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Art. 1724. The contractor who undertakes to build a structure or any other work for a stipulated
price, in conformity with plans and specifications agreed upon with the land-owner, can neither
withdraw from the contract nor demand an increase in the price on account of the higher cost of
labor or materials, save when there has been a change in the plans and specifications, provided:

(1) Such change has been authorized by the proprietor in writing; and

(2) The additional price to be paid to the contractor has been determined in writing by
both parties. (1593a)

Title XVII. - EXTRA-CONTRACTUAL OBLIGATIONS

CHAPTER 1
QUASI-CONTRACTS

Art. 2142. Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-
contract to the end that no one shall be unjustly enriched or benefited at the expense of another.
(n)

SECTION 2. - Solutio Indebiti

Art. 2154. If something is received when there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises. (1895)

SECTION 3. - Other Quasi-Contracts

Art. 2164. When, without the knowledge of the person obliged to give support, it is given by a
stranger, the latter shall have a right to claim the same from the former, unless it appears that he
gave it out of piety and without intention of being repaid. (1894a)

CHAPTER 2
QUASI-DELICTS

Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence,
is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and is governed by the provisions
of this Chapter. (1902a)

===============================================================================

SECOND DIVISION

G.R. No. 189516, June 08, 2016

EDNA MABUGAY-OTAMIAS, JEFFREN M. OTAMIAS AND MINOR JEMWEL M. OTAMIAS,


REPRESENTED BY THEIR MOTHER EDNA MABUGAY-OTAMIAS, Petitioners, v. REPUBLIC OF THE
2

PHILIPPINES, REPRESENTED BY COL. VIRGILIO O. DOMINGO, IN HIS CAPACITY AS THE


COMMANDING OFFICER OF THE PENSION AND GRATUITY MANAGEMENT CENTER (PGMC) OF THE
ARMED FORCES OF THE PHILIPPINES, Respondent.

DECISION

LEONEN, J.:

A writ of execution lies against the pension benefits of a retired officer of the Armed Forces of the
Philippines, which is the subject of a deed of assignment drawn by him granting support to his wife and five
(5) children. The benefit of exemption from execution of pension benefits is a statutory right that may be
waived, especially in order to comply with a husband's duty to provide support under Article XV of the 1987
Constitution and the Family Code.

Petitioner Edna Mabugay-Otamias (Edna) and retired Colonel Francisco B. Otamias (Colonel Otamias) were
married on June 16, 1978 and had five (5) children.1 ChanRob les Virtualawl ibra ry

On September 2000, Edna and Colonel Otamias separated due to his alleged infidelity.2 Their children
remained with Edna.3 ChanRoblesVirt ualawli bra ry

On August 2002, Edna filed a Complaint-Affidavit against Colonel Otamias before the Provost Marshall
Division of the Armed Forces of the Philippines.4 Edna demanded monthly support equivalent to 75% of
Colonel Otamias' retirement benefits.5 Colonel Otamias executed an Affidavit, stating: chanRob lesvi rtual Lawl ibra ry

That sometime in August or September 2002, I was summoned at the Office of the Provost Marshal,
Philippine Army, in connection with a complaint affidavit submitted to said Office by my wife Mrs. Edna M.
Otamias signifying her intention 75% of my retirement benefits from the AFP;

That at this point, I can only commit 50% of my retirement benefits to be pro-rated among my wife and five
(5) children;

That in order to implement this compromise, I am willing to enter into Agreement with my wife covering the
same;

That I am executing this affidavit to attest to the truth of the foregoing facts and whatever legal purpose it
may serve.6 cralawred

On February 26, 2003, Colonel Otamias executed a Deed of Assignment where he waived 50% of his salary
and pension benefits in favor of Edna and their children.7 The Deed of Assignment was considered by the
parties as a compromise agreement.8 It stated: chanRoblesvi rtua lLawl ibra ry

This Assignment, made and executed unto this 26th day of February 2003 at Fort Bonifacio, Makati City, by
the undersigned LTC Francisco B. Otamias, 0-0-111045 (INP) PA, of legal age, married and presently
residing at Dama De Noche St., Pembo, Makati City.

WITNESSETH

WHEREAS, the undersigned affiant is the legal husband of EDNA M. OTAMIAS and the father of Julie Ann,
Jonathan, Jennifer, Jeffren and Jemwel all residing at Patag, Cagayan de Oro City;

WHEREAS, the undersigned will be retiring from the military service and expects to receive retirement
benefits from the Armed Forces of the Philippines;

WHEREAS, the undersigned had expressed his willingness to give a share in his retirement benefits to my
wife and five (5) abovenamed children,

NOW, THEREFORE, for and in consideration of the foregoing premises, the undersigned hereby stipulated
the following:

1. That the undersigned will give to my legal wife and five (5) children FIFTY PERCENT (50%) of my
retirement benefits to be pro rated among them.
3

2. That a separate check(s) be issued and to be drawn and encash [sic] in the name of the legal wife and
five (5) children pro-rating the fifty (50%) percent of my retirement benefits.

IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of February 2003 at Fort Bonifacio,
Makati City.9 cralawred

Colonel Otamias retired on April 1, 2003.10 ChanRobles Vi rt ualawlib ra ry

The agreement was honored until January 6, 2006.11 Edna alleged that "the A[rmed] F[orces] [of the]
Philippines] suddenly decided not to honor the agreement"12 between Colonel Otamias and his legitimate
family.

In a letter13 dated April 3, 2006, the Armed Forces of the Philippines Pension and Gratuity Management
Center (AFP PGMC) informed Edna that a court order was required for the AFP PGMC to recognize the Deed
of Assignment.14 ChanRoblesVi rtua lawlib rary

In another letter15 dated April 17, 2006, the AFP PGMC reiterated that it could not act on Edna's request to
receive a portion of Colonel Otamias' pension "unless ordered by [the] appropriate court."16 ChanRoblesVirt ualawli bra ry

Heeding the advice of the AFP PGMC, Edna, on behalf of herself and Jeffren M. Otamias and Jemwel M.
Otamias (Edna, et al.), filed before the Regional Trial Court of Cagayan de Oro, Misamis Oriental an action
for support, docketed as F.C. Civil Case No. 2006-039.17 ChanRoblesVirt ualawli bra ry

The trial court's Sheriff tried to serve summons on Colonel Otamias several times, to no avail.18Substituted
service was resorted to.19 Colonel Otamias was subsequently declared in default for failure to file a
responsive pleading despite order of the trial court.20 ChanRoble sVirtualawl ibra ry

The trial court ruled in favor of Edna, et al. and ordered the automatic deduction of the amount of support
from the monthly pension of Colonel Otamias.21 ChanRoblesVi rtua lawlib rary

The dispositive portion of the trial court's Decision stated: chanRob lesvi rtual Lawl ibra ry

ALL THE FOREGOING CONSIDERED, and in consonance with the legal obligation of the defendant to the
plaintiffs, the Armed Forces of the Philippines, through its Finance Center and/or appropriate Finance Officer
thereof, is thereby ordered to release to Edna Mabugay Otamias and minor Jemwel M. Otamias, herein
represented by his mother Edna, their fifty (50%) per cent share of each of the monthly pension due to
Colonel Francisco B. Otamias, AFP PA (Retired).

Defendant Francisco Otamias is also ordered to pay plaintiff Edna M. Otamias, fifty (50%) per cent of
whatever retirement benefits he has already received from the Armed Forces of the Philippines AND the
arrears in support, effective January 2006 up to the time plaintiff receives her share direct from the Finance
Center of the Armed Forces of the Philippines.

IT IS SO ORDERED.22 cralawred

The Armed Forces of the Philippines, through the Office of the Judge Advocate General, filed a
Manifestation/Opposition23 to the Decision of the trial court, but it was not given due course due to its late
filing.24
Cha nRobles Vi rtua lawlib rary

Edna, et al., through counsel, filed a Motion for Issuance of Writ of Execution25 dated February 22, 2008.
The trial court granted the Motion, and a writ of execution was issued by the trial court on April 10,
2008.26 ChanRobles Vi rtua lawlib rary

The Armed Forces of the Philippines Finance Center (AFP Finance Center), tlirough the Office of the Judge
Advocate General, filed a Motion to Quash27 the writ of execution and argued that the AFP Finance Center's
duty to disburse benefits is ministerial. It releases benefits only upon the AFP PGMC's approval.28 ChanRobles Virtualawl ibra ry

The trial court denied the Motion to Quash and held that: chanRoble svirtual Lawlib ra ry

Under the law and existing jurisprudence, the "right to support" is practically equivalent to the "right to life."
The "right to life" always takes precedence over "property rights." The "right to support/life" is also a
substantive right which always takes precedence over technicalities/procedural rules. It being so, technical
rules must yield to substantive justice. Besides, this Court's Decision dated February 27, 2007 has long
acquired finality, and as such, is ripe for enforcement/execution.

THE FOREGOING CONSIDERED, the instant Motion is hereby DENIED.29 cralawred


4

The AFP PGMC moved for reconsideration of the order denying the Motion to Quash,30 but the Motion was
also denied by the trial court in the Order31 dated August 6, 2008.

A Notice of Garnishment was issued by the trial court on July 15, 2008 and was received by the AFP PGMC
on September 9, 2008.32 ChanRobles Virtualawl ibra ry

The AFP PGMC filed before the Court of Appeals a Petition for Certiorari and Prohibition.33 ChanRobles Virtualawl ibra ry

The Court of Appeals granted34 the Petition for Certiorari and Prohibition and partially nullified the trial
court's Decision insofar as it directed the automatic deduction of support from the pension benefits of
Colonel Otamias.

The Court of Appeals discussed that Section 3135 of Presidential Decree No. 1638, otherwise known as the
AFP Military Personnel Retirement and Separation Decree of 1979, "provides for the exemption of the
monthly pension of retired military personnel from execution and attachment[,]"36 while Rule 39, Section 13
of the Rules of Court provides: chanRob lesvi rtual Lawli bra ry

SEC. 13. Property exempt from execution. Except as otherwise expressly provided by law, the following
property, and no other, shall be exempt from execution:

....

(1) The right to receive legal support, or money or property obtained as such support, or any pension or
gratuity from the Government[.] cralawre d

The Court of Appeals also cited Pacific Products, Inc. vs. Ong:37
[M]oneys sought to be garnished, as long as they remain in the hands of the disbursing officer of the
Government, belong to the latter, although the defendant in garnishment may be entitled to a specific
portion thereof. And still another reason which covers both of the foregoing is that every consideration of
public policy forbids it.38 cra lawred

In addition, the AFP PGMC was not impleaded as a party in the action for support; thus, it is not bound by
the Decision.39ChanRobles Vi rtua lawlib rary

The dispositive portion of the Court of Appeals Decision reads: chanRoble svirtual Lawli bra ry

WHEREFORE, the petition is GRANTED. The assailed Decision of the Regional Trial Court, Branch 19,
Cagayan de Oro City dated February 27, 2007 in Civil Case No. 2006-039 is PARTIALLY NULLIFIED in so
far as it directs the Armed Forces of the Philippines Finance Center to automatically deduct the financial
support in favor of private respondents, Edna Otamias and her children Jeffren and Jemwel Otamias, from
the pension benefits of Francisco Otamias, a retired military officer. The Order dated June 10, 2008, Order
dated August 6, 2008 and Writ of Execution dated April 10, 2008, all issued by the court a quoare
likewise SET ASIDE. Perforce, let a writ of permanent injunction issue enjoining the implementation of the
assailed Writ of Execution dated April 10, 2008 and the corresponding Notice of Garnishment dated July 15,
2008. No pronouncement as to costs.

SO ORDERED.40 (Emphasis in the original) c ralaw red

Edna, et al. moved for reconsideration, but the Motion was denied by the Court of Appeals.41 ChanRobles Vi rtua lawlib rary

Edna, et al. filed before this Court a Petition for Review on Certiorari42 on November 11, 2009. In the
Resolution43 dated January 20, 2010, this Court required respondent to comment.

In the Resolution44 dated August 4, 2010, this Court noted the Comment filed by the Office of the Solicitor
General and required Edna, et al. to file a reply.45 ChanRob les Virtualawl ibra ry

A Reply46 was filed on September 27, 2010.

Edna, et al. argue that the Deed of Assignment Colonel Otamias executed Is valid and legal.47 ChanRoble sVirtualawli bra ry

They claim that Section 31 of Presidential Decree No. 163848 "does not include support";49 hence, the
retirement benefits of Colonel Otamias can be executed upon.

Edna, et al. also argue that the Court of Appeals erred in granting respondent's Petition because it
effectively rendered the Deed of Assignment of no force and effect.50 On the other hand, the trial court's
Decision implements the Deed of Assignment and Edna, et al.'s right to support.51 ChanRobles Vi rtualawl ibra ry
5

Further, the AFP PGMC had already recognized the validity of the agreement and had made payments to
them until it suddenly stopped payment.52 After Edna, et al. obtained a court order, the AFP PGMC still
refused to honor the Deed of Assignment.53 ChanRoblesVi rtua lawlib rary

The Armed Forces of the Philippines, through the Office of the Solicitor General, argues that it was not a
party to the case filed by Edna, et al.54 Thus, "it cannot be compelled to release part of the monthly pension
benefits of retired Colonel Otamias in favor of [Edna, et al]."55 ChanRoblesVirtualawl ibra ry

The Office of the Solicitor General avers that the AFP PGMC never submitted itself to the jurisdiction of the
trial court.56 It was not a party to the case as the trial court never acquired jurisdiction over the AFP
PGMC.57 ChanRoblesVirtualawl ibra ry

The Office of the Solicitor General also argues that Section 31 of Presidential Decree No. 1638 and Rule 39,
Section 13(1) of the Rules of Court support the Court of Appeals Decision that Colonel Otamias' pension
benefits are exempt from execution.58 ChanRobles Vi rtua lawlib rary

Section 31 of Presidential Decree No. 1638 "does not deprive the survivor/s of a retired or separated officer
or enlisted man of their right to support."59 Rather, "[w]hat is prohibited is for respondent [AFP PGMC] to
segregate a portion of the pension benefit in favor of the retiree's family while still in the hands of the
A[rmed] F[orces] [of the] Philippines]."60 ChanRoble sVirt ualawli bra ry

Thus, the AFP PGMC "cannot be compelled to directly give or issue a check in favor of [Edna, et al.] out of
the pension gratuity of Col. Otamias."61 ChanRoblesVirt ualawli bra ry

In their Reply,62 Edna, et al. argue that the Armed Forces of the Philippines should not be allowed to
question the legal recourse they took because it was an officer of the Armed Forces of the Philippines who
had advised them to file an action for support.63 ChanRoblesVirtualawl ibra ry

They argue that the phrase "while in the active service" in Section 31 of Presidential Decree No. 1638 refers
to the "time when the retired officer incurred his accountabilities in favor of a private creditor[,]"64who is a
third person. The phrase also "serves as a timeline designed to separate the debts incurred by the retired
officer after his retirement from those which he incurred prior thereto."65 ChanRoble sVirtualawl ibra ry

Further, the accountabilities referred to in Section 31 of Presidential Decree No. 1638 refer to debts or loans,
not to support.66 ChanRoblesVirt ualawli bra ry

The issues for resolution are:

First, whether the Court of Appeals erred in ruling that the AFP Finance Center cannot be directed to
automatically deduct the amount of support needed by the legitimate family of Colonel Otamias; and

Second, whether Colonel Otamias' pension benefits can be executed upon for the financial support of his
legitimate family.

The Petition is granted.

Article 6 of the Civil Code provides: cha nRoblesv irt ual Lawlib rary

Article 6. Rights may be waived, unless the waiver is contrary to law, public order, public policy, morals or
good customs, or prejudicial to a third person with a right recognized by law. cra lawred

The concept of waiver has been defined by this Court as: chanRoble svirtual Lawli bra ry

a voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage,
benefit, claim or privilege, which except for such waiver the party would have enjoyed; the voluntary
abandonment or surrender, by a capable person, of a right known by him to exist, with the intent that such
right shall be surrendered and such person forever deprived of its benefit; or such conduct as warrants an
inference of the relinquishment of such right; or the intentional doing of an act inconsistent with claiming
it.67
cra lawred

In determining whether a statutory right can be waived, this Court is guided by the following
pronouncement: chanRoblesv irtual Lawlib rary

[T]he doctrine of waiver extends to rights and privileges of any character, and, since the word 'waiver'
covers every conceivable right, it is the general rule that a person may waive any matter which affects his
6

property, and any alienable right or privilege of which he is the owner or which belongs to him or to which
he is legally entitled, whether secured by contract, conferred with statute, or guaranteed by
constitution, provided such rights and privileges rest in the individual, are intended for his sole
benefit, do not infringe on the rights of others, and further provided the waiver of the right or
privilege is not forbidden by law, and does not contravene public policy; and the principle is
recognized that everyone has a right to waive, and agree to waive, the advantage of a law or rule made
solely for the benefit and protection of the individual in his private capacity, if it can be dispensed with and
relinquished without infringing on any public right, and without detriment to the community at
large[.]68 (Emphasis in the original) cralaw red

When Colonel Otamias executed the Deed of Assignment, he effectively waived his right to claim that his
retirement benefits are exempt from execution. The right to receive retirement benefits belongs to Colonel
Otamias. His decision to waive a portion of his retirement benefits does not infringe on the right of third
persons, but even protects the right of his family to receive support.

In addition, the Deed of Assignment should be considered as the law between the parties, and its provisions
should be respected in the absence of allegations that Colonel Otamias was coerced or defrauded in
executing it. The general rule is that a contract is the law between parties and parties are free to stipulate
terms and conditions that are not contrary to law, morals, good customs, public order, or public policy.69 ChanRob les Virtualawl ibra ry

The Deed of Assignment executed by Colonel Otamias was not contrary to law; it was in accordance with the
provisions on support in the Family Code. Hence, there was no reason for the AFP PGMC not to recognize its
validity.

Further, this Court notes that the AFP PGMC granted the request for support of the wives of other retired
military personnel in a similar situation as that of petitioner in this case. Attached to the Petition are the
affidavits of the wives of retired members of the military, who have received a portion of their husbands'
pensions.70ChanRobles Vi rtua lawlib rary

One affidavit stated: chanRoblesvirtual Lawli bra ry

4. That when I consulted and appeared before the Office of PGMC, I was instructed to submit a Special
Power of Authority from my husband so they can release part of his pension to me;

5. That my husband signed the Special Power of Attorney at the PGMC ceding 50% of his pension to
me; the SPA form was given to us by the PGMC and the same was signed by my husband at the
PGMC;. . .

....

7. That the amount was deposited directly to my account by the PGMC- Finance Center AFP out of the
pension of my husband;

8. That only the Special Power of Attorney was required by the PGMC in order for them to segregate
my share of my husband's pension and deposit the same to my account[.]71

The other affidavit stated: chanRoblesvirtual La wlibra ry

8. That my husband signed the Special Power of Attorney at the PGMC ceding 50% of his pension to
me; the SPA form was given to us by the PGMC and the same was signed by my husband at the
PGMC[.]72

In addition, the AFP PGMC's website informs the public of the following procedure: cha nRoblesvi rt ual Lawlib rary

Tanong: My husband-retiree cut-off my allotment. How can I have it restored?


Sagot: Pension benefits are separate properties of the retiree and can not [sic] be subject of a Ocurt [sic]
Order for execution nor can they be assigned to any third party (Sec 31, PD 1638, as amended). However, a
valid Special Power of Attorney (SPA) by the retiree himself empowering the AFP Finance Center to deduct
certain amount from his lumpsum [sic] or pension pay as the case maybe, as a rule, is a valid waiver of
rights which can be effectively implemented by the AFP F[inance] C[enter].73 cralawre d

Clearly, the AFP PGMC allows deductions from a retiree's pension for as long as the retiree executes a
Special Power of Attorney authorizing the AFP PGMC to deduct a certain amount for the benefit of the
7

retiree's beneficiary.

It is curious why Colonel Otamias was allowed to execute a Deed of Assignment by the administering officer
when, in the first place, the AFP PGMC's recognized procedure was to execute a Special Power of Attorney,
which would have been the easier remedy for Colonel Otamias' family.

Instead, Colonel Otamias' family was forced to incur litigation expenses just to be able to receive the
financial support that Colonel Otamias was willing to give to Edna, et al.

II

Section 31 of Presidential Decree No. 1638 provides: chanRob lesvi rtua lLawl ibra ry

Section 31. The benefits authorized under this Decree, except as provided herein, shall not be subject to
attachment, garnishment, levy, execution or any tax whatsoever; neither shall they be assigned, ceded, or
conveyed to any third person: Provided, That if a retired or separated officer or enlisted man who is entitled
to any benefit under this Decree has unsettled money and/or property accountabilities incurred while in the
active service, not more than fifty per centum of the pension gratuity or other payment due such officer or
enlisted man or his survivors under this Decree may be withheld and be applied to settle such
accountabilities.c ralaw red

Under Section 31, Colonel Otamias' retirement benefits are exempt from execution. Retirement benefits are
exempt from execution so as to ensure that the retiree has enough funds to support himself and his family.

On the other hand, the right to receive support is provided under the Family Code. Article 194 of the Family
Code defines support as follows: chanRoble svirtual Lawlib ra ry

Art. 194. Support comprises everything indispensable for sustenance, dwelling, clothing, medical
attendance, education and transportation, in keeping with the financial capacity of the family.

The education of the person entitled to be supported referred to in the preceding paragraph shall include his
schooling or training for some profession, trade or vocation, even beyond the age of majority.
Transportation shall include expenses in going to and from school, or to and from place of work. cralawred

The provisions of the Family Code also state who are obliged to give support, thus: cha nRoblesvi rt u alLawli bra ry

Art. 195. Subject to the provisions of the succeeding articles, the following are obliged to support each
other to the whole extent set forth in the preceding article:

(1) The spouses;

(2) Legitimate ascendants and descendants;

(3) Parents and their legitimate children and the legitimate and illegitimate children of the latter;

(4) Parents and their illegitimate children and the legitimate and illegitimate children of the latter; and

(5) Legitimate brothers and sisters, whether of the full or half- blood.

Art. 196. Brothers and sisters not legitimately related, whether of the full or half-blood, are likewise bound
to support each other to the full extent set forth in Article 194 except only when the need for support of the
brother or sister, being of age, is due to a cause imputable to the claimant's fault or negligence.

Art. 197. For the support of legitimate ascendants; descendants, whether legitimate or illegitimate; and
brothers and sisters, whether legitimately or illegitimately related, only the separate property of the person
obliged to give support shall be answerable provided that in case the obligor has no separate property, the
absolute community or the conjugal partnership, if financially capable, shall advance the support, which
shall be deducted from the share of the spouses obliged upon the liquidation of the absolute community or
of the conjugal partnership[.] cralaw red

The provisions of Rule 39 of the Rules of Court that are applicable to this case are in apparent conflict with
each other. Section 4 provides that judgments in actions for support are immediately executory. On the
other hand, Section 13(1) provides that the right to receive pension from government is exempt from
execution, thus: chanRoblesvi rtua lLawl ibra ry

RULE 39

EXECUTION, SATISFACTION, AND EFFECT OF JUDGMENTS


8

....

