Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-109937 March 21, 1994

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS and the ESTATE OF THE LATE JUAN B. DANS, represented by
CANDIDA G. DANS, and the DBP MORTGAGE REDEMPTION INSURANCE
POOL, respondents.

Office of the Legal Counsel for petitioner.

Reyes, Santayana, Molo & Alegre for DBP Mortgage Redemption Insurance Pool.

QUIASON, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court to reverse
and set aside the decision of the Court of Appeals in CA-G.R CV No. 26434 and its resolution
denying reconsideration thereof.

We affirm the decision of the Court of Appeals with modification.

In May 1987, Juan B. Dans, together with his wife Candida, his son and daughter-in-law,
applied for a loan of P500,000.00 with the Development Bank of the Philippines (DBP), Basilan
Branch. As the principal mortgagor, Dans, then 76 years of age, was advised by DBP to obtain
a mortgage redemption insurance (MRI) with the DBP Mortgage Redemption Insurance Pool
(DBP MRI Pool).

A loan, in the reduced amount of P300,000.00, was approved by DBP on August 4, 1987 and
released on August 11, 1987. From the proceeds of the loan, DBP deducted the amount of
P1,476.00 as payment for the MRI premium. On August 15, 1987, Dans accomplished and
submitted the "MRI Application for Insurance" and the "Health Statement for DBP MRI Pool."

On August 20, 1987, the MRI premium of Dans, less the DBP service fee of 10 percent, was
credited by DBP to the savings account of the DBP MRI Pool. Accordingly, the DBP MRI Pool
was advised of the credit.

On September 3, 1987, Dans died of cardiac arrest. The DBP, upon notice, relayed this
information to the DBP MRI Pool. On September 23, 1987, the DBP MRI Pool notified DBP that
Dans was not eligible for MRI coverage, being over the acceptance age limit of 60 years at the
time of application.

On October 21, 1987, DBP apprised Candida Dans of the disapproval of her late husband's MRI
application. The DBP offered to refund the premium of P1,476.00 which the deceased had paid,
but Candida Dans refused to accept the same, demanding payment of the face value of the MRI
or an amount equivalent to the loan. She, likewise, refused to accept an ex gratia settlement of
P30,000.00, which the DBP later offered.

On February 10, 1989, respondent Estate, through Candida Dans as administratrix, filed a
complaint with the Regional Trial Court, Branch I, Basilan, against DBP and the insurance pool
for "Collection of Sum of Money with Damages." Respondent Estate alleged that Dans became
insured by the DBP MRI Pool when DBP, with full knowledge of Dans' age at the time of
application, required him to apply for MRI, and later collected the insurance premium thereon.
Respondent Estate therefore prayed: (1) that the sum of P139,500.00, which it paid under
protest for the loan, be reimbursed; (2) that the mortgage debt of the deceased be declared fully
paid; and (3) that damages be awarded.

The DBP and the DBP MRI Pool separately filed their answers, with the former asserting a
cross-claim against the latter.

At the pre-trial, DBP and the DBP MRI Pool admitted all the documents and exhibits submitted
by respondent Estate. As a result of these admissions, the trial court narrowed down the issues
and, without opposition from the parties, found the case ripe for summary judgment.
Consequently, the trial court ordered the parties to submit their respective position papers and
documentary evidence, which may serve as basis for the judgment.

On March 10, 1990, the trial court rendered a decision in favor of respondent Estate and against
DBP. The DBP MRI Pool, however, was absolved from liability, after the trial court found no
privity of contract between it and the deceased. The trial court declared DBP in estoppel for
having led Dans into applying for MRI and actually collecting the premium and the service fee,
despite knowledge of his age ineligibility. The dispositive portion of the decision read as follows:

WHEREFORE, in view of the foregoing consideration and in the furtherance of

justice and equity, the Court finds judgment for the plaintiff and against
Defendant DBP, ordering the latter:

1. To return and reimburse plaintiff the amount of P139,500.00 plus legal rate of
interest as amortization payment paid under protest;

2. To consider the mortgage loan of P300,000.00 including all interest

accumulated or otherwise to have been settled, satisfied or set-off by virtue of the
insurance coverage of the late Juan B. Dans;

3. To pay plaintiff the amount of P10,000.00 as attorney's fees;

4. To pay plaintiff in the amount of P10,000.00 as costs of litigation and other

expenses, and other relief just and equitable.

The Counterclaims of Defendants DBP and DBP MRI POOL are hereby
dismissed. The Cross-claim of Defendant DBP is likewise dismissed (Rollo, p.
79)

The DBP appealed to the Court of Appeals. In a decision dated September 7, 1992, the
appellate court affirmedin toto the decision of the trial court. The DBP's motion for
reconsideration was denied in a resolution dated April 20, 1993.

Hence, this recourse.

II

When Dans applied for MRI, he filled up and personally signed a "Health Statement for DBP
MRI Pool" (Exh. "5-Bank") with the following declaration:

I hereby declare and agree that all the statements and answers contained herein
are true, complete and correct to the best of my knowledge and belief and form
part of my application for insurance. It is understood and agreed that no
insurance coverage shall be effected unless and until this application is approved
and the full premium is paid during my continued good health (Records, p. 40).

Under the aforementioned provisions, the MRI coverage shall take effect: (1) when the
application shall be approved by the insurance pool; and (2) when the full premium is paid
during the continued good health of the applicant. These two conditions, being joined
conjunctively, must concur.

Undisputably, the power to approve MRI applications is lodged with the DBP MRI Pool. The
pool, however, did not approve the application of Dans. There is also no showing that it
accepted the sum of P1,476.00, which DBP credited to its account with full knowledge that it
was payment for Dan's premium. There was, as a result, no perfected contract of insurance;
hence, the DBP MRI Pool cannot be held liable on a contract that does not exist.

The liability of DBP is another matter.

It was DBP, as a matter of policy and practice, that required Dans, the borrower, to secure MRI
coverage. Instead of allowing Dans to look for his own insurance carrier or some other form of
insurance policy, DBP compelled him to apply with the DBP MRI Pool for MRI coverage. When
Dan's loan was released on August 11, 1987, DBP already deducted from the proceeds thereof
the MRI premium. Four days latter, DBP made Dans fill up and sign his application for MRI, as
well as his health statement. The DBP later submitted both the application form and health
statement to the DBP MRI Pool at the DBP Main Building, Makati Metro Manila. As service fee,
DBP deducted 10 percent of the premium collected by it from Dans.

In dealing with Dans, DBP was wearing two legal hats: the first as a lender, and the second as
an insurance agent.

As an insurance agent, DBP made Dans go through the motion of applying for said insurance,
thereby leading him and his family to believe that they had already fulfilled all the requirements
for the MRI and that the issuance of their policy was forthcoming. Apparently, DBP had full
knowledge that Dan's application was never going to be approved. The maximum age for MRI
acceptance is 60 years as clearly and specifically provided in Article 1 of the Group Mortgage
Redemption Insurance Policy signed in 1984 by all the insurance companies concerned (Exh.
"1-Pool").

Under Article 1987 of the Civil Code of the Philippines, "the agent who acts as such is not
personally liable to the party with whom he contracts, unless he expressly binds himself or
exceeds the limits of his authority without giving such party sufficient notice of his powers."

The DBP is not authorized to accept applications for MRI when its clients are more than 60
years of age (Exh. "1-Pool"). Knowing all the while that Dans was ineligible for MRI coverage
because of his advanced age, DBP exceeded the scope of its authority when it accepted Dan's
application for MRI by collecting the insurance premium, and deducting its agent's commission
and service fee.

The liability of an agent who exceeds the scope of his authority depends upon whether the third
person is aware of the limits of the agent's powers. There is no showing that Dans knew of the
limitation on DBP's authority to solicit applications for MRI.

If the third person dealing with an agent is unaware of the limits of the authority conferred by the
principal on the agent and he (third person) has been deceived by the non-disclosure thereof by
the agent, then the latter is liable for damages to him (V Tolentino, Commentaries and
Jurisprudence on the Civil Code of the Philippines, p. 422 [1992], citing Sentencia [Cuba] of
September 25, 1907). The rule that the agent is liable when he acts without authority is founded
upon the supposition that there has been some wrong or omission on his part either in
misrepresenting, or in affirming, or concealing the authority under which he assumes to act
(Francisco, V., Agency 307 [1952], citing Hall v. Lauderdale, 46 N.Y. 70, 75). Inasmuch as the
non-disclosure of the limits of the agency carries with it the implication that a deception was
perpetrated on the unsuspecting client, the provisions of Articles 19, 20 and 21 of the Civil Code
of the Philippines come into play.

Article 19 provides:
 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.

Article 20 provides:

Every person who, contrary to law, willfully or negligently causes damage to

another, shall indemnify the latter for the same.

Article 21 provides:

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.

The DBP's liability, however, cannot be for the entire value of the insurance policy. To assume
that were it not for DBP's concealment of the limits of its authority, Dans would have secured an
MRI from another insurance company, and therefore would have been fully insured by the time
he died, is highly speculative. Considering his advanced age, there is no absolute certainty that
Dans could obtain an insurance coverage from another company. It must also be noted that
Dans died almost immediately, i.e., on the nineteenth day after applying for the MRI, and on the
twenty-third day from the date of release of his loan.

One is entitled to an adequate compensation only for such pecuniary loss suffered by him as he
has duly proved (Civil Code of the Philippines, Art. 2199). Damages, to be recoverable, must
not only be capable of proof, but must be actually proved with a reasonable degree of certainty
(Refractories Corporation v. Intermediate Appellate Court, 176 SCRA 539 [1989]; Choa Tek
Hee v. Philippine Publishing Co., 34 Phil. 447 [1916]). Speculative damages are too remote to
be included in an accurate estimate of damages (Sun Life Assurance v. Rueda Hermanos, 37
Phil. 844 [1918]).

While Dans is not entitled to compensatory damages, he is entitled to moral damages. No proof
of pecuniary loss is required in the assessment of said kind of damages (Civil Code of
Philippines, Art. 2216). The same may be recovered in acts referred to in Article 2219 of the
Civil Code.

The assessment of moral damages is left to the discretion of the court according to the
circumstances of each case (Civil Code of the Philippines, Art. 2216). Considering that DBP had
offered to pay P30,000.00 to respondent Estate in ex gratia settlement of its claim and that
DBP's non-disclosure of the limits of its authority amounted to a deception to its client, an award
of moral damages in the amount of P50,000.00 would be reasonable.

The award of attorney's fees is also just and equitable under the circumstances (Civil Code of
the Philippines, Article 2208 [11]).

WHEREFORE, the decision of the Court of Appeals in CA G.R.-CV

No. 26434 is MODIFIED and petitioner DBP is ORDERED: (1) to REIMBURSE respondent
Estate of Juan B. Dans the amount of P1,476.00 with legal interest from the date of the filing of
the complaint until fully paid; and (2) to PAY said Estate the amount of Fifty Thousand Pesos
(P50,000.00) as moral damages and the amount of Ten Thousand Pesos (P10,000.00) as
attorney's fees. With costs against petitioner.

SO ORDERED.

Cruz, Davide, Jr., Bellosillo and Kapunan, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 146322 December 6, 2006

ERNESTO RAMAS UYPITCHING and RAMAS UYPITCHING SONS, INC., petitioners,

vs.
ERNESTO QUIAMCO, respondent.

DECISION

CORONA, J.:

Honeste vivere, non alterum laedere et jus suum cuique tribuere. To live virtuously, not to injure
others and to give everyone his due. These supreme norms of justice are the underlying
principles of law and order in society. We reaffirm them in this petition for review on certiorari
assailing the July 26, 2000 decision1 and October 18, 2000 resolution of the Court of Appeals
(CA) in CA-G.R. CV No. 47571.

In 1982, respondent Ernesto C. Quiamco was approached by Juan Davalan,2 Josefino

Gabutero and Raul Generoso to amicably settle the civil aspect of a criminal case for
robbery3 filed by Quiamco against them. They surrendered to him a red Honda XL-100
motorcycle and a photocopy of its certificate of registration. Respondent asked for the original
certificate of registration but the three accused never came to see him again. Meanwhile, the
motorcycle was parked in an open space inside respondents business establishment, Avesco-
AVNE Enterprises, where it was visible and accessible to the public.

It turned out that, in October 1981, the motorcycle had been sold on installment basis to
Gabutero by petitioner Ramas Uypitching Sons, Inc., a family-owned corporation managed by
petitioner Atty. Ernesto Ramas Uypitching. To secure its payment, the motorcycle was
mortgaged to petitioner corporation.4

When Gabutero could no longer pay the installments, Davalan assumed the obligation and
continued the payments. In September 1982, however, Davalan stopped paying the remaining
installments and told petitioner corporations collector, Wilfredo Verao, that the motorcycle had
allegedly been "taken by respondents men."

Nine years later, on January 26, 1991, petitioner Uypitching, accompanied by policemen,5 went
to Avesco-AVNE Enterprises to recover the motorcycle. The leader of the police team, P/Lt.
Arturo Vendiola, talked to the clerk in charge and asked for respondent. While P/Lt. Vendiola
and the clerk were talking, petitioner Uypitching paced back and forth inside the establishment
uttering "Quiamco is a thief of a motorcycle."

On learning that respondent was not in Avesco-AVNE Enterprises, the policemen left to look for
respondent in his residence while petitioner Uypitching stayed in the establishment to take
photographs of the motorcycle. Unable to find respondent, the policemen went back to Avesco-
AVNE Enterprises and, on petitioner Uypitchings instruction and over the clerks objection, took
the motorcycle.

On February 18, 1991, petitioner Uypitching filed a criminal complaint for qualified theft and/or
violation of the Anti-Fencing Law6 against respondent in the Office of the City Prosecutor of
Dumaguete City.7 Respondent moved for dismissal because the complaint did not charge an
offense as he had neither stolen nor bought the motorcycle. The Office of the City Prosecutor
dismissed the complaint8 and denied petitioner Uypitchings subsequent motion for
reconsideration.

Respondent filed an action for damages against petitioners in the RTC of Dumaguete City,
Negros Oriental, Branch 37.9 He sought to hold the petitioners liable for the following: (1)
unlawful taking of the motorcycle; (2) utterance of a defamatory remark (that respondent was a
thief) and (3) precipitate filing of a baseless and malicious complaint. These acts humiliated and
embarrassed the respondent and injured his reputation and integrity.

On July 30, 1994, the trial court rendered a decision10 finding that petitioner Uypitching was
motivated with malice and ill will when he called respondent a thief, took the motorcycle in an
abusive manner and filed a baseless complaint for qualified theft and/or violation of the Anti-
Fencing Law. Petitioners acts were found to be contrary to Articles 1911 and 2012 of the Civil
Code. Hence, the trial court held petitioners liable to respondent for P500,000 moral
damages, P200,000 exemplary damages and P50,000 attorneys fees plus costs.

Petitioners appealed the RTC decision but the CA affirmed the trial courts decision with
modification, reducing the award of moral and exemplary damages to P300,000 and P100,000,
respectively.13 Petitioners sought reconsideration but it was denied. Thus, this petition.

In their petition and memorandum, petitioners submit that the sole (allegedly) issue to be
resolved here is whether the filing of a complaint for qualified theft and/or violation of the Anti-
Fencing Law in the Office of the City Prosecutor warranted the award of moral damages,
exemplary damages, attorneys fees and costs in favor of respondent.

Petitioners suggestion is misleading. They were held liable for damages not only for instituting a
groundless complaint against respondent but also for making a slanderous remark and for
taking the motorcycle from respondents establishment in an abusive manner.

Correctness of the Findings of the RTC and CA

As they never questioned the findings of the RTC and CA that malice and ill will attended not
only the public imputation of a crime to respondent14 but also the taking of the motorcycle,
petitioners were deemed to have accepted the correctness of such findings. This alone was
sufficient to hold petitioners liable for damages to respondent.

Nevertheless, to address petitioners concern, we also find that the trial and appellate courts
correctly ruled that the filing of the complaint was tainted with malice and bad faith. Petitioners
themselves in fact described their action as a "precipitate act."15 Petitioners were bent on
portraying respondent as a thief. In this connection, we quote with approval the following
findings of the RTC, as adopted by the CA:

x x x There was malice or ill-will [in filing the complaint before the City Prosecutors
Office] because Atty. Ernesto Ramas Uypitching knew or ought to have known as he is a
lawyer, that there was no probable cause at all for filing a criminal complaint for qualified
theft and fencing activity against [respondent]. Atty. Uypitching had no personal
knowledge that [respondent] stole the motorcycle in question. He was merely told by his
bill collector ([i.e.] the bill collector of Ramas Uypitching Sons, Inc.)[,] Wilfredo Verao[,]
that Juan Dabalan will [no longer] pay the remaining installment(s) for the motorcycle
because the motorcycle was taken by the men of [respondent]. It must be noted that the
term used by Wilfredo Verao in informing Atty. Ernesto Ramas Uypitching of the refusal
of Juan Dabalan to pay for the remaining installment was []taken[], not []unlawfully
taken[] or stolen. Yet, despite the double hearsay, Atty. Ernesto Ramas Uypitching not
only executed the [complaint-affidavit] wherein he named [respondent] as the suspect
of the stolen motorcycle but also charged [respondent] of qualified theft and fencing
activity before the City [Prosecutors] Office of Dumaguete. The absence of probable
cause necessarily signifies the presence of malice. What is deplorable in all these is that
Juan Dabalan, the owner of the motorcycle, did not accuse [respondent] or the latters
men of stealing the motorcycle[,] much less bother[ed] to file a case for qualified theft
before the authorities. That Atty. Uypitchings act in charging [respondent] with qualified
theft and fencing activity is tainted with malice is also shown by his answer to the
 question of Cupid Gonzaga16[during one of their conversations] - "why should you still
file a complaint? You have already recovered the motorcycle"[:] "Aron motagam ang
kawatan ug motor." ("To teach a lesson to the thief of motorcycle.") 17

Moreover, 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. We see
no compelling reason to reverse the findings of the RTC and the CA.

Petitioners Abused Their Right of Recovery as Mortgagee(s)

Petitioners claim that they should not be held liable for petitioner corporations exercise of its
right as seller-mortgagee to recover the mortgaged vehicle preliminary to the enforcement of its
right to foreclose on the mortgage in case of default. They are clearly mistaken.

True, a mortgagee may take steps to recover the mortgaged property to enable it to enforce or
protect its foreclosure right thereon. There is, however, a well-defined procedure for the
recovery of possession of mortgaged property: if a mortgagee is unable to obtain possession of
a mortgaged property for its sale on foreclosure, he must bring a civil action either to recover
such possession as a preliminary step to the sale, or to obtain judicial foreclosure.18

Petitioner corporation failed to bring the proper civil action necessary to acquire legal
possession of the motorcycle. Instead, petitioner Uypitching descended on respondents
establishment with his policemen and ordered the seizure of the motorcycle without a search
warrant or court order. Worse, in the course of the illegal seizure of the motorcycle, petitioner
Uypitching even mouthed a slanderous statement.

No doubt, petitioner corporation, acting through its co-petitioner Uypitching, blatantly

disregarded the lawful procedure for the enforcement of its right, to the prejudice of respondent.
Petitioners acts violated the law as well as public morals, and transgressed the proper norms of
human relations.

The basic principle of human relations, embodied in Article 19 of the Civil Code, provides:

Art. 19. Every person must in the exercise of his rights and in the performance of his
duties, act with justice, give every one his due, and observe honesty and good faith.

Article 19, also known as the "principle of abuse of right," prescribes that a person should not
use his right unjustly or contrary to honesty and good faith, otherwise he opens himself to
liability.19 It seeks to preclude the use of, or the tendency to use, a legal right (or duty) as a
means to unjust ends.

There is an abuse of right when it is exercised solely to prejudice or injure another.20 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 harm
another.21 Otherwise, liability for damages to the injured party will attach.

In this case, the manner by which the motorcycle was taken at petitioners instance was not only
attended by bad faith but also contrary to the procedure laid down by law. Considered in
conjunction with the defamatory statement, petitioners exercise of the right to recover the
mortgaged vehicle was utterly prejudicial and injurious to respondent. On the other hand, the
precipitate act of filing an unfounded complaint could not in any way be considered to be in
accordance with the purpose for which the right to prosecute a crime was established. Thus, the
totality of petitioners actions showed a calculated design to embarrass, humiliate and publicly
ridicule respondent. Petitioners acted in an excessively harsh fashion to the prejudice of
respondent. Contrary to law, petitioners willfully caused damage to respondent. Hence, they
should indemnify him.22

WHEREFORE, the petition is hereby DENIED. The July 26, 2000 decision and October 18,
2000 resolution of the Court of Appeals in CA-G.R. CV No. 47571 are AFFIRMED.
Triple costs against petitioners, considering that petitioner Ernesto Ramas Uypitching is a
lawyer and an officer of the court, for his improper behavior.

SO ORDERED.

Puno, J., Chairperson, Sandoval-Gutierrez, Azcuna and Garcia, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-20089 December 26, 1964

BEATRIZ P. WASSMER, plaintiff-appellee,

vs.
FRANCISCO X. VELEZ, defendant-appellant.

Jalandoni & Jamir for defendant-appellant.

Samson S. Alcantara for plaintiff-appellee.

BENGZON, J.P., J.:

The facts that culminated in this case started with dreams and hopes, followed by appropriate
planning and serious endeavors, but terminated in frustration and, what is worse, complete
public humiliation.

Francisco X. Velez and Beatriz P. Wassmer, following their mutual promise of love, decided to
get married and set September 4, 1954 as the big day. On September 2, 1954 Velez left this
note for his bride-to-be:

Dear Bet

Will have to postpone wedding My mother opposes it. Am leaving on the

Convair today.

Please do not ask too many people about the reason why That would only
create a scandal.

Paquing

But the next day, September 3, he sent her the following telegram:

NOTHING CHANGED REST ASSURED RETURNING VERY SOON

APOLOGIZE MAMA PAPA LOVE .

PAKING

Thereafter Velez did not appear nor was he heard from again.

Sued by Beatriz for damages, Velez filed no answer and was declared in default. Plaintiff
adduced evidence before the clerk of court as commissioner, and on April 29, 1955, judgment
was rendered ordering defendant to pay plaintiff P2,000.00 as actual damages; P25,000.00 as
moral and exemplary damages; P2,500.00 as attorney's fees; and the costs.

On June 21, 1955 defendant filed a "petition for relief from orders, judgment and proceedings
and motion for new trial and reconsideration." Plaintiff moved to strike it cut. But the court, on
August 2, 1955, ordered the parties and their attorneys to appear before it on August 23, 1955
"to explore at this stage of the proceedings the possibility of arriving at an amicable settlement."
It added that should any of them fail to appear "the petition for relief and the opposition thereto
will be deemed submitted for resolution."

On August 23, 1955 defendant failed to appear before court. Instead, on the following day his
counsel filed a motion to defer for two weeks the resolution on defendants petition for relief. The
counsel stated that he would confer with defendant in Cagayan de Oro City the latter's
residence on the possibility of an amicable element. The court granted two weeks counted
from August 25, 1955.

Plaintiff manifested on June 15, 1956 that the two weeks given by the court had expired on
September 8, 1955 but that defendant and his counsel had failed to appear.

Another chance for amicable settlement was given by the court in its order of July 6, 1956
calling the parties and their attorneys to appear on July 13, 1956. This time. however,
defendant's counsel informed the court that chances of settling the case amicably were nil.

On July 20, 1956 the court issued an order denying defendant's aforesaid petition. Defendant
has appealed to this Court. In his petition of June 21, 1955 in the court a quo defendant alleged
excusable negligence as ground to set aside the judgment by default. Specifically, it was stated
that defendant filed no answer in the belief that an amicable settlement was being negotiated.

