Article 9: Duty of court to render judgment.

CHU JAN V. LUCIO BERNA G.R. No. L-10010; August 1, 1996

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-10010 August 1, 1916

CHU JAN, plaintiff-appellee,

vs.
LUCIO BERNAS, defendant-appellant.

Sulpicio V. Cea for appellant.

ARAULLO, J.:

On the afternoon of June 26, 1913, a match was held in the cockpit of the municipality of Tabaco, Albay,
between two cocks belonging to the plaintiff and to the defendant respectively. Each of said persons
had put up a wager of P160; and as the referee of the cockpit had declared the defendant's cock the
winner in the bout, the plaintiff brought suit against the defendant in the justice of the peace court of
the said pueblo, asking that his own rooster be declared the winner. The justice of the peace court
decided that the bout was a draw. From this judgment the defendant appealed to the Court of First
Instance of the province. For the purposes of the appeal, the plaintiff filed his complaint and prayed this
court to render judgment ordering the defendant to abide by and comply with the rules and regulations
governing cockfights, to pay the stipulated wager of P160; to return the other like amount (both sums
of wager being held for safe-keeping by the cockpit owner, Tomas Almonte) and to assess the costs of
both instances against the defendant.

The defendant denied each and all of the allegations of the complaint and moved to dismiss with the
costs against the plaintiff. On September 11, 1913, the said Court of First Instance rendered judgment
dismissing the appeal without special finding as to costs. The defendant excepted to this judgment as
well as to an order dictated by the same court on November 8th of the same year, on the plaintiff's
motion, ordering the provincial treasurer of Albay and, if necessary, the municipal treasurer of Tabaco
of the same province, to release the deposit of P160 and return it to its owner, the plaintiff Chinaman,
Chu Jan. These proceedings have come before us on appeal by means of the proper bill of exceptions.

The grounds for the dismissal pronounced by the lower court in the judgment appealed from ere that
the court has always dismissed cases of this nature, that he is not familiar with the rules governing
cockfights and the duties of referees thereof; that he does not know where to find the law on the subject
and, finally, that he knows of no law whatever that governs the rights to the plaintiff and the defendant
in questions concerning cockfights.

The ignorance of the court or his lack of knowledge regarding the law applicable to a case submitted
to him for decision, the fact that the court does not know the rules applicable to a certain matter that is
the subject of an appeal which must be decided by him and his not knowing where to find the law
relative to the case, are not reasons that can serve to excuse the court for terminating the proceedings
by dismissing them without deciding the issues. Such an excuse is the less acceptable because,
foreseeing that a case might arise to which no law would be exactly applicable, the Civil Code, in the
second paragraph of article 6, provides that the customs of the place shall be observed, and, in the
absence thereof, the general principles of law.

Therefore the judgment and the order appealed from, hereinbefore mentioned, are reversed and to
record of the proceedings shall remanded to the court from whence they came for due trial and
judgment as provided by law. No special finding is made with regard to costs. So ordered.
ARTICLE 10: INTERPRETATION AND APPLICATION OF LAWS
PEOPLE OF THE PHILIPPINES V. HON. JUDGE AMANTE P. PURISIMA GR No. L-42050-66;
November 20, 1978

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-42050-66 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HONORABLE JUDGE AMANTE P. PURISIMA, COURT OF FIRST INSTANCE OF MANILA,
BRANCH VII, and PORFIRIO CANDELOSAS, NESTOR BAES, ELIAS L. GARCIA, SIMEON
BUNDALIAN, JR., JOSEPH C. MAISO, EDUARDO A. LIBORDO, ROMEO L. SUGAY, FEDERICO
T. DIZON, GEORGE M. ALBINO, MARIANO COTIA, JR., ARMANDO L. DIZON, ROGELIO B.
PARENO, RODRIGO V. ESTRADA, ALFREDO A. REYES, JOSE A. BACARRA, REYNALDO
BOGTONG, and EDGARDO M. MENDOZA, respondents.

G.R. No. L-46229-32 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and
REYNALDO LAQUI Y AQUINO, ELPIDIO ARPON, VICTOR EUGENIO Y ROQUE and ALFREDO
VERSOZA, respondents.

G.R. No. L-46313-16 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and
JUANITO DE LA CRUZ Y NUNEZ, SABINO BUENO Y CACAL, TIRSO ISAGAN Y FRANCISCO
and BEN CASTILLO Y UBALDO, respondents.

G.R. No. L-46997 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
THE HONORABLE WENCESLAO M. POLO, Judge of the Court of First Instance of Samar, and
PANCHITO REFUNCION, respondents.

Jose L. Gamboa, Fermin Martin, Jr. & Jose D. Cajucom, Office of the City of Fiscal of Manila and the
Office of Provincial Fiscal of Samar for petitioners.

Norberto Parto for respondents Candelosas, Baes and Garcia.

Amado C. de la Marced for respondents Simeon Bundalian Jr., et al.

 Manuel F. de Jesus for all the respondents in L-46229-32 and L-46313-16.

Norberto L. Apostol for respondent Panchito Refuncion.

Hon. Amante P. Purisima for and in his own behalf.

MUÑOZ PALMA, J.:

These twenty-six (26) Petitions for Review filed by the People of the Philippines represented,
respectively, by the Office of the City Fiscal of Manila, the Office of the Provincial Fiscal of Samar, and
joined by the Solicitor General, are consolidated in this one Decision as they involve one basic question
of law.

These Petitions or appeals involve three Courts of First Instance, namely: the Court of First Instance of
Manila, Branch VII, presided by Hon. Amante P. Purisima (17 Petitions), the Court of First Instance of
Manila, Branch XVIII, presided by Hon. Maximo A. Maceren (8 Petitions) and, the Court of First Instance
of Samar, with Hon. Wenceslao M. Polo, presiding, (1 Petition).

Before those courts, Informations were filed charging the respective accused with "illegal possession
of deadly weapon" in violation of Presidential Decree No. 9. On a motion to quash filed by the accused,
the three Judges mentioned above issued in the respective cases filed before them — the details of
which will be recounted below — an Order quashing or dismissing the Informations, on a common
ground, viz, that the Information did not allege facts which constitute the offense penalized by
Presidential Decree No. 9 because it failed to state one essential element of the crime.

Thus, are the Informations filed by the People sufficient in form and substance to constitute the offense
of "illegal possession of deadly weapon" penalized under Presidential Decree (PD for short) No. 9?
This is the central issue which we shall resolve and dispose of, all other corollary matters not being
indispensable for the moment.

A — The Information filed by the People —

1. In L-42050-66, one typical Information filed with the Court presided by Judge Purisima follows:

THE PEOPLE OF THE PHILIPPINES, plaintiff, versus PORFIRIO CANDELOSAS Y

DURAN, accused.

Crim. Case No. 19639

VIOLATION OF PAR. 3, PRES. DECREE No. 9 OF PROCLAMATION 1081

INFORMATION

The undersigned accuses PORFIRIO CANDELOSAS Y DURAN of a violation of

paragraph 3, Presidential Decree No. 9 of Proclamation 1081, committed as follows:

That on or about the 14 th day of December, 1974, in the City of Manila, Philippines, the
said accused did then and there wilfully, unlawfully, feloniously and knowingly have in his
possession and under his custody and control one (1) carving knife with a blade of 6-½
 inches and a wooden handle of 5-1/4 inches, or an overall length of 11-¾ inches, which
the said accused carried outside of his residence, the said weapon not being used as a
tool or implement necessary to earn his livelihood nor being used in connection therewith.

Contrary to law. (p. 32, rollo of L-42050-66)

The other Informations are similarly worded except for the name of the accused, the date and place of
the commission of the crime, and the kind of weapon involved.

2. In L-46229-32 and L-46313-16, the Information filed with the Court presided by Judge Maceren
follows:

THE PEOPLE OF THE PHILIPPINES, plaintiff, versus REYNALDO LAQUI Y AQUINO,

accused.

CRIM. CASE NO.

29677

VIOL. OF PAR. 3,

PD 9 IN REL. TO
LOI

No. 266 of the Chief

Executive dated
April 1, 1975

INFORMATION

The undersigned accuses REYNALDO LAQUI Y AQUINO of a VIOLATION OF

PARAGRAPH 3, PRESIDENTIAL DECREE NO. 9 in relation to Letter of Instruction No.
266 of the Chief Executive dated April 1, 1975, committed as follows:

That on or about the 28 th day of January, 1977, in the City of Manila, Philippines, the
said accused did then and there wilfully, unlawfully and knowingly carry outside of his
residence a bladed and pointed weapon, to wit: an ice pick with an overall length of about
8½ inches, the same not being used as a necessary tool or implement to earn his
livelihood nor being used in connection therewith.

Contrary to law. (p. 14, rollo of L-46229-32)

The other Informations are likewise similarly worded except for the name of the accused, the date and
place of the commission of the crime, and the kind of weapon involved.

3. In L-46997, the Information before the Court of First Instance of Samar is quoted hereunder:

PEOPLE OF THE PHILIPPINES, complainant, versus PANCHITO REFUNCION,

accused.
 CRIM. CASE NO.
933

For:

ILLEGAL
POSSESSION OF

DEADLY WEAPON

(VIOLATION OF PD
NO. 9)

INFORMATION

The undersigned First Assistant Provincial Fiscal of Samar, accuses PANCHITO

REFUNCION of the crime of ILLEGAL POSSESSION OF DEADLY WEAPON or
VIOLATION OF PD NO. 9 issued by the President of the Philippines on Oct. 2, 1972,
pursuant to Proclamation No. 1081 dated Sept. 21 and 23, 1972, committed as follows:

That on or about the 6th day of October, 1976, in the evening at Barangay Barruz,
Municipality of Matuginao, Province of Samar Philippines, and within the jurisdiction of
this Honorabe Court, the abovenamed accused, knowingly, wilfully, unlawfully and
feloniously carried with him outside of his residence a deadly weapon called socyatan, an
instrument which from its very nature is no such as could be used as a necessary tool or
instrument to earn a livelihood, which act committed by the accused is a Violation of
Presidential Decree No. 9.

CONTRARY TO LAW. (p. 8, rollo of L-46997)

B. — The Orders of dismissal —

In dismissing or quashing the Informations the trial courts concurred with the submittal of the defense
that one essential element of the offense charged is missing from the Information, viz: that the carrying
outside of the accused's residence of a bladed, pointed or blunt weapon is in furtherance or on the
occasion of, connected with or related to subversion, insurrection, or rebellion, organized lawlessness
or public disorder.

1. Judge Purisima reasoned out, inter alia, in this manner:

... the Court is of the opinion that in order that possession of bladed weapon or the like
outside residence may be prosecuted and tried under P.D. No. 9, the information must
specifically allege that the possession of bladed weapon charged was for the purpose of
abetting, or in furtherance of the conditions of rampant criminality, organized lawlessness,
public disorder, etc. as are contemplated and recited in Proclamation No. 1081, as
justification therefor. Devoid of this specific allegation, not necessarily in the same words,
the information is not complete, as it does not allege sufficient facts to constitute the
offense contemplated in P.D. No. 9. The information in these cases under consideration
suffer from this defect.

xxx xxx xxx

 And while there is no proof of it before the Court, it is not difficult to believe the murmurings
of detained persons brought to Court upon a charge of possession of bladed weapons
under P.D. No. 9, that more than ever before, policemen - of course not all can be so
heartless — now have in their hands P.D. No. 9 as a most convenient tool for extortion,
what with the terrifying risk of being sentenced to imprisonment of five to ten years for a
rusted kitchen knife or a pair of scissors, which only God knows where it came from.
Whereas before martial law an extortion-minded peace officer had to have a stock of the
cheapest paltik, and even that could only convey the coercive message of one year in
jail, now anything that has the semblance of a sharp edge or pointed object, available
even in trash cans, may already serve the same purpose, and yet five to ten times more
incriminating than the infamous paltik.

For sure, P.D. No. 9 was conceived with the best of intentions and wisely applied, its
necessity can never be assailed. But it seems it is back-firing, because it is too hot in the
hands of policemen who are inclined to backsliding.

The checkvalves against abuse of P.D. No. 9 are to be found in the heart of the Fiscal
and the conscience of the Court, and hence this resolution, let alone technical legal basis,
is prompted by the desire of this Court to apply said checkvalves. (pp. 55-57, rollo of L-
42050-66)

2. Judge Maceren in turn gave his grounds for dismissing the charges as follows:

xxx xxx xxx

As earlier noted the "desired result" sought to be attained by Proclamation No. 1081 is
the maintenance of law and order throughout the Philippines and the prevention and
suppression of all forms of lawless violence as well as any act of insurrection or rebellion.
It is therefore reasonable to conclude from the foregoing premises that the carrying of
bladed, pointed or blunt weapons outside of one's residence which is made unlawful and
punishable by said par. 3 of P.D. No. 9 is one that abets subversion, insurrection or
rebellion, lawless violence, criminality, chaos and public disorder or is intended to bring
about these conditions. This conclusion is further strengthened by the fact that all
previously existing laws that also made the carrying of similar weapons punishable have
not been repealed, whether expressly or impliedly. It is noteworthy that Presidential
Decree No. 9 does not contain any repealing clause or provisions.

xxx xxx xxx

The mere carrying outside of one's residence of these deadly weapons if not concealed
in one's person and if not carried in any of the aforesaid specified places, would appear
to be not unlawful and punishable by law.

With the promulgation of Presidential Decree No. 9, however, the prosecution, through
Assistant Fiscal Hilario H. Laqui, contends in his opposition to the motion to quash, that
this act is now made unlawful and punishable, particularly by paragraph 3 thereof,
regardless of the intention of the person carrying such weapon because the law makes it
"mala prohibita". If the contention of the prosecution is correct, then if a person happens
to be caught while on his way home by law enforcement officers carrying a kitchen knife
that said person had just bought from a store in order that the same may be used by one's
cook for preparing the meals in one's home, such person will be liable for punishment
with such a severe penalty as imprisonment from five to ten years under the decree. Such
 person cannot claim that said knife is going to be used by him to earn a livelihood because
he intended it merely for use by his cook in preparing his meals.

This possibility cannot be discounted if Presidential Decree No. 9 were to be interpreted

and applied in the manner that that the prosecution wants it to be done. The good
intentions of the President in promulgating this decree may thus be perverted by some
unscrupulous law enforcement officers. It may be used as a tool of oppression and
tyranny or of extortion.

xxx xxx xxx

It is therefore the considered and humble view of this Court that the act which the
President intended to make unlawful and punishable by Presidential Decree No. 9,
particularly by paragraph 3 thereof, is one that abets or is intended to abet subversion,
rebellion, insurrection, lawless violence, criminality, chaos and public disorder. (pp. 28-
30, rollo of L-46229-32)

3. Judge Polo of the Court of First Instance of Samar expounded his order dismissing the Information
filed before him, thus:

... We believe that to constitute an offense under the aforcited Presidential decree, the
same should be or there should be an allegation that a felony was committed in
connection or in furtherance of subversion, rebellion, insurrection, lawless violence and
public disorder. Precisely Proclamation No. 1081 declaring a state of martial law
throughout the country was issued because of wanton destruction to lives and properties
widespread lawlessness and anarchy. And in order to restore the tranquility and stability
of the country and to secure the people from violence anti loss of lives in the quickest
possible manner and time, carrying firearms, explosives and deadly weapons without a
permit unless the same would fall under the exception is prohibited. This conclusion
becomes more compelling when we consider the penalty imposable, which is from five
years to ten years. A strict enforcement of the provision of the said law would mean the
imposition of the Draconian penalty upon the accused.

xxx xxx xxx

It is public knowledge that in rural areas, even before and during martial law, as a matter
of status symbol, carrying deadly weapons is very common, not necessarily for
committing a crime nor as their farm implement but for self-preservation or self-defense
if necessity would arise specially in going to and from their farm. (pp. 18-19, rollo of L-
46997)

In most if not all of the cases, the orders of dismissal were given before arraignment of the accused. In
the criminal case before the Court of (First Instance of Samar the accused was arraigned but at the
same time moved to quash the Information. In all the cases where the accused were under arrest, the
three Judges ordered their immediate release unless held on other charges.

C. — The law under which the Informations in question were filed by the People.

As seen from the Informations quoted above, the accused are charged with illegal possession of deadly
weapon in violation of Presidential Decree No. 9, Paragraph 3.

We quote in full Presidential Decree No. 9, to wit:

PRESIDENTIAL DECREE NO. 9

DECLARING VIOLATIONS OF GENERAL ORDERS NO. 6 and NO. 7 DATED

SEPTEMBER 22, 1972, AND SEPTEMBER 23, 1972, RESPECTIVELY, TO BE
UNLAWFUL AND PROVIDING PENALTIES THEREFORE.

WHEREAS, pursuant to Proclamation No. 1081 dated September 21, 1972, the
Philippines has been placed under a state of martial law;

WHEREAS, by virtue of said Proclamation No. 1081, General Order No. 6 dated
September 22, 1972 and General Order No. 7 dated September 23, 1972, have been
promulgated by me;

WHEREAS, subversion, rebellion, insurrection, lawless violence, criminality, chaos and

public disorder mentioned in the aforesaid Proclamation No. 1081 are committed and
abetted by the use of firearms, explosives and other deadly weapons;

NOW, THEREFORE, I, FERDINAND E. MARCOS, Commander-in-Chief of all the Armed

Forces of the Philippines, in older to attain the desired result of the aforesaid Proclamation
No. 1081 and General Orders Nos. 6 and 7, do hereby order and decree that:

1. Any violation of the aforesaid General Orders Nos. 6 and 7 is unlawful and the violator
shall, upon conviction suffer:

(a) The mandatory penalty of death by a firing squad or electrocution as a Military,

Court/Tribunal/Commission may direct, it the firearm involved in the violation is
unlicensed and is attended by assault upon, or resistance to persons in authority or their
agents in the performance of their official functions resulting in death to said persons in
authority or their agent; or if such unlicensed firearm is used in the commission of crimes
against persons, property or chastity causing the death of the victim used in violation of
any other General Orders and/or Letters of Instructions promulgated under said
Proclamation No. 1081:

(b) The penalty of imprisonment ranging from twenty years to life imprisonment as a
Military Court/Tribunal/commission may direct, when the violation is not attended by any
of the circumstances enumerated under the preceding paragraph;

(c) The penalty provided for in the preceding paragraphs shall be imposed upon the
owner, president, manager, members of the board of directors or other responsible
officers of any public or private firms, companies, corporations or entities who shall
willfully or knowingly allow any of the firearms owned by such firm, company, corporation
or entity concerned to be used in violation of said General Orders Nos. 6 and 7.

2. It is unlawful to posses deadly weapons, including hand grenades, rifle grenades and
other explosives, including, but not limited to, "pill box bombs," "molotov cocktail bombs,"
"fire bombs," or other incendiary device consisting of any chemical, chemical compound,
or detonating agents containing combustible units or other ingredients in such proportion,
quantity, packing, or bottling that ignites by fire, by friction, by concussion, by percussion,
or by detonation of all or part of the compound or mixture which may cause such a sudden
generation of highly heated gases that the resultant gaseous pressures are capable of
producing destructive effects on continguous objects or of causing injury or death of a
 person; and any person convicted thereof shall be punished by imprisonment ranging
from ten to fifteen years as a Military Court/Tribunal/Commission may direct.

3. It is unlawful to carry outside of residence any bladed, pointed or blunt weapon such
as "fan knife," "spear," "dagger," "bolo," "balisong," "barong," "kris," or club, except where
such articles are being used as necessary tools or implements to earn a livelihood and
while being used in connection therewith; and any person found guilty thereof shall suffer
the penalty of imprisonment ranging from five to ten years as a Military
Court/Tribunal/Commission may direct.

4. When the violation penalized in the preceding paragraphs 2 and 3 is committed during
the commission of or for the purpose of committing, any other crime, the penalty shall be
imposed upon the offender in its maximum extent, in addition to the penalty provided for
the particular offenses committed or intended to be committed.

Done in the City of Manila, this 2nd day of October in the year of Our Lord, nineteen
hundred and seventy-two.

(SGD) FERDINAND E. MARCOS

President

Republic of the Philippines

D. — The arguments of the People —

In the Comment filed in these cases by the Solicitor General who as stated earlier joins the City Fiscal
of Manila and the Provincial Fiscal of Samar in seeking the setting aside of the questioned orders of
dismissal, the main argument advanced on the issue now under consideration is that a perusal of
paragraph 3 of P.D. 9 'shows that the prohibited acts need not be related to subversive activities; that
the act proscribed is essentially a malum prohibitum penalized for reasons of public policy.1

The City Fiscal of Manila in his brief adds further that in statutory offenses the intention of the accused
who commits the act is immaterial; that it is enough if the prohibited act is voluntarily perpetuated; that
P.D. 9 provides and condemns not only the carrying of said weapon in connection with the commission
of the crime of subversion or the like, but also that of criminality in general, that is, to eradicate lawless
violence which characterized pre-martial law days. It is also argued that the real nature of the criminal
charge is determined not from the caption or preamble of the information nor from the specification of
the provision of law alleged to have been violated but by the actual recital of facts in the complaint or
information.2

E. — Our Ruling on the matter —

1. It is a constitutional right of any person who stands charged in a criminal prosecution to be informed
of the nature and cause of the accusation against him. 3

Pursuant to the above, Section 5, Rule 110 of the Rules of Court, expressly requires that for a complaint
or information to be sufficient it must, inter alia state the designation of the offense by the statute, and
the acts or omissions complained of as constituting the offense. This is essential to avoid surprise on
the accused and to afford him the opportunity to prepare his defense accordingly. 4
To comply with these fundamental requirements of the Constitution and the Rules on Criminal
Procedure, it is imperative for the specific statute violated to be designated or mentioned 4 in the
charge. In fact, another compelling reason exists why a specification of the statute violated is essential
in these cases. As stated in the order of respondent Judge Maceren the carrying of so-called "deadly
weapons" is the subject of another penal statute and a Manila city ordinance. Thus, Section 26 of Act
No. 1780 provides:

Section 26. It should be unlawful for any person to carry concealed about his person any
bowie knife, dirk dagger, kris, or other deadly weapon: ... Any person violating the
provisions of this section shall, upon conviction in a court of competent jurisdiction, be
punished by a fine not exceeding five hundred pesos, or by imprisonment for a period not
exceeding six months, or both such fine and imprisonment, in the discretion of the court.

Ordinance No. 3820 of the City of Manila as amended by Ordinance No. 3928 which took effect on
December 4, 1957, in turn penalizes with a fine of not more than P200.00 or imprisonment for not more
than one months, or both, at the discretion of the court, anyone who shall carry concealed in his person
in any manner that would disguise its deadly character any kind of firearm, bowie knife, or other deadly
weapon ... in any public place. Consequently, it is necessary that the particular law violated be specified
as there exists a substantial difference between the statute and city ordinance on the one hand and
P.D. 9 (3) on the other regarding the circumstances of the commission of the crime and the penalty
imposed for the offense.

We do not agree with petitioner that the above-mentioned statute and the city ordinance are deemed
repealed by P.D. 9 (3). 5 P. D. 9(3) does not contain any repealing clause or provision, and repeal by
implication is not favored. 6 This principle holds true with greater force with regards to penal statutes
which as a rule are to be construed strictly against the state and liberally in favor of the accused. 7 In
fact, Article 7 of the New Civil Code provides that laws are repealed only by subsequent ones and their
violation or non- observance shall not be excused by disuse, or custom or practice to the contrary.

Thus we are faced with the situation where a particular act may be made to fall, at the discretion of a
police officer or a prosecuting fiscal, under the statute, or the city ordinance, or the presidential decree.
That being the case, the right becomes more compelling for an accused to be confronted with the facts
constituting the essential elements of the offense charged against him, if he is not to become an easy
pawn of oppression and harassment, or of negligent or misguided official action — a fear
understandably shared by respondent Judges who by the nature of their judicial functions are daily
exposed to such dangers.

2. In all the Informations filed by petitioner the accused are charged in the caption as well as in the
body of the Information with a violation of paragraph 3, P.D. 9. What then are the elements of the
offense treated in the presidential decree in question?

We hold that the offense carries two elements: first, the carrying outside one's residence of any bladed,
blunt, or pointed weapon, etc. not used as a necessary tool or implement for a livelihood; and second,
that the act of carrying the weapon was either in furtherance of, or to abet, or in connection with
subversion, rebellion, insurrection, lawless violence, criminality, chaos, or public disorder.

It is the second element which removes the act of carrying a deadly weapon, if concealed, outside of
the scope of the statute or the city ordinance mentioned above. In other words, a simple act of carrying
any of the weapons described in the presidential decree is not a criminal offense in itself. What makes
the act criminal or punishable under the decree is the motivation behind it. Without that motivation, the
act falls within the purview of the city ordinance or some statute when the circumstances so warrant.
Respondent Judges correctly ruled that this can be the only reasonably, logical, and valid construction
given to P.D. 9(3).

3. The position taken by petitioner that P.D. 9(3) covers one and all situations where a person carries
outside his residence any of the weapons mentioned or described in the decree irrespective of
motivation, intent, or purpose, converts these cases into one of "statutory construction." That there is
ambiguity in the presidential decree is manifest from the conflicting views which arise from its
implementation. When ambiguity exists, it becomes a judicial task to construe and interpret the true
meaning and scope of the measure, guided by the basic principle that penal statutes are to be
construed and applied liberally in favor of the accused and strictly against the state.

4. In the construction or interpretation of a legislative measure — a presidential decree in these cases

— the primary rule is to search for and determine the intent and spirit of the law. Legislative intent is
the controlling factor, for in the words of this Court in Hidalgo v. Hidalgo, per Mr. Justice Claudio
Teehankee, whatever is within the spirit of a statute is within the statute, and this has to be so if strict
adherence to the letter would result in absurdity, injustice and contradictions. 8

There are certain aids available to Us to ascertain the intent or reason for P.D. 9(3).

First, the presence of events which led to or precipitated the enactment of P.D. 9. These events are
clearly spelled out in the "Whereas" clauses of the presidential decree, thus: (1) the state of martial law
in the country pursuant to Proclamation 1081 dated September 21, 1972; (2) the desired result of
Proclamation 1081 as well as General Orders Nos. 6 and 7 which are particularly mentioned in P.D. 9;
and (3) the alleged fact that subversion, rebellion, insurrection, lawless violence, criminality, chaos, aid
public disorder mentioned in Proclamation 1081 are committed and abetted by the use of firearms and
explosives and other deadly weapons.

The Solicitor General however contends that a preamble of a statute usually introduced by the word
"whereas", is not an essential part of an act and cannot enlarge or confer powers, or cure inherent
defects in the statute (p. 120, rollo of L-42050-66); that the explanatory note or enacting clause of the
decree, if it indeed limits the violation of the decree, cannot prevail over the text itself inasmuch as such
explanatory note merely states or explains the reason which prompted the issuance of the decree. (pp.
114-115, rollo of 46997)

We disagree with these contentions. Because of the problem of determining what acts fall within the
purview of P.D. 9, it becomes necessary to inquire into the intent and spirit of the decree and this can
be found among others in the preamble or, whereas" clauses which enumerate the facts or events
which justify the promulgation of the decree and the stiff sanctions stated therein.

A "preamble" is the key of the statute, to open the minds of the makers as to the mischiefs
which are to be remedied, and objects which are to be accomplished, by the provisions
of the statute." (West Norman Timber v. State, 224 P. 2d 635, 639, cited in Words and
Phrases, "Preamble"; emphasis supplied)

While the preamble of a statute is not strictly a part thereof, it may, when the statute is in
itself ambiguous and difficult of interpretation, be resorted to, but not to create a doubt or
uncertainty which otherwise does not exist." (James v. Du Bois, 16 N.J.L. (1 Har.) 285,
294, cited in Words and Phrases, "Preamble")

In Aboitiz Shipping Corporation, et al. v. The City of Cebu, et al. this Court had occasion to state that
'(L)egislative intent must be ascertained from a consideration of the statute as a whole, and not of an
isolated part or a particular provision alone. This is a cardinal rule of statutory construction. For taken
in the abstract, a word or phrase might easily convey a meaning quite different from the one actually
intended and evident when the word or phrase is considered with those with which it is associated.
Thus, an apparently general provision may have a limited application if read together with other
provisions. 9

Second, the result or effects of the presidential decree must be within its reason or intent.

In the paragraph immediately following the last "Whereas" clause, the presidential decree states:

NOW, THEREFORE, I , FERDINAND E. MARCOS, Commander-in-Chief of an the

Armed Forces of the Philippines, in order to attain the desired result of the aforesaid
Proclamation No. 1081 and General Orders Nos. 6 and 7, do hereby order and decree
that:

xxx xxx xxx

From the above it is clear that the acts penalized in P.D. 9 are those related to the desired
result of Proclamation 1081 and General Orders Nos. 6 and 7. General Orders Nos. 6
and 7 refer to firearms and therefore have no relevance to P.D. 9(3) which refers to blunt
or bladed weapons. With respect to Proclamation 1081 some of the underlying reasons
for its issuance are quoted hereunder:

WHEREAS, these lawless elements having taken up arms against our duly constituted
government and against our people, and having committed and are still committing acts
of armed insurrection and rebellion consisting of armed raids, forays, sorties, ambushes,
wanton acts of murders, spoilage, plunder, looting, arsons, destruction of public and
private buildings, and attacks against innocent and defenseless civilian lives and property,
all of which activities have seriously endangered and continue to endanger public order
and safety and the security of the nation, ...

xxx xxx xxx

WHEREAS, it is evident that there is throughout the land a state of anarchy and
lawlessness, chaos and disorder, turmoil and destruction of a magnitude equivalent to an
actual war between the forces of our duly constituted government and the New People's
Army and their satellite organizations because of the unmitigated forays, raids,
ambuscades, assaults, violence, murders, assassinations, acts of terror, deceits,
coercions, threats, intimidations, treachery, machinations, arsons, plunders and
depredations committed and being committed by the aforesaid lawless elements who
have pledged to the whole nation that they will not stop their dastardly effort and scheme
until and unless they have fully attained their primary and ultimate purpose of forcibly
seizing political and state power in this country by overthrowing our present duly
constituted government, ... (See Book I, Vital Documents on the Declaration of Martial
Law in the Philippines by the Supreme Court of the Philippines, pp. 13-39)

It follows that it is only that act of carrying a blunt or bladed weapon with a motivation connected with
or related to the afore-quoted desired result of Proclamation 1081 that is within the intent of P.D. 9(3),
and nothing else.

Statutes are to be construed in the light of purposes to be achieved and the evils sought
to be remedied. (U.S. v. American Tracking Association, 310 U.S. 534, cited in LVN
Pictures v. Philippine Musicians Guild, 110 Phil. 725, 731; emphasis supplied)
 When construing a statute, the reason for its enactment should be kept in mind, and the
statute should be construed with reference to its intended scope and purpose. (Statutory
Construction by E.T. Crawford, pp. 604-605, cited in Commissioner of Internal Revenue
v. Filipinas Compania de Seguros, 107 Phil. 1055, 1060; emphasis supplied)

5. In the construction of P.D. 9(3) it becomes relevant to inquire into the consequences of the measure
if a strict adherence to the letter of the paragraph is followed.

It is a salutary principle in statutory construction that there exists a valid presumption that undesirable
consequences were never intended by a legislative measure, and that a construction of which the
statute is fairly susceptible is favored, which will avoid all objectionable, mischievous, indefensible,
wrongful, evil, and injurious consequences.9-a

It is to be presumed that when P.D. 9 was promulgated by the President of the Republic there was no
intent to work a hardship or an oppressive result, a possible abuse of authority or act of oppression,
arming one person with a weapon to impose hardship on another, and so on.10

At this instance We quote from the order of Judge Purisima the following:

And while there is no proof of it before the Court, it is not difficult to believe the murmurings
of detained persons brought to Court upon a charge of possession of bladed weapons
under P.D. No. 9, that more than ever before, policemen - of course not all can be so
heartless — now have in their hands P.D. No. 9 as a most convenient tool for extortion,
what with the terrifying risk of being sentenced to imprisonment of five to ten years for a
rusted kitchen knife or a pair of scissors, which only God knows where it came from.
Whereas before martial law an extortion-minded peace officer had to have a stock of the
cheapest paltik, and even that could only convey the coercive message of one year in
jail, now anything that has the semblance of a sharp edge or pointed object, available
even in trash cans, may already serve the same purpose, and yet five to ten times more
incriminating than the infamous paltik. (pp. 72-73, rollo L-42050-66)

And as respondent Judge Maceren points out, the people's interpretation of P.D. 9(3) results in
absurdity at times. To his example We may add a situation where a law-abiding citizen, a lawyer by
profession, after gardening in his house remembers to return the bolo used by him to his neighbor who
lives about 30 meters or so away and while crossing the street meets a policeman. The latter upon
seeing the bolo being carried by that citizen places him under arrest and books him for a violation of
P.D. 9(3). Could the presidential decree have been conceived to produce such absurd, unreasonable,
and insensible results?

6. Penal statutes are to be construed strictly against the state and liberally in favor of an accused.

American jurisprudence sets down the reason for this rule to be "the tenderness of the law of the rights
of individuals; the object is to establish a certain rule by conformity to which mankind would be safe,
and the discretion of the court limited." 11 The purpose is not to enable a guilty person to escape
punishment through a technicality but to provide a precise definition of forbidden acts.12

Our own decisions have set down the same guidelines in this manner, viz:

Criminal statutes are to be construed strictly. No person should be brought within their
terms who is not clearly within them, nor should any act be pronounced criminal which is
not made clearly so by the statute. (U.S. v. Abad Santos, 36 Phil. 243, 246)
 The rule that penal statutes are given a strict construction is not the only factor controlling
the interpretation of such laws, instead, the rule merely serves as an additional, single
factor to be considered as an aid in determining the meaning of penal laws. (People v.
Manantan, 5 SCRA 684, 692)

F. The Informations filed by petitioner are fatally defective.

The two elements of the offense covered by P.D. 9(3) must be alleged in the Information in order that
the latter may constitute a sufficiently valid charged. The sufficiency of an Information is determined
solely by the facts alleged therein.13 Where the facts are incomplete and do not convey the elements
of the crime, the quashing of the accusation is in order.

Section 2(a), Rule 117 of the Rules of Court provides that the defendant may move to quash the
complaint or information when the facts charged do not constitute an offense.

In U.S.U. Gacutan, 1914, it was held that where an accused is charged with knowingly rendering an
unjust judgment under Article 204 of the Revised Penal Code, failure to allege in the Information that
the judgment was rendered knowing it to be unjust, is fatal. 14

In People v. Yadao, 1954, this Court through then Justice Cesar Bengzon who later became Chief
Justice of the Court affirmed an order of the trial court which quashed an Information wherein the facts
recited did not constitute a public offense as defined in Section 1, Republic Act 145. 15

G. The filing of these Petitions was unnecessary because the People could have availed itself of other
available remedies below.

Pertinent provisions of the Rules of Court follow:

Rule 117, Section 7. Effect of sustaining the motion to quash. — If the motion to quash is
sustained the court may order that another information be filed. If such order is made the
defendant, if in custody, shall remain so unless he shall be admitted to bail. If such order
is not made or if having been made another information is not filed withuntime to be
specified in the order, or within such further time as the court may allow for good cause
shown, the defendant, if in custody, shall be discharged therefrom, unless he is in custody
on some other charge.

Rule 110, Section 13. Amendment. — The information or complaint may be amended, in
substance or form, without leave of court, at any time before the defendant pleads; and
thereafter and during the trial as to all matters of form, by leave and at the discretion of
the court, when the same can be done without prejudice to the rights of the defendant.

xxx xxx xxx

Two courses of action were open to Petitioner upon the quashing of the Informations in these cases, viz:

First, if the evidence on hand so warranted, the People could have filed an amended Information to
include the second element of the offense as defined in the disputed orders of respondent Judges. We
have ruled that if the facts alleged in the Information do not constitute a punishable offense, the case
should not be dismissed but the prosecution should be given an opportunity to amend the Information. 16
Second, if the facts so justified, the People could have filed a complaint either under Section 26 of Act
No. 1780, quoted earlier, or Manila City Ordinance No. 3820, as amended by Ordinance No. 3928,
especially since in most if not all of the cases, the dismissal was made prior to arraignment of the
accused and on a motion to quash.

Section 8. Rule 117 states that:

An order sustaining the motion to quash is not a bar to another prosecution for the same
offense unless the motion was based on the grounds specified in section 2, subsections
(f) and (h) of this rule.

Under the foregoing, the filing of another complaint or Information is barred only when the criminal
action or liability had been extinguished (Section 2[f]) or when the motion to quash was granted for
reasons of double jeopardy. (ibid., [h])

As to whether or not a plea of double jeopardy may be successfully invoked by the accused in all these
cases should new complaints be filed against them, is a matter We need not resolve for the present.

H. — We conclude with high expectations that police authorities and the prosecuting arm of the
government true to the oath of office they have taken will exercise utmost circumspection and good
faith in evaluating the particular circumstances of a case so as to reach a fair and just conclusion if a
situation falls within the purview of P.D. 9(3) and the prosecution under said decree is warranted and
justified. This obligation becomes a sacred duty in the face of the severe penalty imposed for the
offense.

On this point, We commend the Chief State Prosecutor Rodolfo A. Nocon on his letter to the City Fiscal
of Manila on October 15, 1975, written for the Secretary, now Minister of Justice, where he stated the
following:

In any case, please study well each and every case of this nature so that persons accused
of carrying bladed weapons, specially those whose purpose is not to subvert the duly
constituted authorities, may not be unduly indicted for the serious offenses falling under
P.D. No. 9.17

Yes, while it is not within the power of courts of justice to inquire into the wisdom of a law, it is however
a judicial task and prerogative to determine if official action is within the spirit and letter of the law and
if basic fundamental rights of an individual guaranteed by the Constitution are not violated in the process
of its implementation. We have to face the fact that it is an unwise and unjust application of a law,
necessary and justified under prevailing circumstances, which renders the measure an instrument of
oppression and evil and leads the citizenry to lose their faith in their government.

WHEREFORE, We DENY these 26 Petitions for Review and We AFFIRM the Orders of respondent
Judges dismissing or quashing the Information concerned, subject however to Our observations made
in the preceding pages 23 to 25 of this Decision regarding the right of the State or Petitioner herein to
file either an amended Information under Presidential Decree No. 9, paragraph 3, or a new one under
other existing statute or city ordinance as the facts may warrant.

Without costs.

SO ORDERED.

Fernando, Teehankee, Santos, Fernandez and Guerrero, JJ., concur.

Castro, C.J. and Antonio, J, concur in the result.

Aquino, J, took no part.

Separate Opinions

BARREDO, J., concurring.

I concur with the qualification that under existing jurisprudence conviction is possible, without the need
of amending the information, for violation of other laws or ordinances on concealment of deadly
weapons.

Makasiar, J, concurs.

CONCEPCION, JR., J, concurring:

I concur with the additional observation that accused could properly be convicted of a violation of Act
1780 of the Philippine Commission or of the ordinance.

Separate Opinions

BARREDO, J., concurring.

I concur with the qualification that under existing jurisprudence conviction is possible, without the need
of amending the information, for violation of other laws or ordinances on concealment of deadly
weapons.

Makasiar, J, concurs.

CONCEPCION, JR., J, concurring:

I concur with the additional observation that accused could properly be convicted of a violation of Act
1780 of the Philippine Commission or of the ordinance.
Article 11 and 12: Customs
S.D. MARTINEZ vs. WILLIAM VAN BUSKIRK G.R. No. L-5691 December 27, 1910

SUPREME COURT
Manila

EN BANC

G.R. No. L-5691 December 27, 1910

S. D. MARTINEZ and his wife, CARMEN ONG DE MARTINEZ, plaintiffs-appellees,

vs.
WILLIAM VAN BUSKIRK, defendant-appellant.

Lionel D. Hargis for appellant.

Sanz and Oppisso for appellee.

MORELAND, J.:

The facts found by the trial court are undisputed by either party in this case. They are —

That on the 11th day of September, 1908, the plaintiff, Carmen Ong de Martinez, was riding in
a carromata on Calle Real, district of Ermita, city of Manila, P.I., along the left-hand side of the
street as she was going, when a delivery wagon belonging to the defendant used for the purpose
of transportation of fodder by the defendant, and to which was attached a pair of horses, came
along the street in the opposite direction to that the in which said plaintiff was proceeding, and
that thereupon the driver of the said plaintiff's carromata, observing that the delivery wagon of
the defendant was coming at great speed, crowded close to the sidewalk on the left-hand side
of the street and stopped, in order to give defendant's delivery wagon an opportunity to pass by,
but that instead of passing by the defendant's wagon and horses ran into the carromata occupied
by said plaintiff with her child and overturned it, severely wounding said plaintiff by making a
serious cut upon her head, and also injuring the carromata itself and the harness upon the horse
which was drawing it.

xxx xxx xxx

These facts are not dispute, but the defendant presented evidence to the effect that the cochero,
who was driving his delivery wagon at the time the accident occurred, was a good servant and
was considered a safe and reliable cochero; that the delivery wagon had sent to deliver some
forage at Paco Livery Stable on Calle Herran, and that for the purpose of delivery thereof the
cochero driving the team as defendant's employee tied the driving lines of the horses to the front
end of the delivery wagon and then went back inside of the wagon for the purpose of unloading
the forage to be delivered; that while unloading the forage and in the act of carrying some of it
out, another vehicle drove by, the driver of which cracked a whip and made some other noises,
which frightened the horses attached to the delivery wagon and they ran away, and the driver
was thrown from the inside of the wagon out through the rear upon the ground and was unable
 to stop the horses; that the horses then ran up and on which street they came into collision with
the carromata in which the plaintiff, Carmen Ong de Martinez, was riding.

The defendant himself was not with the vehicle on the day in question.

Upon these facts the court below found the defendant guilty of negligence and gave judgment against
him for P442.50, with interest thereon at the rate of 6 per cent per annum from the 17th day of October,
1908, and for the costs of the action. The case is before us on an appeal from that judgment.

There is no general law of negligence in the Philippine Islands except that embodied in the Civil Code.
The provisions of that code pertinent to this case are —

Art. 1902. A person who by an act or omission causes damage to another when there is fault or
negligence shall be obliged to repair the damage so done.

Art. 1903. The obligation imposed by preceding article is demandable, not only for personal acts
and omissions, but also for those of the persons for whom they should be responsible.

The father, and on his death or incapacity the mother, is liable for the damages caused by the
minors who live with them.

Guardians are liable for the damages caused by minors or incapacitated persons who are under
their authority and live with them.

Owners of directors of an establishment or enterprise are equally liable for the damages caused
by the employees in the service of the branches in which the latter may be employed or on
account of their duties.

The State is liable in this sense when it acts through a special agent, but not when the damages
should have been caused by the official to whom properly it pertained to do the act performed,
in which case the provisions of the preceding article shall be applicable.

Finally, masters or directors of arts and trades are liable for the damages caused by their pupils
or apprentices while they are under their custody.

The liability referred to in this article shall cease when the persons mentioned therein prove that
they employed all the diligence of a good father of a family to avoid the damage.

Passing the question whether or not an employer who has furnished a gentle and tractable team and
a trusty and capable driver is, under the last paragraph of the above provisions, liable for the negligence
of such driver in handling the team, we are of the opinion that the judgment must be reversed upon the
ground that the evidence does not disclose that the cochero was negligent.

While the law relating to negligence in this jurisdiction may possibly be some what different from that in
Anglo-Saxon countries, a question we do not now discuss, the rules under which the fact of negligence
is determined are, nevertheless, generally the same. That is to say, while the law designating
the person responsible for a negligent act may not be the same here as in many jurisdictions, the law
determining what is a negligent act is the same here, generally speaking, as elsewhere. (Supreme
court of Spain, 4 December, 1903; 16 May, 1893; 27 June, 1894; 9 April, 1896; 14 March, 1901; 2
March, 1904; 7 February, 1905; 16 June, 1905; 23 June, 1905; 13 April, 1903; 7 March, 1902; 12 June,
1900; 2 March, 1907; 18 March, 1898; 3 June, 1901.)
It appears from the undisputed evidence that the horses which caused the damage were gentle and
tractable; that the cochero was experienced and capable; that he had driven one of the horses several
years and the other five or six months; that he had been in the habit, during all that time, of leaving
them in the condition in which they were left on the day of the accident; that they had never run away
up to that time and there had been, therefore, no accident due to such practice; that to leave the horses
and assist in unloading the merchandise in the manner described on the day of the accident was the
custom of all cochero who delivered merchandise of the character of that which was being delivered
by the cochero of the defendant on the day in question, which custom was sanctioned by their
employers.

In our judgment, the cochero of the defendant was not negligent in leaving the horses in the manner
described by the evidence in this case, either under Spanish or American jurisprudence.
(Lynch vs. Nurdin, 1 Q. B., 422; Rumsey vs. Nelson, 58 Vt., 590; Drake vs. Mount, 33 N. J. L., 442;
Hoboken Land and Improvement Co. vs. Lally, 48 N. J. L., 604; Wasmer vs. D. L. & W. R. R. Co., 80
N. Y., 212.) lawphi1.net

In the case of Hayman vs. Hewitt (Peake N. P. Cas., pt. 2, p. 170), Lord Kenyon said:

He was performing his duty while removing the goods into the house, and, if every person who
suffered a cart to remain in the street while he took goods out of it was obliged to employ another
to look after the horses, it would be impossible for the business of the metropolis to go on.

In the case of Griggs vs. Fleckenstein (14 Minn., 81), the court said:

The degree of care required of the plaintiff, or those in charged of his horse, at the time of the
injury, is that which would be exercised by a person of ordinary care and prudence under like
circumstances. It can not be said that the fact of leaving the horse unhitched is in itself
negligence. Whether it is negligence to leave a horse unhitched must be depend upon the
disposition of the horse; whether he was under the observation and control of some person all
the time, and many other circumstances; and is a question to be determined by the jury from the
facts of each case.

In the case of Belles vs. Kellner (67 N. J. L., 255), it was held that it was error on the part of the trial
court to refuse to charge that "it is not negligence for the driver of a quite, gentle horse to leave him
unhitched and otherwise unattended on the side of a public highways while the driver is upon the
sidewalk loading goods on the wagon." The said court closed its opinion with these words:

There was evidence which could have fully justified the jury in finding that the horse was quite
and gentle, and that the driver was upon the sidewalk loading goods on the wagon, at time of
the alleged injury, and that the horse had been used for years in that way without accident. The
refusal of the trial court to charge as requested left the jury free to find was verdict against the
defendant, although the jury was convinced that these facts were proven.lawphil.net

In the case of Southworth vs. Ry. Co. (105 Mass., 342), it was held:

That evidence that a servant, whom traders employed to deliver goods, upon stopping with his
horse and wagon to deliver a parcel at a house from fifty to a hundred rods from a railroad
crossing, left the horse unfastened for four or five minutes while he was in the house, knowing
that it was not afraid of cars, and having used it for three or four months without ever hitching it
or knowing it to start, is not conclusive, as a matter of law, of a want of due care on his part.
The duty, a violation of which is claimed to be negligence in the respect in question, is to exercise
reasonable care and prudence. Where reasonable care is employed in doing an act not itself illegal or
inherently likely to produce damage to others, there will be no liability, although damage in fact ensues.
(Milwaukee Ry. Co. vs. Arms, 91 U. S., 489; Parrott vs. Wells, 15 Wall., 524; Brown vs. Kendall, 6
Cushing, 292; Jackson Architectural Iron Works vs. Hurlbut, 158 N. Y., 34 Westerfield vs. Levis, 43 La.
An., 63; Niosi vs. Empire Steam Laundry, 117 Cal., 257.)

The act of defendant's driver in leaving the horses in the manner proved was not unreasonable or
imprudent. Acts the performance of which has not proved destructive or injurious and which have,
therefore, been acquiesced in by society for so long a time that they have ripened into custom, can not
be held to be themselves unreasonable or imprudent. Indeed the very reason why they have been
permitted by society is that they beneficial rather than prejudicial.itc-alf Accidents sometimes happen
and injuries result from the most ordinary acts of life. But such are not their natural or customary results.
To hold that, because such an act once resulted in accident or injury, the actor is necessarily negligent,
is to go far. The fact that the doctrine of res ipsa loquitur is sometimes successfully invoked in such a
case, does not in any sense militate against the reasoning presented. That maxim at most only creates
a prima facie case, and that only in the absence of proof of the circumstances under which the act
complained of was performed. It is something invoked in favor of the plaintiff before defendant's case
showing the conditions and circumstances under which the injury occurred, the creative reason for the
doctrine of res ipsa loquitur disappears. This is demonstrated by the case of Inland and Seaboard
Costing Co. vs. Tolson (139 U.S., 551), where the court said (p. 554):

. . . The whole effect of the instruction in question, as applied to the case before the jury, was
that if the steamboat, on a calm day and in smooth water, was thrown with such force against a
wharf properly built, as to tear up some of the planks of the flooring, this would be prima
facie evidence of negligence on the part of the defendant's agent in making the landing, unless
upon the whole evidence in the case this prima facie evidence was rebutted. As such damage
to a wharf is not ordinarily done by a steamboat under control of her officers and carefully
managed by them, evidence that such damage was done in this case was prima facie, and, if
unexplained, sufficient evidence of negligence on their part, and the jury might properly be so
instructed.

There was presented in this case, and by the plaintiffs themselves, not only the fact of the runway and
the accident resulting therefrom, but also the conditions under which the runaway occurred. Those
conditions showing of themselves that the defendant's cochero was not negligent in the management
of the horse, the prima facie case in plaintiffs' favor, if any, was destroyed as soon as made.

It is a matter of common knowledge as well as proof that it is the universal practice of merchants to
deliver merchandise of the kind of that being delivered at the time of the injury, in the manner in which
that was then being delivered; and that it is the universal practice to leave the horses in the manner in
which they were left at the time of the accident. This is the custom in all cities. It has not been productive
of accidents or injuries. The public, finding itself unprejudiced by such practice, has acquiesced for
years without objection. Ought the public now, through the courts, without prior objection or notice, to
be permitted to reverse the practice of decades and thereby make culpable and guilty one who had
every reason and assurance to believe that he was acting under the sanction of the strongest of all civil
forces, the custom of a people? We think not.

The judgement is reversed, without special finding as to costs. So ordered.

Arellano, C. J., Mapa, Johnson, Carson and Trent, JJ., concur.

Separate Opinions
TORRES, J., dissenting:

I am of the opinion that the judgment should be affirmed.

Article 13: Computation of legal period

COMMISSIONER OF INTERNAL REVENUE V. PRIMETOWN PROPERTY GROUP, INC. G.R. No.

162255; August 28, 2007

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 162155 August 28, 2007

COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO in his official capacity

as Revenue District Officer of Revenue District No. 049 (Makati), Petitioners,
vs.
PRIMETOWN PROPERTY GROUP, INC., Respondent.

DECISION

CORONA, J.:

This petition for review on certiorari1 seeks to set aside the August 1, 2003 decision2 of the Court of
Appeals (CA) in CA-G.R. SP No. 64782 and its February 9, 2004 resolution denying reconsideration. 3

On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group, Inc., applied for
the refund or credit of income tax respondent paid in 1997. In Yap's letter to petitioner revenue district
officer Arturo V. Parcero of Revenue District No. 049 (Makati) of the Bureau of Internal Revenue
(BIR),4 he explained that the increase in the cost of labor and materials and difficulty in obtaining
financing for projects and collecting receivables caused the real estate industry to slowdown. 5 As a
consequence, while business was good during the first quarter of 1997, respondent suffered losses
amounting to ₱71,879,228 that year.6

According to Yap, because respondent suffered losses, it was not liable for income
taxes.7 Nevertheless, respondent paid its quarterly corporate income tax and remitted creditable
withholding tax from real estate sales to the BIR in the total amount of ₱26,318,398.32. 8 Therefore,
respondent was entitled to tax refund or tax credit. 9

On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional
documents to support its claim.10 Respondent complied but its claim was not acted upon. Thus, on April
14, 2000, it filed a petition for review11 in the Court of Tax Appeals (CTA).

On December 15, 2000, the CTA dismissed the petition as it was filed beyond the two-year prescriptive
period for filing a judicial claim for tax refund or tax credit. 12 It invoked Section 229 of the National
Internal Revenue Code (NIRC):

Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit or proceeding shall be
maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have
been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected
without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected,
until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding
may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress.

In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from
the date of payment of the tax or penalty regardless of any supervening cause that may arise
after payment: Provided, however, That the Commissioner may, even without a claim therefor, refund
or credit any tax, where on the face of the return upon which payment was made, such payment appears
clearly to have been erroneously paid. (emphasis supplied)

The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its right to claim
a refund or credit commenced on that date.13

The tax court applied Article 13 of the Civil Code which states:

Art. 13. When the law speaks of years, months, days or nights, it shall be understood that years are of
three hundred sixty-five days each; months, of thirty days; days, of twenty-four hours, and nights
from sunset to sunrise.

If the months are designated by their name, they shall be computed by the number of days which they
respectively have.

In computing a period, the first day shall be excluded, and the last included. (emphasis supplied)

Thus, according to the CTA, the two-year prescriptive period under Section 229 of the NIRC for the
filing of judicial claims was equivalent to 730 days. Because the year 2000 was a leap year,
respondent's petition, which was filed 731 days 14 after respondent filed its final adjusted return, was
filed beyond the reglementary period.15

Respondent moved for reconsideration but it was denied. 16 Hence, it filed an appeal in the CA.17

On August 1, 2003, the CA reversed and set aside the decision of the CTA. 18 It ruled that Article 13 of
the Civil Code did not distinguish between a regular year and a leap year. According to the CA:

The rule that a year has 365 days applies, notwithstanding the fact that a particular year is a leap year. 19

In other words, even if the year 2000 was a leap year, the periods covered by April 15, 1998 to April
14, 1999 and April 15, 1999 to April 14, 2000 should still be counted as 365 days each or a total of 730
days. A statute which is clear and explicit shall be neither interpreted nor construed.20

Petitioners moved for reconsideration but it was denied. 21 Thus, this appeal.

Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly construed
against claimants.22 Section 229 of the NIRC should be strictly applied against respondent inasmuch
as it has been consistently held that the prescriptive period (for the filing of tax refunds and tax credits)
begins to run on the day claimants file their final adjusted returns.23 Hence, the claim should have been
filed on or before April 13, 2000 or within 730 days, reckoned from the time respondent filed its final
adjusted return.

The conclusion of the CA that respondent filed its petition for review in the CTA within the two-year
prescriptive period provided in Section 229 of the NIRC is correct. Its basis, however, is not.
The rule is that the two-year prescriptive period is reckoned from the filing of the final adjusted
return.24 But how should the two-year prescriptive period be computed?

As already quoted, Article 13 of the Civil Code provides that when the law speaks of a year, it is
understood to be equivalent to 365 days. In National Marketing Corporation v. Tecson,25 we ruled that
a year is equivalent to 365 days regardless of whether it is a regular year or a leap year. 26

However, in 1987, EO27 292 or the Administrative Code of 1987 was enacted. Section 31, Chapter VIII,
Book I thereof provides:

Sec. 31. Legal Periods. — "Year" shall be understood to be twelve calendar months; "month" of
thirty days, unless it refers to a specific calendar month in which case it shall be computed according
to the number of days the specific month contains; "day", to a day of twenty-four hours and; "night" from
sunrise to sunset. (emphasis supplied)

A calendar month is "a month designated in the calendar without regard to the number of days it may
contain."28 It is the "period of time running from the beginning of a certain numbered day up to, but not
including, the corresponding numbered day of the next month, and if there is not a sufficient number of
days in the next month, then up to and including the last day of that month."29 To illustrate, one calendar
month from December 31, 2007 will be from January 1, 2008 to January 31, 2008; one calendar month
from January 31, 2008 will be from February 1, 2008 until February 29, 2008. 30

A law may be repealed expressly (by a categorical declaration that the law is revoked and abrogated
by another) or impliedly (when the provisions of a more recent law cannot be reasonably reconciled
with the previous one).31 Section 27, Book VII (Final Provisions) of the Administrative Code of 1987
states:

Sec. 27. Repealing clause. — All laws, decrees, orders, rules and regulation, or portions thereof,
inconsistent with this Code are hereby repealed or modified accordingly.

A repealing clause like Sec. 27 above is not an express repealing clause because it fails to identify or
designate the laws to be abolished.32 Thus, the provision above only impliedly repealed all laws
inconsistent with the Administrative Code of 1987.1avvphi1

Implied repeals, however, are not favored. An implied repeal must have been clearly and unmistakably
intended by the legislature. The test is whether the subsequent law encompasses entirely the subject
matter of the former law and they cannot be logically or reasonably reconciled.33

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code of
1987 deal with the same subject matter — the computation of legal periods. Under the Civil Code, a
year is equivalent to 365 days whether it be a regular year or a leap year. Under the Administrative
Code of 1987, however, a year is composed of 12 calendar months. Needless to state, under the
Administrative Code of 1987, the number of days is irrelevant.

There obviously exists a manifest incompatibility in the manner of computing legal periods under the
Civil Code and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter VIII,
Book I of the Administrative Code of 1987, being the more recent law, governs the computation of legal
periods. Lex posteriori derogat priori.

Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the two-year
prescriptive period (reckoned from the time respondent filed its final adjusted return34 on April 14, 1998)
consisted of 24 calendar months, computed as follows:
Year 1st calendar April 15, 1998 To May 14, 1998
1 month
2nd calendar May 15, 1998 To June 14, 1998
month
3rd calendar June 15, 1998 To July 14, 1998
month
4th calendar July 15, 1998 To August 14, 1998
month
5th calendar August 15, 1998 To September 14,
month 1998
6th calendar September 15, To October 14, 1998
month 1998
7th calendar October 15, 1998 To November 14,
month 1998
8th calendar November 15, To December 14,
month 1998 1998
9th calendar December 15, To January 14, 1999
month 1998
10th calendar January 15, 1999 To February 14,
month 1999
11th calendar February 15, To March 14, 1999
month 1999
12th calendar March 15, 1999 To April 14, 1999
month
Year 13th calendar April 15, 1999 To May 14, 1999
2 month
14th calendar May 15, 1999 To June 14, 1999
month
15th calendar June 15, 1999 To July 14, 1999
month
16th calendar July 15, 1999 To August 14, 1999
month
17th calendar August 15, 1999 To September 14,
month 1999
18th calendar September 15, To October 14, 1999
month 1999
19th calendar October 15, 1999 To November 14,
month 1999
20th calendar November 15, To December 14,
month 1999 1999
 21st calendar December 15, To January 14, 2000
month 1999
22nd calendar January 15, 2000 To February 14,
month 2000
23rd calendar February 15, To March 14, 2000
month 2000
24th calendar March 15, 2000 To April 14, 2000
month

We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of the
24th calendar month from the day respondent filed its final adjusted return. Hence, it was filed within
the reglementary period.

Accordingly, the petition is hereby DENIED. The case is REMANDED to the Court of Tax Appeals
which is ordered to expeditiously proceed to hear C.T.A. Case No. 6113 entitled Primetown Property
Group, Inc. v. Commissioner of Internal Revenue and Arturo V. Parcero.

No costs.

SO ORDERED.
Article 14: Obligatory force of penal laws

Article 15: Nationality rule

ALICE REYES VAN DORN v. HON. MANUEL V. ROMILLO, JR. L-68470; October 8, 1985

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-68470 October 8, 1985

ALICE REYES VAN DORN, petitioner,

vs.
HON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch CX, Regional Trial Court of the
National Capital Region Pasay City and RICHARD UPTON respondents.

MELENCIO-HERRERA, J.:\

In this Petition for certiorari and Prohibition, petitioner Alice Reyes Van Dorn seeks to set aside the
Orders, dated September 15, 1983 and August 3, 1984, in Civil Case No. 1075-P, issued by respondent
Judge, which denied her Motion to Dismiss said case, and her Motion for Reconsideration of the
Dismissal Order, respectively.

The basic background facts are that petitioner is a citizen of the Philippines while private respondent is
a citizen of the United States; that they were married in Hongkong in 1972; that, after the marriage,
they established their residence in the Philippines; that they begot two children born on April 4, 1973
and December 18, 1975, respectively; that the parties were divorced in Nevada, United States, in 1982;
and that petitioner has re-married also in Nevada, this time to Theodore Van Dorn.

Dated June 8, 1983, private respondent filed suit against petitioner in Civil Case No. 1075-P of the
Regional Trial Court, Branch CXV, in Pasay City, stating that petitioner's business in Ermita, Manila,
(the Galleon Shop, for short), is conjugal property of the parties, and asking that petitioner be ordered
to render an accounting of that business, and that private respondent be declared with right to manage
the conjugal property. Petitioner moved to dismiss the case on the ground that the cause of action is
barred by previous judgment in the divorce proceedings before the Nevada Court wherein respondent
had acknowledged that he and petitioner had "no community property" as of June 11, 1982. The Court
below denied the Motion to Dismiss in the mentioned case on the ground that the property involved is
located in the Philippines so that the Divorce Decree has no bearing in the case. The denial is now the
subject of this certiorari proceeding.

Generally, the denial of a Motion to Dismiss in a civil case is interlocutory and is not subject to appeal.
certiorari and Prohibition are neither the remedies to question the propriety of an interlocutory order of
the trial Court. However, when a grave abuse of discretion was patently committed, or the lower Court
acted capriciously and whimsically, then it devolves upon this Court in a certiorari proceeding to
exercise its supervisory authority and to correct the error committed which, in such a case, is equivalent
to lack of jurisdiction. 1 Prohibition would then lie since it would be useless and a waste of time to go
ahead with the proceedings. 2 Weconsider the petition filed in this case within the exception, and we
have given it due course.

For resolution is the effect of the foreign divorce on the parties and their alleged conjugal property in
the Philippines.

Petitioner contends that respondent is estopped from laying claim on the alleged conjugal property
because of the representation he made in the divorce proceedings before the American Court that they
had no community of property; that the Galleon Shop was not established through conjugal funds, and
that respondent's claim is barred by prior judgment.

For his part, respondent avers that the Divorce Decree issued by the Nevada Court cannot prevail over
the prohibitive laws of the Philippines and its declared national policy; that the acts and declaration of
a foreign Court cannot, especially if the same is contrary to public policy, divest Philippine Courts of
jurisdiction to entertain matters within its jurisdiction.

For the resolution of this case, it is not necessary to determine whether the property relations between
petitioner and private respondent, after their marriage, were upon absolute or relative community
property, upon complete separation of property, or upon any other regime. The pivotal fact in this case
is the Nevada divorce of the parties.

The Nevada District Court, which decreed the divorce, had obtained jurisdiction over petitioner who
appeared in person before the Court during the trial of the case. It also obtained jurisdiction over private
respondent who, giving his address as No. 381 Bush Street, San Francisco, California, authorized his
attorneys in the divorce case, Karp & Gradt Ltd., to agree to the divorce on the ground of incompatibility
in the understanding that there were neither community property nor community obligations. 3 As
explicitly stated in the Power of Attorney he executed in favor of the law firm of KARP & GRAD LTD.,
336 W. Liberty, Reno, Nevada, to represent him in the divorce proceedings:

xxx xxx xxx

You are hereby authorized to accept service of Summons, to file an Answer, appear on
my behalf and do an things necessary and proper to represent me, without further
contesting, subject to the following:

1. That my spouse seeks a divorce on the ground of incompatibility.

2. That there is no community of property to be adjudicated by the Court.

3. 'I'hat there are no community obligations to be adjudicated by the court.

xxx xxx xxx 4

There can be no question as to the validity of that Nevada divorce in any of the States of the United
States. The decree is binding on private respondent as an American citizen. For instance, private
respondent cannot sue petitioner, as her husband, in any State of the Union. What he is contending in
this case is that the divorce is not valid and binding in this jurisdiction, the same being contrary to local
law and public policy.

It is true that owing to the nationality principle embodied in Article 15 of the Civil Code, 5 only Philippine
nationals are covered by the policy against absolute divorces the same being considered contrary to
our concept of public police and morality. However, aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid according to their national law. 6 In this case, the
divorce in Nevada released private respondent from the marriage from the standards of American law,
under which divorce dissolves the marriage. As stated by the Federal Supreme Court of the United
States in Atherton vs. Atherton, 45 L. Ed. 794, 799:

The purpose and effect of a decree of divorce from the bond of matrimony by a court of
competent jurisdiction are to change the existing status or domestic relation of husband
and wife, and to free them both from the bond. The marriage tie when thus severed as to
one party, ceases to bind either. A husband without a wife, or a wife without a husband,
is unknown to the law. When the law provides, in the nature of a penalty. that the guilty
party shall not marry again, that party, as well as the other, is still absolutely freed from
the bond of the former marriage.

Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would
have no standing to sue in the case below as petitioner's husband entitled to exercise control over
conjugal assets. As he is bound by the Decision of his own country's Court, which validly exercised
jurisdiction over him, and whose decision he does not repudiate, he is estopped by his own
representation before said Court from asserting his right over the alleged conjugal property.

To maintain, as private respondent does, that, under our laws, petitioner has to be considered still
married to private respondent and still subject to a wife's obligations under Article 109, et. seq. of the
Civil Code cannot be just. Petitioner should not be obliged to live together with, observe respect and
fidelity, and render support to private respondent. The latter should not continue to be one of her heirs
with possible rights to conjugal property. She should not be discriminated against in her own country if
the ends of justice are to be served.

WHEREFORE, the Petition is granted, and respondent Judge is hereby ordered to dismiss the
Complaint filed in Civil Case No. 1075-P of his Court.

Without costs.

SO ORDERED.

Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., De la Fuente and Patajo, JJ., concur.
IMELDA MANALAYSAY PILAPIL v. HON. CORONA IBAY-SOMERA G.R. No. 80116; June 30, 1989

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 80116 June 30, 1989

IMELDA MANALAYSAY PILAPIL, petitioner,

vs.
HON. CORONA IBAY-SOMERA, in her capacity as Presiding Judge of the Regional Trial Court
of Manila, Branch XXVI; HON. LUIS C. VICTOR, in his capacity as the City Fiscal of Manila; and
ERICH EKKEHARD GEILING, respondents.

REGALADO, J.:

An ill-starred marriage of a Filipina and a foreigner which ended in a foreign absolute divorce, only to
be followed by a criminal infidelity suit of the latter against the former, provides Us the opportunity to
lay down a decisional rule on what hitherto appears to be an unresolved jurisdictional question.

On September 7, 1979, petitioner Imelda Manalaysay Pilapil, a Filipino citizen, and private respondent
Erich Ekkehard Geiling, a German national, were married before the Registrar of Births, Marriages and
Deaths at Friedensweiler in the Federal Republic of Germany. The marriage started auspiciously
enough, and the couple lived together for some time in Malate, Manila where their only child, Isabella
Pilapil Geiling, was born on April 20, 1980. 1

Thereafter, marital discord set in, with mutual recriminations between the spouses, followed by a
separation de facto between them.

After about three and a half years of marriage, such connubial disharmony eventuated in private
respondent initiating a divorce proceeding against petitioner in Germany before the Schoneberg Local
Court in January, 1983. He claimed that there was failure of their marriage and that they had been living
apart since April, 1982. 2

Petitioner, on the other hand, filed an action for legal separation, support and separation of property
before the Regional Trial Court of Manila, Branch XXXII, on January 23, 1983 where the same is still
pending as Civil Case No. 83-15866. 3

On January 15, 1986, Division 20 of the Schoneberg Local Court, Federal Republic of Germany,
promulgated a decree of divorce on the ground of failure of marriage of the spouses. The custody of
the child was granted to petitioner. The records show that under German law said court was locally and
internationally competent for the divorce proceeding and that the dissolution of said marriage was
legally founded on and authorized by the applicable law of that foreign jurisdiction. 4

On June 27, 1986, or more than five months after the issuance of the divorce decree, private
respondent filed two complaints for adultery before the City Fiscal of Manila alleging that, while still
married to said respondent, petitioner "had an affair with a certain William Chia as early as 1982 and
with yet another man named Jesus Chua sometime in 1983". Assistant Fiscal Jacinto A. de los Reyes,
Jr., after the corresponding investigation, recommended the dismissal of the cases on the ground of
insufficiency of evidence. 5 However, upon review, the respondent city fiscal approved a resolution,
dated January 8, 1986, directing the filing of two complaints for adultery against the petitioner. 6 The
complaints were accordingly filed and were eventually raffled to two branches of the Regional Trial
Court of Manila. The case entitled "People of the Philippines vs. Imelda Pilapil and William
Chia", docketed as Criminal Case No. 87-52435, was assigned to Branch XXVI presided by the
respondent judge; while the other case, "People of the Philippines vs. Imelda Pilapil and James Chua",
docketed as Criminal Case No. 87-52434 went to the sala of Judge Leonardo Cruz, Branch XXV, of
the same court. 7

On March 14, 1987, petitioner filed a petition with the Secretary of Justice asking that the aforesaid
resolution of respondent fiscal be set aside and the cases against her be dismissed. 8 A similar petition
was filed by James Chua, her co-accused in Criminal Case No. 87-52434. The Secretary of Justice,
through the Chief State Prosecutor, gave due course to both petitions and directed the respondent city
fiscal to inform the Department of Justice "if the accused have already been arraigned and if not yet
arraigned, to move to defer further proceedings" and to elevate the entire records of both cases to his
office for review. 9

Petitioner thereafter filed a motion in both criminal cases to defer her arraignment and to suspend
further proceedings thereon. 10 As a consequence, Judge Leonardo Cruz suspended proceedings in
Criminal Case No. 87-52434. On the other hand, respondent judge merely reset the date of the
arraignment in Criminal Case No. 87-52435 to April 6, 1987. Before such scheduled date, petitioner
moved for the cancellation of the arraignment and for the suspension of proceedings in said Criminal
Case No. 87-52435 until after the resolution of the petition for review then pending before the Secretary
of Justice. 11 A motion to quash was also filed in the same case on the ground of lack of
jurisdiction, 12 which motion was denied by the respondent judge in an order dated September 8, 1987.
The same order also directed the arraignment of both accused therein, that is, petitioner and William
Chia. The latter entered a plea of not guilty while the petitioner refused to be arraigned. Such refusal of
the petitioner being considered by respondent judge as direct contempt, she and her counsel were
fined and the former was ordered detained until she submitted herself for arraignment. 13 Later, private
respondent entered a plea of not guilty. 14

On October 27, 1987, petitioner filed this special civil action for certiorari and prohibition, with a prayer
for a temporary restraining order, seeking the annulment of the order of the lower court denying her
motion to quash. The petition is anchored on the main ground that the court is without jurisdiction "to
try and decide the charge of adultery, which is a private offense that cannot be prosecuted de
officio (sic), since the purported complainant, a foreigner, does not qualify as an offended spouse
having obtained a final divorce decree under his national law prior to his filing the criminal complaint." 15

On October 21, 1987, this Court issued a temporary restraining order enjoining the respondents from
implementing the aforesaid order of September 8, 1987 and from further proceeding with Criminal Case
No. 87-52435. Subsequently, on March 23, 1988 Secretary of Justice Sedfrey A. Ordoñez acted on the
aforesaid petitions for review and, upholding petitioner's ratiocinations, issued a resolution directing the
respondent city fiscal to move for the dismissal of the complaints against the petitioner. 16

We find this petition meritorious. The writs prayed for shall accordingly issue.

Under Article 344 of the Revised Penal Code, 17 the crime of adultery, as well as four other crimes
against chastity, cannot be prosecuted except upon a sworn written complaint filed by the offended
spouse. It has long since been established, with unwavering consistency, that compliance with this rule
is a jurisdictional, and not merely a formal, requirement. 18 While in point of strict law the jurisdiction of
the court over the offense is vested in it by the Judiciary Law, the requirement for a sworn written
complaint is just as jurisdictional a mandate since it is that complaint which starts the prosecutory
proceeding 19 and without which the court cannot exercise its jurisdiction to try the case.

Now, the law specifically provides that in prosecutions for adultery and concubinage the person who
can legally file the complaint should be the offended spouse, and nobody else. Unlike the offenses of
seduction, abduction, rape and acts of lasciviousness, no provision is made for the prosecution of the
crimes of adultery and concubinage by the parents, grandparents or guardian of the offended party.
The so-called exclusive and successive rule in the prosecution of the first four offenses above
mentioned do not apply to adultery and concubinage. It is significant that while the State, as parens
patriae, was added and vested by the 1985 Rules of Criminal Procedure with the power to initiate the
criminal action for a deceased or incapacitated victim in the aforesaid offenses of seduction, abduction,
rape and acts of lasciviousness, in default of her parents, grandparents or guardian, such amendment
did not include the crimes of adultery and concubinage. In other words, only the offended spouse, and
no other, is authorized by law to initiate the action therefor.

Corollary to such exclusive grant of power to the offended spouse to institute the action, it necessarily
follows that such initiator must have the status, capacity or legal representation to do so at the time of
the filing of the criminal action. This is a familiar and express rule in civil actions; in fact, lack of legal
capacity to sue, as a ground for a motion to dismiss in civil cases, is determined as of the filing of the
complaint or petition.

The absence of an equivalent explicit rule in the prosecution of criminal cases does not mean that the
same requirement and rationale would not apply. Understandably, it may not have been found
necessary since criminal actions are generally and fundamentally commenced by the State, through
the People of the Philippines, the offended party being merely the complaining witness therein.
However, in the so-called "private crimes" or those which cannot be prosecuted de oficio, and the
present prosecution for adultery is of such genre, the offended spouse assumes a more predominant
role since the right to commence the action, or to refrain therefrom, is a matter exclusively within his
power and option.

This policy was adopted out of consideration for the aggrieved party who might prefer to suffer the
outrage in silence rather than go through the scandal of a public trial. 20 Hence, as cogently argued by
petitioner, Article 344 of the Revised Penal Code thus presupposes that the marital relationship is still
subsisting at the time of the institution of the criminal action for, adultery. This is a logical consequence
since the raison d'etre of said provision of law would be absent where the supposed offended party had
ceased to be the spouse of the alleged offender at the time of the filing of the criminal case. 21

In these cases, therefore, it is indispensable that the status and capacity of the complainant to
commence the action be definitely established and, as already demonstrated, such status or capacity
must indubitably exist as of the time he initiates the action. It would be absurd if his capacity to bring
the action would be determined by his status before or subsequent to the commencement thereof,
where such capacity or status existed prior to but ceased before, or was acquired subsequent to but
did not exist at the time of, the institution of the case. We would thereby have the anomalous spectacle
of a party bringing suit at the very time when he is without the legal capacity to do so.

To repeat, there does not appear to be any local precedential jurisprudence on the specific issue as to
when precisely the status of a complainant as an offended spouse must exist where a criminal
prosecution can be commenced only by one who in law can be categorized as possessed of such
status. Stated differently and with reference to the present case, the inquiry ;would be whether it is
necessary in the commencement of a criminal action for adultery that the marital bonds between the
complainant and the accused be unsevered and existing at the time of the institution of the action by
the former against the latter.

American jurisprudence, on cases involving statutes in that jurisdiction which are in pari materia with
ours, yields the rule that after a divorce has been decreed, the innocent spouse no longer has the right
to institute proceedings against the offenders where the statute provides that the innocent spouse shall
have the exclusive right to institute a prosecution for adultery. Where, however, proceedings have been
properly commenced, a divorce subsequently granted can have no legal effect on the prosecution of
the criminal proceedings to a conclusion. 22

In the cited Loftus case, the Supreme Court of Iowa held that —

'No prosecution for adultery can be commenced except on the complaint of the husband
or wife.' Section 4932, Code. Though Loftus was husband of defendant when the offense
is said to have been committed, he had ceased to be such when the prosecution was
begun; and appellant insists that his status was not such as to entitle him to make the
complaint. We have repeatedly said that the offense is against the unoffending spouse,
as well as the state, in explaining the reason for this provision in the statute; and we are
of the opinion that the unoffending spouse must be such when the prosecution is
commenced. (Emphasis supplied.)

We see no reason why the same doctrinal rule should not apply in this case and in our jurisdiction,
considering our statutory law and jural policy on the matter. We are convinced that in cases of such
nature, the status of the complainant vis-a-vis the accused must be determined as of the time the
complaint was filed. Thus, the person who initiates the adultery case must be an offended spouse, and
by this is meant that he is still married to the accused spouse, at the time of the filing of the complaint.

In the present case, the fact that private respondent obtained a valid divorce in his country, the Federal
Republic of Germany, is admitted. Said divorce and its legal effects may be recognized in the
Philippines insofar as private respondent is concerned 23 in view of the nationality principle in our civil
law on the matter of status of persons.

Thus, in the recent case of Van Dorn vs. Romillo, Jr., et al., 24 after a divorce was granted by a United
States court between Alice Van Dornja Filipina, and her American husband, the latter filed a civil case
in a trial court here alleging that her business concern was conjugal property and praying that she be
ordered to render an accounting and that the plaintiff be granted the right to manage the business.
Rejecting his pretensions, this Court perspicuously demonstrated the error of such stance, thus:

There can be no question as to the validity of that Nevada divorce in any of the States of
the United States. The decree is binding on private respondent as an American citizen.
For instance, private respondent cannot sue petitioner, as her husband, in any State of
the Union. ...

It is true that owing to the nationality principle embodied in Article 15 of the Civil Code,
only Philippine nationals are covered by the policy against absolute divorces the same
being considered contrary to our concept of public policy and morality. However, aliens
may obtain divorces abroad, which may be recognized in the Philippines, provided they
are valid according to their national law. ...

Thus, pursuant to his national law, private respondent is no longer the husband of
petitioner. He would have no standing to sue in the case below as petitioner's husband
entitled to exercise control over conjugal assets. ... 25
Under the same considerations and rationale, private respondent, being no longer the husband of
petitioner, had no legal standing to commence the adultery case under the imposture that he was the
offended spouse at the time he filed suit.

The allegation of private respondent that he could not have brought this case before the decree of
divorce for lack of knowledge, even if true, is of no legal significance or consequence in this case. When
said respondent initiated the divorce proceeding, he obviously knew that there would no longer be a
family nor marriage vows to protect once a dissolution of the marriage is decreed. Neither would there
be a danger of introducing spurious heirs into the family, which is said to be one of the reasons for the
particular formulation of our law on adultery, 26 since there would thenceforth be no spousal relationship
to speak of. The severance of the marital bond had the effect of dissociating the former spouses from
each other, hence the actuations of one would not affect or cast obloquy on the other.

The aforecited case of United States vs. Mata cannot be successfully relied upon by private
respondent. In applying Article 433 of the old Penal Code, substantially the same as Article 333 of the
Revised Penal Code, which punished adultery "although the marriage be afterwards declared void",
the Court merely stated that "the lawmakers intended to declare adulterous the infidelity of a married
woman to her marital vows, even though it should be made to appear that she is entitled to have her
marriage contract declared null and void, until and unless she actually secures a formal judicial
declaration to that effect". Definitely, it cannot be logically inferred therefrom that the complaint can still
be filed after the declaration of nullity because such declaration that the marriage is void ab initio is
equivalent to stating that it never existed. There being no marriage from the beginning, any complaint
for adultery filed after said declaration of nullity would no longer have a leg to stand on. Moreover, what
was consequently contemplated and within the purview of the decision in said case is the situation
where the criminal action for adultery was filed before the termination of the marriage by a judicial
declaration of its nullity ab initio. The same rule and requisite would necessarily apply where the
termination of the marriage was effected, as in this case, by a valid foreign divorce.

Private respondent's invocation of Donio-Teves, et al. vs. Vamenta, hereinbefore cited, 27 must suffer
the same fate of inapplicability. A cursory reading of said case reveals that the offended spouse therein
had duly and seasonably filed a complaint for adultery, although an issue was raised as to its sufficiency
but which was resolved in favor of the complainant. Said case did not involve a factual situation akin to
the one at bar or any issue determinative of the controversy herein.

WHEREFORE, the questioned order denying petitioner's motion to quash is SET ASIDE and another
one entered DISMISSING the complaint in Criminal Case No. 87-52435 for lack of jurisdiction. The
temporary restraining order issued in this case on October 21, 1987 is hereby made permanent.

SO ORDERED.

Melencio-Herrera, Padilla and Sarmiento, JJ., concur.

Separate Opinions

PARAS, J., concurring:

It is my considered opinion that regardless of whether We consider the German absolute divorce as
valid also in the Philippines, the fact is that the husband in the instant case, by the very act of his
obtaining an absolute divorce in Germany can no longer be considered as the offended party in case
his former wife actually has carnal knowledge with another, because in divorcing her, he already
implicitly authorized the woman to have sexual relations with others. A contrary ruling would be less
than fair for a man, who is free to have sex will be allowed to deprive the woman of the same privilege.

In the case of Recto v. Harden (100 Phil. 427 [1956]), the Supreme Court considered the absolute
divorce between the American husband and his American wife as valid and binding in the Philippines
on the theory that their status and capacity are governed by their National law, namely, American law.
There is no decision yet of the Supreme Court regarding the validity of such a divorce if one of the
parties, say an American, is married to a Filipino wife, for then two (2) different nationalities would be
involved.

In the book of Senate President Jovito Salonga entitled Private International Law and precisely because
of the National law doctrine, he considers the absolute divorce as valid insofar as the American
husband is concerned but void insofar as the Filipino wife is involved. This results in what he calls a
"socially grotesque situation," where a Filipino woman is still married to a man who is no longer her
husband. It is the opinion however, of the undersigned that very likely the opposite expresses the
correct view. While under the national law of the husband the absolute divorce will be valid, still one of
the exceptions to the application of the proper foreign law (one of the exceptions to comity) is when the
foreign law will work an injustice or injury to the people or residents of the forum. Consequently since
to recognize the absolute divorce as valid on the part of the husband would be injurious or prejudicial
to the Filipino wife whose marriage would be still valid under her national law, it would seem that under
our law existing before the new Family Code (which took effect on August 3, 1988) the divorce should
be considered void both with respect to the American husband and the Filipino wife.

The recent case of Van Dorn v. Romillo, Jr. (139 SCRA [1985]) cannot apply despite the fact that the
husband was an American can with a Filipino wife because in said case the validity of the divorce
insofar as the Filipino wife is concerned was NEVER put in issue.

Separate Opinions

PARAS, J., concurring:

It is my considered opinion that regardless of whether We consider the German absolute divorce as
valid also in the Philippines, the fact is that the husband in the instant case, by the very act of his
obtaining an absolute divorce in Germany can no longer be considered as the offended party in case
his former wife actually has carnal knowledge with another, because in divorcing her, he already
implicitly authorized the woman to have sexual relations with others. A contrary ruling would be less
than fair for a man, who is free to have sex will be allowed to deprive the woman of the same privilege.

In the case of Recto v. Harden (100 Phil. 427 [1956]), the Supreme Court considered the absolute
divorce between the American husband and his American wife as valid and binding in the Philippines
on the theory that their status and capacity are governed by their National law, namely, American law.
There is no decision yet of the Supreme Court regarding the validity of such a divorce if one of the
parties, say an American, is married to a Filipino wife, for then two (2) different nationalities would be
involved.
In the book of Senate President Jovito Salonga entitled Private International Law and precisely because
of the National law doctrine, he considers the absolute divorce as valid insofar as the American
husband is concerned but void insofar as the Filipino wife is involved. This results in what he calls a
"socially grotesque situation," where a Filipino woman is still married to a man who is no longer her
husband. It is the opinion however, of the undersigned that very likely the opposite expresses the
correct view. While under the national law of the husband the absolute divorce will be valid, still one of
the exceptions to the application of the proper foreign law (one of the exceptions to comity) is when the
foreign law will work an injustice or injury to the people or residents of the forum. Consequently since
to recognize the absolute divorce as valid on the part of the husband would be injurious or prejudicial
to the Filipino wife whose marriage would be still valid under her national law, it would seem that under
our law existing before the new Family Code (which took effect on August 3, 1988) the divorce should
be considered void both with respect to the American husband and the Filipino wife.

The recent case of Van Dorn v. Romillo, Jr. (139 SCRA [1985]) cannot apply despite the fact that the
husband was an American can with a Filipino wife because in said case the validity of the divorce
insofar as the Filipino wife is concerned was NEVER put in issue.
MANUELA BARRETTO GONZALEZ v. AUGUSTO C. GONZALES G.R. No. L-37048; March 7, 1933

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-37048 March 7, 1933

MANUELA BARRETTO GONZALEZ, plaintiff-appellee,

vs.
AUGUSTO C. GONZALEZ, defendant-appellant.
AUGUSTO C. GONZALEZ, Jr., ET AL., intervenors-appellees.

Quintin Paredes and Barrera and Reyes for appellant.

DeWitt, Perkins and Brady for plaintiff-appellee.
Camus and Delgado for intervenors-appellees.

HULL, J.:

Plaintiff and defendant are citizens of the Philippine Islands and at present residents of the City of
Manila. They were married in the City of Manila on January 19, 1919, and lived together as man and
wife in the Philippine Islands until the spring of 1926. They voluntarily separated and since that time
have not lived together as man and wife. Of this union four children were born who are now 11, 10, 8
and 6 years of age. Negotiations between the parties, both being represented by attorneys, continued
for several months, whereupon it was mutually agreed to allow the plaintiff for her support and that of
her children, five hundred pesos (P500) monthly; this amount to be increased in case of illness or
necessity, and the title of certain properties to be put in her name. Shortly after this agreement the
husband left the Islands, betook himself to Reno, Nevada, and secured in that jurisdiction an absolute
divorce on the ground of desertion, which decree was dated November 28, 1927. Shortly thereafter the
defendant moved to California and returned to these Islands in August 1928, where he has since
remained. On the same date that he secured a divorce in Nevada he went through the forms of marriage
with another citizen of these Islands and now has three children as a result of that marriage. Defendant,
after his departure from these Islands, reduced the amount he had agreed to pay monthly for the
support of his wife and four minor children and has not made the payments fixed in the Reno divorce
as alimony.

Shortly after his return his wife brought action in the Court of First Instance of Manila requesting that
the courts of the Philippine Islands confirm and ratify the decree of divorce issued by the courts of the
State of Nevada; that section 9 of Act No. 2710, which reads as follows:

The decree of divorce shall dissolve the community of property as soon as such decree becomes
final, but shall not dissolve the bonds of matrimony until one year thereafter.

The bonds of matrimony shall not be considered as dissolved with regard to the spouse who,
having legitimate children, has not delivered to each of them or to the guardian appointed by the
court, within said period of one year, the equivalent of what would have been due to them as
their legal portion if said spouse had died intestate immediately after the dissolution of the
community of property.
be enforced, and that she and the defendant deliver to the guardian ad litem the equivalent of what
would have been due to their children as their legal portion from the respective estates had their parents
did intestate on November 28, 1927. It is also prayed that the community existing between plaintiff and
defendant be declared dissolved and the defendant be ordered to render an accounting and to deliver
to the plaintiff her share of the community property, that the defendant be ordered to pay the plaintiff
alimony at the rate of five hundred pesos (P500) per month, that the defendant be ordered to pay the
plaintiff, as counsel fees, the sum of five thousand pesos (P5000), and that the defendant be ordered
to pay plaintiff the expenses incurred in educating the three minor sons.

A guardian ad litem was appointed for the minor children, and they appear as intervenors and join their
mother in these proceedings. The Court of First Instance, after hearing, found against the defendant
and granted judgment as prayed for by the plaintiff and intervenors, with the exception of reducing
attorneys fees to three thousand, and also granted costs of the action against the defendant. From this
judgment defendant appeals and makes the following assignment of errors:

I. The lower court erred in not declaring that paragraph 2 of section 9 of the Philippine Divorce
Law, is unconstitutional, null and void.

II. The lower court erred in holding that section 9 of Act No. 2710 (Divorce Law) applies to the
Nevada decree of divorce issued in favor of appellant Augusto C. Gonzalez, said decree being
entitled to confirmation and recognition.

III. The lower court erred in not dismissing the complaint in intervention for lack of cause of action
against appellant and appellee.

IV. The lower court erred in not declaring the notice of lis pendens filed by intervenors to be null
and void.

V. The lower court erred in ordering the appellant to pay the sum of P500 per month for the
support not only of his children but also of his ex-wife, appellee herein, Manuela Barretto.

VI. The lower court erred in not holding that plaintiff- appellee, Manuela Barretto, is not entitled
to support from her ex-husband, herein appellant, over and beyond the alimony fixed by the
divorce decree in Exhibit A.

VII. The lower court erred in condemning defendant appellant to pay to plaintiff-appellee P3,000
attorney's fees.

VIII. The lower court erred in denying appellant's motion for new trial.

While the parties in this action are in dispute over financial matters they are in unity in trying to secure
the courts of this jurisdiction to recognize and approve of the Reno divorce. On the record here
presented this can not be done. The public policy in this jurisdiction on the question of divorce is clearly
set forth in Act No. 2710, and the decisions of this court: Goitia vs. Campos Rueda (35 Phil.,
252); Garcia Valdez vs. Soteraña Tuason (40 Phil., 943-952); Ramirez vs. Gmur (42 Phil.,
855); Chereau vs. Fuentebella (43 Phil., 216); Fernandez vs. De Castro (48 Phil., 123); Gorayeb vs.
Hashim (50 Phil., 22); Francisco vs. Tayao (50 Phil., 42); Alkuino Lim Pang vs. Uy Pian Ng Shun and
Lim Tingco (52 Phil., 571); and the late case of Cousins Hix vs. Fluemer, decided March 21, 1931, and
reported in 55 Phil., 851.

The entire conduct of the parties from the time of their separation until the case was submitted to this
court, in which they all prayed that the Reno divorce be ratified and confirmed, clearly indicates a
purpose to circumvent the laws of the Philippine Islands regarding divorce and to secure for themselves
a change of status for reasons and under conditions not authorized by our law. At all times the
matrimonial domicile of this couple has been within the Philippine Islands and the residence acquired
in the State of Nevada by the husband of the purpose of securing a divorce was not a bona fide
residence and did not confer jurisdiction upon the Court of that State to dissolve the bonds if matrimony
in which he had entered in 1919. While the decisions of this court heretofore in refusing to recognize
the validity of foreign divorce has usually been expressed in the negative and have been based upon
lack of matrimonial domicile or fraud or collusion, we have not overlooked the provisions of the Civil
Code now in force in these Islands. Article 9 thereof reads as follows:

The laws relating to family rights and duties, or to the status, condition and legal capacity or
persons, are binding upon Spaniards even though they reside in a foreign country.

And article 11, the last part of which reads:

. . . the prohibitive laws concerning persons, their acts and their property, and those intended to
promote public order and good morals, shall nor be rendered without effect by any foreign laws
or judgments or by anything done or any agreements entered into a foreign country.

It is therefore a serious question whether any foreign divorce relating to citizens of the Philippine
Islands, will be recognized in this jurisdiction, except it be for a cause, and under conditions for which
the courts of Philippine Islands would grant a divorce. The lower court in granting relief as prayed for
frankly stated that the securing of the divorce, the contracting of another marriage and the bringing into
the world of innocent children brings about such a condition that the court must grant relief. The
hardships of the existing divorce laws of the Philippine Islands are well known to the members of the
Legislature. It is of no moment in this litigation what he personal views of the writer on the subject of
divorce may be. It is the duty of the courts to enforce the laws of divorce as written by the Legislature
if they are constitutional. Courts have no right to say that such laws are too strict or too liberal.

Litigants by mutual agreement can not compel the courts to approve of their own actions or permit the
personal relations of the citizens of these Islands to be affected by decrees of foreign courts in a manner
which our Government believes is contrary to public order and good morals. Holding the above views
it becomes unnecessary to discuss the serious constitutional question presented by appellant in his
first assignment of error.

The judgment of the Court of First Instance of the City of Manila must therefore be reversed and
defendant absolved from the demands made against him in this action. This, however, without prejudice
to any right of maintenance that plaintiff and the intervenors may have against defendant. No special
pronouncement as to costs. So ordered.

