[Abuse of Right]
Garciano, thereby questioning the
G.R. No. 96126 August 10, 1992
ESTERIA F. GARCIANO, petitioner,
vs.
THE HON. COURT OF APPEALS, EMERITO LABAJO, LUNISITA MARODA, LALIANA DIONES,
CANONISA PANINSORO, DIONISIO ROSAL, REMEDIOS GALUSO, FLORDELUNA
PETALCORIN, MELCHIZEDECH LOON, NORBERTA MARODA and JOSEPH
WIERTZ, respondents.
Basilio E. Duaban for petitioner.
Julius Z. Neri for private respondent.
GRIÑO-AQUINO, J.:
This is a petition for review of the decision of the Court of Appeals dismissing the
complaint for damages filed by the petitioner against the private respondents.
The petitioner was hired to teach during the 1981-82 school year in the Immaculate
Concepcion Institute in the Island of Camotes. On January 13, 1982, or before the
school year ended, she applied for an indefinite leave of absence because her
daughter was taking her to Austria where her daughter was employed (Exh. B). The
application was recommended for approval by the school principal, Emerito O. Labajo,
and approved by the President of the school's Board of Directors (Exh. B-1).
On June 1, 1982, Emerito Labajo addressed a letter to the petitioner through her
husband, Sotero Garciano (for she was still abroad), informing her of the decision of Fr.
Joseph Wiertz, the school's founder, concurred in by the president of the Parent-
Teachers Association and the school faculty, to terminate her services as a member of
the teaching staff because of: (1) the absence of any written contract of employment
between her and the school due to her refusal to sign one; and (2) the difficulty of
getting a substitute for her on a temporary basis as no one would accept the position
without a written contract (Exhs. C and 1). Upon her return from Austria in the later part
of June, 1982, she received the letter informing her that her services at the Immaculate
Concepcion Institute had been terminated. She made inquiries from the school about
the matter and, on July 7, 1982, the members of the Board of Directors of the school,
with the exception of Fr. Joseph Wiertz, signed a letter notifying her that she was
"reinstated to report and do your usual duties as Classroom Teacher . . . effective July 5,
1982," and that "any letter or notice of termination received by you before this date has
no sanction or authority by the Board of Directors of this Institution, therefore it is
declared null and void . . ." (Exhs. D and 2).
On July 9, 1982, the president, vice president, secretary, and three members of the
Board of Directors, out of a membership of nine (9), resigned their positions from the
Board "for the reason that the ICI Faculty, has reacted acidly to the Board's
deliberations for the reinstatement of Mrs. Esteria F.
integrity of the Board's decision" (Exh. E).
On September 3, 1982, petitioner filed a complaint for damages in the Regional Trial
Court, Cebu, Branch XI, against Fr. Wiertz, Emerito Labajo, and some members of the
faculty of the school for discrimination and unjust and illegal dismissal.
After trial, the lower court rendered a decision on August 30, 1985, ordering the
defendants jointly and severally to pay her P200,000 as moral damages, P50,000
exemplary damages, P32,400 as lost earnings for nine years, and P10,000 as litigation
expenses and attorney's fees.
The defendants (now private respondents) appealed to the Court of Appeals (CA-G.R.
CV No. 10692), which on August 30, 1990 reversed the trial court's decision thus:
WHEREFORE, the decision appealed from is reversed, the complaint is dismissed, and
defendants-appellants are absolved from any liability to plaintiff-appellee. With costs
against plaintiff-appellee. (p. 13, Rollo.)
The plaintiff-appellee (now petitioner) filed a motion for reconsideration which the Court
of Appeals denied on October 26, 1990. Hence, this petition for review wherein the lone
error assigned by petitioner reads:
Respondent Court of Appeals gravely erred in absolving the private respondents from
liability by faulting the petitioner for her failure to report back to her work. (p. 6, Rollo.)
After a careful perusal of the petition and the respondents' comments, the Court
resolved to deny the petition for lack of merit.
The board of directors of the Immaculate Concepcion Institute, which alone possesses
the authority to hire and fire teachers and other employees of the school, did not dismiss
the petitioner. It in fact directed her to report for work. While the private respondents
sent her a letter of termination through her husband, they admittedly had no authority
to do so. As the Court of Appeals aptly observed:
We agree with defendants-appellants, however, that they should not have been held
liable to plaintiff-appellee for damages. Defendants-appellants had no authority to
dismiss plaintiff-appellee and the latter was aware of this. Hence, the letter of
termination sent to her through her husband (Exhs. C and 1) by defendants-appellants
had no legal effect whatsoever. It did not effectively prevent her from reporting for
work. What is more, it was subsequently repudiated by the Board of Directors which
directed her to report for work. (Exhs. D and 2) There was, therefore, no reason why she
did not continue with her teaching in the school. No evidence had been presented to
show that defendants-appellants prevented her from reporting for work. The fact that
defendants-appellants had "acidly" received the action of the Board of Directors
repudiating their decision to terminate plaintiff-appellee is not proof that defendants-
appellants had effectively and physically prevented plaintiff-appellee from resuming
her post. It was nothing more than a reaction to what defendants-appellants perceived
as an affront to their collective prestige. It would appear, therefore, that plaintiff-
appellee voluntarily desisted from her teaching job in the school and has no right to WHEREFORE, the petition is DISMISSED for lack of merit and the decision of the Court of
recover damages from defendants-appellants. (p. 13, Rollo.) Appeals is AFFIRMED.

Liability for damages under Articles 19, 20 and 21 of the Civil Code arises only from SO ORDERED.
unlawful, willful or negligent acts that are contrary to law, or morals, good customs or
public policy.

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

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

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

The Court of Appeals was correct in finding that petitioner's discontinuance from
teaching was her own choice. While the respondents admittedly wanted her service
terminated, they actually did nothing to physically prevent her from reassuming her
post, as ordered by the school's Board of Directors. That the school principal and Fr.
Wiertz disagreed with the Board's decision to retain her, and some teachers allegedly
threatened to resign en masse, even if true, did not make them liable to her for
damages. They were simply exercising their right of free speech or their right to dissent
from the Board's decision. Their acts were not contrary to law, morals, good customs or
public policy. They did not "illegally dismiss" her for the Board's decision to retain her
prevailed. She was ordered to report for work on July 5, 1982, but she did not comply
with that order. Consequently, whatever loss she may have incurred in the form of lost
earnings was self-inflicted. Volenti non fit injuria.

With respect to petitioner's claim for moral damages, the right to recover them under
Article 21 is based on equity, and he who comes to court to demand equity, must come
with clean hands. Article 21 should be construed as granting the right to recover
damages to injured persons who are not themselves at fault (Mabutas vs. Calapan
Electric Co. [CA] 50 OG 5828, cited in Padilla, Civil Code Annotated, Vol. 1, 1975 Ed., p.
87). Moral damages are recoverable only if the case falls under Article 2219 in relation
to Article 21 (Flordelis vs. Mar, 114 SCRA 41). In the case at bar, petitioners is not without
fault. Firstly, she went on an indefinite leave of absence and failed to report back in
time for the regular opening of classes. Secondly, for reasons known to herself alone, she
refused to sign a written contract of employment. Lastly, she ignored the Board of
Directors' order for her to report for duty on July 5, 1982.

The trial court's award of exemplary damages to her was not justified for she is not
entitled to moral, temperate or compensatory damages. (Art. 2234, Civil Code).

In sum, the Court of Appeals correctly set aside the damages awarded by the trial court
to the petitioner for they did not have any legal or factual basis.
[Abuse of Right]
G.R. No. 122796 December 10, 2001
PETROPHIL CORPORATION, petitioner,
vs.
COURT OF APPEALS, DR. AMANDA TERNIDA-CRUZ, JESSIE DE VERA, MARCIAL MULIG,
ANTONIO CUENCA, and RUFINO CUENCA, respondents.
QUISUMBING, J.:
This petition seeks to annul and set aside the decision1 dated September 26, 1995, of the
Court of Appeals, affirming with modification the decision of the Regional Trial Court of
Manila, Branch 52, in Civil Case No. 87-40930 for specific performance with preliminary
injunction and Civil Case No. 88-43946 for damages. It likewise seeks to annul the
resolution2 dated November 16, 1995 denying petitioner's motion for reconsideration.
On December 27, 1970, petitioner Petrophil Corporation (Petrophil) entered into
contract with private respondent Dr. Amanda Ternida-Cruz, allowing the latter to haul
and transport any and all packages and/or bulk products of Petrophil. The contract
provided among others, that Petrophil could terminate the contract for breach,
negligence, discourtesy, improper and/or inadequate performance or abandonment.
Dr. Cruz was also required to reserve the use of at least two (2) units of tank trucks solely
for the hauling requirements of Petrophil. Paragraph 11 of the contract also stipulated
that the contact shall be for an indefinite period, provided that Petrophil may terminate
said contract at any time with 30 days prior written notice.3
Annexed to the contract was the Penalty Clause which contained calibrated penal
sanctions for infractions that may be committed by Dr. Cruz and/or her
employees.4 Petrophil also required the formation of a Hearing Committee that will hear
the offenses committed by hauling contractors or their employees, to give an erring
party opportunity to be heard prior to the imposition of any penalty.5
In a letter dated May 21, 1987, Petrophil, through its Operations Manager, advised Dr.
Cruz that it was terminating her hauling contract in accordance with paragraph 11
thereof.6 Dr. Cruz appealed to Petrophil for reconsideration but said appeal was denied
on June 5, 1987.
On June 23, 1987, Dr. Cruz filed with the Regional Trial Court of Manila, a complaint
docketed as Civil Case No. 87-40930, against Petrophil seeking the nullity of the
termination of the contract and declaring its suspension as unjustified and contrary to its
terms and conditions.7
On March 11, 1988, the other private respondents herein, Jessie de Vera, Marcial Mulig,
Antonio and Rufino Cuenca, all tank truck drivers of Dr. Cruz, also filed a complaint
docketed as Civil Case No. 88-43946 for damages against Petrophil Operations
Manager Antonio Santos, Pandacan Terminal Manager Crispino A. de Castro, and
Pandacan Terminal Superintendent Jaime Tamayo.8
The two cases were consolidated and jointly tried.
During the hearing, Dr. Cruz testified that she had been in the gasoline business as
dealer, operator and hauling contractor for the last 26 years. She claimed that the
termination of her hauling contract was a retaliation against her for allegedly
sympathizing with the then striking Petrophil employees and for informing the PNOC
president of anomalies perpetrated by some of its officers and employees.
Driver Jessie de Vera corroborated these allegations and said that the termination of Dr.
Cruz's contract was intended to silence her. Further, he testified that before the
termination of the contract, Petrophil officials reduced their hauling trips to make life
harder for them so that they would resign from Dr: Cruz's employ, which in turn would
result in the closure of her business.
Petitioner denied that Petrophil officials were out to starve Dr. Cruz's drivers for their
support of her. They professed that the hauling trips were reduced not because Dr. Cruz
was being punished, but because the company was assigning hauling trips on the basis
of compartmentation and not on a first-come first-serve. Additionally, witnesses for
Petrophil testified that on April 25, 1987, there was a strike at the Pandacan terminal and
Dr. Cruz and her husband were at the picket line. They refused to load petroleum
products, resulting in the disruption of delivery to service stations in Metro Manila and in
the provinces, which in turn resulted in loss of sales and revenues. Because of Dr. Cruz's
refusal to load, the management terminated the hauling contract.
The trial court on May 29, 1991 rendered a decision that reads:
WHEREFORE, judgments are rendered as follows:
1. In Civil Case No. 87-40830 (sic), the defendant Petrophil Corporation is ordered to pay
plaintiff Dra. Amanda Ternida-Cruz the sum of P309,723.65 as unearned hauling charges
and P20,000.00 as attorney's fees and expenses of suit, without prejudice to
indemnification from its officials and employees responsible for the damage, and
making the preliminary injunction permanent.
2. In Civil Case NO. 88-43949 (sic), ordering the defendants therein, jointly and severally,
to pay each of plaintiffs Jessie de Vera and Rufino Cuenca the sums of P64,390.00 and
P5,000.00 as unearned income and attorney's fees, respectively.
Costs in each case against the respective defendants.
SO ORDERED.9
In Civil Cases Nos. 87-40930 and 88-43946, Dr. Cruz alleged that the trial court erred in
not awarding actual damages from loss of income during the illegal and arbitrary
suspension of the hauling contract. She asked that Petrophil be ordered to pay her the
sum of P309,723.65, representing the unearned hauling charges that ended in 1990 and
until said amount is paid and settled; and to award compensatory, exemplary, and
moral damages.10
On September 26, 1995, the Court of Appeals affirmed with modification the decision of
the trial court. It held:
WHEREFORE, the appealed decision is hereby AFFIRMED, with the modification that the
amount of P309,723.65, awarded as unearned hauling charges should earn legal
interest from May 29, 1991 until fully paid.
SO ORDERED.11
The Court of Appeals sustained the trial court declaring that the termination of the
contract was "for cause", and that the procedures set forth in petitioner's policy
guidelines should be followed.
In this petition for review, Petrophil alleges that the Court of Appeals erred in rendering a
decision that:
I
. . . UNLAWFULLY SET ASIDE A VALID AND EXISTING CONTRACTUAL STIPULATION BETWEEN
THE PARTIES.
II
. . . IMPOSED TORTIOUS LIABILITY WHERE THE REQUISITES PRESCRIBED BY LAW FOR SUCH
LIABILITY WERE NOT ESTABLISHED AT ALL BY THE EVIDENCE.12
On the first assigned error, petitioner contends that the courts' a quo finding that the
contract was terminated "for cause" was a superfluity because petitioner was after all
not contractually bound to use the mode, "for cause" under par. 7, nor prohibited from
using the other mode, "without cause", under par. 1 l. It could use either. Petitioner avers
these two modes were not mutually exclusive. The hauling contract did not state that
the existence of conditions for the exercise of one, precluded the exercise of the other.
Petitioner says it chose to terminate the contract under paragraph 11, whose language
was very clear and required no interpretation. Petitioner insists that Article 1377 of the
Civil Code,13 applicable to contracts of adhesion, does not apply in this case.
Private respondents, on the other hand, claim that the contract did not envision a
situation where the contract can be rescinded or terminated after the occurrence of
ambivalent acts which may qualify as cause for termination. The contract's vagueness,
according to private respondents, needed an interpretation. Further, they contend that
even granting arguendo that petitioner had all the right to terminate the contract even
"without cause", petitioner would still be liable to answer for damages under Article 19 of
the Civil Code14 on abuse of right for terminating the contract without reason but out of
sheer whim and caprice.
Two questions must initially be resolved: (1) whether or not the hauling contract needed
interpretation, and (2) whether petitioner was guilty of arbitrary termination of the
contract, which would entitle Dr. Cruz to damages.
On the first issue, we agree with petitioner that the contract clearly provided for two
ways of terminating the contract, and, one mode does not exclude the other. Although
the contract provided for causes for termination, it also stated in paragraph 11 that the
contract was for an indefinite term subject to the right of Petrophil to terminate it any
time after a written notice of 30 days. When the language of a contract is clear, it
requires no interpretation.15 Thus, the finding that the termination of the contract was "for
cause", is immaterial. When petitioner terminated the contract "without cause", it was
required only to give Dr. Cruz a 30-day prior written notice, which it did in this case.
However, we differ with petitioner on the second issue. Recall that before Petrophil
terminated the contract on May 25, 1987, there was a strike of its employees at the
Pandacan terminal. Dr. Cruz and her husband were seen at the picket line and were
reported to have instructed their truck drivers not to load petroleum products. At the
resumption of the operation in Pandacan terminal, Dr. Cruz's contract was suspended
for one week and eventually terminated. Based on these circumstances, the Court of
Appeals like the trial court concluded that Petrophil terminated the contract because
of Dr. Cruz's refusal to load petroleum products during the strike. In respondent court's
view, the termination appeared as a retaliation or punishment for her sympathizing with
the striking employees. Nowhere in the record do we find that petitioner asked her to
explain her actions. Petrophil simply terminated her contract. These factual findings are
binding and conclusive on us, especially in the absence of any allegation that said
findings are unsupported by the evidence, or that the appellate and trial courts
misapprehended these facts.16 In terminating the hauling contract of Dr. Cruz without
hearing her side on the factual context above described, a petitioner opened itself to a
charge of bad faith. While Petrophil had the right to terminate the contract, petitioner
could not act purposely to injure private respondents. In BPI Express Card Corporation
vs. CA, 296 SCRA 260, 272 (1998), we held that there is abuse of a right under Article 19 if
the following elements are present: 1) there is a legal right or duty; 2) which is exercised
in bad faith; 3) for the sole purpose of prejudicing or injuring another. We find all these
three elements present in the instant case. Hence, we are convinced that the
termination by petitioner of the contract with Dr. Cruz calls for appropriate sanctions by
way of damages.
Petitioner likewise contends that the lower court erred when they applied the
procedures set forth in the Policy Statement and Guidelines17 and penalty
clause.18 Petitioner argues that the offenses in the penalty clause refer to product theft
or pilferage or gross violation of company policies on credit, security and the like, as
required in tank truck deliveries. Dr. Cruz claims, in turn, that there was no showing that
her alleged act was covered by the said offenses, hence petitioner erred when it
imposed the procedure in her case. However, this is the first time that petitioner raises
this issue. Well-established is the rule that matters not brought out in the proceedings
below but raised for the first time on appeal will ordinarily not be considered by a
reviewing court.19 Given no compelling reason, we shall not now deviate from this
familiar rule.
On the second assigned error, petitioner contends that the Court of Appeals erred
when it imposed a tortious liability where the requisites therefor were not established by
the evidence. According to petitioner, aside from the hearsay and inadmissible
testimony of Jessie de Vera, there is no other evidence that the termination of the
contract was done with deliberate intent to harm or for the sole purpose of prejudicing
the respondent-drivers. Petitioner adds that the termination was an exercise of a right
and directed primarily at Dr. Cruz.

Article 20 of the Civil Code provides that every person who, contrary to law, willfully or
negligently causes damage to another, shall indemnify the latter for the damage done.
Petitioner might not have deliberately intended to injure the respondent-drivers. But as a
consequence of its willful act directed against Dr. Cruz, respondent-drivers lost their jobs
and ,consequently suffered loss of income. Note that under Article 20, there is no
requirement that the act must be directed at a specific person, but it suffices that a
person suffers damage as a consequence of a wrongful act of another in order that
indemnity could be demanded from the wrongdoer.20The appellate court did not err,
given the circumstances of this case, in awarding damages to respondent-drivers.

WHEREFORE, the petition is DENIED. The decision and resolution of the Court of Appeals
dated September 26, 1995 and November 16, 1995, respectively, are hereby AFFIRMED.
[Malicious Prosecution]
G.R. No. 81262 August 25, 1989
GLOBE MACKAY CABLE AND RADIO CORP., and HERBERT C. HENDRY, petitioners,
vs.
THE HONORABLE COURT OF APPEALS and RESTITUTO M. TOBIAS, respondents.
Atencia & Arias Law Offices for petitioners.
Romulo C. Felizmena for private respondent.
CORTES, J.:
Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay
Cable and Radio Corporation (GLOBE MACKAY) in a dual capacity as a purchasing
agent and administrative assistant to the engineering operations manager. In 1972,
GLOBE MACKAY discovered fictitious purchases and other fraudulent transactions for
which it lost several thousands of pesos.
According to private respondent it was he who actually discovered the anomalies and
reported them on November 10, 1972 to his immediate superior Eduardo T. Ferraren and
to petitioner Herbert C. Hendry who was then the Executive Vice-President and General
Manager of GLOBE MACKAY.
On November 11, 1972, one day after private respondent Tobias made the report,
petitioner Hendry confronted him by stating that he was the number one suspect, and
ordered him to take a one week forced leave, not to communicate with the office, to
leave his table drawers open, and to leave the office keys.
On November 20, 1972, when private respondent Tobias returned to work after the
forced leave, petitioner Hendry went up to him and called him a "crook" and a
"swindler." Tobias was then ordered to take a lie detector test. He was also instructed to
submit specimen of his handwriting, signature, and initials for examination by the police
investigators to determine his complicity in the anomalies.
On December 6,1972, the Manila police investigators submitted a laboratory crime
report (Exh. "A") clearing private respondent of participation in the anomalies.
Not satisfied with the police report, petitioners hired a private investigator, retired Col.
Jose G. Fernandez, who on December 10, 1972, submitted a report (Exh. "2") finding
Tobias guilty. This report however expressly stated that further investigation was still to be
conducted.
Nevertheless, on December 12, 1972, petitioner Hendry issued a memorandum
suspending Tobias from work preparatory to the filing of criminal charges against him.
On December 19,1972, Lt. Dioscoro V. Tagle, Metro Manila Police Chief Document
Examiner, after investigating other documents pertaining to the alleged anomalous
transactions, submitted a second laboratory crime report (Exh. "B") reiterating his
previous finding that the handwritings, signatures, and initials appearing in the checks
and other documents involved in the fraudulent transactions were not those of Tobias.
The lie detector tests conducted on Tobias also yielded negative results.
Notwithstanding the two police reports exculpating Tobias from the anomalies and the
fact that the report of the private investigator, was, by its own terms, not yet complete,
petitioners filed with the City Fiscal of Manila a complaint for estafa through falsification
of commercial documents, later amended to just estafa. Subsequently five other
criminal complaints were filed against Tobias, four of which were for estafa through
Falsification of commercial document while the fifth was for of Article 290 of' the Revised
Penal Code (Discovering Secrets Through Seizure of Correspondence).lâwphî1.ñèt Two
of these complaints were refiled with the Judge Advocate General's Office, which
however, remanded them to the fiscal's office. All of the six criminal complaints were
dismissed by the fiscal. Petitioners appealed four of the fiscal's resolutions dismissing the
criminal complaints with the Secretary of Justice, who, however, affirmed their dismissal.
In the meantime, on January 17, 1973, Tobias received a notice (Exh. "F") from
petitioners that his employment has been terminated effective December 13, 1972.
Whereupon, Tobias filed a complaint for illegal dismissal. The labor arbiter dismissed the
complaint. On appeal, the National Labor Relations Commission (NLRC) reversed the
labor arbiter's decision. However, the Secretary of Labor, acting on petitioners' appeal
from the NLRC ruling, reinstated the labor arbiter's decision. Tobias appealed the
Secretary of Labor's order with the Office of the President. During the pendency of the
appeal with said office, petitioners and private respondent Tobias entered into a
compromise agreement regarding the latter's complaint for illegal dismissal.
Unemployed, Tobias sought employment with the Republic Telephone Company
(RETELCO). However, petitioner Hendry, without being asked by RETELCO, wrote a letter
to the latter stating that Tobias was dismissed by GLOBE MACKAY due to dishonesty.
Private respondent Tobias filed a civil case for damages anchored on alleged unlawful,
malicious, oppressive, and abusive acts of petitioners. Petitioner Hendry, claiming illness,
did not testify during the hearings. The Regional Trial Court (RTC) of Manila, Branch IX,
through Judge Manuel T. Reyes rendered judgment in favor of private respondent by
ordering petitioners to pay him eighty thousand pesos (P80,000.00) as actual damages,
two hundred thousand pesos (P200,000.00) as moral damages, twenty thousand pesos
(P20,000.00) as exemplary damages, thirty thousand pesos (P30,000.00) as attorney's
fees, and costs. Petitioners appealed the RTC decision to the Court of Appeals. On the
other hand, Tobias appealed as to the amount of damages. However, the Court of
Appeals, an a decision dated August 31, 1987 affirmed the RTC decision in toto.
Petitioners' motion for reconsideration having been denied, the instant petition for
review on certiorari was filed.
The main issue in this case is whether or not petitioners are liable for damages to private
respondent.
Petitioners contend that they could not be made liable for damages in the lawful
exercise of their right to dismiss private respondent.
On the other hand, private respondent contends that because of petitioners' abusive
manner in dismissing him as well as for the inhuman treatment he got from them, the
Petitioners must indemnify him for the damage that he had suffered.
One of the more notable innovations of the New Civil Code is the codification of "some
basic principles that are to be observed for the rightful relationship between human
beings and for the stability of the social order." [REPORT ON THE CODE COMMISSION ON
THE PROPOSED CIVIL CODE OF THE PHILIPPINES, p. 39]. The framers of the Code, seeking
to remedy the defect of the old Code which merely stated the effects of the law, but
failed to draw out its spirit, incorporated certain fundamental precepts which were
"designed to indicate certain norms that spring from the fountain of good conscience"
and which were also meant to serve as "guides for human conduct [that] should run as
golden threads through society, to the end that law may approach its supreme ideal,
which is the sway and dominance of justice" (Id.) Foremost among these principles is
that pronounced in Article 19 which provides:
Art. 19. Every person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good faith.
This article, known to contain what is commonly referred to as the principle of abuse of
rights, sets certain standards which must be observed not only in the exercise of one's
rights but also in the performance of one's duties. These standards are the following: to
act with justice; to give everyone his due; and to observe honesty and good faith. The
law, therefore, recognizes a primordial limitation on all rights; that in their exercise, the
norms of human conduct set forth in Article 19 must be observed. A right, though by
itself legal because recognized or granted by law as such, may nevertheless become
the source of some illegality. When a right is exercised in a manner which does not
conform with the norms enshrined in Article 19 and results in damage to another, a legal
wrong is thereby committed for which the wrongdoer must be held responsible. But
while Article 19 lays down a rule of conduct for the government of human relations and
for the maintenance of social order, it does not provide a remedy for its violation.
Generally, an action for damages under either Article 20 or Article 21 would be proper.
Article 20, which pertains to damage arising from a violation of law, provides that:
Art. 20. Every person who contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for the same.
However, in the case at bar, petitioners claim that they did not violate any provision of
law since they were merely exercising their legal right to dismiss private respondent. This
does not, however, leave private respondent with no relief because Article 21 of the
Civil Code provides that:
Art. 21. Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.
This article, adopted to remedy the "countless gaps in the statutes, which leave so many
victims of moral wrongs helpless, even though they have actually suffered material and
moral injury" [Id.] should "vouchsafe adequate legal remedy for that untold number of
moral wrongs which it is impossible for human foresight to provide for specifically in the
statutes" [Id. it p. 40; See also PNB v. CA, G.R. No. L-27155, May 18,1978, 83 SCRA 237,
247].
In determining whether or not the principle of abuse of rights may be invoked, there is
no rigid test which can be applied. While the Court has not hesitated to apply Article 19
whether the legal and factual circumstances called for its application [See for e.g.,
Velayo v. Shell Co. of the Phil., Ltd., 100 Phil. 186 (1956); PNB v. CA, supra;Grand Union
Supermarket, Inc. v. Espino, Jr., G.R. No. L-48250, December 28, 1979, 94 SCRA 953; PAL
v. CA, G.R. No. L-46558, July 31,1981,106 SCRA 391; United General Industries, Inc, v.
Paler G.R. No. L-30205, March 15,1982,112 SCRA 404; Rubio v. CA, G.R. No. 50911, August
21, 1987, 153 SCRA 183] the question of whether or not the principle of abuse of rights
has been violated resulting in damages under Article 20 or Article 21 or other applicable
provision of law, depends on the circumstances of each case. And in the instant case,
the Court, after examining the record and considering certain significant circumstances,
finds that all petitioners have indeed abused the right that they invoke, causing
damage to private respondent and for which the latter must now be indemnified.
The trial court made a finding that notwithstanding the fact that it was private
respondent Tobias who reported the possible existence of anomalous transactions,
petitioner Hendry "showed belligerence and told plaintiff (private respondent herein)
that he was the number one suspect and to take a one week vacation leave, not to
communicate with the office, to leave his table drawers open, and to leave his keys to
said defendant (petitioner Hendry)" [RTC Decision, p. 2; Rollo, p. 232]. This, petitioners do
not dispute. But regardless of whether or not it was private respondent Tobias who
reported the anomalies to petitioners, the latter's reaction towards the former upon
uncovering the anomalies was less than civil. An employer who harbors suspicions that
an employee has committed dishonesty might be justified in taking the appropriate
action such as ordering an investigation and directing the employee to go on a leave.
Firmness and the resolve to uncover the truth would also be expected from such
employer. But the high-handed treatment accorded Tobias by petitioners was certainly
uncalled for. And this reprehensible attitude of petitioners was to continue when private
respondent returned to work on November 20, 1972 after his one week forced leave.
Upon reporting for work, Tobias was confronted by Hendry who said. "Tobby, you are the
crook and swindler in this company." Considering that the first report made by the
police investigators was submitted only on December 10, 1972 [See Exh. A] the
statement made by petitioner Hendry was baseless. The imputation of guilt without basis
and the pattern of harassment during the investigations of Tobias transgress the
standards of human conduct set forth in Article 19 of the Civil Code. The Court has
already ruled that the right of the employer to dismiss an employee should not be
confused with the manner in which the right is exercised and the effects flowing
therefrom. If the dismissal is done abusively, then the employer is liable for damages to
the employee [Quisaba v. Sta. Ines-Melale Veneer and Plywood Inc., G.R. No. L-38088,
August 30, 1974, 58 SCRA 771; See also Philippine Refining Co., Inc. v. Garcia, G.R. No. L-
21871, September 27,1966, 18 SCRA 107] Under the circumstances of the instant case,
the petitioners clearly failed to exercise in a legitimate manner their right to dismiss
Tobias, giving the latter the right to recover damages under Article 19 in relation to
Article 21 of the Civil Code.
But petitioners were not content with just dismissing Tobias. Several other tortious acts
were committed by petitioners against Tobias after the latter's termination from work.
Towards the latter part of January, 1973, after the filing of the first of six criminal
complaints against Tobias, the latter talked to Hendry to protest the actions taken
against him. In response, Hendry cut short Tobias' protestations by telling him to just
confess or else the company would file a hundred more cases against him until he
landed in jail. Hendry added that, "You Filipinos cannot be trusted." The threat
unmasked petitioner's bad faith in the various actions taken against Tobias. On the other
hand, the scornful remark about Filipinos as well as Hendry's earlier statements about
Tobias being a "crook" and "swindler" are clear violations of 'Tobias' personal dignity [See
Article 26, Civil Code].
The next tortious act committed by petitioners was the writing of a letter to RETELCO
sometime in October 1974, stating that Tobias had been dismissed by GLOBE MACKAY
due to dishonesty. Because of the letter, Tobias failed to gain employment with RETELCO
and as a result of which, Tobias remained unemployed for a longer period of time. For
this further damage suffered by Tobias, petitioners must likewise be held liable for
damages consistent with Article 2176 of the Civil Code. Petitioners, however, contend
that they have a "moral, if not legal, duty to forewarn other employers of the kind of
employee the plaintiff (private respondent herein) was." [Petition, p. 14; Rollo, p. 15].
Petitioners further claim that "it is the accepted moral and societal obligation of every
man to advise or warn his fellowmen of any threat or danger to the latter's life, honor or
property. And this includes warning one's brethren of the possible dangers involved in
dealing with, or accepting into confidence, a man whose honesty and integrity is
suspect" [Id.]. These arguments, rather than justify petitioners' act, reveal a seeming
obsession to prevent Tobias from getting a job, even after almost two years from the
time Tobias was dismissed.
Finally, there is the matter of the filing by petitioners of six criminal complaints against
Tobias. Petitioners contend that there is no case against them for malicious prosecution
and that they cannot be "penalized for exercising their right and prerogative of seeking
justice by filing criminal complaints against an employee who was their principal suspect
in the commission of forgeries and in the perpetration of anomalous transactions which
defrauded them of substantial sums of money" [Petition, p. 10, Rollo, p. 11].
While sound principles of justice and public policy dictate that persons shall have free
resort to the courts for redress of wrongs and vindication of their rights [Buenaventura v.
Sto. Domingo, 103 Phil. 239 (1958)], the right to institute criminal prosecutions can not be
exercised maliciously and in bad faith [Ventura v. Bernabe, G.R. No. L-26760, April 30,
1971, 38 SCRA 5871.] Hence, in Yutuk V. Manila Electric Co., G.R. No. L-13016, May 31,
1961, 2 SCRA 337, the Court held that the right to file criminal complaints should not be
used as a weapon to force an alleged debtor to pay an indebtedness. To do so would
be a clear perversion of the function of the criminal processes and of the courts of
justice. And in Hawpia CA, G.R. No. L-20047, June 30, 1967. 20 SCRA 536 the Court
upheld the judgment against the petitioner for actual and moral damages and
attorney's fees after making a finding that petitioner, with persistence, filed at least six
criminal complaints against respondent, all of which were dismissed.
To constitute malicious prosecution, there must be proof that the prosecution was
prompted by a design to vex and humiliate a person and that it was initiated
deliberately by the defendant knowing that the charges were false and groundless
[Manila Gas Corporation v. CA, G.R. No. L-44190, October 30,1980, 100 SCRA 602].
Concededly, the filing of a suit by itself, does not render a person liable for malicious
prosecution [Inhelder Corporation v. CA, G.R. No. 52358, May 301983122 SCRA 576]. The
mere dismissal by the fiscal of the criminal complaint is not a ground for an award of
damages for malicious prosecution if there is no competent evidence to show that the
complainant had acted in bad faith [Sison v. David, G.R. No. L-11268, January 28,1961, 1
SCRA 60].
In the instant case, however, the trial court made a finding that petitioners acted in bad
faith in filing the criminal complaints against Tobias, observing that:
xxx
Defendants (petitioners herein) filed with the Fiscal's Office of Manila a total of six (6)
criminal cases, five (5) of which were for estafa thru falsification of commercial
document and one for violation of Art. 290 of the Revised Penal Code "discovering
secrets thru seizure of correspondence," and all were dismissed for insufficiency or lack
of evidence." The dismissal of four (4) of the cases was appealed to the Ministry of
Justice, but said Ministry invariably sustained the dismissal of the cases. As above
adverted to, two of these cases were refiled with the Judge Advocate General's Office
of the Armed Forces of the Philippines to railroad plaintiffs arrest and detention in the
military stockade, but this was frustrated by a presidential decree transferring criminal
cases involving civilians to the civil courts.
xxx
To be sure, when despite the two (2) police reports embodying the findings of Lt.
Dioscoro Tagle, Chief Document Examiner of the Manila Police Department, clearing
plaintiff of participation or involvement in the fraudulent transactions complained of,
despite the negative results of the lie detector tests which defendants compelled
plaintiff to undergo, and although the police investigation was "still under follow-up and
a supplementary report will be submitted after all the evidence has been gathered,"
defendants hastily filed six (6) criminal cases with the city Fiscal's Office of Manila, five (5)
for estafa thru falsification of commercial document and one (1) for violation of Art. 290
of the Revised Penal Code, so much so that as was to be expected, all six (6) cases
were dismissed, with one of the investigating fiscals, Asst. Fiscal de Guia, commenting in
one case that, "Indeed, the haphazard way this case was investigated is evident.
Evident likewise is the flurry and haste in the filing of this case against respondent Tobias,"
there can be no mistaking that defendants would not but be motivated by malicious
and unlawful intent to harass, oppress, and cause damage to plaintiff.
xxx
[RTC Decision, pp. 5-6; Rollo, pp. 235-236].
In addition to the observations made by the trial court, the Court finds it significant that
the criminal complaints were filed during the pendency of the illegal dismissal case filed
by Tobias against petitioners. This explains the haste in which the complaints were filed,
which the trial court earlier noted. But petitioners, to prove their good faith, point to the
fact that only six complaints were filed against Tobias when they could have allegedly
filed one hundred cases, considering the number of anomalous transactions committed
against GLOBE MACKAY. However, petitioners' good faith is belied by the threat made
by Hendry after the filing of the first complaint that one hundred more cases would be
filed against Tobias. In effect, the possible filing of one hundred more cases was made
to hang like the sword of Damocles over the head of Tobias. In fine, considering the
haste in which the criminal complaints were filed, the fact that they were filed during
the pendency of the illegal dismissal case against petitioners, the threat made by
Hendry, the fact that the cases were filed notwithstanding the two police reports
exculpating Tobias from involvement in the anomalies committed against GLOBE
MACKAY, coupled by the eventual dismissal of all the cases, the Court is led into no
other conclusion than that petitioners were motivated by malicious intent in filing the six
criminal complaints against Tobias.
Petitioners next contend that the award of damages was excessive. In the complaint
filed against petitioners, Tobias prayed for the following: one hundred thousand pesos
(P100,000.00) as actual damages; fifty thousand pesos (P50,000.00) as exemplary
damages; eight hundred thousand pesos (P800,000.00) as moral damages; fifty
thousand pesos (P50,000.00) as attorney's fees; and costs. The trial court, after making a
computation of the damages incurred by Tobias [See RTC Decision, pp. 7-8; Rollo, pp.
154-1551, awarded him the following: eighty thousand pesos (P80,000.00) as actual
damages; two hundred thousand pesos (P200,000.00) as moral damages; twenty
thousand pesos (P20,000.00) as exemplary damages; thirty thousand pesos (P30,000.00)
as attorney's fees; and, costs. It must be underscored that petitioners have been guilty
of committing several actionable tortious acts, i.e., the abusive manner in which they
dismissed Tobias from work including the baseless imputation of guilt and the
harassment during the investigations; the defamatory language heaped on Tobias as
well as the scornful remark on Filipinos; the poison letter sent to RETELCO which resulted
in Tobias' loss of possible employment; and, the malicious filing of the criminal
complaints. Considering the extent of the damage wrought on Tobias, the Court finds
that, contrary to petitioners' contention, the amount of damages awarded to Tobias
was reasonable under the circumstances.
been dismissed from his employment, which was a valid and legal act of the
defendants-appellants (petitioners herein).lâwphî1.ñèt " [Petition, p. 17; Rollo, p. 18].
According to the principle of damnum absque injuria, damage or loss which does not
constitute a violation of a legal right or amount to a legal wrong is not actionable
[Escano v. CA, G.R. No. L-47207, September 25, 1980, 100 SCRA 197; See also Gilchrist v.
Cuddy 29 Phil, 542 (1915); The Board of Liquidators v. Kalaw, G.R. No. L-18805, August 14,
1967, 20 SCRA 987]. This principle finds no application in this case. It bears repeating that
even granting that petitioners might have had the right to dismiss Tobias from work, the
abusive manner in which that right was exercised amounted to a legal wrong for which
petitioners must now be held liable. Moreover, the damage incurred by Tobias was not
only in connection with the abusive manner in which he was dismissed but was also the
result of several other quasi-delictual acts committed by petitioners.
Petitioners next question the award of moral damages. However, the Court has already
ruled in Wassmer v. Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA 648, 653, that
[p]er express provision of Article 2219 (10) of the New Civil Code, moral damages are
recoverable in the cases mentioned in Article 21 of said Code." Hence, the Court of
Appeals committed no error in awarding moral damages to Tobias.
Lastly, the award of exemplary damages is impugned by petitioners. Although Article
2231 of the Civil Code provides that "[i]n quasi-delicts, exemplary damages may be
granted if the defendant acted with gross negligence," the Court, in Zulueta v. Pan
American World Airways, Inc., G.R. No. L- 28589, January 8, 1973, 49 SCRA 1, ruled that if
gross negligence warrants the award of exemplary damages, with more reason is its
imposition justified when the act performed is deliberate, malicious and tainted with
bad faith. As in the Zuluetacase, the nature of the wrongful acts shown to have been
committed by petitioners against Tobias is sufficient basis for the award of exemplary
damages to the latter.
WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals in
CA-G.R. CV No. 09055 is AFFIRMED.

