe that plaintiffs are entitled
to attorney's fees, and assessing the legal services rendered by plaintiffs' attorneys not only in
the trial court, but also in the course of the appeal, and not losing sight of the able briefs
prepared by them, the attorney's fees may well be fixed at EIGHT HUNDRED (P800) PESOS
for the loss of merchandise carried by the deceased in the bus, is adequate and will not be
disturbed.

There is one phase of this case which disturbs if it does not shock us. According to the
evidence, one of the passengers who, because of the injuries suffered by her, was hospitalized,
and while in the hospital, she was visited by the defendant Mariano Medina, and in the course of
his visit, she overheard him speaking to one of his bus inspectors, telling said inspector to have
the tires of the bus changed immediately because they were already old, and that as a matter of
fact, he had been telling the driver to change the said tires, but that the driver did not follow his
instructions. If this be true, it goes to prove that the driver had not been diligent and had not
taken the necessary precautions to insure the safety of his passengers. Had he changed the
tires, specially those in front, with new ones, as he had been instructed to do, probably, despite
his speeding, as we have already stated, the blow out would not have occurred. All in all, there
is reason to believe that the driver operated and drove his vehicle negligently, resulting in the
death of four of his passengers, physical injuries to others, and the complete loss and
destruction of their goods, and yet the criminal case against him, on motion of the fiscal and with
his consent, was provisionally dismissed, because according to the fiscal, the witnesses on
whose testimony he was banking to support the complaint, either failed or appear or were
reluctant to testify. But the record of the case before us shows the several witnesses,
passengers, in that bus, willingly and unhesitatingly testified in court to the effect of the said
driver was negligent. In the public interest the prosecution of said erring driver should be
pursued, this, not only as a matter of justice, but for the promotion of the safety of passengers
on public utility buses. Let a copy of this decision be furnished the Department of Justice and
the Provincial Fiscal of Cavite.

In view of the foregoing, with the modification that the damages awarded by the trial court are
increased from ONE THOUSAND (P1,000) PESOS TO SIX THOUSAND (P6,000) PESOS, and
from SIX HUNDRED PESOS TO EIGHT HUNDRED (P800) PESOS, for the death of Bataclan
and for the attorney's fees, respectively, the decision appealed is from hereby affirmed, with
costs.

G.R. No. L-36481-2 October 23, 1982

AMPARO C. SERVANDO, CLARA UY BICO, plaintiffs-appellees,

vs.
PHILIPPINE STEAM NAVIGATION CO., defendant-appellant.

Zoilo de la Cruz, Jr. & Associate for plaintiff-appellee Amparo Servando.

Benedicto, Sumbingco & Associate for appellee Clara Uy Bico.

Ross, Salcedo, del Rosario, Bito & Misa for defendant-appellant.

ESCOLIN, J.:

This appeal, originally brought to the Court of Appeals, seeks to set aside the decision of the
Court of First Instance of Negros Occidental in Civil Cases Nos. 7354 and 7428, declaring
appellant Philippine Steam Navigation liable for damages for the loss of the appellees' cargoes
as a result of a fire which gutted the Bureau of Customs' warehouse in Pulupandan, Negros
Occidental.

The Court of Appeals certified the case to Us because only pure questions of law are raised
therein.

The facts culled from the pleadings and the stipulations submitted by the parties are as follows:

On November 6, 1963, appellees Clara Uy Bico and Amparo Servando loaded on board the
appellant's vessel, FS-176, for carriage from Manila to Pulupandan, Negros Occidental, the
following cargoes, to wit:

Clara Uy Bico —

1,528 cavans of rice valued

at P40,907.50;

Amparo Servando —

44 cartons of colored paper,

toys and general merchandise valued at P1,070.50;

as evidenced by the corresponding bills of lading issued by the appellant. 1

Upon arrival of the vessel at Pulupandan, in the morning of November 18, 1963, the cargoes
were discharged, complete and in good order, unto the warehouse of the Bureau of Customs. At
about 2:00 in the afternoon of the same day, said warehouse was razed by a fire of unknown
origin, destroying appellees' cargoes. Before the fire, however, appellee Uy Bico was able to
take delivery of 907 cavans of rice 2 Appellees' claims for the value of said goods were rejected
by the appellant.

On the bases of the foregoing facts, the lower court rendered a decision, the decretal portion of
which reads as follows:

WHEREFORE, judgment is rendered as follows:

1. In case No. 7354, the defendant is hereby ordered to pay the plaintiff Amparo
C. Servando the aggregate sum of P1,070.50 with legal interest thereon from the
date of the filing of the complaint until fully paid, and to pay the costs.

2. In case No. 7428, the defendant is hereby ordered to pay to plaintiff Clara Uy
Bico the aggregate sum of P16,625.00 with legal interest thereon from the date
of the filing of the complaint until fully paid, and to pay the costs.

Article 1736 of the Civil Code imposes upon common carriers the duty to observe extraordinary
diligence from the moment the goods are unconditionally placed in their possession "until the
same are delivered, actually or constructively, by the carrier to the consignee or to the person
who has a right to receive them, without prejudice to the provisions of Article 1738. "

The court a quo held that the delivery of the shipment in question to the warehouse of the
Bureau of Customs is not the delivery contemplated by Article 1736; and since the burning of
the warehouse occurred before actual or constructive delivery of the goods to the appellees, the
loss is chargeable against the appellant.

It should be pointed out, however, that in the bills of lading issued for the cargoes in question,
the parties agreed to limit the responsibility of the carrier for the loss or damage that may be
caused to the shipment by inserting therein the following stipulation:

Clause 14. Carrier shall not be responsible for loss or damage to shipments
billed 'owner's risk' unless such loss or damage is due to negligence of carrier.
Nor shall carrier be responsible for loss or damage caused by force majeure,
dangers or accidents of the sea or other waters; war; public enemies; . . . fire . ...

We sustain the validity of the above stipulation; there is nothing therein that is contrary to law,
morals or public policy.

Appellees would contend that the above stipulation does not bind them because it was printed
in fine letters on the back-of the bills of lading; and that they did not sign the same. This
argument overlooks the pronouncement of this Court in Ong Yiu vs. Court of Appeals,
promulgated June 29, 1979, 3 where the same issue was resolved in this wise:

While it may be true that petitioner had not signed the plane ticket (Exh. '12'), he
is nevertheless bound by the provisions thereof. 'Such provisions have been held
to be a part of the contract of carriage, and valid and binding upon the passenger
regardless of the latter's lack of knowledge or assent to the regulation'. It is what
is known as a contract of 'adhesion', in regards which it has been said that
contracts of adhesion wherein one party imposes a ready made form of contract
on the other, as the plane ticket in the case at bar, are contracts not entirely
prohibited. The one who adheres to the contract is in reality free to reject it
entirely; if he adheres, he gives his consent." (Tolentino, Civil Code, Vol. IV, 1962
Ed., p. 462, citing Mr. Justice J.B.L. Reyes, Lawyer's Journal, Jan. 31, 1951, p.
49).

Besides, the agreement contained in the above quoted Clause 14 is a mere iteration of the
basic principle of law written in Article 1 1 7 4 of the Civil Code:

Article 1174. Except in cases expressly specified by the law, or when it is

otherwise declared by stipulation, or when the nature of the obligation requires
the assumption of risk, no person shall be responsible for those events which
could not be foreseen, or which, though foreseen, were inevitable.

Thus, where fortuitous event or force majeure is the immediate and proximate cause of the loss,
the obligor is exempt from liability for non-performance. The Partidas, 4 the antecedent of Article
1174 of the Civil Code, defines 'caso fortuito' as 'an event that takes place by accident and
could not have been foreseen. Examples of this are destruction of houses, unexpected fire,
shipwreck, violence of robbers.'
In its dissertation of the phrase 'caso fortuito' the Enciclopedia Juridicada Espanola 5 says: "In a
legal sense and, consequently, also in relation to contracts, a 'caso fortuito' presents the
following essential characteristics: (1) the cause of the unforeseen and unexpected occurrence,
or of the failure of the debtor to comply with his obligation, must be independent of the human
will; (2) it must be impossible to foresee the event which constitutes the 'caso fortuito', or if it can
be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be
free from any participation in the aggravation of the injury resulting to the creditor." In the case
at bar, the burning of the customs warehouse was an extraordinary event which happened
independently of the will of the appellant. The latter could not have foreseen the event.

