G.R. No.

L-37633 January 31, 1975

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
FELICISIMO MEDROSO, JR., accused-appellant.
Office of the Solicitor General Estelito P. Mendoza,
Assistant Solicitor General Eduardo C. Abaya and
Trial Attorney Josefina C. Castillo for plaintiffappellee.
Crispo B. Borja for accused-appellant.

MUOZ PALMA, J.:

The only question or issue involved in this appeal is
the correctness of the judgment rendered by the
Court of First Instance of Camarines Sur in Criminal
Case No. 403 wherein accused-appellant, Felicisimo
Medroso Jr., on a plea of guilty, was convicted of
"Homicide through reckless imprudence" and
sentenced
to suffer the penalty of, from TWO
(2) YEARS, FOUR (4) MONTHS and
ONE (1) DAY, as minimum, to SIX
(6) YEARS, as maximum, of prision
correccional and ordered to pay the
heirs of the deceased in the sum of
P12,000.00 as actual damages,
P4,000.00 as moral damages and
P4,000.00 as exemplary damages,
Philippine currency, and to pay the
cost of this proceeding. (p. 11, Rollo)
Sometime on August 6, 1971, the Provincial Fiscal
of Camarines Sur filed with the local Court of First
Instance an Information accusing the herein
appellant, Felicisimo Medroso Jr., of "Homicide
through reckless imprudence" alleged to have been
committed as follows:
That on or about the 16th of May,
1971, in the barrio of San Roque,
municipality of Bombon, province of
Camarines Sur, Philippines, and
within
the jurisdiction of this
Honorable Court, the said accused
without any license to drive motor
vehicles
issued
by
competent
authority, did then and there wilfully
and unlawfully manage and operate
a BHP dump truck bearing Plate No.
7329, S. 1969 and with BHP truck
No. 14-H3-12P and while passing
along the said barrio in a negligent,
careless and imprudent manner,
without due regard to traffic laws,

rules and regulations to prevent

accident to persons and damage to
property, caused by such negligence
and imprudence, said truck driven
and operated by him to bump and hit
one Iigo Andes thereby causing his
death. (p. 4, Rollo)
The case was called for trial on July 18, 1972, on
which date appellant with the assistance of his
counsel pleaded guilty to the charge with two
mitigating circumstances in his favor, viz: plea of
guilty and voluntary surrender, to which the
prosecuting fiscal offered no objection.
In its decision, the trial court, presided by Hon.
Delfin Vir Sunga, after appreciating the abovementioned mitigating circumstances and considering
as an aggravating circumstance the fact that
appellant drove the vehicle in question without a
license, sentenced the accused as indicated above.
Not content with the penalty imposed, accused
appealed to the Court of Appeals.
On September 19, 1973, the Appellate Court,
through its Second Division at the time, certified the
case to this Court on the ground that the appeal
covers pure questions of law.
Appellant is charged with homicide thru reckless
imprudence for which the penalty provided for in
Paragraph 6, sub-section 2 of Article 365 of the
Revised Penal Code is prision correccional in its
medium and maximum periods or from two years,
four months and one day to six years.
Appellant now contends that inasmuch as he has
two mitigating circumstances in his favor without
any aggravating circumstance, as driving without a
license is not to be considered such, he is entitled to
a penalty one degree lower than that prescribed by
law pursuant to Article 64 of the Revised Penal
Code 1 or, arresto mayor in its maximum period to
correct in its minimum period, that is, from "four
months and one day to two years, four months and
one day," and that applying the Indeterminate
Sentence Law, the trial court should have imposed a
minimum within the penalty still one degree lower,
which is arresto mayor minimum and medium
periods (1 month and 1 day to 4 months) and to a
maximum of not more than two years, four months,
and one day of prision correccional.
Appellant's proposition would indeed be correct if he
were charged with any of the offenses penalized in
the Revised Penal Code other than Article 365
thereof, But because appellant is accused under
Article 365, he is not entitled as a matter of right to
the provisions of Article 64 of the Code.

Paragraph 5 of Article 365 expressly states that in

the imposition of the penalties provided for in the
Article, the courts shall exercise their sound
discretion without regard to the rules prescribed in
Article 64. 2 The rationale of the law can be found in
the fact that in quasi-offenses penalized under
Article 365, the carelessness, imprudence or
negligence which characterizes the wrongful act
may vary from one situation to another, in nature,
extent, and resulting consequences, and in order
that there may be a fair and just application of the
penalty, the courts must have ample discretion in its
imposition, without being bound by what We may
call the mathematical formula provided for in Article
64 of the Revised Penal Code. On the basis of this
particular provision, the trial court was not bound to
apply paragraph 5 of Article 64 in the instant case
even if appellant had two mitigating circumstances
in his favor with no aggravating circumstance to
offset them.
In People vs. Agito, 1958, 103 Phil. 526, the
accused, Simplicio Agito, was charged with triple
homicide and serious physical injuries thru reckless
imprudence before the Court of First Instance of
Negros Occidental of Mindoro. He pleaded guilty and
the trial court, applying Article 365, paragraph 6,
sub-section 2 of the Revised Penal Code, sentenced
him to suffer an indeterminate penalty from one
year and one day to three years, six months and
twenty one days of prison correccional. The accused
appealed questioning the propriety of the penalty
imposed and appellant contended inter alia that the
trial court erred in not considering the mitigating
circumstance of plea of guilty so as to reduce the
penalty to a minimum period. This contention was
held by this Court to be untenable for to uphold it
would be contrary to Article 365, paragraph 5, of
the Revised Penal Code as amended by R.A. 384
which provides that "(I)n the imposition of these
penalties (referring to the penalties defined in
Article 365), the courts shall exercise their sound
discretion without regard to the rules prescribed in
Article 64." (Portion in parenthesis supplied)
In the case now before Us, the penalty for homicide
thru reckless imprudence with violation of the
Automobile Law is prision correccional in its medium
and maximum periods with a duration from two
years, four months, and one day to six years.
Applying the Indeterminate Sentence Law to which
appellant is entitled 3 the imposable penalty covers
a minimum to be taken from the penalty one degree
lower than that prescribed by law or arresto
mayor in
its
maximum
period
to prision
correccional in its minimum period, i.e. four months
and
one
day
to
two
years
and
four
months, and a maximum to be taken in turn from
the penalty prescribed for the offense the duration
of which is from two years, four months and one
day
to
six
years.
The
determination
of
the minimum and maximum termsis left entirely to
the discretion of the trial court, the exercise of

which will not be disturbed on appeal unless there is

a clear abuse. 4
The penalty imposed by the trial court is well within
the periods we have given above except for the one
dayexcess in the minimum thereof. The minimum of
the indeterminate sentence given by His Honor the
trial Judge should have been "two years and four
months of prision correccional" instead of "two
years, four months and one day", because with the
addition of one day the minimum term fell within
the range of the penalty prescribed for the offense
in contravention of the provisions of the
Indeterminate Sentence Law. On this score, there is
need to correct the minimum of the indeterminate
penalty imposed by the court a quo.
As regards the second issue raised by appellant, We
do not find any reversible error in the judgment
awarding to the heirs of the deceased P4,000.00 as
moral damages and another P4,000.00 as
exemplary damages in addition to P12,000.00
byway of actual damages.
Moral damages compensate for mental anguish,
serious anxiety and moral shock suffered by the
victim or his family as the proximate result of the
wrongful act, 5 and they are expressly recoverable
where a criminal offense result in physical injuries
as in the instant case before Us which in fact
culminated in the death of the victim. 6
In People vs. Pantoja, L-18793, Oct. 11, 1968, 25
SCRA 468, this Court fixed the sum of P12,000.00
as compensatory damages for a death caused by a
crime (Art. 2206 of the Civil Code) and it was there
stated that, in proper cases, the courts may
adjudge additional sums by way of moral damages
and exemplary damages.
The determination of the amount which would
adequately compensate the victim or his family in a
criminal case of this nature is left to the discretion
of the trial judge whose assessment will not be
disturbed on appeal unless there is a manifest
showing that the same is arbitrary or excessive, for
it has been said that "(T)here can be no exact or
uniform rule for measuring the value of a human life
and the measure of damages cannot be arrived at
by precise mathematical calculation, but the amount
recoverable depends on the particular facts and
circumstances of each case." (25 C.J.S., 1241, cited
in Alcantara vs. Surro, et al., 93 Phil. 472, 477)
With respect to the exemplary damages awarded by
the trial court, the same are justified by the fact
that the herein appellant without having been
issued by competent authority a license to drive a
motor vehicle, wilfully operated a BHP dump truck
and drove it in a negligent and careless manner as a
result of which he hit a pedestrian who died from
the injuries sustained by him. Exemplary damages
are corrective in nature and are imposed by way of

example or correction for the public good (Art.

2229, Civil Code), and the situation before Us calls
for the imposition of this kind of damages to deter
others from taking into their hands a motor vehicle
without being qualified to operate it on the
highways thereby converting the vehicle into an
instrument of death.
WHEREFORE, the appealed decision is hereby
MODIFIED in that the minimum term is reduced by
one day. The herein appellant is sentenced
therefore to an indeterminate penalty ranging from
TWO (2) YEARS and FOUR (4) MONTHS of prision
correccional as minimum to SIX (6) YEARS also
of prision correccional as maximum. In all other
respects,
the
decision
stands.
Without
pronouncement as to costs.
Castro (Chairman), Teehankee,
Esguerra, JJ., concur.

Makasiar

and

G.R. No. 128690 January 21, 1999

ABS-CBN
BROADCASTING
CORPORATION, petitioner,
vs.
HONORABLE COURT OF APPEALS, REPUBLIC
BROADCASTING CORP, VIVA PRODUCTION,
INC., and VICENTE DEL ROSARIO, respondents.

For further enlightenment, this

rejection letter dated January 06,
1992 (Exh "3" - Viva) is hereby
quoted:
6 January 1992
Dear Vic,

DAVIDE, JR., CJ.:

In this petition for review on certiorari, petitioner
ABS-CBN Broadcasting Corp. (hereafter ABS-CBN)
seeks to reverse and set aside the decision 1 of 31
October 1996 and the resolution 2 of 10 March 1997
of the Court of Appeals in CA-G.R. CV No. 44125.
The former affirmed with modification the
decision 3 of 28 April 1993 of the Regional Trial
Court (RTC) of Quezon City, Branch 80, in Civil Case
No. Q-92-12309. The latter denied the motion to
reconsider the decision of 31 October 1996.
The antecedents, as found by the RTC and adopted
by the Court of Appeals, are as follows:
In 1990, ABS-CBN and Viva executed
a Film Exhibition Agreement (Exh.
"A") whereby Viva gave ABS-CBN an
exclusive right to exhibit some Viva
films. Sometime in December 1991,
in accordance with paragraph 2.4
[sic] of said agreement stating that
.
1.4 ABS-CBN shall have the right of
first refusal to the next twenty-four
(24) Viva films for TV telecast under
such terms as may be agreed upon
by the parties hereto, provided,
however, that such right shall be
exercised by ABS-CBN from the
actual offer in writing.
Viva, through defendant Del Rosario,
offered ABS-CBN, through its vicepresident Charo Santos-Concio, a list
of three(3) film packages (36 title)
from which ABS-CBN may exercise
its right of first refusal under the
afore-said agreement (Exhs. "1" par,
2, "2," "2-A'' and "2-B"-Viva). ABSCBN, however through Mrs. Concio,
"can tick off only ten (10) titles"
(from the list) "we can purchase"
(Exh. "3" - Viva) and therefore did
not accept said list (TSN, June 8,
1992, pp. 9-10). The titles ticked off
by Mrs. Concio are not the subject of
the case at bar except the film
''Maging Sino Ka Man."

This is not a very formal business

letter I am writing to you as I would
like to express my difficulty in
recommending the purchase of the
three film packages you are offering
ABS-CBN.
From among the three packages I
can only tick off 10 titles we can
purchase. Please see attached. I
hope you will understand my
position. Most of the action pictures
in the list do not have big action
stars in the cast. They are not for
primetime. In line with this I wish to
mention that I have not scheduled
for telecast several action pictures in
out very first contract because of the
cheap production value of these
movies as well as the lack of big
action stars. As a film producer, I am
sure you understand what I am
trying to say as Viva produces only
big action pictures.
In fact, I would like to request two
(2) additional runs for these movies
as I can only schedule them in our
non-primetime slots. We have to
cover the amount that was paid for
these movies because as you very
well
know
that
non-primetime
advertising rates are very low. These
are the unaired titles in the first
contract.
1. Kontra Persa [sic].
2. Raider Platoon.
3. Underground guerillas
4. Tiger Command
5. Boy de Sabog
6. Lady Commando
7. Batang Matadero

8. Rebelyon
I hope you will consider this request
of mine.
The other dramatic films have been
offered to us before and have been
rejected because of the ruling of
MTRCB to have them aired at 9:00
p.m. due to their very adult themes.
As for the 10 titles I have choosen
[sic] from the 3 packages please
consider including all the other Viva
movies produced last year. I have
quite an attractive offer to make.
Thanking you and with my warmest
regards.(Signed)Charo
SantosConcio
On February 27, 1992, defendant Del
Rosario approached ABS-CBN's Ms.
Concio, with a list consisting of 52
original movie titles (i.e. not yet
aired on television) including the 14
titles subject of the present case, as
well as 104 re-runs (previously aired
on television) from which ABS-CBN
may choose another 52 titles, as a
total of 156 titles, proposing to sell
to ABS-CBN airing rights over this
package of 52 originals and 52 reruns for P60,000,000.00 of which
P30,000,000.00 will be in cash and
P30,000,000.00 worth of television
spots (Exh. "4" to "4-C" Viva; "9"
-Viva).
On April 2, 1992, defendant Del
Rosario
and
ABS-CBN
general
manager, Eugenio Lopez III, met at
the Tamarind Grill Restaurant in
Quezon City to discuss the package
proposal of Viva. What transpired in
that lunch meeting is the subject of
conflicting
versions.
Mr.
Lopez
testified that he and Mr. Del Rosario
allegedly agreed that ABS-CRN was
granted exclusive film rights to
fourteen (14) films for a total
consideration of P36 million; that he
allegedly put this agreement as to
the price and number of films in a
"napkin'' and signed it and gave it to
Mr. Del Rosario (Exh. D; TSN, pp. 2426, 77-78, June 8, 1992). On the
other hand, Del Rosario denied
having made any agreement with
Lopez regarding the 14 Viva films;
denied the existence of a napkin in

which Lopez wrote something; and

insisted that what he and Lopez
discussed at the lunch meeting was
Viva's film package offer of 104 films
(52 originals and 52 re-runs) for a
total price of P60 million. Mr. Lopez
promising [sic]to make a counter
proposal which came in the form of a
proposal contract Annex "C" of the
complaint (Exh. "1"- Viva; Exh. "C" ABS-CBN).
On April 06, 1992, Del Rosario and
Mr. Graciano Gozon of RBS Senior
vice-president for Finance discussed
the terms and conditions of Viva's
offer to sell the 104 films, after the
rejection of the same package by
ABS-CBN.
On April 07, 1992, defendant Del
Rosario
received
through
his
secretary, a handwritten note from
Ms. Concio, (Exh. "5" - Viva), which
reads: "Here's the draft of the
contract. I hope you find everything
in order," to which was attached a
draft exhibition agreement (Exh. "C''ABS-CBN; Exh. "9" - Viva, p. 3) a
counter-proposal covering 53 films,
52 of which came from the list sent
by defendant Del Rosario and one
film was added by Ms. Concio, for a
consideration of P35 million. Exhibit
"C" provides that ABS-CBN is
granted films right to 53 films and
contains a right of first refusal to
"1992 Viva Films." The said counter
proposal was however rejected by
Viva's Board of Directors [in the]
evening of the same day, April 7,
1992, as Viva would not sell anything
less than the package of 104 films
for P60 million pesos (Exh. "9" Viva), and such rejection was relayed
to Ms. Concio.
On April 29, 1992, after the rejection
of ABS-CBN and following several
negotiations and meetings defendant
Del Rosario and Viva's President
Teresita Cruz, in consideration of P60
million, signed a letter of agreement
dated April 24, 1992. granting RBS
the exclusive right to air 104 Vivaproduced and/or acquired films (Exh.
"7-A" - RBS; Exh. "4" - RBS)
including the fourteen (14) films
subject of the present case. 4

On 27 May 1992, ABS-CBN filed before the RTC a

complaint for specific performance with a prayer for
a writ of preliminary injunction and/or temporary
restraining order against private respondents
Republic
Broadcasting
Corporation 5 (hereafter
RBS ), Viva Production (hereafter VIVA), and
Vicente Del Rosario. The complaint was docketed as
Civil Case No. Q-92-12309.
On 27 May 1992, RTC issued a temporary
restraining order 6 enjoining private respondents
from proceeding with the airing, broadcasting, and
televising of the fourteen VIVA films subject of the
controversy, starting with the film Maging Sino Ka
Man, which was scheduled to be shown on private
respondents RBS' channel 7 at seven o'clock in the
evening of said date.
On 17 June 1992, after appropriate proceedings,
the
RTC
issued
an
order 7 directing the issuance of a writ of
preliminary injunction upon ABS-CBN's posting of
P35 million bond. ABS-CBN moved for the reduction
of the bond, 8 while private respondents moved for
reconsideration of the order and offered to put up a
counterbound. 9
In the meantime, private respondents filed separate
answers with counterclaim. 10 RBS also set up a
cross-claim against VIVA..
On 3 August 1992, the RTC issued an
order 11 dissolving the writ of preliminary injunction
upon the posting by RBS of a P30 million
counterbond to answer for whatever damages ABSCBN might suffer by virtue of such dissolution.
However, it reduced petitioner's injunction bond to
P15 million as a condition precedent for the
reinstatement of the writ of preliminary injunction
should private respondents be unable to post a
counterbond.
At the pre-trial 12 on 6 August 1992, the parties,
upon suggestion of the court, agreed to explore the
possibility of an amicable settlement. In the
meantime, RBS prayed for and was granted
reasonable time within which to put up a P30 million
counterbond in the event that no settlement would
be reached.
As the parties failed to enter into an amicable
settlement RBS posted on 1 October 1992 a
counterbond, which the RTC approved in its Order of
15 October 1992. 13
On 19 October 1992, ABS-CBN filed a motion for
reconsideration 14 of the 3 August and 15 October
1992 Orders, which RBS opposed. 15

On 29 October 1992, the RTC conducted a pretrial. 16

Pending resolution of its motion for reconsideration,
ABS-CBN filed with the Court of Appeals a
petition 17challenging the RTC's Orders of 3 August
and 15 October 1992 and praying for the issuance
of a writ of preliminary injunction to enjoin the RTC
from enforcing said orders. The case was docketed
as CA-G.R. SP No. 29300.
On 3 November 1992, the Court of Appeals issued a
temporary restraining order 18 to enjoin the airing,
broadcasting, and televising of any or all of the
films involved in the controversy.
On 18 December 1992, the Court of Appeals
promulgated a decision 19 dismissing the petition in
CA -G.R. No. 29300 for being premature. ABS-CBN
challenged the dismissal in a petition for review filed
with this Court on 19 January 1993, which was
docketed as G.R. No. 108363.
In the meantime the RTC received the evidence for
the parties in Civil Case No. Q-192-1209.
Thereafter, on 28 April 1993, it rendered a
decision 20 in favor of RBS and VIVA and against
ABS-CBN disposing as follows:
WHEREFORE, under cool reflection and prescinding
from the foregoing, judgments is rendered in favor
of defendants and against the plaintiff.
(1) The complaint is hereby dismissed;
(2) Plaintiff ABS-CBN is ordered to pay defendant
RBS the following:
a) P107,727.00, the amount of premium paid by
RBS to the surety which issued defendant RBS's
bond to lift the injunction;
b) P191,843.00 for the amount of print
advertisement for "Maging Sino Ka Man" in various
newspapers;
c) Attorney's fees in the amount of P1 million;
d) P5 million as and by way of moral damages;
e) P5 million as and by way of exemplary damages;
(3) For defendant VIVA, plaintiff ABS-CBN is
ordered to pay P212,000.00 by way of reasonable
attorney's fees.
(4) The cross-claim of defendant RBS against
defendant VIVA is dismissed.

(5) Plaintiff to pay the costs.

According to the RTC, there was no meeting of
minds on the price and terms of the offer. The
alleged agreement between Lopez III and Del
Rosario was subject to the approval of the VIVA
Board of Directors, and said agreement was
disapproved during the meeting of the Board on 7
April 1992. Hence, there was no basis for ABSCBN's demand that VIVA signed the 1992 Film
Exhibition Agreement. Furthermore, the right of first
refusal under the 1990 Film Exhibition Agreement
had previously been exercised per Ms. Concio's
letter to Del Rosario ticking off ten titles acceptable
to them, which would have made the 1992
agreement an entirely new contract.
On 21 June 1993, this Court denied 21 ABS-CBN's
petition for review in G.R. No. 108363, as no
reversible error was committed by the Court of
Appeals in its challenged decision and the case had
"become moot and academic in view of the
dismissal of the main action by the court a quo in its
decision" of 28 April 1993.
Aggrieved by the RTC's decision, ABS-CBN appealed
to the Court of Appeals claiming that there was a
perfected contract between ABS-CBN and VIVA
granting ABS-CBN the exclusive right to exhibit the
subject films. Private respondents VIVA and Del
Rosario also appealed seeking moral and exemplary
damages and additional attorney's fees.
In its decision of 31 October 1996, the Court of
Appeals agreed with the RTC that the contract
between ABS-CBN and VIVA had not been
perfected, absent the approval by the VIVA Board of
Directors of whatever Del Rosario, it's agent, might
have agreed with Lopez III. The appellate court did
not even believe ABS-CBN's evidence that Lopez III
actually wrote down such an agreement on a
"napkin," as the same was never produced in court.
It likewise rejected ABS-CBN's insistence on its right
of first refusal and ratiocinated as follows:
As regards the matter of right of first
refusal, it may be true that a Film
Exhibition Agreement was entered
into between Appellant ABS-CBN and
appellant VIVA under Exhibit "A" in
1990, and that parag. 1.4 thereof
provides:
1.4 ABS-CBN shall have the right of first refusal to
the next twenty-four (24) VIVA films for TV telecast
under such terms as may be agreed upon by the
parties hereto, provided, however, that such right
shall be exercised by ABS-CBN within a period of
fifteen (15) days from the actual offer in writing
(Records, p. 14).

[H]owever, it is very clear that said

right of first refusal in favor of ABSCBN shall still be subject to such
terms as may be agreed upon by the
parties thereto, and that the said
right shall be exercised by ABS-CBN
within fifteen (15) days from the
actual offer in writing.
Said parag. 1.4 of the agreement
Exhibit "A" on the right of first
refusal did not fix the price of the
film right to the twenty-four (24)
films, nor did it specify the terms
thereof. The same are still left to be
agreed upon by the parties.
In the instant case, ABS-CBN's letter
of rejection Exhibit 3 (Records, p.
89) stated that it can only tick off ten
(10) films, and the draft contract
Exhibit "C" accepted only fourteen
(14) films, while parag. 1.4 of Exhibit
"A'' speaks of the next twenty-four
(24) films.
The offer of V1VA was sometime in
December 1991 (Exhibits 2, 2-A. 2B; Records, pp. 86-88; Decision, p.
11, Records, p. 1150), when the first
list of VIVA films was sent by Mr. Del
Rosario to ABS-CBN. The Vice
President of ABS-CBN, Ms. Charo
Santos-Concio, sent a letter dated
January 6, 1992 (Exhibit 3, Records,
p. 89) where ABS-CBN exercised its
right of refusal by rejecting the offer
of VIVA.. As aptly observed by the
trial court, with the said letter of Mrs.
Concio of January 6, 1992, ABS-CBN
had lost its right of first refusal. And
even if We reckon the fifteen (15)
day period from February 27, 1992
(Exhibit 4 to 4-C) when another list
was sent to ABS-CBN after the letter
of Mrs. Concio, still the fifteen (15)
day period within which ABS-CBN
shall exercise its right of first refusal
has already expired. 22
Accordingly, respondent court sustained the award
of actual damages consisting in the cost of print
advertisements and the premium payments for the
counterbond, there being adequate proof of the
pecuniary loss which RBS had suffered as a result of
the filing of the complaint by ABS-CBN. As to the
award of moral damages, the Court of Appeals
found reasonable basis therefor, holding that RBS's
reputation was debased by the filing of the
complaint in Civil Case No. Q-92-12309 and by the
non-showing of the film "Maging Sino Ka Man."

Respondent court also held that exemplary

damages were correctly imposed by way of example
or correction for the public good in view of the filing
of the complaint despite petitioner's knowledge that
the contract with VIVA had not been perfected, It
also upheld the award of attorney's fees, reasoning
that with ABS-CBN's act of instituting Civil Case No,
Q-92-1209, RBS was "unnecessarily forced to
litigate." The appellate court, however, reduced the
awards of moral damages to P2 million, exemplary
damages to P2 million, and attorney's fees to P500,
000.00.
On the other hand, respondent Court of Appeals
denied VIVA and Del Rosario's appeal because it
was "RBS and not VIVA which was actually
prejudiced when the complaint was filed by ABSCBN."
Its motion for reconsideration having been denied,
ABS-CBN filed the petition in this case, contending
that the Court of Appeals gravely erred in
I
. . . RULING THAT THERE WAS NO
PERFECTED CONTRACT BETWEEN
PETITIONER
AND
PRIVATE
RESPONDENT
VIVA
NOTWITHSTANDING
PREPONDERANCE
OF
EVIDENCE
ADDUCED BY PETITIONER TO THE
CONTRARY.
II
. . . IN AWARDING ACTUAL AND
COMPENSATORY DAMAGES IN FAVOR
OF PRIVATE RESPONDENT RBS.
III
. . . IN AWARDING MORAL AND
EXEMPLARY DAMAGES IN FAVOR OF
PRIVATE RESPONDENT RBS.
IV
. . . IN AWARDING ATTORNEY'S FEES
IN FAVOR OF RBS.
ABS-CBN claims that it had yet to fully exercise its
right of first refusal over twenty-four titles under
the 1990 Film Exhibition Agreement, as it had
chosen only ten titles from the first list. It insists
that we give credence to Lopez's testimony that he
and Del Rosario met at the Tamarind Grill
Restaurant, discussed the terms and conditions of
the second list (the 1992 Film Exhibition
Agreement) and upon agreement thereon, wrote

the same on a paper napkin. It also asserts that the

contract has already been effective, as the elements
thereof, namely, consent, object, and consideration
were established. It then concludes that the Court
of Appeals' pronouncements were not supported by
law and jurisprudence, as per our decision of 1
December 1995 in Limketkai Sons Milling, Inc. v.
Court of Appeals, 23 which cited Toyota Shaw, Inc.
v. Court of Appeals, 24 Ang Yu Asuncion v. Court of
Appeals, 25 andVillonco
Realty
Company
v.
Bormaheco. Inc. 26
Anent the actual damages awarded to RBS, ABSCBN disavows liability therefor. RBS spent for the
premium on the counterbond of its own volition in
order to negate the injunction issued by the trial
court after the parties had ventilated their
respective positions during the hearings for the
purpose. The filing of the counterbond was an
option available to RBS, but it can hardly be argued
that ABS-CBN compelled RBS to incur such
expense. Besides, RBS had another available
option, i.e., move for the dissolution or the
injunction; or if it was determined to put up a
counterbond, it could have presented a cash bond.
Furthermore under Article 2203 of the Civil Code,
the party suffering loss or injury is also required to
exercise the diligence of a good father of a family to
minimize the damages resulting from the act or
omission.
As
regards
the
cost
of
print
advertisements,
RBS
had
not
convincingly
established that this was a loss attributable to the
non showing "Maging Sino Ka Man"; on the
contrary, it was brought out during trial that with or
without the case or the injunction, RBS would have
spent such an amount to generate interest in the
film.
ABS-CBN further contends that there was no clear
basis for the awards of moral and exemplary
damages. The controversy involving ABS-CBN and
RBS did not in any way originate from business
transaction between them. The claims for such
damages did not arise from any contractual dealings
or from specific acts committed by ABS-CBN against
RBS that may be characterized as wanton,
fraudulent, or reckless; they arose by virtue only of
the filing of the complaint, An award of moral and
exemplary damages is not warranted where the
record is bereft of any proof that a party acted
maliciously or in bad faith in filing an action. 27 In
any case, free resort to courts for redress of wrongs
is a matter of public policy. The law recognizes the
right of every one to sue for that which he honestly
believes to be his right without fear of standing trial
for damages where by lack of sufficient evidence,
legal technicalities, or a different interpretation of
the laws on the matter, the case would lose
ground. 28 One who makes use of his own legal right
does no injury. 29 If damage results front the filing
of
the
complaint,
it
is damnum
absque

injuria. 30 Besides, moral damages are generally not

awarded in favor of a juridical person, unless it
enjoys a good reputation that was debased by the
offending party resulting in social humiliation. 31

awarded in cases of abuse of rights even if the act

done is not illicit and there is abuse of rights were
plaintiff institutes and action purely for the purpose
of harassing or prejudicing the defendant.

