STRICT LIABILITY TORTS

G.R. No. 74431 November 6, 1989

PURITA MIRANDA VESTIL and AGUSTIN VESTIL, petitioners,

vs.
INTERMEDIATE APPELLATE COURT, DAVID UY and TERESITA UY, respondents.

Pablo P. Garcia for petitioners.

Roberto R. Palmares for private respondents.

CRUZ, J.:

Little Theness Tan Uy was dead at the age of three. Her parents said she died because she was bitten by a dog of the
petitioners, but the latter denied this, claiming they had nothing to do with the dog. The Uys sued the Vestils, who were
sustained by the trial court. On appeal, the decision of the court a quo was reversed in favor of the Uys. The Vestils are
now before us. They ask us to set aside the judgment of the respondent court and to reinstate that of the trial court.

On July 29, 1915, Theness was bitten by a dog while she was playing with a child of the petitioners in the house of the late
Vicente Miranda, the father of Purita Vestil, at F. Ramos Street in Cebu City. She was rushed to the Cebu General Hospital,
where she was treated for "multiple lacerated wounds on the forehead" 1 and administered an anti-rabies vaccine by Dr.
Antonio Tautjo. She was discharged after nine days but was readmitted one week later due to "vomiting of saliva." 2 The
following day, on August 15, 1975, the child died. The cause of death was certified as broncho-pneumonia. 3

Seven months later, the Uys sued for damages, alleging that the Vestils were liable to them as the possessors of "Andoy,"
the dog that bit and eventually killed their daughter. The Vestils rejected the charge, insisting that the dog belonged to the
deceased Vicente Miranda, that it was a tame animal, and that in any case no one had witnessed it bite Theness. After trial,
Judge Jose R. Ramolete of the Court of First Instance of Cebu sustained the defendants and dismissed the complaint. 4

The respondent court arrived at a different conclusion when the case was appealed. 5 It found that the Vestils were in
possession of the house and the dog and so should be responsible under Article 2183 of the Civil Code for the injuries
caused by the dog. It also held that the child had died as a result of the dog bites and not for causes independent thereof as
submitted by the appellees. Accordingly, the Vestils were ordered to pay the Uys damages in the amount of P30,000.00 for
the death of Theness, P12,000.00 for medical and hospitalization expenses, and P2,000.00 as attorney's fees.

In the proceedings now before us, Purita Vestil insists that she is not the owner of the house or of the dog left by her
father as his estate has not yet been partitioned and there are other heirs to the property. Pursuing the logic of the Uys,
she claims, even her sister living in Canada would be held responsible for the acts of the dog simply because she is one of
Miranda's heirs. However, that is hardly the point. What must be determined is the possession of the dog that admittedly
was staying in the house in question, regardless of the ownership of the dog or of the house.

Article 2183 reads as follows:

The possessor of an animal or whoever may make use of the same is responsible for the damage which
it may cause, although it may escape or be lost. 'This responsibility shall cease only in case the damages
should come from force majeure from the fault of the person who has suffered damage.

Thus, in Afialda v. Hisole, 6 a person hired as caretaker of a carabao gored him to death and his heirs thereupon sued the
owner of the animal for damages. The complaint was dismissed on the ground that it was the caretaker's duty to prevent
the carabao from causing injury to any one, including himself.

Purita Vestil's testimony that she was not in possession of Miranda's house is hardly credible. She said that the occupants
of the house left by her father were related to him ("one way or the other") and maintained themselves out of a common
fund or by some kind of arrangement (on which, however, she did not elaborate ). 7 She mentioned as many as ten of such
relatives who had stayed in the house at one time or another although they did not appear to be close kin. 8 She at least
implied that they did not pay any rent, presumably because of their relation with Vicente Miranda notwithstanding that
she herself did not seem to know them very well.

There is contrary evidence that the occupants of the house, were boarders (or more of boarders than relatives) who paid
the petitioners for providing them with meals and accommodations. It also appears that Purita Vestil had hired a maid,
Dolores Jumao-as, who did the cooking and cleaning in the said house for its occupants. 9 Her mother, Pacita, who was a
nursemaid of Purita herself, categorically declared that the petitioners were maintaining boarders in the house where
Theness was bitten by a dog.10 Another witness, Marcial Lao, testified that he was indeed a boarder and that the Vestils
were maintaining the house for business purposes. 11 And although Purita denied paying the water bills for the house, the
private respondents submitted documentary evidence of her application for water connection with the Cebu Water
District, which strongly suggested that she was administering the house in question. 12

While it is true that she is not really the owner of the house, which was still part of Vicente Miranda's estate, there is no
doubt that she and her husband were its possessors at the time of the incident in question. She was the only heir residing
in Cebu City and the most logical person to take care of the property, which was only six kilometers from her own
house. 13 Moreover, there is evidence showing that she and her family regularly went to the house, once or twice weekly,
according to at least one witness, 14 and used it virtually as a second house. Interestingly, her own daughter was playing in
the house with Theness when the little girl was bitten by the dog. 15 The dog itself remained in the house even after the
death of Vicente Miranda in 1973 and until 1975, when the incident in question occurred. It is also noteworthy that the
petitioners offered to assist the Uys with their hospitalization expenses although Purita said she knew them only
casually. 16

The petitioners also argue that even assuming that they were the possessors of the dog that bit Theness there was no
clear showing that she died as a result thereof. On the contrary, the death certificate 17 declared that she died of broncho-
pneumonia, which had nothing to do with the dog bites for which she had been previously hospitalized. The Court need
not involve itself in an extended scientific discussion of the causal connection between the dog bites and the certified
cause of death except to note that, first, Theness developed hydrophobia, a symptom of rabies, as a result of the dog bites,
and second, that asphyxia broncho-pneumonia, which ultimately caused her death, was a complication of rabies. That
Theness became afraid of water after she was bitten by the dog is established by the following testimony of Dr. Tautjo:

COURT: I think there was mention of rabies in the report in the second admission?

A: Now, the child was continuously vomiting just before I referred to Dr. Co earlier in the morning and
then the father, because the child was asking for water, the father tried to give the child water and this
child went under the bed, she did not like to drink the water and there was fright in her eyeballs. For
this reason, because I was in danger there was rabies, I called Dr. Co.

Q: In other words, the child had hydrophobia?

A: Yes, sir. 18

As for the link between rabies and broncho-pneumonia, the doctor had the following to say under oath:

A: Now, as 1 said before, broncho-pneumonia can result from physical, chemical and bacterial means. ...
It can be the result of infection, now, so if you have any other disease which can lower your resistance
you can also get pneumonia.

xxx xxx xxx

Q: Would you say that a person who has rabies may die of complication which is broncho-pneumonia?

A: Yes.

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

A: Yes.

Q: Would you say therefore that persons who have rabies may die of respiratory failure which leave in
the form of bronco-pneumonia?

A: Broncho-pneumonia can be a complication of rabies. 19

On the strength of the foregoing testimony, the Court finds that the link between the dog bites and the certified cause of
death has beep satisfactorily established. We also reiterate our ruling in Sison v. Sun Life Assurance Company of
Canada, 20 that the death certificate is not conclusive proof of the cause of death but only of the fact of death. Indeed, the
evidence of the child's hydrophobia is sufficient to convince us that she died because she was bitten by the dog even if the
death certificate stated a different cause of death. The petitioner's contention that they could not be expected to exercise
remote control of the dog is not acceptable. In fact, Article 2183 of the Civil Code holds the possessor liable even if the
animal should "escape or be lost" and so be removed from his control. And it does not matter either that, as the
petitioners also contend, the dog was tame and was merely provoked by the child into biting her. The law does not speak
only of vicious animals but covers even tame ones as long as they cause injury. As for the alleged provocation, the
petitioners forget that Theness was only three years old at the time she was attacked and can hardly be faulted for
whatever she might have done to the animal.

It is worth observing that the above defenses of the petitioners are an implied rejection of their original posture that there
was no proof that it was the dog in their father's house that bit Theness.

According to Manresa the obligation imposed by Article 2183 of the Civil Code is not based on the negligence or on the
presumed lack of vigilance of the possessor or user of the animal causing the damage. It is based on natural equity and on
the principle of social interest that he who possesses animals for his utility, pleasure or service must answer for the
damage which such animal may cause. 21

We sustain the findings of the Court of Appeals and approve the monetary awards except only as to the medical and
hospitalization expenses, which are reduced to P2,026.69, as prayed for in the complaint. While there is no recompense
that can bring back to the private respondents the child they have lost, their pain should at least be assuaged by the civil
damages to which they are entitled.

WHEREFORE, the challenged decision is AFFIRMED as above modified. The petition is DENIED, with costs against the
petitioners. It is so ordered.

G.R. No. L-12858 January 22, 1918

THE UNITED STATES, plaintiff-appellee,

vs.
SANTIAGO PINEDA, defendant-appellant.

Francisco and Lualhati for appellant.

Acting Attorney-General Paredes for appellee.

MALCOLM, J.:

This appeal requires a construction and an application, for the first time, of the penal provisions of the Pharmacy Law.

Santiago Pineda, the defendant, is a registered pharmacist of long standing and the owner of a drug store located at Nos.
442, 444, Calle Santo Cristo, city of Manila. One Feliciano Santos, having some sick horses, presented a copy of a
prescription obtained from Dr. Richardson, and which on other occasions Santos had given to his horses with good
results, at Pineda's drug store for filling. The prescription read "clorato de potasa 120 gramos en seis papelitos de
20 gramos, para caballo." Under the supervision of Pineda, the prescription was prepared and returned to Santos in the
form of six papers marked, "Botica Pineda Clorato potasa 120.00 en seis papeles para caballo Sto. Cristo
442, 444, Binondo, Manila." Santos, under the belief that he had purchased the potassium chlorate which he had asked for,
put two of the packages in water the doses to two of his sick horses. Another package was mixed with water for another
horse, but was not used. The two horses, to which had been given the preparation, died shortly afterwards. Santos,
thereupon, took the three remaining packages to the Bureau of Science for examination. Drs. Pea and Darjuan, of the
Bureau of Science, on analysis found that the packages contained not potassium chlorate but barium chlorate. At the
instance of Santos, the two chemists also went to the drug store of the defendant and bought potassium chlorate, which
when analyzed was found to be barium chlorate. (Barium chlorate, it should be noted, is a poison; potassium chlorate is
not.) Dr. Buencamino, a veterinarian, performed an autopsy on the horses, and found that death was the result of
poisoning.

Four assignments of error are made. The first is that the lower court erred in admitting the testimony of the chemist Pena
and Darjuan as to their purchase of potassium chlorate at the drug store of the accused, which substance proved on
analysis to be barium chlorate. What the appellant is here relying on is the maxim res inter alios acta. As a general rule, the
evidence of other offenses committed by a defendant is inadmissible. But appellant has confused this maxim and this rule
with certain exceptions thereto. The effort is not to convict the accused of a second offense. Nor is there an attempt to
draw the mind away from the point at issue and thus to prejudice defendant's case. The purpose is to ascertain
defendant's knowledge and intent, and to fix his negligence. If the defendant has on more than one occasion performed
similar acts, accident in good faith is possibly excluded, negligence is intensified, and fraudulent intent may even be
established. It has been said that there is no better evidence of negligence than the frequency of accidents. (See 10 R. C. L.,
pp. 938, 940.) The United States Supreme Court has held that:

On the trial of a criminal case the question relates to the tendency of certain testimony to throw light upon a
particular fact, or to explain the conduct of a particular person, there is a certain discretion on the part of the
trial judge which a court of errors will not interfere with, unless it manifestly appear that the testimony has no
legitimate bearing upon the question at issue, and is calculated to prejudice the accused.

Whenever the necessity arises for a resort to circumstantial evidence, either from the nature of the inquiry or
the failure of direct proof, objections to the testimony on the ground of irrelevancy are not favored.

Evidence is admissible in a criminal action which tends to show motive, although it tends to prove the
commission of another offense by the defendant. (Moore vs. U. S. [1893], 150 U. S., 57.)

The second assignment of error is that the lower court erred in finding that the substance sold by the accused to Feliciano
Santos on the 22d of June, 1916, was barium chlorate and not potassium chlorate. The proof demonstrates the contrary.

The third and fourth assignments of error that the lower court erred in finding that the accused has been proved guilty
beyond a reasonable doubt of an infraction of Act No. 597, section 17, as amended. The third assignment contains the
points we should consider, including, we may remark, a somewhat difficult question concerning which the briefs have
given little assistance.

The Pharmacy Law was first enacted as Act No. 597, was later amended by Act Nos. 1921, 2236, and 2382, and is now
found as Chapter 30 of the Administrative Code. The law provides for a board of pharmaceutical examiners, and the
examination and registration of pharmacists, and finally contains sundry provisions relative to the practice of pharmacy.
High qualification for applicants for the pharmaceutical; examination are established. The program of subjects for the
examination is wide. Responsibility for the quality of drugs is fixed by section 17 of the Pharmacy Law, as amended (now
Administrative Code [1917], section 751), in the following term:

Every pharmacist shall be responsible for the quality of all drugs, chemicals, medicines, and poisons he may sell
or keep for sale; and it shall be unlawful for any person whomsoever to manufacture, prepare, sell, or
administer any prescription, drug, chemical, medicine, or poison under any fraudulent name, direction, or
pretense, or to adulterate any drug, chemical, medicine, or poison so used, sold or offered for sale. Any drug,
chemical, medicine, or poison shall be held to be adulterated or deteriorated within the meaning of this section if
it differs from the standard of quality or purity given in the United States Pharmacopoeia.
The same section of the Pharmacy Law also contains the following penal provision: "Any person violating the provisions
of this Act shall, upon conviction, be punished by a fine of not more than five hundred dollar." The Administrative Code,
section 2676, changes the penalty somewhat by providing that:

Any person engaging in the practice of pharmacy in the Philippine Islands contrary to any provision of the
Pharmacy Law or violating any provisions of said law for which no specific penalty s provided shall, for each
offense, be punished by a fine not to exceed two hundred pesos, or by imprisonment for not more than ninety
days, or both, in the discretion of the court.

These are the provisions of law, pursuant to which prosecution has been initiated and which it is now incumbent upon us
to construe.

Turning to the law, certain points therein as bearing on our present facts must be admitted. Thus, defendant is a
pharmacist. As a pharmacist, he is made responsible for the quality of all drugs and poisons which he sells. And finally it is
provided that it shall be unlawful for him to sell any drug or poison under any "fraudulent name." It is the one word
"fraudulent" which has given the court trouble. What did the Legislature intend to convey by this restrictive adjective?

Were we to adhere to the technical definition of fraud, which the appellant vigorously insists upon, it would be difficult, if
not impossible, to convict any druggist of a violation of the law. The prosecution would have to prove to a reasonable
degree of certainty that the druggist made a material representation; that it was false; that when he made it he knew that
it was false or made it recklessly without any knowledge of its truth and as positive assertion; that he made it with the
intention that it should be acted upon by the purchaser; that the purchaser acted in reliance upon it, and that the
purchased thereby suffered injury. Such a construction with a literal following of well-known principles on the subject of
fraud would strip the law of at least much of its force. It would leave the innocent purchaser of drugs, who must blindly
trust in the good faith and vigilance of the pharmacist, at the mercy of any unscrupulous vendor. We should not, therefore,
without good reason so devitalize the law.

The profession of pharmacy, it has been said again and again, is one demanding care and skill. The responsibility of the
druggist to use care has been variously qualified as "ordinary care," "care of a special high degree," "the highest degree of
care known to practical men." Even under the first conservative expression, "ordinary care" with reference to the
business of a druggist, the Supreme Court of Connecticut has said must be held to signify "the highest practicable degree
of prudence, thoughtfulness, and vigilance, and most exact and reliable safeguards consistent with the reasonable conduct
of the business, in order that human life may not be constantly be exposed to the danger flowing from the substitution of
deadly poisons for harmless medicine." (Tombari vs. Connors [1912], 85 Conn., 235. See also Willson vs. Faxon, Williams
and Faxon [1913], 208 N. Y., 108; Knoefel vs. Atkins [1907], 81 N. E., 600.) The "skill" required of a druggist is
denominated as "high" or "ample." (Peters vs. Jackson [1902], 50 W. Va., 644; 57 L. R. A., 428.) In other words, the care
required must be commensurate with the danger involved, and the skill employed must correspond with the superior
knowledge of the business which the law demands.

Under one conception, and it should not be forgotten that the case we consider are civil in nature, the question of
negligence or ignorance is irrelevant. The druggist is responsible as an absolute guarantor of what he sells. In a decision
which stands alone, the Supreme Court of Kentucky said:

As applicable to the owners of drug stores, or persons engaged in vending drugs and medicines by retail, the
legal maxim should be reversed. Instead of caveat emptor, it should be caveat venditor. That is to say, let him be
certain that he does not sell to a purchaser or send to a patient one drug for another, as arsenic for calomel,
cantharides for or mixed with snakeroot and Peruvian bark, or even one innocent drug, calculated to produce a
certain effect, in place of another sent for and designed to produce a different effect. If he does these things, he
cannot escape civil responsibility, upon the alleged pretext that it was an accidental or an innocent mistake; that
he had been very careful and particular, and had used extraordinary care and diligence in preparing or
compounding the medicines as required, etc. Such excuses will not avail him. (Fleet vs. Hollenkemp [1852], 56
Am. Dec., 563.)

Under the other conception, in which the proof of negligence is considered as material, where a customer calls upon a
druggist for a harmless remedy, delivery of a poisonous drug by mistake by the druggist is prima facie negligence, placing
the burden on him to show that the mistake was under the circumstances consistent with the exercise of due care. (See
Knoefel vs. Atkins, supra,) The druggist cannot, for example in filling a prescription calling for potassium chlorate give
instead to the customer barium chlorate, a poison, place this poison in a package labeled "potassium chlorate," and expect
to escape responsibility on plea of mistake. His mistake, under the most favorable aspect for himself, was negligence. So in
a case where a druggist filled an order for calomel tablets with morphine and placed the morphine in a box labeled
calomel, it was said:

It is not suggested, nor can we apprehend that it is in any wise probable, that the act of furnishing the wrong
drug in this case was willful. If it was furnished by the clerk, it was undoubtedly a mistake and unintentional.
However, it was a mistake of the gravest kind, and of the most disastrous effect. We cannot say that one holding
himself out as competent to handle such drugs, and who does so, having rightful access to them, and relied upon
by those dealing with him to exercise that high degree of caution and care called for by the peculiarly dangerous
nature of this business, can be heard to say that his mistakes by which he furnishes a customer the most deadly
of drugs for those comparatively harmless is not, in and of itself, gross negligence, and that of an aggravated
form. (Smith's Admrx. vs. Middleton [1902], 56 L. R. A., 484.)

The rule of caveat emptor cannot apply to the purchase and sale of drugs. The vendor and the vendee do not stand at arms
length as in ordinary transactions. An imperative duty is on the druggist to take precautions to prevent death or serious
injury to anyone who relies on his absolute honesty and peculiar leaning. The nature of drugs is such that examination
would not avail the purchaser anything. It would be idle mockery for the customer to make an examination of a
compound of which he can know nothing. Consequently, it must be that the druggist warrants that he will deliver the drug
called for.

In civil cases, the druggist is made liable for any injury approximately resulting from his negligence. If B negligently sells
poison under the guise of a beneficial drug to A, he is liable for the injury done to A. In a case, which has repeatedly been
termed the leading case on the subject and which has been followed by the United States Supreme Court, it was said,
"Pharmacists or apothecaries who compound or sell medicines, if they carelessly label a poison as a harmless medicine,
and sent it so labeled into the market, are liable to all persons who, without fault on their part, are injured by using it as
such medicine, in consequence of the false label; the rule being that the liability in such a case arises not out of any
contract or direct privity between the wrong-doer and the person injured, but out of the duty which the law imposes on
him to avoid acts in their nature dangerous to the lives of others." (Nat. Savings Bank vs. Ward [1879], 100 U. S., 195,
following Thomas vs. Winchester [1852], 2 Seld. [N. Y.], 387.) In reality, for the druggist, mistake is negligence and care is
no defense. Throughout the criminal law, run the same rigorous rules. For example, apothecaries or apothecary clerks,
who are guilty of negligence in the sale of medicine when death ensues in consequence, have been held guilty of
manslaughter. (See Tessymond's Case [1828], 1 Lewin, C. C., 169.)

Bearing these general principles in mind, and remembering particularly the care and skill which are expected of druggist,
that in some jurisdictions they are liable even for their mistake and in others have the burden placed upon them to
establish that they were not negligent, it cannot be that the Philippine Legislature intended to use the word "fraudulent"
in all its strictness. A plea of accident and mistake cannot excuse for they cannot take place unless there be wanton and
criminal carelessness and neglect. How the misfortune occurs is unimportant, if under all the circumstances the fact of
occurrence is attributed to the druggist as a legal fault. Rather considering the responsibility for the quality of drugs
which the law imposes on druggists and the position of the word "fraudulent" in juxtaposition to "name," what is made
unlawful is the giving of a false name to the drug asked for. This view is borne out by Spanish translation, which we are
permitted to consult to explain the English text. In the Spanish "supuesto" is used, and this word is certainly not
synonymous with "fraudulent." The usual badges of fraud, falsify, deception, and injury must be present-but not scienter.

In view of the tremendous an imminent danger to the public from the careless sale of poisons and medicines, we do not
deem it too rigid a rule to hold that the law penalizes any druggist who shall sell one drug for another whether it be
through negligence or mistake.

The judgment of the lower court, sentencing the defendant to pay a fine of P100, with subsidiary imprisonment in case of
insolvency, and to pay the costs, is affirmed with the cost of this instance against the appellant, without prejudice to any
civil action which may be instituted. So ordered.
SPECIAL TORTS

SEA COMMERCIAL COMPANY, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS, JAMANDRE INDUSTRIES,
INC. and TIRSO JAMANDRE, respondents.

DECISION
GONZAGA-REYES, J.:

In this petition for review by certiorari, SEA Commercial Company, Inc. (SEACOM) assails the decision of the Court of
Appeals in CA-G.R. CV NO. 31263 affirming in toto the decision of the Regional Trial Court of Manila, Branch 5, in Civil Case
No. 122391, in favor of Jamandre Industries, Inc. (JII) et al., the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the defendant and against the plaintiff, ordering the plaintiff:

1) To pay defendant the sum of P66,156.15 (minus 18,843.85) with legal interest thereon, from the date of the filing of the
counterclaim until fully paid;

2) To pay defendant P2,000.00 as moral and exemplary damages;

3) To pay attorneys fees in the sum of P10,000.00; and

4) To pay the costs of this suit.

SO ORDERED.

SEACOM is a corporation engaged in the business of selling and distributing agricultural machinery, products and
equipment. On September 20, 1966, SEACOM and JII entered into a dealership agreement whereby SEACOM appointed JII
as its exclusive dealer in the City and Province of Iloilo[1] Tirso Jamandre executed a suretyship agreement binding himself
jointly and severally with JII to pay for all obligations of JII to SEACOM[2]. The agreement was subsequently amended to
include Capiz in the territorial coverage and to make the dealership agreement on a non-exclusive basis[3]. In the course of
the business relationship arising from the dealership agreement, JII allegedly incurred a balance of P18,843.85 for unpaid
deliveries, and SEACOM brought action to recover said amount plus interest and attorneys fees.
JII filed an Answer denying the obligation and interposing a counterclaim for damages representing unrealized
profits when JII sold to the Farm System Development Corporation (FSDC) twenty one (21) units of Mitsubishi power
tillers. In the counterclaim, JII alleged that as a dealer in Capiz, JII contracted to sell in 1977 twenty-four (24) units of
Mitsubishi power tillers to a group of farmers to be financed by said corporation, which fact JII allegedly made known to
petitioner, but the latter taking advantage of said information and in bad faith, went directly to FSDC and dealt with it and
sold twenty one (21) units of said tractors, thereby depriving JII of unrealized profit of eighty-five thousand four hundred
fifteen and 61/100 pesos (P85,415.61).
The trial court rendered its decision on January 24, 1990 ordering JII to pay SEACOM the amount of Eighteen
Thousand Eight Hundred Forty Three and 85/100 (P18,843.85) representing its outstanding obligation. The trial court
likewise granted JIIs counterclaim for unrealized profits, and for moral and exemplary damages and attorney fees as
above quoted.
SEACOM appealed the decision on the counterclaim.
The Court of Appeals held that while there exists no agency relationship between SEACOM and JII, SEACOM is liable
for damages and unrealized profits to JII.

This Court, however, is convinced that with or without the existence of an agency relationship between appellant
SEACOM and appellee JII and notwithstanding the error committed by the lower court in finding that an agency
relationship existed between appellant and defendant corporation the former is liable for the unrealized profits which the
latter could have gained had not appellant unjustly stepped in and in bad faith unethically intervened.

It should be emphasized that the very purpose of the dealership agreement is for SEACOM to have JII as its dealer to sell
its products in the provinces of Capiz and Iloilo. In view of this agreement, the second assigned error that the lower court
erred in holding that appellant learned of the FSDC transaction from defendant JII is clearly immaterial and devoid of
merit. The fact that the dealership is on a non-exclusive basis does not entitle appellant SEACOM to join the fray as against
its dealer. To do so, is to violate the norms of conduct enjoined by Art. 19 of the Civil Code. By virtue of such agreement,
the competition in the market as regards the sale of farm equipment shall be between JII, as the dealer of SEACOM and
other companies, not as against SEACOM itself. However, SEACOM, not satisfied with the presence of its dealer JII in the
market, joined the competition even as the against the latter and, therefore, changed the scenario of the competition
thereby rendering inutile the dealership agreement which they entered into the manifest prejudice of JII. Hence, the trial
court was correct when it applied Art. 19 of the Civil Code in the case at bar in that appellant SEACOM acted in bad faith
when it competed with its own dealer as regards the sale of farm machineries, thereby depriving appellee JII of the
opportunity to gain a clear profit of P85,000.00.

and affirmed the judgment appealed from in toto.

Hence this petition for review on certiorari, which submits the following reasons for the allowance thereof:

THE RESPONDENT COURT OF APPEALS DECIDED QUESTIONS OF SUBSTANCE IN A WAY NOT IN ACCORDANCE WITH
LAW AND JURISPRUDENCE, CONSIDERING THAT:

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING THAT PETITIONER IS LIABLE TO PAY DAMAGES
AND UNREALIZED PROFITS TO THE PRIVATE RESPONDENTS DESPITE THE FACT THAT NO AGENCY RELATIONSHIP
EXISTS BETWEEN THEM.

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING THAT PETITIONER ACTED IN BAD FAITH AGAINST
THE PRIVATE RESPONDENT CORPORATION DESPITE THE FACT THAT SAID RULING IS CONTRARY TO THE EVIDENCE
ON RECORD.

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE NON-EXCLUSIVITY CLAUSE IN THE
DEALERSHIP AGREEMENT EXECUTED BETWEEN THE PETITIONER AND PRIVATE RESPONDENT CORPORATION
PRECLUDES THE PETITIONER FROM COMPETING WITH THE PRIVATE RESPONDENT CORPORATION.

THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN RULING THAT PRIVATE RESPONDENT IS ENTITLED TO
UNREALIZED PROFITS, MORAL AND EXEMPLARY DAMAGES AND ATTORNEYS FEES.[4]

Petitioner SEACOM disputes the conclusion of the Court of Appeals that despite the fact that no agency relationship
existed between the parties, the SEACOM is still liable in damages and unrealized profits for the reason that it acted in bad
faith. Petitioner SEACOM invokes the non-exclusivity clause in the dealership agreement and claims that the transaction
with FSDC was concluded pursuant to a public bidding and not on the basis of alleged information it received from private
respondent Tirso Jamandre. Moreover, petitioner SEACOM claims that it did not underprice its products during the public
bidding wherein both SEACOM and JII participated. Petitioner also disputes the award of moral damages to JII which is a
corporation, in the absence of any evidence that the said corporation had a good reputation which was debased.
Private respondents in their comment, contends that the four assigned errors raise mixed questions of fact and law
and are therefore beyond the jurisdiction of the Supreme Court which may take cognizance of only questions of law. The
assigned errors were also refuted to secure affirmance of the appealed decision. JII maintains that the bidding set by FSDC
on March 24, 1997 was scheduled after the demonstration conducted by JII, and after JII informed SEACOM about the
preference of the farmers to buy Mitsubishi tillers. JII further rebuts the SEACOMs contention that the transaction with
FSDC was pursuant to a public bidding with full disclosure to the public and private respondent JII considering that JII had
nothing to do with the list of 37 bidders and cannot be bound by the listing made by SEACOMs employee; moreover, JII
did not participate in the bidding not having been informed about it. Furthermore, the price at which SEACOM sold to
FSDC was lower than the price it gave to JII. Also, even if the dealership agreement was not exclusive, it was breached
when petitioner in bad faith sold directly to FSDC with whom JII had previously offered the subject farm equipment. With
respect to the awards of moral and exemplary damages, JII seeks an affirmation of the ruling of the Court of Appeals
justifying the awards.
SEACOM filed Reply defending the jurisdiction of this Court over the instant petition since the decision of the Court
of Appeals was based on a misapprehension of facts. SEACOM insists that FSDCs purchase was made pursuant to a public
bidding, and even if SEACOM did not participate thereon, JII would not necessarily have closed the deal since thirty seven
(37) bidders participated. SEACOM contends that no evidence was presented to prove that the bidding was a fraudulent
scheme of SEACOM and FSDC. SEACOM further controverts JIIs contention that JII did not take part in the bidding as Tirso
Jamandre was one of the bidders and that SEACOM underpriced its products to entice FSDC to buy directly from it. In fine,
JII is not entitled to the award of unrealized profits and damages.
In its Rejoinder, private respondents insist that there is an agency relationship, citing the evidence showing that
credit memos and not cash vouchers were issued to JII by SEACOM for every delivery from November 26, 1976 to
December 24, 1978. Private respondents maintain that SEACOM torpedoed the emerging deal between JII and FSDC after
being informed about it by JII by dealing directly with FSDC at a lower price and after betraying JII, SEACOM would cover
up the deceit by conniving with FSDC to post up a sham public bidding.
SEACOMs sur-rejoinder contains basically a reiteration of its contention in previous pleadings. Additionally, it is
contended that private respondents are barred from questioning in their Rejoinder, the finding of the Court of Appeals
that there is no agency relationship between the parties since this matter was not raised as error in their comment.
The core issue is whether SEACOM acted in bad faith when it competed with its own dealer as regards the sale of
farm machineries to FSDC.
Both the trial court and the Court of Appeals held affirmatively; the trial court found that JII was an agent of
SEACOM and the act of SEACOM in dealing directly with FSDC was unfair and unjust to its agent, and that there was fraud
in the transaction between FSDC and SEACOM to the prejudice of JII. On the other hand, the Court of Appeals ruled that
there was no agency relationship between the parties but SEACOM is nevertheless liable in damages for having acted in
bad faith when it competed with its own dealer in the sale of the farm machineries to FSDC. Both courts invoke as basis
for the award Article 19 of the Civil Code which reads as follows:

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

The principle of abuse of rights stated in the above article, departs from the classical theory that he who uses a right
injures no one. The modern tendency is to depart from the classical and traditional theory, and to grant indemnity for
damages in cases where there is an abuse of rights, even when the act is not illicit. [5]
Article 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.[6] If mere fault or
negligence in ones acts can make him liable for damages for injury caused thereby, with more reason should abuse or bad
faith make him liable. The absence of good faith is essential to abuse of right. Good faith is an honest intention to abstain
from taking any unconscientious advantage of another, even through the forms or technicalities of the law, together with
an absence of all information or belief of fact which would render the transaction unconscientious. In business relations, it
means good faith as understood by men of affairs.[7]
While Article 19 may have been intended as a mere declaration of principle[8], the cardinal law on human conduct
expressed in said article has given rise to certain rules, e.g. that where a person exercises his rights but does so arbitrarily
or unjustly or performs his duties in a manner that is not in keeping with honesty and good faith, he opens himself to
liability.[9] The elements of an abuse of rights under Article 19 are: (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.[10]
The issue whether JII is entitled to recovery on its counterclaim for unrealized profit in the twenty one (21) units of
Mitsubishi power tillers sold by SEACOM to FSDC was resolved by the trial court in favor of JII on the basis of
documentary evidence[11] showing that (1) JII has informed SEACOM as early as February 1977 of the promotions
undertaken by JII for the sale of 24 contracted units to FSDC and in connection therewith, requested a 50% discount to
make the price competitive, and to increase the warranty period for eight months to one year. In said letter Jamandre
clarified that they were not amenable to SEACOMs offering directly to FSDC and to be only given the usual overriding
commission as we have considerable investments on this transaction. (2) In response, the general sales manager of
SEACOM declined to give the requested 50% discount and offered a less 30% less 10% up to end March xxx on cash
before delivery basis, granted the requested extension of the warranty period and stated that we are glad to note that you
have quite a number of units pending with the FSDC.
 The trial court ruled that with said information, SEACOM dealt directly with FSDC and offered its units at a lower
price, leaving FSDC no choice but to accept the said offer of (SEACOM).
In affirming the judgment of the of the trial court, the Court of Appeals held that by virtue of the dealership
agreement the competition in the market as regards the sale of farm equipment shall be between JII, as the dealer of
SEACOM, and other companies, not as against SEACOM itself, the Court stated:

However, SEACOM not satisfied with the presence of its dealer JII in the market, joined the competition even as against
the latter, and thereby changed the scenario of the competition thereby rendering inutile the dealership agreement which
they entered into to the manifest prejudice of JII. Hence the trial court trial court was correct when it applied Art. 19 of the
Civil Code in the case at bar in that appellant SEACOM acted in bad faith when it competed with its own dealer as regards
the sale of farm machineries, thereby depriving appellee JII of the opportunity to gain a clear profit of P85,000.00.

