Torts Cases

1
TORTS || First Batch
TORTS
1. Barrons Mktg. Corp. v. Phelps Dodge Phils.
G.R. No. 126486; Feb. 9, 1998
2. Dr. Genevieve L. Huang v. Philippine Hoteliers, Inc.
G.R. No. 180440; Dec. 5, 2012
3. Lehner V. Martires v. Ricardo Cokieng
G.R. No. 150192; Feb. 17, 2005
4. Hector C. Villanueva v. UCPB
G.R. No. 138291; March 7, 2000
5. Metrobank v. CA & Antonio Laio
G.R. No. 154685; Nov. 27, 2006
6. Clarissa U. Mata v. Alexander M. Agravante, et al.
G.R. No. 149597; Aug. 8, 2008
7. Alfonso Yuchengco v. The Manila Chronicles, et al.
G.R. No. 184315; Nov. 28, 2011
8. Salvador L. Budlong v. Aquiles T. Apalisok
G.R. No. L-60151; June 24, 1983
9. Solidbank Corp. v. Sps. Teodulfo & Carmen Arrieta
G.R. No. 152720; Feb. 17, 2005
10.
Allan C. Go v. Mortimer F. Cordero
G.R. No. 164703; May 4, 2010
Cordero v. Go
G.R. No. 164747; May 4, 2010
11.
Eduardo P. Manuel v. People of the Philippines
G.R. No. 165842; Nov. 9, 2005
12.
Albenson Enterprises Corp., Jesse Yap & Benjamin Mendiona
v. CA & Eugenio S. Baltao
G.R. No. 88694; Jan. 11, 1993
13.
Purita Miranda Vestil v. David & Teresita Uy
G.R. No. 74431; Nov. 6, 1989

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 126486 February 9, 1998

BARONS MARKETING CORP., petitioner,
vs.
COURT OF APPEALS and PHELPS DODGE PHILS., INC.
respondents.
Phils., Inc. filed a complaint before the Pasig Regional Trial

Court against petitioner Barons Marketing Corporation for the
recovery of P3,802,478.20 representing the value of the
wires and cables the former had delivered to the latter,
including interest. Phelps Dodge likewise prayed that it be
awarded attorney's fees at the rate of 25% of the amount
demanded, exemplary damages amounting to at least
P100,000.00, the expenses of litigation and the costs of suit.
Petitioner, in its answer, admitted purchasing the wires and
cables from private respondent but disputed the amount
claimed by the latter. Petitioner likewise interposed a
counterclaim against private respondent, alleging that it
suffered injury to its reputation due to Phelps Dodge's acts.
Such acts were purportedly calculated to humiliate petitioner
and constituted an abuse of rights.
KAPUNAN, J.:
After hearing, the trial court on 17 June 1991 rendered its

decision, the dispositive portion of which reads:
The instant petition raises two issues: (1) whether or not

private respondent is guilty of abuse of right; and (2) whether
or not private respondent is entitled to interest and attorney's
fees.
WHEREFORE, from all the foregoing considerations, the

Court finds Phelps Dodge Phils., Inc. to have preponderantly
proven its case and hereby orders Barons Marketing, Inc. to
pay Phelps Dodge the following:
The facts are undisputed:
1. P3,108,000.00 constituting the unpaid balance of

defendant's purchases from plaintiff and interest thereon at
12% per annum computed from the respective expiration of
the 60 day credit term, vis-a-vis the various sales invoices
and/or delivery receipts;
On August 31, 1973, plaintiff [Phelps Dodge, Philippines, Inc.

private respondent herein] appointed defendant [petitioner
Barons Marketing, Corporation] as one of its dealers of
electrical wires and cables effective September 1, 1973 (Exh.
A). As such dealer, defendant was given by plaintiff 60 days
credit for its purchases of plaintiff's electrical products. This
credit term was to be reckoned from the date of delivery by
plaintiff of its products to defendant (Exh. 1).
During the period covering December 1986 to August 17,
1987, defendant purchased, on credit, from plaintiff various
electrical wires and cables in the total amount of
P4,102,438.30 (Exh. B to K). These wires and cables were in
turn sold, pursuant to previous arrangements, by defendant
to MERALCO, the former being the accredited supplier of the
electrical requirements of the latter. Under the sales invoices
issued by plaintiff to defendant for the subject purchases, it is
stipulated that interest at 12% on the amount due for
attorney's fees and collection (Exh. BB). 1 On September 7,
1987, defendant paid plaintiff the amount of P300,000.00 out
of its total purchases as above-stated (Exh. S), thereby
leaving an unpaid account on the aforesaid deliveries of
P3,802,478.20. On several occasions, plaintiff wrote
defendant demanding payment of its outstanding obligations
due plaintiff (Exhs. L, M, N, and P). In response, defendant
wrote plaintiff on October 5, 1987 requesting the latter if it
could pay its outstanding account in monthly installments of
P500,000.00 plus 1% interest per month commencing on
October 15, 1987 until full payment (Exh. O and O-4).
Plaintiff, however, rejected defendant's offer and accordingly
reiterated its demand for the full payment of defendant's
account (Exh. P). 2
On 29 October 1987, private respondent Phelps Dodge
2. 25% of the preceding obligation for and as attorney's fees;

3. P10,000.00 as exemplary damages;
4. Costs of suit. 3
Both parties appealed to respondent court. Private
respondent claimed that the trial court should have awarded
it the sum of P3,802,478.20, the amount which appeared in
the body of the complaint and proven during the trial rather
than P3,1081000.00 The latter amount appears in petitioner's
prayer supposedly as a result of a typographical error.
On the other hand, petitioner reiterated its claims for
damages as a result of "creditor's abuse." It also alleged that
private respondent failed to prove its cause of action against
it.
On 25 June 1996, the Court of Appeals rendered a decision
modifying the decision of the trial court, thus:
WHEREFORE, from all the foregoing considerations, the
Court finds Phelps Dodge Phils., Inc. to have preponderantly
proven its case and hereby orders Barons Marketing, Inc. to
pay Phelps Dodge the following:
1. P3,802,478.20 constituting the unpaid balance of
defendant's purchases from plaintiff and interest thereon at
12% per annum computed from the respective expiration of

the 60 day credit term, vis-a-vis the various sales invoices
and/or delivery receipts; and
Petitioner Barons Marketing is now before this Court alleging

that respondent court erred when it held (1) private
respondent Phelps Dodge not guilty of "creditor's abuse," and
(2) petitioner liable to private respondent for interest and
attorney's fees.
spanning more than 13 years before the complaint was filed,

that the petitioner had been a good and reliable dealer
enjoying a good credit standing during the period before it
became delinquent in 1987, that the relationship between the
parties had been a fruitful one especially for the private
respondent, that the petitioner exerted its outmost efforts to
settle its obligations and avoid a suit, that the petitioner did
not evade in the payment of its obligation to the private
respondent, and that the petitioner was just asking a small
concession that it be allowed to liquidate its obligation to
eight (8) monthly installments of P500,000.00 plus 1%
interest per month on the balance which proposal was
supported by post-dated checks. 9
Expounding on its theory, petitioner states:
Petitioner does not deny private respondent's rights to

institute an action for collection and to claim full payment.
Indeed, petitioner's right to file an action for collection is
beyond cavil. 5 Likewise, private respondent's right to reject
petitioner's offer to pay in installments is guaranteed by
Article 1248 of the Civil Code which states:
In the ordinary course of events, a suit for collection of a sum

of money filed in court is done for the primary purpose of
collecting a debt or obligation. If there is an offer by the
debtor to pay its debt or obligation supported by post-dated
checks and with provision for interests, the normal response
of a creditor would be to accept the offer of compromise and
not file the suit for collection. It is of common knowledge that
proceedings in our courts would normally take years before
an action is finally settled. It is always wiser and more
prudent to accept an offer of payment in installment rather
than file an action in court to compel the debtor to settle his
obligation in full in a single payment.
2. 5% of the preceding obligation for and as attorney's fees.

No costs. 4
Art. 1248. Unless there is an express stipulation to that

effect, the creditor cannot be compelled partially to receive
the prestations in which the obligation consists. Neither may
the debtor be required to make partial payments.
However, when the debt is in part liquidated and in part
unliquidated, the creditor may demand and the debtor may
effect the payment of the former without waiting for the
liquidation of the latter.
Under this provision, the prestation, i.e., the object of the
obligation, must be performed in one act, not in parts.
Tolentino concedes that the right has its limitations:
Partial Prestations. Since the creditor cannot be
compelled to accept partial performance, unless otherwise
stipulated, the creditor who refuses to accept partial
prestations does not incur in delay or mora accipiendi,
except when there is abuse of right or if good faith requires
acceptance. 6
Indeed, the law, as set forth in Article 19 of the Civil Code,
prescribes a "primordial limitation on all rights" by setting
certain standards that must be observed in the exercise
thereof. 7 Thus:
Art. 19. Every person must, in the exercise of his rights and
in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.
Petitioner now invokes Article 19 and Article 21 8 of the Civil
Code, claiming that private respondent abused its rights
when it rejected petitioner's offer of settlement and
subsequently filed the action for collection considering:
. . . that the relationship between the parties started in 1973
xxx xxx xxx

. . . Why then did private respondent elect to file a suit for
collection rather than accept petitioner's offer of settlement,
supported by post-dated checks, by paying monthly
installments of P500,000.00 plus 1% per month commencing
on October 15, 1987 until full payment? The answer is
obvious. The action of private respondent in filling a suit for
collection was an abuse of right and exercised for the sole
purpose of prejudicing and injuring the petitioner. 10
Petitioner prays that the Court order private respondent to
pay petitioner moral and exemplary damages, attorney's
fees, as well as the costs of suit. It likewise asks that it be
allowed to liquidate its obligation to private respondent,
without interests, in eight equal monthly installments.
Petitioner's theory is untenable.
Both parties agree that to constitute an abuse of rights under
Article 19 the defendant must act with bad faith or intent to
prejudice the plaintiff. They cite the following comments of
Tolentino as their authority:
Test of Abuse of Right. Modern jurisprudence does not
permit acts which, although not unlawful, are anti-social.
There is undoubtedly an abuse of right when it is exercised
for the only purpose of prejudicing or injuring another. When
the objective of the actor is illegitimate, the illicit act cannot
be concealed under the guise of exercising a right. The
principle does not permit acts which, without utility or
legitimate purpose cause damage to another, because they

violate the concept of social solidarity which considers law as
rational and just. Hence, every abnormal exercise of a right,
contrary to its socio-economic purpose, is an abuse that will
give rise to liability. The exercise of a right must be in
accordance with the purpose for which it was established,
and must not be excessive or unduly harsh; there must be no
intention to injure another. Ultimately, however, and in
practice, courts, in the sound exercise of their discretion, will
have to determine all the facts and circumstances when the
exercise of a right is unjust, or when there has been an
abuse of right. 11
The question, therefore, is whether private respondent
intended to prejudice or injure petitioner when it rejected
petitioner's offer and filed the action for collection.
We hold in the negative. It is an elementary rule in this
jurisdiction that good faith is presumed and that the burden of
proving bad faith rests upon the party alleging the same. 12 In
the case at bar, petitioner has failed to prove bad faith on the
part of private respondent. Petitioner's allegation that private
respondent was motivated by a desire to terminate its agency
relationship with petitioner so that private respondent itself
may deal directly with Meralco is simply not supported by the
evidence. At most, such supposition is merely speculative.
Moreover, we find that private respondent was driven by very
legitimate reasons for rejecting petitioner's offer and
instituting the action for collection before the trial court. As
pointed out by private respondent, the corporation had its
own "cash position to protect in order for it to pay its own
obligations." This is not such "a lame and poor
rationalization" as petitioner purports it to be. For if private
respondent were to be required to accept petitioner's offer,
there would be no reason for the latter to reject similar offers
from its other debtors. Clearly, this would be inimical to the
interests of any enterprise, especially a profit-oriented one
like private respondent. It is plain to see that what we have
here is a mere exercise of rights, not an abuse thereof Under
these circumstances, we do not deem private respondent to
have acted in a manner contrary to morals, good customs or
public policy as to violate the provisions of Article 21 of the
Civil Code.
Consequently, petitioner's prayer for moral and exemplary
damages must thus be rejected. Petitioner's claim for moral
damages is anchored on Article 2219 (10) of the Civil Code
which states:
Art. 2219. Moral damages may be recovered in the following
and analogous cases:
xxx xxx xxx
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29,
30, 32, 34, and 35.
xxx xxx xxx
Having ruled that private respondent's acts did not transgress
the provisions of Article 21, petitioner cannot be entitled to

moral damages or, for that matter, exemplary damages.
While the amount of exemplary damages need not be
proved, petitioner must show that he is entitled to moral,
temperate or compensatory damages before the court may
consider the question of whether or not exemplary damages
should be awarded. 13 As we have observed above; petitioner
has failed to discharge this burden.
It may not be amiss to state that petitioner's contract with
private respondent has the force of law between them. 14
Petitioner is thus bound to fulfill what has been expressly
stipulated therein. 15 In the absence of any abuse of right,
private respondent cannot be allowed to perform its
obligation under such contract in parts. Otherwise, private
respondent's right under Article 1248 will be negated, the
sanctity of its contract with petitioner defiled. The principle of
autonomy of contracts 16 must be respected.
II
Under said contract, petitioner is liable to private respondent
for the unpaid balance of its purchases from private
respondent plus 12% interest. Private respondent's sales
invoices expressly provide that:
. . . Interest at 12% per annum will be charged on all overdue
account plus 25% on said amount for attorney's fees and
collection. . . . 17
It may also be noted that the above stipulation, insofar as it
provides for the payment of "25% on said amount for
attorney's fees and collection (sic)," constitutes what is
known as a penal clause. 18 Petitioner is thus obliged to pay
such penalty in addition to the 12% annual interest, there
being an express stipulation to that effect.
Petitioner nevertheless urges this Court to reduce the
attorney's fees for being "grossly excessive," "considering the
nature of the case which is a mere action for collection of a
sum of money." It may be pointed out however that the above
penalty is supposed to answer not only for attorney's fees but
for collection fees as well. Moreover:
. . . the attorneys' fees here provided is not, strictly speaking,
the attorneys' fees recoverable as between attorney and
client spoken of and regulated by the Rules of Court. Rather,
the attorneys' fees here are in the nature of liquidated
damages and the stipulation therefor is aptly called a penal
clause. It has been said that so long as such stipulation does
not contravene law, morals, or public order, it is strictly
binding upon defendant. The attorneys' fees so provided are
awarded in favor of the litigant, not his counsel. It is the
litigant, not counsel, who is the judgment creditor entitled to
enforce the judgment by execution. 19
Nonetheless, courts are empowered to reduce such penalty if
the same is "iniquitous or unconscionable." Article 1229 of
the Civil Code states thus:

Art. 1229. The judge shall equitably reduce the penalty when
the principal obligation has been partly or been irregularly
complied with by the debtor. Even if there has no
performance, the penalty may also be reduced by the courts
if it is iniquitous or unconscionable. (Emphasis supplied.)
The sentiments of the law are echoed in Article 2227 of the
same Code:
Art. 2227. Liquidated damages, whether intended as an
indemnity or a penalty, shall be equitably reduced if they are
iniquitous or unconscionable.
5 See Melendez v. Lavarias, 9 SCRA 548 (1963).

6 IV Tolentino, Commentaries and Jurisprudence on the Civil
Code of the Philippines, 1990 ed., p. 298; emphasis supplied.
7 Globe Mackay Cable and Radio Corp. v. Court of Appeals,
176 SCRA 778 (1989).
8 Art. 21. Any person who willfully causes loss or injury to
another in a manner that is contrary to morals, goods
customs or public policy shall compensate the latter for the
damage.
It is true that we have upheld the reasonableness of penalties

in the form of attorney's fees consisting of twenty-five percent
(25%) of the principal debt plus interest. 20 In the case at bar,
however, the interest alone runs to some four and a half
million pesos (P4.5M), even exceeding the principal debt
amounting to almost four million pesos (P4.0M). Twenty five
percent (25%) of the principal and interest amounts to
roughly two million pesos (P2M). In real terms, therefore, the
attorney's fees and collection fees are manifestly exorbitant.
Accordingly, we reduce the same to ten percent (10%) of the
principal.
9 Rollo, p. 137.
Private respondent, however, argues that petitioner failed to

question the award of attorney's fees on appeal before
respondent court and raised the issue only in its motion for
reconsideration. Consequently, petitioner should be deemed
to have waived its right to question such award.
14 Art. 1158, Civil Code.
Private respondent's attempts to dissuade us from reducing

the penalty are futile. The Court is clothed with ample
authority to review matters, even if they are not assigned as
errors in their appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case. 21
WHEREFORE, the decision of the Court of Appeals is hereby
MODIFIED in that the attorney's and collection fees are
reduced to ten percent (10%) of the principal but is
AFFIRMED in all other respects.
SO ORDERED.
Narvasa, C.J., Romero, Francisco and Purisima, JJ., concur.
Footnotes
1 More accurately, the invoices state:
. . . Interest at 12% per annum will be charged on all overdue
account plus 25% on said amount for attorney's fees and
collection. . . .
2 Rollo, p. 51.
3 Id., at 54.
4 Id., at 43; emphasis in the original.
10 Id., at 18-20.
11 I Tolentino, pp. 61-62; emphasis supplied.
12 Ford Philippines v. Court of Appeals, G.R. No. 99039,
February 3, 1997.

17 Exhibit "BB;" emphasis supplied.
18 See Luneta Motor Co. v. Mora, 73 Phil. 80 (1941).
19 Polytrade Corporation v. Blanco, 30 SCRA 187 (1969).
20 See Polytrade v. Blanco, supra, note 1.
21 Korean Airlines Co., Ltd. v. Court of Appeals, 234 SCRA
717 (1994); see also: Asset Privatization Trust v. CA, 214
SCRA 400 (1994).

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 180440
December 5, 2012
DR. GENEVIEVE L. HUANG, Petitioner,

vs.
PHILIPPINE HOTELIERS, INC., DUSIT THANI PUBLIC
CO., LTD. And FIRST LEPANTO TAISHO INSURANCE
CORPORATION, Respondents.
DECISION
PEREZ, J.:
For this Courts resolution is a Petition for Review on
Certiorari under Rule 45 of the Rules of Court, assailing the
Decision1 of the Court of Appeals in CA-G.R. CV No. 87065
dated 9 August 2007, affirming the Decision 2 of Branch 56 of
the Regional Trial Court (RTC) of Makati City in Civil Case
No. 96-1367 dated 21 February 2006, dismissing for lack of
merit herein petitioner Dr. Genevieve L. Huangs Complaint
for Damages. Assailed as well is the Court of Appeals
Resolution3 dated 5 November 2007 denying for lack of merit
petitioners Motion for Reconsideration.
This case stemmed from a Complaint for Damages filed on
28 August 1996 by petitioner Dr. Genevieve L. Huang 4
against herein respondents Philippine Hoteliers, Inc. (PHI) 5
and Dusit Thani Public Co., Ltd. (DTPCI), 6 as owners of Dusit
Thani Hotel Manila (Dusit Hotel);7 and co-respondent First
Lepanto Taisho Insurance Corporation (First Lepanto), 8 as
insurer of the aforesaid hotel. The said Complaint was
premised on the alleged negligence of respondents PHI and
DTPCIs staff, in the untimely putting off all the lights within
the hotels swimming pool area, as well as the locking of the
main entrance door of the area, prompting petitioner to grope
for a way out. While doing so, a folding wooden counter top
fell on her head causing her serious brain injury. The
negligence was allegedly compounded by respondents PHI
and DTPCIs failure to render prompt and adequate medical
assistance.
Petitioners version of the antecedents of this case is as
follows:
On 11 June 1995, Delia Goldberg (Delia), a registered guest
of Dusit Hotel, invited her friend, petitioner Dr. Genevieve L.
Huang, for a swim at the hotels swimming pool facility. They
started bathing at around 5:00 p.m. At around 7:00 p.m., the
hotels swimming pool attendant informed them that the
swimming pool area was about to be closed. The two
subsequently proceeded to the shower room adjacent to the
swimming pool to take a shower and dress up. However,
when they came out of the bathroom, the entire swimming
pool area was already pitch black and there was no longer
any person around but the two of them. They carefully

walked towards the main door leading to the hotel but, to
their surprise, the door was locked.9
Petitioner and Delia waited for 10 more minutes near the
door hoping someone would come to their rescue but they
waited in vain. Delia became anxious about their situation so
petitioner began to walk around to look for a house phone.
Delia followed petitioner. After some time, petitioner saw a
phone behind the lifeguards counter. While slowly walking
towards the phone, a hard and heavy object, which later
turned out to be the folding wooden counter top, fell on
petitioners head that knocked her down almost
unconscious.10
Delia immediately got hold of the house phone and notified
the hotel telephone operator of the incident. Not long after,
the hotel staff arrived at the main entrance door of the
swimming pool area but it took them at least 20 to 30 minutes
to get inside. When the door was finally opened, three hotel
chambermaids assisted petitioner by placing an ice pack and
applying some ointment on her head. After petitioner had
slightly recovered, she requested to be assisted to the hotels
coffee shop to have some rest. Petitioner demanded the
services of the hotel physician.11
Dr. Violeta Dalumpines (Dr. Dalumpines) arrived. She
approached petitioner and introduced herself as the hotel
physician. However, instead of immediately providing the
needed medical assistance, Dr. Dalumpines presented a
"Waiver" and demanded that it be signed by petitioner,
otherwise, the hotel management will not render her any
assistance. Petitioner refused to do so.12
After eating her dinner and having rested for a while,
petitioner left the hotels coffee shop and went home.
Thereupon, petitioner started to feel extraordinary dizziness
accompanied by an uncomfortable feeling in her stomach,
which lasted until the following day. Petitioner was
constrained to stay at home, thus, missing all her important
appointments with her patients. She also began experiencing
"on" and "off" severe headaches that caused her three (3)
sleepless nights.13
Petitioner, thus, decided to consult a certain Dr. Perry Noble
(Dr. Noble), a neurologist from Makati Medical Center, who
required her to have an X-ray and a Magnetic Resonance
Imaging (MRI) tests.14 The MRI Report15 dated 23 August
1995 revealed the following findings:
CONSULTATION REPORT:
MRI examination of the brain shows scattered areas of
intraparenchymal contusions and involving mainly the left
middle and posterior temporal and slightly the right anterior
temporal lobe.
Other small areas of contusions with suggestive pertechiae
are seen in the left fronto-parietal, left parieto-occipital and
with deep frontal periventricular subcortical and cortical
regions. There is no mass effect nor signs of localized

hemorrhagic extravasation.
The ventricles are not enlarged, quite symmetrical without
shifts or deformities; the peripheral sulci are within normal
limits.
The C-P angles, petromastoids, sella, extrasellar and retro
orbital areas appear normal.
The brainstem is unremarkable.
IMPRESSION: Scattered small intraparenchymal contusions
mainly involving the left middle-posterior temporal lobe and
also right medial anterior temporal, both deep frontal
subcortical, left parieto-occipital subcortical and cortical
regions. Ischemic etiology not ruled out. No localized intra or extracerebral hemorrhage.16
Petitioner claimed that the aforesaid MRI result clearly
showed that her head was bruised. Based also on the same
MRI result, Dr. Noble told her that she has a very serious
brain injury. In view thereof, Dr. Noble prescribed the
necessary medicine for her condition.17
Petitioner likewise consulted a certain Dr. Ofelia Adapon, also
a neurologist from Makati Medical Center, who required her
to undergo an Electroencephalogram examination (EEG) to
measure the electrostatic in her brain.18 Based on its result,19
Dr. Ofelia Adapon informed her that she has a serious
conditiona permanent one. Dr. Ofelia Adapon similarly
prescribed medicines for her brain injury.20
Petitioner, once again, consulted Dr. Sibayan, who simply

told her to just relax and to continue taking her medicines.
Petitioner also consulted other neurologists, who all advised
her to just continue her medications and to undergo physical
therapy for her neck pain.28
Sometime in 1996, petitioner consulted as well a certain Dr.
Victor Lopez (Dr. Lopez), an ophthalmologist from the Makati
Medical Center, because of her poor vision, which she has
experienced for several months.29 Petitioners Eye Report
dated 5 March 199630 issued by Dr. Lopez stated:
"IMPRESSION: Posterior vitreous detachment, right eye of
floaters." Dr. Lopez told petitioner that her detached eye is
permanent and very serious. Dr. Lopez then prescribed an
eye drop to petitioner.31
For petitioners frustration to dissipate and to regain her
former strength and physical well-being, she consulted
another neuro-surgeon from Makati Medical Center by the
name of Dr. Leopoldo P. Pardo, Jr. (Dr. Pardo, Jr.). 32 She
disclosed to Dr. Pardo, Jr. that at the age of 18 she suffered a
stroke due to mitral valve disease and that she was given
treatments, which also resulted in thrombocytopenia. In Dr.
Pardo, Jr.s medical evaluation of petitioner dated 15 May
1996,33 he made the following diagnosis and opinion:
DIAGNOSIS AND OPINION:
This patient sustained a severe head injury in (sic) 11 June
1995 and as a result of which she developed the following
injuries:
Petitioners condition did not get better. Hence, sometime in

September 1995, she consulted another neuro-surgeon by
the name of Dr. Renato Sibayan (Dr. Sibayan), who required
her to have an X-ray test.21 According to petitioner, Dr.
Sibayans finding was the same as those of the previous
doctors that she had consultedshe has a serious brain
injury.22
1. Cerebral Concussion and Contusion
By reason of the unfortunate 11 June 1995 incident inside the

hotels swimming pool area, petitioner also started to feel
losing her memory, which greatly affected and disrupted the
practice of her chosen profession. 23 Thus, on 25 October
1995, petitioner, through counsel, sent a demand letter 24 to
respondents PHI and DTPCI seeking payment of an amount
not less than P100,000,000.00 representing loss of earnings
on her remaining life span. But, petitioners demand was
unheeded.
5. Cervical Sprain, chronic recurrent
In November 1995, petitioner went to the United States of

America (USA) for further medical treatment. She consulted
a certain Dr. Gerald Steinberg and a certain Dr. Joel Dokson 25
from Mount Sinai Hospital who both found that she has "post
traumatic-post concussion/contusion cephalgias-vascular
and neuralgia."26 She was then prescribed to take some
medications for severe pain and to undergo physical therapy.
Her condition did not improve so she returned to the
Philippines.27
2. Post-traumatic Epilepsy
3. Post-concussional Syndrome
4. Minimal Brain Dysfunction
It is my opinion that the symptoms she complained of in the

foregoing history are all related to and a result of the injury
sustained on 11 June 1995.
It is further my opinion that the above diagnosis and
complaints do materially affect her duties and functions as a
practicing physician and dermatologist, and that she will
require treatment for an undetermined period of time.
The percentage of disability is not calculated at this time and
will require further evaluation and observation.34
Dr. Pardo, Jr. then advised petitioner to continue her
medications.35
Petitioner likewise consulted a certain Dr. Tenchavez 36 for her
follow-up EEG.37 He similarly prescribed medicine for

petitioners deep brain injury. He also gave her pain killer for
her headache and advised her to undergo physical therapy.
Her symptoms, however, persisted all the more.38
In 1999, petitioner consulted another neurologist at the
Makati Medical Center by the name of Dr. Martesio Perez
(Dr. Perez) because of severe fleeting pains in her head,
arms and legs; difficulty in concentration; and warm
sensation of the legs, which symptoms also occurred after
the 11 June 1995 incident. Upon examination, Dr. Perez
observed that petitioner has been experiencing severe pains
and she has a slight difficulty in concentration. He likewise
noted that there was a slight spasm of petitioners neck
muscle but, otherwise, there was no objective neurologic
finding. The rest of petitioners neurologic examination was
essentially normal.39
Dr. Perezs neurologic evaluation40 of petitioner reflected,
among others: (1) petitioners past medical history, which
includes, among others, mitral valve stenosis; (2) an
interpretation of petitioners EEG results in October 1995 and
in January 1999, i.e., the first EEG showed sharp waves
seen bilaterally more on the left while the second one was
normal; and (3) interpretation of petitioners second MRI
result, i.e., petitioner has a permanent damage in the brain,
which can happen either after a head injury or after a stroke.
Dr. Perez concluded that petitioner has post-traumatic or post
concussion syndrome.41
saw Delia and petitioner, who told her that she was hit on the
head by a folding wooden counter top. Although petitioner
looked normal as there was no indication of any blood or
bruise on her head, Ms. Pearlie still asked her if she needed
any medical attention to which petitioner replied that she is a
doctor, she was fine and she did not need any medical
attention. Petitioner, instead, requested for a hirudoid cream
to which Ms. Pearlie acceded.45
At about 8:00 p.m., after attending to petitioner, Ms. Pearlie
went back to the hotel clinic to inform Dr. Dalumpines of the
incident at the hotels swimming pool area. But before she
could do that, Dr. Dalumpines had already chanced upon
Delia and petitioner at the hotels coffee shop and the latter
reported to Dr. Dalumpines that her head was hit by a folding
wooden counter top while she was inside the hotels
swimming pool area. When asked by Dr. Dalumpines how
she was, petitioner responded she is a doctor, she was fine
and she was already attended to by the hotel nurse, who
went at the hotels swimming pool area right after the
accident. Dr. Dalumpines then called Ms. Pearlie to verify the
same, which the latter confirmed.46
Respondents, on the other hand, denied all the material

allegations of petitioner and, in turn, countered the latters
statement of facts, thus:
Afterwards, Dr. Dalumpines went back to petitioner and

checked the latters condition. Petitioner insisted that she
was fine and that the hirudoid cream was enough. Having
been assured that everything was fine, Dr. Dalumpines
requested petitioner to execute a handwritten certification 47
regarding the incident that occurred that night. Dr.
Dalumpines then suggested to petitioner to have an X-ray
test. Petitioner replied that it was not necessary. Petitioner
also refused further medical attention.48
According to respondents PHI and DTPCI, a sufficient notice

had been posted on the glass door of the hotel leading to the
swimming pool area to apprise the people, especially the
hotel guests, that the swimming pool area is open only from
7:00 a.m. to 7:00 p.m.42 Though the hotels swimming pool
area is open only between the aforestated time, the lights
thereon are kept on until 10:00 p.m. for, (1) security reasons;
(2) housekeeping personnel to do the cleaning of the
swimming pool surroundings; and (3) people doing their
exercise routine at the Slimmers World Gym adjacent to the
swimming pool area, which was then open until 10:00 p.m.,
to have a good view of the hotels swimming pool. Even
granting that the lights in the hotels swimming pool area
were turned off, it would not render the area completely dark
as the Slimmers World Gym near it was well-illuminated.43
On 13 June 1995, petitioner called up Dr. Dalumpines. The

call, however, had nothing to do with the 11 June 1995
incident. Instead, petitioner merely engaged in small talk with
Dr. Dalumpines while having her daily massage. The two
talked about petitioners personal matters, i.e., past medical
history, differences with siblings and family over inheritance
and difficulty in practice. Petitioner even disclosed to Dr.
Dalumpines that she once fell from a horse; that she had a
stroke; had hysterectomy and is incapable of having children
for her uterus had already been removed; that she had blood
disorder, particularly lack of platelets, that can cause
bleeding; and she had an "on" and "off" headaches.
Petitioner oftentimes called Dr. Dalumpines at the hotel clinic
to discuss topics similar to those discussed during their 13
June 1995 conversation.49
Further, on 11 June 1995, at round 7:00 p.m., the hotels

swimming pool attendant advised petitioner and Delia to take
their showers as it was already closing time. Afterwards, at
around 7:40 p.m., Pearlie Benedicto-Lipana (Ms. Pearlie), the
hotel staff nurse, who was at the hotel clinic located at the
mezzanine floor, received a call from the hotel telephone
operator informing her that there was a guest requiring
medical assistance at the hotels swimming pool area located
one floor above the clinic.44
Also, during one of their telephone conversations, petitioner

requested for a certification regarding the 11 June 1995
incident inside the hotels swimming pool area. Dr.
Dalumpines accordingly issued Certification dated 7
September 1995, which states that:50
Immediately, Ms. Pearlie got hold of her medical kit and

hurriedly went to the hotels swimming pool area. There she
C ERTI F I CATI O N
This is to certify that as per Clinic records, duty nurse Pearlie
was called to attend to an accident at the poolside at 7:45PM
on 11 June 1995.

Same records show that there, she saw petitioner who
claimed the folding countertop fell on her head when she
lifted it to enter the lifeguards counter to use the phone. She
asked for Hirudoid.
The same evening petitioner met Dr. Dalumpines at the
Coffee Shop. After narrating the poolside incident and
declining Dr. Dalumpines offer of assistance, she reiterated
that the Hirudoid cream was enough and that petitioner being
a doctor herself, knew her condition and she was all right.
This certification is given upon the request of petitioner for
whatever purpose it may serve, 7 September 1995 at Makati
City.51 (Emphasis supplied).
Petitioner personally picked up the afore-quoted Certification
at the hotel clinic without any objection as to its contents. 52
From 11 June 1995 until 7 September 1995, the hotel clinic
never received any complaint from petitioner regarding the
latters condition. The hotel itself neither received any written
complaint from petitioner.53
After trial, the court a quo in its Decision dated 21 February
2006 dismissed petitioners Complaint for lack of merit.
The trial court found petitioners testimony self-serving, thus,
devoid of credibility. Petitioner failed to present any evidence
to substantiate her allegation that the lights in the hotels
swimming pool area were shut off at the time of the incident.
She did not even present her friend, Delia, to corroborate her
testimony. More so, petitioners testimony was contradicted
by one of the witnesses presented by the respondents who
positively declared that it has been a normal practice of the
hotel management not to put off the lights until 10:00 p.m. to
allow the housekeepers to do the cleaning of the swimming
pool surroundings, including the toilets and counters. Also,
the lights were kept on for security reasons and for the
people in the nearby gym to have a good view of the
swimming pool while doing their exercise routine. Besides,
there was a remote possibility that the hotels swimming pool
area was in complete darkness as the aforesaid gym was
then open until 10:00 p.m., and the lights radiate to the
hotels swimming pool area. As such, petitioner would not
have met the accident had she only acted with care and
caution.54
The trial court further struck down petitioners contention that
the hotel management did not extend medical assistance to
her in the aftermath of the accident. Records showed that the
hotel management immediately responded after being
notified of the accident. The hotel nurse and the two
chambermaids placed an ice pack on petitioners head. They
were willing to extend further emergency assistance but
petitioner refused and merely asked for a hirudoid cream.
Petitioner even told them she is a doctor and she was fine.
Even the medical services offered by the hotel physician
were turned down by petitioner. Emphatically, petitioner
cannot fault the hotel for the injury she sustained as she
herself did not heed the warning that the swimming pool area
is open only from 7:00 a.m. to 7:00 p.m. As such, since
9
petitioners own negligence was the immediate and
proximate cause of her injury, she cannot recover damages. 55
The trial court similarly observed that the records revealed no
indication that the head injury complained of by petitioner
was the result of the alleged 11 June 1995 accident. Firstly,
petitioner had a past medical history which might have been
the cause of her recurring brain injury. Secondly, the findings
of Dr. Perez did not prove a causal relation between the 11
June 1995 accident and the brain damage suffered by
petitioner. Even Dr. Perez himself testified that the symptoms
being experienced by petitioner might have been due to
factors other than the head trauma she allegedly suffered. It
bears stressing that petitioner had been suffering from
different kinds of brain problems since she was 18 years old,
which may have been the cause of the recurring symptoms
of head injury she is experiencing at present. Absent,
therefore, of any proof establishing the causal relation
between the injury she allegedly suffered on 11 June 1995
and the head pains she now suffers, her claim must fail.
Thirdly, Dr. Teresita Sanchezs (Dr. Sanchez) testimony
cannot be relied upon since she testified on the findings and
conclusions of persons who were never presented in court.
Ergo, her testimony thereon was hearsay. Fourthly, the
medical reports/evaluations/certifications issued by myriads
of doctors whom petitioner sought for examination or
treatment were neither identified nor testified to by those who
issued them. Being deemed as hearsay, they cannot be
given probative value. Even assuming that petitioner suffered
head injury as a consequence of the 11 June 1995 accident,
she cannot blame anyone but herself for staying at the
hotels swimming pool area beyond its closing hours and for
lifting the folding wooden counter top that eventually hit her
head.56
For petitioners failure to prove that her serious and
permanent injury was the result of the 11 June 1995 accident,
thus, her claim for actual or compensatory damages, loss of
income, moral damages, exemplary damages and attorneys
fees, must all fail.57
With regard to respondent First Lepantos liability, the trial
court ruled that under the contract of insurance, suffice it to
state that absent any cause for any liability against
respondents PHI and DTPCI, respondent First Lepanto
cannot be made liable thereon.
Dissatisfied, petitioner elevated the matter to the Court of
Appeals with the following assignment of errors: (1) the trial
court erred in finding that the testimony of petitioner is selfserving and thus void of credibility; (2) the trial court erred in
applying the doctrine of proximate cause in cases of breach
of contract and even assuming arguendo that the doctrine is
applicable, petitioner was able to prove by sufficient evidence
the causal connection between her injuries and respondents
PHI and DTPCIs negligent act; and (3) the trial court erred in
holding that petitioner is not entitled to damages. 58
On 9 August 2007, the Court of Appeals rendered a Decision
affirming the findings and conclusions of the trial court.
10

The Court of Appeals ratiocinated in this wise:
At the outset, it is necessary for our purpose to determine
whether to decide this case on the theory that herein
respondents PHI and DTPCI are liable for breach of contract
or on the theory of quasi-delict.
xxxx
It cannot be gainsaid that herein petitioners use of the hotels
pool was only upon the invitation of Delia, the hotels
registered guest. As such, she cannot claim contractual
relationship between her and the hotel. Since the
circumstances of the present case do not evince a
contractual relation between petitioner and respondents, the
rules on quasi-delict , thus, govern.
The pertinent provision of Art. 2176 of the Civil Code which
states: "Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called
quasi-delict."
A perusal of Article 2176 shows that obligations arising from
quasi-delict or tort, also known as extra-contractual
obligations, arise only between parties not otherwise bound
by contract, whether express or implied. Thus, to sustain a
claim liability under quasi-delict, the following requisites must
concur: (a) damages suffered by the plaintiff; (b) fault or
negligence of the defendant, or some other person for whose
acts he must respond; and (c) the connection of cause and
effect between the fault or negligence of the defendant and
the damages incurred by the plaintiff.
Viewed from the foregoing, the question now is whether
respondents PHI and DTPCI and its employees were
negligent? We do not think so. Several factors militate
against petitioners contention.
One. Petitioner recognized the fact that the pool areas
closing time is 7:00 p.m.. She, herself, admitted during her
testimony that she was well aware of the sign when she and
Delia entered the pool area. Hence, upon knowing, at the
outset, of the pools closing time, she took the risk of
overstaying when she decided to take shower and leave the
area beyond the closing hour. In fact, it was only upon the
advise of the pool attendants that she thereafter took her
shower.
Two. She admitted, through her certification that she lifted the
wooden bar countertop, which then fell onto her head. The
admission in her certificate proves the circumstances
surrounding the occurrence that transpired on the night of 11
June 1995. This is contrary to her assertion in the complaint
and testimony that, while she was passing through the
counter door, she was suddenly knocked out by a hard and
heavy object. In view of the fact that she admitted having
lifted the counter top, it was her own doing, therefore, that
made the counter top fell on to her head.
Three. We cannot likewise subscribe to petitioners assertion

that the pool area was totally dark in that she herself
admitted that she saw a telephone at the counter after
searching for one. It must be noted that petitioner and Delia
had walked around the pool area with ease since they were
able to proceed to the glass entrance door from shower
room, and back to the counter area where the telephone was
located without encountering any untoward incident.
Otherwise, she could have easily stumbled over, or slid, or
bumped into something while searching for the telephone.
This negates her assertion that the pool area was completely
dark, thereby, totally impairing her vision.
xxxx
The aforementioned circumstances lead us to no other
conclusion than that the proximate and immediate cause of
the injury of petitioner was due to her own negligence.
Moreover, petitioner failed to sufficiently substantiate that the
medical symptoms she is currently experiencing are the
direct result of the head injury she sustained on 11 June
1995 as was aptly discussed in the lower courts findings.
xxxx
It bears stressing that in civil cases, the law requires that the
party who alleges a fact and substantially asserts the
affirmative of the issue has the burden of proving it. Hence,
for petitioner to be entitled to damages, she must show that
she had suffered an actionable injury. Regrettably, petitioner
failed in this regard.59 (Emphasis supplied).
Petitioners Motion for Reconsideration was denied for lack of
merit in a Resolution dated 5 November 2007.
Hence, this Petition raising the following issues:
(1) Whether or not the findings of fact of the trial court and of
the Court of Appeals are conclusive in this case.
(2) Whether or not herein respondents PHI and DTPCI are
responsible by implied contract to exercise due care for the
safety and welfare of the petitioner.
(3) Whether or not the cause of action of the petitioner can
be based on both breach of contract and tort.
(4) Whether or not it is respondents PHI and DTPCI and its
employees who are liable to the petitioner for negligence,
applying the well-established doctrines of res ipsa loquitur
and respondeat superior.
(5) Whether the petitioners debilitating and permanent
injuries were a result of the accident she suffered at the hotel
on 11 June 1995.
(6) Whether or not the petitioner is entitled to the payment of
damages, attorneys fees, interest, and the costs of suit.
11

(7) Whether or not the respondent insurance company is
liable, even directly, to the petitioner.
(8) Whether or not petitioners motion for reconsideration of
the decision of the Court of Appeals is pro forma.60
Petitioner argues that the rule that "findings of fact of the
lower courts are conclusive and must be respected on
appeal" finds no application herein because this case falls
under the jurisprudentially established exceptions. Moreover,
since the rationale behind the afore-mentioned rule is that
"the trial judge is in a vantage point to appreciate the conduct
and behavior of the witnesses and has the unexcelled
opportunity to evaluate their testimony," one logical exception
to the rule that can be deduced therefrom is when the judge
who decided the case is not the same judge who heard and
tried the case.
Petitioner further faults the Court of Appeals in ruling that no
contractual relationship existed between her and
respondents PHI and DTPCI since her use of the hotels
swimming pool facility was only upon the invitation of the
hotels registered guest. On the contrary, petitioner maintains
that an implied contract existed between them in view of the
fact that the hotel guest status extends to all those who avail
of its servicesits patrons and invitees. It follows then that all
those who patronize the hotel and its facilities, including
those who are invited to partake of those facilities, like
petitioner, are generally regarded as guests of the hotel. As
such, respondents PHI and DTPCI are responsible by
implied contract for the safety and welfare of petitioner while
the latter was inside their premises by exercising due care,
which they failed to do.
Petitioner even asserts that the existence of a contract
between the parties does not bar any liability for tort since the
act that breaks a contract may also be a tort. Hence, the
concept of change of theory of cause of action pointed to by
respondents is irrelevant.
Petitioner similarly avows that the doctrines of res ipsa
loquitur and respondeat superior are applicable in this case.
She argues that a person who goes in a hotel without a
"bukol" or hematoma and comes out of it with a "bukol" or
hematoma is a clear case of res ipsa loquitur. It was an
accident caused by the fact that the hotel staff was not
present to lift the heavy counter top for petitioner as is
normally expected of them because they negligently locked
the main entrance door of the hotels swimming pool area.
Following the doctrine of res ipsa loquitur, respondents PHI
and DTPCIs negligence is presumed and it is incumbent
upon them to prove otherwise but they failed to do so.
Further, respondents PHI and DTPCI failed to observe all the
diligence of a good father of a family in the selection and
supervision of their employees, hence, following the doctrine
of respondeat superior, they were liable for the negligent acts
of their staff in not verifying if there were still people inside
the swimming pool area before turning off the lights and
locking the door. Had respondents PHI and DTPCIs
employees done so, petitioner would not have been injured.
Since respondents PHI and DTPCIs negligence need not be
proved, the lower courts erred in shifting the burden to

petitioner and, thereafter, holding the hotel and its employees
not negligent for petitioners failure to prove their negligence.
Moreover, petitioner alleges that there was no contributory
negligence on her part for she did not do anything that could
have contributed to her injury. And, even if there was, the
same does not bar recovery.
Petitioner equally declares that the evidence on record,
including the objective medical findings, had firmly
established that her permanent debilitating injuries were the
direct result of the 11 June 1995 accident inside the hotels
swimming pool area. This fact has not been totally disputed
by the respondents. Further, the medical experts who had
been consulted by petitioner were in unison in their
diagnoses of her condition. Petitioner was also able to prove
that the falling of the folding wooden counter top on her head
while she was at the hotels swimming pool area was the
cause of her head, eye and neck injuries.
Petitioner reiterates her claim for an award of damages, to
wit: actual, including loss of income; moral, exemplary; as
well as attorneys fees, interest and costs of suit. She states
that respondents PHI and DTPCI are liable for quasi-delict
under Articles 19, 2176 and 2180 of the New Civil Code. At
the same time, they are liable under an implied contract for
they have a public duty to give due courtesy, to exercise
reasonable care and to provide safety to hotel guests,
patrons and invitees. Respondent First Lepanto, on the other
hand, is directly liable under the express contract of
insurance.
Lastly, petitioner contends that her Motion for
Reconsideration before the Court of Appeals was not pro
forma for it specifically pointed out the alleged errors in the
Court of Appeals Decision.
The instant Petition is devoid of merit.
Primarily, only errors of law and not of facts are reviewable by
this Court in a Petition for Review on Certiorari under Rule 45
of the Rules of Court.61 This Court is not a trier of facts and it
is beyond its function to re-examine and weigh anew the
respective evidence of the parties. 62 Besides, this Court
adheres to the long standing doctrine that the factual findings
of the trial court, especially when affirmed by the Court of
Appeals, are conclusive on the parties and this Court. 63
Nonetheless, this Court has, at times, allowed exceptions
thereto, to wit:
(a) When the findings are grounded entirely on speculation,
surmises, or conjectures;
(b) When the inference made is manifestly mistaken, absurd,
or impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of
facts;

