G.R. No.

140420 February 15, 2001

SERGIO AMONOY, petitioner,

vs.
Spouses JOSE GUTIERREZ and ANGELA FORNIDA, respondents.

PANGANIBAN, J.:

Damnum absque injuria. Under this principle, the legitimate exercise of a person's rights, even if
it causes loss to another, does not automatically result in an actionable injury. The law does not
prescribe a remedy for the loss. This principle does not, however, apply when there is an abuse
of a person's right, or when the exercise of this right is suspended or extinguished pursuant to a
court order. Indeed, in the availment of one's rights, one must act with justice, give their due, and
observe honesty and good faith

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the April 21,
1999 Decision1 of the Court of Appeals (CA) in CA-GR CV No. 41451, which set aside the
judgment2 of the Regional Trial Court (RTC) of Tanay, Rizal. The RTC had earlier dismissed the
Complaint for damages filed by herein respondents against petitioner. The dispositive portion of
the challenged CA Decision reads as follows:

"WHEREFORE, the appealed Decision is SET ASIDE, and in its stead judgment is
rendered ordering the defendant-appellee Sergio Amonoy to pay the plaintiffs-appellants
bruno and Bernadina Gutierrez as actual damages the sum of [t]wo [h]undred [f]ifty
[t]housand [p]esos (P250,000.00)."3

Likewise assailed is the October 19, 1999 CA Resolution,4 which denied the Motion for
Reconsideration.

The Facts

The appellate court narrated the factual antecedents of this case as follows:

"This case had its roots in Special Proceedings No. 3103 of Branch I of the CFI of Pasig,
Rizal, for the settlement of the estate of the deceased Julio Cantolos, involving six(6)
parcels of land situated in Tanay Rizal. Amonoy was the counsel of therein Francisca
Catolos, Agnes Catolos, Asuncion Pasamba and Alfonso Formida. On 12 January 1965,
the Project of Partition submitted was approved and xxx two (2) of the said lots were
adjudicated to Asuncion Pasamba and Alfonso Formilda. The Attorney's fees charged by
Amonoy was P27,600.00 and on 20 January 1965 Asuncion Pasamba and Alfonso
Formida executed a deed of real estate mortgage on the said two (2) lots adjudicated to
them, in favor of Amonoy to secure the payment of his attorney's fees. But it was only on
6 August 1969 after the taxes had been paid, the claims settled and the properties
adjudicated, that the estate was declared closed and terminated.
"Asuncion Pasamba died on 24 February 1969 while Alfonso Fornilda passsed away on 2
July 1969. Among the heirs of the latter was his daughter, plaintiff-appellant Angela
Gutierrez.

"Because his Attorney's fess thus secured by the two lots were not paid, on 21 January
1970 Amonoy filed for their foreclosure in Civil Code4 No. 12726 entitled Sergio
Amonoy vs. Heirs of Asuncion Pasamba and Heirs of Alfonso Fornilda before the CFI of
Pasig, Rizal, and this was assigned to Branch VIII. The heirs opposed, contending that
the attorney's fees charged [were] unconscionable and that the attorney's fees charged
[were] unconscionable and that the agreed sum was only P11,695.92. But on 28
September 1972 judgment was rendered in favor of Amonoy requiring the heirs to pay
within 90 days the P27,600.00 secured by the mortgage, P11,880.00 as value of the
harvests, and P9,645.00 as another round of attorney's fees. Failing in that, the two (2)
lots would be sold at public auction.

"They failed to pay. On 6 February 1973, the said lots were foreclosed and on 23 March
1973 the auction sale was held where Amonoy was the highest bidder at P23,760.00. On
2 May 1973 his bid was judicially confirmed. A deficiency was claimed and to satisfy it
another execution sale was conducted, and again the highest bidder was Amonoy at
P12,137.50.

"Included in those sold was the lot on which the Gutierrez spouses had their house.

"More than a year after the Decision in Civil Code No. 12726 was rendered, the said
decedent's heirs filed on 19 December 1973 before the CFI of Pasig, Rixal[,] Civil case
No. 18731 entitled Maria Penano, et al vs. Sergio Amonoy, et al, a suit for the annulment
thereof. The case was dismissed by the CFI on 7 November 1977, and this was affirmed
by the Court of Appeals on 22 July 1981.

"Thereafter, the CFI on 25 July 1985 issued a Writ of Possession and pursuant to which a
notice to vacate was made on 26 August 1985. On Amonoy's motion of 24 April 1986,
the Orders of 25 April 1986 and 6 May 1986 were issued for the demolition of structures
in the said lots, including the house of the Gutierrez spouses.

"On 27 September 1985 the petition entitled David Fornilda, et al vs Branch 164 RTC
Ivth Pasig, Deputy Sheriff Joaquin Antonil and Atty. Sergio Amonoy, G.R. No. L-72306,
was filed before the Supreme Court. Among the petitioners was the plaintiff-appellant
Angela Gutierrez. On a twin musiyun (Mahigpit na Musiyon Para Papanagutin Kaugnay
ng Paglalapastangan) with full titles as fanciful and elongated as their Petisyung
(Petisyung Makapagsuri Taglay and Pagpigil ng Utos), a temporary restraining order was
granted on 2 June 1986 enjoining the demolition of the petitioners' houses.

"Then on 5 October 1988 a Decision was rendered in the said G.R. No. L-72306
disposing that:
 "WHEREFORE, Certiorari is granted; the Order of respondent Trial Court, dated
25 July 1985, granting a Writ of Possession, as well as its Orderd, dated 25 April
1986 and 16 May 1986, directing and authorizing respondent Sheriff to demolish
the houses of petitioners Angela and Leocadia Fornilda are hereby ordered
returned to petitioners unless some of them have been conveyed to innocent third
persons."5

But by the time the Supreme Court promulgated the abovementioned Decision, respondents'
house had already been destroyed, supposedly in accordance with a Writ of Demolition ordered
by the lower court.

Thus, a Complaint for damages in connection with the destruction of their house was filed by
respondents against petitioner before the RTC on December 15, 1989.

In its January 27, 1993 Decision, the RTC dismissed respondents' suit. On appeal, the CA set
aside the lower court's ruling and ordered petitioner to pay respondents P250,000 as actual
damages. Petitioner then filed a Motion for Reconsideration, which was also denied.

The Issue

In his Memorandum,7 petitioner submits this lone issue for our consideration:

"Whether or not the Court of Appeals was correct was correct in deciding that the petition
[was] liable to the respondents for damages."8

The Court's Ruling

The Petition has no merit.

Main Issue:

Petitioner's Liability

Well-settled is the maxim that damage resulting from the legitimate exercise of a person's rights
is a loss without injury- damnum absque injuria - for which the law gives no remedy.9 In other
words, one who merely exercises one's rights does no actionable injury and cannot be held liable
for damages.

Petitioner invokes this legal precept in arguing that he is not liable for the demolition of
respondents' house. He maintains that he was merely acting in accordance with the Writ of
Demolition ordered by the RTC.

We reject this submission. Damnum absque injuria finds no application to this case.

True, petitioner commenced the demolition of respondents' house on May 30, 1986 under the
authority of a Writ of Demolition issued by the RTC. But the records show that a Temporary
Restraining Order (TRO), enjoining the demolition of respondents' house, was issued by the
Supreme Court on June 2, 1986. The CA also found, based on the Certificate of Service of the
Supreme Court process server, that a copy of the TRO was served on petitioner himself on June
4, 1986.

Petitioner, howeverm, did not heed the TRO of this Court. We agree with the CA that he
unlawfully pursued the demolition of respondents' house well until the middle of 1987. This is
clear from Respondent Angela Gutierrez's testimony. The appellate court quoted the following
pertinent portion thereof:10

"Q. On May 30, 1986, were they able to destroy your house?

"A. Not all, a certain portion only

xxx xxx xxx

"Q. Was your house completely demolished?

"A. No, sir.

xxx xxx xxx

"Q. Until when[,] Mrs. Witness?

"A. Until 1987.

"Q. About what month of 1987?

"A. Middle of the year.

"Q. Can you tell the Honorable Court who completed the demolition?

A. The men of Fiscal Amonoy."11

The foregoing disproves the claim of petitioner that the demolition, which allegedly commenced
only on May 30, 1986, was completed the following day. It likewise belies his allegation that the
demolitions had already ceased when he received notice of the TRO.

Although the acts of petitioner may have been legally justified at the outsset, their continuation
after the issuance of the TRO amounted to an insidious abuse of his right. Indubitably, his
actions were tainted with bad faith. Had he not insisted on completing the demolition,
respondents would not have suffered the loss that engendered the suit before the RTC. Verily, his
acts constituted not only an abuse of a right, but an invalid exercise of a right that had been
suspended when he received thae TRO from this Court on June 4, 1986. By then he was no
longer entitled to proceed with the demolition.
A commentator on this topic explains:

"The exercise of a right ends when the right disappears, and it disappears when it is
abused, especially to the prejudice of others. The mask of a right without the spirit of
justcie which gives it life, is repugnant to the modern concept of social law. It cannot be
said that a person exercises a right when he unnecessarily prejudices another xxx. Over
and above the specific precepts of postive law are the supreme norms of justice xxx; and
he who violates them violates the law. For this reason it is not permissible to abuse our
rights to prejudice others."12

Likewise, in Albenson Enterprises Corp. v. CA,13 the Court discussed the concept of abuse of
rights as follows:

"Artilce 19, known to contain what is commonly referred to as the principle of abuse of
rights, sets certain standards which may be observed not only in the exercise of one's
rights but also in the performance of one's duties.These standards are the following: to act
with justice; to give everyone his due; recognizes the primordial limitation on all rights:
that in their exercise, the norms of human conduct set forth in Article 19 and results in
damage to another, a legal wrong is thereby committed for which the wrongdoer must be
held responsible xxx."

Clearly then, the demolition of respondents' house by petitioner, despite his receipt of the TRO,
was not only an abuse but also an unlawful exercise of such right. In insisting on his alleged
right, he wantonly violated this Court's Order and wittingly caused the destruction of
respondents; house.1âwphi1.nêt

Obviously, petitioner cannot invoke damnum absque injuria, a principle premised on the valid
exercise of a right.14 Anything less or beyond such exercise will not give rise to the legal
protection that the principle accords. And when damage or prejudice to another is occasioned
thereby, liability cannot be obscured, much less abated.

In the ultimate analysis, petitioner's liability is premised on the obligation to repair or to make
whole the damage caused to another by reason of one's act or omission, whether done
intentionally or negligently and whether or not punishable by law.15

WHEREFORE, the Petition is DENIED and the appealed Decision AFFIRMED. Costs against
petitioner.

SO ORDERED.

Melo, Vitug, Gonzaga-Reyes, Sandoval-Gutierrez, JJ: concur.

G.R. No. 88694 January 11, 1993

ALBENSON ENTERPRISES CORP., JESSE YAP, AND BENJAMIN MENDIONA, petitioners,

vs.
THE COURT OF APPEALS AND EUGENIO S. BALTAO, respondents.

Puruganan, Chato, Chato & Tan for petitioners.

Lino M. Patajo, Francisco Ma. Chanco, Ananiano Desierto and Segundo Mangohig for private
respondent.

BIDIN, J.:

This petition assails the decision of respondent Court of Appeals in

CA-GR CV No. 14948 entitled "Eugenio S. Baltao, plaintiff-appellee vs. Albenson Enterprises
Corporation, et al, defendants-appellants", which modified the judgment of the Regional Trial Court of
Quezon City, Branch XCVIII in Civil Case No. Q-40920 and ordered petitioner to pay private respondent,
among others, the sum of P500,000.00 as moral damages and attorney's fees in the amount of P50,000.00.

