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G.R. No. L-25172 May 24, 1974 CASTRO, J.: LUIS MA. ARANETA, Petitioner, vs. ANTONIO R.

DE JOYA, Respondent. Sometime in November 1952 the respondent, then general manager of the Ace Advertising, proposed to the board of directors 1 that an employee, Ricardo Taylor, be sent to the United States to take up special studies in television. The board, however, failed to act on the proposal. Nevertheless, in September 1953 the respondent sent Taylor abroad. J. Antonio Araneta, a company director, inquired about the trip and was assured by the respondent that Taylor's expenses would be defrayed not by the company but by other parties. This was thereafter confirmed by the respondent in a memorandum. While abroad,Taylor continued to receive his salaries. The items corresponding to his salaries appeared in vouchers prepared upon the orders of, and approved by, the respondent and were included in the semi-monthly payroll checks for the employees of the corporation. The petitioner signed three of these checks.The others were signed by either the respondent, or Vicente Araneta (company treasurer) who put up part of the bill connected with Taylor's trip and also handed him letters for delivery in the United States. Ace Advertising filed a complaint with the court of first instance of Manila against the respondent for recovery of the total sum disbursed to Taylor. The respondent, in his answer, denied the charge and claimed that the trip was nonetheless ratified by the company's board of directors, and that in any event under the by-laws he had the discretion, as general manager, to authorize the trip which was for the company's benefit. A 3rd-party complaint was also filed by the respondent against Vicente Araneta, the petitioner and Ricardo Taylor. The respondent proved that Vicente Araneta, as treasurer of the firm, signed a check representing the company's share of the transportation expense of Taylor to the United States, and that a series of payroll checks which included the salaries of Taylor, was signed by Vicente Araneta and the petitioner who is a vice-president of the company. Both Aranetas disowned any personal liability, claiming that they signed the checks in good faith as they were approved by the respondent. Trial court rendered judgment ordering the respondent to pay the Ace Advertising . CA AFFIRMED. The basic legal issue is whether the petitioner is guilty of a quasi-delict as held below. It is our view, and we so hold, that the judgment of the Court of Appeals should be upheld. The petitioner's assertion that he signed the questioned payroll checks in good faith has not been substantiated, he in particular not having testified or offered testimony to prove such claim. Upon the contrary, in spite of his being a vice-president and director of the Ace Advertising, the petitioner remained passive, throughout the period of Taylor's stay abroad, concerning the unauthorized disbursements of corporate funds for the latter. This plus the fact that he even approved thrice payroll checks for the payment of Taylor's salary, demonstrate quite distinctly that the petitioner neglected to perform his duties properly, to the damage of the firm of which he was an officer. The fact that he was occupying a contractual position at the Ace Advertising is of no moment. The existence of a contract between the parties, as has been repeatedly held by this Court, constitutes no bar to the commission of a tort by one against the other and the consequent recovery of damages. [G.R. No. 107019. March 20, 1997] HERMOSISIMA, JR., J.: FRANKLIN M. DRILON vs. COURT OF APPEALS

In a letter-complaint to then Secretary of Justice Franklin Drilon1 dated March 20, 1990, General Renato de Villa,2 who 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 Adaza, for their alleged participation in the failed December 1989 coup detat. The letter-complaint was based on the affidavit of Brigadier General Galido et al. Gen. de Villas letter-complaint with its annexes was referred for preliminary inquiry to the Special Composite Team of Prosecutors. 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. 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.4chanroblesvirtuallawlibrary The above Resolution became the basis for the filing of an Information 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. Feeling aggrieved by the institution of these proceedings against him, private respondent Adaza filed a complaint for damages, 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 Adazas complaint on the ground that said complaint states no actionable wrong constituting a valid cause of action against petitioners. public respondent judge issued order 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. WON the case for damages is a malicious prosecution Held: yes 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. 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.

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). 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. 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 informaion 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. 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.22chanroblesvirtuallawlibrary 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 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.

