In 1992, ABS-CBN Broadcasting Corporation, through its vice president Charo Santos-Concio, requested

Viva Production, Inc. to allow ABS-CBN to air at least 14 films produced by Viva. Pursuant to this request,
a meeting was held between Vivas representative (Vicente Del Rosario) and ABS-CBNs Eugenio Lopez
(General Manager) and Santos-Concio was held on April 2, 1992. During the meeting Del Rosario
proposed a film package which will allow ABS-CBN to air 104 Viva films for P60 million. Later, Santos-
Concio, in a letter to Del Rosario, proposed a counterproposal of 53 films (including the 14 films initially
requested) for P35 million. Del Rosario presented the counter offer to Vivas Board of Directors but the
Board rejected the counter offer. Several negotiations were subsequently made but on April 29, 1992,
Viva made an agreement with Republic Broadcasting Corporation (referred to as RBS or GMA 7) which
gave exclusive rights to RBS to air 104 Viva films including the 14 films initially requested by ABS-CBN.
ABS-CBN now filed a complaint for specific performance against Viva as it alleged that there is already a
perfected contract between Viva and ABS-CBN in the April 2, 1992 meeting. Lopez testified that Del
Rosario agreed to the counterproposal and he (Lopez) even put the agreement in a napkin which was
signed and given to Del Rosario. ABS-CBN also filed an injunction against RBS to enjoin the latter from
airing the films. The injunction was granted. RBS now filed a countersuit with a prayer for moral
damages as it claimed that its reputation was debased when they failed to air the shows that they
promised to their viewers. RBS relied on the ruling in People vs Manero and Mambulao Lumber vs PNB
which states that a corporation may recover moral damages if it has a good reputation that is debased,
resulting in social humiliation. The trial court ruled in favor of Viva and RBS. The Court of Appeals
affirmed the trial court.
ISSUE:
1. Whether or not a contract was perfected in the April 2, 1992 meeting between the
representatives of the two corporations.
2. Whether or not a corporation, like RBS, is entitled to an award of moral damages upon grounds of
debased reputation.
HELD:
1. No. There is no proof that a contract was perfected in the said meeting. Lopez testimony about the
contract being written in a napkin is not corroborated because the napkin was never produced in court.
Further, there is no meeting of the minds because Del Rosarios offer was of 104 films for P60 million
was not accepted. And that the alleged counter-offer made by Lopez on the same day was not also
accepted because theres no proof of such. The counter offer can only be deemed to have been made
days after the April 2 meeting when Santos-Concio sent a letter to Del Rosario containing the counter-
offer. Regardless, there was no showing that Del Rosario accepted. But even if he did accept, such
acceptance will not bloom into a perfected contract because Del Rosario has no authority to do so.
As a rule, corporate powers, such as the power; to enter into contracts; are exercised by the Board of
Directors. But this power may be delegated to a corporate committee, a corporate officer or corporate
manager. Such a delegation must be clear and specific. In the case at bar, there was no such delegation
to Del Rosario. The fact that he has to present the counteroffer to the Board of Directors of Viva is proof
that the contract must be accepted first by the Vivas Board. Hence, even if Del Rosario accepted the
counter-offer, it did not result to a contract because it will not bind Viva sans authorization.
2. No. The award of moral damages cannot be granted in favor of a corporation because, being an
artificial person and having existence only in legal contemplation, it has no feelings, no emotions, no
senses, It cannot, therefore, experience physical suffering and mental anguish, which call be
experienced only by one having a nervous system. No moral damages can be awarded to a juridical
person. The statement in the case of People vs Manero and Mambulao Lumber vs PNB is a mere obiter
dictum hence it is not binding as a jurisprudence.