As regards the award of attorney's fees, ABS-CBN

maintains that the same had no factual, legal, or
equitable justification. In sustaining the trial court's
award, the Court of Appeals acted in clear disregard
of
the
doctrines
laid
down
in Buan
v. Camaganacan 32 that the text of the decision
should state the reason why attorney's fees are
being awarded; otherwise, the award should be
disallowed. Besides, no bad faith has been imputed
on, much less proved as having been committed by,
ABS-CBN. It has been held that "where no sufficient
showing of bad faith would be reflected in a party' s
persistence in a case other than an erroneous
conviction of the righteousness of his cause,
attorney's fees shall not be recovered as cost." 33

In support of its stand that a juridical entity can

recover moral and exemplary damages, private
respondents RBScited People v. Manero, 35 where it
was stated that such entity may recover moral and
exemplary damages if it has a good reputation that
is debased resulting in social humiliation. it then
ratiocinates; thus:

On the other hand, RBS asserts that there was no

perfected contract between ABS-CBN and VIVA
absent any meeting of minds between them
regarding the object and consideration of the
alleged contract. It affirms that the ABS-CBN's claim
of a right of first refusal was correctly rejected by
the trial court. RBS insist the premium it had paid
for the counterbond constituted a pecuniary loss
upon which it may recover. It was obliged to put up
the counterbound due to the injunction procured by
ABS-CBN. Since the trial court found that ABS-CBN
had no cause of action or valid claim against RBS
and, therefore not entitled to the writ of injunction,
RBS could recover from ABS-CBN the premium paid
on the counterbond. Contrary to the claim of ABSCBN, the cash bond would prove to be more
expensive, as the loss would be equivalent to the
cost of money RBS would forego in case the P30
million came from its funds or was borrowed from
banks.
RBS likewise asserts that it was entitled to the cost
of advertisements for the cancelled showing of the
film "Maging Sino Ka Man" because the print
advertisements were put out to announce the
showing on a particular day and hour on Channel
7, i.e., in its entirety at one time, not a series to be
shown on a periodic basis. Hence, the print
advertisement were good and relevant for the
particular date showing, and since the film could not
be shown on that particular date and hour because
of
the
injunction,
the
expenses
for
the
advertisements had gone to waste.
As regards moral and exemplary damages, RBS
asserts that ABS-CBN filed the case and secured
injunctions purely for the purpose of harassing and
prejudicing RBS. Pursuant then to Article 19 and 21
of the Civil Code, ABS-CBN must be held liable for
such damages. Citing Tolentino, 34 damages may be

There can be no doubt that RBS'

reputation has been debased by
ABS-CBN's acts in this case. When
RBS was not able to fulfill its
commitment to the viewing public to
show the film "Maging Sino Ka Man"
on the scheduled dates and times
(and on two occasions that RBS
advertised),
it
suffered
serious
embarrassment
and
social
humiliation. When the showing was
canceled, late viewers called up RBS'
offices and subjected RBS to verbal
abuse
("Announce
kayo
nang
announce,
hindi
ninyo
naman
ilalabas," "nanloloko yata kayo")
(Exh. 3-RBS, par. 3). This alone was
not something RBS brought upon
itself. it was exactly what ABS-CBN
had planned to happen.
The amount of moral and exemplary
damages cannot be said to be
excessive. Two reasons justify the
amount of the award.
The first is that the humiliation
suffered by RBS is national extent.
RBS operations as a broadcasting
company is [sic] nationwide. Its
clientele, like that of ABS-CBN,
consists of those who own and watch
television. It is not an exaggeration
to state, and it is a matter of judicial
notice that almost every other
person in the country watches
television. The humiliation suffered
by RBS is multiplied by the number
of televiewers who had anticipated
the showing of the film "Maging Sino
Ka Man" on May 28 and November 3,
1992 but did not see it owing to the
cancellation. Added to this are the
advertisers
who
had
placed
commercial spots for the telecast and
to whom RBS had a commitment in
consideration of the placement to

show the film in the dates and times

specified.
The second is that it is a competitor
that caused RBS to suffer the
humiliation. The humiliation and
injury are far greater in degree when
caused by an entity whose ultimate
business
objective
is
to
lure
customers (viewers in this case)
away from the competition. 36
For their part, VIVA and Vicente del Rosario contend
that the findings of fact of the trial court and the
Court of Appeals do not support ABS-CBN's claim
that there was a perfected contract. Such factual
findings can no longer be disturbed in this petition
for review under Rule 45, as only questions of law
can be raised, not questions of fact. On the issue of
damages and attorneys fees, they adopted the
arguments of RBS.
The key issues for our consideration are (1) whether
there was a perfected contract between VIVA and
ABS-CBN, and (2) whether RBS is entitled to
damages and attorney's fees. It may be noted that
the award of attorney's fees of P212,000 in favor of
VIVA is not assigned as another error.
I.
The first issue should be resolved against ABS-CBN.
A contract is a meeting of minds between two
persons whereby one binds himself to give
something or to render some service to
another 37 for a consideration. there is no contract
unless the following requisites concur: (1) consent
of the contracting parties; (2) object certain which
is the subject of the contract; and (3) cause of the
obligation, which is established. 38 A contract
undergoes three stages:
(a)
preparation, conception, or
generation, which is the period of
negotiation and bargaining, ending at
the moment of agreement of the
parties;
(b) perfection or birth of the
contract, which is the moment when
the parties come to agree on the
terms of the contract; and
(c) consummation or death, which is
the fulfillment or performance of the
terms agreed upon in the contract. 39
Contracts that are consensual in nature are
perfected upon mere meeting of the minds, Once
there is concurrence between the offer and the

acceptance upon the subject matter, consideration,

and terms of payment a contract is produced. The
offer must be certain. To convert the offer into a
contract, the acceptance must be absolute and must
not qualify the terms of the offer; it must be plain,
unequivocal, unconditional, and without variance of
any sort from the proposal. A qualified acceptance,
or one that involves a new proposal, constitutes a
counter-offer and is a rejection of the original offer.
Consequently, when something is desired which is
not exactly what is proposed in the offer, such
acceptance is not sufficient to generate consent
because any modification or variation from the
terms of the offer annuls the offer. 40
When Mr. Del Rosario of VIVA met with Mr. Lopez of
ABS-CBN at the Tamarind Grill on 2 April 1992 to
discuss the package of films, said package of 104
VIVA films was VIVA's offer to ABS-CBN to enter
into a new Film Exhibition Agreement. But ABSCBN, sent, through Ms. Concio, a counter-proposal
in the form of a draft contract proposing exhibition
of 53 films for a consideration of P35 million. This
counter-proposal could be nothing less than the
counter-offer of Mr. Lopez during his conference
with Del Rosario at Tamarind Grill Restaurant.
Clearly, there was no acceptance of VIVA's offer, for
it was met by a counter-offer which substantially
varied the terms of the offer.
ABS-CBN's reliance in Limketkai Sons Milling, Inc.
v. Court
of
Appeals 41 and Villonco
Realty
Company
v. Bormaheco, Inc., 42 is misplaced. In these cases,
it was held that an acceptance may contain a
request for certain changes in the terms of the offer
and yet be a binding acceptance as long as "it is
clear that the meaning of the acceptance is
positively and unequivocally to accept the offer,
whether such request is granted or not." This ruling
was, however, reversed in the resolution of 29
March 1996, 43 which ruled that the acceptance of
all offer must be unqualified and absolute, i.e., it
"must be identical in all respects with that of the
offer so as to produce consent or meeting of the
minds."
On the other hand, in Villonco, cited in Limketkai,
the alleged changes in the revised counter-offer
were not material but merely clarificatory of what
had previously been agreed upon. It cited the
statement in Stuart v.Franklin Life Insurance
Co. 44 that "a vendor's change in a phrase of the
offer to purchase, which change does not essentially
change the terms of the offer, does not amount to a
rejection of the offer and the tender of a counteroffer." 45However, when any of the elements of the
contract is modified upon acceptance, such
alteration amounts to a counter-offer.

In the case at bar, ABS-CBN made no unqualified

acceptance of VIVA's offer. Hence, they underwent a
period of bargaining. ABS-CBN then formalized its
counter-proposals or counter-offer in a draft
contract, VIVA through its Board of Directors,
rejected such counter-offer, Even if it be
conceded arguendo that Del Rosario had accepted
the counter-offer, the acceptance did not bind VIVA,
as there was no proof whatsoever that Del Rosario
had the specific authority to do so.
Under
Corporation
Code, 46 unless
otherwise
provided by said Code, corporate powers, such as
the power; to enter into contracts; are exercised by
the Board of Directors. However, the Board may
delegate such powers to either an executive
committee or officials or contracted managers. The
delegation, except for the executive committee,
must be for specific purposes, 47 Delegation to
officers makes the latter agents of the corporation;
accordingly, the general rules of agency as to the
bindings
effects
of
their
acts
would
apply. 48 For such officers to be deemed fully clothed
by the corporation to exercise a power of the Board,
the latter must specially authorize them to do so.
That Del Rosario did not have the authority to
accept ABS-CBN's counter-offer was best evidenced
by his submission of the draft contract to VIVA's
Board of Directors for the latter's approval. In any
event, there was between Del Rosario and Lopez III
no meeting of minds. The following findings of the
trial court are instructive:
A number of considerations militate
against ABS-CBN's claim that a
contract was perfected at that lunch
meeting on April 02, 1992 at the
Tamarind Grill.
FIRST, Mr. Lopez claimed that what
was agreed upon at the Tamarind
Grill referred to the price and the
number of films, which he wrote on a
napkin.
However,
Exhibit
"C"
contains numerous provisions which,
were not discussed at the Tamarind
Grill, if Lopez testimony was to be
believed nor could they have been
physically written on a napkin. There
was even doubt as to whether it was
a paper napkin or a cloth napkin. In
short what were written in Exhibit
"C''
were
not
discussed,
and
therefore could not have been
agreed upon, by the parties. How
then could this court compel the
parties to sign Exhibit "C" when the
provisions
thereof
were
not
previously agreed upon?

SECOND, Mr. Lopez claimed that

what was agreed upon as the subject
matter of the contract was 14 films.
The complaint in fact prays for
delivery of 14 films. But Exhibit "C"
mentions 53 films as its subject
matter. Which is which If Exhibits "C"
reflected the true intent of the
parties, then ABS-CBN's claim for 14
films in its complaint is false or if
what it alleged in the complaint is
true, then Exhibit "C" did not reflect
what was agreed upon by the
parties. This underscores the fact
that there was no meeting of the
minds as to the subject matter of the
contracts,
so
as
to
preclude
perfection thereof. For settled is the
rule that there can be no contract
where there is no object which is its
subject matter (Art. 1318, NCC).
THIRD, Mr. Lopez [sic] answer to
question 29 of his affidavit testimony
(Exh. "D") states:
We were able to reach an agreement. VIVA
gave us the exclusive license to show these fourteen
(14) films, and we agreed to pay Viva the amount
of P16,050,000.00 as well as grant Viva commercial
slots worth P19,950,000.00. We had already
earmarked this P16, 050,000.00.
which gives a total consideration of
P36 million (P19,950,000.00 plus
P16,050,000.00.
equals
P36,000,000.00).
On cross-examination
testified:

Mr.

Lopez

Q. What was written in this napkin?

A. The total price, the breakdown the known Viva
movies, the 7 blockbuster movies and the other 7
Viva movies because the price was broken down
accordingly. The none [sic] Viva and the seven other
Viva movies and the sharing between the cash
portion and the concerned spot portion in the total
amount of P35 million pesos.
Now, which is which? P36 million or P35 million?
This weakens ABS-CBN's claim.
FOURTH. Mrs. Concio, testifying for ABS-CBN stated
that she transmitted Exhibit "C" to Mr. Del Rosario
with a handwritten note, describing said Exhibit "C"
as a "draft." (Exh. "5" - Viva; tsn pp. 23-24 June
08, 1992). The said draft has a well defined
meaning.

Since Exhibit "C" is only a draft, or a tentative,

provisional or preparatory writing prepared for
discussion, the terms and conditions thereof could
not have been previously agreed upon by ABS-CBN
and Viva Exhibit "C'' could not therefore legally bind
Viva, not having agreed thereto. In fact, Ms. Concio
admitted that the terms and conditions embodied in
Exhibit "C" were prepared by ABS-CBN's lawyers
and there was no discussion on said terms and
conditions. . . .
As the parties had not yet discussed the proposed
terms and conditions in Exhibit "C," and there was
no evidence whatsoever that Viva agreed to the
terms and conditions thereof, said document cannot
be a binding contract. The fact that Viva refused to
sign Exhibit "C" reveals only two [sic] well that it did
not agree on its terms and conditions, and this
court has no authority to compel Viva to agree
thereto.
FIFTH. Mr. Lopez understand [sic] that what he and
Mr. Del Rosario agreed upon at the Tamarind Grill
was only provisional, in the sense that it was
subject to approval by the Board of Directors of
Viva. He testified:
Q. Now, Mr. Witness, and after that Tamarind
meeting ... the second meeting wherein you claimed
that you have the meeting of the minds between
you and Mr. Vic del Rosario, what happened?
A. Vic Del Rosario was supposed to call us up and
tell us specifically the result of the discussion with
the Board of Directors.
Q. And you are referring to the so-called agreement
which you wrote in [sic] a piece of paper?
A. Yes, sir.
Q. So, he was going to forward that to the board of
Directors for approval?
A. Yes, sir. (Tsn, pp. 42-43, June 8, 1992)
Q. Did Mr. Del Rosario tell you that he will submit it
to his Board for approval?
A. Yes, sir. (Tsn, p. 69, June 8, 1992).
The above testimony of Mr. Lopez
shows beyond doubt that he knew
Mr. Del Rosario had no authority to
bind Viva to a contract with ABS-CBN
until and unless its Board of
Directors approved it. The complaint,
in fact, alleges that Mr. Del Rosario
"is the Executive Producer of
defendant
Viva"
which
"is
a

corporation." (par. 2, complaint). As

a mere agent of Viva, Del Rosario
could not bind Viva unless what he
did is ratified by its Board of
Directors. (Vicente vs. Geraldez, 52
SCRA 210; Arnold vs. Willets and
Paterson, 44 Phil. 634). As a mere
agent, recognized as such by
plaintiff, Del Rosario could not be
held liable jointly and severally with
Viva and his inclusion as party
defendant has no legal basis.
(Salonga vs. Warner Barner [sic] ,
COLTA , 88 Phil. 125; Salmon vs.
Tan, 36 Phil. 556).
The testimony of Mr. Lopez and the
allegations in the complaint are clear
admissions that what was supposed
to have been agreed upon at the
Tamarind Grill between Mr. Lopez and
Del Rosario was not a binding
agreement. It is as it should be
because corporate power to enter
into a contract is lodged in the Board
of Directors. (Sec. 23, Corporation
Code). Without such board approval
by
the
Viva
board,
whatever
agreement Lopez and Del Rosario
arrived at could not ripen into a valid
contract binding upon Viva (Yao Ka
Sin Trading vs. Court of Appeals, 209
SCRA 763). The evidence adduced
shows that the Board of Directors of
Viva rejected Exhibit "C" and insisted
that the film package for 140 films
be maintained (Exh. "7-1" - Viva ). 49
The contention that ABS-CBN had yet to fully
exercise its right of first refusal over twenty-four
films under the 1990 Film Exhibition Agreement and
that the meeting between Lopez and Del Rosario
was a continuation of said previous contract is
untenable. As observed by the trial court, ABS-CBN
right of first refusal had already been exercised
when Ms. Concio wrote to VIVA ticking off ten films,
Thus:
[T]he subsequent negotiation with
ABS-CBN two (2) months after this
letter was sent, was for an entirely
different package. Ms. Concio herself
admitted on cross-examination to
having used or exercised the right of
first refusal. She stated that the list
was not acceptable and was indeed
not accepted by ABS-CBN, (TSN,
June 8, 1992, pp. 8-10). Even Mr.
Lopez himself admitted that the right
of the first refusal may have been
already exercised by Ms. Concio (as

she had). (TSN, June 8, 1992, pp.

71-75). Del Rosario himself knew
and understand [sic] that ABS-CBN
has lost its rights of the first refusal
when his list of 36 titles were
rejected (Tsn, June 9, 1992, pp. 1011) 50
II
However, we find for ABS-CBN on the issue of
damages. We shall first take up actual damages.
Chapter 2, Title XVIII, Book IV of the Civil Code is
the specific law on actual or compensatory
damages. Except as provided by law or by
stipulation, one is entitled to compensation for
actual damages only for such pecuniary loss
suffered by him as he has duly proved. 51 The
indemnification shall comprehend not only the value
of the loss suffered, but also that of the profits that
the obligee failed to obtain. 52 In contracts and
quasi-contracts the damages which may be awarded
are dependent on whether the obligor acted with
good faith or otherwise, It case of good faith, the
damages recoverable are those which are the
natural and probable consequences of the breach of
the obligation and which the parties have foreseen
or could have reasonably foreseen at the time of the
constitution of the obligation. If the obligor acted
with fraud, bad faith, malice, or wanton attitude, he
shall be responsible for all damages which may be
reasonably attributed to the non-performance of the
obligation. 53 In crimes and quasi-delicts, the
defendant shall be liable for all damages which are
the natural and probable consequences of the act or
omission complained of, whether or not such
damages has been foreseen or could have
reasonably been foreseen by the defendant. 54
Actual damages may likewise be recovered for loss
or impairment of earning capacity in cases of
temporary or permanent personal injury, or for
injury to the plaintiff's business standing or
commercial credit. 55
The claim of RBS for actual damages did not arise
from contract, quasi-contract, delict, or quasi-delict.
It arose from the fact of filing of the complaint
despite ABS-CBN's alleged knowledge of lack of
cause of action. Thus paragraph 12 of RBS's Answer
with Counterclaim and Cross-claim under the
heading COUNTERCLAIM specifically alleges:
12. ABS-CBN filed the complaint
knowing fully well that it has no
cause of action RBS. As a result
thereof,
RBS
suffered
actual
damages
in
the
amount
of
P6,621,195.32. 56

Needless to state the award of actual damages

cannot be comprehended under the above law on
actual damages. RBS could only probably take
refuge under Articles 19, 20, and 21 of the Civil
Code, which read as follows:
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 tile same.
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.
It may further be observed that in cases where a
writ of preliminary injunction is issued, the damages
which the defendant may suffer by reason of the
writ are recoverable from the injunctive bond. 57 In
this case, ABS-CBN had not yet filed the required
bond; as a matter of fact, it asked for reduction of
the bond and even went to the Court of Appeals to
challenge the order on the matter, Clearly then, it
was not necessary for RBS to file a counterbond.
Hence, ABS-CBN cannot be held responsible for the
premium RBS paid for the counterbond.
Neither could ABS-CBN be liable for the print
advertisements for "Maging Sino Ka Man" for lack of
sufficient legal basis. The RTC issued a temporary
restraining order and later, a writ of preliminary
injunction on the basis of its determination that
there existed sufficient ground for the issuance
thereof. Notably, the RTC did not dissolve the
injunction on the ground of lack of legal and factual
basis, but because of the plea of RBS that it be
allowed to put up a counterbond.
As regards attorney's fees, the law is clear that in
the absence of stipulation, attorney's fees may be
recovered as actual or compensatory damages
under any of the circumstances provided for in
Article 2208 of the Civil Code. 58
The general rule is that attorney's fees cannot be
recovered as part of damages because of the policy
that no premium should be placed on the right to
litigate. 59 They are not to be awarded every time a
party wins a suit. The power of the court to award
attorney's fees under Article 2208 demands factual,
legal, and equitable justification. 60 Even when

claimant is compelled to litigate with third persons

or to incur expenses to protect his rights, still
attorney's fees may not be awarded where no
sufficient showing of bad faith could be reflected in
a party's persistence in a case other than erroneous
conviction of the righteousness of his cause. 61
As to moral damages the law is Section 1, Chapter
3, Title XVIII, Book IV of the Civil Code. Article
2217 thereof defines what are included in moral
damages, while Article 2219 enumerates the cases
where they may be recovered, Article 2220 provides
that moral damages may be recovered in breaches
of contract where the defendant acted fraudulently
or in bad faith. RBS's claim for moral damages could
possibly fall only under item (10) of Article 2219,
thereof which reads:
(10) Acts and actions referred to in
Articles 21, 26, 27, 28, 29, 30, 32,
34, and 35.
Moral damages are in the category of an award
designed to compensate the claimant for actual
injury suffered. and not to impose a penalty on the
wrongdoer. 62 The award is not meant to enrich the
complainant at the expense of the defendant, but to
enable the injured party to obtain means, diversion,
or amusements that will serve to obviate then moral
suffering he has undergone. It is aimed at the
restoration, within the limits of the possible, of the
spiritual status
quo
ante,
and
should
be
proportionate to the suffering inflicted. 63 Trial courts
must then guard against the award of exorbitant
damages; they should exercise balanced restrained
and measured objectivity to avoid suspicion that it
was due to passion, prejudice, or corruption on the
part of the trial court. 64
The award of moral damages cannot be granted in
favor of a corporation because, being an artificial
person and having existence only in legal
contemplation, it has no feelings, no emotions, no
senses, It cannot, therefore, experience physical
suffering and mental anguish, which call be
experienced only by one having a nervous
system. 65 The
statement
in People
v. Manero 66 and Mambulao
Lumber
Co. v. PNB 67 that a corporation may recover moral
damages if it "has a good reputation that is
debased, resulting in social humiliation" is an obiter
dictum. On this score alone the award for damages
must be set aside, since RBS is a corporation.
The basic law on exemplary damages is Section 5,
Chapter 3, Title XVIII, Book IV of the Civil Code.
These are imposed by way of example or correction
for the public good, in addition to moral, temperate,
liquidated or compensatory damages. 68 They are
recoverable in criminal cases as part of the civil
liability when the crime was committed with one or

more
aggravating
circumstances; 69 in
quasicontracts, if the defendant acted with gross
negligence;70 and in contracts and quasi-contracts,
if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner. 71
It may be reiterated that the claim of RBS against
ABS-CBN is not based on contract, quasi-contract,
delict, or quasi-delict, Hence, the claims for moral
and exemplary damages can only be based on
Articles 19, 20, and 21 of the Civil Code.
The elements of abuse of right under Article 19 are
the following: (1) the existence of a legal right or
duty, (2) which is exercised in bad faith, and (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; while 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, and (3) and it
is done with intent to injure. 72
Verily then, malice or bad faith is at the core of
Articles 19, 20, and 21. Malice or bad faith implies a
conscious and intentional design to do a wrongful
act
for
a
dishonest
purpose
or
moral
obliquity. 73 Such
must
be
substantiated
by
evidence. 74
There is no adequate proof that ABS-CBN was
inspired by malice or bad faith. It was honestly
convinced of the merits of its cause after it had
undergone serious negotiations culminating in its
formal submission of a draft contract. Settled is the
rule that the adverse result of an action does
not per se make the action wrongful and subject the
actor to damages, for the law could not have meant
to impose a penalty on the right to litigate. If
damages result from a person's exercise of a right,
it is damnum absque injuria. 75
WHEREFORE, the instant petition is GRANTED. The
challenged decision of the Court of Appeals in CAG.R. CV No, 44125 is hereby REVERSED except as
to unappealed award of attorney's fees in favor of
VIVA Productions, Inc. No pronouncement as to
costs. SO ORDERED.
G.R. No. 119380

August 19, 1999

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
FEDERICO LOPEZ @ AMBOY LOPEZ, accusedappellant.
MENDOZA, J.:

This is an appeal from the decision1 of the Regional

Trial Court of Pangasinan (Branch 52), finding
accused-appellant guilty of two counts of murder
and one count of frustrated murder and ordering
him
to
pay
a
total
of
P204,300.00
in
damages.1wphi1.nt
The
Information2 against
charged:

accused-appellant

That on or about the 15th day of

November, 1991, in the evening, at
Brgy. Nancalabasaan, municipality of
Umingan, province of Pangasinan,
New Republic of the Philippines, and
within
the jurisdiction of this
Honorable Court, the above-named
accused together with one John Doe,
whose identity has not yet been
established, armed with a short
firearm, with intent to kill, with
treachery and evident premeditation,
did
then
and
there
willfully,
unlawfully and feloniously attack,
assault and shoot ROGELIO SELDERA
and
RODOLFO
PADAPAT
which
caused their immediate death and on
the
same
occasion
and
with
treachery and evident premeditation
wound MARIO SELDERA on his
breast to the damage and prejudice
of the heirs of Rogelio Seldera and
Rodolfo Padapat and also to the
damage and prejudice of said Mario
Seldera.
The prosecution presented evidence showing the
following: At around 6:00 in the evening of
November 15, 1991, Mario Seldera, 11, his father
Rogelio Seldera, and his cousin Rodolfo Padapat
worked in the riceland of a certain Lagula in
Barangay Nancalabasaan, Umingan, Pangasinan. It
was harvest time and the three were hired to
bundle the palays stalks which had been cut. As it
was a moonlit night, the three worked in the field
until around 9:00 when they started for home
taking a trail alongside the Banila river. The trail is
about two feet wide only, and so the three walked
along the trail single file with Rogelio, being the
oldest, leading the way, followed by his son Mario
and by Rodolfo who was last. As they reached a
sloping portion in the trail, accused-appellant
Federico Lopez appeared armed with a shotgun.
Accused-appellant had a companion, a dark man.
He was unarmed.3Without uttering a word, accusedappellant fired at the three, who slumped forward,
face down. Accused-appellant's companion went
near the bodies of the victims and rolled them over
with his foot. Satisfied that the victims were dead,
accused-appellant and his companion left.4

However, Mario, the youngest in the group, was not

killed, although he had been wounded in the back.
As soon as accused-appellant and his companion
had left, Mario stood up and, crying, he walked to
the house of his uncle, Alfredo Padapat, the father
of Rodolfo, and reported the matter. He decided not
to go home as accused-appellant and his companion
went in the direction of their house. Mario's mother
was fetched from their house and told what had
happened to Rogelio and Rodolfo. The three then
reported the incident to the barangay captain who
lost no time in accompanying them to the police in
Umingan, Pangasinan.5
Mario was investigated by CPL Jose Almerol.
Afterwards, he was taken to the Umingan Medicare
Hospital where he was treated by Dr. Suller-Santos.
The boy suffered three gunshot wounds on the
back, right side, each wound measuring about .5 x
1 cm. The wounds were located vertically, the first
about three centimeters from the second and the
latter about two centimeters from the third. 6 Dr.
Santos issued a medical certification (Exh. E) and
referred Mario to the Eastern Pangasinan District
Hospital for x-ray examination.
Mario positively identified accused-appellant as the
assailant. He testified that accused-appellant wore a
white, long-sleeved shirt, blue jeans and white
slippers, while his companion had a black t-shirt,
black jeans and brown slippers on.7 He was able to
recognize accused-appellant and notice the type
and color of the latter's clothes and those of the
latter's companions because the moon was brightly
shining. He knew accused-appellant very well,
because the latter used to frequent their house in
Nancalabasaan to play cards with his father. In
addition, Mario used to buy cigarettes from
accused-appellant's store. As to the gun used, he
stated that it was similar to those used by security
guards. When asked whether his father and
accused-appellant had a quarrel on November 15,
1991, Mario said he did not know.8
Dr. Thelma C. Busto, the rural health physician of
Umingan, Pangasinan, examined the bodies of
Rogelio Seldera and Rodolfo Padapat on November
16, 1991.
Dr. Busto described Rogelio's wounds as follows:9
1. Gunshot wound frontal area of
head as point of entrance with exit at
the occipital area, . . . thru and thru.
2. Multiple gunshot wounds in the
chest and neck (9).
Her post-mortem report
stated:10

on

Rodolfo

Padapat

Gunshot wound in the head right

parieted area of head as entrance,
no exit.
According to Dr. Busto's reports, the cause of death
of the victims was cerebral hemorrhage and
cardiorespiratory arrest secondary to gunshot
wounds. Testifying, she said that the gunshot
wounds were alike in size and nature. Although she
could not tell the type of firearm used nor
determine the trajectory of the wounds, she said
the wounds could have been caused by a shotgun.11
Leonida Seldera, widow of the deceased Rogelio,
and Alfredo Padapat, father of Rodolfo, testified on
the civil aspect of the case. The prosecution was
precluded from inquiring from these witnesses
about events which transpired in the evening of
November 15, 1991 because they were present
during the testimony in-chief of Mario Seldera. The
defense counsel moved for their exclusion but the
prosecution manifested that they would only testify
with regard to the civil aspect of the case.
Accused-appellant's defense was alibi. He claimed
that at around 5:00 in the afternoon of November
15, 1991, he was in the house of his uncle, Asterio
Sonaco, in Caurdanetaan, another barangay of
Umingan in Pangasinan, about three kilometers
from Nancalabasaan. He had a round of drinks with
four friends12 over a dish of dog meat. At 11:00 that
night, the party broke up and accused-appellant
went home. He claimed that it was dark that night
and that during the party, they used a lamp for
illumination.13
Accused-appellant stated that he has no previous
quarrel with the two deceased nor with Mario
Seldera. Nor had he been to the house of Rogelio
Seldera. As to the clothes he wore on the night of
November 15, 1991, he claimed he had a pair of
maong pants and a t-shirt on, though he could not
remember the color of the latter.14
On cross-examination, accused-appellant admitted
that he was known as "Amboy" Lopez and that
although a barriomate, Rodrigo Lopez, was also
called "Amboy," the latter was known more as
"Thunder" Lopez. He also said that he had a farm in
Nancalabasaan but he allegedly had not gone to the
barangay proper as he only pass by the eastern part
thereof.15
In his counter-affidavit,16 accused-appellant did not
mention anything about cooking dog meat during
the party in Asterio Sonaco's house on November
15, 1991 and that he went home at 8:00 in the
evening. Accused-appellant gave no explanation
why in his testimony in court he said he went home
at 11:00 in the evening and that they killed a dog
and made its meat into a dish.17

The defense presented Daniel Fortunato and Mario

Sonaco
to
corroborate
accused-appellant's
testimony on the events which transpired in the
evening of November 15, 1991. Daniel Fortunato
testified that he is a barangay councilman of
Caurdanetaan, Umingan, Pangasinan. He claimed
that from 4:00 in the afternoon to 11:00 in the
evening of November 15, 1991, he was with
accused-appellant in a party where there were
about thirteen18 other people, drinking gin and
eating cooked dog meat. Fortunato said he and
Mario Sonaco helped accused-appellant home as the
latter was too drunk. Accused-appellant was
allegedly received by his wife.19
On cross-examination Fortunato admitted that he
was not always watching accused-appellant during
the party and that it was possible that the latter
may have slipped out. With regard to the distance
of Caurdanetaan to the Banila river, where the
incident happened, Fortunato estimated it to be
about 1 1/2 kilometers, which can be covered in 20
minutes by walking and in about 11 minutes by
running. Fortunato testified that accused-appellant
had the same height and body build as Rodrigo
"Thunder" Lopez although the latter was darker.20
Mario Sonaco, for his part, claimed that there were
less than ten12 people present in the house of his
brother, Asterio Sonaco, in the evening of November
15, 1991. However, he corroborated Fortunato's
testimony that he and Fortunato took accusedappellant home at 11:00 o'clock that night because
the latter was drunk.22
On cross-examination, Sonaco admitted that
accused-appellant is his nephew.23 He estimated
that accused-appellant's house was less than two
kilometers from the Banila river. He reiterated that
by taking the barangay road, the distance could be
covered in 30 minutes on foot but if one runs or
uses the shorter route through the ricefields, the
travel time would be less.24
The defense also presented Juanito Costales,
barangay captain of Caurdanetaan, who testified
that around 12:00 midnight of November 15, 1991,
three policemen went to his house to inform him
that accused-appellant was a suspect in a killing in
the neighboring barangay of Nancalabasaan. He
said he accompanied the authorities to accusedappellant's house and that when the latter came
out, he smelled of liquor. When asked by the
policemen where he had been, accused-appellant
allegedly answered he had been to a drinking party
held that afternoon. Apparently finding nothing
unusual, Costales and the policemen left.25
Costales corroborated Mario Sonaco's testimony
that accused-appellant's house is less than two
kilometers from the scene of the crime. When asked

about the condition of the night on November 15,

1991, he stated that it was so dark that the
policemen had to use flashlights.26
Corroborating accused-appellant's claim that it was
pitch dark on the evening of November 15, 1991,
Lorna
Gonzales,
a
resident
of
Barangay
Nancalabasaan, whose house is about 100 meters
from the Seldera household, testified that at around
9:00 in the evening of that day, she heard some
wailing and weeping in the house of the Selderas,
and that she and her husband learned that Rogelio
Seldera had died. However, they did not go out of
their house because it was allegedly very dark, and
she was afraid that her husband might be
implicated in the killing. On cross-examination,
Gonzales disclosed that her house is surrounded by
big camachile trees. When asked whether these
could obstruct the light from the moon, she only
said: "It [was] dark, sir."27
On January 20, 1995, the trial court rendered
judgment, the dispositive portion of which reads:28
WHEREFORE, in virtue of the
foregoing
disquisitions
accused
Federico Lopez @ Amboy Lopez is
hereby declared GUILTY of the crime
of Double Murder With Frustrated
Murder beyond reasonable doubt and
is hereby sentenced to a penalty
of Reclusion Perpetua relative to the
treacherous
killing
of
Rogelio
Seldera, and to pay the heirs of the
late Seldera the sum of Fifty
Thousand Pesos (P50,000.00) as
compensatory
damages,
Thirty
Thousand (P30,000.00) as moral
damages, likewise sentences the
same accused Amboy Lopez of the
penalty of Reclusion Perpetua for the
treacherous
killing
of
Rodolfo
Padapat, and to pay the heirs of the
late Padapat the sum of Fifty
Thousand Pesos (P50,000.00) as
compensatory damages, and the
sum of Thirty Thousand Pesos
(P30,000.00) as moral damages, and
to pay civil liability or actual
expenses incurred during the wake
and burial and other expenses
incurred relative to the interment of
both deceased in the amount of
Fourteen
Thousand
Pesos
(P14,000.00) payable to the heirs of
both victims, and finally sentences
accused Amboy Lopez for the crime
of Frustrated
Homicide for
the
injuries sustained by victim Mario
Seldera, with a penalty of Prision
Mayor from six (6) years and one (1)

day to twelve (12) years, and to pay

the widow of the late Rogelio Seldera
the sum of Twenty Thousand Pesos
(P20,000.00) as moral damages, Ten
Thousand
Pesos
(P10,000.00)
exemplary damages, and P300.00 as
actual damages in the form of
medical expenses. With cost de
officio. Bailbond cancelled.
SO ORDERED.
In this appeal, accused-appellant alleges that:29
ASSIGNMENT OF ERRORS
(1) THE HONORABLE COURT ERRED
IN GIVING FULL FAITH AND CREDIT
TO THE TESTIMONY OF MARIO
[S]ELDERA;
(2)
THE
HONORABLE
[COURT]
ERRED IN NOT CONSIDERING THE
TESTIMONIES
OF
DEFENSE
WITNESSES LORNA GONZALES AND
BARANGAY
CAPTAIN
JUANITO
COSTALES AS TO THE CONDITION
OF THE NIGHT;
(3) THAT THE HONORABLE COURT
ERRED IN NOT CONSIDERING THE
DEFENSE OF ALIBI PUT UP BY THE
ACCUSED;
(4) THE HONORABLE COURT ERRED
IN
NOT
CONSIDERING
THE
EXISTENCE
OF
TWO
PERSONS
SPORTING THE NAME OF AMBOY
LOPEZ.
First. Accused-appellant questions the credibility of
Mario Seldera. It is unbelievable, he contends, that
this witness observed even minute details, such as
the length and color of the shirts worn by accusedappellant and his companion, the color of their
slippers, and the type of firearm used by accusedappellant, considering that the shooting took place
suddenly and unexpectedly.30
The contention has no merit. As the Solicitor
General points out, Mario Seldera went through a
harrowing experience. In fact, he suffered three
gunshot wounds and was given up for dead by the
assailant. The memory of the massacre was etched
deeply in his memory. As this Court has many times
held, the natural reaction of victims of criminal
violence is to strive to notice the appearance of
their assailants and observe the manner the crime
was committed.31

