MAMBULAO LUMBER CO V.

PNB 22 SCRA 359

On May 5, 1956 the plaintiff applied for an industrial loan of P155,000 (approved for a loan of P100,000 only) with the
Naga Branch of defendant PNB. To secure payment, the plaintiff mortgaged a parcel of land, together with the buildings
and improvements existing thereon, situated in the poblacion of Jose Panganiban (formerly Mambulao), province of
Camarines Norte. The PNB released from the approvedloan the sum of P27,500, and another release of P15,500.The
plaintiff failed to pay the amortization on the amounts released to and received by it. It was found that the plaintiff had
already stopped operation about the end of 1957 or early part of 1958.The unpaid obligation of the plaintiff as of
September 22, 1961, amounted to P57,646.59, excluding attorney's fees. A foreclosure sale of the parcel of land,
together with the buildings and improvements thereon was, held on November 21, 1961, and the said property was sold
to the PNB for the sum of P56,908.00, subject to the right of the plaintiff to redeem the same within a period of one
year.
The plaintiff sent a letter reiterating its request that the foreclosure sale of the mortgaged chattels be discontinued on
the grounds that the mortgaged indebtedness had been fully paid and that it could not be legally effected at a place
other than the City of Manila. The trial court sentenced the Mambulao Lumber Company to pay to the defendant PNB
the sum of P3,582.52 with interest thereon at the rate of 6% per annum. The plaintiff on appeal advanced that its total
indebtedness to the PNB as of November 21, 1961, was only P56,485.87 and not P58,213.51 as concluded by the court
a quo; hence, the proceeds of the foreclosure sale of its real property alone in the amount of P56,908.00 on that date,
added to the sum of P738.59 it remitted to the PNB thereafter was more than sufficient to liquidate its obligation,
thereby rendering the subsequent foreclosure sale of its chattels unlawful; That for the acts of the PNB in proceeding
with the sale of the chattels, in utter disregard of plaintiff's vigorous opposition thereto, and in taking possession thereof
after the sale thru force, intimidation, coercion, and by detaining its "man-in-charge" of said properties, the PNB is liable
to plaintiff for damages and attorney's fees.
ISSUE:
Whether or not PNB may be held liable to plaintiff Corporation for damages and attorneys fees.
HELD:
Herein appellant's claim for moral damages, seems to have no legal or factual basis. Obviously,
anartificial person like herein appellant corporation cannot experience physical sufferings, mental anguish, fright,
serious anxiety, wounded feelings, moral shock or social humiliation which are basis of moral damages. A corporation
may have a good reputation which, if besmirched, may also be aground for the award of moral damages. The same
cannot be considered under the facts of this case, however, not only because it is admitted that herein appellant had
already ceased in its business operation at the time of the foreclosure sale of the chattels, but also for the reason that
whatever adverse effects of the foreclosure sale of the chattels could have upon its reputation or business standing
would undoubtedly be the same whether the sale was conducted at Jose Panganiban, Camarines Norte, or in Manila
which is the place agreed upon by the parties in the mortgage contract.
But for the wrongful acts of herein appellee bank and the deputy sheriff of Camarines Norte in proceeding with the sale
in utter disregard of the agreement to have the chattels sold in Manila as provided for in the mortgage contract, to
which their attentions were timely called by herein appellant, and in disposing of the chattels in gross for the miserable
amount of P4,200.00, herein appellant should be awarded exemplary damages in the sum of P10,000.00. The
circumstances of the case also warrant the award of P3,000.00 as attorney's fees for herein appellant.

NATIONAL POWER CORPORATION VS. PHILIPP BROTHERS OCEANIC, INC.