SEC. 4. Judgments not stayed by appeal. — Judgments in actions for injunction, receivership, accounting
and support, and such other judgments as are now or may hereafter be declared to be immediately
executory, shall be enforceable after their rendition and shall not, be stayed by an appeal taken therefrom,
unless otherwise ordered by the trial court. On appeal therefrom, the appellate court in its discretion may
make an order suspending, modifying, restoring or granting the injunction, receivership, accounting, or
award of support.

The stay of execution shall be upon such terms as to bond or otherwise as may be considered proper for the
security or protection of the rights of the adverse party.

....

SEC. 13. Property exempt from execution. — Except as otherwise expressly provided by law, the following
property, and no other, shall be exempt from execution:

....

(1) The right to receive legal support, or money or property obtained as such support, or any pension or
gratuity from the Government;

....

But no article or species of property mentioned in this section shall be exempt from execution issued upon a
judgment recovered for its price or upon a judgment of foreclosure of a mortgage thereon. (Emphasis
supplied)cra lawred

Based on the Family Code, Colonel Otamias is obliged to give support to his family, petitioners in this case.
However, he retired in 2003, and his sole source of income is his pension. Judgments in actions for support
are immediately executory, yet under Section 31 of Presidential Decree No. 1638, his pension cannot be
executed upon.

However, considering that Colonel Otamias has waived a portion of his retirement benefits through his Deed
of Assignment, resolution on the conflict between the civil code provisions on support and Section 31 of
Presidential Decree No. 1638 should be resolved in a more appropriate case.

III

Republic v. Yahon74 is an analogous case because it involved the grant of support to the spouse of a retired
member of the Armed Forces of the Philippines.

In Republic v. Yahon, Daisy R. Yahon filed a Petition for the Issuance of Protection Order under Republic Act
No. 9262.75 She alleged that she did not have any source of income because her husband made her resign
from her job.76 The trial court issued a temporary restraining order, a portion of which stated:
chanRoblesvi rtua lLawl ibra ry

To insure that petitioner [Daisy R. Yahon] can receive a fair share of respondent's retirement and
other benefits, the following agencies thru their heads are directed to WITHHOLD any
retirement, pension [,] and other benefits of respondent, S/SGT. CHARLES A. YAHON, a member of
the Armed Forces of the Philippines assigned at 4ID, Camp Evangelista, Patag, Cagayan de Oro City until
further orders from the court:chanRoble svirtual Lawlib ra ry

1. Commanding General/Officer of the Finance Center of the Armed Forces of the Philippines, Camp Emilio
Aguinaldo, Quezon City;

2. The Management of RSBS, Camp Emilio Aguinaldo, Quezon City;

3. The Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City.77(Emphasis in the original) c ralaw red

The trial court subsequently granted Daisy's Petition and issued a permanent protection order78 and held: chanRob lesvi rtual Lawl ibra ry

Pursuant to the order of the court dated February 6, 2007, respondent, S/Sgt. Charles A. Yahon is directed
to give it to petitioner 50% of whatever retirement benefits and other claims that may be due or released to
him from the government and the said share of petitioner shall be automatically deducted from respondent's
benefits and claims and be given directly to the petitioner, Daisy R. Yahon.
9

Let copy of this decision be sent to the Commanding General/Officer of Finance Center of the Armed Forces
of the Philippines, Camp Emilio Aguinaldo, Quezon City; the Management of RSBS, Camp Emilio Aguinaldo,
Quezon City and the Regional Manager of PAG-IBIG, Mortola St., Cagayan de Oro City for their guidance and
strict compliance.79 cra lawred

In that case, the AFP Finance Center filed before the trial court a Manifestation and Motion stating that "it
was making a limited and special appearance"80 and argued that the trial court did not acquire jurisdiction
over the Armed Forces of the Philippines. Hence, the Armed Forces of the Philippines is not bound by the
trial court's ruling.81 Cha nRobles Vi rtua lawlib rary

The Armed Forces of the Philippines also cited Pacific Products, where this Court ruled that: chanRoblesvi rtua lLawl ibra ry

A rule, which has never been seriously questioned, is that money in the hands of public officers, although it
may be due government employees, is not liable to the creditors of these employees in the process of
garnishment. One reason is, that the State, by virtue of its sovereignty may not be sued in its own courts
except by express authorization by the Legislature, and to subject its officers to garnishment would be to
permit indirectly what is prohibited directly. Another reason is that moneys sought to be garnished, as long
as they remain in the hands of the disbursing officer of the Government, belong to the latter, although the
defendant in garnishment may be entitled to a specific portion thereof. And still another reason which covers
both of the foregoing is that every consideration of public policy forbids it.82 (Citations omitted) cra lawred

This Court in Republic v. Yahon denied the Petition and discussed that because Republic Act No. 9262 is the
later enactment, its provisions should prevail,83 thus: chanRoble svirtual Lawli bra ry

We hold that Section 8(g) of R.A. No. 9262, being a later enactment, should be construed as laying down an
exception to the general rule above stated that retirement benefits are exempt from execution. The law
itself declares that the court shall order the withholding of a percentage of the income or salary of the
respondent by the employer, which shall be automatically remitted directly to the woman "[n]otwithstanding
other laws to the contrary"84 (Emphasis in the original) c ralawred

IV

The 1987 Constitution gives much importance to the family as the basic unit of society, such that Article
XV85 is devoted to it.

The passage of the Family Code further implemented Article XV of the Constitution. This Court has
recognized the importance of granting support to minor children, provided that the filiation of the child is
proven. In this case, the filiation of Jeffren M. Otamias and Jemwel M. Otamias was admitted by Colonel
Otamias in the Deed of Assignment.86 ChanRobles Virtualawl ibra ry

Even before the passage of the Family Code, this Court has given primary consideration to the right of a
child to receive support. In Samson v. Yatco,87 a petition for support was dismissed with prejudice by the
trial court on the ground that the minor asking for support was not present in court during trial. An appeal
was filed, but it was dismissed for having been filed out of time. This Court relaxed the rules of procedure
and held that "[i]f the order of dismissal with prejudice of the petition for support were to stand, the
petitioners would be deprived of their right to present and nature support."88 ChanRoblesVi rtua lawlib rary

In Gan v. Reyes,89 Augustus Caezar R. Gan (Gan) questioned the trial court's decision requiring him to give
support and claimed that that he was not the father of the minor seeking support. He also argued that he
was not given his day in court. This Court held that Gan's arguments were meant to delay the execution of
the judgment, and that in any case, Gan himself filed a Motion for Leave to Deposit in Court Support
Pendente Lite:chanRoble svirtual Lawlib ra ry

In all cases involving a child, his interest and welfare are always the paramount concerns. There may be
instances where, in view of the poverty of the child, it would be a travesty of justice to refuse him support
until the decision of the trial court attains finality while time continues to slip away. An excerpt from the
early case of De Leon v. Soriano is relevant, thus: chanRoblesvi rtua lLawl ib rary

The money and property adjudged for support and education should and must be given presently and
without delay because if it had to wait the final judgment, the children may in the meantime have suffered
because of lack of food or have missed and lost years in school because of lack of funds. One cannot delay
the payment of such funds for support and education for the reason that if paid long afterwards, however
much the accumulated amount, its payment cannot cure the evil and repair the damage caused. The
children with such belated payment for support and education cannot act as gluttons and eat voraciously
and unwisely, afterwards, to make up for the years of hunger and starvation. Neither may they enrol in
several classes and schools and take up numerous subjects all at once to make up for the years they missed
in school, due to non-payment of the funds when needed.90 cralaw red

V
10

The non-inclusion of the AFP PGMC or the AFP Finance Center in the action for support was proper,
considering that both the AFP PGMC and the AFP Finance Center are not the persons obliged to give support
to Edna, et al. Thus, it was not a real party-in-interest.91 Nor was the AFP PGMC a necessary party because
complete relief could be obtained even without impleading the AFP PGMC.92 ChanRoblesVi rtua lawlib rary

WHEREFORE, the Petition is GRANTED. The Court of Appeals Decision dated May 22, 2009 and Resolution
dated August 11, 2009 in CA-G.R. SP No. 02555-MIN are REVERSED and SET ASIDE. The Regional Trial
Court Decision dated February 27, 2007 in F.C. Civil Case No. 2006-039 is REINSTATED.

SO ORDERED.
=====================================================================================

FIRST DIVISION

January 20, 2016

G.R. No. 171303

ELIZABETH L. DIAZ, Petitioner,


vs.
GEORGINA R. EN CANTO, ERNESTO G. TABUJARA, GEMINO H. ABAD and UNIVERSITY OF
THE PHILIPPINES, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

This is a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Court, as amended,
which seeks to reverse and set aside the April 28, 2005 Decision1 and January 20, 2006
Resolution2 of the Court of Appeals in CA-G.R. CV No. 55165,3 which reversed the April 17, 1996
Decision4 and September 1 7, 1996 Order5 of the Regional Trial Court (RTC), Branch 71, Pasig City,
in Civil Case No. 58397.

The undisputed facts as narrated by the Court of Appeals are as follows:

Plaintiff-appellant [Elizabeth L. Diaz] has been in the service of [the University of the Philippines]
U.P. since 1963. In 1987, she was an associate professor in the College of Mass Communication
(CMC). During the second semester for Academic Year (A Y) 1987-1988, she was a full time
member of the faculty and taught 12 units on full load. After 2 to 3 weeks of teaching, she applied for
sick leave effective November 23, 1987 until March 1, 1988. She returned on March 2, 1988 and
submitted a Report for Duty Form.
11

On May 3, 1988, Diaz filed a letter-application directly with U.P.'s "Office of the President (Abueva)
for sabbatical leave with pay for one (1) year effective June 1988 to May 1989, for "rest, renewal and
study." Cecilia Lazaro, Chair of the Broadcast Department, initially recommended to CMC Dean
Encanto that Diaz's sabbatical application be granted. After they discussed the options available to
the CMC, Lazaro, on May 10, 1988, recommended instead that Diaz be granted any leave of
absence she may be qualified for. In her May 2, 1988 letter, Diaz indicated her unwillingness to
teach. Considering the CMC's experience with Diaz who dropped her courses in the previous
semester, Lazaro deleted Diaz's name in the final schedule of classes for the 1st semester of A Y
1988-89 beginning June 6, 1988. Incidentally, Diaz received her salary for June 1988, indicating that
her sabbatical might be approved.

Thereafter, Encanto referred Diaz's sabbatical application to the Secretary of U.P., recommending its
denial. When requested by (Chancellor) Tabujara, Encanto transmitted to the former a Reference
Slip together with her comments thereon. Meanwhile, Encanto requested Ermelina Kalagayan to
hold Diaz's salary effective July 1, 1988 until further notice considering that her sabbatical
application has not yet been approved and that she did not teach that semester. Consequently,
Diaz's name was deleted in the payroll from September 1988 to January 1989.

On July 4, 1988, Tabujara recommended instead that Diaz be granted a leave without pay in order
to enable the CMC to hire a substitute. The next day, the U.P.'s Secretary referred to Abad,
VicePresident (VP) for Academic Affairs, the fact of denial of such sabbatical request, for his own
comment/recommendation to the U.P. President. Meantime, Diaz confessed her problems to Abad.
On July 8, 1988, Abad returned the Reference Slip indicating therein that Diaz had promised him
earlier "to put down in writing, from her point of view, the historical backdrop as it were to the latest
denial of her sabbatical leave." With comments, Abad then referred the matter to the U .P. President.

Pursuant to Administrative Order No. 42 issued by the U.P. President, the Academic Policy
Coordinating Committee (APCC), on July 21, 1988, reviewed the case of Diaz. When reminded by
Abad, Diaz again promised to give the background information.

On Diaz's request to teach for that semester, AY 1988-89, the Vice Chancellor for Academic Affairs,
Edgardo Pacheco, and the HRDO Director, Atty. Pio Frago, instructed Encanto that "Until Prof. Diaz
officially reports for duty, accomplishes the Certificate of Report for Duty, and the Dean of CMC
confirms her date of actual report for duty, she is considered absent without official leave (AWOL) for
the University."

On November 8, 1988, Abad, then as OIC, issued a Memorandum to Diaz to confirm as valid
Encanto' s reason of shortage of teaching staff in denying her sabbatical. Later, he also informed
Diaz of her lack of service during the first semester of A Y 1988-89, hence, she is not entitled to be
paid and asked her to clarify her status of being on leave without pay.

[While Diaz was able to teach during the second semester of AY 1988-89, she was not able to claim
her salaries for her refusal to submit the Report for Duty Form.6 She received her salaries for June to
July 15, 1989, but could no longer claim her salary after July 15, 1989, when Encanto reminded the
University Cashier, in a letter dated July 26, 1989,7 that Diaz had to "accomplish the Report for Duty
Form to entitle her to salaries and make official her return to the service of the University."8 Diaz's
name was subsequently included in the payroll starting July 1990, when she submitted a Report for
Duty after her return from compulsory summer leave.9]

xxxx
12

In the meantime, on January 3, 1989, Diaz filed a complaint with the Office of the Ombudsman
(OMB-00-89-0049), against Gemino H. Abad, Ernesto G. Tabujara and Georgina R. Encanto, all
officials of the University of the Philippines, for the alleged violation of Section 3(e) of R.A. 3019,
involving the legality of a Report for Duty Form as a prerequisite to the payment of her salary.

On May 4, 1989, the Ombudsman dismissed the said complaint and ruled, inter alia:

Considering that Prof. Diaz was rightfully considered on leave without pay during the first semester
of A Y 1988-1989, to make official her return to the service of the University, it is advised that she
accomplish the Report for Duty Form which will then be the basis to establish the date of her actual
return to the service. However, if possible, the University authorities can perhaps dispense with the
requirement and pay her salaries for actual services rendered from November 3, 1988.

Diaz's initial Petition for Certiorari in the Supreme Court (G.R. No. 88834) assailing the above-
quoted Ombudsman's ruling was subsequently dismissed. She filed another Petition (G.R. No.
89207) raising exactly the same issued found in G.R. No. 88834.

Meanwhile, on July 18, 1989, Diaz instituted a complaint against the U.P., Abueva, Encanto,
Tabujara and Abad with the Regional Trial Court, Pasig, Metro Manila praying that the latter be
adjudged, jointly and severally to pay her damages. She claimed, among others, that [respondents]
conspired together as joint tortfeasors, in not paying her salaries from July 1, 1988 in the first
semester of academic year 1988-89, for the entire period when her sabbatical application was left
unresolved, as well as the salaries she earned from teaching in the second semester from
November 1988 to May 1989. She likewise claimed moral and exemplary damages and attorney's
fees.

On August 31, 1989, the Supreme Court En Banc dismissed Diaz's Petition in G.R. No. 89207, viz.:

It is noted that the Ombudsman found no manifest partiality, evident bad faith, or gross inexcusable
negligence on the part of the private respondents in denying the application for sabbatical leave of
petitioner (Diaz) and in requiring her to fill up a Report for Duty Form as a requisite for her
entitlement to salary.

To the petitioner's contentions, the Ombudsman observed, among others, the following: that, the
denial of her sabbatical leave application was due to the exigencies of the service; that petitioner
was not given a teaching assignment for the first semester of A Y 1988-1989, because she did not
want to teach then; that the delay in action on her leave application was due to petitioner's own fault
for not following the usual procedures in the processing of her application; and that there is no
malice on the part of the private respondents in requiring petitioner to accomplish the Report for Duty
Form which is the basis of the date of her actual return to the service.10 (Citations omitted.)

In a Decision dated April 1 7, 1996, the R TC ruled in favor of petitioner Diaz, the dispositive portion
of which reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendants:

1. Ordering defendants, except Abueva, to pay plaintiff, jointly and severally, the amount of
P133,665.50 representing the total unpaid salaries from July 1, 1988 to May 31, 1989 and
from July 16, 1989 to May 31, 1990 to be covered by corresponding certificate of service,
with legal rate of interest from the date of this Decision until its full payment.
13

2. Ordering defendants, except the University and Abueva, to pay plaintiff, jointly and
severally, the amount of P300,000.00 as moral damages.

3. Ordering defendants, except the University and Abueva, to pay plaintiff, jointly and
severally, the amount of P60,000.00 as exemplary damages.

4. Ordering defendants, except the University and Abueva, to pay plaintiff, jointly and
severally, the reduced amount of PS0,000.00 as and by way of attorney's fees.

5. Costs of suit.

The counterclaims filed by defendant Tabujara are DISMISSED.11

The RTC, ruling that a sabbatical leave is not a right but a privilege, held that petitioner Diaz was
entitled to such privilege and found that the delay in the_resolution of her application was
unreasonable and unconscionable.

However, on September 17, 1996, the RTC, in denying the Motions for Reconsideration of the
respondents in said case, also amended its earlier decision by absolving respondent Encanto from
any liability, to wit:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendants:

1. Ordering defendants, except Abueva and Encanto, to pay plaintiff, jointly and severally,
the amount of P133,665.50 representing the total unpaid salaries from July 1, 1988 to May
31, 1989 and from July 16, 1989 to May 31, 1990 to be covered by corresponding certificate
of service, with legal rate of interest from the date of this Decision until its full payment.

2. Ordering defendants, except the University, Abueva and Encanto, to pay plaintiff, jointly
and severally, the amount of P300,000.00 as moral damages.

3. Ordering defendants, except the University, Abueva and Encanto, to pay plaintiff, jointly
and severally, the amount of P60,000.00 as exemplary damages.

4. Ordering defendants, except University, Abueva and Encanto, to pay plaintiff, jointly and
severally, the reduced amount of P50,000.00 as and by way of attorney's fees.

5. Costs of suit.

The counterclaims filed by defendant Tabujara are DISMISSED.12

The RTC dismissed the claim of petitioner Diaz against respondent Encanto on the ground that her
function was purely recommendatory in nature. It held that she was not instrumental in the
unreasonable and unconscionable delay in the resolution of petitioner Diaz's sabbatical application
as she transmitted her recommendation to Abueva within eighteen days from her receipt of such
application.13

Petitioner Diaz14 and respondents Tabujara,15 U.P., Abad16 and even Encanto17 appealed the RTC's
ruling to the Court of Appeals.
14

As respondent Encanto was absolved of liability by the R TC in its September 1 7, 1996 Order, the
Court of Appeals admitted her Brief,18 as an incorporation to the other respondents' Brief,19 and as a
comment on petitioner Diaz's appeal.20

The respondents mainly argued that the R TC erred in holding them liable for damages despite the
absence of bad faith on their part, as held by both the Ombudsman in OMB-00-89-0049 and the
Supreme Court in G.R. No. 89207.

Petitioner Diaz, on the other hand, questioned the reversal of the R TC ruling only with respect to the
liability of respondent Encanto, in a lone assignment of error, viz.:

THE LOWER COURT GRAVELY ERRED IN REVERSING ITS ORIGINAL DECISION WITH
REGARD TO PRINCIPAL DEFENDANT GEORGINA R. ENCANTO BY ABSOLVING HER OF
LIABILITY FOR DAMAGES TO PLAINTIFF-APPELLANT ELIZABETH L. DIAZ WITHOUT
ALTERING IN ANY MATERIAL RESPECT WHATSOEVER THE FINDINGS OF FACT IN THE
ORIGINAL DECISION SHOWING CLEARLY THE RESPONSIBILITY OF DEFENDANT ENCANTO
FOR (I) THE WRONGFUL DISAPPROVAL OF PLAINTIFF'S SABBATICAL APPLICATION; (II)
THE UNJUST DEPRIVATION OF SALARIES DUE THE PLAINTIFF FOR ALMOST ONE WHOLE
SEMESTER DURING WHICH HER SABBATICAL APPLICATION REMAINED UNRESOLVED;
AND (III) THE WRONGFUL WITHHOLDING OF PLAINTIFF'S EARNED SALARIES IN THE
THREE SUCCEEDING SEMESTERS DURING WHICH THE PLAINTIFF TAUGHT WITHOUT
BEING PAID.21

Ruling of the Court of Appeals

The Court of Appeals trimmed down the issue to whether or not respondents U.P., Tabujara and
Abad were negligent or acted in bad faith in denying petitioner Diaz's application for sabbatical leave
and in withholding her salaries. In its Decision promulgated on April 28, 2005, it effectively reversed
the decision of the R TC, viz.:

WHEREFORE, the appealed Decision is REVERSED and SET ASIDE and a NEW
JUDGMENT is RENDERED, as follows: (1) defendant-appellant University of the Philippines,
through its appropriate officials, is DIRECTED to pay plaintiff-appellant Elizabeth Diaz the sum of
Twenty-One Thousand, Eight Hundred Seventy-Nine and 64/100 (P21,879.64) as unpaid salaries
and allowances, and (2) the sums awarded as moral and exemplary damages and attorney's fees
are hereby DELETED. This is without prejudice to the enforcement of valid rules and regulations of
the University of the Philippines pertaining to Diaz's employment status.22

The Court of Appeals found neither negligence nor bad faith on the part of the respondents in their
denial of petitioner Diaz's sabbatical leave application and in withholding her salaries.

The Court of Appeals emphasized that a sabbatical leave is not a right which could be demanded at
will, even by petitioner Diaz who has been a veteran professor of 24 years at U.P. Moreover, the
Court of Appeals said that the eventual denial of her sabbatical leave application was not actionable
in view of the fact that (i) it would be unfair to impute negligence to respondents in the regular
discharge of their functions; and (ii) assuming that there was delay in the resolution of her
application, she herself caused such delay.23

The Court of Appeals also held that petitioner Diaz's own recalcitrance and defiance to comply with
certain documentary requirements was the reason her salaries were withheld.24
15

Petitioner Diaz filed a Motion for Reconsideration to the aforementioned decision, which was
subsequently denied for lack of merit in a Resolution dated January 20, 2006.

Issues

Undaunted, petitioner Diaz is again before this Court, with the following Assignments of Error:

FIRST ASSIGNMENT OF ERROR

WITHOUT DISTURBING THE FINDINGS OF FACT OF. THE TRIAL COURT BASED ON
OVERWHELMING EVIDENCE REVEALING THE COMMISSION BY RESPONDENTS OF THE
TORTIOUS ACTS COMPLAINED OF BY PETITIONER IN DENYING HER SABBATICAL LEA VE,
THE COURT OF APPEALS GRIEVOUSLY ERRED IN IGNORING THOSE FINDINGS AND
ADOPTING AND TREATING AS VALID THE FLIMSY EXCUSES OF RESPONDENTS TO A VOID
THE LEGAL CONSEQUENCES OF THEIR ACTS.

SECOND ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN HOLDING CONTRARY TO THE EVIDENCE ON RECORD,


THAT "THERE WAS JUDICIOUS EXERCISE" BY RESPONDENTS "OF THEIR DISCRETIONARY
POWER WITH RESPECT TO THE DENIAL OF THE SUBJECT SABBATICAL LEAVE."

THIRD ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN TREATING AS LAWFUL THE WITHHOLDING OF


PETITIONER'S SALARIES, CONTRARY TO THE EVIDENCE ON RECORD.

FOURTH ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN CONCLUDING, CONTRARY TO THE EVIDENCE ON


RECORD, THAT PETITIONER "FAILED TO SHOW BY A PREPONDERANCE OF EVIDENCE THE
NEGLIGENCE OF RESPONDENTS SO AS TO BE ENTITLED TO THE DAMAGES SOUGHT."