Indeed, Mario's statement that accused-appellant

used a shotgun in shooting him and his companions
on November 15, 1991 is confirmed by the fact that
the wounds suffered by the victims were similar to
those caused by a shotgun fired at close range.
Rogelio Seldera, who was less than three meters
away from accused-appellant, had his head
practically blown off. On his neck and chest were
nine wounds, probably caused by pellets from the
blast. Mario, who was behind his father, sustained
three vertical, relatively small wounds on the right
side of his back. The wound on Rodolfo's head, on
the other hand, although without an exit, is similar
in size to that suffered by Rogelio Seldera on the
head.
It is argued that Mario could not have recognized
accused-appellant because it was very dark on the
night of November 15, 1991.32 This is not true.
According to the Philippine Atmospheric Geophysical
and Astronomical Services Administration, there
was 60% illumination from the moon over Umingan,
Pangasinan at 9:00 in the evening of November 15,
1991. In People v.Pueblas,33 we held that a moon
disc 62% full provides sufficient illumination in
sustaining the identification of the accused and
convicting him of murder. In other cases, we held
that the illumination from the moon34 and even from
the stars35 is fair and sufficient to identify
perpetrators of crimes.
The Solicitor General observes that Mario had been
walking under the light of the moon for sometime
before the incident so that his eyes had sufficiently
adjusted to the natural illumination, so as to enable
him in identifying the accused-appellant. 36Indeed, if
accused-appellant recognized his intended victims,
there is no reason why the survivor from the
ambush could not have also recognized him.
In the alternative, it is contended that even if there
was fair illumination from the moon on the night in
question, nonetheless Mario Seldera could have
mistaken accused-appellant for Rodrigo "Thunder"
Lopez.37
Again the contention is without merit. Rodrigo
"Thunder" Lopez may also be called "Amboy" Lopez
in the barangay, but it was not by name that Mario
made his identification. In fact, Rodrigo "Thunder"
Lopez was not even a suspect in the ambush of
Mario and the latter's companions. As already
stated, Mario identified accused-appellant based on
this witness' knowledge of accused-appellant. The
latter was a frequent visitor in their house and this
witness used to buy from accused-appellant's store.
Moreover, Rodrigo Lopez is darker and shorter than
accused-appellant.
Indeed, Mario Seldera was very positive that it was
accused-appellant who shot them. He identified

accused-appellant as their assailant upon reaching

Alfredo Padapat's house. He again pointed to
accused-appellant as the person who shot them
when his mother arrived and again when they
reported the incident to the police that same night.
The rule is that identification of the accused, when
there is no improper motive for making it, should be
given full faith and credence. In the case at bar, no
reason has been shown why Mario should falsely
implicate accused-appellant.
Second. It is claimed that accused-appellant was in
his uncle's house in Caurdanetaan at the time of the
incident. The defense of alibi will be sustained
where the evidence of the prosecution is
weak.38 However, accused-appellant himself said
that Caurdanetaan is just three kilometers from
Nancalabasaan.
On
the
other
hand,
his
witnesses39 themselves testified that accusedappellant's house is less than two kilometers from
the scene of the crime and that the distance could
be negotiated in 30 minutes by foot and even less if
one runs. For alibi to prosper, accused-appellant
must show that it was physically impossible for him
to be at the scene of the crime at the time of its
commission.40 Thus, assuming that he was indeed at
the party in Asterio Sonaco's house, he could have
easily slipped out of the party, come back to the
group, and then be at home in time for the police to
find him there.
Moreover, as already stated, accused-appellant was
positively identified by Mario as the triggerman. It is
settled that the defense of alibi cannot prevail over
positive identification of the accused by an
eyewitness who has no improper motive to falsely
testify.41 The Court finds no reason to doubt the
veracity of Mario's testimony who was only 11 when
he witnessed the gruesome killing of his father and
cousin and barely 13 when he took the stand. He
could possibly have no other motive but to tell the
truth about what he had observed.
Accused-appellant's alibi is not only weak; it is also
filled with inconsistencies. He said in his counteraffidavit that he went home at 8:00 in the evening
of November 15, 1991, a full hour before the
shooting occurred but, in his testimony in court, he
said he went home at 11:00 in the evening. His
witnesses, Daniel Fortunato and Mario Sonaco, said
there were at least ten persons in the party at the
house of Asterio Sonaco on November 15, 1991, but
accused-appellant stated that there were only five.
The Court is convinced that it was accusedappellant who shot Mario Seldera, Rogelio Seldera,
and Rodolfo Padapat on November 15, 1991. It is
immaterial that there is no proof of motive for the
attack because this becomes significant only where
the identity of the assailant is in serious

doubt.42 But in this case, the accused has been

positively identified.
Third. The Information is formally defective as it
charged more the one offense in violation of Rule
110, 13 of the Revised Rules of Court. However,
because of his failure to file a motion to quash,
accused-appellant is deemed to have waived
objection based on the ground of duplicity.43 The
dispositive portion of the trial court's decision finds
accused-appellant guilty of "Double Murder with
Frustrated Murder," but sentences him for two
separate counts of murder and one count of
frustrated homicide. We hold that accused-appellant
was guilty of two counts of murder and one count of
attempted murder. Under Art. 48 of the Revised
Penal Code, a complex crime is committed only
"when a single act constitutes two or more grave or
less grave felonies." As the victims in this case were
successively shot by accused-appellant with a
shotgun, each shot necessarily constitutes one act.
Accused-appellant should thus be held liable for
three separate crimes.
The lower court correctly appreciated treachery as
having qualified the killing of Rogelio Seldera and
Rodolfo Padapat. The essence of treachery is the
swift and unexpected attack on an unarmed victim
without the slightest provocation on the part of the
victim.44 Here, it was clearly established that the
victims, when shot, were unarmed and were
peacefully walking along a trail when accusedappellant suddenly opened fire on them. The
swiftness of the shooting left them helpless to put
up any form of defense.
The lower court however erred in convicting
accused-appellant of frustrated homicide for the
injuries inflicted on Mario Seldera. Although it
correctly appreciated the intent to kill, which can be
inferred from the weapon used, the proximity of the
assailants and the location of the injuries, it should
have appreciated treachery in the attack. Treachery
attended the shooting not only of Rogelio Seldera
and Rodolfo Padapat but also of Mario Seldera.
But, with respect to Mario Seldera, the crime was
not frustrated, but only attempted murder. This is
the gist of our rulings in several cases. 45 For the
injuries sustained by Mario Seldera were not life
threatening. Dr. Santos, the attending physician,
certified that Mario's injuries would heal in seven
days.46 In fact, he was not confined at the hospital.
He was referred to the Eastern Pangasinan District
Hospital only for x-ray examination of his injuries.
There is no evidence that he was given further
medical attention by this hospital other than what
Dr. Santos had requested.
Fourth. Certain modification should also be made
with respect to the award of damages. The lower

court awarded P50,000.00 for compensatory

damages and P30,000.00 for moral damages to
each set of heirs of Rogelio Seldera and Rodolfo
Padapat in addition to the P14,000.00 actual
damages to be divided among them. The
P50,000.00 should be treated as civil indemnity,
which under prevailing jurisprudence,47 is fixed at
P50,000.00, to be awarded without need of further
proof other than the death of the victim. Further, in
accordance with our rulings in other cases,48 the
amount of moral damages should be increased to
P50,000.00.
With regard to the amount of actual damages,
Leonida Seldera and Alfredo Padapat testified that
they could not present any receipt for their funeral
expenses because the funeral agency refused to
issue one in view of an unpaid balance. They have
likewise allegedly lost the receipts for their joint
expenses for the wake. Under the Civil Code (Art.
2199), a party is entitled to compensation only for
such pecuniary loss suffered by him as he has duly
proved. However, under Art. 2224, temperate
damages may be recovered if it is shown that such
party suffered some pecuniary loss but the amount
thereof cannot, from the nature of the case, be
proved with certainty.49 As the heirs of the two
victims clearly incurred funeral expenses, an award
of P5,000.00 for each set of heirs by way of
temperate damages should be awarded, to be
divided equally by the heirs of Seldera and Padapat.
For the injuries sustained by Mario Seldera, the
court a quo awarded P10,000.00 moral damages,
P20,000.00 exemplary damages and P300.00 actual
damages for medical expenses. The first item
should be disallowed for lack of evidence to support
it. The second item should likewise be deleted as
under Art. 2230 of the Civil Code, exemplary
damages are awarded when the crime is committed
with one or more aggravating circumstances. There
was no aggravating circumstance in this case other
than the qualifying circumstance of treachery. As to
the actual damages of P300.00, as the prosecution
failed to present any documentary proof for such,
its award is improper. However, the amount of
P200.00 as temperate damages may be made in its
place.
Actual damages representing unearned income of
Rogelio Seldera and Alfredo Padapat should also be
awarded. Leonida Seldera testified that her husband
was 43 years old when he was killed and that he
earned P13,000.00 a year as a farmer.50On the
other hand, Alfredo Padapat testified that his son,
Rodolfo, was then 25 years old when he died and
that he was earning P5,000.00 a year also as a
farmhand.51 The formula for the computation of
unearned income is:52

net
life
earning = expectanc
cpacity
y

living
gross
expense
annual
s (50%
x
less
incom
of gross
e
annual
income)

mayor, as maximum, and to pay Mario Seldera

P200.00 as temperate damages.1wphi1.nt
SO ORDERED.

(x)
Life expectancy is determined in accordance with
the formula 53
2/3 x [80 - age of the deceased]
Accordingly, Rogelio Seldera's unearned income is:
2[80 - 43]
x

x P13,000 P6,500
3

24.67 x P6,500

P160,355

Rodolfo Padapat's unearned income is:

2[80 - 25]
x

x P5,000 P2,500
3

36.67 x P2,500

P91,675

WHEREFORE, the decision of the Regional Trial

Court of Pangasinan (Branch 52) is AFFIRMED with
the following modifications:
1. For the death of Rogelio Seldera, accusedappellant is found guilty of murder and is sentenced
to reclusion perpetua and to pay the heirs of the
deceased Rogelio Seldera the amount of P50,000.00
as indemnity, P50,000.00 as moral damages,
P5,000.00 as temperate damages, and P160,355.00
as unearned income.
2. For the death of Rodolfo Padapat, accusedappellant is found guilty of murder and is sentenced
to reclusion perpetua and to pay the heirs of the
deceased Rodolfo Padapat the amounts of
P50,000.00 as civil indemnity, P50,000.00 as moral
damages, P5,000.00 as temperate damages, and
P91,675.00 as unearned income.
3. For the injuries of Mario Seldera, accusedappellant is found guilty of attempted murder and is
sentenced to 4 years and 2 months of prision
correccional, as minimum, to 10 years of prision

G.R. No. 121203

April 12, 2000

THE PEOPLE OF THE PHILIPPINES, plaintiff and

appellee,
vs.
DOMINADOR
ASPIRAS alias "BOY", accusedappellant.

QUISUMBING, J.:
This is an appeal from the decision 1 dated April 24,
1995 of the Regional Trial Court of Urdaneta,
Pangasinan, Branch 47 in Criminal Case No. U6553, convicting accused-appellant Dominador
Aspiras of the crime of MURDER qualified by
treachery, and sentencing him to suffer the penalty
of reclusion perpetua with all accessory penalties, to
pay the heirs of the victim P50,000.00 for
indemnity; P50,000.00 for moral and exemplary
damages;
P82,250.00
for
actual
damages;
P1,421,200.00 for expected or future income; and
to pay the costs.
At the time of the incident, appellant Dominador
Aspiras was a Police Officer 3 (PO3), assigned at
Pilar Village Detachment in Las Pias, Metro Manila.
The victim, Renato Lumague, was a crusher general
supervisor of the Northern Cement Corporation and
a supporter of NPC-KBL political party.
As gleaned from the records, the pertinent facts are
as follows:
In the evening of April 6, 1992, the NPC-KBL party
held a political rally at the plaza of Bonapal,
Bobonan, Pozorrubio, Pangasinan. The candidates
for mayor and vice mayor, Artemio R. Saldivar and
Felimon Reyes, respectively, were present together
with the eight candidates for councilors, as well as
Victor Juguilon, 2 Juanito Caballero, and Renato
Lumague, 3 who were supporters of the party. About
100 to 200 people attended the rally. Between ten
and eleven o'clock in the evening, Renato Lumague,
was on stage, delivering a speech. Suddenly, a man
appeared in front of Renato Lumague and shot him
three times. He died instantly.
On April 9, 1992, Gilda Lumague, the widow of the
victim, filed a complaint with the Philippine National
Police of Pozorrubio Pangasinan, against appellant
Dominador Aspiras for the death of her husband.
Juanito Caballero executed an affidavit to support
the complaint.
In an information dated August 11, 1992, Assistant
Provincial Prosecutor Emiliano M. Matro accused
Dominador Aspiras alias "Boy" of the crime of
murder, committed as follows:
That on or about the 6th day of April, 1992
in the evening at Sitio Bonapal, Barangay
Bobona, municipality of Pozorrubio, province
of Pangasinan, Philippines and within the
jurisdiction of this Honorable Court, the
above-named accused, with intent to kill,
being then armed with a Caliber .45 pistol,
with treachery and evident premeditation,
did then and there wilfully, unlawfully, and

feloniously shoot one Renato Lumague,

inflicting upon him multiple gunshot wounds
on the vital parts of his body, which caused
his instantaneous death, to the damage and
prejudice of the heirs of said Renato
Lumague. 4
On arraignment, accused pleaded not guilty. Trial
then ensued.
At the hearing of the case, the prosecution
presented Juanito Caballero and Victor Juguilon, the
two eyewitnesses; Dr. Francisco Llamas, the
medico-legal who conducted the autopsy; Casiano
Cabalan, the Personnel Manager of the Northern
Cement Corporation; and Geraldine Lumague, the
victim's daughter who testified in place of her
mother.
Juanito Caballero and Victor Joguilon, who were
both spectators and seated near the stage, stated
that they witnessed the shooting incident. They
categorically identified the appellant who shot the
victim, Renato Lomague, who was three (3) meters
away. The accused went directly infront of the stage
where the victim was speaking and pulled the
trigger. The accused after shooting the victim placed
his gun on his waist, raised both his hands to the
people and left the place. The victim was brought to
the hospital but died. The police arrived later on and
conducted investigation of the incident.
To rebut the version of the prosecution, appellant
presented his evidence, which included his own
testimony and those of Gabriel Viernes, Gavino
Sababan Jr., Segundino Palisoc, Maj. Lazaro Lim,
and Josephine Terry.
Appellant testified that during the whole day of April
6, 1992, he was on tour of duty with SPO2 Gavino
Sababan, Jr., and PO2 Esteban Liu as team leader
and driver, respectively, at Las Pias, Metro Manila.
He claimed that, with the other members of the
crew in Mobile Car 962, he usually stood-by at the
Shell Station, in Almanza, Las Pias, Metro Manila,
which is considered a "choke point''. Here the police
usually stood-by for police visibility. At 8:00 o'clock
in the morning of April 6, they arrived from their
detachment, about one (1) kilometer away from the
"choke point", and they proceeded to the Shell
Station to start their tour of duty. At 12:00 noon,
they took their lunch at the detachment, then they
returned to their "choke point" assignment where
they stood-by up to midnight.
Their activities on that particular date, April 6, were
recorded on a Record Book marked as Exh. "5". The
activities of the appellant on April 5 and 7, 1992
were also recorded on said book. Appellant filled up
the entries in the logbook but it was signed by the
team leader, SPO2 Gavino Sababan. These were

facts corroborated by Gavino Sababan, SPO3

Segundino Palisoc and Chief Inspector Major Lazaro
Lim, all members of the PNP, Las Pinas Police
Station, Las Pias, Metro Manila.
According to appellant, one week after April 6,
1992, he learned that he was a suspect when he
read about it in a tabloid newspaper. Appellant was
called by his superior regarding the incident and
was directed to submit an affidavit. On June 20,
1992, he was arrested and incarcerated at Camp
Bagong Diwa, Bicutan, Taguig, Metro Manila. On
September 5, 1992, he filed his bailbond and was
then released.
Witness Juanito Caballero, according to appellant,
had a motive to implicate him in the crime as they
had a fistfight the first week of January 1991, in
Pangasinan over some parcels of land owned by
Engracio Aspiras and Brigida Aspiras. Said parcels
were transferred by Caballero in his name. But
appellant and other relatives contested the transfer
made by Caballero. 5
On April 24, 1995, the trial court promulgated its
decision, disposing as follows:
WHEREFORE, the Court finds the accused
DOMINADOR
ASPIRAS alias "Boy" GUILTY beyond
reasonable doubt of the crime of MURDER qualified
by treachery and there being no mitigating or
aggravating circumstance, hereby sentences him to
suffer the penalty of RECLUSION PERPETUA with all
its accessory penalties, and for the death of the
victim RENATO LOMAGUE, to pay the heirs of said
deceased as follows:
1. PhP 50,000.00 for indemnity;

II
. . . IN GIVING CREDENCE TO THE
TESTIMONIES
OF
THE
PROSECUTION
EYEWITNESSES
DESPITE
THEIR
INCREDIBILITY AND IMPROBABILITIES. 8
III
. . . IN AWARDING VICTIM'S
INDEMNITY FOR CIVIL DAMAGES. 9

HEIRS

Primarily, appellant questions the credibility of the

witnesses. Appellant alleges that the prosecution
was not able to show beyond reasonable doubt that
he committed the crime of murder because the
judge merely based his finding of guilt on the
testimony of the two eyewitnesses, whose
testimony the judge did not hear or whose
demeanor he did not observe. We find this
proposition unacceptable. Judge Joven F. Costales,
who took over the case from Judge Romulo E.
Abalos, had the full record before him, including the
transcript of stenographic notes, which he studied.
The efficacy of a decision is not necessarily impaired
by the fact that its writer only took over from a
colleague who had earlier presided at the trial. 10
Here we take particular note of the fact that
prosecution witnesses Juanito Caballero and Victor
Joquilon testified that they personally saw the
person who shot the victim they identified the
appellant as that triggerman. Thus we find in the
transcript of stenographic notes the following
testimonies:
Direct Examination of Juanito Caballero:

2. PhP 50,000.00 for moral and exemplary

damages;

Q: Now, Mr. Witness, on April 6, 1992,

particularly in the evening thereof do you
remember where you were?

3. PhP 82,250.00 for actual damages;

A: Yes, know.

4. PhP 1,421,200.00 for expected or future

income; and

Q: Will you please tell the Honorable Court

where were you on the said date?

5. To pay the costs.

A: I was in Plaza Bonapal sir.

SO ORDERED.

Hence this appeal, wherein appellant avers that the

trial court erred:

xxx

xxx

xxx

Q: Will you please tell the Honorable Court

why were you at the Plaza Bonapal,
Pozorrubio, Pangasinan on April 6, 1992?

I
. . . IN NOT ACQUITTING THE ACCUSED OF
THE CRIME OF MURDER ON THE GROUND
OF REASONABLE DOUBT. 7

A: We hold a meeting with the mayoralty

candidate Artemio Zaldivar and his Vice
Mayor Felimon Reyes, sir.

Q: What kind of meeting was this?

Q: You said a while ago that Renato

Lomague was shot while delivering a speech
on the stage, will you please tell the
Honorable Court who shot Renato Lomague?

A: A political meeting sir.

xxx

xxx

xxx

A: It was Dominador Aspiras, sir.

Q: Up to what time did the political meeting

last, Mr. Witness?
A: The political meeting was disturbed
between 10:00 and 11:00 o'clock in the
evening when there was an unusual incident
that happened.

Q: Is he the same Dominador Aspiras who is

the accused in this case?
A: Yes sir.
Direct Examination of Victor Juguillon:

Q: Now you said that there was an unusual

incident that cause the disturbance of the
political meeting, will you please tell the
court Mr. Witness what was the unusual
incident that happened?

Q: Mr. Witness, do you remember where

were you on the evening of April 6, 1992?
A: Yes, sir.
Q: Could you tell us where where (sic) you?

A: There was someone who was shot sir.

A: As one of the candidates for councilor last

election, we were in Brgy. Bonapal, Madam.

Q: Will you tell the Honorable Court who was

that someone that was shot?
A: Renato Lomague sir.
Q: What was Renato Lomague doing before
he was shot?
A: He was delivering a speech sir.
Q: At what particular place was Renato
Lomague delivering a speech?
A: At the stage sir.

xxx

xxx

xxx

Q: You testified that you were in Bonapal,

Mr. Witness. Could you tell us where
particularly in Bonapal?
A: At the place where the meeting was being
held, Madam.
Q: What meeting was that?

Q: At the stage of the Plaza Bonapal?

A: Political meeting or rally, because that

was the time for campaigning period,
Madam.

A: Yes sir.

Q: What were you doing at that meeting?

xxx

xxx

Q: What about you in relation to the place

where Renato Lomague was delibering (sic)
a speech. Where were you?
A: I was not far away when Renato Lomague
was delivering a speech, because I was just
below the stage sir.
Q: Will you please tell the Honorable Court
how high is the stage, Mr. Witness?
A: More or less one (1) meter sir.
xxx

xxx

xxx

xxx

A: Because I was one of the candidates, that

is why I was there, Madam.
Q: While you were attending the meeting,
was there any unusual incident that
happened?
A: There was Madam.
Q: Can you tell us what this unusual incident
was?
A: There was someone who was shot at,
Madam.
Q: Do you know that person who was shot
at?

A: Yes, madam.
Q: Who was the person who was shot?
A: Renato Lumague, Madam.
Q: How do you know Renato Lumague?
A: I know Renato Lumague because he
frequents the town proper and he was an
employee of the NCC, Madam.
Q: Where were you at the time Renato
Lumague was shot?
A: I was seated at the row of chairs behind
the row when the witness Caballero was
seated and that was beside the stage,
Madam.
xxx

xxx

xxx

Q: From where you were seated, what could

you see?
A: From the place where I was seated, I
could see the people around that place and
there were may people, Madam.
Q: How far were you from the stage?
A: About two (2) meters, Madam.
Q: What was Renato Lumague doing at the
time when he got shot?
A: He was speaking at the stage, Madam.
Q: Do you know who shot Renator Lumague.
A: Yes, sir.
Q: Can you tell us who shot, Renato
Lumague?
A: Yes, sir, it was
(sic) alias Boy, Madam.

Dominador

Aspiral

Worth stressing, it has been established at the trial

that the two eyewitnesses were familiar with the
appellant. Juanito Caballero knew him for the
former grew up with the latter's family. 11 Victor
Juguillon also knew him well, for Victor used to visit
the barrio where appellant lived, while the latter
frequently visited the town proper where Victor
resided. 12 Furthermore, Victor's cousin was married
to one of the Aspirases. 13 During the actual
shooting incident, both eyewitnesses were seated at

the eastern side of the stage, where they had a

good view of the people in the basketball
court. 14 They were only about 3 to 5 meters away
from the assailant, 15 and could easily see the
assailant's face. Lastly, there were seven to eight
electric bulbs illuminating the meeting area. 16 With
the use of a sketch, marked as Exhibit "1" for the
defense, Victor showed that there was one bulb at
the middle of the stage, one at the center of the
basketball court, and "others from the center
connecting the bulb." 17 With this illumination,
considering where the victim and the assailant
were, Victor and Juanito could clearly see
appellant's face.
The autopsy conducted by Dr. Llamas, the medicolegal officer, corroborated the testimony of the two
eyewitnesses. Dr. Llamas said that there were three
bullets that entered the body of the victim. 18 This
supports the testimony of Juanito and Victor that
they heard three gun reports. 19
Dr. Llamas described the wounds of the victim and
calculated the approximate position of the assailant.
Gunshot wound no. 1 showed that the victim was
hit at the abdomen and the assailant was in front of
the former; 20 and that it was possible the bullet
split into two, one imbeded in the vertebra bone
and the other exited in wound no. 6. Gunshot
wound no. 2, showed that the bullet entered the
arm and then exited in the armpit, which caused
wound no. 3. 21 Wound no. 4, was the entrance of a
bullet which exited in the right shoulder, producing
wound no. 7. 22Wound no. 5 exited in wound no. 8
at the chest, right level of the 6th rib along the midaxillary line. 23 Wounds no. 2, 4 and 5, showed the
assailant was at the left side of the victim. 24 These
findings are in harmony with the testimony of the
two eyewitnesses that assailant was in front of the
victim when the former shot the latter; 25 that the
victim rolled down after the first shot towards the
western portion of the stage; 26 and that before
assailant fired the third shot, he took one step
forward. 27
Dr. Llamas said that he could not determine whether
the assailant fired the gun at close range because of
the absence of powder burns. However, he
estimated the distance between the assailant and
the victim to be more than 30 inches. 28 This
concurs with the testimony of Juanito and Victor
that appellant was more or less three meters away
from the victim when the former shot the latter. 29
Appellant's alibi was that on April 6, 1992, between
10 and 11 p.m., he was at Almanza Shell station,
Pilar Village, Las Pias performing his duty as police
officer. 30 To support this, he submitted the police
logbook as Exhibit "5" to show his whereabouts and
activities on the said date. Further, he presented his
fellow police officers to corroborate his testimony.

Alibi may be appreciated if the following requisites

are present: a) proof of his presence at another
place at the time of the perpetration of the offense,
and b) impossibility for him to be at the scene of
the crime. 31 But the inconsistencies between the
entries in the logbook and the testimony of the four
police officers, cast doubt on appellant's alibi. First,
SPO3 Palisoc and Major Lim testified that on April 6,
1992, between 10 and 11 p.m., they conducted an
inspection to check on the police personnel manning
the Almanza choke point.32 This was not in the
logbook. Palisoc claimed that this was entered in the
journal; 33 However, the defense did not care to
present the journal in court. Secondly, Palisoc
testified that it was standard operating procedure
for the mobile crew to make periodic calls to inform
the base of their whereabouts. If they don't call
after thirty minutes, Palisoc would make the call
himself. 34 No such calls were entered in the
logbook. Thirdly, Palisoc also testified that on the
evening of April 6, at 7 p.m., the members of Pilar
Detachment including appellant had dinner with
Barangay Councilman Arthur Tanjuanco. 35 However,
this was not entered in the logbook. If it were true
that they ad dinner, this would have appeared in the
logbook, like when the crew had lunch. 36 Instead,
we only found the following:
1600 H 10-20 400 Base for gas up
1700 H 10-20 Almanza Shell 10-12
2400 H 10-20 962 Base Situation peaceful
10-12 37
When asked to explain the above, appellant said
that at 4 o'clock in the afternoon, they were at Fort
Bonifacio to gas up. Then, from 5 o'clock up to 12
midnight, they were on stand-by at Almanza Shell.
As correctly observed by the trial court, the logbook
lacked the important details to bolster the alibi.
Most of Palisoc's testimony was based on what was
entered in the logbook by appellant. 38 It was not
based on Palisoc's personal knowledge of the
activities of the mobile crew on April 6, 1992.
In People vs. Domenden, 6 SCRA 343, we observed
that because of the close relationship and
camaraderie that developed among the accused and
his witnesses as members of the same police force,
the latter could not be expected to testify truthfully.
In our view, appellant failed to prove convincingly
that he was at the Almanza "choke point" at Las
Pias, Metro Manila, on the night of April 6, 1992.
Note that it was not physically impossible for him to
be at the scene of the crime, especially since
Pozorrubio, Pangasinan, is only 4 hours away from
Manila. Pertinently, in People vs.Mallari, G.R. No.

104891, 311 Phil. 133 (1995), this Court did not

appreciate the defense of alibi where the killing took
place in Olongapo City, though the accused was
allegedly in Baguio City.
Appellant questions the credibility and impartiality
of the two eyewitnesses: First, he avers prosecution
eyewitness Juanito Caballero was biased because
bad blood existed between them. Second, he claims
Juanito and Victor had conflicting testimonies on the
demeanor of the assailant when leaving the scene
of the crime.Third, he posits it was unbelievable
that Juanito and Victor only stayed in their benches
and did not seek any cover or protection despite
their proximate location from the assailant. Last, he
states it was improbable that no policeman arrived
after the incident.1wphi1.nt
Indeed, as testified to by appellant and
corroborated by Josephine Terry, a defense witness,
on January 1991, appellant and Juanito Caballero
had a fist fight over a piece of land. In that fight
appellant had outboxed and mauled the latter. 39 But
in People vs. Sandiangabay, 220 SCRA 551 (1993),
we held that the credibility of a witness could not be
affected by an alleged grudge where said witness
was not discredited on cross-examination. In this
case, appellant failed to touch upon the alleged
grudge, during the cross-examination of Juanito
Caballero. The matter was only mentioned by
Dominador and Josephine during their direct
examination.
Appellant also suggests that Juanito Caballero's
testimony conflicts with that of Victor Juguillon.
Juanito testified that the assailant walked
calmly, 40 while Victor said that the assailant walked
fast. 41 But this inconsistency is on minor and
insignificant
point.
Sometimes
such
minor
inconsistencies even enhance the veracity of the
testimony of a witness as they erase any suspicion
of a rehearsed declaration. 42
Likewise appellant suggests that the testimony of
the eyewitness that they only stayed in their
benches and did not seek any cover or protection,
diminishes their reliability. However, different people
react differently to a given type of situation and
there is no standard form of behavioral response
when one is confronted with a startling, strange or
frightful experience. 43 It is true that most of the
people at the political rally scampered away when
they heard the gunshots, but it was also true that
others,
like
Juanito
Caballero
and
Victor
Juguillon, 44 did not run away.
Again, appellant suggests that policemen did not
arrive at the scene of the crime. But Juanito
Caballero testified that policemen stationed at
Pozorrubio, Pangasinan, responded to his report by
going to Plaza Bonapal 45 and conducted their

investigation. Thus, all told, we cannot agree with

appellant's claim that the testimony of prosecution
witnesses lacked credibility so that he should be
acquitted. On the contrary, the wealth of details in
their testimony convince us that the appellant is the
perpetrator of the crime charged.
Lastly, we now focus on the award of civil indemnity
and other damages in favor of the heirs of the
deceased, as follows:
1. P50,000.00 for indemnity;
2. P50,000.00 for moral and exemplary
damages;
3. P82,250.00 for actual damages;
4. P1,421,200.00 for expected or future
income.
Note that with regard to actual damages, only
actual expenses duly supported by receipts may be
granted. 46Among the actual expenses allegedly
incurred by the family of the victim, only those for
funeral expenses (P17,000.00), materials for
gravestone (P1,308.00) and the funeral mass
(P250.00) were supported by receipts. Further, it
was shown that the funeral expenses were
shouldered
by
Northern
Cement
Corporation. 47Consequently, the award to the heirs
concerning actual expenses must be limited only to
those they incurred for gravestone and mass
services, amounting to P1,558.00.
As to the computation of expected or future income
by multiplying the years for which the victim could
have worked with his employer were it not for his
death (11 years) by his annual gross earnings, we
find that the correct formula for computing the loss
of earning capacity is follows: 2/3 x (80 - age of
victim at the time of death) x (reasonable portion of
the annual net income which would have been
received as support by heirs). 48 The age of the
victim at the time of his death was 48. 49 He was
receiving a monthly salary of P7,610.00, and yearly
benefits in the amount of P38,000.00. 50 Hence, his
annual gross income is P129,320.00. Net income is
50% of the gross annual income, in the absence of
proof
showing
the
deceased's
living
expenses. 51 Hence, we find that:
net earning capacity = 2/3(80 - 48) x
(P129,320 - 64,660)
= 2/3(32) x 64,660
= 21.33 x 64,660
= P1,379,197.80

The award of P1,421,200 should therefore be

reduced to P1,379,197.80 only.
Although appellant did not raise the qualifying
circumstance of treachery as an issue, we find it
proper to mention at this point that the trial court
did not err when it ruled that such circumstance
attended the killing of Renato Lumague. As shown
above, appellant shot the victim while delivering a
speech during a political rally. The act was so swift
that the victim did not have the opportunity to
defend himself. Such swift and expected attack on
an
unarmed
victim,
without
the
slightest
provocation on the part of the latter, 52 is the
essence of treachery.1wphi1
WHEREFORE, the appeal is DENIED. The decision of
the Regional Trial Court of Urdaneta, Pangasinan,
Branch 47, in Criminal Case No. U-6553, finding
accused-appellant
Dominador
Aspiras
GUILTY
beyond reasonable doubt of the crime of MURDER
qualified by treachery and sentencing him to suffer
the penalty of reclusion perpetua with all its
accessory penalties, is AFFIRMED. The award for
damages which should be paid by appellant to the
heirs of the victim is MODIFIED as follows:
1. PhP 50,000.00 for indemnity;
2. PhP 50,000.00 for moral and exemplary
damages;
3. PhP 1,558.00 for actual damages;
4. PhP 1,379,197.80 for loss of the victim's
expected or future income.
Costs against appellant.
SO ORDERED.