(e) When the findings of facts are conflicting;
(f) When in making its findings the Court of Appeals went
beyond the issues of the case, or its findings are contrary to
the admissions of both the appellant and the appellee;
(g) When the Court of Appeals findings are contrary to those
by the trial court;
(h) When the findings are conclusions without citation of
specific evidence on which they are based;
(i) When the facts set forth in the petition as well as in the
petitioners main and reply briefs are not disputed by the
respondent;
(j) When the findings of fact are premised on the supposed
absence of evidence and contradicted by the evidence on
record; or
(k) When the Court of Appeals manifestly overlooked certain
relevant facts not disputed by the parties, which, if properly
considered, would justify a different conclusion.64
Upon meticulous perusal of the records, however, this Court
finds that none of these exceptions is obtaining in this case.
No such justifiable or compelling reasons exist for this Court
to depart from the general rule. This Court will not disturb the
factual findings of the trial court as affirmed by the Court of
Appeals and adequately supported by the evidence on
record.
Also, this Court will not review the factual findings of the trial
court simply because the judge who heard and tried the case
was not the same judge who penned the decision. This fact
alone does not diminish the veracity and correctness of the
factual findings of the trial court.65 Indeed, "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, unless there is showing of grave abuse of discretion
in the factual findings reached by him." 66 In this case, there
was none.
It bears stressing that in this jurisdiction there is a disputable
presumption that the trial courts decision is rendered by the
judge in the regular performance of his official duties. While
the said presumption is only disputable, it is satisfactory
unless contradicted or overcame by other evidence.
Encompassed in this presumption of regularity is the
presumption that the trial court judge, in resolving the case
and drafting the decision, reviewed, evaluated, and weighed
all the evidence on record. That the said trial court judge is
not the same judge who heard the case and received the
evidence is of little consequence when the records and
transcripts of stenographic notes (TSNs) are complete and
available for consideration by the former, 67 just like in the
present case.
Irrefragably, the fact that the judge who penned the trial
courts decision was not the same judge who heard the case
12
and received the evidence therein does not render the
findings in the said decision erroneous and unreliable. While
the conduct and demeanor of witnesses may sway a trial
court judge in deciding a case, it is not, and should not be,
his only consideration. Even more vital for the trial court
judges decision are the contents and substance of the
witnesses testimonies, as borne out by the TSNs, as well as
the object and documentary evidence submitted and made
part of the records of the case.68
This Court examined the records, including the TSNs, and
found no reason to disturb the factual findings of both lower
courts. This Court, thus, upholds their conclusiveness.
In resolving the second and third issues, a determination of
the cause of action on which petitioners Complaint for
Damages was anchored upon is called for.
Initially, petitioner was suing respondents PHI and DTPCI
mainly on account of their negligence but not on any breach
of contract. Surprisingly, when the case was elevated on
appeal to the Court of Appeals, petitioner had a change of
heart and later claimed that an implied contract existed
between her and respondents PHI and DTPCI and that the
latter were liable for breach of their obligation to keep her
safe and out of harm. This allegation was never an issue
before the trial court. It was not the cause of action relied
upon by the petitioner not until the case was before the Court
of Appeals. Presently, petitioner claims that her cause of
action can be based both on quasi-delict and breach of
contract.
A perusal of petitioners Complaint evidently shows that her
cause of action was based solely on quasi-delict. Telling are
the following allegations in petitioners Complaint:
6. THAT, in the evening of 11 June 1995, between the hours
from 7:00 to 8:00 oclock, after herein petitioner and her
friend from New York, Delia, the latter being then a Hotel
guest, were taking their shower after having a dip in the
hotels swimming pool, without any notice or warning, the
Hotels staff put off all the lights within the pool area including
the lights on the hallway and also locked the main entrance
door of the pool area, x x x;
7. THAT, Hotel guest Delia started to panic while petitioner
pacified her by telling her not to worry as they would both find
their way out. Petitioner knowing that within the area there is
a house phone, started to look around while Delia was
following her, eventually petitioner saw a phone behind the
counter x x x, that while slowly moving on towards the phone
on a stooping manner due to the darkness CAUSED BY
UNTIMELY AND NEGLIGENTLY PUTTING OFF WITH THE
LIGHTS BY THE HEREIN RESPONDENTS PHI AND
DTPCIS EMPLOYEE while passing through the open
counter door with its Folding Counter Top also opened, x x x,
a hard and heavy object fell onto the head of the petitioner
that knocked her down almost unconscious which hard and
heavy object turned out to be the Folding Counter Top;
8. THAT, Delia immediately got hold of the house phone and

notified the Hotel Telephone Operator about the incident,
immediately the hotel staffs (sic) arrived but they were
stranded behind the main door of the pool entrance and it too
(sic) them more than twenty (20) minutes to locate the hotel
maintenance employee who holds the key of the said main
entrance door;
9. THAT, when the door was opened, two Hotel Chamber
Maids assisted the petitioner to get out of the counter door.
Petitioner being a Physician tried to control her feelings
although groggy and requested for a HURIDOID, a medicine
for HEMATOMA, as a huge lump developed on her head
while the two Chamber Maids assisted petitioner by holding
the bag of ice on her head and applying the medicine on the
huge lump;
10. THAT, petitioner after having recovered slightly from her
nightmare, though still feeling weak, asked to be assisted to
the Hotel Coffee Shop to take a rest but requested for the
hotels Physician. Despite her insistent requests, the Dusit
Hotel refused to lift a finger to assists petitioner who was then
in distress until a lady approached and introduced herself as
the Hotels house Doctor. Instead however of assisting
petitioner by asking her what kind of assistance the Hotel
could render, in a DISCOURTEOUS MANNER presented
instead a paper and demanding petitioner to affix her
signature telling her that the Hotel Management would only
assists and answer for all expenses incurred if petitioner
signs the paper presented, but she refused and petitioner
instead wrote a marginal note on the said paper stating her
reason therefore, said paper later on turned out to be a
WAIVER OF RIGHT or QUIT CLAIM;
xxxx
14. THAT, due to the unfortunate incident caused by
respondents PHI and DTPCIs gross negligence despite
medical assistance, petitioner started to feel losing her
memory that greatly affected and disrupted the practice of
her chosen profession x x x.
xxxx
19. THAT, due to respondents PHI and DTPCIs gross
negligence as being narrated which caused petitioner to
suffer sleepless nights, depression, mental anguish, serious
anxiety, wounded feelings, and embarrassment with her
Diplomate friends in the profession and industry, her social
standing in the community was greatly affected and hence,
respondents PHI and DTPCI must be imposed the hereunder
damages, prayed for x x x and Artile (sic) 2176 and 2199 of
the New Civil Code of the Philippines x x x.
xxxx
22. THAT, as to Moral, Exemplary and Actual Damages, as
well as petitioners Loss of Income, the amounts are stated in
its prayer hereunder.69
It is clear from petitioners allegations that her Complaint for
13
Damages was predicated on the alleged negligence of
respondents PHI and DTPCIs staff in the untimely putting off
of all the lights within the hotels swimming pool area, as well
as the locking of its main door, prompting her to look for a
way out leading to the fall of the folding wooden counter top
on her head causing her serious brain injury. The said
negligence was allegedly compounded by respondents PHI
and DTPCIs failure to render prompt and adequate medical
assistance. These allegations in petitioners Complaint
constitute a cause of action for quasi-delict, which under the
New Civil Code is defined as an act, or omission which
causes damage to another, there being fault or negligence. 70
It is evident from petitioners Complaint and from her open
court testimony that the reliance was on the alleged tortious
acts committed against her by respondents PHI and DTPCI,
through their management and staff. It is now too late in the
day to raise the said argument for the first time before this
Court.71
Petitioners belated reliance on breach of contract as her
cause of action cannot be sanctioned by this Court. Wellsettled is the rule that a party is not allowed to change the
theory of the case or the cause of action on appeal. Matters,
theories or arguments not submitted before the trial court
cannot be considered for the first time on appeal or
certiorari.72 When a party adopts a certain theory in the court
below, he will not be permitted to change his theory on
appeal for to permit him to do so would not only be unfair to
the other party but it would also be offensive to the basic
rules of fair play, justice and due process.73 Hence, a party is
bound by the theory he adopts and by the cause of action he
stands on and cannot be permitted after having lost thereon
to repudiate his theory and cause of action and adopt
another and seek to re-litigate the matter anew either in the
same forum or on appeal.74
In that regard, this Court finds it significant to take note of the
following differences between quasi-delict (culpa aquilina)
and breach of contract (culpa contractual). In quasi-delict,
negligence is direct, substantive and independent, while in
breach of contract, negligence is merely incidental to the
performance of the contractual obligation; there is a preexisting contract or obligation.75 In quasi-delict, the defense of
"good father of a family" is a complete and proper defense
insofar as parents, guardians and employers are concerned,
while in breach of contract, such is not a complete and
proper defense in the selection and supervision of
employees.76 In quasi- delict , there is no presumption of
negligence and it is incumbent upon the injured party to
prove the negligence of the defendant, otherwise, the
formers complaint will be dismissed, while in breach of
contract, negligence is presumed so long as it can be proved
that there was breach of the contract and the burden is on
the defendant to prove that there was no negligence in the
carrying out of the terms of the contract; the rule of
respondeat superior is followed.77
Viewed from the foregoing, petitioners change of theory or
cause of action from quasi-delict to breach of contract only
on appeal would necessarily cause injustice to respondents
14

PHI and DTPCI. First, the latter will have no more opportunity
to present evidence to contradict petitioners new argument.
Second, the burden of proof will be shifted from petitioner to
respondents PHI and DTPCI. Petitioners change of theory
from quasi-delict to breach ofcontract must be repudiated.
As petitioners cause of action is based on quasi-delict, it is
incumbent upon her to prove the presence of the following
requisites before respondents PHI and DTPCI can be held
liable, to wit: (a) damages suffered by the plaintiff; (b) fault or
negligence of the defendant, or some other person for whose
acts he must respond; and (c) the connection of cause and
effect between the fault or negligence of the defendant and
the damages incurred by the plaintiff.78 Further, since
petitioners case is for quasi-delict , the negligence or fault
should be clearly established as it is the basis of her action. 79
The burden of proof is upon petitioner. Section 1, Rule 131 of
the Rules of Court provides that "burden of proof is the duty
of a party to present evidence on the facts in issue necessary
to establish his claim or defense by the amount of evidence
required by law." It is then up for the plaintiff to establish his
cause of action or the defendant to establish his defense.
Therefore, if the plaintiff alleged in his complaint that he was
damaged because of the negligent acts of the defendant, he
has the burden of proving such negligence. It is even
presumed that a person takes ordinary care of his concerns.
The quantum of proof required is preponderance of
evidence.80
In this case, as found by the trial court and affirmed by the
Court of Appeals, petitioner utterly failed to prove the alleged
negligence of respondents PHI and DTPCI. Other than
petitioners self-serving testimony that all the lights in the
hotels swimming pool area were shut off and the door was
locked, which allegedly prompted her to find a way out and in
doing so a folding wooden counter top fell on her head
causing her injury, no other evidence was presented to
substantiate the same. Even her own companion during the
night of the accident inside the hotels swimming pool area
was never presented to corroborate her allegations.
Moreover, petitioners aforesaid allegations were successfully
rebutted by respondents PHI and DTPCI. Here, we quote
with conformity the observation of the trial court, thus:
x x x Besides not being backed up by other supporting
evidence, said statement is being contradicted by the
testimony of Engineer Dante L. Costas, 81 who positively
declared that it has been a normal practice of the Hotel
management not to put off the lights until 10:00P.M. in order
to allow the housekeepers to do the cleaning of the pools
surrounding, the toilets and the counters. It was also
confirmed that the lights were kept on for security reasons
and so that the people exercising in the nearby gym may be
able to have a good view of the swimming pool. This Court
also takes note that the nearby gymnasium was normally
open until 10:00 P.M. so that there was a remote possibility
the pool area was in complete darkness as was alleged by
herein petitioner, considering that the illumination which
reflected from the gym. Ergo, considering that the area were
sufficient (sic) illuminated when the alleged incident occurred,
there could have been no reason for the petitioner to have
met said accident, much less to have been injured as a
consequence thereof, if she only acted with care and caution,

which every ordinary person is expected to do.82
More telling is the ratiocination of the Court of Appeals, to wit:
Viewed from the foregoing, the question now is whether
respondents PHI and DTPCI and its employees were
negligent? We do not think so. Several factors militate
against petitioners contention.
One. Petitioner recognized the fact that the pool areas
closing time is 7:00 p.m.. She, herself, admitted during her
testimony that she was well aware of the sign when she and
Delia entered the pool area. Hence, upon knowing, at the
outset, of the pools closing time, she took the risk of
overstaying when she decided to take shower and leave the
area beyond the closing hour. In fact, it was only upon the
advise of the pool attendants that she thereafter took her
shower.
Two. She admitted, through her certification, that she lifted
the wooden bar countertop, which then fell on to her head.
The admission in her certificate proves the circumstances
surrounding the occurrence that transpired on the night of 11
June 1995. This is contrary to her assertion in the complaint
and testimony that, while she was passing through the
counter door, she was suddenly knocked out by a hard and
heavy object. In view of the fact that she admitted having
lifted the countertop, it was her own doing, therefore, that
made the counter top fell on to her head.
Three. We cannot likewise subscribe to petitioners assertion
that the pool area was totally dark in that she herself
admitted that she saw a telephone at the counter after
searching for one. It must be noted that petitioner and Delia
had walked around the pool area with ease since they were
able to proceed to the glass entrance door from the shower
room, and back to the counter area where the telephone was
located without encountering any untoward incident.
Otherwise, she could have easily stumbled over, or slid, or
bumped into something while searching for the telephone.
This negates her assertion that the pool area was completely
dark, thereby, totally impairing her vision.
xxxx
The aforementioned circumstances lead us to no other
conclusion than that the proximate and immediate cause of
the injury of petitioner was due to her own negligence. 83
(Emphasis supplied).
Even petitioners assertion of negligence on the part of
respondents PHI and DTPCI in not rendering medical
assistance to her is preposterous. Her own Complaint
affirmed that respondents PHI and DTPCI afforded medical
assistance to her after she met the unfortunate accident
inside the hotels swimming pool facility. Below is the portion
of petitioners Complaint that would contradict her very own
statement, thus:
15

14. THAT, due to the unfortunate incident caused by
respondents PHI and DTPCIs gross negligence despite
medical assistance, petitioner started to feel losing her
memory that greatly affected and disrupted the practice of
her chosen profession. x x x.84 (Emphasis supplied).
Also, as observed by the trial court, respondents PHI and
DTPCI, indeed, extended medical assistance to petitioner but
it was petitioner who refused the same. The trial court stated,
thus:
Further, herein petitioners asseverations that the Hotel
Management did not extend medical assistance to her in the
aftermath of the alleged accident is not true. Again, this
statement was not supported by any evidence other that the
sole and self-serving testimony of petitioner. Thus, this Court
cannot take petitioners statement as a gospel truth. It bears
stressing that the Hotel Management immediately responded
after it received notice of the incident. As a matter of fact, Ms.
Pearlie, the Hotel nurse, with two chambermaids holding an
ice bag placed on petitioners head came to the petitioner to
extend emergency assistance when she was notified of the
incident, but petitioner merely asked for Hirudoid, saying she
was fine, and that she was a doctor and know how to take
care of herself. Also, the Hotel, through its in-house
physician, Dr. Dalumpines offered its medical services to
petitioner when they met at the Hotels coffee shop, but again
petitioner declined the offer. Moreover, the Hotel as a show of
concern for the petitioners welfare, shouldered the expenses
for the MRI services performed on petitioner at the Makati
Medical Center. Emphatically, petitioner herself cannot fault
the Hotel for the injury she allegedly suffered because she
herself did not heed the warning at the pool to the effect that
it was only open from 7:00 to 7:00 P.M. Thus, when the
petitioners own negligence was the immediate and
proximate cause of his injury, shecannot recover damages x
x x.85
With the foregoing, the following were clearly established, to
wit: (1) petitioner stayed in the hotels swimming pool facility
beyond its closing hours; (2) she lifted the folding wooden
counter top that eventually hit her head; and (3) respondents
PHI and DTPCI extended medical assistance to her. As such,
no negligence can be attributed either to respondents PHI
and DTPCI or to their staff and/or management. Since the
question of negligence is one of fact, this Court is bound by
the said factual findings made by the lower courts. It has
been repeatedly held that the trial court's factual findings,
when affirmed by the Court of Appeals, are conclusive and
binding upon this Court, if they are not tainted with
arbitrariness or oversight of some fact or circumstance of
significance and influence. Petitioner has not presented
sufficient ground to warrant a deviation from this rule. 86
With regard to petitioners contention that the principles of res
ipsa loquitur and respondeat superior are applicable in this
case, this Court holds otherwise.
Res ipsa loquitur is a Latin phrase which literally means "the
thing or the transaction speaks for itself." It relates to the fact
of an injury that sets out an inference to the cause thereof or
establishes the plaintiffs prima facie case. The doctrine rests

on inference and not on presumption. The facts of the
occurrence warrant the supposition of negligence and they
furnish circumstantial evidence of negligence when direct
evidence is lacking.87 Simply stated, this doctrine finds no
application if there is direct proof of absence or presence of
negligence. If there is sufficient proof showing the conditions
and circumstances under which the injury occurred, then the
creative reason for the said doctrine disappears.88
Further, the doctrine of res ipsa loquitur applies where, (1)
the accident was of such character as to warrant an
inference that it would not have happened except for the
defendants negligence; (2) the accident must have been
caused by an agency or instrumentality within the exclusive
management or control of the person charged with the
negligence complained of; and (3) the accident must not
have been due to any voluntary action or contribution on the
part of the person injured.89
In the case at bench, even granting that respondents PHI
and DTPCIs staff negligently turned off the lights and locked
the door, the folding wooden counter top would still not fall on
petitioners head had she not lifted the same. Although the
folding wooden counter top is within the exclusive
management or control of respondents PHI and DTPCI, the
falling of the same and hitting the head of petitioner was not
due to the negligence of the former. As found by both lower
courts, the folding wooden counter top did not fall on
petitioners head without any human intervention. Records
showed that petitioner lifted the said folding wooden counter
top that eventually fell and hit her head. The same was
evidenced by the, (1) 11 June 1995 handwritten certification
of petitioner herself; (2) her Letter dated 30 August 1995
addressed to Mr. Yoshikazu Masuda (Mr. Masuda), General
Manager of Dusit Hotel; and, (3) Certification dated 7
September 1995 issued to her by Dr. Dalumpines upon her
request, which contents she never questioned.
Here, we, respectively, quote the 11 June 1995 handwritten
certification of petitioner; her letter to Mr. Masuda dated 30
August 1995; and Dr. Dalumpines Certification dated 7
September 1995, to wit:
Petitioners 11 June 1995 Handwritten Certification:
I was requested by Dr. Dalumpines to write that I was
assured of assistance should it be necessary with regard an
accident at the pool. x x x The phone was in an enclosed
area on a chair I lifted the wooden bar counter top which
then fell on my head producing a large hematoma x x x. 90
Petitioners Letter addressed to Mr. Masuda dated 30 August
1995:
Dear Mr. Masuda,
xxxx
x x x We searched and saw a phone on a chair behind a
16

towel counter. However, in order to get behind the counter I
had to lift a hinged massive wooden section of the counter
which subsequently fell and knocked me on my head x x x. 91
this matter:
Firstly, petitioner had a past medical history which might have
been the cause of her recurring brain injury.
Dr. Dalumpines Certification dated 7 September 1995:

C E RT I F I CAT I O N
This is to certify that as per Clinic records, duty nurse Pearlie
was called to attend to an accident at the poolside at 7:45PM
on 11 June 1995.
Same records show that there, she saw petitioner who
claimed the folding countertop fell on her head when she
lifted it to enter the lifeguards counter to use the phone. She
asked for Hirudoid.
The same evening petitioner met Dr. Dalumpnes at the
Coffee Shop. After narrating the poolside incident and
declining Dr. Dalumpines offer of assistance, she reiterated
that the Hirudoid cream was enough and that petitioner]being
a doctor herself, knew her condition and she was all right.
This certification is given upon the request of petitioner for
whatever purpose it may serve, 7 September 1995 at Makati
City.92 (Emphasis supplied).
This Court is not unaware that in petitioners Complaint and
in her open court testimony, her assertion was, "while she
was passing through the counter door, she was suddenly
knocked out by a hard and heavy object, which turned out to
be the folding wooden counter top." However, in her open
court testimony, particularly during cross-examination,
petitioner confirmed that she made such statement that "she
lifted the hinge massive wooden section of the counter near
the swimming pool."93 In view thereof, this Court cannot
acquiesce petitioners theory that her case is one of res ipsa
loquitur as it was sufficiently established how petitioner
obtained that "bukol" or "hematoma."
The doctrine of respondeat superior finds no application in
the absence of any showing that the employees of
respondents PHI and DTPCI were negligent. Since in this
case, the trial court and the appellate court found no
negligence on the part of the employees of respondents PHI
and DTPCI, thus, the latter cannot also be held liable for
negligence and be made to pay the millions of pesos
damages prayed for by petitioner.
The issue on whether petitioners debilitating and permanent
injuries were the result of the accident she suffered at the
hotels swimming pool area on 11 June 1995 is another
question of fact, which is beyond the function of this Court to
resolve. More so, this issue has already been properly
passed upon by the trial court and the Court of Appeals. To
repeat, this Court is bound by the factual findings of the lower
courts and there is no cogent reason to depart from the said
rule.
The following observations of the trial court are controlling on
Secondly, the findings of Dr. Perez did not prove a causal

relation between the 11 June 1995 accident and the brain
damage suffered by petitioner. Dr. Perez himself testified that
the symptoms being experienced by petitioner might have
been due to factors other than the head trauma she allegedly
suffered. Emphasis must be given to the fact that petitioner
had been suffering from different kinds of brain problems
since she was 18 years old, which may have been the cause
of the recurring symptoms of head injury she is experiencing
at present.
Thirdly, Dr. Sanchezs testimony cannot be relied upon since
she testified on the findings and conclusions of persons who
were never presented in court. Ergo, her testimony thereon
was hearsay. A witness can testify only with regard to facts of
which they have personal knowledge. Testimonial or
documentary evidence is hearsay if it is based, not on the
personal knowledge of the witness, but on the knowledge of
some other person not on the witness stand. Consequently,
hearsay evidence -- whether objected to or not -- has no
probative value.94
Fourthly, the medical reports/evaluations/certifications issued
by myriads of doctors whom petitioner sought for
examination or treatment were neither identified nor testified
to by those who issued them. Being deemed as hearsay, they
cannot be given probative value.
1wphi1
The aforesaid medical reports/evaluations/certifications of

different doctors in favor of petitioner cannot be given
probative value and their contents cannot be deemed to
constitute proof of the facts stated therein. It must be
stressed that a document or writing which is admitted not as
independent evidence but merely as part of the testimony of
a witness does not constitute proof of the facts related
therein.95 In the same vein, the medical certificate which was
identified and interpreted in court by another doctor was not
accorded probative value because the doctor who prepared it
was not presented for its identification. Similarly, in this case,
since the doctors who examined petitioner were not
presented to testify on their findings, the medical certificates
issued on their behalf and identified by another doctor cannot
be admitted as evidence. Since a medical certificate involves
an opinion of one who must first be established as an expert
witness, it cannot be given weight or credit unless the doctor
who issued it is presented in court to show his
qualifications.96 Thus, an unverified and unidentified private
document cannot be accorded probative value. It is
precluded because the party against whom it is presented is
deprived of the right and opportunity to cross-examine the
person to whom the statements or writings are attributed. Its
executor or author should be presented as a witness to
provide the other party to the litigation the opportunity to
question its contents. Being mere hearsay evidence, failure
to present the author of the letter renders its contents
suspect and of no probative value.97
17

All told, in the absence of negligence on the part of
respondents PHI and DTPCI, as well as their management
and staff, they cannot be made Iiable to pay for the millions
of damages prayed for by the petitioner. Since respondents
PHI and DTPCI arc not liable, it necessarily follows that
respondent First Lepanto cannot also be made liable under
the contract or Insurance.
WHEREFORE, premises considered, the Decision and
Resolution or the Court of Appeals in CA-G.R. CV No. 87065
dated 9 August 2007 and 5 November 2007, respectively, are
hereby AFFIRMED. Costs against petitioner.
SO ORDERED.
JOSE PORTUGAL PEREZ
Associate Justice
WE CONCUR:
ARTURO D. BRION
Footnotes
*
Per raffle dated 8 March 2010.
**
Per raffle dated 5 December 2012.
Penned by Associate Justice Jose L. Sabio, Jr. with

Associate Justices Jose C. Reyes, Jr. and Myrna Dimaranan
Vidal, concurring, Rollo, pp. 200-215.
1
Penned by Pairing Judge Reinato G. Quilala, Id. at 76-109.
Id. at 296-297.
A dermatologist by profession at the time the incident inside

the swimming pool area of Dusit Thani Hotel, Manila
happened where she allegedly sustained head injury
(Testimony of Dr. Genevieve L. Huang. TSN, 27 November
1998, p. 4).
4
Associate Justice
A corporation duly organized and existing under the laws of

the Philippines.
Acting Chairperson

Thailand.
PRESBITERO J. VELASCO, JR.*

Formerly known as "Hotel Nikko Manila Garden" and then
"Dusit Hotel Nikko."
7
Associate Justice
ESTELA M. PERLAS-BERNABE
Associate Justice
ATTE STATI O N
I attest that the conclusions in the above Decision were
reached in consultation before the case was assigned to the
writer of the opinion of the Court's Division.
ARTURO D. BRION
Associate Justice

the Philippines. Formerly known as "Metro Taisho Insurance
Corporation."
8
Testimony of Dr. Genevieve L. Huang. TSN, 27 November

1998, pp. 24-28; CA Decision dated 9 August 2007, rollo, p.
201.
9
Id. at 29-34; Id. at 202; Complaint dated 8 August 1996,

rollo, p. 769.
10
Id. at 36-42; Testimony of Dr. Genevieve L. Huang. TSN, 10

April 2000, pp. 5-6; CA Decision dated 9 August 2007, rollo,
p. 202; Complaint dated 8 August 1996, rollo, pp. 769-770.
11
Acting Chairperson, Second Division
12
13
Pursuant to Section 13, Article VIII of the Constitution and the

Division Chairperson's Attestation, f certify that the
conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the
opinion of the Court's Division.
ANTONIO T. CARPIO
Acting Chief Justice
Id. at 42-45; Id. at 8-9; Id. at 202-203; Id. at 770.
Id. at 47; Testimony of Dr. Genevieve L. Huang. TSN, 8

September 1999, pp. 45-51; CA Decision dated 9 August
2007, rollo, p. 203; Complaint dated 8 August 1996, rollo, p.
771.
Testimony of Dr. Genevieve L. Huang. TSN, 1 February
1999, pp. 5-6.
14
15
Records, Volume I, p. 345.
18

16
Id.

1999, pp. 6- 9.

1999, p. 56.
31
17
32
Id. at 57-60.
18
Id. at 8-13.
33
Rollo, pp. 1232-1234.
19
TECHNICAL SUMMARY OF EEG TRACING
34
Id. at 1234.
Background activity is fairly well organized at 6-8 Hz. Medium

to high voltage sharp activities are seen bilaterally
bisynchronously. No focal slowing is seen.

1999, p. 67.
35
36
Id. at 5.
37
INTERPRETATION:
EEG INTERPRETATION:
ABNORMAL EEG COMPATIBLE WITH A SEIZURE
DISORDER (EEG Report dated 5 September 1995. Records,
Volume I, p. 346).
1999, pp. 9-13.
20
21
CERVICAL VERTEBRAE
The visualized vertebrae appear intact. There is straightening

of the cervical curvature most likely due to muscular spasm.
Alignment and intervertebral disc spaces are well maintained.
The neural foramenae are well formed.
IMPRESSION
Straightened cervical curvature most likely due to muscular
spasm otherwise normal cervical vertebrae (Diagnostic XRay Report dated 14 September 1995. Records, p. 347).
The EEG is abnormal showing:

1. Mild intermittent generalized slowing consistent with a
diffuse cerebral dysfunction.
2. Fairly frequent intermittent arrhythmic theta/delta slow
waves occasionally rhythm theta slow waves seen anteriorly,
but more on the left frontal region compatible with irritative or
deep focal pathology.
3. Occasional focal epileptiform activity arising from both
region, but maximally and frequently on the Left, with phase
reversal at F3 (EEG Report dated 11 July 1996. Records,
Volume I, p. 351).
1999, pp. 15-16.
38
Testimony of Dr. Martesio Perez. TSN, 7 February 2001,

pp. 9-10.
39

1999, p. 16.
22
40
23
Complaint. Rollo, p. 771.
24
Records, Volume I, pp. 16-18.
Testimony of Dr. Martesio Perez. TSN, 7 February 2001,

pp. 9-15
41
25

1999, pp. 24-28.
42
Document dated 11 December 1995 under the letterhead

of Dr. Gerald Steinberg and Dr. Joel Dokson. Records,
Volume I, p. 350.
43
26

1999, pp. 31-32.
Respondents Answer with Compulsory Counterclaims and

Cross-claims. Records, Volume I, p. 70.
Testimony of Engineer Dante L. Cotaz. TSN, 23 July 2003,
pp. 27, 44-49 and 62; Respondents PHI and DTPCIs Answer
with Compulsory Counterclaims and Cross-claims. Records,
Volume I, p. 71.
27
Testimony of Pearlie Benedicto-Lipana. TSN, 14 April 2003,

pp. 13-15; CA Decision dated 9 August 2007, rollo, pp. 203204.
44
28
Id. at 32-36.
29
Id. at 47-50.
45
30
46
Id. at 16-20; Id. at 204.
Id. at 20-22; Testimony of Dr. Violeta Dalumpines. TSN, 11

November 2000, pp. 12-16; CA Decision dated 9 August
19

2007, rollo, p. 204.
47
Testimony of Dr. Violeta Dalumpines. TSN, 11 November

2000, pp. 17-22.
48
49
50
51
Art. 2176. Whoever by act or omission causes damage to

another, there being fault or negligence, is obliged to pay for
the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this
Chapter. (Navida v. Dizon, Jr., G. R. Nos. 125078, 125598,
126654, 127856 &128398, 30 May 2011, 649 SCRA 33, 79).
Id. at 22-28.
71
Tokuda v. Gonzales, 523 Phil. 213, 220 (2006).
Id. at 31-34.
72
Id.
73

2000, p. 33.
52

2002, p. 12.
53
54
RTC Decision dated 21 February 2006, rollo, pp. 102-103.
55
Id. at 103.
56
Id. at 103-107.
57
Id. at 106-108.
Drilon v. Court of Appeals, G. R. No. 107019, 20 March

1997, 270 SCRA 211, 219.
Sta. Ana, Jr. v. Court of Appeals, G. R. No. 115284, 13
November 1997, 281 SCRA 624, 629.
74
Pineda, Tort and Damages Annotated, 2004 Edition, p. 17

citing Rakes v. Atlantic, Gulf and Pacific Co., 7 Phil. 359, 369374 (1907).
75
Id. citing Article 2180 of the Civil Code (last paragraph) and
Cangco v. Manila Railroad Company, 38 Phil. 768, 774
(1918); De Leon, Comments and Cases on Torts and
Damages, Third Edition (2012), p. 188.
76
Id. citing Cangco v. Manila Railroad Company, id.; De

Leon, Comments and Cases on Torts and Damages, Third
Edition (2012), id.
77
CA Decision dated 9 August 2007, id. at 205; Appellants

Brief dated 6 November 2006, id. at 118.
58
59
Id. at 209-213.
60
Id. at 26.
Philippine National Construction Corporation v. Honorable

Court of Appeals, 505 Phil. 87, 97-98 (2005).
78
Pineda, Torts and Damages, Annotated, 2004 Edition, p. 9

citing Calalas v. Court of Appeals, 388 Phil. 146, 151 (2000).
79
61
Blanco v. Quasha, 376 Phil. 480, 491 (1999).
Manila Electric Company v. South Pacific Plastic

Manufacturing Corporation, 526 Phil. 105, 111 (2006).
62
Tuazon v. Heirs of Bartolome Ramos, 501 Phil. 695, 701

(2005).
63
Abalos v. Heirs of Vicente Torio, G. R. No. 175444, 14

December 2011, 662 SCRA 450, 456-457.
64
65
66
67
68
Ditche v. Court of Appeals, 384 Phil. 35, 45 (2000).

People v. Sansaet, 426 Phil. 826, 833 (2002).
Citibank, N.A. v. Sabeniano, 535 Phil. 384, 413-414 (2006).
Id. at 415.
69
Rollo, pp. 769-775.
70
Article 2176 of the New Civil Code provides:
Aquino, Torts and Damages, First Edition (2001), p. 154

citing Taylor v. Manila Electric Railroad and Light Company,
16 Phil. 8, 10 (1910) which further cited Scaevola,
Jurisprudencia del Codigo Civil, Vol. 6, pp. 551-552.
80
In the Transcript of Stenographic Notes dated 23 July 2003,

Engineer Dantes surname is "Cotaz" and not "Costas."
81
82
RTC Decision dated 21 February 2006. Rollo, pp. 102-103.
83
Id. at 209-212.
84
CA Decision dated 9 August 2007. Id. at 771.
85
RTC Decision dated 21 February 2006. Id. at 103.
Pantranco North Express, Inc. v. Standard Insurance

Company, Inc., 493 Phil. 616, 624 (2005).
86
Perla Compaa de Seguros, Inc. v. Sps. Sarangaya III, 510

Phil. 676, 686 (2005).
87
20

Aquino, Torts and Damages, First Edition (2001), p. 164
citing S. D. Martinez v. William Van Buskirk, 18 Phil. 79, 85
(1910).

SUPREME COURT
Manila
SECOND DIVISION
88
89
Capili v. Spouses Cardaa, 537 Phil. 60, 67 (2006).
90
G.R. No. 150192
February 17, 2005
LEHNER V. MARTIRES, petitioner,

91
Rollo, p. 761.
vs.
92
Id. at 757.
Testimony of Dr. Genevieve Huang. TSN, 8 September

1999, p. 23.
93
RICARDO COKIENG and ZENNIE T.

representatives of the late REGINO
respondents.
94
Mallari v. People, 487 Phil. 299, 320-321 (2004).
DECISION
95
Delfin v. Billones, 519 Phil. 720, 736-737 (2006).
CHICO-NAZARIO, J.:
People v. Ugang, 431 Phil. 552, 565 (2002) citing People v.

Aliviano, 390 Phil. 692, 705 (2000).
96
97
Mallari v. People, supra note 94 at 322.
COKIENG,
COKIENG,
On the balance is a petition for review of the Decision 1 dated

23 May 2001 of the Court of Appeals, which set aside the
Decision2 dated 20 September 1999 of the Regional Trial
Court (RTC), Branch 224, Quezon City, for Damages upon a
Malicious Prosecution. The Resolution 3 dated 28 September
2001 denying the subsequent motion for reconsideration is
likewise assailed.
Petitioner Lehner V. Martires4 and respondent Ricardo C.
Cokieng were contemporaries in Xavier School and in the De
La Salle University.5 Both later built their own respective
business pursuits; petitioner with his Durabuilt Company and
Ricardo Cokieng with his Phil-Air Conditioning Center, which
he jointly owned with his brother and co-respondent Regino
Cokieng. Phil-Air Conditioning Center was engaged in the
distribution and sale of Carrier air-conditioners and
refrigeration units.
Sometime in 1992, petitioner joined Phil-Air Conditioning
Center as its agent. For his services, petitioner would receive
commission and a fixed monthly salary.6 This arrangement
was done informally, with no written contract governing
them.7 In September 1994, as a result of a verbal tussle
between the former classmates, the ties between the duo
ended in antipathy, with petitioner resigning from Phil-Air. 8
This animosity culminated in the filing of a criminal complaint
for Estafa by Regino Cokieng against petitioner. In October
1994, petitioner was invited by the Philippine National Police
Criminal Investigation Command (PNPCIC) at Camp Crame,
Quezon City, to appear before it for investigation in relation to
said complaint.9 It can be gleaned from the Certification dated
14 November 1994 issued by PNPCIC that on 19 October
1994, no amicable settlement was reached by the parties
and said Office advised Regino to "file the proper case before
the appropriate court."10
While respondent Regino Cokieng recoiled from pursuing the
Estafa case, his brother Ricardo Cokieng geared for the next
burst of hostilities.
21

On 08 December 1994, Ricardo Cokieng filed a ComplaintAffidavit11 charging the petitioner with the crime of Unjust
Vexation before the Metropolitan Trial Court (MeTC) of
Makati City. Ricardo Cokieng alleged in his affidavit that he
maintained a personal checking account with the Prudential
Bank, Magallanes Branch. He further alleged that petitioner
herein received Ricardo Cokiengs bank statement of account
on 31 October 1994 without the latters authorization. 12
Ricardo Cokieng additionally averred that he had previously
requested petitioner who was his former business partner "to
render an accounting of his business activities during the
existence of the partnership as he suspected that he was
doing something foolish, but instead petitioner suddenly did
not report to the office anymore and has not returned ever
since."13
From said Complaint, an Information was filed by the
Assistant Prosecutor for Unjust Vexation in Criminal Case
No. 160684 on 20 December 1994, the accusatory portion of
which reads:
That on about the 31st day of October 1994, in the
Municipality of Makati, Metro Manila, Philippines, and within
the jurisdiction of this Honorable Court, the above-named
accused who was a former business partner of RICARDO
COKIENG, did then and there willfully, unlawfully and
feloniously, without being authorized by offended party
RICARDO COKIENG, took the latters bank statement of
accounts for August 1, 1994 from Prudential Bank
Magallanes Branch, and despite demand, accused failed and
refused to give said bank statement which the accused could
use against RICARDO COKIENG thereby causing the latter
anxiety, annoyance and unjust vexation.14
In his defense, petitioner admitted taking Ricardo Cokiengs
statement of account when he went to the bank to get his
own bank statement as he had a Savings Account of his own
therein. Knowing that he was closely associated to Ricardo
Cokieng, having maintained a joint savings account 15 with the
latter in said bank, a bank employee requested petitioner to
get Ricardo Cokiengs statement as well. He explained that
he left Ricardo Cokiengs bank statement on his table and
Ricardo Cokieng got it. Petitioner asserted that he has no
motive to retain the bank statement in his possession and
withholding it would not in any way profit him. 16
1awphi1.nt
After trial, the MeTC promulgated a decision 17 on 29 February

1996 acquitting petitioner of the crime charged for
insufficiency of evidence. In giving more credence to the
testimony of petitioner, the MeTC held that under the
circumstances, the taking of the bank statement is not an
unlawful act, and therefore the presumption of criminal intent
did not arise from the mere proof of the taking of the bank
account. The trial court added that to be annoyed or vexed is
something subjective. Such annoyance or vexation could
only be manifested by some clear act on the part of the
person alleged to be vexed or annoyed and there is no
showing that Ricardo Cokieng was vexed or annoyed other
than his own statement that is self-serving. The fallo
provides:
WHEREFORE, the Court hereby ACQUITS accused Lehner

Martires for insufficiency of evidence.18
Claiming bad faith and malice in respondents indiscriminate
filing of criminal complaints against him, without legal and
factual bases, and with the apparent purpose of harassing
and inconveniencing him, petitioner filed a Complaint for
Damages on 11 October 1996.19
Petitioner alleged that as a result of the indiscriminate filing of
the two suits against him by respondents, he had suffered
actual damages consisting of expenses incurred for
attorneys fees, transportation, and the like. He thus sought
to hold said respondents liable, jointly and severally, for the
following damages: P1,000,000 by way of moral damages,
P200,000 as actual damages, P300,000 by way of attorneys
fees and for expenses of litigation as may be proved during
the trial.20
Respondents retorted in their Memorandum that malice
cannot be attributed to them in filing the subject criminal
complaints, their action being merely an exercise of their right
to litigate. respondents controverted petitioners allegation
that the criminal complaint for estafa filed with the PNP was
dismissed for being "glaringly unfounded," but rather, they
were advised to file the proper case before the appropriate
court. As to the criminal complaint for unjust vexation filed by
respondent Ricardo Cokieng, the same was found to have
probable cause which warranted the filing of information, and
although petitioner was acquitted in said case, malice cannot
be imputed to herein respondents due to the finding of
probable cause. Respondents thus prayed for the dismissal
of the complaint and on their counterclaim, that petitioner be
ordered to pay to respondents the sums of P1,000,000 each
for moral damages, P100,000 as exemplary damages, and
P15,000 as attorneys fees plus P1,000 per appearance. 21
1awphi1.nt
At the trial proper, witnesses for the petitioner were petitioner

himself and his wife, Luduvina Martires. Both respondents
Ricardo Cokieng and Regino Cokieng took the witness stand
in support of their defense.
On 20 September 1999, the trial court rendered judgment in
favor of the petitioner and against the respondents. The
decretal portion enunciates:
Accordingly, therefore, the Court hereby renders judgment in
favor of the plaintiff and against the defendants ordering the
latter to pay plaintiff the following amounts:
1. P 1,000,000.00 by way of moral damages;
2. P 200,000.00 by way of actual damages; and
3. P 300,000.00 by way of attorneys fees.22
Respondents had struck back with an appeal. In the assailed
Decision dated 23 May 2001, the Court of Appeals reversed
the RTC decision. The fallo of the Court of Appeals decision
reads:

WHEREFORE, premises considered, the present appeal is
hereby GRANTED. The appealed Decision in Civil Case No.
Q96-29087 is hereby REVERSED and SET ASIDE and a
new judgment is hereby rendered DISMISSING the
Complaint for lack of merit.
22
cause signifies, as a legal consequence, the absence of
malice.27 On these, there must be proof that the prosecution
was prompted by a sinister design to vex and humiliate a
person, and that it was initiated deliberately knowing that the
charge was false and baseless to entitle the victim to
damages.
No pronouncement as to costs.23
The motion for reconsideration filed by petitioner suffered the
same fate in the Resolution of the Court of Appeals dated 28
September 2001.
Petitioner now lays his cause before us through the present
petition for review, raising the following as grounds for the
reversal of the Court of Appeals Decision:
A. THE DECISION OF THE HONORABLE COURT OF
APPEALS IS NOT SUPPORTED BY THE EVIDENCE ON
RECORD.
B. THE EVIDENCE ON RECORD CLEARLY SHOWS THAT
RESPONDENTS WERE ACTUATED BY MALICE IN FILING
THE SUBJECT CRIMINAL COMPLAINTS AGAINST THE
PETITIONER AND THAT SAID CRIMINAL COMPLAINTS
HAVE NO BASIS IN FACT AND IN LAW AND/OR LACK OF
PROBABLE CAUSE.24
The instant case gyrates on the issue of whether or not the
Court of Appeals erred in ruling that petitioner failed to show
a cause of action for damages based upon an alleged
malicious prosecution.
Petitioner contends that by filing the baseless criminal suits
against him, respondents Regino and Ricardo Cokieng have
subjected him and his family to untold anxiety, disgrace, and
financial ruin.
Respondents, on the other hand, assert that the criminal
actions were filed as a valid exercise of their rights to pursue
their legitimate claims against petitioner.
All things considered, we find the petition to be devoid of
merit.
There is malicious prosecution when a person directly
insinuates or imputes to an innocent person the commission
of a crime and the accused is compelled to defend himself in
court. While generally associated with unfounded criminal
actions, the term has been expanded to include unfounded
civil suits instituted just to vex and humiliate the defendant
despite the absence of a cause of action or probable cause. 25
To merit the award of damages in a case of malicious
prosecution, the aggrieved party must prove: (1) that he has
been denounced or charged falsely of an offense by the
defendant, (2) that the latter knows that the charge was false
or lacks probable case, (3) that the said defendant acted with
malice, and, of course, (4) the damages he has suffered. 26
The elements of want of probable cause and malice must
simultaneously exist; otherwise, the presence of probable
To the mind of this Court, the twin elements of probable

cause and malice are lacking in the case at bar to entitle
petitioner to damages he now seeks out. For one, it is an
elementary rule in this jurisdiction that good faith is presumed
and that the burden of proving bad faith rests upon a party
alleging the same.28 In the case at bar, petitioner has failed to
prove bad faith on the part of respondents. For another, there
are no factual allegations in the complaint that can support a
finding that malice and bad faith motivated the respondents
in filing the two informations against petitioner. Allegations of
bad faith, malice, and other related words without ultimate
facts to support the same are mere conclusions of law. 29
From our reading of the complaint for damages arising from
malicious prosecution and from the records of the case, we
find no ultimate facts to buttress these conclusions of law.
The claim for damages in the instant case is anchored on the
supposed malevolence that attended the filing of the criminal
cases for Estafa and Unjust Vexation. Petitioner makes much
of the fact that the Estafa case was not pursued by
respondent Regino Cokieng and the fact of his acquittal from
the charge of Unjust Vexation.
Recall from the records that the PNPCIC at Camp Crame,
Quezon City, after investigation of the Estafa case against
petitioner, recommended the filing of the proper action in
court. True, Regino Cokieng balked in pursuing the said
case. His desistance, however, could not be construed as an
outright acquiescence to petitioners theory that Regino
Cokieng filed the said case despite the knowledge that it
would not prosper in court in light of the initial
recommendation of the PNPCIC for Regino Cokieng to file
the appropriate case in court through his lawyer or through
the said Office. Thus, as far as the PNPCIC is concerned,
there is a ground for Regino Cokieng to pursue the case. In
fact, such desistance is, to us, an earmark of good faith as it
may well suggest that respondent had kept his hands off
petitioner despite the said recommendation of PNPCIC.
Regino Cokieng must have, for one reason or another,
decided that it was not worth his time pursuing the case a
personal decision which was not necessarily shared by his
brother, Ricardo Cokieng who felt that danger lay in wait for
him as his bank statement sits in the hands of petitioner.
As regards the Unjust Vexation case, recall that the basis for
the acquittal of petitioner was for insufficiency of evidence
and not on a finding that facts as narrated by respondents did
not exist. Absent a categorical statement from the MeTC,
petitioners acquittal does not ipso facto indicate that the
exculpatory version of the petitioner that he received the
bank statement as a favor to respondent Ricardo Cokieng
and that he has already given the copy to the latter, was the
true one.30
23

True, from the testimonies of respondents, their main gripe
centered on how petitioners alleged failure to render
accounting prior to his exit from Phil-Air imperiled the viability
of respondents business, how petitioners failure to return
the bank statement resulted in difficulty in reconciling the
books of Phil-Air, and how they suspected a chicanery in
petitioners sudden severance of his ties with Phil-Air. 31 For
these reasons, their proper cause of action should have been
for accounting and damages, not a Criminal Case for Unjust
Vexation or Estafa, with the view of establishing once and for
all, by a reconciliation of their respective books of accounts,
the true and correct accountability of petitioner to Phil-Air.
However, to the mind of this Court, the fact that respondents
may have been ill-advised by their counsel should not be
taken against them. As far as respondents were concerned,
they have been wronged by petitioner, thus their resolve that
their criminal complaints would prosper.
constantly mindful that over and above these monetary costs

is the psychological burden that an accused and his family
would have to hurdle in the interregnum. Indeed, being
tagged as an "accused" is by itself traumatic. nevertheless,
the award of damages arising from malicious prosecution is
justified if and only if it is proved that there was a misuse or
abuse of judicial processes or the institution and pursuit of
legal proceedings for the purpose of harassing, annoying,
vexing or injuring an innocent person.36
More specifically, the filing of information for Unjust Vexation

by respondent Ricardo Cokieng was based on his fear that
petitioner took the statement so he could hold onto
something which he could use against Ricardo Cokieng. To a
legal mind, this may be a tawdry justification to subject a
person to the hassle of a criminal prosecution, but given the
manner by which petitioner left Phil-Air, which was in haste,
respondent Ricardo Cokieng had ground to suspect
petitioners real purpose in securing the formers bank
statement. Further, the fact that subsequently, petitioner filed
no less than two other civil cases for recovery of certain
amounts of commission and for recovery of properties 32
against respondents bolstered respondent Ricardo Cokiengs
fear that petitioner could indeed use the bank statement
against him. Hence, the Court has sufficient reason to
believe respondent Ricardo Cokiengs avowal that he was
buoyed by an honest belief that petitioners act of holding on
to his bank statement constituted an actionable offense an
antithesis to the petitioners assertion that the filing was a
product of mere whim or caprice.
WHEREFORE, the instant petition is DENIED. The

Resolutions dated 11 September 1998 and 5 March 1999 of
the Court of Appeals in CA-G.R. CV No. 65804 are hereby
AFFIRMED. Costs against petitioner.
While it is settled that the mere fact that the fiscal took full
control of litigation does not grant immunity to persons who
misuse their rights to instigate criminal actions, 33 we cannot,
however, discount the fact that from his laymans point of
view, the prosecutors act of filing an Information for Unjust
Vexation against petitioner must have indeed bolstered
Ricardo Cokiengs honest belief that he had a strong case
against the former. Moreover, it is a doctrine well-entrenched
in jurisprudence that the mere act of submitting a case to the
authorities for prosecution does not make one liable for
malicious prosecution, for the law could not have meant to
impose a penalty on the right to litigate.34
It is a sound principle of justice and public policy that persons
shall have free resort to the courts for redress of wrong and
vindication of their rights.35 This is not to undermine our
previous ruling that the right to institute criminal prosecutions
has its metes and bounds and can not be exercised
maliciously and in bad faith to the detriment and harassment
of a person who, without cause, is pestered, inconvenienced,
and rendered cash-strapped inasmuch as such suits where
liberty is at stake, compel an accused to hire a lawyer and
incur other expenses for his defense. We are likewise
In the instant case, petitioner failed to show by a clear

preponderance of evidence as required in civil cases that
respondents have acted in wanton and gross bad faith and
injustice in instigating the criminal suits against petitioner to
entitle him to the damages he now seeks. Where the actions
are filed in good faith, no penalty should be imposed thereon.
37
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga,
JJ., concur.
Footnotes
Rollo, pp. 19-24. Penned by Associate Justice Martin S.
Villarama, Jr., with Associate Justices Conrado M. Vasquez,
Jr. and Eliezer R. Delos Santos, concurring.
1
Rollo, pp. 85-90. Penned by Judge Emilio L. Leachon, Jr.
Rollo, p. 26.
Also spelled as "Martirez" in other parts of the records. TSN,

14 April 1999, pp. 1-19.
4
TSN, 05 September 1997, pp. 17-18.
TSN, 05 September 1997, p. 8.
TSN, 05 September 1997, p. 16.
TSN, 05 September 1997, pp. 16-17, p. 20.
Rollo, p. 33.
10
Records, p. 171.
11
Rollo, pp. 34-35.
12
Rollo, p. 34.
24

13
Rollo, p. 34.
14
Rollo, p. 38.
15
Records, pp. 164-167.
16
Rollo, p. 40.
Rollo, pp. 39-40. Penned by Judge Leticia Querubin

Ulibarri.
17
18
Rollo, p. 40.
19
Rollo, pp. 28-29.
20
Rollo, p. 31.
21
Rollo, pp. 65-84.
22
Rollo, p. 90.
23
Rollo, p. 23.
24
Rollo, p. 11.
Bayani v. Panay Electric Co., Inc., G.R. No. 139680, 12

April 2000, 330 SCRA 759, 764.
25
Ventura v. Bernabe, G.R. No. L-26760, 30 April 1971, 38

SCRA 587, 596.
26
Lucas v. Royo, G.R. No. 136185, 30 October 2000, 344

SCRA 481.
27
Barons Marketing Corp. v. Court of Appeals, G.R. No.