Yet, petitioners still insist that the award of damages was improper, invoking the principle
of damnum absqueinjuria. It is argued that "[t]he only probable actual damage that
plaintiff (private respondent herein) could have suffered was a direct result of his having
[Malicious Prosecution]
G.R. No. 107019 March 20, 1997
FRANKLIN M. DRILON, AURELIO C. TRAMPE, GREGORIO A. ARIZALA, CESAR M. SOLIS and
FERDINAND R. ABESAMIS, petitioners,
vs.
COURT OF APPEALS, HON. GEORGE C. MACLI-ING, in his capacity as Presiding Judge of
Branch 100 of the Regional Trial Court of Quezon City, and HOMOBONO
ADAZA, respondents.
HERMOSISIMA, JR., J.:
Petitioners seek the reversal of the Resolutions of respondent Court of Appeals in CA-
G.R. SP No. 25080 dated January 31, 1992 and September 2, 1992 affirming the Orders,
dated February 8, 1991 and May 14, 1991, of respondent Judge George C. Macli-ing
which denied herein petitioner's Motion to Dismiss the complaint filed in Civil Case No.
Q-90-6073 by respondent Homobono Adaza.
The facts are not in dispute.
In a letter-complaint to then Secretary of Justice Franklin Drilon 1 dated March 20, 1990,
General Renato de Villa, 2who was then the Chief of Staff of the Armed Forces of the
Philippines, requested the Department of Justice to order the investigation of several
individuals named therein, including herein private respondent Homobono Adaza, for
their alleged participation in the failed December 1989 coup d'etat. The letter-
complaint was based on the affidavit of Brigadier General Alejandro Galido, Captain
Oscarlito Mapalo, Colonel Juan Mamorno, Colonel Hernani Figueroa and Major
Eduardo Sebastian.
Gen. de Villa's letter-complaint with its annexes was referred for preliminary inquiry to the
Special Composite Team of Prosecutors created pursuant to Department of Justice
Order No. 5 dated January 10, 1990. Petitioner then Assistant Chief State Prosecutor
Aurelio Trampe, 3 the Team Leader, finding sufficient basis to continue the inquiry, issued
a subpoena to the individuals named in the letter-complaint, Adaza included, and
assigned the case for preliminary investigation to a panel of investigators composed of
prosecutors George Arizala, as Chairman, and Ferdinand Abesamis and Cesar Solis as
members. The case was docketed as I.S. No. DOJ-SC-90-013.
On April 17, 1990, the panel released its findings, thru a Resolution, which reads:
PREMISES CONSIDERED, we find and so hold that there is probable cause to hold herein
respondents for trial for the crime of REBELLION WITH MURDER AND FRUSTRATED MURDER.
Hence we respectfully recommend the filing of the corresponding information against
them in court. 4
The above Resolution became the basis for the filing of an Information, 5 dated April 18,
1990, charging private respondent with the crime of rebellion with murder and frustrated
murder before the Regional Trial Court of Quezon City, with no recommendation as to
bail. 6
Feeling aggrieved by the institution of these proceedings against him, private
respondent Adaza filed a complaint for damages, 7 dated July 11, 1990, before Branch
100 of the Regional Trial Court of Quezon City. The complaint was docketed as Civil
Case No. Q-90-6073 entitled, "Homobono Adaza, plaintiff versus Franklin Drilon, et
al., respondents." In his complaint, Adaza charged petitioners with engaging in a
deliberate, willful and malicious experimentation by filing against him a charge of
rebellion complexed with murder and frustrated murder when petitioners, according to
Adaza, were fully aware of the non-existence of such crime in the statute books.
On October 15, 1990, petitioners filed a Motion to Dismiss Adaza's complaint on the
ground that said complaint states no actionable wrong constituting a valid cause of
action against petitioners.
On February 8, 1991, public respondent judge issued an Order 8 denying petitioners'
Motion to Dismiss. In the same Order, petitioners were required to file their answer to the
complaint within fifteen (15) days from receipt of the Order.
Petitioners moved for a reconsideration of the Order of denial, but the same was
likewise denied by respondent Judge in another Order dated May 14, 1991. 9 The
subsequent Order reiterated that petitioners file their responsive pleading within the
prescribed reglementary period.
Instead of filing their answer as ordered, petitioners filed on June 5, 1991 a petition
for certiorari under Rule 65 before the Court of Appeals, docketed as CA-G.R. No.
25080, alleging grave abuse of discretion on the part of the respondent Judge in ruling
that sufficient cause of action exists to warrant a full-blown hearing of the case filed by
Adaza and thus denying petitioners' Motion to Dismiss.
In its Resolution promulgated on January 31, 1992, the appellate court dismissed the
petition for lack of merit and ordered respondent Judge to proceed with the trial of Civil
Case No. Q-90-6073. 10 A Motion for Reconsideration having been subsequently filed on
February 28, 1992, the court a quo denied the same in a Resolution dated September 2,
1992. 11
Hence, this petition, dated October 9, 1992, pleading this Court to exercise its power of
review under Rule 45 of the Revised Rules of Court.
On January 13, 1993, however, this Court, thru the Second Division, dismissed the petition
for failure to comply with Revised Circular No. 1-88, particularly the requirement on the
payment of the prescribed docketing fees. 12
On March 8, 1993, 13 we reinstated the petition and required the respondents to
comment on the aforesaid petition. In the same Resolution, a temporary restraining
order was issued by this Court enjoining respondent Judge from further proceeding with
Civil Case No. Q-90-6073 until further orders from this Court.
The petition has merit.
In his Comment, 14 dated March 23, 1993, respondent Adaza maintains that his claim
before the trial court was merely a suit for damages based on tort by reason of
petitioners' various malfeasance, misfeasance and nonfeasance in office, as well as for
violation by the petitioners of Section 3 (e) of Republic Act No. 3019, otherwise known as
the Anti-Graft and Corrupt Practices Act. It was not a suit for malicious prosecution.
Private respondent is taking us for a ride. A cursory perusal of the complaint filed by
Adaza before respondent Judge George Macli-ing reveals that it is one for malicious
prosecution against the petitioners for the latter's filing of the charge against him of
rebellion with murder and frustrated murder. An examination of the records would show
that this latest posture as to the nature of his cause of action is only being raised for the
first time on appeal. Nowhere in his complaint filed with the trial court did respondent
Adaza allege that his action is one based on tort or on Section 3 (e) or Republic Act No.
3019. Such a change of theory cannot be allowed. When a party adopts a certain
theory in the court below, he will not be permitted to change his theory on appeal, for
to permit him to do so would not only be unfair to the other party but it would also be
offensive to the basic rules of fair play, justice and due process. 15 Any member of the
Bar, even if not too schooled in the art of litigation, would easily discern that Adaza's
complaint is no doubt a suit for damages for malicious prosecution against the herein
petitioners. Unfortunately, however, his complaint filed with the trial court suffers from a
fatal infirmity — that of failure to state a cause of action — and should have been
dismissed right from the start. We shall show why.
The term malicious prosecution has been defined in various ways. In American
jurisdiction, it is defined as:
One begun in malice without probable cause to believe the charges can be sustained
(Eustace v. Dechter, 28 Cal. App. 2d. 706, 83 P. 2d. 525). Instituted with intention of
injuring defendant and without probable cause, and which terminates in favor of the
person prosecuted. For this injury an action on the case lies, called the action of
malicious prosecution (Hicks v. Brantley, 29 S.E. 459, 102 Ga. 264; Eggett v. Allen, 96 N.W.
803, 119 Wis. 625). 16
In Philippine jurisdiction, it has been defined as:
An action for damages brought by one against whom a criminal prosecution, civil suit,
or other legal proceeding has been instituted maliciously and without probable cause,
after the termination of such prosecution, suit, or other proceeding in favor of the
defendant therein. The gist of the action is the putting of legal process in force,
regularly, for the mere purpose of vexation or injury (Cabasaan v. Anota, 14169-R,
November 19, 1956). 17
The statutory basis for a civil action for damages for malicious prosecution are found in
the provisions of the New Civil Code on Human Relations and on damages particularly
Articles 19, 20, 21, 26, 29, 32, 33, 35, 2217 and 2219 (8). 18 To constitute malicious
prosecution, however, 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. 19 Thus, in order for a malicious prosecution suit to prosper, the
plaintiff must prove three (3) elements: (1) the fact of the prosecution and the further
fact that the defendant was himself the prosecutor and that the action finally
terminated with an acquittal; (2) that in bringing the action, the prosecutor acted
without probable cause; and (3) that the prosecutor was actuated or impelled by legal
malice, that is by improper or sinister motive. 20 All these requisites must concur.
Judging from the face of the complaint itself filed by Adaza against the herein
petitioners, none of the foregoing requisites have been alleged therein, thus rendering
the complaint dismissible on the ground of failure to state a cause of action under
Section 1 (g), Rule 16 of the Revised Rules of Court.
There is nothing in the records which shows, and the complaint does not allege, that
Criminal Case No. Q-90-11855, filed by the petitioners against respondent Adaza for
Rebellion with Murder and Frustrated Murder, has been finally terminated and therein
accused Adaza acquitted of the charge. Not even Adaza himself, thru counsel, makes
any positive asseveration on this aspect that would establish his acquittal. Insofar as
Criminal Case No. Q-90-11855 is concerned, what appears clear from the records only is
that respondent has been discharged on a writ of habeas corpus and granted
bail. 21 This is not, however, considered the termination of the action contemplated
under Philippine jurisdiction to warrant the institution of a malicious prosecution suit
against those responsible for the filing of the information against him.
The complaint likewise does not make any allegation that the prosecution acted
without probable cause in filing the criminal information dated April 18, 1990 for
rebellion with murder and frustrated murder. Elementarily defined, 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. It is well-settled that one
cannot be held liable for maliciously instituting a prosecution where one has acted with
probable cause. Elsewise stated, a suit for malicious prosecution 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. 22
In the case under consideration, the decision of the Special Team of Prosecutors to file
the information for rebellion with murder and frustrated murder against respondent
Adaza, among others, cannot be dismissed as the mere product of whim or caprice on
the part of the prosecutors who conducted the preliminary investigation. Said decision
was fully justified in an eighteen (18)-page Resolution dated April 17, 1990. 23 While it is
true that the petitioners were fully aware of the prevailing jurisprudence enunciated
in People v. Hernandez, 24 which proscribes the complexing of murder and other
common crimes with rebellion, petitioners were of the honest conviction that the
Hernandez Case can be differentiated from the present case. The petitioners thus
argued:
Of course we are aware of the ruling in People vs. Hernandez, 99 Phil. 515, which held
that common crimes like murder, arson, etc. are absorbed by rebellion. However, the
Hernandez case is different from the present case before us. In the Hernandez case, the
common crimes of murder, arson, etc. were found by the fiscal to have been
committed as a necessary means to commit rebellion, or in furtherance thereof. Thus,
the fiscal filed an information for rebellion alleging those common crimes as a necessary
means of committing the offense charged under the second part of Article 48, RPC.
We, however, find no occasion to apply the Hernandez ruling since as intimated above,
the crimes of murder and frustrated murder in this case were absolutely unnecessary to
commit rebellion although they were the natural consequences of the unlawful
bombing. Hence, the applicable provision is the first part of Article 48 of the RPC. 25
While the Supreme Court in the case of Enrile v. Salazar, 26 addressing the issue of
whether or not the Hernandez doctrine is still good law, in a 10-3 vote, did not sustain
the position espoused by the herein petitioners on the matter, three justices 27 felt the
need to re-study the Hernandez ruling in light of present-day developments, among
whom was then Chief Justice Marcelo Fernan who wrote a dissenting opinion in this
wise:
I am constrained to write this separate opinion on what seems to be a rigid adherence
to the 1956 ruling of the Court. The numerous challenges to the doctrine enunciated in
the case of People vs.Hernandez, 99 Phil. 515 (1956), should at once demonstrate the
need to redefine the applicability of said doctrine so as to make it conformable with
accepted and well-settled principles of criminal law and jurisprudence.
To my mind, the Hernandez doctrine should not be interpreted as an all-embracing
authority for the rule that all common crimes committed on the occasion, or in
furtherance of, or in connection with, rebellion are absorbed by the latter. To that
extent, I cannot go along with the view of the majority in the instant case that
"Hernandez remains binding doctrine operating to prohibit the complexing of rebellion
with any other offense committed on the occasion thereof, either as a means necessary
to its commission or as an unintended effect of an activity that constitutes rebellion" (p.
9, Decision).
The Hernandez doctrine has served the purpose for which it was applied by the Court in
1956 during the communist-inspired rebellion of the Huks. The changes in our society in
the span of 34 years since then have far-reaching effects on the all-embracing
applicability of the doctrine considering the emergence of alternative modes of seizing
the powers of the duly-constituted Government not contemplated in Articles 134 and
135 of the Revised Penal Code and their consequent effects on the lives of our people.
The doctrine was good law then, but I believe that there is a certain aspect of the
Hernandez doctrine that needs clarification. 28
Apparently, not even the Supreme Court then was of one mind in debunking the theory
being advanced by the petitioners in this case, some of whom were also the petitioners
in the Enrile case. Nevertheless, we held in Enrilethat the Information filed therein
properly charged an offense — that of simple rebellion — 29 and thereupon ordered the
remand of the case to the trial court for the prosecution of the named accused 30 in the
Information therein. Following this lead, the Information against Adaza in Criminal Case
No. Q-90-11855 was not quashed, but was instead treated likewise as charging the
crime of simple rebellion.
A doubtful or difficult question of law may become the basis of good faith and, in this
regard, the law always accords to public officials the presumption of good faith and
regularity in the performance of official duties. 31 Any person who seeks to establish
otherwise has the burden of proving bad faith or ill-motive. Here, since the petitioners
were of the honest conviction that there was probable cause to hold respondent
Adaza for trial for the crime of rebellion with murder and frustrated murder, and since
Adaza himself, through counsel, did not allege in his complaint lack of probable cause,
we find that the petitioners cannot be held liable for malicious prosecution. Needless to
say, probable cause was not wanting in the institution of Criminal Case No. Q-90-11855
against Adaza.
As to the requirement that the prosecutor must be impelled by malice in bringing the
unfounded action, suffice it to state that the presence of probable cause signifies, as a
legal consequence, the absence of malice. 32 At the risk of being repetitious, it is
evident in this case that petitioners were not motivated by malicious intent or by a
sinister design to unduly harass private respondent, but only by a well-founded belief
that respondent Adaza can be held for trial for the crime alleged in the information.
All told, the complaint, dated July 11, 1990, filed by Adaza before Branch 100 of the
Regional Trial Court against the petitioners does not allege facts sufficient to constitute a
cause of action for malicious prosecution. Lack of cause of action, as a ground for a
motion to dismiss under Section 1 (g), Rule 16 of the Revised Rules of Court, must appear
on the face of the complaint itself, meaning that it must be determined from the
allegations of the complaint and from none other. 33 The infirmity of the complaint in this
regard is only too obvious to have escaped respondent judge's attention. Paragraph 14
of the complaint which states:
xxx xxx xxx
14. The malicious prosecution, nay persecution, of plaintiff for a non-existent crime had
severely injured and besmirched plaintiff's name and reputation and forever stigmatized
his stature as a public figure, thereby causing him extreme physical suffering, serious
anxiety, mental anguish, moral shock and social humiliation. 34
is a mere conclusion of law and is not an averment or allegation of ultimate facts. It
does not, therefore, aid in any wise the complaint in setting forth a valid cause of action
against the petitioners.

It is worthy to note that this case was elevated to the public respondent Court of
Appeals and now to this Court because of respondent Judge Macli-ing's denial of
petitioners' motion to dismiss the Adaza complaint. The ordinary procedure, as a
general rule, is that petitioners should have filed an answer, go to trial, and if the
decision is adverse, reiterate the issue on appeal. 35 This general rule, however, is subject
to certain exceptions, among which are, if the court denying the motion to dismiss acts
without or in excess of jurisdiction or with grave abuse of discretion, in which
case certiorari under Rule 65 may be availed of. The reason is that it would be unfair to
require the defendants (petitioners in this case) to undergo the ordeal and expense of
trial under such circumstances, because the remedy of appeal then would then not be
plain and adequate. 36 Judge Macli-ing committed grave abuse of discretion in
denying petitioners' motion to dismiss the Adaza complaint, and thus public respondent
Court of Appeals should have issued the writ of certiorari prayed for by the petitioners
and annulled the February 8, 1991 and May 14, 1991 Orders of respondent Judge. It was
grievous error on the part of the court a quo not to have done so. This has to be
corrected. Respondent Adaza's baseless action cannot be sustained for this would
unjustly compel the petitioners to needlessly go through a protracted trial and thereby
unduly burden the court with one more futile and inconsequential case.

WHEREFORE, the petition is GRANTED. The Resolutions of respondent Court of Appeals