G.R. No. 79578 March 13, 1991

RADIO
COMMUNICATIONS
OF
THE
PHILIPPINES,
INC.
(RCPI), petitioner,
vs.
HON. COURT OF APPEALS, and SPOUSES
MINERVA
TIMAN
and
FLORES
TIMAN, respondents.
Salalima, Trenas,
petitioner.

Pagaoa

&

Associates

Paul P. Lentejas for private respondents.

for

SARMIENTO, J.:p
A social condolence telegram sent through the
facilities of the petitioner gave rise to the present
petition for review on certiorari assailing the
decision 1 of the respondent Court of Appeals which
affirmed in toto the judgment 2 of the trial court,
dated February 14, 1985, the dispositive portion of
which reads:
WHEREFORE, premises considered,
judgment is hereby rendered:
1. Ordering the defendant RCPI to
pay
plaintiff
the
amount
of
P30,848.05 representing actual and
compensatory damages; P10,000.00
as moral damages and P5,000.00 as
exemplary damages.
2. Awarding of attorney's fees in the
sum of P5,000.00. Costs against the
defendant.
SO ORDERED.

The facts as gleaned from the records of the case

are as follows:

RCPI's explanations in its letters, dated March 9 and

April 20, 1983, the Timans filed a complaint for
damages. 6
The parties stipulated at the pre-trial that the issue
to be resolved by the trial court was:
WHETHER or not the act of delivering
the condolence message in a Happy
Birthday"
card
with
a
"Christmasgram"
envelope
constitutes a breach of contract on
the part of the defendant. If in the
affirmative, whether or not plaintiff is
entitled to damages. 7
The trial court rendered judgment in favor of the
respondents Timans which was affirmed in toto by
the Court of Appeals. RCPI now submits the
following assignment of errors:
I
THE RESPONDENT COURT ERRED IN
CONDEMNING PETITIONER TO PAY
ACTUAL
AND
COMPENSATORY
DAMAGES IN THE AMOUNT OF
P30,848.05.

On January 24, 1983, private respondents-spouses

Minerva Timan and Flores Timan sent a telegram of
condolence to their cousins, Mr. and Mrs. Hilario
Midoranda, at Trinidad, Calbayog City, through
petitioner Radio Communications of the Philippines,
Inc. (RCPI, hereinafter) at Cubao, Quezon City, to
convey their deepest sympathy for the recent death
of the mother-in-law of Hilario Midoranda 4 to wit:

II

MR.
&
MRS.
HILARIO
TRINIDAD, CALBAYOG CITY

THE RESPONDENT COURT ERRED IN

CONDEMNING PETITIONER TO PAY
EXEMPLARY
DAMAGES
IN
THE
AMOUNT OF P5,000.00.

MIDORANDA

MAY GOD GIVE YOU COURAGE AND STRENGTH TO

BEAR YOUR LOSS. OUR DEEPEST SYMPATHY TO
YOU AND MEMBERS OF THE FAMILY.
MINER & FLORY. 5
The condolence telegram was correctly transmitted
as far as the written text was concerned. However,
the condolence message as communicated and
delivered to the addressees was typewritten on a
"Happy Birthday" card and placed inside a
"Christmasgram" envelope. Believing that the
transmittal to the addressees of the aforesaid
telegram in that nonsuch manner was done
intentionally and with gross breach of contract
resulting to ridicule, contempt, and humiliation of
the private respondents and the addressees,
including their friends and relatives, the spouses
Timan demanded an explanation. Unsatisfied with

THE RESPONDENT COURT ERRED IN

CONDEMNING PETITIONER TO PAY
MORAL DAMAGES IN THE AMOUNT
OF P10,000.00.
III

IV
THE RESPONDENT COURT ERRED IN
CONDEMNING PETITIONER TO PAY
ATTORNEYS FEES IN THE AMOUNT
OF P5,000.00 PLUS COSTS OF
SUIT. 8
The four assigned errors are going to be discussed
jointly because they are all based on the same
findings of fact.
We fully agree with the appellate court's
endorsement of the trial court's conclusion that
RCPI, a corporation dealing in telecommunications
and offering its services to the public, is engaged in

a business affected with public interest. As such, it

is bound to exercise that degree of diligence
expected of it in the performance of its obligation.9
One of RCPI's main arguments is that it still
correctly transmitted the text of the telegram and
was received by the addressees on time despite the
fact that there was "error" in the social form and
envelope used. 10 RCPI asserts that there was no
showing that it has any motive to cause harm or
damage on private respondents:
Petitioner humbly submits that the
"error" in the social form used does
not come within the ambit of fraud,
malice
or
bad
faith
as
understood/defined under the law. 11
We do not agree.
In a distinctly similar case, 12 and oddly also
involving the herein petitioner as the same culprit,
we held:
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 . . . 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. 13
Now, in the present case, it is self-evident that a
telegram of condolence is intended and meant to
convey a message of sorrow and sympathy.
Precisely,
it
is
denominated
"telegram
of
condolence" because it tenders sympathy and offers
to share another's grief. It seems out of this world,
therefore, to place that message of condolence in a
birthday card and deliver the same in a Christmas
envelope for such acts of carelessness and
incompetence not only render violence to good taste
and common sense, they depict a bizarre
presentation of the sender's feelings. They ridicule
the deceased's loved ones and destroy the
atmosphere of grief and respect for the departed.
Anyone who avails of the facilities of a telegram
company like RCPI can choose to send his message

in the ordinary form or in a social form. In the

ordinary form, the text of the message is typed on
plain newsprint paper. On the other hand, a social
telegram is placed in a special form with the proper
decorations and embellishments to suit the occasion
and the message and delivered in an envelope
matching the purpose of the occasion and the words
and intent of the message. The sender pays a
higher amount for the social telegram than for one
in the ordinary form. It is clear, therefore, that
when RCPI typed the private respondents' message
of condolence in a birthday card and delivered the
same in a colorful Christmasgram envelope, it
committed a breach of contract as well as gross
negligence. Its excuse that it had run out of social
condolence cards and envelopes 14 is flimsy and
unacceptable. It could not have been faulted had it
delivered the message in the ordinary form and
reimbursed the difference in the cost to the private
respondents. But by transmitting it unfittingly
through other special forms clearly, albeit
outwardly, portraying the opposite feelings of joy
and happiness and thanksgivingRCPI only
exacerbated the sorrowful situation of the
addressees and the senders. It bears stress that
this botchery exposed not only the petitioner's gross
negligence but also its callousness and disregard for
the sentiments of its clientele, which tantamount to
wanton misconduct, for which it must be held liable
for damages.
It is not surprising that when the Timans'
telegraphic message reached their cousin, it became
the joke of the Midorandas' friends, relatives, and
associates who thought, and rightly so, that the
unpardonable mix-up was a mockery of the death of
the mother-in-law of the senders' cousin. Thus it
was not unexpected that because of this unusual
incident, which caused much embarrassment and
distress to respondent Minerva Timan, he suffered
nervousness and hypertension resulting in his
confinement for three days starting from April 4,
1983 at the Capitol Medical Center in Quezon
City. 15
The petitioner argues that "a court cannot rely on
speculation, conjectures or guess work as to the
fact and amount of damages, but must depend on
the actual proof that damages had been suffered
and
evidence
of
the
actual
amount. 16 In other words, RCPI insists that there is
no causal relation of the illness suffered by Mr.
Timan with the foul-up caused by the petitioner. But
that is a question of fact. The findings of fact of the
trial court and the respondent court concur in favor
of the private respondents. We are bound by such
findingsthat is the general rule well-established by
a long line of cases. Nothing has been shown to
convince us to justify the relaxation of this rule in
the petitioner's favor. On the contrary, these factual
findings are supported by substantial evidence on
record.

Anent the award of moral and exemplary damages

assigned as errors, the findings of the respondent
court are persuasive.
. . . When plaintiffs placed an order
for transmission of their social
condolence telegram, defendant did
not inform the plaintiff of the
exhaustion of such social condolence
forms. Defendant-appellant accepted
through its authorized agent or
agency the order and received the
corresponding
compensation
therefor. Defendant did not comply
with its contract as intended by the
parties and instead of transmitting
the condolence message in an
ordinary form, in accordance with its
guidelines, placed the condolence
message expressing sadness and
sorrow in forms conveying joy and
happiness. Under the circumstances,
We cannot accept the defendant's
plea of good faith predicated on such
exhaustion of social condolence
forms.
Gross
negligence
or
carelessness can be attributed to
defendant-appellant in not supplying
its various stations with such
sufficient
and
adequate
social
condolence forms when it held out to
the public sometime in January,
1983, the availability of such social
condolence forms and accepted for a
fee the transmission of messages on
said forms. Knowing that there are
no such forms as testified to by its
Material Control Manager Mateo
Atienza, and entering into a contract
for the transmission of messages in
such
forms,
defendant-appellant
committed acts of bad faith, fraud or
malice. . . . 17
RCPI's argument that it can not be held liable for
exemplary damages, being penal or punitive in
character, 18 is without merit. We have so held in
many cases, and oddly, quite a number of them
likewise involved the herein petitioner as the
transgressor.
xxx xxx xxx
. . . In contracts and quasi-contracts,
exemplary damages may be awarded
if the defendant acted in a wanton,
fraudulent, reckless, oppressive or
malevolent manner. There was gross
negligence on the part of RCPI
personnel in transmitting the wrong
telegram, of which RCPI must be
held liable. Gross carelessness or

negligence
misconduct.

constitutes

wanton

xxx xxx xxx

. . . punitive damages
may be recovered for
wilful
or
wantonly
negligent
acts
in
respect of messages,
even though those
acts
are
neither
authorized nor ratified
(Arkansas & L.R. Co.
vs. Stroude 91 SW
18; West vs. Western
U. Tel. Co., 17 P807;
Peterson vs. Western
U. Tel. Co., 77 NW
985;
Brown
vs.
Western U. Tel. Co., 6
SE
146).
Thus,
punitive
damages
have been recovered
for mistakes in the
transmission
of
telegrams
(Pittman
vs. Western Union Tel.
Co., 66 SO 977;
Painter vs. Western
Union Tel. Co., 84 SE
293)
(emphasis
supplied). 19
We wish to add a little footnote to this Decision. By
merely reviewing the number of cases that has
reached this Court in which the petitioner was time
and again held liable for the same causes as in the
present case breach of contract and gross
negligencethe ineluctable conclusion is that it has
not in any way reformed nor improved its services
to the public. It must do so now or else next time
the Court may be constrained to adjudge stricter
sanctions.
WHEREFORE, premises considered, the decision
appealed from is AFFIRMED in toto.
Costs against the petitioner.
SO ORDERED.

G.R. No. L-61464 May 28, 1988

BA
FINANCE
CORPORATION, petitioner,
vs.
THE
HONORABLE
COURT
OF
APPEALS,
AUGUSTO YULO, LILY YULO (doing business
under the name and style of A & L
INDUSTRIES), respondents.

GUTIERREZ, JR., J.:

This is a petition for review seeking to set aside the
decision of the Court of Appeals which affirmed the
decision of the then Court of First Instance of
Manila, dismissing the complaint instituted by the
petitioner and ordering it to pay damages on the
basis of the private respondent's counterclaim.
On July 1, 1975, private respondent Augusto Yulo
secured a loan from the petitioner in the amount of
P591,003.59 as evidenced by a promissory note he
signed in his own behalf and as representative of

the A & L Industries. Respondent Yulo presented an

alleged special power of attorney executed by his
wife, respondent Lily Yulo, who manages A & L
Industries and under whose name the said business
is registered, purportedly authorizing Augusto Yulo
to procure the loan and sign the promissory note.
About two months prior to the loan, however,
Augusto Yulo had already left Lily Yulo and their
children and had abandoned their conjugal home.
When the obligation became due and demandable,
Augusto Yulo failed to pay the same.
On October 7, 1975, the petitioner filed its amended
complaint against the spouses Augusto and Lily Yulo
on the basis of the promissory note. It also prayed
for the issuance of a writ of attatchment alleging
that the said spouses were guilty of fraud in
contracting the debt upon which the action was
brought and that the fraud consisted of the spouses'
inducing the petitioner to enter into a contract with
them by executing a Deed of Assignment in favor of
the petitioner, assigning all their rights, titles and
interests over a construction contract executed by
and between the spouses and A. Soriano
Corporation on June 19, 1974 for a consideration of
P615,732.50 when, in truth, the spouses did not
have any intention of remitting the proceeds of the
said construction contract to the petitioner because
despite the provisions in the Deed of Assignment
that the spouses shall, without compensation or
costs, collect and receive in trust for the petitioner
all payments made upon the construction contract
and shall remit to the petitioner all collections
therefrom, the said spouses failed and refuse to
remit the collections and instead, misappropriated
the proceeds for their own use and benefit, without
the knowledge or consent of the petitioner.
The trial court issued the writ of attachment prayed
for thereby enabling the petitioner to attach the
properties of A & L Industries. Apparently not
contented with the order, the petitioner filed
another motion for the examination of attachment
debtor, alleging that the properties attached by the
sheriff were not sufficient to secure the satisfaction
of any judgment that may be recovered by it in the
case. This was likewise granted by the court.
Private respondent Lily Yulo filed her answer with
counterclaim, alleging that although Augusta Yulo
and she are husband and wife, the former had
abandoned her and their children five (5) months
before the filing of the complaint; that they were
already separated when the promissory note was
executed; that her signature in the special power of
attorney was forged because she had never
authorized Augusto Yulo in any capacity to transact
any business for and in behalf of A & L Industries,
which is owned by her as a single proprietor, that
she never got a single centavo from the proceeds of
the loan mentioned in the promissory note; and

that as a result of the illegal attachment of her

properties, which constituted the assets of the A & L
Industries, the latter closed its business and was
taken over by the new owner.
After hearing, the trial court rendered judgment
dismissing the petitioner's complaint against the
private respondent Lily Yulo and A & L Industries
and ordering the petitioner to pay the respondent
Lily Yulo P660,000.00 as actual damages;
P500,000.00 as unrealized profits; P300,000.00 as
exemplary damages; P30,000.00 as and for
attorney's fees; and to pay the costs.
The petitioner appealed. The Court of Appeals
affirmed the trial court's decision except for the
exemplary damages which it reduced from
P300,000.00 to P150,000.00 and the attorney's fees
which
were
reduced
from
P30,000.00
to
P20,000.00.
In resolving the question of whether or not the trial
court erred in holding that the signature of
respondent Lily Yulo in the special power of attorney
was forged, the Court of Appeals said:
The crucial issue to be determined is
whether or not the signatures of the
appellee Lily Yulo in Exhibits B and B1 are forged. Atty. Crispin Ordoa,
the Notary Public, admitted in open
court that the parties in the subject
documents did not sign their
signatures in his presence. The same
were already signed by the supposed
parties and their supposed witnesses
at the time they were brought to him
for ratification. We quote from the
records the pertinent testimony of
Atty. Ordoa, thus:
Q.
This
document
marked as Exhibit B1, when this was
presented to you by
that common friend,
June Enriquez, it was
already typewritten, it
was
already
accomplished,
all
typewritten.?
A. Yes, sir.
Q And the parties had
already affixed their
signatures
in
this
document?
A. Yes, sir.

Q. In this document
marked as Exhibit B
although it appears
here that this is an
acknowledgment, you
have not stated here
that
the
principal
actually acknowledged
this document to be
her voluntary act and
deed?
A This in one of those
things that escaped
my attention. Actually
I have not gone over
the second page. I
believed it was in
order I signed it. (TSN
pp. 13-14, Hearing of
Nov. 26, 1976).
The glaring admission by the Notary
Public that he failed to state in the
acknowledgment portion of Exhibit
B-1 that the appellee Lily Yulo
acknowledged the said document to
be her own voluntary act and deed,
is a very strong and commanding
circumstance to show that she did
not appear personally before the said
Notary Public and did not sign the
document.
Additionally,
the
Notary
Public
admitted that, while June Enriquez is
admittedly a mutual friend of his and
the defendant Augusta Yulo, and who
is also an instrumental witness in
said Exhibit B-1., he could not
recognize or tell which of the two
signatures appearing therein, was
the signature of this June Enriquez.
Furthermore, as the issue is one of
credibility of a witness, the findings
and conclusions of the trial court
before whom said witness, Atty.
Crispin Ordoa, the Notary Public
before
whom
the
questioned
document was supposedly ratified
and acknowledged, deserve great
respect and are seldom disturbed on
appeal by appellate tribunals, since it
is in the best and peculiar advantage
of determining and observing the
conduct, demeanor and deportment
of a particular witness while he is
testifying in court, an opportunity not
enjoyed by the appellate courts who
merely have to rely on the recorded

proceedings which transpired in the

court below, and the records are
bare of any circumstance of weight,
which the trial court had overlooked
and which if duly considered, may
radically affect the outcome of the
case.
On the other hand, the appellee Lily
Yulo, to back up her claim of forgery
of her signature in Exhibit B-1,
presented in court a handwriting
expert witness in the person of Police
Captain Yakal Giron of the Integrated
National Police Training Command,
and who is also a Document
Examiner of the same Command's
Crime Laboratory at Fort Bonifacio,
Metro Manila. His experience as an
examiner of questioned and disputed
documents, in our mind, is quite
impressive. To qualify him as a
handwriting expert, he declared that
he underwent extensive and actual
studies and examination of disputed
or questioned document, both at the
National Bureau of Investigation
Academy and National Bureau of
Investigation Questioned Document
Laboratory, respectively, from July
1964, up to his appointment as
Document Examiner in June, 1975,
and, to further his experience along
this line, he attended the 297th
Annual Conference of the American
Society of Questioned Docurnent
Examiners
held
at
Seattle,
Washington, in August 1971, as a
representative of the Philippines, and
likewise conducted an observation of
the present and modern trends of
crime laboratories in the West Coast,
U.S.A., in 1971; that he likewise had
conducted
actual
tests
and
examination
of
about
100,000
documents, as requested by the
different courts, administrative, and
governmental
agencies
of
the
Government, substantial portions of
which relate to actual court cases.
In concluding that the signatures of
the appellee Lily Yulo, in the disputed
document in question (Exh. B-1),
were all forgeries, and not her
genuine
signature,
the
expert
witness categorically recited and
specified in open court what he
observed to be about twelve (12)
glaring and material significant
differences, in his comparison of the

signatures appearing in the genuine

specimen signatures of the said
appellee and with those appearing in
the questioned document (Exhibit B1). Indeed, we have likewise seen
the supposed notable differences,
found in the standard or genuine
signatures of the appellee which
were lifted and obtained in the
official files of the government, such
as the Bureau of Internal Revenue on
her income tax returns, as compared
to the pretended signature of the
appellee appearing in Exhibits B, B1. It is also noteworthy to mention
that the appellant did not even
bother
to
conduct
a
crossexamination of the handwriting
expert witness, Capt. Giron, neither
did the appellant present another
handwriting expert, at least to
counter-act or balance the appellee's
handwriting expert.
Prescinding from the foregoing facts,
we subscribe fully to the lower
court's
observations
that
the
signatures of the appellee Lily Yulo in
the questioned document (Exh. B-1)
were forged. Hence, we find no
factual basis to disagree. (pp. 28-30,
Rollo)
As to the petitioner's contention that even if the
signature of Lily Yulo was forged or even if the
attached properties were her exclusive property, the
same can be made answerable to the obligation
because the said properties form part of the
conjugal partnership of the spouses Yulo, the
appellate court held that these contentions are
without merit because there is strong preponderant
evidence to show that A & L Industries belongs
exclusively to respondent Lily Yulo, namely: a) The
Certificate of Registration of A & L Industries, issued
by the Bureau of Commerce, showing that said
business is a single proprietorship, and that the
registered owner thereof is only Lily Yulo; b) The
Mayor's Permit issued in favor of A & L Industries,
by the Caloocan City Mayor's Office showing
compliance by said single proprietorship company
with the City Ordinance governing business
establishments; and c) The Special Power of
Attorney itself, assuming but without admitting its
due execution, is tangible proof that Augusto Yulo
has no interest whatsoever in the A & L Industries,
otherwise, there would have been no necessity for
the Special Power of Attorney if he is a part owner
of said single proprietorship.
With regard to the award of damages, the Court of
Appeals affirmed the findings of the trial court that

there was bad faith on the part of the petitioner as

to entitle the private respondent to damages as
shown not only by the fact that the petitioner did
not present the Deed of Assignment or the
construction agreement or any evidence whatsoever
to support its claim of fraud on the part of the
private respondent and to justify the issuance of a
preliminary attachment, but also by the following
findings:
Continuing and elaborating further on the
appellant's mala fide actuations in securing the writ
of attachment, the lower court stated as follows:
Plaintiff not satisfied with the instant case where an
order for attachment has already been issued and
enforced, on the strength of the same Promissory
Note (Exhibit"A"), utilizing the Deed of Chattel
Mortgage (Exhibit "4"), filed a foreclosure
proceedings before the Office of the Sheriff of
Caloocan (Exhibit"6") foreclosing the remaining
properties found inside the premises formerly
occupied by the A & L Industries. A minute
examination of Exhibit "4" will show that the
contracting parties thereto, as appearing in par. 1
thereof, are Augusto Yulo, doing business under the
style of A & L Industries (should be A & L Glass
Industries Corporation), as mortgagor and BA
Finance Corporation as mortgagee, thus the
enforcement of the Chattel Mortgage against the
property of A & L Industries exclusively owned by
Lily T. Yulo appears to be without any factual or
legal basis whatsoever. The chattel mortgage,
Exhibit "4" and the Promissory Note, Exhibit A, are
based on one and the same obligation. Plaintiff tried
to enforce as it did enforce its claim into two
different modes a single obligation.
Aware that defendant Lily Yulo, filed a Motion to
Suspend Proceedings by virtue of a complaint she
filed with the Court of First Instance of Caloocan,
seeking annulment of the Promissory Note, the very
basis of the plaintiff in filing this complaint,
immediately after the day it filed a Motion for the
Issuance of an Alias Writ of Preliminary
Attachment . . .Yet, inspite of the knowledge and
the filing of this Motion to Suspend Proceedings, the
Plaintiff still filed a Motion for the Issuance of a Writ
of Attachment dated February 6, 1976 before this
court. To add insult to injury, plaintiff even filed a
Motion for Examination of the Attachment Debtor,
although aware that Lily Yulo had already denied
participation in the execution of Exhibits "A" and
"B". These incidents and actions taken by plaintiff,
to the thinking of the court, are sufficient to prove
and establish the element of bad faith and malice on
the part of plaintiff which may warrant the award of
damages in favor of defendant Lily Yulo. (Ibid., pp.
102-103).<re||an1w>

Indeed, the existence of evident bad faith on the

appellant's part in proceeding against the appellee
Lily Yulo in the present case, may likewise be
distressed on the fact that its officer Mr. Abraham
Co, did not even bother to demand the production
of at least the duplicate original of the Special
Power of Attorney (Exhibit B) and merely contended
himself with a mere xerox copy thereof, neither did
he require a more specific authority from the A & L
Industries to contract the loan in question, since
from the very content and recitals of the disputed
document, no authority, express or implied, has
been delegated or granted to August Yulo to
contract a loan, especially with the appellant. (pp.
33-34, Rollo)

admission of the person sought to be

charged with the disputed writing
made at or for the purposes of the
trial or by his testimony; (2) by
witnesses who saw the standards
written or to whom or in whose
hearing the person sought to be
charged acknowledged the writing
thereof; (3) by evidence showing
that the reputed writer of the
standard has acquiesced in or
recognized the same, or that it has
been adopted and acted upon by him
his business transactions or other
concerns....

Concerning the actual damages, the appellate court

ruled that the petitioner should have presented
evidence to disprove or rebut the private
respondent's claim but it remained quiet and chose
not to disturb the testimony and the evidence
presented by the private respondent to prove her
claim.

Furthermore, the judge found such signatures to be

sufficient as standards. In the case of TaylorWharton Iron & Steel Co. v. Earnshaw (156 N.E.
855, 856), it was held:

In this petition for certiorari, the petitioner raises

three issues. The first issue deals with the appellate
court's affirmance of the trial court's findings that
the signature of the private respondent on the
Special Power of Attorney was forged. According to
the petitioner, the Court of Appeals disregarded the
direct mandate of Section 23, Rule 132 of the Rules
of Court which states in part that evidence of
handwriting by comparison may be made "with
writings admitted or treated as genuine by the party
against whom the evidence is offered, or proved to
be genuine to the satisfaction of the judge," and
that there is no evidence on record which proves or
tends to prove the genuineness of the standards
used.
There is no merit in this contention.
The records show that the signatures which were
used as "standards" for comparison with the alleged
signature of the private respondent in the Special
Power of Attorney were those from the latter's
residence certificates in the years 1973, 1974 and
1975, her income tax returns for the years 1973
and 1975 and from a document on long bond paper
dated May 18, 1977. Not only were the signatures
in the foregoing documents admitted by the private
respondent as hers but most of the said documents
were used by the private respondent in her
transactions with the government. As was held in
the case of Plymouth Saving & Loan Assn. No. 2 v.
Kassing (125 NE 488, 494):
We believe the true rule deduced
from the authorities to be that the
genuineness of a "standard" writing
may be established (1) by the

When a writing is offered as a

standard of comparison it is for the
presiding judge to decide whether it
is the handwriting of the party to be
charged. Unless his finding is
founded upon error of law, or upon
evidence which is, as matter of law,
insufficient to justify the finding, this
court will not revise it upon
exceptions." (Costelo v. Crowell, 139
Mass. 588, 590, 2 N.E. 648; Nuez
v. Perry, 113 Mass, 274, 276.)
We cannot find any error on the part of the trial
judge in using the above documents as standards
and also in giving credence to the expert witness
presented by the private respondent whose
testimony the petitioner failed to rebut and whose
credibility it likewise failed to impeach. But more
important is the fact that the unrebutted
handwriting expert's testimony noted twelve (12)
glaring and material differences in the alleged
signature of the private respondent in the Special
Power of Attorney as compared with the specimen
signatures, something which the appellate court
also
took
into
account.
In Cesar
v.
Sandiganbayan (134 SCRA 105, 132), we ruled:
Mr. Maniwang pointed to other
significant
divergences
and
distinctive characteristics between
the sample signatures and the
signatures on the questioned checks
in his report which the court's
Presiding Justice kept mentioning
during Maniwang's testimony.
In
the
course
of his
crossexamination, NBI expert Tabayoyong
admitted that he saw the differences

between the exemplars used and the

questioned
signatures
but
he
dismissed the differences because he
did not consider them fundamental.
We rule that significant differences
are more fundamental than a few
similarities. A forger always strives to
master some similarities.
The second issue raised by the petitioner is that
while it is true that A & L Industries is a single
proprietorship and the registered owner thereof is
private respondent Lily Yulo, the said proprietorship
was established during the marriage and its assets
were also acquired during the same. Therefore, it is
presumed that this property forms part of the
conjugal partnership of the spouses Augusto and
Lily Yulo and thus, could be held liable for the
obligations contracted by Augusto Yulo, as
administrator of the partnership.
There is no dispute that A & L Industries was
established during the marriage of Augusta and Lily
Yulo and therefore the same is presumed conjugal
and the fact that it was registered in the name of
only one of the spouses does not destroy its
conjugal nature (See Mendoza v. Reyes, 124 SCRA
161, 165). However, for the said property to be held
liable, the obligation contracted by the husband
must have redounded to the benefit of the conjugal
partnership under Article 161 of the Civil Code. In
the present case, the obligation which the petitioner
is seeking to enforce against the conjugal property
managed by the private respondent Lily Yulo was
undoubtedly contracted by Augusto Yulo for his own
benefit because at the time he incurred the
obligation he had already abandoned his family and
had left their conjugal home. Worse, he made it
appear that he was duly authorized by his wife in
behalf of A & L Industries, to procure such loan
from the petitioner. Clearly, to make A & L
Industries liable now for the said loan would be
unjust and contrary to the express provision of the
Civil Code. As we have ruled in Luzon Surety Co.,
Inc. v. De Gracia (30 SCRA 111, 115-117):
As explained in the decision now
under review: "It is true that the
husband is the administrator of the
conjugal property pursuant to the
provisions of Art. 163 of the new
Civil Code. However, as such
administrator the only obligations
incurred by the husband that are
chargeable against the conjugal
property are those incurred in the
legitimate pursuit of his career,
profession or business with the
honest belief that he is doing right
for the benefit of the family. This is
not true in the case at bar for we

believe that the husband in acting as

guarantor or surety for another in an
indemnity
agreement
as
that
involved in this case did not act for
the
benefit
of
the
conjugal
partnership. Such inference is more
emphatic in this case, when no proof
is presented that Vicente Garcia in
acting as surety or guarantor
received
consideration
therefore,
which may redound to the benefit of
the conjugal partnership.(Ibid, pp.
46-47).
xxx xxx xxx
xxx xxx xxx
In the most categorical language, a
conjugal partnership under that
provision is liable only for such
"debts and obligations contracted by
the husband for the benefit of the
conjugal partnership." There must be
the requisite showing then of some
advantage which clearly accrued to
the welfare of the spouses. There is
none in this case.
xxx xxx xxx
Moreover, it would negate the plain
object of the additional requirement
in the present Civil Code that a debt
contracted by the husband to bind a
conjugal partnership must redound
to its benefit. That is still another
provision indicative of the solicitude
and tender regard that the law
manifests for the family as a unit. Its
interest is paramount; its welfare
uppermost in the minds of the
codifiers and legislators.
We, therefore, rule that the petitioner cannot
enforce the obligation contracted by Augusto Yulo
against his conjugal properties with respondent Lily
Yulo. Thus, it follows that the writ of attachment
cannot issue against the said properties.
Finally, the third issue assails the award of actual
damages according to the petitioner, both the lower
court and the appellate court overlooked the fact
that the properties referred to are still subject to a
levy on attachment. They are, therefore, still
under custodia legis and thus, the assailed decision
should have included a declaration as to who is
entitled to the attached properties and that
assuming arguendo that the attachment was
erroneous, the lower court should have ordered the

sheriff to return to the private respondent the

attached properties instead of condemning the
petitioner to pay the value thereof by way of actual
damages.
In the case of Lazatin v. Twao (2 SCRA 842, 847),
we ruled:
xxx xxx xxx
... It should be observed that Sec. 4
of Rule 59, does not prescribed the
remedies available to the attachment
defendant in case of a wrongful
attachment, but merely provides an
action for recovery upon the bond,
based on the undertaking therein
made and not upon the liability
arising from a tortuous act, like the
malicious
suing
out
of
an
attachment. Under the first, where
malice
is
not
essential,
the
attachment defendant, is entitled to
recover only the actual damages
sustained by him by reason of the
attachment. Under the second,
where the attachment is maliciously
sued out, the damages recoverable
may include a compensation for
every injury to his credit, business or
feed (Tyler v. Mahoney, 168 NC 237,
84 SE 362; Pittsburg etc. 5
Wakefield, etc., 135 NC 73, 47 SE
234). ...
The question before us, therefore, is whether the
attachment of the properties of A & L Industries was
wrongful so as to entitle the petitioner to actual
damages only or whether the said attachment was
made in bad faith and with malice to warrant the
award of other kinds of damages. Moreover, if the
private respondent is entitled only to actual
damages, was the court justified in ordering the
petitioner to pay for the value of the attached
properties instead of ordering the return of the said
properties to the private respondent Yulo ?
Both the trial and appellate courts found that there
was bad faith on the part of the petitioner in
securing the writ of attachment. We do not think so.
"An attachment may be said to be wrongful when,
for instance, the plaintiff has no cause of action, or
that there is no true ground therefore, or that the
plaintiff has a sufficient security other than the
property attached, which is tantamout to saying
that the plaintiff is not entitled to attachment
because the requirements of entitling him to the
writ are wanting. (7 C.J.S., 664)" (p. 48, Section 4,
Rule 57, Francisco, Revised Rules of Court).