G.R. No. L-66865 January 13, 1989 CRUZ, J.: MAGTANGGOL QUE Petitioner, vs. THE HON. INTERMEDIATE APPELLATE COURT and NICOLAS, Respondents. law library

The case arose when Magtanggol Que, the herein petitioner, filed a complaint for estafa against private respondent Antonio for issuance of several checks which were subsequently dishonored when presented for encashment. The charge was dismissed for lack of merit, the investigating fiscal holding that the controversy was an accounting matter that did not necessarily involve deceit on the part of Nicolas. Subsequently, Nicolas filed his own complaint for damages against Que, for what he claimed was his malicious prosecution by the latter. It was now Que's turn to claim harassment. In his counterclaim, he averred that Nicolas had maliciously filed the complaint in Bulacan although he was a resident of Caloocan City; that the private respondent was really indebted to him in any 4case; and that it was he who had suffered damages as a result of the unwarranted suit. law library The dispute goes back to several previous business transactions between the protagonists when they were still on amicable terms. The private respondent ordered from the petitioner certain amounts of canvass strollers which were delivered to and accepted by Nicolas, who issued five checks therefore to Que. The total face value of the cheeks was P7,600.00. Payment thereof was subsequently stopped by Nicolas and Que was unable to encash them. Nicolas explained later that he had ordered the "stop payment" because of defects in the articles sold which despite his requests Que had not corrected. Que for his part argued that the allegedly defective articles were never returned to him until after he had filed the charge for estafa and that Nicolas had earlier merely ignored his complaints about the dishonored checks. virtual law library The original decision written by the late Judge Benigno M. Puno held in favor of the plaintiff and awarded him the total amount of P80,500.00 in moral, exemplary, and nominal damages plus a P4,000.00 attorney's fee and the costs of the suit. The finding was that the defendant had acted maliciously in filing the estafa charge and in alleging that the plaintiff had issued the dishonored checks with deceit aforethought. law library whether or not the petitioner had instituted a malicious prosecution of the private respondent held: NO In the amended decision that reversed the original decision awarding damages to the private respondent, Judge Fernandez declared: 'In awarding plaintiff damages and attorney's fees in the total amount of P80,900.00, by way of moral, nominal and exemplary damages and attorney's fees, the Court overlooked the ruling that failure in suit is not per se an actionable wrong, that adverse result of an action does not per se make the act wrongful and subject the actor to payment of moral damages, for the law could not have meant to impose a penalty of a right to litigate, the right so precious that moral damages may be charged to those who exercise it erroneously; that reliance in good faith to counsel's advice given after a full and fair statement of all the facts to the attorney, does not render the party liable for damages and that it is immaterial that the attorney's advice is unsound or erroneous; and that where there is no clear showing of malice on the part of petitioner in filing the action, the worries and anxiety suffered by respondent are usually caused to the party haled into a court as a defendant, and there is no sufficient justification for awarding of damages. The resolution of dismissal by the Fiscal's office of Caloocan City is not tantamount to a decision in the sense that the proceedings had therein were merely summary in nature as the title of the proceeding 'preliminary investigation' so connotes. As a preliminary proceeding, it lacks the thoroughness and rigidity of an ordinary trial. The investigating fiscal was merely called upon to determine at first instance whether or not there exists a prima facie case to justify the filing of an infromation in court. In the case at bar, it is indisputable that the five checks issued by the private respondent had been dishonored and that the drawer had failed to make them good despite the protests of the