The facts are not disputed.

In September, October, and November 1980, petitioner Albenson Enterprises Corporation (Albenson for
short) delivered to Guaranteed Industries, Inc. (Guaranteed for short) located at 3267 V. Mapa Street, Sta.
Mesa, Manila, the mild steel plates which the latter ordered. As part payment thereof, Albenson was given
Pacific Banking Corporation Check No. 136361 in the amount of P2,575.00 and drawn against the
account of E.L. Woodworks (Rollo, p. 148).

When presented for payment, the check was dishonored for the reason "Account Closed." Thereafter,
petitioner Albenson, through counsel, traced the origin of the dishonored check. From the records of the
Securities and Exchange Commission (SEC), Albenson discovered that the president of Guaranteed, the
recipient of the unpaid mild steel plates, was one "Eugenio S. Baltao." Upon further inquiry, Albenson
was informed by the Ministry of Trade and Industry that E.L. Woodworks, a single proprietorship
business, was registered in the name of one "Eugenio Baltao". In addition, upon verification with the
drawee bank, Pacific Banking Corporation, Albenson was advised that the signature appearing on the
subject check belonged to one "Eugenio Baltao."

After obtaining the foregoing information, Albenson, through counsel, made an extrajudicial demand
upon private respondent Eugenio S. Baltao, president of Guaranteed, to replace and/or make good the
dishonored check.

Respondent Baltao, through counsel, denied that he issued the check, or that the signature appearing
thereon is his. He further alleged that Guaranteed was a defunct entity and hence, could not have
transacted business with Albenson.

On February 14, 1983, Albenson filed with the Office of the Provincial Fiscal of Rizal a complaint
against Eugenio S. Baltao for violation of Batas Pambansa Bilang 22. Submitted to support said charges
was an affidavit of petitioner Benjamin Mendiona, an employee of Albenson. In said affidavit, the above-
mentioned circumstances were stated.

It appears, however, that private respondent has a namesake, his son Eugenio Baltao III, who manages a
business establishment, E.L. Woodworks, on the ground floor of the Baltao Building, 3267 V. Mapa
Street, Sta. Mesa, Manila, the very same business address of Guaranteed.

On September 5, 1983, Assistant Fiscal Ricardo Sumaway filed an information against Eugenio S. Baltao
for Violation of Batas Pambansa Bilang 22. In filing said information, Fiscal Sumaway claimed that he
had given Eugenio S. Baltao opportunity to submit controverting evidence, but the latter failed to do so
and therefore, was deemed to have waived his right.

Respondent Baltao, claiming ignorance of the complaint against him, immediately filed with the
Provincial Fiscal of Rizal a motion for reinvestigation, alleging that it was not true that he had been given
an opportunity to be heard in the preliminary investigation conducted by Fiscal Sumaway, and that he
never had any dealings with Albenson or Benjamin Mendiona, consequently, the check for which he has
been accused of having issued without funds was not issued by him and the signature in said check was
not his.

On January 30, 1984, Provincial Fiscal Mauro M. Castro of Rizal reversed the finding of Fiscal Sumaway
and exonerated respondent Baltao. He also instructed the Trial Fiscal to move for dismissal of the
information filed against Eugenio S. Baltao. Fiscal Castro found that the signature in PBC Check No.
136361 is not the signature of Eugenio S. Baltao. He also found that there is no showing in the records of
the preliminary investigation that Eugenio S. Baltao actually received notice of the said investigation.
Fiscal Castro then castigated Fiscal Sumaway for failing to exercise care and prudence in the performance
of his duties, thereby causing injustice to respondent who was not properly notified of the complaint
against him and of the requirement to submit his counter evidence.

Because of the alleged unjust filing of a criminal case against him for allegedly issuing a check which
bounced in violation of Batas Pambansa Bilang 22 for a measly amount of P2,575.00, respondent Baltao
filed before the Regional Trial Court of Quezon City a complaint for damages against herein petitioners
Albenson Enterprises, Jesse Yap, its owner, and Benjamin Mendiona, its employee.

In its decision, the lower court observed that "the check is drawn against the account of "E.L.
Woodworks," not of Guaranteed Industries of which plaintiff used to be President. Guaranteed Industries
had been inactive and had ceased to exist as a corporation since 1975. . . . . The possibility is that it was
with Gene Baltao or Eugenio Baltao III, a son of plaintiff who had a business on the ground floor of
Baltao Building located on V. Mapa Street, that the defendants may have been dealing with . . . ." (Rollo,
pp. 41-42).

The dispositive portion of the trial court 's decision reads:

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

ordering the latter to pay plaintiff jointly and severally:

1. actual or compensatory damages of P133,350.00;

2. moral damages of P1,000,000.00 (1 million pesos);

3. exemplary damages of P200,000.00;

 4. attorney's fees of P100,000.00;

5 costs.

Defendants' counterclaim against plaintiff and claim for damages against Mercantile
Insurance Co. on the bond for the issuance of the writ of attachment at the instance of
plaintiff are hereby dismissed for lack of merit. (Rollo, pp. 38-39).

On appeal, respondent court modified the trial court's decision as follows:

WHEREFORE, the decision appealed from is MODIFIED by reducing the moral

damages awarded therein from P1,000,000.00 to P500,000.00 and the attorney's fees
from P100,000.00 to P50,000.00, said decision being hereby affirmed in all its other
aspects. With costs against appellants. (Rollo, pp. 50-51)

Dissatisfied with the above ruling, petitioners Albenson Enterprises Corp., Jesse Yap, and Benjamin
Mendiona filed the instant Petition, alleging that the appellate court erred in:

1. Concluding that private respondent's cause of action is not one based on malicious
prosecution but one for abuse of rights under Article 21 of the Civil Code
notwithstanding the fact that the basis of a civil action for malicious prosecution is
Article 2219 in relation to Article 21 or Article 2176 of the Civil Code . . . .

2. Concluding that "hitting at and in effect maligning (private respondent) with an unjust
criminal case was, without more, a plain case of abuse of rights by misdirection" and
"was therefore, actionable by itself," and which "became inordinately blatant and grossly
aggravated when . . . (private respondent) was deprived of his basic right to notice and a
fair hearing in the so-called preliminary investigation . . . . "

3. Concluding that petitioner's "actuations in this case were coldly deliberate and
calculated", no evidence having been adduced to support such a sweeping statement.

4. Holding the petitioner corporation, petitioner Yap and petitioner Mendiona jointly and
severally liable without sufficient basis in law and in fact.

5. Awarding respondents —

5.1. P133,350.00 as actual or compensatory damages, even in the

absence of sufficient evidence to show that such was actually suffered.

5.2. P500,000.00 as moral damages considering that the evidence in this

connection merely involved private respondent's alleged celebrated status
as a businessman, there being no showing that the act complained of
adversely affected private respondent's reputation or that it resulted to
material loss.

5.3. P200,000.00 as exemplary damages despite the fact that petitioners

were duly advised by counsel of their legal recourse.
 5.4. P50,000.00 as attorney's fees, no evidence having been adduced to
justify such an award (Rollo, pp. 4-6).

Petitioners contend that the civil case filed in the lower court was one for malicious prosecution. Citing
the case of Madera vs. Lopez (102 SCRA 700 [1981]), they assert that the absence of malice on their part
absolves them from any liability for malicious prosecution. Private respondent, on the other hand,
anchored his complaint for Damages on Articles 19, 20, and 21 ** of the Civil Code.

Article 19, known to contain what is commonly referred to as the principle of abuse of rights, sets certain
standards which may be observed not only in the exercise of one's rights but also in the performance of
one's duties. These standards are the following: to act with justice; to give everyone his due; and to
observe honesty and good faith. The law, therefore, recognizes the primordial limitation on all rights: that
in their exercise, the norms of human conduct set forth in Article 19 must be observed. A right, though by
itself legal because recognized or granted by law as such, may nevertheless become the source of some
illegality. When a right is exercised in a manner which does not conform with the norms enshrined in
Article 19 and results in damage to another, a legal wrong is thereby committed for which the wrongdoer
must be held responsible. Although the requirements of each provision is different, these three (3) articles
are all related to each other. As the eminent Civilist Senator Arturo Tolentino puts it: "With this article
(Article 21), combined with articles 19 and 20, the scope of our law on civil wrongs has been very greatly
broadened; it has become much more supple and adaptable than the Anglo-American law on torts. It is
now difficult to conceive of any malevolent exercise of a right which could not be checked by the
application of these articles" (Tolentino, 1 Civil Code of the Philippines 72).

There is however, no hard and fast rule which can be applied to determine whether or not the principle of
abuse of rights may be invoked. The question of whether or not the principle of abuse of rights has been
violated, resulting in damages under Articles 20 and 21 or other applicable provision of law, depends on
the circumstances of each case. (Globe Mackay Cable and Radio Corporation vs. Court of Appeals, 176
SCRA 778 [1989]).

The elements of an abuse of right under Article 19 are the following: (1) There is a legal right or duty; (2)
which is exercised in bad faith; (3) for the sole intent of prejudicing or injuring another. Article 20 speaks
of the general sanction for all other provisions of law which do not especially provide for their own
sanction (Tolentino, supra, p. 71). Thus, anyone who, whether willfully or negligently, in the exercise of
his legal right or duty, causes damage to another, shall indemnify his victim for injuries suffered thereby.
Article 21 deals with acts contra bonus mores, and has the following elements: 1) There is an act which is
legal; 2) but which is contrary to morals, good custom, public order, or public policy; 3) and it is done
with intent to injure.

Thus, under any of these three (3) provisions of law, an act which causes injury to another may be made
the basis for an award of damages.

There is a common element under Articles 19 and 21, and that is, the act must be intentional. However,
Article 20 does not distinguish: the act may be done either "willfully", or "negligently". The trial court as
well as the respondent appellate court mistakenly lumped these three (3) articles together, and cited the
same as the bases for the award of damages in the civil complaint filed against petitioners, thus:

With the foregoing legal provisions (Articles 19, 20, and 21) in focus, there is not much
difficulty in ascertaining the means by which appellants' first assigned error should be
resolved, given the admitted fact that when there was an attempt to collect the amount of
P2,575.00, the defendants were explicitly warned that plaintiff Eugenio S. Baltao is not
 the Eugenio Baltao defendants had been dealing with (supra, p. 5). When the defendants
nevertheless insisted and persisted in filing a case — a criminal case no less — against
plaintiff, said defendants ran afoul of the legal provisions (Articles 19, 20, and 21 of the
Civil Code) cited by the lower court and heretofore quoted (supra).

Defendants, not having been paid the amount of P2,575.00, certainly had the right to
complain. But that right is limited by certain constraints. Beyond that limit is the area of
excess, of abuse of rights. (Rollo, pp.
44-45).

Assuming, arguendo, that all the three (3) articles, together and not independently of each one, could be
validly made the bases for an award of damages based on the principle of "abuse of right", under the
circumstances, We see no cogent reason for such an award of damages to be made in favor of private
respondent.

