LIWAYWAY VINZONS-CHATO, petitioner,
vs.
FORTUNE TOBACCO CORPORATION, respondent.
DECISION
YNARES-SANTIAGO, J.:
Petitioner assails the May 7, 1999 Decision1 of the Court of Appeals in
CA-G.R. SP No. 47167, which affirmed the September 29, 1997 Order 2
of the Regional Trial Court (RTC) of Marikina, Branch 272, in Civil
Case No. 97-341-MK, denying petitioner’s motion to dismiss. The
complaint filed by respondent sought to recover damages for the
alleged violation of its constitutional rights arising from petitioner’s
issuance of Revenue Memorandum Circular No. 37-93 (RMC 37-93),
which the Court declared invalid in Commissioner of Internal Revenue
v. Court of Appeals.3
Petitioner Liwayway Vinzons-Chato was then the Commissioner of
Internal Revenue while respondent Fortune Tobacco Corporation is an
entity engaged in the manufacture of different brands of cigarettes,
among which are "Champion," "Hope," and "More" cigarettes.
On June 10, 1993, the legislature enacted Republic Act No. 7654 (RA
7654), which took effect on July 3, 1993. Prior to its effectivity, cigarette
brands ‘Champion," "Hope," and "More" were considered local brands
subjected to an ad valorem tax at the rate of 20-45%. However, on July
1, 1993, or two days before RA 7654 took effect, petitioner issued
RMC 37-93 reclassifying "Champion," "Hope," and "More" as locally
manufactured cigarettes bearing a foreign brand subject to the 55%
ad valorem tax.4 RMC 37-93 in effect subjected "Hope," "More," and
"Champion" cigarettes to the provisions of RA 7654, specifically, to
Sec. 142,5 (c)(1) on locally manufactured cigarettes which are
currently classified and taxed at 55%, and which imposes an ad
valorem tax of "55% provided that the minimum tax shall not be less
than Five Pesos (P5.00) per pack."6
On July 2, 1993, at about 5:50 p.m., BIR Deputy Commissioner Victor
A. Deoferio, Jr. sent via telefax a copy of RMC 37-93 to Fortune
Tobacco but it was addressed to no one in particular. On July 15,
1993, Fortune Tobacco received, by ordinary mail, a certified xerox
copy of RMC 37-93. On July 20, 1993, respondent filed a motion for
reconsideration requesting the recall of RMC 37-93, but was denied in
a letter dated July 30, 1993. 7 The same letter assessed respondent for
ad valorem tax deficiency amounting to P9,598,334.00 (computed on
the basis of RMC 37-93) and demanded payment within 10 days from
receipt thereof.8 On August 3, 1993, respondent filed a petition for
review with the Court of Tax Appeals (CTA), which on September 30,
1993, issued an injunction enjoining the implementation of RMC 37-
93.9 In its decision dated August 10, 1994, the CTA ruled that RMC 37-
93 is defective, invalid, and unenforceable and further enjoined
petitioner from collecting the deficiency tax assessment issued
pursuant to RMC No. 37-93. This ruling was affirmed by the Court of
Appeals, and finally by this Court in Commissioner of Internal Revenue
v. Court of Appeals.10 It was held, among others, that RMC 37-93, has
fallen short of the requirements for a valid administrative issuance.
On April 10, 1997, respondent filed before the RTC a complaint 11 for
damages against petitioner in her private capacity. Respondent
contended that the latter should be held liable for damages under
Article 32 of the Civil Code considering that the issuance of RMC 37-93
violated its constitutional right against deprivation of property without
due process of law and the right to equal protection of the laws.
Petitioner filed a motion to dismiss12 contending that: (1) respondent
has no cause of action against her because she issued RMC 37-93 in
the performance of her official function and within the scope of her
authority. She claimed that she acted merely as an agent of the
Republic and therefore the latter is the one responsible for her acts; (2)
the complaint states no cause of action for lack of allegation of malice
or bad faith; and (3) the certification against forum shopping was
signed by respondent’s counsel in violation of the rule that it is the
plaintiff or the principal party who should sign the same.
On September 29, 1997, the RTC denied petitioner’s motion to dismiss
holding that to rule on the allegations of petitioner would be to
prematurely decide the merits of the case without allowing the parties
to present evidence. It further held that the defect in the certification
against forum shopping was cured by respondent’s submission of the
corporate secretary’s certificate authorizing its counsel to execute the
certification against forum shopping. The dispositive portion thereof,
states:
WHEREFORE, foregoing premises considered, the motion
to dismiss filed by the defendant Liwayway Vinzons-Chato
and the motion to strike out and expunge from the record the
said motion to dismiss filed by plaintiff Fortune Tobacco
Corporation are both denied on the grounds aforecited. The
defendant is ordered to file her answer to the complaint
within ten (10) days from receipt of this Order.
SO ORDERED.13
The case was elevated to the Court of Appeals via a petition for
certiorari under Rule 65. However, same was dismissed on the ground
that under Article 32 of the Civil Code, liability may arise even if the
defendant did not act with malice or bad faith. The appellate court
ratiocinated that Section 38, Book I of the Administrative Code is the
general law on the civil liability of public officers while Article 32 of the
Civil Code is the special law that governs the instant case.
Consequently, malice or bad faith need not be alleged in the complaint
for damages. It also sustained the ruling of the RTC that the defect of
the certification against forum shopping was cured by the submission
of the corporate secretary’s certificate giving authority to its counsel to
execute the same.
Undaunted, petitioner filed the instant recourse contending that the suit
is grounded on her acts done in the performance of her functions as a
public officer, hence, it is Section 38, Book I of the Administrative Code
which should be applied. Under this provision, liability will attach only
when there is a clear showing of bad faith, malice, or gross negligence.
She further averred that the Civil Code, specifically, Article 32 which
allows recovery of damages for violation of constitutional rights, is a
general law on the liability of public officers; while Section 38, Book I of
the Administrative Code is a special law on the superior public officers’
liability, such that, if the complaint, as in the instant case, does not
allege bad faith, malice, or gross negligence, the same is dismissible
for failure to state a cause of action. As to the defect of the certification
against forum shopping, she urged the Court to strictly construe the
rules and to dismiss the complaint.
Conversely, respondent argued that Section 38 which treats in general
the public officers’ "acts" from which civil liability may arise, is a general
law; while Article 32 which deals specifically with the public officers’
violation of constitutional rights, is a special provision which should
determine whether the complaint states a cause of action or not. Citing
the case of Lim v. Ponce de Leon,14 respondent alleged that under
Article 32 of the Civil Code, it is enough that there was a violation of
the constitutional rights of the plaintiff and it is not required that said
public officer should have acted with malice or in bad faith. Hence, it
concluded that even granting that the complaint failed to allege bad
faith or malice, the motion to dismiss for failure to state a cause of
action should be denied inasmuch as bad faith or malice are not
necessary to hold petitioner liable.
The issues for resolution are as follows:
(1) May a public officer be validly sued in his/her private
capacity for acts done in connection with the discharge of the
functions of his/her office?
(2) Which as between Article 32 of the Civil Code and
Section 38, Book I of the Administrative Code should govern
in determining whether the instant complaint states a cause
of action?
(3) Should the complaint be dismissed for failure to comply
with the rule on certification against forum shopping?
(4) May petitioner be held liable for damages?
On the first issue, the general rule is that a public officer is not liable for
damages which a person may suffer arising from the just performance
of his official duties and within the scope of his assigned tasks. 15 An
officer who acts within his authority to administer the affairs of the
office which he/she heads is not liable for damages that may have
been caused to another, as it would virtually be a charge against the
Republic, which is not amenable to judgment for monetary claims
without its consent.16 However, a public officer is by law not immune
from damages in his/her personal capacity for acts done in bad faith
which, being outside the scope of his authority, are no longer protected
by the mantle of immunity for official actions. 17
Specifically, under Section 38, Book I of the Administrative Code, civil
liability may arise where there is bad faith, malice, or gross negligence
on the part of a superior public officer. And, under Section 39 of the
same Book, civil liability may arise where the subordinate public
officer’s act is characterized by willfulness or negligence. Thus –
Sec. 38. Liability of Superior Officers. – (1) A public officer
shall not be civilly liable for acts done in the performance of
his official duties, unless there is a clear showing of bad
faith, malice or gross negligence.
xxxx
Section 39. Liability of Subordinate Officers. – No
subordinate officer or employee shall be civilly liable for acts
done by him in good faith in the performance of his duties.
However, he shall be liable for willful or negligent acts done
 by him which are contrary to law, morals, public policy and
good customs even if he acts under orders or instructions of
his superior.
In addition, the Court held in Cojuangco, Jr. v. Court of Appeals,18 that
a public officer who directly or indirectly violates the constitutional
rights of another, may be validly sued for damages under Article 32 of
the Civil Code even if his acts were not so tainted with malice or bad
faith.
Thus, the rule in this jurisdiction is that a public officer may be validly
sued in his/her private capacity for acts done in the course of the
performance of the functions of the office, where said public officer: (1)
acted with malice, bad faith, or negligence; or (2) where the public
officer violated a constitutional right of the plaintiff.
Anent the second issue, we hold that the complaint filed by respondent
stated a cause of action and that the decisive provision thereon is
Article 32 of the Civil Code.
A general statute is one which embraces a class of subjects or places
and does not omit any subject or place naturally belonging to such
class. A special statute, as the term is generally understood, is one
which relates to particular persons or things of a class or to a particular
portion or section of the state only.19
A general law and a special law on the same subject are statutes in
pari materia and should, accordingly, be read together and
harmonized, if possible, with a view to giving effect to both. The rule is
that where there are two acts, one of which is special and particular
and the other general which, if standing alone, would include the same
matter and thus conflict with the special act, the special law must
prevail since it evinces the legislative intent more clearly than that of a
general statute and must not be taken as intended to affect the more
particular and specific provisions of the earlier act, unless it is
absolutely necessary so to construe it in order to give its words any
meaning at all.20
The circumstance that the special law is passed before or after the
general act does not change the principle. Where the special law is
later, it will be regarded as an exception to, or a qualification of, the
prior general act; and where the general act is later, the special statute
will be construed as remaining an exception to its terms, unless
repealed expressly or by necessary implication.21
Thus, in City of Manila v. Teotico,22 the Court held that Article 2189 of
the Civil Code which holds provinces, cities, and municipalities civilly
liable for death or injuries by reason of defective conditions of roads
and other public works, is a special provision and should prevail over
Section 4 of Republic Act No. 409, the Charter of Manila, in
determining the liability for defective street conditions. Under said
Charter, the city shall not be held for damages or injuries arising from
the failure of the local officials to enforce the provision of the charter,
law, or ordinance, or from negligence while enforcing or attempting to
enforce the same. As explained by the Court:
Manila maintains that the former provision should prevail
over the latter, because Republic Act 409 is a special law,
intended exclusively for the City of Manila, whereas the Civil
Code is a general law, applicable to the entire Philippines.
The Court of Appeals, however, applied the Civil Code, and,
we think, correctly. It is true that, insofar as its territorial
application is concerned, Republic Act No. 409 is a special
law and the Civil Code a general legislation; but, as regards
the subject matter of the provisions above quoted, Section 4
of Republic Act 409 establishes a general rule regulating the
liability of the City of Manila for "damages or injury to
persons or property arising from the failure of" city officers
"to enforce the provisions of" said Act "or any other law or
ordinance, or from negligence" of the city "Mayor, Municipal
Board, or other officers while enforcing or attempting to
enforce said provisions." Upon the other hand, Article 2189
of the Civil Code constitutes a particular prescription making
"provinces, cities and municipalities . . . liable for damages
for the death of, or injury suffered by, any person by reason"
— specifically — "of the defective condition of roads, streets,
bridges, public buildings, and other public works under their
control or supervision." In other words, said section 4
refers to liability arising from negligence, in general,
regardless of the object thereof, whereas Article 2189
governs liability due to "defective streets," in particular.
Since the present action is based upon the alleged
defective condition of a road, said Article 2189 is
decisive thereon.23
In the case of Bagatsing v. Ramirez,24 the issue was which law should
govern the publication of a tax ordinance, the City Charter of Manila, a
special act which treats ordinances in general and which requires their
publication before enactment and after approval, or the Tax Code, a
general law, which deals in particular with "ordinances levying or
imposing taxes, fees or other charges," and which demands
publication only after approval. In holding that it is the Tax Code which
should prevail, the Court elucidated that:
There is no question that the Revised Charter of the City of
Manila is a special act since it relates only to the City of
Manila, whereas the Local Tax Code is a general law
because it applies universally to all local governments.
Blackstone defines general law as a universal rule affecting
the entire community and special law as one relating to
particular persons or things of a class. And the rule
commonly said is that a prior special law is not ordinarily
repealed by a subsequent general law. The fact that one is
special and the other general creates a presumption that the
special is to be considered as remaining an exception of the
general, one as a general law of the land, the other as the
law of a particular case. However, the rule readily yields to
a situation where the special statute refers to a subject
in general, which the general statute treats in particular.
Th[is] exactly is the circumstance obtaining in the case
at bar. Section 17 of the Revised Charter of the City of
Manila speaks of "ordinance" in general, i.e.,
irrespective of the nature and scope thereof, whereas,
Section 43 of the Local Tax Code relates to "ordinances
levying or imposing taxes, fees or other charges" in
particular. In regard, therefore, to ordinances in general,
the Revised Charter of the City of Manila is doubtless
dominant, but, that dominant force loses its continuity
when it approaches the realm of "ordinances levying or
imposing taxes, fees or other charges" in particular.
There, the Local Tax Code controls. Here, as always, a
general provision must give way to a particular provision.
Special provision governs.
Let us examine the provisions involved in the case at bar. Article 32 of
the Civil Code provides:
ART. 32. Any public officer or employee, or any private
individual, who directly or indirectly obstructs, defeats,
violates, or in any manner impedes or impairs any of the
following rights and liberties of another person shall be liable
to the latter for damages:
xxxx
(6) The right against deprivation of property without due
process of law;
xxxx
(8) The right to the equal protection of the laws;
xxxx
The rationale for its enactment was explained by Dean Bocobo of the
Code Commission, as follows:
"DEAN BOCOBO. Article 32, regarding individual rights,
Attorney Cirilo Paredes proposes that Article 32 be so
amended as to make a public official liable for violation of
another person’s constitutional rights only if the public official
acted maliciously or in bad faith. The Code Commission
opposes this suggestion for these reasons:
"The very nature of Article 32 is that the wrong may be civil
or criminal. It is not necessary therefore that there should be
malice or bad faith. To make such a requisite would defeat
the main purpose of Article 32 which is the effective
protection of individual rights. Public officials in the past have
abused their powers on the pretext of justifiable motives or
good faith in the performance of their duties. Precisely, the
object of the Article is to put an end to official abuse by the
plea of good faith. In the United States this remedy is in the
nature of a tort.
"Mr. Chairman, this article is firmly one of the fundamental
articles introduced in the New Civil Code to implement
democracy. There is no real democracy if a public official is
abusing and we made the article so strong and so
comprehensive that it concludes an abuse of individual rights
even if done in good faith, that official is liable. As a matter of
fact, we know that there are very few public officials who
openly and definitely abuse the individual rights of the
citizens. In most cases, the abuse is justified on a plea of
desire to enforce the law to comply with one’s duty. And so,
if we should limit the scope of this article, that would
practically nullify the object of the article. Precisely, the
 opening object of the article is to put an end to abuses which
are justified by a plea of good faith, which is in most cases
the plea of officials abusing individual rights." 25
The Code Commission deemed it necessary to hold not only public
officers but also private individuals civilly liable for violation of the rights
enumerated in Article 32 of the Civil Code. It is not necessary that the
defendant under this Article should have acted with malice or bad faith,
otherwise, it would defeat its main purpose, which is the effective
protection of individual rights. It suffices that there is a violation of the
constitutional right of the plaintiff. 26
Article 32 was patterned after the "tort" in American law. 27 A tort is a
wrong, a tortious act which has been defined as the commission or
omission of an act by one, without right, whereby another receives
some injury, directly or indirectly, in person, property, or reputation. 28
There are cases in which it has been stated that civil liability in tort is
determined by the conduct and not by the mental state of the
tortfeasor, and there are circumstances under which the motive of the
defendant has been rendered immaterial. The reason sometimes given
for the rule is that otherwise, the mental attitude of the alleged
wrongdoer, and not the act itself, would determine whether the act was
wrongful.29 Presence of good motive, or rather, the absence of an evil
motive, does not render lawful an act which is otherwise an invasion of
another’s legal right; that is, liability in tort is not precluded by the fact
that defendant acted without evil intent.30
The clear intention therefore of the legislature was to create a distinct
cause of action in the nature of tort for violation of constitutional rights,
irrespective of the motive or intent of the defendant. 31 This is a
fundamental innovation in the Civil Code, and in enacting the
Administrative Code pursuant to the exercise of legislative powers,
then President Corazon C. Aquino, could not have intended to
obliterate this constitutional protection on civil liberties.
In Aberca v. Ver,32 it was held that with the enactment of Article 32, the
principle of accountability of public officials under the Constitution
acquires added meaning and assumes a larger dimension. No longer
may a superior official relax his vigilance or abdicate his duty to
supervise his subordinates, secure in the thought that he does not
have to answer for the transgressions committed by the latter against
the constitutionally protected rights and liberties of the citizen. Part of
the factors that propelled people power in February 1986 was the
widely held perception that the government was callous or indifferent
to, if not actually responsible for, the rampant violations of human
rights. While it would certainly be too naive to expect that violators of
human rights would easily be deterred by the prospect of facing
damage suits, it should nonetheless be made clear in no uncertain
terms that Article 32 of the Civil Code makes the persons who are
directly, as well as indirectly, responsible for the transgression, joint
tortfeasors.
On the other hand, Sections 38 and 39, Book I of the Administrative
Code, laid down the rule on the civil liability of superior and subordinate
public officers for acts done in the performance of their duties. For both
superior and subordinate public officers, the presence of bad faith,
malice, and negligence are vital elements that will make them liable for
damages. Note that while said provisions deal in particular with the
liability of government officials, the subject thereof is general, i.e.,
"acts" done in the performance of official duties, without specifying the
action or omission that may give rise to a civil suit against the official
concerned.
Contrarily, Article 32 of the Civil Code specifies in clear and
unequivocal terms a particular specie of an "act" that may give rise to
an action for damages against a public officer, and that is, a tort for
impairment of rights and liberties. Indeed, Article 32 is the special
provision that deals specifically with violation of constitutional rights by
public officers. All other actionable acts of public officers are governed
by Sections 38 and 39 of the Administrative Code. While the Civil
Code, specifically, the Chapter on Human Relations is a general law,
Article 32 of the same Chapter is a special and specific provision that
holds a public officer liable for and allows redress from a particular
class of wrongful acts that may be committed by public officers.
Compared thus with Section 38 of the Administrative Code, which
broadly deals with civil liability arising from errors in the performance of
duties, Article 32 of the Civil Code is the specific provision which must
be applied in the instant case precisely filed to seek damages for
violation of constitutional rights.
The complaint in the instant case was brought under Article 32 of the
Civil Code. Considering that bad faith and malice are not necessary in
an action based on Article 32 of the Civil Code, the failure to
specifically allege the same will not amount to failure to state a cause
of action. The courts below therefore correctly denied the motion to
dismiss on the ground of failure to state a cause of action, since it is
enough that the complaint avers a violation of a constitutional right of
the plaintiff.
Anent the issue on non-compliance with the rule against forum
shopping, the subsequent submission of the secretary’s certificate
authorizing the counsel to sign and execute the certification against
forum shopping cured the defect of respondent’s complaint. Besides,
the merits of the instant case justify the liberal application of the rules.33
WHEREFORE, in view of the foregoing, the petition is DENIED. The
Decision of the Court of Appeals dated May 7, 1999 which affirmed the
Order of the Regional Trial Court of Marikina, Branch 272, denying
petitioner’s motion to dismiss, is AFFIRMED. The Presiding Judge,
Regional Trial Court of Marikina, Branch 272, is hereby DIRECTED to
continue with the proceedings in Civil Case No. 97-341-MK with
dispatch.
With costs.
SO ORDERED.
TRANQUILINO CACHERO, plaintiff-appellant,
vs.
MANILA YELLOW TAXICAB CO., INC., defendant-appellant.
Bernardino Guerrero and J. G. Madarang for plaintiff-appellant.
Castaño and Ampil for the defendant-appellant.
FELIX, J.:
There is no dispute as to the following facts: on December 13, 1952,
Atty. Tranquilino F. Cachero boarded a Yellow Taxicab, with plate No.
2159-52 driven by Gregorio Mira Abinion and owned by the Manila
Yellow Taxicab Co., Inc. On passing Oroquieta between Doroteo Jose
and Lope de Vega streets, Gregorio Mira Abinion bumped said taxicab
against a Meralco post, No. 1-4/387, with the result that the cab was
badly smashed and the plaintiff fell out of the vehicle to the ground,
suffering thereby physical injuries, slight in nature.
The chauffeur was subsequently prosecuted by the City Fiscal and on
February 26, 1963, upon his plea of guilty the Municipal Court of
Manila sentenced him to suffer 1 month and 1 day of arresto mayor,
and to pay the costs. On December 17, 1952, Tranquilino F. Cachero
addressed a letter to the Manila Yellow Taxicab Co., Inc., which was
followed by another of January 6, 1953, which reads as follows:
MANILA, January 6, 1953
The MANILA YELLOW TAXICAB CO., INC.
1338 Arlegui, Manila
Dear Sirs:
As you have been already advised by the letter dated
December 17, 1952, on December 13, 1952, while I was a
passenger of your taxicab bearing plate No. 2159 and driven
by your chauffeur Gregorio Mira and through his negligence
and the bad condition of the said car, he bumped the same
against the pavement on the street (Oroquieta — between
Doroteo Jose and Lope de Vega streets, Manila) and hit the
Meralco post on said street, resulting in the smashing of the
said taxicab, and as a result thereof I was gravely injured
and suffered and is still suffering physical, mental and moral
damages and not being able to resume my daily calling.
For the said damages, I hereby make a demand for the
payment of the sum of P79,245.65, covering expenses for
transportation to the hospital for medical treatment,
medicines, doctors bills, actual monetary loss, moral,
compensatory and exemplary damages, etc., within 5 days
from date of receipt hereof.
I trust to hear from you on the matter within the period of 5
days above specified.
Truly yours,
(Sgd.) TRANQUILINO F. CACHERO
2256 Int. B, Misericordia St.,
Sta. Cruz, Manila
(Exhibit K)
The Taxicab Co. to avoid expenses and time of litigation offered to
settle the case amicably with plaintiff but the latter only agreed to
reduce his demand to the sum of P72,050.20 as his only basis for
settlement which, of course, was not accepted by said company. So
plaintiff instituted this action on February 2, 1953, in the Court of First
Instance of Manila, praying in the complaint that the defendant be
condemned to pay him:
(a) The sum of P72,050.20, the total sum of the itemized
losses and/or damages under paragraph 7 of the complaint,
with legal interest thereon from the date of the filing of the
complaint;
 (b) The sum of P5,000 as attorney's fee; and the costs of the
suit; and
Plaintiff further respectfully prays for such other and further
reliefs as the facts and the law pertaining to the case may
warrant.
The defendant answered the complaint setting forth affirmative
defenses and a counterclaim for P930 as damages and praying for the
dismissal of plaintiff's action. After hearing the Court rendered decision
only July 20, 1954, the dispositive part of which is as follows:
IN VIEW OF THE FOREGOING, the Court hereby renders
judgment in favor of the plaintiff and against the defendant,
sentencing the latter to pay the former the following: (1) For
medicine, doctor's fees for services rendered and
transportation, P700; (2) professional fee as attorney for the
defendant in Criminal Case No. 364, "People vs. Manolo
Maddela et al." of the Court of First Instance of Nueva
Vizcaya, P3,000; (3) professional fees as attorney for the
defendant in Civil Case No. 23891 of the Municipal Court of
Manila, "Virginia Tangulan vs. Leonel da Silva," and for the
taking of the deposition of Gabina Angrepan in a case
against the Philippine National Bank, P200; and(4) moral
damages in the amount of P2,000.
Defendant's counterclaim is hereby dismissed.
Defendant shall also pay the costs."
From this decision both parties appealed to Us, plaintiff limiting his
appeal to the part of the decision which refers to the moral damages
awarded to him which he considered inadequate, and to the failure of
said judgment to grant the attorney's fees asked for in the prayer of his
complaint. Defendant in turn alleges that the trial Court erred in
awarding to the plaintiff the following:
(1) P700 — for medicine, doctor's fees and transportation
expenses;
(2) P3,000 — as supposedly unearned full professional fees
as attorney for the defendant in Criminal Case No. 364,
"People vs. Manolo Maddela et al.";
(3) P200 — as supposedly unearned professional fees as
attorney for the defendant in Civil Case No. 23891 of the
Manila Municipal Court, "Virginia Tangulan vs. Leonel de
Silva", and for failure to take the deposition of a certain
Gabina Angrepan in an unnamed case; and
(4) P2,000 — as moral damages, amounting to the grand
total of P5,900, these amounts being very much greater than
what plaintiff deserves.
In connection with his appeal, plaintiff calls attention to the testimonies
of Dr. Modesto S. Purisima and of Dr. Francisco Aguilar, a member of
the staff of the National Orthopedic Hospital, which he considers
necessary as a basis for ascertaining not only the physical sufferings
undergone by him, but also for determining the adequate
compensation for moral damages that he should be awarded by
reason of said accident.
The exact nature of plaintiff's injuries, their degree of seriousness and
the period of his involuntary disability can be determined by the
medical certificate (Exhibit D) issued by the National Orthopedic
Hospital on December 16, 1952, and the testimonies of Dr. Francisco
Aguilar, physician in said hospital, and of Dr. Modesto Purisima, a
private practitioner. The medical certificate (Exhibit D) lists: (a) a
subluxation of the right shoulder joint; (b) a contusion on the right
chest; and (c) a "suspicious fracture" of the upper end of the right
humerus. Dr. Aguilar who issued the medical certificate admitted,
however, with regard to the "suspicious fracture", that in his opinion
with (the aid of) the x-ray there was no fracture. According to this
doctor plaintiff went to the National 0rthopedic Hospital at least six
times during the period from December 16, 1952, to April 7, 1953; that
he strapped plaintiffs body (see Exhibit E), which strap was not
removed until after a period of six weeks had elapsed Dr. Modesto
Purisima, a private practitioner, testified that he advised and treated
plaintiff from, December 14, 1952, to the end of March (1953). Plaintiff
was never hospitalized for treatment of the injuries he received in said
accident.
Counsel for the defendant delves quite extensively on these injuries.
He says in his brief the following:
Just what is a subluxation? Luxation is another term for
dislocation (Dorland, W.A.N., The American Illustrated
Medical Dictionary (13th ed.), p. 652), and hence, a
sublaxation is an incomplete or partial dislocation (Ibid., p.
1115). While a dislocation is the displacement of a bone or
bones from its or their normal setting (and, therefore,
applicable and occurs only to joints and not to rigid or non-
movable parts of the skeletal system) (Ibid., p. 358;
Christopher, F., A Textbook of Surgery (5th ed.), p. 342), it
should be distinguished from a fracture which is a break or
rupture in a bone or cartilage, usually due to external
violence (Christopher, F., A Textbook of Surgery (5th Ed.) p.
194; Dorland, W.A.N., The American Illustrated Medical
Dictionary (13th ed.), P.459). Because, unlike fracture which
may be partial (a crack in the bone) or total (a complete
break in the bone), there can be no half-way situations with
regard to dislocations of the shoulder joint (the head or ball
of the humerus — the humerus is the bone from the elbow to
the shoulder) must be either inside the socket of the scapula
or shoulder blade (in which case there is no dislocation) or
out of the latter (in which event there is a dislocation), to
denote a condition where due to external violence, the
muscles and ligaments connecting the humerus to the
scapula have subjected to strain intense enough to produce
temporary distention or lessening of their tautness and
consequently resulting in the loosening or wrenching of the
ball of the humerus from its snug fit in the socket of the
scapula, by using the terms subluxation or partial
dislocation(as used in the medical certificate), is to fall into a
misnomer — a term often used by "chiropractors" and by
those who would want to sound impressive, but generally
unfavored by the medical profession. To describe the above
condition more aptly, the medical profession usually employs
the expression luxatio imperfecta, or, in simple language, a
sprain (Dorland, W.A.N., The American Illustrated Medical
Dictionary (13th ed.), p. 652). The condition we have
described is a paraphrase of the definition of a sprain.
Plaintiff suffered this very injury (a sprained or wrenched
shoulder joint) and a cursory scrutiny of his x-ray plates
(Exhibits A and B) by a qualified orthopedic surgeon or by a
layman with a picture or x-ray plate of a normal shoulder joint
(found in any standard textbook on human anatomy; the one
we used was Schemer, J.P., Morris' Human Anatomy (10
ed., p. 194) for comparison will bear out our claim.
Treatment for a sprain is by the use of adhesive or elastic
bandage, elevation of the joint, heat, effleurage and later
massage (Christopher, F., A Textbook of Surgery (5th ed., p.
116). The treatment given to the plaintiff was just exactly that
Dr. Aguilar bandaged (strapped) plaintiff's right shoulder and
chest (t.s.n., p. 31) in an elevated position (with the forearm
horizontal to the chest (see photograph, Exhibit E), and
certain vitamins were prescribed for him (t.s.n., p. 131). He
also underwent massage for some time by Drs. Aguilar and
Purisima. The medicines and appurtenances to treatment
purchased by plaintiff from the Orthopedic Hospital, Botica
Boie and Metro Drug Store were, by his own admission,
adhesive plaster, bandage, gauze, oil and "tintura arnica"
(t.s.n., p. 3 — continuation of transcript ), and Dr. Purisima
also prescribed "Numotizin", a beat generating ointment
(t.s.n., p. 23), all of which are indicated for a sprain, and by
their nature, can cure nothing more serious than a sprain
anyway. Fractures and true dislocations cannot be cured by
the kind of treatment and medicines which plaintiff received.
A true dislocation, for instance, is treated by means of
reduction through traction of the arm until the humeral head
returns to the proper position in the scapular socket (pulling
the arm at a 60 degree angle and guiding the ball of the
humerus into proper position, in its socket) while the patient
is under deep anaesthesia, and then, completely
immobilizing the part until the injured capsule has healed
(Christopher, F., A Textbook of Surgery, pp. 343 and 344).
No evidence was submitted that plaintiff ever received the
latter kind of treatment. Dr. Purisima even declared that after
the plaintiff's first visit to the Orthopedic Hospital the latter
informed him that there was no fracture or dislocation (t.s.n.,
p. 26). Dr. Purisima's statement is the truth of the matter as
we have already explained — joints of the shoulder being
only subject to total dislocation (due to their anatomical
design), not to partial ones, and any injury approximating
dislocation but not completely, it being classified as mere
sprains, slight or bad.
The second and last injury plaintiff sustained was a
contusion. What is a contusion? It is just a high flown
expression for a bruise or the act of bruising (Dorland,
W.A.N., The American Illustrated Medical Dictionary (13th
 ed. p. 290). No further discussion need be made on this
particular injury since the nature of a bruise is of common
knowledge (it's a bit uncomfortable but not disabling unless it
occurs on movable parts like the fingers or elbow which is
not the case, herein having occurred in the right chest) and
the kind of medical treatment or help it is also well known.
(pp. 10-14, defendant-appellant's brief).
The trial Judge undoubtedly did not give much value to the testimonies
of the doctors when in the statement of facts made in his decision he
referred to the physical injuries received by the plaintiff as slight in
nature and the latter is estopped from discussing the same in order to
make them appear as serious, because in the statement of facts made
in his brief as appellant, he says the following:
The facts of the case as found by the lower court in its
decision, with the permission of this Honorable Court, we
respectfully quote them hereunder as our STATEMENT OF
FACTS for the purpose of this appeal.
Before entering into a discussion of the merits of plaintiff's appeal, We
will say a few words as to the nature of the action on which his demand
for damages is predicated.
The nature of an action as in contract or in tort is determined
from the essential elements of the complaint, taken as a
whole, in the case of doubt a construction to sustain the
action being given to it.
While the prayer for relief or measure of damages sought
does not necessarily determine the character of the action, it
may be material in the determination of the question and
therefore entitled to consideration and in case of doubt will
open determine character of the action and indeed there are
actions whose character is necessarily determined thereby.
(1 C.J.S. 1100)
A mere perusal of plaintiff complaint will show that his action against
the defendant is predicated on an alleged breach of contract of
carriage, i.e., the failure of the defendant to bring him "safely and
without mishaps" to his destination, and it is to be noted that the
chauffeur of defendant's taxicab that plaintiff used when he received
the injuries involved herein, Gregorio Mira, has not even been made a
party defendant to this case.
Considering, therefore, the nature of plaintiff's action in this case, is he
entitled to compensation for moral damages? Article 2219 of the Civil
Code says the following:
ART. 2219. Moral damages may be recovered in the
following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28,
29, 30, 32, 34 and 35.
xxx     xxx     xxx
Of the cases enumerated in the just quoted Article 2219 only the first
two may have any bearing on the case at bar. We find, however, with
regard to the first that the defendant herein has not committed in
connection with this case any "criminal offense resulting in physical
injuries". The one that committed the offense against the plaintiff is
Gregorio Mira, and that is why he has been already prosecuted and
punished therefor. Although (a) owners and managers of an
establishment or enterprise are responsible for damages caused by
their employees in the service of the branches in which the latter are
employed or on the occasion of their functions; (b) employers are
likewise liable for damages caused by their employees and household
helpers acting within the scope of their assigned task (Article 2180 of
the Civil Code); and (c) employers and corporations engaged in any
kind of industry are subsidiarily civilly liable for felonies committed by
their employees in the discharge of their duties (Art. 103, Revised
Penal Code), plaintiff herein does not maintain this action under the
provisions of any of the articles of the codes just mentioned and
against all the persons who might be liable for the damages caused,
but as a result of an admitted breach of contract of carriage and
against the defendant employer alone. We, therefore, hold that the
case at bar does not come within the exception of paragraph 1, Article
2219 of the Civil Code.
The present complaint is not based either on a "quasi delict causing
physical injuries" (Art. 2219 par. 2, of the Civil Code). From the report
of the Code Commission on the new Civil Code We copy the following:
A question of nomenclature confronted the Commission.
After a careful deliberation, it was agreed to use the term
"quasi-delict" for those obligations which do not arise from
law, contracts quasi-contracts or criminal offenses. They are
known in Spanish legal treatises as "culpa aquiliana", "culpa-
extra-contractual" or "cuasi-delitos". The phrase "culpa-
extra-contractual" or its translation "extra-contractual fault"
was eliminated because it did not exclude quasi-contractual
or penal obligations. "Aquilian fault" might have been
selected, but it was thought inadvisable to refer to so ancient
a law as the "Lex Aquilia". So "quasi-delicts" was chosen,
which more nearly corresponds to the Roman Law
classification of obligations, and is in harmony with the
nature of this kind of liability.
The Commission also thought of the possibility of adopting
the word "tort" from Anglo-American Law. But "tort" under
that system is much broader than the Spanish-Philippine
concept of obligations arising from non-contractual
negligence." "Tort" in Anglo-American jurisprudence includes
not only negligence, but also intentional criminal acts, such
as assault and battery, false imprisonment and deceit. In the
general plan of the Philippine legal system, intentional and
malicious are governed by the Penal Code, although certain
exceptions are made in the Project. (Report of the Code
Commission, pp. 161-162).
In the case of Cangco vs. Manila Railroad, 38 Phil. 768, We
established the distinction between obligation derived from negligence
and obligation as a result of a breach of a contract. Thus, We said:
It is important to note that the foundation of the legal liability
of the defendant is the contract of carriage, and that the
obligation to respond for the damage which plaintiff has
suffered arises, if at all, from the breach of that contract by
reason of the failure of defendant to exercise due care in its
performance. That is to say, its liability is direct and
immediate, differing essentially in the legal view point from
that presumptive responsibility for the negligence of its
servants, imposed by Article 1903 of the Civil Code (Art.
2180 of the new), which can be rebutted by proof of the
exercise of due care in their selection or supervision. Article
1903 is not applicable to obligation arising EX CONTRACTU,
but only to extra-contractual obligations or — to use the
technical form of expression, that article, relates only to
CULPA AQUILIANA and not to CULPA CONTRACTUAL.
The decisions in the cases of Castro vs. Acro Taxicab (82 Phil., 359,
46 Off. Gaz., Na. 5, p. 2023); Lilius et al. vs. Manila Railroad, (59 Phil.
758) and others, wherein moral damages, are awarded to the plaintiffs,
are not applicable to the case at bar because said decisions were
rendered before the effectivity of the new Civil Code (August 30, 1950)
and for the further reason that the complaints filed therein were based
on different causes of action.
In view of the foregoing the sum of P2,000 awarded as moral damages
by the trial Court has to be eliminated, for under the law it is not a
compensation awardable in a case like the one at bar.
As to plaintiff's demand for P5,000 as attorney's fees, the Civil Code
provides the following:
ART, 2208. In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs, cannot be
recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses to
protect his interest;
(3) In criminal cases of malicious prosecution against the
plaintiff;
(4) In case of a clearly unfounded civil action or proceeding
against the plaintiff;
(5) Where the defendant acted in gross and evident had faith
in refusing to satisfy the plaintiff's plainly valid, just and
demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household
helpers, laborers and skilled workers;
(8) in actions for indemnity under workmen's compensation
and employers liability laws;
 (9) In a separate civil action to recover civil liability arising
from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and
equitable that attorney's fees and expenses of litigation
should be recovered.
In all cases, the attorney's fees and expenses of litigation must be
reasonable.
The present case does not come under any of exceptions enumerated
in the preceding article, specially of paragraph 2 thereof, because
defendant's failure to meet its responsibility was not the plaintiff to
litigate or to incur expenses to protect his interests. The present action
was instituted because plaintiff an exorbitant amount for damages
(P60,000) and naturally the defendant did not and could not yield to
such demand. This is neither a case that comes under paragraph 11 of
Article 2208 because the Lower Court did not deem it just and
equitable to award any amount for attorney's fees. As We agree with
the trial Judge on this point, We cannot declare that he erred for not
awarding to plaintiff any such fees in this case.
Coming now to the appeal of the defendant, the Court, after due
consideration of the evidence appearing on record:
(1) Approves the award of P700 for medicine, doctors' fees and
transportation expenses;
(2) Reduces the award of P3,000 as attorney's fees to the sum of
P2,000, as Manolo Maddela, defendant in Criminal Case No. 364 of
the Court of First Instance of Nueva Vizcaya testified that he has
already paid to plaintiff part of the latter's fees of P3,000, the amount of
which was not disclosed, though it was incumbent upon the plaintiff to
establish how much he had been paid of said fees;
(3) Approves the award of P200 as unearned professional fees as
attorney for the defendant in Civil Case No. 238191 of the Municipal
Court of Manila whom plaintiff was unable to represent, and for the
latter's failure to take the deposition of one Agripina Angrepan due to
the automobile accident referred to in this case.
Before closing this decision We deem it convenient to quote the
following passage of defendant's brief as appellant:
Realizing its obligation under its contract of carriage with the
plaintiff, and because the facts of the case, as have been
shown, mark it as more proper for the Municipal Court only,
the defendant, to avoid the expense and time of litigation,
offered to settle the case amicably with plaintiff, but the latter
refused and insisted on his demand for P72,050.20 (Exhibit
K) as the only basis for settlement, thus adding a clearly
petty case to the already overflowing desk of the Honorable
Members of this Court.
We admire and respect at all times a man for standing up
and fighting for his rights, and when said right consists in
injuries sustained due to a breach of a contract of carriage
with us, sympathy and understanding are added thereto. But
when a person starts demanding P72,050.20 for a solitary
bruise and sprain, injuries for which the trial court, even at its
generous although erroneous best, could only grant P5,900,
then respect and sympathy give way to something else. It is
time to fight, for, in our humble opinion, there is nothing more
loathsome nor truly worthy of condemnation than one who
uses his injuries for other purposes than just rectification. If
plaintiff's claim is granted, it would be a blessing, not a
misfortune, to be injured. (p. 34-35)
This case was instituted by a lawyer who, as an officer of the courts,
should be the first in helping Us in the administration of justice, and
after going over the record of this case, we do not hesitate to say that
the demand of P72,050.20 for a subluxation of the right humerus bone
and an insignificant contusion in the chest, has not even the
semblance of reasonableness. As a matter of fact, Dr. Aguilar himself
said that the x-ray plates (Exhibits A, Band C) " did not show anything
significant except that it shows a slight subluxation of the right
shoulder, and that there is a suspicious fracture", which ultimately he
admitted not to exist. The plaintiff himself must have felt embarrassed
by his own attitude when after receiving defendant's brief as appellant,
he makes in his brief as appellee the categorical statement that he
DOES NOT NOW INSIST NOR PRETEND IN THE LEAST to Collect
from the defendant all the damages he had claimed in his complaint,
but instead he is submitting his case to the sound discretion of the
Honorable Court for the award of a reasonable and equitable damages
allowable by law, to compensate the plaintiff of the suffering and losses
he had undergone and incurred of the accident oftentimes mentioned
in this brief in which plaintiff was injured" (p. 17-18).This
acknowledgment comes too late, for plaintiff has already deprived the
Court of Appeals of the occasion to exercise its appellate jurisdiction
over this case which he recklessly dumped to this Court. We certainly
cannot look with at favor at his attitude of plaintiff.
WHEREFORE, the decision appealed from is hereby modified by
reducing the amount awarded as professional fees from P3,000 to
P2,000 and by eliminating the moral damages of P2,000 awarded by
the Lower Court to the plaintiff. Said decision is in all other respects
affirmed, without pronouncement as to costs. It is so ordered.
SERGIO F. NAGUIAT, doing business under the name and style
SERGIO F. NAGUIAT ENT., INC., & CLARK FIELD TAXI, INC.,
petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION (THIRD DIVISION),
NATIONAL ORGANIZATION OF WORKINGMEN and its members,
LEONARDO T. GALANG, et al., respondents.
 
PANGANIBAN, J.:
Are private respondent-employees of petitioner Clark Field Taxi, Inc.,
who were separated from service due the closure of Clark Air Base,
entitled to separation pay and, if so, in what amount? Are officers of
corporations ipso facto liable jointly and severally with the companies
they represent for the payment of separation pay?
These questions are answered by the Court in resolving this petition for
certiorari under Rule 65 of the Rules of Court assailing the Resolutions
of the National Labor Relations Commission (Third Division) 1
promulgated on February 28, 1994,2 and May 31, 1994.3 The
February 28, 1994 Resolution affirmed with modifications the decision4
of Labor Arbiter Ariel C. Santos in NLRC Case No. RAB-III-12-2477-
91. The second Resolution denied the motion for reconsideration of
herein petitioners.
The NLRC modified the decision of the labor arbiter by granting
separation pay to herein individual respondents in the increased
amount of US$120.00 for every year of service or its peso equivalent,
and holding Sergio F. Naguiat Enterprises, Inc., Sergio F. Naguiat and
Antolin T. Naguiat, jointly and severally liable with Clark Field Taxi, Inc.
("CFTI").
The Facts
The following facts are derived from the records of the case:
Petitioner CFTI held a concessionaire's contract with the Army Air
Force Exchange Services ("AAFES") for the operation of taxi services
within Clark Air Base. Sergio F. Naguiat was CFTI's president, while
Antolin T. Naguiat was its vice-president. Like Sergio F. Naguiat
Enterprises, Incorporated ("Naguiat Enterprises"), a trading firm, it was
a family-owned corporation.
Individual respondents were previously employed by CFTI as taxicab
drivers. During their employment, they were required to pay a daily
"boundary fee" in the amount of US$26.50 for those working from 1:00
a.m. to 12:00 noon, and US$27.00 for those working from 12:00 noon
to 12:00 midnight. All incidental expenses for the maintenance of the
vehicles they were driving were accounted against them, including
gasoline expenses.
The drivers worked at least three to four times a week, depending on
the availability of taxicabs. They earned not less than US$15.00 daily.
In excess of that amount, however, they were required to make cash
deposits to the company, which they could later withdraw every fifteen
days.
Due to the phase-out of the US military bases in the Philippines, from
which Clark Air Base was not spared, the AAFES was dissolved, and
the services of individual respondents were officially terminated on
November 26, 1991.
The AAFES Taxi Drivers Association ("drivers' union"), through its local
president, Eduardo Castillo, and CFTI held negotiations as regards
separation benefits that should be awarded in favor of the drivers. They
arrived at an agreement that the separated drivers will be given
P500.00 for every year of service as severance pay. Most of the
drivers accepted said amount in December 1991 and January 1992.
However, individual respondents herein refused to accept theirs.
Instead, after disaffiliating themselves from the drivers' union,
individual respondents, through the National Organization of
Workingmen ("NOWM"), a labor organization which they subsequently
joined, filed a complaint5 against "Sergio F. Naguiat doing business
under the name and style Sergio F. Naguiat Enterprises, Inc., Army-Air
Force Exchange Services (AAFES) with Mark Hooper as Area Service
Manager, Pacific Region, and AAFES Taxi Drivers Association with
Eduardo Castillo as President," for payment of separation pay due to
termination/phase-out. Said complaint was later amended6 to include
additional taxi drivers who were similarly situated as complainants, and
CFTI with Antolin T. Naguiat as vice president and general manager,
as party respondent.
In their complaint, herein private respondents alleged that they were
regular employees of Naguiat Enterprises, although their individual
applications for employment were approved by CFTI. They claimed to
have been assigned to Naguiat Enterprises after having been hired by
CFTI, and that the former thence managed, controlled and supervised
their employment. They averred further that they were entitled to
separation pay based on their latest daily earnings of US$15.00 for
working sixteen (16) days a month.
In their position paper submitted to the labor arbiter, herein petitioners
claimed that the cessation of business of CFTI on November 26, 1991,
was due to "great financial losses and lost business opportunity"
resulting from the phase-out of Clark Air Base brought about by the Mt.
Pinatubo eruption and the expiration of the RP-US military bases
agreement. They admitted that CFTI had agreed with the drivers'
union, through its President Eduardo Castillo who claimed to have had
blanket authority to negotiate with CFTI in behalf of union members, to
grant its taxi driver-employees separation pay equivalent to P500.00
for every year of service.
The labor arbiter, finding the individual complainants to be regular
workers of CFTI, ordered the latter to pay them P1,200.00 for every
year of service "for humanitarian consideration," setting aside the
earlier agreement between CFTI and the drivers' union of P500.00 for
every year of service. The labor arbiter rejected the allegation of CFTI
that it was forced to close business due to "great financial losses and
lost business opportunity" since, at the time it ceased operations, CFTI
was profitably earning and the cessation of its business was due to the
untimely closure of Clark Air Base. In not awarding separation pay in
accordance with the Labor Code, the labor arbiter explained:
To allow respondents exemption from its (sic)
obligation to pay separation pay would be inhuman
to complainants but to impose a monetary
obligation to an employer whose profitable
business was abruptly shot (sic) down by force
majeure would be unfair and unjust to say the
least.7
and thus, simply awarded an amount for "humanitarian
consideration."
Herein individual private respondents appealed to the NLRC. In its
Resolution, the NLRC modified the decision of the labor arbiter by
granting separation pay to the private respondents. The concluding
paragraphs of the NLRC Resolution read:
The contention of complainant is partly correct.
One-half month salary should be US$120.00 but
this amount can not be paid to the complainant in
U.S. Dollar which is not the legal tender in the
Philippines. Paras, in commenting on Art. 1249 of
the New Civil Code, defines legal tender as "that
which a debtor may compel a creditor to accept in
payment of the debt. The complainants who are
the creditors in this instance can be compelled to
accept the Philippine peso which is the legal
tender, in which case, the table of conversion
(exchange rate) at the time of payment or
satisfaction of the judgment should be used.
However, since the choice is left to the debtor,
(respondents) they may choose to pay in US
dollar." (Phoenix Assurance Co. vs. Macondray &
Co. Inc., L-25048, May 13, 1975)
In discharging the above obligations, Sergio F.
Naguiat Enterprises, which is headed by Sergio F.
Naguiat and Antolin Naguiat, father and son at the
same time the President and Vice-President and
General Manager, respectively, should be joined
as indispensable party whose liability is joint and
several. (Sec. 7, Rule 3, Rules of Court)8
As mentioned earlier, the motion for reconsideration of herein
petitioners was denied by the NLRC. Hence, this petition with prayer
for issuance of a temporary restraining order. Upon posting by the
petitioners of a surety bond, a temporary restraining order9 was issued
by this Court enjoining execution of the assailed Resolutions.
Issues
The petitioners raise the following issues before this Court for
resolution:
I. Whether or not public respondent NLRC (3rd
Div.) committed grave abuse of discretion
amounting to lack of jurisdiction in issuing the
appealed resolution;
II. Whether or not Messrs. Teofilo Rafols and
Romeo N. Lopez could validly represent herein
private respondents; and,
III. Whether or not the resolution issued by public
respondent is contrary to law. 10
Petitioners also submit two additional issues by way of a supplement
11 to their petition, to wit: that Petitioners Sergio F. Naguiat and Antolin
Naguiat were denied due process; and that petitioners were not
furnished copies of private respondents' appeal to the NLRC. As to the
procedural lapse of insufficient copies of the appeal, the proper forum
before which petitioners should have raised it is the NLRC. They,
however, failed to question this in their motion for reconsideration. As a
consequence, they are deemed to have waived the same and
voluntarily submitted themselves to the jurisdiction of the appellate
body.
Anent the first issue raised in their original petition, petitioners contend
that NLRC committed grave abuse of discretion amounting to lack or
excess of jurisdiction in unilaterally increasing the amount of severance
pay granted by the labor arbiter. They claim that this was not supported
by substantial evidence since it was based simply on the self-serving
allegation of respondents that their monthly take-home pay was not
lower than $240.00.
On the second issue, petitioners aver that NOWM cannot make legal
representations in behalf of individual respondents who should,
instead, be bound by the decision of the union (AAFES Taxi Drivers
Association) of which they were members.
As to the third issue, petitioners incessantly insist that Sergio F.
Naguiat Enterprises, Inc. is a separate and distinct juridical entity which
cannot be held jointly and severally liable for the obligations of CFTI.
And similarly, Sergio F. Naguiat and Antolin Naguiat were merely
officers and stockholders of CFTI and, thus, could not be held
personally accountable for corporate debts.
Lastly, Sergio and Antolin Naguiat assail the Resolution of NLRC
holding them solidarily liable despite not having been impleaded as
parties to the complaint.
Individual respondents filed a comment separate from that of NOWM.
In sum, both aver that petitioners had the opportunity but failed to
refute, the taxi drivers' claim of having an average monthly earning of
$240.00; that individual respondents became members of NOWM after
disaffiliating themselves from the AAFES Taxi Drivers Association
which, through the manipulations of its President Eduardo Castillo,
unconscionably compromised their separation pay; and that Naguiat
Enterprises, being their indirect employer, is solidarily liable under the
law for violation of the Labor Code, in this case, for nonpayment of
their separation pay.
The Solicitor General unqualifiedly supports the allegations of private
respondents. In addition, he submits that the separate personalities of
respondent corporations and their officers should be disregarded and
considered one and the same as these were used to perpetrate
injustice to their employees.
The Court's Ruling
As will be discussed below, the petition is partially meritorious.
First Issue: Amount of Separation Pay
Firmly, we reiterate the rule that in a petition for certiorari filed pursuant
to Rule 65 of the Rules of Court, which is the only way a labor case
may reach the Supreme Court, the petitioner/s must clearly show that
the NLRC acted without or in excess of jurisdiction or with grave abuse
of discretion. 12
Long-standing and well-settled in Philippine jurisprudence is the judicial
dictum that findings of fact of administrative agencies and quasi-judicial
bodies, which have acquired expertise because their jurisdiction is
confined to specific matters, are generally accorded not only great
respect but even finality; and are binding upon this Court unless there
is a showing of grave abuse of discretion, or where it is clearly shown
that they were arrived at arbitrarily or in disregard of the evidence on
record. 13
Nevertheless, this Court carefully perused the records of the instant
case if only to determine whether public respondent committed grave
abuse of discretion, amounting to lack of jurisdiction, in granting the
clamor of private respondents that their separation pay should be
based on the amount of $240.00, allegedly their minimum monthly
earnings as taxi drivers of petitioners.
In their amended complaint before the Regional Arbitration Branch in
San Fernando, Pampanga, herein private respondents set forth in
detail the work schedule and financial arrangement they had with their
employer. Therefrom they inferred that their monthly take-home pay
amounted to not less than $240.00. Herein petitioners did not bother to Independent contractors, meanwhile, are those who exercise
refute nor offer any evidence to controvert said allegations. Remaining independent employment, contracting to do a piece of work according
undisputed, the labor arbiter adopted such facts in his decision. to their own methods without being subject to control of their employer
Petitioners did not even appeal from the decision of the labor arbiter except as to the result of their Work. 22
nor manifest any error in his findings and conclusions. Thus, petitioners From the evidence proffered by both parties, there is no substantial
are in estoppel for not having questioned such facts when they had all basis to hold that Naguiat Enterprises is an indirect employer of
opportunity to do so. Private respondents, like petitioners, are bound individual respondents much less a labor only contractor. On the
by the factual findings of Respondent Commission. contrary, petitioners submitted documents such as the drivers'
Petitioners also claim that the closure of their taxi business was due to applications for employment with CFTI, 23 and social security
great financial losses brought about by the eruption of Mt. Pinatubo remittances 24 and payroll 25 of Naguiat Enterprises showing that
which made the roads practically impassable to their taxicabs. Likewise none of the individual respondents were its employees. Moreover, in
well-settled is the rule that business losses or financial reverses, in the contract 26 between CFTI and AAFES, the former, as
order to sustain retrenchment of personnel or closure of business and concessionaire, agreed to purchase from AAFES for a certain amount
warrant exemption from payment of separation pay, must be proved within a specified period a fleet of vehicles to be "ke(pt) on the road" by
with clear and satisfactory evidence. 14 The records, however, are CFTI, pursuant to their concessionaire's contract. This indicates that
devoid of such evidence. CFTI became the owner of the taxicabs which became the principal
The labor arbiter, as affirmed by NLRC, correctly found that petitioners investment and asset of the company.
stopped their taxi business within Clark Air Base because of the phase- Private respondents failed to substantiate their claim that Naguiat
out of U.S. military presence thereat. It was not due to any great Enterprises managed, supervised and controlled their employment. It
financial loss because petitioners' taxi business was earning profitably appears that they were confused on the personalities of Sergio F.
at the time of its closure. Naguiat as an individual who was the president of CFTI, and Sergio F.
With respect to the amount of separation pay that should be granted, Naguiat Enterprises, Inc., as a separate corporate entity with a
Article 283 of the Labor Code provides: separate business. They presumed that Sergio F. Naguiat, who was at
. . . In case of retrenchment to prevent losses and the same time a stockholder and director 27 of Sergio F. Naguiat
in cases of closures or cessation of operations of Enterprises, Inc., was managing and controlling the taxi business on
establishment or undertaking not due to serious behalf of the latter. A closer scrutiny and analysis of the records,
business losses or financial reverses, the however, evince the truth of the matter: that Sergio F. Naguiat, in
separation pay shall be equivalent to one (1) supervising the taxi drivers and determining their employment terms,
month pay or at least one-half (1/2) month pay for was rather carrying out his responsibilities as president of CFTI.
every year of service, whichever is higher. A Hence, Naguiat Enterprises as a separate corporation does not appear
fraction of at least six (6) months shall be to be involved at all in the taxi business.
considered one (1) whole year. To illustrate further, we refer to the testimony of a driver-claimant on
Considering the above, we find that NLRC did not commit grave abuse cross examination.
of discretion in ruling that individual respondents were entitled to Atty. Suarez
separation pay 15 in the amount $120.00 (one-half of $240.00 monthly Is it not true that you applied
pay) or its peso equivalent for every year of service. not with Sergio F. Naguiat but
Second Issue: NOWM's Personality to with Clark Field Taxi?
Represent Individual Respondents-Employees Witness
On the question of NOWM's authority to represent private respondents, I applied for (sic) Sergio F.
we hold petitioners in estoppel for not having seasonably raised this Naguiat.
issue before the labor arbiter or the NLRC. NOWM was already a Atty. Suarez
party-litigant as the organization representing the taxi driver- Sergio F. Naguiat as an
complainants before the labor arbiter. But petitioners who were party- individual or the corporation?
respondents in said complaint did not assail the juridical personality of Witness
NOWM and the validity of its representations in behalf of the Sergio F. Naguiat na tao.
complaining taxi drivers before the quasi-judicial bodies. Therefore, Atty. Suarez
they are now estopped from raising such question before this Court. In Who is Sergio F. Naguiat?
any event, petitioners acknowledged before this Court that the taxi Witness
drivers allegedly represented by NOWM, are themselves parties in this He is the one managing the
case. 16 Sergio F. Naguiat Enterprises
Third Issue: Liability of Petitioner- and he is the one whom we
Corporations and Their Respective Officers believe as our employer
The resolution of this issue involves another factual finding that Atty. Suarez
Naguiat Enterprises actually managed, supervised and controlled What is exactly the position of
employment terms of the taxi drivers, making it their indirect employer. Sergio F. Naguiat with the
As adverted to earlier, factual findings of quasi-judicial bodies are Sergio F. Naguiat
binding upon the court in the absence of a showing of grave abuse of Enterprises?
discretion. Witness
Unfortunately, the NLRC did not discuss or give any explanation for He is the owner, sir.
holding Naguiat Enterprises and its officers jointly and severally liable Atty. Suarez
in discharging CFTI's liability for payment of separation pay. We again How about with Clark Field
remind those concerned that decisions, however concisely written, Taxi Incorporated what is the
must distinctly and clearly set forth the facts and law upon which they position of Mr. Naguiat?
are based. 17 This rule applies as well to dispositions by quasi-judicial Witness
and administrative bodies. What I know is that he is a
Naguiat Enterprise Not Liable concessionaire.
In impleading Naguiat Enterprises as solidarily liable for the obligations x x x           x x x          x x x
of CFTI, respondents rely on Articles 106, 18 107 19 and 109 20 of the Atty. Suarez
Labor Code. But do you also know that
Based on factual submissions of the parties, the labor arbiter, however, Sergio F. Naguiat is the
found that individual respondents were regular employees of CFTI who President of Clark Field Taxi,
received wages on a boundary or commission basis. Incorporated?
We find no reason to make a contrary finding. Labor-only contracting Witness
exists where: (1) the person supplying workers to an employer does Yes, sir.
not have substantial capital or investment in the form of tools, Atty. Suarez
equipment, machinery, and work premises, among others; and (2) the How about Mr. Antolin
workers recruited and placed by such person are performing activities Naguiat what is his role in the
which are directly related to the principal business of the employer. 21 taxi services, the operation of
 the Clark Field Taxi,
Incorporated?
Witness
He is the vice president. 28
And, although the witness insisted that Naguiat Enterprises was his
employer, he could not deny that he received his salary from the office
of CFTI inside the base. 29
Another driver-claimant admitted, upon the prodding of counsel for the
corporations, that Naguiat Enterprises was in the trading business
while CFTI was in taxi services. 30
In addition, the Constitution 31 of CFTI-AAFES Taxi Drivers
Association which, admittedly, was the union of individual respondents
while still working at Clark Air Base, states that members thereof are
the employees of CFTI and "(f)or collective bargaining purposes, the
definite employer is the Clark Field Taxi Inc."
From the foregoing, the ineludible conclusion is that CFTI was the
actual and direct employer of individual respondents, and that Naguiat
Enterprises was neither their indirect employer nor labor-only
contractor. It was not involved at all in the taxi business.
CFTI president
solidarily liable
Petitioner-corporations would likewise want to avoid the solidary
liability of their officers. To bolster their position, Sergio F. Naguiat and
Antolin T. Naguiat specifically aver that they were denied due process
since they were not parties to the complaint below. 32 In the broader
interest of justice, we, however, hold that Sergio F. Naguiat, in his
capacity as president of CFTI, cannot be exonerated from joint and
several liability in the payment of separation pay to individual
respondents.
A.C. Ransom Labor Union-CCLU vs. NLRC 33 is the case in point.
A.C. Ransom Corporation was a family corporation, the stockholders of
which were members of the Hernandez family. In 1973, it filed an
application for clearance to close or cease operations, which was duly
granted by the Ministry of Labor and Employment, without prejudice to
the right of employees to seek redress of grievance, if any. Backwages
of 22 employees, who engaged in a strike prior to the closure, were
subsequently computed at P164,984.00. Up to September 1976, the
union filed about ten (10) motions for execution against the
corporation, but none could be implemented, presumably for failure to
find leviable assets of said corporation. In its last motion for execution,
the union asked that officers and agents of the company be held
personally liable for payment of the backwages. This was granted by
the labor arbiter. In the corporation's appeal to the NLRC, one of the
issues raised was: "Is the judgment against a corporation to reinstate
its dismissed employees with backwages, enforceable against its
officer and agents, in their individual, private and personal capacities,
who were not parties in the case where the judgment was rendered!"
The NLRC answered in the negative, on the ground that officers of a
corporation are not liable personally for official acts unless they
exceeded the scope of their authority.
On certiorari, this Court reversed the NLRC and upheld the labor
arbiter. In imposing joint and several liability upon the company
president, the Court, speaking through Mme. Justice Ameurfina
Melencio-Herrera, ratiocinated this wise:
(b) How can the foregoing (Articles 265 and 273 of
the Labor Code) provisions be implemented when
the employer is a corporation? The answer is
found in Article 212(c) of the Labor Code which
provides:
(c) "Employer" includes any person acting in the
interest of an employer, directly or indirectly. The
term shall not include any labor organization or
any of its officers or agents except when acting as
employer.
The foregoing was culled from Section 2 of RA
602, the Minimum Wage Law. Since RANSOM is
an artificial person, it must have an officer who can
be presumed to be the employer, being the
"person acting in the interest of (the) employer"
RANSOM. The corporation, only in the technical
sense, is the employer.
The responsible officer of an employer corporation
can be held personally, not to say even criminally,
liable for nonpayment of back wages. That is the
policy of the law. . . .
(c) If the policy of the law were otherwise, the
corporation employer can have devious ways for
evading payment of back wages. . . .
(d) The record does not clearly identify "the officer
or officers" of RANSOM directly responsible for
failure to pay the back wages of the 22 strikers. In
the absence of definite Proof in that regard, we
believe it should be presumed that the responsible
officer is the President of the corporation who can
be deemed the chief operation officer thereof.
Thus, in RA 602, criminal responsibility is with the
"Manager or in his default, the person acting as
such." In RANSOM. the President appears to be
the Manager. (Emphasis supplied.)
Sergio F. Naguiat, admittedly, was the president of CFTI who actively
managed the business. Thus, applying the ruling in A.C. Ransom, he
falls within the meaning of an "employer" as contemplated by the Labor
Code, who may be held jointly and severally liable for the obligations of
the corporation to its dismissed employees.
Moreover, petitioners also conceded that both CFTI and Naguiat
Enterprises were "close family corporations" 34 owned by the Naguiat
family. Section 100, paragraph 5, (under Title XII on Close
Corporations) of the Corporation Code, states:
(5) To the extent that the stockholders are actively
engage(d) in the management or operation of the
business and affairs of a close corporation, the
stockholders shall be held to strict fiduciary duties
to each other and among themselves. Said
stockholders shall be personally liable for
corporate torts unless the corporation has
obtained reasonably adequate liability insurance.
(emphasis supplied)
Nothing in the records show whether CFTI obtained
"reasonably adequate liability insurance;" thus, what remains
is to determine whether there was corporate tort.
Our jurisprudence is wanting as to the definite scope of "corporate
tort." Essentially, "tort" consists in the violation of a right given or the
omission of a duty imposed by law. 35 Simply stated, tort is a breach of
a legal duty. 36 Article 283 of the Labor Code mandates the employer
to grant separation pay to employees in case of closure or cessation of
operations of establishment or undertaking not due to serious business
losses or financial reverses, which is the condition obtaining at bar.
CFTI failed to comply with this law-imposed duty or obligation.
Consequently, its stockholder who was actively engaged in the
management or operation of the business should be held personally
liable.
Furthermore, in MAM Realty Development vs. NLRC, 37 the Court
recognized that a director or officer may still be held solidarily liable
with a corporation by specific provision of law. Thus:
. . . A corporation, being a juridical entity, may act
only through its directors, officers and employees.
Obligations incurred by them, acting as such
corporate agents, are not theirs but the direct
accountabilities of the corporation they represent.
True, solidary liabilities may at times be incurred
but only when exceptional circumstances warrant
such as, generally, in the following cases:
xxx xxx xxx
4. When a director, trustee or officer is made, by
specific provision of law, personally liable for his
corporate action. (footnotes omitted)
As pointed out earlier, the fifth paragraph of Section 100 of the
Corporation Code specifically imposes personal liability upon the
stockholder actively managing or operating the business and affairs of
the close corporation.
In fact, in posting the surety bond required by this Court for the
issuance of a temporary restraining order enjoining the execution of the
assailed NLRC Resolutions, only Sergio F. Naguiat, in his individual
and personal capacity, principally bound himself to comply with the
obligation thereunder, i.e., "to guarantee the payment to private
respondents of any damages which they may incur by reason of the
issuance of a temporary restraining order sought, if it should be finally
adjudged that said principals were not entitled thereto. 38
The Court here finds no application to the rule that a corporate officer
cannot be held solidarily liable with a corporation in the absence of
evidence that he had acted in bad faith or with malice. 39 In the
present case, Sergio Naguiat is held solidarily liable for corporate tort
because he had actively engaged in the management and operation of
CFTI, a close corporation.
Antolin Naguiat not personally liable
Antolin T. Naguiat was the vice president of the CFTI. Although he
carried the title of "general manager" as well, it had not been shown
that he had acted in such capacity. Furthermore, no evidence on the
extent of his participation in the management or operation of the
business was preferred. In this light, he cannot be held solidarily liable
for the obligations of CFTI and Sergio Naguiat to the private
respondents.
Fourth Issue: No Denial of Due Process
Lastly, in petitioners' Supplement to their original petition, they assail
the NLRC Resolution holding Sergio F. Naguiat and Antolin T. Naguiat
jointly and severally liable with petitioner-corporations in the payment
of separation pay, averring denial of due process since the individual
Naguiats were not impleaded as parties to the complaint.
We advert to the case of A.C. Ransom once more. The officers of the
corporation were not parties to the case when the judgment in favor of
the employees was rendered. The corporate officers raised this issue
when the labor arbiter granted the motion of the employees to enforce
the judgment against them. In spite of this, the Court held the
corporation president solidarily liable with the corporation.
Furthermore, Sergio and Antolin Naguiat voluntarily submitted
themselves to the jurisdiction of the labor arbiter when they, in their
individual capacities, filed a position paper 40 together with CFTI,
before the arbiter. They cannot now claim to have been denied due
process since they availed of the opportunity to present their positions.
WHEREFORE, the foregoing premises considered, the petition is
PARTLY GRANTED. The assailed February 28, 1994 Resolution of the
NLRC is hereby MODIFIED as follows:
(1) Petitioner Clark Field Taxi, Incorporated, and Sergio F. Naguiat,
president and co-owner thereof, are ORDERED to pay, jointly and
severally, the individual respondents their separation pay computed at
US$120.00 for every year of service, or its peso equivalent at the time
of payment or satisfaction of the judgment;
(2) Petitioner Sergio F. Naguiat Enterprises, Incorporated, and Antolin
T. Naguiat are ABSOLVED from liability in the payment of separation
pay to individual respondents.
SO ORDERED.
ERNESTO RAMAS UYPITCHING and RAMAS UYPITCHING SONS,
INC., petitioners,
vs.
ERNESTO QUIAMCO, respondent.
DECISION
CORONA, J.:
Honeste vivere, non alterum laedere et jus suum cuique tribuere. To
live virtuously, not to injure others and to give everyone his due. These
supreme norms of justice are the underlying principles of law and order
in society. We reaffirm them in this petition for review on certiorari
assailing the July 26, 2000 decision 1 and October 18, 2000 resolution
of the Court of Appeals (CA) in CA-G.R. CV No. 47571.
In 1982, respondent Ernesto C. Quiamco was approached by Juan
Davalan,2 Josefino Gabutero and Raul Generoso to amicably settle the
civil aspect of a criminal case for robbery 3 filed by Quiamco against
them. They surrendered to him a red Honda XL-100 motorcycle and a
photocopy of its certificate of registration. Respondent asked for the
original certificate of registration but the three accused never came to
see him again. Meanwhile, the motorcycle was parked in an open
space inside respondent’s business establishment, Avesco-AVNE
Enterprises, where it was visible and accessible to the public.
It turned out that, in October 1981, the motorcycle had been sold on
installment basis to Gabutero by petitioner Ramas Uypitching Sons,
Inc., a family-owned corporation managed by petitioner Atty. Ernesto
Ramas Uypitching. To secure its payment, the motorcycle was
mortgaged to petitioner corporation.4
When Gabutero could no longer pay the installments, Davalan
assumed the obligation and continued the payments. In September
1982, however, Davalan stopped paying the remaining installments
and told petitioner corporation’s collector, Wilfredo Veraño, that the
motorcycle had allegedly been "taken by respondent’s men."
Nine years later, on January 26, 1991, petitioner Uypitching,
accompanied by policemen, 5 went to Avesco-AVNE Enterprises to
recover the motorcycle. The leader of the police team, P/Lt. Arturo
Vendiola, talked to the clerk in charge and asked for respondent. While
P/Lt. Vendiola and the clerk were talking, petitioner Uypitching paced
back and forth inside the establishment uttering "Quiamco is a thief of
a motorcycle."
On learning that respondent was not in Avesco-AVNE Enterprises, the
policemen left to look for respondent in his residence while petitioner
Uypitching stayed in the establishment to take photographs of the
motorcycle. Unable to find respondent, the policemen went back to
Avesco-AVNE Enterprises and, on petitioner Uypitching’s instruction
and over the clerk’s objection, took the motorcycle.
On February 18, 1991, petitioner Uypitching filed a criminal complaint
for qualified theft and/or violation of the Anti-Fencing Law 6 against
respondent in the Office of the City Prosecutor of Dumaguete City. 7
Respondent moved for dismissal because the complaint did not charge
an offense as he had neither stolen nor bought the motorcycle. The
Office of the City Prosecutor dismissed the complaint 8 and denied
petitioner Uypitching’s subsequent motion for reconsideration.
Respondent filed an action for damages against petitioners in the RTC
of Dumaguete City, Negros Oriental, Branch 37. 9 He sought to hold the
petitioners liable for the following: (1) unlawful taking of the motorcycle;
(2) utterance of a defamatory remark (that respondent was a thief) and
(3) precipitate filing of a baseless and malicious complaint. These acts
humiliated and embarrassed the respondent and injured his reputation
and integrity.
On July 30, 1994, the trial court rendered a decision 10 finding that
petitioner Uypitching was motivated with malice and ill will when he
called respondent a thief, took the motorcycle in an abusive manner
and filed a baseless complaint for qualified theft and/or violation of the
Anti-Fencing Law. Petitioners’ acts were found to be contrary to
Articles 1911 and 2012 of the Civil Code. Hence, the trial court held
petitioners liable to respondent for P500,000 moral damages,
P200,000 exemplary damages and P50,000 attorney’s fees plus costs.
Petitioners appealed the RTC decision but the CA affirmed the trial
court’s decision with modification, reducing the award of moral and
exemplary damages to P300,000 and P100,000, respectively.13
Petitioners sought reconsideration but it was denied. Thus, this
petition.
In their petition and memorandum, petitioners submit that the sole
(allegedly) issue to be resolved here is whether the filing of a complaint
for qualified theft and/or violation of the Anti-Fencing Law in the Office
of the City Prosecutor warranted the award of moral damages,
exemplary damages, attorney’s fees and costs in favor of respondent.
Petitioners’ suggestion is misleading. They were held liable for
damages not only for instituting a groundless complaint against
respondent but also for making a slanderous remark and for taking the
motorcycle from respondent’s establishment in an abusive manner.
Correctness of the Findings of the RTC and CA
As they never questioned the findings of the RTC and CA that malice
and ill will attended not only the public imputation of a crime to
respondent14 but also the taking of the motorcycle, petitioners were
deemed to have accepted the correctness of such findings. This alone
was sufficient to hold petitioners liable for damages to respondent.
Nevertheless, to address petitioners’ concern, we also find that the trial
and appellate courts correctly ruled that the filing of the complaint was
tainted with malice and bad faith. Petitioners themselves in fact
described their action as a "precipitate act." 15 Petitioners were bent on
portraying respondent as a thief. In this connection, we quote with
approval the following findings of the RTC, as adopted by the CA:
x x x There was malice or ill-will [in filing the complaint before
the City Prosecutor’s Office] because Atty. Ernesto Ramas
Uypitching knew or ought to have known as he is a lawyer,
that there was no probable cause at all for filing a criminal
complaint for qualified theft and fencing activity against
[respondent]. Atty. Uypitching had no personal knowledge
that [respondent] stole the motorcycle in question. He was
merely told by his bill collector ([i.e.] the bill collector of
Ramas Uypitching Sons, Inc.)[,] Wilfredo Veraño[,] that Juan
Dabalan will [no longer] pay the remaining installment(s) for
the motorcycle because the motorcycle was taken by the
men of [respondent]. It must be noted that the term used by
Wilfredo Veraño in informing Atty. Ernesto Ramas Uypitching
of the refusal of Juan Dabalan to pay for the remaining
installment was [‘]taken[’], not [‘]unlawfully taken[’] or ‘stolen.’
Yet, despite the double hearsay, Atty. Ernesto Ramas
Uypitching not only executed the [complaint-affidavit]
wherein he named [respondent] as ‘the suspect’ of the stolen
motorcycle but also charged [respondent] of ‘qualified theft
and fencing activity’ before the City [Prosecutor’s] Office of
Dumaguete. The absence of probable cause necessarily
signifies the presence of malice. What is deplorable in all
these is that Juan Dabalan, the owner of the motorcycle, did
not accuse [respondent] or the latter’s men of stealing the
 motorcycle[,] much less bother[ed] to file a case for qualified
theft before the authorities. That Atty. Uypitching’s act in
charging [respondent] with qualified theft and fencing activity
is tainted with malice is also shown by his answer to the
question of Cupid Gonzaga16 [during one of their
conversations] - "why should you still file a complaint? You
have already recovered the motorcycle…"[:] "Aron motagam
ang kawatan ug motor." ("To teach a lesson to the thief of
motorcycle.")17
Moreover, the existence of malice, ill will or bad faith is a factual
matter. As a rule, findings of fact of the trial court, when affirmed by the
appellate court, are conclusive on this Court. We see no compelling
reason to reverse the findings of the RTC and the CA.
Petitioners Abused Their Right of Recovery as Mortgagee(s)
Petitioners claim that they should not be held liable for petitioner
corporation’s exercise of its right as seller-mortgagee to recover the
mortgaged vehicle preliminary to the enforcement of its right to
foreclose on the mortgage in case of default. They are clearly
mistaken.
True, a mortgagee may take steps to recover the mortgaged property
to enable it to enforce or protect its foreclosure right thereon. There is,
however, a well-defined procedure for the recovery of possession of
mortgaged property: if a mortgagee is unable to obtain possession of a
mortgaged property for its sale on foreclosure, he must bring a civil
action either to recover such possession as a preliminary step to the
sale, or to obtain judicial foreclosure.18
Petitioner corporation failed to bring the proper civil action necessary to
acquire legal possession of the motorcycle. Instead, petitioner
Uypitching descended on respondent’s establishment with his
policemen and ordered the seizure of the motorcycle without a search
warrant or court order. Worse, in the course of the illegal seizure of the
motorcycle, petitioner Uypitching even mouthed a slanderous
statement.
No doubt, petitioner corporation, acting through its co-petitioner
Uypitching, blatantly disregarded the lawful procedure for the
enforcement of its right, to the prejudice of respondent. Petitioners’
acts violated the law as well as public morals, and transgressed the
proper norms of human relations.
The basic principle of human relations, embodied in Article 19 of the
Civil Code, provides:
Art. 19. Every person must in the exercise of his rights and in
the performance of his duties, act with justice, give every one
his due, and observe honesty and good faith.
Article 19, also known as the "principle of abuse of right," prescribes
that a person should not use his right unjustly or contrary to honesty
and good faith, otherwise he opens himself to liability. 19 It seeks to
preclude the use of, or the tendency to use, a legal right (or duty) as a
means to unjust ends.
There is an abuse of right when it is exercised solely to prejudice or
injure another.20 The exercise of a right must be in accordance with the
purpose for which it was established and must not be excessive or
unduly harsh; there must be no intention to harm another. 21 Otherwise,
liability for damages to the injured party will attach.
In this case, the manner by which the motorcycle was taken at
petitioners’ instance was not only attended by bad faith but also
contrary to the procedure laid down by law. Considered in conjunction
with the defamatory statement, petitioners’ exercise of the right to
recover the mortgaged vehicle was utterly prejudicial and injurious to
respondent. On the other hand, the precipitate act of filing an
unfounded complaint could not in any way be considered to be in
accordance with the purpose for which the right to prosecute a crime
was established. Thus, the totality of petitioners’ actions showed a
calculated design to embarrass, humiliate and publicly ridicule
respondent. Petitioners acted in an excessively harsh fashion to the
prejudice of respondent. Contrary to law, petitioners willfully caused
damage to respondent. Hence, they should indemnify him.22
WHEREFORE, the petition is hereby DENIED. The July 26, 2000
decision and October 18, 2000 resolution of the Court of Appeals in
CA-G.R. CV No. 47571 are AFFIRMED.
Triple costs against petitioners, considering that petitioner Ernesto
Ramas Uypitching is a lawyer and an officer of the court, for his
improper behavior.
SO ORDERED.
ALFONSO T. YUCHENGCO, Petitioner,
vs.
THE MANILA CHRONICLE PUBLISHING CORPORATION, NOEL
CABRERA, GERRY ZARAGOZA, DONNA GATDULA, RODNEY P.
DIOLA, RAUL VALINO, THELMA SAN JUAN and ROBERT
COYIUTO, JR., Respondents.
R E S O L U T I ON
PERALTA, J.:
For resolution is the Motion for Reconsideration 1 dated January 15,
2010, filed by the respondents, and the Supplemental Motion for
Reconsideration2 of respondent Robert Coyiuto, Jr., dated March 17,
2010, from the Decision rendered in favor of petitioner Alfonso T.
Yuchengco, dated November 25, 2009.
At the outset, a brief narration of the factual and procedural
antecedents that transpired and led to the filing of the motions is in
order.
The present controversy arose when in the last quarter of 1993,
several allegedly defamatory articles against petitioner were published
in The Manila Chronicle by Chronicle Publishing Corporation.
Consequently, petitioner filed a complaint against respondents before
the Regional Trial Court (RTC) of Makati City, Branch 136, docketed as
Civil Case No. 94-1114, under three separate causes of action,
namely: (1) for damages due to libelous publication against Neal H.
Cruz, Ernesto Tolentino, Noel Cabrera, Thelma San Juan, Gerry
Zaragoza, Donna Gatdula, Raul Valino, Rodney P. Diola, all members
of the editorial staff and writers of The Manila Chronicle, and Chronicle
Publishing; (2) for damages due to abuse of right against Robert
Coyiuto, Jr. and Chronicle Publishing; and (3) for attorney’s fees and
costs against all the respondents.
On November 8, 2002, the trial court rendered a Decision 3 in favor of
petitioner.
Aggrieved, respondents sought recourse before the Court of Appeals
(CA). On March 18, 2008, the CA rendered a Decision 4 affirming in toto
the decision of the RTC.
Respondents then filed a Motion for Reconsideration 5 praying that the
CA reconsider its earlier decision and reverse the decision of the trial
court. On August 28, 2008, the CA rendered an Amended Decision 6
reversing the earlier Decision.
Subsequently, petitioner filed the present recourse before this Court
which puts forth the following assignment of errors:
A. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR IN RULING THAT THE CASE OF ARTURO
BORJAL, ET AL. V. COURT OF APPEALS, ET AL., CITED BY
RESPONDENTS IN THEIR MOTION FOR RECONSIDERATION,
WARRANTED THE REVERSAL OF THE CA DECISION DATED
MARCH 18, 2008.
B. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR IN RULING THAT THE SUBJECT ARTICLES
IN THE COMPLAINT FALL WITHIN THE CONCEPT OF PRIVILEGED
COMMUNICATION.
C. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR IN RULING THAT PETITIONER IS A PUBLIC
OFFICIAL OR PUBLIC FIGURE.7
On November 25, 2009, this Court rendered a Decision partially
granting the petition.
Respondents later filed a Motion for Reconsideration dated January
15, 2010, which the Court denied in the Resolution 8 dated March 3,
2010.
Meanwhile, respondent Coyiuto, Jr. also filed a Motion for Leave to File
Supplemental Motion for Reconsideration with Attached Supplemental
Motion, both dated March 17, 2010.
On April 21, 2010, this Court issued a Resolution 9 resolving to recall
the Resolution dated March 3, 2010; grant Coyiuto, Jr.’s motion for
leave to file supplemental motion for reconsideration; note the
supplemental motion for reconsideration; and require petitioner to
comment on the motion for reconsideration and supplemental motion
for reconsideration.
On June 22, 2010, petitioner filed his Comment on the Motion for
Reconsideration10 dated January 15, 2010 and Comment on
respondent Coyiuto, Jr.’s Supplemental Motion for Reconsideration 11
dated 17 March 2010.
In the Motion for Reconsideration, respondents moved for a
reconsideration of the earlier decision on the following grounds:
1. MALICE-IN-FACT HAS NOT BEEN PROVEN.
2. PETITIONER IS A "PUBLIC FIGURE."
3. THE SUBJECT OF THE PUBLICATIONS CONSTITUTES
FAIR COMMENTS, ON PUBLIC ISSUES, ON MATTERS
OF PUBLIC INTEREST AND NATIONAL CONCERN.
4. RESPONDENTS DID NOT ACT IN A RECKLESS
MANNER OR IN COMPLETE DISREGARD OF THE TRUTH
OF THE MATTERS COVERED BY THE SUBJECT
PUBLICATIONS.
 5. THE PROTECTIVE MANTLE OF QUALIFIED
PRIVILEGED COMMUNICATIONS PROTECTS THE
SUBJECT PUBLICATIONS.
6. THERE IS NO LEGAL OR EVIDENTIARY BASIS TO
HOLD DONNA GATDULA, JOINTLY AND SEVERALLY,
LIABLE FOR THE SUBJECT PUBLICATIONS, TOGETHER
WITH THE EDITORS AND STAFF OF THE NEWSPAPER.
7. THERE IS NO EVIDENCE TO HOLD THELMA SAN
JUAN RESPONSIBLE FOR THE SUBJECT
PUBLICATIONS.
8. THE "QUICK NOTES" COLUMN OF MR. RAUL VALINO
ARE BASED ON FACTS; THUS, NOT LIBELOUS.
9. ROBERT COYIUTO, JR. IS NOT IMPLEADED WITH THE
EDITORS AND STAFF MEMBERS OF THE MANILA
CHRONICLE, BUT IS SUED IN "HIS PERSONAL
CAPACITY" FOR AN "ABUSE OF RIGHT" AND NO
EVIDENCE LINKS HIM TO THE SUBJECT
PUBLICATIONS.
10. THE AWARDED DAMAGES ARE EXCESSIVE,
EQUITABLE AND UNJUSTIFIED.12
In his Supplemental Motion for Reconsideration, Coyiuto, Jr. raises the
following arguments:
I.
WITH ALL DUE RESPECT, THIS HONORABLE COURT
OBVIOUSLY OVERLOOKED THE FACT THAT IN
PETITIONER’S AMENDED COMPLAINT (DATED
OCTOBER 17, 1994), RESPONDENT ROBERT COYIUTO,
JR. WAS NOT SUED FOR DAMAGES ALLEGEDLY DUE
TO "LIBELOUS PUBLICATIONS" (FIRST CAUSE OF
ACTION). HE WAS SUED, HOWEVER, IN HIS PERSONAL
CAPACITY FOR "ABUSE OF RIGHT" (SECOND CAUSE
OF ACTION) ALLEGEDLY, AS "CHAIRMAN" OF THE
BOARD, "OFFICER," "PRINCIPAL OWNER," OF THE
MANILA CHRONICLE PUBLISHING CORPORATION
UNDER ARTICLES 19 AND 20 OF THE CIVIL CODE. AS
SUCH, THE IMPOSITION OF MORAL (₱25 MILLION
PESOS) AND EXEMPLARY (₱10 MILLION PESOS)
DAMAGES AGAINST RESPONDENT COYIUTO, JR. HAS
NO BASIS IN LAW AND CONTRARY TO THE SPECIFIC
PROVISIONS OF ARTICLES 2219 AND 2229, IN
RELATION TO ARTICLE 2233, RESPECTIVELY, OF THE
CIVIL CODE AS WILL BE ELUCIDATED HEREUNDER.
II.
WITH ALL DUE RESPECT, APART FROM THE SELF-
SERVING/UNILATERAL ALLEGATION IN PARAGRAPH
3.11 OF THE AMENDED COMPLAINT (ANNEX "C" OF
PETITION FOR REVIEW), NO IOTA OF EVIDENCE WAS
ADDUCED ON TRIAL IN SUPPORT OF THE ALLEGATION
THAT RESPONDENT COYIUTO, JR. WAS "CHAIRMAN",
"PRINCIPAL OWNER" AND "OFFICER" OF RESPONDENT
MANILA CHRONICLE PUBLISHING CORPORATION. SEC
DOCUMENTS SHOW THE CONTRARY, AS WILL BE
DISCUSSED HEREUNDER. SO HOW COULD
RESPONDENT COYIUTO, JR. BE IMPLEADED TO HAVE
"ABUSED HIS RIGHT AS A NON-CHAIRMAN, NON-
STOCKHOLDER, NON-OFFICER OF RESPONDENT
MANILA CHRONICLE PUBLISHING CORPORATION? IT IS
FUNDAMENTAL THAT THE BURDEN OF PROOF RESTS
ON THE PARTY ASSERTING A FACT OR ESTABLISHING
A CLAIM (RULE 131, REVISED RULES OF COURT).13
From the foregoing, it is apparent that the motion for reconsideration
generally restates and reiterates the arguments, which were previously
advanced by respondents and does not present any substantial
reasons, which were not formerly invoked and passed upon by the
Court.
However, from the supplemental motion for reconsideration, it is
apparent that Coyiuto, Jr. raises a new matter which has not been
raised in the proceedings below. This notwithstanding, basic equity
dictates that Coyiuto, Jr. should be given all the opportunity to ventilate
his arguments in the present action, but more importantly, in order to
write finis to the present controversy. It should be noted that the
Resolution denying the Motion for Reconsideration was later recalled
by this Court in the Resolution dated March 3, 2010, and therein,
petitioner was given the opportunity to refute Coyiuto, Jr.’s arguments
by filing his comment on the motion for reconsideration and the
supplemental motion for reconsideration, which petitioner complied
with.
From these Comments and contrary to Coyiuto, Jr.’s contention, it was
substantially established that he was the Chairman of Manila Chronicle
Publishing Corporation when the subject articles were published.
Coyiuto, Jr. even admitted this fact in his Reply and Comment on
Request for Admission,14 to wit:
4. Defendant Robert Coyiuto Jr. ADMITS that he was the Chairman of
the Board but not President of the Manila Chronicle during the period
Novemeber (sic) to December 1993.
5. Defendant Robert Coyiuto Jr. DENIES paragraph 11. He has
already conveyed such denial to plaintiff in the course of the pre-trial. It
was The Manila Chronicle, a newspaper of general circulation, of which
he is, admittedly Chairman of the Board, that published the items
marked as plaintiff’s Exhibits A, B, C, D, E, F, and G.
xxxx
12. This case, based on plaintiff’s Amended Complaint, is limited to the
publications in The Manila Chronicle marked plaintiff’s Exhibits "A" to
"G", consecutively, published by defendant Manila Chronicle. Thus,
only the question of whether Mr. Robert Coyiuto, Jr. was Chairman and
President of defendant Manila Chronicle, during these publications and
whether he caused these publications, among all of plaintiffs’ queries,
are relevant and material to this case. And defendant Robert Coyiuto,
Jr. has answered that: "Yes", he was Chairman of the Board. "No", he
was never President of The Manila Chronicle. "No", he did not cause
the publications in The Manila Chronicle: it was the Manila Chronicle
that published the news items adverted to.15
Both the trial court and the CA affirmed this fact. We reiterate that
factual findings of the trial court, when adopted and confirmed by the
CA, are binding and conclusive on this Court and will generally not be
reviewed on appeal. While this Court has recognized several
exceptions16 to this rule, none of these exceptions exists in the present
case. Accordingly, this Court finds no reason to depart from the
findings of fact of the trial court and the CA.
More importantly and contrary again to Coyiuto, Jr.’s contention, the
cause of action of petitioner based on "abuse of rights," or Article 19, in
relation to Article 20 of the Civil Code, warrants the award of damages.
The principle of abuse of rights as enshrined in Article 19 of the Civil
Code 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 provision of law sets standards which must be observed in the
exercise of one’s rights as well as in the performance of its duties, to
wit: to act with justice; give everyone his due; and observe honesty and
good faith.17
In Globe Mackay Cable and Radio Corporation v. Court of Appeals,18 it
was elucidated that 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." The Court said:
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.19
Corollarilly, Article 20 provides that "every person who, contrary to law,
willfully or negligently causes damage to another shall indemnify the
latter for the same." It speaks of the general sanctions of all other
provisions of law which do not especially provide for its own sanction.
When a right is exercised in a manner which does not conform to the
standards set forth in the said provision and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer
must be responsible.20 Thus, if the provision does not provide a remedy
for its violation, an action for damages under either Article 20 or Article
21 of the Civil Code would be proper.
The question of whether or not the principle of abuse of rights has
been violated resulting in damages under Article 20 or other applicable
provision of law, depends on the circumstances of each case. In the
present case, it was found that Coyiuto, Jr. indeed abused his rights as
Chairman of The Manila Chronicle, which led to the publication of the
libelous articles in the said newspaper, thus, entitling petitioner to
damages under Article 19, in relation to Article 20.
Consequently, the trial court and the CA correctly awarded moral
damages to petitioner. Such damages may be awarded when the
transgression is the cause of petitioner’s anguish. 21 Further, converse
to Coyiuto, Jr.’s argument, although petitioner is claiming damages for
violation of Articles 19 and 20 of the Civil Code, still such violations
directly resulted in the publication of the libelous articles in the
newspaper, which, by analogy, is one of the ground for the recovery of
moral damages under (7) of Article 2219. 22
However, despite the foregoing, the damages awarded to petitioner
appear to be too excessive and warrants a second hard look by the
Court.
While there is no hard-and-fast rule in determining what would be a fair
and reasonable amount of moral damages, the same should not be
palpably and scandalously excessive. Moral damages are not intended
to impose a penalty to the wrongdoer, neither to enrich the claimant at
the expense of the defendant.23
Even petitioner, in his Comment 24 dated June 21, 2010, agree that
moral damages "are not awarded in order to punish the respondents or
to make the petitioner any richer than he already is, but to enable the
latter to find some cure for the moral anguish and distress he has
undergone by reason of the defamatory and damaging articles which
the respondents wrote and published." 25 Further, petitioner cites as
sufficient basis for the award of damages the plain reason that he had
to "go through the ordeal of defending himself everytime someone
approached him to ask whether or not the statements in the
defamatory article are true."
In Philippine Journalists, Inc. (People’s Journal) v. Thoenen, 26 citing
Guevarra v. Almario,27 We noted that the damages in a libel case must
depend upon the facts of the particular case and the sound discretion
of the court, although appellate courts were "more likely to reduce
damages for libel than to increase them." So it must be in this case.
Moral damages are not a bonanza. They are given to ease the
defendant’s grief and suffering. Moral damages should be reasonably
approximate to the extent of the hurt caused and the gravity of the
wrong done.28 The Court, therefore, finds the award of moral damages
in the first and second cause of action in the amount of ₱2,000,000.00
and ₱25,000,000.00, respectively, to be too excessive and holds that
an award of ₱1,000,000.00 and ₱10,000,000.00, respectively, as moral
damages are more reasonable.
As for exemplary damages, Article 2229 provides that exemplary
damages may be imposed by way of example or correction for the
public good. Nonetheless, exemplary damages are imposed not to
enrich one party or impoverish another, but to serve as a deterrent
against or as a negative incentive to curb socially deleterious actions. 29
On this basis, the award of exemplary damages in the first and second
cause of action in the amount of ₱500,000.00 and ₱10,000,000.00,
respectively, is reduced to ₱200,000.00 and ₱1,000,000.00,
respectively.
On the matter of attorney’s fees and costs of suit, Article 2208 of the
same Code provides, among others, that attorney’s fees and expenses
of litigation may be recovered in cases when exemplary damages are
awarded and where the court deems it just and equitable that
attorney’s fees and expenses of litigation should be recovered. In any
event, however, such award must be reasonable, just and equitable. 30
Thus, the award of attorney’s fees and costs is reduced from
₱1,000,000.00 to ₱200,000.00.
One final note, the case against respondent was one for damages
based on the publication of libelous articles against petitioner; hence,
only civil in nature. The rule is that a party who has the burden of proof
in a civil case must establish his cause of action by a preponderance of
evidence. Thus, respondents’ liability was proven only on the basis of
preponderance of evidence, which is quite different from a criminal
case for libel where proof beyond reasonable doubt must be
established.
Corollarilly, under Article 360 of the Revised Penal Code, the person
who "caused the publication" of a defamatory article shall be
responsible for the same. Hence, Coyiuto, Jr. should have been held
jointly and solidarily liable with the other respondents in the first cause
of action under this article and not on the basis of violation of the
principle of abuse of rights founded on Articles 19 and 20 of the Civil
Code. Because of the exclusion of Coyiuto, Jr. in the first cause of
action for libel, he cannot be held solidarily liable with the other
respondents in the first cause of action. Nonetheless, since damage to
petitioner was in fact established warranting the award of moral and
exemplary damages, the same could only be awarded based on
petitioner’s second cause of action impleading Coyiuto, Jr. for violation
of the principle of abuse of right.
It did not escape the attention of the Court that in filing two different
causes of action based on the same published articles, petitioner
intended the liability of Coyiuto, Jr. to be different from the other
respondents. It can be inferred that if Coyiuto, Jr. was impleaded in the
first cause of action for recovery of the civil liability in libel, petitioner
could not have prayed for higher damages, considering that the other
respondents, who are jointly and severally liable with one another, are
not in the same financial standing as Coyiuto, Jr. Petitioner, in effect,
had spared the other respondents from paying such steep amount of
damages, while at the same time prayed that Coyiuto, Jr. pay millions
of pesos by way of moral and exemplary damages in the second cause
of action.