126486, 09 February 1998, 286 SCRA 96, 105.
28
Drilon v. Court of Appeals, G.R. No. 106922, 20 April 2001,

357 SCRA 12.
29
30
Supra, note 26.
31
TSN, 17 July 1998, pp. 23-35; TSN, 14 April 1999, pp. 6-7.
32
TSN, 5 September 1997, pp. 60-62.
Villanueva v. United Coconut Planters Bank, G.R. No.

138291, 07 March 2000, 327 SCRA 391, 404.
33
Lao v. Court of Appeals, G.R. No. 109205, 18 April 1997,

271 SCRA 477.
34
Cacayoren v. Suller, A.M. No. MTJ-97-1132, 24 October

2000, 344 SCRA 159, 166.
35
36
Supra, note 33.
37
Ibid.
25

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 138291
irregularities were discovered in the application, processing

and granting of said loan prompting UCPB to conduct further
investigation on the matter.
After due inquiry, the [respondent] bank found and concluded
that [petitioner], together with his father, Hermenegildo
Villanueva, Bobby Cafe (UCPB Dumaguete City Branch
Manager) and a certain Reynaldo Ramos, confederated and
conspired with each other in perpetrating the fraud,
anomalies and irregularities to the detriment of the bank.
March 7, 2000
HECTOR C. VILLANUEVA, petitioner,

vs.
UNITED COCONUT PLANTERS
Dumaguete Branch, respondent.
BANK
(UCPB),
PANGANIBAN, J.:
A suit for malicious prosecution cannot prosper unless the
plaintiff satisfactorily proves that the earlier criminal action
lacked probable cause and was filed, by a sinister design,
mainly to injure, vex, annoy or humiliate. An acquittal, by
itself, does not necessarily prove the absence of probable
cause in the criminal information or complaint. Upon the
other hand, the complainant cannot escape liability merely on
the ground that it was the fiscal who prosecuted the
proceedings in court.
The Case
Before us is a Petition for Review on Certiorari of the October
30, 1998 Decision 1 and the April 8, 1999 Resolution 2 of the
Court of Appeals 3 (CA) in CA-GR CV No. 52904. The
assailed Decision disposed as follows: 4
WHEREFORE, IN VIEW OF THE FOREGOING, this appeal
is hereby GRANTED. The Decision of the lower [c]ourt dated
November 6, 1995 is REVERSED and SET ASIDE, and the
complaint for damages in the court below is ordered
DISMISSED. No pronouncement as to costs.
The assailed Resolution denied the petitioner's Motion for
Reconsideration. 5
The Facts
The Court of Appeals, in its assailed Decision, related the
antecedents of this case in this wise: 6
Sometime in December 1978, Hermenegildo Villanueva,
father of [herein Petitioner] Hector C. Villanueva, applied for
and was granted a loan by [Respondent] United Coconut
Planters' Bank (UCPB), Dumaguete City Branch, which at
that time was managed by one Bobby Cafe. The loan was for
the alleged purpose of agricultural coconut production and for
processing under the Coconut Production Loan Program. As
security therefor, Hermenegildo Villanueva mortgaged to the
bank a parcel of land registered in his name located at
Mauban, Quezon.
In the course of a bank audit, certain fraud, anomalies and
On June 8, 1979, UCPB, through its counsel, filed the

following criminal complaints with the Office of the City Fiscal
(now Prosecutor) of Dumaguete City, to wit:
1. Against Bobby B. Cafe, Hermenegildo G. Villanueva,
Hector Villanueva and Reynaldo Ramos, for violation of
Section 77 of the General Banking Act, Republic Act (RA) No.
337, as amended by Presidential Decree (PD) No. 71, in
relation to Central Bank Circular No. 517, Series of 1976, and
Section 87 of the General Banking Act (Exh. "1", pp. 8-9,
Defendant's Folder of Exhibit);
2. Against Hermenegildo Villanueva, Hector Villanueva and
Reynaldo Ramos for violation of Section 87-A-2(d) of the
General Banking Act, RA No. 337, as amended by PD No. 71
(Exh. "2", pp. 33-34, ibid.);
3. Against Bobby B. Cafe for violation of Section 87-A-1 (c) of
the General Banking Act, RA No. 337, as amended by PD
No. 71 (Exh "3", pp. 46-47, ibid.);
Hector Villanueva and Reynaldo Ramos for violation of
Section 87-A-2(b) of the General Banking Act, RA No. 337,
as amended by PD No. 71 (Exh. "4", pp. 59-60, ibid.);
Articles 315(2)(a) and 316(2) of the Revised Penal Code
(Exh. "5", no. 72-73, ibid.); and
Section 87-A-1(d) and Section 87-A-2(a) of the General
Banking Act, RA No. 337, as amended by PD No. 71 (Exh.
"6", pp. 85-86, ibid.).
After preliminary investigation, the City Fiscal found probable
cause and resolved to file three (3) informations with the
Court of First Instance (now Regional Trial Court) of
Dumaguete City (Exh. "7", pp. 98-120, ibid.), as follows:
1. Criminal Case No. 3699
Against Bobby Cafe, Hermenegildo Villanueva, Hector
Villanueva and Reynaldo Ramos for violation of Sections 77,
87-A-2(b) and 87-A-1(d) of the General Banking Act, RA No.
337, as amended by PD No. 71 and [Central Bank] Circular
No. 517, Series of 1976 (Exh. "8", pp. 121-122, ibid.);
26

Against Hermenegildo Villanueva, Hector Villanueva,
Reynaldo Ramos and Bobby B. Cafe for violation of Sections
87-A-2(d) and 87-A-1(c), General Banking Act, RA No. 337,
as amended by PD NO. 71 (Exh. "9", no. 123-124, ibid.);
Against Bobby Cafe, Hermenegildo Villanueva, Hector
Villanueva and Reynaldo Ramos for the crime of Estafa
under Article 315(2)(a) of the Revised Penal. Code (Exh.
"10", pp. 125-126, ibid.).
The three (3) criminal cases were consolidated and tried
jointly.
On June 29, 1991, the Regional Trial Court of Dumaguete
City, Branch 37, rendered a decision therein acquitting all the
accused except for Bobby Cafe, the dispositive portion of
which reads:
WHEREFORE, all the foregoing considered, judgment is
hereby rendered as follows:
1. In Criminal Case No. 3699, accused Bobby Cafe is found
guilty beyond reasonable doubt of violating Paragraph 1(d) of
Section 87-A of the General Banking Act as amended and is
hereby sentenced to imprisonment of one year and to pay a
fine of P2,000.00 with subsidiary imprisonment at the rate of
one day for each eight pesos but in no case to exceed onethird of the term of the sentence, in case of insolvency, and to
pay 1/4 of the costs. Accused Rey Ramos and Hector
Villanueva are acquitted on grounds of reasonable doubt with
1/2 of the costs de oficio.
blackening . . . of his integrity, honesty and good reputation,

as well as adversely affecting his political career and
business dealings, for which [petitioner] prayed that
[respondent bank] be held liable to him for the amount [of]
P200,000.00 in actual damages, P6,000,000.00 in moral
damages, P2,000,000.00 in exemplary damages,
P1,000,000.00 in nominal damages, and P800,000.00 in
attorney's fees, as well as P5,000.00 charge per court
appearance.
In its answer, [respondent bank] denied the allegations in the
complaint and asseverated that [petitioner] ha[d] no cause of
action against [respondent bank] since the bank's filing of the
criminal complaints before the Fiscal's Office of Dumaguete
City was not tainted with malice; that it was the Fiscal's Office
that prosecuted the criminal cases against [petitioner] and his
co-accused when after preliminary investigation, it found
probable cause to file the informations in court; that the acts
of the City Fiscal in filing the informations and prosecuting
the cases [were] presumed to have been performed with
regularity and in good faith; that [petitioner's] acquittal based
on reasonable doubt justifie[d] [respondent bank's]
submission of its grievances to the machinery of justice for
ruling and possible redress; that [petitioner's] assertion that
the filing of the criminal cases by the bank caused his
political misfortunes [was] strained and farfetched; and that
[petitioner's] claim for damages ha[d] no legal and factual
bases. [Respondent bank] thus prayed for the dismissal of
the complaint and, in his counterclaim, for an award of
P10,000,000.00 in moral damages, P2,000,000.00 in
exemplary damages, P1,000,000.00 in attorney's fees and
costs of suit.
After trial on the merits, the lower court rendered its Decision
7
dated November 6, 1995, in favor of petitioner. The
dispositive portion reads: 8
In Criminal Case No. 3700 and Criminal Case No. 3701,

accused Bobby Cafe, Hector Villanueva and Rey Ramos are
acquitted on grounds of reasonable doubt with costs de
oficio.
WHEREFORE, finding a preponderance of evidence in favor

of the [petitioner], and considering his social standing in the
community and in the Province of Negros Oriental, judgment
is hereby rendered awarding:
All the three cases against Hermenegildo Villanueva are

ordered dismissed in view of his death pursuant to Paragraph
1 of Article 89 of the Revised Penal Code.
1. Moral damages in the amount of [o]ne and a half million

pesos;
2. Exemplary damages in the amount of two million pesos;
xxx
xxx
xxx
(Exhs. "K" and "11"; p. 358, Orig. Rec., Vol. I)

In view of his acquittal in the criminal cases, Hector
Villanueva filed a complaint for damages on the ground of
alleged malicious prosecution with the Regional Trial Court of
Dumaguete City against [respondent bank], which was
docketed as Civil Case No. 172-B and raffled to Branch [44]
of the court. The complaint alleged, among others, that
[petitioner] is a respectable member of the community, a
professional, a member of various civic organizations, a
businessman, and a political leader; that the filing of the
criminal cases against him by [respondent bank] was done
with malice which resulted in the undue maligning,
3. Attorney's fees in the amount of five hundred thousand

pesos.
All the counterclaims of [respondent bank] are hereby
dismissed for lack of merit.
On appeal, the CA reversed the trial court in the assailed
Decision and Resolution.
Ruling of the Court of Appeals
The Court of Appeals ruled that the petitioner had failed to
prove the elements of malicious prosecution.
27

First, even if the respondent bank filed the six criminal
Complaints against the petitioner, it was not the prosecutor
but merely the complainant. The prosecution of those
criminal cases was left solely to the discretion and control of
the city fiscal. Second, the prosecutor acted with probable
cause. The Resolution of the city fiscal of Dumaguete clearly
showed petitioner's participation in the alleged crimes and
the reasons why the accused was probably guilty as
charged. Third, the petitioner also failed to establish malice
behind the filing of the criminal Complaints.
The adverse result of an action does not by itself make the
prosecution thereof wrongful; neither does it subject the actor
to payment of damages. The law does not impose a penalty
on the right to litigate.
Hence, this Petition. 9
Issues
In his Memorandum, the petitioner submits the following
issues for our consideration:
I.
Can probable cause exist in non-existent crimes or indicted
criminal acts not specifically punished by existing penal
statutes?
II.
Complainant of a criminal complaint being merely reduced to
the status of [a] complaining witness in the prosecution of the
. . . information filed in court, does such reduced status
absolve complainant of civil liability under the doctrine of
malicious prosecution?
III.
On the application of the doctrine of malicious prosecution, is
not the doctrine enunciated in the Lao v. Court of Appeals
(199 SCRA 58, 61) complimentary, supportive or rather
strengthening further the earlier doctrine posited in the case
of Lagman v. Intermediate [Appellate Court] (G.R. 77281, 28
Oct. 89), or did the former amend or supplant the latter? 10
Restated, the issues brought forth in this case are as follows:
(1) Was there probable cause against petitioner? (2) May the
private complainant in a criminal case be held liable for
malicious prosecution, considering that it is the fiscal who
prosecuted the criminal action against the accused? and (3)
Was the petitioner prosecuted out of malice?
The Court's Ruling
The Petition has no merit.
First Issue:
Probable Cause
For a malicious prosecution suit to prosper, the plaintiff must
prove the following: (1) the prosecution did occur, and the
defendant was himself the prosecutor or that he instigated its
commencement; (2) the criminal action finally ended with an
acquittal; (3) in bringing the action, the prosecutor acted
without probable cause; and (4) the prosecution was impelled
by legal malice an improper a sinister motive. 11 Stripped
of legal jargon, malicious prosecution means persecution
through the misuse or abuse of judicial processes; or the
institution and pursuit of legal proceedings for the purpose of
harassing, annoying, vexing or injuring an innocent person.
Petitioner avers that there was no probable cause against
him, because the imputed acts were not covered or punished
by a penal statute. Despite being a complete stranger to the
loan transaction, he was implicated by the bank as a
conspirator in the six Complaints for violation of the General
Banking Act. However, only three Informations were filed for
violations of the following: one, Secs. 77, 87-A-2(b) and 87A-1(d) of the General Banking Act (Republic Act No. 337 as
amended by Presidential Decree No. 71), as well as Central
Bank Circular No. 517, Series of 1976; two, Secs. 87-A-2(d)
and 87-A-1(c) of the General Banking Act, as amended; and,
three, Article 315(2)(a) of the Revised Penal Code. The
petitioner was acquitted of all three charges.
The contention is untenable. Probable cause is evident from
the facts and circumstances established during the
preliminary investigation conducted by the city prosecutor. In
its 23-page Resolution of October 8, 1979, the City
Prosecutor's Office outlined petitioner's participation, as
follows:
The first document of the case . . . is a Deed of Sale
executed on November 4, 1978 in the City of Manila selling
Lot No. 7716-B of the Cadastral Survey of the Municipality of
Mauban, Province of Quezon covered by Transfer Certificate
of Title No. T-81215 of the land records of Quezon Province
consisting of 5,791,688 sq. m. (5[79] plus hectares)[;] the
vendor is the Coco-Agro Industrial Co., Inc., represented by
Jaime Abeja and the vendee is Hermenegildo Villanueva for
a consideration of P500,000.00. Evidently, no money
changed hands on this date except the sum of P6,000.00 for
land taxes and other expenses because at about the same
time, two (2) documents were executed by Hermenegildo
Villanueva in favor of Jaime Abeja: one for P1,100,000.00
and another for P400,000.00 to secure the payment of
mortgage of the agreed consideration of P1,500,000.00.
Although these documents contain the signature of Jaime
Abeja as vendor in the document of sale and as mortgagee
in the two documents of mortgage, and that of Hermenegildo
Villanueva as vendee and mortgagor in the documents of
mortgage, Abeja claims that Hermenegildo Villanueva was
not present. However, Bobby B. Cafe, Hector Villanueva, and
Dr. Reynaldo Ramos were present. Obviously, these
documents were prepared and signed by Villanueva
beforehand. These mortgages were kept secret although the
respondents, including Bobby B. Cafe, knew of them. . . . The
Deed of Sale, enabled Bobby B. Cafe and/or the other
28

respondents to transfer the title from the name of Abeja's
corporation [to] the name of Hermenegildo Villanueva. 12
The Prosecution of the Information

by the Public Prosecutor, Not by the Complainant
. . . And after release, the proceeds were deposited in the

account of . . . Hermenegildo Villanueva with UCPB,
Dumaguete Branch. Almost immediately, or about a day or
two, the proceeds of the loan were withdrawn from the
account of Hermenegildo Villanueva and deposited with the
newly opened account of [petitioner], son of Hermenegildo
Villanueva. 13
. . . The evidence also shows that at the time Abeja was in
Dumaguete City, on 22 March 1978, when he signed the
Memorandum of Agreement, vendee Hermenegildo
Villanueva was out of the country. From start to finish, it was
only Bobby B. Cafe and Rey Ramos, and at one time Hector
Villanueva who had dealings and meetings with Jaime Abeja,
. . . 14
The bank cannot be faulted for its desire to protect its interest
in the subject loans. Since the proceeds thereof were already
released and transferred to the bank account of petitioner
from that of his father, the bank had to implead the petitioner
in the criminal cases.
Probable cause is the existence of such facts and
circumstances as would excite the belief in a reasonable
mind that the person who is charged and prosecuted in a
criminal case is probably guilty of the crime or wrongdoing. 15
The term does not connote absolute certainty. Neither does it
require an inquiry into the sufficiency of the evidence to
obtain a conviction.
In this case, the above-quoted facts taken together constitute
prima facie evidence to engender a reasonable belief that
petitioner was part of a conspiracy to defraud the respondent
bank. Thus, there was probable cause for the filing of the
Complaints, which were not products of the whim or caprice
of the respondent bank.
In malicious prosecution, even if the act complained of does
not constitute a crime, there can still be probable cause
behind the commission of a civil wrong. The gravamen of
malicious prosecution is not the filing of a complaint based on
the wrong provision of law, but the deliberate initiation of an
action with the knowledge that the charges were false and
groundless. 16 In the case at bar, even if Secs. 87-A-1, 87-A1(d), 87-A-2, and 87-A-2(b) of the General Banking Act
punish only bank officers, employees, borrowers or banking
institutions, the respondent bank nonetheless filed these
Complaints based on a theory of a conspiracy to defraud it.
1wphi1.nt
Petitioner avers that the CA erred in absolving the

respondent bank on the basis merely of the fact that the
fiscal had absolute control and supervision of the
prosecution.
We agree that the CA erred on this point. As held in Lagman
v. Intermediate Appellate Court, 17 the second requisite of
malicious prosecution is "that the defendant was himself the
prosecutor or that he instigated its commencement." Indeed,
the right to institute a criminal action cannot be exercised
maliciously and in bad faith, as when a criminal complaint is
used "as a weapon to force an alleged debtor to pay an
indebtedness." 18 Such complaint designed to annoy or
harass may be the basis of a suit for malicious prosecution.
Clearly, the mere fact that the fiscal took full control of a
litigation does not grant immunity to persons who misuse
their rights to instigate criminal actions.
Third Issue:
Malice and Malicious Prosecution
The respondent bank filed the criminal Complaints for
violations of the General Banking Act in its honest belief that
these charges were meritorious. There is no credible
evidence to show that it was impelled by a desire to unjustly
vex, annoy and inflict injury on the petitioner. Before these
cases were referred to the city fiscal, it had even conducted
its own investigation with the assistance of the National
Bureau of Investigation. 19
1wphi1
Malicious prosecution requires proof that the prosecution was

prompted by a sinister design to vex and humiliate the
plaintiff. 20 The respondent bank had neither a "bone to pick"
with the petitioner nor a "previous dealing with petitioner that
could have prompted the respondent bank to turn the tables
on him." 21
Resort to judicial processes, by itself, is not an evidence of ill
will, as the mere act of filing a criminal complaint does not
make the complainant liable for malicious prosecution. 22
There must be proof that the suit was prompted by legal
malice an inexcusable intent to injure, oppress, vex, annoy
or humiliate. 23 A contrary rule would discourage peaceful
recourse to the courts and unjustly penalize the exercise of a
citizen's right to litigate. 24 Where the action is filed in good
faith, no penalty should be imposed thereon. 25
The petitioner's acquittal, by itself, did not disprove the

presence of probable cause. Evidence of probable cause to
warrant the filing of a criminal information may not suffice to
procure a conviction, which requires proof beyond
reasonable doubt. In other words, an acquittal does not
necessarily imply lack of probable cause.
WHEREFORE, the Petition is DENIED and the assailed

Decision and Resolution AFFIRMED. Costs against
petitioner.
Second Issue:
Melo, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.
SO ORDERED.
29

March 1, 1995, pp. 6-7.
Footnotes
1
Globe Mackay v. CA, supra, p. 788; Lagman v. IAC, supra,

p. 740.
20
Rollo, pp. 13-25.

21
Ibid, p. 25; ibid, p. 100.
Rollo, p. 33.
Globe MacKay v. CA, supra, p. 788; Lagman v. IAC, supra,
p. 740; Albenson v. CA, supra.
22
Tenth Division composed of JJ Fermin A. Martin Jr.,

ponente and chairman; Romeo J. Callejo Sr. and Mariano M.
Umali, members (both concurring).
3
Pro Line Sports Center, Inc. v. Court of Appeals, 281 SCRA

162, 172, October 23, 1997.
23
CA Decision, p. 13; rollo, p. 25.

Ibid.; "J" Marketing Corporation v. Sia Jr., 285 SCRA 580,
582, January 18, 1998.
24
Rollo, p. 33.
CA Decision, pp. 2-6; rollo, pp. 14-18.
Written by Judge Alvin L. Tan.
RTC Records, vol. II, p. 264.
This case was deemed submitted for decision upon

simultaneous receipt by this Court of the parties' respective
Memoranda on November 29, 1999. The Memorandum of
petitioner was signed by Atty. Justo J. Paras of Paras &
Associates, while that of respondent was prepared by Attys.
Jefferson M. Marquez and Joseph Randi C. Torregosa of
Abello Concepcion Regala & Cruz.
9
10
Petitioner's Memorandum, pp. 6-7; rollo, pp. 109-110.
Ponce v. Legaspi, 208 SCRA 377, 388, May 6, 1992; Lao v.

Court of Appeals, 199 SCRA 58, 61, July 11, 1991; Drilon v.
Court of Appeals, 270 SCRA 211, 220- 221, March 20, 1997.
11
Exh. "7-A," Resolution of the Office of the City Fiscal of

Dumaguete, pp. 14-15; RTC Records, Vol. II, pp. 139-140.
15
16
Exh. "7-B," ibid, p. 16; ibid, p. 141.
17
Exh. "7," ibid, pp. 19-20; ibid, pp. 144-145.
Ponce v. Legaspi, supra, p. 389; Drilon v. Court of Appeals,

270 SCRA 211, 221, March 20, 1997.
15
Albenson Enterprises Corp. v. Court of Appeals, 217 SCRA

16, 28, January 11, 1993; Chua v. Court of Appeals, 242
SCRA 341, 345, March 14, 1995; China Banking Corp. v.
Court of Appeals, 231 SCRA 472, 478, March 28, 1994.
16
17
166 SCRA 734, 739, October 28, 1988, per Fernan, CJ.
Yutuk v. Manila Electric Co., 2 SCRA 337, 348-349, May

31, 1961; Globe McKay Cable & Radio Corporation v. Court
of Appeals, 176 SCRA 778, 787, August 25, 1989.
18
19
Memorandum for the Respondent, p. 27; rollo, p. 102; TSN,
Lagman v. IAC, supra, p. 741; China Banking v. CA, supra,

p. 478.
25
30

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 154685
November 27, 2006
METROPOLITAN BANK and TRUST COMPANY, RICARDO

GELLA and TEOFILO FIESTA, Petitioners,
vs.
COURT OF APPEALS and ANTONIO LAIO, Respondents
DECISION
AUSTRIA-MARTINEZ, J.:
By Petition for Review on Certiorari under Rule 45 of the
Rules of Court, Metropolitan Bank and Trust Co.
(Metrobank), its Asst. Vice President Ricardo Gella, and
Manager Teofilo Fiesta (Fiesta) assail the March 13, 2002
Decision1 and August 12, 2002 Resolution 2 of the Court of
Appeals (CA) in CA-G.R. CV No. 39343 3 holding them liable
for damages in favor of Antonio Laio (Laio).
Below are the material facts.
Thirty-years back, Fiesta filed with City Fiscal Raymundo
Ponteras (Fiscal Ponteras) a Letter-Complaint 4 accusing
Laio of swindling Metrobank. After preliminary investigation,
Fiscal Ponteras issued a Resolution 5 dated December 28,
1976, finding probable cause to charge Laio for estafa, thus:
xxx the facts borne on the records of the case show that the
Bank has been misrepresented [sic] by Eduardo Tambis, Jr.
to open his personal account No. 123 with Metro Bank,
because of his assurance that the supporting authority of Mr.
Antonio Laio will be submitted later. Being the son of the
Secretary of the Manager of San Carlos Milling Co., Inc. and
a known dealer of spare parts with aforesaid Central xxx, he
was allowed by Metro Bank xxx to open his account and to
have Checks Nos. 1910 for P24, 900.00 and 12450 for
P10,500.00, to be deposited in his name in trust for ACL
Engine Consultant6 , with the instruction to secure the
authority from ACL Consultant Engine, [sic] which Tambis, Jr.
agreed and promised to submit to Metro Bank.
Mr. Eduardo Tambis, Jr. as an agent or sales representative
of Mr. Antonio Laio withdrew from Metro Bank the amount of
P24,551.08 and out of this withdrawal was deducted the
amount of P22,900.00, in payment to Caspin Trading thru Mr.
Delfin Castro from Manila for the spare parts purchased by
Eduardo Tambis, Jr., in the name of ACL and thereafter sold
to San Carlos Milling Co., Inc. for P25,400.00.
Caspin Trading issued to Eduardo Tambis, Jr. a receipt for
the payment of P22,900.00 in the name of ACL Engine
Consultant xxx.
From all appearances, it is clear that the P22,900.00

withdrawn by Eduardo Tambis, Jr., from the Metro Bank, was
paid in good faith to the creditor of ACL Engine Consultant,
thereby inuring to the benefit of the partnership. Since the
total withdrawal with the bank amounted to P24,551.08 and
what was paid to Caspin Trading was only P22,900.00, there
is a difference of P1,651.08, which Mr. Eduardo Tambis, Jr. is
personally liable to ACL Engine Consultant, but which Mr.
Eduardo Tambis, Jr. argued that the said amount was
necessary for his operational expenses in Manila for the
benefit of the partnership.
On January 26, 1976, Mr. Antonio Laio xxx protested before
Metro Bank the actuations of Mr. Eduardo Tambis, Jr. in
depositing the two checks xxx and the withdrawals made for
the reason that the same were without his authority.
Assuming arguendo as true that the deposit of Eduardo
Tambis, Jr. on the said checks were without his (Laio)
authority, however, he cannot deny and ignore that on the
day he protested to the bank, he had already known that the
amount of P22,900.00 was withdrawn by Eduardo Tambis, Jr.
and paid to Caspin Trading in the name of the partnership
(ACL) xxx.
xxxx
On February 17, 1976, Mr. Antonio Laio withdrew the full
amount of P35,400.00 from the Metro Bank, in complete and
absolute disregard of the payment of his partner Eduardo
Tambis, Jr. to Caspin Trading xxx.
It appearing that the present case arose from the
unauthorized acts taken by Eduardo Tambis, Jr. which
constitutes a felony; and, it resulting that Antonio Laio
withdrew the full amount of P35,400.00 in utter disregard of
the amount of P22,900.00 validly paid to his creditor Delfin
Castro on January 23, 1976 by Eduardo Tambis. Jr., thereby
defrauding Metro Bank in the amount of P24,275.08 thru
such a heinous strategy and scheme, it is the considered
view of the investigating Fiscal that both are liable for
Violation of General Order No. 26, dated March 31, 1973, for
Estafa.7
Laio did not appeal from the foregoing Resolution. Hence,
an Information8 was filed with the Regional Trial Court (RTC),
Branch 57, San Carlos City, docketed as Criminal Case No.
RTC-1015, charging Laio and Eduardo Tambis (Tambis)
with estafa. However, upon Demurrer to Evidence filed by
Laio, the RTC (Br. 57), in an Order 9 dated April 12, 1989,
dismissed Criminal Case No. RTC-1015 but only as against
him:
The evidence on record after the prosecution had presented
their evidence does not show any document or proof of
partnership between Tambis and Laio. The mere allegation
of partnership in an extra-judicial confession will not suffice
considering that the extra-judicial confession is violative of
the constitutional right of the accused and therefore has no
probative value.
31

xxxx
malicious prosecution.
From the evidence on record, this Court agrees with counsel

of Antonio Laio that the evidence of the prosecution
against Antonio Laio is lamentably inadequate even to
establish a mere preponderance of guilt.10 (Emphasis ours)
The petition has no merit.
Thereafter, the RTC (Br. 57) rendered a Decision 11 dated

February 28, 1990 also dismissing Criminal Case No. RTC1015 as against Tambis. However, it held the latter civilly
liable to Metrobank for P16,900.00 only.12
Meanwhile, on April 27, 1989, Laio filed with the RTC,
Branch 45, Bacolod City a Complaint 13 for Damages against
Metrobank, Gella and Fiesta (Metrobank, et al.) and Fiscal
Ponteras on the ground of malicious prosecution. In their
Answer,14 Metrobank, et al. countered with a claim for
damages.15
The RTC dismissed the Complaint in a Decision16 dated July
28, 1992, the dispositive portion of which reads:
WHEREFORE, premises considered, the instant complaint is
hereby DISMISSED.
On the counterclaim, defendants having proved the same,
plaintiff is hereby ordered to pay the defendants the following
amounts: P70,000.00 as actual damages; P10,000.00 as
exemplary damages; P25,000.00 as attorneys fees, and
P500.00 per appearance; and to return to defendant bank the
amount of P24,900.00 amount withdrawn by Eduardo
Tambis, Jr.; and to pay the cost.
SO ORDERED. 17
Laio appealed to the CA which issued the March 13, 2002
Decision18 awarding him damages, thus:
WHEREFORE, the decision of the Regional Trial Court dated
July 28, 1992 in Civil Case No. 5397 is hereby SET ASIDE
and another one is rendered holding defendant-appellant
Metropolitan Bank & Trust Company, et al. liable for the
following damages in favor of plaintiff-appellant Antonio
Laio:
P200,000.00 as moral damages
P100,000.00 as exemplary damages
P 50,000.00 as attorneys fees.
SO ORDERED. 19
Metrobank, et al. filed a Motion for Reconsideration 20 but the
CA denied the same in its August 12, 2002 Resolution. 21
Petitioners Metrobank, et al. now question before this Court
the foregoing CA Decision and Resolution on the sole
ground that the CA erred in holding them liable for
Sec. 11, Art. III of the Constitution guarantees right of access

to the courts. This right is coupled with the responsibility to
show that a suit is impelled by a legitimate cause of action. 22
The exercise of such legal right with responsibility does no
injury. However, when the institution and pursuit of a legal
proceeding is without probable cause, the only purpose
thereof being to harass, annoy, vex or injure an innocent
person who is then compelled to defend himself in court, it
amounts to malicious prosecution. 23 Denuncia falsa or
malicious prosecution is misuse or abuse of judicial
processes. The party who is injured by such abuse may, at
the termination of the frivolous suit, file a civil action for
damages based on the provisions of the Civil Code on
human relations.24 But to merit an award of damages, he
must prove that: (a) the defendant was himself the
prosecutor or at least instigated the prosecution; (b) the
prosecution finally terminated in the acquittal of plaintiff; (c) in
bringing the action the prosecutor acted without probable
cause, and (d) the prosecutor was actuated by malice, i.e.,
by improper and sinister motives. 25 He must also prove the
damages he has suffered.26
Herein petitioners instigated the commencement of the
prosecution of respondent for estafa. It was their LetterComplaint filed with Fiscal Ponteras that led to the institution
of Criminal Case No. RTC-1015.27
It is also of record that when respondent filed Civil Case No.
5397 for damages on April 27, 1989, Criminal Case No. RTC1015 had already been finally terminated with the issuance
by the RTC of its April 12, 1989 Order dismissing the
Information against respondent.
The only issue to be resolved is whether the CA was correct
in holding that the prosecution of respondent in Criminal
Case No. RTC-1015 was not founded on probable cause but
was carried out to harass him.28
Petitioners insist that the better view was that of the RTC (Br.
45) which held that Criminal Case No. RTC-1015 was
instituted based on a finding of probable cause by Fiscal
Ponteras in his December 28, 1976 Resolution, 29 that such
finding of probable cause was not overturned by RTC (Br. 57)
even when it ordered the case dismissed upon Demurrer to
Evidence; that such dismissal was only due to insufficiency of
evidence which does not mean that the case was merely
trumped up or fabricated; and that the existence of probable
cause rules out malice. 30
In its March 13, 2002 Decision, the CA rejected such view,
thus:
In this case, it was shown that defendant-appellee Bank had
repeatedly required Eduardo Tambis, Jr. to present his
authorization from plaintiff-appellant before they could
release the amount. Yet, despite Tambis failure to present
any written authorization, defendant-appellee Bank still
32

encashed the check and handed the money to Tambis, Jr.
The fact that Tambis, Jr. may have the money to pay another
client does not make herein plaintiff-appellant guilty of any
form of Estafa against defendant Bank. From the resolution
of the City Fiscal, it was shown that his only basis for finding
probable cause against herein plaintiff-appellant is the latters
act of withdrawing the amount of the check. Without,
however, being able to link said act of withdrawal to the
previous act of Tambis, Jr. in encashing the check without
any authorization.
The fact is there is nothing in the records to show that
plaintiff-appellant had lifted a finger to convince the officers of
defendant-appellee to release the amount of the checks to
Tambis, Jr. Clearly, the repeated request of defendantappellee Bank for any form of authorization from Tambis, Jr.
only proves that the act of releasing the money to Tambis, Jr.
was not a regular transaction of the bank with their client,
plaintiff-appellant, thereby justifying plaintiff-appellants action
of demanding from them a reimbursement of the amount of
the checks. Besides, there was even no evidence shown to
prove that plaintiff-appellant had in fact benefited from the
unauthorized release of the amount of the check to Tambis,
Jr. Undoubtedly, the fault was with the officers of defendantappellee Bank and the filing of the criminal case for estafa
against plaintiff-appellant was in fact malicious on their part. 31
Ponteras states that Tambis was allowed by petitioner

Metrobank to open Account No. 123 and deposit therein
Check Nos. 1910 and 12450, even when these were payable
to ACL, only because Tambis is the son of the secretary of
the manager of San Carlos Milling Co., Inc..38 Thus,
petitioners on their own allowed Tambis to conduct said bank
transactions. Respondent did not in any way lead them to
believe that he authorized Tambis to open a personal
account nor deposit there the checks of ACL.
Further, Fiscal Ponterass Resolution, shows that petitioners
did not believe that the business relationship of Tambis and
respondent was anything close to a partnership. Before
allowing Tambis to open Account No. 123 and deposit ACL
checks, petitioners required Tambis to submit a written
authorization,39 a requirement which they would not have
demanded had they been certain that Tambis and respondent
were partners. Thus, it is bewildering that petitioners filed the
Letter-Complaint against respondent based merely on the
bare claim of Tambis in his Affidavit40 dated May 3, 1976 that
he was a partner of respondent.
Moreover, based on the evaluation of Fiscal Ponteras of the
testimony of Metrobank Cashier Ernesto Qui, it likewise
appears that petitioners themselves allowed Tambis to
withdraw part of the value of the two ACL checks which he
had deposited earlier into his account, thus:
We sustain the CA.

Probable cause implies mere reasonable belief of guilt. While
it requires more than bare suspicion or speculation, probable
cause needs only to rest on evidence of the likelihood that a
crime has been committed and that the person suspected is
probably guilty thereof.32 It need not be based on clear and
convincing evidence, 33 nor evidence sufficient to procure a
conviction.34 Thus, as a general rule, acquittal is not to be
equated with lack of probable cause.35
It appears that at the time when the deposit was made, a

certain Mr. Delfin Castro of Caspin Trading, Manila, was in
company with Mr. Eduardo Tambis, Jr.
Mr. Eduardo Tambis, Jr. informed the bank that Mr. Delfin
Castro of Caspin Trading is a spare parts dealer from Manila.
He is with him (Tambis) to receive payment for P16,400.00
from Tambis, Jr. in payment for a certain spare-parts bought
on credit by ACL.
Be that as it may, it does not follow that the finding of Fiscal

Ponteras in his December 28, 1976 Resolution as to the
existence of probable cause is conclusive. While as a matter
of policy, courts refrain from interfering with the assessment
by the executive department of the existence of probable
cause,36 this does not preclude us from evaluating the facts
and circumstances upon which the determination of probable
cause may have been based, if only to decide a case of
malicious prosecution. As we held in Cometa v. Court of
Appeals,37 the determination of lack of probable cause as an
element in malicious prosecution cannot be made to rely on
the finding of the Department of Justice to file the criminal
case for such practice will render obsolete the remedy of
damages for malicious prosecution.
The Check No. 1910 for P24,900.00 and Check No. 12454
for P10,500.00, in the name of ACL were presented to Mr.
Ernesto Qui for deposit with Metro Bank, San Carlos City
Branch. It was at first refused for deposit for the reason that
they were payable to ACL and not to Eduardo Tambis, Jr.
However, on the insistence of Mr. Tambis, Jr., and with his
assurance that the supporting papers from ACL will follow as
the same will be submitted by him, said checks mentioned
herein was accepted for deposit. The amount of P16,400.00
in a form of a bank draft was purchased by Eduardo Tambis,
Jr. and paid to Caspin Trading thru Delfin Castro, Sr., for the
account of ACL.
In the present case, the CA disregarded the finding of Fiscal

Ponteras and declared that petitioners had absolutely no
cause to drag respondent to court for estafa. And rightly so. A
closer examination of the December 28, 1976 Resolution of
Fiscal Ponteras reveals that his own findings tend to discount
the probablity that respondent committed estafa.
Mr. Eduardo Tambis, Jr. [made] a withdrawal from Metro

Bank, San Carlos City Branch xxx the total amount of
P24,551.08, as the records show. 41
For one, the December 28, 1976 Resolution of Fiscal
xxxx
From the foregoing evaluation of Fiscal Ponteras, it is

obvious that petitioners allowed Tambis to make the
withdrawal without the latter showing them any document to
support his claim that the amount to be withdrawn was in
33

payment of an account of ACL with Caspin Trading. In fact,
despite the assurance of Tambis, no such document was
presented to petitioners. More important, petitioners allowed
Tambis to withdraw the amount of P24,551.08. This is
certainly more than the P16,400.00 which they claimed was
the amount ACL owed to Caspin Trading. Thus, if it were true
that petitioners allowed Tambis to make the withdrawal only
because they believed it was in payment of an account of
ACL, then they should have limited the amount withdrawn to
P16,400.00, the amount allegedly due to Caspin Trading. By
allowing Tambis to withdraw more than that amount,
petitioners therefore tolerated Tambis to treat Account No.
123 and the funds therein as his own.
why they were, for a time, pressing Tambis alone for

restoration of the amount withdrawn. 43 In pressing charges
against respondent, despite knowledge that they had no
cause against him, petitioners acted with ill-intent and
abused the processes of the court.
Evidently, the December 28, 1976 Resolution of Fiscal

Ponteras failed to link respondent to the transactions of
Tambis. On the contrary, it succeeded in revealing that it
was by the complacency, if not negligence, of petitioners that
Tambis managed to withdraw a portion of the value of the
checks of ACL. The only connection Fiscal Ponteras
perceived respondent had to the transactions was that the
latter purportedly insisted on being paid the value of the ACL
checks even when he allegedly knew that petitioners allowed
Tambis to withdraw the same to pay for an account of ACL
with Caspin Trading. Such perception, however, was based
purely on speculation. The Resolution does not cite any
evidence to substantiate the assumption that the payment
made to Caspin Trading was for an account of ACL, or that
respondent or ACL benefited from the payment made to
Caspin Trading. The receipts cited in the said Resolution do
not indicate that the transactions covered by the payments
were between ACL and Caspin Trading. Instead, said
receipts all indicate that the sale was made by Caspin
MA. ALICIA AUSTRIA-MARTINEZ
1wphi1
WHEREFORE, finding no reversible error in the decision of

the CA, the same is AFFIRMED.
No costs.
SO ORDERED.
Associate Justice
WE CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
CONSUELO YNARES-SANTIAGO
Associate Justice
MINITA V. CHICO-NAZARIO
Trading to Tambis.42
Associate Justice
All told, the December 28, 1976 Resolution of Fiscal

Ponteras failed to make out even the slightest probable
cause to indict respondent for estafa.
C ERTI F I CATI O N
1wphi1
The next question then is whether the CA erred in finding that

petitioners were motivated by malice when they initiated the
filing of Criminal Case No. RTC-1015 against respondent
even without probable cause.
The CA is correct. There is preponderant evidence that
petitioners acted with malice when they included respondent
in the criminal case. As already discussed, the only reason
petitioners had for filing the Letter-Complaint against
respondent was that Tambis purportedly issued an Affidavit
claiming that he was a partner of respondent. This was such
a frivolous excuse, coming as it did in the heels of petitioners
insistence that Tambis furnish them written proof of
partnership. No such written proof was ever presented by
Tambis, not even when he executed the Affidavit. It is
perplexing then that petitioners, who are presumably steeped
in the rules of due diligence in banking practice, suddenly
discarded the requirement of written proof of partnership and
settled for the bare statement of Tambis, as basis for filing of
a complaint for estafa against respondent. Petitioners had
actually nothing to hold against respondent, and this explains
Pursuant to Section 13, Article VIII of the Constitution, it is

hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned
to the writer of the opinion of the Courts Division.
ARTEMIO V. PANGANIBAN
Chief Justice
Footnotes
Penned by Associate Justice Alicia L. Santos with the
concurrence of Associate Justice (now Supreme Court
Associate Justice) Cancio C. Garcia and Associate Justice
Marina L. Buzon.
1
CA rollo, p. 154.
Entitled "Antonio Laio, Plaintiff-Appellant, versus

Metropolitan Bank & Trust Company, et al., Defendants3
34

Appellants."
28
Rollo, p. 14.
Records, p. 209.
29
Id. at 17.
Id. at 9.
30
31
CA rollo, pp. 121-122.
Sole proprietorship of Laio, as shown by Certificate of

Registration, Exhibits "M," "M-1," "N" and "O", records, pp.
214-218.
6
Records, pp. 25-31.
Id. at 283.
Id. at 33-35.
Villanueva v. Secretary of Justice, G.R. No. 162187,

November 18, 2005, 475 SCRA 495, 511.
32
Preferred Homes Specialties, Inc. v. Court of Appeals, G.R.