A petition for relief from judgment on grounds of fraud, accident, mistake or excusable
negligence, must be duly supported by an affidavit of merits stating facts constituting a valid
defense. (Sec. 3, Rule 38, Rules of Court.) Defendant's affidavit of merits attached to his
petition of June 21, 1955 stated: "That he has a good and valid defense against plaintiff's cause
of action, his failure to marry the plaintiff as scheduled having been due to fortuitous event
and/or circumstances beyond his control." An affidavit of merits like this stating mere
conclusions or opinions instead of facts is not valid. (Cortes vs. Co Bun Kim, L-3926, Oct. 10,
1951; Vaswani vs. P. Tarrachand Bros., L-15800, December 29, 1960.)

Defendant, however, would contend that the affidavit of merits was in fact unnecessary, or a
mere surplusage, because the judgment sought to be set aside was null and void, it having
been based on evidence adduced before the clerk of court. In Province of Pangasinan vs.
Palisoc, L-16519, October 30, 1962, this Court pointed out that the procedure of designating the
clerk of court as commissioner to receive evidence is sanctioned by Rule 34 (now Rule 33) of
the Rules of Court. Now as to defendant's consent to said procedure, the same did not have to
be obtained for he was declared in default and thus had no standing in court (Velez vs. Ramas,
40 Phil. 787; Alano vs. Court of First Instance, L-14557, October 30, 1959).

In support of his "motion for new trial and reconsideration," defendant asserts that the judgment
is contrary to law. The reason given is that "there is no provision of the Civil Code authorizing"
an action for breach of promise to marry. Indeed, our ruling in Hermosisima vs. Court of
Appeals (L-14628, Sept. 30, 1960), as reiterated in Estopa vs. Biansay (L-14733, Sept. 30,
1960), is that "mere breach of a promise to marry" is not an actionable wrong. We pointed out
that Congress deliberately eliminated from the draft of the new Civil Code the provisions that
would have it so.

It must not be overlooked, however, that the extent to which acts not contrary to law may be
perpetrated with impunity, is not limitless for Article 21 of said Code provides that "any person
who wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for the damage."

The record reveals that on August 23, 1954 plaintiff and defendant applied for a license to
contract marriage, which was subsequently issued (Exhs. A, A-1). Their wedding was set for
September 4, 1954. Invitations were printed and distributed to relatives, friends and
acquaintances (Tsn., 5; Exh. C). The bride-to-be's trousseau, party drsrses and other apparel
for the important occasion were purchased (Tsn., 7-8). Dresses for the maid of honor and the
flower girl were prepared. A matrimonial bed, with accessories, was bought. Bridal showers
were given and gifts received (Tsn., 6; Exh. E). And then, with but two days before the wedding,
defendant, who was then 28 years old,: simply left a note for plaintiff stating: "Will have to
postpone wedding My mother opposes it ... " He enplaned to his home city in Mindanao, and
the next day, the day before the wedding, he wired plaintiff: "Nothing changed rest assured
returning soon." But he never returned and was never heard from again.

Surely this is not a case of mere breach of promise to marry. As stated, mere breach of promise
to marry is not an actionable wrong. But to formally set a wedding and go through all the above-
described preparation and publicity, only to walk out of it when the matrimony is about to be
solemnized, is quite different. This is palpably and unjustifiably contrary to good customs for
which defendant must be held answerable in damages in accordance with Article 21 aforesaid.

Defendant urges in his afore-stated petition that the damages awarded were excessive. No
question is raised as to the award of actual damages. What defendant would really assert
hereunder is that the award of moral and exemplary damages, in the amount of P25,000.00,
should be totally eliminated.

Per express provision of Article 2219 (10) of the New Civil Code, moral damages are
recoverable in the cases mentioned in Article 21 of said Code. As to exemplary damages,
defendant contends that the same could not be adjudged against him because under Article
2232 of the New Civil Code the condition precedent is that "the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner." The argument is devoid of merit as
under the above-narrated circumstances of this case defendant clearly acted in a "wanton ... ,
reckless [and] oppressive manner." This Court's opinion, however, is that considering the
particular circumstances of this case, P15,000.00 as moral and exemplary damages is deemed
to be a reasonable award.

PREMISES CONSIDERED, with the above-indicated modification, the lower court's judgment is
hereby affirmed, with costs.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera, Paredes, Dizon, Regala, Makalintal,
and Zaldivar, JJ.,concur.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 154259 February 28, 2005

NIKKO HOTEL MANILA GARDEN and RUBY LIM, petitioners,

vs.
ROBERTO REYES, a.k.a. "AMAY BISAYA," respondent.

DECISION

CHICO-NAZARIO, J.:

In this petition for review on certiorari, petitioners Nikko Hotel Manila Garden (Hotel Nikko)1 and
Ruby Lim assail the Decision2 of the Court of Appeals dated 26 November 2001 reversing the
Decision3 of the Regional Trial Court (RTC) of Quezon City, Branch 104, as well as the
Resolution4 of the Court of Appeals dated 09 July 2002 which denied petitioners motion for
reconsideration.

The cause of action before the trial court was one for damages brought under the human
relations provisions of the New Civil Code. Plaintiff thereat (respondent herein) Roberto Reyes,
more popularly known by the screen name "Amay Bisaya," alleged that at around 6:00 oclock in
the evening of 13 October 1994, while he was having coffee at the lobby of Hotel Nikko,5 he
was spotted by his friend of several years, Dr. Violeta Filart, who then approached him. 6 Mrs.
Filart invited him to join her in a party at the hotels penthouse in celebration of the natal day of
the hotels manager, Mr. Masakazu Tsuruoka.7 Mr. Reyes asked if she could vouch for him for
which she replied: "of course."8 Mr. Reyes then went up with the party of Dr. Filart carrying the
basket of fruits which was the latters present for the celebrant.9 At the penthouse, they first had
their picture taken with the celebrant after which Mr. Reyes sat with the party of Dr. Filart. 10 After
a couple of hours, when the buffet dinner was ready, Mr. Reyes lined-up at the buffet table but,
to his great shock, shame and embarrassment, he was stopped by petitioner herein, Ruby Lim,
who claimed to speak for Hotel Nikko as Executive Secretary thereof.11 In a loud voice and
within the presence and hearing of the other guests who were making a queue at the buffet
table, Ruby Lim told him to leave the party ("huwag ka nang kumain, hindi ka imbitado, bumaba
ka na lang").12 Mr. Reyes tried to explain that he was invited by Dr. Filart.13 Dr. Filart, who was
within hearing distance, however, completely ignored him thus adding to his shame and
humiliation.14 Not long after, while he was still recovering from the traumatic experience, a
Makati policeman approached and asked him to step out of the hotel.15 Like a common criminal,
he was escorted out of the party by the policeman.16 Claiming damages, Mr. Reyes asked for
One Million Pesos actual damages, One Million Pesos moral and/or exemplary damages and
Two Hundred Thousand Pesos attorneys fees.17

Ruby Lim, for her part, admitted having asked Mr. Reyes to leave the party but not under the
ignominious circumstance painted by the latter. Ms. Lim narrated that she was the Hotels
Executive Secretary for the past twenty (20) years.18 One of her functions included organizing
the birthday party of the hotels former General Manager, Mr. Tsuruoka.19 The year 1994 was no
different. For Mr. Tsuruokas party, Ms. Lim generated an exclusive guest list and extended
invitations accordingly.20 The guest list was limited to approximately sixty (60) of Mr. Tsuruokas
closest friends and some hotel employees and that Mr. Reyes was not one of those invited.21 At
the party, Ms. Lim first noticed Mr. Reyes at the bar counter ordering a drink.22 Mindful of Mr.
Tsuruokas wishes to keep the party intimate, Ms. Lim approached Mr. Boy Miller, the "captain
waiter," to inquire as to the presence of Mr. Reyes who was not invited.23 Mr. Miller replied that
he saw Mr. Reyes with the group of Dr. Filart.24 As Dr. Filart was engaged in conversation with
another guest and as Ms. Lim did not want to interrupt, she inquired instead from the sister of
Dr. Filart, Ms. Zenaida Fruto, who told her that Dr. Filart did not invite Mr. Reyes. 25 Ms. Lim then
requested Ms. Fruto to tell Mr. Reyes to leave the party as he was not invited.26 Mr. Reyes,
however, lingered prompting Ms. Lim to inquire from Ms. Fruto who said that Mr. Reyes did not
want to leave.27 When Ms. Lim turned around, she saw Mr. Reyes conversing with a Captain
Batung whom she later approached.28Believing that Captain Batung and Mr. Reyes knew each
other, Ms. Lim requested from him the same favor from Ms. Fruto, i.e., for Captain Batung to tell
Mr. Reyes to leave the party as he was not invited.29 Still, Mr. Reyes lingered. When Ms. Lim
spotted Mr. Reyes by the buffet table, she decided to speak to him herself as there were no
other guests in the immediate vicinity.30 However, as Mr. Reyes was already helping himself to
the food, she decided to wait.31 When Mr. Reyes went to a corner and started to eat, Ms. Lim
approached him and said: "alam ninyo, hindo ho kayo dapat nandito. Pero total nakakuha na ho
kayo ng pagkain, ubusin na lang ninyo at pagkatapos kung pwede lang po umalis na
kayo."32 She then turned around trusting that Mr. Reyes would show enough decency to leave,
but to her surprise, he began screaming and making a big scene, and even threatened to dump
food on her.331awphi1.nt

Dr. Violeta Filart, the third defendant in the complaint before the lower court, also gave her
version of the story to the effect that she never invited Mr. Reyes to the party. 34 According to
her, it was Mr. Reyes who volunteered to carry the basket of fruits intended for the celebrant as
he was likewise going to take the elevator, not to the penthouse but to Altitude 49.35 When they
reached the penthouse, she reminded Mr. Reyes to go down as he was not properly dressed
and was not invited.36 All the while, she thought that Mr. Reyes already left the place, but she
later saw him at the bar talking to Col. Batung.37 Then there was a commotion and she saw Mr.
Reyes shouting.38 She ignored Mr. Reyes.39 She was embarrassed and did not want the
celebrant to think that she invited him.40

After trial on the merits, the court a quo dismissed the complaint,41 giving more credence to the
testimony of Ms. Lim that she was discreet in asking Mr. Reyes to leave the party. The trial court
likewise ratiocinated that Mr. Reyes assumed the risk of being thrown out of the party as he was
uninvited:

Plaintiff had no business being at the party because he was not a guest of Mr. Tsuruoka, the
birthday celebrant. He assumed the risk of being asked to leave for attending a party to which
he was not invited by the host. Damages are pecuniary consequences which the law imposes
for the breach of some duty or the violation of some right. Thus, no recovery can be had against
defendants Nikko Hotel and Ruby Lim because he himself was at fault (Garciano v. Court of
Appeals, 212 SCRA 436). He knew that it was not the party of defendant Violeta Filart even if
she allowed him to join her and took responsibility for his attendance at the party. His action
against defendants Nikko Hotel and Ruby Lim must therefore fail.42

On appeal, the Court of Appeals reversed the ruling of the trial court as it found more
commanding of belief the testimony of Mr. Reyes that Ms. Lim ordered him to leave in a loud
voice within hearing distance of several guests:

In putting appellant in a very embarrassing situation, telling him that he should not finish his food
and to leave the place within the hearing distance of other guests is an act which is contrary to
morals, good customs . . ., for which appellees should compensate the appellant for the damage
suffered by the latter as a consequence therefore (Art. 21, New Civil Code). The liability arises
from the acts which are in themselves legal or not prohibited, but contrary to morals or good
customs. Conversely, even in the exercise of a formal right, [one] cannot with impunity
intentionally cause damage to another in a manner contrary to morals or good customs.43

The Court of Appeals likewise ruled that the actuation of Ms. Lim in approaching several people
to inquire into the presence of Mr. Reyes exposed the latter to ridicule and was uncalled for as
she should have approached Dr. Filart first and both of them should have talked to Mr. Reyes in
private:

Said acts of appellee Lim are uncalled for. What should have been done by appellee Lim was to
approach appellee Mrs. Filart and together they should have told appellant Reyes in private that
the latter should leave the party as the celebrant only wanted close friends around. It is
necessary that Mrs. Filart be the one to approach appellant because it was she who invited
appellant in that occasion. Were it not for Mrs. Filarts invitation, appellant could not have
suffered such humiliation. For that, appellee Filart is equally liable.

...
The acts of [appellee] Lim are causes of action which are predicated upon mere rudeness or
lack of consideration of one person, which calls not only protection of human dignity but respect
of such dignity. Under Article 20 of the Civil Code, every person who violates this duty becomes
liable for damages, especially if said acts were attended by malice or bad faith. Bad faith does
not simply connote bad judgment or simple negligence. It imports a dishonest purpose or some
moral obliquity and conscious doing of a wrong, a breach of a known duty to some motive or
interest or ill-will that partakes of the nature of fraud (Cojuangco, Jr. v. CA, et al., 309 SCRA
603).44

Consequently, the Court of Appeals imposed upon Hotel Nikko, Ruby Lim and Dr. Violeta Filart
the solidary obligation to pay Mr. Reyes (1) exemplary damages in the amount of Two Hundred
Thousand Pesos (P200,000); (2) moral damages in the amount of Two Hundred Thousand
Pesos (P200,000); and (3) attorneys fees in the amount of Ten Thousand Pesos
(P10,000).45 On motion for reconsideration, the Court of Appeals affirmed its earlier decision as
the argument raised in the motion had "been amply discussed and passed upon in the decision
sought to be reconsidered."46

Thus, the instant petition for review. Hotel Nikko and Ruby Lim contend that the Court of
Appeals seriously erred in

I.

NOT APPLYING THE DOCTRINE OF VOLENTI NON FIT INJURIA CONSIDERING THAT
BY ITS OWN FINDINGS, AMAY BISAYA WAS A GATE-CRASHER

II.

HOLDING HOTEL NIKKO AND RUBY LIM JOINTLY AND SEVERALLY LIABLE WITH DR.
FILART FOR DAMAGES SINCE BY ITS OWN RULING, AMAY BISAYA "COULD NOT HAVE
SUFFERED SUCH HUMILIATION," "WERE IT NOT FOR DR. FILARTS INVITATION"

III.

DEPARTING FROM THE FINDINGS OF FACT OF THE TRIAL COURT AS REGARDS THE
CIRCUMSTANCES THAT ALLEGEDLY CAUSED THE HUMILIATION OF AMAY BISAYA

IV.

IN CONCLUDING THAT AMAY BISAYA WAS TREATED UNJUSTLY BECAUSE OF HIS

POVERTY, CONSIDERING THAT THIS WAS NEVER AN ISSUE AND NO EVIDENCE WAS
PRESENTED IN THIS REGARD

V.

IN FAILING TO PASS UPON THE ISSUE ON THE DEFECTS OF THE APPELLANTS

BRIEF, THEREBY DEPARTING FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS

Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit injuria,
they cannot be made liable for damages as respondent Reyes assumed the risk of being asked
to leave (and being embarrassed and humiliated in the process) as he was a "gate-crasher."

The doctrine of volenti non fit injuria ("to which a person assents is not esteemed in law as
injury"47 ) refers to self-inflicted injury48 or to the consent to injury49 which precludes the recovery
of damages by one who has knowingly and voluntarily exposed himself to danger, even if he is
not negligent in doing so.50 As formulated by petitioners, however, this doctrine does not find
application to the case at bar because even if respondent Reyes assumed the risk of being
asked to leave the party, petitioners, under Articles 19 and 21 of the New Civil Code, were still
under obligation to treat him fairly in order not to expose him to unnecessary ridicule and
shame.
Thus, the threshold issue is whether or not Ruby Lim acted abusively in asking Roberto Reyes,
a.k.a. "Amay Bisaya," to leave the party where he was not invited by the celebrant thereof
thereby becoming liable under Articles 19 and 21 of the Civil Code. Parenthetically, and if Ruby
Lim were so liable, whether or not Hotel Nikko, as her employer, is solidarily liable with her.

As the trial court and the appellate court reached divergent and irreconcilable conclusions
concerning the same facts and evidence of the case, this Court is left without choice but to use
its latent power to review such findings of facts. Indeed, the general rule is that we are not a trier
of facts as our jurisdiction is limited to reviewing and revising errors of law. 51 One of the
exceptions to this general rule, however, obtains herein as the findings of the Court of Appeals
are contrary to those of the trial court.52 The lower court ruled that Ms. Lim did not abuse her
right to ask Mr. Reyes to leave the party as she talked to him politely and discreetly. The
appellate court, on the other hand, held that Ms. Lim is liable for damages as she needlessly
embarrassed Mr. Reyes by telling him not to finish his food and to leave the place within hearing
distance of the other guests. Both courts, however, were in agreement that it was Dr. Filarts
invitation that brought Mr. Reyes to the party.

The consequential question then is: Which version is credible?

From an in depth review of the evidence, we find more credible the lower courts findings of fact.

First, let us put things in the proper perspective.

We are dealing with a formal party in a posh, five-star hotel,53 for-invitation-only, thrown for the
hotels former Manager, a Japanese national. Then came a person who was clearly uninvited
(by the celebrant)54 and who could not just disappear into the crowd as his face is known by
many, being an actor. While he was already spotted by the organizer of the party, Ms. Lim, the
very person who generated the guest list, it did not yet appear that the celebrant was aware of
his presence. Ms. Lim, mindful of the celebrants instruction to keep the party intimate, would
naturally want to get rid of the "gate-crasher" in the most hush-hush manner in order not to call
attention to a glitch in an otherwise seamless affair and, in the process, risk the displeasure of
the celebrant, her former boss. To unnecessarily call attention to the presence of Mr. Reyes
would certainly reflect badly on Ms. Lims ability to follow the instructions of the celebrant to
invite only his close friends and some of the hotels personnel. Mr. Reyes, upon whom the
burden rests to prove that indeed Ms. Lim loudly and rudely ordered him to leave, could not
offer any satisfactory explanation why Ms. Lim would do that and risk ruining a formal and
intimate affair. On the contrary, Mr. Reyes, on cross-examination, had unwittingly sealed his fate
by admitting that when Ms. Lim talked to him, she was very close. Close enough for him to kiss:

Q: And, Mr. Reyes, you testified that Miss Lim approached you while you were at the
buffet table? How close was she when she approached you?

A: Very close because we nearly kissed each other.

Q: And yet, she shouted for you to go down? She was that close and she shouted?

A: Yes. She said, "wag kang kumain, hindi ka imbitado dito, bumaba ka na lang."

Q: So, you are testifying that she did this in a loud voice?

...

A: Yes. If it is not loud, it will not be heard by many.55

In the absence of any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and expose
him to ridicule and shame, it is highly unlikely that she would shout at him from a very close
distance. Ms. Lim having been in the hotel business for twenty years wherein being polite and
discreet are virtues to be emulated, the testimony of Mr. Reyes that she acted to the contrary
does not inspire belief and is indeed incredible. Thus, the lower court was correct in observing
that
Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave
the party was made such that they nearly kissed each other, the request was meant to be heard
by him only and there could have been no intention on her part to cause embarrassment to him.
It was plaintiffs reaction to the request that must have made the other guests aware of what
transpired between them. . .

Had plaintiff simply left the party as requested, there was no need for the police to take him
out.56

Moreover, another problem with Mr. Reyess version of the story is that it is unsupported. It is a
basic rule in civil cases that he who alleges proves. Mr. Reyes, however, had not presented any
witness to back his story up. All his witnesses Danny Rodinas, Pepito Guerrero and Alexander
Silva - proved only that it was Dr. Filart who invited him to the party.57

Ms. Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not
invited, cannot be made liable to pay for damages under Articles 19 and 21 of the Civil Code.
Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability springs from that
of its employee.58

Article 19, known to contain what is commonly referred to as the principle of abuse of rights,59 is
not a panacea for all human hurts and social grievances. Article 19 states:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith.1awphi1.nt

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."60 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.61 These standards are the following: act with
justice, give everyone his due and observe honesty and good faith.62 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.63 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 law64 which does not
obtain herein as Ms. Lim was perfectly within her right to ask Mr. Reyes to leave. 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 2165 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.66

A common theme runs through Articles 19 and 21,67 and that is, the act complained of must be
intentional.68

As applied to herein case and as earlier discussed, Mr. Reyes has not shown that Ms. Lim was
driven by animosity against him. These two people did not know each other personally before
the evening of 13 October 1994, thus, Mr. Reyes had nothing to offer for an explanation for Ms.
Lims alleged abusive conduct except the statement that Ms. Lim, being "single at 44 years old,"
had a "very strong bias and prejudice against (Mr. Reyes) possibly influenced by her associates
in her work at the hotel with foreign businessmen."69 The lameness of this argument need not
be belabored. Suffice it to say that a complaint based on Articles 19 and 21 of the Civil Code
must necessarily fail if it has nothing to recommend it but innuendos and conjectures.

Parenthetically, the manner by which Ms. Lim asked Mr. Reyes to leave was likewise
acceptable and humane under the circumstances. In this regard, we cannot put our imprimatur
on the appellate courts declaration that Ms. Lims act of personally approaching Mr. Reyes
(without first verifying from Mrs. Filart if indeed she invited Mr. Reyes) gave rise to a cause of
action "predicated upon mere rudeness or lack of consideration of one person, which calls not
only protection of human dignity but respect of such dignity."70 Without proof of any ill-motive on
her part, Ms. Lims act of by-passing Mrs. Filart cannot amount to abusive conduct especially
because she did inquire from Mrs. Filarts companion who told her that Mrs. Filart did not invite
Mr. Reyes.71 If at all, Ms. Lim is guilty only of bad judgment which, if done with good intentions,
cannot amount to bad faith.

Not being liable for both actual and moral damages, neither can petitioners Lim and Hotel Nikko
be made answerable for exemplary damages72 especially for the reason stated by the Court of
Appeals. The Court of Appeals held

Not a few of the rich people treat the poor with contempt because of the latters lowly station in
life.l^vvphi1.net This has to be limited somewhere. In a democracy, such a limit must be
established. Social equality is not sought by the legal provisions under consideration, but due
regard for decency and propriety (Code Commission, pp. 33-34). And by way of example or
correction for public good and to avert further commission of such acts, exemplary damages
should be imposed upon appellees.73

The fundamental fallacy in the above-quoted findings is that it runs counter with the very facts of
the case and the evidence on hand.l^vvphi1.net It is not disputed that at the time of the incident
in question, Mr. Reyes was "an actor of long standing; a co-host of a radio program over DZRH;
a Board Member of the Music Singer Composer (MUSICO) chaired by popular singer Imelda
Papin; a showbiz Coordinator of Citizen Crime Watch; and 1992 official candidate of the KBL
Party for Governor of Bohol; and an awardee of a number of humanitarian organizations of the
Philippines."74 During his direct examination on rebuttal, Mr. Reyes stressed that he had
income75 and nowhere did he say otherwise. On the other hand, the records are bereft of any
information as to the social and economic standing of petitioner Ruby Lim. Consequently, the
conclusion reached by the appellate court cannot withstand scrutiny as it is without basis.

All told, and as far as Ms. Lim and Hotel Nikko are concerned, any damage which Mr. Reyes
might have suffered through Ms. Lims exercise of a legitimate right done within the bounds of
propriety and good faith, must be his to bear alone.

WHEREFORE, premises considered, the petition filed by Ruby Lim and Nikko Hotel Manila
Garden is GRANTED. The Decision of the Court of Appeals dated 26 November 2001 and its
Resolution dated 09 July 2002 are hereby REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Quezon City, Branch 104, dated 26 April 1999 is hereby AFFIRMED. No
costs.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 97336 February 19, 1993

GASHEM SHOOKAT BAKSH, petitioner,

vs.
HON. COURT OF APPEALS and MARILOU T. GONZALES, respondents.

Public Attorney's Office for petitioner.

Corleto R. Castro for private respondent.

DAVIDE, JR., J.:

This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to review and set
aside the Decision 1of the respondent Court of Appeals in CA-G.R. CV No. 24256 which
affirmed in toto the 16 October 1939 Decision of Branch 38 (Lingayen) of the Regional Trial
Court (RTC) of Pangasinan in Civil Case No. 16503. Presented is the issue of whether or not
damages may be recovered for a breach of promise to marry on the basis of Article 21 of the
Civil Code of the Philippines.