petitioner. Nicolas had merely ignored him. It is also a matter of record that the checks were post-dated, which made the petitioner assume that at the time they were issued the private respondent did not really have sufficient funds for their encashment. It could be, as the original decision assumed, that the checks were in the nature of promissory notes, to be made good when the articles delivered met with the drawer's approval. However, considering that the checks could not be encashed and the supposedly defective goods had not been returned by the drawer, the petitioner had reason to believe when he filed his complaint that the buyer had at the outset intended to deceive him. virtual law library The record shows the the criminal charge for estafa was filed by the petitioner with the fiscal's office on October 8, 1975, 19and that the supposedly defective articles were returned by the private respondent to the former's driver only on October 13, 1975. 20 The only evidence that the articles were defective was the testimony of the private respondent himself, who claimed that the buttons on the canvass strollers were misplaced. Considering that Nicolas and Que had apparently been cordial until then and that they were businessmen involved in a symbiotic relationship, the Court feels that what Nicolas would or should have done was request the petitioner to correct the claimed defects instead of arbitrarily stopping payment on the checks in question. Strangely, what the private respondent did instead was simply cut short a mutually profitable association with this hostile act. The petitioner had to find out for himself that the checks had been dishonored on orders of the drawer. law library The presence of probable cause signifies as a legal consequence the absence of malice. It is evident that the petitioner was not motivated by ill feeling but only by an anxiety to protect his his rights when he filed the criminal complaint for estafa with the fiscal's office. To constitute malicious prosecution, there must be proof that the prosecution was prompted by a sinister design to vex and humiliate a person that it was initiated deliberately by the defendant knowing that his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for prosecution does not make one liable for malicious prosecution We agree with the petitioner that the mere dismissal of the criminal complaint by the fiscal's office did not create a cause of action because the proceedings therein did not involve an exhaustive examination of the elements of malicious prosecution. The adverse result of an action does not per se make the wrongful and subject the actor to the payment of moral damages. The law could not have meant to impose a penalty on the right to litigate, such right is so precious that moral damages may not be charged on those who may exercise it erroneously. The acts of the petitioner and the private respondent have in the view of the Court been far from exemplary. The petitioner could have exercised a little more diligence in ascertaining the facts before filing the criminal complaint in the fiscal's office and provoking all this legal conflict. The private respondent, on the other hand, exhibited an undue belligerence that naturally excited the suspicions of the petitioner and later exacerbated their relations when he filed bis own complaint in Bulacan instead of Caloocan City.In the exercise of its discretion, the Court denies both parties their respective claims for damages and holds that each of them must bear the financial consequences of its own acts, including the litigation expenses. The damages awarded in the original and amended decisions are all disallowed.

G.R. No. L-51832 April 26, 1989 PADILLA, J.: RAFAEL PATRICIO, Petitioner, vs. THE HONORABLE OSCAR LEVISTE, JUDGE, CFI CAPIZ, BRANCH II and BIENVENIDO BACALOCOS, Respondents. Petitioner Rafael Patricio, an ordained Catholic priest, and actively engaged in social and civic affairs in Pilar, Capiz, where he is residing, was appointed Director General of the 1976 Religious and Municipal Town Fiesta of Pilar, Capiz. 10:00 o'clock in the evening, while a benefit dance was on-going in connection with the celebration of the town fiesta, petitioner together with two (2) policemen were posted near the gate of the public auditorium to check on the assigned watchers of the gate. Private respondent Bienvenido Bacalocos, President of the Association of Barangay Captains of Pilar, Capiz and a member of the Sangguniang Bayan, who was in a state of drunkenness and standing near the same gate together with his companions, struck a bottle of beer on the table causing an injury on his hand which started to bleed. Then, he approached petitioner in a hostile manner and asked the latter if he had seen his wounded hand, and before petitioner could respond, private respondent, without provocation, hit petitioner's face with his bloodied hand. As a consequence, a commotion ensued and private respondent was brought by the policemen to the municipal building. As a result of the incident, a criminal complaint for "Slander by Deed was flied by petitioner but the same was dismissed. Subsequently, a complaint for damages was filed by petitioner with the court a quo. In a decision 4 dated 18 April 1978, the court ruled in favor of herein petitioner (as complainant), holding private respondent liable to the former for moral damages as a result of the physical suffering, moral shock and social humiliation caused by private respondent's act of hitting petitioner on the face in public. a) Moral damages of P10,000. ib) Exemplary damages, P1,000.00 c) Attorney's fees, P2,000.00. WHEREFORE, tills Court reconsiders its decision to conform to the facts and the law, namely, that moral and exemplary damages, in order to merit, the plaintiff ought to have proven actual or compensatory damages. WHEREFORE, this case is ordered dismissed. As to the petitioner's claim for moral damages, we find the same to be meritorious. There is no question that moral damages may be recovered in cases where a defendant's wrongful act or omission has caused the complainant physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation and similar injury. An award of moral damages is allowed in cases specified or analogous to those provided in Article 2219 of the Civil Code. Private respondent's contention that there was no bad faith on his part in slapping petitioner on the face and that the incident was merely accidental is not tenable. It was established before the court a quo that there was an existing feud between the families of both petitioner and private respondent and that private respondent slapped the petitioner without provocation in the presence of several persons. librarylibrary Pursuant to Art. 21 of the Civil Code in relation to par. (10) of Art. 2219 of the same Code, "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." lThe fact that no actual or compensatory damage was proven before the trial court, does not adversely affect petitioner's

