YUCHENGCO v.

THE MANILA CHRONICLES

DOCTRINE: When malice in fact is proven, assertions and proofs that the libelous articles are qualifiedly
privileged communications are futile, since being qualifiedly privileged communications merely prevents
the presumption of malice from attaching in a defamatory imputation.

FACTS:

Plaintiff Alfonso T. Yuchengco alleges that in the last quarter of 1994, Chronicle Publishing Corporation
("Chronicle Publishing" for brevity) published in the Manila Chronicle a series of defamatory articles
against him. In two of the subject articles (November 10 and 12, 1993 issues), he was imputed to be a
"Marcos crony" or a "Marcos-Romualdez crony," which term according to him is commonly used and
understood in Philippine media to describe an individual who was a recipient of special and underserving
favors from former President Ferdinand E. Marcos and/or his brother-in-law Benjamin "Kokoy"
Romualdez due to special and extra-ordinary closeness to either or both, and which favors allowed an
individual to engage in illegal and dishonorable business activities.

The said articles further branded him as a mere front or dummy for the Marcos and Romualdez clans in
Benguet Corporation, which company sought to take-over the management of Oriental Petroleum Mineral
Corporation. Also, he was likewise accused of unsound and immoral business practices by insinuating
that he wanted to take control of Oriental in order to divert its resources to rescue the debt-ridden
Benguet Corporation.

The subject articles insinuated that he personally and intentionally caused the failure of Benguet
Corporation and that if even if he ever assumed control of Oriental, it would suffer the same fate as the
former. Moreover, one of the articles portrayed him as being an unfair and uncaring employer when the
employees of Grepalife Corporation, of which he is the Chairman, staged a strike, when the truth being
that he had nothing to do with it. And that if his group takes over Oriental, it will experience the same labor
problems as in Grepalife.

The subject articles accused him of inducing RCBC to violate the provisions of the General Banking Act
on DOSRI loans. Also, the plaintiff claims that the subject articles insinuated that he induced others to
disobey lawful orders of the SEC when the truth is that the officials of RCBC and Alcorn never defied any
SEC order, and that if ever they did, he never induced them to do so.

Finally, the plaintiff asserts that the subject articles imputed to him the derogatory tag of "corporate
raider," implying that he was seeking to profit for something he did not work for.

In their Answer, the defendants deny liability claiming that the subject articles were not defamatory since
they were composed and published in good faith and only after having ascertained their contents. In any
event, they claim that these articles are privileged and/or constitute reasonable and balance[d] comments
on matters of legitimate public interest which cannot serve as basis for the finding of libel against them.
They likewise alleged that they were acting within the bounds of constitutionally guaranteed freedom of
speech and of the press. They contend that since plaintiff is a public figure, and assuming that the articles
were indeed defamatory, they cannot be held liable for damages since they were not impelled by actual
malice in the composition thereof. They did not compose and/or publish said articles with the knowledge
that they contained falsehoods, or with reckless disregard on whether or not they contained falsehood.

The RTC rendered its Decision in favor of herein petitioner Alfonso T. Yuchengco.

CA affirmed.

ISSUES:

Whether the subject articles contain defamatory imputations. YES.

Whether CA committed grave reversible error in ruling that the subject articles in the complaint fall within
the concept of privileged communication. YES.

RULING:

Art. 353. Definition of Libel. — A libel is 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 or juridical person, or to blacken the memory of one who is
dead.

Based on this definition, this Court has held that four elements constitute the crime of libel, namely (a)
defamatory imputation tending to cause dishonor, discredit or contempt; (b) malice, either in law or in fact;
(c) publication; and (d) identifiability of the person defamed.

Libel can also be instituted, like in the case at bar, as a purely civil action, the cause of action for which is
provided by Article 33 of the Civil Code.

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.

The above elements of libel were adopted as well in a purely civil action for damages.