There is nothing in the record to show that appellant carrier ,incurred in delay in the
performance of its obligation. It appears that appellant had not only notified appellees of the
arrival of their shipment, but had demanded that the same be withdrawn. In fact, pursuant to
such demand, appellee Uy Bico had taken delivery of 907 cavans of rice before the burning of
the warehouse.

Nor can the appellant or its employees be charged with negligence. The storage of the goods in
the Customs warehouse pending withdrawal thereof by the appellees was undoubtedly made
with their knowledge and consent. Since the warehouse belonged to and was maintained by the
government, it would be unfair to impute negligence to the appellant, the latter having no control
whatsoever over the same.

The lower court in its decision relied on the ruling laid down in Yu Biao Sontua vs. Ossorio 6,
where this Court held the defendant liable for damages arising from a fire caused by the
negligence of the defendant's employees while loading cases of gasoline and petroleon
products. But unlike in the said case, there is not a shred of proof in the present case that the
cause of the fire that broke out in the Custom's warehouse was in any way attributable to the
negligence of the appellant or its employees. Under the circumstances, the appellant is plainly
not responsible.

WHEREFORE, the judgment appealed from is hereby set aside. No costs.

SO ORDERED.

Makasiar (Chairman), Concepcion, Jr., Guerrero, Abad Santos and De Castro, JJ., concur.

Separate Opinions

AQUINO, J., concurring:

I concur. Under article 1738 of the Civil Code "the extraordinary liability of the common carrier
continues to be operative even during the time the goods are stored in the warehouse of the
carrier at the place of destination, until the consignee has been advised of the arrival of the
goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of
them".

From the time the goods in question were deposited in the Bureau of Customs' warehouse in
the morning of their arrival up to two o' clock in the afternoon of the same day, when the
warehouse was burned, Amparo C. Servando and Clara Uy Bico, the consignees, had
reasonable opportunity to remove the goods. Clara had removed more than one-half of the rice
consigned to her.

Moreover, the shipping company had no more control and responsibility over the goods after
they were deposited in the customs warehouse by the arrastre and stevedoring operator.

No amount of extraordinary diligence on the part of the carrier could have prevented the loss of
the goods by fire which was of accidental origin.

Under those circumstances, it would not be legal and just to hold the carrier liable to the
consignees for the loss of the goods. The consignees should bear the loss which was due to a
fortuitous event.

Separate Opinions

AQUINO, J., concurring:

I concur. Under article 1738 of the Civil Code "the extraordinary liability of the common carrier
continues to be operative even during the time the goods are stored in the warehouse of the
carrier at the place of destination, until the consignee has been advised of the arrival of the
goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of
them".

From the time the goods in question were deposited in the Bureau of Customs' warehouse in
the morning of their arrival up to two o' clock in the afternoon of the same day, when the
warehouse was burned, Amparo C. Servando and Clara Uy Bico, the consignees, had
reasonable opportunity to remove the goods. Clara had removed more than one-half of the rice
consigned to her.

Moreover, the shipping company had no more control and responsibility over the goods after
they were deposited in the customs warehouse by the arrastre and stevedoring operator.

No amount of extraordinary diligence on the part of the carrier could have prevented the loss of
the goods by fire which was of accidental origin.

Under those circumstances, it would not be legal and just to hold the carrier liable to the
consignees for the loss of the goods. The consignees should bear the loss which was due to a
fortuitous event.
SILAHIS INTERNATIONAL HOTEL, G.R. No. 163087
INC. and JOSE MARCEL PANLILIO,

Petitioners,
Present:

-versus-
QUISUMBING, Chairperson,

CARPIO,

ROGELIO S. SOLUTA, JOSELITO CARPIO MORALES, and

SANTOS, EDNA BERNATE, VICENTA
DELOLA, FLORENTINO MATILLA, TINGA, JJ.
and GLOWHRAIN-SILAHIS UNION
CHAPTER,

Respondents. .

Promulgated:

February 20, 2006

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - x

DECISION

CARPIO MORALES, J.:

 The present Petition for Review on Certiorari partially assails the Court of Appeals
Decision1[1] of March 26, 2004 holding herein petitioners Silahis International Hotel, Inc. and
Jose Marcel Panlilio, along with Floro Maniego and Steve Villanueva, civilly liable for damages
under Article 32 of the Civil Code, for violation of respondents constitutional right against
unreasonable search of their office.

Petitioner Jose Marcel Panlilio (Panlilio) was the Vice President for Finance of his co-
petitioner Silahis International Hotel, Inc. (hotel), while respondents Rogelio Soluta (Soluta),
Joselito Santos, Edna Bernate (Edna), Vicenta Delola (Vicenta), and Florentino Matilla (Matilla)
were employees of the hotel and officers of the Glowhrain-Silahis Union Chapter, the hotel
employees union (the union).

Petitioners version of the antecedents of the case are as follows:

In late 1987, as Coronel Floro Maniego (Maniego), General Manager of the Rapier
Enforcement Professional Investigation and Security Agency, Inc. (REPISA) which the hotel
contracted to provide its security force, had been receiving reports that sale and/or use of
marijuana, dollar smuggling, and prostitution were going on in the union office at the hotel and
that there existed a theft syndicate, he conducted a surveillance, with the approval of Panlilio, of
suspected members and officers of the union.2[2]
 In the morning of January 11, 1988, Panlilio, his personal secretary Andy Dizon,
Maniego, Bulletin reporter Nonoy Rosales, and REPISA security guard Steve Villanueva
(Villanueva) entered the union office located at the hotel basement, with the permission of union
officer Henry Babay (Babay) who was apprised about the suspected illegal activities, and
searched the premises in the course of which Villanueva found a plastic bag under a table.
When opened, the plastic bag yielded dry leaves of marijuana.3[3] Panlilio thereupon ordered
Maniego to investigate and report the matter to the authorities.

On the other hand, respondents version follows:

On January 10, 1988, Loida Somacera (Loida), a laundrywoman of the hotel, stayed
overnight at the female locker room at the basement of the hotel. At dawn of January 11, 1988,
she heard pounding sounds outside, prompting her to open the door of the locker room upon
which she saw five men in barong tagalog whom she failed to recognize but she was sure were
not employees of the hotel,4[4] forcibly opening the door of the union office.5[5] She even saw
one of the men hid something behind his back. She then closed the door and went back to bed.
Soon after she heard the door of the union office opened.

In the morning of January 11, 1988, as union officer Soluta was trying in vain to open the
door of the union office, Loida narrated to him what she had witnessed at dawn.
 Soluta thus immediately lodged a complaint before the Security Officer. And he fetched
a locksmith, Efren Guevarra, who tried to assist him, Edna, Arnold Ilustrisimo and Ed Bautista
open the door. At that instant, men in barong tagalog armed with clubs arrived and started
hitting Soluta and his companions, drawing them to run to the female locker room, and to
thereafter proceed to the Engineering Office where they called for police assistance.6[6]

While awaiting the arrival of the police, Babay and Panlilio, on the latters request, met.
At the meeting, Panlilio told Babay that they proceed to the union office where they would settle
the mauling incident, to which Babay replied that the door of the office could not be opened.
Panlilio thereupon instructed Villanueva to force open the door, and the latter did. Once inside,
Panlilio and his companions began searching the office, over the objection of Babay who even
asked them if they had a search warrant.7[7] A plastic bag was found containing marijuana
flowering tops.

As a result of the discovery of the presence of marijuana in the union office and after the
police conducted an investigation of the incident, a complaint against the 13 union officers,8[8]
namely: Babay, Isaac Asuncion, Jr., Soluta, Teodoro Gimpayan, Vicenta, Edna, Arnulfo
Ilustrisimo, Irene Velarde, Joselito Santos, Renato Lina, Avelino Meneses, Matilla, and Norman
Agtani9[9] was filed before the Fiscals Office of Manila, for violation of Republic Act (R.A.) No.
6425, as amended by Batas Pambansa Bilang 179 (The Dangerous Drugs Act).

An Information10[10] indicting the union officers was subsequently filed by the Fiscals
Office before the Regional Trial Court (RTC) of Manila.

After trial, Branch 5 of the RTC acquitted the accused. The trial court disposed:

WHEREFORE, with the specimen and/or the marijuana flowering

tops allegedly found inside the Union Office occupied by the accused not
admissible in evidence, coupled by the suspicious circumstance of
confiscation, for lack of sufficient evidence, accused Henry Babay, Isaac
Asuncion, Jr., Rogelio Soluta, Teodoro F. Gimpayan, Vicente Delola, Edna
Bernate, Arnulfo Ilustrisimo, Irene Velarde, Joselito Santos, Avelino Meneses,
Florentino Matilla and Norman Agtani, are ACQUITTED of the charge. The bonds
they put up for their provisional liberty are cancelled.