FIFTH ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN NOT CORRECTLY COMPUTING THE SUM OF


PETITIONER'S UNPAID AND EARNED SALARIES, IN UTTER DISREGARD OF THE EVIDENCE
ON RECORD.

SIXTH ASSIGNMENT OF ERROR

THE COURT OF APPEALS ERRED IN NOT FINDING, CONTRARY TO THE EVIDENCE ON


RECORD, THAT RESPONDENTS EN CANTO, TABUJARA AND ABAD ARE JOINTLY AND
SEVERALLY LIABLE TO PETITIONER FOR ACTUAL, MORAL AND EXEMPLARY DAMAGES AS
JOINT TORTFEASORS UNDER THE LAW.25

The issue in this case boils down to whether or not the respondents acted in bad faith when they
resolved petitioner Diaz's application for sabbatical leave and withheld her salaries.

Ruling of the Court


16

The resolution of this case hinges on the question of bad faith on the part of the respondents in
denying petitioner Diaz's sabbatical leave application and withholding of her salaries. Bad faith,
however, is a question of fact and is evidentiary.26 Thus, contrary to petitioner Diaz's belief that " [ w
]hat is involved in this stage of the case is the legal interpretation or the legal consequence of the
material facts of this case," the resolution of the issue at hand involves a question of fact, which the
respondents rightly assert, is not within the province of a Rule 45 petition.27Nonetheless, the Court
makes an exception in this case especially so that both the RTC and the Court of Appeals have the
same findings of fact, but they arrived at different conclusions.28

Application for Sabbatical Leave

Petitioner Diaz's complaint29 for recovery of damages before the RTC was based on the alleged bad
faith of the respondents in denying her application for sabbatical leave vis-a-vis Articles 19 and 20 of
the Civil Code.30

Articles 19 and 20 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, willfully or negligently causes damage to another, shall
indemnify the latter for the same.

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."31 Abuse of right under Article 19 exists
when the following elements are present: (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.32

This Court, expounding on the concept of bad faith under Article 19, held:

Malice or bad faith is at the core of Article 19 of the Civil Code. 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. It is presumed. Thus, he
who alleges bad faith has the duty to prove the same. Bad faith does not simply connote bad
judgment or simple negligence; it involves a dishonest purpose or some moral obloquy and
conscious doing of a wrong, a breach of known duty due to some motives or interest or ill will that
partakes of the nature of fraud. Malice connotes ill will or spite and speaks not in response to duty. It
implies an intention to do ulterior and unjustifiable harm. Malice is bad faith or bad motive.33(Citations
omitted.)

Undoubtedly, the respondents had a duty to resolve petitioner Diaz's sabbatical leave application.
The crucial question is if they did so with the intention of prejudicing or injuring petitioner Diaz.

We hold in the negative.

There is no dispute, and both the RTC and the Court of Appeals agree, that the grant of a sabbatical
leave is not a matter of right, but a privilege. Moreover, the issue of whether or not the respondents
acted in bad faith when they denied petitioner Diaz's application for sabbatical leave has been
answered several times, in separate jurisdictions.
17

On May 4, 1989, the Ombudsman issued a Resolution34 in Case No. OMB-0-89-0049 on the
complaint filed by petitioner Diaz against respondents Encanto, Tabujara, and Abad for violation of
Section 3(e) of Republic Act No. 3019, recommending the dismissal of the complaint for lack of
merit. It found no manifest partiality, evident bad faith, or gross inexcusable negligence on the part of
the respondents in their denial of petitioner Diaz's application for sabbatical leave and in requiring
her to accomplish a Report for Duty form as a prerequisite for her entitlement to salary.

Petitioner Diaz protested the outcome of this resolution by filing a special civil action
for certiorari with this Court, on two occasions. When G.R. No. 88834 was dismissed for non-
compliance with Circular No. 1-88,35 petitioner Diaz re-filed her petition, raising exactly the same
issues, and this was docketed as G.R. No. 89207.36

On August 31, 1989, this Court issued a Resolution,37 dismissing petitioner Diaz's petition in G.R. No.
89207. This Court noted the Ombudsman's findings and observations and found them to be
supported by substantial evidence.

On April 28, 2005, the Court of Appeals had the same findings and held that the denial of petitioner
Diaz's application for sabbatical leave was "a collegial decision based on UP. 's established rules,
the grant of which is subject to the exigencies of the service, like acute shortage in teaching staff" It
added that "the UP. officials' eventual denial of [Diaz's} application is not actionable xx x it is unfair to
impute negligence to [respondents] in the regular discharge of their official functions. "38

The Ombudsman and all three courts, starting from the R TC to this Court, have already established
that a sabbatical leave is not a right and therefore petitioner Diaz cannot demand its grant. It does
not matter that there was only one reason for the denial of her application, as the approving
authorities found that such reason was enough. Moreover, not only the Court of Appeals but also the
Ombudsman, and this Court, have ruled that the respondents did not act in bad faith when petitioner
Diaz's sabbatical leave application was denied. Those three separate rulings verily must be given
great weight in the case at bar.

The Court does not find any reason to disregard those findings, especially when our own perusal of
the evidence showed no traces of bad faith or malice in the respondents' denial of petitioner Diaz's
application for sabbatical leave. They processed her application in accordance with their usual
procedure - with more leeway, in fact, since petitioner Diaz was given the chance to support her
application when she was asked to submit a historical background; and the denial was based on the
recommendation of respondent Encanto, who was in the best position to know whether petitioner
Diaz's application should be granted or not.

While the RTC declared that petitioner Diaz should have been granted a sabbatical leave, it is
important to note that the RTC awarded damages to petitioner Diaz merely for the unreasonable
and unconscionable delay in the resolution of her sabbatical leave application,39 and not its
denial per se. Thus, petitioner Diaz's entitlement to a sabbatical leave should no longer be an issue
in this case. This is supported by petitioner Diaz's own action when she did not move for the
reconsideration of the April 17, 1996 Decision of the RTC for awarding her damages due only to
the delay in the resolution of her sabbatical leave application and not for its denial; and more so by
the prayer in her petition to this Court wherein she asked that the April 17, 1996 Decision of the RTC
be "reinstated and affirmed in toto."40

Nevertheless, on the question of whether or not there was bad faith in the delay of the resolution of
petitioner Diaz's sabbatical leave application, the Court still rules 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."41 Petitioner Diaz has failed to prove bad faith on the part of the
18

respondents. There is nothing in the records to show that the respondents purposely delayed the
resolution of her application to prejudice and injure her. She has not even shown that the delay of six
months in resolving a sabbatical leave application has never happened prior to her case. On the
contrary, any delay that occurred was due to the fact that petitioner Diaz's application for sabbatical
leave did not follow the usual procedure; hence, the processing of said application took time.42

In petitioner Diaz's petition, she criticized the Court of Appeals for imputing the cause of delay to her,
arguing that as the requirement that a sabbatical leave application be filed at least one semester
before its intended date of effectivity was only imposed in 1990, long after she had filed hers in
1988.43 But, precisely, this rule may have been imposed by U.P. to address any untoward delays and
to likewise provide a time frame for the approving authorities in resolving sabbatical leave
applications.

This Court understands petitioner Diaz's frustration, but she cannot keep on arguing that the facts,
as established, and which she herself does not dispute, had been misappreciated.in different
occasions.

Petitioner Diaz's Withheld Salaries

Petitioner Diaz is entitled to her withheld salaries from July 1, 1988 to October 31, 1988, and from
November 1, 1988 to May 31, 1989, and July 16, 1989 to May 31, 1990, upon submission of the
required documents.

The denial of petitioner Diaz's salaries during the first semester of Academic Year (AY) 1988-1989
was due to the fact that she did not teach that semester. But when respondent Lazaro removed
petitioner Diaz's name from the final schedule of teaching assignments in CMC for the first semester
of AY 1988-89, it was without petitioner Diaz's prior knowledge, as admitted by respondent Lazaro
herself, to wit:

ATTY. DIAZ: Now, did Prof. Diaz ask you to remove her from [the] schedule of classes?

LAZARO: I did it.

Q: Because you said you did it on your own?

A: Yes.

xxxx

Q: She did not [ask] you?

A: No.44

The Court, however, observes that respondent Lazaro, in so doing, did not act in bad faith as she
expected petitioner Diaz's application for leave, of whatever nature, to be granted. As such, she did
not want Diaz to have to drop the classes she was already handling once her sabbatical leave was
approved, as was the case the semester before, when petitioner Diaz dropped her classes, three
weeks into the start of the semester, when her application for sick leave was approved, viz.:

ATTY. GUNO: You mentioned a while ago that you deleted the name of Professor Diaz from this
final schedule of classes. Why did you delete it?
1âwphi 1
19

LAZARO: I presumed in good faith that based on the letter she sent which was routed to me where
she stated she could no longer be efficient and effective as a teacher and she was suffering from
fatigue and that she could no longer work under those circumstances, I felt, as a gesture of
sympathy to her that this should be granted suggesting that she be given a leave of absence of
whatever kind she was qualified for and based on my previous experience on the second semester
where two to three weeks into the course she dropped her courses, I did not want that to happen
again.45

ATTY. GUNO: You also testified that because of the application for sabbatical leave and the reasons
she gave in that letter, you deleted her name in the final list of class schedule for school year 1988-
89 first semester?

LAZARO: Yes.

Q: Why did you delete her name, will you tell the Court?

A: She had applied for sabbatical leave for the whole year of 1988-89 and based on the experience
of her sick leave during the previous semester which was the second semester of the previous
school year where three (3) weeks into classes she filed for a sick leave and did not teach, based on
that experience, I did not include her name in the class list because the same thing could happen
again.46

While petitioner Diaz was not consulted about the removal of her name from the class schedule, she
did not contest such upon the belief that her application for sabbatical leave would be approved, as
in fact, she was given her salary in June 1988. As such, this Court believes, in the interest of equity
and fairness, that petitioner Diaz should be entitled to her salary during the semester when her name
was dropped from the final list of schedule of classes, without her knowledge and consent, and while
action on her application for sabbatical leave was still pending.47

On the matter of her salaries from the second semester of A Y 1988-89 up until A Y 1989-1990, the
respondents legally withheld such, as found by the Ombudsman and the Court of Appeals for
petitioner Diaz's own refusal to comply with the documentary requirements of U.P. Even the RTC, in
its Omnibus Order of January 12, 1990, denied petitioner Diaz's petition for mandatory injunction
upon the finding that the Report for Duty Form required of her is a basic and standard requirement
that is asked from all employees of U.P. The RTC held:

It is therefore clear that the acts sought to be enjoined [by Diaz] are in fact pursuant to the proper
observance of administrative or internal rules of the University. This Court sympathizes with [Diaz]
for not being able to receive her salaries after July 15, 1989. However, such predicament cannot be
outrightly attributable to the defendants, as their withholding of her salaries appears to be in
accordance with existing University regulations.

Apart from such reasons, this Court believes that petitioner Diaz failed to show why she should be
spared from the Report for Duty requirement, which remains a standard practice even in other
offices or institutions. To be entitled to an injunctive writ, one must show an unquestionable right
and/or blatant violation of said right to be entitled to its issuance.48

But it cannot be denied that during the periods of November 1, 1988 to May 31, 1988 and July 16,
1989 to May 31, 1990, petitioner Diaz rendered service to U.P. for which she should be
compensated.
20

Given the foregoing, petitioner Diaz should be paid, as the RTC had computed, her salaries from
July l, 1988 to October 1988, the semester when petitioner Diaz's name was dropped from the final
list of schedule of classes, without her prior knowledge and consent; and for the periods of
November 1, 1988 to May 31, 1989 and July 16, 1989 to May 31, 1990, for the work she rendered
during said periods, but upon petitioner Diaz's submission of the documents required by U.P.

No Payment of Other Damages

Given that the respondents have not abused their rights, they should not be held liable for any
damages sustained by petitioner Diaz. "The law affords no remedy for damages resulting from an
act which does not amount to a legal wrong. Situations like this have been appropriately
denominated damnum absque injuria."49 Similarly, the Court cannot grant petitioner Diaz's claim for
attorney's fees as no premium should be placed on the right to litigate. "Even when a claimant is
compelled to litigate or to incur expenses to protect his rights, still attorney's fees may not be
awarded where there is no sufficient showing of bad faith in a party's persistence in a case other
than an erroneous conviction of the righteousness of his cause."50

Legal Interest Due on the Salaries Withheld

Pursuant to Nacar v. Gallery Frames,51 the applicable rate of legal interest due on petitioner Diaz's
withheld salaries - (i) from July 1, 1988 to October 31, 1988, the period corresponding to the first
semester of A Y 1988-89, when her name was removed from the final list of class schedule without
her prior knowledge and consent, less the amount she had received in June 1988 - will be from April
17, 1996, the date of the Decision of the RTC, up to the full satisfaction thereof, is 6% per annum;
and (ii) from November 1, 1988 to May 31, 1989, and July 16, 1989 to May 31, 1990, the periods
when she was refused payment of her salaries for not accomplishing a Report for Duty Form - will be
from the time petitioner Diaz submits the required Report for Duty Form up to the full satisfaction
thereof, is 6% per annum.

WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals in CA-
G.R. CV No. 55165 is hereby AFFIRMED with MODIFICATION in that the University of the
Philippines, through its appropriate officials, is directed to pay petitioner Elizabeth L. Diaz her
withheld salaries 1) from July 1, 1988 to October 31, 1988, with legal interest at the rate of six
percent (6%) per annum, computed from the date of the Decision of the R TC on April 17, 1996 until
fully paid; and 2) from November 1, 1988 to May 31, 1989 and July 16, 1989 to May 31, 1990, with
legal interest at the rate of six percent (6%) per annum computed from the date petitioner Elizabeth
L. Diaz submits the documents required by the University of the Philippines until fully paid.

SO ORDERED.

=====================================================================================

SECOND DIVISION

G.R. No. 199601, November 23, 2015


21

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 Court1 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.
22

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.
23

To be sure, the case of Singapore Airlines Ltd. v. Ernani Cruz Paño is enlightening: chanRoble svi rtual La wlibra ry

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] cralaw lawlibra ry

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:chanRoblesvi rtual Lawli bra ry

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 mannerin 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).8 cralawlawlib ra ry

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
24

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: chanRoblesvi rtual Lawli bra ry

[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] cral awlawlib rary

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.
=====================================================================================

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 187240 October 15, 2014


25

CARLOS A. LORIA, Petitioner,


vs.
LUDOLFO P. MUÑOZ, JR. Respondent.

DECISION

LEONEN, J.:

No person should unjustly enrich himself or herself at the expense of another.

This is a petition for review on certiorari1 to set aside the Court of Appeals' decision2 and
resolution3 in CA-G.R. CV No. 81882. The Court of Appeals ordered petitioner Carlos A. Loria to pay
respondent Ludolfo P. Muñoz, Jr. ₱2,000,000.00 in actual damages with 12% interest per year from
the filing of the complaint until full payment.4

The facts of this case are as follows:

Ludolfo P. Muñoz, Jr. (Muñoz) filed a complaint for sum of money and damages with an application
for issuance of a writ of preliminary attachment against Carlos A. Loria (Loria) with the Regional Trial
Court of Legazpi City.5

In his complaint, Muñoz alleged that he has been engaged in construction under the name, "Ludolfo
P. Muñoz, Jr. Construction." In August 2000, Loria visited Muñoz in his office in Doña Maria
Subdivision in Daraga, Albay. He invited Muñoz to advance ₱2,000,000.00 for a subcontract of a
₱50,000,000.00 river-dredging project in Guinobatan.6

Loria represented that he would makearrangements such that Elizaldy Co, owner of Sunwest
Construction and Development Corporation, would turn out to be the lowest bidder for the project.
Elizaldy Co would pay ₱8,000,000.00 to ensure the project’s award to Sunwest. After the award to
Sunwest, Sunwest would subcontract 20% or ₱10,000,000.00 worth of the project to Muñoz.7

Since Muñoz had known Loria for five years, Muñoz accepted Loria’s proposal.8

On October 2, 2000, Muñoz requested Allied Bank to release ₱3,000,000.00 from his joint account
withhis business partner, Christopher Co, to a certain Grace delos Santos (delos Santos). Loria then
obtained the money from delos Santos.9

Four days later, ₱1,800,000.00 of the ₱3,000,000.00 was returned to Muñoz.10

On January 10, 2001, Loria collectedMuñoz’s ₱800,000.00 balance. After deducting Loria’s personal
loans from Muñoz, Muñoz issued a check to Loria for ₱481,800.00. Loria acknowledged receiving
this amount from Muñoz.11

The project to dredge the Masarawag and San Francisco Rivers in Guinobatan was subjected to
public bidding. The project was awarded to the lowest bidder, Sunwest Construction and
Development Corporation.12

Sunwest allegedly finished dredging the Masarawag and San Francisco Rivers without
subcontracting Muñoz.13With the project allegedly finished, Muñozdemanded Loria to return his
₱2,000,000.00. Loria, however, did not return the money.14
26

Muñoz first charged Loria and Elizaldy Co with estafa. This criminal case was dismissed by the
Municipal Trial Court of Daraga, Albay for lack of probable cause.15

Muñoz then filed the complaint for sum of money. The case was raffled to Branch 6 and presidedby
Judge Vladimir B. Brusola.16

Loria answered Muñoz’s complaint. He admitted receiving ₱481,800.00 from Muñoz but argued that
the complaint did not state a cause of action against him. According to Loria, he followed up the
project’s approval with the Central Office of the Department of Public Works and Highways as the
parties agreed upon. He was, therefore, entitled to his representation expenses.17

Loria also argued that Muñoz was guilty of forum shopping. Muñoz first filed a criminal complaint for
estafa against him and Elizaldy Co, which complaint the Municipal Trial Court of Daraga, Albay
dismissed. The subsequently filed complaint for sum of money, allegedly a complaint to recover the
civil aspect of the estafa case, must, therefore, be dismissed as argued by Loria.18

During pre-trial, the parties agreed to litigate the sole issue of whether Loria is liable to Muñoz for
₱2,000,000.00.19

According to the trial court, Muñoz established with preponderant evidence that Loria received
₱2,000,000.00 from Muñoz for a subcontract of the river-dredging project. Since no part of the
project was subcontracted to Muñoz, Loria must return the ₱2,000,000.00 he received, or he would
be "unduly enriching himself at the expense of [Muñoz]."20

On the claim of forum shopping, the trial court ruled that Loria’s obligation to return the 2,000,000.00
did not arise from criminal liability. Muñoz may, therefore, file a civil action to recover his
₱2,000,000.00.21

As to the prayer for issuance of a writ of preliminary attachment, the trial court denied the prayer for
lack of sufficient basis.22

Thus, in the decision23 dated January 30, 2004, the trial court ordered Loria to return the
₱2,000,000.00 toMuñoz as actual damages with 12% interest from the filing of the complaint until
the amount’s full payment. The trial court likewise ordered Loria to pay Muñoz ₱100,000.00 in
attorney’s fees, ₱25,000.00 in litigation expenses, and ₱25,000.00 in exemplary damages with costs
against Loria.24

Loria appealed to the Court of Appeals, arguing that Muñoz failed to establish his receipt of the
₱2,000,000.00. Specifically, Muñoz failed to establish that he obtained ₱3,000,000.00from a certain
Grace delos Santos. Loria also appealed the award of attorney’s fees, litigation expenses, and
exemplary damages for having no basis in fact and in law.25

The Court of Appeals sustained the trial court’s factual findings. In ruling that Loria received the net
amount of ₱2,000,000.00 from Muñoz, the Court of Appeals referred to Muñoz’s testimony that he
ordered Allied Bank to release ₱3,000,000.00 from his joint account with Christopher Co to a certain
Grace delos Santos.26 Loria then obtained the money from delos Santos and confirmed with Muñoz
his receipt of the money.27 This testimony, according to the appellate court, was supported by Exhibit
"C," a check voucher the trial court admitted inevidence. Loria signed this check voucher and
acknowledged receiving ₱1,200,000.00 on October 2, 2000 and ₱800,000.00 on January 10, 2001,
ora total of ₱2,000,000.00.28
27

Considering that Muñoz did not benefit from paying Loria ₱2,000,000.00, the appellate court ruled
that Loria must return the money to Muñoz under the principle of unjust enrichment.29

The appellate court, however, ruled that Muñoz failed to show his right to exemplary damages and
attorney’s fees.30

Thus, in the decision31 dated October 23, 2008, the Court of Appeals affirmed the trial court’s
decision but deleted the award of exemplary damages and attorney’s fees.32 The appellate court
likewise denied Loria’s motion for reconsideration in the resolution33 dated March 12, 2009.

Loria filed a petition for review on certiorari34 with this court, arguing that the principle of unjust
enrichment does not apply in this case. As the trial and appellate courts found, Muñoz paid Loria
₱2,000,000.00 for a subcontract of a government project. The parties’ agreement, therefore, was
void for being contrary to law, specifically, the Anti-Graft and Corrupt Practices Act, the Revised
Penal Code, and Section 6 of Presidential Decree No. 1594. The agreement was likewise contrary to
the public policy of public or open competitive bidding of government contracts.35

Since the parties’ agreement was void, Loria argues that the parties were in pari delicto, and Muñoz
should not be allowed to recover the money he gave under the contract.36

On the finding that he received a net amount of ₱2,000,000.00 from Muñoz, Loria maintains that
Muñoz failed to prove his receipt of ₱3,000,000.00 through a certain Grace delos Santos.37

In the resolution38 dated June 3, 2009, thiscourt ordered Muñoz to comment on Loria’s petition.

In his comment,39 Muñoz argues that Loria’s petition raises questions of fact and law that the trial and
appellate courts have already passed upon and resolved in his favor. He prays that this court deny
Loria’s petition for raising questions of fact.

Loria replied40 to the comment, arguing thathe raised only questions of law in his petition.41 Even
assuming that he raised questions of fact, Loria argues that this does not warrant the automatic
dismissal of his petition since the trial and appellate courts allegedly erred inruling for Muñoz.42

On October 8, 2010, the parties filed their joint motion to render judgment based on the compromise
agreement.43 In their compromise agreement,44 the parties declared that thiscase "was a product of a
mere misunderstanding."45 To amicably settle their dispute, the parties agreed to waive all their
claims, rights, and interests against each other.46

This court denied the joint motion for lack of merit in the resolution47 dated December 15, 2010.

The issues for our resolution are the following:

I. Whether Loria initially obtained ₱3,000,000.00 from a certain Grace delos Santos

II. Whether Loria is liable for ₱2,000,000.00 to Muñoz

We rule for Muñoz and deny Loria’s petition for review on certiorari.

I
28

Whether Loria initially received 3,000,000.00 is a question of fact not proper in a petition for review
on certiorari

We first address Loria’s contention that Muñoz failed to prove his initial receipt of ₱3,000,000.00.
This is a question of fact the trial and appellate courts have already resolved. In a Rule 45 petition,
we do not address questions of fact, questions which require us to ruleon "the truth or falsehood of
alleged facts."48 Under Section 1, Rule 45 of the Rules of Court, we only entertain questions of law —
questions as to the applicable law given a set of facts49 — in a petition for review on certiorari:

Section 1. Filing of petition with Supreme Court.