We find no cogent reason to overturn the factual finding of the two courts that SEACOM joined the bidding for the
sale of the farm equipment after it was informed that JII was already promoting the sales of said equipment to the
FSDC. Moreover, the conclusion of the trial court that the SEACOM offered FSDC a lower price than the price offered by JII
to FSDC is supported by the evidence: the price offered by JII to FSDC is P27,167 per unit[12] but the prices at which
SEACOM sold to FSDC were at P22,867.00 for Model CT 83-2, P21,093.50 for model CT 83-E, and P18,979.25 for model CT
534. The fact that SEACOM may have offered to JII, in lieu of a requested 50% discount, a discount effectively translating
to 37% of the list price and actually sold to FSDC at 35% less than the list price [13] does not detract from the fact that by
participating in the bidding of FSDC, it actually competed with its own dealer who had earlier conducted demonstrations
and promoted its own products for the sale of the very same equipment, Exh. N for the plaintiff confirms that both
SEACOM and Jamandre participated in the bidding.[14] However, the SEACOM was awarded the contract directly from
Manila.[15] The testimony of Tirso Jamandre that JII was the sole representative of SEACOM in the local demonstrations to
convince the farmers and cooperative officers to accept the Mitsubishi brand of equipment in preference to other brands,
was unrebutted by SEACOM.
Clearly, the bad faith of SEACOM was established. By appointing as a dealer of its agricultural equipment, SEACOM
recognized the role and undertaking of JII to promote and sell said equipment.Under the dealership agreement, JII was to
act as a middleman to sell SEACOMs products, in its area of operations, i.e. Iloilo and Capiz provinces, to the exclusion of
other places,[16] to send its men to Manila for training on repair, servicing and installation of the items to be handled by it,
and to comply with other personnel and vehicle requirements intended for the benefit of the dealership.[17] After being
informed of the demonstrations JII had conducted to promote the sales of SEACOM equipment, including the operations at
JIIs expense conducted for five months, and the approval of its facilities (service and parts) by FSDC, [18] SEACOM
participated in the bidding for the said equipment at a lower price, placing itself in direct competition with its own
dealer. The actuations of SEACOM are tainted by bad faith.
Even if the dealership agreement was amended to make it on a non-exclusive basis,[19] SEACOM may not exercise its
right unjustly or in a manner that is not in keeping with honesty or good faith; otherwise it opens itself to liability under
the abuse of right rule embodied in Article 19 of the Civil Code above-quoted. This provision, together with the succeeding
article on human relation, was intended to embody certain basic principles that are to be observed for the rightful
relationship between human beings and for the stability of the social order.[20] What is sought to be written into the law is
the pervading principle of equity and justice above strict legalism.[21]
We accordingly resolve to affirm the award for unrealized profits. The Court of Appeals noted that the trial court
failed to specify to which the two appellees the award for moral and exemplary damages is granted. However, in view of
the fact that moral damages are not as a general rule granted to a corporation, and that Tirso Jamandre was the one who
testified on his feeling very aggrieved and on his mental anguish and sleepless nights thinking of how SEACOM dealt with
us behind (our) backs,[22] the award should go to defendant Jamandre, President of JII.
WHEREFORE, the judgment appealed from is AFFIRMED with the modification that the award of P2,000.00 in moral
and exemplary damages shall be paid to defendant Tirso Jamandre.
Costs against appellant.
SO ORDERED.

G.R. No. 88694 January 11, 1993

ALBENSON ENTERPRISES CORP., JESSE YAP, AND BENJAMIN MENDIONA, petitioners,

vs.
THE COURT OF APPEALS AND EUGENIO S. BALTAO, respondents.
Puruganan, Chato, Chato & Tan for petitioners.

Lino M. Patajo, Francisco Ma. Chanco, Ananiano Desierto and Segundo Mangohig for private respondent.

BIDIN, J.:

This petition assails the decision of respondent Court of Appeals in

CA-GR CV No. 14948 entitled "Eugenio S. Baltao, plaintiff-appellee vs. Albenson Enterprises Corporation, et al, defendants-
appellants", which modified the judgment of the Regional Trial Court of Quezon City, Branch XCVIII in Civil Case No. Q-
40920 and ordered petitioner to pay private respondent, among others, the sum of P500,000.00 as moral damages and
attorney's fees in the amount of P50,000.00.

The facts are not disputed.

In September, October, and November 1980, petitioner Albenson Enterprises Corporation (Albenson for short) delivered
to Guaranteed Industries, Inc. (Guaranteed for short) located at 3267 V. Mapa Street, Sta. Mesa, Manila, the mild steel
plates which the latter ordered. As part payment thereof, Albenson was given Pacific Banking Corporation Check No.
136361 in the amount of P2,575.00 and drawn against the account of E.L. Woodworks (Rollo, p. 148).

When presented for payment, the check was dishonored for the reason "Account Closed." Thereafter, petitioner Albenson,
through counsel, traced the origin of the dishonored check. From the records of the Securities and Exchange Commission
(SEC), Albenson discovered that the president of Guaranteed, the recipient of the unpaid mild steel plates, was one
"Eugenio S. Baltao." Upon further inquiry, Albenson was informed by the Ministry of Trade and Industry that E.L.
Woodworks, a single proprietorship business, was registered in the name of one "Eugenio Baltao". In addition, upon
verification with the drawee bank, Pacific Banking Corporation, Albenson was advised that the signature appearing on the
subject check belonged to one "Eugenio Baltao."

After obtaining the foregoing information, Albenson, through counsel, made an extrajudicial demand upon private
respondent Eugenio S. Baltao, president of Guaranteed, to replace and/or make good the dishonored check.

Respondent Baltao, through counsel, denied that he issued the check, or that the signature appearing thereon is his. He
further alleged that Guaranteed was a defunct entity and hence, could not have transacted business with Albenson.

On February 14, 1983, Albenson filed with the Office of the Provincial Fiscal of Rizal a complaint against Eugenio S. Baltao
for violation of Batas Pambansa Bilang 22. Submitted to support said charges was an affidavit of petitioner Benjamin
Mendiona, an employee of Albenson. In said affidavit, the above-mentioned circumstances were stated.

It appears, however, that private respondent has a namesake, his son Eugenio Baltao III, who manages a business
establishment, E.L. Woodworks, on the ground floor of the Baltao Building, 3267 V. Mapa Street, Sta. Mesa, Manila, the
very same business address of Guaranteed.

On September 5, 1983, Assistant Fiscal Ricardo Sumaway filed an information against Eugenio S. Baltao for Violation of
Batas Pambansa Bilang 22. In filing said information, Fiscal Sumaway claimed that he had given Eugenio S. Baltao
opportunity to submit controverting evidence, but the latter failed to do so and therefore, was deemed to have waived his
right.

Respondent Baltao, claiming ignorance of the complaint against him, immediately filed with the Provincial Fiscal of Rizal a
motion for reinvestigation, alleging that it was not true that he had been given an opportunity to be heard in the
preliminary investigation conducted by Fiscal Sumaway, and that he never had any dealings with Albenson or Benjamin
Mendiona, consequently, the check for which he has been accused of having issued without funds was not issued by him
and the signature in said check was not his.

On January 30, 1984, Provincial Fiscal Mauro M. Castro of Rizal reversed the finding of Fiscal Sumaway and exonerated
respondent Baltao. He also instructed the Trial Fiscal to move for dismissal of the information filed against Eugenio S.
Baltao. Fiscal Castro found that the signature in PBC Check No. 136361 is not the signature of Eugenio S. Baltao. He also
found that there is no showing in the records of the preliminary investigation that Eugenio S. Baltao actually received
notice of the said investigation. Fiscal Castro then castigated Fiscal Sumaway for failing to exercise care and prudence in
the performance of his duties, thereby causing injustice to respondent who was not properly notified of the complaint
against him and of the requirement to submit his counter evidence.

Because of the alleged unjust filing of a criminal case against him for allegedly issuing a check which bounced in violation
of Batas Pambansa Bilang 22 for a measly amount of P2,575.00, respondent Baltao filed before the Regional Trial Court of
Quezon City a complaint for damages against herein petitioners Albenson Enterprises, Jesse Yap, its owner, and Benjamin
Mendiona, its employee.

In its decision, the lower court observed that "the check is drawn against the account of "E.L. Woodworks," not of
Guaranteed Industries of which plaintiff used to be President. Guaranteed Industries had been inactive and had ceased to
exist as a corporation since 1975. . . . . The possibility is that it was with Gene Baltao or Eugenio Baltao III, a son of plaintiff
who had a business on the ground floor of Baltao Building located on V. Mapa Street, that the defendants may have been
dealing with . . . ." (Rollo, pp. 41-42).

The dispositive portion of the trial court 's decision reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendants ordering the
latter to pay plaintiff jointly and severally:

1. actual or compensatory damages of P133,350.00;

2. moral damages of P1,000,000.00 (1 million pesos);

3. exemplary damages of P200,000.00;

4. attorney's fees of P100,000.00;

5 costs.

Defendants' counterclaim against plaintiff and claim for damages against Mercantile Insurance Co. on
the bond for the issuance of the writ of attachment at the instance of plaintiff are hereby dismissed for
lack of merit. (Rollo, pp. 38-39).

On appeal, respondent court modified the trial court's decision as follows:

WHEREFORE, the decision appealed from is MODIFIED by reducing the moral damages awarded
therein from P1,000,000.00 to P500,000.00 and the attorney's fees from P100,000.00 to P50,000.00,
said decision being hereby affirmed in all its other aspects. With costs against appellants. (Rollo, pp. 50-
51)

Dissatisfied with the above ruling, petitioners Albenson Enterprises Corp., Jesse Yap, and Benjamin Mendiona filed the
instant Petition, alleging that the appellate court erred in:

1. Concluding that private respondent's cause of action is not one based on malicious prosecution but
one for abuse of rights under Article 21 of the Civil Code notwithstanding the fact that the basis of a
civil action for malicious prosecution is Article 2219 in relation to Article 21 or Article 2176 of the Civil
Code . . . .

2. Concluding that "hitting at and in effect maligning (private respondent) with an unjust criminal case
was, without more, a plain case of abuse of rights by misdirection" and "was therefore, actionable by
itself," and which "became inordinately blatant and grossly aggravated when . . . (private respondent)
was deprived of his basic right to notice and a fair hearing in the so-called preliminary investigation . . .
."
 3. Concluding that petitioner's "actuations in this case were coldly deliberate and calculated", no
evidence having been adduced to support such a sweeping statement.

4. Holding the petitioner corporation, petitioner Yap and petitioner Mendiona jointly and severally
liable without sufficient basis in law and in fact.

5. Awarding respondents

5.1. P133,350.00 as actual or compensatory damages, even in the absence of

sufficient evidence to show that such was actually suffered.

5.2. P500,000.00 as moral damages considering that the evidence in this connection
merely involved private respondent's alleged celebrated status as a businessman,
there being no showing that the act complained of adversely affected private
respondent's reputation or that it resulted to material loss.

5.3. P200,000.00 as exemplary damages despite the fact that petitioners were duly
advised by counsel of their legal recourse.

5.4. P50,000.00 as attorney's fees, no evidence having been adduced to justify such
an award (Rollo, pp. 4-6).

Petitioners contend that the civil case filed in the lower court was one for malicious prosecution. Citing the case of Madera
vs. Lopez (102 SCRA 700 [1981]), they assert that the absence of malice on their part absolves them from any liability for
malicious prosecution. Private respondent, on the other hand, anchored his complaint for Damages on Articles 19, 20, and
21 ** of the Civil Code.

Article 19, known to contain what is commonly referred to as the principle of abuse of rights, sets certain standards which
may be observed not only in the exercise of one's rights but also in the performance of one's duties. These standards are
the following: to act with justice; to give everyone his due; and to observe honesty and good faith. The law, therefore,
recognizes the primordial limitation on all rights: that in their exercise, the norms of human conduct set forth in Article 19
must be observed. A right, though by itself legal because recognized or granted by law as such, may nevertheless become
the source of some illegality. When a right is exercised in a manner which does not conform with the norms enshrined in
Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be held
responsible. Although the requirements of each provision is different, these three (3) articles are all related to each other.
As the eminent Civilist Senator Arturo Tolentino puts it: "With this article (Article 21), combined with articles 19 and 20,
the scope of our law on civil wrongs has been very greatly broadened; it has become much more supple and adaptable
than the Anglo-American law on torts. It is now difficult to conceive of any malevolent exercise of a right which could not
be checked by the application of these articles" (Tolentino, 1 Civil Code of the Philippines 72).

There is however, no hard and fast rule which can be applied to determine whether or not the principle of abuse of rights
may be invoked. The question of whether or not the principle of abuse of rights has been violated, resulting in damages
under Articles 20 and 21 or other applicable provision of law, depends on the circumstances of each case. (Globe Mackay
Cable and Radio Corporation vs. Court of Appeals, 176 SCRA 778 [1989]).

The elements of an abuse of right under Article 19 are the following: (1) There is a legal right or duty; (2) which is
exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Article 20 speaks of the general sanction
for all other provisions of law which do not especially provide for their own sanction (Tolentino, supra, p. 71). Thus,
anyone who, whether willfully or negligently, in the exercise of his legal right or duty, causes damage to another, shall
indemnify his victim for injuries suffered thereby. Article 21 deals with acts contra bonus mores, and has the following
elements: 1) There is an act which is legal; 2) but which is contrary to morals, good custom, public order, or public policy;
3) and it is done with intent to injure.

Thus, under any of these three (3) provisions of law, an act which causes injury to another may be made the basis for an
award of damages.
There is a common element under Articles 19 and 21, and that is, the act must be intentional. However, Article 20 does
not distinguish: the act may be done either "willfully", or "negligently". The trial court as well as the respondent appellate
court mistakenly lumped these three (3) articles together, and cited the same as the bases for the award of damages in the
civil complaint filed against petitioners, thus:

With the foregoing legal provisions (Articles 19, 20, and 21) in focus, there is not much difficulty in
ascertaining the means by which appellants' first assigned error should be resolved, given the admitted
fact that when there was an attempt to collect the amount of P2,575.00, the defendants were explicitly
warned that plaintiff Eugenio S. Baltao is not the Eugenio Baltao defendants had been dealing with
(supra, p. 5). When the defendants nevertheless insisted and persisted in filing a case a criminal case
no less against plaintiff, said defendants ran afoul of the legal provisions (Articles 19, 20, and 21 of
the Civil Code) cited by the lower court and heretofore quoted (supra).

Defendants, not having been paid the amount of P2,575.00, certainly had the right to complain. But that
right is limited by certain constraints. Beyond that limit is the area of excess, of abuse of rights. (Rollo,
pp.
44-45).

Assuming, arguendo, that all the three (3) articles, together and not independently of each one, could be validly made the
bases for an award of damages based on the principle of "abuse of right", under the circumstances, We see no cogent
reason for such an award of damages to be made in favor of private respondent.

Certainly, petitioners could not be said to have violated the aforestated principle of abuse of right. What prompted
petitioners to file the case for violation of Batas Pambansa Bilang 22 against private respondent was their failure to collect
the amount of P2,575.00 due on a bounced check which they honestly believed was issued to them by private respondent.
Petitioners had conducted inquiries regarding the origin of the check, and yielded the following results: from the records
of the Securities and Exchange Commission, it was discovered that the President of Guaranteed (the recipient of the
unpaid mild steel plates), was one "Eugenio S. Baltao"; an inquiry with the Ministry of Trade and Industry revealed that
E.L. Woodworks, against whose account the check was drawn, was registered in the name of one "Eugenio Baltao";
verification with the drawee bank, the Pacific Banking Corporation, revealed that the signature appearing on the check
belonged to one "Eugenio Baltao".

In a letter dated December 16, 1983, counsel for petitioners wrote private respondent demanding that he make good the
amount of the check. Counsel for private respondent wrote back and denied, among others, that private respondent ever
transacted business with Albenson Enterprises Corporation; that he ever issued the check in question. Private
respondent's counsel even went further: he made a warning to defendants to check the veracity of their claim. It is pivotal
to note at this juncture that in this same letter, if indeed private respondent wanted to clear himself from the baseless
accusation made against his person, he should have made mention of the fact that there are three (3) persons with the
same name, i.e.: Eugenio Baltao, Sr., Eugenio S. Baltao, Jr. (private respondent), and Eugenio Baltao III (private
respondent's son, who as it turned out later, was the issuer of the check). He, however, failed to do this. The last two
Baltaos were doing business in the same building Baltao Building located at 3267 V. Mapa Street, Sta. Mesa, Manila.
The mild steel plates were ordered in the name of Guaranteed of which respondent Eugenio S. Baltao is the president and
delivered to Guaranteed at Baltao building. Thus, petitioners had every reason to believe that the Eugenio Baltao who
issued the bouncing check is respondent Eugenio S. Baltao when their counsel wrote respondent to make good the
amount of the check and upon refusal, filed the complaint for violation of BP Blg. 22.

Private respondent, however, did nothing to clarify the case of mistaken identity at first hand. Instead, private respondent
waited in ambush and thereafter pounced on the hapless petitioners at a time he thought was propitious by filing an
action for damages. The Court will not countenance this devious scheme.

The criminal complaint filed against private respondent after the latter refused to make good the amount of the bouncing
check despite demand was a sincere attempt on the part of petitioners to find the best possible means by which they
could collect the sum of money due them. A person who has not been paid an obligation owed to him will naturally seek
ways to compel the debtor to pay him. It was normal for petitioners to find means to make the issuer of the check pay the
amount thereof. In the absence of a wrongful act or omission or of fraud or bad faith, moral damages cannot be awarded
and that the adverse result of an action does not per se make the action wrongful and subject the actor to the payment of
damages, for the law could not have meant to impose a penalty on the right to litigate (Rubio vs. Court of Appeals, 141
SCRA 488 [1986]).
In the case at bar, private respondent does not deny that the mild steel plates were ordered by and delivered to
Guaranteed at Baltao building and as part payment thereof, the bouncing check was issued by one Eugenio Baltao. Neither
had private respondent conveyed to petitioner that there are two Eugenio Baltaos conducting business in the same
building he and his son Eugenio Baltao III. Considering that Guaranteed, which received the goods in payment of which
the bouncing check was issued is owned by respondent, petitioner acted in good faith and probable cause in filing the
complaint before the provincial fiscal.

To constitute malicious prosecution, there must be proof that the prosecution was prompted by a sinister design to vex
and humiliate a person, and that it was initiated deliberately by the defendant knowing that his charges were false and
groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for
malicious prosecution. (Manila Gas Corporation vs. Court of Appeals, 100 SCRA 602 [1980]). Still, private respondent
argues that liability under Articles 19, 20, and 21 of the Civil Code is so encompassing that it likewise includes liability for
damages for malicious prosecution under Article 2219 (8). True, a civil action for damages for malicious prosecution is
allowed under the New Civil Code, more specifically Articles 19, 20, 26, 29, 32, 33, 35, and 2219 (8) thereof. In order that
such a case can prosper, however, the following three (3) elements must be present, to wit: (1) The fact of the prosecution
and the further fact that the defendant was himself the prosecutor, and that the action was finally terminated with an
acquittal; (2) That in bringing the action, the prosecutor acted without probable cause; (3) The prosecutor was actuated
or impelled by legal malice (Lao vs. Court of Appeals, 199 SCRA 58, [1991]).

Thus, a party injured by the filing of a court case against him, even if he is later on absolved, may file a case for damages
grounded either on the principle of abuse of rights, or on malicious prosecution. As earlier stated, a complaint for
damages based on malicious prosecution will prosper only if the three (3) elements aforecited are shown to exist. In the
case at bar, the second and third elements were not shown to exist. It is well-settled that one cannot be held liable for
maliciously instituting a prosecution where one has acted with probable cause. "Probable cause is the existence of such
facts and circumstances as would excite the belief, in a reasonable mind, acting on the facts within the knowledge of the
prosecutor, that the person charged was guilty of the crime for which he was prosecuted. In other words, a suit will lie
only in cases where a legal prosecution has been carried on without probable cause. The reason for this rule is that it
would be a very great discouragement to public justice, if prosecutors, who had tolerable ground of suspicion, were liable
to be sued at law when their indictment miscarried" (Que vs. Intermediate Appellate Court, 169 SCRA 137 [1989]).

The presence of probable cause signifies, as a legal consequence, the absence of malice. In the instant case, it is evident
that petitioners were not motivated by malicious intent or by sinister design to unduly harass private respondent, but
only by a well-founded anxiety to protect their rights when they filed the criminal complaint against private respondent.

To constitute malicious prosecution, there must be proof that the prosecution was prompted by a
sinister design to vex and humiliate a person, that it was initiated deliberately by the defendant
knowing that his charges were false and groundless. Concededly, the mere act of submitting a case to
the authorities for prosecution does not make one liable for malicious prosecution. Proof and motive
that the institution of the action was prompted by a sinister design to vex and humiliate a person must
be clearly and preponderantly established to entitle the victims to damages (Ibid.).

In the case at bar, there is no proof of a sinister design on the part of petitioners to vex or humiliate private respondent by
instituting the criminal case against him. While petitioners may have been negligent to some extent in determining the
liability of private respondent for the dishonored check, the same is not so gross or reckless as to amount to bad faith
warranting an award of damages.

The root of the controversy in this case is founded on a case of mistaken identity. It is possible that with a more assiduous
investigation, petitioners would have eventually discovered that private respondent Eugenio S. Baltao is not the "Eugenio
Baltao" responsible for the dishonored check. However, the record shows that petitioners did exert considerable effort in
order to determine the liability of private respondent. Their investigation pointed to private respondent as the "Eugenio
Baltao" who issued and signed the dishonored check as the president of the debtor-corporation Guaranteed Enterprises.
Their error in proceeding against the wrong individual was obviously in the nature of an innocent mistake, and cannot be
characterized as having been committed in bad faith. This error could have been discovered if respondent had submitted
his counter-affidavit before investigating fiscal Sumaway and was immediately rectified by Provincial Fiscal Mauro Castro
upon discovery thereof, i.e., during the reinvestigation resulting in the dismissal of the complaint.

Furthermore, the adverse result of an action does not per se make the act wrongful and subject the actor to the payment of
moral damages. The law could not have meant to impose a penalty on the right to litigate, such right is so precious that
moral damages may not be charged on those who may even exercise it erroneously. And an adverse decision does not ipso
facto justify the award of attorney's fees to the winning party (Garcia vs. Gonzales, 183 SCRA 72 [1990]).

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

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

Actual and compensatory damages are those recoverable because of pecuniary loss in business, trade, property,
profession, job or occupation and the same must be proved, otherwise, if the proof is flimsy and unsubstantiated, no
damages will be given (Rubio vs. Court of Appeals, 141 SCRA 488 [1986]). For these reasons, it was gravely erroneous for
respondent court to have affirmed the award of actual damages in favor of private respondent in the absence of proof
thereof.

Where there is no evidence of the other party having acted in wanton, fraudulent or reckless, or oppressive manner,
neither may exemplary damages be awarded (Dee Hua Liong Electrical Equipment Corporation vs. Reyes, 145 SCRA 488
[1986]).

As to the award of attorney's fees, it is well-settled that the same is the exception rather than the general rule. Needless to
say, the award of attorney's fees must be disallowed where the award of exemplary damages is eliminated (Article 2208,
Civil Code; Agustin vs. Court of Appeals, 186 SCRA 375 [1990]). Moreover, in view of the fact that there was no malicious
prosecution against private respondent, attorney's fees cannot be awarded him on that ground.

In the final analysis, there is no proof or showing that petitioners acted maliciously or in bad faith in the filing of the case
against private respondent. Consequently, in the absence of proof of fraud and bad faith committed by petitioners, they
cannot be held liable for damages (Escritor, Jr. vs. Intermediate Appellate Court, 155 SCRA 577 [1987]). No damages can
be awarded in the instant case, whether based on the principle of abuse of rights, or for malicious prosecution. The
questioned judgment in the instant case attests to the propensity of trial judges to award damages without basis. Lower
courts are hereby cautioned anew against awarding unconscionable sums as damages without bases therefor.

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

SO ORDERED.

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS, ELPIDIO O. CUCIO, SPOUSES
JACINTO GOTANGCO and CHARITY BANTUG,[1] respondents.

DECISION
CALLEJO, SR., J.:

This is a petition for review on certiorari of the Decision[2] of the Court of Appeals (CA) in CA-G.R. CV No. 37873
which affirmed, with modification, the Decision[3] of the Regional Trial Court (RTC) of Palayan City, Branch 40, in Civil
Case No. 0061-P.
The Spouses Jacinto Gotangco and Charity Bantug were the owners of seven parcels of land located in Palayan City,
with a total area of 21,000 square meters, covered by Transfer Certificates of Title (TCT) Nos. NT-166092 to NT-166098.
The Spouses Gotangco were also the awardees of a parcel of land, identified as Lot No. 168, NG-130 (Pls-378), located in
Canaderia, Palayan City, per Order of the Director of the Bureau of Lands dated February 22, 1961. The Spouses Gotangco
declared Lot No. 168 for taxation purposes under Tax Declaration (TD) No. 0502 in 1980.
 On August 22, 1980, the Spouses Gotangco secured a loan for their poultry project in Palayan City from the
Development Bank of the Philippines (DBP) in the amount of P121,400.00. They then executed a real estate mortgage
over the parcels of land.[4]
On December 16, 1981, the Spouses Gotangco executed a Deed of Undertaking [5] wherein they obliged themselves to
secure a sales patent in their favor from the Bureau of Lands over Lot No. 168 covered by TD No. 0502 within two (2)
years from the execution thereof. They also undertook to deliver to the DBP the owners duplicate of the certificate of title
over the property for the annotation of the real estate mortgage in favor of DBP at the dorsal portion thereof.[6]
On July 17, 1982, the Spouses Gotangco, as vendors, executed in favor of Elpidio O. Cucio a contract to sell over the
seven parcels of land mortgaged to DBP for P50,000.00, payable in two installments. The parties agreed that the said
amount shall be paid directly to DBP and applied to the mortgage indebtedness of the Spouses Gotangco and that, upon
full payment of the purchase price, the Spouses shall execute a deed of sale over the said parcels of land in favor of
Cucio.[7] The contract to sell was known to DBP.
Thereafter, Cucio made the following remittances to DBP in payment of the purchase price of the seven parcels of
land: (a) P16,000.00 per Official Receipt (OR) No. 2418258 dated January 13, 1983; and (b) P5,000.00. The DBP
considered the remittances as deposits and issued OR No. 2792644 dated February 18, 1983 to Cucio for the total amount
of P21,000.00. The DBP informed Jacinto Gotangco, on February 18, 1983, of the said remittances made by Cucio. [8] It also
requested the Spouses Gotangco to turn over the owners copy of the title over the property covered by TD No. 0502 so
that it could effect the substitution of the seven (7) parcels of land mortgaged by the Spouses Gotangco for the said lot.
Subsequently, the Spouses Gotangco were able to secure a sales patent over the parcel of land covered by TD No.
0502, on the basis of which TCT No. NT-177647 was issued by the Register of Deeds on March 23, 1983. Conformably to
the request of DBP, the Spouses Gotangco turned over the owners duplicate of TCT No. NT-177647, and the mortgage
executed in favor of DBP was duly annotated at the back of the said title. DBP kept the owners copies of TCT Nos. NT-
166092 to NT-166098 and TCT No. NT-177647.
On July 23, 1983, Jacinto Gotangco remitted the total amount of P57,097.36 to DBP in partial payment of his loan
account for which DBP issued OR Nos. 324501 to 324504.[9] In 1984, Cucio paid the balance of the purchase price of the
seven parcels of land to DBP.
In the meantime, the Spouses Gotangco applied for a restructuring of their loan with the DBP which was, thereafter,
approved. In a Letter dated October 14, 1983, the DBP informed Cucio of the approval of the restructuring of the loan of
the Spouses Gotangco and requested him to complete the downpayment of the purchase price of the seven (7) parcels of
land so that the appropriate substitution of the property covered by TCT No. NT-177647, in lieu of the seven (7) other
properties issued by the said Spouses as collateral for their loan, could be effected, and the appropriate deed of absolute
sale over TCT Nos. NT-166092 to NT-166098 could then be executed by the said Spouses in favor of Cucio. [10] As such,
Cucio paid the balance of the purchase price of the said lots to DBP on October 1, 1984.[11]
On July 3, 1988, the poultry farm of the Spouses Gotangco and the improvements thereon were gutted by fire.
On December 6, 1988, the DBP Pool of Accredited Insurance Companies informed the DBP that it had offered to
settle the claim of the Spouses Gotangco for the proceeds of the insurance on their poultry farm for P167,149.14.[12] The
Spouses apparently did not respond.
On February 20, 1989, the DBP wrote the Spouses Gotangco demanding payment of the balance of their loan in the
amount of P408,026.96 within ten (10) days from notice thereof. However, the Spouses failed to respond or pay their
account with the DBP.
By September 30, 1989, the outstanding account of the Spouses Gotangco on the DBP or the principal of their loan
account amounted to P246,183.74.[13] The DBP then wrote the Spouses Gotangco reminding them that their loan would
mature on June 30, 1991.
Cucio then filed a complaint against the Spouses Gotangco and the DBP with the RTC of Palayan City for injunction
and damages. Cucio alleged, inter alia, that despite his payment of the full purchase price of the seven (7) parcels of land
covered by TCT Nos. NT-166092 to NT-166098 and his demands for the turnover of the owners duplicates of the said title
to the Spouses Gotangco, the DBP refused to do so. He further alleged that the DBP even demanded the payment of the
interest on the loan account of the Spouses Gotangco. Furthermore, the Spouses Gotangco refused to execute a deed of
absolute sale of the said parcels of land in his favor. Cucio prayed that, after due proceedings, judgment be rendered in his
favor, thus:

WHEREFORE, it is respectfully prayed that a Writ of Preliminary Mandatory Injunction be issued ordering defendants
Jacinto Gotangco and Charity Bantug to execute the final Deed of Sale over TCT Nos. NT-166092, NT-166093, NT-166094,
NT-166095, NT-166096, NT-166097 and NT-166098 and to submit additional collaterals to the Development Bank of the
Philippines (DBP) and the DBP to release the owners copies of said titles from its possession and deliver them to plaintiff.

After hearing, making the preliminary injunction permanent and ordering the defendants, jointly and severally, to pay
plaintiff moral damages, the amount of which is left to the sound discretion of the Honorable Court; actual damages
of P50,000.00; attorneys fee of P30,000.00 and the cost of the suit.

