TORTS Full Text (Sta. Barbara) 02 Concept of Torts PDF

TORTS
(Torts and Damages)

Atty. Sta. Barbara | 3D | A.Y. 2018-2019
CONCEPT OF TORTS
No. Case Title Pages Page
1 Naguiat v. NLRC, G.R. No. 116123, March 13, 1997 14 2
2 Gashem Shookat Baksh v. CA, G.R. No. 97336, February 19, 1993 14 16
Bacolod-Murcia Milling Co., Inc. v. First Farmers Milling Co., Inc., G.R. No. L-29041,
3 6 30
March 24, 1981
THIRD DIVISION
[G.R. No. 116123. March 13, 1997.]
SERGIO F. NAGUIAT, doing business under the name and style

SERGIO F. NAGUIAT ENT., INC., & CLARK FIELD TAXI, INC. ,
petitioners, vs . NATIONAL LABOR RELATIONS COMMISSION (THIRD
DIVISION), NATIONAL ORGANIZATION OF WORKINGMEN and its
members, LEONARDO T. GALANG, et al. , respondents.
Villanueva, De Leon, Hipolito & Associates Law Offices for petitioners.

The Solicitor General for respondents.
SYLLABUS
1.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; WHEN A LABOR CASE MAY
REACH THE SUPREME COURT; GROUNDS THEREOF. — Firmly, we reiterate the rule that in a
petition for certiorari led pursuant to Rule 65 of the Rules of Court, which is the only way a
labor case may reach the Supreme Court, the petitioner/s must clearly show that the NLRC
acted without or in excess of jurisdiction or with grave abuse of discretion.
2.ID.; EVIDENCE; FINDINGS OF FACTS OF AN ADMINISTRATE AGENCY OR A QUASI-
JUDICIAL BODY; BINDING UPON THE SUPREME COURT; EXCEPTION. — Long-standing
and well-settled in Philippine jurisprudence is the judicial dictum that ndings of facts of
administrative agencies and quasi-judicial bodies, which have acquired expertise because
their jurisdiction is con ned to speci c matters, are generally accorded not only great
respect but even nality, and are binding upon this Court unless there is a showing of grave
abuse of discretion, or where it is clearly shown that they were arrived at arbitrarily or in
disregard of the evidence on record. Decisions, however concisely written, must distinctly
and clearly set forth the facts and law upon which they are based. This rule applies as well
to dispositions by quasi-judicial and administrative bodies.
3.LABOR AND SOCIAL LEGISLATION; LABOR CODE; RETRENCHMENT; WHEN A COMPANY
MAY BE EXEMPTED FROM PAYMENT OF SEPARATION PAY; NOT APPLICABLE IN CASE
AT BAR. — Well-settled is the rule that business losses or nancial reverses, in order to
sustain retrenchment of personnel or closure of business and warrant exemption from
payment of separation pay, must be proved with clear and satisfactory evidence. The
records, however, are devoid of such evidence. The labor arbiter, as af rmed by NLRC,
correctly found that petitioners stopped their taxi business within Clark Air Base because
of the phase-out of U.S. military presence thereat. It was not due to any great nancial loss
because petitioners' taxi business was earning pro tably at the time of its closure. With
respect to the amount of separation pay that should be granted, Article 283 of the Labor
Code provides: ". . . In case of retrenchment to prevent losses and in case of closures or
cessation of operations of establishment or undertaking not due to serious business
losses or nancial reverses, the separation pay shall be equivalent to one (1) month pay or
at least one-half (Â½) month pay for every year of service, whichever is higher. A fraction of
at least six (6) months shall be-considered one (1) whole year."
CD Technologies Asia, Inc. © 2016 cdasiaonline.com
4.ID.; ID.; EMPLOYMENT; LABOR-ONLY CONTRACTING AND INDEPENDENT
CONTRACTORS, DISTINGUISHED. — Labor-only contracting exists where: (1) the person
supplying workers to an employer does not have substantial capital or investment in the
form of tools, equipment, machinery, and work premises, among others; and (2) the
workers recruited and placed by such person are performing activities which are directly
related to the principal business of the employer. Independent contractors, meanwhile, are
those who exercise independent employment, contracting to do a piece of work according
to their own methods without being subject to control of their employer except as to the
result of their work.
5.COMMERCIAL LAW; CORPORATION; WHEN A STOCKHOLDER MAY BE HELD LIABLE
FOR CORPORATE TORT; CASE AT BAR. — Our jurisprudence is wanting as to the de nite
scope of "corporate tort." Essentially, "tort" consists in the violation of a right given or the
omission of a duty imposed by law. Simply stated, tort is a breach of a legal duty. Article
283 of the Labor Code mandates the employer to grant separation pay to employees in
case of closure or cessation of operations of establishment or undertaking not due to
serious business losses or nancial reverses, which is the condition obtaining at bar. CFTI
failed to comply with this law-imposed duty or obligation. Consequently, its stockholder
who was actively engaged in the management or operation of the business should be held
personally liable. Furthermore, in MAM Realty Development vs. NLRC, 244 SCRA 797, June
2, 1995, the Court recognized that a director or of cer may still be held solidarily liable
with a corporation by speci c provision of law. thus: ". . . A corporation, being a juridical
entity, may act only through its directors, of cers and employees. Obligations incurred by
them, acting as such corporate agents, are not theirs but the direct accountabilities of the
corporation they represent. True, solidary liabilities may at times be incurred but only when
exceptional circumstances warrant such as, generally, in the following cases: . . . 4. When a
director, trustee or of cer is made, by speci c provision of law, personally liable for his
corporate action." As pointed out earlier, the fth paragraph of Section 100 of the
Corporation Code speci cally imposes personal liability upon the stockholder actively
managing or operating the business and affairs of the close corporation. The Court here
nds no application to the rule that a corporate of cer cannot be held solidarity liable with
a corporation in the absence of evidence that he had acted in bad faith or with malice. In
the present case, Sergio Naguiat is held solidarily liable for corporate tort because he had
actively engaged in the management and operation of CFTI, a close corporation.
DECISION
PANGANIBAN , J : p
Are private respondent-employees of petitioner Clark Field Taxi, Inc., who were separated
from service due to the closure of Clark Air Base, entitled to separation pay and, if so, in
what amount? Are of cers of corporations ipso facto liable jointly and severally with the
companies they represent for the payment of separation pay?
These questions are answered by the Court in resolving this petition for certiorari
under Rule 65 of the Rules of Court assailing the Resolutions of the National Labor
Relations Commission (Third Division) 1 promulgated on February 28, 1994, 2 and May
31, 1994. 3 The February 28, 1994 Resolution af rmed with modi cations the decision 4
of Labor Arbiter Ariel C. Santos in NLRC Case No. RAB-III-12-2477-91. The second
Resolution denied the motion for reconsideration of herein petitioners.
The NLRC modi ed the decision of the labor arbiter by granting separation pay to
herein individual respondents in the increased amount of US$120.00 for every year of
service or its peso equivalent, and holding Sergio F. Naguiat Enterprises, Inc., Sergio F.
Naguiat and Antolin T. Naguiat, jointly and severally liable with Clark Field Taxi, Inc.
("CFTI").
The Facts
The following facts are derived from the records of the case:
Petitioner CFTI held a concessionaire's contract with the Army Air Force Exchange
Services ("AAFES") for the operation of taxi services within Clark Air Base. Sergio F.
Naguiat was CFTI's president, while Antolin T. Naguiat was its vice-president. Like Sergio
F. Naguiat Enterprises, Incorporated ("Naguiat Enterprises"), a trading rm, it was a
family-owned corporation.
Individual respondents were previously employed by CFTI as taxicab drivers.
During their employment, they were required to pay a daily "boundary fee" in the amount
of US$26.50 for those working from 1:00 a.m. to 12:00 noon, and US$27.00 for those
working from 12:00 noon to 12:00 midnight. All incidental expenses for the maintenance
of the vehicles they were driving were accounted against them, including gasoline
expenses.
The drivers worked at least three to four times a week, depending on the
availability of taxicabs. They earned not less than US$15.00 daily. In excess of that
amount, however, they were required to make cash deposits to the company, which they
could later withdraw every fifteen days.
Due to the phase-out of the US military bases in the Philippines, from which Clark
Air Base was not spared, the AAFES was dissolved, and the services of individual
respondents were officially terminated on November 26, 1991.
The AAFES Taxi Drivers Association ("drivers' union"), through its local president,
Eduardo Castillo, and CFTI held negotiations as regards separation bene ts that should
be awarded in favor of the drivers. They arrived at an agreement that the separated
drivers will be given P500.00 for every year of service as severance pay. Most of the
drivers accepted said amount in December 1991 and January 1992. However, individual
respondents herein refused to accept theirs.
Instead, after disaf liating themselves from the drivers' union, individual
respondents, through the National Organization of Workingmen ("NOWM"), a labor
organization which they subsequently joined, led a complaint 5 against "Sergio F.
Naguiat doing business under the name and style Sergio F. Naguiat Enterprises, Inc.,
Army-Air Force Exchange Services (AAFES) with Mark Hooper as Area Service Manager,
Paci c Region, and AAFES Taxi Drivers Association with Eduardo Castillo as President,"
for payment of separation pay due to termination/phase-out. Said complaint was later
amended 6 to include additional taxi drivers who were similarly situated as complainants,
and CFTI with Antolin T. Naguiat as vice president and general manager, as party
respondent.
In their complaint, herein private respondents alleged that they were regular
employees of Naguiat Enterprises, although their individual applications for employment
were approved by CFTI. They claimed to have been assigned to Naguiat Enterprises after
having been hired by CFTI, and that the former thence managed, controlled and
supervised their employment. They averred further that they were entitled to separation
pay based on their latest daily earnings of US$15.00 for working sixteen (16) days a
month.
In their position paper submitted to the labor arbiter, herein petitioners claimed
that the cessation of business of CFTI on November 26, 1991, was due to "great nancial
losses and lost business opportunity" resulting from the phase-out of Clark Air Base
brought about by the Mt. Pinatubo eruption and the expiration of the RP-US military
bases agreement. They admitted that CFTI had agreed with the drivers' union, through its
President Eduardo Castillo who claimed to have had blanket authority to negotiate with
CFTI in behalf of union members, to grant its taxi driver-employees separation pay
equivalent to P500.00 for every year of service.
The labor arbiter, nding the individual complainants to be regular workers of CFTI,
ordered the latter to pay them P1,200.00 for every year of service "for humanitarian
consideration," setting aside the earlier agreement between CFTI and the drivers' union of
P500.00 for every year of service. The labor arbiter rejected the allegation of CFTI that it
was forced to close business due to "great nancial losses and lost business
opportunity" since, at the time it ceased operations, CFTI was pro tably earning and the
cessation of its business was due to the untimely closure of Clark Air Base. In not
awarding separation pay in accordance with the Labor Code, the labor-arbiter explained:
"To allow respondents exemption from its (sic) obligation to pay separation pay
would be inhuman to complainants but to impose a monetary obligation to an
employer whose pro table business was abruptly shot (sic) down by force
majeure would be unfair and unjust to say the least." 7
and thus, simply awarded an amount for "humanitarian consideration."