The Branch Clerk is directed to turn over the custody of the seized plastic
bag containing flowering tops of marijuana to the NBI Director as Permanent
Custodian of the seized Dangerous Drugs.

SO ORDERED.11[11] (Emphasis and underscoring supplied)

 Soluta and his fellow union officers, together with the union, thereafter filed before the
Manila RTC a Complaint12[12] against petitioners et al. including prosecuting Fiscal Jose
Bautista and Atty. Eduardo Tutaan who assisted in the prosecution of the case against them, for
malicious prosecution and violation of their constitutional right against illegal search.

After trial, Branch 55 of the Manila RTC, by Decision13[13] dated June 2, 1994, held the
hotel, Panlilio, Maniego and Villanueva jointly and severally liable for damages as a result of
malicious prosecution and illegal search of the union office. The dispositive portion of the trial
courts decision reads:

WHEREFORE, premises considered, judgment is hereby rendered

ordering the defendants Silahis International Hotel, Inc., Jose Marcel Panlilio,
Floro Maniego and Steve Villanueva, individually and collectively, jointly and
severally, to pay to:

1. Plaintiffs Union, Rogelio S. Soluta, Joselito Santos, Florentino

Matilla, Vicenta Delola and Edna Bernate-Dacanay, jointly, the sum
of P70,900.00 as actual damages, and the further sum of
P1,000.00 each for the same plaintiffs, except the Union, in the
same concept and nature.

2. Plaintiffs Rogelio Soluta, Joselito Santos, Florentino Matilla,

Vicenta Delola and Edna Bernate-Dacanay the sum of P100,000.00
each for moral damages.

3. Plaintiffs Joselito Santos, Florentino Matilla, Vicenta Delola and

Edna-Bernate-Dacanay the sum of P30,000.00 each as exemplary
damages.

4. To all the plaintiffs, jointly and severally, the sum of P30,000.00

for and as attorneys fees.

The complaint, insofar as plaintiff Erlisa Ilustrisimo and defendants

Ramos, Bautista and Tutaan are concerned, is DISMISSED for lack of merit.
 All the counterclaims of the defendants are likewise dismissed for lack of
factual and legal basis.

Costs against the remaining defendants.

SO ORDERED.14[14] (Emphasis and underscoring supplied)

On appeal, the Court of Appeals affirmed with modification the trial courts decision. It
found herein petitioners et al. civilly liable for damages for violation of individual respondents
constitutional right against illegal search, not for malicious prosecution, set aside the award of
actual damages to respondent union, and reduced the award of actual damages to individual
respondents to P50,000. The dispositive portion of the appellate courts decision reads:

WHEREFORE, the Decision of the Regional Trial Court of Manila, Branch

55, is hereby AFFIRMED with the modification that the first paragraph of the
dispositive portion should read:

1. Plaintiffs Rogelio Soluta, Joselito Santos, Florentino Matilla, Vicenta

Delola and Edna Bernate-Dacanay, jointly, the sum of P50,000.00 as actual
damages, and the further sum of P1,000.00 each for the same plaintiffs in the
same concept and nature.

The Decision is hereby AFFIRMED in all other respects.

SO ORDERED.15[15]

Hence, the present petition of Panlilio and the hotel, they contending that:
 THE COURT OF APPEALS GRAVELY ERRED IN ITS CONCLUSION
THAT PETITIONERS ARE LIABLE FOR DAMAGES UNDER ARTICLE 32 OF
THE CIVIL CODE IN THAT:

1. THE COURT OF APPEALS APPLICATION OF PEOPLE V. ARUTA

(288 SCRA 626[1998]) AND SECTION 13, RULE 126 OF THE RULES OF
CRIMINAL PROCEDURE IN THE INSTANT CASE IS LEGALLY FLAWED.

2. PETITIONERS SEARCH OF THE UNION OFFICE IN THE INSTANT

CASE WAS ENTIRELY REASONABLE UNDER THE CIRCUMSTANCES.16[16]

While petitioners concede that the appellate court correctly cited the principles
enunciated in People v. Aruta17[17] and Section 13, Rule 12618[18] of the Rules of Criminal
Procedure, it gravely erred when it applied Aruta to justify petitioners alleged liability under
Article 32 of the New Civil Code. They argue that Aruta does not involve Article 32 as nowhere
in the decision is there any reference to Article 32.19[19]
 Similarly, petitioners argue that being private persons, they are not covered by the
standards set forth in Aruta as the constitutional protection against illegal searches and seizures
is not meant to be invoked against private individuals.20[20]

Petitioners further argue that the search of the union office was reasonable under the
circumstances,21[21] given that the hotel owns the room where the union holds office; the
search was not without probable cause as it was conducted precisely due to reports received by
petitioners that the union office was being used as a venue for illegal activities, particularly the
sale and/or use of prohibited drugs;22[22] and the search was conducted with the consent and
in the presence of union officer Babay.23[23]

The petition fails.

Article 32 of the New Civil Code provides:

ART. 32. Any public officer or employee, or any private individual, who
directly or indirectly obstructs, defeats, violates or in any manner impedes or
 impairs any of the following rights and liberties of another person shall be liable
to the latter for damages:

xxxx

(9) The right to be secure in ones person, house, papers, and effects
against unreasonable searches and seizures;

xxxx

The indemnity shall include moral damages. Exemplary damages may

also be adjudicated. (Emphasis and underscoring supplied)

As constitutional rights, like the right to be secure in ones person, house, papers, and
effects against unreasonable search and seizures, occupy a lofty position in every civilized and
democratic community and not infrequently susceptible to abuse, their violation, whether
constituting a penal offense or not, must be guarded against. As the Code Commission noted,

xxxx

(3) Direct and open violations of the Penal Code trampling upon the
freedoms named are not so frequent as those subtle, clever and indirect ways
which do not come within the pale of the penal law. It is in these cunning devices
of suppressing or curtailing freedom, which are not criminally punishable, where
the greatest danger to democracy lies. The injured citizen will always have, under
the new Civil Code, adequate civil remedies before the courts because of the
independent civil action, even in those instances where the act or omission
complained of does not constitute a criminal offense.24[24]

The Code Commission thus deemed it necessary to hold not only public officers but also
private individuals civilly liable for violation of rights enumerated in Article 32 of the Civil Code.
That is why it is not even necessary that the defendant under this Article should have acted with
malice or bad faith, otherwise, it would defeat its main purpose, which is the effective protection
of individual rights.25[25] It suffices that there is a violation of the constitutional right of the
plaintiff.

In the present case, as priorly stated, petitioners had, by their own claim, already
received reports in late 1987 of illegal activities allegedly undertaken in the union office and
Maniego conducted surveillance of the union officers. Yet, in the morning of January 11, 1988,
petitioners and their companions barged into and searched the union office without a search
warrant, despite ample time for them to obtain one, and notwithstanding the objection of Babay.

The course taken by petitioners and company stinks in illegality, it not falling under any
of the exceptional instances when a warrantless search is allowed by law. Petitioners violation
of individual respondents constitutional right against unreasonable search thus furnishes the
basis for the award of damages under Article 32 of the Civil Code.

In MHP Garments, Inc. v. Court of Appeals,26[26] a case for unfair competition, the
progression of time between the receipt of the information and the raid of the stores of the
therein private respondents premises showed that there was sufficient time for the therein
petitioners and the raiding party to apply for a judicial warrant. Yet they did not apply for one.
They went on with the raid and seized the goods of the therein private respondents. Under the
circumstances, this court upheld the grant of damages by the trial court to the therein private
respondents for violation of their right against unreasonable search and seizure.
 As for petitioners contention that property rights justified the search of the union office,
the same does not lie. For respondents, being the lawful occupants of the office, had the right to
raise the question of validity of the search and seizure.27[27]

Neither does petitioners claim that they were allowed by union officer Babay to enter the
union office lie. Babays account of why petitioners and company went to the union office to
consider Panlilios suggestion to settle the mauling incident is more credible, as is his claim that
he protested the search, and even asked if they were armed with a search warrant.