Plaintiff prays for other remedies under the premises.[14]

The Spouses Gotangco filed their answer[15] with counterclaim, alleging that they could not be faulted for their
failure to execute a deed of sale in favor of Cucio over the said parcels of land because the latter did not notify them that
he had already made the complete payment of the P50,000.00 purchase price thereof to DBP. According to the Spouses
Gotangco, considering that the DBP had given its implied consent to the contract to sell over the subject parcels of land, it
was the DBPs obligation to release the titles after complete payment was made, following the submission to it of TCT No.
NT-177647, the substitute collateral for their loan.
In their cross-claim against the DBP, the Spouses Gotangco alleged the following:

24. That on account of non-approval of loan and non-release of collaterals/securities by the DBP, the defendants
Gotangcos were unnecessarily dragged into litigation by the plaintiff where the DBP alone should have been
sued in the first place, for all these, the DBP alone should suffer if ever the Spouses Gotangco will be adjudged
liable to the plaintiff; for all the damages.[16]

The Spouses Gotangco prayed that, after due proceedings, judgment be rendered in their favor, thus:

WHEREFORE, facts and premises considered, it is most respectfully prayed that JUDGMENT BE RENDERED:

1. DISMISSING THE COMPLAINT for lack of cause of action and other grounds stated in the Special and Affirmative
Defenses;

2. ON COUNTERCLAIM, condemning the plaintiff to pay moral damages of P100,000.00, attorneys fees
of P25,000.00, more or less, and litigation expenses of P10,000.00;

3. By way of cross-claim, ordering the other defendant DBP to pay whatever amount the defendants Gotangcos may
suffer in the event they may be adjudged liable to the plaintiff.

GRANTING UNTO THE DEFENDANTS SPOUSES GOTANGCO reliefs and other remedies just and proper under the
premises and the law.[17]

In its answer,[18] the DBP admitted that it charged Cucio interest on the Spouses Gotangcos loan; however, it denied
that it consented to the transaction between the Spouses Gotangco relative to the seven (7) parcels of land claimed by
Cucio. In its answer to the cross-claim,[19] the DBP, likewise, admitted receiving the P50,000.00 purchase price of the
seven parcels of land from Cucio but only as deposit, and agreeing verbally to the release of the properties, but only after
the Spouses Gotangco shall have fulfilled the conditions set forth in the real estate mortgage. It further alleged that the
Spouses Gotangco failed to comply with the said conditions, and that their account remained dormant; hence, it refused to
release the owners duplicate copies of the titles of the properties to the Spouses Gotangco.
While the case was pending, the DBP informed the Spouses Gotangco in a Letter dated February 20, 1990 [20] that it
was going to have the mortgage foreclosed for their failure to settle their account. Jacinto Gotangco arrived at the
Cabanatuan branch office of the DBP to ascertain the balance of his bank account but received no satisfactory answer. But
the DBP sent a letter[21] to the Spouses Gotangco on May 24, 1990, warning them anew that it would institute foreclosure
proceedings for their failure to fulfill their loan obligations which already amounted to P737,474.33 as of April 30, 1990.
On June 8, 1990, the Spouses Gotangco wrote the DBP requesting for an updated statement of their account and the
application of their payments, inclusive of the proceeds of their insurance claims.[22]
On the same date, the DBP filed an application for the extrajudicial foreclosure of the real estate mortgage executed
in its favor by the Spouses Gotangco.[23] Appended to the application was a statement of account of the Spouses. On June 7,
1990, Deputy Sheriff Rubentito Elonia issued a Notice of Sale set on June 28, 1990 to satisfy the obligation of the Spouses
Gotangco to the DBP.[24]
The Spouses Gotangco wrote DBP anew, on June 14, 1990, protesting the foreclosure, claiming that they owed DBP
only the amount of P246,183.74 as of October 31, 1988.[25]However, the DBP was undaunted.
The Spouses Gotangco forthwith filed a petition before the trial court for a writ of preliminary injunction[26] to
enjoin the public auction, alleging that the extrajudicial foreclosure of the real estate in favor of the DBP would render the
decision of the court on the merits moot and academic.[27]
The DBP opposed the motion, contending that the balance of the account of the Spouses Gotangco as of April 30,
1990 was P737,474.33, exclusive of interests and expenses.[28]
The trial court issued a Temporary Restraining Order dated June 26, 1990. After due hearing, the trial court issued
an Order on October 4, 1990, granting the petition of the Spouses Gotangco for a writ of preliminary injunction on a bond
of P50,000.00 pending the resolution of the matters raised in the main case.[29] A writ of preliminary injunction was
issued by the trial court after the Spouses Gotangco posted a bond of P50,000.00. Consequently, the writ was issued on
November 12, 1990.[30]
The trial court issued a subpoena duces tecum to the cashier of the DBP in Cabanatuan City for the production of the
Spouses Gotangcos bank records reflecting the balance of their account. However, the cashier failed to comply. [31] During
the trial, Jacinto Gotangco testified that he suffered mental anguish and serious anxieties because of the threatened
extrajudicial foreclosure of the real estate mortgage in favor of DBP. Charity Gotangco failed to testify. The Spouses also
adduced in evidence the statement of their account from the DBP.[32]
On February 8, 1992, Jacinto Gotangco died intestate and was survived by his wife Charity Bantug Gotangco and
their children, Jojina Ann Gotangco, Jaime Gotangco and Jacinto B. Gotangco, Jr.[33]
On April 14, 1992, the RTC rendered judgment as follows:

WHEREFORE, judgment is hereby rendered:

(1) Ordering DBP to release the owners duplicate certificates of TCT Nos. NT-166092 to NT-166098 to the Gotangcos;

(2) Declaring the owners duplicate certificate TCT No. NT-177647 in the name of the Gotangcos as a replacement thereof
as their collateral to their restructured loan with DBP;

(3) Ordering the Gotangcos to, thereafter, execute a deed of absolute sale covering the properties described in TCT Nos.
NT-166092 to NT-166098 in favor of Cucio;

(4) Declaring the writ of preliminary injunction issued on November 12, 1990, enjoining DBP from foreclosing the
properties of the Gotangcos covered by TCT No. NT-166092 to NT-166098 and TCT No. NT-177647 and from the
scheduled auction sale thereof permanent;

(5) Ordering DBP to pay the Gotangcos the sum of P250,000.00 as moral damages; and

(6) Ordering DBP to pay costs.[34]

The trial court declared that the DBP was legally bound to release the Spouses Gotangcos owners duplicate of the
certificates of title over the seven (7) parcels of land; the latter, in turn, could execute a deed of sale over the property
covered by TCT No. NT-177647 in favor of Cucio. The trial court further ruled that the DBP prematurely sought the
extrajudicial foreclosure of the mortgaged properties considering that as of September 30, 1989, the outstanding loan
balance of the Spouses Gotangco was P246,183.74 with maturity date set on June 30, 1991; and yet the DBP foreclosed
the mortgage extrajudicially for the amount of P737,474.33. It declared that the extrajudicial foreclosure of the mortgage
was evidently made in bad faith and meant to harass the Spouses Gotangco during the pendency of the case. As such,
according to the trial court, the DBP was liable for moral damages to the said Spouses.
On appeal by the DBP, the CA affirmed the decision, but reduced the award of moral damages to P50,000.00.
The fallo of the decision of the CA reads:
WHEREFORE, premises considered, the decision of the Regional Trial Court of Palayan City, Nueva Ecija, Branch 40, in
Civil Case No. 0061-P is AFFIRMED with modifications. Appellant DBP is hereby ordered to release the owners duplicate
certificates of TCT Nos. NT-166092 to NT-166098 to the Gotangcos and the Gotangco spouses to execute the Deed of Sale
in favor of Elpidio O. Cucio who shall cause the annotation of the mortgage in favor of DBP at the back of the new
certificates of title in his name. Appellant DBP is further ordered to pay the amount of P50,000.00 as moral damages to
the Gotangcos. No pronouncement as to costs.[35]

The appellate court modified its decision on motion of the DBP, as follows:

WHEREFORE, premises considered, the decision of the Regional Trial Court of Palayan City, Nueva Ecija, Branch 40, in
Civil Case No. 0061-P, is AFFIRMED with modifications. Appellant DBP is hereby ordered to release the owners duplicate
certificates of TCT Nos. NT-166092 to 166098 to the Gotangcos and the Gotangco spouses to execute the Deed of Sale in
favor of Elpidio O. Cucio who shall cause the annotation of the mortgage in favor of DBP at the back of the new certificates
of title in his name. Thereafter, pursuant to the subsisting mortgage agreements, DBP shall be entitled to the
possession of the new certificates of title until the mortgage indebtedness is fully satisfied. Appellant DBP is further
ordered to pay the amount of P50,000.00 as moral damages to the Gotangcos. No pronouncement as to costs.[36]

The Present Petition

The DBP, now the petitioner, filed the instant petition raising as errors the following:

1. THE PERMANENT INJUNCTION ISSUED BY THE TRIAL COURT AND AFFIRMED BY THE RESPONDENT COURT OF
APPEALS EFFECTIVELY NULLIFIES DBPS MORTGAGE LIEN OVER THE PROPERTIES AND WILL CONTRAVENE THE
MANDATORY PROVISIONS OF P.D. NO. 385.

2. THERE IS NEITHER FACTUAL NOR LEGAL BASIS FOR THE GRANT OF MORAL DAMAGES IN FAVOR OF THE
GOTANGCOS AS AGAINST PETITIONER DBP.[37]

Prefatorily, the issue of whether or not the petitioner caused the extrajudicial foreclosure of the real estate
mortgage to harass the respondents, the Spouses Gotangco, despite the pendency of the case before the trial court, is one
of fact. Under Rule 45 of the Rules of Civil Procedure, only questions of law may be raised in this Court on petition for
review on certiorari. However, the Court may delve into and resolve questions of facts if grave abuse is shown or such
findings are contrary to the evidence on record or are not supported by preponderant evidence. [38]
The petitioner asserts that it had the right to enforce its mortgage lien over the property notwithstanding the
transfer of ownership over the same to a third party. It contends that it had the right to institute foreclosure proceedings,
considering that the respondents Spouses Gotangco failed to comply with the terms of the real estate mortgage executed
in favor of DBP. The petitioner argues that, with the permanent writ of preliminary injunction issued by the trial court
against the petitioner as affirmed by the respondent court, the petitioner is forever barred from foreclosing the properties
mortgaged in the event the loan obligation is never paid, in contravention with the provisions of Presidential Decree
(P.D.) No. 385.[39] It posits that it cannot be held liable for moral damages for exercising its right under the real estate
mortgage and the law. The petitioner further argues that, even if the respondents Spouses Gotangco suffered mental
anguish as a result of the foreclosure, the same qualifies as damnum absque injuria. Besides, the foreclosure did not push
through because of the trial courts injunction order; hence, there was no damage done to the respondents Spouses
Gotangco.
There is merit in petitioners contention.
The petitioner and the CA, however, misconstrued the width and breadth of the permanent injunction issued by the
RTC and affirmed by the CA, as well as the purpose of the trial court in issuing the said writ.
It bears stressing that an injunction order must be as definite, clear and precise as possible and, when practicable, it
should inform the defendant of the act he is refrained from doing, without calling on him for inferences or conclusions
about which persons might well differ. A permanent injunction should not be more comprehensive or restrictive than
justified by the pleadings, evidence and usages of equity.[40] Such must be tailored to each case; they should not infringe
upon a conduct that does not produce the harm sought to be avoided.[41] An injunction should be limited to the
requirements of the case.[42] An injunctive order should never be broader than is necessary to secure [to] the injured
party, without injustice to the adversary, relief warranted by the circumstances of the particular case. The order should be
adequately particularized, especially where some activities may be permissible and proper.[43]
Obviously, the trial court issued a permanent injunction to enjoin the petitioner from pursuing its application for the
extrajudicial foreclosure of the real estate mortgage on May 24, 1990 and the sale at public auction of the property
covered by the said mortgage, on its finding that the petitioner failed to prove how much was the balance of the account of
the respondents Spouses Gotangco to the petitioner as of said date during the trial. The RTC did not perpetually foreclose
the right of the petitioner to file, under any and all circumstances, another application for the extrajudicial foreclosure of
the said mortgage for failure of the respondents spouses to pay the correct balance of their account secured by the said
mortgage. Otherwise, it would have deprived the petitioner of its right to foreclose the real estate mortgage, to cause the
sale of the property at public auction and collect the balance of the account of the respondents spouses as provided for
under the Real Estate Mortgage and the New Civil Code.[44] It would have given the Spouses carte blanche not to pay the
balance of their account to the petitioner without the mortgage being foreclosed by the latter. The trial court would have
deprived the petitioner of its lien over the property without due process of law.
It must be noted that the petitioner had a mortgage lien over the parcels of land covered by the real estate mortgage.
It is a right in rem, a lien on the property.[45] Like an attachment lien, it is a vested interest, an actual and substantial
security, affording specific security for the satisfaction of the debt put in suit, which constitutes a cloud on the legal
title.[46] The lien subsists until the destruction thereof by sale of the property.[47]
Patently, the trial court issued the writ of preliminary injunction not so much because of the failure of the
respondents Spouses Gotangco to pay at least 20% of their account as provided for in Section 1 of P.D. No. 385, but
because of the then still unresolved issue of whether the petitioner was obliged to turn over the owners duplicate copies
of TCT Nos. NT-166092 to NT-166098 to the respondents Spouses Gotangco even after the latter had substituted the
property covered by TCT No. NT-177647 as security for their loan. This is indubitable from the Order of the trial court
dated October 4, 1990 granting the petition of the respondents Spouses Gotangco for the issuance of a writ of preliminary
injunction:

The right of the Gotangcos over the subject properties sought to be protected at this stage of the proceedings in the case
filed against them by Elpidio O. Cucio consists not so much against the lack of legal and factual basis on the part of the DBP
in foreclosing their properties because their arrearages on their account with it fall short of the requirement under Sec. 1
of PD 385, but more on the liability of the DBP to release the owners duplicate certificates of TCT Nos. NT-166092 to NT-
166098 in view of their having already substituted them with TCT No. NT-177647 covering the parcel of land under Tax
Declaration No. 0502 (Exh. 5, Injunction, record, p. 106). In fact, said exhibit speaks of Mayor Cucios purchase of the
properties mortgaged by the Gotangcos with the DBP. This is precisely the cause of action of Mayor Cucio against the
Gotangcos who, in turn, filed a cross-claim against the DBP.

What actually is left for the determination of the Court now during the hearing on the merits of the main case is whether
or not Mayor Cucio has completed the payment of the agreed price on the mortgaged properties of the Gotangcos with the
DBP so that the DBP will finally be ordered to release the owners duplicate certificates of TCT No. NT-166092 to NT-
166098 and for the Gotangcos to execute the final deed of sale thereon in the event that DBP fails (1) to prove that it did
not give its consent or express conformity to the contract to sell executed between Mayor Cucio and the Gotangcos; and
(2) to prove that the Gotangcos failed to comply with the alleged conditions for the release of the properties (record, pp.
39-40).

Pending resolution on the matters raised in the main case, to allow foreclosure of the properties by the DBP at this time
would, indeed, render the main case nugatory and ineffectual.[48]

Indeed, the trial court made it clear that it granted the petition of the respondents Spouses Gotangco for the
issuance of a writ of preliminary injunction pending resolution on the matters raised in the main case.[49] The Spouses
Gotangco, in fact, declared in their motion for a writ of preliminary injunction that they filed the said motion to prevent
the issues in the main case from becoming moot and academic.
The trial court had already resolved the matter in its decision when it ruled that the petitioner was obliged to turn
over the owners duplicate certificates of said titles over the seven parcels of land to the respondents Spouses Gotangco to
enable the latter to execute a deed of sale over the said property in favor of Cucio. In a real sense, the writ of preliminary
injunction issued by the RTC had become functus officio. There was no longer a valid justification for the issuance of a
permanent injunction to perpetually enjoin the petitioner from foreclosing the real estate mortgage.
In affirming the decision of the RTC, permanently enjoining the petitioner from foreclosing the real estate mortgage
in its favor, the CA ruled that since the trial court failed to determine the exact amount of the balance of the account of the
respondents Spouses Gotangco due to the petitioners refusal to produce before the trial court the records showing the
balance of the account of the respondents spouses, it cannot be determined whether the latter failed to pay the twenty
percent (20%) of their total outstanding obligation as envisaged in Section 1 of P.D. No. 385.[50]
We do not agree with the CA. For one thing, no less than the respondents Spouses Gotangco adduced in evidence the
statement of account issued by the petitioner showing the balance of their account.[51]
For another, the trial court itself decided that it issued its order granting the petition of the respondents Spouses
Gotangco not so much because of the latters failure to pay at least 20% of their total outstanding obligation to the DBP,
but because the extrajudicial foreclosure of the real estate mortgage would render moot and academic the issues raised
by the parties in the case. One of these issues was whether the petitioner was obliged to turn over the owners duplicate
copies of TCT Nos. NT-166092 to NT-166098 to the respondents spouses to enable them to execute a deed of absolute
sale over the said lots covered by the said titles to the petitioner. The failure of the cashier of the Cabanatuan branch of
the DBP to produce the DBP records showing the precise balance of the account of the respondents spouses is not and
should not be a justification to perpetually deprive the petitioner of its right to foreclose the mortgage.
On the issue of moral damages, we agree with the trial court and the CA that the initiation of extrajudicial
foreclosure by the petitioner of the real estate mortgage pendente lite was premature; hence, inappropriate. Although the
Spouses Gotangco failed to heed the petitioners repeated demands for the updating of their account and the payment of
the balance of the loan, it behooved the petitioner to tarry until the trial court had decided, with finality, the case on its
merits.
Nevertheless, we find no sufficient basis for the award of moral damages in favor of the respondents spouses based
on Article 19 of the New Civil Code as a result of petitioners application for foreclosure of real estate mortgage. For one
thing, Charity Bantug Gotangco did not testify. There is no factual basis for the award of moral damages in her favor.
Abuse of right under Article 19 of the New Civil Code, on which the RTC anchored its award for damages and
attorneys fees, 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 elements of abuse of rights are the following: (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. Malice or bad faith is at the core of said
provision.[52] Good faith is presumed and he who alleges bad faith has the duty to prove the same. [53] Good faith refers to
the state of the mind which is manifested by the acts of the individual concerned. It consists of the intention to abstain
from taking an unconscionable and unscrupulous advantage of another. Bad faith does not simply connote bad judgment
or simple negligence, dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of known duty
due to some motives or interest or ill-will that partakes of the nature of fraud.[54] Malice connotes ill-will or spite and
speaks not in response to duty. It implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad
motive.[55]
The Spouses Gotangco failed to prove malice on the part of the petitioner. There was, for sure, a divergence of
opinion between the petitioner, on the one hand, and the Spouses Gotangco, on the other, relative to the issue of whether
Cucios payments were mere deposits or partial payments for the lot covered by TCT No. NT-177647, and whether the
respondents Spouses Gotangco had agreed to the offer of the pool of insurers to pay the amount of P167,149.14 as
indemnity for the loss of their poultry farm. However, the bare fact that the petitioner filed its application of the
extrajudicial foreclosure of the mortgage, notwithstanding those differences, cannot thereby give rise to the conclusion
that the petitioner did so with malice, to harass the Spouses Gotangco. The records show that, time and again, the
petitioner had sent notices to the respondents spouses and demanded the updating of their account and the payment of
the balance thereof, but the respondents spouses failed to comply. In the meantime, interests and penalties on the loan
considerably accrued. Under the terms of the real estate mortgage and its charter, the petitioner had the right to foreclose
the said mortgage extrajudicially. Hence, the petitioner was constrained to file its application for the extrajudicial
foreclosure of the mortgage for the Spouses Gotangcos past due obligation. Instead of settling their account, the Spouses
filed their petition for a writ of preliminary injunction. Because of the preliminary injunction issued by the trial court, the
foreclosure was aborted. Under the circumstances, it cannot be gainsaid that the petitioner acted in bad faith or with
malice in seeking the extrajudicial foreclosure of the mortgage in its favor.
IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The assailed Decision of the Court of
Appeals is AFFIRMED WITH MODIFICATION. The permanent injunction issued by the Regional Trial Court, as affirmed by
the Court of Appeals; and the award for moral damages in favor of the Spouses Jacinto Gotangco and Charity Bantug are
DELETED. No costs.
 SO ORDERED.

G.R. No. L-39019 January 22, 1988

MANILA ELECTRIC COMPANY and PEDRO YAMBAO, petitioners-appellants,

vs.
THE HONORABLE COURT OF APPEALS and ISAAC CHAVEZ, SR., ISAAC O. CHAVEZ, JR., ROSENDO O. CHAVES, and
JUAN O. CHAVES, respondents-appellees.

YAP, J.:

In an action for recovery of damages for embarassment, humiliation, wounded feelings and hurt pride, caused to herein
private respondents, by reason of the disconnection of their electrical service by the petitioners, the then Court of First
Instance of Manila, Sixth Judicial District, Branch XXIV, rendered a decision dated December 13,1967, ordering herein
petitioners jointly and severally to pay private respondents the sum of Ten Thousand (P10,000.00) Pesos as moral
damages, Two Thousand (P2,000.00) Pesos as exemplary damages and, One Thousand (P1,000.00) Pesos as attorney's
fees, and dismissing petitioners' counterclaim.

On appeal, the Court of Appeals and in toto the trial court's decision. Their Motion for Reconsideration having been
denied, petitioners filed the instant petition for certiorari.

Petitioner Manila Electric Company (MERALCO) is a public utility corporation providing electric power for the
consumption of the general public in Metro Manila. Petitioner Pedro Yambao is a bill collector of MERALCO.

Private respondents Isaac Chaves and Juana O. Chaves, husband and wife, filed the complaint for damages, together with
their children, Isaac O. Chaves, Jr. and Rosendo O. Chaves. Isaac Sr. and Isaac Jr. and Rosendo were members of the
Philippine Bar; Isaac, Sr. and Isaac, Jr. were practicing lawyers and Rosendo was a Legal Officer at the Agricultural
Productivity Commission. Juana O. Chaves was a public school teacher.

The facts as found by the trial court and adopted by the Court of Appeals are as follows:

Plaintiff Isaac Chaves became a customer of defendant MERALCO in the year 1953 when he and his
family were residing at No. 211-D Rubi, Manila. In connection with the contract for electrical service, he
deposited the sum of P5.00 (Exh. "A") with defendant MERALCO on February 12, 1953. This deposit in
the name of plaintiff Isaac Chaves was retained by MERALCO and made to apply to subsequent
contracts for electrical service entered into after subsequent transfers of the Chaves family to other
residences and up to the time this family went to reside at the place aforementioned, at No. 2656
Mercedes Street, Singalong, Manila. ...

At or about the end of March, 1965, defendant Pedro Yambao went to the residence of plaintiffs and
presented two overdue bills, one for January 11 to February 9,1965, for the sum of P7.90 (Exhibit "C"),
and the other for February 9 to March 10, 1965, for the amount of P7.20 (Exhibit "C"). Juana O. Chaves,
however, informed Yambao that these bills would be paid at the MERALCO main office.

Accordingly, on April 2, 1965, Isaac Chaves went to the defendant's main office at San Marcelino,
Manila, but paid only the bill marked as Exhibit 'C" leaving the other bill Identified as Exhibit "C-l"
unpaid.

Past 2:30 o'clock in the afternoon of April 21,1965, MERALCO caused the electric service in plaintiff's
residence to be discontinued and the power line cut off.

The next day, April 22, 1965, at about 9:00 a.m., plaintiff Rosendo O. Chaves went to the MERALCO
main office and paid the amount of P7.20 for the bill marked as Exhibit "C-l", and the sum of P7.00 for
the subsequent bill corresponding to the period from March 10 up to April 8, 1965 (Exhibit "C-2") after
 his attention was called to the latter account. Rosendo O. Chaves then sought the help of Atty. Lourdy
Torres, one of the defendants' counsel, and, thereafter, the power line was reconnected and electric
service restored to the Chaves residence at about 7:00 p.m. of that same day. 1

Petitioners dispute the finding that there was no notice given to herein respondent. However, since only questions of law
may be raised in a petition for certiorari under Rule 45 of the Revised Rules of Court, petitioners, 'for the sake of
argument and for the purpose of giving focus on the legal issues', do not take issue with such finding.

Petitioners contend that in the absence of bad faith, they could not be held liable for moral and exemplary damages as
well as attorney's fees. The failure to give a notice of disconnection to private respondents might have been a breach of
duty or breach of contract, but by itself does not constitute bad faith or fraud; it must be shown that such a failure was
motivated by in or done with fraudulent intent.Petitioners also maintain that ' private respondents were in arrears in the
payment of their electricity bills when their electric service was connected, no moral damages may be recovered by them
under the 'clean hands' doctrine enunciated in Mabutas vs. Calapan Electric Company, CA-G.R. No. L-9683-R, May 26,
1964.

In its decision, the respondent Court of Appeals held that MERALCO's right to disconnect the electric service of a
delinquent customer "is an absolute one, subject only to the requirement that defendant MERALCO should give the
customer a written notice of disconnection 48 hours in advance." This requirement is embodied in Section 97 of the
Revised Order No. 1 of the Public Service Commission which provides as follows:

Section 97. Payment of bills. A public service, may require that bills for service be paid within a
specified time after rendition. When the billing period covers a month or more, the minimum time
allowed will be ten days and upon expiration of the specified time, service may be discontinued for the
non-payment of bills, provided that a 48 hours' written notice of such disconnection has been given the
customer: Provided, however, that disconnections of service shall not be made on Sundays and official
holidays and never after 2 p.m. of any working day: Provided, further, that if at the moment the
disconnection is to be made the customer tenders payment of the unpaid bill to the agent or employee
of the operator who is to effect the disconnection, the said agent or employee shall be obliged to accept
tender of payment and issue a temporary receipt for the amount and shall desist from disconnecting
the service. 2

The respondent court stressed the importance and necessity of the 48-hour advance written notification before a
disconnection of service may be effected. Said the court:

... It sets in motion the disconnection of an electrical service of the customer by giving the notice,
determining the expiration date thereof, and executing the disconnection. It, therefore, behooves the
defendant MERALCO that before it disconnects a customer's electrical service, there should be
sufficient evidence that the requirements for the disconnection had been duly complied with,
otherwise, the poor consumer can be subjected to the whims and caprices of the defendant, by the
mere pretension that the written notice had been duly served upon the customer. 3

We find no reversible error in the decision appealed from. 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, as held by us in a similar
case, 4 where we said:

... petitioner's act in 'disconnecting respondent Ongsip's gas service without prior notice constitutes
breach of contract amounting to an independent tort. The prematurity of the action is indicative of an
intent to cause additional mental and moral suffering to private respondent. This is a clear violation of
Article 21 of the Civil Code which 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 damages. This is reiterated by paragraph 10 of Article 2219 of the Code. Moreover, the award
 of moral damages is sanctioned by Article 2220 which provides that wilfull injury to property may be a
legal ground for awarding moral damages if the court should find that, under the circumstances, such
damages are justly due. The same rule applies to breaches of contract where the defendant acted
fraudulently or in bad faith.

Likewise, we find no merit in petitioners' contention that being in arrears in the payment of their bills, the private
respondents are not entitled to moral damages under the doctrine that "he who comes to court in demand of equity, must
come with clean hands." We rejected this argument in the Manila Gas Corporation case, supra, wherein we held that
respondents' default in the payment of his bills "cannot be utilized by petitioner to defeat or null the claim for damages. At
most, this circumstance can be considered as a mitigating factor in ascertaining the amount of damages to which
respondent ... is entitled."

Accordingly, we find no grave abuse of discretion committed by respondent court in affirming the trial court's decision.
The petition is hereby DISMISSED for lack of merit.

JOSE V. LAGON, petitioner, vs. HONORABLE COURT OF APPEALS and MENANDRO V. LAPUZ, respondents.