right to recover moral damages. Moral damages may be awarded in appropriate cases referred to in the chapter on human relations of the Civil Code (Articles 19 to 36), without need of proof that the wrongful act complained of had caused any physical injury upon the complainant. In addition to the award of moral damages, exemplary or corrective damages may be imposed upon herein private respondent by way of example or correction for the public good. Exemplary damages are required by public policy to suppress the wanton acts of the offender. They are an antidote so that the poison of wickedness may not run through the body politic. The amount of exemplary damages need not be proved where it is shown that plaintiff is entitled to either moral, temperate or compensatory damages, as the case may be, although such award cannot be recovered as a matter of right. virtual law library In cases where exemplary damages are awarded to the injured party, attorney's fees are also recoverable.

G.R. No. L-14986

July 31, 1962 MAKALINTAL, J.:

CORNELIO AMARO and JOSE AMARO, Plaintiffs-Appellants, vs. AMBROSIO SUMANGUIT, library Appellants filed suit for damages in the Court of First Instance of Negros Occidental against the chief of police of the City of Silay. Although not specifically alleged in the complaint, it is admitted by both parties, as shown in their respective briefs, that the action is predicated on Articles 21 and/or 27 of the Civil Code, which provide: 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. virtual law library ART. 27. Any person suffering material or moral loss because a public servant or employee refuses or neglects, without just cause, to perform his official duty may file an action for damages and other relief against the latter, without prejudice to any disciplinary administrative action that may be taken. The complaint was dismissed upon appellee's motion in the court below on the ground that it does not state facts sufficient to constitute a cause of action. WON DISMISSAL WAS CORRECT Held NO Jose Amaro was assaulted and shot at near the city government building of Silay; that the following day he, together with his father (Cornelio Amaro) and his witnesses, "went to the office of the defendant but instead of obtaining assistance to their complaint they were harassed and terrorized;" that in view thereof they "gave up and renounced their right and interest in the prosecution of the crime . . . .;" that upon advice of the City Mayor given to appellee an investigation (of said crime) was conducted and as a result the city attorney of Silay was about to file or had already filed an information for illegal discharge of firearm against the assailant; and that "having finished the investigation of the crime complained of, the defendant chief of police is now harassing the plaintiffs in their daily work, ordering them thru his police to appear in his office when he is absent, and he is about to order the arrest of the plaintiffs to take their signatures in prepared affidavits exempting the police from any dereliction of duty in their case against the perpetrator of the crime.ual law library