Avanceña, C.J., Street, Villamor Ostrand, Abad Santos, Vickers, Imperial and Butte JJ., concur.
WOLFGANG O. ROEHR, v. MARIA CARMEN D. RODRIGUEZ, et. al. G.R. No. 142820; June 20, 2003

SECOND DIVISION

G.R. No. 142820 June 20, 2003

WOLFGANG O. ROEHR, petitioner,

vs.
MARIA CARMEN D. RODRIGUEZ, HON. JUDGE JOSEFINA GUEVARA-SALONGA, Presiding
Judge of Makati RTC, Branch 149, respondents.

QUISUMBING, J.:

At the core of the present controversy are issues of (a) grave abuse of discretion allegedly committed
by public respondent and (b) lack of jurisdiction of the regional trial court, in matters that spring from a
divorce decree obtained abroad by petitioner.

In this special civil action for certiorari, petitioner assails (a) the order 1 dated September 30, 1999 of
public respondent Judge Josefina Guevara-Salonga, Presiding Judge of Makati Regional Trial
Court,2 Branch 149, in Civil Case No. 96-1389 for declaration of nullity of marriage, and (b) the
order3 dated March 31, 2000 denying his motion for reconsideration. The assailed orders partially set
aside the trial court’s order dismissing Civil Case No. 96-1389, for the purpose of resolving issues
relating to the property settlement of the spouses and the custody of their children.

Petitioner Wolfgang O. Roehr, a German citizen and resident of Germany, married private respondent
Carmen Rodriguez, a Filipina, on December 11, 1980 in Hamburg, Germany. Their marriage was
subsequently ratified on February 14, 1981 in Tayasan, Negros Oriental.4 Out of their union were born
Carolynne and Alexandra Kristine on November 18, 1981 and October 25, 1987, respectively.

On August 28, 1996, private respondent filed a petition5 for declaration of nullity of marriage before the
Regional Trial Court (RTC) of Makati City. On February 6, 1997, petitioner filed a motion to dismiss, 6 but
it was denied by the trial court in its order7 dated May 28, 1997.

On June 5, 1997, petitioner filed a motion for reconsideration, but was also denied in an order 8 dated
August 13, 1997. On September 5, 1997, petitioner filed a petition for certiorari with the Court of
Appeals. On November 27, 1998, the appellate court denied the petition and remanded the case to the
RTC.

Meanwhile, petitioner obtained a decree of divorce from the Court of First Instance of Hamburg-
Blankenese, promulgated on December 16, 1997.

The decree provides in part:

[T]he Court of First Instance, Hamburg-Blankenese, Branch 513, has ruled through Judge van
Buiren of the Court of First Instance on the basis of the oral proceedings held on 4 Nov. 1997:

The marriage of the Parties contracted on 11 December 1980 before the Civil Registrar of
Hamburg-Altona is hereby dissolved.

The parental custody for the children

 Carolynne Roehr, born 18 November 1981

Alexandra Kristine Roehr, born on 25 October 1987

is granted to the father.

The litigation expenses shall be assumed by the Parties. 9

In view of said decree, petitioner filed a Second Motion to Dismiss on May 20, 1999 on the ground that
the trial court had no jurisdiction over the subject matter of the action or suit as a decree of divorce had
already been promulgated dissolving the marriage of petitioner and private respondent.

On July 14, 1999, Judge Guevara-Salonga issued an order granting petitioner’s motion to dismiss.
Private respondent filed a Motion for Partial Reconsideration, with a prayer that the case proceed for
the purpose of determining the issues of custody of children and the distribution of the properties
between petitioner and private respondent.

On August 18, 1999, an Opposition to the Motion for Partial Reconsideration was filed by the petitioner
on the ground that there is nothing to be done anymore in the instant case as the marital tie between
petitioner Wolfgang Roehr and respondent Ma. Carmen D. Rodriguez had already been severed by the
decree of divorce promulgated by the Court of First Instance of Hamburg, Germany on December 16,
1997 and in view of the fact that said decree of divorce had already been recognized by the RTC in its
order of July 14, 1999, through the implementation of the mandate of Article 26 of the Family
Code,10 endowing the petitioner with the capacity to remarry under the Philippine law.

On September 30, 1999, respondent judge issued the assailed order partially setting aside her order
dated July 14, 1999 for the purpose of tackling the issues of property relations of the spouses as well
as support and custody of their children. The pertinent portion of said order provides:

Acting on the Motion for Partial Reconsideration of the Order dated July 14, 1999 filed by
petitioner thru counsel which was opposed by respondent and considering that the second
paragraph of Article 26 of the Family Code was included as an amendment thru Executive Order
227, to avoid the absurd situation of a Filipino as being still married to his or her alien spouse
though the latter is no longer married to the Filipino spouse because he/she had obtained a
divorce abroad which is recognized by his/her national law, and considering further the effects
of the termination of the marriage under Article 43 in relation to Article 50 and 52 of the same
Code, which include the dissolution of the property relations of the spouses, and the support and
custody of their children, the Order dismissing this case is partially set aside with respect to
these matters which may be ventilated in this Court.

SO ORDERED.11 (Emphasis supplied.)

Petitioner filed a timely motion for reconsideration on October 19, 1999, which was denied by
respondent judge in an order dated March 31, 2000. 12

Petitioner ascribes lack of jurisdiction of the trial court and grave abuse of discretion on the part of
respondent judge. He cites as grounds for his petition the following:

1. Partially setting aside the order dated July 14, 1999 dismissing the instant case is not allowed
by 1997 Rules of Civil Procedure.13
 2. Respondent Maria Carmen Rodriguez by her motion for Partial Reconsideration had
recognized and admitted the Divorce Decision obtained by her ex-husband in Hamburg,
Germany.14

3. There is nothing left to be tackled by the Honorable Court as there are no conjugal assets
alleged in the Petition for Annulment of Marriage and in the Divorce petition, and the custody of
the children had already been awarded to Petitioner Wolfgang Roehr.15

Pertinent in this case before us are the following issues:

1. Whether or not respondent judge gravely abused her discretion in issuing her order dated
September 30, 1999, which partially modified her order dated July 14, 1999; and

2. Whether or not respondent judge gravely abused her discretion when she assumed and
retained jurisdiction over the present case despite the fact that petitioner has already obtained
a divorce decree from a German court.

On the first issue, petitioner asserts that the assailed order of respondent judge is completely
inconsistent with her previous order and is contrary to Section 3, Rule 16, Rules of Civil Procedure,
which provides:

Sec. 3. Resolution of motion - After the hearing, the court may dismiss the action or claim, deny
the motion, or order the amendment of the pleading.

The court shall not defer the resolution of the motion for the reason that the ground relied upon
is not indubitable.

In every case, the resolution shall state clearly and distinctly the reasons therefor. (Emphasis
supplied.)

Petitioner avers that a court’s action on a motion is limited to dismissing the action or claim, denying
the motion, or ordering the amendment of the pleading.

Private respondent, on her part, argues that the RTC can validly reconsider its order dated July 14,
1999 because it had not yet attained finality, given the timely filing of respondent’s motion for
reconsideration.

Pertinent to this issue is Section 3 in relation to Section 7, Rule 37 of the 1997 Rules of Civil Procedure,
which provides:

Sec. 3. Action upon motion for new trial or reconsideration.—The trial court may set aside the
judgment or final order and grant a new trial, upon such terms as may be just, or may deny the
motion. If the court finds that excessive damages have been awarded or that the judgment or
final order is contrary to the evidence or law, it may amend such judgment or final order
accordingly.

Sec. 7. Partial new trial or reconsideration.—If the grounds for a motion under this Rule appear
to the court to affect the issues as to only a part, or less than all of the matters in controversy, or
only one, or less than all, of the parties to it, the court may order a new trial or grant
reconsideration as to such issues if severable without interfering with the judgment or final order
upon the rest. (Emphasis supplied.)
It is clear from the foregoing rules that a judge can order a partial reconsideration of a case that has
not yet attained finality. Considering that private respondent filed a motion for reconsideration within
the reglementary period, the trial court's decision of July 14, 1999 can still be modified. Moreover,
in Sañado v. Court of Appeals,16 we held that the court could modify or alter a judgment even after the
same has become executory whenever circumstances transpire rendering its decision unjust and
inequitable, as where certain facts and circumstances justifying or requiring such modification or
alteration transpired after the judgment has become final and executory 17 and when it becomes
imperative in the higher interest of justice or when supervening events warrant it. 18 In our view, there
are even more compelling reasons to do so when, as in this case, judgment has not yet attained finality.

Anent the second issue, petitioner claims that respondent judge committed grave abuse of discretion
when she partially set aside her order dated July 14, 1999, despite the fact that petitioner has already
obtained a divorce decree from the Court of First Instance of Hamburg, Germany.

In Garcia v. Recio,19 Van Dorn v. Romillo, Jr.,20 and Llorente v. Court of Appeals,21 we consistently held
that a divorce obtained abroad by an alien may be recognized in our jurisdiction, provided such decree
is valid according to the national law of the foreigner. Relevant to the present case is Pilapil v. Ibay-
Somera,22 where this Court specifically recognized the validity of a divorce obtained by a German
citizen in his country, the Federal Republic of Germany. We held in Pilapil that a foreign divorce and its
legal effects may be recognized in the Philippines insofar as respondent is concerned in view of the
nationality principle in our civil law on the status of persons.

In this case, the divorce decree issued by the German court dated December 16, 1997 has not been
challenged by either of the parties. In fact, save for the issue of parental custody, even the trial court
recognized said decree to be valid and binding, thereby endowing private respondent the capacity to
remarry. Thus, the present controversy mainly relates to the award of the custody of their two children,
Carolynne and Alexandra Kristine, to petitioner.

As a general rule, divorce decrees obtained by foreigners in other countries are recognizable in our
jurisdiction, but the legal effects thereof, e.g. on custody, care and support of the children, must still be
determined by our courts.23 Before our courts can give the effect of res judicata to a foreign judgment,
such as the award of custody to petitioner by the German court, it must be shown that the parties
opposed to the judgment had been given ample opportunity to do so on grounds allowed under Rule
39, Section 50 of the Rules of Court (now Rule 39, Section 48, 1997 Rules of Civil Procedure), to wit:

SEC. 50. Effect of foreign judgments. - The effect of a judgment of a tribunal of a foreign country,
having jurisdiction to pronounce the judgment is as follows:

(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the
thing;

(b) In case of a judgment against a person, the judgment is presumptive evidence of a right as
between the parties and their successors in interest by a subsequent title; but the judgment may
be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or
clear mistake of law or fact.

It is essential that there should be an opportunity to challenge the foreign judgment, in order for the
court in this jurisdiction to properly determine its efficacy. In this jurisdiction, our Rules of Court clearly
provide that with respect to actions in personam, as distinguished from actions in rem, a foreign
judgment merely constitutes prima facie evidence of the justness of the claim of a party and, as such,
is subject to proof to the contrary.24
In the present case, it cannot be said that private respondent was given the opportunity to challenge
the judgment of the German court so that there is basis for declaring that judgment as res judicata with
regard to the rights of petitioner to have parental custody of their two children. The proceedings in the
German court were summary. As to what was the extent of private respondent’s participation in the
proceedings in the German court, the records remain unclear. The divorce decree itself states that
neither has she commented on the proceedings25 nor has she given her opinion to the Social Services
Office.26 Unlike petitioner who was represented by two lawyers, private respondent had no counsel to
assist her in said proceedings.27 More importantly, the divorce judgment was issued to petitioner by
virtue of the German Civil Code provision to the effect that when a couple lived separately for three
years, the marriage is deemed irrefutably dissolved. The decree did not touch on the issue as to who
the offending spouse was. Absent any finding that private respondent is unfit to obtain custody of the
children, the trial court was correct in setting the issue for hearing to determine the issue of parental
custody, care, support and education mindful of the best interests of the children. This is in consonance
with the provision in the Child and Youth Welfare Code that the child’s welfare is always the paramount
consideration in all questions concerning his care and custody. 28

On the matter of property relations, petitioner asserts that public respondent exceeded the bounds of
her jurisdiction when she claimed cognizance of the issue concerning property relations between
petitioner and private respondent. Private respondent herself has admitted in Par. 14 of her petition for
declaration of nullity of marriage dated August 26, 1996 filed with the RTC of Makati, subject of this
case, that: "[p]etitioner and respondent have not acquired any conjugal or community property nor have
they incurred any debts during their marriage."29 Herein petitioner did not contest this averment. Basic
is the rule that a court shall grant relief warranted by the allegations and the proof. 30 Given the factual
admission by the parties in their pleadings that there is no property to be accounted for, respondent
judge has no basis to assert jurisdiction in this case to resolve a matter no longer deemed in
controversy.

In sum, we find that respondent judge may proceed to determine the issue regarding the custody of the
two children born of the union between petitioner and private respondent. Private respondent erred,
however, in claiming cognizance to settle the matter of property relations of the parties, which is not at
issue.

WHEREFORE, the orders of the Regional Trial Court of Makati, Branch 149, issued on September 30,
1999 and March 31, 2000 are AFFIRMED with MODIFICATION. We hereby declare that the trial court
has jurisdiction over the issue between the parties as to who has parental custody, including the care,
support and education of the children, namely Carolynne and Alexandra Kristine Roehr. Let the records
of this case be remanded promptly to the trial court for continuation of appropriate proceedings. No
pronouncement as to costs.

SO ORDERED.
Article 16: Law governing real properties
TESTATE ESTATE OF AMOS G. BELLIS v. (G.R. No. L-23678; June 6, 1967)

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-23678 June 6, 1967

TESTATE ESTATE OF AMOS G. BELLIS, deceased.

PEOPLE'S BANK and TRUST COMPANY, executor.
MARIA CRISTINA BELLIS and MIRIAM PALMA BELLIS, oppositors-appellants,
vs.
EDWARD A. BELLIS, ET AL., heirs-appellees.

Vicente R. Macasaet and Jose D. Villena for oppositors appellants.

Paredes, Poblador, Cruz and Nazareno for heirs-appellees E. A. Bellis, et al.
Quijano and Arroyo for heirs-appellees W. S. Bellis, et al.
J. R. Balonkita for appellee People's Bank & Trust Company.
Ozaeta, Gibbs and Ozaeta for appellee A. B. Allsman.

BENGZON, J.P., J.:

This is a direct appeal to Us, upon a question purely of law, from an order of the Court of First Instance
of Manila dated April 30, 1964, approving the project of partition filed by the executor in Civil Case No.
37089 therein.1äwphï1.ñët

The facts of the case are as follows:

Amos G. Bellis, born in Texas, was "a citizen of the State of Texas and of the United States." By his
first wife, Mary E. Mallen, whom he divorced, he had five legitimate children: Edward A. Bellis, George
Bellis (who pre-deceased him in infancy), Henry A. Bellis, Alexander Bellis and Anna Bellis Allsman; by
his second wife, Violet Kennedy, who survived him, he had three legitimate children: Edwin G. Bellis,
Walter S. Bellis and Dorothy Bellis; and finally, he had three illegitimate children: Amos Bellis, Jr., Maria
Cristina Bellis and Miriam Palma Bellis.

On August 5, 1952, Amos G. Bellis executed a will in the Philippines, in which he directed that after all
taxes, obligations, and expenses of administration are paid for, his distributable estate should be
divided, in trust, in the following order and manner: (a) $240,000.00 to his first wife, Mary E. Mallen; (b)
P120,000.00 to his three illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis, Miriam Palma
Bellis, or P40,000.00 each and (c) after the foregoing two items have been satisfied, the remainder
shall go to his seven surviving children by his first and second wives, namely: Edward A. Bellis, Henry
A. Bellis, Alexander Bellis and Anna Bellis Allsman, Edwin G. Bellis, Walter S. Bellis, and Dorothy E.
Bellis, in equal shares.1äwphï1.ñët

Subsequently, or on July 8, 1958, Amos G. Bellis died a resident of San Antonio, Texas, U.S.A. His will
was admitted to probate in the Court of First Instance of Manila on September 15, 1958.
The People's Bank and Trust Company, as executor of the will, paid all the bequests therein including
the amount of $240,000.00 in the form of shares of stock to Mary E. Mallen and to the three (3)
illegitimate children, Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis, various amounts
totalling P40,000.00 each in satisfaction of their respective legacies, or a total of P120,000.00, which it
released from time to time according as the lower court approved and allowed the various motions or
petitions filed by the latter three requesting partial advances on account of their respective legacies.

On January 8, 1964, preparatory to closing its administration, the executor submitted and filed its
"Executor's Final Account, Report of Administration and Project of Partition" wherein it reported, inter
alia, the satisfaction of the legacy of Mary E. Mallen by the delivery to her of shares of stock amounting
to $240,000.00, and the legacies of Amos Bellis, Jr., Maria Cristina Bellis and Miriam Palma Bellis in
the amount of P40,000.00 each or a total of P120,000.00. In the project of partition, the executor —
pursuant to the "Twelfth" clause of the testator's Last Will and Testament — divided the residuary estate
into seven equal portions for the benefit of the testator's seven legitimate children by his first and second
marriages.

On January 17, 1964, Maria Cristina Bellis and Miriam Palma Bellis filed their respective oppositions to
the project of partition on the ground that they were deprived of their legitimes as illegitimate children
and, therefore, compulsory heirs of the deceased.

Amos Bellis, Jr. interposed no opposition despite notice to him, proof of service of which is evidenced
by the registry receipt submitted on April 27, 1964 by the executor. 1

After the parties filed their respective memoranda and other pertinent pleadings, the lower court, on
April 30, 1964, issued an order overruling the oppositions and approving the executor's final account,
report and administration and project of partition. Relying upon Art. 16 of the Civil Code, it applied the
national law of the decedent, which in this case is Texas law, which did not provide for legitimes.

Their respective motions for reconsideration having been denied by the lower court on June 11, 1964,
oppositors-appellants appealed to this Court to raise the issue of which law must apply — Texas law
or Philippine law.

In this regard, the parties do not submit the case on, nor even discuss, the doctrine of renvoi, applied
by this Court in Aznar v. Christensen Garcia, L-16749, January 31, 1963. Said doctrine is usually
pertinent where the decedent is a national of one country, and a domicile of another. In the present
case, it is not disputed that the decedent was both a national of Texas and a domicile thereof at the
time of his death.2 So that even assuming Texas has a conflict of law rule providing that the domiciliary
system (law of the domicile) should govern, the same would not result in a reference back (renvoi) to
Philippine law, but would still refer to Texas law. Nonetheless, if Texas has a conflicts rule adopting the
situs theory (lex rei sitae) calling for the application of the law of the place where the properties are
situated, renvoi would arise, since the properties here involved are found in the Philippines. In the
absence, however, of proof as to the conflict of law rule of Texas, it should not be presumed different
from ours.3 Appellants' position is therefore not rested on the doctrine of renvoi. As stated, they never
invoked nor even mentioned it in their arguments. Rather, they argue that their case falls under the
circumstances mentioned in the third paragraph of Article 17 in relation to Article 16 of the Civil Code.

Article 16, par. 2, and Art. 1039 of the Civil Code, render applicable the national law of the decedent,
in intestate or testamentary successions, with regard to four items: (a) the order of succession; (b) the
amount of successional rights; (e) the intrinsic validity of the provisions of the will; and (d) the capacity
to succeed. They provide that —
 ART. 16. Real property as well as personal property is subject to the law of the country where it
is situated.

However, intestate and testamentary successions, both with respect to the order of succession
and to the amount of successional rights and to the intrinsic validity of testamentary provisions,
shall be regulated by the national law of the person whose succession is under consideration,
whatever may he the nature of the property and regardless of the country wherein said property
may be found.

ART. 1039. Capacity to succeed is governed by the law of the nation of the decedent.

Appellants would however counter that Art. 17, paragraph three, of the Civil Code, stating that —

Prohibitive laws concerning persons, their acts or property, and those which have for their object
public order, public policy and good customs shall not be rendered ineffective by laws or
judgments promulgated, or by determinations or conventions agreed upon in a foreign country.

prevails as the exception to Art. 16, par. 2 of the Civil Code afore-quoted. This is not correct. Precisely,
Congress deleted the phrase, "notwithstanding the provisions of this and the next preceding article"
when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil Code, while reproducing
without substantial change the second paragraph of Art. 10 of the old Civil Code as Art. 16 in the new.
It must have been their purpose to make the second paragraph of Art. 16 a specific provision in itself
which must be applied in testate and intestate succession. As further indication of this legislative intent,
Congress added a new provision, under Art. 1039, which decrees that capacity to succeed is to be
governed by the national law of the decedent.

It is therefore evident that whatever public policy or good customs may be involved in our System of
legitimes, Congress has not intended to extend the same to the succession of foreign nationals. For it
has specifically chosen to leave, inter alia, the amount of successional rights, to the decedent's national
law. Specific provisions must prevail over general ones.

Appellants would also point out that the decedent executed two wills — one to govern his Texas estate
and the other his Philippine estate — arguing from this that he intended Philippine law to govern his
Philippine estate. Assuming that such was the decedent's intention in executing a separate Philippine
will, it would not alter the law, for as this Court ruled in Miciano v. Brimo, 50 Phil. 867, 870, a provision
in a foreigner's will to the effect that his properties shall be distributed in accordance with Philippine law
and not with his national law, is illegal and void, for his national law cannot be ignored in regard to those
matters that Article 10 — now Article 16 — of the Civil Code states said national law should govern.

The parties admit that the decedent, Amos G. Bellis, was a citizen of the State of Texas, U.S.A., and
that under the laws of Texas, there are no forced heirs or legitimes. Accordingly, since the intrinsic
validity of the provision of the will and the amount of successional rights are to be determined under
Texas law, the Philippine law on legitimes cannot be applied to the testacy of Amos G. Bellis.

Wherefore, the order of the probate court is hereby affirmed in toto, with costs against appellants. So
ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Zaldivar, Sanchez and Castro, JJ., concur.
JUAN MICIANO v. ANDRE BRIMO (G.R. No. L-22595; November 1, 1927)

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-22595 November 1, 1927

Testate Estate of Joseph G. Brimo, JUAN MICIANO, administrator, petitioner-appellee,

vs.
ANDRE BRIMO, opponent-appellant.

Ross, Lawrence and Selph for appellant.

Camus and Delgado for appellee.

ROMUALDEZ, J.:

The partition of the estate left by the deceased Joseph G. Brimo is in question in this case.

The judicial administrator of this estate filed a scheme of partition. Andre Brimo, one of the brothers of
the deceased, opposed it. The court, however, approved it.

The errors which the oppositor-appellant assigns are:

(1) The approval of said scheme of partition; (2) denial of his participation in the inheritance; (3) the
denial of the motion for reconsideration of the order approving the partition; (4) the approval of the
purchase made by the Pietro Lana of the deceased's business and the deed of transfer of said
business; and (5) the declaration that the Turkish laws are impertinent to this cause, and the failure not
to postpone the approval of the scheme of partition and the delivery of the deceased's business to
Pietro Lanza until the receipt of the depositions requested in reference to the Turkish laws.

The appellant's opposition is based on the fact that the partition in question puts into effect the
provisions of Joseph G. Brimo's will which are not in accordance with the laws of his Turkish nationality,
for which reason they are void as being in violation or article 10 of the Civil Code which, among other
things, provides the following:

Nevertheless, legal and testamentary successions, in respect to the order of succession as well
as to the amount of the successional rights and the intrinsic validity of their provisions, shall be
regulated by the national law of the person whose succession is in question, whatever may be
the nature of the property or the country in which it may be situated.

But the fact is that the oppositor did not prove that said testimentary dispositions are not in accordance
with the Turkish laws, inasmuch as he did not present any evidence showing what the Turkish laws are
on the matter, and in the absence of evidence on such laws, they are presumed to be the same as
those of the Philippines. (Lim and Lim vs. Collector of Customs, 36 Phil., 472.)
It has not been proved in these proceedings what the Turkish laws are. He, himself, acknowledges it
when he desires to be given an opportunity to present evidence on this point; so much so that he
assigns as an error of the court in not having deferred the approval of the scheme of partition until the
receipt of certain testimony requested regarding the Turkish laws on the matter.

The refusal to give the oppositor another opportunity to prove such laws does not constitute an error.
It is discretionary with the trial court, and, taking into consideration that the oppositor was granted ample
opportunity to introduce competent evidence, we find no abuse of discretion on the part of the court in
this particular. There is, therefore, no evidence in the record that the national law of the testator Joseph
G. Brimo was violated in the testamentary dispositions in question which, not being contrary to our laws
in force, must be complied with and executed. lawphil.net

Therefore, the approval of the scheme of partition in this respect was not erroneous.

In regard to the first assignment of error which deals with the exclusion of the herein appellant as a
legatee, inasmuch as he is one of the persons designated as such in will, it must be taken into
consideration that such exclusion is based on the last part of the second clause of the will, which says:

Second. I like desire to state that although by law, I am a Turkish citizen, this citizenship having
been conferred upon me by conquest and not by free choice, nor by nationality and, on the other
hand, having resided for a considerable length of time in the Philippine Islands where I
succeeded in acquiring all of the property that I now possess, it is my wish that the distribution
of my property and everything in connection with this, my will, be made and disposed of in
accordance with the laws in force in the Philippine islands, requesting all of my relatives to
respect this wish, otherwise, I annul and cancel beforehand whatever disposition found in this
will favorable to the person or persons who fail to comply with this request.

The institution of legatees in this will is conditional, and the condition is that the instituted legatees must
respect the testator's will to distribute his property, not in accordance with the laws of his nationality,
but in accordance with the laws of the Philippines.

If this condition as it is expressed were legal and valid, any legatee who fails to comply with it, as the
herein oppositor who, by his attitude in these proceedings has not respected the will of the testator, as
expressed, is prevented from receiving his legacy.

The fact is, however, that the said condition is void, being contrary to law, for article 792 of the civil
Code provides the following:

Impossible conditions and those contrary to law or good morals shall be considered as not
imposed and shall not prejudice the heir or legatee in any manner whatsoever, even should the
testator otherwise provide.

And said condition is contrary to law because it expressly ignores the testator's national law when,
according to article 10 of the civil Code above quoted, such national law of the testator is the one to
govern his testamentary dispositions.

Said condition then, in the light of the legal provisions above cited, is considered unwritten, and the
institution of legatees in said will is unconditional and consequently valid and effective even as to the
herein oppositor.

It results from all this that the second clause of the will regarding the law which shall govern it, and to
the condition imposed upon the legatees, is null and void, being contrary to law.
All of the remaining clauses of said will with all their dispositions and requests are perfectly valid and
effective it not appearing that said clauses are contrary to the testator's national law.

Therefore, the orders appealed from are modified and it is directed that the distribution of this estate be
made in such a manner as to include the herein appellant Andre Brimo as one of the legatees, and the
scheme of partition submitted by the judicial administrator is approved in all other respects, without any
pronouncement as to costs.

So ordered.
 Article 17: Rule governing form and solemnities of contracts, wills, and other public instruments
RAYTHEON INTERNATIONAL, INC., v. STOCKTON W. ROUZIE, JR., G.R. NO. 162894 February 26,
2008

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 162894 February 26, 2008

RAYTHEON INTERNATIONAL, INC., petitioner,

vs.
STOCKTON W. ROUZIE, JR., respondent.

DECISION

TINGA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure
which seeks the reversal of the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. SP No.
67001 and the dismissal of the civil case filed by respondent against petitioner with the trial court.

As culled from the records of the case, the following antecedents appear:

Sometime in 1990, Brand Marine Services, Inc. (BMSI), a corporation duly organized and existing under
the laws of the State of Connecticut, United States of America, and respondent Stockton W. Rouzie,
Jr., an American citizen, entered into a contract whereby BMSI hired respondent as its representative
to negotiate the sale of services in several government projects in the Philippines for an agreed
remuneration of 10% of the gross receipts. On 11 March 1992, respondent secured a service contract
with the Republic of the Philippines on behalf of BMSI for the dredging of rivers affected by the Mt.
Pinatubo eruption and mudflows.3

On 16 July 1994, respondent filed before the Arbitration Branch of the National Labor Relations
Commission (NLRC) a suit against BMSI and Rust International, Inc. (RUST), Rodney C. Gilbert and
Walter G. Browning for alleged nonpayment of commissions, illegal termination and breach of
employment contract.4 On 28 September 1995, Labor Arbiter Pablo C. Espiritu, Jr. rendered judgment
ordering BMSI and RUST to pay respondent’s money claims. 5 Upon appeal by BMSI, the NLRC
reversed the decision of the Labor Arbiter and dismissed respondent’s complaint on the ground of lack
of jurisdiction.6 Respondent elevated the case to this Court but was dismissed in a Resolution dated 26
November 1997. The Resolution became final and executory on 09 November 1998.

On 8 January 1999, respondent, then a resident of La Union, instituted an action for damages before
the Regional Trial Court (RTC) of Bauang, La Union. The Complaint, 7 docketed as Civil Case No. 1192-
BG, named as defendants herein petitioner Raytheon International, Inc. as well as BMSI and RUST,
the two corporations impleaded in the earlier labor case. The complaint essentially reiterated the
allegations in the labor case that BMSI verbally employed respondent to negotiate the sale of services
in government projects and that respondent was not paid the commissions due him from the Pinatubo
dredging project which he secured on behalf of BMSI. The complaint also averred that BMSI and RUST
as well as petitioner itself had combined and functioned as one company.
In its Answer,8 petitioner alleged that contrary to respondent’s claim, it was a foreign corporation duly
licensed to do business in the Philippines and denied entering into any arrangement with respondent
or paying the latter any sum of money. Petitioner also denied combining with BMSI and RUST for the
purpose of assuming the alleged obligation of the said companies.9 Petitioner also referred to the NLRC
decision which disclosed that per the written agreement between respondent and BMSI and RUST,
denominated as "Special Sales Representative Agreement," the rights and obligations of the parties
shall be governed by the laws of the State of Connecticut.10 Petitioner sought the dismissal of the
complaint on grounds of failure to state a cause of action and forum non conveniens and prayed for
damages by way of compulsory counterclaim.11

On 18 May 1999, petitioner filed an Omnibus Motion for Preliminary Hearing Based on Affirmative
Defenses and for Summary Judgment12 seeking the dismissal of the complaint on grounds of forum
non conveniens and failure to state a cause of action. Respondent opposed the same. Pending the
resolution of the omnibus motion, the deposition of Walter Browning was taken before the Philippine
Consulate General in Chicago.13

In an Order14 dated 13 September 2000, the RTC denied petitioner’s omnibus motion. The trial court
held that the factual allegations in the complaint, assuming the same to be admitted, were sufficient for
the trial court to render a valid judgment thereon. It also ruled that the principle of forum non
conveniens was inapplicable because the trial court could enforce judgment on petitioner, it being a
foreign corporation licensed to do business in the Philippines. 15

Petitioner filed a Motion for Reconsideration16 of the order, which motion was opposed by
respondent.17 In an Order dated 31 July 2001,18 the trial court denied petitioner’s motion. Thus, it filed
a Rule 65 Petition19 with the Court of Appeals praying for the issuance of a writ of certiorari and a writ
of injunction to set aside the twin orders of the trial court dated 13 September 2000 and 31 July 2001
and to enjoin the trial court from conducting further proceedings. 20

On 28 August 2003, the Court of Appeals rendered the assailed Decision 21 denying the petition for
certiorari for lack of merit. It also denied petitioner’s motion for reconsideration in the assailed
Resolution issued on 10 March 2004.22

The appellate court held that although the trial court should not have confined itself to the allegations
in the complaint and should have also considered evidence aliunde in resolving petitioner’s omnibus
motion, it found the evidence presented by petitioner, that is, the deposition of Walter Browning,
insufficient for purposes of determining whether the complaint failed to state a cause of action. The
appellate court also stated that it could not rule one way or the other on the issue of whether the
corporations, including petitioner, named as defendants in the case had indeed merged together based
solely on the evidence presented by respondent. Thus, it held that the issue should be threshed out
during trial.23 Moreover, the appellate court deferred to the discretion of the trial court when the latter
decided not to desist from assuming jurisdiction on the ground of the inapplicability of the principle
of forum non conveniens.

Hence, this petition raising the following issues:

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE

COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION AGAINST RAYTHEON
INTERNATIONAL, INC.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REFUSING TO DISMISS THE

COMPLAINT ON THE GROUND OF FORUM NON CONVENIENS.24
Incidentally, respondent failed to file a comment despite repeated notices. The Ceferino Padua Law
Office, counsel on record for respondent, manifested that the lawyer handling the case, Atty. Rogelio
Karagdag, had severed relations with the law firm even before the filing of the instant petition and that
it could no longer find the whereabouts of Atty. Karagdag or of respondent despite diligent efforts. In a
Resolution25 dated 20 November 2006, the Court resolved to dispense with the filing of a comment.

The instant petition lacks merit.

Petitioner mainly asserts that the written contract between respondent and BMSI included a valid choice
of law clause, that is, that the contract shall be governed by the laws of the State of Connecticut. It also
mentions the presence of foreign elements in the dispute – namely, the parties and witnesses involved
are American corporations and citizens and the evidence to be presented is located outside the
Philippines – that renders our local courts inconvenient forums. Petitioner theorizes that the foreign
elements of the dispute necessitate the immediate application of the doctrine of forum non conveniens.

Recently in Hasegawa v. Kitamura,26 the Court outlined three consecutive phases involved in judicial
resolution of conflicts-of-laws problems, namely: jurisdiction, choice of law, and recognition and
enforcement of judgments. Thus, in the instances27 where the Court held that the local judicial
machinery was adequate to resolve controversies with a foreign element, the following requisites had
to be proved: (1) that the Philippine Court is one to which the parties may conveniently resort; (2) that
the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and (3)
that the Philippine Court has or is likely to have the power to enforce its decision. 28

On the matter of jurisdiction over a conflicts-of-laws problem where the case is filed in a Philippine court
and where the court has jurisdiction over the subject matter, the parties and the res, it may or can
proceed to try the case even if the rules of conflict-of-laws or the convenience of the parties point to a
foreign forum. This is an exercise of sovereign prerogative of the country where the case is filed. 29

Jurisdiction over the nature and subject matter of an action is conferred by the Constitution and the
law30 and by the material allegations in the complaint, irrespective of whether or not the plaintiff is
entitled to recover all or some of the claims or reliefs sought therein. 31 Civil Case No. 1192-BG is an
action for damages arising from an alleged breach of contract. Undoubtedly, the nature of the action
and the amount of damages prayed are within the jurisdiction of the RTC.

As regards jurisdiction over the parties, the trial court acquired jurisdiction over herein respondent (as
party plaintiff) upon the filing of the complaint. On the other hand, jurisdiction over the person of
petitioner (as party defendant) was acquired by its voluntary appearance in court.32

That the subject contract included a stipulation that the same shall be governed by the laws of the State
of Connecticut does not suggest that the Philippine courts, or any other foreign tribunal for that matter,
are precluded from hearing the civil action. Jurisdiction and choice of law are two distinct concepts.
Jurisdiction considers whether it is fair to cause a defendant to travel to this state; choice of law asks
the further question whether the application of a substantive law which will determine the merits of the
case is fair to both parties.33 The choice of law stipulation will become relevant only when the
substantive issues of the instant case develop, that is, after hearing on the merits proceeds before the
trial court.

Under the doctrine of forum non conveniens, a court, in conflicts-of-laws cases, may refuse impositions
on its jurisdiction where it is not the most "convenient" or available forum and the parties are not
precluded from seeking remedies elsewhere.34 Petitioner’s averments of the foreign elements in the
instant case are not sufficient to oust the trial court of its jurisdiction over Civil Case No. No. 1192-BG
and the parties involved.
Moreover, the propriety of dismissing a case based on the principle of forum non conveniens requires
a factual determination; hence, it is more properly considered as a matter of defense. While it is within
the discretion of the trial court to abstain from assuming jurisdiction on this ground, it should do so only
after vital facts are established, to determine whether special circumstances require the court’s
desistance.35

Finding no grave abuse of discretion on the trial court, the Court of Appeals respected its conclusion
that it can assume jurisdiction over the dispute notwithstanding its foreign elements. In the same
manner, the Court defers to the sound discretion of the lower courts because their findings are binding
on this Court.

Petitioner also contends that the complaint in Civil Case No. 1192-BG failed to state a cause of action
against petitioner. Failure to state a cause of action refers to the insufficiency of allegation in the
pleading.36 As a general rule, the elementary test for failure to state a cause of action is whether the
complaint alleges facts which if true would justify the relief demanded. 37

The complaint alleged that petitioner had combined with BMSI and RUST to function as one company.
Petitioner contends that the deposition of Walter Browning rebutted this allegation. On this score, the
resolution of the Court of Appeals is instructive, thus:

x x x Our examination of the deposition of Mr. Walter Browning as well as other documents
produced in the hearing shows that these evidence aliunde are not quite sufficient for us to mete
a ruling that the complaint fails to state a cause of action.

Annexes "A" to "E" by themselves are not substantial, convincing and conclusive proofs that
Raytheon Engineers and Constructors, Inc. (REC) assumed the warranty obligations of
defendant Rust International in the Makar Port Project in General Santos City, after Rust
International ceased to exist after being absorbed by REC. Other documents already submitted
in evidence are likewise meager to preponderantly conclude that Raytheon International, Inc.,
Rust International[,] Inc. and Brand Marine Service, Inc. have combined into one company, so
much so that Raytheon International, Inc., the surviving company (if at all) may be held liable for
the obligation of BMSI to respondent Rouzie for unpaid commissions. Neither these documents
clearly speak otherwise.38

As correctly pointed out by the Court of Appeals, the question of whether petitioner, BMSI and RUST
merged together requires the presentation of further evidence, which only a full-blown trial on the merits
can afford.

WHEREFORE, the instant petition for review on certiorari is DENIED. The Decision and Resolution of
the Court of Appeals in CA-G.R. SP No. 67001 are hereby AFFIRMED. Costs against petitioner.

SO ORDERED.
CONTINENTAL MICRONESIA , INC. v. JOSEPH BASSO G.R. Nos. 178382-83, September 23, 2015

THIRD DIVISION

September 23, 2015

G.R. NOS. 178382-83

CONTINENTAL MICRONESIA, INC., Petitioner,

vs.
JOSEPH BASSO, Respondent.

DECISION

JARDELEZA, J.:

This is a Petition for Review on Certiorari1 under Rule 45 of the Revised Rules of Court assailing the
Decision2 dated May 23, 2006 and Resolution3 dated June 19, 2007 of the Court of Appeals in the
consolidated cases CA-G.R. SP No. 83938 and CA-G.R. SP No. 84281. These assailed Decision and
Resolution set aside the Decision4 dated November 28, 2003 of the National Labor Relations
Commission (NLRC) declaring Joseph Basso's (Basso) dismissal illegal, and ordering the payment of
separation pay as alternative to reinstatement and full backwages until the date of the Decision.

The Facts

Petitioner Continental Micronesia, Inc. (CMI) is a foreign corporation organized and e:xisting under the
laws of and domiciled in the United States of America (US). It is licensed to do business in the
Philippines.5 Basso, a US citizen, resided in the Philippines prior to his death. 6

During his visit to Manila in 1990, Mr. Keith R. Braden (Mr. Braden), Managing Director-Asia of
Continental Airlines, Inc. (Continental), offered Basso the position of General Manager of the Philippine
Branch of Continental. Basso accepted the offer. 7

It was not until much later that Mr. Braden, who had since returned to the US, sent Basso the
employment contract8 dated February 1, 1991, which Mr. Braden had already signed. Basso then
signed the employment contract and returned it to Mr. Braden as instructed.

On November 7, 1992, CMI took over the Philippine operations of Continental, with Basso retaining his
position as General Manager.9

On December 20, 1995, Basso received a letter from Mr. Ralph Schulz (Mr. Schulz), who was then
CMI’s Vice President of Marketing and Sales, informing Basso that he has agreed to work in CMI as a
consultant on an "as needed basis" effective February 1, 1996 to July 31, 1996. The letter also informed
Basso that: (1) he will not receive any monetary compensation but will continue being covered by the
insurance provided by CMI; (2) he will enjoy travel privileges; and (3) CMI will advance
Php1,140,000.00 for the payment of housing lease for 12 months.10

On January 11, 1996, Basso wrote a counter-proposal11 to Mr. Schulz regarding his employment status
in CMI. On March 14, 1996, Basso wrote another letter addressed to Ms. Marty Woodward (Ms.
Woodward) of CMI’s Human Resources Department inquiring about the status of his employment. 12 On
the same day, Ms. Woodward responded that pursuant to the employment contract dated February 1,
1991, Basso could be terminated at will upon a thirty-day notice. This notice was allegedly the letter
Basso received from Mr. Schulz on December 20, 1995. Ms. Woodward also reminded Basso of the
telephone conversation between him, Mr. Schulz and Ms. Woodward on December 19, 1995, where
they informed him of the company’s decision to relieve him as General Manager. Basso, instead, was
offered the position of consultant to CMI. Ms. Woodward also informed Basso that CMI rejected his
counter-proposal and, thus, terminated his employment effective January 31, 1996. CMI offered Basso
a severance pay, in consideration of the Php1,140,000.00 housing advance that CMI promised
him13 Basso filed a Complaint for Illegal Dismissal with Moral and Exemplary Damages against CMI on
December 19, 1996.14 Alleging the presence of foreign elements, CMI filed a Motion to Dismiss15 dated
February 10, 1997 on the ground of lack of jurisdiction over the person of CMI and the subject matter
of the controversy. In an Order16 dated August 27, 1997, the Labor Arbiter granted the Motion to
Dismiss. Applying the doctrine of lex loci contractus, the Labor Arbiter held that the terms and provisions
of the employment contract show that the parties did not intend to apply our Labor Code (Presidential
Decree No. 442). The Labor Arbiter also held that no employer-employee relationship existed between
Basso and the branch office of CMI in the Philippines, but between Basso and the foreign corporation
itself.

On appeal, the NLRC remanded the case to the Labor Arbiter for the determination of certain facts to
settle the issue on jurisdiction. NLRC ruled that the issue on whether the principle of lex loci contractus
or lex loci celebrationis should apply has to be further threshed out.17

Labor Arbiter’s Ruling

Labor Arbiter Madjayran H. Ajan in his Decision18 dated September 24, 1999 dismissed the case for
lack of merit and jurisdiction.

The Labor Arbiter agreed with CMI that the employment contract was executed in the US "since the
letter-offer was under the Texas letterhead and the acceptance of Complainant was returned
there."19 Thus, applying the doctrine of lex loci celebrationis, US laws apply. Also, applying lex loci
contractus, the Labor Arbiter ruled that the parties did not intend to apply Philippine laws, thus:

Although the contract does not state what law shall apply, it is obvious that Philippine laws were not
written into it. More specifically, the Philippine law on taxes and the Labor Code were not intended by
the parties to apply, otherwise Par. 7 on the payment by Complainant U.S. Federal and Home State
income taxes, and Pars. 22/23 on termination by 30-day prior notice, will not be there. The contract
was prepared in contemplation of Texas or U.S. laws where Par. 7 is required and Pars. 22/23 is
allowed.20

The Labor Arbiter also ruled that Basso was terminated for a valid cause based on the allegations of
CMI that Basso committed a series of acts that constitute breach of trust and loss of confidence. 21

The Labor Arbiter, however, found CMI to have voluntarily submitted to his office’s jurisdiction. CMI
participated in the proceedings, submitted evidence on the merits of the case, and sought affirmative
relief through a motion to dismiss.22

NLRC’s Ruling

On appeal, the NLRC Third Division promulgated its Decision23 dated November 28, 2003, the decretal
portion of which reads:
WHEREFORE, the decision dated 24 September 1999 is VACATED and SET ASIDE. Respondent
CMI is ordered to pay complainant the amount of US$5,416.00 for failure to comply with the due notice
requirement. The other claims are dismissed.

SO ORDERED.24

The NLRC did not agree with the pronouncement of the Labor Arbiter that his office has no jurisdiction
over the controversy. It ruled that the Labor Arbiter acquired jurisdiction over the case when CMI
voluntarily submitted to his office’s jurisdiction by presenting evidence, advancing arguments in support
of the legality of its acts, and praying for reliefs on the merits of the case. 25

On the merits, the NLRC agreed with the Labor Arbiter that Basso was dismissed for just and valid
causes on the ground of breach of trust and loss of confidence. The NLRC ruled that under the
applicable rules on loss of trust and confidence of a managerial employee, such as Basso, mere
existence of a basis for believing that such employee has breached the trust of his employer suffices.
However, the NLRC found that CMI denied Basso the required due process notice in his dismissal. 26

Both CMI and Basso filed their respective Motions for Reconsideration dated January 15, 2004 27 and
January 8, 2004.28 Both motions were dismissed in separate Resolutions dated March 15, 200429 and
February 27, 2004,30 respectively.

Basso filed a Petition for Certiorari dated April 16, 2004 with the Court of Appeals docketed as CA-G.R.
SP No. 83938.31 Basso imputed grave abuse of discretion on the part of the NLRC in ruling that he was
validly dismissed. CMI filed its own Petition for Certiorari dated May 13, 2004 docketed as CA-G.R. SP
No. 84281,32 alleging that the NLRC gravely abused its discretion when it assumed jurisdiction over the
person of CMI and the subject matter of the case.

In its Resolution dated October 7, 2004, the Court of Appeals consolidated the two cases 33 and ordered
the parties to file their respective Memoranda.

The Court of Appeal’s Decision

The Court of Appeals promulgated the now assailed Decision34 dated May 23, 2006, the relevant
dispositive portion of which reads:

WHEREFORE, the petition of Continental docketed as CA-G.R. SP No. 84281 is DENIED DUE
COURSE and DISMISSED.

On the other hand the petition of Basso docketed as CA-G.R. SP No. 83938 is GIVEN DUE COURSE
and GRANTED, and accordingly, the assailed Decision dated November 28, 2003 and Resolution
dated February 27, 2004 of the NLRC are SET ASIDE and VACATED. Instead judgment is rendered
hereby declaring the dismissal of Basso illegal and ordering Continental to pay him separation pay
equivalent to one (1) month pay for every year of service as an alternative to reinstatement. Further,
ordering Continental to pay Basso his full backwages from the date of his said illegal dismissal until
date of this decision. The claim for moral and exemplary damages as well as attorney’s fees are
dismissed.35

The Court of Appeals ruled that the Labor Arbiter and the NLRC had jurisdiction over the subject matter
of the case and over the parties. The Court of Appeals explained that jurisdiction over the subject matter
of the action is determined by the allegations of the complaint and the law. Since the case filed by
Basso is a termination dispute that is "undoubtedly cognizable by the labor tribunals", the Labor Arbiter
and the NLRC had jurisdiction to rule on the merits of the case. On the issue of jurisdiction over the
person of the parties, who are foreigners, the Court of Appeals ruled that jurisdiction over the person
of Basso was acquired when he filed the complaint for illegal dismissal, while jurisdiction over the
person of CMI was acquired through coercive process of service of summons to its agent in the
Philippines. The Court of Appeals also agreed that the active participation of CMI in the case rendered
moot the issue on jurisdiction.

On the merits of the case, the Court of Appeals declared that CMI illegally dismissed Basso. The Court
of Appeals found that CMI’s allegations of loss of trust and confidence were not established. CMI "failed
to prove its claim of the incidents which were its alleged bases for loss of trust or confidence."36 While
managerial employees can be dismissed for loss of trust and confidence, there must be a basis for
such loss, beyond mere whim or caprice.

After the parties filed their Motions for Reconsideration, 37 the Court of Appeals promulgated
Resolution38 dated June 19, 2007 denying CMI’s motion, while partially granting Basso’s as to the
computation of backwages.

Hence, this petition, which raises the following issues:

I.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN REVIEWING THE FACTUAL FINDINGS
OF THE NLRC INSTEAD OF LIMITING ITS INQUIRY INTO WHETHER OR NOT THE NLRC
COMMITTED GRAVE ABUSE OF DISCRETION.

II.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT THE LABOR ARBITER
AND THE NLRC HAD JURISDICTION TO HEAR AND TRY THE ILLEGAL DISMISSAL CASE.

III.

WHETHER OR NOT THE COURT OF APPEALS ERRED IN FINDING THAT BASSO WAS NOT
VALIDLY DISMISSED ON THE GROUND OF LOSS OF TRUST OR CONFIDENCE.

We begin with the second issue on the jurisdiction of the Labor Arbiter and the NLRC in the illegal
dismissal case. The first and third issues will be discussed jointly.

The labor tribunals had jurisdiction

over the parties and the subject
matter of the case.

CMI maintains that there is a conflict-of-laws issue that must be settled to determine proper jurisdiction
over the parties and the subject matter of the case. It also alleges that the existence of foreign elements
calls for the application of US laws and the doctrines of lex loci celebrationis (the law of the place of the
ceremony), lex loci contractus (law of the place where a contract is executed), and lex loci intentionis
(the intention of the parties as to the law that should govern their agreement). CMI also invokes the
application of the rule of forum non conveniens to determine the propriety of the assumption of
jurisdiction by the labor tribunals.

We agree with CMI that there is a conflict-of-laws issue that needs to be resolved first. Where the facts
establish the existence of foreign elements, the case presents a conflict-of-laws issue.39 The foreign
element in a case may appear in different forms, such as in this case, where one of the parties is an
alien and the other is domiciled in another state.

In Hasegawa v. Kitamura,40 we stated that in the judicial resolution of conflict-of-laws problems, three
consecutive phases are involved: jurisdiction, choice of law, and recognition and enforcement of
judgments. In resolving the conflicts problem, courts should ask the following questions:

1. "Under the law, do I have jurisdiction over the subject matter and the parties to this case?

2. "If the answer is yes, is this a convenient forum to the parties, in light of the facts?

3. "If the answer is yes, what is the conflicts rule for this particular problem?

4. "If the conflicts rule points to a foreign law, has said law been properly pleaded and proved by
the one invoking it?

5. "If so, is the application or enforcement of the foreign law in the forum one of the basic
exceptions to the application of foreign law? In short, is there any strong policy or vital interest
of the forum that is at stake in this case and which should preclude the application of foreign
law?41

Jurisdiction is defined as the power and authority of the courts to hear, try and decide cases. Jurisdiction
over the subject matter is conferred by the Constitution or by law and by the material allegations in the
complaint, regardless of whether or not the plaintiff is entitled to recover all or some of the claims or
reliefs sought therein.42 It cannot be acquired through a waiver or enlarged by the omission of the
parties or conferred by the acquiescence of the court. 43 That the employment contract of Basso was
replete with references to US laws, and that it originated from and was returned to the US, do not
automatically preclude our labor tribunals from exercising jurisdiction to hear and try this case.

This case stemmed from an illegal dismissal complaint. The Labor Code, under Article 217, clearly
vests original and exclusive jurisdiction to hear and decide cases involving termination disputes to the
Labor Arbiter.

Hence, the Labor Arbiter and the NLRC have jurisdiction over the subject matter of the case.

As regards jurisdiction over the parties, we agree with the Court of Appeals that the Labor Arbiter
acquired jurisdiction over the person of Basso, notwithstanding his citizenship, when he filed his
complaint against CMI. On the other hand, jurisdiction over the person of CMI was acquired through
the coercive process of service of summons. We note that CMI never denied that it was served with
summons. CMI has, in fact, voluntarily appeared and participated in the proceedings before the courts.
Though a foreign corporation, CMI is licensed to do business in the Philippines and has a local business
address here. The purpose of the law in requiring that foreign corporations doing business in the country
be licensed to do so, is to subject the foreign corporations to the jurisdiction of our courts.44

Considering that the Labor Arbiter and the NLRC have jurisdiction over the parties and the subject
matter of this case, these tribunals may proceed to try the case even if the rules of conflict-of-laws or
the convenience of the parties point to a foreign forum, this being an exercise of sovereign prerogative
of the country where the case is filed.45

The next question is whether the local forum is the convenient forum in light of the facts of the case.
CMI contends that a Philippine court is an inconvenient forum.
We disagree.

Under the doctrine of forum non conveniens, a Philippine court in a conflict-of-laws case may assume
jurisdiction if it chooses to do so, provided, that the following requisites are met: (1) that the Philippine
Court is one to which the parties may conveniently resort to; (2) that the Philippine Court is in a position
to make an intelligent decision as to the law and the facts; and (3) that the Philippine Court has or is
likely to have power to enforce its decision.46 All these requisites are present here.

Basso may conveniently resort to our labor tribunals as he and CMI had physical presence in the
Philippines during the duration of the trial. CMI has a Philippine branch, while Basso, before his death,
was residing here.

Thus, it could be reasonably expected that no extraordinary measures were needed for the parties to
make arrangements in advocating their respective cases.

The labor tribunals can make an intelligent decision as to the law and facts. The incident subject of this
case (i.e. dismissal of Basso) happened in the Philippines, the surrounding circumstances of which can
be ascertained without having to leave the Philippines. The acts that allegedly led to loss of trust and
confidence and Basso’s eventual dismissal were committed in the Philippines. As to the law, we hold
that Philippine law is the proper law of the forum, as we shall discuss shortly. Also, the labor tribunals
have the power to enforce their judgments because they acquired jurisdiction over the persons of both
parties.

Our labor tribunals being the convenient fora, the next question is what law should apply in resolving
this case.

The choice-of-law issue in a conflict-of-laws case seeks to answer the following important questions:
(1) What legal system should control a given situation where some of the significant facts occurred in
two or more states; and (2) to what extent should the chosen legal system regulate the
situation.47 These questions are entirely different from the question of jurisdiction that only seeks to
answer whether the courts of a state where the case is initiated have jurisdiction to enter a
judgment.48 As such, the power to exercise jurisdiction does not automatically give a state constitutional
authority to apply forum law.49

CMI insists that US law is the applicable choice-of-law under the principles of lex loci celebrationis and
lex loci contractus. It argues that the contract of employment originated from and was returned to the
US after Basso signed it, and hence, was perfected there. CMI further claims that the references to US
law in the employment contract show the parties’ intention to apply US law and not ours. These
references are:

a. Foreign station allowance of forty percent (40%) using the "U.S. State Department Index, the
base being Washington, D.C."

b. Tax equalization that made Basso responsible for "federal and any home state income taxes."

c. Hardship allowance of fifteen percent (15%) of base pay based upon the "U.S. Department of
State Indexes of living costs abroad."

d. The employment arrangement is "one at will, terminable by either party without any further
liability on thirty days prior written notice."50
CMI asserts that the US law on labor relations particularly, the US Railway Labor Act sanctions
termination-at-will provisions in an employment contract. Thus, CMI concludes that if such laws were
applied, there would have been no illegal dismissal to speak of because the termination-at-will provision
in Basso’s employment contract would have been perfectly valid.

We disagree.

In Saudi Arabian Airlines v. Court of Appeals,51 we emphasized that an essential element of conflict
rules is the indication of a "test" or "connecting factor" or "point of contact". Choice-of-law rules
invariably consist of a factual relationship (such as property right, contract claim) and a connecting fact
or point of contact, such as the situs of the res, the place of celebration, the place of performance, or
the place of wrongdoing. Pursuant to Saudi Arabian Airlines, we hold that the "test factors," "points of
contact" or "connecting factors" in this case are the following:

(1) The nationality, domicile or residence of Basso;

(2) The seat of CMI;

(3) The place where the employment contract has been made, the locus actus;

(4) The place where the act is intended to come into effect, e.g., the place of performance of
contractual duties;

(5) The intention of the contracting parties as to the law that should govern their agreement, the
lex loci intentionis; and

(6) The place where judicial or administrative proceedings are instituted or done. 52

Applying the foregoing in this case, we conclude that Philippine law is the applicable law. Basso, though
a US citizen, was a resident here from the time he was hired by CMI until his death during the pendency
of the case. CMI, while a foreign corporation, has a license to do business in the Philippines and
maintains a branch here, where Basso was hired to work. The contract of employment was negotiated
in the Philippines. A purely consensual contract, it was also perfected in the Philippines when Basso
accepted the terms and conditions of his employment as offered by CMI. The place of performance
relative to Basso’s contractual duties was in the Philippines. The alleged prohibited acts of Basso that
warranted his dismissal were committed in the Philippines.

Clearly, the Philippines is the state with the most significant relationship to the problem. Thus, we hold
that CMI and Basso intended Philippine law to govern, notwithstanding some references made to US
laws and the fact that this intention was not expressly stated in the contract. We explained in Philippine
Export and Foreign Loan Guarantee Corporation v. V. P. Eusebio Construction, Inc. 53 that the law
selected may be implied from such factors as substantial connection with the transaction, or the
nationality or domicile of the parties.54 We cautioned, however, that while Philippine courts would do
well to adopt the first and most basic rule in most legal systems, namely, to allow the parties to select
the law applicable to their contract, the selection is subject to the limitation that it is not against the law,
morals, or public policy of the forum.55

Similarly, in Bank of America, NT & SA v. American Realty Corporation, 56 we ruled that a foreign law,
judgment or contract contrary to a sound and established public policy of the forum shall not be applied.
Thus:
Moreover, foreign law should not be applied when its application would work undeniable injustice to the
citizens or residents of the forum. To give justice is the most important function of law; hence, a law, or
judgment or contract that is obviously unjust negates the fundamental principles of Conflict of Laws. 57

Termination-at-will is anathema to the public policies on labor protection espoused by our laws and
Constitution, which dictates that no worker shall be dismissed except for just and authorized causes
provided by law and after due process having been complied with.58 Hence, the US Railway Labor Act,
which sanctions termination-at-will, should not be applied in this case.

Additionally, the rule is that there is no judicial notice of any foreign law. As any other fact, it must be
alleged and proved.59 If the foreign law is not properly pleaded or proved, the presumption of identity
or similarity of the foreign law to our own laws, otherwise known as processual presumption, applies.
Here, US law may have been properly pleaded but it was not proved in the labor tribunals.

Having disposed of the issue on jurisdiction, we now rule on the first and third issues.

The Court of Appeals may review the

factual findings of the NLRC in a
Rule 65 petition.

CMI submits that the Court of Appeals overstepped the boundaries of the limited scope of its certiorari
jurisdiction when instead of ruling on the existence of grave abuse of discretion, it proceeded to pass
upon the legality and propriety of Basso’s dismissal. Moreover, CMI asserts that it was error on the part
of the Court of Appeals to re-evaluate the evidence and circumstances surrounding the dismissal of
Basso.

We disagree.

The power of the Court of Appeals to review NLRC decisions via a Petition for Certiorari under Rule 65
of the Revised Rules of Court was settled in our decision in St. Martin Funeral Home v. NLRC. 60 The
general rule is that certiorari does not lie to review errors of judgment of the trial court, as well as that
of a quasi-judicial tribunal. In certiorari proceedings, judicial review does not go as far as to examine
and assess the evidence of the parties and to weigh their probative value.61 However, this rule admits
of exceptions. In Globe Telecom, Inc. v. Florendo-Flores,62 we stated:

In the review of an NLRC decision through a special civil action for certiorari, resolution is confined only
to issues of jurisdiction and grave abuse of discretion on the part of the labor tribunal. Hence, the Court
refrains from reviewing factual assessments of lower courts and agencies exercising adjudicative
functions, such as the NLRC.

Occasionally, however, the Court is constrained to delve into factual matters where, as in the instant
case, the findings of the NLRC contradict those of the Labor Arbiter.

In this instance, the Court in the exercise of its equity jurisdiction may look into the records of the case
and reexamine the questioned findings. As a corollary, this Court is clothed with ample authority to
review matters, even if they are not assigned as errors in their appeal, if it finds that their consideration
is necessary to arrive at a just decision of the case. The same principles are now necessarily adhered
to and are applied by the Court of Appeals in its expanded jurisdiction over labor cases elevated through
a petition for certiorari; thus, we see no error on its part when it made anew a factual determination of
the matters and on that basis reversed the ruling of the NLRC. 63 (Citations omitted.)
Thus, the Court of Appeals may grant the petition when the factual findings complained of are not
supported by the evidence on record; when it is necessary to prevent a substantial wrong or to do
substantial justice; when the findings of the NLRC contradict those of the Labor Arbiter; and when
necessary to arrive at a just decision of the case. 64 To make these findings, the Court of Appeals
necessarily has to look at the evidence and make its own factual determination. 65

Since the findings of the Labor Arbiter differ with that of the NLRC, we find that the Court of Appeals
correctly exercised its power to review the evidence and the records of the illegal dismissal case.

Basso was illegally dismissed.

It is of no moment that Basso was a managerial employee of CMI. Managerial employees enjoy security
of tenure and the right of the management to dismiss must be balanced against the managerial
employee’s right to security of tenure, which is not one of the guaranties he gives up.66

In Apo Cement Corporation v. Baptisma,67 we ruled that for an employer to validly dismiss an employee
on the ground of loss of trust and confidence under Article 282 (c) of the Labor Code, the employer
must observe the following guidelines: 1) loss of confidence should not be simulated; 2) it should not
be used as subterfuge for causes which are improper, illegal or unjustified; 3) it may not be arbitrarily
asserted in the face of overwhelming evidence to the contrary; and 4) it must be genuine, not a mere
afterthought to justify earlier action taken in bad faith. More importantly, it must be based on a willful
breach of trust and founded on clearly established facts.

We agree with the Court of Appeals that the dismissal of Basso was not founded on clearly established
facts and evidence sufficient to warrant dismissal from employment. While proof beyond reasonable
doubt is not required to establish loss of trust and confidence, substantial evidence is required and on
the employer rests the burden to establish it.68 There must be some basis for the loss of trust, or that
the employer has reasonable ground to believe that the employee is responsible for misconduct, which
renders him unworthy of the trust and confidence demanded by his position. 69

CMI alleges that Basso committed the following:

(1) Basso delegated too much responsibility to the General Sales Agent and relied heavily on its
judgments.70

(2) Basso excessively issued promotional tickets to his friends who had no direct business with
CMI.71

(3) The advertising agency that CMI contracted had to deal directly with Guam because Basso
was hardly available.72 Mr. Schulz discovered that Basso exceeded the advertising budget by
$76,000.00 in 1994 and by $20,000.00 in 1995. 73

(4) Basso spent more time and attention to his personal businesses and was reputed to own
nightclubs in the Philippines.74

(5) Basso used free tickets and advertising money to promote his personal business, 75 such as
a brochure that jointly advertised one of Basso’s nightclubs with CMI.

We find that CMI failed to discharge its burden to prove the above acts. CMI merely submitted affidavits
of its officers, without any other corroborating evidence. Basso, on the other hand, had adequately
explained his side. On the advertising agency and budget issues raised by CMI, he explained that these
were blatant lies as the advertising needs of CMI were centralized in its Guam office and the Philippine
office was not authorized to deal with CMI’s advertising agency, except on minor issues. 76 Basso further
stated that under CMI’s existing policy, ninety percent (90%) of the advertising decisions were
delegated to the advertising firm of McCann- Ericsson in Japan and only ten percent (10%) were left to
the Philippine office.77 Basso also denied the allegations of owning nightclubs and promoting his
personal businesses and explained that it was illegal for foreigners in the Philippines to engage in retail
trade in the first place.

Apart from these accusations, CMI likewise presented the findings of the audit team headed by Mr.
Stephen D. Goepfert, showing that "for the period of 1995 and 1996, personal passes for Continental
and other airline employees were noted (sic) to be issued for which no service charge was
collected."78 The audit cited the trip pass log of a total of 10 months. The trip log does not show,
however, that Basso caused all the ticket issuances.

More, half of the trips in the log occurred from March to July of 1996, 79 a period beyond the tenure of
Basso. Basso was terminated effectively on January 31, 1996 as indicated in the letter of Ms.
Woodward.80

CMI also accused Basso of making "questionable overseas phone calls". Basso, however, adequately
explained in his Reply81 that the phone calls to Italy and Portland, USA were made for the purpose of
looking for a technical maintenance personnel with US Federal Aviation Authority qualifications, which
CMI needed at that time. The calls to the US were also made in connection with his functions as General
Manager, such as inquiries on his tax returns filed in Nevada. Basso also explained that the phone
lines82 were open direct lines that all personnel were free to use to make direct long distance calls. 83

Finally, CMI alleged that Basso approved the disbursement of Php80,000.00 to cover the transfer fee
of the Manila Polo Club share from Mr. Kenneth Glover, the previous General Manager, to him. CMI
claimed that "nowhere in the said contract was it likewise indicated that the Manila Polo Club share was
part of the compensation package given by CMI to Basso."84 CMI’s claims are not credible. Basso
explained that the Manila Polo Club share was offered to him as a bonus to entice him to leave his then
employer, United Airlines. A letter from Mr. Paul J. Casey, former president of Continental, supports
Basso.85 In the letter, Mr. Casey explained:

As a signing bonus, and a perk to attract Mr. Basso to join Continental Airlines, he was given the Manila
Polo Club share and authorized to have the share re-issued in his name. In addition to giving Mr. Basso
the Manila Polo Club share, Continental agreed to pay the dues for a period of three years and this was
embodied in his contract with Continental. This was all done with my knowledge and approval. 86

Clause 14 of the employment contract also states:

Club Memberships: The Company will locally pay annual dues for membership in a club in Manila that
your immediate supervisor and I agree is of at least that value to Continental through you in your role
as our General Manager for the Philippines.87

Taken together, the above pieces of evidence suggest that the Manila Polo Club share was part of
Basso’s compensation package and thus he validly used company funds to pay for the transfer fees. If
doubts exist between the evidence presented by the employer and the employee, the scales of justice
must be tilted in favor of the latter. 88

Finally, CMI violated procedural due process in terminating Basso. In King of Kings Transport, Inc. v.
Mamac89 we detailed the procedural due process steps in termination of employment:

To clarify, the following should be considered in terminating the services of employees:

 (1) The first written notice to be served on the employees should contain the specific causes or
grounds for termination against them, and a directive that the employees are given the
opportunity to submit their written explanation within a reasonable period. "Reasonable
opportunity" under the Omnibus Rules means every kind of assistance that management must
accord to the employees to enable them to prepare adequately for their defense. This should be
construed as a period of at least five (5) calendar days from receipt of the notice to give the
employees an opportunity to study the accusation against them, consult a union official or lawyer,
gather data and evidence, and decide on the defenses they will raise against the complaint.
Moreover, in order to enable the employees to intelligently prepare their explanation and
defenses, the notice should contain a detailed narration of the facts and circumstances that will
serve as basis for the charge against the employees. A general description of the charge will not
suffice. Lastly, the notice should specifically mention which company rules, if any, are violated
and/or which among the grounds under Art. 282 is being charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or
conference wherein the employees will be given the opportunity to: (1) explain and clarify their
defenses to the charge against them; (2) present evidence in support of their defenses; and (3)
rebut the evidence presented against them by the management.

During the hearing or conference, the employees are given the chance to defend themselves
personally, with the assistance of a representative or counsel of their choice. Moreover, this
conference or hearing could be used by the parties as an opportunity to come to an amicable
settlement.

(3) After determining that termination of employment is justified, the employers shall serve the
employees a written notice of termination indicating that: (1) all circumstances involving the
charge against the employees have been considered; and (2) grounds have been established
to justify the severance of their employment. (Emphasis in original.)

Here, Mr. Schulz’s and Ms. Woodward’s letters dated December 19, 1995 and March 14, 1996,
respectively, are not one of the valid twin notices. Neither identified the alleged acts that CMI now
claims as bases for Basso’s termination. Ms. Woodward’s letter even stressed that the original plan
was to remove Basso as General Manager but with an offer to make him consultant. It was inconsistent
of CMI to declare Basso as unworthy of its trust and confidence and, in the same breath, offer him the
position of consultant. As the Court of Appeals pointed out:

But mark well that Basso was clearly notified that the sole ground for his dismissal was the exercise of
the termination at will clause in the employment contract. The alleged loss of trust and confidence
claimed by Continental appears to be a mere afterthought belatedly trotted out to save the day. 90

Basso is entitled to separation pay and full backwages.

Under Article 279 of the Labor Code, an employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and other privileges, and to his full backwages, inclusive
of allowances and to his other benefits or their monetary equivalent computed from the time his
compensation was withheld up to the time of actual reinstatement.

Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary
for every year of service should be awarded as an alternative.1âwphi1 The payment of separation pay
is in addition to payment of backwages.91 In the case of Basso, reinstatement is no longer possible
since he has already passed away. Thus, Basso’s separation pay with full backwages shall be paid to
his heirs.
As to the computation of backwages, we agree with CMI that Basso was entitled to backwages only up
to the time he reached 65 years old, the compulsory retirement age under the law. 92 This is our
consistent ruling.93

When Basso was illegally dismissed on January 31, 1996, he was already 58 years old. 94 He turned
65 years old on October 2, 2002. Since backwages are granted on grounds of equity for earnings lost
by an employee due to his illegal dismissal,95 Basso was entitled to backwages only for the period he
could have worked had he not been illegally dismissed, i.e. from January 31, 1996 to October 2, 2002.

WHEREFORE, premises considered, the Decision of the Court of Appeals dated May 23, 2006 and
Resolution dated June 19, 2007 in the consolidated cases CA-G.R. SP No. 83938 and CA-G.R. SP No.
84281 are

AFFIRMED, with MODIFICATION as to the award of backwages. Petitioner Continental Micronesia,

Inc. is hereby ordered to pay Respondent Joseph Basso’s heirs: 1) separation pay equivalent to one
(1) month pay for every year of service, and 2) full backwages from January 31, 1996, the date of his
illegal dismissal, to October 2, 2002, the date of his compulsory retirement age.

SO ORDERED.
 KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., v. MINORU
KITAMURA G.R. No. 149177; November 23, 2007

THIRD DIVISION

G.R. No. 149177 November 23, 2007

KAZUHIRO HASEGAWA and NIPPON ENGINEERING CONSULTANTS CO., LTD., Petitioners,

vs.
MINORU KITAMURA, Respondent.

DECISION

NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the
April 18, 2001 Decision1 of the Court of Appeals (CA) in CA-G.R. SP No. 60827, and the July 25, 2001
Resolution2 denying the motion for reconsideration thereof.

On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd. (Nippon), a Japanese
consultancy firm providing technical and management support in the infrastructure projects of foreign
governments,3 entered into an Independent Contractor Agreement (ICA) with respondent Minoru
Kitamura, a Japanese national permanently residing in the Philippines. 4 The agreement provides that
respondent was to extend professional services to Nippon for a year starting on April 1, 1999. 5 Nippon
then assigned respondent to work as the project manager of the Southern Tagalog Access Road
(STAR) Project in the Philippines, following the company's consultancy contract with the Philippine
Government.6

When the STAR Project was near completion, the Department of Public Works and Highways (DPWH)
engaged the consultancy services of Nippon, on January 28, 2000, this time for the detailed engineering
and construction supervision of the Bongabon-Baler Road Improvement (BBRI) Project.7 Respondent
was named as the project manager in the contract's Appendix 3.1. 8

On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general manager for its International
Division, informed respondent that the company had no more intention of automatically renewing his
ICA. His services would be engaged by the company only up to the substantial completion of the STAR
Project on March 31, 2000, just in time for the ICA's expiry. 9

Threatened with impending unemployment, respondent, through his lawyer, requested a negotiation
conference and demanded that he be assigned to the BBRI project. Nippon insisted that respondent’s
contract was for a fixed term that had already expired, and refused to negotiate for the renewal of the
ICA.10

As he was not able to generate a positive response from the petitioners, respondent consequently
initiated on June 1, 2000 Civil Case No. 00-0264 for specific performance and damages with the
Regional Trial Court of Lipa City.11

For their part, petitioners, contending that the ICA had been perfected in Japan and executed by and
between Japanese nationals, moved to dismiss the complaint for lack of jurisdiction. They asserted that
the claim for improper pre-termination of respondent's ICA could only be heard and ventilated in the
proper courts of Japan following the principles of lex loci celebrationis and lex contractus.12
In the meantime, on June 20, 2000, the DPWH approved Nippon's request for the replacement of
Kitamura by a certain Y. Kotake as project manager of the BBRI Project. 13

On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank14 that matters
connected with the performance of contracts are regulated by the law prevailing at the place of
performance,15 denied the motion to dismiss.16 The trial court subsequently denied petitioners' motion
for reconsideration,17 prompting them to file with the appellate court, on August 14, 2000,
their first Petition for Certiorari under Rule 65 [docketed as CA-G.R. SP No. 60205].18 On August 23,
2000, the CA resolved to dismiss the petition on procedural grounds—for lack of statement of material
dates and for insufficient verification and certification against forum shopping. 19 An Entry of Judgment
was later issued by the appellate court on September 20, 2000. 20

Aggrieved by this development, petitioners filed with the CA, on September 19, 2000, still within the
reglementary period, a second Petition for Certiorari under Rule 65 already stating therein the material
dates and attaching thereto the proper verification and certification. This second petition, which
substantially raised the same issues as those in the first, was docketed as CA-G.R. SP No. 60827.21

Ruling on the merits of the second petition, the appellate court rendered the assailed April 18, 2001
Decision22 finding no grave abuse of discretion in the trial court's denial of the motion to dismiss. The
CA ruled, among others, that the principle of lex loci celebrationis was not applicable to the case,
because nowhere in the pleadings was the validity of the written agreement put in issue. The CA thus
declared that the trial court was correct in applying instead the principle of lex loci solutionis.23

Petitioners' motion for reconsideration was subsequently denied by the CA in the assailed July 25, 2001
Resolution.24

Remaining steadfast in their stance despite the series of denials, petitioners instituted the instant
Petition for Review on Certiorari25 imputing the following errors to the appellate court:

A. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE

TRIAL COURT VALIDLY EXERCISED JURISDICTION OVER THE INSTANT
CONTROVERSY, DESPITE THE FACT THAT THE CONTRACT SUBJECT MATTER OF THE
PROCEEDINGS A QUO WAS ENTERED INTO BY AND BETWEEN TWO JAPANESE
NATIONALS, WRITTEN WHOLLY IN THE JAPANESE LANGUAGE AND EXECUTED IN
TOKYO, JAPAN.

B. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN OVERLOOKING THE

NEED TO REVIEW OUR ADHERENCE TO THE PRINCIPLE OF LEX LOCI SOLUTIONIS IN
THE LIGHT OF RECENT DEVELOPMENT[S] IN PRIVATE INTERNATIONAL LAWS. 26

The pivotal question that this Court is called upon to resolve is whether the subject matter jurisdiction
of Philippine courts in civil cases for specific performance and damages involving contracts executed
outside the country by foreign nationals may be assailed on the principles of lex loci celebrationis, lex
contractus, the "state of the most significant relationship rule," or forum non conveniens.

However, before ruling on this issue, we must first dispose of the procedural matters raised by the
respondent.

Kitamura contends that the finality of the appellate court's decision in CA-G.R. SP No. 60205 has
already barred the filing of the second petition docketed as CA-G.R. SP No. 60827 (fundamentally
raising the same issues as those in the first one) and the instant petition for review thereof.
We do not agree. When the CA dismissed CA-G.R. SP No. 60205 on account of the petition's defective
certification of non-forum shopping, it was a dismissal without prejudice.27 The same holds true in the
CA's dismissal of the said case due to defects in the formal requirement of verification 28 and in the other
requirement in Rule 46 of the Rules of Court on the statement of the material dates. 29 The dismissal
being without prejudice, petitioners can re-file the petition, or file a second petition attaching thereto the
appropriate verification and certification—as they, in fact did—and stating therein the material dates,
within the prescribed period30 in Section 4, Rule 65 of the said Rules. 31

The dismissal of a case without prejudice signifies the absence of a decision on the merits and leaves
the parties free to litigate the matter in a subsequent action as though the dismissed action had not
been commenced. In other words, the termination of a case not on the merits does not bar another
action involving the same parties, on the same subject matter and theory. 32

Necessarily, because the said dismissal is without prejudice and has no res judicata effect, and even if
petitioners still indicated in the verification and certification of the second certiorari petition that the first
had already been dismissed on procedural grounds,33 petitioners are no longer required by the Rules
to indicate in their certification of non-forum shopping in the instant petition for review of the second
certiorari petition, the status of the aforesaid first petition before the CA. In any case, an omission in
the certificate of non-forum shopping about any event that will not constitute res judicata and litis
pendentia, as in the present case, is not a fatal defect. It will not warrant the dismissal and nullification
of the entire proceedings, considering that the evils sought to be prevented by the said certificate are
no longer present.34

The Court also finds no merit in respondent's contention that petitioner Hasegawa is only authorized to
verify and certify, on behalf of Nippon, the certiorari petition filed with the CA and not the instant petition.
True, the Authorization35 dated September 4, 2000, which is attached to the second certiorari petition
and which is also attached to the instant petition for review, is limited in scope—its wordings indicate
that Hasegawa is given the authority to sign for and act on behalf of the company only in the petition
filed with the appellate court, and that authority cannot extend to the instant petition for review. 36 In a
plethora of cases, however, this Court has liberally applied the Rules or even suspended its application
whenever a satisfactory explanation and a subsequent fulfillment of the requirements have been
made.37 Given that petitioners herein sufficiently explained their misgivings on this point and appended
to their Reply38 an updated Authorization39 for Hasegawa to act on behalf of the company in the instant
petition, the Court finds the same as sufficient compliance with the Rules.

However, the Court cannot extend the same liberal treatment to the defect in the verification and
certification. As respondent pointed out, and to which we agree, Hasegawa is truly not authorized to
act on behalf of Nippon in this case. The aforesaid September 4, 2000 Authorization and even the
subsequent August 17, 2001 Authorization were issued only by Nippon's president and chief executive
officer, not by the company's board of directors. In not a few cases, we have ruled that corporate powers
are exercised by the board of directors; thus, no person, not even its officers, can bind the corporation,
in the absence of authority from the board.40 Considering that Hasegawa verified and certified the
petition only on his behalf and not on behalf of the other petitioner, the petition has to be denied pursuant
to Loquias v. Office of the Ombudsman.41 Substantial compliance will not suffice in a matter that
demands strict observance of the Rules.42 While technical rules of procedure are designed not to
frustrate the ends of justice, nonetheless, they are intended to effect the proper and orderly disposition
of cases and effectively prevent the clogging of court dockets. 43

Further, the Court has observed that petitioners incorrectly filed a Rule 65 petition to question the trial
court's denial of their motion to dismiss. It is a well-established rule that an order denying a motion to
dismiss is interlocutory, and cannot be the subject of the extraordinary petition
for certiorari or mandamus. The appropriate recourse is to file an answer and to interpose as defenses
the objections raised in the motion, to proceed to trial, and, in case of an adverse decision, to elevate
the entire case by appeal in due course.44 While there are recognized exceptions to this
rule,45 petitioners' case does not fall among them.

This brings us to the discussion of the substantive issue of the case.

Asserting that the RTC of Lipa City is an inconvenient forum, petitioners question its jurisdiction to hear
and resolve the civil case for specific performance and damages filed by the respondent. The ICA
subject of the litigation was entered into and perfected in Tokyo, Japan, by Japanese nationals, and
written wholly in the Japanese language. Thus, petitioners posit that local courts have no substantial
relationship to the parties46 following the [state of the] most significant relationship rule in Private
International Law.47

The Court notes that petitioners adopted an additional but different theory when they elevated the case
to the appellate court. In the Motion to Dismiss48 filed with the trial court, petitioners never contended
that the RTC is an inconvenient forum. They merely argued that the applicable law which will determine
the validity or invalidity of respondent's claim is that of Japan, following the principles of lex loci
celebrationis and lex contractus.49 While not abandoning this stance in their petition before the
appellate court, petitioners on certiorari significantly invoked the defense of forum non
conveniens.50 On petition for review before this Court, petitioners dropped their other arguments,
maintained the forum non conveniens defense, and introduced their new argument that the applicable
principle is the [state of the] most significant relationship rule. 51

Be that as it may, this Court is not inclined to deny this petition merely on the basis of the change in
theory, as explained in Philippine Ports Authority v. City of Iloilo.52 We only pointed out petitioners'
inconstancy in their arguments to emphasize their incorrect assertion of conflict of laws principles.

To elucidate, in the judicial resolution of conflicts problems, three consecutive phases are involved:
jurisdiction, choice of law, and recognition and enforcement of judgments. Corresponding to these
phases are the following questions: (1) Where can or should litigation be initiated? (2) Which law will
the court apply? and (3) Where can the resulting judgment be enforced? 53

Analytically, jurisdiction and choice of law are two distinct concepts. 54 Jurisdiction considers whether it
is fair to cause a defendant to travel to this state; choice of law asks the further question whether the
application of a substantive law which will determine the merits of the case is fair to both parties. The
power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum
law. While jurisdiction and the choice of the lex fori will often coincide, the "minimum contacts" for one
do not always provide the necessary "significant contacts" for the other. 55 The question of whether the
law of a state can be applied to a transaction is different from the question of whether the courts of that
state have jurisdiction to enter a judgment. 56

In this case, only the first phase is at issue—jurisdiction.1âwphi1 Jurisdiction, however, has various
aspects. For a court to validly exercise its power to adjudicate a controversy, it must have jurisdiction
over the plaintiff or the petitioner, over the defendant or the respondent, over the subject matter, over
the issues of the case and, in cases involving property, over the res or the thing which is the subject of
the litigation.57 In assailing the trial court's jurisdiction herein, petitioners are actually referring to subject
matter jurisdiction.

Jurisdiction over the subject matter in a judicial proceeding is conferred by the sovereign authority which
establishes and organizes the court. It is given only by law and in the manner prescribed by law. 58 It is
further determined by the allegations of the complaint irrespective of whether the plaintiff is entitled to
all or some of the claims asserted therein.59 To succeed in its motion for the dismissal of an action for
lack of jurisdiction over the subject matter of the claim,60 the movant must show that the court or tribunal
cannot act on the matter submitted to it because no law grants it the power to adjudicate the claims. 61

In the instant case, petitioners, in their motion to dismiss, do not claim that the trial court is not properly
vested by law with jurisdiction to hear the subject controversy for, indeed, Civil Case No. 00-0264 for
specific performance and damages is one not capable of pecuniary estimation and is properly
cognizable by the RTC of Lipa City.62 What they rather raise as grounds to question subject matter
jurisdiction are the principles of lex loci celebrationis and lex contractus, and the "state of the most
significant relationship rule."

The Court finds the invocation of these grounds unsound.

Lex loci celebrationis relates to the "law of the place of the ceremony"63 or the law of the place where
a contract is made.64 The doctrine of lex contractus or lex loci contractus means the "law of the place
where a contract is executed or to be performed." 65 It controls the nature, construction, and validity of
the contract66 and it may pertain to the law voluntarily agreed upon by the parties or the law intended
by them either expressly or implicitly. 67 Under the "state of the most significant relationship rule," to
ascertain what state law to apply to a dispute, the court should determine which state has the most
substantial connection to the occurrence and the parties. In a case involving a contract, the court should
consider where the contract was made, was negotiated, was to be performed, and the domicile, place
of business, or place of incorporation of the parties.68 This rule takes into account several contacts and
evaluates them according to their relative importance with respect to the particular issue to be
resolved.69

Since these three principles in conflict of laws make reference to the law applicable to a dispute, they
are rules proper for the second phase, the choice of law. 70 They determine which state's law is to be
applied in resolving the substantive issues of a conflicts problem. 71 Necessarily, as the only issue in
this case is that of jurisdiction, choice-of-law rules are not only inapplicable but also not yet called for.

Further, petitioners' premature invocation of choice-of-law rules is exposed by the fact that they have
not yet pointed out any conflict between the laws of Japan and ours. Before determining which law
should apply, first there should exist a conflict of laws situation requiring the application of the conflict
of laws rules.72 Also, when the law of a foreign country is invoked to provide the proper rules for the
solution of a case, the existence of such law must be pleaded and proved. 73

It should be noted that when a conflicts case, one involving a foreign element, is brought before a court
or administrative agency, there are three alternatives open to the latter in disposing of it: (1) dismiss
the case, either because of lack of jurisdiction or refusal to assume jurisdiction over the case; (2)
assume jurisdiction over the case and apply the internal law of the forum; or (3) assume jurisdiction
over the case and take into account or apply the law of some other State or States. 74 The court’s power
to hear cases and controversies is derived from the Constitution and the laws. While it may choose to
recognize laws of foreign nations, the court is not limited by foreign sovereign law short of treaties or
other formal agreements, even in matters regarding rights provided by foreign sovereigns. 75

Neither can the other ground raised, forum non conveniens,76 be used to deprive the trial court of its
jurisdiction herein. First, it is not a proper basis for a motion to dismiss because Section 1, Rule 16 of
the Rules of Court does not include it as a ground.77 Second, whether a suit should be entertained or
dismissed on the basis of the said doctrine depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court. 78 In this case, the RTC decided to assume
jurisdiction. Third, the propriety of dismissing a case based on this principle requires a factual
determination; hence, this conflicts principle is more properly considered a matter of defense. 79
Accordingly, since the RTC is vested by law with the power to entertain and hear the civil case filed by
respondent and the grounds raised by petitioners to assail that jurisdiction are inappropriate, the trial
and appellate courts correctly denied the petitioners’ motion to dismiss.

WHEREFORE, premises considered, the petition for review on certiorari is DENIED.

SO ORDERED.
SAUDI ARABIAN AIRLINES (SAUDIA) AND BRENDA J. BETIA v. MA. JOPETTE M. REBESENCIO,
et. al. G.R. No. 198587, January 14, 2015

LEONEN, J.:
All Filipinos are entitled to the protection of the rights guaranteed in the Constitution.

This is a Petition for Review on Certiorari with application for the issuance of a temporary restraining
order and/or writ of preliminary injunction under Rule 45 of the 1997 Rules of Civil Procedure praying
that judgment be rendered reversing and setting aside the June 16, 2011 Decision [1] and September
13, 2011 Resolution[2] of the Court of Appeals in CA-G.R. SP. No. 113006.

Petitioner Saudi Arabian Airlines (Saudia) is a foreign corporation established and existing under the
laws of Jeddah, Kingdom of Saudi Arabia. It has a Philippine office located at 4/F, Metro House Building,
Sen. Gil J. Puyat Avenue, Makati City.[3] In its Petition filed with this court, Saudia identified itself as
follows:

1. Petitioner SAUDIA is a foreign corporation established and existing under the Royal Decree No.
M/24 of 18.07.1385H (10.02.1962G) in Jeddah, Kingdom of Saudi Arabia ("KSA"). Its Philippine Office
is located at 4/F Metro House Building, Sen, Gil J. Puyat Avenue, Makati City (Philippine Office). It may
be served with orders of this Honorable Court through undersigned counsel at 4 th and 6th Floors,
Citibank Center Bldg., 8741 Paseo de Roxas, Makati City. [4] (Emphasis supplied)
Respondents (complainants before the Labor Arbiter) were recruited and hired by Saudia as Temporary
Flight Attendants with the accreditation and approval of the Philippine Overseas Employment
Administration.[5] After undergoing seminars required by the Philippine Overseas Employment
Administration for deployment overseas, as well as training modules offered by Saudia (e.g., initial flight
attendant/training course and transition training), and after working as Temporary Flight Attendants,
respondents became Permanent Flight Attendants. They then entered into Cabin Attendant contracts
with Saudia: Ma. Jopette M. Rebesencio (Ma. Jopette) on May 16, 1990; [6] Montassah B. Sacar-Adiong
(Montassah) and Rouen Ruth A. Cristobal (Rouen Ruth) on May 22, 1993; [7] and Loraine Schneider-
Cruz (Loraine) on August 27, 1995.[8]

Respondents continued their employment with Saudia until they were separated from service on
various dates in 2006.[9]

Respondents contended that the termination of their employment was illegal. They alleged that the
termination was made solely because they were pregnant. [10]

As respondents alleged, they had informed Saudia of their respective pregnancies and had gone
through the necessary procedures to process their maternity leaves. Initially, Saudia had given its
approval but later on informed respondents that its management in Jeddah, Saudi Arabia had
disapproved their maternity leaves. In addition, it required respondents to file their resignation letters. [11]

Respondents were told that if they did not resign, Saudia would terminate them all the same. The threat
of termination entailed the loss of benefits, such as separation pay and ticket discount entitlements. [12]

Specifically, Ma. Jopette received a call on October 16, 2006 from Saudia's Base Manager, Abdulmalik
Saddik (Abdulmalik).[13] Montassah was informed personally by Abdulmalik and a certain Faisal
Hussein on October 20, 2006 after being required to report to the office one (1) month into her maternity
leave.[14] Rouen Ruth was also personally informed by Abdulmalik on October 17, 2006 after being
required to report to the office by her Group Supervisor.[15] Loraine received a call on October 12, 2006
from her Group Supervisor, Dakila Salvador.[16]

Saudia anchored its disapproval of respondents' maternity leaves and demand for their resignation on
its "Unified Employment Contract for Female Cabin Attendants" (Unified Contract). [17] Under the Unified
Contract, the employment of a Flight Attendant who becomes pregnant is rendered void. It provides:

(H) Due to the essential nature of the Air Hostess functions to be physically fit on board to provide
various services required in normal or emergency cases on both domestic/international flights beside
her role in maintaining continuous safety and security of passengers, and since she will not be able to
maintain the required medical fitness while at work in case of pregnancy, accordingly, if the Air
Hostess becomes pregnant at any time during the term of this contract, this shall render her
employment contract as void and she will be terminated due to lack of medical
fitness.[18] (Emphasis supplied)
In their Comment on the present Petition,[19] respondents emphasized that the Unified Contract took
effect on September 23, 2006 (the first day of Ramadan), [20] well after they had filed and had their
maternity leaves approved. Ma. Jopette filed her maternity leave application on September 5,
2006.[21] Montassah filed her maternity leave application on August 29, 2006, and its approval was
already indicated in Saudia's computer system by August 30, 2006. [22] Rouen Ruth filed her maternity
leave application on September 13, 2006,[23] and Loraine filed her maternity leave application on August
22, 2006.[24]

Rather than comply and tender resignation letters, respondents filed separate appeal letters that were
all rejected.[25]

Despite these initial rejections, respondents each received calls on the morning of November 6, 2006
from Saudia's office secretary informing them that their maternity leaves had been approved. Saudia,
however, was quick to renege on its approval. On the evening of November 6, 2006, respondents again
received calls informing them that it had received notification from Jeddah, Saudi Arabia that their
maternity leaves had been disapproved.[26]

Faced with the dilemma of resigning or totally losing their benefits, respondents executed handwritten
resignation letters. In Montassah's and Rouen Ruth's cases, their resignations were executed on
Saudia's blank letterheads that Saudia had provided. These letterheads already had the word
"RESIGNATION" typed on the subject portions of their headings when these were handed to
respondents.[27]

On November 8, 2007, respondents filed a Complaint against Saudia and its officers for illegal dismissal
and for underpayment of salary, overtime pay, premium pay for holiday, rest day, premium, service
incentive leave pay, 13th month pay, separation pay, night shift differentials, medical expense
reimbursements, retirement benefits, illegal deduction, lay-over expense and allowances, moral and
exemplary damages, and attorney's fees.[28] The case was initially assigned to Labor Arbiter Hermino
V. Suelo and docketed as NLRC NCR Case No. 00-11-12342-07.

Saudia assailed the jurisdiction of the Labor Arbiter. [29] It claimed that all the determining points of
contact referred to foreign law and insisted that the Complaint ought to be dismissed on the ground
of forum non conveniens.[30] It added that respondents had no cause of action as they resigned
voluntarily.[31]

On December 12, 2008, Executive Labor Arbiter Fatima Jambaro-Franco rendered the
Decision[32] dismissing respondents' Complaint. The dispositive portion of this Decision reads:

WHEREFORE, premises' considered, judgment is hereby rendered DISMISSING the instant complaint
for lack of jurisdiction/merit.[33]
On respondents' appeal, the National Labor Relations Commission's Sixth Division reversed the ruling
of Executive Labor Arbiter Jambaro-Franco. It explained that "[considering that complainants-
appellants are OFWs, the Labor Arbiters and the NLRC has [sic] jurisdiction to hear and decide their
complaint for illegal termination."[34] On the matter of forum non conveniens, it noted that there were no
special circumstances that warranted its abstention from exercising jurisdiction. [35] On the issue of
whether respondents were validly dismissed, it held that there was nothing on record to support
Saudia's claim that respondents resigned voluntarily.