WHEREFORE, the Motion for Reconsideration and Supplemental
Motion for Reconsideration are PARTIALLY GRANTED.1âwphi1 The
Decision of this Court, dated November 25, 2009, is MODIFIED to read
as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered
as follows:
1. On the First Cause of Action, ordering defendants
Chronicle Publishing, Neil H. Cruz, Ernesto Tolentino, Noel
Cabrera, Thelma San Juan, Gerry Zaragoza, Donna
Gatdula, Raul Valino and Rodney Diola, to pay plaintiff
Yuchengco, jointly and severally:
a. the amount of One Million Pesos
(₱1,000,000.00) as moral damages; and
b. the amount of Two Hundred Thousand Pesos
(₱200,000.00) as exemplary damages;
2. On the Second Cause of Action, ordering defendants
Robert Coyiuto, Jr. and Chronicle Publishing to pay plaintiff
Yuchengco, jointly and severally:
a. the amount of Ten Million Pesos
(₱10,000,000.00) as moral damages; and
b. the amount of One Million Pesos
(₱1,000,000.00) as exemplary damages;
3. On the Third Cause of Action, ordering all defendants to
pay plaintiff Yuchengco, jointly and severally, the amount of
Two Hundred Thousand Pesos (₱200,000.00) as attorney’s
fee and legal costs.
Costs against respondents.
SO ORDERED.
SEA COMMERCIAL COMPANY, INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, JAMANDRE
INDUSTRIES, INC. and TIRSO JAMANDRE, respondents.
 
GONZAGA-REYES, J.:
In this petition for review by certiorari, SEA Commercial Company, Inc.
(SEACOM) assails the decision of the Court of Appeals in CA-G.R. CV
NO. 31263 affirming in toto the decision of the Regional Trial Court of
Manila, Branch 5, in Civil Case No. 122391, in favor of Jamandre
Industries, Inc. (JII) et al., the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in
favor of the defendant and against the plaintiff,
ordering the plaintiff:
 1) To pay defendant the sum of P66,156.15
(minus 18,843.85) with legal interest thereon, from
the date of the filing of the counterclaim until fully
paid;
2) To pay defendant P2,000.00 as moral and
exemplary damages;
3) To pay attorney's fees in the sum of
P10,000.00; and
4) To pay the costs of this suit.
SO ORDERED.
SEACOM is a corporation engaged in the business of selling and
distributing agricultural machinery, products and equipment. On
September 20, 1966, SEACOM and JII entered into a dealership
agreement whereby SEACOM appointed JII as its exclusive dealer in
the City and Province of Iloilo 1. Tirso Jamandre executed a suretyship
agreement binding himself jointly and severally with JII to pay for all
obligations of JII to SEACOM 2. The agreement was subsequently
amended to include Capiz in the territorial coverage and to make the
dealership agreement on a non-exclusive basis 3 . In the course of the
dealership agreement, JII allegedly incurred a balance of P18,843.85
for unpaid deliveries, and SEACOM brought action to recover said
amount plus interest and attorney's fees.
JII filed an Answer denying the obligation and interposing a
counterclaim for damages representing unrealized profits when JII sold
to the Farm System Development Corporation (FSDC) twenty one (21)
units of Mitsubishi power tillers. In the counterclaim, JII alleged that as
a dealer in Capiz, JII contracted to sell in 1977 twenty-four (24) units of
Mitsubishi power tillers to a group of farmers to be financed by said
corporation, which fact JII allegedly made known to petitioner, but the
latter taking advantage of said information and in bad faith, went
directly to FSDC and dealt with it and sold twenty one (21) units of said
tractors, thereby depriving JII of unrealized profit of eighty-five
thousand four hundred fifteen and 61/100 pesos (P85,415.61).
The trial court rendered its decision on January 24, 1990 ordering JII to
pay SEACOM the amount of Eighteen Thousand Eight Hundred Forty
Three and 85/100 (P18,843.85) representing its outstanding obligation.
The trial court likewise granted JII's counterclaim for unrealized profits,
and for moral and exemplary damages and attorney' fees as above
quoted.
SEACOM appealed the decision on the counterclaim.
The Court of Appeals held that while there exists no agency
relationship between SEACOM and JII, SEACOM is liable for damages
and unrealized profits to JII.
This Court, however, is convinced that with or
without the existence of an agency relationship
between appellant SEACOM and appellee JII and
notwithstanding the error committed by the lower
court in finding that an agency relationship existed
between appellant and defendant corporation the
former is liable for the unrealized profits which the
latter could have gained had not appellant unjustly
stepped in and in bad faith unethically intervened.
It should be emphasized that the very purpose of
the dealership agreement is for SEACOM to have
JII as its dealer to sell its products in the provinces
of Capiz and Iloilo. In view of this agreement, the
second assigned error that the lower court erred in
holding that appellant learned of the FSDC
transaction from defendant JII is clearly immaterial
and devoid of merit. The fact that the dealership is
on a non-exclusive basis does not entitle appellant
SEACOM to join the fray as against its dealer. To
do so, is to violate the norms of conduct enjoined
by Art. 19 of the Civil Code. By virtue of such
agreement, the competition in the market as
regards the sale of farm equipment shall be
between JII, as the dealer of SEACOM and other
companies, not as against SEACOM itself.
However, SEACOM, not satisfied with the
presence of its dealer JII in the market, joined the
competition even as the against the latter and,
therefore, changed the scenario of the competition
thereby rendering inutile the dealership agreement
which they entered into the manifest prejudice of
JII. Hence, the trial court was correct when it
applied Art. 19 of the Civil Code in the case at bar
in that appellant SEACOM acted in bad faith when
it competed with its own dealer as regards the sale
of farm machineries, thereby depriving appellee JII
of the opportunity to gain a clear profit of
P85,000.00.
and affirmed the judgment appealed from in toto.
Hence this petition for review on certiorari, which submits the following
reasons for the allowance thereof:
THE RESPONDENT COURT OF APPEALS
DECIDED QUESTIONS OF SUBSTANCE IN A
WAY NOT IN ACCORDANCE WITH LAW AND
JURISPRUDENCE, CONSIDERING THAT:
A
THE RESPONDENT COURT OF APPEALS
GARAVELY ERRED IN RULING THAT
PETITIONER IS LIABLE TO PAY DAMAGES AND
UNREALIZED PROFITS TO THE PRIVATE
RESPONDENTS DESPITE THE FACT THAT NO
AGENCY RELATIONSHIP EXISTS BETWEEN
THEM.
B
THE RESPONDENT COURT OF APPEALS
GRAVELY ERRED IN RULING THAT
PETITIONER ACTED IN BAD FAITH AGAINST
THE PRIVATE RESPONDENT CORPORATION
DESPITE THE FACT THAT SAID RULING IS
CONTRARY TO THE EVIDENCE ON RECORD.
C
THE RESPONDENT COURT OF APPEALS
GRAVELY ERRED IN RULING THAT THE NON-
EXCLUSIVITY CLAUSE IN THE DEALERSHIP
AGREEMENT EXECUTED BETWEEN THE
PETITIONER AND PRIVATE RESPONDENT
CORPORATION PRECLUDES THE PETITIONER
FROM COMPETING WITH THE PRIVATE
RESPONDENT CORPORAITON.
D
THE RESPONDENT COURT OF APPEALS
GRAVELY ERRED IN RULING THAT PRIVATE
RESPONDENT IS ENTITLED TO UNREALIZED
PROFITS, MORAL AND EXEMPLARY DAMAGES
AND ATTORNEY'S FEES. 4
Petitioner SEACOM disputes the conclusion of the Court of Appeals
that despite the fact that no agency relationship existed between the
parties, the SEACOM is still liable in damages and unrealized profits
for the reason that it acted in bad faith. Petitioner SEACOM invokes the
non-exclusivity clause in the dealership agreement and claims that the
transaction with FSDC was concluded pursuant to a public bidding and
not on the basis of alleged information it received from private
respondent Tirso Jamandre. Moreover, petitioner SEACOM claims that
it did not underprice its products during the public bidding wherein both
SEACOM and JII participated. Petitioner also disputes the award of
moral damages to JII which is a corporation, in the absence of any
evidence that the said corporation had a good reputation which was
debased.
Private respondents in their comment, contends that the four assigned
errors raise mixed questions of fact and law and are therefore beyond
the jurisdiction of the Supreme Court which may take cognizance of
only questions of law. The assigned errors were also refuted to secure
affirmance of the appealed decision. JII maintains that the bidding set
by FSDC on March 24, 1997 was scheduled after the demonstration
conducted by JII, and after JII informed SEACOM about the preference
of the farmers to buy Mitsubishi tillers. JII further rebuts the SEACOM's
contention that the transaction with FSDC was pursuant to a public
bidding with full disclosure to the public and private respondent JII
considering that JII had nothing to do with the list of 37 bidders and
cannot be bound by the listing made by SEACOM's employee;
moreover, JII did not participate in the bidding not having been
informed about it. Furthermore, the price at which SEACOM sold to
FSDC was lower than the price it gave to JII. Also, even if the
dealership agreement was not exclusive, it was breached when
petitioner in bad faith sold directly to FSDC with whom JII had
previously offered the subject farm equipment. With respect to the
awards of moral and exemplary damages, JII seeks an affirmation of
the ruling of the Court of Appeals justifying the awards.
SEACOM filed Reply defending the jurisdiction of this Court over the
instant petition since the decision of the Court of Appeals was "based
on a misapprehension of facts". SEACOM insists that FSDC's
purchase was made pursuant to a public bidding, and even if SEACOM
did not participate thereon, JII would not necessarily have closed the
deal since thirty seven (37) bidders participated. SEACOM contends
that no evidence was presented to prove that the bidding was a
fraudulent scheme of SEACOM and FSDC. SEACOM further
controverts JII's contention that JII did not take part in the bidding as
Tirso Jamandre was one of the bidders and that SEACOM underpriced
its products to entice FSDC to buy directly from it. In fine, JII is not
entitled to the award of unrealized profits and damages.
In its Rejoinder, private responder insist that there is an agency
relationship, citing the evidence showing that credit memos and not
cash vouchers were issued to JII by SEACOM for every delivery from
November 26, 1976 to December 24, 1978. Private respondents
maintain that SEACOM "torpedoed the emerging deal between JII and
FSDC after being informed about it by JII by dealing directly with FSDC
at a lower price" and after betraying JII, SEACOM would cover up the
deceit by conniving with FSDC to post up a "sham public bidding.
SEACOM's sur-rejoinder contains basically a reiteration of its
contention in previous pleadings. Additionally, it is contended that
private respondents are barred from questioning in their Rejoinder, the
finding of the Court of Appeals that there is no agency relationship
between the parties since this matter was not raised as error in their
comment.
The core issue is whether SEACOM acted in bad faith when it
competed with its own dealer as regards the sale of farm machineries
to FSDC.
Both the trial court and the Court of Appeals held affirmatively; the trial
court found that JII was an agent of SEACOM and the act of SEACOM
in dealing directly with FSDC was unfair and unjust to its agent, and
that there was fraud in the transaction between FSDC and SEACOM to
the prejudice of JII. On the other hand, the Court of Appeals ruled that
there was no agency relationship between the parties but SEACOM is
nevertheless liable in damages for having acted in bad faith when it
competed with its own dealer in the sale of the farm machineries to
FSDC. Both courts invoke as basis for the award Article 19 of the Civil
Code which reads as follows:
Art. 19. Every person must, in the exercise of his
rights and in the performance of his duties, act
with justice, give everyone his due and observe
honesty and good faith.
The principle of abuse of rights stated in the above article, departs from
the classical theory that "he who uses a right injures no one". The
modern tendency is to depart from the classical and traditional theory,
and to grant indemnity for damages in cases where there is an abuse
of rights, even when the act is not illicit. 5
Art. 19 was intended to expand the concept of torts by granting
adequate legal remedy for the untold number of moral wrongs which is
impossible for human foresight to provide specifically in statutory law. 6
If mere fault or negligence in one's acts can make him liable for
damages for injury caused thereby, with more reason should abuse or
bad faith make him liable. The absence of good faith is essential to
abuse of right. Good faith is an honest intention to abstain from taking
any unconscientious advantage of another, even through the forms or
technicalities of the law, together with an absence of all information or
belief of fact which would render the transaction unconscientious. In
business relations, it means good faith as understood by men of
affairs. 7
While Article 19 may have been intended as a mere declaration of
principle 8, the "cardinal law on human conduct" expressed in said
article has given rise to certain rules, e.g. that where a person
exercises his rights but does so arbitrarily or unjustly or performs his
duties in a manner that is not in keeping with honesty and good faith,
he opens himself to liability. 9 The elements of an abuse of rights
under Article 19 are: (1) there is a legal right or duty; (2) which is
exercised in bad faith; (3) for the sole intent of prejudicing or injuring
another. 10
The issue whether JII is "entitled to recovery on its counterclaim for
unrealized profit in the twenty one (21) units of Mitsubishi power tillers
sold by SEACOM to FSDC" was resolved by the trial court in favor of
JII on the basis of documentary evidence 11 showing that (1) JII has
informed SEACOM as early as February 1977 of the promotions
undertaken by JII for the sale of 24 contracted units to FSDC and in
connection therewith, requested a 50% discount to make the price
competitive, and to increase the warranty period for eight months to
one year. In said letter Jamandre clarified that they were not amenable
to SEACOM's offering directly to FSDC" and to be only given the usual
overriding commission as "we have considerable investments on this
transaction". (2) In response, the general sales manager of SEACOM
declined to give the requested 50% discount and offered a "less 30%
less 10% up to end March . . . on cash before delivery basis", granted
the requested extension of the warranty period and stated that "we are
glad to note that you have quite a number of units pending with the
FSDC."
The trial court ruled that with said information, SEACOM dealt directly
with FSDC and offered its units at a lower price, leaving FSDC "no
choice but to accept the said offer of (SEACOM)".
In affirming the judgment of the of the trial court, the Court of Appeals
held that by virtue of the dealership agreement the competition in the
market as regards the sale of farm equipment shall be between JII, as
the dealer of SEACOM, and other companies, not as against SEACOM
itself, the Court stated:
However, SEACOM not satisfied with the
presence of its dealer JII in the market, joined the
competition even as against the latter, and thereby
changed the scenario of the competition thereby
rendering inutile the dealership agreement which
they entered into to the manifest prejudice of JII.
Hence the trial court trial court was correct when it
applied Art. 19 of the Civil Code in the case at bar
in that appellant SEACOM acted in bad faith when
it competed with its own dealer as regards the sale
of farm machineries, thereby depriving appellee JII
of the opportunity to gain a clear profit of
P85,000.00.
We find no cogent reason to overturn the factual finding of the two
courts that SEACOM joined the bidding for the sale of the farm
equipment after it was informed that JII was already promoting the
sales of said equipment to the FSDC. Moreover, the conclusion of the
trial court that the SEACOM offered FSDC a lower price than the price
offered by JII to FSDC is supported by the evidence: the price offered
by JII to FSDC is P27,167 per unit 12 but the prices at which SEACOM
sold to FSDC were at P22,867.00 for Model CT 83-2, P21,093.50 for
model CT 83-E, and P18,979.25 for model CT 534. The fact that
SEACOM may have offered to JII, in lieu of a requested 50% discount,
a discount effectively translating to 37% of the list price and actually
sold to FSDC at 35% less than the list price 13 does not detract from
the fact that by participating in the bidding of FSDC, it actually
competed with its own dealer who had earlier conducted
demonstrations and promoted its own products for the sale of the very
same equipment, Exh. "N" for the plaintiff confirms that both SEACOM
and Jamandre participated in the bidding. 14 However, the SEACOM
was awarded the contract directly from Manila. 15 The testimony of
Tirso Jamandre that JII was the sole representative of SEACOM in the
local demonstrations to convince the farmers and cooperative officers
to accept the Mitsubishi brand of equipment in preference to other
brands, was unrebutted by SEACOM.
Clearly, the bad faith of SEACOM was established. By appointing as a
dealer of its agricultural equipment, SEACOM recognized the role and
undertaking of JII to promote and sell said equipment. Under the
dealership agreement, JII was to act as a middleman to sell
SEACOM's products, in its area of operations, i.e. Iloilo and Capiz
provinces, to the exclusion of other places, 16 to send its men to
Manila for training on repair, servicing and installation of the items to
be handled by it, and to comply with other personnel and vehicle
requirements intended for the benefit of the dealership. 17 After being
informed of the demonstrations JII had conducted to promote the sales
of SEACOM equipment, including the operations at JII's expense
conducted for five months, and the approval of its facilities (service and
parts) by FSDC, 18 SEACOM participated in the bidding for the said
equipment at a lower price, placing itself in direct competition with its
own dealer. The actuations of SEACOM are tainted by bad faith.
Even if the dealership agreement was amended to make it on a non-
exclusive basis, 19 SEACOM may not exercise its right unjustly or in a
manner that is not in keeping with honesty or good faith; otherwise it
opens itself to liability under the abuse of right rule embodied in Article
19 of the Civil Code above-quoted. This provision, together with the
succeeding article on human relation, was intended to embody certain
basic principles "that are to be observed for the rightful relationship
between human being. and for the stability of the social order." 20
What is sought to be written into the law is the pervading principle of
equity and justice above strict legalism. 21
We accordingly resolve to affirm the award for unrealized profits. The
Court of Appeals noted that the trial court failed to specify to which the
two appellees the award for moral and exemplary damages in granted.
However, in view of the fact that moral damages are not as a general
rule granted to a corporation, and that Tirso Jamandre was the one
who testified on his feeling very aggrieved and on his mental anguish
and sleepless nights thinking of how SEACOM "dealt with us behind
(our) backs", 22 the award should go to defendant Jamandre,
President of JII.
WHEREFORE. the judgment appealed from is AFFIRMED with the
modification that the award of P2,000.00 in moral and exemplary
damages shall be paid to defendant Tirso Jamandre.
Costs against appellant.
SO ORDERED.
CLARISSA U. MATA, doing business under the firm name
BESSANG PASS SECURITY AGENCY, petitioner,
vs.
ALEXANDER M. AGRAVANTE, EDDIE E. SANTILLAN, PATRICIO
A. ARMODIA, ALEJANDRO A. ALMADEN and HERMENEGILDO G.
SALDO, respondents.
DECISION
NACHURA, J.:
Before us is a petition for review on certiorari assailing the decision1 of
the Court of Appeals (CA) which dismissed petitioner's complaint for
damages filed against the respondents.
The antecedent facts are as follows:
Respondents Eddie E. Santillan, Patricio A. Armodia, Alejandro A.
Almaden and Hermenegildo G. Saldo were former security guards of
the Bessang Pass Security Agency, owned by herein petitioner
Clarissa Mata.
On October 27, 1993, the respondents, assisted by their counsel, Atty.
Alexander Agravante, filed a complaint with the National Labor
Relations Commission (NLRC) in Cebu City for non-payment of
salaries/wages and other benefits. 2 Subsequently, they filed an
affidavit-complaint with the Philippine National Police (PNP) in Cramp
Crame, Quezon City requesting an investigation of the Bessang Pass
Security Agency and cancellation of its license to operate as security
agency for violation of labor laws. Copies of this affidavit-complaint
were likewise sent to the following offices: (1) Office of the President,
(2) Office of the Secretary of Public Works and Highways, (3) Office of
the PNP Director General, (4) PNP Chief Superintendent Warlito
Capitan, (5) Office of the DILG Secretary, (6) Ombudsman Conrado
Vasquez and (7) Office of the Vice-President.
On January 6, 1994, petitioner instituted an action for damages against
the respondents averring that respondents filed unfounded, baseless
complaints before the NLRC for alleged violation of the labor laws and
with the PNP for cancellation of its license to operate. She further
alleged that by furnishing the government offices copies of these
complaints, especially the Department of Public Works and Highways
which was its biggest client, the agency's reputation was besmirched,
resulting in the loss of contracts/projects and income in the amount of
at least P5,000,000.00. Petitioner then declared that respondents'
deliberate and concerted campaign of hate and vilification against the
Bessang Pass Security Agency violated the provisions of Articles 19,
20, and 21 of the Civil Code, and thus, prayed that the respondents be
held jointly and severally liable to pay her the sum of P1,000,000.00 as
moral damages, attorney's fees in the amount of P200,000.00 and
other reliefs.
On August 4, 1999, the trial court rendered judgment, the dispositive
portion of which reads, as follows:
WHEREFORE, premises considered, judgment is hereby
rendered in favor of plaintiff and against defendants ordering
the latter to pay plaintiff the sum of ONE MILLION
(P1,000,000.00) PESOS as moral damages. 3
On the basis of the evidence adduced by the petitioner ex parte, the
trial court found preponderant evidence enough to justify petitioner's
cause of action. It gave credence to the petitioner's contentions that
the respondents had no other motive in sending the letter to the seven
(7) government offices except to unduly prejudice her good name and
reputation. The trial court, however, did not award the sum of
P5,000,000.00 as petitioner's estimated loss of income for being
speculative.
On appeal, the CA reversed and set aside the trial court's decision. It
dismissed the complaint for lack of merit.
Hence, this petition anchored on the following grounds:
WITH ALL DUE RESPECT, THE HONORABLE COURT OF
APPEALS COMMITTED A SERIOUS REVERSIBLE
ERROR, AMOUNTING TO GRAVE ABUSE OF
DISCRETION WHEN IT REVERSED AND SET ASIDE THE
DECISION OF THE REGIONAL TRIAL COURT, BRANCH
89 IN QUEZON CITY AND FURTHER CONCLUDED THAT
RESPONDENTS' ACT OF FURNISHING COPIES OF
THEIR LETTER-COMPLAINT NOT ONLY TO SEVEN (7)
NATIONAL AGENCIES BUT ALSO TO PETITIONER'S
BIGGEST CLIENT, WAS NOT TAINTED WITH BAD FAITH
AND WITH THE SOLE MOTIVE TO MALIGN THE GOOD
NAME AND REPUTATION OF PETITIONER.
WITH ALL DUE RESPECT, THE HONORABLE COURT OF
APPEALS COMMITTED SERIOUS ERROR IN THE
APPRECIATION OF FACTS AND APPLICATION OF LAWS,
WHICH IF NOT RECTIFIED, WOULD CAUSE
IRREPARABLE INJURY AND DAMAGE TO HEREIN
PETITIONER.
WITH ALL DUE RESPECT, THE HONORABLE COURT OF
APPEALS COMMITTED A SERIOUS REVERSIBLE
ERROR, AMOUNTING TO GRAVE ABUSE OF
DISCRETION, WHEN IT REVERSED AND SET ASIDE THE
DECISION OF THE REGIONAL TRIAL COURT, BRANCH
89 IN QUEZON CITY, NOTWITHSTANDING
RESPONDENTS HAVING BEEN DECLARED IN
4
DEFAULT.
Petitioner contends that the respondents were so driven by
unrestrained hatred and revenge that they not only succeeded in
disseminating the letter-complaint to the 7 government offices but to
the DPWH, her biggest client, with the intention to destroy her
reputation and, more importantly, her business. She posits that this
would mean a loss of employment for numerous employees throughout
the country who solely depend on the security agency for their
existence, and that respondents obviously failed to see this fact. She
claims that the respondents have abused their rights, to her prejudice,
and that of the security agency which has tried very hard to protect its
name and hard-earned reputation. Petitioner then concludes that the
respondents have violated Articles 19 and 21 of the Civil Code and
should be held liable for damages.5
We are not impressed. We are more in accord with the findings and
conclusions of the respondent court that petitioner is not entitled to any
award of damages. We agree with the respondent court's explanation,
viz.:
In filing the letter-complaint (Exhibit "D") with the Philippine
National Police and furnishing copies thereof to seven (7)
other executive offices of the national government, the
defendants-appellants may not be said to be motivated
simply by the desire to "unduly prejudice the good name and
reputation" of plaintiff-appellee. Such act was consistent with
and a rational consequence of seeking justice through legal
means for the alleged abuses defendants-appellants
suffered in the course of their employment with plaintiff-
appellee, which started with the case for illegal dismissal and
non-payment of backwages and benefits earlier filed with the
NLRC Regional Arbitration Branch in Cebu City. In
exhausting the legal avenues to air their legitimate
grievances, the paramount and overriding concern of the
defendants-appellants - who had already suffered from
retaliatory acts of their employer when they manifested their
desire to take formal action on the violations of labor laws
committed by employer - is to secure government
intervention or action to correct or punish their employer,
plaintiff-appellee, in accordance with the provisions of
existing laws or rules and regulations which may be
applicable to their situation. And in this process, the
intervention of the Philippine National Police was sought in
view of its mandated role of administrative supervision over
security agencies like plaintiff-appellee.
Section 8 of Republic Act No. 5487, otherwise known as the
"Private Security Agency Law," empowered the Chief of the
former Philippine Constabulary (PC) at any time "to suspend
or cancel the licenses of private watchman or security guard
agency found violating any of the provisions of this Act or of
the rules and regulations promulgated by the Chief of
Constabulary pursuant thereto." With the enactment of
Republic Act No. 6975 ("Department of the Interior and Local
Government Act of 1990"), the PC-INP was abolished and in
its place, a new police force was established, the Philippine
National Police (PNP). Among the administrative support
units of the PNP under the new law is the Civil Security Unit
which shall provide administrative services and general
supervision over the organization, business operation and
activities of all organized private detectives, watchmen,
security guard agencies and company guard houses. It was
thus but logical for defendants-appellants, as advised by
their counsel, to also communicate their grievances against
their employer security guard agency with the PNP. The act
 of furnishing copies to seven (7) other executive offices,
including that of the Office of the President, was merely to
inform said offices of the fact of filing of such complaint, as is
usually done by individual complainants seeking official
government action to address their problems or grievances.
Their pending case with the NLRC would not preclude them
from seeking assistance from the PNP as said agency is the
national body that exercises general supervision over all
security guard agencies in the country, the defendants-
appellants were of the honest belief that the violation of labor
laws committed by their employer will elicit proper action
from said body, providing them with a relief (cancellation of
license) distinct from those reliefs sought by them from the
NLRC (payment of backwages and benefits). Certainly,
defendants-appellants had good reason to believe that
bringing the matter to PNP is justified as no private security
agency found to be violating labor laws should remain in
good standing with or [be] tolerated by the PNP. Despite the
pendency of the NLRC case, such request for investigation
of plaintiff-appellee could not in any way be tainted with
malice and bad faith where the same was made by the very
individuals who suffered from the illegal labor practices of
plaintiff-appellee. Moreover, no liability could arise from
defendants-appellants' act of filing of the labor case with the
NLRC which plaintiff-appellee claimed to have resulted in the
agency's not being able to secure contracts because of such
pending labor case, defendants-appellants merely exercised
a right granted to them by our labor laws.6
It has been held that Article 19, 7 known to contain what is commonly
referred to as the principle of abuse of rights, is not a panacea for all
human hurts and social grievances. The object of this article is to set
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: act with justice, give everyone his due, and
observe honesty and good faith. Its antithesis is any act evincing bad
faith or intent to injure. 8 Article 21 refers to acts contra bonos mores
and has the following elements: (1) an act which is legal; (2) but which
is contrary to morals, good custom, public order or public policy; and
(3) is done with intent to injure. The common element under Articles 19
and 21 is that the act complained of must be intentional, 9 and attended
with malice or bad faith. There is no hard and fast rule which can be
applied to determine whether or not the principle of abuse of rights may
be invoked. The question of whether or not this principle has been
violated, resulting in damages under Articles 20 and 21, 10 or other
applicable provision of law, depends on the circumstances of each
case.11 In the case before us, as correctly pointed out by the CA, the
circumstances do not warrant an award of damages. Thus, the award
of P1,000,000.00 as moral damages is quite preposterous. We agree
with the appellate court that in the action of the respondents, there was
no malicious intent to injure petitioner's good name and reputation. The
respondents merely wanted to call the attention of responsible
government agencies in order to secure appropriate action upon an
erring private security agency and obtain redress for their grievances.
So, we reiterate the basic postulate that in the absence of proof that
there was malice or bad faith on the part of the respondents, no
damages can be awarded.
WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals is AFFIRMED.
SO ORDERED.
ARCO PULP AND PAPER CO., INC. and CANDIDA A. SANTOS,
Petitioners,
vs.
DAN T. LIM, doing business under the name and style of QUALITY
PAPERS & PLASTIC PRODUCTS ENTERPRISES, Respondent.
DECISION
LEONEN, J.:
Novation must be stated in clear and unequivocal terms to extinguish
an obligation. It cannot be presumed and may be implied only if the old
and new contracts are incompatible on every point.
Before us is a petition for review on certiorari1 assailing the Court of
Appeals’ decision2 in CA-G.R. CV No. 95709, which stemmed from a
complaint3 filed in the Regional Trial Court of Valenzuela City, Branch
171, for collection of sum of money.
The facts are as follows:
Dan T. Lim works in the business of supplying scrap papers, cartons,
and other raw materials, under the name Quality Paper and Plastic
Products, Enterprises, to factories engaged in the paper mill
business.4 From February 2007 to March 2007, he delivered scrap
papers worth 7,220,968.31 to Arco Pulp and Paper Company, Inc.
(Arco Pulp and Paper) through its Chief Executive Officer and
President, Candida A. Santos.5 The parties allegedly agreed that Arco
Pulp and Paper would either pay Dan T. Lim the value of the raw
materials or deliver to him their finished products of equivalent value.6
Dan T. Lim alleged that when he delivered the raw materials, Arco Pulp
and Paper issued a post-dated check dated April 18, 20077 in the
amount of 1,487,766.68 as partial payment, with the assurance that the
check would not bounce.8 When he deposited the check on April 18,
2007, it was dishonored for being drawn against a closed account.9
On the same day, Arco Pulp and Paper and a certain Eric Sy executed
a memorandum of agreement10 where Arco Pulp and Paper bound
themselves to deliver their finished products to Megapack Container
Corporation, owned by Eric Sy, for his account. According to the
memorandum, the raw materials would be supplied by Dan T. Lim,
through his company, Quality Paper and Plastic Products. The
memorandum of agreement reads as follows:
Per meeting held at ARCO, April 18, 2007, it has been mutually agreed
between Mrs. Candida A. Santos and Mr. Eric Sy that ARCO will
deliver 600 tons Test Liner 150/175 GSM, full width 76 inches at the
price of ₱18.50 per kg. to Megapack Container for Mr. Eric Sy’s
account. Schedule of deliveries are as follows:
....
It has been agreed further that the Local OCC materials to be used for
the production of the above Test Liners will be supplied by Quality
Paper & Plastic Products Ent., total of 600 Metric Tons at ₱6.50 per kg.
(price subject to change per advance notice). Quantity of Local OCC
delivery will be based on the quantity of Test Liner delivered to
Megapack Container Corp. based on the above production
schedule.11
On May 5, 2007, Dan T.Lim sent a letter12 to Arco Pulp and Paper
demanding payment of the amount of 7,220,968.31, but no payment
was made to him.13
Dan T. Lim filed a complaint14 for collection of sum of money with
prayer for attachment with the Regional Trial Court, Branch 171,
Valenzuela City, on May 28, 2007. Arco Pulp and Paper filed its
answer15 but failed to have its representatives attend the pre-trial
hearing. Hence, the trial court allowed Dan T. Lim to present his
evidence ex parte.16
On September 19, 2008, the trial court rendered a judgment in favor of
Arco Pulp and Paper and dismissed the complaint, holding that when
Arco Pulp and Paper and Eric Sy entered into the memorandum of
agreement, novation took place, which extinguished Arco Pulp and
Paper’s obligation to Dan T. Lim.17
Dan T. Lim appealed18 the judgment with the Court of Appeals.
According to him, novation did not take place since the memorandum
of agreement between Arco Pulp and Paper and Eric Sy was an
exclusive and private agreement between them. He argued that if his
name was mentioned in the contract, it was only for supplying the
parties their required scrap papers, where his conformity through a
separate contract was indispensable.19
On January 11, 2013, the Court of Appeals20 rendered a decision21
reversing and setting aside the judgment dated September 19, 2008
and ordering Arco Pulp and Paper to jointly and severally pay Dan T.
Lim the amount of ₱7,220,968.31 with interest at 12% per annum from
the time of demand; ₱50,000.00 moral damages; ₱50,000.00
exemplary damages; and ₱50,000.00 attorney’s fees.22
The appellate court ruled that the facts and circumstances in this case
clearly showed the existence of an alternative obligation.23 It also
ruled that Dan T. Lim was entitled to damages and attorney’s fees due
to the bad faith exhibited by Arco Pulp and Paper in not honoring its
undertaking.24
Its motion for reconsideration25 having been denied,26 Arco Pulp and
Paper and its President and Chief Executive Officer, Candida A.
Santos, bring this petition for review on certiorari.
On one hand, petitioners argue that the execution of the memorandum
of agreement constituted a novation of the original obligation since Eric
Sy became the new debtor of respondent. They also argue that there is
no legal basis to hold petitioner Candida A. Santos personally liable for
the transaction that petitioner corporation entered into with respondent.
The Court of Appeals, they allege, also erred in awarding moral and
exemplary damages and attorney’s fees to respondent who did not
show proof that he was entitled to damages.27
Respondent, on the other hand, argues that the Court of Appeals was
correct in ruling that there was no proper novation in this case. He
argues that the Court of Appeals was correct in ordering the payment
of 7,220,968.31 with damages since the debt of petitioners remains
unpaid.28 He also argues that the Court of Appeals was correct in
holding petitioners solidarily liable since petitioner Candida A. Santos
was "the prime mover for such outstanding corporate liability."29 In
their reply, petitioners reiterate that novation took place since there
was nothing in the memorandum of agreement showing that the
obligation was alternative. They also argue that when respondent
allowed them to deliver the finished products to Eric Sy, the original
obligation was novated.30
A rejoinder was submitted by respondent, but it was noted without
action in view of A.M. No. 99-2-04-SC dated November 21, 2000.31
The issues to be resolved by this court are as follows:
1. Whether the obligation between the parties was
extinguished by novation
2. Whether Candida A. Santos was solidarily liable with Arco
Pulp and Paper Co., Inc.
3. Whether moral damages, exemplary damages, and
attorney’s fees can be awarded
The petition is denied.
The obligation between the
parties was an alternative
obligation
The rule on alternative obligations is governed by Article 1199 of the
Civil Code, which states:
Article 1199. A person alternatively bound by different prestations shall
completely perform one of them.
The creditor cannot be compelled to receive part of one and part of the
other undertaking.
"In an alternative obligation, there is more than one object, and the
fulfillment of one is sufficient, determined by the choice of the debtor
who generally has the right of election."32 The right of election is
extinguished when the party who may exercise that option categorically
and unequivocally makes his or her choice known.33
The choice of the debtor must also be communicated to the creditor
who must receive notice of it since: The object of this notice is to give
the creditor . . . opportunity to express his consent, or to impugn the
election made by the debtor, and only after said notice shall the
election take legal effect when consented by the creditor, or if
impugned by the latter, when declared proper by a competent court.34
According to the factual findings of the trial court and the appellate
court, the original contract between the parties was for respondent to
deliver scrap papers worth ₱7,220,968.31 to petitioner Arco Pulp and
Paper. The payment for this delivery became petitioner Arco Pulp and
Paper’s obligation. By agreement, petitioner Arco Pulp and Paper, as
the debtor, had the option to either (1) pay the price or(2) deliver the
finished products of equivalent value to respondent.35
The appellate court, therefore, correctly identified the obligation
between the parties as an alternative obligation, whereby petitioner
Arco Pulp and Paper, after receiving the raw materials from
respondent, would either pay him the price of the raw materials or, in
the alternative, deliver to him the finished products of equivalent value.
When petitioner Arco Pulp and Paper tendered a check to respondent
in partial payment for the scrap papers, they exercised their option to
pay the price. Respondent’s receipt of the check and his subsequent
act of depositing it constituted his notice of petitioner Arco Pulp and
Paper’s option to pay.
This choice was also shown by the terms of the memorandum of
agreement, which was executed on the same day. The memorandum
declared in clear terms that the delivery of petitioner Arco Pulp and
Paper’s finished products would be to a third person, thereby
extinguishing the option to deliver the finished products of equivalent
value to respondent.
The memorandum of
agreement did not constitute
a novation of the original
contract
The trial court erroneously ruled that the execution of the memorandum
of agreement constituted a novation of the contract between the
parties. When petitioner Arco Pulp and Paper opted instead to deliver
the finished products to a third person, it did not novate the original
obligation between the parties.
The rules on novation are outlined in the Civil Code, thus:
Article 1291. Obligations may be modified by:
(1) Changing their object or principal conditions;
(2) Substituting the person of the debtor;
(3) Subrogating a third person in the rights of the creditor.
(1203)
Article 1292. In order that an obligation may be extinguished by
another which substitute the same, it is imperative that it be so
declared in unequivocal terms, or that the old and the new obligations
be on every point incompatible with each other. (1204)
Article 1293. Novation which consists in substituting a new debtor in
the place of the original one, may be made even without the knowledge
or against the will of the latter, but not without the consent of the
creditor. Payment by the new debtor gives him the rights mentioned in
Articles 1236 and 1237. (1205a)
Novation extinguishes an obligation between two parties when there is
a substitution of objects or debtors or when there is subrogation of the
creditor. It occurs only when the new contract declares so "in
unequivocal terms" or that "the old and the new obligations be on every
point incompatible with each other."36
Novation was extensively discussed by this court in Garcia v.
Llamas:37
Novation is a mode of extinguishing an obligation by changing its
objects or principal obligations, by substituting a new debtor in place of
the old one, or by subrogating a third person to the rights of the
creditor. Article 1293 of the Civil Code defines novation as follows:
"Art. 1293. Novation which consists in substituting a new debtor in the
place of the original one, may be made even without the knowledge or
against the will of the latter, but not without the consent of the creditor.
Payment by the new debtor gives him rights mentioned in articles 1236
and 1237."
In general, there are two modes of substituting the person of the
debtor: (1) expromision and (2) delegacion. In expromision, the
initiative for the change does not come from — and may even be made
without the knowledge of — the debtor, since it consists of a third
person’s assumption of the obligation. As such, it logically requires the
consent of the third person and the creditor. In delegacion, the debtor
offers, and the creditor accepts, a third person who consents to the
substitution and assumes the obligation; thus, the consent of these
three persons are necessary. Both modes of substitution by the debtor
require the consent of the creditor.
Novation may also be extinctive or modificatory. It is extinctive when an
old obligation is terminated by the creation of a new one that takes the
place of the former. It is merely modificatory when the old obligation
subsists to the extent that it remains compatible with the amendatory
agreement. Whether extinctive or modificatory, novation is made either
by changing the object or the principal conditions, referred to as
objective or real novation; or by substituting the person of the debtor or
subrogating a third person to the rights of the creditor, an act known as
subjective or personal novation. For novation to take place, the
following requisites must concur:
1) There must be a previous valid obligation.
2) The parties concerned must agree to a new contract.
3) The old contract must be extinguished.
4) There must be a valid new contract.
Novation may also be express or implied. It is express when the new
obligation declares in unequivocal terms that the old obligation is
extinguished. It is implied when the new obligation is incompatible with
the old one on every point. The test of incompatibility is whether the
two obligations can stand together, each one with its own independent
existence.38 (Emphasis supplied)
Because novation requires that it be clear and unequivocal, it is never
presumed, thus:
In the civil law setting, novatio is literally construed as to make new. So
it is deeply rooted in the Roman Law jurisprudence, the principle —
novatio non praesumitur —that novation is never presumed.At bottom,
for novation tobe a jural reality, its animus must be ever present,
debitum pro debito — basically extinguishing the old obligation for the
new one.39 (Emphasis supplied) There is nothing in the memorandum
of agreement that states that with its execution, the obligation of
petitioner Arco Pulp and Paper to respondent would be extinguished. It
also does not state that Eric Sy somehow substituted petitioner Arco
Pulp and Paper as respondent’s debtor. It merely shows that petitioner
Arco Pulp and Paper opted to deliver the finished products to a third
person instead.
The consent of the creditor must also be secured for the novation to be
valid:
Novation must be expressly consented to. Moreover, the conflicting
intention and acts of the parties underscore the absence of any
express disclosure or circumstances with which to deduce a clear and
unequivocal intent by the parties to novate the old agreement.40
(Emphasis supplied)
In this case, respondent was not privy to the memorandum of
agreement, thus, his conformity to the contract need not be secured.
This is clear from the first line of the memorandum, which states:
Per meeting held at ARCO, April 18, 2007, it has been mutually agreed
between Mrs. Candida A. Santos and Mr. Eric Sy. . . .41
If the memorandum of agreement was intended to novate the original
agreement between the parties, respondent must have first agreed to
the substitution of Eric Sy as his new debtor. The memorandum of
agreement must also state in clear and unequivocal terms that it has
replaced the original obligation of petitioner Arco Pulp and Paper to
respondent. Neither of these circumstances is present in this case.
Petitioner Arco Pulp and Paper’s act of tendering partial payment to
respondent also conflicts with their alleged intent to pass on their
obligation to Eric Sy. When respondent sent his letter of demand to
petitioner Arco Pulp and Paper, and not to Eric Sy, it showed that the
former neither acknowledged nor consented to the latter as his new
debtor. These acts, when taken together, clearly show that novation
did not take place. Since there was no novation, petitioner Arco Pulp
and Paper’s obligation to respondent remains valid and existing.
Petitioner Arco Pulp and Paper, therefore, must still pay respondent
the full amount of ₱7,220,968.31.
Petitioners are liable for
damages
Under Article 2220 of the Civil Code, moral damages may be awarded
in case of breach of contract where the breach is due to fraud or bad
faith:
Art. 2220. Willfull 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.
(Emphasis supplied)
Moral damages are not awarded as a matter of right but only after the
party claiming it proved that the breach was due to fraud or bad faith.
As this court stated:
Moral damages are not recoverable simply because a contract has
been breached. They are recoverable only if the party from whom it is
claimed acted fraudulently or in bad faith or in wanton disregard of his
contractual obligations. The breach must be wanton, reckless,
malicious or in bad faith, and oppressive or abusive.42
Further, the following requisites must be proven for the recovery of
moral damages:
An award of moral damages would require certain conditions to be
met, to wit: (1)first, there must be an injury, whether physical, mental or
psychological, clearly sustained by the claimant; (2) second, there
must be culpable act or omission factually established; (3) third, the
wrongful act or omission of the defendant is the proximate cause of the
injury sustained by the claimant; and (4) fourth, the award of damages
is predicated on any of the cases stated in Article 2219 of the Civil
Code.43
Here, the injury suffered by respondent is the loss of ₱7,220,968.31
from his business. This has remained unpaid since 2007. This injury
undoubtedly was caused by petitioner Arco Pulp and Paper’s act of
refusing to pay its obligations.
When the obligation became due and demandable, petitioner Arco
Pulp and Paper not only issued an unfunded check but also entered
into a contract with a third person in an effort to evade its liability. This
proves the third requirement.
As to the fourth requisite, Article 2219 of the Civil Code provides that
moral damages may be awarded in the following instances:
Article 2219. Moral damages may be recovered in the following and
analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28,
29, 30, 32, 34, and 35.
Breaches of contract done in bad faith, however, are not specified
within this enumeration. When a party breaches a contract, he or she
goes against Article 19 of the Civil Code, which states: Article 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.
Persons who have the right to enter into contractual relations must
exercise that right with honesty and good faith. Failure to do so results
in an abuse of that right, which may become the basis of an action for
damages. Article 19, however, cannot be its sole basis:
Article 19 is the general rule which governs the conduct of human
relations. By itself, it is not the basis of an actionable tort. Article 19
describes the degree of care required so that an actionable tort may
arise when it is alleged together with Article 20 or Article 21.44
Article 20 and 21 of the Civil Code are as follows:
Article 20. Every person who, contrary to law, wilfully or negligently
causes damage to another, shall indemnify the latter for the same.
Article 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.
To be actionable, Article 20 requires a violation of law, while Article 21
only concerns with lawful acts that are contrary to morals, good
customs, and public policy:
Article 20 concerns violations of existing law as basis for an injury. It
allows recovery should the act have been willful or negligent. Willful
may refer to the intention to do the act and the desire to achieve the
outcome which is considered by the plaintiff in tort action as injurious.
Negligence may refer to a situation where the act was consciously
done but without intending the result which the plaintiff considers as
injurious.
Article 21, on the other hand, concerns injuries that may be caused by
acts which are not necessarily proscribed by law. This article requires
that the act be willful, that is, that there was an intention to do the act
and a desire to achieve the outcome. In cases under Article 21, the
legal issues revolve around whether such outcome should be
considered a legal injury on the part of the plaintiff or whether the
commission of the act was done in violation of the standards of care
required in Article 19.45
When parties act in bad faith and do not faithfully comply with their
obligations under contract, they run the risk of violating Article 1159 of
the Civil Code:
Article 1159. Obligations arising from contracts have the force of law
between the contracting parties and should be complied with in good
faith.
Article 2219, therefore, is not an exhaustive list of the instances where
moral damages may be recovered since it only specifies, among
others, Article 21. When a party reneges on his or her obligations
arising from contracts in bad faith, the act is not only contrary to
morals, good customs, and public policy; it is also a violation of Article
1159. Breaches of contract become the basis of moral damages, not
only under Article 2220, but also under Articles 19 and 20 in relation to
Article 1159.
Moral damages, however, are not recoverable on the mere breach of
the contract. Article 2220 requires that the breach be done fraudulently
or in bad faith. In Adriano v. Lasala:46
To recover moral damages in an action for breach of contract, the
breach must be palpably wanton, reckless and malicious, in bad faith,
oppressive, or abusive. Hence, the person claiming bad faith must
prove its existence by clear and convincing evidence for the law always
presumes good faith.
Bad faith does not simply connote bad judgment or negligence. It
imports a dishonest purpose or some moral obliquity and conscious
doing of a wrong, a breach of known duty through some motive or
interest or ill will that partakes of the nature of fraud. It is, therefore, a
question of intention, which can be inferred from one’s conduct and/or
contemporaneous statements.47 (Emphasis supplied)
Since a finding of bad faith is generally premised on the intent of the
doer, it requires an examination of the circumstances in each case.
When petitioner Arco Pulp and Paper issued a check in partial
payment of its obligation to respondent, it was presumably with the
knowledge that it was being drawn against a closed account. Worse, it
attempted to shift their obligations to a third person without the consent
of respondent.
Petitioner Arco Pulp and Paper’s actions clearly show "a dishonest
purpose or some moral obliquity and conscious doing of a wrong, a
breach of known duty through some motive or interest or ill will that
partakes of the nature of fraud."48 Moral damages may, therefore, be
awarded.
Exemplary damages may also be awarded. Under the Civil Code,
exemplary damages are due in the following circumstances:
Article 2232. In contracts and quasi-contracts, the court may award
exemplary damages if the defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner.
Article 2233. Exemplary damages cannot be recovered as a matter of
right; the court will decide whether or not they should be adjudicated.
Article 2234. While the amount of the exemplary damages need not be
proven, the plaintiff must show that he is entitled to moral, temperate or
compensatory damages before the court may consider the question of
whether or not exemplary damages should be awarded.
In Tankeh v. Development Bank of the Philippines,49 we stated that:
The purpose of exemplary damages is to serve as a deterrent to future
and subsequent parties from the commission of a similar offense. The
case of People v. Ranteciting People v. Dalisay held that:
Also known as ‘punitive’ or ‘vindictive’ damages, exemplary or
corrective damages are intended to serve as a deterrent to serious
wrong doings, and as a vindication of undue sufferings and wanton
invasion of the rights of an injured or a punishment for those guilty of
outrageous conduct. These terms are generally, but not always, used
interchangeably. In common law, there is preference in the use of
exemplary damages when the award is to account for injury to feelings
and for the sense of indignity and humiliation suffered by a person as a
result of an injury that has been maliciously and wantonly inflicted, the
theory being that there should be compensation for the hurt caused by
the highly reprehensible conduct of the defendant—associated with
such circumstances as willfulness, wantonness, malice, gross
negligence or recklessness, oppression, insult or fraud or gross fraud
—that intensifies the injury. The terms punitive or vindictive damages
are often used to refer to those species of damages that may be
awarded against a person to punish him for his outrageous conduct. In
either case, these damages are intended in good measure to deter the
wrongdoer and others like him from similar conduct in the future.50
(Emphasis supplied; citations omitted)
The requisites for the award of exemplary damages are as follows:
(1) they may be imposed by way of example in addition to
compensatory damages, and only after the claimant's right to
them has been established;
(2) that they cannot be recovered as a matter of right, their
determination depending upon the amount of compensatory
damages that may be awarded to the claimant; and
(3) the act must be accompanied by bad faith or done in a
wanton, fraudulent, oppressive or malevolent manner.51
Business owners must always be forthright in their dealings. They
cannot be allowed to renege on their obligations, considering that
these obligations were freely entered into by them. Exemplary
damages may also be awarded in this case to serve as a deterrent to
those who use fraudulent means to evade their liabilities.
Since the award of exemplary damages is proper, attorney’s fees and
cost of the suit may also be recovered.
Article 2208 of the Civil Code states:
Article 2208. In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs, cannot be recovered,
except:
(1) When exemplary damages are awarded[.]
Petitioner Candida A. Santos
is solidarily liable with
petitioner corporation
Petitioners argue that the finding of solidary liability was erroneous
since no evidence was adduced to prove that the transaction was also
a personal undertaking of petitioner Santos. We disagree.
In Heirs of Fe Tan Uy v. International Exchange Bank,52 we stated
that:
Basic is the rule in corporation law that a corporation is a juridical entity
which is vested with a legal personality separate and distinct from
those acting for and in its behalf and, in general, from the people
comprising it. Following this principle, obligations incurred by the
corporation, acting through its directors, officers and employees, are its
sole liabilities. A director, officer or employee of a corporation is
generally not held personally liable for obligations incurred by the
corporation. Nevertheless, this legal fiction may be disregarded if it is
used as a means to perpetrate fraud or an illegal act, or as a vehicle
for the evasion of an existing obligation, the circumvention of statutes,
or to confuse legitimate issues.
....
Before a director or officer of a corporation can be held personally
liable for corporate obligations, however, the following requisites must
concur: (1) the complainant must allege in the complaint that the
director or officer assented to patently unlawful acts of the corporation,
or that the officer was guilty of gross negligence or bad faith; and (2)
the complainant must clearly and convincingly prove such unlawful
acts, negligence or bad faith.
While it is true that the determination of the existence of any of the
circumstances that would warrant the piercing of the veil of corporate
fiction is a question of fact which cannot be the subject of a petition for
review on certiorari under Rule 45, this Court can take cognizance of
factual issues if the findings of the lower court are not supported by the
evidence on record or are based on a misapprehension of facts.53
(Emphasis supplied)
As a general rule, directors, officers, or employees of a corporation
cannot be held personally liable for obligations incurred by the
corporation. However, this veil of corporate fiction may be pierced if
complainant is able to prove, as in this case, that (1) the officer is guilty
of negligence or bad faith, and (2) such negligence or bad faith was
clearly and convincingly proven.
Here, petitioner Santos entered into a contract with respondent in her
capacity as the President and Chief Executive Officer of Arco Pulp and
Paper. She also issued the check in partial payment of petitioner
corporation’s obligations to respondent on behalf of petitioner Arco
Pulp and Paper. This is clear on the face of the check bearing the
account name, "Arco Pulp & Paper, Co., Inc."54 Any obligation arising
from these acts would not, ordinarily, be petitioner Santos’ personal
undertaking for which she would be solidarily liable with petitioner Arco
Pulp and Paper.
We find, however, that the corporate veil must be pierced. In Livesey v.
Binswanger Philippines:55
Piercing the veil of corporate fiction is an equitable doctrine developed
to address situations where the separate corporate personality of a
corporation is abused or used for wrongful purposes. Under the
doctrine, the corporate existence may be disregarded where the entity
is formed or used for non-legitimate purposes, such as to evade a just
and due obligation, or to justify a wrong, to shield or perpetrate fraud or
to carry out similar or inequitable considerations, other unjustifiable
aims or intentions, in which case, the fiction will be disregarded and the
individuals composing it and the two corporations will be treated as
identical.56 (Emphasis supplied)
According to the Court of Appeals, petitioner Santos was solidarily
liable with petitioner Arco Pulp and Paper, stating that:
In the present case, We find bad faith on the part of the [petitioners]
when they unjustifiably refused to honor their undertaking in favor of
the [respondent]. After the check in the amount of 1,487,766.68 issued
by [petitioner] Santos was dishonored for being drawn against a closed
account, [petitioner] corporation denied any privity with [respondent].
These acts prompted the [respondent] to avail of the remedies
provided by law in order to protect his rights.57
We agree with the Court of Appeals. Petitioner Santos cannot be
allowed to hide behind the corporate veil.1âwphi1 When petitioner Arco
Pulp and Paper’s obligation to respondent became due and
demandable, she not only issued an unfunded check but also
contracted with a third party in an effort to shift petitioner Arco Pulp and
Paper’s liability. She unjustifiably refused to honor petitioner
corporation’s obligations to respondent. These acts clearly amount to
bad faith. In this instance, the corporate veil may be pierced, and
petitioner Santos may be held solidarily liable with petitioner Arco Pulp
and Paper.
The rate of interest due on
the obligation must be
reduced in view of Nacar v.
Gallery Frames58
In view, however, of the promulgation by this court of the decision
dated August 13, 2013 in Nacar v. Gallery Frames,59 the rate of
interest due on the obligation must be modified from 12% per annum to
6% per annum from the time of demand.
Nacar effectively amended the guidelines stated in Eastern Shipping v.
Court of Appeals,60 and we have laid down the following guidelines
with regard to the rate of legal interest:
To recapitulate and for future guidance, the guidelines laid down in the
case of Eastern Shipping Linesare accordingly modified to embody
BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts,
quasi-contracts, delicts or quasi-delicts is breached, the contravenor
can be held liable for damages. The provisions under Title XVIII on
"Damages" of the Civil Code govern in determining the measure of
recoverable damages.
II. With regard particularly to an award of interest in the concept of
actual and compensatory damages, the rate of interest, as well as the
accrual thereof, is imposed, as follows:
 1. When the obligation is breached, and it consists in the
payment of a sum of money, i.e., a loan or forbearance of
money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall itself
earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 6%
per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of
Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance
of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the
court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages,
except when or until the demand can be established with
reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin
to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code), but when such
certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the
date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on the
amount finally adjudged.
3. When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest,
whether the case falls under paragraph 1 or paragraph 2,
above, shall be 6% per annum from such finality until its
satisfaction, this interim period being deemed to be by then
an equivalent to a forbearance of credit.
And, in addition to the above, judgments that have become final and
executory prior to July 1, 2013, shall not be disturbed and shall
continue to be implemented applying the rate of interest fixed
therein.61 (Emphasis supplied; citations omitted.)
According to these guidelines, the interest due on the obligation of
₱7,220,968.31 should now be at 6% per annum, computed from May
5, 2007, when respondent sent his letter of demand to petitioners. This
interest shall continue to be due from the finality of this decision until its
full satisfaction.
WHEREFORE, the petition is DENIED in part. The decision in CA-G.R.
CV No. 95709 is AFFIRMED.
Petitioners Arco Pulp & Paper Co., Inc. and Candida A. Santos are
hereby ordered solidarily to pay respondent Dan T. Lim the amount of
₱7,220,968.31 with interest of 6% per annum at the time of demand
until finality of judgment and its full satisfaction, with moral damages in
the amount of ₱50,000.00, exemplary damages in the amount of
₱50,000.00, and attorney's fees in the amount of ₱50,000.00.
SO ORDERED.
JENNIFER A. AGUSTIN-SE and ROHERMIA J. JAMSANI-
RODRIGUEZ, Petitioners,
vs.
OFFICE OF THE PRESIDENT, represented by Executive Secretary
PAQUITO N. OCHOA, JR., ORLANDO C. CASIMIRO, overall
Deputy Ombudsman, Office of the Ombudsman, and JOHN I.C.
TURALBA, Acting Deputy Special Prosecutor, Office of the
Special Prosecutor, Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review on certiorari1 to set aside the 29 November
2012 Decision2 and the 23 May 20133 Resolution of the Court of
Appeals upholding the 14 June 20114 Decision of the Office of the
President (OP) to dismiss the complaint of Jennifer A. Agustin-Se and
Rohermia J. Jamsani-Rodriguez (petitioners) against respondents
Orlando C. Casimiro (Casimiro) and John LC. Turalba (Turalba).
The Facts
Petitioners are Assistant Special Prosecutors III of the Office of the
Ombudsman, who have been assigned to prosecute cases against Lt.
Gen. (Ret.) Leopoldo S. Acot (Acot), Bgen. (Ret.) Ildelfonso N.
Dulinayan (Dulinayan) and several others before the Sandiganbayan
for alleged ghost deliveries of assorted supplies and materials to the
Philippine Air Force amounting to about Eighty Nine Million Pesos
(P89,000,000.00).
Sometime in early 1995, the Judge Advocate General’s Office of the
Armed Forces of the Philippines filed a complaint before the
Ombudsman against Acot, Dulinayan and several others which was
eventually docketed as OMB-AFP-CRIM-94-0218. In a Resolution
dated 12 April 1996,5 Ombudsman Investigators Rainier C. Almazan
(Almazan) and Rudifer G. Falcis II (Falcis) recommended the filing of
Informations against Acot, Dulinayan, and several others for violation
of Section 3(e) of the Anti-Graft and Corrupt Practices Act (Republic
Act No. 3019 [RA No. 3019]) and/or for Malversation through
Falsification. Casimiro was then the Director of the Criminal and
Administrative Investigation Division of the Office of the Ombudsman
and the immediate supervisor of Almazan and Falcis. Casimiro
concurred with and signed the 12 April 1996 Resolution and indorsed
the same to Bgen. (Ret.) Manuel B. Casaclang, then Casimiro’s
immediate superior.
In a Memorandum dated 10 July 1996,6 then Special Prosecution
Officer III Reynaldo L. Mendoza recommended the modification of the
12 April 1996 Resolution to charge Acot, Dulinayan and several others
only with the violation of Section 3(e) of RA No. 3019. In a
Memorandum dated 12 January 1998,7 Special Prosecutor Leonardo
Tamayo (Tamayo) recommended that the charges against Acot and
Dulinayan be dismissed for lack of evidence. Affirming the
recommendation of Tamayo, on 2 March 1998, Ombudsman Aniano A.
Desierto approved the 12 April 1996 Resolution with the modification to
dismiss the charges against Acot and Dulinayan.
In a Memorandum dated 29 April 2005,8 Nolasco B. Ducay and Melita
A. Cuasay, record officers of the Office of the Deputy Ombudsman for
the Military and Other Law Enforcement Officers (OMB-MOLEO),
brought to the attention of Casimiro (who was then already the Deputy
Ombudsman for MOLEO having been appointed on 16 December
1999) that the main folder containing the 12 April 1996 Resolution
could not be located despite the records having been returned to the
OMB-MOLEO on 6 March 1998. The discovery of the missing folder
was made when Col. Proceso I. Sabado and Ltc. Jose R. Gadin, who
were co-respondents of Acot and Dulinayan, applied for a clearance
with the Office of the Ombudsman. Due to the delay in the action on
the 12 April 1996 Resolution and inexplicable loss of the main folder,
Almazan and Falcis, in a Memorandum dated 7 July 2005,9 strongly
recommended a thorough review of the case. Casimiro forwarded the 7
July 2005 Memorandum to Ombudsman Simeon V. Marcelo who
directed the Office of Legal Affairs (OLA) to study the records and
submit a recommendation.
In a Memorandum dated 25 June 2007,10 the OLA noted that the 12
April 1996 Resolution had "no force and effect because it was never
promulgated." The OLA recommended, among others, the filing of
Informations against Acot, Dulinayan and several others. In a
Memorandum dated 23 February 2009, Assistant Special Prosecutor II
Terence S. Fernando of the Office of the Ombudsman Proper
recommended the approval of the OLA’s Memorandum. On 3 March
2009, acting pursuant to delegated authority, Casimiro approved both
the 25 June 2007 and 23 February 2009 Memoranda. The Informations
were thereafter filed against Acot, Dulinayan and several others with
the Sandiganbayan.
Acot and Dulinayan filed their respective Motions to Quash/Dismiss
and to Defer Arraignment mainly on the grounds that: (1) the right of
the State to prosecute had already prescribed; and (2) given the
amount of time the case was filed after the preliminary investigation
was started almost 15 years, their right to speedy disposition of case
had been violated.11 Dulinayan further alleged that a clearance had
been issued by the Office of the Ombudsman stating that there were
no pending cases against him. The Sandiganbayan required
petitioners, the assigned prosecutors for this case, to comment on the
motions filed by Acot and Dulinayan.
To determine the veracity of the statement of Dulinayan that he had
been issued a clearance stating that there are no pending cases
against him, petitioners confirmed with the Public Assistance Bureau of
the Office of the Ombudsman whether such clearance had been
issued.12 Moreover, to determine the events that transpired after the
modification of the 12 April 1996 Resolution, petitioners requested
certified machine copies of the docket entries with the Records
Division.13 While the issuance of the clearance was timely confirmed,
the certified machine copies of the docket entries were delayed; and
thus, petitioners were constrained to file several Motions for Extension
of Time to File Comment/Opposition to the Motions filed by Dulinayan
and Acot.
Based on their evaluation of the records, petitioners found that there
were procedural lapses in the handling of the cases, which they
attributed to Casimiro. Thus, instead of filing the required Comment
and/or Opposition with the Sandiganbayan, petitioners submitted a
Memorandum dated 5 January 2010,14 which contained their findings
against Casimiro. This Memorandum, while addressed to then Special
Prosecutor Dennis M. Villa-Ignacio, was submitted to Turalba, who was
the Officer-in-Charge, Director, Prosecution Bureau V. Turalba,
however, merely attached the said Memorandum as part of the records
and thereafter relieved petitioners from the cases, alluding that they
were remiss in their duty to file the necessary Comment and/or
Opposition with the Sandiganbayan.15 Turalba filed his own Comment
and/or Opposition which prompted petitioners to seek the approval of
Villa-Ignacio of their version of the draft Comment and/or Opposition,
which they eventually filed with the Sandiganbayan.16 However, the
Informations against Acot, Dulinayan and several others were
subsequently dismissed by the Sandiganbayan for violation of the
accused’s right to speedy disposition of the case.
In the meantime, Turalba furnished Casimiro with the 5 January 2010
Memorandum of petitioners. Casimiro thereafter required petitioners to
explain why they should not be held criminally and administratively
liable for insubordination, gross neglect and conduct prejudicial to the
best interest of the service.17 Instead of responding to Casimiro,
petitioners submitted a Memorandum dated 20 January 2010 to Villa-
Ignacio explaining their actions.18
Thereafter, on 4 February 2010, Casimiro filed a Complaint19 against
petitioners with the Internal Affairs Board (IAB) of the Office of the
Ombudsman for the crime of libel and Section 3(e) of RA No. 3019,
and administratively, for grave misconduct, conduct prejudicial to the
best interest of the service, gross neglect of duty, and insubordination.
Pending investigation, petitioners were placed under preventive
suspension.
On 3 November 2010, petitioners filed their own Complaint20 before
the OP, alleging that Casimiro and Turalba committed the following
administrative infractions: (1) grave misconduct, (2) gross negligence;
(3) oppressions, (4) conduct grossly prejudicial to the best interest of
the service; (5) violation of the rules on confidentiality; (6) violation of
Office Order No. 05-18, and Office Order No. 05-13; and (7) violation of
Section 35 of RA No. 6770,21 amounting to dishonesty and gross
misconduct.22
The Ruling of the Office of the President
In a Decision dated 14 June 2011,23 the OP dismissed the complaint
filed against Casimiro and Turalba. On the allegation that Casimiro
caused the delay in the investigation of the cases against Acot,
Dulinayan and several others, the OP ruled that:
This Office finds that the delay in the preliminary investigation of OMB-
AFP-CRM-94-0218 could not be validly attributed to respondent
Casimiro, whose participation in the disposition of the case is his initial
review as Director, submission of the Memorandum of 7 July 2005 and
the Information in accordance with the Resolution dated 12 April 1996,
as approved by Ombudsman Desierto, and his approval of the final
resolution of the case by delegated authority and of the various
Informations for violation of Section 3(e) of Republic Act No. 3019
against the accused, now docketed as SB-09-CRM-0184 to 0189 of
the Sandiganbayan.
This Office agrees with respondent Casimiro that as a mere Director of
a Bureau of the Office of the Deputy Ombudsman for Military and other
Law Enforcement Offices and who was thereafter appointed Deputy
Ombudsman only on December 16, 1999, he had every right to
presume regularity in the investigation of the case.
In fact, no less than the Office of Legal Affairs of the Office of the
Ombudsman, concluded that the Resolution dated 12 April 1996 had
never become final.
xxxx
No delay, therefore, may be attributed to respondent Casimiro who
came across the records of the case nine (9) years after he signed the
Resolution dated 12 April 1996 recommending the filing of informations
to his superior, if the Office of the Ombudsman itself never considered
that the Resolution dated 12 April 1996 as final and executory.24
On the issue of whether Casimiro and Turalba violated the rules on
confidentiality, the OP stated:
The Memorandum dated January 5, 2010 is not confidential or
classified information within the ambit of R.A. No. 6713 and R.A. No.
3019.
Therefore, Director Turalba could not be faulted for his act of furnishing
a copy thereof to respondent Casimiro who was the subject of the
investigation which the complainants sought to be conducted. On the
other hand, respondent Casimiro cannot be blamed for issuing the
Memorandum dated January 18, 2010 directing complainants to
explain their action, in view of the latter’s insinuation that it was by his
fault that the preliminary investigation of OMB-AFP-CRM-94-0218 had
been prolonged.25
On 2 November 2011, the OP denied the Motion for Reconsideration
filed by petitioners.26 On 28 November 2011, they filed a petition for
review on certiorari under Rule 43 of the Rules of Court with the Court
of Appeals to set aside the decision of the OP.
The Ruling of the Court of Appeals
In a Decision dated 29 November 2012, the Court of Appeals affirmed
the decision rendered by the OP. The Court of Appeals held:
As correctly raised by respondent Casimiro, the delay, if any, was
necessitated by the layers of preliminary investigation and multiple
reviews conducted by the concerned authorities in the Office of the
Ombudsman over a period of time under different leaderships starting
from Ombudsman Desierto, to Ombudsman Marcelo and thereafter, to
Ombudsman Gutierrez. It must be emphasized that for his part,
respondent Casimiro concurred with the findings of his
subordinates, Almazan and Falcis, who conducted the preliminary
investigation against Acot and company, and who issued the 12
April 1996 Resolution recommending the filing of appropriate
criminal Informations against the latter. This, in turn, was
recommended for approval by Casaclang, respondent Casimiro’s
immediate superior, to Ombudsman Desierto.
xxxx
From the foregoing factual antecedents, it becomes evident that upon
review of the 12 April 1996 Resolution, the charges against Acot and
Dulinayan were approved for dismissal by Ombudsman Desierto, and
not for the filing of Information as recommended and concurred with by
Almazan and Falcis, and respondent Casimiro, respectively. Thus,
respondent Casimiro cannot be faulted in the delay, if any, in filing the
appropriate criminal Informations against Acot and Dulinayan
considering that Ombudsman Desierto overruled the recommendations
and concurrence by the Investigators and Casimiro as to the finding of
probable cause against the said military officials. Simply put, there
was nothing to be filed before the Sandiganbayan against Acot
and Dulinayan after the approval and modification of the 12 April
1996 Resolution as the charges against them were approved for
dismissal.27
In a Resolution dated 23 May 2013,28 the Court of Appeals denied the
Motion for Reconsideration29 filed by petitioners on 21 December
2012. Thereafter, this petition for review on certiorari under Rule 45 of
the Rules of Court was timely filed on 19 June 2013.
The Issues
In this petition, petitioners seek a reversal of the decision of the OP
and the Court of Appeals, and raise the following issues for resolution:
A. WHETHER THE HONORABLE COURT OF APPEALS
CORRECTLY RULED THAT PETITIONERS’ RIGHT TO DUE
PROCESS WAS NOT VIOLATED BY RESPONDENT OFFICE OF
THE PRESIDENT, WHEN IT DID NOT CONSIDER THE EVIDENCE
PRESENTED BY THE PETITIONERS DURING THE
ADMINISTRATIVE ADJUDICATION;
B. WHETHER THE HONORABLE COURT OF APPEALS GRAVELY
ERRED WHEN IT RULED THAT THERE ARE NO SUBSTANTIAL
EVIDENCE ON RECORD AS AGAINST RESPONDENT CASIMIRO
FOR THE DELAY IN THE DISPOSITION AND PRELIMINARY
INVESTIGATION OF OMB-AFP-CRM-94-0218 (SB-09-CRM-0184-
0189), AND AGAINST RESPONDENTS CASIMIRO AND TURALBA
FOR VIOLATION OF OFFICE ORDER NO. 05-18, OFFICE ORDER
NO. 05-13, VIOLATION OF SEC. 35 OF R.A. 6770 AND SEC.
3 (K) OF R.A. 3019;
C. WHETHER THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN SUSTAINING THE DECISION OF THE RESPONDENT
OFFICE OF THE PRESIDENT THAT THE PREVENTIVE
SUSPENSION OF THE COMPLAINANT WAS BY REASON OF THE
"DELAY" IN FILING THEIR COMMENT IN SB-09-CRM-0184-0189, TO
THE MOTION TO QUASH SEPARATELY FILED BY ACCUSED
ACOT AND DULINAYAN;
D. WHETHER THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN SUSTAINING THE DECISION OF THE RESPONDENT
OFFICE OF THE PRESIDENT IN DISMISSING THE COMPLAINT
AGAINST RESPONDENTS, WHICH IS NOT IN ACCORD WITH THE
EVIDENCE ON RECORD, BUT CONTRARY TO ESTABLISHED
JURISPRUDENCE AND ITS PREVIOUS RULINGS;
E. WHETHER THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN APPLYING THE PROVISIONS OF EXECUTIVE ORDER
NO. 13;
F. WHETHER THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN SUSTAINING THE RULING OF THE OFFICE OF THE
PRESIDENT, WHEN IT FAILED TO RULE ON VARIOUS ISSUES
RAISED BY THE PETITIONERS, SUCH AS:
1. WHEN IT FAILED TO CONSIDER THE FINDINGS OF THE COURT
OF APPEALS IN C.A. G.R. 114210 ENTITLED JENNIFER AGUSTIN-
SE ET AL. VS. INTERNAL AFFAIRS BOARD ET AL.;
2. TO RULE ON THE ISSUE THAT RESPONDENT [OFFICE OF THE
PRESIDENT] ERRONEOUSLY CONCLUDED THAT THE
PREVENTIVE SUSPENSION OF THE COMPLAINANT WAS
JUSTIFIED BY REASON OF THE DELAY IN FILING THEIR
COMMENT IN SB-09-CRM-0184-0189;
3. WHETHER OR NOT THE FINDING OF THE RESPONDENT
[OFFICE OF THE PRESIDENT] IS CORRECT THAT THERE WAS NO
EVIDENCE RELATIVE TO THE UNDUE INJURY CAUSE [SIC] TO
THE PEOPLE AND TO PETITIONERS.30
The Ruling of the Court
The petition lacks merit.
Question of Law v. Question of Fact
At the outset, we note that questions of fact are raised in this petition
which are not proper under Rule 45 of the Rules of Court.1âwphi1
A question of law arises when there is a doubt as to what the law is on
a certain state of facts, while there is a question of fact when doubt
arises as to the truth or falsity of the alleged facts.31 For a question to
be a question of law, it must not involve an examination of the
probative value of the evidence presented by the litigants. The
resolution of the issue must rest solely on what the law provides on the
given set of facts and circumstances. Once it is clear that the issue
invites a review of the evidence presented, the question is one of fact.
Thus, the test of whether a question is one of law or of fact is not the
appellation given to such question by the party raising the same;
rather, it is whether the appellate court can determine the issue without
examining or evaluating the evidence, in which case, it is a question of
law; otherwise, it is a question of fact.32
In this case, petitioners allege, among others, that (1) the Court of
Appeals did not consider their evidence during the administrative
adjudication; (2) the Court of Appeals gravely erred in ruling that there
is no substantial evidence on record against Casimiro for the delay in
the disposition and preliminary investigation, and against Casimiro and
Turalba for violations of Office Order No. 05-18, Office Order No. 05-
13, Section 35 of RA No. 6770 and Section 3(k) of RA No. 3019; (3)
the Court of Appeals gravely erred in sustaining the finding of the OP
that they were preventively suspended by reason of their delay in filing
their Comment, (4) the Court of Appeals gravely erred in sustaining the
dismissal of the Complaint by the OP which is not in accord with the
evidence on record but contrary to established jurisprudence and its
previous rulings; and (5) the Court of Appeals gravely erred in
sustaining the OP without ruling on the finding of the OP that there was
no evidence relative to the undue injury caused to the people and the
petitioners.33 These issues all involve a review of the facts on record
or the examination of the probative value of the evidence submitted.
Applying the test of whether the question is one of law or of fact, the
aforementioned are questions of fact because petitioners assail the
appreciation of evidence by the Court of Appeals.34 We have
previously held that questions on the probative value of the evidence,
or those which relate to the analysis of the records by the lower courts
are questions of fact which are not proper for review by this Court:
Whether certain items of evidence should be accorded probative value
or weight, or should be rejected as feeble or spurious; or whether or
not the proofs on one side or the other are clear and convincing and
adequate to establish a proposition in issue; whether or not the body of
proofs presented by a party, weighed and analyzed in relation to
contrary evidence submitted by adverse party, may be said to be
strong, clear and convincing; whether or not certain documents
presented by one side should be accorded full faith and credit in the
face of protests as to their spurious character by the other side;
whether or not inconsistencies in the body of proofs of a party are of
such gravity as to justify refusing to give said proofs weight - all these
are issues of fact. Questions like these are not reviewable by the
Supreme Court whose review of cases decided by the CA is confined
only to questions of law raised in the petition and therein distinctly set
forth.35
Moreover, it is well-settled that as a general rule, this Court is not a
trier of facts.36 Thus, absent the recognized exceptions to this general
rule, this Court will not review the findings of fact of the lower courts.37
In this case, petitioners failed to show that the exceptions to justify a
review of the appreciation of facts by the Court of Appeals are present.
On the contrary, the findings of the Court of Appeals are all supported
by the evidence on record and further, are in accordance with the
findings of the OP. In fact, other than the bare and general allegation
that the Court of Appeals did not consider the evidence presented,
petitioners were not able to identify the Court of Appeals’ alleged error
in the appreciation of facts. A reading of the assailed decisions shows
that both the OP and the Court of Appeals considered the pleadings
and corresponding evidence submitted by both parties in arriving at
their respective decisions. Thus, we find no error in the appreciation of
facts by the Court of Appeals.
Due Process
Petitioners allege that their right to due process was violated when the
OP (1) did not consider the evidence they have presented and (2)
issued its decision without the recommendation of the Office of the
Deputy Executive Secretary for Legal Affairs (ODESLA) as provided in
Executive Order (EO) No. 13.
We find these contentions untenable.
Essence of Due Process in Administrative Cases
The essence of due process is an opportunity to be heard – as applied
to administrative proceedings, it is an opportunity to explain one’s side
or an opportunity to seek a reconsideration of the action or ruling
complained of.38 In this case, petitioners were given both opportunities
– the opportunity to explain their side by filing their pleadings which
contained all their allegations and evidence in support of their
arguments, and the opportunity to seek a reconsideration of the ruling
complained of, as shown by their motions for reconsideration and
appeals. As long as parties are afforded these opportunities, the
requirement of due process in administrative proceedings is sufficiently
met. As evidenced by the pleadings filed during the administrative
proceeding, and their subsequent appeal to the Court of Appeals and
now to this Court, they have been afforded the fullest opportunity to
establish their claims and to seek a reconsideration of the ruling
complained of.
Moreover, a reading of the decisions of the Court of Appeals and the
OP shows that the evidence petitioners presented had been duly
considered. Indeed, aside from their general allegation that the Court
of Appeals did not consider their evidence, petitioners failed to identify
any conclusion arrived at by the Court of Appeals or the OP that was
not supported by the evidence on record. Moreover, both the Court of
Appeals and the OP addressed the issues raised by the parties, and
subsequently cited the proper evidence on record and quoted the
applicable laws and jurisprudence to support their findings. The bare
allegation that they were denied due process cannot overcome the
clear fact that they were given every opportunity to establish their
claims.
Recommendation of ODESLA
Petitioners further allege that the Court of Appeals gravely erred in
applying the provisions of EO No. 13,39 as the decision of the OP was
approved only by the Executive Secretary without the recommendation
of the ODESLA. They argue that their right to due process was violated
as the decision was rendered by only one person rather than through
the recommendation of a collegial body – namely the Investigative and
the Adjudicatory Division of the ODESLA.
We find this argument patently baseless. As correctly pointed out by
the Court of Appeals, there is nothing in EO No. 13 which states that
findings on the complaints against a presidential appointee, such as a
Deputy Ombudsman, must be issued by a collegial body. The
ODESLA is merely a fact-finding and recommendatory body to the
President; and thus, it does not have the power to settle controversies
and adjudicate cases. In Pichay, Jr. v. ODESLA-IAD,40 the Court held:
Under E.O. 12, the PAGC was given the authority to "investigate or
hear administrative cases or complaints against all presidential
appointees in the government" and to "submit its report and
recommendations to the President." The IAD-ODESLA is a fact-finding
and recommendatory body to the President, not having the power to
settle controversies and adjudicate cases. As the Court ruled in Cariño
v. Commission on Human Rights, and later reiterated in Biraogo v. The
Philippine Truth Commission:
Fact-finding is not adjudication and it cannot be likened to the judicial
function of a court of justice, or even a quasi-judicial agency or office.
The function of receiving evidence and ascertaining therefrom the facts
of a controversy is not a judicial function. To be considered as such,
the act of receiving evidence and arriving at factual conclusions in a
controversy must be accompanied by the authority of applying the law
to the factual conclusions to the end that the controversy may be
decided or determined authoritatively, finally and definitively, subject to
such appeals or modes of review as may be provided by law.
xxxx
While the Ombudsman’s function goes into the determination of the
existence of probable cause and the adjudication of the merits of a
criminal accusation, the investigative authority of the IAD-ODESLA is
limited to that of a fact-finding investigator whose determinations and
recommendations remain so until acted upon by the President. As
such, it commits no usurpation of the Ombudsman’s constitutional
duties.41
Moreover, as the report of the ODESLA is merely recommendatory in
nature, its absence does not negate the validity of the decision of the
OP.1avvphi1 There is nothing in EO No. 13 which states that the lack
of recommendation of the ODESLA renders the OP’s decision in an
administrative case void. Thus, it cannot be said that petitioners were
deprived of their right to due process.
Inordinate Delay
Petitioners posit that the delay in the filing of the Informations against
Acot, Dulinayan and several others should be attributed to Casimiro.
They further argue that this delay amounts to grave misconduct,
conduct prejudicial to the interest of the service, and gross neglect of
duty.
While it is unfortunate that the filing of the Informations has taken an
inexplicable amount of delay from the preliminary investigation, this
cannot be blamed solely on Casimiro. The records show that the initial
delay was incurred because of the procedural layers of review done to
the 12 April 1996 Resolution recommending the filing of Informations
against Acot, Dulinayan and several others. Moreover, considering that
the 12 April 1996 Resolution was modified to dismiss the charges
against Acot and Dulinayan, Casimiro cannot be faulted for the delay in
the filing of the Informations against them as there was nothing to be
filed. Casimiro was appointed Deputy Ombudsman only on 16
December 1999 and thus, had every right to presume regularity in the
investigation of the cases. The delay, therefore, cannot be attributed to
Casimiro.
Petitioners also bewail the fact that there was no apparent movant in
the case against Acot, Dulinayan and several others; and thus,
Casimiro, by reviewing this case, showed unusual interest. However,
the records show that the case was brought to the attention of the
MOLEO when Col. Sabado and Ltc. Gadin, co-respondents of Acot
and Dulinayan, requested for their Ombudsman Clearance. This was
when the record officers found out that the first folder of the case was
missing and that the action taken on the 12 April 1996 Resolution after
its 2 March 1998 modification was unknown. As these facts were
brought to the attention of Casimiro, it would have been highly
irresponsible for him to turn a blind eye to the irregularities uncovered.
To expect Casimiro, who was then the Deputy Ombudsman for the
MOLEO, to turn a blind eye to this anomaly would have been more
suspect and highly irregular.
Confidentiality of Memorandum
Petitioners allege that the Court of Appeals gravely erred when it
affirmed the decision of the OP holding that Casimiro did not violate
Section 3(k) of RA No. 3019, Office Order No. 05-13 and Office Order
No. 05-18.
In particular, petitioners aver that Casimiro and Turalba, in conspiracy
with each other, violated Section 3(k) of RA No. 3019, as well as
Section 7, paragraph (c) of RA No. 6713,42 when the latter furnished
Casimiro with the 5 January 2010 Memorandum which they alleged
was of a confidential nature. Petitioners further allege that they are
considered "whistleblowers" under Office Order No. 05-18, Series of
2005 (Rules on Internal Whistleblowing and Reporting); and thus, they
should be protected against any retaliatory action of Casimiro. This
allegation is again based on the premise that their 5 January 2010
Memorandum calling for the investigation of Casimiro is a "protected
disclosure" which should not have been disclosed by Turalba to
Casimiro.
We find these contentions to be without merit.
Protected disclosure is defined as "the deliberate and voluntary
disclosure by an official or employee who has relevant information of
an actual, suspected or anticipated wrongdoing by any official or
employee, or by any OMB organizational unit."43 On the other hand, a
whistleblower refers "to an official or employee who makes protected
disclosure to his immediate supervisor, other superior officers, the
Tanodbayan and/or his duly authorized/designated representative or
the Internal Affairs Board (IAB)."44 Petitioners insist that based on the
foregoing definitions, the 5 January 2010 Memorandum is a protected
disclosure; and thus, they are considered whistleblowers who should
be protected from retaliatory action.45
A reading of the Rules on Internal Whistleblowing and Reporting,
however, will show that the conditions for "protected disclosure" have
not been met in this case. Specifically, Section 7 provides:
Section 7. Conditions for Protected Disclosure. -
Whistleblowers shall be entitled to the benefits under these Rules,
provided that all the following requisites concur:
(a) The disclosure is made voluntarily, in writing and under oath;
(b) The disclosure pertains to a matter not yet the subject of a
complaint already filed with, or investigated by the IAB or by any other
concerned office; unless, the disclosures are necessary for the
effective and successful prosecutions, or essential for the acquisitions
of material evidence not yet in its possession;
(c) The whistleblower assists and participates in proceedings
commenced in connection with the subject matter of the disclosure;
and
(d) The information given by the whistleblower contains sufficient
particulars and, as much as possible, supported by other material
evidence.
The 5 January 2010 Memorandum does not meet the conditions set
forth in Section 7; and thus, it does not qualify as a protected
disclosure under the rules. The Memorandum fails to meet the first
requirement as the disclosure, while made voluntarily and in writing,
was not executed under oath. Contrary to the allegations of petitioners,
there is also no indication that the document was to be treated as
confidential. If indeed they had intended that the Memorandum be
considered of a confidential nature, they should have indicated it
clearly, such as by putting the word "confidential" on the face of the
document. This they failed to do; and thus, the Memorandum was
treated as a regular office memorandum.
Moreover, as correctly pointed out by the Court of Appeals and OP, the
allegations made by petitioners could all be easily verified through the
records and thus do not fall under the ambit of protected information.
There was nothing confidential about the Memorandum. Neither did it
contain any classified information. Thus, there could have been no
violation of Section 3(k) of RA No. 301946 or of Section 7(c) of RA No.
6713.47 Moreover, as there was no violation of Section 7(c) of RA No.
6713, there is also no violation of Office Order No. 05-13 which
provides in part:
Section 1. OMB officials and employees shall not disclose any
confidential information acquired by them in the course of their
employment in the Office. Pursuant to Section 7(c) of Republic Act
6713 otherwise known as the Code of Conduct and Ethical Standards
for Public Officials and Employees, they shall not use or divulge
confidential or classified information officially known to them by reason
of their office and not made available to the public either: (1) to further
their private interest or give undue advantage to anyone; or (2) to
prejudice the public interest. x x x.
To reiterate, the 5 January 2010 Memorandum was bereft of any
confidential character – it was not a protected disclosure nor did it
contain any confidential or classified information as provided under the
law. As such, Turalba could not have violated any rules on
confidentiality when he provided Casimiro with a copy of the said
Memorandum.
Malicious Prosecution
As for the allegation that Casimiro was liable for malicious prosecution
under Section 35 of RA No. 6770, we find that this argument must also
fail.
Section 35 of RA No. 6770 provides:
Section 35. Malicious Prosecution. — Any person who, actuated by
malice or gross bad faith, files a completely unwarranted or false
complaint against any government official or employee shall be subject
to a penalty of one (1) month and one (1) day to six (6) months
imprisonment and a fine not exceeding five thousand pesos
(P5,000.00).
In turn, malicious prosecution has been defined as follows:
In this jurisdiction, the term 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.
While generally associated with unfounded criminal actions, the term
has been expanded to include unfounded civil suits instituted just to
vex and humiliate the defendant despite the absence of a cause of
action or probable cause.
xxxx
This Court has drawn the four elements that must be shown to concur
to recover damages for malicious prosecution. Therefore, for a
malicious prosecution suit to prosper, the plaintiff must prove the
following: (1) the prosecution did occur, and the defendant was himself
the prosecutor or that he instigated its commencement; (2) the criminal
action finally ended with an acquittal; (3) in bringing the action, the
prosecutor acted without probable cause; and (4) the prosecution was
impelled by legal malice -- an improper or a sinister motive. The
gravamen of malicious prosecution is not the filing of a complaint
based on the wrong provision of law, but the deliberate initiation of an
action with the knowledge that the charges were false and
groundless.48
Based on the foregoing, we see that the elements of malicious
prosecution are wanting in this case. Based on the Complaint filed by
Casimiro before the IAB, there had been probable cause for him to
initiate the charges against petitioners. It is of record that petitioners
had indeed filed several motions for extension of time, and that instead
of filing the necessary Comment, they had submitted the 5 January
2010 Memorandum. This could have constituted conduct prejudicial to
the best interest of the service or gross neglect of duty. Moreover,
when they were asked by Casimiro to explain their actions, they did not
respond, but merely submitted another Memorandum, addressed to
Villa-Ignacio, which were considered actions that evinced resistance to
authority.49 In fact, the IAB found petitioners guilty of Simple
Discourtesy in the Course of Official Duties and were reprimanded for
their conduct.50 Thus, the gravamen of malicious prosecution – the
deliberate initiation of an action with the knowledge that the charges
were false and groundless – was absent on the part of Casimiro.
Stare Decisis and Res Judicata
Petitioners further allege that the Court of Appeals gravely erred when
it failed to take judicial notice of CA-G.R. No. 114210, where the
Twelfth Division of the Court of Appeals found that petitioners were not
remiss in peforming their duties in relation to the criminal cases against
Acot, Dulinayan and several others.
Again, we do not find any reversible error.
Petitioners, in essence, are arguing that the Court of Appeals should
have applied the doctrine of stare decisis, which enjoins adherence to
judicial precedence, such that lower courts are bound to follow the rule
established in a decision of the Supreme Court,51 or the doctrine of
res judicata, which provides that a final judgment or decree on the
merits rendered by a court of competent jurisdiction is conclusive of the
rights of the parties or their privies in all later suits and on all points and
matters determined in the previous suit.52
However, we note that the decision being relied on by petitioners was
rendered merely by another division of the Court of Appeals, and not
this Court.1âwphi1 We have previously settled that the decision of a
division of the Court of Appeals is not binding on a co-division.53 We
held:
In the case at bar, this Court holds that there was no grave abuse of
discretion amounting to lack or excess of jurisdiction committed by the
Special Sixth Division of the Court of Appeals in not giving due
deference to the decision of its co-division. As correctly pointed out
by the Special Sixth Divisfon of the Court of Appeals, the decision
of its co-division is not binding on its other division. Further, it
must be stressed that judicial decisions that form part of our legal
system are only the decisions of the Supreme Court. Moreover, at
the time petitioners made the aforesaid Manifestation, the Decision
dated 14 December 2007 in CAG.R. SP No. 96717 of the Special
Tenth Division was still on appeal before this Court.
Therefore, the Special Sixth Division of the Court of Appeals cannot be
faulted for not giving due deference to the said Decision of its co-
division, and its actuation cannot be considered grave abuse of
discretion amounting to lack or excess of its jurisdiction.54 (Boldfacing
and underscoring supplied)
Moreover, as correctly pointed out by the Court of Appeals, the subject
matter in CA-G.R. No. 114210 is different from the issues involved in
this case. While this petition involves the administrative complaint filed
by petitioners against Casimiro in relation to the alleged failure of
Casimiro to file the Informations against Acot, Dulinayan and several
others, the petition involved in CA-G.R. No. 114210 is the
administrative complaint filed by petitioners which relates to the delay
incurred by petitioners in filing the necessary pleadings before the
Sandiganbayan. Thus, the Court of Appeals did not err in not taking
judicial notice of CA-G.R. No. 114210.
WHEREFORE, we DENY the petition. We AFFIRM the 29 November
2012 Decision and the 23 May 2013 Resolution of the Court of
Appeals, which affirmed the 14 June 2011 Decision of the Office of the
President.
SO ORDERED.
HECTOR C. VILLANUEVA, petitioner,
vs.
UNITED COCONUT PLANTERS BANK (UCPB), Dumaguete
Branch, respondent.
PANGANIBAN, J.:
A suit for malicious prosecution cannot prosper unless the plaintiff
satisfactorily proves that the earlier criminal action lacked probable
cause and was filed, by a sinister design, mainly to injure, vex, annoy
or humiliate. An acquittal, by itself, does not necessarily prove the
absence of probable cause in the criminal information or complaint.
Upon the other hand, the complainant cannot escape liability merely on
the ground that it was the fiscal who prosecuted the proceedings in
court.
The Case
Before us is a Petition for Review on Certiorari of the October 30, 1998
Decision 1 and the April 8, 1999 Resolution 2 of the Court of Appeals 3
(CA) in CA-GR CV No. 52904. The assailed Decision disposed as
follows: 4
WHEREFORE, IN VIEW OF THE FOREGOING, this appeal
is hereby GRANTED. The Decision of the lower [c]ourt dated
November 6, 1995 is REVERSED and SET ASIDE, and the
complaint for damages in the court below is ordered
DISMISSED. No pronouncement as to costs.
The assailed Resolution denied the petitioner's Motion for
Reconsideration. 5
The Facts
The Court of Appeals, in its assailed Decision, related the
antecedents of this case in this wise: 6
Sometime in December 1978, Hermenegildo Villanueva, father of
[herein Petitioner] Hector C. Villanueva, applied for and was granted a
loan by [Respondent] United Coconut Planters' Bank (UCPB),
Dumaguete City Branch, which at that time was managed by one
Bobby Cafe. The loan was for the alleged purpose of agricultural
coconut production and for processing under the Coconut Production
Loan Program. As security therefor, Hermenegildo Villanueva
mortgaged to the bank a parcel of land registered in his name located
at Mauban, Quezon.
In the course of a bank audit, certain fraud, anomalies and irregularities
were discovered in the application, processing and granting of said
loan prompting UCPB to conduct further investigation on the matter.
After due inquiry, the [respondent] bank found and concluded that
[petitioner], together with his father, Hermenegildo Villanueva, Bobby
Cafe (UCPB Dumaguete City Branch Manager) and a certain Reynaldo
Ramos, confederated and conspired with each other in perpetrating the
fraud, anomalies and irregularities to the detriment of the bank.
On June 8, 1979, UCPB, through its counsel, filed the following
criminal complaints with the Office of the City Fiscal (now Prosecutor)
of Dumaguete City, to wit:
1. Against Bobby B. Cafe, Hermenegildo G. Villanueva,
Hector Villanueva and Reynaldo Ramos, for violation of
Section 77 of the General Banking Act, Republic Act (RA)
No. 337, as amended by Presidential Decree (PD) No. 71, in
relation to Central Bank Circular No. 517, Series of 1976,
and Section 87 of the General Banking Act (Exh. "1", pp. 8-9,
Defendant's Folder of Exhibit);
2. Against Hermenegildo Villanueva, Hector Villanueva and
Reynaldo Ramos for violation of Section 87-A-2(d) of the
General Banking Act, RA No. 337, as amended by PD No.
71 (Exh. "2", pp. 33-34, ibid.);
3. Against Bobby B. Cafe for violation of Section 87-A-1 (c)
of the General Banking Act, RA No. 337, as amended by PD
No. 71 (Exh "3", pp. 46-47, ibid.);
4. Against Bobby B. Cafe, Hermenegildo G. Villanueva,
Hector Villanueva and Reynaldo Ramos for violation of
Section 87-A-2(b) of the General Banking Act, RA No. 337,
as amended by PD No. 71 (Exh. "4", pp. 59-60, ibid.);
5. Against Bobby B. Cafe, Hermenegildo G. Villanueva,
Hector Villanueva and Reynaldo Ramos for violation of
Articles 315(2)(a) and 316(2) of the Revised Penal Code
(Exh. "5", no. 72-73, ibid.); and
6. Against Bobby B. Cafe, Hermenegildo G. Villanueva,
Hector Villanueva and Reynaldo Ramos for violation of
Section 87-A-1(d) and Section 87-A-2(a) of the General
Banking Act, RA No. 337, as amended by PD No. 71 (Exh.
"6", pp. 85-86, ibid.).
After preliminary investigation, the City Fiscal found probable cause
and resolved to file three (3) informations with the Court of First
Instance (now Regional Trial Court) of Dumaguete City (Exh. "7", pp.
98-120, ibid.), as follows:
1. Criminal Case No. 3699
Against Bobby Cafe, Hermenegildo Villanueva, Hector
Villanueva and Reynaldo Ramos for violation of Sections 77,
87-A-2(b) and 87-A-1(d) of the General Banking Act, RA No.
337, as amended by PD No. 71 and [Central Bank] Circular
No. 517, Series of 1976 (Exh. "8", pp. 121-122, ibid.);
2. Criminal Case No. 3700
 Against Hermenegildo Villanueva, Hector Villanueva,
Reynaldo Ramos and Bobby B. Cafe for violation of Sections
87-A-2(d) and 87-A-1(c), General Banking Act, RA No. 337,
as amended by PD NO. 71 (Exh. "9", no. 123-124, ibid.);
3. Criminal Case No. 3701
Against Bobby Cafe, Hermenegildo Villanueva, Hector
Villanueva and Reynaldo Ramos for the crime of Estafa
under Article 315(2)(a) of the Revised Penal. Code (Exh.