dated January 31, 1992 and September 2, 1992 affirming the February 8, 1991 and May
14, 1991 Orders of respondent Judge George C. Macli-ing are all hereby NULLIFIED AND
SET ASIDE. Respondent Judge is DIRECTED to take no further action on Civil Case No. Q-
90-6073 except to DISMISS the same.
[Malicious Prosecution]
G.R. No. 160959 April 3, 2007
ANTONIO DIAZ, Petitioner,
vs.
DAVAO LIGHT AND POWER CO., INC., MANUEL M. ORIG and ELISEO R. BRAGANZA, JR.,
Respondents.
DECISION
CALLEJO, SR., J.:
This is a Petition for Review on Certiorari of the Decision 1 of the Court of Appeals (CA) in
CA-G.R. CV No. 68709, which affirmed the Decision2 of the Regional Trial Court (RTC) of
Davao City, Branch 11, in Civil Case No. 21,655-92.
Antecedents
Antonio G. Diaz was the president of Diaz and Co., Inc. He was also vice-president of
Diaz Realty Inc. which, in turn, owned the Doña Segunda Hotel,3 formerly known as the
Davao Imperial Hotel (Imperial Hotel Building),4 located along C.M. Recto Avenue,
Davao City. Davao Light and Power Co., Inc. (DLPC), on the other hand, is a public
utility duly franchised to provide light, heat and power to its customers in Davao City
and the municipalities of Panabo, Santo Tomas and Carmen, in Davao del Norte.5
Manuel Orig was the resident manager/vice-president for Administration of DLPC,6 while
Eliseo R. Braganza was its in-house lawyer.7 DLPC supplied the Doña Segunda Building
(Imperial Hotel Building) with electricity service8 under Account No. 087-10669 and with
Meter No. 36510.9
On July 25, 1983, DLPC sent a Notice of Disconnection10 to Diaz and Co., Inc. informing it
that, as of June 13, 1983, the hotel’s unpaid electric consumption bill amounted to
₱190,111.02.11 It also warned that if the amount was not paid, DLPC would be impelled
to discontinue its service. Since Diaz and Co., Inc. ignored the letter, Meter No. 36510
was disconnected on July 29, 1983.12
DLPC then filed a complaint for collection before the RTC, Cebu City, which case was
docketed as Civil Case No. CEB-1049.
Meanwhile, in 1984, the National Food Authority (NFA) established its KADIWA13 store at
C.M. Recto Avenue, Davao City.14 It leased a portion of the ground floor of the Imperial
Hotel Building from Diaz and Co., Inc.15 NFA/KADIWA also applied for electricity service
with DLPC, and a contract16 was later executed between the parties. On March 15,
1984, DLPC connected the area leased by NFA/KADIWA to its electric grid17 under
Account No. 091-12643,18 and installed Meter No. 8473819 to measure NFA/KADIWA’s
monthly electric consumption.
In August 1986, the Kadiwa Center IV closed, and NFA/KADIWA vacated the Doña
Segunda Building.20 In a letter21 dated August 11, 1986, NFA/KADIWA Provincial
Manager, Roberta R. Melendres, informed DLPC that the light and power connection of
NFA/KADIWA would be left behind; its right to the connection would be transferred to
Diaz.22 She also informed DLPC that the ₱1,020.00 deposit of NFA/KADIWA for the power
connection had been refunded to it by Diaz.23
In a letter24 dated September 2, 1986, Diaz informed respondent Manuel Orig that he
had leased the untenanted portions of the Doña Segunda Building from Diaz and Co.,
Inc., and requested that a new electrical connection for the building in his name be
installed, separate from the one assigned to him by NFA.25
On September 15, 1986, DLPC denied the request on the ground that since Diaz and
Co., Inc. is a closed family corporation whose stockholders are the immediate members
of the Diaz family, the lease in favor of Diaz could be simulated.26 DLPC, however,
reminded Diaz that it would be too happy to grant his request "if he and/or Diaz and
Co., Inc. would pay what is due and owing to it."27
Diaz and Co., Inc. sent a letter28 to DLPC dated September 17, 1986 declaring that it
had assumed the electrical bills of NFA/KADIWA under Account No. 091-12643, and
requested that the monthly bills/statements be sent to it. In its reply, DLPC rejected the
request and declared that it was not aware that Diaz and Co., Inc. had refunded the
NFA/KADIWA its ₱1,020.00 deposit.29
On September 26, 1986, Diaz filed a petition for mandamus30 before the RTC, Davao
City. He alleged that as a holder of a certificate of public convenience, DLPC is
mandated by law to provide him with electric service; the grounds relied upon by
respondent Orig in denying his application are anchored on bias and prejudice, since
he (Diaz) is one of the stockholders of Diaz and Co. Inc., the owner of the Davao
Imperial Hotel; and the civil case filed by DLPC is against Diaz and Co., Inc. and not
personally against him.31 The complaint was docketed as Civil Case No. 18,288.
Meanwhile, on September 23, 1986, the portion of the building formerly leased by
NFA/KADIWA was leased to Matias Mendiola.32 Because he needed more electricity
than what could be provided by the existing electrical wirings, Mendiola opted to
change the electrical installation from a one-phase meter to a three-phase meter
connection.33 Mendiola’s application was approved by DLPC. On December 19, 1986,
DLPC and Mendiola executed a service Contract34 for electricity service.
On January 7, 1987, Diaz filed an application for preliminary injunction in Sp. Civil Case
No. 18,28835 to enjoin DLPC from disconnecting the electric connections to Meter No.
84738 under Account No. 091-12643. Also, an Inter-Office Memo36 dated January 7,
1987, signed by Officer-in-Charge, Rebecca Madrid, was issued to all security guards of
the Doña Segunda Building who were ordered to prevent anyone from disturbing Meter
No. 84738.37 Because of this, DLPC failed to substitute its single-phase meter with a three-
phase meter. DLPC’s linemen thus installed the three-phase meter without removing the
single-phase meter.381a\^/phi1.net
On March 12, 1987, the RTC in Sp. Civil Case No. 18,288, denied the motion for issuance
of a writ of preliminary injunction39 filed by Diaz. He moved for a reconsideration, which
was, however, denied in the Order40 dated August 20, 1987. DLPC then removed its
single-phase meter on November 20, 1987, which rendered almost half of the building
without power.41 That same day, Diaz went to the DLPC building and threw stones at it,
breaking four glass windows in the process.42 He then bought his own electric meter,
Meter No. 86673509,43 had it calibrated by the Board of Energy, and unilaterally
replaced Meter No. 84738. The electricity in the building was then restored.44
On November 24, 1987, Diaz filed a Complaint for Damages with Prayer for Preliminary
Prohibitory and Mandatory Injunction and Restraining Order45 before the RTC, Davao
City, docketed as Civil Case No. 18,855-87. In the said complaint, Diaz claimed that
DLPC arbitrarily and illegally removed Meter No. 84738 in violation of their business
franchise and Article 19 of the New Civil Code, and had threatened to remove Meter
No. 86673509.46
DLPC, for its part, filed a counter-application for preliminary mandatory injunction47 in
the same case to compel the removal of Meter No. 86673509 which Diaz had installed
without DLPC’s consent and authority.48 The RTC issued an Order49 dated March 30, 1988
denying Diaz’s application for prohibitory and mandatory injunction, and granting
DLPC’s counter-application for preliminary mandatory injunction. The RTC ordered Diaz
to immediately remove Meter No. 86673509 and disconnect the electrical wirings he
had unilaterally connected to the upper floor rooms. Diaz filed a motion for
reconsideration but was denied.1a\^/phi1.net On June 13, 1998, the sheriff, with the aid
of DLPC personnel, caused the removal of Meter No. 86673509.50
Aggrieved, Diaz assailed the orders via petition for certiorari before the CA. The petition
was docketed as CA-G.R. SP No. 14909. On October 19, 1988, the CA rendered a
Decision51 granting Diaz’s petition, to wit:
Wherefore, in view of the foregoing, the petition is hereby granted and the orders of the
lower court dated March 30, 1988 and June 1, 1988 are set aside. Private respondents
are thus ordered to maintain the status quo ante which existed before the issuance of
the orders complained against, or else to connect its own electric meter to the
premises, on the understanding, of course, that petitioner pays his electric bills and
without prejudice to the continuance of the collection case against Diaz and
Company.52
DLPC elevated the decision before this Court, via petition for review on certiorari. The
petition was docketed as G.R. No. 85445.53
Meanwhile, on December 19, 1998, the parties in Civil Case No. CEB-104954 executed a
Compromise Agreement,55 wherein they stipulated the following:
1. Plaintiff-appellee hereby reduces its total claims in the complaint to only ₱385,000.00
and further waives any claim in excess of said amount in the same case, and the
defendant-appellant shall pay said amount in full immediately upon the execution of
this agreement. The latter also waives its counterclaims against the former in the above-
entitled case.
2. Upon receipt of the payment of the aforesaid sum, plaintiff-appellee shall
immediately grant and install in favor of defendant-appellant or Antonio G. Diaz electric
service for the Doña Segunda Building, popularly known as Imperial Hotel Building, or for
portions thereof designated by either including the tenants or lessees occupying the
same, upon proper application therefor and the presentation of the requisite electrical
permit.
3. the parties agree to the dismissal of Civil Case No. 18,288 of the Regional Trial Court of
Davao City, pending in Branch XVI thereof, entitled "Diaz vs. Davao Light & Power Co.,
Inc. and Manuel Orig." for Mandamus inclusive of the counter-claim therein, the same
having become moot and academic.
WHEREFORE, it is most respectfully prayed that this Honorable Court approves the
foregoing compromise agreement and render judgment based thereon, and enjoin the
parties to comply strictly with the terms thereof.
The RTC, in Civil Case No. CEB-1049, rendered a Decision56 approving the compromise
on January 5, 1989.
In Sp. Civil Case No. 18,288, the parties also filed a Joint Motion to Dismiss57 based on the
Compromise Agreement, and the RTC thereafter ordered the dismissal of the case.58
On April 17, 1989, this Court in G.R. No. 85445, issued a Resolution,59 denying the petition
for review on certiorari questioning the CA decision in CA-G.R. SP No. 14909 for being
moot and academic. The resolution reads:
After deliberating on the allegations made, the issues raised, and the arguments
advanced in the Petition, the Comment and the Reply, and it appearing that petitioner
is now providing electrical service to private respondent’s entire building, the Court
RESOLVED to DENY the petition for having become moot and academic. The Court
makes the admonition, however, that connections of electrical service and installations
of electric meters should always be upon mutual contract of the parties, and that
payments for electrical consumption should also be made promptly whenever due.
Contracts lay down the law between the parties and obligations arising therefrom
should be complied with.
Meanwhile, on June 30, 1997, the RTC rendered a Decision60 in Civil Case No. 18,855-87
dismissing the case filed by Diaz.61
Diaz appealed the decision with the CA in CA-G.R. CV No. 63236,62 which appeal is still
pending before the appellate court.
Based on the aforestated facts, on July 11, 1988, DLPC filed a complaint for theft of
electricity against Diaz with the City Prosecutor’s Office, Davao City; respondent
Braganza submitted an Affidavit63 to support the charge. In defense, Diaz alleged the
following: (1) that the complaint was intended to harass him; (2) he was entitled to
electric service by virtue of his subrogation to the right of NFA/KADIWA; (3) the
installation of Meter No. 86673509 was made with the knowledge and consent of DLPC;
(4) there is a pending case between the parties regarding Meter Nos. 84738 and
86673509; and (5) the filing of the action is premature. The complaint was docketed as
I.S. No. 593.
On March 21, 1989, Lolito O. Evangelino, 4th Asst. City Prosecutor, City Prosecutor’s
Office of Davao City, issued a Resolution64 recommending the dismissal of the charge.
He opined that the correspondence to DLPC Manager Orig negated DLPC’s claim of
lack of consent and knowledge, and since the issue is still pending litigation in court, the
determination of whether there is theft of electricity is premature (Sp. Civil Case No.
18288 and Civil Case No. 18,855-87).
DLPC filed a Motion for Reconsideration65 which the City Prosecutor denied on the
ground that DLPC failed to establish the elements of unlawful taking and intent to gain.
DLPC appealed the dismissal to the Secretary of Justice,66 who, however, dismissed the
appeal in a letter67 dated August 2, 1990. The Motion for Reconsideration68 filed by DLPC
was likewise denied in the letter69 dated September 6, 1990.
Undaunted, DLPC filed a criminal complaint70 against Diaz for Violation of P.D. 401,71 as
amended by B.P. Blg. 87672 with the City Prosecutor’s Office, Davao City.73 The
complaint was docketed as I.S. No. 92-4590. In his counter-affidavit dated September
19, 1992, Diaz alleged that a similar complaint (I.S. No. 593) had been filed by DLPC
against him.74 In a Resolution75 dated October 23, 1992, Calixto A. Esparagoza, 2nd Asst.
City Prosecutor, dismissed the case. The Public Prosecutor likewise denied the motion for
reconsideration of DLPC on November 26, 1992.
Meanwhile Diaz, Ramos, and Arguellas, as complainants, filed a criminal complaint with
the Office of the Provincial Fiscal of Davao del Norte charging the officers of DLPC with
estafa through falsification of public documents. They also alleged that the officers of
DLPC exacted additional and illegal profits from its consumers by devising a deceptive
Varying Discount Formula; based on the alleged misrepresentation of said officers, the
Board of Energy (BOE) granted DLPC provisional authority to apply the formula, thereby
resulting in losses of more or less ₱300,000.00 to Diaz, Ramos, and Arguelles.76 As regards
the charge of falsification, the complainants alleged that DLPC had its properties
appraised by the Technical Management Services, Philippines, Inc. (TAMSPHIL), and
included non-existent properties that did not belong to it; it also recorded the TAMSPHIL
appraisal in its books of account even before it had been approved by the BOE; and
submitted financial statements containing the appraisal to the Securities and Exchange
Commission and the BOE.77
The Investigating Prosecutor found probable cause against the respondents. An
Information was filed before the then Court of First Instance (CFI) of Tagum, Davao del
Norte, docketed as Crim. Case No. 5800. Respondents appealed the resolution of the
public prosecutor finding probable cause against them. The appeal was granted. On
motion of the Prosecutor, the RTC dismissed the case in an Order dated July 13, 1983.78
On August 9, 1983, the officers of DLPC, Eduardo J. Aboitiz, Luis Aboitiz, Jr., Roberto E.
Aboitiz, Jon R. Aboitiz, and Edson H. Canova, as plaintiffs, filed a Complaint against Diaz,
Isagani T. Fuentes (Provincial Fiscal of Davao del Norte), Petronilo D. Ramos (Municipal
Mayor of Carmen, Davao del Norte), Gabriel Arguelles (Municipal Attorney of Panabo,
Davao del Norte) before the RTC, Cebu City, for damages and attorney’s fees against
the defendants for malicious prosecution.79
The case was docketed as CEB Case No. 1055. After trial on the merits, the RTC
rendered a Decision80 on April 30, 1992, dismissing the complaint. The fallo of the
decision reads:
WHEREFORE, premises considered, plaintiffs’ complaint and defendants’ counterclaim
are hereby DISMISSED for lack of cause of action with costs de oficio.
SO ORDERED.81
Both parties appealed the decision before the CA, docketed as CA-G.R. CV No.
41399.1ªvvphi1.nét
Diaz, et al. relied on the following grounds:
I
TRIAL COURT ERRED IN IGNORING PLAINTIFF-APPELLANT’S (SIC) EVIDENCE OF
CONSPIRACY AMONG ALL DEFENDANT-APPELLANTS (SIC) AND IN MAKING NO FINDING
THAT THERE WAS A CONSPIRACY TO PROSECUTE PLAINTIFF-APPELLANTS (SIC) CRIMINALLY
FOR USE AS LEVERAGE IN ORDER TO OBTAIN CONCESSIONS FROM DAVAO LIGHT &
POWER CO.
II
TRIAL COURT ERRED IN HOLDING THAT PLAINTIFF-APPELLANTS (SIC) HAVE NO CAUSE OF
ACTION BY COMMITTING THE FOLLOWING ERRORS:
(a) IN FINDING THAT THERE WAS NO PROSECUTION AND NO ACQUITTAL;
(b) IN FINDING THAT THERE WAS PROBABLE CAUSE FOR DEFENDANT-APPELLANT’S (SIC)
CHARGE OF ESTAFA THROUGH FALSIFICATION;
(c) BY IGNORING THE FACT THAT THERE WAS NO EVIDENCE LINKING PLAINTIFF-
APPELLANTS (SIC) TO THE CRIME CHARGED;
(d) BY IGNORING THE CIRCUMSTANCES THAT MANY ALLEGATIONS IN THE JOINT AFFIDAVIT
OF DEFENDANT-APPELLANTS (SIC) ARE INADMISSIBLE;
(e) BY IGNORING THE FACT THAT DAVAO LIGHT’S USE OF THE VARYING DISCOUNT
FORMULA WAS ADMITTEDLY PROVISIONALLY AUTHORIZED BY THE BOE WHICH AUTHORITY
WAS IN FORCE DURING THE FILING AND PENDENCY OF THE CHARGE;
(f) BY IGNORING THE FACT THAT THE VARYING DISCOUNT FORMULA WAS A FORMULA TO
DETERMINE THE AMOUNT OF DISCOUNT DEDUCTIBLE FROM THE RATES EARLIER FIXED BY
THE BOE RESULTING FROM THE COST SAVINGS REALIZABLE FROM THE CHEAPER COST OF
ELECTRIC POWER SOLD BY NPC TO DAVAO LIGHT, AND ITS NEGATIVE ASPECT WAS
MERELY AN INCORPORATION INTO SAID FORMULA OF THE FUEL CLAUSE ADJUSTMENT
ALREADY AUTHORIZED IN THE DECISION OF SAID BOARD IN CASE NO. 73-146;
(g) BY BEING OBLIVIOUS OF THE CIRCUMSTANCE THAT THERE WAS NO FRAUD OR DECEIT
IN SECURING SAID PROVISIONAL AUTHORITY, AND THE BOARD MADE NO SUCH FINDING;
(h) BY IGNORING THE UNREBUTTED EVIDENCE THAT APPELLANT FUENTES DISOBEYED THE
DIRECTIVE OF HIS SUPERIOR, THE CHIEF STATE PROSECUTOR TO HOLD IN ABEYANCE
FURTHER PROCEEDINGS IN I.S. NO. 82-115, AND THAT HE FILED AN INFORMATION
CHARGING PLAINTIFF-APPELLANTS (SIC) WITH AN OFFENSE DIFFERENT FROM THAT SUBJECT
OF HIS PRELIMINARY INVESTIGATION;
(i) IN FINDING THAT DEFENDANT-APPELLANTS (SIC) DID NOT ACT WITH MALICE AND HAD
ACTED IN GOOD FAITH IN FILING SAID CHARGE.
III
TRIAL COURT ERRED IN NOT AWARDING DAMAGES TO PLAINTIFF-APPELLANTS (SIC).82
For their part, DLPC, et al. alleged the following:
I After trial, the RTC in Civil Case No. CEB-11843 rendered a Decision91 in favor of DLPC
THAT THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANTS APPELLANTS’
COUNTERCLAIMS HAVE NO CAUSE OF ACTION.
II
THAT THE TRIAL COURT ERRED IN NOT AWARDING DAMAGES AND ATTORNEY’S FEES.83
On October 30, 2001, the CA rendered a Decision84 affirming the decision of the RTC.
Diaz, et al. appealed the decision before this Court, docketed as G.R. No. 154378. On
November 13, 2002, this Court resolved to dismiss the petition for lack of merit.85 On April
15, 2003, as per Entry of Judgment,86 the resolution of this Court became final and
executory.
On June 10, 1992, DLPC instituted a civil action for Damages,87 before the RTC, Cebu
City, against Diaz for defamatory and libelous remarks and for abuse of rights. The
plaintiff alleged that Diaz, motivated by malice and ill-will, had taken it upon himself to
find fault in DLPC’s acts and oppose all its application with the BOE, using the media to
assault its good name by circulating or publishing libelous and false statements in the
newspapers. The case was docketed as Civil Case No. CEB-11843.
DLPC further alleged that Diaz published and disseminated a handbill claiming that
there was something irregular and anomalous regarding the Energy Regulation Board’s
approval of the appraisal of the properties and equipment of DLPC, because of which
the customers of DLPC could expect a ₱5.00 per kilowatt charge in the future. Diaz
allegedly gave identical interviews with the Mindanao Daily Mirror and the Ang
Peryodiko Dabaw reiterating what he said in the handbill.88 In addition, Diaz, in an
interview with the People’s Daily Forum, claimed that the National Power Corporation
sold two (2) generating sets to DLPC for only ₱1.00 each.89
Consequently, DLPC suffered besmirched reputation and public humiliation, and
damage to its business standing. The complaint contained the following prayer:
1) Immediately issue a temporary restraining order ex-parte precluding defendant from
committing further acts of tort or libel against plaintiff, and after the hearing of plaintiff’s
application for preliminary injunction, issue such writ after posting of the required
injunction bond;
2) After trial, render judgment in favor of plaintiff and against defendant Antonio Diaz
making the injunction permanent, and ordering the latter to pay the former –
a) The sum of ₱10,000,000.00 as moral damages anddamages to its business standing;
b) The sum of ₱300,000.00 as exemplary damages;
c) The sum of ₱500,000.00 as attorney’s fees and expenses of litigation;
d) The cost of suit.90
and against Diaz, awarding more than ₱1,500,000.00 in damages to DLPC and
dismissing the counterclaim of Diaz. The decretal portion reads:
WHEREFORE, premises above set-forth, the Court hereby renders judgment in favor of
plaintiff Davao Light & Power Co., Inc. and against defendant Antonio Diaz ordering
said defendant:
1. To pay plaintiff the amount of ₱1,500,000.00 by way of moral damages for
besmirched reputation, loss of business standing and goodwill;
2. To pay plaintiff the amount of ₱300,000.00 in exemplary damages by way of example
or correction for the public good; and
3. To pay plaintiff the amount of ₱500,000.00 in attorney’s fees and litigation expenses
and to pay the costs.
Defendant takes nothing from his counterclaim.
SO ORDERED.92
Both parties appealed the decision to the CA in CA-G.R. CV No. 65082, which appeal is
still pending.
On October 30, 1992, Diaz, as plaintiff, filed a complaint for Damages, Injunction with
Writ of Preliminary Injunction and Temporary Restraining Order, Plus Attorney’s Fee 93
against DLPC before the RTC, Davao City; the case was docketed as Civil Case No.
21,655-92. Diaz alleged that DLPC’s filing of criminal cases, I. S. No. 593 for theft of
electricity and I.S. No. 92-4590 for violation of P.D. 401, as amended by B.P. Blg. 876),
were intended to harass and humiliate him before the public and government
authorities and ruin his image;94 he was seriously prejudiced by the filing of an ₱11.6
Million damage suit in Civil Case No. CEB-1055 and a ₱10.8 Million damage suit in Civil
Case No. CEB-11843;95 defendants, by their common and joint acts, were motivated by
evident bad faith and intentionally caused injustice to his person in violation of Article 19
of the New Civil Code.96 Diaz thus prayed:
WHEREFORE, and in view of the foregoing, it is most respectfully prayed of the
Honorable Court:
a) Before notice and hearing to issue a temporary restraining order enjoining
defendants from committing any unlawful, illegal, tortiuous (sic) and inequitable act
which may affect the individual rights of plaintiff, and after hearing to issue writ of
preliminary injunction for the same purpose upon posting of the bond;
b) After trial on the merits, to make the writ of injunction as permanent;
c) To order defendants to pay plaintiff, jointly and severally, moral damages in the
amount of ₱10,000,000.00, attorney’s fee in the amount of ₱500,000.00, litigation
expenses in the amount of ₱100,000.00 and exemplary damage in the amount of
₱100,000.00; and,
d) To grant to plaintiff such other relief proper and equitable under the premises.97
On November 4, 1992, the RTC issued a TRO98 in favor of Diaz, directing DLPC or any
person acting for and in its behalf, to desist and refrain from committing any unlawful,
tortuous and inequitable conduct which may affect the former for a period of twenty
(20) days.
During the pre-trial, the parties limited the issue to "whether or not the plaintiff is entitled
to damages by virtue of the filing of the criminal cases against him for theft of electricity
and violation of P.D. 401, both of which were already dismissed." Due to the pendency
of various actions before several courts, the trial court opted to segregate the issues. It
focused only on the alleged malicious prosecution with regard to the filing of the
criminal action for theft, I. S. No. 593, and for Violation of P.D. 401, as amended by B.P.
Blg. 876, I.S. No. 92-4590. The RTC reasoned in this wise:
The records show that plaintiff’s first cause of action, which is damages for defendant’s
refusal to grant him electric service, has become moot and academic by virtue of the
compromise agreement executed by the plaintiff and the defendant in the mandamus
case docketed as Civil Case No. 18288 of this Court. The parties filed a Joint Motion to
Dismiss based on the Compromise Agreement which was granted by this Court and
which led to the eventual dismissal of the case with prejudice.
In summary, plaintiff asks for damages for defendant’s alleged malicious prosecution of
a criminal case of theft of electricity against him, for plaintiff’s filing of a charge of
violation of P.D. 401 as amended after dismissal of the theft case, the filing of a damage
suit against him before the RTC of Cebu City which was dismissed and the filing of
another damage suit before the same Cebu RTC which is still pending. Damages are
also being sought for defendant’s removal of Electric Meter No. 847328 (sic). But this is a
subject matter of a case pending before Branch 13 of this Court and therefore said
court retains jurisdiction over the said cause of action. x x x99
On May 22, 2000, the RTC rendered a Decision100 dismissing the complaint. The fallo
reads:
In view of all the foregoing, finding no merit in plaintiff’s complaint, judgment is hereby
rendered dismissing said complaint with costs de oficio.
SO ORDERED.101
The RTC held that while the City Prosecutor, and later the Secretary of Justice,
concluded that there was no probable cause for the crime of theft, this did not change
the fact that plaintiff made an illegal connection for electricity.102 A person’s right to
litigate should not be penalized by holding him liable for damages.
Diaz appealed the decision to the CA, alleging that:
I ― THE TRIAL COURT ERRED IN HOLDING THAT “WHEN THE DEFENDANTS FILED THE CASES
OF THEFT, THEY DID SO IN HONEST BELIEF THAT PLAINTIFF IS CRIMINALLY LIABLE”.
II ― THE TRIAL COURT ERRED IN DISMISSING THE CASE AT BAR AND WITHOUT GRANTING
THE AWARD OF DAMAGES.103
On October 1, 2003, the CA affirmed the decision of the RTC.104 It concluded that the
evidence on hand showed good faith on the part of DLPC in filing the subject
complaints. It pointed out that Diaz had been using the electrical services of DLPC
without its consent. As to the effect of the compromise agreement, the CA ruled that it
did not bar the filing of the criminal action. Thus, under the principle of damnum absque
injuria, the legitimate exercise of a person’s right, even if it causes loss to another, does
not automatically result in an actionable injury.105
Diaz, now petitioner, comes before this Court in this petition for review on certiorari,
raising the following errors:
a) "Proof of moral suffering must be introduced, otherwise the award of moral damage
is not proper. In this case, the evidence presented by the appellant is insufficient to
overcome the presumption of good faith." (Decision, p. 10)
b) "In view of the foregoing, it is clear that the subject complaints were filed so as to
protect appellee DLPC’s interest. In this regard, it must be borne in mind that no person
should be penalized for the exercise of the right to litigate." (Decision, p. 12)106
The issues raised in the present action can be summarized as follows: (1) whether or not
the compromise agreement entered into between DLPC and Diaz barred the former
from instituting further actions involving electric Meter No. 84736 or 86673509; (2)
whether or not DLPC acted in bad faith in instituting the criminal cases against Diaz; and
(3) whether or not Diaz is entitled to damages.
The petition is without merit.
Petitioner insists that the compromise agreement as well as the decision of the CA in
CA-G.R. SP No. 14909 already settled the controversies between them; yet, DLPC
instituted the theft case against Diaz, and worse, instituted another action for violation
of P.D. 401, as amended by B.P. Blg. 876. Thus, the only conclusion that can be inferred
from the acts of DLPC is that they were designed to harass, embarrass, prejudice, and
ruin him. He further avers that the compromise agreement in Civil Case No. CEB-1049
completely erased litigious matters that could necessarily arise out of either Electric
Meter No. 84736 or 86673509.107 Moreover, Diaz asserts that the evidence he presented
is sufficient to prove the damages he suffered by reason of the malicious institution of
the criminal cases.
We do not agree.
Article 2028 of the Civil Code defines a compromise as a contract whereby the parties,
by making reciprocal concessions, avoid litigation or put an end to one already
commenced. The purpose of compromise is to settle the claims of the parties and bar
all future disputes and controversies. However, criminal liability is not affected by
compromise for it is a public offense which must be prosecuted and punished by the
Government on its own motion, though complete reparation should have been made
of the damages suffered by the offended party. A criminal case is committed against
the People, and the offended party may not waive or extinguish the criminal liability
that the law imposes for the commission of the offense.108 Moreover, a compromise is
not one of the grounds prescribed by the Revised Penal Code for the extinction of
criminal liability.109
As can be inferred from the compromise agreement, Diaz and DLPC merely agreed to
(1) reduce the latter’s total claims to only ₱385,000.00; (2) for DLPC to waive its
counterclaims against Diaz; and (3) upon receipt of the amount, for DLPC to
immediately install the necessary electric service to the building. The parties likewise
agreed to the dismissal of Sp. Civil Case No. 18,288 for being moot and academic.
Nowhere in said agreement did the parties agree that DLPC was barred from instituting
any further action involving electric Meter No. 84736 or 86673509.
We find that petitioner is not entitled to damages under Articles 19,110 20[111 and 21,112
and Articles 2217113 and 2219(8)114 of the New Civil Code.
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.115 Thus, malice or bad faith is at the core of the above provisions.116
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.117 Good faith is presumed
and he who alleges bad faith has the duty to prove the same.118 Bad faith, on the other
hand, does not simply connote bad judgment to simple negligence, dishonest purpose
or some moral obloquy and conscious doing of a wrong, a breach of known duty due
to some motives or interest or ill-will that partakes of the nature of fraud. Malice
connotes ill-will or spite and speaks not in response to duty. It implies an intention to do
ulterior and unjustifiable harm. Malice is bad faith or bad motive. 119
The evidence presented by respondents negates malice or bad faith. Petitioner himself
alleged in his complaint that he unilaterally installed Meter No. 86673509 to replace
Meter No. 84738 after it was removed by DLPC. No less than this Court, in G.R. No. 85445,
admonished petitioner and reminded him that connections of electrical service and
installations of electric meters should always be upon mutual contract of the parties,
and that payments for electrical consumption should also be made promptly whenever
due.120 Based on these established facts, petitioner has not shown that the acts of
respondent were done with the sole intent of prejudicing and injuring him.
Petitioner may have suffered damages as a result of the filing of the complaints.
However, there is a material distinction between damages and injury. Injury is the illegal
invasion of a legal right; damage is the loss, hurt or harm which results from the injury;
and damages are the recompense or compensation awarded for the damage
suffered. Thus, there can be damage without injury in those instances in which the loss or
harm was not the result of a violation of a legal duty. In such cases, the consequences
must be borne by the injured person alone; the law affords no remedy for damages
resulting from an act which does not amount to a legal injury or wrong. These situations
are often called damnum absque injuria.121 Whatever damages Diaz may have suffered
would have to be borne by him alone since it was his acts which led to the filing of the
complaints against him.
On the other hand, malicious prosecution has been defined as an action for damages
brought by or against whom a criminal prosecution, civil suit or other legal proceeding
has been instituted maliciously and without probable cause, after the termination of
such prosecution, suit, or other proceeding in favor of the defendant therein.122 It is an
established rule that in order for malicious prosecution to prosper, the following requisites
must be proven by petitioner: (1) the fact of prosecution and the further fact that the
defendant (respondent) was himself the prosecutor, and that the action finally
terminated with an acquittal; (2) that in bringing the action, the prosecutor acted
without probable cause; and (3) that the prosecutor was actuated or impelled by legal
malice, that is, by improper or sinister motive.123 The foregoing are necessary to preserve
a person’s right to litigate which may be emasculated by the undue filing of malicious
prosecution cases.124 From the foregoing requirements, it can be inferred that malice
and want of probable cause must both be clearly established to justify an award of
damages based on malicious prosecution.125
The Court notes that respondents initiated two separate criminal actions, one for theft of
electricity, Inv. Sheet No. 593 July/1988, and the other, for Violation of P.D. 401, as
amended by B.P. Blg. 876, I.S. No. 92-4590. It must be stressed that theft of electricity is a
felony defined and penalized under the Revised Penal Code, while Violation of P.D. 401,
as amended by B.P. Blg. 876, is an offense punished by a special law. What generally
makes the former a felony is criminal intent (dolo) or negligence (culpa); what makes
the latter a crime is the special law enacting it.126 In addition, the elements of the two (2)
offenses are different from one another. In theft, the elements are: (1) intent to gain; (2)
unlawful taking; (3) personal property belonging to another; (4) and absence of
violence or intimidation against persons or force upon things.127 On the other hand, the
crime of Violation of P.D. 401, as amended by B.P. Blg. 876, is mala prohibita. The
criminal act is not inherently immoral but becomes punishable only because the law
says it is forbidden. With these crimes, the sole issue is whether the law has been
violated. Criminal intent is not necessary.128
While the institution of separate criminal actions under the provisions of P.D. 401, as
amended by B.P. Blg. 876, and under the provisions of the Revised Penal Code on theft
may refer to identical acts committed by petitioner, the prosecution thereof cannot be
limited to one offense because a single criminal act may give rise to a multiplicity of
offenses; and where there is variance or difference between the elements of an offense
in one law and another law, as in the case at bar, there will be no double jeopardy
because what the rule on double jeopardy prohibits refers to identity of elements in the
two (2) offenses. Otherwise stated, prosecution for the same act is not prohibited; what
is forbidden is prosecution for the same offense.129 Hence, no fault could be attributed
to respondent DLPC when it instituted the two separate actions.
As earlier stated, a claim for damages based on malicious prosecution will prosper only
if the three elements aforecited are shown to exist. We find that none of the requisites
are attendant here.
First. Although respondent DLPC initiated before the prosecutor’s office Inv. Sheet No.
593 July/1988 for theft of electricity, and I.S. No. 92-4590 for Violation of P.D. 401, as
amended by B.P. Blg. 876, no information was ever filed in court. The cases were
eventually dropped or dismissed before they could be filed in court. Ultimately, both
actions could not end in an acquittal.
Second. It cannot be concluded that respondent DLPC acted without probable cause
when it instituted the actions. The events which led to the filing of the complaints are
undisputed, and respondent DLPC cannot be faulted for filing them. In the early case of
Buchanan v. Esteban,130 this Court had already stressed that "one cannot be held liable
in damages for maliciously instituting a prosecution where he acted with probable
cause." As Justice Moreland explained in that case:
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. The general rule is well settled that one cannot be held liable in damages
for maliciously instituting a prosecution where he acted with probable cause. In other
words, a suit will lie only in cases where a legal prosecution has been carried on without
probable cause. And the reason for the rule as stated by Blackstone, is that it would be
a very great discouragement to public justice if prosecutors, who had a tolerable
ground of suspicion, were liable to be sued at law when their indictments miscarried.

Thus, the element of malice and the absence of probable cause must be proved.131
There must be proof that the prosecution was prompted by a sinister design to vex and
humiliate a person, and that it was initiated deliberately knowing that the charge was
false and baseless to entitle the victims to damages.132 The two elements must
simultaneously exist; otherwise, the presence of probable cause signifies, as a legal
consequence, the absence of malice.133 In the instant case, it is evident that
respondent DLPC was not motivated by malicious intent or by a sinister design to unduly
harass petitioner, but only by a well-founded anxiety to protect its rights. Respondent
DLPC cannot therefore be faulted in availing of the remedies provided for by law.

In a free society, controversies are heard and settled under the rule of law in the forum
of the courts of justice. It is one of the virtues of our system of government that a person
who feels aggrieved does not have to take the law into his or her hands or resort to the
use of force for the vindication of injury. The courts are there to hear and act on the
complaint. The right to litigate is an escape valve to relieve the pressures of personal
disagreements that might otherwise explode in physical confrontation. It is necessary
not only for upholding one’s claims when they are unjustly denied but also for the
maintenance of peace, if not goodwill, among incipient antagonists. Without the right
to litigate, conflicting claims cannot be examined and resolved in accordance with
one of the primary purposes of government, which is to provide for a just and orderly
society.134 Hence, the mere act of submitting a case to the authorities for prosecution
does not render a person liable for malicious prosecution should he or she be
unsuccessful, for the law could not have meant to impose a penalty on the right to
litigate.135

IN LIGHT OF THE FOREGOING, the petition is DENIED. The Decision of the Court of
Appeals in CA-G.R. CV No. 68709 is AFFIRMED.
[Public Humiliation]
G.R. No. 151866 September 9, 2004
SOLEDAD CARPIO, petitioner,
vs.
LEONORA A. VALMONTE, respondent.
DECISION
TINGA, J.:
Assailed in the instant petition for review is the Decision of the Court of Appeals in C.A.-
G.R. CV No. 69537,1promulgated on 17 January 2002.2 The appellate court reversed the
trial court’s decision denying respondent’s claim for damages against petitioner and
ordered the latter to pay moral damages to the former in the amount ofP100,000.00.
Respondent Leonora Valmonte is a wedding coordinator. Michelle del Rosario and Jon
Sierra engaged her services for their church wedding on 10 October 1996. At about 4:30
p.m. on that day, Valmonte went to the Manila Hotel where the bride and her family
were billeted. When she arrived at Suite 326-A, several persons were already there
including the bride, the bride’s parents and relatives, the make-up artist and his
assistant, the official photographers, and the fashion designer. Among those present
was petitioner Soledad Carpio, an aunt of the bride who was preparing to dress up for
the occasion.
After reporting to the bride, Valmonte went out of the suite carrying the items needed
for the wedding rites and the gifts from the principal sponsors. She proceeded to the
Maynila Restaurant where the reception was to be held. She paid the suppliers, gave
the meal allowance to the band, and went back to the suite. Upon entering the suite,
Valmonte noticed the people staring at her. It was at this juncture that petitioner
allegedly uttered the following words to Valmonte: "Ikaw lang ang lumabas ng kwarto,
nasaan ang dala mong bag? Saan ka pumunta? Ikaw lang and lumabas ng kwarto,
ikaw ang kumuha." Petitioner then ordered one of the ladies to search Valmonte’s
bag. It turned out that after Valmonte left the room to attend to her duties, petitioner
discovered that the pieces of jewelry which she placed inside the comfort room in a
paper bag were lost. The jewelry pieces consist of two (2) diamond rings, one (1) set of
diamond earrings, bracelet and necklace with a total value of about one million pesos.
The hotel security was called in to help in the search. The bags and personal belongings
of all the people inside the room were searched. Valmonte was allegedly bodily
searched, interrogated and trailed by a security guard throughout the evening. Later,
police officers arrived and interviewed all persons who had access to the suite and
fingerprinted them including Valmonte. During all the time Valmonte was being
interrogated by the police officers, petitioner kept on saying the words "Siya lang ang
lumabas ng kwarto." Valmonte’s car which was parked at the hotel premises was also
searched but the search yielded nothing.
A few days after the incident, petitioner received a letter from Valmonte demanding a
formal letter of apology which she wanted to be circulated to the newlyweds’ relatives
and guests to redeem her smeared reputation as a result of petitioner’s imputations
against her. Petitioner did not respond to the letter. Thus, on 20 February 1997, Valmonte
filed a suit for damages against her before the Regional Trial Court (RTC) of Pasig City,
Branch 268. In her complaint, Valmonte prayed that petitioner be ordered to pay
actual, moral and exemplary damages, as well as attorney’s fees.
Responding to the complaint, petitioner denied having uttered words or done any act
to confront or single out Valmonte during the investigation and claimed that everything
that transpired after the theft incident was purely a police matter in which she had no
participation. Petitioner prayed for the dismissal of the complaint and for the court to
adjudge Valmonte liable on her counterclaim.
The trial court rendered its Decision on 21 August 2000, dismissing Valmonte’s complaint
for damages. It ruled that when petitioner sought investigation for the loss of her jewelry,
she was merely exercising her right and if damage results from a person exercising his
legal right, it is damnum absque injuria. It added that no proof was presented by
Valmonte to show that petitioner acted maliciously and in bad faith in pointing to her as
the culprit. The court said that Valmonte failed to show that she suffered serious anxiety,
moral shock, social humiliation, or that her reputation was besmirched due to
petitioner’s wrongful act.
Respondent appealed to the Court of Appeals alleging that the trial court erred in
finding that petitioner did not slander her good name and reputation and in
disregarding the evidence she presented.
The Court of Appeals ruled differently. It opined that Valmonte has clearly established
that she was singled out by petitioner as the one responsible for the loss of her jewelry. It
cited the testimony of Serena Manding, corroborating Valmonte’s claim that petitioner
confronted her and uttered words to the effect that she was the only one who went out
of the room and that she was the one who took the jewelry. The appellate court held
that Valmonte’s claim for damages is not predicated on the fact that she was
subjected to body search and interrogation by the police but rather petitioner’s act of
publicly accusing her of taking the missing jewelry. It categorized petitioner’s utterance
defamatory considering that it imputed upon Valmonte the crime of theft. The court
concluded that petitioner’s verbal assault upon Valmonte was done with malice and in
bad faith since it was made in the presence of many people without any solid proof
except petitioner’s suspicion. Such unfounded accusation entitles Valmonte to an
award of moral damages in the amount of P100,000.00 for she was publicly humiliated,
deeply insulted, and embarrassed. However, the court found no sufficient evidence to
justify the award of actual damages.
Hence, this petition.
Petitioner contends that the appellate court’s conclusion that she publicly humiliated
respondent does not conform to the evidence presented. She adds that even on the
assumption that she uttered the words complained of, it was not shown that she did so
with malice and in bad faith.
In essence, petitioner would want this Court to review the factual conclusions reached
by the appellate court. The cardinal rule adhered to in this jurisdiction is that a petition
for review must raise only questions of law,3 and judicial review under Rule 45 does not
extend to an evaluation of the sufficiency of evidence unless there is a showing that the
findings complained of are totally devoid of support in the record or that they are so
glaringly erroneous as to constitute serious abuse of discretion.4 This Court, while not a
trier of facts, may review the evidence in order to arrive at the correct factual
conclusion based on the record especially so when the findings of fact of the Court of
Appeals are at variance with those of the trial court, or when the inference drawn by A Yes.
the Court of Appeals from the facts is manifestly mistaken.5
Q What did the defendant Mrs. Carpio tell the plaintiff, Mrs. Valmonte?
Contrary to the trial court’s finding, we find sufficient evidence on record tending to
prove that petitioner’s imputations against respondent was made with malice and in A "Ikaw yung nakita ko sa C.R. nawawala yung alahas ko."
bad faith.
Q When the defendant Mrs. Carpio said that to plaintiff Mrs. Valmonte were there other
Petitioner’s testimony was shorn of substance and consists mainly of denials. She people inside the room?
claimed not to have uttered the words imputing the crime of theft to respondent or to
have mentioned the latter’s name to the authorities as the one responsible for the loss of
A Yes, sir.
her jewelry. Well-settled is the rule that denials, if unsubstantiated by clear and
convincing evidence, are negative and self-serving which merit no weight in law and
cannot be given greater evidentiary value over the testimony of credible witnesses who Q Were they able to hear what Mrs. Carpio said to Mrs. Valmonte?
testify on affirmative matters.6
A Yes, sir.
Respondent, however, has successfully refuted petitioner’s testimony. Quite credibly,
she has narrated in great detail her distressing experience on that fateful day. She Q What was your thinking at that time that Mrs. Carpio said that to Mrs. Valmonte?
testified as to how rudely she was treated by petitioner right after she returned to the
room. Petitioner immediately confronted her and uttered the words "Ikaw lang ang A "Nakakahiya kasi akala ng iba doon na talagang magnanakaw siya. Kasi marami na
lumabas ng kwarto. Nasaan ang dala mong bag? Saan ka pumunta? Ikaw ang kaming nandodoon, dumating na yung couturier pati yung video man and we sir.
kumuha." Thereafter, her body was searched including her bag and her car. Worse,
during the reception, she was once more asked by the hotel security to go to the ladies Q Who was the person you [were] alleging "na nakakahiya" whose (sic) being accused
room and she was again bodily searched.7 or being somebody who stole those item of jewelry?

Sereña Manding, a make-up artist, corroborated respondent’s testimony. She testified A "Nakakahiya para kay Leo kasi pinagbibintangan siya. Sa dami namin doon siya yung
that petitioner confronted respondent in the presence of all the people inside the suite napagbintangan."
accusing her of being the only one who went out of the comfort room before the loss of
the jewelry. Manding added that respondent was embarrassed because everybody
Q And who is Leo, what is her full name?
else in the room thought she was a thief.8 If only to debunk petitioner’s assertion that she
did not utter the accusatory remarks in question publicly and with malice, Manding’s
testimony on the point deserves to be reproduced. Thus, A Leo Valmonte.

Q After that what did she do? Q Did the defendant tell this matter to other people inside the room?

A Then Leo came out from the other room she said, she is (sic) the one I only saw from A Yes, the mother of the bride.
the comfort room.
Q And who else did she talk to?
Q Now, what exact word (sic) were said by Mrs. Carpio on that matter?
A The father of the bride also.
A She said "siya lang yung nakita kong galing sa C.R."
Q And what did the defendant tell the mother regarding this matter?
Q And who was Mrs. Carpio or the defendant referring to?
A "Nawawala yung alahas ko." Sabi naman nung mother baka naman hindi mo dala
A Leo Valmonte. tignan mo munang mabuti.

Q Did she say anything else, the defendant? Q Who was that other person that she talked to?