Herein individual private respondents appealed to the NLRC. In its Resolution, the NLRC
modi ed the decision of the labor arbiter by granting separation pay to the private
respondents. The concluding paragraphs of the NLRC Resolution read:
"The contention of complainant is partly correct. One-half month salary should be
US$120.00 but this amount can not be paid to the complainant in U.S. Dollar
which is not the legal tender in the Philippines. Paras, in commenting on Art. 1249
of the New Civil Code, de nes legal tender as 'that which a debtor may compel a
creditor to accept in payment of the debt. The complainants who are the creditors
in this instance can be compelled to accept the Philippine peso which is the legal
tender, in which case, the table of conversion (exchange rate) at the time of
payment or satisfaction of the judgment should be used. However, since the
choice is left to the debtor, (respondents) they may choose to pay in US dollar.'
(Phoenix Assurance Co. vs. Macondray & Co. Inc., L-25048, May 13, 1975)
In discharging the above obligations, Sergio F. Naguiat Enterprises, which is
headed by Sergio F. Naguiat and Antolin Naguiat, father and son at the same time
the President and Vice-President and General Manager, respectively, should be
joined as indispensable party whose liability is joint and several. (Sec. 7, Rule 3,
Rules of Court)" 8
As mentioned earlier, the motion for reconsideration of herein petitioners was denied by
the NLRC. Hence, this petition with prayer for issuance of a temporary restraining order.
Upon posting by the petitioners of a surety bond, a temporary restraining order 9 was
issued by this Court enjoining execution of the assailed Resolutions.

Issues
The petitioners raise the following issues before this Court for resolution:
"I.Whether or not public respondent NLRC (3rd Div.) committed grave abuse of
discretion amounting to lack of jurisdiction in issuing the appealed resolution;
II.Whether or not Messrs. Teo lo Rafols and Romeo N. Lopez could validly
represent herein private respondents; and,
III.Whether or not the resolution issued by public respondent is contrary to law."
10
Petitioners also submit two additional issues by way of a supplement 1 1 to their petition,
to Wit: that Petitioners Sergio F. Naguiat and Antolin Naguiat were denied due process;
and that petitioners were not furnished copies of private respondents' appeal to the NLRC.
As to the procedural lapse of insuf cient copies of the appeal, the proper forum before
which petitioners should have raised it is the NLRC. They, however, failed to question this in
their motion for reconsideration. As a consequence, they are deemed to have waived the
same and voluntarily submitted themselves to the jurisdiction of the appellate body.
Anent the rst issue raised in their original petition, petitioners contend that NLRC
committed grave abuse of discretion amounting to lack or excess of jurisdiction in
unilaterally increasing the amount of severance pay granted by the labor arbiter. They
claim that this was not supported by substantial evidence since it was based simply on
the self-serving allegation of respondents that their monthly take-home pay was not
lower than $240.00.
On the second issue, petitioners aver that NOWM cannot make legal
representations in behalf of individual respondents who should, instead, be bound by the
decision of the union (AAFES Taxi Drivers Association) of which they were members.
As to the third issue, petitioners incessantly insist that Sergio F. Naguiat
Enterprises, Inc. is a separate and distinct juridical entity which cannot be held jointly and
severally liable for the obligations of CFTI. And similarly, Sergio F. Naguiat and Antolin
Naguiat were merely of cers and stockholders of CFTI and, thus, could not be held
personally accountable for corporate debts.
Lastly, Sergio and Antolin Naguiat assail the Resolution of NLRC holding them
solidarily liable despite not having been impleaded as parties to the complaint.
Individual respondents filed a comment separate from that of NOWM. In sum, both
aver that petitioners had the opportunity but failed to refute, the taxi drivers' claim of
having an average monthly earning of $240.00; that individual respondents became
members of NOWM after disaf liating themselves from the AAFES Taxi Drivers
Association which, through the manipulations of its President Eduardo Castillo,
unconscionably compromised their separation pay; and that Naguiat Enterprises, being
their indirect employer, is solidarily liable under the law for violation of the Labor Code, in
this case, for nonpayment of their separation pay.
The Solicitor General unqualifiedly supports the allegations of private respondents.
In addition, he submits that the separate personalities of respondent corporations and
their of cers should be disregarded and considered one and the same as these were
used to perpetrate injustice to their employees.
The Court's Ruling
As will be discussed below, the petition is partially meritorious.
First Issue: Amount of Separation Pay
Firmly, we reiterate the rule that in a petition for certiorari led pursuant to Rule 65 of the
Rules of Court, which is the only way a labor case may reach the Supreme Court, the
petitioner/s must clearly show that the NLRC acted without or in excess of jurisdiction or
with grave abuse of discretion. 12
Long-standing and well-settled in Philippine jurisprudence is the judicial dictum that
ndings of fact of administrative agencies and quasi-judicial bodies, which have acquired
expertise because their jurisdiction is con ned to speci c matters, are generally accorded
not only great respect but even nality; and are binding upon this Court unless there is a
showing of grave abuse of discretion, or where it is clearly shown that they were arrived at
arbitrarily or in disregard of the evidence on record. 13
Nevertheless, this Court carefully perused the records of the instant case if only to
determine whether public respondent committed grave abuse of discretion, amounting to
lack of jurisdiction, in granting the clamor of private respondents that their separation pay
should be based on the amount of $240.00, allegedly their minimum monthly earnings as
taxi drivers of petitioners.
In their amended complaint before the Regional Arbitration Branch in San Fernando,
Pampanga, herein private respondents set forth in detail the work schedule and nancial
arrangement they had with their employer. Therefrom they inferred that their monthly take-
home pay amounted to not less than $240.00. Herein petitioners did not bother to refute
nor offer any evidence to controvert said allegations. Remaining undisputed, the labor
arbiter adopted such facts in his decision. Petitioners did not even appeal from the
decision of the labor arbiter nor manifest any error in his ndings and conclusions. Thus,
petitioners are in estoppel for not having questioned such facts when they had all
opportunity to do so. Private respondents, like petitioners, are bound by the factual
findings of Respondent Commission.
Petitioners also claim that the closure of their taxi business was due to great nancial
losses brought about by the eruption of Mt. Pinatubo which made the roads practically
impassable to their taxicabs. Likewise well-settled is the rule that business losses or
nancial reverses, in order to sustain retrenchment of personnel or closure of business
and warrant exemption from payment of separation pay, must be proved with clear and
satisfactory evidence. 1 4 The records, however, are devoid of such evidence. Cdasia
The labor arbiter; as af rmed by NLRC, correctly found that petitioners stopped their taxi
business within Clark Air Base because of the phase-out of U.S. military presence thereat.
It was not due to any great nancial loss because petitioners' taxi business was earning
profitably at the time of its closure.
With respect to the amount of separation pay that should be granted, Article 283 of the
Labor Code provides:
". . . In case of retrenchment to prevent losses and in cases of closures or
cessation of operations of establishment or undertaking not due to serious
business losses or nancial reverses, the separation pay shall be equivalent to
one (1) month pay or at least one-half (Â½) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered one
(1 ) whole year."

Considering the above, we nd that NLRC did not commit grave abuse of discretion in
ruling that individual respondents were entitled to separation pay 1 5 in the amount $120.00
(one-half of $240.00 monthly pay) or its peso equivalent for every year of service.
Second Issue: NOWM's Personality to
Represent Individual Respondents-Employees
On the question of NOWM's authority to represent private respondents, we hold
petitioners in estoppel for not having seasonably raised this issue before the labor arbiter
or the NLRC. NOWM was already a party-litigant as the organization representing the taxi
driver-complainants before the labor arbiter. But petitioners who were party-respondents
in said complaint did not assail the juridical personality of NOWM and the validity of its
representations in behalf of the complaining taxi drivers before the quasi-judicial bodies.
Therefore, they are now estopped from raising such question before this Court. In any
event, petitioners acknowledged before this Court that the taxi drivers allegedly
represented by NOWM, are themselves parties in this case. 16
Third Issue: Liability of Petitioner-
Corporations and Their Respective Officers
The resolution of this issue involves another factual nding that Naguiat Enterprises
.actually managed, supervised and controlled employment terms of the taxi drivers,
making it their indirect employer. As adverted to earlier, factual ndings of quasi-judicial
bodies are binding upon the court in the absence of a showing of grave abuse of
discretion.
Unfortunately, the NLRC did not discuss or give any explanation for holding Naguiat
Enterprises and its of cers jointly and severally liable in discharging CFTI's liability for
payment of separation pay. We again remind those concerned that decisions, however
concisely written, must distinctly and clearly set forth the facts and law upon which they
are based. 1 7 This rule applies as well to dispositions by quasi-judicial and administrative
bodies.
Naguiat Enterprises Not Liable
In impleading Naguiat Enterprises as solidarily liable for the obligations of CFTI,
respondents rely on Articles 106, 1 8 107 1 9 and 109 2 0 of the Labor Code.
Based on factual submissions of the parties, the labor arbiter, however, found that
individual respondents were regular employees of CFTI who received wages on a
boundary or commission basis.
We nd no reason to make a contrary nding. Labor-only contracting exists where:
(1) the person supplying workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machinery, and work premises, among
others; and (2) the workers recruited and placed by such person are performing activities
which are directly related to the principal business of the employer. 2 1 Independent
contractors, meanwhile, are those who exercise independent employment, contracting to
do a piece of work according to their own methods without being subject to control of
their employer except as to the result of their work. 22
From the evidence proffered by both parties, there is no substantial basis to hold
that Naguiat Enterprises is an indirect employer of individual respondents much less a
labor only contractor. On the contrary, petitioners submitted documents such as the
drivers' applications for employment with CFTI, 2 3 and social security remittances 2 4 and
payroll 2 5 of Naguiat Enterprises showing that none of the individual respondents were
its employees. Moreover, in the contract 2 6 between CFTI and AAFES, the former, as
concessionaire, agreed to purchase from AAFES for a certain amount within a speci ed
period a eet of vehicles to be "ke(pt) on the road" by CFTI, pursuant to their
concessionaire's contract. This indicates that CFTI became the owner of the taxicabs
which became the principal investment and asset of the company.
Private respondents failed to substantiate their claim that Naguiat Enterprises
managed, supervised and controlled their employment. It appears that they were
confused on the personalities of Sergio F. Naguiat as an individual who was the president
of CFTI, and Sergio F. Naguiat Enterprises, Inc., as a separate corporate entity with a
separate business. They presumed that Sergio F. Naguiat, who was at the same time a
stockholder and director 2 7 of Sergio F. Naguiat Enterprises, Inc., was managing and
controlling the taxi business on behalf of the latter. A closer scrutiny and analysis of the
records, however, evince the truth of the matter: that Sergio F. Naguiat, in supervising the-
taxi drivers and determining their employment terms, was rather carrying out his
responsibilities as president of CFTI. Hence, Naguiat Enterprises as a separate
corporation does not appear to be involved at all in the taxi business.
To illustrate further, we refer to the testimony of a driver-claimant on cross
examination.
"Atty. Suarez
Is it not true that you applied not with Sergio F. Naguiat but with Clark Field Taxi?
Witness
I applied for (sic) Sergio F. Naguiat
Atty. Suarez
Sergio F. Naguiat as an individual or the corporation?
Witness
'Sergio F. Naguiat na tao.'
Atty. Suarez
Who is Sergio F. Naguiat?
Witness
He is the one managing the Sergio F. Naguiat Enterprises and he is the one whom
we believe as our employer.
Atty. Suarez
What is exactly the position of Sergio F. Naguiat with the Sergio F. Naguiat
Enterprises?
Witness
He is the owner, sir.
Atty. Suarez

How about with Clark Field Taxi Incorporated what is the position of Mr. Naguiat?
Witness
What I know is that he is a concessionaire.
xxx xxx xxx