Although the petitioner failed to prove the ground

relied upon for the issuance of the writ of
attachment, this failure cannot be equated with bad
faith or malicious intent. The steps which were
taken by the petitioner to ensure the security of its
claim were premised, on the firm belief that the
properties involved could be made answerable for
the unpaid obligation due it. There is no question
that a loan in the amount of P591,003.59 was
borrowed from the bank.
We, thus, find that the petitioner is liable only for
actual damages and not for exemplary damages
and attorney's fees. Respondent Lily Yulo has
manifested before this Court that she no longer
desires the return of the attached properties since
the said attachment caused her to close down the
business. From that time she has become a mere
employee of the new owner of the premises. She
has grave doubts as to the running condition of the
attached machineries and equipments considering
that the attachment was effected way back in 1975.
She states as a matter of fact that the petitioner
has already caused the sale of the machineries for
fear that they might be destroyed due to prolonged
litigation. We, therefore, deem it just and equitable
to allow private respondent Lily Yulo to recover
actual damages based on the value of the attached
properties as proven in the trial court, in the
amount of P660,000.00. In turn, if there are any
remaining attached properties, they should be
permanently released to herein petitioner.
We cannot, however, sustain the award of
P500,000.00
representing
unrealized
profits
because this amount was not proved or justified
before the trial court. The basis of the alleged
unearned profits is too speculative and conjectural
to show actual damages for a future period. The
private respondent failed to present reports on the
average actual profits earned by her business and
other evidence of profitability which are necessary
to prove her claim for the said amount (See G. A.
Machineries, Inc. v. Yaptinchay, 126 SCRA 78, 88).
The judgment is therefore set aside insofar as it
holds the petitioner liable for P500,000.00 actual
damages
representing
unrealized
profits,
P150,000.00
for
exemplary
damages
and
P20,000.00 for attorney's fees. As stated earlier, the
attached properties, should be released in favor of
the petitioner.
WHEREFORE, the decision of the Court of Appeals is
hereby SET ASIDE and the petitioner is ordered to
pay the private respondent Lily Yulo the amount of
SIX
HUNDRED
SIXTY
THOUSAND
PESOS
(P660,000.00) as actual damages. The remaining
properties subject of the attachment are ordered
released in favor of the petitioner.

SO ORDERED.

G.R. No. L-10422

January 11, 1916

A.
LEMOINE, plaintiff-appellant,
vs.
C. ALKAN, defendant-appellant.
Eduardo Gutierrez Repide and Felix Socias for
plaintiff.
Alfredo Chicote and R. del Castillo Tirol for
defendant.
MORELAND, J.:
This is an action brought to recover damages for
breach of a contract for lease of services.
On the 10th day of July, 1913, the plaintiff and
defendant signed a written contract whereby the
defendant hired the plaintiff, an expert automobile

mechanic, to perform services as such expert

mechanic in his automobile repair shop in the city of
Manila for the period of three years from the date of
the contract at a salary of P350 a month. Plaintiff
entered defendant's service on the day on which the
contract was executed and continued therein until
he was discharged by the defendant the latter part
of August of the same year, plaintiff actually leaving
defendant's service on the 5th day of September.
On the 8th of the same month this action was
begun to recover, as damages for breach of
contract, the wages to which he was entitled under
the contract.
The defendant presents three defenses to the
action.
The first is that plaintiff was incompetent and
insubordinate and that he unduly and without
permission absented himself from the repair shop
during the hours when, under the contract, he
should have been at work.
The second is founded on the claim that plaintiff, if
he had used due diligence, would have been able to
obtain a like position in the city of Manila, it
appearing by the evidence, asserts defendant, that
various owners of other automobile repair shops
were anxious to obtain the services of mechanics of
plaintiff's ability and that any one of them would
have hired him immediately on his discharge if he
had presented himself for that purpose.
The defendant claims as his third defense that on
the 6th of December, 1913, in a letter addressed to
plaintiff he offered to take him back into his employ
under terms and conditions substantially the same
as those specified in the original contract of service
and at the same rate of wages; and that plaintiff,
without reason or justification, refused to accept the
offer. He then invokes the principle of law that
where a servant has been wrongfully discharged
and has failed to obtain other employment, he must
accept the offer of his original employer to receive
him back in his employ under terms and conditions
which are substantially those of his previous
employment and at the same rate of wages, on pain
of being unable to recover wages or damages after
the date of the offer.
The court found for the defendant on his second
defense but allowed plaintiff wages for three
months, which the court considered a reasonable
time which ought to be conceded to him in which to
obtain other employment. Both parties appealed.
With respect to defendant's first defense, the trial
court found against him on the facts; and a
thorough review of the evidence in the record leads
us to agree with that conclusion. The evidence is
clearly insufficient to support a finding that plaintiff
was incompetent or insubordinate or that he
absented himself during working hours without
permission. A fair preponderance of the evidence
shows that he was an exceptionally good mechanic,

entirely competent to perform the work set for him,

that he did perform it efficiently, that he was
reasonably tractable and obedient, and that he did
not absent himself from the garage during working
hours except on the orders of defendant.
In regard to the second defense, the trial court
found as a fact in the evidence that positions of like
nature were, at the time of his discharge, open to
plaintiff in the city of Manila and that, with ordinary
diligence, he would have been able to obtain like
employment immediately. We are in complete
conformity with the finding of the trial court that
plaintiff, by the use of reasonable diligence, could,
immediately on his discharge, have obtained like
employment in the city of Manila. It is clearly
supported by a fair preponderance of the evidence
and must accordingly be sustained. From this
finding of fact the trial court drew the conclusion
that plaintiff was not entitled to recover on his
complaint, except in part, as he had failed to use
the diligence required under the circumstances in
seeking other employment of like nature in the
same locality.
While we agree with the findings of facts as to these
alleged defenses, we do not agree with the
conclusion of law which the trial court draws
therefrom, for reasons which we will set out
hereafter.
The defendant asserts as a third defense that, on
the 6th day of December, 1913, in a letter
addressed to the plaintiff, he offered to take him
back into his employ under terms and conditions
substantially the same as those specified in the
original contract and at the same rate of wages, and
that plaintiff, without reason or justification, refused
tom accept the offer. He then invokes the principle
of law that, where a servant has been illegally
discharged and has failed to obtain other
employment, he must accept the offer of the
employer who discharged him to receive him back
into his into his employ under terms and conditions
substantially those of his previous employment and
at the same rate of wages on pain of having his
damages on a suit for breach of contract reduced to
the extent of the wages which he would have
received if he had accepted the offer. We
understand that the facts on which this defense
rests are admitted by both parties. There remains
only the discussion as to whether such facts
constitute a defense or whether they may be used
in mitigation of damages to which plaintiff may
prove himself entitled. This discussion will also be
reserved until later.
The action in this case is founded on that provision
of the Civil Code which provides that "field-hands,
mechanics, artisans, and other hired laborers, for a
certain time and for a certain work, shall not leave
nor be dismissed, without just cause, before the
fulfillment of the contract" (art. 1586); and also
that disposition of the same code which provides
that "those who, in fulfilling their obligations, are

guilty of fraud, neglect or delay, or who violate the

provisions thereof, are liable for the damages
caused thereby." (Art. 1101.)
An examination of the Spanish authorities relative
to the right of a mechanic to bring an action for
damages resulting form a wrongful discharge
discloses nothing which indicates that that law
differs in any material respect from that of Englishspeaking countries. Manresa in his discussion of this
subject follows the usual lines with which American
lawyers and jurists are familiar. His first serious
remarks, after outlining the scope of the subject,
refer to that portion of the article which seems to
restrict its application to those who have agreed to
work for a certain time with respect to a certain
work, the limitation, "for a certain work," seeming
to indicate, says Manresa, if taken literally, that the
persons mentioned in the article may be discharged
at will when they are employed generally and
without reference to any particular piece of work,
even though the hiring is for a specified time. His
conclusion is that the wording of the article must
not be taken so literally as to permit the
perpetration of an injustice which would necessarily
follow if, after the execution of a contract of hiring
for a specified time, the proprietor might, before the
designated period had prescribed, capriciously
discharge the employee. He seems to think that the
disjunctive "or" should take the place of the
conjunctive "and" between the words "time" and
"for," making the article read "for a certain
time or for a certain work," he giving it as his
opinion that that is the real meaning of the article.
Continuing the discussion, Manresa is of the opinion
that the Civil Code not having specified the causes
which would justify a dismissal of the employee or
the abandonment by the latter of his contract, all
matters pertaining to that question are left to the
sound judgment of the courts. He adds that, along
with the prohibition against wrongful discharge
found in article 1586, goes also the supplemental
obligation to indemnify in case of such discharge.
He is of the opinion that there is no necessity for
such a statement in article 1586 or elsewhere in the
law relative to lease of services, inasmuch as the
principle which it would embody are enunciated in
the law of obligations as laid down in previous
articles of the same Code. He makes some
comment with respect to the amount of damages to
be awarded and adds that when, in actions based
on a wrongful discharge, the evidence establishes
the fact of wrongful discharge, the employer shall
be considered, in relation to the injured employee, a
"debtor in bad faith."
Under both the Spanish and American law, then, the
action based on a wrongful discharge is one to
recover damages for breach of contract.
That which defendant alleges to be his second and
third defenses, even if all the facts necessary to
establish the defenses as alleged were proved,
could not really be called defenses. They would

more properly go to a mitigation of damages, the

defendant has not prove facts sufficient to avail
himself of the benefit thereof under his so-called
second defense. He has offered no evidence
showing what wages plaintiff would have received if
he had obtained one of the positions to which
defendant refers. The evidence refers simply to the
fact that plaintiff might have obtained like
employment in the same locality; but it does not
show at what rate of wages. There is nothing in the
record showing the wages of a particular position or
the usual wages paid in such employment. We
understand it to be the rule that before defendant
can take advantage of the failure of plaintiff to
obtain like employment, it must appear: (1) That
it is like employment, (2) that it is in the same
locality; (3) that it is under substantially the same
conditions; and (4) the wages which he could have
earned. We are of the opinion that defendant has
successfully established the first three conditions;
but, on the other hand, he has utterly failed to
established the fourth. It is clear that the court
cannot allow any sum in reduction of damages
unless it has been proved; and it not appearing of
record how much plaintiff could have earned in like
employment, it is impossible to determine the sum
which must be deducted from the damages proved
by plaintiff.
Defendant is more successful with what he calls his
third defense. It is admitted, as we have said, that
about 3 months after employment, defendant
offered to take him back into his employ in the
same repair shop, at the same rate of wages and
substantially under the conditions named in the
original contract and that plaintiff refused the offer.
He gave no reason for his refusal, but made a
counter-offer in which he proposed material
changes in the conditions under which he would
return and in the wages which he was to receive, he
demanding a higher salary. He also required that
there be added to the contract of reemployment a
penal clause in the sum of P15,000 which the
defendant would be obliged to pay in case of a
wrongful discharge in addition to the damages
sustained. He also required that the defendant
permit a judgment to be entered against him in the
present action for the full amount of the damages
claimed. Defendant refused to accept these new
conditions and the plaintiff declined to accept the
offer to reemploy.
We are of opinion that plaintiff should have
accepted the offer of defendant and that, in refusing
to do so he conferred on the defendant the right to
present his offer in mitigation of any damages which
plaintiff might have sustained by reason of the
wrongful discharge. We are aware that it has been
broken by the employer by a wrongful discharge of
the employee and that status has been recognized
by both parties, the employee is not obliged to do
anything more under the original contract; that, it
having been broken voluntarily by the employer, his
employee is no longer under any obligation to

comply with the terms thereof. But, notwithstanding

this, we believe that, under such circumstances, the
employees should accept an offer even under the
old contract, as long as it does not involve a
renunciation of any right already accrued, although
it is doubtful if it can be said in the case at bar that
the offer was in reality one to return to employment
under the old contract but was, rather, the creation
of a new contract, the terms and conditions of which
were substantially those of the old. The mere
acceptance of the offer of defendant would not
constitute a waiver of his right to recover damages
for the time intervening from the date of the
wrongful discharge to the time when he returned to
work under the new offer, which would consist in
the loss of wages for that period, and any other
damages which might have been sustained and
which plaintiff could prove. We do not mean to hold
that an employer may wrongful discharge an
employee an indefinite number of times and require
him each time to return to work under the same
contract. There would be a legal remedy for that
sort of treatment, even if an employer should be so
disregardful of his own interests as to give his
employee an opportunity to begin an indefinite
number of actions against him in each one of which
he could recover damages equal to or exceeding the
wages which he would have received if he had not
been wrongfully discharged, together with interest
and cost in each case, and possibly much more. We
believe that it is the purpose of the law to require
an employee to labor if he is given the opportunity;
and that it does not permit him to remain idle and
collect his wages nevertheless when he has an
opportunity to return to his former employment.
The employer is the same employer when the
employee is offered the opportunity to return as he
was when the original contract was made; and the
conditions under which the employment is to
proceed are substantially the same. Of course,
where the employer has so mistreated the
employee that a self-respecting man could not again
work for him, the situation would be different.
Nothing of that sort appears in this case and we are
convinced that, as matter of law, the plaintiff should
have returned to service under the offer of
defendant.
It is true, that, at the time of the offer was made,
this action had been commenced. Plaintiff left
defendant's service on September 5th and began
this action on the 8th. The offer was made on
December 5th. We do not believe, however, that the
pendency of the action alters the situation
materially. There was no condition attached to the
offer requiring the plaintiff to dismiss his action
without costs or even without judgment and it is to
be presumed that defendant intended plaintiff to
have the right to continue his action to final
determination and obtain the damages which he
had suffered during the period intervening between
the discharge and the reinstatement.

Plaintiff proved no other damages than the loss of

wages. The damages in an action for wrongful
discharge areprima facie the amount of wages for
the full term. These are the damages and the only
damages which plaintiff proved. The complaint
alleges damages to character and reputation arising
from the fact of the wrongful discharge. No
evidence was offered showing damages of that kind
or the amount thereof. The amount which defendant
proved in mitigation or recoupment is equal to the
amount which plaintiff proved his damages to be,
with the exception of the period between September
5th and December 5th of the same year. As a
necessary result plaintiff can recover in this action
only for the three months' period. The court below
allowed plaintiff his wages for the months of
September, October and November, but on a
different theory from that on which we have based
his right; but, whatever the theory, the amount is
correct and the judgment of the trial court is to that
extent proper.
It is contended that the burden of proving that
plaintiff could have procured like employment in the
same locality under similar conditions is on plaintiff.
We cannot agree with this under the principles
either of Spanish or American law. Under the
Spanish law, as we have seen, the employer, when
he wrongfully discharges an employee, becomes,
with respect to the employee, a debtor in bad faith.
On a debtor in bad faith is laid the necessity of
affirmatively establishing every fact necessary to
extricate him from that position. In this necessity
we find the germ of that principle of the American
law which throws on the employer in an action for
wrongful discharge the burden of proving
affirmatively that if the employee had used due
diligence he could, immediately on his discharged,
have obtained like employment in the same locality.
(Hicks vs. Manila Hotel Co., 28 Phil. Rep., 325, and
cases cited.)
The judgment, appealed from is affirmed, without
special finding as to costs in this instance. So
ordered.

G.R. No. L-9973

November 6, 1914

W.
E.
HICKS, plaintiff-appellant,
vs.
MANILA HOTEL COMPANY, defendant-appellee.
Southworth, Hargis, Adams and Jordain
appellant.
Lawrence, Ross and Block for appellee.

for

MORELAND, J.:
This is an appeal from a judgment of the Court of
First Instance of the city of Manila dismissing upon
the merits after trial plaintiff's action to recover
damages alleged to have been sustained through
defendant's breach of a stipulation to renew for a
second year a written contract for the exclusive
five-passenger
automobile
privilege
of
the
defendant hotel.
It seems that, on the 9th of November 1912,
plaintiff and defendant entered into a written
contract by which the defendant ceded to the
plaintiff the exclusive right to serve its patrons with
five-passenger automobiles for a period of one year
from the date thereof, with certain rights with
respect to a renewal of the contract for a second
year. Plaintiff entered on the performance of his
duties under the contract and successfully
discharged them during the first year. When about
half of the first year had expired, and about June,
1913, the defendant company, disregarding, as
plaintiff claims, the terms of its agreement with
him, invited proposals from various garages for its

five-passenger automobile privilege for the ensuing

year, that is, from November, 1913, to November,
1914, the time covered by the second year of
plaintiff's contract. Under these proposals various
garages competed for the privilege, including that of
George E. Brown, and, after certain negotiations
with the latter, his offer was accepted by the
defendant company and a written contract made
with him for the exclusive right to the privilege
during the year beginning November 9, 1913. This
contract with Brown was executed some months
prior to the termination of the first year of plaintiff's
contract.
Upon the termination of the first year of the
contract the defendant company having, as we have
seen, already entered into a contract with Brown
relative to the matter included in plaintiff's contract
for the period representing the second year thereof,
refused, over plaintiff's objections and protests, to
permit him to continue for the second year,
deprived him of the privilege which the contract
conferred, and evicted him from the hotel where,
under the terms of the contract, he was entitled to
have and did have an office.
This action was brought to recover damages for
breach of contract.
The contract between the parties hereto contains a
clause which forms the subject matter of this
litigation. It is as follows: "This agreement to
remain in effect for a period of one year from date,
with preference over others of renewing for a
further period of one year."
There are two questions involved.
The first one is whether that portion of the
agreement just quoted gave the plaintiff an
enforceable right to renew the contract for a second
year.
The second is whether the plaintiff, even though he
had that right, did, by his acts and conduct, waive
that right and thereby exempt the defendant from
the liability, if any, which it incurred by its eviction
of plaintiff and the refusal to permit him to enjoy
the privilege for the second year.
As to the first question:
Counsel for the defendant company contended that
the clause quoted gave the appellant no right to
renew the contract sued upon for the second year.
They assert that it did nothing more than give to
plaintiff the right to compete with others in
obtaining defendant's five-passenger automobile
privilege for the said second year, with preference to
him to be engaged over his competitors in case his
offer was equally profitable to the defendant hotel.
They further contend that the competition into
which he was thus thrust did not relate exclusively

to the contract in which the clause is found or to the

terms and conditions of that contract; but that it
referred to any contract which the defendant hotel
offered to make or could make with any person,
whatever its terms and conditions might be.
On the other hand, plaintiff claims that the contract
gave him a right to renew and that the stipulation
for a renewal did not contemplate other or different
terms than those embraced in the contract to be
renewed and that by entering into the Brown
contract and evicting the plaintiff from the premises
the defendant violated its obligation to grant the
plaintiff a renewal of his contract for a second year.
We are constrained to agree with plaintiff's
contention.
It must be remembered that the contract relating to
the five-passenger automobile privilege was
complete contract, whereby the plaintiff was
required to furnish a certain number of fivepassenger automobile and to attend faithfully and
fully to the requirements of the patrons of the hotel,
for which he was to receive a stipulated
compensation. The construction placed upon the
clause by defendant deprives the plaintiff of any
right or interest in that particular contract or any
renewal thereof and relegates him to a scramble to
obtain not the same contractfor a second year but
an entirely different contract for one or more years.
By this contention the clause in question is torn
from the agreement in which it was placed by the
parties and made to do service not with relation to
the contract in which it is found but with relation to
another contract different in every conceivable
term.
It would see, other things being equal, that a clause
in a contract should be construed with reference to
the contract in which it is found, and if it accords a
privilege to one party or the other, it should be in
connection with the contract to which it refers. The
contract in which the clause is found was, generally
speaking, one whereby the plaintiff was to furnish a
certain number of five-passenger automobiles,
attend faithfully to the needs of the patrons of the
hotel, to continue his service for a period of one
year and to receive as compensation all the
proceeds of the business less, say, 10 per cent to be
paid to the defendant for the privilege. This, with
other details, is the contract in which the clause is
found and to which it refers. That clause was, in our
judgment, not intended to do duty with reference to
a contract, such as the hotel company made with
Brown, already referred to, by which the latter was
to have the five-passenger automobile privilege of
the hotel, as well as all other automobile and
carriage privileges, upon the payment to the hotel
of a flat sum of, say, P10,000 annually. According to
the defendant, the clause in question simply
concedes to plaintiff the privilege over Brown, if he
desired it, of taking and accepting the contract
which the hotel made with Brown. In other words,
defendant here contends, and the court below

found, that the clause in question did not confer a

certain, enforceable right upon the plaintiff with
reference to the contract in which the clause was
found, but simply gave him the preference over
others to make with the defendant company any
contract which the latter might be able to make with
any other person. As stated in the brief of counsel
in the trial court the stipulation for a renewal
conferred upon the plaintiff only the right to make
"as satisfactory an offer as any other person," and
that since plaintiff failed to make as favorable an
offer as did Mr. Brown, that is, since plaintiff would
do no more than propose a renewal of the old
contract, the hotel company had a right to contract
with Brown.
Manifestly the clause "with preference over others
of renewing for a further period of one year" was
inserted for a purpose. It was intended to confer a
right either on the plaintiff or upon the defendant.
That it was not intended to confer a right on the
defendant is conceded. It must have been intended,
therefore, to do something favorable to the plaintiff.
What was it?
While it is conceded that the clause quoted confers
no right on the defendant company, the latter,
nevertheless, contends that it conferred no right on
the plaintiff. Even though the clause, as claimed by
defendant, gave the plaintiff a preference over
others with respect to some other contract, a
contract which might be entirely distasteful to the
plaintiff in every term and which, wit his limited
resources, he would be unable to accept at all, such
preference would not be a substantial right. In fact,
it would be a right the effect of which would be not
only problematical but as likely to be injurious as
beneficial. If the clause conferred no right upon
either the plaintiff or the defendant, then it has no
meaning to which the law attaches importance. That
this was intended we cannot believe. We are
confident that it was placed in the contract for the
purpose of conferring upon the plaintiff an
enforceable right and one which related to the very
contract in which it was placed. This clause sets out
with sufficient clearness an agreement for a renewal
of the contract for a second year. It cannot have any
other significance in language. The grammatical
construction of the stipulation precludes the legal
construction given it by the court below. The clause
"with preference over others of renewing for a
further period of one year" does not modify
anything preceding it. It must be construed as a
separate and independent sentence whose subject
is suppressed. Should we supply the words omitted
by the draftsman, apparently with a view to brevity,
the stipulation would be plain; it would clearly
appear that it was intended to be a stipulation in
favor of the plaintiff.
Nor is the contention made by the defendant
relative to the phrase "with preference over others"
sufficient to destroy that construction. It is asserted
that this phrase deprived the plaintiff of the right of
renewing the existing contract and relegated him to

the barren right of accepting at the end of the first

year the bast terms that defendant might be able to
secure from other persons for the exclusive
concession to which the contract refers, thereby
transforming the stipulation for renewal in favor of
the plaintiff to one in favor of the defendant. As
already pointed out, the grammatical structure of
the stipulation shows both that the thing to be
renewed was agreement in force the first year and
that the party who possessed the right to renew
was the plaintiff.
The construction of the phrase "with preference
over others" contended for by the defendant and
found by the court below not only overthrows the
grammatical structure of the stipulation, namely,
the word "renew." The meaning of that word,
wherever applied with respect to real or personal
rights, is not a matter of discussion and, unless the
stipulation to renew expressly provides for
variations in the terms of the contract to the
renewed, the clause of renewal always relates to
the contract in which it is found. To attribute to the
words "with preference over others" a meaning that
nullifies an essential word of common usage and
conventional signification is to vary an elementary
rule of construction. While the use of the phrase
"over others" after the noun "preference," which
means the act of preference or the state of being
preferred or chosen before others, is not altogether
elegant English and is somewhat ambiguous with
respect to that right, including the other party to
the contract; and if the party conceding the right
adds to the contract a phrase "with preference over
others" with respect to that right, it adds nothing to
the contract and those words may be stricken out
without altering its natural or legal sense. Thus, in
the contract before us, if the defendant company,
by the clause in question, conceded to the plaintiff
an enforceable right, then the plaintiff received
preference over all others with respect to that right
and the adding of the words "with preference over
others" did not serve to deprive the plaintiff of the
right thus conceded, and those words should not be
so construed as to effect that end. They were
useless and redundant and could have had no force
or effect without destroying the very purpose for
which the clause itself was inserted. If this
construction were not followed, we would be
obliged, as already intimated, to declare that the
phrase "renewing for a further period of one year"
would have no adequate significance. The
construction contended for by the defendant wipes
these words from the contracts and leaves it in that
respect the same as if they had not been inserted.
No such construction can be permitted, as it takes
from the contract words of the most material
signification. If, in the construction of a contract,
one of two clauses must be eliminated, it must be
that one the influence of which upon the essentials
of the contract is the least. As we have shown, the
words "with preference over others" are of no
substantial significance. On the other hand, the

phrase providing for a renewal is of very great

materiality and importance and carries into the
contract an idea which would not have there if it
had not been used.
As to the second question:
What appears to be, perhaps, the main contention
of the defendant in this case is that plaintiff never
made a request for the renewal of the contract for
the second year but, instead of so doing, sought to
make other and different arrangements with the
hotel and with Brown, to whom, as we have seen,
the hotel conceded the privilege which is the subject
of this action, thereby indicating an intention to
abandon his right, if any he had, to a renewal of the
contract for the second year. It is asserted by
counsel for the defendant that in July plaintiff
attempted to enter into a partnership agreement
with the hotel relative to the privilege in question
for the period covering the second year of plaintiff's
contract, and that, filing in that, and believing that
Brown would secure the privilege from the hotel, he
thereupon sough to make a contract with Brown by
which he could assist him in fulfilling his contract
with the hotel. It is even contended by defendant
that plaintiff actually did enter into an agreement
with Brown relative to that matter.
A careful reading of the testimony in this case leads
us to differ with counsel for the appellee as to the
real facts of the case and constrains us to differ
materially from the conclusions drawn by counsel
for the defendant from the acts of the plaintiff as se
out in the record.
As to the facts, we may say that the evidence does
not sustain the contention that plaintiff entered into
a contract with Brown. The proof discloses that the
plaintiff sought to make arrangements with the
hotel of a nature different from those contained in
the contract under consideration and also that he
had negotiations with Brown looking to an
agreement with him whereby he might assist him in
handling the five-passenger automobile business
under the privilege which it appeared the hotel
would concede to him. No contract, however, was
made with either and the plaintiff at no time found
himself under any obligation to the defendant or
Brown by reason of the acts which appellee makes
the basis of its argument.
To us the important fact is that before the plaintiff
entered into negotiations or made any offers with
respect to the five-passenger automobile privilege
either with or to the defendant or Brown, the hotel
had impliedly denied the plaintiff's rights with
respect to the contract before us, had refused to
recognize the clause for a renewal of the contract
for a second year as binding upon it, and, as a
result, as early as June, 1913, had, according to is
brief in this court "invited proposals from various
garages for its automobile service for the ensuing
year." In other words, the defendant had, prior to
the negotiations and offers of plaintiff, repudiated
its contract with him so far as it related to the

renewal for the second year and was preparing itself

to make a contract with any person with whom it
might secure the most advantageous terms.
Not only did the defendant advertise for bids or
offers concerning its automobile privilege for the
period embraced in the second year of the contract
under consideration, but sometime before the first
year of that contract had expired the defendant had
actually made a contract with Brown by which it had
conceded to him said privilege for the period
embraced in the second year of the plaintiff's
contract. Thus, when the first year of plaintiff's
contract terminated, he found that the defendant
had rejected its obligation under the renewal clause,
had let the contract to another person, and when he
sought, as he did seek, to continue in the
performance of his contract for the second year,
defendant evicted him from the premises and
denied him the right which he sought to exercise.
We are of the opinion that, when a person who is
under an obligation to another to perform certain
acts upon the demand of that person, repudiates
that obligation prior to the time when the demand
for its fulfillment is necessary, the person to whom
that obligation runs is not required to sit down, fold
his hands and calmly await the disaster which the
violation of the obligation entails. We believe that,
under such circumstances, he is entirely within his
rights and, therefore, waives nothing, when he
seeks other employment or the same or similar
employment with others, or attempts to make other
arrangement relative to the same subject matter
even with the person or corporation which owed him
the obligation repudiated. So long as it appears with
fair clearness that his purpose is to protect himself
against the result of the repudiation, his acts do not
constitute a waiver of his rights under the obligation
repudiated, nor do they estop him from making a
claim by reason of its breach. The waiver will not be
presumed; and, if the intention to waive or release
is denied, such waiver or release must be proven by
the party alleging it by a preponderance of the
evidence.
The legitimate object is to enable the party upon
whom it is made to perform his contract and
discharge his liability agreeable to the nature of it
without a suit at law; and whenever such party
wholly denies the right of the other to assert title in
himself or unqualifiedly refuses performance of the
obligation, a demand is made useless, and therefore
unnecessary, since lex neminem cogit ad vana. For
the same reason and upon the same principle the
failure to make a demand before suit may be cured
by proof that the defendant could not have complied
with the demand if it had been made; as where a
person contracts to assign his interest in certain
lands to another within a specified time upon
payment of consideration therefor, and the vendor
prior to the stipulated time assigns his interest to a
stranger. In such case a request by the vendee for
the performance of the contract is unnecessary. The
rule stated otherwise is to the effect that where a

party bound to the future performance of a contract

puts it out of his power to perform it, the other
party may treat this as a breach and sue him at
once, having thus an immediate right of action for
breach of the contract by anticipation.
It may not be amiss, perhaps, to note that the
defendant company was in no way injured by the
acts of the plaintiff complained of. There resulted no
damage directly nor did the company change
position to its disadvantage by reason of his
affirmative acts or of his neglect, if there were such
to demand a renewal prior to the termination of the
first year under the agreement.
It may be noted that the plaintiff was under no
obligation to defendant with respect to a renewal of
the contract. The obligation was wholly on the side
of the defendant. Therefore, in doing whatever he
did to obtain other employment, he was not
violating any obligation which he owed to the
defendant and, therefore, gave it no legal reason for
complaint. The plaintiff had a right to look about for
a better situation and to seek to improve his
condition with respect to the period embraced
within the second year referred to in the contract.
We do not believe that the contract should be
construed
to
deny
plaintiff
the
ordinary
opportunities which men have for the betterment of
their condition, especially after the other party to
the contract has repudiated it. Even though one is
engaged in the performance of a contract which he
has with another, that fact does not require him to
stand still and refrain from all attempts to improve
his condition, after the termination of the contract
which he is engaged in performing, for fear that
such activities will preclude him from enforcing
obligations which the others owes him. At the time
of the activities of the plaintiff complained of the
time had not yet arrived when plaintiff was bound to
exercise his option, if it may be called an option,
with respect to the second year referred to in the
contract. Defendant was in no way misled and in no
way injured by plaintiff activities.
The remaining question relates to plaintiff's
damages.
The plaintiff claims his damage to be P10,800,
basing that claim upon the profits which he would
have received if he had continued the business for
the second year.
The appellee makes no objection to this amount,
the question of the amount of damages not having
been referred to in its brief. It is the practice of this
court, in case of reversal of a judgment dismissing
the complaint on the merits, to examine the
evidence and enter or order entered the judgment
which the inferior court should have rendered; and,
where the action is for a sum of money or damages,
to find from the evidence the amount due or the
damages suffered and to render or order the trial
court to render judgment for the amount. We