No. 163593, December 16, 2005, 478 SCRA 387, 410.
33
10
Id. at 34.
11
Id. at 179.
12
Id. at 199-200.
13
Id. at 1.
14
Id. at 48.
15
Id. at 52.
16
Id. at 330.
17
Id. at 341.
18
CA rollo, p. 116.
19
Id. at 123.
20
Id. at 125.
21
See note 2.
22
Lucas v. Royo, 398 Phil. 400, 409 (2000).
Yasoa, v. De Ramos, G.R. No. 156339, October 6, 2004,

440 SCRA 154, 157-158; Villanueva v. United Coconut
Planters Bank, 384 Phil. 130, 140 (2000).
23
Bayani v. Panay Electric Co., Inc., 386 Phil. 980, 986

(2000).
24
25
Lao v. Court of Appeals, 382 Phil. 583, 608 (2000).
Martires v. Cokieng, G.R. No. 150192, February 17, 2005,

451 SCRA 696, 705.
26
Villanueva v. United Coconut Planters Bank, supra, citing

Lagman v. Intermediate Appellate Court, No. L-72281,
October 28, 1988, 166 SCRA 734, 739.
27
34
Fabia v. Court of Appeals, 437 Phil. 389, 399 (2002).
Solidbank Corporation v. Mindanao Ferroalloy Corporation,

G.R. No. 153535, July 28, 2005;, 464 SCRA 409, 429;
Villanueva v. United Coconut Planters Bank, supra.
35
First Womens Credit Corporation v. Perez, G.R. No.

169026, June 15, 2006.
36
Cometa v. Court of Appeals, 378 Phil. 1187 (1999), citing

Ventura v. Bernabe, G.R. No. L-26760, April 30, 1971, 38
SCRA 587. See also Saber v. Court of Appeals, G.R. No.
132981, August 31, 2004, 437 SCRA 259.
37
38
Records, pp. 25-26.
39
Id. at 16-17.
40
Id. at 276.
41
Id. at 17-18.
42
Id. at 13-14.
43
Id. at 285-286.

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 147597
August 6, 2008
CLARISSA U. MATA, doing business under the firm

name BESSANG PASS SECURITY AGENCY,
petitioner,
vs.
ALEXANDER M. AGRAVANTE, EDDIE E.
SANTILLAN, PATRICIO A. ARMODIA, ALEJANDRO
A. ALMADEN and HERMENEGILDO G. SALDO,
respondents.
DECISION
NACHURA, J.:
Before us is a petition for review on certiorari assailing
the decision1 of the Court of Appeals (CA) which
dismissed petitioner's complaint for damages filed
against the respondents.
The antecedent facts are as follows:
Respondents Eddie E. Santillan, Patricio A. Armodia,
Alejandro A. Almaden and Hermenegildo G. Saldo were
former security guards of the Bessang Pass Security
Agency, owned by herein petitioner Clarissa Mata.
On October 27, 1993, the respondents, assisted by
their counsel, Atty. Alexander Agravante, filed a
complaint with the National Labor Relations
Commission (NLRC) in Cebu City for non-payment of
salaries/wages and other benefits.2 Subsequently, they
filed an affidavit-complaint with the Philippine National
Police (PNP) in Cramp Crame, Quezon City requesting
an investigation of the Bessang Pass Security Agency
and cancellation of its license to operate as security
agency for violation of labor laws. Copies of this
affidavit-complaint were likewise sent to the following
offices: (1) Office of the President, (2) Office of the
Secretary of Public Works and Highways, (3) Office of
the PNP Director General, (4) PNP Chief
Superintendent Warlito Capitan, (5) Office of the DILG
Secretary, (6) Ombudsman Conrado Vasquez and (7)
Office of the Vice-President.
On January 6, 1994, petitioner instituted an action for
damages against the respondents averring that
respondents filed unfounded, baseless complaints
35
before the NLRC for alleged violation of the labor laws
and with the PNP for cancellation of its license to
operate. She further alleged that by furnishing the
government offices copies of these complaints,
especially the Department of Public Works and
Highways which was its biggest client, the agency's
reputation was besmirched, resulting in the loss of
contracts/projects and income in the amount of at least
P5,000,000.00. Petitioner then declared that
respondents' deliberate and concerted campaign of
hate and vilification against the Bessang Pass Security
Agency violated the provisions of Articles 19, 20, and
21 of the Civil Code, and thus, prayed that the
respondents be held jointly and severally liable to pay
her the sum of P1,000,000.00 as moral damages,
attorney's fees in the amount of P200,000.00 and other
reliefs.
On August 4, 1999, the trial court rendered judgment,
the dispositive portion of which reads, as follows:
WHEREFORE, premises considered, judgment is
hereby rendered in favor of plaintiff and against
defendants ordering the latter to pay plaintiff the sum of
ONE MILLION (P1,000,000.00) PESOS as moral
damages.3
On the basis of the evidence adduced by the petitioner
ex parte, the trial court found preponderant evidence
enough to justify petitioner's cause of action. It gave
credence to the petitioner's contentions that the
respondents had no other motive in sending the letter to
the seven (7) government offices except to unduly
prejudice her good name and reputation. The trial court,
however, did not award the sum of P5,000,000.00 as
petitioner's estimated loss of income for being
speculative.
On appeal, the CA reversed and set aside the trial
court's decision. It dismissed the complaint for lack of
merit.
Hence, this petition anchored on the following grounds:
WITH ALL DUE RESPECT, THE HONORABLE COURT
OF APPEALS COMMITTED A SERIOUS REVERSIBLE
ERROR, AMOUNTING TO GRAVE ABUSE OF
DISCRETION WHEN IT REVERSED AND SET ASIDE
THE DECISION OF THE REGIONAL TRIAL COURT,
BRANCH 89 IN QUEZON CITY AND FURTHER
CONCLUDED THAT RESPONDENTS' ACT OF
FURNISHING COPIES OF THEIR LETTERCOMPLAINT NOT ONLY TO SEVEN (7) NATIONAL
AGENCIES BUT ALSO TO PETITIONER'S BIGGEST
CLIENT, WAS NOT TAINTED WITH BAD FAITH AND
WITH THE SOLE MOTIVE TO MALIGN THE GOOD

NAME AND REPUTATION OF PETITIONER.
OF APPEALS COMMITTED SERIOUS ERROR IN THE
APPRECIATION OF FACTS AND APPLICATION OF
LAWS, WHICH IF NOT RECTIFIED, WOULD CAUSE
IRREPARABLE INJURY AND DAMAGE TO HEREIN
PETITIONER.
OF APPEALS COMMITTED A SERIOUS REVERSIBLE
ERROR, AMOUNTING TO GRAVE ABUSE OF
DISCRETION, WHEN IT REVERSED AND SET ASIDE
THE DECISION OF THE REGIONAL TRIAL COURT,
BRANCH 89 IN QUEZON CITY, NOTWITHSTANDING
RESPONDENTS HAVING BEEN DECLARED IN
DEFAULT.4
Petitioner contends that the respondents were so driven
by unrestrained hatred and revenge that they not only
succeeded in disseminating the letter-complaint to the 7
government offices but to the DPWH, her biggest client,
with the intention to destroy her reputation and, more
importantly, her business. She posits that this would
mean a loss of employment for numerous employees
throughout the country who solely depend on the
security agency for their existence, and that
respondents obviously failed to see this fact. She
claims that the respondents have abused their rights, to
her prejudice, and that of the security agency which has
tried very hard to protect its name and hard-earned
reputation. Petitioner then concludes that the
respondents have violated Articles 19 and 21 of the
Civil Code and should be held liable for damages.5
We are not impressed. We are more in accord with the
findings and conclusions of the respondent court that
petitioner is not entitled to any award of damages. We
agree with the respondent court's explanation, viz.:
In filing the letter-complaint (Exhibit "D") with the
Philippine National Police and furnishing copies thereof
to seven (7) other executive offices of the national
government, the defendants-appellants may not be said
to be motivated simply by the desire to "unduly
prejudice the good name and reputation" of plaintiffappellee. Such act was consistent with and a rational
consequence of seeking justice through legal means for
the alleged abuses defendants-appellants suffered in
the course of their employment with plaintiff-appellee,
which started with the case for illegal dismissal and
non-payment of backwages and benefits earlier filed
with the NLRC Regional Arbitration Branch in Cebu
City. In exhausting the legal avenues to air their
legitimate grievances, the paramount and overriding
concern of the defendants-appellants - who had already
36
suffered from retaliatory acts of their employer when
they manifested their desire to take formal action on the
violations of labor laws committed by employer - is to
secure government intervention or action to correct or
punish their employer, plaintiff-appellee, in accordance
with the provisions of existing laws or rules and
regulations which may be applicable to their situation.
And in this process, the intervention of the Philippine
National Police was sought in view of its mandated role
of administrative supervision over security agencies like
plaintiff-appellee.
Section 8 of Republic Act No. 5487, otherwise known
as the "Private Security Agency Law," empowered the
Chief of the former Philippine Constabulary (PC) at any
time "to suspend or cancel the licenses of private
watchman or security guard agency found violating any
of the provisions of this Act or of the rules and
regulations promulgated by the Chief of Constabulary
pursuant thereto." With the enactment of Republic Act
No. 6975 ("Department of the Interior and Local
Government Act of 1990"), the PC-INP was abolished
and in its place, a new police force was established, the
Philippine National Police (PNP). Among the
administrative support units of the PNP under the new
law is the Civil Security Unit which shall provide
administrative services and general supervision over
the organization, business operation and activities of all
organized private detectives, watchmen, security guard
agencies and company guard houses. It was thus but
logical for defendants-appellants, as advised by their
counsel, to also communicate their grievances against
their employer security guard agency with the PNP. The
act of furnishing copies to seven (7) other executive
offices, including that of the Office of the President, was
merely to inform said offices of the fact of filing of such
complaint, as is usually done by individual complainants
seeking official government action to address their
problems or grievances. Their pending case with the
NLRC would not preclude them from seeking
assistance from the PNP as said agency is the national
body that exercises general supervision over all
security guard agencies in the country, the defendantsappellants were of the honest belief that the violation of
labor laws committed by their employer will elicit proper
action from said body, providing them with a relief
(cancellation of license) distinct from those reliefs
sought by them from the NLRC (payment of backwages
and benefits). Certainly, defendants-appellants had
good reason to believe that bringing the matter to PNP
is justified as no private security agency found to be
violating labor laws should remain in good standing with
or [be] tolerated by the PNP. Despite the pendency of
the NLRC case, such request for investigation of
plaintiff-appellee could not in any way be tainted with
malice and bad faith where the same was made by the
37

very individuals who suffered from the illegal labor
practices of plaintiff-appellee. Moreover, no liability
could arise from defendants-appellants' act of filing of
the labor case with the NLRC which plaintiff-appellee
claimed to have resulted in the agency's not being able
to secure contracts because of such pending labor
case, defendants-appellants merely exercised a right
granted to them by our labor laws.6
It has been held that Article 19,7 known to contain what
is commonly referred to as the principle of abuse of
rights, is not a panacea for all human hurts and social
grievances. The object of this article is to set certain
standards which must be observed not only in the
exercise of one's rights but also in the performance of
one's duties. These standards are the following: act
with justice, give everyone his due, and observe
honesty and good faith. Its antithesis is any act evincing
bad faith or intent to injure.8 Article 21 refers to acts
contra bonos mores and has the following elements: (1)
an act which is legal; (2) but which is contrary to
morals, good custom, public order or public policy; and
(3) is done with intent to injure. The common element
under Articles 19 and 21 is that the act complained of
must be intentional,9 and attended with malice or bad
faith. There is no hard and fast rule which can be
applied to determine whether or not the principle of
abuse of rights may be invoked. The question of
whether or not this principle has been violated, resulting
in damages under Articles 20 and 21,10 or other
applicable provision of law, depends on the
circumstances of each case.11 In the case before us, as
correctly pointed out by the CA, the circumstances do
not warrant an award of damages. Thus, the award of
P1,000,000.00 as moral damages is quite
preposterous. We agree with the appellate court that in
the action of the respondents, there was no malicious
intent to injure petitioner's good name and reputation.
The respondents merely wanted to call the attention of
responsible government agencies in order to secure
appropriate action upon an erring private security
agency and obtain redress for their grievances. So, we
reiterate the basic postulate that in the absence of proof
that there was malice or bad faith on the part of the
respondents, no damages can be awarded.
WHEREFORE, the petition is DENIED. The Decision of
the Court of Appeals is AFFIRMED.
WE CONCUR:
Associate Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had
been reached in consultation before the case was
assigned to the writer of the opinion of the Court's
Division.
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution
and the Division Chairperson's Attestation, I certify that
the conclusions in the above Decision had been
reached in consultation before the case was assigned
to the writer of the opinion of the Court's Division.
REYNATO S. PUNO
Chief Justice
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Footnotes
Associate Justice
Penned by Associate Justice Martin S. Villarama, Jr.,
with Associate Justices Conrado M. Vasquez, Jr. and
1
38

Perlita J. TriaTirona, concurring; rollo, pp. 38-44.

SUPREME COURT
Manila
THIRD DIVISION
NLRC Case No. RAB-VII-10-0899-93.
Rollo, p. 75.
Id. at 18-19.
ALFONSO T. YUCHENGCO,
Id. at 24.
vs.
Id. at 42-43.
THE MANILA CHRONICLE PUBLISHING CORPORATION,

ROBERTO COYIUTO, JR., NOEL CABRERA, GERRY
ZARAGOZA, DONNA GATDULA, RODNEY P. DIOLA,
RAUL VALINO and THELMA SAN JUAN, Respondents.
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.
7
Nikko Hotel Manila Garden v. Reyes, G.R. No.

154259, February 28, 2005, 452 SCRA 532, 546-547.
8
Id. at 547.
Art. 20. Every person who, contrary to law, willfully or

negligently causes damage to another, shall indemnify
the latter for the same.
10
Art. 21. Any person who willfully 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.
Albenson Enterprises Corporation v. Court of
Appeals, G.R. No. 88694, January 11, 1993, 217 SCRA
16, 25.
11
G.R. No. 184315
November 25, 2009
DECISION
CHICO-NAZARIO, J.:
When malice in fact is proven, assertions and proofs that the
libelous articles are qualifiedly privileged communications are
futile, since being qualifiedly privileged communications
merely prevents the presumption of malice from attaching in
a defamatory imputation.
This is a Petition for Review on Certiorari assailing the
Amended Decision1 of the Court of Appeals in CA-G.R. CV
No. 76995 dated 28 August 2008. The Amended Decision
reversed on Motion for Reconsideration the 18 March 2008
Decision2 of the same court, which in turn affirmed in toto the
Decision of the Regional Trial Court (RTC) of Makati City in
Civil Case No. 94-1114 dated 8 November 2002 finding
herein respondents liable for damages.
The facts of the case, as summarized by the RTC, are as
follows:
In his Complaint, plaintiff Alfonso T. Yuchengco alleges that in
the last quarter of 1994, Chronicle Publishing Corporation
("Chronicle Publishing" for brevity) published in the Manila
Chronicle a series of defamatory articles against him. In two
of the subject articles (November 10 and 12, 1993 issues),
he was imputed to be a "Marcos crony" or a "MarcosRomualdez crony," which term according to him is commonly
used and understood in Philippine media to describe an
individual who was a recipient of special and underserving
favors from former President Ferdinand E. Marcos and/or his
brother-in-law Benjamin "Kokoy" Romualdez due to special
and extra-ordinary closeness to either or both, and which
favors allowed an individual to engage in illegal and
dishonorable business activities.
The plaintiff claims that the said articles further branded him
as a mere front or dummy for the Marcos and Romualdez
clans in Benguet Corporation, which company sought to
take-over the management of Oriental Petroleum Mineral
Corporation ("Oriental" for brevity). He contends that such an
imputation is untrue since his holdings in Benguet
Corporation were legally acquired by him.
39

Also, he was likewise accused of unsound and immoral
business practices by insinuating that he wanted to take
control of Oriental in order to divert its resources to rescue
the debt-ridden Benguet Corporation. He claims that the
accusation is untrue since he was merely interested in being
represented in the board thereof so as to protect his and his
companies interest therein as shareholders.
The subject articles insinuated that he personally and
intentionally caused the failure of Benguet Corporation and
that if even if he ever assumed control of Oriental, it would
suffer the same fate as the former. According to him, at the
time he assumed chairmanship of Benguet Corporation, it
was already experiencing financial downturns caused by
plummeting world prices of gold and unprofitable investments
it ventured into.
Moreover, one of the articles portrayed him as being an
unfair and uncaring employer when the employees of
Grepalife Corporation, of which he is the Chairman, staged a
strike, when the truth being that he had nothing to do with it.
And that if his group takes over Oriental, it will experience the
same labor problems as in Grepalife.
Furthermore, the subject articles accused him of inducing
Rizal Commercial Banking Corporation ("RCBC" for brevity)
to violate the provisions of the General Banking Act on
DOSRI loans. He denies the imputations believing that there
is nothing irregular in the RCBC-Piedras transaction for the
acquisition of shares of Oriental.
Also, the plaintiff claims that the subject articles insinuated
that he induced others to disobey lawful orders of the
Securities and Exchange Commission ("SEC" for brevity)
when the truth is that the officials of RCBC and Alcorn never
defied any SEC order, and that if ever they did, he never
induced them to do so.
Finally, the plaintiff asserts that the subject articles imputed to
him the derogatory tag of "corporate raider," implying that he
was seeking to profit for something he did not work for. He
denies the imputation since he acquired his stake in Oriental
for adequate and valuable consideration at the time when no
one was willing to bailout the government from its difficult and
losing position thereto.
In their Answer, the defendants deny liability claiming that the
subject articles were not defamatory since they were
composed and published in good faith and only after having
ascertained their contents. In any event, they claim that these
articles are privileged and/or constitute reasonable and
balance[d] comments on matters of legitimate public interest
which cannot serve as basis for the finding of libel against
them. They likewise alleged that they were acting within the
bounds of constitutionally guaranteed freedom of speech and
of the press.
Furthermore, they contend that since plaintiff is a public
figure, and assuming that the articles were indeed
defamatory, they cannot be held liable for damages since
they were not impelled by actual malice in the composition
thereof. They did not compose and/or publish said articles

with the knowledge that they contained falsehoods, or with
reckless disregard on whether or not they contained
falsehood.
As to defendant Coyiuto, he claims that he had no
participation in the publication of the subject articles nor
consented or approved their publication.
PLAINTIFFS EVIDENCE
During the trial, the plaintiff himself, ALFONSO T.
YUCHENGCO, testified that prior to his appointment as
Ambassador to Japan, he was the chairman of various
business organizations notably: Benguet Corporation
("Benguet"), Philippine Long Distance Telephone Company,
Rizal Commercial Banking Corporation ("RCBC"), Bank of
America Savings Bank, House of Investments, Inc., Dole
Philippines and Philippine Fuji Xerox Corporation. He was
also the President of the Philippine Ambassadors; chairman
or vice president of Bantayog ng Bayan; and chairman of AY
Foundation, Inc. He was appointed Philippine Ambassador to
Peoples Republic of China after the EDSA Revolution.
As regards the article referring to the November 10, 1993
issue of the Manila Chronicle (Exh. A), he stated that he had
never been a Marcos crony nor had been a business partner
of the Romualdezes or had personal dealings with them; that
during the shareholders meeting, the two (2) sons of
Benjamin "Kokoy" Romualdez were elected as directors of
Benguet Corporation pursuant to a Court order; that he had
no personal dealings with them; that he had no intention of
taking over Oriental and that Benguet Corporation did not
lose the amount as stated in the article; that Benguet
Corporation experienced liquidity problems, and that before
he joined the corporation, it had already diversified into many
other financial ventures; that he denied having any business
partnership with the Romualdezes at that time.
Regarding the November 12, 1993 issue of the Manila
Chronicle (Exh. B), he denied having any partnership with the
Marcos family; that he denied responsibility for the losses
incurred by Benguet Corporation, as the losses were due to
the drop of the commodity market, and for having diversified
into other non-profitable ventures; that he had no intention
whatsoever of taking over Oriental; that although the
Yuchengco family owns a substantial block of shares of
RCBC, Sanwa Bank actually owns twenty-five percent (25%)
thereof; that RCBC did not finance his fund but it extended a
loan to Piedras Petroleum, a subsidiary of the Presidential
Commission of Good Government ("PCGG" for brevity);
admitted that Traders Royal Bank also granted a loan to
PCGG but such was an independent transaction of RCBC.
About the November 15, 1993 issue of the Manila Chronicle
(Exh. C), he denied any knowledge of what transpired at the
Trust Department of RCBC because as Chairman he was not
involved in many of the banks transactions.
Referring to November 16, 1993 issue of the Manila
Chronicle (Exh. D), he considered the attacks against him to
40

be malicious considering that he does not see any
connection between the labor strike at Grepalife with the
case of Alcorn and RCBC; that the article would like to show
that he was the reason for the huge losses incurred by
Benguet Corporation.
As regards the November 22, 1993 issue of the Manila
Chronicle (Exh. E), he denied giving any interest free loan,
the fact that they gave a loan to PCGG does not mean that
they gave a loan to Benedicto since the latter had already
turned over the shares of Piedras to PCGG at that time.
JOSE REVILLA testified that he and Amb. Yuchengco were

long time friends, where he (Revilla) worked for him
(Yuchengco) for thirty-two (32) years in his (Yuchengco)
credit card company Industrial Finance Corporation Credit
Cards; that knowing Amb. Yuchengco for a considerable
period of time, he does not believe the truth of the contents of
the subject articles; that plaintiff Yuchengco appeared
distressed when he joked about the subject articles; that
other people approached him to ask whether the subject
articles are true [TSN 25 August 1997].
xxxx
Regarding the November 23, 1993 issue of the Manila

Chronicle (Exh. F), he denied extending an interest free loan
considering that he is not the only owner of RCBC; that these
series of attacks against him and RCBC were intended to
cause a "bank run"; that the article imputes that he was
responsible for giving an interest free loan.
About the December 5, 1993 issue of the Manila Chronicle
(Exh. G), he said the article was intended to humiliate and
embarrass him since he really had no intention of taking over
Oriental; that the reason for the attack against his person
was because he and defendant Coyiuto, Jr. were both rivals
in the insurance business and that the latter has always been
envious of his position for having owned Malayan Insurance
Company.
On cross-examination, plaintiff Yuchengco testified that he
does not consider himself a public figure; and that he felt
maligned by the references to him as a "Marcos crony".
[TSN, 07 February 1997; 10 February 1997; 12 February
1997]
ROSAURO ZARAGOZA testified that he is the Executive
Vice-President of RCBC; that the statement in Exhibits "D",
"E" and "F" with regard to the interest free loan allegedly
granted to Piedras Petroleum Company, Inc. ("Piedras") are
false because the Piedras deal was a trust transaction which
involved an advance in exchange for shares of stock; that
plaintiff Yuchengco did not have a personal interest in the
Piedras deal; that Piedras or Oriental Petroleum Mineral
Corporation ("Oriental Petroleum") shares were not
transferred to plaintiff Yuchengcos name by virtue of the
transaction; and that the defendants did not approach him or
RCBC to check the veracity of the subject articles. The
affidavit of Mr. Zaragoza (Exhibit "H") was adopted as part of
his testimony.
On cross-examination, Mr. Zaragoza testified that he
volunteered to testify in the instant case because he was the
most knowledgeable about the Piedras deal; that plaintiff
Yuchengco was aggrieved upon reading the subject articles;
that under the Memorandum of Agreement ("MOA") between
RCBC and Piedras, should the latter fail to comply with its
obligations under the MOA, it will pay interest at the
prevailing market interest rate from the date of advance until
full payment; and that there was a complaint filed with the
Bangko Sentral ng Pilipinas against RCBC by Mr. Felipe
Remollo questioning the Piedras deal. [TSN 28 February
1997; 26 June 1997; 27 June 1997; 04 July 1997]
DEFENDANTS EVIDENCE
On the other hand, defendants Zaragoza, Gatdula, Cabrera
and Valino substantially testified on the following matters:
GERRY ZARAGOZA testified that he was the Managing
Editor of Manila Chronicle in charge of the national and
political news; that defendant San Juan was the other
Managing Editor in charge of the lifestyle section; that a story
conference is conducted everyday where the articles,
including the pages where they will appear, are discussed;
that the editor-in-chief (defendant Cruz), executive editor
(defendant Tolentino) and deputy editor (defendant Cabrera)
were the ones responsible for the decisions of the story
conference relative to the printing of the newspaper; that he
was not involved in the writing and editing of the subject
articles; that Exhibits "A" to "D" are classified as business
news; that columns, specifically Exhibits "E" and "F" are not
discussed during story conferences; and that Exhibit "G",
which appeared in the "Money Section" did not pass thru
him.
On cross-examination, defendant Zaragoza testified that
except for the columns, Exhibits "A" to "D" and Exhibit "G"
are considered hard news; that he handled the hard news,
while defendant San Juan handled the soft news; and that
defendant Valino was the business editor in charge of the
business section (TSN 22 July 1998; 23 September 1998]
DONNABELLE GATDULA claimed that she was a
correspondent for Manila Chronicle assigned to the
Securities and Exchange Commission ("SEC") beat; that she
had no participation in the writing or publication of Exhibits
"A" to "C" and "G" to "E"; that she attended the hearing
conducted by the SEC and interviewed the two lawyers of
RCBC and SEC Chairman Rosario Lopez regarding the
Oriental Petroleum case; that her name appears as a tag line
in Exhibit "D", because she only wrote part of the story; and
that she did not write the entire article (Exhibit "D") as some
of the statements therein were added by the editor/s; and
that she did not discuss Exhibit "D" with any of the editors.
On cross-examination, defendant Gatdula testified that she
does not have a copy of the original article which she wrote;
that she read Exhibit "D" after it was published; that she did
not compare her original story with Exhibit "D" nor question
the authority of the editor to edit her story; and that she
agreed to put her name on Exhibit "D". (TSN 23 September

1998; 05 October 1998).
1avvphi1
NOEL CABRERA contended that after having gone through

the subject articles, he believes that the news stories and
commentaries were fair and that those who wrote the same
followed the proper standards; that as regard the contents of
Exhibits "E" and "F", the opinion of Mr. Raul Valino, as written
in the said articles, were valid and based on documentary
facts; as to Exhibit "D", pertaining to the article of Ms.
Donnabelle Gatdula, she based her article on documents
pertaining to the Oriental transaction, other documents, as
well as interviews; that at the time the subject articles were
written, Amb. Yuchengco was a public figure, being a very
prominent businessman with vast interest in banks and other
businesses; that during the year 1993, the word "crony" was
more or less accepted to mean as a big businessman or
close associate of the late President Marcos, and its use in
the column was meant only to supply the perspective as to
the figure or subject involved in the news story, and there is
thus no malice or derogatory intent when the same was
used.
On cross-examination, defendant Cabrera testified that
defendant Coyiuto is one of the owners of Manila Chronicle;
and that he only saw the records of Exhibits "8" to "10" and
"16" to "20" after the publication of Exhibits "A" to "G" (TSN
21 April 1999; 28 April 1999 05 May 1999; 10 May 1999).
RAUL VALINO stated that he was the Acting Business
Manager and later Managing Editor and Business Editor-inChief of Manila Chronicle; that after having consulted several
dictionaries as to the meaning of the word "crony", he did not
come across a definition describing the word to mean
someone who is a recipient of any undeserving or special
favor from anyone, that it merely refers to someone who is a
friend or a special friend; there was no mention whatsoever
in the subject article that Amb. Yuchengco was being
accused of fronting for the late President Marcos (referring to
par. 2.3.2 of the complaint); that nowhere in the said
paragraph was Amb. Yuchengco accused of having acted as
a front to facilitate the acquisition of a prohibited interest in a
private corporation by a public official while occupying a
public office; that nowhere in the article was Amb. Yuchengco
accused of being directly or indirectly involved in unsound
business practices (referring to par. 2.4 of the complaint); that
whatever imputation of ill-will in par. 2.4.1 of the complaint
was only in plaintiffs mind; and as regards par. 2.6 of the
complaint, that he was merely reporting on what transpired at
the picket line and what the striking employees answered to
him; and that he did not state in his columns (Exhibits "E"
and "F") that plaintiff Yuchengco violated banking laws. [TSN
23 February 2000]3
On 8 November 2002, the RTC rendered its Decision in favor
of herein petitioner Alfonso T. Yuchengco, disposing of the
case as follows:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered as follows:
1. On the First Cause of Action, ordering defendants
41
Chronicle Publishing, Neil H. Cruz, Ernesto Tolentino, Noel
Cabrera, Thelma San Juan, Gerry Zaragoza, Donna Gatdula,
Raul Valino and Rodney Diola to pay plaintiff Yuchengco,
jointly and severally:
a. the amount of Ten Million Pesos (P10,000,000.00) as
moral damages; and
b. the amount of Ten Million Pesos (P10,000,000.00) as
exemplary damages;
2. On the Second Cause of Action, ordering defendants
Roberto Coyiuto, Jr. and Chronicle Publishing to pay plaintiff
Yuchengco, jointly and severally:
a. the amount of Fifty Million Pesos (P50,000,000.00) as
moral damages; and
b. the amount of Thirty Million Pesos (P30,000,000.00) as
exemplary damages;
3. On the Third Cause of Action, ordering all defendants to
pay plaintiff Yuchengco, jointly and severally, the amount of
One Million Pesos (P1,000,000.00) as attorneys fee and
legal costs.4
The respondents, namely the Manila Chronicle Publishing
Corporation, Neal H. Cruz, Ernesto Tolentino, Noel Cabrera,
Thelma San Juan, Gerry Zaragoza, Donna Gatdula, Raul
Valino, Rodney P. Diola, and Roberto Coyiuto, Jr. appealed to
the Court of Appeals. The appeal was docketed as CA-G.R.
CV No. 76995 and was raffled to the Fifth Division.
On 18 March 2008, the Court of Appeals promulgated its
Decision affirming the RTC Decision:
WHEREFORE, in consideration of the foregoing premises,
judgment is hereby rendered DISMISSING the appeals of
defendants-appellants and AFFIRMING the decision dated
November 8, 2002 of the trial court IN TOTO. 5
Respondents filed a Motion for Reconsideration. On 28
August 2008, the Court of Appeals reversed itself in an
Amended Decision:
WHEREFORE, the appeal is GRANTED. The Decision of this
Court dated March 18, 2008 is RECONSIDERED and SET
ASIDE. The decision of the court a quo dated November 8,
2002 is REVERSED and SET ASIDE. The Amended
Complaint for Damages against the defendants-appellants is
DISMISSED. No pronouncement as to costs.
Hence, this Petition for Review on Certiorari, where petitioner
puts forth the following Assignments of Error:
A. THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE REVERSIBLE ERROR IN RULING THAT THE
CASE OF ARTURO BORJAL, ET AL. V. COURT OF
APPEALS, ET AL. CITED BY RESPONDENTS IN THEIR
42

MOTION FOR RECONSIDERATION WARRANTED THE
REVERSAL OF THE CA DECISION DATED MARCH 18,
2008.
B. THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE REVERSIBLE ERROR IN RULING THAT THE
SUBJECT ARTICLES IN THE COMPLAINT FALL WITHIN
THE CONCEPT OF PRIVILEGED COMMUNICATION.
another person other than its author and the offended party. 9
The circulation of an allegedly libelous matter in a newspaper
is certainly sufficient publication. We are thus left with the
determination of the existence of the three remaining
elements of libel, namely: (1) the defamatory imputation; (2)
the identity of the person defamed; and (3) the existence of
malice.
Defamatory Imputation
C. THE HONORABLE COURT OF APPEALS COMMITTED

GRAVE REVERSIBLE ERROR IN RULING THAT
PETITIONER IS A PUBLIC OFFICIAL OR PUBLIC FIGURE. 6
Libel is defined in Article 353 of the Revised Penal Code,
which provides:
Art. 353. Definition of Libel. A libel is a public and malicious
imputation of a crime, or of a vice or defect, real or imaginary,
or any act, omission, condition, status, or circumstance
tending to cause the dishonor, discredit, or contempt of a
natural or juridical person, or to blacken the memory of one
who is dead.
Based on this definition, this Court has held that four
elements constitute the crime of libel, namely (a) defamatory
imputation tending to cause dishonor, discredit or contempt;
(b) malice, either in law or in fact; (c) publication; and (d)
identifiability of the person defamed.7
Despite being defined in the Revised Penal Code, libel can
also be instituted, like in the case at bar, as a purely civil
action, the cause of action for which is provided by Article 33
of the Civil Code, which provides:
Article 33. In cases of defamation, fraud, and physical
injuries, a civil action for damages, entirely separate and
distinct from the criminal action, may be brought by the
injured party. Such civil action shall proceed independently of
the criminal prosecution, and shall require only a
preponderance of evidence.
The above elements of libel were adopted as well in a purely
civil action for damages. As held by this Court in GMA
Network, Inc. v. Bustos8:
Defamation, which includes libel and slander, means the

offense of injuring a person's character, fame or reputation
through false and malicious statements. It is that which tends
to injure reputation or to diminish esteem, respect, goodwill
or confidence in the plaintiff, or to excite derogatory feelings
or opinions about the plaintiff. It is the publication of anything
that is injurious to the good name or reputation of another or
tends to bring him into disrepute. 10 In determining whether
certain utterances are defamatory, the words used are to be
construed in their entirety and taken in their plain, natural and
ordinary meaning, as they would naturally be understood by
persons hearing (or reading, as in libel) them, unless it
appears that they were used and understood in another
sense.11
In order to fully appreciate whether the subject articles are, in
fact, defamatory, an analysis thereof is in order. The following
are what have been referred to as the subject articles:
Manila Chronicle
Issue Date (Author)
Title
Exhibit
10 November 1993
"Yuchengko
joins
forces with Kokoy"
A, A-1 to A-5
"RCBC probed for

violating CB rules"
B, B-1 to B-2
"RCBC called to SEC";

subtitled "Yuchengco
Bank
defies
government order"
C, C-1 to C-3
"Alcorn, RCBC execs

own guilt"
D, D-1 to D-4
"Bank runs and RCBC

free loans"
E, E-1 to E-2
"RCBC
F, F-1 to F-3
(no by-line)
12 November 1993
(no by-line)
15 November 1993
(no by-line)
An award of damages under the premises presupposes the

commission of an act amounting to defamatory imputation or
libel, which, in turn, presupposes malice. Libel is the public
and malicious imputation to another of a discreditable act or
condition tending to cause the dishonor, discredit, or
contempt of a natural or juridical person. Liability for libel
attaches present the following elements: (a) an allegation or
imputation of a discreditable act or condition concerning
another; (b) publication of the imputation; (c) identity of the
person defamed; and (d) existence of malice.
Of these four elements, the most apparent in the case at bar
would be the publication of the alleged imputation. Libel is
published not only when it is widely circulated, but also when
it is made known or brought to the attention or notice of
16 November 1993
(Donna Gatdula)
22 November 1993
(Raul Valino)
23 November 1993
case
bugs
43

(Raul Valino)
Bangko Sentral"
5 December 1993
"The
Battle
Oriental"
Yuchengco is both a director (chairman) officer, stockholder,

and a related interest of RCBC.
for
G, G-1 to G-4
(Rodney P. Diola)
In two of the subject articles, respondents allegedly accused

and labeled Yuchengco as a Marcos crony, who took
advantage of his relationship with the former President to
gain unwarranted benefits:
Yuchengco joins forces with Kokoy12
Alfonso Yuchengco, a Marcos crony who wants to takeover
the ownership and management of the highly profitable
Oriental Petroleum Minerals Corp. (OMPC), has tied up with
Marcos brother-in-law Benjamin "Kokoy" Romualdez through
two of his sons, records at the securities and Exchange
Commission (SEC) showed yesterday.
Kokoys two sons, Benjamin Philip Gomez Romualdez, 32,
and Ferdinand Martin G. Romualdez, 29, are now members
of the board of the debt-ridden and heavily losing Benguet
Corp., a company taken over by Marcos during his
dictatorship, but which was sequestered at the start of
President Aquinos term.
xxxx
Violating the DOSRI rule is a criminal offense. The Bangko
Sentral official stressed. "I believe that that is tantamount, not
only to cheating the depositor, but also robbing the bank of its
clients money."
"If Bangko Sentral does not act decisively on this matter," the
official asked "what will prevent the other banks from
resorting to this kind of transactions to enrich their owners
and enable them to acquire shares of stock from other
companies?"
The interest-free loan controversy also involves Traders
Royal Bank (TRB), a sequestered bank, owned by Roberto
Benedicto, a Marcos crony.
xxxx
The deal could be from one crony to another since
Yuchengco is very much associated with the Marcoses and
the Romualdezes, a source opined.
Yuchengco owns Benguet Corp., which is heavily losing
since he joined the Company as Chairman in 1989.
xxxx
xxxx
Observers said they believed the elections of the Romualdez

sons officially confirmed suspicions that the Marcos and
Romualdez clans really owned Benguet.
Since Benguet is encountering all kinds of financial problems,

losses and overdue debts, observers say they fear that
Oriental may also suffer the same fate when and should
Yuchengco and his partners assume management of OMPC.
Benguets former president, Jaime Ongpin, employed by the

company for 10 years before he was named finance
secretary by then President Aquino, committed suicide after
being accused of being a Marcos-Romualdez crony.
Yuchengco Bank under CB probe13
xxxx
The official said the case was recently brought to Bangko
Sentrals attention by an RCBC creditor who felt he was
being cheated by the bank through interest-free loans
granted to related interests.
Under the interest-free loan scheme, Yuchengco was able to
own OMPC shares of Piedras since they were the same
shares RCBC financed and which were turned over to the
bank as payment for the loan.
The Central Bank official said that Bangko Sentral is now
determining whether RCBC violated the rule on loans to
directors, officers, stockholders and related interests
(DOSRI).
Already, it was noted the Oriental shares sold on the stock

market are weakening, and stock observers say this could be
attributed to the planned entry into the company of
Yuchengco, Leonardo Siguion-Reyna and their minority
partners.
In another of the subject articles, respondents allegedly
insinuated that Yuchengco induced others to disobey the
lawful orders of the Securities and Exchange Commission
(SEC):
Alcorn, RCBC execs own guilt14
Two officials of Alcorn Petroleum and Minerals Corporation
(AMPC) and Rizal Commercial Banking Corporation (RCBC)
admitted before the Securities and Exchange Commission
(SEC) yesterday that they ignored the SEC order
commanding them to process all Alcorn shares in the name
of R. Coyiuto Securities Inc. and its investor clients such as
Oriental Petroleum and Minerals Corporation (OMPC).
xxxx
44

RCBC is owned by Alfonso Yuchengco, chairman of the debtridden and heavily-losing Benguet Corp. He also owns Great
Pacific Life Insurance Co., whose employees are on strike
because of the companys refusal to grant them better
salaries and benefits.
xxxx
SEC insiders said that while Monreal and Ricalde should be
punished for disobeying a lawful order from the SEC, people
who masterminded the APMC order should also be penalized
once proven guilty.
xxxx
Some observers said the APMC order to RCBC could be a
ploy to prevent Robert Coyiuto, Jr., chairman and president
of OPMC, from retaining his majority control of Oriental, and
a scheme to put on the board members of the Yuchengco
company.
In fact, when Yuchengco created his own OPMC "board of
directors," he appointed Ricalde as corporate secretary,
OPMC officials pointed out.
"In our opinion," observers following the OPMC
developments stated, this is a clear and simple case of
criminal conspiracy whose perpetrators must be meted the
harshest punishment to prevent corporate thieves from
making a mockery of the law and from illegally taking over
corporations which they do not own in the first place."
Yuchengco further presented the following articles which
allegedly accused him of inducing Rizal Commercial Banking
Corporation (RCBC) to violate the provisions of the General
Banking Act on Directors, Officers, stockholders, and Related
Interest (DOSRI) loans:
Bank runs and RCBC free loans15
The Bank runs that devastated the economy in the recent
past were, first and foremost, instigated by rumors that bank
owners were, themselves, using the publics money to
promote their own businesses and interests in violation of
Central Bank rules and regulations.
xxxx
Now here comes Rizal Commercial Banking Corporation
(RCBC) being charged with engaging in unsound banking by
lending an interest-free loan of P101 million to one company,
Piedras Petroleum Corporation, which Marcos crony Roberto
Benedicto had surrendered to the Presidential Commission
on Good Government (PCGG).
xxxx
What would happen if all the other banks resort to this kind of
lending activity, giving away loans without interest? The
entire banking system would certainly be compromised.