A Her jewelry were lost and Leo was the only one she saw in the C.R. After that she get
(sic) the paper bag then the jewelry were already gone.
Q Did she confront the plaintiff Mrs. Valmonte regarding that fact?
A Father of the bride.9
Significantly, petitioner’s counsel elected not to pursue her cross-examination of the
witness on this point following her terse and firm declaration that she remembered
petitioner’s exact defamatory words in answer to the counsel’s question.10
Jaime Papio, Security Supervisor at Manila Hotel, likewise contradicted petitioner’s
allegation that she did not suspect or mention the name of respondent as her suspect in
the loss of the jewelry.11
To warrant recovery of damages, there must be both a right of action, for a wrong
inflicted by the defendant, and the damage resulting therefrom to the plaintiff. Wrong
without damage, or damage without wrong, does not constitute a cause of action.12
In the sphere of our law on human relations, the victim of a wrongful act or omission,
whether done willfully or negligently, is not left without any remedy or recourse to obtain
relief for the damage or injury he sustained. Incorporated into our civil law are not only
principles of equity but also universal moral precepts which are designed to indicate
certain norms that spring from the fountain of good conscience and which are meant
to serve as guides for human conduct.13 First of these fundamental precepts is the
principle commonly known as "abuse of rights" under Article 19 of the Civil Code. It
provides that "Every person must, in the exercise of his rights and in the performance of
his duties, act with justice, give everyone his due and observe honesty and good
faith." To find the existence of an abuse of right, the following elements must be present:
(1) there is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent
or prejudicing or injuring another.14 When a right is exercised in a manner which discards
these norms resulting in damage to another, a legal wrong is committed for which the
actor can be held accountable.15 One is not allowed to exercise his right in a manner
which would cause unnecessary prejudice to another or if he would thereby offend
morals or good customs. Thus, a person should be protected only when he acts in the
legitimate exercise of his right, that is when he acts with prudence and good faith; but
not when he acts with negligence or abuse.16
Complementing the principle of abuse of rights are the provisions of Articles 20 and 21
of the Civil Code which read, thus:
Art. 20. Every person who, contrary to law, willfully or negligently causes damage to
another, shall indemnify the latter for the same.
Art. 21. Any person who willfully causes loss or injury to another in a manner that is
contrary to morals or good customs or public policy shall compensate the latter for the
damage.
The foregoing rules provide the legal bedrock for the award of damages to a party who
suffers damage whenever one commits an act in violation of some legal provision, or an
act which though not constituting a transgression of positive law, nevertheless violates
certain rudimentary rights of the party aggrieved.
In the case at bar, petitioner’s verbal reproach against respondent was certainly
uncalled for considering that by her own account nobody knew that she brought such
kind and amount of jewelry inside the paper bag.17 This being the case, she had no right
to attack respondent with her innuendos which were not merely inquisitive but outrightly
accusatory. By openly accusing respondent as the only person who went out of the
room before the loss of the jewelry in the presence of all the guests therein, and
ordering that she be immediately bodily searched, petitioner virtually branded
respondent as the thief. True, petitioner had the right to ascertain the identity of the
malefactor, but to malign respondent without an iota of proof that she was the one
who actually stole the jewelry is an act which, by any standard or principle of law is
impermissible. Petitioner had willfully caused injury to respondent in a manner which is
contrary to morals and good customs. Her firmness and resolve to find her missing
jewelry cannot justify her acts toward respondent. She did not act with justice and good
faith for apparently, she had no other purpose in mind but to prejudice respondent.
Certainly, petitioner transgressed the provisions of Article 19 in relation to Article 21 for
which she should be held accountable.
Owing to the rule that great weight and even finality is given to factual conclusions of
the Court of Appeals which affirm those of the trial court,18 we sustain the findings of the
trial court and the appellate court that respondent’s claim for actual damages has not
been substantiated with satisfactory evidence during the trial and must therefore be
denied. To be recoverable, actual damages must be duly proved with reasonable
degree of certainty and the courts cannot rely on speculation, conjecture or
guesswork.19
Respondent, however, is clearly entitled to an award of moral damages. Moral
damages may be awarded whenever the defendant’s wrongful act or omission is the
proximate cause of the plaintiff’s physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury20 in the cases specified or analogous to those provided in Article 2219 of the
Civil Code.21Though no proof of pecuniary loss is necessary in order that moral damages
may be adjudicated, courts are mandated to take into account all the circumstances
obtaining in the case and assess damages according to their discretion.22 Worthy of
note is that moral damages are not awarded to penalize the defendant,23 or to enrich a
complainant, but to enable the latter to obtain means, diversions or amusements that
will serve to alleviate the moral suffering he has undergone, by reason of defendant’s
culpable action. In any case, award of moral damages must be proportionate to the
sufferings inflicted.24
Based on the foregoing jurisprudential pronouncements, we rule that the appellate
court did not err in awarding moral damages. Considering respondent’s social standing,
and the fact that her profession is based primarily on trust reposed in her by her clients,
the seriousness of the imputations made by petitioner has greatly tarnished her
reputation and will in one way or the other, affect her future dealings with her clients,
the award ofP100,000.00 as moral damages appears to be a fair and reasonable
assessment of respondent’s damages.
WHEREFORE, the instant Petition is DENIED. Costs against petitioner.
[Contra Bonus Mores]
EUSEBIO GONZALES,
Petitioner,
- versus -
PHILIPPINE COMMERCIAL AND INTERNATIONAL BANK,
EDNA OCAMPO, and ROBERTO NOCEDA,
Respondents.
x-----------------------------------------------------------------------------------------x
DECISION
VELASCO, JR., J.:
The Case
This is an appeal via a Petition for Review on Certiorari under Rule 45 from the
Decision[1] dated October 22, 2007 of the Court of Appeals (CA) in CA-G.R. CV No.
74466, which denied petitioners appeal from the December 10, 2001 Decision[2] in Civil
Case No. 99-1324 of the Regional Trial Court (RTC), Branch 138 in Makati City. The RTC
found justification for respondents dishonor of petitioners check and found petitioner
solidarily liable with the spouses Jose and Jocelyn Panlilio (spouses Panlilio) for the three
promissory notes they executed in favor of respondent Philippine Commercial and
International Bank (PCIB).
The Facts
Petitioner Eusebio Gonzales (Gonzales) was a client of PCIB for a good 15 years before
he filed the instant case. His account with PCIB was handled by respondent Edna
Ocampo (Ocampo) until she was replaced by respondent Roberto Noceda (Noceda).
In October 1992, PCIB granted a credit line to Gonzales through the execution of a
Credit-On-Hand Loan Agreement[3] (COHLA), in which the aggregate amount of the
accounts of Gonzales with PCIB served as collateral for and his availment limit under the
credit line. Gonzales drew from said credit line through the issuance of check. At the
institution of the instant case, Gonzales had a Foreign Currency Deposit (FCD) of USD
8,715.72 with PCIB.
On October 30, 1995, Gonzales and his wife obtained a loan for PhP 500,000.
Subsequently, on December 26, 1995 and January 3, 1999, the spouses Panlilio and
Gonzales obtained two additional loans from PCIB in the amounts of PhP 1,000,000 and
PhP 300,000, respectively. These three loans amounting to PhP 1,800,000 were covered
by three promissory notes.[4] To secure the loans, a real estate mortgage (REM) over a
parcel of land covered by Transfer Certificate of Title (TCT) No. 38012 was executed by
G.R. No. 180257 Gonzales and the spouses Panlilio. Notably, the promissory notes specified, among
others, the solidary liability of Gonzales and the spouses Panlilio for the payment of the
Present: loans. However, it was the spouses Panlilio who received the loan proceeds of PhP
1,800,000.
CORONA, C.J., Chairperson,
VELASCO, JR., The monthly interest dues of the loans were paid by the spouses Panlilio through the
NACHURA,* automatic debiting of their account with PCIB. But the spouses Panlilio, from the month
DEL CASTILLO, and of July 1998, defaulted in the payment of the periodic interest dues from their PCIB
PEREZ, JJ. account which apparently was not maintained with enough deposits. PCIB allegedly
called the attention of Gonzales regarding the July 1998 defaults and the subsequent
Promulgated: accumulating periodic interest dues which were left still left unpaid.
February 23, 2011 In the meantime, Gonzales issued a check dated September 30, 1998 in favor of Rene
Unson (Unson) for PhP 250,000 drawn against the credit line (COHLA). However, on
October 13, 1998, upon presentment for payment by Unson of said check, it was
dishonored by PCIB due to the termination by PCIB of the credit line under COHLA on
October 7, 1998 for the unpaid periodic interest dues from the loans of Gonzales and
the spouses Panlilio. PCIB likewise froze the FCD account of Gonzales.
Consequently, Gonzales had a falling out with Unson due to the dishonor of the check.
They had a heated argument in the premises of the Philippine Columbian Association
(PCA) where they are both members, which caused great embarrassment and
humiliation to Gonzales. Thereafter, on November 5, 1998, Unson sent a demand
letter[5] to Gonzales for the PhP 250,000. And on December 3, 1998, the counsel of
Unson sent a second demand letter[6] to Gonzales with the threat of legal action. With
his FCD account that PCIB froze, Gonzales was forced to source out and pay the PhP
250,000 he owed to Unson in cash.
On January 28, 1999, Gonzales, through counsel, wrote PCIB insisting that the check he
issued had been fully funded, and demanded the return of the proceeds of his FCD as
well as damages for the unjust dishonor of the check.[7] PCIB replied on March 22, 1999
and stood its ground in freezing Gonzales accounts due to the outstanding dues of the
loans.[8] On May 26, 1999, Gonzales reiterated his demand, reminding PCIB that it knew
well that the actual borrowers were the spouses Panlilio and he never benefited from
the proceeds of the loans, which were serviced by the PCIB account of the spouses
Panlilio.[9]
PCIBs refusal to heed his demands compelled Gonzales to file the instant case for
damages with the RTC, on account of the alleged unjust dishonor of the check issued in
favor of Unson.
The Ruling of the RTC
After due trial, on December 10, 2001, the RTC rendered a Decision in favor of PCIB. The
decretal portion reads:
WHEREFORE, judgment is rendered as follows
(a) on the first issue, plaintiff is liable to pay defendant Bank as principal under the
promissory notes, Exhibits A, B and C;
(b) on the second issue, the Court finds that there is justification on part of the
defendant Bank to dishonor the check, Exhibit H;
(c) on the third issue, plaintiff and defendants are not entitled to damages from each
other.
No pronouncement as to costs.
SO ORDERED.[10]
The RTC found Gonzales solidarily liable with the spouses Panlilio on the three promissory
notes relative to the outstanding REM loan. The trial court found no fault in the
termination by PCIB of the COHLA with Gonzales and in freezing the latters accounts to
answer for the past due PhP 1,800,000 loan. The trial court ruled that the dishonor of the
check issued by Gonzales in favor of Unson was proper considering that the credit line
under the COHLA had already been terminated or revoked before the presentment of
the check.
Aggrieved, Gonzales appealed the RTC Decision before the CA.
The Ruling of the CA
On September 26, 2007, the appellate court rendered its Decision dismissing Gonzales
appeal and affirming in toto the RTC Decision. The fallo reads:
WHEREFORE, in view of the foregoing, the decision, dated December 10, 2001, in Civil
Case No. 99-1324 is hereby AFFIRMED in toto.
SO ORDERED.[11]
In dismissing Gonzales appeal, the CA, first, confirmed the RTCs findings that Gonzales
was indeed solidarily liable with the spouses Panlilio for the three promissory notes
executed for the REM loan; second, it likewise found neither fault nor negligence on the
part of PCIB in dishonoring the check issued by Gonzales in favor of Unson, ratiocinating
that PCIB was merely exercising its rights under the contractual stipulations in the COHLA
brought about by the outstanding past dues of the REM loan and interests for which
Gonzales was solidarily liable with the spouses Panlilio to pay under the promissory notes.
Thus, we have this petition.
The Issues
Gonzales, as before the CA, raises again the following assignment of errors:
I - IN NOT CONSIDERING THAT THE LIABILITY ARISING FROM PROMISSORY NOTES (EXHIBITS
A, B AND C, PETITIONER; EXHIBITS 1, 2 AND 3, RESPONDENT) PERTAINED TO BORROWER
JOSE MA. PANLILIO AND NOT TO APPELLANT AS RECOGNIZED AND ACKNOWLEDGE[D]
BY RESPONDENT PHILIPPINE COMMERCIAL & INDUSTRIAL BANK (RESPONDENT BANK).
II - IN FINDING THAT THE RESPONDENTS WERE NOT AT FAULT NOR GUILTY OF GROSS
NEGLIGENCE IN DISHONORING PETITIONERS CHECK DATED 30 SEPTEMBER 1998 IN THE
AMOUNT OF P250,000.00 FOR THE REASON ACCOUNT CLOSED, INSTEAD OF MERELY
REFER TO DRAWER GIVEN THE FACT THAT EVEN AFTER DISHONOR, RESPONDENT SIGNED A
CERTIFICATION DATED 7 DECEMBER 1998 THAT CREDIT ON HAND (COH) LOAN
AGREEMENT WAS STILL VALID WITH A COLLATERAL OF FOREIGN CURRENCY DEPOSIT
(FCD) OF [USD] 48,715.72.
III - IN NOT AWARDING DAMAGES AGAINST RESPONDENTS DESPITE PRESENTATION OF
CLEAR PROOF TO SUPPORT ACTION FOR DAMAGES.[12]
The Courts Ruling
The core issues can be summarized, as follows: first, whether Gonzales is liable for the
three promissory notes covering the PhP 1,800,000 loan he made with the spouses
Panlilio where a REM over a parcel of land covered by TCT No. 38012 was constituted as
security; and second, whether PCIB properly dishonored the check of Gonzales drawn
against the COHLA he had with the bank.
The petition is partly meritorious.
First Issue: Solidarily Liability on Promissory Notes
A close perusal of the records shows that the courts a quo correctly found Gonzales
solidarily liable with the spouses Panlilio for the three promissory notes.
The promissory notes covering the PhP 1,800,000 loan show the following:
(1) Promissory Note BD-090-1766-95,[13] dated October 30, 1995, for PhP 500,000
was signed by Gonzales and his wife, Jessica Gonzales;
(2) Promissory Note BD-090-2122-95,[14] dated December 26, 1995, for PhP
1,000,000 was signed by Gonzales and the spouses Panlilio; and
(3) Promissory Note BD-090-011-96,[15] dated January 3, 1996, for PhP 300,000 was
signed by Gonzales and the spouses Panlilio.
Clearly, Gonzales is liable for the loans covered by the above promissory notes. First,
Gonzales admitted that he is an accommodation party which PCIB did not dispute. In
his testimony, Gonzales admitted that he merely accommodated the spouses Panlilio at
the suggestion of Ocampo, who was then handling his accounts, in order to facilitate
the fast release of the loan. Gonzales testified:
ATTY. DE JESUS:
Now in this case you filed against the bank you mentioned there was a loan also
applied for by the Panlilios in the sum of P1.8 Million Pesos. Will you please tell this Court
how this came about?
GONZALES:
Mr. Panlilio requested his account officer . . . . at that time it is a P42.0 Million loan and if
he secures another P1.8 Million loan the release will be longer because it has to pass to
XO.
Q: After that what happened?
A: So as per suggestion since Mr. Panlilio is a good friend of mine and we co-
owned the property I agreed initially to use my name so that the loan can be utilized
immediately by Mr. Panlilio.
Q: Who is actually the borrower of this P1.8 Million Pesos?
A: Well, in paper me and Mr. Panlilio.
Q: Who received the proceeds of said loan?
A: Mr. Panlilio.
Q: Do you have any proof that it was Mr. Panlilio who actually received the
proceeds of this P1.8 Million Pesos loan?
A: A check was deposited in the account of Mr. Panlilio.[16]
xxxx
Q: By the way upon whose suggestion was the loan of Mr. Panlilio also placed
under your name initially?
A: Well it was actually suggested by the account officer at that time Edna
Ocampo.
Q: How about this Mr. Rodolfo Noceda?
A: As you look at the authorization aspect of the loan Mr. Noceda is the boss of
Edna so he has been familiar with my account ever since its inception.
Q: So these two officers Ocampo and Noceda knew that this was actually the
account of Mr. Panlilio and not your account?
A: Yes, sir. In fact even if there is a change of account officer they are always
informing me that the account will be debited to Mr. Panlilios account.[17]
Moreover, the first note for PhP 500,000 was signed by Gonzales and his wife as
borrowers, while the two subsequent notes showed the spouses Panlilio sign as borrowers
with Gonzales. It is, thus, evident that Gonzales signed, as borrower, the promissory notes
covering the PhP 1,800,000 loan despite not receiving any of the proceeds.
Second, the records of PCIB indeed bear out, and was admitted by Noceda, that the
PhP 1,800,000 loan proceeds went to the spouses Panlilio, thus:
ATTY. DE JESUS: [on Cross-Examination]
Is it not a fact that as far as the records of the bank [are] concerned the proceeds of
the 1.8 million loan was received by Mr. Panlilio?
NOCEDA:
Yes sir.[18]
The fact that the loans were undertaken by Gonzales when he signed as borrower or
co-borrower for the benefit of the spouses Panlilioas shown by the fact that the
proceeds went to the spouses Panlilio who were servicing or paying the monthly duesis
beside the point. For signing as borrower and co-borrower on the promissory notes with
the proceeds of the loans going to the spouses Panlilio, Gonzales has extended an
accommodation to said spouses.
Third, as an accommodation party, Gonzales is solidarily liable with the spouses Panlilio
for the loans. In Ang v. Associated Bank,[19] quoting the definition of an
accommodation party under Section 29 of the Negotiable Instruments Law, the Court
cited that an accommodation party is a person who has signed the instrument as
maker, drawer, acceptor, or indorser, without receiving value therefor, and for the
purpose of lending his name to some other person.[20] The Court further explained:
[A]n accommodation party is one who meets all the three requisites, viz: (1) he must be
a party to the instrument, signing as maker, drawer, acceptor, or indorser; (2) he must
not receive value therefor; and (3) he must sign for the purpose of lending his name or
credit to some other person. An accommodation party lends his name to enable the
accommodated party to obtain credit or to raise money; he receives no part of the
consideration for the instrument but assumes liability to the other party/ies thereto. The
accommodation party is liable on the instrument to a holder for value even though the
holder, at the time of taking the instrument, knew him or her to be merely an
accommodation party, as if the contract was not for accommodation.
As petitioner acknowledged it to be, the relation between an accommodation party
and the accommodated party is one of principal and suretythe accommodation party
being the surety. As such, he is deemed an original promisor and debtor from the
beginning; he is considered in law as the same party as the debtor in relation to
whatever is adjudged touching the obligation of the latter since their liabilities are
interwoven as to be inseparable. Although a contract of suretyship is in essence
accessory or collateral to a valid principal obligation, the suretys liability to the creditor is
immediate, primary and absolute; he is directly and equally bound with the principal. As
an equivalent of a regular party to the undertaking, a surety becomes liable to the debt
and duty of the principal obligor even without possessing a direct or personal interest in
the obligations nor does he receive any benefit therefrom.[21]
Thus, the knowledge, acquiescence, or even demand by Ocampo for an
accommodation by Gonzales in order to extend the credit or loan of PhP 1,800,000 to
the spouses Panlilio does not exonerate Gonzales from liability on the three promissory
notes.
Fourth, the solidary liability of Gonzales is clearly stipulated in the promissory notes which
uniformly begin, For value received, the undersigned (the BORROWER) jointly and
severally promise to pay x x x. Solidary liability cannot be presumed but must be
established by law or contract.[22] Article 1207 of the Civil Code pertinently states that
there is solidary liability only when the obligation expressly so states, or when the
obligation requires solidarity. This is true in the instant case where Gonzales, as
accommodation party, is immediately, equally, and absolutely bound with the spouses
Panlilio on the promissory notes which indubitably stipulated solidary liability for all the
borrowers. Moreover, the three promissory notes serve as the contract between the
parties. Contracts have the force of law between the parties and must be complied
with in good faith.[23]
Second Issue: Improper Dishonor of Check
Having ruled that Gonzales is solidarily liable for the three promissory notes, We shall now
touch upon the question of whether it was proper for PCIB to dishonor the check issued
by Gonzales against the credit line under the COHLA.
We answer in the negative.
As a rule, an appeal by certiorari under Rule 45 of the Rules of Court is limited to review
of errors of law.[24] The factual findings of the trial court, especially when affirmed by
the appellate court, are generally binding on us unless there was a misapprehension of
facts or when the inference drawn from the facts was manifestly mistaken.[25] The
instant case falls within the exception.
The courts a quo found and held that there was a proper dishonor of the PhP 250,000
check issued by Gonzales against the credit line, because the credit line was already
closed prior to the presentment of the check by Unson; and the closing of the credit line
was likewise proper pursuant to the stipulations in the promissory notes on the banks right
to set off or apply all moneys of the debtor in PCIBs hand and the stipulations in the
COHLA on the PCIBs right to terminate the credit line on grounds of default by Gonzales.
Gonzales argues otherwise, pointing out that he was not informed about the default of
the spouses Panlilio and that the September 21, 1998 account statement of the credit
line shows a balance of PhP 270,000 which was likewise borne out by the December 7,
1998 PCIBs certification that he has USD 8,715.72 in his FCD account which is more than
sufficient collateral to guarantee the PhP 250,000 check, dated September 30, 1998, he
issued against the credit line.
A careful scrutiny of the records shows that the courts a quo committed reversible error
in not finding negligence by PCIB in the dishonor of the PhP 250,000 check.
First. There was no proper notice to Gonzales of the default and delinquency of the PhP
1,800,000 loan. It must be borne in mind that while solidarily liable with the spouses
Panlilio on the PhP 1,800,000 loan covered by the three promissory notes, Gonzales is
only an accommodation party and as such only lent his name and credit to the spouses
Panlilio. While not exonerating his solidary liability, Gonzales has a right to be properly
apprised of the default or delinquency of the loan precisely because he is a co-
signatory of the promissory notes and of his solidary liability.
We note that it is indeed understandable for Gonzales to push the spouses Panlilio to
pay the outstanding dues of the PhP 1,800,000 loan, since he was only an
accommodation party and was not personally interested in the loan. Thus, a meeting
was set by Gonzales with the spouses Panlilio and the PCIB officers, Noceda and
Ocampo, in the spouses Panlilios jewelry shop in SM Megamall on October 5, 1998.
Unfortunately, the meeting did not push through due to the heavy traffic Noceda and
Ocampo encountered.
Such knowledge of the default by Gonzales was, however, not enough to properly
apprise Gonzales about the default and the outstanding dues. Verily, it is not enough to
be merely informed to pay over a hundred thousand without being formally apprised of
the exact aggregate amount and the corresponding dues pertaining to specific loans
and the dates they became due.
Gonzales testified that he was not duly notified about the outstanding interest dues of
the loan:
ATTY. DE JESUS:
Now when Mr. Panlilios was encountering problems with the bank did the defendant
bank [advise] you of any problem with the same account?
GONZALES:
They never [advised] me in writing.
Q: How did you come to know that there was a problem?
A: When my check bounced sir.[26]
On the other hand, the PCIB contends otherwise, as Corazon Nepomuceno testified:
ATTY. PADILLA:
Can you tell this Honorable Court what is it that you told Mr. Gonzales when you spoke
to him at the celphone?
NEPOMUCENO:
I just told him to update the interest so that we would not have to cancel the COH Line
and he could withdraw the money that was in the deposit because technically, if an
account is past due we are not allowed to let the client withdraw funds because they
are allowed to offset funds so, just to help him get his money, just to update the interest
so that we could allow him to withdraw.
Q: Withdraw what?
A: His money on the COH, whatever deposit he has with us.
Q: Did you inform him that if he did not update the interest he would not be able
to withdraw his money?
A: Yes sir, we will be forced to hold on to any assets that he has with us so thats
why we suggested just to update the interest because at the end of everything, he
would be able to withdraw more funds than the interest that the money he would be
needed to update the interest.[27]
From the foregoing testimonies, between the denial of Gonzales and the assertion by
PCIB that Gonzales was properly apprised, we find for Gonzales. We find the testimonies
of the former PCIB employees to be self-serving and tenuous at best, for there was no
proper written notice given by the bank. The record is bereft of any document showing
that, indeed, Gonzales was formally informed by PCIB about the past due periodic
interests.
PCIB is well aware and did not dispute the fact that Gonzales is an accommodation
party. It also acted in accordance with such fact by releasing the proceeds of the loan
to the spouses Panlilio and likewise only informed the spouses Panlilio of the interest
dues. The spouses Panlilio, through their account[28] with PCIB, were paying the
periodic interest dues and were the ones periodically informed by the bank of the
debiting of the amounts for the periodic interest payments. Gonzales never paid any of
the periodic interest dues. PCIBs Noceda admitted as much in his cross-examination:
ATTY. DE JESUS: [on Cross-Examination]
And there was no instance that Mr. Gonzales ever made even interest for this loan, is it
not, its always Mr. Panlilio who was paying the interest for this loan?
NOCEDA:
Yes sir.[29]
Indeed, no evidence was presented tending to show that Gonzales was periodically
sent notices or notified of the various periodic interest dues covering the three
promissory notes. Neither do the records show that Gonzales was aware of amounts for
the periodic interests and the payment for them. Such were serviced by the spouses
Panlilio.
Thus, PCIB ought to have notified Gonzales about the status of the default or
delinquency of the interest dues that were not paid starting July 1998. And such
notification must be formal or in written form considering that the outstanding periodic
interests became due at various dates, i.e., on July 8, 17, and 28, 1998, and the various
amounts have to be certain so that Gonzales is not only properly apprised but is given
the opportunity to pay them being solidarily liable for the loans covered by the
promissory notes.
It is the bank which computes these periodic interests and such dues must be put into
writing and formally served to Gonzales if he were asked to pay them, more so when
the payments by the spouses Panlilio were charged through the account of the spouses
Panlilio where the interest dues were simply debited. Such arrangement did not cover
Gonzales bank account with PCIB, since he is only an accommodation party who has NOCEDA:
no personal interest in the PhP 1,800,000 loan. Without a clear and determinate demand No sir but verbally it was relayed to him.
through a formal written notice for the exact periodic interest dues for the loans,
Gonzales cannot be expected to pay for them. Q: But you have no proof that Mr. Gonzales came to know about this Exhibit 8?
A: It was relayed to him verbally.
In business, more so for banks, the amounts demanded from the debtor or borrower
have to be definite, clear, and without ambiguity. It is not sufficient simply to be Q: But there is no written proof?
informed that one must pay over a hundred thousand aggregate outstanding interest A: No sir.
dues without clear and certain figures. Thus, We find PCIB negligent in not properly
informing Gonzales, who is an accommodation party, about the default and the exact Q: And it is only now that you claim that it was verbally relayed to him, its only
outstanding periodic interest dues. Without being properly apprised, Gonzales was not now when you testified in Court?
given the opportunity to properly act on them. A: Before . . .

It was only through a letter[30] sent by PCIB dated October 2, 1998 but incongruously Q: To whom did you relay this information?
showing the delinquencies of the PhP 1,800,000 loan at a much later date, i.e., as of A: It was during the time that we were going to Megamall, it was relayed by Liza
October 31, 1998, when Gonzales was formally apprised by PCIB. In it, the interest due that he has to pay his obligations or else it will adversely affect the status of the
was PhP 106,1616.71 and penalties for the unpaid interest due of PhP 64,766.66, or a account.[33]
total aggregate due of PhP 171,383.37. But it is not certain and the records do not show
when the letter was sent and when Gonzales received it. What is clear is that such letter On the other hand, the testimony of Corazon Nepomuceno shows:
was belatedly sent by PCIB and received by Gonzales after the fact that the latters FCD
was already frozen, his credit line under the COHLA was terminated or suspended, and ATTY. DE JESUS: [on Cross-Examination]
his PhP 250,000 check in favor of Unson was dishonored. Now we go to the other credit facility which is the credit on hand extended solely of
course to Mr. Eusebio Gonzales who is the plaintiff here, Mr. Panlilio is not included in this
And way much later, or on May 4, 1999, was a demand letter from the counsel of PCIB credit on hand facility. Did I gather from you as per your Exhibit 7 as of October 2, 1998
sent to Gonzales demanding payment of the PhP 1,800,000 loan. Obviously, these you were the one who recommended the cancellation of this credit on hand facility?
formal written notices sent to Gonzales were too late in the day for Gonzales to act
properly on the delinquency and he already suffered the humiliation and
embarrassment from the dishonor of his check drawn against the credit line. NEPOMUCENO:
It was recommended by the account officer and I supported it.
To reiterate, a written notice on the default and deficiency of the PhP 1,800,000 loan
covered by the three promissory notes was required to apprise Gonzales, an Q: And you approved it?
accommodation party. PCIB is obliged to formally inform and apprise Gonzales of the A: Yes sir.
defaults and the outstanding obligations, more so when PCIB was invoking the solidary
liability of Gonzales. This PCIB failed to do. Q: Did you inform Mr. Gonzales that you have already cancelled his credit on
hand facility?
Second. PCIB was grossly negligent in not giving prior notice to Gonzales about its A: As far as I know, it is the account officer who will inform him.
course of action to suspend, terminate, or revoke the credit line, thereby violating the
clear stipulation in the COHLA. Q: But you have no record that he was informed?
A: I dont recall and we have to look at the folder to determine if they were
The COHLA, in its effectivity clause, clearly provides: informed.
4. EFFECTIVITY The COH shall be effective for a period of one (1) year
commencing from the receipt by the CLIENT of the COH checkbook issued by the Q: If you will notice, this letter . . . what do you call this letter of yours?
BANK, subject to automatic renewals for same periods unless terminated by the BANK A: That is our letter advising them or reminding them of their unpaid interest and
upon prior notice served on CLIENT.[31] (Emphasis ours.) that if he is able to update his interest he can extend the promissory note or restructure
the outstanding.

It is undisputed that the bank unilaterally revoked, suspended, and terminated the Q: Now, I call your attention madam witness, there is nothing in this letter to the
COHLA without giving Gonzales prior notice as required by the above stipulation in the clients advising them or Mr. Gonzales that his credit on hand facility was already
COHLA. Noceda testified on cross-examination on the Offering Ticket[32] cancelled?
recommending the termination of the credit line, thus: A: I dont know if there are other letters aside from this.