assume that the practice is thoroughly understood

and that if appellee had any objection to urge as to
the amount of damages which should be awarded to
the plaintiff in case judgment should be found for
him in this court, it would have presented it in its
brief.
The only damages claimed relate to profits. Article
1106 and 1107 of the Civil Code reads as follows:
Indemnity for losses and damages includes
not only the amount of the loss which may
have suffered, but also that of the profits
which the creditor many have failed to
realize, reserving the provisions contained in
the following articles.
The losses and damages for which a debtor
in good faith is liable, are those foreseen or
which may have been foreseen, at the time
of constituting the obligation, and which
may be necessary consequence of its nonfulfillment.
In case of fraud, the debtor shall be liable
for all those which clearly may originate
from the no-fulfillment of the obligation.
Under these provisions we are required to
determine the amount of profits which plaintiff
failed to realize by reason of the refusal of
defendant to permit him to continue under the
contract for the second year and which were
foreseen or which might have been foreseen at the
time the contract was made and which were a
necessary consequence of the breach. Plaintiff
testified that he made P11,000 profit the first year
and that he would unquestionably have made a net
profit of P1,200 a month if he had been left to enjoy
the second year of the contract. There is no
evidence contradicting this, and while the
estimation of speculation, it is inherent in the nature
of the subject matter and not in its manner of
treatment. As was said in the case of Ft. Smith &
W.R. Co. vs. Williams (30 Okla., 726):
This has ever been looked upon the treated
by the courts as a vexed and difficult
question. It has been, and will always be,
impossible to law down any fixed and
definite rule correctly applicable in all cases.
There has never been a rule established
which was decisive and universally followed
by the courts in all cases, but the inclination
of the earlier authorities to hold that
contemplated profits per se were improper
elements of damage has given way under
the riper wisdom of jurisprudence, and,
instead of holding to the earlier inclination,
the weight of authorities in modern
jurisprudence either holds or concedes that,

where a loss of profits is not too remote or

conjectural to be suspectible of computation
with reasonable accuracy, they are proper
elements of damage.
This rule is recognized with approval by each
and all of the following authorities cited by
counsel for plaintiff in error in support of his
first proposition: Strawn vs. Cogswell (28
Ill.,
461); Frazer
vs.
Smith (60
Ill.,
145); Galveston H. and S. A. R. Co. vs.
Jessee (2 Willson Civ. Cas. Ct. App., sec.
405), and authorities cited; People's Sav.
Bank of Waterloo vs. C. F. Transit Co. (118
Iowa, 740, 92 N. W., 691); Bartow vs. Erie
R. Co. (73 N. J. L., 12, 62 Atl., 489); H. and
T. C. R. R. Co. vs. Hill (63 Tex., 381, 51 Am.
Rep., 462);Western U. Teleg. Co. vs.
Crall (39
Kan.,
580,
18
Pac.,
719); Moulthrop vs. Hyett (105 Ala., 493, 53
Am. St. Rep., 139, 17 So., 33); Williams vs.
Island City Mercantile and Mill Co. (25 Ore.
573, 37 Pac., 51); Brigham and Co. vs.
Carlisle (78 Ala., 244, 56 Am. Rep., 28); Gas
Co.vs. Glass Co. (56 Kan., 622, 54 Am. St.
Rep., 598, 44 Pac., 621); Cutting vs.
Miner (30 App. Div., 457, 52 N. Y. Supp.,
288); Griffin vs. Colver (16 N. Y., 489, 69
Am. Dec., 718); Western Gravel Road Co.
vs. Cox (39 Ind., 263); Florida Northern R.
Co. vs. Southern Supply Co. (112 Ga., 1, 37
S. E., 130); Bell vs. Reynolds (78 Ala., 511,
56 Am. Rep., 55); Pollock and Co. vs.
Gantt (69
Ala., 373,
44
Am.
Rep.,
519); Witherbee vs. Meyer (115 N. Y., 446,
50 N. E., 58).
xxx
xxx
xxx
None of the above authorities have held
against the justness of the rule of applying
profits as a measure of damages, but have
merely held it inapplicable to the cases
decided. There is more or less inaccuracy in
every action for damages for breach of
contract, but in order to justify a recovery in
any case, assuming that a breach has been
committed, there are two necessary
elements to be considered: One that a
damage has been done; the other that such
damage is the result of the breach. The
amount of the one should be computed with
reasonable accuracy. The fact of the other
must be determined with reasonable
certainty. A less degree of accuracy is
required in the former than of certainty in
the latter, but neither is required to be
absolute or beyond conjectural possibilities.
Where it reasonably appears that a party
has been damaged, and that such damage is
the direct result of the breach, then a
recovery is justified. The next step is to
ascertain
how
much
will
reasonably
compensate the injured party. This should

be computed by the plainest, easiest, and

most accurate measure which will do justice
in the premises, and if from the conditions in
the contract, and the nature of the breach, it
reasonably appears that the extent or
amount of damages may be more readily,
easily, correctly, and justly ascertained by
applying the loss of profits as a measure, if
it is evident that profits were lost and the
amount thereof can be calculated with
reasonable accuracy, then such profits are
the true measure to be applied. In such
cases, however, it should appear evident
that profits were lost. The amount may be
estimated with only reasonable accuracy;
but the fact that profits were lost should
require stricter proof. This doctrine is
deduced from a vast weight of authorities,
both American and English, including 2
Joyce on Damages, and authorities; 1
Sutherland on Damages (3 ed.) and notes
and cases cited; 1 Sedgwick on Damages
(8th ed.); 8 Am. and Eng. Enc. (2 ed. and
authorities cited in notes, 13 Cyc. and cases
cited Bryson vs. McCone (121 Cal., 153; 53
Pac., 637); Blagen vs. Thompson (23 Ore.,
239; 18 L. R. A., 315; 31 Pac., 647); Dart
vs. Laimbeer (107 N. Y., 664; 14 N. E.,
291); Brown vs. Hadley (43 Kan., 267; 23
Pac., 492); Hoge vs. Norton (22 Kan.,
374); Hadley vs. Baxendale (9 Exch., 341; 2
C. L. R., 517; 23 L. J. Exch. N. S., 179; 18
Jur., 358; 2 Week. Rep., 302; 26 Eng. L. and
Eq. Rep., 398; 5 Eng. Rul. Cas., 502; a
leading
case
both
in
England
and
American); Tootle vs. Kent (12 Okla., 674;
73 Pac., 310); Choctaw Ry. Co. vs.
Jacobs (15 Okla., 493; 82 Pac., 502); Mace
vs. Ramsey (74 N. C., 11); Butler vs.
Manhattan R. R. Co. (143 N. Y., 417; 26 L.
R. A., 46; 42 Am. St. Rep., 738; 38 N. E.,
454); Bluegrass Cordage Co. vs. Luthy (98
Ky., 583; 33 S. W., 835); Simpson vs.
Londen etc. R. Co. (I. Q. B. Div., 274; 45 L.
J. Q. B. N. S., 182; 33 L. T. N. S., 805; 24
Week. Rep., 294).
In the case before us there seems to be as little
speculation in determining the profits which the
plaintiff might have recovered as is usual in cases
where the time for which the profits are to be
recovered extends over a considerable period of
time. It is undisputed that the business was a very
profitable one the first year and that the second
year would have been more profitable than the first.
While the estimate of the amount of profits for the
second year is an estimate of necessity, it is one
which is based upon facts testified to by the
plaintiff, which were within his knowledge and which
appear to the court to sustain his contention. While
the evidence is not as conclusive as in cases where
the damages are certain and capable of accurate
statement, we are satisfied with its sufficiency,

particularly in view of the fact that all that courts

may require of litigants is the production of the best
evidence of which the case is susceptible.
As to whether or not the plaintiff in an action of this
character may recover only that portion of the
profits which had accrued up to the time of bringing
the action, or whether he may sue for all the
damages resulting from the breach in a single
action, even though that action is begun long before
the period during which the profits will accrue has
expired, we may say that, in our judgment, the
weight of authority is to the effect that the plaintiff
need bring but one action and that he may recover
the damages sustained for the whole period even
though it be by anticipation.lawph!1.net
The principle on which the case of Pierce vs.
Tennessee Coal, Iron and Railroad Co. (173 U. S.,
1) is decided is, in our judgment, applicable to the
case at bar. That was a case in which the plaintiff,
while employed as a machinist in the defendant's
coal mine in Alabama, was seriously hurt under
circumstances which the plaintiff claimed, and the
defendant denied, rendered it liable to him in
damages. The parties were desirous of settling and
compromising plaintiff's claim for damages for the
injuries and, after repeated negotiations, they made
an agreement by which the defendant was to pay to
the plaintiff regular wages while he was disabled, to
furnish him with such supplies as he might choose
to get from the commissary, to give him coal and
wood for fuel at his dwelling house and the benefitof
a garden belonging to the defendant. The
agreement was carried out by the defendant for
some time and then it discharged the plaintiff from
its employ before his disability ceased.
After discussing certain phases of the contract and
declaring its nature and purpose, the court said:
It apears to us to be equally clear that the
Circuit Court of the United States erred in
excluding the evidence offered by the
plaintiff, in restricting his damages to the
wages due and unpaid at the time of the
trial, and in declining to instruct the jury as
he requested.
Upon this point the authorities are
somewhat conflicting; and there is little to
be found in the decision of this court, having
any bearing upon it, beyond the affirmance
of the general propositions that "in an action
for a personal injury the plaintiff is entitled
to recover compensation, so far as it is
susceptible of an estimate in money, for the
loss and damage caused to him by the
defendant's negligence, including not only
expenses incurred for medical attendance,
and a reasonable sum for his pain and
suffering, but also a fair recompense for the
loss of what he would otherwise have earned
in his trade or profession, and has been

deprived of the capacity of earning by the

wrongful act of the defendant," and, "in
order to assist the jury in making such an
estimate, standard life and annuity tables,
showing at any age the probable duration of
life, and the present value of a life annuity,
are competent evidence" (Vicksburg and M.
Railroad Co. vs. Putnam, 118 U. S., 554);
and that in an action for breach of contract
'the amount which would have been received
if the contract had been kept, is the
measure of damages if the contract is
broken' (Benjamin vs. Hilliard, 23 How., 149,
167).
But the recent tendency of judicial decisions
in this country, in actions of contract, as well
as in actions of tort, has been towards
allowing entire damages to be recovered,
once for all, in a single action, and thus
avoiding the embarrassment and annoyance
of repeated litigation. This especially
appears by well considered opinions in cases
of agreements to furnish support or to pay
wages, a few only of which need be referred
to.
The court, after discussing Parker vs. Russell (133
Mass., 74), Schell vs. Staub (7 Lea, 397), holding
the doctrine just quoted, further said:
These cases appear to this
upon sound principles, and to
rules for the assessment of
damages in the case at bar. . .

court to rest
afford correct
the plaintiff's
.

If these facts were proved to the satisfaction

of the jury, the case would stand thus: The
defendant committed an absolute breach of
the contract, at a time when the plaintiff was
entitled to require performance. The plaintiff
was not bound to wait to see if the
defendant would change its decision, and
take him back into its service; or to resort to
successive actions for damages from time to
time; or to leave the whole of his damages
to
be
recovered
by
his
personal
representative after his death. But he had
the right to elect to treat the contract as
absolutely and finally broken by the
defendant; to maintain this action, once for
all, as for a total breach of the entire
contract; and to recover all that he would
have received in the future, as well as in the
past, if the contract had been kept. In so
doing, he would simply recover the value of
the contract to him at the time of the
breach, including all the damages, past or
future, resulting from the total breach of the
contract. The difficulty and uncertainty of
estimating damages that the plaintiff may
suffer in the future is no greater in this

action of contract than they would have

been if he had sued the defendant, in an
action of tort, to recover damages for the
personal injuries sustained in its service,
instead of settling and releasing those
damages by the contract now sued on.
In assessing the plaintiff's damages,
deduction should, of course, be made of any
sum that the plaintiff might have earned in
the past or might earn in the future, as well
as the amount of any loss that the
defendant had sustained by the loss of the
plaintiff's services without the defendant's
fault.
From the amount of damages proved in the case at
bar there would have been deducted, if there had
been any proof to that effect, whatever profits
plaintiff had gained up to the time of the action or
might reasonably be expected to gain during the
period sued for. No evidence, however, has been
introduced on that subject and we do not find it
necessary to go into that question. We are of the
opinion that the great weight of authority is to the
effect that the opportunity to earn wages or profits
in reduction of the damages claimed will not be
presumed but must be affirmatively shown by the
defendant. (Van Winkle vs. Satterfield, 58 Ark., 617,
623, 25 S. W. Rep., 1113, 23 L. R. A., 853;
Kelley vs. Louisville and N. R. Co., 49 Ill. App., 304;
Fish vs. Glass, 54 Ill. App., 655; Hamilton vs.Love,
152 Ind., 641, 53 N. E. Rep., 181, 71 Am. St. Rep.,
384; Pennsylvania Co. vs. Dolan, 6 Ind. App., 109,
32 N. E. Rep., 802, 51 Am. St. Rep., 289;
Farrel vs. School District, 98 Mich., 43, 56 N. W.
Rep., 1053; Allen vs.Whitlark, 99 Mich., 492, 58 N.
W. Rep., 470; Chisholm vs. Preferred Bankers' L.
Assur. Co., 112 Mich., 50, 70 N. W. Rep., 415;
Boland vs. Glendale Quarry Co., 127 Mo., 520, 30 S.
W. Rep., 151; Bassett vs. French, 10 N. Y. Misc.,
672, 31 N. Y. Supp., 667; Heyer vs. Cunningham
Piano Co., 6 Pa. Super. Ct., 504; Winkler vs. Racine
Wagon and Carriage Co., 99 Wis., 184, 74 N. W.
Rep., 793; Mathesius vs. Brooklyn Heights R. Co.,
96 Fed. Rep., 792; Rosenberger vs. Pacific Coast Ry.
Co., 111 Cal., 313, 43 Pac. Rep., 963;
Pinet vs. Montague, 103 Mich., 516, 61 N. W. Rep.,
876; Dearing vs. Pearson, 8 N. Y. Misc., 269, 276;
28
N.
Y.
Supp.,
715,
citing
the
text;
Babcock vs. Appelton Manuf. Co., 93 Wis., 124, 67
N. W. Rep., 33; Dunn vs Daly, 78 Cal., 640, 21 Pac.
Rep., 377; Brown vs. Board of Education, 29 Ill.
App., 572; School Directors vs. Kimmel, 31 Ill. App.,
537; Miller vs. Boot and Shoe Co., 26 Mo. App., 57;
Koenigkraemer vs. Missouri Glass Co., 24 Mo. App.,
124; Saxonia Mining and R. Co. vs. Cook, 7 Colo.,
569, 4 Pac. Rep., 1111; Ansley vs. Jordan, 61 Ga.,
482; Roberts vs. Crowley, 81 Ga., 429, 7 S. E. Rep.,
740; Hinchliffe vs. Koontz, 121 Ind., 422, 23 N. E.
Rep., 271; Larkin vs. Hecksher, 51 N. J. L., 133, 16
Atl. Rep., 703, 3 L. R. A., 137; Fee vs. Orient
Fertilizing
Co.,
36
Fed.
Rep.,
509;

Costigan vs. Mohawk, etc. R. Co., 2 Denio, 609;

Howard vs, Daly, 61 N. Y., 362, 19 Am. Rep., 285;
Gillis vs. Space, 63 Barb., 177; King vs.Sturer, 44
Pa., 99, 84 Am. Dec., 419; Griffin vs. Brooklyn Ball
Club, 68 App. Div., 566, 73 N. Y. Supp., 864;
Chamberlain vs. Morgan, 68 Pa., 168. See Gazette
Printing
Co. vs. Morss,
60
Ind.,
153;
Williams vs. Chicago Coal Co., 60 Ill., 149;
Sedgwick on Damages, vol. 2, sec. 667; Labatt's
Master and Servant, sec. 399.)
The cause is returned to the Court of First Instance
whence it came with instructions to enter a
judgment in favor of the plaintiff and against the
defendant for the sum of P10,800, with costs in that
instance but without costs in this.

G.R. No. L-40233

February 14, 1934

THE BACHRACH MOTOR CO., INC., plaintiffappellee,

vs.
JOSE
ESTEVA
and
TEAL
MOTOR
CO.,
INC., defendants.
JOSE ESTEVA, appellant.
Gregorio Perfecto and Zosimo Rivas for appellant.
Mariano Ezpeleta for appellee.
MALCOLM, J.:

This case presents the unusual circumstances of a

chattel mortgage, the debt evidenced by a series of
promissory notes executed by two parties, the
holder of the mortgage retaining the mortgage but
transferring the notes to a third party, the
mortgagee foreclosing the mortgage, and the third
party suing upon the promissory notes. A skeleton
narration of the facts will more clearly elucidate the
foregoing statement, and may be made as follows:
Beginning with 1927, Jose Esteva bought a number
of motor trucks from the Teal Motor Co., Inc. The
latter company assured Esteva that it would not
make any attempt to repossess the property in less
than three months after the due date of any one
note, but this assurance, dated September 25,
1929, referred to the set of notes executed on that
date. On April 8, 1930, a chattel mortgage was
made
which
consolidated
all
of
Esteva's
indebtedness to the Teal Motor Co., Inc. The
mortgage was for the sum of P54,500, and was
given as security for the payment of twenty-two
promissory notes maturing on specified dates. On
April 12, 1930, the Teal Motor Co., Inc., endorsed
the promissory notes to the Bachrach Motor Co.,
Inc. Esteva failed to make payments of certain
notes as they became due. A proposition was made
by him to the Teal Motor Co., Inc., for the formation
of a corporation, but the papers for this purpose
were never signed. On March 31, 1931, foreclosure
proceedings were started by the Teal Motor Co.,
Inc., and shortly thereafter the trucks, trailers, and
automobile of Esteva were sold to the highest
bidder, which was the Teal Motor Co., Inc., for the
sum of P20,000. Subsequently, on December 9,
1931, the instant action was begun by the Bachrach
Motor Co., Inc., to secure the payment from Jose
Esteva and the Teal Motor Co., Inc., of the amounts
due under the promissory notes. The attempt of
Esteva to present a cross-complaint for damages
failed, and the case went to trial on the complaint of
the plaintiff and the answers of the defendants.
Judgment was rendered in favor of the plaintiff and
against the defendants, jointly and severally, for the
sum of P34,749.41, with interest at the rate of 12
per cent per annum from December 10, 1931, and
with an additional sum of P3,483.72 as penalty, and
in favor of the plaintiff and against the Teal Motor
Co., Inc., for the sum of P20,000, with interest at
the rate of 12 per cent per annum from December
10, 1931, with an additional sum of P2,000 as
penalty, with costs against the defendants.
Appealing from the judgment just mentioned,
Esteva makes the following assignments of error:
1. The trial court erred in not admitting Jose
Esteva's amended answer dated February
12, 1932.

2. The trial court erred in admitting as part

only of the special defense of Jose Esteva his
cross-complaint dated June 15, 1932.
3. The trial court erred in stating that as the
Teal Motor Co., Inc., has not accepted the
proposition of Jose Esteva to form a
corporation to assume his obligation, there
was no novation of contract.
4. The trial court erred in stating that the
foreclosure of the mortgage of Jose Esteva
was timely.1vvphi1.net
5. The trial court erred in not deciding that
the foreclosure of the mortgage of Jose
Esteva by Teal Motor Co., Inc., was illegal.
6. The trial court erred in not deciding that
there was collusion between plaintiff and
defendant Teal Motor Co., Inc., in depriving
Jose Esteva illegally of his mortgaged
properties.
7. The trial court erred in not granting the
motion of Jose Esteva for new trial.
8. The trial court erred in deciding that the
damages proved by Jose Esteva were
speculative.
9. The trial court erred in not adjudging
plaintiff and defendant Teal Motor Co., Inc.,
responsible for the return of Jose Esteva's
vehicles and for the payment of the
corresponding damages.
With reference to the assigned errors, we may say
generally that we either find unsustainable or
unnecessary to discuss errors 1, 2, 3, 4, 7, and 8,
and that we find sustainable error 5 in toto and
errors 6 and 9 in part.
Our Chattel Mortgage Law, Act No. 1508, in its
section 3, defines a chattel mortgage as "a
conditional sale of personal property as security for
the payment of a debt, or the performance of some
other obligation specified therein." Section 5 of the
law sets forth the form of a chattel mortgage, which
form was substantially followed in the present
instance. Otherwise, the law is silent with reference
to the facts before us. However, there are certain
basic principles which it is only needful to write
down in order to see clearly the correct result.
In the law of chattel mortgages the debt is the
principal thing. The mortgage is but an incident to
the debt. Separated from the debt, the mortgage
has no determinate value. Customarily the
foreclosure of the mortgage accompanied as it is by

the debt follows in due course without mishap.

Ordinarily also, the transfer of the debt carries with
it the mortgage. So a sale and delivery of notes
secured
by
a
chattel
mortgage,
although
unaccompanied by an assignment of the mortgage
itself, authorizes the purchaser to act as the
mortgagee's agent and to do whatever he could
have done to enforce the mortgage. So likewise,
whatever discharges the debt discharges the
mortgage. All this unless there be an agreement to
the contrary.
Possibly as good a presentation of the applicable
law as any is that to be found in the old case of
Langdon vs. Buel ( [1832], 9 Wend. N. Y., 80). This
was a case of a chattel mortgage being executed on
a steam engine and with the debt shown by two
notes. The notes which this mortgage was given to
secure were assigned to a third party. The question
was, did not the mortgage pass with the notes as
incidents to them and should the action not have
been brought in the name of the third party? The
court answered: "A mortgage of either real or
personal estate is but an accessory or incident to
the debt, or the security which is given as the
evidence of the debt. The assignment of the
security passes the interest in the mortgage. The
mortgage cannot exist as an independent debt. If
by special agreement it does not accompany the
security assigned, it is ipso facto extinguished, and
ceases to be a subsisting demand."
In the instant case, the mortgage cannot be
impliedly found to have passed as an incident of the
debt because there was an agreement to the
contrary. The Teal Motor Co., Inc., retained the
mortgage and foreclosed it, while the Bachrach
Motor Co., Inc., received the promissory notes and
sued upon them. What was the legal effect of this
unique arrangement knowingly entered into? As to
the mortgage, it ceased to exist because there was
no debt to which it could attach. The foreclosure
proceedings were as a consequence a nullity. As to
the debt, the promissory notes unpaid, they were
obligations of Esteva to the Teal Motor Co., Inc.,
which assigned its rights to the Bachrach Motor Co.,
Inc. The latter, as a holder of the notes, could sue
upon them. But what cannot be countenanced is the
separation of the notes from the mortgage and both
the foreclosure of the mortgage and a suit on the
notes.
The rights of Bachrach Motor Co Inc,. are as above
indicated and include the privilege of securing
payment from Esteva of all that is due on the
promissory notes. The rights of Esteva, who has
been injured by an illegal foreclosure of the
mortgage, consist in securing damages from the
entities who caused him these damages. In this
connection it may be said that the evidence is
sufficient to establish the interlocking relationship

between the Teal Motor Co., Inc., and the Bachrach

Motor Co., Inc. The action of Esteva would,
therefore, lie against both corporations. This
conclusion is the more evident when we realize that
to hold otherwise might simply result in permitting
Esteva to prove damages against the Teal Motor
Co., Inc., a corporation with possibly no visible
assets. The corresponding obligations of the
Bachrach Motor Co., Inc., the Teal Motor Co., Inc.,
and Jose Esteva will necessarily have to be
determined at a new trial, at which the Bachrach
Motor Co., Inc., can establish the debt due from
Esteva and the latter can set off against the debt
whatever damages he can prove at the trial.
Agreeable to the foregoing pronouncements, the
appealed judgment will be set aside, and the record
remanded for a new trial, with permission to the
parties to file their corresponding pleadings, and
present their evidence. So ordered, the costs of this
instance to be paid by the plaintiff and appellee.

V.E. Del Rosario &

appellee M. Nieto, Jr.

Associates

for

defendant-

A.R. Naravasa & Pol Tiglao, Jr. for defendantappellee Interphil Promotions, Inc.
RESOLUTION

FERNAN, J.:
This is an appeal interposed by Solomon Boysaw
and Alfredo Yulo, Jr., from the decision dated July
25, 1963 and other rulings and orders of the then
Court of First Instance [CFI] of Rizal, Quezon City,
Branch V in Civil Case No. Q-5063, entitled
"Solomon Boysaw and Alfredo M. Yulo, Jr., Plaintiffs
versus Interphil Promotions, Inc., Lope Sarreal, Sr.
and Manuel Nieto, Jr., Defendants," which, among
others, ordered them to jointly and severally pay
defendant-appellee Manuel Nieto, Jr., the total sum
of P25,000.00, broken down into P20,000.00 as
moral damages and P5,000.00 as attorney's fees;
the defendants-appellees Interphil Promotions, Inc.
and Lope Sarreal, Sr., P250,000.00 as unrealized
profits, P33,369.72 as actual damages and
P5,000.00 as attorney's fees; and defendantappellee Lope Sarreal, Sr., the additional amount of
P20,000.00 as moral damages aside from costs.
The antecedent facts of the case are as follows:
On May 1, 1961, Solomon Boysaw and his then
Manager, Willie Ketchum, signed with Interphil
Promotions, Inc. represented by Lope Sarreal, Sr., a
contract to engage Gabriel "Flash" Elorde in a
boxing
contest
for
the
junior
lightweight
championship of the world.
It was stipulated that the bout would be held at the
Rizal Memorial Stadium in Manila on September 30,
1961 or not later than thirty [30] days thereafter
should a postponement be mutually agreed upon,
and that Boysaw would not, prior to the date of the
boxing contest, engage in any other such contest
without the written consent of Interphil Promotions,
Inc.

G.R. No. L-22590 March 20, 1987

SOLOMON BOYSAW and ALFREDO M. YULO,
JR., plaintiffs-appellants,
vs.
INTERPHIL
PROMOTIONS,
INC.,
LOPE
SARREAL,
SR.,
and
MANUEL
NIETO,
JR., defendants-appellees.
Felipe Torres
appellants.

and

Associates

for

plaintiffs-

On May 3, 1961, a supplemental agreement on

certain details not covered by the principal contract
was entered into by Ketchum and Interphil.
Thereafter, Interphil signed Gabriel "Flash" Elorde to
a similar agreement, that is, to engage Boysaw in a
title fight at the Rizal Memorial Stadium on
September 30, 1961.
On June 19, 1961, Boysaw fought and defeated
Louis Avila in a ten-round non-title bout held in Las
Vegas, Nevada, U.S.A. [pp. 26-27, t.s.n., session of
March 14, 1963].

On July 2, 1961, Ketchum on his own behalf and on

behalf of his associate Frank Ruskay, assigned to J.
Amado Araneta the managerial rights over Solomon
Boysaw.

occasioned by the refusal of Interphil and Sarreal,

aided and abetted by Nieto, Jr., then GAB Chairman,
to honor their commitments under the boxing
contract of May 1,1961.

Presumably in preparation for his engagement with

Interphil, Solomon Boysaw arrived in the Philippines
on July 31, 1961.
On September 1, 1961, J. Amado Araneta assigned
to Alfredo J. Yulo, Jr. the managerial rights over
Boysaw that he earlier acquired from Ketchum and
Ruskay. The next day, September 2, 1961, Boysaw
wrote Lope Sarreal, Sr. informing him of his arrival
and presence in the Philippines.

On the first scheduled date of trial, plaintiff moved

to disqualify Solicitor Jorge Coquia of the Solicitor
General's Office and Atty. Romeo Edu of the GAB
Legal Department from appearing for defendant
Nieto, Jr. on the ground that the latter had been
sued in his personal capacity and, therefore, was
not entitled to be represented by government
counsel. The motion was denied insofar as Solicitor
General Coquia was concerned, but was granted as
regards the disqualification of Atty. Edu.

On September 5, 1961, Alfredo Yulo, Jr. wrote to

Sarreal informing him of his acquisition of the
managerial rights over Boysaw and indicating his
and Boysaw's readiness to comply with the boxing
contract of May 1, 1961. On the same date, on
behalf of Interphil Sarreal wrote a letter to the
Games and Amusement Board [GAB] expressing
concern over reports that there had been a switch
of managers in the case of Boysaw, of which he had
not been formally notified, and requesting that
Boysaw be called to an inquiry to clarify the
situation.

The case dragged into 1963 when sometime in the

early part of said year, plaintiff Boysaw left the
country without informing the court and, as alleged,
his counsel. He was still abroad when, on May 13,
1963, he was scheduled to take the witness stand.
Thus, the lower court reset the trial for June 20,
1963. Since Boysaw was still abroad on the later
date, another postponement was granted by the
lower court for July 23, 1963 upon assurance of
Boysaw's counsel that should Boysaw fail to appear
on said date, plaintiff's case would be deemed
submitted on the evidence thus far presented.

The GAB called a series of conferences of the

parties concerned culminating in the issuance of its
decision to schedule the Elorde-Boysaw fight for
November 4, 1961. The USA National Boxing
Association which has supervisory control of all
world title fights approved the date set by the GAB

On or about July 16, 1963, plaintiffs represented by

a new counsel, filed an urgent motion for
postponement of the July 23, 1963 trial, pleading
anew Boysaw's inability to return to the country on
time. The motion was denied; so was the motion for
reconsideration filed by plaintiffs on July 22, 1963.

Yulo, Jr. refused to accept the change in the fight

date, maintaining his refusal even after Sarreal on
September 26, 1961, offered to advance the fight
date to October 28, 1961 which was within the 30day period of allowable postponements provided in
the principal boxing contract of May 1, 1961.

The trial proceeded as scheduled on July 23, 1963

with plaintiff's case being deemed submitted after
the plaintiffs declined to submit documentary
evidence when they had no other witnesses to
present. When defendant's counsel was about to
present their case, plaintiff's counsel after asking
the court's permission, took no further part in the
proceedings.

Early in October 1961, Yulo, Jr. exchanged

communications with one Mamerto Besa, a local
boxing promoter, for a possible promotion of the
projected Elorde-Boysaw title bout. In one of such
communications dated October 6, 1961, Yulo
informed Besa that he was willing to approve the
fight date of November 4,1961 provided the same
was promoted by Besa.
While an Elorde-Boysaw fight was eventually
staged, the fight contemplated in the May 1, 1961
boxing contract never materialized.
As a result of the foregoing occurrences, on October
12, 1961, Boysaw and Yulo, Jr. sued Interphil,
Sarreal, Sr. and Manuel Nieto, Jr. in the CFI of Rizal
[Quezon City Branch] for damages allegedly

After the lower court rendered its judgment

dismissing the plaintiffs' complaint, the plaintiffs
moved for a new trial. The motion was denied,
hence, this appeal taken directly to this Court by
reason of the amount involved.
From the errors assigned by the plaintiffs, as having
been committed by the lower court, the following
principal issues can be deduced:
1. Whether or not there was a
violation of the fight contract of May
1, 1961; and if there was, who was
guilty of such violation.

2. Whether or not there was legal

ground for the postponement of the
fight date from September 1, 1961,
as stipulated in the May 1, 1961
boxing
contract,
to
November
4,1961,
3. Whether or not the lower court
erred in the refusing a postponement
of the July 23, 1963 trial.
4. Whether or not the lower court
erred in denying the appellant's
motion for a new trial.
5. Whether or not the lower court, on
the basis of the evidence adduced,
erred in awarding the appellees
damages of the character and
amount stated in the decision.
On the issue pertaining to the violation of the May
1, 1961 fight contract, the evidence established that
the contract was violated by appellant Boysaw
himself when, without the approval or consent of
Interphil, he fought Louis Avila on June 19, 1961 in
Las Vegas Nevada. Appellant Yulo admitted this fact
during the trial. [pp. 26-27, t.s.n., March 14, 1963].
While the contract imposed no penalty for such
violation, this does not grant any of the parties the
unbridled liberty to breach it with impunity. Our law
on contracts recognizes the principle that actionable
injury inheres in every contractual breach. Thus:
Those who in the performance of
their obligations are guilty of fraud,
negligence or delay, and those who
in any manner contravene the terms
thereof, are liable for damages. [Art.
1170, Civil Code].
Also:
The power to rescind obligations is
implied, in reciprocal ones, in case
one of the obligors should not
comply with what is incumbent upon
him. [Part 1, Art. 1191, Civil Code].
There is no doubt that the contract in question gave
rise to reciprocal obligations. "Reciprocal obligations
are those which arise from the same cause, and in
which each party is a debtor and a creditor of the
other, such that the obligation of one is dependent
upon the obligation of the other. They are to be
performed simultaneously, so that the performance
of one is conditioned upon the simultaneous
fulfillment of the other" [Tolentino, Civil Code of the
Philippines, Vol. IV, p. 175.1

The power to rescind is given to the injured party.