DECISION
CORONA, J.:

On June 23, 1982, petitioner Jose Lagon purchased from the estate of Bai Tonina Sepi, through an intestate
court,[1] two parcels of land located at Tacurong, Sultan Kudarat. A few months after the sale, private respondent
Menandro Lapuz filed a complaint for torts and damages against petitioner before the Regional Trial Court (RTC) of
Sultan Kudarat.
In the complaint, private respondent, as then plaintiff, claimed that he entered into a contract of lease with the late
Bai Tonina Sepi Mengelen Guiabar over three parcels of land (the property) in Sultan Kudarat, Maguindanao beginning
1964. One of the provisions agreed upon was for private respondent to put up commercial buildings which would, in turn,
be leased to new tenants. The rentals to be paid by those tenants would answer for the rent private respondent was
obligated to pay Bai Tonina Sepi for the lease of the land. In 1974, the lease contract ended but since the construction of
the commercial buildings had yet to be completed, the lease contract was allegedly renewed.
When Bai Tonina Sepi died, private respondent started remitting his rent to the court-appointed administrator of
her estate. But when the administrator advised him to stop collecting rentals from the tenants of the buildings he
constructed, he discovered that petitioner, representing himself as the new owner of the property, had been collecting
rentals from the tenants. He thus filed a complaint against the latter, accusing petitioner of inducing the heirs of Bai
Tonina Sepi to sell the property to him, thereby violating his leasehold rights over it.
In his answer to the complaint, petitioner denied that he induced the heirs of Bai Tonina to sell the property to him,
contending that the heirs were in dire need of money to pay off the obligations of the deceased. He also denied interfering
with private respondents leasehold rights as there was no lease contract covering the property when he purchased it; that
his personal investigation and inquiry revealed no claims or encumbrances on the subject lots.
Petitioner claimed that before he bought the property, he went to Atty. Benjamin Fajardo, the lawyer who allegedly
notarized the lease contract between private respondent and Bai Tonina Sepi, to verify if the parties indeed renewed the
lease contract after it expired in 1974. Petitioner averred that Atty. Fajardo showed him four copies of the lease renewal
but these were all unsigned. To refute the existence of a lease contract, petitioner presented in court a certification from
the Office of the Clerk of Court confirming that no record of any lease contract notarized by Atty. Fajardo had been
entered into their files. Petitioner added that he only learned of the alleged lease contract when he was informed that
private respondent was collecting rent from the tenants of the building.
Finding the complaint for tortuous interference to be unwarranted, petitioner filed his counterclaim and prayed for
the payment of actual and moral damages.
On July 29, 1986, the court a quo found for private respondent (plaintiff below):

ACCORDINGLY, judgment is hereby rendered in favor of the plaintiff:

1. Declaring the Contract of Lease executed by Bai Tonina Sepi Mangelen Guiabar in favor of the
plaintiff on November 6, 1974 (Exh. A and A-1) over Lot No. 6395, Pls-73. Lot No 6396. Pls.-73. Lot
 No. 6399. 3ls-73, and Lot no.9777-A. CSD-11-000076-D (Lot No. 3-A. 40124), all situated along
Ledesma St., Tacurong, Sultan Kudarat, which document was notarized by Atty. Benjamin S. Fajardo,
Sr. and entered into his notarial register as Doc. No. 619. Page No. 24. Book No. II. Series of 1974, to
be authentic and genuine and as such valid and binding for a period of ten (10) years specified
thereon from November 1, 1974 up to October 31, 1984;
2. Declaring the plaintiff as the lawful owner of the commercial buildings found on the aforesaid lots
and he is entitled to their possession and the collection (of rentals) of the said commercial buildings
within the period covered by this Contract of Lease in his favor;
3. Ordering the defendant to pay to the plaintiff the following:

a) Rentals of the commercial buildings on the lots covered by the Contract of Lease in favor of the
plaintiff for the period from October 1, 1978 up to October 31, 1984, including accrued interests
in the total amount of Five Hundred Six Thousand Eight Hundred Five Pesos and Fifty Six
Centavos (P506, 850.56), the same to continue to bear interest at the legal rate of 12% per
annum until the whole amount is fully paid by the defendant to the plaintiff;

b) Moral damages in the amount of One Million Sixty Two Thousand Five Hundred Pesos
(P1,062,500.00);

c) Actual or compensatory damages in the amount of Three Hundred Twelve Thousand Five
Hundred Pesos (P312, 500.00);

d) Exemplary or corrective damages in the amount of One Hundred Eighty Thousand Five Hundred
Pesos (P187,500.00)

e) Temperate or moderate damages in the amount of Sixty Two Thousand Five Hundred Pesos
(P62,500.00);

f) Nominal damages in the amount of Sixty Two Thousand Five Hundred Pesos (P62,500.00);

g) Attorneys fees in the amount of One Hundred Twenty Five Thousand Pesos (P125,000.00);

h) Expenses of litigation in the amount of Sixty Two Thousand Five Hundred Pesos (P62,500.00);

i) Interest on the moral damages, actual or compensatory damages temperate or moderate

damages, nominal damages, attorneys fees and expenses of litigation in the amounts as specified
hereinabove from May 24, 1982 up to June 27, 1986, in the total amount of Nine Hundred
Thousand Pesos (P900,000.00); all of which will continue to bear interests at a legal rate of 12%
per annum until the whole amounts are fully paid by the defendants to the plaintiffs;

4. For failure of the defendant to deposit with this Court all the rentals he had collected from the
thirteen (13) tenants or occupants of the commercial buildings in question, the plaintiff is hereby
restored to the possession of his commercial buildings for a period of seventy-three (73) months
which is the equivalent of the total period for which he was prevented from collecting the rentals
from the tenants or occupants of his commercial buildings from October 1, 1978 up to October 31,
1984, and for this purpose a Writ of Preliminary Injunction is hereby issued, but the plaintiff is
likewise ordered to pay to the defendant the monthly rental of Seven Hundred Pesos (P700.00) every
end of the month for the entire period of seventy three (73) months. This portion of the judgment
should be considered as a mere alternative should the defendant fail to pay the amount of Five
Hundred Five Pesos and Fifty Six Centavos (P506,805.56) hereinabove specified;
5. Dismissing the counterclaim interposed by the defendant for lack of merit;
6. With costs against the defendant.[2]
Petitioner appealed the judgment to the Court of Appeals.[3] In a decision dated January 31, 1995,[4] the appellate
court modified the assailed judgment of the trial court as follows:
 a) The award for moral damages, compensatory damages, exemplary damages, temperate
or moderate damages, and nominal damages as well as expenses of litigation in the amount of P62,500.00
and interests under paragraph 3-a(a), (b), (c), (d), (e), (f), (g), (h), and (i) are deleted;
b) The award for attorneys fees is reduced to P30,000.00;
c) Paragraphs 1,2,5 and 6 are AFFIRMED;
d) Additionally, the defendant is hereby ordered to pay to the plaintiff by way of actual
damages the sum of P178,425.00 representing the amount of rentals he collected from the period of
October 1978 to August 1983, and minus the amount of P42,700.00 representing rentals due the
defendant computed at P700.00 per month for the period from August 1978 to August 1983, with
interest thereon at the rate until the same is fully paid;
e) Paragraph 4 is deleted.[5]
Before the appellate court, petitioner disclaimed knowledge of any lease contract between the late Bai Tonina Sepi
and private respondent. On the other hand, private respondent insisted that it was impossible for petitioner not to know
about the contract since the latter was aware that he was collecting rentals from the tenants of the building. While the
appellate court disbelieved the contentions of both parties, it nevertheless held that, for petitioner to become liable for
damages, he must have known of the lease contract and must have also acted with malice or bad faith when he bought the
subject parcels of land.
Via this petition for review, petitioner cites the following reasons why the Court should rule in his favor:
1. The Honorable Court of Appeals seriously erred in holding that petitioner is liable for interference of
contractual relation under Article 1314 of the New Civil Code;
2. The Honorable Court of Appeals erred in not holding that private respondent is precluded from recovering,
if at all, because of laches;
3. The Honorable Court of Appeals erred in holding petitioner liable for actual damages and attorneys fees,
and;
4. The Honorable Court of Appeals erred in dismissing petitioners counterclaims.[6]
Article 1314 of the Civil Code provides that any third person who induces another to violate his contract shall be
liable for damages to the other contracting party. The tort recognized in that provision is known as interference with
contractual relations.[7] The interference is penalized because it violates the property rights of a party in a contract to reap
the benefits that should result therefrom.[8]
The core issue here is whether the purchase by petitioner of the subject property, during the supposed existence of
private respondents lease contract with the late Bai Tonina Sepi, constituted tortuous interference for which petitioner
should be held liable for damages.
The Court, in the case of So Ping Bun v. Court of Appeals,[9] laid down the elements of tortuous interference with
contractual relations: (a) existence of a valid contract; (b) knowledge on the part of the third person of the existence of
the contract and (c) interference of the third person without legal justification or excuse. In that case, petitioner So Ping
Bun occupied the premises which the corporation of his grandfather was leasing from private respondent, without the
knowledge and permission of the corporation. The corporation, prevented from using the premises for its business, sued
So Ping Bun for tortuous interference.
As regards the first element, the existence of a valid contract must be duly established. To prove this, private
respondent presented in court a notarized copy of the purported lease renewal.[10] While the contract appeared as duly
notarized, the notarization thereof, however, only proved its due execution and delivery but not the veracity of its
contents. Nonetheless, after undergoing the rigid scrutiny of petitioners counsel and after the trial court declared it to be
valid and subsisting, the notarized copy of the lease contract presented in court appeared to be incontestable proof that
private respondent and the late Bai Tonina Sepi actually renewed their lease contract. Settled is the rule that until
overcome by clear, strong and convincing evidence, a notarized document continues to be prima facie evidence of the
facts that gave rise to its execution and delivery.[11]
The second element, on the other hand, requires that there be knowledge on the part of the interferer that the
contract exists. Knowledge of the subsistence of the contract is an essential element to state a cause of action for tortuous
interference.[12] A defendant in such a case cannot be made liable for interfering with a contract he is unaware of.[13] While
it is not necessary to prove actual knowledge, he must nonetheless be aware of the facts which, if followed by a
reasonable inquiry, will lead to a complete disclosure of the contractual relations and rights of the parties in the
contract.[14]
In this case, petitioner claims that he had no knowledge of the lease contract. His sellers (the heirs of Bai Tonina
Sepi) likewise allegedly did not inform him of any existing lease contract.
After a careful perusal of the records, we find the contention of petitioner meritorious. He conducted his own
personal investigation and inquiry, and unearthed no suspicious circumstance that would have made a cautious man
probe deeper and watch out for any conflicting claim over the property. An examination of the entire propertys title bore
no indication of the leasehold interest of private respondent. Even the registry of property had no record of the same. [15]
Assuming ex gratia argumenti that petitioner knew of the contract, such knowledge alone was not sufficient to make
him liable for tortuous interference. Which brings us to the third element. According to our ruling in So Ping Bun,
petitioner may be held liable only when there was no legal justification or excuse for his action[16] or when his conduct
was stirred by a wrongful motive. To sustain a case for tortuous interference, the defendant must have acted with
malice[17] or must have been driven by purely impious reasons to injure the plaintiff. In other words, his act of
interference cannot be justified.[18]
Furthermore, the records do not support the allegation of private respondent that petitioner induced the heirs of
Bai Tonina Sepi to sell the property to him. The word induce refers to situations where a person causes another to choose
one course of conduct by persuasion or intimidation.[19] The records show that the decision of the heirs of the late Bai
Tonina Sepi to sell the property was completely of their own volition and that petitioner did absolutely nothing to
influence their judgment. Private respondent himself did not proffer any evidence to support his claim. In short, even
assuming that private respondent was able to prove the renewal of his lease contract with Bai Tonina Sepi, the fact was that
he was unable to prove malice or bad faith on the part of petitioner in purchasing the property. Therefore, the claim of
tortuous interference was never established.
In So Ping Bun, the Court discussed whether interference can be justified at all if the interferer acts for the sole
purpose of furthering a personal financial interest, but without malice or bad faith. As the Court explained it:

x x x, as a general rule, justification for interfering with the business relations of another exists where the actors motive is
to benefit himself. Such justification does not exist where the actors motive is to cause harm to the other. Added to this,
some authorities believe that it is not necessary that the interferers interest outweigh that of the party whose rights are
invaded, and that an individual acts under an economic interest that is substantial, not merely de minimis, such that
wrongful and malicious motives are negatived, for he acts in self-protection. Moreover, justification for protecting ones
financial position should not be made to depend on a comparison of his economic interest in the subject matter with that
of the others. It is sufficient if the impetus of his conduct lies in a proper business interest rather than in wrongful
motives.[20]

The foregoing disquisition applies squarely to the case at bar. In our view, petitioners purchase of the subject
property was merely an advancement of his financial or economic interests, absent any proof that he was enthused by
improper motives. In the very early case of Gilchrist v. Cuddy,[21] the Court declared that a person is not a malicious
interferer if his conduct is impelled by a proper business interest. In other words, a financial or profit motivation will not
necessarily make a person an officious interferer liable for damages as long as there is no malice or bad faith involved.
In sum, we rule that, inasmuch as not all three elements to hold petitioner liable for tortuous interference are
present, petitioner cannot be made to answer for private respondents losses.
This case is one of damnun absque injuria or damage without injury. Injury is the legal invasion of a legal right while
damage is the hurt, loss or harm which results from the injury.[22] In BPI Express Card Corporation v. Court of
Appeals,,[23] the Court turned down the claim for damages of a cardholder whose credit card had been cancelled by
petitioner corporation after several defaults in payment. We held there that there can be damage without injury where
the loss or harm is not the result of a violation of a legal duty. In that instance, the consequences must be borne by the
injured person alone since the law affords no remedy for damages resulting from an act which does not amount to legal
injury or wrong.[24] Indeed, lack of malice in the conduct complained of precludes recovery of damages. [25]
With respect to the attorneys fees awarded by the appellate court to private respondent, we rule that it cannot be
recovered under the circumstances. According to Article 2208 of the Civil Code, attorneys fees may be awarded only when
it has been stipulated upon or under the instances provided therein.[26] Likewise, being in the concept of actual damages,
the award for attorneys fees must have clear, factual and legal bases[27] which, in this case, do not exist.
Regarding the dismissal of petitioners counterclaim for actual and moral damages, the appellate court affirmed the
assailed order of the trial court because it found no basis to grant the amount of damages prayed for by petitioner. We
find no reason to reverse the trial court and the Court of Appeals. Actual damages are those awarded in satisfaction of, or
in recompense for, loss or injury sustained. To be recoverable, they must not only be capable of proof but must actually be
proved with a reasonable degree of certainty.[28] Petitioner was unable to prove that he suffered loss or injury, hence, his
claim for actual damages must fail. Moreover, petitioners prayer for moral damages was not warranted as moral damages
should result from the wrongful act of a person. The worries and anxieties suffered by a party hailed to court litigation are
not compensable.[29]
With the foregoing discussion, we no longer deem it necessary to delve into the issue of laches.
WHEREFORE, premises considered, the petition is hereby GRANTED. The assailed decision of the Court of Appeals
is hereby REVERSED and SET ASIDE.
No costs.
SO ORDERED.

G.R. No. 120554 September 21, 1999

SO PING BUN, petitioner,

vs.
COURT OF APPEALS, TEK HUA ENTERPRISES CORP. and MANUEL C. TIONG, respondents.

QUISUMBING, J.:

This petition for certiorari challenges the Decision 1 of the Court of Appeals dated October 10, 1994, and the
Resolution 2dated June 5, 1995, in CA-G.R. CV No. 38784. The appellate court affirmed the decision of the Regional Trial
Court of Manila, Branch 35, except for the award of attorney's fees, as follows:

WHEREFORE, foregoing considered, the appeal of respondent-appellant So Ping Bun for lack of merit is
DISMISSED. The appealed decision dated April 20, 1992 of the court a quo is modified by reducing the
attorney's fees awarded to plaintiff Tek Hua Enterprising Corporation from P500,000.00 to
P200,000.00. 3

The facts are as follows:

In 1963, Tek Hua Trading Co, through its managing partner, So Pek Giok, entered into lease agreements with lessor Dee C.
Chuan & Sons Inc. (DCCSI). Subjects of four (4) lease contracts were premises located at Nos. 930, 930-Int., 924-B and
924-C, Soler Street, Binondo, Manila. Tek Hua used the areas to store its textiles. The contracts each had a one-year term.
They provided that should the lessee continue to occupy the premises after the term, the lease shall be on a month-to-
month basis.

When the contracts expired, the parties did not renew the contracts, but Tek Hua continued to occupy the premises. In
1976, Tek Hua Trading Co. was dissolved. Later, the original members of Tek Hua Trading Co. including Manuel C. Tiong,
formed Tek Hua Enterprising Corp., herein respondent corporation.

So Pek Giok, managing partner of Tek Hua Trading, died in 1986. So Pek Giok's grandson, petitioner So Ping Bun, occupied
the warehouse for his own textile business, Trendsetter Marketing.

On August 1, 1989, lessor DCCSI sent letters addressed to Tek Hua Enterprises, informing the latter of the 25% increase in
rent effective September 1, 1989. The rent increase was later on reduced to 20% effective January 1, 1990, upon other
lessees' demand. Again on December 1, 1990, the lessor implemented a 30% rent increase. Enclosed in these letters were
new lease contracts for signing. DCCSI warned that failure of the lessee to accomplish the contracts shall be deemed as
lack of interest on the lessee's part, and agreement to the termination of the lease. Private respondents did not answer
any of these letters. Still, the lease contracts were not rescinded.

On March 1, 1991, private respondent Tiong sent a letter to petitioner which reads as follows:
 March 1, 1991

Mr. So Ping Bun

930 Soler Street

Binondo, Manila

Dear Mr. So,

Due to my closed (sic) business associate (sic) for three decades with your late grandfather Mr. So Pek
Giok and late father, Mr. So Chong Bon, I allowed you temporarily to use the warehouse of Tek Hua
Enterprising Corp. for several years to generate your personal business.

Since I decided to go back into textile business, I need a warehouse immediately for my stocks.
Therefore, please be advised to vacate all your stocks in Tek Hua Enterprising Corp. Warehouse. You
are hereby given 14 days to vacate the premises unless you have good reasons that you have the right
to stay. Otherwise, I will be constrained to take measure to protect my interest.

Please give this urgent matter your preferential attention to avoid inconvenience on your part.

Very truly yours,

(Sgd) Manuel C. Tiong

MANUEL C. TIONG

President 4

Petitioner refused to vacate. On March 4, 1992, petitioner requested formal contracts of lease with DCCSI in favor
Trendsetter Marketing. So Ping Bun claimed that after the death of his grandfather, So Pek Giok, he had been occupying
the premises for his textile business and religiously paid rent. DCCSI acceded to petitioner's request. The lease contracts
in favor of Trendsetter were executed.

In the suit for injunction, private respondents pressed for the nullification of the lease contracts between DCCSI and
petitioner. They also claimed damages.

After trial, the trial court ruled:

WHEREFORE, judgment is rendered:

1. Annulling the four Contracts of Lease (Exhibits A, A-1 to A-3,

inclusive) all dated March 11, 1991, between defendant So Ping
Bun, doing business under the name and style of "Trendsetter
Marketing", and defendant Dee C. Chuan & Sons, Inc. over the
premises located at Nos. 924-B, 924-C, 930 and 930, Int.,
respectively, Soler Street, Binondo Manila;

2. Making permanent the writ of preliminary injunction issued by

this Court on June 21, 1991;

3. Ordering defendant So Ping Bun to pay the aggrieved party,

plaintiff Tek Hua Enterprising Corporation, the sum of
P500,000.00, for attorney's fees;
 4. Dismissing the complaint, insofar as plaintiff Manuel C. Tiong is
concerned, and the respective counterclaims of the defendant;

5. Ordering defendant So Ping Bun to pay the costs of this

lawsuit;

This judgment is without prejudice to the rights of plaintiff Tek Hua Enterprising Corporation and
defendant Dee C. Chuan & Sons, Inc. to negotiate for the renewal of their lease contracts over the
premises located at Nos. 930, 930-Int., 924-B and 924-C Soler Street, Binondo, Manila, under such
terms and conditions as they agree upon, provided they are not contrary to law, public policy, public
order, and morals.

SO ORDERED. 5

Petitioner's motion for reconsideration of the above decision was denied.

On appeal by So Ping Bun, the Court of Appeals upheld the trial court. On motion for reconsideration, the appellate court
modified the decision by reducing the award of attorney's fees from five hundred thousand (P500,000.00) pesos to two
hundred thousand (P200,000.00) pesos.

Petitioner is now before the Court raising the following issues:

I. WHETHER THE APPELLATE COURT ERRED IN AFFIRMING THE TRIAL

COURT'S DECISION FINDING SO PING BUN GUILTY OF TORTUOUS
INTERFERENCE OF CONTRACT?

II. WHETHER THE APPELLATE COURT ERRED IN AWARDING

ATTORNEY'S FEES OF P200,000.00 IN FAVOR OF PRIVATE
RESPONDENTS.

The foregoing issues involve, essentially, the correct interpretation of the applicable law on tortuous conduct, particularly
unlawful interference with contract. We have to begin, obviously, with certain fundamental principles on torts and
damages.

Damage is the loss, hurt, or harm which results from injury, and damages are the recompense or compensation awarded
for the damage suffered. 6 One becomes liable in an action for damages for a nontrespassory invasion of another's interest
in the private use and enjoyment of asset if (a) the other has property rights and privileges with respect to the use or
enjoyment interfered with, (b) the invasion is substantial, (c) the defendant's conduct is a legal cause of the invasion, and
(d) the invasion is either intentional and unreasonable or unintentional and actionable under general negligence rules. 7

The elements of tort interference are: (1) existence of a valid contract; (2) knowledge on the part of the third person of
the existence of contract; and (3) interference of the third person is without legal justification or excuse. 8

A duty which the law of torts is concerned with is respect for the property of others, and a cause of action ex delicto may
be predicated upon an unlawful interference by one person of the enjoyment by the other of his private
property.9 This may pertain to a situation where a third person induces a party to renege on or violate his undertaking
under a contract. In the case before us, petitioner's Trendsetter Marketing asked DCCSI to execute lease contracts in its
favor, and as a result petitioner deprived respondent corporation of the latter's property right. Clearly, and as correctly
viewed by the appellate court, the three elements of tort interference above-mentioned are present in the instant case.

Authorities debate on whether interference may be justified where the defendant acts for the sole purpose of furthering
his own financial or economic interest. 10 One view is that, as a general rule, justification for interfering with the business
relations of another exists where the actor's motive is to benefit himself. Such justification does not exist where his sole
motive is to cause harm to the other. Added to this, some authorities believe that it is not necessary that the interferer's
interest outweigh that of the party whose rights are invaded, and that an individual acts under an economic interest that
is substantial, not merely de minimis, such that wrongful and malicious motives are negatived, for he acts in self-
protection. 11Moreover justification for protecting one's financial position should not be made to depend on a comparison
of his economic interest in the subject matter with that of others. 12 It is sufficient if the impetus of his conduct lies in a
proper business interest rather than in wrongful motives. 13

As early as Gilchrist vs. Cuddy, 14 we held that where there was no malice in the interference of a contract, and the impulse
behind one's conduct lies in a proper business interest rather than in wrongful motives, a party cannot be a malicious
interferer. Where the alleged interferer is financially interested, and such interest motivates his conduct, it cannot be said
that he is an officious or malicious intermeddler. 15

In the instant case, it is clear that petitioner So Ping Bun prevailed upon DCCSI to lease the warehouse to his enterprise at
the expense of respondent corporation. Though petitioner took interest in the property of respondent corporation and
benefited from it, nothing on record imputes deliberate wrongful motives or malice on him.

Sec. 1314 of the Civil Code categorically provides also that, "Any third person who induces another to violate his contract
shall be liable for damages to the other contracting party." Petitioner argues that damage is an essential element of tort
interference, and since the trial court and the appellate court ruled that private respondents were not entitled to actual,
moral or exemplary damages, it follows that he ought to be absolved of any liability, including attorney's fees.

It is true that the lower courts did not award damages, but this was only because the extent of damages was not
quantifiable. We had a similar situation in Gilchrist, where it was difficult or impossible to determine the extent of damage
and there was nothing on record to serve as basis thereof. In that case we refrained from awarding damages. We believe
the same conclusion applies in this case.

While we do not encourage tort interferers seeking their economic interest to intrude into existing contracts at the
expense of others, however, we find that the conduct herein complained of did not transcend the limits forbidding an
obligatory award for damages in the absence of any malice. The business desire is there to make some gain to the
detriment of the contracting parties. Lack of malice, however, precludes damages. But it does not relieve petitioner of the
legal liability for entering into contracts and causing breach of existing ones. The respondent appellate court correctly
confirmed the permanent injunction and nullification of the lease contracts between DCCSI and Trendsetter Marketing,
without awarding damages. The injunction saved the respondents from further damage or injury caused by petitioner's
interference.

Lastly, the recovery of attorney's fees in the concept of actual or compensatory damages, is allowed under the
circumstances provided for in Article 2208 of the Civil Code. 16 One such occasion is when the defendant's act or omission
has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest. 17 But we have
consistently held that the award of considerable damages should have clear factual and legal bases. 18 In connection with
attorney's fees, the award should be commensurate to the benefits that would have been derived from a favorable
judgment. Settled is the rule that fairness of the award of damages by the trial court calls for appellate review such that
the award if far too excessive can be reduced. 19 This ruling applies with equal force on the award of attorney's fees. In a
long line of cases we said, "It is not sound policy to place in penalty on the right to litigate. To compel the defeated party to
pay the fees of counsel for his successful opponent would throw wide open the door of temptation to the opposing party
and his counsel to swell the fees to undue proportions."20

Considering that the respondent corporation's lease contract, at the time when the cause of action accrued, ran only on a
month-to-month basis whence before it was on a yearly basis, we find even the reduced amount of attorney's fees ordered
by the Court of Appeals still exorbitant in the light of prevailing jurisprudence. 21 Consequently, the amount of two
hundred thousand (P200,000.00) awarded by respondent appellate court should be reduced to one hundred thousand
(P100,000.00) pesos as the reasonable award or attorney's fees in favor of private respondent corporation.

WHEREFORE, the petition is hereby DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV
No. 38784 are hereby AFFIRMED, with MODIFICATION that the award of attorney's fees is reduced from two hundred
thousand (P200,000.00) to one hundred thousand (P100,000.00) pesos. No pronouncement as to costs.1wphi1.nt

SO ORDERED.

KINDRED TORTS:

G.R. No. 130547 October 3, 2000

LEAH ALESNA REYES, ROSE NAHDJA, JOHNNY, and minors LLOYD and KRISTINE, all surnamed REYES, represented
by their mother, LEAH ALESNA REYES, petitioners,
vs.
SISTERS OF MERCY HOSPITAL, SISTER ROSE PALACIO, DR. MARVIE BLANES, and DR. MARLYN RICO, respondents.

DECISION

MENDOZA, J.:

This is a petition for review of the decision1 of the Court of Appeals in CA-G.R. CV No. 36551 affirming the decision of the
Regional Trial Court, Branch IX, Cebu City which dismissed a complaint for damages filed by petitioners against
respondents.

The facts are as follows:

Petitioner Leah Alesna Reyes is the wife of the late Jorge Reyes. The other petitioners, namely, Rose Nahdja, Johnny, Lloyd,
and Kristine, all surnamed Reyes, were their children. Five days before his death on January 8, 1987, Jorge had been
suffering from a recurring fever with chills. After he failed to get relief from some home medication he was taking, which
consisted of analgesic, antipyretic, and antibiotics, he decided to see the doctor.

On January 8, 1987, he was taken to the Mercy Community Clinic by his wife. He was attended to by respondent Dr.
Marlyn Rico, resident physician and admitting physician on duty, who gave Jorge a physical examination and took his
medical history. She noted that at the time of his admission, Jorge was conscious, ambulatory, oriented, coherent, and
with respiratory distress.2 Typhoid fever was then prevalent in the locality, as the clinic had been getting from 15 to 20
cases of typhoid per month.3 Suspecting that Jorge could be suffering from this disease, Dr. Rico ordered a Widal Test, a
standard test for typhoid fever, to be performed on Jorge. Blood count, routine urinalysis, stool examination, and malarial
smear were also made.4 After about an hour, the medical technician submitted the results of the test from which Dr. Rico
concluded that Jorge was positive for typhoid fever. As her shift was only up to 5:00 p.m., Dr. Rico indorsed Jorge to
respondent Dr. Marvie Blanes.

Dr. Marvie Blanes attended to Jorge at around six in the evening. She also took Jorges history and gave him a physical
examination. Like Dr. Rico, her impression was that Jorge had typhoid fever. Antibiotics being the accepted treatment for
typhoid fever, she ordered that a compatibility test with the antibiotic chloromycetin be done on Jorge. Said test was
administered by nurse Josephine Pagente who also gave the patient a dose of triglobe. As she did not observe any adverse
reaction by the patient to chloromycetin, Dr. Blanes ordered the first five hundred milligrams of said antibiotic to be
administered on Jorge at around 9:00 p.m. A second dose was administered on Jorge about three hours later just before
midnight.

At around 1:00 a.m. of January 9, 1987, Dr. Blanes was called as Jorges temperature rose to 41C. The patient also
experienced chills and exhibited respiratory distress, nausea, vomiting, and convulsions. Dr. Blanes put him under oxygen,
used a suction machine, and administered hydrocortisone, temporarily easing the patients convulsions. When he
regained consciousness, the patient was asked by Dr. Blanes whether he had a previous heart ailment or had suffered
from chest pains in the past. Jorge replied he did not.5 After about 15 minutes, however, Jorge again started to vomit,
showed restlessness, and his convulsions returned. Dr. Blanes re-applied the emergency measures taken before and, in
addition, valium was administered. Jorge, however, did not respond to the treatment and slipped into cyanosis, a bluish or
purplish discoloration of the skin or mucous membrane due to deficient oxygenation of the blood. At around 2:00 a.m.,
Jorge died. He was forty years old. The cause of his death was "Ventricular Arrythemia Secondary to Hyperpyrexia and
typhoid fever."

On June 3, 1987, petitioners filed before the Regional Trial Court of Cebu City a complaint6 for damages against
respondents Sisters of Mercy, Sister Rose Palacio, Dr. Marvie Blanes, Dr. Marlyn Rico, and nurse Josephine Pagente. On
September 24, 1987, petitioners amended their complaint to implead respondent Mercy Community Clinic as additional
defendant and to drop the name of Josephine Pagente as defendant since she was no longer connected with respondent
hospital. Their principal contention was that Jorge did not die of typhoid fever.7 Instead, his death was due to the wrongful
administration of chloromycetin. They contended that had respondent doctors exercised due care and diligence, they
would not have recommended and rushed the performance of the Widal Test, hastily concluded that Jorge was suffering
from typhoid fever, and administered chloromycetin without first conducting sufficient tests on the patients
compatibility with said drug. They charged respondent clinic and its directress, Sister Rose Palacio, with negligence in
failing to provide adequate facilities and in hiring negligent doctors and nurses.8

Respondents denied the charges. During the pre-trial conference, the parties agreed to limit the issues on the following:
(1) whether the death of Jorge Reyes was due to or caused by the negligence, carelessness, imprudence, and lack of skill or
foresight on the part of defendants; (2) whether respondent Mercy Community Clinic was negligent in the hiring of its
employees; and (3) whether either party was entitled to damages. The case was then heard by the trial court during
which, in addition to the testimonies of the parties, the testimonies of doctors as expert witnesses were presented.

Petitioners offered the testimony of Dr. Apolinar Vacalares, Chief Pathologist at the Northern Mindanao Training Hospital,
Cagayan de Oro City. On January 9, 1987, Dr. Vacalares performed an autopsy on Jorge Reyes to determine the cause of his
death. However, he did not open the skull to examine the brain. His findings9 showed that the gastro-intestinal tract was
normal and without any ulceration or enlargement of the nodules. Dr. Vacalares testified that Jorge did not die of typhoid
fever. He also stated that he had not seen a patient die of typhoid fever within five days from the onset of the disease.

For their part, respondents offered the testimonies of Dr. Peter Gotiong and Dr. Ibarra Panopio. Dr. Gotiong is a diplomate
in internal medicine whose expertise is microbiology and infectious diseases. He is also a consultant at the Cebu City
Medical Center and an associate professor of medicine at the South Western University College of Medicine in Cebu City.
He had treated over a thousand cases of typhoid patients. According to Dr. Gotiong, the patients history and positive
Widal Test results ratio of 1:320 would make him suspect that the patient had typhoid fever. As to Dr. Vacalares
observation regarding the absence of ulceration in Jorges gastro-intestinal tract, Dr. Gotiong said that such hyperplasia in
the intestines of a typhoid victim may be microscopic. He noted that since the toxic effect of typhoid fever may lead to
meningitis, Dr. Vacalares autopsy should have included an examination of the brain.10

The other doctor presented was Dr. Ibarra Panopio, a member of the American Board of Pathology, examiner of the
Philippine Board of Pathology from 1978 to 1991, fellow of the Philippine Society of Pathologist, associate professor of
the Cebu Institute of Medicine, and chief pathologist of the Andres Soriano Jr. Memorial Hospital in Toledo City. Dr.
Panopio stated that although he was partial to the use of the culture test for its greater reliability in the diagnosis of
typhoid fever, the Widal Test may also be used. Like Dr. Gotiong, he agreed that the 1:320 ratio in Jorges case was already
the maximum by which a conclusion of typhoid fever may be made. No additional information may be deduced from a
higher dilution.11 He said that Dr. Vacalares autopsy on Jorge was incomplete and thus inconclusive.

On September 12, 1991, the trial court rendered its decision absolving respondents from the charges of negligence and
dismissing petitioners action for damages. The trial court likewise dismissed respondents counterclaim, holding that, in
seeking damages from respondents, petitioners were impelled by the honest belief that Jorges death was due to the
latters negligence.

Petitioners brought the matter to the Court of Appeals. On July 31, 1997, the Court of Appeals affirmed the decision of the
trial court.

Hence this petition.

Petitioners raise the following assignment of errors:

I. THE HONORABLE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT THE
DOCTRINE OF RES IPSA LOQUITUR IS NOT APPLICABLE IN THE INSTANT CASE.

II. THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT MADE AN UNFOUNDED
ASSUMPTION THAT THE LEVEL OF MEDICAL PRACTICE IS LOWER IN ILIGAN CITY.

III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT RULED FOR A LESSER STANDARD OF
CARE AND DEGREE OF DILIGENCE FOR MEDICAL PRACTICE IN ILIGAN CITY WHEN IT APPRECIATE[D] NO
DOCTORS NEGLIGENCE IN THE TREATMENT OF JORGE REYES.

Petitioners action is for medical malpractice. This is a particular form of negligence which consists in the failure of a
physician or surgeon to apply to his practice of medicine that degree of care and skill which is ordinarily employed by the
profession generally, under similar conditions, and in like surrounding circumstances.12 In order to successfully pursue
such a claim, a patient must prove that the physician or surgeon either failed to do something which a reasonably prudent
physician or surgeon would have done, or that he or she did something that a reasonably prudent physician or surgeon
would not have done, and that the failure or action caused injury to the patient. 13 There are thus four elements involved in
medical negligence cases, namely: duty, breach, injury, and proximate causation.

In the present case, there is no doubt that a physician-patient relationship existed between respondent doctors and Jorge
Reyes. Respondents were thus duty-bound to use at least the same level of care that any reasonably competent doctor
would use to treat a condition under the same circumstances. It is breach of this duty which constitutes actionable
malpractice.14 As to this aspect of medical malpractice, the determination of the reasonable level of care and the breach
thereof, expert testimony is essential. Inasmuch as the causes of the injuries involved in malpractice actions are
determinable only in the light of scientific knowledge, it has been recognized that expert testimony is usually necessary to
support the conclusion as to causation.15

Res Ipsa Loquitur

There is a case when expert testimony may be dispensed with, and that is under the doctrine of res ipsa loquitur. As held
in Ramos v. Court of Appeals:16

Although generally, expert medical testimony is relied upon in malpractice suits to prove that a physician has done a
negligent act or that he has deviated from the standard medical procedure, when the doctrine of res ipsa loquitor is
availed by the plaintiff, the need for expert medical testimony is dispensed with because the injury itself provides the
proof of negligence. The reason is that the general rule on the necessity of expert testimony applies only to such matters
clearly within the domain of medical science, and not to matters that are within the common knowledge of mankind
which may be testified to by anyone familiar with the facts. Ordinarily, only physicians and surgeons of skill and
experience are competent to testify as to whether a patient has been treated or operated upon with a reasonable degree
of skill and care. However, testimony as to the statements and acts of physicians and surgeons, external appearances, and
manifest conditions which are observable by any one may be given by non-expert witnesses. Hence, in cases where the res
ipsa loquitur is applicable, the court is permitted to find a physician negligent upon proper proof of injury to the patient,
without the aid of expert testimony, where the court from its fund of common knowledge can determine the proper
standard of care. Where common knowledge and experience teach that a resulting injury would not have occurred to the
patient if due care had been exercised, an inference of negligence may be drawn giving rise to an application of the
doctrine of res ipsa loquitur without medical evidence, which is ordinarily required to show not only what occurred but
how and why it occurred. When the doctrine is appropriate, all that the patient must do is prove a nexus between the
particular act or omission complained of and the injury sustained while under the custody and management of the
defendant without need to produce expert medical testimony to establish the standard of care. Resort to res ipsa
loquitor is allowed because there is no other way, under usual and ordinary conditions, by which the patient can obtain
redress for injury suffered by him.