A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of
Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law,
may file withthe Supreme Court a verified petition for review on certiorari. The petition shall raise
only questions of lawwhich must be distinctly set forth. (Emphasis supplied)50

We may review questions of fact in a Rule 45 petition:

. . . (1) when the findings are grounded entirely on speculations, surmises, or conjectures; (2) when
the inference made is manifestly mistaken, absurd, or impossible; (3) when there is a grave abuse of
discretion; (4) when the judgment is based on misappreciation of facts; (5) when the findings of fact
are conflicting; (6) when in making its findings, the same are contrary to the admissions of both
appellant and appellee; (7) the findings are contrary to those of the trial court; (8) when the findings
are conclusions without citation of specific evidence on which they are based; (9) the facts set forth
in the petition as well as in petitioner’s main and reply briefs are not disputed by respondent; and
(10) the findings of fact are premised on the supposed absence of evidence and contradicted by the
evidence on record.51 [Emphases omitted]

Loria failed to convince us why we should make an exception in this case.

During trial, Muñoz testified thathe ordered Allied Bank to release ₱3,000,000.00 from his joint
account withChristopher Co to a certain Grace delos Santos.52 Loria then obtained the money from
delos Santos and confirmed with Muñoz his receipt of the amount.53 ₱1,800,000.00 was
subsequently returned to Muñoz, leaving a ₱1,200,000.00 balance with Loria. This testimony was
supported by Exhibit "C," the check voucher where Loria acknowledged receiving ₱1,200,000.00
from Muñoz.54

We agree that these pieces ofevidence duly prove Loria’s initial receipt of ₱3,000,000.00. We will not
disturb this finding.

II

Loria must return Munoz’s ₱2,000,000.00 under the principle of unjust enrichment

Under Article 22 of the Civil Codeof the Philippines, "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." There is unjust
enrichment "when a person unjustly retains a benefit to the loss of another, or when a person retains
money orproperty of another against the fundamental principles of justice, equity and good
conscience."55
29

The principle of unjust enrichment has two conditions. First, a person must have been benefited
without a real or valid basis or justification. Second, the benefit was derived at another person’s
expense or damage.56

In this case, Loria received ₱2,000,000.00 from Muñoz for a subcontract of a government projectto
dredge the Masarawag and San Francisco Rivers in Guinobatan, Albay. However, contrary to the
parties’ agreement, Muñoz was not subcontracted for the project. Nevertheless, Loria retained the
₱2,000,000.00.

Thus, Loria was unjustly enriched. He retained Muñoz’s money without valid basis or justification.
Under Article 22 of the Civil Code of the Philippines, Loria must return the ₱2,000,000.00 to Muñoz.

Contrary to Loria’s claim, Section 6 of the Presidential Decree No. 1594 does not prevent Muñoz
from recovering his money.

Under Section 6 of the Presidential Decree No. 1594,57 a contractor shall not subcontract a part or
interestin a government infrastructure project without the approval of the relevant department
secretary:

Section 6. Assignment and Contract.The contractor shall not assign, transfer, pledge, subcontract
ormake any other disposition of the contract or any part or interest therein except with the approval
of the Minister of Public Works, Transportation and Communications, the Minister of Public
Highways, or the Minister of Energy, as the case may be. Approval of the subcontract shall not
relieve the main contractor from any liability or obligation under his contract with the Government nor
shall it create any contractual relation between the subcontractor and the Government.

A subcontract, therefore, is void only if not approved by the department secretary.

In this case, it is premature to rule on the legality of the parties’ agreement precisely becausethe
subcontract did not push through. No actual agreement was proven in evidence.The Secretary of
Public Works and Highways could have approved the subcontract, which is allowed under Section 6
of the Presidential Decree No. 1594.

At any rate, even assuming that there was a subcontracting arrangement between Sunwest
Construction and Development Corporation and Muñoz, this court has allowed recovery under a void
subcontract as an exception to the in pari delicto doctrine.

In Gonzalo v. Tarnate, Jr.,58 the Department of Public Works and Highways (DPWH) awarded the
contractto Dominador Gonzalo to improve the Sadsadan-Maba-ay section of the Mountain Province
Road. Gonzalo then subcontracted the supply of materials and labor to John Tarnate, Jr. without the
approval of the Secretary of Public Works and Highways. The parties agreed to a total subcontract
fee of 12% of the project’s contract price.59

Tarnate, Jr. also rented equipment to Gonzalo. In a deed of assignment, the parties agreed to a
retention fee of 10% of Gonzalo’s total collection from the Department of Public Works and
Highways, or 233,526.13, as rent for the equipment. They then submitted the deed of assignment to
the Department for approval.60

Subsequently, Tarnate, Jr. learned that Gonzalo filed with the Department of Public Works and
Highways an affidavit to unilaterally cancel the deed of assignment. Gonzalo also collected the
retention fee from the Department.61
30

Tarnate, Jr. demanded payment for the rent of the equipment, but Gonzalo ignored his demand. He
thenfiled a complaint for sum of money and damages with the Regional Trial Court of Mountain
Province to collect on the 10% retention fee.62

In his defense, Gonzalo argued thatthe subcontract was void for being contrary to law, specifically,
Section 6 of the Presidential Decree No. 1594. Since the deed of assignment "was a mere product of
the subcontract,"63 the deed of assignment was likewise void. With Tarnate, Jr. "fully aware of the
illegality and ineffectuality of the deed of assignment,"64 Gonzalo contended that Tarnate, Jr. could
not collect on the retention fee under the principle of in pari delicto.65

This court ruled that the subcontract was void for being contrary to law. Under Section 6 of the
Presidential Decree No. 1594, a contractor shall not subcontract the implementation of a
government infrastructure project without the approval of the relevant department secretary.66 Since
Gonzalo subcontracted the project to Tarnate, Jr. without the approvalof the Secretary of Public
Works and Highways, the subcontract was void, including the deed of assignment, which "sprung
from the subcontract."67

Generally, parties to an illegal contract may not recover what they gave under the contract.68 Under
the doctrine of in pari delicto, "no action arises, in equity or at law, from anillegal contract[.] No suit
can be maintained for its specific performance, or to recover the property agreed to be sold or
delivered, or the money agreed to be paid, or damages for its violation[.]"69 Nevertheless, this court
allowed Tarnate, Jr. to recover 10% of the retention fee. According to this court,"the application of
the doctrine of in pari delictois not always rigid."70 An exception to the doctrine is "when its application
contravenes well-established public policy."71 In Gonzalo, this court ruled that "the prevention of
unjust enrichment is a recognized public policy of the State."72 It is, therefore, an exception to the
application of the in pari delicto doctrine. This court explained:

. . . the application of the doctrine of in pari delicto is not always rigid. An accepted exception arises
1âwphi 1

when its application contravenes wellestablished public policy. In this jurisdiction, public policy has
been defined as "that principle of the law which holds that no subject or citizen can lawfully do that
which has a tendency to be injurious to the public or against the public good."

Unjust enrichment exists, according to Hulst v. PR Builders, Inc., "when a person unjustly retains a
benefit at the loss of another, or when a person retains money or property of another against the
fundamental principles of justice, equity and good conscience." The prevention of unjust enrichment
is a recognized public policy of the State, for Article 22 of the Civil Code explicitly provides that
"[e]veryperson 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." It is well to note that Article 22 "is part of the chapter of the Civil Code on
Human Relations, the provisions of which were formulated as basic principles to be observed for the
rightful relationship between human beings and for the stability of the social order; designed to
indicate certain norms that spring from the fountain of good conscience;guides for human conduct
that should run as golden threads through society to the end that law may approach its supreme
ideal which is the sway and dominance of justice."73 (Citations omitted)

Given that Tarnate, Jr. performed his obligations under the subcontract and the deed of assignment,
this court ruled that he was entitled to the agreed fee. According to this court, Gonzalo "would be
unjustly enriched at the expense of Tarnate if the latter was tobe barred from recovering because of
the rigid application of the doctrine of in pari delicto."74

In this case, both the trial and appellate courts found that Loria received ₱2,000,000.00 from Muñoz
for a subcontract of the river-dredging project. Loria never denied that hefailed to fulfill his agreement
31

with Muñoz. Throughout the case’s proceedings, Loria failed to justify why he has the right to retain
Muñoz’s ₱2,000,000.00. As the Court of Appeals ruled, "it was not shown that [Muñoz] benefited
from the delivery of the amount of ₱2,000,000.00 to [Loria]."75

Loria, therefore, is retaining the ₱2,000,000.00 without just or legal ground. This cannot be done.
Under Article 22 of the Civil Code of the Philippines, he must return the ₱2,000,000.00 to Muñoz.

This court notes the possible irregularities in these transactions. At the very least, there appears to
have been an attempt to circumvent our procurement laws. If petitioner indeed had the authority of
Sunwest Construction and Development Corporation, it is strange that Loria could have guaranteed
a bidding result. If he did not have any true dealing with Sunwest Construction, then his is an
elaborate scheme to cause financiers to lose their hard-earned money for nothing. WHEREFORE,
the petition for review on certiorari is DENIED. The Court of Appeals' decision and resolution in CA-
GR. CV No. 81882 are AFFIRMED with MODIFICATION as to interest rate. Petitioner Carlos A.
Loria shall pay respondent Ludolfo P. Mufioi, Jr. ₱2,000,000.00 in actual damages, with interest of
12% interest per annum from the filing of the complaint until June 30, 2013, and 6% interest per
annum from July 1, 2013 until full payment.76

Let a copy of this decision be SERVED on the Office of the Ombudsman and the Department of
Justice for their appropriate actions.

SO ORDERED.

=====================================================================================

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 176121 September 22, 2014

SPOUSES TEODORICO and PACITA ROSETE, Petitioners,


vs.
FELIX and/or MARIETTA BRIONES, SPOUSES JOSE and REMEDIOS ROSETE, AND
NEORIMSE and FELICITAS CORPUZ, Respondents.

DECISION

DEL CASTILLO, J.:

Assailed in this Petition for Review on Certiorari1 are the October 30, 2006 Decision2 of the Court of
Appeals (CA) which denied the Petition for Review in CA-G.R. SP No. 79400 and its December 22,
2006 Resolution3 denying the herein petitioners' Motion for Reconsideration.4

Factual Antecedents

The subject lot is a 152-square meter lot located at 1014 Estrada Street, Malate, Manila which is
owned by the National Housing Authority (NHA).
32

On July 30, 1987, the NHA conducted a census survey of the subject lot, and the following
information was gathered:

Tag No. 674


Ricardo Dimalanta, Sr. - absentee structure owner
Felix Briones - lessee
Neorimse Corpuz - lessee

Tag No. 87-0675


Teodoro Rosete - residing owner
Jose Rosete – lessee5

The NHA awarded the subject lot topetitioner Teodorico P. Rosete (Teodorico).6 The herein
respondents, Jose and Remedios Rosete(the Rosetes), Neorimse and Felicitas Corpuz (the
Corpuzes), and Felix and Marietta Briones (the Brioneses) objected to the award, claiming that the
award of the entire lot to Teodorico was erroneous.

In 1990, a Declaration of Real Property was filed and issued in Teodorico’s name.7 On March 21,
1991,he made full payment of the value of the subject lot in the amount of ₱43,472.00.8 He likewise
paid the real property taxes thereon.9

In an August 5, 1994 Letter-Decision,10 the NHA informed Teodorico that after consideration of the
objections raised by the Rosetes, the Corpuzes and the Brioneses, the original award of 152 square
meters in his favor has been cancelled and instead, the subject lot will besubdivided and awarded as
follows:

1. Teodorico – 62 square meters

2. The Brioneses – 40 square meters

3. The Rosetes – 25 square meters

4. The Corpuzes – 15 square meters

5. Easement for pathwalk – 10 square meters

In the same Letter-Decision, NHA likewise informed Teodorico that his payments shall be adjusted
accordingly, but his excess payments will not be refunded; instead, they will be applied to his co-
awardees’ amortizations. His coawardees shall in turn pay him, under pain of cancellation of their
respective awards. NHA also informedTeodorico that the matters contained in the letter were final,
and that if he intended to appeal, he should do so with the Office of the President within 30 days.

In an October 18, 1994 letter11 to the NHA, Teodorico protested and sought a reconsideration of the
decision to cancelthe award, claiming that it was unfair and confiscatory. He likewise requested that
his co-awardees be required to reimburse his property tax payments and that the subject lot be
assessed at its current value.

Meanwhile, on October 24, 1994, the Rosetes and the Corpuzes appealed the NHA’s August 5,
1994 Letter-Decision tothe Office of the President (OP), which case was docketed as O.P. Case No.
5902.
33

On February 2, 1995, Teodorico filed an undated letter12 in O.P. Case No. 5902. In the said letter, he
directed the OP’s attention to the Rosetes and the Corpuzes’ resolve not to question the 62-square
meter allocation/award to him. At the same time, he manifested his assent to such allocation, thus:

Undersigned is satisfied with the 62 sq. m. lot awarded to him. However, in the adjudication of the
above-mentioned case and in furtherance of justice, it is prayed that:

1. The period within which refund to the undersigned by the spouses Jose and Remedios
Rosete, Neorimseand Felicitas Corpuz, and Felix and Marietta Briones of the purchase price
of the lots awarded to them be fixed, with interest thereon from March 21, 1991 until full
reimbursement is made;

2. The foregoing awardees be ordered likewise to reimburse to the undersigned the real
estate taxes paid on their respective lots from 1980, plus interest thereon, until full
reimbursement; and 3. Other relief in favor of the undersigned be issued.13

On November 19, 1997, the OP issued its Decision14 in O.P. Case No. 5902, dismissing the appeal
for being filed out of time.

On March 27, 1998, the OP issued a Resolution15 declaring that the above November 19, 1997
Decision in O.P. Case No. 5902 has become final and executory since no motion for reconsideration
was filed, nor appeal taken, by the parties.

In another July 28, 1999 letter16 to the NHA, Teodorico, the Rosetes, and the Corpuzes sought
approval of their request to subdivide the subject lot on an "as is, where is" basis as per NHA policy,
since it appeared that the parties’ respective allocations/awards did not correspond to the actual
areas occupied by them and thus could result in unwanted demolition of their existing
homes/structures.

In a November 12, 1999 Letter-Reply,17 the NHA informed the parties that the original
awards/allocationswere being retained; it also advised them to hire a surveyor for the purpose of
subdividing the subject lot in accordance with such awards.

Through counsel, Teodorico wrote back. In his November 23, 1999 letter,18 he reiterated his request
tosubdivide the subject lot onan "as is, where is" basis and to be reimbursed by his co-awardees for
his overpayments, with interest. This was followed by another March 29, 2001 letter19 by his counsel.

Receiving no response from the NHA regarding the above November 23, 1999 letter, Teodorico
senta May 7, 2003 letter cummotion for reconsideration20 to the OP, in which he sought a
reconsideration of the November 19, 1997 Decision in O.P. Case No. 5902. Heclaimed that the
August 5, 1994 LetterDecision of the NHA containing the award/allocation of the subject lot to the
parties is null and void as it violated the provisions of Presidential Decree No. 151721 (PD 1517) and
PD 2016;22 that the award of 40 square meters to the Brioneses is null and void as they were mere
"renters" (lessees); that because the August 5, 1994 Letter-Decision of the NHA is a nullity, it never
became final and executory. Thus, he prayed:

WHEREFORE, it is reiterated that the "as is, where is" policy of the NHA be followed in the instant
case and that Teodorico P. Rosete be reimbursed by Marietta Briones, et al. of the value of the lots
adjudicated in their favor and the real estate taxes he paid on the lots they occupy, plus interest
thereon to be determined by the NHA. Wewill not demand the cancellation of the awards to Marietta
Briones, et al. so as not to prejudice their respective families.23
34

In a September 8, 2003 Resolution,24 the OP denied Teodorico’s May 7, 2003 letter cummotion for
reconsideration, saying that –

Before this Office is the motion filed by Teodorico P. Rosete, requesting reconsideration of the
Decision of this Office dated November 19, 1997 dismissing the appeal for having been filed out of
time.

On March 27, 1998, this Office also declared the said Decision dated November 19, 1997 as having
become final and executory. Being so, this Office has no more jurisdiction over the case. There is
nothing left for the office a quo except to implement the letter-decision of the National Housing
Authority (NHA) dated October 24, 1994.25

Besides, contrary to appellants’ motion, the said NHA letter-decision is in accordance with NHA
Circular No. 13 dated February 19, 1982, pertinent provisions of which read:

"V. BENEFICIARIES SELECTION AND LOT ALLOCATION

1. The official ZIP censusand tagging shall be the primary basis for determining potential
program beneficiaries and structures or dwelling units in the area.

xxxx

4. Only those households included in the ZIP Census and who, in addition, qualify under the
provisions of the Code of Policies, are the beneficiaries of the Zonal Improvement Program.

5. A qualified censused-household is entitled to only one residential lot within the ZIP Project
area of Metro Manila."

Hence, the letter decision ofthe NHA is a valid judgment.

WHEREFORE, premises considered, the instant motion for reconsideration is hereby DENIED. Let
the records of the case be remanded to the office-a-quo for implementation.

SO ORDERED.26

Ruling of the Court of Appeals

Teodorico and his wife Pacita, the Rosetes, and the Corpuzes went up to the CA by Petition for
Review,27 docketed as CA-G.R. SP No. 79400. They essentially claimed that pursuant to the
"pertinent laws on Beneficiary Selection and Disposition of Homelots in Urban Bliss Projects,"28 the
Rosetes, the Corpuzes, and the Brioneses are not entitled to own a portion of the subject lot since
they were mere "renters" or lessees therein; for thisreason, the NHA’s August 5, 1994 Letter-
Decision and November 19, 1997 Decision and September 8, 2003 Resolution of the OP are null
and void. The Petition contained a prayer for the CA to order the NHA to allocatethe subject lot on
an "as is, where is" basis; that the assailed Decision and Resolution be stayed; and that the
Rosetes, the Corpuzes and the Brioneses be ordered to reimburse Teodorico in such manner as
originally prayed for byhim in the NHA and OP.

On October 30, 2006, the CA issued the questioned Decision, which held as follows:
35

Clearly, the Office of the President, in issuing the assailed Resolution, mainly anchored its denial
ofPetitioner TEODORICO’s motion for reconsideration of the Decision dated 19 November 1997 on
the finalityof said Decision, which accordingly, the said Office has no jurisdiction to disturb. We agree
with the Office of the President.

It bears emphasis that as early as 27 March 1998, the Office of the President had issued a
Resolution which essentially states, thus:

Considering that appellants in the above-entitled case have received certified copies ofthe decision
of this Office, dated November 17, 1997, as shown by registry return receipts attached to the
records’ copy of said decision, and as of March 23, 1998, no motion for reconsideration thereof has
been filed nor appeal taken to the proper court, this Office resolves to declare said decision, dated
November 19, 1997, to have become FINAL and EXECUTORY.

Necessarily therefore, the subsequent filing by Petitioner TEODORICO of a motion for


reconsideration of the Decision, supra. before the Office of the President did not produce any legal
effect as to warrant a reversal of the said Decision.

Generally, once a decision has become final and executory, it can no longer be modified or
otherwise disturbed. Thus, it is the ministerial duty of the proper judicial or quasi-judicial body to
order its execution, except when, after the decision has become final and executory, facts and
circumstances would transpire which render the execution impossible or unjust. On this regard, in
order to harmonize the disposition withthe prevailing circumstances, any interested party may ask a
competent court to stay its execution or prevent its enforcement.

However, the Petitioners failed to prove that the aforesaid exception is present in the case at bar.
Instead, they insist that Decisions/Resolutions of the NHA and of the Office of the President are
wanting in validity because they allegedly violated certain statutes and jurisprudence.

Sadly, We cannot sustain Petitioners’ theory.

xxxx

Accordingly, the findings of the NHA and of the Office of the President are perforce no longer open
for review.

xxxx

Withal, We find no legal as well as equitable reason for Us to discuss further the issue, supra, raised
by the Petitionersin the instant petition.

WHEREFORE, premises considered, the instant Petition is DENIED. The challenged Resolution of
the Office of the President is hereby AFFIRMED in toto.

SO ORDERED.29

Petitioners filed their Motion for Reconsideration,30 which the CA denied in its assailed December 22,
2006 Resolution. Hence, the present Petition.

Issues
36

Petitioners raise the following issues:

5.00.1 The Court of Appeals erred in ruling that petitioner Teodorico Rosete did not file an appeal
from the decision of the National Housing Authority;

5.00.2 The Court of Appeals erred in ruling that the decision of the Office of the President against
the appeal of Remedios Rosete and Felicitas Corpuz binds petitioner Teodorico Rosete; 5.00.3 The
Court of Appeals erred in failing to look into the merits of petitioner Teodorico Rosete’s claim over
the subject lot.31

Petitioners’ Arguments

Praying that the assailed CA Decision and Resolution be set aside and that the NHA’s August 5,
1994 Letter-Decision be modified – soas to allow: 1) the subdivision of the subject lot on an "as is,
where is" basis; 2) reimbursement/ refund by the respondents of Teodorico’s lot and tax
overpayments; and 3) the corresponding transfer of title to them – petitioners maintain in their
Petition and Consolidated Reply32 that Teodorico’s October 18, 1994 letter to the NHA – which he
allegedly sent on September 24, 1994 – should have been treated as a timely appeal to the OP, the
same having been filed with the NHA within the 30-day reglementary period prescribed by the latter
in its August 5, 1994 LetterDecision and pursuant to Section 1 of Administrative Order No. 18, series
of 198733of the OP (OP AO 18; Prescribing Rules and Regulations Governing Appeals to the Office
of the President of the Philippines). Thus, the CA’s pronouncement that Teodorico made no appeal
to the OP or that it was not timely filed is erroneous.

Petitioners add that since Teodorico’s October 18, 1994letter to the NHA – which should be treated
as an appeal to the OP – remains pending and unacted upon, then his case is still pending as far as
the OP is concerned; that the dismissal of the appeal through the November 19, 1997 Decision in
O.P. Case No. 5902 affected only the appellants therein, or the Rosetes and the Corpuzes, but not
Teodorico – whose appeal remained pending asa result of the OP’s failure to act on his October 18,
1994 letter cumappeal. They add thatTeodorico’s subsequent filing of his May 7, 2003 letter with the
OP seeking a reconsideration of the November 19, 1997 Decision in O.P. CaseNo. 5902 should not
have been taken against him by the CA, as it was prompted more by confusion engendered by the
OP’s failure to act on his October 18, 1994 letter cumappeal; the fact remains that he was not a
party appellant in said case, and thus could not be bound by the November 19, 1997judgment
therein rendered.

Finally, petitioners argue that the NHA committed error insubdividing the subject lot, as it failed to
accurately survey the same before making the awards; that the NHA failed to review the sketch
plans submitted by the NHA District Office which reflected clearly the existing position of the
structures built by the awardees; that the NHA decision would result in the unwarranted destruction
of such structures in order to conform to the respective allocations of the awardees; and that their
overpayments should be returned to them by the respondents, lest unjust enrichment results.