"Where the plaintiff is the party who did not
perform the undertaking which he was bound by
the terms of the agreement to perform 4 he is not
entitled to insist upon the performance of the
contract by the defendant, or recover damages by
reason of his own breach " [Seva vs. Alfredo Berwin
48 Phil. 581, Emphasis supplied].
Another violation of the contract in question was the
assignment and transfer, first to J. Amado Araneta,
and subsequently, to appellant Yulo, Jr., of the
managerial rights over Boysaw without the
knowledge or consent of Interphil.
The assignments, from Ketchum to Araneta, and
from Araneta to Yulo, were in fact novations of the
original contract which, to be valid, should have
been consented to by Interphil.
Novation
which
consists
in
substituting a new debtor in the
place of the original one, may be
made even without the knowledge or
against the will of the latter, but not
without
the
consent
of
the
creditor. [Art. 1293, Civil Code,
emphasis supplied].
That appellant Yulo, Jr., through a letter, advised
Interphil on September 5, 1961 of his acquisition of
the managerial rights over Boysaw cannot change
the fact that such acquisition, and the prior
acquisition of such rights by Araneta were done
without the consent of Interphil. There is no
showing that Interphil, upon receipt of Yulo's letter,
acceded to the "substitution" by Yulo of the original
principal obligor, who is Ketchum. The logical
presumption can only be that, with Interphil's letter
to the GAB expressing concern over reported
managerial changes and requesting for clarification
on the matter, the appellees were not reliably
informed of the changes of managers. Not being
reliably informed, appellees cannot be deemed to
have consented to such changes.
Under the law when a contract is unlawfully novated
by an applicable and unilateral substitution of the
obligor by another, the aggrieved creditor is not
bound to deal with the substitute.
The consent of the creditor to the
change
of
debtors,
whether
in expromision or delegacion is
an,
indispensable requirement . . .
Substitution of one debtor for
another may delay or prevent the
fulfillment of the obligation by reason
of the inability or insolvency of the
new debtor, hence, the creditor
should
agree
to
accept
the

substitution in order that it may be

binding on him.
Thus, in a contract where x is the
creditor and y is the debtor, if y
enters into a contract with z, under
which he transfers to z all his rights
under the first contract, together
with the obligations thereunder, but
such transfer is not consented to or
approved by x, there is no novation.
X can still bring his action against y
for performance of their contract or
damages
in
case
of
breach.
[Tolentino, Civil
Code
of
the
Philippines, Vol. IV, p. 3611.
From the evidence, it is clear that the appellees,
instead of availing themselves of the options given
to them by law of rescission or refusal to recognize
the substitute obligor Yulo, really wanted to
postpone the fight date owing to an injury that
Elorde sustained in a recent bout. That the
appellees had the justification to renegotiate the
original contract, particularly the fight date is
undeniable from the facts aforestated. Under the
circumstances, the appellees' desire to postpone the
fight date could neither be unlawful nor
unreasonable.
We uphold the appellees' contention that since all
the rights on the matter rested with the appellees,
and appellants' claims, if any, to the enforcement of
the contract hung entirely upon the former's
pleasure and sufferance, the GAB did not act
arbitrarily in acceding to the appellee's request to
reset the fight date to November 4, 1961. It must
be noted that appellant Yulo had earlier agreed to
abide by the GAB ruling.
In a show of accommodation, the appellees offered
to advance the November 4, 1961 fight to October
28, 1961 just to place it within the 30- day limit of
allowable postponements stipulated in the original
boxing contract.
The refusal of appellants to accept a postponement
without any other reason but the implementation of
the terms of the original boxing contract entirely
overlooks the fact that by virtue of the violations
they have committed of the terms thereof, they
have forfeited any right to its enforcement.
On the validity of the fight postponement, the
violations of the terms of the original contract by
appellants vested the appellees with the right to
rescind and repudiate such contract altogether. That
they sought to seek an adjustment of one particular
covenant
of
the
contract,
is
under
the
circumstances, within the appellee's rights.

While the appellants concede to the GAB's authority

to regulate boxing contests, including the setting of
dates thereof, [pp. 44-49, t.s.n., Jan. 17, 1963], it
is their contention that only Manuel Nieto, Jr. made
the decision for postponement, thereby arrogating
to himself the prerogatives of the whole GAB Board.
The records do not support appellants' contention.
Appellant Yulo himself admitted that it was the GAB
Board that set the questioned fight date. [pp. 3242, t.s.n., Jan. 17, 1963]. Also, it must be stated
that one of the strongest presumptions of law is
that official duty has been regularly performed. In
this case, the absence of evidence to the contrary,
warrants the full application of said presumption
that the decision to set the Elorde-Boysaw fight on
November 4, 1961 was a GAB Board decision and
not of Manuel Nieto, Jr. alone.
Anent the lower court's refusal to postpone the July
23, 1963 trial, suffice it to say that the same issue
had been raised before Us by appellants in a
petition for certiorari and prohibition docketed as
G.R. No. L-21506. The dismissal by the Court of
said petition had laid this issue to rest, and
appellants cannot now hope to resurrect the said
issue in this appeal.
On the denial of appellant's motion for a new trial,
we find that the lower court did not commit any
reversible error.
The alleged newly discovered evidence, upon which
the motion for new trial was made to rest, consists
merely of clearances which Boysaw secured from
the clerk of court prior to his departure for abroad.
Such evidence cannot alter the result of the case
even if admitted for they can only prove that
Boysaw did not leave the country without notice to
the court or his counsel.
The argument of appellants is that if the clearances
were admitted to support the motion for a new trial,
the lower court would have allowed the
postponement of the trial, it being convinced that
Boysaw did not leave without notice to the court or
to his counsel. Boysaw's testimony upon his return
would, then, have altered the results of the case.
We find the argument without merit because it
confuses the evidence of the clearances and the
testimony of Boysaw. We uphold the lower court's
ruling that:
The said documents [clearances] are
not evidence to offset the evidence
adduced during the hearing of the
defendants. In fact, the clearances
are not even material to the issues
raised. It is the opinion of the Court

that the 'newly discovered evidence'

contemplated in Rule 37 of the Rules
of Court, is such kind of evidence
which has reference to the merits of
the case, of such a nature and kind,
that if it were presented, it would
alter the result of the judgment. As
admitted by the counsel in their
pleadings, such clearances might
have impelled the Court to grant the
postponement prayed for by them
had they been presented on time.
The question of the denial of the
postponement sought for by counsel
for plaintiffs is a moot issue . . . The
denial of the petition for certiorari
and prohibition filed by them, had he
effect of sustaining such ruling of the
court . . . [pp. 296-297, Record on
Appeal].
The testimony of Boysaw cannot be considered
newly discovered evidence for as appellees rightly
contend, such evidence has been in existence
waiting only to be elicited from him by questioning.
We cite with approval appellee's contention that
"the two qualities that ought to concur or dwell on
each and every of evidence that is invoked as a
ground for new trial in order to warrant the
reopening . . . inhered separately on two unrelated
species of proof" which "creates a legal monstrosity
that deserves no recognition."
On the issue pertaining to the award of excessive
damages, it must be noted that because the
appellants wilfully refused to participate in the final
hearing and refused to present documentary
evidence after they no longer had witnesses to
present, they, by their own acts prevented
themselves from objecting to or presenting proof
contrary to those adduced for the appellees.
On the actual damages awarded to appellees, the
appellants contend that a conclusion or finding
based upon the uncorroborated testimony of a lone
witness cannot be sufficient. We hold that in civil
cases, there is no rule requiring more than one
witness or declaring that the testimony of a single
witness will not suffice to establish facts, especially
where such testimony has not been contradicted or
rebutted. Thus, we find no reason to disturb the
award of P250,000.00 as and for unrealized profits
to the appellees.
On the award of actual damages to Interphil and
Sarreal, the records bear sufficient evidence
presented by appellees of actual damages which
were neither objected to nor rebutted by appellants,
again because they adamantly refused to participate
in the court proceedings.

The award of attorney's fees in the amount of

P5,000.00 in favor of defendant-appellee Manuel
Nieto, Jr. and another P5,000.00 in favor of
defendants-appellees Interphil Promotions, Inc. and
Lope Sarreal, Sr., jointly, cannot also be regarded as
excessive considering the extent and nature of
defensecounsels' services which involved legal work
for sixteen [16] months.
However, in the matter of moral damages, we are
inclined to uphold the appellant's contention that
the award is not sanctioned by law and well- settled
authorities. Art. 2219 of the Civil Code provides:
Art. 2219. Moral damages may be
recovered in the following analogous
cases:
1) A criminal offense resulting in
physical injuries;
2) Quasi-delict
injuries;

causing

3) Seduction, abduction,
other lascivious acts;

physical

rape

or

4) Adultery or concubinage;
5) Illegal or arbitrary detention or
arrest;
6) Illegal search;
7) Libel, slander or any other form of
defamation;
8) Malicious prosecution;
9) Acts mentioned in Art. 309.
10) Acts and actions referred to in
Arts., 21, 26, 27, 28, 29, 30, 32, 34
and 35.
The award of moral damages in the instant case is
not based on any of the cases enumerated in Art.
2219 of the Civil Code. The action herein brought by
plaintiffs-appellants is based on a perceived breach
committed by the defendants-appellees of the
contract of May 1, 1961, and cannot, as such, be
arbitrarily considered as a case of malicious
prosecution.
Moral damages cannot be imposed on a party
litigant
although
such
litigant
exercises
it
erroneously because if the action has been
erroneously filed, such litigant may be penalized for
costs.

The grant of moral damages is not

subject to the whims and caprices of
judges or courts. The court's
discretion in granting or refusing it is
governed by reason and justice. In
order that a person may be made
liable to the payment of moral
damages, the law requires that his
act be wrongful. 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
exercise it erroneously. For these the
law taxes costs. [Barreto vs. Arevalo,
et. al. No. L-7748, Aug. 27, 1956, 52
O.G., No. 13, p. 5818.]
WHEREFORE, except for the award of moral
damages which is herein deleted, the decision of the
lower court is hereby affirmed.
SO ORDERED.

G.R. No. L-59311 January 31, 1985

RADIO
COMMUNICATIONS
OF
THE
PHILIPPINES,
INC.
(RCPI), petitioner,
vs.
HON. JAIME M. LANTIN, THE SHERIFF OF THE
COURT OF FIRST INSTANCE OF QUEZON CITY
and RUFUS B. RODRIGUEZ, respondents.
G.R. No. L-59320 January 31, 1985
GLOBE
MACKAY
CABLE
AND
RADIO
CORPORATION, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, HON.
JAIME M. LANTIN, THE SHERIFF OF THE COURT
OF FIRST INSTANCE OF QUEZON CITY, AND
RUFUS B. RODRIGUEZ, respondents.

GUTIERREZ, JR., J.:

In
these
interrelated
petitions
for
review
on certiorari, the Radio Communications of the
Philippines, Inc. (RCPI) and Globe Mackay Cable
and Radio/Corporation (GLOBE) question the
decision of the Court of Appeals, now Intermediate
Appellate Court, which refused to set aside the
orders of the Court of First Instance of Rizal
directing execution pending appeal of an award of
P213,148.00
damages
in
favor
of
private
respondent Rufus B. Rodriguez.
On September 8, 1978, Rufus B. Rodriguez, as
President of the World Association of Law Students
(WALS), sent two cablegrams overseas through
RCPI, one addressed to Mohammed Elsir Taha in
Khartoum, Sudan Socialist Union, and the other to
Diane Merger in Athens, Georgia, United States. The
cablegrams were, in turn, relayed to GLOBE for
transmission to their foreign destinations. The
telegram to Taha advised him of Rodriguez's
pending arrival in Khartoum on September 18,
1978, while the telegram to Merger advised her of
the scheduled WALS conference in Khartoum.
Rodriguez left the Philippines on September 15,
1978. On September 18, 1978, he arrived in
Khartoum, Sudan at 9:30 in the evening. Nobody
was at the airport to meet him. Due to the lateness
of the hour, he was forced to sleep at the airport.
He lined up five (5) chairs together and lay down
with his luggages near him. Because of the nonreceipt of the cablegram, Taha was not able to meet
him. Worse all preparations for the international
conference had to be cancelled. Furthermore,
Fernando Barros, the Vice-President, arrived the
next day from Chile, followed by the other officers
from other countries except Diane Merger, the
organization's secretary. It turned out that the wire
sent by Rodriguez to Merger was delivered to the
address on the message but the person who
delivered it was told that the addressee was no
longer staying there. This fact was not accordingly
reported to Rodriguez in Metro Manila. The
undelivered cablegram was not returned by the
correspondent abroad to Globe for disposition in the
Philippines,
On December 8, 1978, Rodriguez filed a complaint
for compensatory damages in the amount of
P45,147.00, moral damages in the amount of
P250,000.00,' and exemplary damages in the
amount of P50,000.00 against RCPI and GLOBE.
On March 17, 1980, the then Presiding Judge Lino L.
Aover of the Court of First Instance of Rizal
rendered a decision, the dispositive portion of which
reads as follows:

WHEREFORE, judgment is hereby

rendered ordering the defendants
jointly and severally to pay the
plaintiff the total sum of TWO
HUNDRED
THIRTEEN
THOUSAND
ONE HUNDRED FORTY EIGHT PESOS
(P213,148.00) by way of damages
and to pay the costs of this suit.
The above amount is broken down as follows by the
trial court:
Moral damages consequent to the
humiliation and embarrassment that
the plaintiff suffered under the two
causes of action in the amount of
P100,000.00
are
adequate.
Exemplary damages under both
counts are fixed reasonably at
P50,000.00. On the actual damages,
the court accepts plaintiff's expenses
for the preparation of the trip at
P10,000.00;
plane
fare
at
P20,000.00; stay in transit in
Pakistan at P5,000.00; his hotel bills
in Khartoum at P4,000.00; his meals
in Khartoum at P4,000.00 and the
telegraphic toll at P78.00. The court
refuses the sum spent for the dinner
that he allegedly tendered as not
established by sufficient proof.
With respect to the telegram sent to
Diane Merger, the court finds that
the actual damages amount to
P70.00 representing the cost of the
cablegram. As for attorney's fees,
the court finds that the amount of
P20,000.00 including litigation of
expenses are reasonable.
On May 26, 1980, Rodriguez filed a "Motion for
Execution Before Expiration of Time to Appeal"
relying on Rule 39, Section 2 of the Revised Rules of
Court alleging that the appeal is clearly dilatory and
that the lapse of time would make the ultimate
judgment illusory and ineffective. An opposition to
the motion was filed by RCPI on June 3, 1980 and
by GLOBE on November 18,1980.
On January 21, 1981, the respondent court of first
instance granted the said motion in an order which
reads as follows:
Upon consideration of the Motion for
execution
pending
appeal,
the
opposition
thereto
and
the
arguments in open court by the
parties, and finding that:

a) the appeal was for the purpose of

delay, there being breach of contract,
and defendants' evidence being weak
or feeble;
b) plaintiff is willing to put up a bond
in the amount of P213,148.00 to
answer for damages if the decision is
reversed on appeal
the Court grants the motion. Let writ
of execution pending appeal be
issued upon the filing of a bond by
plaintiff in the sum of P213,148.00.
Said bond should be filed within ten
(10) days from receipt of this order.
On February 5, 1981, the same court issued
another order which reads as follows:
The bond pursuant to the order of
January 21, 1981, is approved. Let
writ of execution of judgment
pending appeal be issued forthwith.
On February 10, 1981, GLOBE filed a
motion for reconsideration of the
above order and expressed its desire
to put up a supersedeas bond to stay
immediate execution. This motion
was denied in an order dated
February 17, 1981. Even before the
issuance of this order denying
petitioner's
motion
for
reconsideration,
the
respondent
Sheriff, on February 13, 1981,
insisted on levying on the funds and
assets of petitioners RCPI and
GLOBE, prompting them to file an
"Urgent Motion to Recall Writ of
Execution. This urgent motion was
likewise denied.
On February 17, 1981, RCPI and GLOBE filed with
the Court of Appeals a petition for certiorari,
mandamus, and prohibition with a prayer for the
issuance of a writ of preliminary injunction. On
February 20, 1981, the Court of Appeals issued a
restraining order enjoining the lower court from
further proceeding with the civil case and from
enforcing the writ of execution until further orders.
On November 10, 1981, the Court of Appeals
rendered a decision. The dispositive portion reads
as follows:
WHEREFORE, the herein petition is
hereby dismissed for lack of merit
and the questioned orders of January
21, 1981, February 5, 1981 and
February 20, 1981 are hereby

declared
valid
and
legal.
Consequently, the restraining order
issued earlier on February 2, 1981 is
hereby lifted.
With costs against the petitioners.
Within fifteen (15) days from receipt of the
abovequoted decision, the petitioners filed with the
respondent Court of Appeals a motion for
reconsideration. On December 28, 1981, petitioners
received a resolution of the Court of Appeals
denying their motion for reconsideration.
On January 18, 1982, this petition entitled appeal
by certiorari was filed.
The petitioners' arguments revolve around
alleged grave abuse of discretion committed by
Court of Appeals when it declined to disturb
judgment of the trial court on the issuance of
writ of execution pending appeal.

the
the
the
the

Section 2, Rule 39 of the Revised Rules of Court

provides:
On motion of the prevailing party
with notice to the adverse party the
court may, in its discretion, order
execution to issue even before the
expiration of the time to appeal,
upon good reasons to be stated in a
special order. If a record on appeal is
filed thereafter, the motion and the
special order shall be included
therein.
The rule specifically vests the court with the
exercise of discretionary power. The requisites for
the court's valid exercise of the discretion to order
execution pending appeal are: (1) there must be a
motion by the prevailing party with notice to the
adverse party; (2) there must be good reasons for
issuing the execution, and (3) the good reasons
must be stated in a special order.
Considering the nature of the wrongful acts found
by the trial court and the amount of damages
adjudicated as recoverable, both of which are stated
in detail in the decisions and various orders of the
trial court and the appellate court, we are
constrained to sustain the respondent courts insofar
as the award for actual or compensatory damages
are concerned but to postpone the execution of the
awards for moral and exemplary damages until such
time as the merits of the cases now on regular
appeal before the Court of Appeals are finally
determined. The execution of any award for moral
and exemplary damages is dependent on the
outcome of the main case. Unlike actual damages

for which the petitioners may clearly be held liable if

they breach a specific contract and the amounts of
which are fixed and certain, liabilities with respect
to moral and exemplary damages as wen as the
exact amounts remain uncertain and indefinite
pending resolution by the Intermediate Appellate
Court and eventually the Supreme Court. The
existence of the factual bases of these types of
damages and their causal relation to the petitioners'
act will have to be determined in the light of the
assignments of errors on appeal. It is possible that
the petitioners, after all, while liable for actual
damages may not be liable for moral and exemplary
damages. Or as in some cases elevated to the
Supreme Court, the awards may be reduced. (See
Radio Communications of the Philippines, Inc. v.
Intermediate Appellate Court, et al., G.R. No.
67034, December 3, 1984)
In its questioned decision, the Court of Appeals
acknowledged the nature of execution pending
appeal as an exceptional remedy which must be
interpreted restrictively, citing the many ruling
cases on this point. At the same time, what was
before the appellate court was not the application of
a general rule but the exception thereto, the special
reasons or circumstances warranting execution
pending appeal. The Court of Appeals quoted with
approval the trial court's findings:
xxx xxx xxx
2. Execution pending appeal is
discretionary. Execution pending
appeal is a matter of sound
discretion on the part of the trial
court.
(National
Marketing
Corporation v. Tan, L- 17768, March
31, 1962; Ong Sit v. Piccio, 78 Phil.
232; Go Changjo v. Roldan Sy
Changjo, 18 Phil. 405). The appellate
court will not interfere, control or
inquire into the exercise of this
discretion, unless it is shown that
there
has
been
an
abuse
thereof. Asturias v. Victoriano, 98
Phil. 581; Naredo v. Yatco, 80 Phil.
220;Federal Fils Inc. v. Ocampo, 78
Phil.
479; Ong
Sit
v.
Piccio
supra; Buenaventura v. Pea 78 Phil.
798; Presbitero v. Rodas, 73 Phil.
300; Iloilo Trading and Exchange v.
Rodas, 73 Phil. 327; Hacienda
Navarro, Inc. v. Labrador, 65 Phil.
536; Lusk v. Stevens, 64 Phil.
154; Gamay v. Gutierrez David, 48
Phil. 768; Gutierrez Hermanos v.
Orias Hermanos & Co., 39 Phil.
92; Case v. Metropole Hotel, 5 Phil.
49; Macke
v.
Camps, 5
Phil.

185; Calvo v. De Gutierrez, 4 Phil.

203)

concerned, we find insufficient cause to restrain the

exercise of discretionary power.

3. Requirement of good reasons. The

requirement that execution pending
appeal must be supported by good
reasons, to be stated in a special
order, should be complied with
because the existence of good
reasons is the element that gives
validity to an order of execution
(Alcasid v. Samson, 102 Phil. 735;
De la Rosa v. City of Baguio, 90 Phil.
720) (sic) Unless the reasons are
made known it would be difficult to
determine whether judicial discretion
has been properly exercised in the
case (Asturias v. Victoriano, supra If
the discretionary power of the court
is to have any meaning, the
sufficiency of the reasons for
ordering such execution is naturally
to be determined by the court.
(Buenaventura v. Pea, supra; Lusk
v. Stevens, supra.)

The petitioners question the findings of the Court of

Appeals that:

Whether the reasons are so urgent

and
compelling
as
to
justify
execution pending appeal depends
upon the circumstances of the case.
The filing of a bond by the prevailing
party, as required by the court in its
order of execution, constitutes good
reason for the issuance of a writ of
execution
mending
appeal (Rodriguez
v.
Court
of
Appeals, L-12554, May 23, 1959;
Hacienda
Navarro,
Inc.
v.
Labrador, supra; People's Bank &
Trust Co. v. San Jose, 96 Phil. 895).
The court likewise noted that the questioned order
made reference to the reasons averred in the
motion which appeared to it to be good and which it
found to be sufficient compliance with the law
(Joven v. Boncan, 67 Phil. 252). It noted the finding
of the trial court that the appeal interposed by the
petitioners was not based on strong grounds, which
finding is again a good reason for execution pending
appeal. (Presbitero v. Rodas, 73 Phil. 300; Iloilo
Trading Center and Exchange v. Rodas, 78 Phil.
789)
The petitioners pit their arguments against the
conclusions of the Court of Appeals and the Court of
First Instance on the special nature of the
circumstances
warranting
the
exercise
of
discretionary power, the weak defenses at trial and
weak reasons on appeal, and the nature of the
evidence upon which the decision is based. Insofar
as actual and compensatory damages are

The respondent court had to look

back at the sworn complaint that,
the private respondent in the
aforesaid complaint had to sleep at
the airport left alone to himself
throughout the night with nobody to
talk to because in Khartoum, Sudan,
only a few people if at all, could
speak English and because our
country has no consulate in the said
place, language barrier was a big
problem in looking for a taxicab to
the hotel. To repeat, he had to sleep
on the 5 chairs put together; he is a
respectable man in the country who
had to go to Khartoum as President
of the World Association of Law
Students in the Philippines and had
to make the trip to Sudan for a
conference; that he was a third year
law student of the College of Law in
the University of the Philippines and
the Cagayan de Oro Sangguniang
Panglunsod City where he is from,
even
passed
a
Resolution
congratulating him for having been
chosen or selected the President of
the World Association of Law
Students or WALS, invited by the
Sudanese
government
for
the
conference on September 18, 1978:
arriving at the airport at 9:30 in the
evening; as he could not talk in
Arabic, he was left alone to himself
to repeat until he had to wait for the
next morning to have somebody to
translate in Arabic language how to
find the place of Mohammed Elsir
Taha who invited him as per
telegrams exchanged between him
and the plaintiff, now private
respondent
that
the
latter's
residence was found to be 20
kilometers away (Office of the
Secretary of the African Youth
Committee, Sudan Socialist Union);
that because the telegram sent by
him
in
Manila,
Philippines
on
September
8,
1978
was
not
delivered to Mohammed Taha, the
latter was not able to meet him at
the airport; on the other hand, the
telegram sent to Diane Merger as
Secretary
of
the
conference
committee having been delivered to

the address given by him but the

person who delivered was told that
the said addressee was no longer
staying there and moved out a year
ago
but
this
fact
was
not
informed/reported accordingly to him
in Metro Manila, Philippines where
the cablegram was sent and which
cablegram was not returned by the
receiver
abroad
to
Globe
for
disposition
in
the
Philippines.
Evidently, there was a breach of
contractual
obligation
committed
against him by the defendants, now
private respondent Globe Mackay
and RCPI, and therefore, he is
entitled to such damages which he
has claimed for the humiliation,
suffering,
mental
anguish
and
besmirched reputation as a result of
the non-delivery of the cables, which
damages amounted to P213,148.00.
The merits of the main case are not to be
determined in a petition questioning execution
pending appeal (City of Manila v. Court of Appeals,
72 SCRA 98). However, the facts and circumstances
clearly brought out during trial cannot help but
influence whether or not an appeal appears to be
dilatory and whether or not there are sufficient
reasons including considerations of justice and
equity to justify a departure from the regular
procedures regarding execution.
Petitioners question the alleged presence of superior
circumstances demanding urgency of execution
pending appeal. Any delay in final adjudication on
the merits will be the fault of the courts and not
theirs, according to them.
Petitioner GLOBE states:
In
the
light
of
the
peculiar
circumstances obtaining in the case
at bar, among which are that:
1. The judgment creditor does not
even have a cause of action against
herein petitioner;
2. The greater portion of the amount
awarded in the judgment of the trial
court cannot be legally given; and
3. Herein petitioner's defenses are
legal and valid and the evidence
submitted to prove them, positive
and convincing.

any bond which the prevailing party

might have posted cannot fully
compensate for the inconvenience
and damages which petitioner will
suffer by reason of such hasty
execution for the reason that the
said execution will be morally,
legally, equitably and outrageously
incorrect. ...
The respondent introduced evidence to show that
he suffered mental anguish, serious anxiety,
besmirched reputation, wounded feelings, and social
humiliation. The petitioners question the extent of
these sufferings and further aver that their acts
claimed to have caused the injury were not
wrongful, deliberate, wanton, and tainted with bad
faith or fraud.
Our review of the records constrains us to allow
execution pending appeal of actual but not the
moral and exemplary damages which must await
the final determination of the main cases.
WHEREFORE, the petition is GRANTED PARTIAL DUE
COURSE. The November 10, 1981 decision and
December 22, 1981 resolution of the appellate court
are SET ASIDE and a new ORDER is ENTERED
authorizing execution pending appeal of P43,148.00
actual damages upon the private respondent's filing
of a bond in the same amount. The execution of any
award for moral damages, exemplary damages, and
attorney's fees is enjoined until after final resolution
of the issues in the main case.
SO ORDERED.

The petitioner submits to us for review the propriety

of the Court of Appeals' disregarding the findings of
fact and the award of damages made by the trial
court.
This petition is an offshoot of an action for damages
filed by the petitioner against the private
respondents docketed as Civil Case No. 24105 and
decided by the Regional Trial Court, National Capital
Judicial Region, Branch 151 of Pasig, Metro Manila
which ruled as follows:
WHEREFORE, judgment is hereby
rendered in favor of plaintiff and
against defendant Manuel Macasaet,
sentencing the latter to pay the
former, the following sums:
a) Three Hundred Two Thousand Six
Hundred
Fifty-Eight
Pesos
and
Twenty Centavos (P302,658.20) for
and as actual damages;
b) One Hundred Thousand Pesos
(P100,000.00) for and as moral
damages;
c) Fifty Thousand Pesos (P50,000.00)
for and as exemplary damages; and
d)
Fifty
Thousand
Pesos
(P50,000.00) for and as attorney's
fees and litigation expenses.
The
complaint
and
defendant
Macasaet's
cross
claim
against
defendant
Jacobo
Feliciano
are
dismissed.
Defendants Manuel Macasaet's and
Jacobo Feliciano's counterclaims are
likewise dismissed.
G.R. No. 90888 September 13, 1990
FRUCTUOSO R. CAPCO, petitioner,
vs.
MANUEL R. MACASAET, JACOBO FELICIANO,
and HONORABLE COURT OF
APPEALS, respondents.
Florentino I. Capco for petitioner.
Pacifico Sotelo for M.R. Macasaet.
Edilberto Barot, Jr. for J. Feliciano.
GUTIERREZ, JR., J.:

Costs against defendant Manuel

Macasaet. (Rollo, pp. 55-56)
The petitioner was a stockholder of record, director
and executive vice-president of Monte Oro Mineral
Resources, Inc. (Monte Oro for brevity'sake), a local
mining company whose shares were traded in the
stock market. He owned 56,588,358 shares of the
capital stock of Monte Oro with par value of P0.01
per share or a total par value of P565,883.58 as
evidenced by Stock Certificate No. 002 (Exhibit "A")
for 14,159,583 shares and Stock Certificate No. 026
(Exhibit "B") for 42,428,775 shares.
On February 18, 1976, the petitioner indorsed and
delivered Stock Certificates Nos. 002 and 026 to
private respondent Manuel Macasaet, board

chairman and President of Monte Oro, who

personally received the said certificate in the
following tenor:
ACKNOWLEDGMENT RECEIPT
I hereby certify that I have
personally
received
from
Mr.
Fructuoso R. Capco the following
Monte Oro Certificates in trust and
for safe keeping only to be delivered
and/or surrendered to him and/or his
heirs
or
duly
authorized
representative on demand. (Exhibit
"C")
Cert. No. Amount Date Remarks
002 14,159,583 12/04/74 'Already
Indorsed'
026 42,428,775 04/16/75 'Already
Indorsed'
________
Total 56,588,358
Received as stated:[Sgd) MANUEL R.
MACASAET' (Exhibit "C")
On April 26,1976, the petitioner demanded the
return of his stock certificates from respondent
Macasaet who failed to produce them because he
had given them to the other private respondent
Jacobo Feliciano, another officer of Monte Oro,
allegedly in connection with a contemplated joint
venture with the group of one Leonilo Esguerra.
On April 28, 1976, respondent Macasaet replaced
the petitioner's Stock Certificate No. 026 with his
own Stock Certificate No. 025 covering 42,578,700
shares. The petitioner duly acknowledged the
receipt of the said replacement (Exhibit "3").
On May 4, 1976, Stock Certificate No. 002 was
returned by respondent Macasaet to the petitioner
as evidenced by the handwritten receipt signed by
the latter (Exhibit "2") who likewise made a
handwritten notation stating "all cleared" at the left
hand margin thereof.
On August 12, 1976, the petitioner filed a complaint
for damages against the private respondents
alleging, among others, that at the time he
demanded his Stock Certificate Nos. 002 and 026
totalling 56,588,358 shares from respondent
Macasaet the petitioner had a ready buyer for 0.014
per share for all shares; that due to the private
respondents' failure to return the said stock
certificates upon demand, the petitioner lost
P306,115.25 representing the difference between

the amount of P792,237.01 which he would have

realized had his stock certificates been promptly
given back and the sum of P486,121.76, the actual
net proceeds from the subsequent sale of
P42,550,000 shares at various prices after
respondent Macasaet delivered his own Stock
Certificate No. 025 in exchange for the petitioners
Stock Certificate No. 026; that the aforesaid
amount of P 306,115.25 had long been overdue and
unpaid and despite repeated demands from the
private respondents for the payment thereof, the
latter had failed and refused to pay the same to the
petitioner's damage and prejudice; and that due to
the private respondents' intentional, deliberate and
malicious acts, moral and exemplary damages could
be awarded to the petitioner.
Respondent Macasaet counter-alleged, among
others, that he had in turn entrusted Stock
Certificate Nos. 002 and 026 of the petitioner to his
co-defendant, respondent Feliciano to be shown to a
certain group for the purpose of a joint venture;
that respondent Macasaet had actually made
several demands for the return of the said stock
certificates from respondent Feliciano who refused
and failed to do so; that two days after the
petitioner made the demand, respondent Macasaet
replaced the petitioner's Stock Certificate No. 026
with his own Stock Certificate No. 025 which
covered 149,925 shares more than those of the
petitioner's Stock Certificate No. 026; that the
respondent Macasaet returned the petitioner's Stock
Certificate No. 002 on May 4, 1976 after he
recovered the game from respondent Feliciano; and
that the words "ALL CLEARED" written by the
petitioner himself on his acknowledgment receipt as
he received Stock Certificate No. 002 from
respondent Macasaet undoubtedly meant to
discharge private respondent Macasaet from any
responsibility or liability regarding the petitioner's
stock certificates.
On August 8, 1983, the lower court rendered a
judgment favorable to the petitioner. It also
dismissed the complaint and respondent Macasaet's
cross-claim against respondent Feliciano and
likewise dismissed private respondents' counterclaims against the petitioner.
On appeal by respondent Macasaet, the Court of
Appeals on June 19, 1989, reversed and set aside
the trial court's judgment for lack of merit and
supporting proof. The petitioner's complaint as well
as the cross-claims and counter-claims of private
respondents were all dismissed.
After the petitioner's subsequent motion for
reconsideration was denied on October 23, 1989,
the present petition was filed assigning as errors, to
wit:

I
THE
HONORABLE
COURT
OF
APPEALS GRAVELY ERRED BLINDLY
SUPPORTING
THE
FIRST
AND
SECOND
THEORY
OF
PRIVATE
RESPONDENT THAT THE WRITTEN
ANNOTATION OF 'ALL CLEARED IN
STOCK
CERTIFICATE
NO.
002
NECESSARILY INCLUDED ANOTHER
SEPARATE AND DIFFERENT STOCK
CERTIFICATE
NO.
026
AND
ASSUMING THERETO 'PAYMENT' OF
LIABILITY OF PRIVATE RESPONDENT
TO PETITIONER.
II
THE
HONORABLE
COURT
OF
APPEALS
GRAVELY
ERRED
IN
CLEARING PRIVATE RESPONDENT OF
RESPONSIBILITIES
BY
DISREGARDING OR ABROGATING A
VOLUNTARY CONTRACT OF TRUST,
(ACKNOWLEDGMENT
RECEIPT,
DATED FEBRUARY 18,1976, ANNEX
"C" PLAINTIFF'S COMPLAINT; EXH.
"C"-PLAINTIFF)
ALSO
ON MERE
ASSUMPTION THAT
THE
ENDORSEMENT ON THE SUBJECT
STOCK CERTIFICATES CONSTITUTE
FULL
AUTHORITY
TO
PRIVATE
RESPONDENT TO DELIVER, CONVEY
AND SELL THE SAME.
III
THE
HONORABLE
COURT
OF
APPEALS
LIKEWISE
COMMITTED
GROSS ERROR IN CLEARING THE
PRIVATE RESPONDENT OF LIABILITY
FOR
ALL
DAMAGES
ALREADY
SUFFERED
AND
INCURRED
BY
PETITIONER.
IV
THE
HONORABLE
COURT
OF
APPEALS ALSO COMMITTED GRAVE
ERROR BY CONCLUDING LACK OF
EVIDENCE TO SUPPORT CLAIM OF
DAMAGES AND DISREGARDING THE
FACTS
AND
EVIDENCE
DULY
ADMITTED AND PROVEN AT A
FORMAL TRIAL IN THE LOWER
COURT." (Petition, pp. 5-6, Rollo, pp.
16-17)
The petitioner's main argument rests on the oftrepeated pronouncement that the conclusions and

findings of fact by the trial court are entitled to

great weight on appeal and should not be disturbed
unless for strong and cogent reasons because the
trial court is in a better position to examine real
evidence as well as observe the demeanor of the
witnesses while testifying citing the case of Chase
v. Buencamino (136 SCRA 605 [1985]). The
petitioner faults the respondent court for sidestepping
the
literal
interpretation
of
the
Acknowledgment Receipt dated February 18, 1972
signed by the respondent Macasaet which allegedly
serves as a clear proof that Stock Certificate Nos.
002 and 026 were held by the latter in trust and for
safekeeping only. The petitioner further labels as
capricious the respondent court's act of completely
ignoring all the established evidence, both
documentary and testimonial, duly admitted and
considered by the trial court.
The rule that the trial court's findings of facts are
accorded due respect on appeal is not without
exceptions. It is not applicable where there are
strong and cogent reasons as when the trial court's
findings are not supported by the evidence or when
the trial court failed to consider material facts which
would have led to a conclusion different from what
was stated in its judgment or when the trial court's
decision was attended by grave abuse of discretion
amounting to lack of jurisdiction. A review of the
bases for the trial court's decision shows that the
appellate court was justified in being skeptical as it
went over both the facts and the law.
The instant case was given due course to enable a
more thorough presentation by the parties and
review of the records considering the petitioner's
stress on the disparity between the factual findings
of the trial court which found respondent Macasaet
liable for actual, moral and exemplary damages and
the respondent appellate court which discharged the
said respondent from any liability regarding the
petitioner's Stock Certificate Nos. 002 and 026.
It is true that when the petitioner delivered Stock
Certificate Nos. 002 and 026 to respondent
Macasaet the latter acknowledged receiving them
"in trust and for safekeeping only." This
acknowledgment, however, cannot outweigh the
legal effects of the stock certificates having been
"already indorsed". There is no dispute that
respondent Macasaet received the petitioner's
certificates in that condition as evidenced by the
same Acknowledgment Receipt dated February 18,
1976.
Certificates of stocks are considered as "quasinegotiable" instruments. When the owner or
shareholder of these certificates signs the printed
form of sale or assignment at the back of every
stock certificate without filling in the blanks
provided for the name of the transferee as well as

for the name of the attorney-in-fact, the said owner

or shareholder, in effect, confers on another all the
indicia of ownership of the said stock certificates.
(Campos and Lopez-Campos, Notes and Selected
Cases on Negotiable Instruments Law, 1971 ed., p.
605). In the case at bar, the petitioner signed the
printed form at the back of both Stock Certificate
Nos. 002 and 026 without filling in the blanks at the
time the said stock certificates were delivered to
respondent Macasaet. Hence, the petitioner's acts of
indorsement and delivery conferred on respondent
Macasaet the right to hold them as though they
were his own. On account of this apparent transfer
of ownership, it was not irregular on the part of
respondent
Macasaet
to
deliver
the
stock
certificates in question to respondent Feliciano for
consideration in connection with a contemplated tieup between two business groups.

Appeals may affirm, reverse, or

modify the judgment or order
appealed from, and may direct a new
trial or further proceeding to be had.
It is indeed the duty of that Court
chiefly though not exclusively to
review a Trial Court's findings of fact
and correct such serious errors
affecting them as may have been
properly assigned and as may be
established by a reexamination of
the recorded evidence.And it is the
findings of fact of the Court of
Appeals, not those of the trial court
that are as a rule deemed final, and
conclusive
even
on
this
Court. (Emphasis Supplied) (At p.
27)

At this juncture, it is worth noting that in view of

the petitioner's concurrent positions as director,
Executive Vice-President and General Manager of
Monte Oro at the time of the incident under
consideration, he could not have been unaware of
the consequences of the delivery coupled with the
indorsement of his two stock certificates to
respondent Macasaet, notwithstanding the tenor of
the Acknowledgment Receipt. Moreover, it is hard to
believe that the petitioner's delivery of the subject
stock certificates to respondent Macasaet was
strictly for safe-keeping purposes only because if
that were his real and only intention, there is
neither logic nor reason for the indorsement of the
said certificates.

We find no reversible error in the respondent

Court's holding that the petitioner failed to support
his claim that he suffered the claimed damages as a
result of respondent Macasaet's failure to return
Stock Certificate Nos. 002 and 026 upon demand.
The alleged "unrealized profits" representing actual
and compensatory damages must be supported by
substantial and convincing proof. The records are
bereft of such kind of proof. Mere allegation that
there was a "ready and willing buyer' of all the
petitioners shares covered by Stock Certificate Nos.
002 and 026 for P0.014 per share at the time the
demand for the return of the said certificates was
made cannot suffice to allow the petitioners claim
for unrealized profits to prosper. Such claim is
clearly speculative in nature.

After a careful perusal and examination of the

records of this case, we find no legal ground that
will constrain us to depart from the rule that the
Court of Appeals' findings of fact are deemed final,
conclusive and binding on us if supported by
substantial evidence. We reiterate our ruling in the
case of Hermo v. Court of Appeals, (155 SCRA 24
[1987]) that:
At once apparent is that the factual
findings of the Court of Appeals are
diametrically at odds with those of
the Trial Court,.... And basic is the
rule that the conclusions of fact of a
trial court are entitled to great
weight, and should not generally be
disturbed on appeal, because it is in
a better position than the appellate
tribunal to examine the evidence
directly,
and
to
observe
the
demeanor of the witnesses while
testifying. Withal, its findings of fact,
though entitled to great respect, are
not conclusive on the Court of
Appeals. In the exercise of its
appellate jurisdiction, the Court of

Actual or 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 non-substantial, no damages will be
given (Danao v. Court of Appeal, 154 SCRA 447
[19871]; Rubio v. Court of Appeals, 141 SCRA 488
[1986]; Perfecto v. Gonzales, 128 SCRA 635
[1984]). Actual and compensatory damages require
evidentiary proof. They cannot be presumed. (Dee
Hua Liong Electrical Equipment Corporation v.
Reyes, 145 SCRA 713 [1986])
The good faith of respondent Macasaet is shown by
the fact that after trying to recover the missing
certificates, he immediately substituted Stock
Certificate No. 026 with his own Stock Certificate
No. 025 which covered more shares than the
petitioner's replaced certificate. The petitioner's
other Stock Certificate No. 002 was subsequently
returned and received by the petitioner with the
notation "All Cleared" on the acknowledgment
receipt duly signed and personally written by him.
We agree with the respondent court's ruling that the
said notation meant to discharge respondent

Macasaet'
together
with
his
co-respondent
Feliciano) from any liability with respect to the stock
certificates in question as there can be no other
plausible interpretation therefor. He would not have
written "all cleared" if he was unhappy at that time
about the substitution of the higher value certificate
for his other certificate.

IN VIEW OF THE FOREGOING, judgment is

hereby rendered dismissing the appeals
interposed by both accused and Reyes
Trucking Corporation and affirming the
Decision and Supplemental Decision dated
June 6, 1992 and October 26, 1992
respectively.

In fine, considering that in the absence of malice

and bad faith, moral damages cannot be awarded
(Philippine National Bank v. Court of Appeals, 159
SCRA 433 [19881) and that the grant of moral and
exemplary damages has no basis if not predicated
upon any of the cases enumerated in the Civil Code
(Bagumbayan Corporation v. Intermediate Appellate
Court, 132 SCRA 441 [19841), we hold that the
respondent court properly set aside the award of
actual, moral and exemplary damages given by the
trial court in favor of the petitioner.

SO ORDERED.4

WHEREFORE, in view of the foregoing, the petition

is hereby DISMISSED. The assailed decision dated
June 19, 1989 and the resolution dated October 23,
1989 of the Court of Appeals are AFFIRMED.
SO ORDERED.

G.R. No. 129029

April 3, 2000

RAFAEL
REYES
TRUCKING
CORPORATION, petitioner,
vs.
PEOPLE OF THE PHILIPPINES and ROSARIO P.
DY (for herself and on behalf of the minors
Maria Luisa, Francis Edward, Francis Mark and
Francis Rafael, all surnamed Dy), respondents.
PARDO, J.:
The case is an appeal via certiorari from the
amended
decision 1 of
the
Court
of
2
Appeals affirming the decision and supplemental
decision of the trial court,3 as follows:

The facts are as follows:

On October 10, 1989, Provincial Prosecutor Patricio
T. Durian of Isabela filed with the Regional Trial
Court, Isabela, Branch 19, Cauayan an amended
information charging Romeo Dunca y de Tumol with
reckless imprudence resulting in double homicide
and damage to property, reading as follows:
That on or about the 20th day of June,
1989, in the Municipality of Cauayan,
Province of Isabela, Philippines, and within
the jurisdiction of this Honorable Court, the
said accused being the driver and person-incharge of a Trailer Truck Tractor bearing
Plate No. N2A-867 registered in the name of
Rafael Reyes Trucking Corporation, with a
load of 2,000 cases of empty bottles of beer
grande, willfully, unlawfully and feloniously
drove and operated the same while along
the National Highway of Barangay Tagaran,
in said Municipality, in a negligent, careless
and imprudent manner, without due regard
to traffic laws, rules and ordinances and
without taking the necessary precautions to
prevent injuries to persons and damage to
property, causing by such negligence,
carelessness and imprudence the said trailer
truck to hit and bump a Nissan Pick-up
bearing Plate No. BBG-957 driven by
Feliciano Balcita and Francisco Dy, Jr., @
Pacquing, due to irreversible shock, internal
and external hemorrhage and multiple
injuries, open wounds, abrasions, and
further causing damages to the heirs of
Feliciano
Balcita
in
the
amount
of
P100,000.00 and to the death of Francisco
Dy, Jr.; @ Pacquing and damages to his
Nissan Pick-Up bearing Plate No. BBG-957 in
the total amount of P2,000,000.00.
CONTRARY TO LAW.
Cauayan, Isabela, October 10, 1989.
(Sgd.)
FAUSTO
C.
CABANTAC
Third Assistant Provincial Prosecutor
Upon arraignment on October 23, 1989, the
accused entered a plea of not guilty. On the same
occasion, the offended parties (Rosario P. Dy and

minor children and Angelina M. Balcita and minor

son Paolo) made a reservation to file a separate civil
action against the accused arising from the offense
charged.5 On November 29, 1989, the offended
parties actually filed with the Regional Trial Court,
Isabela, Branch 19, Cauayan a complaint against
petitioner Rafael Reyes Trucking Corporation, as
employer of driver Romeo Dunca y de Tumol, based
onquasi delict. The petitioner settled the claim of
the heirs of Feliciano Balcita (the driver of the other
vehicle involved in the accident). The private
respondents opted to pursue the criminal action but
did not withdraw the civil case quasi ex delicto they
filed against petitioner. On December 15, 1989,
private respondents withdrew the reservation to file
a separate civil action against the accused and
manifested that they would prosecute the civil
aspect ex delicto in the criminal action.6 However,
they did not withdraw the separate civil action
based on quasi delict against petitioner as employer
arising from the same act or omission of the
accused driver.7
Upon agreement of the parties, the trial court
consolidated both criminal and civil cases and
conducted a joint trial of the same.
The facts, as found by the trial court, which appear
to be undisputed, are as follows:
The defendant Rafael Reyes Trucking
Corporation is a domestic corporation
engaged in the business of transporting beer
products for the San Miguel Corporation
(SMC for Short) from the latter's San
Fernando, Pampanga plant to its various
sales outlets in Luzon. Among its fleets of
vehicles for hire is the white truck trailer
described above driven by Romeo Dunca y
Tumol, a duly licensed driver. Aside from the
Corporation's memorandum to all its drivers
and helpers to physically inspect their
vehicles before each trip (Exh. 15, pars. 4 &
5), the SMC's Traffic Investigator-Inspector
certified the roadworthiness of this White
Truck trailer prior to June 20, 1989 (Exh.
17). In addition to a professional driver's
license, it also conducts a rigid examination
of all driver applicants before they are hired.
In the early morning of June 20, 1989, the
White
Truck
driven
by
Dunca
left
Tuguegarao,
Cagayan
bound
to
San
Fernando, Pampanga loaded with 2,000
cases of empty beer "Grande" bottles.
Seated at the front right seat beside him
was Ferdinand Domingo, his truck helper
("pahinante" in Pilipino). At around 4:00
o'clock that same morning while the truck
was descending at a slight downgrade along
the national road at Tagaran, Cauayan,

Isabela, it approached a damaged portion of

the road covering the full width of the
truck's right lane going south and about six
meters in length. These made the surface of
the road uneven because the potholes were
about five to six inches deep. The left lane
parallel to this damaged portion is smooth.
As narrated by Ferdinand Domingo, before
approaching the potholes, he and Dunca saw
the Nissan with its headlights on coming
from the opposite direction. They used to
evade this damaged road by taking the left
lance but at that particular moment,
because of the incoming vehicle, they had to
run over it. This caused the truck to bounce
wildly. Dunca lost control of the wheels and
the truck swerved to the left invading the
lane of the Nissan. As a result, Dunca's
vehicle rammed the incoming Nissan
dragging it to the left shoulder of the road
and climbed a ridge above said shoulder
where it finally stopped. (see Exh. A-5, p. 8,
record). The Nissan was severely damaged
(Exhs. A-7, A-8, A-9 and A-14, pp. 9-11
record), and its two passengers, namely:
Feliciano Balcita and Francisco Dy, Jr. died
instantly (Exh. A-19) from external and
internal hemorrhage and multiple fractures
(pp. 15 and 16, record).
For the funeral expenses of Francisco Dy, Jr.
her widow spent P651,360.00 (Exh. I-3). At
the time of his death he was 45 years old.
He was the President and Chairman of the
Board of the Dynamic Wood Products and
Development Corporation (DWPC), a wood
processing establishment, from which he
was receiving an income of P10,000.00 a
month. (Exh. D). In the Articles of
Incorporation of the DWPC, the spouses
Francisco Dy, Jr. and Rosario Perez Dy
appear to be stockholders of 10,000 shares
each with par value of P100.00 per share
out of its outstanding and subscribed capital
stock
of
60,000
shares
valued
at
P6,000,000.00 (Exhs. K-1 & 10-B). Under its
1988 Income Tax Returns (Exh. J) the DWPC
had a taxable net income of P78,499.30
(Exh. J). Francisco Dy, Jr. was a La Salle
University
graduate
in
Business
Administration, past president of the Pasay
Jaycees, National Treasurer and President of
the Philippine Jaycees in 1971 and 1976,
respectively, and World Vice-President of
Jaycees International in 1979. He was also
the recipient of numerous awards as a civic
leader (Exh. C). His children were all
studying in prestigious schools and spent
about P180,000.00 for their education in
1988 alone (Exh. H-4).

As stated earlier, the plaintiffs' procurement

of a writ of attachment of the properties of
the Corporation was declared illegal by the
Court of Appeals. It was shown that on
December 26, 1989, Deputy Sheriff Edgardo
Zabat of the RTC at San Fernando,
Pampanga, attached six units of Truck
Tractors and trailers of the Corporation at its
garage at San Fernando, Pampanga. These
vehicles were kept under PC guard by the
plaintiffs in said garage thus preventing the
Corporation to operate them. However, on
December 28, 1989, the Court of Appeals
dissolved the writ (p. 30, record) and on
December 29, 1989, said Sheriff reported to
this Court that the attached vehicles were
taken by the defendant's representative,
Melita Manapil (Exh. O, p. 31, record). The
defendant's general Manager declared that it
lost P21,000.00 per day for the nonoperation of the six units during their
attachment (p. 31, t.s.n., Natividad C.
Babaran, proceedings on December 10,
1990).8
On June 6, 1992, the trial court rendered a joint
decision, the dispositive portion of which reads as
follows:
WHEREFORE, in view of the foregoing
considerations judgment is hereby rendered:
1. Finding the accused Romeo Dunca y de
Tumol guilty beyond reasonable doubt of the
crime of Double Homicide through Reckless
Imprudence with violation of the Motor
Vehicle Law (Rep. Act No. 4136), and
appreciating in his favor the mitigating
circumstance of voluntary surrender without
any aggravating circumstance to offset the
same, the Court hereby sentences him to
suffer two (2) indeterminate penalties of
four months and one day of arresto
mayor as minimum to three years, six
months and twenty days as maximum; to
indemnify the Heirs of Francisco Dy. Jr. in
the
amount
of
P3,000,000.00
as
compensatory damages, P1,000,000.00 as
moral damages, and P1,030,000.00 as
funeral expenses;
2. Ordering the plaintiff in Civil Case No. Br.
19-424 to pay the defendant therein actual
damages in the amount of P84,000.00; and
3. Ordering the dismissal of the complaint in
Civil Case No. Br. 19-424.
No pronouncement as to costs.

SO ORDERED.
Cauayan, Isabela, June 6, 1992.
(Sgd.)
ARTEMIO
Regional Trial Judge9

R.

ALIVIA

On September 3, 1992, petitioner and the accused

filed a notice of appeal from the joint decision. 10
On the other hand, private respondents moved for
amendment of the dispositive portion of the joint
decision so as to hold petitioner subsidiarily liable
for the damages awarded to the private
respondents in the event of insolvency of the
accused. 11
On October 26, 1992, the trial court rendered a
supplemental decision amending the dispositive
portion by inserting an additional paragraph reading
as follows:
2:A Ordering the defendant Reyes
Trucking Corporation subsidiarily liable for all
the damages awarded to the heirs of
Francisco Dy, Jr., in the event of insolvency
of the accused but deducting therefrom the
damages of P84,000.00 awarded to said
defendant in the next preceding paragraph;
and . . . 12
On November 12, 1992, petitioner filed with the
trial court a supplemental notice of appeal from the
supplemental decision. 13
During the pendency of the appeal, the accused
jumped bail and fled to a foreign country. By
resolution dated December 29, 1994, the Court of
Appeals dismissed the appeal of the accused in the
criminal case. 14
On January 6, 1997, the Court of Appeals rendered
an amended decision affirming that of the trial
court, as set out in the opening paragraph of this
decision. 15
On January 31, 1997, petitioner filed a motion for
reconsideration of the amended decision. 16
On April 21, 1997, the Court of Appeals denied
petitioner's motion for reconsideration for lack of
merit 17
Hence, this petition for review.

18

On July 21, 1997, the Court required respondents to

comment on the petition within ten (10) days from
notice. 19

On January 27, 1998, the Solicitor General filed his

comment. 20 On April 13, 1998, the Court granted
leave to petitioner to file a reply and noted the reply
it filed on March 11, 1998. 21
We now resolve to give due course to the petition
and decide the case.
Petitioner raises three (3) grounds for allowance of
the petition, which, however, boil down to two (2)
basic issues, namely:
1. May petitioner as owner of the truck
involved in the accident be held subsidiarily
liable for the damages awarded to the
offended parties in the criminal action
against the truck driver despite the filing of
a separate civil action by the offended
parties against the employer of the truck
driver?
2. May the Court award damages to the
offended parties in the criminal case despite
the filing of a civil action against the
employer of the truck driver; and in
amounts exceeding that alleged in the
information
for
reckless
imprudence
resulting in homicide and damage to
property? 22
We grant the petition, resolving under the
circumstances pro hac vice to remand the cases to
the trial court for determination of the civil liability
of petitioner as employer of the accused driver in
the civil action quasi ex delictore-opened for the
purpose.
In negligence cases, the aggrieved party has the
choice between (1) an action to enforce civil liability
arising from crime under Article 100 of the Revised
Penal Code; and (2) a separate action for quasi
delict under Article 2176 of the Civil Code of the
Philippines. Once the choice is made, the injured
party can not avail himself of any other remedy
because he may not recover damages twice for the
same
negligent
act
or
omission
of
the
accused. 23This
is
the
rule
against
double
recovery.1wphi1.nt
In other words, "the same act or omission can
create two kinds of liability on the part of the
offender, that is, civil liability ex delicto, and civil
liability quasi delicto" either of which "may be
enforced against the culprit, subject to the caveat
under Article 2177 of the Civil Code that the
offended party can not recover damages under both
types of liability." 24
In the instant case, the offended parties elected to
file a separate civil action for damages against

petitioner as employer of the accused, based

on quasi delict, under Article 2176 of the Civil Code
of the Philippines. Private respondents sued
petitioner Rafael Reyes Trucking Corporation, as the
employer of the accused, to be vicariously liable for
the fault or negligence of the latter. Under the law,
this vicarious liability of the employer is founded on
at least two specific provisions of law.
The first is expressed in Article 2176 in relation to
Article 2180 of the Civil Code, which would allow an
action predicated on quasi-delict to be instituted by
the injured party against the employer for an act or
omission of the employee and would necessitate
only a preponderance of evidence to prevail. Here,
the liability of the employer for the negligent
conduct of the subordinate is direct and primary,
subject to the defense of due diligence in the
selection and supervision of the employee. The
enforcement of the judgment against the employer
in an action based on Article 2176 does not require
the employee to be insolvent since the nature of the
liability of the employer with that of the employee,
the
two
being
statutorily
considered
joint
tortfeasors, is solidary. 25 The second, predicated on
Article 103 of the Revised Penal Code, provides that
an employer may be held subsidiarily civilly liable
for a felony committed by his employee in the
discharge of his duty. This liability attaches when
the employee is convicted of a crime done in the
performance of his work and is found to be
insolvent that renders him unable to properly
respond to the civil liability adjudged. 26
As regards the first issue, the answer is in the
negative. Rafael Reyes Trucking Corporation, as
employer of the accused who has been adjudged
guilty in the criminal case for reckless imprudence,
can not be held subsidiarily liable because of the
filing of the separate civil action based on quasi
delict against it. In view of the reservation to file,
and the subsequent filing of the civil action for
recovery of civil liability, the same was not instituted
with the criminal action. Such separate civil action
was for recovery of damages under Article 2176 of
the Civil Code, arising from the same act or
omission of the accused. 27
Pursuant to the provision of Rule 111, Section 1,
paragraph 3 of the 1985 Rules of Criminal
Procedure,
when
private
respondents,
as
complainants in the criminal action, reserved the
right to file the separate civil action, they waived
other available civil actions predicated on the same
act or omission of the accused-driver. Such civil
action includes the recovery of indemnity under the
Revised Penal Code, and damages under Articles
32, 33, and 34 of the Civil Code of the Philippines
arising from the same act or omission of the
accused. 28

The intention of private respondents to proceed

primarily and directly against petitioner as employer
of accused truck driver became clearer when they
did not ask for the dismissal of the civil action
against the latter based onquasi delict.
Consequently, the Court of Appeals and the trial
court erred in holding the accused civilly liable, and
petitioner-employer of the accused subsidiarily
liable for damages arising from crime (ex delicto) in
the criminal action as the offended parties in fact
filed a separate civil action against the employer
based on quasi delict resulting in the waiver of the
civil action ex delicto.
It might be argued that private respondents as
complainants in the criminal case withdrew the
reservation to file a civil action against the driver
(accused) and manifested that they would pursue
the civil liability of the driver in the criminal action.
However, the withdrawal is ineffective to reverse the
effect of the reservation earlier made because
private respondents did not withdraw the civil action
against petitioner based on quasi delict. In such a
case, the provision of Rule 111, Section 1,
paragraph 3 of the 1985 Rules on Criminal
Procedure is clear that the reservation to file or the
filing of a separate civil action results in a waiver of
other available civil actions arising from the same
act or omission of the accused. Rule 111, Section 1,
paragraph 2 enumerated what are the civil actions
deemed waived upon such reservation or filing, and
one of which is the civil indemnity under the
Revised Penal Code. Rule 111, Section 1, paragraph
3 of the 1985 Rules on Criminal Procedure
specifically provides:
A waiver of any of the civil actions
extinguishes the others. The institution of, or
the reservation of the right to file, any of
said civil actions separately waives the
others.
The rationale behind this rule is the avoidance of
multiple suits between the same litigants arising out
of the same act or omission of the offender. The
restrictive phraseology of the section under
consideration is meant to cover all kinds of civil
actions, regardless of their source in law, provided
that the action has for its basis the same act or
omission of the offender. 29
However, petitioner as defendant in the separate
civil action for damages filed against it, based
on quasi delict, may be held liable thereon. Thus,
the trial court grievously erred in dismissing
plaintiff's civil complaint. And the Court of Appeals
erred in affirming the trial court's decision.
Unfortunately private respondents did not appeal
from such dismissal and could not be granted
affirmative relief. 30

The Court, however, in exceptional cases has

relaxed the rules "in order to promote their
objectives and assist the parties in obtaining just,
speedy, and inexpensive determination of every
action or proceeding" 31 or exempted "a particular
case from the operation of the rules." 32
Invoking this principle, we rule that the trial court
erred in awarding civil damages in the criminal case
and in dismissing the civil action. Apparently
satisfied with such award, private respondent did
not appeal from the dismissal of the civil case.
However, petitioner did appeal. Hence, this case
should be remanded to the trial court so that it may
render decision in the civil case awarding damages
as may be warranted by the evidence. 33
With regard to the second issue, the award of
damages in the criminal case was improper because
the civil action for the recovery of civil liability was
waived in the criminal action by the filing of a
separate civil action against the employer. As
enunciated in Ramos vs. Gonong, 34 "civil indemnity
is not part of the penalty for the crime committed."
The only issue brought before the trial court in the
criminal action is whether accused Romeo Dunca y
de Tumol is guilty of reckless imprudence resulting
in homicide and damage to property. The action for
recovery of civil liability is not included therein, but
is covered by the separate civil action filed against
the petitioner as employer of the accused truckdriver.
In this case, accused-driver jumped bail pending his
appeal from his conviction. Thus, the judgment
convicting the accused became final and executory,
but only insofar as the penalty in the criminal action
is concerned. The damages awarded in the criminal
action was invalid because of its effective waiver.
The pronouncement was void because the action for
recovery of the civil liability arising from the crime
has been waived in said criminal action.
With respect to the issue that the award of damages
in the criminal action exceeded the amount of
damages alleged in the amended information, the
issue is de minimis. At any rate, the trial court erred
in awarding damages in the criminal case because
by virtue of the reservation of the right to bring a
separate civil action or the filing thereof, "there
would be no possibility that the employer would be
held liable because in such a case there would be no
pronouncement as to the civil liability of the
accused. 35
As a final note, we reiterate that "the policy against
double recovery requires that only one action be
maintained for the same act or omission whether
the action is brought against the employee or
against his employer. 36 The injured party must

choose which of the available causes of action for

damages he will bring. 37

penalty for the guidance of bench and bar in strict

adherence to precedent.

Parenthetically, the trial court found the accused

"guilty beyond reasonable doubt of the crime of
Double Homicide Through Reckless Imprudence with
violation of the Motor Vehicle Law (Rep. Act No.
4136)". There is no such nomenclature of an
offense under the Revised Penal Code. Thus, the
trial court was misled to sentence the accused "to
suffer two (2) indeterminate penalties of four (4)
months and one (1) day of arresto mayor, as
minimum, to three (3) years, six (6) months and
twenty (20) days of prision correccional, as
maximum." This is erroneous because in reckless
imprudence cases, the actual penalty for criminal
negligence bears no relation to the individual willfull
crime or crimes committed, but is set in relation to
a whole class, or series of crimes. 38

WHEREFORE, the Court GRANTS the petition and

SETS ASIDE the amended decision and resolution of
the Court of Appeals in CA-G.R. CR No. 14448,
promulgated on January 6, 1997, and the joint
decision of the Regional Trial Court, Isabela, Branch
19, Cauayan, in Criminal Case No. Br. 19-311 and
Civil Case No. Br. 19-424, dated June 6, 1992.

Unfortunately, we can no longer correct this

judgment even if erroneous, as it is, because it has
become final and executory.
Under Article 365 of the Revised Penal Code,
criminal negligence "is treated as a mere quasi
offense, and dealt with separately from willful
offenses. It is not a question of classification or
terminology. In intentional crimes, the act itself is
punished; in negligence or imprudence, what is
principally penalized is the mental attitude or
condition
behind
the
act,
the
dangerous
recklessness,
lack
of
care
or
foresight,
the imprudencia punible. Much of the confusion has
arisen from the common use of such descriptive
phrase as "homicide through reckless imprudence",
and the like; when the strict technical sense is,
more accurately, "reckless imprudence resulting in
homicide"; or "simple imprudence causing damages
to property"." 39
There is need, therefore, to rectify the designation
of the offense without disturbing the imposed

IN LIEU THEREOF, the Court renders judgment as

follows:
(1) In Criminal Case No. Br. 19-311, the
Court declares the accused Romeo Dunca y
de Tumol guilty beyond reasonable doubt of
reckless imprudence resulting in homicide
and damage to property, defined and
penalized under Article 365, paragraph 2 of
the Revised Penal Code, with violation of the
automobile law (R.A. No. 4136, as
amended), and sentences him to suffer two
(2) indeterminate penalties of four (4)
months and one (1) day of arresto mayor,
as minimum, to three (3) years, six (6)
months and twenty (20) days of prision
correccional,
as
maximum, 40 without
indemnity, and to pay the costs, and
(2) In Civil Case No. Br. 19-424, the Court
orders the case re-opened to determine the
liability of the defendant Rafael Reyes
Trucking Corporation to plaintiffs and that of
plaintiffs on defendant's counterclaim.
No costs in this instance.
SO ORDERED.