"10", pp. 125-126, ibid.).
The three (3) criminal cases were consolidated and tried jointly.
On June 29, 1991, the Regional Trial Court of Dumaguete City, Branch
37, rendered a decision therein acquitting all the accused except for
Bobby Cafe, the dispositive portion of which reads:
WHEREFORE, all the foregoing considered, judgment is
hereby rendered as follows:
1. In Criminal Case No. 3699, accused Bobby Cafe is found
guilty beyond reasonable doubt of violating Paragraph 1(d)
of Section 87-A of the General Banking Act as amended and
is hereby sentenced to imprisonment of one year and to pay
a fine of P2,000.00 with subsidiary imprisonment at the rate
of one day for each eight pesos but in no case to exceed
one-third of the term of the sentence, in case of insolvency,
and to pay 1/4 of the costs. Accused Rey Ramos and Hector
Villanueva are acquitted on grounds of reasonable doubt
with 1/2 of the costs de oficio.
In Criminal Case No. 3700 and Criminal Case No. 3701,
accused Bobby Cafe, Hector Villanueva and Rey Ramos are
acquitted on grounds of reasonable doubt with costs de
oficio.
All the three cases against Hermenegildo Villanueva are
ordered dismissed in view of his death pursuant to
Paragraph 1 of Article 89 of the Revised Penal Code.
x x x           x x x          x x x
(Exhs. "K" and "11"; p. 358, Orig. Rec., Vol. I)
In view of his acquittal in the criminal cases, Hector Villanueva filed a
complaint for damages on the ground of alleged malicious prosecution
with the Regional Trial Court of Dumaguete City against [respondent
bank], which was docketed as Civil Case No. 172-B and raffled to
Branch [44] of the court. The complaint alleged, among others, that
[petitioner] is a respectable member of the community, a professional,
a member of various civic organizations, a businessman, and a political
leader; that the filing of the criminal cases against him by [respondent
bank] was done with malice which resulted in the undue maligning,
blackening . . . of his integrity, honesty and good reputation, as well as
adversely affecting his political career and business dealings, for which
[petitioner] prayed that [respondent bank] be held liable to him for the
amount [of] P200,000.00 in actual damages, P6,000,000.00 in moral
damages, P2,000,000.00 in exemplary damages, P1,000,000.00 in
nominal damages, and P800,000.00 in attorney's fees, as well as
P5,000.00 charge per court appearance.
In its answer, [respondent bank] denied the allegations in the complaint
and asseverated that [petitioner] ha[d] no cause of action against
[respondent bank] since the bank's filing of the criminal complaints
before the Fiscal's Office of Dumaguete City was not tainted with
malice; that it was the Fiscal's Office that prosecuted the criminal
cases against [petitioner] and his co-accused when after preliminary
investigation, it found probable cause to file the informations in court;
that the acts of the City Fiscal in filing the informations and prosecuting
the cases [were] presumed to have been performed with regularity and
in good faith; that [petitioner's] acquittal based on reasonable doubt
justifie[d] [respondent bank's] submission of its grievances to the
machinery of justice for ruling and possible redress; that [petitioner's]
assertion that the filing of the criminal cases by the bank caused his
political misfortunes [was] strained and farfetched; and that
[petitioner's] claim for damages ha[d] no legal and factual bases.
[Respondent bank] thus prayed for the dismissal of the complaint and,
in his counterclaim, for an award of P10,000,000.00 in moral damages,
P2,000,000.00 in exemplary damages, P1,000,000.00 in attorney's
fees and costs of suit.
After trial on the merits, the lower court rendered its Decision 7 dated
November 6, 1995, in favor of petitioner. The dispositive portion reads:
8 amended by Presidential Decree No. 71), as well as Central Bank
WHEREFORE, finding a preponderance of evidence in favor
of the [petitioner], and considering his social standing in the
community and in the Province of Negros Oriental, judgment
is hereby rendered awarding:
1. Moral damages in the amount of [o]ne and a
half million pesos;
2. Exemplary damages in the amount of two
million pesos;
3. Attorney's fees in the amount of five hundred
thousand pesos.
All the counterclaims of [respondent bank] are hereby
dismissed for lack of merit.
On appeal, the CA reversed the trial court in the assailed Decision and
Resolution.
Ruling of the Court of Appeals
The Court of Appeals ruled that the petitioner had failed to prove the
elements of malicious prosecution.
First, even if the respondent bank filed the six criminal Complaints
against the petitioner, it was not the prosecutor but merely the
complainant. The prosecution of those criminal cases was left solely to
the discretion and control of the city fiscal. Second, the prosecutor
acted with probable cause. The Resolution of the city fiscal of
Dumaguete clearly showed petitioner's participation in the alleged
crimes and the reasons why the accused was probably guilty as
charged. Third, the petitioner also failed to establish malice behind the
filing of the criminal Complaints.
The adverse result of an action does not by itself make the prosecution
thereof wrongful; neither does it subject the actor to payment of
damages. The law does not impose a penalty on the right to litigate.
Hence, this Petition. 9
Issues
In his Memorandum, the petitioner submits the following issues for our
consideration:
I.
Can probable cause exist in non-existent crimes or indicted
criminal acts not specifically punished by existing penal
statutes?
II.
Complainant of a criminal complaint being merely reduced to
the status of [a] complaining witness in the prosecution of the
. . . information filed in court, does such reduced status
absolve complainant of civil liability under the doctrine of
malicious prosecution?
III.
On the application of the doctrine of malicious prosecution, is
not the doctrine enunciated in the Lao v. Court of Appeals
(199 SCRA 58, 61) complimentary, supportive or rather
strengthening further the earlier doctrine posited in the case
of Lagman v. Intermediate [Appellate Court] (G.R. 77281, 28
Oct. 89), or did the former amend or supplant the latter? 10
Restated, the issues brought forth in this case are as follows: (1) Was
there probable cause against petitioner? (2) May the private
complainant in a criminal case be held liable for malicious prosecution,
considering that it is the fiscal who prosecuted the criminal action
against the accused? and (3) Was the petitioner prosecuted out of
malice?
The Court's Ruling
The Petition has no merit.
First Issue:
Probable Cause
For a malicious prosecution suit to prosper, the plaintiff must prove the
following: (1) the prosecution did occur, and the defendant was himself
the prosecutor or that he instigated its commencement; (2) the criminal
action finally ended with an acquittal; (3) in bringing the action, the
prosecutor acted without probable cause; and (4) the prosecution was
impelled by legal malice — an improper a sinister motive. 11 Stripped
of legal jargon, malicious prosecution means persecution through the
misuse or abuse of judicial processes; or the institution and pursuit of
legal proceedings for the purpose of harassing, annoying, vexing or
injuring an innocent person.
Petitioner avers that there was no probable cause against him,
because the imputed acts were not covered or punished by a penal
statute. Despite being a complete stranger to the loan transaction, he
was implicated by the bank as a conspirator in the six Complaints for
violation of the General Banking Act. However, only three Informations
were filed for violations of the following: one, Secs. 77, 87-A-2(b) and
87-A-1(d) of the General Banking Act (Republic Act No. 337 as
Circular No. 517, Series of 1976; two, Secs. 87-A-2(d) and 87-A-1(c) of
the General Banking Act, as amended; and, three, Article 315(2)(a) of
the Revised Penal Code. The petitioner was acquitted of all three
charges.
The contention is untenable. Probable cause is evident from the facts
and circumstances established during the preliminary investigation
conducted by the city prosecutor. In its 23-page Resolution of October
8, 1979, the City Prosecutor's Office outlined petitioner's participation,
as follows:
The first document of the case . . . is a Deed of Sale
executed on November 4, 1978 in the City of Manila selling
Lot No. 7716-B of the Cadastral Survey of the Municipality of
Mauban, Province of Quezon covered by Transfer Certificate
of Title No. T-81215 of the land records of Quezon Province
consisting of 5,791,688 sq. m. (5[79] plus hectares)[;] the
vendor is the Coco-Agro Industrial Co., Inc., represented by
Jaime Abeja and the vendee is Hermenegildo Villanueva for
a consideration of P500,000.00. Evidently, no money
changed hands on this date except the sum of P6,000.00 for
land taxes and other expenses because at about the same
time, two (2) documents were executed by Hermenegildo
Villanueva in favor of Jaime Abeja: one for P1,100,000.00
and another for P400,000.00 to secure the payment of
mortgage of the agreed consideration of P1,500,000.00.
Although these documents contain the signature of Jaime
Abeja as vendor in the document of sale and as mortgagee
in the two documents of mortgage, and that of Hermenegildo
Villanueva as vendee and mortgagor in the documents of
mortgage, Abeja claims that Hermenegildo Villanueva was
not present. However, Bobby B. Cafe, Hector Villanueva,
and Dr. Reynaldo Ramos were present. Obviously, these
documents were prepared and signed by Villanueva
beforehand. These mortgages were kept secret although the
respondents, including Bobby B. Cafe, knew of them. . . .
The Deed of Sale, enabled Bobby B. Cafe and/or the other
respondents to transfer the title from the name of Abeja's
corporation [to] the name of Hermenegildo Villanueva. 12
. . . And after release, the proceeds were deposited in the
account of . . . Hermenegildo Villanueva with UCPB,
Dumaguete Branch. Almost immediately, or about a day or
two, the proceeds of the loan were withdrawn from the
account of Hermenegildo Villanueva and deposited with the
newly opened account of [petitioner], son of Hermenegildo
Villanueva. 13
. . . The evidence also shows that at the time Abeja was in
Dumaguete City, on 22 March 1978, when he signed the
Memorandum of Agreement, vendee Hermenegildo
Villanueva was out of the country. From start to finish, it was
only Bobby B. Cafe and Rey Ramos, and at one time Hector
Villanueva who had dealings and meetings with Jaime
Abeja, . . . 14
The bank cannot be faulted for its desire to protect its interest in the
subject loans. Since the proceeds thereof were already released and
transferred to the bank account of petitioner from that of his father, the
bank had to implead the petitioner in the criminal cases.
Probable cause is the existence of such facts and circumstances as
would excite the belief in a reasonable mind that the person who is
charged and prosecuted in a criminal case is probably guilty of the
crime or wrongdoing. 15 The term does not connote absolute certainty.
Neither does it require an inquiry into the sufficiency of the evidence to
obtain a conviction.
In this case, the above-quoted facts taken together constitute prima
facie evidence to engender a reasonable belief that petitioner was part
of a conspiracy to defraud the respondent bank. Thus, there was
probable cause for the filing of the Complaints, which were not
products of the whim or caprice of the respondent bank.
In malicious prosecution, even if the act complained of does not
constitute a crime, there can still be probable cause behind the
commission of a civil wrong. The gravamen of malicious prosecution is
not the filing of a complaint based on the wrong provision of law, but
the deliberate initiation of an action with the knowledge that the
charges were false and groundless. 16 In the case at bar, even if Secs.
87-A-1, 87-A-1(d), 87-A-2, and 87-A-2(b) of the General Banking Act
punish only bank officers, employees, borrowers or banking
institutions, the respondent bank nonetheless filed these Complaints
based on a theory of a conspiracy to defraud it.1âwphi1.nêt
The petitioner's acquittal, by itself, did not disprove the presence of
probable cause. Evidence of probable cause to warrant the filing of a
criminal information may not suffice to procure a conviction, which
requires proof beyond reasonable doubt. In other words, an acquittal
does not necessarily imply lack of probable cause.
Second Issue:
The Prosecution of the Information
by the Public Prosecutor, Not by the Complainant
Petitioner avers that the CA erred in absolving the respondent bank on
the basis merely of the fact that the fiscal had absolute control and
supervision of the prosecution.
We agree that the CA erred on this point. As held in Lagman v.
Intermediate Appellate Court, 17 the second requisite of malicious
prosecution is "that the defendant was himself the prosecutor or that
he instigated its commencement." Indeed, the right to institute a
criminal action cannot be exercised maliciously and in bad faith, as
when a criminal complaint is used "as a weapon to force an alleged
debtor to pay an indebtedness." 18 Such complaint designed to annoy
or harass may be the basis of a suit for malicious prosecution. Clearly,
the mere fact that the fiscal took full control of a litigation does not
grant immunity to persons who misuse their rights to instigate criminal
actions.
Third Issue:
Malice and Malicious Prosecution
The respondent bank filed the criminal Complaints for violations of the
General Banking Act in its honest belief that these charges were
meritorious. There is no credible evidence to show that it was impelled
by a desire to unjustly vex, annoy and inflict injury on the petitioner.
Before these cases were referred to the city fiscal, it had even
conducted its own investigation with the assistance of the National
Bureau of Investigation. 19 1âwphi1
Malicious prosecution requires proof that the prosecution was
prompted by a sinister design to vex and humiliate the plaintiff. 20 The
respondent bank had neither a "bone to pick" with the petitioner nor a
"previous dealing with petitioner that could have prompted the
respondent bank to turn the tables on him." 21
Resort to judicial processes, by itself, is not an evidence of ill will, as
the mere act of filing a criminal complaint does not make the
complainant liable for malicious prosecution. 22 There must be proof
that the suit was prompted by legal malice — an inexcusable intent to
injure, oppress, vex, annoy or humiliate. 23 A contrary rule would
discourage peaceful recourse to the courts and unjustly penalize the
exercise of a citizen's right to litigate. 24 Where the action is filed in
good faith, no penalty should be imposed thereon. 25
WHEREFORE, the Petition is DENIED and the assailed Decision and
Resolution AFFIRMED. Costs against petitioner.
SO ORDERED.
CONRADO BUNAG, JR., petitioner,
vs.
HON. COURT OF APPEALS, First Division, and ZENAIDA B.
CIRILO, respondents.
 
REGALADO, J.:
Petitioner appeals for the reversal of the decision 1 of respondent
Court of Appeals promulgated on May 17, 1991 in CA-G.R. CV No.
07054, entitled "Zenaida B. Cirilo vs. Conrado Bunag, Sr. and Conrado
Bunag, Jr.," which affirmed in toto the decision of the Regional Trial
Court, Branch XI at Bacoor, Cavite, and, implicitly, respondent court's
resolution of September 3, 1991 2 denying petitioner's motion for
reconsideration.
Respondent court having assiduously discussed the salient
antecedents of this case, vis-a-vis the factual findings of the court
below, the evidence of record and the contentions of the parties, it is
appropriate that its findings, which we approve and adopt, be
extensively reproduced hereunder:
Based on the evidence on record, the following
facts are considered indisputable: On the
afternoon of September 8, 1973, defendant-
appellant Bunag, Jr. brought plaintiff-appellant to a
motel or hotel where they had sexual intercourse.
Later that evening, said defendant-appellant
brought plaintiff-appellant to the house of his
grandmother Juana de Leon in Pamplona, Las
Piñas, Metro Manila, where they lived together as
husband and wife for 21 days, or until September
29, 1973. On September 10, 1973, defendant-
appellant Bunag, Jr. and plaintiff-appellant filed
their respective applications for a marriage license
with the Office of the Local Civil Registrar of
Bacoor, Cavite. On October 1, 1973, after leaving
plaintiff-appellant, defendant-appellant Bunag, Jr.
filed an affidavit withdrawing his application for a
marriage license.
Plaintiff-appellant contends that on the afternoon
of September 8, 1973, defendant-appellant Bunag,
Jr., together with an unidentified male companion,
abducted her in the vicinity of the San Juan de
Dios Hospital in Pasay City and brought her to a
motel where she was raped. The court a quo,
which adopted her evidence, summarized the
same which we paraphrased as follows:
Plaintiff was 26 years old on
November 5, 1974 when she
testified, single and had
finished a college course in
Commerce (t.s.n., p. 4, Nov.
5, 1974). It appears that on
September 8, 1973, at about
4:00 o'clock in the afternoon,
while she was walking along
Figueras Street, Pasay City
on her way to the San Juan
de Dios Canteen to take her
snack, defendant, Conrado
Bunag, Jr., came riding in a
car driven by a male
companion. Plaintiff and
defendant Bunag, Jr. were
sweethearts, but two weeks
before September 8, 1973,
they had a quarrel, and
Bunag, Jr. wanted to talk
matters over with plaintiff, so
that he invited her to take their
merienda at the Aristocrat
Restaurant in Manila instead
of at the San Juan de Dios
Canteen, to which plaintiff
obliged, as she believed in his
sincerity (t.s.n., pp. 8-10, Nov.
5, 1974).
Plaintiff rode in the car and
took the front seat beside the
driver while Bunag, Jr. seated
himself by her right side. The
car travelled north on its way
to the Aristocrat Restaurant
but upon reaching San Juan
Street in Pasay City, it turned
abruptly to the right, to which
plaintiff protested, but which
the duo ignored and instead
threatened her not to make
any noise as they were ready
to die and would bump the car
against the post if she
persisted. Frightened and
silenced, the car travelled its
course thru F.B. Harrison
Boulevard until they reached a
motel. Plaintiff was then pulled
and dragged from the car
against her will, and amidst
her cries and pleas. In spite of
her struggle she was no
match to the joint strength of
the two male combatants
because of her natural
weakness being a woman and
her small stature. Eventually,
she was brought inside the
hotel where the defendant
Bunag, Jr. deflowered her
against her will and consent.
She could not fight back and
repel the attack because after
Bunag, Jr. had forced her to
lie down and embraced her,
his companion held her two
feet, removed her panty, after
which he left. Bunag, Jr.
threatened her that he would
ask his companion to come
back and hold her feet if she
did not surrender her
womanhood to him, thus he
succeeded in feasting on her
virginity. Plaintiff described the
pains she felt and how blood
came out of her private parts
after her vagina was
penetrated by the penis of the
defendant Bunag, Jr. (t.s.n.
pp. 17-24, Nov. 5, 1974).
After that outrage on her
virginity, plaintiff asked Bunag,
Jr. once more to allow her to
go home but the latter would
not consent and stated that he
would only let her go after
they were married as he
intended to marry her, so
much so that she promised
not to make any scandal and
to marry him. Thereafter, they
took a taxi together after the
car that they used had already
gone, and proceeded to the
house of Juana de Leon,
Bunag, Jr.'s grandmother in
Pamplona, Las Piñas, Metro
Manila where they arrived at
9:30 o'clock in the evening
(t.s.n., p. 26, Nov. 5, 1974). At
about ten (10) o'clock that
same evening, defendant
Conrado Bunag, Sr., father of
Bunag, Jr. arrived and
assured plaintiff that the
following day which was a
Monday, she and Bunag, Jr.
would go to Bacoor, to apply
for a marriage license, which
they did. They filed their
applications for marriage
license (Exhibits "A" and "C")
and after that plaintiff and
defendant Bunag, Jr. returned
to the house of Juana de Leon
and lived there as husband
and wife from September 8,
1973 to September 29, 1973.
On September 29, 1973
defendant Bunag, Jr. left and
never returned, humiliating
plaintiff and compelled her to
go back to her parents on
October 3, 1973. Plaintiff was
ashamed when she went
home and could not sleep and
eat because of the deception
done against her by
defendants-appellants (t.s.n.,
p. 35, Nov. 5, 1974).
The testimony of plaintiff was
corroborated in toto by her
uncle, Vivencio Bansagan
who declared that on
September 8, 1973 when
plaintiff failed to arrive home
at 9:00 o'clock in the evening,
his sister who is the mother of
plaintiff asked him to look for
her but his efforts proved
futile, and he told his sister
that plaintiff might have
married (baka nag-asawa,
t.s.n., pp. 5-6, March 18,
1976). However, in the
afternoon of the next day
(Sunday), his sister told him
 that Francisco Cabrera,
accompanied by barrio
captain Jacinto Manalili of
Ligas, Bacoor, Cavite,
informed her that plaintiff and
Bunag, Jr. were in Cabrera's
house, so that her sister
requested him to go and see
the plaintiff, which he did, and
at the house of Mrs. Juana de
Leon in Pamplona, Las Piñas,
Metro Manila he met
defendant Conrado Bunag,
Sr., who told him, "Pare, the
children are here already. Let
us settle the matter and have
them married."
He conferred with plaintiff who told him that as she
had already lost her honor, she would bear her
sufferings as Boy Bunag, Jr. and his father
promised they would be married.
Defendants-appellants, on the other hand, deny
that defendant-appellant Conrado Bunag, Jr.
abducted and raped plaintiff-appellant on
September 8, 1973. On the contrary, plaintiff-
appellant and defendant-appellant Bunag, Jr.
eloped on that date because of the opposition of
the latter's father to their relationship.
Defendant-appellants claim that defendant-
appellant Bunag, Jr. and plaintiff-appellant had
earlier made plans to elope and get married, and
this fact was known to their friends, among them,
Architect Chito Rodriguez. The couple made good
their plans to elope on the afternoon of September
8, 1973, when defendant-appellant Bunag, Jr.,
accompanied by his friend Guillermo Ramos, Jr.,
met plaintiff-appellant and her officemate named
Lydia in the vicinity of the San Juan de Dios
Hospital. The foursome then proceeded to (the)
aforesaid hospital's canteen where they had some
snacks. Later, Guillermo Ramos, Jr. took Lydia to
Quirino Avenue where she could get a ride home,
thereby leaving the defendant-appellant Bunag, Jr.
and plaintiff-appellant alone. According to
defendant-appellant Bunag, Jr., after Guillermo
Ramos, Jr. and Lydia left, he and plaintiff-appellant
took a taxi to the Golden Gate and Flamingo
Hotels where they tried to get a room, but these
were full. They finally got a room at the Holiday
Hotel, where defendant-appellant registered using
his real name and residence certificate number.
Three hours later, the couple check out of the
hotel and proceeded to the house of Juana de
Leon at Pamplona, Las Piñas, where they stayed
until September 19, 1873. Defendant-appellant
claims that bitter disagreements with the plaintiff-
appellant over money and the threats made to his
life prompted him to break off their plan to get
married.
During this period, defendant-appellant Bunag, Sr.
denied having gone to the house of Juan de Leon
and telling plaintiff-appellant that she would be
wed to defendant-appellant Bunag, Jr. In fact, he
phoned Atty. Conrado Adreneda, member of the
board of directors of Mandala Corporation,
defendant-appellant Bunag, Jr.'s employer, three
times between the evening of September 8, 1973
and September 9, 1973 inquiring as to the
whereabouts of his son. He came to know about
his son's whereabouts when he was told of the
couple's elopement late in the afternoon of
September 9, 1973 by his mother Candida
Gawaran. He likewise denied having met relatives
and emissaries of plaintiff-appellant and agreeing
to her marriage to his son. 3
A complaint for damages for alleged breach of promise to marry was
filed by herein private respondent Zenaida B. Cirilo against petitioner
Conrado Bunag, Jr. and his father, Conrado Bunag, Sr., as Civil Case
No. N-2028 of the Regional Trial Court, Branch XIX at Bacoor, Cavite.
On August 20, 1983, on a finding, inter alia, that petitioner had forcibly
abducted and raped private respondent, the trial court rendered a
decision 4 ordering petitioner Bunag, Jr. to pay private respondent
P80,000.00 as moral damages, P20,000.00 as exemplary damages,
P20,000.00 by way of temperate damages, and P10,000.00 for and as
attorney's fees, as well as the costs of suit. Defendant Conrado Bunag,
Sr. was absolved from any and all liability.
Private respondent appealed that portion of the lower court's decision
disculpating Conrado Bunag, Sr. from civil liability in this case. On the
other hand, the Bunags, as defendants-appellants, assigned in their
appeal several errors allegedly committed by trial court, which were
summarized by respondent court as follows: (1) in finding that
defendant-appellant Conrado Bunag, Jr. forcibly abducted and raped
plaintiff-appellant; (2) in finding that defendants-appellants promised
plaintiff-appellant that she would be wed to defendant-appellant
Conrado Bunag, Jr.; and (3) in awarding plaintiff-appellant damages for
the breach of defendants-appellants' promise of marriage. 5
As stated at the outset, on May 17, 1991 respondent Court of Appeals
rendered judgment dismissing both appeals and affirming in toto the
decision of the trial court. His motion for reconsideration having been
denied, petitioner Bunag, Jr. is before us on a petition for review,
contending that (1) respondent court failed to consider vital exhibits,
testimonies and incidents for petitioner's defense, resulting in the
misapprehensions of facts and violative of the law on preparation of
judgment; and (2) it erred in the application of the proper law and
jurisprudence by holding that there was forcible abduction with rape,
not just a simple elopement and an agreement to marry, and in the
award of excessive damages. 6
Petitioner Bunag, Jr. first contends that both the trial and appellate
courts failed to take into consideration the alleged fact that he and
private respondent had agreed to marry, and that there was no case of
forcible abduction with rape, but one of simple elopement and
agreement to marry. It is averred that the agreement to marry has been
sufficiently proven by the testimonies of the witnesses for both parties
and the exhibits presented in court.
This submission, therefore, clearly hinges on the credibility of the
witnesses and evidence presented by the parties and the weight
accorded thereto in the factual findings of the trial court and the Court
of Appeals. In effect, what petitioner would want this Court to do is to
evaluate and analyze anew the evidence, both testimonial and
documentary, presented before and calibrated by the trial court, and as
further meticulously reviewed and discussed by respondent court.
The issue raised primarily and ineluctably involves questions of fact.
We are, therefore, once again constrained to stress the well-
entrenched statutory and jurisprudential mandate that findings of fact of
the Court of Appeals are, as a rule, conclusive upon this Court. Only
questions of law, distinctly set forth, may be raised in a petition for
review on certiorari under Rule 45 of the Rules of Court, subject to
clearly settled exceptions in case law.
Our jurisdiction in cases brought to us from the Court of Appeals is
limited to reviewing and revising the errors of law imputed to the latter,
its findings of fact being conclusive. This Court has emphatically
declared that it is not its function to analyze or weigh such evidence all
over again, its jurisdiction being limited to reviewing errors of law that
might have been committed by the lower court. Barring, therefore, 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, such findings must stand, for this Court is
not expected or required to examine or contrast the oral and
documentary evidence submitted by the parties. 7 Neither does the
instant case reveal any feature falling within, any of the exceptions
which under our decisional rules may warrant a review of the factual
findings of the Court of Appeals. On the foregoing considerations and
our review of the records, we sustain the holding of respondent court in
favor of private respondent.
Petitioner likewise asserts that since action involves a breach of
promise to marry, the trial court erred in awarding damages.
It is true that in this jurisdiction, we adhere to the time-honored rule that
an action for breach of promise to marry has no standing in the civil
law, apart from the right to recover money or property advanced by the
plaintiff upon the faith of such promise. 8 Generally, therefore, a breach
of promise to marry per se is not actionable, except where the plaintiff
has actually incurred expenses for the wedding and the necessary
incidents thereof.
However, the award of moral damages is allowed in cases specified in
or analogous to those provided in Article 2219 of the Civil Code.
Correlatively, under Article 21 of said Code, in relation to paragraph 10
of said Article 2219, 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 moral damages. 9 Article 21 was
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, and is intended to vouchsafe
adequate legal remedy for that untold number of moral wrongs which is
impossible for human foresight to specifically provide for in the
statutes. 10
Under the circumstances obtaining in the case at bar, the acts of
petitioner in forcibly abducting private respondent and having carnal
knowledge with her against her will, and thereafter promising to marry
her in order to escape criminal liability, only to thereafter renege on
such promise after cohabiting with her for twenty-one days, irremissibly
constitute acts contrary to morals and good customs. These are
grossly insensate and reprehensible transgressions which indisputably
warrant and abundantly justify the award of moral and exemplary
damages, pursuant to Article 21 in relation to paragraphs 3 and 10,
Article 2219, and Article 2229 and 2234 of Civil Code.
Petitioner would, however, belabor the fact that said damages were
awarded by the trial court on the basis of a finding that he is guilty of
forcible abduction with rape, despite the prior dismissal of the
complaint therefor filed by private respondent with the Pasay City
Fiscal's Office.
Generally, the basis of civil liability from crime is the fundamental
postulate of our law that every person criminally liable for a felony is
also civilly liable. In other words, criminal liability will give rise to civil
liability ex delicto only if the same felonious act or omission results in
damage or injury to another and is the direct and proximate cause
thereof. 11 Hence, extinction of the penal action does not carry with it
the extinction of civil liability unless the extinction proceeds from a
declaration in a final judgment that the fact from which the civil might
arise did not exist. 12
In the instant case, the dismissal of the complaint for forcible abduction
with rape was by mere resolution of the fiscal at the preliminary
investigation stage. There is no declaration in a final judgment that the
fact from which the civil case might arise did not exist. Consequently,
the dismissal did not in any way affect the right of herein private
respondent to institute a civil action arising from the offense because
such preliminary dismissal of the penal action did not carry with it the
extinction of the civil action.
The reason most often given for this holding is that the two
proceedings involved are not between the same parties. Furthermore,
it has long been emphasized, with continuing validity up to now, that
there are different rules as to the competency of witnesses and the
quantum of evidence in criminal and civil proceedings. In a criminal
action, the State must prove its case by evidence which shows the guilt
of the accused beyond reasonable doubt, while in a civil action it is
sufficient for the plaintiff to sustain his cause by preponderance of
evidence only. 13 Thus, in Rillon, et al. vs. Rillon, 14 we stressed that it
is not now necessary that a criminal prosecution for rape be first
instituted and prosecuted to final judgment before a civil action based
on said offense in favor of the offended woman can likewise be
instituted and prosecuted to final judgment.
WHEREFORE, the petition is hereby DENIED for lack of merit, and the
assailed judgment and resolution are hereby AFFIRMED.
SO ORDERED.
POLO S. PANTALEON, Petitioner,
vs.
AMERICAN EXPRESS INTERNATIONAL, INC., Respondent.
DECISION
TINGA, J.:
The petitioner, lawyer Polo Pantaleon, his wife Julialinda, daughter
Anna Regina and son Adrian Roberto, joined an escorted tour of
Western Europe organized by Trafalgar Tours of Europe, Ltd., in
October of 1991. The tour group arrived in Amsterdam in the afternoon
of 25 October 1991, the second to the last day of the tour. As the group
had arrived late in the city, they failed to engage in any sight-seeing.
Instead, it was agreed upon that they would start early the next day to
see the entire city before ending the tour.
The following day, the last day of the tour, the group arrived at the
Coster Diamond House in Amsterdam around 10 minutes before 9:00
a.m. The group had agreed that the visit to Coster should end by 9:30
a.m. to allow enough time to take in a guided city tour of Amsterdam.
The group was ushered into Coster shortly before 9:00 a.m., and
listened to a lecture on the art of diamond polishing that lasted for
around ten minutes.1 Afterwards, the group was led to the store’s
showroom to allow them to select items for purchase. Mrs. Pantaleon
had already planned to purchase even before the tour began a 2.5
karat diamond brilliant cut, and she found a diamond close enough in
approximation that she decided to buy. 2 Mrs. Pantaleon also selected
for purchase a pendant and a chain, 3 all of which totaled U.S.
$13,826.00.
To pay for these purchases, Pantaleon presented his American
Express credit card together with his passport to the Coster sales clerk.
This occurred at around 9:15 a.m., or 15 minutes before the tour group
was slated to depart from the store. The sales clerk took the card’s
imprint, and asked Pantaleon to sign the charge slip. The charge
purchase was then referred electronically to respondent’s Amsterdam
office at 9:20 a.m.
Ten minutes later, the store clerk informed Pantaleon that his
AmexCard had not yet been approved. His son, who had already
boarded the tour bus, soon returned to Coster and informed the other
members of the Pantaleon family that the entire tour group was waiting
for them. As it was already 9:40 a.m., and he was already worried
about further inconveniencing the tour group, Pantaleon asked the
store clerk to cancel the sale. The store manager though asked plaintiff
to wait a few more minutes. After 15 minutes, the store manager
informed Pantaleon that respondent had demanded bank references.
Pantaleon supplied the names of his depositary banks, then instructed
his daughter to return to the bus and apologize to the tour group for the
delay.
At around 10:00 a.m, or around 45 minutes after Pantaleon had
presented his AmexCard, and 30 minutes after the tour group was
supposed to have left the store, Coster decided to release the items
even without respondent’s approval of the purchase. The spouses
Pantaleon returned to the bus. It is alleged that their offers of apology
were met by their tourmates with stony silence. 4 The tour group’s
visible irritation was aggravated when the tour guide announced that
the city tour of Amsterdam was to be canceled due to lack of remaining
time, as they had to catch a 3:00 p.m. ferry at Calais, Belgium to
London.5 Mrs. Pantaleon ended up weeping, while her husband had to
take a tranquilizer to calm his nerves.
It later emerged that Pantaleon’s purchase was first transmitted for
approval to respondent’s Amsterdam office at 9:20 a.m., Amsterdam
time, then referred to respondent’s Manila office at 9:33 a.m, then
finally approved at 10:19 a.m., Amsterdam time.6 The Approval Code
was transmitted to respondent’s Amsterdam office at 10:38 a.m.,
several minutes after petitioner had already left Coster, and 78 minutes
from the time the purchases were electronically transmitted by the
jewelry store to respondent’s Amsterdam office.
After the star-crossed tour had ended, the Pantaleon family proceeded
to the United States before returning to Manila on 12 November 1992.
While in the United States, Pantaleon continued to use his AmEx card,
several times without hassle or delay, but with two other incidents
similar to the Amsterdam brouhaha. On 30 October 1991, Pantaleon
purchased golf equipment amounting to US $1,475.00 using his AmEx
card, but he cancelled his credit card purchase and borrowed money
instead from a friend, after more than 30 minutes had transpired
without the purchase having been approved. On 3 November 1991,
Pantaleon used the card to purchase children’s shoes worth $87.00 at
a store in Boston, and it took 20 minutes before this transaction was
approved by respondent.
On 4 March 1992, after coming back to Manila, Pantaleon sent a letter 7
through counsel to the respondent, demanding an apology for the
"inconvenience, humiliation and embarrassment he and his family
thereby suffered" for respondent’s refusal to provide credit
authorization for the aforementioned purchases. 8 In response,
respondent sent a letter dated 24 March 1992, 9 stating among others
that the delay in authorizing the purchase from Coster was attributable
to the circumstance that the charged purchase of US $13,826.00 "was
out of the usual charge purchase pattern established." 10 Since
respondent refused to accede to Pantaleon’s demand for an apology,
the aggrieved cardholder instituted an action for damages with the
Regional Trial Court (RTC) of Makati City, Branch 145. 11 Pantaleon
prayed that he be awarded ₱2,000,000.00, as moral damages;
₱500,000.00, as exemplary damages; ₱100,000.00, as attorney’s fees;
and ₱50,000.00 as litigation expenses. 12
On 5 August 1996, the Makati City RTC rendered a decision 13 in favor
of Pantaleon, awarding him ₱500,000.00 as moral damages,
₱300,000.00 as exemplary damages, ₱100,000.00 as attorney’s fees,
and ₱85,233.01 as expenses of litigation. Respondent filed a Notice of
Appeal, while Pantaleon moved for partial reconsideration, praying that
the trial court award the increased amount of moral and exemplary
damages he had prayed for.14 The RTC denied Pantaleon’s motion for
partial reconsideration, and thereafter gave due course to respondent’s
Notice of Appeal.15
On 18 August 2006, the Court of Appeals rendered a decision 16
reversing the award of damages in favor of Pantaleon, holding that
respondent had not breached its obligations to petitioner. Hence, this
petition.
The key question is whether respondent, in connection with the
aforementioned transactions, had committed a breach of its obligations
to Pantaleon. In addition, Pantaleon submits that even assuming that
respondent had not been in breach of its obligations, it still remained
liable for damages under Article 21 of the Civil Code.
The RTC had concluded, based on the testimonial representations of
Pantaleon and respondent’s credit authorizer, Edgardo Jaurigue, that
the normal approval time for purchases was "a matter of seconds."
Based on that standard, respondent had been in clear delay with
respect to the three subject transactions. As it appears, the Court of
Appeals conceded that there had been delay on the part of respondent
in approving the purchases. However, it made two critical conclusions
in favor of respondent. First, the appellate court ruled that the delay
was not attended by bad faith, malice, or gross negligence. Second, it
ruled that respondent "had exercised diligent efforts to effect the
approval" of the purchases, which were "not in accordance with the
charge pattern" petitioner had established for himself, as exemplified
by the fact that at Coster, he was "making his very first single charge
purchase of US$13,826," and "the record of [petitioner]’s past spending
with [respondent] at the time does not favorably support his ability to
pay for such purchase."17
On the premise that there was an obligation on the part of respondent
"to approve or disapprove with dispatch the charge purchase,"
petitioner argues that the failure to timely approve or disapprove the
purchase constituted mora solvendi on the part of respondent in the
performance of its obligation. For its part, respondent characterizes the
depiction by petitioner of its obligation to him as "to approve purchases
instantaneously or in a matter of seconds."
Petitioner correctly cites that under mora solvendi, the three requisites
for a finding of default are that the obligation is demandable and
liquidated; the debtor delays performance; and the creditor judicially or
extrajudicially requires the debtor’s performance. 18 Petitioner asserts
that the Court of Appeals had wrongly applied the principle of mora
accipiendi, which relates to delay on the part of the obligee in
accepting the performance of the obligation by the obligor. The
requisites of mora accipiendi are: an offer of performance by the debtor
who has the required capacity; the offer must be to comply with the
prestation as it should be performed; and the creditor refuses the
performance without just cause.19 The error of the appellate court,
argues petitioner, is in relying on the invocation by respondent of "just
cause" for the delay, since while just cause is determinative of mora
accipiendi, it is not so with the case of mora solvendi.
We can see the possible source of confusion as to which type of mora
to appreciate. Generally, the relationship between a credit card
provider and its card holders is that of creditor-debtor, 20 with the card
company as the creditor extending loans and credit to the card holder,
who as debtor is obliged to repay the creditor. This relationship already
takes exception to the general rule that as between a bank and its
depositors, the bank is deemed as the debtor while the depositor is
considered as the creditor. 21 Petitioner is asking us, not baselessly, to
again shift perspectives and again see the credit card company as the
debtor/obligor, insofar as it has the obligation to the customer as
creditor/obligee to act promptly on its purchases on credit.
Ultimately, petitioner’s perspective appears more sensible than if we
were to still regard respondent as the creditor in the context of this
cause of action. If there was delay on the part of respondent in its
normal role as creditor to the cardholder, such delay would not have
been in the acceptance of the performance of the debtor’s obligation
(i.e., the repayment of the debt), but it would be delay in the extension
of the credit in the first place. Such delay would not fall under mora
accipiendi, which contemplates that the obligation of the debtor, such
as the actual purchases on credit, has already been constituted.
Herein, the establishment of the debt itself (purchases on credit of the
jewelry) had not yet been perfected, as it remained pending the
approval or consent of the respondent credit card company.
Still, in order for us to appreciate that respondent was in mora solvendi,
we will have to first recognize that there was indeed an obligation on
the part of respondent to act on petitioner’s purchases with "timely
dispatch," or for the purposes of this case, within a period significantly
less than the one hour it apparently took before the purchase at Coster
was finally approved.
The findings of the trial court, to our mind, amply established that the
tardiness on the part of respondent in acting on petitioner’s purchase at
Coster did constitute culpable delay on its part in complying with its
obligation to act promptly on its customer’s purchase request, whether
such action be favorable or unfavorable. We quote the trial court, thus:
As to the first issue, both parties have testified that normal approval
time for purchases was a matter of seconds.
Plaintiff testified that his personal experience with the use of the card
was that except for the three charge purchases subject of this case,
approvals of his charge purchases were always obtained in a matter of
seconds.
Defendant’s credit authorizer Edgardo Jaurique likewise testified:
Q. – You also testified that on normal occasions, the normal
approval time for charges would be 3 to 4 seconds?
A. – Yes, Ma’am.
Both parties likewise presented evidence that the processing and
approval of plaintiff’s charge purchase at the Coster Diamond House
was way beyond the normal approval time of a "matter of seconds".
Plaintiff testified that he presented his AmexCard to the sales clerk at
Coster, at 9:15 a.m. and by the time he had to leave the store at 10:05
a.m., no approval had yet been received. In fact, the Credit
Authorization System (CAS) record of defendant at Phoenix Amex
shows that defendant’s Amsterdam office received the request to
approve plaintiff’s charge purchase at 9:20 a.m., Amsterdam time or
01:20, Phoenix time, and that the defendant relayed its approval to
Coster at 10:38 a.m., Amsterdam time, or 2:38, Phoenix time, or a total
time lapse of one hour and [18] minutes. And even then, the approval
was conditional as it directed in computerese [sic] "Positive
Identification of Card holder necessary further charges require bank
information due to high exposure. By Jack Manila."
The delay in the processing is apparent to be undue as shown from the
frantic successive queries of Amexco Amsterdam which reads:
"US$13,826. Cardmember buying jewels. ID seen. Advise how long
will this take?" They were sent at 01:33, 01:37, 01:40, 01:45, 01:52 and
02:08, all times Phoenix. Manila Amexco could be unaware of the need
for speed in resolving the charge purchase referred to it, yet it sat on its
hand, unconcerned.
xxx
To repeat, the Credit Authorization System (CAS) record on the
Amsterdam transaction shows how Amexco Netherlands viewed the
delay as unusually frustrating. In sequence expressed in Phoenix time
from 01:20 when the charge purchased was referred for authorization,
defendants own record shows:
01:22 – the authorization is referred to Manila Amexco
01:32 – Netherlands gives information that the identification
of the cardmember has been presented and he is buying
jewelries worth US $13,826.
01:33 – Netherlands asks "How long will this take?"
02:08 – Netherlands is still asking "How long will this take?"
The Court is convinced that defendants delay constitute[s] breach of its
contractual obligation to act on his use of the card abroad "with special
handling."22 (Citations omitted)
xxx
Notwithstanding the popular notion that credit card purchases are
approved "within seconds," there really is no strict, legally
determinative point of demarcation on how long must it take for a credit
card company to approve or disapprove a customer’s purchase, much
less one specifically contracted upon by the parties. Yet this is one of
those instances when "you’d know it when you’d see it," and one hour
appears to be an awfully long, patently unreasonable length of time to
approve or disapprove a credit card purchase. It is long enough time
for the customer to walk to a bank a kilometer away, withdraw money
over the counter, and return to the store.
Notably, petitioner frames the obligation of respondent as "to approve
or disapprove" the purchase "in timely dispatch," and not "to approve
the purchase instantaneously or within seconds." Certainly, had
respondent disapproved petitioner’s purchase "within seconds" or
within a timely manner, this particular action would have never seen
the light of day. Petitioner and his family would have returned to the
bus without delay – internally humiliated perhaps over the rejection of
his card – yet spared the shame of being held accountable by newly-
made friends for making them miss the chance to tour the city of
Amsterdam.
We do not wish do dispute that respondent has the right, if not the
obligation, to verify whether the credit it is extending upon on a
particular purchase was indeed contracted by the cardholder, and that
the cardholder is within his means to make such transaction. The
culpable failure of respondent herein is not the failure to timely approve
petitioner’s purchase, but the more elemental failure to timely act on
the same, whether favorably or unfavorably. Even assuming that
respondent’s credit authorizers did not have sufficient basis on hand to
make a judgment, we see no reason why respondent could not have
promptly informed petitioner the reason for the delay, and duly advised
him that resolving the same could take some time. In that way,
petitioner would have had informed basis on whether or not to pursue
the transaction at Coster, given the attending circumstances. Instead,
petitioner was left uncomfortably dangling in the chilly autumn winds in
a foreign land and soon forced to confront the wrath of foreign folk.
Moral damages avail in cases of breach of contract where the
defendant acted fraudulently or in bad faith, and the court should find
that under the circumstances, such damages are due. The findings of
the trial court are ample in establishing the bad faith and unjustified
neglect of respondent, attributable in particular to the "dilly-dallying" of
respondent’s Manila credit authorizer, Edgardo Jaurique. 23 Wrote the
trial court:
While it is true that the Cardmembership Agreement, which defendant
prepared, is silent as to the amount of time it should take defendant to
grant authorization for a charge purchase, defendant acknowledged
that the normal time for approval should only be three to four seconds.
Specially so with cards used abroad which requires "special handling",
meaning with priority. Otherwise, the object of credit or charge cards
would be lost; it would be so inconvenient to use that buyers and
consumers would be better off carrying bundles of currency or
traveller’s checks, which can be delivered and accepted quickly. Such
right was not accorded to plaintiff in the instances complained off for
reasons known only to defendant at that time. This, to the Court’s
mind, amounts to a wanton and deliberate refusal to comply with its
contractual obligations, or at least abuse of its rights, under the
contract.24
xxx
The delay committed by defendant was clearly attended by unjustified
neglect and bad faith, since it alleges to have consumed more than
one hour to simply go over plaintiff’s past credit history with defendant,
his payment record and his credit and bank references, when all such
data are already stored and readily available from its computer. This
Court also takes note of the fact that there is nothing in plaintiff’s billing
history that would warrant the imprudent suspension of action by
defendant in processing the purchase. Defendant’s witness Jaurique
admits:
Q. – But did you discover that he did not have any
outstanding account?
A. – Nothing in arrears at that time.
Q. – You were well aware of this fact on this very date?
A. – Yes, sir.
Mr. Jaurique further testified that there were no "delinquencies" in
plaintiff’s account.25
It should be emphasized that the reason why petitioner is entitled to
damages is not simply because respondent incurred delay, but
because the delay, for which culpability lies under Article 1170, led to
the particular injuries under Article 2217 of the Civil Code for which
moral damages are remunerative. 26 Moral damages do not avail to
soothe the plaints of the simply impatient, so this decision should not
be cause for relief for those who time the length of their credit card
transactions with a stopwatch. The somewhat unusual attending
circumstances to the purchase at Coster – that there was a deadline
for the completion of that purchase by petitioner before any delay
would redound to the injury of his several traveling companions – gave
rise to the moral shock, mental anguish, serious anxiety, wounded
feelings and social humiliation sustained by the petitioner, as
concluded by the RTC.27 Those circumstances are fairly unusual, and
should not give rise to a general entitlement for damages under a more
mundane set of facts.
We sustain the amount of moral damages awarded to petitioner by the
RTC. There is no hard-and-fast rule in determining what would be a fair
and reasonable amount of moral damages, since each case must be
governed by its own peculiar facts, however, it must be commensurate
to the loss or injury suffered. 28 Petitioner’s original prayer for
₱5,000,000.00 for moral damages is excessive under the
circumstances, and the amount awarded by the trial court of
₱500,000.00 in moral damages more seemly.1avvphi1
Likewise, we deem exemplary damages available under the
circumstances, and the amount of ₱300,000.00 appropriate. There is
similarly no cause though to disturb the determined award of
₱100,000.00 as attorney’s fees, and ₱85,233.01 as expenses of
litigation.
WHEREFORE, the petition is GRANTED. The assailed Decision of the
Court of Appeals is REVERSED and SET ASIDE. The Decision of the
Regional Trial Court of Makati, Branch 145 in Civil Case No. 92-1665 is
hereby REINSTATED. Costs against respondent.
SO ORDERED.
LAND BANK OF THE PHILIPPINES, Petitioner,
vs.
ALFREDO ONG, Respondent.
DECISION
VELASCO, JR., J.:
This is an appeal from the October 20, 2009 Decision of the Court of
Appeals (CA) in CA-G.R. CR-CV No. 84445 entitled Alfredo Ong v.
Land Bank of the Philippines, which affirmed the Decision of the
Regional Trial Court (RTC), Branch 17 in Tabaco City.
The Facts
On March 18, 1996, spouses Johnson and Evangeline Sy secured a
loan from Land Bank Legazpi City in the amount of PhP 16 million. The
loan was secured by three (3) residential lots, five (5) cargo trucks, and
a warehouse. Under the loan agreement, PhP 6 million of the loan
would be short-term and would mature on February 28, 1997, while the
balance of PhP 10 million would be payable in seven (7) years. The
Notice of Loan Approval dated February 22, 1996 contained an
acceleration clause wherein any default in payment of amortizations or
other charges would accelerate the maturity of the loan. 1
Subsequently, however, the Spouses Sy found they could no longer
pay their loan. On December 9, 1996, they sold three (3) of their
mortgaged parcels of land for PhP 150,000 to Angelina Gloria Ong,
Evangeline’s mother, under a Deed of Sale with Assumption of
Mortgage. The relevant portion of the document 2 is quoted as follows:
WHEREAS, we are no longer in a position to settle our obligation with
the bank;
NOW THEREFORE, for and in consideration of the sum of ONE
HUNDRED FIFTY THOUSAND PESOS (P150,000.00) Philippine
Currency, we hereby these presents SELL, CEDE, TRANSFER and
CONVEY, by way of sale unto ANGELINA GLORIA ONG, also of legal
age, Filipino citizen, married to Alfredo Ong, and also a resident of
Tabaco, Albay, Philippines, their heirs and assigns, the above-
mentioned debt with the said LAND BANK OF THE PHILIPPINES, and
by reason hereof they can make the necessary representation with the
bank for the proper restructuring of the loan with the said bank in their
favor;
That as soon as our obligation has been duly settled, the bank is
authorized to release the mortgage in favor of the vendees and for this
purpose VENDEES can register this instrument with the Register of
Deeds for the issuance of the titles already in their names.
IN WITNESS WHEREOF, we have hereunto affixed our signatures this
9th day of December 1996 at Tabaco, Albay, Philippines.
(signed) (signed)
EVANGELINE O. SY JOHNSON B. SY
Vendor Vendor
Evangeline’s father, petitioner Alfredo Ong, later went to Land Bank to
inform it about the sale and assumption of mortgage. 3 Atty. Edna
Hingco, the Legazpi City Land Bank Branch Head, told Alfredo and his
counsel Atty. Ireneo de Lumen that there was nothing wrong with the
agreement with the Spouses Sy but provided them with requirements
for the assumption of mortgage. They were also told that Alfredo
should pay part of the principal which was computed at PhP 750,000
and to update due or accrued interests on the promissory notes so that
Atty. Hingco could easily approve the assumption of mortgage. Two
weeks later, Alfredo issued a check for PhP 750,000 and personally
gave it to Atty. Hingco. A receipt was issued for his payment. He also
submitted the other documents required by Land Bank, such as
financial statements for 1994 and 1995. Atty. Hingco then informed
Alfredo that the certificate of title of the Spouses Sy would be
transferred in his name but this never materialized. No notice of
transfer was sent to him.4
Alfredo later found out that his application for assumption of mortgage
was not approved by Land Bank. The bank learned from its credit
investigation report that the Ongs had a real estate mortgage in the
amount of PhP 18,300,000 with another bank that was past due.
Alfredo claimed that this was fully paid later on. Nonetheless, Land
Bank foreclosed the mortgage of the Spouses Sy after several months.
Alfredo only learned of the foreclosure when he saw the subject
mortgage properties included in a Notice of Foreclosure of Mortgage
and Auction Sale at the RTC in Tabaco, Albay. Alfredo’s other counsel,
Atty. Madrilejos, subsequently talked to Land Bank’s lawyer and was
told that the PhP 750,000 he paid would be returned to him.5
On December 12, 1997, Alfredo initiated an action for recovery of sum
of money with damages against Land Bank in Civil Case No. T-1941,
as Alfredo’s payment was not returned by Land Bank. Alfredo
maintained that Land Bank’s foreclosure without informing him of the
denial of his assumption of the mortgage was done in bad faith. He
argued that he was lured into believing that his payment of PhP
750,000 would cause Land Bank to approve his assumption of the loan
of the Spouses Sy and the transfer of the mortgaged properties in his
and his wife’s name.6 He also claimed incurring expenses for attorney’s
fees of PhP 150,000, filing fee of PhP 15,000, and PhP 250,000 in
moral damages.7
Testifying for Land Bank, Atty. Hingco claimed during trial that as
branch manager she had no authority to approve loans and could not
assure anybody that their assumption of mortgage would be approved.
She testified that the breakdown of Alfredo’s payment was as follows:
PhP 101,409.59 applied to principal
216,246.56 accrued interests receivable
396,571.77 interests
18,766.10 penalties
16,805.98 accounts receivable
----------------
Total: 750,000.00
According to Atty. Hingco, the bank processes an assumption of
mortgage as a new loan, since the new borrower is considered a new
client. They used character, capacity, capital, collateral, and conditions
in determining who can qualify to assume a loan. Alfredo’s proposal to
assume the loan, she explained, was referred to a separate office, the
Lending Center. 8
During cross-examination, Atty. Hingco testified that several months
after Alfredo made the tender of payment, she received word that the
Lending Center rejected Alfredo’s loan application. She stated that it
was the Lending Center and not her that should have informed Alfredo
about the denial of his and his wife’s assumption of mortgage. She
added that although she told Alfredo that the agreement between the
spouses Sy and Alfredo was valid between them and that the bank
would accept payments from him, Alfredo did not pay any further
amount so the foreclosure of the loan collaterals ensued. She admitted
that Alfredo demanded the return of the PhP 750,000 but said that
there was no written demand before the case against the bank was
filed in court. She said that Alfredo had made the payment of PhP
750,000 even before he applied for the assumption of mortgage and
that the bank received the said amount because the subject account
was past due and demandable; and the Deed of Assumption of
Mortgage was not used as the basis for the payment. 9
The Ruling of the Trial Court
The RTC held that the contract approving the assumption of mortgage
was not perfected as a result of the credit investigation conducted on
Alfredo. It noted that Alfredo was not even informed of the disapproval
of the assumption of mortgage but was just told that the accounts of
the spouses Sy had matured and gone unpaid. It ruled that under the
principle of equity and justice, the bank should return the amount
Alfredo had paid with interest at 12% per annum computed from the
filing of the complaint. The RTC further held that Alfredo was entitled to
attorney’s fees and litigation expenses for being compelled to litigate. 10
The dispositive portion of the RTC Decision reads:
WHEREFORE, premises considered, a decision is rendered, ordering
defendant bank to pay plaintiff, Alfredo Ong the amount of
P750,000.00 with interest at 12% per annum computed from Dec. 12,
1997 and attorney’s fees and litigation expenses of P50,000.00.
Costs against defendant bank.
SO ORDERED.11
The Ruling of the Appellate Court
On appeal, Land Bank faulted the trial court for (1) holding that the
payment of PhP 750,000 made by Ong was one of the requirements
for the approval of his proposal to assume the mortgage of the Sy
spouses; (2) erroneously ordering Land Bank to return the amount of
PhP 750,000 to Ong on the ground of its failure to effect novation; and
(3) erroneously affirming the award of PhP 50,000 to Ong as attorney’s
fees and litigation expenses.
The CA affirmed the RTC Decision. 12 It held that Alfredo’s recourse is
not against the Sy spouses. According to the appellate court, the
payment of PhP 750,000 was for the approval of his assumption of
mortgage and not for payment of arrears incurred by the Sy spouses.
As such, it ruled that it would be incorrect to consider Alfredo a third
person with no interest in the fulfillment of the obligation under Article
1236 of the Civil Code. Although Land Bank was not bound by the
Deed between Alfredo and the Spouses Sy, the appellate court found
that Alfredo and Land Bank’s active preparations for Alfredo’s
assumption of mortgage essentially novated the agreement.
On January 5, 2010, the CA denied Land Bank’s motion for
reconsideration for lack of merit. Hence, Land Bank appealed to us.
The Issues
I
Whether the Court of Appeals erred in holding that Art. 1236
of the Civil Code does not apply and in finding that there is
no novation.
II
Whether the Court of Appeals misconstrued the evidence
and the law when it affirmed the trial court decision’s
ordering Land Bank to pay Ong the amount of
Php750,000.00 with interest at 12% annum.
III
Whether the Court of Appeals committed reversible error
when it affirmed the award of Php50,000.00 to Ong as
attorney’s fees and expenses of litigation.
The Ruling of this Court
We affirm with modification the appealed decision.
Recourse is against Land Bank
Land Bank contends that Art. 1236 of the Civil Code backs their claim
that Alfredo should have sought recourse against the Spouses Sy
instead of Land Bank. Art. 1236 provides:
The creditor is not bound to accept payment or performance by a third
person who has no interest in the fulfillment of the obligation, unless
there is a stipulation to the contrary.
Whoever pays for another may demand from the debtor what he has
paid, except that if he paid without the knowledge or against the will of
the debtor, he can recover only insofar as the payment has been
beneficial to the debtor.1avvphi1
We agree with Land Bank on this point as to the first part of paragraph
1 of Art. 1236. Land Bank was not bound to accept Alfredo’s payment,
since as far as the former was concerned, he did not have an interest
in the payment of the loan of the Spouses Sy. However, in the context
of the second part of said paragraph, Alfredo was not making payment
to fulfill the obligation of the Spouses Sy. Alfredo made a conditional
payment so that the properties subject of the Deed of Sale with
Assumption of Mortgage would be titled in his name. It is clear from the
records that Land Bank required Alfredo to make payment before his
assumption of mortgage would be approved. He was informed that the
certificate of title would be transferred accordingly. He, thus, made
payment not as a debtor but as a prospective mortgagor. But the trial
court stated:
[T]he contract was not perfected or consummated because of the
adverse finding in the credit investigation which led to the disapproval
of the proposed assumption. There was no evidence presented that
plaintiff was informed of the disapproval. What he received was a letter
dated May 22, 1997 informing him that the account of spouses Sy had
matured but there [were] no payments. This was sent even before the
conduct of the credit investigation on June 20, 1997 which led to the
disapproval of the proposed assumption of the loans of spouses Sy.13
Alfredo, as a third person, did not, therefore, have an interest in the
fulfillment of the obligation of the Spouses Sy, since his interest hinged
on Land Bank’s approval of his application, which was denied. The
circumstances of the instant case show that the second paragraph of
Art. 1236 does not apply. As Alfredo made the payment for his own
interest and not on behalf of the Spouses Sy, recourse is not against
the latter. And as Alfredo was not paying for another, he cannot
demand from the debtors, the Spouses Sy, what he has paid.
Novation of the loan agreement
Land Bank also faults the CA for finding that novation applies to the
instant case. It reasons that a substitution of debtors was made without
its consent; thus, it was not bound to recognize the substitution under
the rules on novation.
On the matter of novation, Spouses Benjamin and Agrifina Lim v. M.B.
Finance Corporation14 provides the following discussion:
Novation, in its broad concept, may either be extinctive or modificatory.
It is extinctive when an old obligation is terminated by the creation of a
new obligation that takes the place of the former; it is merely
modificatory when the old obligation subsists to the extent it remains
compatible with the amendatory agreement. An extinctive novation
results either by changing the object or principal conditions (objective
or real), or by substituting the person of the debtor or subrogating a
third person in the rights of the creditor (subjective or personal). Under
this mode, novation would have dual functions ─ one to extinguish an
existing obligation, the other to substitute a new one in its place ─
requiring a conflux of four essential requisites: (1) a previous valid
obligation; (2) an agreement of all parties concerned to a new contract;
(3) the extinguishment of the old obligation; and (4) the birth of a valid
new obligation. x x x
In order that an obligation may be extinguished by another which
substitutes the same, it is imperative that it be so declared in
unequivocal terms, or that the old and the new obligations be on every
point incompatible with each other. The test of incompatibility is
whether or not the two obligations can stand together, each one having
its independent existence. x x x (Emphasis supplied.)
Furthermore, Art. 1293 of the Civil Code states:
Novation which consists in substituting a new debtor in the place of the
original one, may be made even without the knowledge or against the
will of the latter, but not without the consent of the creditor. Payment by
the new debtor gives him rights mentioned in articles 1236 and 1237.
We do not agree, then, with the CA in holding that there was a
novation in the contract between the parties. Not all the elements of
novation were present. Novation must be expressly consented to.
Moreover, the conflicting intention and acts of the parties underscore
the absence of any express disclosure or circumstances with which to
deduce a clear and unequivocal intent by the parties to novate the old
agreement.15 Land Bank is thus correct when it argues that there was
no novation in the following:
[W]hether or not Alfredo Ong has an interest in the obligation and
payment was made with the knowledge or consent of Spouses Sy, he
may still pay the obligation for the reason that even before he paid the
amount of P750,000.00 on January 31, 1997, the substitution of
debtors was already perfected by and between Spouses Sy and
Spouses Ong as evidenced by a Deed of Sale with Assumption of
Mortgage executed by them on December 9, 1996. And since the
substitution of debtors was made without the consent of Land Bank – a
requirement which is indispensable in order to effect a novation of the
obligation, it is therefore not bound to recognize the substitution of
debtors. Land Bank did not intervene in the contract between Spouses
Sy and Spouses Ong and did not expressly give its consent to this
substitution.16
Unjust enrichment
Land Bank maintains that the trial court erroneously applied the
principle of equity and justice in ordering it to return the PhP 750,000
paid by Alfredo. Alfredo was allegedly in bad faith and in estoppel.
Land Bank contends that it enjoyed the presumption of regularity and
was in good faith when it accepted Alfredo’s tender of PhP 750,000. It
reasons that it did not unduly enrich itself at Alfredo’s expense during
the foreclosure of the mortgaged properties, since it tendered its bid by
subtracting PhP 750,000 from the Spouses Sy’s outstanding loan
obligation. Alfredo’s recourse then, according to Land Bank, is to have
his payment reimbursed by the Spouses Sy.
We rule that Land Bank is still liable for the return of the PhP 750,000
based on the principle of unjust enrichment. Land Bank is correct in
arguing that it has no obligation as creditor to recognize Alfredo as a
person with interest in the fulfillment of the obligation. But while Land
Bank is not bound to accept the substitution of debtors in the subject
real estate mortgage, it is estopped by its action of accepting Alfredo’s
payment from arguing that it does not have to recognize Alfredo as the
new debtor. The elements of estoppel are:
First, the actor who usually must have knowledge, notice or suspicion
of the true facts, communicates something to another in a misleading
way, either by words, conduct or silence; second, the other in fact
relies, and relies reasonably or justifiably, upon that communication;
third, the other would be harmed materially if the actor is later
permitted to assert any claim inconsistent with his earlier conduct; and
fourth, the actor knows, expects or foresees that the other would act
upon the information given or that a reasonable person in the actor’s
position would expect or foresee such action.17
By accepting Alfredo’s payment and keeping silent on the status of
Alfredo’s application, Land Bank misled Alfredo to believe that he had
for all intents and purposes stepped into the shoes of the Spouses Sy.
The defense of Land Bank Legazpi City Branch Manager Atty. Hingco
that it was the bank’s Lending Center that should have notified Alfredo
of his assumption of mortgage disapproval is unavailing. The Lending
Center’s lack of notice of disapproval, the Tabaco Branch’s silence on
the disapproval, and the bank’s subsequent actions show a failure of
the bank as a whole, first, to notify Alfredo that he is not a recognized
debtor in the eyes of the bank; and second, to apprise him of how and
when he could collect on the payment that the bank no longer had a
right to keep.
We turn then on the principle upon which Land Bank must return
Alfredo’s payment. Unjust enrichment exists "when a person unjustly
retains a benefit to the loss of another, or when a person retains
money or property of another against the fundamental principles of
justice, equity and good conscience." 18 There is unjust enrichment
under Art. 22 of the Civil Code when (1) a person is unjustly benefited,
and (2) such benefit is derived at the expense of or with damages to
another.19
Additionally, unjust enrichment has been applied to actions called
accion in rem verso. In order that the accion in rem verso may prosper,
the following conditions must concur: (1) that the defendant has been
enriched; (2) that the plaintiff has suffered a loss; (3) that the
enrichment of the defendant is without just or legal ground; and (4) that
the plaintiff has no other action based on contract, quasi-contract,
crime, or quasi-delict.20 The principle of unjust enrichment essentially
contemplates payment when there is no duty to pay, and the person
who receives the payment has no right to receive it.21
The principle applies to the parties in the instant case, as, Alfredo,
having been deemed disqualified from assuming the loan, had no duty
to pay petitioner bank and the latter had no right to receive it.
Moreover, the Civil Code likewise requires under Art. 19 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." Land Bank, however, did not even bother to inform
Alfredo that it was no longer approving his assumption of the Spouses
Sy’s mortgage. Yet it acknowledged his interest in the loan when the
branch head of the bank wrote to tell him that his daughter’s loan had
not been paid.22 Land Bank made Alfredo believe that with the payment
of PhP 750,000, he would be able to assume the mortgage of the
Spouses Sy. The act of receiving payment without returning it when
demanded is contrary to the adage of giving someone what is due to
him. The outcome of the application would have been different had
Land Bank first conducted the credit investigation before accepting
Alfredo’s payment. He would have been notified that his assumption of
mortgage had been disapproved; and he would not have taken the
futile action of paying PhP 750,000. The procedure Land Bank took in
acting on Alfredo’s application cannot be said to have been fair and
proper.
As to the claim that the trial court erred in applying equity to Alfredo’s
case, we hold that Alfredo had no other remedy to recover from Land
Bank and the lower court properly exercised its equity jurisdiction in
resolving the collection suit. As we have held in one case:
Equity, as the complement of legal jurisdiction, seeks to reach and
complete justice where courts of law, through the inflexibility of their
rules and want of power to adapt their judgments to the special
circumstances of cases, are incompetent to do so. Equity regards the
spirit and not the letter, the intent and not the form, the substance
rather than the circumstance, as it is variously expressed by different
courts.23
Another claim made by Land Bank is the presumption of regularity it
enjoys and that it was in good faith when it accepted Alfredo’s tender of
PhP 750,000.
The defense of good faith fails to convince given Land Bank’s actions.
Alfredo was not treated as a mere prospective borrower. After he had
paid PhP 750,000, he was made to sign bank documents including a
promissory note and real estate mortgage. He was assured by Atty.
Hingco that the titles to the properties covered by the Spouses Sy’s
real estate mortgage would be transferred in his name, and upon
payment of the PhP 750,000, the account would be considered current
and renewed in his name.24
Land Bank posits as a defense that it did not unduly enrich itself at
Alfredo’s expense during the foreclosure of the mortgaged properties,
since it tendered its bid by subtracting PhP 750,000 from the Spouses
Sy’s outstanding loan obligation. It is observed that this is the first time
Land Bank is revealing this defense. However, issues, arguments,
theories, and causes not raised below may no longer be posed on
appeal.25 Land Bank’s contention, thus, cannot be entertained at this
point.1avvphi1
Land Bank further questions the lower court’s decision on the basis of
the inconsistencies made by Alfredo on the witness stand. It argues
that Alfredo was not a credible witness and his testimony failed to
overcome the presumption of regularity in the performance of regular
duties on the part of Land Bank.
This claim, however, touches on factual findings by the trial court, and
we defer to these findings of the trial court as sustained by the
appellate court. These are generally binding on us. While there are
exceptions to this rule, Land Bank has not satisfactorily shown that any
of them is applicable to this issue. 26 Hence, the rule that the trial court
is in a unique position to observe the demeanor of witnesses should be
applied and respected27 in the instant case.
In sum, we hold that Land Bank may not keep the PhP 750,000 paid by
Alfredo as it had already foreclosed on the mortgaged lands.
Interest and attorney’s fees
As to the applicable interest rate, we reiterate the guidelines found in
Eastern Shipping Lines, Inc. v. Court of Appeals: 28
II. With regard particularly to an award of interest in the concept of
actual and compensatory damages, the rate of interest, as well as the
accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the
payment of a sum of money, i.e., a loan or forbearance of
money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall itself
earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 12%
per annum to be computed from default, i.e., from judicial or
extrajudicial demand under and subject to the provisions of
Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance
of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the
court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages except
when or until the demand can be established with
reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin
to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand
is made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the
quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on the
amount finally adjudged.
3. When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest,
whether the case falls under paragraph 1 or paragraph 2,
above, shall be 12% per annum from such finality until its
satisfaction, this interim period being deemed to be by then
an equivalent to a forbearance of credit.
No evidence was presented by Alfredo that he had sent a written
demand to Land Bank before he filed the collection suit. Only the
verbal agreement between the lawyers of the parties on the return of
the payment was mentioned.29 Consequently, the obligation of Land
Bank to return the payment made by Alfredo upon the former’s denial
of the latter’s application for assumption of mortgage must be reckoned
from the date of judicial demand on December 12, 1997, as correctly
determined by the trial court and affirmed by the appellate court.
The next question is the propriety of the imposition of interest and the
proper imposable rate of applicable interest. The RTC granted the rate
of 12% per annum which was affirmed by the CA. From the above-
quoted guidelines, however, the proper imposable interest rate is 6%
per annum pursuant to Art. 2209 of the Civil Code. Sunga-Chan v.
Court of Appeals is illuminating in this regard:
In Reformina v. Tomol, Jr., the Court held that the legal interest at 12%
per annum under Central Bank (CB) Circular No. 416 shall be
adjudged only in cases involving the loan or forbearance of money.
And for transactions involving payment of indemnities in the
concept of damages arising from default in the performance of
obligations in general and/or for money judgment not involving a loan
or forbearance of money, goods, or credit, the governing provision is
Art. 2209 of the Civil Code prescribing a yearly 6% interest. Art. 2209
pertinently provides:
Art. 2209. If the obligation consists in the payment of a sum of
money, and the debtor incurs in delay, the indemnity for damages,
there being no stipulation to the contrary, shall be the payment of the
interest agreed upon, and in the absence of stipulation, the legal
interest, which is six per cent per annum.
The term "forbearance," within the context of usury law, has been
described as a contractual obligation of a lender or creditor to refrain,
during a given period of time, from requiring the borrower or debtor to
repay the loan or debt then due and payable.
Eastern Shipping Lines, Inc. synthesized the rules on the imposition of
interest, if proper, and the applicable rate, as follows: The 12% per
annum rate under CB Circular No. 416 shall apply only to loans or
forbearance of money, goods, or credits, as well as to judgments
involving such loan or forbearance of money, goods, or credit, while
the 6% per annum under Art. 2209 of the Civil Code applies "when
the transaction involves the payment of indemnities in the
concept of damage arising from the breach or a delay in the
performance of obligations in general," with the application of both
rates reckoned "from the time the complaint was filed until the
[adjudged] amount is fully paid." In either instance, the reckoning
period for the commencement of the running of the legal interest shall
be subject to the condition "that the courts are vested with discretion,
depending on the equities of each case, on the award of interest." 30
(Emphasis supplied.)
Based on our ruling above, forbearance of money refers to the
contractual obligation of the lender or creditor to desist for a fixed
period from requiring the borrower or debtor to repay the loan or debt
then due and for which 12% per annum is imposed as interest in the
absence of a stipulated rate. In the instant case, Alfredo’s conditional
payment to Land Bank does not constitute forbearance of money,
since there was no agreement or obligation for Alfredo to pay Land
Bank the amount of PhP 750,000, and the obligation of Land Bank to
return what Alfredo has conditionally paid is still in dispute and has not
yet been determined. Thus, it cannot be said that Land Bank’s alleged
obligation has become a forbearance of money.
On the award of attorney’s fees, attorney’s fees and expenses of
litigation were awarded because Alfredo was compelled to litigate due
to the unjust refusal of Land Bank to refund the amount he paid. There
are instances when it is just and equitable to award attorney’s fees and
expenses of litigation.31 Art. 2208 of the Civil Code pertinently states:
In the absence of stipulation, attorney’s fees and expenses of litigation,
other than judicial costs, cannot be recovered, except:
xxxx
(2) When the defendant’s act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest.
Given that Alfredo was indeed compelled to litigate against Land Bank
and incur expenses to protect his interest, we find that the award falls
under the exception above and is, thus, proper given the
circumstances.
On a final note. The instant case would not have been litigated had
Land Bank been more circumspect in dealing with Alfredo. The bank
chose to accept payment from Alfredo even before a credit
investigation was underway, a procedure worsened by the failure to
even inform him of his credit standing’s impact on his assumption of
mortgage. It was, therefore, negligent to a certain degree in handling
the transaction with Alfredo. It should be remembered that the
business of a bank is affected with public interest and it should observe
a higher standard of diligence when dealing with the public.32
WHEREFORE, the appeal is DENIED. The CA Decision in CA-G.R.
CR-CV No. 84445 is AFFIRMED with MODIFICATION in that the
amount of PhP 750,000 will earn interest at 6% per annum reckoned
from December 12, 1997, and the total aggregate monetary awards will
in turn earn 12% per annum from the finality of this Decision until fully
paid.
SO ORDERED.
SHINRYO (PHILIPPINES) COMPANY, INC., Petitioner,
vs.
RRN INCORPORATED,* Respondent.
DECISION
PERALTA, J.:
This resolves the Petition for Review on Certiorari under Rule 45 of the
Rules of Court, praying that the Decision 1 of the Court of Appeals (CA)
dated February 22, 2006, affirming the Decision of the Construction
Industry Arbitration Commission (CIAC), and the CA Resolution 2 dated
April 26, 2006, denying herein petitioner's motion for reconsideration,
be reversed and set aside.
The facts, as accurately narrated in the CA Decision, are as follows.
Petitioner Shinryo (Philippines) Company, Inc. (hereinafter petitioner) is
a domestic corporation organized under Philippine laws. Private
respondent RRN Incorporated (hereinafter respondent) is likewise a
domestic corporation organized under Philippine laws.
Respondent filed a claim for arbitration against petitioner before CIAC
for recovery of unpaid account which consists of unpaid portions of the
sub-contract, variations and unused materials in the total sum of
₱5,275,184.17 and legal interest in the amount of ₱442,014.73.
Petitioner filed a counterclaim for overpayment in the amount of
₱2,512,997.96.
The parties admitted several facts before the CIAC. It was shown that
petitioner and respondent executed an Agreement and Conditions of
Sub-contract (hereafter Agreement signed on June 11, 1996 and June
14, 1996, respectively. Respondent signified its willingness to accept
and perform for petitioner in any of its projects, a part or the whole of
the works more particularly described in Conditions of Sub-Contract
and other Sub-contract documents.
On June 11, 2002, the parties executed a "Supply of Manpower,
Tools/Equipment, Consumables for the Electrical Works-Power and
Equipment Supply, Bus Duct Installation" for the Phillip Morris
Greenfield Project (hereafter Project) covered by Purchase Order Nos.
4501200300-000274 and 4501200300-000275 amounting to
₱15,724,000.00 and ₱9,276,000.00 respectively, or a total amount of
₱25,000,000.00. The parties also agreed that respondent will perform
variation orders in the Project. In connection with the Project, petitioner
supplied manpower chargeable against respondent.
Respondent was not able to finish the entire works with petitioner due
to financial difficulties. Petitioner paid respondent a total amount of
₱26,547,624.76. On June 25, 2005 [should read 2003], respondent,
through its former counsel sent a letter to petitioner demanding for the
payment of its unpaid balance amounting to ₱5,275,184.17. Petitioner
claimed material back charges in the amount of ₱4,063,633.43. On
September 26, 2003, respondent only acknowledged ₱2,371,895.33 as
material back charges. Thereafter, on October 16, 2003, respondent
sent another letter to petitioner for them to meet and settle their
dispute.
On January 8, 2004, respondent sent another letter to petitioner
regarding the cost of equipment rental and the use of scaffolding.
Thereafter, on August 12, 2004, petitioner sent a letter to respondent
denying any unpaid account and the failure in their negotiations for
amicable settlement.
On September 3, 2004, respondent, through its new counsel, advised
petitioner of their intention to submit the matter to arbitration.
Thereafter, their dispute was submitted to arbitration. During the
preliminary conference, the parties agreed in their Terms of Reference
to resolve eight issues, to wit:
1. What should be the basis in evaluating the variation cost?
1.1 How much is the variation cost?
2. Is the Respondent (petitioner in the instant case) justified
in charging claimant (herein respondent) the equipment
rental fee and for the use of the scaffoldings? If so, how
much should be charged to Claimant?
3. What should be the basis in evaluating the total cost of
materials supplied by Respondent to the Project which is
chargeable to Claimant?
3.1 How much is the total cost of materials supply
chargeable to Claimant?
4. How much is the value of the remaining works left undone
by the Claimant in the project?
5. Is the Claimant's claim for inventory of excess materials
valid? If so, how much is the value thereof?
6. Is the Respondent entitled to its claim for an overpayment
in the amount of ₱2,512,997.96?
7. Is Claimant entitled to its claim for interest? If so, how
much?
8. Who between the parties shall bear the cost of
Arbitration?
The CIAC rendered the assailed decision after the presentation of the
parties' evidence. [The dispositive portion of said decision reads as
follows:
WHEREFORE, judgment is hereby rendered in favor of the claimant
and respondent is ordered to pay claimant its unpaid account in the
sum of ₱3,728,960.54 plus legal interest of 6% reckoned from June 25,
2003 up to the filing of the case on October 11, 2004 and 12% of
₱3,728,960.54 from the finality of the judgment until fully paid and
arbitration cost of ₱104,333.82 representing claimant's share of the
arbitration cost which respondent should reimburse.
SO ORDERED.]
Petitioner accepts the ruling of the CIAC only in Issue No. 1 and Sub-
Issue No. 1.1 and in Issue No. 2 in so far as the amount of
₱440,000.00 awarded as back charges for the use of scaffoldings. x x
x3
On February 22, 2006, the CA promulgated the assailed Decision
affirming the decision of the CIAC. The CA upheld the CIAC ruling that
petitioner failed to adduce sufficient proof that the parties had an
agreement regarding charges for respondent's use of the manlift. As to
the other charges for materials, the CA held that the evidence on
record amply supports the CIAC findings. Petitioner moved for
reconsideration of said ruling, but the same was denied per Resolution
dated April 26, 2006.
Hence, this petition where it is alleged that:
I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE
REVERSIBLE ERROR WHEN IT DENIED PETITIONER'S CLAIM
FOR MANLIFT EQUIPMENT RENTAL IN THE AMOUNT OF
₱511,000.00 DESPITE EVIDENCE ON RECORD THAT
RESPONDENT RRN ACTUALLY USED AND BENEFITED FROM
THE MANLIFT EQUIPMENT.
II. IN RENDERING THE QUESTIONED DECISION AND
QUESTIONED RESOLUTION, THE HONORABLE COURT OF
APPEALS HAS DECIDED A QUESTION OF SUBSTANCE NOT IN
ACCORD WITH LAW AND/OR WITH THE APPLICABLE DECISIONS
OF THE HONORABLE SUPREME COURT.
III. THE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE
ERROR IN AFFIRMING THE CIAC AWARD FOR THE VALUE OF
INVENTORIED MATERIALS CONSIDERING THAT:
A. RESPONDENT RRN ADMITTED THE VALIDITY OF THE
DEDUCTIONS ON ACCOUNT OF MATERIAL SUPPLY,
WHICH INCLUDED THE INVENTORIED MATERIALS.
B. RESPONDENT RRN HAS NO BASIS TO CLAIM
BECAUSE ENGR. BONIFACIO ADMITTED THAT
RESPONDENT RRN FAILED TO ESTABLISH WHETHER
THE MATERIALS CAME FROM RESPONDENT RRN OR
FROM PETITIONER AND THAT IT WAS PETITIONER
THAT ACTUALLY INSTALLED THE SAID MATERIALS AS
PART OF REMAINING WORKS THAT PETITIONER TOOK
OVER FROM RESPONDENT RRN.
C. THE CLAIM FOR THE VALUE OF INVENTORIED
MATERIALS IS A DOUBLE CLAIM OR DOUBLE ENTRY
BECAUSE IN THE COMPUTATION OF THE FINAL
ACCOUNT, RESPONDENT RRN WAS CREDITED THE
FULL CONTRACT PRICE AND THE COST OF
VARIATIONS, WHICH INCLUDED THE INVENTORIED
MATERIALS.
IV. IN RENDERING THE QUESTIONED DECISION AND
QUESTIONED RESOLUTION, THE COURT OF APPEALS
COMMITTED A GRAVE REVERSIBLE ERROR IN THAT IT
COMPLETELY DISREGARDED THE PROVISION OF THE
SUBCONTRACT, WHICH ALLOWED PAYMENT OF ACTUAL COST
INCURRED BY PETITIONER IN COMPLETING THE REMAINING
WORKS THAT PRIVATE RESPONDENT ADMITTEDLY FAILED TO
COMPLETE.
V. THE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE
ERROR WHEN IT COMPLETELY DISREGARDED THE EVIDENCE
ON ACTUAL COST INCURRED BY PETITIONER IN COMPLETING
THE REMAINING WORKS.
VI. THE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE
ERROR WHEN IT AFFIRMED THE CIAC AWARD FOR INTERESTS
AND ARBITRATION COSTS IN FAVOR OF RESPONDENT RRN. 4
The petition is bereft of merit.
Despite petitioner's attempts to make it appear that it is advancing
questions of law, it is quite clear that what petitioner seeks is for this
Court to recalibrate the evidence it has presented before the CIAC. It
insists that its evidence sufficiently proves that it is entitled to payment
for respondent's use of its manlift equipment, and even absent proof of
the supposed agreement on the charges petitioner may impose on
respondent for the use of said equipment, respondent should be made
to pay based on the principle of unjust enrichment. Petitioner also
questions the amounts awarded by the CIAC for inventoried materials,
and costs incurred by petitioner for completing the work left unfinished
by respondent.
As reiterated by the Court in IBEX International, Inc. v. Government
Service Insurance System,5 to wit:
It is settled that findings of fact of quasi-judicial bodies, which have
acquired expertise because their jurisdiction is confined to
specific matters, are generally accorded not only respect, but also
finality, especially when affirmed by the Court of Appeals. In
particular, factual findings of construction arbitrators are final and
conclusive and not reviewable by this Court on appeal.
This rule, however, admits of certain exceptions. In Uniwide Sales
Realty and Resources Corporation v. Titan-Ikeda Construction and
Development Corporation, we said:
In David v. Construction Industry and Arbitration Commission, we ruled
that, as exceptions, factual findings of construction arbitrators may be
reviewed by this Court when the petitioner proves affirmatively that: (1)
the award was procured by corruption, fraud or other undue means; (2)
there was evident partiality or corruption of the arbitrators or any of
them; (3) the arbitrators were guilty of misconduct in refusing to hear
evidence pertinent and material to the controversy; (4) one or more of
the arbitrators were disqualified to act as such under Section nine of
Republic Act No. 876 and willfully refrained from disclosing such
disqualifications or of any other misbehavior by which the rights of any
party have been materially prejudiced; or (5) the arbitrators exceeded
their powers, or so imperfectly executed them, that a mutual, final and
definite award upon the subject matter submitted to them was not
made.1avvp++i1
Other recognized exceptions are as follows: (1) when there is a very
clear showing of grave abuse of discretion resulting in lack or loss of
jurisdiction as when a party was deprived of a fair opportunity to
present its position before the Arbitral Tribunal or when an award is
obtained through fraud or the corruption of arbitrators, (2) when the
findings of the Court of Appeals are contrary to those of the CIAC, and
(3) when a party is deprived of administrative due process.6
A perusal of the records would reveal that none of the aforementioned
circumstances, which would justify exemption of this case from the
general rule, are present here. Such being the case, the Court, not
being a trier of facts, is not duty-bound to examine, appraise and
analyze anew the evidence presented before the arbitration body.7
Petitioner's reliance on the principle of unjust enrichment is likewise
misplaced. The ruling of the Court in University of the Philippines v.
Philab Industries, Inc.8 is highly instructive, thus:
Unjust enrichment claims do not lie simply because one party benefits
from the efforts or obligations of others, but instead it must be shown
that a party was unjustly enriched in the sense that the term unjustly
could mean illegally or unlawfully.
Moreover, to substantiate a claim for unjust enrichment, the claimant
must unequivocally prove that another party knowingly received
something of value to which he was not entitled and that the state of
affairs are such that it would be unjust for the person to keep the
benefit. Unjust enrichment is a term used to depict result or effect of
failure to make remuneration of or for property or benefits received
under circumstances that give rise to legal or equitable obligation to
account for them; to be entitled to remuneration, one must confer
benefit by mistake, fraud, coercion, or request. Unjust enrichment is
not itself a theory of reconvey. Rather, it is a prerequisite for the
enforcement of the doctrine of restitution.
Article 22 of the New Civil Code reads:
Every person who, through an act of performance by another, or any
other means, acquires or comes into possession of something at the
expense of the latter without just or legal ground, shall return the same
to him.
In order that accion in rem verso may prosper, the essential elements
must be present: (1) that the defendant has been enriched, (2) that the
plaintiff has suffered a loss, (3) that the enrichment of the defendant is
without just or legal ground, and (4) that the plaintiff has no other action
based on contract, quasi-contract, crime or quasi-delict.
An accion in rem verso is considered merely an auxiliary action,
available only when there is no other remedy on contract, quasi-
contract, crime, and quasi-delict. If there is an obtainable action under
any other institution of positive law, that action must be resorted to, and
the principle of accion in rem verso will not lie.9
As found by both the CIAC and affirmed by the CA, petitioner failed to
prove that respondent's free use of the manlift was without legal
ground based on the provisions of their contract. Thus, the third
requisite, i.e., that the enrichment of respondent is without just or legal
ground, is missing. In addition, petitioner's claim is based on contract,
hence, the fourth requisite − that the plaintiff has no other action based
on contract, quasi-contract, crime or quasi-delict − is also absent.
Clearly, the principle of unjust enrichment is not applicable in this case.
The other issues raised by petitioner all boil down to whether the CIAC
or the CA erred in rejecting its claims for costs of some materials.
Again, these issues are purely factual and cannot be properly
addressed in this petition for review on certiorari. In Hanjin Heavy
Industries and Construction Co., Ltd. v. Dynamic Planners and
Construction Corp.,10 it was emphasized that mathematical
computations, the propriety of arbitral awards, claims for "other costs"
and "abandonment" are factual questions. Since the discussions of the
CIAC and the CA in their respective Decisions show that its factual
findings are supported by substantial evidence, there is no reason why
this Court should not accord finality to said findings. Verily, to accede
to petitioner's request for a recalibration of its evidence, which had
been thoroughly studied by both the CIAC and the CA would result in
negating the objective of Executive Order No. 1008, which created an
arbitration body to ensure the prompt and efficient settlement of
disputes in the construction industry. Thus, the Court held in Uniwide
Sales Realty and Resources Corporation v. Titan-Ikeda Construction
and Development Corporation,11 that:
x x x The Court will not review the factual findings of an arbitral tribunal
upon the artful allegation that such body had "misapprehended facts"
and will not pass upon issues which are, at bottom, issues of fact, no
matter how cleverly disguised they might be as "legal questions." The
parties here had recourse to arbitration and chose the arbitrators
themselves; they must have had confidence in such arbitrators. The
Court will not, therefore, permit the parties to relitigate before it the
issues of facts previously presented and argued before the Arbitral
Tribunal, save only where a clear showing is made that, in reaching its
factual conclusions, the Arbitral Tribunal committed an error so
egregious and hurtful to one party as to constitute a grave abuse of
discretion resulting in lack or loss of jurisdiction. 12
As discussed above, there is nothing in the records that point to any
grave abuse of discretion committed by the CIAC.
The awards for interests and arbitration costs are, likewise, correct as
they are in keeping with prevailing jurisprudence.13
IN VIEW OF THE FOREGOING, the Petition is DENIED. The Decision
of the Court of Appeals dated February 22, 2006 and its Resolution
dated April 26, 2006 are AFFIRMED.
SO ORDERED.
IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA
BUENAVENTURA MULLER, Petitioner,
vs.
HELMUT MULLER, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari 1 assails the February 26, 2001
Decision 2 of the Court of Appeals in CA-G.R. CV No. 59321 affirming
with modification the August 12, 1996 Decision 3 of the Regional Trial
Court of Quezon City, Branch 86 in Civil Case No. Q-94-21862, which
terminated the regime of absolute community of property between
petitioner and respondent, as well as the Resolution 4 dated August 13,
2001 denying the motion for reconsideration.
The facts are as follows:
Petitioner Elena Buenaventura Muller and respondent Helmut Muller
were married in Hamburg, Germany on September 22, 1989. The
couple resided in Germany at a house owned by respondent’s parents
but decided to move and reside permanently in the Philippines in 1992.
By this time, respondent had inherited the house in Germany from his
parents which he sold and used the proceeds for the purchase of a
parcel of land in Antipolo, Rizal at the cost of P528,000.00 and the
construction of a house amounting to P2,300,000.00. The Antipolo
property was registered in the name of petitioner under Transfer
Certificate of Title No. 219438 5 of the Register of Deeds of Marikina,
Metro Manila.
Due to incompatibilities and respondent’s alleged womanizing,
drinking, and maltreatment, the spouses eventually separated. On
September 26, 1994, respondent filed a petition 6 for separation of
properties before the Regional Trial Court of Quezon City.
On August 12, 1996, the trial court rendered a decision which
terminated the regime of absolute community of property between the
petitioner and respondent. It also decreed the separation of properties
between them and ordered the equal partition of personal properties
located within the country, excluding those acquired by gratuitous title
during the marriage. With regard to the Antipolo property, the court
held that it was acquired using paraphernal funds of the respondent.
However, it ruled that respondent cannot recover his funds because
the property was purchased in violation of Section 7, Article XII of the
Constitution. Thus –
However, pursuant to Article 92 of the Family Code, properties
acquired by gratuitous title by either spouse during the marriage shall
be excluded from the community property. The real property, therefore,
inherited by petitioner in Germany is excluded from the absolute
community of property of the herein spouses. Necessarily, the
proceeds of the sale of said real property as well as the personal
properties purchased thereby, belong exclusively to the petitioner.
However, the part of that inheritance used by the petitioner for
acquiring the house and lot in this country cannot be recovered by the
petitioner, its acquisition being a violation of Section 7, Article XII of the
Constitution which provides that "save in cases of hereditary
succession, no private lands shall be transferred or conveyed except to
individuals, corporations or associations qualified to acquire or hold
lands of the public domain." The law will leave the parties in the
situation where they are in without prejudice to a voluntary partition by
the parties of the said real property. x x x
xxxx
As regards the property covered by Transfer Certificate of Title No.
219438 of the Registry of Deeds of Marikina, Metro Manila, situated in
Antipolo, Rizal and the improvements thereon, the Court shall not
make any pronouncement on constitutional grounds. 7
Respondent appealed to the Court of Appeals which rendered the
assailed decision modifying the trial court’s Decision. It held that
respondent merely prayed for reimbursement for the purchase of the
Antipolo property, and not acquisition or transfer of ownership to him. It
also considered petitioner’s ownership over the property in trust for the
respondent. As regards the house, the Court of Appeals ruled that
there is nothing in the Constitution which prohibits respondent from
acquiring the same. The dispositive portion of the assailed decision
reads:
WHEREFORE, in view of the foregoing, the Decision of the lower court
dated August 12, 1996 is hereby MODIFIED. Respondent Elena
Buenaventura Muller is hereby ordered to REIMBURSE the petitioner
the amount of P528,000.00 for the acquisition of the land and the
amount of P2,300,000.00 for the construction of the house situated in
Atnipolo, Rizal, deducting therefrom the amount respondent spent for
the preservation, maintenance and development of the aforesaid real
property including the depreciation cost of the house or in the
alternative to SELL the house and lot in the event respondent does not
have the means to reimburse the petitioner out of her own money and
from the proceeds thereof, reimburse the petitioner of the cost of the
land and the house deducting the expenses for its maintenance and
preservation spent by the respondent. Should there be profit, the same
shall be divided in proportion to the equity each has over the property.
The case is REMANDED to the lower court for reception of evidence
as to the amount claimed by the respondents for the preservation and
maintenance of the property.
SO ORDERED. 8
Hence, the instant petition for review raising the following issues:
I respondent. Save for the exception provided in cases of hereditary
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT THE RESPONDENT HEREIN IS ENTITLED TO
REIMBURSEMENT OF THE AMOUNT USED TO PURCHASE THE
LAND AS WELL AS THE COSTS FOR THE CONSTRUCTION OF
THE HOUSE, FOR IN SO RULING, IT INDIRECTLY ALLOWED AN
ACT DONE WHICH OTHERWISE COULD NOT BE DIRECTLY x x x
DONE, WITHOUT DOING VIOLENCE TO THE CONSTITUTIONAL
PROSCRIPTION THAT AN ALIEN IS PROHIBITED FROM
ACQUIRING OWNERSHIP OF REAL PROPERTIES LOCATED IN
THE PHILIPPINES.
II
THE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING
RESPONDENT’S CAUSE OF ACTION WHICH IS ACTUALLY A
DESPERATE ATTEMPT TO OBTAIN OWNERSHIP OVER THE LOT
IN QUESTION, CLOTHED UNDER THE GUISE OF CLAIMING
REIMBURSEMENT.
Petitioner contends that respondent, being an alien, is disqualified to
own private lands in the Philippines; that respondent was aware of the
constitutional prohibition but circumvented the same; and that
respondent’s purpose for filing an action for separation of property is to
obtain exclusive possession, control and disposition of the Antipolo
property.
Respondent claims that he is not praying for transfer of ownership of
the Antipolo property but merely reimbursement; that the funds paid by
him for the said property were in consideration of his marriage to
petitioner; that the funds were given to petitioner in trust; and that
equity demands that respondent should be reimbursed of his personal
funds.
The issue for resolution is whether respondent is entitled to
reimbursement of the funds used for the acquisition of the Antipolo
property.
The petition has merit.
Section 7, Article XII of the 1987 Constitution states:
Save in cases of hereditary succession, no private lands shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.
Aliens, whether individuals or corporations, are disqualified from
acquiring lands of the public domain. Hence, they are also disqualified
from acquiring private lands. 9 The primary purpose of the
constitutional provision is the conservation of the national patrimony. In
the case of Krivenko v. Register of Deeds, 10 the Court held:
Under section 1 of Article XIII of the Constitution, "natural resources,
with the exception of public agricultural land, shall not be alienated,"
and with respect to public agricultural lands, their alienation is limited to
Filipino citizens. But this constitutional purpose conserving agricultural
resources in the hands of Filipino citizens may easily be defeated by
the Filipino citizens themselves who may alienate their agricultural
lands in favor of aliens. It is partly to prevent this result that section 5 is
included in Article XIII, and it reads as follows:
"Sec. 5. Save in cases of hereditary succession, no private agricultural
land will be transferred or assigned except to individuals, corporations,
or associations qualified to acquire or hold lands of the public domain
in the Philippines."
This constitutional provision closes the only remaining avenue through
which agricultural resources may leak into aliens’ hands. It would
certainly be futile to prohibit the alienation of public agricultural lands to
aliens if, after all, they may be freely so alienated upon their becoming
private agricultural lands in the hands of Filipino citizens. x x x
xxxx
If the term "private agricultural lands" is to be construed as not
including residential lots or lands not strictly agricultural, the result
would be that "aliens may freely acquire and possess not only
residential lots and houses for themselves but entire subdivisions, and
whole towns and cities," and that "they may validly buy and hold in
their names lands of any area for building homes, factories, industrial
plants, fisheries, hatcheries, schools, health and vacation resorts,
markets, golf courses, playgrounds, airfields, and a host of other uses
and purposes that are not, in appellant’s words, strictly agricultural."