The dispositive portion of the November 19, 2009 National Labor Relations Commission
Decision[36] reads:

WHEREFORE, premises considered, judgment is hereby rendered finding the appeal impressed with
merit. The respondents-appellees are hereby directed to pay complainants-appellants the aggregate
amount of SR614,001.24 corresponding to their backwages and separation pay plus ten (10%) percent
thereof as attorney's fees. The decision of the Labor Arbiter dated December 12, 2008 is hereby
VACATED and SET ASIDE. Attached is the computation prepared by this Commission and made an
integral part of this Decision.[37]
In the Resolution dated February 11, 2010,[38] the National Labor Relations Commission denied
petitioners' Motion for Reconsideration.

In the June 16, 2011 Decision,[39] the Court of Appeals denied petitioners' Rule 65 Petition and modified
the Decision of the National Labor Relations Commission with respect to the award of separation pay
and backwages.

The dispositive portion of the Court of Appeals Decision reads:

WHEREFORE, the instant petition is hereby DENIED. The Decision dated November 19, 2009 issued
by public respondent, Sixth Division of the National Labor Relations Commission - National Capital
Region is MODIFIED only insofar as the computation of the award of separation pay and backwages.
For greater clarity, petitioners are ordered to pay private respondents separation pay which shall be
computed from private respondents' first day of employment up to the finality of this decision, at the
rate of one month per year of service and backwages which shall be computed from the date the private
respondents were illegally terminated until finality of this decision. Consequently, the ten percent (10%)
attorney's fees shall be based on the total amount of the award. The assailed Decision is affirmed in all
other respects.

The labor arbiter is hereby DIRECTED to make a recomputation based on the foregoing. [40]
In the Resolution dated September 13, 2011, [41] the Court of Appeals denied petitioners' Motion for
Reconsideration.

Hence, this Appeal was filed.

The issues for resolution are the following:

First, whether the Labor Arbiter and the National Labor Relations Commission may exercise
jurisdiction over Saudi Arabian Airlines and apply Philippine law in adjudicating the present dispute;
Second, whether respondents' voluntarily resigned or were illegally terminated; and

Lastly, whether Brenda J. Betia may be held personally liable along with Saudi Arabian Airlines.

Summons were validly served on Saudia and jurisdiction over it validly acquired.

There is no doubt that the pleadings and summons were served on Saudia through its
counsel.[42] Saudia, however, claims that the Labor Arbiter and the National Labor Relations
Commission had no jurisdiction over it because summons were never served on it but on "Saudia
Manila."[43] Referring to itself as "Saudia Jeddah," it claims that "Saudia Jeddah" and not "Saudia
Manila" was the employer of respondents because:

First, "Saudia Manila" was never a party to the Cabin Attendant contracts entered into by
respondents;

Second, it was "Saudia Jeddah" that provided the funds to pay for respondents' salaries and benefits;
and

Lastly, it was with "Saudia Jeddah" that respondents filed their resignations. [44]

Saudia posits that respondents' Complaint was brought against the wrong party because "Saudia
Manila," upon which summons was served, was never the employer of respondents. [45]

Saudia is vainly splitting hairs in its effort to absolve itself of liability. Other than its bare allegation,
there is no basis for concluding that "Saudia Jeddah" is distinct from "Saudia Manila."

What is clear is Saudia's statement in its own Petition that what it has is a "Philippine Office . . .
located at 4/F Metro House Building, Sen. Gil J. Puyat Avenue, Makati City." [46] Even in the position
paper that Saudia submitted to the Labor Arbiter, [47] what Saudia now refers to as "Saudia Jeddah"
was then only referred to as "Saudia Head Office at Jeddah, KSA," [48] while what Saudia now refers
to as "Saudia Manila" was then only referred to as "Saudia's office in Manila." [49]

By its own admission, Saudia, while a foreign corporation, has a Philippine office.

Section 3(d) of Republic Act No.. 7042, otherwise known as the Foreign Investments Act of 1991,
provides the following:

The phrase "doing business" shall include . . . opening offices, whether called "liaison" offices
or branches; . . . and any other act or acts that imply a continuity of commercial dealings or
arrangements and contemplate to that extent the performance of acts or works, or the exercise of
some of the functions normally incident to, and in progressive prosecution of commercial gain or of
the purpose and object of the business organization. (Emphasis supplied)
A plain application of Section 3(d) of the Foreign Investments Act leads to no other conclusion than that
Saudia is a foreign corporation doing business in the Philippines. As such, Saudia may be sued in the
Philippines and is subject to the jurisdiction of Philippine tribunals.

Moreover, since there is no real distinction between "Saudia Jeddah" and "Saudia Manila" — the latter
being nothing more than Saudia's local office — service of summons to Saudia's office in Manila
sufficed to vest jurisdiction over Saudia's person in Philippine tribunals.

II

Saudia asserts that Philippine courts and/or tribunals are not in a position to make an intelligent decision
as to the law and the facts. This is because respondents' Cabin Attendant contracts require the
application of the laws of Saudi Arabia, rather than those of the Philippines.[50] It claims that the difficulty
of ascertaining foreign law calls into operation the principle of forum non conveniens, thereby rendering
improper the exercise of jurisdiction by Philippine tribunals. [51]

A choice of law governing the validity of contracts or the interpretation of its provisions dees not
necessarily imply forum non conveniens. Choice of law and forum non conveniens are entirely different
matters.

Choice of law provisions are an offshoot of the fundamental principle of autonomy of contracts. Article
1306 of the Civil Code firmly ensconces this:

Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals, good customs, public order,
or public policy.
In contrast, forum non conveniens is a device akin to the rule against forum shopping. It is designed to
frustrate illicit means for securing advantages and vexing litigants that would otherwise be possible if
the venue of litigation (or dispute resolution) were left entirely to the whim of either party.

Contractual choice of law provisions factor into transnational litigation and dispute resolution in one of
or in a combination of four ways: (1) procedures for settling disputes, e.g., arbitration; (2) forum, i.e.,
venue; (3) governing law; and (4) basis for interpretation. Forum non conveniens relates to, but is not
subsumed by, the second of these.

Likewise, contractual choice of law is not determinative of jurisdiction. Stipulating on the laws of a given
jurisdiction as the governing law of a contract does not preclude the exercise of jurisdiction by tribunals
elsewhere. The reverse is equally true: The assumption of jurisdiction by tribunals does not ipso
facto mean that it cannot apply and rule on the basis of the parties' stipulation. In Hasegawa v.
Kitamura:[52]

Analytically, jurisdiction and choice of law are two distinct concepts. Jurisdiction considers whether it is
fair to cause a defendant to travel to this state; choice of law asks the further question whether the
application of a substantive law V'hich will determine the merits of the case is fair to both parties. The
power to exercise jurisdiction does not automatically give a state constitutional authority to apply forum
law. While jurisdiction and the choice of the lex fori will often, coincide, the "minimum contacts" for one
do not always provide the necessary "significant contacts" for the other. The question of whether the
law of a state can be applied to a transaction is different from the question of whether the courts of that
state have jurisdiction to enter a judgment. [53]
As various dealings, commercial or otherwise, are facilitated by the progressive ease of communication
and travel, persons from various jurisdictions find themselves transacting with each other. Contracts
involving foreign elements are, however, nothing new. Conflict of laws situations precipitated by
disputes and litigation anchored on these contracts are not totally novel.

Transnational transactions entail differing laws on the requirements Q for the validity of the formalities
and substantive provisions of contracts and their interpretation. These transactions inevitably lend
themselves to the possibility of various fora for litigation and dispute resolution. As observed by an
eminent expert on transnational law:

The more jurisdictions having an interest in, or merely even a point of contact with, a transaction or
relationship, the greater the number of potential fora for the resolution of disputes arising out of or
related to that transaction or relationship. In a world of increased mobility, where business and personal
transactions transcend national boundaries, the jurisdiction of a number of different fora may easily be
invoked in a single or a set of related disputes. [54]
Philippine law is definite as to what governs the formal or extrinsic validity of contracts. The first
paragraph of Article 17 of the Civil Code provides that "[t]he forms and solemnities of contracts . . . shall
be governed by the laws of the country in which they are executed"[55] (i.e., lex loci celebrationis).

In contrast, there is no statutorily established mode of settling conflict of laws situations on matters
pertaining to substantive content of contracts. It has been noted that three (3) modes have emerged:
(1) lex loci contractus or the law of the place of the making; (2) lex loci solutionis or the law of the place
of performance; and (3) lex loci intentionis or the law intended by the parties.[56]

Given Saudia's assertions, of particular relevance to resolving the present dispute is lex loci intentionis.

An author observed that Spanish jurists and commentators "favor lex loci intentionis."[57] These jurists
and commentators proceed from the Civil Code of Spain, which, like our Civil Code, is silent on what
governs the intrinsic validity of contracts, and the same civil law traditions from which we draw ours.

In this jurisdiction, this court, in Philippine Export and Foreign Loan Guarantee v. V.P. Eusebio
Construction, Inc.,[58] manifested preference for allowing the parties to select the law applicable to their
contract":

No conflicts rule on essential validity of contracts is expressly provided for in our laws. The rule followed
by most legal systems, however, is that the intrinsic validity of a contract must be governed by the lex
contractus or "proper law of the contract." This is the law voluntarily agreed upon by the parties (the lex
loci voluntatis) or the law intended by them either expressly or implicitly (the lex loci intentionis). The
law selected may be implied from such factors as substantial connection with the transaction, or the
nationality or domicile of the parties. Philippine courts would do well to adopt the first and most basic
rule in most legal systems, namely, to allow the parties to select the law applicable to their contract,
subject to the limitation that it is not against the law, morals, or public policy of the forum and that the
chosen law must bear a substantive relationship to the transaction.[59] (Emphasis in the original)
Saudia asserts that stipulations set in the Cabin Attendant contracts require the application of the laws
of Saudi Arabia. It insists that the need to comply with these stipulations calls into operation the doctrine
of forum non conveniens and, in turn, makes it necessary for Philippine tribunals to refrain from
exercising jurisdiction.

As mentioned, contractual choice of laws factors into transnational litigation in any or a combination of
four (4) ways. Moreover, forum non conveniens relates to one of these: choosing between multiple
possible fora.

Nevertheless, the possibility of parallel litigation in multiple fora — along with the host of difficulties it
poses — is not unique to transnational litigation. It is a difficulty that similarly arises in disputes well
within the bounds of a singe jurisdiction.

When parallel litigation arises strictly within the context of a single jurisdiction, such rules as those on
forum shopping, litis pendentia, and res judicata come into operation. Thus, in the Philippines, the 1997
Rules on Civil Procedure provide for willful and deliberate forum shopping as a ground not only for
summary dismissal with prejudice but also for citing parties and counsels in direct contempt, as well as
for the imposition of administrative sanctions.[60] Likewise, the same rules expressly provide that a party
may seek the dismissal of a Complaint or another pleading asserting a claim on the ground "[t]hat there
is another action pending between the same parties for the same cause," i.e., litis pendentia, or "[t]hat
the cause of action is barred by a prior judgment,"[61] i.e., res judicata.

Forum non conveniens, like the rules of forum shopping, litis pendentia, and res judicata, is a means
of addressing the problem of parallel litigation. While the rules of forum shopping, litis pendentia,
and res judicata are designed to address the problem of parallel litigation within a single
jurisdiction, forum non conveniens is a means devised to address parallel litigation arising in multiple
jurisdictions.

Forum non conveniens literally translates to "the forum is inconvenient."[62] It is a concept in private
international law and was devised to combat the "less than honorable" reasons and excuses that
litigants use to secure procedural advantages, annoy and harass defendants, avoid overcrowded
dockets, and select a "friendlier" venue.[63] Thus, the doctrine of forum non conveniens addresses the
same rationale that the rule against forum shopping does, albeit on a multijurisdictional scale.

Forum non conveniens, like res judicata,[64] is a concept originating in common law.[65] However, unlike
the rule on res judicata, as well as those on litis pendentia and forum shopping, forum non
conveniens finds no textual anchor, whether in statute or in procedural rules, in our civil law system.
Nevertheless, jurisprudence has applied forum non conveniens as basis for a court to decline its
exercise of jurisdiction.[66]

Forum non conveniens is soundly applied not only to address parallel litigation and undermine a
litigant's capacity to vex and secure undue advantages by engaging in forum shopping on an
international scale. It is also grounded on principles of comity and judicial efficiency.

Consistent with the principle of comity, a tribunal's desistance in exercising jurisdiction on account
of forum non conveniens is a deferential gesture to the tribunals of another sovereign. It is a measure
that prevents the former's having to interfere in affairs which are better and more competently
addressed by the latter. Further, forum non conveniens entails a recognition not only that tribunals
elsewhere are better suited to rule on and resolve a controversy, but also, that these tribunals are better
positioned to enforce judgments and, ultimately, to dispense justice. Forum non conveniens prevents
the embarrassment of an awkward situation where a tribunal is rendered incompetent in the face of the
greater capability — both analytical and practical — of a tribunal in another jurisdiction.

The wisdom of avoiding conflicting and unenforceable judgments is as much a matter of efficiency and
economy as it is a matter of international courtesy. A court would effectively be neutering itself if it
insists on adjudicating a controversy when it knows full well that it is in no position to enforce its
judgment. Doing so is not only an exercise in futility; it is an act of frivolity. It clogs the dockets of
a.tribunal and leaves it to waste its efforts on affairs, which, given transnational exigencies, will be
reduced to mere academic, if not trivial, exercises.

Accordingly, under the doctrine of forum non conveniens, "a court, in conflicts of law cases, may refuse
impositions on its jurisdiction where it is not the most 'convenient' or available forum and the parties are
not precluded from seeking remedies elsewhere."[67] In Puyat v. Zabarte,[68] this court recognized the
following situations as among those that may warrant a court's desistance from exercising jurisdiction:
 The belief that the matter can be better tried and decided elsewhere, either because the main
1) aspects of the case transpired in a foreign jurisdiction or the material witnesses have their
residence there;
The belief that the non-resident plaintiff sought the forum[,] a practice known as forum shopping[,]
2)
merely to secure procedural advantages or to convey or harass the defendant;
The unwillingness to extend local judicial facilities to non residents or aliens when the docket may
3)
already be overcrowded;
The inadequacy of the local judicial machinery for effectuating the right sought to be maintained;
4)
and
5) The difficulty of ascertaining foreign law.[69]
In Bank of America, NT&SA, Bank of America International, Ltd. v. Court of Appeals,[70] this court
underscored that a Philippine court may properly assume jurisdiction over a case if it chooses to do so
to the extent: "(1) that the Philippine Court is one to which the parties may conveniently resort to; (2)
that the Philippine Court is in a position to make an intelligent decision as to the law and the facts; and
(3) that the Philippine Court has or is likely to have power to enforce its decision." [71]

The use of the word "may" (i.e., "may refuse impositions on its jurisdiction"[72]) in the decisions shows
that the matter of jurisdiction rests on the sound discretion of a court. Neither the mere invocation
of forum non conveniens nor the averment of foreign elements operates to automatically divest a court
of jurisdiction. Rather, a court should renounce jurisdiction only "after 'vital facts are established, to
determine whether special circumstances' require the court's desistance."[73] As the propriety of
applying forum non conveniens is contingent on a factual determination, it is, therefore, a matter of
defense.[74]

The second sentence of Rule 9, Section 1 of the 1997 Rules of Civil Procedure is exclusive in its recital
of the grounds for dismissal that are exempt from the omnibus motion rule: (1) lack of jurisdiction over
the subject matter; (2) litis pendentia; (3) res judicata; and (4) prescription. Moreover, dismissal on
account offorum non conveniens is a fundamentally discretionary matter. It is, therefore, not a matter
for a defendant to foist upon the court at his or her own convenience; rather, it must be pleaded at the
earliest possible opportunity.

On the matter of pleading forum non conveniens, we state the rule, thus: Forum non conveniens must
not only be clearly pleaded as a ground for dismissal; it must be pleaded as such at the earliest possible
opportunity. Otherwise, it shall be deemed waived.

This court notes that in Hasegawa,[76] this court stated that forum non conveniens is not a ground for a
motion to dismiss. The factual ambience of this case however does not squarely raise the viability of
this doctrine. Until the opportunity comes to review the use of motions to dismiss for parallel
litigation, Hasegawa remains existing doctrine.

Consistent with forum non conveniens as fundamentally a factual matter, it is imperative that it proceed
from & factually established basis. It would be improper to dismiss an action pursuant to forum non
conveniens based merely on a perceived, likely, or hypothetical multiplicity of fora. Thus, a defendant
must also plead and show that a prior suit has, in fact, been brought in another jurisdiction.

The existence of a prior suit makes real the vexation engendered by duplicitous litigation, the
embarrassment of intruding into the affairs of another sovereign, and the squandering of judicial efforts
in resolving a dispute already lodged and better resolved elsewhere. As has been noted:

A case will not be stayed o dismissed on [forum] non conveniens grounds unless the plaintiff is shown
to have an available alternative forum elsewhere. On this, the moving party bears the burden of proof.
A number of factors affect the assessment of an alternative forum's adequacy. The statute of limitations
abroad may have run, of the foreign court may lack either subject matter or personal jurisdiction over
the defendant. . . . Occasionally, doubts will be raised as to the integrity or impartiality of the foreign
court (based, for example, on suspicions of corruption or bias in favor of local nationals), as to the
fairness of its judicial procedures, or as to is operational efficiency (due, for example, to lack of
resources, congestion and delay, or interfering circumstances such as a civil unrest). In one noted case,
[it was found] that delays of 'up to a quarter of a century' rendered the foreign forum... inadequate for
these purposes.[77]
We deem it more appropriate and in the greater interest of prudence that a defendant not only allege
supposed dangerous tendencies in litigating in this jurisdiction; the defendant must also show that such
danger is real and present in that litigation or dispute resolution has commenced in another
jurisdiction and that a foreign tribunal has chosen to exercise jurisdiction.

III

Forum non conveniens finds no application and does not operate to divest Philippine tribunals of
jurisdiction and to require the application of foreign law.

Saudia invokes forum non conveniens to supposedly effectuate the stipulations of the Cabin Attendant
contracts that require the application of the laws of Saudi Arabia.

Forum non conveniens relates to forum, not to the choice of governing law. Thai forum non
conveniens may ultimately result in the application of foreign law is merely an incident of its application.
In this strict sense, forum non conveniens is not applicable. It is not the primarily pivotal consideration
in this case.

In any case, even a further consideration of the applicability of forum non conveniens on the incidental
matter of the law governing respondents' relation with Saudia leads to the conclusion that it is improper
for Philippine tribunals to divest themselves of jurisdiction.

Any evaluation of the propriety of contracting parties' choice of a forum and'its incidents must grapple
with two (2) considerations: first, the availability and adequacy of recourse to a foreign tribunal; and
second, the question of where, as between the forum court and a foreign court, the balance of interests
inhering in a dispute weighs more heavily.

The first is a pragmatic matter. It relates to the viability of ceding jurisdiction to a foreign tribunal and
can be resolved by juxtaposing the competencies and practical circumstances of the tribunals in
alternative fora. Exigencies, like the statute of limitations, capacity to enforce orders and judgments,
access to records, requirements for the acquisition of jurisdiction, and even questions relating to the
integrity of foreign courts, may render undesirable or even totally unfeasible recourse to a foreign court.
As mentioned, we consider it in the greater interest of prudence that a defendant show, in
pleading forum non conveniens, that litigation has commenced in another jurisdiction and that a foieign
tribunal has, in fact, chosen to exercise jurisdiction.

Two (2) factors weigh into a court's appraisal of the balance of interests inhering in a dispute: first, the
vinculum which the parties and their relation have to a given jurisdiction; and second, the public interest
that must animate a tribunal, in its capacity as an agent of the sovereign, in choosing to assume or
decline jurisdiction. The first is more concerned with the parties, their personal circumstances, and
private interests; the second concerns itself with the state and the greater social order.
In considering the vinculum, a court must look into the preponderance of linkages which the parties and
their transaction may have to either jurisdiction. In this respect, factors, such as the parties' respective
nationalities and places of negotiation, execution, performance, engagement or deployment, come into
play.

In considering public interest, a court proceeds with a consciousness that it is an organ of the state. It
must, thus, determine if the interests of the sovereign (which acts through it) are outweighed by those
of the alternative jurisdiction. In this respect, the court delves into a consideration of public policy.
Should it find that public interest weighs more heavily in favor of its assumption of jurisdiction, it should
proceed in adjudicating the dispute, any doubt or .contrary view arising from the preponderance of
linkages notwithstanding.

Our law on contracts recognizes the validity of contractual choice of law provisions. Where such
provisions exist, Philippine tribunals, acting as the forum court, generally defer to the parties' articulated
choice.

This is consistent with the fundamental principle of autonomy of contracts. Article 1306 of the Civ:l Code
expressly provides that "[t]he contracting parties may establish 'such stipulations, clauses, terms and
conditions as they may deem convenient."[78] Nevertheless, while a Philippine tribunal (acting as the
forum court) is called upon to respect the parties' choice of governing law, such respect must not be so
permissive as to lose sight of considerations of law, morals, good customs, public order, or public policy
that underlie the contract central to the controversy.

Specifically with respect to public policy, in Pakistan International Airlines Corporation v. Ople,[79] this
court explained that:

counter-balancing the principle of autonomy of contracting parties is the equally general rule that
provisions of applicable law, especially provisions relating to matters affected with public policy, are
deemed written inta the contract. Put a little differently, the governing principle is that parties may not
contract away applicable provisions of law especially peremptory provisions dealing with matters
heavily impressed with public interest.[80] (Emphasis supplied)
Article II, Section 14 of the 1987 Constitution provides that "[t]he State ... shall ensure the fundamental
equality before the law of women and men." Contrasted with Article II, Section 1 of the 1987
Constitution's statement that "[n]o person shall ... be denied the equal protection of the laws," Article II,
Section 14 exhorts the State to "ensure." This does not only mean that the Philippines shall not
countenance nor lend legal recognition and approbation to measures that discriminate on the basis of
one's being male or female. It imposes an obligation to actively engage in securing the fundamental
equality of men and women.

The Convention on the Elimination of all Forms of Discrimination against Women (CEDAW), signed
and ratified by the Philippines on July 15, 1980, and on August 5, 1981, respectively, [81] is part of the
law of the land. In view of the widespread signing and ratification of, as well as adherence (in practice)
to it by states, it may even be said that many provisions of the CEDAW may have become customary
international law. The CEDAW gives effect to the Constitution's policy statement in Article II, Section
14. Article I of the CEDAW defines "discrimination against women" as:

any distinction, exclusion or restriction made on the basis of sex which has the effect or purpose of
impairing or nullifying the recognition, enjoyment or exercise by women, irrespective of their marital
status, on a basis of equality of men and women, of human rights and fundamental freedoms in the
political, economic, social, cultural, civil or any other field. [82]
The constitutional exhortation to ensure fundamental equality, as illumined by its enabling law, the
CEDAW, must inform and animate all the actions of all personalities acting on behalf of the State. It is,
therefore, the bounden duty of this court, in rendering judgment on the disputes brought before it, to
ensure that no discrimination is heaped upon women on the mere basis of their being women. This is
a point so basic and central that all our discussions and pronouncements — regardless of whatever
averments there may be of foreign law — must proceed from this premise.

So informed and animated, we emphasize the glaringly discriminatory nature of Saudia's policy. As
argued by respondents, Saudia's policy entails the termination of employment of flight attendants who
become pregnant. At the risk of stating the obvious, pregnancy is an occurrence that pertains
specifically to women. Saudia's policy excludes from and restricts employment on the basis of no other
consideration but sex.

We do not lose sight of the reality that pregnancy does present physical limitations that may render
difficult the performance of functions associated with being a flight attendant. Nevertheless, it would be
the height of iniquity to view pregnancy as a disability so permanent and immutable that, it must entail
the termination of one's employment. It is clear to us that any individual, regardless of gender, may be
subject to exigencies that limit the performance of functions. However, we fail to appreciate how
pregnancy could be such an impairing occurrence that it leaves no other recourse but the complete
termination of the means through which a woman earns a living.

Apart from the constitutional policy on the fundamental equality before the law of men and women, it is
settled that contracts relating to labor and employment are impressed with public interest. Article 1700
of the Civil Code provides that "[t]he relation between capital and labor are not merely contractual. They
are so impressed with public interest that labor contracts must yield to the common good."

Consistent with this, this court's pronouncements in Pakistan International Airlines Corporation[83] are
clear and unmistakable:

Petitioner PIA cannot take refuge in paragraph 10 of its employment agreement which specifies, firstly,
the law of Pakistan as the applicable law of the agreement, and, secondly, lays the venue for settlement
of any dispute arising out of or in connection with the agreement "only [in] courts of Karachi, Pakistan".
The first clause of paragraph 10 cannot be invoked to prevent the application of Philippine labor laws
and'regulations to the subject matter of this case, i.e., the employer-employee relationship between
petitioner PIA and private respondents. We have already pointed out that the relationship is much
affected with public interest and that the otherwise applicable Philippine laws and regulations cannot
be rendered illusory by the parties agreeing upon some other law to govern their relationship. . . . Under
these circumstances, paragraph 10 of the employment agreement cannot be given effect so as to oust
Philippine agencies and courts of the jurisdiction vested upon them by Philippine law. [84] (Emphasis
supplied)
As the present dispute relates to (what the respondents allege to be) the illegal termination of
respondents' employment, this case is immutably a matter of public interest and public policy.
Consistent with clear pronouncements in law and jurisprudence, Philippine laws properly find
application in and govern this case. 'Moreover, as this premise for Saudia's insistence on the
application forum non conveniens has been shattered, it follows that Philippine tribunals may properly
assume jurisdiction over the present controversy. Philippine jurisprudence provides ample illustrations
of when a court's renunciation of jurisdiction on account of forum non conveniens is proper or improper.'

In Philsec Investment Corporation v. Court of Appeals,[85] this court noted that the trial court failed to
consider that one of the plaintiffs was a domestic corporation, that one of the defendants was a Filipino,
and that it was the extinguishment of the latter's debt that was the object of the transaction subject of
the litigation. Thus, this court held, among others, that the trial court's refusal to assume jurisdiction
was not justified by forum non conveniens and remanded the case to the trial court.

In Raytheon International, Inc. v. Rouzie, Jr.,[86] this court sustained the trial court's assumption of
jurisdiction considering that the trial court could properly enforce judgment on the petitioner which was
a foreign corporation licensed to do business in the Philippines.

In Pioneer International, Ltd. v. Guadiz, Jr.,[87] this court found no reason to disturb the trial court's
assumption of jurisdiction over a case in which, as noted by the trial court, "it is more convenient to
hear and decide the case in the Philippines because Todaro [the plaintiff] resides in the Philippines and
the contract allegedly breached involve[d] employment in the Philippines." [88]

In Pacific Consultants International Asia, Inc. v. Schonfeld,[89] this court held that the fact that the
complainant in an illegal dismissal case was a Canadian citizen and a repatriate did not warrant the
application of forum non conveniens considering that: (1) the Labor Code does not include forum non
conveniens as a ground for the dismissal of a complaint for illegal dismissal; (2) the propriety of
dismissing a case based on forum non conveniens requires a factual determination; and (3) the
requisites for assumption of jurisdiction as laid out in Bank of America, NT&SA[90] were all satisfied.

In contrast, this court ruled in The Manila Hotel Corp. v. National Labor Relations Commission[91] that
the National Labor Relations Q Commission was a seriously inconvenient forum. In that case, private
respondent Marcelo G. Santos was working in the Sultanate of Oman when he received a letter from
Palace Hotel recruiting him for employment in Beijing, China. Santos accepted the offer. Subsequently,
however, he was released from employment supposedly due to business reverses arising from political
upheavals in China (i.e., the Tiananmen Square incidents of 1989). Santos later filed a Complaint for
illegal dismissal impleading Palace Hotel's General Manager, Mr. Gerhard Schmidt, the Manila Hotel
International Company Ltd. (which was, responsible for training Palace Hotel's personnel and staff),
and the Manila Hotel Corporation (which owned 50% of Manila Hotel International Company Ltd.'s
capital stock).

In ruling against the National Labor Relations Commission's exercise of jurisdiction, this court noted
that the main aspects of the case transpired in two (2) foreign jurisdictions, Oman and China, and that
the case involved purely foreign elements. Specifically, Santos was directly hired by a foreign employer
through correspondence sent to Oman. Also, the proper defendants were neither Philippine nationals
nor engaged in business in the Philippines, while the main witnesses were not residents of the
Philippines. Likewise, this court noted that the National Labor Relations Commission was in no position
to conduct the following: first, determine the law governing the employment contract, as it was entered
into in foreign soil; second, determine the facts, as Santos' employment was terminated in Beijing; and
third, enforce its judgment, since Santos' employer, Palace Hotel, was incorporated under the laws of
China and was not even served with summons.

Contrary to Manila Hotel, the case now before us does not entail a preponderance of linkages that favor
a foreign jurisdiction.

Here, the circumstances of the parties and their relation do not approximate the circumstances
enumerated in Puyat,[92] which this court recognized as possibly justifying the desistance of Philippine
tribunals from exercising jurisdiction.

First, there is no basis for concluding that the case can be more conveniently tried elsewhere. As
established earlier, Saudia is doing business in the Philippines. For their part, all four (4) respondents
are Filipino citizens maintaining residence in the Philippines and, apart from their previous employment
with Saudia, have no other connection to the Kingdom of Saudi Arabia. It would even be to respondents'
inconvenience if this case were to be tried elsewhere.

Second, the records are bereft of any indication that respondents filed their Complaint in an effort to
engage in forum shopping or to vex and inconvenience Saudia.

Third, there is no indication of "unwillingness to extend local judicial facilities to non-residents or

aliens."[93] That Saudia has managed to bring the present controversy all the way to this court proves
this.

Fourth, it cannot be said that the local judicial machinery is inadequate for effectuating the right sought
to be maintained. Summons was properly served on Saudia and jurisdiction over its person was validly
acquired.

Lastly, there is not even room for considering foreign law. Philippine law properly governs the present
dispute.

As the question of applicable law has been settled, the supposed difficulty of ascertaining foreign law
(which requires the application of forum non conveniens) provides no insurmountable inconvenience
or special circumstance that will justify depriving Philippine tribunals of jurisdiction.

Even if we were to assume, for the sake of discussion, that it is the laws of Saudi Arabia which should
apply, it does not follow that Philippine tribunals should refrain from exercising jurisdiction. To. recall
our pronouncements in Puyat,[94] as well as in Bank of America, NT&SA,[95] it is not so much the mere
applicability of foreign law which calls into operation forum non conveniens. Rather, what justifies a
court's desistance from exercising jurisdiction is "[t]he difficulty of ascertaining foreign law"[96] or the
inability of a "Philippine Court to make an intelligent decision as to the law[.]" [97]

Consistent with lex loci intentionis, to the extent that it is proper and practicable (i.e., "to make an
intelligent decision"[98]), Philippine tribunals may apply the foreign law selected by the parties. In fact,
(albeit without meaning to make a pronouncement on the accuracy and reliability of respondents'
citation) in this case, respondents themselves have made averments as to the laws of Saudi Arabia. In
their Comment, respondents write:

Under the Labor Laws of Saudi Arabia and the Philippines[,] it is illegal and unlawful to terminate the
employment of any woman by virtue of pregnancy. The law in Saudi Arabia is even more harsh and
strict [sic] in that no employer can terminate the employment of a female worker or give her a warning
of the same while on Maternity Leave, the specific provision of Saudi Labor Laws on the matter is
hereto quoted as follows:

"An employer may not terminate the employment of a female worker or give her a warning of the same
while on maternity leave." (Article 155, Labor Law of the Kingdom of Saudi Arabia, Royal Decree No.
M/51.)[99]
All told, the considerations for assumption of jurisdiction by Philippine tribunals as outlined in Bank of
America, NT&SA[100] have been satisfied. First, all the parties are based in the Philippines and all the
material incidents transpired in this jurisdiction. Thus, the parties may conveniently seek relief from
Philippine tribunals. Second, Philippine tribunals are in a position to make an intelligent decision as to
the law and the facts. Third, Philippine tribunals are in a position to enforce their decisions. There is no
compelling basis for ceding jurisdiction to a foreign tribunal. Quite the contrary, the immense public
policy considerations attendant to this case behoove Philippine tribunals to not shy away from their duty
to rule on the case.
IV

Respondents were illegally terminated.

In Bilbao v. Saudi Arabian Airlines,[101] this court defined voluntary resignation as "the voluntary act of
an employee who is in a situation where one believes that personal reasons cannot be sacrificed in
favor of the exigency of the service, and one has no other choice but to dissociate oneself from
employment. It is a formal pronouncement or relinquishment of an office, with the intention of
relinquishing the office accompanied by the act of relinquishment." [102] Thus, essential to the act of
resignation is voluntariness. It must be the result of an employee's exercise of his or her own will.

In the same case of Bilbao, this court advanced a means for determining whether an employee
resigned voluntarily:

As the intent to relinquish must concur with the overt act of relinquishment, the acts of the employee
before and after the alleged resignation must be considered in determining whether he or she, in fact,
intended, to sever his or her employment.[103] (Emphasis supplied)
On the other hand, constructive dismissal has been defined as "cessation of work because 'continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in
rank or a diminution in pay' and other benefits."[104]

In Penaflor v. Outdoor Clothing Manufacturing Corporation,[105] constructive dismissal has been

described as tantamount to "involuntarily [sic] resignation due to the harsh, hostile, and unfavorable
conditions set by the employer." [106] In the same case, it was noted that "[t]he gauge for constructive
dismissal is whether a reasonable person in the employee's position would feel compelled to give up
his employment under the prevailing circumstances." [107]

Applying the cited standards on resignation and constructive dismissal, it is clear that respondents
were constructively dismissed. Hence, their termination was illegal.

The termination of respondents' employment happened when they were pregnant and expecting to
incur costs on account of child delivery and infant rearing. As noted by the Court of Appeals,
pregnancy is a time when they need employment to sustain their families. [108] Indeed, it goes against
normal and reasonable human behavior to abandon one's livelihood in a time of great financial need.

It is clear that respondents intended to remain employed with Saudia. All they did was avail of their
maternity leaves. Evidently, the very nature of a maternity leave means that a pregnant employee will
not report for work only temporarily and that she will resume the performance of her duties as soon as
the leave allowance expires.

It is also clear that respondents exerted all efforts to' remain employed with Saudia. Each of them
repeatedly filed appeal letters (as much as five [5] letters in the case of Rebesencio[109]) asking
Saudia to reconsider the ultimatum that they resign or be terminated along with the forfeiture of their
benefits. Some of them even went to Saudia's office to personally seek reconsideration. [110]

Respondents also adduced a copy of the "Unified Employment Contract for Female Cabin
Attendants."[111] This contract deemed void the employment of a flight attendant who becomes
pregnant and threatened termination due to lack of medical fitness. [112] The threat of termination (and
the forfeiture of benefits that it entailed) is enough to compel a reasonable person in respondents'
position to give up his or her employment.

Saudia draws attention to how respondents' resignation letters were supposedly made in their own
handwriting. This minutia fails to surmount all the other indications negating any voluntariness on
respondents' part. If at all, these same resignation letters are proof of how any supposed resignation
did not arise from respondents' own initiative. As earlier pointed out, respondents' resignations were
executed on Saudia's blank letterheads that Saudia had provided. These letterheads already had the
word "RESIGNATION" typed on the subject portion of their respective headings when these were
handed to respondents.[113]

"In termination cases, the burden of proving just or valid cause for dismissing an employee rests on
the employer."[114] In this case, Saudia makes much of how respondents supposedly completed their
exit interviews, executed quitclaims, received their separation pay, and took more than a year to file
their Complaint.[115] If at all, however, these circumstances prove only the fact of their occurrence,
nothing more. The voluntariness of respondents' departure from Saudia is non sequitur.

Mere compliance with standard procedures or processes, such as the completion of their exit
interviews, neither negates compulsion nor indicates voluntariness.

As with respondent's resignation letters, their exit interview forms even support their claim of illegal
dismissal and militates against Saudia's arguments. These exit interview forms, as reproduced by
Saudia in its own Petition, confirms the unfavorable conditions as regards respondents' maternity
leaves. Ma. Jopette's and Loraine's exit interview forms are particularly telling:

a. From Ma. Jopette's exit interview form:

3. In what respects has the job met or failed to meet your expectations?

THE SUDDEN TWIST OF DECISION REGARDING THE MATERNITY LEAVE. [116]

b. From Loraine's exit interview form:

1. What are your main reasons for leaving Saudia? What company are you joining?

xxx xxx xxx

Others

CHANGING POLICIES REGARDING MATERNITY LEAVE (PREGNANCY)[117]

As to respondents' quitclaims, in Phil. Employ Services and Resources, Inc. v. Paramio,[118] this court
noted that "[i]f (a) there is clear proof that the waiver was wangled from an unsuspecting or gullible
person; or (b) the terms of the settlement are unconscionable, and on their face invalid, such
quitclaims must be struck down as invalid or illegal."[119] Respondents executed their quitclaims after
having been unfairly given an ultimatum to resign or be terminated (and forfeit their benefits).

Having been illegally and unjustly dismissed, respondents are entitled to full backwages and benefits
from the time of their termination until the finality of this Decision. They are likewise entitled to
separation pay in the amount of one (1) month's salary for every year of service until the fmality of this
Decision, with a fraction of a year of at least six (6) months being counted as one (1) whole year.

Moreover, "[m]oral damages are awarded in termination cases where the employee's dismissal was
attended by bad faith, malice or fraud, or where it constitutes an act oppressive to labor, or where it
was done in a manner contrary to morals, good customs or public policy." [120] In this case, Saudia
terminated respondents' employment in a manner that is patently discriminatory and running afoul of
the public interest that underlies employer-employee relationships. As such, respondents are entitled
to moral damages.

To provide an "example or correction for the public good"[121] as against such discriminatory and callous
schemes, respondents are likewise entitled to exemplary damages.

In a long line of cases, this court awarded exemplary damages to illegally dismissed employees whose
"dismissal[s were] effected in a wanton, oppressive or malevolent manner."[122] This court has awarded
exemplary damages to employees who were terminated on such frivolous, arbitrary, and unjust grounds
as membership in or involvement with labor unions,[123] injuries sustained in the course of
employment,[124] development of a medical condition due to the employer's own violation of the
employment contract,[125] and lodging of a Complaint against the employer. [126] Exemplary damages
were also awarded to employees who were deemed illegally dismissed by an employer in an attempt
to evade compliance with statutorily established employee benefits. [127] Likewise, employees dismissed
for supposedly just causes, but in violation of due process requirements, were awarded exemplary
damages.[128]

These examples pale in comparison to the present controversy. Stripped of all unnecessary
complexities, respondents were dismissed for no other reason than simply that they were pregnant.
This is as wanton, oppressive, and tainted with bad faith as any reason for termination of employment
can be. This is no ordinary case of illegal dismissal. This is a case of manifest gender discrimination. It
is an affront not only to our statutes and policies on employees' security of tenure, but more so, to the
Constitution's dictum of fundamental equality between men and women. [129]

The award of exemplary damages is, therefore, warranted, not only to remind employers of the need
to adhere to the requirements of procedural and substantive due process in termination of employment,
but more importantly, to demonstrate that gender discrimination should in no case be countenanced.

Having been compelled to litigate to seek reliefs for their illegal and unjust dismissal, respondents are
likewise entitled to attorney's fees in the amount of 10% of the total monetary award. [130]

VI

Petitioner Brenda J. Betia may not be held liable.

A corporation has a personality separate and distinct from those of the persons composing it. Thus, as
a rule, corporate directors and officers are not liable for the illegal termination of a corporation's
employees. It is only when they acted in bad faith or with malice that they become solidarity liable with
the corporation.[131]

In Ever Electrical Manufacturing, Inc. (EEMI) v. Samahang Manggagawa ng Ever Electrical,[132] this
court clarified that "[b]ad faith does not connote bad judgment or negligence; it imports a dishonest
purpose or some moral obliquity and conscious doing of wrong; it means breach of a known duty
through some motive or interest or ill will; it partakes of the nature of fraud."[133]
Respondents have not produced proof to show that Brenda J. Betia acted in bad faith or with malice as
regards their termination. Thus, she may not be held solidarity liable with Saudia.

WHEREFORE, with the MODIFICATIONS that first, petitioner Brenda J. Betia is not solidarity liable
with petitioner Saudi Arabian Airlines, and second, that petitioner Saudi Arabian Airlines is liable for
moral and exemplary damages. The June 16, 2011 Decision and the September 13, 2011 Resolution
of the Court of Appeals in CA-G.R. SP. No. 113006 are hereby AFFIRMED in all other respects.
Accordingly, petitioner Saudi Arabian Airlines is ordered to pay respondents:

Full backwages and all other benefits computed from the respective dates in which each of the
(1)
respondents were illegally terminated until the finality of this Decision;
Separation pay computed from the respective dates in which each of the respondents commenced
(2) employment until the finality of this Decision at the rate of one (1) month's salary for every year of
service, with a fraction of a year of at least six (6) months being counted as one (1) whole year;
(3) Moral damages in the amount of P100,000.00 per respondent;
(4) Exemplary damages in the amount of P200,000.00 per respondent; and
(5) Attorney's fees equivalent to 10% of the total award.

Interest of 6% per annum shall likewise be imposed on the total judgment award from the finality of this
Decision until full satisfaction thereof.

This case is REMANDED to the Labor Arbiter to make a detailed computation of the amounts due to
respondents which petitioner Saudi Arabian Airlines should pay without delay.

SO ORDERED.

Article 18: Suppletory nature of the Civil Code

PART TWO: HUMAN RELATIONS
Article 19-21: Abuse of Rights – Contra Bonus Mores
BARONS MARKETING CORP., vs. COURT OF APPEALS and PHELPS DODGE PHILS., INC. G.R.
No. 126486; February 9, 1998

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 126486 February 9, 1998

BARONS MARKETING CORP., petitioner,

vs.
COURT OF APPEALS and PHELPS DODGE PHILS., INC. respondents.

KAPUNAN, J.:

The instant petition raises two issues: (1) whether or not private respondent is guilty of abuse of right;
and (2) whether or not private respondent is entitled to interest and attorney's fees.

The facts are undisputed:

On August 31, 1973, plaintiff [Phelps Dodge, Philippines, Inc. private respondent herein]
appointed defendant [petitioner Barons Marketing, Corporation] as one of its dealers of electrical
wires and cables effective September 1, 1973 (Exh. A). As such dealer, defendant was given by
plaintiff 60 days credit for its purchases of plaintiff's electrical products. This credit term was to
be reckoned from the date of delivery by plaintiff of its products to defendant (Exh. 1).

During the period covering December 1986 to August 17, 1987, defendant purchased, on credit,
from plaintiff various electrical wires and cables in the total amount of P4,102,438.30 (Exh. B to
K). These wires and cables were in turn sold, pursuant to previous arrangements, by defendant
to MERALCO, the former being the accredited supplier of the electrical requirements of the latter.
Under the sales invoices issued by plaintiff to defendant for the subject purchases, it is stipulated
that interest at 12% on the amount due for attorney's fees and collection (Exh. BB). 1 On
September 7, 1987, defendant paid plaintiff the amount of P300,000.00 out of its total purchases
as above-stated (Exh. S), thereby leaving an unpaid account on the aforesaid deliveries of
P3,802,478.20. On several occasions, plaintiff wrote defendant demanding payment of its
outstanding obligations due plaintiff (Exhs. L, M, N, and P). In response, defendant wrote plaintiff
on October 5, 1987 requesting the latter if it could pay its outstanding account in monthly
installments of P500,000.00 plus 1% interest per month commencing on October 15, 1987 until
full payment (Exh. O and O-4). Plaintiff, however, rejected defendant's offer and accordingly
reiterated its demand for the full payment of defendant's account (Exh. P). 2
On 29 October 1987, private respondent Phelps Dodge Phils., Inc. filed a complaint before the Pasig
Regional Trial Court against petitioner Barons Marketing Corporation for the recovery of P3,802,478.20
representing the value of the wires and cables the former had delivered to the latter, including interest.
Phelps Dodge likewise prayed that it be awarded attorney's fees at the rate of 25% of the amount
demanded, exemplary damages amounting to at least P100,000.00, the expenses of litigation and the
costs of suit.

Petitioner, in its answer, admitted purchasing the wires and cables from private respondent but disputed
the amount claimed by the latter. Petitioner likewise interposed a counterclaim against private
respondent, alleging that it suffered injury to its reputation due to Phelps Dodge's acts. Such acts were
purportedly calculated to humiliate petitioner and constituted an abuse of rights.

After hearing, the trial court on 17 June 1991 rendered its decision, the dispositive portion of which
reads:

WHEREFORE, from all the foregoing considerations, the Court finds Phelps Dodge Phils., Inc.
to have preponderantly proven its case and hereby orders Barons Marketing, Inc. to pay Phelps
Dodge the following:

1. P3,108,000.00 constituting the unpaid balance of defendant's purchases from plaintiff and
interest thereon at 12% per annum computed from the respective expiration of the 60 day credit
term, vis-a-vis the various sales invoices and/or delivery receipts;

2. 25% of the preceding obligation for and as attorney's fees;

3. P10,000.00 as exemplary damages;

4. Costs of suit.3

Both parties appealed to respondent court. Private respondent claimed that the trial court should have
awarded it the sum of P3,802,478.20, the amount which appeared in the body of the complaint and
proven during the trial rather than P3,1081000.00 The latter amount appears in petitioner's prayer
supposedly as a result of a typographical error.

On the other hand, petitioner reiterated its claims for damages as a result of "creditor's abuse." It also
alleged that private respondent failed to prove its cause of action against it.

On 25 June 1996, the Court of Appeals rendered a decision modifying the decision of the trial court,
thus:

WHEREFORE, from all the foregoing considerations, the Court finds Phelps Dodge Phils., Inc.
to have preponderantly proven its case and hereby orders Barons Marketing, Inc. to pay Phelps
Dodge the following:

1. P3,802,478.20 constituting the unpaid balance of defendant's purchases from plaintiff and
interest thereon at 12% per annum computed from the respective expiration of the 60 day credit
term, vis-a-vis the various sales invoices and/or delivery receipts; and

2. 5% of the preceding obligation for and as attorney's fees.

No costs.4
Petitioner Barons Marketing is now before this Court alleging that respondent court erred when it held
(1) private respondent Phelps Dodge not guilty of "creditor's abuse," and (2) petitioner liable to private
respondent for interest and attorney's fees.

Petitioner does not deny private respondent's rights to institute an action for collection and to claim full
payment. Indeed, petitioner's right to file an action for collection is beyond cavil. 5 Likewise, private
respondent's right to reject petitioner's offer to pay in installments is guaranteed by Article 1248 of the
Civil Code which states:

Art. 1248. Unless there is an express stipulation to that effect, the creditor cannot be compelled
partially to receive the prestations in which the obligation consists. Neither may the debtor be
required to make partial payments.

However, when the debt is in part liquidated and in part unliquidated, the creditor may demand
and the debtor may effect the payment of the former without waiting for the liquidation of the
latter.

Under this provision, the prestation, i.e., the object of the obligation, must be performed in one act, not
in parts.

Tolentino concedes that the right has its limitations:

Partial Prestations. — Since the creditor cannot be compelled to accept partial performance,
unless otherwise stipulated, the creditor who refuses to accept partial prestations does not incur
in delay or mora accipiendi, except when there is abuse of right or if good faith requires
acceptance.6

Indeed, the law, as set forth in Article 19 of the Civil Code, prescribes a "primordial limitation on all
rights" by setting certain standards that must be observed in the exercise thereof. 7 Thus:

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.

Petitioner now invokes Article 19 and Article 218 of the Civil Code, claiming that private respondent
abused its rights when it rejected petitioner's offer of settlement and subsequently filed the action for
collection considering:

. . . that the relationship between the parties started in 1973 spanning more than 13 years before
the complaint was filed, that the petitioner had been a good and reliable dealer enjoying a good
credit standing during the period before it became delinquent in 1987, that the relationship
between the parties had been a fruitful one especially for the private respondent, that the
petitioner exerted its outmost efforts to settle its obligations and avoid a suit, that the petitioner
did not evade in the payment of its obligation to the private respondent, and that the petitioner
was just asking a small concession that it be allowed to liquidate its obligation to eight (8) monthly
installments of P500,000.00 plus 1% interest per month on the balance which proposal was
supported by post-dated checks.9

Expounding on its theory, petitioner states:

 In the ordinary course of events, a suit for collection of a sum of money filed in court is done for
the primary purpose of collecting a debt or obligation. If there is an offer by the debtor to pay its
debt or obligation supported by post-dated checks and with provision for interests, the normal
response of a creditor would be to accept the offer of compromise and not file the suit for
collection. It is of common knowledge that proceedings in our courts would normally take years
before an action is finally settled. It is always wiser and more prudent to accept an offer of
payment in installment rather than file an action in court to compel the debtor to settle his
obligation in full in a single payment.

xxx xxx xxx

. . . Why then did private respondent elect to file a suit for collection rather than accept petitioner's
offer of settlement, supported by post-dated checks, by paying monthly installments of
P500,000.00 plus 1% per month commencing on October 15, 1987 until full payment? The
answer is obvious. The action of private respondent in filling a suit for collection was an abuse
of right and exercised for the sole purpose of prejudicing and injuring the petitioner. 10

Petitioner prays that the Court order private respondent to pay petitioner moral and exemplary
damages, attorney's fees, as well as the costs of suit. It likewise asks that it be allowed to liquidate its
obligation to private respondent, without interests, in eight equal monthly installments.

Petitioner's theory is untenable.

Both parties agree that to constitute an abuse of rights under Article 19 the defendant must act with
bad faith or intent to prejudice the plaintiff. They cite the following comments of Tolentino as their
authority:

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. Hence, every abnormal
exercise of a right, contrary to its socio-economic purpose, is an abuse that will give rise to
liability. 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 injure
another. Ultimately, however, and in practice, courts, in the sound exercise of their discretion,
will have to determine all the facts and circumstances when the exercise of a right is unjust, or
when there has been an abuse of right.11

The question, therefore, is whether private respondent intended to prejudice or injure petitioner when
it rejected petitioner's offer and filed the action for collection.

We hold in the negative. It is an elementary rule in this jurisdiction that good faith is presumed and that
the burden of proving bad faith rests upon the party alleging the same. 12 In the case at bar, petitioner
has failed to prove bad faith on the part of private respondent. Petitioner's allegation that private
respondent was motivated by a desire to terminate its agency relationship with petitioner so that private
respondent itself may deal directly with Meralco is simply not supported by the evidence. At most, such
supposition is merely speculative.

Moreover, we find that private respondent was driven by very legitimate reasons for rejecting
petitioner's offer and instituting the action for collection before the trial court. As pointed out by private
respondent, the corporation had its own "cash position to protect in order for it to pay its own
obligations." This is not such "a lame and poor rationalization" as petitioner purports it to be. For if
private respondent were to be required to accept petitioner's offer, there would be no reason for the
latter to reject similar offers from its other debtors. Clearly, this would be inimical to the interests of any
enterprise, especially a profit-oriented one like private respondent. It is plain to see that what we have
here is a mere exercise of rights, not an abuse thereof Under these circumstances, we do not deem
private respondent to have acted in a manner contrary to morals, good customs or public policy as to
violate the provisions of Article 21 of the Civil Code.

Consequently, petitioner's prayer for moral and exemplary damages must thus be rejected. Petitioner's
claim for moral damages is anchored on Article 2219 (10) of the Civil Code which states:

Art. 2219. Moral damages may be recovered in the following and analogous cases:

xxx xxx xxx

(10) Acts and actions referred to in articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

xxx xxx xxx

Having ruled that private respondent's acts did not transgress the provisions of Article 21, petitioner
cannot be entitled to moral damages or, for that matter, exemplary damages. While the amount of
exemplary damages need not be proved, petitioner 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.13 As we have observed above; petitioner has failed to discharge this
burden.

It may not be amiss to state that petitioner's contract with private respondent has the force of law
between them.14 Petitioner is thus bound to fulfill what has been expressly stipulated therein. 15 In the
absence of any abuse of right, private respondent cannot be allowed to perform its obligation under
such contract in parts. Otherwise, private respondent's right under Article 1248 will be negated, the
sanctity of its contract with petitioner defiled. The principle of autonomy of contracts16 must be
respected.

II

Under said contract, petitioner is liable to private respondent for the unpaid balance of its purchases
from private respondent plus 12% interest. Private respondent's sales invoices expressly provide that:

. . . Interest at 12% per annum will be charged on all overdue account plus 25% on said amount
for attorney's fees and collection. . . .17

It may also be noted that the above stipulation, insofar as it provides for the payment of "25% on said
amount for attorney's fees and collection (sic)," constitutes what is known as a penal clause.18 Petitioner
is thus obliged to pay such penalty in addition to the 12% annual interest, there being an express
stipulation to that effect.

Petitioner nevertheless urges this Court to reduce the attorney's fees for being "grossly excessive,"
"considering the nature of the case which is a mere action for collection of a sum of money." It may be
pointed out however that the above penalty is supposed to answer not only for attorney's fees but for
collection fees as well. Moreover:
 . . . the attorneys' fees here provided is not, strictly speaking, the attorneys' fees recoverable as
between attorney and client spoken of and regulated by the Rules of Court. Rather, the attorneys'
fees here are in the nature of liquidated damages and the stipulation therefor is aptly called a
penal clause. It has been said that so long as such stipulation does not contravene law, morals,
or public order, it is strictly binding upon defendant. The attorneys' fees so provided are awarded
in favor of the litigant, not his counsel. It is the litigant, not counsel, who is the judgment creditor
entitled to enforce the judgment by execution. 19

Nonetheless, courts are empowered to reduce such penalty if the same is "iniquitous or
unconscionable." Article 1229 of the Civil Code states thus:

Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been
partly or been irregularly complied with by the debtor. Even if there has no performance, the
penalty may also be reduced by the courts if it is iniquitous or unconscionable. (Emphasis
supplied.)

The sentiments of the law are echoed in Article 2227 of the same Code:

Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably
reduced if they are iniquitous or unconscionable.

It is true that we have upheld the reasonableness of penalties in the form of attorney's fees consisting
of twenty-five percent (25%) of the principal debt plus interest.20 In the case at bar, however, the interest
alone runs to some four and a half million pesos (P4.5M), even exceeding the principal debt amounting
to almost four million pesos (P4.0M). Twenty five percent (25%) of the principal and interest amounts
to roughly two million pesos (P2M). In real terms, therefore, the attorney's fees and collection fees are
manifestly exorbitant. Accordingly, we reduce the same to ten percent (10%) of the principal.

Private respondent, however, argues that petitioner failed to question the award of attorney's fees on
appeal before respondent court and raised the issue only in its motion for reconsideration.
Consequently, petitioner should be deemed to have waived its right to question such award.

Private respondent's attempts to dissuade us from reducing the penalty are futile. The Court is clothed
with ample authority to review matters, even if they are not assigned as errors in their appeal, if it finds
that their consideration is necessary in arriving at a just decision of the case. 21

WHEREFORE, the decision of the Court of Appeals is hereby MODIFIED in that the attorney's and
collection fees are reduced to ten percent (10%) of the principal but is AFFIRMED in all other respects.

SO ORDERED.
EULOGIO OCCENA vs HON. PEDRO M. ICAMINA G.R. No. 82146; January 22, 1990

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 82146 January 22, 1990

EULOGIO OCCENA, petitioner,

vs.
HON. PEDRO M. ICAMINA, Presiding Judge, Branch X of the Regional Trial Court Sixth
Judicial Region, San Jose, Antique; THE PEOPLE OF THE PHILIPPINES, represented by the
Honorable Provincial Fiscal of Antique; and CRISTINA VEGAFRIA, respondents.

Comelec Legal Assistance Office for petitioner.

Comelec Legal Assistance Officer for private respondent.

FERNAN, C.J.:

On May 31, 1979, herein petitioner Eulogio Occena instituted before the Second Municipal Circuit Trial
Court of Sibalom, San Remigio — Belison, Province of Antique, Criminal Case No. 1717, a criminal
complaint for Grave Oral Defamation against herein private respondent Cristina Vegafria for allegedly
openly, publicly and maliciously uttering the following insulting words and statements: "Gago ikaw nga
Barangay Captain, montisco, traidor, malugus, Hudas," which, freely translated, mean: "You are a
foolish Barangay Captain, ignoramus, traitor, tyrant, Judas" and other words and statements of similar
import which caused great and irreparable damage and injury to his person and honor.

Private respondent as accused therein entered a plea of not guilty. Trial thereafter ensued, at which
petitioner, without reserving his right to file a separate civil action for damages actively intervened thru
a private prosecutor.

After trial, private respondent was convicted of the offense of Slight Oral Defamation and was
sentenced to pay a fine of Fifty Pesos (P50.00) with subsidiary imprisonment in case of insolvency and
to pay the costs. No damages were awarded to petitioner in view of the trial court's opinion that "the
facts and circumstances of the case as adduced by the evidence do not warrant the awarding of moral
damages." 1

Disagreeing, petitioner sought relief from the Regional Trial Court, which in a decision dated March 16,
1987 disposed of petitioner's appeal as follows:

IN VIEW OF ALL THE FOREGOING, the civil aspect of the lower court's decision of April 20,
1981 subject of this appeal, for lack of merit, is hereby DENIED.

After the decision shall have become final, remand the records of this case to the court of origin,
Second Municipal Circuit Trial Court of Sibalom, San Remigio-Belison, Antique, for the execution
of its decision on the criminal aspect.
 SO ORDERED. 2

Petitioner is now before us by way of a petition for review on certiorari seeking to annul the RTC
decision for being contrary to Article 100 of the Revised Penal Code providing that every person
criminally liable for a felony is also civilly liable, and Article 2219 of the New Civil Code providing that
moral damages may be recovered in libel, slander or any other form of defamation. He submits that
public respondent RTC erred in relying on the cases of Roa vs. de la Cruz, 107 Phil. 10 and Tan
vs. Standard Vacuum Oil Co., et al., 91 Phil. 672 cited therein. He differentiates said cases from the
case at bar by saying that in the case of Roa, the decision of the trial court had become final before
Maria C. Roa instituted a civil action for damages; whereas in the instant case, the decision of the trial
court has not yet become final by reason of the timely appeal interposed by him and no civil action for
damages has been instituted by petitioner against private respondent for the same cause. Tan, on the
other hand, contemplates of two actions, one criminal and one civil, and the prosecution of the criminal
case had resulted in the acquittal of the accused, which is not the situation here where the civil aspect
was impliedly instituted with the criminal action in accordance with Section 1, Rule 111, of the Rules of
Court.

Private respondent for her part argues that the decision of the trial court carries with it the final
adjudication of her civil liability. Since petitioner chose to actively intervene in the criminal action without
reserving his right to file a separate civil action for damages, he assumed the risk that in the event he
failed to recover damages he cannot appeal from the decision of the lower court.

We find merit in the petition.

The issues confronting us in the instant petition is whether or not the decision of the Second Municipal
Trial Court of Sibalom, San-Remigio-Belison, Province of Antique constitutes the final adjudication on
the merits of private respondent's civil liability; and whether or not petitioner is entitled to an award of
damages arising from the remarks uttered by private respondent and found by the trial court to be
defamatory.

The decision of the Municipal Circuit Trial Court as affirmed by the Regional Trial Court in Criminal
Case No. 1709 cannot be considered as a final adjudication on the civil liability of private respondent
simply because said decision has not yet become final due to the timely appeal filed by petitioner with
respect to the civil liability of the accused in said case. It was only the unappealed criminal aspect of
the case which has become final.

In the case of People vs. Coloma, 105 Phil. 1287, we categorically stated that from a judgment
convicting the accused, two (2) appeals may, accordingly, be taken. The accused may seek a review
of said judgment, as regards both civil and criminal actions; while the complainant may appeal with
respect only to the civil action, either because the lower court has refused to award damages or
because the award made is unsatisfactory to him. The right of either to appeal or not to appeal in the
event of conviction of the accused is not dependent upon the other. Thus, private respondent's theory
that in actively intervening in the criminal action, petitioner waived his right to appeal from the decision
that may be rendered therein, is incorrect and inaccurate. Petitioner may, as he did, appeal from the
decision on the civil aspect which is deemed instituted with the criminal action and such appeal, timely
taken, prevents the decision on the civil liability from attaining finality.

We tackle the second issue by determining the basis of civil liability arising from crime. Civil obligations
arising from criminal offenses are governed by Article 100 of the Revised Penal Code which provides
that "(E)very person criminally liable for a felony is also civilly liable," in relation to Article 2177 of the
Civil Code on quasi-delict, the provisions for independent civil actions in the Chapter on Human
Relations and the provisions regulating damages, also found in the Civil Code.
Underlying the legal principle that a person who is criminally liable is also civilly liable is the view that
from the standpoint of its effects, a crime has dual character: (1) as an offense against the state because
of the disturbance of the social order; and (2) as an offense against the private person injured by the
crime unless it involves the crime of treason, rebellion, espionage, contempt and others wherein no
civil liability arises on the part of the offender either because there are no damages to be compensated
or there is no private person injured by the crime. 3

In the ultimate analysis, what gives rise to the civil liability is really the obligation of everyone to repair
or to make whole the damage caused to another by reason of his act or omission, whether done
intentional or negligently and whether or not punishable by law. 4

In the case at bar, private respondent was found guilty of slight oral defamation and sentenced to a fine
of P50.00 with subsidiary imprisonment in case of insolvency, but no civil liability arising from the
felonious act of the accused was adjudged. This is erroneous. As a general rule, a person who is found
to be criminally liable offends two (2) entities: the state or society in which he lives and the individual
member of the society or private person who was injured or damaged by the punishable act or omission.
The offense of which private respondent was found guilty is not one of those felonies where no civil
liability results because either there is no offended party or no damage was caused to a private person.
There is here an offended party, whose main contention precisely is that he suffered damages in view
of the defamatory words and statements uttered by private respondent, in the amount of Ten Thousand
Pesos (P10,000.00) as moral damages and the further sum of Ten Thousand Pesos (P10,000) as
exemplary damages.

Article 2219, par. (7) of the Civil Code allows the recovery of moral damages in case of libel, slander
or any other form of defamation This provision of law establishes the right of an offended party in a
case for oral defamation to recover from the guilty party damages for injury to his feelings and
reputation. The offended party is likewise allowed to recover punitive or exemplary damages.

It must be remembered that 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. And malice may be inferred from
the style and tone of publication 5 subject to certain exceptions which are not present in the case at bar.

Calling petitioner who was a barangay captain an ignoramus, traitor, tyrant and Judas is clearly an
imputation of defects in petitioner's character sufficient to cause him embarrassment and social
humiliation. Petitioner testified to the feelings of shame and anguish he suffered as a result of the
incident complained of. 6 It is patently error for the trial court to overlook this vital piece of evidence and
to conclude that the "facts and circumstances of the case as adduced by the evidence do not warrant
the awarding of moral damages." Having misapprehended the facts, the trial court's findings with
respect thereto is not conclusive upon us.

From the evidence presented, we rule that for the injury to his feelings and reputation, being a barangay
captain, petitioner is entitled to moral damages in the sum of P5,000.00 and a further sum of P5,000.00
as exemplary damages.

WHEREFORE, the petition is hereby GRANTED. The decision of the Regional Trial Court is hereby
MODIFIED and private respondent is ordered to pay petitioner the amount of P5,000.00 as moral
damages and another P5,000.00 as exemplary damages. Costs against private respondent.

SO ORDERED.
UNIVERSITY OF THE EAST vs. ROMEO A. JADER G.R. No. 132344; February 17, 2000

FIRST DIVISION

G.R. No. 132344 February 17, 2000

UNIVERSITY OF THE EAST, petitioner,

vs.
ROMEO A. JADER, respondent.

YNARES-SANTIAGO, J.:

May an educational institution be held liable for damages for misleading a student into believing that
the latter had satisfied all the requirements for graduation when such is not the case? This is the issue
in the instant petition for review premised on the following undisputed facts as summarized by the trial
court and adopted by the Court of Appeals (CA), 1 to wit:

Plaintiff was enrolled in the defendants' College of Law from 1984 up to 1988. In the first
semester of his last year (School year 1987-1988), he failed to take the regular final examination
in Practice Court I for which he was given an incomplete grade (Exhibits "2", also Exhibit "H").
He enrolled for the second semester as fourth year law student (Exhibit "A") and on February 1,
1988 he filed an application for the removal of the incomplete grade given him by Professor
Carlos Ortega (Exhibits "H-2", also Exhibit "2") which was approved by Dean Celedonio
Tiongson after payment of the required fee. He took the examination on March 28, 1988. On
May 30, 1988, Professor Carlos Ortega submitted his grade. It was a grade of five (5). (Exhibits
"H-4", also Exhibits "2-L", "2-N").1âwphi1.nêt

In the meantime, the Dean and the Faculty Members of the College of Law met to deliberate on
who among the fourth year students should be allowed to graduate. The plaintiff's name
appeared in the Tentative List of Candidates for graduation for the Degree of Bachelor of Laws
(LL.B) as of Second Semester (1987-1988) with the following annotation:

JADER ROMEO A.

Def. Conflict of Laws — x-1-87-88, Practice Court I Inc., 1-87-88 C-1 to submit transcript with
S.O. (Exhibits "3", "3-C-1", "3-C-2").

The 35th Investitures & Commencement Ceremonies for the candidates of Bachelor of Laws
was scheduled on the 16th of April 1988 at 3:00 o'clock in the afternoon, and in the invitation for
that occasion the name of the plaintiff appeared as one of the candidates. (Exhibits "B", "B-6",
"B-6-A"). At the foot of the list of the names of the candidates there appeared however the
following annotation:

This is a tentative list Degrees will be conferred upon these candidates who satisfactorily
complete requirements as stated in the University Bulletin and as approved of the
Department of Education, Culture and Sports (Exhibit "B-7-A").

The plaintiff attended the investiture ceremonies at F. dela Cruz Quadrangle, U.E., Recto
Campus, during the program of which he went up the stage when his name was called, escorted
by her (sic) mother and his eldest brother who assisted in placing the Hood, and his Tassel was
 turned from left to right, and he was thereafter handed by Dean Celedonio a rolled white sheet
of paper symbolical of the Law Diploma. His relatives took pictures of the occasion (Exhibits "C"
to "C-6", "D-3" to "D-11").

He tendered a blow-out that evening which was attended by neighbors, friends and relatives
who wished him good luck in the forthcoming bar examination. There were pictures taken too
during the blow-out (Exhibits "D" to "D-1").

He thereafter prepared himself for the bar examination. He took a leave of absence without pay
from his job from April 20, 1988 to September 30, 1988 (Exhibit "G") and enrolled at the pre-bar
review class in Far Eastern University. (Exhibits "F" to "F-2"). Having learned of the deficiency
he dropped his review class and was not able to take the bar examination. 2

Consequently, respondent sued petitioner for damages alleging that he suffered moral shock, mental
anguish, serious anxiety, besmirched reputation, wounded feelings and sleepless nights when he was
not able to take the 1988 bar examinations arising from the latter's negligence. He prayed for an award
of moral and exemplary damages, unrealized income, attorney's fees, and costs of suit.

In its answer with counterclaim, petitioner denied liability arguing mainly that it never led respondent to
believe that he completed the requirements for a Bachelor of Laws degree when his name was included
in the tentative list of graduating students. After trial, the lower court rendered judgment as follows:

WHEREFORE, in view of the foregoing judgment is hereby rendered in favor of the plaintiff and
against the defendant ordering the latter to pay plaintiff the sum of THIRTY FIVE THOUSAND
FOUR HUNDRED SEVENTY PESOS (P35,470.00) with legal rate of interest from the filing of
the complaint until fully paid, the amount of FIVE THOUSAND PESOS (P5,000.00) as attorney's
fees and the cost of suit.

Defendant's counterclaim is, for lack of merit, hereby dismissed.

SO ORDERED.3

which on appeal by both parties was affirmed by the Court of Appeals (CA) with modification. The
dispositive portion of the CA decision reads:

WHEREFORE, in the light of the foregoing, the lower Court's Decision is hereby AFFIRMED
with the MODIFICATION that defendant-appellee, in addition to the sum adjudged by the lower
court in favor of plaintiff-appellant, is also ORDERED to pay plaintiff-appellant the amount of
FIFTY THOUSAND (P50,000.00) PESOS for moral damages. Costs against defendant-
appellee.

SO ORDERED.4

Upon the denial of its motion for reconsideration, petitioner UE elevated the case to this Court on a
petition for review under Rule 45 of the Rules of Court, arguing that it has no liability to respondent
Romeo A. Jader, considering that the proximate and immediate cause of the alleged damages incurred
by the latter arose out of his own negligence in not verifying from the professor concerned the result of
his removal exam.

The petition lacks merit.

When a student is enrolled in any educational or learning institution, a contract of education is entered
into between said institution and the student. The professors, teachers or instructors hired by the school
are considered merely as agents and administrators tasked to perform the school's commitment under
the contract. Since the contracting parties are the school and the student, the latter is not duty-bound
to deal with the former's agents, such as the professors with respect to the status or result of his grades,
although nothing prevents either professors or students from sharing with each other such information.
The Court takes judicial notice of the traditional practice in educational institutions wherein the professor
directly furnishes his/her students their grades. It is the contractual obligation of the school to timely
inform and furnish sufficient notice and information to each and every student as to whether he or she
had already complied with all the requirements for the conferment of a degree or whether they would
be included among those who will graduate. Although commencement exercises are but a formal
ceremony, it nonetheless is not an ordinary occasion, since such ceremony is the educational
institution's way of announcing to the whole world that the students included in the list of those who will
be conferred a degree during the baccalaureate ceremony have satisfied all the requirements for such
degree. Prior or subsequent to the ceremony, the school has the obligation to promptly inform the
student of any problem involving the latter's grades and performance and also most importantly, of the
procedures for remedying the same.

Petitioner, in belatedly informing respondent of the result of the removal examination, particularly at a
time when he had already commenced preparing for the bar exams, cannot be said to have acted in
good faith. Absence of good faith must be sufficiently established for a successful prosecution by the
aggrieved party in a suit for abuse of right under Article 19 of the Civil Code. Good faith connotes an
honest intention to abstain from taking undue advantage of another, even though the forms and
technicalities of the law, together with the absence of all information or belief of facts, would render the
transaction unconscientious.5 It is the school that has access to those information and it is only the
school that can compel its professors to act and comply with its rules, regulations and policies with
respect to the computation and the prompt submission of grades. Students do not exercise control,
much less influence, over the way an educational institution should run its affairs, particularly in
disciplining its professors and teachers and ensuring their compliance with the school's rules and
orders. Being the party that hired them, it is the school that exercises general supervision and exclusive
control over the professors with respect to the submission of reports involving the students' standing.
Exclusive control means that no other person or entity had any control over the instrumentality which
caused the damage or injury.6

The college dean is the senior officer responsible for the operation of an academic program,
enforcement of rules and regulations, and the supervision of faculty and student services. 7 He must
see to it that his own professors and teachers, regardless of their status or position outside of the
university, must comply with the rules set by the latter. The negligent act of a professor who fails to
observe the rules of the school, for instance by not promptly submitting a student's grade, is not only
imputable to the professor but is an act of the school, being his employer.

Considering further, that the institution of learning involved herein is a university which is engaged in
legal education, it should have practiced what it inculcates in its students, more specifically the principle
of good dealings enshrined in Articles 19 and 20 of the Civil Code which states:

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.

Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to another,
shall indemnify the latter for the same.
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.8 In civilized society, men must be able to assume that others will do them no intended injury —
that others will commit no internal aggressions upon them; that their fellowmen, when they act
affirmatively will do so with due care which the ordinary understanding and moral sense of the
community exacts and that those with whom they deal in the general course of society will act in good
faith. The ultimate thing in the theory of liability is justifiable reliance under conditions of civilized
society.9 Schools and professors cannot just take students for granted and be indifferent to them, for
without the latter, the former are useless.

Educational institutions are duty-bound to inform the students of their academic status and not wait for
the latter to inquire from the former. The conscious indifference of a person to the rights or welfare of
the person/persons who may be affected by his act or omission can support a claim for
damages.10 Want of care to the conscious disregard of civil obligations coupled with a conscious
knowledge of the cause naturally calculated to produce them would make the erring party
liable.11 Petitioner ought to have known that time was of the essence in the performance of its obligation
to inform respondent of his grade. It cannot feign ignorance that respondent will not prepare himself for
the bar exams since that is precisely the immediate concern after graduation of an LL.B. graduate. It
failed to act seasonably. Petitioner cannot just give out its student's grades at any time because a
student has to comply with certain deadlines set by the Supreme Court on the submission of
requirements for taking the bar. Petitioner's liability arose from its failure to promptly inform respondent
of the result of an examination and in misleading the latter into believing that he had satisfied all
requirements for the course. Worth quoting is the following disquisition of the respondent court:

It is apparent from the testimony of Dean Tiongson that defendant-appellee University had been
informed during the deliberation that the professor in Practice Court I gave plaintiff-appellant a
failing grade. Yet, defendant-appellee still did not inform plaintiff-appellant of his failure to
complete the requirements for the degree nor did they remove his name from the tentative list
of candidates for graduation. Worse, defendant-appellee university, despite the knowledge that
plaintiff-appellant failed in Practice Court I, again included plaintiff-appellant's name in the
"tentative list of candidates for graduation which was prepared after the deliberation and which
became the basis for the commencement rites program. Dean Tiongson reasons out that
plaintiff-appellant's name was allowed to remain in the tentative list of candidates for graduation
in the hope that the latter would still be able to remedy the situation in the remaining few days
before graduation day. Dean Tiongson, however, did not explain how plaintiff appellant Jader
could have done something to complete his deficiency if defendant-appellee university did not
exert any effort to inform plaintiff-appellant of his failing grade in Practice Court I. 12

Petitioner cannot pass on its blame to the professors to justify its own negligence that led to the delayed
relay of information to respondent. When one of two innocent parties must suffer, he through whose
agency the loss occurred must bear it.13 The modern tendency is to grant indemnity for damages in
cases where there is abuse of right, even when the act is not illicit.14 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. A person should be protected only when he acts in the legitimate exercise of his
right, that is, when he acts with prudence and in good faith, but not when he acts with negligence or
abuse.15

However, while petitioner was guilty of negligence and thus liable to respondent for the latter's actual
damages, we hold that respondent should not have been awarded moral damages. We do not agree
with the Court of Appeals' findings that respondent suffered shock, trauma and pain when he was
informed that he could not graduate and will not be allowed to take the bar examinations. At the very
least, it behooved on respondent to verify for himself whether he has completed all necessary
requirements to be eligible for the bar examinations. As a senior law student, respondent should have
been responsible enough to ensure that all his affairs, specifically those pertaining to his academic
achievement, are in order. Given these considerations, we fail to see how respondent could have
suffered untold embarrassment in attending the graduation rites, enrolling in the bar review classes and
not being able to take the bar exams. If respondent was indeed humiliated by his failure to take the bar,
he brought this upon himself by not verifying if he has satisfied all the requirements including his school
records, before preparing himself for the bar examination. Certainly, taking the bar examinations does
not only entail a mental preparation on the subjects thereof; there are also prerequisites of
documentation and submission of requirements which the prospective examinee must meet.

WHEREFORE, the assailed decision of the Court of Appeals is AFFIRMED with MODIFICATION.
Petitioner is ORDERED to PAY respondent the sum of Thirty-five Thousand Four Hundred Seventy
Pesos (P35,470.00), with legal interest of 6% per annum computed from the date of filing of the
complaint until fully paid; the amount of Five Thousand Pesos (P5,000.00) as attorney's fees; and the
costs of the suit. The award of moral damages is DELEIED.1âwphi1.nêt

SO ORDERED.
GASHEM SHOOKAT BAKSH vs. HON. COURT OF APPEALS G.R. No. 97336; February 19, 1993

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 97336 February 19, 1993

GASHEM SHOOKAT BAKSH, petitioner,

vs.
HON. COURT OF APPEALS and MARILOU T. GONZALES, respondents.

Public Attorney's Office for petitioner.

Corleto R. Castro for private respondent.

DAVIDE, JR., J.:

This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to review and set aside the
Decision1 of the respondent Court of Appeals in CA-G.R. CV No. 24256 which affirmed in toto the 16
October 1939 Decision of Branch 38 (Lingayen) of the Regional Trial Court (RTC) of Pangasinan in
Civil Case No. 16503. Presented is the issue of whether or not damages may be recovered for a breach
of promise to marry on the basis of Article 21 of the Civil Code of the Philippines.

The antecedents of this case are not complicated:

On 27 October 1987, private respondent, without the assistance of counsel, filed with the aforesaid trial
court a complaint2 for damages against the petitioner for the alleged violation of their agreement to get
married. She alleges in said complaint that: she is twenty-two (22) years old, single, Filipino and a pretty
lass of good moral character and reputation duly respected in her community; petitioner, on the other
hand, is an Iranian citizen residing at the Lozano Apartments, Guilig, Dagupan City, and is an exchange
student taking a medical course at the Lyceum Northwestern Colleges in Dagupan City; before 20
August 1987, the latter courted and proposed to marry her; she accepted his love on the condition that
they would get married; they therefore agreed to get married after the end of the school semester,
which was in October of that year; petitioner then visited the private respondent's parents in Bañaga,
Bugallon, Pangasinan to secure their approval to the marriage; sometime in 20 August 1987, the
petitioner forced her to live with him in the Lozano Apartments; she was a virgin before she began living
with him; a week before the filing of the complaint, petitioner's attitude towards her started to change;
he maltreated and threatened to kill her; as a result of such maltreatment, she sustained injuries; during
a confrontation with a representative of the barangay captain of Guilig a day before the filing of the
complaint, petitioner repudiated their marriage agreement and asked her not to live with him anymore
and; the petitioner is already married to someone living in Bacolod City. Private respondent then prayed
for judgment ordering the petitioner to pay her damages in the amount of not less than P45,000.00,
reimbursement for actual expenses amounting to P600.00, attorney's fees and costs, and granting her
such other relief and remedies as may be just and equitable. The complaint was docketed as Civil Case
No. 16503.

In his Answer with Counterclaim,3 petitioner admitted only the personal circumstances of the parties as
averred in the complaint and denied the rest of the allegations either for lack of knowledge or
information sufficient to form a belief as to the truth thereof or because the true facts are those alleged
as his Special and Affirmative Defenses. He thus claimed that he never proposed marriage to or agreed
to be married with the private respondent; he neither sought the consent and approval of her parents
nor forced her to live in his apartment; he did not maltreat her, but only told her to stop coming to his
place because he discovered that she had deceived him by stealing his money and passport; and
finally, no confrontation took place with a representative of the barangay captain. Insisting, in his
Counterclaim, that the complaint is baseless and unfounded and that as a result thereof, he was
unnecessarily dragged into court and compelled to incur expenses, and has suffered mental anxiety
and a besmirched reputation, he prayed for an award of P5,000.00 for miscellaneous expenses and
P25,000.00 as moral damages.

After conducting a pre-trial on 25 January 1988, the trial court issued a Pre-Trial Order4 embodying the
stipulated facts which the parties had agreed upon, to wit:

1. That the plaintiff is single and resident (sic) of Bañaga, Bugallon, Pangasinan, while
the defendant is single, Iranian citizen and resident (sic) of Lozano Apartment, Guilig,
Dagupan City since September 1, 1987 up to the present;

2. That the defendant is presently studying at Lyceum Northwestern, Dagupan City,

College of Medicine, second year medicine proper;

3. That the plaintiff is (sic) an employee at Mabuhay Luncheonette , Fernandez Avenue,

Dagupan City since July, 1986 up to the present and a (sic) high school graduate;

4. That the parties happened to know each other when the manager of the Mabuhay
Luncheonette, Johhny Rabino introduced the defendant to the plaintiff on August 3, 1986.

After trial on the merits, the lower court, applying Article 21 of the Civil Code, rendered on 16 October
1989 a decision5 favoring the private respondent. The petitioner was thus ordered to pay the latter
damages and attorney's fees; the dispositive portion of the decision reads:

IN THE LIGHT of the foregoing consideration, judgment is hereby rendered in favor of the
plaintiff and against the defendant.

1. Condemning (sic) the defendant to pay the plaintiff the sum of twenty thousand
(P20,000.00) pesos as moral damages.

2. Condemning further the defendant to play the plaintiff the sum of three thousand
(P3,000.00) pesos as atty's fees and two thousand (P2,000.00) pesos at (sic) litigation
expenses and to pay the costs.

3. All other claims are denied.6

The decision is anchored on the trial court's findings and conclusions that (a) petitioner and private
respondent were lovers, (b) private respondent is not a woman of loose morals or questionable virtue
who readily submits to sexual advances, (c) petitioner, through machinations, deceit and false
pretenses, promised to marry private respondent, d) because of his persuasive promise to marry her,
she allowed herself to be deflowered by him, (e) by reason of that deceitful promise, private respondent
and her parents — in accordance with Filipino customs and traditions — made some preparations for
the wedding that was to be held at the end of October 1987 by looking for pigs and chickens, inviting
friends and relatives and contracting sponsors, (f) petitioner did not fulfill his promise to marry her and
(g) such acts of the petitioner, who is a foreigner and who has abused Philippine hospitality, have
offended our sense of morality, good customs, culture and traditions. The trial court gave full credit to
the private respondent's testimony because, inter alia, she would not have had the temerity and
courage to come to court and expose her honor and reputation to public scrutiny and ridicule if her
claim was false.7

The above findings and conclusions were culled from the detailed summary of the evidence for the
private respondent in the foregoing decision, digested by the respondent Court as follows:

According to plaintiff, who claimed that she was a virgin at the time and that she never
had a boyfriend before, defendant started courting her just a few days after they first met.
He later proposed marriage to her several times and she accepted his love as well as his
proposal of marriage on August 20, 1987, on which same day he went with her to her
hometown of Bañaga, Bugallon, Pangasinan, as he wanted to meet her parents and
inform them of their relationship and their intention to get married. The photographs Exhs.
"A" to "E" (and their submarkings) of defendant with members of plaintiff's family or with
plaintiff, were taken that day. Also on that occasion, defendant told plaintiffs parents and
brothers and sisters that he intended to marry her during the semestral break in October,
1987, and because plaintiff's parents thought he was good and trusted him, they agreed
to his proposal for him to marry their daughter, and they likewise allowed him to stay in
their house and sleep with plaintiff during the few days that they were in Bugallon. When
plaintiff and defendant later returned to Dagupan City, they continued to live together in
defendant's apartment. However, in the early days of October, 1987, defendant would tie
plaintiff's hands and feet while he went to school, and he even gave her medicine at 4
o'clock in the morning that made her sleep the whole day and night until the following day.
As a result of this live-in relationship, plaintiff became pregnant, but defendant gave her
some medicine to abort the fetus. Still plaintiff continued to live with defendant and kept
reminding him of his promise to marry her until he told her that he could not do so because
he was already married to a girl in Bacolod City. That was the time plaintiff left defendant,
went home to her parents, and thereafter consulted a lawyer who accompanied her to the
barangay captain in Dagupan City. Plaintiff, her lawyer, her godmother, and a barangay
tanod sent by the barangay captain went to talk to defendant to still convince him to marry
plaintiff, but defendant insisted that he could not do so because he was already married
to a girl in Bacolod City, although the truth, as stipulated by the parties at the pre-trial, is
that defendant is still single.

Plaintiff's father, a tricycle driver, also claimed that after defendant had informed them of
his desire to marry Marilou, he already looked for sponsors for the wedding, started
preparing for the reception by looking for pigs and chickens, and even already invited
many relatives and friends to the forthcoming wedding. 8

Petitioner appealed the trial court's decision to the respondent Court of Appeals which docketed the
case as CA-G.R. CV No. 24256. In his Brief,9 he contended that the trial court erred (a) in not dismissing
the case for lack of factual and legal basis and (b) in ordering him to pay moral damages, attorney's
fees, litigation expenses and costs.
On 18 February 1991, respondent Court promulgated the challenged decision 10 affirming in toto the
trial court's ruling of 16 October 1989. In sustaining the trial court's findings of fact, respondent Court
made the following analysis:

First of all, plaintiff, then only 21 years old when she met defendant who was already 29
years old at the time, does not appear to be a girl of loose morals. It is uncontradicted
that she was a virgin prior to her unfortunate experience with defendant and never had
boyfriend. She is, as described by the lower court, a barrio lass "not used and accustomed
to trend of modern urban life", and certainly would (sic) not have allowed
"herself to be deflowered by the defendant if there was no persuasive promise made by
the defendant to marry her." In fact, we agree with the lower court that plaintiff and
defendant must have been sweethearts or so the plaintiff must have thought because of
the deception of defendant, for otherwise, she would not have allowed herself to be
photographed with defendant in public in so (sic) loving and tender poses as those
depicted in the pictures Exhs. "D" and "E". We cannot believe, therefore, defendant's
pretense that plaintiff was a nobody to him except a waitress at the restaurant where he
usually ate. Defendant in fact admitted that he went to plaintiff's hometown of Bañaga,
Bugallon, Pangasinan, at least thrice; at (sic) the town fiesta on February 27, 1987 (p. 54,
tsn May 18, 1988), at (sic) a beach party together with the manager and employees of
the Mabuhay Luncheonette on March 3, 1987 (p. 50, tsn id.), and on April 1, 1987 when
he allegedly talked to plaintiff's mother who told him to marry her daughter (pp. 55-56,
tsn id.). Would defendant have left Dagupan City where he was involved in the serious
study of medicine to go to plaintiff's hometown in Bañaga, Bugallon, unless there was
(sic) some kind of special relationship between them? And this special relationship must
indeed have led to defendant's insincere proposal of marriage to plaintiff, communicated
not only to her but also to her parents, and (sic) Marites Rabino, the owner of the
restaurant where plaintiff was working and where defendant first proposed marriage to
her, also knew of this love affair and defendant's proposal of marriage to plaintiff, which
she declared was the reason why plaintiff resigned from her job at the restaurant after
she had accepted defendant's proposal (pp. 6-7, tsn March 7, 1988).

Upon the other hand, appellant does not appear to be a man of good moral character and
must think so low and have so little respect and regard for Filipino women that he openly
admitted that when he studied in Bacolod City for several years where he finished his
B.S. Biology before he came to Dagupan City to study medicine, he had a common-law
wife in Bacolod City. In other words, he also lived with another woman in Bacolod City but
did not marry that woman, just like what he did to plaintiff. It is not surprising, then, that
he felt so little compunction or remorse in pretending to love and promising to marry
plaintiff, a young, innocent, trustful country girl, in order to satisfy his lust on her. 11

and then concluded:

In sum, we are strongly convinced and so hold that it was defendant-appellant's fraudulent
and deceptive protestations of love for and promise to marry plaintiff that made her
surrender her virtue and womanhood to him and to live with him on the honest and sincere
belief that he would keep said promise, and it was likewise these (sic) fraud and deception
on appellant's part that made plaintiff's parents agree to their daughter's living-in with him
preparatory to their supposed marriage. And as these acts of appellant are palpably and
undoubtedly against morals, good customs, and public policy, and are even gravely and
deeply derogatory and insulting to our women, coming as they do from a foreigner who
has been enjoying the hospitality of our people and taking advantage of the opportunity
to study in one of our institutions of learning, defendant-appellant should indeed be made,
 under Art. 21 of the Civil Code of the Philippines, to compensate for the moral damages
and injury that he had caused plaintiff, as the lower court ordered him to do in its decision
in this case. 12

Unfazed by his second defeat, petitioner filed the instant petition on 26 March 1991; he raises therein
the single issue of whether or not Article 21 of the Civil Code applies to the case at bar. 13

It is petitioner's thesis that said Article 21 is not applicable because he had not committed any moral
wrong or injury or violated any good custom or public policy; he has not professed love or proposed
marriage to the private respondent; and he has never maltreated her. He criticizes the trial court for
liberally invoking Filipino customs, traditions and culture, and ignoring the fact that since he is a
foreigner, he is not conversant with such Filipino customs, traditions and culture. As an Iranian Moslem,
he is not familiar with Catholic and Christian ways. He stresses that even if he had made a promise to
marry, the subsequent failure to fulfill the same is excusable or tolerable because of his Moslem
upbringing; he then alludes to the Muslim Code which purportedly allows a Muslim to take four (4) wives
and concludes that on the basis thereof, the trial court erred in ruling that he does not posses good
moral character. Moreover, his controversial "common law life" is now his legal wife as their marriage
had been solemnized in civil ceremonies in the Iranian Embassy. As to his unlawful cohabitation with
the private respondent, petitioner claims that even if responsibility could be pinned on him for the live-
in relationship, the private respondent should also be faulted for consenting to an illicit arrangement.
Finally, petitioner asseverates that even if it was to be assumed arguendo that he had professed his
love to the private respondent and had also promised to marry her, such acts would not be actionable
in view of the special circumstances of the case. The mere breach of promise is not actionable. 14

On 26 August 1991, after the private respondent had filed her Comment to the petition and the petitioner
had filed his Reply thereto, this Court gave due course to the petition and required the parties to submit
their respective Memoranda, which they subsequently complied with.

As may be gleaned from the foregoing summation of the petitioner's arguments in support of his thesis,
it is clear that questions of fact, which boil down to the issue of the credibility of witnesses, are also
raised. It is the rule in this jurisdiction that appellate courts will not disturb the trial court's findings as to
the credibility of witnesses, the latter court having heard the witnesses and having had the opportunity
to observe closely their deportment and manner of testifying, unless the trial court had plainly
overlooked facts of substance or value which, if considered, might affect the result of the case. 15

Petitioner has miserably failed to convince Us that both the appellate and trial courts had overlooked
any fact of substance or values which could alter the result of the case.

Equally settled is the rule that only questions of law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court. It is not the function of this Court to analyze or weigh
all over again the evidence introduced by the parties before the lower court. There are, however,
recognized exceptions to this rule. Thus, in Medina vs. Asistio, Jr., 16 this Court took the time, again, to
enumerate these exceptions:

xxx xxx xxx

(1) When the conclusion is a finding grounded entirely on speculation, surmises or

conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When the inference made is
manifestly mistaken, absurb or impossible (Luna v. Linatok, 74 Phil. 15 [1942]); (3) Where
there is a grave abuse of discretion (Buyco v. People, 95 Phil. 453 [1955]); (4) When the
judgment is based on a misapprehension of facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are conflicting (Casica v. Villaseca,
 L-9590 Ap. 30, 1957; unrep.) (6) When the Court of Appeals, in making its findings, went
beyond the issues of the case and the same is contrary to the admissions of both
appellate and appellee (Evangelista v. Alto Surety and Insurance Co., 103 Phil. 401
[1958]);
(7) The findings of the Court of Appeals are contrary to those of the trial court (Garcia v.
Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA 593 [1986]);
(8) When the findings of fact are conclusions without citation of specific evidence on which
they are based (Ibid.,); (9) When the facts set forth in the petition as well as in the
petitioners main and reply briefs are not disputed by the respondents (Ibid.,); and (10)
The finding of fact of the Court of Appeals is premised on the supposed absence of
evidence and is contradicted by the evidence on record (Salazar v. Gutierrez, 33 SCRA
242 [1970]).

Petitioner has not endeavored to joint out to Us the existence of any of the above quoted exceptions in
this case. Consequently, the factual findings of the trial and appellate courts must be respected.

And now to the legal issue.