The owners or RCBC, therefore, should not be too liberal
with their depositors money. They should also consider what
fatal effects such a practice could inflict on the very system
where RCBC operates. The country, at this time, cannot
afford another series of bank runs, nor a run at RCBC.
RCBC case bugs Bangko Sentral16
xxxx
The P101 million interest-free loan to Piedras is of national
interest for not just one reason alone.
First, the money involved came from the depositors, and not
from the pockets of Yuchengco.
Second, banking rules dictate that a bank must be prudent in
lending out its clients money, so that its financial viability
must never be put in question.
Third, the money lent to a borrower must never end up in the
pocket of the owner of the bank.
Fourth, such a practice could lead to a bank run, which the
economy cannot afford at this time, even if the run is
confined to just one bank.
Yuchengco further claims that the following article, in labeling
him as a "corporate raider," implies that he is seeking to profit
from something he did not work for:
The Battle for Oriental17
Ledesma says Coyiuto will not wilt from Yuchengcos fabled
financial power. Robert has a lot of friends that will help him
fend off a raider like Yuchengco, says Ledesma.
xxxx
Ledesma of OPMC says that even if Coyiuto loses in the bid,
hell still remain a very significant player in OPMC given his
substantial personal holdings and proxies in the company.
Coyiutos investment in OPMC is now valued at more than a
billion pesos compared to the Yuchengco block which, the
Coyiuto group points out, has only minimal investments.
Thats our moral ascendancy over their group. Coyiuto
virtually made Oriental what it is today unlike Yuchengco who
is just getting into the act now because Oriental has become
an attractive cash cow says Ledesma.
War of Families
The fight for control of Oriental Petroleum gains particular
poignancy given the long history of feuding between the
families of Yuchengco and Coyiuto. Their families were bitter
rivals in the insurance business way back in the seventies.
45

The Yuchengcos own the Malayan Group of Insurance
Companies while the Coyiutos used to control Pioneer
Insurance. That rivalry seems to have come full circle with
their battle in Oriental Petroleum.
Pomento says the best arrangement would have been a
modus vivendi between the two groups to stop their quarrel
and work instead for the interest of the company. But given
the bad blood that exists between the two families, that might
be a difficult proposition, he says.
The trial court and the Court of Appeals are in agreement that
the above articles contain defamatory imputations. Even the
Amended Decision of the Court of Appeals, wherein the
appellate court reversed itself and held that respondents
were not liable for damages, did not modify its earlier ruling
affirming the defamatory character of the imputations in the
above articles. The Court of Appeals merely reversed itself
on account of the allegedly privileged nature of the articles,
which goes into the element of malice. Malice, as an element
of libel, and the defenses affecting the existence of the same
shall be discussed later.
In arguing that the subject articles are not really derogatory,
respondent Cabrera explains that the word "crony" was more
or less accepted to describe a big businessman or close
associate of the late President Marcos, and its use in the
column was meant only to supply the perspective as to the
figure or subject involved in the news story. Respondent
Valino further claimed that after consulting several
dictionaries as to the meaning of the word "crony," he did not
come across a definition describing the word to mean
someone who is a recipient of any undeserving or special
favor from anyone.
We are not swayed by the explanations of respondents
Cabrera and Valino. In determining the defamatory character
of words used, the explanation of the respondent should not
prevail over what the utterances (or writing) convey to an
ordinary listener (or reader).18 Furthermore, as held by this
Court in United States v. Sotto19:
who was the recipient of special and/or undeserved favors

from the late President Marcos due to a special closeness to
the latter. This finding, which was upheld by the Court of
Appeals in its original Decision and was not tackled in the
Amended Decision, is even supported by one of the subject
articles. In particular, the 10 November 1993 article marked
as Exhibit A mentioned that Benguets former president,
Jaime Ongpin, committed suicide after being accused of
being a Marcos-Romualdez crony.20 This statement highlights
the disgrace respondents wanted to associate with the term
"crony," which was used to describe Yuchengco in the very
same article.
Even a cursory reading of the subject articles would show the
intention of the writers to injure the reputation, credit and
virtue of Yuchengco and expose him to public hatred,
discredit, contempt and ridicule. The indirect manner in which
the articles attributed the insults to Yuchengco (e.g., "the
money involved came from depositors, and not from
Yuchengco") does not lessen the culpability of the writers and
publishers thereof, but instead makes the defamatory
imputations even more effective. Words calculated to induce
suspicion are sometimes more effective to destroy reputation
than false charges directly made. Ironical and metaphorical
language is a favored vehicle for slander. 21
In sum, this Court upholds the ruling of the trial court and the
Court of Appeals that the subject articles contain defamatory
imputations. All of the following imputations: (1) the labeling
of Yuchengco as a Marcos crony, who took advantage of his
relationship with the former President to gain unwarranted
benefits; (2) the insinuations that Yuchengco induced others
to disobey the lawful orders of SEC; (3) the portrayal of
Yuchengco as an unfair and uncaring employer due to the
strike staged by the employees of Grepalife; (4) the
accusation that he induced RCBC to violate the provisions of
the General Banking Act on DOSRI loans; and (5) the
tagging of Yuchengco as a "corporate raider" seeking to profit
from something he did not work for, all exposed Yuchengco
to public contempt and ridicule, for they imputed to him a
condition that was dishonorable.
[F]or the purpose of determining the meaning of any

publication alleged to be libelous "that construction must be
adopted which will give to the matter such a meaning as is
natural and obvious in the plain and ordinary sense in which
the public would naturally understand what was uttered. The
published matter alleged to be libelous must be construed as
a whole. In applying these rules to the language of an alleged
libel, the court will disregard any subtle or ingenious
explanation offered by the publisher on being called to
account. The whole question being the effect the publication
had upon the minds of the readers, and they not having been
assisted by the offered explanation in reading the article, it
comes too late to have the effect of removing the sting, if any
there be, from the word used in the publication." (Emphasis
supplied.)
Identification
In finding that the phrase "Marcos crony" is derogatory, the

trial court took judicial notice of the fact that the said phrase,
as understood in Philippine context, refers to an individual
The owners or RCBC, therefore, should not be too liberal

with their depositors money. They should also consider what
fatal effects such a practice could inflict on the very system
Defamatory words must refer to an ascertained or

ascertainable person, and that person must be the plaintiff.
Statements are not libelous unless they refer to an
ascertained or ascertainable person.22 However, the
obnoxious writing need not mention the libeled party by
name. It is sufficient if it is shown that the offended party is
the person meant or alluded to.23
In the case at bar, all but one of the subject articles explicitly
mention the name of petitioner Yuchengco. The lone article,
which does not mention Yuchengco at all, "Bank runs &
RCBC free loans,"24 nevertheless chided the owners of
RCBC:
46
where RCBC operates. The country, at this time, cannot

afford another series of bank runs, nor a run at RCBC. 25
defamatory imputation, where there is no showing of a good

intention or justifiable motive for making such imputation.
Identifying Yuchengco in said article by name was, however,

not necessary, since the other subject articles, published a
few days before and after this one, had already referred to
Yuchengco as the owner of RCBC, sometimes explicitly
("Benguet started to bleed in 1989, the year Yuchengco, who
owns Rizal Commercial Banking Corp. [RCBC], took over as
chairman of the company"26), and sometimes implicitly ("the
money involved came from depositors, and not from
Yuchengco"). While the defamation of a large group does not
give rise to a cause of action on the part of an individual, this
is subject to exception when it can be shown that he is the
target of the defamatory matter. 27 This Court therefore finds
that Yuchengco was clearly identified as the libeled party in
the subject defamatory imputations.
The exceptions provided in Article 354 are also known as

qualifiedly privileged communications. The enumeration
under said article is, however, not an exclusive list of
qualifiedly
privileged
communications
since
fair
commentaries on matters of public interest are likewise
privileged.33 They are known as qualifiedly privileged
communications, since they are merely exceptions to the
general rule requiring proof of actual malice in order that a
defamatory imputation may be held actionable. In other
words, defamatory imputations written or uttered during any
of the three classes of qualifiedly privileged communications
enumerated above (1) a private communication made by
any person to another in the performance of any legal, moral
or social duty; (2) a fair and true report, made in good faith,
without any comments or remarks, of any judicial, legislative
or other official proceedings which are not of confidential
nature, or of any statement, report or speech delivered in
said proceedings, or of any other act performed by public
officers in the exercise of their functions; and (3) fair
commentaries on matters of public interest may still be
considered actionable if actual malice is proven. This is in
contrast with absolutely privileged communications, wherein
the imputations are not actionable, even if attended by actual
malice:
Malice
Malice connotes ill will or spite and speaks not in response to
duty but merely to injure the reputation of the person
defamed, and implies an intention to do ulterior and
unjustifiable harm.28 It is present when it is shown that the
author of the libelous remarks made such remarks with
knowledge that it was false or with reckless disregard as to
the truth or falsity thereof.29
Malice, however, does not necessarily have to be proven.
There are two types of malice malice in law and malice in
fact.30 Malice in law is a presumption of law. It dispenses with
the proof of malice when words that raise the presumption
are shown to have been uttered. It is also known as
constructive malice, legal malice, or implied malice.31 On the
other hand, malice in fact is a positive desire and intention to
annoy and injure. It may denote that the defendant was
actuated by ill will or personal spite. It is also called express
malice, actual malice, real malice, true malice, or particular
malice.32
In this jurisdiction, malice in law is provided in Article 354 of
the Revised Penal Code, which also enumerates exceptions
thereto:
Art. 354. Requirement of publicity. - Every defamatory
imputation is presumed to be malicious, even if it be true, if
no good intention and justifiable motive for making it is
shown, except in the following cases:
1. A private communication made by any person to another in
the performance of any legal, moral or social duty; and
2. A fair and true report, made in good faith, without any
comments or remarks, of any judicial, legislative or other
official proceedings which are not of confidential nature, or of
any statement, report or speech delivered in said
proceedings, or of any other act performed by public officers
in the exercise of their functions.
There is, thus, a presumption of malice in the case of every
A communication is said to be absolutely privileged when it is

not actionable, even if its author has acted in bad faith. This
class includes statements made by members of Congress in
the discharge of their functions as such, official
communications made by public officers in the performance
of their duties, and allegations or statements made by the
parties or their counsel in their pleadings or motions or during
the hearing of judicial proceedings, as well as the answers
given by witnesses in reply to questions propounded to them,
in the course of said proceedings, provided that said
allegations or statements are relevant to the issues, and the
answers are responsive or pertinent to the questions
propounded to said witnesses. Upon the other hand,
conditionally or qualifiedly privileged communications are
those which, although containing defamatory imputations,
would not be actionable unless made with malice or bad
faith.34
In the case at bar, both the trial court and the Court of
Appeals found that the publication of the subject articles was
attended by actual malice:
In the instant case, there is preponderance of evidence
showing that there exists malice in fact in the writing and
publication of the subject libelous articles.
As correctly found by the trial court, [petitioner] was able to
show that [respondents] were animated by a desire to inflict
unjustifiable harm on his reputation as shown by the timing
and frequency of the publication of the defamatory articles.
Further, as previously stated, [respondents] failed to show
that they had any good intention and justifiable motive for
composing and publishing the vicious and malicious

accusations against [petitioner].
Moreover, [respondents] published or caused the publication
of the subject defamatory articles with reckless disregard as
to the truth or falsity thereof. As previously stated, there is no
proof that the contents of the subject articles are true or that
the respondents exercised a reasonable degree of care
before publishing the same. [Respondents] failed to present
evidence showing that they verified the truth of any of the
subject articles, especially in light of the categorical denial by
[petitioner] of the accusations made against him.
[Respondents] did not exercise reasonable degree of care or
good faith efforts to arrive at the truth before publishing the
subject defamatory articles. [Respondents] did not present
any competent evidence to establish the truth of their
allegations against [petitioner]. There was no showing that
[respondents] made any attempt to talk to [petitioner] to verify
the statements contained in the defamatory articles,
especially considering the gravity of the accusations made
against [petitioner]. At the very least, [respondents] should
have exercised efforts to talk to [petitioner] to clarify the
issues and get his side. [Respondents] failure to verify the
truth of the information from [petitioner] himself is in itself an
evidence of their lack of bona fide efforts to verify the
accuracy of her information.
The incessant publication of the defamatory articles attacking
the honor and reputation of [petitioner] is also proof of
[respondents] malicious scheme to malign and defame the
name, honor and reputation of [petitioner]. As earlier pointed
out, in a span of one (1) month, [respondents] wrote and
published and/or caused the publication of seven (7) libelous
articles against [petitioner] attacking his honor and reputation
as a distinguished businessman, philanthropist, his political
inclination, and as an employer in his insurance company. In
fact, the presence of malice is made more evident by
[respondents] baseless and uncalled for attack on the
person of [petitioner] as an employer. As aptly noted by the
trial court in the assailed Decision:
"Also in one of the articles, herein plaintiff was portrayed as
an unfair and uncaring employer due to the strike staged by
the employees of Grepalife suggesting that it was the
[petitioner] who was the cause, and of insinuating that if
[petitioners] group takes over control of Oriental, it would
experience the same labor problem as in Grepalife. The
Court finds that [respondents] failed to render an unbiased
and fair report as to the real cause of the strike except to lay
the blame to [petitioner], without stating, much less
describing, his participation thereon, knowing fully well that
Grepalife is an entity distinct from the plaintiff. In other words,
the labor policies implemented by Grepalife as regards its
employees are obviously not that of Yuchengco."
Such baseless and malicious accusation of [respondents] on
[petitioner] only proves the intention of the [respondents] in
publishing the defamatory articles was not to present an
unbiased report on current issues but to launch a personal
attack on the very person of [petitioner].
47
As earlier explained, as correctly found by the trial court,
even the timing of the publication of these subject articles is
highly suspicious inasmuch as the subject libelous articles
came out in the Manila Chronicle, a newspaper owned and
under the control of [respondent] Coyiuto, around November
to December of 1993, a couple of months prior to the
January stockholders meeting of Oriental Corporation. From
this, it is logical to conclude that the publication of the subject
defamatory articles defaming the good name and reputation
of [petitioner] is but a part of [a] grand scheme to create a
negative image of [petitioner] so as to negatively affect
[petitioners] credibility to the public, more particularly, to the
then stockholders of Oriental Corporation. Worth noting also
is the fact that the subject articles did not only portray
[petitioner] in a bad light. Curiously, in these articles,
[respondent] Coyiuto, a known rival of [petitioner], was
portrayed as the underdog, the "David" and [petitioner] as the
"Goliath" in their battle for control over Oriental Corporation.
This does not escape the Courts attention.
These circumstances clearly indicate the presence of actual
malice on the part of [respondents] in the publication of the
subject libelous articles.35 (Emphases supplied.)
When the Court of Appeals granted the Motion for
Reconsideration, it did not touch upon its earlier finding of
actual malice on the part of respondents in publishing the
subject articles. Instead, the Court of Appeals merely held
that the subject articles were fair commentaries on matters of
public interest, and thus fell within the scope of the third type
of qualifiedly privileged communications.
This was a glaring error on the part of the Court of Appeals.
As discussed above, whereas there is an absolute bar to an
action in the case of absolutely privileged communication, the
same is not true with respect to qualifiedly privileged
communication, wherein the law merely raises a prima facie
presumption in favor of the occasion. In the former, the
freedom from liability is absolute, regardless of the existence
of actual malice, as contrasted with the freedom in the latter,
where it is conditioned on the want or absence of actual
malice. Conditionally or qualifiedly privileged communications
are actionable when made with actual malice.36
When malice in fact is proven, assertions and proofs that the
libelous articles are qualifiedly privileged communications are
futile, since being qualifiedly privileged communications
merely prevents the presumption of malice from attaching to
a defamatory imputation.
Neither is there any reason for this Court to reverse the
findings of the trial court and the Court of Appeals that there
was actual malice on the part of the respondents. As held by
the courts a quo, Yuchengco was able to show by the
attendant circumstances that respondents were animated by
a desire to inflict unjustifiable harm on his reputation, as
shown by the timing and frequency of the publication of the
defamatory articles. The portrayal of then Chronicle
Publishing Chairman Coyiuto as an underdog and his rival
Yuchengco as the greedy Goliath in their battle for control
over Oriental Corporation, taken with the timing of the

publication of these subject articles a couple of months prior
to the January stockholders meeting of Oriental Corporation,
clearly indicate that the articles constituted an orchestrated
attack to undermine the reputation of Yuchengco.
Furthermore, respondents were shown to have acted with
reckless disregard as to the truth or falsity of the articles they
published, when they were unable to rebut the categorical
denial by Yuchengco of the accusations made against him,
and his allegation that he was not approached by
respondents for his side of the stories before the publication
thereof. Respondents failure to present evidence showing
that they verified the truth of any of the subject articles is fatal
to their cause. In In re: Emil P. Jurado, 37 this Court ruled that
categorical denials of the truth of allegations in a publication
place the burden upon the party publishing it, either of
proving the truth of the imputations or of showing that the
same was an honest mistake or error committed despite
good efforts to arrive at the truth. There is actual malice when
there is either (1) knowledge of the publications falsity; or (2)
reckless disregard of whether the contents of the publication
were false or not.38 Failure to even get the side of Yuchengco
in the published articles clearly constituted reckless disregard
of the truth or falsity of said articles.
Finally, even if we assume for the sake of argument that
actual malice was not proven in the case at bar, we
nevertheless cannot adhere to the finding of the Court of
Appeals in the Amended Decision that the subject articles
were fair commentaries on matters of public interest, and
thus fell within the scope of the third type of qualifiedly
privileged communications.
In Philippine Journalists, Inc. (Peoples Journal) v. Theonen, 39
this Court adopted the pronouncement in the United States
Decision in Gertz v. Robert Welsch, Inc.40 that, in order to be
considered as fair commentaries on matters of public
interest, the individual to whom the defamatory articles were
imputed should either be a public officer or a public figure:
In Borjal v. Court of Appeals, we stated that "the enumeration
under Art. 354 is not an exclusive list of qualifiedly privileged
communications since fair commentaries on matters of public
interest are likewise privileged. We stated that the doctrine of
fair commentaries means "that while in general every
discreditable imputation publicly made is deemed false,
because every man is presumed innocent until his guilt is
judicially proved, and every false imputation is deemed
malicious, nevertheless, when the discreditable imputation is
directed against a public person in his public capacity, it is
not necessarily actionable. In order that such discreditable
imputation to a public official may be actionable, it must
either be a false allegation of fact or a comment based on a
false supposition."
Again, this argument is unavailing to the petitioners. As we
said, the respondent is a private individual, and not a public
official or public figure. We are persuaded by the reasoning of
the United States Supreme Court in Gertz v. Robert Welch,
Inc., [418 U. S. 323 (1974)] that a newspaper or broadcaster
publishing defamatory falsehoods about an individual who is
neither a public official nor a public figure may not claim a
48
constitutional privilege against liability, for injury inflicted,
even if the falsehood arose in a discussion of public interest.
(Emphasis supplied.)
Thus, in trying to prove that the subject articles delved on
matters concerning public interest, the Court of Appeals
insisted that Yuchengco was a public official or public figure,
who "must not be too thin-skinned with reference to comment
upon his official acts."41 The Court of Appeals then noted that
Yuchengco was, at the time of the Amended Decision,
appointed as a Presidential Adviser on Foreign Affairs with
Cabinet rank, and proceeded to enumerate 42 the public
positions held by Yuchengco through the years.
However, an examination of the subject articles reveals that
the allegations therein pertain to Yuchengcos private
business endeavors and do not refer to his duties, functions
and responsibilities as a Philippine Ambassador to China and
Japan, or to any of the other public positions he occupied. A
topic or story should not be considered a matter of public
interest by the mere fact that the person involved is a public
officer, unless the said topic or story relates to his functions
as such. Assuming a public office is not tantamount to
completely abdicating ones right to privacy. Therefore, for
the purpose of determining whether or not a topic is a matter
of public interest, Yuchengco cannot be considered a public
officer.
Neither is Yuchengco a public figure. The above case
Philippine Journalists continues to cite the US case Gertz in
describing who is a public figure:
More commonly, those classed as public figures have thrust
themselves to the forefront of particular public controversies
in order to influence the resolution of the issues involved. In
either event, they invite attention and comment. Third, this
would impose an additional difficulty on trial court judges to
decide which publications address issues of "general
interest" and which do not. Even if the foregoing generalities
do not obtain in every instance, the communications media
are entitled to act on the assumption that public officials and
public figures have voluntarily exposed themselves to
increased risk of injury from defamatory falsehood
concerning them. No such assumption is justified with
respect to a private individual. He has not accepted public
office or assumed an "influential role in ordering society."
(Curtis Publishing Co. v. Butts, 388 U.S., at 164) He has
relinquished no part of his interest in the protection of his own
good name, and consequently he has a more compelling call
on the courts for redress of injury inflicted by defamatory
falsehood. Thus, private individuals are not only more
vulnerable to injury than public officials and public figures;
they are also more deserving of recovery. 43 (Emphasis
supplied.)
The records in the case at bar do not disclose any instance
wherein Yuchengco had voluntarily thrust himself to the
forefront of particular public controversies in order to
influence the resolution of the issues involved. He cannot,
therefore, be considered a public figure. Since Yuchengco,
the person defamed in the subject articles, is neither as
49

public officer nor a public figure, said articles cannot be
considered as qualifiedly privileged communications even if
they deal with matters of public concern.
In view of the foregoing, this Court is constrained to grant the
instant Petition and reinstate the Decision of the trial court, as
previously affirmed by the Court of Appeals in its original
Decision. This Court, however, finds the award of damages in
the total amount of One Hundred Million Pesos by the trial
court to be rather excessive given the circumstances. This
Court, thus, further resolves to reduce the award of
damages, as follows:
1. The damages for which Chronicle Publishing, Neil H. Cruz,
Ernesto Tolentino, Noel Cabrera, Thelma San Juan, Gerry
Zaragoza, Donna Gatdula, Raul Valino and Rodney Diola
shall be jointly and severally liable under the first cause of
action shall be reduced as follows:
a. The amount of moral damages shall be reduced from Ten
Million Pesos (P10,000,000.00) to Two Million Pesos
(P2,000,000.00); and
b. the amount of Five Hundred Thousand Pesos

(P500,000.00) as exemplary damages;
2. On the Second Cause of Action, ordering defendants
Roberto Coyuito, Jr. and Chronicle Publishing to pay plaintiff
Yuchengco, jointly and severally:
a. the amount of Twenty-Five Million Pesos (P25,000,000.00)
as moral damages; and
b. the amount of Ten Million Pesos (P10,000,000.00) as
exemplary damages;
3. On the Third Cause of Action, ordering all defendants to
pay plaintiff Yuchengco, jointly and severally, the amount of
One Million Pesos (P1,000,000.00) as attorneys fee and
legal costs.
Costs against respondents.
SO ORDERED.
b. The amount of exemplary damages shall be reduced from

Ten Million Pesos (P10,000,000.00) to Five Hundred
Thousand Pesos (P500,000.00);
2. The damages for which Roberto Coyuito, Jr. and Chronicle

Publishing shall be jointly and severally liable under the
second cause of action shall be reduced as follows:
WE CONCUR:
a. The amount of moral damages shall be reduced from Fifty

Million Pesos (P50,000,000.00) to Twenty-Five Million Pesos
(P25,000,000.00); and
Associate Justice
b. The amount of exemplary damages shall be reduced from

Thirty Million Pesos (P30,000,000.00) Ten Million Pesos
(P10,000,000.00).
WHEREFORE, the Petition is PARTIALLY GRANTED. The
Amended Decision of the Court of Appeals in CA-G.R. CV
No. 76995 dated 28 August 2008, which reversed on Motion
for Reconsideration the 18 March 2008 Decision of the same
Court is hereby REVERSED and SET ASIDE. The Decision
of the Regional Trial Court of Makati City in Civil Case No.
94-1114 dated 8 November 2002 finding herein respondents
liable for damages, is hereby REINSTATED, but shall be
MODIFIED to read as follows:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered as follows:
1. On the First Cause of Action, ordering defendants
Chronicle Publishing, Neil H. Cruz, Ernesto Tolentino, Noel
Cabrera, Thelma San Juan, Gerry Zaragoza, Donna Gatdula,
Raul Valino and Rodney Diola to pay plaintiff Yuchengco,
jointly and severally:
a. the amount of Two Million Pesos (P2,000,000.00) as moral
damages; and
Associate Justice
RENATO C. CORONA
Chairperson
PRESBITERO J. VELASCO, JR.
Associate Justice
DIOSDADO M. PERALTA
Associate Justice
ATT E S TAT I O N
writer of the opinion of the Courts Division.
RENATO C. CORONA
Associate Justice
Chairperson, Third Division
C ERTI F I CATI O N
Pursuant to Section 13, Article VIII of the Constitution, and
50

the Division Chairpersons Attestation, it is hereby certified
that the conclusions in the above Decision were reached in
opinion of the Courts Division.
69.
Madrona, Sr. v. Rosal, G.R. No. 39120, 21 November
1991, 204 SCRA 1, 8.
18
REYNATO S. PUNO
19
38 Phil. 666, 672-673 (1918).
Chief Justice
20
Rollo, p. 63.
21
United States v. O'Connell, 37 Phil. 767, 773 (1918).
Footnotes
22
Penned by Associate Justice Amelita G. Tolentino with

Associate Justices Isaias P. Dicdican and Japar B.
Dimaampao, concurring; rollo, pp. 53-62.
23
Quisumbing v. Lopez, 96 Phil. 510, 513 (1955).
24
Exhibit D; rollo, p. 67.
25
Id.
26
Exhibit A; rollo, p. 63.
Corpus v. Cuaderno, Sr., G.R. No. L-16969, 30 April 1966,

16 SCRA 807, 816.
Penned by Associate Justice Agustin S. Dizon with

Associate Justices Amelita G. Tolentino and Lucenito N.
Tagle, concurring; rollo, pp. 195-248.
2
Rollo, pp. 114-121.
Id. at 160.
Id. at 247.
28
United States v. Caete, 38 Phil. 253, 264 (1918).
Id. at 348-349.
29
Vasquez v. Court of Appeals, 373 Phil. 238, 254 (1999).
People v. Monton, 116 Phil. 1116, 1120-1121 (1962).
30
Lawson v. Hicks, 38, Ala. 279.
G.R. No. 146848, 17 October 2006, 504 SCRA 638, 650651.

8
United States v. Ubiana, 1 Phil. 471, 473 (1902).
MVRS Publications, Inc., v. Islamic Da'wah Council of the

Philippines, Inc., 444 Phil. 230, 241 (2004).
10
Lacsa v. Intermediate Appellate Court, G.R. No. L-74907,

23 May 1988, 161 SCRA 427, 432.
11
Manila Chronicle, 10 November 1993, Exhibit A; rollo, p.

63.
12
Manila Chronicle, 12 November 1993, Exhibit B; rollo, p.

64.
MVRS Publications, Inc., v. Islamic Da'wah Council of the

Philippines, Inc., supra note 10.
27
Leonardo P. Reyes, Fundamentals of Libel Law, p. 15

(2007), citing William v. Hicks Printing Co., 150 N.W. 183,
159 Wis. 90, Ajouelo v. Auto-Soler Co., 6 S.E.2d 415, 61 Ga
App. 216, Astruc v. Star Co., C.C.N.Y. 182 F. 705.
31
Id., citing Cook v. East Shore Newspapers, 327 Ill. App.

559, 64 N.E.2d 751; Freeman v. Mills, 97 Cal. App.2d 161,
217 P.2d 687; Scott-Burr Stores Corporation v. Edgar, 177
So. 766, 18 Miss. 486; Davis v. Hearst, 116 P. 530, 160 Cal.
143; Id.; Swain v. Oakey, 129 S.E. 151, 190 N.C. 133.
32
33
Borjal v. Court of Appeals, 361 Phil. 1, 19 (1999).
34
Orfanel v. People, 141 Phil. 519, 523-524 (1969).
35
Rollo, pp. 234-236.
36
Orfanel v. People, supra note 34.
37
313 Phil. 119, 169 (1995).
13
Manila Chronicle, 12 November 1993, Exhibit D; rollo, p.

66.
14
Manila Chronicle, 22 November 1993, Exhibit E; rollo, p.

67.
38
Manila Chronicle, 23 November 1993, Exhibit F; rollo, p.

68.
39
15
16
17
Manila Chronicle, 23 November 1993, Exhibit G, rollo, p.
Villanueva v. Philippine Daily Inquirer, G.R. No. 164437, 15

May 2009.
G.R. No. 143372, 13 December 2005, 477 SCRA 482.
51

40
418 U.S. 323 (1974).
41
Rollo, p. 55.
1. Presidential Adviser on Foreign Affairs with Cabinet

Rank (January 30, 2004-present)

SUPREME COURT
Manila
FIRST DIVISION
42
2. Philippine Permanent Representative to the United

Nations with the rank of Ambassador (November 2001December 2002);
G.R. No. L-60151 June 24, 1983

SALVADOR L. BUDLONG, in his capacity as Acting Third
Assistant City Fiscal, City of Tagbilaran, petitioner,
vs.
3. Presidential Special Envoy to China, Japan and Korea

(2001);
4. Presidential Assistant on APEC Matters with Cabinet Rank
(1998-2000);
5. Ambassador Extraordinary and Plenipotentiary of the
Republic of the Philippines to the Peoples Republic of China
(PROC) (1986-1988); and
6. Chairman, Council of Private Sector Advisors to the
Philippine Government on the Spratlys Issue (Marine and
Archipelagic Development Policy Group (1995-1998). (Rollo,
p. 56.)
Philippine Journalists, Inc. (Peoples Journal) v. Theonen,
supra note 38 at 497.
43
HONORABLE AQUILES T. APALISOK, in his capacity as

Acting City Judge, City Court, Branch II, City of
Tagbilaran, and CAMILIO PUYO Y GALAGAR,
respondents.
Salvador Budlong for petitioner.
Alexander Lim for respondents.
GUTIERREZ, JR., J.:

This petition for certiorari asks for the setting aside of the
orders dated February 11, 1982 and February 19, 1982
issued by the respondent City Court of Tagbilaran City in
Criminal Case no. 1838.
In his capacity as Acting Third Assistant City Fiscal of
Tagbilaran, the petitioner filed an information before the
respondent court charging private respondent Camilo Puyon
y Galagar with the crime of serious physical injuries through
reckless imprudence. The case was docketed as Criminal
Case No. 1838.
During the scheduled arraignment, on February 4, 1982, the
accused pleaded guilty to the crime charged. Immediately
after the plea the respondent judge rendered judgment in
open court and sentenced the accused to suffer thirty (30)
days of imprisonment and to pay the costs. No civil liability
was imposed. At this same hearing, the accused manifested
his intention to avail of the provisions of Presidential Decree
No. 968, the Probation Law, as amended. Acting on the
manifestation, the respondent court gave the counsel of the
accused five (5) days within which to file the petition for
probation. In the meantime, the accused by recognizance
was entrusted to the custody of a police officer of the
Tagbilaran City Integrated National Police.
On February 5, 1982, the petitioner filed an Ex-Parte Motion
To Set Case for Hearing for the reception of evidence to
prove the civil liability of the accused. (Rollo. Annex "C",
Petition, p. 10)
On February 11, 1982, the respondent court issued an order
denying the aforesaid motion. The order stated:
52

An ex-parte motion to set the above entitled case for hearing
having been filed by Acting Asst. City Fiscal Salvador
Budlong, and the Court finding said motion to be filed out of
time considering that the accused has already Med an
application for Probation, the Court hereby denies said
motion and considers the case as closed and terminated.
(Rollo, p. 11)
On February 18, 1982, the petitioner flied a motion for
reconsideration of the February 11, 1982 order.
On February 19, 1982, the respondent court issued an order
denying the aforesaid motion for reconsideration. The order
stated:
A motion for reconsideration of the Court's Order dated 11
February 1982 having been filed by Asst. City Fiscal
Salvador Budlong, the Court hereby denies said motion on
the ground that under Sec. 4 of P.D. No. 1257 amending P.D.
No. 968, the Court after it shall have convicted and
sentenced a defendant and upon his application for probation
suspend (sic) the execution of said sentence and place the
defendant on probation. The prosecution should have asked
leave to prove the civil liability of the defendant right before it
rendered its judgment not after for by doing so, would in
effect nullify the Order of suspension of the sentence and
would defeat the very purpose of the Probation Law. (Rollo,
p. 16)
The Acting Third Assistant City Fiscal decided to file this
petition. On April 14, 1982, we issued a resolution which
reads:
G.R. no. 60151 [Formerly UDK-5358] (Salvador L. Budlong,
etc. vs. Hon. Aquiles T. Apalisok, etc., et al.). - Let this case
be DOCKETED in this Court. After deliberating on the petition
filed in this case; by the petitioner fiscal, the Court Resolved:
(a) to CONSIDER the People of the Philippines as impleaded
in this case; and (b) without giving due course thereto to
require the private respondent and the Solicitor General to
COMMENT thereon (not to file a motion to dismiss) within ten
(10) days from notice hereof.
The Solicitor General filed his comment as directed. The
private respondent, however, decided not to file any
comment. In a manifestation dated October 8, 1982, the
counsel for accused Camilo Puyo y Galagar stated that the
private respondent was submitting the matter to the sound
discretion of this Court without any comments. In the light of
this manifestation, we have given due course to the petition.
The petitioner contends:
a. THAT RESPONDENT JUDGE, GRAVELY ERRED IN
HOLDING THAT THE EX-PARTE MOTION TO SET CASE
FOR HEARING WAS FILED OUT OF TIME CONSIDERING
THAT THE ACCUSED HAS ALREADY FILED AN
APPLICATION FOR PROBATION.
b. THAT, RESPONDENT JUDGE AGAIN GRAVELY ERRED
IN DENYING THE MOTION FOR RECONSIDERATION ON

THE GROUND THAT UNDER SECTION I OF
PRESIDENTIAL DECREE NO. 1257, AMENDING SECTION
4 OF PRESIDENTIAL DECREE NO. 968, THE COURT
AFTER IT SHALL HAVE CONVICTED AND SENTENCED A
DEFENDANT AND UPON HIS APPLICATION FOR
PROBATION SUSPENDS THE EXECUTION OF SAID
SENTENCE AND PLACE THE DEFENDANT ON
PROBATION.
c. THAT, RESPONDENT JUDGE LIKEWISE ERRED AND
GRAVELY ABUSED HIS DISCRETION WHEN IN THE
SAME ORDER (Annex 'F') DENYING THE MOTION FOR
RECONSIDERATION HE OPINED AND HELD THAT "THE
PROSECUTION SHOULD HAVE ASKED LEAVE TO PROVE
THE CIVIL LIABILITY OF THE DEFENDANT BEFORE IT
RENDERED ITS JUDGMENT NOT AFTER FOR BY DOING
SO WOULD IN EFFECT NULLIFY THE ORDER OF
SUSPENSION OF THE SENTENCE AND WOULD DEFEAT
THE VERY PURPOSE OF THE PROBATION LAW."
The petition is meritorious.
Considering the circumstances of the instant case, the
February 11, 1982 order of the respondent court denying the
motion for hearing on the civil liability of the accused was
improper.
Probation is defined by Section 3 of Presidential Decree No.
968, the Probation Law as "a disposition under which a
defendant, after conviction and sentence, is released subject
to conditions imposed by the court and to the supervision of a
probation officer."
The "conviction and sentence" clause of the statutory
definition clearly signifies that probation affects only the
criminal aspect of the case.
During the regional seminars on the Probation Law
conducted for judges, fiscals, and leaders of the bar, one of
the lecturers stated:
... The court convicts and sentences the defendant but the
execution of the sentence, whether it imposes a term of
imprisonment or a fine only, (Sec. 4, PD 968) is suspended
(Sec. 4, PD 968) and the defendant is released on probation.
Probation implies that during a period of tune fixed by the
court the defendant is provided with individualized
community-based treatment including conditions he is
required by the court to fulfills for his correction and
rehabilitation which might be less probable if he were to
serve a prison sentence, and for this purpose is placed under
the actual supervision and visitation of a probation officer.
(Preamble, Secs. 2, 4, 10, 13 and 14, PD 968) If the
defendant violates any of the conditions of his probation, the
court may revoke his probation and order him to serve the
sentence originally imposed. (Sec. 15, PD 968) Upon the
other hand, if he fulfills the terms and conditions of his
probation, he shall be discharged by the court after the
period of probation, whereupon the case against him shall be
deemed terminated. His final discharge shag operate to
53

restore to him all civil rights lost or suspended as a result of
his conviction and to fully discharge his liability for any fine
imposed as to the offense for which probation was granted.
(Sec- 16, PD 968) However, he shall continue to be obliged
to satisfy the civil liability resulting from the crime committed
by him. [Art. 113, Revised Penal Code]. (Cecilio C. Pe
"Petition, Investigation, and Grant or Denial of Probation:
Their Legal Effects" published in 5 Journal of the Integrated
Bar of the Philippines No. 5, pp. 372-376.)
The extinction and survival of civil liability are governed by
Chapter Three, Title Five, Book One of the Revised Penal
Code as follows:
ART. 112. Extinction of
established in articles 100,
shall be extinguished in
obligations, in accordance
Law.
civil
101,
the
with
liability. Civil Liability

102, and 103 of this Code
same manner as other
the provisions of the Civil
ART. 113. Obligation to satisfy civil liability. Except in case

of extinction of his civil liability as provided in the next
preceding article, the offender shall continue to be obliged to
satisfy the civil liability resulting from the crime committed by
him, notwithstanding the fact that he has served his sentence
consisting of deprivation of liberty or other rights, or has not
been required to serve the same by reason of amnesty,
pardon, commutation of sentence, or any other reason.
In Veloso v. Carmona (77 SCRA 450) we had a situation
similar to the present case where the accused pleaded guilty
during the arraignment. The judge rendered a decision in
open court and convicted the accused of slight physical
injuries, sentencing him to pay a fine of P25.00 and to suffer
public censure but with no adjudication regarding civil liability.
We stated:
xxx xxx xxx
It may further be observed that respondent Judge should
have made a finding as to the civil liability of the accused
considering the allegation in the complaint that the offended
party suffered "contusion with abrasions on the left cheek
and left axillary fold, which injuries will require medical
treatment from 7 to 9 days barring complication."
and warned and admonished the Judge to be more careful in
the performance of his duties in the future.
In Morta Sr. v. Alvizo, Jr. (101 SCRA 221) another judge was
similarly admonished for the following error:
We hold that Judge Alvizo overlooked the elementary rule
that every person criminally liable for a felony is also civilly
liable. When a criminal action is instituted, the civil action for
the civil liability arising from the offense is impliedly instituted
with the criminal action. unless the offended party expressly
waives the civil action or reserves his right to institute it
separately (Art. 100, Revised Penal Code and sec. 1, Rule
111, Rules of Court).
After Magayones had pleaded guilty, Judge Alvizo should

have set the case for hearing for the reception of the
offended party's evidence on the civil liability (Veloso vs.
Carmona, Adm. Matter No. 502-MJ, June 30, 1977, 77 SCRA
450).
It was alleged in the criminal complaint that the victim
suffered injuries which would require medical attendance for
a period of seven to ten days and incapacitate him for
performing his customary labor for the same period.
According to Fidel Morta Sr., his son, the aggrieved party,
had to be hospitalized for the treatment of his injuries.
The civil liability may be claimed in the criminal action even if
there is no specific allegation of damages in the complaint or
information (Roa vs. de la Cruz, 107 Phil. 8; People and
Manuel vs. Coloma, 105 Phil. 1287; People vs. Celorico, 67
Phil. 185; People vs. Ursua, 60 Phil. 252)
If under Article 113 of the Revised Penal Code, the obligation
to satisfy civil liability continues notwithstanding service of
sentence or non-service due to amnesty, pardon,
commutation of sentence, or any other reason we fail to see
what led the respondent judge to rule that an application for
probation should have an opposite effect insofar as
determination of civil liability is concerned. It could not have
been delay because the motion was filed on the day after the
judgment of conviction was rendered in open court right after
the plea of guilty and the manifestation that the accused was
applying for probation.
It bears repeating that "an offense as a general rule causes
two (2) classes of injuries the first is the social injury
produced by the criminal act which is sought to be repaired
thru the imposition of the corresponding penalty and the and
the second is the personal injury caused to the victim of the
crime which injury is sought to be compensated thru
indemnity, which is civil in nature." (Ramos v. Gonong, 72
SCRA 559). As early as 1913, this Court in U.S. v. Heery (25
Phil. 600) made it clear that the civil liability of the accused is
not part of the penalty for the crime committed. It is personal
to the victim. Hence, extinguishing such civil liability in the
manner followed by the respondent judge who summarily
denied the motion and declared the case "closed and
terminated" constitutes a violation of the victim's basic
constitutional guaranty of due process.
The general rule is that "when a criminal action is instituted,
the civil action for the civil liability arising from the offense is
impliedly instituted with the criminal action, unless the
offended party expressly waives the civil action or reserves
his right to institute it separately." (Article 100, Revised Penal
Code and Section 1, Rule 111, Rules of Court) In the instant
case, the civil action was more than impliedly instituted
because the information specifically alleged that there were
physical injuries inflicted on the victim which would require
medical attendance for a period of forty (40) days and would
incapacitate the victim from performing his customary labor
for the same period of time to the damage and prejudice of
the latter and that the same would be "in the amount to be
proved during the trial of the case." (Information, Annex " A "
54

to petition, Rollo, p. 8).
Section 1 of Presidential Decree No. 1257 amending Section
4 of Presidential Decree No. 968, the Probation Law of 1976,
provides:
SECTION 1. Section 4 of Presidential Decree No. 968,
otherwise known as the Probation Law of 1976, is hereby
amended to read as follows:
SEC. 4. Grant of probation. Subject to the provisions of
this Decree, the court may, after it shall have convicted and
sentenced a defendant but before he begins to serve his
sentence and upon his application, suspend the execution of
said sentence and place the defendant on probation for such
period and upon such terms and conditions as it may deem
best.
The prosecuting officer concerned shall be notified by the
court of the filing of the application for probation and he may
submit his comment on such application within ten days from
receipt of the notification.
Probation may be granted whether the sentence imposes a
term of imprisonment or a fine with subsidiary imprisonment
in case of insolvency. An application for probation shall be
filed with the trial court, with notice to the appellate court if an
appeal has been taken from the sentence of conviction. The
filing of the application shall be deemed a waiver of the right
to appeal, or the automatic withdrawal of a pending appeal.
In the latter case, however, if the application is filed on or
after the date of the judgment of the appellate court, said
application shag be acted upon by the trial court on the basis
of the judgment of the appellate court.
An order granting or denying probation shall not be
appealable.
The above provision of the Probation Law clearly provides
only for the suspension of the sentence imposed on the
accused by virtue of his application for probation. It has
absolutely no bearing on civil liability. There is no legal basis
for the respondent court's conclusion that a hearing to prove
the civil liability of the accused under the circumstances of
the case, "... would in effect nullify the order of suspension of
the sentence and would defeat the very purpose of the
Probation Law." The civil action for the civil liability is
separate and distinct from the criminal action. (People and
Manuel vs. Coloma, 105 Phil. 1287; Roa vs. De la Cruz, 107
Phil. 8; People vs. Sendaydiego, 81 SCRA 120).
As for the respondent court's conclusion that the motion to
set for hearing the civil liability of the accused, if granted "...
would defeat the very purpose of the Probation Law," we
agree with the Solicitor General's observation:
As regards the trial court's pronouncement that said motion, if
granted, would defeat the very purpose of the Probation Law,
suffice it to state that this reasoning is both specious and
devoid of merit. Nowhere in the Probation Law may the
respondent judge's conclusion find source. To be specific,

Section 2 of PD 968 bears restating,
Sec. 2. Purpose. This Decree shall be interpreted so as to:
(a) promote the correction and rehabilitation of an offender by
providing him with individualized treatment.
(b) provide an opportunity for the reformation of a penitent
offender which might be less probable if he were to serve a
prison sentence; and
(c) prevent the commission of offenses.
The admission of evidence on civil liability, in this case, will
not certainly defeat the end and purpose of the probation law.
Its denial would on the other hand, violate the complainant's
right to due process. (Rollo, pp. 42- 43)
In his keynote, address during the 1977 Regional Seminars
on Probation delivered at the Philippine International
Convention Center, President Ferdinand E. Marcos stated:
A year ago, on July 24, 1976, we restored human dignity to
those who may have lost it by legal prescription, by enacting
the privilege of probation to adult offenders. This is the
decree that we are now studying, 'The Probation Law of
1976.' So by these steps, we placed ourselves on the side of
the liberal thinkers in penology and in law, as well as the
humanists in their compassionate attitude not only to
prisoners and offenders but to man at large.
We broke away from the archaic institutional corrections
system founded on the blind concepts of retribution and
punishment. In their place, we introduced humanitarian
concern for the first offender, to distinguish the crime from the
offender, and to save him from the corrosive effects of
imprisonment and the stigma of incarceration.
All of us subscribe to the philosophy of probation, of
rehabilitation, and of compassion. We go along to a certain
extent with the philosophy which is embodied in all of these
steps that the community to a certain extent is responsible for
crime and its causation, that individuals can change and
deserve a second chance, and that it is for the greater good
of society that offenders not be summarily eliminated from
productive life but brought back to its fold in the quickest and
least traumatic way possible."
At the same time, the President warned against the multiple
probation system or the "revolving door process" whereby
repeaters or recidivists and dangerous offenders manage to
enter the probation system. The President added:
... Another weakness is the indiscriminate grant of probation
whatever be the crime, whatever be the past criminal record
of the offender, and whatever be the penalty, short of life term
and capital sentence. This non-selectivity of offense, penalty
and disregard of prior record permit undue risks which we in
the Philippines cannot afford to take in favor of the
55

rehabilitation of the offender without tilting the balance
against the community at the other end of the probation
continuum.

SUPREME COURT
Manila
THIRD DIVISION
xxx xxx xxx

G.R. No. 152720
... The common cause of misunderstanding and lack of
coordination among the five pillars of the criminal justice
system in other countries is their failure to involve the judges,
the prosecutors, and the practitioners in the orientation
seminars and conferences on probation as a law and as a
system.
The instant case provides another weakness continued
incomprehension by some of its implementors.
Probation has been with us for six (6) years but the statutory
concept and objectives, the selection criteria, and its many
other aspects, and the prescription for its success appear to
elude some judges charged with its implementation.
WHEREFORE, the instant petition is GRANTED. The
respondent court's orders dated February 11, 1982 and
February 19, 1982 respectively are hereby SET ASIDE. The
respondent court is ordered to set hearings on the civil
liability of the accused.
SO ORDERED.
Teehankee (Chairman), Melencio-Herrera, Plana, Vasquez
and Relova, JJ., concur.
February 17, 2005
SOLIDBANK CORPORATION, petitioner,

vs.
Spouses TEODULFO
respondents.
and
CARMEN
ARRIETA,
DECISION
PANGANIBAN, J.:
A banks gross negligence in dishonoring a well-funded
check, aggravated by its unreasonable delay in repairing the
error, calls for an award of moral and exemplary damages.
The resulting injury to the check writers reputation and
peace of mind needs to be recognized and compensated.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules
of Court, seeking to reverse and set aside the March 28,
2001 Decision2 and the February 5, 2002 Resolution 3 of the
Court of Appeals (CA) in CA-GR CV No. 55002. The assailed
Decision disposed as follows:
"WHEREFORE, the appeal is DISMISSED, with costs
against defendant-appellant."4
The CA denied reconsideration in its February 5, 2002
Resolution.
The Facts
The facts are summarized by the CA as follows:
"Carmen Arrieta is a bank depositor of Solidbank Corporation
under Checking Account No. 123-1996. On March 1990,
Carmen issued SBC Check No. 0293984 (Exh. A) in the
amount of P330.00 in the name of Lopues Department Store
in payment of her purchases from said store. When the
check was deposited by the store to its account, the same
was dishonored due to Account Closed (Exh. B) despite
the fact that at the time the check was presented for
payment, Carmens checking account was still active and
backed up by a deposit of P1,275.20.
"As a consequence of the checks dishonor, Lopues
Department Store sent a demand letter to Carmen (Exh. C)
threatening her with criminal prosecution unless she
redeemed the check within five (5) days. To avoid criminal
prosecution, Carmen paid P330.00 in cash to the store, plus
a surcharge of P33.00 for the bouncing check, or a total of
56

P363.00 (Exh. F).
"Thereupon, Carmen filed a complaint against Solidbank
Corporation for damages alleging that the bank, by its
carelessness and recklessness in certifying that her account
was closed despite the fact that it was still very much active
and sufficiently funded, had destroyed her good name and
reputation and prejudiced not only herself but also her family
in the form of mental anguish, sleepless nights, wounded
feelings and social humiliation. She prayed that she be
awarded moral and exemplary damages as well as attorneys
fees.
damages. It held that the banks wrongful act was the

proximate cause of Carmens moral suffering. The CA ruled
that the lack of malice and bad faith on the part of petitioner
did not suffice to exculpate the latter from liability; the banks
gross negligence amounted to a wilful act. The trial courts
award of exemplary damages and attorneys fees was
sustained in view of respondents entitlement to moral
damages.
Hence, this Petition.6
Issues
"In its answer, the bank claimed that Carmen, contrary to her
undertaking as a depositor, failed to maintain the required
balance of at least P1,000.00 on any day of the month.
Moreover, she did not handle her account in a manner
satisfactory to the bank. In view of her violations of the
general terms and conditions governing the establishment
and operation of a current account, Carmens account was
recommended for closure. In any event, the bank claimed
good faith in declaring her account closed since one of the
clerks, who substituted for the regular clerk, committed an
honest mistake when he thought that the subject account
was already closed when the ledger containing the said
account could not be found.
Petitioner raises the following issues for our consideration:
"After trial, the lower court rendered its decision holding that
Solidbank Corporation was grossly negligent in failing to
check whether or not Carmens account was still open and
viable at the time the transaction in question was made.
Hence, the bank was liable to Carmen for moral and
exemplary damages, as well as attorneys fees. It held that
the bank was remiss in its duty to treat Carmens account
with the highest degree of care, considering the fiduciary
nature of their relationship. The dispositive portion of the
decision reads:
The Courts Ruling
1awphi1 .nt
"WHEREFORE, the Court hereby renders judgment in favor

of the plaintiff as against the defendant-bank, and defendantbank is ordered to pay moral damages of P150,000.00;
exemplary damages of P50,000.00; and attorneys fees of
P20,000.00, plus costs.
SO ORDERED."5
Ruling of the Court of Appeals
The CA debunked the contention of the bank that the latter
was not liable. According to petitioner, the dishonor of the
check by reason of "Account Closed" was an honest mistake
of its employee. The appellate court held that the error
committed by the bank employee was imputable to the bank.
Banks are obliged to treat the accounts of their depositors
with meticulous care, regardless of the amount of the
deposit. Failing in this duty, petitioner was found grossly
negligent. The failure of the bank to immediately notify
Respondent Carmen Arrieta of its unilateral closure of her
account manifested bad faith, added the CA.
1awphi1 .nt
The appellate court likewise affirmed the award of moral
"I.
Whether or not x x x respondents are entitled to recovery of
moral and exemplary damages and attorneys fees.
"II.
Whether or not the award of moral and exemplary damages
and attorneys fees is excessive, arbitrary and contrary to
prevailing jurisprudence."7
The Petition is partly meritorious.