Certainly, petitioners could not be said to have violated the aforestated principle of abuse of right. What
prompted petitioners to file the case for violation of Batas Pambansa Bilang 22 against private respondent
was their failure to collect the amount of P2,575.00 due on a bounced check which they honestly believed
was issued to them by private respondent. Petitioners had conducted inquiries regarding the origin of the
check, and yielded the following results: from the records of the Securities and Exchange Commission, it
was discovered that the President of Guaranteed (the recipient of the unpaid mild steel plates), was one
"Eugenio S. Baltao"; an inquiry with the Ministry of Trade and Industry revealed that E.L. Woodworks,
against whose account the check was drawn, was registered in the name of one "Eugenio Baltao";
verification with the drawee bank, the Pacific Banking Corporation, revealed that the signature appearing
on the check belonged to one "Eugenio Baltao".

In a letter dated December 16, 1983, counsel for petitioners wrote private respondent demanding that he
make good the amount of the check. Counsel for private respondent wrote back and denied, among
others, that private respondent ever transacted business with Albenson Enterprises Corporation; that he
ever issued the check in question. Private respondent's counsel even went further: he made a warning to
defendants to check the veracity of their claim. It is pivotal to note at this juncture that in this same letter,
if indeed private respondent wanted to clear himself from the baseless accusation made against his person,
he should have made mention of the fact that there are three (3) persons with the same name, i.e.: Eugenio
Baltao, Sr., Eugenio S. Baltao, Jr. (private respondent), and Eugenio Baltao III (private respondent's son,
who as it turned out later, was the issuer of the check). He, however, failed to do this. The last two
Baltaos were doing business in the same building — Baltao Building — located at 3267 V. Mapa Street,
Sta. Mesa, Manila. The mild steel plates were ordered in the name of Guaranteed of which respondent
Eugenio S. Baltao is the president and delivered to Guaranteed at Baltao building. Thus, petitioners had
every reason to believe that the Eugenio Baltao who issued the bouncing check is respondent Eugenio S.
Baltao when their counsel wrote respondent to make good the amount of the check and upon refusal, filed
the complaint for violation of BP Blg. 22.

Private respondent, however, did nothing to clarify the case of mistaken identity at first hand. Instead,
private respondent waited in ambush and thereafter pounced on the hapless petitioners at a time he
thought was propitious by filing an action for damages. The Court will not countenance this devious
scheme.

The criminal complaint filed against private respondent after the latter refused to make good the amount
of the bouncing check despite demand was a sincere attempt on the part of petitioners to find the best
possible means by which they could collect the sum of money due them. A person who has not been paid
an obligation owed to him will naturally seek ways to compel the debtor to pay him. It was normal for
petitioners to find means to make the issuer of the check pay the amount thereof. In the absence of a
wrongful act or omission or of fraud or bad faith, moral damages cannot be awarded and that the adverse
result of an action does not per se make the action wrongful and subject the actor to the payment of
damages, for the law could not have meant to impose a penalty on the right to litigate (Rubio vs. Court of
Appeals, 141 SCRA 488 [1986]).

In the case at bar, private respondent does not deny that the mild steel plates were ordered by and
delivered to Guaranteed at Baltao building and as part payment thereof, the bouncing check was issued by
one Eugenio Baltao. Neither had private respondent conveyed to petitioner that there are two Eugenio
Baltaos conducting business in the same building — he and his son Eugenio Baltao III. Considering that
Guaranteed, which received the goods in payment of which the bouncing check was issued is owned by
respondent, petitioner acted in good faith and probable cause in filing the complaint before the provincial
fiscal.

To constitute malicious prosecution, there must be proof that the prosecution was prompted by a sinister
design to vex and humiliate a person, and that it was initiated deliberately by the defendant knowing that
his charges were false and groundless. Concededly, the mere act of submitting a case to the authorities for
prosecution does not make one liable for malicious prosecution. (Manila Gas Corporation vs. Court of
Appeals, 100 SCRA 602 [1980]). Still, private respondent argues that liability under Articles 19, 20, and
21 of the Civil Code is so encompassing that it likewise includes liability for damages for malicious
prosecution under Article 2219 (8). True, a civil action for damages for malicious prosecution is allowed
under the New Civil Code, more specifically Articles 19, 20, 26, 29, 32, 33, 35, and 2219 (8) thereof. In
order that such a case can prosper, however, the following three (3) elements must be present, to wit: (1)
The fact of the prosecution and the further fact that the defendant was himself the prosecutor, and that the
action was finally terminated with an acquittal; (2) That in bringing the action, the prosecutor acted
without probable cause; (3) The prosecutor was actuated or impelled by legal malice (Lao vs. Court of
Appeals, 199 SCRA 58, [1991]).

Thus, a party injured by the filing of a court case against him, even if he is later on absolved, may file a
case for damages grounded either on the principle of abuse of rights, or on malicious prosecution. As
earlier stated, a complaint for damages based on malicious prosecution will prosper only if the three (3)
elements aforecited are shown to exist. In the case at bar, the second and third elements were not shown
to exist. It is well-settled that one cannot be held liable for maliciously instituting a prosecution where one
has acted with probable cause. "Probable cause is the existence of such facts and circumstances as would
excite the belief, in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the
person charged was guilty of the crime for which he was prosecuted. In other words, a suit will lie only in
cases where a legal prosecution has been carried on without probable cause. The reason for this rule is
that it would be a very great discouragement to public justice, if prosecutors, who had tolerable ground of
suspicion, were liable to be sued at law when their indictment miscarried" (Que vs. Intermediate
Appellate Court, 169 SCRA 137 [1989]).

The presence of probable cause signifies, as a legal consequence, the absence of malice. In the instant
case, it is evident that petitioners were not motivated by malicious intent or by sinister design to unduly
harass private respondent, but only by a well-founded anxiety to protect their rights when they filed the
criminal complaint against private respondent.

To constitute malicious prosecution, there must be proof that the prosecution was
prompted by a sinister design to vex and humiliate a person, that it was initiated
deliberately by the defendant knowing that his charges were false and groundless.
 Concededly, the mere act of submitting a case to the authorities for prosecution does not
make one liable for malicious prosecution. Proof and motive that the institution of the
action was prompted by a sinister design to vex and humiliate a person must be clearly
and preponderantly established to entitle the victims to damages (Ibid.).

In the case at bar, there is no proof of a sinister design on the part of petitioners to vex or humiliate
private respondent by instituting the criminal case against him. While petitioners may have been negligent
to some extent in determining the liability of private respondent for the dishonored check, the same is not
so gross or reckless as to amount to bad faith warranting an award of damages.

The root of the controversy in this case is founded on a case of mistaken identity. It is possible that with a
more assiduous investigation, petitioners would have eventually discovered that private respondent
Eugenio S. Baltao is not the "Eugenio Baltao" responsible for the dishonored check. However, the record
shows that petitioners did exert considerable effort in order to determine the liability of private
respondent. Their investigation pointed to private respondent as the "Eugenio Baltao" who issued and
signed the dishonored check as the president of the debtor-corporation Guaranteed Enterprises. Their
error in proceeding against the wrong individual was obviously in the nature of an innocent mistake, and
cannot be characterized as having been committed in bad faith. This error could have been discovered if
respondent had submitted his counter-affidavit before investigating fiscal Sumaway and was immediately
rectified by Provincial Fiscal Mauro Castro upon discovery thereof, i.e., during the reinvestigation
resulting in the dismissal of the complaint.

Furthermore, the adverse result of an action does not per se make the act wrongful and subject the actor to
the payment of moral damages. The law could not have meant to impose a penalty on the right to litigate,
such right is so precious that moral damages may not be charged on those who may even exercise it
erroneously. And an adverse decision does not ipso facto justify the award of attorney's fees to the
winning party (Garcia vs. Gonzales, 183 SCRA 72 [1990]).

Thus, an award of damages and attorney's fees is unwarranted where the action was filed in good faith. If
damage results from a person's exercising his legal rights, it is damnum absque injuria (Ilocos Norte
Electric Company vs. Court of Appeals, 179 SCRA 5 [1989]).

Coming now to the claim of private respondent for actual or compensatory damages, the records show
that the same was based solely on his allegations without proof to substantiate the same. He did not
present proof of the cost of the medical treatment which he claimed to have undergone as a result of the
nervous breakdown he suffered, nor did he present proof of the actual loss to his business caused by the
unjust litigation against him. In determining actual damages, the court cannot rely on speculation,
conjectures or guesswork as to the amount. Without the actual proof of loss, the award of actual damages
becomes erroneous (Guilatco vs. City of Dagupan, 171 SCRA 382 [1989]).

Actual and compensatory damages are those recoverable because of pecuniary loss — in business, trade,
property, profession, job or occupation — and the same must be proved, otherwise, if the proof is flimsy
and unsubstantiated, no damages will be given (Rubio vs. Court of Appeals, 141 SCRA 488 [1986]). For
these reasons, it was gravely erroneous for respondent court to have affirmed the award of actual damages
in favor of private respondent in the absence of proof thereof.

Where there is no evidence of the other party having acted in wanton, fraudulent or reckless, or
oppressive manner, neither may exemplary damages be awarded (Dee Hua Liong Electrical Equipment
Corporation vs. Reyes, 145 SCRA 488 [1986]).
As to the award of attorney's fees, it is well-settled that the same is the exception rather than the general
rule. Needless to say, the award of attorney's fees must be disallowed where the award of exemplary
damages is eliminated (Article 2208, Civil Code; Agustin vs. Court of Appeals, 186 SCRA 375 [1990]).
Moreover, in view of the fact that there was no malicious prosecution against private respondent,
attorney's fees cannot be awarded him on that ground.

In the final analysis, there is no proof or showing that petitioners acted maliciously or in bad faith in the
filing of the case against private respondent. Consequently, in the absence of proof of fraud and bad faith
committed by petitioners, they cannot be held liable for damages (Escritor, Jr. vs. Intermediate Appellate
Court, 155 SCRA 577 [1987]). No damages can be awarded in the instant case, whether based on the
principle of abuse of rights, or for malicious prosecution. The questioned judgment in the instant case
attests to the propensity of trial judges to award damages without basis. Lower courts are hereby
cautioned anew against awarding unconscionable sums as damages without bases therefor.

WHEREFORE, the petition is GRANTED and the decision of the Court of Appeals in C.A. G.R. C.V.
No. 14948 dated May 13, 1989, is hereby REVERSED and SET ASIDE. Costs against respondent Baltao.

SO ORDERED.

Gutierrez, Jr., Davide, Jr., Romero and Melo, JJ., concur.

G.R. No. 96126 August 10, 1992

ESTERIA F. GARCIANO, petitioner,

vs.
THE HON. COURT OF APPEALS, EMERITO LABAJO, LUNISITA MARODA,
LALIANA DIONES, CANONISA PANINSORO, DIONISIO ROSAL, REMEDIOS
GALUSO, FLORDELUNA PETALCORIN, MELCHIZEDECH LOON, NORBERTA
MARODA and JOSEPH WIERTZ, respondents.

Basilio E. Duaban for petitioner.

Julius Z. Neri for private respondent.

GRIÑO-AQUINO, J.:

This is a petition for review of the decision of the Court of Appeals dismissing the complaint for
damages filed by the petitioner against the private respondents.

The petitioner was hired to teach during the 1981-82 school year in the Immaculate Concepcion
Institute in the Island of Camotes. On January 13, 1982, or before the school year ended, she
applied for an indefinite leave of absence because her daughter was taking her to Austria where
her daughter was employed (Exh. B). The application was recommended for approval by the
school principal, Emerito O. Labajo, and approved by the President of the school's Board of
Directors (Exh. B-1).