We are of the opinion that the facts set out constitute an actionable dereliction on appellee's part in the light of Article 27 of the Civil Code. That appellants were "harrased and terrorized" may be a conclusion of law and hence improperly pleaded. Their claim for relief, however, is not based on the fact of harassment and terrorization but on appellee's refusal to give them assistance, which it was his duty to do as an officer of the law. The requirement under the aforesaid provision that such refusal must be "without just cause" is implicit in the context of the allegation. The statement of appellee's dereliction is repeated in a subsequent paragraph of the complaint, where it is alleged that "he is about to order the arrest of the plaintiffs" to make them sign affidavits of exculpation in favor of the policemen. The fact, cited by the court below in the order subject to review, that appellants have another recourse (in connection with the crime of illegal discharge of firearm supposedly committed against one of them) as by filing their complaint directly with the city attorney of Silay or by lodging an administrative charge against appellee herein, does not preclude this action for damages under Article 27 of the Civil Code and hence does not justify its dismissal. [G.R. No. 120706. January 31, 2000] BELLOSILLO, J.: RODRIGO CONCEPCION, Petitioner, vs. COURT OF APPEALS and SPS. NESTOR NICOLAS and ALLEM NICOLAS, Respondents. spouses Nestor Nicolas and Allem Nicolas resided at Pasig City, in an apartment leased to them by the owner thereof, Florence "Bing" Concepcion, who also resided in the same compound where the apartment was located. Rodrigo Concepcion, brother of the deceased husband of Florence, angrily accosted Nestor at the latters apartment and accused him of conducting an adulterous relationship with Florence. He shouted, "Hoy Nestor, kabit ka ni Bing! x x x Binigyan ka pa pala ni Bing Concepcion ng P100,000.00 para umakyat ng Baguio. Pagkaakyat mo at ng asawa mo doon ay bababa ka uli para magkasarilinan kayo ni Bing."1 To clarify matters, Nestor went with Rodrigo, upon the latters dare, to see some relatives of the Concepcion family who allegedly knew about the relationship. However, those whom they were able to see denied knowledge of the alleged affair. The same accusation was hurled by Rodrigo against Nestor when the two (2) confronted Florence at the terrace of her residence. Florence denied the imputations and Rodrigo backtracked saying that he just heard the rumor from a relative. Thereafter, however, Rodrigo called Florence over the telephone reiterating his accusation and threatening her that should something happen to his sick mother, in case the latter learned about the affair, he would kill Florence. As a result of this incident, Nestor Nicolas felt extreme embarrassment and shame to the extent that he could no longer face his neighbors. Florence Concepcion also ceased to do business with him by not contributing capital anymore so much so that the business venture of the Nicolas spouses declined as they could no longer cope with their commitments to their clients and customers. To make matters worse, Allem Nicolas started to doubt Nestors fidelity resulting in frequent bickerings and quarrels during which Allem even expressed her desire to leave her husband. Consequently, Nestor was forced to write Rodrigo demanding public apology and payment of damages. Rodrigo pointedly ignored the demand, for which reason the Nicolas spouses filed a civil suit against him for damages. whether there is basis in law for the award of damages to private respondents, the Nicolas spouses Petitioner argues that in awarding damages to private respondents, the Court of Appeals was without legal basis to justify its verdict. The alleged act imputed to him by respondent spouses 1