369 SCRA 629 (2001)
FACTS :
National Power Corporation (NAPOCOR) issued invitations to bid for the supply and delivery of 120,000 metric tons of
imported coal for its Batangas Coal-Fired Thermal Power Plant of which Philipp Brothers Oceanic, Inc. (PHIBRO) bidded
and was accepted.
On July 10, 1987, PHIBRO told NAPOCOR that disputes might soon plague Australia that will seriously hamper its ability
to supply coal. On July 23 to July 31, 1987, PHIBRO informed NAPOCOR that unless a "strike-free" clause is incorporated
in the charter party or the contract of carriage, the ship owners are unwilling to load their cargo. In order to hasten the
transfer of coal, they should share the burden of the "strike-free" clause but NAPOCOR refused.
PHIBRO effected its first shipment only on November 17, 1987 which was supposed to be on the 30th day after receipt
of the letter of credit of which it received on August 6, 1987.
Consequently, In October 1987: NAPOCOR once more advertised for the delivery of coal to its Calaca thermal plant of
which PHIBRO applied but was rejected since it was not able to satisfy the demand for damages on its delay. PHIBRO
filed for damages in the RTC alleging that the rejection was tainted with malice and bad faith.
After the trial, the trial court rendered a decision in favor of PHIBRO, ordering the defendant NAPOCOR to reinstate
PHIBRO in the defendant National Power Corporations list of accredited bidders and indemnify the same actual, moral
and exemplary damages. On appeal, the CA affirmed in toto the decision of RTC.
ISSUE:
Whether the Trial Court erred in awarding moral damages to PHIBRO.
HELD:
The circumstances under which NAPOCOR disapproved PHIBRO's pre-qualification to bid do not show an intention to
cause damage to the latter. The measure it adopted was one of self-protection. Consequently, the court cannot penalize
NAPOCOR for the course of action it took. NAPOCOR cannot be made liable for actual, moral and exemplary damages.
The award of moral damages is improper. To reiterate, NAPOCOR did not act in bad faith. Moreover, moral damages
are not, as a general rule, granted to a corporation. While it is true that besmirched reputation is included in moral
damages, it cannot cause mental anguish to a corporation, unlike in the case of a natural person, for a corporation has
no reputation in the sense that an individual has, and besides, it is inherently impossible for a corporation to suffer
mental anguish.
In LBC Express, Inc. v. Court of Appeals, we ruled:
Moral damages are granted in recompense for physical suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, and similar injury.
A corporation, being an artificial person and having existence only in legal contemplation, has no feelings, no emotions,
no senses; therefore, it cannot experience physical suffering and mental anguish. Mental suffering can be experienced
only by one having a nervous system and it flows from real ills, sorrows, and griefs of life all of which cannot be
suffered by respondent bank as an artificial person.