Atty. Suarez
But do you also know that Sergio F. Naguiat is the President of Clark Field Taxi,
Incorporated?
Witness
Yes. sir.
Atty. Suarez
How about Mr. Antolin Naguiat what is his role in the taxi services, the operation
of the Clark Field Taxi, Incorporated?
Witness
He is the vice president." 28
And, although the witness insisted that Naguiat Enterprises was his employer, he could not
deny that he received his salary from the office of CFTI inside the base. 29
Another driver-claimant admitted, upon the prodding of counsel for the
corporations, that Naguiat Enterprises was in the trading business while CFTI was in taxi
services. 30
In addition, the Constitution 3 1 of CFTI-AAFES Taxi Drivers Association which,
admittedly, was the union of individual respondents while still working at Clark Air Base,
states that members thereof are the employees of CFTI and "(f)or collective bargaining
purposes, the definite employer is the Clark Field Taxi Inc."
From the foregoing, the ineludible conclusion is that CFTI was the actual and direct
employer of individual respondents, and that Naguiat Enterprises was neither their
indirect employer nor labor-only contractor. It was not involved at all in the taxi business.
CFTI president
solidarily liable
Petitioner-corporations would likewise want to avoid the solidary liability of their of cers.
To bolster their position, Sergio F. Naguiat and Antolin T. Naguiat speci cally aver that they
were denied due process since they were not parties to the complaint below. 3 2 In the
broader interest of justice, we, however, hold that Sergio F. Naguiat, in his capacity as
president of CFTI, cannot be exonerated from joint and several liability in the payment of
separation pay to individual respondents.
A.C. Ransom Labor Union-CCLU vs. NLRC 3 3 is the case in point. A.C. Ransom
Corporation was a family corporation, the stockholders of which were members of the
Hernandez family. In 1973, it led an application for clearance to close or cease
operations, which was duly granted by the Ministry of Labor and Employment, without
prejudice to the right of employees to seek redress of grievance, if any. Backwages of 22
employees, who engaged in a strike prior to the closure, were subsequently computed at
P164,984.00. Up to September 1976, the union led about ten (10) motions for
execution against the corporation, but none could be implemented, presumably for
failure to nd leviable assets of said corporation. In its last motion for execution, the
union asked that of cers and agents of the company be held personally liable for
payment of the backwages. This was granted by the labor arbiter. In the corporation's
appeal to the NLRC, one of the issues raised was: "Is the judgment against a corporation
to reinstate its dismissed employees with backwages, enforceable against its of cer
and agents, in their individual, private and personal capacities, who were not parties in the
case where the judgment was rendered?" The NLRC answered in the negative, on the
ground that of cers of a corporation are not liable personally for of cial acts unless they
exceeded the scope of their authority.
O n certiorari, this Court reversed the NLRC and upheld the labor arbiter. In
imposing joint and several liability upon the company president, the Court, speaking
through Mme. Justice Ameurfina Melencio-Herrera, ratiocinated this wise:
"(b)How can the foregoing (Articles 265 and 273 of the Labor Code) provisions be
implemented when the employer is a corporation? The answer is found in Article
212(c) of the Labor Code which provides:
'(c)'Employer' includes any person acting in the interest of an employer, directly or
indirectly. The term shall not include any labor organization or any of its of cers
or agents except when acting as employer.'
The foregoing was culled from Section 2 of RA 602, the Minimum Wage Law.
Since RANSOM is an arti cial person, it must have an officer who can be
presumed to be the employer, being the 'person acting in the interest of (the)
employer' RANSOM. The corporation, only in the technical sense, is the employer.
The responsible of cer of an employer corporation can be held personally, not to
say even criminally, liable for nonpayment of back wages. That is the policy of
the law. . . .
(c)If the policy of the law were otherwise, the corporation employer can have
devious ways for evading payment of back wages. . . .
(d)The record does not clearly identify 'the of cer or of cers' of RANSOM directly
responsible for failure to pay the back wages of the 22 strikers. In the absence of
definite proof in that regard, we believe it should be presumed that the responsible
of cer is the President of the corporation who can be deemed the chief operation
of cer thereof . Thus, in RA 602, criminal responsibility is with the 'Manager or in
his default, the person acting as such.' In RANSOM, the President appears to be
the Manager." (Emphasis supplied.)
Sergio F. Naguiat, admittedly, was the president of CFTI who actively managed the
business. Thus, applying the ruling in A. C. Ransom, he falls within the meaning of an
"employer" as contemplated by the Labor Code, who may be held jointly and severally liable
for the obligations of the corporation to its dismissed employees.
Moreover, petitioners also conceded that both CFTI and Naguiat Enterprises were
"close family corporations" 3 4 owned by the Naguiat family. Section 100, paragraph 5,
(under Title XII on Close Corporations) of the Corporation Code, states:
"(5)To the extent that the stockholders are actively engage(d) in the management
or operation of the business and affairs of a close corporation, the stockholders
shall be held to strict duciary duties to each other and among themselves. Said
stockholders shall be personally liable for corporate torts unless the corporation
has obtained reasonably adequate liability insurance." (emphasis supplied)
Nothing in the records show whether CFTI obtained "reasonably adequate liability
insurance;" thus, what remains is to determine whether there was corporate tort.
Our jurisprudence is wanting as to the de nite scope of "corporate tort." Essentially, "tort"
consists in the violation of a right given or the omission of a duty imposed by law. 3 5
Simply stated, tort is a breach of a legal duty. 3 6 Article 283 of the Labor Code mandates
the employer to grant separation pay to employees in case of closure or cessation of
operations of establishment or undertaking not due to serious business losses or nancial
reverses, which is the condition obtaining at bar. CFTI failed to comply with this law-
imposed duty or obligation. Consequently, its stockholder who was actively engaged in the
management or operation of the business should be held personally liable.
Furthermore, in MAM Realty Development vs. NLRC, 3 7 the Court recognized that a
director or of cer may still be held solidarily liable with a corporation by speci c
provision of law. Thus:
". . . A corporation, being a juridical entity, may act only through its directors,
of cers and employees. Obligations incurred by them, acting as such corporate
agents, are not theirs but the direct accountabilities of the corporation they
represent. True, solidary liabilities may at times be incurred but only when
exceptional circumstances warrant such as, generally, in the following cases:
xxx xxx xxx
4.When a director, trustee or of cer is made. by speci c provision of law,

personally liable for his corporate action." (footnotes omitted)
As pointed out earlier, the fth paragraph of Section 100 of the Corporation Code
specifically imposes personal liability upon the stockholder actively managing or operating
the business and affairs of the close corporation.
In fact, in posting the surety bond required by this Court for the issuance of a
temporary restraining order enjoining the execution of the assailed NLRC Resolutions,
only Sergio F. Naguiat, in his individual and personal capacity, principally bound himself to
comply with the obligation thereunder, i.e., "to guarantee the payment to private
respondents of any damages which they may incur by reason of the issuance of a
temporary restraining order sought, if it should be nally adjudged that said principals
were not entitled thereto." 38
The Court here nds no application to the rule that a corporate of cer cannot be
held solidarily liable with a corporation in the absence of evidence that he had acted in
bad faith or with malice. 3 9 In the present case, Sergio Naguiat is held solidarily liable for
corporate tort because he had actively engaged in the management and operation of
CFTI, a close corporation.
Antolin Naguiat not personally liable
Antolin T. Naguiat was the vice president of the CFTI. Although he carried the title of
"general manager" as well, it had not been shown that he had acted in such capacity.
Furthermore, no evidence on the extent of his participation in the management or
operation of the business was proffered. In this light, he cannot be held solidarily liable for
the obligations of CFTI and Sergio Naguiat to the private respondents.
Fourth Issue: No Denial of Due Process
Lastly, in petitioners' Supplement to their original petition, they assail the NLRC Resolution
holding Sergio F. Naguiat and Antolin T. Naguiat jointly and severally liable with petitioner-
corporations in the payment of separation pay, averring denial of due process since the
individual Naguiats were not impleaded as parties to the complaint.
We advert to the case of A.C. Ransom once more. The of cers of the corporation
were not parties to the case when the judgment in favor of the employees was rendered.
The corporate of cers raised this issue when the labor arbiter granted the motion of the
employees to enforce the judgment against them. In spite of this, the Court held the
corporation president solidarily liable with the corporation.
Furthermore, Sergio and Antolin Naguiat voluntarily submitted themselves to the
jurisdiction of the labor arbiter when they, in their individual capacities, led a position
paper 40 together with CFTI, before the arbiter. They cannot now claim to have been
denied due process since they availed of the opportunity to present their positions.
WHEREFORE, the foregoing premises considered, the petition is PARTLY
GRANTED. The assailed February 28, 1994 Resolution of the NLRC is hereby MODIFIED
as follows:
(1)Petitioner Clark Field Taxi, Incorporated, and Sergio F. Naguiat, president and
co-owner thereof, are ORDERED to pay, jointly and severally, the individual respondents
their separation pay computed at US$120.00 for every year of service, or its peso
equivalent at the time of payment or satisfaction of the judgment; cdtai
(2)Petitioner Sergio F. Naguiat Enterprises, Incorporated, and Antolin T. Naguiat

are ABSOLVED from liability in the payment of separation pay to individual respondents.
SO ORDERED.
Narvasa, C .J ., Davide, Jr., Melo and Francisco, JJ ., concur.
Footnotes
1.Composed of Comm. Ireneo B. Bernardo, ponente, with Comms. Lourdes C. Javier (presiding
commissioner) and Joaquin A. Tanodra, concurring.
2.Rollo, pp. 69-73.
3.Ibid., p. 82.
4.Promulgated on June 4, 1993; Rollo, pp. 48-56.
5.Ibid., pp. 14-18.

6.Ibid., pp. 20-29.
7.Rollo, p. 56.
8.Rollo, pp. 72-73.

9.Rollo, pp. 131-132.

10.Ibid., p. 6.
11.Ibid., pp. 97-102.
12.Bordeos, et al. vs. NLRC, et al., G.R. Nos. 115314-23, September 26, 1996.
13.Maya Farms Employees Organization vs. NLRC, 239 SCRA 508, December 28, 1994.
14.See Revidad vs. NLRC, 245 SCRA 356, June 27, 1995; St. Gothard Disco Pub vs. NLRC, 218
SCRA 321, 334, February 1, 1993.
15.Mobil Employees Association vs. NLRC, 183 SCRA 737, March 28, 1990; See Catatista vs.
NLRC, 247 SCRA 46, 1995; Shoppers Gain Supermart vs. NLRC G.R. No. 110731, July 26,
1996.
16.Petition for Certiorari, p. 2; Rollo, p. 3.

17.Del Mundo vs. Court of Appeals, 240 SCRA 348, January 20, 1995; Estoya vs. Abraham-
Singson, 237 SCRA 1, September 26, 1994.
18."Art. 106. Contractor or subcontractor. — Whenever an employer enters into a contract with
another person for the performance of the former's work, the employees of the
contractor and of the latter's subcontractor, if any, shall be paid in accordance with the
provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his employees in
accordance with this Code, the employer shall be jointly and severally liable with his
contractor or subcontractor to such employees to the extent of the work performed under
the contract, in the same manner and extent that he is liable to employees directly
employed by him.
The Secretary of Labor may, by appropriate regulations, restrict or prohibit the contracting out
of labor to protect the rights of workers established under this Code. In so prohibiting. or
restricting, he may make appropriate distinctions between labor-only contracting and job
contracting as well as differentiations within these types of contracting and determine
who among the parties involved shall be considered as the employer for the purposes of
this Code, to prevent any violation or circumvention of any. provision of this Code.
There is 'labor-only' contracting where the person supplying workers to an employer does not
have substantial capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed by such persons are
performing activities which are directly related to the principal business of such
employer. In such cases, the person or intermediary shall be considered as merely an
agent of the employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him."
19."Art. 107. Indirect employer. — The provisions of the immediately preceding Article shall
likewise apply to any person, partnership, association or corporation which, not being an
employer, contracts with an independent contractor for the performance of any work,
task, job or project."
20."Art. 109.Solidary liability . — The provisions of existing laws to the contrary notwithstanding,
every employer or indirect employer shall be held responsible with his contractor or
subcontractor for any violation of any provision of this Code. For purposes of
determining the extent of their civil liability under this Chapter, they shall be considered
as direct employers."

21.Neri vs. NLRC, 224 SCRA 717, July 23, 1993.
22.Villuga vs. NLRC, 225 SCRA 537, August 23, 1993.

23.Records, pp. 33-46.
24.Ibid., pp. 142-205.

25.Ibid., 206-230.
26.Annex "C" to Respondent CFTI's (petitioner herein) Appearance and Omnibus Motion;
records, pp. 47-48.
27.Motion for Reconsideration, p. 6; Rollo, p. 79.
28.TSN, May 18, 1992, pp. 3-6.
29.Ibid., pp. 9-10.