The existing rule is that a breach of promise to marry per se is not an actionable wrong. 17 Congress
deliberately eliminated from the draft of the New Civil Code the provisions that would have made it so.
The reason therefor is set forth in the report of the Senate Committees on the Proposed Civil Code,
from which We quote:

The elimination of this chapter is proposed. That breach of promise to marry is not
actionable has been definitely decided in the case of De Jesus vs. Syquia. 18 The history
of breach of promise suits in the United States and in England has shown that no other
action lends itself more readily to abuse by designing women and unscrupulous men. It
is this experience which has led to the abolition of rights of action in the so-called Heart
Balm suits in many of the American states. . . . 19

This notwithstanding, the said Code contains a provision, Article 21, which is designed to expand the
concept of torts or quasi-delict in this jurisdiction by granting adequate legal remedy for the untold
number of moral wrongs which is impossible for human foresight to specifically enumerate and punish
in the statute books. 20

As the Code Commission itself stated in its Report:

But the Code Commission had gone farther than the sphere of wrongs defined or
determined by positive law. Fully sensible that there are countless gaps in the statutes,
which leave so many victims of moral wrongs helpless, even though they have actually
suffered material and moral injury, the Commission has deemed it necessary, in the
interest of justice, to incorporate in the proposed Civil Code the following rule:

Art. 23. 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.

An example will illustrate the purview of the foregoing norm: "A" seduces the nineteen-
year old daughter of "X". A promise of marriage either has not been made, or can not be
proved. The girl becomes pregnant. Under the present laws, there is no crime, as the girl
is above nineteen years of age. Neither can any civil action for breach of promise of
marriage be filed. Therefore, though the grievous moral wrong has been committed, and
 though the girl and family have suffered incalculable moral damage, she and her parents
cannot bring action for damages. But under the proposed article, she and her parents
would have such a right of action.

Thus at one stroke, the legislator, if the forgoing rule is approved, would vouchsafe
adequate legal remedy for that untold number of moral wrongs which it is impossible for
human foresight to provide for specifically in the statutes. 21

Article 2176 of the Civil Code, which defines a quasi-delict thus:

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.

is limited to negligent acts or omissions and excludes the notion of willfulness or intent. Quasi-
delict, known in Spanish legal treatises as culpa aquiliana, is a civil law concept while torts is an
Anglo-American or common law concept. Torts is much broader than culpa aquiliana because it
includes not only negligence, but international criminal acts as well such as assault and battery,
false imprisonment and deceit. In the general scheme of the Philippine legal system envisioned
by the Commission responsible for drafting the New Civil Code, intentional and malicious acts,
with certain exceptions, are to be governed by the Revised Penal Code while negligent acts or
omissions are to be covered by Article 2176 of the Civil Code. 22 In between these opposite
spectrums are injurious acts which, in the absence of Article 21, would have been beyond
redress. Thus, Article 21 fills that vacuum. It is even postulated that together with Articles 19 and
20 of the Civil Code, Article 21 has greatly broadened the scope of the law on civil wrongs; it has
become much more supple and adaptable than the Anglo-American law on torts. 23

In the light of the above laudable purpose of Article 21, We are of the opinion, and so hold, that where
a man's promise to marry is in fact the proximate cause of the acceptance of his love by a woman and
his representation to fulfill that promise thereafter becomes the proximate cause of the giving of herself
unto him in a sexual congress, proof that he had, in reality, no intention of marrying her and that the
promise was only a subtle scheme or deceptive device to entice or inveigle her to accept him and to
obtain her consent to the sexual act, could justify the award of damages pursuant to Article 21 not
because of such promise to marry but because of the fraud and deceit behind it and the willful injury to
her honor and reputation which followed thereafter. It is essential, however, that such injury should
have been committed in a manner contrary to morals, good customs or public policy.

In the instant case, respondent Court found that it was the petitioner's "fraudulent and deceptive
protestations of love for and promise to marry plaintiff that made her surrender her virtue and
womanhood to him and to live with him on the honest and sincere belief that he would keep said
promise, and it was likewise these fraud and deception on appellant's part that made plaintiff's parents
agree to their daughter's living-in with him preparatory to their supposed marriage." 24 In short, the
private respondent surrendered her virginity, the cherished possession of every single Filipina, not
because of lust but because of moral seduction — the kind illustrated by the Code Commission in its
example earlier adverted to. The petitioner could not be held liable for criminal seduction punished
under either Article 337 or Article 338 of the Revised Penal Code because the private respondent was
above eighteen (18) years of age at the time of the seduction.

Prior decisions of this Court clearly suggest that Article 21 may be applied in a breach of promise to
marry where the woman is a victim of moral seduction. Thus, in Hermosisima vs. Court of
Appeals,25 this Court denied recovery of damages to the woman because:
 . . . we find ourselves unable to say that petitioner is morally guilty of seduction, not only
because he is approximately ten (10) years younger than the complainant — who was
around thirty-six (36) years of age, and as highly enlightened as a former high school
teacher and a life insurance agent are supposed to be — when she became intimate with
petitioner, then a mere apprentice pilot, but, also, because the court of first instance found
that, complainant "surrendered herself" to petitioner because, "overwhelmed by her love"
for him, she "wanted to bind" him by having a fruit of their engagement even before they
had the benefit of clergy.

In Tanjanco vs. Court of Appeals, 26 while this Court likewise hinted at possible recovery if there had
been moral seduction, recovery was eventually denied because We were not convinced that such
seduction existed. The following enlightening disquisition and conclusion were made in the said case:

The Court of Appeals seem to have overlooked that the example set forth in the Code
Commission's memorandum refers to a tort upon a minor who had been seduced. The
essential feature is seduction, that in law is more than mere sexual intercourse, or a
breach of a promise of marriage; it connotes essentially the idea of deceit, enticement,
superior power or abuse of confidence on the part of the seducer to which the woman
has yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil. 595).

It has been ruled in the Buenaventura case (supra) that —

To constitute seduction there must in all cases be some sufficient promise

or inducement and the woman must yield because of the promise or other
inducement. If she consents merely from carnal lust and the intercourse is
from mutual desire, there is no seduction (43 Cent. Dig. tit. Seduction, par.
56) She must be induced to depart from the path of virtue by the use of
some species of arts, persuasions and wiles, which are calculated to have
and do have that effect, and which result in her person to ultimately
submitting her person to the sexual embraces of her seducer (27 Phil. 123).

And in American Jurisprudence we find:

On the other hand, in an action by the woman, the enticement, persuasion

or deception is the essence of the injury; and a mere proof of intercourse is
insufficient to warrant a recovery.

Accordingly it is not seduction where the willingness arises out of sexual

desire of curiosity of the female, and the defendant merely affords her the
needed opportunity for the commission of the act. It has been emphasized
that to allow a recovery in all such cases would tend to the demoralization
of the female sex, and would be a reward for unchastity by which a class of
adventuresses would be swift to profit. (47 Am. Jur. 662)

xxx xxx xxx

Over and above the partisan allegations, the fact stand out that for one whole year, from
1958 to 1959, the plaintiff-appellee, a woman of adult age, maintain intimate sexual
relations with appellant, with repeated acts of intercourse. Such conduct is incompatible
with the idea of seduction. Plainly there is here voluntariness and mutual passion; for had
the appellant been deceived, had she surrendered exclusively because of the deceit,
artful persuasions and wiles of the defendant, she would not have again yielded to his
 embraces, much less for one year, without exacting early fulfillment of the alleged
promises of marriage, and would have cut short all sexual relations upon finding that
defendant did not intend to fulfill his defendant did not intend to fulfill his promise. Hence,
we conclude that no case is made under article 21 of the Civil Code, and no other cause
of action being alleged, no error was committed by the Court of First Instance in
dismissing the complaint. 27

In his annotations on the Civil Code, 28 Associate Justice Edgardo L. Paras, who recently retired from
this Court, opined that in a breach of promise to marry where there had been carnal knowledge, moral
damages may be recovered:

. . . if there be criminal or moral seduction, but not if the intercourse was due to mutual
lust. (Hermosisima vs. Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733, Sept. 30, 1960; Batarra vs.
Marcos, 7 Phil. 56 (sic); Beatriz Galang vs. Court of Appeals, et al., L-17248, Jan. 29,
1962). (In other words, if the CAUSE be the promise to marry, and the EFFECT be the
carnal knowledge, there is a chance that there was criminal or moral seduction, hence
recovery of moral damages will prosper. If it be the other way around, there can be no
recovery of moral damages, because here mutual lust has intervened). . . .

together with "ACTUAL damages, should there be any, such as the expenses for the wedding
presentations (See Domalagon v. Bolifer, 33 Phil. 471).

Senator Arturo M. Tolentino 29 is also of the same persuasion:

It is submitted that the rule in Batarra vs. Marcos, 30 still subsists, notwithstanding the
incorporation of the present article31 in the Code. The example given by the Code
Commission is correct, if there was seduction, not necessarily in the legal sense, but in
the vulgar sense of deception. But when the sexual act is accomplished without any deceit
or qualifying circumstance of abuse of authority or influence, but the woman, already of
age, has knowingly given herself to a man, it cannot be said that there is an injury which
can be the basis for indemnity.

But so long as there is fraud, which is characterized by willfulness (sic), the action lies.
The court, however, must weigh the degree of fraud, if it is sufficient to deceive the woman
under the circumstances, because an act which would deceive a girl sixteen years of age
may not constitute deceit as to an experienced woman thirty years of age. But so long as
there is a wrongful act and a resulting injury, there should be civil liability, even if the act
is not punishable under the criminal law and there should have been an acquittal or
dismissal of the criminal case for that reason.

We are unable to agree with the petitioner's alternative proposition to the effect that granting, for
argument's sake, that he did promise to marry the private respondent, the latter is nevertheless also at
fault. According to him, both parties are in pari delicto; hence, pursuant to Article 1412(1) of the Civil
Code and the doctrine laid down in Batarra vs. Marcos, 32 the private respondent cannot recover
damages from the petitioner. The latter even goes as far as stating that if the private respondent had
"sustained any injury or damage in their relationship, it is primarily because of her own doing, 33 for:

. . . She is also interested in the petitioner as the latter will become a doctor sooner or
later. Take notice that she is a plain high school graduate and a mere employee . . .
(Annex "C") or a waitress (TSN, p. 51, January 25, 1988) in a luncheonette and without
doubt, is in need of a man who can give her economic security. Her family is in dire need
 of financial assistance. (TSN, pp. 51-53, May 18, 1988). And this predicament prompted
her to accept a proposition that may have been offered by the petitioner. 34

These statements reveal the true character and motive of the petitioner. It is clear that he harbors a
condescending, if not sarcastic, regard for the private respondent on account of the latter's ignoble
birth, inferior educational background, poverty and, as perceived by him, dishonorable employment.
Obviously then, from the very beginning, he was not at all moved by good faith and an honest motive.
Marrying with a woman so circumstances could not have even remotely occurred to him. Thus, his
profession of love and promise to marry were empty words directly intended to fool, dupe, entice,
beguile and deceive the poor woman into believing that indeed, he loved her and would want her to be
his life's partner. His was nothing but pure lust which he wanted satisfied by a Filipina who honestly
believed that by accepting his proffer of love and proposal of marriage, she would be able to enjoy a
life of ease and security. Petitioner clearly violated the Filipino's concept of morality and brazenly defied
the traditional respect Filipinos have for their women. It can even be said that the petitioner committed
such deplorable acts in blatant disregard of Article 19 of the Civil Code which directs every person to
act with justice, give everyone his due and observe honesty and good faith in the exercise of his rights
and in the performance of his obligations.

No foreigner must be allowed to make a mockery of our laws, customs and traditions.

The pari delicto rule does not apply in this case for while indeed, the private respondent may not have
been impelled by the purest of intentions, she eventually submitted to the petitioner in sexual congress
not out of lust, but because of moral seduction. In fact, it is apparent that she had qualms of conscience
about the entire episode for as soon as she found out that the petitioner was not going to marry her
after all, she left him. She is not, therefore, in pari delicto with the petitioner. Pari delicto means "in
equal fault; in a similar offense or crime; equal in guilt or in legal fault." 35 At most, it could be conceded
that she is merely in delicto.

Equity often interferes for the relief of the less guilty of the parties, where his transgression
has been brought about by the imposition of undue influence of the party on whom the
burden of the original wrong principally rests, or where his consent to the transaction was
itself procured by
fraud. 36

In Mangayao vs. Lasud, 37 We declared:

Appellants likewise stress that both parties being at fault, there should be no action by
one against the other (Art. 1412, New Civil Code). This rule, however, has been
interpreted as applicable only where the fault on both sides is, more or less, equivalent.
It does not apply where one party is literate or intelligent and the other one is not. (c.f.
Bough vs. Cantiveros, 40 Phil. 209).

We should stress, however, that while We find for the private respondent, let it not be said that this
Court condones the deplorable behavior of her parents in letting her and the petitioner stay together in
the same room in their house after giving approval to their marriage. It is the solemn duty of parents to
protect the honor of their daughters and infuse upon them the higher values of morality and dignity.

WHEREFORE, finding no reversible error in the challenged decision, the instant petition is hereby
DENIED, with costs against the petitioner.

SO ORDERED
BEATRIZ P. WASSMER vs. FRANCISCO X. VELEZ G.R. No. L-20089; December 26, 1964

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-20089 December 26, 1964

BEATRIZ P. WASSMER, plaintiff-appellee,

vs.
FRANCISCO X. VELEZ, defendant-appellant.

Jalandoni & Jamir for defendant-appellant.

Samson S. Alcantara for plaintiff-appellee.

BENGZON, J.P., J.:

The facts that culminated in this case started with dreams and hopes, followed by appropriate planning
and serious endeavors, but terminated in frustration and, what is worse, complete public humiliation.

Francisco X. Velez and Beatriz P. Wassmer, following their mutual promise of love, decided to get
married and set September 4, 1954 as the big day. On September 2, 1954 Velez left this note for his
bride-to-be:

Dear Bet —

Will have to postpone wedding — My mother opposes it. Am leaving on the Convair today.

Please do not ask too many people about the reason why — That would only create a
scandal.

Paquing

But the next day, September 3, he sent her the following telegram:

NOTHING CHANGED REST ASSURED RETURNING VERY SOON APOLOGIZE

MAMA PAPA LOVE .

PAKING

Thereafter Velez did not appear nor was he heard from again.

Sued by Beatriz for damages, Velez filed no answer and was declared in default. Plaintiff adduced
evidence before the clerk of court as commissioner, and on April 29, 1955, judgment was rendered
ordering defendant to pay plaintiff P2,000.00 as actual damages; P25,000.00 as moral and exemplary
damages; P2,500.00 as attorney's fees; and the costs.
On June 21, 1955 defendant filed a "petition for relief from orders, judgment and proceedings and
motion for new trial and reconsideration." Plaintiff moved to strike it cut. But the court, on August 2,
1955, ordered the parties and their attorneys to appear before it on August 23, 1955 "to explore at this
stage of the proceedings the possibility of arriving at an amicable settlement." It added that should any
of them fail to appear "the petition for relief and the opposition thereto will be deemed submitted for
resolution."

On August 23, 1955 defendant failed to appear before court. Instead, on the following day his counsel
filed a motion to defer for two weeks the resolution on defendants petition for relief. The counsel stated
that he would confer with defendant in Cagayan de Oro City — the latter's residence — on the possibility
of an amicable element. The court granted two weeks counted from August 25, 1955.

Plaintiff manifested on June 15, 1956 that the two weeks given by the court had expired on September
8, 1955 but that defendant and his counsel had failed to appear.

Another chance for amicable settlement was given by the court in its order of July 6, 1956 calling the
parties and their attorneys to appear on July 13, 1956. This time. however, defendant's counsel
informed the court that chances of settling the case amicably were nil.

On July 20, 1956 the court issued an order denying defendant's aforesaid petition. Defendant has
appealed to this Court. In his petition of June 21, 1955 in the court a quo defendant alleged excusable
negligence as ground to set aside the judgment by default. Specifically, it was stated that defendant
filed no answer in the belief that an amicable settlement was being negotiated.

A petition for relief from judgment on grounds of fraud, accident, mistake or excusable negligence, must
be duly supported by an affidavit of merits stating facts constituting a valid defense. (Sec. 3, Rule 38,
Rules of Court.) Defendant's affidavit of merits attached to his petition of June 21, 1955 stated: "That
he has a good and valid defense against plaintiff's cause of action, his failure to marry the plaintiff as
scheduled having been due to fortuitous event and/or circumstances beyond his control." An affidavit
of merits like this stating mere conclusions or opinions instead of facts is not valid. (Cortes vs. Co Bun
Kim, L-3926, Oct. 10, 1951; Vaswani vs. P. Tarrachand Bros., L-15800, December 29, 1960.)

Defendant, however, would contend that the affidavit of merits was in fact unnecessary, or a mere
surplusage, because the judgment sought to be set aside was null and void, it having been based on
evidence adduced before the clerk of court. In Province of Pangasinan vs. Palisoc, L-16519, October
30, 1962, this Court pointed out that the procedure of designating the clerk of court as commissioner
to receive evidence is sanctioned by Rule 34 (now Rule 33) of the Rules of Court. Now as to defendant's
consent to said procedure, the same did not have to be obtained for he was declared in default and
thus had no standing in court (Velez vs. Ramas, 40 Phil. 787; Alano vs. Court of First Instance, L-
14557, October 30, 1959).

In support of his "motion for new trial and reconsideration," defendant asserts that the judgment is
contrary to law. The reason given is that "there is no provision of the Civil Code authorizing" an action
for breach of promise to marry. Indeed, our ruling in Hermosisima vs. Court of Appeals (L-14628, Sept.
30, 1960), as reiterated in Estopa vs. Biansay (L-14733, Sept. 30, 1960), is that "mere breach of a
promise to marry" is not an actionable wrong. We pointed out that Congress deliberately eliminated
from the draft of the new Civil Code the provisions that would have it so.

It must not be overlooked, however, that the extent to which acts not contrary to law may be perpetrated
with impunity, is not limitless for Article 21 of said Code provides that "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."
The record reveals that on August 23, 1954 plaintiff and defendant applied for a license to contract
marriage, which was subsequently issued (Exhs. A, A-1). Their wedding was set for September 4, 1954.
Invitations were printed and distributed to relatives, friends and acquaintances (Tsn., 5; Exh. C). The
bride-to-be's trousseau, party drsrses and other apparel for the important occasion were purchased
(Tsn., 7-8). Dresses for the maid of honor and the flower girl were prepared. A matrimonial bed, with
accessories, was bought. Bridal showers were given and gifts received (Tsn., 6; Exh. E). And then, with
but two days before the wedding, defendant, who was then 28 years old,: simply left a note for plaintiff
stating: "Will have to postpone wedding — My mother opposes it ... " He enplaned to his home city in
Mindanao, and the next day, the day before the wedding, he wired plaintiff: "Nothing changed rest
assured returning soon." But he never returned and was never heard from again.

Surely this is not a case of mere breach of promise to marry. As stated, mere breach of promise to
marry is not an actionable wrong. But to formally set a wedding and go through all the above-described
preparation and publicity, only to walk out of it when the matrimony is about to be solemnized, is quite
different. This is palpably and unjustifiably contrary to good customs for which defendant must be held
answerable in damages in accordance with Article 21 aforesaid.

Defendant urges in his afore-stated petition that the damages awarded were excessive. No question is
raised as to the award of actual damages. What defendant would really assert hereunder is that the
award of moral and exemplary damages, in the amount of P25,000.00, should be totally eliminated.

Per express provision of Article 2219 (10) of the New Civil Code, moral damages are recoverable in
the cases mentioned in Article 21 of said Code. As to exemplary damages, defendant contends that
the same could not be adjudged against him because under Article 2232 of the New Civil Code the
condition precedent is that "the defendant acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner." The argument is devoid of merit as under the above-narrated circumstances of
this case defendant clearly acted in a "wanton ... , reckless [and] oppressive manner." This Court's
opinion, however, is that considering the particular circumstances of this case, P15,000.00 as moral
and exemplary damages is deemed to be a reasonable award.

PREMISES CONSIDERED, with the above-indicated modification, the lower court's judgment is hereby
affirmed, with costs.
APOLONIO TANJANCO vs. HON. COURT OF APPEALS and ARACELI SANTOS; G.R. No. L18630;
December 17, 1966

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-18630 December 17, 1966

APOLONIO TANJANCO, petitioner,

vs.
HON. COURT OF APPEALS and ARACELI SANTOS, respondents.

P. Carreon and G. O. Veneracion, Jr. for petitioner.

Antonio V. Bonoan for respondents.

REYES, J.B.L., J.:

Appeal from a decision of the Court of Appeals (in its Case No. 27210-R) revoking an order of the Court
of First Instance of Rizal (in Civil Case No. Q-4797) dismissing appellant's action for support and
damages.

The essential allegations of the complaint are to the effect that, from December, 1957, the defendant
(appellee herein), Apolonio Tanjanco, courted the plaintiff, Araceli Santos, both being of adult age; that
"defendant expressed and professed his undying love and affection for plaintiff who also in due time
reciprocated the tender feelings"; that in consideration of defendant's promise of marriage plaintiff
consented and acceded to defendant's pleas for carnal knowledge; that regularly until December 1959,
through his protestations of love and promises of marriage, defendant succeeded in having carnal
access to plaintiff, as a result of which the latter conceived a child; that due to her pregnant condition,
to avoid embarrassment and social humiliation, plaintiff had to resign her job as secretary in IBM
Philippines, Inc., where she was receiving P230.00 a month; that thereby plaintiff became unable to
support herself and her baby; that due to defendant's refusal to marry plaintiff, as promised, the latter
suffered mental anguish, besmirched reputation, wounded feelings, moral shock, and social
humiliation. The prayer was for a decree compelling the defendant to recognize the unborn child that
plaintiff was bearing; to pay her not less than P430.00 a month for her support and that of her baby,
plus P100,000.00 in moral and exemplary damages, plus P10,000.00 attorney's fees.

Upon defendant's motion to dismiss, the court of first instance dismissed the complaint for failure to
state a cause of action.

Plaintiff Santos duly appealed to the Court of Appeals, and the latter ultimately decided the case,
holding with the lower court that no cause of action was shown to compel recognition of a child as yet
unborn, nor for its support, but decreed that the complaint did state a cause of action for damages,
premised on Article 21 of the Civil Code of the Philippines, prescribing as follows:

ART. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
The Court of Appeals, therefore, entered judgment setting aside the dismissal and directing the court
of origin to proceed with the case.

Defendant, in turn, appealed to this Court, pleading that actions for breach of a promise to marry are
not permissible in this jurisdiction, and invoking the rulings of this Court in Estopa vs. Piansay, L-14733,
September 30, 1960; Hermosisima vs. Court of Appeals, L-14628, January 29, 1962; and De Jesus vs.
SyQuia, 58 Phil. 886.

We find this appeal meritorious.

In holding that the complaint stated a cause of action for damages, under Article 21 above mentioned,
the Court of Appeals relied upon and quoted from the memorandum submitted by the Code
Commission to the Legislature in 1949 to support the original draft of the Civil Code. Referring to Article
23 of the draft (now Article 21 of the Code), the Commission stated:

But the Code Commission has gone farther than the sphere of wrongs defined or determined by
positive law. Fully sensible that there are countless gaps in the statutes, which leave so many
victims of moral wrongs helpless, even though they have actually suffered material and moral
injury, the Commission has deemed it necessary, in the interest of justice, to incorporate in the
proposed Civil Code the following rule:

"ART. 23. 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."

An example will illustrate the purview of the foregoing norm: "A" seduces the nineteen-year old
daughter of "X". A promise of marriage either has not been made, or can not be proved. The girl
becomes pregnant. Under the present laws, there is no crime, as the girl is above eighteen years
of age. Neither can any civil action for breach of promise of marriage be filed. Therefore, though
the grievous moral wrong has been committed, and though the girl and her family have suffered
incalculable moral damage, she and her parents cannot bring any action for damages. But under
the proposed article, she and her parents would have such a right of action.

The Court of Appeals seems to have overlooked that the example set forth in the Code Commission's
memorandum refers to a tort upon a minor who has been seduced. The essential feature is seduction,
that in law is more than mere sexual intercourse, or a breach of a promise of marriage; it connotes
essentially the idea of deceit, enticement, superior power or abuse of confidence on the part of the
seducer to which the woman has yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil.
595).

It has been ruled in the Buenaventura case (supra) that —

To constitute seduction there must in all cases be some sufficient promise or inducement and
the woman must yield because of the promise or other inducement. If she consents merely from
carnal lust and the intercourse is from mutual desire, there is no seduction (43 Cent. Dig. tit.
Seduction, par. 56). She must be induced to depart from the path of virtue by the use of some
species of arts, persuasions and wiles, which are calculated to have and do have that effect,
and which result in her ultimately submitting her person to the sexual embraces of her seducer
(27 Phil. 123).

And in American Jurisprudence we find:

 On the other hand, in an action by the woman, the enticement, persuasion or deception is the
essence of the injury; and a mere proof of intercourse is insufficient to warrant a recover.

Accordingly it is not seduction where the willingness arises out of sexual desire or curiosity of
the female, and the defendant merely affords her the needed opportunity for the commission of
the act. It has been emphasized that to allow a recovery in all such cases would tend to the
demoralization of the female sex, and would be a reward for unchastity by which a class of
adventuresses would be swift to profit." (47 Am. Jur. 662)

Bearing these principles in mind, let us examine the complaint. The material allegations there are as
follows:

I. That the plaintiff is of legal age, single, and residing at 56 South E. Diliman, Quezon City, while
defendant is also of legal age, single and residing at 525 Padre Faura, Manila, where he may
be served with summons;

II. That the plaintiff and the defendant became acquainted with each other sometime in
December, 1957 and soon thereafter, the defendant started visiting and courting the plaintiff;

III. That the defendant's visits were regular and frequent and in due time the defendant
expressed and professed his undying love and affection for the plaintiff who also in due time
reciprocated the tender feelings;

IV. That in the course of their engagement, the plaintiff and the defendant as are wont of young
people in love had frequent outings and dates, became very close and intimate to each other
and sometime in July, 1958, in consideration of the defendant's promises of marriage, the
plaintiff consented and acceded to the former's earnest and repeated pleas to have carnal
knowledge with him;

V. That subsequent thereto and regularly until about July, 1959 except for a short period in
December, 1958 when the defendant was out of the country, the defendant through his
protestations of love and promises of marriage succeeded in having carnal knowledge with the
plaintiff;

VI. That as a result of their intimate relationship, the plaintiff started conceiving which was
confirmed by a doctor sometime in July, 1959;

VII. That upon being certain of her pregnant condition, the plaintiff informed the defendant and
pleaded with him to make good his promises of marriage, but instead of honoring his promises
and righting his wrong, the defendant stopped and refrained from seeing the plaintiff since about
July, 1959 has not visited the plaintiff and to all intents and purposes has broken their
engagement and his promises.

Over and above the partisan allegations, the facts stand out that for one whole year, from 1958 to 1959,
the plaintiff-appellee, a woman of adult age, maintained intimate sexual relations with appellant, with
repeated acts of intercourse. Such conduct is incompatible with the idea of seduction. Plainly there is
here voluntariness and mutual passion; for had the appellant been deceived, had she surrendered
exclusively because of the deceit, artful persuasions and wiles of the defendant, she would not have
again yielded to his embraces, much less for one year, without exacting early fulfillment of the alleged
promises of marriage, and would have cut chart all sexual relations upon finding that defendant did not
intend to fulfill his promises. Hence, we conclude that no case is made under Article 21 of the Civil
Code, and no other cause of action being alleged, no error was committed by the Court of First Instance
in dismissing the complaint.

Of course, the dismissal must be understood as without prejudice to whatever actions may correspond
to the child of the plaintiff against the defendant-appellant, if any. On that point, this Court makes no
pronouncement, since the child's own rights are not here involved.

FOR THE FOREGOING REASONS, the decision of the Court of Appeals is reversed, and that of the
Court of First Instance is affirmed. No costs.
 LORETA SERRANO v. THE COURT OF APPEALS G.R. No. 45125; April 22, 1991

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 45125 April 22, 1991

LORETA SERRANO, petitioner,

vs.
COURT OF APPEALS and LONG LIFE PAWNSHOP, INC., respondents.

Cecilio D. Ignacio for petitioner.

Hildawa & Gomez for private respondent.

RESOLUTION

FELICIANO, J.:

Sometime in early March 1968, petitioner Loreta Serrano bought some pieces of jewelry for P48,500.00
from Niceta Ribaya. On 21 March 1968, petitioner, then in need of money, instructed her private
secretary, Josefina Rocco, to pawn the jewelry. Josefina Rocco went to private respondent Long Life
Pawnshop, Inc. ("Long Life"), pledged the jewelry for P22,000.00 with its principal owner and General
Manager, Yu An Kiong, and then absconded with said amount and the pawn ticket. The pawnshop
ticket issued to Josefina Rocco stipulated that it was redeemable "on presentation by the bearer."

Three (3) months later, Gloria Duque and Amalia Celeste informed Niceta Ribaya that a pawnshop
ticket issued by private respondent was being offered for sale. They told Niceta the ticket probably
covered jewelry once owned by the latter which jewelry had been pawned by one Josefina Rocco.
Suspecting that it was the same jewelry she had sold to petitioner, Niceta informed the latter of this
offer and suggested that petitioner go to the Long Life pawnshop to check the matter out. Petitioner
claims she went to private respondent pawnshop, verified that indeed her missing jewelry was pledged
there and told Yu An Kiong not to permit anyone to redeem the jewelry because she was the lawful
owner thereof. Petitioner claims that Yu An Kiong agreed.

On 9 July 1968, petitioner went to the Manila Police Department to report the loss, and a complaint first
for qualified theft and later changed to estafa was subsequently filed against Josefina Rocco. On the
same date, Detective Corporal Oswaldo Mateo of the Manila Police also claims to have gone to the
pawnshop, showed Yu An Kiong petitioner's report and left the latter a note asking him to hold the
jewelry and notify the police in case some one should redeem the same. The next day, on 10 July 1968,
Yu An Kiong permitted one Tomasa de Leon, exhibiting the appropriate pawnshop ticket, to redeem
the jewelry.

On 4 October 1968, petitioner filed a complaint with the then Court of First Instance of Manila for
damages against private respondent Long Life for failure to hold the jewelry and for allowing its
redemption without first notifying petitioner or the police. After trial, the trial judge, Hon. Luis B. Reyes,
rendered a decision in favor of petitioner, awarding her P26,500.00 as actual damages, with legal
interest thereon from the date of the filing of the complaint, P2,000.00 as attorney's fees, and the costs
of the suit.

Judge L.B. Reyes' decision was reversed on appeal and the complaint dismissed by the public
respondent Court of Appeals in a Decision promulgated on 26 September 1976.

The Court of Appeals gave credence to Yu An Kiong's testimony that neither petitioner nor Detective
Mateo ever apprised him of the misappropriation of petitioner's loan, or obtained a commitment from
him not to permit redemption of the jewelry, prior to 10 July 1968. Yu An Kiong claims to have become
aware of the loan's misappropriation only on 16 August 1968 when a subpoena duces tecum was
served by the Manila Fiscal's Office requiring him to bring the record of the pledge in connection with
the preliminary investigation of the estafa charge against Josefina Rocco. Consequently, the appellate
court ruled, there could have been no negligence, much less a grave one amounting to bad faith,
imputable to Yu An Kiong as the basis for an award of damages.

In this Petition for Review, petitioner seeks reversal of the Public respondent's findings relating to the
credibility of witnesses and the restoration of the trial court's decision.

Deliberating on the present Petition for Review, the Court considers that the public respondent Court
of Appeals committed reversible error in rendering its questioned Decision.

It is a settled principle of civil procedure that the conclusions of the trial court regarding the credibility
of witnesses are entitled to great respect from the appellate courts because the trial court had an
opportunity to observe the demeanor of witnesses while giving testimony which may indicate their
candor or lack thereof.1 While the Supreme Court ordinarily does not rule on the issue of credibility of
witnesses, that being a question of fact not properly raised in a petition under Rule 45, the Court has
undertaken to do so in exceptional situations where, for instance, as here, the trial court and the Court
of Appeals arrived at divergent conclusions on questions of fact and the credibility of witnesses. 2

The Court of Appeals rejected what it considered to be the incredible testimony of petitioner and
Detective Mateo. It faulted petitioner for failing to report to the police authorities the loss of her jewelry
immediately on 21 March 1968 when Josefina Rocco failed to return to her either the loan proceeds or
the jewelry. But it must be noted that Josefina Rocco simply disappeared without a trace on said date.
Petitioner had no way of knowing if Josefina had misappropriated her jewelry, or had first pledged the
jewelry as instructed and then misappropriated the proceeds of the loan. In the latter case, which was
in fact what had occurred, petitioner could have had no idea as to the identity of the pawnbroker.
Moreover, this Court has several times recognized that different people may have diverse reasons for
failing to report promptly to the police their having been victimized by some criminal or fraudulent
scheme and that such failure does not by itself render their subsequent testimony unworthy of
credence.3

The Court of Appeals also found it hard to believe that Detective Mateo had failed to obtain a written
acknowledgment from Yu An Kiong of the receipt of the note as corroboration for his testimony.
However, absent evidence that it was an established practice for police officers to obtain such
acknowledgment in situations like the one here, it is difficult to see why Detective Mateo's behavior
should be considered unbelievable. On the other hand, as the trial court pointed out, it would not have
been sensible for Detective Mateo to leave a note reminding Yu An Kiong to hold unto the jewelry if the
latter had in fact then told the policeman that the jewelry had already been redeemed.

The public respondent apparently believed petitioner had failed to establish her ownership of the jewelry
pledged by Josefina Rocco, such failure purportedly engendering doubt that Tomasa de Leon may
have redeemed jewelry different from that owned by petitioner. This is curious and untenable because
the record on appeal indicates that Yu An Kiong had admitted in his answer and memorandum before
the trial court that he received pledged jewelry from Josefina Rocco and, in his memorandum, that such
jewelry had been entrusted to Josefina by petitioner as the latter's employer. It is clear from these
judicial admissions that he considered petitioner to have been the true owner of the jewelry.

Finally, the Court of Appeals did not believe petitioner's testimony because of a claimed material
inconsistency therein.1âwphi1 On direct examination, petitioner said she "immediately" went to the
private respondent's establishment upon being informed by Niceta Ribaya of the possible whereabouts
of her jewelry. On cross-examination, she said she went to the establishment "a few days later." If this
is an inconsistency, it relates to an unimportant detail. What is clear is that in any event, petitioner
testified that she went to the respondent's pawnshop to meet Yu An Kiong and notify him of the
misappropriation before anyone had redeemed the jewelry.

We must also note that the Court of Appeals apparently over-looked a fact of substance which did not
escape the attention of the trial court. Petitioner's version of events was corroborated by Police
Detective Mateo and by Niceta Ribaya. These were two (2) individuals who had nothing to gain from
the outcome of the case. Certainly, their disinterested testimony should have been accorded more
probative weight than the negative, uncorroborated and self-serving testimony of Yu An Kiong, which
presented a diametrically opposed version of events calculated to show that in permitting redemption
of the jewelry, he was acting in good faith.4

The testimony of Detective Mateo was moreover supported by the presumption that he had acted in
the regular performance of his official duty as a police officer, a presumption that Yu An Kiong did not
try to rebut.

This being a civil case, it was enough for petitioner to show, by a preponderance of evidence, that her
version of events did in fact occur. We agree with the trial court that this burden of proof had been
discharged by petitioner because her evidence was direct and more credible and persuasive than that
propounded by Yu An Kiong,5 and corroborated by disinterested witnesses.

Turning to the substantive legal rights and duties of the parties, we believe and so hold that, having
been notified by petitioner and the police that jewelry pawned to it was either stolen or involved in an
embezzlement of the proceeds of the pledge, private respondent pawnbroker became duty bound to
hold the things pledged and to give notice to petitioner and the police of any effort to redeem them.
Such a duty was imposed by Article 21 of the Civil Code.6 The circumstance that the pawn ticket stated
that the pawn was redeemable by the bearer, did not dissolve that duty. The pawn ticket was not a
negotiable instrument under the Negotiable Instruments Law nor a negotiable document of title under
Articles 1507 et seq. of the Civil Code. If the third person Tomasa de Leon, who redeemed the things
pledged a day after petitioner and the police had notified Long Life, claimed to be owner thereof, the
prudent recourse of the pawnbroker was to file an interpleader suit, impleading both petitioner and
Tomasa de Leon. The respondent pawnbroker was, of course, entitled to demand payment of the loan
extended on the security of the pledge before surrendering the jewelry, upon the assumption that it had
given the loan in good faith and was not a "fence" for stolen articles and had not conspired with the
faithless Josefina Rocco or with Tomasa de Leon. Respondent pawnbroker acted in reckless disregard
of that duty in the instant case and must bear the consequences, without prejudice to its right to recover
damages from Josefina Rocco.

The trial court correctly held that private respondent was liable to petitioner for actual damages which
corresponded to the difference in the value of the jewelry (P48,500.00) and the amount of the loan
(P22,000.00), or the sum of P26,500.00. Petitioner is entitled to collect the balance of the value of the
jewelry, corresponding to the amount of the loan, in an appropriate action against Josefina Rocco.
Private respondent Long Life in turn is entitled to seek reimbursement from Josefina Rocco of the
amount of the damages it must pay to petitioner.

ACCORDINGLY, the Petition is GRANTED. The Decision of the Court of Appeals dated 23 September
1976 is hereby REVERSED and SET ASIDE. The Decision of the Court of First Instance dated 22 May
1970 is hereby REINSTATED in toto. No pronouncement as to costs.
ABS-CBN BROADCASTING CORPORATION vs. COURT OF APPEALS G.R. No. 128690; January
21, 1999

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 128690 January 21, 1999

ABS-CBN BROADCASTING CORPORATION, petitioner,

vs.
HONORABLE COURT OF APPEALS, REPUBLIC BROADCASTING CORP, VIVA PRODUCTION,
INC., and VICENTE DEL ROSARIO, respondents.

DAVIDE, JR., CJ.:

In this petition for review on certiorari, petitioner ABS-CBN Broadcasting Corp. (hereafter ABS-CBN)
seeks to reverse and set aside the decision 1 of 31 October 1996 and the resolution 2 of 10 March 1997
of the Court of Appeals in CA-G.R. CV No. 44125. The former affirmed with modification the
decision 3 of 28 April 1993 of the Regional Trial Court (RTC) of Quezon City, Branch 80, in Civil Case
No. Q-92-12309. The latter denied the motion to reconsider the decision of 31 October 1996.

The antecedents, as found by the RTC and adopted by the Court of Appeals, are as follows:

In 1990, ABS-CBN and Viva executed a Film Exhibition Agreement (Exh. "A") whereby
Viva gave ABS-CBN an exclusive right to exhibit some Viva films. Sometime in December
1991, in accordance with paragraph 2.4 [sic] of said agreement stating that —.

1.4 ABS-CBN shall have the right of first refusal to the next twenty-four (24) Viva films for
TV telecast under such terms as may be agreed upon by the parties hereto, provided,
however, that such right shall be exercised by ABS-CBN from the actual offer in writing.

Viva, through defendant Del Rosario, offered ABS-CBN, through its vice-president Charo
Santos-Concio, a list of three(3) film packages (36 title) from which ABS-CBN may
exercise its right of first refusal under the afore-said agreement (Exhs. "1" par, 2, "2," "2-
A'' and "2-B"-Viva). ABS-CBN, however through Mrs. Concio, "can tick off only ten (10)
titles" (from the list) "we can purchase" (Exh. "3" - Viva) and therefore did not accept said
list (TSN, June 8, 1992, pp. 9-10). The titles ticked off by Mrs. Concio are not the subject
of the case at bar except the film ''Maging Sino Ka Man."

For further enlightenment, this rejection letter dated January 06, 1992 (Exh "3" - Viva) is
hereby quoted:

6 January 1992
Dear Vic,

This is not a very formal business letter I am writing to you as I would like to express my
difficulty in recommending the purchase of the three film packages you are offering ABS-
CBN.

From among the three packages I can only tick off 10 titles we can purchase. Please see
attached. I hope you will understand my position. Most of the action pictures in the list do
not have big action stars in the cast. They are not for primetime. In line with this I wish to
mention that I have not scheduled for telecast several action pictures in out very first
contract because of the cheap production value of these movies as well as the lack of big
action stars. As a film producer, I am sure you understand what I am trying to say as Viva
produces only big action pictures.

In fact, I would like to request two (2) additional runs for these movies as I can only
schedule them in our non-primetime slots. We have to cover the amount that was paid
for these movies because as you very well know that non-primetime advertising rates are
very low. These are the unaired titles in the first contract.

1. Kontra Persa [sic].

2. Raider Platoon.

3. Underground guerillas

4. Tiger Command

5. Boy de Sabog

6. Lady Commando

7. Batang Matadero

8. Rebelyon

I hope you will consider this request of mine.

The other dramatic films have been offered to us before and have been rejected because
of the ruling of MTRCB to have them aired at 9:00 p.m. due to their very adult themes.

As for the 10 titles I have choosen [sic] from the 3 packages please consider including all
the other Viva movies produced last year. I have quite an attractive offer to make.

Thanking you and with my warmest regards.

(Signed)

Charo Santos-
Concio
 On February 27, 1992, defendant Del Rosario approached ABS-CBN's Ms. Concio, with
a list consisting of 52 original movie titles (i.e. not yet aired on television) including the 14
titles subject of the present case, as well as 104 re-runs (previously aired on television)
from which ABS-CBN may choose another 52 titles, as a total of 156 titles, proposing to
sell to ABS-CBN airing rights over this package of 52 originals and 52 re-runs for
P60,000,000.00 of which P30,000,000.00 will be in cash and P30,000,000.00 worth of
television spots (Exh. "4" to "4-C" Viva; "9" -Viva).

On April 2, 1992, defendant Del Rosario and ABS-CBN general manager, Eugenio Lopez
III, met at the Tamarind Grill Restaurant in Quezon City to discuss the package proposal
of Viva. What transpired in that lunch meeting is the subject of conflicting versions. Mr.
Lopez testified that he and Mr. Del Rosario allegedly agreed that ABS-CRN was granted
exclusive film rights to fourteen (14) films for a total consideration of P36 million; that he
allegedly put this agreement as to the price and number of films in a "napkin'' and signed
it and gave it to Mr. Del Rosario (Exh. D; TSN, pp. 24-26, 77-78, June 8, 1992). On the
other hand, Del Rosario denied having made any agreement with Lopez regarding the 14
Viva films; denied the existence of a napkin in which Lopez wrote something; and insisted
that what he and Lopez discussed at the lunch meeting was Viva's film package offer of
104 films (52 originals and 52 re-runs) for a total price of P60 million. Mr. Lopez promising
[sic]to make a counter proposal which came in the form of a proposal contract Annex "C"
of the complaint (Exh. "1"·- Viva; Exh. "C" - ABS-CBN).

On April 06, 1992, Del Rosario and Mr. Graciano Gozon of RBS Senior vice-president for
Finance discussed the terms and conditions of Viva's offer to sell the 104 films, after the
rejection of the same package by ABS-CBN.

On April 07, 1992, defendant Del Rosario received through his secretary, a handwritten
note from Ms. Concio, (Exh. "5" - Viva), which reads: "Here's the draft of the contract. I
hope you find everything in order," to which was attached a draft exhibition agreement
(Exh. "C''- ABS-CBN; Exh. "9" - Viva, p. 3) a counter-proposal covering 53 films, 52 of
which came from the list sent by defendant Del Rosario and one film was added by Ms.
Concio, for a consideration of P35 million. Exhibit "C" provides that ABS-CBN is granted
films right to 53 films and contains a right of first refusal to "1992 Viva Films." The said
counter proposal was however rejected by Viva's Board of Directors [in the] evening of
the same day, April 7, 1992, as Viva would not sell anything less than the package of 104
films for P60 million pesos (Exh. "9" - Viva), and such rejection was relayed to Ms. Concio.

On April 29, 1992, after the rejection of ABS-CBN and following several negotiations and
meetings defendant Del Rosario and Viva's President Teresita Cruz, in consideration of
P60 million, signed a letter of agreement dated April 24, 1992. granting RBS the exclusive
right to air 104 Viva-produced and/or acquired films (Exh. "7-A" - RBS; Exh. "4" - RBS)
including the fourteen (14) films subject of the present case. 4

On 27 May 1992, ABS-CBN filed before the RTC a complaint for specific performance with a prayer for
a writ of preliminary injunction and/or temporary restraining order against private respondents Republic
Broadcasting Corporation 5 (hereafter RBS ), Viva Production (hereafter VIVA), and Vicente Del
Rosario. The complaint was docketed as Civil Case No. Q-92-12309.

On 27 May 1992, RTC issued a temporary restraining order 6 enjoining private respondents from
proceeding with the airing, broadcasting, and televising of the fourteen VIVA films subject of the
controversy, starting with the film Maging Sino Ka Man, which was scheduled to be shown on private
respondents RBS' channel 7 at seven o'clock in the evening of said date.
On 17 June 1992, after appropriate proceedings, the RTC issued an
7
order directing the issuance of a writ of preliminary injunction upon ABS-CBN's posting of P35 million
bond. ABS-CBN moved for the reduction of the bond, 8 while private respondents moved for
reconsideration of the order and offered to put up a counterbound. 9
10
In the meantime, private respondents filed separate answers with counterclaim. RBS also set up a
cross-claim against VIVA..

On 3 August 1992, the RTC issued an order 11 dissolving the writ of preliminary injunction upon the
posting by RBS of a P30 million counterbond to answer for whatever damages ABS-CBN might suffer
by virtue of such dissolution. However, it reduced petitioner's injunction bond to P15 million as a
condition precedent for the reinstatement of the writ of preliminary injunction should private respondents
be unable to post a counterbond.

At the pre-trial 12 on 6 August 1992, the parties, upon suggestion of the court, agreed to explore the
possibility of an amicable settlement. In the meantime, RBS prayed for and was granted reasonable
time within which to put up a P30 million counterbond in the event that no settlement would be reached.

As the parties failed to enter into an amicable settlement RBS posted on 1 October 1992 a counterbond,
which the RTC approved in its Order of 15 October 1992. 13

On 19 October 1992, ABS-CBN filed a motion for reconsideration 14 of the 3 August and 15 October
1992 Orders, which RBS opposed. 15

On 29 October 1992, the RTC conducted a pre-trial. 16

Pending resolution of its motion for reconsideration, ABS-CBN filed with the Court of Appeals a
petition17 challenging the RTC's Orders of 3 August and 15 October 1992 and praying for the issuance
of a writ of preliminary injunction to enjoin the RTC from enforcing said orders. The case was docketed
as CA-G.R. SP No. 29300.

On 3 November 1992, the Court of Appeals issued a temporary restraining order 18 to enjoin the airing,
broadcasting, and televising of any or all of the films involved in the controversy.

On 18 December 1992, the Court of Appeals promulgated a decision 19 dismissing the petition in CA -
G.R. No. 29300 for being premature. ABS-CBN challenged the dismissal in a petition for review filed
with this Court on 19 January 1993, which was docketed as G.R. No. 108363.

In the meantime the RTC received the evidence for the parties in Civil Case No. Q-192-1209.
Thereafter, on 28 April 1993, it rendered a decision 20 in favor of RBS and VIVA and against ABS-CBN
disposing as follows:

WHEREFORE, under cool reflection and prescinding from the foregoing, judgments is
rendered in favor of defendants and against the plaintiff.

(1) The complaint is hereby dismissed;

(2) Plaintiff ABS-CBN is ordered to pay defendant RBS the following:

 a) P107,727.00, the amount of premium paid by RBS to the
surety which issued defendant RBS's bond to lift the
injunction;

b) P191,843.00 for the amount of print advertisement for

"Maging Sino Ka Man" in various newspapers;

c) Attorney's fees in the amount of P1 million;

d) P5 million as and by way of moral damages;

e) P5 million as and by way of exemplary damages;

(3) For defendant VIVA, plaintiff ABS-CBN is ordered to pay P212,000.00

by way of reasonable attorney's fees.

(4) The cross-claim of defendant RBS against defendant VIVA is dismissed.

(5) Plaintiff to pay the costs.

According to the RTC, there was no meeting of minds on the price and terms of the offer. The alleged
agreement between Lopez III and Del Rosario was subject to the approval of the VIVA Board of
Directors, and said agreement was disapproved during the meeting of the Board on 7 April 1992.
Hence, there was no basis for ABS-CBN's demand that VIVA signed the 1992 Film Exhibition
Agreement. Furthermore, the right of first refusal under the 1990 Film Exhibition Agreement had
previously been exercised per Ms. Concio's letter to Del Rosario ticking off ten titles acceptable to them,
which would have made the 1992 agreement an entirely new contract.

On 21 June 1993, this Court denied 21 ABS-CBN's petition for review in G.R. No. 108363, as no
reversible error was committed by the Court of Appeals in its challenged decision and the case had
"become moot and academic in view of the dismissal of the main action by the court a quo in its
decision" of 28 April 1993.

Aggrieved by the RTC's decision, ABS-CBN appealed to the Court of Appeals claiming that there was
a perfected contract between ABS-CBN and VIVA granting ABS-CBN the exclusive right to exhibit the
subject films. Private respondents VIVA and Del Rosario also appealed seeking moral and exemplary
damages and additional attorney's fees.

In its decision of 31 October 1996, the Court of Appeals agreed with the RTC that the contract between
ABS-CBN and VIVA had not been perfected, absent the approval by the VIVA Board of Directors of
whatever Del Rosario, it's agent, might have agreed with Lopez III. The appellate court did not even
believe ABS-CBN's evidence that Lopez III actually wrote down such an agreement on a "napkin," as
the same was never produced in court. It likewise rejected ABS-CBN's insistence on its right of first
refusal and ratiocinated as follows:

As regards the matter of right of first refusal, it may be true that a Film Exhibition
Agreement was entered into between Appellant ABS-CBN and appellant VIVA under
Exhibit "A" in 1990, and that parag. 1.4 thereof provides:

1.4 ABS-CBN shall have the right of first refusal to the next twenty-four (24)
VIVA films for TV telecast under such terms as may be agreed upon by the
 parties hereto, provided, however, that such right shall be exercised by
ABS-CBN within a period of fifteen (15) days from the actual offer in writing
(Records, p. 14).

[H]owever, it is very clear that said right of first refusal in favor of ABS-CBN shall still be
subject to such terms as may be agreed upon by the parties thereto, and that the said
right shall be exercised by ABS-CBN within fifteen (15) days from the actual offer in
writing.

Said parag. 1.4 of the agreement Exhibit "A" on the right of first refusal did not fix the price
of the film right to the twenty-four (24) films, nor did it specify the terms thereof. The same
are still left to be agreed upon by the parties.

In the instant case, ABS-CBN's letter of rejection Exhibit 3 (Records, p. 89) stated that it
can only tick off ten (10) films, and the draft contract Exhibit "C" accepted only fourteen
(14) films, while parag. 1.4 of Exhibit "A'' speaks of the next twenty-four (24) films.

The offer of V1VA was sometime in December 1991 (Exhibits 2, 2-A. 2-B; Records, pp.
86-88; Decision, p. 11, Records, p. 1150), when the first list of VIVA films was sent by Mr.
Del Rosario to ABS-CBN. The Vice President of ABS-CBN, Ms. Charo Santos-Concio,
sent a letter dated January 6, 1992 (Exhibit 3, Records, p. 89) where ABS-CBN exercised
its right of refusal by rejecting the offer of VIVA.. As aptly observed by the trial court, with
the said letter of Mrs. Concio of January 6, 1992, ABS-CBN had lost its right of first refusal.
And even if We reckon the fifteen (15) day period from February 27, 1992 (Exhibit 4 to 4-
C) when another list was sent to ABS-CBN after the letter of Mrs. Concio, still the fifteen
(15) day period within which ABS-CBN shall exercise its right of first refusal has already
expired.22

Accordingly, respondent court sustained the award of actual damages consisting in the cost of print
advertisements and the premium payments for the counterbond, there being adequate proof of the
pecuniary loss which RBS had suffered as a result of the filing of the complaint by ABS-CBN. As to the
award of moral damages, the Court of Appeals found reasonable basis therefor, holding that RBS's
reputation was debased by the filing of the complaint in Civil Case No. Q-92-12309 and by the non-
showing of the film "Maging Sino Ka Man." Respondent court also held that exemplary damages were
correctly imposed by way of example or correction for the public good in view of the filing of the
complaint despite petitioner's knowledge that the contract with VIVA had not been perfected, It also
upheld the award of attorney's fees, reasoning that with ABS-CBN's act of instituting Civil Case No, Q-
92-1209, RBS was "unnecessarily forced to litigate." The appellate court, however, reduced the awards
of moral damages to P2 million, exemplary damages to P2 million, and attorney's fees to P500, 000.00.

On the other hand, respondent Court of Appeals denied VIVA and Del Rosario's appeal because it was
"RBS and not VIVA which was actually prejudiced when the complaint was filed by ABS-CBN."

Its motion for reconsideration having been denied, ABS-CBN filed the petition in this case, contending
that the Court of Appeals gravely erred in

. . . RULING THAT THERE WAS NO PERFECTED CONTRACT BETWEEN

PETITIONER AND PRIVATE RESPONDENT VIVA NOTWITHSTANDING
PREPONDERANCE OF EVIDENCE ADDUCED BY PETITIONER TO THE CONTRARY.
 II

. . . IN AWARDING ACTUAL AND COMPENSATORY DAMAGES IN FAVOR OF

PRIVATE RESPONDENT RBS.

III

. . . IN AWARDING MORAL AND EXEMPLARY DAMAGES IN FAVOR OF PRIVATE

RESPONDENT RBS.

IV

. . . IN AWARDING ATTORNEY'S FEES IN FAVOR OF RBS.

ABS-CBN claims that it had yet to fully exercise its right of first refusal over twenty-four titles under the
1990 Film Exhibition Agreement, as it had chosen only ten titles from the first list. It insists that we give
credence to Lopez's testimony that he and Del Rosario met at the Tamarind Grill Restaurant, discussed
the terms and conditions of the second list (the 1992 Film Exhibition Agreement) and upon agreement
thereon, wrote the same on a paper napkin. It also asserts that the contract has already been effective,
as the elements thereof, namely, consent, object, and consideration were established. It then concludes
that the Court of Appeals' pronouncements were not supported by law and jurisprudence, as per our
decision of 1 December 1995 in Limketkai Sons Milling, Inc. v. Court of Appeals, 23 which cited Toyota
Shaw, Inc. v. Court of Appeals, 24 Ang Yu Asuncion v. Court of Appeals, 25 and Villonco Realty
Company v. Bormaheco. Inc.26

Anent the actual damages awarded to RBS, ABS-CBN disavows liability therefor. RBS spent for the
premium on the counterbond of its own volition in order to negate the injunction issued by the trial court
after the parties had ventilated their respective positions during the hearings for the purpose. The filing
of the counterbond was an option available to RBS, but it can hardly be argued that ABS-CBN
compelled RBS to incur such expense. Besides, RBS had another available option, i.e., move for the
dissolution or the injunction; or if it was determined to put up a counterbond, it could have presented a
cash bond. Furthermore under Article 2203 of the Civil Code, the party suffering loss or injury is also
required to exercise the diligence of a good father of a family to minimize the damages resulting from
the act or omission. As regards the cost of print advertisements, RBS had not convincingly established
that this was a loss attributable to the non showing "Maging Sino Ka Man"; on the contrary, it was
brought out during trial that with or without the case or the injunction, RBS would have spent such an
amount to generate interest in the film.

ABS-CBN further contends that there was no clear basis for the awards of moral and exemplary
damages. The controversy involving ABS-CBN and RBS did not in any way originate from business
transaction between them. The claims for such damages did not arise from any contractual dealings or
from specific acts committed by ABS-CBN against RBS that may be characterized as wanton,
fraudulent, or reckless; they arose by virtue only of the filing of the complaint, An award of moral and
exemplary damages is not warranted where the record is bereft of any proof that a party acted
maliciously or in bad faith in filing an action. 27 In any case, free resort to courts for redress of wrongs
is a matter of public policy. The law recognizes the right of every one to sue for that which he honestly
believes to be his right without fear of standing trial for damages where by lack of sufficient evidence,
legal technicalities, or a different interpretation of the laws on the matter, the case would lose
ground. 28 One who makes use of his own legal right does no injury. 29 If damage results front the filing
of the complaint, it is damnum absque injuria. 30 Besides, moral damages are generally not awarded in
favor of a juridical person, unless it enjoys a good reputation that was debased by the offending party
resulting in social humiliation.31
As regards the award of attorney's fees, ABS-CBN maintains that the same had no factual, legal, or
equitable justification. In sustaining the trial court's award, the Court of Appeals acted in clear disregard
of the doctrines laid down in Buan v. Camaganacan 32 that the text of the decision should state the
reason why attorney's fees are being awarded; otherwise, the award should be disallowed. Besides,
no bad faith has been imputed on, much less proved as having been committed by, ABS-CBN. It has
been held that "where no sufficient showing of bad faith would be reflected in a party' s persistence in
a case other than an erroneous conviction of the righteousness of his cause, attorney's fees shall not
be recovered as cost." 33

On the other hand, RBS asserts that there was no perfected contract between ABS-CBN and VIVA
absent any meeting of minds between them regarding the object and consideration of the alleged
contract. It affirms that the ABS-CBN's claim of a right of first refusal was correctly rejected by the trial
court. RBS insist the premium it had paid for the counterbond constituted a pecuniary loss upon which
it may recover. It was obliged to put up the counterbound due to the injunction procured by ABS-CBN.
Since the trial court found that ABS-CBN had no cause of action or valid claim against RBS and,
therefore not entitled to the writ of injunction, RBS could recover from ABS-CBN the premium paid on
the counterbond. Contrary to the claim of ABS-CBN, the cash bond would prove to be more expensive,
as the loss would be equivalent to the cost of money RBS would forego in case the P30 million came
from its funds or was borrowed from banks.

RBS likewise asserts that it was entitled to the cost of advertisements for the cancelled showing of the
film "Maging Sino Ka Man" because the print advertisements were put out to announce the showing on
a particular day and hour on Channel 7, i.e., in its entirety at one time, not a series to be shown on a
periodic basis. Hence, the print advertisement were good and relevant for the particular date showing,
and since the film could not be shown on that particular date and hour because of the injunction, the
expenses for the advertisements had gone to waste.

As regards moral and exemplary damages, RBS asserts that ABS-CBN filed the case and secured
injunctions purely for the purpose of harassing and prejudicing RBS. Pursuant then to Article 19 and
21 of the Civil Code, ABS-CBN must be held liable for such damages. Citing Tolentino,34 damages may
be awarded in cases of abuse of rights even if the act done is not illicit and there is abuse of rights were
plaintiff institutes and action purely for the purpose of harassing or prejudicing the defendant.

In support of its stand that a juridical entity can recover moral and exemplary damages, private
respondents RBS cited People v. Manero,35 where it was stated that such entity may recover moral
and exemplary damages if it has a good reputation that is debased resulting in social humiliation. it
then ratiocinates; thus:

There can be no doubt that RBS' reputation has been debased by ABS-CBN's acts in this
case. When RBS was not able to fulfill its commitment to the viewing public to show the
film "Maging Sino Ka Man" on the scheduled dates and times (and on two occasions that
RBS advertised), it suffered serious embarrassment and social humiliation. When the
showing was canceled, late viewers called up RBS' offices and subjected RBS to verbal
abuse ("Announce kayo nang announce, hindi ninyo naman ilalabas," "nanloloko yata
kayo") (Exh. 3-RBS, par. 3). This alone was not something RBS brought upon itself. it
was exactly what ABS-CBN had planned to happen.

The amount of moral and exemplary damages cannot be said to be excessive. Two
reasons justify the amount of the award.

The first is that the humiliation suffered by RBS is national extent. RBS operations as a
broadcasting company is [sic] nationwide. Its clientele, like that of ABS-CBN, consists of
 those who own and watch television. It is not an exaggeration to state, and it is a matter
of judicial notice that almost every other person in the country watches television. The
humiliation suffered by RBS is multiplied by the number of televiewers who had
anticipated the showing of the film "Maging Sino Ka Man" on May 28 and November 3,
1992 but did not see it owing to the cancellation. Added to this are the advertisers who
had placed commercial spots for the telecast and to whom RBS had a commitment in
consideration of the placement to show the film in the dates and times specified.

The second is that it is a competitor that caused RBS to suffer the humiliation. The
humiliation and injury are far greater in degree when caused by an entity whose ultimate
business objective is to lure customers (viewers in this case) away from the
competition. 36

For their part, VIVA and Vicente del Rosario contend that the findings of fact of the trial court and the
Court of Appeals do not support ABS-CBN's claim that there was a perfected contract. Such factual
findings can no longer be disturbed in this petition for review under Rule 45, as only questions of law
can be raised, not questions of fact. On the issue of damages and attorneys fees, they adopted the
arguments of RBS.

The key issues for our consideration are (1) whether there was a perfected contract between VIVA and
ABS-CBN, and (2) whether RBS is entitled to damages and attorney's fees. It may be noted that the
award of attorney's fees of P212,000 in favor of VIVA is not assigned as another error.

I.

The first issue should be resolved against ABS-CBN. A contract is a meeting of minds between two
persons whereby one binds himself to give something or to render some service to another 37 for a
consideration. there is no contract unless the following requisites concur: (1) consent of the contracting
parties; (2) object certain which is the subject of the contract; and (3) cause of the obligation, which is
established.38 A contract undergoes three stages:

(a) preparation, conception, or generation, which is the period of negotiation and

bargaining, ending at the moment of agreement of the parties;

(b) perfection or birth of the contract, which is the moment when the parties come to agree
on the terms of the contract; and

(c) consummation or death, which is the fulfillment or performance of the terms agreed
upon in the contract. 39

Contracts that are consensual in nature are perfected upon mere meeting of the minds, Once there is
concurrence between the offer and the acceptance upon the subject matter, consideration, and terms
of payment a contract is produced. The offer must be certain. To convert the offer into a contract, the
acceptance must be absolute and must not qualify the terms of the offer; it must be plain, unequivocal,
unconditional, and without variance of any sort from the proposal. A qualified acceptance, or one that
involves a new proposal, constitutes a counter-offer and is a rejection of the original offer.
Consequently, when something is desired which is not exactly what is proposed in the offer, such
acceptance is not sufficient to generate consent because any modification or variation from the terms
of the offer annuls the offer.40

When Mr. Del Rosario of VIVA met with Mr. Lopez of ABS-CBN at the Tamarind Grill on 2 April 1992
to discuss the package of films, said package of 104 VIVA films was VIVA's offer to ABS-CBN to enter
into a new Film Exhibition Agreement. But ABS-CBN, sent, through Ms. Concio, a counter-proposal in
the form of a draft contract proposing exhibition of 53 films for a consideration of P35 million. This
counter-proposal could be nothing less than the counter-offer of Mr. Lopez during his conference with
Del Rosario at Tamarind Grill Restaurant. Clearly, there was no acceptance of VIVA's offer, for it was
met by a counter-offer which substantially varied the terms of the offer.

ABS-CBN's reliance in Limketkai Sons Milling, Inc. v. Court of

41 42
Appeals and Villonco Realty Company v. Bormaheco, Inc., is misplaced. In these cases, it was
held that an acceptance may contain a request for certain changes in the terms of the offer and yet be
a binding acceptance as long as "it is clear that the meaning of the acceptance is positively and
unequivocally to accept the offer, whether such request is granted or not." This ruling was, however,
reversed in the resolution of 29 March 1996, 43 which ruled that the acceptance of all offer must be
unqualified and absolute, i.e., it "must be identical in all respects with that of the offer so as to produce
consent or meeting of the minds."

On the other hand, in Villonco, cited in Limketkai, the alleged changes in the revised counter-offer were
not material but merely clarificatory of what had previously been agreed upon. It cited the statement
in Stuart v. Franklin Life Insurance Co.44 that "a vendor's change in a phrase of the offer to purchase,
which change does not essentially change the terms of the offer, does not amount to a rejection of the
offer and the tender of a counter-offer." 45 However, when any of the elements of the contract is
modified upon acceptance, such alteration amounts to a counter-offer.

In the case at bar, ABS-CBN made no unqualified acceptance of VIVA's offer. Hence, they underwent
a period of bargaining. ABS-CBN then formalized its counter-proposals or counter-offer in a draft
contract, VIVA through its Board of Directors, rejected such counter-offer, Even if it be
conceded arguendo that Del Rosario had accepted the counter-offer, the acceptance did not bind VIVA,
as there was no proof whatsoever that Del Rosario had the specific authority to do so.

Under Corporation Code,46 unless otherwise provided by said Code, corporate powers, such as the
power; to enter into contracts; are exercised by the Board of Directors. However, the Board may
delegate such powers to either an executive committee or officials or contracted managers. The
delegation, except for the executive committee, must be for specific purposes, 47 Delegation to officers
makes the latter agents of the corporation; accordingly, the general rules of agency as to the bindings
effects of their acts would
48
apply. For such officers to be deemed fully clothed by the corporation to exercise a power of the
Board, the latter must specially authorize them to do so. That Del Rosario did not have the authority to
accept ABS-CBN's counter-offer was best evidenced by his submission of the draft contract to VIVA's
Board of Directors for the latter's approval. In any event, there was between Del Rosario and Lopez III
no meeting of minds. The following findings of the trial court are instructive:

A number of considerations militate against ABS-CBN's claim that a contract was

perfected at that lunch meeting on April 02, 1992 at the Tamarind Grill.

FIRST, Mr. Lopez claimed that what was agreed upon at the Tamarind Grill referred to
the price and the number of films, which he wrote on a napkin. However, Exhibit "C"
contains numerous provisions which, were not discussed at the Tamarind Grill, if Lopez
testimony was to be believed nor could they have been physically written on a napkin.
There was even doubt as to whether it was a paper napkin or a cloth napkin. In short what
were written in Exhibit "C'' were not discussed, and therefore could not have been agreed
upon, by the parties. How then could this court compel the parties to sign Exhibit "C" when
the provisions thereof were not previously agreed upon?
SECOND, Mr. Lopez claimed that what was agreed upon as the subject matter of the
contract was 14 films. The complaint in fact prays for delivery of 14 films. But Exhibit "C"
mentions 53 films as its subject matter. Which is which If Exhibits "C" reflected the true
intent of the parties, then ABS-CBN's claim for 14 films in its complaint is false or if what
it alleged in the complaint is true, then Exhibit "C" did not reflect what was agreed upon
by the parties. This underscores the fact that there was no meeting of the minds as to the
subject matter of the contracts, so as to preclude perfection thereof. For settled is the rule
that there can be no contract where there is no object which is its subject matter (Art.
1318, NCC).

THIRD, Mr. Lopez [sic] answer to question 29 of his affidavit testimony (Exh. "D") states:

We were able to reach an agreement. VIVA gave us the exclusive license

to show these fourteen (14) films, and we agreed to pay Viva the amount of
P16,050,000.00 as well as grant Viva commercial slots worth
P19,950,000.00. We had already earmarked this P16, 050,000.00.

which gives a total consideration of P36 million (P19,950,000.00 plus P16,050,000.00.

equals P36,000,000.00).

On cross-examination Mr. Lopez testified:

Q. What was written in this napkin?

A. The total price, the breakdown the known Viva movies, the 7 blockbuster
movies and the other 7 Viva movies because the price was broken down
accordingly. The none [sic] Viva and the seven other Viva movies and the
sharing between the cash portion and the concerned spot portion in the total
amount of P35 million pesos.

Now, which is which? P36 million or P35 million? This weakens ABS-CBN's claim.

FOURTH. Mrs. Concio, testifying for ABS-CBN stated that she transmitted Exhibit "C" to
Mr. Del Rosario with a handwritten note, describing said Exhibit "C" as a "draft." (Exh. "5"
- Viva; tsn pp. 23-24 June 08, 1992). The said draft has a well defined meaning.

Since Exhibit "C" is only a draft, or a tentative, provisional or preparatory writing prepared
for discussion, the terms and conditions thereof could not have been previously agreed
upon by ABS-CBN and Viva Exhibit "C'' could not therefore legally bind Viva, not having
agreed thereto. In fact, Ms. Concio admitted that the terms and conditions embodied in
Exhibit "C" were prepared by ABS-CBN's lawyers and there was no discussion on said
terms and conditions. . . .

As the parties had not yet discussed the proposed terms and conditions in Exhibit "C,"
and there was no evidence whatsoever that Viva agreed to the terms and conditions
thereof, said document cannot be a binding contract. The fact that Viva refused to sign
Exhibit "C" reveals only two [sic] well that it did not agree on its terms and conditions, and
this court has no authority to compel Viva to agree thereto.

FIFTH. Mr. Lopez understand [sic] that what he and Mr. Del Rosario agreed upon at the
Tamarind Grill was only provisional, in the sense that it was subject to approval by the
Board of Directors of Viva. He testified:
 Q. Now, Mr. Witness, and after that Tamarind meeting ... the second
meeting wherein you claimed that you have the meeting of the minds
between you and Mr. Vic del Rosario, what happened?

A. Vic Del Rosario was supposed to call us up and tell us specifically the
result of the discussion with the Board of Directors.

Q. And you are referring to the so-called agreement which you wrote in [sic]
a piece of paper?

A. Yes, sir.

Q. So, he was going to forward that to the board of Directors for approval?

A. Yes, sir. (Tsn, pp. 42-43, June 8, 1992)

Q. Did Mr. Del Rosario tell you that he will submit it to his Board for
approval?

A. Yes, sir. (Tsn, p. 69, June 8, 1992).

The above testimony of Mr. Lopez shows beyond doubt that he knew Mr. Del Rosario
had no authority to bind Viva to a contract with ABS-CBN until and unless its Board of
Directors approved it. The complaint, in fact, alleges that Mr. Del Rosario "is the Executive
Producer of defendant Viva" which "is a corporation." (par. 2, complaint). As a mere agent
of Viva, Del Rosario could not bind Viva unless what he did is ratified by its Board of
Directors. (Vicente vs. Geraldez, 52 SCRA 210; Arnold vs. Willets and Paterson, 44 Phil.
634). As a mere agent, recognized as such by plaintiff, Del Rosario could not be held
liable jointly and severally with Viva and his inclusion as party defendant has no legal
basis. (Salonga vs. Warner Barner [sic] , COLTA , 88 Phil. 125; Salmon vs. Tan, 36 Phil.
556).

The testimony of Mr. Lopez and the allegations in the complaint are clear admissions that
what was supposed to have been agreed upon at the Tamarind Grill between Mr. Lopez
and Del Rosario was not a binding agreement. It is as it should be because corporate
power to enter into a contract is lodged in the Board of Directors. (Sec. 23, Corporation
Code). Without such board approval by the Viva board, whatever agreement Lopez and
Del Rosario arrived at could not ripen into a valid contract binding upon Viva (Yao Ka Sin
Trading vs. Court of Appeals, 209 SCRA 763). The evidence adduced shows that the
Board of Directors of Viva rejected Exhibit "C" and insisted that the film package for 140
films be maintained (Exh. "7-1" - Viva ). 49

The contention that ABS-CBN had yet to fully exercise its right of first refusal over twenty-four films
under the 1990 Film Exhibition Agreement and that the meeting between Lopez and Del Rosario was
a continuation of said previous contract is untenable. As observed by the trial court, ABS-CBN right of
first refusal had already been exercised when Ms. Concio wrote to VIVA ticking off ten films, Thus:

[T]he subsequent negotiation with ABS-CBN two (2) months after this letter was sent,
was for an entirely different package. Ms. Concio herself admitted on cross-examination
to having used or exercised the right of first refusal. She stated that the list was not
acceptable and was indeed not accepted by ABS-CBN, (TSN, June 8, 1992, pp. 8-10).
Even Mr. Lopez himself admitted that the right of the first refusal may have been already
 exercised by Ms. Concio (as she had). (TSN, June 8, 1992, pp. 71-75). Del Rosario
himself knew and understand [sic] that ABS-CBN has lost its rights of the first refusal
when his list of 36 titles were rejected (Tsn, June 9, 1992, pp. 10-11) 50

II

However, we find for ABS-CBN on the issue of damages. We shall first take up actual damages.
Chapter 2, Title XVIII, Book IV of the Civil Code is the specific law on actual or compensatory damages.
Except as provided by law or by stipulation, one is entitled to compensation for actual damages only
for such pecuniary loss suffered by him as he has duly proved. 51 The indemnification shall comprehend
not only the value of the loss suffered, but also that of the profits that the obligee failed to obtain. 52 In
contracts and quasi-contracts the damages which may be awarded are dependent on whether the
obligor acted with good faith or otherwise, It case of good faith, the damages recoverable are those
which are the natural and probable consequences of the breach of the obligation and which the parties
have foreseen or could have reasonably foreseen at the time of the constitution of the obligation. If the
obligor acted with fraud, bad faith, malice, or wanton attitude, he shall be responsible for all damages
which may be reasonably attributed to the non-performance of the obligation. 53 In crimes and quasi-
delicts, the defendant shall be liable for all damages which are the natural and probable consequences
of the act or omission complained of, whether or not such damages has been foreseen or could have
reasonably been foreseen by the defendant.54

Actual damages may likewise be recovered for loss or impairment of earning capacity in cases of
temporary or permanent personal injury, or for injury to the plaintiff's business standing or commercial
credit.55

The claim of RBS for actual damages did not arise from contract, quasi-contract, delict, or quasi-delict.
It arose from the fact of filing of the complaint despite ABS-CBN's alleged knowledge of lack of cause
of action. Thus paragraph 12 of RBS's Answer with Counterclaim and Cross-claim under the heading
COUNTERCLAIM specifically alleges:

12. ABS-CBN filed the complaint knowing fully well that it has no cause of action RBS.
As a result thereof, RBS suffered actual damages in the amount of P6,621,195.32. 56

Needless to state the award of actual damages cannot be comprehended under the above law on
actual damages. RBS could only probably take refuge under Articles 19, 20, and 21 of the Civil Code,
which read 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.

Art. 20. Every person who, contrary to law, wilfully or negligently causes damage to
another, shall indemnify the latter for tile same.

Art. 21. Any person who wilfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy shall compensate the latter for the
damage.

It may further be observed that in cases where a writ of preliminary injunction is issued, the damages
which the defendant may suffer by reason of the writ are recoverable from the injunctive bond. 57 In this
case, ABS-CBN had not yet filed the required bond; as a matter of fact, it asked for reduction of the
bond and even went to the Court of Appeals to challenge the order on the matter, Clearly then, it was
not necessary for RBS to file a counterbond. Hence, ABS-CBN cannot be held responsible for the
premium RBS paid for the counterbond.

Neither could ABS-CBN be liable for the print advertisements for "Maging Sino Ka Man" for lack of
sufficient legal basis. The RTC issued a temporary restraining order and later, a writ of preliminary
injunction on the basis of its determination that there existed sufficient ground for the issuance thereof.
Notably, the RTC did not dissolve the injunction on the ground of lack of legal and factual basis, but
because of the plea of RBS that it be allowed to put up a counterbond.

As regards attorney's fees, the law is clear that in the absence of stipulation, attorney's fees may be
recovered as actual or compensatory damages under any of the circumstances provided for in Article
2208 of the Civil Code. 58

The general rule is that attorney's fees cannot be recovered as part of damages because of the policy
that no premium should be placed on the right to litigate. 59 They are not to be awarded every time a
party wins a suit. The power of the court to award attorney's fees under Article 2208 demands factual,
legal, and equitable justification.60 Even when claimant is compelled to litigate with third persons or to
incur expenses to protect his rights, still attorney's fees may not be awarded where no sufficient showing
of bad faith could be reflected in a party's persistence in a case other than erroneous conviction of the
righteousness of his cause. 61

As to moral damages the law is Section 1, Chapter 3, Title XVIII, Book IV of the Civil Code. Article 2217
thereof defines what are included in moral damages, while Article 2219 enumerates the cases where
they may be recovered, Article 2220 provides that moral damages may be recovered in breaches of
contract where the defendant acted fraudulently or in bad faith. RBS's claim for moral damages could
possibly fall only under item (10) of Article 2219, thereof which reads:

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

Moral damages are in the category of an award designed to compensate the claimant for actual injury
suffered. and not to impose a penalty on the wrongdoer. 62 The award is not meant to enrich the
complainant at the expense of the defendant, but to enable the injured party to obtain means, diversion,
or amusements that will serve to obviate then moral suffering he has undergone. It is aimed at the
restoration, within the limits of the possible, of the spiritual status quo ante, and should be proportionate
to the suffering inflicted.63 Trial courts must then guard against the award of exorbitant damages; they
should exercise balanced restrained and measured objectivity to avoid suspicion that it was due to
passion, prejudice, or corruption on the part of the trial court. 64

The award of moral damages cannot be granted in favor of a corporation because, being an artificial
person and having existence only in legal contemplation, it has no feelings, no emotions, no senses, It
cannot, therefore, experience physical suffering and mental anguish, which call be experienced only
by one having a nervous system. 65 The statement in People v. Manero 66 and Mambulao Lumber
Co. v. PNB 67 that a corporation may recover moral damages if it "has a good reputation that is
debased, resulting in social humiliation" is an obiter dictum. On this score alone the award for damages
must be set aside, since RBS is a corporation.

The basic law on exemplary damages is Section 5, Chapter 3, Title XVIII, Book IV of the Civil Code.
These are imposed by way of example or correction for the public good, in addition to moral, temperate,
liquidated or compensatory damages. 68 They are recoverable in criminal cases as part of the civil
liability when the crime was committed with one or more aggravating circumstances; 69 in quasi-
contracts, if the defendant acted with gross negligence; 70 and in contracts and quasi-contracts, if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. 71
It may be reiterated that the claim of RBS against ABS-CBN is not based on contract, quasi-contract,
delict, or quasi-delict, Hence, the claims for moral and exemplary damages can only be based on
Articles 19, 20, and 21 of the Civil Code.

The elements of abuse of right under Article 19 are the following: (1) the existence of a legal right or
duty, (2) which is exercised in bad faith, and (3) for the sole intent of prejudicing or injuring another.
Article 20 speaks of the general sanction for all other provisions of law which do not especially provide
for their own sanction; while Article 21 deals with acts contra bonus mores, and has the following
elements; (1) there is an act which is legal, (2) but which is contrary to morals, good custom, public
order, or public policy, and (3) and it is done with intent to injure. 72

Verily then, malice or bad faith is at the core of Articles 19, 20, and 21. Malice or bad faith implies a
conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity. 73 Such
must be substantiated by evidence. 74

There is no adequate proof that ABS-CBN was inspired by malice or bad faith. It was honestly
convinced of the merits of its cause after it had undergone serious negotiations culminating in its formal
submission of a draft contract. Settled is the rule that the adverse result of an action does not per
se make the action wrongful and subject the actor to damages, for the law could not have meant to
impose a penalty on the right to litigate. If damages result from a person's exercise of a right, it
is damnum absque injuria.75

WHEREFORE, the instant petition is GRANTED. The challenged decision of the Court of Appeals in
CA-G.R. CV No, 44125 is hereby REVERSED except as to unappealed award of attorney's fees in
favor of VIVA Productions, Inc.1âwphi1.nêt

No pronouncement as to costs.

SO ORDERED.
 CALIFORNIA CLOTHING, INC. AND MICHELLE S. YBAÑEZ v. SHIRLEY G. QUIÑONES G.R.
No.175822; October 23, 2013

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 175822 October 23, 2013

CALIFORNIA CLOTHING INC. and MICHELLE S. YBAÑEZ, Petitioners,

vs.
SHIRLEY G. QUIÑONES, Respondent.

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the ; Rules of Court are the Court of
Appeals Decision1 dated August 3, 2006 and Resolution2 dated November 14, 2006 in CA-G.R. CV
No. 80309. The assailed decision reversed and set aside the June 20, 2003 Decision 3 of the Regional
Trial Court of Cebu City (RTC), Branch 58, in Civil Case No. CEB-26984; while the assailed resolution
denied the motion for reconsideration filed by petitioner Michelle Ybañez (Ybañez).

The facts of the case, as culled from the records, are as follows:

On July 25, 2001, respondent Shirley G. Quiñones, a Reservation Ticketing Agent of Cebu Pacific Air
in Lapu Lapu City, went inside the Guess USA Boutique at the second floor of Robinson’s Department
Store (Robinson’s) in Cebu City. She fitted four items: two jeans, a blouse and a shorts, then decided
to purchase the black jeans worth ₱2,098.00. 4 Respondent allegedly paid to the cashier evidenced by
a receipt5 issued by the store.6

While she was walking through the skywalk connecting Robinson’s and Mercury Drug Store (Mercury)
where she was heading next, a Guess employee approached and informed her that she failed to pay
the item she got. She, however, insisted that she paid and showed the employee the receipt issued in
her favor.7 She then suggested that they talk about it at the Cebu Pacific Office located at the basement
of the mall. She first went to Mercury then met the Guess employees as agreed upon. 8

When she arrived at the Cebu Pacific Office, the Guess employees allegedly subjected her to
humiliation in front of the clients of Cebu Pacific and repeatedly demanded payment for the black
jeans.9 They supposedly even searched her wallet to check how much money she had, followed by
another argument. Respondent, thereafter, went home. 10

On the same day, the Guess employees allegedly gave a letter to the Director of Cebu Pacific Air
narrating the incident, but the latter refused to receive it as it did not concern the office and the same
took place while respondent was off duty.11 Another letter was allegedly prepared and was supposed
to be sent to the Cebu Pacific Office in Robinson’s, but the latter again refused to receive
it.12 Respondent also claimed that the Human Resource Department (HRD) of Robinson’s was
furnished said letter and the latter in fact conducted an investigation for purposes of canceling
respondent’s Robinson’s credit card. Respondent further claimed that she was not given a copy of said
damaging letter.13 With the above experience, respondent claimed to have suffered physical anxiety,
sleepless nights, mental anguish, fright, serious apprehension, besmirched reputation, moral shock
and social humiliation.14 She thus filed the Complaint for Damages15 before the RTC against petitioners
California Clothing, Inc. (California Clothing), Excelsis Villagonzalo (Villagonzalo), Imelda Hawayon
(Hawayon) and Ybañez. She demanded the payment of moral, nominal, and exemplary damages, plus
attorney’s fees and litigation expenses.16

In their Answer,17 petitioners and the other defendants admitted the issuance of the receipt of payment.
They claimed, however, that instead of the cashier (Hawayon) issuing the official receipt, it was the
invoicer (Villagonzalo) who did it manually. They explained that there was miscommunication between
the employees at that time because prior to the issuance of the receipt, Villagonzalo asked Hawayon "
Ok na ?," and the latter replied " Ok na ," which the former believed to mean that the item has already
been paid.18 Realizing the mistake, Villagonzalo rushed outside to look for respondent and when he
saw the latter, he invited her to go back to the shop to make clarifications as to whether or not payment
was indeed made. Instead, however, of going back to the shop, respondent suggested that they meet
at the Cebu Pacific Office. Villagonzalo, Hawayon and Ybañez thus went to the agreed venue where
they talked to respondent.19 They pointed out that it appeared in their conversation that respondent
could not recall whom she gave the payment.20 They emphasized that they were gentle and polite in
talking to respondent and it was the latter who was arrogant in answering their questions. 21 As
counterclaim, petitioners and the other defendants sought the payment of moral and exemplary
damages, plus attorney’s fees and litigation expenses. 22

On June 20, 2003, the RTC rendered a Decision dismissing both the complaint and counterclaim of the
parties. From the evidence presented, the trial court concluded that the petitioners and the other
defendants believed in good faith that respondent failed to make payment. Considering that no motive
to fabricate a lie could be attributed to the Guess employees, the court held that when they demanded
payment from respondent, they merely exercised a right under the honest belief that no payment was
made. The RTC likewise did not find it damaging for respondent when the confrontation took place in
front of Cebu Pacific clients, because it was respondent herself who put herself in that situation by
choosing the venue for discussion. As to the letter sent to Cebu Pacific Air, the trial court also did not
take it against the Guess employees, because they merely asked for assistance and not to embarrass
or humiliate respondent. In other words, the RTC found no evidence to prove bad faith on the part of
the Guess employees to warrant the award of damages.23

On appeal, the CA reversed and set aside the RTC decision, the dispositive portion of which reads:

WHEREFORE, the instant appeal is GRANTED. The decision of the Regional Trial Court of Cebu City,
Branch 58, in Civil Case No. CEB-26984 (for: Damages) is hereby REVERSED and SET ASIDE.
Defendants Michelle Ybañez and California Clothing, Inc. are hereby ordered to pay plaintiff-appellant
Shirley G. Quiñones jointly and solidarily moral damages in the amount of Fifty Thousand Pesos
(₱50,000.00) and attorney’s fees in the amount of Twenty Thousand Pesos (₱20,000.00).

SO ORDERED.24

While agreeing with the trial court that the Guess employees were in good faith when they confronted
respondent inside the Cebu Pacific Office about the alleged non-payment, the CA, however, found
preponderance of evidence showing that they acted in bad faith in sending the demand letter to
respondent’s employer. It found respondent’s possession of both the official receipt and the subject
black jeans as evidence of payment.25 Contrary to the findings of the RTC, the CA opined that the letter
addressed to Cebu Pacific’s director was sent to respondent’s employer not merely to ask for
assistance for the collection of the disputed payment but to subject her to ridicule, humiliation and
similar injury such that she would be pressured to pay.26 Considering that Guess already started its
investigation on the incident, there was a taint of bad faith and malice when it dragged respondent’s
employer who was not privy to the transaction. This is especially true in this case since the purported
letter contained not only a narrative of the incident but accusations as to the alleged acts of respondent
in trying to evade payment.27 The appellate court thus held that petitioners are guilty of abuse of right
entitling respondent to collect moral damages and attorney’s fees. Petitioner California Clothing Inc.
was made liable for its failure to exercise extraordinary diligence in the hiring and selection of its
employees; while Ybañez’s liability stemmed from her act of signing the demand letter sent to
respondent’s employer. In view of Hawayon and Villagonzalo’s good faith, however, they were
exonerated from liability.28

Ybañez moved for the reconsideration29 of the aforesaid decision, but the same was denied in the
assailed November 14, 2006 CA Resolution.

Petitioners now come before the Court in this petition for review on certiorari under Rule 45 of the Rules
of Court based on the following grounds:

I.

THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE LETTER SENT TO THE
CEBU PACIFIC OFFICE WAS MADE TO SUBJECT HEREIN RESPONDENT TO RIDICULE,
HUMILIATION AND SIMILAR INJURY.

II.

THE HONORABLE COURT OF APPEALS ERRED IN AWARDING MORAL DAMAGES AND

ATTORNEY’S FEES.30

The petition is without merit.

Respondent’s complaint against petitioners stemmed from the principle of abuse of rights provided for
in the Civil Code on the chapter of human relations. Respondent cried foul when petitioners allegedly
embarrassed her when they insisted that she did not pay for the black jeans she purchased from their
shop despite the evidence of payment which is the official receipt issued by the shop. The issuance of
the receipt notwithstanding, petitioners had the right to verify from respondent whether she indeed
made payment if they had reason to believe that she did not. However, the exercise of such right is not
without limitations. Any abuse in the exercise of such right and in the performance of duty causing
damage or injury to another is actionable under the Civil Code. The Court’s pronouncement in Carpio
v. Valmonte31 is noteworthy:

In the sphere of our law on human relations, the victim of a wrongful act or omission, whether done
willfully or negligently, is not left without any remedy or recourse to obtain relief for the damage or injury
he sustained. Incorporated into our civil law are not only principles of equity but also universal moral
precepts which are designed to indicate certain norms that spring from the fountain of good conscience
and which are meant to serve as guides for human conduct. First of these fundamental precepts is the
principle commonly known as "abuse of rights" under Article 19 of the Civil Code. It provides that "
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."x x x32 The elements of abuse of rights are
as follows: (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.33

In this case, petitioners claimed that there was a miscommunication between the cashier and the
invoicer leading to the erroneous issuance of the receipt to respondent. When they realized the mistake,
they made a cash count and discovered that the amount which is equivalent to the price of the black
jeans was missing. They, thus, concluded that it was respondent who failed to make such payment. It
was, therefore, within their right to verify from respondent whether she indeed paid or not and collect
from her if she did not. However, the question now is whether such right was exercised in good faith or
they went overboard giving respondent a cause of action against them.

Under the abuse of rights principle found in Article 19 of the Civil Code, a person must, in the exercise
of legal right or duty, act in good faith. He would be liable if he instead acted in bad faith, with intent to
prejudice another.34 Good faith refers to the state of mind which is manifested by the acts of the
individual concerned. It consists of the intention to abstain from taking an unconscionable and
unscrupulous advantage of another.35 Malice or bad faith, on the other hand, implies a conscious and
intentional design to do a wrongful act for a dishonest purpose or moral obliquity. 36

Initially, there was nothing wrong with petitioners asking respondent whether she paid or not. The
Guess employees were able to talk to respondent at the Cebu Pacific Office. The confrontation started
well, but it eventually turned sour when voices were raised by both parties. As aptly held by both the
RTC and the CA, such was the natural consequence of two parties with conflicting views insisting on
their respective beliefs. Considering, however, that respondent was in possession of the item
purchased from the shop, together with the official receipt of payment issued by petitioners, the latter
cannot insist that no such payment was made on the basis of a mere speculation. Their claim should
have been proven by substantial evidence in the proper forum.

It is evident from the circumstances of the case that petitioners went overboard and tried to force
respondent to pay the amount they were demanding. In the guise of asking for assistance, petitioners
even sent a demand letter to respondent’s employer not only informing it of the incident but obviously
imputing bad acts on the part of respondent.1âwphi1 Petitioners claimed that after receiving the receipt
of payment and the item purchased, respondent "was noted to hurriedly left (sic) the store." They also
accused respondent that she was not completely being honest when she was asked about the
circumstances of payment, thus:

x x x After receiving the OR and the item, Ms. Gutierrez was noted to hurriedly left (sic) the store. x x x

When I asked her about to whom she gave the money, she gave out a blank expression and told me,
"I can’t remember." Then I asked her how much money she gave, she answered, "₱2,100; 2 pcs 1,000
and 1 pc 100 bill." Then I told her that that would (sic) impossible since we have no such denomination
in our cash fund at that moment. Finally, I asked her if how much change and if she received change
from the cashier, she then answered, "I don’t remember." After asking these simple questions, I am
very certain that she is not completely being honest about this. In fact, we invited her to come to our
boutique to clear these matters but she vehemently refused saying that she’s in a hurry and very busy. 37

Clearly, these statements are outrightly accusatory. Petitioners accused respondent that not only did
she fail to pay for the jeans she purchased but that she deliberately took the same without paying for it
and later hurriedly left the shop to evade payment. These accusations were made despite the issuance
of the receipt of payment and the release of the item purchased. There was, likewise, no showing that
respondent had the intention to evade payment. Contrary to petitioners’ claim, respondent was not in
a rush in leaving the shop or the mall. This is evidenced by the fact that the Guess employees did not
have a hard time looking for her when they realized the supposed non-payment.

It can be inferred from the foregoing that in sending the demand letter to respondent’s employer,
petitioners intended not only to ask for assistance in collecting the disputed amount but to tarnish
respondent’s reputation in the eyes of her employer. To malign respondent without substantial evidence
and despite the latter’s possession of enough evidence in her favor, is clearly impermissible. A person
should not use his right unjustly or contrary to honesty and good faith, otherwise, he opens himself to
liability.38

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.39 In this case, petitioners obviously abused their rights.

Complementing the principle of abuse of rights are the provisions of Articles 20 and 2 of the Civil Code
which read:40

Article 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall
indemnify the latter for the same.

Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary to
morals or good customs, or public policy shall compensate the latter for the damage.

In view of the foregoing, respondent is entitled to an award of moral damages and attorney s fees.
Moral damages may be awarded whenever the defendant s wrongful act or omission is the proximate
cause of the plaintiffs physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation and similar injury in the cases specified or analogous
to those provided in Article 2219 of the Civil Code.41 Moral damages are not a bonanza. They are given
to ease the defendant s grief and suffering. They should, thus, reasonably approximate the extent of
hurt caused and the gravity of the wrong done.42 They are awarded not to enrich the complainant but
to enable the latter to obtain means, diversions, or amusements that will serve to alleviate the moral
suffering he has undergone.43 We find that the amount of ₱50,000.00 as moral damages awarded by
the CA is reasonable under the circumstances. Considering that respondent was compelled to litigate
to protect her interest, attorney s fees in the amount of of₱20,000.00 is likewise just and proper.

WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals
Decision dated August 3, 2006 and Resolution dated November 14, 2006 in CA-G.R. CV No. 80309,
are AFFIRMED.

SO ORDERED.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK (NOW BDO UNIBANK, INC. v. JOSEPHINE D.
GOMEZ; G.R. No. 199601, November 23, 2015

SECOND DIVISION

G.R. No. 199601, November 23, 2015

PHILIPPINE COMMERCIAL INTERNATIONAL BANK (NOW BDO UNIBANK,

INC., Petitioner, v. JOSEPHINE D. GOMEZ, Respondent.

DECISION

BRION, J.:

We resolve the petition for review on certiorari under Rule 45 of the Rules of Court 1 filed by Philippine
Commercial International Bank (PCIB) assailing the May 23, 2011 decision2 and the December 7, 2011
resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 68288. The CA affirmed the May 25, 1999
decision of the Regional Trial Court of Makati City, Branch 145 (RTC) in toto.

FACTUAL ANTECEDENTS

Josephine D. Gomez (Josephine) was a teller at the Domestic Airport Branch of the PCIB when a
certain Colin R. Harrington opened Savings Account No. 373-28010-6 with said branch in January
1985.

The following day, Harrington presented two (2) genuine bank drafts dated January 3, 1985, issued by
the Bank of New Zealand. The first draft was in the sum of US$724.57 payable to "C.R. Harrington,"
while the second draft was in the sum of US$2,004.76 payable to "Servants C/C.R. Harrington."

The PCIB, on the other hand, alleged that it was a certain Sophia La'O, as a representative of
Harrington, who presented the bank drafts for deposit.

Upon receipt of the bank drafts, Josephine asked her immediate supervisor, Eleanor Flores, whether
the drafts payable to "Servants C/C.R. Harrington" were acceptable for deposit to the savings account
of Harrington. When Flores answered in the affirmative, and after receiving from the bank's foreign
exchange supervision a Philippine Currency conversion of the amounts reflected in the drafts,
Josephine received the deposit slip. Thereafter, the deposits were duly entered in Harrington's savings
account.

On two (2) separate dates, a certain individual representing himself as Harrington withdrew the sums
of P45,000.00 and P5,600.00. Subsequently, the bank discovered that the person who made the
withdrawals was an impostor. Thus, the bank had to pay Harrington P50,600.00 representing the
amounts of the bank drafts in his name.

The PCIB issued a memorandum asking Josephine to explain why no disciplinary action should be
taken against her for having accepted the bank drafts for deposits. Josephine reasoned that being a
new teller she was not yet fully oriented with the various aspects of the job. She further alleged that she
had asked the approval of her immediate supervisor prior to receiving the deposits.

On November 14, 1985, the PCIB deducted the amount of P-423.38 from Josephine's salary. Josephine
wrote the PCIB to ask why the deduction was made.
After due investigation on the matter, the PCIB issued another memorandum finding Josephine grossly
negligent and liable for performing acts in violation of established operating procedures. The
memorandum required Josephine to pay the amount of P-50,600.00 through deductions in her salary,
allowance, bonuses, and profit sharing until the amount is fully paid.

Josephine wrote the PCIB to ask for the basis of its findings that she was grossly negligent and liable
to pay the amount of P50,600.00. During trial, the RTC found that the PCIB did not even respond to
this letter. PCIB, however, alleged that it had replied to Josephine's letter, and explained that she was
afforded due process and the deductions made prior to January 15, 1986, were merely a withholding
pending the investigation.

The PCIB also admitted that as early as January 15, 1986, it had started to deduct the amount of P
200.00 from Josephine's salary as well as 50% of her bonuses and profit sharing.

On February 10, 1986, Josephine filed a complaint for damages with prayer for preliminary injunction
before the RTC of Makati City. She claimed that the PCIB had abused its right by gradually deducting
from her salary the amount the bank had to pay Harrington.

The PCIB filed its answer with counterclaims and a separate complaint with the RTC of Makati City,
which was raffled to Branch 149.

In its May 25, 1999 decision, the RTC rendered judgment in favor of Josephine and ordered the PCIB
to pay her actual damages in the amount of P5,006.00 plus 12% interest from filing of the complaint;
moral damages in the amount of PI 50,000.00; and attorney's fees in the amount of P-50,000.00.

The RTC considered the PCIB's manner of deducting from the salary and allowance of Josephine as
having been rendered in bad faith and contrary to morals, good custom, and public policy. This was
borne out by the fact that the PCIB had already deducted from her salary before Josephine received
the memorandum finding her liable for the P50,600.00. In addition, while there were other individuals
involved in this incident, it appeared that it was only Josephine who was made solely responsible.

On appeal, the PCIB argued that the RTC had no jurisdiction over the case because it was a labor
dispute, which the labor tribunals are more competent to resolve. It also maintained that there was no
factual or legal basis for the RTC to make it liable for damages and to pay Josephine.

In its May 23, 2011 decision, the CA affirmed the May 25, 1999 RTC decision. It held that the PCIB
was estopped from questioning the jurisdiction of the RTC because it had filed an answer with
counterclaims and even initiated a separate case before a different branch of the RTC. It upheld the
RTC's findings and conclusion in awarding damages and attorney's fees to Josephine because there
was no reason to disturb them.

The CA, subsequently, denied the PCIB's motion for reconsideration on December 7, 2011; hence, the
PCIB filed the present petition.

First, the PCIB contends that the CA gravely erred in ruling that its actions were in total and wanton
disregard of Articles 19 and 21 of the Civil Code because the courts a quo summarily imputed bad faith
on how it had treated Josephine.

Second, the PCIB maintains that the CA gravely erred in awarding moral damages and attorney's fees
to Josephine absent any basis for it while averring that bad faith cannot be presumed and that
Josephine had failed to prove it with clear and convincing evidence.
OUR RULING

We DENY the present petition for lack of merit.

The civil courts have jurisdiction

over a case when the cause of action
does not have a reasonable causal
connection from the employer-employee
relationship.

Although the PCIB opted not to raise the issue before this Court, we find it prudent and imperative to
justify why the RTC had jurisdiction to take cognizance of Josephine's complaint despite the fact that
her cause of action arose because her employer arbitrarily deducted from her salary - an act
expressly prohibited by our labor laws.4

Article 224 [217] of the Labor Code provides that the Labor Arbiters have original and exclusive
jurisdiction to hear and decide claims for actual, moral, exemplary, and other forms of damages
arising from employer-employee relations. The legislative intent appears clear to allow Labor Arbiters
to award to an employee not only the reliefs provided by our labor laws, but also moral and other
forms of damages governed by the Civil Code. Specifically, we have mentioned, in fact, that a
complaint for damages under Articles 19, 20, and 21 of the Civil Code would not suffice to keep the
case without the jurisdictional boundaries of our labor courts -especially when the claim for damages
is interwoven with a labor dispute.5

Nevertheless, when the cause of action has no reasonable connection with any of the claims
provided for in Article 224 of the Labor Code, jurisdiction over the action is with the regular
courts. 6 Here, since Josephine's cause of action is based on a quasi-delict or tort under Article 19 in
relation to Article 21 of the Civil Code, the civil courts (not the labor tribunals) have jurisdiction over
the subject matter of this case.

To be sure, the case of Singapore Airlines Ltd. v. Ernani Cruz Pa�o is

enlightening:chanRoblesvirtualLawlibrary

Upon the facts and issues involved, jurisdiction over the present controversy must be held to belong to
the civil courts. While seemingly petitioner's claim for damages arises from employer-employee
relations, and the latest amendment to Article 217 of the Labor Code under PD No. 1691 and BP Big.
130 provides that all other claims arising from employer-employee relationship are cognizable by Labor
Arbiters, in essence, petitioner's claim for damages is grounded on the "wanton failure and refusal"
without just cause of private respondent Cruz to report for duty despite repeated notices served upon
him of the disapproval of his application for leave of absence without pay. This, coupled with the further
averment that Cruz "maliciously and with bad faith" violated the terms and conditions of the conversion
training course agreement to the damage of petitioner removes the present controversy from the
coverage of the Labor Code and brings it within the purview of Civil Law.

Clearly, the complaint was anchored not on the abandonment per se by private respondent Cruz of his
job as the latter was not required in the Complaint to report back to work but
on the manner and consequent effects of such abandonment of work translated in terms of the
damages which petitioner had to suffer.7 [emphasis and underscoring supplied]cralawlawlibrary

In the present case, Josephine filed a civil complaint for damages against the PCIB based on how her
employer quickly concluded that she was negligent and hence arbitrarily started to deduct from her
salary. Clearly, without having to dwell on the merits of the case, Josephine opted to invoke the
jurisdiction of our civil courts because her right to fair treatment was violated.

The discussion in Quisaba v. Sta. Ines-Melale Veneer & Plywood, Inc. is just as relevant as it is
illuminating on the present case, to wit:chanRoblesvirtualLawlibrary

Although the acts complained of seemingly appear to constitute "matters involving employee-employer
relations" as Quisaba's dismissal was the severance of a preexisting employee-employer relation, his
complaint is grounded not on his dismissal per se as in fact he does not ask for reinstatement or
backwages, but on the manner of his dismissal and the consequent effects of such dismissal.

xxx

The "right" of the respondents to dismiss Quisaba should not be confused with the manner in which the
right was exercised and the effects flowing therefrom. If the dismissal was done anti-socially or
oppressively, as the complaint alleges, then the respondents violated article 1701 of the Civil Code
which prohibits acts of oppression by either capital or labor against the other, and article 21, which
makes a person liable for damages if he willfully causes loss or injury to another in a manner that is
contrary to morals, good customs or public policy, the sanction for which, by way of moral damages, is
provided in article 2219, no. 10. (Cf. Phil. Refining Co. v. Garcia, L-21962, Sept. 27, 1966, 18 SCRA
107).8cralawlawlibrary

From the foregoing, the case at bar is intrinsically concerned with a civil dispute because it has
something to do with Josephine's right under Article 19 of the Civil Code, and does not involve an
existing employer-employee relation within the meaning of Article 224 of the Labor Code. Josephine's
complaint was, therefore, properly filed with and exclusively cognizable by the RTC.

Questions on whether there was a

preponderance of evidence to justify the
award of damages or whether there was
a causal connection between the given
set of facts and the damage suffered by
the private complainant are questions of fact.

The Court's jurisdiction under a Rule 45 review is limited to reviewing perceived errors of law, which
the lower courts may have committed. The resolution of factual issues is the function of the lower courts
whose findings, when aptly supported by evidence, bind this Court. This is especially true when the CA
affirms the RTC's findings. While this Court, under established exceptional circumstances, had deviated
from the above rule, we do not find this case to be under any of the exceptions.

Essentially, what the PCIB seeks is a relief from the Court on the issue of the propriety of the award of
damages. On this point alone, the petition must fail, as a Rule 45 petition bars us from the consideration
of factual issues, especially when both the RTC and the CA were consistent with their rulings.

Nevertheless, we still affirm the assailed CA rulings even if we were to disregard these established
doctrinal rules.

Article 19 of the Civil Code provides that every person in the exercise of his rights and in the
performance of his duties must act with justice, give everyone his due, and observe honesty and good
faith. The principle embodied in this provision is more commonly known as the "abuse of right principle."
The legal sanctions for violations of this fundamental principle are found in Articles 209 and 2110 of the
Civil Code. We explained how these two provisions correlate with each other in GF Equity, Inc. v.
Valenzona:chanRoblesvirtualLawlibrary

[Article 19], 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.11 [Emphasis supplied]cralawlawlibrary

Both the RTC and the CA found the acts of the PCIB were in clear violation of Article 19 of the Civil
Code and held the PCIB liable for damages. While the PCIB has a right to penalize employees for acts
of negligence, the right must not be exercised unjustly and illegally. In the instant case, the PCIB made
deductions on Josephine's salary even if the investigation was still pending. Belatedly, the PCIB issued
a memorandum finding Josephine grossly negligent and requiring her to pay the amount which the
bank erroneously paid to Harrington's impostor. When Josephine asked for legal and factual basis for
the finding of negligence, the PCIB refused to give any. Moreover, the PCIB continued to make
deductions on Josephine's salary, allowances, and bonuses.

The trial court and the CA also noted that while Josephine was penalized, other employees of the bank
involved in the subject transactions were not. It was Josephine who was made solely responsible for
the loss without giving any basis therefor. It was emphasized that the subject deposit could not have
been received by the bank and entered in Harrington's savings account without the participation of the
other bank employees. The PCIB could have exercised prudence before taking oppressive actions
against Josephine.

All told, we find nothing in the record which would warrant the reversal of the position held by the RTC
and the CA. Based on the above discussion, we find the award of moral damages and attorney's fees
in Josephine's favor proper.

WHEREFORE, the petition for review on certiorari is DENIED and consequently, the May 23, 2011
decision and the December 7, 2011 resolution of the Court of Appeals in CA-G.R. CV No. 68288
are AFFIRMED in toto.

SO ORDERED.chanroblesvirtuallawlibrary
Article 22-23 – Unjust Enrichment
REPUBLIC OF THE PHILIPPINES vs. HON. NORMELITO J. BALLOCANAG G.R. No. 163794;
November 28, 2008

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 163794 November 28, 2008

REPUBLIC OF THE PHILIPPINES, represented by Romeo T. Acosta (formerly Jose D. Malvas),

Director of Forest Management Bureau, Department of Environment and Natural
Resources,petitioners,
vs.
HON. NORMELITO J. BALLOCANAG, Presiding Judge, Branch 41, Regional Trial Court,
Pinamalayan, Oriental Mindoro and DANILO REYES, respondents.

DECISION

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Civil Procedure
seeking the reversal of the Court of

Appeals (CA) Decision2 dated June 4, 2004, in CA-G.R. SP No. 52261, which affirmed the Joint
Order3 of the Regional Trial Court (RTC) of Pinamalayan, Oriental Mindoro, Branch 41, dated
December 28, 1998.

The facts, as summarized by the CA, are as follows:

Sometime in 1970, [private respondent Danilo] Reyes bought the subject 182,941-square-meter
land at Bgy. Banus, Pinamalayan, Oriental Mindoro [subject land] from one Regina Castillo (or
Castillo) in whose name it was titled under Original Transfer Certificate of Title No. P-2388 issued
pursuant to Free Patent No. V-79606. Right after his purchase, Reyes introduced improvements
and planted the land with fruit trees, including about a thousand mango[es], more than a hundred
Mandarin citrus, and more than a hundred guyabanos. He also had the title transferred in his
name and was issued TCT No. 45232.

Reyes so prized this land which he bought in good faith. Unfortunately, it turned out that about
162,500 square meters of this land is part of the timberland of Oriental Mindoro and, therefore,
cannot be subject to any disposition or acquisition under any existing law, and is not registrable.

Thus, in the Complaint (Annex "A", pp. 15 to 21, rollo) for "Cancellation of Title and/or Reversion"
filed by the Office of the Solicitor General (or OSG) in behalf of the Republic [petitioner], as
represented by the Bureau of Forest Development (or BFD), it was explained that the source[,]
Original Transfer Certificate of Title No. P-2388 of Castillo, issued pursuant to Free Patent No.
V-79606, is spurious, fictitious and irregularly issued on account of:
 a) ONE HUNDRED SIXTY-TWO THOUSAND FIVE HUNDRED (162,500) SQUARE
METERS, more or less, of the land covered by OCT No. P-2388 was, at the time it was
applied for patent and or titling, a part of the timberland of Oriental Mindoro, per BFD Land
Classification Map Nos. 2319 and 1715. Copy of said maps are attached hereto
as Annexes "B" and "C";

b) The 162,500 square meters covered by OCT No. P-2388 are entirely inside the 140
hectares Agro-Forestry Farm Lease Agreement No. 175 in favor of Atty. Augusto D.
Marte4 [Atty. Marte], copy of the Map of AFFLA No. 175 and AFFLA No. 175 are attached
hereto as Annexes "D" and "E";

c) Neither the private defendant nor his predecessors-in-interest have been in possession
of the property because the rightful occupant is Atty. Augusto D. Marte by virtue of the
Agro-Forestry Farm Lease Agreement [AFFLA] No. 175, issued to him by the Ministry of
Natural Resources in 1986 to expire on December 21, 2011;

d) Since the parcel of land covered by TCT No. 45232, in the name of defendant Danilo
Reyes, is a part of the timberland of Oriental Mindoro, per BFD Land Classification Map
Nos. 2319 & 1715, the same cannot be the subject of any disposition or acquisition under
any existing law (Li Hong Giap vs. Director of Lands, 55 Phil. 693; Veno vs. Gov't of
P.I. 41 Phil. 161; Director of Lands vs. Abanzado, 65 SCRA 5). (pp. 18 to 19, rollo)

Aside from the documentary evidence presented to support these allegations, the Republic
presented as well and called to the witness stand:

a) Armando Cruz, the supervising cartographer of the DENR, who explained that based
on Land Classification Map No. 1715 (Exh. "A") which was later amended to LC Map No.
2319 (Exh. "B"), the plotting shows that the 162,000 square meters covered by OCT No.
2388 are entirely inside the 140 hectares of the Agro-Forestry Farm Lease Agreement
No. 175 in favor of Atty. Marte and the alienable and disposable area of Castillo's land is
only around two (2) hectares;

b) Alberto Cardiño, an employee of the DENR who conducted the survey on the land
under litigation, corroborated the testimony of Cruz that only two hectares is alienable
and disposable land; and

c) Vicente Mendoza, a Geodetic Engineer, who expounded on the procedure before the
title could be issued to an applicant for a disposable and alienable public land. He clarified
that he did not make the survey for Castillo but upon presentation to him of the carpeta in
open court he noticed that, while it appears to be valid, it however has no certification of
the Bureau of Forestry - an essential requirement before title could be issued.

For his side, Reyes presented evidence showing his extensive development of and investment
in the land, but however failed to traverse squarely the issue raised by the Republic against the
inalienability and indisposability of his acquired land. His lame argument that the absence of the
Certification by the Bureau of Forestry on his carpeta does not necessarily mean that there was
none issued, failed to convince the court a quo.

Hence, Judge Edilberto Ramos, the then Presiding Judge of Branch 41 of the Regional Trial
Court of Pinamalayan, Oriental Mindoro, held5 that:
 The defendants in this case did not assail the evidence of the plaintiff but concentrated itself to
the expenses incurred in the cultivation and in the planting of trees in that disputed areas. Aside
thereto, the plaintiff cited that it is elementary principle of law that said areas not being capable
of registration their inclusion in a certification of ownership or confer title on the registrant.
(Republic of the Philippines, et al. vs. Hon. Judge Jaime de los Angeles of the Court of First
Instance of Balayan, Batangas, et al., G.R. No. L-30240) It is also a matter of principle that public
forest [are non-alienable public lands. Accession of public forests] on the part of the claimant,
however long, cannot convert the same into private property. (Vano v. Government of PI, 41
Phils. 161)

In view thereof, it appears that the preponderance of evidence is in favor of the plaintiff
and against the defendants and therefore it is hereby declared that Free Patent No. V-
79606 issued on July 22, 1957 with Psu No. 155088 and OCT No. P-2388 in the name of
Regina Castillo and its derivative TCT No. 45232 in the name of Danilo Reyes is hereby
declared null and void; and the defendant Danilo Reyes is hereby ordered to surrender
the owner's duplicate copy of TCT No. 45232 and to vacate the premises and directing
the defendant Register of Deeds of Calapan, Oriental Mindoro, to cancel the title as null
and void ab initio; and declaring the reversion of the land in question to the government
subject to the Agro-Forestry Farm Lease Agreement No. 175, to form part of the public
domain in the province of Oriental Mindoro.

The two-hectare lot, which appears disposable and alienable, is declared null and void
for failure to secure certification from the Bureau of Forest Development.

The counter-claim of the defendant is hereby denied for lack of merit, with cost against
the defendant.6

Reyes appealed the aforementioned RTC Decision to the CA. In its Decision 7 dated September 16,
1996, the CA affirmed the RTC Decision. His motion for reconsideration was denied. 8

Thus, Reyes sought relief from this Court via a petition for review on certiorari. But in our
Resolution9 dated June 23, 1997, we resolved to deny his petition for failure to sufficiently show that
the CA had committed any reversible error in the questioned judgment. On November 24, 1997, this
Court denied with finality Reyes' motion for reconsideration. 10

On February 4, 1998, Reyes filed a Motion11 to Remove Improvements Introduced by Defendant Danilo
D. Reyes on the Property which is the Subject of Execution in Accordance with Rule 39, Section 10,
paragraph (d) of the 1997 Rules of Civil Procedure (motion). 12 There he averred that: he occupied in
good faith the subject land for around thirty years; he had already spent millions of pesos in planting
fruit-bearing trees thereon; and he employed many workers who regularly took care of the trees and
other plants. Reyes prayed that he and/or his agents be given at least one (1) year from the issuance
of the corresponding order to remove his mango, citrus and guyabano trees, and that they be allowed
to stay in the premises within that period to work on the cutting and removal of the said trees. He also
asked the RTC that in the meantime that these trees are not yet removed, all the unharvested fruits be
appropriated by him, as provided for by law, to the exclusion of all other persons who may take
advantage of the situation and harvest said fruits.

Petitioner opposed the motion, citing the principle of accession under Article 440 13 of the Civil Code. It
further argued that the subject land, being timber land, is property of public dominion and, therefore,
outside the commerce of man and cannot be leased, donated, sold, or be the object of any contract.
This being the case, there are no improvements to speak of, because the land in question never ceased
to be a property of the Republic, even if Reyes claimed that he was a purchaser for value and in good
faith and was in possession for more than thirty (30) years. Moreover, petitioner averred that, assuming
Reyes was initially a planter/sower in good faith, Article 448 of the Civil Code cannot be of absolute
application since from the time the reversion case was filed by the petitioner on May 13, 1987, Reyes
ceased to be a planter/sower in good faith and had become a planter/sower in bad faith. 14

Meanwhile, on March 2, 1998, Atty. Marte filed a Complaint for Injunction With an Ancillary Prayer for
the Immediate Issuance of a Temporary Restraining Order against Reyes for allegedly encroaching
upon and taking possession by stealth, fraud and strategy some 16 hectares of his leased area without
his permission or acquiescence and planted trees thereon in bad faith despite the fact that the area is
non-disposable and part of the public domain, among others.

But the respondent RTC dismissed the said complaint in the assailed Joint Order and ruled in favor of
Reyes, finding Rule 39, Section 10, paragraph (d) of the 1997 Rules of Civil Procedure, applicable. The
RTC ratiocinated:

Under the circumstance, it is but just and fair and equitable that Danilo Reyes be given the
opportunity to enjoy the fruits of his labor on the land which he honestly believes was legally his.
He was not aware that his certificate of title which was derived from OCT No. P-2388 issued in
1957 by the government itself in the name of Regina Castillo contained legal infirmity, otherwise
he would not have expoused (sic) himself from the risk of being ejected from the land and losing
all improvements thereon. Any way, if the court will grant the motion for the defendant's (sic)
Danilo Reyes to remove his improvements on the disputed property, it will not prejudice Augusto
Marte, otherwise, as the court sees it, he will immensely [benefit] from the toils of Danilo Reyes.

and then disposed, as follows:

WHEREFORE, premises considered, the motion to remove improvements filed by defendant

Danilo Reyes dated January 28, 1998 is hereby GRANTED pursuant to the provisions of section
10, paragraph (d) of Rule 39 of the 1997 Rules of Civil Procedure and he is given a period of
one (1) year from the issuance of this ORDER to remove, cut and appropriate the fruit-bearing
trees which he had planted in the property in disputes (sic).

The COMMENT filed by the Office of the Solicitor General dated August 11, 1998 is hereby
denied for lack of merit.

The [C]omplaint for Injunction filed by Augusto D. Marte on March 2, 1998 against Danilo Reyes
is hereby ordered dismissed for lack of merit.

Petitioner, through the OSG, filed its Motion for Reconsideration 15 which was denied by the
RTC.16 Aggrieved, petitioner went to the CA via Certiorari under Rule 65 of the Rules of Civil
Procedure17 ascribing to the RTC grave abuse of discretion and acting without jurisdiction in granting
Reyes' motion to remove improvements.

However, the CA dismissed the petition for certiorari, and affirmed the ruling of the RTC, in this wise:

It is notable that in the course of the suit for "Cancellation of Title and/or Reversion" there was
not an iota of evidence presented on record that Reyes was in bad faith in acquiring the land nor
in planting thereon perennial plants. So it could never be said and held that he was a
planter/sower in bad faith. Thus, this Court holds that Reyes sowed and planted in good faith,
and that being so the appropriate provisions on right accession are Articles 445 and 448 also of
the Civil Code.18
Hence, this Petition based on the sole ground that:

THE COURT OF APPEALS ERRED IN AFFIRMING THE DECISION OF THE TRIAL COURT
HOLDING THAT THE MOTION TO REMOVE IMPROVEMENTS FILED BY PRIVATE
RESPONDENT IS BUT AN INCIDENT OF THE REVERSION CASE OVER WHICH THE TRIAL
COURT STILL HAS JURISDICTION DESPITE THE FACT THAT THE DECISION IN THE
REVERSION CASE HAD LONG BECOME FINAL AND EXECUTORY. 19

The OSG posits that Reyes' assailed motion is barred by prior judgment under Section 47, Rule 39 of
the 1997 Rules of Civil Procedure because said motion merely sprang from the civil case of reversion
tried and decided on the merits by the RTC, and the decision is already final, after it was duly affirmed
by the CA and by this Court. The OSG stresses that one of Reyes' assigned errors in the reversion
case before the CA was that the RTC "erred in not granting his (Reyes') counterclaims as well as his
claims for improvements." The OSG claims that such assigned error was duly resolved by the CA when
it held, to wit:

The non-award of appellant's "counterclaims" is understandable.

To begin with, no evidence whatsoever was presented by the appellant to sustain his plea for
damages. In fact, appellant never testified to prove his allegations as regards his counterclaims.

Then, too, there is no showing that appellant paid the docket fees for the court to acquire
jurisdiction over his purported counterclaims (Metal Engineering Resources Corp. vs. Court of
Appeals, 203 SCRA 273).

Lastly, the allegations made in the Answer in support of the so-called "counterclaims" clearly
negate the nature of the claims as compulsory counterclaim like that of reimbursement of the
useful expenses (Cabangis vs. Court of Appeals, 200 SCRA 414).20

Thus, the OSG posits that the issue of the improvements cannot be made the subject of the assailed
motion on the pretext that such removal of improvements is merely incidental to the reversion case.
The OSG submits that the consideration of the issue is now barred by res judicata. Lastly, the OSG
argues that: the RTC and CA cannot vary a decision which has already attained finality; for purposes
of execution, what is controlling is the dispositive portion of the decision; the RTC, except to order the
execution of a decision which had attained finality, had long lost jurisdiction over the case; and the RTC
erred and acted without jurisdiction when it granted Reyes' motion to remove the improvements when
the dispositive portion of the decision in the reversion case did not provide for the removal of the same.21

In his Comment22 on the OSG petition, Reyes avers that the points raised by the OSG are merely
rehashed arguments which were adequately passed upon by the CA. He fully agrees with the ruling of
the CA that: he is a planter/sower in good faith, as such, Articles 445 and 448 of the New Civil Code
are applicable; his motion is not entirely a new case, but merely an incident to the reversion case, a
consequence of its grant and a legal solution to an important issue overlooked, if not ignored by the
State and by the courts in their decisions in the reversion case; under Section 10, Rule 39 of the 1997
Rules of Civil Procedure, he is allowed to remove the improvements; and the instant Petition failed to
abide with the proper manner as to the "proof of service" required under Section 13, Rule 13 of the
1997 Rules of Civil Procedure. Most importantly, Reyes avers that the land on which about 1,000
mango trees, 100 mandarin citrus trees and 100 guyabano trees are planted, was leased by the
government to Atty. Marte, who entered into the possession of the subject land when the trees were
already bearing fruits. Thus, if said trees are not removed, Atty. Marte would be unduly enriched as the
beneficiary of these fruits without even spending a single centavo, at the expense of Reyes. Reyes
posits that it is a well-established fact, unrebutted by the petitioner, that he planted these trees and to
deny him the right to remove them would constitute a grave injustice and amount to confiscation without
just compensation which is violative of the Constitution.

The OSG counters that copies of the instant Petition were properly served as shown by the photocopies
of the registry return cards. Moreover, the OSG avers that granting, without admitting, that another
person would stand to be benefited by the improvements that Reyes introduced on the land is beside
the point and is not the fault of the petitioner because the particular issue of the improvements was
already resolved with finality in the reversion case. The OSG claims that a lower court cannot reverse
or set aside decisions or orders of a superior court, for to do so will negate the principle of hierarchy of
courts and nullify the essence of review - a final judgment, albeit erroneous, is binding on the whole
world.23

The instant Petition lacks merit.

In an action for reversion, the pertinent allegations in the complaint would admit State ownership of the
disputed land.24 Indeed, the ownership over the subject land reverted to the State by virtue of the
decisions of the

RTC and CA and our Resolution on the matter. But these decisions simply ordered the reversion of the
property to the State, and did not consider the improvements that Reyes had introduced on the property
or provide him with any remedy relative thereto. Thus, Reyes was left out in the cold, faced with the
prospect of losing not only the land which he thought he owned, but also of forfeiting the improvements
that he painstakingly built with his effort, time and money.

We cannot agree with the OSG that the denial by the CA of Reyes' counterclaim in the reversion case
had the effect of completely foreclosing whatever rights Reyes may have over these improvements.
We note that the counterclaim was denied because Reyes failed to prove that it was in the nature of a
compulsory counterclaim, and he did not pay docket fees thereon, even as the CA found that Reyes
"never testified to prove his allegations as regards his counterclaims." Yet, the records of the reversion
case reveal that Reyes adduced ample evidence of the extent of the improvements he introduced and
the expenses he incurred therefor. This is reflected in the findings of the CA in the case at bench, and
we concur with the appellate court when it said:

But this Court notes that while Reyes was half-hearted in his opposition to the reversion, he
instead focused on proving the improvements he has introduced on the land, its extent and his
expenses. Despite these proofs, the Decision of April 13, 1992 made no mention nor provision
for the improvements on the land. With this legal vacuum, Reyes could not exercise the options
allowed the sower and planter in good faith. This thus left him no other alternative but to avail of
Paragraph (d) of Section 10 of Rule 39 of the 1997 Rules of Civil Procedure in order to collect
or get a return of his investment as allowed to a sower and planter in good faith by the Civil
Code.

Correlatively, the courts in the reversion case overlooked the issue of whether Reyes, vis-à-vis his
improvements, is a builder or planter in good faith. In the instant case, the issue assumes full
significance, because Articles 44825 and 54626 of the Civil Code grant the builder or planter in good
faith full reimbursement of useful improvements and retention of the premises until reimbursement is
made. A builder or planter in good faith is one who builds or plants on land with the belief that he is the
owner thereof, unaware of any flaw in his title to the land at the time he builds or plants on it. 27

On this issue, we are disposed to agree with the CA that Reyes was a planter in good faith. Reyes was
of the belief that he was the owner of the subject land; in fact, a TCT over the property was issued in
his name. He tilled the land, planted fruit trees thereon, and invested money from 1970. He received
notice of the Republic's claim only when the reversion case was filed on May 13, 1987. The trees are
now full-grown and fruit-bearing.

To order Reyes to simply surrender all of these fruit-bearing trees in favor of the State -- because the
decision in the reversion case declaring that the land is part of inalienable forest land and belongs to
the State is already final and immutable -- would inequitably result in unjust enrichment of the State at
the expense of Reyes, a planter in good faith.

Nemo cum alterius detrimento locupletari potest.28 This basic doctrine on unjust enrichment simply
means that a person shall not be allowed to profit or enrich himself inequitably at another's
expense.29 There is unjust enrichment 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.30 Article 22 of the Civil Code states the rule in this wise:

ART. 22. 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.

The requisites for the application of this doctrine are present in the instant case. There is enrichment
on the part of the petitioner, as the State would come into possession of -- and may technically
appropriate -- the more than one thousand fruit-bearing trees planted by the private respondent. There
is impoverishment on the part of Reyes, because he stands to lose the improvements he had
painstakingly planted and invested in. There is lack of valid cause for the State to acquire these
improvements, because, as discussed above, Reyes introduced the improvements in good faith. Thus,
the Court of Appeals did not commit any error in ruling that Reyes is entitled to the benefits of Articles
448 and 546 of the Civil Code.

Thus, even if we accept the OSG's submission that Reyes' entitlement to these benefits is not absolute
because he can no longer claim good faith after the filing of the reversion case in 1987, still, there is no
gainsaying that prior to that ― all the way back to 1970 ― he had possessed the land and introduced
improvements thereon in good faith. At the very least, then, Reyes is entitled to these benefits for the
17 years that he had been a planter in good faith.

However, we are mindful of the fact that the subject land is currently covered by Agro-Forestry Farm
Lease Agreement (AFFLA) No. 175 issued by the Ministry of (now Department of Environment and)
Natural Resources in favor of Atty. Augusto D. Marte, which will expire on December 21, 2011. By the
terms of the AFFLA, the lessee shall, among others, do all in his power to suppress fires, cooperate
with the Bureau of Forest Development (BFD) in the protection and conservation of the forest growth
in the area and undertake all possible measures to insure the protection of watershed and
environmental values within the leased area and areas adjacent thereto. This obligation to prevent any
damage to the land subject of the lease is consonant with fundamental principles and state policies set
forth in Section 16,31 Article II and Section 4,32 Article XII of the Constitution.

To allow Reyes to remove the fruit-bearing trees now full-grown on the subject land, even if he is legally
entitled to do so, would be risking substantial damage to the land. It would negate the policy
consideration underlying the AFFLA -- to protect and preserve the biodiversity and the environment,
and to prevent any damage to the land. Further, it would violate the implicit mandate of Article 547 of
the Civil Code which provides:

ART. 547. If the useful improvements can be removed without damage to the principal thing, the
possessor in good faith may remove them unless the person who recovers the possession
exercises the option under paragraph 2 of the preceding article.
In this light, the options that Reyes may exercise under Articles 448 and 546 of the Civil Code have
been restricted. It is no longer feasible to permit him to remove the trees he planted. The only equitable
alternative would be to order the Republic to pay Reyes the value of the improvements he introduced
on the property. This is only fair because, after all, by the terms of the AFFLA, upon the expiration of
the lease or upon its cancellation if there be any violation or breach of its terms, all permanent
improvements on the land shall pass to the ownership of the Republic without any obligation on its part
to indemnify the lessee.

However, the AFFLA is not due to expire until December 21, 2011. In the interim, it is logical to assume
that the lessee, Atty. Augusto D. Marte, will derive financial gain from the fruits that the trees planted
by Reyes would yield. In fact, Atty. Marte may already have profited therefrom in the past several years.
It is, therefore, reasonable to grant the Republic the right of subrogation against the lessee who may
have benefited from the improvements. The Republic may, thus, demand reimbursement from Atty.
Marte for whatever amount it will have to pay Reyes for these improvements.

As to the OSG's insistent invocation of res judicata and the immutability of final judgments, our ruling
in Temic Semiconductors, Inc. Employees Union (TSIEU)-FFW, et al. v. Federation of Free Workers
(FFW), et al.33 is instructive:

It is axiomatic that a decision that has acquired finality becomes immutable and unalterable. A
final judgment may no longer be modified in any respect, even if the modification is meant to
correct erroneous conclusions of fact and law; and whether it be made by the court that rendered
it or by the highest court in the land. Any act which violates such principle must immediately be
struck down. Indeed, the principle of conclusiveness of prior adjudications is not confined in its
operation to the judgments of what are ordinarily known as courts, but it extends to all bodies
upon which judicial powers had been conferred.

The only exceptions to the rule on the immutability of a final judgment are: (1) the correction of
clerical errors; (2) the so-called nunc pro tunc entries which cause no prejudice to any party; (3)
void judgments; and (4) whenever circumstances transpire after the finality of the decision
rendering its execution unjust and inequitable.

In the exercise of our mandate as a court of justice and equity,34 we rule in favor of Reyes pro hac vice.
We reiterate that this Court is not precluded from rectifying errors of judgment if blind and stubborn
adherence to the doctrine of immutability of final judgments would involve the sacrifice of justice for
technicality.35 Indubitably, to order the reversion of the subject land without payment of just
compensation, in absolute disregard of the rights of Reyes over the improvements which he, in good
faith, introduced therein, would not only be unjust and inequitable but cruel as well.

WHEREFORE, the instant Petition is DENIED. The Decision dated June 4, 2004 of the Court of
Appeals is AFFIRMED with MODIFICATION in that:

1) The Regional Trial Court of Pinamalayan, Oriental Mindoro, Branch 41, is hereby DIRECTED
to determine the actual improvements introduced on the subject land, their current value and the
amount of the expenses actually spent by private respondent Danilo Reyes for the said
improvements thereon from 1970 until May 13, 1987 with utmost dispatch.

2) The Republic, through the Bureau of Forest Development of the Department of Environment
and Natural Resources, is DIRECTED to pay private respondent Danilo Reyes the value of such
actual improvements he introduced on the subject land as determined by the Regional Trial
Court, with the right of subrogation against Atty. Augusto D. Marte, the lessee in Agro-Forestry
Farm Lease Agreement No. 175.
No costs.

SO ORDERED.
CAR COOL PHILIPPINES, INC. VS. USHIO REALTY AND DEVELOPMENT CORP.G.R. No. 138088,
January 23, 2006

THIRD DIVISION

G.R. No. 138088 January 23, 2006

CAR COOL PHILIPPINES, INC., represented in this act by its President and General Manager
VIRGILIO DELA ROSA, Petitioner,
vs.
USHIO REALTY AND DEVELOPMENT CORPORATION, Respondent.

DECISION

CARPIO, J.:

The Case

This is a petition for review1 of the Decision2 dated 13 August 1998 and the Resolution dated 10 March
1999 of the Court of Appeals in CA-G.R. SP No. 43134. The Court of Appeals affirmed with modification
the decision of the trial court by ordering the payment of P18,000 monthly rental starting 19 December
1995 until Car Cool Philippines, Inc. vacates the premises.

The Facts

On 19 December 1995, Ushio Realty and Development Corporation ("USHIO Realty") filed an
ejectment case against Car Cool Philippines, Inc. ("CAR COOL") to recover possession of a parcel of
land ("property") located at No. 72 (137) Quezon Avenue, corner Victory Avenue, Quezon City.

USHIO Realty alleges that the former owners of the property, Spouses Hector and Gloria Hizon Lopez
("Spouses Lopez"), leased the property to CAR COOL since 1972. In 1990, the Spouses Lopez and
CAR COOL executed a written lease agreement over the property for two years. On 16 August 1992,
on the expiration of the written lease agreement, the Spouses Lopez allowed CAR COOL to continue
occupying the property upon payment of monthly rentals. Later, a verbal month-to-month lease
agreement continued until 31 August 1995. On 15 June 1995, Hector Lopez wrote CAR COOL to inform
it of his intention to sell the property. Hector Lopez gave CAR COOL the option to buy the property
before offering the same to other prospective buyers. CAR COOL failed to respond to the offer. On 28
June 1995, Hector Lopez terminated the verbal lease agreement and gave CAR COOL until 31 August
1995 to vacate the property. In his subsequent letters dated 22 July, 1 August and 12 August 1995,
Hector Lopez reiterated his demand for CAR COOL to vacate the property. CAR COOL allegedly
ignored the demands to vacate the property and continued to occupy the same.

In a letter dated 31 August 1995, USHIO Realty informed CAR COOL that it had purchased the property
from the Spouses Lopez. USHIO Realty gave CAR COOL another 30 days from 31 August 1995 to
vacate the property. CAR COOL failed to respond to the demand letter and continued to occupy the
property. On 3 December 1995, USHIO Realty sent a final demand to CAR COOL, giving it a non-
extendible 15 days within which to vacate the property. CAR COOL refused to vacate the property,
prompting USHIO Realty to file the complaint for ejectment on 19 December 1995.

CAR COOL, on the other hand, alleges that USHIO Realty was aware of the lease agreement between
CAR COOL and the former owner, Hector Lopez. According to CAR COOL, on 20 January 1995, Hector
Lopez agreed to renew the lease for another two years to cover the period from 1 January 1995 to
December 1996, for a monthly rental of P18,000 and an additional security deposit of P216,000. In
compliance with the agreement to renew the lease, CAR COOL claims that it paid in advance to Hector
Lopez P205,200 representing the monthly rentals for the period from 1 January 1995 to 31 December
1995. CAR COOL also claims to have paid in advance P205,200 covering monthly rentals for the period
from 1 January 1996 to 31 December 1996, plus P216,000 as additional security deposit for 1 January
1996 to 1 January 1997. Upon his receipt of the advance rentals and security deposit, Hector Lopez
allegedly promised to execute a written contract of lease for two years covering the period from 1
January 1995 to 31 December 1996.

CAR COOL further alleges that USHIO Realty, despite its knowledge of the lease agreement, still
demanded that CAR COOL vacate the property on the ground that USHIO Realty had already bought
the property from the Spouses Lopez. On 1 October 1995, USHIO Realty allegedly broke into the
leased premises, demolished the improvements on the premises, and threatened and inflicted bodily
injuries upon two employees of CAR COOL. Virgilio de la Rosa, CAR COOL’s President and General
Manager, was able to enter the leased premises the following day and found some personal items
missing. On 9 October 1995, CAR COOL filed a complaint-affidavit against the agents and
representative of USHIO Realty for robbery with force upon things and malicious mischief. 3 CAR COOL
later amended the complaint-affidavit to include the charge of grave coercion. 4

On 21 November 1995, CAR COOL filed a complaint for specific performance and damages with the
Regional Trial Court of Quezon City. The complaint sought to compel Hector Lopez to execute a written
lease contract for the period from 1 January 1995 until 31 December 1996 and for USHIO Realty to be
bound by the contract.

On 19 June 1996, the Metropolitan Trial Court rendered a decision in the ejectment case in favor of
USHIO Realty. The dispositive portion of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff USHIO
Realty Development Corporation and against the defendant CAR COOL Philippines, Inc. represented
by President and General Manager Virgilio dela Rosa as follows:

1. Ordering the defendant and all persons claiming right under her to surrender the possession
of the premises to the plaintiff and vacate therefrom;

2. Ordering the defendant to pay plaintiff the amount of P18,000.00 per month as reasonable
compensation for the use of the premises beginning October 1995 and every month thereafter
until the premises is finally vacated;

3. Defendant to pay plaintiff the sum of P20,000.00 as and by way of attorney’s fees; and

4. Defendant to pay [the] cost.

SO ORDERED.5

CAR COOL appealed to the Regional Trial Court. On 28 October 1996, the Regional Trial Court
rendered its decision affirming the decision of the Metropolitan Trial Court.

On appeal, the Court of Appeals affirmed the trial court’s decision with the modification that the payment
of P18,000 monthly rental should start from 19 December 1995 until CAR COOL finally vacates the
property. The Court of Appeals held that CAR COOL’s possession of the property became unlawful
only on 19 December 1995, upon receipt of the demand to vacate the property and CAR COOL’s refusal
to surrender possession.6

On 15 September 1998, CAR COOL filed a motion for reconsideration, which the Court of Appeals
denied. Hence, the instant petition.

The Issue

CAR COOL raises the sole issue of whether the Court of Appeals erred in awarding damages by way
of rentals and attorney’s fees in favor of USHIO. 7

The Ruling of the Court

We find the petition partly meritorious.

Award of damages in the form of rentals

CAR COOL asserts that to award damages to USHIO Realty would constitute unjust enrichment at the
expense of CAR COOL. CAR COOL claims that it never benefited from its occupation of the property
after USHIO Realty’s agents entered the property on 1 October 1995 and unlawfully destroyed CAR
COOL’s office, equipment and spare parts. Because of the destruction of the equipment and spare
parts needed to operate its business, CAR COOL asserts that it was no longer possible to continue its
business operations.8

We are not convinced.

Rule 70 of the Rules of Civil Procedure, which governs the rule on ejectment (forcible entry and unlawful
detainer), provides under Sections 17 and 19 that:

Sec. 17. Judgment. – If after trial the court finds that the allegations of the complaint are true, it shall
render judgment in favor of the plaintiff for the restitution of the premises, the sum justly due as
arrears of rent or as reasonable compensation for the use and occupation of the premises,
attorney’s fees and costs. If it finds that said allegations are not true, it shall render judgment for the
defendant to recover his costs. If a counterclaim is established, the court shall render judgment for the
sum found in arrears from either party and award costs as justice requires. (Emphasis supplied)

Sec. 19. Immediate execution of judgment; how to stay same. – If judgment is rendered against the
defendant, execution shall issue immediately upon motion, unless an appeal has been perfected and
the defendant to stay execution files a sufficient supersedeas bond, approved by the Municipal Trial
Court and executed in favor of the plaintiff to pay the rents, damages, and costs accruing down to the
time of the judgment appealed from, and unless, during the pendency of the appeal, he deposits with
the appellate court the amount of rent due from time to time under the contract, if any, as determined
by the judgment of the Municipal Trial Court. In the absence of a contract, he shall deposit with the
Regional Trial Court the reasonable value of the use and occupation of the premises for the
preceding month or period at the rate determined by the judgment of the lower court on or
before the tenth day of each succeeding month or period. The supersedeas bond shall be
transmitted by the Municipal Trial Court, with the other papers, to the clerk of the Regional Trial Court
to which the action is appealed. (Emphasis supplied)

xxx
In this case, there is no dispute on the ownership of the property. An Absolute Deed of Sale dated 14
September 1995 shows that the Spouses Lopez sold the property to USHIO Realty. 9 On 19 September
1995, the Registry of Deeds of Quezon City issued a Transfer Certificate of Title for the property in the
name of USHIO Realty.10 On 3 December 1995, USHIO Realty sent a final demand to CAR COOL,
giving it a non-extendible 15 days within which to vacate the property. When CAR COOL still refused
to vacate the property, USHIO Realty filed the complaint for ejectment on 19 December 1995.

USHIO Realty, as the new owner of the property, has a right to physical possession of the
property.11 Since CAR COOL deprived USHIO Realty of its property, CAR COOL should pay USHIO
Realty rentals as reasonable compensation for the use and occupation of the property.

Contrary to CAR COOL’s allegations, the payment of damages in the form of rentals for the property
does not constitute unjust enrichment. The Court of Appeals held:

x x x [T]he alleged payment by the petitioner as rentals were given to the former owner (Lopez) and
not to the private respondent who was not privy to the transaction. As a matter of fact, it never benefited
financially from the alleged transaction. Aside from that, the postdated checks the "private respondent"
admitted to have received, as rental payments for September to December 1995, were never encashed.
On the contrary, the private respondent even offered to return the same to the petitioner, but was
refused. [T]herefore, it did not amount to payment. 12

We have held that "[t]here is unjust enrichment 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."13 Article 22 of the Civil Code provides that "[e]very 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." The
principle of unjust enrichment under Article 22 requires two conditions: (1) that a person is benefited
without a valid basis or justification, and (2) that such benefit is derived at another’s expense or
damage.14

There is no unjust enrichment when the person who will benefit has a valid claim to such benefit. Under
Section 17 of Rule 70 of the Rules of Civil Procedure, USHIO Realty has the legal right to receive some
amount as reasonable compensation for CAR COOL’s occupation of the property.15 Thus, in Benitez
v. Court of Appeals,16 we held that:

xxx Damages are recoverable in ejectment cases under Section 8, Rule 70 of the Revised Rules of
Court. These damages arise from the loss of the use and occupation of the property, and not the
damages which private respondents may have suffered but which have no direct relation to their loss
of material possession. Damages in the context of Section 8, Rule 70 is limited to "rent" or "fair market
value" for the use and occupation of the property.

The Metropolitan Trial Court and the Regional Trial Court assessed against CAR COOL the amount
of P18,000 per month as reasonable compensation for CAR COOL’s use of the property. Both trial
courts held that the P18,000 monthly payment should run from October 1995 until CAR COOL vacates
the property. The Court of Appeals sustained the P18,000 monthly rental but held that the start of
payment should be from 19 December 1995 until CAR COOL vacates the property.

The records show that CAR COOL already vacated the property on 18 November 1996. The Sheriff of
the Regional Trial Court of Quezon City certified that on 18 November 1996, he turned over the
possession of the property to USHIO Realty.17 Thus, the P18,000 monthly rental for the use of the
property should run from 19 December 1995 until 18 November 1996 or a period of 11 months.
Therefore, the total amount due as reasonable compensation for the use of the property
is P198,000.18 The trial court established this amount with reasonable accuracy or certainty because
the trial court based this amount on the latest monthly rental CAR COOL paid the previous owner of
the property.19 Accordingly, this amount should earn interest at 6 percent per annum from 19 November
1996 until finality of this decision, after which the accrued interest, together with the P198,000, shall
earn interest at 12 percent per annum until full payment. 20

Attorney’s Fees

We cannot sustain the award of attorney’s fees. The Court of Appeals failed to state explicitly in its
decision the basis for the award of attorney’s fees. The award of attorney’s fees is the exception rather
than the rule and the court must state explicitly the legal reason for the award of attorney’s
fees.21 In ABS-CBN Broadcasting Corp. v. CA,22 we held that:

The general rule is that attorney’s fees cannot be recovered as part of damages because of the policy
that no premium should be placed on the right to litigate. They are not to be awarded every time a party
wins a suit. The power of the court to award attorney’s fees under Article 2208 demands factual, legal,
and equitable justification. Even when a claimant is compelled to litigate with third persons or to incur
expenses to protect his rights, still attorney’s fees may not be awarded where no sufficient showing of
bad faith could be reflected in a party’s persistence in a case other than an erroneous conviction of the
righteousness of his cause.

WHEREFORE, we AFFIRM the Decision dated 13 August 1998 and the Resolution dated 10 March
1999 of the Court of Appeals in CA-G.R. SP No. 43134 with the modification that the P18,000 monthly
rental for the use of the property should run from 19 December 1995 until 18 November 1996,
aggregating P198,000. This amount shall earn 6 percent interest per annum from 19 November 1996
until finality of this decision, after which the accrued interest, together with the P198,000, shall earn
interest at 12 percent per annum until full payment. We delete the award of attorney’s fees. Costs
against petitioner.

SO ORDERED.
SPS. MARIO & CORAZON VILLALVA v. RCBC SAVINGS BANK G.R. NO. 165661; August 28, 2006

SECOND DIVISION

G.R. No. 165661 August 28, 2006

SPS. MARIO & CORAZON VILLALVA, Petitioners,

vs.
RCBC SAVINGS BANK, Respondent.

DECISION

PUNO, J.:

This case involves a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure
which seeks to reverse the decision of the Seventh Division of the Court of Appeals in CA–G.R. SP No.
76574.

The facts.

In June 1993, petitioner spouses issued forty-eight (48) checks totaling P547,392.00 to cover
installment payments due on promissory notes executed in favor of Toyota, Quezon Avenue (TQA) for
the purchase of a ’93 Toyota Corolla. 1 The promissory notes were secured by a Chattel Mortgage
executed by the petitioner spouses on the vehicle in favor of TQA. 2 Under the Deed of Chattel
Mortgage, petitioner spouses were to insure the vehicle against loss or damage by accident, theft and
fire, and endorse and deliver the policies to the mortgagor, viz.:

The MORTGAGOR covenants and agrees that he/it will cause the property(ies) hereinabove
mortgaged to be insured against loss or damage by accident, theft and fire for a period of one year
from date hereof with an insurance company or companies acceptable to the MORTGAGEE in an
amount not less than the outstanding balance of the mortgage obligations and that he/it will make all
loss, if any, under such policy or policies, payable to the MORTGAGEE or its assigns as its interest
may appear and deliver such policy to the MORTGAGEE forthwith. The said MORTGAGOR further
covenants and agrees that in default of his/its effecting such insurance and delivering the policies so
endorsed to the MORTGAGEE on the day of the execution of this mortgage, the MORTGAGEE may
at its option, but without any obligation to do so, effect such insurance for the account of the
MORTGAGOR and that any money so disbursed by the MORTGAGEE shall be added to the principal
indebtedness, hereby secured and shall become due and payable at the time for the payment of the
first installment to be due under the note aforesaid after the date of such insurance and shall bear
interest and/or finance charge at the same rate as the principal indebtedness. The MORTGAGOR
hereby irrevocably authorizes the MORTGAGEE or its assigns to procure for the account of the
MORTGAGOR the insurance coverage every year thereafter until the mortgage obligation is fully paid
and any money so disbursed shall be payable and shall bear interest and/or finance charge in the same
manner as stipulated in the next preceding sentence. It is understood that MORTGAGEE has no
obligation to carry out aforementioned authority to procure insurance for the account of the
MORTGAGOR. 3

On June 22, 1993, the promissory notes and chattel mortgage were assigned to Rizal Commercial
Banking Corporation (RCBC). 4 They were later assigned by RCBC to RCBC Savings Bank. 5 In time,
all forty-eight (48) checks issued by the petitioner spouses were encashed by respondent RCBC
Savings Bank. 6
The evidence shows that the petitioner spouses faithfully complied with the obligation to insure the
mortgaged vehicle from 1993 until 1996. 7 For the period of August 14, 1996 to August 14,
1997, 8 petitioner spouses procured the necessary insurance but did not deliver the same to the
respondent until January 17, 1997. 9 As a consequence, respondent had the mortgaged vehicle insured
for the period of October 21, 1996 to October 21, 1997 and paid a P14,523.36 insurance
premium. 10 The insurance policy obtained by respondent was later cancelled due to the insurance
policy secured by petitioner spouses over the mortgaged vehicle, and respondent bank was
reimbursed P10,939.86 by Malayan Insurance Company. 11 The premium paid by respondent bank
exceeded the reimbursed amount paid by Malayan Insurance Company by P3,583.50.

On February 10, 1999, respondent sent a letter of demand to the petitioners for P12,361.02 allegedly
representing unpaid obligations on the promissory notes and mortgage as of January 31, 1999. In lieu
thereof, respondent demanded that petitioner spouses surrender the mortgaged vehicle within five days
from notice. 12 The petitioner spouses ignored the demand letter.

On April 5, 1999, respondent, in order to get the ’93 Toyota Corolla, filed a complaint for Recovery of
Possession with Replevin with the Metropolitan Trial Court of Pasay City, which was raffled to Branch
45 thereof. 13 Two weeks later, or on April 19, 1999, the respondent caused the enforcement of a writ
of replevin and recovered possession of the mortgaged vehicle. 14 On June 18, 1999, petitioner
spouses filed their Answer with Compulsory Counterclaim for moral damages, exemplary damages and
attorney’s fees. 15 Petitioners asserted that they insured the mortgaged vehicle in compliance with the
Deed of Chattel Mortgage.

On June 28, 2002, the Metropolitan Trial Court rendered a decision in favor of petitioners and ordered
respondent to pay petitioner spouses P100,000.00 in moral damages, P50,000.00 in exemplary
damages, P25,000.00 in attorney’s fees, and the costs and expenses of litigation. 16 Respondent’s
Motion for Reconsideration was denied on September 16, 2002. 17

Respondent appealed the decision to the Regional Trial Court of Pasay City on October 3, 2002. 18 The
case was raffled to Branch 114. On March 21, 2003, the Regional Trial Court affirmed the judgment of
the Metropolitan Trial Court in toto. 19

Undaunted, the respondent filed a petition for review with the Court of Appeals, pursuant to Rule 42 of
the 1997 Rules of Civil Procedure, assailing the March 21, 2003 decision of the Regional Trial
Court. 20 On July 8, 2004, the Court of Appeals reversed the decision of the Regional Trial Court. It
ordered petitioner spouses to pay respondent P3,583.50 within thirty days of finality of the decision,
and issued a writ of replevin as regards the mortgaged vehicle. 21 Petitioners’ Motion for
Reconsideration was denied, hence, the present petition for certiorari.

The petitioners alleged that in ruling against them, the Court of Appeals erred when it failed to consider
two pieces of evidence: (1) an Acknowledgment Receipt dated January 17, 1997, which shows that the
premium for the second insurance policy had been refunded to the respondent bank; and (2) an
Endorsement by the Malayan Insurance Company dated June 11, 1997, which shows that petitioners
handed the required insurance policy to the respondent. The petitioners also point out that the
respondent was furnished a copy of the insurance policy on January 17, 1997. 22

On the other hand, respondent contends that petitioners seek a review of factual findings which the
Supreme Court cannot do as it is not a trier of facts. 23 It further argues that no reversible errors were
made by the Court of Appeals, and to set aside its decision would result in the unjust enrichment of the
petitioners. 24

We rule for the petitioners.

The key issue is whether petitioners failed to comply with their obligation to insure the subject vehicle
under the Deed of Chattel Mortgage. The Deed of Chattel Mortgage requires that the petitioners (1)
secure the necessary insurance and (2) deliver the policies so endorsed to the respondent on the day
of the execution of this mortgage.

We hold that petitioners did not default in the performance of their obligation. As a rule, demand is
required before a party may be considered in default. 25 However, demand by a creditor is not
necessary in order that delay may exist: (1) when the obligation or the law expressly so declares; (2)
when from the nature and the circumstances of the obligation it appears that the designation of the time
when the thing is to be delivered or the service is to be rendered was a controlling motive for the
establishment of the contract; or (3) when demand would be useless, as when the obligor has rendered
it beyond his power to perform. None of the exceptions are present in this case. It is clear from the
records that the first and third exceptions are inapplicable. The second exception cannot also be applied
in light of our ruling in Servicewide Specialists, Incorporated v. Court of Appeals. 26 In that case, this
Court observed that the Deed of Chattel Mortgage required that two conditions should be met before
the mortgagee could secure the required insurance: (1) default by the mortgagors in effecting renewal
of the insurance, and (2) failure to deliver the policy with endorsement to mortgagee. The mortgagee
contended that notice was not required due to the nature of the obligation, and that it was entitled to
renew the insurance for the account of the mortgagors without notice to the latter should the mortgagors
fail to renew the insurance coverage. To substantiate its claim, the mortgagee relied on the Chattel
Mortgage provision that the car be insured at all times. This Court rebuffed the mortgagee’s arguments:

If petitioner was aware that the insurance coverage was inadequate, why did it not inform private
respondent about it? After all, since petitioner was under no obligation to effect renewal thereof, it is
but logical that it should relay to private respondents any defect of the insurance coverage before itself
assuming the same. 27

Due to the mortgagee’s failure to notify the mortgagors prior to application of the latter’s payments to
the insurance premiums, this Court held that the mortgagors had not defaulted on their obligation to
secure insurance over the mortgaged vehicle, and affirmed the Regional Trial Court’s decision
dismissing the mortgagee’s complaint for replevin.

In the case at bar, the respondent failed to demand that petitioners comply with their obligation to
secure insurance coverage for the mortgaged vehicle. Following settled jurisprudence, we rule that the
petitioners had not defaulted on their obligation to insure the mortgaged vehicle and the condition sine
qua non for respondent to exercise its right to pay the insurance premiums over the subject vehicle has
not been established.

The respondent further contends that its payment of the insurance premiums on behalf of the petitioners
unjustly enriched the latter. Respondent adverts to the provisions on quasi-contractual obligations in
the New Civil Code. 28 Enrichment consists of every patrimonial, physical or moral advantage, so long
as it is appreciable in money. It may also take the form of avoidance of expenses and other
indispensable reductions in the patrimony of a person. It may also include the prevention of a loss or
injury. 29 In the case at bar, petitioner spouses were not enriched when respondent obtained insurance
coverage for the mortgaged vehicle as the petitioner spouses had already obtained the required
insurance coverage for the vehicle from August 14, 1996 to August 14, 1997. 30

Finally, we are aware of the rule that findings of fact of the Court of Appeals are given great weight by
this Court. Nevertheless, it is this Court’s duty to carefully review factual findings where the appreciation
of the appellate court and the trial court differ from each other. In the case at bar, the findings of the
appellate court are clearly not borne out by the evidence of the parties and necessarily, we have to
reject to them.
IN VIEW WHEREOF, the petition is GRANTED. The decision of the Seventh Division of the Court of
Appeals promulgated on July 8, 2004 and its resolution promulgated on September 28, 2004 are
REVERSED and SET ASIDE. The June 28, 2002 decision and September 16, 2002 resolution of the
Metropolitan Trial Court, Pasay City, Branch 45, as well as the March 21, 2003 decision of the Regional
Trial Court, Pasay City, Branch 114, are REINSTATED.

No costs.

SO ORDERED.
 Article 24 – Vigilance of the courts to protect the disadvantaged in contractual, property
or other relations

ELADlA DE LIMA vs. LAGUNA TAYABAS CO. G.R. No. L-35697-99; April 15, 1988

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-35697-99 April 15, 1988

ELADlA DE LIMA, POTENCIANO REQUIJO, NEMESIO FLORES, REYNALDO REQUIJO,

DOMINADOR REQUIJO and MARIO REQUIJO, petitioners,
vs.
LAGUNA TAYABAS CO., CLARO SAMONTE, SANTIAGO SYJUCO, INC., (SEVEN-UP
BOTTLING CO., OF THE PHILIPPINES) and PORVENIR ABAJAR BARRETO, respondents.

Leon O. Ty, Gesmundo and Gesmundo and Renato B. Vasquez for petitioners.

Domingo E. de Lara and Associates for respondents.

GANCAYCO, J.:

Before Us is a petition for review on certiorari of the decision De Lima vs. Laguna Tayabas Co. of the
Court of Appeals 1 affirming the decision of the court a quo with modification to include an award of
legal interest on the amounts adjudged in favor of the petitioners from the date of the decision of the
Court of Appeals to the time of actual payment.

This present action arose from a collision between a passenger bus of the Laguna Tayabas Bus Co.
(LTB) and a delivery truck of the Seven-up Bottling Co. of the Philippines which took place on June 3,
1958 resulting in the death of Petra de la Cruz and serious physical injuries of Eladia de Lima and
Nemesio Flores, all passengers of the LTB bus. Three civil suits were filed against herein respondents
which were consolidated for trial before the Court of First Instance of Laguna (San Pablo City).

On December 27, 1963, the court a quo rendered its decision, the dispositive part of which reads as
follows:

WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered

against the defendants LTB Co. Inc. and Claro Samonte, who are hereby ordered to pay
jointly and severally, the resolve plaintiffs.

In Civil Case No. SP-239; Plaintiff Eladia de Lima:

1. For loss of P960.00

money
and
 medical
expenses.
2. For loss of
earnings
from June
3, 1958 to
November . 924.00
3, 1958
3. For
expenses
of
litigation
and
attorney's
fees .
.1,000.00
TOTAL P
2,884.00

In Civil Case No. SP-240; Plaintiffs Requijos:

1 For the P 3,883.82

death of
Petra de
la Cruz
including
funeral
expenses
2 For the 800.00
money
lost
during
the trip
3 Moral
damages
for
mental
anguish
(of 3,000.00
Mercado
vs. Lira,
et al.)
4 For the
loss of
 earning
capacity
for
5 years 8,000.00
5 For
expenses
of
litigation
and
attorney's 2,500.00
fees
TOTAL P18,183.82

In Civil Case No. SP-268: To Plaintiff Nemesio Flores:

1. For loss
of
earning
capacity
for
5 year
from
June 3,
1958 at
the
rate of P 3,680.00
P228.00
a month
2. For
expenses
of
litigation
and
attorney's 1,000.00
fees.
TOTAL P14,680.00

Plaintiffs in Civil Cases Nos. SP-239 and SP-240 filed a motion for reconsideration of the decision
seeking an award of legal interest on the amounts adjudged in their favor from the date of the said
decision but their motion was not acted upon by the court a quo.

All of the plaintiffs voluntarily desisted from appealing the decision by reason of financial necessity and
in the hope that the defendants LTB Co. and its driver Claro Samonte will be persuaded to make
immediate payment to them as adjudged by the court a quo. Only the said defendants appealed the
decision to the Court of Appeals.
In the motion of petitioners dated December 29, 1971 filed with the Court of Appeals, 2 they sought for
an immediate decision of the case with a prayer for the granting of legal interest from the date of the
decision of the court a quo and for the increase to P12,000.00 of the civil indemnity of P3,000.00
awarded for the death of Petra de la Cruz.
3
On January 31, 1972, the now disputed decision of the Court of Appeals was promulgated.

Petitioners moved for a reconsideration of this decision 4 seeking its modification so that the legal
interest awarded by the Appellate, Court will start to run from the date of the decision of the trial court
on December 27, 1963 instead of January 31, 1972, the date of the decision of the Court of Appeals.
Petitioner potenciano Requijo as heir of the deceased Petra de la Cruz further sought an increase in
the civil indemnity of P3,000.00 to P 12,000.00.

The Appellate Court denied the motion for reconsideration holding that since the plaintiffs did not appeal
from the failure of the court a quo to award interest on the damages and that the court on its own
discretion awarded such interest in view of Art. 2210 of the Civil Code, the effectivity of the interest
should not be rolled back to the time the decision of the court a quo was rendered. 5

Hence this petition.

The assignment of errors raised the following issues, to wit:

1) Whether or not the Court of Appeal; erred in granting legal interest on damages to start only from
the date of its decision instead of from the date of the trial court's decision;

2) Whether or not the Court of Appeals erred in not increasing the indemnity for the death of Petra de
La Cruz (in Civil Case No. SP-240) from P3,000 to P12,000.00.

We find merit in the petition.

Under the first issue, petitioners contend that the ruling of she Appellate Court departs from the
consistent rulings of this court that the award of the legal rate of interest should be computed from the
promulgation of the decision of the tonal court.

Respondents counter that petitioners having failed to appeal from the lower court's decision they. are
now precluded from questioning the ruling of the Court of Appeals.

It is true that the rule is well-settled that a party cannot impugn the correctness of a judgment not
appealed from by him, and while he may make counter assignment of errors, he can do so only to
sustain the judgment on other grounds but not to seek modification or reversal thereof, 6 for in such
case he must appeal. 7 A party who does not appeal from the decision may not obtain any affirmative
relief from the appellate court other than what he has obtained from the lower court, if any, whose
decision is brought up on appeal. 8

However, respondents failed to note that the legal interest was awarded by the Appellate Court in its
discretion based on equitable grounds which is duly sanctioned by Art. 2210 of the Civil Code which
provides —

Interest may, in the discretion of the court, be allowed upon damages awarded for breach
of contract.
Thus, the Appellate Court pointed out —

A further examination of the record will also show that the plaintiffs in Civil Cases Nos.
SP-239 and SP-240 moved for the reconsideration of the decision appealed from to
include the award of legal interest on the amounts adjudicated from the date of the
decision, but said motion was not acted upon by the court a quo. Although said plaintiffs
failed to appeal on this issue, and did not file their brief to reiterate their claim for interest
thereon, the plaintiff in Civil Case No. SP-268, Nemesio Flores, filed his brief and prayed
for the imposition of interest from the date of the decision. We are not left without
discretion to resolve this issue, considering the provision of Article 2210, New Civil Code,
stating that "Interest may, in the petition of the court, be allowed upon damages awarded
for breach of contract." There is no doubt that the damages awarded in these civil cases
arise from the breach of a contractual obligation on the part of the defendants- appellants.
But to grant the imposition of interest on the amounts awarded to and as prayed for by
one of the plaintiffs and deny the same to the others considering that the cases arose
from one single incident would be, to Our mind, unfair and inequitous. In the light,
therefore, not only of the provision of the Civil Code above referred to, but also the facts
and circumstances obtaining in these cases. We believe that on equitable grounds legal
interest, should be allowed on the amounts adjudged in favor of the plaintiffs from the
date of this decision up to the time of actual payment thereof.

Also noteworthy is the case of Fores v. Miranda 9 where this Court upheld the granting by the Court of
Appeals of attorney's fees even if the respondent, a jeepney passenger injured in a vehicular accident,
did not appeal from the decision of the trial court. The Appellate Court found the award to be justified
because the respondent asked for damages in his answer and the said court considered the attorney's
fees as included in the concept of damages which can be awarded whenever the court deems it just
and equitable (Art. 2208, Civil Code of the Philippines).

At any rate, this Court is inclined to adopt a liberal stance in this case as We have done in previous
decisions where We have held that litigations should, as much as possible be decided on their merits
and not on technicality. 10

We take note of the fact that petitioners are litigating as paupers. Although they may not have appealed,
they had filed their motion for reconsideration with the court a quo which unfortunately did not act on it.
By reason of their indigence, they failed to appeal but petitioners De Lima and Requijo had filed their
manifestation making reference to the law and jurisprudence upon which they base their prayer for
relief while petitioner Flores filed his brief.

Pleadings as well as remedial laws should be construed liberally in order that the litigants may have
ample opportunity to pursue their respective claims and that a possible denial of substantial justice due
to legal technicalities may be avoided. 11

Moreover, under the circumstances of this case where the heirs of the victim in the traffic accident
chose not to appeal in the hope that the transportation company will pay the damages awarded by the
lower court but unfortunately said company still appealed to the Court of Appeals, which step was
obviously dilatory and oppressive of the rights of the said claimants: that the case had been pending in
court for about 30 years from the date of the accident in 1958 so that as an exception to the general
rule aforestated, the said heirs who did not appeal the judgment, should be afforded equitable relief by
the courts as it must be vigilant for their protection. 12 The claim for legal interest and increase in the
indemnity should be entertained in spite of the failure of the claimants to appeal the judgment.
We take exception to the ruling of the Appellate Court as to the date when the legal interest should
commence to ran. In view of the consistent rulings of this Court, We hold that the legal interest of six
percent (6) 13 on the amounts adjudged in favor of petitioners should start from the time of the rendition
of the trial court's decision on December 27, 1963 instead of January 31, 1972, the promulgation of the
decision of the Court of Appeals. 14

As to the second issue, civil indemnity for the death of Petra de la Cruz was properly awarded by virtue
of Art. 1764 in relation to Art. 2206 of the Civil Code of the Philippines which allows a minimum
indemnity of P3,000.00 for the death of a passenger caused by the breach of contract by a common
carrier. In accordance with prevailing jurisprudence the indemnity of P3,000.00 should be increased to
P30,000.00 and not P12,000.00 as prayed for by petitioner.

If the transportation company had only accepted the judgment of the trial court and paid its just awards
instead of appealing the same to the Court of Appeals, no further delay would have been occasioned
on the simple issue of interest and indemnity. To mitigate the impact of such a great delay in this case
the Court finds ample justification in the aforesaid award for interest and indemnity. We hope this relief
is not too late.

WHEREFORE, the petition is hereby GRANTED, the subject decision is modified in that the legal
interest on the damages awarded to petitioners commences from the date of the decision of the court a
quo until actual payment while the civil indemnity for the death of Petra de la Cruz is increased to P
30,000.00. This judgment is immediately executory and no motion for extension of time to file motion
for reconsideration shall be entertained.

SO ORDERED.
CARLOTA P. VALENZUELA vs. HONORABLE COURT OF APPEALS G.R. No. L-56168 December 22,
1988

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-56168 December 22, 1988

CARLOTA P. VALENZUELA, in her capacity as Superintendent of Banks and Authorized

Representative of the CENTRAL BANK OF THE PHILIPPINES in the Liquidation of the RURAL
BANK OF LUCENA, INC., petitioner,
vs.
HONORABLE COURT OF APPEALS, RUFINA TELOSA, DOLORES TELOSA, FE TELOSA,
ESTELITA TELOSA, MANUEL TELOSA, ROMULO TELOSA, and Minors ALFARO TELOSA,
NESTOR TELOSA and MARIO TELOSA, as represented by RUFINA TELOSA, respondents.

Alfredo L. Bautista, Marcelino de Leon and Jaime M. Cabiles for petitioner.

Vitaliano N. Aguirre for respondents.

PARAS, J.:

Invoking the provisions of Article 24 of the New Civil Code which states:

In all contractual, property or other relations, when one of the parties is at a disadvantage
on account of his moral dependence, ignorance, indigence, mental weakness, tender age
or other handicap, the Court must be vigilant for his protection.

the heirs of Carlos Telosa, a fisherman and farmer with a very limited education, initiated a complaint
before the Court of First Instance of Quezon seeking the nullification of the real estate mortgage
executed by Carlos Telosa in favor of the Rural Bank of Lucena and/or its reformation to state the real
intention of the parties. The case was docketed as Civil Case No. 7545.

The record discloses that on November 29, 1960 Carlos Telosa obtained a loan from the Rural Bank
of Lucena Inc. and as a security thereof, he mortgaged a parcel of land located at Bo. Amugeria,
Malunay, Quezon with an area of 50,000 square meters. This parcel of land was registered in the name
of the spouses Carlos Telosa & Rufina Telosa.

Several months thereafter, the Rural Bank of Lucena became a distressed bank. In a letter dated June
16, 1961 the Acting Governor of the Central Bank apprised the stockholders of the Lucena Bank that
the Monetary Board in its Resolution No. 928 which was approved on June 13, 1961 found that its
officers, directors and employees had committed certain anomalies or had resorted to unsound banking
practices which were prejudicial to the government, its depositors and creditors.

The Monetary Board later on decided to liquidate the Lucena Bank. To implement the resolution of the
Monetary Board for the said bank's liquidation, the Central Bank pursuant to Section 29 of its charter
and on the assumption that the Lucena bank was insolvent, filed with the Court of First Instance of
Manila a petition dated March 27,1962 for assistance and supervision in the liquidation of the Lucena
Bank. The case was docketed as Civil Case No. 50019 and assigned to Branch 1 thereof.

Acting on that petition, the Court of First Instance of Manila issued an order dated March 28, 1963,
directing the Lucena Bank to turn over its assets to the Central Bank's authorized representative.

The Monetary Board in its resolution No. 426 dated April 2, 1963 designated the Superintendent of
Banks Carlota P. Valenzuela or her duly authorized representative to take charge of the assets of the
Lucena bank.

The Board in its resolution of November 27, 1963 ordered the Superintendent of Banks to convert the
assets of the Lucena bank to money.

Among the accounts of the Lucena bank inventoried by the Central Bank's representative was the
account of Carlos Telosa in the principal amount of P5,000.00. A demand letter was thus sent to Carlos
Telosa on August 27, 1965 by the Central Bank examiner Agapito S. Fajardo. Because Carlos Telosa
knew that his obligation to the rural bank was only P300.00 not P5,000.00, he executed an affidavit
dated January 24,1966 (Exh. "D") protesting the demand.

On January 4,1966 Carlos Telosa paid the amount of P400.00 as evidenced by Official Receipt of the
Rural Bank (Exh. "F"). Carlos Telosa claimed this amount represented the principal and interest with a
remaining balance of P 11.25 which was paid by Dolores Telosa on April 18, 1972 as shown by official
receipt of the rural bank (Exh. "G").

Meanwhile, Carlos Telosa died on January 13,1968.

Claiming that the payments made did not fully satisfy the whole amount due because the record still
showed a balance of P9,032.22 including interest as of February 29, 1972, Napoleon R. Cruz, then
authorized deputy of the Central Bank assigned at the Lucena bank, petitioned the Deputy Provincial
Sheriff of Quezon to extra-judicially foreclose the mortgage and sell the collateral at public auction. The
foreclosure sale was scheduled on April 20, 1972.

To restrain the sheriff of Quezon from proceeding with the sale, a complaint was filed on April 18, 1972,
by the widow and children (now private respondents) of Carlos Telosa, before the Court of First Instance
of Quezon, against the Rural Bank of Lucena Inc. The plaintiffs prayed for a judgment declaring the
contract of mortgage executed by Carlos Telosa in favor of the Rural Bank of Lucena, Inc. null and void
and of no further force and effect and/or that the said contract be reformed to state the true intention
and agreement of the parties with a prayer for the issuance of writ of preliminary injunction to stop the
sheriff of Quezon from proceeding with the extra-judicial foreclosure scheduled on April 20, 1972. It
was the contention of the plaintiffs (now private respondents) that the amount of the loan obtained by
Carlos Telosa was only P300.00 and that the same had already been fully paid.

Finding that the complaint filed was not sufficient in form and substance and that the proper parties
were not impleaded, Judge Delia P. Medina of the Court of First Instance of Quezon, Branch 1, issued
an Order on April 18, 1972 directing the plaintiffs within five (5) days from notice, to amend their
complaint in order that all proper parties may be impleaded.

Meanwhile, as there was no restraining order issued, the foreclosure sale took place as scheduled on
April 20, 1972, with the Rural Bank of Lucena, Inc., as the lone and highest bidder in the auction sale
for which an award was made in its favor The certificate of sale was thereafter issued to it and the same
was registered with the Registry of Deeds on September 11, 1972.
On May 4, 1972, the plaintiffs filed their amended complaint, this time against Carlota P. Valenzuela in
her capacity as Superintendent of Banks and authorized representative of the Central Bank in the
liquidation of the Rural Bank of Lucena, Inc., as sole defendant. In addition to the prayers in their original
complaint, plaintiffs prayed in their amended complaint that the extra-judicial foreclosure sale be
annulled.

Defendant (now petitioner) moved to dismiss the amended complaint on two (2) grounds: (1) that the
trial court has no jurisdiction over the subject matter of the action as the Rural Bank of Lucena, Inc., is
in the process of liquidation in the Court of First Instance of Manila and (2) that the plaintiffs have no
cause of action against the defendant. The motion to dismiss was denied. Thereafter, defendant filed
her answer. In addition to the two grounds relied upon in the motion to dismiss, she set up the defenses
of the validity of the loan documents, reflecting in all respects the correct amount (P5,000.00) which
Carlos Telosa obtained from the Rural Bank of Lucena, Inc. and that the plaintiffs' cause of action had
already prescribed.

After trial, the court a quo rendered its decision in favor of the plaintiffs, the dispositive portion of which
reads as for lows —

WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the
defendant:

1. Ordering the reformation of Exhibit 3-CBP so as to make it reflect a mortgage over one-
half of the property covered by Tax Declaration No. 2156, to secure a loan by Carlos
Telosa in the amount of P300.00 and also to reflect the civil status of Carlos Telosa as
"married," to be signed by the plaintiffs, as heirs of Carlos Telosa, for and in his behalf;

2. Setting aside as illegal and void the extrajudicial foreclosure sale of the property
covered by Tax Declaration No. 2156, conducted by the Deputy Provincial Sheriff on April
20, 1972;

3. Ordering the defendant to deliver to the plaintiffs the property covered by Tax
Declaration No. 2156, if said defendant has caused the taking of possession thereof by
virtue of the extrajudicial foreclosure; and

4. Ordering the defendant to pay the plaintiffs from the assets of the Rural Bank of Lucena,
Inc., the amount of P2,000.00 as moral damages, P1,500.00 as attorney's fees and
P900.00, as litigation expenses.

With costs against the defendant.

SO ORDERED. (Record on Appeal, pp. 344-346).

The above decision was appealed to the Court of Appeals and in its decision 1 dated October 29,1980,
said court affirmed the decision of the lower court in toto. Hence, the instant petition for review.

Petitioner contends that (a) a separate action involving the assets, properties and record of an insolvent
bank in the process of liquidation in the Court of First Instance of Manila cannot be maintained in
another court; (b) a public instrument celebrated with all the requisites under the safeguard of a notarial
certificate is evidence of a high character and to overcome its recitals, it is incumbent upon the party
challenging it to prove his claim with clear, convincing and more than merely preponderant evidence;
(c) respondent Rufina Telosa has no factual, valid and legal basis to ask for the reformation of the real
estate mortgage contract, but even assuming that she has, her cause of action to reform had already
prescribed; (d) moral damages to warrant recovery, must be alleged in the complaint and duly proved;
(e) the reason for awarding attorney's fees and litigation expenses must be stated in the decision and
(f) there is no legal and factual basis for the application of Article 24 of the New Civil Code in the instant
case.

On the issue of jurisdiction, this Court ruled in the case of Hernandez vs. Rural Bank of Lucena, Inc.
(G.R. No. L-29791, January 10, 1978, 81 SCRA 75) that if there is a judicial liquidation of an insolvent
bank, all claims against the bank should be filed in the liquidation proceeding.

The fact that the insolvent bank is forbidden to do business, that its assets are turned
over to the superintendent of Banks, as a receiver, for conversion into cash, and that its
liquidation is undertaken with judicial intervention means that, as far as lawful and
practicable, all claims against the insolvent bank should be filed in the liquidation
proceeding. The judicial liquidation is intended to prevent multiplicity of actions against
the insolvent bank. The lawmaking body contemplated that for convenience only one
court, if possible, should pass upon the claims against the insolvent bank and that the
liquidation court should assist the Superintendent of Banks and control his operations. In
the course of the liquidation, contentious cases might arise wherein a full-dress hearing
would be required and legal issues would have to be resolved. Hence, it would be
necessary in justice to all concerned that a Court of First Instance should assist and
supervise the liquidation and should act as umpire and arbitrator in the allowance and
disallowance of claims. The judicial liquidation is a pragmatic arrangement designed to
establish due process and orderliness in the liquidation of the bank, to obviate the
proliferation of litigations and to avoid injustice and arbitrariness. (81 SCRA 77)

With the foregoing ruling, the more proper procedure would be to set aside the decision rendered by
the Court of First Instance of Quezon and consequently dismiss the case without prejudice to the right
of the private respondents to take up with the liquidation court, the Court of First Instance of Manila,
the settlement of their mortgage obligation.

However, taking into consideration the circumstances of the case and in the interest of justice We are
constrained to deviate from this procedure. To order the private respondents to refile and relitigate their
case before the liquidation court would be an exercise in futility. It would mean another several years
of trial and additional expenses to private respondents who are admittedly living in poverty. Incidentally,
the property in question is the only property of private respondents. We have carefully reviewed the
records of the case and We are convinced as were the trial court and the appellate court that the
amount of loan actually obtained by the deceased Telosa was only P300.00 and not the P5,000.00 as
claimed by petitioner. This fact was established by the following evidence:

(a) Exhibit "E" the receipt signed by the deceased dated December 2, 1960 showing the
amount of loan to be only P300.00.

(b) The oral testimony of Rufina Telosa, wife of the deceased;

(c) The testimony of Ponciano Mendoza who was with the deceased at the time of the
transactions and who categorically testified that the amount of the loan was P300.00 in
six P50.00 bills but that Carlos Telosa was made to sign blank forms by the bank.

Needless to state in this regard this particular transaction was one of the fraudulent and anomalous
transactions involving the officers of the Rural Bank of Lucena, Inc. The latter took advantage of the
very limited education of Carlos Telosa.
The records further show that private respondents made payment in the amount of P400.00 on January
4, 1966 and P11.25 on April 18, 1972 to the Rural Bank of Lucena. This constituted full payment of the
principal loan of P300.00 and the interest thereon.

Anent the issue of prescription, suffice it to state that private respondents filed their complaint well within
the ten (10) year prescriptive period to bang an action for reformation of an instrument. After discovering
the fraudulent transaction on March 14, 1972, private respondents allowed only 14 days to pass before
filing their complaint,

Petitioner alleges that the trial court did not state in its decision why it was awarding attorney's fees.
The allegation is not correct. A cursory reading of the decision would show that the reason for the award
of attorney's fees is contained in the decision, hereinbelow quoted:

As a second cause of action, plaintiffs assert that the mortgage contract in question was
executed without the knowledge and marital consent of the wife, plaintiff Rufina Telosa,
hence voidable, insofar as her conjugal share is concerned. Plaintiffs further assess moral
damages in the amount of P5,000.00, attorney's fees of P2,000.00 and litigation expenses
of P75.00 per hearing of this case. (Brief for private respondents-appellees, p. 44; Record
on Appeal, p. 325).

Clearly the circumstances show that the award of attorney's fees is proper and just.

The decision also made findings that the bank acted fraudulently. It was the bank, represented by
petitioner, thru its fraudulent acts which compelled private respondents to litigate and incur litigation
expenses.

Incidentally the ratification by the wife cures any defect the contract may have had.

Petitioner further alleges that moral damages should not have been granted because private
respondents did not duly allege the same in the complaint. The lower court granted the same because
of private respondents' prayer for general relief which includes moral damages. Private respondents
had proven that they suffered mental anguish, serious anxiety and moral shock as a consequence of
the fraudulent act of the Rural Bank of Lucena, Inc. This is expressly allowed by Art. 2217 of the New
Civil Code.

Going back to the issue of jurisdiction, it must be emphasized that at the time the present action was
instituted to enjoin the foreclosure of the real estate mortgage under consideration, what must have
prompted herein private respondents to seek redress from the Court of First Instance of Quezon was
the authority of said court to exercise its injunctive relief. The Court of First Instance having territorial
jurisdiction of the acts sought to be enjoined, the Court of First Instance of Quezon, must take
cognizance of the case.

Finally, even Our ruling in the cited Hernandez versus Rural Bank case admits of exception. It says "as
far as lawful and practicable all claims against the insolvent bank should be filed in the liquidation
proceeding." This case should be one of them.

WHEREFORE, the petition is DENIED. The appealed decision of the Court of Appeals is AFFIRMED.

SO ORDERED.
Article 25 – Thoughtless extravagance in times of public want and emergency
Article 26 – Respect for and protection of human dignity

SPOUSES BILL AND VICTORIA HING vs. ALEXANDER CHOACHUY, SR. and ALLAN CHOACHUY ;
G.R. No. 179736; June 26, 2013

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 179736 June 26, 2013

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 Complaint5 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 Order19 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 reconsideration21 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 Certiorari25 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 Decision26 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 Constitution44 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.
 RADIO COMMUNICATIONS OF THE PHILIPPINES, INC. (RCPI) vs. ALFONSO VERCHEZ; G.R.
No. 164349; January 31, 2006

THIRD DIVISION

G.R. No. 164349 January 31, 2006

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 venue11 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.
 ST. LOUIS REALTY CORPORATION vs. COURT OF APPEALS and CONRADO J. ARAMIL; G.R.
No. L-46061; November 14, 1984

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. L-46061 November 14, 1984

ST. LOUIS REALTY CORPORATION, petitioner,

vs.
COURT OF APPEALS and CONRADO J. ARAMIL, respondents.

Romeo Z. Comia for petitioner.

Roman R. Bersamin for private respondent.

AQUINO, J.:

This case is about the recovery of damages for a wrongful advertisement in the Sunday Times where
Saint Louis Realty Corporation misrepresented that the house of Doctor Conrado J. Aramil belonged
to Arcadio S. Arcadio.

St. Louis Realty caused to be published with the permission of Arcadio S. Arcadio (but without
permission of Doctor Aramil) in the issue of the Sunday Times of December 15, 1968 an advertisement
with the heading "WHERE THE HEART IS". Below that heading was the photograph of the residence
of Doctor Aramil and the Arcadio family and then below the photograph was the following write-up:

Home is where the heart is. And the hearts of MR. AND MRS. ARCADIO S. ARCADIO
and their family have been captured by BROOKSIDE HILLS. They used to rent a small
2-bedroom house in a cramped neighborhood, sadly inadequate and unwholesome for
the needs of a large family. They dream(ed) of a more pleasant place free from the din
and dust of city life yet near all facilities. Plans took shape when they heard of
BROOKSIDE HILLS. With thrift and determination, they bought a lot and built their dream
house ... for P31,000. The Arcadios are now part of the friendly, thriving community of
BROOKSIDE HILLS... a beautiful first-class subdivision planned for wholesome family
living.

The same advertisement appeared in the Sunday Times dated January 5, 1969. Doctor Aramil a
neuropsychiatrist and a member of the faculty of the U. E. Ramon Magsaysay Memorial Hospital,
noticed the mistake. On that same date, he wrote St. Louis Realty the following letter of protest:

Dear Sirs:

This is anent to your advertisements appearing in the December 15, 1968 and January
5, 1969 issues of the Sunday Times which boldly depicted my house at the above-
 mentioned address and implying that it belonged to another person. I am not aware of
any permission or authority on my part for the use of my house for such publicity.

This unauthorized use of my house for your promotional gain and much more the
apparent distortions therein are I believe not only transgression to my private property but
also damaging to my prestige in the medical profession I have had invited in several
occasions numerous medical colleagues, medical students and friends to my house and
after reading your December 15 advertisement some of them have uttered some remarks
purporting doubts as to my professional and personal integrity. Such sly remarks although
in light vein as "it looks like your house," "how much are you renting from the Arcadios?",
" like your wife portrayed in the papers as belonging to another husband," etc., have
resulted in no little mental anguish on my part.

I have referred this matter to the Legal Panel of the Philippine Medical Association and
their final advice is pending upon my submission of supporting ownership papers.

I will therefore be constrained to pursue court action against your corporation unless you
could satisfactorily explain this matter within a week upon receipt of this letter.

The letter was received by Ernesto Magtoto, an officer of St. Louis Realty in charge of advertising. He
stopped publication of the advertisement. He contacted Doctor Aramil and offered his apologies.
However, no rectification or apology was published.

On February 20, 1969, Aramil's counsel demanded from St. Louis Realty actual, moral and exemplary
damages of P110,000 (Exh. D). In its answer dated March 10, St. Louis Realty claimed that there was
an honest mistake and that if Aramil so desired, rectification would be published in the Manila
Times (Exh. 3).

It published in the issue of the Manila Times of March 18, 1969 a new advertisement with the Arcadio
family and their real house. But it did not publish any apology to Doctor Aramil and an explanation of
the error.

On March 29, Aramil filed his complaint for damages. St. Louis Realty published in the issue of
the Manila Times of April 15, 1969 the following "NOTICE OF RECTIFICATION" in a space 4 by 3
inches:

This will serve as a notice that our print ad 'Where the Heart is' which appeared in
the Manila Times issue of March 18, 1969 is a rectification of the same ad that appeared
in the Manila Times issues rectification of the same ad that appeal of December 15, 1968
and January 5, 1969 wherein a photo of the house of another Brookside Homeowner (Dr.
Aramil-private respondent) was mistakenly used as a background for the featured
homeowner's the Arcadio family.

The ad of March 18, 1969 shows the Arcadio family with their real house in the
background, as was intended all along.

Judge Jose M. Leuterio observed that St. Louis Realty should have immediately published a
rectification and apology. He found that as a result of St. Louis Realty's mistake, magnified by its utter
lack of sincerity, Doctor Aramil suffered mental anguish and his income was reduced by about P1,000
to P1,500 a month. Moreover, there was violation of Aramil's right to privacy (Art. 26, Civil Code).
The trial court awarded Aramil P8,000 as actual damages, P20,000 as moral damages and P2,000 as
attorney's fees. St. Louis Realty appealed to the Court of Appeals.

The Appellate Court affirmed that judgment, with Acting Presiding Justice Magno S. Gatmaitan
as ponente, and Justices Sixto A. Domondon and Samuel F. Reyes concurring.

The Appellate Court reasoned out that St. Louis Realty committed an actionable quasi-delict under
articles 21 and 26 of the Civil Code because the questioned advertisements pictured a beautiful house
which did not belong to Arcadio but to Doctor Aramil who, naturally, was annoyed by that contretemps.

In this appeal, St. Louis Realty contends that the Appellate Court ignored certain facts and resorted to
surmises and conjectures. This contention is unwarranted. The Appellate Court adopted the facts found
by the trial court. Those factual findings are binding on this Court.

St. Louis Realty also contends that the decision is contrary to law and that the case was decided in a
way not in conformity with the rulings of this Court. It argues that the case is not covered by article 26
which provides that "every person shall respect the dignity, personality, privacy and peace of mind of
his neighbors and other persons". "Prying into the privacy of another's residence" and "meddling with
or disturbing the private life or family relations of another" and "similar acts", "though they may not
constitute a criminal offense, shall produce a cause of action for damages, prevention and other relief".