ATTY. DE JESUS: [on Cross-Examination] Q: So in this letter there is nothing to inform or to make Mr. Eusebio aware that his
This Exhibit 8, you have not furnished at anytime a copy to the plaintiff Mr. Gonzales is it credit on hand facility was already cancelled?
not?
A: No actually he can understand it from the last sentence. If you will be able to
update your outstanding interest, we can apply the extention of your promissory note so
in other words we are saying that if you dont, you cannot extend the promissory note.
Q: You will notice that the subject matter of this October 2, 1998 letter is only the
loan of 1.8 million is it not, as you can see from the letter? Okay?
A: Ah . . .
Q: Okay. There is nothing there that will show that that also refers to the credit on
hand facility which was being utilized by Mr. Gonzales is it not?
A: But I dont know if there are other letters that are not presented to me now.[34]
The foregoing testimonies of PCIB officers clearly show that not only did PCIB fail to give
prior notice to Gonzales about the Offering Ticket for the process of termination,
suspension, or revocation of the credit line under the COHLA, but PCIB likewise failed to
inform Gonzales of the fact that his credit line has been terminated. Thus, we find PCIB
grossly negligent in the termination, revocation, or suspension of the credit line under
the COHLA. While PCIB invokes its right on the so-called cross default provisions, it may
not with impunity ignore the rights of Gonzales under the COHLA.
Indeed, the business of banking is impressed with public interest and great reliance is
made on the banks sworn profession of diligence and meticulousness in giving
irreproachable service. Like a common carrier whose business is imbued with public
interest, a bank should exercise extraordinary diligence to negate its liability to the
depositors.[35] In this instance, PCIB is sorely remiss in the diligence required in treating
with its client, Gonzales. It may not wantonly exercise its rights without respecting and
honoring the rights of its clients.
Art. 19 of the New Civil Code clearly provides that [e]very person must, in the exercise of
his rights and in the performance of his duties, act with justice, give everyone his due,
and observe honesty and good faith. This is the basis of the principle of abuse of right
which, in turn, is based upon the maxim suum jus summa injuria (the abuse of right is the
greatest possible wrong).[36]
In order for Art. 19 to be actionable, the following elements must be present: (1) the
existence of a legal right or duty, (2) which is exercised in bad faith, and (3) for the sole
intent of prejudicing or injuring another.[37] We find that such elements are present in
the instant case. The effectivity clause of the COHLA is crystal clear that termination of
the COH should be done only upon prior notice served on the CLIENT. This is the legal
duty of PCIBto inform Gonzales of the termination. However, as shown by the above
testimonies, PCIB failed to give prior notice to Gonzales.
Malice or bad faith is at the core of Art. 19. Malice or bad faith implies a conscious and
intentional design to do a wrongful act for a dishonest purpose or moral obliquity.[38] In
the instant case, PCIB was able to send a letter advising Gonzales of the unpaid interest
on the loans[39] but failed to mention anything about the termination of the COHLA.
More significantly, no letter was ever sent to him about the termination of the COHLA.
The failure to give prior notice on the part of PCIB is already prima facie evidence of
bad faith.[40] Therefore, it is abundantly clear that this case falls squarely within the
purview of the principle of abuse of rights as embodied in Art. 19.
Third. There is no dispute on the right of PCIB to suspend, terminate, or revoke the
COHLA under the cross default provisions of both the promissory notes and the COHLA.
However, these cross default provisions do not confer absolute unilateral right to PCIB,
as they are qualified by the other stipulations in the contracts or specific circumstances,
like in the instant case of an accommodation party.
The promissory notes uniformly provide:
The lender is hereby authorized, at its option and without notice, to set off or apply to the
payment of this Note any and all moneys which may be in its hands on deposit or
otherwise belonging to the Borrower. The Borrower irrevocably appoint/s the Lender,
effective upon the nonpayment of this Note on demand/at maturity or upon the
happening of any of the events of default, but without any obligation on the Lenders
part should it choose not to perform this mandate, as the attorney-in-fact of the
Borrower, to sell and dispose of any property of the Borrower, which may be in the
Lenders possession by public or private sale, and to apply the proceeds thereof to the
payment of this Note; the Borrower, however, shall remain liable for any deficiency.[41]
(Emphasis ours.)
The above provisos are indeed qualified with the specific circumstance of an
accommodation party who, as such, has not been servicing the payment of the dues of
the loans, and must first be properly apprised in writing of the outstanding dues in order
to answer for his solidary obligation.
The same is true for the COHLA, which in its default clause provides:
16. DEFAULT The CLIENT shall be considered in default under the COH if any of the
following events shall occur:
1. xxx
2. Violation of the terms and conditions of this Agreement or any contract of the
CLIENT with the BANK or any bank, persons, corporations or entities for the payment of
borrowed money, or any other event of default in such contracts.[42]
The above pertinent default clause must be read in conjunction with the effectivity
clause (No. 4 of the COHLA, quoted above), which expressly provides for the right of
client to prior notice. The rationale is simple: in cases where the bank has the right to
terminate, revoke, or suspend the credit line, the client must be notified of such intent in
order for the latter to act accordinglywhether to correct any ground giving rise to the
right of the bank to terminate the credit line and to dishonor any check issued or to act
in accord with such termination, i.e., not to issue any check drawn from the credit line or
to replace any checks that had been issued. This, the bankwith gross negligencefailed
to accord Gonzales, a valued client for more than 15 years.
Fourth. We find the testimony[43] of Ocampo incredible on the point that the principal
borrower of the PhP 1,800,000 loan covered by the three promissory notes is Gonzales for
which the bank officers had special instructions to grant and that it was through the
instructions of Gonzales that the payment of the periodic interest dues were debited
from the account of the spouses Panlilio.
For one, while the first promissory note dated October 30, 1995 indeed shows Gonzales
as the principal borrower, the other promissory notes dated December 26, 1995 and
January 3, 1996 evidently show that it was Jose Panlilio who was the principal borrower
with Gonzales as co-borrower. For another, Ocampo cannot feign ignorance on the
arrangement of the payments by the spouses Panlilio through the debiting of their bank
account. It is incredulous that the payment arrangement is merely at the behest of
Gonzales and at a mere verbal directive to do so. The fact that the spouses Panlilio not
only received the proceeds of the loan but were servicing the periodic interest dues
reinforces the fact that Gonzales was only an accommodation party.
Thus, due to PCIBs negligence in not giving Gonzalesan accommodation partyproper
notice relative to the delinquencies in the PhP 1,800,000 loan covered by the three
promissory notes, the unjust termination, revocation, or suspension of the credit line
under the COHLA from PCIBs gross negligence in not honoring its obligation to give prior
notice to Gonzales about such termination and in not informing Gonzales of the fact of
such termination, treating Gonzales account as closed and dishonoring his PhP 250,000
check, was certainly a reckless act by PCIB. This resulted in the actual injury of PhP
250,000 to Gonzales whose FCD account was frozen and had to look elsewhere for
money to pay Unson.
With banks, the degree of diligence required is more than that of a good father of the
family considering that the business of banking is imbued with public interest due to the
nature of their function. The law imposes on banks a high degree of obligation to treat
the accounts of its depositors with meticulous care, always having in mind the fiduciary
nature of banking.[44] Had Gonzales been properly notified of the delinquencies of the
PhP 1,800,000 loan and the process of terminating his credit line under the COHLA, he
could have acted accordingly and the dishonor of the check would have been
avoided.
Third Issue: Award of Damages
The banking system has become an indispensable institution in the modern world and
plays a vital role in the economic life of every civilized societybanks have attained a
ubiquitous presence among the people, who have come to regard them with respect
and even gratitude and most of all, confidence, and it is for this reason, banks should
guard against injury attributable to negligence or bad faith on its part.[45]
In the instant case, Gonzales suffered from the negligence and bad faith of PCIB. From
the testimonies of Gonzales witnesses, particularly those of Dominador Santos[46] and
Freddy Gomez,[47] the embarrassment and humiliation Gonzales has to endure not only
before his former close friend Unson but more from the members and families of his
friends and associates in the PCA, which he continues to experience considering the
confrontation he had with Unson and the consequent loss of standing and credibility
among them from the fact of the apparent bouncing check he issued. Credit is very
important to businessmen and its loss or impairment needs to be recognized and
compensated.[48]
The termination of the COHLA by PCIB without prior notice and the subsequent dishonor
of the check issued by Gonzales constitute acts of contra bonus mores. Art. 21 of the
Civil Code refers to such acts when it says, Any person who willfully causes loss or injury
to another in a manner that is contrary to morals, good customs or public policy shall
compensate the latter for damage.
Accordingly, this Court finds that such acts warrant the payment of indemnity in the
form of nominal damages. Nominal damages are recoverable where a legal right is
technically violated and must be vindicated against an invasion that has produced no
actual present loss of any kind x x x.[49] We further explained the nature of nominal
damages in Almeda v. Cario:
x x x Its award is thus not for the purpose of indemnification for a loss but for the
recognition and vindication of a right. Indeed, nominal damages are damages in name
only and not in fact. When granted by the courts, they are not treated as an equivalent
of a wrong inflicted but simply a recognition of the existence of a technical injury. A
violation of the plaintiffs right, even if only technical, is sufficient to support an award of
nominal damages. Conversely, so long as there is a showing of a violation of the right of
the plaintiff, an award of nominal damages is proper.[50] (Emphasis Ours.)
In the present case, Gonzales had the right to be informed of the accrued interest and
most especially, for the suspension of his COHLA. For failure to do so, the bank is liable to
pay nominal damages. The amount of such damages is addressed to the sound
discretion of the court, taking into account the relevant circumstances.[51] In this case,
the Court finds that the grant of PhP 50,000 as nominal damages is proper.
Moreover, as We held in MERALCO v. CA,[52] failure to give prior notice when required,
such as in the instant case, constitutes a breach of contract and is a clear violation of
Art. 21 of the Code. In cases such as this, Art. 2219 of the Code provides that moral
damages may be recovered in acts referred to in its Art. 21. Further, Art. 2220 of the
Code provides that [w]illful 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. Similarly, every person who, contrary to law, willfully or
negligently causes damage to another, shall indemnify the latter for the same.[53]
Evidently, Gonzales is entitled to recover moral damages.
Even in the absence of malice or bad faith, a depositor still has the right to recover
reasonable moral damages, if the depositor suffered mental anguish, serious anxiety,
embarrassment, and humiliation.[54] Although incapable of pecuniary estimation,
moral damages are certainly recoverable if they are the proximate result of the
defendants wrongful act or omission. The factual antecedents bolstered by undisputed
testimonies likewise show the mental anguish and anxiety Gonzales had to endure with
the threat of Unson to file a suit. Gonzales had to pay Unson PhP 250,000, while his FCD
account in PCIB was frozen, prompting Gonzales to demand from PCIB and to file the
instant suit.
The award of moral damages is aimed at a restoration within the limits of the possible, of
the spiritual status quo anteit must always reasonably approximate the extent of injury
and be proportional to the wrong committed.[55] Thus, an award of PhP 50,000 is
reasonable moral damages for the unjust dishonor of the PhP 250,000 which was the
proximate cause of the consequent humiliation, embarrassment, anxiety, and mental
anguish suffered by Gonzales from his loss of credibility among his friends, colleagues
and peers.
Furthermore, the initial carelessness of the banks omission in not properly informing
Gonzales of the outstanding interest duesaggravated by its gross neglect in omitting to
give prior notice as stipulated under the COHLA and in not giving actual notice of the
termination of the credit linejustifies the grant of exemplary damages of PhP 10,000.
Such an award is imposed by way of example or correction for the public good.
Finally, an award for attorneys fees is likewise called for from PCIBs negligence which
compelled Gonzales to litigate to protect his interest. In accordance with Art. 2208(1) of
the Code, attorneys fees may be recovered when exemplary damages are awarded.
We find that the amount of PhP 50,000 as attorneys fees is reasonable.
WHEREFORE, this petition is PARTLY GRANTED. Accordingly, the CA Decision dated
October 22, 2007 in CA-G.R. CV No. 74466 is hereby REVERSED and SET ASIDE. The
Philippine Commercial and International Bank (now Banco De Oro) is ORDERED to pay
Eusebio Gonzales PhP 50,000 as nominal damages, PhP 50,000 as moral damages, PhP
10,000 as exemplary damages, and PhP 50,000 as attorneys fees.
[Breach of Promise to Marry] arriving at an amicable settlement." It added that should any of them fail to appear "the
petition for relief and the opposition thereto will be deemed submitted for resolution."
G.R. No. L-20089 December 26, 1964
On August 23, 1955 defendant failed to appear before court. Instead, on the following
BEATRIZ P. WASSMER, plaintiff-appellee, day his counsel filed a motion to defer for two weeks the resolution on defendants
vs. petition for relief. The counsel stated that he would confer with defendant in Cagayan
FRANCISCO X. VELEZ, defendant-appellant. de Oro City — the latter's residence — on the possibility of an amicable element. The
court granted two weeks counted from August 25, 1955.
Jalandoni & Jamir for defendant-appellant.
Samson S. Alcantara for plaintiff-appellee. Plaintiff manifested on June 15, 1956 that the two weeks given by the court had expired
on September 8, 1955 but that defendant and his counsel had failed to appear.
BENGZON, J.P., J.:
Another chance for amicable settlement was given by the court in its order of July 6,
1956 calling the parties and their attorneys to appear on July 13, 1956. This time.
The facts that culminated in this case started with dreams and hopes, followed by
however, defendant's counsel informed the court that chances of settling the case
appropriate planning and serious endeavors, but terminated in frustration and, what is
amicably were nil.
worse, complete public humiliation.

On July 20, 1956 the court issued an order denying defendant's aforesaid petition.
Francisco X. Velez and Beatriz P. Wassmer, following their mutual promise of love,
Defendant has appealed to this Court. In his petition of June 21, 1955 in the court a
decided to get married and set September 4, 1954 as the big day. On September 2,
quo defendant alleged excusable negligence as ground to set aside the judgment by
1954 Velez left this note for his bride-to-be:
default. Specifically, it was stated that defendant filed no answer in the belief that an
amicable settlement was being negotiated.
Dear Bet —
A petition for relief from judgment on grounds of fraud, accident, mistake or excusable
Will have to postpone wedding — My mother opposes it. Am leaving on the Convair negligence, must be duly supported by an affidavit of merits stating facts constituting a
today. valid defense. (Sec. 3, Rule 38, Rules of Court.) Defendant's affidavit of merits attached
to his petition of June 21, 1955 stated: "That he has a good and valid defense against
Please do not ask too many people about the reason why — That would only create a plaintiff's cause of action, his failure to marry the plaintiff as scheduled having been due
scandal. to fortuitous event and/or circumstances beyond his control." An affidavit of merits like
this stating mere conclusions or opinions instead of facts is not valid. (Cortes vs. Co Bun
Paquing Kim, L-3926, Oct. 10, 1951; Vaswani vs. P. Tarrachand Bros., L-15800, December 29, 1960.)

But the next day, September 3, he sent her the following telegram:
NOTHING CHANGED REST ASSURED RETURNING VERY SOON APOLOGIZE MAMA PAPA
LOVE .
PAKING
Thereafter Velez did not appear nor was he heard from again.
Defendant, however, would contend that the affidavit of merits was in fact
unnecessary, or a mere surplusage, because the judgment sought to be set aside was
null and void, it having been based on evidence adduced before the clerk of court. In
Province of Pangasinan vs. Palisoc, L-16519, October 30, 1962, this Court pointed out
that the procedure of designating the clerk of court as commissioner to receive
evidence is sanctioned by Rule 34 (now Rule 33) of the Rules of Court. Now as to
defendant's consent to said procedure, the same did not have to be obtained for he
was declared in default and thus had no standing in court (Velez vs. Ramas, 40 Phil. 787;
Alano vs. Court of First Instance, L-14557, October 30, 1959).

Sued by Beatriz for damages, Velez filed no answer and was declared in default.
Plaintiff adduced evidence before the clerk of court as commissioner, and on April 29,
1955, judgment was rendered ordering defendant to pay plaintiff P2,000.00 as actual
damages; P25,000.00 as moral and exemplary damages; P2,500.00 as attorney's fees;
and the costs.
On June 21, 1955 defendant filed a "petition for relief from orders, judgment and
proceedings and motion for new trial and reconsideration." Plaintiff moved to strike it
cut. But the court, on August 2, 1955, ordered the parties and their attorneys to appear
before it on August 23, 1955 "to explore at this stage of the proceedings the possibility of
In support of his "motion for new trial and reconsideration," defendant asserts that the
judgment is contrary to law. The reason given is that "there is no provision of the Civil
Code authorizing" an action for breach of promise to marry. Indeed, our ruling
in Hermosisima vs. Court of Appeals (L-14628, Sept. 30, 1960), as reiterated in Estopa vs.
Biansay (L-14733, Sept. 30, 1960), is that "mere breach of a promise to marry" is not an
actionable wrong. We pointed out that Congress deliberately eliminated from the draft
of the new Civil Code the provisions that would have it so.
It must not be overlooked, however, that the extent to which acts not contrary to law
may be perpetrated with impunity, is not limitless for Article 21 of said Code provides
that "any person who wilfully causes loss or injury to another in a manner that is contrary
to morals, good customs or public policy shall compensate the latter for the damage."

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

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

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

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

PREMISES CONSIDERED, with the above-indicated modification, the lower court's

judgment is hereby affirmed, with costs.
[Breach of Promise to Marry]
G.R. No. 97336 February 19, 1993
GASHEM SHOOKAT BAKSH, petitioner,
vs.
HON. COURT OF APPEALS and MARILOU T. GONZALES, respondents.
Public Attorney's Office for petitioner.
Corleto R. Castro for private respondent.
DAVIDE, JR., J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to review and
set aside the Decision 1of the respondent Court of Appeals in CA-G.R. CV No. 24256
which affirmed in toto the 16 October 1939 Decision of Branch 38 (Lingayen) of the
Regional Trial Court (RTC) of Pangasinan in Civil Case No. 16503. Presented is the issue of
whether or not damages may be recovered for a breach of promise to marry on the
basis of Article 21 of the Civil Code of the Philippines.
The antecedents of this case are not complicated:
On 27 October 1987, private respondent, without the assistance of counsel, filed with
the aforesaid trial court a complaint 2 for damages against the petitioner for the alleged
violation of their agreement to get married. She alleges in said complaint that: she is
twenty-two (22) years old, single, Filipino and a pretty lass of good moral character and
reputation duly respected in her community; petitioner, on the other hand, is an Iranian
citizen residing at the Lozano Apartments, Guilig, Dagupan City, and is an exchange
student taking a medical course at the Lyceum Northwestern Colleges in Dagupan City;
before 20 August 1987, the latter courted and proposed to marry her; she accepted his
love on the condition that they would get married; they therefore agreed to get
married after the end of the school semester, which was in October of that year;
petitioner then visited the private respondent's parents in Bañaga, Bugallon, Pangasinan
to secure their approval to the marriage; sometime in 20 August 1987, the petitioner
forced her to live with him in the Lozano Apartments; she was a virgin before she began
living with him; a week before the filing of the complaint, petitioner's attitude towards
her started to change; he maltreated and threatened to kill her; as a result of such
maltreatment, she sustained injuries; during a confrontation with a representative of the
barangay captain of Guilig a day before the filing of the complaint, petitioner
repudiated their marriage agreement and asked her not to live with him anymore and;
the petitioner is already married to someone living in Bacolod City. Private respondent
then prayed for judgment ordering the petitioner to pay her damages in the amount of
not less than P45,000.00, reimbursement for actual expenses amounting to P600.00,
attorney's fees and costs, and granting her such other relief and remedies as may be
just and equitable. The complaint was docketed as Civil Case No. 16503.
In his Answer with Counterclaim, 3 petitioner admitted only the personal circumstances
of the parties as averred in the complaint and denied the rest of the allegations either
for lack of knowledge or information sufficient to form a belief as to the truth thereof or
because the true facts are those alleged as his Special and Affirmative Defenses. He
thus claimed that he never proposed marriage to or agreed to be married with the
private respondent; he neither sought the consent and approval of her parents nor
forced her to live in his apartment; he did not maltreat her, but only told her to stop
coming to his place because he discovered that she had deceived him by stealing his
money and passport; and finally, no confrontation took place with a representative of
the barangay captain. Insisting, in his Counterclaim, that the complaint is baseless and
unfounded and that as a result thereof, he was unnecessarily dragged into court and
compelled to incur expenses, and has suffered mental anxiety and a besmirched
reputation, he prayed for an award of P5,000.00 for miscellaneous expenses and
P25,000.00 as moral damages.
After conducting a pre-trial on 25 January 1988, the trial court issued a Pre-Trial
Order 4 embodying the stipulated facts which the parties had agreed upon, to wit:
1. That the plaintiff is single and resident (sic) of Bañaga, Bugallon, Pangasinan, while the
defendant is single, Iranian citizen and resident (sic) of Lozano Apartment, Guilig,
Dagupan City since September 1, 1987 up to the present;
2. That the defendant is presently studying at Lyceum Northwestern, Dagupan City,
College of Medicine, second year medicine proper;
3. That the plaintiff is (sic) an employee at Mabuhay Luncheonette , Fernandez Avenue,
Dagupan City since July, 1986 up to the present and a (sic) high school graduate;
4. That the parties happened to know each other when the manager of the Mabuhay
Luncheonette, Johhny Rabino introduced the defendant to the plaintiff on August 3,
1986.
After trial on the merits, the lower court, applying Article 21 of the Civil Code, rendered
on 16 October 1989 a decision 5 favoring the private respondent. The petitioner was thus
ordered to pay the latter damages and attorney's fees; the dispositive portion of the
decision reads:
IN THE LIGHT of the foregoing consideration, judgment is hereby rendered in favor of the
plaintiff and against the defendant.
1. Condemning (sic) the defendant to pay the plaintiff the sum of twenty thousand
(P20,000.00) pesos as moral damages.
2. Condemning further the defendant to play the plaintiff the sum of three thousand
(P3,000.00) pesos as atty's fees and two thousand (P2,000.00) pesos at (sic) litigation
expenses and to pay the costs.
3. All other claims are denied. 6
The decision is anchored on the trial court's findings and conclusions that (a) petitioner
and private respondent were lovers, (b) private respondent is not a woman of loose
morals or questionable virtue who readily submits to sexual advances, (c) petitioner,
through machinations, deceit and false pretenses, promised to marry private
respondent, d) because of his persuasive promise to marry her, she allowed herself to
be deflowered by him, (e) by reason of that deceitful promise, private respondent and
her parents — in accordance with Filipino customs and traditions — made some
preparations for the wedding that was to be held at the end of October 1987 by
looking for pigs and chickens, inviting friends and relatives and contracting sponsors, (f)
petitioner did not fulfill his promise to marry her and (g) such acts of the petitioner, who is
a foreigner and who has abused Philippine hospitality, have offended our sense of
morality, good customs, culture and traditions. The trial court gave full credit to the
private respondent's testimony because, inter alia, she would not have had the temerity
and courage to come to court and expose her honor and reputation to public scrutiny
and ridicule if her claim was false. 7
The above findings and conclusions were culled from the detailed summary of the
evidence for the private respondent in the foregoing decision, digested by the
respondent Court as follows:
According to plaintiff, who claimed that she was a virgin at the time and that she never
had a boyfriend before, defendant started courting her just a few days after they first
met. He later proposed marriage to her several times and she accepted his love as well
as his proposal of marriage on August 20, 1987, on which same day he went with her to
her hometown of Bañaga, Bugallon, Pangasinan, as he wanted to meet her parents
and inform them of their relationship and their intention to get married. The photographs
Exhs. "A" to "E" (and their submarkings) of defendant with members of plaintiff's family or
with plaintiff, were taken that day. Also on that occasion, defendant told plaintiffs
parents and brothers and sisters that he intended to marry her during the semestral
break in October, 1987, and because plaintiff's parents thought he was good and
trusted him, they agreed to his proposal for him to marry their daughter, and they
likewise allowed him to stay in their house and sleep with plaintiff during the few days
that they were in Bugallon. When plaintiff and defendant later returned to Dagupan
City, they continued to live together in defendant's apartment. However, in the early
days of October, 1987, defendant would tie plaintiff's hands and feet while he went to
school, and he even gave her medicine at 4 o'clock in the morning that made her
sleep the whole day and night until the following day. As a result of this live-in
relationship, plaintiff became pregnant, but defendant gave her some medicine to
abort the fetus. Still plaintiff continued to live with defendant and kept reminding him of
his promise to marry her until he told her that he could not do so because he was
already married to a girl in Bacolod City. That was the time plaintiff left defendant, went
home to her parents, and thereafter consulted a lawyer who accompanied her to the
barangay captain in Dagupan City. Plaintiff, her lawyer, her godmother, and a
barangay tanod sent by the barangay captain went to talk to defendant to still
convince him to marry plaintiff, but defendant insisted that he could not do so because
he was already married to a girl in Bacolod City, although the truth, as stipulated by the
parties at the pre-trial, is that defendant is still single.
Plaintiff's father, a tricycle driver, also claimed that after defendant had informed them
of his desire to marry Marilou, he already looked for sponsors for the wedding, started
preparing for the reception by looking for pigs and chickens, and even already invited
many relatives and friends to the forthcoming wedding. 8
Petitioner appealed the trial court's decision to the respondent Court of Appeals which
docketed the case as CA-G.R. CV No. 24256. In his Brief, 9 he contended that the trial
court erred (a) in not dismissing the case for lack of factual and legal basis and (b) in
ordering him to pay moral damages, attorney's fees, litigation expenses and costs.
On 18 February 1991, respondent Court promulgated the challenged
decision 10 affirming in toto the trial court's ruling of 16 October 1989. In sustaining the
trial court's findings of fact, respondent Court made the following analysis:
First of all, plaintiff, then only 21 years old when she met defendant who was already 29
years old at the time, does not appear to be a girl of loose morals. It is uncontradicted
that she was a virgin prior to her unfortunate experience with defendant and never had
boyfriend. She is, as described by the lower court, a barrio lass "not used and
accustomed to trend of modern urban life", and certainly would (sic) not have allowed
"herself to be deflowered by the defendant if there was no persuasive promise made by
the defendant to marry her." In fact, we agree with the lower court that plaintiff and
defendant must have been sweethearts or so the plaintiff must have thought because
of the deception of defendant, for otherwise, she would not have allowed herself to be
photographed with defendant in public in so (sic) loving and tender poses as those
depicted in the pictures Exhs. "D" and "E". We cannot believe, therefore, defendant's
pretense that plaintiff was a nobody to him except a waitress at the restaurant where
he usually ate. Defendant in fact admitted that he went to plaintiff's hometown of
Bañaga, Bugallon, Pangasinan, at least thrice; at (sic) the town fiesta on February 27,
1987 (p. 54, tsn May 18, 1988), at (sic) a beach party together with the manager and
employees of the Mabuhay Luncheonette on March 3, 1987 (p. 50, tsn id.), and on April
1, 1987 when he allegedly talked to plaintiff's mother who told him to marry her
daughter (pp. 55-56, tsn id.). Would defendant have left Dagupan City where he was
involved in the serious study of medicine to go to plaintiff's hometown in Bañaga,
Bugallon, unless there was (sic) some kind of special relationship between them? And
this special relationship must indeed have led to defendant's insincere proposal of
marriage to plaintiff, communicated not only to her but also to her parents, and (sic)
Marites Rabino, the owner of the restaurant where plaintiff was working and where
defendant first proposed marriage to her, also knew of this love affair and defendant's
proposal of marriage to plaintiff, which she declared was the reason why plaintiff
resigned from her job at the restaurant after she had accepted defendant's proposal
(pp. 6-7, tsn March 7, 1988).
Upon the other hand, appellant does not appear to be a man of good moral character
and must think so low and have so little respect and regard for Filipino women that he
openly admitted that when he studied in Bacolod City for several years where he
finished his B.S. Biology before he came to Dagupan City to study medicine, he had a
common-law wife in Bacolod City. In other words, he also lived with another woman in
Bacolod City but did not marry that woman, just like what he did to plaintiff. It is not
surprising, then, that he felt so little compunction or remorse in pretending to love and
promising to marry plaintiff, a young, innocent, trustful country girl, in order to satisfy his
lust on her. 11
and then concluded:
In sum, we are strongly convinced and so hold that it was defendant-appellant's
fraudulent and deceptive protestations of love for and promise to marry plaintiff that
made her surrender her virtue and womanhood to him and to live with him on the
honest and sincere belief that he would keep said promise, and it was likewise these
(sic) fraud and deception on appellant's part that made plaintiff's parents agree to their
daughter's living-in with him preparatory to their supposed marriage. And as these acts
of appellant are palpably and undoubtedly against morals, good customs, and public
policy, and are even gravely and deeply derogatory and insulting to our women,
coming as they do from a foreigner who has been enjoying the hospitality of our people
and taking advantage of the opportunity to study in one of our institutions of learning,
defendant-appellant should indeed be made, under Art. 21 of the Civil Code of the
Philippines, to compensate for the moral damages and injury that he had caused
plaintiff, as the lower court ordered him to do in its decision in this case. 12
Unfazed by his second defeat, petitioner filed the instant petition on 26 March 1991; he
raises therein the single issue of whether or not Article 21 of the Civil Code applies to the
case at bar. 13
It is petitioner's thesis that said Article 21 is not applicable because he had not
committed any moral wrong or injury or violated any good custom or public policy; he
has not professed love or proposed marriage to the private respondent; and he has
never maltreated her. He criticizes the trial court for liberally invoking Filipino customs,
traditions and culture, and ignoring the fact that since he is a foreigner, he is not
conversant with such Filipino customs, traditions and culture. As an Iranian Moslem, he is
not familiar with Catholic and Christian ways. He stresses that even if he had made a
promise to marry, the subsequent failure to fulfill the same is excusable or tolerable
because of his Moslem upbringing; he then alludes to the Muslim Code which
purportedly allows a Muslim to take four (4) wives and concludes that on the basis
thereof, the trial court erred in ruling that he does not posses good moral character.
Moreover, his controversial "common law life" is now his legal wife as their marriage had
been solemnized in civil ceremonies in the Iranian Embassy. As to his unlawful
cohabitation with the private respondent, petitioner claims that even if responsibility
could be pinned on him for the live-in relationship, the private respondent should also
be faulted for consenting to an illicit arrangement. Finally, petitioner asseverates that
even if it was to be assumed arguendo that he had professed his love to the private
respondent and had also promised to marry her, such acts would not be actionable in
view of the special circumstances of the case. The mere breach of promise is not
actionable. 14
On 26 August 1991, after the private respondent had filed her Comment to the petition
and the petitioner had filed his Reply thereto, this Court gave due course to the petition
and required the parties to submit their respective Memoranda, which they
subsequently complied with.
As may be gleaned from the foregoing summation of the petitioner's arguments in
support of his thesis, it is clear that questions of fact, which boil down to the issue of the
credibility of witnesses, are also raised. It is the rule in this jurisdiction that appellate
courts will not disturb the trial court's findings as to the credibility of witnesses, the latter
court having heard the witnesses and having had the opportunity to observe closely
their deportment and manner of testifying, unless the trial court had plainly overlooked
facts of substance or value which, if considered, might affect the result of the case. 15
Petitioner has miserably failed to convince Us that both the appellate and trial courts
had overlooked any fact of substance or values which could alter the result of the case.
Equally settled is the rule that only questions of law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court. It is not the function of this Court to
analyze or weigh all over again the evidence introduced by the parties before the
lower court. There are, however, recognized exceptions to this rule. Thus, inMedina
vs. Asistio, Jr., 16 this Court took the time, again, to enumerate these exceptions:
xxx xxx xxx
(1) When the conclusion is a finding grounded entirely on speculation, surmises or
conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When the inference made is
manifestly mistaken, absurb or impossible (Luna v. Linatok, 74 Phil. 15 [1942]); (3) Where
there is a grave abuse of discretion (Buyco v. People, 95 Phil. 453 [1955]); (4) When the
judgment is based on a misapprehension of facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are conflicting (Casica v. Villaseca,
L-9590 Ap. 30, 1957; unrep.) (6) When the Court of Appeals, in making its findings, went
beyond the issues of the case and the same is contrary to the admissions of both
appellate and appellee (Evangelista v. Alto Surety and Insurance Co., 103 Phil. 401
[1958]);
(7) The findings of the Court of Appeals are contrary to those of the trial court (Garcia v.
Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA 593 [1986]);
(8) When the findings of fact are conclusions without citation of specific evidence on
which they are based (Ibid.,); (9) When the facts set forth in the petition as well as in the
petitioners main and reply briefs are not disputed by the respondents (Ibid.,); and (10)
The finding of fact of the Court of Appeals is premised on the supposed absence of
evidence and is contradicted by the evidence on record (Salazar v. Gutierrez, 33 SCRA
242 [1970]).
Petitioner has not endeavored to joint out to Us the existence of any of the above
quoted exceptions in this case. Consequently, the factual findings of the trial and
appellate courts must be respected.
And now to the legal issue.
The existing rule is that a breach of promise to marry per se is not an actionable
wrong. 17 Congress deliberately eliminated from the draft of the New Civil Code the
provisions that would have made it so. The reason therefor is set forth in the report of the
Senate Committees on the Proposed Civil Code, from which We quote:
The elimination of this chapter is proposed. That breach of promise to marry is not
actionable has been definitely decided in the case of De Jesus vs. Syquia. 18 The history
of breach of promise suits in the United States and in England has shown that no other
action lends itself more readily to abuse by designing women and unscrupulous men. It
is this experience which has led to the abolition of rights of action in the so-called Heart
Balm suits in many of the American states. . . . 19
This notwithstanding, the said Code contains a provision, Article 21, which is designed to
expand the concept of torts or quasi-delict in this jurisdiction by granting adequate
legal remedy for the untold number of moral wrongs which is impossible for human
foresight to specifically enumerate and punish in the statute books. 20
As the Code Commission itself stated in its Report:
But the Code Commission had gone farther than the sphere of wrongs defined or
determined by positive law. Fully sensible that there are countless gaps in the statutes,
which leave so many victims of moral wrongs helpless, even though they have actually
suffered material and moral injury, the Commission has deemed it necessary, in the
interest of justice, to incorporate in the proposed Civil Code the following rule:
Art. 23. Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.
An example will illustrate the purview of the foregoing norm: "A" seduces the nineteen-
year old daughter of "X". A promise of marriage either has not been made, or can not
be proved. The girl becomes pregnant. Under the present laws, there is no crime, as the
girl is above nineteen years of age. Neither can any civil action for breach of promise of
marriage be filed. Therefore, though the grievous moral wrong has been committed,
and though the girl and family have suffered incalculable moral damage, she and her
parents cannot bring action for damages. But under the proposed article, she and her
parents would have such a right of action.
Thus at one stroke, the legislator, if the forgoing rule is approved, would vouchsafe
adequate legal remedy for that untold number of moral wrongs which it is impossible for
human foresight to provide for specifically in the statutes. 21
Article 2176 of the Civil Code, which defines a quasi-delict thus:
Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is
no pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
is limited to negligent acts or omissions and excludes the notion of willfulness or
intent. Quasi-delict, known in Spanish legal treatises as culpa aquiliana, is a civil law
concept while torts is an Anglo-American or common law concept. Torts is much
broader than culpa aquiliana because it includes not only negligence, but international
criminal acts as well such as assault and battery, false imprisonment and deceit. In the
general scheme of the Philippine legal system envisioned by the Commission responsible
for drafting the New Civil Code, intentional and malicious acts, with certain exceptions,
are to be governed by the Revised Penal Code while negligent acts or omissions are to
be covered by Article 2176 of the Civil Code. 22 In between these opposite spectrums
are injurious acts which, in the absence of Article 21, would have been beyond redress.
Thus, Article 21 fills that vacuum. It is even postulated that together with Articles 19 and
20 of the Civil Code, Article 21 has greatly broadened the scope of the law on civil
wrongs; it has become much more supple and adaptable than the Anglo-American
law on torts. 23
In the light of the above laudable purpose of Article 21, We are of the opinion, and so
hold, that where a man's promise to marry is in fact the proximate cause of the
acceptance of his love by a woman and his representation to fulfill that promise
thereafter becomes the proximate cause of the giving of herself unto him in a sexual
congress, proof that he had, in reality, no intention of marrying her and that the promise
was only a subtle scheme or deceptive device to entice or inveigle her to accept him
and to obtain her consent to the sexual act, could justify the award of damages
pursuant to Article 21 not because of such promise to marry but because of the fraud
and deceit behind it and the willful injury to her honor and reputation which followed
thereafter. It is essential, however, that such injury should have been committed in a
manner contrary to morals, good customs or public policy.
In the instant case, respondent Court found that it was the petitioner's "fraudulent and
deceptive protestations of love for and promise to marry plaintiff that made her
surrender her virtue and womanhood to him and to live with him on the honest and
sincere belief that he would keep said promise, and it was likewise these fraud and
deception on appellant's part that made plaintiff's parents agree to their daughter's
living-in with him preparatory to their supposed marriage." 24 In short, the private
respondent surrendered her virginity, the cherished possession of every single Filipina,
not because of lust but because of moral seduction — the kind illustrated by the Code
Commission in its example earlier adverted to. The petitioner could not be held liable for
criminal seduction punished under either Article 337 or Article 338 of the Revised Penal
Code because the private respondent was above eighteen (18) years of age at the
time of the seduction.
Prior decisions of this Court clearly suggest that Article 21 may be applied in a breach of
promise to marry where the woman is a victim of moral seduction. Thus, in Hermosisima
vs. Court of Appeals, 25 this Court denied recovery of damages to the woman because:
. . . we find ourselves unable to say that petitioner is morally guilty of seduction, not only
because he is approximately ten (10) years younger than the complainant — who was
around thirty-six (36) years of age, and as highly enlightened as a former high school
teacher and a life insurance agent are supposed to be — when she became intimate
with petitioner, then a mere apprentice pilot, but, also, because the court of first
instance found that, complainant "surrendered herself" to petitioner because,
"overwhelmed by her love" for him, she "wanted to bind" him by having a fruit of their
engagement even before they had the benefit of clergy.
In Tanjanco vs. Court of Appeals, 26 while this Court likewise hinted at possible recovery if
there had been moral seduction, recovery was eventually denied because We were
not convinced that such seduction existed. The following enlightening disquisition and
conclusion were made in the said case:
The Court of Appeals seem to have overlooked that the example set forth in the Code
Commission's memorandum refers to a tort upon a minor who had been seduced. The
essential feature is seduction, that in law is more than mere sexual intercourse, or a
breach of a promise of marriage; it connotes essentially the idea of deceit, enticement,
superior power or abuse of confidence on the part of the seducer to which the woman
has yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra) that —
To constitute seduction there must in all cases be some sufficient promise or
inducement and the woman must yield because of the promise or other inducement. If
she consents merely from carnal lust and the intercourse is from mutual desire, there is
no seduction (43 Cent. Dig. tit. Seduction, par. 56) She must be induced to depart from
the path of virtue by the use of some species of arts, persuasions and wiles, which are
calculated to have and do have that effect, and which result in her person to ultimately
submitting her person to the sexual embraces of her seducer (27 Phil. 123).
And in American Jurisprudence we find:
On the other hand, in an action by the woman, the enticement, persuasion or
deception is the essence of the injury; and a mere proof of intercourse is insufficient to
warrant a recovery.
Accordingly it is not seduction where the willingness arises out of sexual desire of
curiosity of the female, and the defendant merely affords her the needed opportunity
for the commission of the act. It has been emphasized that to allow a recovery in all
such cases would tend to the demoralization of the female sex, and would be a reward
for unchastity by which a class of adventuresses would be swift to profit. (47 Am. Jur.
662)
xxx xxx xxx
Over and above the partisan allegations, the fact stand out that for one whole year,
from 1958 to 1959, the plaintiff-appellee, a woman of adult age, maintain intimate
sexual relations with appellant, with repeated acts of intercourse. Such conduct is
incompatible with the idea of seduction. Plainly there is here voluntariness and mutual
passion; for had the appellant been deceived, had she surrendered exclusively
because of the deceit, artful persuasions and wiles of the defendant, she would not
have again yielded to his embraces, much less for one year, without exacting early
fulfillment of the alleged promises of marriage, and would have cut short all sexual
relations upon finding that defendant did not intend to fulfill his defendant did not
intend to fulfill his promise. Hence, we conclude that no case is made under article 21 of
the Civil Code, and no other cause of action being alleged, no error was committed by
the Court of First Instance in dismissing the complaint. 27
In his annotations on the Civil Code, 28 Associate Justice Edgardo L. Paras, who recently
retired from this Court, opined that in a breach of promise to marry where there had
been carnal knowledge, moral damages may be recovered:
. . . if there be criminal or moral seduction, but not if the intercourse was due to mutual
lust. (Hermosisima vs. Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733, Sept. 30, 1960; Batarra vs. Marcos,
7 Phil. 56 (sic); Beatriz Galang vs. Court of Appeals, et al., L-17248, Jan. 29, 1962). (In
other words, if the CAUSE be the promise to marry, and the EFFECT be the carnal
knowledge, there is a chance that there was criminal or moral seduction, hence
recovery of moral damages will prosper. If it be the other way around, there can be no
recovery of moral damages, because here mutual lust has intervened). . . .
together with "ACTUAL damages, should there be any, such as the expenses for the
wedding presentations (See Domalagon v. Bolifer, 33 Phil. 471).
Senator Arturo M. Tolentino 29 is also of the same persuasion:
It is submitted that the rule in Batarra vs. Marcos, 30 still subsists, notwithstanding the
incorporation of the present article 31 in the Code. The example given by the Code
Commission is correct, if there wasseduction, not necessarily in the legal sense, but in
the vulgar sense of deception. But when the sexual act is accomplished without any
deceit or qualifying circumstance of abuse of authority or influence, but the woman,
already of age, has knowingly given herself to a man, it cannot be said that there is an
injury which can be the basis for indemnity.
But so long as there is fraud, which is characterized by willfulness (sic), the action lies. The
court, however, must weigh the degree of fraud, if it is sufficient to deceive the woman
under the circumstances, because an act which would deceive a girl sixteen years of
age may not constitute deceit as to an experienced woman thirty years of age. But so
long as there is a wrongful act and a resulting injury, there should be civil liability, even if
the act is not punishable under the criminal law and there should have been an
acquittal or dismissal of the criminal case for that reason.
We are unable to agree with the petitioner's alternative proposition to the effect that
granting, for argument's sake, that he did promise to marry the private respondent, the
latter is nevertheless also at fault. According to him, both parties are in pari delicto;
hence, pursuant to Article 1412(1) of the Civil Code and the doctrine laid down
in Batarra vs. Marcos, 32 the private respondent cannot recover damages from the
petitioner. The latter even goes as far as stating that if the private respondent had
"sustained any injury or damage in their relationship, it is primarily because of her own
doing, 33 for:
. . . She is also interested in the petitioner as the latter will become a doctor sooner or
later. Take notice that she is a plain high school graduate and a mere employee . . .
(Annex "C") or a waitress (TSN, p. 51, January 25, 1988) in a luncheonette and without
doubt, is in need of a man who can give her economic security. Her family is in dire
need of financial assistance. (TSN, pp. 51-53, May 18, 1988). And this predicament
prompted her to accept a proposition that may have been offered by the petitioner. 34
These statements reveal the true character and motive of the petitioner. It is clear that
he harbors a condescending, if not sarcastic, regard for the private respondent on
account of the latter's ignoble birth, inferior educational background, poverty and, as
perceived by him, dishonorable employment. Obviously then, from the very beginning,
he was not at all moved by good faith and an honest motive. Marrying with a woman
so circumstances could not have even remotely occurred to him. Thus, his profession of
love and promise to marry were empty words directly intended to fool, dupe, entice,
beguile and deceive the poor woman into believing that indeed, he loved her and
would want her to be his life's partner. His was nothing but pure lust which he wanted
satisfied by a Filipina who honestly believed that by accepting his proffer of love and
proposal of marriage, she would be able to enjoy a life of ease and security. Petitioner
clearly violated the Filipino's concept of morality and brazenly defied the traditional
respect Filipinos have for their women. It can even be said that the petitioner
committed such deplorable acts in blatant disregard of Article 19 of the Civil Code
which directs every person to act with justice, give everyone his due and observe
honesty and good faith in the exercise of his rights and in the performance of his
obligations.
No foreigner must be allowed to make a mockery of our laws, customs and traditions.
The pari delicto rule does not apply in this case for while indeed, the private respondent
may not have been impelled by the purest of intentions, she eventually submitted to the
petitioner in sexual congress not out of lust, but because of moral seduction. In fact, it is
apparent that she had qualms of conscience about the entire episode for as soon as
she found out that the petitioner was not going to marry her after all, she left him. She is
not, therefore, in pari delicto with the petitioner. Pari delicto means "in equal fault; in a
similar offense or crime; equal in guilt or in legal fault." 35 At most, it could be conceded
that she is merely in delicto.
Equity often interferes for the relief of the less guilty of the parties, where his transgression
has been brought about by the imposition of undue influence of the party on whom the
burden of the original wrong principally rests, or where his consent to the transaction
was itself procured by
fraud. 36
In Mangayao vs. Lasud, 37 We declared:
Appellants likewise stress that both parties being at fault, there should be no action by
one against the other (Art. 1412, New Civil Code). This rule, however, has been
interpreted as applicable only where the fault on both sides is, more or less, equivalent.
It does not apply where one party is literate or intelligent and the other one is not. (c.f.
Bough vs. Cantiveros, 40 Phil. 209).