On June 1, 1982, Emerito Labajo addressed a letter to the petitioner through her husband, Sotero
Garciano (for she was still abroad), informing her of the decision of Fr. Joseph Wiertz, the
school's founder, concurred in by the president of the Parent-Teachers Association and the
school faculty, to terminate her services as a member of the teaching staff because of: (1) the
absence of any written contract of employment between her and the school due to her refusal to
sign one; and (2) the difficulty of getting a substitute for her on a temporary basis as no one
would accept the position without a written contract (Exhs. C and 1). Upon her return from
Austria in the later part of June, 1982, she received the letter informing her that her services at
the Immaculate Concepcion Institute had been terminated. She made inquiries from the school
about the matter and, on July 7, 1982, the members of the Board of Directors of the school, with
the exception of Fr. Joseph Wiertz, signed a letter notifying her that she was "reinstated to report
and do your usual duties as Classroom Teacher . . . effective July 5, 1982," and that "any letter or
notice of termination received by you before this date has no sanction or authority by the Board
of Directors of this Institution, therefore it is declared null and void . . ." (Exhs. D and 2).

On July 9, 1982, the president, vice president, secretary, and three members of the Board of
Directors, out of a membership of nine (9), resigned their positions from the Board "for the
reason that the ICI Faculty, has reacted acidly to the Board's deliberations for the reinstatement
of Mrs. Esteria F. Garciano, thereby questioning the integrity of the Board's decision" (Exh. E).
On September 3, 1982, petitioner filed a complaint for damages in the Regional Trial Court,
Cebu, Branch XI, against Fr. Wiertz, Emerito Labajo, and some members of the faculty of the
school for discrimination and unjust and illegal dismissal.

After trial, the lower court rendered a decision on August 30, 1985, ordering the defendants
jointly and severally to pay her P200,000 as moral damages, P50,000 exemplary damages,
P32,400 as lost earnings for nine years, and P10,000 as litigation expenses and attorney's fees.

The defendants (now private respondents) appealed to the Court of Appeals (CA-G.R. CV No.
10692), which on August 30, 1990 reversed the trial court's decision thus:

WHEREFORE, the decision appealed from is reversed, the complaint is

dismissed, and defendants-appellants are absolved from any liability to plaintiff-
appellee. With costs against plaintiff-appellee. (p. 13, Rollo.)

The plaintiff-appellee (now petitioner) filed a motion for reconsideration which the Court of
Appeals denied on October 26, 1990. Hence, this petition for review wherein the lone error
assigned by petitioner reads:

Respondent Court of Appeals gravely erred in absolving the private respondents

from liability by faulting the petitioner for her failure to report back to her work.
(p. 6, Rollo.)

After a careful perusal of the petition and the respondents' comments, the Court resolved to deny
the petition for lack of merit.

The board of directors of the Immaculate Concepcion Institute, which alone possesses the
authority to hire and fire teachers and other employees of the school, did not dismiss the
petitioner. It in fact directed her to report for work. While the private respondents sent her a letter
of termination through her husband, they admittedly had no authority to do so. As the Court of
Appeals aptly observed:

We agree with defendants-appellants, however, that they should not have been
held liable to plaintiff-appellee for damages. Defendants-appellants had no
authority to dismiss plaintiff-appellee and the latter was aware of this. Hence, the
letter of termination sent to her through her husband (Exhs. C and 1) by
defendants-appellants had no legal effect whatsoever. It did not effectively
prevent her from reporting for work. What is more, it was subsequently
repudiated by the Board of Directors which directed her to report for work. (Exhs.
D and 2) There was, therefore, no reason why she did not continue with her
teaching in the school. No evidence had been presented to show that defendants-
appellants prevented her from reporting for work. The fact that defendants-
appellants had "acidly" received the action of the Board of Directors repudiating
their decision to terminate plaintiff-appellee is not proof that defendants-
appellants had effectively and physically prevented plaintiff-appellee from
resuming her post. It was nothing more than a reaction to what defendants-
 appellants perceived as an affront to their collective prestige. It would appear,
therefore, that plaintiff-appellee voluntarily desisted from her teaching job in the
school and has no right to recover damages from defendants-appellants. (p. 13,
Rollo.)

Liability for damages under Articles 19, 20 and 21 of the Civil Code arises only from unlawful,
willful or negligent acts that are contrary to law, or morals, good customs or public policy.

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

Art. 20. Every person who, contrary to law, willfully or negligently causes
damage to another, shall indemnify the latter for the same.

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

The Court of Appeals was correct in finding that petitioner's discontinuance from teaching was
her own choice. While the respondents admittedly wanted her service terminated, they actually
did nothing to physically prevent her from reassuming her post, as ordered by the school's Board
of Directors. That the school principal and Fr. Wiertz disagreed with the Board's decision to
retain her, and some teachers allegedly threatened to resign en masse, even if true, did not make
them liable to her for damages. They were simply exercising their right of free speech or their
right to dissent from the Board's decision. Their acts were not contrary to law, morals, good
customs or public policy. They did not "illegally dismiss" her for the Board's decision to retain
her prevailed. She was ordered to report for work on July 5, 1982, but she did not comply with
that order. Consequently, whatever loss she may have incurred in the form of lost earnings was
self-inflicted. Volenti non fit injuria.

With respect to petitioner's claim for moral damages, the right to recover them under Article 21
is based on equity, and he who comes to court to demand equity, must come with clean hands.
Article 21 should be construed as granting the right to recover damages to injured persons who
are not themselves at fault (Mabutas vs. Calapan Electric Co. [CA] 50 OG 5828, cited in Padilla,
Civil Code Annotated, Vol. 1, 1975 Ed., p. 87). Moral damages are recoverable only if the case
falls under Article 2219 in relation to Article 21 (Flordelis vs. Mar, 114 SCRA 41). In the case at
bar, petitioners is not without fault. Firstly, she went on an indefinite leave of absence and failed
to report back in time for the regular opening of classes. Secondly, for reasons known to herself
alone, she refused to sign a written contract of employment. Lastly, she ignored the Board of
Directors' order for her to report for duty on July 5, 1982.

The trial court's award of exemplary damages to her was not justified for she is not entitled to
moral, temperate or compensatory damages. (Art. 2234, Civil Code).
In sum, the Court of Appeals correctly set aside the damages awarded by the trial court to the
petitioner for they did not have any legal or factual basis.

WHEREFORE, the petition is DISMISSED for lack of merit and the decision of the Court of
Appeals is AFFIRMED.

SO ORDERED.

Cruz , Medialdea and Bellosillo, JJ., concur.

G.R. No. 81262 August 25, 1989

GLOBE MACKAY CABLE AND RADIO CORP., and HERBERT C. HENDRY,

petitioners,
vs.
THE HONORABLE COURT OF APPEALS and RESTITUTO M. TOBIAS, respondents.

Atencia & Arias Law Offices for petitioners.

Romulo C. Felizmena for private respondent.

CORTES, J.:

Private respondent Restituto M. Tobias was employed by petitioner Globe Mackay Cable and
Radio Corporation (GLOBE MACKAY) in a dual capacity as a purchasing agent and
administrative assistant to the engineering operations manager. In 1972, GLOBE MACKAY
discovered fictitious purchases and other fraudulent transactions for which it lost several
thousands of pesos.

According to private respondent it was he who actually discovered the anomalies and reported
them on November 10, 1972 to his immediate superior Eduardo T. Ferraren and to petitioner
Herbert C. Hendry who was then the Executive Vice-President and General Manager of GLOBE
MACKAY.

On November 11, 1972, one day after private respondent Tobias made the report, petitioner
Hendry confronted him by stating that he was the number one suspect, and ordered him to take a
one week forced leave, not to communicate with the office, to leave his table drawers open, and
to leave the office keys.

On November 20, 1972, when private respondent Tobias returned to work after the forced leave,
petitioner Hendry went up to him and called him a "crook" and a "swindler." Tobias was then
ordered to take a lie detector test. He was also instructed to submit specimen of his handwriting,
signature, and initials for examination by the police investigators to determine his complicity in
the anomalies.

On December 6,1972, the Manila police investigators submitted a laboratory crime report (Exh.
"A") clearing private respondent of participation in the anomalies.

Not satisfied with the police report, petitioners hired a private investigator, retired Col. Jose G.
Fernandez, who on December 10, 1972, submitted a report (Exh. "2") finding Tobias guilty. This
report however expressly stated that further investigation was still to be conducted.

Nevertheless, on December 12, 1972, petitioner Hendry issued a memorandum suspending

Tobias from work preparatory to the filing of criminal charges against him.
On December 19,1972, Lt. Dioscoro V. Tagle, Metro Manila Police Chief Document Examiner,
after investigating other documents pertaining to the alleged anomalous transactions, submitted a
second laboratory crime report (Exh. "B") reiterating his previous finding that the handwritings,
signatures, and initials appearing in the checks and other documents involved in the fraudulent
transactions were not those of Tobias. The lie detector tests conducted on Tobias also yielded
negative results.

Notwithstanding the two police reports exculpating Tobias from the anomalies and the fact that
the report of the private investigator, was, by its own terms, not yet complete, petitioners filed
with the City Fiscal of Manila a complaint for estafa through falsification of commercial
documents, later amended to just estafa. Subsequently five other criminal complaints were filed
against Tobias, four of which were for estafa through Falsification of commercial document
while the fifth was for of Article 290 of' the Revised Penal Code (Discovering Secrets Through
Seizure of Correspondence).lâwphî1.ñèt Two of these complaints were refiled with the Judge
Advocate General's Office, which however, remanded them to the fiscal's office. All of the six
criminal complaints were dismissed by the fiscal. Petitioners appealed four of the fiscal's
resolutions dismissing the criminal complaints with the Secretary of Justice, who, however,
affirmed their dismissal.

In the meantime, on January 17, 1973, Tobias received a notice (Exh. "F") from petitioners that
his employment has been terminated effective December 13, 1972. Whereupon, Tobias filed a
complaint for illegal dismissal. The labor arbiter dismissed the complaint. On appeal, the
National Labor Relations Commission (NLRC) reversed the labor arbiter's decision. However,
the Secretary of Labor, acting on petitioners' appeal from the NLRC ruling, reinstated the labor
arbiter's decision. Tobias appealed the Secretary of Labor's order with the Office of the
President. During the pendency of the appeal with said office, petitioners and private respondent
Tobias entered into a compromise agreement regarding the latter's complaint for illegal
dismissal.

Unemployed, Tobias sought employment with the Republic Telephone Company (RETELCO).
However, petitioner Hendry, without being asked by RETELCO, wrote a letter to the latter
stating that Tobias was dismissed by GLOBE MACKAY due to dishonesty.

Private respondent Tobias filed a civil case for damages anchored on alleged unlawful,
malicious, oppressive, and abusive acts of petitioners. Petitioner Hendry, claiming illness, did
not testify during the hearings. The Regional Trial Court (RTC) of Manila, Branch IX, through
Judge Manuel T. Reyes rendered judgment in favor of private respondent by ordering petitioners
to pay him eighty thousand pesos (P80,000.00) as actual damages, two hundred thousand pesos
(P200,000.00) as moral damages, twenty thousand pesos (P20,000.00) as exemplary damages,
thirty thousand pesos (P30,000.00) as attorney's fees, and costs. Petitioners appealed the RTC
decision to the Court of Appeals. On the other hand, Tobias appealed as to the amount of
damages. However, the Court of Appeals, an a decision dated August 31, 1987 affirmed the RTC
decision in toto. Petitioners' motion for reconsideration having been denied, the instant petition
for review on certiorari was filed.
The main issue in this case is whether or not petitioners are liable for damages to private
respondent.