Main Issue:
Petitioners Liability for Damages
Petitioner contends that the award of moral damages was
erroneous because of the failure of Respondent Carmen to
establish that the dishonor of Check No. 0293984 on March
30, 1990 was the direct and only cause of the "social
humiliation, extreme mental anguish, sleepless nights, and
wounded feelings suffered by [her]." It referred to an
occasion fifteen days before, on March 15, 1990, during
which another check (Check No. 0293983) she had issued
had likewise been dishonored.
According to petitioner, highly illogical was her claim that
extreme mental anguish and social humiliation resulted from
the dishonor of Check No. 0293984, as she claimed none
from that of her prior Check No. 0293983, which had
allegedly been deposited by mistake by the payees wife.
Given the circumstances, petitioner adds that the dishonor of
the check -- subject of the present case -- did not really
cause respondent mental anguish, sleepless nights and
besmirched reputation; and that her institution of this case
was clearly motivated by opportunism.
We are not persuaded.
The fact that another check Carmen had issued was
previously dishonored does not necessarily imply that the
57

dishonor of a succeeding check can no longer cause moral
injury and personal hurt for which the aggrieved party may
claim damages. Such prior occurrence does not prove that
respondent does not have a good reputation that can be
besmirched.8
The reasons for and the circumstances surrounding the
previous issuance and eventual dishonor of Check No.
0293983 are totally separate -- the payee of the prior check
was different -- from that of Check No. 0293984, subject of
present case. Carmen had issued the earlier check to
accommodate a relative,9 and the succeeding one to pay for
goods purchased from Lopues Department Store. That she
might not have suffered damages as a result of the first
dishonored check does not necessarily hold true for the
second. In the light of sufficient evidence showing that she
indeed suffered damages as a result of the dishonor of
Check No. 0293984, petitioner may not be exonerated from
liability.
Case law10 lays out the following conditions for the award of
moral damages: (1) there is an injury -- whether physical,
mental or psychological -- clearly sustained by the claimant;
(2) the culpable act or omission is factually established; (3)
the wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant; and
(4) the award of damages is predicated on any of the cases
stated in Article 221911 of the Civil Code.
precedent.13 Clearly, had the bank accepted and honored the

check, Carmen would not have had to face the questions of
-- and explain her predicament to -- her office mates, her
daughters, and the leaders and members of her church.
Furthermore, the CA was in agreement with the trial court in
ruling that her injury arose from the gross negligence of
petitioner in dishonoring her well-funded check.
Unanimity of the CA and the trial court in their factual
ascertainment of this point bars us from supplanting their
finding and substituting it with our own. Settled is the doctrine
that the factual determinations of the lower courts are
conclusive and binding upon this Court. 14 Verily, the review of
cases brought before the Supreme Court from the Court of
Appeals is limited to errors of law. 15 None of the recognized
exceptions to this principle has been shown to exist.
Fourth, treating Carmens account as closed, merely because
the ledger could not be found was a reckless act that could
not simply be brushed off as an honest mistake. We have
repeatedly emphasized that the banking industry is
impressed with public interest. Consequently, the highest
degree of diligence is expected, and high standards of
integrity and performance are even required of it. By the
nature of its functions, a bank is under obligation to treat the
accounts of its depositors with meticulous care and always to
have in mind the fiduciary nature of its relationship with them.
16
In the instant case, all four requisites have been

established. First, these were the findings of the appellate
court: "Carmen Arrieta is a bank depositor of Solidbank
Corporation of long standing. She works with the Central
Negros Electric Cooperative, Inc. (CENECO), as an
executive secretary and later as department secretary. She is
a deaconess of the Christian Alliance Church in Bacolod City.
These are positions which no doubt elevate her social
standing in the community." Understandably -- and as
sufficiently proven by her testimony -- she suffered mental
anguish, serious anxiety, besmirched reputation, wounded
feelings and social humiliation; and she suffered thus when
the people she worked with -- her friends, her family and
even her daughters classmates -- learned and talked about
her bounced check.
l^vvphi1.net
Second, it is undisputed that the subject check was

adequately funded, but that petitioner wrongfully dishonored
it.
Third, Respondent Carmen was able to prove that
petitioners wrongful dishonor of her check was the proximate
cause of her embarrassment and humiliation in her
workplace, in her own home, and in the church where she
served as deaconess.
Proximate cause has been defined as "any cause which, in
natural and continuous sequence, unbroken by any efficient
intervening cause, produces the result complained of and
without which would not have occurred x x x." 12 It is
determined from the facts of each case upon combined
considerations of logic, common sense, policy and
Petitioners negligence here was so gross as to amount to a

wilful injury to Respondent Carmen. Article 21 of the Civil
Code states that "any person who wilfully causes loss or
injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the
damage." Further, Article 2219 provides for the recovery of
moral damages for acts referred to in the aforementioned
Article 21. Hence, the bank is liable for moral damages to
respondent.17
The foregoing notwithstanding, we find the sum of P150,000
awarded by the lower courts excessive. Moral damages are
not intended to enrich the complainant at the expense of the
defendant.18 Rather, these are awarded only to enable the
injured party to obtain "means, diversions or amusements"
that will serve to alleviate the moral suffering that resulted by
reason of the defendants culpable action. 19 The purpose of
such damages is essentially indemnity or reparation, not
punishment or correction.20 In other words, the award thereof
is aimed at a restoration within the limits of the possible, of
the spiritual status quo ante;21 therefore, it must always
reasonably approximate the extent of injury and be
proportional to the wrong committed.22
Accordingly, the award of moral damages must be reduced to
P20,000,23 an amount commensurate with the alleviation of
the suffering caused by the dishonored check that was
issued for the amount of P330.
The law allows the grant of exemplary damages to set an
example for the public good.24 The business of a bank is
58

affected with public interest; thus, it makes a sworn
profession of diligence and meticulousness in giving
irreproachable service.25 For this reason, the bank should
guard against injury attributable to negligence or bad faith on
its part.26 The banking sector must at all times maintain a high
level of meticulousness. The grant of exemplary damages is
justified27 by the initial carelessness of petitioner, aggravated
by its lack of promptness in repairing its error. It was only on
August 30, 1990, or a period of five months from the
erroneous dishonor of the check, when it wrote Lopues
Department Store a letter acknowledging the banks
mistake.28 In our view, however, the award of P50,000 is
excessive and should accordingly be reduced to P20,000.29
The award of attorneys fees in the amount of P20,000 is
proper, for respondents were compelled to litigate to protect
their rights.30
WHEREFORE, the Petition is PARTLY GRANTED and the
assailed Decision MODIFIED. Petitioners are ORDERED to
pay respondents P20,000 as moral damages, P20,000 as
exemplary damages, and P20,000 as attorneys fees.
United Coconut Planters Bank v. Ramos, 415 SCRA 596,

November 11, 2003; Cathay Pacific Airways, Ltd. v. Spouses
Vazquez, 399 SCRA 207, March 14, 2003; Citytrust Banking
Corporation v. Villanueva, 361 SCRA 446, July 19, 2001;
Expertravel and Tours, Inc. v. Court of Appeals, 309 SCRA
141, June 25, 1999.
10
Art. 2219. Moral damages may be recovered in the

following analogous cases:
11
(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
SO ORDERED.
(7) Libel, slander or any other form of defamation;
Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ.,

concur.
(8) Malicious prosecution;
Garcia, J., no part. Concurred in the assailed decision.
(9) Acts mentioned in Article 309;

(10) Acts and actions referred in articles 21, 26, 27, 28, 29,
30, 32, 34 and 35.
Footnotes
1
Rollo, pp. 14-37.
Annex "A" of Petition; id., pp. 38-49. First Division. Penned

by Justice Oswaldo D. Agcaoili and concurred in by Justices
Cancio C. Garcia (Division chairman and now a member of
this Court) and Elvi John S. Asuncion (member).
xxxxxxxxx
Pilipinas Bank v. Court of Appeals, 234 SCRA 435, 439,
July 25, 1994, per Puno, J.
12
Bank of the Philippine Islands v. Court of Appeals, 326

SCRA 641, February 29, 2000; Philippine Bank of Commerce
v. Court of Appeals, 269 SCRA 695, March 14, 1997 (citing
Sangco, Torts and Damages [1993], Vol. I, p. 8).
13
Annex "C" of Petition; id., p. 68.

Flores v. Uy, 368 SCRA 347, October 26, 2001;
Metropolitan Bank v. Wong, supra; Philippine National Bank
v. Court of Appeals, supra; Boneng v. People, 204 SCRA
252, March 4, 1999; Philippine Airlines, Inc. v. CA, 275 SCRA
621, July 17, 1997; Kierulf v. Court of Appeals, 336 Phil. 414,
March 13, 1997.
14
CA Decision, p. 11; id., p. 48.
CA Decision, pp. 1-3; id., pp. 38-40.
This case was deemed submitted for decision on June 18,

2003, upon this Courts receipt of petitioners Memorandum,
signed by Atty. Segundo Y. Chua. Respondents
Memorandum, signed by Atty. Romeo B. Esuerte, was
received by this Court on May 30, 2003.
6
Petitioners Memorandum, p. 3; rollo, p. 171.
See Simex International (Manila), Inc. v. Court of Appeals,

183 SCRA 360, March 19, 1990.
Philippine Banking Corporation v. Court of Appeals, 419

SCRA 61, January 13, 2004; Kierulf v. Court of Appeals,
supra.
15
Bank of the Philippine Islands v. Casa Montessori

Internationale, GR No. 149454, May 28, 2004.
16
See Brief for the Defendant-Appellant, p. 11; rollo, p. 60.
Metropolitan Bank v. Wong, 359 SCRA 608, June 26, 2001;

Prudential Bank v. CA, 384 Phil. 817, March 16, 2000; Cavite
Development Bank v. Lim, 324 SCRA 346, February 1, 2000;
17
59

Philippine National Bank v. Court of Appeals, 315 SCRA 309,
September 28, 1999; Metropolitan Bank and Trust Company
v. Court of Appeals, 237 SCRA 761, October 26, 1994.
Samson v. Bank of the Philippine Islands, 405 SCRA 607,
July 10, 2003; Flores v. Uy, supra; Philippine National Bank
v. Court of Appeals, supra.

SUPREME COURT
Manila
FIRST DIVISION
18
Quisumbing v. Manila Electric Company, 380 SCRA 195,

April 3, 2002.
19
G.R. No. 164703
May 4, 2010
ALLAN C. GO, doing business under the name and style

"ACG Express Liner," Petitioner,
vs.
Samson v. Bank of the Philippine Islands, supra; Flores v.

Uy, supra; Simex International (Manila), Inc. v. Court of
Appeals, supra.
20
21
Kierulf v. Court of Appeals, supra.
Makabali v. Court of Appeals, 157 SCRA 253, January 22,

1988.
22
Simex International (Manila), Inc. v. Court of Appeals,

supra; Guilatco v. City of Dagupan, 171 SCRA 382, March
21, 1989.
23
24
Article 2229, Civil Code.
Philippine Banking Corporation v. Court of Appeals, 419

SCRA 487, January 15, 2004; United Coconut Planters Bank
v. Ramos, 415 SCRA 596, November 11, 2003; Bank of the
Philippine Islands v. Court of Appeals, supra; Simex
International (Manila), Inc. v. Court of Appeals, supra.
25
26
Ibid.
Simex International (Manila), Inc. v. Court of Appeals,

supra.
27
28
Respondents Memorandum, p. 18; rollo, p. 147.
Cavite Development Bank v. Lim, supra; Prudential Bank v.

Court of Appeals, 328 SCRA 264, March 16, 2000.
29
Prudential Bank v. Court of Appeals, supra; Philippine

National Bank v. Court of Appeals, supra.
30
MORTIMER F. CORDERO, Respondent.

x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 164747
MORTIMER F. CORDERO, Petitioner,
vs.
ALLAN C. GO, doing business under the name and style
"ACG Express Liner," FELIPE M. LANDICHO and
VINCENT D. TECSON, Respondents.
DECISION
VILLARAMA, JR., J.:
For review is the Decision1 dated March 16, 2004 as modified
by the Resolution2 dated July 22, 2004 of the Court of
Appeals (CA) in CA-G.R. CV No. 69113, which affirmed with
modifications the Decision3 dated May 31, 2000 of the
Regional Trial Court (RTC) of Quezon City, Branch 85 in Civil
Case No. 98-35332.
The factual antecedents:
Sometime in 1996, Mortimer F. Cordero, Vice-President of
Pamana Marketing Corporation (Pamana), ventured into the
business of marketing inter-island passenger vessels. After
contacting various overseas fast ferry manufacturers from all
over the world, he came to meet Tony Robinson, an
Australian national based in Brisbane, Australia, who is the
Managing Director of Aluminium Fast Ferries Australia
(AFFA).
Between June and August 1997, Robinson signed
documents appointing Cordero as the exclusive distributor of
AFFA catamaran and other fast ferry vessels in the
Philippines. As such exclusive distributor, Cordero offered for
sale to prospective buyers the 25-meter Aluminium
Passenger catamaran known as the SEACAT 25.4
After negotiations with Felipe Landicho and Vincent Tecson,
lawyers of Allan C. Go who is the owner/operator of ACG
Express Liner of Cebu City, a single proprietorship, Cordero
was able to close a deal for the purchase of two (2) SEACAT

25 as evidenced by the Memorandum of Agreement dated
August 7, 1997.5 Accordingly, the parties executed
Shipbuilding Contract No. 7825 for one (1) high-speed
catamaran (SEACAT 25) for the price of US$1,465,512.00. 6
Per agreement between Robinson and Cordero, the latter
shall receive commissions totalling US$328,742.00, or
22.43% of the purchase price, from the sale of each vessel. 7
Cordero made two (2) trips to the AFFA Shipyard in Brisbane,
Australia, and on one (1) occasion even accompanied Go
and his family and Landicho, to monitor the progress of the
building of the vessel. He shouldered all the expenses for
airfare, food, hotel accommodations, transportation and
entertainment during these trips. He also spent for long
distance telephone calls to communicate regularly with
Robinson, Go, Tecson and Landicho.
However, Cordero later discovered that Go was dealing
directly with Robinson when he was informed by Dennis
Padua of Wartsila Philippines that Go was canvassing for a
second catamaran engine from their company which
provided the ship engine for the first SEACAT 25. Padua told
Cordero that Go instructed him to fax the requested quotation
of the second engine to the Park Royal Hotel in Brisbane
where Go was then staying. Cordero tried to contact Go and
Landicho to confirm the matter but they were nowhere to be
found, while Robinson refused to answer his calls. Cordero
immediately flew to Brisbane to clarify matters with Robinson,
only to find out that Go and Landicho were already there in
Brisbane negotiating for the sale of the second SEACAT 25.
Despite repeated follow-up calls, no explanation was given
by Robinson, Go, Landicho and Tecson who even made
Cordero believe there would be no further sale between
AFFA and ACG Express Liner.
In a handwritten letter dated June 24, 1998, Cordero
informed Go that such act of dealing directly with Robinson
violated his exclusive distributorship and demanded that they
respect the same, without prejudice to legal action against
him and Robinson should they fail to heed the same. 8
Corderos lawyer, Atty. Ernesto A. Tabujara, Jr. of ACCRA law
firm, also wrote ACG Express Liner assailing the fraudulent
actuations and misrepresentations committed by Go in
connivance with his lawyers (Landicho and Tecson) in breach
of Corderos exclusive distributorship appointment.9
Having been apprised of Corderos demand letter, Thyne &
Macartney, the lawyer of AFFA and Robinson, faxed a letter
to ACCRA law firm asserting that the appointment of Cordero
as AFFAs distributor was for the purpose of one (1)
transaction only, that is, the purchase of a high-speed
catamaran vessel by ACG Express Liner in August 1997. The
letter further stated that Cordero was offered the exclusive
distributorship, the terms of which were contained in a draft
agreement which Cordero allegedly failed to return to AFFA
within a reasonable time, and which offer is already being
revoked by AFFA.10
As to the response of Go, Landicho and Tecson to his
demand letter, Cordero testified before the trial court that on
the same day, Landicho, acting on behalf of Go, talked to him
60
over the telephone and offered to amicably settle their
dispute. Tecson and Landicho offered to convince Go to
honor his exclusive distributorship with AFFA and to purchase
all vessels for ACG Express Liner through him for the next
three (3) years. In an effort to amicably settle the matter,
Landicho, acting in behalf of Go, set up a meeting with
Cordero on June 29, 1998 between 9:30 p.m. to 10:30 p.m.
at the Mactan Island Resort Hotel lobby. On said date,
however, only Landicho and Tecson came and no reason
was given for Gos absence. Tecson and Landicho proposed
that they will convince Go to pay him US$1,500,000.00 on
the condition that they will get a cut of 20%. And so it was
agreed between him, Landicho and Tecson that the latter
would give him a weekly status report and that the matter will
be settled in three (3) to four (4) weeks and neither party will
file an action against each other until a final report on the
proposed settlement. No such report was made by either
Tecson or Landicho who, it turned out, had no intention to do
so and were just buying time as the catamaran vessel was
due to arrive from Australia. Cordero then filed a complaint
with the Bureau of Customs (BOC) to prohibit the entry of
SEACAT 25 from Australia based on misdeclaration and
undervaluation. Consequently, an Alert Order was issued by
Acting BOC Commissioner Nelson Tan for the vessel which
in fact arrived on July 17, 1998. Cordero claimed that Go and
Robinson had conspired to undervalue the vessel by around
US$500,000.00.11
On August 21, 1998, Cordero instituted Civil Case No. 9835332 seeking to hold Robinson, Go, Tecson and Landicho
liable jointly and solidarily for conniving and conspiring
together in violating his exclusive distributorship in bad faith
and wanton disregard of his rights, thus depriving him of his
due commissions (balance of unpaid commission from the
sale of the first vessel in the amount of US$31,522.01 and
unpaid commission for the sale of the second vessel in the
amount of US$328,742.00) and causing him actual, moral
and exemplary damages, including P800,000.00
representing expenses for airplane travel to Australia,
telecommunications bills and entertainment, on account of
AFFAs untimely cancellation of the exclusive distributorship
agreement. Cordero also prayed for the award of moral and
exemplary damages, as well as attorneys fees and litigation
expenses.12
Robinson filed a motion to dismiss grounded on lack of
jurisdiction over his person and failure to state a cause of
action, asserting that there was no act committed in violation
of the distributorship agreement. Said motion was denied by
the trial court on December 20, 1999. Robinson was likewise
declared in default for failure to file his answer within the
period granted by the trial court.13 As for Go and Tecson, their
motion to dismiss based on failure to state a cause of action
was likewise denied by the trial court on February 26, 1999. 14
Subsequently, they filed their Answer denying that they have
anything to do with the termination by AFFA of Corderos
authority as exclusive distributor in the Philippines. On the
contrary, they averred it was Cordero who stopped
communicating with Go in connection with the purchase of
the first vessel from AFFA and was not doing his part in
making progress status reports and airing the clients
grievances to his principal, AFFA, such that Go engaged the
61

services of Landicho to fly to Australia and attend to the
documents needed for shipment of the vessel to the
Philippines. As to the inquiry for the Philippine price for a
Wartsila ship engine for AFFAs other on-going vessel
construction, this was merely requested by Robinson but
which Cordero misinterpreted as indication that Go was
buying a second vessel. Moreover, Landicho and Tecson had
no transaction whatsoever with Cordero who had no
document to show any such shipbuilding contract. As to the
supposed meeting to settle their dispute, this was due to the
malicious demand of Cordero to be given US$3,000,000 as
otherwise he will expose in the media the alleged
undervaluation of the vessel with the BOC. In any case,
Cordero no longer had cause of action for his commission for
the sale of the second vessel under the memorandum of
agreement dated August 7, 1997 considering the termination
of his authority by AFFAs lawyers on June 26, 1998.15
MILLION TWO HUNDRED NINETY ONE THOUSAND

THREE HUNDRED FIFTY TWO AND FORTY THREE
CENTAVOS (P16,291,352.43) as actual damages with legal
interest from 25 June 1998 until fully paid;
2. On the Second Cause of Action, the sum of ONE MILLION
PESOS (P1,000,000.00) as moral damages;
3. On the Third Cause of Action, the sum of ONE MILLION
PESOS (P1,000,000.00) as exemplary damages; and
4. On the Fourth Cause of Action, the sum of ONE MILLION
PESOS (P1,000,000.00) as attorneys fees;
Costs against the defendants.
SO ORDERED.18
Pre-trial was reset twice to afford the parties opportunity to

reach a settlement. However, on motion filed by Cordero
through counsel, the trial court reconsidered the resetting of
the pre-trial to another date for the third time as requested by
Go, Tecson and Landicho, in view of the latters failure to
appear at the pre-trial conference on January 7, 2000 despite
due notice. The trial court further confirmed that said
defendants misled the trial court in moving for continuance
during the pre-trial conference held on December 10, 1999,
purportedly to go abroad for the holiday season when in truth
a Hold-Departure Order had been issued against them. 16
Accordingly, plaintiff Cordero was allowed to present his
evidence ex parte.
Corderos testimony regarding his transaction with
defendants Go, Landicho and Tecson, and the latters offer of
settlement, was corroborated by his counsel who also took
the witness stand. Further, documentary evidence including
photographs taken of the June 29, 1998 meeting with
Landicho, Tecson and Atty. Tabujara at Shangri-las Mactan
Island Resort, photographs taken in Brisbane showing
Cordero, Go with his family, Robinson and Landicho, and
also various documents, communications, vouchers and
bank transmittals were presented to prove that: (1) Cordero
was properly authorized and actually transacted in behalf of
AFFA as exclusive distributor in the Philippines; (2) Cordero
spent considerable sums of money in pursuance of the
contract with Go and ACG Express Liner; and (3) AFFA
through Robinson paid Cordero his commissions from each
scheduled payment made by Go for the first SEACAT 25
purchased from AFFA pursuant to Shipbuilding Contract No.
7825.17
On May 31, 2000, the trial court rendered its decision, the
dispositive portion of which reads as follows:
WHEREFORE, PREMISES CONSIDERED, judgment is
hereby rendered in favor of Plaintiff and against defendants
Allan C. Go, Tony Robinson, Felipe Landicho, and Vincent
Tecson. As prayed for, defendants are hereby ordered to pay
Plaintiff jointly and solidarily, the following:
1. On the First Cause of Action, the sum total of SIXTEEN
Go, Robinson, Landicho and Tecson filed a motion for new

trial, claiming that they have been unduly prejudiced by the
negligence of their counsel who was allegedly unaware that
the pre-trial conference on January 28, 2000 did not push
through for the reason that Cordero was then allowed to
present his evidence ex-parte, as he had assumed that the
said ex-parte hearing was being conducted only against
Robinson who was earlier declared in default. 19 In its Order
dated July 28, 2000, the trial court denied the motion for new
trial.20 In the same order, Corderos motion for execution
pending appeal was granted. Defendants moved to
reconsider the said order insofar as it granted the motion for
execution pending appeal.21 On August 8, 2000, they filed a
notice of appeal.22
On August 18, 2000, the trial court denied the motion for
reconsideration and on August 21, 2000, the writ of execution
pending appeal was issued.23 Meanwhile, the notice of
appeal was denied for failure to pay the appellate court
docket fee within the prescribed period. 24 Defendants filed a
motion for reconsideration and to transmit the case records
to the CA.25
On September 29, 2000, the CA issued a temporary
restraining order at the instance of defendants in the
certiorari case they filed with said court docketed as CA-G.R.
SP No. 60354 questioning the execution orders issued by the
trial court. Consequently, as requested by the defendants,
the trial court recalled and set aside its November 6, 2000
Order granting the ex-parte motion for release of garnished
funds, cancelled the scheduled public auction sale of levied
real properties, and denied the ex-parte Motion for BreakOpen Order and Ex-Parte Motion for Encashment of Check
filed by Cordero.26 On November 29, 2000, the trial court
reconsidered its Order dated August 21, 2000 denying due
course to the notice of appeal and forthwith directed the
transmittal of the records to the CA.27
On January 29, 2001, the CA rendered judgment granting the
petition for certiorari in CA-G.R. SP No. 60354 and setting
aside the trial courts orders of execution pending appeal.
Cordero appealed the said judgment in a petition for review
62

filed with this Court which was eventually denied under our
Decision dated September 17, 2002.28
On March 16, 2004, the CA in CA-G.R. CV No. 69113
affirmed the trial court (1) in allowing Cordero to present his
evidence ex-parte after the unjustified failure of appellants
(Go, Tecson and Landicho) to appear at the pre-trial
conference despite due notice; (2) in finding that it was
Cordero and not Pamana who was appointed by AFFA as the
exclusive distributor in the Philippines of its SEACAT 25 and
other fast ferry vessels, which is not limited to the sale of one
(1) such catamaran to Go on August 7, 1997; and (3) in
finding that Cordero is entitled to a commission per vessel
sold for AFFA through his efforts in the amount equivalent to
22.43% of the price of each vessel or US$328,742.00, and
with payments of US$297,219.91 having been made to
Cordero, there remained a balance of US$31,522.09 still due
to him. The CA sustained the trial court in ruling that Cordero
is entitled to damages for the breach of his exclusive
distributorship agreement with AFFA. However, it held that
Cordero is entitled only to commission for the sale of the first
catamaran obtained through his efforts with the remaining
unpaid sum of US$31,522.09 or P1,355,449.90 (on the basis
of US$1.00=P43.00 rate) with interest at 6% per annum from
the time of the filing of the complaint until the same is fully
paid. As to the P800,000.00 representing expenses incurred
by Cordero for transportation, phone bills, entertainment,
food and lodging, the CA declared there was no basis for
such award, the same being the logical and necessary
consequences of the exclusive distributorship agreement
which are normal in the field of sales and distribution, and the
expenditures having redounded to the benefit of the
distributor (Cordero).
On the amounts awarded by the trial court as moral and
exemplary damages, as well as attorneys fees, the CA
reduced the same to P500,000.00, P300,000.00 and
P50,000.00, respectively. Appellants were held solidarily
liable pursuant to the provisions of Article 1207 in relation to
Articles 19, 20, 21 and 22 of the New Civil Code. The CA
further ruled that no error was committed by the trial court in
denying their motion for new trial, which said court found to
be pro forma and did not raise any substantial matter as to
warrant the conduct of another trial.
By Resolution dated July 22, 2004, the CA denied the
motions for reconsideration respectively filed by the
appellants and appellee, and affirmed the Decision dated
March 16, 2004 with the sole modification that the legal
interest of 6% per annum shall start to run from June 24,
1998 until the finality of the decision, and the rate of 12%
interest per annum shall apply once the decision becomes
final and executory until the judgment has been satisfied.
The case before us is a consolidation of the petitions for
review under Rule 45 separately filed by Go (G.R. No.
164703) and Cordero (G.R. No. 164747) in which petitioners
raised the following arguments:
G.R. No. 164703
(Petitioner Go)
I. THE HONORABLE COURT OF APPEALS
DISREGARDED THE RULES OF COURT AND PERTINENT
JURISPRUDENCE AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN NOT RULING THAT THE RESPONDENT
IS NOT THE REAL PARTY-IN-INTEREST AND IN NOT
DISMISSING THE INSTANT CASE ON THE GROUND OF
LACK OF CAUSE OF ACTION;
II. THE HONORABLE COURT OF APPEALS IGNORED THE
LAW AND JURISPRUDENCE AND ACTED WITH GRAVE
ABUSE OF DISCRETION IN HOLDING HEREIN
PETITIONER RESPONSIBLE FOR THE BREACH IN THE
ALLEGED EXCLUSIVE DISTRIBUTORSHIP AGREEMENT
WITH ALUMINIUM FAST FERRIES AUSTRALIA;
III. THE HONORABLE APPELLATE COURT MISAPPLIED
THE LAW AND ACTED WITH GRAVE ABUSE OF
DISCRETION IN FINDING PETITIONER LIABLE IN
SOLIDUM WITH THE CO-DEFENDANTS WITH RESPECT
TO THE CLAIMS OF RESPONDENT;
IV. THE HONORABLE COURT OF APPEALS MISAPPLIED
LAW AND JURISPRUDENCE AND GRAVELY ABUSED ITS
DISCRETION WHEN IT FOUND PETITIONER LIABLE FOR
UNPAID COMMISSIONS, DAMAGES, ATTORNEYS FEES,
AND LITIGATION EXPENSES; and
V. THE HONORABLE APPELLATE COURT ACTED
CONTRARY TO LAW AND JURISPRUDENCE AND
GRAVELY ABUSED ITS DISCRETION WHEN IT
EFFECTIVELY DEPRIVED HEREIN PETITIONER OF HIS
RIGHT TO DUE PROCESS BY AFFIRMING THE LOWER
COURTS DENIAL OF PETITIONERS MOTION FOR NEW
TRIAL.29
G.R. No. 164747
(Petitioner Cordero)
I.
THE COURT OF APPEALS ERRED IN NOT SUSTAINING
THE JUDGMENT OF THE TRIAL COURT AWARDING
PETITIONER ACTUAL DAMAGES FOR HIS COMMISSION
FOR THE SALE OF THE SECOND VESSEL, SINCE THERE
IS SUFFICIENT EVIDENCE ON RECORD WHICH PROVES
THAT THERE WAS A SECOND SALE OF A VESSEL.
A. THE MEMORANDUM OF AGREEMENT DATED 7
AUGUST 1997 PROVIDES THAT RESPONDENT GO WAS
CONTRACTUALLY BOUND TO BUY TWO (2) VESSELS
FROM AFFA.
B. RESPONDENT GOS POSITION PAPER AND
COUNTER-AFFIDAVIT/POSITION PAPER THAT WERE
FILED BEFORE THE BUREAU OF CUSTOMS, ADMITS
UNDER OATH THAT HE HAD INDEED PURCHASED A
SECOND VESSEL FROM AFFA.

C. RESPONDENTS ADMITTED IN THEIR PRE-TRIAL
BRIEF THAT THEY HAD PURCHASED A SECOND
VESSEL.
II.
THE COURT OF APPEALS ERRED IN RULING THAT
PETITIONER IS NOT ENTITLED TO HIS COMMISSIONS
FOR THE PURCHASE OF A SECOND VESSEL, SINCE IT
WAS PETITIONERS EFFORTS WHICH ACTUALLY
FACILITATED AND SET-UP THE TRANSACTION FOR
RESPONDENTS.
III.
THE COURT OF APPEALS ERRED IN NOT IMPOSING THE
PROPER LEGAL INTEREST RATE ON RESPONDENTS
UNPAID OBLIGATION WHICH SHOULD BE TWELVE
PERCENT (12%) FROM THE TIME OF THE BREACH OF
THE OBLIGATION.
IV.
THE COURT OF APPEALS ERRED IN NOT SUSTAINING
THE ORIGINAL AMOUNT OF CONSEQUENTIAL
DAMAGES AWARDED TO PETITIONER BY THE TRIAL
COURT CONSIDERING THE BAD FAITH AND
FRAUDULENT CONDUCT OF RESPONDENTS IN
MISAPPROPRIATING THE MONEY OF PETITIONER.30
The controversy boils down to two (2) main issues: (1)
whether petitioner Cordero has the legal personality to sue
the respondents for breach of contract; and (2) whether the
respondents may be held liable for damages to Cordero for
his unpaid commissions and termination of his exclusive
distributorship appointment by the principal, AFFA.
I. Real Party-in-Interest
First, on the issue of whether the case had been filed by the
real party-in-interest as required by Section 2, Rule 3 of the
Rules of Court, which defines such party as the one (1) to be
benefited or injured by the judgment in the suit, or the party
entitled to the avails of the suit. The purposes of this
provision are: 1) to prevent the prosecution of actions by
persons without any right, title or interest in the case; 2) to
require that the actual party entitled to legal relief be the one
to prosecute the action; 3) to avoid a multiplicity of suits; and
4) to discourage litigation and keep it within certain bounds,
pursuant to sound public policy.31 A case is dismissible for
lack of personality to sue upon proof that the plaintiff is not
the real party-in-interest, hence grounded on failure to state a
cause of action.32
On this issue, we agree with the CA in ruling that it was
Cordero and not Pamana who is the exclusive distributor of
AFFA in the Philippines as shown by the Certification dated
June 1, 1997 issued by Tony Robinson. 33 Petitioner Go
mentions the following documents also signed by respondent
Robinson which state that "Pamana Marketing Corporation
63
represented by Mr. Mortimer F. Cordero" was actually the
exclusive distributor: (1) letter dated 1 June 1997 34; (2)
certification dated 5 August 1997 35; and (3) letter dated 5
August 1997 addressed to petitioner Cordero concerning
"commissions to be paid to Pamana Marketing
Corporation."36 Such apparent inconsistency in naming
AFFAs exclusive distributor in the Philippines is of no
moment. For all intents and purposes, Robinson and AFFA
dealt only with Cordero who alone made decisions in the
performance of the exclusive distributorship, as with other
clients to whom he had similarly offered AFFAs fast ferry
vessels. Moreover, the stipulated commissions from each
progress payments made by Go were directly paid by
Robinson to Cordero.37 Respondents Landicho and Tecson
were only too aware of Corderos authority as the person who
was appointed and acted as exclusive distributor of AFFA,
which can be gleaned from their act of immediately furnishing
him with copies of bank transmittals everytime Go remits
payment to Robinson, who in turn transfers a portion of funds
received to the bank account of Cordero in the Philippines as
his commission. Out of these partial payments of his
commission, Cordero would still give Landicho and Tecson
their respective "commission," or "cuts" from his own
commission. Respondents Landicho and Tecson failed to
refute the evidence submitted by Cordero consisting of
receipts signed by them. Said amounts were apart from the
earlier expenses shouldered by Cordero for Landichos airline
tickets, transportation, food and hotel accommodations for
the trip to Australia.38
Moreover, petitioner Go, Landicho and Tecson never raised
petitioner Corderos lack of personality to sue on behalf of
Pamana,39 and did so only before the CA when they
contended that it is Pamana and not Cordero, who was
appointed and acted as exclusive distributor for AFFA. 40 It
was Robinson who argued in support of his motion to dismiss
that as far as said defendant is concerned, the real party
plaintiff appears to be Pamana, against the real party
defendant which is AFFA.41 As already mentioned, the trial
court denied the motion to dismiss filed by Robinson.
We find no error committed by the trial court in overruling
Robinsons objection over the improper resort to summons by
publication upon a foreign national like him and in an action
in personam, notwithstanding that he raised it in a special
appearance specifically raising the issue of lack of jurisdiction
over his person. Courts acquire jurisdiction over the plaintiffs
upon the filing of the complaint, while jurisdiction over the
defendants in a civil case is acquired either through the
service of summons upon them in the manner required by
law or through their voluntary appearance in court and their
submission to its authority.42 A party who makes a special
appearance in court challenging the jurisdiction of said court
based on the ground of invalid service of summons is not
deemed to have submitted himself to the jurisdiction of the
court.43
In this case, however, although the Motion to Dismiss filed by
Robinson specifically stated as one (1) of the grounds the
lack of "personal jurisdiction," it must be noted that he had
earlier filed a Motion for Time to file an appropriate
responsive pleading even beyond the time provided in the
64

summons by publication.44 Such motion did not state that it
was a conditional appearance entered to question the
regularity of the service of summons, but an appearance
submitting to the jurisdiction of the court by acknowledging
the summons by publication issued by the court and praying
for additional time to file a responsive pleading.
Consequently, Robinson having acknowledged the summons
by publication and also having invoked the jurisdiction of the
trial court to secure affirmative relief in his motion for
additional time, he effectively submitted voluntarily to the trial
courts jurisdiction. He is now estopped from asserting
otherwise, even before this Court.45
II. Breach of Exclusive Distributorship, Contractual
Interference and Respondents Liability for Damages
In Yu v. Court of Appeals,46 this Court ruled that the right to
perform an exclusive distributorship agreement and to reap
the profits resulting from such performance are proprietary
rights which a party may protect. Thus, injunction is the
appropriate remedy to prevent a wrongful interference with
contracts by strangers to such contracts where the legal
remedy is insufficient and the resulting injury is irreparable. In
that case, the former dealer of the same goods purchased
the merchandise from the manufacturer in England through a
trading firm in West Germany and sold these in the
Philippines. We held that the rights granted to the petitioner
under the exclusive distributorship agreement may not be
diminished nor rendered illusory by the expedient act of
utilizing or interposing a person or firm to obtain goods for
which the exclusive distributorship was conceptualized, at the
expense of the sole authorized distributor. 47
In the case at bar, it was established that petitioner Cordero
was not paid the balance of his commission by respondent
Robinson. From the time petitioner Go and respondent
Landicho directly dealt with respondent Robinson in
Brisbane, and ceased communicating through petitioner
Cordero as the exclusive distributor of AFFA in the
Philippines, Cordero was no longer informed of payments
remitted to AFFA in Brisbane. In other words, Cordero had
clearly been cut off from the transaction until the arrival of the
first SEACAT 25 which was sold through his efforts. When
Cordero complained to Go, Robinson, Landicho and Tecson
about their acts prejudicial to his rights and demanded that
they respect his exclusive distributorship, Go simply let his
lawyers led by Landicho and Tecson handle the matter and
tried to settle it by promising to pay a certain amount and to
purchase high-speed catamarans through Cordero. However,
Cordero was not paid anything and worse, AFFA through its
lawyer in Australia even terminated his exclusive dealership
insisting that his services were engaged for only one (1)
transaction, that is, the purchase of the first SEACAT 25 in
August 1997.
Petitioner Go argues that unlike in Yu v. Court of Appeals 48
there is no conclusive proof adduced by petitioner Cordero
that they actually purchased a second SEACAT 25 directly
from AFFA and hence there was no violation of the exclusive
distributorship agreement. Further, he contends that the CA
gravely abused its discretion in holding them solidarily liable
to Cordero, relying on Articles 1207, 19 and 21 of the Civil

Code despite absence of evidence, documentary or
testimonial, showing that they conspired to defeat the very
purpose of the exclusive distributorship agreement.49
We find that contrary to the claims of petitioner Cordero,
there was indeed no sufficient evidence that respondents
actually purchased a second SEACAT 25 directly from AFFA.
But this circumstance will not absolve respondents from
liability for invading Corderos rights under the exclusive
distributorship. Respondents clearly acted in bad faith in
bypassing Cordero as they completed the remaining
payments to AFFA without advising him and furnishing him
with copies of the bank transmittals as they previously did,
and directly dealt with AFFA through Robinson regarding
arrangements for the arrival of the first SEACAT 25 in Manila
and negotiations for the purchase of the second vessel
pursuant to the Memorandum of Agreement which Cordero
signed in behalf of AFFA. As a result of respondents
actuations, Cordero incurred losses as he was not paid the
balance of his commission from the sale of the first vessel
and his exclusive distributorship revoked by AFFA.
Petitioner Go contends that the trial and appellate courts
erred in holding them solidarily liable for Corderos unpaid
commission, which is the sole obligation of the principal
AFFA. It was Robinson on behalf of AFFA who, in the letter
dated August 5, 1997 addressed to Cordero, undertook to
pay commission payments to Pamana on a staggered
progress payment plan in the form of percentage of the
commission per payment. AFFA explicitly committed that it
will, "upon receipt of progress payments, pay to Pamana their
full commission by telegraphic transfer to an account
nominated by Pamana within one to two days of [AFFA]
receiving such payments."50 Petitioner Go further maintains
that he had not in any way violated or caused the termination
of the exclusive distributorship agreement between Cordero
and AFFA; he had also paid in full the first and only vessel he
purchased from AFFA.51
While it is true that a third person cannot possibly be sued for
breach of contract because only parties can breach
contractual provisions, a contracting party may sue a third
person not for breach but for inducing another to commit
such breach.
Article 1314 of the Civil Code provides:
Art. 1314. Any third person who induces another to violate his
contract shall be liable for damages to the other contracting
party.
The elements of tort interference are: (1) existence of a valid
contract; (2) knowledge on the part of the third person of the
existence of a contract; and (3) interference of the third
person is without legal justification.52
The presence of the first and second elements is not
disputed. Through the letters issued by Robinson attesting
that Cordero is the exclusive distributor of AFFA in the
Philippines, respondents were clearly aware of the contract

between Cordero and AFFA represented by Robinson. In
fact, evidence on record showed that respondents initially
dealt with and recognized Cordero as such exclusive dealer
of AFFA high-speed catamaran vessels in the Philippines. In
that capacity as exclusive distributor, petitioner Go entered
into the Memorandum of Agreement and Shipbuilding
Contract No. 7825 with Cordero in behalf of AFFA.
As to the third element, our ruling in the case of So Ping Bun
v. Court of Appeals53 is instructive, to wit:
A duty which the law of torts is concerned with is respect for
the property of others, and a cause of action ex delicto may
be predicated upon an unlawful interference by one person of
the enjoyment by the other of his private property. This may
pertain to a situation where a third person induces a party to
renege on or violate his undertaking under a contract. In the
case before us, petitioners Trendsetter Marketing asked
DCCSI to execute lease contracts in its favor, and as a result
petitioner deprived respondent corporation of the latters
property right. Clearly, and as correctly viewed by the
appellate court, the three elements of tort interference abovementioned are present in the instant case.
Authorities debate on whether interference may be justified
where the defendant acts for the sole purpose of furthering
his own financial or economic interest. One view is that, as a
general rule, justification for interfering with the business
relations of another exists where the actors motive is to
benefit himself. Such justification does not exist where his
sole motive is to cause harm to the other. Added to this,
some authorities believe that it is not necessary that the
interferers interest outweigh that of the party whose rights
are invaded, and that an individual acts under an economic
interest that is substantial, not merely de minimis, such that
wrongful and malicious motives are negatived, for he acts in
self-protection. Moreover, justification for protecting ones
financial position should not be made to depend on a
comparison of his economic interest in the subject matter
with that of others. It is sufficient if the impetus of his conduct
lies in a proper business interest rather than in wrongful
motives.
As early as Gilchrist vs. Cuddy, we held that where there was
no malice in the interference of a contract, and the impulse
behind ones conduct lies in a proper business interest rather
than in wrongful motives, a party cannot be a malicious
interferer. Where the alleged interferer is financially
interested, and such interest motivates his conduct, it cannot
be said that he is an officious or malicious intermeddler.
In the instant case, it is clear that petitioner So Ping Bun
prevailed upon DCCSI to lease the warehouse to his
enterprise at the expense of respondent corporation. Though
petitioner took interest in the property of respondent
corporation and benefited from it, nothing on record imputes
deliberate wrongful motives or malice in him.
xxx
While we do not encourage tort interferers seeking their
65
economic interest to intrude into existing contracts at the
expense of others, however, we find that the conduct herein
complained of did not transcend the limits forbidding an
obligatory award for damages in the absence of any malice.
The business desire is there to make some gain to the
detriment of the contracting parties. Lack of malice, however,
precludes damages. But it does not relieve petitioner of the
legal liability for entering into contracts and causing breach of
existing ones. The respondent appellate court correctly
confirmed the permanent injunction and nullification of the
lease contracts between DCCSI and Trendsetter Marketing,
without awarding damages. The injunction saved the
respondents from further damage or injury caused by
petitioners interference.54 [emphasis supplied.]
Malice connotes ill will or spite, and speaks not in response
to duty. It implies an intention to do ulterior and unjustifiable
harm. Malice is bad faith or bad motive. 55 In the case of
Lagon v. Court of Appeals,56 we held that to sustain a case for
tortuous interference, the defendant must have acted with
malice or must have been driven by purely impure reasons to
injure the plaintiff; in other words, his act of interference
cannot be justified. We further explained that the word
"induce" refers to situations where a person causes another
to choose one course of conduct by persuasion or
intimidation. As to the allegation of private respondent in said
case that petitioner induced the heirs of the late Bai Tonina
Sepi to sell the property to petitioner despite an alleged
renewal of the original lease contract with the deceased
landowner, we ruled as follows:
Assuming ex gratia argumenti that petitioner knew of the
contract, such knowledge alone was not sufficient to make
him liable for tortuous interference. x x x
Furthermore, the records do not support the allegation of
private respondent that petitioner induced the heirs of Bai
Tonina Sepi to sell the property to him. The word "induce"
refers to situations where a person causes another to choose
one course of conduct by persuasion or intimidation. The
records show that the decision of the heirs of the late Bai
Tonina Sepi to sell the property was completely of their own
volition and that petitioner did absolutely nothing to influence
their judgment. Private respondent himself did not proffer any
evidence to support his claim. In short, even assuming that
private respondent was able to prove the renewal of his lease
contract with Bai Tonina Sepi, the fact was that he was
unable to prove malice or bad faith on the part of petitioner in
purchasing the property. Therefore, the claim of tortuous
interference was never established.57
In their Answer, respondents denied having anything to do
with the unpaid balance of the commission due to Cordero
and the eventual termination of his exclusive distributorship
by AFFA. They gave a different version of the events that
transpired following the signing of Shipbuilding Contract No.
7825. According to them, several builder-competitors still
entered the picture after the said contract for the purchase of
one (1) SEACAT 25 was sent to Brisbane in July 1997 for
authentication, adding that the contract was to be effective on
August 7, 1997, the time when their funds was to become

available. Go admitted he called the attention of AFFA if it
can compete with the prices of other builders, and upon
mutual agreement, AFFA agreed to give them a discounted
price under the following terms and conditions: (1) that the
contract price be lowered; (2) that Go will obtain another
vessel; (3) that to secure compliance of such conditions, Go
must make an advance payment for the building of the
second vessel; and (4) that the payment scheme formerly
agreed upon as stipulated in the first contract shall still be the
basis and used as the guiding factor in remitting money for
the building of the first vessel. This led to the signing of
another contract superseding the first one (1), still to be
dated 07 August 1997. Attached to the answer were
photocopies of the second contract stating a lower purchase
price (US$1,150,000.00) and facsimile transmission of AFFA
to Go confirming the transaction.58
As to the cessation of communication with Cordero, Go
averred it was Cordero who was nowhere to be contacted at
the time the shipbuilding progress did not turn good as
promised, and it was always Landicho and Tecson who, after
several attempts, were able to locate him only to obtain
unsatisfactory reports such that it was Go who would still call
up Robinson regarding any progress status report, lacking
documents for MARINA, etc., and go to Australia for ocular
inspection. Hence, in May 1998 on the scheduled launching
of the ship in Australia, Go engaged the services of Landicho
who went to Australia to see to it that all documents needed
for the shipment of the vessel to the Philippines would be in
order. It was also during this time that Robinsons request for
inquiry on the Philippine price of a Wartsila engine for AFFAs
then on-going vessel construction, was misinterpreted by
Cordero as indicating that Go was buying a second vessel. 59
We find these allegations unconvincing and a mere
afterthought as these were the very same averments
contained in the Position Paper for the Importer dated
October 9, 1998, which was submitted by Go on behalf of
ACG Express Liner in connection with the complaint-affidavit
filed by Cordero before the BOC-SGS Appeals Committee
relative to the shipment valuation of the first SEACAT 25
purchased from AFFA.60 It appears that the purported second
contract superseding the original Shipbuilding Contract No.
7825 and stating a lower price of US$1,150,000.00 (not
US$1,465,512.00) was only presented before the BOC to
show that the vessel imported into the Philippines was not
undervalued by almost US$500,000.00. Cordero vehemently
denied there was such modification of the contract and
accused respondents of resorting to falsified documents,
including the facsimile transmission of AFFA supposedly
confirming the said sale for only US$1,150,000.00.
Incidentally, another document filed in said BOC case, the
Counter-Affidavit/Position Paper for the Importer dated
November 16, 1998,61 states in paragraph 8 under the
Antecedent facts thereof, that -8. As elsewhere stated, the total remittances made by herein
Importer to AFFA does not alone represent the purchase
price for Seacat 25. It includes advance payment for the
acquisition of another vessel as part of the deal due to the
discounted price.62
66
which even gives credence to the claim of Cordero that
respondents negotiated for the sale of the second vessel and
that the nonpayment of the remaining two (2) instalments of
his commission for the sale of the first SEACAT 25 was a
result of Go and Landichos directly dealing with Robinson,
obviously to obtain a lower price for the second vessel at the
expense of Cordero.
The act of Go, Landicho and Tecson in inducing Robinson
and AFFA to enter into another contract directly with ACG
Express Liner to obtain a lower price for the second vessel
resulted in AFFAs breach of its contractual obligation to pay
in full the commission due to Cordero and unceremonious
termination of Corderos appointment as exclusive distributor.
Following our pronouncement in Gilchrist v. Cuddy (supra),
such act may not be deemed malicious if impelled by a
proper business interest rather than in wrongful motives. The
attendant circumstances, however, demonstrated that
respondents transgressed the bounds of permissible financial
interest to benefit themselves at the expense of Cordero.
Respondents furtively went directly to Robinson after
Cordero had worked hard to close the deal for them to
purchase from AFFA two (2) SEACAT 25, closely monitored
the progress of building the first vessel sold, attended to their
concerns and spent no measly sum for the trip to Australia
with Go, Landicho and Gos family members. But what is
appalling is the fact that even as Go, Landicho and Tecson
secretly negotiated with Robinson for the purchase of a
second vessel, Landicho and Tecson continued to demand
and receive from Cordero their "commission" or "cut" from
Corderos earned commission from the sale of the first
SEACAT 25.
Cordero was practically excluded from the transaction when
Go, Robinson, Tecson and Landicho suddenly ceased
communicating with him, without giving him any explanation.
While there was nothing objectionable in negotiating for a
lower price in the second purchase of SEACAT 25, which is
not prohibited by the Memorandum of Agreement, Go,
Robinson, Tecson and Landicho clearly connived not only in
ensuring that Cordero would have no participation in the
contract for sale of the second SEACAT 25, but also that
Cordero would not be paid the balance of his commission
from the sale of the first SEACAT 25. This, despite their
knowledge that it was commission already earned by and
due to Cordero. Thus, the trial and appellate courts correctly
ruled that the actuations of Go, Robinson, Tecson and
Landicho were without legal justification and intended solely
to prejudice Cordero.
The existence of malice, ill will or bad faith is a factual matter.
As a rule, findings of fact of the trial court, when affirmed by
the appellate court, are conclusive on this Court. 63 We see no
compelling reason to reverse the findings of the RTC and the
CA that respondents acted in bad faith and in utter disregard
of the rights of Cordero under the exclusive distributorship
agreement.
The failure of Robinson, Go, Tecson and Landico to act with
fairness, honesty and good faith in securing better terms for
the purchase of high-speed catamarans from AFFA, to the
67