(Solicitor General’s Brief, p. 6.) That this is obnoxious to the
conservative spirit of the Constitution is beyond question.
Respondent was aware of the constitutional prohibition and expressly
admitted his knowledge thereof to this Court. 11 He declared that he
had the Antipolo property titled in the name of petitioner because of the
said prohibition. 12 His attempt at subsequently asserting or claiming a
right on the said property cannot be sustained.
The Court of Appeals erred in holding that an implied trust was created
and resulted by operation of law in view of petitioner’s marriage to
succession, respondent’s disqualification from owning lands in the
Philippines is absolute. Not even an ownership in trust is allowed.
Besides, where the purchase is made in violation of an existing statute
and in evasion of its express provision, no trust can result in favor of
the party who is guilty of the fraud. 13 To hold otherwise would allow
circumvention of the constitutional prohibition.
Invoking the principle that a court is not only a court of law but also a
court of equity, is likewise misplaced. It has been held that equity as a
rule will follow the law and will not permit that to be done indirectly
which, because of public policy, cannot be done directly. 14 He who
seeks equity must do equity, and he who comes into equity must come
with clean hands. The latter is a frequently stated maxim which is also
expressed in the principle that he who has done inequity shall not have
equity. It signifies that a litigant may be denied relief by a court of
equity on the ground that his conduct has been inequitable, unfair and
dishonest, or fraudulent, or deceitful as to the controversy in issue. 15
Thus, in the instant case, respondent cannot seek reimbursement on
the ground of equity where it is clear that he willingly and knowingly
bought the property despite the constitutional prohibition.
Further, the distinction made between transfer of ownership as
opposed to recovery of funds is a futile exercise on respondent’s part.
To allow reimbursement would in effect permit respondent to enjoy the
fruits of a property which he is not allowed to own. Thus, it is likewise
proscribed by law. As expressly held in Cheesman v. Intermediate
Appellate Court: 16
Finally, the fundamental law prohibits the sale to aliens of residential
land. Section 14, Article XIV of the 1973 Constitution ordains that,
"Save in cases of hereditary succession, no private land shall be
transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain."
Petitioner Thomas Cheesman was, of course, charged with knowledge
of this prohibition. Thus, assuming that it was his intention that the lot
in question be purchased by him and his wife, he acquired no right
whatever over the property by virtue of that purchase; and in
attempting to acquire a right or interest in land, vicariously and
clandestinely, he knowingly violated the Constitution; the sale as to him
was null and void. In any event, he had and has no capacity or
personality to question the subsequent sale of the same property by
his wife on the theory that in so doing he is merely exercising the
prerogative of a husband in respect of conjugal property. To sustain
such a theory would permit indirect controversion of the constitutional
prohibition. If the property were to be declared conjugal, this would
accord to the alien husband a not insubstantial interest and right over
land, as he would then have a decisive vote as to its transfer or
disposition. This is a right that the Constitution does not permit him to
have.
As already observed, the finding that his wife had used her own money
to purchase the property cannot, and will not, at this stage of the
proceedings be reviewed and overturned. But even if it were a fact that
said wife had used conjugal funds to make the acquisition, the
considerations just set out to militate, on high constitutional grounds,
against his recovering and holding the property so acquired, or any
part thereof. And whether in such an event, he may recover from his
wife any share of the money used for the purchase or charge her with
unauthorized disposition or expenditure of conjugal funds is not now
inquired into; that would be, in the premises, a purely academic
exercise. (Emphasis added)
WHEREFORE, in view of the foregoing, the instant petition is
GRANTED. The Decision dated February 26, 2001 of the Court of
Appeals in CA-G.R. CV No. 59321 ordering petitioner Elena
Buenaventura Muller to reimburse respondent Helmut Muller the
amount of P528,000 for the acquisition of the land and the amount of
P2,300,000 for the construction of the house in Antipolo City, and the
Resolution dated August 13, 2001 denying reconsideration thereof, are
REVERSED and SET ASIDE. The August 12, 1996 Decision of the
Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-94-
21862 terminating the regime of absolute community between the
petitioner and respondent, decreeing a separation of property between
them and ordering the partition of the personal properties located in the
Philippines equally, is REINSTATED.
SO ORDERED.
SPOUSES BILL AND VICTORIA HING, Petitioners,
vs.
ALEXANDER CHOACHUY, SR. and ALLAN CHOACHUY,
Respondents.
DECISION
DEL CASTILLO, J.:
"The concept of liberty would be emasculated if it does not likewise
compel respect for one's personality as a unique individual whose
claim to privacy and non-interference demands respect."1
This Petition for Review on Certiorari2 under Rule 45 of the Rules of
Court assails the July 10, 2007 Decision3 and the September 11, 2007
Resolution4 of the Court of Appeals (CA) in CA-G.R. CEB-SP No.
01473.
Factual Antecedents
On August 23, 2005, petitioner-spouses Bill and Victoria Hing filed with
the Regional Trial Court (RTC) of Mandaue City a Complaint 5 for
Injunction and Damages with prayer for issuance of a Writ of
Preliminary Mandatory Injunction/Temporary Restraining Order (TRO),
docketed as Civil Case MAN-5223 and raffled to Branch 28, against
respondents Alexander Choachuy, Sr. and Allan Choachuy.
Petitioners alleged that they are the registered owners of a parcel of
land (Lot 1900-B) covered by Transfer Certificate of Title (TCT) No.
42817 situated in Barangay Basak, City of Mandaue, Cebu; 6 that
respondents are the owners of Aldo Development & Resources, Inc.
(Aldo) located at Lots 1901 and 1900-C, adjacent to the property of
petitioners;7 that respondents constructed an auto-repair shop building
(Aldo Goodyear Servitec) on Lot 1900-C; that in April 2005, Aldo filed a
case against petitioners for Injunction and Damages with Writ of
Preliminary Injunction/TRO, docketed as Civil Case No. MAN-5125; 8
that in that case, Aldo claimed that petitioners were constructing a
fence without a valid permit and that the said construction would
destroy the wall of its building, which is adjacent to petitioners’
property;9 that the court, in that case, denied Aldo’s application for
preliminary injunction for failure to substantiate its allegations; 10 that, in
order to get evidence to support the said case, respondents on June
13, 2005 illegally set-up and installed on the building of Aldo Goodyear
Servitec two video surveillance cameras facing petitioners’ property; 11
that respondents, through their employees and without the consent of
petitioners, also took pictures of petitioners’ on-going construction; 12
and that the acts of respondents violate petitioners’ right to privacy. 13
Thus, petitioners prayed that respondents be ordered to remove the
video surveillance cameras and enjoined from conducting illegal
surveillance.14
In their Answer with Counterclaim, 15 respondents claimed that they did
not install the video surveillance cameras, 16 nor did they order their
employees to take pictures of petitioners’ construction. 17 They also
clarified that they are not the owners of Aldo but are mere
stockholders.18
Ruling of the Regional Trial Court
On October 18, 2005, the RTC issued an Order 19 granting the
application for a TRO. The dispositive portion of the said Order reads:
WHEREFORE, the application for a Temporary Restraining Order or a
Writ of Preliminary Injunction is granted. Upon the filing and approval of
a bond by petitioners, which the Court sets at ₱50,000.00, let a Writ of
Preliminary Injunction issue against the respondents Alexander
Choachuy, Sr. and Allan Choachuy. They are hereby directed to
immediately remove the revolving camera that they installed at the left
side of their building overlooking the side of petitioners’ lot and to
transfer and operate it elsewhere at the back where petitioners’
property can no longer be viewed within a distance of about 2-3 meters
from the left corner of Aldo Servitec, facing the road.
IT IS SO ORDERED.20
Respondents moved for a reconsideration 21 but the RTC denied the
same in its Order22 dated February 6, 2006.23 Thus:
WHEREFORE, the Motion for Reconsideration is hereby DENIED for
lack of merit. Issue a Writ of Preliminary Injunction in consonance with
the Order dated 18 October 2005.
IT IS SO ORDERED.24
Aggrieved, respondents filed with the CA a Petition for Certiorari 25
under Rule 65 of the Rules of Court with application for a TRO and/or
Writ of Preliminary Injunction.
Ruling of the Court of Appeals
On July 10, 2007, the CA issued its Decision 26 granting the Petition for
Certiorari. The CA ruled that the Writ of Preliminary Injunction was
issued with grave abuse of discretion because petitioners failed to
show a clear and unmistakable right to an injunctive writ. 27 The CA
explained that the right to privacy of residence under Article 26(1) of
the Civil Code was not violated since the property subject of the
controversy is not used as a residence.28 The CA alsosaid that since
respondents are not the owners of the building, they could not have
installed video surveillance cameras. 29 They are mere stockholders of
Aldo, which has a separate juridical personality. 30 Thus, they are not
the proper parties.31 The fallo reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby
rendered by us GRANTING the petition filed in this case. The assailed
orders dated October 18, 2005 and February 6, 2006 issued by the
respondent judge are hereby ANNULLED and SET ASIDE.
SO ORDERED.32
Issues
Hence, this recourse by petitioners arguing that:
I.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT
ANNULLED AND SET ASIDE THE ORDERS OF THE RTC DATED 18
OCTOBER 2005 AND 6 FEBRUARY 2006 HOLDING THAT THEY
WERE ISSUED WITH GRAVE ABUSE OF DISCRETION.
II.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT
RULED THAT PETITIONER SPOUSES HING ARE NOT ENTITLED
TO THE WRIT OF PRELIMINARY INJUNCTION ON THE GROUND
THAT THERE IS NO VIOLATION OF THEIR CONSTITUTIONAL AND
CIVIL RIGHT TO PRIVACY DESPITE THE FACTUAL FINDINGS OF
THE RTC, WHICH RESPONDENTS CHOACHUY FAILED TO
REFUTE, THAT THE ILLEGALLY INSTALLED SURVEILLANCE
CAMERAS OF RESPONDENTS CHOACH[U]Y WOULD CAPTURE
THE PRIVATE ACTIVITIES OF PETITIONER SPOUSES HING,
THEIR CHILDREN AND EMPLOYEES.
III.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT
RULED THAT SINCE THE OWNER OF THE BUILDING IS ALDO
DEVELOPMENT AND RESOURCES, INC. THEN TO SUE
RESPONDENTS CHOACHUY CONSTITUTES A PURPORTEDLY
UNWARRANTED PIERCING OF THE CORPORATE VEIL.
IV.
THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT
IGNORED THE SERIOUS FORMAL DEFICIENCIES OF BOTH THE
PETITION AND THE MOTION FOR RECONSIDERATION DATED 15
MARCH 2006 OF RESPONDENTS CHOACHUY AND GAVE X X X
THEM DUE COURSE AND CONSIDERATION. 33
Essentially, the issues boil down to (1) whether there is a violation of
petitioners’ right to privacy, and (2) whether respondents are the proper
parties to this suit.
Petitioners’ Arguments
Petitioners insist that they are entitled to the issuance of a Writ of
Preliminary Injunction because respondents’ installation of a stationary
camera directly facing petitioners’ property and a revolving camera
covering a significant portion of the same property constitutes a
violation of petitioners’ right to privacy.34 Petitioners cite Article 26(1) of
the Civil Code, which enjoins persons from prying into the private lives
of others.35 Although the said provision pertains to the privacy of
another’s residence, petitioners opine that it includes business offices,
citing Professor Arturo M. Tolentino. 36 Thus, even assuming arguendo
that petitioners’ property is used for business, it is still covered by the
said provision.37
As to whether respondents are the proper parties to implead in this
case, petitioners claim that respondents and Aldo are one and the
same, and that respondents only want to hide behind Aldo’s corporate
fiction.38 They point out that if respondents are not the real owners of
the building, where the video surveillance cameras were installed, then
they had no business consenting to the ocular inspection conducted by
the court.39
Respondents’ Arguments
Respondents, on the other hand, echo the ruling of the CA that
petitioners cannot invoke their right to privacy since the property
involved is not used as a residence. 40 Respondents maintain that they
had nothing to do with the installation of the video surveillance
cameras as these were installed by Aldo, the registered owner of the
building,41 as additional security for its building. 42 Hence, they were
wrongfully impleaded in this case. 43
Our Ruling
The Petition is meritorious.
The right to privacy is the right to be let alone.
The right to privacy is enshrined in our Constitution 44 and in our laws. It
is defined as "the right to be free from unwarranted exploitation of
one’s person or from intrusion into one’s private activities in such a way
as to cause humiliation to a person’s ordinary sensibilities." 45 It is the
right of an individual "to be free from unwarranted publicity, or to live
without unwarranted interference by the public in matters in which the
public is not necessarily concerned." 46 Simply put, the right to privacy is
"the right to be let alone."47
The Bill of Rights guarantees the people’s right to privacy and protects
them against the State’s abuse of power. In this regard, the State
recognizes the right of the people to be secure in their houses. No one,
not even the State, except "in case of overriding social need and then
only under the stringent procedural safeguards," can disturb them in
the privacy of their homes.48
The right to privacy under Article 26(1)
of the Civil Code covers business offices
where the public are excluded
therefrom and only certain individuals
are allowed to enter.
Article 26(1) of the Civil Code, on the other hand, protects an
individual’s right to privacy and provides a legal remedy against abuses
that may be committed against him by other individuals. It states:
Art. 26. Every person shall respect the dignity, personality, privacy and
peace of mind of his neighbors and other persons. The following and
similar acts, though they may not constitute a criminal offense, shall
produce a cause of action for damages, prevention and other relief:
(1) Prying into the privacy of another’s residence;
xxxx
This provision recognizes that a man’s house is his castle, where his
right to privacy cannot be denied or even restricted by others. It
includes "any act of intrusion into, peeping or peering inquisitively into
the residence of another without the consent of the latter." 49 The
phrase "prying into the privacy of another’s residence," however, does
not mean that only the residence is entitled to privacy. As elucidated by
Civil law expert Arturo M. Tolentino:
Our Code specifically mentions "prying into the privacy of another’s
residence." This does not mean, however, that only the residence is
entitled to privacy, because the law covers also "similar acts." A
business office is entitled to the same privacy when the public is
excluded therefrom and only such individuals as are allowed to enter
may come in. x x x50 (Emphasis supplied)
Thus, an individual’s right to privacy under Article 26(1) of the Civil
Code should not be confined to his house or residence as it may
extend to places where he has the right to exclude the public or deny
them access. The phrase "prying into the privacy of another’s
residence," therefore, covers places, locations, or even situations
which an individual considers as private. And as long as his right is
recognized by society, other individuals may not infringe on his right to
privacy. The CA, therefore, erred in limiting the application of Article
26(1) of the Civil Code only to residences.
The "reasonable expectation of
privacy" test is used to determine
whether there is a violation of the right
to privacy.
In ascertaining whether there is a violation of the right to privacy, courts
use the "reasonable expectation of privacy" test. This test determines
whether a person has a reasonable expectation of privacy and whether
the expectation has been violated. 51 In Ople v. Torres, 52 we enunciated
that "the reasonableness of a person’s expectation of privacy depends
on a two-part test: (1) whether, by his conduct, the individual has
exhibited an expectation of privacy; and (2) this expectation is one that
society recognizes as reasonable." Customs, community norms, and
practices may, therefore, limit or extend an individual’s "reasonable
expectation of privacy."53 Hence, the reasonableness of a person’s
expectation of privacy must be determined on a case-to-case basis
since it depends on the factual circumstances surrounding the case. 54
In this day and age, video surveillance cameras are installed practically
everywhere for the protection and safety of everyone. The installation
of these cameras, however, should not cover places where there is
reasonable expectation of privacy, unless the consent of the individual,
whose right to privacy would be affected, was obtained. Nor should
these cameras be used to pry into the privacy of another’s residence or
business office as it would be no different from eavesdropping, which is
a crime under Republic Act No. 4200 or the Anti-Wiretapping Law.
In this case, the RTC, in granting the application for Preliminary
Injunction, ruled that:
After careful consideration, there is basis to grant the application for a
temporary restraining order. The operation by respondents of a
revolving camera, even if it were mounted on their building, violated the
right of privacy of petitioners, who are the owners of the adjacent lot.
The camera does not only focus on respondents’ property or the roof of
the factory at the back (Aldo Development and Resources, Inc.) but it
actually spans through a good portion of the land of petitioners.
Based on the ocular inspection, the Court understands why petitioner
Hing was so unyielding in asserting that the revolving camera was set
up deliberately to monitor the on[-]going construction in his property.
The monitor showed only a portion of the roof of the factory of Aldo. If
the purpose of respondents in setting up a camera at the back is to
secure the building and factory premises, then the camera should
revolve only towards their properties at the back. Respondents’ camera
cannot be made to extend the view to petitioners’ lot. To allow the
respondents to do that over the objection of the petitioners would
violate the right of petitioners as property owners. "The owner of a
thing cannot make use thereof in such a manner as to injure the rights
of a third person."55
The RTC, thus, considered that petitioners have a "reasonable
expectation of privacy" in their property, whether they use it as a
business office or as a residence and that the installation of video
surveillance cameras directly facing petitioners’ property or covering a
significant portion thereof, without their consent, is a clear violation of
their right to privacy. As we see then, the issuance of a preliminary
injunction was justified. We need not belabor that the issuance of a
preliminary injunction is discretionary on the part of the court taking
cognizance of the case and should not be interfered with, unless there
is grave abuse of discretion committed by the court. 56 Here, there is no
indication of any grave abuse of discretion. Hence, the CA erred in
finding that petitioners are not entitled to an injunctive writ.
This brings us to the next question: whether respondents are the
proper parties to this suit.
A real party defendant is one who has a
correlative legal obligation to redress a
wrong done to the plaintiff by reason of
the defendant's act or omission which
had violated the legal right of the
former.
Section 2, Rule 3 of the Rules of Court provides:
SEC. 2. Parties-in-interest. — A real party-in-interest is the party who
stands to be benefited or injured by the judgment in the suit, or the
party entitled to the avails of the suit. Unless otherwise authorized by
law or these Rules, every action must be prosecuted or defended in
the name of the real party-in-interest.
A real party defendant is "one who has a correlative legal obligation to
redress a wrong done to the plaintiff by reason of the defendant’s act
or omission which had violated the legal right of the former."57
In ruling that respondents are not the proper parties, the CA reasoned
that since they do not own the building, they could not have installed
the video surveillance cameras. 58 Such reasoning, however, is
erroneous. The fact that respondents are not the registered owners of
the building does not automatically mean that they did not cause the
installation of the video surveillance cameras.
In their Complaint, petitioners claimed that respondents installed the
video surveillance cameras in order to fish for evidence, which could
be used against petitioners in another case. 59 During the hearing of the
application for Preliminary Injunction, petitioner Bill testified that when
respondents installed the video surveillance cameras, he immediately
broached his concerns but they did not seem to care, 60 and thus, he
reported the matter to the barangay for mediation, and eventually, filed
a Complaint against respondents before the RTC. 61 He also admitted
that as early as 1998 there has already been a dispute between his
family and the Choachuy family concerning the boundaries of their
respective properties.62 With these factual circumstances in mind, we
believe that respondents are the proper parties to be impleaded.
Moreover, although Aldo has a juridical personality separate and
distinct from its stockholders, records show that it is a family-owned
corporation managed by the Choachuy family.63
Also quite telling is the fact that respondents, notwithstanding their
claim that they are not owners of the building, allowed the court to
enter the compound of Aldo and conduct an ocular inspection. The
counsel for respondents even toured Judge Marilyn Lagura-Yap inside
the building and answered all her questions regarding the set-up and
installation of the video surveillance cameras.64 And when respondents
moved for reconsideration of the Order dated October 18, 2005 of the
RTC, one of the arguments they raised is that Aldo would suffer
damages if the video surveillance cameras are removed and
transferred.65 Noticeably, in these instances, the personalities of
respondents and Aldo seem to merge.
All these taken together lead us to the inevitable conclusion that
respondents are merely using the corporate fiction of Aldo as a shield
to protect themselves from this suit. In view of the foregoing, we find
that respondents are the proper parties to this suit.
WHEREFORE, the Petition is hereby GRANTED. The Decision dated
July 10, 2007 and the Resolution dated September 11, 2007 of the
Court of Appeals in CA-G.R. CEB-SP No. 01473 are hereby
REVERSED and SET ASIDE. The Orders dated October 18,2005 and
February 6, 200[6] of Branch 28 of the Regional Trial Court of
Mandaue City in Civil Case No. MAN-5223 are hereby REINSTATED
and AFFIRMED.
SO ORDERED.
NESTOR N. PADALHIN and ANNIE PADALHIN, Petitioners,
vs.
NELSON D. LAVINA, Respondent.
RESOLUTION
REYES, J.:
For review is the Decision1 rendered on February 14, 2008 and
Resolution2 issued on May 20, 2008 by the Court of Appeals (CA) in
CA-G.R. CV No. 81810. The CA affirmed, albeit with modification
relative to the award of attorney's fees, the Decision3 rendered on
October 3, 2003 by the Regional Trial Court (RTC), Pasig City, Branch
165, which ordered herein petitioner Nestor Padalhin (Nestor), to pay
herein respondent Nelson D. Lavina (Lavina) the total amount of
P775,000.00 as damages.
Antecedent Facts
Laviña and Nestor were both Filipino diplomats assigned in Kenya as
Ambassador and Consul General, respectively.
In the course of their stay in Kenya, the residence of Laviña was raided
twice. Prior to the raids, Bienvenido Pasturan4 (Pasturan) delivered
messages to the Filipino household helpers in the ambassador’s
residence instructing them to allow the entry of an officer who would
come to take photographs of the ivory souvenirs kept therein.
The first raid on April 18, 1996 was conducted while Laviña and his
wife were attending a diplomatic dinner hosted by the Indian High
Commission. Lucy Ercolano Muthua, who was connected with the
Criminal Investigation Division’s Intelligence Office of Kenya and David
Menza, an officer in the Digirie Police Station in Nairobi, participated in
the raid. Photographs of the first and second floors of Laviña’s
residence were taken with the aid of James Mbatia,5 Juma Kalama,6
Zenaida Cabando7 (Cabando), and Edna Palao8 (Palao). The second
raid was conducted on April 23, 1996 during which occasion, the
ambassador and his spouse were once again not present and
additional photographs of the residence were taken.
On September 27, 1996, Laviña received an information from the
Department of Foreign Affairs (DFA) in Manila that an investigating
team was to be sent to Nairobi to inquire into the complaints filed
against him by the employees of the Philippine Embassy in Kenya, on
one hand, and his own complaint against the spouses Padalhin, on the
other. The investigating team was led by Rosario G. Manalo (Manalo)
and had Franklin M. Ebdalin (Ebdalin) and Maria Theresa Dizon
(Dizon) as members. The team stayed in Kenya from April 20, 1997 to
April 30, 1997. On April 29, 1997, the team entered Laviña’s residence
unarmed with a search warrant, court order or letter from the DFA
Secretary. Laviña alleged that in the course of the inspection, the team
destroyed cabinet locks, damaged furnitures and took three sets of
carved ivory tusks.
Subsequently, both Nestor and Laviña were recalled from their posts in
Kenya.
On November 17, 1997, Laviña filed before the RTC a complaint for
damages against Nestor and his wife, petitioner Annie Padalhin
(Annie) Palao, Cabando, Manalo, Ebdalin and Dizon. On July 6, 1998,
Laviña amended his complaint to include Pasturan as a defendant.
Laviña’s complaint alleged the following causes of action, to wit: (a)
affront against his privacy and the sanctity and inviolability of his
diplomatic residence during the two raids conducted by the Kenyan
officials, supposedly instigated by Padalhin and participated by all the
defendants as conspirators; (b) infringement of his constitutional rights
against illegal searches and seizures when the investigating team sent
by the DFA entered into his residence without a warrant, court order or
letter from the DFA Secretary and confiscated some of his personal
belongings; and (c) bad faith, malice and deceit exhibited by the
defendants, including Padalhin, in conspiring on the conduct of the
raids, engaging in a smear campaign against him, and seizing without
authority his personal effects. Laviña sought payment of actual, moral,
exemplary and nominal damages, attorney’s fees and costs of suits.
In the course of the trial, Nestor denied any involvement in the raids
conducted on Laviña’s residence. As counterclaims, he alleged that the
suit filed by Laviña caused him embarasssment and sleepless nights,
as well as unnecessary expenses which he incurred to defend himself
against the charges. On the other hand, Annie denied prior knowledge
of and participation in the raids.
On February 24, 2000, the RTC, upon oral motion of Laviña’s counsel
informing the court that a settlement had been reached, dismissed the
charges against Palao, Cabando, Manalo, Ebdalin and Dizon. As a
consequence, the RTC deemed it proper to no longer resolve the
claims of Laviña relative to the alleged seizure of his personal effects
by the DFA investigating team. Laviña pursued his charges against
Nestor, Annie and Pasturan.
The Ruling of the RTC
On October 3, 2003, the RTC rendered a Decision9 ordering Nestor to
pay Laviña P500,000.00 as moral damages, P50,000.00 as nominal
damages, P75,000.00 as exemplary damages, P150,000.00 as
attorney’s fees and litigation expenses, and costs of suit for the
former’s participation in the raid conducted in the Ambassador’s
residence on April 18, 1996. The RTC ruled that:
Defendant Nestor N. Padalhin admitted in his sworn statement dated
October 10, 1997 which was subscribed and sworn to on October 13,
1997 before the Executive Director Benito B. Valeriano, Office of
Personnel and Administrative Services of the Department of Foreign
Affairs, that he caused the taking of pictures of the raw elephant tusks
in the official residence of the ambassador (Exh. "B"). x x x.
xxxx
The said affidavit was submitted by Nestor Padalhin in answer to the
administrative charge filed against him by then Secretary of the
Department of Foreign Affairs Domingo L. Siazon, Jr. in connection
with the violation of the diplomatic immunity of the residence of the
Philippine
Ambassador to Kenya on April 18, 1996. x x x.
xxxx
When Nestor Padalhin was presented by the plaintiff as hostile
witness, he affirmed the truth of the contents of his affidavit marked as
Exhibit "B". x x x.
It is therefore clear that the taking of the pictures of the elephant tusks
inside the residence of Ambassador Nelson Laviña while the latter and
his wife were out and attending a diplomatic function, was upon order
of Nestor Padalhin to his driver James Mbatia with the cooperation of
Juma Kalama, a gardener in the ambassador’s residence. The
admission of defendant Nestor Padalhin that he was the one who
caused the taking of the pictures of the elephant tusks in the official
residence of Ambassador Laviña in effect corroborates the latter’s
testimony that it was Nestor Padalhin who masterminded the invasion
and violation of the privacy and inviolability of his diplomatic residence
in Kenya on April 18, 1996.
The invasion of the diplomatic residence of the plaintiff in Kenya and
the taking of photographs of the premises and the elephant tusks
inside the residence upon order of defendant Nestor Padalhin without
the knowledge and consent of the plaintiff were done by the said
defendant in bad faith. The intention to malign the plaintiff is shown by
the fact that Nestor Padalhin even went to the Kenyan Ministry of
Foreign Affairs and reported the raw elephant tusks of Ambassador
Laviña as admitted in paragraph 2.a of his affidavit marked as Exhibit
"B".
This incident reached not only the Ministry of Foreign Affairs of Kenya
but also the Filipino community in Kenya, the Department of Foreign
Affairs in Manila and the circle of friends of plaintiff. As a result, plaintiff
felt insulted, betrayed, depressed and even feared for his life because
the intelligence and local police were involved in this incident. Plaintiff
suffered humiliation, sleepless nights, serious anxiety, besmirched
reputation and wounded feeling.
The admission of defendant Nestor Padalhin in his affidavit (Exh. "B")
regarding the first cause of action is binding upon him only but cannot
bind his co-defendants Annie Padalhin and Bienvenido Pasturan who
were not included in the administrative case where the affidavit of
Nestor Padalhin was submitted.
The affidavits of plaintiff’s maids Zenaida Cabando and Edna Palao
who implicated Annie Padalhin and Bienvenido Pasturan in this case is
hearsay evidence because the said househelpers did not appear to
testify in this case and to identify their affidavits although the record will
show that plaintiff exerted all efforts to present them as witnesses but
failed because their address/whereabouts could not be traced and/or
ascertained. In view of this, defendants Annie Padalhin and Bienvenido
Pasturan did not have the opportunity to cross-examine the said
affiants.10 (Italics ours)
The RTC was, however, not convinced of Nestor’s involvement in the
raid staged on April 23, 1996. Laviña’s testimony relative to the raid
was not based on his own personal knowledge as it was only derived
from the affidavits subscribed and sworn to before him by Cabando,
Palao, Helen Tadifa,11 John Ochieng12 and Leonidas Peter
Logarta.13 During the trial before the RTC and even in the proceedings
before the DFA, Laviña had not presented the aforementioned persons
as witnesses. Their affidavits were thus considered as hearsay
evidence since the witnesses were not subjected to cross-examination.
The RTC likewise found no sufficient evidence to render Annie and
Pasturan liable and to grant Nestor’s counterclaims.
Both Laviña and Nestor filed their respective appeals to assail the RTC
decision. Laviña ascribed error on the part of the RTC when it absolved
Annie and Pasturan from liability anent their supposed participation in
the raid conducted on April 18, 1996. Laviña likewise assailed as
insufficient the amount of exemplary and nominal damages imposed
on Nestor by the RTC. Laviña also challenged the propriety of the
RTC’s dismissal of his claims relative to the conduct of the second raid
on April 23, 1996. On the other hand, Nestor lamented that his
participation in the April 18, 1996 raid was not proven by clear and
substantial evidence, hence, the award of damages made by the RTC
in favor of Laviña lacked basis.
The Ruling of the CA
On February 14, 2008, the CA rendered a Decision14 denying the
appeals of both Laviña and Nestor. The CA, however, reduced to
P75,000.00 the award of attorney’s fees and litigation expenses made
in Laviña’s favor. In affirming, albeit with modification, the RTC’s
disquisition, the CA explained:
There is no doubt in our mind that defendant-appellant indeed
participated in the first raid that happened on April 18, 1997 [sic]. This
conclusion of ours is based on the admission made by the defendant-
appellant himself in his affidavit dated October 10, 1997. x x x.
xxxx
Defendat-appellant’s affidavit constitutes as [sic] an admission against
his interest. Being an admission against interest, the affidavit is the
best evidence which affords the greatest certainty of the facts in
dispute. The rationale for the rule is based on the presumption that no
man would declare anything against himself unless such declaration
was true. Thus, it is fair to presume that the declaration corresponds
with the truth, and it is his fault if it does not. As a Consul General of
the Republic of the Philippines, defendant-appellant cannot pretend
that the plain meaning of his admission eluded his mind. On the
witness stand, he testified that he was the one who voluntarily and
freely prepared his affidavit. He further stated that the contents thereof
are true. His affidavit likewise contained an apology for his lack of
judgment and discretion regarding the April 18, 1996 raid.
Anent plaintiff-appellant’s second cause of action, the court a quo
correctly ruled that plaintiff-appellant was not able to prove defendant-
appellant’s participation in the second raid that happened on April 26,
1996 [sic]. Basic is the rule in evidence that the burden of proof is on
the part of the party who makes the allegations x x x. Plaintiff-
appellant’s testimony regarding the second raid was not of his own
personal knowledge. Neither does the affidavit of defendant-appellant
admit that he had anything to do with the second raid. Plaintiff-
appellant came to know of the second raid only from the stories told to
him by his household helps and employees of the Philippine Embassy
in Nairobi, Kenya. Inasmuch as these people were not presented as
witnesses in the instant case, their affidavits are considered hearsay
and without probative value.
x x x.
Next, plaintiff-appellant bewails the dismissal of the complaint against
Annie Padalhin and Bienvenido Pasturan. He contends that the
affidavits of Cabando and Palao, which were executed and sworn to
before him, linking defendant Annie Padalhin and B[ie]nvenido
Pasturan to the two raids are binding upon the latter two.
Such a contention by the plaintiff-appellant must fail. The failure of the
plaintiff-appellant to put Cabando and Palao on the witness stand is
fatal to his case. Even if defendants Annie Padalhin and Bienvenido
Pasturan failed to object to the hearsay evidence presented by the
plaintiff-appellant, it would only mean that they have waived their right
of confrontation and cross-examination, and the affidavits then are
admissible. But admissibility of evidence should not be equated with
weight of evidence. Hearsay evidence, whether objected to or not, has
no probative value.
xxxx
Defendant-appellant contends that there is no factual basis to conclude
that he was motivated by malice, bad faith or deceit, which would
warrant the award of damages in favor of the plaintiff-appellant.
x x x Plaintiff-appellant’s complaint is mainly anchored on Article 19 in
relation to Articles 21 and 26 of the New Civil Code. These provisions
of the law state thus:
"Article 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."
"Article 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."
"Article 26. Every person shall respect the dignity, personality, privacy
and peace of mind of his neighbors and other persons. The following
and similar acts, though they may not constitute a criminal offense,
shall produce a cause of action for damages, prevention and other
relief:
(1) Prying into the privacy of another’s residence:
(2) Meddling with or disturbing the private life or family relations off [sic]
another;
(3) Intriguing to cause another to be alienated from his friends;
(4) Vexing or humiliating another on account of his beliefs, lowly station
in life, place of birth, physical defect, or other personal condition."
The Comment of Tolentino on what constitute an abuse of rights under
Article 19 of the New Civil Code is pertinent:
"Test of Abuse of Right. – Modern jurisprudence does not permit acts
which, although not unlawful, are anti-social. There is undoubtedly an
abuse of right when it is exercised for the only purpose of prejudicing
or injuring another. When the objective of the actor is illegitimate, the
illicit act cannot be concealed under the guise of exercising a right. The
principle does not permit acts which, without utility or legitimate
purpose cause damage to another, because they violate the concept of
social solidarity which considers law as rational and just. x x x."
The question, therefore, is whether defendant-appellant intended to
prejudice or injure plaintiff-appellant when he did the acts as embodied
in his affidavit.
We rule in the affirmative. Defendant-appellant’s participation in the
invasion of plaintiff-appellant’s diplomatic residence and his act of
ordering an employee to take photographs of what was inside the
diplomatic residence without the consent of the plaintiff-appellant were
clearly done to prejudice the latter. Moreover, we find that defendant-
appellant was not driven by legitimate reasons when he did the
questioned acts. As pointed out by the court a quo, defendant-
appellant made sure that the Kenyan Minister of Foreign Affairs and
the Filipino community in Kenya knew about the alleged illegal items in
plaintiff-appellant’s diplomatic residence.
xxxx
Basic is the rule that trial courts are given the discretion to determine
the amount of damages, and the appellate court can modify or change
the amount awarded only when it is inordinate. x x x We reduce the
amount of attorney’s fees and expenses of litigation from P150,000.00
to P75,000.00 considering that the instant suit is merely for damages.
With regard to plaintiff-appellant’s contention that his prayer for "other
reliefs which are just and equitable", consisting of his remuneration,
salaries and allowances which should have been paid to him in Nairobi
if it were not for his illegal recall to Manila, the same must likewise fail.
First of all, it is not within our powers to determine whether or not
plaintiff-appellant’s recall to Manila following the two raids was illegal or
not. Second, the "other reliefs" prayed for by the plaintiff- appellant are
in the nature of actual or compensatory damages which must be duly
proved with reasonable degree of certainty. A court cannot rely on
speculation, conjecture or guesswork as to the amount of damages,
but must depend upon competent proof and on evidence of the actual
amount thereof. Here, plaintiff-appellant failed to present proof of his
salary and allowances. x x x.15 (Citations omitted and italics ours)
The Resolution16 issued by the CA on May 20, 2008 denied the
respective motions for reconsideration filed by Laviña and Nestor.
Hence, Nestor filed before us the instant Petition for Review on
Certiorari17 anchored on the following issues:
I. WHETHER OR NOT NESTOR’S PARTICIPATION IN THE RAID
CONDUCTED ON LAVIÑA’S RESIDENCE WAS PROVEN BY CLEAR
AND SUBSTANTIAL EVIDENCE AS TO WARRANT THE AWARD OF
MORAL, EXEMPLARY AND NOMINAL DAMAGES AND
ATTORNEY’S FEES IN THE LATTER’S FAVOR.
II. WHETHER OR NOT NESTOR’S COUNTERCLAIMS SHOULD
HAVE BEEN GRANTED CONSIDERING A CLEAR SHOWING THAT
LAVIÑA’S SUIT WAS GROUNDLESS.
The Arguments in Support of the Petition
Nestor reiterates that his admission of having caused the taking of
photographs in Laviña’s residence was subject to the qualification that
he did so sans malice or bad faith. Padalhin insists that he did nothing
unlawful. He merely intended to verify the complaints of some embassy
personnel against Laviña, with the end in mind of protecting and
upholding the image of the Philippine diplomatic corps in Kenya. He
may have committed a lapse in the exercise of his discretion, but he
never meant to cause Laviña harm, damage or embarrassment.
Nestor avers that Laviña kept grudges against him based on a
mistaken sentiment that the former intended to oust the latter from his
post. This, however, did not justify Laviña’s filing of a suit for damages
against Nestor.
Laviña’s Contentions
In his Comment,18 Laviña seeks the dismissal of the instant petition on
both procedural and substantive grounds. He alleges that the
verification and certification of non-forum-shopping attached to the
petition was signed not by Spouses Padalhin but by their son, Norman
Padalhin (Norman). Such being the case, it is as if the said verification
and certification was not signed at all, hence, legally inexistent,
rendering the petition defective. Besides, even if the Special Power of
Attorney19 (SPA) signed by Nestor were to be considered as the
source of Norman’s authority to sign the said verification and
certification of non-forum-shopping, still, the instrument is wanting as
Annie, a co-petitioner in the case at bar, had no participation in its
execution.
Laviña likewise emphasizes that since factual and not legal issues are
raised, resort to a petition for review on certiorari under Rule 45 of the
Rules of Civil Procedure is erroneous.
In challenging the substantial merits of the instant petition, Laviña
reiterates the arguments he proferred in the proceedings below. He
also made affirmative references to the portions of rulings of both the
RTC and the CA, relative to the binding effect of the affidavits
submitted by some of the defendants either with the DFA or the RTC,
to render all of them liable for damages for their participation in the
conduct of the supposed raids.
Our Disquisition
The instant petition is procedurally flawed.
We deem it proper to first resolve the procedural issues raised by
Laviña relative to the (a) alleged defective verification and certification
of non-forum shopping attached to the instant petition, and (b) the
circumstance that factual and not legal issues are presented before us,
hence, beyond the ambit of a petition for review on certiorari under
Rule 45 of the Rules of Civil Procedure.
Sections 4 and 5 of Rule 7 of the Rules of Civil Procedure provide:
Sec. 4. Verification. - Except when otherwise specifically required by
law or rule, pleadings need not be under oath, verified or accompanied
by affidavit.
A pleading is verified by an affidavit that the affiant has read the
pleadings and that the allegations therein are true and correct of his
personal knowledge or based on authentic records.
A pleading required to be verified which contains a verification based
on "information and belief" or upon "knowledge, information and belief"
or lacks a proper verification, shall be treated as an unsigned pleading.
Sec. 5. Certification against forum shopping. - The plaintiff or principal
party shall certify under oath in the complaint or other initiatory
pleading asserting a claim for relief, or in a sworn certification annexed
thereto and simultaneously filed therewith: (a) that he has not
theretofore commenced any action or filed any claim involving the
same issues in any court, tribunal or quasi-judicial agency and, to the
best of his knowledge, no such other action or claim is pending therein;
(b) if there is such other pending action or claim, a complete statement
of the present status thereof; and (c) if he should thereafter learn that
the same or similar action or claim has been filed or is pending, he
shall report that fact within five (5) days therefrom to the court wherein
his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable
by mere amendment of the complaint or other initiatory pleading but
shall be cause for the dismissal of the case without prejudice, unless
otherwise provided, upon motion and after hearing. The submission of
a false certification or non-compliance with any of the undertakings
therein shall constitute indirect contempt of court, without prejudice to
the corresponding administrative and criminal actions. If the acts of the
party or his counsel clearly constitute willful and deliberate forum-
shopping, the same shall be ground for summary dismissal with
prejudice and shall constitute direct contempt, as well as a cause for
administrative sanctions. (Italics ours)
Obedience to the requirements of procedural rules is needed if we are
to expect fair results therefrom, and utter disregard of the rules cannot
justly be rationalized by harking on the policy of liberal construction.20
Time and again, this Court has strictly enforced the requirement of
verification and certification of non-forum shopping under the Rules of
Court.21 Verification is required to secure an assurance that the
allegations of the petition have been made in good faith, or are true
and correct and not merely speculative.22 The attestation on non-
forum shopping requires personal knowledge by the party executing
the same, and the lone signing petitioner cannot be presumed to have
personal knowledge of the filing or non-filing by his co-petitioners of
any action or claim the same as similar to the current petition.23
The circumstances surrounding the case at bar do not qualify to
exempt compliance with the rules and justify our exercise of leniency.
The verification and certification of non-forum shopping24 attached to
the instant petition was not signed personally by the petitioners
themselves. Even if we were to admit as valid the SPA executed in
Norman’s favor allowing him to sign the verification and certification of
non-forum shopping attached to the instant petition, still, his authority is
wanting. Petitioner Annie did not participate in the execution of the said
SPA. In the pleadings filed with us, there is nary an explanation
regarding the foregoing omissions. The petitioner spouses took
procedural rules for granted and simply assumed that the Court will
accord them leniency. It bears stressing that procedural rules are
crafted towards the orderly administration of justice and they cannot be
haphazardly ignored at the convenience of the party litigants.
Laviña also seeks the dismissal of the instant petition on the ground of
being supposedly anchored on factual and not legal issues.
The case of Vda. De Formoso v. Philippine National Bank25 is
emphatic on what issues can be resolved in a petition for review on
certiorari filed under Rule 45 of the Rules of Procedure, to wit:
Primarily, Section 1, Rule 45 of the Rules of Court categorically states
that the petition filed shall raise only questions of law, which must be
distinctly set forth. A question of law arises when there is doubt as to
what the law is on a certain state of facts, while there is a question of
fact when the doubt arises as to the truth or falsity of the alleged facts.
For a question to be one of law, the same must not involve an
examination of the probative value of the evidence presented by the
litigants or any of them. The resolution of the issue must rest solely on
what the law provides on the given set of circumstances. Once it is
clear that the issue invites a review of the evidence presented, the
question posed is one of fact.
x x x The substantive issue of whether or not the petitioners are
entitled to moral and exemplary damages as well as attorney’s fees is
a factual issue which is beyond the province of a petition for review on
certiorari.26 (Citation omitted and italics ours)
In the case at bar, the petitioner spouses present to us issues with an
intent to subject to review the uniform factual findings of the RTC and
the CA.1âwphi1 Specifically, the instant petition challenges the
existence of clear and substantial evidence warranting the award of
damages and attorney’s fees in Laviña’s favor. Further, the instant
petition prays for the grant of the Spouses Padalhin’s counterclaims on
the supposed showing that the complaint filed by Laviña before the
RTC was groundless. It bears stressing that we are not a trier of facts.
Undoubtedly, the questions now raised before us are factual and not
legal in character, hence, beyond the contemplation of a petition filed
under Rule 45 of the Rules of Civil Procedure.
Even if we were to overlook the
aforecited procedural defects of the
instant petition, still, the reliefs
prayed for by the petitioner spouses
cannot be granted.
As already exhaustively discussed by both the RTC and the CA,
Nestor himself admitted that he caused the taking of the pictures of
Lavina's residence without the latter's knowledge and consent. Nestor
reiterates that he did so sans bad faith or malice. However, Nestor's
surreptitious acts negate his allegation of good faith. If it were true that
Lavina kept ivories in his diplomatic residence, then, his behavior
deserves condemnation. However, that is not the issue in the case at
bar. Nestor violated the New Civil Code prescriptions concerning the
privacy of one's residence and he cannot hide behind the cloak of his
supposed benevolent intentions to justify the invasion. Hence, the
award of damages and attorney's fees in Lavina's favor is proper.
WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is
DENIED. The Decision dated February 14, 2008 and Resolution dated
May 20, 2008 by the Court of Appeals in C A-G.R. CV No. 81810 are
AFFIRMED.
SO ORDERED.
RADIO COMMUNICATIONS OF THE PHILIPPINES, INC.
(RCPI),Petitioner,
vs.
ALFONSO VERCHEZ, GRACE VERCHEZ-INFANTE, MARDONIO
INFANTE, ZENAIDA VERCHEZ-CATIBOG, AND FORTUNATO
CATIBOG, Respondents.
DECISION
CARPIO MORALES, J.:
On January 21, 1991, Editha Hebron Verchez (Editha) was confined at
the Sorsogon Provincial Hospital due to an ailment. On even date, her
daughter Grace Verchez-Infante (Grace) immediately hied to the
Sorsogon Branch of the Radio Communications of the Philippines, Inc.
(RCPI) whose services she engaged to send a telegram to her sister
Zenaida Verchez-Catibog (Zenaida) who was residing at 18 Legal St.,
GSIS Village, Quezon City1 reading: "Send check money Mommy
hospital." For RCPI’s services, Grace paid P10.502 for which she was
issued a receipt.3
As three days after RCPI was engaged to send the telegram to
Zenaida no response was received from her, Grace sent a letter to
Zenaida, this time thru JRS Delivery Service, reprimanding her for not
sending any financial aid.
Immediately after she received Grace’s letter, Zenaida, along with her
husband Fortunato Catibog, left on January 26, 1991 for Sorsogon. On
her arrival at Sorsogon, she disclaimed having received any telegram.
In the meantime, Zenaida and her husband, together with her mother
Editha left for Quezon City on January 28, 1991 and brought Editha to
the Veterans Memorial Hospital in Quezon City where she was
confined from January 30, 1991 to March 21, 1991.
The telegram was finally delivered to Zenaida 25 days later or on
February 15, 1991.4 On inquiry from RCPI why it took that long to
deliver it, a messenger of RCPI replied that he had nothing to do with
the delivery thereof as it was another messenger who previously was
assigned to deliver the same but the address could not be located,
hence, the telegram was resent on February 2, 1991, and the second
messenger finally found the address on February 15, 1991.
Editha’s husband Alfonso Verchez (Verchez), by letter of March 5,
1991,5 demanded an explanation from the manager of the Service
Quality Control Department of the RCPI, Mrs. Lorna D. Fabian, who
replied, by letter of March 13, 1991,6 as follows:
Our investigation on this matter disclosed that subject telegram was
duly processed in accordance with our standard operating procedure.
However, delivery was not immediately effected due to the occurrence
of circumstances which were beyond the control and foresight of RCPI.
Among others, during the transmission process, the radio link
connecting the points of communication involved encountered radio
noise and interferences such that subject telegram did not initially
registered (sic) in the receiving teleprinter machine.
Our internal message monitoring led to the discovery of the above.
Thus, a repeat transmission was made and subsequent delivery was
effected. (Underscoring supplied)
Verchez’s lawyer thereupon wrote RCPI’s manager Fabian, by letter of
July 23, 1991,7 requesting for a conference on a specified date and
time, but no representative of RCPI showed up at said date and time.
On April 17, 1992, Editha died.
On September 8, 1993, Verchez, along with his daughters Grace and
Zenaida and their respective spouses, filed a complaint against RCPI
before the Regional Trial Court (RTC) of Sorsogon for damages. In
their complaint, the plaintiffs alleged that, inter alia, the delay in
delivering the telegram contributed to the early demise of the late
Editha to their damage and prejudice, 8 for which they prayed for the
award of moral and exemplary damages9 and attorney’s fees.10
After its motion to dismiss the complaint for improper venue 11 was
denied12 by Branch 5 of the RTC of Sorsogon, RCPI filed its answer,
alleging that except with respect to Grace, 13 the other plaintiffs had no
privity of contract with it; any delay in the sending of the telegram was
due to force majeure, "specifically, but not limited to, radio noise and
interferences which adversely affected the transmission and/or
reception of the telegraphic message";14 the clause in the Telegram
Transmission Form signed by Grace absolved it from liability for any
damage arising from the transmission other than the refund of telegram
tolls;15 it observed due diligence in the selection and supervision of its
employees; and at all events, any cause of action had been barred by
laches.16
The trial court, observing that "although the delayed delivery of the
questioned telegram was not apparently the proximate cause of the
death of Editha," ruled out the presence of force majeure. Respecting
the clause in the telegram relied upon by RCPI, the trial court held that
it partakes of the nature of a contract of adhesion.
Finding that the nature of RCPI’s business obligated it to dispatch the
telegram to the addressee at the earliest possible time but that it did
not in view of the negligence of its employees to repair its radio
transmitter and the concomitant delay in delivering the telegram on
time, the trial court, upon the following provisions of the Civil Code, to
wit:
Article 2176 – Whoever by act or omission causes damage to another,
there being at 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 quasi-delict and is governed by
the provisions of this Chapter.
Article 1173 defines the fault of (sic) negligence of the obligor as the
"omission of the diligence which is required by the nature of the
obligation and corresponds with the circumstances of the person, of
the time, or the place."
In the instant case, the obligation of the defendant to deliver the
telegram to the addressee is of an urgent nature. Its essence is the
early delivery of the telegram to the concerned person. Yet, due to the
negligence of its employees, the defendant failed to discharge of its
obligation on time making it liable for damages under Article 2176.
The negligence on the part of the employees gives rise to the
presumption of negligence on the part of the employer.17 (Underscoring
supplied),
rendered judgment against RCPI. Accordingly, it disposed:
WHEREFORE, in the light of the foregoing premises, judgment is
hereby rendered in favor of the plaintiffs and against the defendant, to
wit:
Ordering the defendant to pay the plaintiffs the following amount:
1. The amount of One Hundred Thousand (P100,000.00)
Pesos as moral damages;
2. The amount of Twenty Thousand (P20,000.00) Pesos as
attorney’s fees; and
3. To pay the costs.
SO ORDERED.18
On appeal, the Court of Appeals, by Decision of February 27, 2004, 19
affirmed the trial court’s decision.
Hence, RCPI’s present petition for review on certiorari, it raising the
following questions: (1) "Is the award of moral damages proper even if
the trial court found that there was no direct connection between the
injury and the alleged negligent acts?" 20 and (2) "Are the stipulations in
the ‘Telegram Transmission Form,’ in the nature "contracts of
adhesion" (sic)?21
RCPI insists that respondents failed to prove any causal connection
between its delay in transmitting the telegram and Editha’s death.22
RCPI’s stand fails. It bears noting that its liability is anchored on culpa
contractual or breach of contract with regard to Grace, and on tort with
regard to her co-plaintiffs-herein-co-respondents.
Article 1170 of the Civil Code provides:
Those who in the performance of their obligations are guilty of fraud,
negligence, or delay, and those who in any manner contravene the
tenor thereof, are liable for damages. (Underscoring supplied)
Passing on this codal provision, this Court explained:
In culpa contractual x x x the mere proof of the existence of the
contract and the failure of its compliance justify, prima facie, a
corresponding right of relief. The law, recognizing the obligatory force
of contracts, will not permit a party to be set free from liability for any
kind of misperformance of the contractual undertaking or a
contravention of the tenor thereof. A breach upon the contract confers
upon the injured party a valid cause for recovering that which may
have been lost or suffered. The remedy serves to preserve the
interests of the promissee that may include his "expectation interest,"
which is his interest in having the benefit of his bargain by being put in
as good a position as he would have been in had the contract been
performed, or his "reliance interest ," which is his interest in being
reimbursed for loss caused by reliance on the contract by being put in
as good a position as he would have been in had the contract not been
made; or his "restitution interest," which is his interest in having
restored to him any benefit that he has conferred on the other party.
Indeed, agreements can accomplish little, either for their makers or for
society, unless they are made the basis for action. The effect of every
infraction is to create a new duty, that is, to make recompense to the
one who has been injured by the failure of another to observe his
contractual obligation unless he can show extenuating circumstances,
like proof of his exercise of due diligence x x x or of the attendance
of fortuitous event, to excuse him from his ensuing liability.23
(Emphasis and underscoring supplied)
In the case at bar, RCPI bound itself to deliver the telegram within the
shortest possible time. It took 25 days, however, for RCPI to deliver it.
RCPI invokes force majeure, specifically, the alleged radio noise and
interferences which adversely affected the transmission and/or
reception of the telegraphic message. Additionally, its messenger
claimed he could not locate the address of Zenaida and it was only on
the third attempt that he was able to deliver the telegram.
For the defense of force majeure to prosper,
x x x it is necessary that one has committed no negligence or
misconduct that may have occasioned the loss. An act of God cannot
be invoked to protect a person who has failed to take steps to forestall
the possible adverse consequences of such a loss. One’s negligence
may have concurred with an act of God in producing damage and
injury to another; nonetheless, showing that the immediate or
proximate cause of the damage or injury was a fortuitous event would
not exempt one from liability. When the effect is found to be partly
the result of a person’s participation – whether by active
intervention, neglect or failure to act – the whole occurrence is
humanized and removed from the rules applicable to acts of God.
xxxx
Article 1174 of the Civil Code states that no person shall be
responsible for a fortuitous event that could not be foreseen or, though
foreseen, was inevitable. In other words, there must be an
exclusion of human intervention from the cause of injury or loss.24
(Emphasis and underscoring supplied)
Assuming arguendo that fortuitous circumstances prevented RCPI
from delivering the telegram at the soonest possible time, it should
have at least informed Grace of the non-transmission and the non-
delivery so that she could have taken steps to remedy the situation.
But it did not. There lies the fault or negligence.
In an earlier case also involving RCPI, this Court held:
Considering the public utility of RCPI’s business and its contractual
obligation to transmit messages, it should exercise due diligence to
ascertain that messages are delivered to the persons at the given
address and should provide a system whereby in cases of undelivered
messages the sender is given notice of non-delivery. Messages sent
by cable or wireless means are usually more important and urgent
than those which can wait for the mail.25
xxxx
People depend on telecommunications companies in times of
deep emotional stress or pressing financial needs. Knowing that
messages about the illnesses or deaths of loved ones, births or
marriages in a family, important business transactions, and notices of
conferences or meetings as in this case, are coursed through the
petitioner and similar corporations, it is incumbent upon them to
exercise a greater amount of care and concern than that shown in this
case. Every reasonable effort to inform senders of the non-delivery of
messages should be undertaken.26
(Emphasis and underscoring supplied)
RCPI argues, however, against the presence of urgency in the delivery
of the telegram, as well as the basis for the award of moral damages,
thus:27
The request to send check as written in the telegraphic text negates
the existence of urgency that private respondents’ allegations that ‘time
was of the essence’ imports. A check drawn against a Manila Bank and
transmitted to Sorsogon, Sorsogon will have to be deposited in a bank
in Sorsogon and pass thru a minimum clearing period of 5 days before
it may be encashed or withdrawn. If the transmittal of the requested
check to Sorsogon took 1 day – private respondents could therefore
still wait for 6 days before the same may be withdrawn. Requesting a
check that would take 6 days before it could be withdrawn therefore
contradicts plaintiff’s claim of urgency or need.28
At any rate, any sense of urgency of the situation was met when Grace
Verchez was able to communicate to Manila via a letter that she sent
to the same addressee in Manila thru JRS.29
xxxx
As far as the respondent court’s award for moral damages is
concerned, the same has no basis whatsoever since private
respondent Alfonso Verchez did not accompany his late wife when the
latter went to Manila by bus. He stayed behind in Sorsogon for almost
1 week before he proceeded to Manila. 30
When pressed on cross-examination, private respondent Alfonso
Verchez could not give any plausible reason as to the reason why he
did not accompany his ailing wife to Manila.31
xxxx
It is also important to consider in resolving private respondents’ claim
for moral damages that private respondent Grace Verchez did not
accompany her ailing mother to Manila.32
xxxx
It is the common reaction of a husband to be at his ailing wife’s side as
much as possible. The fact that private respondent Alfonso Verchez
stayed behind in Sorsogon for almost 1 week convincingly
demonstrates that he himself knew that his wife was not in critical
condition.33
(Emphasis and underscoring supplied)
RCPI’s arguments fail. For it is its breach of contract upon which its
liability is, it bears repeating, anchored. Since RCPI breached its
contract, the presumption is that it was at fault or negligent. It,
however, failed to rebut this presumption.
For breach of contract then, RCPI is liable to Grace for damages.
And for quasi-delict, RCPI is liable to Grace’s co-respondents following
Article 2176 of the Civil Code which provides:
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. (Underscoring supplied)
RCPI’s liability as an employer could of course be avoided if it could
prove that it observed the diligence of a good father of a family to
prevent damage. Article 2180 of the Civil Code so provides:
The obligation imposed by Article 2176 is demandable not only for
one’s own acts or omissions, but also for those of persons for whom
one is responsible.
xxxx
The owners and managers of an establishment or enterprise are
likewise responsible for damages caused by their employees in the
service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry.
xxxx
The responsibility treated of in this article shall cease when the
persons herein mentioned prove that they observed all the diligence of
a good father of a family to prevent damage. (Underscoring supplied)
RCPI failed, however, to prove that it observed all the diligence of a
good father of a family to prevent damage.
Respecting the assailed award of moral damages, a determination of
the presence of the following requisites to justify the award is in order:
x x x firstly, evidence of besmirched reputation or physical, mental or
psychological suffering sustained by the claimant; secondly, a culpable
act or omission factually established; thirdly, proof that the wrongful act
or omission of the defendant is the proximate cause of damages
sustained by the claimant; and fourthly, that the case is predicated on
any of the instances expressed or envisioned by Article 2219 and
Article 2220 of the Civil Code.34
Respecting the first requisite, evidence of suffering by the plaintiffs-
herein respondents was correctly appreciated by the CA in this wise:
The failure of RCPI to deliver the telegram containing the message of
appellees on time, disturbed their filial tranquillity. Family members
blamed each other for failing to respond swiftly to an emergency that
involved the life of the late Mrs. Verchez, who suffered from diabetes.35
As reflected in the foregoing discussions, the second and third
requisites are present.
On the fourth requisite, Article 2220 of the Civil Code provides:
Willful 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.
(Emphasis and underscoring supplied)
After RCPI’s first attempt to deliver the telegram failed, it did not inform
Grace of the non-delivery thereof and waited for 12 days before trying
to deliver it again, knowing – as it should know – that time is of the
essence in the delivery of telegrams. When its second long-delayed
attempt to deliver the telegram again failed, it, again, waited for another
12 days before making a third attempt. Such nonchalance in
performing its urgent obligation indicates gross negligence amounting
to bad faith. The fourth requisite is thus also present.
In applying the above-quoted Article 2220, this Court has awarded
moral damages in cases of breach of contract where the defendant
was guilty of gross negligence amounting to bad faith, or in wanton
disregard of his contractual obligation.36
As for RCPI’s tort-based liability, Article 2219 of the Civil Code
provides:
Moral damages may be recovered in the following and analogous
cases:
xxxx
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32,
34, and 35. (Emphasis supplied)
Article 26 of the Civil Code, in turn, provides:
Every person shall respect the dignity, personality, privacy and peace
of mind of his neighbors and other persons. The following and similar
acts, though they may not constitute a criminal offense, shall produce a
cause of action for damages, prevention, and other relief:
xxxx
(2) Meddling with or disturbing the private life or family relations of
another. (Emphasis supplied)
RCPI’s negligence in not promptly performing its obligation
undoubtedly disturbed the peace of mind not only of Grace but also her
co-respondents. As observed by the appellate court, it disrupted the
"filial tranquillity" among them as they blamed each other "for failing to
respond swiftly to an emergency." The tortious acts and/or omissions
complained of in this case are, therefore, analogous to acts mentioned
under Article 26 of the Civil Code, which are among the instances of
quasi-delict when courts may award moral damages under Article 2219
of the Civil Code.
In fine, the award to the plaintiffs-herein respondents of moral
damages is in order, as is the award of attorney’s fees, respondents
having been compelled to litigate to protect their rights.
Clutching at straws, RCPI insists that the limited liability clause in the
"Telegram Transmission Form" is not a contract of adhesion. Thus it
argues:
Neither can the Telegram Transmission Form be considered a contract
of adhesion as held by the respondent court. The said stipulations
were all written in bold letters right in front of the Telegram
Transmission Form. As a matter of fact they were beside the space
where the telegram senders write their telegraphic messages. It would
have been different if the stipulations were written at the back for surely
there is no way the sender will easily notice them. The fact that the
stipulations were located in a particular space where they can easily be
seen, is sufficient notice to any sender (like Grace Verchez-Infante)
where she could manifest her disapproval, leave the RCPI station and
avail of the services of the other telegram operators.37 (Underscoring
supplied)
RCPI misunderstands the nature of a contract of adhesion. Neither the
readability of the stipulations nor their physical location in the contract
determines whether it is one of adhesion.
A contract of adhesion is defined as one in which one of the parties
imposes a ready-made form of contract, which the other party may
accept or reject, but which the latter cannot modify. One party prepares
the stipulation in the contract, while the other party merely affixes his
signature or his "adhesion" thereto, giving no room for negotiation
and depriving the latter of the opportunity to bargain on equal
footing.38 (Emphasis and underscoring supplied)
While a contract of adhesion is not necessarily void and unenforceable,
since it is construed strictly against the party who drafted it or gave rise
to any ambiguity therein, it is stricken down as void and unenforceable
or subversive of public policy when the weaker party is imposed upon
in dealing with the dominant bargaining party and is reduced to the
alternative of taking it or leaving it, completely deprived of the
opportunity to bargain on equal footing.39
This Court holds that the Court of Appeals’ finding that the parties’
contract is one of adhesion which is void is, given the facts and
circumstances of the case, thus well-taken.
WHEREFORE, the petition is DENIED, and the challenged decision of
the Court of Appeals is AFFIRMED.
Costs against petitioner.
SO ORDERED.
ROY PADILLA, FILOMENO GALDONES, ISMAEL GONZALGO and
JOSE FARLEY BEDENIA, petitioners,
vs.
COURT OF APPEALS, respondent.
Sisenando Villaluz, Sr. for petitioners.
The Solicitor General for respondent.
GUTIERREZ, JR., J.:
This is a petition for review on certiorari of a Court of Appeals' decision
which reversed the trial court's judgment of conviction and acquitted
the petitioners of the crime of grave coercion on the ground of
reasonable doubt but inspite of the acquittal ordered them to pay jointly
and severally the amount of P9,000.00 to the complainants as actual
damages.
The petitioners were charged under the following information:
The undersigned Fiscal accused ROY PADILLA,
FILOMENO GALDONES, PEPITO BEDENIA,
YOLLY RICO, DAVID BERMUNDO, VILLANOAC,
ROBERTO ROSALES, VILLANIA, ROMEO
GARRIDO, JOSE ORTEGA, JR., RICARDO
CELESTINO, REALINGO alias "KAMLON", JOHN
DOE alias TATO, and FOURTEEN (14) RICARDO
DOES of the crime of GRAVE COERCION,
committed as follows:
That on or about February 8, 1964 at around 9:00
o'clock in the morning, in the municipality of Jose
Panganiban, province of Camarines Norte,
Philippines, and within the jurisdiction of this
Honorable Court, the above- named accused, Roy
Padilla, Filomeno Galdones, Pepito Bedenia, Yolly
Rico, David Bermundo, Villanoac, Roberto
Rosales, Villania, Romeo Garrido, Jose Ortega,
Jr., Ricardo Celestino, Realingo alias Kamlon,
John Doe alias Tato, and Fourteen Richard Does,
by confederating and mutually helping one
another, and acting without any authority of law,
did then and there wilfully, unlawfully, and
feloniously, by means of threats, force and
violence prevent Antonio Vergara and his family to
close their stall located at the Public Market,
Building No. 3, Jose Panganiban, Camarines
Norte, and by subsequently forcibly opening the
door of said stall and thereafter brutally
demolishing and destroying said stall and the
furnitures therein by axes and other massive
instruments, and carrying away the goods, wares
and merchandise, to the damage and prejudice of
the said Antonio Vergara and his family in the
amount of P30,000.00 in concept of actual or
compensatory and moral damages, and further the
sum of P20,000.00 as exemplary damages.
That in committing the offense, the accused took
advantage of their public positions: Roy Padilla,
being the incumbent municipal mayor, and the rest
of the accused being policemen, except Ricardo
Celestino who is a civilian, all of Jose Panganiban,
Camarines Norte, and that it was committed with
evident premeditation.
The Court of First Instance of Camarines Norte, Tenth Judicial District
rendered a decision, the dispositive portion of which states that:
IN VIEW OF THE FOREGOING, the Court finds the accused Roy
Padilla, Filomeno Galdonez, Ismael Gonzalgo and Jose Parley
Bedenia guilty beyond reasonable doubt of the crime of grave
coercion, and hereby imposes upon them to suffer an imprisonment of
FIVE (5) months and One (1) day; to pay a fine of P500.00 each; to
pay actual and compensatory damages in the amount of P10,000.00;
moral damages in the amount of P30,000.00; and another P10,000.00
for exemplary damages, jointly and severally, and all the accessory
penalties provided for by law; and to pay the proportionate costs of this
proceedings.
The accused Federico Realingo alias 'Kamlon',
David Bermundo, Christopher Villanoac,
Godofredo Villania, Romeo Garrido, Roberto
Rosales, Ricardo Celestino and Jose Ortega, are
hereby ordered acquitted on grounds of
reasonable doubt for their criminal participation in
the crime charged.
The petitioners appealed the judgment of conviction to the Court of
Appeals. They contended that the trial court's finding of grave coercion
was not supported by the evidence. According to the petitioners, the
town mayor had the power to order the clearance of market premises
and the removal of the complainants' stall because the municipality
had enacted municipal ordinances pursuant to which the market stall
was a nuisance per se. The petitioners stated that the lower court erred
in finding that the demolition of the complainants' stall was a violation
of the very directive of the petitioner Mayor which gave the stall owners
seventy two (72) hours to vacate the market premises. The petitioners
questioned the imposition of prison terms of five months and one day
and of accessory penalties provided by law. They also challenged the
order to pay fines of P500.00 each, P10,000.00 actual and
compensatory damages, P30,000.00 moral damages, P10,000.00
exemplary damages, and the costs of the suit.
The dispositive portion of the decision of the respondent Court of
Appeals states:
WHEREFORE, we hereby modify the judgment
appealed from in the sense that the appellants are
acquitted on ground of reasonable doubt. but they
are ordered to pay jointly and severally to
complainants the amount of P9,600.00, as actual
damages.
The petitioners filed a motion for reconsideration contending that the
acquittal of the defendants-appellants as to criminal liability results in
the extinction of their civil liability. The Court of Appeals denied the
motion holding that:
xxx xxx xxx
... appellants' acquittal was based on reasonable
doubt whether the crime of coercion was
committed, not on facts that no unlawful act was
committed; as their taking the law into their hands,
destructing (sic) complainants' properties is
unlawful, and, as evidence on record established
that complainants suffered actual damages, the
imposition of actual damages is correct.
Consequently, the petitioners filed this special civil action, contending
that:
I threats', it does not allege the particular threat
THE COURT OF APPEALS COMMITTED A
GRAVE ERROR OF LAW OR GRAVELY
ABUSED ITS DISCRETION IN IMPOSING UPON
PETITIONERS PAYMENT OF DAMAGES TO
COMPLAINANTS AFTER ACQUITTING
PETITIONERS OF THE CRIME CHARGED
FROM WHICH SAID LIABILITY AROSE.
II
THE COURT OF APPEALS ERRED IN HOLDING
IN ITS RESOLUTION DATED DECEMBER 26,
1974 THAT SINCE APPELLANTS' ACQUITTAL
WAS BASED ON REASONABLE DOUBT, NOT
ON FACTS THAT NO UNLAWFUL ACT WAS
COMMITTED, THE IMPOSITION OF ACTUAL
DAMAGES IS CORRECT.
III
THE COURT OF APPEALS COMMITTED A
LEGAL INCONSISTENCY, IF NOT PLAIN
JUDICIAL ERROR, IN HOLDING IN ITS
APPEALED RESOLUTION THAT PETITIONERS
COMMITTED AN UNLAWFUL ACT, THAT IS
TAKING THE LAW INTO THEIR HANDS,
DESTRUCTING (sic) 'COMPLAINANTS'
PROPERTIES', AFTER HOLDING IN ITS MAIN
DECISION OF NOVEMBER 6,1974 THAT THE
ACTS FOR WHICH THEY WERE CHARGED DID
NOT CONSTITUTE GRAVE COERCION AND
THEY WERE NOT CHARGED OF ANY OTHER
CRIME.
IV
THE COURT OF APPEALS ERRED IN
ORDERING THE PETITIONERS HEREIN,
APPELLANTS IN CA-G.R. NO. 13456CR,
JOINTLY AND SEVERALLY, TO PAY
COMPLAINANTS P9,600.00 IN SUPPOSED
ACTUAL DAMAGES.
The issue posed in the instant proceeding is whether or not the
respondent court committed a reversible error in requiring the
petitioners to pay civil indemnity to the complainants after acquitting
them from the criminal charge.
Petitioners maintain the view that where the civil liability which is
included in the criminal action is that arising from and as a
consequence of the criminal act, and the defendant was acquitted in
the criminal case, (no civil liability arising from the criminal case), no
civil liability arising from the criminal charge could be imposed upon
him. They cite precedents to the effect that the liability of the defendant
for the return of the amount received by him may not be enforced in the
criminal case but must be raised in a separate civil action for the
recovery of the said amount (People v. Pantig, 97 Phil. 748; following
the doctrine laid down in Manila Railroad Co. v. Honorable Rodolfo
Baltazar, 49 O.G. 3874; Pueblo contra Abellera, 69 Phil. 623; People v.
Maniago 69 Phil. 496; People v. Miranda, 5 SCRA 1067; Aldaba v.
Elepafio 116 Phil. 457). In the case before us, the petitioners were
acquitted not because they did not commit the acts stated in the
charge against them. There is no dispute over the forcible opening of
the market stall, its demolition with axes and other instruments, and the
carting away of the merchandize. The petitioners were acquitted
because these acts were denominated coercion when they properly
constituted some other offense such as threat or malicious mischief.
The respondent Court of Appeals stated in its decision:
For a complaint to prosper under the foregoing
provision, the violence must be employed against
the person, not against property as what
happened in the case at bar. ...
xxx xxx xxx
The next problem is: May the accused be
convicted of an offense other than coercion?
From all appearances, they should have been
prosecuted either for threats or malicious mischief.
But the law does not allow us to render judgment
of conviction for either of these offenses for the
reason that they were not indicted for, these
offenses. The information under which they were
prosecuted does not allege the elements of either
threats or malicious mischief. Although the
information mentions that the act was by means of
made. An accused person is entitled to be
informed of the nature of the acts imputed to him
before he can be made to enter into trial upon a
valid information.
We rule that the crime of grave coercion has not
been proved in accordance with law.
While appellants are entitled to acquittal they
nevertheless are liable for the actual damages
suffered by the complainants by reason of the
demolition of the stall and loss of some of their
properties. The extinction of the penal action does
not carry with it that of the civil, unless the
extinction proceeds from a declaration in a final
judgment that the fact from which the civil might
arise did not exist. (Rule 111, Sec. 3 (c), Rev.
Rules of Court; Laperal v. Aliza, 51 OG.R. 1311,
People v. Velez, 44 OG. 1811). In the instant case,
the fact from which the civil might arise, namely,
the demolition of the stall and loss of the
properties contained therein; exists, and this is not
denied by the accused. And since there is no
showing that the complainants have reserved or
waived their right to institute a separate civil
action, the civil aspect therein is deemed instituted
with the criminal action. (Rule 111, Sec. 1, Rev.
Rules of Court).
xxx xxx xxx
Section 1 of Rule 111 of the Rules of Court states the fundamental
proposition that when a criminal action is instituted, the civil action for
recovery of civil liability arising from the offense charged is impliedly
instituted with it. There is no implied institution when the offended party
expressly waives the civil action or reserves his right to institute it
separately. (Morte Sr. v. Alvizo, Jr., 101 SCRA 221).
The extinction of the civil action by reason of acquittal in the criminal
case refers exclusively to civil liability ex delicto founded on Article 100
of the Revised Penal Code. (Elcano v. Hill, 77 SCRA 98; Virata v.
Ochoa, 81 SCRA 472). In other words, the civil liability which is also
extinguished upon acquittal of the accused is the civil liability arising
from the act as a crime.
As easily as 1942, the Supreme Court speaking through Justice Jorge
Bocobo in Barredo v. Garcia, et at. 73 Phil. 607 laid down the rule that
the same punishable act or omission can create two kinds of civil
liabilities against the accused and, where provided by law, his
employer. 'There is the civil liability arising from the act as a crime and
the liability arising from the same act as a quasi-delict. Either one of
these two types of civil liability may be enforced against the accused,
However, the offended party cannot recover damages under both
types of liability. For instance, in cases of criminal negligence or crimes
due to reckless imprudence, Article 2177 of the Civil Code provides:
Responsibility for fault or negligence under the
preceding article is entirely separate and distinct
from the civil liability arising from negligence under
the Penal Code. But the plaintiff cannot recover
damages twice for the same act or omission of the
defendant.
Section 3 (c) of Rule 111 specifically provides that:
Sec. 3. Other civil actions arising from offenses. —
In all cases not included in the preceding section
the following rules shall be observed:
xxx xxx xxx
xxx xxx xxx
(c) Extinction of the penal action does not carry
with it extinction of the civil, unless the extinction
proceeds from a declaration in a final judgment
that the fact from which the civil might arise did not
exist. In other cases, the person entitled to the civil
action may institute it in the Jurisdiction and in the
manner provided by law against the person who
may be liable for restitution of the thing and
reparation or indemnity for the damage suffered.
The judgment of acquittal extinguishes the liability of the accused for
damages only when it includes a declaration that the facts from which
the civil might arise did not exist. Thus, the civil liability is not
extinguished by acquittal where the acquittal is based on reasonable
doubt (PNB v. Catipon, 98 Phil. 286) as only preponderance of
evidence is required in civil cases; where the court expressly declares
that the liability of the accused is not criminal but only civil in nature
(De Guzman v. Alvia, 96 Phil. 558; People v. Pantig, supra) as, for
instance, in the felonies of estafa, theft, and malicious mischief
committed by certain relatives who thereby incur only civil liability (See
Art. 332, Revised Penal Code); and, where the civil liability does not
arise from or is not based upon the criminal act of which the accused
was acquitted (Castro v. Collector of Internal Revenue, 4 SCRA 1093;
See Regalado, Remedial Law Compendium, 1983 ed., p. 623). Article
29 of the Civil Code also provides that:
When the accused in a criminal prosecution is
acquitted on the ground that his guilt has not been
proved beyond reasonable doubt, a civil action for
damages for the same act or omission may be
instituted. Such action requires only a
preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file
a bond to answer for damages in case the
complaint should be found to be malicious.
If in a criminal case the judgment of acquittal is
based upon reasonable doubt, the court shall so
declare. In the absence of any declaration to that
effect, it may be inferred from the text of the
decision whether or not the acquittal is due to that
ground.
More recently, we held that the acquittal of the defendant in the
criminal case would not constitute an obstacle to the filing of a civil
case based on the same acts which led to the criminal prosecution:
... The finding by the respondent court that he
spent said sum for and in the interest of the Capiz
Agricultural and Fishery School and for his
personal benefit is not a declaration that the fact
upon which Civil Case No. V-3339 is based does
not exist. The civil action barred by such a
declaration is the civil liability arising from the
offense charged, which is the one impliedly
instituted with the criminal action. (Section 1, Rule
III, Rules of Court.) Such a declaration would not
bar a civil action filed against an accused who had
been acquitted in the criminal case if the criminal
action is predicated on factual or legal
considerations other than the commission of the
offense charged. A person may be acquitted of
malversation where, as in the case at bar, he
could show that he did not misappropriate the
public funds in his possession, but he could be
rendered liable to restore said funds or at least to
make a proper accounting thereof if he shall spend
the same for purposes which are not authorized
nor intended, and in a manner not permitted by
applicable rules and regulations. (Republic v.
Bello, 120 SCRA 203)
There appear to be no sound reasons to require a separate civil action
to still be filed considering that the facts to be proved in the civil case
have already been established in the criminal proceedings where the
accused was acquitted. Due process has been accorded the accused.
He was, in fact, exonerated of the criminal charged. The constitutional
presumption of innocence called for more vigilant efforts on the part of
prosecuting attorneys and defense counsel, a keener awareness by all
witnesses of the serious implications of perjury, and a more studied
consideration by the judge of the entire records and of applicable
statutes and precedents. To require a separate civil action simply
because the accused was acquitted would mean needless clogging of
court dockets and unnecessary duplication of litigation with all its
attendant loss of time, effort, and money on the part of all concerned.
The trial court found the following facts clearly established by the
evidence adduced by both the prosecution and the defense:
xxx xxx xxx
(9) In the morning of February 8, 1964, then Chief
Galdones, complying with the instructions
contained in said Memorandum No. 32 of the
Mayor, and upon seeing that Antonio Vergara had
not vacated the premises in question, with the aid
of his policemen, forced upon the store or stall and
ordered the removal of the goods inside the store
of Vergara, at the same time taking inventory of
the goods taken out, piled them outside in front of
the store and had it cordoned with a rope, and
after all the goods were taken out from the store,
ordered the demolition of said stall of Antonio
Vergara. Since then up to the trial of this case, the
whereabouts of the goods taken out from the store
nor the materials of the demolished stall have not
been made known.
The respondent Court of Appeals made a similar finding that:
On the morning of February 8th, because the said
Vergaras had not up to that time complied with the
order to vacate, the co-accused Chief of Police
Galdones and some members of his police force,
went to the market and, using ax, crowbars and
hammers, demolished the stall of the Vergaras
who were not present or around, and after having
first inventoried the goods and merchandise found
therein, they had them brought to the municipal
building for safekeeping. Inspite of notice served
upon the Vergaras to take possession of the
goods and merchandise thus taken away, the
latter refused to do so.
The loss and damage to the Vergaras as they
evaluated them were:
Cost of stall construction
P1,300.00
Value of
furniture
and
equipmen
t
judgment
destroyed
300.00
Value of goods and
equipment taken 8,000.00
P9,600.00
It is not disputed that the accused demolished the
grocery stall of the complainants Vergaras and
carted away its contents. The defense that they
did so in order to abate what they considered a
nuisance per se is untenable, This finds no
support in law and in fact. The couple has been
paying rentals for the premises to the government
 which allowed them to lease the stall. It is,
therefore, farfetched to say that the stall was a
nuisance per se which could be summarily abated.
The petitioners, themselves, do not deny the fact that they caused the
destruction of the complainant's market stall and had its contents
carted away. They state:
On February 8, 1964, despite personal pleas on
Vergaras by the Mayor to vacate the passageways
of Market Building No. 3, the Vergaras were still in
the premises, so the petitioners Chief of Police
and members of the Police Force of Jose
Panganiban, pursuant to the Mayor' 6 directives,
demolished the store of the Vergaras, made an
inventory of the goods found in said store, and
brought these goods to the municipal building
under the custody of the Municipal Treasurer, ...
The only supposed obstacle is the provision of Article 29 of the Civil
Code, earlier cited, that "when the accused in a criminal prosecution is
acquitted on the ground that his guilt has not been proved beyond
reasonable doubt, a civil action for damages for the same act or
omission may be instituted." According to some scholars, this provision
of substantive law calls for a separate civil action and cannot be
modified by a rule of remedial law even in the interests of economy and
simplicity and following the dictates of logic and common sense.
As stated by retired Judge J. Cezar Sangco:
... if the Court finds the evidence sufficient to
sustain the civil action but inadequate to justify a
conviction in the criminal action, may it render
judgment acquitting the accused on reasonable
doubt, but hold him civilly liable nonetheless? An
affirmative answer to this question would be
consistent with the doctrine that the two are
distinct and separate actions, and win (a) dispense
with the reinstituting of the same civil action, or
one based on quasi-delict or other independent
civil action, and of presenting the same evidence:
(b) save the injured party unnecessary expenses
in the prosecution of the civil action or enable him
to take advantage of the free services of the fiscal;
and (c) otherwise resolve the unsettling
implications of permitting the reinstitution of a
separate civil action whether based on delict, or
quasi-delict, or other independent civil actions.
... But for the court to be able to adjudicate in the
manner here suggested, Art. 29 of the Civil Code
should be amended because it clearly and
expressly provides that the civil action based on
the same act or omission may only be instituted in
a separate action, and therefore, may not
inferentially be resolved in the same criminal
action. To dismiss the civil action upon acquittal of
the accused and disallow the reinstitution of any
other civil action, would likewise render,
unjustifiably, the acquittal on reasonable doubt
without any significance, and would violate the
doctrine that the two actions are distinct and
separate.
In the light of the foregoing exposition, it seems
evident that there is much sophistry and no
pragmatism in the doctrine that it is inconsistent to
award in the same proceedings damages against
the accused after acquitting him on reasonable
doubt. Such doctrine must recognize the distinct
and separate character of the two actions, the
nature of an acquittal on reasonable doubt, the
vexatious and oppressive effects of a reservation
or institution of a separate civil action, and that the
injured party is entitled to damages not because
the act or omission is punishable but because he
was damaged or injured thereby (Sangco,
Philippine Law on Torts and Damages, pp. 288-
289).
We see no need to amend Article 29 of the Civil Code in order to allow
a court to grant damages despite a judgment of acquittal based on
reasonable doubt. What Article 29 clearly and expressly provides is a
remedy for the plaintiff in case the defendant has been acquitted in a
criminal prosecution on the ground that his guilt has not been proved
beyond reasonable doubt. It merely emphasizes that a civil action for
damages is not precluded by an acquittal for the same criminal act or
omission. The Civil Code provision does not state that the remedy can
be availed of only in a separate civil action. A separate civil case may
be filed but there is no statement that such separate filing is the only
and exclusive permissible mode of recovering damages.
There is nothing contrary to the Civil Code provision in the rendition of
a judgment of acquittal and a judgment awarding damages in the same
criminal action. The two can stand side by side. A judgment of acquittal
operates to extinguish the criminal liability. It does not, however,
extinguish the civil liability unless there is clear showing that the act
from which civil liability might arise did not exist.
A different conclusion would be attributing to the Civil Code a trivial
requirement, a provision which imposes an uncalled for burden before
one who has already been the victim of a condemnable, yet non-
criminal, act may be accorded the justice which he seeks.
We further note the rationale behind Art. 29 of the Civil Code in arriving
at the intent of the legislator that they could not possibly have intended
to make it more difficult for the aggrieved party to recover just
compensation by making a separate civil action mandatory and
exclusive:
The old rule that the acquittal of the accused in a
criminal case also releases him from civil liability is
one of the most serious flaws in the Philippine
legal system. It has given rise to numberless
instances of miscarriage of justice, where the
acquittal was due to a reasonable doubt in the
mind of the court as to the guilt of the accused.
The reasoning followed is that inasmuch as the
civil responsibility is derived from the the criminal
offense, when the latter is not proved, civil liability
cannot be demanded.
This is one of those cases where confused
thinking leads to unfortunate and deplorable
consequences. Such reasoning fails to draw a
clear line of demarcation between criminal liability
and civil responsibility, and to determine the logical
result of the distinction. The two liabilities are
separate and distinct from each other. One affects
the social order and the other, private rights. One
is for the punishment or correction of the offender
while the other is for reparation of damages
suffered by the aggrieved party... it is just and
proper that, for the purposes of the imprisonment
of or fine upon the accused, the offense should be
proved beyond reasonable doubt. But for the
purpose of indemnifying the complaining party,
why should the offense also be proved beyond
reasonable doubt? Is not the invasion or violation
of every private right to be proved only by
preponderance of evidence? Is the right of the
aggrieved person any less private because the
wrongful act is also punishable by the criminal
law? (Code Commission, pp. 45-46).
A separate civil action may be warranted where additional facts have to
be established or more evidence must be adduced or where the
criminal case has been fully terminated and a separate complaint
would be just as efficacious or even more expedient than a timely
remand to the trial court where the criminal action was decided for
further hearings on the civil aspects of the case. The offended party
may, of course, choose to file a separate action. These do not exist in
this case. Considering moreover the delays suffered by the case in the
trial, appellate, and review stages, it would be unjust to the
complainants in this case to require at this time a separate civil action
to be filed.
With this in mind, we therefore hold that the respondent Court of
Appeals did not err in awarding damages despite a judgment of
acquittal.
WHEREFORE, we hereby AFFIRM the decision of the respondent
Court of Appeals and dismiss the petition for lack of merit.
SO ORDERED.
JOSEPHINE M. SANCHEZ, Petitioner,
vs.
FAR EAST BANK AND TRUST COMPANY,1 Respondent.
DECISION
PANGANIBAN, J.:
t bottom, the resolution of this case hinges on the credibility of the
witnesses and their testimonies. Since the factual findings of the lower
courts are disparate, this Court painstakinglyCheck No. Date Amount Exhibit
reviewed the records. It found no sufficient reason to disbelieve the      
well-explained findings and equally logical conclusions of the trial court. 10/13/92 P100,000.00 ‘K’
The evidence proffered by respondent even corroborated relevant
portions of those of petitioner. Thus, the evidence supported the ruling 10/20/92 150,000.00 ‘L’
of the trial court that the acquittal of petitioner was based on its 11/17/92 50,000.00 ‘M’
reasonable finding that she had not committed the crime imputed to 11/26/92 190,000.00 ‘N’
her. Consequently, she incurred no civil liability for the alleged offense. 12/09/92 200,400.00 ‘O’
The Case 12/12/92 220,000.00 ‘P’
Before us is a Petition for Review2 under Rule 45 of the Rules of Court, 01/04/93 210,000.00 ‘Q’
seeking to reverse the July 31, 2001 Decision 3 and the August 30,
01/18/93 200,000.00 ‘R’
2002 Resolution4 of the Court of Appeals (CA) in CA-GR CV No.
53715. The challenged Decision disposed as follows: 02/01/93 180,000.00 ‘S’
"WHEREFORE, the assailed order is REVERSED and SET ASIDE. 02/26/93 180,000.00 ‘T’
[Petitioner] JOSEPHINE SANCHEZ is hereby ordered to pay 03/08/93 200,000.00 ‘U’
[Respondent] Far East Bank and Trust Company, the amount of One 03/19/93 200,000.00 ‘V’
Million One Hundred Eighty Seven Thousand Five Hundred Thirty 04/01/93 150,000.00 ‘W’
Pesos and Eighty Six Centavos (₱1,187,530.86) as actual damages.
04/20/93 100,000.00 ‘X’
This is without prejudice to [petitioner]’s recourse of reimbursement
from the other persons who participated in the transactions." 5 04/27/93 150,000.00 ‘Y’
The assailed Resolution denied reconsideration. 05/13/93 150,000.00 ‘Z’
The Facts "[Petitioner allegedly] confessed to Chin that she tampered with the
The antecedents of the case are related by the CA as follows: CIFL account. Chin referred the matter to the FEBTC’s audit division
"It is undisputed that Kai J. Chin was the director and representative of for further investigation. All the cashier’s checks, funded by an
Chemical Bank. Its subsidiary, the Chemical International Finance unauthorized debit against the CIFL account, as well as the
Limited (CIFL), was an investor in [Respondent] Far East Bank and corresponding applications for their issuance were examined at the
Trust [C]ompany (FEBTC), x x x. In representing the interest of CIFL in Philippine National Police Crime Laboratory. All of Chin’s signatures
FEBTC, Chin was made a director and sr. vice president of FEBTC. borne on all the checks and applications were found to have been
[Petitioner] Josephine Sanchez was, in turn, assigned as secretary of good forgeries. With the damage done, FEBTC had to reimburse the
Chin. CIFL also maintained a checking account (CA# 0009-04212-1) in CIFL account and ultimately suffered the total misappropriated amount
FEBTC’s investment arm, the Far East Bank Investment, Inc. (FEBII). of ₱3,787,530.86."6
Chin was one of the authorized signatories in the said current and The main defense of petitioner consisted of a denial of the forgeries.
money market accounts. She asserted that she had deposited the checks to her account, under
"According to [respondent], [petitioner] made unauthorized withdrawals the authority and instructions of Kai Chin. Afterwards, petitioner
from the account of CIFL in FEBTC through the use of forged or withdrew the amounts and gave them to him.7
falsified applications for cashier’s checks which were deposited to her Kai Chin denied that he had given that authority to her, and insisted
personal accounts. Once credited to her account, she withdrew the that she had signed the subject documents. However, he did not rebut
amounts and misappropriated, misapplied and converted them to her her testimony that she had turned over the proceeds of the checks to
personal benefit and advantage, to the damage of FEBTC. him.
"[Petitioner supposedly] employed three modes in the said fraudulent Ruling of the Trial Court
transactions, namely: The Regional Trial Court (RTC) did not find Kai Chin to be a credible
"In the First Mode, [petitioner] caused the issuance of a cashier’s witness. According to the RTC, FEBTC’s records showed that, contrary
check payable to ‘bearer’ with number 461390, dated September 29, to his testimony, he had expressly authorized petitioner to transact
1992, in the sum of ₱250,040.86. This is the subject of Crim. Case No. matters concerning Chemical Bank’s account. 8
93-126175. She presented a forged letter of confirmation bearing the The trial judge doubted the integrity of the findings and the report of the
forged signature of Chin addressed to Beatriz Bagsit, Cash PNP handwriting expert. He noted the nonuse during the handwriting
Department Head of FEBTC. This check was paid pursuant to the said analysis of Kai Chin’s contemporaneous signatures. Besides, the
confirmation. [Petitioner] immediately deposited this check to her examination was initiated unilaterally by FEBTC officials, who had
FEBTC Savings Account No. 0101-39109-9 and on September 30, submitted sample signatures of their own choice.9
1992, she withdrew ₱200,040.86. The RTC added that the allegedly fraudulent transactions had occurred
"Under the Second Mode, [petitioner] filed applications forms to from September 1992 to June 1993, with the use of
purchase cashier’s checks payable to her, [with] Chin as the supposed documents bearing the signatures of other officials and employees of
purchaser. Said applications were accompanied by a forged respondent. In other words, all the questioned transactions had been
memorandum of Chin confirming [petitioner] as the payee-beneficiary. approved and allowed by the bank officials concerned, despite
After the approval by Bagsit of the applications and memoranda, apparent procedural infirmities.10 Yet, only petitioner was indicted.
checks were issued, as follows: Thus, the RTC disposed as follows:
Check No. Date Amount Exhibit "FOR ALL THE FOREGOING CONSIDERATIONS, the Court finds and
461739 10/22/92 ₱489,450.00 ‘F’ so holds that the prosecution failed to prove the culpability of the
461963 04/11/92 160,550.00 ‘G’ accused in any of these cases with moral certainty, and consequently
464801 05/24/93 180,090.00 ‘H’ acquits her from all the charges, with costs de oficio. Her bail bonds
465405 06/30/93 107,400.00 ‘I’ are released and the hold departure order as well as the order of
"In compliance with bank procedures [petitioner] signs the checks attachment are lifted."11
twice, one as an endorsement and two as proof of receipt of the Subsequently, respondent filed a Motion for Reconsideration of the civil
proceeds which she then deposited to her FEBTC account. aspect of the RTC Decision. In an Order 12 dated March 20, 1996, the
"The Third Mode, was frequently used which involved checks payable trial court denied reconsideration. Quoting portions of its Decision, the
to Chin. RTC said in its Order that the acquittal of the accused "was not exactly
"[Petitioner] was designated as Chin’s representative to purchase on the ground of ‘reasonable doubt,’ but that she was not the author of
cashier’s checks using applications which bore forged signatures of the frauds allegedly perfpetrated (sic)." Thus, it held that "no civil
Chin as a purchaser and the payee. liability against her may properly be made."
"After Bagsit has approved the application and has checked the
authenticity of Chin’s signatures, a cashier’s check is issued. Then Ruling of the Court of Appeals
[petitioner] claimed the check, left then came back soon to encash it. Granting respondent’s appeal, the appellate court ruled that the trial
The check when presented for encashment already had two signatures court’s judgment of acquittal did not preclude recovery of civil
of Chin on its dorsal side, both signatures being forged. The first forged indemnity based on a quasi delict. 13 The CA held that the outcome of
signature represents Chin’s endorsement of the check as payee and the criminal case, whether conviction or acquittal, was inconsequential
the second, Chin’s purported receipt of the check’s proceeds. The in adjudging civil liability arising from the same act that could also be
teller pays the value of the check only if initialed by Bagsit. considered a quasi delict. Moreover, FEBTC did not have to reserve its
"In this mode, 16 checks were issued, to wit:
right to file a separate civil action for damages, because the law had
already made that reservation on respondent’s behalf.14
The CA further held that, contrary to the trial court’s clarifications in its
March 20, 1996 Order, petitioner had been acquitted merely on
reasonable doubt arising from insufficiency of evidence to establish her
identity as perpetrator of the crime. Her acquittal was not due to the
nonexistence of the crime for which civil liability could arise. 15 Although
it agreed with the RTC that forgery
had not been satisfactorily proven by FEBTC, the CA nonetheless
found petitioner liable for her failure to turn over to respondent the
proceeds of the checks. The failure supposedly constituted an
actionable fraud.16
Thus, the appellate court ordered petitioner to pay respondent
₱1,187,530.86 as actual damages, representing the value of the
checks that had been paid in her name and to her account. 17
Hence, this Petition.18
The Issues
Petitioner raises the following issues for this Court’s consideration:
"(1) Whether the judgment of conviction had already become final at
the time the motion for reconsideration of the civil aspect was filed by
the complainant-appellant?
"(2) Whether an appeal on the civil aspect may be made from a
decision in a criminal case acquitting the accused for being not the
author of the crime?
"(3) Whether a separate civil action is necessary to be instituted after
the accused is acquitted in a criminal case based on reasonable
doubt?
"(4) Whether the civil aspect of the criminal offenses where the
accused was acquitted may be pursued by a party other than the
offended parties? Otherwise stated, whether the civil liability may be
pursued by a party which is not a real party in interest after the
acquittal of the accused of the offenses charged?"19
The Court’s Ruling
The Petition is meritorious.
First Issue:
Timeliness of the
Motion for Reconsideration
Because the RTC Decision had been promulgated on December 15,
1995, and respondent’s Motion for Reconsideration was filed two
months after, on February 14, 1996, petitioner instantly concludes that
the Motion was filed out of time.