Petitioners contend that they could not be made liable for damages in the lawful exercise of their
right to dismiss private respondent.

On the other hand, private respondent contends that because of petitioners' abusive manner in
dismissing him as well as for the inhuman treatment he got from them, the Petitioners must
indemnify him for the damage that he had suffered.

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

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

This article, known to contain what is commonly referred to as the principle of abuse of rights,
sets certain standards which must be observed not only in the exercise of one's rights but also in
the performance of one's duties. These standards are the following: to act with justice; to give
everyone his due; and to observe honesty and good faith. The law, therefore, recognizes a
primordial limitation on all rights; that in their exercise, the norms of human conduct set forth in
Article 19 must be observed. A right, though by itself legal because recognized or granted by law
as such, may nevertheless become the source of some illegality. When a right is exercised in a
manner which does not conform with the norms enshrined in Article 19 and results in damage to
another, a legal wrong is thereby committed for which the wrongdoer must be held responsible.
But while Article 19 lays down a rule of conduct for the government of human relations and for
the maintenance of social order, it does not provide a remedy for its violation. Generally, an
action for damages under either Article 20 or Article 21 would be proper.

Article 20, which pertains to damage arising from a violation of law, provides that:

Art. 20. Every person who contrary to law, wilfully or negligently causes damage
to another, shall indemnify the latter for the same.

However, in the case at bar, petitioners claim that they did not violate any provision of law since
they were merely exercising their legal right to dismiss private respondent. This does not,
however, leave private respondent with no relief because Article 21 of the Civil Code provides
that:

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

This article, adopted to remedy the "countless gaps in the statutes, which leave so many victims
of moral wrongs helpless, even though they have actually suffered material and moral injury"
[Id.] should "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" [Id. it p. 40; See also
PNB v. CA, G.R. No. L-27155, May 18,1978, 83 SCRA 237, 247].

In determining whether or not the principle of abuse of rights may be invoked, there is no rigid
test which can be applied. While the Court has not hesitated to apply Article 19 whether the legal
and factual circumstances called for its application [See for e.g., Velayo v. Shell Co. of the Phil.,
Ltd., 100 Phil. 186 (1956); PNB v. CA, supra; Grand Union Supermarket, Inc. v. Espino, Jr.,
G.R. No. L-48250, December 28, 1979, 94 SCRA 953; PAL v. CA, G.R. No. L-46558, July
31,1981,106 SCRA 391; United General Industries, Inc, v. Paler G.R. No. L-30205, March
15,1982,112 SCRA 404; Rubio v. CA, G.R. No. 50911, August 21, 1987, 153 SCRA 183] the
question of whether or not the principle of abuse of rights has been violated resulting in damages
under Article 20 or Article 21 or other applicable provision of law, depends on the circumstances
of each case. And in the instant case, the Court, after examining the record and considering
certain significant circumstances, finds that all petitioners have indeed abused the right that they
invoke, causing damage to private respondent and for which the latter must now be indemnified.

The trial court made a finding that notwithstanding the fact that it was private respondent Tobias
who reported the possible existence of anomalous transactions, petitioner Hendry "showed
belligerence and told plaintiff (private respondent herein) that he was the number one suspect
and to take a one week vacation leave, not to communicate with the office, to leave his table
drawers open, and to leave his keys to said defendant (petitioner Hendry)" [RTC Decision, p. 2;
Rollo, p. 232]. This, petitioners do not dispute. But regardless of whether or not it was private
respondent Tobias who reported the anomalies to petitioners, the latter's reaction towards the
former upon uncovering the anomalies was less than civil. An employer who harbors suspicions
that an employee has committed dishonesty might be justified in taking the appropriate action
such as ordering an investigation and directing the employee to go on a leave. Firmness and the
resolve to uncover the truth would also be expected from such employer. But the high-handed
treatment accorded Tobias by petitioners was certainly uncalled for. And this reprehensible
attitude of petitioners was to continue when private respondent returned to work on November
20, 1972 after his one week forced leave. Upon reporting for work, Tobias was confronted by
Hendry who said. "Tobby, you are the crook and swindler in this company." Considering that the
first report made by the police investigators was submitted only on December 10, 1972 [See Exh.
A] the statement made by petitioner Hendry was baseless. The imputation of guilt without basis
and the pattern of harassment during the investigations of Tobias transgress the standards of
human conduct set forth in Article 19 of the Civil Code. The Court has already ruled that the
right of the employer to dismiss an employee should not be confused with the manner in which
the right is exercised and the effects flowing therefrom. If the dismissal is done abusively, then
the employer is liable for damages to the employee [Quisaba v. Sta. Ines-Melale Veneer and
Plywood Inc., G.R. No. L-38088, August 30, 1974, 58 SCRA 771; See also Philippine Refining
Co., Inc. v. Garcia, G.R. No. L-21871, September 27,1966, 18 SCRA 107] Under the
circumstances of the instant case, the petitioners clearly failed to exercise in a legitimate manner
their right to dismiss Tobias, giving the latter the right to recover damages under Article 19 in
relation to Article 21 of the Civil Code.

But petitioners were not content with just dismissing Tobias. Several other tortious acts were
committed by petitioners against Tobias after the latter's termination from work. Towards the
latter part of January, 1973, after the filing of the first of six criminal complaints against Tobias,
the latter talked to Hendry to protest the actions taken against him. In response, Hendry cut short
Tobias' protestations by telling him to just confess or else the company would file a hundred
more cases against him until he landed in jail. Hendry added that, "You Filipinos cannot be
trusted." The threat unmasked petitioner's bad faith in the various actions taken against Tobias.
On the other hand, the scornful remark about Filipinos as well as Hendry's earlier statements
about Tobias being a "crook" and "swindler" are clear violations of 'Tobias' personal dignity [See
Article 26, Civil Code].

The next tortious act committed by petitioners was the writing of a letter to RETELCO sometime
in October 1974, stating that Tobias had been dismissed by GLOBE MACKAY due to
dishonesty. Because of the letter, Tobias failed to gain employment with RETELCO and as a
result of which, Tobias remained unemployed for a longer period of time. For this further
damage suffered by Tobias, petitioners must likewise be held liable for damages consistent with
Article 2176 of the Civil Code. Petitioners, however, contend that they have a "moral, if not
legal, duty to forewarn other employers of the kind of employee the plaintiff (private respondent
herein) was." [Petition, p. 14; Rollo, p. 15]. Petitioners further claim that "it is the accepted moral
and societal obligation of every man to advise or warn his fellowmen of any threat or danger to
the latter's life, honor or property. And this includes warning one's brethren of the possible
dangers involved in dealing with, or accepting into confidence, a man whose honesty and
integrity is suspect" [Id.]. These arguments, rather than justify petitioners' act, reveal a seeming
obsession to prevent Tobias from getting a job, even after almost two years from the time Tobias
was dismissed.

Finally, there is the matter of the filing by petitioners of six criminal complaints against Tobias.
Petitioners contend that there is no case against them for malicious prosecution and that they
cannot be "penalized for exercising their right and prerogative of seeking justice by filing
criminal complaints against an employee who was their principal suspect in the commission of
forgeries and in the perpetration of anomalous transactions which defrauded them of substantial
sums of money" [Petition, p. 10, Rollo, p. 11].

While sound principles of justice and public policy dictate that persons shall have free resort to
the courts for redress of wrongs and vindication of their rights [Buenaventura v. Sto. Domingo,
103 Phil. 239 (1958)], the right to institute criminal prosecutions can not be exercised
maliciously and in bad faith [Ventura v. Bernabe, G.R. No. L-26760, April 30, 1971, 38 SCRA
5871.] Hence, in Yutuk V. Manila Electric Co., G.R. No. L-13016, May 31, 1961, 2 SCRA 337,
the Court held that the right to file criminal complaints should not be used as a weapon to force
an alleged debtor to pay an indebtedness. To do so would be a clear perversion of the function of
the criminal processes and of the courts of justice. And in Hawpia CA, G.R. No. L-20047, June
30, 1967. 20 SCRA 536 the Court upheld the judgment against the petitioner for actual and
moral damages and attorney's fees after making a finding that petitioner, with persistence, filed at
least six criminal complaints against respondent, all of which were dismissed.

To constitute malicious prosecution, there must be proof that the prosecution was prompted by a
design to vex and humiliate a person and that it was initiated deliberately by the defendant
knowing that the charges were false and groundless [Manila Gas Corporation v. CA, G.R. No. L-
44190, October 30,1980, 100 SCRA 602]. Concededly, the filing of a suit by itself, does not
render a person liable for malicious prosecution [Inhelder Corporation v. CA, G.R. No. 52358,
May 301983122 SCRA 576]. The mere dismissal by the fiscal of the criminal complaint is not a
ground for an award of damages for malicious prosecution if there is no competent evidence to
show that the complainant had acted in bad faith [Sison v. David, G.R. No. L-11268, January
28,1961, 1 SCRA 60].

In the instant case, however, the trial court made a finding that petitioners acted in bad faith in
filing the criminal complaints against Tobias, observing that:

xxx

Defendants (petitioners herein) filed with the Fiscal's Office of Manila a total of
six (6) criminal cases, five (5) of which were for estafa thru falsification of
commercial document and one for violation of Art. 290 of the Revised Penal
Code "discovering secrets thru seizure of correspondence," and all were dismissed
for insufficiency or lack of evidence." The dismissal of four (4) of the cases was
appealed to the Ministry of Justice, but said Ministry invariably sustained the
dismissal of the cases. As above adverted to, two of these cases were refiled with
the Judge Advocate General's Office of the Armed Forces of the Philippines to
railroad plaintiffs arrest and detention in the military stockade, but this was
frustrated by a presidential decree transferring criminal cases involving civilians
to the civil courts.

xxx

To be sure, when despite the two (2) police reports embodying the findings of Lt.
Dioscoro Tagle, Chief Document Examiner of the Manila Police Department,
clearing plaintiff of participation or involvement in the fraudulent transactions
complained of, despite the negative results of the lie detector tests which
defendants compelled plaintiff to undergo, and although the police investigation
was "still under follow-up and a supplementary report will be submitted after all
the evidence has been gathered," defendants hastily filed six (6) criminal cases
with the city Fiscal's Office of Manila, five (5) for estafa thru falsification of
commercial document and one (1) for violation of Art. 290 of the Revised Penal
Code, so much so that as was to be expected, all six (6) cases were dismissed,
 with one of the investigating fiscals, Asst. Fiscal de Guia, commenting in one case
that, "Indeed, the haphazard way this case was investigated is evident. Evident
likewise is the flurry and haste in the filing of this case against respondent
Tobias," there can be no mistaking that defendants would not but be motivated by
malicious and unlawful intent to harass, oppress, and cause damage to plaintiff.

xxx

[RTC Decision, pp. 5-6; Rollo, pp. 235-236].

In addition to the observations made by the trial court, the Court finds it significant that the
criminal complaints were filed during the pendency of the illegal dismissal case filed by Tobias
against petitioners. This explains the haste in which the complaints were filed, which the trial
court earlier noted. But petitioners, to prove their good faith, point to the fact that only six
complaints were filed against Tobias when they could have allegedly filed one hundred cases,
considering the number of anomalous transactions committed against GLOBE MACKAY.
However, petitioners' good faith is belied by the threat made by Hendry after the filing of the
first complaint that one hundred more cases would be filed against Tobias. In effect, the possible
filing of one hundred more cases was made to hang like the sword of Damocles over the head of
Tobias. In fine, considering the haste in which the criminal complaints were filed, the fact that
they were filed during the pendency of the illegal dismissal case against petitioners, the threat
made by Hendry, the fact that the cases were filed notwithstanding the two police reports
exculpating Tobias from involvement in the anomalies committed against GLOBE MACKAY,
coupled by the eventual dismissal of all the cases, the Court is led into no other conclusion than
that petitioners were motivated by malicious intent in filing the six criminal complaints against
Tobias.