The damages fixed by Judge Leuterio are sanctioned by Articles 2200, 2208 and 2219 of the Civil
Code. Article 2219 allows moral damages for acts and actions mentioned in Article 26. As lengthily
explained by Justice Gatmaitan, the acts and omissions of the firm fan under Article 26.

St. Louis Realty's employee was grossly negligent in mixing up the Aramil and Arcadio residences in a
widely circulated publication like the Sunday Times. To suit its purpose, it never made any written
apology and explanation of the mix-up. It just contented itself with a cavalier "rectification ".

Persons, who know the residence of Doctor Aramil, were confused by the distorted, lingering
impression that he was renting his residence from Arcadio or that Arcadio had leased it from him. Either
way, his private life was mistakenly and unnecessarily exposed. He suffered diminution of income and
mental anguish.

WHEREFORE, the judgment of the Appellate Court is affirmed. Costs against the petitioner.

SO ORDERED.
 Article 27 – Relief against erring public officials

JOSE C. ZULUETA v. NICANOR NICOLAS G.R. No. 8252; January 31, 1958

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 8252 January 31, 1958

JOSE C. ZULUETA, plaintiff-appellant,

vs.
NICANOR NICOLAS in his capacity as Provincial Fiscal of Rizal, defendant-appellee.

A.R. Teodoro for appellant.

Lorenzo Sumulong and Antonio C. Masaquel for appellee.

REYES, A., J.:

This is an appeal taken by plaintiff from a decision of the Court of First Instance of Manila, dismissing
his complaint for damages on the ground of lack of cause of action.

Plaintiff instituted the present action on May 19, 1954 against the defendant provincial fiscal of Rizal to
recover moral pecuniary damages in the sum of P10,000. The complaint in substance alleges on May
6, 1954, the defendant fiscal conducted an investigation of a complaint for libel filed by herein plaintiff
against the provincial governor of Rizal and the staff members of the Philippine Free Press; that after
said investigation the fiscal "rendered an opinion" that there was no prima facie case; that the alleged
libelous statements were made in good faith and for the sole purpose of serving the best interest of the
public; and that in consequence the fiscal absolved the said governor and the Free Press staff from the
crime of libel.

The only question for determination is whether plaintiff's complaint states a cause of action.

The present action is based on article 27 of the new Civil Code, which provides that "any person
suffering material or moral loss because a public servant or employee refuses or neglects without just
cause, to perform his official duty may file an action for damages and other relief against the latter." But
as we said in Bangalayvs. Ursal,* 50 Off. Gaz. 4231, this article "contemplates a refusal or neglect
without just cause by a public servant or employee to perform his official duty." Refusal of the fiscal to
prosecute when after the investigation he finds no sufficient evidence to establish a prima facie case is
not a refusal, without just cause, to perform an official duty. The fiscal has for sure the legal duty to
prosecute crimes where there is no evidence to justify such action. But it is equally his duty not to
prosecute when after the investigation he has become convinved that the evidence available is not
enough to establish a prima facie case. The fiscal is not bound to accept the opinion of the complainant
in a criminal case as to whether or not a prima facie case exists. Vested with authority and discretion
to determine whether there is sufficient evidence to justify the filing of corresponding the information
and having control of the prosecution of a criminal case, the fiscal cannot be subjected to dictation from
the offended party (People vs. Liggayu , et al., 97 Phil., 865, 51 Off Gaz., 5654; People vs. Natoza, 100
Phil., 533, 53 Off Gaz., 8099). Having legal cause to refrain from filing an information against the person
whom the herein plaintiff wants him to charge with libel, the defendant fiscal cannot be said to have
refused or neglected without just cause to perform his official duty. On the contrary, it would appear
that he performed it.

A contrary rule would be fraught with danger. Says the learned trial Judge on this point:

Es altamente peligroso sentar un precedente judicial haciendo responsable por danos al Fiscal
Provincial de Rizal, aqui demandado, por rehusar este de presentar querella si racionalmente y
de buena fe, dicho Fiscal es o era de opinion en el ejercicio de su sana discrecion de que no
existian motivos para presentar una querella; de sentar este peligroso procedimiento o
precedente judicial contra los fiscales seria poner a estos en una situacion que en el
cumplimento de su obligacion y en el ejercicio de su sana discrecion estuviesen siempre
amenazados de una demanda civil si su opinion fuese contraria a la del denunciante, como una
espada de Damocles pendiente en todo tiempo sobre sus cabezas. Si el denunciente en aquel
asunto criminal de libelo, demandante en la presente causa, no estuvire conforme con la opinion
o conclusion a que ha llegado el Fiscal Provincial de Rizal, demandado en esta causa, opinion
o conclusion hecha con entrera buena fe y en en el ejercicio sano de sus facultades
discrecionales, todavia queda al demandante otros recursos que nuestras leyes proveen para
proteccion o ejercicio de sus derechos.

It may not be amiss to state here that , as a general rule, a public prosecutor, being a quasi-judicial
officer empowered to exercise discretion or judgment, is not personally liable for resulting injuries when
acting within the scope of his authority, and in the line of his official duty. (42 Am. Jur. sec. 21 p. 256).
As was said in the case of Mendoza vs. De Leon (33 Phil., 508, 513)—

Nor are officers or agents of the Government charged with the performance of governmental
duties which are in their nature legislative, or quasi judicial, liable for the consequences of their
official acts, unless it be shown that they act willfully and maliciously, and with the express purpos
of inflicting injury upon the plaintiff.

In view of the foregoing, the decision appealed from is affirmed, with costs against the appellant.
 JOSE B. LEDESMA v. HON. COURT OF APPEALS G.R. No. L-54598 April 15, 1988

Republic of the Philippines

SUPREME COURT
Manila

THIRD dIVISION

G.R. No. L-54598 April 15, 1988

JOSE B. LEDESMA, petitioner,

vs.
HON. COURT OF APPEALS, Spouses PACIFICO DELMO and SANCHA DELMO (as private
respondents), respondents.

The Solicitor General for petitioner.

Luzel D. Demasu-ay for respondent.

GUTIERREZ, JR., J.:

This petition seeks to reverse the decision of the respondent Court of Appeals which afirmed the
decision of the Court of First Instance of Iloilo, adjudging the petitioner, who was then the President of
the West Visayas College liable for damages under Article 27 of the Civil Code of the Philippines for
failure to graduate a student with honors.

The facts are not disputed.

An organization named Student Leadership Club was formed by some students of the West Visayas
College. They elected the late Violets Delmo as the treasurer. In that capacity, Delmo extended loans
from the funds of the club to some of the students of the school. "the petitioner claims that the said act
of extending loans was against school rules and regulations. Thus, the petitioner, as President of the
School, sent a letter to Delmo informing her that she was being dropped from the membership of the
club and that she would not be a candidate for any award or citation from the school.

Delmo asked for a reconsideration of the decision but the petitioner denied it. Delmo, thus, appealed
to the Office of the Director of the Bureau of Public Schools.

The Director after due investigation, rendered a decison on April 13, 1966 which provided:

Records of the preliminary investigation conducted by one of the legal officers of this
Office disclosed the following: That Violeta Delmo was the treasurer of the Student
Leadership Club, an exclusive student organization; that pursuant to Article IX of the of
the Constitution and By-Laws of the club, it passed Resolution No. 2, authorizing the
treasurer to disburse funds of the Club to student for financial aid and other humanitarian
purposes; that in compliance with said resolution and as treasurer of the Club, Violeta
Delmo extended loans to some officers and members of the Club upon proper application
duly approved by the majority of the members of the Executive Board; and that upon
receiving the report from Mr. Jesse Dagoon, adviser of the funds of the Club, that Office
 conducted an investigation on the matter and having been convinced of the guilt of Violets
Delmo and the other officers and members of the Club, that Office rendered the order or
decision in question. In justifying that Office's order or decision, it is contended that
approval by that Office of the Constitution and By-Laws of the Club is necessary for its
effectivity and validity and since it was never submitted to that Office, the Club had no
valid constitution and By-Laws and that as a consequence, Resolution No. 2 which was
passed based on the Constitution and By-Laws- is without any force and effect and the
treasurer, Violeta Delmo, who extended loans to some officers and members of the Club
pursuant thereto are illegal (sic), hence, she and the other students involved are deemed
guilty of misappropriating the funds of the Club. On the other hand, Raclito Castaneda,
Nestor Golez and Violeta Delmo, President, Secretary and Treasurer of the Club,
respectively, testified that the Club had adopted its Constitution and By-Laws in a meeting
held last October 3, 1965, and that pursuant to Article I of said Constitution and By-Laws,
the majority of the members of the Executive Board passed Resolution No. 2, which
resolution became the basis for the extension on of loans to some officers and members
of the Club, that the Club honestly believed that its Constitution and By-Laws has been
approved by the superintendent because the adviser of the Club, Mr. Jesse Dagoon,
assured the President of the Club that he will cause the approval of the Constitution and
By-Laws by the Superintendent; the officers of the Club have been inducted to office on
October 9,1965 by the Superintendent and that the Club had been likewise allowed to
cosponsor the Education Week Celebration.

After a careful study of the records, this Office sustains the action taken by the
Superintendent in penalizing the adviser of the Club as well as the officers and members
thereof by dropping them from membership therein. However, this Office is convinced
that Violets M. Delmo had acted in good faith, in her capacity as Club Treasurer, in
extending loans to the officers and members of the Student partnership Club. Resolution
No. 2 authorizing the Club treasurer to discharge finds to students in need of financial
assistance and other humanitarian purposes had been approved by the Club adviser, Mr.
Jesse Dagoon, with the notation that approval was given in his capacity as adviser of the
Club and extension of the Superintendent's personality. Aside from misleading the
officers and members of the Club, Mr. Dagoon, had unsatisfactorily explained why he
failed to give the Constitution and By-Laws of the Club to the Superintendent for approval
despite his assurance to the Club president that he would do so. With this finding of
negligence on the part of the Club adviser, not to mention laxity in the performance of his
duties as such, this Office considers as too severe and unwarranted that portion of the
questioned order stating that Violeta Delmo "shall not be a candidate for any award or
citation from this school or any organization in this school." Violeta Delmo, it is noted, has
been a consistent full scholar of the school and she alone has maintained her scholarship.
The decision in question would, therefore, set at naught all her sacrifice and frustrate her
dreams of graduating with honors in this year's commencement exercises.

In view of all the foregoing, this Office believes and so holds and hereby directs that
appellant Violeta. M. Delmo, and for that matter all other Club members or officers
involved in this case, be not deprived of any award, citation or honor from the school, if
they are otherwise entitled thereto. (Rollo, pp. 28-30)

On April 27, 1966, the petitioner received by mail the decision of the Director and all the records of the
case. On the same day, petitioner received a telegram stating the following:

"AIRMAIL RECORDS DELMO CASE MISSENT THAT OFFICE"

The Director asked for the return only of the records but the petitioner allegedly mistook the telegram
as ordering him to also send the decision back. On the same day, he returned by mail all the records
plus the decision of the Director to the Bureau of Public Schools.

The next day, the petitioner received another telegram from the Director order him to furnish Delmo
with a copy of the decision. The petitioner, in turn, sent a night letter to the Director informing the latter
that he had sent the decision back and that he had not retained a copy thereof..

On May 3, 1966, the day of the graduation, the petitioner received another telegram from the Director
ordering him not to deprive Delmo of any honors due her. As it was impossible by this time to include
Delmo's name in the program as one of the honor students, the petitioner let her graduate as a plain
student instead of being awarded the Latin honor of Magna Cum Laude.

To delay the matter further, the petitioner on May 5, 1966, wrote the Director for a reconsideration of
the latters" decision because he believed that Delmo should not be allowed to graduate with honors.
The Director denied the petitioner's request.

On July 12, 1966, the petitioner finally instructed the Registrar of the school to enter into the scholastic
records of Delmo the honor, "Magna Cum Laude."

On July 30, 1966, Delmo, then a minor, was joined by her parents in flag action for damages against
the petitioner. During the pendency of the action, however, Delmo passed away, and thus, an Amended
and Supplemental Complaint was filed by her parents as her sole and only heirs.

The trial court after hearing rendered judgment against the petitioner and in favor of the spouses Delmo.
The court said:

Let us go to specific badges of the defendants (now petitioners) bad faith. Per
investigation of Violeta Delmo's appeal to Director Vitaliano Bernardino of the Bureau of
Public Schools (Exhibit L it was the defendant who inducted the officers of the Student
Leadership Club on October 9, 1965. In fact the Club was allowed to cosponsor the
Education Week Celebration. (Exh. "L"). If the defendant he not approve of the
constitution and by-laws of the Club, why did he induct the officers into office and allow
the Club to sponsor the Education Week Celebration"? It was through his own act that
the students were misled to do as they did. Coupled with the defendants tacit recognition
of the Club was the assurance of Mr. Jemm Dagoon, Club Adviser, who made the
students believe that he was acting as an extension of Mr. Ledesma's personality. (Exhibit
"L").

Another badge of the defendan'ts want of good faith is the fact that, although, he kaew as
early as April 27,1966 that per on of r Bernardino, Exhibit "L," he was directed to give
honors to Miss Delmo, he kept Id information to . He told the Court that he knew that the
letter of Director Bernardino directed him not to deprive Miss Delmo the honors due her,
but she (sic) says that he has not finished reading the letter-decision, Exhibit "L," of
Director Bernardino 0, him to give honors to Miss Delmo. (Tsn, Feb. 5, 1974, testimony
of Mr. Ledesma, pp. .33-35). It could not be true that he has not finished reading the letter-
decision, Exh. "L," because said letter consisted of only three pages, and the portion
which directed that Miss Delmo "be not deprived of any award, citation or honor from the
school, if otherwise entitled thereto is found at the last paragraph of the same. How did
he know the last paragraph if he did not read the letter.
 Defendants actuations regarding Miss Delmo's cam had been one of bias and prejudice.
When his action would favor him, he was deliberate and aspect to the utter prejudice and
detriment of Miss Delmo. Thus, although, as early as April 27, 1966, he knew of the
exoneration of Miss Delino by Director Bernardino, he withheld the information from Miss
Delmo. This is eloquently dramatized by Exh. "11" and Exh. "13" On April 29,1966,
Director Bernardino cabled him to furnish Violeta Delmo copy of the Decision, Exh. "L,"
but instead of informing Miss Delmo about the decision, since he said he mailed back the
decision on April 28,1966, he sent a night letter on April 29,1966, to Director Bernardino,
informing the latter that he had returned the decision (Exh. "l3"), together with the record.
Why a night letter when the matter was of utmost urgency to the parties in the case,
because graduation day was only four days ahead? An examination of the telegrams sent
by the defendant shows that he had been sending ordinary telegram and not night letters.
(Exh. "5", Exhibit "7"). At least, if the defendant could not furnish a copy of the decision,
(Exh. "L"), to Miss Delmo, he should have told her about it or that Miss Delmo's honors
and citation in the commencement be announced or indicated. But Mr. Ledesma is one
who cannot admit a mistake. Very ungentlemanly this is home out by his own testimony
despite his knowledge that his decision to deprive Miss Delmo of honors due to her was
overturned by Director Bernardino, he on his wrong belief. To quote the defendant,1
believed that she did not deserve those honors(Tsn Feb. 5, 1974, p. 43,Empasized
supplied). Despite the telegram of Director Bernardino which the defendant received
hours before the commencement executory on May 3-4,1966, he did not obey Director
Bernardino because he said in his testimony that he would be embarrassment . Tan Feb
5,1974, P. 46). Evidently, he knew only his embarrassment and not that of r Bernardino
whose order was being flagrantly and wantonly disregarded by bim And certainly, not the
least of Miss Delmo's embarrassment. His acts speak eloquently of ho bad faith and
unjust of mindwarped by his delicate sensitivity for having been challenged by Miss
Delmo, a mere student.

xxx xxx xxx

Finally the defendant's behaviour relative to Miss s case smacks of contemptuous

arrogance, oppression and abuse of power. Come to think of it. He refused to obey the
directive of Be o and instead, chose to feign ignorance of it." (Reward on Appeal, p. 72-
76).

The trial court awarded P20,000.00 to the estate of Violeta Delmo and P10,000.00 to her parents for
moral damages; P5,000.00 for nominal damages to Violeta's estate; exemplary damages of P10,000.00
and P2,000.00 attorney's fees.

On appeal, the Court of Appeals affirmed the decision. Hence, this petition.

The issues raised in this petition can be reduced to the sole question of whether or not the respondent
Court of Appeals erred in affirming the trial court's finding that petitioner is liable for damages under
Article 27 of the New Civil Code.

We find no reason why the findings of the trial and appellate courts should be reversed. It cannot be
disputed that Violeta Delmo went through a painful ordeal which was brought about by the petitioner's
neglect of duty and callousness. Thus, moral damages are but proper. As we have affirmed in the case
of (Prudenciado v. Alliance Transport System, Inc., 148 SCRA 440, 448):

There is no argument that moral damages include physical suffering, mental anguish,
fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social
 humiliation, and similar injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of defendant's wrongly act or
omission." (People v. Baylon, 129 SCRA 62 (1984).

The Solicitor-General tries to cover-up the petitioner's deliberate omission to inform Miss Delmo by
stating that it was not the duty of the petitioner to furnish her a copy of the Director's decision. Granting
this to be true, it was nevertheless the petitioner's duty to enforce the said decision. He could have
done so considering that he received the decision on April 27, 1966 and even though he sent it back
with the records of the case, he undoubtedly read the whole of it which consisted of only three pages.
Moreover, the petitioner should have had the decency to meet with Mr. Delmo, the girl's father, and
inform the latter, at the very least of the decision. This, the petitioner likewise failed to do, and not
without the attendant bad faith which the appellate court correctly pointed out in its decision, to wit:

Third, assuming that defendant could not furnish Miss Delmo of a copy of the decision,
he could have used his discretion and plain common sense by informing her about it or
he could have directed the inclusion of Miss Delmo's honor in the printed commencement
program or announced it during the commencement exercises.

Fourth, defendant despite receipt of the telegram of Director Benardino hours before the
commencement exercises on May 3-4, 1966, disobeyed his superior by refusing to give
the honors due Miss Delmo with a lame excuse that he would be embarrassed if he did
so, to the prejudice of and in complete disregard of Miss Delmo's rights.

Fifth, defendant did not even extend the courtesy of meeting Mr. Pacifico Delmo, father
of Miss Delmo, who tried several times to see defendant in his office thus Mr. Delmo
suffered extreme disappointment and humiliation.

xxx xxx xxx

Defendant, being a public officer should have acted with circumspection and due regard
to the rights of Miss Delmo. Inasmuch as he exceeded the scope of his authority by
defiantly disobeying the lawful directive of his superior, Director Bernardino, defendant is
liable for damages in his personal capacity. . . . (Rollo, pp- 57-58)

Based on the undisputed facts, exemplary damages are also in order. In the same case of Prudenciado
v. Alliance Transport System, Inc., supra., at p. 450, we ruled:

The rationale behind exemplary or corrective damages is, as the name implies, to provide
an example or correction for the public good (Lopez, et al. v. Pan American World
Airways, 16 SCRA 431).

However, we do not deem it appropriate to award the spouses Delmo damages in the
amount of P10,000.00 in their individual capacity, separately from and in addition to what
they are already entitled to as sole heirs of the deceased Violeta Delmo. Thus, the
decision is modified insofar as moral damages are awarded to the spouses in their own
behalf.

WHEREFORE, the petition is DISMISSED for lack of merit. The decision of the Court of Appeals is
AFFIRMED with the slight modification as stated in the preceding paragraph. This decision is
immediately executory.

SO ORDERED.
 Article 28 – Unfair competition

Article 29 – Preponderance of evidence as quantum of evidence required in civil actions

ROY PADILLA, et.al v. COURT OF APPEALS G.R. No. L-39999; May 31, 1984

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-39999 May 31, 1984

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:

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
threats', it does not allege the particular threat 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 equipment

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.
Article 30 – Civil Obligations arising from a criminal offense

Article 31 – Civil obligations arising from other sources.

BISAYA LAND TRANSPORTATION COMPANY, INC. v. HON. MANUEL M. MEJIA, ET AL; G.R. Nos.
L-8830 and L-8837 to 39; May 11, 1956

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-18193 February 27, 1963

NICASIO BERNALDES, SR., PERPETUA BESAS DE BERNALDES and JOVITO BERNALDES,

aided by NICASIO BERNALDES, SR., as Guardian-ad-litem, plaintiffs-appellants,
vs.
BOHOL LAND TRANSPORTATION, INC., defendant-appellee.

Lilio L. Amora and Peter L. Amora for plaintiffs-appellants.

Filemon B. Barria for defendant-appellee.

DIZON, J.:

In a complaint for damages filed in the Court of First Instance of Bohol by appellants, the spouses
Nicasio Bernaldes, Sr. and Perpetua Besas and their minor son, Jovito, against appellee, the Bohol
Land Transportation Co., a domestic corporation engaged in business as a common carrier in said
province, they alleged, in substance, that, in the afternoon of November 27, 1958, Jovito Bernaldes
and his brother, Nicasio, boarded one of appellee's passenger trucks (B.L.T. Co. No. 322 with plate
No. 1470) in the town of Guindulman, Bohol, bound for Tagbilaran of the same province; that on the
way the bus fell off a deep precipice in barrio Balitbiton, municipality of Garcia-Hernandez, of the said
province, resulting in the death of Nicasio and in serious physical injuries to Jovito.

Defendant moved for the dismissal of the complaint on two grounds, namely, that the cause of action
alleged therein was barred by a prior judgment, and that it did not state a cause of action.

At the hearing on the motion to dismiss, it was established that in Criminal Case No. 2775 of the same
court, Leonardo Balabag, driver of the bus involved in the accident, was charged with double homicide
thru reckless imprudence but was acquitted on the ground that his guilt had not been established
beyond reasonable doubt, and that appellees, through Attys. Amora and Tirol, intervened in the
prosecution of said case and did not reserve the right to file a separate action for damages.

Relying on the case of Maria C. Roa vs. Segunda de la Cruz, et al., G.R. No. L-13134, promulgated
February 13, 1960, the lower court sustained the motion on the ground of bar by prior judgment, and
dismissed the case. Hence, this appeal.

The issues in this appeal are first, whether a civil action for damages against the owner of a public
vehicle, based on breach of contract of carriage, may be filed after the criminal action instituted against
the driver has been disposed of, if the aggrieved party did not reserve his right to enforce civil liability
in a separate action, and second, whether the intervention of the aggrieved party, through private
prosecutors, in the prosecution of the criminal case against the driver — who was acquitted on the
ground of insufficiency of evidence — will bar him from suing the latter's employer for damages for
breach of contract, in an independent and separate action.

Article 31 of the New Civil Code expressly provides that when the civil action is based upon an obligation
not arising from the act or omission complained of as a felony, such civil action may proceed
independently of the criminal proceedings and regardless of the result of the latter. This provision
evidently refers to a civil action based, not on the act or omission charged as a felony in a criminal case,
but to one based on an obligation arising from other sources, such as law or contract. Upon the other
hand it is clear that a civil action based on contractual liability of a common carrier is distinct from the
criminal action instituted against the carrier or its employee based on the latter's criminal negligence.
The first is governed by the provisions of the Civil Code, and not by those of the Revised Penal Code,
and it being entirely separate and distinct from the criminal action, the same may be instituted and
prosecuted independently of, and regardless of the result of the latter. (Visayan Land Transportation
Co. vs. Mejia, et al., G.R. Nos. L-8830, L-8837-39. 52 O.G. p. 4241)..

The civil action instituted against appellee in this case is based on alleged culpa contractual incurred
by it due to its failure to carry safely the late Nicasio Bernaldes and his brother Jovito to their place of
destination, whereas the criminal action instituted against appellee's driver involved exclusively the
criminal and civil liability of the latter arising from his criminal negligence. In other words, appellant's
action concerned the civil liability of appellee as a common carrier, regardless of the liabilities of its
driver who was charged in the criminal case. Therefore, as held in Parker, et al. vs. Panlilio, et al., (G.R.
No. L-4961, March 5, 1952), the failure, on the part of the appellants, to reserve their right to recover
civil indemnity against the carrier can not in any way be deemed as a waiver, on their part, to institute
a separate action against the latter based on its contractual liability, or on culpa aquiliana, under Articles
1902-1910 of the Civil Code. As a matter of fact, such reservation is already implied in the law which
declares such action to be independent and separate from the criminal action. Moreover, it has been
held that the duty of the offended party to make such reservation applies only to defendant in the
criminal action, not to persons secondarily liable (Chaves, et al. vs. Manila Electric, 31 Phil. 47).

True, appellants, through private prosecutors, were allowed to intervene — whether properly or
improperly we do not here decide — in the criminal action against appellee's driver, but if that amounted
inferentially to submitting in said case their claim for civil indemnity, the claim could have been only
against the driver but not against appellee who was not a party therein. As a matter of fact, however,
inspite of appellee's statements to the contrary in its brief, there is no showing in the record before Us
that appellants made of record their claim for damages against the driver or his employer; much less
does it appear that they had attempted to prove such damages. The failure of the court to make any
pronouncement in its decision concerning the civil liability of the driver and/or of his employer must
therefore be due to the fact that the criminal action did not involve at all any claim for civil indemnity.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved
by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case
not covered by this stipulation of facts. 1äwphï1.ñët

Lastly, as appellee's driver was acquitted only on reasonable doubt, a civil action for damages against
him may be instituted for the same act or omission (Rule 107, par. [d]; Art. 29, New Civil Code). If such
is the rule as against him, a fortiori, it must in the case of his employer.

IN VIEW OF ALL THE FOREGOING, we find the appeal interposed by appellants to be meritorious. As
a result, the order of dismissal appealed from is hereby set aside and the case is remanded to the lower
court for further proceedings.
 LAURA CORPUS vs.FELARDO PAJE and THE VICTORY LINER TRANSPORTATION CO., INC;
G.R. No. L-26737; July 31, 1969

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-26737 July 31, 1969

LAURA CORPUS, and the minors RICARDO, TERESITA and CORAZON, all surnamed MARCIA
and represented by their mother LAURA CORPUS, plaintiffs-appellants,
vs.
FELARDO PAJE and THE VICTORY LINER TRANSPORTATION CO., INC., defendants-appellees.

Crispin D. Baizas and Associates for plaintiffs-appellants.

Flores, Macapagal, Ocampo and Balbastro for defendants-appellees.

CAPISTRANO, J.:

This is a direct appeal on questions of law from an order of the Court of First Instance of Rizal dismissing
the complaint in Civil Case No. 6880 of that court.

On December 23, 1956, a passenger bus of the Victory Liner Transportation Co., Inc., driven by Felardo
Paje, collided within the municipality of Lubao, Pampanga, with a jeep driven by Clemente Marcia,
resulting in the latter's death and in physical injuries to two other persons.

An information for homicide and double serious physical injuries through reckless imprudence was filed
against Felardo Paje in the Court First Instance of Pampanga. The heirs of Clemente Marcia reserved
their right to institute a separate civil action for damages. On November 7, 1960, the accused, Felardo
Paje, was found guilty and convicted of the crime charged in the information. Said defendant appealed
the judgment of conviction to the Court of Appeals. On November 21, 1961, while defendant's appeal
was pending decision in the Court of Appeals, Clemente Marcia's heirs, namely, his widow, Laura
Corpus, and their minor children, instituted in the Court of First Instance of Rizal a separate civil action
(Civil Case No. 6880) for damages based upon the criminal act of reckless imprudence against Felardo
Paje and the Victory Liner Transportation Co., Inc., defendants, praying that said defendants be ordered
to pay jointly and severally the amounts of damages claimed by the plaintiffs. On November 9, 1962,
the Court of Appeals promulgated its decision in the appeal of Felardo Paje reversing the appealed
judgment and acquitting the appellant after finding that the reckless imprudence charged against him
did not exist, and that the collision was a case of pure accident.

On December 29, 1962, the defendants filed in the civil action a motion to dismiss on the ground that
the action was barred by the acquittal by the Court of Appeals of the defendant Felardo Paje in the
criminal action. The motion was denied.

At the pre-trial of the civil case, the defendants asked the court to rule on their special defense that
plaintiffs' cause of action based upon a quasi-delict had prescribed considering that the complaint was
brought four years and eleven months after the collision and that according to Article 1144 of the Civil
Code an action based upon a quasi-delict must be instituted within four years. The lower court, in its
order of May 31, 1966, dismissed the complaint on the ground that plaintiffs' action was based upon a
quasi-delict and that it had prescribed. The plaintiffs appealed direct to this Court on questions of law
from the order dismissing the complaint.

Plaintiffs-appellants contend that the lower court erred in dismissing the complaint. The contention is
unmeritorious in view of the following considerations.

(1) The acquittal of the defendant Felardo Paje by the Court of Appeals in the criminal action on the
ground that the reckless imprudence or criminal negligence charged against him did not exist and that
the collision was a case of pure accident, was a bar to the civil action for damages for the death of
Clemente Marcia, which action was based upon the same criminal negligence of which the defendant
Felardo Paje was acquitted in the criminal action. In the celebrated case of Chantangco vs. Abaroa,
which was an appeal from the Philippine Supreme Court to the United States Supreme Court, 218 U.S.
476; 54 L. Ed. 1116; 40 Phil. 1056, Mr. Justice Lurton, speaking for the Supreme Court of the United
States, said:

It is true that one of the plaintiffs in the present case reserved whatever right he may have had
to bring a civil action. This was obviously of no avail, inasmuch as there resulted a judgment for
the defendant, and the plain inference from the foregoing is that a verdict of acquittal must carry
with it exemption from civil responsibility.

Criminal negligence, that is, reckless imprudence, is not one of the three crimes mentioned in Article
33 of the Civil Code which authorizes the institution of an independent civil action, that is, of an entirely
separate and distinct civil action for damages, which shall proceed independently of the criminal
prosecution and shall be proved only by a preponderance of evidence. Said article mentions only the
crimes of defamation, fraud (estafa) and physical injuries. Although in the case of Dyogi, et al. vs. Yatco,
et al., G.R. No. L-9623, January 22, 1957, this Court held that the term "physical injuries" used in article
33 of the Civil Code includes homicide, 1 it is to be borne in mind that the charge against Felardo Paje
was for reckless imprudence resulting in homicide, and not for homicide and physical injuries. In the
case of People vs. Buan, G.R. No. L-25366, March 29, 1968, Mr. Justice J.B.L. Reyes, speaking for
the Supreme Court, said that the "offense of criminal negligence under article 365 of the Revised Penal
Code lies in the execution of an imprudent or negligent act that, if intentionally done, would be
punishable as a felony. The law penalizes thus the negligent or careless act, not the result thereof. The
gravity of the consequence is only taken into account to determine the penalty; it does not qualify the
substance of the offense." It is, therefore, clear that the charge against Felardo Paje was not for
homicide but for reckless imprudence, that is, criminal negligence resulting in homicide (death of
Clemente Marcia) and double physical injuries suffered by two other persons. As reckless imprudence
or criminal negligence is not one of the three crimes mentioned in Article 33 of the Civil Code, there is
no independent civil action for damages that may be instituted in connection with said offense. Hence,
homicide through reckless imprudence or criminal negligence comes under the general rule that the
acquittal of the defendant in the criminal action is a bar to his civil liability based upon the same criminal
act notwithstanding that the injured party reserved 2 his right to institute a separate civil action
(Chantangco vs. Abaroa, supra). In the language of the Rules of Court (Rule 111, Sec. 3) the extinction
of the criminal action by acquittal of the defendant on the ground that the criminal act charged against
him did not exist, necessarily extinguished also the civil action for damages based upon the same act.

(2) Assuming, arguendo, that the civil action for damages for the death of Clemente Marcia was based
upon a quasi-delict, 3 the trial court's finding that on that basis the action had prescribed is correct. An
action upon a quasi-delict must be instituted within four (4) years (Article 1146, Civil Code). The four-
year prescriptive period began to run from the day the quasi-delict was committed, or from December
23, 1956, and the running of the said period was not interrupted by the institution of the criminal action
for reckless imprudence. (Paulan vs. Sarabia, G.R. No. L-10542, July 31, 1958.)
PREMISES CONSIDERED, the order appealed from is affirmed, with special pronouncement as to
costs.

Concepcion, C.J., Castro, Fernando and Barredo, JJ., concur.

1äwphï1.ñët Dizon, Makalintal, Sanchez and Teehankee, JJ., concur in the result.
Reyes, J.B.L., and Zaldivar, JJ., took no part.

Footnotes
1This and the following footnotes express my opinion on certain controversial articles of the New
Civil Code, which was drafted when I was a member of the Code Commission.

(a) The holding in the case of Dyogi, et al. vs. Yatco, etc., et al., supra, at the term "physical
injuries" used in Article 33 of the Civil Code includes homicide or murder, is contrary to the letter
and spirit of the law. I recall that when the draft of what is now Article 33 of the New Civil Code
was presented for deliberation by Code Commission Chairman Dean Jorge C. Bocobo, a great
civilian, before the Code Commission (then composed of besides Chairman Bocobo, Professor
Guillermo B. Guevarra, Dean Pedro Y. Ylagan, and Dean Francisco R. Capistrano, members),
said Chairman made, in substance, the following remarks: In America the injured party in crime
has the initiative, through his lawyer he immediately files a civil action for damages against the
offender. In the Philippines the offended party depends upon the fiscal to demand in the criminal
action the damages he has suffered. I think it is about time to educate our people the American
way by giving the injured party in crime the initiative to go to court through his lawyer to demand
damages, and for this purpose we should give him an independent civil action for damages. Let
us begin with just three crimes which are of common occurrence, namely, defamation, fraud,
and physical injuries. Depending upon the success of the experiment, when the new Civil Code
may come up for revision about fifty (50) or one hundred (100) years from now, it will be up to
our successors in the Code Commission to add more crimes to the three already mentioned or
make the provision comprise all crimes causing damages to the injured party. This civil action,
as in America, should proceed independently of the criminal action and should be proved only
by preponderance of evidence. Defamation may be oral or written. Fraud comprises all forms of
estafa. Physical Injuries is to be understood in its ordinary meaning and does not include
homicide or murder because where physical injuries result in homicide or murder, the reason for
the law (namely, to give the injured party personally the initiative to demand damages by an
independent civil action) ceases, for the reason that a dead person can no longer personally,
through his lawyer institute an independent civil action for damages. (All the members of the
Code Commission agreed with the Chairman and the draft of the article was unanimously
approved.)

In the Revised Penal Code, the crime of homicide is treated in Title Eight (Crimes Against
Persons), Chapter One (Destruction of life), while the crime of physical injuries is separately
treated in Chapter Two of the same title. This shows that the two crimes are distinct from each
other, that physical injuries is not included in homicide.

(b) Article 32 (drafted by Code Commission Chairman Bocobo) of the Civil Code is also intended,
insofar as it provides for an independent civil action, to educate the Filipino the American way
by going immediately to the courts to file a civil action for damages in vindication of his
constitutional rights and liberties enumerated in the article in case of violation of any of them.

(c) Article 34 of the Civil Code, insofar as it authorizes the institution of an independent civil
action, is also intended for the same purpose.
2(a) The crime of reckless imprudence resulting in the death of Clemente Marcia and physical
injuries to two other persons not being one of the three crimes mentioned in Article 33 of the
Civil Code which authorizes the institution of an independent civil action for damages, the heirs
of the deceased correctly reserved their right to institute a separate civil action for damages
against the bus driver, Felardo Paje, who stood charged with the crime of homicide and double
physical injuries through reckless imprudence. The reservation was in accordance with what is
now Rule 111, Section 1, of the Rules of Court, which provides:

Institution of criminal and civil action. — When a criminal action is instituted, the civil action for
recovery of a civil liability arising from the offense charged is impliedly instituted with the criminal
action, unless the offended party expressly waives the civil action or reserves his right to institute
it separately.

The civil action for damages against Felardo Paje was prematurely instituted in view of Rule
111, Section 3, which, in part, provides:

Criminal and civil actions arising from the same offense may be instituted separately, but after
the criminal action has been commenced the civil action cannot be instituted until final judgment
has been rendered in the criminal action.

At any rate, said civil action was correctly suspended in the Court of First Instance until final
judgment by the Court of Appeals in the criminal action was rendered pursuant to Section 3(b)
of said Rule 111 which provides that:

After a criminal action has been commenced, no civil action arising from the same offense can
be prosecuted, and the same shall be suspended, in whatever stage it may be found, until final
judgment in the criminal proceeding has been rendered.

The decision of the Court of Appeals acquitting the appellant Felardo Paje of the crime of
reckless imprudence charged against him on the ground that it did not exist, extinguished the
civil action for damages filed against him, in accordance with Section 3(c) of Rule 111 which
states that:

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. ....

This rule finds support in the celebrated case of Chantangco vs. Abaroa, supra.

(b) Section 2 of Rule 111 which provides:

Independent civil action. — In the cases provided for in Articles 31, 32, 33, 34 and 2177 of the
Civil Code of the Philippines, an independent civil action entirely separate and distinct from the
criminal action, may be brought by the injured party during the pendency of the criminal case,
provided the right is reserved as required in the preceding section. Such civil action shall proceed
independently of the criminal prosecution, and shall require only a preponderance of evidence.

is defective and imperfect in many ways:

First. Article 31 of the Civil Code does not provide for an independent civil action. An independent
civil action is an action that is based upon the same criminal act as in the case of Articles 32, 33
and 34. When the civil action is based on an obligation not arising from the act or omission
complained of as a felony, such civil action being based upon an obligation not arising from the
criminal act but from a different source, is not an independent civil action within the meaning of
Articles 32, 33 and 34. Article 31 (drafted by Code Commissioner Capistrano) which provides
that:

When the civil action is based on an obligation not arising from the act or omission complained
of as a felony, such civil action may proceed independently of the criminal proceedings and
regardless of the result of the latter.

states a self-explanatory rule different and distinct from that laid down in Articles 32, 33 and 34.
For example: A is prosecuted for the crime of reckless imprudence resulting in homicide. The
heirs of the deceased institute a civil action for damages against him based upon quasi-delict,
under Article 2177 of the Civil Code, which is separate and distinct from criminal negligence
punished as a crime or delict under the Revised Penal Code. Quasi-delict is culpa aquiliana and
is separate and distinct from criminal negligence, which is a delict. The distinction is made in
Article 2177 itself which in part provides that:

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.

Code Commission Chairman Bocobo, who drafted Article 2177 of the New Civil Code, took the
distinction from modern authorities in civil law. Accordingly, the report of the Code Commission
on the Project of Civil Code makes reference to the sources of the distinction, thus:

The foregoing provision though at first sight startling, is not so novel or extraordinary when we
consider the exact nature of criminal and civil negligence. The former is a violation of the criminal
law, while the latter, is a distinct and independent negligence, which is the 'culpa aquiliana' or
quasi-delict, of ancient origin, having always had its own foundation and individuality, separate
from criminal negligence. Such distinction between criminal negligence and 'culpa extra-
contractual' or 'quasi-delict' has been sustained by decisions of the Supreme Court of Spain and
maintained as clear, sound, and perfectly tenable by Maura, an outstanding Spanish jurist." .

Therefore, under the proposed article 2177, acquittal from an accusation of criminal negligence,
whether on reasonable doubt or not, shall not be a bar to a subsequent civil action, not for civil
liability arising from criminal negligence, but for damages due to a 'quasi-delict' or 'culpa
aquiliana'. But said article forestalls a double recovery. (Capistrano, Civil Code of the Philippines,
With Comments and Annotations, Vol. 4, p. 470.)

Second. As above explained, Article 2177 of the Civil Code does not provide for an independent
civil action in crime. The article precisely distinguishes quasi-delict or civil negligence from
criminal negligence (reckless imprudence) and authorizes the institution of a civil action for
damages based upon quasi-delict and not upon criminal negligence, which is a delict and not a
quasi-delict. In accordance with Article 31, the civil action for damages based upon quasi-delict
may proceed independently of the criminal proceeding for criminal negligence and regardless of
the result of the latter. Hence, even if the defendant is acquitted in the criminal action of the
charge of reckless imprudence resulting in homicide, the civil action for damages for the death
of the deceased based upon quasi-delict may proceed to judgment.

Third. The proviso in Section 2 of Rule 111, with reference to the correctly cited Articles 32, 33
and 34 of the Civil Code, is contrary to the letter and spirit of the said articles, for these articles
were drafted for the purpose explained in footnote one and are intended to constitute as
exceptions to the general rule stated in what is now Section 1 of Rule 111. The proviso, which
is procedural, may also be regarded as an unauthorized amendment of substantive law, Articles
32, 33 and 34 of the Civil Code, which do not provide for the reservation required in the proviso.

In view of all the foregoing, Section 2 of Rule 111 should be amended so as to read as follows:

Independent civil action. — In the cases provided for in Articles 32, 33 and 34 of the Civil Code
of the Philippines, an independent civil action entirely separate and distinct from the criminal
action, may be brought by the injured party before or after the criminal action is instituted. Such
civil action shall proceed independently of the criminal prosecution, and shall require only a
preponderance of evidence. Notice shall be given in the criminal action of the institution of the
civil action or of the intention to institute the same.
3The prayer of the complaint in the civil action asked that the defendants, Felardo Paje and the
Victory Liner Transportation Co., Inc., be ordered to pay jointly and severally the damages
claimed by plaintiffs. This prayer, considering the action as one upon a quasi-delict, is not in
accordance with law. In quasi-delict, according to Article 2180 of the Civil Code, the obligation
to pay damages is demandable not only for one's own acts or omissions, but also for those of
persons for whom one is responsible. The article then, in part continues: "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." Hence, the bus driver, Felardo Paje, was responsible for the quasi-
delict, he being, in the language of the American law, a tort-feasor. Likewise, the bus operator,
Victory Liner Transportation Co., Inc., was liable for the quasi-delict of its bus driver. This liability
is not solidary but primary, with right to full reimbursement pursuant to Article 2181, which
provides: .

Whoever pays for the damages caused by his dependents or employees may recover from the
latter what he has paid or delivered in satisfaction of the claim.

The prayer of the complaint, based upon a quasi-delict, against the bus driver, Felardo Paje,
and the bus operator, Victory Liner Transportation Co., Inc., should have been that the plaintiffs
recover the damages claimed from either of them. The bus operator defendant Victory Liner
Transportation Co., Inc., could have filed a third-party complaint against the defendant bus
driver, pleading its right for reimbursement under Article 2181.

When is the bus operator solidarily liable with the bus driver? Article 2184 of the Civil Code
provides:

In motor vehicle mishaps, the owner is solidarily liable with his driver, if the former, who was in
the vehicle, could have by the use of due diligence, prevented the misfortune. .... "If the owner
was not in the motor vehicle, the provisions of article 2180 are applicable.

This article (drafted by Code Commission Chairman Bocobo) is intended to cover only the
owners of private motor vehicles for private use. It is not generally applicable to motor vehicles
for public use and convenience because the operator thereof, usually a corporation, cannot in
the very nature of things, be in the motor vehicle at the time of the mishap. However, if the
manager of the bus company was in the bus at the time of the mishap, Article 2184 may be
applied by analogy.
In the case of De Leon Brokerage Co., Inc. vs. Court of Appeals, et al., G.R. No. L-15247,
February 28, 1962, it was held that in quasi-delict, the bus operator is solidarily liable with the
bus driver in view of article 2194 of the Civil Code which provides:

"The responsibility of two or more persons who are liable for a quasi-delict is solidary.

This article (drafted by Code Commissioner Capistrano) merely restates the basic rule in
American law that joint tort-feasors are jointly and severally liable for the tort. In the case of a
quasi-delict committed by a bus driver, he alone is the tort-feasor; the bus operator is not a joint
tort-feasor. For this reason the liability of the bus operator is not governed by Article 2194 but by
Article 2180.

Joint tort-feasors in American law are the same as co-authors or co-principals of a quasi-delict
in the civil law, and it is only to them that Article 2194 is applicable. A bus operator is not a co-
author or co-principal of the tort committed by its bus driver; hence, it cannot be made solidarily
liable with the bus driver under Article 2194. Its liability is that of an employer under Article 2180,
with right to full reimbursement under Article 2181.

To make the bus operator solidarily liable with the driver would diminish its right to full
reimbursement from the driver because in passive solidarity, the solidary debtors share equally
in the obligation (Article 1208, Civil Code). Consequently, if the bus operator's liability were
solidary, in the event of full payment by it of the obligation, its right to reimbursement from the
bus driver would only be of one-half of the obligation because its share of the solidary obligation
would be one-half. This would result in reducing by one-half its right to full reimbursement under
Article 2181.

The prayer for solidary liability in the complaint against the defendants Felardo Paje and the
Victory Liner Transportation Co. Inc., considering the complaint as based upon criminal
negligence, is likewise not in the accordance with law. In crime committed by an employee within
the scope of his duties, the employer's liability is subsidiary, not solidary, in accordance with
Article 103 of the Revised Penal Code which provides:.

ART. 103. Subsidiary civil liability of other persons. — 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.
REPUBLIC OF THE PHILIPPINES v. COURT OF APPEALS G.R. No. 116463; June 10, 2003

FIRST DIVISION

G.R. No. 116463 June 10, 2003

REPUBLIC OF THE PHILIPPINES thru the DEPARTMENT OF PUBLIC WORKS and HIGHWAYS
(DPWH), Petitioner,
vs.
COURT OF APPEALS, HON. AMANDA VALERA-CABIGAO in her capacity as Presiding Judge
of the Regional Trial Court, Branch 73, Malabon, Metro Manila, and NAVOTAS INDUSTRIAL
CORPORATION, Respondents.

DECISION

CARPIO, J.:

The Case

Before this Court is a Petition for Review of the Decision1 of the Court of Appeals dated 18 July 1994,
in CA-G.R. CV No. 33094.2 The Court of Appeals affirmed the Order of the Regional Trial Court of
Malabon ("Malabon trial court") which denied the motion of petitioner to consolidate Civil Case No.
1153-MN pending before it with Criminal Cases Nos. 16889-16900 filed with the Sandiganbayan. This
petition seeks to restrain permanently the Malabon trial court from further hearing Civil Case No. 1153-
MN and to dismiss the case.

The Antecedent Facts

Private respondent Navotas Industrial Corporation ("NIC") is a corporation engaged in dredging

operations throughout the Philippines. On 27 November 1985, then Public Works and Highways
Minister Jesus Hipolito requested former President Ferdinand E. Marcos to release ₱800 million to
finance the immediate implementation of dredging, flood control and related projects in Metro Manila,
Bulacan, Pampanga and Leyte. Of the total funds approved for release, ₱615 million went to the
National Capital Region of the Ministry3 of Public Works and Highways ("DPWH").

The DPWH allocated the ₱615 million to several projects covered by twenty-one contracts. The DPWH
awarded one of the contractors, NIC, ₱194,454,000.00 worth of dredging work in four contracts for
completion within 350 calendar days.

NIC alleges that the dredging work proceeded pursuant to specific work schedules and plan approved
by DPWH. NIC contends that it accomplished 95.06 percent of the required total volume of work or
₱184,847,970.00 worth of services based on an alleged evaluation by DPWH. However, NIC maintains
that DPWH paid only 79.22 percent of the accomplished work, leaving a balance of ₱30,799,676.00.

On 20 September 1988, NIC filed a complaint for sum of money with the Malabon trial court against
the Republic of the Philippines, thru the DPWH. The case, docketed as Civil Case No. 1153-MN, was
raffled to Branch 73 of the court, presided by Judge Amanda Valera-Cabigao.

In its Answer, petitioner contends that NIC is not entitled to the amount claimed. Soon after the February
1986 Revolution, DPWH created a fact-finding committee to audit the flood control projects in the
National Capital Region, Bulacan, Pampanga and Leyte. Then DPWH Minister Rogaciano Mercado,
who replaced Minister Jesus Hipolito, ordered the suspension of all projects funded by special budget
released or issued before the snap elections on February 1986, pending inventory and evaluation of
these projects.

Petitioner contends that upon verification and investigation, the DPWH fact-finding committee
discovered that the dredging contracts of NIC with DPWH were null and void. Petitioner claims that NIC
worked on the project five or six months before the award of the dredging contracts to NIC. The
contracts of NIC were awarded without any public bidding. Moreover, DPWH discovered that NIC,
through its corporate officers, connived with some DPWH officials in falsifying certain public documents
to make it appear that NIC had completed a major portion of the project, when no dredging work was
actually performed. The scheme enabled NIC to collect from DPWH ₱146,962,072.47 as payment for
work allegedly accomplished. Petitioner thus filed a counterclaim for the return of the ₱146,962,072.47
plus interest and exemplary damages of ₱100 million.

On 14 July 1986, the DPWH fact-finding committee filed with the Office of the Tanodbayan 4 a case for
estafa thru falsification of public documents and for violation of Republic Act No. 3019 against former
Minister Hipolito. Other DPWH officials5 involved in awarding the dredging contracts to NIC, as well as
Cipriano Bautista,6 president of NIC, were also named respondents. The charges7 were for four counts
corresponding to the four contracts that DPWH entered into with NIC. The case was docketed as TBP
Case No. 86-01163.

However, it was only on 17 June 1991 that former Ombudsman Conrado Vasquez approved the
resolution of the Office of the Special Prosecutor finding probable cause for estafa thru falsification of
public documents and for violation of Section 3 (e) and (g)8 of RA No. 3019. Subsequently, the
Ombudsman filed the corresponding Informations with the First Division of the Sandiganbayan against
all the respondents in TBP Case No. 86-01163. The cases were docketed as Criminal Cases Nos.
16889-16900.

On 14 April 1993, petitioner filed before the Malabon trial court a Motion to Consolidate Civil Case No.
1153-MN with Criminal Cases Nos. 16889-16900 in the Sandiganbayan. Petitioner argued that the civil
case for collection and the criminal cases arose from the same incidents and involve the same facts.
Thus, these cases should be consolidated as mandated by Section 4(b) of Presidential Decree No.
1606, as amended.

On 18 June 1993, the Malabon trial court issued a Resolution denying petitioner’s Motion for
Consolidation. Thereafter, petitioner filed a Motion for Reconsideration which the Malabon trial court
denied on 7 November 1993.

On 19 January 1994, petitioner filed a Petition for Certiorari, Prohibition and Mandamus with the Court
of Appeals docketed as CA-G.R. CV No. 33094. In a Decision dated 18 July 1994, the Court of Appeals
dismissed the petition. On 12 September 1994, petitioner filed with the Court this petition for review.

On 26 September 1994, the Court resolved to issue the temporary restraining order prayed for by
petitioner. Consequently, the Malabon trial court desisted from hearing further Civil Case No. 1153-MN.

The Ruling of the Court of Appeals

In dismissing the petition for Certiorari, Prohibition and Mandamus filed by petitioner, the Court of
Appeals ruled as follows:
It is clear that in the same manner that the RTC would have no jurisdiction relative to violations of
Republic Act Nos. 3019, as amended, and 1379, neither could the Sandiganbayan acquire jurisdiction
over collection of sum of money, the latter not involving recovery of civil liability arising from the offense
charged. More specifically, the said Sandiganbayan would have no power whatsoever to order the
defendant in the civil case (the Republic of the Philippines thru the DPWH) to pay the private respondent
the amount of ₱30,799,676.00 claimed by the latter. One of the averred purposes then of consolidation
(to avoid multiplicity of suits) could not be realized. A civil action would still have to be instituted by the
private respondent to recover the amount allegedly due.

The Issues

I.

WHETHER THE PETITION WAS FILED ON TIME.

II.

WHETHER THE COURT OF APPEALS ERRED IN NOT ORDERING THE CONSOLIDATION OF

CIVIL CASE NO. 1153-MN WITH CRIMINAL CASES NOS. 16889-16900 WITH THE
SANDIGANBAYAN AS REQUIRED BY SECTION 4(B) OF P.D. 1606. 9

The Ruling of the Court

The petition is devoid of merit.

First Issue: Timeliness of the filing of the petition

We first resolve a minor issue raised by NIC regarding the timeliness of the filing of this petition.

In its Comment, NIC seeks the dismissal of the petition on the ground that it was not served on time.
Petitioner admittedly filed two motions for extension of time, each for fifteen days. The last day for filing
the second motion for extension was on 11 September 1994. NIC, however, asserts that a copy of the
petition was sent by registered mail to its counsel only on 12 September 1994 or a day after the last
day for filing.

NIC, believing that this petition was filed out of time, now asks the Court to consider the instant petition
as not having been filed, making the Resolution of the Court of Appeals final and executory.

We do not agree.

NIC harps on the fact that the petition was sent by registered mail only on 12 September 1994, when
the last day for filing was on 11 September 1994. NIC, however, overlooked one significant fact. The
last day for filing, 11 September 1994, fell on a Sunday.

Based on Section 1,10 Rule 22 of the Rules of Court, and as applied in several cases, 11 "where the last
day for doing any act required or permitted by law falls on a Saturday, a Sunday, or a legal holiday in
the place where the court sits, the time shall not run until the next working day." Thus, petitioner filed
on time its petition on 12 September 1994, the next working day, following the last day for filing which
fell on a Sunday.

Second Issue: Consolidation of the Cases

The main issue before us is whether Civil Case No. 1153-MN pending with the Malabon trial court
should be consolidated with Criminal Cases Nos. 16889-16900 filed with the Sandiganbayan.

Petitioner argues that the civil case for collection of sum of money and the criminal cases for estafa
thru falsification of public documents and for violation of RA No. 3019 arose from the same transaction
and involve similar questions of fact and law. Petitioner claims that all these cases pertain to only one
issue, that is, whether NIC performed dredging work. Petitioner argues that a determination in the civil
case that NIC performed dredging work will entitle NIC to the balance of the contract price. Similarly,
petitioner claims that the criminal cases also involve the same issue since petitioner charges that the
accused connived in falsifying documents and in fraudulently collecting payments for non-existing
dredging work. In sum, petitioner asserts that since the issues in all these cases are the same, the
parties will have to present the same evidence. Therefore, the consolidation of these cases is in order.

We do not agree.

Consolidation is a matter of discretion with the court. Consolidation becomes a matter of right only when
the cases sought to be consolidated involve similar questions of fact and law, provided certain
requirements are met. The purpose of consolidation is to avoid multiplicity of suits, prevent delay, clear
congested dockets, simplify the work of the trial court, and save unnecessary expense. 12

We cannot order the consolidation of the civil case for collection with the criminal cases for two reasons.
First, the Sandiganbayan has no jurisdiction over the collection case. Second, the Rules of Court do
not allow the filing of a counterclaim or a third-party complaint in a criminal case.

First, the Sandiganbayan was created as a special court to hear graft cases against government
officials of a particular salary grade for violations of specific laws. 13 Presidential Decree No. 1606,14 as
amended by Republic

Act No. 8249,15 outlines the Sandiganbayan’s jurisdiction as follows:

Sec. 4. Jurisdiction. — The Sandiganbayan shall exercise exclusive original jurisdiction in all cases
involving:

A. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and
Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book II of the
Revised Penal Code, where one or more of the accused are officials occupying the following
positions in the government, whether in a permanent, acting or interim capacity, at the time of
the commission of the offense:

(1) Officials of the executive branch occupying the positions of regional director and higher,
otherwise classified as Grade '27' and higher, of the Compensation and Position Classification
Act of 1989 (Republic Act No. 6758), specifically including:

xxx

B. Other offenses or felonies whether simple or complexed with other crimes committed by the
public officials and employees mentioned in subsection a of this section in relation to their office.

C. Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2,
14 and 14-A, issued in 1986.
In cases where none of the accused are occupying positions corresponding to Salary Grade '27' or
higher, as prescribed in the said Republic Act No. 6758, or military and PNP officers mentioned above,
exclusive original jurisdiction thereof shall be vested in the proper regional trial court, metropolitan trial
court, municipal trial court, and municipal circuit trial court, as the case may be, pursuant to their
respective jurisdictions as provided in Batas Pambansa Blg. 129, as amended.

The Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments, resolutions or
order of regional trial courts whether in the exercise of their own original jurisdiction or of their appellate
jurisdiction as herein provided.

xxx

In case private individuals are charged as co-principals, accomplices or accessories with the public
officers or employees, including those employed in government-owned or controlled corporations, they
shall be tried jointly with said public officers and employees in the proper courts which shall exercise
exclusive jurisdiction over them.

x x x.

The law does not include civil cases for collection of sum of money among the cases falling under the
jurisdiction of the Sandiganbayan. If we consolidate the collection case in the Malabon trial court with
the criminal cases, the Sandiganbayan will have no jurisdiction to hear and decide the collection case.
Even if NIC proves it is entitled to payment, the Sandiganbayan will have no jurisdiction to award any
money judgment to NIC. NIC will still have to file a separate case in the regular court for the collection
of its claim. Thus, the avowed purpose of consolidation which is to avoid multiplicity of suits will not be
achieved.

Petitioner invokes Naguiat v. Intermediate Appellate Court16 in claiming that a civil action not arising
from the offense charged may be consolidated with the criminal action. Indeed, Naguiat allowed the
consolidation of the criminal case with a civil case arising ex contractu. In consolidating the two
cases, Naguiat relied on Canos v. Peralta17 where the Court consolidated a civil action for the
recovery of wage differential with a criminal action for violation of the Minimum Wage Law. Canos,
however, made an important qualification before a court may order the consolidation of
cases. Canos held that:

A court may order several actions pending before it to be tried together where they arise from the same
act, event or transaction, involve the same or like issues, and depend largely or substantially on the
same evidence, provided that the court has jurisdiction over the cases to be consolidated x x x.
(Emphasis supplied)

Thus, an essential requisite of consolidation is that the court must have jurisdiction over all the cases
consolidated before it. Since the Sandiganbayan does not have jurisdiction over the collection case,
the same cannot be consolidated with the criminal cases even if these cases involve similar questions
of fact and law. Obviously, consolidation of the collection case with the criminal cases will be a useless
and empty formality since the Sandiganbayan, being devoid of jurisdiction over the collection case,
cannot act on it.

Second, we cannot order the consolidation of the civil action filed by NIC with the criminal cases in the
Sandiganbayan because the civil case amounts to a counterclaim or a third-party complaint in a criminal
case. While NIC, as a corporate entity, is not an accused in the criminal cases, a consolidation of NIC’s
collection case with the criminal cases will have the same effect of a counterclaim or a third-party
complaint against petitioner and DPWH. In such case, the rule against counterclaims and third-party
complaints in criminal cases may be applied by analogy.

Section 1, Rule 111 of the 2000 Rules on Criminal Procedure expressly requires the accused to litigate
his counterclaim separately from the criminal action.

SECTION 1. Institution of criminal and civil actions.-

(a) xxx

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)

This paragraph was incorporated in the 2000 Rules of Criminal Procedure to address the lacuna
mentioned in Cabaero v. Cantos18 where the Court noted the "absence of clear-cut rules governing
the prosecution of impliedly instituted civil action and the necessary consequences and implications
thereof."19 In the same vein, the Court in Cabaero clarified that:

[T]he counterclaim of the accused cannot be tried together with the criminal case because, as already
discussed, it will unnecessarily complicate and confuse the criminal proceedings. Thus, the trial court
should confine itself to the criminal aspect and the possible civil liability of the accused arising out of
the crime. The counterclaim (and cross-claim or third party complaint, if any) should be set aside or
refused cognizance without prejudice to their filing in separate proceedings at the proper time.

Thus, a counterclaim in a criminal case must be litigated separately to avoid complication and confusion
in the resolution of the criminal cases. This is the rationale behind Section 1 of Rule 111.1âwphi1 The
same rationale applies to NIC’s collection case against petitioner and DPWH. Thus, NIC’s collection
case must be litigated separately before the Malabon trial court to avoid confusion in resolving the
criminal cases with the Sandiganbayan.

Petitioner lodged its own counterclaim to the collection case filed with the Malabon trial court, praying
for the return of the payment DPWH made to NIC arising from the dredging contracts. However,
petitioner’s counterclaim is deemed abandoned by virtue of Section 4 of PD No. 1606, as
amended.20 The last paragraph of Section 4 of PD No. 1606, as amended, provides that:

Any provision of law or Rules of Court to the contrary notwithstanding, the criminal action and the
corresponding civil action for the recovery of civil liability shall at all times be simultaneously instituted
with, and jointly determined in, the same proceeding by the Sandiganbayan or the appropriate courts,
the filing of the criminal action being deemed to necessarily carry with it the filing of the civil action, and
no right to reserve the filing of such civil action separately from the criminal action shall be
recognized: Provided, however, That where the civil action had heretofore been filed separately
but judgment therein has not yet been rendered, and the criminal case is hereafter filed with the
Sandiganbayan or the appropriate court, said civil action shall be transferred to the
Sandiganbayan or the appropriate court, as the case may be, for consolidation and joint
determination with the criminal action, otherwise the separate civil action shall be deemed
abandoned. (Emphasis supplied)

Petitioner’s counterclaim in the civil case pending with the Malabon trial court for the return of the
amount DPWH paid NIC is an action to recover civil liability ex delicto. However, this action to recover
civil liability ex delicto is by operation of law included in the criminal cases filed with the Sandiganbayan.
By mandate of RA No. 8249, the counterclaim filed earlier in the separate civil action with the Malabon
trial court "shall be deemed abandoned."

The only question left is whether NIC’s civil case before the Malabon trial court for collection of sum of
money can proceed independently of the criminal cases filed with the Sandiganbayan. NIC’s collection
case for unpaid services from its dredging contracts with DPWH obviously does not fall under Articles
32, 33 or 34 (on Human Relations) of the Civil Code. Neither does it fall under Article 2176 (on quasi-
delict) of the Civil Code. Under Section 3 of Rule 111, civil actions falling under Articles 32, 33, 34 or
2176 may proceed independently and separately from the criminal case. However, NIC cannot invoke
any of these articles.

The only other possibility is for NIC’s civil action to fall under Article 31 of the Civil Code which provides:

Art. 31. When the civil action is based on an obligation not arising from the act or omission complained
of as a felony, such civil action may proceed independently of the criminal proceedings and regardless
of the result of the latter.

An example of a case falling under Article 31 is a civil action to recover the proceeds of sale of goods
covered by a trust receipt. Such civil action can proceed independently of the criminal action for violation
of the trust receipt law.21 In such a case, the validity of the contract, on which the civil action is based,
is not at issue. What is at issue is the violation of an obligation arising from a valid contract - the trust
receipt.

However, when the civil action is based on a purported contract that is assailed as illegal per se, as
when the execution of the contract is alleged to violate the Anti-Graft and Corrupt Practices Act, Article
31 does not apply. In such a situation, the contract if proven illegal cannot create any valid obligation
that can be the basis of a cause of action in a civil case. Under Article 1409 22 of the Civil Code, a
contract "whose cause, object or purpose is contrary to law," or a contract that is "expressly prohibited
or declared void by law," is void from the very beginning. No party to such void contract can claim any
right under such contract or enforce any of its provisions.

Under Section 3 (g) of the Anti-Graft and Corrupt Practices Act, entering into a contract that is manifestly
and grossly disadvantageous to the government is "declared to be unlawful." If the act of entering into
the contract is assailed as a crime in itself, then the issue of whether the contract is illegal must first be
resolved before any civil action based on the contract can proceed. Only the Sandiganbayan has the
jurisdiction to decide whether the act of entering into such contract is a crime, where the salary grade
of one of the accused is grade 27 or higher,23 as in Criminal Cases Nos. 16889-16900 filed with the
Sandiganbayan.1âwphi1

Article 31 speaks of a civil action "based on an obligation not arising from the act x x x complained of
as a felony." This clearly means that the obligation must arise from an act not constituting a
crime. In the instant case, the act purporting to create the obligation is assailed as a crime in itself.
That act, which is prohibited by law, is the entering into dredging contracts that are manifestly and
grossly disadvantageous to the government.24 A contract executed against the provisions of prohibitory
laws is void.25 If the dredging contracts are declared illegal, then no valid obligation can arise from such
contracts. Consequently, no civil action based on such contracts can proceed independently of the
criminal action.

In contrast, where the civil action is based on a contract that can remain valid even if its violation may
constitute a crime, the civil action can proceed independently. Thus, in estafa thru violation of the trust
receipt law, the violation of the trust receipt constitutes a crime. However, the trust receipt itself remains
valid, allowing a civil action based on the trust receipt to proceed independently of the criminal case.
Clearly, NIC’s civil case before the Malabon trial court does not fall under Article 31 of the Civil Code.
This calls then for the application of the second paragraph of Section 2 of Rule 111 which states that
"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." Consequently, the civil
case for collection pending in the Malabon trial court must be suspended until after the termination of
the criminal cases filed with the Sandiganbayan.

The suspension of the civil case for collection of sum of money will avoid the possibility of conflicting
decisions between the Sandiganbayan and the Malabon trial court on the validity of NIC’s dredging
contracts. If the Sandiganbayan declares the dredging contracts illegal and void ab initio, and such
declaration becomes final, then NIC’s civil case for collection of sum of money will have no legal leg to
stand on. However, if the Sandiganbayan finds the dredging contracts valid, then NIC’s collection case
before the Malabon trial court can then proceed to trial.

WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals dated 18 July 1994 is
AFFIRMED with MODIFICATION. The counterclaim of petitioner in Civil Case No. 1153-MN pending
with the Regional Trial Court of Malabon, Branch 73, is deemed abandoned. The Regional Trial Court
of Malabon, Branch 73, is ordered to suspend the trial of Civil Case No. 1153-MN until the termination
of Criminal Cases Nos. 16889-16900 filed with the Sandiganbayan.

SO ORDERED.
 Article 32 – Violation of Constitutional rights.

LIWAYWAY VINZONS-CHATO v. FORTUNE TOBACCO CORPORATION G.R. No. 141309;

December 23, 2008

Republic of the Philippines

SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 141309 June 19, 2007

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 Order2 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 complaint11 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 dismiss 12 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.
ROGELIO ABERCA v. MAJ. GEN. FABIAN VER G.R. No. L-69866 April 15, 1988

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-69866 April 15, 1988

ROGELIO ABERCA, RODOLFO BENOSA, NESTOR BODINO NOEL ETABAG DANILO DE LA

FUENTE, BELEN DIAZ-FLORES, MANUEL MARIO GUZMAN, ALAN JAZMINEZ, EDWIN LOPEZ,
ALFREDO MANSOS, ALEX MARCELINO, ELIZABETH PROTACIO-MARCELINO, JOSEPH
OLAYER, CARLOS PALMA, MARCO PALO, ROLANDO SALUTIN, BENJAMIN SESGUNDO,
ARTURO TABARA, EDWIN TULALIAN and REBECCA TULALIAN petitioners,
vs.
MAJ. GEN. FABIAN VER, COL. FIDEL SINGSON, COL. ROLANDO ABADILLA, COL. GERARDO
B. LANTORIA, COL. GALILEO KINTANAR, 1ST LT. COL. PANFILO M. LACSON, MAJ. RODOLFO
AGUINALDO, CAPT. DANILO PIZARRO, 1ST LT. PEDRO TANGO, 1ST LT. ROMEO RICARDO,
1ST LT. RAUL BACALSO, MSGT BIENVENIDO BALABA and REGIONAL TRIAL COURT, National
Capital Judicial Region, Branch XCV (95), Quezon City, respondents.

YAP, J.:

This petition for certiorari presents vital issues not heretofore passed upon by this Court. It poses the
question whether the suspension of the privilege of the writ of habeas corpus bars a civil action for
damages for illegal searches conducted by military personnel and other violations of rights and liberties
guaranteed under the Constitution. If such action for damages may be maintained, who can be held
liable for such violations: only the military personnel directly involved and/or their superiors as well.

This case stems from alleged illegal searches and seizures and other violations of the rights and
liberties of plaintiffs by various intelligence units of the Armed Forces of the Philippines, known as Task
Force Makabansa (TFM) ordered by General Fabian Ver "to conduct pre-emptive strikes against known
communist-terrorist (CT) underground houses in view of increasing reports about CT plans to sow
disturbances in Metro Manila," Plaintiffs allege, among others, that complying with said order, elements
of the TFM raided several places, employing in most cases defectively issued judicial search warrants;
that during these raids, certain members of the raiding party confiscated a number of purely personal
items belonging to plaintiffs; that plaintiffs were arrested without proper warrants issued by the courts;
that for some period after their arrest, they were denied visits of relatives and lawyers; that plaintiffs
were interrogated in violation of their rights to silence and counsel; that military men who interrogated
them employed threats, tortures and other forms of violence on them in order to obtain incriminatory
information or confessions and in order to punish them; that all violations of plaintiffs constitutional
rights were part of a concerted and deliberate plan to forcibly extract information and incriminatory
statements from plaintiffs and to terrorize, harass and punish them, said plans being previously known
to and sanctioned by defendants.

Plaintiffs sought actual/compensatory damages amounting to P39,030.00; moral damages in the

amount of at least P150,000.00 each or a total of P3,000,000.00; exemplary damages in the amount
of at least P150,000.00 each or a total of P3,000,000.00; and attorney's fees amounting to not less
than P200,000.00.

A motion to dismiss was filed by defendants, through their counsel, then Solicitor-General Estelito
Mendoza, alleging that (1) plaintiffs may not cause a judicial inquiry into the circumstances of their
detention in the guise of a damage suit because, as to them, the privilege of the writ of habeas corpus
is suspended; (2) assuming that the courts can entertain the present action, defendants are immune
from liability for acts done in the performance of their official duties; and (3) the complaint states no
cause of action against the defendants. Opposition to said motion to dismiss was filed by plaintiffs
Marco Palo, Danilo de la Fuente, Benjamin Sesgundo, Nel Etabag, Alfredo Mansos and Rolando
Salutin on July 8, 1983, and by plaintiffs Edwin Lopez, Manuel Mario Guzman, Alan Jasminez, Nestor
Bodino, Carlos Palma, Arturo Tabara, Joseph Olayer, Rodolfo Benosa, Belen Diaz, Flores, Rogelio
Aberca, Alex Marcelino and Elizabeth Marcelino on July 21, 1983. On November 7, 1983, a
Consolidated Reply was filed by defendants' counsel.

Then, on November 8, 1983, the Regional Trial Court, National Capital Region, Branch 95, Judge
Willelmo C. Fortun, Presiding, 1 issued a resolution granting the motion to dismiss. I sustained, lock,
stock and barrel, the defendants' contention (1) the plaintiffs may not cause a judicial inquiry into the
circumstances of their detention in the guise of a damage suit because, as to them, the privilege of the
writ of habeas corpus is suspended; (2) that assuming that the court can entertain the present action,
defendants are immune from liability for acts done in the performance of their official duties; and (3)
that the complaint states no cause of action against defendants, since there is no allegation that the
defendants named in the complaint confiscated plaintiffs' purely personal properties in violation of their
constitutional rights, and with the possible exception of Major Rodolfo Aguinaldo and Sergeant
Bienvenido Balabo committed acts of torture and maltreatment, or that the defendants had the duty to
exercise direct supervision and control of their subordinates or that they had vicarious liability as
employers under Article 2180 of the Civil Code. The lower court stated, "After a careful study of
defendants' arguments, the court finds the same to be meritorious and must, therefore, be granted. On
the other hand, plaintiffs' arguments in their opposition are lacking in merit."

A motion to set aside the order dismissing the complaint and a supplemental motion for reconsideration
was filed by the plaintiffs on November 18, 1983, and November 24, 1983, respectively. On December
9, 1983, the defendants filed a comment on the aforesaid motion of plaintiffs, furnishing a copy thereof
to the attorneys of all the plaintiffs, namely, Attys. Jose W. Diokno, Procopio Beltran, Rene Sarmiento,
Efren Mercado, Auguso Sanchez, Antonio L. Rosales, Pedro B. Ella Jr., Arno V. Sanidad, Alexander
Padilla, Joker Arroyo, Rene Saguisag, Ramon Esguerra and Felicitas Aquino.

On December 15, 1983, Judge Fortun issued an order voluntarily inhibiting himself from further
proceeding in the case and leaving the resolution of the motion to set aside the order of dismissal to
Judge Lising, "to preclude any suspicion that he (Judge Fortun) cannot resolve [the] aforesaid pending
motion with the cold neutrality of an impartial judge and to put an end to plaintiffs assertion that the
undersigned has no authority or jurisdiction to resolve said pending motion." This order prompted
plaintiffs to reesolve an amplificatory motion for reconsideration signed in the name of the Free Legal
Assistance Group (FLAG) of Mabini Legal Aid Committee, by Attys. Joker P. Arroyo, Felicitas Aquino
and Arno Sanidad on April 12, 1984. On May 2,1984, the defendants filed a comment on said
amplificatory motion for reconsideration.

In an order dated May 11, 1984, the trial court, Judge Esteban Lising, Presiding, without acting on the
motion to set aside order of November 8, 1983, issued an order, as follows:

It appearing from the records that, indeed, the following plaintiffs, Rogelio Aberca, Danilo
de la Fuente and Marco Palo, represented by counsel, Atty. Jose W. Diokno, Alan
 Jasminez represented by counsel, Atty. Augusta Sanchez, Spouses Alex Marcelino and
Elizabeth Protacio-Marcelino, represented by counsel, Atty. Procopio Beltran, Alfredo
Mansos represented by counsel, Atty. Rene Sarmiento, and Rolando Salutin, represented
by counsel, Atty. Efren Mercado, failed to file a motion to reconsider the Order of
November 8, 1983, dismissing the complaint, nor interposed an appeal therefrom within
the reglementary period, as prayed for by the defendants, said Order is now final against
said plaintiffs.

Assailing the said order of May 11, 1984, the plaintiffs filed a motion for reconsideration on May
28,1984, alleging that it was not true that plaintiffs Rogelio Aberca, Danilo de la Fuente, Marco Palo,
Alan Jasminez, Alex Marcelino, Elizabeth Protacio-Marcelino, Alfredo Mansos and Rolando Salutin
failed to file a motion to reconsider the order of November 8, 1983 dismissing the complaint, within the
reglementary period. Plaintiffs claimed that the motion to set aside the order of November 8, 1983 and
the amplificatory motion for reconsideration was filed for all the plaintiffs, although signed by only some
of the lawyers.

In its resolution of September 21, 1984, the respondent court dealt with both motions (1) to reconsider
its order of May 11, 1984 declaring that with respect to certain plaintiffs, the resolution of November 8,
1983 had already become final, and (2) to set aside its resolution of November 8, 1983 granting the
defendants' motion to dismiss. In the dispositive portion of the order of September 21, 1984, the
respondent court resolved:

(1) That the motion to set aside the order of finality, dated May 11, 1984, of the Resolution
of dismissal of the complaint of plaintiffs Rogelio Aberca, Danilo de la Fuente, Marco Palo,
Alan Jasminez Alex Marcelino, Elizabeth Protacio-Marcelino, Alfredo Mansos and
Rolando Salutin is deed for lack of merit;

(2) For lack of cause of action as against the following defendants, to wit:

1. Gen Fabian Ver

2. Col. Fidel Singson

3. Col. Rolando Abadilla

4. Lt. Col. Conrado Lantoria, Jr.

5. Col. Galileo Montanar

6. Col. Panfilo Lacson

7. Capt. Danilo Pizaro

8. 1 Lt Pedro Tango

9. Lt. Romeo Ricardo

10. Lt. Raul Bacalso

 the motion to set aside and reconsider the Resolution of dismissal of the present action
or complaint, dated November 8, 1983, is also denied but in so far as it affects and refers
to defendants, to wit:

1. Major Rodolfo Aguinaldo, and

2. Master Sgt. Bienvenido Balaba

the motion to reconsider and set aside the Resolution of dismissal dated November 3,
1983 is granted and the Resolution of dismissal is, in this respect, reconsidered and
modified.

Hence, petitioners filed the instant petition for certiorari on March 15, 1985 seeking to annul and set
aside the respondent court's resolution of November 8, 1983, its order of May 11, 1984, and its
resolution dated September 21, 1984. Respondents were required to comment on the petition, which it
did on November 9, 1985. A reply was filed by petitioners on August 26, 1986.

We find the petition meritorious and decide to give it due course.

At the heart of petitioners' complaint is Article 32 of the Civil Code which 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:

(1) Freedom of religion;

(2) Freedom of speech;

(3) Freedom to write for the press or to maintain a periodical publication;

(4) Freedom from arbitrary or illegal detention;

(5) Freedom of suffrage;

(6) The right against deprivation of property without due process

(7) of law;

(8) The right to a just compensation when private property is taken for public use;

(9) The right to the equal protection of the laws;

(10) The right to be secure in one's person, house, papers, and effects against
unreasonable searches and seizures;

(11) The liberty of abode and of changing the same;

(12) The privacy of cmmunication and correspondence;

 (13) The right to become a member of associations or societies for purposes not contrary
to law;

(14) The right to take part in a peaceable assembly to petition the Government for redress
of grievances;

(15) The right to be free from involuntary servitude in any form;

(16) The rigth of the accused against excessive bail;

(17) The rigth of the aaccused to be heard by himself and counsel, to be informed of the
nature and cause of the accusation against him, to have a speedy and public trial, to meet
the witnesses face to face, and to have compulsory process to secure the attendance of
witness in behalf;

(18) Freedom from being compelled to be a witness against ones self, or from being
forced to confess guilt, or from being induced by a promise of immunity or reward to make
such confession, except when the person confessing becomes a State witness;

(19) Freedom from excessive fines or cruel and unusual punishment, unless the same is
imposed or inflicted in accordance with a statute which has not been judicially declared
unconstitutional; and

(20) Freedom of access to the courts.

In any of the cases referred to in this article, whether or not the defendant's act or omission
constitutes a criminal offense, the against grieved party has a right to commence an
entirely separate and distinct civil action for damages, and for other relief. Such civil action
shall proceed independently of any criminal prosecution (if the latter be instituted), and
may be proved by a preponderance of evidence.

The indemnity shall include moral damages. Exemplary damages may also be
adjudicated.

The responsibility herein set forth is not demandable from a judge unless his act or
omission constitutes a violation of the Penal Code or other penal statute.

It is obvious that the purpose of the above codal provision is to provide a sanction to the deeply
cherished rights and freedoms enshrined in the Constitution. Its message is clear; no man may seek to
violate those sacred rights with impunity. In times of great upheaval or of social and political stress,
when the temptation is strongest to yield — borrowing the words of Chief Justice Claudio Teehankee
— to the law of force rather than the force of law, it is necessary to remind ourselves that certain basic
rights and liberties are immutable and cannot be sacrificed to the transient needs or imperious demands
of the ruling power. The rule of law must prevail, or else liberty will perish. Our commitment to
democratic principles and to the rule of law compels us to reject the view which reduces law to nothing
but the expression of the will of the predominant power in the community. "Democracy cannot be a
reign of progress, of liberty, of justice, unless the law is respected by him who makes it and by him for
whom it is made. Now this respect implies a maximum of faith, a minimum of Idealism. On going to the
bottom of the matter, we discover that life demands of us a certain residuum of sentiment which is not
derived from reason, but which reason nevertheless controls. 2
Seeking to justify the dismissal of plaintiffs' complaint, the respondents postulate the view that as public
officers they are covered by the mantle of state immunity from suit for acts done in the performance of
official duties or function In support of said contention, respondents maintain that —

Respondents are members of the Armed Forces of the Philippines. Their primary duty is
to safeguard public safety and order. The Constitution no less provides that the President
may call them "to prevent or supress lawless violence, invasion, insurrection or rebellion,
or imminent danger thereof." (Constitution, Article VII, Section 9).

On January 17, 1981, the President issued Proclamation No. 2045 lifting martial law but
providing for the continued suspension of the privilege of the writ of habeas corpus in
view of the remaining dangers to the security of the nation. The proclamation also
provided "that the call to the Armed Forces of the Philippines to prevent or suppress
lawless violence, insuitection rebellion and subversion shall continue to be in force and
effect."

Petitioners allege in their complaint that their causes of action proceed from respondent
General Ver's order to Task Force Makabansa to launch pre-emptive strikes against
communist terrorist underground houses in Metro Manila. Petitioners claim that this order
and its subsequent implementation by elements of the task force resulted in the violation
of their constitutional rights against unlawful searches, seizures and arrest, rights to
counsel and to silence, and the right to property and that, therefore, respondents Ver and
the named members of the task force should be held liable for damages.

But, by launching a pre-emptive strike against communist terrorists, respondent members

of the armed forces merely performed their official and constitutional duties. To allow
petitioners to recover from respondents by way of damages for acts performed in the
exercise of such duties run contrary to the policy considerations to shield respondents as
public officers from undue interference with their duties and from potentially disabling
threats of hability (Aarlon v. Fitzgerald 102 S. Ct. 2731-1 Forbes v. Chuoco Tiaco, 16 Phil.
634), and upon the necessity of protecting the performance of governmental and public
functions from being harassed unduly or constantly interrupted by private suits (McCallan
v. State, 35 Cal. App. 605; Metran v. Paredes, 79 Phil. 819).

xxx xxx xxx

The immunity of public officers from liability arising from the performance of their duties
is now a settled jurisprudence Alzua v. Johnson, 21 Phil. 308; Zulueta v. Nicolas, 102
Phil. 944; Spalding v. Vilas, 161 US 483; 40 L. Ed. 780, 16 S. Ct. 631; Barr v. Mateo, 360;
Butz v. Economon, 438 US 478; 57 L. Ed. 2d 895, 98 S. Ct. 2894; Scheuer v. Rhodes,
416 US 232; Forbes v. Chuoco Tiaco, supra; Miller v. de Leune, 602 F. 2d 198; Sami v.
US, 617 F. 2d 755).

Respondents-defendants who merely obeyed the lawful orders of the President and his
call for the suppression of the rebellion involving petitioners enjoy such immunity from
Suit.3

We find respondents' invocation of the doctrine of state immunity from suit totally misplaced. The cases
invoked by respondents actually involved acts done by officers in the performance of official duties
written the ambit of their powers. As held in Forbes, etc. vs. Chuoco Tiaco and Crossfield: 4
 No one can be held legally responsible in damages or otherwise for doing in a legal
manner what he had authority, under the law, to do. Therefore, if the Governor-General
had authority, under the law to deport or expel the defendants, and circumstances
justifying the deportation and the method of carrying it out are left to him, then he cannot
be held liable in damages for the exercise of this power. Moreover, if the courts are without
authority to interfere in any manner, for the purpose of controlling or interferring with the
exercise of the political powers vested in the chief executive authority of the Government,
then it must follow that the courts cannot intervene for the purpose of declaring that he is
liable in damages for the exeercise of this authority.

It may be that the respondents, as members of the Armed Forces of the Philippines, were merely
responding to their duty, as they claim, "to prevent or suppress lawless violence, insurrection, rebellion
and subversion" in accordance with Proclamation No. 2054 of President Marcos, despite the lifting of
martial law on January 27, 1981, and in pursuance of such objective, to launch pre- emptive strikes
against alleged communist terrorist underground houses. But this cannot be construed as a blanket
license or a roving commission untramelled by any constitutional restraint, to disregard or transgress
upon the rights and liberties of the individual citizen enshrined in and protected by the Constitution. The
Constitution remains the supreme law of the land to which all officials, high or low, civilian or military,
owe obedience and allegiance at all times.

Article 32 of the Civil Code which renders any public officer or employee or any private individual liable
in damages for violating the Constitutional rights and liberties of another, as enumerated therein, does
not exempt the respondents from responsibility. Only judges are excluded from liability under the said
article, provided their acts or omissions do not constitute a violation of the Penal Code or other penal
statute.

This is not to say that military authorities are restrained from pursuing their assigned task or carrying
out their mission with vigor. We have no quarrel with their duty to protect the Republic from its enemies,
whether of the left or of the right, or from within or without, seeking to destroy or subvert our democratic
institutions and imperil their very existence. What we are merely trying to say is that in carrying out this
task and mission, constitutional and legal safeguards must be observed, otherwise, the very fabric of
our faith will start to unravel. In the battle of competing Ideologies, the struggle for the mind is just as
vital as the struggle of arms. The linchpin in that psychological struggle is faith in the rule of law. Once
that faith is lost or compromised, the struggle may well be abandoned.

We do not find merit in respondents' suggestion that plaintiffs' cause of action is barred by the
suspension of the privilege of the writ of habeas corpus. Respondents contend that "Petitioners cannot
circumvent the suspension of the privilege of the writ by resorting to a damage suit aimed at the same
purpose-judicial inquiry into the alleged illegality of their detention. While the main relief they ask by the
present action is indemnification for alleged damages they suffered, their causes of action are
inextricably based on the same claim of violations of their constitutional rights that they invoked in the
habeas corpus case as grounds for release from detention. Were the petitioners allowed the present
suit, the judicial inquiry barred by the suspension of the privilege of the writ will take place. The net
result is that what the courts cannot do, i.e. override the suspension ordered by the President,
petitioners will be able to do by the mere expedient of altering the title of their action."

We do not agree. We find merit in petitioners' contention that the suspension of the privilege of the writ
of habeas corpus does not destroy petitioners' right and cause of action for damages for illegal arrest
and detention and other violations of their constitutional rights. The suspension does not render valid
an otherwise illegal arrest or detention. What is suspended is merely the right of the individual to seek
release from detention through the writ of habeas corpus as a speedy means of obtaining his liberty.
Moreover, as pointed out by petitioners, their right and cause of action for damages are explicitly
recognized in P.D. No. 1755 which amended Article 1146 of the Civil Code by adding the following to
its text:

However, when the action (for injury to the rights of the plaintiff or for a quasi-delict) arises
from or out of any act, activity or conduct of any public officer involving the exercise of
powers or authority arising from Martial Law including the arrest, detention and/or trial of
the plaintiff, the same must be brought within one (1) year.

Petitioners have a point in contending that even assuming that the suspension of the privilege of the
writ of habeas corpus suspends petitioners' right of action for damages for illegal arrest and detention,
it does not and cannot suspend their rights and causes of action for injuries suffered because of
respondents' confiscation of their private belongings, the violation of their right to remain silent and to
counsel and their right to protection against unreasonable searches and seizures and against torture
and other cruel and inhuman treatment.

However, we find it unnecessary to address the constitutional issue pressed upon us. On March 25,
1986, President Corazon C. Aquino issued Proclamation No. 2, revoking Proclamation Nos. 2045 and
2045-A and lifting the suspension of the privilege of the writ of habeas corpus. The question therefore
has become moot and academic.

This brings us to the crucial issue raised in this petition. May a superior officer under the notion of
respondent superior be answerable for damages, jointly and severally with his subordinates, to the
person whose constitutional rights and liberties have been violated?

Respondents contend that the doctrine of respondent superior is applicable to the case. We agree. The
doctrine of respondent superior has been generally limited in its application to principal and agent or to
master and servant (i.e. employer and employee) relationship. No such relationship exists between
superior officers of the military and their subordinates.

Be that as it may, however, the decisive factor in this case, in our view, is the language of Article 32.
The law speaks of an officer or employee or person 'directly' or "indirectly" responsible for the violation
of the constitutional rights and liberties of another. Thus, it is not the actor alone (i.e. the one directly
responsible) who must answer for damages under Article 32; the person indirectly responsible has also
to answer for the damages or injury caused to the aggrieved party.

By this provision, the principle of accountability of public officials under the Constitution 5 acquires
added meaning and asgilrnes 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 go 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 ones terms that Article 32 of the Civil Code makes the persons who are directly,
as well as indirectly, responsible for the transgression joint tortfeasors.

In the case at bar, the trial court dropped defendants General Fabian Ver, Col. Fidel Singson, Col.
Rolando Abadilla, Col. Gerardo Lantoria, Jr., Col. Galileo Kintanar, Col. Panfilo Lacson, Capt. Danilo
Pizarro, lst Lt. Pedro Tango, Lt. Romeo Ricardo and Lt. Ricardo Bacalso from the acts of their
subordinates. Only Major Rodolfo Aguinaldo and Master Sgt. Bienvenido Balaba were kept as
defendants on the ground that they alone 'have been specifically mentioned and Identified to have
allegedly caused injuries on the persons of some of the plaintiff which acts of alleged physical violence
constitute a delict or wrong that gave rise to a cause of action. But such finding is not supported by the
record, nor is it in accord with law and jurisprudence.

Firstly, it is wrong to at the plaintiffs' action for damages 5 Section 1, Article 19. to 'acts of alleged
physical violence" which constituted delict or wrong. Article 32 clearly specifies as actionable the act of
violating or in any manner impeding or impairing any of the constitutional rights and liberties
enumerated therein, among others —

1. Freedom from arbitrary arrest or illegal detention;

2. The right against deprivation of property without due process of law;

3. The right to be secure in one's person, house, papers and effects against unreasonable
searches and seizures;

4. The privacy of communication and correspondence;

5. Freedom from being compelled to be a witness against one's self, or from being forced
to confess guilt, or from being induced by a promise of immunity or reward to make a
confession, except when the person confessing becomes a state witness.

The complaint in this litigation alleges facts showing with abundant clarity and details, how plaintiffs'
constitutional rights and liberties mentioned in Article 32 of the Civil Code were violated and impaired
by defendants. The complaint speaks of, among others, searches made without search warrants or
based on irregularly issued or substantially defective warrants; seizures and confiscation, without
proper receipts, of cash and personal effects belonging to plaintiffs and other items of property which
were not subversive and illegal nor covered by the search warrants; arrest and detention of plaintiffs
without warrant or under irregular, improper and illegal circumstances; detention of plaintiffs at several
undisclosed places of 'safehouses" where they were kept incommunicado and subjected to physical
and psychological torture and other inhuman, degrading and brutal treatment for the purpose of
extracting incriminatory statements. The complaint contains a detailed recital of abuses perpetrated
upon the plaintiffs violative of their constitutional rights.

Secondly, neither can it be said that only those shown to have participated "directly" should be held
liable. Article 32 of the Civil Code encompasses within the ambit of its provisions those directly, as well
as indirectly, responsible for its violation.

The responsibility of the defendants, whether direct or indirect, is amply set forth in the complaint. It is
well established in our law and jurisprudence that a motion to dismiss on the ground that the complaint
states no cause of action must be based on what appears on the face of the complaint. 6 To determine
the sufficiency of the cause of action, only the facts alleged in the complaint, and no others, should be
considered. 7 For this purpose, the motion to dismiss must hypothetically admit the truth of the facts
alleged in the complaint. 8

Applying this test, it is difficult to justify the trial court's ruling, dismissing for lack of cause of action the
complaint against all the defendants, except Major Rodolfo Aguinaldo and Master Sgt. Bienvenido
Balaba. The complaint contained allegations against all the defendants which, if admitted
hypothetically, would be sufficient to establish a cause or causes of action against all of them under
Article 32 of the Civil Code.
This brings us to the last issue. Was the trial court correct in dismissing the complaint with respect to
plaintiffs Rogelio Aberca, Danilo de la Puente, Marco Palo, Alan Jazminez, Alex Marcelino, Elizabeth
Protacio-Marcelino, Alfredo Mansos and Rolando Salutin, on the basis of the alleged failure of said
plaintiffs to file a motion for reconsideration of the court's resolution of November 8, 1983, granting the
respondent's motion to dismiss?

It is undisputed that a timely motion to set aside said order of November 8, 1983 was filed by 'plaintiffs,
through counsel. True, the motion was signed only by Atty. Joker P. Arroyo, counsel for Benjamin
Sesgulido; Atty. Antonio Rosales, counsel for Edwin Lopez and Manuel Martin Guzman; Atty. Pedro B.
Ella, Jr., counsel for Nestor Bodino and Carlos Palma; Atty. Arno V. Sanidad, counsel for Arturo Tabara;
Atty. Felicitas S. Aquino, counsel for Joseph Olayer; and Atty. Alexander Padilla, counsel for Rodolfo
Benosa.

But the body of the motion itself clearly indicated that the motion was filed on behalf of all the plaintiffs.
And this must have been also the understanding of defendants' counsel himself for when he filed his
comment on the motion, he furnished copies thereof, not just to the lawyers who signed the motion, but
to all the lawyers of plaintiffs, to wit: Attys. Jose Diokno, Procopio Beltran, Rene Sarmiento, Efren
Mercado, Augusto Sanchez, Antonio Rosales, Pedro Efla Jr., Arno Sanidad, Alexander Padilla, Joker
Arroyo, Rene Saguisag, Ramon Esguerra and Felicitas S. Aquino.