Respondents’ Arguments

On the other hand, the Rosetes in their Comment34 argue that the NHA’s August 5, 1994 Letter-
Decision is erroneous and unjust, because only the Brioneses stand to unduly benefit therefrom
since their existing lot area would be increased while that of the others would be decreased, thus
resulting in the destruction of their existing homes and structures.

The Corpuzes in their Comment35 claim that Teodorico’s October 18, 1994 letter to the NHA cannot
betreated as an appeal to the OP, and the NHA’s inaction or failure to act on the said letter should
37

be construed as an implied denial thereof which should have prompted Teodorico to takefurther
legal steps to protect his interests. They object to being required to pay for interests on the purchase
price and taxes advanced by Teodorico, claiming that this was unjust. Finally, they maintain that the
NHA is correct in allocating the subject lot the way it did among the parties; they should observe and
yield to the law and policy of the NHA, even if it required the destruction of their homes and
structures.

The Brioneses in their Comment36 plainly adopt the decisions of the NHA, the OP and the CA. They
particularly stress thatthe OP’s disposition has long become final and executory;that the courts
cannot interfere with the NHA’s discretion in awarding the subject lot; that in the absence of grave
abuse of discretion, the courts cannot overturn the OP’s judgment; and that petitioners have not
shown any valid ground to have the NHA and OP’s respective decisions reversed.

Our Ruling

The Court deniesthe Petition.

On August 5, 1994, the NHA rendered its Letter-Decision, which Teodorico received on September
24, 1994. In an October 18, 1994 letter to the NHA, Teodorico sought a reconsideration ofthe said
decision. This was followed by a July 28, 1999 letter to the NHA, where Teodorico, the Rosetes, and
the Corpuzes sought approval of their request to subdivide the subject lot on an "as is, where is"
basis. In a November 12, 1999 Letter-Reply, the NHA informed the parties that the original
awards/allocationswere being retained, and advised them to hire a surveyor for the purpose of
subdividing the subject lot in accordance with such awards. It can be said that the NHA’s November
12, 1999 Letter-Reply constituted not only a written response tothe July 28, 1999 letter of Teodorico,
the Rosetes, and the Corpuzes, buta denial as well of Teodorico’s October 18, 1994 letter cum
motion for reconsideration ofthe agency’sAugust 5, 1994 Letter-Decision. As such, Teodorico should
have thereafter filed an appealwith the OPwithin the prescribed period. However,instead of doing so,
he sent another letter to the NHA dated November 23, 1999 reiterating his request to subdivide the
subject lot on an "as is, where is" basis and to bereimbursed by his co-awardees for his
overpayments, withinterest. He likewise filed in O.P. Case No. 5902 a May 7, 2003 letter, in which
he sought a reconsideration of the November 19, 1997 Decision rendered in said case.

With his failure to timely appealthe NHA’s August 5, 1994 LetterDecision and its November 12, 1999
Letter-Reply denying his motion for reconsideration, and instead taking various erroneous courses of
action which did not properly direct his grievances at the right forum and within the prescribed
period, the NHA’s August 5,1994 Letter-Decision became final and executory as against Teodorico –
and the petitioners for that matter. In contemplation of law, petitioners did not at all file an appeal of
the NHA’s August 5, 1994 Letter Decision.

Contrary to petitioners’ claim, the Court cannot consider Teodorico’s October 18, 1994 letter to the
NHA as his appeal to the OP; it is properly a motion for reconsideration of the agency’s August 5,
1994 Letter-Decision. Indeed, OP AO 18 does not preclude the filing of a motion for reconsideration
with the agency which rendered the questioned decision; in reference to such motions for
reconsideration, OP AO 18 specifically states that "[t]he time during which a motion for
reconsideration has been pending with the Ministry/agency concerned shall be deducted from the
period for appeal."

With regard to O.P. Case No. 5902, Teodorico could not have validly intervened. He had no
personality to register his objections – through his undated letter which he filed on February 2, 1995
and his May 7,2003 letter in which he sought a reconsideration of the OP’s November 19, 1997
Decision; he was not a party – appellant or otherwise – in saidcase. Thus, "[h]e cannot impugn the
38

correctness of a judgment not appealed from by him. Hecannot assign such errors as are designed
to have the judgment modified."37 This view is ineffect taken by petitioners themselves, with their
argument in the instant Petition that since Teodorico was not an appellant in O.P. Case No.
5902,then he should not be bound by the November 19, 1997 judgment therein dismissing the
appeal. If he did not intend to be bound by the judgment therein, then he had no business
intervening in the case.

Since petitioners did not have the personality to intervene in O.P. Case No. 5902, then Teodorico
had no standing to file therein his May 7, 2003 letter cum motion for reconsideration. The OP was
thus correct indenying the same; in turn, the CA correctly affirmed the OP.

Notably, there is very little that petitioners can benefit from in obtaining a reversal of the assailed
Decision of the CA. For one, they do not dispute the award of 62 square meters in Teodorico’s
1âwphi1

favor; this has been made clear as early as in Teodorico’s undated letter to the OP which was filed
on February 2, 1995, where he indicated that he was "satisfied" with the award. For another,
petitioners do not seek to question the allocations made in favor of their co-awardees; in fact, in the
instant Petition, they openly declared that –

In closing and perhaps most important of all, petitioners would like to respectfully manifest to this
Honorable Court that they have deliberately not questioned the right of respondents to be potential
beneficiaries of the ZIP Census even if they had argued before the Court of Appeals that
respondents were mere renters. The reason for this is that, at the end of the day, the peace of the
community is paramount. x x x38

The petitioners' remaining point of contention is their claim for reimbursement. Sad to say, this Court
cannot order a refund of Teodorico's overpayments. First of all, NHA - the recipient of the
overpayment - cannot be ordered to make a refund, since Teodorico never prayed to recover from it;
in all his submissions - from the NHA, the OP, the CA, and all the way up to this Court - he
consistently sought reimbursement only from his co-awardees, not the NHA. Secondly, the specific
amount of overpayment is not fixed or determinable from the record; this being the case, it cannot be
determined how much exactly each of Teodorico's co-awardees owes him. Thirdly, this Court is not
a trier of facts; it cannot go out of its way to determine and analyze from the record what should be
returned to Teodorico, nor can it receive evidence on the matter. Suffice it to state that petitioners
are indeed entitled to be indemnified for paying for the value of the subject lot and the real property
taxes thereon over and above what was awarded to them, pursuant to Article 1236 of the Civil Code,
which states that "[w]hoever pays for another may demand from the debtor what he has paid, except
that if he paid without the knowledge or against the will of the debtor, he can recover only insofar as
the payment has been beneficial to the debtor." They may also recover from the NHA, applying the
principle of solutio indebiti.39

WHEREFORE, the Petition is DENIED. The assailed October 30, 2006 Decision and December 22,
2006 Resolution of the Court of Appeals in CA-G.R. SP No. 79400 are AFFIRMED.

SO ORDERED.

=====================================================================================

Republic of the Philippines


SUPREME COURT
Baguio City
39

THIRD DIVISION

G.R. No. 175540 April 7, 2014

DR. FILOTEO A. ALANO, Petitioner,


vs.
ZENAIDA MAGUD-LOGMAO, Respondent.

DECISION

PERALTA, J.:

This deals with the Petition for Review on Certiorari under Rule 45 of the Rules of Court praying that
the Decision1of the Court of Appeals (CA), dated March 31, 2006, adjudging petitioner liable for
damages, and the Resolution2dated November 22, 2006, denying petitioner's motion for
reconsideration thereof, be reversed and set aside.

The CA's narration of facts is accurate, to wit:

Plaintiff-appellee Zenaida Magud-Logmao is the mother of deceased Arnelito Logmao. Defendant-


appellant Dr. Filoteo Alano is the Executive Director of the National Kidney Institute (NKI).

At around 9:50 in the evening of March 1, 1988, Arnelito Logmao, then eighteen (18) years old, was
brought to the East Avenue Medical Center (EAMC) in Quezon City by two sidewalk vendors, who
allegedly saw the former fall from the overpass near the Farmers’ Market in Cubao, Quezon City.
The patient’s data sheet identified the patient as Angelito Lugmoso of Boni Avenue, Mandaluyong.
However, the clinical abstract prepared by Dr. Paterno F. Cabrera, the surgical resident on-duty at
the Emergency Room of EAMC, stated that the patient is Angelito [Logmao].

Dr. Cabrera reported that [Logmao] was drowsy with alcoholic breath, was conscious and coherent;
that the skull x-ray showed no fracture; that at around 4:00 o’clock in the morning of March 2, 1988,
[Logmao] developed generalized seizures and was managed by the neuro-surgery resident on-duty;
that the condition of [Logmao] progressively deteriorated and he was intubated and ambu-bagging
support was provided; that admission to the Intensive Care Unit (ICU) and mechanical ventilator
support became necessary, but there was no vacancy at the ICU and all the ventilator units were
being used by other patients; that a resident physician of NKI, who was rotating at EAMC, suggested
that [Logmao] be transferred to NKI; and that after arrangements were made, [Logmao] was
transferred to NKI at 10:10 in the morning.

At the NKI, the name Angelito [Logmao] was recorded as Angelito Lugmoso. Lugmoso was
immediately attended to and given the necessary medical treatment. As Lugmoso had no relatives
around, Jennifer B. Misa, Transplant Coordinator, was asked to locate his family by enlisting police
and media assistance. Dr. Enrique T. Ona, Chairman of the Department of Surgery, observed that
the severity of the brain injury of Lugmoso manifested symptoms of brain death. He requested the
Laboratory Section to conduct a tissue typing and tissue cross-matching examination, so that should
Lugmoso expire despite the necessary medical care and management and he would be found to be
a suitable organ donor and his family would consent to organ donation, the organs thus donated
could be detached and transplanted promptly to any compatible beneficiary.

Jennifer Misa verified on the same day, March 2, 1988, from EAMC the identity of Lugmoso and,
upon her request, she was furnished by EAMC a copy of the patient’s date sheet which bears the
40

name Angelito Lugmoso, with address at Boni Avenue, Mandaluyong. She then contacted several
radio and television stations to request for air time for the purpose of locating the family of Angelito
Lugmoso of Boni Avenue, Mandaluyong, who was confined at NKI for severe head injury after
allegedly falling from the Cubao overpass, as well as Police Station No. 5, Eastern Police District,
whose area of jurisdiction includes Boni Avenue, Mandaluyong, for assistance in locating the
relatives of Angelito Lugmoso. Certifications were issued by Channel 4, ABS-CBN and GMA
attesting that the request made by the NKI on March 2, 1988 to air its appeal to locate the family and
relatives of Angelito Lugmoso of Boni Avenue, Mandaluyong was accommodated. A Certification
was likewise issued by Police Station No. 5, Eastern Police District, Mandaluyong attesting to the
fact that on March 2, 1988, at about 6:00 p.m., Jennifer Misa requested for assistance to
immediately locate the family and relatives of Angelito Lugmoso and that she followed up her
request until March 9, 1988.

On March 3, 1988, at about 7:00 o’clock in the morning, Dr. Ona was informed that Lugmoso had
been pronounced brain dead by Dr. Abdias V. Aquino, a neurologist, and by Dr. Antonio Rafael, a
neurosurgeon and attending physician of Lugmoso, and that a repeat electroencephalogram (EEG)
was in progress to confirm the diagnosis of brain death. Two hours later, Dr. Ona was informed that
the EEG recording exhibited a flat tracing, thereby confirming that Lugmoso was brain dead. Upon
learning that Lugmoso was a suitable organ donor and that some NKI patients awaiting organ
donation had blood and tissue types compatible with Lugmoso, Dr. Ona inquired from Jennifer Misa
whether the relatives of Lugmoso had been located so that the necessary consent for organ
donation could be obtained. As the extensive search for the relatives of Lugmoso yielded no positive
result and time being of the essence in the success of organ transplantation, Dr. Ona requested Dr.
Filoteo A. Alano, Executive Director of NKI, to authorize the removal of specific organs from the body
of Lugmoso for transplantation purposes. Dr. Ona likewise instructed Dr. Rose Marie Rosete-Liquete
to secure permission for the planned organ retrieval and transplantation from the Medico-Legal
Office of the National Bureau of Investigation (NBI), on the assumption that the incident which lead
to the brain injury and death of Lugmoso was a medico legal case.

On March 3, 1988, Dr. Alano issued to Dr. Ona a Memorandum, which reads as follows:

This is in connection with the use of the human organs or any portion or portions of the human body
of the deceased patient, identified as a certain Mr. Angelito Lugmoso who was brought to the
National Kidney Institute on March 2, 1988 from the East Avenue Medical Center.

As shown by the medical records, the said patient died on March 3, 1988 at 9:10 in the morning due
to craniocerebral injury. Please make certain that your Department has exerted all reasonable efforts
to locate the relatives or next of kin of the said deceased patient such as appeal through the radios
and television as well as through police and other government agencies and that the NBI [Medico-
Legal] Section has been notified and is aware of the case.

If all the above has been complied with, in accordance with the provisions of Republic Act No. 349
as amended and P.D. 856, permission and/or authority is hereby given to the Department of Surgery
to retrieve and remove the kidneys, pancreas, liver and heart of the said deceased patient and to
transplant the said organs to any compatible patient who maybe in need of said organs to live and
survive.

A Certification dated March 10, 1988 was issued by Dr. Maximo Reyes, Medico-Legal Officer of the
NBI, stating that he received a telephone call from Dr. Liquete on March 3, 1988 at 9:15 a.m.
regarding the case of Lugmoso, who was declared brain dead; that despite efforts to locate the
latter’s relatives, no one responded; that Dr. Liquete sought from him a second opinion for organ
41

retrieval for donation purposes even in the absence of consent from the family of the deceased; and
that he verbally agreed to organ retrieval.

At 3:45 in the afternoon of March 3, 1988, a medical team, composed of Dr. Enrique Ona, as
principal surgeon, Drs. Manuel Chua-Chiaco, Jr., Rose Marie Rosete-Liquete, Aurea Ambrosio,
Ludivino de Guzman, Mary Litonjua, Jaime Velasquez, Ricardo Fernando, and Myrna Mendoza,
removed the heart, kidneys, pancreas, liver and spleen of Lugmoso. The medical team then
transplanted a kidney and the pancreas of Lugmoso to Lee Tan Hoc and the other kidney of
Lugmoso to Alexis Ambustan. The transplant operation was completed at around 11:00 o’clock in
the evening of March 3, 1988.

On March 4, 1988, Dr. Antonio R. Paraiso, Head of the Cadaver Organ Retrieval Effort (CORE)
program of NKI, made arrangements with La Funeraria Oro for the embalmment of the cadaver of
Lugmoso good for a period of fifteen (15) days to afford NKI more time to continue searching for the
relatives of the latter. On the same day, Roberto Ortega, Funeral Consultant of La Funeraria Oro,
sent a request for autopsy to the NBI. The Autopsy Report and Certification of Post-Mortem
Examination issued by the NBI stated that the cause of death of Lugmoso was intracranial
hemorrhage secondary to skull fracture.

On March 11, 1988, the NKI issued a press release announcing its successful double organ
transplantation. Aida Doromal, a cousin of plaintiff, heard the news aired on television that the donor
was an eighteen (18) year old boy whose remains were at La Funeraria Oro in Quezon City. As the
name of the donor sounded like Arnelito Logmao, Aida informed plaintiff of the news report.

It appears that on March 3, 1988, Arlen Logmao, a brother of Arnelito, who was then a resident of
17-C San Pedro Street, Mandaluyong, reported to Police Station No. 5, Eastern Police District,
Mandaluyong that the latter did not return home after seeing a movie in Cubao, Quezon City, as
evidenced by a Certification issued by said Station; and that the relatives of Arnelito were likewise
informed that the latter was missing. Upon receiving the news from Aida, plaintiff and her other
children went to La Funeraria Oro, where they saw Arnelito inside a cheap casket.

On April 29, 1988, plaintiff filed with the court a quo a complaint for damages against Dr. Emmanuel
Lenon, Taurean Protectors Agency, represented by its Proprietor, Celso Santiago, National Kidney
Institute, represented by its Director, Dr. Filoteo A. Alano, Jennifer Misa, Dr. Maximo Reyes, Dr.
Enrique T. Ona, Dr. Manuel Chua-Chiaco, Jr., Dr. Rose Marie O. Rosete-Liquete, Dr. Aurea Z.
Ambrosio, Dr. Ludivino de Guzman, Dr. Mary Litonjua, Dr. Jaime Velasquez, Dr. Ricardo Fernando,
Dr. Myrna Mendoza, Lee Tan Koc, Alexis Ambustan, Dr. Antonio R. Paraiso, La Funeraria Oro, Inc.,
represented by its President, German E. Ortega, Roberto Ortega alias Bobby Ortega, Dr. Mariano B.
Cueva, Jr., John Doe, Peter Doe, and Alex Doe in connection with the death of her son Arnelito.
Plaintiff alleged that defendants conspired to remove the organs of Arnelito while the latter was still
alive and that they concealed his true identity.

On January 17, 2000, the court a quo rendered judgment finding only Dr. Filoteo Alano liable for
damages to plaintiff and dismissing the complaint against the other defendants for lack of legal
basis.3

After finding petitioner liable for a quasi-delict, the Regional Trial Court of Quezon City (RTC)
ordered petitioner to pay respondent ₱188,740.90 as actual damages; ₱500,000.00 as moral
damages; ₱500,000.00 as exemplary damages; ₱300,000.00 as attorney's fees; and costs of suit.
Petitioner appealed to the CA.

On March 31, 2006, the CA issued its Decision, the dispositive portion of which reads as follows:
42

WHEREFORE, the Decision appealed from is AFFIRMED, with MODIFICATION by DELETING the
award of ₱188,740.90 as actual damages and REDUCING the award of moral damages to
₱250,000.00, the award of exemplary damages to ₱200,000.00 and the award of attorney's fees to
₱100,000.00.

SO ORDERED.4

Petitioner then elevated the matter to this Court via a petition for review on certiorari, where the
following issues are presented for resolution:

A. WHETHER THE COURT OF APPEALS DISREGARDED EXISTING JURISPRUDENCE


PRONOUNCED BY THIS HONORABLE SUPREME COURT IN HOLDING PETITIONER
DR. FILOTEO ALANO LIABLE FOR MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY'S FEES DESPITE THE FACT THAT THE ACT OF THE PETITIONER IS NOT
THE PROXIMATE CAUSE NOR IS THERE ANY FINDING THAT THE ACT OF THE
PETITIONER WAS THE PROXIMATE CAUSE OF THE INJURY OR DAMAGE ALLEGEDLY
SUSTAINED BY RESPONDENT ZENAIDA MAGUD-LOGMAO.

B. WHETHER THE COURT OF APPEALS GRAVELY ERRED IN REFUSING AND/OR


FAILING TO DECLARE THAT PETITIONER DR. ALANO ACTED IN GOOD FAITH AND
PURSUANT TO LAW WHEN HE ISSUED THE AUTHORIZATION TO REMOVE AND
RETRIEVE THE ORGANS OF ANGELITO LUGMOSO (LATER IDENTIFIED TO BE IN
FACT ARNELITO LOGMAO) CONSIDERING THAT NO NEGLIGENCE CAN BE
ATTRIBUTED OR IMPUTED ON HIM IN HIS PERFORMANCE OF AN ACT MANDATED BY
LAW.

C. WHETHER THE COURT OF APPEALS GRAVELY ERRED IN AWARDING


RESPONDENT ZENAIDA MAGUD-LOGMAO MORAL AND EXEMPLARY DAMAGES AND
ATTORNEY'S FEES THAT ARE NOT IN ACCORDANCE WITH AND ARE CONTRARY TO
ESTABLISHED JURISPRUDENCE.5

The first two issues boil down to the question of whether respondent's sufferings were brought about
by petitioner's alleged negligence in granting authorization for the removal or retrieval of the internal
organs of respondent's son who had been declared brain dead.

Petitioner maintains that when he gave authorization for the removal of some of the internal organs
to be transplanted to other patients, he did so in accordance with the letter of the law, Republic Act
(R.A.) No. 349, as amended by Presidential Decree (P.D.) 856, i.e., giving his subordinates
instructions to exert all reasonable efforts to locate the relatives or next of kin of respondent's son. In
fact, announcements were made through radio and television, the assistance of police authorities
was sought, and the NBI Medico-Legal Section was notified. Thus, petitioner insists that he should
not be held responsible for any damage allegedly suffered by respondent due to the death of her son
and the removal of her son’s internal organs for transplant purposes.

The appellate court affirmed the trial court's finding that there was negligence on petitioner's part
when he failed to ensure that reasonable time had elapsed to locate the relatives of the deceased
before giving the authorization to remove said deceased's internal organs for transplant purposes.
However, a close examination of the records of this case would reveal that this case falls under one
of the exceptions to the general rule that factual findings of the trial court, when affirmed by the
appellate court, are binding on this Court. There are some important circumstances that the lower
courts failed to consider in ascertaining whether it was the actions of petitioner that brought about
the sufferings of respondent.6
43

The Memorandum dated March 3, 1988 issued by petitioner, stated thus:

As shown by the medical records, the said patient died on March 3, 1988 at 9:10 in the morning due
to craniocerebral injury. Please make certain that your Department has exerted all reasonable efforts
to locate the relatives or next-of-kin of the said deceased patient, such as appeal through the radios
and television, as well as through police and other government agencies and that the NBI [Medico-
Legal] Section has been notified and is aware of the case.

If all the above has been complied with, in accordance with the provisions of Republic Act No. 349
as amended and P.D. 856, permission and/or authority is hereby given to the Department of Surgery
to retrieve and remove the kidneys, pancreas, liver and heart of the said deceased patient and to
transplant the said organs to any compatible patient who maybe in need of said organs to live and
survive.7

A careful reading of the above shows that petitioner instructed his subordinates to "make certain"
that "all reasonable efforts" are exerted to locate the patient's next of kin, even enumerating ways in
which to ensure that notices of the death of the patient would reach said relatives. It also clearly
stated that permission or authorization to retrieve and remove the internal organs of the deceased
was being given ONLY IF the provisions of the applicable law had been complied with. Such
instructions reveal that petitioner acted prudently by directing his subordinates to exhaust all
reasonable means of locating the relatives of the deceased. He could not have made his directives
any clearer. He even specifically mentioned that permission is only being granted IF the Department
of Surgery has complied with all the requirements of the law. Verily, petitioner could not have been
faulted for having full confidence in the ability of the doctors in the Department of Surgery to
comprehend the instructions, obeying all his directives, and acting only in accordance with the
requirements of the law.

Furthermore, as found by the lower courts from the records of the case, the doctors and personnel of
NKI disseminated notices of the death of respondent's son to the media and sought the assistance
of the appropriate police authorities as early as March 2, 1988, even before petitioner issued the
Memorandum. Prior to performing the procedure for retrieval of the deceased's internal organs, the
doctors concerned also the sought the opinion and approval of the Medico-Legal Officer of the NBI.

Thus, there can be no cavil that petitioner employed reasonable means to disseminate notifications
intended to reach the relatives of the deceased. The only question that remains pertains to the
sufficiency of time allowed for notices to reach the relatives of the deceased.