While it is doctrinal that the right against unreasonable searches and seizures is a
personal right which may be waived expressly or impliedly, a waiver by implication cannot be
presumed. There must be clear and convincing evidence of an actual intention to relinquish it to
constitute a waiver thereof.28[28] There must be proof of the following: (a) that the right exists;
(b) that the person involved had knowledge, either actual or constructive, of the existence of
such right; and, (c) that the said person had an actual intention to relinquish the right. In other
words, the waiver must be voluntarily, knowingly and intelligently made. The evidence shows
otherwise, however.

That a violation of ones constitutional right against illegal search and seizure can be the
basis for the recovery of damages under Article 32 in relation to Article 2219(6) and (10) of the
New Civil Code, there is no doubt. Since the complaint29[29] filed before the trial court was for
damages due to malicious prosecution and violation of constitutional right against illegal search
and seizure, the award by the trial court of actual damages to respondent union was correctly
set aside by the appellate court.

Article 32 speaks of an officer or employee or person directly or indirectly responsible for

the violation of the constitutional rights and liberties of another. Hence, it is not the actor alone
who must answer for damages under Article 32; the person indirectly responsible has also to
answer for the damages or injury caused to the aggrieved party.30[30] Such being the case,
petitioners, together with Maniego and Villanueva, the ones who orchestrated the illegal search,
are jointly and severally liable for actual, moral and exemplary damages to herein individual
respondents in accordance with the earlier-quoted pertinent provision of Article 32, in relation to
Article 2219(6) and (10) of the Civil Code which provides:

Art. 2219. Moral damages may be recovered in the following and

analogous cases:

xxxx

(6) Illegal search;

xxxx

(10) Acts and action referred to in Articles 21, 26, 27, 28, 29, 30,
32, 34 and 35. (Emphasis supplied)

Petitioners magnify the citation by the appellate court of Aruta allegedly to justify [their]
liability under Article 32 of the Civil Code, which petitioners allege is erroneous as said case did
not involve Article 32.
 Aruta was, however, cited by the appellate court, not to justify petitioners liability but to
rule out the legality of the search in the union office as the search was not done as an incident
of a lawful arrest.

Petitioners cite People v. Marti31[31] to support their thesis that the determinants in the
validity of the constitutional right against searches and seizure cannot be invoked against
private individuals.

But the ruling of this Court in Marti, a criminal case, bears on the issue of whether an act
of a private individual, allegedly in violation of [ones] constitutional rights, [may] be invoked
against the State. In other words, the issue in that case was whether the evidence obtained by a
private person, acting in a private capacity without the participation of the State, is admissible.

The issue in the present civil case, however, is whether respondent individual can
recover damages for violation of constitutional rights. As reflected above, Article 32, in relation
to Article 2219(6) and (10) of the Civil Code, allows so.

WHEREFORE, in light of the foregoing ratiocinations, the petition is DENIED.

G.R. No. 196251 July 9, 2014

OLIVAREZ REALTY CORPORATION and DR. PABLO R. OLIVAREZ, Petitioner,

vs.
BENJAMIN CASTILLO, Respondent.
 DECISION

LEONEN, J.:

Trial may be dispensed with and a summary judgment rendered if the case can be resolved
judiciously by plain resort to the pleadings, affidavits, depositions, and other papers filed by the
parties.

This is a petition for review on certiorari1 of the Court of Appeals' decision2 dated July 20, 2010
and resolution3 dated March 18, 2011 in CAG.R. CV No. 91244.

The facts as established from the pleadings of the parties are as follows:

Benjamin Castillo was the registered owner of a 346,918-squaremeter parcel of land located in
Laurel, Batangas, covered by Transfer Certificate of Title No. T-19972.4 The Philippine Tourism
Authority allegedly claimed ownership of the sameparcel of land based on Transfer Certificate of
Title No. T-18493.5 On April 5, 2000, Castillo and Olivarez Realty Corporation, represented by
Dr. Pablo R. Olivarez, entered into a contract of conditional sale6 over the property. Under the
deed of conditional sale, Castillo agreed to sell his property to Olivarez Realty Corporation for
₱19,080,490.00. Olivarez Realty Corporation agreed toa down payment of ₱5,000,000.00, to be
paid according to the following schedule:

DATE AMOUNT
April 8, 2000 500,000.00
May 8, 2000 500,000.00
May 16, 2000 500,000.00
1,000,000.0
June 8, 2000
0
July 8, 2000 500,000.00
August 8, 2000 500,000.00
September 8, 2000 500,000.00
October 8, 2000 500,000.00
November 8, 2000 500,000.00 7

As to the balance of ₱14,080,490.00, Olivarez Realty Corporation agreed to pay in 30 equal

monthly installments every eighth day of the month beginning in the month that the parties
would receive a decision voiding the Philippine Tourism Authority’s title to the property.8 Under
the deed of conditional sale, Olivarez RealtyCorporation shall file the action against the
Philippine Tourism Authority "with the full assistance of [Castillo]."9 Paragraph C of the deed of
conditional sale provides:

C. [Olivarez Realty Corporation] assumes the responsibility of taking necessary legal action thru
Court to have the claim/title TCT T-18493 of Philippine Tourism Authority over the above-
described property be nullified and voided; with the full assistance of [Castillo][.]10
Should the action against the Philippine Tourism Authority be denied, Castillo agreed to
reimburse all the amounts paid by Olivarez Realty Corporation. Paragraph D of the deed of
conditional sale provides:

D. In the event that the Court denie[s] the petition against the Philippine Tourism Authority, all
sums received by [Castillo] shall be reimbursed to [Olivarez Realty Corporation] without
interest[.]11

As to the "legitimate tenants" occupying the property, Olivarez Realty Corporation undertook to
pay them "disturbance compensation," while Castillo undertook to clear the land of the tenants
within six months from the signing of the deed of conditional sale. Should Castillo fail to clear
the land within six months, Olivarez Realty Corporation may suspend its monthly down payment
until the tenants vacate the property. Paragraphs E and F of the deed of conditional sale
provide: E. That [Olivarez Realty Corporation] shall pay the disturbance compensation to
legitimate agricultural tenants and fishermen occupants which in no case shall exceed ONE
MILLION FIVE HUNDRED THOUSAND (₱1,500,000.00) PESOS. Said amountshall not form
part of the purchase price. In excess of this amount, all claims shall be for the account of
[Castillo];

F. That [Castillo] shall clear the land of [the] legitimate tenants within a period of six (6) months
upon signing of this Contract, and in case [Castillo] fails, [Olivarez Realty Corporation] shall
have the right to suspend the monthly down payment until such time that the tenants [move] out
of the land[.]12

The parties agreed thatOlivarez Realty Corporation may immediately occupy the property upon
signing of the deed of conditional sale. Should the contract be cancelled, Olivarez
RealtyCorporation agreed to return the property’s possession to Castillo and forfeit all the
improvements it may have introduced on the property. Paragraph I of the deed of conditional
sale states:

I. Immediately upon signing thisContract, [Olivarez Realty Corporation] shall be entitled to

occupy, possess and develop the subject property. In case this Contract is canceled [sic], any
improvement introduced by [the corporation] on the property shall be forfeited in favor of
[Castillo][.]13

On September 2, 2004, Castillo filed a complaint14 against Olivarez Realty Corporation and Dr.
Olivarez with the Regional Trial Court of Tanauan City, Batangas.