Of these four elements, the most apparent in the case at bar would be the publication of the alleged
imputation. Libel is published not only when it is widely circulated, but also when it is made known or
brought to the attention or notice of another person other than its author and the offended party. The
circulation of an allegedly libelous matter in a newspaper is certainly sufficient publication. We are thus
left with the determination of the existence of the three remaining elements of libel, namely: (1) the
defamatory imputation; (2) the identity of the person defamed; and (3) the existence of malice.

Defamatory Imputation

Defamation, which includes libel and slander, means the offense of injuring a person's character, fame or
reputation through false and malicious statements. It is that which tends to injure reputation or to diminish
esteem, respect, goodwill or confidence in the plaintiff, or to excite derogatory feelings or opinions about
the plaintiff. It is the publication of anything that is injurious to the good name or reputation of another or
tends to bring him into disrepute. In determining whether certain utterances are defamatory, the words
used are to be construed in their entirety and taken in their plain, natural and ordinary meaning, as they
would naturally be understood by persons hearing (or reading, as in libel) them, unless it appears that
they were used and understood in another sense.

In two of the subject articles, respondents allegedly accused and labeled Yuchengco as a Marcos crony,
who took advantage of his relationship with the former President to gain unwarranted benefits.

In determining the defamatory character of words used, the explanation of the respondent should not
prevail over what the utterances (or writing) convey to an ordinary listener (or reader). Furthermore, as
held by this Court in United States v. Sotto:

[F]or the purpose of determining the meaning of any publication alleged to be libelous "that construction
must be adopted which will give to the matter such a meaning as is natural and obvious in the plain and
ordinary sense in which the public would naturally understand what was uttered. The published matter
alleged to be libelous must be construed as a whole. In applying these rules to the language of an alleged
libel, the court will disregard any subtle or ingenious explanation offered by the publisher on being called
to account. The whole question being the effect the publication had upon the minds of the readers, and
they not having been assisted by the offered explanation in reading the article, it comes too late to have
the effect of removing the sting, if any there be, from the word used in the publication."
In finding that the phrase "Marcos crony" is derogatory, the trial court took judicial notice of the fact that
the said phrase, as understood in Philippine context, refers to an individual who was the recipient of
special and/or undeserved favors from the late President Marcos due to a special closeness to the latter.
This statement highlights the disgrace respondents wanted to associate with the term "crony," which was
used to describe Yuchengco in the very same article.

Even a cursory reading of the subject articles would show the intention of the writers to injure the
reputation, credit and virtue of Yuchengco and expose him to public hatred, discredit, contempt and
ridicule. The indirect manner in which the articles attributed the insults to Yuchengco (e.g., "the money
involved came from depositors, and not from Yuchengco") does not lessen the culpability of the writers
and publishers thereof, but instead makes the defamatory imputations even more effective. Words
calculated to induce suspicion are sometimes more effective to destroy reputation than false charges
directly made. Ironical and metaphorical language is a favored vehicle for slander.

In sum, this Court upholds the ruling of the trial court and the Court of Appeals that the subject articles
contain defamatory imputations.

Identification.

Defamatory words must refer to an ascertained or ascertainable person, and that person must be the
plaintiff. Statements are not libelous unless they refer to an ascertained or ascertainable person.
However, the obnoxious writing need not mention the libeled party by name. It is sufficient if it is shown
that the offended party is the person meant or alluded to.

In the case at bar, all but one of the subject articles explicitly mention the name of petitioner Yuchengco.
The lone article, which does not mention Yuchengco at all, "Bank runs & RCBC free loans". Identifying
Yuchengco in said article by name was, however, not necessary, since the other subject articles,
published a few days before and after this one, had already referred to Yuchengco as the owner of
RCBC. While the defamation of a large group does not give rise to a cause of action on the part of an
individual, this is subject to exception when it can be shown that he is the target of the defamatory matter.
This Court therefore finds that Yuchengco was clearly identified as the libeled party in the subject
defamatory imputations.

Malice.