Respondent, however, contends that the time for filing the Motion
should be counted from February 1, 1996 -- when it received
the trial court’s Decision -- not from the date of notice to the public
prosecutor.20 To determine the period for filing from the latter date
would undermine the dual aspects of a criminal litigation, in which the
right of the offended party to appeal the civil aspect is independent of
the decision of the accused on whether or not to appeal the case. 21
We uphold respondent on this issue. Section 6 of Rule 122 of the
Rules of Court states as follows:
"SEC. 6. When appeal to be taken. – An appeal must be taken within
fifteen (15) days from promulgation of the judgment or from notice of
the final order appealed from. This period for perfecting an appeal shall
be suspended from the time a motion for new trial or reconsideration is
filed until notice of the order overruling the motion has been served
upon the accused or his counsel at which time the balance of the
period begins to run."22
Clearly, the period available to the accused for filing an appeal is
fifteen (15) days from the promulgation of the judgment or from notice
of the final order appealed from. As early as Landicho v. Tan,23 the
Court has held that one who desires a review of a criminal case must
appeal within fifteen days from the date the decision or judgment was
announced in open court in the presence of the accused, or was
promulgated in the manner set forth in Section 6 of Rule 116 (now
Section 624 of Rule 120) of the Rules of Court. This ruling was
reiterated in People v. Tamani,25 in which the Court has further clarified
that the word promulgation in the old provision should be construed as
referring to "judgment;" and notice, to "order."26
The above ruling, however, is relevant and applicable to the accused
who appeals. In the present case, we are confronted with the Motion
filed by the private offended party for reconsideration of the civil aspect
of the RTC judgment. It should also be noted that she was not required
to be present during the promulgation of the judgment.
In a long line of cases27 as far back as People v. Ursua,28 this Court
has ruled that the appeal period accorded to the accused should also
be available to the offended party who seeks redress of the civil aspect
of a decision. Similarly, courts may apply this ruling to the filing of a
motion for reconsideration of a judgment. For them to do so will be
consistent with this Court’s policy of giving lower tribunals a chance to
rectify their possible errors29 and thereby promote the speedy and just
disposition of controversies.
The relevant question is, when should the period for the filing of a
motion by a private offended party begin? In Neplum v. Orbeso,30 this
Court explained that the period begins to toll upon service of the notice
of judgment upon the offended party. Thus:
"Indeed, the rules governing the period of appeal in a purely civil action
should be the same as those covering the civil aspects of criminal
judgments. If these rules are not completely identical, the former may
be suppletory to the latter. x x x. Being akin to a civil action, the present
appeal may be guided by the Rules on Civil Procedure."31
In the case before us, respondent undisputedly claims that petitioner
received notice of the RTC Decision only on February 1, 1996.
Records show that FEBTC filed its Motion for Reconsideration on
February 14, 1996. The Motion was thus filed within the reglementary
period.
Second, Third and Fourth Issues:
Civil Liability in Case of Acquittal
Being interrelated, the second, third and fourth issues will be discussed
together.
Petitioner contends that her acquittal was not based merely on
reasonable doubt, but on the determination that she was not the author
of the imputed felonies. She reiterates the trial court’s ruling in its
March 20, 1996 Order that she could not be held civilly liable, because
she was not responsible for the crimes charged.
Arguing on the assumption that she was acquitted on the basis of
reasonable doubt, petitioner explains that the appellate court was
nevertheless precluded from taking cognizance of the civil aspect of
the case, as a separate civil action should have been filed after the
judgment of acquittal. She contends that Article 29 of the Civil Code,
which mandates the courts to make a finding on the civil liability in case
of an acquittal based on reasonable ground, applies only to situations
when a crime has been committed but the accused is exempt from
criminal liability under the instances enumerated in Article 12 of the
Revised Penal Code (RPC).32
Petitioner finally argues that the real party-in-interest is not respondent,
but Chemical Bank and/or Kai Chin, the owners of the accounts from
which the withdrawals were made. 33
Respondent, on the other hand, asserts that the offended party may
appeal the civil aspect of the criminal proceeding despite the judgment
of acquittal.34
Civil Action Deemed Instituted
in the Criminal Proceeding
Article 100 of the RPC states that every person criminally liable for a
felony is also civilly liable. This rule holds true, except in instances
when no actual damage results from an offense, such as espionage,
violation of neutrality, flight to an enemy country, and crime against
popular representation.35
Clearly, the extinction of the penal liability does not always carry with it
the extinction of the civil.36 According to Article 29 of the Civil Code, if
the acquittal is made on the ground that the guilt has not been proved
beyond reasonable doubt, the accused may be held civilly liable for
damages arising from the same act or omission constituting the
offense. As in any ordinary civil case, the liability may be established
by a mere preponderance of evidence.
Section 1 of Rule 111 of the 1985 Rules of Court, the prevailing law
during the trial of this case below, 37 provided the consequences of acts
that produced both civil and criminal liabilities, as follows:
"SECTION 1. Institution of criminal and civil actions. – (a) When a
criminal action is instituted, the civil action for the recovery of civil
liability arising from the offense charged shall be deemed instituted
with the criminal action unless the offended party waives the civil
action, reserves the right to institute it separately or institutes the civil
action prior to the criminal action.
"Such civil action includes recovery of indemnity under the Revised
Penal Code, and damages under Articles 32, 33, 34 and 2176 of the
Civil Code of the Philippines arising from the same act or omission of
the accused.
x x x x x x x x x."
Clearly, under the foregoing 1985 rule, an action for the recovery of
civil liability arising from an offense charged is necessarily included in
the criminal proceedings, unless (1) there is an express waiver of the
civil action, or (2) there is a reservation to institute a separate one, or
(3) the civil action was filed prior to the criminal complaint.
For this purpose, the offended parties are allowed to intervene in the
criminal proceedings, but solely to enforce their right to claim
indemnification for damages arising from the criminal act. 38 In Roa v.
De la Cruz,39 in which the offended party failed to submit evidence of
damages despite having participated in the criminal proceedings, we
had the occasion to rule in this wise:
"x x x. For such failure, she has only herself or her counsel to blame.
Of course, she could have still filed a motion for reconsideration or an
appeal to rectify the error. But this she failed to do, thus allowing the
decision to become final and executory. Under the principle of res
judicata, that judgment is conclusive as to future proceedings at law
not only as to every matter which was offered and received to sustain
the claim or demand, but as to any other admissible matter that could
have been offered for that purpose."
In the present case, the original action involved a prosecution for
estafa or swindling through falsification of commercial documents, an
offense defined under the RPC. Records do not show -- and
respondent does not claim -- the presence of any of the three
instances precluding the automatic institution of the civil action together
with the criminal complaint. Ineluctably, respondent’s right to damages,
if any, was deemed prosecuted in the criminal proceeding. Thus, a
separate civil action may no longer be instituted.
Appeal of the Civil Aspect of the
Decision Acquitting the Accused
The consequences of an acquittal on the civil liability of the accused
are discussed by the Court in Manantan v. CA40 in this wise:
"Our law recognizes two kinds of acquittal, with different effects on the
civil liability of the accused. First is an acquittal on the ground that the
accused is not the author of the act or omission complained of. This
instance closes the door to civil liability, for a person who has been
found to be not the perpetrator of any act or omission cannot and can
never be held liable for such act or omission. There being no delict,
civil liability ex delicto is out of the question, and the civil action, if any,
which may be instituted must be based on grounds other than the
delict complained of. This is the situation contemplated in Rule 111 of
the Rules of Court. The second instance is an acquittal based on
reasonable doubt on the guilt of the accused. In this case, even if the
guilt of the accused has not been satisfactorily established, he is not
exempt from civil liability which may be proved by preponderance of
evidence only. This is the situation contemplated in Article 29 of the
Civil Code, where the civil action for damages is ‘for the same act or
omission.’ x x x."
In Salazar v. People,41 the Court further expounded thus:
"The acquittal of the accused does not prevent a judgment against him
on the civil aspect of the case where (a) the acquittal is based on
reasonable doubt as only
preponderance of evidence is required; (b) where the court declared
that the liability of the accused is only civil; (c) where the civil liability of
the accused does not arise from or is not based upon the crime of
which the accused was acquitted. Moreover, the civil action based on
the delict is extinguished if there is a finding in the final judgment in the
criminal action that the act or omission from which the civil liability may
arise did not exist or where the accused did not commit the acts or
omission imputed to him.
"If the accused is acquitted on reasonable doubt but the court renders
judgment on the civil aspect of the criminal case, the prosecution
cannot appeal from the judgment of acquittal as it would place the
accused in double jeopardy. However, the aggrieved party, the
offended party or the accused or both may appeal from the judgment
on the civil aspect of the case within the period therefor."
Based on the foregoing jurisprudence, it is settled that the private
offended party may appeal the civil aspect of the judgment despite the
acquittal of the accused. But this recourse may prosper only if the
nature of the trial court’s judgment falls under any of the three
categories stated in Salazar.
Acquittal of Petitioner Due to the
Noncommission of the Imputed Acts
A close scrutiny of the RTC Decision and Order leads us to the
conclusion that petitioner did not commit the crime imputed to her.
Hence, her acquittal likewise extinguished the action for her civil
liability.
In support of this conclusion, we initially quote at length these findings
of the trial court:
"Re: Crim. Cases No. 93-126175. – This case involves the bearer
check for the amount of ₱250,040.86[.] This is the earliest questionable
transaction allegedly committed by the accused as it happened on 29
September 1992. According to FEBTC records, this was the initial
transaction concerning the Chemical account wherein a cashier’s
check payable to Chemical (CIF) was used by the accused to purchase
another cashier’s check payable to ‘bearer’ which was later deposited
to the account of accused. During the investigation by the bank’s
Investigation Committee, Mrs. Bagsit averred that she confirmed the
transaction with Kai Chin and which was later on supported by an
authorization letter from Kai Chin. (p. 11, Exh. 1).
"There is no dispute that the check was deposited to the personal
account of the accused (Exhs. C, C-1 and D) and part of the amount
thereof was subsequently withdrawn by her (Exh. E), but accused
asserted that the deposit of said check to her account and the
subsequent withdrawal of its amount were upon the authority and
instructions of Kai Chin, and that the withdrawn amount was actually
given by her to Kai Chin.
"Although Kai Chin denied having signed the confirmation
memorandum (Exh. B), there is absolutely no evidence on record that
the money was never turned over to Kai Chin. Kai Chin did not testify,
on direct evidence or on rebuttal, concerning this aspect of the case. x
x x.
"Re: Crim. Cases Nos. 93-126172, 93-126178, 93-126189 and 93-
126190. -- These four cases involve the Cashier’s Checks applied for
and made payable to the accused (Exhs. G-1, F-2, H-2 and I-2). Exhs.
G-1 and F-2 were encashed by the accused because they bear at their
back two signatures of hers, and according to the witnesses for the
prosecution the first of such signatures constitutes the indorsement
while the second signifies receipt of the proceeds of the payment
thereof. On the other hand, Exhs. H-2 and I-2 were deposited by her in
her personal account. According to the accused the drawing of the
checks in her name and their encashments and deposit to her account
were upon the authority and instructions of Kai Chin, and that the
values thereof were all turned over to Kai Chin.
xxxxxxxxx
"Re: Crim. Case No. 93-126171. – This case involves a Cashier’s
Check applied for and made payable to Kai Chin, signed twice at the
back but accused nonetheless signed for the receipt of the payment
thereof. x x x While Kai Chin denied on direct evidence that he signed
the application for the purchase of this check and also the back of the
check itself, there is also no showing that the value thereof did not
reach him. Accused asserted that this check was applied for and
encashed upon the authority and instruction of Kai Chin, and that the
value thereof was turned over to the latter.
xxxxxxxxx
"Re: the rest of the other criminal cases. -- The remaining fifteen other
cases involve checks applied for and drawn in the name of Kai Chin
and twice signed at the back. As intimated earlier, the first signature at
the back of the check constitutes the indorsement thereof while the
second signifies receipt of the payment of the value.
"The only intervention of the accused concerning these checks, as
appearing in the documentary exhibits, was her being named as the
representative of the purchaser and she must have picked up the
checks for and in behalf of the purchaser. (See Exhs. P, N, O, K, L, S,
T, M, U, V, W, X, Y and Z). There is no indication, at least from the
documents of the prosecution, that accused had a hand in the
encashments of the checks, otherwise, she should have been made to
sign, as what was done in the case of the check marked as Exh. Q-
1."42
As can be clearly gleaned from the above, petitioner consistently
claimed that she had acted merely upon the instructions and authority
of her superior, Kai Chin. While admitting that she had deposited the
proceeds of some of the checks to her personal account, she firmly
insisted that she subsequently withdrew the cash proceeds and turned
them over to him. She denied -- and the records do not show -- that
she had ever appropriated those moneys for her personal gain.
On the other hand, as the trial judge clearly noted, Kai Chin did not
even bother to rebut the statement of petitioner that she had turned
over the proceeds of the checks to him.43 All he asserted was that he
had neither signed the applications for the purchase of the checks nor
endorsed those checks. His credibility was assessed by the judge thus:
"Credibility of Kai Chin. – It must be noticed that, with the exception of
the ‘bearer’ check involved in Crim. Case No. 93-126175, the value of
the Cashier’s Checks involve[d] were debited from the Chemical
account. Kai Chin is undisputably one of the authorized signatories to
the Chemical account, and under ordinary course of things, he must be
the payee and/or beneficiary of the checks.
"Initially, Kai Chin sweepingly testified as follows:
‘Q: In her capacity as your secretary, when she was your secretary did
Josephine Sanchez have anything to do with the Chemical
International Finance account?
‘A: No, sir. (tsn, p. 9, 8 Nov 1994)’
"The records of the bank and FEBII, however, show otherwise. Thus,
as early as April, 1992, Kai Chin had already authorized the accused to
transact matters concerning the Chemical account, through a
memorandum he sent to Mrs. Beatriz Bagsit and one Ms. Enriquez,
reading as follows:
‘This is to request for the following:
‘1) Ms. Enriquez to partially terminate the amount of ₱250,000.00 from
the
CIF’s placement (₱3M) and credit the same to SA#0101-58459-8
maintained at Intramuros Branch.
‘2) Ms. Bagsit to debit SA#0101-58459-8 for ₱290,000.00 and entrust
the same to my Secretary, Ms. Jo Sanchez for proper disposition.
‘In view of my home leave/business trip scheduled on April 29-June 8,
1992, the above requests will be confirmed by Ms. Sanchez upon my
instructions before the end of May, 1992. (Memo [dated] 28 April 1992,
attached as Annex B to Exh. 2.)’
"Kai Chin never denied his signature on this document, either on direct
evidence or on rebuttal (as he was not presented as a rebuttal
witness)."44
The authority conferred by Kai Chin upon petitioner was also borne out
by the reports of the FEBTC Investigating Committee, pertinent parts of
which were quoted in the RTC Decision as follows:
"4. Initial interview with the officers of FEBII disclosed the following:
‘4.1 In January, 1992, Mr. Kai Chin personally went to the office of MS.
URSULA A. ALANO, Vice President of FEBII and allegedly informed
the latter that he will directly manage the CIF [also referred to as CIFL
or Chemical] account. Mr. Chin informed MS ALANO that instructions
concerning the account will either originate from his or his
representative, MS. J. M. SANCHEZ;
‘Based on Mr. Chin’s instructions, placements
/preterminations/payments of the account were transacted by Mr. Chin
himself or his authorized representative, J. SANCHEZ. (p. 9, Exh. 1,
underscoring supplied; see also p. 11 of the same exhibit.)’
"These facts were recited in the Memorandum of Ms. U.A. Ulano,
attached as Annex ‘B’ to Exh. 1, which reads as follows:
‘Facts: Due to the transfer of Mr. Kai Chin to FEBTC Head Office in
Intramuros last January 1992, he personally went to see me in my
office to inform me that he was directly managing the CIF account. He
also informed me that instructions concerning the account will either
originate from him or his authorized representative, Ms. J. M. Sanchez.
‘Based on the given instructions of Mr. Kai Chin,
placements/preterminations/payments of the account were transacted
by Mr. Kai Chin himself or his authorized representative, Ms. J. M.
Sanchez. [Underscoring by the RTC.]’"45
The above evidence led the trial court to conclude that "Kai Chin,
definitely, was less candid to the [c]ourt when he testified" 46 that
petitioner had nothing to do with the CIFL account.
As regards petitioner’s testimony, the trial judge observed that she had
firmly and straightforwardly echoed the material allegations in her
Counter-Affidavit; and that, furthermore, her testimony had been
"corroborated by the People’s exhibits themselves." 47 Indeed, her claim
that she had prior authorization from Kai Chin to undertake the
questioned transactions was supported by no less than the prosecution
evidence.
Thus, the trial court emphatically concluded that petitioner "was not the
author of the frauds allegedly perfpetrated [sic]," 48 if any. The Court of
Appeals concurred in that conclusion when it categorically held thus:
"We rule out the issue of forgery as this was not satisfactorily proved x
x x."49
Under Section 2(b) of Rule 111 of the Revised Rules of Court, a finding
in a final judgment that the fact from which civil liability may arise does
not exist carries with it the extinction of the liability. Thus, the critical
issue in the present appeal is this: was the civil liability of petitioner
duly established by the evidence?
Answering in the affirmative, the CA explained that a single act or
omission may produce two forms of civil liability: one is for ex delicto or
that which arises from a crime under our penal statutes; and the other
is for a quasi delict or culpa extra-contractual. In the present case, civil
liability ex delicto was foreclosed by the acquittal. Nonetheless,
"[a]lthough the act from which the civil liability might arise did not exist
due to [petitioner’s] acquittal, [respondent’s] cause of action makes out
a case of quasi delict."50
Contrary to the trial court, the CA disbelieved petitioner’s assertions
that she had turned over the proceeds of the checks to Kai Chin.
Granting that she was authorized to encash the checks, she
supposedly had no like authority to deposit the proceeds to her
personal bank account. The appellate court concluded that, in breach
of Article 3351 of the Civil Code, "she abused the confidence reposed in
her by [respondent] in the performance of her duty." 52 Thus, the CA
ordered her to pay respondent the amount of ₱1,187,530.86 as actual
damages, representing the total value of five checks paid in her name
and to her account.53
In view of the conflicting findings of the lower courts as regards the
credibility of the witnesses, we invoke the time-honored rule that "the
assessment of the credibility of witnesses and their
testimonies is a matter best undertaken by the trial court because of its
unique opportunity to observe the witnesses firsthand and note their
demeanor, conduct and attitude under grilling examination. These are
the most significant factors in evaluating the sincerity of witnesses and
in unearthing the truth, especially in the face of conflicting testimonies.
Through its observations during the entire proceedings, the trial court
can be expected to determine, with reasonable discretion, whose
testimony to accept and which witness to disbelieve." 54
Barring arbitrariness and oversight of facts that might affect the result
of the case otherwise, the RTC’s assessment of the witnesses and
their testimonies in this case binds even this Court. 55 In any event, we
scoured the records and, unlike the CA, we found no sufficient reason
to reject the trial court’s assessment. There was no arbitrariness or
oversight of any fact or circumstance of weight and influence to justify
a different conclusion.
Moreover, the CA based its imposition of civil liability upon petitioner on
her supposed abuse of her employer’s confidence. Granting for the
sake of argument that she indeed forged the checks and
misappropriated the proceeds to her personal benefit, it must be
recalled that it was Kai Chin’s signatures that she purportedly forged;
and CIFL’s account that she, in effect, misappropriated. Be it
remembered that respondent’s own documentary evidence
unequivocally concurred in the assertion of petitioner that Kai Chin had
given her express authority to transact CIFL’s account on his behalf.
Consequently, it was his, not respondent’s, confidence that she had
exploited. In other words, the factual premises of the CA did not
support its conclusion.
In sum, we hold that petitioner’s acquittal was based on the fact that
she had not committed the offense imputed to her. Consequently, she
cannot be held civilly liable. In concluding that she, as well as her
testimony, was credible, the trial court cannot be faulted with
arbitrariness or negligence. Tellingly, her testimony that she turned
over the proceeds of the subject checks to Kai Chin stands unrebutted.
WHEREFORE, the Petition is hereby GRANTED, and the assailed CA
Decision and Resolution SET ASIDE. The December 15, 1995
Decision and the March 20, 1996 Order of the Regional Trial Court of
Manila, Branch 52, are hereby REINSTATED. No pronouncement as
to costs.
SO ORDERED.
ADELA G. RAYMUNDO, EDGARDO R. RAYMUNDO, LOURDES R.
RAYMUNDO, TERESITA N. RAYMUNDO, EVELYN R. SANTOS,
ZENAIDA N. RAYMUNDO, LUIS N. RAYMUNDO, JR. and LUCITA
R. DELOS REYES, petitioners,
vs.
ERNESTO LUNARIA, ROSALINDA RAMOS and HELEN MENDOZA,
respondents.
DECISION
QUISUMBING, J.:
Assailed in this petition for review are the Court of Appeals’ Decision 1
dated October 10, 2005 and the Resolution 2 dated January 10, 2006 in
CA-G.R. CV No. 75593.
The facts in this case are as follows:
Sometime in May 1996, petitioners approached respondent Lunaria to
help them find a buyer for their property situated at Marilao, Bulacan
with an area of 12,126 square meters for the amount of ₱60,630,000.
Respondent Lunaria was promised a 5% agent’s commission in the
event that he finds a buyer. After respondents found a buyer, Cecilio
Hipolito, an "Exclusive Authority to Sell" 3 was executed embodying the
agreement made by the parties. After the corresponding Deed of
Absolute Sale of Real Property 4 was registered in the Registry of
Deeds, a copy thereof was given to the Far East Bank and Trust Co.,
which was then holding in escrow the amount of ₱50,000,000 to be
disbursed or paid against the total consideration or price of the
property.
On February 14, 1997, Ceferino G. Raymundo, one of the co-owners,
advised respondents to go to the bank to receive the amount of
₱1,196,000 as partial payment of their total commission. Also,
respondents were instructed to return after seven days to get the
balance of the commission due them.
On February 21, 1997, respondents returned to the bank. However, the
check covering the balance of their commission was already given by
the bank manager to Lourdes R. Raymundo, the representative of the
petitioners. Respondents tried to get the check from the petitioners,
however, they were told that there is nothing more due them by way of
commission as they have already divided and distributed the balance
of the commissions among their nephews and nieces.
For their part, petitioners counter that there was a subsequent verbal
agreement entered into by the parties after the execution of the written
agreement. Said verbal agreement provides that the 5% agent’s
commission shall be divided as follows: 2/5 for the agents, 2/5 for
Lourdes Raymundo, and 1/5 for the buyer, Hipolito. The share given to
Lourdes Raymundo shall be in consideration for the help she would
extend in the processing of documents of sale of the property, the
payment of the capital gains tax to the Bureau of Internal Revenue and
in securing an order from the court. The 1/5 commission given to
Hipolito, on the other hand, will be used by him for the payment of
realty taxes.
Hence, for failure of the respondents to receive the balance of their
agent’s commission, they filed an action for the collection of a sum of
money before the Regional Trial Court of Valenzuela City, Branch 172.
On January 22, 2002, the trial court rendered a Decision 5 in favor of
the respondents. The dispositive portion of said decision reads:
WHEREFORE, judgment is hereby rendered as follows:
1) Ordering the defendants, jointly and severally, to pay the plaintiffs
the amount of ₱1,834,900.00, representing the unpaid commission,
plus interest thereon at the legal rate from the filing of this case until
fully paid;
2) Ordering the defendants to, jointly and severally, pay the plaintiffs
the amount of ₱200,000.00 as moral damages and the amount of
₱100,000.00 as exemplary damages; and
3) Ordering the defendants [to], jointly and severally, pay the plaintiffs
the amount of ₱150,000.00 as attorney’s fees, plus the costs of suit.
SO ORDERED.6
Aggrieved, petitioners appealed. In a Decision dated October 10, 2005,
the Court of Appeals affirmed the decision of the trial court with the
modification that the amount of moral and exemplary damages
awarded to respondents shall be reduced. The dispositive portion
reads:
WHEREFORE, the appealed Decision dated January 22, 2002 is
affirmed, subject to the modification that the award of moral damages
is reduced to ₱50,000.00 and exemplary damages to ₱25,000.00.
SO ORDERED.7
On October 28, 2005, petitioners filed a Motion for Reconsideration. 8
However, it was denied in a Resolution dated January 10, 2006.
Hence, the instant petition raising the following issues:
I.
THE HONORABLE COURT SERIOUSLY ERRED IN APPLYING THE
PAROLE EVIDENCE RULE IN THIS CASE (DECISION, PAGE 7,
PARAGRAPH 1). THIS PRINCIPLE HAS NO APPLICATION TO THE
FACTS OF THE INSTANT CASE.
II.
FURTHER, IT ERRED IN REQUIRING, ALBEIT IMPLICITLY, THE
PETITIONERS TO ESTABLISH THE VERBAL AGREEMENT
MODIFYING THE EARLIER WRITTEN AGREEMENT (THE
EXCLUSIVE AUTHORITY TO SELL) BY MORE THAN A
PREPONDERANCE OF EVIDENCE (DECISION, PAGE 8). THIS IS
PLAINLY CONTRARY TO LAW THAT MERELY REQUIRES
PREPONDERANCE OF EVIDENCE IN CIVIL CASES.
III.
FINALLY, EVEN CONCEDING FOR THE SAKE OF ARGUMENT
THAT PETITIONERS STILL OWE THE RESPONDENTS THE
"BALANCE" OF THEIR COMMISSION, THE HONORABLE COURT
ERRED IN RULING THE PETITIONERS ARE EACH JOINTLY AND
SEVERALLY [LIABLE] FOR THE PAYMENT OF THE ENTIRE
BROKER’S FEES. THIS RULING HAS NO LEGAL BASIS AND IS
CONTRARY TO ART. 1207 OF THE NEW CIVIL CODE.9
Plainly stated, the issues for resolution are: Did the Court of Appeals
err (1) in applying the parol evidence rule; (2) in requiring petitioners to
establish their case by more than a preponderance of evidence; and
(3) in holding petitioners jointly and severally liable for the payment of
the entire broker’s fees?
Anent the first issue, petitioners contend that the Court of Appeals
erred in applying the parol evidence rule to the facts of the case
because the verbal agreement was entered into subsequent to the
written agreement. Further, they aver that there is no rule that requires
an agreement modifying an earlier agreement to be in the same form
as the earlier agreement in order for such modification or amendment
to be valid.
Conversely, respondents argue that the Court of Appeals did not apply
the parol evidence rule in this case. Although the appellate court stated
and emphasized the general legal principle and rule on parol evidence,
it did not apply the parol evidence rule with regard to the evidence
adduced by the petitioners.
We rule for the respondents. To begin with, we agree with petitioners’
claim that the parol evidence rule does not apply to the facts of this
case. First, the parol evidence rule forbids any addition to or
contradiction of the terms of a written instrument by testimony or other
evidence purporting to show that, "at or before" the execution of the
parties’ written agreement, other or different terms were agreed upon
by the parties, varying the purport of the written contract. 10 Notably, the
claimed verbal agreement was agreed upon not prior to but
"subsequent to" the written agreement. Second, the validity of the
written agreement is not the matter which is being put in issue here.
What is questioned is the validity of the claim that a subsequent verbal
agreement was agreed upon by the parties after the execution of the
written agreement which substantially modified their earlier written
agreement.
Nonetheless, even if we apply the parol evidence rule in this case, the
evidence presented by the petitioners fell short in proving that a
subsequent verbal agreement was in fact entered into by the parties.
We subscribe to the findings of both the trial court and the appellate
court that the evidence presented by petitioners did not establish the
existence of the alleged subsequent verbal agreement. As pointed out
by the trial court:
Note that no written evidence was presented by the defendants to
show that the plaintiffs [herein respondents] agreed to the above-
sharing of the commission. The fact is that the plaintiffs are denying
having ever entered into such sharing agreement. For if the plaintiffs as
sales agents indeed agreed to share the commission they are entitled
to receive by virtue of the Exclusive Authority to Sell with Lourdes G.
Raymundo and Hipolito, it passes understanding why no written
agreement to that effect was ever made. The absence of such written
agreement is mute but telling testimony that no such sharing
arrangement was ever made.11
As to the second issue, petitioners contend that the appellate court
erred in requiring them to prove the existence of the subsequent verbal
agreement by more than a mere preponderance of evidence since no
rule of evidence requires them to do so. In support of this allegation,
petitioners presented petitioner Lourdes Raymundo who testified that
she was given 2/5 share of the commission pursuant to the verbal
sharing scheme because she took care of the payment of the capital
gains tax, the preparation of the documents of sale and of securing an
authority from the court to sell the property.
For their part, respondents counter that the appellate court did not
require petitioners to prove the existence of the subsequent oral
agreement by more than a mere preponderance of evidence. What the
appellate court said is that the petitioners failed to prove and establish
the alleged subsequent verbal agreement even by mere
preponderance of evidence.
Petitioners’ abovecited allegation has no merit. By preponderance of
evidence is meant that the evidence as a whole adduced by one side is
superior to that of the other.12 It refers to the weight, credit and value of
the aggregate evidence on either side and is usually considered to be
synonymous with the term "greater weight of evidence" or "greater
weight of the credible evidence". It is evidence which is more
convincing to the court as worthy of belief than that which is offered in
opposition thereto.13
Both the appellate court and trial court ruled that the evidence
presented by the petitioners is not sufficient to support their allegation
that a subsequent verbal agreement was entered into by the parties. In
fact, both courts correctly observed that if Lourdes Raymundo was in
reality offered the 2/5 share of the agent’s commission for the purpose
of assisting respondent Lunaria in the documentation requirement,
then why did the petitioners not present any written court order on her
authority, tax receipt or sales document to support her self-serving
testimony? Moreover, even the worksheet allegedly reflecting the
commission sharing was unilaterally prepared by petitioner Lourdes
Raymundo without any showing that respondents participated in the
preparation thereof or gave their assent thereto. Even the alleged
payment of 1/5 of the commission to the buyer to be used in the
payment of the realty taxes cannot be given credence since the
payment of realty taxes is the obligation of the owners, and not the
buyer. Lastly, if the said sharing agreement was entered into pursuant
to the wishes of the buyer, then he should have been presented as
witness to corroborate the claim of the petitioners. However, he was
not.
As to the third issue, petitioners contend that the appellate court erred
in holding that the petitioners were each jointly and severally liable for
the payment of the broker’s fees. They contend that the Civil Code
provides that unless the parties have expressly agreed to be jointly and
severally liable for the entire broker’s fees, each of the petitioners
should only be held liable to the extent of their pro-indiviso share in the
property sold.
For their part, respondents argue that the appellate court did not err in
affirming the joint and several liability of the petitioners. They aver that
if there was error on the part of the trial court, it was not raised or
assigned as error by petitioners in their appeal. It was also not included
in the Statement of Issues in their brief which they submitted for
resolution by the Court of Appeals. In fact, the same was never
mentioned, much less questioned, by petitioners in their brief.
On this score, we agree with respondents. The general rule is that
once an issue has been adjudicated in a valid final judgment of a
competent court, it can no longer be controverted anew and should be
finally laid to rest.14 In this case, petitioners failed to address the issue
on their solidary liability when they appealed to the Court of Appeals.
They are now estopped to question that ruling. As to them, the issue
on their liability is already valid and binding.
WHEREFORE, the petition is DENIED for lack of merit. The Decision
dated October 10, 2005 and the Resolution dated January 10, 2006 of
the Court of Appeals in CA-G.R. CV No. 75593 are AFFIRMED. Costs
against petitioners.
SO ORDERED.
HEIRS OF THE LATE SPOUSES VICTOR L. MONTEVILLA AND
RESTITUTA C. MONTEVILLA, REPRESENTED BY ATTY. ANITA C.
MONTEVILLA, PETITIONERS, v. SPOUSES LEO A. VALLENA AND
MELBA G. VALLENA, RESPONDENTS.
DECISION
REYES, J. JR., J.:
This is an unlawful detainer case of an unregistered property.
The Case
The petition assails the March 16, 2017 Decision 1 and September 7,
2017 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No.
143742, which reversed the July 7, 2015 Regional Trial Court (RTC)
Decision3 in Civil Case No. 7001. The RTC affirmed the July 8, 2014
Municipal Circuit Trial Court (MCTC) Decision4 in Civil Case 068.
The Facts
Petitioners (the Montevillas) are the heirs of Victor L. Montevilla (Victor)
and Restituta C. Montevilla (spouses Montevilla), who left their children
several parcels of land and one of which is Lot No. 1 (Lot 1) in
Dimasalang, Masbate, covered by Tax Declaration No. 3007. 5
In 1961, Victor sold a portion of Lot 1, measuring 58 square meters, to
Benigno Zeta (Benigno), who sold it to Roman Manlangit (Roman). The
latter sold the lot to Jose Vallena (Jose), father of respondent Leo
Vallena (Leo).6
At the back of Jose's land was a vacant lot owned by Victor. In 1993, 7
respondent spouses Leo and Melba Vallena (spouses Vallena) sought
permission from Jorge Montevilla8 (Jorge), one of Victor's heirs, to use
a portion of the vacant lot, measuring 40 square meters, as storage for
their patis business. Jorge agreed on condition that the structure would
be made of light materials. However, when the business prospered,
spouses Vallena built a two-storey concrete building without the
Montevilla's knowledge, consent, and in defiance of their agreement. 9
On May 17, 1994, the administrator of spouses Montevilla's estate,
Anita C. Montevilla (Anita), called spouses Vallena's attention on the
illegal structure. However, Anita and her sister underwent verbal abuse
and threat from Leo. The Montevillas demanded payment of P1,000.00
as monthly rent beginning May, 1994, and to vacate the lot. The
demand was unheeded, prompting the Montevillas to file a civil action
for ejectment on April 10, 1995. 10
For their part, spouses Vallena denied the Montevilla's allegations.
They alleged that Victor sold to Benigno a 58-square meter lot and a
36-square meter lot, or a total of 94 square meters. Benigno sold the
94-square meter lot to Roman, who eventually sold it to Jose. They
averred that there is a private document wherein Victor sold to Jose a
4-square meter lot, bringing a total of98 square meters in Jose's
name.11
They asserted that they have been in possession of the contested lot
since 1982 up to the present without interruption. Tax Declaration No.
0020 in Jose's name was issued in 1990 because Jose or his
successors-in-interest were in actual physical possession of the land. 12
The tax declaration indicated 98 square meters. 13 However, spouses
Vallena were unable to present the documents of sale because they
were either burned or misplaced during Jose's lifetime.14
The MCTC Decision
On July 8, 2014, the MCTC rendered a decision in Montevilla's favor.
The MCTC held that spouses Vallena failed to produce the original
documents of sale to prove that Jose acquired the contested lot. They
presented photocopies of the acknowledgement receipts pertaining to
the sale between Victor and Benigno, and Victor and Jose. The MCTC
explained that since the validity of the sale was questioned, it is
incumbent upon spouses Vallena to produce the original documents for
examination of its genuineness and due execution. The MCTC was
suspicious of the receipts' integrity, because it observed that Victor's
signatures appear to be too similar despite the 20-year gap in their
execution. The MCTC expounded that it is natural for a person's
handwriting to change or deteriorate over time. The MCTC further
observed that only one typewriter was used in the document's
preparation.15
Moreover, the MCTC elucidated that even if the court accepted the
photocopies as evidence in place of the originals, they were not
evidence of sale of the contested lot, because they lack one of the
elements of a valid contract. The elements of a contract are consent,
object, and consideration. The MCTC found the second element to be
lacking, because the photocopied acknowledgement receipts did not
sufficiently describe the object of the sale: (1) the location of the
property was not specified; (2) there is a blot on the figure representing
the dimension of the lot, forcing any reader to guess the size of the lot;
and (3) the lot was labelled as swamp land at the back of the house of
Jose Vallena, without specific area indicated. The receipts did not fulfill
the requirement of the law on certainty of the object of a contract.
Hence, there was no perfected and valid contract of sale. 16
The MCTC declared that the Montevillas own the 40-square meter lot,
ordered spouses Vallena to vacate and remove all its improvements on
the subject lot, and to pay P200.00 as monthly rent from April 1995
until the lot is vacated and P10,000.00 as cost of litigation. 17 Aggrieved,
spouses Vallena appealed to the RTC.
The RTC Decision
On July 7, 2015, the RTC affirmed the MCTC decision. 18 Spouses
Vallena raised the issue of lack of certificate to file action from the
barangay and special power of attorney of Anita as representative of
the Montevillas. The RTC resolved that the reconstituted records
showed copies of the said documents. 19
The RTC discussed that in unlawful detainer, it is must be shown that
the possession was initially lawful and later turned unlawful upon the
expiration of the right to possess. The Montevillas allowed spouses
Vallena to occupy the contested lot and build a structure of light
materials. Their occupation was by mere tolerance, Which ended when
the Montevillas discovered that they violated the condition by building a
concrete building.20 Thus, the RTC sustained the MCTC's ruling. 21
Spouses Vallena moved for reconsideration, which the RTC denied in
its October 28, 2015 Order. 22 Unperturbed, they elevated the matter
before the CA.
The CA Decision
On March 16, 2017, the CA reversed the RTC decision, and dismissed
the complaint for lack of merit.23
On the procedural aspect, the CA did not give credence to spouses
Vallena's arguments. The CA clarified that the absence or belated filing
of a special power of attorney is not a ground for the dismissal of a
complaint. It is not even necessary in this case, because as one of the
heirs of spouses Montevilla and a co-owner of the contested lot, Anita
may, by herself, bring an action for the recovery of the co-owned
property without the necessity of joining all the co-owners. It is
presumed that the action was brought for the benefit of all co-owners. 24
The CA also pointed out, that non referral of a case for barangay
conciliation, when required by the law, is not jurisdictional and may be
waived if not timely raised. Here, spouses Vallena raised the issue only
on appeal to the RTC, and failed to include it in their answer and
position paper or motion to dismiss; Therefore, they have waived the
issue.25
On the substantive aspect, the CA elucidated that in ejectment, the
plaintiff must prove prior physical possession to recover the property,
even against an owner. Otherwise, the plaintiff has no right of action,
even if he/she is the owner of the property. 26
Here, the Montevillas claim ownership of the lot without offering any
evidence. On the other hand, spouses Vallena proved that their
occupation was the result of Jose's acquisition of the lot. The CA found
spouses Vallena's version more credible. The CA reasoned that tax
declarations and payment of realty tax are indications of possession in
the concept of an owner, although they are not conclusive proof. The
CA rationalized that no one in his right mind would be paying realty
taxes that is not in his/her actual or constructive possession. Hence,
the CA ruled in spouses Vallena's favor and dismissed the complaint. 27
The Montevillas moved for reconsideration, which the CA denied in its
September 7, 2017 Resolution. Unconvinced, the Montevillas filed the
present petition under Rule 45. The Montevillas alleged that: (1) the
affidavits of Jorge and Anita, the demand letter, and the affidavit of the
boundary lot owners are proof that the spouses Vallena are occupying
the contested lot out of their tolerance; (2) prior physical possession
need not be proved in unlawful detainer; (3) the CA should not have
entertained the issue on tax declaration and payment of realty taxes,
which were raised for the first time on appeal; and (4) the findings of
fact of the trial courts are given weight on appeal because of their
position to examine the evidence. 28
In their Comment,29 spouses Vallena essentially argued that the issues
raised in the petition are not questions of law and should not be
entertained by the Court.
In their Reply,30 the Montevillas reiterated the contentions raised in
their Petition.
The Issue Presented
Whether or not the CA committed an error in reversing the RTC
decision, and in ruling that spouses Vallena have the right of
possession over the 40-square meter lot.
The Court's Ruling
The petition has merit.
The general rule in a petition for review on certiorari under Rule 45 of
the Rules of Court is that only questions of law should be raised. In
Republic v. Heirs of Eladio Santiago,31 the Court enumerated that one
of the exceptions to the general rule is when the CA's findings are
contrary to those of the trial court. Considering the different findings of
fact and conclusions of law of the MCTC, RTC, and the CA, the Court
shall entertain this petition, which involves a re-assessment of the
evidence presented. In resolving the issue of possession, the Court will
provisionally determine the issue of ownership since both parties claim
to be the owners.
In its decision, the CA held that the Montevillas did not offer evidence
of prior physical possession.32
The Court disagrees. Section 4, Rule 129 of the Rules of Court on
judicial admission states that an admission, verbal or written, made by
the party in the course of the proceedings in the same case, does not
require proof.
Here, the spouses Vallena admitted in their pleadings that Victor was
the original owner and alleged seller of the contested 40-square meter
lot.33 Their admission means that they recognize that Victor had prior
possession of the lot before he allegedly sold it to them. A seller must
have exercised acts of ownership, such as physical possession and
acts of administration, before entering into a transaction over his
property. With spouses Vallena's judicial admission, the Montevillas
need not prove prior physical possession, because upon Victor's
death, his rights, including the right of possession, over the contested
lot were transmitted to his heirs by operation of law.
The CA did not uphold the MCTC's finding that the alleged contract of
sale is imperfect and invalid. 34
To this, the Court differs. It is an established rule that findings of fact of
the trial courts are entitled to great weight and credence since they are
in the best position to evaluate the evidence. Here, the MCTC had the
first opportunity to scrutinize spouses Vallena's documentary exhibits 35
on the alleged sale, namely: (1) Exhibit 4, a photocopy of the May 2,
1961 deed of sale between Victor and Benigno; (2) Exhibit 5, a
photocopy of the December 4, 1963 acknowledgement receipt of
payment between Victor and Benigno; and (3) Exhibit 6, a photocopy
of the January 3, 1982 acknowledgment receipt of payment between
Victor and Jose. The MCTC resolved that since the validity of Jose's
acquisition is in question, spouses Vallena should have produced the
original documents to examine its genuineness and due execution.
The Court sustains the MCTC's ruling. Section 3, Rule 130 of the
Rules of Court on best evidence rule states that when the subject of
inquiry is the contents of a document, no evidence shall be admissible
other than the original document itself.
Here, spouses Vallena presented photocopies of the alleged deed of
sale and alleged acknowledgment receipts. They claim that the original
copies were misplaced, missing, lost, or burned, 36 but they were unable
to state with certainty the circumstances surrounding its
disappearance. Importantly, they failed to prove that the original
documents existed in the first place. Without the original documents,
spouses Vallena failed to prove that Jose bought the contested lot
partly from Victor and partly from Roman.
The Court also noticed that the deed of sale and one of the
acknowledgement receipts pertain to a sale between Victor and
Benigno. The deed of sale specified that Victor sold a lot, measuring
58 square meters, to Benigno for P210.00. The two documents show
that a transaction took place between them, and nowhere does Jose's
name appear in these documents. These documents do not prove that
Victor and Jose or Benigno and Jose entered into a contract of sale.
As for the other acknowledgement receipt allegedly between Victor and
Jose, the Court also upholds the MCTC ruling that even if the court
accepts the photocopies as evidence, they are not sufficient evidence
of a contract of sale for lack of one of the elements - certainty of object
under Article 131837 of the New Civil Code of the Philippines. Since
spouses Vallena were unable to prove that Jose bought the contested
lot from Victor, their main defense crumbles.
The Court reviewed Exhibit 7 (spouses Vallena's Joint Affidavit 38 and
found that they failed to indicate with certainty the size of the land that
Victor and Roman allegedly sold to Jose. Spouses Vallenas' Answer 39
and Position Paper 40 also contain ambiguous allegations on the exact
measurement of the lot allegedly sold. The Position Paper states the
following:
The area which was sold to Benigno Zita was only 58 [s]quare [m]eters
with an additional area having 2 meters in length and a blurred or not
readable width which could either be 8, 5 or 3 meters and
assuming that it was only 3 meters by, 12 meters or 36 [s]quare
[m]eters to be added to 58 square meters, the total area of which will
be 94 [s]quare [m]eters.
In a private instrument, the late Victor L. Montevilla also sold a portion
of land with no specific area and tax declaration for P2,000.00,
Exhibit "6" for the defendants and granting without admitting that
the area was only 4 square meters, then the total area will be 98
square meters x x x.41 (Emphases supplied)
If spouses Vallena do not know the exact size of the land which Jose
allegedly bought from Victor and Roman, how can they convince the
Court to grant them possession of the contested lot? It is precisely for
this reason that the original copies of the documents of sale must be
presented in the trial court.
On the other hand, the Court evaluated the Montevilla's documentary
exhibits and found that they support their claim of ownership, prior
possession, and tolerance as to spouses Vallena's occupation of the
contested lot.
First, Exhibit "E" (Jorge's Affidavit 42) narrated that in 1993, spouses
Vallena approached him and sought permission from him to occupy the
contested lot to be used as storage for their patis business.
Considering that they were all government employees and Jose was
the godfather of Jorge's nephew, the latter granted permission on
condition that spouses Vallena would build a temporary structure with
nipa thatches as roofing. Spouses Vallena also assured him that they
would demolish the structure upon demand.
The Court observed that spouses Vallena did not deny that there was
indeed a patis business operating on the contested lot. They claimed
that they were only the caretakers; of Ambrocio Gaviola (Gaviola), Jr.'s
business.43 However, spouses Vallena did not present proof that
Gaviola owns the business. Thus, the ;Court does not give credence to
their unsubstantiated and self-serving claim.
Second, Exhibits "I" (June 19, 1995 Certification 44 of Alejandro A.
Tamayo [Tamayo] as the Municipal Assessor of Dimasalang, Masbate)
and "J" (Sketch Plan45 issued by Tamayo) reveal that Tamayo
conducted an ocular inspection on May 20, 1995 on Victor's property in
Poblacion, Dimasalang, Masbate, covered by Tax Declaration 3007.
The exhibits contained Tamayo's certification that Victor's property
consisted of 2,134 square meters, and he sold a total of 957 square
meters to different buyers. Jose's name was not among the buyers
listed. The remaining area left is 1,177 square meters, which was
identified as Lot 10.
Tamayo also certified that Lot 7, (measuring 98 square meters) and
covered by Tax Declaration 0020, was declared in Jose's name upon
Leo's request during the tax mapping operation in 1990, but he did not
present any document of conveyance from the actual owner, Victor, to
support his claim of ownership to the lot. Tamayo also categorically
stated that the June 19, 1995 Certification superseded the April 24,
1995 Certification that he issued.
Third, Exhibit "K" (Tamayo's affidavit dated November 3, 1997) 46
reiterated the contents of Exhibits "I" and "J," which were issued after
he conducted an ocular inspection on Victor's property. He clarified
that his June 19, 1995 Certification nullified the April 24, 1995
Certification, which stated that Victor's property consisted of 100
square meters. He also stated that Tax Declaration 4983 was issued
anew in Victor's name on June 25, 1997, showing that his property
measured 1,177 square meters.
Fourth, Exhibit "O" (Anita's Affidavit) 47 corroborated Jorge's narration
on when and how he permitted spouses Vallena to occupy the
contested lot for their patis business. She discovered the illegal
structure on May 17, 1994 when she went home to pay the realty tax of
their parents' property. She had been diligently paying the realty taxes
in advance for the succeeding years.
Anita's affidavit disclosed that during the ocular inspection, Tamayo
was accompanied by Barangay Chairman Bibiano Inocencio, Arlin
Mitra, Nardito Tinay, Carlos Legazpi, Jorge Montevilla, and other lot
buyers. Tamayo borrowed the deeds of sale between Victor and the
buyers, which became the basis of his inspection. 48
The Court thinks that the presence of the owners and occupants of the
land surrounding the contested lot makes Tamayo's sketch plan,
certification, and affidavit credible. Any undue influence, intimidation, or
threat during the conduct of the inspection would be blocked by these
witnesses. Further, the Court observed that spouses Vallena did not
present any deed of sale to prove to Tamayo that Jose owned the
contested lot and they inherited it from him. The ocular inspection was
a good opportunity for spouses Vallena to prove to the Montevillas and
to their neighbors that they are the rightful owners and possessors of
the contested lot, however, they failed to grab that opportunity because
they had no evidence to support their claim.
Fifth, Exhibits "H" to "H-3" (Deeds of Sale between Victor and Manuel
Tigpos, CarlosLegazpi, Arlin Mitra and Lucio Abad), 49 substantiate
Anita's affidavit, Tamayo's sketch plan, certification, and affidavit as to
the portions that were sold by Victor. The buyers in the deeds are
Jose's neighbors and lot owners surrounding the contested lot.
The Court emphasizes that spouses Vallena did not present any deed
of sale; thus, the Court is unconvinced with their allegation that Jose
acquired the contested lot from Victor or from Roman.
Sixth, Exhibit "N" (Joint Affidavit of Arlin Mitra, Nardito Tinay, Lucio
Abad and Carlos Legazpi), 50 executed by the boundary lot owners and
neighbors of spouses Vallena, affirmed that they bought their
respective lots from Victor. They verified that after the sale, Victor's
remaining area was 1,177 square meters, covered by Tax Declaration
4983. They confirmed that Tamayo indeed conducted an ocular
inspection on May 20, 1995, and he measured all the lots bought from
Victor.
Seventh, Exhibits "M"-"M3" (real estate tax receipts)51 paid by Anita
prove that he Montevillas had been paying the real property taxes on
the 1,177 square-meter lot. While payment of realty tax is not
conclusive proof of ownership or possession, it, is a good indication of
ownership or possession because no one would be willing to spend for
something that he/she does not own or possess.
Lastly, Exhibits "A," "D" and "D-2" (Declarations of Real Property) 52
further support the Montevillas claim that their father owned the 1,177
square-meter lot, of which the contested lot is part of.
In civil case, the quantum of evidence required is preponderance of
evidence. In Aba v. Attys. De Guzman, Jr.,53 the Court defined and
discussed this concept.
Preponderance of evidence means that the evidence adduced by one
side is, as a whole, superior to or has greater weight than that of the
other. It means evidence which is more convincing to the court as
worthy of belief than that which is offered in opposition thereto. Under
Section 1 of Rule 133, in determining whether or not there is
preponderance of evidence, the court may consider the following: (a)
all the facts and circumstances of the case; (b) the witnesses' manner
of testifying, their intelligence, their means and opportunity of knowing
the facts to which they are testifying, the nature: of the facts to which
they testify, the probability or improbability of their testimony; (c) the
witnesses' interest or want of interest, and also their personal credibility
so far as the same may ultimately appear in the trial; and (d) the
number of witnesses, although it does not mean that preponderance is
necessarily with the greater number. (Citation omitted)
Here, the Montevillas presented 15 exhibits,54 while the Vallenas
submitted nine exhibits. 55 More than just having a greater number of
exhibits, the Montevillas sufficiently prove their claim that they are in
prior possession of the contested lot because their parents owned it
and possessed it. The affidavits of two of the Montevilla heirs, the
affidavits of the boundary lot owners, Tamayo's sketch plan,
certification, and affidavit all prove that Victor did not sell the contested
lot to Jose and remained with the Montevillas. These pieces of
evidence also support the allegation that spouses Vallena's occupation
was by mere tolerance of the Montevillas. It is not just the quantity, but
foremost the quality of evidence that determines who has
preponderance of evidence. Thus, the Montevillas have satisfactorily
substantiated their version in this long-time unresolved land dispute.
On the other hand, spouses Vallena's main defense that Jose bought
the contested lot partly from Victor and partly from Roman was
unproven due to non-presentation of the original documents of sale.
Since their most important piece of evidence was struck down, there is
nothing left for their defense. Therefore, they have no right of
possession over the 40-square meter contested lot.
WHEREFORE, premises considered, the petition is GRANTED. The
Court of Appeals Decision dated March 16, 2017 and the Resolution
dated September 7, 2017 in CA-G.R. SP No. 143742 are REVERSED.
The Regional Trial Court Decision dated July 7, 2015 in Civil Case No.
7001 is REINSTATED.
SO ORDERED.
PEOPLE OF THE PHILIPPINES, Appellee,
vs.
GERRY LIPATA y ORTIZA, Appellant.
DECISION
CARPIO, J.:
The Case
G.R. No. 200302 is an appeal 1 assailing the Decision2 promulgated
on 31May2011 by the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
04461. The CA affirmed the Decision3 dated 23 March 2010 of Branch
85 of the Regional Trial Court of Quezon City (RTC) in Criminal Case
No. Q-05-136584. The RTC found appellant Gerry Lipata y Ortiza
(appellant) guilty beyond reasonable doubt of the crime of Murder and
sentenced him to suffer the penalty of reclusion perpetua. The RTC
also ordered appellant to pay damages to the heirs of Rolando Cueno
(Cueno).4
The Facts
Appellant was charged with the crime of Murder in an Information
which reads as follows:
That on or about the 1st day of September, 2005, in Quezon City,
Philippines, the said accused, conspiring, confederating with two (2)
other persons whose true names, identities and definite whereabouts
have not as
yet been ascertained and mutually helping one another, with intent to
kill and with evident premeditation and treachery, and taking advantage
of superior strength, did, then and there willfully, unlawfully and
feloniously
attack, assault and employ personal violence upon the person of one
RONALDO CUENO Y BONIFACIO, by then and there stabbing him
repeatedly with bladed weapons, hitting him on the different parts of his
body, thereby inflicting upon him serious and mortal stab wounds
which were the direct and immediate cause of his death, to the
damage and prejudice of the heirs of Ronaldo Cueno y Bonifacio.
CONTRARY TO LAW.5
Appellant was arraigned on 11 October 2005, and entered a plea of not
guilty to the charge. Pre-trial conference was terminated on 26 October
2005, and trial on the merits ensued.
The CA summarized the parties’ evidence as follows:
The Prosecution[’s] Evidence
Mercelinda Valzado, sister-in-law of the victim Rolando Cueno, testified
that on September 1, 2005 at around 6:00 p.m., she was in her house
located in [sic] Lot 34, Block 4, Sipna Compound, Bagong Silangan,
Quezon City. She was about to leave the house to go to the market
when she saw appellant, his brother Larry Lipata and a certain [Rudy]
attacking the victim by repeatedly stabbing him. She was at a distance
of more or less ten (10) meters from the incident. Shocked at what she
had just witnessed, she shouted for help and pleaded the assailants to
stop, but they did not stop stabbing the victim. In her account, she
recalled that the assailants, including appellant, used a tres
cantos, an ice pick and a broken piece of glass of Red Horse [bottle].
At one point, the victim managed to take the knife away from appellant
and brandished the same at his attackers. Thereafter, the victim fell on
the ground. Upon seeing the victim fall, appellant and the other
assailants left the scene. Through the help of some neighbors,
Mercelinda rushed the victim to a hospital but he was pronounced
dead on arrival.
Criz Reymiluz Cueno, daughter of the victim, testified that she saw
appellant together with Larry Lipata and Rudy Lipata [stab] her father
to death in front of their house. She recounted that upon arriving at
home from work on September 1, 2005 at around 6:00 p.m., her father
immediately went to the house of her aunt Mercelinda Valzado, which
was located only a block away from their house, to ask for malunggay
leaves.
Upon coming home from her aunt’s house, the victim was attacked by
the Lipatas which prompted the victim to run away. Thinking that his
assailants were no longer around, the victim proceeded to their [sic]
house but then the Lipatas stabbed him to death. She was at a
distance of six (6) to eight (8) meters away from the scene. She further
testified that she had no knowledge of any reason why the Lipatas
would kill her father, but her father’s death brought her pain and
sadness and anger against the perpetrators of her father’s killing.
The Defense[’s] Evidence
The defense presented a sole witness in the person of appellant
himself. According to appellant, he was resting in his house in Sipna
Compound, Brgy. Bagong Silangan, Quezon City on September 1,
2005 at around 6:00 p.m. when two children, namely John Paul Isip
and a certain Rommel, called him and told him to help his brother,
Larry Lipata. He immediately rushed to his brother and upon arrival he
saw Larry being stabbed by the victim. He instantaneously assisted his
brother but the victim continued stabbing Larry, causing Larry to fall to
the ground. Thereafter, appellant managed to grab the knife from the
victim and stab the victim. Then he fled from the scene [of the crime]
because he was wounded. Appellant’s sister-in-law, a certain Lenlen,
brought him to the Amang Medical Center for treatment of his stab
wound where he was apprehended by police officers.6
The RTC’s Ruling
The RTC noted that since appellant raised the justifying circumstance
of defense of a relative, he hypothetically admitted the commission of
the crime. Hence, the burden of proving his innocence shifted to
appellant. The RTC found that the defense failed to adequately
establish the element of unlawful aggression on the part of Cueno.
There was no actual or imminent danger to the life of appellant or of his
brother Larry. On the contrary, the three Lipata brothers (appellant,
Larry, and Rudy)7 employed treachery and took advantage of their
superior strength when they attacked Cueno after Cueno left the house
of his sister-in-law. Cueno suffered 17 stab wounds on his trunk from
the Lipata brothers. The existence of multiple stab wounds on the trunk
of the unarmed Cueno is inconsistent with appellant’s theory of
defense of a relative. The RTC, however, ruled that the prosecution
failed to show conclusive proof of evident premeditation.
The dispositive portion of the RTC’s decision reads:
WHEREFORE, in the light of the foregoing considerations, the Court
here[b]y renders judgment finding the accused GERRY LIPATA Y
ORTIZA guilty beyond reasonable doubt of the crime of Murder and he
is hereby sentenced to suffer the penalty of imprisonment of reclusion
perpetua from twenty (20) years and one (1) day to forty (40) years.
The accused is hereby adjudged to pay the heirs of Rolando Cueno
the following amounts:
(a) Php 50,000.00 representing civil indemnity ex delicto of
the accused;
(b) Php 120,550.00 representing the actual damages
incurred by the heirs of Rolando Cueno, incident to his death
plus 12% interest per annum computed from 6 September
2005 until fully paid;
(c) Php 50,000.00 as moral damages for the mental and
emotional anguish suffered by the heirs arising from the
death of Rolando Cueno; and
(d) Php 25,000[.00] as exemplary damages.
The accused shall be credited with the full period of his preventive
imprisonment, subject to the conditions imposed under Article 29 of the
Revised Penal Code, as amended.
SO ORDERED.8
Appellant, through the Public Attorney’s Office (PAO), filed a notice of
appeal9 on 6 April 2010. The RTC granted appellant’s notice in an
Order10 dated 19 April 2010.
The CA’s Ruling
The CA dismissed appellant’s appeal and affirmed the decision of the
RTC. The CA agreed with the RTC’s ruling that appellant’s claim of
defense of a relative must fail. There was no actual or imminent threat
on the life of appellant or of his brother Larry. There was also no
reason for appellant to stab Cueno. Cueno was outnumbered by the
Lipata brothers, three to one. The requirement of lack of provocation
on the part of appellant is negated by the multiple stab wounds that
Cueno sustained.
The CA disagreed with appellant’s contention that the prosecution
failed to establish treachery. The CA pointed out that Cueno was not
forewarned of any impending threat to his life. Cueno was unarmed,
and went to his sister-in-law’s house to gather malunggay leaves. The
Lipata brothers, on the other hand, were readily armed with tres
cantos, an icepick, and a broken piece of glass from a Red Horse
bottle. The execution of the Lipata brothers’ attack made it impossible
for Cueno to retaliate.
The CA also disagreed with appellant’s contention that there was no
abuse of superior strength. The three Lipata brothers were all armed
with bladed weapons when they attacked the unarmed Cueno. The
Lipata brothers refused to stop stabbing Cueno until they saw him
unconscious.
The dispositive portion of the CA’s decision reads:
WHEREFORE, finding the appeal to be bereft of merit, the same is
hereby DISMISSED. The appealed decision of the trial court convicting
appellant of the crime of murder is hereby AFFIRMED.
SO ORDERED.11
The PAO filed a notice of appeal12 on behalf of appellant on 10 June
2011. The CA ordered the immediate elevation of the records to this
Court in its 30 June 2011 Resolution.13
Appellant’s Death Prior to Final Judgment
This Court, in a Resolution dated 13 June 2012,14 noted the records
forwarded by the CA and required the Bureau of Corrections (BuCor)
to confirm the confinement of appellant. The BuCor, in a letter dated 26
July 2012, informed this Court that there is no record of confinement of
appellant as of date. In a Resolution dated 10 September 2012,15 this
Court required the Quezon City Jail Warden to transfer appellant to the
New Bilibid Prison and to report compliance within ten days from
notice. The Quezon City Jail Warden, in a letter dated 22 October
2012,16 informed this Court that appellant passed away on 13
February 2011. The former Quezon City Jail Warden wrote to the RTC
about appellant’s demise in a letter dated 23 February 2011. Attached
to the 22 October 2012 letter were photocopies of appellant’s death
certificate and medical certificate, as well as the former Quezon City
Jail Warden’s letter.17 In a Resolution dated 7 January 2013,18 this
Court noted the 22 October 2012 letter from the Quezon City Jail
Warden, and required the parties to submit their supplemental briefs on
the civil aspect of the case if they so desire.
The Office of the Solicitor General filed a Manifestation dated 18 March
2013,19 which stated that it had already exhaustively argued the
relevant issues in its appellee’s brief. The PAO, on the other hand, filed
a supplemental brief on 26 March 2013.20
In view of appellant’s death prior to the promulgation of the CA’s
decision, this Court issued a Resolution dated 25 September 2013
which ordered the PAO "(1) to SUBSTITUTE the legal representatives
of the estate of the deceased appellant as party; and (2) to COMMENT
on the civil liability of appellant within ten (10) days from receipt of this
Resolution."21
The PAO filed its Manifestation with Comment on the Civil Liability of
the Deceased Appellant on 29 November 2013.22 According to the
Public Attorney’s Office-Special and Appealed Cases Service, the
relatives of the deceased appellant have not communicated with it
since the case was assigned to its office on 29 September 2010. The
PAO sent a letter on 4 November 2013 to Lilia Lipata, who was
appellant’s next of kin per official records. Despite receipt of the letter,
the relatives of appellant still failed to communicate with the PAO.
In its Manifestation, the PAO stated that:
xxxx
9. Considering that the civil liability in the instant case arose from and
is based solely on the act complained of, i.e. murder, the same does
not survive the death of the deceased appellant. Thus, in line with the
abovecited ruling [People v. Jaime Ayochok, G.R. No. 175784, 25
August 2010, 629 SCRA 324, citing People v. Rogelio Bayotas, G.R.
No. 102007, 2 September 1994, 236 SCRA 239], the death of the latter
pending appeal of his conviction extinguished his criminal liability as
well as the civil liability based solely thereon.
10. This being so, it is respectfully submitted that the necessity to
substitute the legal representatives of the estate of the deceased as
party does not arise.23
On 9 July 2014, this Court issued a Resolution which declared that "the
[PAO] shall continue as the legal representative of the estate of the
deceased [appellant] for purposes of representing the estate in the civil
aspect of this case."24
The Court’s Ruling
At the outset, we declare that because of appellant’s death prior to the
promulgation of the CA’s decision, there is no further need to
determine appellant’s criminal liability. Appellant’s death has the effect
of extinguishing his criminal liability. Article 89(1) of the Revised Penal
Code provides:
Article 89. How criminal liability is totally extinguished. – Criminal
liability is totally extinguished:
1. By the death of the convict, as to the personal penalties; and as to
pecuniary penalties, liability therefor is extinguished only when the
death of the offender occurs before final judgment;
xxxx
What this Court will discuss further is the effect of appellant’s death
with regard to his civil liability. In 1994, this Court, in People v.
Bayotas,25 reconciled the differing doctrines on the issue of whether
the death of the accused pending appeal of his conviction extinguishes
his civil liability. We concluded that "[u]pon death of the accused
pending appeal of his conviction, the criminal action is extinguished
inasmuch as there is no longer a defendant to stand as the accused;
the civil action instituted therein for recovery of civil liability ex delicto is
ipso facto extinguished, grounded as it is on the criminal."26
We also ruled that "if the private offended party, upon extinction of the
civil liability ex delicto desires to recover damages from the same act
or omission complained of, he must subject to Section 1, Rule 111 ([of
the then applicable] 1985 Rules on Criminal Procedure as amended)
file a separate civil action, this time predicated not on the felony
previously charged but on other sources of obligation. The source of
obligation upon which the separate civil action is premised determines
against whom the same shall be enforced."27
We proceeded to distinguish the defendants among the different
causes of action. If the act or omission complained of arises from
quasidelict or, by provision of law, results in an injury to person or real
or personal property, the separate civil action must be filed against the
executor or administrator of the estate pursuant to Section 1, Rule 87
of the Rules of Court.28 On the other hand, if the act or omission
complained of arises from contract, the separate civil action must be
filed against the estate of the accused pursuant to Section 5, Rule 86
of the Rules of Court.29
We summarized our ruling in Bayotas as follows:
1. Death of the accused pending appeal of his conviction
extinguishes his criminal liability as well as the civil
liability based solely thereon. As opined by Justice
Regalado, in this regard, "the death of the accused prior to
final judgment terminates his criminal liability and only the
civil liability directly arising from and based solely on the
offense committed, i.e., civil liability ex delicto in senso
strictiore."
2. Corollarily, the claim for civil liability survives
notwithstanding the death of accused, if the same may
also be predicated on a source of obligation other than
delict. Article 1157 of the Civil Code enumerates these other
sources of obligation from which the civil liability may arise
as a result of the same act or omission:
a) Law
b) Contracts
c) Quasi-contracts
d) x x x
e) Quasi-delicts
3. Where the civil liability survives, as explained in
Number 2 above, an action for recovery therefor may be
pursued but only by way of filing a separate civil action
and subject to Section 1, Rule 111 of the 1985 Rules on
Criminal Procedure as amended. This separate civil action
may be enforced either against the executor/administrator or
the estate of the accused, depending on the source of
obligation upon which the same is based as explained
above.
4. Finally, the private offended party need not fear a
forfeiture of his right to file this separate civil action by
prescription, in cases where during the prosecution of the
criminal action and prior to its extinction, the private-offended
party instituted together therewith the civil action. In such
case, the statute of limitations on the civil liability is deemed
interrupted during the pendency of the criminal case,
conformably with provisions of Article 1155 of the Civil Code,
that should thereby avoid any apprehension on a possible
deprivation of right by prescription.30 (Emphases supplied)
The promulgation of the Revised Rules on Criminal Procedure in 2000
provided for the effect of the death of the accused after arraignment
and during the pendency of the criminal action to reflect our ruling in
Bayotas:
Sec. 4. Effect of death on civil actions. — The death of the accused
after arraignment and during the pendency of the criminal action shall
extinguish the civil liability arising from the delict. However, the
independent civil action instituted under Section 3 of this Rule or which
thereafter is instituted to enforce liability arising from other sources of
obligation may be continued against the estate or legal representative
of the accused after proper substitution or against said estate, as the
case may be. The heirs of the accused may be substituted for the
deceased without requiring the appointment of an executor or
administrator and the court may appoint a guardian ad litem for the
minor heirs.
The court shall forthwith order said legal representative or
representatives to appear and be substituted within a period of thirty
(30) days from notice.1âwphi1
A final judgment entered in favor of the offended party shall be
enforced in the manner especially provided in these rules for
prosecuting claims against the estate of the deceased.
If the accused dies before arraignment, the case shall be dismissed
without prejudice to any civil action the offended party may file against
the estate of the deceased.
Contrary to the PAO’s Manifestation with Comment on the Civil Liability
of the Deceased Appellant,31 Cueno died because of appellant’s fault.
Appellant caused damage to Cueno through deliberate acts.32
Appellant’s civil liability ex quasi delicto may now be pursued because
appellant’s death on 13 February 2011, before the promulgation of final
judgment, extinguished both his criminal liability and civil liability ex
delicto.
Despite the recognition of the survival of the civil liability for claims
under Articles 32, 33, 34 and 2176 of the Civil Code, as well as from
sources of obligation other than delict in both jurisprudence and the
Rules, and our subsequent designation of the PAO as the "legal
representative of the estate of the deceased [appellant] for purposes of
representing the estate in the civil aspect of this case,"33 the current
Rules, pursuant to our pronouncement in
Bayotas,34 require the private offended party, or his heirs, in this case,
to institute a separate civil action to pursue their claims against the
estate of the deceased appellant. The independent civil actions in
Articles 32, 33, 34 and 2176, as well as claims from sources of
obligation other than delict, are not deemed instituted with the criminal
action but may be filed separately by the offended party even without
reservation.35 The separate civil action proceeds independently of the
criminal proceedings and requires only a preponderance of
evidence.36 The civil action which may thereafter be instituted against
the estate or legal representatives of the decedent is taken from the
new provisions of Section 16 of Rule 337 in relation to the rules for
prosecuting claims against his estate in Rules 86 and 87.38
Upon examination of the submitted pleadings, we found that there was
no separate civil case instituted prior to the criminal case. Neither was
there any reservation for filing a separate civil case for the cause of
action arising from quasi-delict. Under the present Rules, the heirs of
Cueno should file a separate civil case in order to obtain financial
retribution for their loss. The lack of a separate civil case for the cause
of action arising from quasidelict leads us to the conclusion that, a
decade after Cueno’s death, his heirs cannot recover even a centavo
from the amounts awarded by the CA.
However, for similar cases in the future, we refer to the Committee on
the Revision of the Rules of Court for study and recommendation to the
Court En Banc appropriate amendments to the Rules for a speedy and
inexpensive resolution of such similar cases with the objective of
indemnifying the private offended party or his heirs in cases where an
accused dies after conviction by the trial court but pending appeal.
In Lumantas v. Calapiz,39 this Court declared that our law recognizes
that an acquittal based on reasonable doubt of the guilt of the accused
does not exempt the accused from civil liability ex delicto which may be
proved by preponderance of evidence. This Court’s pronouncement in
Lumantas is based on Article 29 of the Civil Code:
Art. 29. When the accused in a criminal prosecution is acquitted on the
ground that his guilt has not been proved beyond reasonable doubt, a
civil action for damages for the same act or omission may be instituted.
Such action requires only a preponderance of evidence. Upon motion
of the defendant, the court may require the plaintiff to file a bond to
answer for damages in case the complaint should be found to be
malicious.
If in a criminal case the judgment of acquittal is based upon reasonable
doubt, the court shall so declare. In the absence of any declaration to
that effect, it may be inferred from the text of the decision whether or
not the acquittal is due to that ground.
We also turn to the Code Commission’s justification of its recognition of
the possibility of miscarriage of justice in these cases:
The old rule that the acquittal of the accused in a criminal case also
releases him from civil liability is one of the most serious flaws in the
Philippine legal system. It has given rise to numberless instances of
miscarriage of justice, where the acquittal was due to a reasonable
doubt in the mind of the court as to the guilt of the accused. The
reasoning followed is that inasmuch as the civil responsibility is derived
from the criminal offense, when the latter is not proved, civil liability
cannot be demanded.
This is one of those cases where confused thinking leads to
unfortunate and deplorable consequences. Such reasoning fails to
draw a clear line of demarcation between criminal liability and civil
responsibility, and to determine the logical result of the distinction. The
two liabilities are separate and distinct from each other. One affects the
social order and the other, private rights. One is for the punishment or
correction of the offender while the other is for reparation of damages
suffered by the aggrieved party. The two responsibilities are so
different from each other that article 1813 of the present (Spanish) Civil
Code reads thus: "There may be a compromise upon the civil action
arising from a crime; but the public action for the imposition of the legal
penalty shall not thereby be extinguished." It is just and proper that, for
the purpose of the imprisonment of or fine upon the accused, the
offense should be proved beyond reasonable doubt. But for the
purpose of indemnifying the complaining party, why should the offense
also be proved beyond reasonable doubt? Is not the invasion or
violation of every private right to be proved only by a preponderance of
evidence? Is the right of the aggrieved person any less private
because the wrongful act is also punishable by the criminal law?
For these reasons, the Commission recommends the adoption of the
reform under discussion. It will correct a serious defect in our law. It will
close up an inexhaustible source of injustice – a cause for
disillusionment on the part of innumerable persons injured or
wronged.40
In similar manner, the reform in procedure in these cases to be
recommended by the Committee on the Revision of the Rules of Court
shall aim to provide the aggrieved parties relief, as well as recognition
of their right to indemnity. This reform is of course subject to the policy
against double recovery.
WHEREFORE, we SET ASIDE the Decision promulgated on 31 May
2011 by the Court of Appeals in CA-G.R. CR-H.C. No. 04461. The
criminal and civil liabilities ex delicto of appellant Gerry Lipata y Ortiza
are declared EXTINGUISHED by his death prior to final judgment.
Let a copy, of this Decision be forwarded to the Committee on the
Revision of the Rules of Court.
SO ORDERED.
HEIRS OF THE LATE DOCTOR CORAZON DIAZ-LEUS, namely,
her husband, CLETO P. LEUS and children, CEZAR LEUS, DRA.
CORAZON D. LEUS, JR., and CLARISSA LEUS, petitioners,
vs.
HERNANI MELVIDA, ALMARIO ROSAS, VICTORY LINER, INC.,
SPOUSES LEONISA GALI and JESUS GALI and COURT OF
APPEALS, respondents.
GANCAYCO, J.:
Almario Rosas and Hernani Melvida were charged of the crime of
Reckless Imprudence resulting in Double Homicide, Serious and Slight
Physical Injuries and Damage to Property allegedly committed in the
following manner:
That on or about the 30th day of June, 1972, in the
municipality of Meycauayan, province of Bulacan,
Philippines, and within the jurisdiction of this
Honorable Court, the said accused Hernani
Melvida and Almario C. Rosas, being then the
chauffeurs and the persons in charge of Plymouth
car bearing plate No. 99-OW-Caloocan City 1971
and a Victory Liner bus with body number 512 and
bearing plate No. 27-55 PUB Caloocan City 1972,
respectively, did then and there wilfully, unlawfully
and feloniously drive and operate their respective
motor vehicles along the North Expressway
(Marcelo H. Del Pilar Highway) towards opposite
directions in the said municipality, in a negligent,
careless and imprudent manner, without due
regard to traffic laws, rules and regulations and the
weather conditions, and without taking the
necessary precaution to avoid injuries to persons
and damage to property, causing by such
negligence, carelessness and imprudence the said
Plymouth car bearing plate No. 99-OWL-Caloocan
City 1971 driven by the said accused Hernani
Melvida to swerve to its left, cross the island, and
move onto the lane for the opposite traffic, and the
said Victory Liner bus with body number 512 and
bearing plate No. 27-55 PUB Caloocan City 1972
 to hit and bump the said Plymouth car, thereby
inflicting on DRA. Corazon Diaz-Leus, Florencio
Carbilledo Y Canhagas and Mrs. Leonisa Gali,
passengers of the said Plymouth car, serious
physical injuries, which directly caused the death
of the said Dra. Corazon Diaz-Leus and Florencio
Carbilledo Y Canhagas, to the damage and
prejudice of the legal heirs of the said deceased
Dra. Corazon Diaz-Leus and Florencio Carbilledo
Y Canhagas, and incapacitated the said Mrs.
Leonisa Gali from performing her customary labor
and required her medical attendance for a period
of more than 30 days and also inflicting slight
physical injuries on Leonisa Payumo, passenger of
the said Victory Liner bus, which required medical
attendance and incapacitated her from performing
her customary labor for a period of not more than
9 days, and further causing damages to the said
Plymouth car and the said Victory liner Bus, to the
damage and prejudice of their owners, Jesus Gali
and the Victory Liner Bus Lines Inc., respectively.
Contrary to law. 1
Upon arraignment Rosas and Melvida entered a plea of not guilty and
after trial a decision was rendered by the trial court, the dispositive
portion of which reads —
FOR ALL THE FOREGOING, the Court finds the
accused Hernani Melvida guilty beyond
reasonable doubt of the offense charged and he is
hereby sentenced to suffer imprisonment of an
indeterminate penalty of from SIX (6) MONTHS of
arresto mayor; as minimum, to TWO (2) YEARS
and FOUR (4) MONTHS of prision correccional, as
maximum, with the accessory penalties prescribed
by law; to indemnity (sic) the legal heirs of the
deceased Dra. Corazon Diaz-Leus and Florencio
Carbilledo the sum of P12,000.00. each; to pay the
legal heirs of Dra. Leus the amount of P14,000.00
as funeral and death expenses; to pay the said
legal heirs of the amount of P200,000.00 as moral
damages, without subsidiary imprisonment in case
of insolvency, and to pay the costs.
For failure to establish the guilt of accused Almario
Rosas beyond reasonable doubt, he is hereby
acquitted of the offense charged. With costs.2
From said decision Cleto Leus and his children as legal heirs appealed
to the Court of Appeals only with respect to the civil aspect. The vital
issue raised to the Court of Appeals is whether or not accused-
appellee Almario Rosas could still be held civilly liable despite his
acquittal in the criminal case.3 They also contend that the Victory Liner
and Jesus Gali owners of the colliding vehicles, are subsidiarily liable
for damages.
The Court of Appeals made the following finding of facts:
The facts adduced from the evidence presented by
the prosecution shows that in the afternoon of
June 30, 1972, a vehicular accident happened
along the North Expressway. A Plymouth car
bearing plate No. 99-OWL-Caloocan City figured
in the accident. The car was driven by accused
Hernani Melvida and the passengers were the
victim Mrs. Leonisa Gali and the deceased Dra.
Corazon Diaz-Leus, wife of complainant Atty.
Cleto Leus and Florencio Carbilledo. The
Plymouth car driven by accused came from a
Quezon City hospital and was on its way home to
Bulacan taking the North Expressway. Accused
Melvida drove the car at a fast speed and in a
negligent manner causing it to swerve to the left,
traversing the grassy island which separates the
North and the South lanes of the Expressway until
it reached a portion of the left lane more or less
two (2) feet from the asphalted portion of the south
lane on the left side facing South going to Manila
as shown in Exhibit 'C', 'C-2' and 'C-3' when it was
bumped on the rear portion by a Victory Liner bus
and dragged about 50 meters off the cemented
road to the grassy island where it was crash-
landed on by the front portion of said Victory Liner
bus. Said bus bearing plate No. 27-55 PUB-
Caloocan City 1972 was driven by accused
Almario Rosas, travelling South towards Manila in
an imprudent and negligent manner without due
regard to traffic rules and regulations and to the
weather condition which was then stormy.
It also appears that before the accident, the bus
driven by accused Rosas overtook the car of Dr.
Romeo San Diego which was running at the speed
of 80 kilometers per hour. The said bus when it
overtook the car of Dr. San Diego was running at a
fast speed thus creating a 'whizzing sound'. As a
result of the vehicular accident, Dra. Corazon
Diaz-Leus was pinned to death inside the car
together with another passenger Carbilledo.
Thereafter it was held —
Upon review of the whole records WE find as the
lower court did that the accident in question cannot
be attributed to any negligence of appellee Rosas.
The stubborn and undisputed facts reveal that
appellee Rosas was driving his bus on his own
lane of the highway going south when the
Plymouth car suddenly encroached on his (Rosas)
lane in front of its path after crossing the wise
grassy strip of land separating the North and the
South lane of the expressway. Appellee Rosas
who was properly traversing his own lane should
not be expected to anticipate and/or foresee that a
private car coming from the North lane would be
thrown to his path. Even, assuming as alleged that
appellee Rosas was driving at a very fast speed,
had the Plymouth car remained on its proper lane
collision would not have occurred. The proximate
cause of the accident is the Plymouth car's leaving
its proper (north) lane, swerving to its left and
intruding into the south-bound lane. The collision
which resulted in the destruction of the Plymouth
car had not been due to any negligence on
appellee Rosas part. It was a fortuitous event
which appellee Rosas could not prevent. And,
since appellants appeal on the civil aspect is
predicated upon appellee Rosas negligence which
does not exist, it follows that his acquittal in the
criminal case carries with it the extinction of his
civil liability and therefore the offended parties,
herein appellants may no longer appeal and
recover damages from said appellee Rosas. As a
consequence, the rule that--extinction of the penal
action does not carry with it extinction of the civil,' .
. .; (Sec. 3, (c), Rule III, Rules of Court) does not
apply to the present instance. The case falls
squarely under the exception that , unless the
extinction proceeds from a declaration in a (sic)
initial judgment that the fact from which the civil
might arise did not exist. . . . . (Sec-3, (c), Rules of
Court). It has been held that where the judgment
of acquittal in a criminal prosecution for arson
through reckless imprudence states that the
offense was caused by fortuitous event, the civil
action to recover damages is barred.(Cf. Tan vs.
Standard Vacuum Oil Co., 48 O.G. 2745). The
decision appealed from which is final and
executory as regards its criminal phase, has not
only acquitted accused, but also declared that the
collision, which resulted in the destruction of
appellants' car, had not been due to any
negligence on his part. Since appellants' civil
action is predicated upon accused alleged
negligence, which does not exist, according to said
final judgment, it follows necessarily that his
acquittal in the criminal action carries with it the
extinction of the civil responsibility arising
therefrom.(Faraon vs. Priela G.R. L-23129, August
2, 1968, 24 SCRA 582).
Appellant's also alleged that the lower court
committed error in not considering the loss of
earning capacity of the deceased Dra. Leus.
According to appellants, the deceased as a doctor
had an average earning of P600.00 covering the
 year 1971 and for six (6) months from January to
June 1972 and an average earnings in business
for the years 1971 and 1972, the sum of P1,010.
The deceased Dra. Leus was 59 years of age
when she died. At such age the normal life
expectancy is 14 years, according to the formula
(2/ 3 x [80-301 adopted by the Supreme Court in
the case of Villa Rey transit Inc. vs. Court of
Appeals, 31 SCRA 511 on the basis of the
American Expectancy Table of Mortality or the
Actualrial (sic) Combined Experience Table of
Morality. In the computation of the amount
recoverable by the heirs of the victim of tort, the
loss of the entire earnings is not considered. It is
only the net earnings lease expenses necessary in
the creation of such earnings or income and less
living and other incidental expenses. In the case at
bar, the earnings after computing was P904.96 a
year and deduction of P200.00 a month as
necessary expenses to the creation of such
income is reasonable. The amount of P704.96 net
yearly income multiplied by 14 years, or P9,869.44
is the amount which should be awarded to
appellants. (Davila vs. Phil. Air Lines, 49 SCRA
497; People vs. Henson, CA-G.R. No. 12521-CR,
May 25, 1973). Then to, We believe that the award
of damages for the death of Dra. Leus in the
amount of P200,000.00 without interest is
reasonable and We find no justification to modify.
In view thereof, appellee Melvida is hereby
ordered to pay complainant--appellants additional
sum of P9,869.44.
WHEREFORE, with the modification as to the
award of damages, the decision appealed from is
hereby AFFIRMED in all other respects.4
Petitioner now comes before this Court raising the legal issue whether
or not the trial court should be ordered to determine the civil liability of
Rosas and subsidiary civil liability of the owners of the car and the bus
to the heirs of Dra. Diaz-Leus in accordance with Article 29 of the Civil
Code which provides--
Art. 29. When the accused in a criminal
prosecution is acquitted on the ground that his
guilt has not been proved beyond reasonable
doubt, a civil action for damages for the same act
or omission may be instituted. Such action
requires only a preponderance of evidence. Upon
motion of the defendant, the court may require the
plaintiff to file a bond to answer for damages in
case the complaint should be found to be
malicious.
If in a criminal case the judgment of acquittal is
based upon reasonable doubt, the court shall so
declare. In the absence of any declaration to that
effect, it may be inferred from the text of the
decision whether or not the acquittal is due to that
ground.
Petitioner also invokes the ruling of this Court in Paman vs. Seneris,5
where it was held —
Moreover, it has been invariably held that a
judgment of conviction sentencing a defendant
employer to pay an indemnity in the absence of
any collusion between the defendant and the
offended party, is conclusive upon the employer in
an action for the enforcement of the latter's
subsidiary liability not only with regard to the civil
liability, but also with regard to its amount.
This being the case, this Court stated in Rotea vs.
Halili, 109 Phil. 495 that the court has no other
function than to render decision based upon the
indemnity awarded in the criminal case and has no
power to amend or modify it even if in its opinion
an error has been committed in the decision. A
separate and independent action is, therefore,
unnecessary and would only unduly prolong the
agony of the victim.' (115 SCRA, P. 715).
The findings of the Court of Appeals were a complete exoneration of
Rosas. Since petitioner's appeal on the civil aspect is predicated upon
Rosas' alleged negligence which has been found not to exist, this
Court must likewise uphold the Court of Appeals' ruling that Rosas'
acquittal in the criminal case carries with it the extinction of his civil
liability which bars herein petitioners from recovering damages from
Rosas. Since Rosas is absolved from any act of negligence which in
effect prevents further recovery of any damages, the same is likewise
true with respect to his employer victory Liner, Inc. which at most would
have been only subsidiarily liable.
Nor can the spouses Jesus Gali and Leonisa Gali as employers of
respondent Hernani Melvida be subsidiarily liable. Art. 103 of the
Revised Penal Code provides,
The subsidiary liability established in the next
preceding article shall also apply to employers,
teachers, persons and corporations engaged in
any kind of industry for felonies committed by their
servants, pupils, workmen, apprentices, or
employees in the discharge of their duties.
In order that employers may be held liable under the above-quoted
provision of law, the following requisites must exist.
(1) That an employee has committed a mime in
the discharge of his duties;
(2) that said employee is insolvent and has not
satisfied his civil liability; and
(3) that the employer is engaged in some kind of
industry. 6
The preceding requisites are not present in the case of the Gali
spouses. They are not engaged in any kind of industry. Industry has
been defined as any department or branch of art, occupation or
business, especially, one which employs much labor and capital and is
a distinct branch of trade, as the sugar industry. 7
Thus, the Gali spouses cannot be held subsidiarily liable. As We stated
in a previous case: "Where the defendant is admittedly a private
person who has no business or industry, and uses his automobile for
private purposes, he is not also subsidiarily liable to the plaintiff for the
damages to the latter's car caused by the reckless imprudence of his
insolvent driver." 8
WHEREFORE, the petition is DENIED. No costs.
SO ORDERED.
RAFAEL REYES TRUCKING CORPORATION, petitioner,
vs.
PEOPLE OF THE PHILIPPINES and ROSARIO P. DY (for herself
and on behalf of the minors Maria Luisa, Francis Edward, Francis
Mark and Francis Rafael, all surnamed Dy), respondents.
PARDO, J.:
The case is an appeal via certiorari from the amended decision 1 of the
Court of Appeals2 affirming the decision and supplemental decision of
the trial court,3 as follows:
IN VIEW OF THE FOREGOING, judgment is hereby
rendered dismissing the appeals interposed by both accused
and Reyes Trucking Corporation and affirming the Decision
and Supplemental Decision dated June 6, 1992 and October
26, 1992 respectively.
SO ORDERED.4
The facts are as follows:
On October 10, 1989, Provincial Prosecutor Patricio T. Durian of
Isabela filed with the Regional Trial Court, Isabela, Branch 19,
Cauayan an amended information charging Romeo Dunca y de Tumol
with reckless imprudence resulting in double homicide and damage to
property, reading as follows:
That on or about the 20th day of June, 1989, in the
Municipality of Cauayan, Province of Isabela, Philippines,
and within the jurisdiction of this Honorable Court, the said
accused being the driver and person-in-charge of a Trailer
Truck Tractor bearing Plate No. N2A-867 registered in the
name of Rafael Reyes Trucking Corporation, with a load of
2,000 cases of empty bottles of beer grande, willfully,
unlawfully and feloniously drove and operated the same
while along the National Highway of Barangay Tagaran, in
said Municipality, in a negligent, careless and imprudent
manner, without due regard to traffic laws, rules and
ordinances and without taking the necessary precautions to
prevent injuries to persons and damage to property, causing
by such negligence, carelessness and imprudence the said
trailer truck to hit and bump a Nissan Pick-up bearing Plate
No. BBG-957 driven by Feliciano Balcita and Francisco Dy,
Jr., @ Pacquing, due to irreversible shock, internal and
external hemorrhage and multiple injuries, open wounds,
abrasions, and further causing damages to the heirs of
 Feliciano Balcita in the amount of P100,000.00 and to the
death of Francisco Dy, Jr.; @ Pacquing and damages to his
Nissan Pick-Up bearing Plate No. BBG-957 in the total
amount of P2,000,000.00.
CONTRARY TO LAW.
Cauayan, Isabela, October 10, 1989.
(Sgd.) FAUSTO C. CABANTAC
Third Assistant Provincial Prosecutor
Upon arraignment on October 23, 1989, the accused entered a plea of
not guilty. On the same occasion, the offended parties (Rosario P. Dy
and minor children and Angelina M. Balcita and minor son Paolo)
made a reservation to file a separate civil action against the accused
arising from the offense charged.5 On November 29, 1989, the
offended parties actually filed with the Regional Trial Court, Isabela,
Branch 19, Cauayan a complaint against petitioner Rafael Reyes
Trucking Corporation, as employer of driver Romeo Dunca y de Tumol,
based on quasi delict. The petitioner settled the claim of the heirs of
Feliciano Balcita (the driver of the other vehicle involved in the
accident). The private respondents opted to pursue the criminal action
but did not withdraw the civil case quasi ex delicto they filed against
petitioner. On December 15, 1989, private respondents withdrew the
reservation to file a separate civil action against the accused and
manifested that they would prosecute the civil aspect ex delicto in the
criminal action.6 However, they did not withdraw the separate civil
action based on quasi delict against petitioner as employer arising from
the same act or omission of the accused driver.7
Upon agreement of the parties, the trial court consolidated both
criminal and civil cases and conducted a joint trial of the same.
The facts, as found by the trial court, which appear to be undisputed,
are as follows:
The defendant Rafael Reyes Trucking Corporation is a
domestic corporation engaged in the business of
transporting beer products for the San Miguel Corporation
(SMC for Short) from the latter's San Fernando, Pampanga
plant to its various sales outlets in Luzon. Among its fleets of
vehicles for hire is the white truck trailer described above
driven by Romeo Dunca y Tumol, a duly licensed driver.
Aside from the Corporation's memorandum to all its drivers
and helpers to physically inspect their vehicles before each
trip (Exh. 15, pars. 4 & 5), the SMC's Traffic Investigator-
Inspector certified the roadworthiness of this White Truck
trailer prior to June 20, 1989 (Exh. 17). In addition to a
professional driver's license, it also conducts a rigid
examination of all driver applicants before they are hired.
In the early morning of June 20, 1989, the White Truck
driven by Dunca left Tuguegarao, Cagayan bound to San
Fernando, Pampanga loaded with 2,000 cases of empty
beer "Grande" bottles. Seated at the front right seat beside
him was Ferdinand Domingo, his truck helper ("pahinante" in
Pilipino). At around 4:00 o'clock that same morning while the
truck was descending at a slight downgrade along the
national road at Tagaran, Cauayan, Isabela, it approached a
damaged portion of the road covering the full width of the
truck's right lane going south and about six meters in length.
These made the surface of the road uneven because the
potholes were about five to six inches deep. The left lane
parallel to this damaged portion is smooth. As narrated by
Ferdinand Domingo, before approaching the potholes, he
and Dunca saw the Nissan with its headlights on coming
from the opposite direction. They used to evade this
damaged road by taking the left lance but at that particular
moment, because of the incoming vehicle, they had to run
over it. This caused the truck to bounce wildly. Dunca lost
control of the wheels and the truck swerved to the left
invading the lane of the Nissan. As a result, Dunca's vehicle
rammed the incoming Nissan dragging it to the left shoulder
of the road and climbed a ridge above said shoulder where it
finally stopped. (see Exh. A-5, p. 8, record). The Nissan was
severely damaged (Exhs. A-7, A-8, A-9 and A-14, pp. 9-11
record), and its two passengers, namely: Feliciano Balcita
and Francisco Dy, Jr. died instantly (Exh. A-19) from external
and internal hemorrhage and multiple fractures (pp. 15 and
16, record).
For the funeral expenses of Francisco Dy, Jr. her widow
spent P651,360.00 (Exh. I-3). At the time of his death he was
45 years old. He was the President and Chairman of the
Board of the Dynamic Wood Products and Development
Corporation (DWPC), a wood processing establishment,
from which he was receiving an income of P10,000.00 a
month. (Exh. D). In the Articles of Incorporation of the
DWPC, the spouses Francisco Dy, Jr. and Rosario Perez Dy
appear to be stockholders of 10,000 shares each with par
value of P100.00 per share out of its outstanding and
subscribed capital stock of 60,000 shares valued at
P6,000,000.00 (Exhs. K-1 & 10-B). Under its 1988 Income
Tax Returns (Exh. J) the DWPC had a taxable net income of
P78,499.30 (Exh. J). Francisco Dy, Jr. was a La Salle
University graduate in Business Administration, past
president of the Pasay Jaycees, National Treasurer and
President of the Philippine Jaycees in 1971 and 1976,
respectively, and World Vice-President of Jaycees
International in 1979. He was also the recipient of numerous
awards as a civic leader (Exh. C). His children were all
studying in prestigious schools and spent about P180,000.00
for their education in 1988 alone (Exh. H-4).
As stated earlier, the plaintiffs' procurement of a writ of
attachment of the properties of the Corporation was declared
illegal by the Court of Appeals. It was shown that on
December 26, 1989, Deputy Sheriff Edgardo Zabat of the
RTC at San Fernando, Pampanga, attached six units of
Truck Tractors and trailers of the Corporation at its garage at
San Fernando, Pampanga. These vehicles were kept under
PC guard by the plaintiffs in said garage thus preventing the
Corporation to operate them. However, on December 28,
1989, the Court of Appeals dissolved the writ (p. 30, record)
and on December 29, 1989, said Sheriff reported to this
Court that the attached vehicles were taken by the
defendant's representative, Melita Manapil (Exh. O, p. 31,
record). The defendant's general Manager declared that it
lost P21,000.00 per day for the non-operation of the six units
during their attachment (p. 31, t.s.n., Natividad C. Babaran,
proceedings on December 10, 1990).8
On June 6, 1992, the trial court rendered a joint decision, the
dispositive portion of which reads as follows:
WHEREFORE, in view of the foregoing considerations
judgment is hereby rendered:
1. Finding the accused Romeo Dunca y de Tumol guilty
beyond reasonable doubt of the crime of Double Homicide
through Reckless Imprudence with violation of the Motor
Vehicle Law (Rep. Act No. 4136), and appreciating in his
favor the mitigating circumstance of voluntary surrender
without any aggravating circumstance to offset the same, the
Court hereby sentences him to suffer two (2) indeterminate
penalties of four months and one day of arresto mayor as
minimum to three years, six months and twenty days as
maximum; to indemnify the Heirs of Francisco Dy. Jr. in the
amount of P3,000,000.00 as compensatory damages,
P1,000,000.00 as moral damages, and P1,030,000.00 as
funeral expenses;
2. Ordering the plaintiff in Civil Case No. Br. 19-424 to pay
the defendant therein actual damages in the amount of
P84,000.00; and
3. Ordering the dismissal of the complaint in Civil Case No.
Br. 19-424.
No pronouncement as to costs.
SO ORDERED.
Cauayan, Isabela, June 6, 1992.