Castillo alleged that Dr. Olivarez convinced him into selling his property to Olivarez Realty
Corporation on the representation that the corporation shall be responsible in clearing the
property of the tenants and in paying them disturbance compensation. He further alleged that
Dr. Olivarez solely prepared the deed of conditional sale and that he was made to sign the
contract with its terms "not adequately explained [to him] in Tagalog."15

After the parties had signed the deed of conditional sale, Olivarez Realty Corporation
immediately took possession of the property. However, the corporation only paid 2,500,000.00
ofthe purchase price. Contrary to the agreement, the corporation did not file any action against
the Philippine Tourism Authority to void the latter’s title to the property. The corporation neither
cleared the land of the tenants nor paid them disturbance compensation. Despite demand,
Olivarez Realty Corporation refused to fully pay the purchase price.16
Arguing that Olivarez Realty Corporation committed substantial breach of the contract of
conditional sale and that the deed of conditional sale was a contract of adhesion, Castillo
prayed for rescission of contract under Article 1191 of the Civil Code of the Philippines. He
further prayed that Olivarez Realty Corporation and Dr. Olivarez be made solidarily liable for
moral damages, exemplary damages, attorney’s fees, and costs of suit.17

In their answer,18 Olivarez Realty Corporation and Dr. Olivarez admitted that the corporation
only paid ₱2,500,000.00 ofthe purchase price. In their defense, defendants alleged that Castillo
failed to "fully assist"19 the corporation in filing an action against the Philippine Tourism
Authority. Neither did Castillo clear the property of the tenants within six months from the
signing of the deed of conditional sale. Thus, according to defendants, the corporation had "all
the legal right to withhold the subsequent payments to [fully pay] the purchase price."20

Olivarez Realty Corporation and Dr. Olivarez prayedthat Castillo’s complaint be dismissed. By
way of compulsory counterclaim, they prayed for ₱100,000.00 litigation expenses and
₱50,000.00 attorney’s fees.21

Castillo replied to the counterclaim,22 arguing that Olivarez Realty Corporation and Dr. Olivarez
had no right to litigation expenses and attorney’s fees. According to Castillo, the deed of
conditional sale clearly states that the corporation "assume[d] the responsibility of taking
necessary legal action"23 against the Philippine Tourism Authority, yet the corporation did not
file any case. Also, the corporation did not pay the tenants disturbance compensation. For the
corporation’s failure to fully pay the purchase price, Castillo claimed that hehad "all the right to
pray for the rescission of the [contract],"24 and he "should not be held liable . . . for any alleged
damages by way of litigation expenses and attorney’s fees."25

On January 10, 2005, Castillo filed a request for admission,26 requesting Dr. Olivarez to admit
under oath the genuineness of the deed of conditional sale and Transfer Certificate of Title No.
T-19972. He likewise requested Dr. Olivarez to admit the truth of the following factual
allegations:

1. That Dr. Olivarez is the president of Olivarez Realty Corporation;

2. That Dr. Olivarez offered to purchase the parcel of land from Castillo and that he
undertook to clear the property of the tenants and file the court action to void the
Philippine Tourism Authority’s title to the property;

3. That Dr. Olivarez caused the preparation of the deed of conditional sale;

4. That Dr. Olivarez signed the deed of conditional sale for and on behalf of Olivarez
Realty Corporation;

5. That Dr. Olivarez and the corporation did not file any action against the Philippine
Tourism Authority;

6. That Dr. Olivarez and the corporation did not pay the tenants disturbance
compensation and failed to clear the property of the tenants; and

7. That Dr. Olivarez and the corporation only paid ₱2,500,000.00 of the agreed purchase
price.27
On January 25, 2005, Dr. Olivarez and Olivarez Realty Corporation filed their objections to the
request for admission,28 stating that they "reiterate[d] the allegations [and denials] in their
[answer]."29

The trial court conducted pre-trial conference on December 17, 2005.

On March 8, 2006, Castillo filed a motion for summary judgment and/or judgment on the
pleadings.30 He argued that Olivarez Realty Corporation and Dr. Olivarez "substantially
admitted the material allegations of [his] complaint,"31 specifically:

1. That the corporation failed to fully pay the purchase price for his property;32

2. That the corporation failed to file an action to void the Philippine Tourism Authority’s
title to his property;33 and

3. That the corporation failed to clear the property of the tenants and pay them
disturbance compensation.34

Should judgment on the pleadings beimproper, Castillo argued that summary judgment may still
be rendered asthere is no genuine issue as to any material fact.35 He cited Philippine National
Bank v. Noah’s Ark Sugar Refinery36 as authority.

Castillo attached to his motion for summary judgment and/or judgment on the pleadings his
affidavit37 and the affidavit of a Marissa Magsino38 attesting to the truth of the material
allegations of his complaint.

Olivarez Realty Corporation and Dr. Olivarez opposed39 the motion for summary judgment
and/or judgment on the pleadings, arguing that the motion was "devoid of merit."40 They
reiterated their claim that the corporation withheld further payments of the purchase price
because "there ha[d] been no favorable decision voiding the title of the Philippine Tourism
Authority."41 They added that Castillo sold the property to another person and that the sale was
allegedly litigated in Quezon City.42

Considering that a title adverse to that of Castillo’s existed, Olivarez Realty Corporation and Dr.
Olivarez argued that the case should proceed to trial and Castillo be required to prove that his
title to the property is "not spurious or fake and that he had not sold his property to another
person."43

In reply to the opposition to the motion for summary judgment and/or judgment on the
pleadings,44 Castillo maintained that Olivarez Realty Corporation was responsible for the filing
of an action against the Philippine Tourism Authority. Thus, the corporation could not fault
Castillo for not suing the PhilippineTourism Authority.45 The corporation illegally withheld
payments of the purchase price.

As to the claim that the case should proceed to trial because a title adverse to his title existed,
Castillo argued that the Philippine Tourism Authority’s title covered another lot, not his
property.46
During the hearing on August 3, 2006, Olivarez Realty Corporation and Dr. Olivarez prayed that
they be given 30 days to file a supplemental memorandum on Castillo’s motion for summary
judgment and/or judgment on the pleadings.47

The trial court granted the motion. Itgave Castillo 20 days to reply to the memorandum and the
corporation and Dr. Olivarez 15 days to respond to Castillo’s reply.48

In their supplemental memorandum,49 Olivarez Realty Corporation and Dr. Olivarez argued that
there was "an obvious ambiguity"50 as to which should occur first — the payment of
disturbance compensation to the tenants or the clearing of the property of the tenants.51 This
ambiguity, according to defendants, is a genuine issue and "oughtto be threshed out in a full
blown trial."52

Olivarez Realty Corporation and Dr. Olivarez added that Castillo prayed for irreconcilable reliefs
of reformation of instrument and rescission of contract.53 Thus, Castillo’s complaint should be
dismissed.

Castillo replied54 to the memorandum, arguing that there was no genuine issue requiring trial of
the case. According to Castillo, "common sense dictates . . . that the legitimate tenants of the
[property] shall not vacate the premises without being paid any disturbance compensation . .
."55 Thus, the payment of disturbance compensation should occur first before clearing the
property of the tenants.

With respect to the other issuesraised in the supplemental memorandum, specifically, that
Castillo sold the property to another person, he argued that these issues should not be
entertained for not having been presented during pre-trial.56

In their comment on the reply memorandum,57 Olivarez Realty Corporation and Dr. Olivarez
reiterated their arguments that certain provisions of the deed of conditional sale were
ambiguous and that the complaint prayed for irreconcilable reliefs.58

As to the additional issues raised in the supplemental memorandum, defendants argued that
issues not raised and evidence not identified and premarked during pre-trial may still be raised
and presented during trial for good cause shown. Olivarez Realty Corporation and Dr. Olivarez
prayed that Castillo’s complaint be dismissed for lack of merit.59

Ruling of the trial court

The trial court found that Olivarez Realty Corporation and Dr. Olivarez’s answer "substantially
[admitted the material allegations of Castillo’s] complaint and [did] not . . . raise any genuine
issue [as to any material fact]."60

Defendants admitted that Castillo owned the parcel of land covered by Transfer Certificate of
Title No. T-19972. They likewise admitted the genuineness of the deed of conditional sale and
that the corporation only paid ₱2,500,000.00 of the agreed purchase price.61

According to the trial court, the corporation was responsible for suing the Philippine Tourism
Authority and for paying the tenants disturbance compensation. Since defendant corporation
neither filed any case nor paid the tenants disturbance compensation, the trial court ruled that
defendant corporation had no right to withhold payments from Castillo.62
As to the alleged ambiguity of paragraphs E and F of the deed of conditional sale, the trial court
ruled that Castillo and his witness, Marissa Magsino, "clearly established"63 in their affidavits
that the deed of conditional sale was a contract of adhesion. The true agreement between the
parties was that the corporation would both clear the land of the tenants and pay them
disturbance compensation.