The antecedents of this case are not complicated:

On 27 October 1987, private respondent, without the assistance of counsel, filed with the
aforesaid trial court a complaint 2 for damages against the petitioner for the alleged violation of
their agreement to get married. She alleges in said complaint that: she is twenty-two (22) years
old, single, Filipino and a pretty lass of good moral character and reputation duly respected in
her community; petitioner, on the other hand, is an Iranian citizen residing at the Lozano
Apartments, Guilig, Dagupan City, and is an exchange student taking a medical course at the
Lyceum Northwestern Colleges in Dagupan City; before 20 August 1987, the latter courted and
proposed to marry her; she accepted his love on the condition that they would get married; they
therefore agreed to get married after the end of the school semester, which was in October of
that year; petitioner then visited the private respondent's parents in Baaga, Bugallon,
Pangasinan to secure their approval to the marriage; sometime in 20 August 1987, the
petitioner forced her to live with him in the Lozano Apartments; she was a virgin before she
began living with him; a week before the filing of the complaint, petitioner's attitude towards her
started to change; he maltreated and threatened to kill her; as a result of such maltreatment,
she sustained injuries; during a confrontation with a representative of the barangay captain of
Guilig a day before the filing of the complaint, petitioner repudiated their marriage agreement
and asked her not to live with him anymore and; the petitioner is already married to someone
living in Bacolod City. Private respondent then prayed for judgment ordering the petitioner to
pay her damages in the amount of not less than P45,000.00, reimbursement for actual
expenses amounting to P600.00, attorney's fees and costs, and granting her such other relief
and remedies as may be just and equitable. The complaint was docketed as Civil Case No.
16503.

In his Answer with Counterclaim, 3 petitioner admitted only the personal circumstances of the
parties as averred in the complaint and denied the rest of the allegations either for lack of
knowledge or information sufficient to form a belief as to the truth thereof or because the true
facts are those alleged as his Special and Affirmative Defenses. He thus claimed that he never
proposed marriage to or agreed to be married with the private respondent; he neither sought the
consent and approval of her parents nor forced her to live in his apartment; he did not maltreat
her, but only told her to stop coming to his place because he discovered that she had deceived
him by stealing his money and passport; and finally, no confrontation took place with a
representative of the barangay captain. Insisting, in his Counterclaim, that the complaint is
baseless and unfounded and that as a result thereof, he was unnecessarily dragged into court
and compelled to incur expenses, and has suffered mental anxiety and a besmirched
reputation, he prayed for an award of P5,000.00 for miscellaneous expenses and P25,000.00 as
moral damages.

After conducting a pre-trial on 25 January 1988, the trial court issued a Pre-Trial
Order 4 embodying the stipulated facts which the parties had agreed upon, to wit:

1. That the plaintiff is single and resident (sic) of Baaga, Bugallon, Pangasinan,
while the defendant is single, Iranian citizen and resident (sic) of Lozano
Apartment, Guilig, Dagupan City since September 1, 1987 up to the present;

2. That the defendant is presently studying at Lyceum Northwestern, Dagupan

City, College of Medicine, second year medicine proper;

3. That the plaintiff is (sic) an employee at Mabuhay Luncheonette , Fernandez

Avenue, Dagupan City since July, 1986 up to the present and a (sic) high school
graduate;

4. That the parties happened to know each other when the manager of the
Mabuhay Luncheonette, Johhny Rabino introduced the defendant to the plaintiff
on August 3, 1986.

After trial on the merits, the lower court, applying Article 21 of the Civil Code, rendered on 16
October 1989 a decision 5 favoring the private respondent. The petitioner was thus ordered to
pay the latter damages and attorney's fees; the dispositive portion of the decision reads:

IN THE LIGHT of the foregoing consideration, judgment is hereby rendered in

favor of the plaintiff and against the defendant.

1. Condemning (sic) the defendant to pay the plaintiff the sum of twenty thousand
(P20,000.00) pesos as moral damages.

2. Condemning further the defendant to play the plaintiff the sum of three
thousand (P3,000.00) pesos as atty's fees and two thousand (P2,000.00) pesos
at (sic) litigation expenses and to pay the costs.

3. All other claims are denied. 6

The decision is anchored on the trial court's findings and conclusions that (a) petitioner and
private respondent were lovers, (b) private respondent is not a woman of loose morals or
questionable virtue who readily submits to sexual advances, (c) petitioner, through
machinations, deceit and false pretenses, promised to marry private respondent, d) because of
his persuasive promise to marry her, she allowed herself to be deflowered by him, (e) by reason
of that deceitful promise, private respondent and her parents in accordance with Filipino
customs and traditions made some preparations for the wedding that was to be held at the
end of October 1987 by looking for pigs and chickens, inviting friends and relatives and
contracting sponsors, (f) petitioner did not fulfill his promise to marry her and (g) such acts of the
petitioner, who is a foreigner and who has abused Philippine hospitality, have offended our
sense of morality, good customs, culture and traditions. The trial court gave full credit to the
private respondent's testimony because, inter alia, she would not have had the temerity and
courage to come to court and expose her honor and reputation to public scrutiny and ridicule if
her claim was false. 7

The above findings and conclusions were culled from the detailed summary of the evidence for
the private respondent in the foregoing decision, digested by the respondent Court as follows:

According to plaintiff, who claimed that she was a virgin at the time and that she
never had a boyfriend before, defendant started courting her just a few days after
 they first met. He later proposed marriage to her several times and she accepted
his love as well as his proposal of marriage on August 20, 1987, on which same
day he went with her to her hometown of Baaga, Bugallon, Pangasinan, as he
wanted to meet her parents and inform them of their relationship and their
intention to get married. The photographs Exhs. "A" to "E" (and their
submarkings) of defendant with members of plaintiff's family or with plaintiff, were
taken that day. Also on that occasion, defendant told plaintiffs parents and
brothers and sisters that he intended to marry her during the semestral break in
October, 1987, and because plaintiff's parents thought he was good and trusted
him, they agreed to his proposal for him to marry their daughter, and they
likewise allowed him to stay in their house and sleep with plaintiff during the few
days that they were in Bugallon. When plaintiff and defendant later returned to
Dagupan City, they continued to live together in defendant's apartment. However,
in the early days of October, 1987, defendant would tie plaintiff's hands and feet
while he went to school, and he even gave her medicine at 4 o'clock in the
morning that made her sleep the whole day and night until the following day. As a
result of this live-in relationship, plaintiff became pregnant, but defendant gave
her some medicine to abort the fetus. Still plaintiff continued to live with
defendant and kept reminding him of his promise to marry her until he told her
that he could not do so because he was already married to a girl in Bacolod City.
That was the time plaintiff left defendant, went home to her parents, and
thereafter consulted a lawyer who accompanied her to the barangay captain in
Dagupan City. Plaintiff, her lawyer, her godmother, and a barangay tanod sent by
the barangay captain went to talk to defendant to still convince him to marry
plaintiff, but defendant insisted that he could not do so because he was already
married to a girl in Bacolod City, although the truth, as stipulated by the parties at
the pre-trial, is that defendant is still single.

Plaintiff's father, a tricycle driver, also claimed that after defendant had informed
them of his desire to marry Marilou, he already looked for sponsors for the
wedding, started preparing for the reception by looking for pigs and chickens,
8
and even already invited many relatives and friends to the forthcoming wedding.

Petitioner appealed the trial court's decision to the respondent Court of Appeals which docketed
the case as CA-G.R. CV No. 24256. In his Brief, 9 he contended that the trial court erred (a) in
not dismissing the case for lack of factual and legal basis and (b) in ordering him to pay moral
damages, attorney's fees, litigation expenses and costs.

On 18 February 1991, respondent Court promulgated the challenged decision 10 affirming in

toto the trial court's ruling of 16 October 1989. In sustaining the trial court's findings of fact,
respondent Court made the following analysis:

First of all, plaintiff, then only 21 years old when she met defendant who was
already 29 years old at the time, does not appear to be a girl of loose morals. It is
uncontradicted that she was a virgin prior to her unfortunate experience with
defendant and never had boyfriend. She is, as described by the lower court, a
barrio lass "not used and accustomed to trend of modern urban life", and
certainly would (sic) not have allowed
"herself to be deflowered by the defendant if there was no persuasive promise
made by the defendant to marry her." In fact, we agree with the lower court that
plaintiff and defendant must have been sweethearts or so the plaintiff must have
thought because of the deception of defendant, for otherwise, she would not
have allowed herself to be photographed with defendant in public in so (sic)
loving and tender poses as those depicted in the pictures Exhs. "D" and "E". We
cannot believe, therefore, defendant's pretense that plaintiff was a nobody to him
except a waitress at the restaurant where he usually ate. Defendant in fact
admitted that he went to plaintiff's hometown of Baaga, Bugallon, Pangasinan,
at least thrice; at (sic) the town fiesta on February 27, 1987 (p. 54, tsn May 18,
1988), at (sic) a beach party together with the manager and employees of the
Mabuhay Luncheonette on March 3, 1987 (p. 50, tsn id.), and on April 1, 1987
when he allegedly talked to plaintiff's mother who told him to marry her daughter
(pp. 55-56, tsn id.). Would defendant have left Dagupan City where he was
 involved in the serious study of medicine to go to plaintiff's hometown in Baaga,
Bugallon, unless there was (sic) some kind of special relationship between them?
And this special relationship must indeed have led to defendant's insincere
proposal of marriage to plaintiff, communicated not only to her but also to her
parents, and (sic) Marites Rabino, the owner of the restaurant where plaintiff was
working and where defendant first proposed marriage to her, also knew of this
love affair and defendant's proposal of marriage to plaintiff, which she declared
was the reason why plaintiff resigned from her job at the restaurant after she had
accepted defendant's proposal (pp. 6-7, tsn March 7, 1988).

Upon the other hand, appellant does not appear to be a man of good moral
character and must think so low and have so little respect and regard for Filipino
women that he openly admitted that when he studied in Bacolod City for several
years where he finished his B.S. Biology before he came to Dagupan City to
study medicine, he had a common-law wife in Bacolod City. In other words, he
also lived with another woman in Bacolod City but did not marry that woman, just
like what he did to plaintiff. It is not surprising, then, that he felt so little
compunction or remorse in pretending to love and promising to marry plaintiff, a
young, innocent, trustful country girl, in order to satisfy his lust on her. 11

and then concluded:

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

fraudulent and deceptive protestations of love for and promise to marry plaintiff
that made her surrender her virtue and womanhood to him and to live with him
on the honest and sincere belief that he would keep said promise, and it was
likewise these (sic) fraud and deception on appellant's part that made plaintiff's
parents agree to their daughter's living-in with him preparatory to their supposed
marriage. And as these acts of appellant are palpably and undoubtedly against
morals, good customs, and public policy, and are even gravely and deeply
derogatory and insulting to our women, coming as they do from a foreigner who
has been enjoying the hospitality of our people and taking advantage of the
opportunity to study in one of our institutions of learning, defendant-appellant
should indeed be made, under Art. 21 of the Civil Code of the Philippines, to
compensate for the moral damages and injury that he had caused plaintiff, as the
lower court ordered him to do in its decision in this case. 12

Unfazed by his second defeat, petitioner filed the instant petition on 26 March 1991; he raises
therein the single issue of whether or not Article 21 of the Civil Code applies to the case at
bar. 13

It is petitioner's thesis that said Article 21 is not applicable because he had not committed any
moral wrong or injury or violated any good custom or public policy; he has not professed love or
proposed marriage to the private respondent; and he has never maltreated her. He criticizes the
trial court for liberally invoking Filipino customs, traditions and culture, and ignoring the fact that
since he is a foreigner, he is not conversant with such Filipino customs, traditions and culture.
As an Iranian Moslem, he is not familiar with Catholic and Christian ways. He stresses that even
if he had made a promise to marry, the subsequent failure to fulfill the same is excusable or
tolerable because of his Moslem upbringing; he then alludes to the Muslim Code which
purportedly allows a Muslim to take four (4) wives and concludes that on the basis thereof, the
trial court erred in ruling that he does not posses good moral character. Moreover, his
controversial "common law life" is now his legal wife as their marriage had been solemnized in
civil ceremonies in the Iranian Embassy. As to his unlawful cohabitation with the private
respondent, petitioner claims that even if responsibility could be pinned on him for the live-in
relationship, the private respondent should also be faulted for consenting to an illicit
arrangement. Finally, petitioner asseverates that even if it was to be assumed arguendo that he
had professed his love to the private respondent and had also promised to marry her, such acts
would not be actionable in view of the special circumstances of the case. The mere breach of
promise is not actionable. 14
On 26 August 1991, after the private respondent had filed her Comment to the petition and the
petitioner had filed his Reply thereto, this Court gave due course to the petition and required the
parties to submit their respective Memoranda, which they subsequently complied with.

As may be gleaned from the foregoing summation of the petitioner's arguments in support of his
thesis, it is clear that questions of fact, which boil down to the issue of the credibility of
witnesses, are also raised. It is the rule in this jurisdiction that appellate courts will not disturb
the trial court's findings as to the credibility of witnesses, the latter court having heard the
witnesses and having had the opportunity to observe closely their deportment and manner of
testifying, unless the trial court had plainly overlooked facts of substance or value which, if
considered, might affect the result of the case. 15

Petitioner has miserably failed to convince Us that both the appellate and trial courts had
overlooked any fact of substance or values which could alter the result of the case.

Equally settled is the rule that only questions of law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court. It is not the function of this Court to analyze or
weigh all over again the evidence introduced by the parties before the lower court. There are,
however, recognized exceptions to this rule. Thus, inMedina vs. Asistio, Jr., 16 this Court took
the time, again, to enumerate these exceptions:

xxx xxx xxx

(1) When the conclusion is a finding grounded entirely on speculation, surmises

or conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When the inference
made is manifestly mistaken, absurb or impossible (Luna v. Linatok, 74 Phil. 15
[1942]); (3) Where there is a grave abuse of discretion (Buyco v. People, 95 Phil.
453 [1955]); (4) When the judgment is based on a misapprehension of facts
(Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are conflicting (Casica v.
Villaseca, L-9590 Ap. 30, 1957; unrep.) (6) When the Court of Appeals, in making
its findings, went beyond the issues of the case and the same is contrary to the
admissions of both appellate and appellee (Evangelista v. Alto Surety and
Insurance Co., 103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are contrary to those of the trial court
(Garcia v. Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142
SCRA 593 [1986]); (8) When the findings of fact are conclusions without citation
of specific evidence on which they are based (Ibid.,); (9) When the facts set forth
in the petition as well as in the petitioners main and reply briefs are not disputed
by the respondents (Ibid.,); and (10) The finding of fact of the Court of Appeals is
premised on the supposed absence of evidence and is contradicted by the
evidence on record (Salazar v. Gutierrez, 33 SCRA 242 [1970]).

Petitioner has not endeavored to joint out to Us the existence of any of the above quoted
exceptions in this case. Consequently, the factual findings of the trial and appellate courts must
be respected.

And now to the legal issue.

The existing rule is that a breach of promise to marry per se is not an actionable
wrong. 17 Congress deliberately eliminated from the draft of the New Civil Code the provisions
that would have made it so. The reason therefor is set forth in the report of the Senate
Committees on the Proposed Civil Code, from which We quote:

The elimination of this chapter is proposed. That breach of promise to marry is

not actionable has been definitely decided in the case of De Jesus vs.
Syquia. 18 The history of breach of promise suits in the United States and in
England has shown that no other action lends itself more readily to abuse by
designing women and unscrupulous men. It is this experience which has led to
the abolition of rights of action in the so-called Heart Balm suits in many of the
American states. . . . 19
This notwithstanding, the said Code contains a provision, Article 21, which is designed to
expand the concept of torts or quasi-delict in this jurisdiction by granting adequate legal remedy
for the untold number of moral wrongs which is impossible for human foresight to specifically
enumerate and punish in the statute books. 20

As the Code Commission itself stated in its Report:

But the Code Commission had gone farther than the sphere of wrongs defined or
determined by positive law. Fully sensible that there are countless gaps in the
statutes, which leave so many victims of moral wrongs helpless, even though
they have actually suffered material and moral injury, the Commission has
deemed it necessary, in the interest of justice, to incorporate in the proposed
Civil Code the following rule:

Art. 23. Any person who wilfully causes loss or injury to another in
a manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage.

An example will illustrate the purview of the foregoing norm: "A" seduces the
nineteen-year old daughter of "X". A promise of marriage either has not been
made, or can not be proved. The girl becomes pregnant. Under the present laws,
there is no crime, as the girl is above nineteen years of age. Neither can any civil
action for breach of promise of marriage be filed. Therefore, though the grievous
moral wrong has been committed, and though the girl and family have suffered
incalculable moral damage, she and her parents cannot bring action for
damages. But under the proposed article, she and her parents would have such
a right of action.

Thus at one stroke, the legislator, if the forgoing rule is approved, would
vouchsafe adequate legal remedy for that untold number of moral wrongs which
it is impossible for human foresight to provide for specifically in the statutes. 21

Article 2176 of the Civil Code, which defines a quasi-delict thus:

Whoever by act or omission causes damage to another, there being fault or

negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre-existing contractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter.

is limited to negligent acts or omissions and excludes the notion of willfulness or

intent. Quasi-delict, known in Spanish legal treatises as culpa aquiliana, is a civil law
concept while torts is an Anglo-American or common law concept. Torts is much broader
than culpa aquiliana because it includes not only negligence, but international criminal
acts as well such as assault and battery, false imprisonment and deceit. In the general
scheme of the Philippine legal system envisioned by the Commission responsible for
drafting the New Civil Code, intentional and malicious acts, with certain exceptions, are
to be governed by the Revised Penal Code while negligent acts or omissions are to be
covered by Article 2176 of the Civil Code. 22 In between these opposite spectrums are
injurious acts which, in the absence of Article 21, would have been beyond redress.
Thus, Article 21 fills that vacuum. It is even postulated that together with Articles 19 and
20 of the Civil Code, Article 21 has greatly broadened the scope of the law on civil
wrongs; it has become much more supple and adaptable than the Anglo-American law
on torts. 23

In the light of the above laudable purpose of Article 21, We are of the opinion, and so hold, that
where a man's promise to marry is in fact the proximate cause of the acceptance of his love by
a woman and his representation to fulfill that promise thereafter becomes the proximate cause
of the giving of herself unto him in a sexual congress, proof that he had, in reality, no intention of
marrying her and that the promise was only a subtle scheme or deceptive device to entice or
inveigle her to accept him and to obtain her consent to the sexual act, could justify the award of
damages pursuant to Article 21 not because of such promise to marry but because of the fraud
and deceit behind it and the willful injury to her honor and reputation which followed thereafter. It
is essential, however, that such injury should have been committed in a manner contrary to
morals, good customs or public policy.

In the instant case, respondent Court found that it was the petitioner's "fraudulent and deceptive
protestations of love for and promise to marry plaintiff that made her surrender her virtue and
womanhood to him and to live with him on the honest and sincere belief that he would keep said
promise, and it was likewise these fraud and deception on appellant's part that made plaintiff's
parents agree to their daughter's living-in with him preparatory to their supposed marriage." 24 In
short, the private respondent surrendered her virginity, the cherished possession of every single
Filipina, not because of lust but because of moral seduction the kind illustrated by the Code
Commission in its example earlier adverted to. The petitioner could not be held liable for
criminal seduction punished under either Article 337 or Article 338 of the Revised Penal Code
because the private respondent was above eighteen (18) years of age at the time of the
seduction.

Prior decisions of this Court clearly suggest that Article 21 may be applied in a breach of
promise to marry where the woman is a victim of moral seduction. Thus, in Hermosisima
vs. Court of Appeals, 25 this Court denied recovery of damages to the woman because:

. . . we find ourselves unable to say that petitioner is morally guilty of seduction,

not only because he is approximately ten (10) years younger than the
complainant who was around thirty-six (36) years of age, and as highly
enlightened as a former high school teacher and a life insurance agent are
supposed to be when she became intimate with petitioner, then a mere
apprentice pilot, but, also, because the court of first instance found that,
complainant "surrendered herself" to petitioner because, "overwhelmed by her
love" for him, she "wanted to bind" him by having a fruit of their engagement
even before they had the benefit of clergy.

In Tanjanco vs. Court of Appeals, 26 while this Court likewise hinted at possible recovery if there
had been moral seduction, recovery was eventually denied because We were not convinced
that such seduction existed. The following enlightening disquisition and conclusion were made
in the said case:

The Court of Appeals seem to have overlooked that the example set forth in the
Code Commission's memorandum refers to a tort upon a minor who had
been seduced. The essential feature is seduction, that in law is more than mere
sexual intercourse, or a breach of a promise of marriage; it connotes essentially
the idea of deceit, enticement, superior power or abuse of confidence on the part
of the seducer to which the woman has yielded (U.S. vs. Buenaventura, 27 Phil.
121; U.S. vs. Arlante, 9 Phil. 595).

It has been ruled in the Buenaventura case (supra) that

To constitute seduction there must in all cases be some sufficient

promise or inducement and the woman must yield because of the
promise or other inducement. If she consents merely from carnal
lust and the intercourse is from mutual desire, there is no
seduction (43 Cent. Dig. tit. Seduction, par. 56) She must be
induced to depart from the path of virtue by the use of some
species of arts, persuasions and wiles, which are calculated to
have and do have that effect, and which result in her person to
ultimately submitting her person to the sexual embraces of her
seducer (27 Phil. 123).

And in American Jurisprudence we find:

On the other hand, in an action by the woman, the enticement,

persuasion or deception is the essence of the injury; and a mere
proof of intercourse is insufficient to warrant a recovery.
 Accordingly it is not seduction where the willingness arises out of
sexual desire of curiosity of the female, and the defendant merely
affords her the needed opportunity for the commission of the act.
It has been emphasized that to allow a recovery in all such cases
would tend to the demoralization of the female sex, and would be
a reward for unchastity by which a class of adventuresses would
be swift to profit. (47 Am. Jur. 662)

xxx xxx xxx

Over and above the partisan allegations, the fact stand out that for one whole
year, from 1958 to 1959, the plaintiff-appellee, a woman of adult age, maintain
intimate sexual relations with appellant, with repeated acts of intercourse. Such
conduct is incompatible with the idea of seduction. Plainly there is here
voluntariness and mutual passion; for had the appellant been deceived, had she
surrendered exclusively because of the deceit, artful persuasions and wiles of the
defendant, she would not have again yielded to his embraces, much less for one
year, without exacting early fulfillment of the alleged promises of marriage, and
would have cut short all sexual relations upon finding that defendant did not
intend to fulfill his defendant did not intend to fulfill his promise. Hence, we
conclude that no case is made under article 21 of the Civil Code, and no other
cause of action being alleged, no error was committed by the Court of First
Instance in dismissing the complaint. 27

In his annotations on the Civil Code, 28 Associate Justice Edgardo L. Paras, who recently retired
from this Court, opined that in a breach of promise to marry where there had been carnal
knowledge, moral damages may be recovered:

. . . if there be criminal or moral seduction, but not if the intercourse was due to
mutual lust. (Hermosisima vs. Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733, Sept. 30, 1960;
Batarra vs. Marcos, 7 Phil. 56 (sic); Beatriz Galang vs. Court of Appeals, et al., L-
17248, Jan. 29, 1962). (In other words, if the CAUSE be the promise to marry,
and the EFFECT be the carnal knowledge, there is a chance that there
was criminal or moral seduction, hence recovery of moral damages will prosper.
If it be the other way around, there can be no recovery of moral damages,
because here mutual lust has intervened). . . .

together with "ACTUAL damages, should there be any, such as the expenses for the
wedding presentations (See Domalagon v. Bolifer, 33 Phil. 471).