Petitioners next contend that the award of damages was excessive. In the complaint filed against
petitioners, Tobias prayed for the following: one hundred thousand pesos (P100,000.00) as actual
damages; fifty thousand pesos (P50,000.00) as exemplary damages; eight hundred thousand
pesos (P800,000.00) as moral damages; fifty thousand pesos (P50,000.00) as attorney's fees; and
costs. The trial court, after making a computation of the damages incurred by Tobias [See RTC
Decision, pp. 7-8; Rollo, pp. 154-1551, awarded him the following: eighty thousand pesos
(P80,000.00) as actual damages; two hundred thousand pesos (P200,000.00) as moral damages;
twenty thousand pesos (P20,000.00) as exemplary damages; thirty thousand pesos (P30,000.00)
as attorney's fees; and, costs. It must be underscored that petitioners have been guilty of
committing several actionable tortious acts, i.e., the abusive manner in which they dismissed
Tobias from work including the baseless imputation of guilt and the harassment during the
investigations; the defamatory language heaped on Tobias as well as the scornful remark on
Filipinos; the poison letter sent to RETELCO which resulted in Tobias' loss of possible
employment; and, the malicious filing of the criminal complaints. Considering the extent of the
damage wrought on Tobias, the Court finds that, contrary to petitioners' contention, the amount
of damages awarded to Tobias was reasonable under the circumstances.

Yet, petitioners still insist that the award of damages was improper, invoking the principle of
damnum absque injuria. It is argued that "[t]he only probable actual damage that plaintiff
(private respondent herein) could have suffered was a direct result of his having been dismissed
from his employment, which was a valid and legal act of the defendants-appellants (petitioners
herein).lâwphî1.ñèt " [Petition, p. 17; Rollo, p. 18].

According to the principle of damnum absque injuria, damage or loss which does not constitute a
violation of a legal right or amount to a legal wrong is not actionable [Escano v. CA, G.R. No. L-
47207, September 25, 1980, 100 SCRA 197; See also Gilchrist v. Cuddy 29 Phil, 542 (1915);
The Board of Liquidators v. Kalaw, G.R. No. L-18805, August 14, 1967, 20 SCRA 987]. This
principle finds no application in this case. It bears repeating that even granting that petitioners
might have had the right to dismiss Tobias from work, the abusive manner in which that right
was exercised amounted to a legal wrong for which petitioners must now be held liable.
Moreover, the damage incurred by Tobias was not only in connection with the abusive manner in
which he was dismissed but was also the result of several other quasi-delictual acts committed by
petitioners.

Petitioners next question the award of moral damages. However, the Court has already ruled in
Wassmer v. Velez, G.R. No. L-20089, December 26, 1964, 12 SCRA 648, 653, that [p]er express
provision of Article 2219 (10) of the New Civil Code, moral damages are recoverable in the
cases mentioned in Article 21 of said Code." Hence, the Court of Appeals committed no error in
awarding moral damages to Tobias.

Lastly, the award of exemplary damages is impugned by petitioners. Although Article 2231 of
the Civil Code provides that "[i]n quasi-delicts, exemplary damages may be granted if the
defendant acted with gross negligence," the Court, in Zulueta v. Pan American World Airways,
Inc., G.R. No. L- 28589, January 8, 1973, 49 SCRA 1, ruled that if gross negligence warrants the
award of exemplary damages, with more reason is its imposition justified when the act
performed is deliberate, malicious and tainted with bad faith. As in the Zulueta case, the nature
of the wrongful acts shown to have been committed by petitioners against Tobias is sufficient
basis for the award of exemplary damages to the latter.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals in CA-
G.R. CV No. 09055 is AFFIRMED.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr. and Bidin, JJ., concur.

Feliciano, J., took no part.

G.R. No. L-44748 August 29, 1986

RADIO COMMUNICATIONS OF THE PHILS., INC. (RCPI). petitioner,

vs.
COURT OF APPEALS and LORETO DIONELA, respondents.

O. Pythogoras Oliver for respondents.

PARAS, J.:

Before Us, is a Petition for Review by certiorari of the decision of the Court of Appeals,
modifying the decision of the trial court in a civil case for recovery of damages against petitioner
corporation by reducing the award to private respondent Loreto Dionela of moral damages from
P40,000 to Pl5,000, and attorney's fees from P3,000 to P2,000.

The basis of the complaint against the defendant corporation is a telegram sent through its
Manila Office to the offended party, Loreto Dionela, reading as follows:

176 AS JR 1215PM 9 PAID MANDALUYONG JUL 22-66 LORETO

DIONELA CABANGAN LEGASPI CITY

WIRE ARRIVAL OF CHECK FER

LORETO DIONELA-CABANGAN-WIRE ARRIVAL OF CHECK-PER

115 PM

SA IYO WALANG PAKINABANG DUMATING KA DIYAN-WALA-KANG

PADALA DITO KAHIT BULBUL MO

(p. 19, Annex "A")

Plaintiff-respondent Loreto Dionela alleges that the defamatory words on the telegram sent to
him not only wounded his feelings but also caused him undue embarrassment and affected
adversely his business as well because other people have come to know of said defamatory
words. Defendant corporation as a defense, alleges that the additional words in Tagalog was a
private joke between the sending and receiving operators and that they were not addressed to or
intended for plaintiff and therefore did not form part of the telegram and that the Tagalog words
are not defamatory. The telegram sent through its facilities was received in its station at Legaspi
City. Nobody other than the operator manned the teletype machine which automatically receives
telegrams being transmitted. The said telegram was detached from the machine and placed inside
a sealed envelope and delivered to plaintiff, obviously as is. The additional words in Tagalog
were never noticed and were included in the telegram when delivered.
The trial court in finding for the plaintiff ruled as follows:

There is no question that the additional words in Tagalog are libelous. They
clearly impute a vice or defect of the plaintiff. Whether or not they were intended
for the plaintiff, the effect on the plaintiff is the same. Any person reading the
additional words in Tagalog will naturally think that they refer to the addressee,
the plaintiff. There is no indication from the face of the telegram that the
additional words in Tagalog were sent as a private joke between the operators of
the defendant.

The defendant is sued directly not as an employer. The business of the defendant
is to transmit telegrams. It will open the door to frauds and allow the defendant to
act with impunity if it can escape liability by the simple expedient of showing that
its employees acted beyond the scope of their assigned tasks.

The liability of the defendant is predicated not only on Article 33 of the Civil
Code of the Philippines but on the following articles of said Code:

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

ART. 20.-Every person who, contrary to law, wilfully or negligently causes

damage to another, shall indemnify the latter for the same.

There is sufficient publication of the libelous Tagalog words. The office file of the
defendant containing copies of telegrams received are open and held together only
by a metal fastener. Moreover, they are open to view and inspection by third
parties.

It follows that the plaintiff is entitled to damages and attorney's fees. The plaintiff
is a businessman. The libelous Tagalog words must have affected his business and
social standing in the community. The Court fixes the amount of P40,000.00 as
the reasonable amount of moral damages and the amount of P3,000.00 as
attorney's fee which the defendant should pay the plaintiff. (pp. 15-16, Record on
Appeal)

The respondent appellate court in its assailed decision confirming the aforegoing findings of the
lower court stated:

The proximate cause, therefore, resulting in injury to appellee, was the failure of
the appellant to take the necessary or precautionary steps to avoid the occurrence
of the humiliating incident now complained of. The company had not imposed
any safeguard against such eventualities and this void in its operating procedure
does not speak well of its concern for their clientele's interests. Negligence here is
very patent. This negligence is imputable to appellant and not to its employees.
 The claim that there was no publication of the libelous words in Tagalog is also
without merit. The fact that a carbon copy of the telegram was filed among other
telegrams and left to hang for the public to see, open for inspection by a third
party is sufficient publication. It would have been otherwise perhaps had the
telegram been placed and kept in a secured place where no one may have had a
chance to read it without appellee's permission.

The additional Tagalog words at the bottom of the telegram are, as correctly
found by the lower court, libelous per se, and from which malice may be
presumed in the absence of any showing of good intention and justifiable motive
on the part of the appellant. The law implies damages in this instance (Quemel vs.
Court of Appeals, L-22794, January 16, 1968; 22 SCRA 44). The award of
P40,000.00 as moral damages is hereby reduced to P15,000.00 and for attorney's
fees the amount of P2,000.00 is awarded. (pp. 22-23, record)

After a motion for reconsideration was denied by the appellate court, petitioner came to Us with
the following:

ASSIGNMENT OF ERRORS

The Honorable Court of Appeals erred in holding that Petitioner-employer should

answer directly and primarily for the civil liability arising from the criminal act of
its employee.

II

The Honorable Court of Appeals erred in holding that there was sufficient
publication of the alleged libelous telegram in question, as contemplated by law
on libel.

III

The Honorable Court of Appeals erred in holding that the liability of petitioner-
company-employer is predicated on Articles 19 and 20 of the Civil Code, Articles
on Human Relations.

IV

The Honorable Court of Appeals erred in awarding Atty's. fees. (p. 4, Record)

Petitioner's contentions do not merit our consideration. The action for damages was filed in the
lower court directly against respondent corporation not as an employer subsidiarily liable under
the provisions of Article 1161 of the New Civil Code in relation to Art. 103 of the Revised Penal
Code. The cause of action of the private respondent is based on Arts. 19 and 20 of the New Civil
Code (supra). As well as on respondent's breach of contract thru the negligence of its own
employees. 1

Petitioner is a domestic corporation engaged in the business of receiving and transmitting

messages. Everytime a person transmits a message through the facilities of the petitioner, a
contract is entered into. Upon receipt of the rate or fee fixed, the petitioner undertakes to transmit
the message accurately. There is no question that in the case at bar, libelous matters were
included in the message transmitted, without the consent or knowledge of the sender. There is a
clear case of breach of contract by the petitioner in adding extraneous and libelous matters in the
message sent to the private respondent. As a corporation, the petitioner can act only through its
employees. Hence the acts of its employees in receiving and transmitting messages are the acts
of the petitioner. To hold that the petitioner is not liable directly for the acts of its employees in
the pursuit of petitioner's business is to deprive the general public availing of the services of the
petitioner of an effective and adequate remedy. In most cases, negligence must be proved in
order that plaintiff may recover. However, since negligence may be hard to substantiate in some
cases, we may apply the doctrine of RES IPSA LOQUITUR (the thing speaks for itself), by
considering the presence of facts or circumstances surrounding the injury.

WHEREFORE, premises considered, the judgment of the appellate court is hereby AFFIRMED.

SO ORDERED.

Feria (Chairman), Fernan, Alampay, and Gutierrez, Jr., JJ., concur.

Footnotes

1 In contracts the negligence of the employee (servant) is the negligence of the employer (master).
This is the master and servant rule.
G.R. No. L-17396 May 30, 1962

CECILIO PE, ET AL., plaintiffs-appellants,

vs.
ALFONSO PE, defendant-appellee.

Cecilio L. Pe for and in his own behalf as plaintiff-appellant.

Leodegario L. Mogol for defendant-appellee.