We should stress, however, that while We find for the private respondent, let it not be
said that this Court condones the deplorable behavior of her parents in letting her and
the petitioner stay together in the same room in their house after giving approval to their
marriage. It is the solemn duty of parents to protect the honor of their daughters and
infuse upon them the higher values of morality and dignity.

WHEREFORE, finding no reversible error in the challenged decision, the instant petition is
hereby DENIED, with costs against the petitioner.
[Trespass]
G.Q. GARMENTS, INC., G.R. No. 161722
Petitioner,
Present:
PANGANIBAN, C.J., Chairperson,
YNARES-SANTIAGO,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.
ANGEL MIRANDA,
FLORENDA MIRANDA and Promulgated:
EXECUTIVE MACHINERIES
And EQUIPMENT
CORPORATION, July 20, 2006
Respondents.
x-----------------------------------------------------------------------------------------x
DECISION
CALLEJO, SR., J.:
Before the Court is a Petition for Review on Certiorari for the reversal of the Decision[1] of
the Court of Appeals (CA) in CA-G.R. CV No. 45567, as well as its Resolution[2] denying
the motion for reconsideration thereof.
Angel Miranda is the registered owner of a 9,646 square meters parcel of land
located at Niog, Bacoor, Cavite (Property). The property was covered by Transfer
Certificate of Title (TCT) No. T-60679[3] of the Registry of Deeds of Cavite.
In 1984, Angelito Miranda, the son of Angel Miranda, established the Executive
Machineries and Equipment Corporation (EMECO), a domestic corporation engaged
primarily in the manufacture and fabrication of rubber rollers. Angelito owned 80% of
the stocks of the corporation, while his wife Florenda owned 10%. That year, Angel
entered into a verbal contract of lease over the Property with EMECO, and allowed it to
build a factory thereon. The agreement was on a month-to-month basis, at the rate of
P8,000 per month. EMECO constructed its factory on the property. At the outset, EMECO
paid the monthly rentals. However, after Angelito died on June 21, 1988, EMECO failed
to pay the rentals but still continued possessing the leased premises.
On November 19, 1989, the factory of EMECO was totally razed by fire. In a
letter to EMECO dated June 3, 1991, Angel demanded the payment of accrued rentals
in the amount of P280,000.00 as of May 1991. EMECO was also informed that the oral
contract of lease would be terminated effective June 30, 1991. However, EMECO failed
to pay the accrued rentals and to vacate the property. Another demand letter dated
September 27, 1991 was sent to EMECO. It vacated the leased premises, but the
accrued rentals remained unpaid.
Sometime in November 1991, Florenda arrived at the office of petitioner and
offered to sublease the property to Wilson Kho, the Officer-in Charge of the corporation.
Florenda showed Kho a purported copy of a contract of lease[4] over the said property
allegedly executed by Angel in favor of EMECO. After visiting and viewing the property,
Kho agreed to rent the area upon the condition that its true and registered owner
would personally sign the lease contract in his presence. When Florenda failed to
present Angel for said purpose, Kho turned down her proposal.
Later, Kho was able to locate Angel at Noveleta, Cavite and offered, in behalf
of petitioner, to lease the property, as to which Angel agreed. On December 23, 1991,
Angel and the corporation, represented by its Executive Vice-President, Davy John
Barlin, executed a contract of lease[5] over the subject property. The lease was for a
period of 15 years, commencing on February 1, 1992 until January 31, 2007 for a monthly
rental of P30,000.00. Petitioner paid P90,000.00 representing two months deposit and
advance rental for one month. As lessee, it was authorized to introduce improvements,
structures, and buildings on the property as it may deem necessary and for the purpose
for which it was leased.
Consequently, petitioner secured the following documents: mayors permit, sanitary
permit, business sticker, and an application for municipal license. Thereafter, it moved
into the property with its equipment, machinery, appliances, supplies, and other
construction materials. The construction of a building and factory in the leased premises
commenced.
However, on January 27, 1992, Florenda, together with several armed men
who identified themselves as policemen, forcibly evicted petitioner from the leased
premises, claiming that she was the owner and that the place was already covered by
another existing contract of lease. During the encounter, Florenda and her men took
some equipment, machinery and other properties belonging to petitioner, thereby
causing loss and damage to said properties.
In the meantime, Angel secured a copy of the purported contract of lease he
allegedly executed in favor of EMECO. On March 12, 1992, he forthwith filed a
complaint for declaration of nullity of the contract of lease before the Regional Trial
Court (RTC) of Makati, Branch 66, docketed as Civil Case No. 92-699. Angel alleged
therein that his signature as lessor in the purported contract was a forgery. He prayed
that judgment be rendered in his favor declaring the said contract null and void.
Meanwhile, petitioner sought the help of the Philippine National Police (PNP).
General Gerardo N. Flores, Deputy Director General and Chief Directorial Staff, issued a
Memorandum[6] to Superintendent Wenceslao A. Soberano, Provincial Director of the
Cavite PNP Provincial Command, ordering the latter to prevent his men from interfering
with the pending civil case. Petitioner subsequently regained possession over the leased
premises. However, Florenda and her group were undaunted. They went back to the
place and ousted the guards and other personnel manning the corporations office,
and even removed their equipment, and ransacked anew their raw materials, electric
wire and other valuables inside.
On April 20, 1992, petitioner instituted an action for damages and recovery of
possession of the property before the RTC of Cavite City, Branch 17, with Angel, EMECO
and Florenda, as alternative defendants. The case was docketed as Civil Case No. N-
5573. The corporation alleged the following in its complaint:
VI
That on December 23, 1991, Plaintiff leased from Alternative Defendant ANGEL
MIRANDA the premises just adverted to, for a period of FIFTEEN (15) years, commencing
on February 1, 1992 and to expire on January 31, 2007, as evidenced by the Contract of
Lease x x x ;
VII
 That by the terms of said lease agreement, Plaintiff was to pay to Alternative
ANGEL MIRANDA rentals in the sum of THIRTY THOUSAND PESOS (P30,000) per month,
with SIXTY THOUSAND PESOS (P60,000) as deposit, and THIRTY THOUSAND PESOS (P30,000)
as advance rental, all of which were complied with by Plaintiff;
VIII
That in accordance with the same agreement, Plaintiff was authorized to
introduce into the premises such improvements as it may find necessary;
IX
That Plaintiff took possession of the leased premises and moved thereto its equipments
(sic), machineries, appliances, supplies and kindred items, as well as certain
construction materials necessary for the repairs and improvement of the facilities
therein; that, as a matter of fact, Plaintiff had already commenced the construction of
roofs over the concrete structures in the leased premises;
X 4. That either Defendant, or all of them, be condemned to pay attorneys fees
That, furthermore, Plaintiff secured from the proper authorities all the needful licenses
and permits for its construction and business activities;
XI
That on January 27, 1992, Alternative Defendant FLORENDA MIRANDA, in her behalf and
in representation of Alternative Defendant EMECO, and in the company of armed men,
forcibly evicted Plaintiff from the premises, not only stopping the construction works
being performed in the premises, but also physically bringing out Plaintiffs equipment,
machineries, and other personalities (sic) of the leased realty;
XII
That the Alternative Defendants just named did the acts just described under the claim
that the premises are either owned by Alternative Defendant FLORENDA MIRANDA or
that the same are covered by [a] still existing lease agreement by and between
Alternative Defendants, the latter claim being evidenced by the Contract of Lease x x x;
XIII
That regardless of the validity of either claim on the part of Alternative Defendants
FLORENDA MIRANDA and EMECO, the same cannot be pleaded in derogation of
Plaintiffs possessory rights over the premises, for the reason that the realty in question is
covered by a torrens certificate in the name of Alternative Defendant ANGEL MIRANDA
on which document third parties have a legally-authorized right to rely (in the first
instance), and that in order to evict Plaintiff from the premises, proper ejectment
proceedings would have to be instituted (in the second instance);
XIV
That under the law, Alternative Defendant ANGEL MIRANDA has the obligation to keep
and maintain Plaintiff in peaceful possession of the leased premises, which obligation
said defendant failed to observe and discharge;
XV
That as a result of the forcible eviction of Plaintiff from the leased property, it suffered
damages not only in terms of destruction and/or impairment of its machineries,
equipments (sic), appliances, personalities, supplies and materials, but also in terms of
lost profits and business opportunities, besmirched reputation, administrative cost
overruns, tarnished goodwill and impairment of credit facilities, the total pecuniary
value of which amounts to not less than TWO MILLION PESOS (P2,000,000);[7]
It prayed that, after due proceedings, judgment be rendered in its favor, as
follows:
1. That upon due notice and hearing, a writ of preliminary mandatory
injunction issue, restoring Plaintiff to the possession of the premises in question;
2. That after trial, judgment issue directing Alternative Defendants, singly or
collectively, and any person or persons claiming right under them to surrender
possession of the leased premises to Plaintiff;
3. That either Defendant, or all of them, be condemned to pay to Plaintiff the
sum of TWO MILLION PESOS (P2,000,000) by way of actual, compensatory, and moral
damages;
and litigation expenses in the sum earlier set forth; and
5, That either Defendant, or all of them, be condemned to pay the costs of this
suit;
6. OTHER RELIEFS and remedies as are just and equitable under the premises
are likewise prayed for.[8]
On June 25, 1992, Angel and petitioner, as plaintiffs, filed a separate complaint for
ejectment against Florenda before the Municipal Trial Court (MTC) of Bacoor, Cavite,
docketed as Civil Case No. 1265. After due proceedings, the court rendered judgment
on July 2, 1993, ordering the eviction of Florenda and all those claiming the property in
her behalf. The decision was appealed to the RTC. However, for failure to pay a
supersedeas bond, the decision was executed and Florenda was evicted from the
property.
On November 26, 1993, the RTC rendered judgment in Civil Case No. N-5573,
dismissing the complaint against all the alternative defendants without prejudice. It
declared that plaintiff was entitled to damages, but it had to dismiss the complaint
because of the pendency of Civil Case Nos. 92-699 and 92-1265.[9]
However, the RTC resolved to deny the motion of petitioner prompting it to appeal to
the Court of Appeals. Angel Miranda also appealed the decision, which was docketed
as CA-G.R. CV No. 45567.
Meantime, on September 22, 1994, the RTC rendered judgment in Civil Case No. 92-699
in favor of Angel and declared the contract of lease purportedly executed by him and
EMECO void.
In its Brief as appellant in CA-G.R. CV No. 45567, petitioner alleged that:
THE LOWER COURT GRIEVOUSLY ERRED IN FAILING TO AWARD DAMAGES IN
FAVOR OF PLAINTIFF BY DISMISSING THE CASE DESPITE ITS CLEAR FACTUAL FINDINGS THAT
THE LATTER IS ENTITLED TO DAMAGES PRAYED FOR IN THE COMPLAINT.

I of the New Civil Code extends only to non-disturbance of legal possession and not of
THE DISMISSAL OF THE COMPLAINT ON THE GROUND OF LITIS PENDENTIA IS DEVOID OF
ANY FACTUAL AND LEGAL BASIS.
II
IN THE SAME VEIN, THE AWARD OF DAMAGES IN THE PRESENT CASE WOULD NOT PRE-
EMPT ANY DECISION THAT MIGHT BE RENDERED IN THE PENDING CASES.[10]
It maintained that the trial court erred in dismissing its complaint on the ground of litis
pendentia and in not ordering Angel Miranda to reimburse the P360,000.00 it had paid
as rentals for the property.
For his part, Angel averred that the trial court should have dismissed the complaint
against him with prejudice for the reason that there is no allegation in the complaint
that he participated, directly or indirectly, in the forcible ejectment of petitioner from
the property, and in the looting and taking of its properties.[11] He insisted that it was
Florenda who forcibly evicted the corporation and took its properties. Thus, he cannot
be held responsible for the tortious and wrongful acts of third persons, as there is no law
to that effect. Under Article 1664 of the New Civil Code, he is not obliged to answer for
a mere act of trespass, and the lessee has a direct action against the intruder. He
pointed out that the law unconditionally and unequivocally absolves the lessor from any
liability arising from an act of trespass by a third person. The duty to maintain the lessee
in the peaceful and adequate enjoyment of the lease for the duration of the contract is
merely a warranty by the lessor that the lessee shall not be disturbed in his legal, not
physical, possession.
On October 29, 2002, the CA rendered judgment reversing the decision of the RTC. The
fallo reads:
WHEREFORE, the judgment appealed from is hereby REVERSED and SET ASIDE and a
new one entered dismissing the complaint with prejudice against Angel Miranda and
ordering Florenda Miranda to pay G.Q. Garments, Inc. the amount of:
1. P300,000.00 as and for nominal damages;
2. P200,000.00 as and for attorneys fees; and
3. To pay the costs of suit.
SO ORDERED.[12]
The appellate court absolved Angel of any liability due to the absence of evidence
showing that he had participated, directly or indirectly, in the looting of GQ Garments
properties and in forcibly ejecting the latter from the premises in question. While under
Article 1654, paragraph 3, of the New Civil Code, a lessor is obliged to maintain the
lessee in peaceful and adequate enjoyment of the lease for the entire duration of the
contract, the law, however, does not apply to him since the unlawful acts were caused
by a third person or an intruder. Under Article 1664, he is not obliged to answer for a
mere act of trespass which a third person may cause on the use of the thing leased, but
the lessee shall have a direct action against the intruder.
Moreover, the appellate court declared that the warranty of a lessor under Article 1654
physical possession. As ruled in the case of Bohol, Sr. v. Torres,[13] the duty to maintain
the lessee in the peaceful and adequate enjoyment of the lease for the duration of the
contract is merely a warranty that the lessee shall not be disturbed in his legal, not
physical possession. According to the CA, the evidence on record clearly showed that
Florenda disturbed only the physical possession of the leased premises, and not legal
possession. Thus, the complaint with respect to Angel Miranda should be dismissed with
prejudice for lack of cause of action.[14]
Petitioner moved to have the decision reconsidered on the following grounds:
I
THE HONORABLE COURT ERRONEOUSLY HELD THAT THE LOSS OF THE ARTICLES VALUED AT
P9,960,000.00 WAS NOT PROVED BY EVIDENCE.
II
THE HONORABLE COURT ERRED IN NOT FINDING DEFENDANT-APPELLANT ANGEL
MIRANDA LIABLE TO HEREIN PLAINTIFF-APPELLANT.[15]
Petitioner filed a motion for the reconsideration of the decision,[16] claiming that it
adduced proof that it sustained actual damages. It claimed that Angel was liable for
damages against it for disturbance in law. It was not just a mere act of trespass, since
Florenda claimed to have a prior contract of lease with Angel and by virtue of a
supposedly legal judicial order, Florenda questioned its (GQ Garments) right to enjoy
the property and deprived it of possession thereof. Besides, Angel filed an ejectment suit
and an action for the nullity of the contract of lease against Florenda only after it was
dispossessed of the subject property.[17]
Petitioner averred that Angel was liable for damages under Article 1654(3) of the New
Civil Code, under which, as lessor, he was obliged to maintain the lessee in the peaceful
and adequate enjoyment of the lease for the entire duration of the contract. It likewise
cited De la Cruz vs. Seminary of Manila[18] where it was ruled that in case of legal
disturbance, the lessor is liable for whatever the lessee has lost by virtue of the breach of
the contract and that it is the duty of the lessor to place the lessee in legal possession of
the premises and to maintain him in the peaceful possession of the property during the
lifetime of the lease. It insisted that the lessor who fails in the performance of such
obligation must indemnify the lessee for the damages occasioned thereby, the true
measure of damages being the actual loss to the lessee arising from the breach of the
contract on the part of the lessor.
Petitioner averred that it complied fully with its contract of lease and had paid
Angel two (2) months deposit in the amount of P60,000.00; one (1) month advance
rental of P30,000.00 and nine (9) months advance deposit in the amount of P270,000.00
or the total sum of P360,000.00.
On cross-examination, Angel admitted that he received P360,000.00 from petitioner. The
plaintiff asserted that, in the interest of justice and fairness, the trial court should order
the defendant to reimburse the actual damages it suffered and return the amounts of
rentals and deposits received, considering that it failed to enjoy the leased premises. To
rule otherwise, according to GQ Garments, would be to sanction the unjust enrichment
of one at the expense of another.[19]

The CA denied the motion.
Petitioner filed the instant petition for review on certiorari on the following issues:
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED A MANIFEST ERROR
IN AWARDING DAMAGES TO THE PETITIONER WAY BELOW THAT PRAYED FOR IN THE
COMPLAINT, THUS, TOTALLY DISREGARDING THE EVIDENCE ON RECORD.
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT
FINDING THAT RESPONDENT ANGEL MIRANDA SHOULD LIKEWISE BE HELD LIABLE FOR
DAMAGES TO THE PETITIONER.[20]
Petitioner asserts that it adduced preponderant evidence that it sustained actual
damages when its equipment and machineries were destroyed, and that such
damaged property is valued at P10,000,000.00. It points out that aside from respondent
Florenda Mirandas testimony, it also adduced in evidence photographs of the
damaged property. Respondent Angel Miranda failed to adduce any evidence to
rebut the same. Petitioner also avers that the damages it suffered was not merely an
act of trespass but a disturbance in law for which respondent Angel Miranda is liable. He
violated its right, as lessee; hence, he is liable for damages under Article 1654(3) of the
New Civil Code. To buttress its claim, petitioner cites the ruling of this Court in De la Cruz
vs. Seminary of Manila.[21] It insists that respondent Angel Miranda should pay actual
damages of P10,000,000.00 and P360,000.00 it had paid to him by way of
reimbursement, and prays that the Court render judgment as follows:
1. Respondents Florenda Miranda and Angel Miranda to pay petitioner, jointly and
severally, actual damages in the sum of P10,000,000.00;
2. Respondent Florenda Miranda to pay petitioner exemplary damages in the amount
to be determined by the Honorable Court;
3. Respondent Angel Miranda to reimburse petitioner the amount of P360,000.00 plus
interest at 12% per annum from the time the complaint was filed until the same is fully
paid;
4. Respondent Angel Miranda to pay petitioner moral, exemplary, temperate and
nominal damages for breach of his warranty in the Contract of Lease;
5. Respondents to pay attorneys fees and the costs of suit.
Other reliefs just and equitable under the premises are likewise prayed for.[22]
Respondents did not file any comment on the petition, and were thus considered to
have waived their right to do so.
The issues are the following: (1) whether respondents are liable to petitioner for the
amount of P10,000,000.00 by way of actual damages; (2) whether respondent Angel
Miranda is liable to reimburse to petitioner the P360,000.00 paid as rentals.
Petitioner asserts that the P10,000,000.00 in actual damages was specifically alleged in
its complaint and that evidence was adduced to prove the same, consisting of the
testimonies of respondent Florenda Miranda and her witnesses to determine the extent
of petitioners damages.
We agree with the ruling of the appellate court that petitioners claim for actual
damages was not properly substantiated by evidence. The CA correctly ruled as
follows:
Considering the above provisions of the law, there is no question that defendant-
appellee Florenda Miranda and/or EMECO should be held accountable for the
damage sustained by plaintiff-appellant due to their willful and wanton disregard of the
lease rights of plaintiff-appellant over the property in question. However, we find that
the alleged loss of articles, machinery and equipment in the total sum of P9,960,000.00
was not proven by clear and convincing evidence. Other than the bare testimony of
Mr. Wilson Kho and the witnesses he presented, there was no poof as to the existence of
these items prior to the taking over of Florenda over the property in question. The listing
of lost items contained in plaintiff-appellants Exhibits I and I-1 is self-serving considering
that no inventory was made on the said items prior to its delivery to the premises in
question and that no receipt or proof of acquisition of these listed items were presented
during the trial of the case.[23]
Under Article 2199 of the New Civil Code, actual damages include all the
natural and probable consequences of the act or omission complained of, classified as
one (1) for the loss of what a person already possesses (dao emergente) and the other,
for the failure to receive, as a benefit, that which would have pertained to him (lucro
cesante). As expostulated by the Court:
Under Article 2199 of the Civil Code, actual or compensatory damages are
those awarded in satisfaction of, or in recompense for, loss or injury sustained. They
proceed from a sense of natural justice and are designed to repair the wrong that has
been done, to compensate for the injury inflicted and not to impose a penalty. In
actions based on torts or quasi-delicts, actual damages include all the natural and
probable consequences of the act or omission complained of. There are two kinds of
actual or compensatory damages: one is the loss of what a person already possesses,
(dao emergente), and the other is the failure to receive as a benefit that which would
have pertained to him (lucro cesante) (citations omitted).[24]
The burden of proof is on the party who will be defeated if no evidence is presented on
either side. His burden is to establish his case by preponderance of evidence which
means that the evidence, as whole, adduced by one side, is superior to that of the
other. Actual damages are not presumed. The claimant must prove the actual amount
of loss with a reasonable degree of certainty premised upon competent proof and on
the best evidence obtainable. He must point out specific facts that could afford a basis
for measuring whatever compensatory or actual damages are borne. Actual damages
cannot be anchored on mere surmises, speculations or conjectures. As the Court
declared:
 As stated at the outset, to enable an injured party to recover actual or
compensatory damages, he is required to prove the actual amount of loss with
reasonable degree of certainty premised upon competent proof and on the best
evidence available. The burden of proof is on the party who would be defeated if no
evidence would be presented on either side. He must establish his case by a
preponderance of evidence which means that the evidence, as a whole, adduced by
one side is superior to that of the other. In other words, damages cannot be presumed
and courts, in making an award must point out specific facts that could afford a basis
for measuring whatever compensatory or actual damages are borne.[25]
The claimants are not, however, mandated to prove damages in any specific or certain
amount in order to recover damages for a substantial amount.[26] When the existence
of a loss is established, absolute certainty as to its amount is not required.[27] The
amount of the damages should be determined with reasonable certainty. The law does
not require that the amount fixed be absolute or beyond conjectural possibilities. The
ascertainment of the amount of damages should be by the plainest, easiest and most
accurate measure which will do justice in the premises.[28]
The Court further declared that where goods are destroyed by the wrongful acts of the
defendant, the plaintiff is entitled to their value at the time of the destruction, that is
normally, the sum of money which he would have to pay in the market for identical or
essentially similar good plus, in a proper case, damages for the loss of the use during the
period before replacement.[29]
To be entitled to an award of actual damages, it is necessary to prove the precise
amount of the loss with a reasonable degree of certainty, premised upon competent
proof and on the best evidence obtainable by the injured party to justify such
award.[30] The award of actual damages cannot be simply based on the mere
allegation of a witness without any tangible claim, such as receipts or other
documentary proofs to support such claim.[31] Failing to satisfy the court that petitioner
certainly suffered actual damages, its claim must now fail.
In this case, there is no question that, indeed, petitioner sustained damages because its
equipment, machineries, and other valuables were taken, and its building was
destroyed by respondent Florenda Miranda and
her cohorts. Respondent Angel Miranda did not cause the damages sustained by
petitioners property. However, the only evidence adduced by the petitioner to prove
the value of said property is the testimony of Kho, viz.:
ATTY. QUIJANO:
Q You said defendant Miranda looted all your items, machinery and other
valuables inside the premises, do you have a list of those which you claimed to [have]
been lost and stolen from the premises?
MR. KHO:
A We have a partial list of the equipment and materials lost.
ATTY. QUIJANO:
May we request that the list be marked as Exhibits I and I-1, respectively.
WITNESS:
The first page represents the items lost on January 27 and the second page,
items lost in the middle of March up the (sic) of June.
COURT:
Mark it. x x x .
xxx xxx xxx
Q Considering that you have been forcibly evicted from the premises, what did
you do?
A We seek (sic) the services of M .R. Pamaran Law Office.
Q And do you have any arrangement with said office?
A The agreement is P200,000.00 plus P2,000.00 per appearance, damaged
equipment and loss is P10,000,000.00 and the actual items lost is more than
P10,000,000.00 plus construction materials, P11,000,000.00.
COURT:
Q The actual damage is P10,000,000.00?
A P10,000,000.00, including the building x x x.
(TSN dated 10 July 1992, pp. 26-28, bold ours)[32]
No other proof was adduced to establish the value or price of the
equipment, machineries and valuables taken by respondent Florenda Miranda, as well
as the damage to petitioners building. The bare claim of Kho that the petitioner
sustained actual damages in the amount of P10,000,000.00 is utterly insufficient on which
to anchor a judgment for actual damages in the amount of P10,000,000.00; it is
speculative and merely a surmise.
The Court notes that respondent Florenda Miranda admitted, when
she testified, that she and her cohorts caused the damages to the property of the
petitioner:
ATTY. QUIJANO:
Q When you went to the premises in question, you found out that there
were already some construction going on?
MS. MIRANDA:
A Construction? Not construction but there [were] some machineries
inside but not installed.
xxx xxxxxx
Q There [were] purlins and trusses already in the ?
A No, in the latter part only.
xxxxxxxxx
Q You said that you did not throw their equipment but just pulled it out
and transferred it to another lot. How long did it take you to transfer
that?
A The first one it took us one day to be able to pull out or get
outside, I think six or nine machineries and then it was stopped.
Q How did you bring it out?
A By means of forklift.
Q So, you hired a forklift?
A Yes, Sir. In this case, the trespass perpetrated by respondent Florenda Miranda and her
xxxxxxxxx confederates was merely trespass in fact. They forcibly entered the property and
caused damage to the equipment and building of petitioner, because the latter
Q Are all the machineries pulled out? refused to enter into a contract of lease with EMECO over the property upon
A On the first time, it wasnt because it was stopped x x x so it took us respondent Florenda Mirandas failure to present respondent Angel Miranda to sign the
another, I think a month or weeks also before we could hire another contract of lease. It turned out that respondent Florenda Miranda attempted to
trucking firm. hoodwink petitioner and forged respondent Angel Mirandas signature on the contract
of lease she showed to petitioner. It appears that respondent Florenda Miranda tried to
Q You mean this truck was hired by Mr. Kho and not by you? coerce the petitioner into executing a contract of lease with EMECO over the property,
A No, by me. only to be rebuffed by the petitioner.

xxxxxxxxx
Q So, you hired this truck to pull all these machineries out?
A Yes. x x x (TSN dated 11 June 1993, pp. 20-23 before the RTC, Cavite, emphasis
ours)[33]
With this admission, Florenda Miranda is clearly liable for damages to the
equipment, machineries and building of petitioner.
We agree with the ruling of the CA that respondent Angel Miranda is not liable
for damages caused to petitioners property. Article 1654 of the New Civil Code reads:
Art. 1654. The lessor is obliged:
(1) To deliver the thing which is the object of the contract in such a condition
as to render it fit for the use intended;
Petitioner cannot rely on the ruling of this Court in De la Cruz v. Seminary of
Manila,[37] because, in this case, respondent Angel Miranda had the legal power to
place petitioner in the peaceful possession of the property upon the execution of the
contract of lease between him and petitioner; in fact, actual possession of the property
was placed in the hands of petitioner, enabling it to start the construction of its factory.
It bears stressing that respondent Angel Miranda was not content in adopting
a mere passive stance in the face of respondent Florenda Mirandas act of trespass. He
and the petitioner filed a case for forcible entry against Florenda Miranda; he also
succeeded in having the RTC, in Civil Case No. 92-699, declare the contract of lease
which respondent Florenda Miranda showed petitioner as null and void, with the courts
ruling that his signature on the contract was a forgery.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. Cost against the
petitioner.