Senator Arturo M. Tolentino 29 is also of the same persuasion:

It is submitted that the rule in Batarra vs. Marcos, 30 still subsists, notwithstanding
the incorporation of the present article 31 in the Code. The example given by the
Code Commission is correct, if there wasseduction, not necessarily in the legal
sense, but in the vulgar sense of deception. But when the sexual act is
accomplished without any deceit or qualifying circumstance of abuse of authority
or influence, but the woman, already of age, has knowingly given herself to a
man, it cannot be said that there is an injury which can be the basis for
indemnity.

But so long as there is fraud, which is characterized by willfulness (sic), the

action lies. The court, however, must weigh the degree of fraud, if it is sufficient
to deceive the woman under the circumstances, because an act which would
deceive a girl sixteen years of age may not constitute deceit as to an
experienced woman thirty years of age. But so long as there is a wrongful act
and a resulting injury, there should be civil liability, even if the act is not
punishable under the criminal law and there should have been an acquittal or
dismissal of the criminal case for that reason.
We are unable to agree with the petitioner's alternative proposition to the effect that granting, for
argument's sake, that he did promise to marry the private respondent, the latter is nevertheless
also at fault. According to him, both parties are in pari delicto; hence, pursuant to Article 1412(1)
of the Civil Code and the doctrine laid down in Batarra vs. Marcos, 32 the private respondent
cannot recover damages from the petitioner. The latter even goes as far as stating that if the
private respondent had "sustained any injury or damage in their relationship, it is primarily
because of her own doing, 33 for:

. . . She is also interested in the petitioner as the latter will become a doctor
sooner or later. Take notice that she is a plain high school graduate and a mere
employee . . . (Annex "C") or a waitress (TSN, p. 51, January 25, 1988) in a
luncheonette and without doubt, is in need of a man who can give her economic
security. Her family is in dire need of financial assistance. (TSN, pp. 51-53, May
18, 1988). And this predicament prompted her to accept a proposition that may
have been offered by the petitioner. 34

These statements reveal the true character and motive of the petitioner. It is clear that he
harbors a condescending, if not sarcastic, regard for the private respondent on account of the
latter's ignoble birth, inferior educational background, poverty and, as perceived by him,
dishonorable employment. Obviously then, from the very beginning, he was not at all moved by
good faith and an honest motive. Marrying with a woman so circumstances could not have even
remotely occurred to him. Thus, his profession of love and promise to marry were empty words
directly intended to fool, dupe, entice, beguile and deceive the poor woman into believing that
indeed, he loved her and would want her to be his life's partner. His was nothing but pure lust
which he wanted satisfied by a Filipina who honestly believed that by accepting his proffer of
love and proposal of marriage, she would be able to enjoy a life of ease and security. Petitioner
clearly violated the Filipino's concept of morality and brazenly defied the traditional respect
Filipinos have for their women. It can even be said that the petitioner committed such deplorable
acts in blatant disregard of Article 19 of the Civil Code which directs every person to act with
justice, give everyone his due and observe honesty and good faith in the exercise of his rights
and in the performance of his obligations.

No foreigner must be allowed to make a mockery of our laws, customs and traditions.

The pari delicto rule does not apply in this case for while indeed, the private respondent may not
have been impelled by the purest of intentions, she eventually submitted to the petitioner in
sexual congress not out of lust, but because of moral seduction. In fact, it is apparent that she
had qualms of conscience about the entire episode for as soon as she found out that the
petitioner was not going to marry her after all, she left him. She is not, therefore, in pari
delicto with the petitioner. Pari delicto means "in equal fault; in a similar offense or crime; equal
in guilt or in legal fault." 35 At most, it could be conceded that she is merely in delicto.

Equity often interferes for the relief of the less guilty of the parties, where his
transgression has been brought about by the imposition of undue influence of the
party on whom the burden of the original wrong principally rests, or where his
consent to the transaction was itself procured by
fraud. 36

In Mangayao vs. Lasud, 37 We declared:

Appellants likewise stress that both parties being at fault, there should be no
action by one against the other (Art. 1412, New Civil Code). This rule, however,
has been interpreted as applicable only where the fault on both sides is, more or
less, equivalent. It does not apply where one party is literate or intelligent and the
other one is not. (c.f. Bough vs. Cantiveros, 40 Phil. 209).

We should stress, however, that while We find for the private respondent, let it not be said that
this Court condones the deplorable behavior of her parents in letting her and the petitioner stay
together in the same room in their house after giving approval to their marriage. It is the solemn
duty of parents to protect the honor of their daughters and infuse upon them the higher values of
morality and dignity.
WHEREFORE, finding no reversible error in the challenged decision, the instant petition is
hereby DENIED, with costs against the petitioner.

SO ORDERED.

Feliciano, Bidin, Romero and Melo, JJ., concur.

Gutierrez, Jr., J., is on leave.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-17396 May 30, 1962

CECILIO PE, ET AL., plaintiffs-appellants,

vs.
ALFONSO PE, defendant-appellee.

Cecilio L. Pe for and in his own behalf as plaintiff-appellant.

Leodegario L. Mogol for defendant-appellee.

BAUTISTA ANGELO, J.:

Plaintiffs brought this action before the Court of First Instance of Manila to recover moral,
compensatory, exemplary and corrective damages in the amount of P94,000.00 exclusive of
attorney's fees and expenses of litigation.

Defendant, after denying some allegations contained in the complaint, set up as a defense that
the facts alleged therein, even if true, do not constitute a valid cause of action.

After trial, the lower court, after finding that defendant had carried on a love affair with one Lolita
Pe, an unmarried woman, being a married man himself, declared that defendant cannot be held
liable for moral damages it appearing that plaintiffs failed to prove that defendant, being aware
of his marital status, deliberately and in bad faith tried to win Lolita's affection. So it rendered
decision dismissing the complaint.1wph1.t

Plaintiffs brought this case on appeal before this Court on the ground that the issues involved
are purely of law.

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

Sometime in April, 1957, Lolita was staying with her brothers and sisters at their residence at
54-B Espaa Extension, Quezon City. On April 14, 1957, Lolita disappeared from said house.
After she left, her brothers and sisters checked up her thing and found that Lolita's clothes were
gone. However, plaintiffs found a note on a crumpled piece of paper inside Lolita's aparador.
Said note, written on a small slip of paper approximately 4" by 3" in size, was in a handwriting
recognized to be that of defendant's. In English it reads:

Honey, suppose I leave here on Sunday night, and that's 13th of this month and we will
have a date on the 14th, that's Monday morning at 10 a.m.
 Reply

Love

The disappearance of Lolita was reported to the police authorities and the NBI but up to the
present there is no news or trace of her whereabouts.

The present action is based on Article 21 of the New Civil Code which provides:

Any person who wilfully causes loss or injury to another in a manner which is contrary to
morals, good customs or public policy shall compensate the latter for the damage.

There is no doubt that the claim of plaintiffs for damages is based on the fact that defendant,
being a married man, carried on a love affair with Lolita Pe thereby causing plaintiffs injury in a
manner contrary to morals, good customs and public policy. But in spite of the fact that plaintiffs
have clearly established that in illicit affair was carried on between defendant and Lolita which
caused great damage to the name and reputation of plaintiffs who are her parents, brothers and
sisters, the trial court considered their complaint not actionable for the reason that they failed to
prove that defendant deliberately and in bad faith tried to win Lolita's affection Thus, the trial
court said: "In the absence of proof on this point, the court may not presume that it was the
defendant who deliberately induced such relationship. We cannot be unmindful of the
uncertainties and sometimes inexplicable mysteries of the human emotions. It is a possibility
that the defendant and Lolita simply fell in love with each other, not only without any desire on
their part, but also against their better judgment and in full consciousness of what it will bring to
both of them. This is specially so with respect to Lolita, being an unmarried woman, falling in
love with defendant who is a married man."

We disagree with this view. The circumstances under which defendant tried to win Lolita's
affection cannot lead, to any other conclusion than that it was he who, thru an ingenious
scheme or trickery, seduced the latter to the extent of making her fall in love with him. This is
shown by the fact that defendant frequented the house of Lolita on the pretext that he wanted
her to teach him how to pray the rosary. Because of the frequency of his visits to the latter's
family who was allowed free access because he was a collateral relative and was considered as
a member of her family, the two eventually fell in love with each other and conducted
clandestine love affairs not only in Gasan but also in Boac where Lolita used to teach in a barrio
school. When the rumors about their illicit affairs reached the knowledge of her parents,
defendant was forbidden from going to their house and even from seeing Lolita. Plaintiffs even
filed deportation proceedings against defendant who is a Chinese national. Nevertheless,
defendant continued his love affairs with Lolita until she disappeared from the parental home.
Indeed, no other conclusion can be drawn from this chain of events than that defendant not only
deliberately, but through a clever strategy, succeeded in winning the affection and love of Lolita
to the extent of having illicit relations with her. The wrong he has caused her and her family is
indeed immeasurable considering the fact that he is a married man. Verily, he has committed an
injury to Lolita's family in a manner contrary to morals, good customs and public policy as
contemplated in Article 21 of the new Civil Code.

WHEREFORE, the decision appealed from is reversed. Defendant is hereby sentenced to pay
the plaintiffs the sum of P5,000.00 as damages and P2,000.00 as attorney's fees and expenses
of litigations. Costs against appellee.

Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes and Dizon, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Baguio City

THIRD DIVISION

G.R. No. 142943 April 3, 2002

Spouses ANTONIO and LORNA QUISUMBING, petitioners,

vs.
MANILA ELECTRIC COMPANY (MERALCO), respondent.

PANGANIBAN, J.:

Under the law, the Manila Electric Company (Meralco) may immediately disconnect electric
service on the ground of alleged meter tampering, but only if the discovery of the cause is
personally witnessed and attested to by an officer of the law or by a duly authorized
representative of the Energy Regulatory Board.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the February 1,
2000 Decision1and the April 10, 2000 Resolution2 of the Court of Appeals (CA) in CA-GR SP
No. 49022. The decretal portion of the said Decision reads as follows:

"WHEREFORE, the challenged decision in Civil Case No. Q-95-23219 is hereby SET
ASIDE and the complaint against defendant-appellant MERALCO is
hereby DISMISSED. Plaintiffs-appellees are herebyORDERED to pay defendant-
appellant MERALCO the differential billing of P193,332.00 representing the value of
used but unregistered electrical consumption."3

The assailed Resolution denied petitioner's Motion for Reconsideration.

The Facts

The facts of the case are summarized by the Court of Appeals in this wise:

"Defendant-appellant Manila Electric Company (MERALCO) is a private corporation,

authorized by law to charge all persons, including the government, for the consumption
of electric power at rates duly authorized and approved by the Board of Energy (now the
Energy Regulatory Board).

"Plaintiffs-appellees Spouses Antonio and Lorna Quisumbing are owners of a house and
lot located at No. 94 Greenmeadows Avenue, Quezon City, which they bought on April
7, 1994 from Ms. Carmina Serapio Santos. They alleged to be business entrepreneurs
engaged in the export of furnitures under the business name 'Loran Industries' and
recipient of the 1993 Agora Award and 1994 Golden Shell Award. Mrs. Quisumbing is a
member of the Innerwheel Club while Mr. Quisumbing is a member of the Rotary Club,
Chairman of Cebu Chamber of Commerce, and Director of Chamber of Furniture.

"On March 3, 1995 at around 9:00 a.m., defendant-appellant's inspectors headed by

Emmanuel C. Orlino were assigned to conduct a routine-on-the-spot inspection of all
single phase meters at Greenmeadows Avenue. House no. 94 of Block 8, Lot 19
Greenmeadows Avenue owned by plaintiffs-appellees was inspected after observing a
standard operating procedure of asking permission from plaintiffs-appellees, through
their secretary which was granted. The secretary witnessed the inspection. After the
inspection, defendant-appellant's inspectors discovered that the terminal seal of the
meter was missing; the meter cover seal was deformed; the meter dials of the meter was
mis-aligned and there were scratches on the meter base plate. Defendant-appellant's
inspectors relayed the matter to plaintiffs-appellees' secretary, who in turn relayed the
same to plaintiff-appellee, Lorna Quisumbing, who was outraged of the result of the
 inspection and denied liability as to the tampering of the meter. Plaintiffs-appellees were
advised by defendant-appellant's inspectors that they had to detach the meter and bring
it to their laboratory for verification/confirmation of their findings. In the event the meter
turned out to be tampered, defendant-appellant had to temporarily disconnect the
electric services of plaintiffs-appellees. The laboratory testing conducted on the meter
has the following findings to wit:

'1. Terminal seal was missing.

'2. Lead cover seals ('90 ERB 1-Meralco 21) were tampered by forcibly pulling
out from the sealing wire.

'3. The 1000th, 100th and 10th dial pointers of the register were found out of
alignment and with circular scratches at the face of the register which indicates
that the meter had been opened to manipulate the said dial pointers and set
manually to the desired reading. In addition to this, the meter terminal blades
were found full of scratches.'

"After an hour, defendant-appellant's head inspector, E. Orlina returned to the residence

of plaintiffs-appellees and informed them that the meter had been tampered and unless
they pay the amount ofP178,875.01 representing the differential billing, their electric
supply would be disconnected. Orlina informed plaintiffs-appellees that they were just
following their standard operating procedure. Plaintiffs-appellees were further advised
that questions relative to the results of the inspection as well as the disconnection of her
electrical services for Violation of Contract (VOC) may be settled with Mr. M. Manuson of
the Special Accounts, Legal Service Department. However, on the same day at around
2:00 o'clock in the afternoon defendant-appellant's officer through a two-way radio
instructed its service inspector headed by Mr. Orlino to reconnect plaintiffs-appellees'
electric service which the latter faithfully complied.

"On March 6, 1995, plaintiffs-appellees filed a complaint for damages with prayer for the
issuance of a writ of preliminary mandatory injunction, despite the immediate
reconnection, to order defendant-appellant to furnish electricity to the plaintiffs-appellees
alleging that defendant-appellant acted with wanton, capricious, malicious and
malevolent manner in disconnecting their power supply which was done without due
process, and without due regard for their rights, feelings, peace of mind, social and
business reputation.

"In its Answer, defendant-appellant admitted disconnecting the electric service at the
plaintiffs-appellees' house but denied liability citing the 'Terms and Conditions of
Service,' and Republic Act No. 7832 otherwise known a 'Anti-Electricity and Electric
Transmission Lines/Materials Pilferage Act of 1994.'

"After trial on the merits, the lower court rendered judgment, ruling in favor of plaintiffs-
appellees."4(Citations omitted)

Ruling of the Trial Court

The trial court held that Meralco (herein respondent) should have given the Quisumbing
spouses (herein petitioners) ample opportunity to dispute the alleged meter tampering.

It held that respondent had acted summarily and without procedural due process in immediately
disconnecting the electric service of petitioners. Respondent's action, ruled the RTC, constituted
a quasi delict.

Ruling of the Court of Appeals

The Court of Appeals overturned the trial court's ruling and dismissed the Complaint. It held that
respondent's representatives had acted in good faith when they disconnected petitioners'
electric service. Citing testimonial and documentary evidence, it ruled that the disconnection
was made only after observing due process. Further, it noted that petitioners had not been able
to prove their claim for damages. The appellate court likewise upheld respondent's counterclaim
for the billing differential in the amount of P193,3325 representing the value of petitioners' used
but unregistered electrical consumption, which had been established without being
controverted.

Hence, this Petition.6

The Issues

In their Memorandum,7 petitioners submit the following issues for our consideration:

"4.1 Whether a prima facie presumption of tampering of electrical meter enumerated

under Sec. 4 (a) iv of RA 7832 (Anti-Electricity and Electric Transmission Lines/Materials
Pilferage Act of 1994) may be had despite the absence of an ERB representative or an
officer of the law?

"4.2 Whether the enumeration of instances to establish a prima facie presumption of

tampering of electrical meter enumerated under Sec. 4 (a) iv of RA 7832 (Anti-Electricity
and Electric Transmission Lines/Materials Pilferage Act of 1994) is exclusive?

"4.3 What constitutes notice prior to disconnection of electricity service? Corollarily,

whether the definition of notice under Meralco v. Court of Appeals (157 SCRA 243)
applies to the case at bar?

"4.4 Whether a prima facie presumption may contradict logic?

"4.5 Whether documentary proof is pre-requisite for award of damages?"8

In sum, this Petition raises three (3) main issues which this Court will address: (1) whether
respondent observed the requisites of law when it disconnected the electrical supply of
petitioners, (2) whether such disconnection entitled petitioners to damages, and (3) whether
petitioners are liable for the billing differential computed by respondent.

The Court's Ruling

The Petition is partly meritorious.

First Issue:

Compliance with Requisites of Law

Petitioners contend that the immediate disconnection of electrical service was not validly
effected because of respondent's noncompliance with the relevant provisions of RA 7832, the
"Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994." They insist
that the immediate disconnection of electrical supply may only be validly effected only when
there is prima facie evidence of its illegal use. To constitute prima facie evidence, the discovery
of the illegal use must be "personally witnessed and attested to by an officer of the law or a duly
authorized representative of the Energy Regulatory Board (ERB)."

Respondent, on the other hand, points out that the issue raised by petitioners is a question of
fact which this Court cannot pass upon. It argues further that this issue, which was not raised in
the court below, can no longer be taken up for the first time on appeal. Assuming arguendo that
the issue was raised below, it also contends that petitioners were not able to specifically prove
the absence of an officer of the law or a duly authorized representative of the ERB when the
discovery was made.1wphi1.nt

Prima facie Evidence of Illegal Use of Electricity

We agree with petitioners. Section 4 of RA 7832 states:

 (a) The presence of any of the following circumstances shall constitute prima
facie evidence of illegal use of electricity, as defined in this Act, by the person benefitted
thereby, and shall be the basis for: (1) the immediate disconnection by the electric utility
to such person after due notice, x x x

xxx xxx xxx

(viii) x x x Provided, however, That the discovery of any of the foregoing circumstances,
in order to constitute prima facie evidence, must be personally witnessed and attested to
by an officer of the law or a duly authorized representative of the Energy Regulatory
Board (ERB)."9 (Italics supplied)

Under the above provision, the prima facie presumption that will authorize immediate
disconnection will arise only upon the satisfaction of certain requisites. One of these requisites
is the personal witnessing and attestation by an officer of the law or by an authorized ERB
representative when the discovery was made.

As a rule, this Court reviews only questions of law, not of facts. However, it may pass upon the
evidence when the factual findings of the trial court are different from those of the Court of
Appeals, as in this case.10

A careful review of the evidence on record negates the appellate court's holding that "the
actions of defendant-appellant's service inspectors were all in accord with the requirement of
the law."11

Respondent's own witnesses provided the evidence on who were actually present when the
inspection was made. Emmanuel C. Orlino, the head of the Meralco team, testified:

"Q When you were conducting this inspection, and you discovered these findings
you testified earlier, who was present?

A The secretary, sir."12

"ATTY. REYES - Who else were the members of your team that conducted this
inspection at Greenmeadows Avenue on that day, March 3, 1995?

A The composition of the team, sir?

Q Yes.

A Including me, we are about four (4) inspectors, sir.

Q You were four (4)?

A Yes, sir.

Q Who is the head of this team?

A I was the head of the team, sir."13

Further, Catalino A. Macaraig, the area head of the Orlino team, stated that only Meralco
personnel had been present during the inspection:

"Q By the way you were not there at Green Meadows on that day, right?

A Yes, sir.

Q Only Mr. Orlino and who else were there?

A Two or three of his men.

 Q All members of the inspection team?

A Yes, sir."14

These testimonies clearly show that at the time the alleged meter tampering was discovered,
only the Meralco inspection team and petitioners' secretary were present. Plainly, there was no
officer of the law or ERB representative at that time. Because of the absence of government
representatives, the prima facie authority to disconnect, granted to Meralco by RA 7832, cannot
apply.

Neither can respondent find solace in the fact that petitioners' secretary was present at the time
the inspection was made. The law clearly states that for the prima facie evidence to apply, the
discovery "must be personally witnessed and attested to by an officer of the law or a duly
authorized representative of the Energy Regulatory Board (ERB)."15 Had the law intended the
presence of the owner or his/her representative to suffice, then it should have said so.
Embedded in our jurisprudence is the rule that courts may not construe a statute that is free
from doubt.16 Where the law is clear and unambiguous, it must be taken to mean exactly what it
says, and courts have no choice but to see to it that the mandate is obeyed.17

In fact, during the Senate deliberations on RA 7832, Senator John H. Osmea, its author,
stressed the need for the presence of government officers during inspections of electric meters.
He said:

"Mr. President, if a utility like MERALCO finds certain circumstances or situations which
are listed in Section 2 of this bill to be prima facie evidence, I think they should be
prudent enough to bring in competent authority, either the police or the NBI, to verify or
substantiate their finding. If they were to summarily proceed to disconnect on the basis
of their findings and later on there would be a court case and the customer or the user
would deny the existence of what is listed in Section 2, then they could be in a lot of
trouble."18 (Italics supplied)

Neither can we accept respondent's argument that when the alleged tampered meter was
brought to Meralco's laboratory for testing, there was already an ERB representative present.

The law says that before immediate disconnection may be allowed, the discovery of the illegal
use of electricity must have been personally witnessed and attested to by an officer of the law or
by an authorized ERB representative. In this case, the disconnection was effected immediately
after the discovery of the alleged meter tampering, which was witnessed only by Meralco's
employees. That the ERB representative was allegedly present when the meter was examined
in the Meralco laboratory will not cure the defect.

It is undisputed that after members of the Meralco team conducted their inspection and found
alleged meter tampering, they immediately disconnected petitioners' electrical supply. Again,
this verity is culled from the testimony of Meralco's Orlina:

"A When she went inside then she came out together with Mrs. Lourdes
Quis[u]mbing at that time. We did tell our findings regarding the meter and the
consequence with it. And she was very angry with me.

Q When you say consequence of your findings, what exactly did you tell Mrs.
Quisumbing?

A We told her that the service will be temporarily disconnected and that we are
referring to our Legal Department so could know the violation, sir."19

"A Yes, sir. At that time, I referred her to Mr. Macaraig, sir.

Q What is the fist name of this supervisor?

A Mr. Catalino Macara[i]g, sir.

 Q Then after talking to Mr. Catalino Macara[i]g, this is over the telephone, what
happened?

A The supervisor advised her that the service will be temporarily disconnected and
she has to go to our Legal Department where she could settle the VOC, sir.

Q You are talking of 'VOC,' what is this all about Mr. Orlino?

A 'VOC' is violation of contract, sir."20

As to respondent's argument that the presence of an authorized ERB representative had not
been raised below, it is clear, however, that the issue of due process was brought up by
petitioners as a valid issue in the CA. The presence of government agents who may authorize
immediate disconnections go into the essence of due process. Indeed, we cannot allow
respondent to act virtually as prosecutor and judge in imposing the penalty of disconnection due
to alleged meter tampering. That would not sit well in a democratic country. After all, Meralco is
a monopoly that derives its power from the government. Clothing it with unilateral authority to
disconnect would be equivalent to giving it a license to tyrannize its hapless customers.

Besides, even if not specifically raised, this Court has already ruled that "[w]here the issues
already raised also rest on other issues not specifically presented, as long as the latter issues
bear relevance and close relation to the former and as long as they arise from matters on
record, the Court has the authority to include them in its discussion of the controversy as well as
to pass upon them."21

Contractual Right to Disconnect

Electrical Service

Neither may respondent rely on its alleged contractual right to disconnect electrical service
based on Exhibits "10"22 and "11,"23 or on Decisions of the Board of Energy (now the Energy
Regulatory Board). The relevant portion of these documents concerns discontinuance of
service. It provides:

"The Company reserves the right to discontinue service in case the Customer is in
arrears in the payment of bills or for failure to pay the adjusted bills in those cases where
the meter stopped or failed to register the correct amount of energy consumed, or for
failure to comply with any of these terms and conditions, or in case of or to prevent fraud
upon the Company. Before disconnection is made in case of or to prevent fraud, the
Company may adjust the bill of said Customer accordingly and if the adjusted bill is not
paid, the Company may disconnect the same. In case of disconnection, the provisions of
Revised Order No. 1 of the former Public Service Commission (now the Board of
Energy) shall be observed. Any such suspension of service shall not terminate the
contract between the Company and the Customer."24

Petitioners' situation can fall under disconnection only "in case of or to prevent fraud upon the
Company." However, this too has requisites before a disconnection may be made. An adjusted
bill shall be prepared, and only upon failure to pay it may the company discontinue service. This
is also true in regard to the provisions of Revised Order No. 1 of the former Public Service
Commission, which requires a 48-hour written notice before a disconnection may be justified. In
the instant case, these requisites were obviously not complied with.