(Sgd.) ARTEMIO R. ALIVIA
Regional Trial Judge9
On September 3, 1992, petitioner and the accused filed a notice of
appeal from the joint decision. 10
On the other hand, private respondents moved for amendment of the
dispositive portion of the joint decision so as to hold petitioner
subsidiarily liable for the damages awarded to the private respondents
in the event of insolvency of the accused. 11
On October 26, 1992, the trial court rendered a supplemental decision
amending the dispositive portion by inserting an additional paragraph
reading as follows:
2:A — Ordering the defendant Reyes Trucking Corporation
subsidiarily liable for all the damages awarded to the heirs of
Francisco Dy, Jr., in the event of insolvency of the accused
but deducting therefrom the damages of P84,000.00
awarded to said defendant in the next preceding paragraph;
and . . . 12
On November 12, 1992, petitioner filed with the trial court a
supplemental notice of appeal from the supplemental decision. 13
During the pendency of the appeal, the accused jumped bail and fled
to a foreign country. By resolution dated December 29, 1994, the Court
of Appeals dismissed the appeal of the accused in the criminal case.
14
On January 6, 1997, the Court of Appeals rendered an amended
decision affirming that of the trial court, as set out in the opening
paragraph of this decision. 15
On January 31, 1997, petitioner filed a motion for reconsideration of
the amended decision. 16
On April 21, 1997, the Court of Appeals denied petitioner's motion for
reconsideration for lack of merit 17
Hence, this petition for review. 18
On July 21, 1997, the Court required respondents to comment on the
petition within ten (10) days from notice. 19
On January 27, 1998, the Solicitor General filed his comment. 20 On
April 13, 1998, the Court granted leave to petitioner to file a reply and
noted the reply it filed on March 11, 1998. 21
We now resolve to give due course to the petition and decide the case.
Petitioner raises three (3) grounds for allowance of the petition, which,
however, boil down to two (2) basic issues, namely:
1. May petitioner as owner of the truck involved in the
accident be held subsidiarily liable for the damages awarded
to the offended parties in the criminal action against the truck
driver despite the filing of a separate civil action by the
offended parties against the employer of the truck driver?
2. May the Court award damages to the offended parties in
the criminal case despite the filing of a civil action against the
employer of the truck driver; and in amounts exceeding that
alleged in the information for reckless imprudence resulting
in homicide and damage to property? 22
We grant the petition, resolving under the circumstances pro hac vice
to remand the cases to the trial court for determination of the civil
liability of petitioner as employer of the accused driver in the civil action
quasi ex delicto re-opened for the purpose.
In negligence cases, the aggrieved party has the choice between (1)
an action to enforce civil liability arising from crime under Article 100 of
the Revised Penal Code; and (2) a separate action for quasi delict
under Article 2176 of the Civil Code of the Philippines. Once the choice
is made, the injured party can not avail himself of any other remedy
because he may not recover damages twice for the same negligent act
or omission of the accused. 23 This is the rule against double
recovery.1âwphi1.nêt
In other words, "the same act or omission can create two kinds of
liability on the part of the offender, that is, civil liability ex delicto, and
civil liability quasi delicto" either of which "may be enforced against the
culprit, subject to the caveat under Article 2177 of the Civil Code that
the offended party can not recover damages under both types of
liability." 24
In the instant case, the offended parties elected to file a separate civil
action for damages against petitioner as employer of the accused,
based on quasi delict, under Article 2176 of the Civil Code of the
Philippines. Private respondents sued petitioner Rafael Reyes Trucking
Corporation, as the employer of the accused, to be vicariously liable for
the fault or negligence of the latter. Under the law, this vicarious liability
of the employer is founded on at least two specific provisions of law.
The first is expressed in Article 2176 in relation to Article 2180 of the
Civil Code, which would allow an action predicated on quasi-delict to
be instituted by the injured party against the employer for an act or
omission of the employee and would necessitate only a preponderance
of evidence to prevail. Here, the liability of the employer for the
negligent conduct of the subordinate is direct and primary, subject to
the defense of due diligence in the selection and supervision of the
employee. The enforcement of the judgment against the employer in
an action based on Article 2176 does not require the employee to be
insolvent since the nature of the liability of the employer with that of the
employee, the two being statutorily considered joint tortfeasors, is
solidary. 25 The second, predicated on Article 103 of the Revised
Penal Code, provides that an employer may be held subsidiarily civilly
liable for a felony committed by his employee in the discharge of his
duty. This liability attaches when the employee is convicted of a crime
done in the performance of his work and is found to be insolvent that
renders him unable to properly respond to the civil liability adjudged. 26
As regards the first issue, the answer is in the negative. Rafael Reyes
Trucking Corporation, as employer of the accused who has been
adjudged guilty in the criminal case for reckless imprudence, can not
be held subsidiarily liable because of the filing of the separate civil
action based on quasi delict against it. In view of the reservation to file,
and the subsequent filing of the civil action for recovery of civil liability,
the same was not instituted with the criminal action. Such separate civil
action was for recovery of damages under Article 2176 of the Civil
Code, arising from the same act or omission of the accused. 27
Pursuant to the provision of Rule 111, Section 1, paragraph 3 of the
1985 Rules of Criminal Procedure, when private respondents, as
complainants in the criminal action, reserved the right to file the
separate civil action, they waived other available civil actions
predicated on the same act or omission of the accused-driver. Such
civil action includes the recovery of indemnity under the Revised Penal
Code, and damages under Articles 32, 33, and 34 of the Civil Code of
the Philippines arising from the same act or omission of the accused.
28
The intention of private respondents to proceed primarily and directly
against petitioner as employer of accused truck driver became clearer
when they did not ask for the dismissal of the civil action against the
latter based on quasi delict.
Consequently, the Court of Appeals and the trial court erred in holding
the accused civilly liable, and petitioner-employer of the accused
subsidiarily liable for damages arising from crime (ex delicto) in the
criminal action as the offended parties in fact filed a separate civil
action against the employer based on quasi delict resulting in the
waiver of the civil action ex delicto.
It might be argued that private respondents as complainants in the
criminal case withdrew the reservation to file a civil action against the
driver (accused) and manifested that they would pursue the civil liability
of the driver in the criminal action. However, the withdrawal is
ineffective to reverse the effect of the reservation earlier made because
private respondents did not withdraw the civil action against petitioner
based on quasi delict. In such a case, the provision of Rule 111,
Section 1, paragraph 3 of the 1985 Rules on Criminal Procedure is
clear that the reservation to file or the filing of a separate civil action
results in a waiver of other available civil actions arising from the same
act or omission of the accused. Rule 111, Section 1, paragraph 2
enumerated what are the civil actions deemed waived upon such
reservation or filing, and one of which is the civil indemnity under the
Revised Penal Code. Rule 111, Section 1, paragraph 3 of the 1985
Rules on Criminal Procedure specifically provides:
A waiver of any of the civil actions extinguishes the others.
The institution of, or the reservation of the right to file, any of
said civil actions separately waives the others.
The rationale behind this rule is the avoidance of multiple suits
between the same litigants arising out of the same act or omission of
the offender. The restrictive phraseology of the section under
consideration is meant to cover all kinds of civil actions, regardless of
their source in law, provided that the action has for its basis the same
act or omission of the offender. 29
However, petitioner as defendant in the separate civil action for
damages filed against it, based on quasi delict, may be held liable
thereon. Thus, the trial court grievously erred in dismissing plaintiff's
civil complaint. And the Court of Appeals erred in affirming the trial
court's decision. Unfortunately private respondents did not appeal from
such dismissal and could not be granted affirmative relief. 30
The Court, however, in exceptional cases has relaxed the rules "in
order to promote their objectives and assist the parties in obtaining
just, speedy, and inexpensive determination of every action or
proceeding" 31 or exempted "a particular case from the operation of
the rules." 32
Invoking this principle, we rule that the trial court erred in awarding civil
damages in the criminal case and in dismissing the civil action.
Apparently satisfied with such award, private respondent did not
appeal from the dismissal of the civil case. However, petitioner did
appeal. Hence, this case should be remanded to the trial court so that
it may render decision in the civil case awarding damages as may be
warranted by the evidence. 33
With regard to the second issue, the award of damages in the criminal
case was improper because the civil action for the recovery of civil
liability was waived in the criminal action by the filing of a separate civil
action against the employer. As enunciated in Ramos vs. Gonong, 34
"civil indemnity is not part of the penalty for the crime committed." The
only issue brought before the trial court in the criminal action is whether
accused Romeo Dunca y de Tumol is guilty of reckless imprudence
resulting in homicide and damage to property. The action for recovery
of civil liability is not included therein, but is covered by the separate
civil action filed against the petitioner as employer of the accused
truck-driver.
In this case, accused-driver jumped bail pending his appeal from his
conviction. Thus, the judgment convicting the accused became final
and executory, but only insofar as the penalty in the criminal action is
concerned. The damages awarded in the criminal action was invalid
because of its effective waiver. The pronouncement was void because
the action for recovery of the civil liability arising from the crime has
been waived in said criminal action.
With respect to the issue that the award of damages in the criminal
action exceeded the amount of damages alleged in the amended
information, the issue is de minimis. At any rate, the trial court erred in
awarding damages in the criminal case because by virtue of the
reservation of the right to bring a separate civil action or the filing
thereof, "there would be no possibility that the employer would be held
liable because in such a case there would be no pronouncement as to
the civil liability of the accused. 35
As a final note, we reiterate that "the policy against double recovery
requires that only one action be maintained for the same act or
omission whether the action is brought against the employee or against
his employer. 36 The injured party must choose which of the available
causes of action for damages he will bring. 37
Parenthetically, the trial court found the accused "guilty beyond
reasonable doubt of the crime of Double Homicide Through Reckless
Imprudence with violation of the Motor Vehicle Law (Rep. Act No.
4136)". There is no such nomenclature of an offense under the
Revised Penal Code. Thus, the trial court was misled to sentence the
accused "to suffer two (2) indeterminate penalties of four (4) months
and one (1) day of arresto mayor, as minimum, to three (3) years, six
(6) months and twenty (20) days of prision correccional, as maximum."
This is erroneous because in reckless imprudence cases, the actual
penalty for criminal negligence bears no relation to the individual willfull
crime or crimes committed, but is set in relation to a whole class, or
series of crimes. 38
Unfortunately, we can no longer correct this judgment even if
erroneous, as it is, because it has become final and executory.
Under Article 365 of the Revised Penal Code, criminal negligence "is
treated as a mere quasi offense, and dealt with separately from willful
offenses. It is not a question of classification or terminology. In
intentional crimes, the act itself is punished; in negligence or
imprudence, what is principally penalized is the mental attitude or
condition behind the act, the dangerous recklessness, lack of care or
foresight, the imprudencia punible. Much of the confusion has arisen
from the common use of such descriptive phrase as "homicide through
reckless imprudence", and the like; when the strict technical sense is,
more accurately, "reckless imprudence resulting in homicide"; or
"simple imprudence causing damages to property"." 39
There is need, therefore, to rectify the designation of the offense
without disturbing the imposed penalty for the guidance of bench and
bar in strict adherence to precedent.
WHEREFORE, the Court GRANTS the petition and SETS ASIDE the
amended decision and resolution of the Court of Appeals in CA-G.R.
CR No. 14448, promulgated on January 6, 1997, and the joint decision
of the Regional Trial Court, Isabela, Branch 19, Cauayan, in Criminal
Case No. Br. 19-311 and Civil Case No. Br. 19-424, dated June 6,
1992.
IN LIEU THEREOF, the Court renders judgment as follows:
(1) In Criminal Case No. Br. 19-311, the Court declares the
accused Romeo Dunca y de Tumol guilty beyond reasonable
doubt of reckless imprudence resulting in homicide and
damage to property, defined and penalized under Article
365, paragraph 2 of the Revised Penal Code, with violation
of the automobile law (R.A. No. 4136, as amended), and
sentences him to suffer two (2) indeterminate penalties of
four (4) months and one (1) day of arresto mayor, as
minimum, to three (3) years, six (6) months and twenty (20)
days of prision correccional, as maximum, 40 without
indemnity, and to pay the costs, and
(2) In Civil Case No. Br. 19-424, the Court orders the case
re-opened to determine the liability of the defendant Rafael
Reyes Trucking Corporation to plaintiffs and that of plaintiffs
on defendant's counterclaim.
No costs in this instance.
SO ORDERED.
MVRS PUBLICATIONS, INC., MARS C. LACONSAY, MYLA C.
AGUJA and AGUSTINO G. BINEGAS, JR., petitioners,
vs.
ISLAMIC DA'WAH COUNCIL OF THE PHILIPPINES, INC.,
ABDULRAHMAN R.T. LINZAG, IBRAHIM F.P. ARCILLA, ABDUL
RASHID DE GUZMAN, AL-FARED DA SILVA and IBRAHIM B.A.
JUNIO, respondents.
BELLOSILLO, J.:
I may utterly detest what you write, but I shall fight to the
death to make it possible for you to continue writing it. —
Voltaire
VOLTAIRE'S PONTIFICAL VERSE bestirs once again the basic
liberties to free speech and free press — liberties that belong as well, if
not more, to those who question, who do not conform, who differ. For
the ultimate good which we all strive to achieve for ourselves and our
posterity can better be reached by a free exchange of ideas, where the
best test of truth is the power of the thought to get itself accepted in the
competition of the free market — not just the ideas we desire, but
including those thoughts we despise.1
ISLAMIC DA'WAH COUNCIL OF THE PHILIPPINES, INC., a local
federation of more than seventy (70) Muslim religious organizations,
and individual Muslims ABDULRAHMAN R.T. LINZAG, IBRAHIM F.P.
ARCILLA, ABDUL RASHID DE GUZMAN, AL-FARED DA SILVA and
IBRAHIM B.A. JUNIO, filed in the Regional Trial Court of Manila a
complaint for damages in their own behalf and as a class suit in behalf
of the Muslim members nationwide against MVRS PUBLICATIONS,
INC., MARS C. LACONSAY, MYLA C. AGUJA and AGUSTINO G.
BINEGAS, JR., arising from an article published in the 1 August 1992
issue of Bulgar, a daily tabloid. The article reads:
"ALAM BA NINYO?
Na ang mga baboy at kahit anong uri ng hayop sa Mindanao
ay hindi kinakain ng mga Muslim?
Para sa kanila ang mga ito ay isang sagradong bagay. Hindi
nila ito kailangang kainin kahit na sila pa ay magutom at
mawalan ng ulam sa tuwing sila ay kakain. Ginagawa nila
itong Diyos at sinasamba pa nila ito sa tuwing araw ng
kanilang pangingilin lalung-lalo na sa araw na tinatawag
nilang 'Ramadan'."
The complaint alleged that the libelous statement was insulting and
damaging to the Muslims; that these words alluding to the pig as the
God of the Muslims was not only published out of sheer ignorance but
with intent to hurt the feelings, cast insult and disparage the Muslims
and Islam, as a religion in this country, in violation of law, public policy,
good morals and human relations; that on account of these libelous
words Bulgar insulted not only the Muslims in the Philippines but the
entire Muslim world, especially every Muslim individual in non-Muslim
countries.
MVRS PUBLICATIONS, INC., and AGUSTINO G. BINEGAS, JR., in
their defense, contended that the article did not mention respondents
as the object of the article and therefore were not entitled to damages;
and, that the article was merely an expression of belief or opinion and
was published without malice nor intention to cause damage, prejudice
or injury to Muslims.2
On 30 June 1995 the trial court dismissed the complaint holding that
the plaintiffs failed to establish their cause of action since the persons
allegedly defamed by the article were not specifically identified —
It must be noted that the persons allegedly defamed, the
herein plaintiffs, were not identified with specificity. The
subject article was directed at the Muslims without
mentioning or identifying the herein plaintiffs x x x. It is thus
apparent that the alleged libelous article refers to the larger
collectivity of Muslims for which the readers of the libel could
not readily identify the personalities of the persons defamed.
Hence, it is difficult for an individual Muslim member to prove
that the defamatory remarks apply to him. The evidence
presented in this case failed to convince this court that,
indeed, the defamatory remarks really applied to the herein
plaintiffs.3
On 27 August 1998 the Court of Appeals reversed the decision of the
trial court. It opined that it was "clear from the disputed article that the
defamation was directed to all adherents of the Islamic faith. It stated
that pigs were sacred and idolized as god by members of the Muslim
religion. This libelous imputation undeniably applied to the plaintiff-
appellants who are Muslims sharing the same religious beliefs." It
added that the suit for damages was a "class suit" and that ISLAMIC
DA'WAH COUNCIL OF THE PHILIPPINES, INC.'s religious status as a
Muslim umbrella organization gave it the requisite personality to sue
and protect the interests of all Muslims.4
Hence, the instant petition for review assailing the findings of the
appellate court (a) on the existence of the elements of libel, (b) the
right of respondents to institute the class suit, and, (c) the liability of
petitioners for moral damages, exemplary damages, attorney's fees
and costs of suit.
Defamation, which includes libel and slander, means the offense of
injuring a person's character, fame or reputation through false and
malicious statements.5 It is that which tends to injure reputation or to
diminish the esteem, respect, good will or confidence in the plaintiff or
to excite derogatory feelings or opinions about the plaintiff. 6 It is the
publication of anything which is injurious to the good name or
reputation of another or tends to bring him into disrepute. 7 Defamation
is an invasion of a relational interest since it involves the opinion which
others in the community may have, or tend to have, of the plaintiff.8
It must be stressed that words which are merely insulting are not
actionable as libel or slander per se, and mere words of general abuse
however opprobrious, ill-natured, or vexatious, whether written or
spoken, do not constitute a basis for an action for defamation in the
absence of an allegation for special damages. 9 The fact that the
language is offensive to the plaintiff does not make it actionable by
itself.10
Declarations made about a large class of people cannot be interpreted
to advert to an identified or identifiable individual. Absent
circumstances specifically pointing or alluding to a particular member
of a class, no member of such class has a right of action 11 without at all
impairing the equally demanding right of free speech and expression,
as well as of the press, under the Bill of Rights.12 Thus, in Newsweek,
Inc. v. Intermediate Appellate Court,13 we dismissed a complaint for
libel against Newsweek, Inc., on the ground that private respondents
failed to state a cause of action since they made no allegation in the
complaint that anything contained in the article complained of
specifically referred to any of them. Private respondents, incorporated
associations of sugarcane planters in Negros Occidental claiming to
have 8,500 members and several individual members, filed a class
action suit for damages in behalf of all sugarcane planters in Negros
Occidental. The complaint filed in the Court of First Instance of Bacolod
City alleged that Newsweek, Inc., committed libel against them by the
publication of the article "Island of Fear" in its weekly newsmagazine
allegedly depicting Negros Province as a place dominated by wealthy
landowners and sugar planters who not only exploited the
impoverished and underpaid sugarcane workers but also brutalized
and killed them with impunity. Private respondents alleged that the
article showed a deliberate and malicious use of falsehood, slanted
presentation and/or misrepresentation of facts intended to put the
sugarcane planters in a bad light, expose them to public ridicule,
discredit and humiliation in the Philippines and abroad, and make them
the objects of hatred, contempt and hostility of their agricultural
workers and of the public in general. We ratiocinated —
x x x where the defamation is alleged to have been directed
at a group or class, it is essential that the statement must be
so sweeping or all-embracing as to apply to every individual
in that group or class, or sufficiently specific so that each
individual in the class or group can prove that the defamatory
statement specifically pointed to him, so that he can bring
the action separately, if need be x x x x The case at bar is
not a class suit. It is not a case where one or more may sue
for the benefit of all, or where the representation of class
interest affected by the judgment or decree is indispensable
to make each member of the class an actual party. We have
here a case where each of the plaintiffs has a separate and
distinct reputation in the community. They do not have a
common or general interest in the subject matter of the
controversy.
In the present case, there was no fairly identifiable person who was
allegedly injured by the Bulgar article. Since the persons allegedly
defamed could not be identifiable, private respondents have no
individual causes of action; hence, they cannot sue for a class
allegedly disparaged. Private respondents must have a cause of action
in common with the class to which they belong to in order for the case
to prosper.
An individual Muslim has a reputation that is personal, separate and
distinct in the community. Each Muslim, as part of the larger Muslim
community in the Philippines of over five (5) million people, belongs to
a different trade and profession; each has a varying interest and a
divergent political and religious view — some may be conservative,
others liberal. A Muslim may find the article dishonorable, even
blasphemous; others may find it as an opportunity to strengthen their
faith and educate the non-believers and the "infidels." There is no
injury to the reputation of the individual Muslims who constitute this
community that can give rise to an action for group libel. Each
reputation is personal in character to every person. Together, the
Muslims do not have a single common reputation that will give them a
common or general interest in the subject matter of the controversy.
In Arcand v. The Evening Call Publishing Company,14 the United
States Court of Appeals held that one guiding principle of group libel is
that defamation of a large group does not give rise to a cause of action
on the part of an individual unless it can be shown that he is the target
of the defamatory matter.
The rule on libel has been restrictive. In an American case, 15 a person
had allegedly committed libel against all persons of the Jewish religion.
The Court held that there could be no libel against an extensive
community in common law. In an English case, where libel consisted of
allegations of immorality in a Catholic nunnery, the Court considered
that if the libel were on the whole Roman Catholic Church generally,
then the defendant must be absolved. 16 With regard to the largest
sectors in society, including religious groups, it may be generally
concluded that no criminal action at the behest of the state, or civil
action on behalf of the individual, will lie.
In another case, the plaintiffs claimed that all Muslims, numbering more
than 600 million, were defamed by the airing of a national television
broadcast of a film depicting the public execution of a Saudi Arabian
princess accused of adultery, and alleging that such film was "insulting
and defamatory" to the Islamic religion. 17 The United States District
Court of the Northern District of California concluded that the plaintiffs'
prayer for $20 Billion in damages arising from "an international
conspiracy to insult, ridicule, discredit and abuse followers of Islam
throughout the world, Arabs and the Kingdom of Saudi Arabia"
bordered on the "frivolous," ruling that the plaintiffs had failed to
demonstrate an actionable claim for defamation. The California Court
stressed that the aim of the law on defamation was to protect
individuals; a group may be sufficiently large that a statement
concerning it could not defame individual group members.18
Philip Wittenberg, in his book "Dangerous Words: A Guide to the Law
of Libel,"19 discusses the inappropriateness of any action for tortious
libel involving large groups, and provides a succinct illustration:
There are groupings which may be finite enough so that a
description of the body is a description of the members. Here
the problem is merely one of evaluation. Is the description of
the member implicit in the description of the body, or is there
a possibility that a description of the body may consist of a
variety of persons, those included within the charge, and
those excluded from it?
A general charge that the lawyers in the city are shysters
would obviously not be a charge that all of the lawyers were
shysters. A charge that the lawyers in a local point in a great
city, such as Times Square in New York City, were shysters
would obviously not include all of the lawyers who practiced
in that district; but a statement that all of the lawyers who
practiced in a particular building in that district were shysters
would be a specific charge, so that any lawyer having an
office within that building could sue.
If the group is a very large one, then the alleged libelous statement is
considered to have no application to anyone in particular, since one
might as well defame all mankind. Not only does the group as such
have no action; the plaintiff does not establish any personal reference
to himself.20 At present, modern societal groups are both numerous
and complex. The same principle follows with these groups: as the size
of these groups increases, the chances for members of such groups to
recover damages on tortious libel become elusive. This principle is said
to embrace two (2) important public policies: first, where the group
referred to is large, the courts presume that no reasonable reader
would take the statements as so literally applying to each individual
member; and second, the limitation on liability would satisfactorily
safeguard freedom of speech and expression, as well as of the press,
effecting a sound compromise between the conflicting fundamental
interests involved in libel cases.21
In the instant case, the Muslim community is too vast as to readily
ascertain who among the Muslims were particularly defamed. The size
of the group renders the reference as indeterminate and generic as a
similar attack on Catholics, Protestants, Buddhists or Mormons would
do. The word "Muslim" is descriptive of those who are believers of
Islam, a religion divided into varying sects, such as the Sunnites, the
Shiites, the Kharijites, the Sufis and others based upon political and
theological distinctions. "Muslim" is a name which describes only a
general segment of the Philippine population, comprising a
heterogeneous body whose construction is not so well defined as to
render it impossible for any representative identification.
The Christian religion in the Philippines is likewise divided into different
sects: Catholic, Baptist, Episcopalian, Presbyterian, Lutheran, and
other groups the essence of which may lie in an inspired charlatan,
whose temple may be a corner house in the fringes of the countryside.
As with the Christian religion, so it is with other religions that represent
the nation's culturally diverse people and minister to each one's
spiritual needs. The Muslim population may be divided into smaller
groups with varying agenda, from the prayerful conservative to the
passionately radical. These divisions in the Muslim population may still
be too large and ambiguous to provide a reasonable inference to any
personality who can bring a case in an action for libel.
The foregoing are in essence the same view scholarly expressed by
Mr. Justice Reynato S. Puno in the course of the deliberations in this
case. We extensively reproduce hereunder his comprehensive and
penetrating discussion on group libel —
Defamation is made up of the twin torts of libel and slander
— the one being, in general, written, while the other in
general is oral. In either form, defamation is an invasion of
the interest in reputation and good name. This is a "relational
interest" since it involves the opinion others in the community
may have, or tend to have of the plaintiff.
The law of defamation protects the interest in reputation —
the interest in acquiring, retaining and enjoying one's
reputation as good as one's character and conduct warrant.
The mere fact that the plaintiff's feelings and sensibilities
have been offended is not enough to create a cause of
action for defamation. Defamation requires that something
be communicated to a third person that may affect the
opinion others may have of the plaintiff. The unprivileged
communication must be shown of a statement that would
tend to hurt plaintiff's reputation, to impair plaintiff's standing
in the community.
Although the gist of an action for defamation is an injury to
reputation, the focus of a defamation action is upon the
allegedly defamatory statement itself and its predictable
effect upon third persons. A statement is ordinarily
considered defamatory if it "tend[s] to expose one to public
hatred, shame, obloquy, contumely, odium, contempt,
ridicule, aversion, ostracism, degradation or disgracex x x."
The Restatement of Torts defines a defamatory statement as
one that "tends to so harm the reputation of another as to
lower him in the estimation of the community or to deter third
persons from associating or dealing with him."
Consequently as a prerequisite to recovery, it is necessary
for the plaintiff to prove as part of his prima facie case that
the defendant (1) published a statement that was (2)
defamatory (3) of and concerning the plaintiff.
The rule in libel is that the action must be brought by the
person against whom the defamatory charge has been
made. In the American jurisdiction, no action lies by a third
person for damages suffered by reason of defamation of
another person, even though the plaintiff suffers some injury
therefrom. For recovery in defamation cases, it is necessary
that the publication be "of and concerning the plaintiff." Even
when a publication may be clearly defamatory as to
somebody, if the words have no personal application to the
plaintiff, they are not actionable by him. If no one is
identified, there can be no libel because no one's reputation
has been injured x x x x
In fine, in order for one to maintain an action for an alleged
defamatory statement, it must appear that the plaintiff is the
person with reference to whom the statement was made.
This principle is of vital importance in cases where a group
or class is defamed since, usually, the larger the collective,
the more difficult it is for an individual member to show that
he was the person at whom the defamation was directed.
If the defamatory statements were directed at a small,
restricted group of persons, they applied to any member of
the group, and an individual member could maintain an
action for defamation. When the defamatory language was
used toward a small group or class, including every member,
it has been held that the defamatory language referred to
each member so that each could maintain an action. This
small group or class may be a jury, persons engaged in
certain businesses, professions or employments, a restricted
subdivision of a particular class, a society, a football team, a
family, small groups of union officials, a board of public
officers, or engineers of a particular company.
In contrast, if defamatory words are used broadly in respect
to a large class or group of persons, and there is nothing that
points, or by proper colloquium or innuendo can be made to
apply, to a particular member of the class or group, no
member has a right of action for libel or slander. Where the
defamatory matter had no special, personal application and
was so general that no individual damages could be
presumed, and where the class referred to was so numerous
that great vexation and oppression might grow out of the
multiplicity of suits, no private action could be maintained.
This rule has been applied to defamatory publications
concerning groups or classes of persons engaged in a
particular business, profession or employment, directed at
associations or groups of association officials, and to those
directed at miscellaneous groups or classes of persons.
Distinguishing a small group — which if defamed entitles all
its members to sue from a large group — which if defamed
entitles no one to sue — is not always so simple. Some
authorities have noted that in cases permitting recovery, the
group generally has twenty five (25) or fewer members.
However, there is usually no articulated limit on size. Suits
have been permitted by members of fairly large groups when
some distinguishing characteristic of the individual or group
increases the likelihood that the statement could be
interpreted to apply individually. For example, a single player
on the 60 to 70 man Oklahoma University football team was
permitted to sue when a writer accused the entire team of
taking amphetamines to "hop up" its performance; the
individual was a fullback, i.e., a significant position on the
team and had played in all but two of the team's games.
A prime consideration, therefore, is the public perception of
the size of the group and whether a statement will be
interpreted to refer to every member. The more organized
and cohesive a group, the easier it is to tar all its members
with the same brush and the more likely a court will permit a
suit from an individual even if the group includes more than
twenty five (25) members. At some point, however,
increasing size may be seen to dilute the harm to individuals
and any resulting injury will fall beneath the threshold for a
viable lawsuit.
x x x x There are many other groupings of men than those
that are contained within the foregoing group classifications.
There are all the religions of the world, there are all the
political and ideological beliefs; there are the many colors of
the human race. Group defamation has been a fertile and
dangerous weapon of attack on various racial, religious and
political minorities. Some states, therefore, have passed
statutes to prevent concerted efforts to harass minority
groups in the United States by making it a crime to circulate
insidious rumors against racial and religious groups. Thus
far, any civil remedy for such broadside defamation has been
lacking.
There have been numerous attempts by individual members
to seek redress in the courts for libel on these groups, but
very few have succeeded because it felt that the groups are
too large and poorly defined to support a finding that the
plaintiff was singled out for personal attack x x x x (citations
omitted).
Our conclusion therefore is that the statements published by petitioners
in the instant case did not specifically identify nor refer to any particular
individuals who were purportedly the subject of the alleged libelous
publication. Respondents can scarcely claim to having been singled
out for social censure pointedly resulting in damages.
A contrary view is expressed that what is involved in the present case
is an intentional tortious act causing mental distress and not an action
for libel. That opinion invokes Chaplinsky v. New Hampshire 22 where
the U.S. Supreme Court held that words heaping extreme profanity,
intended merely to incite hostility, hatred or violence, have no social
value and do not enjoy constitutional protection; and Beauharnais v.
Illinois23 where it was also ruled that hate speech which denigrates a
group of persons identified by their religion, race or ethnic origin
defames that group and the law may validly prohibit such speech on
the same ground as defamation of an individual.
We do not agree to the contrary view articulated in the immediately
preceding paragraph. Primarily, an "emotional distress" tort action is
personal in nature, i.e., it is a civil action filed by an individual24 to
assuage the injuries to his emotional tranquility due to personal attacks
on his character. It has no application in the instant case since no
particular individual was identified in the disputed article of Bulgar.
Also, the purported damage caused by the article, assuming there was
any, falls under the principle of relational harm — which includes harm
to social relationships in the community in the form of defamation; as
distinguished from the principle of reactive harm — which includes
injuries to individual emotional tranquility in the form of an infliction of
emotional distress. In their complaint, respondents clearly asserted an
alleged harm to the standing of Muslims in the community, especially
to their activities in propagating their faith in Metro Manila and in other
non-Muslim communities in the country. 25 It is thus beyond cavil that
the present case falls within the application of the relational harm
principle of tort actions for defamation, rather than the reactive harm
principle on which the concept of emotional distress properly belongs.
Moreover, under the Second Restatement of the Law, to recover for
the intentional infliction of emotional distress the plaintiff must show
that: (a) The conduct of the defendant was intentional or in reckless
disregard of the plaintiff; (b) The conduct was extreme and outrageous;
(c) There was a causal connection between the defendant's conduct
and the plaintiff's mental distress; and, (d) The plaintiff's mental
distress was extreme and severe.26
"Extreme and outrageous conduct" means conduct that is so
outrageous in character, and so extreme in degree, as to go beyond all
possible bounds of decency, and to be regarded as atrocious, and
utterly intolerable in civilized society. The defendant's actions must
have been so terrifying as naturally to humiliate, embarrass or frighten
the plaintiff.27 Generally, conduct will be found to be actionable where
the recitation of the facts to an average member of the community
would arouse his resentment against the actor, and lead him or her to
exclaim, "Outrageous!" as his or her reaction. 28
"Emotional distress" means any highly unpleasant mental reaction
such as extreme grief, shame, humiliation, embarrassment, anger,
disappointment, worry, nausea, mental suffering and anguish, shock,
fright, horror, and chagrin. 29 "Severe emotional distress," in some
jurisdictions, refers to any type of severe and disabling emotional or
mental condition which may be generally recognized and diagnosed by
professionals trained to do so, including posttraumatic stress disorder,
neurosis, psychosis, chronic depression, or phobia. 30 The plaintiff is
required to show, among other things, that he or she has suffered
emotional distress so severe that no reasonable person could be
expected to endure it; severity of the distress is an element of the
cause of action, not simply a matter of damages.31
Any party seeking recovery for mental anguish must prove more than
mere worry, anxiety, vexation, embarrassment, or anger. Liability does
not arise from mere insults, indignities, threats, annoyances, petty
expressions, or other trivialities. In determining whether the tort of
outrage had been committed, a plaintiff is necessarily expected and
required to be hardened to a certain amount of criticism, rough
language, and to occasional acts and words that are definitely
inconsiderate and unkind; the mere fact that the actor knows that the
other will regard the conduct as insulting, or will have his feelings hurt,
is not enough.32
Hustler Magazine v. Falwell33 illustrates the test case of a civil action
for damages on intentional infliction of emotional distress. A parody
appeared in Hustler magazine featuring the American fundamentalist
preacher and evangelist Reverend Jerry Falwell depicting him in an
inebriated state having an incestuous, sexual liaison with his mother in
an outhouse. Falwell sued Hustler and its publisher Larry Flynt for
damages. The United States District Court for the Western District of
Virginia ruled that the parody was not libelous, because no reasonable
reader would have understood it as a factual assertion that Falwell
engaged in the act described. The jury, however, awarded $200,000 in
damages on a separate count of "intentional infliction of emotional
distress," a cause of action that did not require a false statement of fact
to be made. The United States Supreme Court in a unanimous
decision overturned the jury verdict of the Virginia Court and held that
Reverend Falwell may not recover for intentional infliction of emotional
distress. It was argued that the material might be deemed outrageous
and may have been intended to cause severe emotional distress, but
these circumstances were not sufficient to overcome the free speech
rights guaranteed under the First Amendment of the United States
Constitution. Simply stated, an intentional tort causing emotional
distress must necessarily give way to the fundamental right to free
speech.
It must be observed that although Falwell was regarded by the U.S.
High Court as a "public figure," he was an individual particularly
singled out or identified in the parody appearing on Hustler magazine.
Also, the emotional distress allegedly suffered by Reverend Falwell
involved a reactive interest — an emotional response to the parody
which supposedly injured his psychological well-being.
Verily, our position is clear that the conduct of petitioners was not
extreme or outrageous. Neither was the emotional distress allegedly
suffered by respondents so severe that no reasonable person could be
expected to endure it. There is no evidence on record that points to
that result.
Professor William Prosser, views tort actions on intentional infliction of
emotional distress in this manner34 —
There is virtually unanimous agreement that such ordinary
defendants are not liable for mere insult, indignity,
annoyance, or even threats, where the case is lacking in
other circumstances of aggravation. The reasons are not far
to seek. Our manners, and with them our law, have not yet
progressed to the point where we are able to afford a
remedy in the form of tort damages for all intended mental
disturbance. Liability of course cannot be extended to every
trivial indignity x x x x The plaintiff must necessarily be
expected and required to be hardened to a certain amount of
rough language, and to acts that are definitely inconsiderate
and unkind x x x The plaintiff cannot recover merely because
of hurt feelings.
Professor Calvert Magruder reinforces Prosser with this succinct
observation, viz:35
There is no occasion for the law to intervene in every case
where someone's feelings are hurt. There must still be
freedom to express an unflattering opinion, and some safety
valve must be left through which irascible tempers may blow
off relatively harmless steam.
Thus, it is evident that even American courts are reluctant to adopt a
rule of recovery for emotional harm that would "open up a wide vista of
litigation in the field of bad manners," an area in which a "toughening of
the mental hide" was thought to be a more appropriate remedy. 36
Perhaps of greater concern were the questions of causation, proof, and
the ability to accurately assess damages for emotional harm, each of
which continues to concern courts today. 37
In this connection, the doctrines in Chaplinsky and Beauharnais had
largely been superseded by subsequent First Amendment doctrines.
Back in simpler times in the history of free expression the Supreme
Court appeared to espouse a theory, known as the Two-Class Theory,
that treated certain types of expression as taboo forms of speech,
beneath the dignity of the First Amendment. The most celebrated
statement of this view was expressed in Chaplinsky:
There are certain well-defined and narrowly limited classes
of speech, the prevention and punishment of which have
never been thought to raise any Constitutional problem.
These include the lewd and obscene, the profane, the
libelous, and the insulting or "fighting" words — those which
by their very utterance inflict injury or tend to incite an
immediate breach of the peace. It has been well observed
that such utterances are no essential part of any exposition
of ideas, and are of such slight social value as a step to truth
that any benefit that may be derived from them is clearly
outweighed by the social interest in order and morality.
Today, however, the theory is no longer viable; modern First
Amendment principles have passed it by. American courts no longer
accept the view that speech may be proscribed merely because it is
"lewd," "profane," "insulting" or otherwise vulgar or offensive. 38 Cohen
v. California39 is illustrative: Paul Robert Cohen wore a jacket bearing
the words "Fuck the Draft" in a Los Angeles courthouse in April 1968,
which caused his eventual arrest. Cohen was convicted for violating a
California statute prohibiting any person from "disturb[ing] the peace x
x x by offensive conduct." The U.S. Supreme Court conceded that
Cohen's expletive contained in his jacket was "vulgar," but it concluded
that his speech was nonetheless protected by the right to free speech.
It was neither considered an "incitement" to illegal action nor
"obscenity." It did not constitute insulting or "fighting" words for it had
not been directed at a person who was likely to retaliate or at someone
who could not avoid the message. In other words, no one was present
in the Los Angeles courthouse who would have regarded Cohen's
speech as a direct personal insult, nor was there any danger of
reactive violence against him.
No specific individual was targeted in the allegedly defamatory words
printed on Cohen's jacket. The conviction could only be justified by
California's desire to exercise the broad power in preserving the
cleanliness of discourse in the public sphere, which the U.S. Supreme
Court refused to grant to the State, holding that no objective
distinctions can be made between vulgar and nonvulgar speech, and
that the emotive elements of speech are just as essential in the
exercise of this right as the purely cognitive. As Mr. Justice Harlan so
eloquently wrote: "[O]ne man's vulgarity is another man's lyric x x x
words are often chosen as much for their emotive as their cognitive
force."40 With Cohen, the U.S. Supreme Court finally laid the
Constitutional foundation for judicial protection of provocative and
potentially offensive speech.
Similarly, libelous speech is no longer outside the First Amendment
protection. Only one small piece of the Two-Class Theory in
Chaplinsky survives — U.S. courts continue to treat "obscene" speech
as not within the protection of the First Amendment at all. With respect
to the "fighting words" doctrine, while it remains alive it was modified by
the current rigorous clear and present danger test. 41 Thus, in Cohen
the U.S. Supreme Court in applying the test held that there was no
showing that Cohen's jacket bearing the words "Fuck the Draft" had
threatened to provoke imminent violence; and that protecting the
sensibilities of onlookers was not sufficiently compelling interest to
restrain Cohen's speech.
Beauharnais, which closely followed the Chaplinsky doctrine, suffered
the same fate as Chaplinsky. Indeed, when Beauharnais was decided
in 1952, the Two-Class Theory was still flourishing. While concededly
the U.S. High Tribunal did not formally abandon Beauharnais, the
seminal shifts in U.S. constitutional jurisprudence substantially
undercut Beauharnais and seriously undermined what is left of its
vitality as a precedent. Among the cases that dealt a crushing impact
on Beauharnais and rendered it almost certainly a dead letter case law
are Brandenburg v. Ohio,42 and, again, Cohen v. California.43 These
decisions recognize a much narrower set of permissible grounds for
restricting speech than did Beauharnais.44
In Brandenburg, appellant who was a leader of the Ku Klux Klan was
convicted under the Ohio Criminal Syndicalism Statute for advocating
the necessity, duty and propriety of crime, sabotage, violence, or
unlawful methods of terrorism as a means of accomplishing industrial
or political reforms; and for voluntarily assembling with a group formed
to teach or advocate the doctrines of criminal syndicalism. Appellant
challenged the statute and was sustained by the U.S. Supreme Court,
holding that the advocacy of illegal action becomes punishable only if
such advocacy is directed to inciting or producing imminent lawless
action and is likely to incite or produce such action.45 Except in unusual
instances, Brandenburg protects the advocacy of lawlessness as long
as such speech is not translated into action.
The importance of the Brandenburg ruling cannot be overemphasized.
Prof. Smolla affirmed that "Brandenburg must be understood as
overruling Beauharnais and eliminating the possibility of treating group
libel under the same First Amendment standards as individual libel." 46 It
may well be considered as one of the lynchpins of the modern doctrine
of free speech, which seeks to give special protection to politically
relevant speech.
In any case, respondents' lack of cause of action cannot be cured by
the filing of a class suit. As correctly pointed out by Mr. Justice Jose C.
Vitug during the deliberations, "an element of a class suit is the
adequacy of representation. In determining the question of fair and
adequate representation of members of a class, the court must
consider (a) whether the interest of the named party is coextensive
with the interest of the other members of the class; (b) the proportion of
those made parties as it so bears to the total membership of the class;
and, (c) any other factor bearing on the ability of the named party to
speak for the rest of the class.47
The rules require that courts must make sure that the persons
intervening should be sufficiently numerous to fully protect the interests
of all concerned. In the present controversy, Islamic Da'wah Council of
the Philippines, Inc., seeks in effect to assert the interests not only of
the Muslims in the Philippines but of the whole Muslim world as well.
Private respondents obviously lack the sufficiency of numbers to
represent such a global group; neither have they been able to
demonstrate the identity of their interests with those they seek to
represent. Unless it can be shown that there can be a safe guaranty
that those absent will be adequately represented by those present, a
class suit, given its magnitude in this instance, would be unavailing." 48
Likewise on the matter of damages, we agree that "moral damages
may be recovered only if the plaintiff is able to satisfactorily prove the
existence of the factual basis for the damages and its causal
connection with the acts complained of, 49 and so it must be, as moral
damages although incapable of pecuniary estimation are designed not
to impose a penalty but to compensate for injury sustained and actual
damages suffered.50 Exemplary damages, on the other hand, may only
be awarded if claimant is able to establish his right to moral, temperate,
liquidated or compensatory damages. 51 Unfortunately, neither of the
requirements to sustain an award for either of these damages would
appear to have been adequately established by respondents."
In a pluralistic society like the Philippines where misinformation about
another individual's religion is as commonplace as self-appointed
critics of government, it would be more appropriate to respect the fair
criticism of religious principles, including those which may be
outrageously appalling, immensely erroneous, or those couched as
fairly informative comments. The greater danger in our society is the
possibility that it may encourage the frequency of suits among religious
fundamentalists, whether Christian, Muslim, Hindu, Buddhist, Jewish,
or others. This would unnecessarily make the civil courts a
battleground to assert their spiritual ideas, and advance their
respective religious agenda.
It need not be stressed that this Court has no power to determine
which is proper religious conduct or belief; neither does it have the
authority to rule on the merits of one religion over another, nor declare
which belief to uphold or cast asunder, for the validity of religious
beliefs or values are outside the sphere of the judiciary. Such matters
are better left for the religious authorities to address what is rightfully
within their doctrine and realm of influence. Courts must be viewpoint-
neutral when it comes to religious matters if only to affirm the neutrality
principle of free speech rights under modern jurisprudence where "[a]ll
ideas are treated equal in the eyes of the First Amendment — even
those ideas that are universally condemned and run counter to
constitutional principles."52 Under the right to free speech, "there is no
such thing as a false idea. However pernicious an opinion may seem,
we depend for its correction not on the conscience of judges and juries
but on the competition of other ideas." 53 Denying certiorari and
affirming the appellate court decision would surely create a chilling
effect on the constitutional guarantees of freedom of speech, of
expression, and of the press.
WHEREFORE, the petition is GRANTED. The assailed Decision of the
Court of Appeals dated 27 August 1998 is REVERSED and SET
ASIDE, and the Decision of the RTC-Br. 4, Manila, dismissing the
complaint for lack of merit, is REINSTATED and AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
MARIA BENITA A. DULAY, in her own behalf and in behalf of the
minor children KRIZTEEN ELIZABETH, BEVERLY MARIE and
NAPOLEON II, all surnamed DULAY, petitioners,
vs.
THE COURT OF APPEALS, Former Eighth Division, HON.
TEODORO P. REGINO, in his capacity as Presiding Judge of the
Regional Trial Court National Capital Region, Quezon City, Br. 84,
SAFEGUARD INVESTIGATION AND SECURITY CO., INC., and
SUPERGUARD SECURITY CORPORATION, respondents.
BIDIN, J.:
This petition for certiorari prays for the reversal of the decision of the
Court of Appeals dated October 29, 1991 in CA-G.R. CV No. 24646
which affirmed the order of the Regional Trial Court dismissing Civil
Case No. Q-89-1751, and its resolution dated November 17, 1991
denying herein, petitioner's motion for reconsideration.
The antecedent facts of the case are as follows:
On December 7, 1988, an altercation between Benigno Torzuela and
Atty. Napoleon Dulay occurred at the "Big Bang Sa Alabang," Alabang
Village, Muntinlupa as a result of which Benigno Torzuela, the security
guard on duty at the said carnival, shot and killed Atty. Napoleon
Dulay.
Herein petitioner Maria Benita A. Dulay, widow of the deceased
Napoleon Dulay, in her own behalf and in behalf of her minor children,
filed on February 8, 1989 an action for damages against Benigno
Torzuela and herein private respondents Safeguard Investigation and
Security Co., Inc., ("SAFEGUARD") and/or Superguard Security Corp.
("SUPERGUARD"), alleged employers of defendant Torzuela. The
complaint, docketed as Civil Case No. Q-89-1751 among others
alleges the following:
1. . . .
Defendants SAFEGUARD INVESTIGATION AND
SECURITY CO., INC., (Defendant Safeguard) and
SUPERGUARD SECURITY CORPORATION
(Defendant Superguard) are corporations duly
organized and existing in accordance with
Philippine laws, with offices at 10th Floor,
Manufacturers Building, Inc., Plaza Santa Cruz,
Manila. They are impleaded as alternative
defendants for, while the former appears to be the
employer of defendant BENIGNO TORZUELA
(defendant TORZUELA), the latter impliedly
acknowledged responsibility for the acts of
defendant TORZUELA by extending its
sympathies to plaintiffs.
Defendant BENIGNO TORZUELA is of legal age,
an employee of defendant SAFEGUARD and/or
 defendant SUPERGUARD and, at the time of the
incident complained of, was under their control
and supervision. . . .
3. On December 7, 1988 at around 8:00 a.m.,
defendant TORZUELA, while he was on duty as
security guard at the "Big Bang sa Alabang,"
Alabang Village, Muntinlupa, Metro Manila shot
and killed NAPOLEON V. DULAY with a .38
caliber revolver belonging to defendant
SAFEGUARD, and/or SUPERGUARD (per Police
Report dated January 7, 1989, copy attached as
Annex A);
4. The incident resulting in the death of
NAPOLEON V. DULAY was due to the concurring
negligence of the defendants. Defendant
TORZUELA'S wanton and reckless discharge of
the firearm issued to him by defendant
SAFEGUARD and/or SUPERGUARD was the
immediate and proximate cause of the injury, while
the negligence of defendant SAFEGUARD and/or
SUPERGUARD consists in its having failed to
exercise the diligence of a good father of a family
in the supervision and control of its employee to
avoid the injury.
xxx xxx xxx
(Rollo, pp. 117-118)
Petitioners prayed for actual, compensatory, moral and exemplary
damages, and attorney's fees. The said Civil Case No. Q-89-1751 was
raffled to Branch 84 of the Regional Trial Court of Quezon City,
presided by respondent Judge Teodoro Regino.
On March 2, 1989, private respondent SUPERGUARD filed a Motion to
Dismiss on the ground that the complaint does not state a valid cause
of action. SUPERGUARD claimed that Torzuela's act of shooting
Dulay was beyond the scope of his duties, and that since the alleged
act of shooting was committed with deliberate intent (dolo), the civil
liability therefor is governed by Article 100 of the Revised Penal Code,
which states:
Art. 100. Civil liability of a person guilty of a felony.
— Every person criminally liable for a felony is
also civilly liable.
Respondent SUPERGUARD further alleged that a complaint for
damages based on negligence under Article 2176 of the New Civil
Code, such as the one filed by petitioners, cannot lie, since the civil
liability under Article 2176 applies only to quasi-offenses under Article
365 of the Revised Penal Code. In addition, the private respondent
argued that petitioners' filing of the complaint is premature considering
that the conviction of Torzuela in a criminal case is a condition sine
qua non for the employer's subsidiary liability (Rollo, p. 55-59).
Respondent SAFEGUARD also filed a motion praying that it be
excluded as defendant on the ground that defendant Torzuela is not
one of its employees (Rollo, p. 96).
Petitioners opposed both motions, stating that their cause of action
against the private respondents is based on their liability under Article
2180 of the New Civil Code, which provides:
Art. 2180. The obligation imposed by Article 2176
is demandable not only for one's own acts or
omissions, but also for those of persons for whom
one is responsible.
xxx xxx xxx
Employers shall be liable for the damages caused
by their employees and household helpers acting
within the scope of their assigned tasks, even
though the former are not engaged in any
business or an industry.
xxx xxx xxx
(Emphasis supplied)
Petitioners contended that a suit against alternative defendants is
allowed under Rule 3, Section 13 of the Rules of Court. Therefore, the
inclusion of private respondents as alternative defendants in the
complaint is justified by the following: the Initial Investigation Report
prepared by Pat. Mario Tubon showing that Torzuela is an employee of
SAFEGUARD; and through overt acts, SUPERGUARD extended its
sympathies to petitioners (Rollo, pp. 64 and 98).
Meanwhile, an Information dated March 21, 1989 charging Benigno
Torzuela with homicide was filed before the Regional Trial Court of
Makati and was docketed as Criminal Case No. 89-1896.
On April 13, 1989, respondent Judge Regino issued an order granting
SUPERGUARD'S motion to dismiss and SAFEGUARD'S motion for
exclusion as defendant. The respondent judge held that the complaint
did not state facts necessary or sufficient to constitute a quasi-delict
since it does not mention any negligence on the part of Torzuela in
shooting Napoleon Dulay or that the same was done in the
performance of his duties. Respondent judge ruled that mere
allegations of the concurring negligence of the defendants (private
respondents herein) without stating the facts showing such negligence
are mere conclusions of law (Rollo, p. 106). Respondent judge also
declared that the complaint was one for damages founded on crimes
punishable under Articles 100 and 103 of the Revised Penal Code as
distinguished from those arising from, quasi-delict. The dispositive
portion of the order dated April 13, 1989 states:
WHEREFORE, this Court holds that in view of the
material and ultimate facts alleged in the verified
complaint and in accordance with the applicable
law on the matter as well as precedents laid down
by the Supreme Court, the complaint against the
alternative defendants Superguard Security
Corporation and Safeguard Investigation and
Security Co., Inc., must be and (sic) it is hereby
dismissed. (Rollo, p. 110)
The above order was affirmed by the respondent court and petitioners'
motion for reconsideration thereof was denied.
Petitioners take exception to the assailed decision and insist that
quasi-delicts are not limited to acts of negligence but also cover acts
that are intentional and voluntary, citing Andamo v. IAC (191 SCRA
195 [1990]). Thus, petitioners insist that Torzuela' s act of shooting
Napoleon Dulay constitutes a quasi-delict actionable under Article
2176 of the New Civil Code.
Petitioners further contend that under Article 2180 of the New Civil
Code, private respondents are primarily liable for their negligence
either in the selection or supervision of their employees. This liability is
independent of the employee's own liability for fault or negligence and
is distinct from the subsidiary civil liability under Article 103 of the
Revised Penal Code. The civil action against the employer may
therefore proceed independently of the criminal action pursuant to Rule
111 Section 3 of the Rules of Court. Petitioners submit that the
question of whether Torzuela is an employee of respondent
SUPERGUARD or SAFEGUARD would be better resolved after trial.
Moreover, petitioners argue that Torzuela's act of shooting Dulay is
also actionable under Article 33 of the New Civil Code, to wit:
Art. 33. In cases of defamation, fraud, and physical
injuries, a civil action for damages, entirely
separate and distinct from the criminal action, may
be brought by the injured party. Such civil action
shall proceed independently of the criminal
prosecution, and shall require only a
preponderance of evidence. (Emphasis supplied)
In the same vein, petitioners cite Section 3, Rule 111 of the Rules of
Court which provides:
Rule 111. . . . .
Sec. 3. When civil action may proceed
independently — In the cases provided for in
Articles 32, 33, 34 and 2176 of the Civil Code of
the Philippines, the independent civil action which
has been reserved may be brought by the
offended party, shall proceed independently of the
criminal action, and shall require only a
preponderance of evidence. (Emphasis supplied)
The term "physical injuries" under Article 33 has been held to include
consummated, frustrated and attempted homicide. Thus, petitioners
maintain that Torzuela's prior conviction is unnecessary since the civil
action can proceed independently of the criminal action. On the other
hand, it is the private respondents' argument that since the act was not
committed with negligence, the petitioners have no cause of action
under Articles 2116 and 2177 of the New Civil Code. The civil action
contemplated in Article 2177 is not applicable to acts committed with
deliberate intent, but only applies to quasi-offenses under Article 365 of
the Revised Penal Code. Torzuela's act of shooting Atty. Dulay to
death, aside from being purely personal, was done with deliberate
intent and could not have been part of his duties as security guard. And
since Article 2180 of the New Civil Code covers only: acts done within
the scope of the employee's assigned tasks, the private respondents
cannot be held liable for damages.
We find for petitioners.
It is undisputed that Benigno Torzuela is being prosecuted for homicide
for the fatal shooting of Napoleon Dulay. Rule 111 of the Rules on
Criminal Procedure provides:
 Sec. 1. Institution of criminal and civil actions.
When a criminal action is instituted, the civil action
for the recovery of civil liability is impliedly
instituted with the criminal action, unless the
offended party waives the civil action , reserves
his right to institute it separately or institutes the
civil action prior to the criminal action.
Such civil action includes recovery of indemnity
under the Revised Penal Code, and damages
under Articles 32, 33, 34, and 2176 of the Civil
Code of the Philippines arising from the same act
or omission of the accused. (Emphasis supplied)
It is well-settled that the filing of an independent civil action before the
prosecution in the criminal action presents evidence is even far better
than a compliance with the requirement of express reservation (Yakult
Philippines v. Court of Appeals, 190 SCRA 357 [1990]). This is
precisely what the petitioners opted to do in this case. However, the
private respondents opposed the civil action on the ground that the
same is founded on a delict and not on a quasi-delict as the shooting
was not attended by negligence. What is in dispute therefore is the
nature of the petitioner's cause of action.
The nature of a cause of action is determined by the facts alleged in
the complaint as constituting the cause of action (Republic v. Estenzo,
158 SCRA 282 [1988]). The purpose of an action or suit and the law to
govern it is to be determined not by the claim of the party filing the
action, made in his argument or brief, but rather by the complaint itself,
its allegations and prayer for relief. (De Tavera v. Philippine
Tuberculosis Society, 112 SCRA 243 [1982]). An examination of the
complaint in the present case would show that the plaintiffs, petitioners
herein, are invoking their right to recover damages against the private
respondents for their vicarious responsibility for the injury caused by
Benigno Torzuela's act of shooting and killing Napoleon Dulay, as
stated in paragraphs 1 and 2 of the complaint.
Article 2176 of the New Civil Code provides:
Art. 2176. 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.
Contrary to the theory of private respondents, there is no justification
for limiting the scope of Article 2176 of the Civil Code to acts or
omissions resulting from negligence. Well-entrenched is the doctrine
that article 2176 covers not only acts committed with negligence, but
also acts which are voluntary and intentional. As far back as the
definitive case of Elcano v. Hill (77 SCRA 98 [1977]), this Court already
held that:
. . . Article 2176, where it refers to "fault or
negligence," covers not only acts "not punishable
by law" but also acts criminal in character; whether
intentional and voluntary or negligent.
Consequently, a separate civil action against the
offender in a criminal act, whether or not he is
criminally prosecuted and found guilty or
acquitted, provided that the offended party is not
allowed, if he is actually charged also criminally, to
recover damages on both scores, and would be
entitled in such eventuality only to the bigger
award of the two, assuming the awards made in
the two cases vary. In other words, the extinction
of civil liability referred to in Par. (e) of Section 3,
Rule 111, refers exclusively to civil liability founded
on Article 100 of the Revised Penal Code,
whereas the civil liability for the same act
considered as quasi-delict only and not as a crime
is not extinguished even by a declaration in the
criminal case that the criminal act charged has not
happened or has not been committed by the
accused. Briefly stated, We here hold, in
reiteration of Garcia, that culpa aquiliana includes
voluntary and negligent acts which may be
punishable by law. (Emphasis supplied)
The same doctrine was echoed in the case of Andamo v. Intermediate
Appellate Court (191 SCRA 195 [1990]), wherein the Court held:
Article 2176, whenever it refers to "fault or
negligence," covers not only acts criminal in
character, whether intentional and voluntary or
negligent. Consequently, a civil action lies against
the offender in a criminal act, whether or not he is
prosecuted or found guilty or acquitted, provided
that the offended party is not allowed, (if the
tortfeasor is actually also charged criminally), to
recover damages on both scores, and would be
entitled in such eventuality only to the bigger
award of the two, assuming the awards made in
the two cases vary. [citing Virata v. Ochoa, 81
SCRA 472] (Emphasis supplied)
Private respondents submit that the word "intentional" in the Andamo
case is inaccurate obiter, and should be read as "voluntary" since
intent cannot be coupled with negligence as defined by Article 365 of
the Revised Penal Code. In the absence of more substantial reasons,
this Court will not disturb the above doctrine on the coverage of Article
2176.
Private respondents further aver that Article 33 of the New Civil Code
applies only to injuries intentionally committed pursuant to the ruling in
Marcia v. CA (120 SCRA 193 [1983]), and that the actions for damages
allowed thereunder are ex-delicto. However, the term "physical
injuries" in Article 33 has already been construed to include bodily
injuries causing death (Capuno v. Pepsi-Cola Bottling Co. of the
Philippines, 121 Phil. 638 [1965); Carandang v. Santiago, 97 Phil. 94
[1955]). It is not the crime of physical injuries defined in the Revised
Penal Code. It includes not only physical injuries but also
consummated, frustrated, and attempted homicide (Madeja v. Caro,
126 SCRA 293 [1983]). Although in the Marcia case (supra), it was
held that no independent civil action may be filed under Article 33
where the crime is the result of criminal negligence, it must be noted
however, that Torzuela, the accused in the case at bar, is charged with
homicide, not with reckless imprudence, whereas the defendant in
Marcia was charged with reckless imprudence. Therefore, in this case,
a civil action based on Article 33 lies.
Private respondents also contend that their liability is subsidiary under
the Revised Penal Code; and that they are not liable for Torzuela's act
which is beyond the scope of his duties as a security guard. It having
been established that the instant action is not ex-delicto, petitioners
may proceed directly against Torzuela and the private respondents.
Under Article 2180 of the New Civil Code as aforequoted, when an
injury is caused by the negligence of the employee, there instantly
arises a presumption of law that there was negligence on the part of
the master or employer either in the selection of the servant or
employee, or in supervision over him after selection or both (Layugan
v. Intermediate Appellate Court, 167 SCRA 363 [1988]). The liability of
the employer under Article 2180 is direct and immediate; it is not
conditioned upon prior recourse against the negligent employee and a
prior showing of the insolvency of such employee (Kapalaran Bus
Lines v. Coronado, 176 SCRA 792 [1989]). Therefore, it is incumbent
upon the private respondents to prove that they exercised the diligence
of a good father of a family in the selection and supervision of their
employee.
Since Article 2176 covers not only acts of negligence but also acts
which are intentional and voluntary, it was therefore erroneous on the
part of the trial court to dismiss petitioner's complaint simply because it
failed to make allegations of attendant negligence attributable to
private respondents.
With respect to the issue of whether the complaint at hand states a
sufficient cause of action, the general rule is that the allegations in a
complaint are sufficient to constitute a cause of action against the
defendants if, admitting the facts alleged, the court can render a valid
judgment upon the same in accordance with the prayer therein. A
cause of action exist if the following elements are present, namely: (1)
a right in favor of the plaintiff by whatever means and under whatever
law it arises or is created; (2) an obligation on the part of the named
defendant to respect or not to violate such right; and (3) an act or
omission on the part of such defendant violative of the right of the
plaintiff or constituting a breach of the obligation of the defendant to the
plaintiff for which the latter may maintain an action for recovery of
damages (Del Bros Hotel Corporation v. CA, 210 SCRA 33 [1992]);
Development Bank of the Philippines v. Pundogar, 218 SCRA 118
[1993])
This Court finds, under the foregoing premises, that the complaint
sufficiently alleged an actionable breach on the part of the defendant
Torzuela and respondents SUPERGUARD and/or SAFEGUARD. It is
enough that the complaint alleged that Benigno Torzuela shot
Napoleon Dulay resulting in the latter's death; that the shooting
occurred while Torzuela was on duty; and that either SUPERGUARD
and/or SAFEGUARD was Torzuela's employer and responsible for his
acts. This does not operate however, to establish that the defendants
below are liable. Whether or not the shooting was actually reckless and
wanton or attended by negligence and whether it was actually done
within the scope of Torzuela's duties; whether the private respondents
SUPERGUARD and/or SAFEGUARD failed to exercise the diligence of
a good father of a family; and whether the defendants are actually
liable, are questions which can be better resolved after trial on the
merits where each party can present evidence to prove their respective
allegations and defenses. In determining whether the allegations of a
complaint are sufficient to support a cause of action, it must be borne
in mind that the complaint does not have to establish or allege the facts
proving the existence of a cause of action at the outset; this will have to
be done at the trial on the merits of the case (Del Bros Hotel
Corporation v. CA, supra). If the allegations in a complaint can furnish
a sufficient basis by which the complaint can be maintained, the same
should not be dismissed regardless of the defenses that may be
assessed by the defendants (Rava Dev't. Corp. v. CA, 211 SCRA 152
[1992] citing Consolidated Bank & Trust Corporation v. Court of
Appeals, 197 SCRA 663 [1991]). To sustain a motion to dismiss for
lack of cause of action, the complaint must show that the claim for
relief does not exist rather than that a claim has been defectively
stated, is ambiguous, indefinite or uncertain (Azur v. Provincial Board,
27 SCRA 50 [1969]). Since the petitioners clearly sustained an injury to
their rights under the law, it would be more just to allow them to
present evidence of such injury.
WHEREFORE, premises considered, the petition for review is hereby
GRANTED. The decision of the Court of Appeals as well as the Order
of the Regional Trial Court dated April 13, 1989 are hereby
REVERSED and SET ASIDE. Civil Case No. Q-89-1751 is remanded
to the Regional Trial Court for trial on the merits. This decision is
immediately executory.
SO ORDERED.
ARTURO BORJAL a.k.a. ART BORJAL and MAXIMO SOLIVEN,
petitioners,
vs.
COURT OF APPEALS and FRANCISCO WENCESLAO,
respondents.
BELLOSILLO, J.:
PERPETUALLY HAGRIDDEN as the public is about losing one of the
most basic yet oft hotly contested freedoms of man, the issue of the
right of free expression be stirs and presents itself time and again, in
cyclic occurrence, to inveigle, nay, challenge the courts to re-survey its
ever shifting terrain, explore and furrow its heretofore uncharted moors
and valleys and finally redefine the metes and bounds of its
controversial domain. This, prominently, is one such case.
Perhaps, never in jurisprudential history has any freedom of man
undergone radical doctrinal metamorphoses than his right to freely and
openly express his views. Blackstone's pontifical comment that "where
blasphemous, immoral, treasonable, schismatical, seditious, or
scandalous libels are punished by English law ... the liberty of the
press, properly understood, is by no means infringed or violated,"
found kindred expression in the landmark opinion of England's Star
Chamber in the Libelis Famosis case in 1603. 1 That case established
two major propositions in the prosecution of defamatory remarks: first,
that libel against a public person is a greater offense than one directed
against an ordinary man, and second, that it is immaterial that the libel
be true.
Until republicanism caught fire in early America, the view from the top
on libel was no less dismal. Even the venerable Justice Holmes
appeared to waffle as he swayed from the concept of criminal libel
liability under the clear and present danger rule, to the other end of the
spectrum in defense of the constitutionally protected status of
unpopular opinion in free society.
Viewed in modern times and the current revolution in information and
communication technology, libel principles formulated at one time or
another have waxed and waned through the years in the constant ebb
and flow of judicial review. At the very least, these principles have lost
much of their flavor, drowned and swamped as they have been by the
ceaseless cacophony and din of thought and discourse emanating
from just about every source and direction, aided no less by an
increasingly powerful and irrepressible mass media. Public discourse,
laments Knight, has been devalued by its utter commonality; and we
agree, for its logical effect is to benumb thought and sensibility on what
may be considered as criminal illegitimate encroachments on the right
of persons to enjoy a good, honorable and reputable name. This may
explain the imperceptible demise of criminal prosecutions for libel and
the trend to rely instead on indemnity suits to repair any damage on
one's reputation.
In this petition for review, we are asked to reverse the Court of Appeals
in "Francisco Wenceslao v. Arturo Borjal and Maximo Soliven," CA-
G.R. No. 40496, holding on 25 March 1996 that petitioners Arturo
Borjal and Maximo Soliven are solidarily liable for damages for writing
and publishing certain articles claimed to be derogatory and offensive
to private respondent Francisco Wenceslao.
Petitioners Arturo Borjal and Maximo Soliven are among the
incorporators of Philippines Today, Inc. (PTI), now PhilSTAR Daily,
Inc., owner of The Philippine Star, a daily newspaper. At the time the
complaint was filed, petitioner Borjal was its President while Soliven
was (and still is) Publisher and Chairman of its Editorial Board. Among
the regular writers of The Philippine Star is Borjal who runs the column
Jaywalker.
Private respondent Francisco Wenceslao, on the other hand, is a civil
engineer, businessman, business consultant and journalist by
profession. In 1988 he served as a technical adviser of Congressman
Fabian Sison, then Chairman of the House of Representatives Sub-
Committee on Industrial Policy.
During the congressional hearings on the transport crisis sometime in
September 1988 undertaken by the House Sub-Committee on
Industrial Policy, those who attended agreed to organize the First
National Conference on Land Transportation (FNCLT) to be
participated in by the private sector in the transport industry and
government agencies concerned in order to find ways and means to
solve the transportation crisis. More importantly, the objective of the
FNCLT was to draft an omnibus bill that would embody a long-term
land transportation policy for presentation to Congress. The conference
which, according to private respondent, was estimated to cost around
P1,815,000.00 would be funded through solicitations from various
sponsors such as government agencies, private organizations,
transport firms, and individual delegates or participants.2
On 28 February 1989, at the organizational meeting of the FNCLT,
private respondent Francisco Wenceslao was elected Executive
Director. As such, he wrote numerous solicitation letters to the
business community for the support of the conference.
Between May and July 1989 a series of articles written by petitioner
Borjal was published on different dates in his column Jaywalker. The
articles dealt with the alleged anomalous activities of an "organizer of a
conference" without naming or identifying private respondent. Neither
did it refer to the FNCLT as the conference therein mentioned. Quoted
hereunder are excerpts from the articles of petitioner together with the
dates they were published. 3
31 May 1989
Another self-proclaimed "hero" of the EDSA
Revolution goes around organizing "seminars and
conferences" for a huge fee. This is a simple ploy
coated in jazzy letterheads and slick prose. The
"hero" has the gall to solicit fees from anybody
with bucks to spare. Recently, in his usual
straightforward style, Transportation Secretary
Rainerio "Ray" Reyes, asked that his name, be
stricken off from the letterheads the "hero" has
been using to implement one of his pet "seminars."
Reyes said: "I would like to reiterate my request
that you delete my name." Note that Ray Reyes is
an honest man who would confront anybody
eyeball to eyeball without blinking.
9 June 1989
Another questionable portion of the so-called
conference is its unauthorized use of the names of
President Aquino and Secretary Ray Reyes. The
conference program being circulated claims that
President Aquino and Reyes will be main speakers
in the conference. Yet, the word is that Cory and
Reyes have not accepted the invitation to appear
in this confab. Ray Reyes even says that the
conference should be unmasked as a
moneymaking gimmick.
19 June 1989
. . . some 3,000 fund solicitation letters were sent
by the organizer to every Tom, Dick and Harry and
to almost all government agencies. And the
letterheads carried the names of Reyes and
Periquet. Agrarian Reform Secretary on leave
Philip Juico received one, but he decided to find
out front Reyes himself what the project was all
about. Ray Reyes, in effect, advised Juico to put
the fund solicitation letter in the waste basket.
Now, if the 3,000 persons and agencies
approached by the organizer shelled out 1,000
each, that's easily P3 million to a project that
seems so unsophisticated. But note that one
garment company gave P100,000, after which the
Garments Regulatory Board headed by Trade and
Industry Undersecretary Gloria Macapagal-Arroyo
was approached by the organizer to expedite the
garment license application of the P100,000
donor.
21 June 1989
A "conference organizer" associated with shady
deals seems to have a lot of trash tucked inside
his closet. The Jaywalker continues to receive
information about the man's dubious deals. His
notoriety, in according to reliable sources, has
reached the Premier Guest House where his name
is spoken like dung.
x x x           x x x          x x x
The first information says that the "organizer" tried
to mulct half a million pesos from a garment
producer and exporter who was being investigated
for violation of the rules of the Garments, Textile,
Embroidery and Apparel Board. The "organizer"
told the garment exporter that the case could be
fixed for a sum of P500,000.00. The organizer got
the shock of his life when the exporter told him: "If
I have that amount. I will hire the best lawyers, not
you." The organizer left in a huff, his thick face
very pale.
x x x           x x x          x x x
Friends in government and the private sector have
promised the Jaywalker more "dope" on the
"organizer." It seems that he was not only
indiscreet; he even failed to cover his tracks. You
will be hearing more of the "organizer's" exploits
from this corner soon.
22 June 1989
The scheming "organizer" we have been writing
about seems to have been spreading his wings too
far. A congressional source has informed the
Jaywalker that the schemer once worked for a
congressman from the North as some sort of a
consultant on economic affairs. The first thing the
"organizer" did was to initiate hearings and round-
the-table discussions with people from the
business, export and — his favorite — the
garments sector.
x x x           x x x          x x x
The "organizer's" principal gamely went along,
thinking that his "consultant" had nothing but the
good of these sectors in mind. It was only later that
he realized that the "consultant" was acting with a
burst of energy "in aid of extortion." The
"consultant" was fired.
x x x           x x x          x x x
There seems to be no end to what a man could do
to pursue his dubious ways. He has tried to
operate under a guise of a well-meaning,
reformist. He has intellectual pretensions — and
sometimes he succeeds in getting his thoughts in
the inside pages of some newspapers, with the aid
of some naive newspaper people. He has been
turning out a lot of funny-looking advice on
investments, export growth, and the like.
x x x           x x x          x x x
A cabinet secretary has one big wish. He is hoping
for a broad power to ban crooks and influence-
peddlers from entering the premises of his
department. But the Cabinet man might not get his
wish. There is one "organizer" who, even if
physically banned, call still concoct ways of doing
his thing. Without a tinge of remorse, the
"organizer" could fill up his letterheads with,
names of Cabinet members, congressmen, and
reputable people from the private sector to shore
up his shady reputation and cover up his notoriety.
3 July 1989
A supposed conference on transportation was a
big failure. The attendance was very poor and the
few who participated in, the affair were mostly
leaders of jeepney drivers' groups. None of the
government officials involved in regulating public
transportation was there. The big names in the
industry also did not participate. With such a poor
attendance, one wonders why the conference
organizers went ahead with the affair and tried so
hard to convince 3,000 companies and individuals
to contribute to the affair.
x x x           x x x          x x x
The conference was doomed from the start. It was
bound to fail. The personalities who count in the
field of transpiration refused to attend the affair or
withdrew their support after finding out the
background of the organizer of the conference.
How could a conference on transportation succeed
without the participation of the big names in the
industry and government policy-makers?
Private respondent reacted to the articles. He sent a letter to The
Philippine Star insisting that he was the "organizer" alluded to in
petitioner Borjal's columns.4 In a subsequent letter to The Philippine
Star, private respondent refuted the matters contained in petitioner
Borjal's columns and openly challenged him in this manner —
To test if Borjal has the guts to back up his holier
than thou attitude, I am prepared to relinquish this
position in case it is found that I have
misappropriated even one peso of FNCLT money.
On the other hand, if I can prove that Borjal has
used his column as a "hammer" to get clients for
his PR Firm, AA Borjal Associates, he should
resign from the STAR and never again write a
column. Is it a deal?5
Thereafter, private respondent filed a complaint with the National Press
Club (NPC) against petitioner Borjal for unethical conduct. He accused
petitioner Borjal of using his column as a form of leverage to obtain
contracts for his public relations firm, AA Borjal Associates.6 In turn,
petitioner Borjal published a rejoinder to the challenge of private
respondent not only to protect his name and honor but also to refute
the claim that he was using his column for character assassination. 7
Apparently not satisfied with his complaint with the NPC, private
respondent filed a criminal case for libel against petitioners Borjal and
Soliven, among others. However, in a Resolution dated 7 August 1990,
the Assistant Prosecutor handling the case dismissed the complaint for
insufficiency of evidence. The dismissal was sustained by the
Department of Justice and later by the Office of the President.
On 31 October 1990 private respondent instituted against petitioners a
civil action for damages based on libel subject of the instant case.8 In
their answer, petitioners interposed compulsory counterclaims for
actual, moral and exemplary damages, plus attorney's fees and costs.
After due consideration, the trial court decided in favor of private
respondent Wenceslao and ordered petitioners Borjal and Soliven to
indemnify private respondent P1,000,000.00 for actual and
compensatory damages, in addition to P200,000.00 for moral
damages, P100,000.00 for exemplary damages, P200,000.00 for
attorney's fees, and to pay the costs of suit.
The Court of Appeals affirmed the decision of the court a quo but
reduced the amount of the monetary award to P110,000.00 actual
damages, P200,000.00 moral damages and P75,000.00 attorney's
fees plus costs. In a 20-page Decision promulgated 25 March 1996,
the appellate court ruled inter alia that private respondent was
sufficiently identifiable, although not named, in the questioned articles;
that private respondent was in fact defamed by petitioner Borjal by
describing him variously as a "self-proclaimed hero," "a conference
organizer associated with shady deals who has a lot of trash tucked
inside his closet," "thick face," and "a person with dubious ways;" that
petitioner's claim of privilege communication was unavailing since the
privileged character of the articles was lost by their publication in a
newspaper of general circulation; that petitioner could have performed
his officer as a newspaperman without necessarily transgressing the
rights of Wenceslao by calling the attention of the government offices
concerned to examine the authority by which Wenceslao acted,
warning the public against contributing to a conference that, according
to his perception, lacked the univocal indorsement of the responsible
government officials, or simply informing the public of the letters
Wenceslao wrote and the favors he requested or demanded; and, that
when he imputed dishonesty, falsehood and misrepresentation,
shamelessness and intellectual pretentions to Wenceslao, petitioner
Borjal crossed the thin but clear line that separated fair comment from
actionable defamation.
Private respondent manifested his desire to appeal that portion of the
appellate court's decision which reduced the amount of damages
awarded him by filing with this Court a Petition for Extension of Time to
File Petition and a Motion for Suspension of Time to File Petition.9
However, in a Resolution dated 27 May 1996, the Second Division
denied both motions: the first, for being premature, and the second, for
being a wrong remedy.
On 20 November 1996 when the First Division consolidated and
transferred the present case to the Second Division, there was no
longer any case thereat with which to consolidate this case since G.R.
No. 124396 had already been disposed of by the Second Division
almost six (6) months earlier.
On their part, petitioners filed a motion for reconsideration but the
Court of Appeals denied the motion in its Resolution of 12 September
1996. Hence the instant petition for review. The petitioners contend
that the Court of Appeals erred: (a) in ruling that private respondent
Wenceslao was sufficiently identified by petitioner Borjal in the
questioned articles; (b) in refusing to accord serious consideration to
the findings of the Department of Justice and the Office of the
President that private respondent Wenceslao was not sufficiently
identified in the questioned articles, this notwithstanding that the
degree of proof required in a preliminary investigation is merely prima
facie evidence which is significantly less than the preponderance of
evidence required in civil cases; (c) in ruling that the subject articles do
not constitute qualifiedly privileged communication; (d) in refusing to
apply the "public official doctrine" laid down in New York Times v.
Sullivan; (e) in ruling that the questioned articles lost their privileged
character because of their publication in a newspaper of general
circulation; (f) in ruling that private respondent has a valid cause of
action for libel against petitioners although he failed to prove actual
malice on their part, and that the prosecutors of the City of Manila, the
Department of Justice, and eventually, the Office of the President, had
already resolved that there was no sufficient evidence to prove the
existence of libel; and, (g) assuming arguendo that Borjal should be
held liable, in adjudging petitioner Soliven solidarily liable with him.
Thus, petitioners pray for the reversal of the appellate court's ruling,
the dismissal of the complaint against them for lack of merit, and the
award of damages on their counterclaim.
The petition is impressed with merit. In order to maintain a libel suit, it
is essential that the victim be identifiable although it is not necessary
that he be named. It is also not sufficient that the offended party
recognized himself as the person attacked or defamed, but it must be
shown that at least a third person could identify him as the object of the
libelous publication.10 Regrettably, these requisites have not been
complied with in the case at bar.
In ruling for private respondent, the Court of Appeals found that Borjal's
column writings sufficiently identified Wenceslao as the "conference
organizer." It cited the First National Conference on Land
Transportation, the letterheads used listing different telephone
numbers, the donation of P100,000.00 from Juliano Lim and the
reference to the '"organizer of the conference" — the very same
appellation employed in all the column items — as having sufficiently
established the identity of private respondent Wenceslao for those who
knew about the FNCLT who were present at its inception, and who had
pledged their assistance to it.
We hold otherwise. These conclusions are at variance with the
evidence at hand. The questioned articles written by Borjal do not
identify private respondent Wenceslao as the organizer of the
conference. The first of the Jaywalker articles which appeared in the 31
May 1989 issue of The Philippine Star yielded nothing to indicate that
private respondent was the person referred to therein. Surely, as
observed by petitioners, there were millions of "heroes" of the EDSA
Revolution and anyone of them could be "self-proclaimed" or an
"organizer of seminars and conferences." As a matter of fact, in his 9
June 1989 column petitioner Borjal wrote about the "so-called First
National Conference on Land Transportation whose principal
organizers are not specified" (emphasis supplied). 11 Neither did the
FNCLT letterheads12 disclose the identity of the conference organizer
since these contained only an enumeration of names where private
respondent Francisco Wenceslao was described as Executive Director
and Spokesman and not as a conference organizer. 13 The printout 14
and tentative program 15 of the conference were devoid of any
indication of Wenceslao as organizer. The printout which contained an
article entitled "Who Organized the NCLT?" did not even mention
private respondent's name, while the tentative program only
denominated private respondent as "Vice Chairman and Executive
Director," and not as organizer.
No less than private respondent himself admitted that the FNCLT had
several organizers and that he was only a part of the organization, thus
—
I would like to clarify for the record that I was only
a part of the organization. I was invited then
because I was the head of the technical panel of
the House of Representatives Sub-Committee on
Industrial Policy that took care of congressional
hearings.16
Significantly, private respondent himself entertained doubt that he was
the person spoken of in Borjal's columns. The former even called up
columnist Borjal to inquire if he (Wenceslao) was the one referred to in
the subject articles. 17 His letter to the editor published in the 4 June
1989 issue of The Philippine Star even showed private respondent
Wenceslao's uncertainty —
Although he used a subterfuge, I was almost
certain that Art Borjal referred to the First National
Conference on Land Transportation (June 29-30)
and me in the second paragraph of his May 31
column . . . 18
Identification is grossly inadequate when even the alleged offended
party is himself unsure that he was the object of the verbal attack. It is
well to note that the revelation of the identity of the person alluded to
came not from petitioner Borjal but from private respondent himself;
when he supplied the information through his 4 June 1989 letter to the
editor. Had private respondent not revealed that he was the "organizer"
of the FNCLT referred to in the Borjal articles, the public would have
remained in blissful ignorance of his identity. It is therefore clear that on
the element of identifiability alone the case falls.
The above disquisitions notwithstanding, and on the assumption
arguendo that private respondent has been sufficiently identified as the
subject of Borjal's disputed comments, we now proceed to resolve the
other issues and pass upon the pertinent findings of the courts a quo.
The third, fourth, fifth and sixth assigned errors all revolve around the
primary question of whether the disputed articles constitute privileged
communications as to exempt the author from liability.
The trial court ruled that petitioner Borjal cannot hide behind the
proposition that his articles are privileged in character under the
provisions of Art. 354 of The Revised Penal Code which state —
Art. 354. Requirement for publicity. — Every
defamatory imputation is presumed to be
malicious, even if it be true, if no good intention
and justifiable motive for making it is shown,
except in the following cases:
1) A private communication made by any person
to another in the performance of any legal, moral
or social duty; and,
2) A fair and true report, made in good faith,
without any comments or remarks, of any judicial
or other official proceedings which are not of
confidential nature, or of any statement, report or
speech delivered in said proceedings, or of any
other act performed by public officers in the
exercise of their functions.
Respondent court explained that the writings in question did not fall
under any of the exceptions described in the above-quoted article
since these were neither "private communications" nor "fair and true
report . . . without any comments or remarks." But this is incorrect.
A privileged communication may be either absolutely privileged or
qualifiedly privileged. Absolutely privileged communications are those
which are not actionable even if the author has acted in bad faith. An
example is found in Sec. 11, Art.VI, of the 1987 Constitution which
exempts a member of Congress from liability for any speech or debate
in the Congress or in any Committee thereof. Upon the other hand,
qualifiedly privileged communications containing defamatory
imputations are not actionable unless found to have been made
without good intention justifiable motive. To this genre belong "private
communications" and "fair and true report without any comments or
remarks."
Indisputably, petitioner Borjal's questioned writings are not within the
exceptions of Art. 354 of The Revised Penal Code for, as correctly
observed by the appellate court, they are neither private
communications nor fair and true report without any comments or
remarks. However this does not necessarily mean that they are not
privileged. To be sure, the enumeration under Art. 354 is not an
exclusive list of qualifiedly privileged communications since fair
commentaries on matters of public interest are likewise privileged. The
rule on privileged communications had its genesis not in the nation's
penal code but in the Bill of Rights of the Constitution guaranteeing
freedom of speech and of the press. 19 As early as 1918, in United
States v. Cañete,20 this Court ruled that publications which are
privileged for reasons of public policy are protected by the
constitutional guaranty of freedom of speech. This constitutional right
cannot be abolished by the mere failure of the legislature to give it
express recognition in the statute punishing libels.
The concept of privileged communications is implicit in the freedom of
the press. As held in Elizalde v. Gutierrez21 and reiterated in Santos v.
Court of Appeals22 —
To be more specific, no culpability could be
imputed to petitioners for the alleged offending
publication without doing violence to the concept
of privileged communications implicit in the
freedom of the press. As was so well put by
Justice Malcolm in Bustos: "Public policy, the
welfare of society, and the orderly administration
of government have demanded protection of public
opinion. The inevitable and incontestable result
has been the development and adoption of the
doctrine of privilege."
The doctrine formulated in these two (2) cases resonates the rule that
privileged communications must, sui generis, be protective of public
opinion. This closely adheres to the democratic theory of free speech
as essential to collective self-determination and eschews the strictly
libertarian view that it is protective solely of self-expression which, in
the words of Yale Sterling Professor Owen Fiss,23 makes its appeal to
the individualistic ethos that so dominates our popular and political
culture. It is therefore clear that the restrictive interpretation vested by
the Court of Appeals on the penal provision exempting from liability
only private communications and fair and true report without comments
or remarks defeats, rather than promotes, the objective of the rule on
privileged communications, sadly contriving as it does, to suppress the
healthy effloresence of public debate and opinion as shining linchpins
of truly democratic societies.
To reiterate, fair commentaries on matters of public interest are
privileged and constitute a valid defense in an action for libel or
slander. The doctrine of fair comment means that while in general
every discreditable imputation publicly made is deemed false, because
every man is presumed innocent until his guilt is judicially proved, and
every false imputation is deemed malicious, nevertheless, when the
discreditable imputation is directed against a public person in his public
capacity, it is not necessarily actionable. In order that such
discreditable imputation to a public official may be actionable, it must
either be a false allegation of fact or a comment based on a false
supposition. If the comment is an expression of opinion, based on
established facts, then it is immaterial that the opinion happens to be
mistaken, as long as it might reasonably be inferred from the facts.21
There is no denying that the questioned articles dealt with matters of
public interest. In his testimony, private respondent spelled out the
objectives of the conference thus —
. . . The principal conference objective is to come
up with a draft of an Omnibus Bill that will embody
a long term land transportation policy for
presentation to Congress in its next regular
session in July. Since last January, the National
Conference on Land Transportation (NCLT), the
conference secretariat, has been enlisting support
from all sectors to ensure the success of the
project.25
Private respondent likewise testified that the FNCLT was raising funds
through solicitation from the public -
Q: Now, in this first letter, you
have attached a budget and it
says here that in this seminar
of the First National
Conference on Land
Transportation, you will need
around One million eight
hundred fifteen thousand
pesos, is that right?
A: That was the budget
estimate, sir.
Q: How do you intend as
executive officer, to raise this
fund of your seminar?
A: Well, from sponsors such
as government agencies and
private sectors or
organizations as well as
individual transport firms and
from individual
delegates/participants.26
The declared objective of the conference, the composition of its
members and participants, and the manner by which it was intended to
be funded no doubt lend to its activities as being genuinely imbued with
public interest. An organization such as the FNCLT aiming to reinvent
and reshape the transportation laws of the country and seeking to
source its funds for the project from the public at large cannot
dissociate itself from the public character of its mission. As such, it
cannot but invite close scrutiny by the media obliged to inform the
public of the legitimacy of the purpose of the activity and of the
qualifications and integrity of the personalities behind it.
This in effect is the strong message in New York Times v. Sullivan27
which the appellate court failed to consider or, for that matter, to heed.
It insisted that private respondent was not, properly speaking, a "public
official" nor a "public figure," which is why the defamatory imputations
against him had nothing to do with his task of organizing the FNCLT.
New York Times v. Sullivan was decided by the U. S. Supreme Court
in the 1960s at the height of the bloody rioting in the American South
over racial segregation. The then City Commissioner L. B. Sullivan of
Montgomery, Alabama, sued New York Times for publishing a paid
political advertisement espousing racial equality and describing police
atrocities committed against students inside a college campus. As
commissioner having charge over police actions Sullivan felt that he
was sufficiently identified in the ad as the perpetrator of the outrage;
consequently, he sued New York Times on the basis of what he
believed were libelous utterances against him.
The U. S. Supreme Court speaking through Mr. Justice William J.
Brennan Jr. ruled against Sullivan holding that honest criticisms on the
conduct of public officials and public figures are insulated from libel
judgments. The guarantees of freedom of speech and press prohibit a
public official or public figure from recovering damages for a
defamatory falsehood relating to his official conduct unless he proves
that the statement was made with actual malice, i.e., with knowledge
that it was false or with reckless disregard of whether it was false or
not.
The raison d' être for the New York Times doctrine was that to require
critics of official conduct to guarantee the truth of all their factual
assertions on pain of libel judgments would lead to self-censorship,
since would be critics would be deterred from, voicing out their
criticisms even if such were believed to be true, or were in fact true,
because of doubt whether it could be proved or because of fear of the
expense of having to prove it. 28
In the present case, we deem private respondent a public figure within
the purview of the New York Times ruling. At any rate, we have also
defined "public figure" in Ayers Production Pty., Ltd. v. Capulong29 as
—
. . . . a person who, by his accomplishments, fame,
mode of living, or by adopting a profession or
calling which gives the public a legitimate interest
in his doings, his affairs and his character, has
become a "public personage." He is, in other
words, a celebrity. Obviously to be included in this
category are those who have achieved some
degree of reputation by appearing before the
public, as in the case of an actor, a professional
baseball player, a pugilist, or any other entertainer.
The list is, however, broader than this. It includes
public officers, famous inventors and explorers,
war heroes and even ordinary soldiers, infant
prodigy, and no less a personage than the Great
Exalted Ruler of the lodge. It includes, in short,
anyone who has arrived at a position where the
public attention is focused upon him as a person.
The FNCLT was air undertaking infused with public interest. It was
promoted as a joint project of the government and the private sector,
and organized by top government officials and prominent
businessmen. For this reason, it attracted media mileage and drew
public attention not only to the conference itself but to the personalities
behind as well. As its Executive Director and spokesman, private
respondent consequently assumed the status of a public figure.
But even assuming ex-gratia argumenti that private respondent,
despite the position he occupied in the FNCLT, would not qualify as a
public figure, it does not necessarily follow that he could not validly be
the subject of a public comment even if he was not a public official or at
least a public figure, for he could be, as long as he was involved in a
public issue. If a matter is a subject of public or general interest, it
cannot suddenly became less so merely because a private individual is
involved or because in some sense the individual did not voluntarily
choose to become involved. The public's primary interest is in the
event; the public focus is on the conduct of the participant and the
content, effect and significance of the conduct, not the participant's
prior anonymity or notoriety.30
There is no denying that the questioned articles dealt with matters of
public interest. A reading of the imputations of petitioner Borjal against
respondent Wenceslao shows that all these necessarily bore upon the
latter's official conduct and his moral and mental fitness as Executive
Director of the FNCLT. The nature and functions of his position which
included solicitation of funds, dissemination of information about the
FNCLT in order to generate interest in the conference, and the
management and coordination of the various activities of the
conference demanded from him utmost honesty, integrity and
competence. These are matters about which the public has the right to
be informed, taking into account the very public character of the
conference itself.
Concededly, petitioner Borjal may have gone overboard in the
language employed describing the "organizer of the conference." One
is tempted to wonder if it was by some mischievous gambit that he
would also dare test the limits of the "wild blue yonder" of free speech
in this jurisdiction. But no matter how intemperate or deprecatory the
utterances appear to be, the privilege is not to be defeated nor
rendered inutile for, as succinctly expressed by Mr. Justice Brennan in
New York Times v. Sullivan, "[D]ebate on public issues should be
uninhibited, robust and wide open, and that it may well include
vehement, caustic and sometimes unpleasantly sharp attacks on the
government and public officials. 31
The Court of Appeals concluded that since malice is always presumed
in the publication of defamatory matters in the absence of proof to the
contrary, the question of privilege is immaterial.
We reject this postulate. While, generally, malice can be presumed
from defamatory words, the privileged character of a communication
destroys the presumption of malice. 32 The onus of proving actual
malice then lies on plaintiff, private respondent Wenceslao herein. He
must bring home to the defendant, petitioner Borjal herein, the
existence of malice as the true motive of his conduct.33
Malice connotes ill will or spite and speaks not in response to duty but
merely to injure the reputation of the person defamed, and implies an
intention to do ulterior and unjustifiable harm.34 Malice is bad faith or
bad motive.35 It is the essence of the crime of libel. 36
In the milieu obtaining, can it be reasonably inferred that in writing and
publishing the articles in question petitioner Borjal acted with malice?
Primarily, private respondent failed to substantiate by preponderant
evidence that petitioner was animated by a desire to inflict unjustifiable
harm on his reputation, or that the articles were written and published
without good motives or justifiable ends. On the other hand, we find
petitioner Borjal to have acted in good faith. Moved by a sense of civic
duty and prodded by his responsibility as a newspaperman, he
proceeded to expose and denounce what he perceived to be a public
deception. Surely, we cannot begrudge him for that. Every citizen has
the right to enjoy a good name and reputation, but we do not consider
that petitioner Borjal has violated that right in this case nor abused his
press freedom.
Furthermore, to be considered malicious, the libelous statements must
be shown to have been written or published with the knowledge that
they are false or in reckless disregard of whether they are false or not.
37 "Reckless disregard of what is false or not" means that the
defendant entertains serious doubt as to the truth of the publication, 38
or that he possesses a high degree of awareness of their probable
falsity.39
The articles subject of the instant case can hardly be said to have been
written with knowledge that these are false or in reckless disregard of
what is false or not. This is not to say however that the very serious
allegations of petitioner Borjal assumed by private respondent to be
directed against him are true. But we nevertheless find these at least to
have been based on reasonable grounds formed after the columnist
conducted several personal interviews and after considering the varied
documentary evidence provided him by his sources. Thus, the
following are supported by documentary evidence: (a) that private
respondent requested Gloria Macapagal-Arroyo, then head of the
Garments and Textile Export Board (GTEB), to expedite the
processing and release of the import approval and certificate of
availability of a garment firm in exchange for the monetary contribution
of Juliano Lim, which necessitated a reply from the office of Gloria
Macapagal-Arroyo explaining the procedure of the GTEB in processing
applications and clarifying that all applicants were treated
equally;40 (b) that Antonio Periquet was designated Chairman of the
Executive Committee of the FNCLT notwithstanding that he had
previously declined the offer;41 and, (c) that despite the fact that then
President Aquino and her Secretary of Transportation Rainerio Reyes
declined the invitation to be guest speakers in the conference, their
names were still included in the, printout of the FNCLT. 42 Added to
these are the admissions of private respondent that: (a) he assisted
Juliano Lim in his application for a quota allocation with the GTEB in
exchange for monetary contributions to the FNCLT; 43 (b) he included
the name of then Secretary of Transportation Rainerio Reyes in the
promotional materials of the conference notwithstanding the latter's
refusal to lend his name to and participate in the FNCLT;44 and, (c) he
used different letterheads and telephone numbers. 45
Even assuming that the contents of the articles are false, mere error,
inaccuracy or even falsity alone does not prove actual malice. Errors or
misstatements are inevitable in any scheme of truly free expression
and debate. Consistent with good faith and reasonable care, the press
should not be held to account, to a point of suppression, for honest
mistakes or imperfections in the choice of language. There must be
some room for misstatement of fact as well as for misjudgment. Only
by giving them much leeway and tolerance can they courageously and
effectively function as critical agencies in our democracy. 46 In Bulletin
Publishing Corp. v. Noel47 we held -
A newspaper especially one national in reach and
coverage, should be free to report on events and
developments in which the public has a legitimate
interest with minimum fear of being hauled to court
by one group or another on criminal or civil
charges for libel, so long as the newspaper
respects and keeps within the standards of
morality and civility prevailing within the general
community.