If respondent failed to immediately receive notice of her son's death because the notices did not
properly state the name or identity of the deceased, fault cannot be laid at petitioner's door. The trial
and appellate courts found that it was the EAMC, who had the opportunity to ascertain the name of
the deceased, who recorded the wrong information regarding the deceased's identity to NKI. The
NKI could not have obtained the information about his name from the patient, because as found by
the lower courts, the deceased was already unconscious by the time he was brought to the NKI.

Ultimately, it is respondent's failure to adduce adequate evidence that doomed this case. As stated
1âw phi 1

in Otero v. Tan,8"[i]n civil cases, it is a basic rule that the party making allegations has the burden of
proving them by a preponderance of evidence. The parties must rely on the strength of their own
evidence and not upon the weakness of the defense offered by their opponent."9 Here, there is to
proof that, indeed, the period of around 24 hours from the time notices were disseminated, cannot
be considered as reasonable under the circumstances. They failed to present any expert witness to
prove that given the medical technology and knowledge at that time in the 1980's, the doctors could
or should have waited longer before harvesting the internal organs for transplantation.
44

Verily, the Court cannot, in conscience, agree with the lower court. Finding petitioner liable for
damages is improper. It should be emphasized that the internal organs of the deceased were
removed only after he had been declared brain dead; thus, the emotional pain suffered by
respondent due to the death of her son cannot in any way be attributed to petitioner. Neither can the
Court find evidence on record to show that respondent's emotional suffering at the sight of the pitiful
state in which she found her son's lifeless body be categorically attributed to petitioner's conduct.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals, dated March 31,
2006, is REVERSED and SET ASIDE. The complaint against petitioner is hereby DISMISSED.

SO ORDERED.

CONCURRING OPINION

"What you leave behind is not


what is engraved in stone monuments,
but what is woven in the lives of others. "

Pericles

LEONEN, J.:

On February 28, 2014, the Philippines broke the Guinness World Record for the most number of
people signing up to be organ donors within an hour on a single site. A total of 3,548 people trooped
to the Polytechnic University of the Philippines to pledge their organs as part of the "I'm a Lifeline"
campaign of the Philippine Network for Organ Sharing under the Department of Health.1

This. court is now faced with the opportunity to confront the issues concerning organ donation and
transplantation for the first time since the procedure was introduced in this country in 1983.

Before us is a petition for review under Rule 45 of the Rules of Court, assailing the decision 2 of the
Court of Appeals dated March 31, 2006 and its resolution dated November 22, 2006 in CA-G.R. CV
No. 67399 entitled Zenaida Magud-Logmao v. Dr. Emmanuel Lenon, et al. The appellate court
affirmed the decision3 dated January 17, 2000 of the Regional Trial Court of Quezon City, Branch
100, which found Dr. Filoteo A. Alano, then the Executive Director of the National Kidney
Institute,4 liable for damages to Zenaida Logmao.

The facts, as found by the lower courts, are as follows:

On March 1, 1988, at 9:50 p.m., Arnelito Logmao, 18 years old, was brought to the East Avenue
Medical Center in Quezon City by two sidewalk vendors who allegedly saw him fall from the
overpass near Farmer’s Market, Cubao.5The security guards of the hospital noted in their blotter that
when he was admitted to the hospital, he was drunk.6He gave his name as Arnelito Logmao and his
address as Boni Avenue, Mandaluyong.7

In the emergency room, Arnelito Logmao was conscious and was interviewed by Dr. Paterno
Cabrera, the duty resident physician.8 The patient’s data sheet, prepared by Dr. Cabrera, identified
the patient as Angelito Lugmoso (and not Arnelito Logmao) of Boni Avenue, Mandaluyong.9 He was
subjected to an x-ray examination, but the examination did not show him suffering from any skull
fractures or head injuries.10
45

At around 4:00 a.m. on March 2, 1988, the patient developed generalized seizures, and his condition
progressively deteriorated.11 Admission to the Intensive Care Unit (ICU) and mechanical ventilatory
support became necessary, but there was no vacancy at the East Avenue Medical Center ICU.12 A
resident physician at National Kidney Institute, Dr. Emmanuel Lenon, who was then conducting
rounds at East Avenue Medical Center, suggested that the patient be transferred to the National
Kidney Institute.13 After arrangements were made, the patient was transferred to the National Kidney
Institute at 10:10 a.m. on the same day.14

When the patient arrived at the National Kidney Institute, his name was recorded as Angelito
Lugmoso.15 As the patient was admitted without any relatives by his side, Jennifer B. Misa,
Transplant Coordinator, was asked to locate the patient’s family by enlisting police and media
assistance.16 Dr. Enrique T. Ona, Chairman of the Department of Surgery, observed that the patient’s
brain injury was so severe that it manifested symptoms of brain death.17 Upon his request, the
Laboratory Section conducted a tissue typing and tissue cross-matching examination on the
patient.18 The request was done on the basis that if the deceased patient is found to be a suitable
organ donor and has his family’s consent, the organs could be harvested and transplanted promptly
to any of the compatible beneficiaries.19

Jennifer Misa verified the identity of the patient with the East Avenue Medical Center on the same
day or March 2, 1988.20 Upon her request, the hospital furnished her a copy of the patient’s data
sheet which bore the name Angelito Lugmoso with Boni Avenue, Mandaluyong, as his
address.21 She then contacted several radio and television stations and requested for airtime in her
search for the family of Angelito Lugmoso.22 Her request was granted by Channel 4, ABS-CBN, and
GMA.23 Police Station No. 5, Eastern Police District, Mandaluyong, issued a certification attesting
that on March 2, 1988, at about 6:00 p.m., Jennifer Misa requested for assistance to immediately
locate the family and relatives of Angelito Lugmoso and that she followed up her request until March
9, 1988.24

On March 3, 1988 at about 7:00 a.m., Dr. Ona was informed that the patient was pronounced brain
dead by Dr. Abdias V. Aquino, a neurologist, and Dr. Antonio Rafael, the attending physician of the
patient, and that another electroencephalogram (EEG) was in progress to confirm the diagnosis.25 At
about 9:00 a.m., Dr. Ona was informed that the EEG recording showed a flat tracing, confirming that
the patient was brain dead.26

Upon learning that the patient was a suitable organ donor and that there were some National Kidney
Institute patients who were compatible donees, Dr. Ona inquired from Jennifer Misa whether the
patient’s relatives have been located so that the necessary consent for organ donation could be
obtained.27

Since no relatives of Angelito Lugmoso could be found despite the ongoing search, Dr. Ona
requested Dr. Filoteo A. Alano, Executive Director of the National Kidney Institute, to authorize the
removal of specific organs from the body for transplantation purposes.28 Dr. Ona likewise requested
Dr. Rose Marie Rosete-Liquete to secure permission from the National Bureau of Investigation’s
Medico-Legal Office for organ retrieval and transplantation, on the assumption that the incident
which led to the death of the patient was a medico-legal case.29

On March 3, 1988, Dr. Alano issued to Dr. Ona a memorandum which states:

This is in connection with the use of the human organs or any portion or portions of the human body
of the deceased patient, identified as a certain Mr. Angelito Lugmoso who was brought to the
National Kidney Institute on March 2, 1988 from the East Avenue Medical Center.
46

As shown by the medical records, the said patient died on March 3, 1988 at 9:10 in the morning due
to craniocerebral injury. Please make certain that your Department has exerted all reasonable efforts
to locate the relatives or next of kin of the said deceased patient such as appeal through the radios
and television as well as through police and other government agencies and that the NBI
Medicolegal Section has been notified and is aware of the case.

If all the above has been complied with, in accordance with the provisions of Republic Act No. 349
as amended and P.D. 856, permission and/or authority is hereby given to the Department of Surgery
to retrieve and remove the kidneys, pancreas, liver and heart of the said deceased patient and to
transplant the said organs to any compatible patient who maybe in need of said organs to live and
survive.30 (Emphasis supplied)

Dr. Maximo Reyes, Medico-Legal Officer of the National Bureau of Investigation, issued a
certification dated March 10, 1988, stating that he received a telephone call from Dr. Liquete on
March 3, 1988 at 9:15 a.m. regarding the case.31 He certified that despite efforts to locate Angelito
Lugmoso’s relatives, no one responded. Dr. Liquete also sought from Dr. Reyes a second opinion on
organ donation even in the absence of consent from the family of the deceased patient, and Dr.
Reyes verbally agreed to the organ retrieval.32

On March 3, 1988 at 3:45 p.m., a medical team led by Dr. Ona removed the heart, kidneys,
pancreas, liver, and spleen of the deceased patient.33 The medical team then transplanted a kidney
and the pancreas to Lee Tan Koc and the other kidney to Alexis Ambustan.34 The transplant
operation was completed around 11:00 p.m. on the same day.35

On March 4, 1988, Dr. Antonio R. Paraiso, Head of the Cadaver Organ Retrieval Effort (CORE)
program of the National Kidney Institute, made arrangements with La Funeraria Oro for the
embalming of the cadaver for up to 15 days to give the National Kidney Institute more time to
continue searching for the relatives of the deceased patient.36

On March 11, 1988, the National Kidney Institute issued a press release announcing its first
successful double organ transplantation.37 Aida Doromal, a relative of Arnelito’s mother, Zenaida
Logmao, saw the news on television that the donor was an 18-year-old boy whose remains were laid
at La Funeraria Oro in Quezon City.38 Since the name of the donor sounded like Arnelito Logmao,
Aida informed Zenaida.39 Upon receiving the news from Aida, Zenaida and her other children went to
La Funeraria Oro where they were able to retrieve Arnelito’s body.40

On April 29, 1988, Zenaida filed with the Regional Trial Court a complaint for damages against Dr.
Lenon, Taurean Protectors Agency, National Kidney Institute, Jennifer Misa, Dr. Alano, Dr. Reyes,
Dr. Ona, Dr. Liquete, the entire medical team that conducted the transplant, Lee Tan Koc, Alexis
Ambustan, Dr. Paraiso, La Funeraria Oro, Dr. Mariano B. Cueva, Jr., John Doe, Peter Doe, and Alex
Doe in connection with the death of her son, Arnelito.41 She alleged that all of them conspired to
remove the organs of Arnelito when he was still alive and that they concealed his true identity.42

On January 17, 2000, the Regional Trial Court rendered judgment43 dismissing the complaint against
all defendants but finding Dr. Alano liable for damages. The trial court found Dr. Alano negligent
under Article 2176 of the Civil Code for authorizing the retrieval of the deceased patient’s organs
without first exerting reasonable efforts to locate his relatives, in direct violation of the law. According
to the trial court:

x x x. In the natural course of things, a search or inquiry of anything requires at least two days of
probing and seeking to be actually considered as having made said earnest efforts. But a one-day
campaign, especially with regard to a subject matter as important as a person’s disposal into the
47

afterlife certainly warrants a longer time for investigation. Indeed, what is "reasonable" is a relative
term, dependent on the attendant circumstances of the case (Philippine Law Dictionary, citing
Katague vs. Lagana, CV 70164, March 7, 1986). Here, what was involved was the detachment of
the vital organs of plaintiff’s 18-year[-]old son from his body without her knowledge and consent, and
which act was upon the authority issued by defendant Dr. Alano as head of the hospital. The matter
at hand was of a very sensitive nature that an inquiry of less than one day cannot be deemed as
sufficient and reasonable to exculpate him from liability. x x x.44 (Emphasis supplied)

Dr. Alano appealed45 the ruling with the Court of Appeals.

On March 31, 2006, the Court of Appeals rendered its decision46 affirming the ruling of the Regional
Trial Court with modifications.

The appellate court deleted the award for actual damages representing the expenses for autopsy
fees, and wake and funeral services, since Arnelito’s family would have still incurred those expenses
even if no organ retrieval was done on the body.47 It also deleted the award of compensatory
damages of ₱50,000.00 per organ retrieved since it was not shown that Dr. Alano was the recipient
of the organ transplants or that he received any consideration from the transplant patients.48 Finally, it
affirmed the award of damages but reduced moral damages from ₱500,000.00 to ₱250,000.00,
exemplary damages from ₱500,000.00 to ₱200,000.00, and attorney’s fees from ₱300,000.00 to
₱100,000.00.49

Dr. Alano now comes before this court via a petition for review on certiorari. He argues50 that there
was no legal basis for the Court of Appeals to hold him liable for damages since there was no finding
that he was the proximate cause of the injury or damage sustained by Zenaida. He also argues that
he acted in good faith and pursuant to law when he issued the authorization for the organ retrieval.

Thus, the issue before this court is whether Dr. Alano should be held liable for his alleged negligence
in authorizing the removal and retrieval of Arnelito’s internal organs without Zenaida’s consent.

I agree with the ponencia that Dr. Alano should not be found liable, but I take this opportunity to
further expound on the issues presented to this court.

As a general rule, only questions of law are to be considered in a petition for review under Rule 45.
There are, however, recognized exceptions to the rule, one of which is when "the Court of Appeals
fails to notice certain relevant facts which, if properly considered, will justify a different conclusion x x
x."51

Dr. Alano’s acts were not reckless, negligent or unreasonable. It was not his acts that caused the
alleged injury to the deceased patient’s relatives. Considering the circumstances that he had to face,
the search he ordered for the deceased patient’s relatives were all that ordinary prudence required.
His retrieval of the deceased patient’s organs was done legally and after allowing a reasonable time
to lapse. The conclusions of the trial court and the appellate court were, therefore, correctly reversed
and set aside.

The elements of a quasi-delict

In cases involving quasi-delict and torts, the plaintiff complains that the acts of a defendant caused
him or her injury. In order to be actionable, the act should have been committed with the intention of
injuring the plaintiff or was committed recklessly or negligently or one which, even when done with
the proper care, held such high risk for injury to others that it will be presumed by law to be
actionable.
48

The lower courts are all in agreement that Dr. Alano’s participation in the organ retrieval constituted
a quasi-delict under Article 2176 of the Civil Code for which he should be liable for damages.

This conclusion is erroneous.

Article 2176 may not be the proper legal basis for the cause of action. This article defines a quasi-
delict as:

Article 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.

The elements of a quasi-delict are: (1) an act or omission; (2) the presence of fault or negligence in
the performance or non-performance of the act; (3) injury; (4) a causal connection between the
negligent act and the injury; and (5) no pre-existing contractual relation. Jurisprudence, however,
specifies four (4) essential elements: "(1) duty; (2) breach; (3) injury; and (4) proximate causation."52

As a general rule, any act or omission coming under the purview of Article 2176 gives rise to a cause
of action under quasi-delict. This, in turn, gives the basis for a claim of damages. Verily, Article 1157
of the Civil Code provides as follows:

Article 1157. Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts. (Emphasis supplied)

Article 2176 is not an all-encompassing enumeration of all actionable wrongs which can give rise to
the liability for damages. Under the Civil Code, acts done in violation of Articles 19, 20, and 21 will
also give rise to damages. The provisions state as follows:

Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith.

Article 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, good customs, or public policy shall compensate the latter for the damage.

Baksh v. Court of Appeals53 elaborates on the distinctions:


49

x x x. 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. 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.54 (Emphasis supplied)

Yuchengco v. Manila Chronicle Publishing Corporation55 further elaborates on tort based on the
concept of abuse of right:

The principle of abuse of rights as enshrined in Article 19 of the Civil Code provides:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.

This provision of law sets standards which must be observed in the exercise of one’s rights as well
as in the performance of its duties, to wit: to act with justice; give everyone his due; and observe
honesty and good faith.

In Globe Mackay Cable and Radio Corporation v. Court of Appeals, it was elucidated that while
Article 19 "lays down a rule of conduct for the government of human relations and for the
maintenance of social order, it does not provide a remedy for its violation. Generally, an action for
damages under either Article 20 or Article 21 would be proper." The Court said:

One of the more notable innovations of the New Civil Code is the codification of "some basic
principles that are to be observed for the rightful relationship between human beings and for the
stability of the social order." [REPORT ON THE CODE COMMISSION ON THE PROPOSED CIVIL
CODE OF THE PHILIPPINES, p. 39]. The framers of the Code, seeking to remedy the defect of the
old Code which merely stated the effects of the law, but failed to draw out its spirit, incorporated
certain fundamental precepts which were "designed to indicate certain norms that spring from the
fountain of good conscience" and which were also meant to serve as "guides for human conduct
[that] should run as golden threads through society, to the end that law may approach its supreme
ideal, which is the sway and dominance of justice." (Id.) Foremost among these principles is that
pronounced in Article 19 which provides:

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.

This article, known to contain what is commonly referred to as the principle of abuse of rights, sets
certain standards which must be observed not only in the exercise of one's rights, but also in the
performance of one's duties. These standards are the following: to act with justice; to give everyone
his due; and to observe honesty and good faith. The law, therefore, recognizes a primordial limitation
on all rights; that in their exercise, the norms of human conduct set forth in Article 19 must be
observed. A right, though by itself legal because recognized or granted by law as such, may
nevertheless become the source of some illegality. When a right is exercised in a manner which
does not conform with the norms enshrined in Article 19 and results in damage to another, a legal
wrong is thereby committed for which the wrongdoer must be held responsible. But while Article 19
50

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.

Corollarily, Article 20 provides that "every person who, contrary to law, willfully or negligently causes
damage to another shall indemnify the latter for the same." It speaks of the general sanctions of all
other provisions of law which do not especially provide for its own sanction. When a right is
exercised in a manner which does not conform to the standards set forth in the said provision and
results in damage to another, a legal wrong is thereby committed for which the wrongdoer must be
responsible. Thus, if the provision does not provide a remedy for its violation, an action for damages
under either Article 20 or Article 21 of the Civil Code would be proper.56 (Emphasis supplied)

Article 19 is the general rule which governs the conduct of human relations. By itself, it is not the
basis of an actionable tort. Article 19 describes the degree of care required so that an actionable tort
may arise when it is alleged together with Article 20 or Article 21.

Article 20 concerns violations of existing law as basis for an injury. It allows recovery should the act
have been willful or negligent. Willful may refer to the intention to do the act and the desire to
achieve the outcome which is considered by the plaintiff in tort action as injurious. Negligence may
refer to a situation where the act was consciously done but without intending the result which the
plaintiff considers as injurious.

Article 21, on the other hand, concerns injuries that may be caused by acts which are not
necessarily proscribed by law. This article requires that the act be willful, that is, that there was an
intention to do the act and a desire to achieve the outcome. In cases under Article 21, the legal
issues revolve around whether such outcome should be considered a legal injury on the part of the
plaintiff or whether the commission of the act was done in violation of the standards of care required
in Article 19.

Article 2176 covers situations where an injury happens through an act or omission of the defendant.
When it involves a positive act, the intention to commit the outcome is irrelevant. The act itself must
not be a breach of an existing law or a pre-existing contractual obligation. What will be considered is
whether there is "fault or negligence" attending the commission of the act which necessarily leads to
the outcome considered as injurious by the plaintiff. The required degree of diligence will then be
assessed in relation to the circumstances of each and every case.

Article 2176 should not have been the basis for the cause of action in this case. Rather, it should
have been Article 20, which is applicable when there is a violation of law.

The law that is applicable is the third paragraph of Section 2 of Republic Act No. 349,57 as amended
by Republic Act No. 1056,58 which provides for a way to determine substituted informed consent for
deceased patients for purposes of organ donation.

The doctrine of informed consent

The doctrine of informed consent was introduced in this jurisdiction only very recently in Dr. Li v.
Spouses Soliman.59This court ruled that liability may arise in cases where the physician fails to obtain
the consent of the patient before performing any medical procedure, thus:

The doctrine of informed consent within the context of physician-patient relationships goes far back
into English common law. As early as 1767, doctors were charged with the tort of "battery" (i.e., an
unauthorized physical contact with a patient) if they had not gained the consent of their patients prior
51

to performing a surgery or procedure. In the United States, the seminal case was Schoendorff v.
Society of New York Hospital which involved unwanted treatment performed by a doctor. Justice
Benjamin Cardozo's oft-quoted opinion upheld the basic right of a patient to give consent to any
medical procedure or treatment: "Every human being of adult years and sound mind has a right to
determine what shall be done with his own body; and a surgeon who performs an operation without
his patient's consent, commits an assault, for which he is liable in damages." From a purely ethical
norm, informed consent evolved into a general principle of law that a physician has a duty to
disclose what a reasonably prudent physician in the medical community in the exercise of
reasonable care would disclose to his patient as to whatever grave risks of injury might be incurred
from a proposed course of treatment, so that a patient, exercising ordinary care for his own welfare,
and faced with a choice of undergoing the proposed treatment, or alternative treatment, or none at
all, may intelligently exercise his judgment by reasonably balancing the probable risks against the
probable benefits.

Subsequently, in Canterbury v. Spence[,] the court observed that the duty to disclose should not be
limited to medical usage as to arrogate the decision on revelation to the physician alone. Thus,
respect for the patient's right of self-determination on particular therapy demands a standard set by
law for physicians rather than one which physicians may or may not impose upon themselves. x x
x.60

Those who consent to using their organs upon their death for the benefit of another can make their
consent known prior to their death by following the requirements of the law. Should a patient die
prior to making his or her informed consent known, the law provides a list of persons who may
consent on his or her behalf, that is, "substituted" informed consent.

Since the incident in this case occurred in 1988, Republic Act No. 349, as amended by Republic Act
No. 1056, is the law that applies. Section 2 of the law states that:

SEC. 2. The authorization referred to in section one of this Act must: be in writing; specify the person
or institution granted the authorization; the organ, part or parts to be detached, the specific use or
uses to which the organ, part or parts are to be employed; and, signed by the grantor and two
disinterested witnesses.

If the grantor is a minor or an incompetent person, the authorization may be executed by his
guardian with the approval of the court; in default thereof, by the legitimate father or mother, in the
order, named. Married women may grant the authority referred to in section one of this Act, without
the consent of the husband.

After the death of the person, authority to use human organs or any portion or portions of the human
body for medical, surgical or scientific purposes may also be granted by his nearest relative or
guardian at the time of his death or in the absence thereof, by the person or head of the hospital, or
institution having custody of the body of the deceased: Provided, however, That the said person or
head of the hospital or institution has exerted reasonable efforts to locate the aforesaid guardian or
relative.

A copy of every such authorization must be furnished the Secretary of Health. (Emphasis supplied)

Under this law, consent to organ retrieval after the patient’s death may be given first and foremost by
the patient’s nearest relative or guardian at the time of death. It is only in the event that these
relatives cannot be contacted despite reasonable efforts that the head of the hospital or institution
having custody of the body may give consent for organ retrieval on behalf of the patient. Failing this,
liability for damages arises.
52

Considering that Republic Act No. 349, as amended, does not provide a remedy in case of violation,
an application of the doctrine of informed consent vis-à-vis Article 20 of the Civil Code may give rise
to an action for damages. In this case, Dr. Alano must first be shown to have acted willfully and
negligently to the damage and prejudice of Zenaida.

Petitioner did not willfully or


negligently, in a manner
contrary to law, authorize the
retrieval of the organs

Dr. Alano did not violate the provisions of the law willfully or negligently. In accordance with the
requirements of the third paragraph of Section 2 of Republic Act No. 349, as amended, he caused
the discharge of "reasonable efforts" to locate the relatives, allowed for a reasonable time to pass,
and harvested the organs with care and prudence.