Thus, courts of other jurisdictions have applied the doctrine in the following situations: leaving of a foreign object in the
body of the patient after an operation, injuries sustained on a healthy part of the body which was not under, or in the area,
of treatment, removal of the wrong part of the body when another part was intended, knocking out a tooth while a
patients jaw was under anesthetic for the removal of his tonsils, and loss of an eye while the patient was under the
influence of anesthetic, during or following an operation for appendicitis, among others. 17

Petitioners asserted in the Court of Appeals that the doctrine of res ipsa loquitur applies to the present case because Jorge
Reyes was merely experiencing fever and chills for five days and was fully conscious, coherent, and ambulant when he
went to the hospital. Yet, he died after only ten hours from the time of his admission.

This contention was rejected by the appellate court.

Petitioners now contend that all requisites for the application of res ipsa loquitur were present, namely: (1) the accident
was of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or agency which
caused the injury was under the exclusive control of the person in charge; and (3) the injury suffered must not have been
due to any voluntary action or contribution of the person injured.18

The contention is without merit. We agree with the ruling of the Court of Appeals. In the Ramos case, the question was
whether a surgeon, an anesthesiologist, and a hospital should be made liable for the comatose condition of a patient
scheduled for cholecystectomy.19 In that case, the patient was given anesthesia prior to her operation. Noting that the
patient was neurologically sound at the time of her operation, the Court applied the doctrine of res ipsa loquitur as mental
brain damage does not normally occur in a gallblader operation in the absence of negligence of the anesthesiologist.
Taking judicial notice that anesthesia procedures had become so common that even an ordinary person could tell if it was
administered properly, we allowed the testimony of a witness who was not an expert. In this case, while it is true that the
patient died just a few hours after professional medical assistance was rendered, there is really nothing unusual or
extraordinary about his death. Prior to his admission, the patient already had recurring fevers and chills for five days
unrelieved by the analgesic, antipyretic, and antibiotics given him by his wife. This shows that he had been suffering from
a serious illness and professional medical help came too late for him.

Respondents alleged failure to observe due care was not immediately apparent to a layman so as to justify application
of res ipsa loquitur. The question required expert opinion on the alleged breach by respondents of the standard of care
required by the circumstances. Furthermore, on the issue of the correctness of her diagnosis, no presumption of
negligence can be applied to Dr. Marlyn Rico.As held in Ramos:

. . . . Res ipsa loquitur is not a rigid or ordinary doctrine to be perfunctorily used but a rule to be cautiously applied,
depending upon the circumstances of each case. It is generally restricted to situations in malpractice cases where a
layman is able to say, as a matter of common knowledge and observation, that the consequences of professional care were
not as such as would ordinarily have followed if due care had been exercised. A distinction must be made between the
failure to secure results, and the occurrence of something more unusual and not ordinarily found if the service or
treatment rendered followed the usual procedure of those skilled in that particular practice. It must be conceded that the
doctrine of res ipsa loquitur can have no application in a suit against a physician or a surgeon which involves the merits of
a diagnosis or of a scientific treatment. The physician or surgeon is not required at his peril to explain why any particular
diagnosis was not correct, or why any particular scientific treatment did not produce the desired result.20

Specific Acts of Negligence

We turn to the question whether petitioners have established specific acts of negligence allegedly committed by
respondent doctors.

Petitioners contend that: (1) Dr. Marlyn Rico hastily and erroneously relied upon the Widal test, diagnosed Jorges illness
as typhoid fever, and immediately prescribed the administration of the antibiotic chloromycetin; 21 and (2) Dr. Marvie
Blanes erred in ordering the administration of the second dose of 500 milligrams of chloromycetin barely three hours
after the first was given.22 Petitioners presented the testimony of Dr. Apolinar Vacalares, Chief Pathologist of the Northern
Mindanao Training Hospital, Cagayan de Oro City, who performed an autopsy on the body of Jorge Reyes. Dr. Vacalares
testified that, based on his findings during the autopsy, Jorge Reyes did not die of typhoid fever but of shock
undetermined, which could be due to allergic reaction or chloromycetin overdose. We are not persuaded.

First. While petitioners presented Dr. Apolinar Vacalares as an expert witness, we do not find him to be so as he is not a
specialist on infectious diseases like typhoid fever. Furthermore, although he may have had extensive experience in
performing autopsies, he admitted that he had yet to do one on the body of a typhoid victim at the time he conducted the
postmortem on Jorge Reyes. It is also plain from his testimony that he has treated only about three cases of typhoid fever.
Thus, he testified that:23

ATTY. PASCUAL:

Q Why? Have you not testified earlier that you have never seen a patient who died of typhoid fever?

A In autopsy. But, that was when I was a resident physician yet.

Q But you have not performed an autopsy of a patient who died of typhoid fever?

A I have not seen one.

Q And you testified that you have never seen a patient who died of typhoid fever within five days?

A I have not seen one.

Q How many typhoid fever cases had you seen while you were in the general practice of medicine?

A In our case we had no widal test that time so we cannot consider that the typhoid fever is like this and like that. And the
widal test does not specify the time of the typhoid fever.

Q The question is: how many typhoid fever cases had you seen in your general practice regardless of the cases now you
practice?

A I had only seen three cases.

Q And that was way back in 1964?

A Way back after my training in UP.

Q Clinically?

A Way back before my training.

He is thus not qualified to prove that Dr. Marlyn Rico erred in her diagnosis. Both lower courts were therefore correct in
discarding his testimony, which is really inadmissible.

In Ramos, the defendants presented the testimony of a pulmonologist to prove that brain injury was due to oxygen
deprivation after the patient had bronchospasms24 triggered by her allergic response to a drug,25 and not due to faulty
intubation by the anesthesiologist. As the issue was whether the intubation was properly performed by an
anesthesiologist, we rejected the opinion of the pulmonologist on the ground that he was not: (1) an anesthesiologist who
could enlighten the court about anesthesia practice, procedure, and their complications; nor (2) an allergologist who
could properly advance expert opinion on allergic mediated processes; nor (3) a pharmacologist who could explain the
pharmacologic and toxic effects of the drug allegedly responsible for the bronchospasms.

Second. On the other hand, the two doctors presented by respondents clearly were experts on the subject. They vouched
for the correctness of Dr. Marlyn Ricos diagnosis. Dr. Peter Gotiong, a diplomate whose specialization is infectious
diseases and microbiology and an associate professor at the Southwestern University College of Medicine and the Gullas
College of Medicine, testified that he has already treated over a thousand cases of typhoid fever.26 According to him, when
a case of typhoid fever is suspected, the Widal test is normally used,27 and if the 1:320 results of the Widal test on Jorge
Reyes had been presented to him along with the patients history, his impression would also be that the patient was
suffering from typhoid fever.28 As to the treatment of the disease, he stated that chloromycetin was the drug of
choice.29 He also explained that despite the measures taken by respondent doctors and the intravenous administration of
two doses of chloromycetin, complications of the disease could not be discounted. His testimony is as follows:30

ATTY. PASCUAL:

Q If with that count with the test of positive for 1 is to 320, what treatment if any would be given?

A If those are the findings that would be presented to me, the first thing I would consider would be typhoid fever.

Q And presently what are the treatments commonly used?

A Drug of choice of chloramphenical.

Q Doctor, if given the same patient and after you have administered chloramphenical about 3 1/2 hours later, the patient
associated with chills, temperature - 41oC, what could possibly come to your mind?

A Well, when it is change in the clinical finding, you have to think of complication.

Q And what will you consider on the complication of typhoid?

A One must first understand that typhoid fever is toximia. The problem is complications are caused by toxins produced by
the bacteria . . . whether you have suffered complications to think of -- heart toxic myocardities; then you can consider a
toxic meningitis and other complications and perforations and bleeding in the ilium.

Q Even that 40-year old married patient who received medication of chloromycetin of 500 milligrams intravenous, after
the skin test, and received a second dose of chloromycetin of 500 miligrams, 3 hours later, the patient developed chills . . .
rise in temperature to 41oC, and then about 40 minutes later the temperature rose to 100oF, cardiac rate of 150 per
minute who appeared to be coherent, restless, nauseating, with seizures: what significance could you attach to these
clinical changes?

A I would then think of toxemia, which was toxic meningitis and probably a toxic meningitis because of the high cardiac
rate.

Q Even if the same patient who, after having given intramuscular valium, became conscious and coherent about 20
minutes later, have seizure and cyanosis and rolling of eyeballs and vomitting . . . and death: what significance would you
attach to this development?

A We are probably dealing with typhoid to meningitis.

Q In such case, Doctor, what finding if any could you expect on the post-mortem examination?

A No, the finding would be more on the meninges or covering of the brain.

Q And in order to see those changes would it require opening the skull?

A Yes.

As regards Dr. Vacalares finding during the autopsy that the deceaseds gastro-intestinal tract was normal, Dr. Rico
explained that, while hyperplasia31 in the payers patches or layers of the small intestines is present in typhoid fever, the
same may not always be grossly visible and a microscope was needed to see the texture of the cells.32

Respondents also presented the testimony of Dr. Ibarra T. Panopio who is a member of the Philippine and American
Board of Pathology, an examiner of the Philippine Board of Pathology, and chief pathologist at the MetroCebu Community
Hospital, Perpetual Succor Hospital, and the Andres Soriano Jr. Memorial Medical Center. He stated that, as a clinical
pathologist, he recognized that the Widal test is used for typhoid patients, although he did not encourage its use because a
single test would only give a presumption necessitating that the test be repeated, becoming more conclusive at the second
and third weeks of the disease.33 He corroborated Dr. Gotiongs testimony that the danger with typhoid fever is really the
possible complications which could develop like perforation, hemorrhage, as well as liver and cerebral complications.34 As
regards the 1:320 results of the Widal test on Jorge Reyes, Dr. Panopio stated that no additional information could be
obtained from a higher ratio.35 He also agreed with Dr. Gotiong that hyperplasia in the payers patches may be
microscopic.36

Indeed, the standard contemplated is not what is actually the average merit among all known practitioners from the best
to the worst and from the most to the least experienced, but the reasonable average merit among the ordinarily good
physicians.37 Here, Dr. Marlyn Rico did not depart from the reasonable standard recommended by the experts as she in
fact observed the due care required under the circumstances. Though the Widal test is not conclusive, it remains a
standard diagnostic test for typhoid fever and, in the present case, greater accuracy through repeated testing was
rendered unobtainable by the early death of the patient. The results of the Widal test and the patients history of fever
with chills for five days, taken with the fact that typhoid fever was then prevalent as indicated by the fact that the clinic
had been getting about 15 to 20 typhoid cases a month, were sufficient to give upon any doctor of reasonable skill the
impression that Jorge Reyes had typhoid fever.

Dr. Rico was also justified in recommending the administration of the drug chloromycetin, the drug of choice for typhoid
fever. The burden of proving that Jorge Reyes was suffering from any other illness rested with the petitioners. As they
failed to present expert opinion on this, preponderant evidence to support their contention is clearly absent.
Third. Petitioners contend that respondent Dr. Marvie Blanes, who took over from Dr. Rico, was negligent in ordering the
intravenous administration of two doses of 500 milligrams of chloromycetin at an interval of less than three hours.
Petitioners claim that Jorge Reyes died of anaphylactic shock38 or possibly from overdose as the second dose should have
been administered five to six hours after the first, per instruction of Dr. Marlyn Rico. As held by the Court of Appeals,
however:

That chloromycetin was likewise a proper prescription is best established by medical authority. Wilson, et. al.,
in Harrisons Principle of Internal Medicine, 12th ed. write that chlorampenicol (which is the generic of chloromycetin) is
the drug of choice for typhoid fever and that no drug has yet proven better in promoting a favorable clinical response.
"Chlorampenicol (Chloromycetin) is specifically indicated for bacterial meningitis, typhoid fever, rickettsial infections,
bacteriodes infections, etc." (PIMS Annual, 1994, p. 211) The dosage likewise including the first administration of five
hundred milligrams (500 mg.) at around nine oclock in the evening and the second dose at around 11:30 the same night was
still within medically acceptable limits, since the recommended dose of chloromycetin is one (1) gram every six (6)
hours. (cf. Pediatric Drug Handbook, 1st Ed., Philippine Pediatric Society, Committee on Therapeutics and Toxicology,
1996). The intravenous route is likewise correct. (Mansser, ONick, Pharmacology and Therapeutics) Even if the test was
not administered by the physician-on-duty, the evidence introduced that it was Dra. Blanes who interpreted the results
remain uncontroverted. (Decision, pp. 16-17) Once more, this Court rejects any claim of professional negligence in this
regard.

....

As regards anaphylactic shock, the usual way of guarding against it prior to the administration of a drug, is the skin test of
which, however, it has been observed: "Skin testing with haptenic drugs is generally not reliable. Certain drugs cause
nonspecific histamine release, producing a weal-and-flare reaction in normal individuals. Immunologic activation of mast
cells requires a polyvalent allergen, so a negative skin test to a univalent haptenic drug does not rule out anaphylactic
sensitivity to that drug." (Terr, "Anaphylaxis and Urticaria" in Basic and Clinical Immunology, p. 349) What all this means
legally is that even if the deceased suffered from an anaphylactic shock, this, of itself, would not yet establish the
negligence of the appellee-physicians for all that the law requires of them is that they perform the standard tests and
perform standard procedures. The law cannot require them to predict every possible reaction to all drugs administered.
The onus probandi was on the appellants to establish, before the trial court, that the appellee-physicians ignored standard
medical procedure, prescribed and administered medication with recklessness and exhibited an absence of the
competence and skills expected of general practitioners similarly situated.39

Fourth. Petitioners correctly observe that the medical profession is one which, like the business of a common carrier, is
affected with public interest. Moreover, they assert that since the law imposes upon common carriers the duty of
observing extraordinary diligence in the vigilance over the goods and for the safety of the passengers,40physicians and
surgeons should have the same duty toward their patients.41 They also contend that the Court of Appeals erred when it
allegedly assumed that the level of medical practice is lower in Iligan City, thereby reducing the standard of care and
degree of diligence required from physicians and surgeons in Iligan City.

The standard of extraordinary diligence is peculiar to common carriers. The Civil Code provides:

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

The practice of medicine is a profession engaged in only by qualified individuals.1wphi1 It is a right earned through
years of education, training, and by first obtaining a license from the state through professional board examinations. Such
license may, at any time and for cause, be revoked by the government. In addition to state regulation, the conduct of
doctors is also strictly governed by the Hippocratic Oath, an ancient code of discipline and ethical rules which doctors
have imposed upon themselves in recognition and acceptance of their great responsibility to society. Given these
safeguards, there is no need to expressly require of doctors the observance of "extraordinary" diligence. As it is now, the
practice of medicine is already conditioned upon the highest degree of diligence. And, as we have already noted, the
standard contemplated for doctors is simply the reasonable average merit among ordinarily good physicians. That is
reasonable diligence for doctors or, as the Court of Appeals called it, the reasonable "skill and competence . . . that a
physician in the same or similar locality . . . should apply."

WHEREFORE, the instant petition is DENIED and the decision of the Court of Appeals is AFFIRMED.
SO ORDERED.

[G.R. No. 118141. September 5, 1997]

LEONILA GARCIA-RUEDA, petitioner, vs. WILFREDO L. PASCASIO, RAUL R. ARNAU, ABELARDO L. APORTADERA JR.,
Honorable CONDRADO M. VASQUEZ, all of the Office of the Ombudsman; JESUS F. GUERRERO, PORFIRIO
MACARAEG, and GREGORIO A. ARIZALA, all of the Office of the City Prosecutor, Manila, respondents.

DECISION
ROMERO, J.:

May this Court review the findings of the Office of the Ombudsman? The general rule has been enunciated
in Ocampo v. Ombudsman [1] which states:

In the exercise of its investigative power, this Court has consistently held that courts will not interfere with the discretion
of the fiscal or the Ombudsman to determine the specificity and adequacy of the averments of the offense charged. He may
dismiss the complaint forthwith if he finds it to be insufficient in form and substance or if he otherwise finds no ground to
continue with the inquiry; or he may proceed with the investigation of the complaint if, in his view, it is in due and proper
form.

Does the instant case warrant a departure from the foregoing general rule? When a patient dies soon after surgery
under circumstances which indicate that the attending surgeon and anaesthesiologist may have been guilty of negligence
but upon their being charged, a series of nine prosecutors toss the responsibility of conducting a preliminary
investigation to each other with contradictory recommendations, ping-pong style, perhaps the distraught widow is not to
be blamed if she finally decides to accuse the City Prosecutors at the end of the line for partiality under the Anti-Graft and
Corrupt Practices Act. Nor may she be entirely faulted for finally filing a petition before this Court against the Ombudsman
for grave abuse of discretion in dismissing her complaint against said City Prosecutors on the ground of lack of
evidence. Much as we sympathize with the bereaved widow, however, this Court is of the opinion that the general rule
still finds application in instant case. In other words, the respondent Ombudsman did not commit grave abuse of
discretion in deciding against filing the necessary information against public respondents of the Office of the City
Prosecutor.
The following facts are borne out by the records.
Florencio V. Rueda, husband of petitioner Leonila Garcia-Rueda, underwent surgical operation at the UST hospital
for the removal of a stone blocking his ureter. He was attended by Dr. Domingo Antonio, Jr. who was the surgeon, while
Dr. Erlinda Balatbat-Reyes was the anaesthesiologist. Six hours after the surgery, however, Florencio died of
complications of unknown cause, according to officials of the UST Hospital.[2]
Not satisfied with the findings of the hospital, petitioner requested the National Bureau of Investigation (NBI) to
conduct an autopsy on her husbands body. Consequently, the NBI ruled that Florencios death was due to lack of care by
the attending physician in administering anaesthesia. Pursuant to its findings, the NBI recommended that Dr. Domingo
Antonio and Dr. Erlinda Balatbat-Reyes be charged for Homicide through Reckless Imprudence before the Office of the
City Prosecutor.
During the preliminary investigation, what transpired was a confounding series of events which we shall try to
disentangle. The case was initially assigned to Prosecutor Antonio M. Israel, who had to inhibit himself because he was
related to the counsel of one of the doctors. As a result, the case was re-raffled to Prosecutor Norberto G. Leono who was,
however, disqualified on motion of the petitioner since he disregarded prevailing laws and jurisprudence regarding
preliminary investigation. The case was then referred to Prosecutor Ramon O. Carisma, who issued a resolution
recommending that only Dr. Reyes be held criminally liable and that the complaint against Dr. Antonio be dismissed.
The case took another perplexing turn when Assistant City Prosecutor Josefina Santos Sioson, in the interest of
justice and peace of mind of the parties, recommended that the case be re-raffled on the ground that Prosecutor Carisma
was partial to the petitioner. Thus, the case was transferred to Prosecutor Leoncia R. Dimagiba, where a volte
face occurred again with the endorsement that the complaint against Dr. Reyes be dismissed and instead, a corresponding
information be filed against Dr. Antonio. Petitioner filed a motion for reconsideration, questioning the findings of
Prosecutor Dimagiba.
Pending the resolution of petitioners motion for reconsideration regarding Prosecutor Dimagibas resolution, the
investigative pingpong continued when the case was again assigned to another prosecutor, Eudoxia T. Gualberto, who
recommended that Dr. Reyes be included in the criminal information of Homicide through Reckless Imprudence. While
the recommendation of Prosecutor Gualberto was pending, the case was transferred to Senior State Prosecutor Gregorio
A. Arizala, who resolved to exonerate Dr. Reyes from any wrongdoing, a resolution which was approved by both City
Prosecutor Porfirio G. Macaraeg and City Prosecutor Jesus F. Guerrero.
Aggrieved, petitioner filed graft charges specifically for violation of Section 3(e) of Republic Act No. 3019 [3] against
Prosecutors Guerrero, Macaraeg, and Arizala for manifest partiality in favor of Dr. Reyes before the Office of the
Ombudsman. However, on July 11, 1994, the Ombudsman issued the assailed resolution dismissing the complaint for lack
of evidence.
In fine, petitioner assails the exercise of the discretionary power of the Ombudsman to review the recommendations
of the government prosecutors and to approve and disapprove the same. Petitioner faults the Ombudsman for, allegedly
in grave abuse of discretion, refusing to find that there exists probable cause to hold public respondent City Prosecutors
liable for violation of Section 3(e) of R.A. No. 3019.
Preliminarily, the powers and functions of the Ombudsman have generally been categorized into the following:
investigatory powers, prosecutory power, public assistance function, authority to inquire and obtain information, and
function to adopt, institute and implement preventive measures. [4]
As protector of the people, the Office of the Ombudsman has the power, function and duty to act promptly on
complaints filed in any form or manner against public officials and to investigate any act or omission of any public official
when such act or omission appears to be illegal, unjust, improper or inefficient. [5]
While the Ombudsman has the full discretion to determine whether or not a criminal case should be filed, this Court
is not precluded from reviewing the Ombudsmans action when there is an abuse of discretion, in which case Rule 65 of
the Rules of Court may exceptionally be invoked pursuant to Section I, Article VIII of the 1987 Constitution. [6]
In this regard, grave abuse of discretion has been defined as where a power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility so patent and gross as to amount to evasion of positive duty or virtual
refusal to perform a duty enjoined by, or in contemplation of law. [7]
From a procedural standpoint, it is certainly odd why the successive transfers from one prosecutor to another were
not sufficiently explained in the Resolution of the Ombudsman. Being the proper investigating authority with respect to
misfeasance, non-feasance and malfeasance of public officials, the Ombudsman should have been more vigilant and
assiduous in determining the reasons behind the buckpassing to ensure that no irregularity took place.
Whether such transfers were due to any outside pressure or ulterior motive is a matter of evidence. One would have
expected the Ombudsman, however, to inquire into what could hardly qualify as standard operating procedure, given the
surrounding circumstances of the case.
While it is true that a preliminary investigation is essentially inquisitorial, and is often the only means to discover
who may be charged with a crime, its function is merely to determine the existence of probable cause. [8] Probable cause
has been defined as the existence of such fact and circumstances as would excite the belief, in a reasonable mind, acting
on the facts within the knowledge of the prosecution, that the person charged was guilty of the crime for which he was
prosecuted.[9]
Probable cause is a reasonable ground of presumption that a matter is, or may be, well founded, such a state of facts
in the mind of the prosecutor as would lead a person of ordinary caution and prudence to believe, or entertain an honest
or strong suspicion, that a thing is so. The term does not mean actual and positive cause nor does it import absolute
certainty. It is merely based on opinion and reasonable belief. Thus, a finding of probable cause does not require an
inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or
omission complained of constitutes the offense charged. Precisely, there is a trial for the reception of evidence of the
prosecution in support of the charge.[10]
In the instant case, no less than the NBI pronounced after conducting an autopsy that there was indeed negligence
on the part of the attending physicians in administering the anaesthesia. [11] The fact of want of competence or diligence is
evidentiary in nature, the veracity of which can best be passed upon after a full-blown trial for it is virtually impossible to
ascertain the merits of a medical negligence case without extensive investigation, research, evaluation and consultations
with medical experts. Clearly, the City Prosecutors are not in a competent position to pass judgment on such a technical
matter, especially when there are conflicting evidence and findings. The bases of a partys accusation and defenses are
better ventilated at the trial proper than at the preliminary investigation.
A word on medical malpractice or negligence cases.

In its simplest terms, the type of lawsuit which has been called medical malpractice or, more appropriately, medical
negligence, is that type of claim which a victim has available to him or her to redress a wrong committed by a medical
professional which has caused bodily harm.

In order to successfully pursue such a claim, a patient must prove that a health care provider, in most cases a physician,
either failed to do something which a reasonably prudent health care provider would have done, or that he or she did
something that a reasonably prudent provider would not have done; and that that failure or action caused injury to the
patient.[12]

Hence, there are four elements involved in medical negligence cases: duty, breach, injury and proximate causation.
Evidently, when the victim employed the services of Dr. Antonio and Dr. Reyes, a physician-patient relationship was
created. In accepting the case, Dr. Antonio and Dr. Reyes in effect represented that, having the needed training and skill
possessed by physicians and surgeons practicing in the same field, they will employ such training, care and skill in the
treatment of their patients.[13] They have a duty to use at least the same level of care that any other reasonably competent
doctor would use to treat a condition under the same circumstances. The breach of these professional duties of skill and
care, or their improper performance, by a physician surgeon whereby the patient is injured in body or in health,
constitutes actionable malpractice.[14] Consequently, in the event that any injury results to the patient from want of due
care or skill during the operation, the surgeons may be held answerable in damages for negligence. [15]
Moreover, in malpractice or negligence cases involving the administration of anaesthesia, the necessity of expert
testimony and the availability of the charge of res ipsa loquitur to the plaintiff, have been applied in actions against
anaesthesiologists to hold the defendant liable for the death or injury of a patient under excessive or improper
anaesthesia.[16] Essentially, it requires two-pronged evidence: evidence as to the recognized standards of the medical
community in the particular kind of case, and a showing that the physician in question negligently departed from this
standard in his treatment.[17]
Another element in medical negligence cases is causation which is divided into two inquiries: whether the doctors
actions in fact caused the harm to the patient and whether these were the proximate cause of the patients
injury.[18] Indeed here, a causal connection is discernible from the occurrence of the victims death after the negligent act
of the anaesthesiologist in administering the anesthesia, a fact which, if confirmed, should warrant the filing of the
appropriate criminal case. To be sure, the allegation of negligence is not entirely baseless. Moreover, the NBI deduced that
the attending surgeons did not conduct the necessary interview of the patient prior to the operation. It appears that the
cause of the death of the victim could have been averted had the proper drug been applied to cope with the symptoms of
malignant hyperthermia. Also, we cannot ignore the fact that an antidote was readily available to counteract whatever
deleterious effect the anaesthesia might produce. [19] Why these precautionary measures were disregarded must be
sufficiently explained.
The City Prosecutors were charged with violating Section 3(e) of the Anti-Graft and Corrupt Practices Act which
requires the following facts:

1. The accused is a public officer discharging administrative or official functions or private persons charged in conspiracy
with them;

2. The public officer committed the prohibited act during the performance of his official duty or in relation to his public
position;

3. The public officer acted with manifest partiality, evident bad faith or gross, inexcusable negligence; and

4. His action caused undue injury to the Government or any private party, or gave any party any unwarranted benefit,
advantage or preference to such parties. [20]

Why did the complainant, petitioner in instant case, elect to charge respondents under the above law?
 While a party who feels himself aggrieved is at liberty to choose the appropriate weapon from the armory, it is with
no little surprise that this Court views the choice made by the complainant widow.
To our mind, the better and more logical remedy under the circumstances would have been to appeal the resolution
of the City Prosecutors dismissing the criminal complaint to the Secretary of Justice under the Department of Justices
Order No. 223, [21] otherwise known as the 1993 Revised Rules on Appeals From Resolutions In Preliminary
Investigations/Reinvestigations, as amended by Department Order No. 359, Section 1 of which provides:

Section 1. What May Be Appealed. - Only resolutions of the Chief State Prosecutor/Regional State Prosecutor/Provincial
or City Prosecutor dismissing a criminal complaint may be the subject of an appeal to the Secretary of Justice except as
otherwise provided in Section 4 hereof.

What action may the Secretary of Justice take on the appeal? Section 9 of Order No. 223 states: The Secretary of
Justice may reverse, affirm or modify the appealed resolution. On the other hand, He may motu proprio or on motion of
the appellee, dismiss outright the appeal on specified grounds. [22]
In exercising his discretion under the circumstances, the Ombudsman acted within his power and authority in
dismissing the complaint against the Prosecutors and this Court will not interfere with the same.
WHEREFORE, in view of the foregoing, the instant petition is DISMISSED, without prejudice to the filing of an
appeal by the petitioner with the Secretary of Justice assailing the dismissal of her criminal complaint by the respondent
City Prosecutors. No costs.
SO ORDERED.

G.R. No. 124354 April 11, 2002

ROGELIO E. RAMOS and ERLINDA RAMOS, in their own behalf and as natural guardians of the minors, ROMMEL
RAMOS, ROY RODERICK RAMOS, and RON RAYMOND RAMOS, petitioners,
vs.
COURT OF APPEALS, DE LOS SANTOS MEDICAL CENTER, DR. ORLINO HOSAKA and DR. PERFECTA
GUTIERREZ, respondents.

RESOLUTION

KAPUNAN, J.:

Private respondents De Los Santos Medical Center, Dr. Orlino Hosaka and Dr. Perfecta Gutierrez move for a
reconsideration of the Decision, dated December 29, 1999, of this Court holding them civilly liable for petitioner Erlinda
Ramos comatose condition after she delivered herself to them for their professional care and management.

For better understanding of the issues raised in private respondents respective motions, we will briefly restate the facts
of the case as follows:

Sometime in 1985, petitioner Erlinda Ramos, after seeking professional medical help, was advised to undergo an
operation for the removal of a stone in her gall bladder (cholecystectomy). She was referred to Dr. Hosaka, a surgeon, who
agreed to perform the operation on her. The operation was scheduled for June 17, 1985 at 9:00 in the morning at private
respondent De Los Santos Medical Center (DLSMC). Since neither petitioner Erlinda nor her husband, petitioner Rogelio,
knew of any anesthesiologist, Dr. Hosaka recommended to them the services of Dr. Gutierrez.

Petitioner Erlinda was admitted to the DLSMC the day before the scheduled operation. By 7:30 in the morning of the
following day, petitioner Erlinda was already being prepared for operation. Upon the request of petitioner Erlinda, her
sister-in-law, Herminda Cruz, who was then Dean of the College of Nursing at the Capitol Medical Center, was allowed to
accompany her inside the operating room.

At around 9:30 in the morning, Dr. Hosaka had not yet arrived so Dr. Gutierrez tried to get in touch with him by phone.
Thereafter, Dr. Gutierrez informed Cruz that the operation might be delayed due to the late arrival of Dr. Hosaka. In the
meantime, the patient, petitioner Erlinda said to Cruz, "Mindy, inip na inip na ako, ikuha mo ako ng ibang Doctor."
By 10:00 in the morning, when Dr. Hosaka was still not around, petitioner Rogelio already wanted to pull out his wife
from the operating room. He met Dr. Garcia, who remarked that he was also tired of waiting for Dr. Hosaka. Dr. Hosaka
finally arrived at the hospital at around 12:10 in the afternoon, or more than three (3) hours after the scheduled
operation.

Cruz, who was then still inside the operating room, heard about Dr. Hosakas arrival. While she held the hand of Erlinda,
Cruz saw Dr. Gutierrez trying to intubate the patient. Cruz heard Dr. Gutierrez utter: "ang hirap ma-intubate nito, mali
yata ang pagkakapasok. O lumalaki ang tiyan." Cruz noticed a bluish discoloration of Erlindas nailbeds on her left hand.
She (Cruz) then heard Dr. Hosaka instruct someone to call Dr. Calderon, another anesthesiologist. When he arrived, Dr.
Calderon attempted to intubate the patient. The nailbeds of the patient remained bluish, thus, she was placed in a
trendelenburg position a position where the head of the patient is placed in a position lower than her feet. At this point,
Cruz went out of the operating room to express her concern to petitioner Rogelio that Erlindas operation was not going
well.