Second Issue

Damages

Having ruled that the immediate disconnection effected by Meralco lacks legal, factual or
contractual basis, we will now pass upon on the right of petitioners to recover damages for the
improper disconnection.

Petitioners are asking for the reinstatement of the RTC Decision, which awarded them actual,
moral and exemplary damages as well as attorney's fees. All these were overturned by the CA.
As to actual damages, we agree with the CA that competent proof is necessary before our
award may be made. The appellate court ruled as follows:

"Considering further, it is a settled rule that in order for damages to be recovered, the
best evidence obtainable by the injured party must be presented. Actual and
compensatory damages cannot be presumed but must be duly proved and proved with
reasonable degree and certainty. A court cannot rely on speculation, conjecture or guess
work as to the fact and amount of damages, but must depend upon competent proof that
they have been suffered and on evidence of actual amount thereof. If the proof is flimsy
and unsubstantial, no damages will be awarded."25

Actual damages are compensation for an injury that will put the injured party in the position
where it was before it was injured.26 They pertain to such injuries or losses that are actually
sustained and susceptible of measurement.27 Except as provided by law or by stipulation, a
party is entitled to an adequate compensation only for such pecuniary loss as it has duly
proven.28

Basic is the rule that to recover actual damages, not only must the amount of loss be capable of
proof; it must also be actually proven with a reasonable degree of certainty, premised upon
competent proof or the best evidence obtainable.29

Petitioners' claim for actual damages was premised only upon Lorna Quisumbing's bare
testimony as follows:

"A Actually that da[y] I was really scheduled to go to that furniture exhibit. That
furniture exhibit is only once a year.

Q What is this furniture exhibit?

A The SITEM, that is a government agency that takes care of exporters and
exclusive marketing of our products around the world. We always have that once a year
and that's the time when all our buyers are here for us to show what we had that was
exhibited to go around. So, my husband had to [fly] from Cebu to Manila just for this
occasion. So we have an appointment with our people and our buyers with SITEM and
also that evening we will have to treat them [to] dinner.

Q Whereat?

A At our residence, we were supposed to have a dinner at our residence.

Q What happened to this occasion?

A So when they disconnected our electric power we had to get in touch with them
and change the venue.

Q Which venue did you transfer your dinner for your buyers?

A We brought them in a restaurant in Makati at Season's Restaurant. But it was very

embar[r]assing for us because we faxed them ahead of time before they came to Manila.

Q Now as a result of this change of your schedule because of the disconnection of

the electric power on that day, Friday, what damage did you suffer?

A I cancelled the catering service and that is so much of a h[a]ssle it was so

embarras[s]ing for us.

Q Can you tell us how much amount?

A Approximately P50,000.00."30
No other evidence has been proffered to substantiate her bare statements. She has not shown
how she arrived at the amount of P50,000; it is, at best, speculative. Her self-serving testimonial
evidence, if it may be called such, is insufficient to support alleged actual damages.

While respondent does not rebut this testimony on the expenses incurred by the spouses in
moving the dinner out of their residence due to the disconnection, no receipts covering such
expenditures have been adduced in evidence. Neither is the testimony corroborated. To
reiterate, actual or compensatory damages cannot be presumed, but must be duly proved with a
reasonable degree of certainty. It is dependent upon competent proof of damages that
petitioners have suffered and of the actual amount thereof.31 The award must be based on the
evidence presented, not on the personal knowledge of the court; and certainly not on flimsy,
remote, speculative and unsubstantial proof.32 Consequently, we uphold the CA ruling denying
the grant of actual damages.

Having said that, we agree with the trial court, however, that petitioners are entitled to moral
damages, albeit in a reduced amount.

The RTC opined as follows:

"This Court agrees with the defendant regarding [its] right by law and equity to protect
itself from any fraud. However, such right should not be exercised arbitrarily but with
great caution and with due regard to the rights of the consumers. Meralco having a
virtual monopoly of the supply of electric power should refrain from taking drastic actions
against the consumers without observing due process. Even assuming that the subject
meter has had history of meter tampering, defendant cannot simply assume that the
present occupants are the ones responsible for such tampering. Neither does it serve as
a license to deprive the plaintiffs of their right to due process. Defendant should have
given the plaintiffs simple opportunity to dispute the electric charges brought about by
the alleged meter-tampering, which were not included in the bill rendered them.
Procedural due process requires reasonable notice to pay the bill and reasonable notice
to discontinue supply. Absent due process the defendant may be held liable for
damages. While this Court is aware of the practice of unscrupulous individuals of
stealing electric curre[n]t which causes thousands if not millions of pesos in lost revenue
to electric companies, this does not give the defendant the right to trample upon the
rights of the consumers by denying them due process."33

Article 2219 of the Civil Code lists the instances when moral damages may be recovered. One
such case34 is when the rights of individuals, including the right against deprivation of property
without due process of law, are violated.35

Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury.36 Although
incapable of pecuniary computation, such damages may be recovered if they are the proximate
results of the defendant's wrongful act or omission.37

Case law establishes the following requisites for the award of moral damages: (1) there is an
injury -- whether physical, mental or psychological -- clearly sustained by the claimant; (2) there
is a culpable act or omission 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 2219 of the Civil Code.38

To reiterate, respondent had no legal right to immediately disconnect petitioners' electrical

supply without observing the requisites of law which, in turn, are akin to due process. Had
respondent been more circumspect and prudent, petitioners could have been given the
opportunity to controvert the initial finding of alleged meter tampering. Said the RTC:

"More seriously, the action of the defendant in maliciously disconnecting the electric
service constitutes a breach of public policy. For public utilities, broad as their powers
are, have a clear duty to see to it that they do not violate nor transgress the rights of the
consumers. Any act on their part that militates against the ordinary norms of justice and
 fair play is considered an infraction that gives rise to an action for damages. Such is the
case at bar."39

Indeed, the Supreme Court has ruled in Meralco v. CA40 that respondent is required to give
notice of disconnection to an alleged delinquent customer. The Court said:

"x x x One can not deny the vital role which a public utility such as MERALCO, having a
monopoly of the supply of electrical power in Metro Manila and some nearby
municipalities, plays in the life of people living in such areas. Electricity has become a
necessity to most people in these areas, justifying the exercise by the State of its
regulatory power over the business of supplying electrical service to the public, in which
petitioner MERALCO is engaged. Thus, the state may regulate, as it has done through
Section 97 of the Revised Order No. 1 of the Public Service Commission, the conditions
under which and the manner by which a public utility such as MERALCO may effect a
disconnection of service to a delinquent customer. Among others, a prior written notice
to the customer is required before disconnection of the service. Failure to give such prior
notice amounts to a tort."41

Observance of the rights of our people is sacred in our society. We cannot allow such rights to
be trifled with or trivialized. Although the Court sympathizes with respondent's efforts to stamp
out the illegal use of electricity, such action must be done only with strict observance of the
rights of our people. As has been we succinctly said: "there is a right way to do the right thing at
the right time for the right reason."42

However, the amount of moral damages, which is left largely to the sound discretion of the
courts, should be granted in reasonable amounts, considering the attendant facts and
circumstances.43 Moral damages, though incapable of pecuniary estimation, are designed to
compensate the claimant for actual injury suffered and not to impose a penalty.44 Moral
damages are not intended to enrich a plaintiff at the expense of the defendant.45 They are
awarded only to obtain a means, a diversion or an amusement that will serve to alleviate the
moral suffering the injured party has undergone by reason of the defendant's culpable
action.46 They must be proportionate to the suffering inflicted.47

It is clear from the records that respondent was able to restore the electrical supply of
petitioners on the same day. Verily, the inconvenience and anxiety they suffered as a result of
the disconnection was thereafter corrected. Thus, we reduce the RTC's grant of moral damages
to the more equitable amount of P100,000.

Exemplary damages, on the other hand, are imposed by way of example or correction for the
public good in addition to moral, temperate, liquidated or compensatory damages.48 It is not
given to enrich one party and impoverish another, but to serve as a deterrent against or as a
negative incentive to socially deleterious actions.49 In this case, to serve an example -- that
before a disconnection of electrical supply can be effected by a public utility like Meralco, the
requisites of law must be faithfully complied with -- we award the amount of P50,000 to
petitioners.

Finally, with the award of exemplary damages, the award of attorney's fees is likewise
granted.50 It is readily apparent that petitioners needed the services of a lawyer to argue their
cause, even to the extent of elevating the matter to this Court;51 thus, an award of P50,000 is
considered sufficient.

Final Issue:

Billing Differential

Finally, this Court holds that despite the basis for the award of damages -- the lack of due
process in immediately disconnecting petitioners' electrical supply -- respondent's counterclaim
for the billing differential is still proper. We agree with the CA that respondent should be given
what it rightfully deserves. The evidence it presented, both documentary and testimonial,
sufficiently proved the amount of the differential.
Not only did respondent show how the meter examination had been conducted by its experts,
but it also established the amount of P193,332.96 that petitioners owed respondent. The
procedure through which this amount was arrived at was testified to by Meralco's Senior Billing
Computer Enrique Katipunan. His testimony was corroborated by documentary evidence
showing the account's billing history and the corresponding computations. Neither do we doubt
the documents of inspections and examinations presented by respondent to prove that, indeed
there had been meter tampering that resulted in unrecorded and unpaid electrical consumption.

The mere presentation by petitioners of a Contract to Sell with Assumption of Mortgage52 does
not necessarily mean that they are no longer liable for the billing differential. There was no
sufficient evidence to show that they had not been actually residing in the house before the date
of the said document. Lorna Quisumbing herself admitted53 that they did not have any contract
for electrical service in their own name. Hence, petitioners effectively assumed the bills of the
former occupants of the premises.

Finally, the CA was correct in ruling that the convincing documentary and testimonial evidence
presented by respondent, was not controverted by petitioners.1wphi1.nt

WHEREFORE, the Petition is hereby PARTLY GRANTED. The assailed CA Decision

is MODIFIED as follows: petitioners are ORDERED to pay respondent the billing differential
of P193,332.96; while respondent is ordered to pay petitioners P100,000 as moral
damages, P50,000 as exemplary damages, and P50,000 as attorney's fees. No pronouncement
as to costs.

SO ORDERED.

Melo, Sandoval-Gutierrez, and Carpio, JJ., concur.

Vitug, J., abroad on official business.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 81262 August 25, 1989

GLOBE MACKAY CABLE AND RADIO CORP., and HERBERT C. HENDRY, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and RESTITUTO M. TOBIAS, respondents.

Atencia & Arias Law Offices for petitioners.

Romulo C. Felizmena for private respondent.

CORTES, J.:

Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay Cable and
Radio Corporation (GLOBE MACKAY) in a dual capacity as a purchasing agent and
administrative assistant to the engineering operations manager. In 1972, GLOBE MACKAY
discovered fictitious purchases and other fraudulent transactions for which it lost several
thousands of pesos.

According to private respondent it was he who actually discovered the anomalies and reported
them on November 10, 1972 to his immediate superior Eduardo T. Ferraren and to petitioner
Herbert C. Hendry who was then the Executive Vice-President and General Manager of GLOBE
MACKAY.

On November 11, 1972, one day after private respondent Tobias made the report, petitioner
Hendry confronted him by stating that he was the number one suspect, and ordered him to take
a one week forced leave, not to communicate with the office, to leave his table drawers open,
and to leave the office keys.

On November 20, 1972, when private respondent Tobias returned to work after the forced
leave, petitioner Hendry went up to him and called him a "crook" and a "swindler." Tobias was
then ordered to take a lie detector test. He was also instructed to submit specimen of his
handwriting, signature, and initials for examination by the police investigators to determine his
complicity in the anomalies.

On December 6,1972, the Manila police investigators submitted a laboratory crime report (Exh.
"A") clearing private respondent of participation in the anomalies.

Not satisfied with the police report, petitioners hired a private investigator, retired Col. Jose G.
Fernandez, who on December 10, 1972, submitted a report (Exh. "2") finding Tobias guilty. This
report however expressly stated that further investigation was still to be conducted.

Nevertheless, on December 12, 1972, petitioner Hendry issued a memorandum suspending

Tobias from work preparatory to the filing of criminal charges against him.

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

In the meantime, on January 17, 1973, Tobias received a notice (Exh. "F") from petitioners that
his employment has been terminated effective December 13, 1972. Whereupon, Tobias filed a
complaint for illegal dismissal. The labor arbiter dismissed the complaint. On appeal, the
National Labor Relations Commission (NLRC) reversed the labor arbiter's decision. However,
the Secretary of Labor, acting on petitioners' appeal from the NLRC ruling, reinstated the labor
arbiter's decision. Tobias appealed the Secretary of Labor's order with the Office of the
President. During the pendency of the appeal with said office, petitioners and private
respondent Tobias entered into a compromise agreement regarding the latter's complaint for
illegal dismissal.

Unemployed, Tobias sought employment with the Republic Telephone Company (RETELCO).
However, petitioner Hendry, without being asked by RETELCO, wrote a letter to the latter
stating that Tobias was dismissed by GLOBE MACKAY due to dishonesty.

Private respondent Tobias filed a civil case for damages anchored on alleged unlawful,
malicious, oppressive, and abusive acts of petitioners. Petitioner Hendry, claiming illness, did
not testify during the hearings. The Regional Trial Court (RTC) of Manila, Branch IX, through
Judge Manuel T. Reyes rendered judgment in favor of private respondent by ordering
petitioners to pay him eighty thousand pesos (P80,000.00) as actual damages, two hundred
thousand pesos (P200,000.00) as moral damages, twenty thousand pesos (P20,000.00) as
exemplary damages, thirty thousand pesos (P30,000.00) as attorney's fees, and costs.
Petitioners appealed the RTC decision to the Court of Appeals. On the other hand, Tobias
appealed as to the amount of damages. However, the Court of Appeals, an a decision dated
August 31, 1987 affirmed the RTC decision in toto. Petitioners' motion for reconsideration
having been denied, the instant petition for review on certiorari was filed.

The main issue in this case is whether or not petitioners are liable for damages to private
respondent.

Petitioners contend that they could not be made liable for damages in the lawful exercise of their
right to dismiss private respondent.

On the other hand, private respondent contends that because of petitioners' abusive manner in
dismissing him as well as for the inhuman treatment he got from them, the Petitioners must
indemnify him for the damage that he had suffered.

One of the more notable innovations of the New Civil Code is the codification of "some basic
principles that are to be observed for the rightful relationship between human beings and for the
stability of the social order." [REPORT ON THE CODE COMMISSION ON THE PROPOSED
CIVIL CODE OF THE PHILIPPINES, p. 39]. The framers of the Code, seeking to remedy the
defect of the old Code which merely stated the effects of the law, but failed to draw out its spirit,
incorporated certain fundamental precepts which were "designed to indicate certain norms that
spring from the fountain of good conscience" and which were also meant to serve as "guides for
human conduct [that] should run as golden threads through society, to the end that law may
approach its supreme ideal, which is the sway and dominance of justice" (Id.) Foremost among
these principles is that pronounced in Article 19 which provides:
 Art. 19. Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due, and observe honesty and good
faith.

This article, known to contain what is commonly referred to as the principle of abuse of rights,
sets certain standards which must be observed not only in the exercise of one's rights but also
in the performance of one's duties. These standards are the following: to act with justice; to give
everyone his due; and to observe honesty and good faith. The law, therefore, recognizes a
primordial limitation on all rights; that in their exercise, the norms of human conduct set forth in
Article 19 must be observed. A right, though by itself legal because recognized or granted by
law as such, may nevertheless become the source of some illegality. When a right is exercised
in a manner which does not conform with the norms enshrined in Article 19 and results in
damage to another, a legal wrong is thereby committed for which the wrongdoer must be held
responsible. But while Article 19 lays down a rule of conduct for the government of human
relations and for the maintenance of social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article 21 would be proper.

Article 20, which pertains to damage arising from a violation of law, provides that:

Art. 20. Every person who contrary to law, wilfully or negligently causes damage
to another, shall indemnify the latter for the same.

However, in the case at bar, petitioners claim that they did not violate any provision of law since
they were merely exercising their legal right to dismiss private respondent. This does not,
however, leave private respondent with no relief because Article 21 of the Civil Code provides
that:

Art. 21. Any person who wilfully causes loss or injury to another in a manner that
is contrary to morals, good customs or public policy shall compensate the latter
for the damage.

This article, adopted to remedy the "countless gaps in the statutes, which leave so many victims
of moral wrongs helpless, even though they have actually suffered material and moral injury"
[Id.] should "vouchsafe adequate legal remedy for that untold number of moral wrongs which it
is impossible for human foresight to provide for specifically in the statutes" [Id. it p. 40; See
also PNB v. CA, G.R. No. L-27155, May 18,1978, 83 SCRA 237, 247].

In determining whether or not the principle of abuse of rights may be invoked, there is no rigid
test which can be applied. While the Court has not hesitated to apply Article 19 whether the
legal and factual circumstances called for its application [See for e.g., Velayo v. Shell Co. of the
Phil., Ltd., 100 Phil. 186 (1956); PNB v. CA, supra; Grand Union Supermarket, Inc. v. Espino,
Jr., G.R. No. L-48250, December 28, 1979, 94 SCRA 953; PAL v. CA, G.R. No. L-46558, July
31,1981,106 SCRA 391; United General Industries, Inc, v. Paler G.R. No. L-30205, March
15,1982,112 SCRA 404; Rubio v. CA, G.R. No. 50911, August 21, 1987, 153 SCRA 183] the
question of whether or not the principle of abuse of rights has been violated resulting in
damages under Article 20 or Article 21 or other applicable provision of law, depends on the
circumstances of each case. And in the instant case, the Court, after examining the record and
considering certain significant circumstances, finds that all petitioners have indeed abused the
right that they invoke, causing damage to private respondent and for which the latter must now
be indemnified.

The trial court made a finding that notwithstanding the fact that it was private respondent Tobias
who reported the possible existence of anomalous transactions, petitioner Hendry "showed
belligerence and told plaintiff (private respondent herein) that he was the number one suspect
and to take a one week vacation leave, not to communicate with the office, to leave his table
drawers open, and to leave his keys to said defendant (petitioner Hendry)" [RTC Decision, p. 2;
Rollo, p. 232]. This, petitioners do not dispute. But regardless of whether or not it was private
respondent Tobias who reported the anomalies to petitioners, the latter's reaction towards the
former upon uncovering the anomalies was less than civil. An employer who harbors suspicions
that an employee has committed dishonesty might be justified in taking the appropriate action
such as ordering an investigation and directing the employee to go on a leave. Firmness and
the resolve to uncover the truth would also be expected from such employer. But the high-
handed treatment accorded Tobias by petitioners was certainly uncalled for. And this
reprehensible attitude of petitioners was to continue when private respondent returned to work
on November 20, 1972 after his one week forced leave. Upon reporting for work, Tobias was
confronted by Hendry who said. "Tobby, you are the crook and swindler in this company."
Considering that the first report made by the police investigators was submitted only on
December 10, 1972 [See Exh. A] the statement made by petitioner Hendry was baseless. The
imputation of guilt without basis and the pattern of harassment during the investigations of
Tobias transgress the standards of human conduct set forth in Article 19 of the Civil Code. The
Court has already ruled that the right of the employer to dismiss an employee should not be
confused with the manner in which the right is exercised and the effects flowing therefrom. If the
dismissal is done abusively, then the employer is liable for damages to the employee [Quisaba
v. Sta. Ines-Melale Veneer and Plywood Inc., G.R. No. L-38088, August 30, 1974, 58 SCRA
771; See also Philippine Refining Co., Inc. v. Garcia, G.R. No. L-21871, September 27,1966, 18
SCRA 107] Under the circumstances of the instant case, the petitioners clearly failed to exercise
in a legitimate manner their right to dismiss Tobias, giving the latter the right to recover
damages under Article 19 in relation to Article 21 of the Civil Code.

But petitioners were not content with just dismissing Tobias. Several other tortious acts were
committed by petitioners against Tobias after the latter's termination from work. Towards the
latter part of January, 1973, after the filing of the first of six criminal complaints against Tobias,
the latter talked to Hendry to protest the actions taken against him. In response, Hendry cut
short Tobias' protestations by telling him to just confess or else the company would file a
hundred more cases against him until he landed in jail. Hendry added that, "You Filipinos
cannot be trusted." The threat unmasked petitioner's bad faith in the various actions taken
against Tobias. On the other hand, the scornful remark about Filipinos as well as Hendry's
earlier statements about Tobias being a "crook" and "swindler" are clear violations of 'Tobias'
personal dignity [See Article 26, Civil Code].

The next tortious act committed by petitioners was the writing of a letter to RETELCO sometime
in October 1974, stating that Tobias had been dismissed by GLOBE MACKAY due to
dishonesty. Because of the letter, Tobias failed to gain employment with RETELCO and as a
result of which, Tobias remained unemployed for a longer period of time. For this further
damage suffered by Tobias, petitioners must likewise be held liable for damages consistent with
Article 2176 of the Civil Code. Petitioners, however, contend that they have a "moral, if not legal,
duty to forewarn other employers of the kind of employee the plaintiff (private respondent
herein) was." [Petition, p. 14; Rollo, p. 15]. Petitioners further claim that "it is the accepted moral
and societal obligation of every man to advise or warn his fellowmen of any threat or danger to
the latter's life, honor or property. And this includes warning one's brethren of the possible
dangers involved in dealing with, or accepting into confidence, a man whose honesty and
integrity is suspect" [Id.]. These arguments, rather than justify petitioners' act, reveal a seeming
obsession to prevent Tobias from getting a job, even after almost two years from the time
Tobias was dismissed.

Finally, there is the matter of the filing by petitioners of six criminal complaints against Tobias.
Petitioners contend that there is no case against them for malicious prosecution and that they
cannot be "penalized for exercising their right and prerogative of seeking justice by filing criminal
complaints against an employee who was their principal suspect in the commission of forgeries
and in the perpetration of anomalous transactions which defrauded them of substantial sums of
money" [Petition, p. 10, Rollo, p. 11].

While sound principles of justice and public policy dictate that persons shall have free resort to
the courts for redress of wrongs and vindication of their rights [Buenaventura v. Sto. Domingo,
103 Phil. 239 (1958)], the right to institute criminal prosecutions can not be exercised
maliciously and in bad faith [Ventura v. Bernabe, G.R. No. L-26760, April 30, 1971, 38 SCRA
5871.] Hence, in Yutuk V. Manila Electric Co., G.R. No. L-13016, May 31, 1961, 2 SCRA 337,
the Court held that the right to file criminal complaints should not be used as a weapon to force
an alleged debtor to pay an indebtedness. To do so would be a clear perversion of the function
of the criminal processes and of the courts of justice. And in Hawpia CA, G.R. No. L-20047,
June 30, 1967. 20 SCRA 536 the Court upheld the judgment against the petitioner for actual
and moral damages and attorney's fees after making a finding that petitioner, with persistence,
filed at least six criminal complaints against respondent, all of which were dismissed.
To constitute malicious prosecution, there must be proof that the prosecution was prompted by
a design to vex and humiliate a person and that it was initiated deliberately by the defendant
knowing that the charges were false and groundless [Manila Gas Corporation v. CA, G.R. No. L-
44190, October 30,1980, 100 SCRA 602]. Concededly, the filing of a suit by itself, does not
render a person liable for malicious prosecution [Inhelder Corporation v. CA, G.R. No. 52358,
May 301983122 SCRA 576]. The mere dismissal by the fiscal of the criminal complaint is not a
ground for an award of damages for malicious prosecution if there is no competent evidence to
show that the complainant had acted in bad faith [Sison v. David, G.R. No. L-11268, January
28,1961, 1 SCRA 60].