To avoid the self-censorship that would necessarily accompany strict
liability for erroneous statements, rules governing liability for injury to
reputation are required to allow an adequate margin of error by
protecting some inaccuracies. It is for the same reason that the New
York Times doctrine requires that liability for defamation of a public
official or public figure may not be imposed in the absence of proof of
"actual malice" on the part of the person making the libelous statement.
At any rate, it may be salutary for private respondent to ponder upon
the advice of Mr. Justice Malcolm expressed in U.S. v. Bustos, 48 that
"the interest of society and the maintenance of good government
demand a full discussion of public affairs. Complete liberty to comment
on the conduct of public men is a scalpel in the case of free speech.
The sharp incision of its probe relieves the abscesses of officialdom.
Men in public life may suffer under a hostile and unjust accusation; the
wound may be assuaged by the balm of a clear conscience. A public
official must not be too thin-skinned with reference to comments upon
his official acts."
The foregoing disposition renders the second and seventh assigned
errors moot and academic, hence, we find no necessity to pass upon
them.
We must however take this opportunity to likewise remind media
practitioners of the high ethical standards attached to and demanded
by their noble profession. The danger of an unbridled irrational
exercise of the right of free speech and press, that is, in utter contempt
of the rights of others and in willful disregard of the cumbrous
responsibilities inherent in it, is the eventual self-destruction of the right
and the regression of human society into a veritable Hobbesian state of
nature where life is short, nasty and brutish. Therefore, to recognize
that there can be no absolute "unrestraint" in speech is to truly
comprehend the quintessence of freedom in the marketplace of social
thought and action, genuine freedom being that which is limned by the
freedom of others. If there is freedom of the press, ought there not also
be freedom from the press? It is in this sense that self-regulation as
distinguished from self-censorship becomes the ideal mean for, as Mr.
Justice Frankfurter has warned, "[W]ithout
. . . a lively sense of responsibility, a free press may readily become a
powerful instrument of injustice." 49
Lest we be misconstrued, this is not to diminish nor constrict that space
in which expression freely flourishes and operates. For we have always
strongly maintained, as we do now, that freedom of expression is
man's birthright -constitutionally protected and guaranteed, and that it
has become the singular role of the press to act as its "defensor fidei"
in a democratic society such as ours. But it is also worth keeping in
mind that the press is the servant, not the master, of the citizenry, and
its freedom does not carry with it an restricted hunting license to prey
on the ordinary citizen. 50
On petitioners' counterclaim for damages, we find the evidence too
meager to sustain any award. Indeed, private respondent cannot be
said to have instituted the present suit in abuse of the legal processes
and with hostility to the press; or that he acted maliciously, wantonly,
oppressively, fraudulently and for the sole purpose of harassing
petitioners, thereby entitling the latter to damages. On the contrary,
private respondent acted within his rights to protect his honor from
what he perceived to be malicious imputations against him. Proof and
motive that the institution of the action was prompted by a sinister
design to vex and humiliate a person must be clearly and
preponderantly established to entitle the victim to damages. The law
could not have meant to impose a penalty on the right to litigate, nor
should counsel's fees be awarded every time a party wins a suit.51
For, concluding with the wisdom in Warren v. Pulitzer Publishing
Co.52 —
Every man has a right to discuss matters of public
interest. A clergyman with his flock, an admiral
with his fleet, a general with his army, a judge with
his jury; we are, all of us, the subject of public
discussion. The view of our court has been thus
stated: "It is only in despotisms that one must
speak sub rosa, or in whispers, with bated breath,
around the corner, or in the dark on a subject
touching the common welfare. It is the brightest
jewel in the crown of the law to speak and
maintain the golden mean between defamation, on
one hand, and a healthy and robust right of free
public discussion, on the other.
WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals of 25 March 1996 and its Resolution of 12 September 1996
denying reconsideration are, REVERSED and SET ASIDE, and the
complaint for damages against petitioners is DISMISSED. Petitioners'
counterclaim for damages is likewise DISMISSED for lack of merit. No
costs.1âwphi1.nêt
SO ORDERED.
HECTOR C. VILLANUEVA, Petitioner,
vs.
PHILIPPINE DAILY INQUIRER, INC., LETTY JIMENEZ MAGSANOC,
ROSAURO G. ACOSTA, JOSE MARIA NOLASCO, ARTEMIO T.
ENGRACIA, JR., RAFAEL CHEEKEE, and MANILA DAILY
BULLETIN PUBLISHING CORPORATION, NAPOLEON G. RAMA,
BEN F. RODRIGUEZ, ARTHUR S. SALES, CRIS J. ICBAN, JR.,
Respondents.
DECISION
QUISUMBING, J.:
This petition for review on certiorari assails the Amended Decision 1
dated May 25, 2004 of the Court of Appeals in CA-G.R. CV No. 54134,
reversing the Decision2 of the Regional Trial Court (RTC) of Negros
Oriental, Dumaguete City, Branch 44 in Civil Case No. 206-B, which
had awarded damages to petitioner for respondents’ false reporting.
The basic facts in this case are uncomplicated.
Petitioner was one of the mayoralty candidates in Bais, Negros
Oriental during the May 11, 1992 elections.
On March 30, 1990, Ricardo Nolan, another mayoralty candidate,
petitioned for the disqualification of petitioner from running in the
elections. Said petition, however, was denied by the COMELEC. 3
Two days before the elections, or on May 9, 1992, respondent Manila
Daily Bulletin Publishing Corporation (Manila Bulletin) published the
following story:
The Comelec has disqualified Hector G. Villanueva as Lakas-
NUCD candidate for mayor of Bais City for having been convicted in
three administrative cases for grave abuse of authority and harassment
in 1987, while he was officer-in-charge of the mayor’s office of Bais
City.4 [Emphasis and underscoring supplied.]
A day before the elections or on May 10, 1992, respondent Philippine
Daily Inquirer, Inc. (PDI) also came out with a similar story, to wit:
The Commission on Elections disqualified Hector G. Villanueva as
Lakas-NUCD candidate for mayor of Bais City for having been
convicted in three administrative cases for grave abuse of
authority and harassment in 1987, while he was the officer-in-
charge of the mayor’s office in the city.
The Comelec upheld the recommendation of the Comelec office in
Bais City, stressing that Villanueva’s conviction in the administrative
cases barred him from seeking any elective office.
The Comelec cited Section 40 of the Local Government Code of 1991,
which provides that among those who are disqualified from running for
any elective position are "those removed from office as a result of an
administrative case."
Villanueva was appointed Bais City OIC on April 18, 1986 by then
Local Government Minister Aquilino Pimentel. Sometime during the
same year, three administrative cases were instituted against
Villanueva before the Department of Local Government upon complaint
of Rebecco V. Fernandez and Dr. Harte C. Fuentes.
Sometime in May 1987, the ministry found Villanueva "guilty as
charged" and ordered him removed from his position as OIC of the city
government, which decision was approved by Minister Jaime Ferrer.
In the same month, Francisco G. Villanueva was appointed OIC Mayor
to replace Hector Villanueva who had been removed from office.
The poll body also stated that insofar as the penalty of the removal is
concerned, this cannot be reversed anymore, and consequently cannot
be the subject matter of an appeal.
The indefinite term as OIC to which respondent was appointed in 1986
already lapsed, with the holding of the 1988 local elections and the
assumption of office of those elected therein. 5 [Emphasis and
underscoring supplied.]
On May 11, 1992, the national and local elections were held as
scheduled. When results came out, it turned out that petitioner failed in
his mayoralty bid.
Believing that his defeat was caused by the publication of the above-
quoted stories, petitioner sued respondents PDI and Manila Bulletin as
well as their publishers and editors for damages before the RTC of
Bais City. He alleged that the articles were "maliciously timed" to
defeat him. He claimed he should have won by landslide, but his
supporters reportedly believed the news items distributed by his rivals
and voted for other candidates. He asked for actual damages of
₱270,000 for the amount he spent for the campaign, moral damages of
₱10,000,000, an unspecified amount of exemplary damages,
attorney’s fees of ₱300,000 and costs of suit.6
Respondents disclaimed liability. They asserted that no malice can be
attributed to them as they did not know petitioner and had no interest in
the outcome of the election, stressing that the stories were privileged in
nature.7
According to Manila Bulletin reporter Edgardo T. Suarez, he got the
story during a COMELEC commissioner’s press briefing. He, however,
came in late and only a fellow reporter told him that the disqualification
case against petitioner was granted. He did not bother to get a
confirmation from anyone as he had a deadline to beat. 8
PDI political section editor Carlos Hidalgo, on the other hand, said that
he got the story from a press release. He claimed that he found the
press release on his desk the day Manila Bulletin published the same
story. The press release bore COMELEC’s letterhead and was signed
by one Sonia Dimasupil, a former Malaya newspaper editor who was
in-charge of COMELEC press releases. He tried to contact her but she
was out of the office. Since the news item was also published in the
Manila Bulletin, he felt confident the press release was authentic. He
however failed to produce the press release in court. 9
On April 18, 1996, the trial court rendered a decision in favor of
petitioner as follows:
WHEREFORE FOREGOING CONSIDERED, this Court holds that
defendants Philippine Daily Inquirer, [Inc.] and Manila [Daily] Bulletin
Publishing Corporation with their respective officers are liable [for]
damages to plaintiff in the following manner:
1. As moral damages, the Philippine Daily Inquirer, [Inc.] and
the Manila [Daily] Bulletin Publishing Corporation are
ordered to pay ₱1,000,000.00 each to plaintiff;
2. Both defendants are likewise ordered to pay an exemplary
damage in the amount of ₱500,000.00 each;
3. To pay plaintiff’s attorney’s fees in the amount of
₱100,000.00;
4. And to pay the costs.
SO ORDERED.10
The trial court found the news items derogatory and injurious to
petitioner’s reputation and candidacy. It faulted respondents for failing
to verify the truth of the news tips they published and held respondents
liable for negligence, citing Policarpio v. Manila Times Pub. Co., Inc. 11
The trial court also ruled that because the news items lacked truth and
fairness, they were not privileged communications.
On appeal by respondents, the Court of Appeals dismissed the
complaint. It explained that although the stories were false and not
privileged, as there is no proof they were obtained from a press
conference or release, respondents were not impelled by malice or
improper motive. There was also no proof that petitioner’s supporters
junked him due to the reports. Neither was there any proof he would
win, making his action unfounded.
Before us, petitioner raises the lone issue of whether:
[THE] HONORABLE APPELLATE COURT COMMITTED … GRAVE
ABUSE OF DISCRETION AMOUNTING TO UTTER LACK OF
JURISDICTION WHEN IT UNILATERALLY, UNPROCEDURALLY
AND ARBITRARILY CHANGED THE PLEADING-BORNE AND PRE-
TRIAL ORDER DELINEATED THEORY OF QUASI-DELICT OF
APPELLEE, THEREBY DISMISSING THE CASE FOR FAILURE TO
EVIDENCE AN ESSENTIAL REQUISITE OF ITS IMPOSED
IRRELEVANT THEORY.12
Simply stated, we are asked to resolve the issue of whether petitioner
is required to prove malice to be entitled to damages.
Petitioner argues that his cause of action is based on quasi-delict
which only requires proof of fault or negligence, not proof of malice
beyond reasonable doubt as required in a criminal prosecution for libel.
He argues that the case is entirely different and separate from an
independent civil action arising from libel under Article 100 13 of the
Revised Penal Code. He claims he proffered proofs sustaining his
claim for damages under quasi-delict, not under the law on libel, as
malice is hard to prove. He stresses that nowhere in the complaint did
he mention libel, and nothing in his complaint shows that his cause of
action had some shade of libel as defined in the Revised Penal Code.
He also did not hint a resort to a criminal proceeding for libel.14
PDI and its officers argue that petitioner’s complaint clearly lays a
cause of action arising from libel as it highlights malice underlying the
publications. And as malice is an element of libel, the appellate court
committed no error in characterizing the case as one arising from
libel.15
For their part, Manila Bulletin and its officers claim that petitioner
changed his theory, which must be disallowed as it violates
respondents’ right to due process. Although petitioner’s claim for
damages before the trial court hinged on the erroneous publications,
which he alleged were maliciously timed, he claims in his petition
before this Court that his cause of action is actually one for quasi-delict
or tort. They stress that the prayer and allegations in petitioner’s
complaint, which never alleged quasi-delict or tort but malicious
publication as basis for the claim for damages, control his case theory.
Thus, it may not be altered unless there was an amendment of the
complaint to change the cause of action. They claim that petitioner’s
initiatory pleading and the trial court’s pre-trial order and decision
reveal that his cause of action for damages arose from the publications
of the "malicious" articles; hence, he should have proved actual malice
to be entitled to any award of damages. They added that the appellate
court correctly ruled that the articles were not published with actual
malice.161avvphil.zw+
We rule in favor of the respondents.
Basic is the rule that what determines the nature of an action as well as
which court has jurisdiction over it are the allegations of the complaint
and the character of the relief sought. 17 The nature of a pleading is
determined by allegations therein made in good faith, the stage of the
proceeding at which it is filed, and the primary objective of the party
filing the same. The ground chosen or the rationale adopted by the
court in resolving the case does not determine or change the real
nature thereof.
The complaint was denominated as one for "damages", and a perusal
of its content reveals that the factual allegations constituted a
complaint for damages based on malicious publication. It specifically
pointed out that petitioner lost the election because of the bad publicity
created by the malicious publication of respondents PDI and Manila
Bulletin. It is alleged numerous times that the action for damages
stemmed from respondents’ malicious publication. Petitioner sought
that respondents be declared guilty of irresponsible and malicious
publication and be made liable for damages. The fact that petitioner
later on changed his theory to quasi-delict does not change the nature
of petitioner’s complaint and convert petitioner’s action into quasi-
delict. The complaint remains to be one for damages based on
malicious publication.
Consequently, as the issue of malice was raised, it was incumbent on
petitioner to prove the same. The basic rule is that mere allegation is
not evidence, and is not equivalent to proof. 18 As correctly stated by the
Court of Appeals, while the questioned news item was found to be
untrue, this does not necessarily render the same malicious.
To fully appreciate the import of the complaint alleging malice and
damages, we must recall the essence of libel.
Libel is defined as "a public and malicious imputation of a crime, or of a
vice or defect, real or imaginary, or any act, omission, condition, status,
or circumstance tending to cause the dishonor, discredit, or contempt
of a natural person or juridical person, or to blacken the memory of one
who is dead."19 Any of these imputations is defamatory and under the
general rule stated in Article 354 of the Revised Penal Code, every
defamatory imputation is presumed to be malicious. 20 The presumption
of malice, however, does not exist in the following instances:
1. A private communication made by any person to another
in the performance of any legal, moral, or social duty; and
2. A fair and true report, made in good faith, without any
comments or remarks, of any judicial, legislative, or other
official proceedings which are not of confidential nature, or of
any statement, report, or speech delivered in said
proceedings, or of any other act performed by public officers
in the exercise of their functions. 21
We note that the publications or articles in question are neither private
communications nor true reports of official proceedings without any
comments or remarks. However, this does not necessarily mean that
the questioned articles are not privileged. The enumeration under
Art. 354 is not an exclusive list of qualified privileged
communications since fair commentaries on matters of public
interest are likewise privileged and constitute a valid defense in
an action for libel or slander. 22 The rule on privileged communication
had its genesis not in the nation’s penal code but in the Bill of Rights of
the Constitution guaranteeing freedom of speech and of the press. As
early as 1918, in United States v. Cañete,23 this Court ruled that
publications which are privileged for reasons of public policy are
protected by the constitutional guaranty of freedom of speech.24
In the instant case, there is no denying that the questioned articles
dealt with matters of public interest. These are matters about which the
public has the right to be informed, taking into account the very public
character of the election itself. For this reason, they attracted media
mileage and drew public attention not only to the election itself but to
the candidates. As one of the candidates, petitioner consequently
assumed the status of a public figure within the purview of Ayers
Productions Pty. Ltd. v. Capulong.25
But even assuming a person would not qualify as a public figure, it
would not necessarily follow that he could not validly be the subject of
a public comment. For he could; for instance, if and when he would be
involved in a public issue. If a matter is a subject of public or general
interest, it cannot suddenly become less so merely because a private
individual is involved or because in some sense the individual did not
voluntarily choose to become involved. The public’s primary interest
is in the event; the public focus is on the conduct of the
participant and the content, effect and significance of the
conduct, not the participant’s prior anonymity or notoriety.26
In any event, having been OIC-Mayor of Bais City after the People
Power Revolution, petitioner in this case as early as 1992 was already
a well-known official and public figure.
However, it must be stressed that the fact that a communication or
publication is privileged does not mean that it is not actionable; the
privileged character simply does away with the presumption of malice,
which the plaintiff has to prove in such a case. 27 That proof in a civil
case must of course be based on preponderance of evidence. This,
however, petitioner failed to do in this case.
Under the current state of our jurisprudence, to be considered
malicious, the libelous statement must be shown to have been written
or published with the knowledge that they are false or in reckless
disregard of whether they are false or not. "Reckless disregard of what
is false or not" means that the author or publisher entertains serious
doubt as to the truth of the publication, or that he possesses a high
degree of awareness of their probable falsity.28
In the instant case, we find no conclusive showing that the published
articles in question were written with knowledge that these were false
or in reckless disregard of what was false or not. According to Manila
Bulletin reporter Edgardo T. Suarez, he got the story from a fellow
reporter who told him that the disqualification case against petitioner
was granted. PDI, on the other hand, said that they got the story from a
press release the very same day the Manila Bulletin published the
same story. PDI claims that the press release bore COMELEC’s
letterhead, signed by one Sonia Dimasupil, who was in-charge of
COMELEC press releases. They also tried to contact her but she was
out of the office. Since the news item was already published in the
Manila Bulletin, they felt confident the press release was authentic.
Following the narration of events narrated by respondents, it cannot be
said that the publications, were published with reckless disregard of
what is false or not.
Nevertheless, even assuming that the contents of the articles turned
out to be false, mere error, inaccuracy or even falsity alone does not
prove actual malice. Errors or misstatements are inevitable in any
scheme of truly free expression and debate. Consistent with good faith
and reasonable care, the press should not be held to account, to a
point of suppression, for honest mistakes or imperfections in the choice
of language. There must be some room for misstatement of fact as well
as for misjudgment. Only by giving them much leeway and tolerance
can they courageously and effectively function as critical agencies in
our democracy.29
A newspaper, especially one national in reach and coverage, should
be free to report on events and developments in which the public has a
legitimate interest with minimum fear of being hauled to court by one
group or another on criminal or civil charges for malice or damages,
i.e. libel, so long as the newspaper respects and keeps within the
standards of morality and civility prevailing within the general
community.30
Likewise, in our view respondents’ failure to counter-check their report
or present their informant should not be a reason to hold them liable.
While substantiation of the facts supplied is an important reporting
standard, still, a reporter may rely on information given by a lone
source although it
reflects only one side of the story provided the reporter does not
entertain a "high degree of awareness of [its] probable falsity." 31
Petitioner, in this case, presented no proof that respondents
entertained such awareness. Failure to present respondents’ informant
before the court should not be taken against them.32
Worth stressing, jurisprudence instructs us that a privileged
communication should not be subjected to microscopic examination to
discover grounds for malice or falsity. Such excessive scrutiny would
defeat the protection which the law throws over privileged
communications. The ultimate test is that of bona fides.33
Further, worthy of note, before the filing of the complaint, respondents
herein received no word of protest, exception or objection from
petitioner. Had the error in the news reports in question been pointed
out by interested parties to the respondents, their publishers and
editors could have promptly made a rectification through print and
broadcast media just before and during the election day deflecting
thereby any prejudice to petitioner’s political or personal interest.
As aptly observed in Quisumbing v. Lopez, et al.:34
Every citizen of course has the right to enjoy a good name and
reputation, but we do not consider that the respondents, under the
circumstances of this case, had violated said right or abused the
freedom of the press. The newspapers should be given such leeway
and tolerance as to enable them to courageously and effectively
perform their important role in our democracy. In the preparation of
stories, press reporters and edition usually have to race with their
deadlines; and consistently with good faith and reasonable care, they
should not be held to account, to a point of suppression, for
honest mistakes or imperfection in the choice of words. 35 [Emphasis
supplied.]
We find respondents entitled to the protection of the rules concerning
qualified privilege, growing out of constitutional guaranties in our Bill of
Rights. We cannot punish journalists including publishers for an honest
endeavor to serve the public when moved by a sense of civic duty and
prodded by their sense of responsibility as news media to report what
they perceived to be a genuine report.
Media men are always reminded of their responsibilities as such. This
time, there is also a need to remind public figures of the consequences
of being one. Fittingly, as held in Time, Inc. v. Hill,36 one of the costs
associated with participation in public affairs is an attendant loss of
privacy.
Exposure of the self to others in varying degrees is a concomitant of
life in a civilized community. The risk of this exposure is an essential
incident of life in a society which places a primary value on freedom of
speech and of press. "Freedom of discussion, if it would fulfill its
historic function in this nation, must embrace all issues about which
information is needed or appropriate to enable the members of society
to cope with the exigencies of their period."37
On petitioner’s claim for damages, we find no evidence to support their
award. Indeed, it cannot be said that respondents published the
questioned articles for the sole purpose of harassing petitioner. Proof
and motive that the publication was prompted by a sinister design to
vex and humiliate petitioner has not been clearly and preponderantly
established to entitle the petitioner to damages. There remains
unfulfilled the need to prove that the publications were made with
actual malice – that is, with the knowledge of the publications’ falsity or
with reckless disregard of whether they were false or not. 38
Thus, from American jurisprudence as amplified in Lopez v. Court of
Appeals:
For liability to arise then without offending press freedom, there is this
test to meet: "The constitutional guarantees require, we think, a federal
rule that prohibits a public official from recovering damages for a
defamatory falsehood relating to his official conduct unless he proves
that the statement was made with ‘actual malice’— that is, with
knowledge that it was false or with reckless disregard of whether it was
false or not." The United States Supreme Court went further in
Curtis Publishing Co. v. Butts,39 where such immunity, was held
as covering statements concerning public figures regardless of
whether or not they are government officials. Why there should be
such an extension is understandable in the light of the broad
scope enjoyed by press freedom which certainly allows a full and
free discussion of public issues. What can be more logical and
appropriate, then, than such an expansion of the principle. As noted by
a commentator: "Since discussion of public issues cannot be
meaningful without reference to the men involved on both sides
of such issues, and since such men will not necessarily be public
officials, one cannot but agree that the Court was right in Curtis to
extend the Times40 rule to all public figures." 41 [Emphasis supplied.]
Furthermore, the guarantee of press freedom has also come to ensure
that claims for damages arising from the utilization of the freedom be
not unreasonable or exorbitant as to practically cause a chilling effect
on the exercise thereof. Damages, in our view, could not simply arise
from an inaccurate or false statement without irrefutable proof of actual
malice as element of the assailed publication.
WHEREFORE, the assailed Amended Decision dated May 25, 2004 of
the Court of Appeals in CA-G.R. CV No. 54134 is AFFIRMED.
SO ORDERED.
AVELINO CASUPANAN and ROBERTO CAPITULO, petitioners,
vs.
MARIO LLAVORE LAROYA, respondent.
CARPIO, J.:
The Case
This is a petition for review on certiorari to set aside the Resolution 1
dated December 28, 1999 dismissing the petition for certiorari and the
Resolution2 dated August 24, 2000 denying the motion for
reconsideration, both issued by the Regional Trial Court of Capas,
Tarlac, Branch 66, in Special Civil Action No. 17-C (99).
The Facts
Two vehicles, one driven by respondent Mario Llavore Laroya
("Laroya" for brevity) and the other owned by petitioner Roberto
Capitulo ("Capitulo" for brevity) and driven by petitioner Avelino
Casupanan ("Casupanan" for brevity), figured in an accident. As a
result, two cases were filed with the Municipal Circuit Trial Court
("MCTC" for brevity) of Capas, Tarlac. Laroya filed a criminal case
against Casupanan for reckless imprudence resulting in damage to
property, docketed as Criminal Case No. 002-99. On the other hand,
Casupanan and Capitulo filed a civil case against Laroya for quasi-
delict, docketed as Civil Case No. 2089.
When the civil case was filed, the criminal case was then at its
preliminary investigation stage. Laroya, defendant in the civil case, filed
a motion to dismiss the civil case on the ground of forum-shopping
considering the pendency of the criminal case. The MCTC granted the
motion in the Order of March 26, 1999 and dismissed the civil case.
On Motion for Reconsideration, Casupanan and Capitulo insisted that
the civil case is a separate civil action which can proceed
independently of the criminal case. The MCTC denied the motion for
reconsideration in the Order of May 7, 1999. Casupanan and Capitulo
filed a petition for certiorari under Rule 65 before the Regional Trial
Court ("Capas RTC" for brevity) of Capas, Tarlac, Branch 66, 3 assailing
the MCTC’s Order of dismissal.
The Trial Court’s Ruling
The Capas RTC rendered judgment on December 28, 1999 dismissing
the petition for certiorari for lack of merit. The Capas RTC ruled that the
order of dismissal issued by the MCTC is a final order which disposes
of the case and therefore the proper remedy should have been an
appeal. The Capas RTC further held that a special civil action for
certiorari is not a substitute for a lost appeal. Finally, the Capas RTC
declared that even on the premise that the MCTC erred in dismissing
the civil case, such error is a pure error of judgment and not an abuse
of discretion.
Casupanan and Capitulo filed a Motion for Reconsideration but the
Capas RTC denied the same in the Resolution of August 24, 2000.
Hence, this petition.
The Issue
The petition premises the legal issue in this wise:
"In a certain vehicular accident involving two parties, each
one of them may think and believe that the accident was
caused by the fault of the other. x x x [T]he first party,
believing himself to be the aggrieved party, opted to file a
criminal case for reckless imprudence against the second
party. On the other hand, the second party, together with his
operator, believing themselves to be the real aggrieved
parties, opted in turn to file a civil case for quasi-delict
against the first party who is the very private complainant in
the criminal case."4
Thus, the issue raised is whether an accused in a pending criminal
case for reckless imprudence can validly file, simultaneously and
independently, a separate civil action for quasi-delict against the
private complainant in the criminal case.
The Court’s Ruling
Casupanan and Capitulo assert that Civil Case No. 2089, which the
MCTC dismissed on the ground of forum-shopping, constitutes a
counterclaim in the criminal case. Casupanan and Capitulo argue that
if the accused in a criminal case has a counterclaim against the private
complainant, he may file the counterclaim in a separate civil action at
the proper time. They contend that an action on quasi-delict is different
from an action resulting from the crime of reckless imprudence, and an
accused in a criminal case can be an aggrieved party in a civil case
arising from the same incident. They maintain that under Articles 31
and 2176 of the Civil Code, the civil case can proceed independently of
the criminal action. Finally, they point out that Casupanan was not the
only one who filed the independent civil action based on quasi-delict
but also Capitulo, the owner-operator of the vehicle, who was not a
party in the criminal case.
In his Comment, Laroya claims that the petition is fatally defective as it
does not state the real antecedents. Laroya further alleges that
Casupanan and Capitulo forfeited their right to question the order of
dismissal when they failed to avail of the proper remedy of appeal.
Laroya argues that there is no question of law to be resolved as the
order of dismissal is already final and a petition for certiorari is not a
substitute for a lapsed appeal.
In their Reply, Casupanan and Capitulo contend that the petition raises
the legal question of whether there is forum-shopping since they filed
only one action - the independent civil action for quasi-delict against
Laroya.
Nature of the Order of Dismissal
The MCTC dismissed the civil action for quasi-delict on the ground of
forum-shopping under Supreme Court Administrative Circular No. 04-
94. The MCTC did not state in its order of dismissal 5 that the dismissal
was with prejudice. Under the Administrative Circular, the order of
dismissal is without prejudice to refiling the complaint, unless the order
of dismissal expressly states it is with prejudice. 6 Absent a declaration
that the dismissal is with prejudice, the same is deemed without
prejudice. Thus, the MCTC’s dismissal, being silent on the matter, is a
dismissal without prejudice.
Section 1 of Rule 417 provides that an order dismissing an action
without prejudice is not appealable. The remedy of the aggrieved party
is to file a special civil action under Rule 65. Section 1 of Rule 41
expressly states that "where the judgment or final order is not
appealable, the aggrieved party may file an appropriate special civil
action under Rule 65." Clearly, the Capas RTC’s order dismissing the
petition for certiorari, on the ground that the proper remedy is an
ordinary appeal, is erroneous.
Forum-Shopping
The essence of forum-shopping is the filing of multiple suits involving
the same parties for the same cause of action, either simultaneously or
successively, to secure a favorable judgment. 8 Forum-shopping is
present when in the two or more cases pending, there is identity of
parties, rights of action and reliefs sought. 9 However, there is no forum-
shopping in the instant case because the law and the rules expressly
allow the filing of a separate civil action which can proceed
independently of the criminal action.
Laroya filed the criminal case for reckless imprudence resulting in
damage to property based on the Revised Penal Code while
Casupanan and Capitulo filed the civil action for damages based on
Article 2176 of the Civil Code. Although these two actions arose from
the same act or omission, they have different causes of action. The
criminal case is based on culpa criminal punishable under the Revised
Penal Code while the civil case is based on culpa aquiliana actionable
under Articles 2176 and 2177 of the Civil Code. These articles on culpa
aquiliana read:
"Art. 2176. 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.
Art. 2177. Responsibility for fault or negligence under the
preceding article is entirely separate and distinct from the
civil liability arising from negligence under the Penal Code.
But the plaintiff cannot recover damages twice for the same
act or omission of the defendant."
Any aggrieved person can invoke these articles provided he proves, by
preponderance of evidence, that he has suffered damage because of
the fault or negligence of another. Either the private complainant or the
accused can file a separate civil action under these articles. There is
nothing in the law or rules that state only the private complainant in a
criminal case may invoke these articles.
Moreover, paragraph 6, Section 1, Rule 111 of the 2000 Rules on
Criminal Procedure ("2000 Rules" for brevity) expressly requires the
accused to litigate his counterclaim in a separate civil action, to wit:
"SECTION 1. Institution of criminal and civil actions. – (a) x x
x.
No counterclaim, cross-claim or third-party complaint may be
filed by the accused in the criminal case, but any cause of
action which could have been the subject thereof may be
litigated in a separate civil action." (Emphasis supplied)
Since the present Rules require the accused in a criminal action to file
his counterclaim in a separate civil action, there can be no forum-
shopping if the accused files such separate civil action.
Filing of a separate civil action
Section 1, Rule 111 of the 1985 Rules on Criminal Procedure ("1985
Rules" for brevity), as amended in 1988, allowed the filing of a
separate civil action independently of the criminal action provided the
offended party reserved the right to file such civil action. Unless the
offended party reserved the civil action before the presentation of the
evidence for the prosecution, all civil actions arising from the same act
or omission were deemed "impliedly instituted" in the criminal case.
These civil actions referred to the recovery of civil liability ex-delicto,
the recovery of damages for quasi-delict, and the recovery of damages
for violation of Articles 32, 33 and 34 of the Civil Code on Human
Relations.
Thus, to file a separate and independent civil action for quasi-delict
under the 1985 Rules, the offended party had to reserve in the criminal
action the right to bring such action. Otherwise, such civil action was
deemed "impliedly instituted" in the criminal action. Section 1, Rule 111
of the 1985 Rules provided as follows:
"Section 1. – Institution of criminal and civil actions. – When
a criminal action is instituted, the civil action for the recovery
of civil liability is impliedly instituted with the criminal action,
unless the offended party waives the action, reserves his
right to institute it separately, or institutes the civil action prior
to the criminal action.
Such civil action includes recovery of indemnity under
the Revised Penal Code, and damages under Articles
32, 33, 34 and 2176 of the Civil Code of the Philippines
arising from the same act or omission of the accused.
A waiver of any of the civil actions extinguishes the others.
The institution of, or the reservation of the right to file, any of
said civil actions separately waives the others.
The reservation of the right to institute the separate civil
actions shall be made before the prosecution starts to
present its evidence and under circumstances affording the
offended party a reasonable opportunity to make such
reservation.
In no case may the offended party recover damages twice
for the same act or omission of the accused.
x x x." (Emphasis supplied)
Section 1, Rule 111 of the 1985 Rules was amended on December 1,
2000 and now provides as follows:
"SECTION 1. Institution of criminal and civil actions. – (a)
When a criminal action is instituted, the civil action for the
recovery of civil liability arising from the offense
charged shall be deemed instituted with the criminal
action unless the offended party waives the civil action,
reserves the right to institute it separately or institutes the
civil action prior to the criminal action.
The reservation of the right to institute separately the civil
action shall be made before the prosecution starts
 presenting its evidence and under circumstances affording
the offended party a reasonable opportunity to make such
reservation.
xxx
(b) x x x
Where the civil action has been filed separately and trial
thereof has not yet commenced, it may be consolidated with
the criminal action upon application with the court trying the
latter case. If the application is granted, the trial of both
actions shall proceed in accordance with section 2 of this
rule governing consolidation of the civil and criminal actions."
(Emphasis supplied)
Under Section 1 of the present Rule 111, what is "deemed instituted"
with the criminal action is only the action to recover civil liability arising
from the crime or ex-delicto. All the other civil actions under Articles 32,
33, 34 and 2176 of the Civil Code are no longer "deemed instituted,"
and may be filed separately and prosecuted independently even
without any reservation in the criminal action. The failure to make a
reservation in the criminal action is not a waiver of the right to file a
separate and independent civil action based on these articles of the
Civil Code. The prescriptive period on the civil actions based on these
articles of the Civil Code continues to run even with the filing of the
criminal action. Verily, the civil actions based on these articles of the
Civil Code are separate, distinct and independent of the civil action
"deemed instituted" in the criminal action. 10
Under the present Rule 111, the offended party is still given the option
to file a separate civil action to recover civil liability ex-delicto by
reserving such right in the criminal action before the prosecution
presents its evidence. Also, the offended party is deemed to make
such reservation if he files a separate civil action before filing the
criminal action. If the civil action to recover civil liability ex-delicto is
filed separately but its trial has not yet commenced, the civil action may
be consolidated with the criminal action. The consolidation under this
Rule does not apply to separate civil actions arising from the same act
or omission filed under Articles 32, 33, 34 and 2176 of the Civil Code. 11
Suspension of the Separate Civil Action
Under Section 2, Rule 111 of the amended 1985 Rules, a separate civil
action, if reserved in the criminal action, could not be filed until after
final judgment was rendered in the criminal action. If the separate civil
action was filed before the commencement of the criminal action, the
civil action, if still pending, was suspended upon the filing of the
criminal action until final judgment was rendered in the criminal action.
This rule applied only to the separate civil action filed to recover liability
ex-delicto. The rule did not apply to independent civil actions based on
Articles 32, 33, 34 and 2176 of the Civil Code, which could proceed
independently regardless of the filing of the criminal action.
The amended provision of Section 2, Rule 111 of the 2000 Rules
continues this procedure, to wit:
"SEC. 2. When separate civil action is suspended. – After
the criminal action has been commenced, the separate civil
action arising therefrom cannot be instituted until final
judgment has been entered in the criminal action.
If the criminal action is filed after the said civil action
has already been instituted, the latter shall be
suspended in whatever stage it may be found before
judgment on the merits. The suspension shall last until
final judgment is rendered in the criminal action.
Nevertheless, before judgment on the merits is rendered in
the civil action, the same may, upon motion of the offended
party, be consolidated with the criminal action in the court
trying the criminal action. In case of consolidation, the
evidence already adduced in the civil action shall be deemed
automatically reproduced in the criminal action without
prejudice to the right of the prosecution to cross-examine the
witnesses presented by the offended party in the criminal
case and of the parties to present additional evidence. The
consolidated criminal and civil actions shall be tried and
decided jointly.
During the pendency of the criminal action, the running of the
period of prescription of the civil action which cannot be
instituted separately or whose proceeding has been
suspended shall be tolled.
x x x." (Emphasis supplied)
Thus, Section 2, Rule 111 of the present Rules did not change the rule
that the separate civil action, filed to recover damages ex-delicto, is
suspended upon the filing of the criminal action. Section 2 of the
present Rule 111 also prohibits the filing, after commencement of the
criminal action, of a separate civil action to recover damages ex-
delicto.
When civil action may proceed independently
The crucial question now is whether Casupanan and Capitulo, who are
not the offended parties in the criminal case, can file a separate civil
action against the offended party in the criminal case. Section 3, Rule
111 of the 2000 Rules provides as follows:
"SEC 3. When civil action may proceed independently. - In
the cases provided in Articles 32, 33, 34 and 2176 of the
Civil Code of the Philippines, the independent civil action
may be brought by the offended party. It shall proceed
independently of the criminal action and shall require only a
preponderance of evidence. In no case, however, may the
offended party recover damages twice for the same act or
omission charged in the criminal action." (Emphasis
supplied)
Section 3 of the present Rule 111, like its counterpart in the amended
1985 Rules, expressly allows the "offended party" to bring an
independent civil action under Articles 32, 33, 34 and 2176 of the Civil
Code. As stated in Section 3 of the present Rule 111, this civil action
shall proceed independently of the criminal action and shall require
only a preponderance of evidence. In no case, however, may the
"offended party recover damages twice for the same act or omission
charged in the criminal action."
There is no question that the offended party in the criminal action can
file an independent civil action for quasi-delict against the accused.
Section 3 of the present Rule 111 expressly states that the "offended
party" may bring such an action but the "offended party" may not
recover damages twice for the same act or omission charged in the
criminal action. Clearly, Section 3 of Rule 111 refers to the offended
party in the criminal action, not to the accused.
Casupanan and Capitulo, however, invoke the ruling in Cabaero vs.
Cantos12 where the Court held that the accused therein could validly
institute a separate civil action for quasi-delict against the private
complainant in the criminal case. In Cabaero, the accused in the
criminal case filed his Answer with Counterclaim for malicious
prosecution. At that time the Court noted the "absence of clear-cut
rules governing the prosecution on impliedly instituted civil actions and
the necessary consequences and implications thereof." Thus, the
Court ruled that the trial court should confine itself to the criminal
aspect of the case and disregard any counterclaim for civil liability. The
Court further ruled that the accused may file a separate civil case
against the offended party "after the criminal case is terminated and/or
in accordance with the new Rules which may be promulgated." The
Court explained that a cross-claim, counterclaim or third-party
complaint on the civil aspect will only unnecessarily complicate the
proceedings and delay the resolution of the criminal case.
Paragraph 6, Section 1 of the present Rule 111 was incorporated in the
2000 Rules precisely to address the lacuna mentioned in Cabaero.
Under this provision, the accused is barred from filing a counterclaim,
cross-claim or third-party complaint in the criminal case. However, the
same provision states that "any cause of action which could have been
the subject (of the counterclaim, cross-claim or third-party complaint)
may be litigated in a separate civil action." The present Rule 111
mandates the accused to file his counterclaim in a separate civil
actiosn which shall proceed independently of the criminal action, even
as the civil action of the offended party is litigated in the criminal action.
Conclusion
Under Section 1 of the present Rule 111, the independent civil action in
Articles 32, 33, 34 and 2176 of the Civil Code is not deemed instituted
with the criminal action but may be filed separately by the offended
party even without reservation. The commencement of the criminal
action does not suspend the prosecution of the independent civil action
under these articles of the Civil Code. The suspension in Section 2 of
the present Rule 111 refers only to the civil action arising from the
crime, if such civil action is reserved or filed before the commencement
of the criminal action.
Thus, the offended party can file two separate suits for the same act or
omission. The first a criminal case where the civil action to recover civil
liability ex-delicto is deemed instituted, and the other a civil case for
quasi-delict - without violating the rule on non-forum shopping. The two
cases can proceed simultaneously and independently of each other.
The commencement or prosecution of the criminal action will not
suspend the civil action for quasi-delict. The only limitation is that the
offended party cannot recover damages twice for the same act or
omission of the defendant. In most cases, the offended party will have
no reason to file a second civil action since he cannot recover
damages twice for the same act or omission of the accused. In some
instances, the accused may be insolvent, necessitating the filing of
another case against his employer or guardians.
Similarly, the accused can file a civil action for quasi-delict for the same
act or omission he is accused of in the criminal case. This is expressly
allowed in paragraph 6, Section 1 of the present Rule 111 which states
that the counterclaim of the accused "may be litigated in a separate
civil action." This is only fair for two reasons. First, the accused is
prohibited from setting up any counterclaim in the civil aspect that is
deemed instituted in the criminal case. The accused is therefore forced
to litigate separately his counterclaim against the offended party. If the
accused does not file a separate civil action for quasi-delict, the
prescriptive period may set in since the period continues to run until the
civil action for quasi-delict is filed.
Second, the accused, who is presumed innocent, has a right to invoke
Article 2177 of the Civil Code, in the same way that the offended party
can avail of this remedy which is independent of the criminal action. To
disallow the accused from filing a separate civil action for quasi-delict,
while refusing to recognize his counterclaim in the criminal case, is to
deny him due process of law, access to the courts, and equal
protection of the law.
Thus, the civil action based on quasi-delict filed separately by
Casupanan and Capitulo is proper. The order of dismissal by the
MCTC of Civil Case No. 2089 on the ground of forum-shopping is
erroneous.
We make this ruling aware of the possibility that the decision of the trial
court in the criminal case may vary with the decision of the trial court in
the independent civil action. This possibility has always been
recognized ever since the Civil Code introduced in 1950 the concept of
an independent civil action under Articles 32, 33, 34 and 2176 of the
Code. But the law itself, in Article 31 of the Code, expressly provides
that the independent civil action "may proceed independently of the
criminal proceedings and regardless of the result of the latter." In
Azucena vs. Potenciano,13 the Court declared:
"x x x. There can indeed be no other logical conclusion than
this, for to subordinate the civil action contemplated in the
said articles to the result of the criminal prosecution —
whether it be conviction or acquittal — would render
meaningless the independent character of the civil action
and the clear injunction in Article 31 that this action 'may
proceed independently of the criminal proceedings and
regardless of the result of the latter.’"
More than half a century has passed since the Civil Code introduced
the concept of a civil action separate and independent from the
criminal action although arising from the same act or omission. The
Court, however, has yet to encounter a case of conflicting and
irreconcilable decisions of trial courts, one hearing the criminal case
and the other the civil action for quasi-delict. The fear of conflicting and
irreconcilable decisions may be more apparent than real. In any event,
there are sufficient remedies under the Rules of Court to deal with such
remote possibilities.
One final point. The Revised Rules on Criminal Procedure took effect
on December 1, 2000 while the MCTC issued the order of dismissal on
December 28, 1999 or before the amendment of the rules. The
Revised Rules on Criminal Procedure must be given retroactive effect
considering the well-settled rule that -
"x x x statutes regulating the procedure of the court will be
construed as applicable to actions pending and
undetermined at the time of their passage. Procedural laws
are retroactive in that sense and to that extent."14
WHEREFORE, the petition for review on certiorari is hereby
GRANTED. The Resolutions dated December 28, 1999 and August
24, 2000 in Special Civil Action No. 17-C (99) are ANNULLED and
Civil Case No. 2089 is REINSTATED.
SO ORDERED.
SPS. ANTONIO C. SANTOS and ESPERANZA C. SANTOS, NORA
BARNALO, BELINDA LUMACTAD, MARIENELA DY, NIKKA
SANTOS and LEONARDO FERRER, Petitioners,
vs.
HON. NORMANDIE B. PIZARDO, as Presiding Judge, RTC of
Quezon City, Branch 101, DIONISIO M SIBAYAN, and VIRON
TRANSPORTATION COMPANY, INC., represented by VIRGILIO Q.
RONDARIS, President/Chairman, Respondent.
DECISION
TINGA, J.:
In this Petition for Review on Certiorari1 dated March 1, 2002,
petitioners assail the Resolutions of the Court of Appeals dated
September 10, 2001 and January 9, 2002, respectively dismissing their
petition for certiorari and denying their motion for reconsideration,
arising from the dismissal of their complaint to recover civil indemnity
for the death and physical injuries of their kin.
The following facts are matters of record.
In an Information dated April 25, 1994, Dionisio M. Sibayan (Sibayan)
was charged with Reckless Imprudence Resulting to Multiple Homicide
and Multiple Physical Injuries in connection with a vehicle collision
between a southbound Viron Transit bus driven by Sibayan and a
northbound Lite Ace Van, which claimed the lives of the van’s driver
and three (3) of its passengers, including a two-month old baby, and
caused physical injuries to five (5) of the van’s passengers. After trial,
Sibayan was convicted and sentenced to suffer the penalty of
imprisonment for two (2) years, four (4) months and one (1) day to four
(4) years and two (2) months. However, as there was a reservation to
file a separate civil action, no pronouncement of civil liability was made
by the municipal circuit trial court in its decision promulgated on
December 17, 1998.2
On October 20, 2000, petitioners filed a complaint for damages against
Sibayan, Viron Transit and its President/Chairman, Virgilio Q.
Rondaris, with the Regional Trial Court of Quezon City, pursuant to
their reservation to file a separate civil action. 3 They cited therein the
judgment convicting Sibayan.
Viron Transit moved to dismiss the complaint on the grounds of
improper service of summons, prescription and laches, and defective
certification of non-forum shopping. It also sought the dropping of
Virgilio Q. Rondaris as defendant in view of the separate personality of
Viron Transit from its officers.4
Petitioners opposed the motion to dismiss contending, among others,
that the right to file a separate action in this case prescribes in ten (10)
years reckoned from the finality of the judgment in the criminal action.
As there was no appeal of the decision convicting Sibayan, the
complaint which was filed barely two (2) years thence was clearly filed
within the prescriptive period.
The trial court dismissed the complaint on the principal ground that the
cause of action had already prescribed. According to the trial court,
actions based on quasi delict, as it construed petitioners’ cause of
action to be, prescribe four (4) years from the accrual of the cause of
action. Hence, notwithstanding the fact that petitioners reserved the
right to file a separate civil action, the complaint ought to be dismissed
on the ground of prescription.5
Improper service of summons was likewise cited as a ground for
dismissal of the complaint as summons was served through a certain
Jessica Ubalde of the legal department without mentioning her
designation or position.
Petitioners filed a motion for reconsideration pointing out yet again that
the complaint is not based on quasi delict but on the final judgment of
conviction in the criminal case which prescribes ten (10) years from the
finality of the judgment. 6 The trial court denied petitioners’ motion for
reconsideration reiterating that petitioners’ cause of action was based
on quasi delict and had prescribed under Article 1146 of the Civil Code
because the complaint was filed more than four (4) years after the
vehicular accident.7 As regards the improper service of summons, the
trial court reconsidered its ruling that the complaint ought to be
dismissed on this ground.
Petitioners filed a petition for certiorari with the Court of Appeals which
dismissed the same for error in the choice or mode of appeal. 8 The
appellate court also denied petitioners’ motion for reconsideration
reasoning that even if the respondent trial court judge committed grave
abuse of discretion in issuing the order of dismissal, certiorari is still not
the permissible remedy as appeal was available to petitioners and they
failed to allege that the petition was brought within the recognized
exceptions for the allowance of certiorari in lieu of appeal.9
In this petition, petitioners argue that a rigid application of the rule that
certiorari cannot be a substitute for appeal will result in a judicial
rejection of an existing obligation arising from the criminal liability of
private respondents. Petitioners insist that the liability sought to be
enforced in the complaint arose ex delicto and is not based on quasi
delict. The trial court allegedly committed grave abuse of discretion
when it insisted that the cause of action invoked by petitioners is based
on quasi delict and concluded that the action had prescribed. Since the
action is based on the criminal liability of private respondents, the
cause of action accrued from the finality of the judgment of conviction.
Assuming that their petition with the appellate court was procedurally
flawed, petitioners implore the Court to exempt this case from the rigid
operation of the rules as they allegedly have a legitimate grievance to
vindicate, i.e., damages for the deaths and physical injuries caused by
private respondents for which no civil liability had been adjudged by
reason of their reservation of the right to file a separate civil action.
In their Comment10 dated June 13, 2002, private respondents insist
that the dismissal of the complaint on the ground of prescription was in
order. They point out that the averments in the complaint make out a
cause of action for quasi delict under Articles 2176 and 2180 of the
Civil Code. As such, the prescriptive period of four (4) years should be
reckoned from the time the accident took place.
Viron Transit also alleges that its subsidiary liability cannot be enforced
since Sibayan was not ordered to pay damages in the criminal case. It
is Viron Transit’s contention that the subsidiary liability of the employer
contemplated in Article 103 of the Revised Penal Code presupposes a
situation where the civil aspect of the case was instituted in the criminal
case and no reservation to file a separate civil case was made.
Private respondents likewise allege that the recourse to the Court of
Appeals via certiorari was improper as petitioners should have
appealed the adverse order of the trial court. Moreover, they point out
several other procedural lapses allegedly committed by petitioners,
such as lack of certification against forum-shopping; lack of duplicate
original or certified true copy of the assailed order of the trial court; and
non-indication of the full names and addresses of petitioners in the
petition.
Petitioners filed a Reply11 dated September 14, 2002, while private
respondents filed a Rejoinder12 dated October 14, 2002, both in
reiteration of their arguments.
We grant the petition.
Our Revised Penal Code provides that every person criminally liable
for a felony is also civilly liable. 13 Such civil liability may consist of
restitution, reparation of the damage caused and indemnification of
consequential damages.14 When a criminal action is instituted, the civil
liability arising from the offense is impliedly instituted with the criminal
action, subject to three notable exceptions: first, when the injured party
expressly waives the right to recover damages from the accused;
second, when the offended party reserves his right to have the civil
damages determined in a separate action in order to take full control
and direction of the prosecution of his cause; and third, when the
injured party actually exercises the right to maintain a private suit
against the offender by instituting a civil action prior to the filing of the
criminal case.
Notably, it was the 1985 Rules on Criminal Procedure, as amended in
1988, which governed the institution of the criminal action, as well as
the reservation of the right to file a separate civil action. Section 1, Rule
111 thereof states:
Section 1. Institution of criminal and civil actions.—When a criminal
action is instituted, the civil action for the recovery of civil liability is
impliedly instituted with the criminal action, unless the offended party
waives the civil action, reserves his right to institute it separately, or
institutes the civil action prior to the criminal action.
Such civil action includes recovery of indemnity under the Revised
Penal Code, and damages under Articles 32, 33, 34 and 2176 of the
Civil Code of the Philippines arising from the same act or omission of
the accused.
A waiver of any of the civil actions extinguishes the others. The
institution of, or the reservation of the right to file, any of said civil
actions separately waives the others.
The reservation of the right to institute the separate civil actions shall
be made before the prosecution starts to present its evidence and
under circumstances affording the offended party a reasonable
opportunity to make such reservation.
In no case may the offended party recover damages twice for the same
act or omission of the accused.
When the offended party seeks to enforce civil liability against the
accused by way of moral, nominal, temperate or exemplary damages,
the filing fees for such action as provided in these Rules shall
constitute a first lien on the judgment except in an award for actual
damages.
In cases wherein the amount of damages, other than actual, is alleged
in the complaint or information, the corresponding filing fees shall be
paid by the offended party upon filing thereof in court for trial.
Petitioners expressly made a reservation of their right to file a separate
civil action as a result of the crime committed by Sibayan. On account
of this reservation, the municipal circuit trial court, in its decision
convicting Sibayan, did not make any pronouncement as to the latter’s
civil liability.
Predicating their claim on the judgment of conviction and their
reservation to file a separate civil action made in the criminal case,
petitioners filed a complaint for damages against Sibayan, Viron
Transit and its President/Chairman. Petitioners assert that by the
institution of the complaint, they seek to recover private respondents’
civil liability arising from crime. Unfortunately, based on its misreading
of the allegations in the complaint, the trial court dismissed the same,
declaring that petitioners’ cause of action was based on quasi delict
and should have been brought within four (4) years from the time the
cause of action accrued, i.e., from the time of the accident.
A reading of the complaint reveals that the allegations therein are
consistent with petitioners’ claim that the action was brought to recover
civil liability arising from crime. Although there are allegations of
negligence on the part of Sibayan and Viron Transit, such does not
necessarily mean that petitioners were pursuing a cause of action
based on quasi delict, considering that at the time of the filing of the
complaint, the cause of action ex quasi delicto had already prescribed.
Besides, in cases of negligence, the offended party has the choice
between an action to enforce civil liability arising from crime under the
Revised Penal Code and an action for quasi delict under the Civil
Code.
An act or omission causing damage to another may give rise to two
separate civil liabilities on the part of the offender, i.e., (1) civil liability
ex delicto, under Article 100 of the Revised Penal Code; and (2)
independent civil liabilities, such as those (a) not arising from an act or
omission complained of as a felony, e.g., culpa contractual or
obligations arising from law under Article 31 of the Civil Code,
intentional torts under Articles 32 and 34, and culpa aquiliana under
Article 2176 of the Civil Code; or (b) where the injured party is granted
a right to file an action independent and distinct from the criminal action
under Article 33 of the Civil Code.15 Either of these liabilities may be
enforced against the offender subject to the caveat under Article 2177
of the Civil Code that the plaintiff cannot recover damages twice for the
same act or omission of the defendant and the similar proscription
against double recovery under the Rules above-quoted.
At the time of the filing of the complaint for damages in this case, the
cause of action ex quasi delicto had already prescribed. Nonetheless,
petitioners can pursue the remaining avenue opened for them by their
reservation, i.e., the surviving cause of action ex delicto. This is so
because the prescription of the action ex quasi delicto does not
operate as a bar to an action to enforce the civil liability arising from
crime especially as the latter action had been expressly reserved.
The case of Mendoza v. La Mallorca Bus Company16 was decided
upon a similar set of facts. Therein, the driver of La Mallorca Bus
Company was charged with reckless imprudence resulting to damage
to property. The plaintiff made an express reservation for the filing of a
separate civil action. The driver was convicted which conviction was
affirmed by this Court. Later, plaintiff filed a separate civil action for
damages based on quasi delict which was ordered dismissed by the
trial court upon finding that the action was instituted more than six (6)
years from the date of the accident and thus, had already prescribed.
Subsequently, plaintiff instituted another action, this time based on the
subsidiary liability of the bus company. The trial court dismissed the
action holding that the dismissal of the earlier civil case operated as a
bar to the filing of the action to enforce the bus company’s subsidiary
liability.
We held that the dismissal of the action based on culpa aquiliana is not
a bar to the enforcement of the subsidiary liability of the employer.
Once there is a conviction for a felony, final in character, the employer
becomes subsidiarily liable if the commission of the crime was in the
discharge of the duties of the employees. This is so because Article
103 of the Revised Penal Code operates with controlling force to
obviate the possibility of the aggrieved party being deprived of
indemnity even after the rendition of a final judgment convicting the
employee.
Seen in this light, the trial court should not have dismissed the
complaint on the ground of prescription, but instead allowed the
complaint for damages ex delicto to be prosecuted on the merits,
considering petitioners’ allegations in their complaint, opposition to the
motion to dismiss17 and motion for reconsideration18 of the order of
dismissal, insisting that the action was to recover civil liability arising
from crime.
This does not offend the policy that the reservation or institution of a
separate civil action waives the other civil actions. The rationale behind
this rule is the avoidance of multiple suits between the same litigants
arising out of the same act or omission of the offender. 19 However,
since the stale action for damages based on quasi delict should be
considered waived, there is no more occasion for petitioners to file
multiple suits against private respondents as the only recourse
available to them is to pursue damages ex delicto. This interpretation is
also consistent with the bar against double recovery for obvious
reasons.
Now the procedural issue. Admittedly, petitioners should have
appealed the order of dismissal of the trial court instead of filing a
petition for certiorari with the Court of Appeals. Such procedural
misstep, however, should be exempted from the strict application of the
rules in order to promote their fundamental objective of securing
substantial justice.20 We are loathe to deprive petitioners of the
indemnity to which they are entitled by law and by a final judgment of
conviction based solely on a technicality. It is our duty to prevent such
an injustice.21
WHEREFORE, judgment is hereby rendered SETTING ASIDE the
resolutions of the Court of Appeals dated September 10, 2001 and
January 9, 2002, respectively dismissing the present action and
denying petitioners’ motion for reconsideration, as well as the orders of
the lower court dated February 26, 2001 and July 16, 2001. Let the
case be REMANDED to the trial court for further proceedings.
SO ORDERED.
ANTONIO V. NUEVA ESPAÑA petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
DECISION
CORONA, J.:
At about 11:15 a.m. on May 15, 1998, petitioner Antonio E. Nueva
España was driving a passenger bus owned by Vallacar Transit, Inc.
He was then traversing the national highway of Calag-Calag, Ayungon,
Negros Oriental and was southbound going to Dumaguete City. While
negotiating a curve, the passenger bus collided with a northbound
Honda motorcycle. As a result, Reynard So, the driver of the
motorcycle, and Nilo Castro, the person riding in tandem with him,
were killed. An information for reckless imprudence resulting in double
homicide1 was filed against petitioner who was also accused of failing
to extend aid or assistance to the victims.
During the trial of the case, the prosecution presented Julito Dayuday
and Florencio Banico as eyewitnesses to the collision. The father of So
and the mother of Castro were also called to the witness stand to
substantiate their respective claims for damages.
Julito Dayuday, a resident of Calag-Calag, Ayungon, Negros Oriental,
testified that he was waiting for a ride to Dumaguete City when the
collision between the bus and the Honda motorcycle occurred. He saw
the bus coming from the north going to Dumaguete City and, in the
opposite direction, a pedicab being followed by a Suzuki motorcycle
and a Honda motorcycle on which So and Castro were riding. Upon
approaching the curve on the highway, the bus swerved from its lane
and struck the Honda motorcycle. The motorcycle snagged onto the
left front fender of the bus and was dragged about 24 meters to the
right of the southbound lane. So had been thrown to the ground by the
time the bus finally stopped. Dayuday testified that he saw the accused
get off the bus with the conductor and the passengers but, instead of
assisting the victims, he casually walked away from the scene of the
accident.
Florencio Banico, on the other hand, was a passenger of the bus
driven by petitioner. He corroborated the testimony of Dayuday that the
bus hit the motorcycle while it was negotiating a curve on the highway
of Calag-Calag. He also stated in court that the accused left the scene
of the accident while the victims lay dying on the road. He heard Castro
shouting for help while So was unconscious. He testified that nobody
helped the victims.
The father of So testified that his son was 30 years old at the time of
his death and he was engaged in the buying and selling of copra. He
was likewise a sugar cane planter and maintained a sari-sari store.
So’s father claimed that his son was earning ₱30,000 a month from his
copra business and sari-sari store, and ₱50,000 a month from selling
sugar cane. He added that his family spent ₱87,200 2 for the wake and
funeral. He also demanded payment of attorney’s fees of ₱30,000.
The mother of Castro, on the other hand, testified that her son was 26
years old when he died. He worked as welder in Manila and earned
₱8,000 a month. She allegedly spent ₱30,000 for her son’s wake and
burial.
For the defense, SPO2 Dolger Germundo, SPO3 Hilbert Arinaza,
Roche Taburasa and the petitioner himself were called to the witness
stand.
SPO2 Germundo, a policeman, testified that he found the southbound
bus in its proper lane when he arrived at the site after the collision. He
did not see any tire or skid marks which meant that the point of impact
was at the center of the road, as stated by the prosecution witnesses.
In his sketch3 and photograph4 of the accident, the passenger bus and
the Honda motorcycle were at the outer part of the southbound lane,
which was the lane the bus was traversing at the time of the accident.
Due to the positions of the colliding vehicles, he concluded that it was
the motorcycle that rammed into the bus.
SPO3 Arinaza of the Philippine National Police testified that he was on
his way to Dumaguete City on board the bus driven by petitioner. At
the time of the accident, he was seated behind petitioner-driver and felt
the Honda motorcycle smash into the bus.
Taburasa, for his part, claimed he was the driver of the Suzuki
motorcycle So tried to overtake when they were both nearing the curve
on the highway of Calag-Calag. He claimed the collision occurred
because the Honda motorcycle overshot its lane in its attempt to
overtake him. He corroborated the declaration of SPO3 Arinaza that
So’s motorcycle hit the left front fender of the bus.
When petitioner (the accused) was called to the witness stand, he
denied the accusations against him. He testified that the Honda
motorcycle swerved out of its lane and veered towards the bus,
resulting in the collision. After the incident, he allegedly went down the
bus to aid the victims and even helped carry them into the vehicle that
brought them to a nearby hospital. He thereafter went to a police
station to report the incident.
The trial court gave no credence to the defense witnesses and
convicted petitioner of the crime charged. The dispositive part of the
decision read:
WHEREFORE, premises considered, this court finds accused,
ANTONIO VILLANUEVA NUEVA ESPAÑA, guilty beyond reasonable
doubt for the crime of RECKLESS IMPRUDENCE RESULTING TO
DOUBLE HOMICIDE, and aggravated by his failure to help the victim,
as provided for Article 365 of the Revised Penal Code, and
appreciating in his favor the benefits of the Indeterminate Sentence
Law, is hereby imposed the indeterminate penalty of SIX (6) MONTHS
of arresto mayor as minimum to SIX (6) YEARS AND ONE (1) DAY of
prision correcional as maximum, and to pay the following damages:
TO THE HEIRS OF THE VICTIM REYNARD SO
1) ₱2,997,000.00 – indemnity for loss of earning capacity of
victim
2) 14,200.00 – for expenses of the wake
3) 20,000.00 – for funeral parlor
4) 12,000.00 – for the tomb
5) 53,000.00 – for cost of burial site
6) 30,000.00 – for attorney’s fees
7) 200,000.00 – for moral damages
8) 100,000.00 – for exemplary damages
₱3,429,200.00 – TOTAL AMOUNT
which total amount shall bear interest at the rate of TWELVE (12%)
percent per annum from the date of this decision until the same is paid.
TO THE HEIRS OF VICTIM NILO CASTRO
1) ₱1,728,000.00 – indemnity for loss of earning capacity
2) 20,000.00 – for funeral expenses
3) 200,000.00 – for moral damages
4) 50,000.00 – for exemplary damages
₱1,998,000.00 – TOTAL AMOUNT
which total amount shall bear interest at the rate of TWELVE (12%)
percent per annum counted from the date of this decision until the
same is fully paid.
Cost against accused.
SO ORDERED.5
Via a petition for review, petitioner appealed the judgment of the court
a quo to the Court of Appeals. On November 2, 2003, the appellate
court modified the assailed judgment:
Consequently, the penalty imposed by the trial court is erroneous. The
appellant should suffer the indeterminate penalty of SIX (6) YEARS of
prision correcional, as minimum, to EIGHT (8) years of prision mayor,
as maximum.
As to the civil liability, particularly the indemnity for the loss of the
earning capacity of the victims, the formula last enunciated by the
Supreme Court is:
"Net earning capacity (x) = life x gross-living expenses
expectancy annual (50% of
gross annual income)"
Thusly, since the victim Reynard So was earning ₱80,000 a month at
the time of his death when he was thirty (30) years old, his lost earning
capacity should be computed as follows:
x =2 (80 ― 30) x
[₱96
0,000
3
.00
―
₱480
 ,000.
00]
x =33.4 x ₱480,000.00
x =₱16,032,000.00
With respect to the victim Nilo Castro, he was earning ₱8,000.00 a
month when he died at the age of twenty-six (26). His lost earnings
were:
x trial court and the Court of Appeals to award compensatory damages
[₱96,
2 (80 ― 26) 000.
00
x=
― actually established in this case, temperate damages in the amount of
3 ₱48,
000.
00]
x =36 x ₱48,000.00
x =₱1,728,000.00
which the trial court correctly computed.
The other items of damages awarded are correct.6
The appellate court likewise provided for the subsidiary liability of
petitioner’s employer under Article 103 7 of the Revised Penal Code.
The dispositive portion of the decision read:
WHEREFORE, the Decision appealed from is AFFIRMED, subject to
MODIFICATION as to the penalty imposed; the indemnity for loss of
earning capacity of the victim Reynard So; the reckoning date of the
start of the 12% interest imposed; and the subsidiary civil liability of the
accused appellant’s employer, all as herein-above indicated. Costs
against appellant.
SO ORDERED.8
In this appeal before us, petitioner insists that he should not be made
liable for the mishap as it was actually the Honda motorcycle that
rammed into the bus he was driving. He seeks the reversal of his
conviction for reckless imprudence resulting in double homicide. The
issues raised by him can be summarized as follows:
1. the ruling of the Court of Appeals is untenable and
contrary to law because the evidence of the prosecution is
incompatible with the physical evidence on record;
2. the award of damages in the (total) amount of more than
₱18 Million is untenable and contrary to jurisprudence and
law.9
On the first issue, the Court does not ordinarily pass upon the findings
of fact of the trial court, specially if they have been affirmed on appeal
by the appellate court. 10 The trial court was able to observe the
witnesses and their demeanor on the stand and was in a position to
scrutinize and discern whether they were telling the truth. 11 Without any
clear showing that the trial court and the appellate court overlooked,
misunderstood or misapplied some facts or circumstances of weight
and substance, the rule should not be disturbed. In the case at bar, we
see no reason to deviate from the rule. The Court is in full agreement
with the trial court and with the Court of Appeals regarding petitioner’s
liability for the crime charged against him.
On the second issue, however, we deem it necessary to modify the
award of damages given by the lower courts.
When death occurs due to a crime, the following damages may be
recovered: (1) a civil indemnity ex delicto for the death of the victim; (2)
actual or compensatory damages; (3) moral damages; (4) exemplary
damages; (5) attorney’s fees and expenses of litigation, and (6)
interest, in proper cases.
CIVIL INDEMNITY ex delicto
Both the trial court and the Court of Appeals failed to award civil
indemnity ex delicto to the heirs of the victims. The award for civil
indemnity is mandatory and is granted to the heirs of the victim without
need of proof other than the commission of the crime.12 Hence, based
on recent jurisprudence13, the award of civil indemnity ex delicto of
₱50,000 each for the heirs of both So and Castro is in order.
ACTUAL DAMAGES: INDEMNITY FOR LOSS OF EARNING
CAPACITY AND OTHER COMPENSATORY DAMAGES
With respect to indemnification for loss of earning capacity, the Court,
in the case of People vs. Mallari,14 enunciated:
The rule is that documentary evidence should be presented to
substantiate a claim for loss of earning capacity. By way of exception,
damages therefore may be awarded despite the absence of
documentary evidence if there is testimony that the victim was either
(1) self-employed, earning less than the minimum wage under current
labor laws, and judicial notice is taken of the fact that in the victim's line
of work, no documentary evidence is available; or (2) employed as a
daily-wage worker earning less than the minimum wage under current
labor laws.15
In this case, neither of the two exceptions applied. The earnings of So
and Castro were both above the minimum wage set by labor laws in
their respective workplaces at the time of their death. 16 This being the
case, the general rule of requiring documentary evidence of their
earning capacities finds application. Unfortunately for their heirs, no
such proof was presented at all. It was therefore erroneous for both the
for loss of earning capacity on the basis alone of the oral testimonies of
So’s father and Castro’s mother.
The lack of documentary evidence notwithstanding, since loss was
₱25,000 each may be awarded to the heirs of So and Castro,
respectively. Under Article 2224 of the Civil Code, temperate or
moderate damages (which are more than nominal but less than
compensatory damages) may be recovered when the court finds that
some pecuniary loss was suffered but its amount cannot be proved
with certainty.17
With respect to other compensatory damages, 18 the Court in People v.
Agudez19 declared that competent evidence must likewise be
presented to support the claim for such damages. In the case at bar,
the father of So claimed that he spent ₱87,200 20 for the wake and
burial of his son but all he was able to support with receipts were the
payment to the funeral parlor of ₱20,000 and the cost of the burial site
of ₱53,000.21
Regarding the claim for reimbursement of the actual expense allegedly
incurred by the mother of Castro, the Court opts to award her
temperate damages, in lieu of actual or compensatory damages,
because she failed to submit any evidence in support thereof. Again,
temperate damages should instead be given since it was to be
expected that she spent for the burial and funeral services although the
amount thereof was not determined with certitude.22
MORAL DAMAGES
The award for moral damages by the court a quo, as affirmed by the
Court of Appeals, should be adjusted for being excessive. While courts
have a wide latitude in ascertaining the proper award for moral
damages, the award should not be to such an extent that it inflicts
injustice on the accused. The award of ₱200,000 as moral damages
each for the heirs of So and Castro, respectively, should accordingly
be reduced to ₱50,000.23
EXEMPLARY DAMAGES
Under Article 2230 of the Civil Code, exemplary damages may also be
imposed when the crime was committed with one or more aggravating
circumstances. Here, petitioner failed to render aid or assistance to his
victims after the collision. 24 Based on the prevailing jurisprudence, the
award for exemplary damages for homicide is ₱25,000.25
ATTORNEY’S FEES
We affirm the award of ₱30, 000 for attorney’s fees made by the trial
court and the appellate court. Under Article 2208 of the Civil Code,
attorney’s fees and expenses of litigation may be recovered when
exemplary damages have been awarded, as in this case.
SUMMARY
To summarize, the heirs of the deceased Reynard So are entitled to
the following:
civil
inde
mnit
₱ 50,000 -
y ex
delic
to
actu
al
73,000 -
dam
ages
temp
erat
e
25,000 -
dam
ages
26
mor
al
50,000 -
dam
ages
25,000 - exe

30,000 -
₱ 253,000 -
The heirs of Nilo Castro are also entitled to the following:
₱ 50,000 -
50,000 -
50,000 -
25,000 -
30,000 -
₱ 205,000 -
SUBSIDIARY LIABILITY
We adopt the pronouncement of the Court of Appeals regarding the
subsidiary liability of petitioner’s employer, Vallacar Transit Inc., under
Article 103 of the Revised Penal Code. An employer may be
subsidiarily liable for the employee’s civil liability in the criminal action if
it can be shown that: (1) the employer is engaged in any kind of
industry; (2) the employee committed the offense in the discharge of
his duties and (3) the accused is insolvent. 28 However, subject to
prevailing jurisprudence,29 the subsidiary liability may be enforced only
upon a motion for subsidiary writ of execution against Vallacar Transit,
Inc. and upon proof that petitioner is insolvent.
IMPRISONMENT
Lastly, we are also constrained to amend the penalty imposed by the
Court of Appeals. The imposable penalty, under Article 365 (2) of the
Revised Penal Code for homicide resulting from reckless imprudence
in the use of the motor vehicle is prision correcional in its medium and
maximum period, which ranges from 2 years, 4 months and 1 day to 6
years.
Under Article 64 of the same law, the penalty shall be divided into three
equal portions, each of which shall form one period. The offense
having been attended by one aggravating circumstance premised on
the failure of petitioner to aid his victims, the penalty shall be increased
but it cannot exceed the penalty provided by law in its maximum
period.30 Applying the provisions of the Indeterminate Sentence Law,
the petitioner is thus entitled to a minimum term to be taken from the
penalty next lower in degree, which is arresto mayor in any of its
periods, to prision correcional maximum. Accordingly, petitioner should
suffer the penalty of 2 years, 4 months and 1 day of arresto mayor, as
minimum, to 6 years of prision correcional, as maximum.
WHEREFORE, the decision appealed from is AFFIRMED with
MODIFICATIONS as to the award of damages and the penalty
imposed, as already discussed. The total amount of damages shall
bear interest at the rate of 12% per annum from the finality of this
decision.
Costs against petitioner.
mpla SO ORDERED.
ry
dam PABLITO MURAO and NELIO HUERTAZUELA, petitioners,.
ages vs.
PEOPLE OF THE PHILIPPINES, respondent.
attor
DECISION
ney’
CHICO-NAZARIO, J.:
s In this Petition for Review on Certiorari under Rule 45 of the Rules of
fees Court, petitioners pray for the reversal of the Decision of the Court of
TOT Appeals in CA-G.R. CR No. 21134, dated 31 May 1999, 1 affirming with
AL modification the Judgment of the Regional Trial Court (RTC) of Puerto
Princesa City, Palawan, in Criminal Case No. 11943, dated 05 May
1997,2 finding petitioners guilty beyond reasonable doubt of the crime
civil of estafa under Article 315(1)(b) of the Revised Penal Code.
inde Petitioner Pablito Murao is the sole owner of Lorna Murao Industrial
mnit Commercial Enterprises (LMICE), a company engaged in the business
y ex of selling and refilling fire extinguishers, with branches in Palawan,
delic Naga, Legaspi, Mindoro, Aurora, Quezon, Isabela, and Laguna.
to Petitioner Nelio Huertazuela is the Branch Manager of LMICE in Puerto
temp Princesa City, Palawan.3
erat On 01 September 1994, petitioner Murao and private complainant
e Chito Federico entered into a Dealership Agreement for the marketing,
distribution, and refilling of fire extinguishers within Puerto Princesa
dam
City.4 According to the Dealership Agreement, private complainant
ages
27 Federico, as a dealer for LMICE, could obtain fire extinguishers from
LMICE at a 50% discount, provided that he sets up his own sales
mor force, acquires and issues his own sales invoice, and posts a bond
al with LMICE as security for the credit line extended to him by LMICE.
dam Failing to comply with the conditions under the said Dealership
ages Agreement, private complainant Federico, nonetheless, was still
exe allowed to act as a part-time sales agent for LMICE entitled to a
mpla percentage commission from the sales of fire extinguishers.5
ry The amount of private complainant Federico’s commission as sales
dam agent for LMICE was under contention. Private complainant Federico
claimed that he was entitled to a commission equivalent to 50% of the
ages
gross sales he had made on behalf of LMICE, 6 while petitioners
attor maintained that he should receive only 30% of the net sales.
ney’ Petitioners even contended that as company policy, part-time sales
s agents were entitled to a commission of only 25% of the net sales, but
fees since private complainant Federico helped in establishing the LMICE
branch office in Puerto Princesa City, he was to receive the same
TOT
commission as the full-time sales agents of LMICE, which was 30% of
AL the net sales.7
Private complainant Federico’s first successful transaction as sales
agent of LMICE involved two fire extinguishers sold to Landbank of the
Philippines (Landbank), Puerto Princesa City Branch, for the price of
₱7,200.00. Landbank issued a check, dated 08 November 1993, pay to
the order of "L.M. Industrial Comm’l. Enterprises c/o Chito Federico,"
for the amount of ₱5,936.40, 8 after deducting from the original sales
price the 15% discount granted by private complainant Federico to
Landbank and the 3% withholding tax. Private complainant Federico
encashed the check at Landbank and remitted only ₱2,436.40 to
LMICE, while he kept ₱3,500.00 for himself as his commission from
the sale.9
Petitioners alleged that it was contrary to the standard operating
procedure of LMICE that private complainant Federico was named
payee of the Landbank check on behalf of LMICE, and that private
complainant Federico was not authorized to encash the said check.
Despite the supposed irregularities committed by private complainant
Federico in the collection of the payment from Landbank and in the
premature withholding of his commission from the said payment,
petitioners forgave private complainant Federico because the latter
promised to make-up for his misdeeds in the next transaction.10
Private complainant Federico, on behalf of LMICE, subsequently
facilitated a transaction with the City Government of Puerto Princesa
for the refill of 202 fire extinguishers. Because of the considerable cost,
the City Government of Puerto Princesa requested that the transaction
be split into two purchase orders, and the City Government of Puerto
Princesa shall pay for each of the purchase orders separately. 11
Pursuant to the two purchase orders, LMICE refilled and delivered all
202 fire extinguishers to the City Government of Puerto Princesa: 154
units on 06 January 1994, 43 more units on 12 January 1994, and the
last five units on 13 January 1994. 12
The subject of this Petition is limited to the first purchase order,
Purchase Order No. GSO-856, dated 03 January 1994, for the refill of
99 fire extinguishers, with a total cost of ₱309,000.00. 13 On 16 June
1994, the City Government of Puerto Princesa issued Check No.
611437 to LMICE to pay for Purchase Order No. GSO-856, in the
amount of ₱300,572.73, net of the 3% withholding tax. 14 Within the
same day, petitioner Huertazuela claimed Check No. 611437 from the
City Government of Puerto Princesa and deposited it under the current
account of LMICE with PCIBank. 15
On 17 June 1994, private complainant Federico went to see petitioner
Huertazuela at the LMICE branch office in Puerto Princesa City to
demand for the amount of ₱154,500.00 as his commission from the
payment of Purchase Order No. GSO-856 by the City Government of
Puerto Princesa. Petitioner Huertazuela, however, refused to pay
private complainant Federico his commission since the two of them
could not agree on the proper amount thereof.16
Also on 17 June 1994, private complainant Federico went to the police
station to file an Affidavit-Complaint for estafa against petitioners. 17
Petitioners submitted their Joint Counter-Affidavit on 12 July 1994. 18
The City Prosecution Office of Puerto Princesa City issued a
Resolution, dated 15 August 1994, finding that a prima facie case for
estafa existed against the petitioners and recommending the filing of
an information for estafa against both of them.19
The Information, docketed as Criminal Case No. 11943 and raffled to
the RTC of Puerto Princesa City, Palawan, Branch 52, reads as follows
– the accused is indubitably indicated by their refusal to pay Chito
INFORMATION
The undersigned accuses PABLITO MURAO and NELIO C.
HUERTAZUELA of the crime of ESTAFA, committed as follows:
That on or about the 16th day of June, 1994, at Puerto Princesa City,
Philippines, and within the jurisdiction of this Honorable Court, the said
accused, conspiring and confederating together and mutually helping
one another, after having received the amount of ₱309,000.00 as
payment of the 99 tanks of refilled fire extinguisher (sic) from the City
Government of Puerto Princesa, through deceit, fraud and
misrepresentation, did then and there willfully, unlawfully and
feloniously defraud one Chito Federico in the following manner, to wit:
said accused, well knowing that Chito Federico agent of LM Industrial
Commercial Enterprises is entitled to 50% commission of the gross
sales as per their Dealership Contract or the amount of ₱154,500.00
as his commission for his sale of 99 refilled fire extinguishers worth
₱309,000.00, and accused once in possession of said amount of
₱309,000.00 misappropriate, misapply and convert the amount of
₱154,500.00 for their own personal use and benefit and despite
repeated demands made upon them by complainant to deliver the
amount of ₱154,500.00, accused failed and refused and still fails and
refuses to do so, to the damage and prejudice of said Chito Federico in
the amount of ₱154,500.00, Philippine Currency.20
After holding trial, the RTC rendered its Judgment on 05 May 1997
finding petitioners guilty beyond reasonable doubt as co-principals of
the crime of estafa defined and penalized in Article 315(1)(b) of the
Revised Penal Code. Estafa, under the said provision, is committed by
– modifying the sentence imposed on the petitioners. The dispositive
ART. 315. Swindling (estafa). – Any person who shall defraud another
by any of the means mentioned hereinbelow . . .
1. With unfaithfulness or abuse of confidence, namely:
(a) …
(b) By misappropriating or converting, to the prejudice of
another, money, goods, or any other personal property
received by the offender in trust or on commission, or for
administration, or under any other obligation involving the
duty to make delivery of or to return the same, even though
such obligation be totally or partially guaranteed by a bond;
or by denying having received such money, goods, or other
property; . . .
In the same Judgment, the RTC expounded on its finding of guilt, thus
– May 1999 –
For the afore-quoted provision of the Revised Penal Code to be
committed, the following requisites must concur:
1. That money, goods or other personal property be received
by the offender in trust, or on commission, or for
administration, or under any other obligation involving the
duty to make delivery of, or to return, the same;
2. That there be misappropriation or conversion of such
money or property by the offender, or denial on his part of
such receipt;
3. That such misappropriation or conversion or denial is to
the prejudice of another; and
4. That there is demand made by the offended party to the
offender. (Reyes, Revised Penal Code of the Philippines, p.
716; Manuel Manahan, Jr. vs. Court of Appeals, Et Al., G.R.
No. 111656, March 20, 1996)
All the foregoing elements are present in this case. The aborted
testimony of Mrs. Norma Dacuan, Cashier III of the Treasurer’s Office
of the City of Puerto Princesa established the fact that indeed, on June
16, 1994, co-accused Nelio Huertazuela took delivery of Check No.
611437 with face value of ₱300,572.73, representing payment for the
refill of 99 cylinders of fire extinguishers. Although the relationship
between complaining witness Chito Federico and LMIC is not fiduciary
in nature, still the clause "any other obligation involving the duty to
make delivery of or to return" personal property is broad enough to
include a "civil obligation" (Manahan vs. C.A., Et. Al., Mar. 20, 1996).
The second element cannot be gainsaid. Both Pablito Murao and Nelio
Huertazuela categorically admitted that they did not give to Chito
Federico his commission. Instead, they deposited the full amount of the
consideration, with the PCIBank in the Current Account of LMIC.
…
The refusal by the accused to give Chito Federico what ever
percentage his commission necessarily caused him prejudice which
constitute the third element of estafa. Demand for payment, although
not an essential element of estafa was nonetheless made by the
complainant but was rebuffed by the accused. The fraudulent intent by
Federico any percentage of the gross sales as commission. If it were
true that what the dealer/sales Agent is entitled to by way of
commission is only 30% of the gross sales, then by all means the
accused should have paid Chito Federico 30%. If he refused, they
could have it deposited in his name. In that way they may not be said
to have misappropriated for themselves what pertained to their Agent
by way of commission.
…
WHEREFORE, premises considered judgment is hereby rendered
finding the accused PABLITO MURAO and NELIO HUERTAZUELA
guilty beyond reasonable doubt as co-principals, of the crime of estafa
defined and penalized in Article 315 par. 1(b) of the Revised Penal
Code, and applying the provisions of the Indeterminate Sentence Law,
both accused are hereby sentenced to an indeterminate penalty
ranging from a minimum of TWO (2) YEARS, FOUR (4) MONTHS and
ONE (1) DAY of prision correccional in its medium period, to a
maximum of TWENTY (20) YEARS of reclusion temporal in its
maximum period; to pay Chito Federico, jointly and severally:
a. Sales Commission equivalent to
50% of ₱309,000.00 or ------------------- ₱154,500.00
with legal interest thereon from
June 17, 1994 until fully paid;
b. Attorney’s fees ---------------------------- ₱ 30,0000.00.21
Resolving the appeal filed by the petitioners before it, the Court of
Appeals, in its Decision, dated 31 May 1999, affirmed the
aforementioned RTC Judgment, finding petitioners guilty of estafa, but
portion of the Decision of the Court of Appeals reads –
WHEREFORE, the appealed decision is hereby AFFIRMED with the
MODIFICATION that appellants PABLITO MURAO and NELIO
HUERTAZUELA are hereby each sentenced to an indeterminate
penalty of eight (8) years and One (1) day of prision mayor, as
minimum, to Twenty (20) years of reclusion temporal, as maximum.
The award for attorney’s fee of ₱30,000.00 is deleted because the
prosecution of criminal action is the task of the State prosecutors. All
other aspects of the appealed decision are maintained.22
When the Court of Appeals, in its Resolution, dated 19 January 2000, 23
denied their Motion for Reconsideration, petitioners filed the present
Petition for Review24 before this Court, raising the following errors
allegedly committed by the Court of Appeals in its Decision, dated 31
I
WITH DUE RESPECT, THE HONORABLE COURT OF APPEALS
GRAVELY ERRED WHEN IT RULED THAT PETITIONERS ARE
LIABLE FOR ESTAFA UNDER ARTICLE 315 1(B) OF THE REVISED
PENAL CODE UNDER THE FOREGOING SET OF FACTS, WHEN IT
IS CLEAR FROM THE SAID UNDISPUTED FACTS THAT THE
LIABILITY IS CIVIL IN NATURE.
II
WITH DUE RESPECT, THE HONORABLE COURT ERRED WHEN IT
UPHOLD (sic) PRIVATE COMPLAINANT’S CLAIM THAT HE IS
ENTITLED TO A FIFTY (50%) PERCENT COMMISSION WITHOUT
EVIDENCE TO SUPPORT SUCH CLAIM.
This Court finds the instant Petition impressed with merit. Absent
herein are two essential elements of the crime of estafa by
misappropriation or conversion under Article 315(1)(b) of the Revised
Penal Code, namely: (1) That money, goods or other personal property
be received by the offender in trust, or on commission, or for
administration, or under any other obligation involving the duty to make
delivery of, or to return, the same; and (2) That there be a
misappropriation or conversion of such money or property by the
offender.
The findings of the RTC and the Court of Appeals that petitioners
committed estafa rest on the erroneous belief that private complainant
Federico, due to his right to commission, already owned 50% of the
amount paid by the City Government of Puerto Princesa to LMICE by
virtue of Check No. 611437, so that the collection and deposit of the
said check by petitioners under the account of LMICE constituted
misappropriation or conversion of private complainant Federico’s
commission.
However, his right to a commission does not make private
complainant Federico a joint owner of the money paid to LMICE by
the City Government of Puerto Princesa, but merely establishes the
relation of agent and principal. 25 It is unequivocal that an agency
existed between LMICE and private complainant Federico. Article 1868
of the Civil Code defines agency as a special contract whereby "a
person binds himself to render some service or to do something in
representation or on behalf of another, with the consent or authority of
the latter." Although private complainant Federico never had the
opportunity to operate as a dealer for LMICE under the terms of the
Dealership Agreement, he was allowed to act as a sales agent for
LMICE. He can negotiate for and on behalf of LMICE for the refill and
delivery of fire extinguishers, which he, in fact, did on two occasions –
with Landbank and with the City Government of Puerto Princesa.
Unlike the Dealership Agreement, however, the agreement that private
complainant Federico may act as sales agent of LMICE was based on
an oral agreement.26
As a sales agent, private complainant Federico entered into
negotiations with prospective clients for and on behalf of his principal,
LMICE. When negotiations for the sale or refill of fire extinguishers
were successful, private complainant Federico prepared the necessary
documentation. Purchase orders, invoices, and receipts were all in the
name of LMICE. It was LMICE who had the primary duty of picking up
the empty fire extinguishers, filling them up, and delivering the refilled
tanks to the clients, even though private complainant Federico
personally helped in hauling and carrying the fire extinguishers during
pick-up from and delivery to clients.
All profits made and any advantage gained by an agent in the
execution of his agency should belong to the principal. 27 In the instant
case, whether the transactions negotiated by the sales agent were for
the sale of brand new fire extinguishers or for the refill of empty tanks,
evidently, the business belonged to LMICE. Consequently, payments
made by clients for the fire extinguishers pertained to LMICE. When
petitioner Huertazuela, as the Branch Manager of LMICE in Puerto
Princesa City, with the permission of petitioner Murao, the sole
proprietor of LMICE, personally picked up Check No. 611437 from the
City Government of Puerto Princesa, and deposited the same under
the Current Account of LMICE with PCIBank, he was merely collecting
what rightfully belonged to LMICE. Indeed, Check No. 611437 named
LMICE as the lone payee. Private complainant Federico may claim
commission, allegedly equivalent to 50% of the payment received by
LMICE from the City Government of Puerto Princesa, based on his
right to just compensation under his agency contract with LMICE, 28 but
not as the automatic owner of the 50% portion of the said payment.
Since LMICE is the lawful owner of the entire proceeds of the check
payment from the City Government of Puerto Princesa, then the
petitioners who collected the payment on behalf of LMICE did not
receive the same or any part thereof in trust, or on commission, or for
administration, or under any other obligation involving the duty to make
delivery of, or to return, the same to private complainant Federico,
thus, the RTC correctly found that no fiduciary relationship existed
between petitioners and private complainant Federico. A fiduciary
relationship between the complainant and the accused is an essential
element of estafa by misappropriation or conversion, without which the
accused could not have committed estafa. 29
The RTC used the case of Manahan, Jr. v. Court of Appeals 30 to
support its position that even in the absence of a fiduciary relationship,
the petitioners still had the civil obligation to return and deliver to
private complainant Federico his commission. The RTC failed to
discern the substantial differences in the factual background of the
Manahan case from the present Petition. The Manahan case involved
the lease of a dump truck. Although a contract of lease may not be
fiduciary in character, the lessee clearly had the civil obligation to
return the truck to the lessor at the end of the lease period; and failure
of the lessee to return the truck as provided for in the contract may
constitute estafa. The phrase "or any other obligation involving the duty
to make delivery of, or to return the same" refers to contracts of
bailment, such as, contract of lease of personal property, contract of
deposit, and commodatum, wherein juridical possession of the thing
was transferred to the lessee, depositary or borrower, and wherein the
latter is obligated to return the same thing. 31
In contrast, the current Petition concerns an agency contract whereby
the principal already received payment from the client but refused to
give the sales agent, who negotiated the sale, his commission. As has
been established by this Court in the foregoing paragraphs, LMICE had
a right to the full amount paid by the City Government of Puerto
Princesa. Since LMICE, through petitioners, directly collected the
payment, then it was already in possession of the amount, and no
transfer of juridical possession thereof was involved herein. Given that
private complainant Federico could not claim ownership over the said
payment or any portion thereof, LMICE had nothing at all to deliver and
return to him. The obligation of LMICE to pay private complainant
Federico his commission does not arise from any duty to deliver or
return the money to its supposed owner, but rather from the duty of a
principal to give just compensation to its agent for the services
rendered by the latter.
Furthermore, the Court of Appeals, in its Decision, dated 31 May 1999,
defined the words "convert" and "misappropriate" in the following
manner –
The High Court in Saddul v. Court of Appeals [192 SCRA 277]
enunciated that the words "convert" and "misappropriate" in the crime
of estafa punished under Art. 315, par. 1(b) connote an act of using or
disposing of another’s property as if it were one’s own, or if devoting it
to a purpose or use different from that agreed upon. To misappropriate
to one’s use includes, not only conversion to one’s personal
advantage, but also every attempt to dispose of the property of another
without right.32
Based on the very same definition, this Court finds that petitioners did
not convert nor misappropriate the proceeds from Check No. 611437
because the same belonged to LMICE, and was not "another’s
property." Petitioners collected the said check from the City
Government of Puerto Princesa and deposited the same under the
Current Account of LMICE with PCIBank. Since the money was
already with its owner, LMICE, it could not be said that the same had
been converted or misappropriated for one could not very well
fraudulently appropriate to himself money that is his own.33
Although petitioners’ refusal to pay private complainant Federico his
commission caused prejudice or damage to the latter, said act does
not constitute a crime, particularly estafa by conversion or
misappropriation punishable under Article 315(1)(b) of the Revised
Penal Code. Without the essential elements for the commission
thereof, petitioners cannot be deemed to have committed the crime.
While petitioners may have no criminal liability, petitioners themselves
admit their civil liability to the private complainant Federico for the
latter’s commission from the sale, whether it be 30% of the net sales or
50% of the gross sales. However, this Court is precluded from making
a determination and an award of the civil liability for the reason that the
said civil liability of petitioners to pay private complainant Federico his
commission arises from a violation of the agency contract and not from
a criminal act.34 It would be improper and unwarranted for this Court to
impose in a criminal action the civil liability arising from a civil contract,
which should have been the subject of a separate and independent
civil action.35
WHEREFORE, the assailed Decision of the Court of Appeals in CA-
G.R. CR No. 21134, dated 31 May 1999, affirming with modification the
Judgment of the RTC of Puerto Princesa City, Palawan, in Criminal
Case No. 11943, dated 05 May 1997, finding petitioners guilty beyond
reasonable doubt of estafa by conversion or misappropriation under
Article 315(1)(b) of the Revised Penal Code, and awarding the amount
of ₱154,500.00 as sales commission to private complainant Federico,
is hereby REVERSED and SET ASIDE. A new Judgment is hereby
entered ACQUITTING petitioners based on the foregoing findings of
this Court that their actions did not constitute the crime of estafa by
conversion or misappropriation under Article 315(1)(b) of the Revised
Penal Code. The cash bonds posted by the petitioners for their
provisional liberty are hereby ordered RELEASED and the amounts
thereof RETURNED to the petitioners, subject to the usual accounting
and auditing procedures.
SO ORDERED.
RAFAEL JOSE-CONSING, JR., Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
BERSAMIN, J.:
An independent civil action based on fraud initiated by the defrauded
party does not raise a prejudicial question to stop the proceedings in a
pending criminal prosecution of the defendant for estafa through
falsification. This is because the result of the independent civil action is
irrelevant to the issue of guilt or innocence of the accused.
The Case
On appeal is the amended decision promulgated on August 18, 2003, 1
whereby the Court of Appeals (CA) granted the writ of certiorari upon
petition by the State in C.A.-G.R. No. 71252 entitled People v. Han.
Winlove M Dumayas, Presiding Judge, Branch 59, Regional Trial
Court, Makati City and Rafael Consing, Jr., and set aside the assailed
order issued on November 26, 2001 by the Regional Trial Court (RTC),
Branch 59, in Makati City deferring the arraignment of petitioner in
Criminal Case No. 00-120 entitled People v. Rafael Consing, Jr. upon
his motion on the ground of the existence of a prejudicial question in
the civil cases pending between him and the complainant in the trial
courts in Pasig City and Makati City.
Antecedents
Petitioner negotiated with and obtained for himself and his mother,
Cecilia de la Cruz (de la Cruz) various loans totaling ₱18,000,000.00
from Unicapital Inc. (Unicapital). The loans were secured by a real
estate mortgage constituted on a parcel of land (property) covered by
Transfer Certificate of Title (TCT) No. T-687599 of the Registry of
Deeds for the Province of Cavite registered under the name of de la
Cruz.2 In accordance with its option to purchase the mortgaged
property, Unicapital agreed to purchase one-half of the property for a
total consideration of ₱21,221,500.00. Payment was effected by off-
setting the amounts due to
Unicapital under the promissory notes of de la Cruz and Consing in the
amount of ₱18,000,000.00 and paying an additional amount of
₱3,145,946.50. The other half of the property was purchased by Plus
Builders, Inc. (Plus Builders), a joint venture partner of Unicapital. 3
Before Unicapital and Plus Builders could develop the property, they
learned that the title to the property was really TCT No. 114708 in the
names of Po Willie Yu and Juanito Tan Teng, the parties from whom
the property had been allegedly acquired by de la Cruz. TCT No.
687599 held by De la Cruz appeared to be spurious.4
On its part, Unicapital demanded the return of the total amount of
₱41,377,851.48 as of April 19, 1999 that had been paid to and
received by de la Cruz and Consing, but the latter ignored the
demands.5
On July 22, 1999, Consing filed Civil Case No. 1759 in the Pasig City
Regional Trial Court (RTC) (Pasig civil case) for injunctive relief,
thereby seeking to enjoin Unicapital from proceeding against him for
the collection of the ₱41,377,851.48 on the ground that he had acted
as a mere agent of his mother.