ABS-CBN BROADCASTING NETWORK V. CA, 301 SCRA 589

Facts:
In 1990, ABS-CBN and VIVA executed a Film Exhibition Agreement whereby VIVA gave ABS-CBN an exclusive right to exhibit
some VIVA films. According to the agreement, ABS-CBN shall have the right of first refusal to the next 24 VIVA films for TV telecast
under such terms as may be agreed upon by the parties, however, such right shall be exercised by ABS-CBN from the actual offer in
writing.
Sometime in December 1991, VIVA, through Vicente Del Rosario (Executive Producer), offered ABS-CBN through VP Charo
Santos-Concio, a list of 3 film packages from which ABS-CBN may exercise its right of first refusal. ABS-CBN, however through Mrs.
Concio, tick off only 10 titles they can purchase among which is the film Maging Sino Ka Man which is one of the subjects of the
present case, therefore, it did not accept the said list as per the rejection letter authored by Mrs. Concio sent to Del Rosario.
Subsequently, Del Rosario approached Mrs. Concio with another list consisting of 52 original movie titles and 104 re-runs,
proposing to sell to ABS-CBN airing rights for P60M (P30M in cash and P30M worth of television spots). Del Rosario and ABS-CBNs
General Manager, Eugenio Lopez III, met at the Tamarind Grill Restaurant in QC to discuss the package proposal but to no avail.
Four days later, Del Rosario and Mr. Graciano Gozon, Senior VP of Finance of Republic Broadcasting Corporation
(RBS/Channel 7) discussed the terms and conditions of VIVAs offer. A day after that, Mrs. Concio sent the draft of the contract
between ABS-CBN and VIVA which contained a counter-proposal covering 53 films for P35M. VIVAs Board of Directors rejected the
counter-proposal as it would not sell anything less than the package of 104 films for P60M. After said rejection, ABS-CBN closed a
deal with RBS including the 14 films previously ticked off by ABS-CBN.
Consequently, ABS-CBN filed a complaint for specific performance with prayer for a writ of preliminary injunction and/or
TRO against RBS, VIVA and Del Rosario. RTC then enjoined the latter from airing the subject films. RBS posted a P30M counterbond
to dissolve the injunction. Later on, the trial court as well as the CA dismissed the complaint holding that there was no meeting of
minds between ABS-CBN and VIVA, hence, there was no basis for ABS-CBNs demand, furthermore, the right of first refusal had
previously been exercised.
Hence, the present petition, ABS-CBN argued that an agreement was made during the meeting of Mr. Lopez and Del
Rosario jotted down on a napkin (this was never produced in court). Moreover, it had yet to fully exercise its right of first refusal
since only 10 titles were chosen from the first list. As to actual, moral and exemplary damages, there was no clear basis in awarding
the same.
Issue: WON a contract was perfected between ABS-CBN and VIVA and WON moral damages may be awarded to a corporation
Held: Both NO.
Ratio:
Contracts that are consensual in nature are perfected upon mere meeting of the minds. Once there is concurrence
between the offer and the acceptance upon the subject matter, consideration, and terms of payment a contract is produced. The
offer must be certain. To convert the offer into a contract, the acceptance must be absolute and must not qualify the terms of the
offer; it must be plain, unequivocal, unconditional, and without variance of any sort from the proposal. A qualified acceptance, or
one that involves a new proposal, constitutes a counter-offer and is a rejection of the original offer. Consequently, when something
is desired which is not exactly what is proposed in the offer, such acceptance is not sufficient to generate consent because any
modification or variation from the terms of the offer annuls the offer.
After Mr. Del Rosario of Viva met Mr. Lopez of ABS-CBN to discuss the package of films, ABS-CBN, sent through Ms. Concio,
counter-proposal in the form a draft contract. This counter-proposal could be nothing less than the counter-offer of Mr. Lopez
during his conference with Del Rosario. Clearly, there was no acceptance of VIVAs offer, for it was met by a counter-offer which
substantially varied the terms of the offer.
In the case at bar, VIVA through its Board of Directors, rejected such counter-offer. Even if it be conceded arguendo that
Del Rosario had accepted the counter-offer, the acceptance did not bind VIVA, as there was no proof whatsoever that Del Rosario
had the specific authority to do so.
Under the Corporation Code, unless otherwise provided by said Code, corporate powers, such as the power to enter into
contracts, are exercised by the Board of Directors. However, the Board may delegate such powers to either an executive
committee or officials or contracted managers. The delegation, except for the executive committee, must be for specific

purposes. Delegation to officers makes the latter agents of the corporation; accordingly, the general rules of agency as to the
binding effects of their acts would apply. For such officers to be deemed fully clothed by the corporation to exercise a power of the
Board, the latter must specially authorize them to do so. That Del Rosario did not have the authority to accept ABS-CBNs counteroffer was best evidenced by his submission of the draft contract to VIVAs Board of Directors for the latters approval. In any
event, there was between Del Rosario and Lopez III no meeting of minds.
The testimony of Mr. Lopez and the allegations in the complaint are clear admissions that what was supposed to have been
agreed upon at the Tamarind Grill between Mr. Lopez and Del Rosario was not a binding agreement. It is as it should be because
corporate power to enter into a contract is lodged in the Board of Directors. (Sec. 23, Corporation Code). Without such board
approval by the Viva board, whatever agreement Lopez and Del Rosario arrived at could not ripen into a valid contact binding
upon Viva.
However, the Court find for ABS-CBN on the issue of damages. Moral damages are in the category of an award designed to
compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. The award of moral damages
cannot be granted in favor of a corporation because, being an artificial person and having existence only in legal contemplation,
it has no feelings, no emotions, no senses. It cannot, therefore, experience physical suffering and mental anguish, which can be
experienced only by one having a nervous system. The statement that a corporation may recover moral damages if it has a good
reputation that is debased, resulting in social humiliation is an obiter dictum. On this score alone the award for damages must be
set aside, since RBS is a corporation.