In filing the motion to set aside the resolution of November 8, 1983, the signing attorneys did so on
behalf of all the plaintiff. They needed no specific authority to do that. The authority of an attorney to
appear for and in behalf of a party can be assumed, unless questioned or challenged by the adverse
party or the party concerned, which was never done in this case. Thus, it was grave abuse on the part
of respondent judge to take it upon himself to rule that the motion to set aside the order of November
8, 1953 dismissing the complaint was filed only by some of the plaintiffs, when by its very language it
was clearly intended to be filed by and for the benefit of all of them. It is obvious that the respondent
judge took umbrage under a contrived technicality to declare that the dismissal of the complaint had
already become final with respect to some of the plaintiffs whose lawyers did not sign the motion for
reconsideration. Such action tainted with legal infirmity cannot be sanctioned.

Accordingly, we grant the petition and annul and set aside the resolution of the respondent court, dated
November 8, 1983, its order dated May 11, 1984 and its resolution dated September 21, 1984. Let the
case be remanded to the respondent court for further proceedings. With costs against private
respondents.

SO ORDERED.

Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Bidin, Sarmiento, Cortes and
Griño-Aquino, JJ., concur.

Gutierrez, Jr., J., concur in the result.

Padilla, J., took no part.

Separate Opinions

TEEHANKEE, C.J., concurring:

The Court's judgment at bar makes clear that all persons, be they public officers or employees, or
members of the military or police force or private individuals who directly or indirectly obstruct, defeat,
violate or in any manner impede or impair the constitutional rights and civil liberties of another person,
stand liable and may be sued in court for damages as provided in Art. 32 of the Civil Code.

The case at bar specifically upholds and reinstates the civil action for damages filed in the court below
by petitioners-plaintiffs for illegal searches conducted by military personnel and other violations of their
constitutional rights and liberties. At the same time it rejects the automatic application of the principle
of respondeat superior or command responsibility that would hold a superior officer jointly and severally
accountable for damages, including moral and exemplary, with his subordinates who committed such
transgressions. However, the judgment gives the caveat that a superior officer must not abdicate his
duty to properly supervise his subordinates for he runs the risk of being held responsible for gross
negligence and of being held under the cited provision of the Civil Code as indirectly and solidarily
accountable with the tortfeasor.

The rationale for this rule of law was best expressed by Brandeis in wise: "In a government of laws,
existence of the government be imperilled following it fails to observe the law scrupulously. Our
government is the potent omnipresent teacher. For good or ill, it teaches the whole people by example.
Crime is contagious. If the government becomes the law breaker, it breeds contempt for the law, it
invites every man to become a law unto himself, it invites anarchy. To declare that in the administration
of criminal law the end justifies the means ... would bring terrible retribution." 1

As the writer stress in Hildawa vs. Enrile 2 Which Was an action to enjoin the operations of the dreaded
secret marshals during the past regime, 'In a democratic state, you don't stoop to the level of criminals.
If we stoop to what they do, then we're no better than they ... there would be no difference. ... The
Supreme Court stands as the guarantor of the Constitutional and human rights of all persons within its
jurisdiction and cannot abdicate its basic role under the Constitution that these rights be respected and
enforced. The spirit and letter of the Constitution negates as contrary to the basic precepts of human
rights and freedom that a person's life be snuffed out without due process in a split second even if he
is caught in flagrante delicto — unless it was caned for as an act of self-defense by the law agents
using reasonable means to prevent or repel an unlawful aggression on the part of the deceased.

Needless to say, the criminal acts of the "Sparrow Units" or death squads of the NPA which have
infutrated the cities and suburbs and performed their despicable killings of innocent civilians and military
and police officers constitute an equally perverse violation of the sanctity of human life and must be
severely condemned by all who adhere tothe Rule of the Law.

It need only be pointed out that one of the first acts of the present government under President Corazon
C. Aquino after her assumption of office in February, 1986 was to file our government's ratification and
access to all human rights instruments adopted under the auspices of the United Nations, declaring
thereby the government's commitment to observe the precepts of the United Nations Charter and the
Universal Declaration of Human Rights. More than this, pursuant to our Constitution which the people
decisively ratified on February 2, 1987, the independent office of the Commission on Human Rights
hats been created and organized with ample powers to investigate human rights violations and take
remedial measures against all such violations by the military as well as by the civilian groups.
Separate Opinions

TEEHANKEE, C.J., concurring:

The Court's judgment at bar makes clear that all persons, be they public officers or employees, or
members of the military or police force or private individuals who directly or indirectly obstruct, defeat,
violate or in any manner impede or impair the constitutional rights and civil liberties of another person,
stand liable and may be sued in court for damages as provided in Art. 32 of the Civil Code.

The case at bar specifically upholds and reinstates the civil action for damages filed in the court below
by petitioners-plaintiffs for illegal searches conducted by military personnel and other violations of their
constitutional rights and liberties. At the same time it rejects the automatic application of the principle
of respondeat superior or command responsibility that would hold a superior officer jointly and severally
accountable for damages, including moral and exemplary, with his subordinates who committed such
transgressions. However, the judgment gives the caveat that a superior officer must not abdicate his
duty to properly supervise his subordinates for he runs the risk of being held responsible for gross
negligence and of being held under the cited provision of the Civil Code as indirectly and solidarily
accountable with the tortfeasor.

The rationale for this rule of law was best expressed by Brandeis in wise: "In a government of laws,
existence of the government be imperilled following it fails to observe the law scrupulously. Our
government is the potent omnipresent teacher. For good or ill, it teaches the whole people by example.
Crime is contagious. If the government becomes the law breaker, it breeds contempt for the law, it
invites every man to become a law unto himself, it invites anarchy. To declare that in the administration
of criminal law the end justifies the means ... would bring terrible retribution." 1

As the writer stress in Hildawa vs. Enrile 2 Which Was an action to enjoin the operations of the dreaded
secret marshals during the past regime, 'In a democratic state, you don't stoop to the level of criminals.
If we stoop to what they do, then we're no better than they ... there would be no difference. ... The
Supreme Court stands as the guarantor of the Constitutional and human rights of all persons within its
jurisdiction and cannot abdicate its basic role under the Constitution that these rights be respected and
enforced. The spirit and letter of the Constitution negates as contrary to the basic precepts of human
rights and freedom that a person's life be snuffed out without due process in a split second even if he
is caught in flagrante delicto — unless it was caned for as an act of self-defense by the law agents
using reasonable means to prevent or repel an unlawful aggression on the part of the deceased.

Needless to say, the criminal acts of the "Sparrow Units" or death squads of the NPA which have
infutrated the cities and suburbs and performed their despicable killings of innocent civilians and military
and police officers constitute an equally perverse violation of the sanctity of human life and must be
severely condemned by all who adhere tothe Rule of the Law.

It need only be pointed out that one of the first acts of the present government under President Corazon
C. Aquino after her assumption of office in February, 1986 was to file our government's ratification and
access to all human rights instruments adopted under the auspices of the United Nations, declaring
thereby the government's commitment to observe the precepts of the United Nations Charter and the
Universal Declaration of Human Rights. More than this, pursuant to our Constitution which the people
decisively ratified on February 2, 1987, the independent office of the Commission on Human Rights
hats been created and organized with ample powers to investigate human rights violations and take
remedial measures against all such violations by the military as well as by the civilian groups.
DELFIN LIM and JIKIL TAHA vs. FRANCISCO PONCE DE LEON AND ORLANDO MADDELA; G.R.
No. L-22554; August 29, 1975

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-22554 August 29, 1975

DELFIN LIM and JIKIL TAHA, plaintiffs-appellants,

vs.
FRANCISCO PONCE DE LEON AND ORLANDO MADDELA, defendants-appellees.

Ricardo L. Manalilig for plaintiffs-appellants.

Iñigo R. Peña for defendants-appellees.

MARTIN, J.:

Appeal on a question of law from the decision of the Court of First Instance of Palawan in Civil Case
No. 416, entitled "Delfin Lim and Jikil Taha vs. Francisco Ponce de Leon and Orlando Maddela",
dismissing the complaint of the plaintiffs and ordering them to pay each of the defendants jointly and
severally the sum of P500.00 by way of actual damages; P500.00 by way of attorney's fees; and
P1,000.00 by way of exemplary damages.

On April 29, 1961, plaintiff-appellant Jikil Taha sold to a certain Alberto Timbangcaya of Brooke's Point,
Palawan a motor launch named M/L "SAN RAFAEL". A year later or on April 9, 1962 Alberto
Timbangcaya filed a complaint with the Office of the Provincial Fiscal of Palawan alleging that after the
sale Jikil Taha forcibly took away the motor launch from him.

On May 14, 1962, after conducting a preliminary investigation, Fiscal Francisco Ponce de Leon in his
capacity as Acting Provincial Fiscal of Palawan, filed with the Court of First Instance of Palawan the
corresponding information for Robbery the Force and Intimidation upon Persons against Jikil Taha. The
case was docketed as Criminal Case No. 2719.

On June 15, 1962, Fiscal Francisco Ponce de Leon, upon being informed that the motor launch was in
Balabac, Palawan, wrote the Provincial Commander of Palawan requesting him to direct the
detachment commander-in Balabac to impound and take custody of the motor launch.1

On June 26, 1962, Fiscal Ponce de Leon reiterated his request to the Provincial Commander to
impound the motor launch, explaining that its subsequent sale to a third party, plaintiff-appellant Delfin
Lim, cannot prevent the court from taking custody of the same.2 So, on July 6, 1962 upon order of the
Provincial Commander, defendant-appellee Orlando Maddela, Detachment Commander of Balabac,
Palawan, seized the motor launch "SAN RAFAEL" from plaintiff-appellant Delfin Lim and impounded it.
On July 15, 1962 plaintiff-appellant Delfin Lim pleaded with Orlando Maddela to return the motor launch
but the latter refused. Likewise, on September 20, 1962, Jikil Taha through his counsel made
representations with Fiscal Ponce de Leon to return the seized property to plaintiff-appellant Delfin Lim
but Fiscal Ponce de Leon refused, on the ground that the same was the subject of a criminal offense.

All efforts to recover the motor launch going to naught, plaintiffs-appellants Delfin Lim and Jikil Taha,
on November 19, 1962, filed with the Court of First Instance of Palawan a complaint for damages
against defendants-appellees Fiscal Francisco Ponce de Leon and Orlando Maddela, alleging that on
July 6, 1962 Orlando Maddela entered the premises of Delfin Lim without a search warrant and then
and there took away the hull of the motor launch without his consent; that he effected the seizure upon
order of Fiscal Ponce de Leon who knew fully well that his office was not vested with authority to order
the seizure of a private property; that said motor launch was purchased by Delfin Lim from Jikil Taha in
consideration of Three Thousand Pesos (P3,000.00), Two Thousand Pesos (P2,000.00) of which has
been given to Jikil Taha as advance payment; that as a consequence of the unlawful seizure of the
motor launch, its sale did not materialize; and that since July 6, 1962, the said motor launch had been
moored at the Balabac Bay, Palawan and because of exposure to the elements it had become
worthless and beyond repair. For the alleged violation of their constitutional rights, plaintiffs-appellants
prayed that defendants-appellees be ordered to pay jointly and severally each of them the sum of
P5,750.00 representing actual, moral and exemplary damages and attorney's fees.

In their answer, defendants-appellees denied the material allegations of the complaint and as
affirmative defenses alleged that the motor launch in question which was sold by Jikil Taha to Alberto
Timbangcaya on April 29, 1961 was sometime in April 1962, forcibly taken with violence upon persons
and with intent to gain by Jikil Taha from Alfredo Timbangcaya without the latter's knowledge and
consent, thus giving rise to the filing of a criminal charge of robbery against Jikil Taha; that Fiscal Ponce
de Leon, in his capacity as Acting Provincial Fiscal of Palawan ordered Orlando Maddela to seize and
impound the motor launch "SAN RAFAEL", for being the corpus delicti of the robbery; and that Orlando
Maddela merely obeyed the orders of his superior officer to impound said launch. By way of
counterclaim, defendants-appellees alleged that because of the malicious and groundless filing of the
complaint by plaintiffs-appellants, they were constrained to engage the services of lawyers, each of
them paying P500.00 as attorney's fees; and that they suffered moral damages in the amount of
P5,000.00 each and actual damages in the amount of P500.00 each. They also prayed that each of
them awarded exemplary damages in the amount of P1,000.00.

On September 13, 1965, the trial court rendered its decision, upholding the validity of the seizure of the
motor launch on the ground that "the authority to impound evidences or exhibits or corpus delicti in a
case pending investigation is inherent in the Provincial Fiscal who controls the prosecution and who
introduces those exhibits in the court." Accordingly, the trial court dismissed the complaint of plaintiffs-
appellants and ordered them to pay jointly and severally each of the defendants-appellees the amount
of P500.00 by way of actual damages another amount of P500.00 for attorney's fees and P1,000.00 as
exemplary damages.

Hence, this appeal.

Two vital issues call for resolution by this Court. First, whether or not defendant-appellee Fiscal Ponce
de Leon had the power to order the seizure of the motor launch in question without a warrant of search
and seizure even if the same was admittedly the corpus delicti of the crime. Second, whether or not
defendants-appellees are civilly liable to plaintiffs-appellants for damages allegedly suffered by them
granting that the seizure of the motor launch was unlawful.
The gravamen of plaintiffs-appellants' argument is that the taking of the motor launch on July 6, 1962
by Orlando Maddela upon the order of Fiscal Ponce de Loon was in violation of the constitutional
guarantee against unreasonable searches and seizures since it was done without a warrant.

The pertinent provision of the Constitution then in force reads:

3) The right of the people to be secure in their persons, houses, papers and effects
against unreasonable searches and seizures shall not be violated, and no warrants shall
issue but upon probable cause, to be determined by the judge after examination under
oath or affirmation of the complainant and the witnesses he may produce, and particularly
describing the place to be searched, and the persons or things to be seized. 3

A cursory reading of the above provision easily brings into focus the unreasonableness of the seizure
of the aforementioned motor launch. A search and seizure to be reasonable, must be effected by means
of a valid search warrant. And for a search warrant to be valid: (1) it must be issued upon probable
cause; (2) the probable cause must be determined by the judge himself and not by the applicant or any
other person; (3) in the determination of probable cause, the judge must examine, under oath or
affirmation, the complainant and such witnesses as the latter may produce; and (4) the warrant issued
must particularly describe the place to be searched and persons or things to be seized.4 Thus in a long
line of decisions, this Court has declared invalid search warrants which were issued in utter disregard
of the constitutional injunction.5

Defendants-appellees admitted that when Orlando Maddela entered the premises of Delfin Lim and
impounded the motor launch he was not armed with a search warrant; that he effected the seizure of
the motor launch in the absence of and without the consent of Delfin Lim. There can be no question
that without the proper search warrant, no public official has the right to enter the premises of another
without his consent for the purpose of search and seizure. 6 And since in the present case defendants-
appellees seized the motor launch without a warrant, they have violated the constitutional right of
plaintiffs-appellants against unreasonable search and seizure.

Defendants-appellees however would want to justify the seizure of the motor launch even without a
warrant because of Fiscal Ponce de Leon's alleged inherent power to order the seizure of a personal
property which is the corpus delicti of a crime, he being a quasi judicial officer who has the control of
the prosecution and the presentation of the evidence in the criminal case. They argue that inasmuch
as the motor launch in question was allegedly stolen by Jikil Taha from Timbangcaya, Fiscal Ponce de
Leon could order its seizure even without a search warrant. We cannot agree. Under the old
Constitution7 the power to issue a search warrant is vested in a judge or magistrate and in no other
officer and no search and seizure can be made without a proper warrant. At the time the act complained
of was committed, there was no law or rule that recognized the authority of Provincial Fiscals to issue
a search warrant. In his vain attempt to justify the seizure of the motor launch in question without a
warrant Fiscal Ponce de Leon invoked the provisions of Republic Act No. 732, which amended Sections
1674 and 1687 of the Revised Administrative Code. But there is nothing in said law which confers upon
the provincial fiscal; the authority to issue warrants, much less to order without warrant the seizure of
a personal property even if it is the corpus delicti of a crime. True, Republic Act No. 732 has broadened
the power of provincial fiscals to conduct preliminary investigations, but said law did not divest the judge
or magistrate of its power to determine, before issuing the corresponding warrant, whether or not
probable cause exists therefor.8

Moreover, under Sections 2 and 3 of Rule 122 of the Rules of Court 9 which complement the
constitutional provision earlier cited, two principles are made clear, namely: (1) that in the seizure of a
stolen property search warrant is still necessary; and (2) that in issuing a search warrant the judge
alone determines whether or not there is a probable cause. The fact that a thing is a corpus delicti of a
crime does not justify its seizure without a warrant. As held in U.S. v. de los
Reyes and Esguerra, 10 citing McClurg v. Brenton: 11

The mere fact that a man is an officer, whether of high or low degree, gives him no more
right than is possessed by the ordinary private citizen to break in upon the privacy of a
home and subject its occupant to the indignity of a search for the evidence of crime,
without a legal warrant procured for that purpose. No amount of incriminating evidence
whatever its source, will supply the place of such warrant. At the closed door of the home
be it palace or hovel even bloodhounds must wait till the law, by authoritative process,
bids it open. (Emphasis supplied.)

Defendant-appellee Fiscal Ponce de Leon would also invoke lack of time to procure a search warrant
as an excuse for the seizure of the motor launch without one. He claimed that the motor launch had to
be seized immediately in order to preserve it and to prevent its removal out of the locality, since Balabac,
Palawan, where the motor launch was at the time, could only be reached after three to four days' travel
by boat. 12 The claim cannot be sustained. The records show that on June 15, 1962 13 Fiscal Ponce de
Leon made the first request to the Provincial Commander for the impounding of the motor launch; and
on June 26, 1962 14 another request was made. The seizure was not effected until July 6, 1962. In
short, Fiscal Ponce de Leon had all the time to procure a search warrant had he wanted to and which
he could have taken in less than a day, but he did not. Besides, there is no basis for the apprehension
that the motor launch might be moved out of Balabac because even prior to its seizure the motor launch
was already without its engine. 15 In sum, the fact that there was no time to secure a search warrant
would not legally justify a search without one. 16

As to whether or not they are entitled to damages, plaintiffs-appellants anchor their claim for damages
on Articles 32 and 2219 of the New Civil Code which provide in part as follows:

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.

xxx xxx xxx

(9) The rights to be secure in one's person, house, papers, and effects against
unreasonable searches and seizures.

xxx xxx xxx

The indemnity shall include moral damages. Exemplary damages may also be
adjudicated.

ART. 2219. Moral damages may be recovered in the following and analogous cases:

xxx xxx xxx

(6) Illegal search;

xxx xxx xxx

(1) Acts and action referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35.
Pursuant to the foregoing provisions, a person whose constitutional rights have been violated or
impaired is entitled to actual and moral damages from the public officer or employee responsible
therefor. In addition, exemplary damages may also be awarded. In the instant case, plaintiff-appellant
Delfin Lim claimed that he purchased the motor launch from Jikil Taha in consideration of P3,000.00,
having given P2,000.00 as advanced payment; that since or seizure on July 6, 1962 the motor launch
had been moored at Balabac Bay and because of exposure to the elements it has become worthless
at the time of the filing of the present action; that because of the illegality of the seizure of the motor
launch, he suffered moral damages in the sum of P1,000.00; and that because of the violation of their
constitutional rights they were constrained to engage the services of a lawyer whom they have paid
P1,500.00 for attorney's fees. We find these claims of Delfin Lim amply supported by the evidence and
therefore should be awarded the sum of P3,000.00 as actual damages; P1,000.00 as moral damages
and P750.00 for attorney's fees. However, with respect co plaintiff Jikil Taha, he is not entitled to recover
any damage which he alleged he had suffered from the unlawful seizure of the motor launch inasmuch
as he had already transferred the ownership and possession of the motor launch to Delfin Lim at the
time it was seized and therefore, he has no legal standing to question the validity of the seizure. Well
settled is the rule that the legality of a seizure can be contested only by the party whose rights have
been impaired thereby, and that the objection to an unlawful search and seizure is purely personal and
cannot be availed of by third parties. 17 Consequently, one who is not the owner, lessee, or lawful
occupant of the premise searched cannot raise the question of validity of the search and seizure. 18 Jikil
Taha is not without recourse though. He can still collect from his co-plaintiff, Delfin Lim the unpaid
balance of P1,000.00.

Defendant-appellee Fiscal Ponce de Leon wanted to wash his hands of the incident by claiming that
"he was in good faith, without malice and without the slightest intention of inflicting injury to plaintiff-
appellant, Jikil Taha" 19 when he ordered the seizure of the motor launch. We are not prepared to
sustain his defense of good faith. To be liable under Article 32 of the New Civil Code it is enough that
there was a violation of the constitutional rights of the plaintiffs and it is not required that defendants
should have acted with malice or bad faith. Dr. Jorge Bocobo, Chairman of the Code Commission, gave
the following reasons during the public hearings of the Joint Senate and House Committees, why good
faith on the part of the public officer or employee is immaterial. Thus:

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 he 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. 20

But defendant-appellee Orlando Maddela cannot be held accountable because he impounded the
motor launch upon the order of his superior officer. While a subordinate officer may be held liable for
executing unlawful orders of his superior officer, there are certain circumstances which would warrant
Maddela's exculpation from liability. The records show that after Fiscal Ponce de Leon made his first
request to the Provincial Commander on June 15, 1962 Maddela was reluctant to impound the motor
launch despite repeated orders from his superior officer. 21 It was only after he was furnished a copy of
the reply of Fiscal Ponce de Leon, dated June 26, 1962, to the letter of the Provincial Commander,
justifying the necessity of the seizure of the motor launch on the ground that the subsequent sale of the
launch to Delfin Lim could not prevent the court from taking custody of the same, 22 that he impounded
the motor launch on July 6, 1962. With said letter coming from the legal officer of the province, Maddela
was led to believe that there was a legal basis and authority to impound the launch. Then came the
order of his superior officer to explain for the delay in the seizure of the motor launch. 23 Faced with a
possible disciplinary action from his Commander, Maddela was left with no alternative but to seize the
vessel. In the light of the above circumstances. We are not disposed to hold Maddela answerable for
damages.

IN VIEW OF THE FOREGOING, the decision appealed from is hereby reversed and another one
entered declaring the seizure illegal and ordering defendant-appellee Fiscal Francisco Ponce de Leon
to pay to plaintiff-appellant Delfin Lim the sum of P3,000.00 as actual damages, plus P1,000.00 moral
damages, and, in addition, P750.00 for attorney's fees. With costs against defendant-appellee Fiscal
Ponce de Leon.

SO ORDERED.
BENITO ANG vs. JUDGE REINATO G. QUILALA A. M. No. MTJ-03-1476; February 4, 2003
BENITO ANG, complainant, vs. JUDGE REINATO G. QUILALA, CLERK OF COURT ZENAIDA
REYES-MACABEO and CLERK III LOUIE MACABEO, MeTC, Manila, respondents.

RESOLUTION
YNARES-SANTIAGO, J.:

In a verified complaint dated October 17, 1997, [1] Benito Ang charged Presiding Judge Reinato G.
Quilala, Clerk of Court Zenaida Reyes-Macabeo and Clerk III Louie Macabeo, all of the Metropolitan
Trial Court of Manila, Branch 26, with extortion relative to Criminal Cases Nos. 266370-266392-CR.
Complainant Benito Ang was charged with estafa[2] before the Regional Trial Court of Manila
involving the sum of P3,185,276.00 and 22 counts of violation of Batas Pambansa Blg. 22[3] before the
Metropolitan Trial Court of Manila, presided by respondent judge. He attended the scheduled
arraignment before the RTC on June 21, 1997 but failed to attend the arraignment before the MeTC on
June 30, 1997. On the same day, Judge Quilala issued a warrant of arrest and ordered the confiscation
and forfeiture of his surety bond.[4]
When complainant filed the Motion to Lift the Warrant of Arrest, a certain Louie Macabeo, Clerk III,
told him, “Kung gusto mo tutulungan kita. Ibigay mo sa akin ang telephone number mo.” He further
alleged that the clerk asked him for P30,000.00. However, he did not give his telephone number, only
his pager number.
A week later, the clerk paged him to return his call, which he did. During their telephone
conversation, the clerk told him, “Papaano na ang case mo. Ilalabas ko na ba ang warrant?” He
answered, “Teka, kakausapin ko muna ang lawyer ko.” Thereafter, he called up his lawyer, who
advised him not to give in to the extortion.
On August 14, 1997, complainant filed a motion for reconsideration and/or to lift order of
arrest.[5] Respondent judge denied the motion on August 21, 1997. [6] On September 9, 1997, his
counsel requested the Branch Clerk of Court not to release the bench warrant because they will file a
motion for reconsideration of the August 21, 1997 Order. The following morning, complainant was
shocked when he was served the bench warrant by the Western Police District Manila.
Consequently, at 1:20 in the afternoon of the same day, his counsel filed a Very Urgent Motion for
Reconsideration[7] of the August 21, 1997 Order and asked the Branch Clerk of Court to calendar the
hearing of the motion on the same day at 2:00 o’clock. His counsel waited patiently for the motion to
be acted upon. At 4:00 in the afternoon, respondent judge denied[8] the motion. Thus, complainant
had to spend the night in detention when he failed to put up the required bond. On the basis of the
foregoing allegations, complainant prayed that respondent judge together with his Clerk of Court and
Clerk III be administratively sanctioned for acting in concert to extort money from him.
Respondent judge filed his Comment on June 8, 1998 while respondents Clerk III Luis Macabeo
and Clerk of Court Zenaida Reyes-Macabeo submitted their Comment on June 10, 1998.
Respondent Judge Quilala explained that after posting the reduced bailbond as recommended by
the Manila Public Prosecutor’s Office, arraignment of accused Ang for violation of BP 22 was scheduled
on June 30, 1997. Neither Ang nor his counsel, however appeared during the arraignment, thus he
issued the order for his arrest on the same day.
On August 14, 1997, Ang through counsel filed a Motion for Reconsideration and/or to Lift Order of
Arrest, stating that he did not attend the arraignment because he was indisposed. The motion was
denied by respondent judge on the ground that the reason alleged by Ang for non-appearance was
flimsy. He also ordered that the total bailbond of P338,000.00 as recommended by the prosecution,
pursuant to the Latest Bailbond Guide of the Department of Justice be reinstated. [9] Ang, nevertheless
failed to post the required bond. As a result, the police served the warrant against him in the morning
of September 10, 1997. At 2:00 in the afternoon, Ang filed a Very Urgent Motion for Reconsideration
of the August 21, 1997 Order, without showing proper receipt thereof by the Office of the Prosecutor of
Manila. Despite said procedural defect, he gave due course to the motion. He, nonetheless, denied
said motion for lack of merit. Thereafter, he inhibited from hearing the BP 22 cases.
Both Clerk of Court Zenaida Reyes-Macabeo and her husband Clerk III Louie Macabeo vehemently
denied the charges filed against them. Zenaida claimed that the administrative case was filed because
of the respondent judge’s refusal to grant complainant’s motion. She released the bench warrant after
Judge Quilala signed the same because she had no control over the processes issued by the judge.
She did not calendar Ang’s Very Urgent Motion for Reconsideration filed at 1:20 in the afternoon of
September 10, 1997 because the hearings of the motions on criminal cases are scheduled only in the
morning.
Respondent Louie Macabeo claimed that it was impossible for him to demand money from Ang
whom he just met. Being an ordinary clerk, he could not assure the accused that the respondent judge
would act favorably on his motion. He denied having talked to him on the telephone on August 14,
1997 or the week after. He could not have promised to delay the release of the warrant of arrest since
it had been issued as early as August 10, 1997.
Upon referral of the case to the Office of the Court Administrator (OCA) for evaluation, the latter
recommended the dismissal of the administrative case against the respondents. The Office of the Court
Administrator found that there was nothing irregular in the conduct of the respondent judge in denying
the motions for reconsideration, the same being in accordance with the Rules. There was also no
concrete evidence that respondents indeed acted in concerted effort to commit extortion.
We agree with the findings of the Court Administrator.
The settled doctrine is that judges are not liable to respond in a civil action for damages, and are
not otherwise administratively responsible for what they may do in the exercise of their judicial functions
when acting within their legal powers and jurisdiction.[10] Certain it is that a judge may not be held
administratively accountable for every erroneous order or decision he renders. [11] To hold otherwise
would be to render judicial office untenable, for no one called upon to try the facts or interpret the law
in the process of administering justice can be infallible in his judgment. [12] More importantly, the error
must be gross or patent, deliberate and malicious, or incurred with evident bad faith. [13] Bad faith does
not simply connote bad judgment or negligence; it imputes a dishonest purpose or some moral obliquity
and conscious doing of a wrong; a breach of a sworn duty through some motive or intent or ill-will; it
partakes of the nature of fraud.[14] It contemplates a state of mind affirmatively operating with furtive
design or some motive of self-interest or ill-will for ulterior purposes.[15]
While this Court will never tolerate or condone any act, conduct or omission that would violate the
norm of public accountability or diminish the people's faith in the judiciary, neither will it hesitate to
shield those under its employ from unfounded suits that only serve to disrupt rather than promote the
orderly administration of justice.[16]
In the instant case, respondent judge denied the first motion for reconsideration for complainant’s
failure to attend the scheduled arraignment on the ground that he was indisposed to attend the
same. Respondent judge’s action was within his own judicial discretion. Any error therein that a
dissatisfied litigant may raise would be merely an error of judgment, for which the judge may not be
held administratively liable.
The second urgent motion for reconsideration dated September 10, 1997 was likewise correctly
denied. First, the motion does not contain proof of service on the Prosecutor’s Office, in disregard of
the 3-day notice rule. Second, the motion has no legal basis considering that the reinstatement of the
original bond in the amount of P338,000.00 is proper. The bond was recommended by the prosecution
and was earlier approved by the trial court, pursuant to the latest Bailbond Guide issued by the
Secretary of the Department of Justice.
The record does not show that respondent judge was moved by ill-will or bad faith in rendering the
adverse judgment, or that his ruling was manifestly unjust. Complainant has not, in fact, adduced any
proof to show that impropriety attended the issuance of the subject resolutions. Bad faith is not
presumed and he who alleges the same has the onus of proving it. [17]
The alleged error of the respondent judge was not gross, and the record is bereft of any showing
of deliberate or malicious intent on the part of respondent judge to cause prejudice to any party.
As regards the charge of extortion, no proof was presented by the complainant against the officers
of the court. Therefore, the dismissal of the administrative charge against them is proper.
WHEREFORE, in view of the foregoing, the administrative complaint against Judge Reinato G.
Quilala, Clerk of Court Zenaida Reyes-Macabeo and Clerk III Louie Macabeo, MeTC, Branch 26, Manila
is DISMISSED for lack of merit.
SO ORDERED.
 Article 33 – Independent civil actions
ALASTAIR JOHN KANE, PETITIONER, VS. PATRICIA ROGGENKAMP G.R. No. 214326; July 06,
2020

THIRD DIVISION

[ G.R. No. 214326, July 06, 2020 ]

ALASTAIR JOHN KANE, PETITIONER, VS. PATRICIA ROGGENKAMP, RESPONDENT,

DECISION

LEONEN, J.:

An acquittal from a charge of physical violence against women and their children is not a bar to the
filing of a civil action for damages for physical injuries under Article 33 of the Civil Code if an acquittal
was due to reasonable doubt, without any declaration that the facts upon which the offense arises are
nonexistent.

This resolves the Petition for Review on Certiorari1 filed by Alastair John Kane, assailing the
Decision2 and Resolution3 of the Court of Appeals.

The Court of Appeals reversed and set aside the Order4 of the Regional Trial Court, Branch 214,
Mandaluyong City, dismissing Patricia Roggenkamp's Complaint for Damages against Alastair John
Kane. The Complaint, which was based on Article 33 of the Civil Code, was dismissed on the grounds
of res judicata and lack of jurisdiction.

Alastair John Kane (Alastair John) and Patricia Roggenkamp (Patricia) are Australian citizens.5 They
met in January 2004 in Brisbane, Australia, and became lovers immediately.6

Patricia decided to put up a business in the Philippines, and eventually travelled with Alastair John to
Manila. They settled in a condominium unit located in Paranaque City supposedly owned by Patricia.7

On March 30, 2006, an Information for violation of Republic Act No. 9262 or the Anti-Violence Against
Women and Children Act of 2004 was filed against Alastair John, with Patricia as the private
complainant. The case, docketed as Criminal Case No. 06-0413, was then raffled to Branch 260 of the
Regional Trial Court of Paranaque City.8

According to Patricia, she and Alastair John attended a party hosted by her son, Ashley Richard Cayzer
(Ashley Richard) on November 30, 2004. The next day, December 1, 2004, after they had just arrived
at their residence at about 1:00 a.m., Patricia confronted Alastair John for allegedly looking at the
underwear of other female guests at the party. Ignoring Patricia, Alastair John went on to lie down on
the bed. Patricia then sat on a nearby chair.9

Alastair John, angered by Patricia's remarks, allegedly approached Patricia, lifted her off the chair, and
dropped her on the floor. Patricia further claimed that Alastair John punched her in the head, dragged
her by the hair to the bed, and pushed her head against the pillow. Patricia fought back and, when she
had the chance, ran to the bathroom and locked herself inside.10

The next day, on December 2, 2004, Patricia's son, Ashley Richard, visited his mother and saw her
lying in bed in pain. Alastair John told Ashley Richard that his mother had too much liquor the night of
the party and, when they arrived home, Alastair John tried to carry her to the bed. Unfortunately, he
accidently dropped her on the floor because the bed, which allegedly had wheels, moved.11

Ashley Richard then brought Patricia to the San Juan de Dios Hospital where she was prescribed
painkillers for 12 days. After the trip to the hospital, Patricia went home to Alastair John. Their situation
went back to being peaceful, and they even went on vacation from December 26, 2004 to January
l,2005.12

On January 6, 2005, or merely five (5) days after, Alastair John allegedly verbally abused Patricia. He
then left the next day, taking Patricia's car with him, as well as the keys to their Paranaque residence
and another condominium unit in Pasig City where he stayed. Patricia, accompanied by her driver, went
to the Pasig condominium unit and recovered possession of her car.13

On February 4, 2005, Patricia finally reported the incidents to the police. She explained that, prior to
the December 1, 2004 incident, there were already prior incidents of abuse committed against her by
Alastair John. After preliminary investigation, probable cause for violation of Republic Act 9262 or the
Anti-Violence Against Women and their Children Act of 2004 was found against Alastair John.14

After trial, the Regional Trial Court, Branch 260, Paranaque City acquitted Alastair John on the ground
of reasonable doubt.15 The Paranaque trial court was of the opinion that Alastair John's account of the
events—that he accidentally dropped Patricia on the floor while he was carrying her— was "in accord
with human experience[,]”16 while that of Patricia's was not. It further said that "if [Patricia] was really
a victim of violence or abuse, she should have told the same to her son [Ashley Richard], especially
because the latter, according to her, is a lawyer."17 The Paranaque trial court more particularly said:

The Court noted that there was a heated altercation between the private complainant and the accused
after they came from the birthday party of the former's son on December 1, 2004. Kane was accused
of looking and peeping at the girls during the party. The Court is inclined to give credence to the version
of the accused. The same is in accord with human experience. On the other hand[,] the version of
Patricia is not in accord with human experience. She claimed that she was grabbed by the hair, hit her
head and chest, neck, pelvic area and shoulder but the clinical abstract does not indicate any signs of
physical violence. This court finds it unnatural why Patricia declared to the doctor that she accidentally
fell on a marble floor. This is her same declaration to her son, Ashley. If she was really a victim of
violence or abuse, she should have told the same to her son, especially because the latter, according
to her, is a lawyer. This court is also surprised why she did not leave the accused if it is true that he
manhandled her. She could easily do those things because her relationship with the accused was that
only of lovers and there was no marriage to protect and family to save. To reiterate, the version of Mr.
Kane is shown by the parties' actuations after the date alleged in the information. They even celebrated
Christmas in a beach resort with friends and with the accused playing Santa [Claus]. Noteworthy is the
filing of the case almost one year after the alleged incident and after the parties started to have issues
on property.18

WHEREFORE, due to reasonable doubt, the accused, ALASTAIR JOHN KANE, is

hereby ACQUITTED of the crime [of] violation of Sec. 5(a) of R.A. 9262, penalized by Sec. 6 (a) of the
said Act.

SO ORDERED.19 (Emphasis in the original)

Thereafter, Patricia filed a Complaint for Damages based on Article 33 of the Civil Code before the
Regional Trial Court of Mandaluyong City, praying for actual, moral and exemplary damages, and
attorney's fees. Patricia argued that the right of action provided in Article 33 in cases of physical injuries
is entirely separate and distinct from the criminal action earlier commenced against Alastair John.20
Further, she added that the civil actions for damages under Articles 32, 33, 34, and 2176 of the Civil
Code, called independent civil actions, "are not deemed instituted with the criminal action and may be
filed separately by the offended party even without reservation." Considering that Alastair John was
acquitted on the ground of reasonable doubt, not because he wasn't the author of the act complained
of, Patricia argued that he may still be held liable under Article 33 of the Civil Code.21

Opposing the civil action, Alastair John filed a Motion to Dismiss on the grounds of res judicata and
improper venue.22 Alastair John claimed that the dismissal of the criminal case barred the filing of
the civil case, because the cases allegedly involved identical causes of action. He emphasized that the
cases were both based on his alleged physical abuse of Patricia, a matter already found to be not "in
accord with human experience."23 With respect to the venue, Alastair John argued that it was
improperly laid. The action for damages was a personal action, yet none of the parties resided in
Mandaluyong City where the civil action was filed.24

In an April 20, 2009 Order, the Motion to Dismiss was denied by the 214th Branch of the Regional Trial
Court, Mandaluyong City, then presided by Judge Edwin D. Sorongon.25

The trial court held that civil liability was not extinguished, because Alastair John's acquittal was based
on reasonable doubt. Furthermore, the action filed by Patricia was an independent civil action which,
together with the actions provided in Articles 32, 34, and 2176 of the Civil Code, is separate and distinct
from the criminal action and may be enforced against an offender, separately or simultaneously, with
his civil liability ex delicto under Article 100 of the Revised Penal Code. Finally, the trial court held that
venue was properly laid because at the time of the filing of the civil complaint, Patricia was already
residing in Mandaluyong City.26 In the words of the trial court:

"The motion is unimpressive.

"While it is true that accused's (herein defendant) guilt in the criminal case had not been proven beyond
reasonable doubt by the trial court in Paraiiaque City, the decision however did not state in clear and
[unjequivocal terms that he did not commit the offense charged. Hence, impliedly the trial court of
Paraiiaque acquitted him on reasonable doubt. Since civil liability is not extinguished in criminal cases
if the acquittal is based on reasonable doubt[,] then the instant civil complaint must proceed. Civil liability
arising from criminal and civil liability arising from Article 32, 33, 34 and 2176 quasi-delict for contract
(Art. 31) are entirely separate and distinct from the criminal action that may be brought by injured party
(International Flavors and Fragrances, Inc. vs. Argon, 364 SCRA. 792)[.]

"Even if the guilt of the accused has not been [satisfactorily] established, he is not exempted from civil
liability which may be proved by preponderance of evidence only. This is the situation contemplated in
Article 33 of the Civil Code where the civil action for damages is "for the same act or omission." Although
the two actions have different purposes, the matters discussed in the civil case are similar to those
discussed in the criminal case. However, the judgment in the criminal proceeding cannot be read in
evidence in the civil action to establish any fact there determined, even though both actions involve the
same act or omission.

The civil liability is not extinguished where acquittal is based on reasonable doubt (Manantan
vs. Court of Appeals, 350 SCRA 387).

"An act or omission causing damage to another may give rise to two separate liabilities on the part of
the offender, i.e., (1) civil liability ex deli[c]to, 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 felony,
e.g. culpa contractual or obligations arising from law under Article 32 of the Civil Code, intentional torts
under Article 32 and 34, and culpa aqiiilkma under Article 2176 of the Civil Code, or (b) where the
injured party is granted a right to file an independent and distinct criminal action (Article 33, Civil Code).
Either of these two possible liabilities may be enforced against the offender (separately and
simultaneously) subject, however, to the caveat under Article 2177 of the Civil Code that the offended
party cannot recover damages twice for the same act or omission or under both causes (Cando, Jr. v.
Isip, G.R. No. 133978, November 12, 2002). However, a separate civil action based on subsidiary
liability cannot be instituted during the pendency of the criminal case (Remedial Law, Herrera).

"Likewise, the ground of improper venue cannot be sustained. It was clarified by plaintiff that when she
testified on May 22, 2007 and May 13, 2008 she considered herself a resident of Paraiiaque, however,
in November 2008 and subsequently thereafter[,] she stayed at the condominium unit of her friend in. .
. Mandaluyong City. In other words, at the time of the filing of the complaint on November 29, 2008 she
was already residing in Mandaluyong City[.| Clearly, plaintiff for purposes of this instant case is a
resident of Mandaluyong City”27 (Emphasis in the original)

With his Motion for Reconsideration having been denied by the trial court, Alastair John filed his Answer
with Compulsory Counterclaim and Patricia, her Reply. Issues were joined and the case was set for
pre-trial.28

In the meantime, Judge Sorongon was appointed Associate Justice of the Court of Appeals. Judge
Ofelia Calo then acted as Presiding Judge of the Mandaluyong trial court29 and, in the June 8,
2010 Order, dismissed the case motu proprio on the ground oi res jiidicata and lack of jurisdiction.30

The Mandaluyong trial court said that, after "[taking] a closer look at the records extant to the instant
case[,]"31 any subsequent proceeding in the civil case would be "a waste of time"32 since the decision
of the Paranaque trial court had the effect of res judicata. Specifically, the Mandaluyong trial court
declared that the Parafiaque trial court's evaluation of the parties' respective evidence meant that
"the act from which the civil liability might arise did not exist."33

Consequently, the action based on Article 33 allegedly had no basis, and Patricia effectively committed
forum shopping. Finally, it ruled that the Paranaque trial court's decision in the criminal case already
attained finality, thus depriving the Mandaluyong trial court of jurisdiction over Patricia's Complaint for
Damages.

A closer look at the records of the instant case filed by plaintiff would show that this court has no
jurisdiction over the instant case.

The instant case which is for damages was also the subject matter of Criminal Case No. 06-413 litigated
in another court, the Regional Trial Court of Paranaque City, Branch 260 wherein a Decision rendered
by the said court acquitting the accused, the herein defendant.

Although the motion to dismiss filed by defendants on the grounds that the instant complaint is barred
by prior judgment and improper venue was already denied for lack of merit in an Order dated 20 April
2009, the undersigned acting presiding judge deemed it proper to take a closer look at the records
extant to the instant case considering that proceeding to the initial trial will just be a waste of time and
any proceedings taken by the court will only be a nullity if the court has no jurisdiction because of the
principle of res judicata.

Verily, the evaluation made by the RTC, Branch 260, Paranaque City of the criminal case giving
credence to the version of the accused, which the Court perceived to be in accord with human
experience, and pointing to factual circumstances and explaining why the version of Patricia is not in
accord with human experience, is a clear showing that the act from which the civil liability might arise
did not exist.
With the decision rendered by the RTC Branch 260, Paranaque City involving the same cause of action
and relief sought, and identity [of] parties, this court perceives that the filing of the instant case in this
jurisdiction constituted forum shopping. . . .

Considering that the RTC, Branch 260, Paranaque City has already taken cognizance of the case
involving the same cause of action and identity of parties, and has in fact rendered a decision which
has attained finality, this court therefore has no jurisdiction to try the same action.34

Patricia filed a Motion for Reconsideration, which was subsequently denied in a November 19, 2010
Order.35

Alleging error on the part of the Mandaluyong trial court, Patricia appealed before the Court of Appeals.
In the March 25, 2014 Decision,36 the Court of Appeals granted the appeal and reversed the June 8,
2010 and August 23, 2010 Orders of the Mandaluyong trial court.

The Court of Appeals first discussed how an act or omission may give rise to two (2) separate civil
liabilities on the part of an offender. The civil liability ex delicto or that arising from the crime is provided
in Article 100 of the Civil Code. On the other hand, independent civil liabilities are provided in Articles
32, 33, 34, and 2176 of the Civil Code, which are liabilities separate and distinct from the criminal action
and may be pursued independently of it. Reservation to file the civil action is even unnecessary. Thus,
an offended party may pursue any of these civil liabilities, whether ex delicto or not, subject to Article
2177 of the Civil Code prohibiting double recovery.37

The Court of Appeals then emphasized that the civil case filed by Patricia was based on Article 33 of
the Civil Code, an independent civil action. Thus, contrary to the Mandaluyong trial court's ruling, the
decision of the Paranaque trial court acquitting Alastair John did not operate as res judicata so as to
bar the filing of the Complaint for Damages under Article 33. It was immaterial that the decision of the
Paranaque trial court had already become final and executory, because the causes of action between
the case for violation of Republic Act No. 9262 and the one filed under Article 33 of the Civil Code are
different.38

The Court of Appeals held that Patricia did not commit forum shopping because the causes of action
for the criminal action and the Complaint for Damages are different. There can also be no forum
shopping, according the Court of Appeals, when the law expressly allows the filing of an independent
civil action in cases of physical injuries.39

Finally, the Court of Appeals held that the venue was properly laid. Under the Rules of Court, personal
actions, such as an action for damages, must be filed in the plaintiff or defendant's residence, at the
election of the plaintiff, unless the parties agree on another venue. Considering that Patricia was already
residing in Mandaluyong City at the time of the filing of the case, she correctly filed the Complaint for
Damages before the Regional Trial Court of Mandaluyong.40

The dispositive portion of the Court of Appeals' March 25, 2014 Decision read:

WHEREFORE, the appeal is GRANTED. The Orders dated June 8, 2010 and November 19, 2010 of
the Regional Trial Court of Mandaluyong City, Branch 214 in Civil Case No. MC08-3871
are REVERSED AND SET ASIDE. The Regional Trial Court of Mandaluyong City, Branch 214 is
DIRECTED to reinstate Civil Case No. MC08-3871, to continue with the proceedings and to resolve the
same with deliberate dispatch.

SO ORDERED.41 (Emphasis in the original)

Alastair John then filed a Motion for Reconsideration, which was denied by the Court of Appeals in the
September 3, 2014 Resolution.42

On October 9, 2014, Alastair John filed his Petition for Review on Certiorari.43 Upon the directive of
this Court, Patricia filed her Comment,44 to which Alastair John replied.45

Petitioner mainly argues that he may no longer be made liable for damages under Article 33 of the Civil
Code. According to petitioner, the Paranaque trial court's decision on the criminal case for violation of
Republic Act No. 9262 clearly established that "the act or omission from which the civil liability may
arise did not exist."46 Therefore, there is no basis to hold him liable for damages for the alleged physical
injuries sustained by respondent.47

Further, petitioner maintains that respondent's Complaint for Damages was already barred by res
judicata. He claims that the Complaint for Damages was based on the alleged intentional physical
injuries sustained by respondent. In the criminal case, however, the Paranaque trial court already ruled
that the physical injuries resulted from an accident. With the decision of the Paranaque trial court having
attained finality, it is allegedly binding upon the parties, and the Complaint for Damages was
correctly dismissed by the Mandaluyong trial court.48

It follows that in filing the Complaint for Damages, respondent committed forum shopping. Specifically,
respondent allegedly sought damages after she failed to secure a favorable ruling with the Paranaque
trial court.49

Finally, petitioner contends that the venue for the civil action was improperly laid. Although the term
"residence" merely refers to a physical habituation or actual residence, the physical presence and
actual stay in that place must be more than temporary and must be with continuity and consistency.
According to petitioner, respondent failed to establish such continuity, as she testified under oath in two
(2) proceedings that she was a resident of Paranaque City:50 (1) one in 2007; and (2) another in 2008,
both after the filing of the Complaint for Damages. These declarations should bind respondent, since
her declarations were given under pain of prosecution for perjury.51

Respondent counters that the Court of Appeals committed no error in ruling that petitioner may still be
held liable for damages, regardless of his acquittal in the criminal case. According to respondent,
nowhere in the text of the Paranaque trial court decision could it be inferred that the fact from which
petitioner's civil liability might arise did not exist.

On the contrary, the Paranaque trial court explicitly stated that it acquitted petitioner "due to reasonable
doubt[.]"52 Consequently, the Mandaluyong trial court should have proceeded to trial, and petitioner's
liability for physical injuries, if any, should have been ascertained.53

Respondent further submits that res jiidicata does not apply in the present case. She maintains that the
civil actions under Articles 32, 33, 34 and 2176 of the Civil Code are independent civil actions which
may be separately filed by the offended party, even without reservation in the prosecution of the criminal
action. Therefore, respondent is legally "allowed to file two (2) separate suits for the same act or
omission. The first a criminal suit where the civil action to recover civil liability ex-delicto is deemed
instituted, and the other a civil case for quasi-delict[,]"54 and the independent civil action may proceed
regardless of the result of the proceedings in the criminal case.'55

On the issue of forum shopping, respondent contends that the Court of Appeals correctly ruled on the
issue. According to respondent, the civil liability under Article 33 of the Civil Code is separate and
distinct from the civil liability arising under Article 100 of the Revised Penal Code. Thus, an offended
party may pursue both kinds of civil liability, even simultaneously, without offending the rule against
forum shopping.56

Lastly, respondent maintains that, as correctly found by the Court of Appeals, the venue was properly
laid. She argues that "whether [she] lived in other places prior to [the filing of the complaint] is
irrelevant[,]"57 and in this case, she clearly established that she was a resident of Mandaluyong City
when she filed her Complaint for Damages under Article 3358

The issues for this Court's resolution are:

First, whether or not petitioner Alastair John Kane may still be held civilly liable because his acquittal
was based on reasonable doubt;

Second, whether or not the Complaint for Damages was already barred by res judicata;

Third, whether or not respondent Patricia Roggenkamp committed forum shopping; and,

Fourth, whether or not the venue was properly laid.

This Petition must be denied. The Mandaluyong trial court seriously erred in motu proprio dismissing
respondent's Complaint for Damages on the grounds of res judicata and lack of jurisdiction.

Respondent based her Complaint for Damages against petitioner on 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.

Article 33 is explicit that in cases of defamation, fraud, and physical injuries., the civil action is "entirely
separate and distinct from the criminal action" and shall "proceed independently of the criminal
prosecution." Accordingly, Article 33 "contemplates a civil action for the recovery of damages that is
entirely unrelated to the purely criminal aspect of the case."59 Even the quantum of proof required—
preponderance of evidence, as opposed to the proof beyond reasonable doubt in criminal cases—is
different, confirming that the civil action under Article 33 is independent of the criminal action.

Reservation of the right to separately file a civil action for damages under Article 33 need not even be
made. The civil action under Article 33 may be pursued before the filing of the criminal case,60 during
the pendency of the criminal case,61 or even after the criminal case is resolved.62 The only limitation
is that an offended party cannot "recover [damages] twice for the same act or omission" of the
defendant. Rule 111, Section 3 of the 2000 Revised Rules of Criminal Procedure provides:

RULE 111
Prosecution of Civil Action

SECTION 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.

Further, "defamation," "fraud," and "physical injuries," as used in Article 33, are to be understood in
their ordinary sense. Specifically, the "physical injuries" contemplated in Article 33 is bodily injury, not
the "physical injuries" referred to in the Revised Penal Code. As first explained in Carandang v.
Santiago:63

[Article 33 uses the words "defamation", ''fraud" and "physical injuries." Defamation and fraud are used
in their ordinary sense because there are no specific provisions in the Revised Penal Code using these
terms as means of offenses defined therein, so that these two terms defamation and fraud must have
been used not to impart to them any technical meaning in the laws of the Philippines, but in their generic
sense. With this apparent circumstance in mind, it is evident that the term "physical injuries" could not
have been used in its specific sense as a crime defined in the Revised Penal Code, for it is difficult to
believe that the Code Commission would have used terms in the same article — some in their general
and another in its technical sense. In other words, the term "physical injuries" should be understood to
mean bodily injury, not the crime of physical injuries, because the terms used with the latter are general
terms. In any case the Code Commission recommended that the civil action for physical injuries be
similar to the civil action for assault and battery in American Law, and this recommendation must have
been accepted by the Legislature when it approved the article intact as recommended. If the intent has
been to establish a civil action for the bodily harm received by the complainant similar to the civil action
for assault and battery, as the Code Commission states, the civil action should lie whether the offense
committed is that of physical injuries, or frustrated homicide, or attempted homicide, or even death.64

Madeja v. Caro65 reiterates that "physical injuries" in Article 33 means bodily injury.

Alastair John was charged with violating Section 5(a) of Republic Act No. 9262, or the Anti-Violence
Against Women and Children Act of 2004:

SECTION 5. Acts of Violence Against Women and Their Children. — The crime of violence against
women and their children is committed through any of the following acts:

(a) Causing physical harm to the woman or her child;

(b) Threatening to cause the woman or her child physical harm;

(c) Attempting to cause the woman or her child physical harm[.]

Section 5 enumerates the various "acts of violence against women and their children," generally defined
as:

SECTION 3. Definition of Terms. — any act or a series of acts committed by any person against a
woman who is his wife, former wife, or against a woman with whom the person has or had a sexual or
dating relationship, or with whom he has a common child, or against her child whether legitimate or
illegitimate, within or without the family abode, which result in or is likely to result in physical, sexual,
psychological harm or suffering, or economic abuse including threats of such acts, battery, assault,
coercion, harassment or arbitrary deprivation of liberty.66

Paragraphs (a), (b), and (c) of Section 5 specifically refer to acts of "physical violence," which, under
the law, includes "acts that include bodily or physical harm[.]"
It is not hard to see that respondent properly availed herself of a separate action for damages under
Article 33 after the dismissal of the criminal case against petitioner. The criminal action filed against
petitioner was one for physical injuries in the sense contemplated in Article 33, that is, bodily injury.

Nevertheless, Alastair John claims that his acquittal should have barred the filing of the Complaint for
Damages. He maintains that, as allegedly held by the Paranaque trial court, the act or commission from
which the civil liability might arise did not exist; hence, there is no civil liability ex delicto to which the
Article 33 action may be anchored.

The contention is without merit.

Under Rule 120, Section 2 of the 2000 Revised Rules of Criminal Procedure, a judgment acquitting the
accused must state whether the prosecution absolutely failed to prove the guilt of the accused or merely
failed to prove his guilt beyond reasonable doubt. Furthermore, the judgment must determine if the act
or omission from which the civil liability might arise did not exist:

RULE 120
Judgment

....

SECTION 2. Contents of the Judgment. — If the judgment is of conviction, it shall state (1) the legal
qualification of the offense constituted by the acts committed by the accused and the aggravating or
mitigating circumstances which attended its commission; (2) the participation of the accused in the
offense, whether as principal, accomplice, or accessory after the fact; (3) the penalty imposed upon the
accused; and (4) the civil liability or damages caused by his wrongful act or omission to be recovered
from the accused by the offended party, if there is any, unless the enforcement of the civil liability by a
separate civil action has been reserved or waived.

In case the judgment is of acquittal, it shall state whether the evidence of the prosecution absolutely
failed to prove the guilt of the accused or merely failed to prove his guilt beyond reasonable
doubt. In either case, the judgment shall determine if the act or omission from which the civil liability
might arise did not exist. (Emphasis supplied)

It is essential to indicate whether the act or omission from which the civil liability might arise did not
exist. Without such declaration, it must be presumed that the acquittal was due to reasonable doubt,
and the accused is civilly liable ex delicto. Thus, the general rule shall apply: every person criminally
liable is also civilly liable.67

In Manantan v. Court of Appeals,68 accused George Manantan was charged with reckless imprudence
resulting in homicide. The trial court acquitted him of the crime charged, leading the heirs of the
deceased to appeal the civil aspect of the trial court decision. Despite Manantan's acquittal, the Court
of Appeals granted the appeal, declared Manantan to be the "proximate cause of the vehicular
accident,"69 and held him civilly liable.

Among Manantan's arguments before this Court was that the Court of Appeals erred in finding him
civilly liable, because the trial court already found that he was neither imprudent nor negligent. To this,
this Court said that nowhere in the text of the trial court decision can it be inferred that no negligence
or imprudence existed. All the judgment provided was that Manantan was "NOT GUILTY of the crime
charged[.]"70
Thus, the Court of Appeals "was not precluded from looking into the question of [Manantan's]
negligence or reckless imprudence[,]"71 for "even if [his guilt] has not been satisfactorily established,
he is not exempt from civil liability which may be proved by preponderance of evidence only."72 In other
words, Manantan's acquittal was not because the act or omission from which the civil liability might
arise did not exist. Therefore, Manantan was correctly held civilly liable by the Court of Appeals.
Explained this Court:

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." Although the two actions have different purposes, the matters
discussed in the civil case are similar to those discussed in the criminal case. However, the judgment
in the criminal proceeding cannot be read in evidence in the civil action to establish any fact there
determined, even though both actions involve the same act or omission. The reason for this rule is that
the parties are not the same and secondarily, different rules of evidence are applicable. Hence,
notwithstanding herein petitioner's acquittal, the Court of Appeals in determining whether Article 29
applied, was not precluded from looking into the question of petitioner's negligence or reckless
imprudence.73 (Citations omitted)

Like in Mcmantan, nowhere in the decision of the Parafiaque trial court in the criminal case does it state
that the act or omission from which civil liability might arise did not exist. On the contrary, the trial court
was unequivocal that petitioner was acquitted due to reasonable doubt:

WHEREFORE, due to reasonable doubt, the accused, ALASTAIR JOHN KANE, is

hereby ACQUITTED of the crime [of] violation of Sec[.] 5(a) of R.A. 9262, penalized by Sec[.] 6 (a) of
the said Act.

SO ORDERED.74 (Emphasis supplied)

Having been acquitted due to reasonable doubt, petitioner is not exempt from civil liability. This is true
even if his guilt was not satisfactorily established.

II

Furthermore, contrary to petitioner's argument, the decision of the Parafiaque trial court acquitting him
did not operate as res judicata so as to bar the filing of the Complaint for Damages under Article 33 of
the Civil Code.

The concept of res judicata was expounded in Club Filipino, Inc. v. Bautista:75

Res judicata "literally means 'a matter adjudged; a thing judicially acted upon or decided; [or] a thing or
matter settled by judgment.'" Res jiidicata "lays the rule that an existing final judgment or decree
rendered on the merits, and without fraud or collusion, by a court of competent jurisdiction, upon any
matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all other actions
or suits in the same or any other judicial tribunal of concurrent jurisdiction on the points and matters in
issue in the first suit."

Res judicata has two (2) aspects. The first is bar by prior judgment that precludes the prosecution of a
second action upon the same claim, demand or cause of action. The second aspect is conclusiveness
of judgment, which states that "issues actually and directly resolved in a former suit cannot again be
raised in any future case between the same parties involving a different cause of action."

The elements of res judicata are:

(1) the judgment sought to bar the new action must be final;

(2) the decision must have been rendered by a court having jurisdiction over the subject matter
and the parties;

(3) the disposition of the case must be a judgment on the merits; and

(4) there must be as between the first and second action identity of parties, subject
matter, and causes of action[.]76 (Citations omitted; emphasis in the original)

It is settled that a decision acquitting the accused is not res judicata on the independent civil action,
even if the latter action arises from the same act or omission on which the criminal action was based.

In Cancio v. hip,77 cases for estafa were filed against Emerenciana Isip for issuing checks with
insufficient funds. After it had failed to present its second witness, the prosecution moved to dismiss
the estafa cases, but reserved the right to file a separate civil action. The motion was granted, and the
private complainant, Jose Cancio, Jr., subsequently filed a case for collection of sum of money to
recover the amount of the checks subject of the estafa cases.

Isip filed a motion to dismiss, arguing that that the collection case was barred on the ground of res
judicata. The trial court agreed and dismissed the collection case. It held that "the dismissal of the
criminal cases. . . on the ground of lack of interest or failure to prosecute is an adjudication on the merits
which amounted to res judicata on the civil case for collection."78

On appeal, this Court set aside the trial court's decision. It explained that an act or omission causing
damage to another may give rise to two (2) separate civil liabilities: (1) civil liability ex delicto, or that
arising from the crime, and (2) independent civil liabilities, i.e., those not arising from the crime, or those
where the law expressly grants the injured party the right to file an independent and distinct civil action
from the criminal action. An action for collection of sum of money is not an action arising from the crime
but from contract, an independent civil action which, according to this Court, may be pursued even
without reservation.79

This Court rejected the contention that the collection case was barred by res judicata. Among the
elements of res judicata is that there is an identity of causes of action between the actions, and between
a criminal case based on culpa criminal and an action based on culpa contractual, there is no such
identity of causes of action. The independent civil action:

. . . remains separate and distinct from any criminal prosecution based on the same act. Not being
deemed instituted in the criminal action based on culpa criminal, a ruling on the culpability of the
offender will have no bearing on said independent civil action based on an entirely different cause of
action, i.e., culpa contractual80 (Citation omitted; emphasis in the original)
The defense of res judicata was likewise raised but nonetheless rejected in Lim v. Kou Co Ping.81 The
case involved withdrawal authorities issued by a cement corporation, thereby allowing holders of the
instrument to withdraw cement bags from the corporation's cement plant. Kou Co Ping had earlier
bought withdrawal authorities, which he subsequently sold to Lily Lim. When Lim failed to withdraw
cement bags covered by the withdrawal authorities, she sued Kou Co Ping for estafa before the
Regional Trial Court of Pasig.

The trial court acquitted Kou Co Ping of estafa for insufficiency of evidence. However, it set the case
for reception of evidence on Kou Co Ping's civil liability. After trial on the criminal case, the trial court
also absolved Kou Co Ping of civil liability to Lim.

This caused Lim to subsequently file a complaint for specific performance and damages before the
Regional Trial Court of Manila. Moving to dismiss the complaint, Kou Co Ping argued that his acquittal
in the estafa case was res judicata on the specific performance and damages case.

The Manila trial court denied the motion to dismiss, which was affirmed by this Court. Citing Cancio,
this Court discussed how an act or omission may give rise to civil liability arising from different sources.
The source of the civil liability arising from the offense is different from that arising from contract, and
an offended party may pursue either or both, subject to the prohibition on double recovery under Article
2177 of the Civil Code. Considering that the complaint for specific performance and damages is
premised on a civil liability, and not arising from crime but from contract, this Court held that the decision
on the civil aspect of the estafa case had no bearing on the case for specific performance and damages.
In Lim:

A single act or omission that causes damage to an offended party may give rise to two separate civil
liabilities on the part of the offender — (1) civil liability ex delicto, that is, civil liability arising from the
criminal offense under Article 100 of the Revised Penal Code, and (2) independent civil liability, that is,
civil liability that may be pursued independently of the criminal proceedings. The independent civil
liability may be based on "an obligation not arising from the act or omission complained of as a felony,"
as provided in Article 31 of the Civil Code (such as for breach of contract or for tort). It may also be
based on an act or omission that may constitute felony but, nevertheless, treated independently from
the criminal action by specific provision of Article 33 of the Civil Code ("in cases of defamation, fraud
and physical injuries").

The civil liability arising from the offense or ex delicto is based on the acts or omissions that constitute
the criminal offense; hence, its trial is inherently intertwined with the criminal action. For this reason,
the civil liability ex delicto is impliedly instituted with the criminal offense. If the action for the civil liability
ex delicto is instituted prior to or subsequent to the filing of the criminal action, its proceedings are
suspended until the final outcome of the criminal action. The civil liability based on delict is extinguished
when the court hearing the criminal action declares that "the act or omission from which the civil liability
may arise did not exist."

On the other hand, the independent civil liabilities are separate from the criminal action and may be
pursued independently, as provided in Articles 31 and 33 of the Civil Code, which state that:

ART. 31. When the civil action is based on an obligation not arising from the act or omission complained
of as a felony, such civil action may proceed independently of the criminal proceedings and regardless
of the result of the latter.

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.

Because of the distinct and independent nature of the two kinds of civil liabilities, jurisprudence holds
that the offended party may pursue the two types of civil liabilities simultaneously or cumulatively,
without offending the rules on forum shopping, litis pendentia, or res judicala. As explained in Cancio,
Jr. v. Isip:

One of the elements of res judicata is identity of causes of action.1âшphi1 In the instant case, it must
be stressed that the action filed by petitioner is an independent civil action, which remains separate
and distinct from any criminal prosecution based on the same act. Not being deemed instituted in the
criminal action based on cirtpa criminal, a ruling on the culpability of the offender will have no bearing
on said independent civil action based on an entirely different cause of action, i.e., culpa contractual.

In the same vein, the filing of the collection case after the dismissal of the estafa cases against [the
offender] did not amount to 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. Although the cases filed by [the offended party] arose from the same act
or omission of [the offender], they are, however, based on different causes of action. The criminal cases
for estafa are based on culpa criminal while the civil action for collection is anchored on culpa
contractual. Moreover, there can be no forum-shopping in the instant case because the law expressly
allows the filing of a separate civil action which can proceed independently of the criminal
action.82 (Citations omitted; emphasis in the original)

Applying the foregoing, petitioner's acquittal in the case for violation of Section 5(a) of Republic Act No.
9262 is not res judicata on the action for damages under Article 33 of the Civil Code. One of the
elements of res judicata is the identity of causes of action, with "cause of action" being the "act or
omission by which a party violates a right of another."83

While the criminal action and the action for damages arise from the same act or omission—the alleged
physical violence committed by petitioner against respondent—these actions violate two (2) different
rights of respondent: (1) her right not to be physically harmed by an intimate partner under Republic
Act No. 9262; and (2) her right to recover damages for bodily injury under Article 33 of the Civil Code.

In other words, the criminal case and the civil case do not have identical causes of action, and
respondent had the right to pursue either petitioner's civil liability arising from the violation of Republic
Act No. 9262, or the independent civil liability provided for in Article 33 of the Civil Code.

Even the finality of the acquittal is immaterial in the present case. To reiterate: actions under Article 33
of the Civil Code are '"separate, distinct, and independent' of any criminal prosecution based on the
same act [or omission]"84 on which the civil action was filed. As this Court said in Cancio, "a ruling on
the culpability of the offender will have no bearing on [the] independent civil action based on an entirely
different cause of action[.]"85

All told, the Court of Appeals correctly rejected petitioner's res judicata argument.

III

Corollarily, this Court affirms the Court of Appeals' ruling that respondent did not commit forum-
shopping when she filed the Complaint for Damages under Article 33 of the Civil Code. Forum shopping
is committed
by a party who institutes two or more suits in different courts, either simultaneously or successively, in
order to ask the courts to rule on the same or related causes or to grant the same or substantially the
same reliefs, on the supposition that one or the other court would make a favorable disposition or
increase a party's chances of obtaining a favorable decision or action[.]86 (Citation omitted)

To determine whether there is forum shopping, it is necessary to ascertain "whether the elements of
litis pendentia are present, or whether a final judgment in one case will amount to res judicata in
another[.]"87 The test is "whether in the two (or more) cases pending, there is identity of parties, rights
or causes of action, and reliefs sought."88

Litis pendentia "refers to that situation wherein another action is pending between the same parties for
the same cause of action, such that the second action becomes unnecessary and vexatious."89

The following requisites must concur for litis pendentia to be present: (1) the identity of parties, or at
least such as representing the same interests in both actions; (2) the identity of rights asserted and
relief prayed for; and (3) the identity of the two (2) cases such that judgment in one, regardless of which
party is successful, would amount to res judicata in the other.90

As discussed, the final judgment on the violation for Section 5(a) of Republic Act No. 9262 does not
amount to res judicata in the action for damages under Article 33 of the Civil Code. Further, Article 33
expressly allows the filing of a separate civil action for damages arising from physical injuries that can
proceed independently of the criminal action. With one of the crucial elements of res judicata being
absent, there can be no forum shopping in this case.

IV

The Court of Appeals correctly held that the venue was properly laid.

Venue is "the place where the case is to be heard or tried[.]"91 Under our Rules, the venue of an action
generally depends on whether it is a real or personal action.

Real actions are those affecting the title or possession of a real property, or interest therein, to be
commenced and tried in the proper court which has jurisdiction over the area wherein the real property
involved, or a portion thereof, is situated.92 All other actions, called personal actions, may be
commenced and tried where the plaintiff or any of the principal plaintiffs reside, or where the defendant
or any of the principal defendants reside, at the election of the plaintiff.93

The action for damages filed by respondent does not involve the title or possession of a real property,
or interest therein. It is a personal action, and respondent, as plaintiff, had the option of either filing it in
her place of residence or the defendant, petitioner's, place of residence. She chose to file the civil case
in her place of residence, that is, Mandaluyong City.

Petitioner, however, maintains that Mandaluyong City is not respondent's place of

residence. While respondent alleged in her Complaint for Damages that she resides in a condominium
unit in Mandaluyong City, petitioner cites two (2) instances where respondent testified that she residesat
a condominium unit in Paranaque City. The venue, petitioner argues, was improperly laid and the
Complaint for Damages should be dismissed accordingly.

Looking into petitioner's allegations, he cites parts of the proceedings in the criminal case, specifically,
the hearing held on May 22, 200794 and May 13, 200895 where respondent testified that she resided
in a condominium in Paranaque.
The Complaint for Damages, however, was filed on November 28, 2008,96 and it could very well be
that, as respondent had alleged in her civil complaint, she was already a resident of Mandaluyong City
at that time. Absent proof to the contrary, this Court affirms the findings of the Court of Appeals that
"[a]t the time of the filing of this case, [respondent] was already residing [at Mandaluyong City]. Thus,
venue was properly laid at the [Regional Trial Court] of Mandaluyong City."97

As a final note, not only did the Mandaluyong trial court err in dismissing the action based on Article 33
of the Civil Code by assuming that the acquittal, by itself, is a declaration that the facts upon which the
civil action can arise did not exist is already presumed. The court that tried the civil case also possibly
erred in the manner by which it interpreted the facts on the basis of what it considered as which narrative
is "in accord with human experience."98

The two (2) points articulated in the decision regarding the criminal case seems to reveal the severe
lack of gender sensitivity and/or practical wisdom on the trial court judge's part. The first is the assertion
that the woman chose to hide her lover's transgressions against her person before the doctor, as well
as her son. The second is the judge's assertion of his conclusion that the hesitation of the woman to
immediately leave her lover is an unnatural act and, hence, unbelievable.

These assumptions that provide the filters for a judge to eventually acquit, demonstrate that there is a
possibility that another civil action may interpret the facts differently. A more enlightened interpretation
of the evidence may involve a less caricaturized, less patriarchal set of assumptions. For instance,
the capability of women to sacrifice their own welfare in favor of those who they care for and love is
known to many women.

Thus, protecting the husband's reputation before a stranger, even if that stranger be a doctor, or sparing
the son from a premature dilemma that undermines his view of his father, is possibly a more ordinary
and enlightened view of respondent's motive, assuming the facts as established by the court trying the
criminal case.

Similarly, that someone, usually the woman, would hesitate to simply leave her family and deprive them
of her caring for her part in maintaining the household, even at peril to herself or her dignity, is not
outlandish, inconceivable or, sadly, even exceptional. Certainly, it is "in accord with human
experience."99

These motives, often perpetuated by culture, are the precise targets of our laws which underscore
gender equality in every type of relationship. It is the awareness of the possibility of abuse that a more
gendered perspective of human intentions is privileged by laws on sexual harassment—including the
law which seeks to prohibit violence against women in intimate relationships. The rather dismal failure
to consider the complexity of the human psyche in the criminal case may not be how the judge in the
civil case will consider the case given the same set of evidence. It is in these respects that We see the
wisdom of our current rules.

WHEREFORE, the Petition for Review on Certiorari is DENIED. The Court of Appeals' March 25, 2014
Decision and September 13, 2014 Resolution in CA-G.R. CV No. 96341 are
hereby AFFIRMED. The

Regional Trial Court of Mandaluyong City, Branch 214, is hereby DIRECTED to reinstate Civil Case
No. MC08-3871, continue with the proceedings, and to resolve the same with dispatch.

SO ORDERED.
Article 34
Article 35 -Reservation of civil actions
Artcile 36 – Prejudicial Question

JULIANA P. YAP vs. MARTIN PARAS and ALFREDO D. BARCELONA, SR. GR. No. 101236; January
30, 1992

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

GR. No. 101236 January 30, 1992

JULIANA P. YAP, petitioner,

vs.
MARTIN PARAS and ALFREDO D. BARCELONA, SR., Judge of the 3rd MTC of Glan Malapatan,
South Cotabato, respondents.

Mariano C. Alegarbes for petitioner.

Public Attorney's Office for private respondent.

CRUZ, J.:

This is still another dispute between brother and sister over a piece of property they inherited from their
parents. The case is complicated by the circumstance that the private respondent's counsel in this
petition is the son of the judge, the other respondent, whose action is being questioned.

Petitioner Juliana P. Yap was the sister of private respondent Martin Paras.*

On October 31, 1971, according to Yap, Paras sold to her his share in the intestate estate for P300.00.
The sale was evidenced by a private document. Nineteen years later, on May 2, 1990, Paras sold the
same property to Santiago Saya-ang for P5,000.00. This was evidenced by a notarized Deed of
Absolute Sale.

When Yap learned of the second sale, she filed a complaint for estafa against Paras and Saya-ang
with the Office of the Provincial Prosecutor of General Santos City. 1 On the same date, she filed a
complaint for the nullification of the said sale with the Regional Trial Court of General Santos City. 2

After investigation, the Provincial Prosecutor instituted a criminal complaint for estafa against Paras
with the Municipal Circuit Trial Court of Glan-Malapatan, South Cotabato, presided by Judge Alfredo
D. Barcelona, Sr.

On April 17, 1991, before arraignment of the accused, the trial judge motu proprio issued an order
dismissing the criminal case on the ground that:
 . . . after a careful scrutiny of the statements of complainant, Juliana P. Yap and of the
respondent Martin Paras and his witnesses, the Court holds and maintained (sic)
that there is a prejudicial question to a civil action, which must be ventilated in the proper
civil court. In the case of Ras vs. Rasul, 100 SCRA 125, the Supreme Court had already
made a pronouncement that "a criminal action for Estafa for alleged double sale of
property is a prejudicial question to a civil action for nullity of the alleged Deed of Sale
and defense of the alleged vendors of forgeries of their signatures to the Deed." 3

The Petitioner moved for reconsideration, which was denied on April 30, 1990. She then came to this
Court for relief in this special civil action for certiorari.

The Court could have referred this petition to the Court of Appeals, which has concurrent jurisdiction
under BP 129, but decided to resolve the case directly in view of the peculiar circumstances involved.

The petitioner's contention is that where there is a prejudicial question in a civil case, the criminal action
may not be dismissed but only suspended. Moreover, this suspension may not be done motu proprio by
the judge trying the criminal case but only upon petition of the defendant in accordance with the Rules
of Court. It is also stressed that a reversal of the order of dismissal would not bar the prosecution of the
accused under the double jeopardy rule because he has not yet been arraigned.

The Court notes that the counsel for private respondent Paras who filed the comment in his behalf is
the son and namesake of Judge Barcelona. Atty. Alfredo L. Barcelona, Jr. is employed in the Public
Attorney's Office. He has made it of record that he was not the counsel of Paras at the time the
questioned order of dismissal was issued by his father. He thus impliedly rejects the charge of bias
against his father.

Perhaps out of filial loyalty, Atty. Barcelona suggests there may have been a basis for the order in view
of the alleged double sale of the property which was being litigated in the regional trial court. He
concedes, however, that the order may have been premature and that it could not have been
issued motu proprio. Agreeing that double jeopardy would not attach because of the lack of
arraignment, he asks that his Comment be considered a motion for the suspension of the criminal action
on the ground of prejudicial question.

The Court has deliberated on the issues and finds that the respondent judge did indeed commit grave
abuse of discretion in motu proprio issuing the order of dismissal.

Section 6, Rule 111 of the 1985 Rules on Criminal Procedure as amended by this Court on July 7,
1988, provides as follows:

Sec. 6. Suspension by reason of prejudicial question. — A petition for suspension of the

criminal action based upon the pendency of a prejudicial question in a civil action may be
filed in the office of the fiscal or the court conducting the preliminary investigation. When
the criminal action has been filed in court for trial, the petition to suspend shall be filed in
the same criminal action at any time before the prosecution rests.

Judge Barcelona's precipitate action is intriguing, to say the least, in light of the clear provision of the
above-quoted rule. The rule is not even new, being only a rewording of the original provision in the
Rules of Court before they were amended. It plainly says that the suspension may be made only upon
petition and not at the instance of the judge alone, and it also says suspension, and not dismissal. One
also wonders if the person who notarized the disputed second sale, Notary Public Alexander C.
Barcelona, might be related to the respondent judge.
But more important than the preceding considerations is the trial judge's misapprehension of the
concept of a prejudicial question.

Section 5, Rule 111 of the 1985 Rules on Criminal Procedure as amended provides:

Sec. 5. Elements of prejudicial question. — The two (2) essential elements of a prejudicial
question are: (a) the civil action involves an issue similar or intimately related to the issue
raised in the criminal action; and (b) the resolution of such issue determines whether or
not the criminal action may proceed.

A prejudicial question is defined as that which arises in a case the resolution of which is a logical
antecedent of the issue involved therein, and the congnizance of which pertains to another tribunal.
The prejudicial question must be determinative of the case before the court but the jurisdiction to try
and resolve the question must be lodged in another court or tribunal. 4 It is a question 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. 5

We have held that "for a civil case to be considered prejudicial to a criminal action as to cause the
suspension of the criminal action pending the determination of the civil action, it must appear not only
that the civil case involves the same facts upon which the criminal prosecution is based, but also that
the resolution of the issues raised in said civil action would be necessarily determinative of the guilt or
innocence of the accused". 6

It is the issue in the civil action that is prejudicial to the continuation of the criminal action, not the
criminal action that is prejudicial to the civil action.

The excerpt quoted by the respondent judge in his Order does not appear anywhere in the decision
of Ras v. Rasul. 7 Worse, he has not only misquoted the decision but also wrongly applied it. The facts
of that case are not analogous to those in the case at bar.

In that case, Ras allegedly sold to Pichel a parcel of land which he later also sold to Martin. Pichel
brought a civil action for nullification of the second sale and asked that the sale made by Ras in his
favor be declared valid. Ras's defense was that he never sold the property to Pichel and his purported
signatures appearing in the first deed of sale were forgeries. Later, an information for estafa was filed
against Ras based on the same double sale that was the subject of the civil action. Ras filed a "Motion
for Suspension of Action" (that is, the criminal case), claiming that the resolution of the issues in the
civil case would necessarily be determinative of his guilt or innocence.

Through then Associate Justice Claudio Teehankee, this Court ruled that a suspension of the criminal
action was in order because:

On the basis of the issues raised in both the criminal and civil cases against petitioner
and in the light of the foregoing concepts of a prejudicial question, there indeed appears
to be a prejudicial question in the case at bar, considering that petitioner Alejandro Ras'
defense (as defendant) in Civil Case No. 73 of the nullity and forgery of the alleged prior
deed of sale in favor of Luis Pichel (plaintiff in the civil case and complaining witnesses in
the criminal case) is based on the very same facts which would be necessarily
determinative of petitioner Ras' guilt or innocence as accused in the criminal case. If the
first alleged sale in favor of Pichel is void or fictitious, then there would be no double sale
and petitioner would be innocent of the offense charged. A conviction in the criminal case
(if it were allowed to proceed ahead) would be a gross injustice and would have to be set
 aside if it were finally decided in the civil action that indeed the alleged prior deed of sale
was a forgery and spurious.

xxx xxx xxx

The petitioner Alejandro Ras claims in his answer to the complaint in Civil Case No. 73
that he had never sold the property in litigation to the plaintiff (Luis Pichel) and that his
signatures in the alleged deed of sale and that of his wife were forged by the plaintiff. It
is, therefore, necessary that the truth or falsity of such claim be first determined because
if his claim is true, then he did not sell his property twice and no estafa was committed.
The question of nullity of the sale is distinct and separate from the crime of estafa (alleged
double sale) but so intimately connected with it that it determines the guilt or innocence
of herein petitioner in the criminal action.

In the Ras case, there was a motion to suspend the criminal action on the ground that the defense in
the civil case — forgery of his signature in the first deed of sale — had to be threshed out first.
Resolution of that question would necessarily resolve the guilt or innocence of the accused in the
criminal case. By contrast, there was no motion for suspension in the case at bar; and no less
importantly, the respondent judge had not been informed of the defense Paras was raising in the civil
action. Judge Barcelona could not have ascertained then if the issue raised in the civil action would
determine the guilt or innocence of the accused in the criminal case.

It is worth remarking that not every defense raised in the civil action will raise a prejudicial question to
justify suspension of the criminal action. The defense must involve an issue similar or intimately related
to the same issue raised in the criminal action and its resolution should determine whether or not the
latter action may proceed.

The order dismissing the criminal action without a motion for suspension in accordance with Rule 111,
Section 6, of the 1985 Rules on Criminal Procedure as amended, and even without the accused
indicating his defense in the civil case for the annulment of the second sale, suggests not only ignorance
of the law but also bias on the part of the respondent judge.

Judge Alfredo D. Barcelona, Sr. is sternly reminded that under the Code of Judicial Conduct, "a judge
shall be faithful to the law and maintain professional competence" and "should administer justice
impartially." He is hereby reprimanded for his questionable conduct in the case at bar, with the warning
that commission of similar acts in the future will be dealt with more severely.

WHEREFORE, the petition is GRANTED. The Order issued by Judge Alfredo D. Barcelona, Sr. dated
April 17, 1991, dismissing Criminal Case No. 1902-G, and the Order dated April 30, 1991, denying the
motion for reconsideration, are REVERSED and SET ASIDE. Criminal Case No. 1902-G is ordered
REINSTATED for further proceedings, but to be assigned to a different judge.

SO ORDERED.
ALEJANDRO RAS vs. HON. JAINAL D. RASUL and PEOPLE OF THE PHILIPPINES; G.R. Nos. L-
50441 to 42; September 18, 1980

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. Nos. L-50441-42 September 18, 1980

ALENJANDRO RAS, petitioner,

vs.
HON. JAINAL D. RASUL, District Judge of the Court of First Instance of Basilan, and PEOPLE
OF THE PHILIPPINES, respondents.

TEEHANKEE, J.:

This is a petition brought by the petitioner to review and set aside the order of respondent Judge dated
December 12, 1978 in Criminal Case No. 240 of the Court of First Instance of Basilan denying
petitioner's motion as accused therein to suspend proceedings due to the existence of a prejudicial
question in Civil Case No. 73 of the same court. Finding the petition and the Solicitor General's
concurrence therewith to be meritorious, this Court hereby grants the petition and accordingly sets
aside the questioned order and hereby enjoins the respondent Judge from further proceeding with
Criminal Case No. 73 until Civil Case No. 240 is finally decided and terminated.

A chronological statement of the antecedent facts follows:

On or about April 27, 1978, Luis Pichel filed a complaint against petitioner Alejandro Ras and a certain
Bienvenido Martin before the Court of First Instance of Basilan, docketed therein as Civil Case No. 73
praying for the nullification of the deed of sale executed by Alejandro Ras in favor of his codefendant
Bienvenido Martin and for the declaration of the prior deed of sale allegedly executed in his favor by
the defendant Alejandro Ras as valid.

In their answer, the defendants (the Ras spouses) alleged that they never sold the property to Pichel
and that the signatures appearing in the deed of sale in favor of plaintiff Pichel (in Civil Case No. 73)
were forgeries and that therefore the alleged deed of sale in Pichel's favor sought to be declared valid
was fictitious and inexistent.

While Civil Case No. 73 was being tried before the Court of First Instance of Basilan, the Provincial
Fiscal of Basilan filed on or about September 5, 1978 an Information for Estafa in the same court against
Alejandro Ras arising from the same alleged double sale subject matter of the civil complaint filed by
Luis Pichel. The case was docketed as Criminal Case No. 240 of the Court of First Instance of Basilan.

On November 6, 1978, petitioner, through counsel, filed a "Motion for Suspension of Action" in said
Criminal Case No. 240 claiming that the same facts and issues were involved in both the civil and
criminal case and that the resolution of the issues in the civil case would necessarily be determinative
of the guilt or innocence of the accused.
The Provincial Fiscal of Basilan filed his opposition on December 4, 1978.

In his Order of December 12, 1978, the respondent judge saw no prejudicial question and accordingly
denied the motion. Hence, the present petition.

A prejudicial question is defined as that which arises in a case the resolution of which is a logical
antecedent of the issue involved therein, and the cognizance of which pertains to another tribunal. The
prejudicial question must be determinative of the case before the court but the jurisdiction to try and
resolve the question must be lodged in another court or tribunal 1 It is a question 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. 2

For a civil case to be considered prejudicial to a criminal action as to cause the suspension of the
criminal action pending the determination of the civil, it must appear not only that the civil case involves
the same facts upon which the criminal pro. prosecution is based, but also that the resolution of the
issues raised in said civil action would be necessary determinative of the guilt or innocence of the
accused. 3

On the basis of the issues raised in both the criminal and civil cases against petitioner and in the light
of the foregoing concepts of a prejudicial question, there indeed appears to be a prejudicial question in
the case at bar, considering that petitioner Alejandro Ras' defense (as defendant) in Civil Case No. 73
of the nullity and forgery of the alleged prior deed of sale in favor of Luis Pichel (plaintiff in the civil case
and complaining witness in the criminal case) is based on the very same facts which would be
necessarily determinative of petitioner Ras' guilt or innocence as accused in the criminal case. If the
first alleged sale in favor of Pichel is void or fictitious, then there would be no double sale and petitioner
would be innocent of the offense charged. A conviction in the criminal case (if it were allowed to proceed
ahead) would be a gross injustice and would have to be set aside if it were finally decided in the civil
action that indeed the alleged prior deed of sale was a forgery and spurious.

The Solicitor General in his comment expressed his concurrence with the petition thus: "The petitioner
Alejandro Ras claims in his answer to the complaint in Civil Case No. 73 that he had never sold the
property in litigation to the plaintiff (Luis Pichel) and that his signatures in the alleged deed of and that
of his wife were forged by the plaintiff. It is, therefore, necessary that the truth or falsity of such claim
be first determined because if his claim is true, then he did not sell his property twice and no estafa was
committed. The question of nullity of the sale is distinct and from the crime of estafa (alleged double
sale) but so intimately connected with it that it determines the guilt or innocence of herein petitioner in
the c action."

Wherefore, the Order of respondent judge in Criminal Case No. 240 dated December 12, 1978 is
hereby set aside. The temporary restraining order issued by this Court on May 16, 1979 is hereby made
permanent and respondent judge is enjoined from proceeding with the arraignment and trial of Criminal
Case No. 240 until and unless Civil Case No. 73 shall have been finally decided and terminated
adversely against petitioner. No costs.
TEODORO A. REYES vs. ETTORE ROSSI G.R. No. 159823; February 18, 2013

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 159823 February 18, 2013

TEODORO A. REYES, Petitioner,

vs.
ETTORE ROSSI, Respondent.

DECISION

BERSAMIN, J.:

The rescission of a contract of sale is not a prejudicial question that will warrant the suspension of the
criminal proceedings commenced to prosecute the buyer for violations of the Bouncing Checks
Law (Batas Pambansa Blg. 22) arising from the dishonor of the checks the buyer issued in connection
with the sale.

Antecedents

On October 31, 1997, petitioner Teodoro A. Reyes (Reyes) and Advanced Foundation Construction
Systems Corporation (Advanced Foundation), represented by its Executive Project Director,
respondent Ettore Rossi (Rossi), executed a deed of conditional sale involving the purchase by Reyes
of equipment consisting of a Warman Dredging Pump HY 300A worth ₱10,000,000.00. The parties
agreed therein that Reyes would pay the sum of ₱3,000,000.00 as downpayment, and the balance of
₱7,000,000.00 through four post-dated checks. Reyes complied, but in January 1998, he requested
the restructuring of his obligation under the deed of conditional sale by replacing the four post-dated
checks with nine post-dated checks that would include interest at the rate of ₱25,000.00/month accruing
on the unpaid portion of the obligation on April 30, 1998, June 30, 1998, July 31, 1998, September 30,
1998 and October 31, 1998.1

Advanced Foundation assented to Reyes’ request, and returned the four checks. In turn, Reyes issued
and delivered the following nine postdated checks in the aggregate sum of ₱7,125,000.00 drawn
against the United Coconut Planters Bank,2 to wit:

Check No. Date Amount

72807 April 30, 1998 P 25,000.00
79125 May 1, 1998 1,000,000.00
72802 May 30, 1998 2,000,000.00
72808 June 30, 1998 25,000.00
72809 July 31, 1998 25,000.00
72801 August 31, 1998 2,000,000.00
 72810 September 30, 1998 25,000.00
72811 October 31, 1998 25,000.00
72903 November 30, 1998 2,000,000.00

Rossi deposited three of the post-dated checks (i.e., No. 72807, No. 79125 and No. 72808) on their
maturity dates in Advanced Foundation’s bank account at the PCI Bank in Makati. Two of the checks
were denied payment ostensibly upon Reyes’ instructions to stop their payment, while the third (i.e.,
No. 72802) was dishonored for insufficiency of funds. 3

Rossi likewise deposited two more checks (i.e., No. 72809 and No. 72801) in Advanced Foundation’s
account at the PCI Bank in Makati, but the checks were returned with the notation Account
Closed stamped on them. He did not anymore deposit the three remaining checks on the assumption
that they would be similarly dishonored.4

In the meanwhile, on July 29, 1998, Reyes commenced an action for rescission of contract and
damages in the Regional Trial Court in Quezon City (RTC). His complaint, docketed as Civil Case No.
Q98-35109 and entitled Teodoro A. Reyes v. Advanced Foundation Construction Systems Corporation,
sought judgment declaring the deed of conditional sale "rescinded and of no further force and effect,"
and ordering Advanced Foundation to return the ₱3,000,000.00 downpayment with legal interest from
June 4, 1998 until fully paid; and to pay to him attorney’s fees, and various kinds and amounts of
damages.5

On September 8, 1998, Rossi charged Reyes with five counts of estafa and five counts of violation
of Batas Pambansa Blg. 22 in the Office of the City Prosecutor of Makati for the dishonor of Checks
No. 72807, No. 72808, No. 72801, No. 72809 and No. 79125. Another criminal charge for violation
of Batas Pambansa Blg. 22 was lodged against Reyes in the Office of the City Prosecutor of Quezon
City for the dishonor of Check No. 72802.6

On September 29, 1998, Reyes submitted his counter-affidavit in the Office of the City Prosecutor of
Makati,7 claiming that the checks had not been issued for any valuable consideration; that he had
discovered from the start of using the dredging pump involved in the conditional sale that the Caterpillar
diesel engine powering the pump had been rated at only 560 horsepower instead of the 1200
horsepower Advanced Foundation had represented to him; that welding works on the pump had neatly
concealed several cracks; that on May 6, 1998 he had written to Advanced Foundation complaining
about the misrepresentations on the specifications of the pump and demanding documentary proof of
Advanced Foundation’s ownership of the pump; that he had caused the order to stop the payment of
three checks (i.e., No. 72806, No. 72807 and No. 79125); that Advanced Foundation had replied to his
letter on May 8, 1998 by saying that the pump had been sold to him on an as is, where is basis; that he
had then sent another letter to Advanced Foundation on May 18, 1998 to reiterate his complaints and
the request for proper documentation of ownership; that he had subsequently discovered other hidden
defects, prompting him to write another letter; and that instead of attending to his complaints and
request, Advanced Foundation’s lawyers had threatened him with legal action.