does not fall under Arts. 262 and 22193 of the Civil Code since it does not constitute libel, slander, or any other form of defamation. Neither does it involve prying into the privacy of anothers residence or meddling with or disturbing the private life or family relation of another. Petitioner also insists that certain facts and circumstances of the case were manifestly overlooked, misunderstood or glossed over by respondent court which, if considered, would change the verdict. All told, these factual findings provide enough basis in law for the award of damages by the Court of Appeals in favor of respondents. We reject petitioners posture that no legal provision supports such award, the incident complained of neither falling under Art. 2219 nor Art. 26 of the Civil Code. It does not need further elucidation that the incident charged of petitioner was no less than an invasion on the right of respondent Nestor as a person. The philosophy behind Art. 26 underscores the necessity for its inclusion in our civil law. The Code Commission stressed in no uncertain terms that the human personality must be exalted. The sacredness of human personality is a concomitant consideration of every plan for human amelioration. The touchstone of every system of law, of the culture and civilization of every country, is how far it dignifies man. If the statutes insufficiently protect a person from being unjustly humiliated, in short, if human personality is not exalted - then the laws are indeed defective.11 Thus, under this article, the rights of persons are amply protected, and damages are provided for violations of a persons dignity, personality, privacy and peace of mind. It is petitioners position that the act imputed to him does not constitute any of those enumerated in Arts 26 and 2219. In this respect, the law is clear. The violations mentioned in the codal provisions are not exclusive but are merely examples and do not preclude other similar or analogous acts. Damages therefore are allowable for actions against a persons dignity, such as profane, insulting, humiliating, scandalous or abusive language.12 Under Art. 2217 of the Civil Code, moral damages which include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury, although incapable of pecuniary computation, may be recovered if they are the proximate result of the defendants wrongful act or omission. There is no question that private respondent Nestor Nicolas suffered mental anguish, besmirched reputation, wounded feelings and social humiliation as a proximate result of petitioners abusive, scandalous and insulting language. WHEREFORE, in light of the foregoing premises, the assailed Decision of the Court of Appeals affirming the judgment of the Regional Trial Court of Pasig City, Br. 167, holding Rodrigo Concepcion liable to the spouses Nestor Nicolas and Allem Nicolas for P50,000.00 as moral damages, P25,000.00 for exemplary damages, P10,000.00 for attorney's fees, plus costs of suit, is AFFIRMED.

[G.R. No. 47013. February 17, 2000] ANDRES LAO, Petitioner, v. COURT OF APPEALS, THE ASSOCIATED ANGLO-AMERICAN TOBACCO CORPORATION and ESTEBAN CO, Respondents. 2 3 1 1

PURISIMA, J .: PURISIMA The common factual background at bar follows: The Associated Anglo-American Tobacco Corporation (Corporation for brevity) entered into a "Contract of Sales Agent" with Andres Lao. Under the contract, Lao agreed to sell cigarettes manufactured and shipped by the Corporation to his business address in Tacloban City. Lao would in turn remit the sales proceeds to the Corporation. In compliance with the contract, Lao regularly remitted the proceeds of his sales to the Corporation, generating, in the process, a great deal of business. However, in February 1968 and until about seven (7) months later, Lao failed to accomplish his monthly sales report. In a conference in Cebu the President of the Corporation, reminded Lao of his enormous accounts and the difficulty of obtaining a tally thereon despite Laos avowal of regular remittances of his collections. vice-president and general manager of the Corporation, summoned Lao to Pasay City for an accounting. It was then and there established that Laos liability amounted to P525,053.47. And so, Lao and his brother Lao Y Ka, enlisted the services of the Sycip Gorres and Velayo Accounting Firm (SGV) to check and reconcile the accounts. Ching Kiat Kam allowed Lao to continue with the sales agency provided Lao would reduce his accountability to P200,000.00, the amount secured by the mortgage. The Corporation thereafter credited in favor of Lao the amount of P325,053.47 representing partial payments he had made but without prejudice to the result of the audit of accounts. However, the SGV personnel Lao had employed failed to conclude their services because the Corporation did not honor its commitment to assign two of its accountants to assist them. Neither did the Corporation allow the SGV men access to its records. Subsequently, the Corporation discovered that Lao was engaging in the construction business so much so that it suspected that Lao was diverting the proceeds of his sales to finance his business. In the demand letter counsel for the Corporation sought payment of the obligations of Lao, warning him of the intention of the Corporation to foreclose the mortgage. Attached to said letter was a statement of account indicating that Laos total obligations duly supported by receipts amounted to P248,990.82. Since Lao appeared to encounter difficulties in complying with his obligations under the contract of agency, the Corporation sent Ngo Kheng to supervise Laos sales operations in Leyte and Samar. Ngo Kheng discovered that, contrary to Laos allegation that he still had huge collectibles from his customers, nothing was due the Corporation from Laos clients. WHEREFORE, judgment is hereby rendered declaring plaintiff Andres Laos accountability to defendant Corporation in the amount of P167,745.20 and ordering him to pay said amount of P167,745.20 to defendant The Associated Anglo-American Tobacco Corporation." The Corporation appealed the decision, dated March 26, 1975, just as Lao appealed the supplemental decision, dated February 28, 1977, to the Court of Appeals. Docketed as CA-G.R. No. 62532-R, the appeal was resolved in the Decision of the Court of Appeals dated October 26, 1981,8 disposing thus: "WHEREFORE, in connection with the decision of March 26, 1975, defendant corporation is hereby ordered to pay plaintiffs P150,000.00 actual damages for loss of earnings, P30,000.00 by way of moral damages and P10,000.00 for exemplary damages. As modified, the decision is AFFIRMED in all other respects.