30.TSN, May 29, 1992, pp. 8-9.
31.Records, pp. 235-246.
32.Rollo, p. 231.
33.142 SCRA 269, June 10, 1986.
34.Motion for Reconsideration, p. 4; Records, p. 436.

35.Words and Phrases, Permanent Edition, v. 41A, p. 503.
36.Ibid.; Bouvier's Law Dictionary, Third Revision, v. 2.
37.244 SCRA 797, 802-803, June 2, 1995.

38.Surety bond; Rollo, p. 105.
39.See, Sunio vs. NLRC, 127 SCRA 390, January 31, 1984; and General Bank and Trust Co . vs.
Court of Appeals, 135 SCRA 569, April 9, 1985.
40.Annex "C" to Petition; Rollo, pp. 31-36.

THIRD DIVISION
[G.R. No. 97336. February 19, 1993.]
GASHEM SHOOKAT BAKSH , petitioner, vs. HON. COURT OF APPEALS

and MARILOU T. GONZALES , respondents.
Public Attorney's Office for petitioner.

Corleto R. Castro for private respondent.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; CREDIBILITY OF WITNESSES; FINDINGS OF THE TRIAL

COURT; RULE AND EXCEPTIONS. — It is the rule in this jurisdiction that appellate courts
will not disturb the trial court's findings as to the credibility of witnesses, the latter court
having heard the witnesses and having had the opportunity to observe closely their
deportment and manner of testifying, unless the trial court had plainly overlooked facts of
substance or value which, if considered, might affect the result of the case. (People vs.
Garcia, 89 SCRA 440 [1979]; People vs. Bautista, 92 SCRA 465 [1979]; People vs. Abejuela,
92 SCRA 503 [1979]; People vs. Arciaga, 98 SCRA 1 [1980]; People vs. Marzan, 128 SCRA
203 [1984]; People vs., Alcid, 135 SCRA 280 [1985]; People vs. Sanchez, 199 SCRA 414
[1991]; People vs. Atilano, 204 SCRA 278 [1991]). Equally settled is the rule that only
questions of law may be raised in a petition for review on certiorari under Rule 45 of the
Rules of Court. It is not the function of this Court to analyze or weigh all over again the
evidence introduced by the parties before the lower court. There are, however, recognized
exceptions to this rule. Thus, in Medina vs. Asistio, Jr., this Court took the time, again, to
enumerate these exceptions: "(1) When the conclusion is a finding grounded entirely on
speculation, surmises or conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When
the inference made is manifestly mistaken, absurd or impossible (Luna v. Linatok, 74 Phil.
15 [1942]); (3) Where there is a grave abuse of discretion (Buyco v. People, 95 Phil. 453
[1955]); (4) When the judgment is based on a misapprehension of facts (Cruz v. Sosing, L-
4875, Nov. 27, 1953); (5) When the findings of fact are conflicting (Casica v. Villaseca, L-
9590 Ap. 30, 1957; unrep.) (6) When the Court of Appeals, in making its findings, went
beyond the issues of the case and the same is contrary to the admissions of both
appellant and appellee (Evangelista v. Alto Surety and Insurance Co., 103 Phil. 401 [1958]);
(7) The findings of the Court of Appeals are contrary to those of the trial court (Garcia v.
Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA 593 [1986]); (8)
When the findings of fact are conclusions without citation of specific evidence on which
they are based (Ibid.,); (9) When the facts set forth in the petition as well as in the
petitioners' main and reply briefs are not disputed by the respondents (Ibid.,); and (10) The
finding of fact of the Court of Appeals is premised on the supposed absence of evidence
and is contradicted by the evidence on record (Salazar v. Gutierrez, 33 SCRA 242 [1970])."
Petitioner has not endeavored to point out to Us the existence of any of the above quoted
exceptions in this case. Consequently, the factual findings of the trial and appellate courts
must be respected.
2. CIVIL LAW; QUASI-DELICT; TORTS; ART. 21 OF THE CIVIL CODE; CONSTRUED. —
Article 2176 of the Civil Code, which defines a quasi-delict is limited to negligent acts or
omissions and excludes the notion of willfulness or intent. Quasi-delict, known in Spanish
legal treatises as culpa aquiliana, is a civil law concept while torts is an Anglo-American or
common law concept. Torts is much broader than culpa aquiliana because it includes not
only negligence, but intentional 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. (TOLENTINO, A.M. Commentaries and Jurisprudence on the
Civil Code of the Philippines, vol. 1, 1985 ed., 72).
3. ID.; ID.; ID.; ID.; BREACH OF PROMISE TO MARRY; RULE; RATIONALE. — The existing
rule is that a breach of promise to marry per se is not an actionable wrong (Hermosisima
vs. Court of Appeals, 109 Phil. 629 [1960]; Estopa vs. Piansay, 109 Phil. 640 [1960])
Congress deliberately eliminated from the draft of the New Civil Code the provisions that
would have made it so. The reason therefor is set forth in the report of the Senate
Committee on the Proposed Civil Code, from which We quote: "The elimination of this
chapter is proposed. That breach of promise to marry is not actionable has been definitely
decided in the case of De Jesus vs. Syquia (58 Phil. 866 [1933]). The history of breach of
promise suits in the United States and in England has shown that no other action lends
itself more readily to abuse by designing women and unscrupulous men. It is this
experience which has led to the abolition of rights of action in the so-called Heart Balm
suits in many of the American states . . ." This notwithstanding, the said Code contains a
provision, Article 21, which is designed to expand the concept of torts or quasi-delict in
this jurisdiction by granting adequate legal remedy for the untold number of moral wrongs
which is impossible for human foresight to specifically enumerate and punish in the
statute books (Philippine National Bank vs. Court of Appeals, 83 SCRA 237 [1978]).
4. ID.; ID.; ID.; ID.; ID.; AWARD OF DAMAGES, JUSTIFIED BECAUSE OF FRAUD AND
DECEIT BEHIND IT; CASE AT BAR. — In the light of the above laudable purpose of Article
21, We are of the opinion, and so hold, that where a man's promise to marry is in fact the
proximate cause of the acceptance of his love by a woman and his representation to fulfill
that promise thereafter becomes the proximate cause of the giving of herself unto him in a
sexual congress, proof that he had, in reality, no intention of marrying her and that the
promise was only a subtle scheme or deceptive device to entice or inveigle her to accept
him and to obtain her consent to the sexual act, could justify the award of damages
pursuant to Article 21 not because of such promise to marry but because of the fraud and
deceit behind it and the willful injury to her honor and reputation which followed thereafter.
It is essential, however, that such injury should have been committed in a manner contrary
to morals, good customs or public policy. In the instant case, respondent Court found that
it was the petitioner's "fraudulent and deceptive protestations of love for and promise to
marry plaintiff that made her surrender her virtue and womanhood to him and to live with
him on the honest and sincere belief that he would keep said promise, and it was likewise
these fraud and deception on appellant's part that made plaintiff's parents agree to their
daughter's living-in with him preparatory to their supposed marriage." In short, the private
respondent surrendered her virginity, the cherished possession of every single Filipina, not
because of lust but because of moral seduction — the kind illustrated by the Code
Commission in its example earlier adverted to. The petitioner could not be held liable for
criminal seduction punished under either Article 337 or Article 338 of the Revised Penal
Code because the private respondent was above eighteen (18) years of age at the time of
the seduction. Prior decisions of this Court clearly suggest that Article 21 may be applied-
in a breach of promise to marry where the woman is a victim of moral seduction.
5. ID.; PARI DELICTO RULE; DEFINED; NOT APPRECIATED IN CASE AT BAR. — The pari
delicto rule does not apply in this case for while indeed, the private respondent may not
have been impelled by the purest of intentions, she eventually submitted to the petitioner in
sexual congress not out of lust, but because of moral seduction. In fact, it is apparent that
she had qualms of conscience about the entire episode for as soon as she found out that
the petitioner was not going to marry her after all, she left him. She is not, therefore, in pari
delicto with the petitioner. Pari delicto means "in equal fault; in a similar offense or crime;
equal in guilt or in legal fault." (Black's Laws Dictionary, Fifth ed., 1004). At most, it could be
conceded that she is merely in delicto. "Equity often interferes for the relief of the less
guilty of the parties, where his transgression has been brought about by the imposition or
undue influence of the party on whom the burden of the original wrong principally rests, or
where his consent to the transaction was itself procured by fraud." (37 AM Jur 2d. 401). In
Mangayao vs. Lasud, (11 SCRA 158 [1964]) We declared: "Appellants likewise stress that
both parties being at fault, there should be no action by one against the other (Art. 1412,
New Civil Code). This rule, however, has been interpreted as applicable only where the fault
on both sides is, more or less, equivalent. It does not apply where one party is literate or
intelligent and the other one is not (c.f. Bough vs. Cantiveros, 40 Phil. 209)."
DECISION
DAVIDE, JR. , J : p
This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to review and set
aside the Decision 1 of the respondent Court of Appeals in CA-G.R. CV No. 24256 which
affirmed in toto the 16 October 1989 Decision or Branch 38 (Lingayen) of the Regional
Trial Court (RTC) of Pangasinan in Civil Case No. 16503. Presented is the issue of whether
or not damages may be recovered for a breach of promise to marry on the basis of Article
21 of the Civil Code of the Philippines. cdphil
The antecedents of this case are not complicated:

On 27 October 1987, private respondent, without the assistance of counsel, filed with the
aforesaid trial court a complaint 2 for damages against the petitioner for the alleged
violation of their agreement to get married. She alleges in said complaint that: she is
twenty-two (22) years old, single, Filipino and a pretty lass of good moral character and
reputation duly respected in her community; petitioner, on the other hand, is an Iranian
citizen residing at the Lozano Apartments, Guilig, Dagupan City, and is an exchange student
taking a medical course at the Lyceum Northwestern Colleges in Dagupan City; before 20
August 1987; the latter courted and proposed to marry her; she accepted his love on the
condition that they would get married; they therefore agreed to get married after the end
of the school semester, which was in October of that year; petitioner then visited the
private respondent's parents in Bañaga, Bugallon, Pangasinan to secure their approval to
the marriage; sometime in 20 August 1987, the petitioner forced her to live with him in the
Lozano Apartments; she was a virgin before she began living with him; a week before the
filing of the complaint, petitioner's attitude towards her started to change; he maltreated
and threatened to kill her; as a result of such maltreatment, she sustained injuries, during a
confrontation with a representative of the barangay captain of Guilig a day before the filing
of the complaint, petitioner repudiated their marriage agreement and asked her not to live
with him anymore and; the petitioner is already married to someone living in Bacolod City.
Private respondent then prayed for judgment ordering the petitioner to pay her damages in
the amount of not less than P45,000.00, reimbursement for actual expenses amounting to
P600.00, attorney's fees and costs, and granting her such other relief and remedies as may
be just and equitable. The complaint was docketed as Civil Case No 16503.
In his Answer with Counterclaim, 3 petitioner admitted only the personal circumstances of
the parties as averred in the complaint and denied the rest of the allegations either for lack
of knowledge or information sufficient to form a belief as to the truth thereof or because
the true facts are those alleged as his Special and Affirmative Defenses. He thus claimed
that he never proposed marriage to or agreed to be married with the private respondent;
he neither sought the consent and approval of her parents nor forced her to live in his
apartment; he did not maltreat her, but only told her to stop coming to his place because
he discovered that she had deceived him by stealing his money and passport; and finally,
no confrontation took place with a representative of the barangay captain. Insisting, in his
Counterclaim, that the complaint is baseless and unfounded and that as a result thereof, he
was unnecessarily dragged into court and compelled to incur expenses, and has suffered
mental anxiety and a besmirched reputation, he prayed for an award of P5,000.00 for
miscellaneous expenses and P25,000.00 as moral damages.
After conducting a pre-trial on 25 January 1988, the trial court issued a Pre-Trial Order 4
embodying the stipulated facts which the parties had agreed upon, to wit:
"1. That the plaintiff is single and resident (sic) of Bañaga, Bugallon,
Pangasinan, while the defendant is single, Iranian, citizen and resident (sic) of
Lozano Apartment, Guilig, Dagupan City since September 1, 1987 up to the
present;
2. That the defendant is presently studying at Lyceum-Northwestern,
Dagupan City, College of Medicine, second year medicine proper.
3. That the plaintiff is (sic) an employee at Mabuhay Luncheonette,
Fernandez Avenue, Dagupan City since July, 1986 up to the present and a (sic)
high school graduate;
4. That the parties happened to know each other when the Manager of the
Mabuhay Luncheonette, Johnny Rabino introduced the defendant to the plaintiff
on August 3, 1986." cdll
After trial on the merits, the lower court, applying Article 21 of the Civil Code,
rendered on 16 October 1989 a decision 5 favoring the private respondent. The
petitioner was thus ordered to pay the latter damages and attorney's fees; the
dispositive portion of the decision reads:
"IN THE LIGHT of the foregoing consideration, judgment is hereby rendered in
favor of the plaintiff and against the defendant.
1. Condemning (sic) the defendant to pay the plaintiff the sum of twenty
thousand (P20,000.00) pesos as moral damages.
2. Condemning further the defendant to pay the plaintiff the sum of three
thousand (P3,000.00) pesos as atty's fees and two thousand (P2,000.00) pesos
at (sic) litigation expenses and to pay the costs.
3. All other claims are denied." 6
The decision is anchored on the trial court's findings and conclusions that (a) petitioner
and private respondent were lovers, (b) private respondent is not a woman of loose morals
or questionable virtue who readily submits to sexual advances, (c) petitioner, through
machinations, deceit and false pretenses, promised to marry private respondent, (d)
because of his persuasive promise to marry her, she allowed herself to be deflowered by
him, (e) by reason of that deceitful promise, private respondent and her parents — in
accordance with Filipino customs and traditions — made some preparations for the
wedding that was to be held at the end of October 1987 by looking for pigs and chickens,
inviting friends and relatives and contracting sponsors, (f) petitioner did not fulfill his
promise to marry her and (g) such acts of the petitioner, who is a foreigner and who has
abused Philippine hospitality, have offended our sense of morality, good customs, culture
and traditions. The trial court gave full credit to the private respondent's testimony
because, inter alia, she would not have had the temerity and courage to come to court and
expose her honor and reputation to public scrutiny and ridicule if her claim was false. 7
The above findings and conclusions were culled from the detailed summary of the
evidence for the private respondent in the foregoing decision, digested by the respondent
Court as follows:
"According to plaintiff, who claimed that she was a virgin at the time and that she
never had a boyfriend before, defendant started courting her just a few days after
they first met. He later proposed marriage to her several times and she accepted
his love as well as his proposal of marriage on August 20, 1987, on which same
day he went with her to her hometown of Banaga, Bugallon, Pangasinan, as he
wanted to meet her parents and inform them of their relationship and their
intention to get married. The photographs Exhs. "A" to "E" (and their submarkings)
of defendant with members of plaintiff's family or with plaintiff, were taken that
day. Also on that occasion, defendant told plaintiff's parents and brothers and
sisters that he intended to marry her during the semestral break in October, 1987,
and because plaintiff's parents thought he was good and trusted him, they agreed
to his proposal for him to marry their daughter, and they likewise allowed him to
stay in their house and sleep with plaintiff during the few days that they were in
Bugallon. When plaintiff and defendant later returned to Dagupan City, they
continued to live together in defendant's apartment. However, in the early days of
October, 1987, defendant would tie plaintiff's hands and feet while he went to
school, and he even gave her medicine at 4 o'clock in the morning that made her
sleep the whole day and night until the following day. As a result of this live-in
relationship, plaintiff became pregnant, but defendant gave her some medicine to
abort the foetus. Still plaintiff continued to live with defendant and kept
reminding him of his promise to marry her until he told her that he could not do so
because he was already married to a girl in Bacolod City. That was the time
plaintiff left defendant, went home to her parents, and thereafter consulted a
lawyer who accompanied her to the barangay captain in Dagupan City. Plaintiff,
her lawyer, her godmother, and a barangay tanod send by the barangay captain
went to talk to defendant to still convince him to marry plaintiff, but defendant
insisted that he could not do so because he was already married to a girl in
Bacolod City, although the truth, as stipulated by the parties at the pre-trial, is that
defendant is still single.

Plaintiff's father, a tricycle driver, also claimed that after defendant had informed
them of his desire to marry Marilou, he already looked for sponsors for the
wedding, started preparing for the reception by looking for pigs and chickens, and
even already invited many relatives and friends to the forthcoming wedding." 8
Petitioner appealed the trial court's decision to the respondent Court of Appeals which
docketed the case as CA-G R. CV No. 24256. In his Brief, 9 he contended that the trial court
erred (a) in not dismissing the case for lack of factual and legal basis and (b) in ordering
him to pay moral damages, attorney's fees, litigation expenses and costs. Cdpr
On 18 February 1991, respondent Court promulgated the challenged decision 1 0 affirming

in toto the trial court's ruling of 16 October 1989. In sustaining the trial court's findings of
fact, respondent Court made the following analysis:
"First of all, plaintiff, then only 21 years old when she met defendant who was
already 23 years old at the time, does not appear to be a girl of loose morals. It is
uncontradicted that she was a virgin prior to her unfortunate experience with
defendant and never had a boyfriend. She is, as described by the lower court, a
barrio lass 'not used and accustomed to the trend of modern urban life', and
certainly would (sic) not have allowed 'herself to be deflowered by the defendant
if there was no persuasive promise made by the defendant to marry her.' In fact,
we agree with the lower court that plaintiff and defendant must have been
sweethearts or so the plaintiff must have thought because of the deception of
defendant, for otherwise, she would not have allowed herself to be photographed
with defendant in public in so (sic) loving and tender poses as those depicted in
the pictures Exhs. "D" and "E". We cannot believe, therefore, defendant's pretense
that plaintiff was a nobody to him except a waitress at the restaurant where he
usually ate. Defendant in fact admitted that he went to plaintiff's hometown of
Banaga, Bugallon, Pangasinan, at least thrice; at (sic) the town fiesta on February
27, 1987 (p. 54, tsn May 18, 1988), at (sic) a beach party together with the
manager and employees of the Mabuhay Luncheonette on March 3, 1987 (p. 50,
tsn id.), and on April 1, 1987 when he allegedly talked to plaintiff's mother who
told him to marry her daughter (pp. 55-56, tsn id.). Would defendant have left
Dagupan City where he was involved in the serious study of medicine to go to
plaintiff's hometown in Banaga, Bugallon, unless there was (sic) some kind of
special relationship between them? And this special relationship must indeed
have led to defendant's insincere proposal of marriage to plaintiff, communicated
not only to her but also to her parents, and (sic) Marites Rabino, the owner of the
restaurant where plaintiff was working and where defendant first proposed
marriage to her, also knew of this love affair and defendant's proposal of
marriage to plaintiff, which she declared was the reason why plaintiff resigned
from her job at the restaurant after she had accepted defendant's proposal (pp. 6-
7, tsn March 7, 1988).
Upon the other hand, appellant does not appear to be a man of good moral
character and must think so low and have so little respect and regard for Filipino
women that he openly admitted that when he studied in Bacolod City for several
years where he finished his B.S. Biology before he came to Dagupan City to study
medicine, he had a common-law wife in Bacolod City. In other words, he also lived
with another woman in Bacolod City but did not marry that woman, just like what
he did to plaintiff. It is not surprising, then, that he felt so little compunction or
remorse in pretending to love and promising to marry plaintiff, a young, innocent,
trustful country girl, in order to satisfy his lust on her." 1 1
and then concluded:
"In sum, we are strongly convinced and so hold that it was defendant-appellant's
fraudulent and deceptive protestations of love for and promise to marry plaintiff
that made her surrender her virtue and womanhood to him and to live with him on
the honest and sincere belief that he would keep said promise, and it was likewise
these (sic) fraud and deception on appellant's part that made plaintiff's parents
agree to their daughter's living-in with him preparatory to their supposed marriage.
And as these acts of appellant are palpably and undoubtedly against morals,
good customs, and public policy, and are even gravely and deeply derogatory and
insulting to our women, coming as they do from a foreigner who has been
enjoying the hospitality of our people and taking advantage of the opportunity to
study in one of our institutions of learning, defendant-appellant should indeed be
made, under Art. 21 of the Civil Code of the Philippines, to compensate for the
moral damages and injury that he had caused plaintiff, as the lower court ordered
him to do in its decision in this case." 1 2
Unfazed by his second defeat, petitioner filed the instant petition on 26 March 1991; he
raises therein the single issue of whether or not Article 21 of the Civil Code applies to the
case at bar. 1 3
It is petitioner's thesis that said Article 21 is not applicable because he had not committed
any moral wrong or injury or violated any good custom or public policy; he has not
professed love or proposed marriage to the private respondent; and he has never
maltreated her. He criticizes the trial court for liberally invoking Filipino customs, traditions
and culture, and ignoring the fact that since he is a foreigner, he is not conversant with
such Filipino customs, traditions and culture. As an Iranian Moslem, he is not familiar with
Catholic and Christian ways. He stresses that even if he had made a promise to marry, the
subsequent failure to fulfill the same is excusable or tolerable because of his Moslem
upbringing; he then alludes to the Muslim Code which purportedly allows a Muslim to take
four (4) wives and concludes that on the basis thereof, the trial court erred in ruling that he
does not possess good moral character. Moreover, his controversial "common law wife" is
now his legal wife as their marriage had been solemnized in civil ceremonies in the Iranian
Embassy. As to his unlawful cohabitation with the private respondent, petitioner claims
that even if responsibility could be pinned on him for the live-in relationship, the private
respondent should also be faulted for consenting to an illicit arrangement. Finally,
petitioner asseverates that even if it was to be assumed arguendo that he had professed
his love to the private respondent and had also promised to marry her, such acts would not
be actionable in view of the special circumstances of the case. The mere breach of
promise is not actionable. 1 4
On 26 August 1991, after the private respondent had filed her Comment to the petition and
the petitioner had filed his Reply thereto, this Court gave due course to the petition and
required the parties to submit their respective Memoranda, which they subsequently
complied with. prLL
As may be gleaned from the foregoing summation of the petitioner's arguments in support
of his thesis, it is clear that questions of fact, which boil down to the issue of the credibility
of witnesses, are also raised. It is the rule in this jurisdiction that appellate courts will not
disturb the trial court's findings as to the credibility of witnesses, the latter court having
heard the witnesses and having had the opportunity to observe closely their deportment
and manner of testifying, unless the trial court had plainly overlooked facts of substance or
value which, if considered, might affect the result of the case. 1 5
Petitioner has miserably failed to convince Us that both the appellate and trial courts had
overlooked any fact of substance or value which could alter the result of the case.
Equally settled is the rule that only questions of law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court. It is not the function of this Court to
analyze or weigh all over again the evidence introduced by the parties before the lower
court. There are, however, recognized exceptions to this rule. Thus, in Medina vs. Asistio,
Jr., 1 6 this Court took the time, again, to enumerate these exceptions:
xxx xxx xxx
"(1) When the conclusion is a finding grounded entirely on speculation,