At the same time, Reyes assailed the jurisdiction of the Office of the City Prosecutor of Makati over the
criminal charges against him on the ground that he had issued the checks in Quezon City; as well as
argued that the Office of the City Prosecutor of Makati should suspend the proceedings because of the
pendency in the RTC of the civil action for rescission of contract that posed a prejudicial question as to
the criminal proceedings.8
On November 20, 1998, the Assistant City Prosecutor handling the preliminary investigation
recommended the dismissal of the charges of estafa and the suspension of the proceedings relating to
the violation of Batas Pambansa Blg. 22 based on a prejudicial question.9

On January 5, 1999, the City Prosecutor of Makati approved the recommendation of the handling
Assistant City Prosecutor,10 stating:

WHEREFORE, premises considered, the complaint for Estafa is respectfully recommended to be

dismissed, as upon approval, it is hereby dismissed.

Further, it is respectfully recommended that the proceedings in the charge for Violation of Batas
Pambansa Bilang 22 against the respondent be suspended until the prejudicial question raised in Civil
Case Q-98-35109 for Rescission of Contract and Damages which is now pending with the RTC of
Quezon City, Branch 224, has been duly resolved.

Rossi appealed the resolution of the City Prosecutor to the Department of Justice, but the Secretary of
Justice, by resolution of July 24, 2001, denied Rossi’s petition for review.

After the denial of his motion for reconsideration on April 29, 2002, Rossi challenged the resolutions of
the Secretary of Justice by petition for certiorari in the CA.

Ruling of the CA

In the petition for certiorari, Rossi insisted that the Secretary of Justice had committed grave abuse of
discretion amounting to lack or excess of jurisdiction in upholding the suspension of the criminal
proceedings by the City Prosecutor of Makati on account of the existence of a prejudicial question, and
in sustaining the dismissal of the complaints for estafa.

On May 30, 2003, the CA promulgated its assailed decision, 11 to wit:

WHEREFORE, the foregoing considered, the assailed resolution is hereby MODIFIED and the instant
petition is GRANTED in so far as the issue of the existence of prejudicial question is concerned.
Accordingly, the order suspending the preliminary investigation in I.S. No. 98-40024-29
is REVERSED and SET ASIDE, and the dismissal of the complaint for estafa is AFFIRMED.

SO ORDERED.

Issues

Hence, this appeal by Reyes.

Reyes asserts that the CA erred in ruling that there was no prejudicial question that warranted the
suspension of the criminal proceedings against him; that the petition suffered fatal defects that merited
its immediate dismissal; that the CA was wrong in relying on the pronouncements in Balgos, Jr. v.
Sandiganbayan12 and Umali v. Intermediate Appellate Court13 because the factual backgrounds
thereat were not similar to that obtaining here; and that the Secretary of Justice did not commit any
grave abuse of discretion amounting to lack or excess of jurisdiction.

In his comment,14 Rossi counters that the petition for review should be outrightly dismissed because of
its fatal defect; that the CA did not err in ruling that the action for rescission of contract did not pose a
prejudicial question that would suspend the criminal proceedings.
Reyes submitted a reply,15 declaring that the defect in the affidavit of service attached to his petition for
review had been due to oversight; that he had substantially complied with the rules; that there existed
a prejudicial question that could affect the extent of his liability in light of Supreme Court Administrative
Circular No. 12-2000; and that the CA erred in finding that the Secretary of Justice committed grave
abuse of discretion.

To be resolved is whether or not the civil action for rescission of the contract of sale raised a prejudicial
question that required the suspension of the criminal prosecution for violation of Batas Pambansa Blg.
22.

Ruling

The petition for review is without merit.

A prejudicial question generally comes into play in a situation where a civil action and a criminal action
are both pending, and there exists in the former an issue that must first be determined 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. 16 The
rationale for the suspension on the ground of a prejudicial question is to avoid conflicting decisions. 17

Two elements that must concur in order for a civil case to be considered a prejudicial question are
expressly stated in Section 7, Rule 111 of the 2000 Rules of Criminal Procedure, to wit:

Section 7. Elements of prejudicial question. – The elements of a prejudicial question are: (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.

In Sabandal v. Tongco,18 the concept of prejudicial question is explained in this wise:

For a civil action to be considered prejudicial to a criminal case as to cause the suspension of the
criminal proceedings until the final resolution of the civil, the following requisites must be present: (1)
the civil case involves facts intimately related to those upon which the criminal prosecution would be
based; (2) in the resolution of the issue or issues raised in the civil action, the guilt or innocence of the
accused would necessarily be determined; and (3) jurisdiction to try said question must be lodged in
another tribunal.

If both civil and criminal cases have similar issues or the issue in one is intimately related to the issues
raised in the other, then a prejudicial question would likely exist, provided the other element or
characteristic is satisfied. It must appear not only that the civil case involves the same facts upon which
the criminal prosecution would be based, but also that the resolution of the issues raised in the civil
action would be necessarily determinative of the guilt or innocence of the accused. If the resolution of
the issue in the civil action will not determine the criminal responsibility of the accused in the criminal
action based on the same facts, or there is no necessity "that the civil case be determined first before
taking up the criminal case," therefore, the civil case does not involve a prejudicial question. Neither is
there a prejudicial question if the civil and the criminal action can, according to law, proceed
independently of each other.

Contending that the rescission of the contract of sale constitutes a prejudicial question, Reyes posits
that the resolution of the civil action will be determinative of whether or not he was criminally liable for
the violations of Batas Pambansa Blg. 22. He states that if the contract would be rescinded, his
obligation to pay under the conditional deed of sale would be extinguished, and such outcome would
necessarily result in the dismissal of the criminal proceedings for the violations of Batas Pambansa Blg.
22.

The action for the rescission of the deed of sale on the ground that Advanced Foundation did not comply
with its obligation actually seeks one of the alternative remedies available to a contracting party under
Article 1191 of the Civil Code, to wit:

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 fulfilment and the rescission of the obligation, with the
payment of damages in either case. He may also seek rescission, even after he has chosen fulfilment,
if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a
period.

This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with Articles 1385 and 1388 and the Mortgage Law.

Article 1191 of the Civil Code recognizes an implied or tacit resolutory condition in reciprocal
obligations. The condition is imposed by law, and applies even if there is no corresponding agreement
thereon between the parties. The explanation for this is that in reciprocal obligations a party incurs in
delay once the other party has performed his part of the contract; hence, the party who has performed
or is ready and willing to perform may rescind the obligation if the other does not perform, or is not
ready and willing to perform.19

It is true that the rescission of a contract results in the extinguishment of the obligatory relation as if it
was never created, the extinguishment having a retroactive effect. The rescission is equivalent to
invalidating and unmaking the juridical tie, leaving things in their status before the celebration of the
contract.20 However, until the contract is rescinded, the juridical tie and the concomitant obligations
subsist.

To properly appreciate if there is a prejudicial question to warrant the suspension of the criminal actions,
reference is made to the elements of the crimes charged. The violation of Batas Pambansa Blg. 22
requires the concurrence of the following elements, namely: (1) the making, drawing, and issuance of
any check to apply for account or for value; (2) the knowledge of the maker, drawer, or issuer that at
the time of issue he does not have sufficient funds in or credit with the drawee bank for the payment of
the check in full upon its presentment; and (3) the subsequent dishonor of the check by the drawee
bank for insufficiency of funds or credit or dishonor for the same reason had not the drawer, without
any valid cause, ordered the bank to stop payment. 21 The issue in the criminal actions upon the
violations of Batas Pambansa Blg. 22 is, therefore, whether or not Reyes issued the dishonoured
checks knowing them to be without funds upon presentment. On the other hand, the issue in the civil
action for rescission is whether or not the breach in the fulfilment of Advanced Foundation’s obligation
warranted the rescission of the conditional sale. If, after trial on the merits in the civil action, Advanced
Foundation would be found to have committed material breach as to warrant the rescission of the
contract, such result would not necessarily mean that Reyes would be absolved of the criminal
responsibility for issuing the dishonored checks because, as the aforementioned elements show, he
already committed the violations upon the dishonor of the checks that he had issued at a time when
the conditional sale was still fully binding upon the parties. His obligation to fund the checks or to make
arrangements for them with the drawee bank should not be tied up to the future event of extinguishment
of the obligation under the contract of sale through rescission. Indeed, under Batas Pambansa Blg. 22,
the mere issuance of a worthless check was already the offense in itself. Under such circumstances,
the criminal proceedings for the violation of Batas Pambansa Blg. 22 could proceed despite the
pendency of the civil action for rescission of the conditional sale.

Accordingly, we agree with the holding of the CA that the civil action for the rescission of contract was
not determinative of the guilt or innocence of Reyes. We consider the exposition by the CA of its reasons
to be appropriate enough, to wit:

xxxx

We find merit in the petition.

A careful perusal of the complaint for rescission of contract and damages reveals that the causes of
action advanced by respondent Reyes are the alleged misrepresentation committed by the petitioner
and AFCSC and their alleged failure to comply with his demand for proofs of ownership. On one hand,
he posits that his consent to the contract was vitiated by the fraudulent act of the company in
misrepresenting the condition and quality of the dredging pump. Alternatively, he claims that the
company committed a breach of contract which is a ground for the rescission thereof. Either way, he in
effect admits the validity and the binding effect of the deed pending any adjudication which nullifies the
same.

Indeed, under the Jaw on contracts, vitiated consent does not make a contract unenforceable but
merely voidable, the remedy of which would be to annul the contract since voidable contracts produce
legal effects until they are annulled. On the other hand, rescission of contracts in case of breach
pursuant to Article 1191 of the Civil Code of the Philippines also presupposes a valid contract unless
rescinded or annulled.

As defined, a prejudicial question is one that arises in a case, the resolution of which is a logical
antecedent of the issue involved therein, and the cognizance of which pertains to another tribunal. The
prejudicial question must be determinative of the case before the court but the jurisdiction to try and
resolve the question must be lodged in another court or tribunal.

It is a question 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. It comes into play generally in
a situation where a civil action and a criminal action are both pending and there exists in the former an
issue which must be preemptively resolved before the criminal action 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.

In this light, it is clear that the pendency of the civil case does not bar the continuation of the proceedings
in the preliminary investigation on the ground that it poses a prejudicial question. Considering that the
contracts are deemed to be valid until rescinded, the consideration and obligatory effect thereof are
also deemed to have been validly made, thus demandable. Consequently, there was no failure of
consideration at the time when the subject checks were dishonored. (Emphasis supplied)

xxxx

WHEREFORE, the Court DENIES the petition for review; AFFIRMS the decision the Court of Appeals
promulgated on May 30, 2003; and DIRECTS the petitioner to pay the costs of suit.
SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:
PEOPLE OF THE PHILIPPINES vs. CAMILO CAMENFORTE AND ROBERT LASTRILLA; G.R. No.
220916l; June 14, 2021

FIRST DIVISION

G.R. No. 220916, June 14, 2021

PEOPLE OF THE PHILIPPINES, Petitioner, v. CAMILO CAMENFORTE AND ROBERT LASTRILLA,

Respondents.

DECISION

CAGUIOA, J.:

Central in the resolution of the instant dispute is the appreciation of the principle of prejudicial
question in the context of a final and executory decision in a civil case that implicates on the core issue
in dispute in several pending criminal cases.

This is a Petition for Review on Certiorari1 (Petition) under Rule 45 of the Rules of Court filed by the
People, as represented by the Office of the Solicitor General (petitioner), seeking a reversal of the
Decision2 dated April 27, 2015 and Resolution3 dated September 23, 2015 of the Court of Appeals,
Former Eighteenth Division (CA) in CA-G.R. CEB-CR No. 01796. The assailed Decision denied the
appeal brought by petitioner before the CA, which had sought a reversal of the dismissal4 of the criminal
cases against Camilo Camenforte (respondent Camenforte) and Robert Lastrilla (respondent Lastrilla)
(collectively, respondents) before Branch 8, Regional Trial Court of Tacloban City (RTC-Branch 8).

Factual Antecedents

The facts in brief show that the present controversy involves a sale of several parcels of land owned
by Aurora Granda (Aurora) in her lifetime. The spouses Aurora and Rafael Granda (Rafael) (together,
Sps. Granda) had 10 children, among them Silvina Granda (Silvina), their youngest. On December 7,
1985, Sps. Granda entered into three sale transactions with Necita Uy, Elsa Uy, Andres Uy, Tinong Uy,
Rosa Uy and Mary Uy-Cua (Uy siblings) and respondent Lastrilla, covering several parcels of land: 5

Deed of Sale Vendors Vendees Pproperties Consideration

First Deed of Two parcels of land

Spouses Necita Uy, Elsa Uy,
Sale6 dated covered by TCT7 No.
Aurora and Andres Uy, Tinong Uy, P3,800,000.00
December 7, T-249 and TCT No.
Rafael Granda and Rosa Uy
1985 T-1312.
Second Deed of Necita Uy, Elsa Uy,
Spouses Two parcels of land
Sale8 dated Andres Uy, Tinong Uy,
Aurora and covered by TCT No. P5,000,000.00
December 7, Mary Uy-Cua and Rosa
Rafael Granda T-816
1985 Uy
 Third Deed of
Spouses Three parcels of land
Sale9 dated Robert and Norma
Aurora and covered by TCT No. P200,000.00
December 7, Lastrilla
Rafael Granda T-6736
1985

Nearly 15 years after the execution of the Deeds of Sale, the first and second Deeds of Sale (involving
the properties covered by TCT Nos. T-1312, T-816 and T-249) were annotated on the dorsal portion of
their respective TCTs.10 As a result, TCT Nos. T-1312, T-816 and T-249 were cancelled, and TCT Nos.
T-6696, T-54400 and T-54401 were issued in the names of the respective vendees. 11 Rafael and
Aurora died in June 1989 and on September 16, 2000, respectively. 12

Five months after Aurora's death, Rafael A. Granda (private complainant Rafael), the grandson and a
legal heir of Sps. Granda, filed a complaint for violation of Articles 171 and 172 of the Revised Penal
Code against Silvina, respondent Camenforte, Norma Lastrilla, Mary Uy-Cua, Necita Uy, Elsa Uy,
Andres Uy, Tinong Uy and Rosa Uy. Private complainant Rafael claimed that a month after his
grandmother Aurora's death, he discovered that all of his grandparents' properties in Tacloban were
fraudulently sold to different vendees sometime in 1999-2000.13 Private complainant Rafael alleged
that after obtaining copies of the three Deeds of Sale, he observed that the signatures of his
grandparents were falsified, and that the same observation was confirmed by the Philippine National
Police-Crime Laboratory (PNP-Crime Lab), which concluded that the signatures of his deceased
grandfather and namesake Rafael in the Deeds and the signature specimens "were not written by one
hand and the same person."14 The PNP-Crime Lab likewise suggested that the signature of his
deceased grandfather on the questioned Deeds of Sale, when compared to the signatures of Silvina,
"reveal similarities in stroke structure, indicative of one writer."15 Private complainant Rafael added that
the Deeds of Sale in question were antedated, in that they were actually executed sometime in 1999
or 2000, but were made to reflect an earlier date, when Sps. Granda were still alive. 16

To further bolster his claim, private complainant Rafael alleged that the subject Deeds could not have
been known and consented to by Sps. Granda since, among others: (1) Aurora was still exercising her
ownership rights over the property even after December 7, 1975; (2) Aurora even authorized Silvina,
as her attorney-in-fact, to execute lease contracts over the subject properties in February 2000; (3) the
subject Deeds were not among the available notarized documents submitted to the Office of the Clerk
of Court of the Regional Trial Court of the 8th Judicial Region for year 1985, per the latter's certification;
and (4) the subject Deeds were registered with the Register of Deeds only in February 28, 2000, or
almost 15 years after they were executed.17

In their counter-affidavit, the Uy siblings submitted that they validly bought the subject properties for a
total consideration of P18,800,000.00, 18 and that it was private complainant Rafael who unjustly
enriched himself when he received a portion of the purchase price as heirs of Sps. Granda. 19 The Uy
siblings insisted that they bought the subject properties in good faith, 20 and the complaint was merely
a malicious suit with the aim of making them give in to an even higher consideration for their purchase
of the subject properties.21

The Office of the City Prosecution of Tacloban subsequently filed criminal informations against
respondent Camenforte and Silvina for conspiring to falsify the subject Deeds, but it dismissed the
complaint in so far as respondent Lastrilla and the Uy siblings were concerned.22 On a petition for partial
review, the Office of the City Prosecution of Tacloban with the Department of Justice (DOJ), affirmed
the dismissal of the complaint against respondent Lastrilla and the Uy siblings. 23

Private complainant Rafael then filed a petition for review under Rule 43 with the CA, and the latter
modified the DOJ Resolution and found probable cause to file a criminal information against respondent
Lastrilla. Respondent Lastrilla sought to have the CA's finding of probable cause against him
reversed,24 but the same was denied by this Court in the case of Lastrilla v. Granda.25

Thus, the criminal informations were accordingly filed against respondents and Silvina. Silvina and
respondent Camenforte were charged before RTC-Branch 8 with Falsification under Article 171 sub-
paragraphs 1, 2 and 5 of the Revised Penal Code in three Informations docketed as Criminal Case
Nos. 2001-07-482 to 484, corresponding to the three Deeds of Sale. The Information docketed as
Criminal Case No. 2001-07-482 reads:

That sometime in 1999 in Tacloban City, Philippines and within the jurisdiction of this Honorable court,
the above-named accused CAMILO CAMENFORTE, a notary public for the Province of Leyte and the
Cities of Tacloban and Ormoc, and SILVINA GRANDA, conspiring and conniving with each other, did
then and there, willfully, unlawfully and feloniously forged the signatures of AURORA and RAFAEL
GRANDA in a Deed of Sale dated December 7, 1985, made it appear that Aurora and Rafael Granda
sold the real property described therein to the vendees Necita Uy, Elsa Uy, Andres Uy, Tinong Uy and
Rosa Uy, when [in] fact they did not, made it appear that Aurora and Rafael Granda acknowledged the
said document before notary public Camilo Camenforte on December 7, 1985, when in truth and in fact
said Aurora and Rafael Granda did not do so, and finally, antedated the aforesaid Deed of Sale to
December 7, 1985 when it was actually executed sometime in 1999. 26

The other two Informations accused Silvina and respondent Camenforte of the same offenses for the
other two Deeds of Sale.27

For his part, respondent Lastrilla was charged in the three Informations for Falsification under Article
172 of the Revised Penal Code for the same set of documents, with said Informations docketed as
Criminal Case Nos. 2008-03-109 to 111, with the Information in Criminal Case No. 2008-03-110
reading:

That sometime in 1999 in Tacloban City, Philippines and within the jurisdiction of this Honorable court,
the above-named accused ROBERT LASTRILLA, willfully, unlawfully and feloniously caused the
counterfeiting or forging of the signatures of AURORA and RAFAEL GRANDA in a Deed of Sale dated
December 7, 1985, made it appear that Aurora and Rafael Granda sold the real property described
therein to the vendees Necita Uy, Mary Uy Cua, Elsa Uy, Andres Uy, Tinong Uy and Rosa Uy, when in
truth and in fact said Aurora and Rafael Granda did not do so, and subsequently acknowledged the
said document before notary public Camilo Camenforte on December 7, 1985, when in truth and the
[sic] fact no such document was signed or notarized on December 7, 1985, and finally, antedated the
aforesaid Deed of Sale to December 7, 1985, when it was actually executed sometime in 1999. 28

The two other Informations charged respondent Lastrilla with the same crime with respect to the other
Deeds of Sale.

While the criminal cases against Silvina and respondents were pending, Benjamin R. Granda
(Benjamin) and Blanquita R. Serafica (Blanquita), children of Sps. Granda, filed a Complaint for
Nullification of Title and Deeds with Damages 29 dated August 21, 2001 against the Uy siblings, Silvina
and respondent Lastrilla before Branch 9, Regional Trial Court of Tacloban City (RTC-Branch 9),
docketed as Civil Case No. 2001-09-135.30 Benjamin and Blanquita alleged that they are the legal and
compulsory heirs of Sps. Granda, who in their lifetime owned the subject properties which were sold
through the three subject deeds. Similar with private complainant Rafael's submission in the earlier
criminal cases, Benjamin and Blanquita alleged that the subject Deeds were falsified and were null and
void. They submit that as a consequence of the nullity of the subject Deeds, the subject properties
should be reconveyed to Sps. Granda, as represented by them as the heirs.31

On June 6, 2005, RTC-Branch 9 rendered its Decision32 dismissing the complaint in Civil Case No.
2001-09-135. Benjamin and Blanquita interposed an appeal before the CA which dismissed the same.
An Entry of Judgment was thereafter issued.33

Meanwhile, on January 30, 2008, respondent Camenforte filed a Consolidated Motion to Quash the
Informations in Criminal Case Nos. 2001-07-482 to 484. The said Motion was denied by RTC-Branch
8 on July 15, 2008.

Respondent Camenforte was arraigned on August 28, 2008 in Criminal Case Nos. 2001-07-482 to 484,
where he pleaded "not guilty." Respondent Lastrilla, for his part, was arraigned on December 15, 2008
in Criminal Case Nos. 2008-03-109 to 111 where he similarly entered a plea of "not guilty." Silvina, on
the other hand, failed to appear during her arraignment, so the cash bond which she previously posted
was forfeited in favor of the government, and a warrant of arrest was issued against her. 34

Through their respective Motions to Dismiss,35 both respondents prayed that the criminal cases against
them be dismissed on the grounds of res judicata and the existence of a prejudicial question.36 These
Motions were granted by RTC-Branch 8 in its Resolution dated August 20, 2009, portions of which held:

The question now before this Court, as raised in the Motions to Dismiss by accused Robert Lastrilla
and Camilo Camenforte, the Consolidated Opposition/Comment of the prosecution and the Comment
(Re: Consolidated Opposition/Comment) of accused Robert Lastrilla is propriety of this court
proceeding with these cases which were allegedly forged, were found by another court in a civil action,
to be genuine.

x x x

x x x In the said civil action, plaintiffs raised the issue of validity of the three Deeds of Absolute Sale
covered by the above-mentioned three transactions. They questioned the signatures of the vendors in
these three transactions and they alleged that it was falsified and because they were falsified, the same
were null and void and it follows that the Titles which were issued on the basis thereof were null and
void. The Decision of the Court which has already become final is the contrary and there is no need to
discuss again the ruling of the court.

In these cases, Crim. Case Nos. 2008-03-109 to 111 and Crim. Case Nos. 2001-07-482 to 484, the
accused are being charged for having forged the signatures of Rafael and Aurora Granda. In other
words, the issues in both civil action and the criminal eases are intimately intertwined and
interrelated to the extent that the Decision in the civil action will naturally determine the
innocence or guilt of the accused in the criminal actions. There is therefore a prejudicial question.
x x x

x x x

In the civil case, the accused are the defendants in Civil Case No. 2001-09-135. The findings of the
Court that tried the civil action is to the effect that the signatures of Aurora and Rafael Granda in the
three documents covered by the three transactions were not forged. The question is � how can this
criminal prosecution proceed when in fact the signatures of the vendors in the aforementioned three
transactions were found and declared by a competent court as not forged?
x x x

x x x Should there be another litigation on the very same subject matter? The answer is a resounding
NO. The matter must be laid to rest. 37

Petitioner filed a Motion for Reconsideration of the said dismissal, but the same was dismissed by RTC-
Branch 8 in its Resolution dated September 10, 2009.38 Petitioner thereafter appealed to the CA which,
in its Decision dated April 27, 2015, affirmed RTC-Branch 8 and denied the appeal, thus:

WHEREFORE, the Appeal is DENIED. The Resolution dated August 20, 2009 of Branch 8, Regional
Trial Court of Tacloban City, in Criminal Case Nos. 2008-03-109 to 111, against Robert Lastrilla and
Criminal Case Nos. 2001-07-482 to 484, against Camilo Camenforte
is AFFIRMED.chanroblesvirtualawlibrary

SO ORDERED.39

Petitioner and private complainant's Motions for Reconsideration dated May 29, 2015 40 and June 8,
2015,41 respectively were likewise denied in the CA's assailed Resolution dated September 23, 2015.42

Hence this petition.

Petitioner here submits that (1) the CA erred in denying the appeal on the ground of res judicata, and
(2) the criminal cases against the respondents should have proceeded despite the dismissal of the
related civil case.43

With respect to the first error, petitioner argues that the lower courts misapplied the principle of res
judicata and conclusiveness of judgment, since the requisite identities of issues and parties between
the two cases were not met.44 For non-identity of parties, petitioner submits that there was no identity
of parties in the dismissed civil case and the criminal cases since the parties prosecuting both cases
are different, and there is no community of interests between said parties. 45 Particularly, it submits that
it was not party to the dismissed civil case, and that as the real party-in-interest in the criminal cases,
it had a compelling interest in the prosecution of the criminal charges, which interest is absent in the
civil case. It concludes that the CA's dismissal of the criminal cases amounted to a violation of its right
to due process and fair trial, since it was not petitioner which prosecuted the civil case, let alone
presented its evidence therein. It claims that since it was not a party in the civil case, it could not be
bound by the factual findings therein.46 It also argues that res judicata is unavailing between a criminal
action for falsification and a civil action to nullify title. 47

Petitioner further contends that the dismissal of the civil case based on insufficiency of evidence does
not foreclose the prosecution in the criminal cases, based on additional or other evidence which were
not presented in the civil case.48 It added that based on the earlier decision of this Court in the related
case of Lastrilla v. Granda, the Court already observed that based on the evidence, falsification of the
subject deeds was probably committed,49 and petitioner, in representation of the People, must be given
its day in court to prove so.50 It adds that respondents were charged with the commission of three acts:
(1) counterfeiting or forging Sps. Granda's signatures on the subject Deeds, (2) making it appear that
Sps. Granda acknowledged the subject Deeds before respondent Camenforte, as the notary public,
and (3) antedating the subject Deeds.51 Of these three acts, petitioner contends that only the first one
was ruled upon in the civil case, so that the prosecution of the remaining two acts may not be enjoined. 52

Anent the second error, petitioner submits that the dismissal of the criminal cases were contrary to the
Rules of Criminal Procedure, since respondents could no longer invoke res judicata after they have
entered their pleas to the informations which charged them. 53 Petitioner cites Section 9 in relation to
Section 3, Rule 11754 of the Rules of Criminal Procedure, and argues that the enumerated excepted
grounds therein did not mention res judicata as a ground for a motion to quash an information after
pleading thereto.55 It also cites Section 5, Rule III56 of the same Rules in submitting that absolution of
a defendant from civil liability in a civil action does not operate as a bar to a criminal action against the
defendant for the same act or omission which was the subject of the civil action. 57 Finally, petitioner
contends that under Article 3358 of the Civil Code, criminal actions and civil actions proceed
independently of each other, and therefore the criminal cases against respondents should similarly
proceed despite the dismissal of the related civil case. 59

In his Comment60 dated November 23, 2017, respondent Lastrilla counters that the lower courts did not
misapply the principle of res judicata, and that since a competent court in Civil Case No. 2001-09-135
already upheld the due execution of the subject Deeds, including the genuineness of the signatures of
the vendors therein, it necessarily followed that a criminal case for forgery or falsification of the subject
Deeds is already barred.61 He adds that otherwise, the issue of the genuineness of the signatures and
due execution of the subject Deeds would have to be resurrected in the instant criminal cases, which
in turn, would violate the doctrine of immutability of judgment. 62

He also challenges the petitioner's claim that there is no identity of parties between Civil Case No.
2001-09-135 and the instant criminal cases, submitting instead that an application of res judicata only
requires substantial, and not absolute identity of parties, with only a community of interest being
necessary.63 Respondent Lastrilla also claims that there is an identity of issues in Civil Case No. 2001-
09-135 and the instant criminal cases, since the test is merely to ask whether the same evidence would
sustain both actions, or otherwise an identity in the facts essential to the maintenance of the two actions.
Lie asserts that if the same facts or evidence would sustain both, the two actions are considered the
same, and a judgment in the first case would serve as a bar to the other. 64

He also claims that private complainant Rafael should also be found guilty of forum shopping, since he
was a party in the Civil Case No. 2001-09-135, and he is once more a party to the criminal cases
against respondents over the same issues, which showed that he sought the same relief through
various cases.65

For his part, respondent Camenforte, in his Comment66 dated April 3, 2016, echoes respondent
Lastrilla's submission that the principle of res judicata is available in criminal actions, and that the same
was correctly applied by the lower courts in this case.67 He also similarly argues that there was an
identity of parties in Civil Case No. 2001-09-135 and in the instant criminal cases, since all the cases
were instituted to protect the common interests of the heirs of Sps. Granda. 68 He also adds that the
determining issue in all cases is one and the same � the genuineness of the subject deeds.

Finally, petitioner, in its Consolidated Reply69 dated May 31, 2018, maintains that: (1) bar by res
judicata is inapplicable to the criminal cases for falsification against respondents, since the requisition
of the identity of parties and of issues was not met; 70 and (2) the claim of immutability of judgment is
meritless, given that petitioner was not a party in the civil case, and therefore may not be bound by the
findings therein.71

Issues

The threshold issue before the Court is whether Criminal Case Nos. 2008-03-109 to 111 and 2001-07-
482 to 484 are already barred by res judicata.

The Court's Ruling

The Court finds the Petition lacking in merit, and finds that although Criminal Case Nos. 2008-03-109
to 111 and 2001-07-482 to 484 are not barred by res judicata, the innocence of respondents has
nevertheless already been conclusively found in the prejudicial factual finding made by a court of
competent jurisdiction of the genuineness of the signatures in question in Civil Case No. 2001-09-135.
The continued prosecution of the pending criminal cases is therefore barred by operation of the doctrine
of a prejudicial question.

The deciding legal rules around which the present controversy turns are the principle of res judicata,
and the doctrine of the prejudicial question. The Court here resolves that although res judicata does
not lie, a prejudicial question does exist and the pending criminal cases must therefore be dismissed
on this account.

Res judicata does not lie to

bar the prosecution of
Criminal Case Nos. 2008-
03-109 to 111 and 2001-07-
482 to 484

Res judicata literally means "a matter adjudged; a thing judicially acted upon or decided; a thing or
matter settled by judgment."72 It rises from the underlying idea that parties should not to be permitted
to litigate the same issue more than once, and that a right or fact that has already been judicially
determined by a competent court should be conclusive as to the parties. 73 More than being a
technicality, the Court has long pronounced this as a fundamental precept designed to promote just,
fair and speedy justice.74 This doctrine is set forth in Section 47 of Rule 39 of the Rules of Court, which
in its relevant part reads:

Section. 47. Effect of Judgments or Final Orders. � The effect of a judgment or final order rendered
by a court of the Philippines, having jurisdiction to pronounce the judgment or final order, may be as
follows:

xxx

(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as
to any other matter that could have been raised in relation thereto, conclusive between the
parties and their successors in interest by title subsequent to the commencement of the action
or special proceeding, litigating for the same thing and under the same title and in the same
capacity; and

(c) In any other litigation between the same parties or their successors in interest, that only is
deemed to have been adjudged in a former judgment or final order which appears upon its face
to have been so adjudged, or which was actually and necessarily included therein or necessary
thereto.

In Degayo v. Magbanua-Dinglasan,75 the Court elucidated on the concept and appreciation of

conclusiveness of judgment:

Conclusiveness of judgment finds application when a fact or question has been squarely put in issue,
judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction. The fact or
question settled by final judgment or order binds the parties to that action (and persons in privity with
them or their successors-in-interest). and continues to bind them while the judgment or order remains
standing and unreversed by proper authority on a timely motion or petition; the conclusively settled fact
or question furthermore cannot again be litigated in any future or other action between the same parties
or their privies and successors-in-interest, in the same or in any other court of concurrent jurisdiction,
either for the same or for a different cause of action. Thus, only the identities of parties and issues are
required for the operation of the principle of conclusiveness of judgment.

While conclusiveness of judgment does not have the same barring effect as that of a bar by former
judgment that proscribes subsequent actions, the former nonetheless estops the parties from raising in
a later case the issues or points that were raised and controverted, and were determinative of the ruling
in the earlier case. In other words, the dictum laid down in the earlier final judgment or order becomes
conclusive and continues to be binding between the same parties, their privies and successors-in-
interest, as long as the facts on which that judgment was predicated continue to be the facts of the case
or incident before the court in a later case; the binding effect and enforceability of that earlier dictum
can no longer be re-litigated in a later case since the issue has already been resolved and finally laid
to rest in the earlier case.76

Before res judicata can apply, the following requisites must be present: (a) the former judgment must
be final; (b) it must be rendered by a court having jurisdiction over the subject matter and the parties;
(c) it must be a judgment on the merits; and (d) there must be, between the first and second actions,
identity of parties, of subject matter and of cause of action. 77

The Court notes with import that petitioner erroneously argued that respondents' Motion to Quash
should not have been given due course for having been filed after respondents entered their plea, for,
on the contrary, the records show that respondent Camenforte filed a Consolidated Motion to Quash
the Informations on January 30, 2008, and their arraignments were not held until several months after,
or on August 28, 2008 and December 15, 2008.

Nevertheless, after a thoughtful consideration of both parties' submissions on this count, the Court finds
that the doctrine of res judicata may not apply to bar the instant criminal cases against respondents.
The doctrine of res judicata remains inapplicable in the instant cases since there is no identity of parties
and cause of action.

The juxtaposition of the above four requisites to the cases at bar shows that the only contentious
requisite is the last, i.e., identity of parties, subject matter and cause of action. The Court finds that as
correctly argued by petitioner, the last requisite was not complied with, there being no identity of parties
in the civil case and the instant criminal cases.

Respondents are correct in arguing that in appreciating the presence of these requisites, the Court
cautioned against any measure to circumvent the application of the bar by res judicata, and held that
varying the form or action or bringing forward in a second case additional parties or arguments may not
avoid the effects of the principle of res judicata, for as long as the facts remain the same at least where
such new parties or matter could have been impleaded or pleaded in the prior action. 78 However, this
proscription does not apply in the instant facts since the qualifier of the ability of impleading all the
parties in the prior action could not be met. As rightly countered by petitioner, the People is not normally
a party to civil suits, and protects an entirely different prosecutorial interest than that which is involved
in civil actions.

The Court therefore notes that, in this respect, if the parties in the two separate actions are not
completely identical, res judicata may not lie.

However, as aptly raised by respondents, the prejudicial fact pertaining to the genuineness of the
signatures of Sps. Granda in the Deeds of Sale has already been found with finality by the court in Civil
Case No. 2001-09-135, and such a finding constitutes a bar at any renewed attempt at proving their
forgery in the pending criminal cases.

The analogous application of

the doctrine of prejudicial
question conclusively finds
against the guilt of
respondents in Criminal
Case Nos. 2008-03-109 to
111 and 2001-07-482 to 484

The doctrine of prejudicial question finds its roots in the Spanish civil law tradition, where its application
mainly required at least two issues in two different cases, where one issue is cognizable by another
tribunal, and the resolution of such issue is prejudicial to the principal action.79 The doctrine was first
adapted into Philippine jurisprudence in the 1920 case of Berbari v. Concepcion80(Berbari), which
involved a case of estafa, where the Court, although it refrained from applying it to the facts of said
case, nevertheless first defined a prejudicial question in our jurisdiction, thus:

Prejudicial question is understood in law to be that which must precede the criminal action, that which
requires a decision before a final judgment is rendered in the principal action with which said question
is closely connected. Not all previous questions are prejudicial, although all prejudicial questions are
necessarily previous.81

After Berbari carried over to our jurisdiction the doctrine of prejudicial question through the Spanish
Law of Procedure of 1882,82 it has since been appreciated in or applied to a myriad of cases, involving
not only the combination of a civil case and a criminal case, but also those which involved both civil
cases, both criminal cases, a civil case and an administrative case, as well as a criminal case and an
administrative case.83 To be sure, the Rules of Court84 have long defined a prejudicial question as one
which may arise when a civil case and a criminal case are pending, but its pragmatic application in
jurisprudence has evolved the doctrine into a more flexible and varying manner, even when the requisite
criminal and civil cases are not obtained.85 The jurisprudential appreciation of the doctrine of prejudicial
question has so far departed from the technical requirements of the Rules, and has instead steadily
veered towards a less technical application, but one which is evidently "more responsive" 86 to its
substantive purpose.

In the 1949 case of Aleria v. Mendoza,87 the Court held that the civil action holds primacy in the event
of a prejudicial question, to wit:

Furthermore, the rule of preference in favor of a criminal case does not apply when the civil action is a
prejudicial question. x x x For instance, in a criminal case for bigamy, the civil action for annulment of
the second marriage is a prejudicial question. In the instant case, the obligation to pay wages is a
prejudicial question for there can be no extended delay in the payment of such obligation unless the
obligation be first proved.88

However, six years later, in the case of Ocampo v. Tancinco,89 which involved a criminal action for
violation of the Copyright Law on the one hand, and a petition for cancellation of copyrights on the
other, the Court pronounced that the criminal procedure must take primacy over a civil action, and that
the latter must be suspended to first give way to the criminal prosecution in case of the existence of a
prejudicial question, to wit:

The action for cancellation of copyrights brought by the petitioners on the ground of fraud, deceit and
misrepresentation allegedly resorted to by, or imputed to, the respondent Jos� Cochingyan to secure
the issuance of the copyrights is independent from the criminal prosecution for infringement of
copyrights charged against the petitioners and does not constitute and is not a prejudicial action which
must be decided first before the trial of the defendants in the criminal cases may be held, as the
determination of the question raised in the civil action is not necessarily prejudicial. Until cancelled[,]
the copyrights are presumed to have been duly granted and issued. As a general rule, a criminal
case should first be decided; and if the trial or hearing of any case is to be suspended on the
ground that there is a prejudicial question which must first be decided, it is the hearing of the
civil and not the criminal which should be suspended [�] the latter must take precedence over
the former.90

It is worth noting, however, that with the current Rules, as amended, the procedure provides that the
criminal case is the action that must be suspended to give way to the civil case in the event of a
prejudicial question.91

Later, in the case of People v. Aragon92 which involved a petition for annulment as a defense to a
charge of bigamy, the Court made salient the requirement of an issue in one case that is deemed a
logical antecedent of the issues in the other case, to wit:

A decision in such civil action is not essential before the criminal charge can be determined. It is,
therefore, not a prejudicial question. Prejudicial question has been defined to be that which arises
in a case the resolution of which (question) is a logical antecedent of the issue involved in said
case, and the cognizance of which pertains to another tribunal. The prejudicial question must
be determinative of the case before the court; this is its first element. Jurisdiction to try said
question must be lodged in another tribunal; this is the second element. In an action for bigamy, for
example, if the accused claims that the first marriage is null and void, and the right to decide such
validity is vested in another tribunal, the civil action for nullity must first be decided before the action for
bigamy can proceed; hence, the validity of the first marriage is a prejudicial question. 93

This resolution was echoed in the 1960 case of Merced v. Diez,94 which similarly involved an action for
annulment and a bigamy charge.

Similarly, in the case of Quiambao v. Osorio,95 which involved a civil case and an administrative case,
the Court found that although a prejudicial question could technically not be applied, it was a matter of
prudence that the Court apply the concept of a prejudicial question analogously, and hold the second
action in abeyance to await the resolution of the first, to wit:

Faced with these distinct possibilities, the more prudent course for the trial court to have taken is
to hold the ejectment proceedings in abeyance until after a determination of the administrative
case. Indeed, logic and pragmatism, if not jurisprudence, dictate such move. To allow the parties
to undergo trial notwithstanding the possibility of petitioner's right of possession being upheld
in the pending administrative case is to needlessly require not only the parties but the court as
well to expend time, effort and money in what may turn out to be a sheer exercise in
futility. Thus, 1 Am Jur 2d tells us:

The court in which an action is pending may, in the exercise of a sound discretion, upon proper
application for a stay of that action, hold the action in abeyance to abide the outcome of another pending
in another court, especially where the parties and the issues are the same, for there is power inherent
in every court to control the disposition of causes on its dockets with economy of time and effort for
itself, for counsel, and for litigants. Where the rights of parties to the second action cannot be properly
determined until the questions raised in the first action are settled the second action should be stayed.

While this rule is properly applicable to instances involving two (2) court actions, the existence in the
instant case of the same considerations of identity of parties and issues, economy of time and
effort for the court, the counsels and the parties as well as the need to resolve the parties' right
of possession before the ejectment case may be properly determined, justifies the rule's
analogous application to the case at bar.96

Still, in the case of Tamin v. Court of Appeals,97 which involved two civil cases, namely an ejectment
suit on the one hand, and a cadastral proceeding, on the other, the Court had the occasion to delineate
between the technical and the substantive existence of a prejudicial question. There, the Court held
that although, technically, a prejudicial question cannot arise between two civil cases, since the
substantive issue in the cadastral proceedings is shown to be prejudicial to the issue of the propriety of
the ejectment as sought, the Court ruled that a prejudicial question nonetheless existed, viz.:

Considering therefore, the nature and purpose of the cadastral proceedings, the outcome of said
proceedings becomes a prejudicial question which must be addressed in the resolution of the instant
case. x x x

x x x

Technically, a prejudicial question shall not rise in the instant case since the two actions
involved are both civil in nature. However, we have to consider the fact that the cadastral
proceedings will ultimately settle the real owner/s of the disputed parcel of land. In case
respondent Vicente Medina is adjudged the real owner of the parcel of land, then the writ of possession
and writ of demolition would necessarily be null and void. Not only that. The demolition of the
constructions in the parcel of land would prove truly unjust to the private respondents.

Parenthetically, the issuance of the writ of possession and writ of demolition by the petitioner Judge in
the ejectment proceedings was premature. What the petitioner should have done was to stop the
proceedings in the instant case and wait for the final outcome of the cadastral proceedings. 98

Then, under the 2000 Revised Rules of Criminal Procedure, the doctrine of prejudicial question is
conceptualized under Sections 6 and 7, Rule 111 thereof, to wit:

Section 6. Suspension by Reason of Prejudicial Question. � A petition for suspension of the criminal
action based upon the pendency of a prejudicial question in a civil action may be filed in the office of
the prosecutor or the court conducting the preliminary investigation. When the criminal action has been
filed in court for trial, the petition to suspend shall be filed in court for trial, and shall be filed in the same
criminal action at any time before the prosecution rests.
Section 7. Elements of Prejudicial Question. � The elements of a prejudicial question are: (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.

In the 2002 case of Torres v. Garchitorena,99 which is the first to appreciate the prejudicial question
doctrine after the 2000 Revised Rules of Criminal Procedure, the Court held that a prejudicial question
does not exist not only because the criminal action was instituted before the civil action, but also
because the issues and factual findings in the civil case are not determinative of the guilt or innocence
of the accused in the criminal case:

Under the amendment, a prejudicial question is understood in law as that which must precede the
criminal action and which requires a decision before a final judgment can be rendered in the criminal
action with which said question is closely connected. The civil action must be instituted prior to the
institution of the criminal action. In this case, the Information was filed with the Sandiganbayan ahead
of the complaint in Civil Case No. 7160 filed by the State with the RTC in Civil Case No. 7160. Thus,
no prejudicial question exists.

Besides, a final judgment of the RTC in Civil Case No. 7160 declaring the property as foreshore
land and hence, inalienable, is not determinative of the guilt or innocence of the petitioners in
the criminal case. It bears stressing that unless and until declared null and void by a court of
competent jurisdiction in an appropriate action therefor, the titles of SRI over the subject property are
valid. SRI is entitled to the possession of the properties covered by said titles. It cannot be illegally
deprived of its possession of the property by petitioners in the guise of a reclamation until final judgment
is rendered declaring the property covered by said titles as foreshore land. 100

Finally, in the case of Security Bank Corp. v. Victorio,101 the Court held that while technically there can
be no prejudicial question between two civil cases, the court may nevertheless stay one of the
proceedings when the rights of the parties to the second action cannot be determined without a full
determination of the issues raised in the first action. The Court here refused to apply the doctrine of a
prejudicial question as it is foreclosed by the Rules, but nonetheless arrived at the same net effect that
the appreciation of a prejudicial question would have resulted in, thus:

The petitioner harps on the need for the suspension of the proceedings in the SECOND CASE based
on a prejudicial question still to be resolved in the FIRST CASE. But the doctrine of prejudicial question
comes into play generally only in a situation under Section 5, Rule 111 of the Revised Rules of Criminal
Procedure where civil and criminal actions are pending and the issues involved in both cases are similar
or so closely related that an issue must be preemptively resolved in the civil cases before the criminal
action can proceed. There is no prejudicial question to speak of when the two cases are civil in nature.
However, a trial court may stay the proceedings before it in the exercise of its sound discretion:

The court in which an action is pending may, in the exercise of a sound discretion, upon proper
application for a stay of that action, hold the action in abeyance to abide the outcome of another pending
in another court, especially where the parties and the issues are the same, for there is power
inherent in every court to control the disposition of causes (sic) on its dockets with economy
of time and effort for itself, for counsel, and for litigants. Where the rights of parties to the
second action cannot be properly determined until the questions raised in the first action are
settled the second action should be stayed.
The power to stay proceedings is incidental to the power inherent in every court to control the
disposition of the cases on its dockets, considering its time and effort, that of counsel and the
litigants. But if proceedings must be stayed, it must be done in order to avoid multiplicity of suits
and prevent vexatious litigations, conflicting judgments, confusion between litigants and
courts. It bears stressing that whether or not the RTC would suspend the proceedings in the SECOND
CASE is submitted to its sound discretion.102

Given the foregoing, and as applied to the instant controversy, the Court finds that although the facts
of this case involve a criminal action which preceded the institution of the civil action, a prejudicial
question nevertheless exists because a survey of the jurisprudential appreciation and application of the
doctrine of a prejudicial question demonstrably shows that the strict sequence of institution of the two
actions as provided for by Section 7, Rule 111 of the 2000 Revised Rules of Criminal Procedure is
more directory than mandatory, and must give way to the chief litmus test of whether the two actions
involve prejudicial issues and facts that are similar or otherwise intimately related so that a resolution
in one concludes the resolution in the other.

The directory application of the sequence of institution of actions, i.e., the civil case must precede the
criminal action, is supported by the fact that the 2000 Revised Rules of Criminal Procedure are prefaced
by the instruction that it must be liberally construed, and that this procedural requirement must be seen
in light of the more general principle that substantive rights must prevail over procedural rules. As
astutely observed by literature on the framework of the application of the doctrine of prejudicial question
in the Philippines:

The very fact that the Court each and every time considered whether or not the criminal case is
dependent on the civil case or whether or not the civil case is determinative of the guilt of the accused,
before declaring whether or not a prejudicial question exists, indicates that while the Rules may have
been phrased in such strict manner, the substance of the issues involved are more important than
the mere sequence provided for in the Rules.

According to the Rules, the elements of a prejudicial question are that (a) the previously instituted civil
action involves an issue similar or intimately related to the issue raised in a subsequent criminal action,
and (b) the resolution of such issue determines whether or not the criminal action may proceed. It must
be noted that the words "previous" and "subsequent" may be more apparent than the other words, such
as "issues" "similarly[,]" "resolution[,]" and "determines," provided for in the rule. A reading of the
decisions, however, militate against the conclusion that the Court gives less importance to
the determinative factor of the issue in the civil case, than on whether or not the strict sequence
is followed.

Hence, the rule is directory insofar as the strict sequence of the cases is involved, but
is mandatory as to the requirement that the issue in the civil case must be so similar or
intimately related to the issue in the criminal case, so as to determine whether or not the criminal
action may proceed. Consequently, there are instances when the strict sequence may be dispensed
with for as long as the mandatory requirement as to the determinative, similar or intimately related issue
is present.103

With the existence of a prejudicial question appreciated in these cases, 104 the next inevitable query is
whether the court's finding of genuineness of Sps. Granda's signatures on the Deeds of Sale in Civil
Case No. 2001-09-135 is determinative of the alleged guilt of respondents in the instant criminal
actions.

The Court must answer this in the affirmative.

To recall, the court in Civil Case No. 2001-09-135 could not be more categorical in its finding of
genuineness of the signatures of Sps. Granda as they appeared on the Deeds of Sale. The RTC-
Branch 9 of Tacloban City found, viz.:

The only evidence presented by plaintiffs on their claim of forgery of the three (3) questioned Deeds of
Absolute Sale is the testimony of plaintiff Benjamin Granda that the signatures are not those of his
parents because he knows their signatures (pp. 19, 22 & 23, November 14, 2002 TSN). To bolster his
claim, he identified a Deed of Sale purportedly executed by his parents in favor of Juanita Uykim-Yu
(Exhibit "E"). In effect, he was saying that there was a variance in the signatures, though he did not
point out any distinguishing mark, characteristic or discrepancies in and between the alleged genuine
and false documents. This Court is not impressed with the said evidence presented by the plaintiffs in
support of their claim that the three (3) Deeds of Absolute Sale were falsified, hence null and void.

x x x

Failure, therefore, on the part of the plaintiffs to show that the variation of the signature in
Exhibit "E" (if ever there was) with that of the three (3) Deeds of Absolute Sale was due to the
operation of a different personality negates their claim of forgery and cannot overcome the
regularity of the herein questioned documents.

The other cited circumstances, like the fact that Silvina Granda was in a monastery on December 7,
1985, even if proven, does not establish that the herein questioned documents were forged. The same
observation applie[s] to the circumstance that defendant Robert Lastrilla is a subscribing witness to the
said deeds.

The questioned Deeds of Absolute Sale having been acknowledged before the Notary Public enjoy the
presumption of validity [of the] execution. Whoever alleges forgery has the burden of proving the
same. Plaintiffs' bare allegation that said documents were forged has no leg to stand on and
must necessarily fail. Moreover, it has been an unrebutted fact that Aurora was the person who
unilaterally caused the preparation of the documents evidencing the sale of the "Villa Aurora Property"
and the "Royal Property" and the transfer of titles thereof in the names of defendants Uys and that
defendants Uys did not, in any way, have a hand in the preparation of the same documents.

x x x

WFIEREFORE, premises considered, the plaintiffs' complaint for Nullification of Title and Deeds with
Damages against the defendant is hereby ordered dismissed for lack of merit.

SO ORDERED.105

With the above categorical finding that the claim of forgery is baseless, the charge of falsification and
related offenses levelled against respondents in the pending criminal cases must be similarly resolved.

As correctly expounded on by the CA, on the matter of identity of issues:

The genuineness of the deeds of sale, which is the subject of the civil case, is apparently determinative
of the outcome of the forgery case with respect to the same deeds of sale. Notably, when the subject
deeds of sale were found to be genuine, then it necessarily follows that there was no forgery committed
on these documents. The pronouncement of validity of the deeds of sale in the civil case is conclusive
upon the criminal case [�] preventing the court a quo from re-litigating the same issue and then
ending up with a contrary ruling. Since the finding of validity of these subject deeds of sale had already
reached finality with this Court's Resolution dated October 26, 2007 in CA-G.R. CV No. 00990, it would
have been a senseless and futile endeavor for [the] court a quo to continue with the forgery
proceedings. As this Decision has already become final, and no part thereof may be disturbed by any
court, even if to correct a purported error therein. 106

The Court acknowledges petitioner's submission that respondents here were charged with the
commission of three acts: (1) counterfeiting or forging Sps. Granda's signatures on the subject Deeds,
(2) making it appear that Sps. Granda acknowledged the subject Deeds before respondent Camenforte,
as the notary public, and (3) antedating the subject Deeds to make them appear as if they had been
executed at an earlier time, when Sps. Granda were still alive. Petitioner further submits that if the
finding in Civil Case No. 2001-09-135 of genuineness of the signatures of Sps. Granda in the subject
deeds were binding on the parties in the instant criminal cases, said ruling would only be binding insofar
as the first charge is concerned, i.e., counterfeiting or forging of Sps. Granda's signatures.

To the contrary, however, the Court finds that the bifurcation of the offenses fails to refute the central
substantive factual finding that the signatures on the questioned Deeds of Sale were, and had been
finally judicially determined to be, genuine. Stated differently, the Court here discerns that the finding
of genuineness of Sps. Granda's signatures necessarily bleeds into the other factual issues or offenses
as charged, i.e., whether the respondents made it appear that Sps. Granda acknowledged the Deeds
of Sale before respondent Camenforte, and whether those Deeds of Sale were antedated to make them
appear to have been executed when Sps. Granda were still alive.

To be sure, the other two remaining charges are anchored on the chief factual question of whether the
signatures of Sps. Granda on the Deeds of Sale were forged, since such a forgery would necessitate
the misrepresentation with respect to the proper notarization of the subject deeds, as well as the
antedating of the same. Stated differently, if the signatures are not forged, then they were affixed at the
time of the execution or notarization of the Deeds of Sale thereby negating the charge that the
signatures were "antedated."

In other words, the two other acts complained of do not, as they cannot, survive the finding of
genuineness of signatures made by a court of competent jurisdiction in Civil Case No. 2001-09-135
after having gone through the crucible of trial. Therefore, petitioner here must be enjoined from
prosecuting respondents for these acts in the instant criminal cases, since the pivotal issue of forgery
has already been settled with finality by the court in Civil Case No. 2001-09-135.

It is further crucial to remember that RTC-Branch 9, the RTC in Civil Case No. 2001-09-135, already
found that with the claim of forgery unfounded, the Deeds of Sale are considered to have been validly
executed, viz.:

x x x This Court is not impressed with the said evidence presented by the plaintiffs in support of their
claim that the three (3) Deeds of Absolute Sale were falsified, hence null and void.

In the case of Veloso vs. CA. 260 SCRA 593, the Supreme Court had the occasion to rule that:
Mere variance of the signatures cannot be considered as conclusive proof that the same were forged;
forgery cannot be presumed. Forgery should be proved by clear and convincing evidence and whoever
alleges it has the burden of proving the same. Just like the petitioner, witness Atty. Tubig merely pointed
out that his signature was different from that in the Power of Attorney and Deed of Sale. There had
never been an accurate examination of the signature, even that of the petitioner.

To determine forgery, it was held in Cesar vs. Sandiganbayan (G.R. Nos. 54719-50m, 17 Hab 185)
quoting Osbora x x x that:

The process of identification, therefore, must include the determination of the extent, kind and
significance of this resemblance as well as the variation. It then becomes necessary to determine
whether the variation is due to the operation of a different personality or is only the expected and
inevitable variation found in the genuine writing of the same writer. It is also necessary to decide
whether the resemblance is the result of more skillful imitation, or is the habitual and characteristic
resemblance which naturally appears in a genuine writing. When these two questions are correctly
answered, the whole problem of identification is solved.

Failure, therefore, on the part of the plaintiffs to show that the variation of the signature in Exhibit "E" (if
ever there was) with that of the three (3) Deeds of Absolute Sale was due to the operation of a different
personality negates their claim of forgery and cannot overcome the regularity of the herein
questioned documents.107

To be sure, the CA has also laid to rest the question on the genuineness of the Deeds of Sale when it
similarly found for its validity, to wit:

The genuineness of the deeds of sale, which is the subject of the civil case, is apparently
determinative of the outcome of the forgery case with respect to the same deeds of sale.
Notably, when the subject deeds of sale were found to be genuine, then it necessarily follows
that there was no forgery committed on these documents. The pronouncement of validity of the
deeds of sale in the civil case is conclusive upon the criminal case [�] preventing the court a quo from
re-litigating the same issue and then ending up with a contrary ruling. Since the finding of validity of
these subject deeds of sale had already reached finality with this Court's Resolution dated
October 26, 2007 in CA-G.R. CV No. 00990, it would have been a senseless and futile endeavor
for [the] court a quo to continue with the forgery proceedings. As this Decision has already
become final, and no part thereof may be disturbed by any court, even if to correct a purported
error therein.108

These prejudicial pronouncements of RTC-Branch 9, which received the evidence presented before it,
and the CA, after its own factual review of the evidence, necessarily foreclose the prosecution of the
very same issues in the pending criminal cases. These findings on the legal integrity of the questioned
Deeds of Sale already conclude against allegations of fraud with regard to their execution, and the
Court finds no merit in disturbing said findings.

Further on this score, the Court reminds with significance that in order to establish an allegation of
forgery in a civil case, a party forwarding the same must establish so through clear and convincing
proof. The Court quotes its instructive rationale in the case of Heirs of Gregorio v. Court of
Appeals,109 thus:
Basic is the rule of evidence that when the subject of inquiry is the contents of a document, no evidence
is admissible other than the original document itself except in the instances mentioned in Section 3,
Rule 130 of the Revised Rules of Court. Mere photocopies of documents are inadmissible pursuant to
the best evidence rule. This is especially true when the issue is that of forgery.

As a rule, forgery cannot be presumed and must be proved by clear, positive and convincing
evidence and the burden of proof lies on the party alleging forgery. The best evidence of a forged
signature in an instrument is the instrument itself reflecting the alleged forged signature. The fact of
forgery can only be established by a comparison between the alleged forged signature and the
authentic and genuine signature of the person whose signature is theorized upon to have been forged.
Without the original document containing the alleged forged signature, one cannot make a definitive
comparison which would establish forgery. A comparison based on a mere xerox copy or reproduction
of the document under controversy cannot produce reliable results. 110

If such quantum of evidence is not mustered in the civil case, as what happened in RTC-Branch 9 and
the CA, how can one surmise that the exact same allegation may nonetheless be established through
the higher quantum of proof beyond reasonable doubt? Still more and perforce, a clear doubt in this
respect is an insurmountable hurdle that will foreclose a successful prosecution of a criminal case for
forgery. To allow, therefore, a prosecution of such a charge which, in a civil case and by a lower
quantum of proof has conclusively failed, is wasteful, circuitous and far too costly to be condoned.

In the same vein, clear and convincing evidence is similarly required to overcome the due execution
and genuineness that a public document is imbued with. Without such proof, a gaping doubt results in
the criminal prosecution for falsification. Such doubt becomes irremediable when said presumption of
due execution is elevated to the level of a final and conclusive finding of a competent court in a civil
case.

The case of Aznar Brothers Realty Co. v. Court of Appeals,111 illustrates how the Court dovetailed the
importance of proving a claim of falsification in a public document through clear and convincing proof,
otherwise the latter's presumption of genuineness is maintained, to wit:

It is worthy to note that the Extrajudicial Partition with Deed of Absolute Sale is a notarized
document. As such, it has in its favor the presumption of regularity, and it carries the evidentiary
weight conferred upon it with respect to its due execution. It is admissible in evidence without
further proof of authenticity and is entitled to full faith and credit upon its face. He who denies
its due execution has the burden of proving that contrary to the recital in the Acknowledgment
he never appeared before the notary public and acknowledged the deed to be his voluntary
act. It must also be stressed that whoever alleges forgery has the burden of proving the same. Forgery
cannot be presumed but should be proved by clear and convincing evidence. Private
respondents failed to discharge this burden of proof; hence, the presumption in favor of the
questioned deed stands.112

In addition, the requirement of clear and convincing proof in ousting the presumption of genuineness
and due execution of a public document is further echoed in Bernardo v. Court of Appeals,113viz.:

It is a fact that the transaction between private respondent and the spouses Bernardo was reduced into
writing by way of a document denominated "Deed of Sale with Assumption of Mortgage." This
document, admitted as signed by private respondent and his wife, was duly notarized by Notary Public
Pedro B. Binuya and had two instrumental witnesses. Being a notarized document, it had in its favor
the presumption of regularity, and to overcome the same, there must be evidence that is clear,
convincing and more than merely preponderant; otherwise the document should be upheld.

The question that must be addressed, therefore, is: Was the evidence presented by private respondent
against the Deed of Sale with Assumption of Mortgage clear, convincing and more than merely
preponderant? We do not think so.

Far from being clear and convincing, all that private respondent offered by way of evidence was his
and his wife's mere denial that they had intended to sell the subject land. Such bare and
unsubstantiated denial will not suffice to overcome the positive presumption of the due execution of the
subject Deed, being a notarized document. Indeed, when the evidence is conflicting, the public
document must still be upheld.114chanRoblesvirtualLawlibrary

In sum, the prejudicial factual finding of genuineness of Sps. Granda's signatures on the questioned
Deeds of Sale in Civil Case No. 2001-09-135 must operate to bar the prosecution of respondents for
the falsification of the same signatures on the same questioned Deeds of Sale. This is the heart of the
doctrine of a prejudicial question, without the appreciation of which the application of said doctrine may
never come to be.

Finally, petitioner's submission that it must be allowed to present new evidence in order to establish the
allegation of forgery which was already conclusively found as without basis in Civil Case No. 2001-09-
135, is to completely render nugatory the very premise of a prejudicial question, for one, and the value
of finality of judgments, for another.

Chiefly, the doctrine of a prejudicial question serves the following purposes: (i) to avoid multiplicity of
suits; (ii) avoid unnecessary litigation; (iii) avoid conflicting decisions; (iv) safeguard the rights of the
accused; and (v) unclog the courts' dockets.115 Therefore, if petitioner is allowed to effectively relitigate
a point of prejudicial fact already tried and found by another court in a civil case, and which has, in this
case, already attained finality, then the above purposes of the doctrine of a prejudicial question will be
wholly defeated.

To be sure, the Court is not unmindful of the fact that there may have been failures on the discharge of
proof of the plaintiffs in Civil Case No. 2001-09-135. However, the Court cannot turn away from the
pivotal fact that the said civil case already held as unfounded the very same allegation of forgery that
the pending criminal cases seek to prove. What's more, said factual finding in the Civil Case No. 2001-
09-135 had already obtained finality, when the decision of the RTC therein became final with the CA's
Resolution dated October 26, 2007 in CA-G.R. CV No. 00990.

Unfortunately for petitioner's cause, therefore, the Court finds no outweighing benefit in overturning the
finality of RTC-Branch 9's decision in Civil Case No. 2001-09-135, the core finding of which predisposes
the Court now to dismiss the pending criminal cases.

WHEREFORE, the Petition is hereby DENIED. Accordingly, the Decision dated April 27, 2015 and
Resolution dated September 23, 2015 of the Court of Appeals Former Eighteenth Division in CA-G.R.
CEB-CR No. 01796 are hereby AFFIRMED with MODIFICATION, in that the Resolution of the
Regional Trial Court of Tacloban City in Criminal Case Nos. 2008-03-109 to 111 against respondent
Robert Lastrilla, and Criminal Case Nos. 2001-07-482 to 484 against respondent Camilo Camenforte
are AFFIRMED by virtue of the existence of a prejudicial question.chanroblesvirtualawlibrary

SO ORDERED.
ROLANDO LANDICHO vs. HON. LORENZO RELOVA and PEOPLE OF THE PHILIPPINES; GR No.
L-22579; February 23, 1968

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-22579 February 23, 1968

ROLANDO LANDICHO, petitioner,

vs.
HON. LORENZO RELOVA, in his capacity as Judge of the Court of First Instance of Batangas,
Branch I, and PEOPLE OF THE PHILIPPINES, respondents.

Jose W. Diokno for petitioner.

Office of the Solicitor General for respondents.

FERNANDO, J.:

In this petition for certiorari and prohibition with preliminary injunction, the question before the
Court is whether or not the existence of a civil suit for the annulment of marriage at the instance of the
second wife against petitioner, with the latter in turn filing a third party complaint against the first spouse
for the annulment of the first marriage, constitutes a prejudicial question in a pending suit for bigamy
against him. Respondent, Judge Relova answered in the negative. We sustain him.

The pertinent facts as set forth in the petition follow. On February 27, 1963, petitioner was charged
before the Court of First Instance of Batangas, Branch I, presided over by respondent Judge, with the
offense, of bigamy. It was alleged in the information that petitioner "being then lawfully married to Elvira
Makatangay, which marriage has not been legally dissolved, did then and there wilfully, unlawfully and
feloniously contract a second marriage with Fe Lourdes Pasia." On March 15, 1963, an action was filed
before the Court of First Instance ofBatangas, likewise presided plaintiff respondent Judge Fe Lourdes
Pasia, seeking to declare her marriage to petitioner as null and void ab initio because of the alleged
use of force, threats and intimidation allegedly employed by petitioner and because of its allegedly
bigamous character. On June 15, 1963, petitioner as defendant in said case, filed a third-party
complaint, against the third-party defendant Elvira Makatangay, the first spouse, praying that his
marriage with the said third-party defendant be declared null and void, on the ground that by means of
threats, force and intimidation, she compelled him to appear and contract marriage with her before the
Justice of the Peace of Makati, Rizal.

Thereafter, on October 7, 1963, petitioner moved to suspend the hearing of the criminal case
pending the decision on the question of the validity of the two marriages involved in the pending civil
suit. Respondent Judge on November 19, 1963 denied the motion for lack of merit. Then came a motion
for reconsideration to set aside the above order, which was likewise denied on March 2, 1964. Hence
this petition, filed on March 13, 1964.

In a resolution of this Court of March 17, 1964, respondent Judge was required to answer within
ten (10) days, with a preliminary injunction being issued to restrain him from further proceeding with the
prosecution of the bigamy case. In the meanwhile, before the answer was filed there was an amended
petition for certiorari, the amendment consisting solely in the inclusion of the People of the Philippines
as another respondent. This Court admitted such amended petition in a resolution of April 3, 1964.

Then came the answer to the amended petition on May 14 of that year where the statement of
facts as above detailed was admitted, with the qualifications that the bigamy charge was filed upon the
complaint of the first spouse Elvira Makatangay. It alleged as one of its special and affirmative defenses
that the mere fact that "there are actions to annul the marriages entered into by the accused in a bigamy
case does not mean that 'prejudicial questions are automatically raised in said civil actions as to warrant
the suspension of the criminal case for bigamy." 1 The answer stressed that even on the assumption
that the first marriage was null and void on the ground alleged by petitioner, the fact would not be
material to the outcome of the criminal case. It continued, referring to Viada, that "parties to the marriage
should not be permitted to judge for themselves its nullity, for this must be submitted to the judgment
of competent courts and only when the nullity of a marriage is so declared can it be held as void, and
so long as there is no such declaration the presumption is that the marriage exists. Therefore, according
to Viada, he who contracts a second marriage before the judicial declaration of nullity of the first
marriage incurs the penalty provided for in this Article. . . ." 2

This defense is in accordance with the principle implicit in authoritative decisions of this Court.
In Merced v. Diez, 3 what was in issue was the validity of the second marriage, "which must be
determined before hand in the civil action before the criminal action can proceed." According to the
opinion of Justice Labrador: "We have a situation where the issue of the validity of the second marriage
can be determined or must first be determined in the civil action before the criminal action for bigamy
can be prosecuted. The question of the validity of the second marriage is, therefore, a prejudicial
question because determination of the validity of the second marriage is determinable in the civil action
and must precede the criminal action for bigamy." It was the conclusion of this Court then that for
petitioner Merced to be found guilty of bigamy, the second marriage which he contracted "must first be
declared valid." Its validity having been questioned in the civil action, there must be a decision in such
a case "before the prosecution for bigamy can proceed."

To the same effect is the doctrine announced in Zapanta v. Mendoza. 4 As explained in the
opinion of Justice Dizon: "We have heretofore defined a prejudicial question as that which arises in a
case, the resolution of which is a logical antecedent of the issue involved therein, and the cognizance
of which pertains to another tribunal. . . . The prejudicial question — we further said — must be
determinative of the case before the court, and jurisdiction to try the same must be lodged in another
court. . . . These requisites are present in the case at bar. Should the question for annulment of the
second marriage pending in the Court of First Instance of Pampanga prosper on the ground that,
according to the evidence, petitioner's consent thereto was obtained by means of duress, force and
intimidation, it is obvious that his act was involuntary and can not be the basis of his conviction for the
crime of bigamy with which he was charged in the Court of First Instance of Bulacan. Thus the issue
involved in the action for the annulment of the second marriage is determinative of petitioner's guilt or
innocence of the crime of bigamy. . . ."

The situation in this case is markedly different. At the time the petitioner was indicted for bigamy
on February 27, 1963, the fact that two marriage ceremonies had been contracted appeared to be
indisputable. Then on March 15, 1963, it was the second spouse, not petitioner who filed an action for
nullity on the ground of force, threats and intimidation. It was sometime later, on June 15, 1963, to be
precise, when petitioner, as defendant in the civil action, filed a third-party complaint against the first
spouse alleging that his marriage with her should be declared null and void on the ground of force,
threats and intimidation. As was correctly stressed in the answer of respondent Judge relying on Viada,
parties to a marriage should not be permitted to judge for themselves its nullity, only competent courts
having such authority. Prior to such declaration of nullity, the validity of the first marriage is beyond
question. A party who contracts a second marriage then assumes the risk of being prosecuted for
bigamy.

Such was the situation of petitioner. There is no occasion to indulge in the probability that the
third-party complaint against the first wife brought almost five months after the prosecution for bigamy
was started could have been inspired by the thought that he could thus give color to a defense based
on an alleged prejudicial question. The above judicial decisions as well as the opinion of Viada preclude
a finding that respondent Judge abused, much less gravely abused, his discretion in failing to suspend
the hearing as sought by petitioner.

WHEREFORE, the petition for certiorari is denied and the writ of preliminary injunction issued
dissolved. With costs.1äwphï1.ñët

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro and
Angeles, JJ., concur.
MERARDO L. ZAPANTA vs. THE HON. AGUSTIN P. MONTESA, ETC., ET AL. G.R. No. L-14534;
February 28, 1962

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-14534 February 28, 1962

MERARDO L. ZAPANTA, petitioner,

vs.
THE HON. AGUSTIN P. MONTESA, ETC., ET AL., respondents.

Pedro M. Santos and Jorge C. Salonga for petitioner.

Office of the Solicitor General, Romulo L. Chua and Dewey G. Soriano for respondents.

DIZON, J.:

This is a petition for prohibition filed by Merardo L. Zapanta against the Hon. Agustin P. Montesa, Judge
of the Court of First Instance of Bulacan, Fernando A. Cruz, Provincial Fiscal of Bulacan, and Olimpia
A. Yco, to enjoin the former from proceeding with the trial of Criminal Case No. 3405 pending the final
determination of Civil Case No. 1446 of the Court of First Instance of Pampanga.

Upon complaint filed by respondent Olimpia A. Yco on May 20, 1958, an information for Bigamy was
filed by respondent Provincial Fiscal against petitioner in the Court of First Instance of Bulacan (Criminal
Case No. 3405), alleging that the latter, having previously married one Estrella Guarin, and without said
marriage having been dissolved, contracted a second marriage with said complainant.

On June 16, 1958, petitioner filed in the Court of First Instance of Pampanga Civil Case No. 1446
against respondent Olimpia A. Yco for the annulment of their marriage on the ground of duress, force
and intimidation. On the 30th of the same month respondent Yco, as defendant in said case, filed a
motion to dismiss the complaint upon the ground that it stated no cause of action, but the same was
denied on July 7 of the same year. 1äwphï1.ñët

On September 2, 1958, petitioner, in turn, filed a motion in Criminal Case No. 3405 to suspend
proceedings therein, on the ground that the determination of the issue involved in Civil Case No. 1446
of the Court of First Instance of Pampanga was a prejudicial question. Respondent judge denied the
motion on September 20, 1958 as well as petitioner's motion for reconsideration, and ordered his
arraignment. After entering a plea of not guilty, petitioner filed the present action.

We have heretofore defined a prejudicial question as that which arises in a case, the resolution of which
is a logical antecedent of the issue involved therein, and the cognizance of which pertains to another
tribunal (People vs. Aragon, G.R. No. L-5930, February 17, 1954). The prejudicial question — we
further said — must be determinative of the case before the court, and jurisdiction to try the same must
be lodged in another court (People vs. Aragon, supra). These requisites are present in the case at bar.
Should the question for annulment of the second marriage pending in the Court of First Instance of
Pampanga prosper on the ground that, according to the evidence, petitioner's consent thereto was
obtained by means of duress, force and intimidation, it is obvious that his act was involuntary and can
not be the basis of his conviction for the crime of bigamy with which he was charged in the Court of
First Instance of Bulacan. Thus, the issue involved in the action for the annulment of the second
marriage is determinative of petitioner's guilt or innocence of the crime of bigamy. On the other hand,
there can be no question that the annulment of petitioner's marriage with respondent Yco on the
grounds relied upon in the complaint filed in the Court of First Instance of Pampanga is within the
jurisdiction of said court.

In the Aragon case already mentioned (supra) we held that if the defendant in a case for bigamy claims
that the first marriage is void and the right to decide such validity is vested in another court, the civil
action for annulment must first be decided before the action for bigamy can proceed. There is no reason
not to apply the same rule when the contention of the accused is that the second marriage is void on
the ground that he entered into it because of duress, force and intimidation.
IMELDA MARBELLA-BOBIS v. ISAGANI D. BOBIS G.R. No. 138509; July 31, 2000

Republic of the Philippines

SUPREME COURT

FIRST DIVISION

G.R. No. 138509 July 31, 2000

IMELDA MARBELLA-BOBIS, petitioner,

vs.
ISAGANI D. BOBIS, respondent.

YNARES-SANTIAGO, J.:

On October 21, 1985, respondent contracted a first marriage with one Maria Dulce B. Javier. Without
said marriage having been annulled, nullified or terminated, the same respondent contracted a second
marriage with petitioner Imelda Marbella-Bobis on January 25, 1996 and allegedly a third marriage with
a certain Julia Sally Hernandez. Based on petitioner's complaint-affidavit, an information for bigamy
was filed against respondent on February 25, 1998, which was docketed as Criminal Case No. Q98-
75611 of the Regional Trial Court, Branch 226, Quezon City. Sometime thereafter, respondent initiated
a civil action for the judicial declaration of absolute nullity of his first marriage on the ground that it was
celebrated without a marriage license. Respondent then filed a motion to suspend the proceedings in
the criminal case for bigamy invoking the pending civil case for nullity of the first marriage as a
prejudicial question to the criminal case. The trial judge granted the motion to suspend the criminal
case in an Order dated December 29, 1998.1 Petitioner filed a motion for reconsideration, but the same
was denied.

Hence, this petition for review on certiorari. Petitioner argues that respondent should have first obtained
a judicial declaration of nullity of his first marriage before entering into the second marriage, inasmuch
as the alleged prejudicial question justifying suspension of the bigamy case is no longer a legal truism
pursuant to Article 40 of the Family Code.2

The issue to be resolved in this petition is whether the subsequent filing of a civil action for declaration
of nullity of a previous marriage constitutes a prejudicial question to a criminal case for bigamy.

A prejudicial question is one which arises in a case the resolution of which is a logical antecedent of
the issue involved therein.3 It is a question 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.4 It must appear not
only that the civil case involves facts upon which the criminal action is based, but also that the resolution
of the issues raised in the civil action would necessarily be determinative of the criminal
case.5 Consequently, the defense must involve an issue similar or intimately related to the same issue
raised in the criminal action and its resolution determinative of whether or not the latter action may
proceed.6 Its two essential elements are:7

(a) the civil action involves an issue similar or intimately related to the issue raised in the criminal
action; and

(b) the resolution of such issue determines whether or not the criminal action may proceed.
A prejudicial question does not conclusively resolve the guilt or innocence of the accused but simply
tests 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 a crime have been adequately alleged in the information, considering
that the prosecution has not yet presented a single evidence on the indictment or may not yet have
rested its case. A challenge of 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.

Article 40 of the Family Code, which was effective at the time of celebration of the second marriage,
requires a prior judicial declaration of nullity of a previous marriage before a party may remarry. The
clear implication of this is that it is not for the parties, particularly the accused, to determine the validity
or invalidity of the marriage.8 Whether or not the first marriage was void for lack of a license is a matter
of defense because there is still no judicial declaration of its nullity at the time the second marriage was
contracted. It should be remembered that bigamy can successfully be prosecuted provided all its
elements concur – two of which are a previous marriage and a subsequent marriage which would have
been valid had it not been for the existence at the material time of the first marriage. 9

In the case at bar, respondent's clear intent is to obtain a judicial declaration of nullity of his first
marriage and thereafter to invoke that very same judgment to prevent his prosecution for bigamy. He
cannot have his cake and eat it too. Otherwise, all that an adventurous bigamist has to do is to disregard
Article 40 of the Family Code, contract a subsequent marriage and escape a bigamy charge by simply
claiming that the first marriage is void and that the subsequent marriage is equally void for lack of a
prior judicial declaration of nullity of the first. A party may even enter into a marriage aware of the
absence of a requisite - usually the marriage license - and thereafter contract a subsequent marriage
without obtaining a declaration of nullity of the first on the assumption that the first marriage is void.
Such scenario would render nugatory the provisions on bigamy. As succinctly held in Landicho v.
Relova:10

(P)arties to a marriage should not be permitted to judge for themselves its nullity, only competent
courts having such authority. Prior to such declaration of nullity, the validity of the first marriage
is beyond question. A party who contracts a second marriage then assumes the risk of being
prosecuted for bigamy.

Respondent alleges that the first marriage in the case before us was void for lack of a marriage license.
Petitioner, on the other hand, argues that her marriage to respondent was exempt from the requirement
of a marriage license. More specifically, petitioner claims that prior to their marriage, they had already
attained the age of majority and had been living together as husband and wife for at least five
years.11 The issue in this case is limited to the existence of a prejudicial question, and we are not called
upon to resolve the validity of the first marriage. Be that as it may, suffice it to state that the Civil Code,
under which the first marriage was celebrated, provides that "every intendment of law or fact leans
toward the validity of marriage, the indissolubility of the marriage bonds."12 [] Hence, parties should not
be permitted to judge for themselves the nullity of their marriage, for the same must be submitted to
the determination of competent courts. Only when the nullity of the marriage is so declared can it be
held as void, and so long as there is no such declaration the presumption is that the marriage
exists.13 No matter how obvious, manifest or patent the absence of an element is, the intervention of
the courts must always be resorted to. That is why Article 40 of the Family Code requires a "final
judgment," which only the courts can render. Thus, as ruled in Landicho v. Relova,14 he who contracts
a second marriage before the judicial declaration of nullity of the first marriage assumes the risk of
being prosecuted for bigamy, and in such a case the criminal case may not be suspended on the ground
of the pendency of a civil case for declaration of nullity. In a recent case for concubinage, we held that
the pendency of a civil case for declaration of nullity of marriage is not a prejudicial question. 15 This
ruling applies here by analogy since both crimes presuppose the subsistence of a marriage.
Ignorance of the existence of Article 40 of the Family Code cannot even be successfully invoked as an
excuse.16 The contracting of a marriage knowing that the requirements of the law have not been
complied with or that the marriage is in disregard of a legal impediment is an act penalized by the
Revised Penal Code.17 The legality of a marriage is a matter of law and every person is presumed to
know the law. As respondent did not obtain the judicial declaration of nullity when he entered into the
second marriage, why should he be allowed to belatedly obtain that judicial declaration in order to delay
his criminal prosecution and subsequently defeat it by his own disobedience of the law? If he wants to
raise the nullity of the previous marriage, he can do it as a matter of defense when he presents his
evidence during the trial proper in the criminal case.

The burden of proof to show the dissolution of the first marriage before the second marriage was
contracted rests upon the defense,18 but that is a matter that can be raised in the trial of the bigamy
case. In the meantime, it should be stressed that not every defense raised in the civil action may be
used as a prejudicial question to obtain the suspension of the criminal action. The lower court, therefore,
erred in suspending the criminal case for bigamy. Moreover, when respondent was indicted for bigamy,
the fact that he entered into two marriage ceremonies appeared indubitable. It was only after he was
sued by petitioner for bigamy that he thought of seeking a judicial declaration of nullity of his first
marriage. The obvious intent, therefore, is that respondent merely resorted to the civil action as a
potential prejudicial question for the purpose of frustrating or delaying his criminal prosecution. As has
been discussed above, this cannot be done.1awphi1

In the light of Article 40 of the Family Code, respondent, without first having obtained the judicial
declaration of nullity of the first marriage, can not be said to have validly entered into the second
marriage. Per current jurisprudence, a marriage though void still needs a judicial declaration of such
fact before any party can marry again; otherwise the second marriage will also be void.19 The reason is
that, without a judicial declaration of its nullity, the first marriage is presumed to be subsisting. In the
case at bar, respondent was for all legal intents and purposes regarded as a married man at the time
he contracted his second marriage with petitioner.20 Against this legal backdrop, any decision in the
civil action for nullity would not erase the fact that respondent entered into a second marriage during
the subsistence of a first marriage. Thus, a decision in the civil case is not essential to the determination
of the criminal charge. It is, therefore, not a prejudicial question. As stated above, respondent cannot
be permitted to use his own malfeasance to defeat the criminal action against him. 21

WHEREFORE, the petition is GRANTED. The order dated December 29, 1998 of the Regional Trial
Court, Branch 226 of Quezon City is REVERSED and SET ASIDE and the trial court is ordered to
IMMEDIATELY proceed with Criminal Case No. Q98-75611.

SO ORDERED.
ABUNDIO MERCED v. HON. CLEMENTINO V. DIEZ, ETC. ET AL G.R. No. L-15315. August 26, 1960

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-15315 August 26, 1960

ABUNDIO MERCED, petitioner,

vs.
HON. CLEMENTINO V. DIEZ, ETC. ET AL., respondents.

Pedro A. Bandoquillo for petitioner.

Fulvio Pelaez for respondents.

LABRADOR, J.:

This is a petition for a writ of certiorari with prohibition to prohibit the judge presiding the Court of First
Instance of Negros Oriental, Hon. Clementino V. Diez, from proceeding further in the Criminal Case
No. V-6520, entitled People of the Philippines vs. Abundio Merced until after final termination of Civil
Case No. R-5387, for the annulment of the marriage of petitioner Abundio Merced with Elizabeth
Ceasar, also pending in same court.

The record disclose the following proceedings in the court a quo: On January 30, 1958, Abundio Merced
filed a complaint for annulment of his second marriage with Elizabeth Ceasar. The complaint is
docketed as Civil Case No. R-5387. The complaint alleges that defendant Elizabeth Ceasar and her
relatives forced, threatened and intimated him into signing an affidavit to the effect that he and
defendant had been living together as husband and wife for over five years, which is not true; that this
affidavit was used by defendant in securing their marriage of exceptional character, without the need
for marriage license; that he was again forced, threatened and intimated by defendant and her relatives
into entering the marriage with her on August 21, 1957 before Municipal Judge Medardo A. Conde; that
immediately after the celebration of the marriage plaintiff left defendant and never lived with her; that
the defendant wrote him on October 29, 1957, admitting that he was forced into the marriage and asking
him to go to Cebu to have the marriage annulled, but he refused to go for fear he may be forced into
living with the defendant. Merced prays for annulment of the marriage and for moral damages in the
amount of P2,000. On March 3, 1958, Elizabeth Ceasar filed her answer to the complaint. In her
answer, she denies the material allegations of the complaint and avers as affirmative defenses that
neither she nor her relatives know of plaintiff's previous marriage to Eufrocina Tan; that sometime in
July, 1957, plaintiff asked her mother to intercede on their behalf to secure her father's consent to their
marriage as plaintiff could not concentrate on his studies without marrying Elizabeth, but that her mother
advised him to finish his studies first; that sometime in April, 1957, defendant learned that plaintiff was
engaged to marry Eufrocina Tan, but plaintiff, upon being confronted with such discovery, showed her
a letter which he wrote breaking off his engagement with Tan. As a counterclaim defendant asks
P50,000 as moral damages for the deceit, fraud and insidious machinations committed upon her by
plaintiff.

On February 19, 1958, after had filed Civil Case No. R-5387 defendant Elizabeth Ceasar filed a criminal
complaint for bigamy 39 3 against plaintiff Abundio Merced with the office of the City Fiscal of Cebu.
On April 7, 1958 the Assistant City Fiscal filed Criminal Case No. V-6520, charging Merced with bigamy
for the second marriage. The information reads.

The undersigned Assistant Fiscal of City of Cebu accuses Abundio Merced of the crime of
bigamy, committed as follows:

That on or about the 21st day of August, 1957, in the City of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, the said accused Abundio Merced, being previously united
in lawful marriage with Eufrocina Tan, and without the said marriage having been legally
dissolved did then and there wilfully unlawfully, feloniously contract a second marriage with
Elizabeth Ceasar.

Contrary to Article 349 of the Revised Penal Code. (Annex "2".)

Abundio Merced filed a motion to hold to trial of said criminal case in abeyance until final termination of
Civil Case No. R- 5387. Reason alleged for the motion is that the Civil Action involves facts which if
proved will determine the innocence of the accused. After an opposition thereto was filed by the
assistant provincial fiscal, the court granted the motion. However, upon motion for reconsideration filed
by the fiscal, the order was set aside and another entered denying the motion of accused for suspension
of the criminal proceedings, which last order is the one sough herein to be annulled. The court held in
its last order that inasmuch as by virtue of the decision of the Supreme Court in the case of People vs.
Mendoza, 95 Phil., 50 Off. Gaz. [10], 4767, judicial declaration of nullity of a second and bigamous
marriage is not necessary, there is no need in this case to decide the nullity of the second marriage, or
to determine and declare the existence of the grounds for annulling the same, but that said grounds
should be used as a defense in the criminal action. A motion to reconsider the second order of the court
having been denied, petition herein was filed.

When the petition for certiorari with prohibition was filed, the petitioner secured from this Court a writ of
preliminary injunction to enjoin respondent judge from proceeding further in the criminal case.

Before this Court the sole question raised is whether an action to annul the second marriage is a
prejudicial question in a prosecution for bigamy.

The definition and the elements of a prejudicial question have been set forth by us as follows:

Prejudicial question has been defined to be that which arises in a case, the resolution of which
(question) is a logical antecedent of the issue involved in said case, and the cognizance of which
pertains to another Tribunal (Cuestion prejudicial, es 3o 3 la que surge en un pleito o causa cuya
resolucion sean antecedente logico de la cuestion-objeto del pleito o causa y cuyo conocimiento
corresponda a los Tribunales de otro orden o jurisdiccion. — Enciclopedia Juridica Española, p.
228). The prejudicial question must be determinative of the case before the court; this is its first
element. Jurisdiction to try said question must be lodged in another tribunal; this is the second
element. In an action for bigamy for example, if the accused claims that the first marriage is null
and void and the right to decide such validity is vested in another tribunal, the civil action for
nullity must be first decided before the action for bigamy can proceed, hence, the validity of the
first marriage is a prejudicial question. (People vs. Aragon, 94 Phil., 357; 50 Off. Gaz., No. 10,
4863).

In order that a person may be held guilty of the crime of bigamy, the second and subsequent marriage
must have all the essential elements of a valid marriage, were it not for the subsistence of the first
marriage. This was the ruling of this Court in People vs. Dumpo, 62 Phil., 246, where we said:
 It is an essential element of the crime of bigamy that the alleged second marriage, having all the
essential requisites, would be valid were it not for the subsistence of the first marriage. It
appearing that the marriage alleged to have been contracted by the accused with Sabdapal, her
former marriage with Hassan being undissolved, can not be considered as such, according to
Mohameddan rites, there is no justification to hold her guilty of the crime charged in the
information. (People vs. Dumpo, 62 Phil. 246).

One of the essential elements of a valid marriage is that the consent thereto of the contracting parties
must be freely and voluntarily given. Without the element of consent a marriage would be illegal and
void. (Section 29, Act No. 3613, otherwise known as the Marriage Law.) But the question of invalidity
can not ordinarily be decided in the criminal action for bigamy but in a civil action for annulment. Since
the validity of the second marriage, subject of the action for bigamy, cannot be determined in the
criminal case and since prosecution for bigamy does not lie unless the elements of the second marriage
appear to exist, it is necessary that a decision in a civil action to the effect that the second marriage
contains all the essentials of a marriage must first be secured.

We have, therefore, in the case at bar, the issue of the validity of the second marriage, which must be
determined before hand in the civil action, before the criminal action can proceed. We have a situation
where the issue of the validity of the second marriage can be determined or must be determined in the
civil action before the criminal action for bigamy can be prosecuted. The question of the validity of the
second marriage is, therefore, a prejudicial question, because determination of the validity of the
second marriage is determinable in the civil action and must precede the criminal action for bigamy.

Spanish jurisprudence, from which the principle of prejudicial question has been taken, requires that
the essential element determinative of the criminal action must be cognizable by another court. This
requirement of a different court is demanded in Spanish jurisprudence because Spanish courts are
divided according to their jurisdictions, some courts being exclusively of civil jurisdiction, others of
criminal jurisdiction. In the Philippines, where our courts are vested with both civil and criminal
jurisdiction, the principle of prejudicial question is to be applied even if there is only one court before
which the civil action and the criminal action are to be litigated. But in this case the court when exercising
its jurisdiction over the civil action for the annulment of marriage is considered as a court distinct and
different from itself when trying the criminal action for bigamy.

Our conclusion that the determination of the validity of the marriage in the civil action for annulment is
a prejudicial question, insofar as the criminal action for bigamy is concerned, is supported by Mr. Justice
Moran in his dissenting opinion in De Leon vs. Mabanag, 70 Phil., 207 thus:

La regla general es que cuando hay una cuestion civil y otra criminal sobre un mismo delito u
ofensa, la segunda debe verse antes que la primera, por la razon de que las formas de un juicio
criminal son las mas a proposito para la averiguacion de un delito, y no las de un juicio civil.
Esta regla tiene, sin embargo, una excepcion, y es la que se refiere a una cueston civil
prejudicial. Una cuestion civil es de caracter prejudicial y debe resolverse antes que una
cuestion criminal, cuando versa sonbre un hecho distinto y separado del delito, pero tan
intimamente ligado a el que determina la culpabilidad o inocencia del acusado. Por ejemplo,
una accion criminal por bigamia.

The majority decision in said case of De Leon vs. Mabanag also sustains the theory that when a civil
action is pending in court, in which a validity of a document claimed to be false and fictitious is in issue,
the fiscal may not prosecute the person who allegedly executed the false document because the issue
of the validity of the instrument is sub judice and the prosecuting officer should be ordered to suspend
the criminal action until the prejudicial question has been finally determined. Thus the Court said"
 Hablando en terminos generales la facultad del Fiscal y su deber perseguir los delitos no deben
ser controlados ni coartados por los tribunales; pero no hay duda que esa facultad puede ser
regulada para que no se abuse de ella. Cuando un miembro del Ministerio Fiscal se desvia de
la ley y entorpece la recta administracion de justicia procesando a una persona por hechos
constituvos de delito que se encuentran sub-judice y de los cuales se propone una cuestion
prejudicial administrativa, es deber de los tribunales llamarle la atencion y obligarle que
suspenda toda accion criminal hasta que la cuestion prejudicial administrativa se haya decidido
finalmente. (De Leon vs. Mabanag, 70 Phil., 207.)

The case of People vs. Mendoza, supra, upon which the trial court and the respondents rely, presents
a different sets of facts from the case at bar. So is the ruling therein as contained in the syllabus. In the
case of People vs. Mendoza, Mendoza was charged with and convicted of bigamy for a marriage with
one Carmencita Panlilio, contracted in August, 1949. Mendoza was married for the first time in 1946
with Josefa de Asis; then married for the second time with Olga Lema; and then married for the third
time to Panlilio in 1949. On February 2, 1943, Josefa de Asis died. The court citing the provisions of
Article 29 of the marriage law, held that the second marriage of the appellant Mendoza with Lema was
operation of law null and void, because at the time of the second marriage in 1941, appellant's former
wife Josefa de Asis was still living. This marriage of appellant with Lema being null and void at the time
the appellant contracted the said marriage, the impediment of the second marriage did not exist. Hence
the appellant was acquitted of bigamy for the 1949 marriage because his previous marriage with Lema
in 1941, by operation of law, was void ab initio.

In the case at bar, in order that the petitioner be held guilty of the crime of bigamy, the marriage which
she contracted for the second time with Elizabeth Ceasar, must first be declared valid. But its validity
has been questioned in the civil action. This civil action must be decided before the prosecution for
bigamy can proceed.

For the foregoing considerations, the petition for the issuance of a writ of certiorari and prohibition is
hereby granted. The order of the court denying the petition of the herein petitioner to prohibit the Fiscal
from prosecuting the case for bigamy, criminal case no. V-6520, entitled People vs. Abundio Merced,
is hereby set aside and the preliminary injunction issued by this court to that effect is hereby made
permanent. So Ordered.