With these findings, the trial court ruled that Olivarez Realty Corporation breached the contract
ofconditional sale.1âwphi1 In its decision64 dated April 23, 2007, the trial court ordered the
deed of conditional sale rescinded and the ₱2,500,000.00 forfeited in favor of Castillo "as
damages under Article 1191 of the Civil Code."65

The trial court declared Olivarez Realty Corporation and Dr. Olivarez solidarily liable to Castillo
for 500,000.00 as moral damages, ₱50,000.00 as exemplary damages, and ₱50,000.00 as
costs of suit.66

Ruling of the Court of Appeals

Olivarez Realty Corporation and Dr. Olivarez appealed to the Court of Appeals.67

In its decision68 dated July 20, 2010, the Court of Appeals affirmed in totothe trial court’s
decision. According to the appellate court, the trial court "did not err in its finding that there is no
genuine controversy as to the facts involved [in this case]."69 The trial court, therefore, correctly
rendered summary judgment.70

As to the trial court’s award of damages, the appellatecourt ruled that a court may award
damages through summary judgment "if the parties’ contract categorically [stipulates] the
respective obligations of the parties in case of default."71 As found by the trial court,paragraph I
of the deed of conditional sale categorically states that "in case [the deed of conditional sale] is
cancelled, any improvementintroduced by [Olivarez Realty Corporation] on the property shall be
forfeited infavor of [Castillo]."72 Considering that Olivarez Realty Corporation illegally retained
possession of the property, Castillo forewent rentto the property and "lost business
opportunities."73 The ₱2,500,000.00 down payment, according to the appellate court, shouldbe
forfeited in favor of Castillo. Moral and exemplary damages and costs ofsuit were properly
awarded.

On August 11, 2010, Olivarez RealtyCorporation and Dr. Olivarez filed their motion for
reconsideration,74 arguing that the trial court exceeded its authority in forfeiting the
₱2,500,000.00 down payment and awarding ₱500,000.00 in moral damages to Castillo. They
argued that Castillo only prayed for a total of ₱500,000.00 as actual and moral damages in his
complaint.75 Appellants prayed that the Court of Appeals "take a second hard look"76 at the
case and reconsider its decision.

In the resolution77 dated March 18, 2011, the Court of Appeals denied the motion for
reconsideration.

Proceedings before this court

Olivarez Realty Corporation and Dr. Olivarez filed their petition for review on certiorari78 with
this court. Petitionersargue that the trial court and the Court of Appeals erred in awarding
damages to Castillo. Under Section 3, Rule 35 of the 1997 Rules ofCivil Procedure, summary
judgment may be rendered except as to the amountof damages. Thus, the Court of Appeals
"violated the procedural steps in rendering summary judgment."79

Petitioners reiterate that there are genuine issues ofmaterial fact to be resolved in this case.
Thus, a full-blown trial is required, and the trial court prematurely decided the case through
summary judgment. They cite Torres v. Olivarez Realty Corporation and Dr. Pablo Olivarez,80 a
case decided by the Ninth Division of the Court of Appeals.

In Torres, Rosario Torres was the registeredowner of a parcel of land covered by Transfer
Certificate of Title No. T-19971. Under a deed of conditional sale, she sold her property to
OlivarezRealty Corporation for ₱17,345,900.00. When the corporation failed to fully pay the
purchase price, she sued for rescission of contractwith damages. In their answer, the
corporation and Dr. Olivarez argued thatthey discontinued payment because Rosario Torres
failed to clear the land of the tenants.

Similar to Castillo, Torres filed a motion for summary judgment, which the trial court granted. On
appeal, the Court of Appeals set aside the trial court’s summary judgment and remanded the
case to the trial court for further proceedings.81 The Court of Appeals ruled that the material
allegations of the complaint "were directly disputed by [the corporation and Dr. Olivarez] in their
answer"82 when they argued that they refused to pay because Torres failed to clear the land of
the tenants.

With the Court of Appeals’ decision in Torres,Olivarez Realty Corporation and Dr. Olivarez
argue that this case should likewise be remanded to the trial court for further proceedings under
the equipoise rule.

Petitioners maintain that Castillo availed himself of the irreconcilable reliefs of reformation of
instrument and rescission of contract.83 Thus, the trial court should have dismissed the case
outright.

Petitioners likewise argue that the trial court had no jurisdiction to decide the case as Castillo
failed topay the correct docket fees.84 Petitioners argue that Castillo should have paid docket
fees based on the property’s fair market value since Castillo’s complaint is a real action.85

In his comment,86 Castillo maintains that there are no genuine issues as to any material fact
inthis case. The trial court, therefore, correctly rendered summary judgment.

As to petitioners’ claim that the trial court had no jurisdiction to decide the case, Castillo argues
that he prayed for rescission of contract in his complaint. This action is incapable of pecuniary
estimation, and the Clerk of Court properly computed the docket fees based on this prayer.87
Olivarez Realty Corporation and Dr. Olivarez replied,88 reiterating their arguments in the
petition for review on certiorari.

The issues for our resolution are the following:

I. Whether the trial court erred in rendering summary judgment;

II. Whether proper docket fees were paid in this case.

 The petition lacks merit.

I
The trial court correctly rendered
summary judgment, as there were no

genuine issues of material fact in this case

Trial "is the judicial examination and determination of the issues between the parties to the
action."89 During trial, parties "present their respective evidence of their claims and
defenses."90 Parties to an action have the right "to a plenary trial of the case"91 to ensure that
they were given a right to fully present evidence on their respective claims.

There are instances, however, whentrial may be dispensed with. Under Rule 35 of the 1997
Rules of Civil Procedure, a trial court may dispense with trial and proceed to decide a case if
from the pleadings, affidavits, depositions, and other papers on file, there is no genuine issue as
to any material fact. In such a case, the judgment issued is called a summary judgment.

A motion for summary judgment is filed either by the claimant or the defending party.92 The trial
court then hears the motion for summary judgment. If indeed there are no genuine issues of
material fact, the trial court shall issue summary judgment. Section 3, Rule 35 of the 1997 Rules
of Civil Procedure provides:

SEC. 3. Motion and proceedings thereon. – The motion shall be served at least ten (10) days
beforethe time specified for the hearing. The adverse party may serve opposing affidavits,
depositions, or admission at least three (3) days before the hearing. After the hearing, the
judgment sought shall be rendered forthwith ifthe pleadings, supporting affidavits, depositions,
and admissions on file, showthat, except as to the amount of damages, there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter of
law.

An issue of material fact exists if the answer or responsive pleading filed specifically denies the
material allegations of fact set forth in the complaint or pleading. If the issue offact "requires the
presentation of evidence, it is a genuine issue of fact."93 However, if the issue "could be
resolved judiciously by plain resort"94 to the pleadings, affidavits, depositions, and other
paperson file, the issue of fact raised is sham, and the trial court may resolve the action through
summary judgment.

A summary judgment is usually distinguished from a judgment on the pleadings. Under Rule 34
of the 1997 Rules of Civil Procedure, trial may likewise be dispensed with and a case decided
through judgment on the pleadings if the answer filed fails to tender an issue or otherwise
admits the material allegations of the claimant’s pleading.95

Judgment on the pleadings is proper when the answer filed fails to tender any issue, or
otherwise admitsthe material allegations in the complaint.96 On the other hand, in a summary
judgment, the answer filed tenders issues as specific denials and affirmative defenses are
pleaded, but the issues raised are sham, fictitious, or otherwise not genuine.97

In this case, Olivarez Realty Corporation admitted that it did not fully pay the purchase price as
agreed upon inthe deed of conditional sale. As to why it withheld payments from Castillo, it set
up the following affirmative defenses: First, Castillo did not filea case to void the Philippine
Tourism Authority’s title to the property; second,Castillo did not clear the land of the tenants;
third, Castillo allegedly sold the property to a third person, and the subsequent sale is currently
being litigated beforea Quezon City court.

Considering that Olivarez RealtyCorporation and Dr. Olivarez’s answer tendered an issue,
Castillo properly availed himself of a motion for summary judgment.

However, the issues tendered by Olivarez Realty Corporation and Dr. Olivarez’s answer are not
genuine issues of material fact. These are issues that can be resolved judiciously by plain resort
to the pleadings, affidavits, depositions, and other papers on file; otherwise, these issues are
sham, fictitious, or patently unsubstantial.

Petitioner corporation refused to fully pay the purchase price because no court case was filed to
void the Philippine Tourism Authority’s title on the property. However, paragraph C of the deed
of conditional sale is clear that petitioner Olivarez Realty Corporation is responsible for initiating
court action against the Philippine Tourism Authority:

C. [Olivarez Realty Corporation] assumes the responsibility of taking necessary legal action thru
Court to have the claim/title TCT T-18493 of Philippine Tourism Authority over the above-
described property be nullified and voided; with the full assistance of [Castillo].98

Castillo’s alleged failureto "fully assist"99 the corporation in filing the case is not a defense. As
the trial court said, "how can [Castillo] assist [the corporation] when [the latter] did not file the
action [in the first place?]"100

Neither can Olivarez Realty Corporation argue that it refused to fully pay the purchase price due
to the Philippine Tourism Authority’s adverse claim on the property. The corporation knew of this
adverse claim when it entered into a contract of conditional sale. It even obligated itself under
paragraph C of the deed of conditional sale to sue the Philippine Tourism Authority. This
defense, therefore, is sham.