In the instant case, however, the trial court made a finding that petitioners acted in bad faith in
filing the criminal complaints against Tobias, observing that:

xxx

Defendants (petitioners herein) filed with the Fiscal's Office of Manila a total of six
(6) criminal cases, five (5) of which were for estafa thru falsification of
commercial document and one for violation of Art. 290 of the Revised Penal
Code "discovering secrets thru seizure of correspondence," and all were
dismissed for insufficiency or lack of evidence." The dismissal of four (4) of the
cases was appealed to the Ministry of Justice, but said Ministry invariably
sustained the dismissal of the cases. As above adverted to, two of these cases
were refiled with the Judge Advocate General's Office of the Armed Forces of the
Philippines to railroad plaintiffs arrest and detention in the military stockade, but
this was frustrated by a presidential decree transferring criminal cases involving
civilians to the civil courts.

xxx

To be sure, when despite the two (2) police reports embodying the findings of Lt.
Dioscoro Tagle, Chief Document Examiner of the Manila Police Department,
clearing plaintiff of participation or involvement in the fraudulent transactions
complained of, despite the negative results of the lie detector tests which
defendants compelled plaintiff to undergo, and although the police investigation
was "still under follow-up and a supplementary report will be submitted after all
the evidence has been gathered," defendants hastily filed six (6) criminal cases
with the city Fiscal's Office of Manila, five (5) for estafa thru falsification of
commercial document and one (1) for violation of Art. 290 of the Revised Penal
Code, so much so that as was to be expected, all six (6) cases were dismissed,
with one of the investigating fiscals, Asst. Fiscal de Guia, commenting in one
case that, "Indeed, the haphazard way this case was investigated is evident.
Evident likewise is the flurry and haste in the filing of this case against
respondent Tobias," there can be no mistaking that defendants would not but be
motivated by malicious and unlawful intent to harass, oppress, and cause
damage to plaintiff.

xxx

[RTC Decision, pp. 5-6; Rollo, pp. 235-236].

In addition to the observations made by the trial court, the Court finds it significant that the
criminal complaints were filed during the pendency of the illegal dismissal case filed by Tobias
against petitioners. This explains the haste in which the complaints were filed, which the trial
court earlier noted. But petitioners, to prove their good faith, point to the fact that only six
complaints were filed against Tobias when they could have allegedly filed one hundred cases,
considering the number of anomalous transactions committed against GLOBE MACKAY.
However, petitioners' good faith is belied by the threat made by Hendry after the filing of the first
complaint that one hundred more cases would be filed against Tobias. In effect, the possible
filing of one hundred more cases was made to hang like the sword of Damocles over the head
of Tobias. In fine, considering the haste in which the criminal complaints were filed, the fact that
they were filed during the pendency of the illegal dismissal case against petitioners, the threat
made by Hendry, the fact that the cases were filed notwithstanding the two police reports
exculpating Tobias from involvement in the anomalies committed against GLOBE MACKAY,
coupled by the eventual dismissal of all the cases, the Court is led into no other conclusion than
that petitioners were motivated by malicious intent in filing the six criminal complaints against
Tobias.

Petitioners next contend that the award of damages was excessive. In the complaint filed
against petitioners, Tobias prayed for the following: one hundred thousand pesos (P100,000.00)
as actual damages; fifty thousand pesos (P50,000.00) as exemplary damages; eight hundred
thousand pesos (P800,000.00) as moral damages; fifty thousand pesos (P50,000.00) as
attorney's fees; and costs. The trial court, after making a computation of the damages incurred
by Tobias [See RTC Decision, pp. 7-8; Rollo, pp. 154-1551, awarded him the following: eighty
thousand pesos (P80,000.00) as actual damages; two hundred thousand pesos (P200,000.00)
as moral damages; twenty thousand pesos (P20,000.00) as exemplary damages; thirty
thousand pesos (P30,000.00) as attorney's fees; and, costs. It must be underscored that
petitioners have been guilty of committing several actionable tortious acts, i.e., the abusive
manner in which they dismissed Tobias from work including the baseless imputation of guilt and
the harassment during the investigations; the defamatory language heaped on Tobias as well as
the scornful remark on Filipinos; the poison letter sent to RETELCO which resulted in Tobias'
loss of possible employment; and, the malicious filing of the criminal complaints. Considering
the extent of the damage wrought on Tobias, the Court finds that, contrary to petitioners'
contention, the amount of damages awarded to Tobias was reasonable under the
circumstances.

Yet, petitioners still insist that the award of damages was improper, invoking the principle of
damnum absqueinjuria. It is argued that "[t]he only probable actual damage that plaintiff (private
respondent herein) could have suffered was a direct result of his having been dismissed from
his employment, which was a valid and legal act of the defendants-appellants (petitioners
herein).lwph1.t " [Petition, p. 17; Rollo, p. 18].

According to the principle of damnum absque injuria, damage or loss which does not constitute
a violation of a legal right or amount to a legal wrong is not actionable [Escano v. CA, G.R. No.
L-47207, September 25, 1980, 100 SCRA 197; See also Gilchrist v. Cuddy 29 Phil, 542 (1915);
The Board of Liquidators v. Kalaw, G.R. No. L-18805, August 14, 1967, 20 SCRA 987]. This
principle finds no application in this case. It bears repeating that even granting that petitioners
might have had the right to dismiss Tobias from work, the abusive manner in which that right
was exercised amounted to a legal wrong for which petitioners must now be held liable.
Moreover, the damage incurred by Tobias was not only in connection with the abusive manner
in which he was dismissed but was also the result of several other quasi-delictual acts
committed by petitioners.

Petitioners next question the award of moral damages. However, the Court has already ruled
in Wassmer v. Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA 648, 653, that [p]er
express provision of Article 2219 (10) of the New Civil Code, moral damages are recoverable in
the cases mentioned in Article 21 of said Code." Hence, the Court of Appeals committed no
error in awarding moral damages to Tobias.

Lastly, the award of exemplary damages is impugned by petitioners. Although Article 2231 of
the Civil Code provides that "[i]n quasi-delicts, exemplary damages may be granted if the
defendant acted with gross negligence," the Court, in Zulueta v. Pan American World Airways,
Inc., G.R. No. L- 28589, January 8, 1973, 49 SCRA 1, ruled that if gross negligence warrants
the award of exemplary damages, with more reason is its imposition justified when the act
performed is deliberate, malicious and tainted with bad faith. As in the Zuluetacase, the nature
of the wrongful acts shown to have been committed by petitioners against Tobias is sufficient
basis for the award of exemplary damages to the latter.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals in CA-
G.R. CV No. 09055 is AFFIRMED.

SO ORDERED.
Fernan, C.J., Gutierrez, Jr. and Bidin, JJ., concur.

Feliciano, J., took no part.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 132344 February 17, 2000

UNIVERSITY OF THE EAST, petitioner,

vs.
ROMEO A. JADER, respondent.

YNARES-SANTIAGO, J.:

May an educational institution be held liable for damages for misleading a student into believing
that the latter had satisfied all the requirements for graduation when such is not the case? This
is the issue in the instant petition for review premised on the following undisputed facts as
summarized by the trial court and adopted by the Court of Appeals (CA),1 to wit:

Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the first
semester of his last year (School year 1987-1988), he failed to take the regular final
examination in Practice Court I for which he was given an incomplete grade (Exhibits
"2", also Exhibit "H"). He enrolled for the second semester as fourth year law student
(Exhibit "A") and on February 1, 1988 he filed an application for the removal of the
incomplete grade given him by Professor Carlos Ortega (Exhibits "H-2", also Exhibit "2")
which was approved by Dean Celedonio Tiongson after payment of the required fee. He
took the examination on March 28, 1988. On May 30, 1988, Professor Carlos Ortega
submitted his grade. It was a grade of five (5). (Exhibits "H-4", also Exhibits "2-L", "2-
N").1wphi1.nt

In the meantime, the Dean and the Faculty Members of the College of Law met to
deliberate on who among the fourth year students should be allowed to graduate. The
plaintiff's name appeared in the Tentative List of Candidates for graduation for the
Degree of Bachelor of Laws (LL.B) as of Second Semester (1987-1988) with the
following annotation:

JADER ROMEO A.

Def. Conflict of Laws x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to submit transcript
with S.O. (Exhibits "3", "3-C-1", "3-C-2").

The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor of
Laws was scheduled on the 16th of April 1988 at 3:00 o'clock in the afternoon, and in the
invitation for that occasion the name of the plaintiff appeared as one of the candidates.
(Exhibits "B", "B-6", "B-6-A"). At the foot of the list of the names of the candidates there
appeared however the following annotation:

This is a tentative list Degrees will be conferred upon these candidates who
satisfactorily complete requirements as stated in the University Bulletin and as
approved of the Department of Education, Culture and Sports (Exhibit "B-7-A").

The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E.,
Recto Campus, during the program of which he went up the stage when his name was
called, escorted by her (sic) mother and his eldest brother who assisted in placing the
Hood, and his Tassel was turned from left to right, and he was thereafter handed by
Dean Celedonio a rolled white sheet of paper symbolical of the Law Diploma. His
relatives took pictures of the occasion (Exhibits "C" to "C-6", "D-3" to "D-11").

He tendered a blow-out that evening which was attended by neighbors, friends and
relatives who wished him good luck in the forthcoming bar examination. There were
pictures taken too during the blow-out (Exhibits "D" to "D-1").
 He thereafter prepared himself for the bar examination. He took a leave of absence
without pay from his job from April 20, 1988 to September 30, 1988 (Exhibit "G") and
enrolled at the pre-bar review class in Far Eastern University. (Exhibits "F" to "F-2").
Having learned of the deficiency he dropped his review class and was not able to take
the bar examination.2

Consequently, respondent sued petitioner for damages alleging that he suffered moral shock,
mental anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights
when he was not able to take the 1988 bar examinations arising from the latter's negligence. He
prayed for an award of moral and exemplary damages, unrealized income, attorney's fees, and
costs of suit.

In its answer with counterclaim, petitioner denied liability arguing mainly that it never led
respondent to believe that he completed the requirements for a Bachelor of Laws degree when
his name was included in the tentative list of graduating students. After trial, the lower court
rendered judgment as follows:

WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the

plaintiff and against the defendant ordering the latter to pay plaintiff the sum of THIRTY
FIVE THOUSAND FOUR HUNDRED SEVENTY PESOS (P35,470.00) with legal rate of
interest from the filing of the complaint until fully paid, the amount of FIVE THOUSAND
PESOS (P5,000.00) as attorney's fees and the cost of suit.

Defendant's counterclaim is, for lack of merit, hereby dismissed.

SO ORDERED.3

which on appeal by both parties was affirmed by the Court of Appeals (CA) with modification.
The dispositive portion of the CA decision reads:

WHEREFORE, in the light of the foregoing, the lower Court's Decision is hereby
AFFIRMED with the MODIFICATION that defendant-appellee, in addition to the sum
adjudged by the lower court in favor of plaintiff-appellant, is also ORDERED to pay
plaintiff-appellant the amount of FIFTY THOUSAND (P50,000.00) PESOS for moral
damages. Costs against defendant-appellee.

SO ORDERED.4

Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this Court
on a petition for review under Rule 45 of the Rules of Court, arguing that it has no liability to
respondent Romeo A. Jader, considering that the proximate and immediate cause of the alleged
damages incurred by the latter arose out of his own negligence in not verifying from the
professor concerned the result of his removal exam.

The petition lacks merit.

When a student is enrolled in any educational or learning institution, a contract of education is

entered into between said institution and the student. The professors, teachers or instructors
hired by the school are considered merely as agents and administrators tasked to perform the
school's commitment under the contract. Since the contracting parties are the school and the
student, the latter is not duty-bound to deal with the former's agents, such as the professors with
respect to the status or result of his grades, although nothing prevents either professors or
students from sharing with each other such information. The Court takes judicial notice of the
traditional practice in educational institutions wherein the professor directly furnishes his/her
students their grades. It is the contractual obligation of the school to timely inform and furnish
sufficient notice and information to each and every student as to whether he or she had already
complied with all the requirements for the conferment of a degree or whether they would be
included among those who will graduate. Although commencement exercises are but a formal
ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational
institution's way of announcing to the whole world that the students included in the list of those
who will be conferred a degree during the baccalaureate ceremony have satisfied all the
requirements for such degree. Prior or subsequent to the ceremony, the school has the
obligation to promptly inform the student of any problem involving the latter's grades and
performance and also most importantly, of the procedures for remedying the same.

Petitioner, in belatedly informing respondent of the result of the removal examination,

particularly at a time when he had already commenced preparing for the bar exams, cannot be
said to have acted in good faith. Absence of good faith must be sufficiently established for a
successful prosecution by the aggrieved party in a suit for abuse of right under Article 19 of the
Civil Code. Good faith connotes an honest intention to abstain from taking undue advantage of
another, even though the forms and technicalities of the law, together with the absence of all
information or belief of facts, would render the transaction unconscientious.5 It is the school that
has access to those information and it is only the school that can compel its professors to act
and comply with its rules, regulations and policies with respect to the computation and the
prompt submission of grades. Students do not exercise control, much less influence, over the
way an educational institution should run its affairs, particularly in disciplining its professors and
teachers and ensuring their compliance with the school's rules and orders. Being the party that
hired them, it is the school that exercises general supervision and exclusive control over the
professors with respect to the submission of reports involving the students' standing. Exclusive
control means that no other person or entity had any control over the instrumentality which
caused the damage or injury.6

The college dean is the senior officer responsible for the operation of an academic program,
enforcement of rules and regulations, and the supervision of faculty and student services.7 He
must see to it that his own professors and teachers, regardless of their status or position outside
of the university, must comply with the rules set by the latter. The negligent act of a professor
who fails to observe the rules of the school, for instance by not promptly submitting a student's
grade, is not only imputable to the professor but is an act of the school, being his employer.

Considering further, that the institution of learning involved herein is a university which is
engaged in legal education, it should have practiced what it inculcates in its students, more
specifically the principle of good dealings enshrined in Articles 19 and 20 of the Civil Code
which states:

Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.

Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.

Art. 19 was intended to expand the concept of torts by granting adequate legal remedy for the
untold number of moral wrongs which is impossible for human foresight to provide specifically in
statutory law.8 In civilized society, men must be able to assume that others will do them no
intended injury that others will commit no internal aggressions upon them; that their
fellowmen, when they act affirmatively will do so with due care which the ordinary understanding
and moral sense of the community exacts and that those with whom they deal in the general
course of society will act in good faith. The ultimate thing in the theory of liability is justifiable
reliance under conditions of civilized society.9 Schools and professors cannot just take students
for granted and be indifferent to them, for without the latter, the former are useless.

Educational institutions are duty-bound to inform the students of their academic status and not
wait for the latter to inquire from the former. The conscious indifference of a person to the rights
or welfare of the person/persons who may be affected by his act or omission can support a
claim for damages.10 Want of care to the conscious disregard of civil obligations coupled with a
conscious knowledge of the cause naturally calculated to produce them would make the erring
party liable.11 Petitioner ought to have known that time was of the essence in the performance of
its obligation to inform respondent of his grade. It cannot feign ignorance that respondent will
not prepare himself for the bar exams since that is precisely the immediate concern after
graduation of an LL.B. graduate. It failed to act seasonably. Petitioner cannot just give out its
student's grades at any time because a student has to comply with certain deadlines set by the
Supreme Court on the submission of requirements for taking the bar. Petitioner's liability arose
from its failure to promptly inform respondent of the result of an examination and in misleading
the latter into believing that he had satisfied all requirements for the course. Worth quoting is the
following disquisition of the respondent court:

It is apparent from the testimony of Dean Tiongson that defendant-appellee University

had been informed during the deliberation that the professor in Practice Court I gave
plaintiff-appellant a failing grade. Yet, defendant-appellee still did not inform plaintiff-
appellant of his failure to complete the requirements for the degree nor did they remove
his name from the tentative list of candidates for graduation. Worse, defendant-appellee
university, despite the knowledge that plaintiff-appellant failed in Practice Court
I, againincluded plaintiff-appellant's name in the "tentative list of candidates for
graduation which was prepared after the deliberation and which became the basis for
the commencement rites program. Dean Tiongson reasons out that plaintiff-appellant's
name was allowed to remain in the tentative list of candidates for graduation in the hope
that the latter would still be able to remedy the situation in the remaining few days before
graduation day. Dean Tiongson, however, did not explain how plaintiff appellant Jader
could have done something to complete his deficiency if defendant-appellee university
did not exert any effort to inform plaintiff-appellant of his failing grade in Practice Court
I.12

Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the
delayed relay of information to respondent. When one of two innocent parties must suffer, he
through whose agency the loss occurred must bear it.13 The modern tendency is to grant
indemnity for damages in cases where there is abuse of right, even when the act is not illicit. 14 If
mere fault or negligence in one's acts can make him liable for damages for injury caused
thereby, with more reason should abuse or bad faith make him liable. A person should be
protected only when he acts in the legitimate exercise of his right, that is, when he acts with
prudence and in good faith, but not when he acts with negligence or abuse.15

However, while petitioner was guilty of negligence and thus liable to respondent for the latter's
actual damages, we hold that respondent should not have been awarded moral damages. We
do not agree with the Court of Appeals' findings that respondent suffered shock, trauma and
pain when he was informed that he could not graduate and will not be allowed to take the bar
examinations. At the very least, it behooved on respondent to verify for himself whether he has
completed all necessary requirements to be eligible for the bar examinations. As a senior law
student, respondent should have been responsible enough to ensure that all his affairs,
specifically those pertaining to his academic achievement, are in order. Given these
considerations, we fail to see how respondent could have suffered untold embarrassment in
attending the graduation rites, enrolling in the bar review classes and not being able to take the
bar exams. If respondent was indeed humiliated by his failure to take the bar, he brought this
upon himself by not verifying if he has satisfied all the requirements including his school
records, before preparing himself for the bar examination. Certainly, taking the bar examinations
does not only entail a mental preparation on the subjects thereof; there are also prerequisites of
documentation and submission of requirements which the prospective examinee must meet.

WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with

MODIFICATION. Petitioner is ORDERED to PAY respondent the sum of Thirty-five Thousand
Four Hundred Seventy Pesos (P35,470.00), with legal interest of 6% per annum computed from
the date of filing of the complaint until fully paid; the amount of Five Thousand Pesos
(P5,000.00) as attorney's fees; and the costs of the suit. The award of moral damages is
DELEIED.1wphi1.nt

SO ORDERED.

Davide, Jr., C.J., Kapunan and Pardo, JJ., concur.

Puno, J., took no part.
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 164273 March 28, 2007

EMMANUEL B. AZNAR, Petitioner,

vs.
CITIBANK, N.A., (Philippines), Respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before this Court is a Petition for Review assailing the Decision1 of the Court of Appeals (CA) in
CA-G.R. CV No. 62554 dated January 30, 2004 which set aside the November 25, 1998 Order
of the Regional Trial Court (RTC) Branch 10, Cebu City and reinstated the Decision of RTC
Branch 20 of Cebu City dated May 29, 1998 in Civil Case No. CEB-16474; and the CA
Resolution dated May 26, 2004 denying petitioners motion for reconsideration.

The facts are as follows:

Emmanuel B. Aznar (Aznar), a known businessman2 in Cebu, is a holder of a Preferred Master

Credit Card (Mastercard) bearing number 5423-3920-0786-7012 issued by Citibank with a credit
limit of P150,000.00. As he and his wife, Zoraida, planned to take their two grandchildren,
Melissa and Richard Beane, on an Asian tour, Aznar made a total advance deposit
of P485,000.00 with Citibank with the intention of increasing his credit limit toP635,000.00.3

With the use of his Mastercard, Aznar purchased plane tickets to Kuala Lumpur for his group
worth P237,000.00. On July 17, 1994, Aznar, his wife and grandchildren left Cebu for the said
destination.4

Aznar claims that when he presented his Mastercard in some establishments in Malaysia,
Singapore and Indonesia, the same was not honored.5 And when he tried to use the same in
Ingtan Tour and Travel Agency (Ingtan Agency) in Indonesia to purchase plane tickets to Bali, it
was again dishonored for the reason that his card was blacklisted by Citibank. Such dishonor
forced him to buy the tickets in cash.6 He further claims that his humiliation caused by the denial
of his card was aggravated when Ingtan Agency spoke of swindlers trying to use blacklisted
cards.7 Aznar and his group returned to the Philippines on August 10, 1994.8

On August 26, 1994, Aznar filed a complaint for damages against Citibank, docketed as Civil
Case No. CEB-16474 and raffled to RTC Branch 20, Cebu City, claiming that Citibank
fraudulently or with gross negligence blacklisted his Mastercard which forced him, his wife and
grandchildren to abort important tour destinations and prevented them from buying certain items
in their tour.9 He further claimed that he suffered mental anguish, serious anxiety, wounded
feelings, besmirched reputation and social humiliation due to the wrongful blacklisting of his
card.10 To prove that Citibank blacklisted his Mastercard, Aznar presented a computer print-out,
denominated as ON-LINE AUTHORIZATIONS FOREIGN ACCOUNT ACTIVITY REPORT,
issued to him by Ingtan Agency (Exh. "G") with the signature of one Victrina Elnado Nubi
(Nubi)11 which shows that his card in question was "DECL OVERLIMIT" or declared over the
limit.12

Citibank denied the allegation that it blacklisted Aznars card. It also contended that under the
terms and conditions governing the issuance and use of its credit cards, Citibank is exempt from
any liability for the dishonor of its cards by any merchant affiliate, and that its liability for any
action or incident which may be brought against it in relation to the issuance and use of its credit
cards is limited to P1,000.00 or the actual damage proven whichever is lesser.13
To prove that they did not blacklist Aznars card, Citibanks Credit Card Department Head,
Dennis Flores, presented Warning Cancellation Bulletins which contained the list of its canceled
cards covering the period of Aznars trip.14

On May 29, 1998, RTC Branch 20, Cebu City, through Judge Ferdinand J. Marcos, rendered its
decision dismissing Aznars complaint for lack of merit.15 The trial court held that as between the
computer print-out16presented by Aznar and the Warning Cancellation Bulletins17 presented by
Citibank, the latter had more weight as their due execution and authenticity were duly
established by Citibank.18 The trial court also held that even if it was shown that Aznars credit
card was dishonored by a merchant establishment, Citibank was not shown to have acted with
malice or bad faith when the same was dishonored.19

Aznar filed a motion for reconsideration with motion to re-raffle the case saying that Judge
Marcos could not be impartial as he himself is a holder of a Citibank credit card.20 The case was
re-raffled21 and on November 25, 1998, the RTC, this time through Judge Jesus S. De la Pea
of Branch 10 of Cebu City, issued an Order granting Aznars motion for reconsideration, as
follows:

WHEREFORE, the Motion for Reconsideration is hereby GRANTED. The DECISION dated May
29, 1998 is hereby reconsidered, and consequently, the defendant is hereby condemned liable
to pay the following sums of money:

a) P10,000,000.00 as moral damages;

b) P5,000,000.00 as exemplary damages;

c) P1,000,000.00 as attorneys fees; and

d) P200,000.00 as litigation expenses.22

Judge De la Pea ruled that: it is improbable that a man of Aznars stature would fabricate Exh.
"G" or the computer print-out which shows that Aznars Mastercard was dishonored for the
reason that it was declared over the limit; Exh. "G" was printed out by Nubi in the ordinary or
regular course of business in the modern credit card industry and Nubi was not able to testify as
she was in a foreign country and cannot be reached by subpoena; taking judicial notice of the
practice of automated teller machines (ATMs) and credit card facilities which readily print out
bank account status, Exh. "G" can be received as prima facie evidence of the dishonor of
Aznars Mastercard; no rebutting evidence was presented by Citibank to prove that Aznars
Mastercard was not dishonored, as all it proved was that said credit card was not included in the
blacklisted cards; when Citibank accepted the additional deposit of P485,000.00 from Aznar,
there was an implied novation and Citibank was obligated to increase Aznars credit limit and
ensure that Aznar will not encounter any embarrassing situation with the use of his Mastercard;
Citibanks failure to comply with its obligation constitutes gross negligence as it caused Aznar
inconvenience, mental anguish and social humiliation; the fine prints in the flyer of the credit
card limiting the liability of the bank to P1,000.00 or the actual damage proven, whichever is
lower, is a contract of adhesion which must be interpreted against Citibank.23

Citibank filed an appeal with the CA and its counsel filed an administrative case against Judge
De la Pea for grave misconduct, gross ignorance of the law and incompetence, claiming
among others that said judge rendered his decision without having read the transcripts. The
administrative case was held in abeyance pending the outcome of the appeal filed by Citibank
with the CA.24lawphi1.net

On January 30, 2004, the CA rendered its Decision granting Citibanks appeal thus:

WHEREFORE, the instant appeal is GRANTED. The assailed order of the Regional Trial Court,
7th Judicial Region, Branch 10, Cebu City, in Civil Case No. CEB-16474, is hereby SET ASIDE
and the decision, dated 29 May 1998 of the Regional Trial Court, 7th Judicial Region, Branch
20, Cebu City in this case is REINSTATED.