Cruz quickly rushed back to the operating room and saw that the patient was still in trendelenburg position. At almost
3:00 in the afternoon, she saw Erlinda being wheeled to the Intensive Care Unit (ICU). The doctors explained to petitioner
Rogelio that his wife had bronchospasm. Erlinda stayed in the ICU for a month. She was released from the hospital only
four months later or on November 15, 1985. Since the ill-fated operation, Erlinda remained in comatose condition until
she died on August 3, 1999.1

Petitioners filed with the Regional Trial Court of Quezon City a civil case for damages against private respondents. After
due trial, the court a quo rendered judgment in favor of petitioners. Essentially, the trial court found that private
respondents were negligent in the performance of their duties to Erlinda. On appeal by private respondents, the Court of
Appeals reversed the trial courts decision and directed petitioners to pay their "unpaid medical bills" to private
respondents.

Petitioners filed with this Court a petition for review on certiorari. The private respondents were then required to submit
their respective comments thereon. On December 29, 1999, this Court promulgated the decision which private
respondents now seek to be reconsidered. The dispositive portion of said Decision states:

WHEREFORE, the decision and resolution of the appellate court appealed from are hereby modified so as to
award in favor of petitioners, and solidarily against private respondents the following: 1) P1,352,000.00 as
actual damages computed as of the date of promulgation of this decision plus a monthly payment of P8,000.00
up to the time that petitioner Erlinda Ramos expires or miraculously survives; 2) P2,000,000.00 as moral
damages, 3) P1,500,000.00 as temperate damages; 4) P100,000.00 each exemplary damages and attorneys fees;
and 5) the costs of the suit.2

In his Motion for Reconsideration, private respondent Dr. Hosaka submits the following as grounds therefor:

THE HONORABLE SUPREME COURT COMMITTED REVERSIBLE ERROR WHEN IT HELD RESPONDENT DR. HOSAKA
LIABLE ON THE BASIS OF THE "CAPTAIN-OF-THE-SHIP" DOCTRINE.

II

THE HONORABLE SUPREME COURT ERRED IN HOLDING RESPONDENT DR. HOSAKA LIABLE DESPITE THE FACT THAT
NO NEGLIGENCE CAN BE ATTRIBUTABLE TO HIM.

III

ASSUMING WITHOUT ADMITTING THAT RESPONDENT DR. HOSAKA IS LIABLE, THE HONORABLE SUPREME COURT
ERRED IN AWARDING DAMAGES THAT WERE CLEARLY EXCESSIVE AND WITHOUT LEGAL BASIS.3

Private respondent Dr. Gutierrez, for her part, avers that:

 A. THE HONORABLE SUPREME COURT MAY HAVE INADVERTENTLY OVERLOOKED THE FACT THAT THE
COURT OF APPEALS DECISION DATED 29 MAY 1995 HAD ALREADY BECOME FINAL AND EXECUTORY AS OF
25 JUNE 1995, THEREBY DEPRIVING THIS HONORABLE COURT OF JURISDICTION OVER THE INSTANT
PETITION;

B. THE HONORABLE SUPREME COURT MAY HAVE INADVERTENTLY OVERLOOKED SEVERAL MATERIAL
FACTUAL CIRCUMSTANCES WHICH, IF PROPERLY CONSIDERED, WOULD INDUBITABLY LEAD TO NO OTHER
CONCLUSION BUT THAT PRIVATE RESPONDENT DOCTORS WERE NOT GUILTY OF ANY NEGLIGENCE IN
RESPECT OF THE INSTANT CASE;

B.1 RESPONDENT DOCTOR PERFECTA GUTIERREZ HAS SUFFICIENTLY DISCHARGED THE BURDEN
OF EVIDENCE BY SUBSTANTIAL PROOF OF HER COMPLIANCE WITH THE STANDARDS OF DUE CARE
EXPECTED IN HER RESPECTIVE FIELD OF MEDICAL SPECIALIZATION.

B.2 RESPONDENT DOCTOR PERFECTA GUTIERREZ HAS SUFFICIENTLY DISCHARGED THE BURDEN
OF EVIDENCE BY SUBSTANTIAL PROOF OF HER HAVING SUCCESSFULLY INTUBATED PATIENT
ERLINDA RAMOS

C. THE SUPREME COURT MAY HAVE INADVERTENTLY PLACED TOO MUCH RELIANCE ON THE TESTIMONY OF
PETITIONERS WITNESS HERMINDA CRUZ, DESPITE THE EXISTENCE OF SEVERAL FACTUAL CIRCUMSTANCES
WHICH RENDERS DOUBT ON HER CREDIBILITY

D. THE SUPREME COURT MAY HAVE INADVERTENTLY DISREGARDED THE EXPERT TESTIMONY OF DR.
JAMORA AND DRA. CALDERON

E. THE HONORABLE SUPREME COURT MAY HAVE INADVERTENTLY AWARDED DAMAGES TO PETITIONERS
DESPITE THE FACT THAT THERE WAS NO NEGLIGENCE ON THE PART OF RESPONDENT DOCTOR.4

Private respondent De Los Santos Medical Center likewise moves for reconsideration on the following grounds:

THE HONORABLE COURT ERRED IN GIVING DUE COURSE TO THE INSTANT PETITION AS THE DECISION OF THE
HONORABLE COURT OF APPEALS HAD ALREADY BECOME FINAL AND EXECUTORY

II

THE HONORABLE SUPREME COURT ERRED IN FINDING THAT AN EMPLOYER-EMPLOYEE [RELATIONSHIP] EXISTS
BETWEEN RESPONDENT DE LOS SANTOS MEDICAL CENTER AND DRS. ORLINO HOSAKA AND PERFECTA GUTIERREZ

III

THE HONORABLE SUPREME COURT ERRED IN FINDING THAT RESPONDENT DE LOS SANTOS MEDICAL CENTER IS
SOLIDARILY LIABLE WITH RESPONDENT DOCTORS

IV

THE HONORABLE SUPREME COURT ERRED IN INCREASING THE AWARD OF DAMAGES IN FAVOR OF PETITIONERS.5

In the Resolution of February 21, 2000, this Court denied the motions for reconsideration of private respondents Drs.
Hosaka and Gutierrez. They then filed their respective second motions for reconsideration. The Philippine College of
Surgeons filed its Petition-in-Intervention contending in the main that this Court erred in holding private respondent Dr.
Hosaka liable under the captain of the ship doctrine. According to the intervenor, said doctrine had long been abandoned
in the United States in recognition of the developments in modern medical and hospital practice.6 The Court noted these
pleadings in the Resolution of July 17, 2000.7
On March 19, 2001, the Court heard the oral arguments of the parties, including the intervenor. Also present during the
hearing were the amicii curiae: Dr. Felipe A. Estrella, Jr., Consultant of the Philippine Charity Sweepstakes, former
Director of the Philippine General Hospital and former Secretary of Health; Dr. Iluminada T. Camagay, President of the
Philippine Society of Anesthesiologists, Inc. and Professor and Vice-Chair for Research, Department of Anesthesiology,
College of Medicine-Philippine General Hospital, University of the Philippines; and Dr. Lydia M. Egay, Professor and Vice-
Chair for Academics, Department of Anesthesiology, College of Medicine-Philippine General Hospital, University of the
Philippines.

The Court enumerated the issues to be resolved in this case as follows:

1. WHETHER OR NOT DR. ORLINO HOSAKA (SURGEON) IS LIABLE FOR NEGLIGENCE;

2. WHETHER OR NOT DR. PERFECTA GUTIERREZ (ANESTHESIOLOGIST) IS LIABLE FOR NEGLIGENCE; AND

3. WHETHER OR NOT THE HOSPITAL (DELOS SANTOS MEDICAL CENTER) IS LIABLE FOR ANY ACT OF
NEGLIGENCE COMMITTED BY THEIR VISITING CONSULTANT SURGEON AND ANESTHESIOLOGIST.8

We shall first resolve the issue pertaining to private respondent Dr. Gutierrez. She maintains that the Court erred in
finding her negligent and in holding that it was the faulty intubation which was the proximate cause of Erlindas comatose
condition. The following objective facts allegedly negate a finding of negligence on her part: 1) That the outcome of the
procedure was a comatose patient and not a dead one; 2) That the patient had a cardiac arrest; and 3) That the patient
was revived from that cardiac arrest.9 In effect, Dr. Gutierrez insists that, contrary to the finding of this Court, the
intubation she performed on Erlinda was successful.

Unfortunately, Dr. Gutierrez claim of lack of negligence on her part is belied by the records of the case. It has been
sufficiently established that she failed to exercise the standards of care in the administration of anesthesia on a patient.
Dr. Egay enlightened the Court on what these standards are:

x x x What are the standards of care that an anesthesiologist should do before we administer anesthesia? The
initial step is the preparation of the patient for surgery and this is a pre-operative evaluation because the
anesthesiologist is responsible for determining the medical status of the patient, developing the anesthesia plan
and acquainting the patient or the responsible adult particularly if we are referring with the patient or to adult
patient who may not have, who may have some mental handicaps of the proposed plans. We do pre-operative
evaluation because this provides for an opportunity for us to establish identification and personal acquaintance
with the patient. It also makes us have an opportunity to alleviate anxiety, explain techniques and risks to the
patient, given the patient the choice and establishing consent to proceed with the plan. And lastly, once this has
been agreed upon by all parties concerned the ordering of pre-operative medications. And following this line at
the end of the evaluation we usually come up on writing, documentation is very important as far as when we
train an anesthesiologist we always emphasize this because we need records for our protection, well, records.
And it entails having brief summary of patient history and physical findings pertinent to anesthesia, plan,
organize as a problem list, the plan anesthesia technique, the plan post operative, pain management if
appropriate, special issues for this particular patient. There are needs for special care after surgery and if it so it
must be written down there and a request must be made known to proper authorities that such and such care is
necessary. And the request for medical evaluation if there is an indication. When we ask for a cardio-pulmonary
clearance it is not in fact to tell them if this patient is going to be fit for anesthesia, the decision to give anesthesia
rests on the anesthesiologist. What we ask them is actually to give us the functional capacity of certain systems
which maybe affected by the anesthetic agent or the technique that we are going to use. But the burden of
responsibility in terms of selection of agent and how to administer it rest on the anesthesiologist. 10

The conduct of a preanesthetic/preoperative evaluation prior to an operation, whether elective or emergency, cannot be
dispensed with.11 Such evaluation is necessary for the formulation of a plan of anesthesia care suited to the needs of the
patient concerned.

Pre-evaluation for anesthesia involves taking the patients medical history, reviewing his current drug therapy,
conducting physical examination, interpreting laboratory data, and determining the appropriate prescription of
preoperative medications as necessary to the conduct of anesthesia.12
Physical examination of the patient entails not only evaluating the patients central nervous system, cardiovascular
system and lungs but also the upper airway. Examination of the upper airway would in turn include an analysis of the
patients cervical spine mobility, temporomandibular mobility, prominent central incisors, deceased or artificial teeth,
ability to visualize uvula and the thyromental distance.13

Nonetheless, Dr. Gutierrez omitted to perform a thorough preoperative evaluation on Erlinda. As she herself admitted,
she saw Erlinda for the first time on the day of the operation itself, one hour before the scheduled operation. She
auscultated14 the patients heart and lungs and checked the latters blood pressure to determine if Erlinda was indeed fit
for operation.15 However, she did not proceed to examine the patients airway. Had she been able to check petitioner
Erlindas airway prior to the operation, Dr. Gutierrez would most probably not have experienced difficulty in intubating
the former, and thus the resultant injury could have been avoided. As we have stated in our Decision:

In the case at bar, respondent Dra. Gutierrez admitted that she saw Erlinda for the first time on the day of the
operation itself, on 17 June 1985. Before this date, no prior consultations with, or pre-operative evaluation of
Erlinda was done by her. Until the day of the operation, respondent Dra. Gutierrez was unaware of the
physiological make-up and needs of Erlinda. She was likewise not properly informed of the possible difficulties
she would face during the administration of anesthesia to Erlinda. Respondent Dra. Gutierrez act of seeing her
patient for the first time only an hour before the scheduled operative procedure was, therefore, an act of
exceptional negligence and professional irresponsibility. The measures cautioning prudence and vigilance in
dealing with human lives lie at the core of the physicians centuries-old Hippocratic Oath. Her failure to follow
this medical procedure is, therefore, a clear indicia of her negligence.16

Further, there is no cogent reason for the Court to reverse its finding that it was the faulty intubation on Erlinda that
caused her comatose condition. There is no question that Erlinda became comatose after Dr. Gutierrez performed a
medical procedure on her. Even the counsel of Dr. Gutierrez admitted to this fact during the oral arguments:

CHIEF JUSTICE:

Mr. Counsel, you started your argument saying that this involves a comatose patient?

ATTY. GANA:

Yes, Your Honor.

CHIEF JUSTICE:

How do you mean by that, a comatose, a comatose after any other acts were done by Dr. Gutierrez or
comatose before any act was done by her?

ATTY. GANA:

No, we meant comatose as a final outcome of the procedure.

CHIEF JUSTICE:

Meaning to say, the patient became comatose after some intervention, professional acts have been
done by Dr. Gutierrez?

ATTY. GANA:

Yes, Your Honor.

CHIEF JUSTICE:

In other words, the comatose status was a consequence of some acts performed by D. Gutierrez?
 ATTY. GANA:

It was a consequence of the well, (interrupted)

CHIEF JUSTICE:

An acts performed by her, is that not correct?

ATTY. GANA:

Yes, Your Honor.

CHIEF JUSTICE:

Thank you.17

What is left to be determined therefore is whether Erlindas hapless condition was due to any fault or negligence on the
part of Dr. Gutierrez while she (Erlinda) was under the latters care. Dr. Gutierrez maintains that the bronchospasm and
cardiac arrest resulting in the patients comatose condition was brought about by the anaphylactic reaction of the patient
to Thiopental Sodium (pentothal).18 In the Decision, we explained why we found Dr. Gutierrez theory unacceptable. In the
first place, Dr. Eduardo Jamora, the witness who was presented to support her (Dr. Gutierrez) theory, was a
pulmonologist. Thus, he could not be considered an authority on anesthesia practice and procedure and their
complications.19

Secondly, there was no evidence on record to support the theory that Erlinda developed an allergic reaction to pentothal.
Dr. Camagay enlightened the Court as to the manifestations of an allergic reaction in this wise:

DR. CAMAGAY:

All right, let us qualify an allergic reaction. In medical terminology an allergic reaction is something
which is not usual response and it is further qualified by the release of a hormone called histamine and
histamine has an effect on all the organs of the body generally release because the substance that
entered the body reacts with the particular cell, the mass cell, and the mass cell secretes this histamine.
In a way it is some form of response to take away that which is not mine, which is not part of the body.
So, histamine has multiple effects on the body. So, one of the effects as you will see you will have
redness, if you have an allergy you will have tearing of the eyes, you will have swelling, very crucial
swelling sometimes of the larynges which is your voice box main airway, that swelling may be enough
to obstruct the entry of air to the trachea and you could also have contraction, constriction of the
smaller airways beyond the trachea, you see you have the trachea this way, we brought some visual
aids but unfortunately we do not have a projector. And then you have the smaller airways, the bronchi
and then eventually into the mass of the lungs you have the bronchus. The difference is that these tubes
have also in their walls muscles and this particular kind of muscles is smooth muscle so, when
histamine is released they close up like this and that phenomenon is known as bronco spasm. However,
the effects of histamine also on blood vessels are different. They dilate blood vessel open up and the
patient or whoever has this histamine release has hypertension or low blood pressure to a point that
the patient may have decrease blood supply to the brain and may collapse so, you may have people
who have this.20

These symptoms of an allergic reaction were not shown to have been extant in Erlindas case. As we held in our Decision,
"no evidence of stridor, skin reactions, or wheezing some of the more common accompanying signs of an allergic
reaction appears on record. No laboratory data were ever presented to the court."21

Dr. Gutierrez, however, insists that she successfully intubated Erlinda as evidenced by the fact that she was revived after
suffering from cardiac arrest. Dr. Gutierrez faults the Court for giving credence to the testimony of Cruz on the matter of
the administration of anesthesia when she (Cruz), being a nurse, was allegedly not qualified to testify thereon. Rather, Dr.
Gutierrez invites the Courts attention to her synopsis on what transpired during Erlindas intubation:
 12:15 p.m. Patient was inducted with sodium pentothal 2.5% (250 mg) given by slow IV. 02 was started by mask.
After pentothal injection this was followed by IV injection of Norcuron 4mg. After 2 minutes 02 was given by
positive pressure for about one minute. Intubation with endotracheal tube 7.5 m in diameter was done with
slight difficulty (short neck & slightly prominent upper teeth) chest was examined for breath sounds & checked
if equal on both sides. The tube was then anchored to the mouth by plaster & cuff inflated. Ethrane 2% with 02 4
liters was given. Blood pressure was checked 120/80 & heart rate regular and normal 90/min.

12:25 p.m. After 10 minutes patient was cyanotic. Ethrane was discontinued & 02 given alone. Cyanosis
disappeared. Blood pressure and heart beats stable.

12:30 p.m. Cyanosis again reappeared this time with sibilant and sonorous rales all over the chest. D_5%_H20 &
1 ampule of aminophyline by fast drip was started. Still the cyanosis was persistent. Patient was connected to a
cardiac monitor. Another ampule of of [sic] aminophyline was given and solu cortef was given.

12:40 p.m. There was cardiac arrest. Extra cardiac massage and intercardiac injection of adrenalin was given &
heart beat reappeared in less than one minute. Sodium bicarbonate & another dose of solu cortef was given by
IV. Cyanosis slowly disappeared & 02 continuously given & assisted positive pressure. Laboratory exams done
(see results in chart).

Patient was transferred to ICU for further management.22

From the foregoing, it can be allegedly seen that there was no withdrawal (extubation) of the tube. And the fact that the
cyanosis allegedly disappeared after pure oxygen was supplied through the tube proved that it was properly placed.

The Court has reservations on giving evidentiary weight to the entries purportedly contained in Dr. Gutierrez synopsis. It
is significant to note that the said record prepared by Dr. Gutierrez was made only after Erlinda was taken out of the
operating room. The standard practice in anesthesia is that every single act that the anesthesiologist performs must be
recorded. In Dr. Gutierrez case, she could not account for at least ten (10) minutes of what happened during the
administration of anesthesia on Erlinda. The following exchange between Dr. Estrella, one of the amicii curiae, and Dr.
Gutierrez is instructive:

DR. ESTRELLA

Q You mentioned that there were two (2) attempts in the intubation period?

DR. GUTIERREZ

Yes.

Q There were two attempts. In the first attempt was the tube inserted or was the laryngoscope only
inserted, which was inserted?

A All the laryngoscope.

Q All the laryngoscope. But if I remember right somewhere in the re-direct, a certain lawyer, you were asked
that you did a first attempt and the question was did you withdraw the tube? And you said you never
withdrew the tube, is that right?

A Yes.

Q Yes. And so if you never withdrew the tube then there was no, there was no insertion of the tube during
that first attempt. Now, the other thing that we have to settle here is when cyanosis occurred, is it recorded in
the anesthesia record when the cyanosis, in your recording when did the cyanosis occur?

A (sic)
Q Is it a standard practice of anesthesia that whatever you do during that period or from the time of
induction to the time that you probably get the patient out of the operating room that every single action that
you do is so recorded in your anesthesia record?

A I was not able to record everything I did not have time anymore because I did that after the, when the
patient was about to leave the operating room. When there was second cyanosis already that was the
(interrupted)

Q When was the first cyanosis?

A The first cyanosis when I was (interrupted)

Q What time, more or less?

A I think it was 12:15 or 12:16.

Q Well, if the record will show you started induction at 12:15?

A Yes, Your Honor.

Q And the first medication you gave was what?

A The first medication, no, first the patient was oxygenated for around one to two minutes.

Q Yes, so, that is about 12:13?

A Yes, and then, I asked the resident physician to start giving the pentothal very slowly and that was around
one minute.

Q So, that is about 12:13 no, 12:15, 12:17?

A Yes, and then, after one minute another oxygenation was given and after (interrupted)

Q 12:18?

A Yes, and then after giving the oxygen we start the menorcure which is a relaxant. After that relaxant
(interrupted)

Q After that relaxant, how long do you wait before you do any manipulation?

A Usually you wait for two minutes or three minutes.

Q So, if our estimate of the time is accurate we are now more or less 12:19, is that right?

A Maybe.

Q 12:19. And at that time, what would have been done to this patient?

A After that time you examine the, if there is relaxation of the jaw which you push it downwards and when I
saw that the patient was relax because that monorcure is a relaxant, you cannot intubate the patient or insert
the laryngoscope if it is not keeping him relax. So, my first attempt when I put the laryngoscope on I saw the
trachea was deeply interiorly. So, what I did ask "mahirap ata ito ah." So, I removed the laryngoscope and
oxygenated again the patient.
Q So, more or less you attempted to do an intubation after the first attempt as you claimed that it was only
the laryngoscope that was inserted.

A Yes.

Q And in the second attempt you inserted the laryngoscope and now possible intubation?

A Yes.

Q And at that point, you made a remark, what remark did you make?

A I said "mahirap ata ito" when the first attempt I did not see the trachea right away. That was when I
(interrupted)

Q That was the first attempt?

A Yes.

Q What about the second attempt?

A On the second attempt I was able to intubate right away within two to three seconds.

Q At what point, for purposes of discussion without accepting it, at what point did you make the comment
"na mahirap ata to intubate, mali ata ang pinasukan"

A I did not say "mali ata ang pinasukan" I never said that.

Q Well, just for the information of the group here the remarks I am making is based on the documents that
were forwarded to me by the Supreme Court. That is why for purposes of discussion I am trying to clarify this
for the sake of enlightenment. So, at what point did you ever make that comment?

A Which one, sir?

Q The "mahirap intubate ito" assuming that you (interrupted)

A Iyon lang, that is what I only said "mahirap intubate (interrupted)

Q At what point?

A When the first attempt when I inserted the laryngoscope for the first time.

Q So, when you claim that at the first attempt you inserted the laryngoscope, right?

A Yes.

Q But in one of the recordings somewhere at the, somewhere in the transcript of records that when the
lawyer of the other party try to inquire from you during the first attempt that was the time when "mayroon ba
kayong hinugot sa tube, I do not remember the page now, but it seems to me it is there. So, that it was on the
second attempt that (interrupted)

A I was able to intubate.

Q And this is more or less about what time 12:21?

 A Maybe, I cannot remember the time, Sir.

Q Okay, assuming that this was done at 12:21 and looking at the anesthesia records from 12:20 to 12:30
there was no recording of the vital signs. And can we presume that at this stage there was already some
problems in handling the patient?

A Not yet.

Q But why are there no recordings in the anesthesia record?

A I did not have time.

Q Ah, you did not have time, why did you not have time?

A Because it was so fast, I really (at this juncture the witness is laughing)

Q No, I am just asking. Remember I am not here not to pin point on anybody I am here just to more or less
clarify certainty more ore less on the record.

A Yes, Sir.

Q And so it seems that there were no recording during that span of ten (10) minutes. From 12:20 to 12:30,
and going over your narration, it seems to me that the cyanosis appeared ten (10) minutes after induction, is
that right?

A Yes.

Q And that is after induction 12:15 that is 12:25 that was the first cyanosis?

A Yes.

Q And that the 12:25 is after the 12:20?

A We cannot (interrupted)

Q Huwag ho kayong makuwan, we are just trying to enlighten, I am just going over the record ano, kung mali
ito kuwan eh di ano. So, ganoon po ano, that it seems to me that there is no recording from 12:20 to 12:30, so, I
am just wondering why there were no recordings during the period and then of course the second cyanosis,
after the first cyanosis. I think that was the time Dr. Hosaka came in?

A No, the first cyanosis (interrupted).23

We cannot thus give full credence to Dr. Gutierrez synopsis in light of her admission that it does not fully reflect the
events that transpired during the administration of anesthesia on Erlinda. As pointed out by Dr. Estrella, there was a ten-
minute gap in Dr. Gutierrez synopsis, i.e., the vital signs of Erlinda were not recorded during that time. The absence of
these data is particularly significant because, as found by the trial court, it was the absence of oxygen supply for four (4)
to five (5) minutes that caused Erlindas comatose condition.

On the other hand, the Court has no reason to disbelieve the testimony of Cruz. As we stated in the Decision, she is
competent to testify on matters which she is capable of observing such as, the statements and acts of the physician and
surgeon, external appearances and manifest conditions which are observable by any one. 24 Cruz, Erlindas sister-in-law,
was with her inside the operating room. Moreover, being a nurse and Dean of the Capitol Medical Center School of
Nursing at that, she is not entirely ignorant of anesthetic procedure. Cruz narrated that she heard Dr. Gutierrez remark,
"Ang hirap ma-intubate nito, mali yata ang pagkakapasok. O lumalaki ang tiyan." She observed that the nailbeds of Erlinda
became bluish and thereafter Erlinda was placed in trendelenburg position.25Cruz further averred that she noticed that
the abdomen of Erlinda became distended.26

The cyanosis (bluish discoloration of the skin or mucous membranes caused by lack of oxygen or abnormal hemoglobin in
the blood) and enlargement of the stomach of Erlinda indicate that the endotracheal tube was improperly inserted into
the esophagus instead of the trachea. Consequently, oxygen was delivered not to the lungs but to the gastrointestinal
tract. This conclusion is supported by the fact that Erlinda was placed in trendelenburg position. This indicates that there
was a decrease of blood supply to the patients brain. The brain was thus temporarily deprived of oxygen supply causing
Erlinda to go into coma.

The injury incurred by petitioner Erlinda does not normally happen absent any negligence in the administration of
anesthesia and in the use of an endotracheal tube. As was noted in our Decision, the instruments used in the
administration of anesthesia, including the endotracheal tube, were all under the exclusive control of private respondents
Dr. Gutierrez and Dr. Hosaka.27 In Voss vs. Bridwell,28 which involved a patient who suffered brain damage due to the
wrongful administration of anesthesia, and even before the scheduled mastoid operation could be performed, the Kansas
Supreme Court applied the doctrine of res ipsa loquitur, reasoning that the injury to the patient therein was one which
does not ordinarily take place in the absence of negligence in the administration of an anesthetic, and in the use and
employment of an endotracheal tube. The court went on to say that "[o]rdinarily a person being put under anesthesia is
not rendered decerebrate as a consequence of administering such anesthesia in the absence of negligence. Upon these
facts and under these circumstances, a layman would be able to say, as a matter of common knowledge and observation,
that the consequences of professional treatment were not as such as would ordinarily have followed if due care had been
exercised."29 Considering the application of the doctrine of res ipsa loquitur, the testimony of Cruz was properly given
credence in the case at bar.

For his part, Dr. Hosaka mainly contends that the Court erred in finding him negligent as a surgeon by applying the
Captain-of-the-Ship doctrine.30 Dr. Hosaka argues that the trend in United States jurisprudence has been to reject said
doctrine in light of the developments in medical practice. He points out that anesthesiology and surgery are two distinct
and specialized fields in medicine and as a surgeon, he is not deemed to have control over the acts of Dr. Gutierrez. As
anesthesiologist, Dr. Gutierrez is a specialist in her field and has acquired skills and knowledge in the course of her
training which Dr. Hosaka, as a surgeon, does not possess.31 He states further that current American jurisprudence on the
matter recognizes that the trend towards specialization in medicine has created situations where surgeons do not always
have the right to control all personnel within the operating room,32 especially a fellow specialist.33

Dr. Hosaka cites the case of Thomas v. Raleigh General Hospital,34 which involved a suit filed by a patient who lost his voice
due to the wrongful insertion of the endotracheal tube preparatory to the administration of anesthesia in connection with
the laparotomy to be conducted on him. The patient sued both the anesthesiologist and the surgeon for the injury suffered
by him. The Supreme Court of Appeals of West Virginia held that the surgeon could not be held liable for the loss of the
patients voice, considering that the surgeon did not have a hand in the intubation of the patient. The court rejected the
application of the "Captain-of-the-Ship Doctrine," citing the fact that the field of medicine has become specialized such
that surgeons can no longer be deemed as having control over the other personnel in the operating room. It held that
"[a]n assignment of liability based on actual control more realistically reflects the actual relationship which exists in a
modern operating room."35 Hence, only the anesthesiologist who inserted the endotracheal tube into the patients throat
was held liable for the injury suffered by the latter.

This contention fails to persuade.

That there is a trend in American jurisprudence to do away with the Captain-of-the-Ship doctrine does not mean that this
Court will ipso facto follow said trend. Due regard for the peculiar factual circumstances obtaining in this case justify the
application of the Captain-of-the-Ship doctrine. From the facts on record it can be logically inferred that Dr. Hosaka
exercised a certain degree of, at the very least, supervision over the procedure then being performed on Erlinda.

First, it was Dr. Hosaka who recommended to petitioners the services of Dr. Gutierrez. In effect, he represented to
petitioners that Dr. Gutierrez possessed the necessary competence and skills. Drs. Hosaka and Gutierrez had worked
together since 1977. Whenever Dr. Hosaka performed a surgery, he would always engage the services of Dr. Gutierrez to
administer the anesthesia on his patient.36
Second, Dr. Hosaka himself admitted that he was the attending physician of Erlinda. Thus, when Erlinda showed signs of
cyanosis, it was Dr. Hosaka who gave instructions to call for another anesthesiologist and cardiologist to help resuscitate
Erlinda.37

Third, it is conceded that in performing their responsibilities to the patient, Drs. Hosaka and Gutierrez worked as a team.
Their work cannot be placed in separate watertight compartments because their duties intersect with each other. 38

While the professional services of Dr. Hosaka and Dr. Gutierrez were secured primarily for their performance of acts
within their respective fields of expertise for the treatment of petitioner Erlinda, and that one does not exercise control
over the other, they were certainly not completely independent of each other so as to absolve one from the negligent acts
of the other physician.

That they were working as a medical team is evident from the fact that Dr. Hosaka was keeping an eye on the intubation
of the patient by Dr. Gutierrez, and while doing so, he observed that the patients nails had become dusky and had to call
Dr. Gutierrezs attention thereto. The Court also notes that the counsel for Dr. Hosaka admitted that in practice, the
anesthesiologist would also have to observe the surgeons acts during the surgical process and calls the attention of the
surgeon whenever necessary39 in the course of the treatment. The duties of Dr. Hosaka and those of Dr. Gutierrez in the
treatment of petitioner Erlinda are therefore not as clear-cut as respondents claim them to be. On the contrary, it is quite
apparent that they have a common responsibility to treat the patient, which responsibility necessitates that they call each
others attention to the condition of the patient while the other physician is performing the necessary medical procedures.

It is equally important to point out that Dr. Hosaka was remiss in his duty of attending to petitioner Erlinda promptly, for
he arrived more than three (3) hours late for the scheduled operation. The cholecystectomy was set for June 17, 1985 at
9:00 a.m., but he arrived at DLSMC only at around 12:10 p.m. In reckless disregard for his patients well being, Dr. Hosaka
scheduled two procedures on the same day, just thirty minutes apart from each other, at different hospitals. Thus, when
the first procedure (protoscopy) at the Sta. Teresita Hospital did not proceed on time, Erlinda was kept in a state of
uncertainty at the DLSMC.

The unreasonable delay in petitioner Erlindas scheduled operation subjected her to continued starvation and
consequently, to the risk of acidosis,40 or the condition of decreased alkalinity of the blood and tissues, marked by sickly
sweet breath, headache, nausea and vomiting, and visual disturbances.41 The long period that Dr. Hosaka made Erlinda
wait for him certainly aggravated the anxiety that she must have been feeling at the time. It could be safely said that her
anxiety adversely affected the administration of anesthesia on her. As explained by Dr. Camagay, the patients anxiety
usually causes the outpouring of adrenaline which in turn results in high blood pressure or disturbances in the heart
rhythm:

DR. CAMAGAY:

x x x Pre-operative medication has three main functions: One is to alleviate anxiety. Second is to dry up
the secretions and Third is to relieve pain. Now, it is very important to alleviate anxiety because
anxiety is associated with the outpouring of certain substances formed in the body called adrenalin.
When a patient is anxious there is an outpouring of adrenalin which would have adverse effect on the
patient. One of it is high blood pressure, the other is that he opens himself to disturbances in the heart
rhythm, which would have adverse implications. So, we would like to alleviate patients anxiety mainly
because he will not be in control of his body there could be adverse results to surgery and he will be
opened up; a knife is going to open up his body. x x x42

Dr. Hosaka cannot now claim that he was entirely blameless of what happened to Erlinda. His conduct clearly constituted
a breach of his professional duties to Erlinda:

CHIEF JUSTICE:

Two other points. The first, Doctor, you were talking about anxiety, would you consider a patient's stay
on the operating table for three hours sufficient enough to aggravate or magnify his or her anxiety?