Contrary to petitioners’ claim, there is no "obvious ambiguity"101 as to which should occur first
— the payment of the disturbance compensation or the clearing of the land within six months
from the signing of the deed of conditional sale. The obligations must be performed
simultaneously. In this case, the parties should have coordinated to ensure that tenants on the
property were paid disturbance compensation and were made to vacate the property six months
after the signingof the deed of conditional sale.

On one hand, pure obligations, or obligations whose performance do not depend upon a future
or uncertainevent, or upon a past event unknown to the parties, are demandable at once.102
On the other hand, obligations with a resolutory period also take effect at once but terminate
upon arrival of the day certain.103

Olivarez Realty Corporation’s obligation to pay disturbance compensation is a pure obligation.

The performance of the obligation to pay disturbance compensation did not depend on any
condition. Moreover, the deed of conditional sale did not give the corporation a period to
perform the obligation. As such, the obligation to pay disturbance compensation was
demandable at once. Olivarez RealtyCorporation should have paid the tenants disturbance
compensation upon execution of the deed of conditional sale.
With respect to Castillo’s obligation to clear the land of the tenants within six months from the
signing of the contract, his obligation was an obligation with a resolutory period. The obligation
to clear the land of the tenants took effect at once, specifically, upon the parties’ signing of the
deed of conditional sale. Castillo had until October 2, 2000, six months from April 5, 2000 when
the parties signed the deed of conditional sale, to clear the land of the tenants.

Olivarez Realty Corporation, therefore, had no right to withhold payments of the purchase price.
As the trial court ruled, Olivarez Realty Corporation "can only claim non-compliance [of the
obligation to clear the land of the tenants in] October 2000."104 It said:

. . . it is clear that defendant [Olivarez Realty Corporation] should have paid the installments on
the ₱5 million downpayment up to October 8, 2000, or a total of ₱4,500,000.00. That is the
agreement because the only time that defendant [corporation] can claim non-compliance of the
condition is after October, 2000 and so it has the clear obligation topay up to the October 2000
the agreed installments. Since it paid only 2,500,000.00, then a violation of the contract has
already been committed. . . .105

The claim that Castillo sold the property to another is fictitious and was made in bad faith to
prevent the trial court from rendering summary judgment. Petitioners did not elaborate on this
defense and insisted on revealing the identity of the buyer only during trial.106 Even in their
petition for review on certiorari, petitioners never disclosed the name of this alleged buyer. Thus,
as the trial court ruled, this defense did not tender a genuine issue of fact, with the defense
"bereft of details."107

Castillo’s alleged prayer for the irreconcilable reliefs of rescission of contract and reformation of
instrument is not a ground to dismiss his complaint. A plaintiff may allege two or more claims in
the complaint alternatively or hypothetically, either in one cause of action or in separate causes
of action per Section 2, Rule 8 of the 1997 Rules of Civil Procedure.108 It is the filing of two
separatecases for each of the causes of action that is prohibited since the subsequently filed
case may be dismissed under Section 4, Rule 2 of the 1997 Rules of Civil Procedure109 on
splitting causes of action.

As demonstrated, there are no genuineissues of material fact in this case. These are issues that
can be resolved judiciously by plain resort to the pleadings, affidavits, depositions, and other
papers on file. As the trial court found, Olivarez Realty Corporation illegally withheld payments
of the purchase price. The trial court did not err in rendering summary judgment.

II
Castillo is entitled to cancel the contract
of conditional sale

Since Olivarez Realty Corporation illegally withheld payments of the purchase price, Castillo is
entitled to cancel his contract with petitioner corporation. However, we properly characterize the
parties’ contract as a contract to sell, not a contract of conditional sale.

In both contracts to sell and contracts of conditional sale, title to the property remains with the
seller until the buyer fully pays the purchase price.110 Both contracts are subject to the positive
suspensive condition of the buyer’s full payment of the purchase price.111
In a contract of conditional sale, the buyer automatically acquires title to the property upon full
payment of the purchase price.112 This transfer of title is "by operation of law without any
further act having to be performed by the seller."113 In a contract to sell, transfer of title to the
prospective buyer is not automatic.114 "The prospective seller [must] convey title to the property
[through] a deed of conditional sale."115

The distinction is important to determine the applicable laws and remedies in case a party does
not fulfill his or her obligations under the contract. In contracts of conditional sale, our laws on
sales under the Civil Code of the Philippines apply. On the other hand, contracts to sell are not
governed by our law on sales116 but by the Civil Code provisions on conditional obligations.

Specifically, Article 1191 of the Civil Code on the right to rescind reciprocal obligations does not
apply to contracts to sell.117 As this court explained in Ong v. Court of Appeals,118 failure to
fully pay the purchase price in contracts to sell is not the breach of contract under Article
1191.119 Failure to fully pay the purchase price is "merely an event which prevents the [seller’s]
obligation to convey title from acquiring binding force."120 This is because "there can be no
rescission of an obligation that is still nonexistent, the suspensive condition not having
[happened]."121

In this case, Castillo reserved his title to the property and undertook to execute a deed of
absolute sale upon Olivarez Realty Corporation’s full payment of the purchase price.122 Since
Castillo still has to execute a deed of absolute sale to Olivarez RealtyCorporation upon full
payment of the purchase price, the transfer of title is notautomatic. The contract in this case is a
contract to sell.

As this case involves a contract tosell, Article 1191 of the Civil Code of the Philippines does not
apply. The contract to sell is instead cancelled, and the parties shall stand as if the obligation to
sell never existed.123

Olivarez Realty Corporation shall return the possession of the property to Castillo. Any
improvement that Olivarez Realty Corporation may have introduced on the property shall be
forfeited in favor of Castillo per paragraph I of the deed of conditional sale:

I. Immediately upon signing thisContract, [Olivarez Realty Corporation] shall be entitled to

occupy, possess and develop the subject property. In case this Contract is cancelled, any
improvement introduced by [Olivarez Realty Corporation] on the property shall be forfeited in
favor of [Castillo.]124

As for prospective sellers, thiscourt generally orders the reimbursement of the installments
paidfor the property when setting aside contracts to sell.125 This is true especially ifthe
property’s possession has not been delivered to the prospective buyer prior to the transfer of
title.

In this case, however, Castillo delivered the possession of the property to Olivarez Realty
Corporation prior to the transfer of title. We cannot order the reimbursement of the installments
paid.

In Gomez v. Court of Appeals,126 the City of Manila and Luisa Gomez entered into a contract to
sell over a parcel of land. The city delivered the property’s possession to Gomez. She fully paid
the purchase price for the property but violated the terms of the contract to sell by renting out
the property to other persons. This court set aside the contract to sell for her violation of the
terms of the contract to sell. It ordered the installments paid forfeited in favor of the City of
Manila "as reasonable compensation for [Gomez’s] use of the [property]"127 for eight years.

In this case, Olivarez Realty Corporation failed to fully pay the purchase price for the property. It
only paid ₱2,500,000.00 out of the ₱19,080,490.00 agreed purchase price. Worse, petitioner
corporation has been in possession of Castillo’s property for 14 years since May 5, 2000 and
has not paid for its use of the property.

Similar to the ruling in Gomez, we order the ₱2,500,000.00 forfeited in favor of Castillo as
reasonable compensation for Olivarez Realty Corporation’s use of the property.

III
Olivarez Realty Corporation is liable for
moral and exemplary damages and
attorney’s fees

We note that the trial court erred in rendering summary judgment on the amount of damages.
Under Section 3, Rule 35 of the 1997 Rules of Civil Procedure, summary judgment may be
rendered, except as to the amount of damages.

In this case, the trial court erred in forfeiting the ₱2,500,000.00 in favor of Castillo as damages
under Article 1191 of the Civil Code of the Philippines. As discussed, there is nobreach of
contract under Article 1191 in this case.

The trial court likewise erred inrendering summary judgment on the amount of moral and
exemplary damages and attorney’s fees.

Nonetheless, we hold that Castillois entitled to moral damages, exemplary damages, and
attorney’s fees.