(2) To make on the same during the lease all the necessary repairs in order to
keep it suitable for the use to which it has been devoted, unless there is a stipulation to
the contrary;

(3) To maintain the less in the peaceful and adequate enjoyment of the lease
for the entire duration of the contract.

Under the provision, a lessor is obliged to maintain petitioners peaceful and

adequate enjoyment of the premises for the entire duration of the lease. In case of
noncompliance with these obligations, the lessee may ask for the rescission of the lease
contract and indemnification for damages or only the latter, allowing the contract to
remain in force.[34]

The trespass referred to in Article 1654, paragraph 3, of the New Civil Code, is
legal trespass or perturbacion de mero derecho. The lessor is not liable for the mere fact
of a trespass or trespass in fact (perturbacion de mero hecho) made by a third person
of the leased property. The lessee shall have a direct action against the trespasser and
not against the lessor. As explained by the Court, if the act of trespass is not
accompanied or preceded by anything which reveals a really juridic intention on the
part of the trespasser, in such wise that the lessee can only distinguish the material fact,
such a trespass is merely a trespass in fact.[35]

The duty of the lessor to maintain the lessee in the peaceful and adequate
enjoyment of the leased property for the entire duration of the contract is merely a
warranty that the lessee shall not be disturbed in having legal and not physical
possession of the property.[36]
[Disconnection of Service]
G.R. No. 142943 April 3, 2002
Spouses ANTONIO and LORNA QUISUMBING, petitioners,
vs.
MANILA ELECTRIC COMPANY (MERALCO), respondent.
PANGANIBAN, J.:
Under the law, the Manila Electric Company (Meralco) may immediately disconnect
electric service on the ground of alleged meter tampering, but only if the discovery of
the cause is personally witnessed and attested to by an officer of the law or by a duly
authorized representative of the Energy Regulatory Board.
The Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the
February 1, 2000 Decision1and the April 10, 2000 Resolution2 of the Court of Appeals (CA)
in CA-GR SP No. 49022. The decretal portion of the said Decision reads as follows:
"WHEREFORE, the challenged decision in Civil Case No. Q-95-23219 is hereby SET
ASIDE and the complaint against defendant-appellant MERALCO is hereby DISMISSED.
Plaintiffs-appellees are herebyORDERED to pay defendant-appellant MERALCO the
differential billing of P193,332.00 representing the value of used but unregistered
electrical consumption."3
The assailed Resolution denied petitioner's Motion for Reconsideration.
The Facts
The facts of the case are summarized by the Court of Appeals in this wise:
"Defendant-appellant Manila Electric Company (MERALCO) is a private corporation,
authorized by law to charge all persons, including the government, for the consumption
of electric power at rates duly authorized and approved by the Board of Energy (now
the Energy Regulatory Board).
"Plaintiffs-appellees Spouses Antonio and Lorna Quisumbing are owners of a house and
lot located at No. 94 Greenmeadows Avenue, Quezon City, which they bought on April
7, 1994 from Ms. Carmina Serapio Santos. They alleged to be business entrepreneurs
engaged in the export of furnitures under the business name 'Loran Industries' and
recipient of the 1993 Agora Award and 1994 Golden Shell Award. Mrs. Quisumbing is a
member of the Innerwheel Club while Mr. Quisumbing is a member of the Rotary Club,
Chairman of Cebu Chamber of Commerce, and Director of Chamber of Furniture.
"On March 3, 1995 at around 9:00 a.m., defendant-appellant's inspectors headed by
Emmanuel C. Orlino were assigned to conduct a routine-on-the-spot inspection of all
single phase meters at Greenmeadows Avenue. House no. 94 of Block 8, Lot 19
Greenmeadows Avenue owned by plaintiffs-appellees was inspected after observing a
standard operating procedure of asking permission from plaintiffs-appellees, through
their secretary which was granted. The secretary witnessed the inspection. After the
inspection, defendant-appellant's inspectors discovered that the terminal seal of the
meter was missing; the meter cover seal was deformed; the meter dials of the meter
was mis-aligned and there were scratches on the meter base plate. Defendant-
appellant's inspectors relayed the matter to plaintiffs-appellees' secretary, who in turn
relayed the same to plaintiff-appellee, Lorna Quisumbing, who was outraged of the
result of the inspection and denied liability as to the tampering of the meter. Plaintiffs-
appellees were advised by defendant-appellant's inspectors that they had to detach
the meter and bring it to their laboratory for verification/confirmation of their findings. In
the event the meter turned out to be tampered, defendant-appellant had to
temporarily disconnect the electric services of plaintiffs-appellees. The laboratory testing
conducted on the meter has the following findings to wit:
'1. Terminal seal was missing.
'2. Lead cover seals ('90 ERB 1-Meralco 21) were tampered by forcibly pulling out from
the sealing wire.
'3. The 1000th, 100th and 10th dial pointers of the register were found out of alignment
and with circular scratches at the face of the register which indicates that the meter
had been opened to manipulate the said dial pointers and set manually to the desired
reading. In addition to this, the meter terminal blades were found full of scratches.'
"After an hour, defendant-appellant's head inspector, E. Orlina returned to the
residence of plaintiffs-appellees and informed them that the meter had been tampered
and unless they pay the amount ofP178,875.01 representing the differential billing, their
electric supply would be disconnected. Orlina informed plaintiffs-appellees that they
were just following their standard operating procedure. Plaintiffs-appellees were further
advised that questions relative to the results of the inspection as well as the
disconnection of her electrical services for Violation of Contract (VOC) may be settled
with Mr. M. Manuson of the Special Accounts, Legal Service Department. However, on
the same day at around 2:00 o'clock in the afternoon defendant-appellant's officer
through a two-way radio instructed its service inspector headed by Mr. Orlino to
reconnect plaintiffs-appellees' electric service which the latter faithfully complied.
"On March 6, 1995, plaintiffs-appellees filed a complaint for damages with prayer for the
issuance of a writ of preliminary mandatory injunction, despite the immediate
reconnection, to order defendant-appellant to furnish electricity to the plaintiffs-
appellees alleging that defendant-appellant acted with wanton, capricious, malicious
and malevolent manner in disconnecting their power supply which was done without
due process, and without due regard for their rights, feelings, peace of mind, social and
business reputation.
"In its Answer, defendant-appellant admitted disconnecting the electric service at the
plaintiffs-appellees' house but denied liability citing the 'Terms and Conditions of
Service,' and Republic Act No. 7832 otherwise known a 'Anti-Electricity and Electric
Transmission Lines/Materials Pilferage Act of 1994.'
"After trial on the merits, the lower court rendered judgment, ruling in favor of plaintiffs-
appellees."4(Citations omitted)
Ruling of the Trial Court
The trial court held that Meralco (herein respondent) should have given the Quisumbing
spouses (herein petitioners) ample opportunity to dispute the alleged meter tampering.
It held that respondent had acted summarily and without procedural due process in
immediately disconnecting the electric service of petitioners. Respondent's action, ruled
the RTC, constituted a quasi delict.
Ruling of the Court of Appeals
The Court of Appeals overturned the trial court's ruling and dismissed the Complaint. It
held that respondent's representatives had acted in good faith when they
disconnected petitioners' electric service. Citing testimonial and documentary
evidence, it ruled that the disconnection was made only after observing due process.
Further, it noted that petitioners had not been able to prove their claim for damages.
The appellate court likewise upheld respondent's counterclaim for the billing differential
in the amount of P193,3325 representing the value of petitioners' used but unregistered
electrical consumption, which had been established without being controverted.
Hence, this Petition.6
The Issues
In their Memorandum,7 petitioners submit the following issues for our consideration:
"4.1 Whether a prima facie presumption of tampering of electrical meter enumerated
under Sec. 4 (a) iv of RA 7832 (Anti-Electricity and Electric Transmission Lines/Materials
Pilferage Act of 1994) may be had despite the absence of an ERB representative or an
officer of the law?
"4.2 Whether the enumeration of instances to establish a prima facie presumption of
tampering of electrical meter enumerated under Sec. 4 (a) iv of RA 7832 (Anti-Electricity
and Electric Transmission Lines/Materials Pilferage Act of 1994) is exclusive?
"4.3 What constitutes notice prior to disconnection of electricity service? Corollarily,
whether the definition of notice under Meralco v. Court of Appeals (157 SCRA 243)
applies to the case at bar?
"4.4 Whether a prima facie presumption may contradict logic?
"4.5 Whether documentary proof is pre-requisite for award of damages?"8
In sum, this Petition raises three (3) main issues which this Court will address: (1) whether
respondent observed the requisites of law when it disconnected the electrical supply of
petitioners, (2) whether such disconnection entitled petitioners to damages, and (3)
whether petitioners are liable for the billing differential computed by respondent.
The Court's Ruling
The Petition is partly meritorious.
First Issue:
Compliance with Requisites of Law
Petitioners contend that the immediate disconnection of electrical service was not
validly effected because of respondent's noncompliance with the relevant provisions of
RA 7832, the "Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of
1994." They insist that the immediate disconnection of electrical supply may only be
validly effected only when there is prima facie evidence of its illegal use. To constitute
prima facie evidence, the discovery of the illegal use must be "personally witnessed and
attested to by an officer of the law or a duly authorized representative of the Energy
Regulatory Board (ERB)."
Respondent, on the other hand, points out that the issue raised by petitioners is a
question of fact which this Court cannot pass upon. It argues further that this issue,
which was not raised in the court below, can no longer be taken up for the first time on
appeal. Assuming arguendo that the issue was raised below, it also contends that
petitioners were not able to specifically prove the absence of an officer of the law or a
duly authorized representative of the ERB when the discovery was made.1âwphi1.nêt
Prima facie Evidence of Illegal Use of Electricity
We agree with petitioners. Section 4 of RA 7832 states:
(a) The presence of any of the following circumstances shall constitute prima
facie evidence of illegal use of electricity, as defined in this Act, by the person
benefitted thereby, and shall be the basis for: (1) the immediate disconnection by the
electric utility to such person after due notice, x x x
xxx xxx xxx
(viii) x x x Provided, however, That the discovery of any of the foregoing circumstances,
in order to constitute prima facie evidence, must be personally witnessed and attested
to by an officer of the law or a duly authorized representative of the Energy Regulatory
Board (ERB)."9 (Italics supplied)
Under the above provision, the prima facie presumption that will authorize immediate
disconnection will arise only upon the satisfaction of certain requisites. One of these
requisites is the personal witnessing and attestation by an officer of the law or by an
authorized ERB representative when the discovery was made.
As a rule, this Court reviews only questions of law, not of facts. However, it may pass
upon the evidence when the factual findings of the trial court are different from those
of the Court of Appeals, as in this case.10
A careful review of the evidence on record negates the appellate court's holding that
"the actions of defendant-appellant's service inspectors were all in accord with the
requirement of the law."11
Respondent's own witnesses provided the evidence on who were actually present when
the inspection was made. Emmanuel C. Orlino, the head of the Meralco team, testified:
"Q When you were conducting this inspection, and you discovered these findings
you testified earlier, who was present?
A The secretary, sir."12
"ATTY. REYES - Who else were the members of your team that conducted this inspection
at Greenmeadows Avenue on that day, March 3, 1995?
A The composition of the team, sir?
Q Yes.
A Including me, we are about four (4) inspectors, sir.
Q You were four (4)?
A Yes, sir.
Q Who is the head of this team?
A I was the head of the team, sir."13
Further, Catalino A. Macaraig, the area head of the Orlino team, stated that only
Meralco personnel had been present during the inspection:
"Q By the way you were not there at Green Meadows on that day, right?
A Yes, sir.
Q Only Mr. Orlino and who else were there?
A Two or three of his men.
Q All members of the inspection team?
A Yes, sir."14
These testimonies clearly show that at the time the alleged meter tampering was
discovered, only the Meralco inspection team and petitioners' secretary were present.
Plainly, there was no officer of the law or ERB representative at that time. Because of the
absence of government representatives, the prima facie authority to disconnect,
granted to Meralco by RA 7832, cannot apply.
Neither can respondent find solace in the fact that petitioners' secretary was present at
the time the inspection was made. The law clearly states that for the prima facie
evidence to apply, the discovery "must be personally witnessed and attested to by an
officer of the law or a duly authorized representative of the Energy Regulatory Board
(ERB)."15 Had the law intended the presence of the owner or his/her representative to
suffice, then it should have said so. Embedded in our jurisprudence is the rule that courts
may not construe a statute that is free from doubt.16 Where the law is clear and
unambiguous, it must be taken to mean exactly what it says, and courts have no
choice but to see to it that the mandate is obeyed.17
In fact, during the Senate deliberations on RA 7832, Senator John H. Osmeña, its author,
stressed the need for the presence of government officers during inspections of electric
meters. He said:
"Mr. President, if a utility like MERALCO finds certain circumstances or situations which
are listed in Section 2 of this bill to be prima facie evidence, I think they should be
prudent enough to bring in competent authority, either the police or the NBI, to verify or
substantiate their finding. If they were to summarily proceed to disconnect on the basis
of their findings and later on there would be a court case and the customer or the user
would deny the existence of what is listed in Section 2, then they could be in a lot of
trouble."18 (Italics supplied)
Neither can we accept respondent's argument that when the alleged tampered meter
was brought to Meralco's laboratory for testing, there was already an ERB representative
present.
The law says that before immediate disconnection may be allowed, the discovery of
the illegal use of electricity must have been personally witnessed and attested to by an
officer of the law or by an authorized ERB representative. In this case, the disconnection
was effected immediately after the discovery of the alleged meter tampering, which
was witnessed only by Meralco's employees. That the ERB representative was allegedly
present when the meter was examined in the Meralco laboratory will not cure the
defect.
It is undisputed that after members of the Meralco team conducted their inspection
and found alleged meter tampering, they immediately disconnected petitioners'
electrical supply. Again, this verity is culled from the testimony of Meralco's Orlina:
"A When she went inside then she came out together with Mrs. Lourdes Quis[u]mbing
at that time. We did tell our findings regarding the meter and the consequence with it.
And she was very angry with me.
Q When you say consequence of your findings, what exactly did you tell Mrs.
Quisumbing?
A We told her that the service will be temporarily disconnected and that we are
referring to our Legal Department so could know the violation, sir."19
"A Yes, sir. At that time, I referred her to Mr. Macaraig, sir.
Q What is the fist name of this supervisor?
A Mr. Catalino Macara[i]g, sir.
Q Then after talking to Mr. Catalino Macara[i]g, this is over the telephone, what
happened?
A The supervisor advised her that the service will be temporarily disconnected and
she has to go to our Legal Department where she could settle the VOC, sir.
Q You are talking of 'VOC,' what is this all about Mr. Orlino?
A 'VOC' is violation of contract, sir."20
As to respondent's argument that the presence of an authorized ERB representative had
not been raised below, it is clear, however, that the issue of due process was brought up
by petitioners as a valid issue in the CA. The presence of government agents who may
authorize immediate disconnections go into the essence of due process. Indeed, we
cannot allow respondent to act virtually as prosecutor and judge in imposing the
penalty of disconnection due to alleged meter tampering. That would not sit well in a
democratic country. After all, Meralco is a monopoly that derives its power from the
government. Clothing it with unilateral authority to disconnect would be equivalent to
giving it a license to tyrannize its hapless customers.
Besides, even if not specifically raised, this Court has already ruled that "[w]here the
issues already raised also rest on other issues not specifically presented, as long as the
latter issues bear relevance and close relation to the former and as long as they arise
from matters on record, the Court has the authority to include them in its discussion of
the controversy as well as to pass upon them."21
Contractual Right to Disconnect
Electrical Service
Neither may respondent rely on its alleged contractual right to disconnect electrical
service based on Exhibits "10"22 and "11,"23 or on Decisions of the Board of Energy (now
the Energy Regulatory Board). The relevant portion of these documents concerns
discontinuance of service. It provides:
"The Company reserves the right to discontinue service in case the Customer is in arrears
in the payment of bills or for failure to pay the adjusted bills in those cases where the
meter stopped or failed to register the correct amount of energy consumed, or for
failure to comply with any of these terms and conditions, or in case of or to prevent
fraud upon the Company. Before disconnection is made in case of or to prevent fraud,
the Company may adjust the bill of said Customer accordingly and if the adjusted bill is
not paid, the Company may disconnect the same. In case of disconnection, the
provisions of Revised Order No. 1 of the former Public Service Commission (now the
Board of Energy) shall be observed. Any such suspension of service shall not terminate
the contract between the Company and the Customer."24
Petitioners' situation can fall under disconnection only "in case of or to prevent fraud
upon the Company." However, this too has requisites before a disconnection may be
made. An adjusted bill shall be prepared, and only upon failure to pay it may the
company discontinue service. This is also true in regard to the provisions of Revised
Order No. 1 of the former Public Service Commission, which requires a 48-hour written
notice before a disconnection may be justified. In the instant case, these requisites were
obviously not complied with.
Second Issue
Damages
Having ruled that the immediate disconnection effected by Meralco lacks legal, factual
or contractual basis, we will now pass upon on the right of petitioners to recover
damages for the improper disconnection.
Petitioners are asking for the reinstatement of the RTC Decision, which awarded them
actual, moral and exemplary damages as well as attorney's fees. All these were
overturned by the CA.
As to actual damages, we agree with the CA that competent proof is necessary before
our award may be made. The appellate court ruled as follows:
"Considering further, it is a settled rule that in order for damages to be recovered, the
best evidence obtainable by the injured party must be presented. Actual and
compensatory damages cannot be presumed but must be duly proved and proved
with reasonable degree and certainty. A court cannot rely on speculation, conjecture
or guess work as to the fact and amount of damages, but must depend upon
competent proof that they have been suffered and on evidence of actual amount
thereof. If the proof is flimsy and unsubstantial, no damages will be awarded."25
Actual damages are compensation for an injury that will put the injured party in the
position where it was before it was injured.26 They pertain to such injuries or losses that
are actually sustained and susceptible of measurement.27 Except as provided by law or
by stipulation, a party is entitled to an adequate compensation only for such pecuniary
loss as it has duly proven.28
Basic is the rule that to recover actual damages, not only must the amount of loss be
capable of proof; it must also be actually proven with a reasonable degree of certainty,
premised upon competent proof or the best evidence obtainable.29
Petitioners' claim for actual damages was premised only upon Lorna Quisumbing's bare
testimony as follows:
"A Actually that da[y] I was really scheduled to go to that furniture exhibit. That
furniture exhibit is only once a year.
Q What is this furniture exhibit?
A The SITEM, that is a government agency that takes care of exporters and exclusive
marketing of our products around the world. We always have that once a year and
that's the time when all our buyers are here for us to show what we had that was
exhibited to go around. So, my husband had to [fly] from Cebu to Manila just for this
occasion. So we have an appointment with our people and our buyers with SITEM and
also that evening we will have to treat them [to] dinner.
Q Whereat?
A At our residence, we were supposed to have a dinner at our residence.
Q What happened to this occasion?
A So when they disconnected our electric power we had to get in touch with them
and change the venue.
Q Which venue did you transfer your dinner for your buyers?
A We brought them in a restaurant in Makati at Season's Restaurant. But it was very
embar[r]assing for us because we faxed them ahead of time before they came to
Manila.
Q Now as a result of this change of your schedule because of the disconnection of
the electric power on that day, Friday, what damage did you suffer?
A I cancelled the catering service and that is so much of a h[a]ssle it was so
embarras[s]ing for us.
Q Can you tell us how much amount?
A Approximately P50,000.00."30
No other evidence has been proffered to substantiate her bare statements. She has not
shown how she arrived at the amount of P50,000; it is, at best, speculative. Her self-
serving testimonial evidence, if it may be called such, is insufficient to support alleged
actual damages.
While respondent does not rebut this testimony on the expenses incurred by the spouses
in moving the dinner out of their residence due to the disconnection, no receipts
covering such expenditures have been adduced in evidence. Neither is the testimony
corroborated. To reiterate, actual or compensatory damages cannot be presumed, but
must be duly proved with a reasonable degree of certainty. It is dependent upon
competent proof of damages that petitioners have suffered and of the actual amount
thereof.31 The award must be based on the evidence presented, not on the personal
knowledge of the court; and certainly not on flimsy, remote, speculative and
unsubstantial proof.32 Consequently, we uphold the CA ruling denying the grant of
actual damages.
Having said that, we agree with the trial court, however, that petitioners are entitled to
moral damages, albeit in a reduced amount.
The RTC opined as follows:
"This Court agrees with the defendant regarding [its] right by law and equity to protect
itself from any fraud. However, such right should not be exercised arbitrarily but with
great caution and with due regard to the rights of the consumers. Meralco having a
virtual monopoly of the supply of electric power should refrain from taking drastic
actions against the consumers without observing due process. Even assuming that the
subject meter has had history of meter tampering, defendant cannot simply assume
that the present occupants are the ones responsible for such tampering. Neither does it
serve as a license to deprive the plaintiffs of their right to due process. Defendant should
have given the plaintiffs simple opportunity to dispute the electric charges brought
about by the alleged meter-tampering, which were not included in the bill rendered
them. Procedural due process requires reasonable notice to pay the bill and reasonable
notice to discontinue supply. Absent due process the defendant may be held liable for
damages. While this Court is aware of the practice of unscrupulous individuals of
stealing electric curre[n]t which causes thousands if not millions of pesos in lost revenue
to electric companies, this does not give the defendant the right to trample upon the
rights of the consumers by denying them due process."33
Article 2219 of the Civil Code lists the instances when moral damages may be
recovered. One such case34 is when the rights of individuals, including the right against
deprivation of property without due process of law, are violated.35
Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury.36 Although incapable of pecuniary computation, such damages may be
recovered if they are the proximate results of the defendant's wrongful act or omission.37
Case law establishes the following requisites for the award of moral damages: (1) there
is an injury -- whether physical, mental or psychological -- clearly sustained by the
claimant; (2) there is a culpable act or omission factually established; (3) the wrongful
act or omission of the defendant is the proximate cause of the injury sustained by the
claimant; and (4) the award of damages is predicated on any of the cases stated in
Article 2219 of the Civil Code.38
To reiterate, respondent had no legal right to immediately disconnect petitioners'
electrical supply without observing the requisites of law which, in turn, are akin to due
process. Had respondent been more circumspect and prudent, petitioners could have
been given the opportunity to controvert the initial finding of alleged meter tampering.
Said the RTC:
"More seriously, the action of the defendant in maliciously disconnecting the electric
service constitutes a breach of public policy. For public utilities, broad as their powers
are, have a clear duty to see to it that they do not violate nor transgress the rights of the
consumers. Any act on their part that militates against the ordinary norms of justice and
fair play is considered an infraction that gives rise to an action for damages. Such is the
case at bar."39
Indeed, the Supreme Court has ruled in Meralco v. CA40 that respondent is required to
give notice of disconnection to an alleged delinquent customer. The Court said:
"x x x One can not deny the vital role which a public utility such as MERALCO, having a
monopoly of the supply of electrical power in Metro Manila and some nearby
municipalities, plays in the life of people living in such areas. Electricity has become a
necessity to most people in these areas, justifying the exercise by the State of its
regulatory power over the business of supplying electrical service to the public, in which
petitioner MERALCO is engaged. Thus, the state may regulate, as it has done through
Section 97 of the Revised Order No. 1 of the Public Service Commission, the conditions
under which and the manner by which a public utility such as MERALCO may effect a
disconnection of service to a delinquent customer. Among others, a prior written notice
to the customer is required before disconnection of the service. Failure to give such prior
notice amounts to a tort."41
Observance of the rights of our people is sacred in our society. We cannot allow such
rights to be trifled with or trivialized. Although the Court sympathizes with respondent's
efforts to stamp out the illegal use of electricity, such action must be done only with
strict observance of the rights of our people. As has been we succinctly said: "there is a
right way to do the right thing at the right time for the right reason."42
However, the amount of moral damages, which is left largely to the sound discretion of
the courts, should be granted in reasonable amounts, considering the attendant facts
and circumstances.43 Moral damages, though incapable of pecuniary estimation, are
designed to compensate the claimant for actual injury suffered and not to impose a
penalty.44 Moral damages are not intended to enrich a plaintiff at the expense of the
defendant.45 They are awarded only to obtain a means, a diversion or an amusement
that will serve to alleviate the moral suffering the injured party has undergone by reason
of the defendant's culpable action.46 They must be proportionate to the suffering
inflicted.47
WHEREFORE, the Petition is hereby PARTLY GRANTED. The assailed CA Decision
is MODIFIED as follows: petitioners are ORDERED to pay respondent the billing differential
of P193,332.96; while respondent is ordered to pay petitioners P100,000 as moral
damages, P50,000 as exemplary damages, and P50,000 as attorney's fees. No
pronouncement as to costs.

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

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

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

Final Issue:

Billing Differential

Finally, this Court holds that despite the basis for the award of damages -- the lack of
due process in immediately disconnecting petitioners' electrical supply -- respondent's
counterclaim for the billing differential is still proper. We agree with the CA that
respondent should be given what it rightfully deserves. The evidence it presented, both
documentary and testimonial, sufficiently proved the amount of the differential.

Not only did respondent show how the meter examination had been conducted by its
experts, but it also established the amount of P193,332.96 that petitioners owed
respondent. The procedure through which this amount was arrived at was testified to by
Meralco's Senior Billing Computer Enrique Katipunan. His testimony was corroborated by
documentary evidence showing the account's billing history and the corresponding
computations. Neither do we doubt the documents of inspections and examinations
presented by respondent to prove that, indeed there had been meter tampering that
resulted in unrecorded and unpaid electrical consumption.