DR. CAMAGAY:
 Yes.

CHIEF JUSTICE:

In other words, I understand that in this particular case that was the case, three hours waiting and the
patient was already on the operating table (interrupted)

DR. CAMAGAY:

Yes.

CHIEF JUSTICE:

Would you therefore conclude that the surgeon contributed to the aggravation of the anxiety of the
patient?

DR. CAMAGAY:

That this operation did not take place as scheduled is already a source of anxiety and most operating
tables are very narrow and that patients are usually at risk of falling on the floor so there are restraints
that are placed on them and they are never, never left alone in the operating room by themselves
specially if they are already pre-medicated because they may not be aware of some of their movement
that they make which would contribute to their injury.

CHIEF JUSTICE:

In other words due diligence would require a surgeon to come on time?

DR. CAMAGAY:

I think it is not even due diligence it is courtesy.

CHIEF JUSTICE:

Courtesy.

DR. CAMAGAY:

And care.

CHIEF JUSTICE:

Duty as a matter of fact?

DR. CAMAGAY:

Yes, Your Honor.43

Dr. Hosaka's irresponsible conduct of arriving very late for the scheduled operation of petitioner Erlinda is violative, not
only of his duty as a physician "to serve the interest of his patients with the greatest solicitude, giving them always his
best talent and skill,"44 but also of Article 19 of the Civil Code which requires a person, in the performance of his duties, to
act with justice and give everyone his due.
Anent private respondent DLSMCs liability for the resulting injury to petitioner Erlinda, we held that respondent hospital
is solidarily liable with respondent doctors therefor under Article 2180 of the Civil Code 45 since there exists an employer-
employee relationship between private respondent DLSMC and Drs. Gutierrez and Hosaka:

In other words, private hospitals, hire, fire and exercise real control over their attending and visiting
"consultant" staff. While "consultants" are not, technically employees, x x x the control exercised, the hiring and
the right to terminate consultants all fulfill the important hallmarks of an employer-employee relationship, with
the exception of the payment of wages. In assessing whether such a relationship in fact exists, the control test is
determining. x x x46

DLSMC however contends that applying the four-fold test in determining whether such a relationship exists between it
and the respondent doctors, the inescapable conclusion is that DLSMC cannot be considered an employer of the
respondent doctors.

It has been consistently held that in determining whether an employer-employee relationship exists between the parties,
the following elements must be present: (1) selection and engagement of services; (2) payment of wages; (3) the power to
hire and fire; and (4) the power to control not only the end to be achieved, but the means to be used in reaching such an
end.47

DLSMC maintains that first, a hospital does not hire or engage the services of a consultant, but rather, accredits the latter
and grants him or her the privilege of maintaining a clinic and/or admitting patients in the hospital upon a showing by the
consultant that he or she possesses the necessary qualifications, such as accreditation by the appropriate board
(diplomate), evidence of fellowship and references.48 Second, it is not the hospital but the patient who pays the
consultants fee for services rendered by the latter.49 Third, a hospital does not dismiss a consultant; instead, the latter
may lose his or her accreditation or privileges granted by the hospital.50 Lastly, DLSMC argues that when a doctor refers a
patient for admission in a hospital, it is the doctor who prescribes the treatment to be given to said patient. The hospitals
obligation is limited to providing the patient with the preferred room accommodation, the nutritional diet and
medications prescribed by the doctor, the equipment and facilities necessary for the treatment of the patient, as well as
the services of the hospital staff who perform the ministerial tasks of ensuring that the doctors orders are carried out
strictly.51

After a careful consideration of the arguments raised by DLSMC, the Court finds that respondent hospitals position on
this issue is meritorious. There is no employer-employee relationship between DLSMC and Drs. Gutierrez and Hosaka
which would hold DLSMC solidarily liable for the injury suffered by petitioner Erlinda under Article 2180 of the Civil
Code.

As explained by respondent hospital, that the admission of a physician to membership in DLSMCs medical staff as active
or visiting consultant is first decided upon by the Credentials Committee thereof, which is composed of the heads of the
various specialty departments such as the Department of Obstetrics and Gynecology, Pediatrics, Surgery with the
department head of the particular specialty applied for as chairman. The Credentials Committee then recommends to
DLSMC's Medical Director or Hospital Administrator the acceptance or rejection of the applicant physician, and said
director or administrator validates the committee's recommendation.52 Similarly, in cases where a disciplinary action is
lodged against a consultant, the same is initiated by the department to whom the consultant concerned belongs and filed
with the Ethics Committee consisting of the department specialty heads. The medical director/hospital administrator
merely acts as ex-officio member of said committee.

Neither is there any showing that it is DLSMC which pays any of its consultants for medical services rendered by the latter
to their respective patients. Moreover, the contract between the consultant in respondent hospital and his patient is
separate and distinct from the contract between respondent hospital and said patient. The first has for its object the
rendition of medical services by the consultant to the patient, while the second concerns the provision by the hospital of
facilities and services by its staff such as nurses and laboratory personnel necessary for the proper treatment of the
patient.

Further, no evidence was adduced to show that the injury suffered by petitioner Erlinda was due to a failure on the part of
respondent DLSMC to provide for hospital facilities and staff necessary for her treatment.

For these reasons, we reverse the finding of liability on the part of DLSMC for the injury suffered by petitioner Erlinda.
Finally, the Court also deems it necessary to modify the award of damages to petitioners in view of the supervening event
of petitioner Erlindas death. In the assailed Decision, the Court awarded actual damages of One Million Three Hundred
Fifty Two Thousand Pesos (P1,352,000.00) to cover the expenses for petitioner Erlindas treatment and care from the
date of promulgation of the Decision up to the time the patient expires or survives. 53 In addition thereto, the Court
awarded temperate damages of One Million Five Hundred Thousand Pesos (P1,500,000.00) in view of the chronic and
continuing nature of petitioner Erlindas injury and the certainty of further pecuniary loss by petitioners as a result of said
injury, the amount of which, however, could not be made with certainty at the time of the promulgation of the decision.
The Court justified such award in this manner:

Our rules on actual or compensatory damages generally assume that at the time of litigation, the injury suffered
as a consequence of an act of negligence has been completed and that the cost can be liquidated. However, these
provisions neglect to take into account those situations, as in this case, where the resulting injury might be
continuing and possible future complications directly arising from the injury, while certain to occur, are difficult
to predict.

In these cases, the amount of damages which should be awarded, if they are to adequately and correctly respond
to the injury caused, should be one which compensates for pecuniary loss incurred and proved, up to the time of
trial; and one which would meet pecuniary loss certain to be suffered but which could not, from the nature of the
case, be made with certainty. In other words, temperate damages can and should be awarded on top of actual or
compensatory damages in instances where the injury is chronic and continuing. And because of the unique
nature of such cases, no incompatibility arises when both actual and temperate damages are provided for. The
reason is that these damages cover two distinct phases.

As it would not be equitableand certainly not in the best interests of the administration of justicefor the
victim in such cases to constantly come before the courts and invoke their aid in seeking adjustments to the
compensatory damages previously awardedtemperate damages are appropriate. The amount given as
temperate damages, though to a certain extent speculative, should take into account the cost of proper care.

In the instant case, petitioners were able to provide only home-based nursing care for a comatose patient who
has remained in that condition for over a decade. Having premised our award for compensatory damages on the
amount provided by petitioners at the onset of litigation, it would be now much more in step with the interests
of justice if the value awarded for temperate damages would allow petitioners to provide optimal care for their
loved one in a facility which generally specializes in such care. They should not be compelled by dire
circumstances to provide substandard care at home without the aid of professionals, for anything less would be
grossly inadequate. Under the circumstances, an award of P1,500,000.00 in temperate damages would therefore
be reasonable.54

However, subsequent to the promulgation of the Decision, the Court was informed by petitioner Rogelio that petitioner
Erlinda died on August 3, 1999.55 In view of this supervening event, the award of temperate damages in addition to the
actual or compensatory damages would no longer be justified since the actual damages awarded in the Decision are
sufficient to cover the medical expenses incurred by petitioners for the patient. Hence, only the amounts representing
actual, moral and exemplary damages, attorneys fees and costs of suit should be awarded to petitioners.

WHEREFORE, the assailed Decision is hereby modified as follows:

(1) Private respondent De Los Santos Medical Center is hereby absolved from liability arising from the injury suffered by
petitioner Erlinda Ramos on June 17, 1985;

(2) Private respondents Dr. Orlino Hosaka and Dr. Perfecta Gutierrez are hereby declared to be solidarily liable for the
injury suffered by petitioner Erlinda on June 17, 1985 and are ordered to pay petitioners

(a) P1,352,000.00 as actual damages;

(b) P2,000,000.00 as moral damages;

(c) P100,000.00 as exemplary damages;

 (d) P100,000.00 as attorneys fees; and

(e) the costs of the suit.

SO ORDERED.

THIRD DIVISION

[G.R. No. 143196. November 26, 2002]

STI DRIVERS ASSOCIATION, SALVADOR CARANZA, MARIANO TAN, AMADO EVANGELISTA, MANUEL EVANGELISTA,
EUSEBIO TABULOD, JR., MANUEL T. RODULFO, JOHNNY BUMATAY, FRANCISCO DOMINGO, NOLITO
BRANZUELA, DOMIZALDE BUMATAY, FERNANDO ARIBON, JUNELIAM QUINANOLA, JESUS FERRER,
RAYMUNDO BUMATAY, JR., MANUEL MOSTRALES, ROGELIO MAZO, ROLANDO EVASCO, FELIXBERTO
BADINAS, GERRY BOLIDO, GREGORIO GALVEZ, JR., CHARITO MOSCOSA, MARCELINO VILLANUEVA,
IBARISTO LACATA, FELIX OROGAN, GERRY CONDA, DENNIS SANCHEZ, PABLO ARAOS, NARIO BERNALDEZ,
LITO YAMBA, ANDRES NOVAL, JUDY VICENTE, DAVID CAJES, and FELIPE CASBADILLO, petitioners, vs.
COURT OF APPEALS, SIMENT TRANSPORT, INC., ELY CHUA, WILLIAM CHUA, SIMON CHUAHE, ELIZABETH
TAN, JRB MANPOWER AGENCY/ EDWIN BUMATAY, respondents.

DECISION
CORONA, J.:

Before us is a petition for review of the decision[1] dated July 26, 1999 of the Court of Appeals[2] in CA-G.R. SP No.
51216 dismissing the petition for certiorari of the decision[3] dated January 31, 1996 of the National Labor Relations
Commission in NLRC NCR Case No. 008951-95 which affirmed the decision[4] dated April 21, 1995 of Labor Arbiter
Romulus Protasio ruling in favor of the respondents.
The facts, as found by the appellate court, are as follows:
The petitioners are truck drivers and truck helpers of herein respondents Siment Transport, Inc. (STI, for brevity),
Family Mercantile (FM, for brevity), Simon Enterprises (SE, for brevity), and their owners, namely, Ely Chua, Willam Chua,
Simon Chuahe, and Elizabeth Tan. JRB Manpower Agency and Edwin Bumatay were likewise included as respondents in
the instant petition. The petitioners are Salvador Caranza, Mariano Tan, Amado Evangelista, Manuel Evangelista, Eusebio
Tabulod, Jr., Manuel T. Rodulfo, Johnny Bumatay, Francisco Domingo, Nolito Branzuela, Domizalde Bumatay, Fernando
Aribon, Juneliam Quinanola, Jesus Ferrer, Raymundo Bumatay, Jr., Manuel Mostrales, Rogelio Mazo, Rolando Evasco,
Felixberto Badinas, Gerry Bolido, Gregorio Galvez, Jr., Charito Moscosa, Marcelino Villanueva, Ibaristo Lacata, Felix
Orogan, Gerry Conda, Dennis Sanchez, Pablo Araos, Nario Bernaldez, Lito Yamba, Andres Noval, Judy Vicente, David Cajes
and Felipe Casbadillo.
The petitioner drivers formed STI Drivers Association which was registered with the Department of Labor and
Employment (DOLE, for brevity) under Registration Certificate No. NCR-UR-1-1 188-94. On May 2, 1994, the said union
filed a petition for certification election duly signed by Atty. Ernesto Arellano. On June 13, 1994, Med-arbiter Brigada
Fadrigon issued an order dismissing the petition. On appeal to the DOLE, Undersecretary Bienvenido Laguesma affirmed
the said order on August 25, 1994.
Pending resolution of the appeal to the DOLE, however, on June 29, 1994, petitioner drivers Salvador Caranza,
Mariano Tan, Amado Evangelista, Manuel Rudolfo, Johnny Bumatay and Eusebio Tabulod, Jr. were dismissed by
respondent STI for violation of the Union Security Clause provided for in respondents Collective Bargaining Agreement
(CBA, for brevity) with the Federation of Democratic Trade Unions- STI Workers Union Chapter (FDTU-STI, for
brevity). Subsequently, the concerned petitioners filed a complaint for illegal dismissal, unfair labor practice and payment
of damages against the respondents before the Regional Arbitration Branch of the NLRC. On the same day, the petitioner
drivers also filed a complaint for underpayment of their vacation leave, sick leave and 13th month pay against the
respondents.
 The petitioner truck helpers (pahinantes) were also dismissed for abandonment of work when they failed to report
for work on July 13, 1994 on the ground that they allegedly attended an organizational meeting of the drivers union.
Respondent JRB sent notices to the concerned petitioners requiring them to report for work with a stern warning that
their employment would be terminated if they failed to comply. Inasmuch as they disobeyed the said order, they were
dismissed for abandonment of work. On August 2, 1994, they filed a complaint for illegal dismissal, unfair labor practice
and payment of damages against the respondents before the Regional Arbitration Branch of the NLRC.
On October 1, 1994, the petitioner drivers Francisco Domingo, Nolito Branzuela, Domizalde Bumatay, Fernando
Aribon, Juneliam Quinanola, Jesus Ferrer, Manuel Mostrales, Raymundo Bumatay, Jr., Rogelio Mazo, and Rolando Evasco
were also dismissed on the ground that they failed to join FDTU-STI as required by the union security clause of their
CBA.They filed a complaint for illegal dismissal, unfair labor practice and damages. This case was consolidated with the
first case filed by the first group of petitioner drivers.
The three cases were consolidated and assigned to Labor Arbiter Ernesto Dinopol. They were later on re-raffled and
assigned to Labor Arbiter Romulus Protasio. The parties were required to submit their respective position papers.
However, petitioners failed to submit their position paper. Hence, Labor Arbiter Protasio proceeded to hear the case ex
parte. On April 21, 1995, Labor Arbiter Protasio dismissed the three consolidated complaints, the dispositive portion of
which reads:

WHEREFORE, judgment is hereby rendered declaring the dismissal of the complainants in Case No. 1 by JRB Manpower
Agency/Edwin Bumatay and the dismissal of complainants by respondent Siment Transport, Inc. and its officers, William
Chua, Ely Chua, Simon Chuahe and Elizabeth Tan in Case No. 2 as valid and legal. Paragraph Case No. 3 is also dismissed
since the benefits prayed for have already been fully paid for as here before indicated. [5]

On May 9, 1995, the petitioners appealed the case to the NLRC but, in a resolution dated June 30, 1995, the NLRC
dismissed the appeal for being filed out of time. The motion for reconsideration was likewise denied.
They filed a petition for certiorari before the Court of Appeals questioning the decision of the NLRC but the appellate
court dismissed the same. The Court of Appeals held that the petitioners were not denied due process inasmuch as their
counsel, a certain Villamor Mostrales, was informed in open court to submit petitioners position paper, but he did not. In
affirming the legality of the petitioners dismissal, the Court of Appeals found that they committed an act of disloyalty
when, during the existence of the CBA, they organized another union (the STI Drivers Association) and then filed a
petition for certification election outside the 60-day freedom period, in violation of the contract bar rule under Articles
253 and 253-A of the Labor Code.
Hence, this petition for review of the decision of the Court of Appeals based on this sole assignment of error:
I

PETITIONERS WERE DENIED DUE PROCESS BECAUSE THEY WERE MISREPRESENTED BY AN IMPOSTOR LAWYER OR A
NON-LAWYER.[6]

The petitioners pray that the case be remanded to the Regional Arbitration Branch of the NLRC on the ground that
they were denied due process for being represented by an impostor lawyer who was negligent in attending to their case
from the moment it was filed up to its dismissal by the appellate court. They claim that a certain Villamor Mostrales led
them to believe that he was a lawyer who could represent them in the consolidated labor complaints against herein
respondents. However, Mr. Mostrales failed to file the necessary position papers required by Labor Arbiter Protasio. As a
result, Labor Arbiter Protasio declared the petitioners in default and ruled against them on the basis of the position paper
submitted by the respondents. The petitioners discovered that Mr. Mostrales was not a lawyer after they secured a
certification from the Office of the Bar Confidant that Mr. Mostrales name is not included in the Roll of Attorneys. They
now argue that the actions of the impostor lawyer denied them due process for the reason that they were not given
competent representation during the hearing of the case and thus the proceedings a quo were null and void.
We deny the petition.
The records show that, aside from Mr. Mostrales, a counsel named Atty. Ernesto R. Arellano, represented them in all
the stages of the proceedings. In fact, the Labor Arbiter issued an order notifying Atty. Arellano of the reglementary
period within which to file the petitioners position papers. We herein quote the judgment of the NLRC denying petitioners
motion for reconsideration as proof of this fact, to wit:
Records show that contrary to complainants allegations, the Order of February 20, 1995 was served to their counsel, Atty.
Ernesto R. Arellano of Rm. 400, Jino Bldg., Timog Avenue, Quezon City. It was received by certain Edmond T. Lao on
February 27, 1995 (See Record, p. 268). xxx.[7]

In addition, the petitioners failed to dispute the fact that the written notification of the order of dismissal of the
petition for certification election was directed to Atty. Arellano as petitioners counsel of record. [8] And after the adverse
decision of the Labor Arbiter, Atty. Ernesto Arellano filed the appeal to the NLRC, as evidenced by his signature on the
appeal brief.[9] Also, the NLRC directed the notice of its resolution (dismissing the petitioners appeal for having been filed
out of time) to his law firm, Arellano and Associates.[10] The earlier petition that they filed before this Court (involving the
same parties and issues), which was remanded to the Court of Appeals as a result of our ruling in St. Martin Funeral Home
vs. National Labor Relations Commission,[11] was likewise signed by the same Atty. Ernesto R. Arellano.[12] These
undisputed facts prove that, during the entire proceedings, a bona-fide lawyer represented them and filed pleadings in
their behalf.
Based on the foregoing, we find that the petitioners were duly represented by a bona-fide lawyer and the latters
failure to file the required position papers before the Labor Arbiter or to appeal on time to the NLRC is not a ground to
declare the proceedings a quo null and void. We have ruled time and again that any act performed by a lawyer within the
scope of his general or implied authority is regarded as an act of his client. Consequently, the mistake or negligence of
petitioners counsel may result in the rendition of an unfavorable judgment against them. [13]Exceptions to the foregoing
have been recognized by this Court in cases where reckless or gross negligence of counsel deprives the client of due
process of law, or when its application results in the outright deprivation of ones property through a technicality.[14] None
of these exceptions has been sufficiently shown in the instant case.
In the case at bar, the petitioners merely claimed deprivation of their rights as a result of misrepresentations
perpetrated by an impostor lawyer. But, as already discussed, we cannot overlook the fact that they retained the services
of Atty. Arellano. The petitioners failed to show any evidence that the services of Atty. Arellano violated their right to due
process or deprived them of their property through a technicality. No gross negligence can be attributed to Atty. Arellano
inasmuch as he did not totally abandon or disregard his clients cases. He filed pleadings for and in their behalf. The
petitioners should therefore, as far as this suit is concerned, bear the consequences of their faulty option. After all, in the
application of the principle of due process, what is sought to be safeguarded against is not the lack of previous notice but
the denial of the opportunity to be heard. The question is not whether the petitioners succeeded in defending their
interest but whether the petitioners had the opportunity to present their side.[15]
Although nothing can be done to reverse the decision of the appellate court, the aggrieved petitioners can still
explore the feasibility of filing the appropriate criminal, civil and administrative cases against Mr. Mostrales and Atty.
Arellano, as warranted. Damages, after all, can be recovered as a result of fraud or inaction.
WHEREFORE, premises considered, the petition is hereby DENIED. No costs.
SO ORDERED.

G.R. No. L-36666 December 19, 1973

ORLINO TESORO, petitioner,

vs.
HONORABLE COURT OF APPEALS and BENJAMIN SANIDAD, respondents.

E. Voltaire Garcia II for petitioner.

Constante P. Pimentel for private respondent.

MAKASIAR, J.:

This petition for review on certiorari seeks the reversal of the decision of the respondent Court of Appeals dated March 7,
1973 setting aside the decision of the trial court and directing the remand of the case for new trial to enable the parties to
adduce evidence to support their protest and counter-protest.
In Our resolution dated July 6, 1973, We consider this petition for review as a special civil action, the comment of private
respondent Benjamin Sanidad as his answer thereto, and the case as submitted for decision.

The undisputed facts are as follows:

Herein petitioner Orlino Tesoro, private respondent Benjamin Sanidad, Rosario Jaramillo and Avelino Battad were
candidates for mayor of Sto. Domingo, Ilocos Sur in the elections of November 8, 1971. The municipal board of canvassers
issued a certificate that private respondent Benjamin Sanidad obtained 1,692 votes; petitioner Tesoro, 1,585 votes;
Rosario Jaramillo, 917 votes; and Avelino Battad 329 votes. Accordingly, on November 9, 1971, the municipal board of
canvassers proclaimed respondent Benjamin Sanidad mayor-elect.

Petitioner Tesoro filed a motion of protest dated November 16, 1971 against the election of respondent Sanidad,
impugning the results of the election in 23 out of 32 precincts, namely precincts nos. 3-A, 7, 8, 9, 10, 11, 12, 13, 14,15, 17,
17-A, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27 and 28 on the ground of serious irregularities, frauds, massive and systematic
terrorism, rampant and massive vote-buying, systematic utilization of flying voters and other illegally registered voters,
misreading of the ballots, misrecording of the votes, wrong appreciation of the ballots, marked ballots and unjustified
rejection of valid votes in favor of herein petitioner, which if reviewed and corrected, will make herein petitioner the
winner.

In his answer dated November 26, 1971 to the protest, herein respondent Sanidad denies the charges specified in the
protest, alleging that the elections were the cleanest, most peaceful and orderly in local electoral history and by way of
counter-protest, impugns the results of the elections in precincts 3, 5, 5-A, 6, 6-A, 15, 16, 21, 13 and 25 on the ground that
in these precincts, herein petitioner and his leaders engaged in vote-buying and various schemes like marking of ballots,
clearly valid votes for respondent Sanidad were rejected, invalid votes were counted in favor of petitioner, and petitioner
and his leaders resorted to widespread terrorism in precincts nos. 5 and 21 compelling the voters to vote against their
will for petitioner.

After the revision committees submitted their reports, the trial court in its decision, expressly stated that the parties,
believing that it "would best expedite the termination of the case, agreed to just admit the ballots and their other
documentary exhibits (election returns, certificates of candidacy, etc.) sans abduction of further evidence and then let the
court render its decision based on these and nothing more. This was exactly what was done" by the trial court, which after
examining the ballots involved in the protest and counter protest, as well as the objections thereto by the parties,
rendered a 164-page decision dated June 23, 1972, finding that petitioner garnered 1,626 votes as against 1,514 votes for
herein respondent Sanidad or a majority of 112 votes, and accordingly declared petitioner as mayor-elect.

Thereafter, respondent Sanidad perfected his appeal to the respondent Court of Appeals.

However, after the respondent Court of Appeals granted on August 31, 1972 the motion of the original counsels of private
respondent Sanidad to withdraw as counsel, Atty. Constante P. Pimentel the new counsel for respondent Sanidad filed a
remand for new trial and/or further proceedings of the case dated September 18, 1972 to the trial court to allow him to
further present additional evidence and to direct the Chief of the Questioned Documents Section of the National Bureau of
Investigation to make available their services for the purpose of determining the original entries for respondent Sanidad,
Rosario Jaramillo and Avelino Battad in the questioned ballots of precincts nos. 10, 14, 17, 18, 21, 22, and 24 as well as the
immediate photography of 219 questioned ballots under terms and conditions as the court may prescribe, attaching as
annexes (1) certificates issued by the members of the Board of Election Inspectors in precincts nos. 10, 14, 17, 18, 21, 22
and 24 concerning the casting and counting of votes, record of challenges of voters and record of protests all showing that
the elections in those precincts were orderly, peaceful and honest; (2) the receipt issued by the deputy clerk of court of
the delivery to him by the municipal treasurer of Sto. Domingo of the ballot boxes of the 23 precincts involved showing
that with the exception of precincts nos. 10, 18 and 22 all the outside compartments of subject ballot boxes were duly
sealed with numbered self-locking metal seal as required by COMELEC Resolution No. RR-984 of October 18, 1971, which
memorandum receipt however was not attached to the records of the case; (3) report on revision of ballots duly signed
and certified by the revisors showing that the interior seal of the ballot boxes of precincts nos. 10, 14, 17, 18 and 21 were
either broken or opened, the inside of the ballot boxes of precincts nos. 17 and 22 were apparently tampered with, the
ballot boxes for precinct no. 21 has no exterior self-locking metal seal and its interior metal seal no. D-64066 was
originally the exterior seal, and the exterior seal of the ballot box for precinct no. 24 was broken, all to favor herein
petitioner Tesoro.
Counsel for respondent Sanidad further stated in his motion to remand that while examining the questioned ballots and
exhibits in the office of Mr. Buenaventura Miguel, Chief of the Special Civil Action of the Court of Appeals, with the
assistance of alleged handwriting and fingerprint expert Pelagio Casilao, he discovered tampering, erasures, alterations
and superimpositions of the originally good and valid votes in his favor and for the other mayoralty candidates Jaramillo
and Battad just to favor petitioner Tesoro.

In his opposition dated September 26, 1972 to the motion remand, herein petitioner, while conceding that under Sec 3 of
Rule 51 of the Revised Rules of Court, the appellate court may direct a new trial or further proceedings to be had on the
case in exercise of its appellate jurisdiction, strenuously objects to the motion on the ground that (1) the parties in the
lower court agreed to just submit the case for decision on the basis of the ballots and other documentary exhibits without
abduction of further evidence; (2) the proofs sought to be introduced by respondent Sanidad were then already existing
and known to him during the trial of the case and therefore not newly discovered or could have been discovered with the
exercise of due diligence on his part; and (3) the motion to remand is purely dilatory.

In its resolution dated October 4, 1972, the 8th Division of the Court of Appeals composed of Justices Ruperto J. Martin,
Andres Reyes and Mateo M. Canonoy, the said motion to remand was denied on the ground that "this being an election
contest, it is of public interest that no further delay be resorted to in the disposition of the case."

However, the decision on the merits of the case dated March 7, 1973 rendered by the 3rd Division of the Court of Appeals
penned by Mr. Justice Emilio Gancayco and concurred in by Messrs. Justices Hermogenes Concepcion, Jr. and Ramon
Fernandez, ordered the remand for new trial to enable the parties to adduce further evidence, even as it quoted the
portion of the decision of the trial court stating that the parties agreed to just submit the case for decision on the basis of
the ballots and other documentary exhibits without abduction of further evidence and expressly recognized that
thereafter "the trial court proceeded carefully to examine, consider and comment on each and every ballot submitted by
each side and correspondingly objected to by the other," stating:

It appears that the 152 contested ballots in Precinct Nos. 10, 14, 17, 18, 21, 22, and 24 were tampered
with and as such were deducted by the trial court from the votes that were credited to the appellant.
Thus, the trial court found that in Precinct No. 10 the ballots marked as Exhibits T-13 to T-31 show
erasures and superimpositions of the appellant's name and that the superimpositions are the
penmanship of only one person distinct from the voter in any of these ballots so that "each of them
were prepared and filled by two distinct persons before they were deposited in the ballot box during
the voting," (pp. 110-111, appellant's brief). Hence in this precinct, seventeen (17) votes for appellant
were invalidated; in Precinct No. 14, the trial court made the same findings, insofar, as the ballots
marked T-1 to T-30, so thirty-one (31) votes for appellant were invalidated (pp. 141-142, appellant's
brief); in Precinct No. 17, ballots T-10 to T-38 were found to be similarly tampered, so twenty-eight
(28) votes credited to the appellant were recalled; in Precinct No. 18, four (4) votes for the appellant
were invalidated on the same ground, (Exhibits T-1 to T-4 pp. 172-174, appellant's brief); in Precinct
No. 21, twenty-six (26) votes for the appellant were also invalidated (Exhibits T-5 to T-30) on the same
ground (pp. 181-182, appellant's brief); in Precinct No. 22, twenty-three (23) votes for the appellant
were invalidated (Exhs. T-7 to T-29) on the same ground (pp. 188- 192, appellant's brief); and in
Precinct No. 24, twenty-three (23) votes for the appellant were invalidated on the same ground (Exhs.
T-1 to T-3; pp. 196-198, appellant's brief).

The findings of the trial court invalidating these votes of the appellant turned the tide of the result of
the election in favor of the appellee. Hence, besides the other ballots that have been contested, and are
before us on appeal, the merit of the case will rise or fall on the correctness of the ruling of the trial
court insofar as these 152 ballots are concerned.

The appellant contends that the memorandum receipt (Form No. 132-A) issued by the Clerk of Court
on January 11, 1972 to the Municipal Treasurer of Santo Domingo, Ilocos Sur, when the latter turned
over the ballot boxes, subject of the protest to the former, showing that the ballot boxes were duly
padlocked with three (3) padlocks each and duly sealed with one metal with the corresponding
numbers, shows the physical condition of said ballot boxes then. However, when the Committee on
Revision submitted their report to the Court, the appellant contends that they found the following:

1. Precint No. 10 interior seal broken

 2. Precint No. 14 interior seal broken

3. Precint No. 17 apparently good but ballots contents tampered as will be shown later.

4. Precint No. 18 interior seal opened

5. Precint No. 21 exterior no self-locking metal seal. Interior seal No. D-64066 originally the exterior
seal.

6. Precint No. 22 apparently good but ballots contents tampered as shall be shown later..

7. Precint No. 24 exterior seal broken, rusty at one corner of the bottom. (Annex A, pp. 26-27,
Appelant's brief).

In a motion to remand for new trial and/or further proceedings filed by the appellant on September 18,
1972 with this Court, the same matter was brought to our attention in addition the fact that the
minutes of the votings do not show any irregularity in any of these precincts nor any protest of
tampering as was found by the trial court; that an examination of the contested 152 ballots above
mentioned by handwriting expert Pelagio Kagilao show that many of the ballots where the names
`Sanidad' appears to have been superimposed on the erased name "Tesoro", there are traces that can
be seen even with the naked eye; that the name "Tesoro" is superimposed on the name "Sanidad" so
that the erasure must have been made only once but twice; that affidavits of Chairmen, poll clerks,
election inspectors, and members of CNEA of the contested precincts attest that they did not find
erasure or identifying marks nor noticed any ballot filled by any persons; that a narrative report of the
acting Election Registrar attest to the peaceful conduct of the election in that town (pp. 70-81, rec.).
Although this motion to remand the case for new trial denied by a resolution of this Court of September
19, 1972, as it only necessarily delay this election protest, the same prayer reiterated on appeal.