after finding a prima facie case against Lao, the Pasay City Fiscal filed an information for estafa against Lao, On December 17, 1974, without awaiting the termination of the criminal case, Lao lodged a complaint for malicious prosecution against the Corporation and Esteban Co, praying for an award of damages for violation of Articles 20 and 21 of the Civil Code. From the decision of the Court of First Instance of Samar in Civil Case No. 5528, finding that they are liable for malicious prosecution and therefore, they must pay Lao damages, the Corporation and Co appealed to the Court of Appeals. In affirming the lower courts decision, the Court of Appeals deduced from the facts established that the Corporation knew all along that Laos liability was civil in nature. However, after around four (4) years had elapsed and sensing that Civil Case No. 4452 would result in a decision against them, they instituted the criminal case for estafa. In awarding damages in the total amount of P330,000, the Court of Appeals took into account Laos social and business standing.45 ISSUE:Petitioner Corporation contends that the complaint for malicious prosecution brought by Lao during the pendency of subject criminal case for estafa, states no cause of action as it was prematurely filed when the criminal case that resulted in the acquittal of Lao was not yet terminated. HELD: yes Malicious prosecution 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. A similar ruling was laid down in Cabacungan v. Corrales[54] where the Court sustained the dismissal of an action for damages on the ground of prematurity. The records disclosed that the alleged false and malicious complaint charging plaintiffs with malicious mischief was still pending trial when the action for damages based on the subject complaint was brought. Premises studiedly viewed in proper perspective, the contention of Lao that the elements of an action for malicious prosecution are evidentiary in nature and should be determined at the time the plaintiff offers evidence and rests his case, is untenable. To rule otherwise would, in effect, sanction the filing of actions without a cause of action. The existence of a cause of action is determined solely by the facts alleged in the complaint. Consideration of other facts is proscribed and any attempt to prove extraneous circumstances is not allowed.55 Thus, the circumstance that the estafa case concluded in respondent Laos acquittal during the pendency of the complaint for malicious prosecution did not cure the defect of lack of cause of action at the time of filing of the complaint. Neither does the Court find merit in respondent Laos submission that the complaint for malicious prosecution is viable inasmuch as it is also anchored on Articles 20 and 21 of the Civil Code. This may appear to be a persuasive argument since there is no hard and fast rule which can be applied in the determination of whether or not the principle of abuse of rights has been violated, resulting in damages under the said articles of the Civil Code on Human Relations. Indeed, a 4 [ 5

party injured by the filing of a court case against him, even if he is later on absolved, may file a case for damages grounded either on the principle of abuse of rights or on malicious prosecution.58 However, whether based on the principle of abuse of rights or malicious prosecution, a reading of the complaint here reveals that it is founded on the mere filing of the estafa charge against respondent Lao. As such, it was prematurely filed and it failed to allege a cause of action. Should the action for malicious prosecution be entertained and the estafa charge would result in respondent Laos conviction during the pendency of the damage suit, even if it is based on Articles 20 and 21, such suit would nonetheless become groundless and unfounded. To repeat; that the estafa case, in fact, resulted in respondent Laos acquittal would not infuse a cause of action on the malicious prosecution case already commenced and pending resolution.

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