SO ORDERED.25
The CA ruled that: Aznar had no personal knowledge of the blacklisting of his card and only
presumed the same when it was dishonored in certain establishments; such dishonor is not
sufficient to prove that his card was blacklisted by Citibank; Exh. "G" is an electronic document
which must be authenticated pursuant to Section 2, Rule 5 of the Rules on Electronic
Evidence26 or under Section 20 of Rule 132 of the Rules of Court27 by anyone who saw the
document executed or written; Aznar, however, failed to prove the authenticity of Exh. "G", thus
it must be excluded; the unrefuted testimony of Aznar that his credit card was dishonored by
Ingtan Agency and certain establishments abroad is not sufficient to justify the award of
damages in his favor, absent any showing that Citibank had anything to do with the said
dishonor; Citibank had no absolute control over the actions of its merchant affiliates, thus it
should not be held liable for the dishonor of Aznars credit card by said establishments.28

Aznar filed a motion for reconsideration which the CA dismissed in its Resolution dated May 26,
2004.29

Parenthetically, the administrative case against Judge De la Pea was activated and on April
29, 2005, the Courts Third Division30 found respondent judge guilty of knowingly rendering an
unjust judgment and ordered his suspension for six months. The Court held that Judge De la
Pea erred in basing his Order on a manifestation submitted by Aznar to support his Motion for
Reconsideration, when no copy of such manifestation was served on the adverse party and it
was filed beyond office hours. The Court also noted that Judge De la Pea made an egregiously
large award of damages in favor of Aznar which opened himself to suspicion.31

Aznar now comes before this Court on a petition for review alleging that: the CA erroneously
made its own factual finding that his Mastercard was not blacklisted when the matter of
blacklisting was already a non-issue in the November 25, 1998 Order of the RTC; the RTC
found that Aznars Mastercard was dishonored for the reason that it was declared over the
credit limit; this factual finding is supported by Exh. "G" and by his (Aznars) testimony; the issue
of dishonor on the ground of DECL OVERLIMIT, although not alleged in the complaint, was
tried with the implied consent of the parties and should be treated as if raised in the pleadings
pursuant to Section 5, Rule 10 of the Rules of Civil Procedure;32 Exh. "G" cannot be excluded
as it qualifies as an electronic evidence following the Rules on Electronic Evidence which
provides that print-outs are also originals for purposes of the Best Evidence Rule; Exh. "G" has
remained complete and unaltered, apart from the signature of Nubi, thus the same is reliable for
the purpose for which it was generated; the RTC judge correctly credited the testimony of Aznar
on the issuance of the computer print-out as Aznar saw that it was signed by Nubi; said
testimony constitutes the "other evidence showing the integrity and reliability of the print-out to
the satisfaction of the judge" which is required under the Rules on Electronic Evidence; the trial
court was also correct in finding that Citibank was grossly negligent in failing to credit the
additional deposit and make the necessary entries in its systems to prevent Aznar from
encountering any embarrassing situation with the use of his Mastercard.33

Citibank, in its Comment, contends that: Aznar never had personal knowledge that his credit
card was blacklisted as he only presumed such fact; the issue of dishonor on the ground that
the card was declared over the limit was also never tried with the implied consent of both
parties; Aznars self-serving testimony is not sufficient to prove the integrity and reliability of
Exh. "G"; Aznar did not declare that it was Nubi who printed the document and that said
document was printed in his presence as he merely said that the print-out was provided him;
there is also no annotation on Exh. "G" to establish that it was Nubi who printed the same;
assuming further that Exh. "G" is admissible and Aznars credit card was dishonored, Citibank
still cannot be held liable for damages as it only shows that Aznars credit card was dishonored
for having been declared over the limit; Aznars cause of action against Citibank hinged on the
alleged blacklisting of his card which purportedly caused its dishonor; dishonor alone, however,
is not sufficient to award Aznar damages as he must prove that the dishonor was caused by a
grossly negligent act of Citibank; the award of damages in favor of Aznar was based on Article
117034 of the Civil Code, i.e., there was fraud, negligence or delay in the performance of its
obligation; there was no proof, however that Citibank committed fraud or delay or that it
contravened its obligations towards Aznar; the terms and conditions of the credit card cannot be
considered as a contract of adhesion since Aznar was entirely free to reject the card if he did
not want the conditions stipulated therein; a person whose stature is such that he is expected to
be more prudent with respect to his transactions cannot later on be heard to complain for being
ignorant or having been forced into merely consenting to the contract.35
In his Reply, Aznar contended that to a layman, the term "blacklisting" is synonymous with the
words "hot list" or "declared overlimit"; and whether his card was blacklisted or declared over
the limit, the same was dishonored due to the fault or gross negligence of Citibank.36

Aznar also filed a Memorandum raising as issues the following:

I. Whether or not the augmentation deposit in the amount of P485,000.00 of the

Petitioner constitutes relative extinctive novation;

II. Whether or not the purchases made by Petitioner were beyond his credit limit;

III. Whether or not the issues of dishonor by reason of overlimit was tried with the
consent of the parties;

IV. Whether or not the "On Line Authorization Report" is an electronic document."

V. Whether or not the "On Line Authorization Report" constitutes electronic evidence;

VI. Whether or not the agreement between the parties is a contract of adhesion;

VII. Whether or not the Respondent is negligent in not crediting the deposits of the
Respondent.37

Aznar further averred in his Memorandum that Citibank assured him that with the use of his
Mastercard, he would never be turned down by any merchant store, and that under Section 43,
Rule 130 of the Rules of Court, Exh. "G" is admissible in evidence.38

Citibank also filed a Memorandum reiterating its earlier arguments.39

Stripped to its essentials, the only question that needs to be answered is: whether Aznar has
established his claim against Citibank.

The answer is no.

It is basic that in civil cases, the burden of proof rests on the plaintiff to establish his case based
on a preponderance of evidence. The party that alleges a fact also has the burden of proving
it.40

In the complaint Aznar filed before the RTC, he claimed that Citibank blacklisted his Mastercard
which caused its dishonor in several establishments in Malaysia, Singapore, and Indonesia,
particularly in Ingtan Agency in Indonesia where he was humiliated when its staff insinuated that
he could be a swindler trying to use a blacklisted card.

As correctly found by the RTC in its May 29, 1998 Decision, Aznar failed to prove with a
preponderance of evidence that Citibank blacklisted his Mastercard or placed the same on the
"hot list."41

Aznar in his testimony admitted that he had no personal knowledge that his Mastercard was
blacklisted by Citibank and only presumed such fact from the dishonor of his card.

Q Now, paragraph 12 also states and I quote: "its entry in the "hot" list was confirmed to be
authentic".

Now, who confirmed that the blacklisting of your Preferred Citibank Mastercard was authentic?

A. Okey. When I presented this Mastercard, my card rather, at the Merchants store, I do not
know, they called up somebody for verification then later they told me that "your card is being
denied". So, I am not in a position to answer that. I do not know whom they called up; where
they verified. So, when it is denied thats presumed to be blacklisted.
Q. So the word that was used was denied?

A. Denied.

Q. And after you were told that your card was denied you presumed that it was
blacklisted?

A. Definitely.

Q. So your statement that your card was allegedly blacklisted is only your presumption
drawn from the fact, from your allegations, that it was denied at the merchandise store?

A. Yes, sir.42 (Emphasis supplied)

The dishonor of Aznars Mastercard is not sufficient to support a conclusion that said credit card
was blacklisted by Citibank, especially in view of Aznars own admission that in other merchant
establishments in Kuala Lumpur and Singapore, his Mastercard was accepted and honored.43

Aznar puts much weight on the ON-LINE AUTHORIZATION FOREIGN ACCOUNT ACTIVITY
REPORT, a computer print-out handed to Aznar by Ingtan Agency, marked as Exh. "G", to
prove that his Mastercard was dishonored for being blacklisted. On said print-out appears the
words "DECL OVERLIMIT" opposite Account No. 5423-3920-0786-7012.

As correctly pointed out by the RTC and the CA, however, such exhibit cannot be considered
admissible as its authenticity and due execution were not sufficiently established by petitioner.

The prevailing rule at the time of the promulgation of the RTC Decision is Section 20 of Rule
132 of the Rules of Court. It provides that whenever any private document offered as authentic
is received in evidence, its due execution and authenticity must be proved either by (a) anyone
who saw the document executed or written; or (b) by evidence of the genuineness of the
signature or handwriting of the maker.

Aznar, who testified on the authenticity of Exh. "G," did not actually see the document executed
or written, neither was he able to provide evidence on the genuineness of the signature or
handwriting of Nubi, who handed to him said computer print-out. Indeed, all he was able to
allege in his testimony are the following:

Q I show to you a Computer Print Out captioned as On Line Authorization Activity Report where
it is shown that the Preferred Master Card Number 5423392007867012 was denied as per
notation on the margin of this Computer Print Out, is this the document evidencing the dishonor
of your Preferred Master Card?

xxxx

A Yes sir, after that Ingtan incident, I went straight to the Service Agency there and on the left
hand side you will be able to see the name of the person in-charged [sic] there certifying that
really my card is being blacklisted and there is the signature there of the agency.

ATTY. NAVARRO:

The witness, your honor, is pointing to the signature over the handwritten name of Victrina
Elnado Nubi which I pray, your honor, that the Computer Print Out be marked as our Exhibit "G"
and the remarks at the left hand bottom portion of Victorina Elnado Nubi with her signature
thereon be encircled and be marked as our Exhibit "G-1".

xxxx

Q Mr. Aznar, where did you secure this Computer Print Out marked as Exhibit "G"?
A This is provided by that Agency, your honor. They were the ones who provided me
with this. So what the lady did, she gave me the Statement and I requested her to sign to
show proof that my Preferred Master Card has been rejected.44 (Emphasis supplied).

Even if examined under the Rules on Electronic Evidence, which took effect on August 1, 2001,
and which is being invoked by Aznar in this case, the authentication of Exh. "G" would still be
found wanting.

Pertinent sections of Rule 5 read:

Section 1. Burden of proving authenticity. The person seeking to introduce an electronic

document in any legal proceeding has the burden of proving its authenticity in the manner
provided in this Rule.

Section 2. Manner of authentication. Before any private electronic document offered as

authentic is received in evidence, its authenticity must be proved by any of the following means:

(a) by evidence that it had been digitally signed by the person purported to have signed
the same;

(b) by evidence that other appropriate security procedures or devices as may be

authorized by the Supreme Court or by law for authentication of electronic documents
were applied to the document; or

(c) by other evidence showing its integrity and reliability to the satisfaction of the judge.

Aznar claims that his testimony complies with par. (c), i.e., it constitutes the "other evidence
showing integrity and reliability of Exh. "G" to the satisfaction of the judge." The Court is not
convinced. Aznars testimony that the person from Ingtan Agency merely handed him the
computer print-out and that he thereafter asked said person to sign the same cannot be
considered as sufficient to show said print-outs integrity and reliability. As correctly pointed out
by Judge Marcos in his May 29, 1998 Decision, Exh. "G" does not show on its face that it was
issued by Ingtan Agency as Aznar merely mentioned in passing how he was able to secure the
print-out from the agency; Aznar also failed to show the specific business address of the source
of the computer print-out because while the name of Ingtan Agency was mentioned by Aznar, its
business address was not reflected in the print-out.45

Indeed, Aznar failed to demonstrate how the information reflected on the print-out was
generated and how the said information could be relied upon as true. In fact, Aznar to repeat,
testified as follows:

ATTY. NERI

Q Now, paragraph 12 also states and I quote: "its entry in the "hot" list was confirmed to be
authentic"

Now, who confirmed that the blacklisting of your Preferred Citibank Mastercard was authentic?

A Okey. When I presented this Mastercard, my card rather, at the Merchants store, I do not
know, they called up somebody for verification then later they told me that "your card is being
denied". So, I am not in a position to answer that. I do not know whom they called up; where
they verified. So, when it is denied thats presumed to be blacklisted.46 (Emphasis
supplied)

Aznar next invokes Section 43 of Rule 130 of the Rules of Court, which pertains to entries in the
course of business, to support Exh. "G". Said provision reads:

Sec. 43. Entries in the course of business. Entries made at, or near the time of the
transactions to which they refer, by a person deceased or unable to testify, who was in a
position to know the facts therein stated, may be received as prima facie evidence, if such
person made the entries in his professional capacity or in the performance of duty and in the
ordinary or regular course of business or duty.

Under this rule, however, the following conditions are required:

1. the person who made the entry must be dead, or unable to testify;

2. the entries were made at or near the time of the transactions to which they refer;

3. the entrant was in a position to know the facts stated in the entries;

4. the entries were made in his professional capacity or in the performance of a duty,
whether legal, contractual, moral or religious; and

5. the entries were made in the ordinary or regular course of business or duty.47

As correctly pointed out by the RTC in its May 29, 1998 Decision, there appears on the
computer print-out the name of a certain "Victrina Elnado Nubi" and a signature purportedly
belonging to her, and at the left dorsal side were handwritten the words "Sorry for the delay
since the records had to be retrieved. Regards. Darryl Mario." It is not clear therefore if it was
Nubi who encoded the information stated in the print-out and was the one who printed the
same. The handwritten annotation signed by a certain Darryl Mario even suggests that it was
Mario who printed the same and only handed the print-out to Nubi. The identity of the entrant,
required by the provision above mentioned, was therefore not established. Neither did petitioner
establish in what professional capacity did Mario or Nubi make the entries, or whether the
entries were made in the performance of their duty in the ordinary or regular course of business
or duty.

And even if Exh. "G" is admitted as evidence, it only shows that the use of the credit card of
petitioner was denied because it was already over the limit. There is no allegation in the
Complaint or evidence to show that there was gross negligence on the part of Citibank in
declaring that the credit card has been used over the limit.

The Court is also perplexed that stated on Exh. "G" is the amount of "6,289,195.10" opposite
petitioner's account number, which data, petitioner did not clarify.48 As plaintiff in this case, it
was incumbent on him to prove that he did not actually incur the said amount which is above his
credit limit. As it is, the Court cannot see how Exh. "G" could help petitioner's claim for
damages.

The claim of petitioner that Citibank blacklisted his card through fraud or gross negligence is
likewise effectively negated by the evidence of Citibank which was correctly upheld by the RTC
and the CA, to wit:

xxx Mr. Dennis Flores, the Head of the Credit Card Department of defendant Bank, presented
documents known as Warning Cancellation Bulletin for July 10, 17, 24, and 31, 1994 (Exhibits
3, 3-1 to 3-38, 4, 4-1 to 4-38 5, 5-1 to 5-39 and 6, 6-1 to 6-39), for August 7, 1994
(Exhibit[s] 7, 7-1 to 7-37), for August 8, 1994 (Exhibit[s] 8, 8-1 to 8-20) which show that
plaintiffs Citibank preferred mastercard was not placed in a hot list or was not blacklisted.

The Warning Cancellation Bulletins (WCB) (Exhibits 3, 4, 5, 6, 7, 8 and their submarkings)

which covered the period of four (4) days in July 1994 (from July 10, 17, 24 and 31, 1994), and
two (2) days in August 1994, (August 7 and 8, 1994), when plaintiff traveled in the
aforementioned Asian countries showed that said Citibank preferred mastercard had never
been placed in a hot list or the same was blacklisted, let alone the fact that all the credit cards
which had been cancelled by the defendant bank were all contained, reported and listed in said
Warning Cancellation Bulletin which were issued and released on a regular basis.

These three hundred (300) Warning Cancellation Bulletins pieces of documentary proofs, all in
all, adduced by defendant pointed to the fact that said plaintiffs credit car (sic) was not among
those found in said bulletins as having been cancelled for the period for which the said bulletins
had been issued.
Between said computer print out (Exhibit G) and the Warning Cancellation Bulletins (Exhibits
3 to 8 and their submarkings) the latter documents adduced by defendant are entitled to
greater weight than that said computer print out presented by plaintiff that bears on the issue of
whether the plaintiffs preferred master card was actually placed in the hot list or blacklisted for
the following reasons:

The first reason is that the due execution and authentication of these Warning Cancellation
Bulletins (or WCB) have been duly established and identified by defendants own witness,
Dennis Flores, one of the banks officers, who is the head of its credit card department, and,
therefore, competent to testify on the said bulletins as having been issued by the defendant
bank showing that plaintiffs preferred master credit card was never blacklisted or placed in the
Banks hot list. But on the other hand, plaintiffs computer print out (Exhibit G) was never
authenticated or its due execution had never been duly established. Thus, between a set of duly
authenticated commercial documents, the Warning Cancellation Bulletins (Exhibits 3 to 8 and
their submarkings), presented by defendants (sic) and an unauthenticated private document,
plaintiffs computer print out (Exhibit G), the former deserves greater evidentiary weight
supporting the findings of this Court that plaintiffs preferred master card (Exhibit 1) had never
been blacklisted at all or placed in a so-called hot list by defendant.49

Petitioner next argues that with the additional deposit he made in his account which was
accepted by Citibank, there was an implied novation and Citibank was under the obligation to
increase his credit limit and make the necessary entries in its computerized systems in order
that petitioner may not encounter any embarrassing situation with the use of his credit card.
Again, the Court finds that petitioner's argument on this point has no leg to stand on.

Citibank never denied that it received petitioners additional deposit.50 It even claimed that
petitioner was able to purchase plane tickets from Cebu to Kuala Lumpur in the amount
of P237,170.00, which amount was beyond hisP150,000.00 limit, because it was able to credit
petitioners additional deposit to his account. Flores of Citibank testified:

COURT:

Q When was this ticket purchased, after the account was augmented

or before?

A After the account was augmented, Your Honor, because there is no way we can approve a
P250,000.00 purchase with a P150,000.00 credit limit.51

xxx

ATTY. NERI:

For the record, your honor, the deposit of P450,000.00 was made as per exhibit of the
plaintiff on June 28. The purchase of the tickets amount to P237,000.00 was approved
and debited on the account of Mr. Aznar on July 20, your honor. The deposit was made
about a month before the purchase of the tickets as per documentary exhibits, your
honor.

COURT:

So, Atty. Navarro, what do you say to that explanation?

ATTY. NAVARRO [counsel of petitioner]:

That is correct, your honor, that is borne out by the records, your honor. (Emphasis
supplied)

COURT: (to witness)

Q So, I think Atty. Navarro is only after whether a credit line could be extended?

A Yes, your honor.

Q Even if there is no augmenting?

A No, sir, it is not possible. So, the only way the P237,000.00 transaction could be approved
was by way of advance payment which actually happened in this case because there is
no way that the P237,000.00 can be approved with the P150,000.00 credit
limit.52 (Emphasis supplied)

The allegations of blacklisting not having been proved, is Citibank liable for damages for the
dishonor of Aznars Mastercard?

Again, the answer is no.

Citibank, in its attempt to evade liability, invokes paragraphs 7 and 15 of the terms and
conditions governing the issuance of its Mastercard which read:

7. MERCHANT AFFILIATES. [Citibank is] not responsible if the Card is not honored by any
merchant affiliate for any reason. Furthermore, [the cardholder] will not hold [Citibank]
responsible for any defective product or service purchased through the Card.

xxxx

15. LIMITATION OF LIABILITY. In any action arising from this agreement or any incident
thereto which [the cardholder] or any other party may file against [Citibank], [Citibanks] liability
shall not exceed One Thousand Pesos [P1,000.00] or the actual damages proven, whichever is
lesser.53

On this point, the Court agrees with Aznar that the terms and conditions of Citibanks
Mastercard constitute a contract of adhesion. It is settled that contracts between cardholders
and the credit card companies are contracts of adhesion, so-called, because their terms are
prepared by only one party while the other merely affixes his signature signifying his adhesion
thereto.54

In this case, paragraph 7 of the terms and conditions states that "[Citibank is] not responsible if
the Card is not honored by any merchant affiliate for any reason x x x". While it is true that
Citibank may have no control of all the actions of its merchant affiliates, and should not be held
liable therefor, it is incorrect, however, to give it blanket freedom from liability if its card is
dishonored by any merchant affiliate for any reason. Such phrase renders the statement vague
and as the said terms and conditions constitute a contract of adhesion, any ambiguity in its
provisions must be construed against the party who prepared the contract,55 in this case
Citibank.

Citibank also invokes paragraph 15 of its terms and conditions which limits its liability
to P1,000.00 or the actual damage proven, whichever is lesser.

Again, such stipulation cannot be considered as valid for being unconscionable as it precludes
payment of a larger amount even though damage may be clearly proven. This Court is not
precluded from ruling out blind adherence to the terms of a contract if the attendant facts and
circumstances show that they should be ignored for being obviously too one-sided.56

The invalidity of the terms and conditions being invoked by Citibank, notwithstanding, the Court
still cannot award damages in favor of petitioner.

It is settled that in order that a plaintiff may maintain an action for the injuries of which he
complains, he must establish that such injuries resulted from a breach of duty which the
defendant owed to the plaintiff a concurrence of injury to the plaintiff and legal responsibility by
the person causing it. The underlying basis for the award of tort damages is the premise that an
individual was injured in contemplation of law; thus there must first be a breach before damages
may be awarded and the breach of such duty should be the proximate cause of the injury.57

It is not enough that one merely suffered sleepless nights, mental anguish or serious anxiety as
a result of the actuations of the other party. It is also required that a culpable act or omission
was factually established, that proof that the wrongful act or omission of the defendant is shown
as the proximate cause of the damage sustained by the claimant and that the case is predicated
on any of the instances expressed or envisioned by Arts. 221958 and 222059 of the Civil Code.60

In culpa contractual or breach of contract, moral damages are recoverable only if the defendant
has acted fraudulently or in bad faith, or is found guilty of gross negligence amounting to bad
faith, or in wanton disregard of his contractual obligations. The breach must be wanton,
reckless, malicious or in bad faith, oppressive or abusive.61

While the Court commiserates with Aznar for whatever undue embarrassment he suffered when
his credit card was dishonored by Ingtan Agency, especially when the agencys personnel
insinuated that he could be a swindler trying to use blacklisted cards, the Court cannot grant his
present petition as he failed to show by preponderance of evidence that Citibank breached any
obligation that would make it answerable for said suffering.