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. It is present when it is
shown that the author of the libelous remarks made such remarks with knowledge that it was false or with
reckless disregard as to the truth or falsity thereof.

Malice, however, does not necessarily have to be proven. There are two types of malice — malice in law
and malice in fact. Malice in law is a presumption of law. It dispenses with the proof of malice when words
that raise the presumption are shown to have been uttered. It is also known as constructive malice, legal
malice, or implied malice. On the other hand, malice in fact is a positive desire and intention to annoy and
injure. It may denote that the defendant was actuated by ill will or personal spite. It is also called express
malice, actual malice, real malice, true malice, or particular malice.

In this jurisdiction, malice in law is provided in Article 354 of the Revised Penal Code, which also
enumerates exceptions thereto:

Art. 354. Requirement of 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,
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 o fficers in
the exercise of their functions.

There is, thus, a presumption of malice in the case of every defamatory imputation, where there is no
showing of a good intention or justifiable motive for making such imputation.

The exceptions provided in Article 354 are also known as qualifiedly privileged communications. The
enumeration under said article is, however, not an exclusive list of qualifiedly privileged communications
since fair commentaries on matters of public interest are likewise privileged. They are known as
qualifiedly privileged communications, since they are merely exceptions to the general rule requiring proof
of actual malice in order that a defamatory imputation may be held actionable. In other words, defamatory
imputations written or uttered during any of the three classes of qualifiedly privileged communications
enumerated above — (1) a private communication made by any person to another in the performance of
any legal, moral or social duty; (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; and (3) fair commentaries on matters of public interest —
may still be considered actionable if actual malice is proven. This is in contrast with absolutely privileged
communications, wherein the imputations are not actionable, even if attended by actual malice.

When malice in fact is proven, assertions and proofs that the libelous articles are qualifiedly privileged
communications are futile, since being qualifiedly privileged communications merely prevents the
presumption of malice from attaching to a defamatory imputation.

Neither is there any reason for this Court to reverse the findings of the trial court and the Court of Appeals
that there was actual malice on the part of the respondents. In In re: Emil P. Jurado, this Court ruled that
categorical denials of the truth of allegations in a publication place the burden upon the party publishing it,
either of proving the truth of the imputations or of showing that the same was an honest mistake or error
committed despite good efforts to arrive at the truth. There is actual malice when there is either (1)
knowledge of the publication's falsity; or (2) reckless disregard of whether the contents of the publication
were false or not. Failure to even get the side of Yuchengco in the published articles clearly constituted
reckless disregard of the truth or falsity of said articles.

Finally, even if we assume for the sake of argument that actual malice was not proven in the case at bar,
we cannot adhere to the finding of the CA in the Amended Decision that the subject articles were
fair commentaries on matters of public interest, and thus fell within the scope of the third type of
qualifiedly privileged communications.

In order to be considered as fair commentaries on matters of public interest, the individual to whom the
defamatory articles were imputed should either be a public officer or a public figure. However, an
examination of the subject articles reveals that the allegations therein pertain to Yuchengco's private
business endeavors and do not refer to his duties, functions and responsibilities as a Philippine
Ambassador to China and Japan, or to any of the other public positions he occupied. A topic or story
should not be considered a matter of public interest by the mere fact that the person involved is a public
officer, unless the said topic or story relates to his functions as such. Assuming a public office is not
tantamount to completely abdicating one's right to privacy. Therefore, for the purpose of determining
whether or not a topic is a matter of public interest, Yuchengco cannot be considered a public officer.
Neither is Yuchengco a public figure.

The records in the case at bar do not disclose any instance wherein Yuchengco had voluntarily thrust
himself to the forefront of particular public controversies in order to influence the resolution of the issues
involved. He cannot, therefore, be considered a public figure. Since Yuchengco, the person defamed in
the subject articles, is neither as public officer nor a public figure, said articles cannot be considered as
qualifiedly privileged communications even if they deal with matters of public concern.