Negligence has been defined by law as "[t]he failure to observe, for the protection of the interests of
another person, that degree of care, precaution and vigilance which the circumstances justly
demand, whereby such other person suffers injury."61

In Picart v. Smith,62 the test for negligence is as follows:

The test by which to determine the existence of negligence in a particular case may be stated as
follows: Did the defendant in doing the alleged negligent act use that reasonable care and caution
which an ordinarily prudent person would have used in the same situation? If not, then he is guilty of
negligence. The law here in effect adopts the standard supposed to be supplied by the imaginary
conduct of the discreet paterfamilias of the Roman law. The existence of negligence in a given case
is not determined by reference to the personal judgment of the actor in the situation before him. The
law considers what would be reckless, blameworthy, or negligent in the man of ordinary intelligence
and prudence and determines liability by that.

The question as to what would constitute the conduct of a prudent man in a given situation must of
course be always determined in the light of human experience and in view of the facts involved in
the particular case. Abstract speculation cannot here be of much value but this much can be
profitably said: Reasonable men govern their conduct by the circumstances which are before them
or known to them. They are not, and are not supposed to be, omniscient of the future. Hence they
can be expected to take care only when there is something before them to suggest or warn of
danger. Could a prudent man, in the case under consideration, foresee harm as a result of the
course actually pursued? If so, it was the duty of the actor to take precautions to guard against that
harm. Reasonable foresight of harm, followed by the ignoring of the suggestion born of this
prevision, is always necessary before negligence can be held to exist. Stated in these terms, the
proper criterion for determining the existence of negligence in a given case is this: Conduct is said to
be negligent when a prudent man in the position of the tortfeasor would have foreseen that an effect
harmful to another was sufficiently probable to warrant his foregoing the conduct or guarding against
its consequences.63 (Emphasis supplied)

As correctly found by the majority, Zenaida failed to prove that Dr. Alano did not exercise the
reasonable care and caution of an ordinarily prudent person.

In compliance with the duty reposed on him by the law, Dr. Alano, as the Executive Director of the
National Kidney Institute, directed Jennifer B. Misa, Transplant Coordinator, to locate Arnelito’s
relatives. Radio announcements over Radyo ng Bayan and DZMM Radio, televised notices on
Channels 2, 7, 9, and 13, and a police blotter in the Eastern Police District No. 5, Mandaluyong,
53

were done on March 2, 1988, with a published advertisement also appearing on the People’s
Journal on March 20, 1988.64 Assistance was also sought from the National Bureau of Investigation.
These findings were, in fact, adopted by the trial court. Dr. Enrique T. Ona also testified that the
search for the deceased patient’s relatives continued even after the organ retrieval, thus:

Q: After the retrieval of the organs from the patient and the transplantation of the organs to Mr.
Ambustan and Tan [K]oc Lee, did the hospital stop in its effort to locate the family of the patient,

Mr. Witness?

A: Since this patient is a John Doe and even after we had retrieved the organs and transplanted it to
the 2 recipients, I was also made aware that no relatives could still be located. Specific instruction
were [sic] given to the transplant coordinator to continue looking for the relatives.65 (Emphasis
supplied)

The trial court and the appellate court, however, took exception to the period of time taken by Dr.
Alano in conducting the search for the deceased patient’s relatives before he authorized the organ
retrieval.

What the lower courts failed to consider was that this was an unusual situation wherein time was of
the essence. Organ retrieval must always take into account the viability of the organs.

As explained by Dr. Ona in his testimony before the trial court:

Q: Does the time have any factor also with respect to the viability of these organs, Mr. Witness[?]

A: Yes, sir.

Q: Will you please explain this, Mr. Witness?

A When we remove the organs say, the kidney from the cadaver we put that into [a] special solution
for preservation and ideally we would like to transplant that kidney within 24 hours although
oftentimes we extend it to 48 hours and even stretching it to 72 hours, sir.

Court: I just want to clarify this issue.

Q: Is there any particular reason why the retrieval of the organs have to be done even when the
patient is not yet dead, as what we know heart beating [sic] stops but even at that stage when
classified as brain dead, why the rush to open it up, is there any particular reason or could it refer
perhaps to the successful operation maybe for the organs to fit well to the rec[i]pient?

A: Yes, Your Honor. The viability of the organ as I mentioned earlier the kidney is viable for several
hours, as I mentioned 24 hours, 48 hours up to 72 hours but for the liver, Your [Honor], during that
time in 1988 the liver can be preserved only for about 6 to 8 hours and for the heart it should be
connected for 4 hours, Your Honor.

Q: So, in this particular case, the kidney, how many hours more or less?

A: At that time it was stretched into 24 hours, Your Honor and the pa[n]creas maybe 4 hours so that
it is the leng[th] of time when the organs most likely to be viable after that most likely did not function
anymore [sic].
54

Q: But you do retrieval also to those dead on arrival, is that not?

A: In this particular case, Your Honor, it is possible for example the dead on arrival is brought to the
emergency room, the preparation of the operating room and the getting of [sic] the consent it will
take time, Your Honor, so in this particular case, Your Honor there is no more heart beat that cannot
be viable anymore[.]66 (Emphasis supplied)

This testimony is supported by several studies, which tend to show that the viability of organs in an
organ donation may depend on the length of time between the declaration of brain death and organ
retrieval.

One study shows that widespread physiological changes occur during brain death. "In addition to
acute changes, which if untreated lead to rapid deterioration and cardiac arrest (even if ventilation is
continued), there are ongoing generalized inflammatory and hormonal changes associated with
brain death which adversely affect donor organ function and propensity to rejection."67 Another
study68 shows that the time period between declaration of brain death and organ retrieval was a
"significant predictive factor"69 in recipient mortality for cardiac transplants. There is also a study70 that
shows that "[t]here are clear data that both [brain death] and prolonged [brain death duration] result
in [kidney] graft damage, and successful organ retrieval after [brain death] definitely relies on
intensive donor management."71

Upon a showing by the Transplant Coordinator that the deceased patient’s relatives could not be
found despite all her efforts in locating them, Dr. Alano exercised his professional judgment and
ordered the retrieval bearing in mind the short length of time the organs could be viable after the
declaration of brain death. He exercised all the reasonable care and caution that an ordinarily
prudent man would have exercised in the same situation.

Dr. Alano, therefore, should not have been found to be negligent. He did not violate Article 20 of the
Civil Code because he complied with all his duties in Republic Act No. 349, as amended.

There is no causal connection


between the alleged negligent
act and the damage suffered by
respondent

The trial court, by using the codal definition of a quasi-delict, identified the act or omission as that of
authorizing the retrieval of the deceased patient’s organs without seeking permission from his
relatives; the presence of negligence as the failure to exert reasonable efforts in searching for the
deceased patient’s relatives; and the damage pertaining to Zenaida’s discovery of her son’s lifeless
body "mangled, robbed of its vital organs and x x x sewn up like x x x a rag doll."72 The court also
found no pre-existing contractual relation.

The trial court is mistaken. Clearly, there is no causal connection between the alleged negligent act
of Dr. Alano and the damage suffered by Zenaida.

First, Zenaida alleged before the trial court that the damage she suffered was the loss of her son’s
life. The trial court, however, conceded that "the extent of Logmao’s injuries were such that the
possibility of survival would have been highly improbable, if not impossible x x x."73 It then concluded
that there was still damage suffered by Zenaida, in that her son’s lifeless body was "mangled,
robbed of its vital organs and x x x sewn up like some rag doll, without her knowledge, much more
her consent."74 The Court of Appeals agreed, stating that "the pain and anguish of a mother in seeing
55

the lifeless body of her son like a slaughtered pig in the funeral parlor x x x is more than one can
take."75

The "pain and anguish"76 of Zenaida indeed may have resulted from the loss of her son. However,
Dr. Alano or any of his subordinates did not cause the loss of her son’s life. Even if Dr. Alano did not
order the organ retrieval, Zenaida would still find the body of her son lifeless.

It was, therefore, erroneous to impute the emotional suffering of Zenaida as being caused by Dr.
Alano’s failure to exert reasonable efforts to locate her before ordering the organ retrieval.

Second, the failure to locate Zenaida to secure her permission for the organ retrieval was not caused
by Dr. Alano.

The records show that the difficulty in locating Zenaida stemmed from the erroneous information
found on the deceased’s patient data sheet, which indicated his name as Angelito Lugmoso, not
Arnelito Logmao. It was the staff of East Avenue Medical Center, not Dr. Alano and the staff of the
National Kidney Institute, which provided the erroneous information on the patient data sheet.

It can be conceded that there was a duty on the part of the National Kidney Institute to verify the
information on the patient data sheet with the patient himself. However, when Arnelito was
transferred from East Avenue Medical Center to the National Kidney Institute, he was already
"intubated and ambu-bagging support was provided x x x."77This means that he would not have been
coherent enough or even conscious enough to be able to answer any query by the medical staff.
The staff of the National Kidney Institute would have had no choice but to rely on the information
provided to them by East Avenue Medical Center considering the urgency of Arnelito’s situation.

The erroneous information on the patient data sheet was eventually the cause of the failure of the
Transplant Coordinator to locate Zenaida. The radio and television announcements, together with
the newspaper advertisements, were rendered futile by the fact that they were simply looking for the
wrong person. Even if the Transplant Coordinator spent more than 24 hours looking for the
deceased patient’s relatives, it was doubtful whether they could have been found, considering that
they were looking for the relatives of Angelito Lugmoso, not Arnelito Logmao.

Respondent should not


be awarded damages

Moral damages were awarded by the lower courts on the basis that it was Dr. Alano’s alleged
negligence which caused the emotional suffering of Zenaida. This is erroneous.

The pertinent provisions of the Civil Code on moral damages are:

Article 2217. 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 the defendant's wrongful act or omission.

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

(1) A criminal offense resulting in physical injuries;


56

(2) Quasi-delicts causing physical injuries;

(3) Seduction, abduction, rape, or other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

(7) Libel, slander or any other form of defamation;

(8) Malicious prosecution;

(9) Acts mentioned in Article 309;

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

The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article,
may also recover moral damages.

The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in
No. 9 of this article, in the order named.

It has already been established that Zenaida's emotional suffering was not caused by the acts of Dr.
Alano. He also did not commit any act in violation of Articles 19, 20 or 21 of the Civil Code. This is
also not a case wherein the alleged quasi-delict resulted in physical injuries. The lower courts are
also in agreement that Dr. Alano did not cause the death of Zenaida's son. Neither is this case
analogous to any of the situations mentioned in the provision. Contrary to the ruling of the trial court,
this situation is also not covered by Article 309 of the Civil Code, which states:

Article 309. Any person who shows disrespect to the dead, or wrongfully interferes with a funeral
shall be liable to the family of the deceased for damages, material and moral. 1âwphi1

The organ retrieval performed by the National Kidney Institute cannot be termed as "disrespect to
the dead." Organ donation is allowed by law. A sterile medical operation surely is not tantamount to
grave robbery or mutilation.

Since Zenaida has not proven her claim to moral damages, she is also not entitled to exemplary
damages.

Article 2234 of the Civil Code provides:

Article 2234. While the amount of the exemplary damages need not be proved, the plaintiff must
show that he is entitled to moral, temperate or compensatory damages before the court may
consider the question of whether or not exemplary damages should be awarded. x x x.

Since the award of exemplary damages is not justified, there is no reason to award attorney's fees,
in accordance with Article 2208 of the Civil Code, which allows the award of attorney's fees only
"when exemplary damages are awarded."
57

ACCORDINGLY, I CONCUR and vote to GRANT the petition.

MARVIC MARIO VICTOR F. LEONEN


Associate Justice

=====================================================================================

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
58

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,16nor 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, 2006.23Thus:

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
59

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
60

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,41as 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
61

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
62

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
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.

=====================================================================================

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 195670 December 3, 2012

WILLEM BEUMER, Petitioner,


vs.
AVELINA AMORES, Respondent.

DECISION

PERLAS-BERNABE, J.:

Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of CoLlli assailing
the October 8, 2009 Decision2 and January 24, 2011 Resolution3 of the court of Appeals (CA) in CA-
G.R. CV No. 01940, which affirmed the February 28, 2007 Decision4 of the Regional Trial Court
(RTC) of Negros Oriental, Branch 34 in Civil Case No. I 2884. The foregoing rulings dissolved the
conjugal partnership of gains of Willem Beumer (petitioner) and Avelina Amores (respondent) and
distributed the properties forming part of the said property regime.

The Factual Antecedents

Petitioner, a Dutch National, and respondent, a Filipina, married in March 29, 1980. After several
years, the RTC of Negros Oriental, Branch 32, declared the nullity of their marriage in the
64

Decision5 dated November 10, 2000 on the basis of the former’s psychological incapacity as
contemplated in Article 36 of the Family Code.

Consequently, petitioner filed a Petition for Dissolution of Conjugal Partnership6 dated December 14,
2000 praying for the distribution of the following described properties claimed to have been acquired
during the subsistence of their marriage, to wit:

By Purchase:

a. Lot 1, Block 3 of the consolidated survey of Lots 2144 & 2147 of the Dumaguete Cadastre,
covered by Transfer Certificate of Title (TCT) No. 22846, containing an area of 252 square
meters (sq.m.), including a residential house constructed thereon.

b. Lot 2142 of the Dumaguete Cadastre, covered by TCT No. 21974, containing an area of
806 sq.m., including a residential house constructed thereon.

c. Lot 5845 of the Dumaguete Cadastre, covered by TCT No. 21306, containing an area of
756 sq.m.

d. Lot 4, Block 4 of the consolidated survey of Lots 2144 & 2147 of the Dumaguete Cadastre,
covered by TCT No. 21307, containing an area of 45 sq.m.

By way of inheritance:

e. 1/7 of Lot 2055-A of the Dumaguete Cadastre, covered by TCT No. 23567, containing an
area of 2,635 sq.m. (the area that appertains to the conjugal partnership is 376.45 sq.m.).

f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered by TCT No. 23575, containing an
area of 360 sq.m. (the area that appertains to the conjugal partnership is 24 sq.m.).7

In defense,8 respondent averred that, with the exception of their two (2) residential houses on Lots 1
and 2142, she and petitioner did not acquire any conjugal properties during their marriage, the truth
being that she used her own personal money to purchase Lots 1, 2142, 5845 and 4 out of her
personal funds and Lots 2055-A and 2055-I by way of inheritance.9 She submitted a joint affidavit
executed by her and petitioner attesting to the fact that she purchased Lot 2142 and the
improvements thereon using her own money.10 Accordingly, respondent sought the dismissal of the
petition for dissolution as well as payment for attorney’s fees and litigation expenses.11

During trial, petitioner testified that while Lots 1, 2142, 5845 and 4 were registered in the name of
respondent, these properties were acquired with the money he received from the Dutch government
as his disability benefit12 since respondent did not have sufficient income to pay for their acquisition.
He also claimed that the joint affidavit they submitted before the Register of Deeds of Dumaguete
City was contrary to Article 89 of the Family Code, hence, invalid.13

For her part, respondent maintained that the money used for the purchase of the lots came
exclusively from her personal funds, in particular, her earnings from selling jewelry as well as
products from Avon, Triumph and Tupperware.14 She further asserted that after she filed for
annulment of their marriage in 1996, petitioner transferred to their second house and brought along
with him certain personal properties, consisting of drills, a welding machine, grinders, clamps, etc.
She alleged that these tools and equipment have a total cost of P500,000.00.15
65

The RTC Ruling

On February 28, 2007, the RTC of Negros Oriental, Branch 34 rendered its Decision, dissolving the
parties’ conjugal partnership, awarding all the parcels of land to respondent as her paraphernal
properties; the tools and equipment in favor of petitioner as his exclusive properties; the two (2)
houses standing on Lots 1 and 2142 as co-owned by the parties, the dispositive of which reads:

WHEREFORE, judgment is hereby rendered granting the dissolution of the conjugal partnership of
gains between petitioner Willem Beumer and respondent Avelina Amores considering the fact that
their marriage was previously annulled by Branch 32 of this Court. The parcels of land covered by
Transfer Certificate of Titles Nos. 22846, 21974, 21306, 21307, 23567 and 23575 are hereby
declared paraphernal properties of respondent Avelina Amores due to the fact that while these real
properties were acquired by onerous title during their marital union, Willem Beumer, being a
foreigner, is not allowed by law to acquire any private land in the Philippines, except through
inheritance.

The personal properties, i.e., tools and equipment mentioned in the complaint which were brought
out by Willem from the conjugal dwelling are hereby declared to be exclusively owned by the
petitioner.

The two houses standing on the lots covered by Transfer Certificate of Title Nos. 21974 and 22846
are hereby declared to be co-owned by the petitioner and the respondent since these were acquired
during their marital union and since there is no prohibition on foreigners from owning buildings and
residential units. Petitioner and respondent are, thereby, directed to subject this court for approval
their project of partition on the two houses aforementioned.

The Court finds no sufficient justification to award the counterclaim of respondent for attorney’s fees
considering the well settled doctrine that there should be no premium on the right to litigate. The
prayer for moral damages are likewise denied for lack of merit.

No pronouncement as to costs.

SO ORDERED.16

It ruled that, regardless of the source of funds for the acquisition of Lots 1, 2142, 5845 and 4,
petitioner could not have acquired any right whatsoever over these properties as petitioner still
attempted to acquire them notwithstanding his knowledge of the constitutional prohibition against
foreign ownership of private lands.17 This was made evident by the sworn statements petitioner
executed purporting to show that the subject parcels of land were purchased from the exclusive
funds of his wife, the herein respondent.18 Petitioner’s plea for reimbursement for the amount he had
paid to purchase the foregoing properties on the basis of equity was likewise denied for not having
come to court with clean hands.

The CA Ruling

Petitioner elevated the matter to the CA, contesting only the RTC’s award of Lots 1, 2142, 5845 and
4 in favor of respondent. He insisted that the money used to purchase the foregoing properties came
from his own capital funds and that they were registered in the name of his former wife only because
of the constitutional prohibition against foreign ownership. Thus, he prayed for reimbursement of
one-half (1/2) of the value of what he had paid in the purchase of the said properties, waiving the
other half in favor of his estranged ex-wife.19
66

On October 8, 2009, the CA promulgated a Decision20 affirming in toto the judgment rendered by the
RTC of Negros Oriental, Branch 34. The CA stressed the fact that petitioner was "well-aware of the
constitutional prohibition for aliens to acquire lands in the Philippines."21 Hence, he cannot invoke
equity to support his claim for reimbursement.

Consequently, petitioner filed the instant Petition for Review on Certiorari assailing the CA Decision
due to the following error:

UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN NOT SUSTAINING THE
PETITIONER’S ATTEMPT AT SUBSEQUENTLY ASSERTING OR CLAIMING A RIGHT OF HALF
OR WHOLE OF THE PURCHASE PRICE USED IN THE PURCHASE OF THE REAL PROPERTIES
SUBJECT OF THIS CASE.22 (Emphasis supplied)

The Ruling of the Court

The petition lacks merit.

The issue to be resolved is not of first impression. In In Re: Petition For Separation of Property-
Elena Buenaventura Muller v. Helmut Muller23 the Court had already denied a claim for
reimbursement of the value of purchased parcels of Philippine land instituted by a foreigner Helmut
Muller, against his former Filipina spouse, Elena Buenaventura Muller. It held that Helmut Muller
cannot seek reimbursement on the ground of equity where it is clear that he willingly and knowingly
bought the property despite the prohibition against foreign ownership of Philippine land24enshrined
under Section 7, Article XII of the 1987 Philippine Constitution which reads:

Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed
except to individuals, corporations, or associations qualified to acquire or hold lands of the public
domain.

Undeniably, petitioner openly admitted that he "is well aware of the above-cited constitutional
prohibition"25 and even asseverated that, because of such prohibition, he and respondent registered
the subject properties in the latter’s name.26 Clearly, petitioner’s actuations showed his palpable intent
to skirt the constitutional prohibition. On the basis of such admission, the Court finds no reason why
it should not apply the Muller ruling and accordingly, deny petitioner’s claim for reimbursement.

As also explained in Muller, the time-honored principle is that he who seeks equity must do equity,
and he who comes into equity must come with clean hands. Conversely stated, he who has done
inequity shall not be accorded equity. Thus, a litigant may be denied relief by a court of equity on the
ground that his conduct has been inequitable, unfair and dishonest, or fraudulent, or deceitful.27

In this case, petitioner’s statements regarding the real source of the funds used to purchase the
subject parcels of land dilute the veracity of his claims: While admitting to have previously executed
a joint affidavit that respondent’s personal funds were used to purchase Lot 1,28 he likewise claimed
that his personal disability funds were used to acquire the same. Evidently, these inconsistencies
show his untruthfulness. Thus, as petitioner has come before the Court with unclean hands, he is
now precluded from seeking any equitable refuge.

In any event, the Court cannot, even on the grounds of equity, grant reimbursement to petitioner
given that he acquired no right whatsoever over the subject properties by virtue of its
unconstitutional purchase. It is well-established that equity as a rule will follow the law and will not
permit that to be done indirectly which, because of public policy, cannot be done directly.29 Surely, a
contract that violates the Constitution and the law is null and void, vests no rights, creates no
67

obligations and produces no legal effect at all.30 Corollary thereto, under Article 1412 of the Civil
Code,31 petitioner cannot have the subject properties deeded to him or allow him to recover the
money he had spent for the purchase thereof. The law will not aid either party to an illegal contract
or agreement; it leaves the parties where it finds them.32 Indeed, one cannot salvage any rights from
an unconstitutional transaction knowingly entered into.

Neither can the Court grant petitioner’s claim for reimbursement on the basis of unjust
enrichment.33 As held in Frenzel v. Catito, a case also involving a foreigner seeking monetary
reimbursement for money spent on purchase of Philippine land, the provision on unjust enrichment
does not apply if the action is proscribed by the Constitution, to wit:

Futile, too, is petitioner's reliance on Article 22 of the New Civil Code which reads:

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. 1âwphi 1

The provision is expressed in the maxim: "MEMO CUM ALTERIUS DETER DETREMENTO
PROTEST" (No person should unjustly enrich himself at the expense of another). An action for
recovery of what has been paid without just cause has been designated as an accion in rem verso.
This provision does not apply if, as in this case, the action is proscribed by the Constitution or by the
application of the pari delicto doctrine. It may be unfair and unjust to bar the petitioner from filing an
accion in rem verso over the subject properties, or from recovering the money he paid for the said
properties, but, as Lord Mansfield stated in the early case of Holman v. Johnson: "The objection that
a contract is immoral or illegal as between the plaintiff and the defendant, sounds at all times very ill
in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it
is founded in general principles of policy, which the defendant has the advantage of, contrary to the
real justice, as between him and the plaintiff."34(Citations omitted)

Nor would the denial of his claim amount to an injustice based on his foreign citizenship.35 Precisely,
it is the Constitution itself which demarcates the rights of citizens and non-citizens in owning
Philippine land. To be sure, the constitutional ban against foreigners applies only to ownership of
Philippine land and not to the improvements built thereon, such as the two (2) houses standing on
Lots 1 and 2142 which were properly declared to be co-owned by the parties subject to partition.
Needless to state, the purpose of the prohibition is to conserve the national patrimony36 and it is this
policy which the Court is duty-bound to protect.

WHEREFORE, the petition is DENIED. Accordingly, the assailed October 8, 2009 Decision and
January 24, 2011 Resolution of the Court of Appeals in CA-G.R. CV No. 01940 are AFFIRMED.