prejudice of Cordero as the duly appointed exclusive
distributor, is further proscribed by Article 19 of the Civil
Code:
Art. 19. Every person must, in the exercise of his rights and
in the performance of his duties, act with justice, give
As we have expounded in another case:
It may be stated as a general rule that joint tort feasors are all
the persons who command, instigate, promote, encourage,
advise, countenance, cooperate in, aid or abet the
commission of a tort, or who approve of it after it is done, if
done for their benefit. They are each liable as principals, to
the same extent and in the same manner as if they had
performed the wrongful act themselves. x x x
Joint tort feasors are jointly and severally liable for the tort
which they commit. The persons injured may sue all of them
or any number less than all. Each is liable for the whole
damages caused by all, and all together are jointly liable for
the whole damage. It is no defense for one sued alone, that
the others who participated in the wrongful act are not joined
with him as defendants; nor is it any excuse for him that his
participation in the tort was insignificant as compared to that
of the others. x x x
1avvphi1
Elsewhere, we explained that when "a right is exercised in a

manner which does not conform with the norms enshrined in
Article 19 and results in damage to another, a legal wrong is
thereby committed for which the wrongdoer must be
responsible." The object of this article, therefore, is to set
certain standards which must be observed not only in the
exercise of ones rights but also in the performance of ones
duties. These standards are the following: act with justice,
give everyone his due and observe honesty and good faith.
Its antithesis, necessarily, is any act evincing bad faith or
intent to injure. Its elements are the following: (1) There is a
legal right or duty; (2) which is exercised in bad faith; (3) for
the sole intent of prejudicing or injuring another. When Article
19 is violated, an action for damages is proper under Articles
20 or 21 of the Civil Code. Article 20 pertains to damages
arising from a violation of law x x x. Article 21, on the other
hand, states:
Art. 21. Any person who willfully 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.
Article 21 refers to 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) it is done with intent to injure.
A common theme runs through Articles 19 and 21, and that
is, the act complained of must be intentional. 64
Petitioner Gos argument that he, Landicho and Tecson
cannot be held liable solidarily with Robinson for actual,
moral and exemplary damages, as well as attorneys fees
awarded to Cordero since no law or contract provided for
solidary obligation in these cases, is equally bereft of merit.
Conformably with Article 2194 of the Civil Code, the
responsibility of two or more persons who are liable for the
quasi-delict is solidary.65 In Lafarge Cement Philippines, Inc.
v. Continental Cement Corporation,66 we held:
[O]bligations arising from tort are, by their nature, always
solidary. We have assiduously maintained this legal principle
as early as 1912 in Worcester v. Ocampo, in which we held:
x x x The difficulty in the contention of the appellants is that
they fail to recognize that the basis of the present action is
tort. They fail to recognize the universal doctrine that each
joint tort feasor is not only individually liable for the tort in
which he participates, but is also jointly liable with his tort
feasors. x x x
Joint tort feasors are not liable pro rata. The damages can
not be apportioned among them, except among themselves.
They cannot insist upon an apportionment, for the purpose of
each paying an aliquot part. They are jointly and severally
liable for the whole amount. x x x
A payment in full for the damage done, by one of the joint tort
feasors, of course satisfies any claim which might exist
against the others. There can be but satisfaction. The release
of one of the joint tort feasors by agreement generally
operates to discharge all. x x x
Of course, the court during trial may find that some of the
alleged tort feasors are liable and that others are not liable.
The courts may release some for lack of evidence while
condemning others of the alleged tort feasors. And this is true
even though they are charged jointly and severally. 67
[emphasis supplied.]
The rule is that the defendant found guilty of interference with
contractual relations cannot be held liable for more than the
amount for which the party who was inducted to break the
contract can be held liable.68 Respondents Go, Landicho and
Tecson were therefore correctly held liable for the balance of
petitioner Corderos commission from the sale of the first
SEACAT 25, in the amount of US$31,522.09 or its peso
equivalent, which AFFA/Robinson did not pay in violation of
the exclusive distributorship agreement, with interest at the
rate of 6% per annum from June 24, 1998 until the same is
fully paid.
Respondents having acted in bad faith, moral damages may
be recovered under Article 2219 of the Civil Code.69 On the
other hand, the requirements of an award of exemplary
damages are: (1) they may be imposed by way of example in
addition to compensatory damages, and only after the
claimants right to them has been established; (2) that they
cannot be recovered as a matter of right, their determination
depending upon the amount of compensatory damages that
may be awarded to the claimant; and (3) the act must be
accompanied by bad faith or done in a wanton, fraudulent,
oppressive or malevolent manner.70 The award of exemplary
damages is thus in order. However, we find the sums
68

awarded by the trial court as moral and exemplary damages
as reduced by the CA, still excessive under the
circumstances.
Moral damages are meant to compensate and alleviate the
physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock,
social humiliation, and similar injuries unjustly caused.
Although incapable of pecuniary estimation, the amount must
somehow be proportional to and in approximation of the
suffering inflicted. Moral damages are not punitive in nature
and were never intended to enrich the claimant at the
expense of the defendant. There is no hard-and-fast rule in
determining what would be a fair and reasonable amount of
moral damages, since each case must be governed by its
own peculiar facts. Trial courts are given discretion in
determining the amount, with the limitation that it "should not
be palpably and scandalously excessive." Indeed, it must be
commensurate to the loss or injury suffered.71
We believe that the amounts of P300,000.00 and
P200,000.00 as moral and exemplary damages, respectively,
would be sufficient and reasonable. Because exemplary
damages are awarded, attorneys fees may also be awarded
in consonance with Article 2208 (1).72 We affirm the appellate
courts award of attorneys fees in the amount of P50,000.00.
WHEREFORE, the petitions are DENIED. The Decision
dated March 16, 2004 as modified by the Resolution dated
July 22, 2004 of the Court of Appeals in CA-G.R. CV No.
69113 are hereby AFFIRMED with MODIFICATION in that
the awards of moral and exemplary damages are hereby
reduced to P300,000.00 and P200,000.00, respectively.
Pursuant to Section 13, Article VIII of the 1987 Constitution, I

certify that the conclusions in the above Decision had been
REYNATO S. PUNO
Chief Justice
Footnotes
Penned by Associate Justice Jose Catral Mendoza (now a
Member of this Court) and concurred in by Associate Justices
B.A. Adefuin-Dela Cruz and Eliezer R. Delos Santos.
1
Penned by Associate Justice Jose Catral Mendoza (now a

Member of this Court) and concurred in by Associate Justices
Delilah Vidallon-Magtolis and Eliezer R. Delos Santos.
2
Penned by Judge Pedro M. Areola.
Folder of plaintiffs exhibits, pp. 1-34.
Id., pp. 35-39.
Id., pp. 43-51.
Id., pp. 40-42.
Id., pp. 52-53.
Id., pp. 54-56.
With costs against the petitioner in G.R. No. 164703.

SO ORDERED.
10
MARTIN S. VILLARAMA, JR.
Id., pp. 56-57.
TSN, April 5, 2000, pp. 27-35; folder of plaintiffs exhibits, p.

58.
11
Associate Justice
WE CONCUR:
12
Records, Vol. I, pp. 1-16.
REYNATO S. PUNO
13
Id., pp. 155-157, 167-171, 186-189, 249-251.
Chief Justice
14
Id., pp. 70-77, 178.
Chairperson
15
Id., pp. 213-214.
16
Id., pp. 298-299.
17
TSN, April 14, 2000, pp. 2-44.
18
19
Id., pp. 460-465.
20
Id., pp. 477-480.
CONCHITA CARPIO MORALES

Associate Justice
LUCAS P. BERSAMIN
Associate Justice
69

21
Id., pp. 481-485.
46
G.R. No. 86683, January 21, 1993, 217 SCRA 328.
22
Id., p. 486.
47
Id., pp. 331, 332.
23
Id., pp. 500-502.
48
Supra.
24
Id., p. 503.
49
Rollo (G.R. No. 164703), pp. 33-34.
25
Id., pp. 512-514.
50
Id., pp 36-37; Exhibit "A-3", folder of exhibits, p. 4.
26
Records, Vol. II, pp. 550-620.
51
Rollo (G.R. No. 164703), p. 39.
27
Id., pp. 621-622.
52
28
Cordero v. Go, G.R. No. 149754, 389 SCRA 288.
29
Rollo (G.R. No. 164703), pp. 23-24.
30
Rollo (G.R. No. 164747), pp. 21-22.
So Ping Bun v. Court of Appeals, G.R. No. 120554,

September 21, 1999, 314 SCRA 751, 758, citing 30 Am Jur,
Section 19, pp. 71-72 and Sampaguita Pictures, Inc. v.
Vasquez, et al. (Court of Appeals, 68 O.G. 7666).
53
Supra.
54
Id., pp. 758-760.
Oco v. Limbaring, G.R. No. 161298, January 31, 2006, 481

SCRA 348, 358.
55
Tamondong v. Court of Appeals, G.R. No. 158397,

November 26, 2004, 444 SCRA 509.
56
G.R. No. 119107, March 18, 2005, 453 SCRA 616, 626.
31
Borjal v. Court of Appeals, G.R. No. 126466, January 14,

1999, 301 SCRA 1, 28.
32
33
Folder of exhibits, Exhibit "A-6", p. 7.
57
Id., p. 626.
34
Id., Exhibit "A-9", p. 10
58
35
Id., Exhibit "A", p. 1.
59
Id., pp. 206-207.
36
Id., Exhibit "A-3", p. 4.
60
Folder of exhibits, Exhibit "BB", pp. 324-342.
61
Id., Exhibit "CC", pp. 343-361.
62
Id., p. 345.
Id., Exhibits "J" to "J-2", "K" to "K-4", "M", "Y to "Y-4", pp.
59-66, 69-71, 314-318.
37
Id., Exhibits "R-6", "P", "R-7", "V", "W" , "X" to "X-7", "Y" to
"Y-4" and "Z" to "Z-2", pp. 232, 236-238, 239, 301-321.
38
39
Ramas v. Quiamco, G.R. No. 146322, December 6, 2006,

510 SCRA 172, 178.
63
Records, Vol. I, pp. 70-73, 203-213, 265-267, 460-464.

Nikko Hotel Manila Garden v. Reyes, G.R. No. 154259,
February 28, 2005, 452 SCRA 532, 546-547, citing Albenson
Enterprises Corp. v. Court of Appeals, G.R. No. 88694,
January 11, 1993, 217 SCRA 16, 25.
64
40
CA rollo, pp. 78-84.
41
Perkin Elmer Singapore Pte Ltd. v. Dakila Trading

Corporation, G.R. No. 172242, August 14, 2007, 530 SCRA
170, 186.
42
United Coconut Planters Bank v. Ongpin, G.R. No. 146593,

October 26, 2001, 368 SCRA 464, 470.
Ngo Sin Sing v. Li Seng Giap & Sons, Inc., G.R. No.
170596, November 28, 2008, 572 SCRA 625, 638, citing
Chan, Jr. v. Iglesia ni Cristo, Inc., G.R. No. 160283, October
14, 2005, 473 SCRA 177, 186.
65
43
44
See Dole Philippines, Inc.(Tropifresh Division) v. Quilala,

G.R. No. 168723, July 9, 2008, 557 SCRA 433, 437-438.
45
66
G.R. No. 155173, November 23, 2004, 443 SCRA 522.
As cited in Ngo Sin Sing v. Li Seng Giap & Sons, Inc.,

supra.
67
Daywalt v. Corporacion de PP. Agustinos Recoletos, 39

Phil. 587 (1919).
68
70

Magat v. Court of Appeals, G.R. No. 124221, August 4,
2000, 337 SCRA 298; Far East Bank & Trust Company v.
Court of Appeals, 311 Phil. 783 (1995); and Expertravel &
Tours, Inc. v. Court of Appeals, G.R. No. 130030, June 25,
1999, 309 SCRA 141, 145-146.

SUPREME COURT
SECOND DIVISION
69
G.R. No. 165842 November 29, 2005
National Steel Corporation v. Regional Trial Court of Lanao

del Norte, Br. 2, Iligan City, G.R. No. 127004, March 11, 1999
304 SCRA 609.
EDUARDO P. MANUEL, Petitioner,
Samson, Jr. v. Bank of the Philippine Islands, G.R. No.

150487, July 10, 2003, 405 SCRA 607, 611-612, citing
Expertravel & Tours, Inc. v. Court of Appeals, 368 Phil. 444
(1999); De la Serna v. Court of Appeals, G.R. No. 109161,
June 21, 1994, 233 SCRA 325; Visayan Sawmill Company,
Inc. v. Court of Appeals, G.R. No. 83851, March 3, 1993, 219
SCRA 378; Flores v. Uy, G.R. Nos. 121492 & 124325,
October 26, 2001, 368 SCRA 347; Pagsuyuin v. Intermediate
Appellate Court, G.R. No. 72121, February 6, 1991, 193
SCRA 547; Northwest Airlines v. Laya, G.R. No. 145956, May
29, 2002, 382 SCRA 730; Cavite Development Bank v. Sps.
Lim, 381 Phil. 355 (2000); Coca-Cola Bottlers, Phils., Inc. v.
Roque, 367 Phil. 493 (1999); Morales v. Court of Appeals,
G.R. No. 117228, June 19, 1997, 274 SCRA 282; Prudential
Bank v. Court of Appeals, 384 Phil. 942 (1999); Singson v.
Court of Appeals, 346 Phil. 831 (1997); Del Rosario v. Court
of Appeals, 334 Phil. 812 (1997); Philippine National Bank v.
Court of Appeals, 326 Phil. 326 (1996); Mayo v. People, G.R.
No. 91201, December 5, 1991, 204 SCRA 642; Policarpio v.
Court of Appeals, G.R. No. 94563, March 5, 1991, 194 SCRA
729; Radio Communications of the Phils., Inc. v. Rodriguez,
G.R. No. 83768, February 28, 1990, 182 SCRA 899; and
Prudenciado v. Alliance Transport System, Inc., No. L-33836,
March 16, 1987, 148 SCRA 440.
PEOPLE OF THE PHILIPPINES, Respondent.
70
71
B.F. Metal (Corporation) v. Lomotan, G.R. No. 170813, April

16, 2008, 551 SCRA 618.
72
vs.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari of the Decision1
of the Court of Appeals (CA) in CA-G.R. CR No. 26877,
affirming the Decision2 of the Regional Trial Court (RTC) of
Baguio City, Branch 3, convicting Eduardo P. Manuel of
bigamy in Criminal Case No. 19562-R.
Eduardo was charged with bigamy in an Information filed on
November 7, 2001, the accusatory portion of which reads:
That on or about the 22nd day of April, 1996, in the City of
Baguio, Philippines, and within the jurisdiction of this
Honorable Court, the above-named accused EDUARDO P.
MANUEL, being then previously and legally married to
RUBYLUS [GAA] and without the said marriage having
been legally dissolved, did then and there willfully, unlawfully
and feloniously contract a second marriage with TINA
GANDALERA-MANUEL, herein complainant, who does not
know the existence of the first marriage of said EDUARDO P.
MANUEL to Rubylus [Gaa].
CONTRARY TO LAW. 3
The prosecution adduced evidence that on July 28, 1975,
Eduardo was married to Rubylus Gaa before Msgr.
Feliciano Santos in Makati, which was then still a municipality
of the Province of Rizal.4 He met the private complainant Tina
B. Gandalera in Dagupan City sometime in January 1996.
She stayed in Bonuan, Dagupan City for two days looking for
a friend. Tina was then 21 years old, a Computer Secretarial
student, while Eduardo was 39. Afterwards, Eduardo went to
Baguio City to visit her. Eventually, as one thing led to
another, they went to a motel where, despite Tinas
resistance, Eduardo succeeded in having his way with her.
Eduardo proposed marriage on several occasions, assuring
her that he was single. Eduardo even brought his parents to
Baguio City to meet Tinas parents, and was assured by them
that their son was still single.
Tina finally agreed to marry Eduardo sometime in the first
week of March 1996. They were married on April 22, 1996
before Judge Antonio C. Reyes, the Presiding Judge of the
RTC of Baguio City, Branch 61. 5 It appeared in their marriage
contract that Eduardo was "single."
71
The couple was happy during the first three years of their
married life. Through their joint efforts, they were able to build
their home in Cypress Point, Irisan, Baguio City. However,
starting 1999, Manuel started making himself scarce and
went to their house only twice or thrice a year. Tina was
jobless, and whenever she asked money from Eduardo, he
would slap her.6 Sometime in January 2001, Eduardo took all
his clothes, left, and did not return. Worse, he stopped giving
financial support.
Sometime in August 2001, Tina became curious and made
inquiries from the National Statistics Office (NSO) in Manila
where she learned that Eduardo had been previously
married. She secured an NSO-certified copy of the marriage
contract.7 She was so embarrassed and humiliated when she
learned that Eduardo was in fact already married when they
exchanged their own vows.8
For his part, Eduardo testified that he met Tina sometime in
1995 in a bar where she worked as a Guest Relations Officer
(GRO). He fell in love with her and married her. He informed
Tina of his previous marriage to Rubylus Gaa, but she
nevertheless agreed to marry him. Their marital relationship
was in order until this one time when he noticed that she had
a "love-bite" on her neck. He then abandoned her. Eduardo
further testified that he declared he was "single" in his
marriage contract with Tina because he believed in good faith
that his first marriage was invalid. He did not know that he
had to go to court to seek for the nullification of his first
marriage before marrying Tina.
Eduardo further claimed that he was only forced to marry his
first wife because she threatened to commit suicide unless
he did so. Rubylus was charged with estafa in 1975 and
thereafter imprisoned. He visited her in jail after three months
and never saw her again. He insisted that he married Tina
believing that his first marriage was no longer valid because
he had not heard from Rubylus for more than 20 years.
After trial, the court rendered judgment on July 2, 2002
finding Eduardo guilty beyond reasonable doubt of bigamy.
He was sentenced to an indeterminate penalty of from six (6)
years and ten (10) months, as minimum, to ten (10) years, as
maximum, and directed to indemnify the private complainant
Tina Gandalera the amount of P200,000.00 by way of moral
damages, plus costs of suit.9
The trial court ruled that the prosecution was able to prove
beyond reasonable doubt all the elements of bigamy under
Article 349 of the Revised Penal Code. It declared that
Eduardos belief, that his first marriage had been dissolved
because of his first wifes 20-year absence, even if true, did
not exculpate him from liability for bigamy. Citing the ruling of
this Court in People v. Bitdu,10 the trial court further ruled that
even if the private complainant had known that Eduardo had
been previously married, the latter would still be criminally
liable for bigamy.
Eduardo appealed the decision to the CA. He alleged that he
was not criminally liable for bigamy because when he

married the private complainant, he did so in good faith and
without any malicious intent. He maintained that at the time
that he married the private complainant, he was of the honest
belief that his first marriage no longer subsisted. He insisted
that conformably to Article 3 of the Revised Penal Code,
there must be malice for one to be criminally liable for a
felony. He was not motivated by malice in marrying the
private complainant because he did so only out of his
overwhelming desire to have a fruitful marriage. He posited
that the trial court should have taken into account Article 390
of the New Civil Code. To support his view, the appellant
cited the rulings of this Court in United States v. Pealosa11
and Manahan, Jr. v. Court of Appeals.12
The Office of the Solicitor General (OSG) averred that
Eduardos defense of good faith and reliance on the Courts
ruling in United States v. Enriquez13 were misplaced; what is
applicable is Article 41 of the Family Code, which amended
Article 390 of the Civil Code. Citing the ruling of this Court in
Republic v. Nolasco,14 the OSG further posited that as
provided in Article 41 of the Family Code, there is a need for
a judicial declaration of presumptive death of the absent
spouse to enable the present spouse to marry. Even
assuming that the first marriage was void, the parties thereto
should not be permitted to judge for themselves the nullity of
the marriage;
the matter should be submitted to the proper court for
resolution. Moreover, the OSG maintained, the private
complainants knowledge of the first marriage would not
afford any relief since bigamy is an offense against the State
and not just against the private complainant.
However, the OSG agreed with the appellant that the penalty
imposed by the trial court was erroneous and sought the
affirmance of the decision appealed from with modification.
On June 18, 2004, the CA rendered judgment affirming the
decision of the RTC with modification as to the penalty of the
accused. It ruled that the prosecution was able to prove all
the elements of bigamy. Contrary to the contention of the
appellant, Article 41 of the Family Code should apply. Before
Manuel could lawfully marry the private complainant, there
should have been a judicial declaration of Gaas
presumptive death as the absent spouse. The appellate court
cited the rulings of this Court in Mercado v. Tan15 and
Domingo v. Court of Appeals16 to support its ruling. The
dispositive portion of the decision reads:
WHEREFORE, in the light of the foregoing, the Decision
promulgated on July 31, 2002 is hereby MODIFIED to reflect,
as it hereby reflects, that accused-appellant is sentenced to
an indeterminate penalty of two (2) years, four (4) months
and one (1) day of prision correccional, as minimum, to ten
(10) years of prision mayor as maximum. Said Decision is
AFFIRMED in all other respects.
SO ORDERED.17
Eduardo, now the petitioner, filed the instant petition for
72

review on certiorari, insisting that:
I
THE COURT OF APPEALS COMMITTED REVERSIBLE
ERROR OF LAW WHEN IT RULED THAT PETITIONERS
FIRST WIFE CANNOT BE LEGALLY PRESUMED DEAD
UNDER ARTICLE 390 OF THE CIVIL CODE AS THERE
WAS NO JUDICIAL DECLARATION OF PRESUMPTIVE
DEATH AS PROVIDED FOR UNDER ARTICLE 41 OF THE
FAMILY CODE.
complainant. The private complainant was a "GRO" before

he married her, and even knew that he was already married.
He genuinely loved and took care of her and gave her
financial support. He also pointed out that she had an illicit
relationship with a lover whom she brought to their house.
In its comment on the petition, the OSG maintains that the
decision of the CA affirming the petitioners conviction is in
accord with the law, jurisprudence and the evidence on
record. To bolster its claim, the OSG cited the ruling of this
Court in Republic v. Nolasco.19
II
The petition is denied for lack of merit.
THE COURT OF APPEALS COMMITTED REVERSIBLE

ERROR OF LAW WHEN IT AFFIRMED THE AWARD OF
PHP200,000.00 AS MORAL DAMAGES AS IT HAS NO
BASIS IN FACT AND IN LAW.18
Article 349 of the Revised Penal Code, which defines and

penalizes bigamy, reads:
The petitioner maintains that the prosecution failed to prove

the second element of the felony, i.e., that the marriage has
not been legally dissolved or, in case his/her spouse is
absent, the absent spouse could not yet be presumed dead
under the Civil Code. He avers that when he married
Gandalera in 1996, Gaa had been "absent" for 21 years
since 1975; under Article 390 of the Civil Code, she was
presumed dead as a matter of law. He points out that, under
the first paragraph of Article 390 of the Civil Code, one who
has been absent for seven years, whether or not he/she is
still alive, shall be presumed dead for all purposes except for
succession, while the second paragraph refers to the rule on
legal presumption of death with respect to succession.
The petitioner asserts that the presumptive death of the
absent spouse arises by operation of law upon the
satisfaction of two requirements: the
specified period and the present spouses reasonable belief
that the absentee is dead. He insists that he was able to
prove that he had not heard from his first wife since 1975 and
that he had no knowledge of her whereabouts or whether she
was still alive; hence, under Article 41 of the Family Code,
the presumptive death of Gaa had arisen by operation of
law, as the two requirements of Article 390 of the Civil Code
are present. The petitioner concludes that he should thus be
acquitted of the crime of bigamy.
The petitioner insists that except for the period of absences
provided for in Article 390 of the Civil Code, the rule therein
on legal presumptions remains valid and effective. Nowhere
under Article 390 of the Civil Code does it require that there
must first be a judicial declaration of death before the rule on
presumptive death would apply. He further asserts that
contrary to the rulings of the trial and appellate courts, the
requirement of a judicial declaration of presumptive death
under Article 41 of the Family Code is only a requirement for
the validity of the subsequent or second marriage.
The petitioner, likewise, avers that the trial court and the CA
erred in awarding moral damages in favor of the private
Art. 349. Bigamy. The penalty of prision mayor shall be

imposed upon any person who shall contract a second or
subsequent marriage before the former marriage has been
legally dissolved, or before the absent spouse has been
declared presumptively dead by means of a judgment
rendered in the proper proceedings.
The provision was taken from Article 486 of the Spanish
Penal Code, to wit:
El que contrajere Segundo o ulterior matrimonio sin hallarse
legtimamente disuelto el anterior, ser castigado con la
pena de prision mayor. xxx
The reason why bigamy is considered a felony is to preserve
and ensure the juridical tie of marriage established by law. 20
The phrase "or before the absent spouse had been declared
presumptively dead by means of a judgment rendered in the
proper proceedings" was incorporated in the Revised Penal
Code because the drafters of the law were of the impression
that "in consonance with the civil law which provides for the
presumption of death after an absence of a number of years,
the judicial declaration of presumed death like
annulment of marriage should be a justification for
bigamy."21
For the accused to be held guilty of bigamy, the prosecution
is burdened to prove the felony: (a) he/she has been legally
married; and (b) he/she contracts a subsequent marriage
without the former marriage having been lawfully dissolved.
The felony is consummated on the celebration of the second
marriage or subsequent marriage.22 It is essential in the
prosecution for bigamy that the alleged second marriage,
having all the essential requirements, would be valid were it
not for the subsistence of the first marriage.23 Viada avers
that a third element of the crime is that the second marriage
must be entered into with fraudulent intent (intencion
fraudulente) which is an essential element of a felony by
dolo.24 On the other hand, Cuello Calon is of the view that
there are only two elements of bigamy: (1) the existence of a
marriage that has not been lawfully dissolved; and (2) the
celebration of a second marriage. It does not matter whether
the first marriage is void or voidable because such marriages
have juridical effects until lawfully dissolved by a court of

competent jurisdiction.25 As the Court ruled in Domingo v.
Court of Appeals26 and Mercado v. Tan,27 under the Family
Code of the Philippines, the judicial declaration of nullity of a
previous marriage is a defense.
In his commentary on the Revised Penal Code, Albert is of
the same view as Viada and declared that there are three (3)
elements of bigamy: (1) an undissolved marriage; (2) a new
marriage; and (3) fraudulent intention constituting the felony
of the act.28 He explained that:
This last element is not stated in Article 349, because it is
undoubtedly incorporated in the principle antedating all
codes, and, constituting one of the landmarks of our Penal
Code, that, where there is no willfulness there is no crime.
There is no willfulness if the subject
believes that the former marriage has been dissolved; and
this must be supported by very strong evidence, and if this be
produced, the act shall be deemed not to constitute a crime.
Thus, a person who contracts a second marriage in the
reasonable and well-founded belief that his first wife is dead,
because of the many years that have elapsed since he has
had any news of her whereabouts, in spite of his endeavors
to find her, cannot be deemed guilty of the crime of bigamy,
because there is no fraudulent intent which is one of the
essential elements of the crime.29
As gleaned from the Information in the RTC, the petitioner is
charged with bigamy, a felony by dolo (deceit). Article 3,
paragraph 2 of the Revised Penal Code provides that there is
deceit when the act is performed with deliberate intent.
Indeed, a felony cannot exist without intent. Since a felony by
dolo is classified as an intentional felony, it is deemed
voluntary.30 Although the words "with malice" do not appear in
Article 3 of the Revised Penal Code, such phrase is included
in the word "voluntary."31
Malice is a mental state or condition prompting the doing of
an overt act without legal excuse or justification from which
another suffers injury.32 When the act or omission defined by
law as a felony is proved to have been done or committed by
the accused, the law presumes it to have been intentional. 33
Indeed, it is a legal presumption of law that every man
intends the natural or probable consequence of his voluntary
act in the absence of proof to the contrary, and such
presumption must prevail unless a reasonable doubt exists
from a consideration of the whole evidence.34
For one to be criminally liable for a felony by dolo, there must
be a confluence of both an evil act and an evil intent. Actus
non facit reum, nisi mens sit rea.35
In the present case, the prosecution proved that the
petitioner was married to Gaa in 1975, and such marriage
was not judicially declared a nullity; hence, the marriage is
presumed to subsist.36 The prosecution also proved that the
petitioner married the private complainant in 1996, long after
the effectivity of the Family Code.
The petitioner is presumed to have acted with malice or evil
73
intent when he married the private complainant. As a general
rule, mistake of fact or good faith of the accused is a valid
defense in a prosecution for a felony by dolo; such defense
negates malice or criminal intent. However, ignorance of the
law is not an excuse because everyone is presumed to know
the law. Ignorantia legis neminem excusat.
It was the burden of the petitioner to prove his defense that
when he married the private complainant in 1996, he was of
the well-grounded belief
that his first wife was already dead, as he had not heard from
her for more than 20 years since 1975. He should have
adduced in evidence a decision of a competent court
declaring the presumptive death of his first wife as required
by Article 349 of the Revised Penal Code, in relation to Article
41 of the Family Code. Such judicial declaration also
constitutes proof that the petitioner acted in good faith, and
would negate criminal intent on his part when he married the
private complainant and, as a consequence, he could not be
held guilty of bigamy in such case. The petitioner, however,
failed to discharge his burden.
The phrase "or before the absent spouse has been declared
presumptively dead by means of a judgment rendered on the
proceedings" in Article 349 of the Revised Penal Code was
not an aggroupment of empty or useless words. The
requirement for a judgment of the presumptive death of the
absent spouse is for the benefit of the spouse present, as
protection from the pains and the consequences of a second
marriage, precisely because he/she could be charged and
convicted of bigamy if the defense of good faith based on
mere testimony is found incredible.
The requirement of judicial declaration is also for the benefit
of the State. Under Article II, Section 12 of the Constitution,
the "State shall protect and strengthen the family as a basic
autonomous social institution." Marriage is a social institution
of the highest importance. Public policy, good morals and the
interest of society require that the marital relation should be
surrounded with every safeguard and its severance only in
the manner prescribed and the causes specified by law. 37 The
laws regulating civil marriages are necessary to serve the
interest, safety, good order, comfort or general welfare of the
community and the parties can waive nothing essential to the
validity of the proceedings. A civil marriage anchors an
ordered society by encouraging stable relationships over
transient ones; it enhances the welfare of the community.
In a real sense, there are three parties to every civil
marriage; two willing spouses and an approving State. On
marriage, the parties assume new relations to each other and
the State touching nearly on every aspect of life and death.
The consequences of an invalid marriage to the parties, to
innocent parties and to society, are so serious that the law
may well take means calculated to ensure the procurement
of the most positive evidence of death of the first spouse or
of the presumptive death of the absent spouse 38 after the
lapse of the period provided for under the law. One such
means is the requirement of the declaration by a competent
court of the presumptive death of an absent spouse as proof

that the present spouse contracts a subsequent marriage on
a well-grounded belief of the death of the first spouse.
Indeed, "men readily believe what they wish to be true," is a
maxim of the old jurists. To sustain a second marriage and to
vacate a first because one of the parties believed the other to
be dead would make the existence of the marital relation
determinable, not by certain extrinsic facts, easily capable of
forensic ascertainment and proof, but by the subjective
condition of individuals.39 Only with such proof can marriage
be treated as so dissolved as to permit second marriages. 40
Thus, Article 349 of the Revised Penal Code has made the
dissolution of marriage dependent not only upon the personal
belief of parties, but upon certain objective facts easily
capable of accurate judicial cognizance, 41 namely, a judgment
of the presumptive death of the absent spouse.
The petitioners sole reliance on Article 390 of the Civil Code
as basis for his acquittal for bigamy is misplaced.
74
forth in the provisions of Article 391 of the Civil Code, an
absence of only two years shall be sufficient.
For the purpose of contracting the subsequent marriage
under the preceding paragraph, the spouse present must
institute a summary proceeding as provided in this Court for
the declaration of presumptive death of the absentee, without
prejudice to the effect of reappearance of the absent
spouse.43
With the effectivity of the Family Code, 44 the period of seven
years under the first paragraph of Article 390 of the Civil
Code was reduced to four consecutive years. Thus, before
the spouse present may contract a subsequent marriage, he
or she must institute summary proceedings for the
declaration of the presumptive death of the absentee
spouse,45 without prejudice to the effect of the reappearance
of the absentee spouse. As explained by this Court in Armas
v. Calisterio:46
Articles 390 and 391 of the Civil Code provide

Art. 390. After an absence of seven years, it being unknown
whether or not, the absentee still lives, he shall be presumed
dead for all purposes, except for those of succession.
The absentee shall not be presumed dead for the purpose of
opening his succession till after an absence of ten years. If
he disappeared after the age of seventy-five years, an
absence of five years shall be sufficient in order that his
succession may be opened.
Art. 391. The following shall be presumed dead for all
purposes, including the division of the estate among the
heirs:
(1) A person on board a vessel lost during a sea voyage, or
an aeroplane which is missing, who has not been heard of for
four years since the loss of the vessel or aeroplane;
(2) A person in the armed forces who has taken part in war,
and has been missing for four years;
(3) A person who has been in danger of death under other
circumstances and his existence has not been known for four
years.
The presumption of death of the spouse who had been
absent for seven years, it being unknown whether or not the
absentee still lives, is created by law and arises without any
necessity of judicial declaration. 42 However, Article 41 of the
Family Code, which amended the foregoing rules on
presumptive death, reads:
Art. 41. A marriage contracted by any person during the
subsistence of a previous marriage shall be null and void,
unless before the celebration of the subsequent marriage,
the prior spouse had been absent for four consecutive years
and the spouse present had a well-founded belief that the
absent spouse was already dead. In case of disappearance
where there is danger of death under the circumstances set
In contrast, under the 1988 Family Code, in order that a

subsequent bigamous marriage may exceptionally be
considered valid, the following conditions must concur, viz.:
(a) The prior spouse of the contracting party must have been
absent for four consecutive years, or two years where there
is danger of death under the circumstances stated in Article
391 of the Civil Code at the time of disappearance; (b) the
spouse present has a well-founded belief that the absent
spouse is already dead; and (c) there is, unlike the old rule, a
judicial declaration of presumptive death of the absentee for
which purpose the spouse present can institute a summary
proceeding in court to ask for that declaration. The last
condition is consistent and in consonance with the
requirement of judicial intervention in subsequent marriages
as so provided in Article 41, in relation to Article 40, of the
Family Code.
The Court rejects petitioners contention that the requirement
of instituting a petition for declaration of presumptive death
under Article 41 of the Family Code is designed merely to
enable the spouse present to contract a valid second
marriage and not for the acquittal of one charged with
bigamy. Such provision was designed to harmonize civil law
and Article 349 of the Revised Penal Code, and put to rest
the confusion spawned by the rulings of this Court and
comments of eminent authorities on Criminal Law.
As early as March 6, 1937, this Court ruled in Jones v.
Hortiguela47 that, for purposes of the marriage law, it is not
necessary to have the former spouse judicially declared an
absentee before the spouse present may contract a
subsequent marriage. It held that the declaration of absence
made in accordance with the provisions of the Civil Code has
for its sole purpose the taking of the necessary precautions
for the administration of the estate of the absentee. For the
celebration of civil marriage, however, the law only requires
that the former spouse had been absent for seven
consecutive years at the time of the second marriage, that
the spouse present does not know his or her former spouse
to be living, that such former spouse is generally reputed to
be dead and the spouse present so believes at the time of

the celebration of the marriage.48 In In Re Szatraw,49 the
Court declared that a judicial declaration that a person is
presumptively dead, because he or she had been unheard
from in seven years, being a presumption juris tantum only,
subject to contrary proof, cannot reach the stage of finality or
become final; and that proof of actual death of the person
presumed dead being unheard from in seven years, would
have to be made in another proceeding to have such
particular fact finally determined. The Court ruled that if a
judicial decree declaring a person presumptively dead
because he or she had not been heard from in seven years
cannot become final and executory even after the lapse of
the reglementary period within which an appeal may be
taken, for such presumption is still disputable and remains
subject to contrary proof, then a petition for such a
declaration is useless, unnecessary, superfluous and of no
benefit to the petitioner. The Court stated that it should not
waste its valuable time and be made to perform a
superfluous and meaningless act.50 The Court also took note
that a petition for a declaration of the presumptive death of
an absent spouse may even be made in collusion with the
other spouse.
In Lukban v. Republic of the Philippines,51 the Court declared
that the words "proper proceedings" in Article 349 of the
Revised Penal Code can only refer to those authorized by
law such as Articles 390 and 391 of the Civil Code which
refer to the administration or settlement of the estate of a
deceased person. In Gue v. Republic of the Philippines,52 the
Court rejected the contention of the petitioner therein that,
under Article 390 of the Civil Code, the courts are authorized
to declare the presumptive death of a person after an
absence of seven years. The Court reiterated its rulings in
Szatraw, Lukban and Jones.
Former Chief Justice Ramon C. Aquino was of the view that
"the provision of Article 349 or "before the absent spouse has
been declared presumptively dead by means of a judgment
reached in the proper proceedings" is erroneous and should
be considered as not written. He opined that such provision
presupposes that, if the prior marriage has not been legally
dissolved and the absent first spouse has not been declared
presumptively dead in a proper court proceedings, the
subsequent marriage is bigamous. He maintains that the
supposition is not true.53 A second marriage is bigamous only
when the circumstances in paragraphs 1 and 2 of Article 83
of the Civil Code are not present. 54 Former Senator Ambrosio
Padilla was, likewise, of the view that Article 349 seems to
require judicial decree of dissolution or judicial declaration of
absence but even with such decree, a second marriage in
good faith will not constitute bigamy. He posits that a second
marriage, if not illegal, even if it be annullable, should not
give rise to bigamy.55 Former Justice Luis B. Reyes, on the
other hand, was of the view that in the case of an absent
spouse who could not yet be presumed dead according to
the Civil Code, the spouse present cannot be charged and
convicted of bigamy in case he/she contracts a second
marriage.56
The Committee tasked to prepare the Family Code proposed
the amendments of Articles 390 and 391 of the Civil Code to
conform to Article 349 of the Revised Penal Code, in that, in
75
a case where a spouse is absent for the requisite period, the
present spouse may contract a subsequent marriage only
after securing a judgment declaring the presumptive death of
the absent spouse to avoid being charged and convicted of
bigamy; the present spouse will have to adduce evidence
that he had a well-founded belief that the absent spouse was
already dead.57 Such judgment is proof of the good faith of
the present spouse who contracted a subsequent marriage;
thus, even if the present spouse is later charged with bigamy
if the absentee spouse reappears, he cannot be convicted of
the crime. As explained by former Justice Alicia Sempio-Diy:
Such rulings, however, conflict with Art. 349 of the Revised
Penal Code providing that the present spouse must first ask
for a declaration of presumptive death of the absent spouse
in order not to be guilty of bigamy in case he or she marries
again.
The above Article of the Family Code now clearly provides
that for the purpose of the present spouse contracting a
second marriage, he or she must file a summary proceeding
as provided in the Code for the declaration of the
presumptive death of the absentee, without prejudice to the
latters reappearance. This provision is intended to protect
the present spouse from a criminal prosecution for bigamy
under Art. 349 of the Revised Penal Code because with the
judicial declaration that the missing spouses presumptively
dead, the good faith of the present spouse in contracting a
second marriage is already established.58
Of the same view is former Dean Ernesto L. Pineda (now
Undersecretary of Justice) who wrote that things are now
clarified. He says judicial declaration of presumptive death is
now authorized for purposes of
remarriage. The present spouse must institute a summary
proceeding for declaration of presumptive death of the
absentee, where the ordinary rules of procedure in trial will
not be followed. Affidavits will suffice, with possible
clarificatory examinations of affiants if the Judge finds it
necessary for a full grasp of the facts. The judgment
declaring an absentee as presumptively dead is without
prejudice to the effect of reappearance of the said absentee.
Dean Pineda further states that before, the weight of
authority is that the clause "before the absent spouse has
been declared presumptively dead x x x" should be
disregarded because of Article 83, paragraph 3 of the Civil
Code. With the new law, there is a need to institute a
summary proceeding for the declaration of the presumptive
death of the absentee, otherwise, there is bigamy.59
According to Retired Supreme Court Justice Florenz D.
Regalado, an eminent authority on Criminal Law, in some
cases where an absentee spouse is believed to be dead,
there must be a judicial declaration of presumptive death,
which could then be made only in the proceedings for the
settlement of his estate.60 Before such declaration, it was held
that the remarriage of the other spouse is bigamous even if
done in good faith.61 Justice Regalado opined that there were
contrary views because of the ruling in Jones and the
76

provisions of Article 83(2) of the Civil Code, which, however,
appears to have been set to rest by Article 41 of the Family
Code, "which requires a summary hearing for the declaration
of presumptive death of the absent spouse before the other
spouse can remarry."
Under Article 238 of the Family Code, a petition for a
declaration of the presumptive death of an absent spouse
under Article 41 of the Family Code may be filed under
Articles 239 to 247 of the same Code.62
On the second issue, the petitioner, likewise, faults the trial
court and the CA for awarding moral damages in favor of the
private complainant. The petitioner maintains that moral
damages may be awarded only in any of the cases provided
in Article 2219 of the Civil Code, and bigamy is not one of
them. The petitioner asserts that the appellate court failed to
apply its ruling in People v. Bondoc,63 where an award of
moral damages for bigamy was disallowed. In any case, the
petitioner maintains, the private complainant failed to adduce
evidence to prove moral damages.
The appellate court awarded moral damages to the private
complainant on its finding that she adduced evidence to
prove the same. The appellate court ruled that while bigamy
is not included in those cases enumerated in Article 2219 of
the Civil Code, it is not proscribed from awarding moral
damages against the petitioner. The appellate court ruled that
it is not bound by the following ruling in People v. Bondoc:
... Pero si en dichos asuntos se adjudicaron daos, ello se
debi indedublamente porque el articulo 2219 del Cdigo
Civil de Filipinas autoriza la adjudicacin de daos morales
en los delitos de estupro, rapto, violacin, adulterio o
concubinato, y otros actos lascivos, sin incluir en esta
enumeracin el delito de bigamia. No existe, por
consiguiente, base legal para adjudicar aqu los daos de
P5,000.00 arriba mencionados.64
The OSG posits that the findings and ruling of the CA are
based on the evidence and the law. The OSG, likewise, avers
that the CA was not bound by its ruling in People v. Rodeo.
The Court rules against the petitioner.
Moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, and similar injury.
Though incapable of pecuniary computation, moral damages
may be recovered if they are the proximate result of the
defendants wrongful act or omission. 65 An award for moral
damages requires the confluence of the following conditions:
first, there must be an injury, whether physical, mental or
psychological, clearly sustained by the claimant; second,
there must be culpable act or omission factually established;
third, the wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant; and
fourth, the award of damages is predicated on any of the
cases stated in Article 2219 or Article 2220 of the Civil
Code.66
Moral damages may be awarded in favor of the offended

party only in criminal cases enumerated in Article 2219,
paragraphs 1, 3, 4, 5 and 7 of the Civil Code and analogous
cases, viz.:
Art. 2219. Moral damages may be recovered in the following
and analogous cases.
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(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 article 309;
(10) Acts and actions referred to in articles 21, 26, 27, 28, 29,
30, 32, 34 and 35.
The parents of the female seduced, abducted, raped, or
abused, referred to in No. 3 of this article, may also recover
moral damages.
The spouse, descendants, ascendants, and brothers and
sisters may bring the action mentioned in No. 9 of this article
in the order named.
Thus, the law does not intend that moral damages should be
awarded in all cases where the aggrieved party has suffered
mental anguish, fright, moral anxieties, besmirched
reputation, wounded feelings, moral shock, social humiliation
and similar injury arising out of an act or omission of another,
otherwise, there would not have been any reason for the
inclusion of specific acts in Article 2219 67 and analogous
cases (which refer to those cases bearing analogy or
resemblance, corresponds to some others or resembling, in
other respects, as in form, proportion, relation, etc.) 68
Indeed, bigamy is not one of those specifically mentioned in
Article 2219 of the Civil Code in which the offender may be
ordered to pay moral damages to the private
complainant/offended party. Nevertheless, the petitioner is
liable to the private complainant for moral damages under
Article 2219 in relation to Articles 19, 20 and 21 of the Civil
Code.
According to Article 19, "every person must, in the exercise of
his rights and in the performance of his act with justice, give
everyone his due, and observe honesty and good faith." This