surmises or conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When the
inference made is manifestly mistaken, absurd or impossible (Luna v. Linatok, 74
Phil. 15 [1942]); (3) Where there is a grave abuse of discretion (Buyco v. People,
95 Phil. 453 [1955]); (4) When the judgment is based on a misapprehension of
facts (Cruz v. Sosing, L-4875, Nov. 27, 1953); (5) When the findings of fact are
conflicting (Casica v. Villaseca, L-9590 Ap. 30, 1957; unrep.) (6) When the Court of
Appeals, in making its findings, went beyond the issues of the case and the same
is contrary to the admissions of both appellant and appellee (Evangelista v. Alto
Surety and Insurance Co., 103 Phil. 401 [1958]); (7) The findings of the Court of
Appeals are contrary to those of the trial court (Garcia v. Court of Appeals, 33
SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA 593 [1986]); (8) When the
findings of fact are conclusions without citation of specific evidence on which
they are based (Ibid.,); (9) When the facts set forth in the petition as well as in the
petitioners' main and reply briefs are not disputed by the respondents (Ibid.,); and
(10) The finding of fact of the Court of Appeals is premised on the supposed
absence of evidence and is contradicted by the evidence on record (Salazar v.
Gutierrez, 33 SCRA 242 [1970])."
Petitioner has not endeavored to point out to Us the existence of any of the above quoted
exceptions in this case. Consequently, the factual findings of the trial and appellate courts
must be respected.
And now to the legal issue.
The existing rule is that a breach of promise to marry per se is not an actionable wrong. 1 7
Congress deliberately eliminated from the draft of the New Civil Code the provisions that
would have made it so. The reason therefor is set forth in the report of the Senate
Committee on the Proposed Civil Code, from which We quote:
"The elimination of this chapter is proposed. That breach of promise to marry is
not actionable has been definitely decided in the case of De Jesus vs. Syquia. 1 8
The history of breach of promise suits in the United States and in England has
shown that no other action lends itself more readily to abuse by designing women
and unscrupulous men. It is this experience which has led to the abolition of
rights of action in the so-called Heart Balm suits in many of the American states
.." 1 9
This notwithstanding, the said Code contains a provision, Article 21, which is designed to
expand the concept of torts or quasi-delict in this jurisdiction by granting adequate legal
remedy for the untold number of moral wrongs which is impossible for human foresight to
specifically enumerate and punish in the statute books. 2 0
As the Code Commission itself stated in its Report:
"'But the Code Commission has gone farther than the sphere of wrongs defined or
determined by positive law. Fully sensible that there are countless gaps in the
statutes, which leave so many victims of moral wrongs helpless, even though
they have actually suffered material and moral injury, the Commission has
deemed it necessary, in the interest of justice, to incorporate in the proposed Civil
Code the following rule: LLpr
'ARTICLE 23. Any person who wilfully causes loss or injury to

another in a manner that is contrary to morals, good customs or public
policy shall compensate the latter for the damage.'
'An example will illustrate the purview of the foregoing norm: 'A' seduces the
nineteen-year old daughter of 'X.' A promise of marriage either has not been made,
or can not be proved. The girl becomes pregnant. Under the present laws, there is
no crime, as the girl is above eighteen years of age. Neither can any civil action
for breach of promise of marriage be filed. Therefore, though the grievous moral
wrong has been committed, and though the girl and her family have suffered
incalculable moral damage, she and her parents cannot bring any action for
damages. But under the proposed article, she and her parents would have such a
right of action.
Thus at one stroke, the legislator, if the foregoing rule is approved, would
vouchsafe adequate legal remedy for that untold number of moral wrongs which
it is impossible for human foresight to provide for specifically in the statutes." 2 1
Article 2176, of the Civil Code, which defines a quasi-delict thus:

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

intent. Quasi-delict, known in Spanish legal treatises as culpa aquiliana, is a civil law
concept while torts is an Anglo-American or common law concept. Torts is much
broader than culpa aquiliana because it includes not only negligence, but intentional
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. 2 2 In between these
opposite spectrums are injurious acts which, in the absence of Article 21, would have
been beyond redress. Thus, Article 21 lls 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. 2 3
In the light of the above laudable purpose of Article 21, We are of the opinion, and so hold,
that where a man's promise to marry is in fact the proximate cause of the acceptance of
his love by a woman and his representation to fulfill that promise thereafter becomes the
proximate cause of the giving of herself unto him in a sexual congress, proof that he had, in
reality, no intention of marrying her and that the promise was only a subtle scheme or
deceptive device to entice or inveigle her to accept him and to obtain her consent to the
sexual act, could justify the award of damages pursuant to Article 21 not because of such
promise to marry but because of the fraud and deceit behind it and the willful injury to her
honor and reputation which followed thereafter. It is essential, however, that such injury
should have been committed in a manner contrary to morals, good customs or public
policy.
In the instant case, respondent Court found that it was the petitioner's "fraudulent and
deceptive protestations of love for and promise to marry plaintiff that made her surrender
her virtue and womanhood to him and to live with him on the honest and sincere belief that
he would keep said promise, and it was likewise these fraud and deception on appellant's
part that made plaintiff's parents agree to their daughter's living-in with him preparatory to
their supposed marriage." 2 4 In short, the private respondent surrendered her virginity, the
cherished possession of every single Filipina, not because of lust but because of moral
seduction — the kind illustrated by the Code Commission in its example earlier adverted to.
The petitioner could not be held liable for criminal seduction punished under either Article
337 or Article 338 of the Revised Penal Code because the private respondent was above
eighteen (18) years of age at the time of the seduction.
Prior decisions of this Court clearly suggest that Article 21 may be applied-in a breach of
promise to marry where the woman is a victim of moral seduction. Thus, in Hermosisima
vs. Court of Appeals, 2 5 this Court denied recovery of damages to the woman because: LibLex
" . . . we find ourselves unable to say that petitioner is morally guilty of seduction,
not only because he is approximately ten (10) years younger than the
complainant — who was around thirty-six (36) years of age, and as highly
enlightened as a former high school teacher and a life insurance agent are
supposed to be — when she became intimate with petitioner, then a mere
apprentice pilot, but, also, because the court of first instance found that,
complainant 'surrendered herself' to petitioner because, 'overwhelmed by her love'
for him, she 'wanted to bind' him 'by having a fruit of their engagement even
before they had the benefit of clergy.'"
In Tanjanco vs. Court of Appeals, 2 6 while this Court likewise hinted at possible recovery if
there had been moral seduction, recovery was eventually denied because We were not
convinced that such seduction existed. The following enlightening disquisition and
conclusion were made in the said case:
"The Court of Appeals seems to have overlooked that the example set forth in the
Code Commission's memorandum refers to a tort upon a minor who had been
seduced. The essential feature is seduction, that in law is more than mere sexual
intercourse, or a breach of a promise of marriage; it connotes essentially the idea
of deceit, enticement, superior power or abuse of confidence on the part of the
seducer to which the woman has yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S.
vs. Arlante, 9 Phil. 595).
It has been ruled in the Buenaventura case (supra) that —
'To constitute seduction there must in all cases be some sufficient
promise or inducement and the woman must yield because of the promise
or other inducement. If she consents merely from carnal lust and the
intercourse is from mutual desire, there is no seduction (43 Cent Dig. tit.
Seduction, par. 56). She must be induced to depart from the path of virtue
by the use of some species of arts, persuasions and wiles, which are
calculated to have and do have that effect, and which result in her
ultimately submitting her person to the sexual embraces of her seducer'
(27 Phil. 123).
And in American Jurisprudence we find:
'On the other hand, in an action by the woman, the enticement,

persuasion or deception is the essence of the injury; and a mere proof of
intercourse is insufficient to warrant a recovery.
Accordingly it is not seduction where the willingness arises out
sexual desire or curiosity of the female, and the defendant merely affords
her the needed opportunity for the commission of the act. It has been
emphasized that to allow a recovery in all such cases would tend to the
demoralization of the female sex, and would be a reward for unchastity by;
which a class of adventuresses would be swift to profit.' (47 Am. Jur. 662).
xxx xxx xxx
Over and above the partisan allegations, the facts stand out that for one whole
year, from 1958 to 1959, the plaintiff-appellee, a woman of adult age, maintained
intimate sexual relations with appellant, with repeated acts of intercourse. Such
conduct is incompatible with the idea of seduction. Plainly there is here
voluntariness and mutual passion; for had the appellant been deceived, had she
surrendered exclusively because of the deceit, artful persuasions and wiles of the
defendant, she would not have again yielded to his embraces, much less for one
year, without exacting early fulfillment of the alleged promises of marriage, and
would have cut short all sexual relations upon finding that defendant did not
intend to fulfill his promise. Hence, we conclude that no case is made under
Article 21 of the Civil Code, and no other cause of action being alleged, no error
was committed by the Court of First Instance in dismissing the complaint." 2 7
In his annotations on the Civil Code, 2 8 Associate Justice Edgardo L. Paras, who recently
retired from this Court, opined that in a breach of promise to marry where there had been
carnal knowledge, moral damages may be recovered:
" . . . if there be criminal or moral seduction, but not if the intercourse was due to
mutual lust. (Hermosisima vs. Court of Appeals, L-14628, Sept. 30, 1960; Estopa
vs. Piansay, Jr., L-14733, Sept. 30, 1960; Batarra vs. Marcos, 7 Phil. 56 (sic);
Beatriz Galang vs. Court of Appeals, et al., L-17248, Jan. 29, 1962). (In other
words, if the CAUSE be the promise to marry, and the EFFECT be the carnal
knowledge, there is a chance that there was criminal or moral seduction, hence
recovery of moral damages will prosper. If it be the other way around, there can be
no recovery of moral damages, because here mutual lust has intervened). . . . ."
together with "ACTUAL damages, should there be any, such as the expenses for the
wedding preparations (See Domalagon v. Bolifer, 33 Phil. 471)." LLpr
Senator Arturo M. Tolentino 2 9 is also of the same persuasion:

"It is submitted that the rule in Batarra vs. Marcos 3 0 still subsists,
notwithstanding the incorporation of the present article 3 1 in the Code. The
example given by the Code Commission is correct, if there was seduction, not
necessarily in the legal sense, but in the vulgar sense of deception. But when the
sexual act is accomplished without any deceit or qualifying circumstance of
abuse of authority or influence, but the woman, already of age, has knowingly
given herself to a man, it cannot be said that there is an injury which can be the
basis for indemnity.
But so long as there is fraud, which is characterized by wilfullness (sic), the action
lies. The court, however, must weigh the degree of fraud, if it is sufficient to
deceive the woman under the circumstances, because an act which would
deceive a girl sixteen years of age may not constitute deceit as to an experienced
woman thirty years of age. But so long as there is a wrongful act and a resulting
injury, there should be civil liability, even if the act is not punishable under the
criminal law and there should have been an acquittal or dismissal of the criminal
case for that reason."
We are unable to agree with the petitioner's alternative proposition to the effect that
granting, for argument's sake, that he did promise to marry the private respondent, the
latter is nevertheless also at fault. According to him, both parties are in pari delicto; hence,
pursuant to Article 1412(1) of the Civil Code and the doctrine laid down in Batarra vs.
Marcos, 3 2 the private respondent cannot recover damages from the petitioner. The latter
even goes as far as stating that if the private respondent had "sustained any injury or
damage in their relationship, it is primarily because of her own doing," 3 3 for:
" . . . She is also interested in the petitioner as the latter will become a doctor
sooner or later. Take notice that she is a plain high school graduate and a mere
employee . . (Annex C ) or a waitress (TSN, p. 51, January 25, 1988) in a
luncheonette and without doubt, is in need of a man who can give her economic
security. Her family is in dire need of financial assistance (TSN, pp. 51-53, May
18, 1988). And this predicament prompted her to accept a proposition that may
have been offered by the petitioner." 3 4
These statements reveal the true character and motive of the petitioner. It is clear that he
harbors a condescending, if not sarcastic, regard for the private respondent on account of
the latter's ignoble birth, inferior educational background, poverty and, as perceived by him,
dishonorable employment. Obviously then, from the very beginning, he was not at all
moved by good faith and an honest motive. Marrying with a woman so circumstanced
could not have even remotely occurred to him. Thus, his profession of love and promise to
marry were empty words directly intended to fool, dupe, entice, beguile and deceive the
poor woman into believing that indeed, he loved her and would want her to be his life
partner. His was nothing but pure lust which he wanted satisfied by a Filipina who honestly
believed that by accepting his proffer of love and proposal of marriage, she would be able
to enjoy a life of ease and security. Petitioner clearly violated the Filipino's concept of
morality and so brazenly defied the traditional respect Filipinos have for their women. It
can even be said that the petitioner committed such deplorable acts in blatant disregard
of Article 19 of the Civil Code which directs every person to act with justice, give everyone
his due and observe honesty and good faith in the exercise of his rights and in the
performance of his obligations.
No foreigner must be allowed to make a mockery of our laws, customs and traditions.
The pari delicto rule does not apply in this case for while indeed, the private respondent
may not have been impelled by the purest of intentions, she eventually submitted to the
petitioner in sexual congress not out of lust, but because of moral seduction. In fact, it is
apparent that she had qualms of conscience about the entire episode for as soon as she
found out that the petitioner was not going to marry her after all, she left him. She is not,
therefore, in pari delicto with the petitioner. Pari delicto means "in equal fault; in a similar
offense or crime; equal in guilt or in legal fault." 3 5 At most, it could be conceded that she is
merely in delicto. cdphil
"Equity often interferes for the relief of the less guilty of the parties, where his
transgression has been brought about by the imposition or undue influence of the
party on whom the burden of the original wrong principally rests, or where his
consent to the transaction was itself procured by fraud." 3 6
In Mangayao vs. Lasud, 3 7 We declared:

"Appellants likewise stress that both parties being at fault, there should be no
action by one against the other (Art. 1412, New Civil Code). This rule, however,
has been interpreted as applicable only where the fault on both sides is, more or
less, equivalent. It does not apply where one party is literate or intelligent and the
other one is not (c.f. Bough vs. Cantiveros, 40 Phil. 209)."
We should stress, however, that while We find for the private respondent, let it not be said
that this Court condones the deplorable behavior of her parents in letting her and the
petitioner stay together in the same room in their house after giving approval to their
marriage. It is the solemn duty of parents to protect the honor of their daughters and
infuse upon them the higher values of morality and dignity.
WHEREFORE, finding no reversible error in the challenged decision, the instant petition is
hereby DENIED, with costs against the petitioner. cdll
SO ORDERED.
Feliciano, J ., Bidin, Romero and Melo, JJ ., concur.
Gutierrez, Jr., J ., is on terminal leave.
Footnotes
1. Annex "G" of Petition; Rollo, 53-62. Per Associate Justice Alicia V. Sempio-Diy, concurred
in by Associate Justices Jose C. Campos, Jr. and Jaime M. Lantin.
2. Annex "A" of Petition; Rollo, 20-22.
3. Annex "B" of Petition; Rollo, 23-24.

4. Annex "C", Id.; Id., 25.
5. Annex "D" of Petition; Rollo, 26-33. Per Judge Antonio M. Belen.

6. Id., 33.
7. Rollo, 31-33.
8. Rollo, 54-55.
9. Exhibit "E" of Petition; Rollo, 34-50.
10. Annex "G", Id.; Id., 53-62.

11. Rollo, 58-59.
12. Rollo, 61.
13. Id., 11.

14. In support thereof, he cites Despi vs. Aliososo, [CA] 64 O.G.; Wassmer vs. Velez, 12
SCRA 648 [1964]; Hermosisima vs. Court of Appeals, 109 Phil. 629 [1960]; and Estopa
vs. Piansay, 109 Phil. 640 [1960].
15. People vs. Garcia, 89 SCRA 440 [1979]; People vs. Bautista, 92 SCRA 465 [1979]; People
vs. Abejuela, 92 SCRA 503 [1979]; People vs. Arciaga, 98 SCRA 1 [1980]; People vs.
Marzan, 128 SCRA 203 [1984]; People vs. Alcid, 135 SCRA 280 [1985]; People vs.
Sanchez, 199 SCRA 414 [1991]; and People vs. Atilano, 204 SCRA 278 [1991].
16. 191 SCRA 218 [1990], footnote omitted; see also, Remalante vs. Tibe, 158 SCRA 138
[1988].
17. Hermosisima vs. Court of Appeals, 109 Phil. 629 [1960]; Estopa vs. Piansay, 109 Phil.
640 [1960].
18. 58 Phil. 866 [1933].
19. Congressional Record, vol. IV, No. 79, Thursday, 14 May 1949, 2352.
20. Philippine National Bank vs. Court of Appeals, 83 SCRA 237 [1978].
21. Report of the Code Commission, 39-40. This passage is quoted, except for the last
paragraph, in Tanjanco vs. Court of Appeals, 18 SCRA 994, 996-997 [1966]; the Article 23
referred to is now Article 21.
22. Report of the Code Commission, 161-162.

23. TOLENTINO, A.M., Commentaries and Jurisprudence on the Civil Code of the
Philippines, vol. 1, 1985 ed., 72.
24. Rollo, 61.
25. Supra.
26. Supra.
27. At pages 997-999.
28. Civil Code of the Philippines Annotated, vol. I, Eleventh ed., (1984), 91-92.
29. Commentaries and Jurisprudence on the Civil Code of the Philippines, vol. 1, 1985 ed.,
76-77, omitting footnotes.
30. 7 Phil. 156 [1906].
31. Article 21.

32. Supra.
33. Rollo, 16.
34. Id., 16-17.

35. Black's Law Dictionary, Fifth ed., 1004.
36. 37 Am Jur 2d, 401, omitting citations.

37. 11 SCRA 158 [1964]; see also, Liguez vs. Court of Appeals, 102 Phil. 577 [1957].

FIRST DIVISION
[G.R. No. L-29041. March 24, 1981.]
BACOLOD-MURCIA MILLING CO., INC. , plaintiff-appellant, vs. FIRST

FARMERS MILLING CO., INC., etc.; RAMON NOLAN, in his capacity
as Administrator of the Sugar Quota Administration, ET AL. ,
defendants, PHILIPPINE NATIONAL BANK and NATIONAL
INVESTMENT AND DEVELOPMENT CORPORATION , defendants-
appellees.
Ramon A. Gonzales and Associate for plaintiff-appellant.

Conrado E. Medina for defendants-appellees.
SYNOPSIS
Plaintiff Bacolod-Murcia Milling Co. Inc. filed an action for Injunction and prohibition with
Damages against defendants First Farmers Milling Co. and the adhering planters for the
alleged illegal transfer of the sugar quota of the latter from plaintiff to defendant sugar mill
and against the Sugar Quota Administrator for having approved said transfer. After the
defendants had filed their respective answers, plaintiff filed a Motion to Admit Amended
and Supplemental Complaint including PNB and NIDC as necessary parties, for having
allegedly assisted in the illegal creation and operation of defendant sugar mill. PNB and
NIDC, alleging that they have no participation whatsoever in the alleged illegal transfer,
filed a Motion to Set for Preliminary Hearing their special and affirmative defenses which
were also grounds for dismissal. After a preliminary hearing, the Court of First Instance of
Rizal issued an Order dismissing the Amended and Supplemental Complaint against PNB
and NIDC for lack of cause of action and another Order denying the motion for
reconsideration of said Order.
On appeal by certiorari, the Supreme Court sustained the dismissal of the Amended and
Supplemental Complaint as its sufficiency was not supported by well-pleaded averments
of facts, which defect cannot be cured by the introduction of sufficient evidence against
the objection of defendants- appellees.
Orders appealed from, affirmed.
SYLLABUS
1. REMEDIAL LAW; PLEADING AND PRACTICE; COMPLAINT; MUST CONTAIN

CONCISE STATEMENT OF FACTS CONSTITUTING PLAINTIFF'S CAUSE OF ACTION. — It is
basic that the complaint must contain a concise statement of the ultimate facts
constituting the plaintiff's cause of action.
2. ID.; ID.; ID.; ID.; "ULTIMATE FACTS" DEFINED. — "Ultimate facts" are the important
and substantial facts which either directly form the basis of the plaintiff's primary right and
duty, or directly make up the wrongful acts or omissions by the defendant.
3. ID.; ID.; ID.; GROUNDS FOR DISMISSAL; LACK OF CAUSE OF ACTION; DEFINED. —
When the ground for dismissal is that the complaint states no cause of action, the rule is
that its sufficiency can only be determined by considering the facts alleged in the
complaint and no other. Defenses averred by the defendant are not to be taken into
consideration in ruling on the motion. The allegations in the complaint must be accepted
as true and it is not permissible to go beyond and outside of them for date or facts. And
the test of sufficiency of the facts alleged is whether or not the court could render a valid
judgment as prayed for, accepting as true the exclusive facts set forth in the complaint.
4. ID.; ID.; ID.; ID.; ID.; ID.; FAILURE TO MEET THE TEST; A CASE OF; COMPLAINT NOT
SUPPORTED BY WELL PLEADED AVERMENTS OF FACTS; CASE AT BAR. — The Amended
and Supplemental Complaint charging PNB and NIDC with having assisted in the illegal
creation and operation of defendant sugar mill failed to meet the test of sufficiency where
granting, for the sake of argument, that indeed assistance in the "illegal" act was rendered,
the same, however, is not supported by well-pleaded averments of facts. Nowhere is it
alleged that defendants-appellees had notice, information or knowledge of any flaw, much
less any illegality, in their co-defendant's actuations, assuming that there was such a flaw
or illegality. This absence is fatal and buoys up instead the PNB — NIDC's position of lack
of cause of action.
5. ID.; ID.; ID.; ID.; ID.; BAD FAITH MUST BE ALLEGED AND PROVEN; CASE AT BAR. —
Bad faith is never presumed (Civil Code, Art. 527), and it has been held that "to support a
judgment for damages, facts which justify the inference of a lack or absence of good faith
must be alleged and proven" (Alzua and Arnalot vs. Johnson, 21 Phil. 380). In the case at
bar although it is averred that the defendant's acts were done in bad faith, the complaint
does not contain any averment of facts showing that the acts were done in the manner
alleged. Such a bare statement neither establishes any right or cause of action on the part
of the plaintiff-appellant. It is a mere conclusion of law not sustained by declarations of
facts, much less admitted by defendants-appellees. It does not, therefore, aid in any wise
the complaint in setting forth a cause of action. Defendants-appellees are not fairly
apprised of the act or acts complained of.
6. ID.; ID.; ID.; ID.; ID.; DEFECTIVE COMPLAINT, MAY BE CURED BY INTRODUCTION OF
EVIDENCE IF NOT OBJECTED TO BY ADVERSE PARTY. — While it is a settled rule that a
defective complaint may be cured by the introduction of sufficient evidence so as to
constitute the cause of action which the plaintiff intended to set forth in the complaint the
same merits the Court's blessing only and unless there is no objection or opposition from
the side of the defendant.
7. CIVIL LAW; TORTS AND DAMAGES; LIABILITY DOES NOT ARISE FROM A LAWFUL
ACT. — The doing of an act which is in itself perfectly lawful will not render one liable as for
a tort, simply because the unintended effect of such act is to enable or assist another
person to do or accomplish a wrong, (Konecny vs. Hohenschuh, 173 N.W. 901, 188 Iowa
1075; Noll v. Marian, 32 A. 2d 18, 347 Pa. 213 cited in Vol. I, Colley on Torts, p. 5; 86 CJS
933.) assuming, of course, that there was such a wrong.
DECISION
MELENCIO-HERRERA , J : p
This is an appeal taken by Bacolod-Murcia Milling Co., Inc. from the Order dated November
28, 1967 issued by the Court of First Instance of Rizal, Branch VI (Pasig), in Civil Case No.
9185, as well as the Order dated March 5, 1968 denying the Motion for its reconsideration.
The Order had dismissed, after a preliminary hearing, on the ground of lack of cause of
action, the Amended and Supplemental Complaint against the defendants Philippine
National Bank (PNB) and National Investment and Development Corporation (NIDC).
Plaintiff-appellant had commenced, on March 18, 1966, an action for Injunction and
Prohibition with Damages against defendants First Farmers Milling Co., Inc. (FFMC),
various named planters including those similarly situated, and Ramon Nolan in his capacity
as Administrator of the Sugar Quota Administration. It was alleged,
"9. That in the year 1964 the defendant First Farmers Milling Co., Inc.,
established and operated a sugar central known as the First Farmers Sugar
Central and for the crop years 1964-65 and 1965-66, the defendants transferred
their quota `A' allotments to their co-defendant First Farmers Milling Co., Inc., and
are actually milling their sugar with the said First Farmers Milling Co., Inc., which
illegal transfer has been made over the vigorous protest and objections of the
plaintiff, but with the unwarranted, unjustified and likewise illegal approval of
their co-defendant the Sugar Quota Administration;" 1
After the defendants FFMC, the adhering planters, and the Sugar Quota Administrator had
filed their respective Answers, plaintiff-appellant filed, on May 2, 1967, a Motion to admit
Amended and Supplemental Complaint. As amended, PNB and NIDC were included as new
defendants in view of the FFMC allegation in its Answer that the non-inclusion of PNB and
NIDC as party defendants, "who became creditors of defendant FFMC central prior to the
institution of the instant case, and who therefore are necessary parties, is fatal to the
complaint." It was alleged this time, LexLib
"20. That defendants NIDC and PNB have extended loans to defendant sugar
mill in the amount of P12,210,000.00 on June 18, 1965, and P4,000,000.00 on
Dec. 14, 1966, respectively, to assist in the illegal creation and operation of said
mill, hence, a joint tortfeasor in the trespass of plaintiff's rights, aggravated by the
fact that defendant mill has only a paid up capital stock of P500,000.00, hence,
said loans are far beyond the limits fixed by law;" 2
It was then prayed that defendants be ordered.

