57 VOL.

301, JANUARY 21 1999

571
People vs. Court of Appeals
572
SUPREME COURT REPORTS ANNOTATED
ABS-CBN Broadcasting Corporation vs. Court of Appeals
G.R. No. 128690. January 21, 1999.*
ABS-CBN BROADCASTING CORPORATION, petitioner, vs. HONORABLE
COURT OF APPEALS, REPUBLIC BROADCASTING CORP., VIVA
PRODUCTIONS, INC., and VICENTE DEL ROSARIO, respondents.

NATURE: PETITION for review on certiorari of a decision of the Court of Appeals.

In this petition for review on certiorari, petitioner ABS-CBN Broadcasting Corp.
(hereafter ABS-CBN) seeks to reverse and set aside the decision1 of 31 October 1996
and the resolution2 of 10 March 1997 of the Court of Appeals in CA- G.R. CV No.
44125. The former affirmed with modification the decision3 of 28 April 1993 of the
Regional Trial Court (RTC) of Quezon City, Branch 80, in Civil Case No. Q-92-12309.
The latter denied the motion to reconsider the decision of 31 October 1996.
FACTS:
In 1992, ABS-CBN Broadcasting Corporation, through its vice president Charo Santos-
Concio, requested Viva Production, Inc. to allow ABS-CBN to air at least 14 films
produced by Viva. Pursuant to this request, a meeting was held between Viva’s
representative (Vicente Del Rosario) and ABS-CBN’s Eugenio Lopez (General
Manager) and Santos-Concio was held on April 2, 1992. During the meeting Del
Rosario proposed a film package which will allow ABS-CBN to air 104 Viva films for
P60 million. Later, Santos-Concio, in a letter to Del Rosario, proposed a
counterproposal of 53 films (including the 14 films initially requested) for P35 million.
Del Rosario presented the counter offer to Viva’s Board of Directors but the Board
rejected the counter offer. Several negotiations were subsequently made but on April
29, 1992, Viva made an agreement with Republic Broadcasting Corporation (referred to
as RBS – or GMA 7) which gave exclusive rights to RBS to air 104 Viva films including
the 14 films initially requested by ABS-CBN.
ABS-CBN now filed a complaint for specific performance against Viva as it alleged that
there is already a perfected contract between Viva and ABS-CBN in the April 2, 1992
meeting. Lopez testified that Del Rosario agreed to the counterproposal and he (Lopez)
even put the agreement in a napkin which was signed and given to Del Rosario. ABS-
CBN also filed an injunction against RBS to enjoin the latter from airing the films. The
injunction was granted. RBS now filed a countersuit with a prayer for moral damages
as it claimed that its reputation was debased when they failed to air the shows that they
promised to their viewers. RBS relied on the ruling in People vs Manero and Mambulao
Lumber vs PNB which states that a corporation may recover moral damages if it “has a
good reputation that is debased, resulting in social humiliation”. The trial court ruled
in favor of Viva and RBS. The Court of Appeals affirmed the trial court.

ISSUE:
1. Whether or not a contract was perfected in the April 2, 1992 meeting between
the representatives of the two corporations.
2. Whether or not a corporation, like RBS, is entitled to an award of moral
damages upon grounds of debased reputation.

HELD:
1. No. There is no proof that a contract was perfected in the said meeting. Lopez’
testimony about the contract being written in a napkin is not corroborated because the
napkin was never produced in court. Further, there is no meeting of the minds because
Del Rosario’s offer was of 104 films for P60 million was not accepted. And that the
alleged counter-offer made by Lopez on the same day was not also accepted because
there’s no proof of such. The counter offer can only be deemed to have been made days
after the April 2 meeting when Santos-Concio sent a letter to Del Rosario containing
the counter-offer. Regardless, there was no showing that Del Rosario accepted. But
even if he did accept, such acceptance will not bloom into a perfected contract because
Del Rosario has no authority to do so.
As a rule, corporate powers, such as the power; to enter into contracts; are exercised by
the Board of Directors. But this power may be delegated to a corporate committee, a
corporate officer or corporate manager. Such a delegation must be clear and specific. In
the case at bar, there was no such delegation to Del Rosario. The fact that he has to
present the counteroffer to the Board of Directors of Viva is proof that the contract
must be accepted first by the Viva’s Board. Hence, even if Del Rosario accepted the
counter-offer, it did not result to a contract because it will not bind Viva sans
authorization.
2. No. 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 call be experienced only by one having a nervous
system. No moral damages can be awarded to a juridical person. The statement in the
case of People vs Manero and Mambulao Lumber vs PNB is a mere obiter dictum hence
it is not binding as a jurisprudence.
WHEREFORE, the instant petition is GRANTED. The challenged decision of the Court
of Appeals in CA-G.R. CV No. 44125 is hereby REVERSED except as to unappealed
award of attorney’s fees in favor of VIVA Productions, Inc.