As the Court pronounced in BPI Express Card Corporation v. Court of Appeals,62

We do not dispute the findings of the lower court that private respondent suffered damages as a
result of the cancellation of his credit card. However, there is a material distinction between
damages and injury. Injury is the illegal invasion of a legal right; damage is the loss, hurt, or
harm which results from the injury; and damages are the recompense or compensation awarded
for the damage suffered. Thus, there can be damage without injury to those instances in which
the loss or harm was not the result of a violation of a legal duty. In such cases, the
consequences must be borne by the injured person alone, the law affords no remedy for
damages resulting from an act which does not amount to a legal injury or wrong. These
situations are often called damnum absque injuria.63

WHEREFORE, the petition is denied for lack of merit.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
ROMEO J. CALLEJO, SR. MINITA V. CHICO-NAZARIO
Associate Justice Asscociate Justice

ANTONIO EDUARDO B. NACHURA

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 Courts Division.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairpersons
Attestation, it is hereby certified 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 Courts Division.

REYNATO S. PUNO
Chief Justice
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 161188 June 13, 2008

Heirs of PURISIMA NALA, represented by their attorney-in-fact EFEGENIA DIGNA

DUYAN, petitioners,
vs.
ARTEMIO CABANSAG, respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

This is a petition for review under Rule 45 of the Rules of Court assailing the Court of Appeals
(CA) Decision1dated December 19, 2002 and Resolution2 dated October 28, 2003, dismissing
petitioners' appeal and affirming with modification the Regional Trial Court (RTC) Decision dated
August 10, 1994 rendered in Civil Case No. Q-91-10541.

The facts of the case are as follows:

Artemio Cabansag (respondent) filed Civil Case No. Q-91-10541 for damages in October 1991.
According to respondent, he bought a 50-square meter property from spouses Eugenio Gomez,
Jr. and Felisa Duyan Gomez on July 23, 1990. Said property is part of a 400-square meter lot
registered in the name of the Gomez spouses. In October 1991, he received a demand letter
from Atty. Alexander del Prado (Atty. Del Prado), in behalf of Purisima Nala (Nala), asking for
the payment of rentals from 1987 to 1991 until he leaves the premises, as said property is
owned by Nala, failing which criminal and civil actions will be filed against him. Another demand
letter was sent on May 14, 1991. Because of such demands, respondent suffered damages and
was constrained to file the case against Nala and Atty. Del Prado.3

Atty. Del Prado claimed that he sent the demand letters in good faith and that he was merely
acting in behalf of his client, Nala, who disputed respondent's claim of ownership. Nala alleged
that said property is part of an 800-square meter property owned by her late husband, Eulogio
Duyan, which was subsequently divided into two parts. The 400-square meter property was
conveyed to spouses Gomez in a fictitious deed of sale, with the agreement that it will be merely
held by them in trust for the Duyan's children. Said property is covered by Transfer Certificate of
Title (TCT) No. 281115 in the name of spouses Gomez. Nala also claimed that respondent is
only renting the property which he occupies.4

After trial, the RTC of Quezon City, Branch 93, rendered its Decision on August 10, 1994, in
favor of respondent. The dispositive portion of the Decision provides:

WHEREFORE, premises considered, by preponderance of evidence, the Court finds in

favor of the plaintiff and hereby orders the defendants, jointly and severally, to pay
plaintiff the following:

1. P150,000.00 by way of moral damages;

2. P30,000.00 by way of exemplary damages;

3. P20,000.00 as and for reasonable attorney's fees and other litigation

expenses; and

4. to pay the costs.

SO ORDERED.5
Nala and Atty. Del Prado appealed to the CA. The herein assailed CA Decision dated
December 19, 2002 affirmed the RTC Decision with modification, thus:

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED. The

assailed decision of the Regional Trial Court, Branch 93, Quezon City, in Civil Case No.
Q-91-10541 is heretofore AFFIRMED with MODIFICATION. Defendants-appellants are
ordered to pay, jointly and severally, plaintiff-appellee the amount of P30,000.00 by way
of moral damages. It is further ordered to pay him exemplary damages in the amount
of P10,000.00 and P10,000.00, attorney's fees.

SO ORDERED.6

In affirming the RTC Decision, the CA took note of the Decision dated September 5, 1994
rendered by the RTC of Quezon City, Branch 80, dismissing Civil Case No. 91-8821, an action
for reconveyance of real property and cancellation of TCT No. 281115 with damages, filed by
Nala against spouses Gomez.7

Hence, herein petition by the heirs of Nala (petitioners)8 with the following assignment of errors:

a) Respondent Court of Appeals erred in not considering the right of Purisima Nala to
assert her rights and interest over the property.

b) Respondent Court of Appeals erred in not considering the Decision rendered by the
Court of Appeals in the case for reconveyance which upheld the rights and interest of
Purisima Nala and her children over a certain parcel of land, a portion of which is subject
of the present case.

c) Respondent Court of Appeals erred in awarding damages and attorney's fees without
any basis.9

Atty. Del Prado filed a motion for extension of time to file his separate petition but it was denied
by the Court per its Resolution dated January 19, 2004 issued in G.R. No. 160829.

Petitioners argue that their predecessor-in-interest had every right to protect and assert her
interests over the property. Nala had no knowledge that the property was sold by spouses
Gomez to respondent when the demand letters were sent. What she was aware of was the fact
that spouses Gomez were managing the rentals on the property by virtue of the implied trust
created between them and Eulogio Duyan. When spouses Gomez failed to remit the rentals and
claimed ownership of the property, it was then that Nala decided to procure the services of legal
counsel to protect their rights over the property.

Petitioners also contend that it was error for the CA to take note of the RTC Decision in Civil
Case No. 91-8821 without further noting that the CA had already reversed and set aside said
RTC Decision and ordered reconveyance of the property to Nala and her children in a Decision
dated March 8, 2000 rendered in CA-G.R. CV No. 49163. Petitioners also argue that
respondent did not substantiate his claim for damages.

Preliminarily, the Court notes that both the RTC and the CA failed to indicate the particular
provision of law under which it held petitioners liable for damages. Nevertheless, based on the
allegations in respondent's complaint, it may be gathered that the basis for his claim for
damages is Article 19 of the Civil Code, which provides:

Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.

The foregoing provision sets the standards which may be observed not only in the exercise of
one's rights but also in the performance of one's duties. When a right is exercised in a manner
which does not conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must be held responsible.
But a right, though by itself legal because recognized or granted by law as such, may
nevertheless become the source of some illegality. A person should be protected only when he
acts in the legitimate exercise of his right; that is, when he acts with prudence and in good faith,
but not when he acts with negligence or abuse. There is an abuse of right when it is exercised
only for the purpose of prejudicing or injuring another. 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.[10]

In order to be liable for damages under the abuse of rights principle, the following requisites
must concur: (a) the existence of a legal right or duty; (b) which is exercised in bad faith; and (c)
for the sole intent of prejudicing or injuring another.11

It should be stressed that malice or bad faith is at the core of Article 19 of the Civil Code. Good
faith is presumed, and he who alleges bad faith has the duty to prove the same.12 Bad faith, on
the other hand, does not simply connote bad judgment to simple negligence, dishonest purpose
or some moral obloquy and conscious doing of a wrong, or a breach of known duty due to some
motives or interest or ill will that partakes of the nature of fraud. Malice connotes ill will or spite
and speaks not in response to duty. It implies an intention to do ulterior and unjustifiable harm. 13

In the present case, there is nothing on record which will prove that Nala and her counsel, Atty.
Del Prado, acted in bad faith or malice in sending the demand letters to respondent. In the first
place, there was ground for Nala's actions since she believed that the property was owned by
her husband Eulogio Duyan and that respondent was illegally occupying the same. She had no
knowledge that spouses Gomez violated the trust imposed on them by Eulogio and
surreptitiously sold a portion of the property to respondent. It was only after respondent filed
the case for damages against Nala that she learned of such sale. The bare fact that
respondent claims ownership over the property does not give rise to the conclusion that the
sending of the demand letters by Nala was done in bad faith. Absent any evidence presented by
respondent, bad faith or malice could not be attributed to petitioner since Nala was only trying to
protect their interests over the property.

Moreover, respondent failed to show that Nala and Atty. Del Prado's acts were done with the
sole intention of prejudicing and injuring him. It may be true that respondent suffered mental
anguish, serious anxiety and sleepless nights when he received the demand letters; however,
there is a material distinction between damages and injury. Injury is the legal invasion of a legal
right while damage is the hurt, loss or harm which results from the injury.14 Thus, there can be
damage without injury in those instances in which the loss or harm was not the result of a
violation of a legal duty. In such cases, the consequences must be borne by the injured person
alone; the law affords no remedy for damages resulting from an act which does not amount to a
legal injury or wrong. These situations are often called damnum absque injuria.15

Nala was acting well within her rights when she instructed Atty. Del Prado to send the demand
letters. She had to take all the necessary legal steps to enforce her legal/equitable rights over
the property occupied by respondent. One who makes use of his own legal right does no
injury.16 Thus, whatever damages are suffered by respondent should be borne solely by him.

Nala's acts in protecting her rights over the property find further solid ground in the fact that the
property has already been ordered reconveyed to her and her heirs. In its Decision dated March
8, 2000 in CA-G.R. CV No. 49163, the CA reversed and set aside the RTC's Decision and
ordered the reconveyance of the property to petitioners, and TCT No. 281115 was declared
canceled. Said CA Decision was affirmed by this Court in its Decision dated March 18, 2005 in
G.R. No. 144148, which became final and executory on July 27, 2005.

WHEREFORE, the petition is GRANTED. The Decision dated December 19, 2002 and
Resolution dated October 28, 2003 rendered by the Court of Appeals in CA-G.R. CV No. 48580
are NULLIFIED. Civil Case No. Q-91-10541 is DISMISSED for lack of merit.

Costs against respondent.

SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MINITA V. CHICO-NAZARIO RUBEN T. REYES

Associate Justice Associate Justice
*
ARTURO D. BRION
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.

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

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
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 151866 September 9, 2004

SOLEDAD CARPIO, petitioner,

vs.
LEONORA A. VALMONTE, respondent.

DECISION

TINGA, J.:

Assailed in the instant petition for review is the Decision of the Court of Appeals in C.A.-G.R. CV
No. 69537,1promulgated on 17 January 2002.2 The appellate court reversed the trial courts
decision denying respondents claim for damages against petitioner and ordered the latter to
pay moral damages to the former in the amount ofP100,000.00.

Respondent Leonora Valmonte is a wedding coordinator. Michelle del Rosario and Jon Sierra
engaged her services for their church wedding on 10 October 1996. At about 4:30 p.m. on that
day, Valmonte went to the Manila Hotel where the bride and her family were billeted. When she
arrived at Suite 326-A, several persons were already there including the bride, the brides
parents and relatives, the make-up artist and his assistant, the official photographers, and the
fashion designer. Among those present was petitioner Soledad Carpio, an aunt of the bride who
was preparing to dress up for the occasion.

After reporting to the bride, Valmonte went out of the suite carrying the items needed for the
wedding rites and the gifts from the principal sponsors. She proceeded to the Maynila
Restaurant where the reception was to be held. She paid the suppliers, gave the meal
allowance to the band, and went back to the suite. Upon entering the suite, Valmonte noticed
the people staring at her. It was at this juncture that petitioner allegedly uttered the following
words to Valmonte: "Ikaw lang ang lumabas ng kwarto, nasaan ang dala mong bag? Saan ka
pumunta? Ikaw lang and lumabas ng kwarto, ikaw ang kumuha." Petitioner then ordered one of
the ladies to search Valmontes bag. It turned out that after Valmonte left the room to attend to
her duties, petitioner discovered that the pieces of jewelry which she placed inside the comfort
room in a paper bag were lost. The jewelry pieces consist of two (2) diamond rings, one (1) set
of diamond earrings, bracelet and necklace with a total value of about one million pesos. The
hotel security was called in to help in the search. The bags and personal belongings of all the
people inside the room were searched. Valmonte was allegedly bodily searched, interrogated
and trailed by a security guard throughout the evening. Later, police officers arrived and
interviewed all persons who had access to the suite and fingerprinted them including Valmonte.
During all the time Valmonte was being interrogated by the police officers, petitioner kept on
saying the words "Siya lang ang lumabas ng kwarto." Valmontes car which was parked at the
hotel premises was also searched but the search yielded nothing.

A few days after the incident, petitioner received a letter from Valmonte demanding a formal
letter of apology which she wanted to be circulated to the newlyweds relatives and guests to
redeem her smeared reputation as a result of petitioners imputations against her. Petitioner did
not respond to the letter. Thus, on 20 February 1997, Valmonte filed a suit for damages against
her before the Regional Trial Court (RTC) of Pasig City, Branch 268. In her complaint, Valmonte
prayed that petitioner be ordered to pay actual, moral and exemplary damages, as well as
attorneys fees.

Responding to the complaint, petitioner denied having uttered words or done any act to confront
or single out Valmonte during the investigation and claimed that everything that transpired after
the theft incident was purely a police matter in which she had no participation. Petitioner prayed
for the dismissal of the complaint and for the court to adjudge Valmonte liable on her
counterclaim.
The trial court rendered its Decision on 21 August 2000, dismissing Valmontes complaint for
damages. It ruled that when petitioner sought investigation for the loss of her jewelry, she was
merely exercising her right and if damage results from a person exercising his legal right, it
is damnum absque injuria. It added that no proof was presented by Valmonte to show that
petitioner acted maliciously and in bad faith in pointing to her as the culprit. The court said that
Valmonte failed to show that she suffered serious anxiety, moral shock, social humiliation, or
that her reputation was besmirched due to petitioners wrongful act.

Respondent appealed to the Court of Appeals alleging that the trial court erred in finding that
petitioner did not slander her good name and reputation and in disregarding the evidence she
presented.

The Court of Appeals ruled differently. It opined that Valmonte has clearly established that she
was singled out by petitioner as the one responsible for the loss of her jewelry. It cited the
testimony of Serena Manding, corroborating Valmontes claim that petitioner confronted her and
uttered words to the effect that she was the only one who went out of the room and that she was
the one who took the jewelry. The appellate court held that Valmontes claim for damages is not
predicated on the fact that she was subjected to body search and interrogation by the police but
rather petitioners act of publicly accusing her of taking the missing jewelry. It categorized
petitioners utterance defamatory considering that it imputed upon Valmonte the crime of theft.
The court concluded that petitioners verbal assault upon Valmonte was done with malice and in
bad faith since it was made in the presence of many people without any solid proof except
petitioners suspicion. Such unfounded accusation entitles Valmonte to an award of moral
damages in the amount of P100,000.00 for she was publicly humiliated, deeply insulted, and
embarrassed. However, the court found no sufficient evidence to justify the award of actual
damages.

Hence, this petition.

Petitioner contends that the appellate courts conclusion that she publicly humiliated respondent
does not conform to the evidence presented. She adds that even on the assumption that she
uttered the words complained of, it was not shown that she did so with malice and in bad faith.

In essence, petitioner would want this Court to review the factual conclusions reached by the
appellate court. The cardinal rule adhered to in this jurisdiction is that a petition for review must
raise only questions of law,3 and judicial review under Rule 45 does not extend to an evaluation
of the sufficiency of evidence unless there is a showing that the findings complained of are
totally devoid of support in the record or that they are so glaringly erroneous as to constitute
serious abuse of discretion.4 This Court, while not a trier of facts, may review the evidence in
order to arrive at the correct factual conclusion based on the record especially so when the
findings of fact of the Court of Appeals are at variance with those of the trial court, or when the
inference drawn by the Court of Appeals from the facts is manifestly mistaken.5

Contrary to the trial courts finding, we find sufficient evidence on record tending to prove that
petitioners imputations against respondent was made with malice and in bad faith.

Petitioners testimony was shorn of substance and consists mainly of denials. She claimed not
to have uttered the words imputing the crime of theft to respondent or to have mentioned the
latters name to the authorities as the one responsible for the loss of her jewelry. Well-settled is
the rule that denials, if unsubstantiated by clear and convincing evidence, are negative and self-
serving which merit no weight in law and cannot be given greater evidentiary value over the
testimony of credible witnesses who testify on affirmative matters. 6

Respondent, however, has successfully refuted petitioners testimony. Quite credibly, she has
narrated in great detail her distressing experience on that fateful day. She testified as to how
rudely she was treated by petitioner right after she returned to the room. Petitioner immediately
confronted her and uttered the words "Ikaw lang ang lumabas ng kwarto. Nasaan ang dala
mong bag? Saan ka pumunta? Ikaw ang kumuha." Thereafter, her body was searched including
her bag and her car. Worse, during the reception, she was once more asked by the hotel
security to go to the ladies room and she was again bodily searched.7
Serea Manding, a make-up artist, corroborated respondents testimony. She testified that
petitioner confronted respondent in the presence of all the people inside the suite accusing her
of being the only one who went out of the comfort room before the loss of the jewelry. Manding
added that respondent was embarrassed because everybody else in the room thought she was
a thief.8 If only to debunk petitioners assertion that she did not utter the accusatory remarks in
question publicly and with malice, Mandings testimony on the point deserves to be reproduced.
Thus,

Q After that what did she do?

A Then Leo came out from the other room she said, she is (sic) the one I only saw from
the comfort room.

Q Now, what exact word (sic) were said by Mrs. Carpio on that matter?

A She said "siya lang yung nakita kong galing sa C.R."

Q And who was Mrs. Carpio or the defendant referring to?

A Leo Valmonte.

Q Did she say anything else, the defendant?

A Her jewelry were lost and Leo was the only one she saw in the C.R. After that she get
(sic) the paper bag then the jewelry were already gone.

Q Did she confront the plaintiff Mrs. Valmonte regarding that fact?

A Yes.

Q What did the defendant Mrs. Carpio tell the plaintiff, Mrs. Valmonte?

A "Ikaw yung nakita ko sa C.R. nawawala yung alahas ko."

Q When the defendant Mrs. Carpio said that to plaintiff Mrs. Valmonte were there other
people inside the room?

A Yes, sir.

Q Were they able to hear what Mrs. Carpio said to Mrs. Valmonte?

A Yes, sir.

Q What was your thinking at that time that Mrs. Carpio said that to Mrs. Valmonte?

A "Nakakahiya kasi akala ng iba doon na talagang magnanakaw siya. Kasi marami na
kaming nandodoon, dumating na yung couturier pati yung video man and we sir.

Q Who was the person you [were] alleging "na nakakahiya" whose (sic) being accused
or being somebody who stole those item of jewelry?

A "Nakakahiya para kay Leo kasi pinagbibintangan siya. Sa dami namin doon siya yung
napagbintangan."

Q And who is Leo, what is her full name?

A Leo Valmonte.

Q Did the defendant tell this matter to other people inside the room?
 A Yes, the mother of the bride.

Q And who else did she talk to?

A The father of the bride also.

Q And what did the defendant tell the mother regarding this matter?

A "Nawawala yung alahas ko." Sabi naman nung mother baka naman hindi mo dala
tignan mo munang mabuti.

Q Who was that other person that she talked to?

A Father of the bride.9

Significantly, petitioners counsel elected not to pursue her cross-examination of the witness on
this point following her terse and firm declaration that she remembered petitioners exact
defamatory words in answer to the counsels question.10

Jaime Papio, Security Supervisor at Manila Hotel, likewise contradicted petitioners allegation
that she did not suspect or mention the name of respondent as her suspect in the loss of the
jewelry.11

To warrant recovery of damages, there must be both a right of action, for a wrong inflicted by
the defendant, and the damage resulting therefrom to the plaintiff. Wrong without damage, or
damage without wrong, does not constitute a cause of action.12

In the sphere of our law on human relations, the victim of a wrongful act or omission, whether
done willfully or negligently, is not left without any remedy or recourse to obtain relief for the
damage or injury he sustained. Incorporated into our civil law are not only principles of equity
but also universal moral precepts which are designed to indicate certain norms that spring from
the fountain of good conscience and which are meant to serve as guides for human
conduct.13 First of these fundamental precepts is the principle commonly known as "abuse of
rights" under Article 19 of the Civil Code. It provides that "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." To find the existence of an abuse of right, the following
elements must be present: (1) there is a legal right or duty; (2) which is exercised in bad faith;
(3) for the sole intent or prejudicing or injuring another.14 When a right is exercised in a manner
which discards these norms resulting in damage to another, a legal wrong is committed for
which the actor can be held accountable.15 One is not allowed to exercise his right in a manner
which would cause unnecessary prejudice to another or if he would thereby offend morals or
good customs. Thus, a person should be protected only when he acts in the legitimate exercise
of his right, that is when he acts with prudence and good faith; but not when he acts with
negligence or abuse.16

Complementing the principle of abuse of rights are the provisions of Articles 20 and 21 of the
Civil Code which read, thus:

Art. 20. Every person who, contrary to law, willfully or negligently causes damage to
another, shall indemnify the latter for the same.

Art. 21. Any person who willfully causes loss or injury to another in a manner that is
contrary to morals or good customs or public policy shall compensate the latter for the
damage.

The foregoing rules provide the legal bedrock for the award of damages to a party who
suffers damage whenever one commits an act in violation of some legal provision, or an
act which though not constituting a transgression of positive law, nevertheless violates
certain rudimentary rights of the party aggrieved.
In the case at bar, petitioners verbal reproach against respondent was certainly uncalled for
considering that by her own account nobody knew that she brought such kind and amount of
jewelry inside the paper bag.17 This being the case, she had no right to attack respondent with
her innuendos which were not merely inquisitive but outrightly accusatory. By openly accusing
respondent as the only person who went out of the room before the loss of the jewelry in the
presence of all the guests therein, and ordering that she be immediately bodily searched,
petitioner virtually branded respondent as the thief. True, petitioner had the right to ascertain the
identity of the malefactor, but to malign respondent without an iota of proof that she was the one
who actually stole the jewelry is an act which, by any standard or principle of law is
impermissible. Petitioner had willfully caused injury to respondent in a manner which is contrary
to morals and good customs. Her firmness and resolve to find her missing jewelry cannot justify
her acts toward respondent. She did not act with justice and good faith for apparently, she had
no other purpose in mind but to prejudice respondent. Certainly, petitioner transgressed the
provisions of Article 19 in relation to Article 21 for which she should be held accountable.

Owing to the rule that great weight and even finality is given to factual conclusions of the Court
of Appeals which affirm those of the trial court,18 we sustain the findings of the trial court and the
appellate court that respondents claim for actual damages has not been substantiated with
satisfactory evidence during the trial and must therefore be denied. To be recoverable, actual
damages must be duly proved with reasonable degree of certainty and the courts cannot rely on
speculation, conjecture or guesswork.19

Respondent, however, is clearly entitled to an award of moral damages. Moral damages may be
awarded whenever the defendants wrongful act or omission is the proximate cause of the
plaintiffs physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury20 in the cases specified or
analogous to those provided in Article 2219 of the Civil Code.21Though no proof of pecuniary
loss is necessary in order that moral damages may be adjudicated, courts are mandated to take
into account all the circumstances obtaining in the case and assess damages according to their
discretion.22 Worthy of note is that moral damages are not awarded to penalize the
defendant,23 or to enrich a complainant, but to enable the latter to obtain means, diversions or
amusements that will serve to alleviate the moral suffering he has undergone, by reason of
defendants culpable action. In any case, award of moral damages must be proportionate to the
sufferings inflicted.24

Based on the foregoing jurisprudential pronouncements, we rule that the appellate court did not
err in awarding moral damages. Considering respondents social standing, and the fact that her
profession is based primarily on trust reposed in her by her clients, the seriousness of the
imputations made by petitioner has greatly tarnished her reputation and will in one way or the
other, affect her future dealings with her clients, the award ofP100,000.00 as moral damages
appears to be a fair and reasonable assessment of respondents damages.

WHEREFORE, the instant Petition is DENIED. Costs against petitioner.

SO ORDERED.

Puno, Austria-Martinez*, Callejo, Sr., and Chico-Nazario, JJ., concur.