BAUTISTA ANGELO, J.:

Plaintiffs brought this action before the Court of First Instance of Manila to recover moral,
compensatory, exemplary and corrective damages in the amount of P94,000.00 exclusive of
attorney's fees and expenses of litigation.

Defendant, after denying some allegations contained in the complaint, set up as a defense that the
facts alleged therein, even if true, do not constitute a valid cause of action.

After trial, the lower court, after finding that defendant had carried on a love affair with one
Lolita Pe, an unmarried woman, being a married man himself, declared that defendant cannot be
held liable for moral damages it appearing that plaintiffs failed to prove that defendant, being
aware of his marital status, deliberately and in bad faith tried to win Lolita's affection. So it
rendered decision dismissing the complaint.1äwphï1.ñët

Plaintiffs brought this case on appeal before this Court on the ground that the issues involved are
purely of law.

The facts as found by the trial court are: Plaintiffs are the parents, brothers and sisters of one
Lolita Pe. At the time of her disappearance on April 14, 1957, Lolita was 24 years old and
unmarried. Defendant is a married man and works as agent of the La Perla Cigar and Cigarette
Factory. He used to stay in the town of Gasan, Marinduque, in connection with his aforesaid
occupation. Lolita was staying with her parents in the same town. Defendant was an adopted son
of a Chinaman named Pe Beco, a collateral relative of Lolita's father. Because of such fact and
the similarity in their family name, defendant became close to the plaintiffs who regarded him as
a member of their family. Sometime in 1952, defendant frequented the house of Lolita on the
pretext that he wanted her to teach him how to pray the rosary. The two eventually fell in love
with each other and conducted clandestine trysts not only in the town of Gasan but also in Boac
where Lolita used to teach in a barrio school. They exchanged love notes with each other the
contents of which reveal not only their infatuation for each other but also the extent to which
they had carried their relationship. The rumors about their love affairs reached the ears of Lolita's
parents sometime, in 1955, and since then defendant was forbidden from going to their house
and from further seeing Lolita. The plaintiffs even filed deportation proceedings against
defendant who is a Chinese national. The affair between defendant and Lolita continued
nonetheless.
Sometime in April, 1957, Lolita was staying with her brothers and sisters at their residence at 54-
B España Extension, Quezon City. On April 14, 1957, Lolita disappeared from said house. After
she left, her brothers and sisters checked up her thing and found that Lolita's clothes were gone.
However, plaintiffs found a note on a crumpled piece of paper inside Lolita's aparador. Said
note, written on a small slip of paper approximately 4" by 3" in size, was in a handwriting
recognized to be that of defendant's. In English it reads:

Honey, suppose I leave here on Sunday night, and that's 13th of this month and we will
have a date on the 14th, that's Monday morning at 10 a.m.

Reply

Love

The disappearance of Lolita was reported to the police authorities and the NBI but up to the
present there is no news or trace of her whereabouts.

The present action is based on Article 21 of the New Civil Code which provides:

Any person who wilfully causes loss or injury to another in a manner which is contrary to
morals, good customs or public policy shall compensate the latter for the damage.

There is no doubt that the claim of plaintiffs for damages is based on the fact that defendant,
being a married man, carried on a love affair with Lolita Pe thereby causing plaintiffs injury in a
manner contrary to morals, good customs and public policy. But in spite of the fact that plaintiffs
have clearly established that in illicit affair was carried on between defendant and Lolita which
caused great damage to the name and reputation of plaintiffs who are her parents, brothers and
sisters, the trial court considered their complaint not actionable for the reason that they failed to
prove that defendant deliberately and in bad faith tried to win Lolita's affection Thus, the trial
court said: "In the absence of proof on this point, the court may not presume that it was the
defendant who deliberately induced such relationship. We cannot be unmindful of the
uncertainties and sometimes inexplicable mysteries of the human emotions. It is a possibility that
the defendant and Lolita simply fell in love with each other, not only without any desire on their
part, but also against their better judgment and in full consciousness of what it will bring to both
of them. This is specially so with respect to Lolita, being an unmarried woman, falling in love
with defendant who is a married man."

We disagree with this view. The circumstances under which defendant tried to win Lolita's
affection cannot lead, to any other conclusion than that it was he who, thru an ingenious scheme
or trickery, seduced the latter to the extent of making her fall in love with him. This is shown by
the fact that defendant frequented the house of Lolita on the pretext that he wanted her to teach
him how to pray the rosary. Because of the frequency of his visits to the latter's family who was
allowed free access because he was a collateral relative and was considered as a member of her
family, the two eventually fell in love with each other and conducted clandestine love affairs not
only in Gasan but also in Boac where Lolita used to teach in a barrio school. When the rumors
about their illicit affairs reached the knowledge of her parents, defendant was forbidden from
going to their house and even from seeing Lolita. Plaintiffs even filed deportation proceedings
against defendant who is a Chinese national. Nevertheless, defendant continued his love affairs
with Lolita until she disappeared from the parental home. Indeed, no other conclusion can be
drawn from this chain of events than that defendant not only deliberately, but through a clever
strategy, succeeded in winning the affection and love of Lolita to the extent of having illicit
relations with her. The wrong he has caused her and her family is indeed immeasurable
considering the fact that he is a married man. Verily, he has committed an injury to Lolita's
family in a manner contrary to morals, good customs and public policy as contemplated in
Article 21 of the new Civil Code.

WHEREFORE, the decision appealed from is reversed. Defendant is hereby sentenced to pay the
plaintiffs the sum of P5,000.00 as damages and P2,000.00 as attorney's fees and expenses of
litigations. Costs against appellee.

Padilla, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes and Dizon, JJ., concur.
G.R. No. 97336 February 19, 1993

GASHEM SHOOKAT BAKSH, petitioner,

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

Public Attorney's Office for petitioner.

Corleto R. Castro for private respondent.

DAVIDE, JR., J.:

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

The antecedents of this case are not complicated:

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

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

After conducting a pre-trial on 25 January 1988, the trial court issued a Pre-Trial Order4 embodying the
stipulated facts which the parties had agreed upon, to wit:

1. That the plaintiff is single and resident (sic) of Bañaga, Bugallon, Pangasinan, while
the defendant is single, Iranian citizen and resident (sic) of Lozano Apartment, Guilig,
Dagupan City since September 1, 1987 up to the present;

2. That the defendant is presently studying at Lyceum Northwestern, Dagupan City,

College of Medicine, second year medicine proper;

3. That the plaintiff is (sic) an employee at Mabuhay Luncheonette , Fernandez Avenue,

Dagupan City since July, 1986 up to the present and a (sic) high school graduate;

4. That the parties happened to know each other when the manager of the Mabuhay
Luncheonette, Johhny Rabino introduced the defendant to the plaintiff on August 3,
1986.

After trial on the merits, the lower court, applying Article 21 of the Civil Code, rendered on 16 October
1989 a decision5 favoring the private respondent. The petitioner was thus ordered to pay the latter
damages and attorney's fees; the dispositive portion of the decision reads:

IN THE LIGHT of the foregoing consideration, judgment is hereby rendered in favor of

the plaintiff and against the defendant.

1. Condemning (sic) the defendant to pay the plaintiff the sum of twenty thousand
(P20,000.00) pesos as moral damages.

2. Condemning further the defendant to play the plaintiff the sum of three thousand
(P3,000.00) pesos as atty's fees and two thousand (P2,000.00) pesos at (sic) litigation
expenses and to pay the costs.

3. All other claims are denied.6

The decision is anchored on the trial court's findings and conclusions that (a) petitioner and private
respondent were lovers, (b) private respondent is not a woman of loose morals or questionable virtue who
readily submits to sexual advances, (c) petitioner, through machinations, deceit and false pretenses,
promised to marry private respondent, d) because of his persuasive promise to marry her, she allowed
herself to be deflowered by him, (e) by reason of that deceitful promise, private respondent and her
parents — in accordance with Filipino customs and traditions — made some preparations for the wedding
that was to be held at the end of October 1987 by looking for pigs and chickens, inviting friends and
relatives and contracting sponsors, (f) petitioner did not fulfill his promise to marry her and (g) such acts
of the petitioner, who is a foreigner and who has abused Philippine hospitality, have offended our sense of
morality, good customs, culture and traditions. The trial court gave full credit to the private respondent's
testimony because, inter alia, she would not have had the temerity and courage to come to court and
expose her honor and reputation to public scrutiny and ridicule if her claim was false.7
The above findings and conclusions were culled from the detailed summary of the evidence for the
private respondent in the foregoing decision, digested by the respondent Court as follows:

According to plaintiff, who claimed that she was a virgin at the time and that she never
had a boyfriend before, defendant started courting her just a few days after they first met.
He later proposed marriage to her several times and she accepted his love as well as his
proposal of marriage on August 20, 1987, on which same day he went with her to her
hometown of Bañaga, Bugallon, Pangasinan, as he wanted to meet her parents and inform
them of their relationship and their intention to get married. The photographs Exhs. "A"
to "E" (and their submarkings) of defendant with members of plaintiff's family or with
plaintiff, were taken that day. Also on that occasion, defendant told plaintiffs parents and
brothers and sisters that he intended to marry her during the semestral break in October,
1987, and because plaintiff's parents thought he was good and trusted him, they agreed to
his proposal for him to marry their daughter, and they likewise allowed him to stay in
their house and sleep with plaintiff during the few days that they were in Bugallon. When
plaintiff and defendant later returned to Dagupan City, they continued to live together in
defendant's apartment. However, in the early days of October, 1987, defendant would tie
plaintiff's hands and feet while he went to school, and he even gave her medicine at 4
o'clock in the morning that made her sleep the whole day and night until the following
day. As a result of this live-in relationship, plaintiff became pregnant, but defendant gave
her some medicine to abort the fetus. Still plaintiff continued to live with defendant and
kept reminding him of his promise to marry her until he told her that he could not do so
because he was already married to a girl in Bacolod City. That was the time plaintiff left
defendant, went home to her parents, and thereafter consulted a lawyer who accompanied
her to the barangay captain in Dagupan City. Plaintiff, her lawyer, her godmother, and a
barangay tanod sent by the barangay captain went to talk to defendant to still convince
him to marry plaintiff, but defendant insisted that he could not do so because he was
already married to a girl in Bacolod City, although the truth, as stipulated by the parties at
the pre-trial, is that defendant is still single.

Plaintiff's father, a tricycle driver, also claimed that after defendant had informed them of
his desire to marry Marilou, he already looked for sponsors for the wedding, started
preparing for the reception by looking for pigs and chickens, and even already invited
many relatives and friends to the forthcoming wedding. 8

Petitioner appealed the trial court's decision to the respondent Court of Appeals which docketed the case
as CA-G.R. CV No. 24256. In his Brief,9 he contended that the trial court erred (a) in not dismissing the
case for lack of factual and legal basis and (b) in ordering him to pay moral damages, attorney's fees,
litigation expenses and costs.