Roman Catholic Apostolic Administrator of Davao Inc. v. LRC & RD of Davao, 102 Phil 596

FACTS:
October 4, 1954: Mateo L. Rodis, a Filipino citizen and resident of the City of Davao, executed a deed of
sale of a parcel of land in favor of the Roman Catholic Apostolic Administrator of Davao Inc.(Roman), a
corporation sole organized and existing in accordance with Philippine Laws, with Msgr. Clovis Thibault, a
Canadian citizen, as actual incumbent.
The Register of Deeds of Davao for registration, having in mind a previous resolution of the CFI in
Carmelite Nuns of Davao were made to prepare an affidavit to the effect that 60% of the members of their
corp. were Filipino citizens when they sought to register in favor of their congregation of deed of donation
of a parcel of land, required it to submit a similar affidavit declaring the same.
June 28, 1954: Roman in the letter expressed willingness to submit an affidavit but not in the same tenor as
the Carmelite Nuns because it had five incorporators while as a corporation sole it has only one and it was
ownership through donation and this was purchased
As the Register of the Land Registration Commissioner (LRC) : Deeds has some doubts as to the
registerability, the matter was referred to the Land Registration Commissioner en consulta for resolution
(section 4 of Republic Act No. 1151)
LRC:
In view of the provisions of Section 1 and 5 of Article XIII of the Philippine Constitution, the vendee was
not qualified to acquire private lands in the Philippines in the absence of proof that at least 60 per centum of
the capital, property, or assets of the Roman Catholic Apostolic Administrator of Davao, Inc., was actually
owned or controlled by Filipino citizens, there being no question that the present incumbent of the
corporation sole was a Canadian citizen
ordered the Registered Deeds of Davao to deny registration of the deed of sale in the absence of proof of
compliance with such condition

action for mandamus was instituted by Roman alleging the land is held in true for the benefit of the Catholic
population of a place
ISSUE: W/N Roman is qualified to acquire private agricultural lands in the Philippines pursuant to the provisions
of Article XIII of the Constitution