After a careful examination of all the contested ballots, documents before us and the records, We find
that a remand of case for new trial is in order if We are to arrive at the truth fairly resolve this election
protest. The reason for this is basic. If during the new trial the appellant can establish that these
contested ballots were erased and/or tampered with, after the votes were deposited in the ballot
boxes, and/or after the ballot boxes were delivered to the Deputy Clerk of Court, then the said ballots
lost their probative value and the counting of votes made by the Election Inspectors as reflected in the
election return would be the best the evidence of the result of the election.(Batisba vs. Carino, 47 O.G.
1267; Belosillo vs. Cabuyoc, CA G.R. 2940-R, March 29, 1949; Tagarda vs. Roa, CA G.R. 2509-R, Sept. 30,
1948; Campanero vs. Alano, CA G.R. 2558-R, December 16, 1948).

On the other hand, if it could be shown that the 152 ballots question were tampered with before they
were deposited in ballot boxes, then the same shall be null and void. (Section 189, 23 of the Election
Code 1971; Trajano vs. Enciso, 19 SCRA 343). We are not convinced that there is enough evidence to
sustain findings of the trial court that the 152 contested ballots above mentioned were tampered with
before they were deposited in the ballot boxes. All the contested ballots were just submitted for the
appreciation of the court without adducing any other evidence. The trial court should have motu
propiomade an inquiry or required that evidence be adduced at least on such vital issue of as to when
the said 152 ballots were tampered with. The rebuttable presumption that the said ballots suffered
from this defect before it was place in the ballot boxes as argued by the appellee citing the case
of Trajano vs. Enciso, 19 SCRA 343, cannot be upheld in the light of the evidence being sought to be
adduced by the appellant at the new trial tending to show the contrary. (Pp. 312 to 317, rec.).

Respondent Sanidad is now estopped from seeking a second chance to submit additional evidence, after he and his
previous counsel submitted the case for decision on the basis of evidence already before the trial court. He had ample
time during the trial to seek the assistance of handwriting and fingerprint experts either from the NBI or from the private
sector. He should not now be rewarded for his miscalculations or strategic error.

Moreover, as urged by herein petitioner, the proofs he intends to submit at the new trial are not newly discovered and/or
could have been discovered by the exercise of ordinary diligence. They were already then existing as well as subject to
and/or available for his scrutiny at the time of the trial like the questioned ballots, the certificates of the members of
the election inspectors on the casting and counting of votes, records of challenges of voters and record of watchers, the
receipt issued by the deputy clerk of court of the delivery to him of the ballot boxes of the questioned precincts, the report
on the revision of ballots by the revision committees including the description of the ballot boxes themselves, as well as
the testimonies of the members of the board of election inspectors and the CNEA representatives (Republic vs. Alto
Surety, 110 Phil. 9, 15-16; Toribio vs. Decasa 55 Phil. 44; Bersabal vs. Bernal, 13 Phil. 463; Vol. 2, Moran, Comments on the
Rules of Court, 1970 ed. 220). The alleged newly discovered evidence was actually forgotten evidence, which respondent
Sanidad and his counsel already knew or should have known during the trial. Such forgotten evidence does not justify a
new trial (Lim vs. Republic, 33 SCRA 291-294).

Appellate courts do not sit to remedy the tactical mistake committed by the parties or their counsel at the trial.

It has been repeatedly enunciated that "a client is bound by the action of his counsel in the conduct of a case and cannot
be heard to complain that the result might have been different had he proceeded differently. A client is bound by the
mistakes of his lawyer. If such grounds were to be admitted as reasons for reopening cases, there would never be an end
to a suit so long as new counsel could be employed who could allege and show that prior counsel had not been sufficiently
diligent or experienced or learned. ... Mistakes of attorneys as to the competency of a witness, the sufficiency, relevancy or
irrelevancy of certain evidence, the proper defense, or the burden of proof, ... failure to introduce certain evidence, to
summon witnesses, and to argue the case are not proper grounds for a new trial, unless the incompetency of counsel is so
great that his client is prejudiced and prevented from properly presenting his case" (Vol. 2, Moran, Comments on the
Rules of Court, pp. 218, 219-220, citing Rivero vs. Santos, et al., 98 Phil. 500, 503-504; Isaac vs. Mendoza, 89 Phil. 279;
Montes vs. Court, 48 Phil. 64; People vs. Manzanilia, 43 Phil. 167; U.S. vs. Dungca, 27 Phil. 274; U.S. vs. Umali, 15 Phil. 33;
see also People vs. Ner, 28 SCRA 1151, 1164). In the 1968 case of Palanca vs. American Food, etc. (24 SCRA 819, 828), this
principle was reiterated.

Respondent Sanidad does not even impute such gross incompetence to his former counsel in his motion to remand.

Neither was the trial tainted by bias or prejudice on the part of the trial Judge, whose fairness and diligence are revealed
by his 164-page decision (Pulido vs. C.A., 34 SCRA 230, 233-34).

This Court has always directed that questions over title to a public elective office should be resolved with dispatch as
demanded by public interest.

It is therefore evident that the respondent Court of Appeals acted with grave abuse of discretion in directing the remand
of the case for new trial.

WHEREFORE, THE DECISION OF THE COURT OF APPEALS DATED MARCH 7, 1973 IS HEREBY SET ASIDE; RESPONDENT
COURT OF APPEALS IS HEREBY DIRECTED TO RENDER ANOTHER DECISION BASED EXCLUSIVELY ON THE EVIDENCE
SUBMITTED AT THE TRIAL. WITH COSTS AGAINST PRIVATE RESPONDENT.

G.R. No. L-18390 August 6, 1971

PEDRO J. VELASCO, plaintiff-appellant,

vs.
MANILA ELECTRIC CO., WILLIAM SNYDER, its President; JOHN COTTON and HERMENEGILDO B. REYES, its Vice-
Presidents; and ANASTACIO A. AGAN, City Engineer of Quezon City, defendants-appellees.

Q. Paredes, B. Evangelista and R. T. Durian for plaintiff-appellant.

Ross, Selph and Carrascoso for defendants-appellees Manila Electric Co., etc., et al.

Asst. City Fiscal Jaime R. Agloro for defendant-appellee Anastacio A. Agan, etc.

REYES, J.B.L., J.:

The present case is direct appeal (prior to Republic Act 5440) by the herein plaintiff-appellant, Pedro J. Velasco
(petitioner in L-14035; respondent in L-13992) * from the decision of the Court of First Instance of Rizal, Quezon City
Branch, in its Civil Case No. 1355, absolving the defendants from a complaint for the abatement of the sub-station as a
nuisance and for damages to his health and business in the amount of P487,600.00.

In 1948, appellant Velasco bought from the People's Homesite and Housing Corporation three (3) adjoining lots situated
at the corner of South D and South 6 Streets, Diliman, Quezon City. These lots are within an area zoned out as a "first
residence" district by the City Council of Quezon City. Subsequently, the appellant sold two (2) lots to the Meralco, but
retained the third lot, which was farthest from the street-corner, whereon he built his house.

In September, 1953, the appellee company started the construction of the sub-station in question and finished it the
following November, without prior building permit or authority from the Public Service Commission (Meralco vs. Public
Service Commission, 109 Phil. 603). The facility reduces high voltage electricity to a current suitable for distribution to
the company's consumers, numbering not less than 8,500 residential homes, over 300 commercial establishments and
about 30 industries (T.s.n., 19 October 1959, page 1765). The substation has a rated capacity of "2 transformers at 5000
Kva each or a total of 10,000 Kva without fan cooling; or 6250 Kva each or a total of 12,500 Kva with fan cooling" (Exhibit
"A-3"). It was constructed at a distance of 10 to 20 meters from the appellant's house (T.s.n., 16 July 1956, page 62; 19
December 1956, page 343; 1 June 1959, page 29). The company built a stone and cement wall at the sides along the
streets but along the side adjoining the appellant's property it put up a sawale wall but later changed it to an interlink
wire fence.

It is undisputed that a sound unceasingly emanates from the substation. Whether this sound constitutes an actionable
nuisance or not is the principal issue in this case.

Plaintiff-appellant Velasco contends that the sound constitutes an actionable nuisance under Article 694 of the Civil Code
of the Philippines, reading as follows:

A nuisance is any act, omission, establishment, business condition of property or anything else which:

(1) Injuries or endangers the health or safety of others; or

(2) Annoys or offends the senses;

xxx xxx xxx

because subjection to the sound since 1954 had disturbed the concentration and sleep of said appellant, and impaired his
health and lowered the value of his property. Wherefore, he sought a judicial decree for the abatement of the nuisance
and asked that he be declared entitled to recover compensatory, moral and other damages under Article 2202 of the Civil
Code.

ART. 2202. In crimes and quasi-delicts, the defendant shall be liable for all damages which are the
natural and probable consequences of the act or omission complained of. It is not necessary that such
damages have been foreseen or could have reasonably been foreseen by the defendant.

After trial, as already observed, the court below dismissed the claim of the plaintiff, finding that the sound of substation
was unavoidable and did not constitute nuisance; that it could not have caused the diseases of anxiety neurosis,
pyelonephritis, ureteritis, lumbago and anemia; and that the items of damage claimed by plaintiff were not adequate
proved. Plaintiff then appealed to this Court.

The general rule is that everyone is bound to bear the habitual or customary inconveniences that result from the
proximity of others, and so long as this level is not surpassed, he may not complain against them. But if the prejudice
exceeds the inconveniences that such proximity habitually brings, the neighbor who causes such disturbance is held
responsible for the resulting damage,1 being guilty of causing nuisance.

While no previous adjudications on the specific issue have been made in the Philippines, our law of nuisances is of
American origin, and a review of authorities clearly indicates the rule to be that the causing or maintenance of disturbing
noise or sound may constitute an actionable nuisance (V. Ed. Note, 23 ALR, 2d 1289). The basic principles are laid down
in Tortorella vs. Traiser & Co., Inc., 90 ALR 1206:

A noise may constitute an actionable nuisance, Rogers vs. Elliott, 146 Mass, 349, 15 N.E. 768, 4 Am. St.
Rep. 316, Stevens v. Rockport Granite Co., 216 Mass. 486, 104 N.E. 371, Ann. Cas. 1915B, 1954, Stodder v.
Rosen Talking Machine Co., 241 Mass. 245, 135 N. E. 251, 22 A. L. R. 1197, but it must be a noise which
affects injuriously the health or comfort of ordinary people in the vicinity to an unreasonable extent.
Injury to a particular person in a peculiar position or of specially sensitive characteristics will not
render the noise an actionable nuisance. Rogers v. Elliott, 146 Mass. 349, 15 N. E. 768, 4 Am. St. Rep.
316. In the conditions of present living noise seems inseparable from the conduct of many necessary
occupations. Its presence is a nuisance in the popular sense in which that word is used, but in the
absence of statute noise becomes actionable only when it passes the limits of reasonable adjustment to
the conditions of the locality and of the needs of the maker to the needs of the listener. What those
limits are cannot be fixed by any definite measure of quantity or quality. They depend upon the
circumstances of the particular case. They may be affected, but are not controlled, by zoning
ordinances. Beane v. H. J. Porter, Inc., 280 Mass. 538, 182 N. E. 823, Marshal v. Holbrook, 276 Mass. 341,
177 N. E. 504, Strachan v. Beacon Oil Co., 251 Mass. 479, 146 N. E. 787. The delimitation of designated
areas to use for manufacturing, industry or general business is not a license to emit every noise
profitably attending the conduct of any one of them. Bean v. H. J. Porter, Inc.. 280 Mass. 538, 182 N. E.
823. The test is whether rights of property of health or of comfort are so injuriously affected by the
noise in question that the sufferer is subjected to a loss which goes beyond the reasonable limit
imposed upon him by the condition of living, or of holding property, in a particular locality in fact
devoted to uses which involve the emission of noise although ordinary care is taken to confine it within
reasonable bounds; or in the vicinity of property of another owner who though creating a noise is
acting with reasonable regard for the rights of those affected by it. Stevens v. Rockport Granite Co., 216
Mass. 486, 104 NE 371, Ann. Cas. 1915B, 1054.

With particular reference to noise emanating from electrical machinery and appliances, the court, in Kentucky & West
Virginia Power Co. v. Anderson, 156 S. W. 2d 857, after a review of authorities, ruled as follows:

There can be no doubt but that commercial and industrial activities which are lawful in themselves
may become nuisances if they are so offensive to the senses that they render the enjoyment of life and
property uncomfortable. It is no defense that skill and care have been exercised and the most improved
methods and appliances employed to prevent such result. Wheat Culvert Company v. Jenkins, 246 Ky.
319, 55 S. W. 2d 4; 46 C.J. 683, 705; 20 R. C. L. 438; Annotations, 23 A. L. R. 1407; 90 A. L. R. 1207. Of
course, the creation of trifling annoyance and inconvenience does not constitute an actionable
nuisance, and the locality and surroundings are of importance. The fact that the cause of the complaint
must be substantial has often led to expressions in the opinions that to be a nuisance the noise must be
deafening or loud or excessive and unreasonable. Usually it was shown to be of that character. The
determinating factor when noise alone is the cause of complaint is not its intensity or volume. It is that
the noise is of such character as to produce actual physical discomfort and annoyance to a person of
ordinary sensibilities, rendering adjacent property less comfortable and valuable. If the noise does that
it can well be said to be substantial and unreasonable in degree; and reasonableness is a question of
fact dependent upon all the circumstances and conditions. 20 R. C. L. 445, 453; Wheat Culvert Company
v. Jenkins, supra. There can be no fixed standard as to what kind of noise constitutes a nuisance. It is
true some witnesses in this case say they have been annoyed by the humming of these transformers,
but that fact is not conclusive as to the nonexistence of the cause of complaint, the test being the effect
which is had upon an ordinary person who is neither sensitive nor immune to the annoyance
concerning which the complaint is made. In the absence of evidence that the complainant and his
family are supersensitive to distracting noises, it is to be assumed that they are persons of ordinary
and normal sensibilities. Roukovina v. Island Farm Creamery Company, 160 Minn. 335, 200 N. W. 350,
38 A. L. R. 1502.

xxx xxx xxx

In Wheat Culvert Company vs. Jenkins, supra, we held an injunction was properly decreed to stop the
noise from the operation of a metal culvert factory at night which interfered with the sleep of the
occupants of an adjacent residence. It is true the clanging, riveting and hammering of metal plates
produces a sound different in character from the steady hum or buzz of the electric machinery
 described in this case. In the Jenkins case the noise was loud, discordant and intermittent. Here it is
interminable and monotonous. Therein lies the physical annoyance and disturbance. Though the noise
be harmonious and slight and trivial in itself, the constant and monotonous sound of a cricket on the
earth, or the drip of a leaking faucet is irritating, uncomfortable, distracting and disturbing to the
average man and woman. So it is that the intolerable, steady monotony of this ceaseless sound, loud
enough to interfere with ordinary conversation in the dwelling, produces a result generally deemed
sufficient to constitute the cause of it an actionable nuisance. Thus, it has been held the continuous and
monotonous playing of a phonograph for advertising purposes on the street even though there were
various records, singing, speaking and instrumental, injuriously affected plaintiff's employees by a
gradual wear on their nervous systems, and otherwise, is a nuisance authorizing an injunction and
damages. Frank F. Stodder, et al. v. Rosen Talking Machine Company, 241 Mass. 245, 135 N. E. 251, 22 A.
L. R. 1197.

The principles thus laid down make it readily apparent that inquiry must be directed at the character and intensity of the
noise generated by the particular substation of the appellee. As can be anticipated, character and loudness of sound being
of subjective appreciation in ordinary witnesses, not much help can be obtained from the testimonial evidence. That of
plaintiff Velasco is too plainly biased and emotional to be of much value. His exaggerations are readily apparent in
paragraph V of his amended complaint, signed by him as well as his counsel, wherein the noise complained of as

fearful hazardous noise and clangor are produced by the said electric transformer of the MEC's
substation, approximating a noise of a reactivated about-to-explode volcano, perhaps like the nerve
wracking noise of the torture chamber in Germany's Dachau or Buchenwald (Record on Appeal, page
6).

The estimate of the other witnesses on the point of inquiry are vague and imprecise, and fail to give a definite idea of the
intensity of the sound complained of. Thus:

OSCAR SANTOS, Chief Building Inspector, Department of Engineering, Quezon City ____ "the sound (at the front door of
plaintiff Velasco's house) becomes noticeable only when I tried to concentrate ........" (T.s.n., 16 July 1956, page 50)

SERAFIN VILLARAZA, Building Inspector ____ "..... like a high pitch note." (the trial court's description as to the imitation of
noise made by witness:"........ more of a hissing sound) (T.s.n., 16 July 1956, pages 59-60)

CONSTANCIO SORIA, City Electrician ____ "........ humming sound" ..... "of a running car". (T.s.n., 16 July 1956, page 87)

JOSE R. ALVAREZ, Sanitary Engineer, Quezon City Health Department ____ "..... substation emits a continuous rumbling
sound which is audible within the premises and at about a radius of 70 meters." "I stayed there from 6:00 p.m. to about
1:00 o'clock in the morning" ..... "increases with the approach of twilight." (T.s.n., 5 September 1956, pages 40-44)

NORBERTO S. AMORANTO, Quezon City Mayor ____ (for 30 minutes in the street at a distance of 12 to 15 meters from sub-
station) "I felt no effect on myself." "..... no [piercing noise]" (T.s.n., 18 September 1956, page 189)

PACIFICO AUSTRIA, architect, appellant's neighbor: "..... like an approaching airplane ..... around five kilometers away."
(T.s.n., 19 November 1956, pages 276-277)

ANGEL DEL ROSARIO, radiologist, appellant's neighbor: "..... as if it is a running motor or a running dynamo, which
disturbs the ear and the hearing of a person." T.s.n., 4 December 1956, page 21)

ANTONIO D. PAGUIA, lawyer ____ "It may be likened to the sound emitted by the whistle of a boat at a far distance but it is
very audible." (T.s.n., 19 December 1956, page 309)

RENE RODRIGUEZ, sugar planter and sugar broker, appellant's neighbor ____ "It sounds like a big motor running
continuously." (T.s.n., 19 December 1956, page 347)

SIMPLICIO BELISARIO, Army captain, ____ (on a visit to Velasco) "I can compare the noise to an airplane C-47 being started
- the motor." [Did not notice the noise from the substation when passing by, in a car, Velasco's house] (T.s.n., 7 January
1957, pages 11-12)
MANOLO CONSTANTINO, businessman, appellant's neighbor ____ "It disturbs our concentration of mind." (T.s.n., 10
January 1957, page 11)

PEDRO PICA, businessman, appellant's neighbor: "..... We can hear it very well [at a distance of 100 to 150 meters]. (T.s.n.,
10 January 1957, page 41)

CIRENEO PUNZALAN, lawyer ____ "..... a continuous droning, ..... like the sound of an airplane." (T.s.n., 17 January 1957,
page 385)

JAIME C. ZAGUIRRE, Chief, Neuro-Psychiatry Section, V. Luna Gen. Hospital ____ "..... comparatively the sound was really
loud to bother a man sleeping." (T.s.n., 17 January 1957, page 406)

We are thus constrained to rely on quantitative measurements shown by the record. Under instructions from the Director
of Health, samplings of the sound intensity were taken by Dr. Jesus Almonte using a sound level meter and other
instruments. Within the compound of the plaintiff-appellant, near the wire fence serving as property line between him
and the appellee, on 27 August 1957 at 11:45 a.m., the sound level under the sampaloc tree was 46-48 decibels, while
behind Velasco's kitchen, the meter registered 49-50; at the same places on 29 August 1957, at 6:00 a.m., the readings
were 56-59 and 61-62 decibels, respectively; on 7 September 1957, at 9:30 a.m., the sound level under the sampaloc tree
was 74-76 decibels; and on 8 September 1957 at 3:35 in the morning, the reading under the same tree was 70 decibels,
while near the kitchen it was 79-80 decibels. Several measurements were also taken inside and outside the house (Exhibit
"NN-7, b-f"). The ambient sound of the locality, or that sound level characteristic of it or that sound predominating minus
the sound of the sub-station is from 28 to 32 decibels. (T.s.n., 26 March 1958, pages 6-7)

Mamerto Buenafe, superintendent of the appellee's electrical laboratory, also took sound level samplings. On 19
December 1958, between 7:00 to 7:30 o'clock in the evening, at the substation compound near the wire fence or property
line, the readings were 55 and 54 and still near the fence close to the sampaloc tree, it was 52 decibels; outside but close
to the concrete wall, the readings were 42 to 43 decibels; and near the transformers, it was 76 decibels (Exhibit "13").

Buenafe also took samplings at the North General Hospital on 4 January 1959 between 9:05 to 9:45 in the evening. In the
different rooms and wards from the first to the fourth floors, the readings varied from 45 to 67 decibels.

Technical charts submitted in evidence show the following intensity levels in decibels of some familiar sounds: average
residence: 40; average office: 55; average automobile, 15 feet: 70; noisiest spot at Niagara Falls: 92 (Exhibit "11- B");
average dwelling: 35; quiet office: 40; average office: 50; conversation: 60; pneumatic rock drill: 130 (Exhibit "12"); quiet
home average living room: 40; home ventilation fan, outside sound of good home airconditioner or automobile at 50
feet: 70 (Exhibit "15-A").

Thus the impartial and objective evidence points to the sound emitted by the appellee's substation transformers being of
much higher level than the ambient sound of the locality. The measurements taken by Dr. Almonte, who is not connected
with either party, and is a physician to boot (unlike appellee's electrical superintendent Buenafe), appear more reliable.
The conclusion must be that, contrary to the finding of the trial court, the noise continuously emitted, day and night,
constitutes an actionable nuisance for which the appellant is entitled to relief, by requiring the appellee company to adopt
the necessary measures to deaden or reduce the sound at the plaintiff's house, by replacing the interlink wire fence with a
partition made of sound absorbent material, since the relocation of the substation is manifestly impracticable and would
be prejudicial to the customers of the Electric Company who are being serviced from the substation.

Appellee company insists that as the plaintiff's own evidence (Exhibit "NN-7[c]") the intensity of the sound (as measured
by Dr. Almonte) inside appellant's house is only 46 to 47 decibels at the consultation room, and 43 to 45 decibels within
the treatment room, the appellant had no ground to complain. This argument is not meritorious, because the noise at the
bedrooms was determined to be around 64-65 decibels, and the medical evidence is to the effect that the basic root of the
appellant's ailments was his inability to sleep due to the incessant noise with consequent irritation, thus weakening his
constitution and making him easy prey to pathogenic germs that could not otherwise affect a person of normal health.

In Kentucky and West Virginia Co., Inc. vs. Anderson, 156 SW. 857, the average of three readings along the plaintiff's fence
was only 44 decibels but, because the sound from the sub-station was interminable and monotonous, the court authorized
an injunction and damages. In the present case, the three readings along the property line are 52, 54 and 55 decibels.
Plaintiff's case is manifestly stronger.
Appellee company argues that the plaintiff should not be heard to complain because the sound level at the North General
Hospital, where silence is observed, is even higher than at his residence. This comparison lacks basis because it has not
been established that the hospital is located in surroundings similar to the residential zone where the plaintiff lived or
that the sound at the hospital is similarly monotonous and ceaseless as the sound emitted by the sub-station.

Constancio Soria testified that "The way the transformers are built, the humming sound cannot be avoided". On this
testimony, the company emphasizes that the substation was constructed for public convenience. Admitting that the sound
cannot be eliminated, there is no proof that it cannot be reduced. That the sub-station is needed for the Meralco to be able
to serve well its customers is no reason, however, why it should be operated to the detriment and discomfort of others. 2

The fact that the Meralco had received no complaint although it had been operating hereabouts for the past 50 years with
substations similar to the one in controversy is not a valid argument. The absence of suit neither lessens the company's
liability under the law nor weakens the right of others against it to demand their just due.

As to the damages caused by the noise, appellant Velasco, himself a physician, claimed that the noise, as a precipitating
factor, has caused him anxiety neurosis, which, in turn, predisposed him to, or is concomitant with, the other ailments
which he was suffering at the time of the trial, namely, pyelonephritis, ureteritis and others; that these resulted in the loss
of his professional income and reduced his life expectancy. The breakdown of his claims is as follows:

Loss of professional earnings P12,600

Damage to life expectancy 180,000
Moral damages 100,000
Loss due to frustration of sale of house 125,000
Exemplary damages 25,000
Attorneys' fees 45,000

A host of expert witnesses and voluminous medical literature, laboratory findings and statistics of income were
introduced in support of the above claims.

The medical evidence of plaintiff's doctors preponderates over the expert evidence for defendant-appellee, not merely
because of its positive character but also because the physicians presented by plaintiff had actually treated him, while the
defense experts had not done so. Thus the evidence of the latter was to a large extent conjectural. That appellant's
physical ailments should be due to infectious organisms does not alter the fact that the loss of sleep, irritation and tension
due to excessive noise weakened his constitution and made him easy prey to the infection.

Regarding the amount of damages claimed by appellant, it is plain that the same are exaggerated. To begin with, the
alleged loss of earnings at the rate of P19,000 per annum is predicated on the Internal Revenue assessment, Exhibit "QQ-
1", wherein appellant was found to have undeclared income of P8,338.20 in additional to his declared gross income of
P10,975.00 for 1954. There is no competent showing, however, that the source of such undeclared income was
appellant's profession. In fact, the inference would be to the contrary, for his gross income from the previous years 1951
to 1953 [Exhibits "QQ-1 (d)" to "QQ-1 (f)"] was only P8,085.00, P5,860.00 and P7,120.00, respectively, an average of
P7,000.00 per annum. Moreover, while his 1947 and 1948 income was larger (P9,995.00 and P11,900.00), it appears that
P5,000 thereof was the appellant's annual salary from the Quezon Memorial Foundation, which was not really connected
with the usual earnings derived from practice as a physician. Considering, therefore, his actual earnings, the claimed
moral damages of P100,000.00 are utterly disproportionate. The alleged losses for shortening of appellant's, life
expectancy are not only inflated but speculative.

As to the demand for exemplary or punitive damages, there appears no adequate basis for their award. While the appellee
Manila Electric Company was convicted for erecting the substation in question without permit from the Public Service
Commission, We find reasonable its explanation that its officials and counsel had originally deemed that such permit was
not required as the installation was authorized by the terms of its franchise (as amended by Republic Act No. 150)
requiring it to spend within 5 years not less than forty million pesos for maintenance and additions to its electric system,
including needed power plants and substations. Neither the absence of such permit from the Public Service Commission
nor the lack of permit from the Quezon City authorities (a permit that was subsequently granted) is incompatible with the
Company's good faith, until the courts finally ruled that its interpretation of the franchise was incorrect.

There are, moreover, several factors that mitigate defendant's liability in damages. The first is that the noise from the
substation does not appear to be an exclusive causative factor of plaintiff-appellant's illnesses. This is proved by the
circumstance that no other person in Velasco's own household nor in his immediate neighborhood was shown to have
become sick despite the noise complained of. There is also evidence that at the time the plaintiff-appellant appears to
have been largely indebted to various credit institutions, as a result of his unsuccessful gubernatorial campaign, and this
court can take judicial cognizance of the fact that financial worries can affect unfavorably the debtor's disposition and
mentality.

The other factor militating against full recovery by the petitioner Velasco in his passivity in the face of the damage caused
to him by the noise of the substation. Realizing as a physician that the latter was disturbing or depriving him of sleep and
affecting both his physical and mental well being, he did not take any steps to bring action to abate the nuisance or
remove himself from the affected area as soon as the deleterious effects became noticeable. To evade them appellant did
not even have to sell his house; he could have leased it and rented other premises for sleeping and maintaining his office
and thus preserve his health as ordinary prudence demanded. Instead he obstinately stayed until his health became
gravely affected, apparently hoping that he would thereby saddle appellee with large damages.

The law in this jurisdiction is clear. Article 2203 prescribes that "The party suffering loss or injury must exercise the
diligence of a good father of a family to minimize the damages resulting from the act or omission in question". This codal
rule, which embodies the previous jurisprudence on the point,3 clearly obligates the injured party to undertake measures
that will alleviate and not aggravate his condition after the infliction of the injury, and places upon him the burden of
explaining why he could not do so. This was not done.

Appellant Velasco introduced evidence to the effect that he tried to sell his house to Jose Valencia, Jr., in September, 1953,
and on a 60 day option, for P95,000.00, but that the prospective buyer backed out on account of his wife objecting to the
noise of the substation. There is no reliable evidence, however, how much were appellant's lot and house worth, either
before the option was given to Valencia or after he refused to proceed with the sale or even during the intervening period.
The existence of a previous offer for P125,000.00, as claimed by the plaintiff, was not corroborated by Valencia. What
Valencia testified to in his deposition is that when they were negotiating on the price Velasco mentioned to him about an
offer by someone for P125,000.00. The testimony of Valencia proves that in the dialogue between him and Velasco, part of
the subject of their conversation was about the prior offer, but it does not corroborate or prove the reality of the offer for
P125,000.00. The testimony of Velasco on this point, standing alone, is not credible enough, what with his penchant for
metaphor and exaggeration, as previously adverted to. It is urged in appellant's brief, along the lines of his own testimony,
that since one (1) transformer was measured by witness, Jimenez with a noise intensity of 47.2 decibels at a distance of
30.48 meters, the two (2) transformers of the substation should create an intensity of 94.4 decibels at the same distance.
If this were true, then the residence of the plaintiff is more noisy than the noisiest spot at the Niagara Falls, which
registers only 92 decibels (Exhibit "15-A").

Since there is no evidence upon which to compute any loss or damage allegedly incurred by the plaintiff by the frustration
of the sale on account of the noise, his claim therefore was correctly disallowed by the trial court. It may be added that
there is no showing of any further attempts on the part of appellant to dispose of the house, and this fact suffices to raise
doubts as to whether he truly intended to dispose of it. He had no actual need to do so in order to escape deterioration of
his health, as heretofore noted.

Despite the wide gap between what was claimed and what was proved, the plaintiff is entitled to damages for the
annoyance and adverse effects suffered by him since the substation started functioning in January, 1954. Considering all
the circumstances disclosed by the record, as well as appellant's failure to minimize the deleterious influences from the
substation, this Court is of the opinion that an award in the amount of P20,000.00, by way of moderate and moral
damages up to the present, is reasonable. Recovery of attorney's fees and litigation expenses in the sum of P5,000.00 is
also
justified the factual and legal issues were intricate (the transcript of the stenographic notes is about 5,000 pages, side
from an impressive number of exhibits), and raised for the first time in this jurisdiction.4

The last issue is whether the City Engineer of Quezon City, Anastacio A. Agan, a co-defendant, may be held solidarily liable
with Meralco.

Agan was included as a party defendant because he allegedly (1) did not require the Meralco to secure a building permit
for the construction of the substation; (2) even defended its construction by not insisting on such building permit; and (3)
did not initiate its removal or demolition and the criminal prosecution of the officials of the Meralco.
The record does not support these allegations. On the first plea, it was not Agan's duty to require the Meralco to secure a
permit before the construction but for Meralco to apply for it, as per Section 1. Ordinance No. 1530, of Quezon City. The
second allegation is not true, because Agan wrote the Meralco requiring it to submit the plan and to pay permit fees
(T.s.n., 14 January 1960, pages 2081-2082). On the third allegation, no law or ordinance has been cited specifying that it is
the city engineer's duty to initiate the removal or demolition of, or for the criminal prosecution of, those persons who are
responsible for the nuisance. Republic Act 537, Section 24 (d), relied upon by the plaintiff, requires an order by, or
previous approval of, the mayor for the city engineer to cause or order the removal of buildings or structures in violation
of law or ordinances, but the mayor could not be expected to take action because he was of the belief, as he testified, that
the sound "did not have any effect on his body."

FOR THE FOREGOING REASONS, the appealed decision is hereby reversed in part and affirmed in part. The defendant-
appellee Manila Electric Company is hereby ordered to either transfer its substation at South D and South 6 Streets,
Diliman, Quezon City, or take appropriate measures to reduce its noise at the property line between the defendant
company's compound and that of the plaintiff-appellant to an average of forty (40) to fifty (50) decibels within 90 days
from finality of this decision; and to pay the said plaintiff-appellant P20,000.00 in damages and P5,000.00 for attorney's
fees. In all other respects, the appealed decision is affirmed. No costs.