SO ORDERED.

=====================================================================================

Republic of the Philippines


SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 183026 November 14, 2012


68

NESTOR N. PADALHIN and ANNIE PADALHIN, Petitioners,


vs.
NELSON D. LAVINA, Respondent.

RESOLUTION

REYES, J.:

For review is the Decision1 rendered on February 14, 2008 and Resolution2 issued on May 20, 2008
by the Court of Appeals (CA) in CA-G.R. CV No. 81810. The CA affirmed, albeit with modification
relative to the award of attorney's fees, the Decision3 rendered on October 3, 2003 by the Regional
Trial Court (RTC), Pasig City, Branch 165, which ordered herein petitioner Nestor Padalhin (Nestor),
to pay herein respondent Nelson D. Lavina (Lavina) the total amount of P775,000.00 as damages.

Antecedent Facts

Laviña and Nestor were both Filipino diplomats assigned in Kenya as Ambassador and Consul
General, respectively.

In the course of their stay in Kenya, the residence of Laviña was raided twice. Prior to the raids,
Bienvenido Pasturan4 (Pasturan) delivered messages to the Filipino household helpers in the
ambassador’s residence instructing them to allow the entry of an officer who would come to take
photographs of the ivory souvenirs kept therein.

The first raid on April 18, 1996 was conducted while Laviña and his wife were attending a diplomatic
dinner hosted by the Indian High Commission. Lucy Ercolano Muthua, who was connected with the
Criminal Investigation Division’s Intelligence Office of Kenya and David Menza, an officer in the
Digirie Police Station in Nairobi, participated in the raid. Photographs of the first and second floors of
Laviña’s residence were taken with the aid of James Mbatia,5 Juma Kalama,6 Zenaida
Cabando7 (Cabando), and Edna Palao8 (Palao). The second raid was conducted on April 23, 1996
during which occasion, the ambassador and his spouse were once again not present and additional
photographs of the residence were taken.

On September 27, 1996, Laviña received an information from the Department of Foreign Affairs
(DFA) in Manila that an investigating team was to be sent to Nairobi to inquire into the complaints
filed against him by the employees of the Philippine Embassy in Kenya, on one hand, and his own
complaint against the spouses Padalhin, on the other. The investigating team was led by Rosario G.
Manalo (Manalo) and had Franklin M. Ebdalin (Ebdalin) and Maria Theresa Dizon (Dizon) as
members. The team stayed in Kenya from April 20, 1997 to April 30, 1997. On April 29, 1997, the
team entered Laviña’s residence unarmed with a search warrant, court order or letter from the DFA
Secretary. Laviña alleged that in the course of the inspection, the team destroyed cabinet locks,
damaged furnitures and took three sets of carved ivory tusks.

Subsequently, both Nestor and Laviña were recalled from their posts in Kenya.

On November 17, 1997, Laviña filed before the RTC a complaint for damages against Nestor and
his wife, petitioner Annie Padalhin (Annie) Palao, Cabando, Manalo, Ebdalin and Dizon. On July 6,
1998, Laviña amended his complaint to include Pasturan as a defendant.

Laviña’s complaint alleged the following causes of action, to wit: (a) affront against his privacy and
the sanctity and inviolability of his diplomatic residence during the two raids conducted by the
69

Kenyan officials, supposedly instigated by Padalhin and participated by all the defendants as
conspirators; (b) infringement of his constitutional rights against illegal searches and seizures when
the investigating team sent by the DFA entered into his residence without a warrant, court order or
letter from the DFA Secretary and confiscated some of his personal belongings; and (c) bad faith,
malice and deceit exhibited by the defendants, including Padalhin, in conspiring on the conduct of
the raids, engaging in a smear campaign against him, and seizing without authority his personal
effects. Laviña sought payment of actual, moral, exemplary and nominal damages, attorney’s fees
and costs of suits.

In the course of the trial, Nestor denied any involvement in the raids conducted on Laviña’s
residence. As counterclaims, he alleged that the suit filed by Laviña caused him embarasssment and
sleepless nights, as well as unnecessary expenses which he incurred to defend himself against the
charges. On the other hand, Annie denied prior knowledge of and participation in the raids.

On February 24, 2000, the RTC, upon oral motion of Laviña’s counsel informing the court that a
settlement had been reached, dismissed the charges against Palao, Cabando, Manalo, Ebdalin and
Dizon. As a consequence, the RTC deemed it proper to no longer resolve the claims of Laviña
relative to the alleged seizure of his personal effects by the DFA investigating team. Laviña pursued
his charges against Nestor, Annie and Pasturan.

The Ruling of the RTC

On October 3, 2003, the RTC rendered a Decision9 ordering Nestor to pay Laviña P500,000.00 as
moral damages, P50,000.00 as nominal damages, P75,000.00 as exemplary damages,
P150,000.00 as attorney’s fees and litigation expenses, and costs of suit for the former’s
participation in the raid conducted in the Ambassador’s residence on April 18, 1996. The RTC ruled
that:

Defendant Nestor N. Padalhin admitted in his sworn statement dated October 10, 1997 which was
subscribed and sworn to on October 13, 1997 before the Executive Director Benito B. Valeriano,
Office of Personnel and Administrative Services of the Department of Foreign Affairs, that he caused
the taking of pictures of the raw elephant tusks in the official residence of the ambassador (Exh. "B").
x x x.

xxxx

The said affidavit was submitted by Nestor Padalhin in answer to the administrative charge filed
against him by then Secretary of the Department of Foreign Affairs Domingo L. Siazon, Jr. in
connection with the violation of the diplomatic immunity of the residence of the Philippine

Ambassador to Kenya on April 18, 1996. x x x.

xxxx

When Nestor Padalhin was presented by the plaintiff as hostile witness, he affirmed the truth of the
contents of his affidavit marked as Exhibit "B". x x x.

It is therefore clear that the taking of the pictures of the elephant tusks inside the residence of
Ambassador Nelson Laviña while the latter and his wife were out and attending a diplomatic
function, was upon order of Nestor Padalhin to his driver James Mbatia with the cooperation of Juma
Kalama, a gardener in the ambassador’s residence. The admission of defendant Nestor Padalhin
70

that he was the one who caused the taking of the pictures of the elephant tusks in the official
residence of Ambassador Laviña in effect corroborates the latter’s testimony that it was Nestor
Padalhin who masterminded the invasion and violation of the privacy and inviolability of his
diplomatic residence in Kenya on April 18, 1996.

The invasion of the diplomatic residence of the plaintiff in Kenya and the taking of photographs of the
premises and the elephant tusks inside the residence upon order of defendant Nestor Padalhin
without the knowledge and consent of the plaintiff were done by the said defendant in bad faith. The
intention to malign the plaintiff is shown by the fact that Nestor Padalhin even went to the Kenyan
Ministry of Foreign Affairs and reported the raw elephant tusks of Ambassador Laviña as admitted in
paragraph 2.a of his affidavit marked as Exhibit "B".

This incident reached not only the Ministry of Foreign Affairs of Kenya but also the Filipino
community in Kenya, the Department of Foreign Affairs in Manila and the circle of friends of plaintiff.
As a result, plaintiff felt insulted, betrayed, depressed and even feared for his life because the
intelligence and local police were involved in this incident. Plaintiff suffered humiliation, sleepless
nights, serious anxiety, besmirched reputation and wounded feeling.

The admission of defendant Nestor Padalhin in his affidavit (Exh. "B") regarding the first cause of
action is binding upon him only but cannot bind his co-defendants Annie Padalhin and Bienvenido
Pasturan who were not included in the administrative case where the affidavit of

Nestor Padalhin was submitted.

The affidavits of plaintiff’s maids Zenaida Cabando and Edna Palao who implicated Annie Padalhin
and Bienvenido Pasturan in this case is hearsay evidence because the said househelpers did not
appear to testify in this case and to identify their affidavits although the record will show that plaintiff
exerted all efforts to present them as witnesses but failed because their address/whereabouts could
not be traced and/or ascertained. In view of this, defendants Annie Padalhin and Bienvenido
Pasturan did not have the opportunity to cross-examine the said affiants.10 (Italics ours)

The RTC was, however, not convinced of Nestor’s involvement in the raid staged on April 23, 1996.
Laviña’s testimony relative to the raid was not based on his own personal knowledge as it was only
derived from the affidavits subscribed and sworn to before him by Cabando, Palao, Helen
Tadifa,11 John Ochieng12 and Leonidas Peter Logarta.13 During the trial before the RTC and even in the
proceedings before the DFA, Laviña had not presented the aforementioned persons as witnesses.
Their affidavits were thus considered as hearsay evidence since the witnesses were not subjected to
cross-examination. The RTC likewise found no sufficient evidence to render Annie and Pasturan
liable and to grant Nestor’s counterclaims.

Both Laviña and Nestor filed their respective appeals to assail the RTC decision. Laviña ascribed
error on the part of the RTC when it absolved Annie and Pasturan from liability anent their supposed
participation in the raid conducted on April 18, 1996. Laviña likewise assailed as insufficient the
amount of exemplary and nominal damages imposed on Nestor by the RTC. Laviña also challenged
the propriety of the RTC’s dismissal of his claims relative to the conduct of the second raid on April
23, 1996. On the other hand, Nestor lamented that his participation in the April 18, 1996 raid was not
proven by clear and substantial evidence, hence, the award of damages made by the RTC in favor
of Laviña lacked basis.

The Ruling of the CA


71

On February 14, 2008, the CA rendered a Decision14 denying the appeals of both Laviña and Nestor.
The CA, however, reduced to P75,000.00 the award of attorney’s fees and litigation expenses made
in Laviña’s favor. In affirming, albeit with modification, the RTC’s disquisition, the CA explained:

There is no doubt in our mind that defendant-appellant indeed participated in the first raid that
happened on April 18, 1997 [sic]. This conclusion of ours is based on the admission made by the
defendant- appellant himself in his affidavit dated October 10, 1997. x x x.

xxxx

Defendat-appellant’s affidavit constitutes as [sic] an admission against his interest. Being an


admission against interest, the affidavit is the best evidence which affords the greatest certainty of
the facts in dispute. The rationale for the rule is based on the presumption that no man would
declare anything against himself unless such declaration was true. Thus, it is fair to presume that the
declaration corresponds with the truth, and it is his fault if it does not. As a Consul General of the
Republic of the Philippines, defendant-appellant cannot pretend that the plain meaning of his
admission eluded his mind. On the witness stand, he testified that he was the one who voluntarily
and freely prepared his affidavit. He further stated that the contents thereof are true. His affidavit
likewise contained an apology for his lack of judgment and discretion regarding the April 18, 1996
raid.

Anent plaintiff-appellant’s second cause of action, the court a quo correctly ruled that plaintiff-
appellant was not able to prove defendant- appellant’s participation in the second raid that happened
on April 26, 1996 [sic]. Basic is the rule in evidence that the burden of proof is on the part of the
party who makes the allegations x x x. Plaintiff-appellant’s testimony regarding the second raid was
not of his own personal knowledge. Neither does the affidavit of defendant-appellant admit that he
had anything to do with the second raid. Plaintiff-appellant came to know of the second raid only
from the stories told to him by his household helps and employees of the Philippine Embassy in
Nairobi, Kenya. Inasmuch as these people were not presented as witnesses in the instant case, their
affidavits are considered hearsay and without probative value.

x x x.

Next, plaintiff-appellant bewails the dismissal of the complaint against Annie Padalhin and
Bienvenido Pasturan. He contends that the affidavits of Cabando and Palao, which were executed
and sworn to before him, linking defendant Annie Padalhin and B[ie]nvenido Pasturan to the two
raids are binding upon the latter two.

Such a contention by the plaintiff-appellant must fail. The failure of the plaintiff-appellant to put
Cabando and Palao on the witness stand is fatal to his case. Even if defendants Annie Padalhin and
Bienvenido Pasturan failed to object to the hearsay evidence presented by the plaintiff-appellant, it
would only mean that they have waived their right of confrontation and cross-examination, and the
affidavits then are admissible. But admissibility of evidence should not be equated with weight of
evidence. Hearsay evidence, whether objected to or not, has no probative value.

xxxx

Defendant-appellant contends that there is no factual basis to conclude that he was motivated by
malice, bad faith or deceit, which would warrant the award of damages in favor of the plaintiff-
appellant.
72

x x x Plaintiff-appellant’s complaint is mainly anchored on Article 19 in relation to Articles 21 and 26


of the New Civil Code. These provisions of the law state thus:

"Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith."

"Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage."

"Article 26. Every person shall respect the dignity, personality, privacy and peace of mind of his
neighbors and other persons. The following and similar acts, though they may not constitute a
criminal offense, shall produce a cause of action for damages, prevention and other relief:

(1) Prying into the privacy of another’s residence:

(2) Meddling with or disturbing the private life or family relations off [sic] another;

(3) Intriguing to cause another to be alienated from his friends;

(4) Vexing or humiliating another on account of his beliefs, lowly station in life, place of birth, physical
defect, or other personal condition."

The Comment of Tolentino on what constitute an abuse of rights under Article 19 of the New Civil
Code is pertinent:

"Test of Abuse of Right. – Modern jurisprudence does not permit acts which, although not unlawful,
are anti-social. There is undoubtedly an abuse of right when it is exercised for the only purpose of
prejudicing or injuring another. When the objective of the actor is illegitimate, the illicit act cannot be
concealed under the guise of exercising a right. The principle does not permit acts which, without
utility or legitimate purpose cause damage to another, because they violate the concept of social
solidarity which considers law as rational and just. x x x."

The question, therefore, is whether defendant-appellant intended to prejudice or injure plaintiff-


appellant when he did the acts as embodied in his affidavit.

We rule in the affirmative. Defendant-appellant’s participation in the invasion of plaintiff-appellant’s


diplomatic residence and his act of ordering an employee to take photographs of what was inside the
diplomatic residence without the consent of the plaintiff-appellant were clearly done to prejudice the
latter. Moreover, we find that defendant- appellant was not driven by legitimate reasons when he did
the questioned acts. As pointed out by the court a quo, defendant-appellant made sure that the
Kenyan Minister of Foreign Affairs and the Filipino community in Kenya knew about the alleged
illegal items in plaintiff-appellant’s diplomatic residence.

xxxx

Basic is the rule that trial courts are given the discretion to determine the amount of damages, and
the appellate court can modify or change the amount awarded only when it is inordinate. x x x We
reduce the amount of attorney’s fees and expenses of litigation from P150,000.00 to P75,000.00
considering that the instant suit is merely for damages.
73

With regard to plaintiff-appellant’s contention that his prayer for "other reliefs which are just and
equitable", consisting of his remuneration, salaries and allowances which should have been paid to
him in Nairobi if it were not for his illegal recall to Manila, the same must likewise fail. First of all, it is
not within our powers to determine whether or not plaintiff-appellant’s recall to Manila following the
two raids was illegal or not. Second, the "other reliefs" prayed for by the plaintiff- appellant are in the
nature of actual or compensatory damages which must be duly proved with reasonable degree of
certainty. A court cannot rely on speculation, conjecture or guesswork as to the amount of damages,
but must depend upon competent proof and on evidence of the actual amount thereof. Here,
plaintiff-appellant failed to present proof of his salary and allowances. x x x.15 (Citations omitted and
italics ours)

The Resolution16 issued by the CA on May 20, 2008 denied the respective motions for
reconsideration filed by Laviña and Nestor.

Hence, Nestor filed before us the instant Petition for Review on Certiorari17 anchored on the following
issues:

I. WHETHER OR NOT NESTOR’S PARTICIPATION IN THE RAID CONDUCTED ON LAVIÑA’S


RESIDENCE WAS PROVEN BY CLEAR AND SUBSTANTIAL EVIDENCE AS TO WARRANT THE
AWARD OF MORAL, EXEMPLARY AND NOMINAL DAMAGES AND ATTORNEY’S FEES IN THE
LATTER’S FAVOR.

II. WHETHER OR NOT NESTOR’S COUNTERCLAIMS SHOULD HAVE BEEN GRANTED


CONSIDERING A CLEAR SHOWING THAT LAVIÑA’S SUIT WAS GROUNDLESS.

The Arguments in Support of the Petition

Nestor reiterates that his admission of having caused the taking of photographs in Laviña’s
residence was subject to the qualification that he did so sans malice or bad faith. Padalhin insists
that he did nothing unlawful. He merely intended to verify the complaints of some embassy
personnel against Laviña, with the end in mind of protecting and upholding the image of the
Philippine diplomatic corps in Kenya. He may have committed a lapse in the exercise of his
discretion, but he never meant to cause Laviña harm, damage or embarrassment.

Nestor avers that Laviña kept grudges against him based on a mistaken sentiment that the former
intended to oust the latter from his post. This, however, did not justify Laviña’s filing of a suit for
damages against Nestor.

Laviña’s Contentions

In his Comment,18 Laviña seeks the dismissal of the instant petition on both procedural and
substantive grounds. He alleges that the verification and certification of non-forum-shopping
attached to the petition was signed not by Spouses Padalhin but by their son, Norman Padalhin
(Norman). Such being the case, it is as if the said verification and certification was not signed at all,
hence, legally inexistent, rendering the petition defective. Besides, even if the Special Power of
Attorney19 (SPA) signed by Nestor were to be considered as the source of Norman’s authority to sign
the said verification and certification of non-forum-shopping, still, the instrument is wanting as Annie,
a co-petitioner in the case at bar, had no participation in its execution.

Laviña likewise emphasizes that since factual and not legal issues are raised, resort to a petition for
review on certiorari under Rule 45 of the Rules of Civil Procedure is erroneous.
74

In challenging the substantial merits of the instant petition, Laviña reiterates the arguments he
proferred in the proceedings below. He also made affirmative references to the portions of rulings of
both the RTC and the CA, relative to the binding effect of the affidavits submitted by some of the
defendants either with the DFA or the RTC, to render all of them liable for damages for their
participation in the conduct of the supposed raids.

Our Disquisition

The instant petition is procedurally flawed.

We deem it proper to first resolve the procedural issues raised by Laviña relative to the (a) alleged
defective verification and certification of non-forum shopping attached to the instant petition, and (b)
the circumstance that factual and not legal issues are presented before us, hence, beyond the ambit
of a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure.

Sections 4 and 5 of Rule 7 of the Rules of Civil Procedure provide:

Sec. 4. Verification. - Except when otherwise specifically required by law or rule, pleadings need not
be under oath, verified or accompanied by affidavit.

A pleading is verified by an affidavit that the affiant has read the pleadings and that the allegations
therein are true and correct of his personal knowledge or based on authentic records.

A pleading required to be verified which contains a verification based on "information and belief" or
upon "knowledge, information and belief" or lacks a proper verification, shall be treated as an
unsigned pleading.

Sec. 5. Certification against forum shopping. - The plaintiff or principal party shall certify under oath
in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any
action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and,
to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such
other pending action or claim, a complete statement of the present status thereof; and (c) if he
should thereafter learn that the same or similar action or claim has been filed or is pending, he shall
report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory
pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false
certification or non-compliance with any of the undertakings therein shall constitute indirect contempt
of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the
party or his counsel clearly constitute willful and deliberate forum-shopping, the same shall be
ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause
for administrative sanctions. (Italics ours)

Obedience to the requirements of procedural rules is needed if we are to expect fair results
therefrom, and utter disregard of the rules cannot justly be rationalized by harking on the policy of
liberal construction.20 Time and again, this Court has strictly enforced the requirement of verification
and certification of non-forum shopping under the Rules of Court.21 Verification is required to secure
an assurance that the allegations of the petition have been made in good faith, or are true and
correct and not merely speculative.22 The attestation on non-forum shopping requires personal
75

knowledge by the party executing the same, and the lone signing petitioner cannot be presumed to
have personal knowledge of the filing or non-filing by his co-petitioners of any action or claim the
same as similar to the current petition.23

The circumstances surrounding the case at bar do not qualify to exempt compliance with the rules
and justify our exercise of leniency. The verification and certification of non-forum
shopping24 attached to the instant petition was not signed personally by the petitioners themselves.
Even if we were to admit as valid the SPA executed in Norman’s favor allowing him to sign the
verification and certification of non-forum shopping attached to the instant petition, still, his authority
is wanting. Petitioner Annie did not participate in the execution of the said SPA. In the pleadings filed
with us, there is nary an explanation regarding the foregoing omissions. The petitioner spouses took
procedural rules for granted and simply assumed that the Court will accord them leniency. It bears
stressing that procedural rules are crafted towards the orderly administration of justice and they
cannot be haphazardly ignored at the convenience of the party litigants.

Laviña also seeks the dismissal of the instant petition on the ground of being supposedly anchored
on factual and not legal issues.

The case of Vda. De Formoso v. Philippine National Bank25 is emphatic on what issues can be
resolved in a petition for review on certiorari filed under Rule 45 of the Rules of Procedure, to wit:

Primarily, Section 1, Rule 45 of the Rules of Court categorically states that the petition filed shall
raise only questions of law, which must be distinctly set forth. A question of law arises when there is
doubt as to what the law is on a certain state of facts, while there is a question of fact when the
doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same
must not involve an examination of the probative value of the evidence presented by the litigants or
any of them. The resolution of the issue must rest solely on what the law provides on the given set of
circumstances. Once it is clear that the issue invites a review of the evidence presented, the
question posed is one of fact.

x x x The substantive issue of whether or not the petitioners are entitled to moral and exemplary
damages as well as attorney’s fees is a factual issue which is beyond the province of a petition for
review on certiorari.26 (Citation omitted and italics ours)

In the case at bar, the petitioner spouses present to us issues with an intent to subject to review the
uniform factual findings of the RTC and the CA. Specifically, the instant petition challenges the
1âwphi1

existence of clear and substantial evidence warranting the award of damages and attorney’s fees in
Laviña’s favor. Further, the instant petition prays for the grant of the Spouses Padalhin’s
counterclaims on the supposed showing that the complaint filed by Laviña before the RTC was
groundless. It bears stressing that we are not a trier of facts. Undoubtedly, the questions now raised
before us are factual and not legal in character, hence, beyond the contemplation of a petition filed
under Rule 45 of the Rules of Civil Procedure.

Even if we were to overlook the


aforecited procedural defects of the
instant petition, still, the reliefs
prayed for by the petitioner spouses
cannot be granted.

As already exhaustively discussed by both the RTC and the CA, Nestor himself admitted that he
caused the taking of the pictures of Lavina's residence without the latter's knowledge and consent.
Nestor reiterates that he did so sans bad faith or malice. However, Nestor's surreptitious acts negate
76

his allegation of good faith. If it were true that Lavina kept ivories in his diplomatic residence, then,
his behavior deserves condemnation. However, that is not the issue in the case at bar. Nestor
violated the New Civil Code prescriptions concerning the privacy of one's residence and he cannot
hide behind the cloak of his supposed benevolent intentions to justify the invasion. Hence, the award
of damages and attorney's fees in Lavina's favor is proper.

WHEREFORE, IN VIEW OF THE FOREGOING, the instant petition is DENIED. The Decision dated
February 14, 2008 and Resolution dated May 20, 2008 by the Court of Appeals in C A-G.R. CV No.
81810 are AFFIRMED.

SO ORDERED.