The mere presentation by petitioners of a Contract to Sell with Assumption of

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

Finally, the CA was correct in ruling that the convincing documentary and testimonial
evidence presented by respondent, was not controverted by petitioners.1âwphi1.nêt
[Public Officer Refuses to Perform Duty]
G.R. No. 101428 August 5, 1992
DR. ISABELITA VITAL-GOZON, in her official capacity as MEDICAL CENTER CHIEF OF THE
NATIONAL CHILDREN'S HOSPITAL, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and DR. ALEJANDRO S. DE LA FUENTE, respondents.
Gregorio San Agustin for private respondent.
NARVASA, C.J.:
Whether or not the Court of Appeals has jurisdiction, in a special civil action of
mandamus against a public officer, to take cognizance of the matter of damages
sought to be recovered from the defendant officer, is the chief issue raised in the
certiorari action at bar. Also put the issue is whether or not the Solicitor General may
represent the defendant public officer in the mandamus suit, in so far as the claim for
damages is concerned, in light of the Court's rulings in Urbano , et al. v. Chavez, et al.,
and Co v. Regional Trial Court of Pasig, et al. 1
There is no dispute about the facts from which these issues arise.
In the early months of 1987 — and pursuant to Executive Order No. 119 issued on
January 30, 1987 by President Corazon Aquino — reorganization of the various offices of
the Ministry of Health commenced; existing offices were abolished, transfers of
personnel effected.
At the time of the reorganization, Dr. Alejandro S. de la Fuente was the Chief of the
Clinics of the National Children's Hospital, having been appointed to that position on
December 20, 1978. Prior thereto, he occupied the post of Medical Specialist II, a
position to which he was promoted in 1977 after serving as Medical Specialist I of the
same hospital for six (6) years (since 1971).
On February 4, 1988 Dr. de la Fuente received notice from the Department of Health
that he would be re-appointed "Medical Specialist II." Considering this is to be a
demotion by no less than two ranks from his post as Chief of Clinics, Dr. de la Fuente filed
a protest with the DOH Reorganization Board. When his protest was ignored, he brought
his case to the Civil Service Commission where it was docketed as CSC Case No. 4. In
the meantime "the duties and responsibilities pertaining to the position of Chief of Clinics
were turned over to and were allowed to be exercised by Dr. Jose D. Merencilla,
Jr." 2
Dr. de la Fuente's case was decided by the Civil Service Commission in a Resolution
dated August 9, 1988. In that Resolution, the Commission made the following conclusion
and disposition, to wit:
. . (The Commission) declares the demotion/transfer of appellant de la Fuente, Jr. from
Chief of Clinics to Medical Specialists II as null and void: hence, illegal. Considering
further that since the National Children's Hospital was not abolished and the position
therein remained intact although the title or the position of Chief of Clinics was
changed to "Chief of Medical Professional Staff" with substantially the same functions
and responsibilities, the Commission hereby orders that:
1. Appellant de la Fuente, Jr. be retained or considering as never having relinquished his
position of Chief of Clinics (now Chief of Medical Professional Staff) without loss of
seniority rights; and
2. He be paid back salaries, transportation, representation and housing allowances and
such other benefits withheld from him from the date of his illegal demotion/transfer.
No motion for reconsideration of this Resolution was ever submitted nor appeal
therefrom essayed to the Supreme Court, within the thirty-day period prescribed
therefor by the Constitution. 3 Consequently, the resolution became final, on September
21, 1988.
De la Fuente thereupon sent two (2) letters to Dr. Vital-Gozon, the Medical Center Chief
of National Children's Hospital, 4 demanding the implementation of the Commission's
decision. Dr. Vital-Gozon referred "de la Fuente's claims to the Department of Health
Assistant Secretary for Legal Affairs for appropriate advice and/or action . . (She did this
allegedly because, according to the Solicitor General, she was) unaware when and
how a CSC Resolution becomes final and executory, whether such Resolution had in
fact become final and executory and whether the DOH Legal Department would
officially assail the mentioned Resolution." 5 But she did not answer Dr. de la Fuente's
letters, not even to inform him of the referral thereof to the Assistant Secretary. She
chose simply to await "legal guidance from the DOH Legal Department." On the other
hand, no one in the DOH Legal Department bothered to reply to Dr. de la Fuente, or to
take steps to comply or otherwise advise compliance, with the final and executory
Resolution of the Civil Service Commission. In fact, de la Fuente claims that Vital-Gozon
had "actually threatened to stop paying . . . (his) salary and allowances on the pretext
that he has as yet no 'approved' appointment even as 'Medical Specialist II' . . . 6
Three months having elapsed without any word from Vital-Gozon or anyone in her
behalf, or any indication whatever that the CSC Resolution of August 9, 1988 would be
obeyed, and apprehensive that the funds to cover the salaries and allowances
otherwise due him would revert to the General Fund, Dr. de al Fuente repaired to the
Civil Service Commission and asked it to enforce its judgment. He was however "told to
file in court a petition
for mandamus because of the belief that the Commission had no coercive powers —
unlike a court — to enforce its final decisions/resolutions. 7
So he instituted in the Court of Appeals on December 28, 1988 an action of "mandamus
and damages with preliminary injunction" to compel Vital-Gozon, and the
Administrative Officer, Budget Officer and Cashier of the NCH to comply with the final
and executory resolution of the Civil Service Commission. He prayed for the following
specific reliefs:
(1) (That) . . a temporary restraining order be issued immediately, ordering the principal
and other respondents to revert the funds the of the NCH corresponding to the amounts
necessary to implement the final resolution of the CSC in CSC Case No. 4 in favor of
herein petitioner, Dr. Alejandro S. de la Fuente, Jr., and to pay such sums which have
accrued and due and payable as of the date of said order;
(2) After hearing on the prayer for preliminary injunction, that the restraining order be
converted to a writ of preliminary injunction; and that a writ of preliminary mandatory
injunction be issued ordering principal respondent and the other respondents to
implement in full the said final resolution; and
(3) That, after hearing on the merits of the petition, that judgment be rendered seeking
(sic) permanent writs issued and that principal respondent be ordered and
commanded to comply with and implement the said final resolution without further
delay; and, furthermore, that the principal respondent be ordered to pay to the sums of
P100,000.00 and P20,000.00 as moral and exemplary damages, and P10,000.00 for
litigation expenses and attorney's fees.
xxx xxx xxx
The Court of Appeals required the respondents to answer. It also issued a temporary
restraining order as prayed for, and required the respondent to show cause why it
should not be converted to a writ of preliminary injunction. The record shows that the
respondents prayed for and were granted an extension of fifteen (15) days to file their
answer "through counsel, who," as the Court of Appeals was later to point out, 8 "did not
bother to indicate his address, thus notice was sent to him through the individual
respondents. . . . (However, no) answer was filed; neither was there any show cause (sic)
against a writ of preliminary injunction." It was a certain Atty. Jose Fabia who appeared
in Vital-Gozon's behalf. 9
About a month afterwards, de la Fuente filed with the same Court a
"Supplemental/Amended Petition" dated February 2, 1989. The second petition
described as one for "quo warranto" aside from "mandamus", added three respondents
including Dr. Jose Merencilla, Jr.; and alleged inter alia that he (de la Fuente) had "clear
title" to the position in question in virtue of the final and executory judgment of the Civil
Service Commission; that even after the Commission's judgment had become final and
executory and been communicated to Vital-Gozon, the latter allowed "Dr. Merencilla,
Jr. as 'OIC Professional Service' to further usurp, intrude into and unlawfully hold and
exercise the public office/position of petitioner, (under a duly approved permanent
appointment as 'Chief of Clinics' since 1978). De la Fuente thus prayed, additionally, for
judgment:
(a) Declaring that principal respondent Dr. Jose D. Merencilla, Jr. is not legally entitled to
the office of "Chief of Clinics" (now retitled/known as "Chief of Medical Professional
Staff," NCH), ousting him therefrom and ordering said respondent to immediately cease
and desist from further performing as "OIC Professional Service" any and all duties and
responsibilities of the said office; (and)
(b) Declaring that the petitioner, Dr. Alejandro S. de la Fuente, Jr., is the lawful or de jure
Chief of Clinics (now known as "Chief of the Medical Professional Staff") and placing him
in the possession of said office/position, without the need of reappointment or new
appointment as held by the Civil Service Commission in its resolution of August 9, 1988, in
CSC Case No. 4.
xxx xxx xxx
Copy of the "Supplemental/Amended Petition" was sent to Atty. Jose A. Fabia, Counsel
for Respondents c/o Dr. Ma. Isabelita Vital-Gozon, etc., National Children's Hospital, E.
Rodriguez Ave., Quezon City (Atty. Fabia's address not being indicated or mentioned in
his motion for Extension of
Time). 10
Again the Court of Appeals required answer of the respondents. Again, none was filed.
The petitions were consequently "resolved on the basis of their allegations and the
annexes." The Appellate Court promulgated its judgment on June 9, 1989. 11 It held that
—
The question of whether petitioner may be divested of his position as Chief of Clinics by
the expedient of having him appointed to another, lower position is no longer an issue. It
ceased to be such when the resolution in CSC Case No. 4 became final. The said
resolution is explicit in its mandate; petitioner was declared the lawful and de jure Chief
of Clinics (Chief of the Medical Professional Staff) of the National Children's Hospital, and
by this token, respondent Dr. Jose D. Merencilla, Jr. is not legally entitled to the office.
Respondents, particularly Dr. Isabelita Vital-Gozon, had no discretion or choice on the
matter; the resolution had to be complied with. It was ill-advised of principal
respondent, and violative of the rule of law, that the resolution has not been obeyed or
implemented.
and accordingly ordered —
. . . respondents, particularly Dr. Isabelita Vital-Gozon, . . . to forthwith comply with, obey
and implement the resolution CSC Case No. 4 (and) . . . Dr. Jose D. Merencilla, Jr., who is
not entitled to the office, . . . to immediately cease and desist from further performing
and acting as OIC Professional Service.
But de la Fuente's prayer for damages — founded essentially on the refusal of Gozon, et
al. to obey the final and executory judgment of the Civil Service Commission, which thus
compelled him to litigate anew in a different forum — was denied by the Court of
Appeals on the ground that the "petitions (for mandamus) are not the vehicle nor is the
Court the forum for . . . (said) claim of damages."
Gozon acknowledged in writing that she received a copy of the Appellate Tribunal's
Decision of June 9, 1989 on June 15, 1989. 12 Respondent de la Fuente acknowledged
receipt of his own copy on June 15, 1989. 13 Neither Vital-Gozon nor her co-party, Dr.
Merencilla, Jr., moved for reconsideration of, or attempted to appeal the decision.
It was de la Fuente who sought reconsideration of the judgment, by motion filed
through new counsel, Atty. Ceferino Gaddi. 14 He insisted that the Appellate Court had
competence to award damages in a mandamus action. He argued that while such a
claim for damages might not have been proper in a mandamus proceeding in the
Appellate Court "before the enactment of B.P. Blg. 129 because the Court of Appeals
had authority to issue such writs only 'in aid of its appellate jurisdiction,'" the situation was
changed by said BP 129 in virtue of which three levels of courts — the Supreme Court,
the Regional Trial Court, and the Court of Appeals — were conferred concurrent original
jurisdiction to issue said writs, and the Court of Appeals was given power to conduct
hearings and receive evidence to resolve factual issues. To require him to separately
litigate the matter of damages he continued, would lead to that multiplicity of suits
which is abhorred by the law.
While his motion for reconsideration was pending, de la Fuente sought to enforce the
judgment of the Court of Appeals of June 9, 1989 — directing his reinstatement pursuant
to the Civil Service Commission's Resolution of August 9, 1988, supra. He filed on July 4,
1989 a "Motion for Execution," alleging that the judgment of June 9, 1989 had become
final and executory for failure of Gozon, et al. — served with notice thereof on June 16,
1989 to move for its reconsideration or elevate the same to the Supreme Court. 15 His
motion was granted by the Court of Appeals in a Resolution dated July 7, 1989, 16
reading as follows:
The decision of June 9, 1989 having become final and executory, as prayed for, let the
writ of execution issue forthwith.
The corresponding writ of execution issued on July 13, 1989, 17 on the invoked authority
of Section 9, Rule 39. 18 The writ quoted the dispositive portion of the judgment of June
9, 1989, including, as the Solicitor General's Office points out, the second paragraph to
the effect that the petitions "are not the vehicle nor is the Court the forum for the claim
of damages; (hence,) the prayer therefor is denied."
The writ of execution notwithstanding, compliance with the June 9, 1989 judgment was
not effected. Consequently, de la Fuente filed, on July 20, 1989, an "Urgent Ex Parte
Manifestation with Prayer to Cite Respondents for Contempt," complaining that
although Gozon and her co-parties had been served with the writ of execution on July
14, they had not complied therewith. By Resolution dated July 26, 1989, the Court
required Gozon and Merencilla to appear before it on August 3, 1989 to answer the
charge and show cause "why they should not be adjudged in contempt for disobeying
and/or resisting the judgment." 19
At the hearing Gozon and Merencilla duly presented themselves, accompanied by their
individual private lawyers — one for Gozon (Felipe Hidalgo, Jr.), two for Merencilla
(Bernardo S. Nera and Moises S. Rimando). One other lawyer appeared in their behalf,
from the Health Department, Artemio Manalo, who stated that he was there "in behalf
of Jose A. Fabia." 20 They explained that they had no intention to defy the Court, they
had simply referred the matter to their superiors in good faith; and they were perfectly
willing to comply with the judgment, undertaking to do so "even in the afternoon" of
that same day. The Court consequently ordered them "to comply with their undertaking
. . . without any further delay," and report the action taken towards this end, within five
(5) days.
On August 9, 1989, Gozon as "Medical Center Chief," sent a letter to Associate Justice
Pedro A. Ramirez, advising that under Hospital Special Order No. 31 dated August 3,
1989, de la Fuente had been directed to assume the position of Chief of the Medical
Professional Staff, and that a voucher for the payment of his allowances had been
prepared and was being processed. 21
More than a month later, or more precisely on September 27, 1989, the Court of
Appeals promulgated another Resolution, this time resolving de la Fuente's motion for
reconsideration of June 29, 1989. 22 It modified the Decision of June 9, 1989 by (a)
deleting its last paragraph (disallowing the claim of damages, supra), (b) consequently
describing and treating it as a "PARTIAL DECISION," and (c) scheduling "further
proceedings for the purpose of receiving evidence (of damages)," since said question
"cannot be resolved by mere reference to the pleadings." 23 This was done in reliance
on Section 3, Rule 65 of the Rules of Court, invoked by de la Fuente, which reads as
follows:24
Sec. 3. Mandamus. — When any tribunal, corporation, board, or person unlawfully
neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary course of law, the person aggrieved
thereby may file a verified petition in the proper court alleging the facts with certainty
and praying that judgment be rendered commanding the defendant, immediately or
at some other specified time, to do the act required to be done to protect the rights of
the petitioner, and to pay the damages sustained by the petitioner by reason of the
wrongful acts of the defendant.
At about this time, yet another lawyer, Atty. Pedro F. Martinez entered his appearance
for Isabelita Gozon. 25 At his instance, the Court gave him an "opportunity to . . . file a
motion for reconsideration" of the Resolution of September 27, 1989. 26 That motion he
filed by registered mail on November 10, 1989. 27 His basic contentions were (a) that the
decision of June 9, 1989 could no longer be altered, having become final and
executory and having in fact been executed, and (b) that under BP 129, the Appellate
Court had no jurisdiction over the question of damages in a mandamus action.
The Office of the Solicitor General also put in an appearance in Gozon's behalf at this
juncture, saying that the case had been referred to it only on November 14, 1989. It, too,
sought reconsideration of the Resolution of September 27, 1989. It filed on November 16,
1989 an "Omnibus Motion; I. For Reconsideration of Resolution dated September 27,
1989; and II. To defer hearing on petitioner's claims for damages." 28
Both motions were denied by the Court of Appeals in a Resolution dated January 11,
1991. In that Resolution, the Court —
1) declared that the amended decision had already become final and could no longer
be re-opened because, although "a copy of the amendatory resolution was received
by counsel who was representing Gozon on October 3, 1989," the first motion for
reconsideration was not mailed until November 10, 1989 and the Solicitor General's
"Omnibus Motion" was not filed until November 16, 1989; and
2) prohibited the Solicitor General from representing Gozon "in connection with . . . (de
la Fuente's) claim for damages," on the authority of this Court's ruling promulgated on
March 19, 1990 in G.R. No. 87977 (Urbano, et al. v. Chavez, et al.) and G.R. No. 88578
(Co v. Regional Trial Court of Pasig). 29
Notice of this Resolution of January 11, 1991 was served on the Solicitor General's Office
on January 18, 1991. 30 Again the Solicitor General sought reconsideration, by motion
dated January 25, 1991 and filed on January 30, 1991. 31 Again it was rebuffed. In a
Resolution rendered on August 7, 1991, 32 served on the Solicitor General's Office on
August 20, 1991, 33 the Court of Appeals denied the motion. It ruled that the "question
of the authority of the Solicitor General to appear as counsel for respondent Gozon . . .
(had already) been extensively discussed," and that its "jurisdiction . . . to hear and
determine issues on damages proceeds from Sec. 9, Batas Pambansa 129 as
amended."
In an attempt to nullify the adverse dispositions of the Court of
Appeals — and obtain "the ultimate and corollary relief of dismissing respondent de la
Fuente's claim for damages" — the Solicitor General's Office had instituted the special
civil action of certiorari at bar. It contends that the Court of Appeals is not legally
competent to take cognizance of and decide the question of damages in a
mandamus suit. It argues that —
1) B.P. Blg. 129 does not confer jurisdiction upon the Court of Appeals to hear, as a trial
court, claims for moral and exemplary damages;
2) assuming that the Court of Appeals does have jurisdiction over the claims for
damages, it lost the power to take cognizance thereof after the Decision of June 9,
1989 had, by its own pronouncement, become final and executory; and
3) the Urbano and Co doctrines cited by the Appellate Tribunal do not disqualify the
Solicitor General's Office from representing government officials sued in their official
capacities and in damage claims not arising from a felony.
It is in light of these facts, just narrated, that this Court will now proceed to deal with the
legal issues raised in this action. But first, a few brief observations respecting the
proceedings in the Civil Service Commission.
I
The record demonstrates that Vital-Gozon was fully aware of the following acts and
events: 34
1) the proceedings commenced by de la Fuente in the Civil Service Commission in
protest against his demotion;
2) the Commission's Resolution of August 9, 1988 as well, particularly, as the direction
therein that de la Fuente be reinstated and paid all his back salaries and other
monetary benefits otherwise due him, this being couched in fairly simple language
obviously understandable to persons of ordinary or normal intelligence;
3) no less than two (2) written demands of de la Fuente for implementation of the CSC's
aforesaid Resolution of August 9, 1988;
4) the petition filed by de la Fuente in the Court of Appeals for enforcement of the CSC
Resolution of August 9, 1988;
5) the extension granted by said Court of Appeals within which to file answer, notice
thereof having been sent directly to her and her co-respondents since the attorney who
sought the extension in their behalf (Atty. Fabia) did not set out his address in his motion
for extension;
6) the "supplemental/amended petition" subsequently presented by de la Fuente, copy
of which was sent to Atty. Fabia, c/o Dr. Vital-Gozon; and
7) the Decision and Amendatory Decision sent to her counsel on October 3, 1989.
To all these, her reaction, and that of the officials of the Department of Health
concerned, was a regrettably cavalier one, to say the least. Neither she nor the Health
officials concerned accorded said acts and events any importance. She never
bothered to find out what was being done to contest or negate de la Fuente's petitions
and actions, notwithstanding that as time went by, de la Fuente's efforts were being
met with success.
Nothing in the record even remotely suggests that Vital-Gozon merits relief from the final
and executory Resolution of the Civil Service Commission. This Court will not disturb that
Resolution. It is satisfied that no procedural or substantive errors taint that Resolution, or
its becoming final and executory.
II
Now, final and executory judgments are enforced by writ of execution and not by
another, separate action, whether of mandamus or otherwise. Hence, execution of the
Civil Service Commission's decision of August 9, 1988 should have been ordered and
effected by the Commission itself, when de la Fuente filed a motion therefor. It declined
to do so, however, on the alleged ground, as de la Fuente claims he was told, that it
"had no coercive powers — unlike a court — to enforce its final decisions/resolutions." 35
That proposition, communicated to de la Fuente, of the Commission's supposed lack of
coercive power to enforce its final judgments, is incorrect. It is inconsistent with previous
acts of the Commission of actually directing execution of its decisions and resolutions,
which this Court has sanctioned in several cases; 36 and it is not in truth a correct
assessment of its powers under the Constitution and the relevant laws.
In an En Banc Decision promulgated on October 15, 1991 in G.R. No. 96938 entitled
"Government Service Insurance System (GSIS) versus Civil Service Commission, et al.,"37
this Court declared that in light of the pertinent provisions of the Constitution and
relevant statutes —
. . . it would appear absurd to deny to the Civil Service Commission the power or
authority to enforce or order execution of its decisions, resolutions or orders which, it
should be stressed, it has been exercising through the years. It would seem quite obvious
that the authority to decide cases in inutile unless accompanied by the authority to see
that what has been decided is carried out. Hence, the grant to a tribunal or agency of
adjudicatory power, or the authority to hear and adjudge cases, should normally and
logically be deemed to include the grant of authority to enforce or execute the
judgments it thus renders, unless the law otherwise provides.
In any event, the Commission's exercise of that power of execution has been
sanctioned by this Court in several cases.
Be this as it may, the fact is that by reason of the Commission's mistaken refusal to
execute its final and executory Resolution of August 9, 1988, extended proceedings
have taken place in the Court of Appeals and certain issues have been expressly raised
in relation thereto, supra. Those issues appear to the Court to be important enough to
deserve serious treatment and resolution, instead of simply being given short shrift by a
terse ruling that the proceedings in the Court Service Commission actually had the
power to execute its final and executory Resolution.
III
The first such issue is whether or not the Court of Appeals has jurisdiction to take
cognizance of the matter of damages in a special civil action of mandamus. The
Solicitor General's Office argues that since jurisdiction is conferred only by law, not by
agreement of the parties, or acquiescence of the court, and since the law conferring
jurisdiction on the Court of Appeals, Section 9 of B.P. Blg. 129, makes no reference to
"actions for moral and exemplary damages, as those claimed by . . . (de la Fuente)," it
follows that the Court of Appeals has no competence to act on said claim of damages.
And Section 3 of Rule 65, which authorizes the petitioner in a mandamus suit to pray for
judgment commanding the defendant inter alia "to pay the damages sustained by the
petitioner by reason of the wrongful acts of the defendant," is "nothing more than a
procedural rule allowing joinder of causes of action, i.e., mandamus and damages,"
and such an award of damages is allowable only in actions commenced in Regional
Trial Courts but not in the Court of Appeals or this Court.
The argument is specious. It cannot be sustained.
The Solicitor General's Office correctly identifies Section 9, B.P. 129 as the legal provision
specifying the original and appellate jurisdiction of the Court of Appeals. The section
pertinently declares that the "Intermediate Appellate Court (now the Court of Appeals)
shall exercise . .," among others:
. . . Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus,
and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate
jurisdiction . . . 38
The Solicitor General's Office evidently searched said Section 9 for an explicit and
specific statement regarding "actions for moral and exemplary damages," and finding
none, concluded that the Court of Appeals had not been granted competence to
assume cognizance of claims for such damages. The conclusion is incorrect. Section 19,
governing the exclusive original jurisdiction of Regional Trial Courts in civil cases, contains
no reference whatever to claims "for moral and exemplary damages," and indeed does
not use the word "damages" at all; yet it is indisputable that said courts have power to
try and decide claims for moral, exemplary and other classes of damages
accompanying any of the types or kinds of cases falling within their specified jurisdiction.
The Solicitor General's theory that the rule in question is a mere procedural one allowing
joinder of an action of mandamus and another for damages, is untenable, for it implies
that a claim for damages arising from the omission or failure to do an act subject of a
mandamus suit may be litigated separately from the latter, the matter of damages not
being inextricably linked to the cause of action for mandamus, which is certainly not the
case.
Now, at the time of the enactment of B.P. 129, the issuance of the extraordinary writs
above mentioned was controlled by the Rules of Court of 1964, as they continue to
date to be so controlled. More particularly, the principal writs of mandamus, prohibition
and certiorari were (and continue to be) governed by Rule 65; the writ of habeas
corpus, by Rule 102; and the writ of quo warranto, by Rule 66. The so-called auxiliary
writs were (and continue to be) also governed by the same code — e.g., preliminary
attachment, by Rule 57; preliminary injunction, by Rule 58, receivership, by Rule 59; writ
of seizure or delivery in a replevin suit, by Rule 60.
At that time, Section 3 of Rule 65 authorized (as it continues to authorize to date)
rendition of judgment in a mandamus action "commanding the defendant,
immediately or at some other specified time, to do the act required to be done to
protect the rights of the petitioner, and to pay the damages sustained by the petitioner
by reason of the wrongful acts of the defendant." 39 The provision makes plain that the
damages are an incident, or the result of, the defendant's wrongful act in failing and
refusing to do the act required to be done. It is noteworthy that the Rules of 1940 had
an identical counterpart provision. 40
Moreover, Section 4 of the same Rule 65 authorized, as it continues to authorize to date,
the filing of the petition "in the Supreme Court, or, if it relates to the acts or omissions of
an inferior court, or of a corporation, board, officer or person, in a Court of First Instance
(now Regional Trial Court) having jurisdiction thereof," as well as "in the Court of Appeals
(whether or not) 41 in aid of its appellate jurisdiction."
Worthy of note, too, is that Rule 66 of the Rules of Court similarly authorizes the recovery
of damages in a quo warranto action against a corporate officer — an action within
the concurrent jurisdiction of the Court of Appeals — as follows: 42
Sec. 14. Liability of officer neglecting to deliver property of corporation to receiver. —
An officer of such corporation who refuses or neglects, upon demand, to deliver over to
the receiver all money, property, books, deeds, notes, bills, obligations, and papers of
every description within his power or control, belonging to the corporation, or in any
wise necessary for the settlement of its affairs, or the discharge of its debts and liabilities,
may be punished for contempt as having disobeyed a lawful order of the court, and
shall be liable to the receiver for the value of all money or other things so refused or
neglected to be surrendered, together with all damages that may have been sustained
by the stockholders and creditors of the corporation, or any of them, in consequence of
such neglect or refusal.
An award of damages was and is also allowed in connection with the auxiliary writ of
preliminary attachment, preliminary injunction or receivership which the Court of
Appeals has the power to issue in common with the Supreme Court and the Regional
Trial Courts, 43 payable by the sureties of the bond given in support of the writ, upon
seasonable application and summary hearing. 44
Since it cannot but be assumed that in formulating, and incorporating in BP 129, the
provision governing the jurisdiction of the Intermediate Appellate Court, now Court of
Appeals, the Batasang Pambansa was fully cognizant of the relevant provisions of the
Rules of Court just cited, as well as the rule against multiplicity of actions, it follows that in
conferring on the Court of Appeals original jurisdiction over the special civil action of
mandamus, among others, as well as over the issuance of auxiliary writs or processes,
the Batasang Pambansa clearly intended that said Court should exercise all the powers
then possessed by it under the Rules of Court in relation to said action of mandamus
and auxiliary writs, including the adjudication of damages to the petitioner in the action
in appropriate cases.
IV
The next issue is whether or not the Solicitor General may properly represent a public
official like Dr. Vital-Gozon, who is sued for damages for allegedly refusing to comply
with a lawful and executory judgment of competent authority. The doctrine laid down
in the Urbano and Co cases already adverted to, 45 is quite clear:
. . . (T)he Office of the Solicitor General is not authorized to represent a public official at
any stage of a criminal case. . . .
This observation should apply as well to a public official who is haled to court on a civil
suit for damages arising from a felony allegedly committed by him (Article 100, Revised
Penal Code). Any pecuniary liability he may be held to account for on the occasion of
such civil suit is for his own account. The State is not liable for the same. A fortiori, the
Office of the Solicitor General likewise has no authority to represent him in such a civil
suit for damages.
It being quite evident that Dr. Vital-Gozon is not here charged with a crime, or civilly
prosecuted for damages arising from a crime, there is no legal obstacle to her being
represented by the Office of the Solicitor General.
V 47 hence, a judgment debtor who acquiesces in and voluntarily complies with the
The last issue is whether or not the decision of the Court of Appeals of June 9, 1989 could
still be modified after it was pronounced final and executory and was in fact executed
with respect to de la Fuente's reinstatement to his position and the payment of the
salaries and allowances due him.
There would seem to be no question about the timeliness of de la Fuente's motion for
reconsideration of the June 9, 1989 decision. As already narrated, notice of said
decision was served on him on the 15th of June, and his motion for reconsideration was
presented on June 29, 1989, or fourteen (14) days after receiving a copy of the
judgment, i.e., within the fifteen-day period prescribed by Section 1, Rule 37 of the Rules
of Court for filing a motion for new trial reconsideration.
This being so, it would certainly have been entirely within the authority of the Court of
Appeals, under normal circumstances, to rule on that motion for reconsideration and, in
its discretion, act favorably on it, as it did through its Resolution of September 27, 1991 —
by amending the decision of June 9, 1989, declaring it a partial judgment, and setting a
date for reception of evidence on the la Fuente's claim for damages.
It would also appear that the motions for reconsideration of said Resolution of
September 27, 1991 separately submitted in Gozon's behalf, by her own private attorney
and by the Solicitor General's Office, were filed way out of time. As also already pointed
out, notice of that Resolution of September 27, 1991 was served on Gozon's counsel on
October 3, 1989 and on Gozon herself on October 4, 1989; but the motion for
reconsideration of Atty. Martinez (Gozon's private lawyer) was not filed until November
10, 1989, thirty-eight (38) days afterwards, and that of the Solicitor General, until
November 16, 1989, or forty-four (44) days later. What is worse is that, its motion for
reconsideration of November 16, 1989 having been denied by a Resolution dated
January 11, 1991, notice of which it received on January 18, 1991, the Solicitor General's
Office filed still another motion for reconsideration on January 30, 1991, ostensibly
directed against that Resolution of January 11, 1991 but actually seeking the setting
aside of the Resolution of September 17, 1989. In effect it filed a second motion for
reconsideration which, of course, is prohibited by law. 46
However, disposition of the question simply and solely on the foregoing premises is
precluded by the fact that prior to the promulgation by the Appellate Court of its
Resolution of September 27, 1989. — granting de la Fuente's motion for reconsideration
of June 29, 1989 — de la Fuente had asked for and been granted by the Court of
Appeals, authority to execute the decision of June 9, 1989 and had in fact succeeded
in bringing about satisfaction thereof, in so far as concerned his reinstatement to the
position from which he had been illegally ousted and the payment to him his salaries
and allowances.
It has therefore become essential to determine the effect of the execution of said
decision of June 9, 1989 at de la Fuente's instance, on the power of the Court of
Appeals to modify that judgment as earlier prayed for by de la Fuente in such a way as
to concede the latter's capacity to claim damages in his mandamus action, and
consequently authorize him to present evidence on the matter.
The general rule is that when a judgment has been satisfied, it passes beyond review,
satisfaction being the last act and end of the proceedings, and payment of satisfaction
of the obligation thereby established produces permanent and irrevocable discharge;
judgment, is estopped from taking an appeal therefrom. 48
On the other hand the question of whether or not a judgment creditor is estopped from
appealing or seeking modification of a judgment which has been executed at his
instance, is one dependent upon the nature of the judgment as being indivisible or not.
This is the doctrine laid down by this Court in a case decided as early as 1925, Verches v.
Rios. 49 In that case this Court held that although "there are cases holding the contrary
view," where the judgment is indivisible, "the weight of authority is to the effect that an
acceptance of full satisfaction of the judgment annihilates the right to further prosecute
the appeal; . . . that a party who has recovered judgment on a claim which cannot be
split up and made the basis of several causes of action, and afterwards coerced full
satisfaction by writ of execution or authority of the court, cannot maintain an appeal
from the judgment against the objections of the judgment debtor;" and that even
partial execution by compulsory legal process at the instance of a party in whose favor
a judgment appealed from was rendered, places said party in estoppel to ask that the
judgment be amended, either "by appeal or answer to his adversary's appeal, or
otherwise." 50
A converso, where the judgment is divisible, estoppel should not operate against the
judgment creditor who causes implementation of a part of the decision by writ of
execution. This is the clear import of Verches and the precedents therein invoked. It is an
aspect of the principle above mentioned that is fully consistent not only with the
dissenting opinion that "(a)cceptance of payment of . . . only the uncontroverted part
of the claim . . . should not preclude the plaintiff from prosecuting his appeal, to
determine whether he should not have been allowed more," 51 but also with logic and
common sense.
In this case, the amended judgment of the Court of Appeals is clearly divisible,
satisfaction of which may be "split up." One part has reference to the enforcement of
the final and executory judgment of the Civil Service Commission, that de la Fuente
should be reinstated to the position of Chief of Clinics (now Chief of Medical Professional
Staff) without loss of seniority rights and that he be paid his back salaries and all
monetary benefits due him from the date of his illegal demotion. This part is no longer
issuable, and has not in truth been controverted by Gozon herself. The other part has
reference to the damages which de la Fuente contends he suffered as a result of the
unjustified refusal of Gozon and her co-parties to comply with the final and executory
judgment of the Civil Service Commission, and which the Appellate Tribunal has allowed
him to prove. Obviously, the second part cannot possibly affect the first. Whether de la
Fuente succeeds or fails in his bid to recover damages against Gozon, et al. because of
their refusal to obey the judgment of the Civil Service Commission, is a contingency that
cannot affect the unalterable enforceability of that judgment. Similarly, the
enforcement of the Commission's judgment (already accomplished by writ of execution
of the Court of Appeals issued at de la Fuente's instance) cannot influence in any
manner the question whether or not there was culpable refusal on the part of Gozon, et
al. to comply with said judgment when first required so to do, and whether de la Fuente
did in fact suffer compensable injury thereby.
It bears stressing that the juridical situation in which de la Fuente finds himself is not of his
making. It is a consequence of circumstances not attributable to any fault on his part,
i.e., the unwarranted refusal or neglect of his superiors to obey the executory judgment
of the Civil Service Commission; the erroneous refusal of the Commission to execute its
own decision which made necessary, in de la Fuente's view, the filing of a mandamus
action in the Court of Appeals; the initial refusal of the latter Court to acknowledge his
right to damages in connection with the mandamus suit; and ultimately, the change of
view by the Court of Appeals, on de la Fuente's motion, as regards its competence to
take cognizance of the matter of damages in relation to the mandamus proceeding.

Under these circumstances, there was no reason whatsoever to defer concession to de

la Fuente of the relief of reinstatement — to which he
was indisputably already entitled — in the meantime that issues arising after finality of
the Civil Service Commission's judgment were being ventilated and resolved — these
issues being, to repeat, whether or not the refusal by Gozon, et al. obey said judgment
of the Commission could be justified, and whether or not, by reason of that refusal to
obey, de la Fuente did in fact suffer compensable injury.

It was therefore correct for the Court of Appeals, albeit by implication, to treat its
judgment as divisible, or capable of being enforced by parts, and to consider de la
Fuente as not having been placed in estoppel to pursue his claim for damages by
seeking and obtaining authority for a partial execution of the judgment. De la Fuente
not being in estoppel, it follows that his motion for reconsideration, timely filed, was not
deemed abandoned or waived by the partial execution of the judgment, and
jurisdiction of the Court of Appeals to amend the judgment was retained and not lost. It
follows, too, that since no motion for reconsideration was filed against, or appeal
attempted to be taken from, the Resolution of the Court of Appeals amending its
original judgment, within the time prescribed therefor by law, said amendatory
resolution has long since become final and immutable, particularly in so far as it holds
itself competent to take cognizance of the matter of damages and authorizes the
reception of evidence on de la Fuente's claim therefor.

WHEREFORE, the petition is DENIED, and the challenged Resolutions of September 27,
1989, January 11, 1991 and August 7, 1991 are AFFIRMED, without pronouncement as to
costs.
[Abortion]
G.R. No. L-16439 July 20, 1961
ANTONIO GELUZ, petitioner,
vs.
THE HON. COURT OF APPEALS and OSCAR LAZO, respondents.
Mariano H. de Joya for petitioner.
A.P. Salvador for respondents.
REYES, J.B.L., J.:
This petition for certiorari brings up for review question whether the husband of a
woman, who voluntarily procured her abortion, could recover damages from physician
who caused the same.
The litigation was commenced in the Court of First Instance of Manila by respondent
Oscar Lazo, the of Nita Villanueva, against petitioner Antonio Geluz, a physician.
Convinced of the merits of the complaint upon the evidence adduced, the trial court
rendered judgment favor of plaintiff Lazo and against defendant Geluz, ordering the
latter to pay P3,000.00 as damages, P700.00 attorney's fees and the costs of the suit. On
appeal, Court of Appeals, in a special division of five, sustained the award by a majority
vote of three justices as against two, who rendered a separate dissenting opinion.
The facts are set forth in the majority opinion as follows:
Nita Villanueva came to know the defendant (Antonio Geluz) for the first time in 1948 —
through her aunt Paula Yambot. In 1950 she became pregnant by her present husband
before they were legally married. Desiring to conceal her pregnancy from her parent,
and acting on the advice of her aunt, she had herself aborted by the defendant. After
her marriage with the plaintiff, she again became pregnant. As she was then employed
in the Commission on Elections and her pregnancy proved to be inconvenient, she had
herself aborted again by the defendant in October 1953. Less than two years later, she
again became pregnant. On February 21, 1955, accompanied by her sister Purificacion
and the latter's daughter Lucida, she again repaired to the defendant's clinic on
Carriedo and P. Gomez streets in Manila, where the three met the defendant and his
wife. Nita was again aborted, of a two-month old foetus, in consideration of the sum of
fifty pesos, Philippine currency. The plaintiff was at this time in the province of Cagayan,
campaigning for his election to the provincial board; he did not know of, nor gave his
consent, to the abortion.
It is the third and last abortion that constitutes plaintiff's basis in filing this action and
award of damages. Upon application of the defendant Geluz we granted certiorari.
The Court of Appeals and the trial court predicated the award of damages in the sum
of P3,000.06 upon the provisions of the initial paragraph of Article 2206 of the Civil Code
of the Philippines. This we believe to be error, for the said article, in fixing a minimum
award of P3,000.00 for the death of a person, does not cover the case of an unborn
foetus that is not endowed with personality. Under the system of our Civil Code, "la
criatura abortiva no alcanza la categoria de persona natural y en consscuencia es un
ser no nacido a la vida del Derecho" (Casso-Cervera, "Diccionario de Derecho
Privado", Vol. 1, p. 49), being incapable of having rights and obligations.
Since an action for pecuniary damages on account of personal injury or death pertains
primarily to the one injured, it is easy to see that if no action for such damages could be
instituted on behalf of the unborn child on account of the injuries it received, no such
right of action could derivatively accrue to its parents or heirs. In fact, even if a cause of
action did accrue on behalf of the unborn child, the same was extinguished by its pre-
natal death, since no transmission to anyone can take place from on that lacked
juridical personality (or juridical capacity as distinguished from capacity to act). It is no
answer to invoke the provisional personality of a conceived child (conceptus pro nato
habetur) under Article 40 of the Civil Code, because that same article expressly limits
such provisional personality by imposing the condition that the child should be
subsequently born alive: "provided it be born later with the condition specified in the
following article". In the present case, there is no dispute that the child was dead when
separated from its mother's womb.
The prevailing American jurisprudence is to the same effect; and it is generally held that
recovery can not had for the death of an unborn child (Stafford vs. Roadway Transit
Co., 70 F. Supp. 555; Dietrich vs. Northampton, 52 Am. Rep. 242; and numerous cases
collated in the editorial note, 10 ALR, (2d) 639).
This is not to say that the parents are not entitled to collect any damages at all. But such
damages must be those inflicted directly upon them, as distinguished from the injury or
violation of the rights of the deceased, his right to life and physical integrity. Because the
parents can not expect either help, support or services from an unborn child, they
would normally be limited to moral damages for the illegal arrest of the normal
development of thespes hominis that was the foetus, i.e., on account of distress and
anguish attendant to its loss, and the disappointment of their parental expectations
(Civ. Code Art. 2217), as well as to exemplary damages, if the circumstances should
warrant them (Art. 2230). But in the case before us, both the trial court and the Court of
Appeals have not found any basis for an award of moral damages, evidently because
the appellee's indifference to the previous abortions of his wife, also caused by the
appellant herein, clearly indicates that he was unconcerned with the frustration of his
parental hopes and affections. The lower court expressly found, and the majority
opinion of the Court of Appeals did not contradict it, that the appellee was aware of
the second abortion; and the probabilities are that he was likewise aware of the first. Yet
despite the suspicious repetition of the event, he appeared to have taken no steps to
investigate or pinpoint the causes thereof, and secure the punishment of the responsible
practitioner. Even after learning of the third abortion, the appellee does not seem to
have taken interest in the administrative and criminal cases against the appellant. His
only concern appears to have been directed at obtaining from the doctor a large
money payment, since he sued for P50,000.00 damages and P3,000.00 attorney's fees,
an "indemnity" claim that, under the circumstances of record, was clearly exaggerated.
The dissenting Justices of the Court of Appeals have aptly remarked that:
It seems to us that the normal reaction of a husband who righteously feels outraged by
the abortion which his wife has deliberately sought at the hands of a physician would
be highminded rather than mercenary; and that his primary concern would be to see to
it that the medical profession was purged of an unworthy member rather than turn his
wife's indiscretion to personal profit, and with that idea in mind to press either the
administrative or the criminal cases he had filed, or both, instead of abandoning them
in favor of a civil action for damages of which not only he, but also his wife, would be
the beneficiaries.

It is unquestionable that the appellant's act in provoking the abortion of appellee's wife,
without medical necessity to warrant it, was a criminal and morally reprehensible act,
that can not be too severely condemned; and the consent of the woman or that of her
husband does not excuse it. But the immorality or illegality of the act does not justify an
award of damage that, under the circumstances on record, have no factual or legal
basis.

The decision appealed from is reversed, and the complaint ordered dismissed. Without
costs.

Let a copy of this decision be furnished to the Department of Justice and the Board of
Medical Examiners for their information and such investigation and action against the
appellee Antonio Geluz as the facts may warrant.