HELD: YES. Register of Deeds of the City of Davao is ordered to register the deed of sale
A corporation sole consists of one person only, and his successors (who will always be one at a time), in
some particular station, who are incorporated by law in order to give them some legal capacities and
advantages, particularly that of perpetuity, which in their natural persons they could not have had.
In this sense, the king is a sole corporation; so is a bishop, or dens, distinct from their several chapters
corporation sole
1. composed of only one persons, usually the head or bishop of the diocese, a unit which is not subject to
expansion for the purpose of determining any percentage whatsoever
2. only the administrator and not the owner of the temporalities located in the territory comprised by said
corporation sole and such temporalities are administered for and on behalf of the faithful residing in the
diocese or territory of the corporation sole
3. has no nationality and the citizenship of the incumbent and ordinary has nothing to do with the operation,
management or administration of the corporation sole, nor effects the citizenship of the faithful connected
with their respective dioceses or corporation sole.
Constitution demands that in the absence of capital stock, the controlling membership should be composed
of Filipino citizens. (Register of Deeds of Rizal vs. Ung Sui Si Temple)
undeniable proof that the members of the Roman Catholic Apostolic faith within the territory of Davao are
predominantly Filipino citizens
presented evidence to establish that the clergy and lay members of this religion fully covers the percentage
of Filipino citizens required by the Constitution
fact that the law thus expressly authorizes the corporations sole to receive bequests or gifts of real
properties (which were the main source that the friars had to acquire their big haciendas during the Spanish
regime), is a clear indication that the requisite that bequests or gifts of real estate be for charitable,
benevolent, or educational purposes, was, in the opinion of the legislators, considered sufficient and
adequate protection against the revitalization of religious landholdings.
as in respect to the property which they hold for the corporation, they stand in position of TRUSTEES and
the courts may exercise the same supervision as in other cases of trust
JG SUMMIT HOLDINGS V. CA, 450 SCRA 169
FACTS:
The National Investment and Development Corporation (NIDC), a government corporation, entered into a Joint Venture
Agreement (JVA) with Kawasaki Heavy Industries, Ltd. for the construction, operation and management of the Subic
National Shipyard, Inc., later became the Philippine Shipyard and Engineering Corporation (PHILSECO). Under the JVA,
NIDC and Kawasaki would maintain a shareholding proportion of 60%-40% and that the parties have the right of first
refusal in case of a sale.
Through a series of transfers, NIDCs rights, title and interest in PHILSECO eventually went to the National Government.

In the interest of national economy, it was decided that PHILSECO should be privatized by selling 87.67% of its total
outstanding capital stock to private entities. After negotiations, it was agreed that Kawasakis right of first refusal under the
JVA be exchanged for the right to top by five percent the highest bid for said shares. Kawasaki that Philyards Holdings,
Inc. (PHI), in which it was a stockholder, would exercise this right in its stead.
During bidding, Kawasaki/PHI Consortium is the losing bidder. Even so, because of the right to top by 5% percent the
highest bid, it was able to top JG Summits bid. JG Summit protested, contending that PHILSECO, as a shipyard is a
public utility and, hence, must observe the 60%-40% Filipino-foreign capitalization. By buying 87.67% of PHILSECOs
capital stock at bidding, Kawasaki/PHI in effect now owns more than 40% of the stock.
ISSUE:
* Whether or not PHILSECO is a public utility
* Whether or not Kawasaki/PHI can purchase beyond 40% of PHILSECOs stocks

HELD:
In arguing that PHILSECO, as a shipyard, was a public utility, JG Summit relied on sec. 13, CA No. 146. On the other
hand, Kawasaki/PHI argued that PD No. 666 explicitly stated that a shipyard was not a public utility. But the SC stated
that sec. 1 of PD No. 666 was expressly repealed by sec. 20, BP Blg. 391 and when BP Blg. 391 was subsequently
repealed by EO 226, the latter law did not revive sec. 1 of PD No. 666. Therefore, the law that states that a shipyard is a
public utility still stands.
A shipyard such as PHILSECO being a public utility as provided by law is therefore required to comply with the 60%-40%
capitalization under the Constitution. Likewise, the JVA between NIDC and Kawasaki manifests an intention of the parties
to abide by this constitutional mandate. Thus, under the JVA, should the NIDC opt to sell its shares of stock to a third
party, Kawasaki could only exercise its right of first refusal to the extent that its total shares of stock would not exceed
40% of the entire shares of stock. The NIDC, on the other hand, may purchase even beyond 60% of the total shares. As a
government corporation and necessarily a 100% Filipino-owned corporation, there is nothing to prevent its purchase of
stocks even beyond 60% of the capitalization as the Constitution clearly limits only foreign capitalization.
Kawasaki was bound by its contractual obligation under the JVA that limits its right of first refusal to 40% of the total
capitalization of PHILSECO. Thus, Kawasaki cannot purchase beyond 40% of the capitalization of the joint venture on
account of both constitutional and contractual proscriptions

PEOPLE V. QUASHA, 93 PHIL 333