On the same date, Unicapital initiated a criminal complaint for estafa
through falsification of public document against Consing and de la Cruz
in the Makati City Prosecutor’s Office.6
On August 6, 1999, Unicapital sued Consing in the RTC in Makati City
(Civil Case No. 99-1418) for the recovery of a sum of money and
damages, with an application for a writ of preliminary attachment
(Makati civil case).7
On January 27, 2000, the Office of the City Prosecutor of Makati City
filed against Consing and De la Cruz an information for estafa through
falsification of public document in the RTC in Makati City (Criminal
Case No. 00-120), which was assigned to Branch 60 (Makati criminal
case).8
On February 15, 2001, Consing moved to defer his arraignment in the
Makati criminal case on the ground of existence of a prejudicial
question due to the pendency of the Pasig and Makati civil cases. On
September 25, 2001, Consing reiterated his motion for deferment of his
arraignment, citing the additional ground of pendency of CA-G.R. SP
No. 63712 in the CA. On November 19, 2001, the Prosecution
opposed the motion.9
On November 26, 2001, the RTC issued an order suspending the
proceedings in the Makati criminal case on the ground of the existence
of a prejudicial question, and on March 18, 2001, the RTC denied the
Prosecution’s motion for reconsideration.10
The State thus assailed in the CA the last two orders of the RTC in the
Makati criminal case via petition for certiorari (C.A.-G.R. SP No.
71252).
On May 20, 2003, the CA promulgated its decision in C.A.-G.R. SP No.
71252,11 dismissing the petition for certiorari and upholding the RTC’s
questioned orders, explaining:
Is the resolution of the Pasig civil case prejudicial to the Cavite and
Makati criminal cases?
We hold that it is. The resolution of the issue in the Pasig case, i.e.
whether or not private respondent may be held liable in the questioned
transaction, will determine the guilt or innocence of private respondent
Consing in both the Cavite and Makati criminal cases.
The analysis and comparison of the Pasig civil case, Makati criminal
case, Makati civil case and Cavite criminal case show that: (1) the
parties are identical; (2) the transactions in controversy are identical;
(3) the Transfer Certificate of Titles (TCT) involved are identical; (4) the
questioned Deeds of Sale/Mortgage are identical; (5) the dates in
question are identical; and (6) the issue of private respondent’s
culpability for the questioned transactions is identical in all the
proceedings.
As discussed earlier, not only was the issue raised in the Pasig civil
case identical to or intimately related to the criminal cases in Cavite
and Makati. The similarities also extend to the parties in the cases and
the TCT and Deed of Sale/ Mortgage involved in the questioned
transactions.
The respondent Judge, in ordering the suspension of the arraignment
of private respondent in the Makati case, in view of CA-G.R. SP No.
63712, where Unicapital was not a party thereto, did so pursuant to its
mandatory power to take judicial notice of an official act of another
judicial authority. It was also a better legal tack to prevent multiplicity of
action, to which our legal system abhors.
Applying the Tuanda ruling, the pendency of CA-G.R. SP No. 63712
may be validly invoked to suspend private respondent’s arraignment in
the Makati City criminal case, notwithstanding the fact that CA-G.R. SP
No. 63712 was an offshoot, merely, in the Cavite criminal case.12
In the meanwhile, on October 13, 1999, Plus Builders commenced its
own suit for damages against Consing (Civil Case No. 99-95381) in the
RTC in Manila (Manila civil case).13
On January 21, 2000, an information for estafa through falsification of
public document was filed against Consing and De la Cruz in the RTC
in Imus, Cavite, docketed as Criminal Case No. 7668-00 and assigned
to Branch 21 (Cavite criminal case). Consing filed a motion to defer the
arraignment on the ground of the existence of a prejudicial question,
i.e., the pendency of the Pasig and Manila civil cases. On January 27,
2000, however, the RTC handling the Cavite criminal case denied
Consing’s motion. Later on, it also denied his motion for
reconsideration. Thereafter, Consing commenced in the CA a special
civil action for certiorari with prayer for the issuance of a temporary
restraining order (TRO) and/or writ of preliminary injunction (C.A.-G.R.
SP No. 63712), seeking to enjoin his arraignment and trial in the Cavite
criminal case. The CA granted the TRO on March 19, 2001, and later
promulgated its decision on May 31, 2001, granting Consing’ petition
for certiorari and setting aside the January 27, 2000 order of the RTC,
and permanently enjoining the RTC from proceeding with the
arraignment and trial until the Pasig and Manila civil cases had been
finally decided.
Not satisfied, the State assailed the decision of the CA in this Court
(G.R. No. 148193), praying for the reversal of the May 31, 2001
decision of the CA. On January 16, 2003, the Court granted the petition
for review in G.R. No. 148193, and reversed and set aside the May 31,
2001 decision of the CA,14 viz:
In the case at bar, we find no prejudicial question that would justify the
suspension of the proceedings in the criminal case (the Cavite criminal
case). The issue in Civil Case No. SCA 1759 (the Pasig civil case) for
Injunctive Relief is whether or not respondent (Consing) merely acted
as an agent of his mother, Cecilia de la Cruz; while in Civil Case No.
99-95381 (the Manila civil case), for Damages and Attachment, the
question is whether respondent and his mother are liable to pay
damages and to return the amount paid by PBI for the purchase of the
disputed lot. Even if respondent is declared merely an agent of his
mother in the transaction involving the sale of the questioned lot, he
cannot be adjudged free from criminal liability. An agent or any person
may be held liable for conspiring to falsify public documents. Hence,
the determination of the issue involved in Civil Case No. SCA 1759 for
Injunctive Relief is irrelevant to the guilt or innocence of the respondent
in the criminal case for estafa through falsification of public document.
Likewise, the resolution of PBI’s right to be paid damages and the
purchase price of the lot in question will not be determinative of the
culpability of the respondent in the criminal case for even if PBI is held
entitled to the return of the purchase price plus damages, it does not
ipso facto follow that respondent should be held guilty of estafa through
falsification of public document. Stated differently, a ruling of the court
in the civil case that PBI should not be paid the purchase price plus
damages will not necessarily absolve respondent of liability in the
criminal case where his guilt may still be established under penal laws
as determined by other evidence.
Moreover, neither is there a prejudicial question if the civil and the
criminal action can, according to law, proceed independently of each
other. Under Rule 111, Section 3 of the Revised Rules on Criminal
Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the
Civil Code, the independent civil action may be brought by the
offended party. It shall proceed independently of the criminal action
and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the same
act or omission charged in the criminal action.
Thus, in Rojas v. People, the petitioner was accused in a criminal case
for violation of Article 319 of the Revised Penal Code, for executing a
new chattel mortgage on personal property in favor of another party
without consent of the previous mortgagee. Thereafter, the offended
party filed a civil case for termination of management contract, one of
the causes of action of which consisted of petitioner having executed a
chattel mortgage while the previous chattel mortgage was still valid and
subsisting. Petitioner moved that the arraignment and trial of the
criminal case be held in abeyance on the ground that the civil case was
a prejudicial question, the resolution of which was necessary before
the criminal proceedings could proceed. The trial court denied the
suspension of the criminal case on the ground that no prejudicial
question exist. We affirmed the order of the trial court and ruled that:
… the resolution of the liability of the defendant in the civil case on the
eleventh cause of action based on the fraudulent misrepresentation
that the chattel mortgage the defendant executed in favor of the said
CMS Estate, Inc. on February 20, 1957, that his D-6 "Caterpillar"
Tractor with Serial No. 9-U-6565 was "free from all liens and
encumbrances" will not determine the criminal liability of the accused in
the said Criminal Case No. 56042 for violation of paragraph 2 of Article
319 of the Revised Penal Code. . . . (i) That, even granting for the sake
of argument, a prejudicial question is involved in this case, the fact
remains that both the crime charged in the information in the criminal
case and the eleventh cause of action in the civil case are based upon
fraud, hence both the civil and criminal cases could proceed
independently of the other pursuant to Article 33 of the new Civil Code
which provides: "In cases of defamation, fraud and physical injuries, a
civil action for damages, entirely separate and distinct from the criminal
action shall proceed independently of the criminal prosecution, and
shall require only a preponderance of evidence." (j) That, therefore, the
act of respondent judge in issuing the orders referred to in the instant
petition was not made with "grave abuse of discretion."
In the instant case, Civil Case No. 99-95381, for Damages and
Attachment on account of the alleged fraud committed by respondent
and his mother in selling the disputed lot to PBI is an independent civil
action under Article 33 of the Civil Code. As such, it will not operate as
a prejudicial question that will justify the suspension of the criminal
case at bar.15
Turning back to the Makati criminal case, the State moved for the
reconsideration of the adverse decision of the CA, citing the ruling in
G.R. No. 148193, supra, to the effect that the Pasig and Manila civil
cases did not present a prejudicial question that justified the
suspension of the proceedings in the Cavite criminal case, and
claiming that under the ruling in G.R. No. 148193, the Pasig and
Makati civil cases did not raise a prejudicial question that would cause
the suspension of the Makati criminal case.
In his opposition to the State’s motion for reconsideration, Consing
contended that the ruling in G.R. No. 148193 was not binding because
G.R. No. 148193 involved Plus Builders, which was different from
Unicapital, the complainant in the Makati criminal case. He added that
the decision in G.R. No. 148193 did not yet become final and
executory, and could still be reversed at any time, and thus should not
control as a precedent to be relied upon; and that he had acted as an
innocent attorney-in-fact for his mother, and should not be held
personally liable under a contract that had involved property belonging
to his mother as his principal.
On August 18, 2003, the CA amended its decision, reversing itself. It
relied upon the ruling in G.R. No. 148193, and held thusly:
CA-G.R. SP No. 63712 is similar with the case at bench. The
transactions in controversy, the documents involved; the issue of the
respondent’s culpability for the questioned transactions are all identical
in all the proceedings; and it deals with the same parties with the
exception of private complainant Unicapital.
However, the Supreme Court, upon review of CA-G.R. SP No. 63712,
People of the Philippines vs. Rafael Jose Consing, Jr. (G.R. No.
148193, January 16, 2003) held that "Civil Case No. 99-95381, for
Damages and attachment on account of alleged fraud committed by
respondent and his mother in selling the disputed lot to Plus Builders,
Inc. is an independent civil action under Article 33 of the Civil Code. As
such, it will not operate as a prejudicial question that will justify the
suspension of the criminal case at bar." In view of the aforementioned
decision of the Supreme Court, We are thus amending Our May 20,
2003 decision.
WHEREFORE, the petitioner’s motion for reconsideration is
GRANTED. The Orders dated November 26, 2001 and March 18, 2002
issued by the respondent Judge are hereby REVERSED and SET
ASIDE. Respondent Judge is hereby ordered to proceed with the
hearing of Criminal Case No. 00-120 with dispatch.
SO ORDERED.16
Consing filed a motion for reconsideration, 17 but the CA denied the
motion through the second assailed resolution of December 11, 2003.18
Hence, this appeal by petition for review on certiorari.
Issue
Petitioner reiterates his contention that the decision in G.R. No. 148193
was not controlling in relation to C.A.-G.R. No. 71252, which involved
Plus Builders, not Unicapital, the complainant in Criminal Case No. 00-
120. He posits that in arriving at its amended decision, the CA did not
consider the pendency of the Makati civil case (Civil Case No. 99-
1418), which raised a prejudicial question, considering that the
resolution of such civil action would include the issue of whether he
had falsified a certificate of title or had willfully defrauded Unicapital,
the resolution of either of which would determine his guilt or innocence
in Criminal Case No. 00-120.
In its comment,19 the Office of the Solicitor General (OSG) counters
that Unicapital brought the Makati civil case as an independent civil
action intended to exact civil liability separately from Criminal Case No.
00-120 in a manner fully authorized under Section 1(a) and Section 2,
Rule 111 of the Rules of Court. 20 It argues that the CA correctly took
cognizance of the ruling in G.R. No. 148193, holding in its challenged
amended decision that the Makati civil case, just like the Manila civil
case, was an independent civil action instituted by virtue of Article 33 of
the Civil Code; that the Makati civil case did not raise a prejudicial
question that justified the suspension of Criminal Case No. 00-120; and
that as finally settled in G.R. No. 148193, the Pasig civil case did not
also raise any prejudicial question, because the sole issue thereat was
whether Consing, as the mere agent of his mother, had any obligation
or liability toward Unicapital.
In his reply,21 Consing submits that the Pasig civil case that he filed
and Unicapital’s Makati civil case were not intended to delay the
resolution of Criminal Case No. 00-120, nor to pre-empt such
resolution; and that such civil cases could be validly considered
determinative of whether a prejudicial question existed to warrant the
suspension of Criminal Case No. 00-120.
Did the CA err in reversing itself on the issue of the existence of a
prejudicial question that warranted the suspension of the proceedings
in the Makati criminal case?
Ruling
The petition for review on certiorari is absolutely meritless.
Consing has hereby deliberately chosen to ignore the firm holding in
the ruling in G.R. No. 148193 to the effect that the proceedings in
Criminal Case No. 00-120 could not be suspended because the Makati
civil case was an independent civil action, while the Pasig civil case
raised no prejudicial question. That was wrong for him to do
considering that the ruling fully applied to him due to the similarity
between his case with Plus Builders and his case with Unicapital.
A perusal of Unicapital’s complaint in the Makati civil case reveals that
the action was predicated on fraud. This was apparent from the
allegations of Unicapital in its complaint to the effect that Consing and
de la Cruz had acted in a "wanton, fraudulent, oppressive, or
malevolent manner in offering as security and later object of sale, a
property which they do not own, and foisting to the public a spurious
title."22 As such, the action was one that could proceed independently
of Criminal Case No. 00-120 pursuant to Article 33 of the Civil Code,
which states as follows:
Article 33. In cases of defamation, fraud, and physical injuries a civil
action for damages, entirely separate and distinct from the criminal
action, may be brought by the injured party. Such civil action shall
proceed independently of the criminal prosecution, and shall require
only a preponderance of evidence.
It is well settled that a civil action based on defamation, fraud and
physical injuries may be independently instituted pursuant to Article 33
of the Civil Code, and does not operate as a prejudicial question that
will justify the suspension of a criminal case. 23 This was precisely the
Court’s thrust in G.R. No. 148193, thus:
Moreover, neither is there a prejudicial question if the civil and the
criminal action can, according to law, proceed independently of each
other. Under Rule 111, Section 3 of the Revised Rules on Criminal
Procedure, in the cases provided in Articles 32, 33, 34 and 2176 of the
Civil Code, the independent civil action may be brought by the
offended party. It shall proceed independently of the criminal action
and shall require only a preponderance of evidence. In no case,
however, may the offended party recover damages twice for the same
act or omission charged in the criminal action.
xxxx
In the instant case, Civil Case No. 99-95381, for Damages and
Attachment on account of the alleged fraud committed by respondent
and his mother in selling the disputed lot to PBI is an independent civil
action under Article 33 of the Civil Code. As such, it will not operate as
a prejudicial question that will justify the suspension of the criminal
case at bar.24
Contrary to Consing’s stance, it was not improper for the CA to apply
the ruling in G.R. No. 148193 to his case with Unicapital, for, although
the Manila and Makati civil cases involved different complainants (i.e.,
Plus Builders and Unicapital), the civil actions Plus Builders and
Unicapital had separately instituted against him were undeniably of
similar mold, i.e., they were both based on fraud, and were thus
covered by Article 33 of the Civil Code. Clearly, the Makati criminal
case could not be suspended pending the resolution of the Makati civil
case that Unicapital had filed.
As far as the Pasig civil case is concerned, the issue of Consing’s
being a mere agent of his mother who should not be criminally liable
for having so acted due to the property involved having belonged to his
mother as principal has also been settled in G.R. No. 148193, to wit:
In the case at bar, we find no prejudicial question that would justify the
suspension of the proceedings in the criminal case (the Cavite criminal
case). The issue in Civil Case No. SCA 1759 (the Pasig civil case) for
Injunctive Relief is whether or not respondent (Consing) merely acted
as an agent of his mother, Cecilia de la Cruz; while in Civil Case No.
99-95381 (the Manila civil case), for Damages and Attachment, the
question is whether respondent and his mother are liable to pay
damages and to return the amount paid by PBI for the purchase of the
disputed lot. Even if respondent is declared merely an agent of his
mother in the transaction involving the sale of the questioned lot, he
cannot be adjudged free from criminal liability. An agent or any person
may be held liable for conspiring to falsify public documents. Hence,
the determination of the issue involved in Civil Case No. SCA 1759 for
Injunctive Relief is irrelevant to the guilt or innocence of the respondent
in the criminal case for estafa through falsification of public document. 25
(Words in parentheses supplied; bold underscoring supplied for
emphasis)
WHEREFORE, the Court AFFIRMS the amended decision
promulgated on August 18, 2003; and ORDERS petitioner to pay the
costs of suit.
SO ORDERED.
JM DOMINGUEZ AGRONOMIC COMPANY, INC., HELEN D.
DAGDAGAN, PATRICK PACIS, KENNETH PACIS, and SHIRLEY
DOMINGUEZ, Petitioners,
vs.
CECILIA LICLICAN, NORMA D. ISIP, and PURITA DOMINGUEZ,
Respondents.
DECISION
VELASCO, JR., J.:
Nature of the Case
Petitioners, through the instant Petition for Review on Certiorari under
Rule 45 of the Rules of Court, seek the reversal of the Court of
Appeals (CA) Decision1 dated August 30, 2012 and its Resolution2
dated July 15, 2013 in CA-G.R. SP No. 108617. Said rulings nullified
the Orders authorizing the issuance of the assailed warrants of arrest
against respondents for allegedly having been issued in grave abuse of
discretion.
The Facts
During the annual stockholders meeting of petitioner JM Dominguez
Agronomic Company, Inc. (JMD) held on December 29, 2007 at the
Baguio City Country Club, the election for its new set of directors was
conducted. This event was presided by then company president, and
herein respondent, Cecilia Liclican (Liclican), and attended by her co-
respondents Norma Isip (Isip) and Purita Rodriguez, and by petitioners
Helen Dagdagan (Dagdagan), Patrick Pacis, Kenneth Pacis, and
Shirley Dominguez (Dominguez) as well. Conflict ensued when
petitioners Patrick and Kenneth Pacis were allegedly not allowed to
vote on the ground that they are not registered stockholders of JMD.
As pointed out, it was their mother and grandmother, both deceased,
who are the stockholders in JMD, and that there is still no settlement of
their respective estates to effectively transfer their shares in the
company to Patrick and Kenneth Pacis.3
Tensions rose and respondents, allegedly, walked out of the meeting.
But since the remaining stockholders with outstanding shares
constituted a quorum, the election of officers still proceeded, which
yielded the following result: 4
Officers:
1. Helen D. Dagdagan as President
2. Patrick D. Pacis as Vice-President
3. Kenneth D. Pacis as Secretary
4. Shirley C. Dominguez as Treasurer
After staging the walk-out, respondents, on even date, executed a
Board Resolution certifying that in the stockholders meeting, the
following were elected directors and officers of JMD:5 Board of
Directors:
1. Cecilia D. Liclican – Chairman and Presiding Officer
2. Norma D. Isip
3. Purita C. Dominguez
4. Tessie C. Dominguez, and
5. Shirley C. Dominguez
Officers:
1. Cecilia D. Liclican as President and Presiding Officer
2. Norma D. Isip as Vice-President
3. Gerald B. Cabrera as Corporate Secretary/Treasurer and
4. Oscar Aquino – Financial Consultant Auditor
In reaction to the foregoing developments, petitioners Dagdagan,
Patrick and Kenneth Pacis, and Dominguez filed a Complaint against
respondents before the Regional Trial Comi of Baguio City (RTC) for
nullification of meetings, election and acts of directors and officers,
injunction and other reliefs, raffled to Branch 59 of the court. Docketed
as Civil Case No. 6623-R, the case, after a failed mediation, was
referred for appropriate Judicial Dispute Resolution (JDR) to Branch 7
of the RTC. Meanwhile, petitioner stockholders immediately took hold
of corporate properties, represented themselves to JMD's tenants as
the true and lawful directors of the company, and collected and
deposited rents due the company to its bank account.6
Subsequently, JMD, represented by petitioners Dagdagan and Patrick
Pacis, executed an Affidavit-Complaint7 dated December 15, 2008
charging respondents Liclican and Isip with qualified theft. Petitioners
alleged in the complaint, docketed as I.S. No. 3011 with the Office of
the City Prosecutor in Baguio City, that on January 2, 2008, Liclican
and Isip, without any authority whatsoever, conspired to withdraw the
amount of ₱852,024.19 from the corporation's savings account with the
Equitable-PCI Bank; and that the following day, they issued Check No.
C00024899018 in the amount of ₱200,000, payable to cash, and to be
drawn against JMD's account with Robinson's Savings Bank.9
In a separate complaint,10 docketed as I.S. No. 3118, the corporation
claimed that respondents Liclican and Isip likewise issued Equitable-
PCI Bank Check No. 32095311 payable to one Atty. Francisco Lava,
Jr. for ₱200,000 to be debited from the corporation's account.
After due proceedings, the Office of the City Prosecutor of Baguio City,
by Joint Resolution of February 2, 2009, recommended the filing of
informations as follows:12
WHEREFORE, premises considered. the undersigned recommends for
approval the attached Informations for Qualified Theft against
LICLICAN and ISIP in LS. No. 3011 and another against LICLICAN in
LS. No. 3118.
When filed, the informations were eventually raffled to Branch 7 of the
RTC, the same court overseeing the JDR,13 presided over by Judge
Mona Lisa V. Tiongson-Tabora (Judge Tiongson-Tabora). The criminal
cases for qualified theft were then docketed as Criminal Case Nos.
29176-R (based on I.S. No. 3118) and 29175-R (based on I.S. No.
3111).
On March 10, 2009, Judge Tiongson-Tabora issued an Order14 in
Criminal Case No. 29176-R, finding probable cause for the issuance of
a warrant of arrest against Liclican, thus: WHEREFORE. the
Information filed herein is hereby given due course. Let the
corresponding warrant of arrest be issued against the accused. As
recommended, the bail is hereby fixed as Php 80,000.00.
SO ORDERED.
A similar Order,15 also dated March 10, 2009, was issued in Criminal
Case No. 29175-R likewise finding probable cause against
respondents Liclican and Isip, viz:
WHEREFORE, the Information filed herein is hereby given due course.
Let the corresponding warrant of arrest be issued against the accused.
As recommended, the bail is hereby fixed at Php 80,000.00 each.
Considering that the address provided for accused Norma Isip is
Washington, U.S.A., the private complainants are hereby given fifteen (
15) days from receipt hereof to provide the Court with a local address
for the said accused if she may be found in the Philippines.
SO ORDERED.
Consequently, the corresponding warrants were issued for the arrests
of Isip and Liclican.16 In due time, respondents lodged a petition for
certiorari with the CA, docketed as CA-G.R. SP No. 108617, to annul
and set aside the two (2) March I 0, 2009 Orders by the RTC Branch 7,
anchored, among others, on the alleged existence of a prejudicial
question. According to respondents, petitioner stockholders, by filing
the complaint-affidavit, are already assuming that they are the
legitimate directors of JMD, which is the very issue in the intra-
corporate dispute pending in the RTC, Branch 59.
Ruling of the Court of Appeals
In its assailed Decision, the CA granted the petition for certiorari,
disposing as follows: WHEREFORE, the challenged Orders both dated
March 10. 2009 are hereby ANNULLED and SET ASIDE for having
been issued with grave abuse of discretion amounting to lack or
excess of jurisdiction.
SO ORDERED.
The appellate court held that Judge Tiongson-Tabora should have
refrained from determining probable cause since she is well aware of
the pendency of the issue on the validity of JMD's elections in Civil
Case No. 6623-R. As the judge overseeing the JDR of the said intra-
corporate dispute, she knew that there was still doubt as to who the
rightfully elected directors of JMD are and, corollarily, who would have
the authority to initiate the criminal proceedings for qualified theft.17
The CA further noted that even as corporate officers, as they claim to
be, petitioners Dagdagan and Patrick Pacis cannot file the Complaint-
Affidavit in the exercise of corporate powers without authority from the
board of directors under Sec. 23,18 in relation to Sec. 2519 of the
Corporation Code.20 Any doubt cast on the validity of the board
elections would then necessarily extend to the authority of the officers
to act.
As further held by the CA:
x x x Since there is doubt in the instant case as to the sufficiency of the
authority of a corporate officer, Judge Tiongson-Tabora should have
exercised prudence by holding the criminal cases in abeyance pending
resolution of the intra-corporate dispute which private respondents
themselves instituted.21
Aggrieved, individual petitioners moved for reconsideration, on the
main contention that their election as officers and directors of JMD has
already been sustained by the trial court via its Judgment in Civil Case
No. 6623-R dated May 6, 2011. They likewise claimed that the issue
on whether or not the R TC, Branch 7 committed grave abuse of
discretion is already rendered moot and academic by the judge's
inhibition in Criminal Case Nos. 29175-R and 29176-R, and the
termination of the JDR proceedings in Civil Case No. 6623-R.
Petitioners' motion, however, proved futile as the appellate court
denied the same in its July 15, 2013 Resolution.22 Hence, the instant
recourse.
The Issues
Plainly, the resolution of the extant case depends on whether or not
there exists a prejudicial question that could affect the criminal
proceedings for qualified theft against respondents. In the concrete, the
issues are (i) whether or not Civil Case No. 6623-R constituted a
prejudicial question warranting the suspension of the proceedings in
Criminal Case Nos. 29175-R and 29176-R; and (ii) whether or not
grave abuse of discretion attended the issuance of the two assailed
March 10, 2009 Orders in Criminal Case Nos. 29175-R and 29176-R.
The Court's Ruling
The petition lacks merit.
The challenged Orders of the trial court
were issued in grave abuse of discretion
We have previously ruled that grave abuse of discretion may arise
when a lower court or tribunal violates or contravenes the Constitution,
the law or existing jurisprudence. By grave abuse of discretion is
meant, such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be grave
as where the power is exercised in an arbitrary or despotic manner by
reason of passion or personal hostility and must be so patent and
gross as to amount to an evasion of positive duty or to a virtual refusal
to perform the duty enjoined by or to act at all in contemplation of law.
The word "capricious," usually used in tandem with the term "arbitrary,"
conveys the notion of willful and unreasoning action. Thus, when
seeking the corrective hand of certiorari, a clear showing of caprice
and arbitrariness in the exercise of discretion is imperative.23
In the case at bar, the CA correctly ruled that Judge Tiongson-Tabora
acted with grave abuse of discretion when she ordered the arrests of
respondents Isip and Liclican despite the existence of a prejudicial
question.
As jurisprudence elucidates, a prejudicial question generally exists in a
situation where a civil action and a criminal action are both pending,
and there exists in the former an issue that must be pre-emptively
resolved before the latter may proceed, because howsoever the issue
raised in the civil action is resolved would be determinative Juris et de
Jure of the guilt or innocence of the accused in the criminal case.24
The rationale behind the principle is to avoid two conflicting
decisions,25 and its existence rests on the concurrence of two
essential elements: (i) the civil action involves an issue similar or
intimately related to the issue raised in the criminal action; and (ii) the
resolution of such issue determines whether or not the criminal action
may proceed.26
Here, the CA aptly observed that Civil Case No. 6623-R, the intra-
corporate dispute, posed a prejudicial question to Criminal Case Nos.
29175-R and 29176-R. To be sure, Civil Case No. 6623-R involves the
same parties herein, and is for nullification of JMD's meetings, election
and acts of its directors and officers, among others. Court intervention
was sought to ascertain who between the two contesting group of
officers should rightfully be seated at the company's helm. Without Civil
Case No. 6623-R's resolution, petitioners' authority to commence and
prosecute Criminal Case Nos. 29175-R and 29176-R against
respondents for qualified theft in JMD's behalf remained questionable,
warranting the suspension of the criminal proceedings.
Judge Tiongson-Tabora cannot deny knowledge of the pendency of
Civil Case No. 6623-R as the judge presiding over its JDR. As correctly
held by the CA:
Judge Tiongson-Tabora is well-aware of the existence of said
prejudicial question that should have barred the filing of the criminal
complaint against petitioners Liclican and Isip, for the simple reason
that a juridical person can only act through its officers, and the issue in
the main case submitted for JDR before Judge Tiongson-Tabora is one
for nullification of meetings, election and act of directors and officers,
injunction and other reliefs Thus, she knows for a fact that there is a
question as to who are the legitimate directors of JMD such that there
is doubt as to whether private respondents are in a position to act for
JMD. (emphasis added)
Verily, the RTC ought to have suspended the proceedings, instead of
issuing the challenged Orders issued by the RTC.
The subsequent resolution of the prejudicial
question did not cure the defect
It may be, as the petitioners pointed out in their motion for
reconsideration filed before the CA, that Civil Case No. 6623-R was
eventually resolved in their favor through a Judgment27 dated May 6,
2011 rendered by the RTC, Branch 59, the dispositive portion of which
reads: WHEREFORE, from all the foregoing disquisitions, the Court
hereby declares that the plaintiffs [petitioners herein] are the duly
elected board of directors and officers of the JM Dominguez Agronomic
Company, Inc. for the year 2008 and hold-over capacity unless here
had already been an election of new officers.
Consequently, all Corporate Acts which the defendants [herein
respondents and one Gerald Cabrera and one Oscar Aquino] have
done and performed and all documents they have executed and issued
have no force and effect.
Considering that the amount of Php850,000.00 which defendants have
withdrawn under the account of JM Dominguez Agronomic Company,
Inc. from the Equitable – PCI Bank (now Banco de Oro) is the same
subject in CC no. 29175-R entitled Pp. vs. Cecilia Liclican and Norma
D. Isip for Qualified Theft, the Court will no longer dwell on the same.
xxxx
SO ORDERED. (emphasis and words in bracket added)
This Judgment has, on June 6, 2011, become final and executory, as
per the Notice of Entry of Judgment issued by the same trial court.28
Evidently, whatever cloud of doubt loomed over petitioners' actuations
has already been dispelled. Petitioners then postulate that the question
on whether or not the challenged Orders were issued in grave abuse of
discretion has already been rendered moot and academic by the June
6, 2011 ruling and by Judge Tiongson-Tabora's subsequent inhibition
in the criminal proceedings. Consequently, they argue that their motion
for reconsideration should have been granted by the appellate court.
We are not convinced.
The resolution of the prejudicial question did not, in context, cure the
grave abuse of discretion already committed. The fact remains that
when the RTC, Branch 7 issued its challenged Orders on March 10,
2009, the Judg1pent in favor of petitioners was not yet rendered.
Consequently, there was still, at that time, a real dispute as to who the
rightful set of officers were. Plainly, Judge Tiongson-Tabora should not
have issued the challenged Orders and should have, instead,
suspended the proceedings until Civil Case No. 6623-R was resolved
with finality.
To grant the instant petition and rule that the procedural infirmity has
subsequently been cured either by the Judgment or by Judge
Tiongson-Tabora's inhibition would mean condoning the continuation
of the criminal proceedings despite, at that time, the existence of a
prejudicial question. Such condonation would create a precedent that
renders inutile the doctrine on prejudicial question, such that the court
trying the criminal case will be permitted to proceed with the trial in the
aberrant assumption that the resolution of the prior instituted civil case
would benefit the private complainant in the criminal proceedings. To
reiterate, there was no certainty yet on how the RTC, Branch 59 would
rule; thus, no assumption on Civil Case No. 6623-R's resolution can be
made when the challenged Orders were issued. Indeed, had the RTC,
Branch 59 not given credence to petitioners' arguments, it would have
led to an awkward situation wherein much time and effort is wasted by
the RTC, Branch 7 in trying criminal cases it should not have
entertained.
The foregoing notwithstanding, it should be made clear that the
nullification of the March 10, 2009 Orders does not, under the
premises.1âwphi1 entail the dismissal of the instituted criminal cases,
but would merely result in the suspension of the proceedings in view of
the prejudicial question. However, given the resolution of the prejudicial
question and Judge Tiongson-Tabora's inhibition, Criminal Case Nos.
29175-R and 29176-R may already proceed, and ought to be re-raffled
to re-determine the existence of probable cause for the issuance of
warrants of arrest against respondents.
WHEREFORE, premises considered, the petition is hereby DENIED
for lack of merit. The Court of Appeals' August 30, 2012 Decision and
July 15, 2013 Resolution in CA-G.R. SP No. 108617 are hereby
AFFIRMED.
Criminal Case Nos. 29175-R and 29176-R are hereby REMANDED to
the Executive Judge of the Regional Trial Court of Baguio City to be re-
raffled to one of its branches other than Branch 7.
SO ORDERED.
SAN MIGUEL PROPERTIES, INC., PETITIONER,
vs.
SEC. HERNANDO B. PEREZ, ALBERT C. AGUIRRE, TEODORO B.
ARCENAS, JR., MAXY S. ABAD, JAMES G. BARBERS, STEPHEN
N. SARINO, ENRIQUE N. ZALAMEA, JR., MARIANO M. MARTIN,
ORLANDO O. SAMSON, CATHERINE R. AGUIRRE, AND ANTONIO
V. AGCAOILI, RESPONDENTS.
DECISION
BERSAMIN, J.:
The pendency of an administrative case for specific performance
brought by the buyer of residential subdivision lots in the Housing and
Land Use Regulatory Board (HLURB) to compel the seller to deliver
the transfer certificates of title (TCTs) of the fully paid lots is properly
considered a ground to suspend a criminal prosecution for violation of
Section 25 of Presidential Decree No. 9571 on the ground of a
prejudicial question. The administrative determination is a logical
antecedent of the resolution of the criminal charges based on non-
delivery of the TCTs.
Antecedents
Petitioner San Miguel Properties Inc. (San Miguel Properties), a
domestic corporation engaged in the real estate business, purchased
in 1992, 1993 and April 1993 from B.F. Homes, Inc. (BF Homes), then
represented by Atty. Florencio B. Orendain (Orendain) as its duly
authorized rehabilitation receiver appointed by the Securities and
Exchange Commission (SEC),2 130 residential lots situated in its
subdivision BF Homes Parañaque, containing a total area of 44,345
square meters for the aggregate price of ₱106,248,000.00. The
transactions were embodied in three separate deeds of sale.3 The
TCTs covering the lots bought under the first and second deeds were
fully delivered to San Miguel Properties, but 20 TCTs covering 20 of
the 41 parcels of land with a total area of 15,565 square meters
purchased under the third deed of sale, executed in April 1993 and for
which San Miguel Properties paid the full price of ₱39,122,627.00,
were not delivered to San Miguel Properties.
On its part, BF Homes claimed that it withheld the delivery of the 20
TCTs for parcels of land purchased under the third deed of sale
because Atty. Orendain had ceased to be its rehabilitation receiver at
the time of the transactions after being meanwhile replaced as receiver
by FBO Network Management, Inc. on May 17, 1989 pursuant to an
order from the SEC.4
BF Homes refused to deliver the 20 TCTs despite demands. Thus, on
August 15, 2000, San Miguel Properties filed a complaint-affidavit in
the Office of the City Prosecutor of Las Piñas City (OCP Las Piñas)
charging respondent directors and officers of BF Homes with non-
delivery of titles in violation of Section 25, in relation to Section 39, both
of Presidential Decree No. 957 (I.S. No. 00-2256). 5
At the same time, San Miguel Properties sued BF Homes for specific
performance in the HLURB (HLURB Case No. REM-082400-11183), 6
praying to compel BF Homes to release the 20 TCTs in its favor.
In their joint counter-affidavit submitted in I.S. No. 00-2256, 7
respondent directors and officers of BF Homes refuted San Miguel
Properties’ assertions by contending that: (a) San Miguel Properties’
claim was not legally demandable because Atty. Orendain did not have
the authority to sell the 130 lots in 1992 and 1993 due to his having
been replaced as BF Homes’ rehabilitation receiver by the SEC on
May 17, 1989; (b) the deeds of sale conveying the lots were irregular
for being undated and unnotarized; (c) the claim should have been
brought to the SEC because BF Homes was under receivership; (d) in
receivership cases, it was essential to suspend all claims against a
distressed corporation in order to enable the receiver to effectively
exercise its powers free from judicial and extra-judicial interference that
could unduly hinder the rescue of the distressed company; and (e) the
lots involved were under custodia legis in view of the pending
receivership proceedings, necessarily stripping the OCP Las Piñas of
the jurisdiction to proceed in the action.
On October 10, 2000, San Miguel Properties filed a motion to suspend
proceedings in the OCP Las Piñas, 8 citing the pendency of BF Homes’
receivership case in the SEC. In its comment/opposition, BF Homes
opposed the motion to suspend. In the meantime, however, the SEC
terminated BF Homes’ receivership on September 12, 2000, prompting
San Miguel Properties to file on October 27, 2000 a reply to BF Homes’
comment/opposition coupled with a motion to withdraw the sought
suspension of proceedings due to the intervening termination of the
receivership.9
On October 23, 2000, the OCP Las Piñas rendered its resolution, 10
dismissing San Miguel Properties’ criminal complaint for violation of
Presidential Decree No. 957 on the ground that no action could be filed
by or against a receiver without leave from the SEC that had appointed
him; that the implementation of the provisions of Presidential Decree
No. 957 exclusively pertained under the jurisdiction of the HLURB; that
there existed a prejudicial question necessitating the suspension of the
criminal action until after the issue on the liability of the distressed BF
Homes was first determined by the SEC en banc or by the HLURB;
and that no prior resort to administrative jurisdiction had been made;
that there appeared to be no probable cause to indict respondents for
not being the actual signatories in the three deeds of sale.
On February 20, 2001, the OCP Las Piñas denied San Miguel
Properties’ motion for reconsideration filed on November 28, 2000,
holding that BF Homes’ directors and officers could not be held liable
for the non-delivery of the TCTs under Presidential Decree No. 957
without a definite ruling on the legality of Atty. Orendain’s actions; and
that the criminal liability would attach only after BF Homes did not
comply with a directive of the HLURB directing it to deliver the titles.11
San Miguel Properties appealed the resolutions of the OCP Las Piñas
to the Department of Justice (DOJ), but the DOJ Secretary denied the
appeal on October 15, 2001, holding:
After a careful review of the evidence on record, we find no cogent
reason to disturb the ruling of the City Prosecutor of Las Piñas City.
Established jurisprudence supports the position taken by the City
Prosecutor concerned.
There is no dispute that aside from the instant complaint for violation of
PD 957, there is still pending with the Housing and Land Use
Resulatory Board (HLURB, for short) a complaint for specific
performance where the HLURB is called upon to inquire into, and rule
on, the validity of the sales transactions involving the lots in question
and entered into by Atty. Orendain for and in behalf of BF Homes.
As early as in the case of Solid Homes, Inc. vs. Payawal, 177 SCRA
72, the Supreme Court had ruled that the HLURB has exclusive
jurisdiction over cases involving real estate business and practices
under PD 957. This is reiterated in the subsequent cases of Union
Bank of the Philippines versus HLURB, G.R. [No.] 953364, June 29,
1992 and C.T. Torres Enterprises vs. Hilionada, 191 SCRA 286.
The said ruling simply means that unless and until the HLURB rules on
the validity of the transactions involving the lands in question with
specific reference to the capacity of Atty. Orendain to bind BF Homes
in the said transactions, there is as yet no basis to charge criminally
respondents for non-delivery of the subject land titles. In other words,
complainant cannot invoke the penal provision of PD 957 until such
time that the HLURB shall have ruled and decided on the validity of the
transactions involving the lots in question.
WHEREFORE, the appeal is hereby DENIED.
SO ORDERED.12 (Emphasis supplied)
The DOJ eventually denied San Miguel Properties’ motion for
reconsideration.13
Ruling of the CA
Undaunted, San Miguel Properties elevated the DOJ’s resolutions to
the CA on certiorari and mandamus (C.A.-G.R. SP No. 73008),
contending that respondent DOJ Secretary had acted with grave abuse
in denying their appeal and in refusing to charge the directors and
officers of BF Homes with the violation of Presidential Decree No. 957.
San Miguel Properties submitted the issue of whether or not HLURB
Case No. REM-082400-11183 presented a prejudicial question that
called for the suspension of the criminal action for violation of
Presidential Decree No. 957.
In its assailed decision promulgated on February 24, 2004 in C.A.-G.R.
SP No. 73008,14 the CA dismissed San Miguel Properties’ petition,
holding and ruling as follows:
From the foregoing, the conclusion that may be drawn is that the rule
on prejudicial question generally applies to civil and criminal actions
only.
However, an exception to this rule is provided in Quiambao vs. Osorio
cited by the respondents. In this case, an issue in an administrative
case was considered a prejudicial question to the resolution of a civil
case which, consequently, warranted the suspension of the latter until
after termination of the administrative proceedings.
Quiambao vs. Osorio is not the only instance when the Supreme Court
relaxed the application of the rule on prejudicial question.
In Tamin vs. CA involving two (2) civil actions, the Highest Court
similarly applied the rule on prejudicial question when it directed
petitioner therein to put up a bond for just compensation should the
demolition of private respondents’ building proved to be illegal as a
result of a pending cadastral suit in another tribunal.
City of Pasig vs. COMELEC is yet another exception where a civil
action involving a boundary dispute was considered a prejudicial
question which must be resolved prior to an administrative proceeding
for the holding of a plebiscite on the affected areas.
In fact, in Vidad vs. RTC of Negros Oriental, Br. 42, it was ruled that in
the interest of good order, courts can suspend action in one case
pending determination of another case closely interrelated or
interlinked with it.
It thus appears that public respondent did not act with grave abuse of
discretion x x x when he applied the rule on prejudicial question to the
instant proceedings considering that the issue on the validity of the
sale transactions x x x by x x x Orendain in behalf of BF Homes, Inc., is
closely intertwined with the purported criminal culpability of private
respondents, as officers/directors of BF Homes, Inc., arising from their
failure to deliver the titles of the parcels of land included in the
questioned conveyance.
All told, to sustain the petitioner’s theory that the result of the HLURB
proceedings is not determinative of the criminal liability of private
respondents under PD 957 would be to espouse an absurdity. If we
were to assume that the HLURB finds BFHI under no obligation to
delve the subject titles, it would be highly irregular and contrary to the
ends of justice to pursue a criminal case against private respondents
for the non-delivery of certificates of title which they are not under any
legal obligation to turn over in the first place. (Bold emphasis supplied)
On a final note, absent grave abuse of discretion on the part of the
prosecutorial arm of the government as represented by herein public
respondent, courts will not interfere with the discretion of a public
prosecutor in prosecuting or dismissing a complaint filed before him. A
public prosecutor, by the nature of his office, is under no compulsion to
file a criminal information where no clear legal justification has been
shown, and no sufficient evidence of guilt nor prima facie case has
been established by the complaining party.
WHEREFORE, premises considered, the instant Petition for Certiorari
and Mandamus is hereby DENIED. The Resolutions dated 15 October
2001 and 12 July 2002 of the Department of Justice are AFFIRMED.
SO ORDERED. 15
The CA denied San Miguel Properties’ motion for reconsideration on
January 18, 2005.16
Issues
Aggrieved, San Miguel Properties is now on appeal, raising the
following for consideration and resolution, to wit:
THE COURT OF APPEALS COMMITTED GRAVE, SERIOUS AND
REVERSIBLE ERRORS WHEN IT DISMISSED PETITIONER’S
CERTIORARI AND MANDAMUS PETITION TO ORDER AND DIRECT
RESPONDENT SECRETARY TO INDICT RESPONDENTS FOR
VIOLATION OF SECTION 25, PD. 957 IN THAT:
THE OBLIGATION OF PRIVATE RESPONDENTS TO DELIVER TO
PETITIONER THE TITLES TO 20 FULLY-PAID LOTS IS MANDATED
BY SECTION 25, PD 957. IN FACT, THE OFFICE OF THE
PRESIDENT HAD DULY CONFIRMED THE SAME PER ITS
DECISION DATED 27 JANUARY 2005 IN O.P. CASE NO. 03-E-203,
ENTITLED "SMPI V. BF HOMES, INC.".
A FORTIORI, PRIVATE RESPONDENTS’ FAILURE AND/OR
REFUSAL TO DELIVER TO PETITIONER THE SUBJECT TITLES
CONSTITUTES CRIMINAL OFFENSE PER SECTIONS 25 AND 39,
PD 957 FOR WHICH IT IS THE MINISTERIAL DUTY OF
RESPONDENT SECRETARY TO INDICT PRIVATE RESPONDENTS
THEREFOR.
IN ANY EVENT, THE HLURB CASE DOES NOT PRESENT A
"PREJUDICIAL QUESTION" TO THE SUBJECT CRIMINAL CASE
SINCE THE FORMER INVOLVES AN ISSUE SEPARATE AND
DISTINCT FROM THE ISSUE INVOLVED IN THE LATTER.
CONSEQUENTLY, THE HLURB CASE HAS NO CORRELATION, TIE
NOR LINKAGE TO THE PRESENT CRIMINAL CASE WHICH CAN
PROCEED INDEPENDENTLY THEREOF.
IN FACT, THE CRIMINAL CULPABILITY OF PRIVATE
RESPONDENTS EMANATE FROM THEIR MALA PROHIBITA NON-
DELIVERY OF THE TITLES TO TWENTY (20) FULLY-PAID
PARCELS OF LAND TO PETITIONER, AND NOT FROM THEIR
NON-COMPLIANCE WITH THE HLURB’S RULING IN THE
ADMINISTRATIVE CASE.
NONETHELESS, BY DECREEING THAT PETITIONER’S CRIMINAL
COMPLAINT IS PREMATURE, BOTH THE COURT OF APPEALS
AND RESPONDENT SECRETARY HAD IMPLIEDLY ADMITTED THE
EXISTENCE OF SUFFICIENT PROBABLE CAUSE AGAINST
PRIVATE RESPONDENTS FOR THE CRIME CHARGED. 17
It is relevant at this juncture to mention the outcome of the action for
specific performance and damages that San Miguel Properties
instituted in the HLURB simultaneously with its filing of the complaint
for violation of Presidential Decree No. 957. On January 25, 2002, the
HLURB Arbiter ruled that the HLURB was inclined to suspend the
proceedings until the SEC resolved the issue of Atty. Orendain’s
authority to enter into the transactions in BF Homes’ behalf, because
the final resolution by the SEC was a logical antecedent to the
determination of the issue involved in the complaint before the HLURB.
Upon appeal, the HLURB Board of Commissioners (HLURB Board),
citing the doctrine of primary jurisdiction, affirmed the HLURB Arbiter’s
decision, holding that although no prejudicial question could arise,
strictly speaking, if one case was civil and the other administrative, it
nonetheless opted to suspend its action on the cases pending the final
outcome of the administrative proceeding in the interest of good
order.18
Not content with the outcome, San Miguel Properties appealed to the
Office of the President (OP), arguing that the HLURB erred in
suspending the proceedings. On January 27, 2004, the OP reversed
the HLURB Board’s ruling, holding thusly:
The basic complaint in this case is one for specific performance under
Section 25 of the Presidential Decree (PD) 957 – "The Subdivision and
Condominium Buyers’ Protective."
As early as August 1987, the Supreme Court already recognized the
authority of the HLURB, as successor agency of the National Housing
Authority (NHA), to regulate, pursuant to PD 957, in relation to PD
1344, the real estate trade, with exclusive original jurisdiction to hear
and decide cases "involving specific performance of contractual and
statutory obligation filed by buyers of subdivision lots … against the
owner, developer, dealer, broker or salesman," the HLURB, in the
exercise of its adjudicatory powers and functions, "must interpret and
apply contracts, determine the rights of the parties under these
contracts and award[s] damages whenever appropriate."
Given its clear statutory mandate, the HLURB’s decision to await for
some forum to decide – if ever one is forthcoming – the issue on the
authority of Orendain to dispose of subject lots before it peremptorily
resolves the basic complaint is unwarranted, the issues thereon having
been joined and the respective position papers and the evidence of the
parties having been submitted. To us, it behooved the HLURB to
adjudicate, with the usual dispatch, the right and obligation of the
parties in line with its own appreciation of the obtaining facts and
applicable law. To borrow from Mabubha Textile Mills Corporation vs.
Ongpin, it does not have to rely on the finding of others to discharge
this adjudicatory functions.19
After its motion for reconsideration was denied, BF Homes appealed to
the CA (C.A.-G.R. SP No. 83631), raising as issues: (a) whether or not
the HLURB had the jurisdiction to decide with finality the question of
Atty. Orendain’s authority to enter into the transaction with San Miguel
Properties in BF Homes’ behalf, and rule on the rights and obligations
of the parties to the contract; and (b) whether or not the HLURB
properly suspended the proceedings until the SEC resolved with finality
the matter regarding such authority of Atty. Orendain.
The CA promulgated its decision in C.A.-G.R. SP No. 83631, 20
decreeing that the HLURB, not the SEC, had jurisdiction over San
Miguel Properties’ complaint. It affirmed the OP’s decision and ordered
the remand of the case to the HLURB for further proceedings on the
ground that the case involved matters within the HLURB’s competence
and expertise pursuant to the doctrine of primary jurisdiction, viz:
[T]he High Court has consistently ruled that the NHA or the HLURB
has jurisdiction over complaints arising from contracts between the
subdivision developer and the lot buyer or those aimed at compelling
the subdivision developer to comply with its contractual and statutory
obligations.
Hence, the HLURB should take jurisdiction over respondent’s
complaint because it pertains to matters within the HLURB’s
competence and expertise. The proceedings before the HLURB should
not be suspended.
While We sustain the Office of the President, the case must be
remanded to the HLURB. This is in recognition of the doctrine of
primary jurisdiction. The fairest and most equitable course to take
under the circumstances is to remand the case to the HLURB for the
proper presentation of evidence.21
Did the Secretary of Justice commit grave abuse of discretion in
upholding the dismissal of San Miguel Properties’ criminal complaint
for violation of Presidential Decree No. 957 for lack of probable cause
and for reason of a prejudicial question?
The question boils down to whether the HLURB administrative case
brought to compel the delivery of the TCTs could be a reason to
suspend the proceedings on the criminal complaint for the violation of
Section 25 of Presidential Decree No. 957 on the ground of a
prejudicial question.
Ruling of the Court
The petition has no merit.
1.
Action for specific performance, even if pending in the HLURB, an
administrative agency, raises a prejudicial question BF Homes’ posture
that the administrative case for specific performance in the HLURB
posed a prejudicial question that must first be determined before the
criminal case for violation of Section 25 of Presidential Decree No. 957
could be resolved is correct.
A prejudicial question is understood in law to be that which arises in a
case the resolution of which is a logical antecedent of the issue
involved in the criminal case, and the cognizance of which pertains to
another tribunal. It is determinative of the criminal case, but the
jurisdiction to try and resolve it is lodged in another court or tribunal. It
is based on a fact distinct and separate from the crime but is so
intimately connected with the crime that it determines the guilt or
innocence of the accused. 22 The rationale behind the principle of
prejudicial question is to avoid conflicting decisions. 23 The essential
elements of a prejudicial question are provided in Section 7, Rule 111
of the Rules of Court, to wit: (a) the previously instituted civil action
involves an issue similar or intimately related to the issue raised in the
subsequent criminal action, and (b) the resolution of such issue
determines whether or not the criminal action may proceed.
The concept of a prejudicial question involves a civil action and a
criminal case. Yet, contrary to San Miguel Properties’ submission that
there could be no prejudicial question to speak of because no civil
action where the prejudicial question arose was pending, the action for
specific performance in the HLURB raises a prejudicial question that
sufficed to suspend the proceedings determining the charge for the
criminal violation of Section 2524 of Presidential Decree No. 957. This is
true simply because the action for specific performance was an action
civil in nature but could not be instituted elsewhere except in the
HLURB, whose jurisdiction over the action was exclusive and original. 25
The determination of whether the proceedings ought to be suspended
because of a prejudicial question rested on whether the facts and
issues raised in the pleadings in the specific performance case were so
related with the issues raised in the criminal complaint for the violation
of Presidential Decree No. 957, such that the resolution of the issues in
the former would be determinative of the question of guilt in the
criminal case. An examination of the nature of the two cases involved
is thus necessary.
An action for specific performance is the remedy to demand the exact
performance of a contract in the specific form in which it was made, or
according to the precise terms agreed upon by a party bound to fulfill
it.26 Evidently, before the remedy of specific performance is availed of,
there must first be a breach of the contract. 27 The remedy has its roots
in Article 1191 of the Civil Code, which reads:
Article 1191. The power to rescind obligations is implied in reciprocal
ones, in case one of the obligors should not comply with what is
incumbent upon him.
The injured party may choose between the fulfillment and the
rescission of the obligation, with the payment of damages in either
case. He may also seek rescission, even after he has chosen
fulfillment, if the latter should become impossible. x x x (Emphasis
supplied)
Accordingly, the injured party may choose between specific
performance or rescission with damages. As presently worded, Article
1191 speaks of the remedy of rescission in reciprocal obligations within
the context of Article 1124 of the former Civil Code which used the
term resolution. The remedy of resolution applied only to reciprocal
obligations, such that a party’s breach of the contract equated to a tacit
resolutory condition that entitled the injured party to rescission. The
present article, as in the former one, contemplates alternative remedies
for the injured party who is granted the option to pursue, as principal
actions, either the rescission or the specific performance of the
obligation, with payment of damages in either case. 28
On the other hand, Presidential Decree No. 957 is a law that regulates
the sale of subdivision lots and condominiums in view of the increasing
number of incidents wherein "real estate subdivision owners,
developers, operators, and/or sellers have reneged on their
representations and obligations to provide and maintain properly" the
basic requirements and amenities, as well as of reports of alarming
magnitude of swindling and fraudulent manipulations perpetrated by
unscrupulous subdivision and condominium sellers and operators, 29
such as failure to deliver titles to the buyers or titles free from liens and
encumbrances. Presidential Decree No. 957 authorizes the suspension
and revocation of the registration and license of the real estate
subdivision owners, developers, operators, and/or sellers in certain
instances, as well as provides the procedure to be observed in such
instances; it prescribes administrative fines and other penalties in case
of violation of, or non-compliance with its provisions.
Conformably with the foregoing, the action for specific performance in
the HLURB would determine whether or not San Miguel Properties was
legally entitled to demand the delivery of the remaining 20 TCTs, while
the criminal action would decide whether or not BF Homes’ directors
and officers were criminally liable for withholding the 20 TCTs. The
resolution of the former must obviously precede that of the latter, for
should the HLURB hold San Miguel Properties to be not entitled to the
delivery of the 20 TCTs because Atty. Orendain did not have the
authority to represent BF Homes in the sale due to his receivership
having been terminated by the SEC, the basis for the criminal liability
for the violation of Section 25 of Presidential Decree No. 957 would
evaporate, thereby negating the need to proceed with the criminal
case.
Worthy to note at this juncture is that a prejudicial question need not
conclusively resolve the guilt or innocence of the accused. It is enough
for the prejudicial question to simply test the sufficiency of the
allegations in the information in order to sustain the further prosecution
of the criminal case. A party who raises a prejudicial question is
deemed to have hypothetically admitted that all the essential elements
of the crime have been adequately alleged in the information,
considering that the Prosecution has not yet presented a single piece
of evidence on the indictment or may not have rested its case. A
challenge to the allegations in the information on the ground of
prejudicial question is in effect a question on the merits of the criminal
charge through a non-criminal suit.30
2.
Doctrine of primary jurisdiction is applicable
That the action for specific performance was an administrative case
pending in the HLURB, instead of in a court of law, was of no
consequence at all. As earlier mentioned, the action for specific
performance, although civil in nature, could be brought only in the
HLURB. This situation conforms to the doctrine of primary jurisdiction.
There has been of late a proliferation of administrative agencies,
mostly regulatory in function. It is in favor of these agencies that the
doctrine of primary jurisdiction is frequently invoked, not to defeat the
resort to the judicial adjudication of controversies but to rely on the
expertise, specialized skills, and knowledge of such agencies in their
resolution. The Court has observed that one thrust of the proliferation
is that the interpretation of contracts and the determination of private
rights under contracts are no longer a uniquely judicial function
exercisable only by the regular courts.31
The doctrine of primary jurisdiction has been increasingly called into
play on matters demanding the special competence of administrative
agencies even if such matters are at the same time within the
jurisdiction of the courts. A case that requires for its determination the
expertise, specialized skills, and knowledge of some administrative
board or commission because it involves technical matters or intricate
questions of fact, relief must first be obtained in an appropriate
administrative proceeding before a remedy will be supplied by the
courts although the matter comes within the jurisdiction of the courts.
The application of the doctrine does not call for the dismissal of the
case in the court but only for its suspension until after the matters
within the competence of the administrative body are threshed out and
determined.32
To accord with the doctrine of primary jurisdiction, the courts cannot
and will not determine a controversy involving a question within the
competence of an administrative tribunal, the controversy having been
so placed within the special competence of the administrative tribunal
under a regulatory scheme. In that instance, the judicial process is
suspended pending referral to the administrative body for its view on
the matter in dispute. Consequently, if the courts cannot resolve a
question that is within the legal competence of an administrative body
prior to the resolution of that question by the latter, especially where
the question demands the exercise of sound administrative discretion
requiring the special knowledge, experience, and services of the
administrative agency to ascertain technical and intricate matters of
fact, and a uniformity of ruling is essential to comply with the purposes
of the regulatory statute administered, suspension or dismissal of the
action is proper.33
3.
Other submissions of petitioner are unwarranted
It is not tenable for San Miguel Properties to argue that the character of
a violation of Section 25 of Presidential Decree No. 957 as malum
prohibitum, by which criminal liability attached to BF Homes’ directors
and officers by the mere failure to deliver the TCTs, already rendered
the suspension unsustainable.34 The mere fact that an act or omission
was malum prohibitum did not do away with the initiative inherent in
every court to avoid an absurd result by means of rendering a
reasonable interpretation and application of the procedural law. Indeed,
the procedural law must always be given a reasonable construction to
preclude absurdity in its application. 35 Hence, a literal application of the
principle governing prejudicial questions is to be eschewed if such
application would produce unjust and absurd results or unreasonable
consequences.
San Miguel Properties further submits that respondents could not
validly raise the prejudicial question as a reason to suspend the
criminal proceedings because respondents had not themselves
initiated either the action for specific performance or the criminal
action.1âwphi1 It contends that the defense of a prejudicial question
arising from the filing of a related case could only be raised by the
party who filed or initiated said related case.
The submission is unfounded. The rule on prejudicial question makes
no distinction as to who is allowed to raise the defense. Ubi lex non
distinguit nec nos distinguere debemos. When the law makes no
distinction, we ought not to distinguish.36
WHEREFORE, the Court AFFIRMS the decision promulgated on
February 24, 2004 by the Court of Appeals in CA-G.R. SP NO. 73008;
and ORDERS petitioner to pay the costs of suit.
SO ORDERED.
VERONICO TENEBRO, petitioner
vs.
THE HONORABLE COURT OF APPEALS, respondent.
DECISION
YNARES-SANTIAGO, J.:
We are called on to decide the novel issue concerning the effect of the
judicial declaration of the nullity of a second or subsequent marriage,
on the ground of psychological incapacity, on an individual’s criminal
liability for bigamy. We hold that the subsequent judicial declaration of
nullity of marriage on the ground of psychological incapacity does not
retroact to the date of the celebration of the marriage insofar as the
Philippines’ penal laws are concerned. As such, an individual who
contracts a second or subsequent marriage during the subsistence of a
valid marriage is criminally liable for bigamy, notwithstanding the
subsequent declaration that the second marriage is void ab initio on
the ground of psychological incapacity.
Petitioner in this case, Veronico Tenebro, contracted marriage with
private complainant Leticia Ancajas on April 10, 1990. The two were
wed by Judge Alfredo B. Perez, Jr. of the City Trial Court of Lapu-lapu
City. Tenebro and Ancajas lived together continuously and without
interruption until the latter part of 1991, when Tenebro informed
Ancajas that he had been previously married to a certain Hilda
Villareyes on November 10, 1986. Tenebro showed Ancajas a
photocopy of a marriage contract between him and Villareyes. Invoking
this previous marriage, petitioner thereafter left the conjugal dwelling
which he shared with Ancajas, stating that he was going to cohabit with
Villareyes.1
On January 25, 1993, petitioner contracted yet another marriage, this
one with a certain Nilda Villegas, before Judge German Lee, Jr. of the
Regional Trial Court of Cebu City, Branch 15. 2 When Ancajas learned
of this third marriage, she verified from Villareyes whether the latter
was indeed married to petitioner. In a handwritten letter, 3 Villareyes
confirmed that petitioner, Veronico Tenebro, was indeed her husband.
Ancajas thereafter filed a complaint for bigamy against petitioner. 4 The
Information,5 which was docketed as Criminal Case No. 013095-L,
reads:
That on the 10th day of April 1990, in the City of Lapu-lapu,
Philippines, and within the jurisdiction of this Honorable Court, the
aforenamed accused, having been previously united in lawful marriage
with Hilda Villareyes, and without the said marriage having been legally
dissolved, did then and there willfully, unlawfully and feloniously
contract a second marriage with LETICIA ANCAJAS, which second or
subsequent marriage of the accused has all the essential requisites for
validity were it not for the subsisting first marriage.
CONTRARY TO LAW.
When arraigned, petitioner entered a plea of "not guilty". 6
During the trial, petitioner admitted having cohabited with Villareyes
from 1984-1988, with whom he sired two children. However, he denied
that he and Villareyes were validly married to each other, claiming that
no marriage ceremony took place to solemnize their union. 7 He alleged
that he signed a marriage contract merely to enable her to get the
allotment from his office in connection with his work as a seaman. 8 He
further testified that he requested his brother to verify from the Civil
Register in Manila whether there was any marriage at all between him
and Villareyes, but there was no record of said marriage.9
On November 10, 1997, the Regional Trial Court of Lapu-lapu City,
Branch 54, rendered a decision finding the accused guilty beyond
reasonable doubt of the crime of bigamy under Article 349 of the
Revised Penal Code, and sentencing him to four (4) years and two (2)
months of prision correccional, as minimum, to eight (8) years and one
(1) day of prision mayor, as maximum. 10 On appeal, the Court of
Appeals affirmed the decision of the trial court. Petitioner’s motion for
reconsideration was denied for lack of merit.
Hence, the instant petition for review on the following assignment of
errors:
I. THE HONORABLE COURT OF APPEALS GRAVELY
ERRED, AND THIS ERROR IS CORRECTIBLE IN THIS
APPEAL – WHEN IT AFFIRMED THE DECISION OF THE
HONORABLE COURT A QUO CONVICTING THE
ACCUSED FOR (sic) THE CRIME OF BIGAMY, DESPITE
THE NON-EXISTENCE OF THE FIRST MARRIAGE AND
INSUFFICIENCY OF EVIDENCE.
II. THE COURT ERRED IN CONVICTING THE ACCUSED
FOR (sic) THE CRIME OF BIGAMY DESPITE CLEAR
PROOF THAT THE MARRIAGE BETWEEN THE ACCUSED
AND PRIVATE COMPLAINANT HAD BEEN DECLARED
NULL AND VOID AB INITIO AND WITHOUT LEGAL
FORCE AND EFFECT.11
After a careful review of the evidence on record, we find no cogent
reason to disturb the assailed judgment.
Under Article 349 of the Revised Penal Code, the elements of the
crime of Bigamy are:
(1) that the offender has been legally married;
(2) that the first marriage has not been legally dissolved or,
in case his or her spouse is absent, the absent spouse could
not yet be presumed dead according to the Civil Code;
(3) that he contracts a second or subsequent marriage; and
(4) that the second or subsequent marriage has all the
essential requisites for validity.12
Petitioner’s assignment of errors presents a two-tiered defense, in
which he (1) denies the existence of his first marriage to Villareyes,
and (2) argues that the declaration of the nullity of the second marriage
on the ground of psychological incapacity, which is an alleged indicator
that his marriage to Ancajas lacks the essential requisites for validity,
retroacts to the date on which the second marriage was celebrated. 13
Hence, petitioner argues that all four of the elements of the crime of
bigamy are absent, and prays for his acquittal.14
Petitioner’s defense must fail on both counts.
First, the prosecution presented sufficient evidence, both documentary
and oral, to prove the existence of the first marriage between petitioner
and Villareyes. Documentary evidence presented was in the form of:
(1) a copy of a marriage contract between Tenebro and Villareyes,
dated November 10, 1986, which, as seen on the document, was
solemnized at the Manila City Hall before Rev. Julieto Torres, a
Minister of the Gospel, and certified to by the Office of the Civil
Registrar of Manila; 15 and (2) a handwritten letter from Villareyes to
Ancajas dated July 12, 1994, informing Ancajas that Villareyes and
Tenebro were legally married. 16
To assail the veracity of the marriage contract, petitioner presented (1)
a certification issued by the National Statistics Office dated October 7,
1995;17 and (2) a certification issued by the City Civil Registry of
Manila, dated February 3, 1997. 18 Both these documents attest that the
respective issuing offices have no record of a marriage celebrated
between Veronico B. Tenebro and Hilda B. Villareyes on November 10,
1986.
To our mind, the documents presented by the defense cannot
adequately assail the marriage contract, which in itself would already
have been sufficient to establish the existence of a marriage between
Tenebro and Villareyes.
All three of these documents fall in the category of public documents,
and the Rules of Court provisions relevant to public documents are
applicable to all. Pertinent to the marriage contract, Section 7 of Rule
130 of the Rules of Court reads as follows:
Sec. 7. Evidence admissible when original document is a public record.
– When the original of a document is in the custody of a public officer
or is recorded in a public office, its contents may be proved by a
certified copy issued by the public officer in custody thereof (Emphasis
ours).
This being the case, the certified copy of the marriage contract, issued
by a public officer in custody thereof, was admissible as the best
evidence of its contents. The marriage contract plainly indicates that a
marriage was celebrated between petitioner and Villareyes on
November 10, 1986, and it should be accorded the full faith and
credence given to public documents.
Moreover, an examination of the wordings of the certification issued by
the National Statistics Office on October 7, 1995 and that issued by the
City Civil Registry of Manila on February 3, 1997 would plainly show
that neither document attests as a positive fact that there was no
marriage celebrated between Veronico B. Tenebro and Hilda B.
Villareyes on November 10, 1986. Rather, the documents merely attest
that the respective issuing offices have no record of such a marriage.
Documentary evidence as to the absence of a record is quite different
from documentary evidence as to the absence of a marriage
ceremony, or documentary evidence as to the invalidity of the marriage
between Tenebro and Villareyes.
The marriage contract presented by the prosecution serves as positive
evidence as to the existence of the marriage between Tenebro and
Villareyes, which should be given greater credence than documents
testifying merely as to absence of any record of the marriage,
especially considering that there is absolutely no requirement in the
law that a marriage contract needs to be submitted to the civil registrar
as a condition precedent for the validity of a marriage. The mere fact
that no record of a marriage exists does not invalidate the marriage,
provided all requisites for its validity are present. 19 There is no
evidence presented by the defense that would indicate that the
marriage between Tenebro and Villareyes lacked any requisite for
validity, apart from the self-serving testimony of the accused himself.
Balanced against this testimony are Villareyes’ letter, Ancajas’
testimony that petitioner informed her of the existence of the valid first
marriage, and petitioner’s own conduct, which would all tend to indicate
that the first marriage had all the requisites for validity.
Finally, although the accused claims that he took steps to verify the
non-existence of the first marriage to Villareyes by requesting his
brother to validate such purported non-existence, it is significant to
note that the certifications issued by the National Statistics Office and
the City Civil Registry of Manila are dated October 7, 1995 and
February 3, 1997, respectively. Both documents, therefore, are dated
after the accused’s marriage to his second wife, private respondent in
this case.
As such, this Court rules that there was sufficient evidence presented
by the prosecution to prove the first and second requisites for the crime
of bigamy.
The second tier of petitioner’s defense hinges on the effects of the
subsequent judicial declaration20 of the nullity of the second marriage
on the ground of psychological incapacity.
Petitioner argues that this subsequent judicial declaration retroacts to
the date of the celebration of the marriage to Ancajas. As such, he
argues that, since his marriage to Ancajas was subsequently declared
void ab initio, the crime of bigamy was not committed.21
This argument is not impressed with merit.
Petitioner makes much of the judicial declaration of the nullity of the
second marriage on the ground of psychological incapacity, invoking
Article 36 of the Family Code. What petitioner fails to realize is that a
declaration of the nullity of the second marriage on the ground of
psychological incapacity is of absolutely no moment insofar as the
State’s penal laws are concerned.
As a second or subsequent marriage contracted during the
subsistence of petitioner’s valid marriage to Villareyes, petitioner’s
marriage to Ancajas would be null and void ab initio completely
regardless of petitioner’s psychological capacity or incapacity. 22 Since
a marriage contracted during the subsistence of a valid marriage is
automatically void, the nullity of this second marriage is not per se an
argument for the avoidance of criminal liability for bigamy. Pertinently,
Article 349 of the Revised Penal Code criminalizes "any person who
shall contract a second or subsequent marriage before the former
marriage has been legally dissolved, or before the absent spouse has
been declared presumptively dead by means of a judgment rendered
in the proper proceedings". A plain reading of the law, therefore, would
indicate that the provision penalizes the mere act of contracting a
second or a subsequent marriage during the subsistence of a valid
marriage.
Thus, as soon as the second marriage to Ancajas was celebrated on
April 10, 1990, during the subsistence of the valid first marriage, the
crime of bigamy had already been consummated. To our mind, there is
no cogent reason for distinguishing between a subsequent marriage
that is null and void purely because it is a second or subsequent
marriage, and a subsequent marriage that is null and void on the
ground of psychological incapacity, at least insofar as criminal liability
for bigamy is concerned. The State’s penal laws protecting the
institution of marriage are in recognition of the sacrosanct character of
this special contract between spouses, and punish an individual’s
deliberate disregard of the permanent character of the special bond
between spouses, which petitioner has undoubtedly done.
Moreover, the declaration of the nullity of the second marriage on the
ground of psychological incapacity is not an indicator that petitioner’s
marriage to Ancajas lacks the essential requisites for validity. The
requisites for the validity of a marriage are classified by the Family
Code into essential (legal capacity of the contracting parties and their
consent freely given in the presence of the solemnizing officer) 23 and
formal (authority of the solemnizing officer, marriage license, and
marriage ceremony wherein the parties personally declare their
agreement to marry before the solemnizing officer in the presence of at
least two witnesses).24 Under Article 5 of the Family Code, any male or
female of the age of eighteen years or upwards not under any of the
impediments mentioned in Articles 3725 and 3826 may contract
marriage.27
In this case, all the essential and formal requisites for the validity of
marriage were satisfied by petitioner and Ancajas. Both were over
eighteen years of age, and they voluntarily contracted the second
marriage with the required license before Judge Alfredo B. Perez, Jr. of
the City Trial Court of Lapu-lapu City, in the presence of at least two
witnesses.
Although the judicial declaration of the nullity of a marriage on the
ground of psychological incapacity retroacts to the date of the
celebration of the marriage insofar as the vinculum between the
spouses is concerned, it is significant to note that said marriage is not
without legal effects. Among these effects is that children conceived or
born before the judgment of absolute nullity of the marriage shall be
considered legitimate.28 There is therefore a recognition written into the
law itself that such a marriage, although void ab initio, may still produce
legal consequences. Among these legal consequences is incurring
criminal liability for bigamy. To hold otherwise would render the State’s
penal laws on bigamy completely nugatory, and allow individuals to
deliberately ensure that each marital contract be flawed in some
manner, and to thus escape the consequences of contracting multiple
marriages, while beguiling throngs of hapless women with the promise
of futurity and commitment.
As such, we rule that the third and fourth requisites for the crime of
bigamy are present in this case, and affirm the judgment of the Court of
Appeals.
As a final point, we note that based on the evidence on record,
petitioner contracted marriage a third time, while his marriages to
Villareyes and Ancajas were both still subsisting. Although this is
irrelevant in the determination of the accused’s guilt for purposes of
this particular case, the act of the accused displays a deliberate
disregard for the sanctity of marriage, and the State does not look
kindly on such activities. Marriage is a special contract, the key
characteristic of which is its permanence. When an individual manifests
a deliberate pattern of flouting the foundation of the State’s basic social
institution, the State’s criminal laws on bigamy step in.
Under Article 349 of the Revised Penal Code, as amended, the penalty
for the crime of bigamy is prision mayor, which has a duration of six (6)
years and one (1) day to twelve (12) years. There being neither
aggravating nor mitigating circumstance, the same shall be imposed in
its medium period. Applying the Indeterminate Sentence Law,
petitioner shall be entitled to a minimum term, to be taken from the
penalty next lower in degree, i.e., prision correccional which has a
duration of six (6) months and one (1) day to six (6) years. Hence, the
Court of Appeals correctly affirmed the decision of the trial court which
sentenced petitioner to suffer an indeterminate penalty of four (4) years
and two (2) months of prision correccional, as minimum, to eight (8)
years and one (1) day of prision mayor, as maximum.
WHEREFORE, in view of all the foregoing, the instant petition for
review is DENIED. The assailed decision of the Court of Appeals in
CA-G.R. CR No. 21636, convicting petitioner Veronico Tenebro of the
crime of Bigamy and sentencing him to suffer the indeterminate penalty
of four (4) years and two (2) months of prision correccional, as
minimum, to eight (8) years and one (1) day of prision mayor, as
maximum, is AFFIRMED in toto.
SO ORDERED.
SALVADOR S. ABUNADO and ZENAIDA BIÑAS ABUNADO,
Petitioners,
vs.
PEOPLE OF THE PHILIPPINES, Responden
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to reverse and set aside the
decision1 of the Court of Appeals in CA-G.R. No. 26135 which affirmed
with modification the decision of the Regional Trial Court, Branch 77,
San Mateo, Rizal in Criminal Case No. 2803 convicting petitioner
Salvador S. Abunado of bigamy.
The records show that on September 18, 1967, Salvador married
Narcisa Arceño at the Manila City Hall before Rev. Pedro Tiangco. 2 In
1988 Narcisa left for Japan to work but returned to the Philippines in
1992, when she learned that her husband was having an extra-marital
affair and has left their conjugal home.
After earnest efforts, Narcisa found Salvador in Quezon City cohabiting
with Fe Corazon Plato. She also discovered that on January 10, 1989,
Salvador contracted a second marriage with a certain Zenaida Biñas
before Judge Lilian Dinulos Panontongan in San Mateo, Rizal.3
On January 19, 1995, an annulment case was filed by Salvador
against Narcisa.4 On May 18, 1995, a case for bigamy was filed by
Narcisa against Salvador and Zenaida.5
Salvador admitted that he first married Zenaida on December 24, 1955
before a municipal trial court judge in Concepcion, Iloilo and has four
children with her prior to their separation in 1966. It appeared however
that there was no evidence of their 1955 marriage so he and Zenaida
remarried on January 10, 1989, upon the request of their son for the
purpose of complying with the requirements for his commission in the
military.
On May 18, 2001, the trial court convicted petitioner Salvador Abunado
of bigamy and sentenced him to suffer imprisonment of six (6) years
and one (1) day, as minimum, to eight (8) years and one (1) day, as
maximum. Petitioner Zenaida Biñas was acquitted for insufficiency of
evidence.6
On appeal, the Court of Appeals affirmed with modification the decision
of the trial court, as follows:
WHEREFORE, the Decision appealed from is hereby MODIFIED as to
the penalty imposed but AFFIRMED in all other respects. Appreciating
the mitigating circumstance that accused is 76 years of age and
applying the provisions of the Indeterminate Sentence Law, the
appellant is hereby sentenced to suffer an indeterminate prison term of
two (2) years, four (4) months and one (1) day of prision correccional
as Minimum to six (6) years and one (1) day of prision mayor as
Maximum. No costs.
SO ORDERED.7
Petitioner is now before us on petition for review.
First, he argues that the Information was defective as it stated that the
bigamous marriage was contracted in 1995 when in fact it should have
been 1989.
Indeed, an accused has the right to be informed of the nature and
cause of the accusation against him.8 It is required that the acts and
omissions complained of as constituting the offense must be alleged in
the Information.9
The real nature of the crime charged is determined by the facts alleged
in the Information and not by the title or designation of the offense
contained in the caption of the Information. It is fundamental that every
element of which the offense is comprised must be alleged in the
Information. What facts and circumstances are necessary to be alleged
in the Information must be determined by reference to the definition
and essential elements of the specific crimes.10
The question, therefore, is whether petitioner has been sufficiently
informed of the nature and cause of the accusation against him,
namely, that he contracted a subsequent marriage with another woman
while his first marriage was subsisting.
The information against petitioner alleges:
That in or about and sometime in the month of January, 1995 at the
Municipality of San Mateo, Rizal place (sic) within the jurisdiction of this
Honorable Court, the above-named accused, having been legally
married to complainant Narcisa Abunado on September 16, 1967
which has not been legally dissolved, did then and there willfully,
unlawfully and feloniously contract a subsequent marriage to Zenaida
Biñas Abunado on January 10, 1989 which has all the essential
requisites of a valid marriage.
CONTRARY TO LAW.11
The statement in the information that the crime was committed "in or
about and sometime in the month of January, 1995," was an obvious
typographical error, for the same information clearly states that
petitioner contracted a subsequent marriage to Zenaida Biñas
Abunado on January 10, 1989. Petitioner’s submission, therefore, that
the information was defective is untenable.
The general rule is that a defective information cannot support a
judgment of conviction unless the defect was cured by evidence during
the trial and no objection appears to have been raised. 12 It should be
remembered that bigamy can be successfully prosecuted provided all
its elements concur – two of which are a previous marriage and a
subsequent marriage which possesses all the requisites for validity. 13
All of these have been sufficiently established by the prosecution
during the trial. Notably, petitioner failed to object to the alleged defect
in the Information during the trial and only raised the same for the first
time on appeal before the Court of Appeals.
Second, petitioner argues that Narcisa consented to his marriage to
Zenaida, which had the effect of absolving him of criminal liability.
In this regard, we agree with the Court of Appeals when it ruled, thus:
x x x, while he claims that there was condonation on the part of
complainant when he entered into a bigamous marriage, the same was
likewise not established by clear and convincing evidence. But then, a
pardon by the offended party does not extinguish criminal action
considering that a crime is committed against the State and the crime
of Bigamy is a public offense which can be denounced not only by the
person affected thereby but even by a civic-spirited citizen who may
come to know the same.14
Third, petitioner claims that his petition for annulment/declaration of
nullity of marriage was a prejudicial question, hence, the proceedings
in the bigamy case should have been suspended during the pendency
of the annulment case. Petitioner, in fact, eventually obtained a judicial
declaration of nullity of his marriage to Narcisa on October 29, 1999. 15
A prejudicial question has been defined as one based on a fact distinct
and separate from the crime but so intimately connected with it that it
determines the guilt or innocence of the accused, and for it to suspend
the criminal action, it must appear not only that said case involves facts
intimately related to those upon which the criminal prosecution would
be based but also that in the resolution of the issue or issues raised in
the civil case, the guilt or innocence of the accused would necessarily
be determined. The rationale behind the principle of suspending a
criminal case in view of a prejudicial question is to avoid two conflicting
decisions.16
The subsequent judicial declaration of the nullity of the first marriage
was immaterial because prior to the declaration of nullity, the crime had
already been consummated. Moreover, petitioner’s assertion would
only delay the prosecution of bigamy cases considering that an
accused could simply file a petition to declare his previous marriage
void and invoke the pendency of that action as a prejudicial question in
the criminal case. We cannot allow that.17
The outcome of the civil case for annulment of petitioner’s marriage to
Narcisa had no bearing upon the determination of petitioner’s
innocence or guilt in the criminal case for bigamy, because all that is
required for the charge of bigamy to prosper is that the first marriage
be subsisting at the time the second marriage is contracted.18
Thus, under the law, a marriage, even one which is void or voidable,
shall be deemed valid until declared otherwise in a judicial
proceeding.19 In this case, even if petitioner eventually obtained a
declaration that his first marriage was void ab initio, the point is, both
the first and the second marriage were subsisting before the first
marriage was annulled.
Finally, petitioner claims that the penalty imposed on him was
improper.
Article 349 of the Revised Penal Code imposes the penalty of prision
mayor for bigamy. Under the Indeterminate Sentence Law, the court
shall sentence the accused to an indeterminate penalty, the maximum
term of which shall be that which, in view of the attending
circumstances, could be properly imposed under the Revised Penal
Code, and the minimum term of which shall be within the range of the
penalty next lower to that prescribed by the Code for the offense. The
penalty next lower would be based on the penalty prescribed by the
Code for the offense, without first considering any modifying
circumstance attendant to the commission of the crime. The
determination of the minimum penalty is left by law to the sound
discretion of the court and it can be anywhere within the range of the
penalty next lower without any reference to the periods into which it
might be subdivided. The modifying circumstances are considered only
in the imposition of the maximum term of the indeterminate sentence.20
In light of the fact that petitioner is more than 70 years of age, 21 which
is a mitigating circumstance under Article 13, paragraph 2 of the
Revised Penal Code, the maximum term of the indeterminate sentence
should be taken from prision mayor in its minimum period which ranges
from six (6) years and one (1) day to eight (8) years, while the
minimum term should be taken from prision correccional in any of its
periods which ranges from six (6) months and one (1) day to six (6)
years.
Therefore, the penalty imposed by the Court of Appeals, i.e., two (2)
years, four (4) months and one (1) day of prision correccional, as
minimum, to six (6) years and one (1) day of prision mayor, as
maximum, is proper.
WHEREFORE, in view of the foregoing, the decision of the Court of
Appeals in CA-G.R. CR No. 26135, finding petitioner Salvador S.
Abunado guilty beyond reasonable doubt of the crime of bigamy, and
sentencing him to suffer an indeterminate penalty of two (2) years, four
(4) months and one (1) day of prision correccional, as minimum, to six
(6) years and one (1) day of prision mayor, as maximum, is
AFFIRMED.
Costs de oficio.
SO ORDERED.
LUCIO MORIGO y CACHO, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.
DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse the decision1
dated October 21, 1999 of the Court of Appeals in CA-G.R. CR No.
20700, which affirmed the judgment2 dated August 5, 1996 of the
Regional Trial Court (RTC) of Bohol, Branch 4, in Criminal Case No.
8688. The trial court found herein petitioner Lucio Morigo y Cacho
guilty beyond reasonable doubt of bigamy and sentenced him to a
prison term of seven (7) months of prision correccional as minimum to
six (6) years and one (1) day of prision mayor as maximum. Also
assailed in this petition is the resolution3 of the appellate court, dated
September 25, 2000, denying Morigo’s motion for reconsideration.
The facts of this case, as found by the court a quo, are as follows:
Appellant Lucio Morigo and Lucia Barrete were boardmates
at the house of Catalina Tortor at Tagbilaran City, Province
of Bohol, for a period of four (4) years (from 1974-1978).
After school year 1977-78, Lucio Morigo and Lucia Barrete
lost contact with each other.
In 1984, Lucio Morigo was surprised to receive a card from
Lucia Barrete from Singapore. The former replied and after
an exchange of letters, they became sweethearts.
In 1986, Lucia returned to the Philippines but left again for
Canada to work there. While in Canada, they maintained
constant communication.
In 1990, Lucia came back to the Philippines and proposed to
petition appellant to join her in Canada. Both agreed to get
married, thus they were married on August 30, 1990 at the
Iglesia de Filipina Nacional at Catagdaan, Pilar, Bohol.
On September 8, 1990, Lucia reported back to her work in
Canada leaving appellant Lucio behind.
On August 19, 1991, Lucia filed with the Ontario Court
(General Division) a petition for divorce against appellant
which was granted by the court on January 17, 1992 and to
take effect on February 17, 1992.
On October 4, 1992, appellant Lucio Morigo married Maria
Jececha Lumbago4 at the Virgen sa Barangay Parish,
Tagbilaran City, Bohol.
On September 21, 1993, accused filed a complaint for
judicial declaration of nullity of marriage in the Regional Trial
Court of Bohol, docketed as Civil Case No. 6020. The
complaint seek (sic) among others, the declaration of nullity
of accused’s marriage with Lucia, on the ground that no
marriage ceremony actually took place.
On October 19, 1993, appellant was charged with Bigamy in
an Information5 filed by the City Prosecutor of Tagbilaran
[City], with the Regional Trial Court of Bohol.6
The petitioner moved for suspension of the arraignment on the ground
that the civil case for judicial nullification of his marriage with Lucia
posed a prejudicial question in the bigamy case. His motion was
granted, but subsequently denied upon motion for reconsideration by
the prosecution. When arraigned in the bigamy case, which was
docketed as Criminal Case No. 8688, herein petitioner pleaded not
guilty to the charge. Trial thereafter ensued.
On August 5, 1996, the RTC of Bohol handed down its judgment in
Criminal Case No. 8688, as follows:
WHEREFORE, foregoing premises considered, the Court
finds accused Lucio Morigo y Cacho guilty beyond
reasonable doubt of the crime of Bigamy and sentences him
to suffer the penalty of imprisonment ranging from Seven (7)
Months of Prision Correccional as minimum to Six (6) Years
and One (1) Day of Prision Mayor as maximum.
SO ORDERED.7
In convicting herein petitioner, the trial court discounted petitioner’s
claim that his first marriage to Lucia was null and void ab initio.
Following Domingo v. Court of Appeals,8 the trial court ruled that want
of a valid marriage ceremony is not a defense in a charge of bigamy.
The parties to a marriage should not be allowed to assume that their
marriage is void even if such be the fact but must first secure a judicial
declaration of the nullity of their marriage before they can be allowed to
marry again.
Anent the Canadian divorce obtained by Lucia, the trial court cited
Ramirez v. Gmur,9 which held that the court of a country in which
neither of the spouses is domiciled and in which one or both spouses
may resort merely for the purpose of obtaining a divorce, has no
jurisdiction to determine the matrimonial status of the parties. As such,
a divorce granted by said court is not entitled to recognition anywhere.
Debunking Lucio’s defense of good faith in contracting the second
marriage, the trial court stressed that following People v. Bitdu,10
everyone is presumed to know the law, and the fact that one does not
know that his act constitutes a violation of the law does not exempt him
from the consequences thereof.
Seasonably, petitioner filed an appeal with the Court of Appeals,
docketed as CA-G.R. CR No. 20700.
Meanwhile, on October 23, 1997, or while CA-G.R. CR No. 20700 was
pending before the appellate court, the trial court rendered a decision
in Civil Case No. 6020 declaring the marriage between Lucio and Lucia
void ab initio since no marriage ceremony actually took place. No
appeal was taken from this decision, which then became final and
executory.
On October 21, 1999, the appellate court decided CA-G.R. CR No.
20700 as follows:
WHEREFORE, finding no error in the appealed decision, the
same is hereby AFFIRMED in toto.
SO ORDERED.11
In affirming the assailed judgment of conviction, the appellate court
stressed that the subsequent declaration of nullity of Lucio’s marriage
to Lucia in Civil Case No. 6020 could not acquit Lucio. The reason is
that what is sought to be punished by Article 34912 of the Revised
Penal Code is the act of contracting a second marriage before the first
marriage had been dissolved. Hence, the CA held, the fact that the first
marriage was void from the beginning is not a valid defense in a
bigamy case.
The Court of Appeals also pointed out that the divorce decree obtained
by Lucia from the Canadian court could not be accorded validity in the
Philippines, pursuant to Article 1513 of the Civil Code and given the
fact that it is contrary to public policy in this jurisdiction. Under Article
1714 of the Civil Code, a declaration of public policy cannot be
rendered ineffectual by a judgment promulgated in a foreign
jurisdiction.
Petitioner moved for reconsideration of the appellate court’s decision,
contending that the doctrine in Mendiola v. People,15 allows mistake
upon a difficult question of law (such as the effect of a foreign divorce
decree) to be a basis for good faith.
On September 25, 2000, the appellate court denied the motion for lack
of merit.16 However, the denial was by a split vote. The ponente of the
appellate court’s original decision in CA-G.R. CR No. 20700, Justice
Eugenio S. Labitoria, joined in the opinion prepared by Justice
Bernardo P. Abesamis. The dissent observed that as the first marriage
was validly declared void ab initio, then there was no first marriage to
speak of. Since the date of the nullity retroacts to the date of the first
marriage and since herein petitioner was, in the eyes of the law, never
married, he cannot be convicted beyond reasonable doubt of bigamy.
The present petition raises the following issues for our resolution:
A.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
FAILING TO APPLY THE RULE THAT IN CRIMES
PENALIZED UNDER THE REVISED PENAL CODE,
CRIMINAL INTENT IS AN INDISPENSABLE REQUISITE.
COROLLARILY, WHETHER OR NOT THE COURT OF
APPEALS ERRED IN FAILING TO APPRECIATE [THE]
PETITIONER’S LACK OF CRIMINAL INTENT WHEN HE
CONTRACTED THE SECOND MARRIAGE.
B.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
HOLDING THAT THE RULING IN PEOPLE VS. BITDU (58
PHIL. 817) IS APPLICABLE TO THE CASE AT BAR.
C.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN
FAILING TO APPLY THE RULE THAT EACH AND EVERY
CIRCUMSTANCE FAVORING THE INNOCENCE OF THE
ACCUSED MUST BE TAKEN INTO ACCOUNT.17
To our mind, the primordial issue should be whether or not petitioner
committed bigamy and if so, whether his defense of good faith is valid.
The petitioner submits that he should not be faulted for relying in good
faith upon the divorce decree of the Ontario court. He highlights the
fact that he contracted the second marriage openly and publicly, which
a person intent upon bigamy would not be doing. The petitioner further
argues that his lack of criminal intent is material to a conviction or
acquittal in the instant case. The crime of bigamy, just like other
felonies punished under the Revised Penal Code, is mala in se, and
hence, good faith and lack of criminal intent are allowed as a complete
defense. He stresses that there is a difference between the intent to
commit the crime and the intent to perpetrate the act. Hence, it does
not necessarily follow that his intention to contract a second marriage
is tantamount to an intent to commit bigamy.
For the respondent, the Office of the Solicitor General (OSG) submits
that good faith in the instant case is a convenient but flimsy excuse.
The Solicitor General relies upon our ruling in Marbella-Bobis v.
Bobis,18 which held that bigamy can be successfully prosecuted
provided all the elements concur, stressing that under Article 4019 of
the Family Code, a judicial declaration of nullity is a must before a
party may re-marry. Whether or not the petitioner was aware of said
Article 40 is of no account as everyone is presumed to know the law.
The OSG counters that petitioner’s contention that he was in good faith
because he relied on the divorce decree of the Ontario court is negated
by his act of filing Civil Case No. 6020, seeking a judicial declaration of
nullity of his marriage to Lucia.
Before we delve into petitioner’s defense of good faith and lack of
criminal intent, we must first determine whether all the elements of
bigamy are present in this case. In Marbella-Bobis v. Bobis,20 we laid
down the elements of bigamy thus:
(1) the offender has been legally married;
(2) the first marriage has not been legally dissolved, or in
case his or her spouse is absent, the absent spouse has not
been judicially declared presumptively dead;
(3) he contracts a subsequent marriage; and
(4) the subsequent marriage would have been valid had it
not been for the existence of the first.
Applying the foregoing test to the instant case, we note that during the
pendency of CA-G.R. CR No. 20700, the RTC of Bohol Branch 1,
handed down the following decision in Civil Case No. 6020, to wit:
WHEREFORE, premises considered, judgment is hereby
rendered decreeing the annulment of the marriage entered
into by petitioner Lucio Morigo and Lucia Barrete on August
23, 1990 in Pilar, Bohol and further directing the Local Civil
Registrar of Pilar, Bohol to effect the cancellation of the
marriage contract.
SO ORDERED.21
The trial court found that there was no actual marriage ceremony
performed between Lucio and Lucia by a solemnizing officer. Instead,
what transpired was a mere signing of the marriage contract by the
two, without the presence of a solemnizing officer. The trial court thus
held that the marriage is void ab initio, in accordance with Articles 322
and 423 of the Family Code. As the dissenting opinion in CA-G.R. CR
No. 20700, correctly puts it, "This simply means that there was no
marriage to begin with; and that such declaration of nullity retroacts to
the date of the first marriage. In other words, for all intents and
purposes, reckoned from the date of the declaration of the first
marriage as void ab initio to the date of the celebration of the first
marriage, the accused was, under the eyes of the law, never
married."24 The records show that no appeal was taken from the
decision of the trial court in Civil Case No. 6020, hence, the decision
had long become final and executory.
The first element of bigamy as a crime requires that the accused must
have been legally married. But in this case, legally speaking, the
petitioner was never married to Lucia Barrete. Thus, there is no first
marriage to speak of. Under the principle of retroactivity of a marriage
being declared void ab initio, the two were never married "from the
beginning." The contract of marriage is null; it bears no legal effect.
Taking this argument to its logical conclusion, for legal purposes,
petitioner was not married to Lucia at the time he contracted the
marriage with Maria Jececha. The existence and the validity of the first
marriage being an essential element of the crime of bigamy, it is but
logical that a conviction for said offense cannot be sustained where
there is no first marriage to speak of. The petitioner, must, perforce be
acquitted of the instant charge.
The present case is analogous to, but must be distinguished from
Mercado v. Tan.25 In the latter case, the judicial declaration of nullity of
the first marriage was likewise obtained after the second marriage was
already celebrated. We held therein that:
A judicial declaration of nullity of a previous marriage is
necessary before a subsequent one can be legally
contracted. One who enters into a subsequent marriage
without first obtaining such judicial declaration is guilty of
bigamy. This principle applies even if the earlier union is
characterized by statutes as "void."26
It bears stressing though that in Mercado, the first marriage was
actually solemnized not just once, but twice: first before a judge where
a marriage certificate was duly issued and then again six months later
before a priest in religious rites. Ostensibly, at least, the first marriage
appeared to have transpired, although later declared void ab initio.
In the instant case, however, no marriage ceremony at all was
performed by a duly authorized solemnizing officer. Petitioner and
Lucia Barrete merely signed a marriage contract on their own. The
mere private act of signing a marriage contract bears no semblance to
a valid marriage and thus, needs no judicial declaration of nullity. Such
act alone, without more, cannot be deemed to constitute an ostensibly
valid marriage for which petitioner might be held liable for bigamy
unless he first secures a judicial declaration of nullity before he
contracts a subsequent marriage.
The law abhors an injustice and the Court is mandated to liberally
construe a penal statute in favor of an accused and weigh every
circumstance in favor of the presumption of innocence to ensure that
justice is done. Under the circumstances of the present case, we held
that petitioner has not committed bigamy. Further, we also find that we
need not tarry on the issue of the validity of his defense of good faith or
lack of criminal intent, which is now moot and academic.
WHEREFORE, the instant petition is GRANTED. The assailed
decision, dated October 21, 1999 of the Court of Appeals in CA-G.R.
CR No. 20700, as well as the resolution of the appellate court dated
September 25, 2000, denying herein petitioner’s motion for
reconsideration, is REVERSED and SET ASIDE. The petitioner Lucio
Morigo y Cacho is ACQUITTED from the charge of BIGAMY on the
ground that his guilt has not been proven with moral certainty.
SO ORDERED.