provision contains what is commonly referred to as the
principle of abuse of rights, and sets certain standards which
must be observed not only in the exercise of ones rights but
also in the performance of ones duties. The standards are
the following: act with justice; give everyone his due; and
observe honesty and good faith. The elements for abuse of
rights are: (a) there is a legal right or duty; (b) exercised in
bad faith; and (c) for the sole intent of prejudicing or injuring
another.69
Article 20 speaks of the general sanctions of all other
provisions of law which do not especially provide for its own
sanction. When a right is exercised in a manner which does
not conform to the standards set forth in the said provision
and results in damage to another, a legal wrong is thereby
committed for which the wrongdoer must be responsible. 70 If
the provision does not provide a remedy for its violation, an
action for damages under either Article 20 or Article 21 of the
Civil Code would be proper. Article 20 provides that "every
person who, contrary to law, willfully or negligently causes
damage to another shall indemnify the latter for the same."
On the other hand, Article 21 provides that "any person who
willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall
compensate the latter for damages." The latter provision
is adopted to remedy "the countless gaps in the statutes
which leave so many victims of moral wrongs helpless, even
though they have actually suffered material and moral injury
should vouchsafe adequate legal remedy for that untold
number of moral wrongs which it is impossible for human
foresight to prove for specifically in the statutes." Whether or
not the principle of abuse of rights has been violated resulting
in damages under Article 20 or Article 21 of the Civil Code or
other applicable provisions of law depends upon the
circumstances of each case.71
In the present case, the petitioner courted the private
complainant and proposed to marry her. He assured her that
he was single. He even brought his parents to the house of
the private complainant where he and his parents made the
same assurance that he was single. Thus, the private
complainant agreed to marry the petitioner, who even stated
in the certificate of marriage that he was single. She lived
with the petitioner and dutifully performed her duties as his
wife, believing all the while that he was her lawful husband.
For two years or so until the petitioner heartlessly abandoned
her, the private complainant had no inkling that he was
already married to another before they were married.
Thus, the private complainant was an innocent victim of the
petitioners chicanery and heartless deception, the fraud
consisting not of a single act alone, but a continuous series
of acts. Day by day, he maintained the appearance of being a
lawful husband to the private complainant, who
changed her status from a single woman to a married
woman, lost the consortium, attributes and support of a
single man she could have married lawfully and endured
mental pain and humiliation, being bound to a man who it
turned out was not her lawful husband.72
77
The Court rules that the petitioners collective acts of fraud
and deceit before, during and after his marriage with the
private complainant were willful, deliberate and with malice
and caused injury to the latter. That she did not sustain any
physical injuries is not a bar to an award for moral damages.
Indeed, in Morris v. Macnab,73 the New Jersey Supreme
Court ruled:
xxx The defendant cites authorities which indicate that,
absent physical injuries, damages for shame, humiliation,
and mental anguish are not recoverable where the actor is
simply negligent. See Prosser, supra, at p. 180; 2 Harper &
James, Torts, 1031 (1956). But the authorities all recognize
that where the wrong is willful rather than negligent, recovery
may be had for the ordinary, natural, and proximate
consequences though they consist of shame, humiliation,
and mental anguish. See Spiegel v. Evergreen Cemetery
Co., 117 NJL 90, 94, 186 A 585 (Sup. Ct. 1936); Kuzma v.
Millinery Workers, etc., Local 24, 27 N.J. Super, 579, 591, 99
A.2d 833 (App. Div. 1953); Prosser, supra, at p. 38. Here the
defendants conduct was not merely negligent, but was
willfully and maliciously wrongful. It was bound to result in
shame, humiliation, and mental anguish for the plaintiff, and
when such result did ensue the plaintiff became entitled not
only to compensatory but also to punitive damages. See
Spiegel v. Evergreen Cemetery Co., supra; Kuzma v Millinery
Workers, etc., Local 24, supra. CF. Note, "Exemplary
Damages in the Law of Torts," 70 Harv. L. Rev. 517 (1957).
The plaintiff testified that because of the defendants
bigamous marriage to her and the attendant publicity she not
only was embarrassed and "ashamed to go out" but "couldnt
sleep" but "couldnt eat," had terrific headaches" and "lost
quite a lot of weight." No just basis appears for judicial
interference with the jurys reasonable allowance of $1,000
punitive damages on the first count. See Cabakov v.
Thatcher, 37 N.J. Super 249, 117 A.2d 298 (App. Div. 74 1955).
The Court thus declares that the petitioners acts are against
public policy as they undermine and subvert the family as a
social institution, good morals and the interest and general
welfare of society.
Because the private complainant was an innocent victim of
the petitioners perfidy, she is not barred from claiming moral
damages. Besides, even considerations of public policy
would not prevent her from recovery. As held in Jekshewitz v.
Groswald:75
Where a person is induced by the fraudulent representation
of another to do an act which, in consequence of such
misrepresentation, he believes to be neither illegal nor
immoral, but which is in fact a criminal offense, he has a right
of action against the person so inducing him for damages
sustained by him in consequence of his having done such
act. Burrows v. Rhodes, [1899] 1 Q.B. 816. In Cooper v.
Cooper, 147 Mass. 370, 17 N.E. 892, 9 Am. St. Rep. 721, the
court said that a false representation by the defendant that
he was divorced from his former wife, whereby the plaintiff
was induced to marry him, gave her a remedy in tort for
deceit. It seems to have been assumed that the fact that she
had unintentionally violated the law or innocently committed a
78

crime by cohabiting with him would be no bar to the action,
but rather that it might be a ground for enhancing her
damages. The injury to the plaintiff was said to be in her
being led by the promise to give the fellowship and
assistance of a wife to one who was not her husband and to
assume and act in a relation and condition that proved to be
false and ignominious. Damages for such an injury were held
to be recoverable in Sherman v. Rawson, 102 Mass. 395 and
Kelley v. Riley, 106 Mass. 339, 343, 8 Am. Rep. 336.
Furthermore, in the case at bar the plaintiff does not base her
cause of action upon any transgression of the law by herself
but upon the defendants misrepresentation. The criminal
relations which followed, innocently on her part, were but one
of the incidental results of the defendants fraud for which
damages may be assessed.
[7] Actions for deceit for fraudulently inducing a woman to
enter into the marriage relation have been maintained in
other jurisdictions. Sears v. Wegner, 150 Mich. 388, 114 N.W.
224, 17 L.R. A. (N.S.) 819; Larson v. McMillan, 99 Wash.
626, 170 P. 324; Blossom v. Barrett, 37 N.Y. 434, 97 Am.
Dec. 747; Morril v. Palmer, 68 Vt. 1, 33 A. 829, 33 L.R.A. 411.
Considerations of public policy would not prevent recovery
where the circumstances are such that the plaintiff was
conscious of no moral turpitude, that her illegal action was
induced solely by the defendants misrepresentation, and that
she does not base her cause of action upon any
transgression of the law by herself. Such considerations
distinguish this case from cases in which the court has
refused to lend its aid to the enforcement of a contract illegal
on its face or to one who has consciously and voluntarily
become a party to an illegal act upon which the cause of
action is founded. Szadiwicz v. Cantor, 257 Mass. 518, 520,
154 N.E. 251, 49 A. L. R. 958.76
Considering the attendant circumstances of the case, the
Court finds the award of P200,000.00 for moral damages to
be just and reasonable.
MA. ALICIA AUSTRIA-MARTINEZ, DANTE O. TINGA

Associate Justice Associate Justice
On leave
Associate Justice
ATTESTATION
REYNATO S. PUNO
Associate Justice
Chairman, Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and
the Division Chairmans Attestation, it is hereby certified that
the conclusions in the above decision were reached in
opinion of the Courts Division.
HILARIO G. DAVIDE, JR.
Chief Justice
Footnotes
Penned by Associate Justice Jose C. Reyes, Jr., with
Associate Justices Conrado M. Vasquez, Jr. and Rebecca de
Guia-Salvador, concurring; rollo, pp. 28-41.
1
IN LIGHT OF ALL THE FOREGOING, the petition is

DENIED. The assailed decision of the Court of Appeals is
AFFIRMED. Costs against the petitioner.
Penned by Judge Fernando Vil Pamintuan.
Records, p. 1.
Exhibit "B," records, p. 7.
Exhibit "A," id. at 6.
TSN, April 23, 2002, p. 15.
Exhibit "B," records, p. 7.
TSN, April 23, 2002, p. 15.
SO ORDERED.
ROMEO J. CALLEJO, SR.
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Associate Justice
Chairman
79

10
58 Phil. 817 (1933).
33
People v. Vogel, 46 Cal.2d. 798; 299 P.2d 850 (1956).
11
1 Phil. 109 (1902).
34
Wharton, Criminal Law, Vol. 1, 203.
12
G.R. No. 111656, March 20, 1996, 255 SCRA 202.
35
13
32 Phil 202 (1915).
Manahan, Jr. v. Court of Appeals, G.R. No. 111656, March

20, 1996, 255 SCRA 202.
Marbella-Bobis v. Bobis, G.R. No. 138509, July 31, 2000,
336 SCRA 747.
36
14
G.R. No. 94053, March 17, 1993, 220 SCRA 20.
15
G.R. No. 137110, August 1, 2000, 337 SCRA 122.
37
16
G.R. No. 104818, September 17, 1993, 226 SCRA 572.
38
17
Rollo, p. 41.
18
19
20
Rollo, pp. 14-15.

Supra, at note 14.
Cuello Calon, Derecho Penal Reformado, Vol. V, 627.
aquino, the Revised Penal Code, vol. iii, 497 (1988 ed.)
(emphasis supplied).
People v. Bitdu, supra, at note 10.
Geisselman v. Geisselman, 134 Md. 453, 107 A. 185

(1919).
39
Wharton criminal law, vol. 2, 2377 (12th ed., 1932).
40
Id.
41
Id.
42
Tolentino, The New Civil Code, Vol. I, 690.
43
Emphasis supplied.
21
22
Id. at 634.
23
People v. Dumpo, 62 Phil. 247 (1935).
"Tres son los elementos esenciales del mismo; el

vinculo matrimonial anterior, la celebracin de nuevo
matrimonio antes de la disolucin de ese vinculo anterior, y
por ultimo, la intencin fraudulenta, que constituye la
criminalidad misma del acto. Este ultimo elemento no lo
consigna el articulo, por hallarse indudablemente embebido
en ese principio anterior a todos los Codigos, e inscrito en el
frontispicio del nuestro (Art. I.), que donde no hay voluntad,
no hay delito. xxx" (Codigo Penal Reformado, tomo 5, 560)
Groizard is of the view that bigamy may be committed by
culpa. (id. at 558).
24
25
26
27
28
29
Derecho Penal Reformado, Vol. 1, 629-630.

Supra, at note 16.
Supra, at note 15.
Albert, The revised Penal Code, 819 (1932 ed.).
Id.
l.b. reyes, the Revised Penal Code, book one, 37 (13th ed.
1993).
30
31
32
United States v. Pealosa, 1 Phil. 109.

Wharton, Criminal Law, Volume 1, 302.
The Family Code (Executive Order No. 209) took effect on

August 4, 1988.
44
Navarro v. Domagtoy, A.M. No. MTJ-96-1088, July 19,

1996, 259 SCRA 129.
45
46
G.R. No. 136467, April 6, 2000, 330 SCRA 201.
47
64 Phil. 179 (1937).
48
Id. at 83.
49
81 Phil. 461 (1948).
50
Id. at 463.
51
98 Phil. 574 (1956).
52
107 Phil. 381 (1960).
53
Aquino, Revised Penal Code, Vol. III, 490.
54
Id. at 497.
Padilla, Comments on the Revised Penal Code, Vol. IV,

717-718.
55
56
The Revised Penal Code, 1981 ed., Vol. II, 906.
57
Republic v. Nolasco, supra, at note 19.
58
Handbook on The Family Code, 48-49.
80

The Family Code of the Philippines annotated, 62-63 (1992
ed.).

SUPREME COURT
Manila
THIRD DIVISION
59
regalado, criminal law conspectus, 633 (1st ed., 2000),

citing Lukban v. Republic, supra.
60
Id. citing People v. Reyes, CA-G.R. No. 12107-R, June 30,

1955, and People v. Malana, CA-G.R. No. 5347, January 30,
1940.
G.R. No. 88694 January 11, 1993
61
ALBENSON ENTERPRISES CORP., JESSE YAP, AND

BENJAMIN MENDIONA, petitioners,
62
vs.
63
CA-G.R. No. 22573-R, April 23, 1959.
THE COURT OF APPEALS AND EUGENIO S. BALTAO,

respondents.
64
Article 2217, Civil Code.
Puruganan, Chato, Chato & Tan for petitioners.
Sempio-Diy, Handbook on the Family Code of the

Philippines, 358.
Francisco v. Ferrer, Jr., G.R. No. 142029, February 28,

2001, 353 SCRA 261.
65
66
Id. at 266.
tolentino, new civil code, vol. ii, 658, citing People v. Plaza,
52 O.G. 6609.
67
68
Lino M. Patajo, Francisco Ma. Chanco, Ananiano Desierto

and Segundo Mangohig for private respondent.
Id.
Albenson Enterprises Corp. v. Court of Appeals, G.R. No.

88694, January 11, 1993, 217 SCRA 16.
69
Globe Mackay Cable and Radio Corporation v. Court of

Appeals, G.R. No. 81262, August 25, 1989, 176 SCRA 778.
70
71
Id.
72
Leventhal v. Liberman, 186 N.E. 675 (1933).
73
135 A.2d 657 (1957).
74
Id. at 662.
75
Id. at 611-612.
76
164 N.E. 609 (1929).
BIDIN, J.:
This petition assails the decision of respondent Court of
Appeals in
CA-GR CV No. 14948 entitled "Eugenio S. Baltao, plaintiffappellee vs. Albenson Enterprises Corporation, et al,
defendants-appellants", which modified the judgment of the
Regional Trial Court of Quezon City, Branch XCVIII in Civil
Case No. Q-40920 and ordered petitioner to pay private
respondent, among others, the sum of P500,000.00 as moral
damages and attorney's fees in the amount of P50,000.00.
The facts are not disputed.
In September, October, and November 1980, petitioner
Albenson Enterprises Corporation (Albenson for short)
delivered to Guaranteed Industries, Inc. (Guaranteed for
short) located at 3267 V. Mapa Street, Sta. Mesa, Manila, the
mild steel plates which the latter ordered. As part payment
thereof, Albenson was given Pacific Banking Corporation
Check No. 136361 in the amount of P2,575.00 and drawn
against the account of E.L. Woodworks (Rollo, p. 148).
When presented for payment, the check was dishonored for
the reason "Account Closed." Thereafter, petitioner Albenson,
through counsel, traced the origin of the dishonored check.
From the records of the Securities and Exchange
Commission (SEC), Albenson discovered that the president
of Guaranteed, the recipient of the unpaid mild steel plates,
was one "Eugenio S. Baltao." Upon further inquiry, Albenson
was informed by the Ministry of Trade and Industry that E.L.
Woodworks, a single proprietorship business, was registered
in the name of one "Eugenio Baltao". In addition, upon
verification with the drawee bank, Pacific Banking
Corporation, Albenson was advised that the signature
appearing on the subject check belonged to one "Eugenio
Baltao."
81

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

Benjamin Mendiona, its employee.
In its decision, the lower court observed that "the check is
drawn against the account of "E.L. Woodworks," not of
Guaranteed Industries of which plaintiff used to be President.
Guaranteed Industries had been inactive and had ceased to
exist as a corporation since 1975. . . . . The possibility is that
it was with Gene Baltao or Eugenio Baltao III, a son of
plaintiff who had a business on the ground floor of Baltao
Building located on V. Mapa Street, that the defendants may
have been dealing with . . . ." (Rollo, pp. 41-42).
The dispositive portion of the trial court 's decision reads:
WHEREFORE, judgment is hereby rendered in favor of
plaintiff and against defendants ordering the latter to pay
plaintiff jointly and severally:
1. actual or compensatory damages of P133,350.00;
2. moral damages of P1,000,000.00 (1 million pesos);
3. exemplary damages of P200,000.00;
4. attorney's fees of P100,000.00;
5 costs.
Defendants' counterclaim against plaintiff and claim for
damages against Mercantile Insurance Co. on the bond for
the issuance of the writ of attachment at the instance of
plaintiff are hereby dismissed for lack of merit. (Rollo, pp. 3839).
On appeal, respondent court modified the trial court's
decision as follows:
WHEREFORE, the decision appealed from is MODIFIED by
reducing the moral damages awarded therein from
P1,000,000.00 to P500,000.00 and the attorney's fees from
P100,000.00 to P50,000.00, said decision being hereby
affirmed in all its other aspects. With costs against
appellants. (Rollo, pp. 50-51)
Dissatisfied with the above ruling, petitioners Albenson
Enterprises Corp., Jesse Yap, and Benjamin Mendiona filed
the instant Petition, alleging that the appellate court erred in:
1. Concluding that private respondent's cause of action is not
one based on malicious prosecution but one for abuse of
rights under Article 21 of the Civil Code notwithstanding the
fact that the basis of a civil action for malicious prosecution is
Article 2219 in relation to Article 21 or Article 2176 of the Civil
Code . . . .
2. Concluding that "hitting at and in effect maligning (private
respondent) with an unjust criminal case was, without more,
a plain case of abuse of rights by misdirection" and "was
82

therefore, actionable by itself," and which "became
inordinately blatant and grossly aggravated when . . . (private
respondent) was deprived of his basic right to notice and a
fair hearing in the so-called preliminary investigation . . . . "
3. Concluding that petitioner's "actuations in this case were
coldly deliberate and calculated", no evidence having been
adduced to support such a sweeping statement.
4. Holding the petitioner corporation, petitioner Yap and
petitioner Mendiona jointly and severally liable without
sufficient basis in law and in fact.
5. Awarding respondents
5.1. P133,350.00 as actual or compensatory damages, even
in the absence of sufficient evidence to show that such was
actually suffered.
5.2. P500,000.00 as moral damages considering that the
evidence in this connection merely involved private
respondent's alleged celebrated status as a businessman,
there being no showing that the act complained of adversely
affected private respondent's reputation or that it resulted to
material loss.
5.3. P200,000.00 as exemplary damages despite the fact
that petitioners were duly advised by counsel of their legal
recourse.
civil wrongs has been very greatly broadened; it has become

much more supple and adaptable than the Anglo-American
law on torts. It is now difficult to conceive of any malevolent
exercise of a right which could not be checked by the
application of these articles" (Tolentino, 1 Civil Code of the
Philippines 72).
There is however, no hard and fast rule which can be applied
to determine whether or not the principle of abuse of rights
may be invoked. The question of whether or not the principle
of abuse of rights has been violated, resulting in damages
under Articles 20 and 21 or other applicable provision of law,
depends on the circumstances of each case. (Globe Mackay
Cable and Radio Corporation vs. Court of Appeals, 176
SCRA 778 [1989]).
The elements of an abuse of right under Article 19 are the
following: (1) There is a legal right or duty; (2) which is
exercised in bad faith; (3) for the sole intent of prejudicing or
injuring another. Article 20 speaks of the general sanction for
all other provisions of law which do not especially provide for
their own sanction (Tolentino, supra, p. 71). Thus, anyone
who, whether willfully or negligently, in the exercise of his
legal right or duty, causes damage to another, shall indemnify
his victim for injuries suffered thereby. Article 21 deals with
acts contra bonus mores, and has the following elements: 1)
There is an act which is legal; 2) but which is contrary to
morals, good custom, public order, or public policy; 3) and it
is done with intent to injure.
5.4. P50,000.00 as attorney's fees, no evidence having been

adduced to justify such an award (Rollo, pp. 4-6).
Thus, under any of these three (3) provisions of law, an act

which causes injury to another may be made the basis for an
award of damages.
Petitioners contend that the civil case filed in the lower court
was one for malicious prosecution. Citing the case of Madera
vs. Lopez (102 SCRA 700 [1981]), they assert that the
absence of malice on their part absolves them from any
liability for malicious prosecution. Private respondent, on the
other hand, anchored his complaint for Damages on Articles
19, 20, and 21 ** of the Civil Code.
There is a common element under Articles 19 and 21, and

that is, the act must be intentional. However, Article 20 does
not distinguish: the act may be done either "willfully", or
"negligently". The trial court as well as the respondent
appellate court mistakenly lumped these three (3) articles
together, and cited the same as the bases for the award of
damages in the civil complaint filed against petitioners, thus:
Article 19, known to contain what is commonly referred to as

the principle of abuse of rights, sets certain standards which
may be observed not only in the exercise of one's rights but
also in the performance of one's duties. These standards are
the following: to act with justice; to give everyone his due;
and to observe honesty and good faith. The law, therefore,
recognizes the primordial limitation on all rights: that in their
exercise, the norms of human conduct set forth in Article 19
must be observed. A right, though by itself legal because
recognized or granted by law as such, may nevertheless
become the source of some illegality. When a right is
exercised in a manner which does not conform with the
norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the
wrongdoer must be held responsible. Although the
requirements of each provision is different, these three (3)
articles are all related to each other. As the eminent Civilist
Senator Arturo Tolentino puts it: "With this article (Article 21),
combined with articles 19 and 20, the scope of our law on
With the foregoing legal provisions (Articles 19, 20, and 21)
in focus, there is not much difficulty in ascertaining the
means by which appellants' first assigned error should be
resolved, given the admitted fact that when there was an
attempt to collect the amount of P2,575.00, the defendants
were explicitly warned that plaintiff Eugenio S. Baltao is not
the Eugenio Baltao defendants had been dealing with (supra,
p. 5). When the defendants nevertheless insisted and
persisted in filing a case a criminal case no less against
plaintiff, said defendants ran afoul of the legal provisions
(Articles 19, 20, and 21 of the Civil Code) cited by the lower
court and heretofore quoted (supra).
Defendants, not having been paid the amount of P2,575.00,
certainly had the right to complain. But that right is limited by
certain constraints. Beyond that limit is the area of excess, of
abuse of rights. (Rollo, pp.
44-45).

Assuming, arguendo, that all the three (3) articles, together
and not independently of each one, could be validly made the
bases for an award of damages based on the principle of
"abuse of right", under the circumstances, We see no cogent
reason for such an award of damages to be made in favor of
private respondent.
Certainly, petitioners could not be said to have violated the
aforestated principle of abuse of right. What prompted
petitioners to file the case for violation of Batas Pambansa
Bilang 22 against private respondent was their failure to
collect the amount of P2,575.00 due on a bounced check
which they honestly believed was issued to them by private
respondent. Petitioners had conducted inquiries regarding
the origin of the check, and yielded the following results: from
the records of the Securities and Exchange Commission, it
was discovered that the President of Guaranteed (the
recipient of the unpaid mild steel plates), was one "Eugenio
S. Baltao"; an inquiry with the Ministry of Trade and Industry
revealed that E.L. Woodworks, against whose account the
check was drawn, was registered in the name of one
"Eugenio Baltao"; verification with the drawee bank, the
Pacific Banking Corporation, revealed that the signature
appearing on the check belonged to one "Eugenio Baltao".
In a letter dated December 16, 1983, counsel for petitioners
wrote private respondent demanding that he make good the
amount of the check. Counsel for private respondent wrote
back and denied, among others, that private respondent ever
transacted business with Albenson Enterprises Corporation;
that he ever issued the check in question. Private
respondent's counsel even went further: he made a warning
to defendants to check the veracity of their claim. It is pivotal
to note at this juncture that in this same letter, if indeed
private respondent wanted to clear himself from the baseless
accusation made against his person, he should have made
mention of the fact that there are three (3) persons with the
same name, i.e.: Eugenio Baltao, Sr., Eugenio S. Baltao, Jr.
(private respondent), and Eugenio Baltao III (private
respondent's son, who as it turned out later, was the issuer of
the check). He, however, failed to do this. The last two
Baltaos were doing business in the same building Baltao
Building located at 3267 V. Mapa Street, Sta. Mesa,
Manila. The mild steel plates were ordered in the name of
Guaranteed of which respondent Eugenio S. Baltao is the
president and delivered to Guaranteed at Baltao building.
Thus, petitioners had every reason to believe that the
Eugenio Baltao who issued the bouncing check is
respondent Eugenio S. Baltao when their counsel wrote
respondent to make good the amount of the check and upon
refusal, filed the complaint for violation of BP Blg. 22.
Private respondent, however, did nothing to clarify the case
of mistaken identity at first hand. Instead, private respondent
waited in ambush and thereafter pounced on the hapless
petitioners at a time he thought was propitious by filing an
action for damages. The Court will not countenance this
devious scheme.
The criminal complaint filed against private respondent after
the latter refused to make good the amount of the bouncing
83
check despite demand was a sincere attempt on the part of
petitioners to find the best possible means by which they
could collect the sum of money due them. A person who has
not been paid an obligation owed to him will naturally seek
ways to compel the debtor to pay him. It was normal for
petitioners to find means to make the issuer of the check pay
the amount thereof. In the absence of a wrongful act or
omission or of fraud or bad faith, moral damages cannot be
awarded and that the adverse result of an action does not
per se make the action wrongful and subject the actor to the
payment of damages, for the law could not have meant to
impose a penalty on the right to litigate (Rubio vs. Court of
Appeals, 141 SCRA 488 [1986]).
In the case at bar, private respondent does not deny that the
mild steel plates were ordered by and delivered to
Guaranteed at Baltao building and as part payment thereof,
the bouncing check was issued by one Eugenio Baltao.
Neither had private respondent conveyed to petitioner that
there are two Eugenio Baltaos conducting business in the
same building he and his son Eugenio Baltao III.
Considering that Guaranteed, which received the goods in
payment of which the bouncing check was issued is owned
by respondent, petitioner acted in good faith and probable
cause in filing the complaint before the provincial fiscal.
To constitute malicious prosecution, there must be proof that
the prosecution was prompted by a sinister design to vex and
humiliate a person, and that it was initiated deliberately by
the defendant knowing that his charges were false and
groundless. Concededly, the mere act of submitting a case to
the authorities for prosecution does not make one liable for
malicious prosecution. (Manila Gas Corporation vs. Court of
Appeals, 100 SCRA 602 [1980]). Still, private respondent
argues that liability under Articles 19, 20, and 21 of the Civil
Code is so encompassing that it likewise includes liability for
damages for malicious prosecution under Article 2219 (8).
True, a civil action for damages for malicious prosecution is
allowed under the New Civil Code, more specifically Articles
19, 20, 26, 29, 32, 33, 35, and 2219 (8) thereof. In order that
such a case can prosper, however, the following three (3)
elements must be present, to wit: (1) The fact of the
prosecution and the further fact that the defendant was
himself the prosecutor, and that the action was finally
terminated with an acquittal; (2) That in bringing the action,
the prosecutor acted without probable cause; (3) The
prosecutor was actuated or impelled by legal malice (Lao vs.
Court of Appeals, 199 SCRA 58, [1991]).
Thus, a party injured by the filing of a court case against him,
even if he is later on absolved, may file a case for damages
grounded either on the principle of abuse of rights, or on
malicious prosecution. As earlier stated, a complaint for
damages based on malicious prosecution will prosper only if
the three (3) elements aforecited are shown to exist. In the
case at bar, the second and third elements were not shown
to exist. It is well-settled that one cannot be held liable for
maliciously instituting a prosecution where one has acted
with probable cause. "Probable cause is the existence of
such facts and circumstances as would excite the belief, in a
reasonable mind, acting on the facts within the knowledge of
the prosecutor, that the person charged was guilty of the
84
crime for which he was prosecuted. In other words, a suit will

lie only in cases where a legal prosecution has been carried
on without probable cause. The reason for this rule is that it
would be a very great discouragement to public justice, if
prosecutors, who had tolerable ground of suspicion, were
liable to be sued at law when their indictment miscarried"
(Que vs. Intermediate Appellate Court, 169 SCRA 137
[1989]).
ipso facto justify the award of attorney's fees to the winning

party (Garcia vs. Gonzales, 183 SCRA 72 [1990]).
The presence of probable cause signifies, as a legal

consequence, the absence of malice. In the instant case, it is
evident that petitioners were not motivated by malicious
intent or by sinister design to unduly harass private
respondent, but only by a well-founded anxiety to protect
their rights when they filed the criminal complaint against
private respondent.
Coming now to the claim of private respondent for actual or

compensatory damages, the records show that the same
was based solely on his allegations without proof to
substantiate the same. He did not present proof of the cost of
the medical treatment which he claimed to have undergone
as a result of the nervous breakdown he suffered, nor did he
present proof of the actual loss to his business caused by the
unjust litigation against him. In determining actual damages,
the court cannot rely on speculation, conjectures or
guesswork as to the amount. Without the actual proof of loss,
the award of actual damages becomes erroneous (Guilatco
vs. City of Dagupan, 171 SCRA 382 [1989]).
To constitute malicious prosecution, there must be proof that

the prosecution was prompted by a sinister design to vex and
humiliate a person, that it was initiated deliberately by the
defendant knowing that his charges were false and
groundless. Concededly, the mere act of submitting a case to
the authorities for prosecution does not make one liable for
malicious prosecution. Proof and motive that the institution of
the action was prompted by a sinister design to vex and
humiliate a person must be clearly and preponderantly
established to entitle the victims to damages (Ibid.).
In the case at bar, there is no proof of a sinister design on the
part of petitioners to vex or humiliate private respondent by
instituting the criminal case against him. While petitioners
may have been negligent to some extent in determining the
liability of private respondent for the dishonored check, the
same is not so gross or reckless as to amount to bad faith
warranting an award of damages.
The root of the controversy in this case is founded on a case
of mistaken identity. It is possible that with a more assiduous
investigation, petitioners would have eventually discovered
that private respondent Eugenio S. Baltao is not the "Eugenio
Baltao" responsible for the dishonored check. However, the
record shows that petitioners did exert considerable effort in
order to determine the liability of private respondent. Their
investigation pointed to private respondent as the "Eugenio
Baltao" who issued and signed the dishonored check as the
president of the debtor-corporation Guaranteed Enterprises.
Their error in proceeding against the wrong individual was
obviously in the nature of an innocent mistake, and cannot be
characterized as having been committed in bad faith. This
error could have been discovered if respondent had
submitted his counter-affidavit before investigating fiscal
Sumaway and was immediately rectified by Provincial Fiscal
Mauro Castro upon discovery thereof, i.e., during the
reinvestigation resulting in the dismissal of the complaint.
Furthermore, the adverse result of an action does not per se
make the act wrongful and subject the actor to the payment
of moral damages. The law could not have meant to impose
a penalty on the right to litigate, such right is so precious that
moral damages may not be charged on those who may even
exercise it erroneously. And an adverse decision does not
Thus, an award of damages and attorney's fees is

unwarranted where the action was filed in good faith. If
damage results from a person's exercising his legal rights, it
is damnum absque injuria (Ilocos Norte Electric Company vs.
Court of Appeals, 179 SCRA 5 [1989]).
Actual and compensatory damages are those recoverable

because of pecuniary loss in business, trade, property,
profession, job or occupation and the same must be
proved, otherwise, if the proof is flimsy and unsubstantiated,
no damages will be given (Rubio vs. Court of Appeals, 141
SCRA 488 [1986]). For these reasons, it was gravely
erroneous for respondent court to have affirmed the award of
actual damages in favor of private respondent in the absence
of proof thereof.
Where there is no evidence of the other party having acted in
wanton, fraudulent or reckless, or oppressive manner, neither
may exemplary damages be awarded (Dee Hua Liong
Electrical Equipment Corporation vs. Reyes, 145 SCRA 488
[1986]).
As to the award of attorney's fees, it is well-settled that the
same is the exception rather than the general rule. Needless
to say, the award of attorney's fees must be disallowed where
the award of exemplary damages is eliminated (Article 2208,
Civil Code; Agustin vs. Court of Appeals, 186 SCRA 375
[1990]). Moreover, in view of the fact that there was no
malicious prosecution against private respondent, attorney's
fees cannot be awarded him on that ground.
In the final analysis, there is no proof or showing that
petitioners acted maliciously or in bad faith in the filing of the
case against private respondent. Consequently, in the
absence of proof of fraud and bad faith committed by
petitioners, they cannot be held liable for damages (Escritor,
Jr. vs. Intermediate Appellate Court, 155 SCRA 577 [1987]).
No damages can be awarded in the instant case, whether
based on the principle of abuse of rights, or for malicious
prosecution. The questioned judgment in the instant case
attests to the propensity of trial judges to award damages
without basis. Lower courts are hereby cautioned anew
against awarding unconscionable sums as damages without
bases therefor.
85

WHEREFORE, the petition is GRANTED and the decision of
the Court of Appeals in C.A. G.R. C.V. No. 14948 dated May
13, 1989, is hereby REVERSED and SET ASIDE. Costs
against respondent Baltao.

SUPREME COURT
Manila
FIRST DIVISION
SO ORDERED.
G.R. No. 74431 November 6, 1989
Gutierrez, Jr., Davide, Jr., Romero and Melo, JJ., concur.
PURITA MIRANDA VESTIL and AGUSTIN VESTIL,

petitioners,
vs.
# Footnotes
** "Art. 19. Every person must, in the exercise of his rights
and in the performance of his duties, act with justice, give
INTERMEDIATE APPELLATE COURT, DAVID UY and

TERESITA UY, respondents.
Pablo P. Garcia for petitioners.
"Art. 20. Every person who, contrary to law, willfully or

negligently causes damage to another, shall indemnify the
latter for the same.
Roberto R. Palmares for private respondents.
"Art. 21. Any person who willfully 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.
CRUZ, J.:
Little Theness Tan Uy was dead at the age of three. Her
parents said she died because she was bitten by a dog of the
petitioners, but the latter denied this, claiming they had
nothing to do with the dog. The Uys sued the Vestils, who
were sustained by the trial court. On appeal, the decision of
the court a quo was reversed in favor of the Uys. The Vestils
are now before us. They ask us to set aside the judgment of
the respondent court and to reinstate that of the trial court.
On July 29, 1915, Theness was bitten by a dog while she
was playing with a child of the petitioners in the house of the
late Vicente Miranda, the father of Purita Vestil, at F. Ramos
Street in Cebu City. She was rushed to the Cebu General
Hospital, where she was treated for "multiple lacerated
wounds on the forehead" 1 and administered an anti-rabies
vaccine by Dr. Antonio Tautjo. She was discharged after nine
days but was readmitted one week later due to "vomiting of
saliva." 2 The following day, on August 15, 1975, the child
died. The cause of death was certified as bronchopneumonia. 3
Seven months later, the Uys sued for damages, alleging that
the Vestils were liable to them as the possessors of "Andoy,"
the dog that bit and eventually killed their daughter. The
Vestils rejected the charge, insisting that the dog belonged to
the deceased Vicente Miranda, that it was a tame animal,
and that in any case no one had witnessed it bite Theness.
After trial, Judge Jose R. Ramolete of the Court of First
Instance of Cebu sustained the defendants and dismissed
the complaint. 4
The respondent court arrived at a different conclusion when
the case was appealed. 5 It found that the Vestils were in
possession of the house and the dog and so should be
responsible under Article 2183 of the Civil Code for the
injuries caused by the dog. It also held that the child had died
as a result of the dog bites and not for causes independent
86

thereof as submitted by the appellees. Accordingly, the
Vestils were ordered to pay the Uys damages in the amount
of P30,000.00 for the death of Theness, P12,000.00 for
medical and hospitalization expenses, and P2,000.00 as
attorney's fees.
In the proceedings now before us, Purita Vestil insists that
she is not the owner of the house or of the dog left by her
father as his estate has not yet been partitioned and there
are other heirs to the property. Pursuing the logic of the Uys,
she claims, even her sister living in Canada would be held
responsible for the acts of the dog simply because she is one
of Miranda's heirs. However, that is hardly the point. What
must be determined is the possession of the dog that
admittedly was staying in the house in question, regardless
of the ownership of the dog or of the house.
Article 2183 reads as follows:
The possessor of an animal or whoever may make use of the
same is responsible for the damage which it may cause,
although it may escape or be lost. 'This responsibility shall
cease only in case the damages should come from force
majeure from the fault of the person who has suffered
damage.
Thus, in Afialda v. Hisole, 6 a person hired as caretaker of a
carabao gored him to death and his heirs thereupon sued the
owner of the animal for damages. The complaint was
dismissed on the ground that it was the caretaker's duty to
prevent the carabao from causing injury to any one, including
himself.
Purita Vestil's testimony that she was not in possession of
Miranda's house is hardly credible. She said that the
occupants of the house left by her father were related to him
("one way or the other") and maintained themselves out of a
common fund or by some kind of arrangement (on which,
however, she did not elaborate ). 7 She mentioned as many
as ten of such relatives who had stayed in the house at one
time or another although they did not appear to be close kin. 8
She at least implied that they did not pay any rent,
presumably because of their relation with Vicente Miranda
notwithstanding that she herself did not seem to know them
very well.
There is contrary evidence that the occupants of the house,
were boarders (or more of boarders than relatives) who paid
the petitioners for providing them with meals and
accommodations. It also appears that Purita Vestil had hired
a maid, Dolores Jumao-as, who did the cooking and cleaning
in the said house for its occupants. 9 Her mother, Pacita, who
was a nursemaid of Purita herself, categorically declared that
the petitioners were maintaining boarders in the house where
Theness was bitten by a dog. 10 Another witness, Marcial Lao,
testified that he was indeed a boarder and that the Vestils
were maintaining the house for business purposes. 11 And
although Purita denied paying the water bills for the house,
the private respondents submitted documentary evidence of
her application for water connection with the Cebu Water
District, which strongly suggested that she was administering
the house in question. 12

While it is true that she is not really the owner of the house,
which was still part of Vicente Miranda's estate, there is no
doubt that she and her husband were its possessors at the
time of the incident in question. She was the only heir
residing in Cebu City and the most logical person to take
care of the property, which was only six kilometers from her
own house. 13 Moreover, there is evidence showing that she
and her family regularly went to the house, once or twice
weekly, according to at least one witness, 14 and used it
virtually as a second house. Interestingly, her own daughter
was playing in the house with Theness when the little girl was
bitten by the dog. 15 The dog itself remained in the house
even after the death of Vicente Miranda in 1973 and until
1975, when the incident in question occurred. It is also
noteworthy that the petitioners offered to assist the Uys with
their hospitalization expenses although Purita said she knew
them only casually. 16
The petitioners also argue that even assuming that they were
the possessors of the dog that bit Theness there was no
clear showing that she died as a result thereof. On the
contrary, the death certificate 17 declared that she died of
broncho-pneumonia, which had nothing to do with the dog
bites for which she had been previously hospitalized. The
Court need not involve itself in an extended scientific
discussion of the causal connection between the dog bites
and the certified cause of death except to note that, first,
Theness developed hydrophobia, a symptom of rabies, as a
result of the dog bites, and second, that asphyxia bronchopneumonia, which ultimately caused her death, was a
complication of rabies. That Theness became afraid of water
after she was bitten by the dog is established by the following
testimony of Dr. Tautjo:
COURT: I think there was mention of rabies in the report in
the second admission?
A: Now, the child was continuously vomiting just before I
referred to Dr. Co earlier in the morning and then the father,
because the child was asking for water, the father tried to
give the child water and this child went under the bed, she
did not like to drink the water and there was fright in her
eyeballs. For this reason, because I was in danger there was
rabies, I called Dr. Co.
Q: In other words, the child had hydrophobia?
A: Yes, sir. 18
As for the link between rabies and broncho-pneumonia, the
doctor had the following to say under oath:
A: Now, as 1 said before, broncho-pneumonia can result from
physical, chemical and bacterial means. ... It can be the
result of infection, now, so if you have any other disease
which can lower your resistance you can also get
pneumonia.
87

xxx xxx xxx
Q: Would you say that a person who has rabies may die of
complication which is broncho-pneumonia?
A: Yes.
Q: For the record, I am manifesting that this book shown the
witness is know as CURRENT DIANOSIS & TREATMENT,
1968 by Henry Brainerd, Sheldon Margen and Milton Chaton.
Now, I invite your attention, doctor, to page 751 of this book
under the title "Rabies." There is on this page, "Prognosis" as
a result of rabies and it says: Once the symptoms, have
appeared death inevitably occurs after 2-3 days as a result of
cardiac or respiratory failure or generalized paralysis. After a
positive diagnosis of rabies or after a bite by a suspected
animal if the animal cannot be observed or if the bite is on
the head, give rabies vaccine (duck embryo). Do you believe
in this statement?
According to Manresa the obligation imposed by Article 2183

of the Civil Code is not based on the negligence or on the
presumed lack of vigilance of the possessor or user of the
animal causing the damage. It is based on natural equity and
on the principle of social interest that he who possesses
animals for his utility, pleasure or service must answer for the
damage which such animal may cause. 21
We sustain the findings of the Court of Appeals and approve
the monetary awards except only as to the medical and
hospitalization expenses, which are reduced to P2,026.69, as
prayed for in the complaint. While there is no recompense
that can bring back to the private respondents the child they
have lost, their pain should at least be assuaged by the civil
damages to which they are entitled.
WHEREFORE, the challenged decision is AFFIRMED as
above modified. The petition is DENIED, with costs against
the petitioners. It is so ordered.
A: Yes.
Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ.,

concur.
Q: Would you say therefore that persons who have rabies

may die of respiratory failure which leave in the form of
bronco-pneumonia?
Footnotes
1 Exhibit "2."
A: Broncho-pneumonia can be a complication of rabies. 19

2 Exhibit "17,"p. 3.
On the strength of the foregoing testimony, the Court finds
that the link between the dog bites and the certified cause of
death has beep satisfactorily established. We also reiterate
our ruling in Sison v. Sun Life Assurance Company of
Canada, 20 that the death certificate is not conclusive proof of
the cause of death but only of the fact of death. Indeed, the
evidence of the child's hydrophobia is sufficient to convince
us that she died because she was bitten by the dog even if
the death certificate stated a different cause of death. The
petitioner's contention that they could not be expected to
exercise remote control of the dog is not acceptable. In fact,
Article 2183 of the Civil Code holds the possessor liable even
if the animal should "escape or be lost" and so be removed
from his control. And it does not matter either that, as the
petitioners also contend, the dog was tame and was merely
provoked by the child into biting her. The law does not speak
only of vicious animals but covers even tame ones as long as
they cause injury. As for the alleged provocation, the
petitioners forget that Theness was only three years old at
the time she was attacked and can hardly be faulted for
whatever she might have done to the animal.
It is worth observing that the above defenses of the
petitioners are an implied rejection of their original posture
that there was no proof that it was the dog in their father's
house that bit Theness.
3 Exhibit "7-A."
4 Decision, rollo, p. 32.
5 Campos, Jr., J., with Pascual, Camilon and Juado, JJ.,
concuring.
6 85 Phi1. 67.
7 TSN, October 28, 1978, pp. 17-18.
8 Ibid., pp. 16-17.
9 TSN, October 4, 1975, pp. 58-59.
10 Ibid. pp. 66.
11 TSN, January 19, 1976, pp. 30-31.
12 Exhibit "J."
13 Rollo, P. 18.
14 TSN, January 19, 1976, p. 53.
15 TSN, October 3, 1978, p. 17.
16 TSN, October 28, 1976, pp. 14-15.
88

17 Exhibit "7."
19 TSN, November 10, 1977, pp. 34-37,
18 TSN, January 19, 1976, pp. 11-12.
20 47 O.G. 1954. 21 Sangco, Torts and damages, 1978 Ed.,

p. 227.

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1

TORTS || First Batch

TORTS || First Batch

G.R. No. 126486 February 9, 1998

Phils., Inc. filed a complaint before the Pasig Regional Trial

After hearing, the trial court on 17 June 1991 rendered its

The instant petition raises two issues: (1) whether or not

WHEREFORE, from all the foregoing considerations, the

The facts are undisputed:

1. P3,108,000.00 constituting the unpaid balance of

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

2. 25% of the preceding obligation for and as attorney's fees;

TORTS || First Batch

Petitioner Barons Marketing is now before this Court alleging

spanning more than 13 years before the complaint was filed,

Expounding on its theory, petitioner states:

Petitioner does not deny private respondent's rights to

In the ordinary course of events, a suit for collection of a sum

2. 5% of the preceding obligation for and as attorney's fees.

Art. 1248. Unless there is an express stipulation to that

xxx xxx xxx

TORTS || First Batch

the provisions of Article 21, petitioner cannot be entitled to

TORTS || First Batch

5 See Melendez v. Lavarias, 9 SCRA 548 (1963).

It is true that we have upheld the reasonableness of penalties

Private respondent, however, argues that petitioner failed to

14 Art. 1158, Civil Code.

Private respondent's attempts to dissuade us from reducing

15 Art. 1315, Civil Code.

TORTS || First Batch

DR. GENEVIEVE L. HUANG, Petitioner,

any person around but the two of them. They carefully

TORTS || First Batch

Petitioner, once again, consulted Dr. Sibayan, who simply

Petitioners condition did not get better. Hence, sometime in

1. Cerebral Concussion and Contusion

By reason of the unfortunate 11 June 1995 incident inside the

5. Cervical Sprain, chronic recurrent

In November 1995, petitioner went to the United States of

It is my opinion that the symptoms she complained of in the

TORTS || First Batch

Respondents, on the other hand, denied all the material

Afterwards, Dr. Dalumpines went back to petitioner and

According to respondents PHI and DTPCI, a sufficient notice

On 13 June 1995, petitioner called up Dr. Dalumpines. The

Further, on 11 June 1995, at round 7:00 p.m., the hotels

Also, during one of their telephone conversations, petitioner

Immediately, Ms. Pearlie got hold of her medical kit and

TORTS || First Batch

TORTS || First Batch

Three. We cannot likewise subscribe to petitioners assertion

TORTS || First Batch

proved, the lower courts erred in shifting the burden to

TORTS || First Batch

TORTS || First Batch

TORTS || First Batch

consequence thereof, if she only acted with care and caution,

TORTS || First Batch

establishes the plaintiffs prima facie case. The doctrine rests

TORTS || First Batch

Dr. Dalumpines Certification dated 7 September 1995:

Secondly, the findings of Dr. Perez did not prove a causal