Moral damages may be awarded in case the claimant experienced physical suffering, mental
anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury.128

As for exemplary damages, they are awarded in addition to moral damages by way of example
or correction for the public good.129 Specifically in contracts, exemplary damages may be
awarded if the defendant acted in a wanton, fraudulent,reckless, oppressive, or malevolent
manner.130

Under the deed of conditional sale, Olivarez Realty Corporation may only suspend the monthly
down payment in case Castillo fails to clear the land of the tenants six months from the signing
of the instrument. Yet, even before the sixth month arrived, Olivarez Realty Corporation withheld
payments for Castillo’s property. It evenused as a defense the fact that no case was filed
against the PhilippineTourism Authority when, under the deed of conditional sale, Olivarez
Realty Corporation was clearly responsible for initiating action against the Philippine Tourism
Authority. These are oppressive and malevolent acts, and we find Castillo entitled to
₱500,000.00 moral damages and ₱50,000.00 exemplary damages:
Plaintiff Castillo is entitled to moral damages because of the evident bad faith exhibited by
defendants in dealing with him regarding the sale of his lot to defendant [Olivarez Realty
Corporation]. He suffered much prejudice due to the failure of defendants to pay him the
balance of purchase price which he expected touse for his needs which caused him wounded
feelings, sorrow, mental anxiety and sleepless nights for which defendants should pay
₱500,000.00 as moral damages more than six (6) years had elapsed and defendants illegally
and unfairly failed and refused to pay their legal obligations to plaintiff, unjustly taking advantage
of a poor uneducated man like plaintiff causing much sorrow and financial difficulties. Moral
damages in favor of plaintiff is clearly justified . . . [Castillo] is also entitled to ₱50,000.00 as
exemplary damages to serve as a deterrent to other parties to a contract to religiously comply
with their prestations under the contract.131

We likewise agree that Castillo is entitled to attorney’s fees in addition to the exemplary
damages.132 Considering that Olivarez Realty Corporation refused to satisfy Castillo’splainly
valid, just, and demandable claim,133 the award of ₱50,000.00 as attorney’s fees is in order.
However, we find that Dr. Pablo R.Olivarez is not solidarily liable with Olivarez Realty
Corporation for the amount of damages.

Under Article 1207 of the Civil Code of the Philippines, there is solidary liability only when the
obligation states it or when the law or the nature of the obligation requires solidarity.134 In case
of corporations, they are solely liable for their obligations.135 The directors or trustees and
officers are not liable with the corporation even if it is through their acts that the corporation
incurred the obligation. This is because a corporation is separate and distinct from the persons
comprising it.136

As an exception to the rule, directors or trustees and corporate officers may be solidarily liable
with the corporation for corporate obligations if they acted "in bad faith or with gross negligence
in directing the corporate affairs."137

In this case, we find that Castillo failed to prove with preponderant evidence that it was through
Dr. Olivarez’s bad faith or gross negligence that Olivarez Realty Corporation failed to fully pay
the purchase price for the property. Dr. Olivarez’s alleged act of making Castillo sign the deed of
conditional sale without explaining to the latter the deed’s terms in Tagalog is not reason to hold
Dr. Olivarez solidarily liable with the corporation. Castillo had a choice not to sign the deed of
conditional sale. He could have asked that the deed of conditional sale be written in Tagalog.
Thus, Olivarez Realty Corporation issolely liable for the moral and exemplary damages and
attorney’s fees to Castillo.

IV
The trial court acquired jurisdiction over
Castillo’s action as he paid the correct
docket fees

Olivarez Realty Corporation and Dr. Olivarez claimed that the trial court had no jurisdiction to
take cognizance of the case. In the reply/motion to dismiss the complaint138 they filed with the
Court of Appeals, petitioners argued that Castillo failed to pay the correct amount of docket
fees. Stating that this action is a real action, petitioners argued that the docket fee Castillo paid
should have been based on the fair market value of the property. In this case, Castillo only paid
4,297.00, which is insufficient "if the real nature of the action was admitted and the fair market
value of the property was disclosed and made the basis of the amount of docket fees to be paid
to the court."139 Thus, according to petitioners, the case should be dismissed for lack of
jurisdiction.

Castillo countered that his action for rescission is an action incapable of pecuniary estimation.
Thus, the Clerk of Court of the Regional Trial Court of Tanauan City did not err in assessing the
docket fees based on his prayer.

We rule for Castillo. In De Leon v. Court of Appeals,140 this court held that an action for
rescission of contract of sale of real property is an action incapable of pecuniary estimation. In
De Leon, the action involved a real property. Nevertheless, this court held that "it is the nature of
the action as one for rescission of contract which is controlling."141 Consequently, the docket
fees to be paid shall be for actions incapableof pecuniary estimation, regardless if the claimant
may eventually recover the real property. This court said:

. . . the Court in Bautista v.Lim, held that an action for rescission of contract is one which cannot
be estimated and therefore the docket fee for its filing should be the flat amount of ₱200.00 as
then fixed in the former Rule 141, §141, §5(10). Said this Court:

We hold that Judge Dalisay did not err in considering Civil Case No. V-144 as basically one for
rescission or annulment of contract which is not susceptible of pecuniary estimation (1 Moran's
Comments on the Rules of Court, 1970 Ed, p. 55; Lapitan vs. Scandia, Inc., L-24668, July 31,
1968, 24 SCRA 479, 781-483).

Consequently, the fee for docketing it is ₱200, an amount already paid by plaintiff, now
respondent Matilda Lim.1âwphi1 (She should pay also the two pesos legal research fund fee, if
she has not paid it, as required in Section 4 of Republic Act No. 3870, the charter of the U.P.
Law Center).

Thus, although eventually the result may be the recovery of land, it is the nature of the action as
one for rescission of contract which is controlling. The Court of Appeals correctly applied these
cases to the present one. As it said:

We would like to add the observations that since the action of petitioners [private respondents]
against private respondents [petitioners] is solely for annulment or rescission which is not
susceptible of pecuniary estimation, the action should not be confused and equated with the
"value of the property" subject of the transaction; that by the very nature of the case, the
allegations, and specific prayer in the complaint, sans any prayer for recovery of money and/or
value of the transaction, or for actual or compensatory damages, the assessment and collection
of the legal fees should not be intertwined with the merits of the case and/or what may be its
end result; and that to sustain private respondents' [petitioners'] position on what the respondent
court may decide after all, then the assessment should be deferred and finally assessed only
after the court had finally decided the case, which cannot be done because the rules require
that filing fees should be based on what is alleged and prayed for in the face of the complaint
and paid upon the filing of the complaint.142

Although we discussed that there isno rescission of contract to speak of in contracts of

conditional sale, we hold that an action to cancel a contract to sell, similar to an action for
rescission of contract of sale, is an action incapable of pecuniary estimation. Like any action
incapable of pecuniary estimation, an action to cancel a contract to sell "demands an inquiry
into other factors"143 aside from the amount of money to be awarded to the claimant.
Specifically in this case, the trial court principally determined whether Olivarez Realty
Corporation failed to pay installments of the property’s purchase price as the parties agreed
upon in the deed of conditional sale. The principal natureof Castillo’s action, therefore, is
incapable of pecuniary estimation.

All told, there is no issue that the parties in this case entered into a contract to sell a parcel of
land and that Olivarez Realty Corporation failed to fully pay the installments agreed
upon.Consequently, Castillo is entitled to cancel the contract to sell.

WHEREFORE, the petition for review on certiorari is DENIED. The Court of Appeals’ decision
dated July 20, 2010 and in CA-G.R. CV No. 91244 is AFFIRMEDwith MODIFICATION.

The deed of conditional sale dated April 5, 2000 is declared CANCELLED. Petitioner Olivarez
Realty Corporation shall RETURN to respondent Benjamin Castillo the possession of the
property covered by Transfer Certificate of Title No. T-19972 together with all the improvements
that petitioner corporation introduced on the property. The amount of ₱2,500,000.00 is
FORFEITED in favor of respondent Benjamin Castillo as reasonable compensation for the use
of petitioner Olivarez Realty Corporation of the property.

Petitioner Olivarez Realty Corporation shall PAY respondent Benjamin Castillo ₱500,000.00 as
moral damages, ₱50,000.00 as exemplary damages, and ₱50,000.00 as attorney's fees with
interest at 6% per annum from the time this decision becomes final and executory until
petitioner

corporation fully pays the amount of damages.144

SO ORDERED.