UP VS DIZON(JUDGE OF RTC)

F: On August 30, 1990, the UP, through its then President Jose V. Abueva, entered into a General
Construction Agreement with respondent Stern Builders Corporation (Stern Builders), represented
by its President and General Manager Servillano dela Cruz, for the construction of the extension
building and the renovation of the College of Arts and Sciences Building in the campus of the
University of the Philippines in Los Baos (UPLB).3
In the course of the implementation of the contract, Stern Builders submitted three progress billings
corresponding to the work accomplished, but the UP paid only two of the billings. The third billing
worth P273,729.47 was not paid due to its disallowance by the Commission on Audit (COA). Despite
the lifting of the disallowance, the UP failed to pay the billing, prompting Stern Builders and dela
Cruz to sue the UP and its co-respondent officials to collect the unpaid billing and to recover various
damages.
After trial, on November 28, 2001, the RTC rendered its decision in favor of the STERN BUILDERS
awarding, among others, moral damages

I: WON STERN BUILDERS CORPORATION IS ENTITLED TO MORAL DAMAGES

R: the grant of moral damages in that manner contravened the law that permitted the recovery of
moral damages as the means to assuage "physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury." 111 The
contravention of the law was manifest considering that Stern Builders, as an artificial person, was
incapable of experiencing pain and moral sufferings.112 Assuming that in granting the substantial
amount of P 10,000,000.00 as moral damages, the RTC might have had in mind that dela Cruz had
himself suffered mental anguish and anxiety. If that was the case, then the RTC obviously
disregarded his separate and distinct personality from that of Stern Builders. 113 Moreover, his moral
and emotional sufferings as the President of Stern Builders were not the sufferings of Stern Builders.
Lastly, the RTC violated the basic principle that moral damages were not intended to enrich the
plaintiff at the expense of the defendant, but to restore the plaintiff to his status quo ante as much as
possible. Taken together, therefore, all these considerations exposed the substantial amount
of P 10,000,000.00 allowed as moral damages not only to be factually baseless and legally
indefensible, but also to be unconscionable, inequitable and unreasonable.