". . . jointly and severally to pay plaintiff actual and exemplary damages of not
less than P1 million pesos and attorney's fees in the amount of 10% of said
damages, plus legal interest from the filing of the original complaint, plus costs."
The defendants, except the Sugar Quota Administrator, filed their respective Answers to
the Amended and Supplemental Complaint. For their part, PNB and NIDC followed this with
a Motion to Set for Preliminary Hearing their special and affirmative defenses, which were
also grounds for dismissal. Opposition, reply memoranda, rejoinder, and supplementary
reply memoranda on the Motion were submitted by the contending parties.
In their Answer, the PNB and NIDC had contended:
"xxx xxx xxx
"5. That both the defendants PNB and NIDC have no participation whatsoever
either directly or indirectly on the alleged illegal (transaction) transfer of the
defendant planters from the plaintiff to the defendant mill, and therefore, the
defendants PNB and NIDC could not be held liable for any damage that the
plaintiffs alleged to have suffered from the said particular act complained of;
"6. That the granting of loans by the defendants PNB and NIDC in favor of the
defendant mill to finance the construction of a sugar central did not violate any
rights of the plaintiff in view of the fact that the said loans were extended in the
ordinary and usual course of business, as specifically authorized under the
respective Charter of the defendants PNB and NIDC, hence, the latter defendants
did not commit any tortious action against the plaintiffs and, consequently, the
plaintiffs have no cause of action against the defendants PNB and NIDC." 3
As stated at the outset, the trial Court dismissed the Amended and Supplemental
Complaint against the PNB and the NIDC after a preliminary hearing on the ground of lack
of cause of action. LexLib
The only issue then is whether or not the allegations of the Amended and Supplemental
Complaint constituted a sufficient cause of action against the PNB and NIDC.
A negative finding is called for.
It is basic that the Complaint must contain a concise statement of the ultimate facts
constituting the plaintiff's cause of action. "Ultimate facts" are the important and
substantial facts which either directly form the basis of the plaintiff's primary right and
duty, or directly make up the wrongful acts or omissions by the defendant. 4
When the ground for dismissal is that the Complaint states no cause of action, the rule is
that its sufficiency can only be determined by considering the facts alleged in the
Complaint and no other. 5 The Court may not consider other matters outside of the
Complaint. 6 Defenses averred by the defendant are not to be taken into consideration in
ruling on the motion. 7 The allegations in the Complaint must be accepted as true and it is
not permissible to go beyond and outside of them for date or facts. 8 And the test of
sufficiency of the facts alleged is whether or not the Court could render a valid judgment
as prayed for, accepting as true the exclusive facts set forth in the Complaint. 9
The subject Amended and Supplemental Complaint fails to meet the test. It should be
noted that it charges PNB and NIDC with having assisted in the illegal creation and
operation of defendant sugar mill. Granting, for the sake of argument, that, indeed,
assistance in the "illegal" act was rendered, the same, however, is not supported by well-
pleaded averments of facts. Nowhere is it alleged that defendants-appellees had notice,
information or knowledge of any flaw, much less any illegality, in their co-defendants'
actuations, assuming that there was such a flaw or illegality. This absence is fatal and
buoys up instead the PNB-NIDC's position of lack of cause of action. cdrep
Although it is averred that the defendants' acts were done in bad faith, 1 0 the Complaint
does not contain any averment of facts showing that the acts were done in the manner
alleged. Such a bare statement neither establishes any right or cause of action on the part
of the plaintiff-appellant. It is a mere conclusion of law not sustained by declarations of
facts, much less admitted by defendants-appellees. It does not, therefore, aid in any wise
the complaint in setting forth a cause of action. 1 1 Defendants-appellees are not fairly
apprised of the act or acts complained of.
Besides, bad faith is never presumed (Civil Code, Art. 527). And, it has been held that "to
support a judgment for damages, facts which justify the inference of a lack or absence of
good faith must be alleged and proven". 1 2
While it is a settled rule that a defective complaint may be cured by the introduction of
sufficient evidence so as to constitute the cause of action which the plaintiff intended to
set forth in the complaint, the same merits the Court's blessings only and unless there is
no objection or opposition from the side of the defendant. It is obvious that the
defendants-appellees, in the case at bar, were vigilant of their right and were on their guard
from the very initiation of the complaint against them.
Plaintiff-appellant's allegation "that defendants NIDC and PNB have extended loans to
defendant sugar mill . . ., to assist in the illegal creation and operation of said mill, hence, a
joint tortfeasor in the trespass of plaintiff's rights. . . ." is, therefore, a mere conclusion not
warranted by sufficient facts. What appears from the record is that PNB and NIDC came
into the picture in the ordinary and usual course of its business after the borrowing entity
had established itself as capable of being treated as a new milling district (FFMC is
officially designated as Mill District No. 49) because it could already operate and had its
array of adhering planters. "The doing of an act which is in itself perfectly lawful will not
render one liable as for a tort, simply because the unintended effect of such act is to
enable or assist another person to do or accomplish a wrong", 1 3 assuming, of course, that
there was such a wrong.
WHEREFORE, without resolving the issue in the main case regarding the alleged illegal
creation and operation of First Farmers Milling Co., Inc., there having been no presentation
of evidence as yet in the lower Court, the challenged Order dismissing the Amended and
Supplemental Complaint against defendants-appellees as well as the Order denying
reconsideration thereof, is hereby affirmed, and the appeal dismissed.
Costs against plaintiff-appellant.
SO ORDERED.
Teehankee (Chairman), Makasiar, Fernandez and Guerrero, JJ., concur.
Footnotes
1. Record on Appeal, Complaint, p. 8.

2. Supplement to Record on Appeal, Amended and Supplemental Complaint, pp. 12-13.
3. Record on Appeal, Answer, pp. 46-47.
4. Alzua and Arnalot vs. Johnson, 21 Phil. 308 (1912); Remitere, et al. vs. Vda. de Yulo. et
al., 16 SCRA 251 (1966).
5. Acuña vs. Batac Producers Cooperative, 20 SCRA 526 (1967); Mindanao Realty Corp. vs.
Kintanar, et al. 6 SCRA 814 (1962).
6. Reinares vs. Arrastria, 5 SCRA 748 (1962).

7. De Jesus vs. Belarmino, 95 Phil. 365 (1954).
8. see Ventura vs. Bernabe, 38 SCRA 587 (1971).
9. La Suerte Cigar and Cigarette Factory vs. Central Azucarera del Danao, 23 SCRA 686
(1968).
10. Supplement to Record on Appeal, Amended and Supplemental Complaint, p. 15.

11. Alzua and Arnalot vs. Johnson, supra, p. 383.
12. Ibid., p. 380.
13. Konecny vs. Hohenschuh, 173 N.W. 901, 188 Iowa 1075; Noll v. Marian, 32 A. 2d 18,
347 Pa. 213 cited in Vol. 1, Cooley on Torts, p. 5; 86 CJS 933.

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TORTS

(Torts and Damages)

[G.R. No. 116123. March 13, 1997.]

SERGIO F. NAGUIAT, doing business under the name and style

Villanueva, De Leon, Hipolito & Associates Law Offices for petitioners.

and thus, simply awarded an amount for "humanitarian consideration."

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xxx xxx xxx

He is the vice president." 28

4.When a director, trustee or of cer is made. by speci c provision of law,

(2)Petitioner Sergio F. Naguiat Enterprises, Incorporated, and Antolin T. Naguiat

2.Rollo, pp. 69-73.

5.Ibid., pp. 14-18.

8.Rollo, pp. 72-73.

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16.Petition for Certiorari, p. 2; Rollo, p. 3.

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22.Villuga vs. NLRC, 225 SCRA 537, August 23, 1993.

24.Ibid., pp. 142-205.

28.TSN, May 18, 1992, pp. 3-6.

29.Ibid., pp. 9-10.

31.Records, pp. 235-246.

34.Motion for Reconsideration, p. 4; Records, p. 436.

36.Ibid.; Bouvier's Law Dictionary, Third Revision, v. 2.

37.244 SCRA 797, 802-803, June 2, 1995.

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[G.R. No. 97336. February 19, 1993.]

GASHEM SHOOKAT BAKSH , petitioner, vs. HON. COURT OF APPEALS

Public Attorney's Office for petitioner.

1. REMEDIAL LAW; EVIDENCE; CREDIBILITY OF WITNESSES; FINDINGS OF THE TRIAL

The antecedents of this case are not complicated:

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On 18 February 1991, respondent Court promulgated the challenged decision 1 0 affirming

"(1) When the conclusion is a finding grounded entirely on speculation,

'ARTICLE 23. Any person who wilfully causes loss or injury to

Article 2176, of the Civil Code, which defines a quasi-delict thus:

is limited to negligent acts or omissions and excludes the notion of willfulness or

'On the other hand, in an action by the woman, the enticement,

Senator Arturo M. Tolentino 2 9 is also of the same persuasion:

In Mangayao vs. Lasud, 3 7 We declared:

2. Annex "A" of Petition; Rollo, 20-22.

3. Annex "B" of Petition; Rollo, 23-24.

5. Annex "D" of Petition; Rollo, 26-33. Per Judge Antonio M. Belen.

10. Annex "G", Id.; Id., 53-62.

12. Rollo, 61.

13. Id., 11.

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22. Report of the Code Commission, 161-162.

31. Article 21.

34. Id., 16-17.

36. 37 Am Jur 2d, 401, omitting citations.

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[G.R. No. L-29041. March 24, 1981.]

BACOLOD-MURCIA MILLING CO., INC. , plaintiff-appellant, vs. FIRST

Ramon A. Gonzales and Associate for plaintiff-appellant.

1. REMEDIAL LAW; PLEADING AND PRACTICE; COMPLAINT; MUST CONTAIN

It was then prayed that defendants be ordered.

1. Record on Appeal, Complaint, p. 8.

6. Reinares vs. Arrastria, 5 SCRA 748 (1962).

10. Supplement to Record on Appeal, Amended and Supplemental Complaint, p. 15.

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