On 18 February 1991, respondent Court promulgated the challenged decision 10 affirming in toto the trial
court's ruling of 16 October 1989. In sustaining the trial court's findings of fact, respondent Court made
the following analysis:

First of all, plaintiff, then only 21 years old when she met defendant who was already 29
years old at the time, does not appear to be a girl of loose morals. It is uncontradicted that
she was a virgin prior to her unfortunate experience with defendant and never had
boyfriend. She is, as described by the lower court, a barrio lass "not used and accustomed
to trend of modern urban life", and certainly would (sic) not have allowed
"herself to be deflowered by the defendant if there was no persuasive promise made by
 the defendant to marry her." In fact, we agree with the lower court that plaintiff and
defendant must have been sweethearts or so the plaintiff must have thought because of
the deception of defendant, for otherwise, she would not have allowed herself to be
photographed with defendant in public in so (sic) loving and tender poses as those
depicted in the pictures Exhs. "D" and "E". We cannot believe, therefore, defendant's
pretense that plaintiff was a nobody to him except a waitress at the restaurant where he
usually ate. Defendant in fact admitted that he went to plaintiff's hometown of Bañaga,
Bugallon, Pangasinan, at least thrice; at (sic) the town fiesta on February 27, 1987 (p. 54,
tsn May 18, 1988), at (sic) a beach party together with the manager and employees of the
Mabuhay Luncheonette on March 3, 1987 (p. 50, tsn id.), and on April 1, 1987 when he
allegedly talked to plaintiff's mother who told him to marry her daughter (pp. 55-56, tsn
id.). Would defendant have left Dagupan City where he was involved in the serious study
of medicine to go to plaintiff's hometown in Bañaga, Bugallon, unless there was (sic)
some kind of special relationship between them? And this special relationship must
indeed have led to defendant's insincere proposal of marriage to plaintiff, communicated
not only to her but also to her parents, and (sic) Marites Rabino, the owner of the
restaurant where plaintiff was working and where defendant first proposed marriage to
her, also knew of this love affair and defendant's proposal of marriage to plaintiff, which
she declared was the reason why plaintiff resigned from her job at the restaurant after she
had accepted defendant's proposal (pp. 6-7, tsn March 7, 1988).

Upon the other hand, appellant does not appear to be a man of good moral character and
must think so low and have so little respect and regard for Filipino women that he openly
admitted that when he studied in Bacolod City for several years where he finished his
B.S. Biology before he came to Dagupan City to study medicine, he had a common-law
wife in Bacolod City. In other words, he also lived with another woman in Bacolod City
but did not marry that woman, just like what he did to plaintiff. It is not surprising, then,
that he felt so little compunction or remorse in pretending to love and promising to marry
plaintiff, a young, innocent, trustful country girl, in order to satisfy his lust on her. 11

and then concluded:

In sum, we are strongly convinced and so hold that it was defendant-appellant's

fraudulent and deceptive protestations of love for and promise to marry plaintiff that
made her surrender her virtue and womanhood to him and to live with him on the honest
and sincere belief that he would keep said promise, and it was likewise these (sic) fraud
and deception on appellant's part that made plaintiff's parents agree to their daughter's
living-in with him preparatory to their supposed marriage. And as these acts of appellant
are palpably and undoubtedly against morals, good customs, and public policy, and are
even gravely and deeply derogatory and insulting to our women, coming as they do from
a foreigner who has been enjoying the hospitality of our people and taking advantage of
the opportunity to study in one of our institutions of learning, defendant-appellant should
indeed be made, under Art. 21 of the Civil Code of the Philippines, to compensate for the
moral damages and injury that he had caused plaintiff, as the lower court ordered him to
do in its decision in this case. 12

Unfazed by his second defeat, petitioner filed the instant petition on 26 March 1991; he raises therein the
single issue of whether or not Article 21 of the Civil Code applies to the case at bar. 13
It is petitioner's thesis that said Article 21 is not applicable because he had not committed any moral
wrong or injury or violated any good custom or public policy; he has not professed love or proposed
marriage to the private respondent; and he has never maltreated her. He criticizes the trial court for
liberally invoking Filipino customs, traditions and culture, and ignoring the fact that since he is a
foreigner, he is not conversant with such Filipino customs, traditions and culture. As an Iranian Moslem,
he is not familiar with Catholic and Christian ways. He stresses that even if he had made a promise to
marry, the subsequent failure to fulfill the same is excusable or tolerable because of his Moslem
upbringing; he then alludes to the Muslim Code which purportedly allows a Muslim to take four (4) wives
and concludes that on the basis thereof, the trial court erred in ruling that he does not posses good moral
character. Moreover, his controversial "common law life" is now his legal wife as their marriage had been
solemnized in civil ceremonies in the Iranian Embassy. As to his unlawful cohabitation with the private
respondent, petitioner claims that even if responsibility could be pinned on him for the live-in
relationship, the private respondent should also be faulted for consenting to an illicit arrangement. Finally,
petitioner asseverates that even if it was to be assumed arguendo that he had professed his love to the
private respondent and had also promised to marry her, such acts would not be actionable in view of the
special circumstances of the case. The mere breach of promise is not actionable. 14

On 26 August 1991, after the private respondent had filed her Comment to the petition and the petitioner
had filed his Reply thereto, this Court gave due course to the petition and required the parties to submit
their respective Memoranda, which they subsequently complied with.

As may be gleaned from the foregoing summation of the petitioner's arguments in support of his thesis, it
is clear that questions of fact, which boil down to the issue of the credibility of witnesses, are also raised.
It is the rule in this jurisdiction that appellate courts will not disturb the trial court's findings as to the
credibility of witnesses, the latter court having heard the witnesses and having had the opportunity to
observe closely their deportment and manner of testifying, unless the trial court had plainly overlooked
facts of substance or value which, if considered, might affect the result of the case. 15

Petitioner has miserably failed to convince Us that both the appellate and trial courts had overlooked any
fact of substance or values which could alter the result of the case.

Equally settled is the rule that only questions of law may be raised in a petition for review on certiorari
under Rule 45 of the Rules of Court. It is not the function of this Court to analyze or weigh all over again
the evidence introduced by the parties before the lower court. There are, however, recognized exceptions
to this rule. Thus, in Medina vs. Asistio, Jr., 16 this Court took the time, again, to enumerate these
exceptions:

xxx xxx xxx

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

conjectures (Joaquin v. Navarro, 93 Phil. 257 [1953]); (2) When the inference made is
manifestly mistaken, absurb or impossible (Luna v. Linatok, 74 Phil. 15 [1942]); (3)
Where there is a grave abuse of discretion (Buyco v. People, 95 Phil. 453 [1955]); (4)
When the judgment is based on a misapprehension of facts (Cruz v. Sosing,
L-4875, Nov. 27, 1953); (5) When the findings of fact are conflicting (Casica v.
Villaseca, L-9590 Ap. 30, 1957; unrep.) (6) When the Court of Appeals, in making its
findings, went beyond the issues of the case and the same is contrary to the admissions of
both appellate and appellee (Evangelista v. Alto Surety and Insurance Co., 103 Phil. 401
[1958]);
(7) The findings of the Court of Appeals are contrary to those of the trial court (Garcia v.
 Court of Appeals, 33 SCRA 622 [1970]; Sacay v. Sandiganbayan, 142 SCRA 593
[1986]); (8) When the findings of fact are conclusions without citation of specific
evidence on which they are based (Ibid.,); (9) When the facts set forth in the petition as
well as in the petitioners main and reply briefs are not disputed by the respondents
(Ibid.,); and (10) The finding of fact of the Court of Appeals is premised on the supposed
absence of evidence and is contradicted by the evidence on record (Salazar v. Gutierrez,
33 SCRA 242 [1970]).

Petitioner has not endeavored to joint out to Us the existence of any of the above quoted exceptions in this
case. Consequently, the factual findings of the trial and appellate courts must be respected.

And now to the legal issue.

The existing rule is that a breach of promise to marry per se is not an actionable wrong. 17 Congress
deliberately eliminated from the draft of the New Civil Code the provisions that would have made it so.
The reason therefor is set forth in the report of the Senate Committees on the Proposed Civil Code, from
which We quote:

The elimination of this chapter is proposed. That breach of promise to marry is not
actionable has been definitely decided in the case of De Jesus vs. Syquia. 18 The history
of breach of promise suits in the United States and in England has shown that no other
action lends itself more readily to abuse by designing women and unscrupulous men. It is
this experience which has led to the abolition of rights of action in the so-called Heart
Balm suits in many of the American states. . . . 19

This notwithstanding, the said Code contains a provision, Article 21, which is designed to expand the
concept of torts or quasi-delict in this jurisdiction by granting adequate legal remedy for the untold
number of moral wrongs which is impossible for human foresight to specifically enumerate and punish in
the statute books. 20

As the Code Commission itself stated in its Report:

But the Code Commission had gone farther than the sphere of wrongs defined or
determined by positive law. Fully sensible that there are countless gaps in the statutes,
which leave so many victims of moral wrongs helpless, even though they have actually
suffered material and moral injury, the Commission has deemed it necessary, in the
interest of justice, to incorporate in the proposed Civil Code the following rule:

Art. 23. Any person who wilfully causes loss or injury to another in a
manner that is contrary to morals, good customs or public policy shall
compensate the latter for the damage.

An example will illustrate the purview of the foregoing norm: "A" seduces the nineteen-
year old daughter of "X". A promise of marriage either has not been made, or can not be
proved. The girl becomes pregnant. Under the present laws, there is no crime, as the girl
is above nineteen years of age. Neither can any civil action for breach of promise of
marriage be filed. Therefore, though the grievous moral wrong has been committed, and
though the girl and family have suffered incalculable moral damage, she and her parents
cannot bring action for damages. But under the proposed article, she and her parents
would have such a right of action.
 Thus at one stroke, the legislator, if the forgoing rule is approved, would vouchsafe
adequate legal remedy for that untold number of moral wrongs which it is impossible for
human foresight to provide for specifically in the statutes. 21

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

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

is limited to negligent acts or omissions and excludes the notion of willfulness or intent. Quasi-
delict, known in Spanish legal treatises as culpa aquiliana, is a civil law concept while torts is an
Anglo-American or common law concept. Torts is much broader than culpa aquiliana because it
includes not only negligence, but international criminal acts as well such as assault and battery,
false imprisonment and deceit. In the general scheme of the Philippine legal system envisioned by
the Commission responsible for drafting the New Civil Code, intentional and malicious acts, with
certain exceptions, are to be governed by the Revised Penal Code while negligent acts or
omissions are to be covered by Article 2176 of the Civil Code. 22 In between these opposite
spectrums are injurious acts which, in the absence of Article 21, would have been beyond redress.
Thus, Article 21 fills that vacuum. It is even postulated that together with Articles 19 and 20 of
the Civil Code, Article 21 has greatly broadened the scope of the law on civil wrongs; it has
become much more supple and adaptable than the Anglo-American law on torts. 23

In the light of the above laudable purpose of Article 21, We are of the opinion, and so hold, that where a
man's promise to marry is in fact the proximate cause of the acceptance of his love by a woman and his
representation to fulfill that promise thereafter becomes the proximate cause of the giving of herself unto
him in a sexual congress, proof that he had, in reality, no intention of marrying her and that the promise
was only a subtle scheme or deceptive device to entice or inveigle her to accept him and to obtain her
consent to the sexual act, could justify the award of damages pursuant to Article 21 not because of such
promise to marry but because of the fraud and deceit behind it and the willful injury to her honor and
reputation which followed thereafter. It is essential, however, that such injury should have been
committed in a manner contrary to morals, good customs or public policy.

In the instant case, respondent Court found that it was the petitioner's "fraudulent and deceptive
protestations of love for and promise to marry plaintiff that made her surrender her virtue and
womanhood to him and to live with him on the honest and sincere belief that he would keep said promise,
and it was likewise these fraud and deception on appellant's part that made plaintiff's parents agree to their
daughter's living-in with him preparatory to their supposed marriage." 24 In short, the private respondent
surrendered her virginity, the cherished possession of every single Filipina, not because of lust but
because of moral seduction — the kind illustrated by the Code Commission in its example earlier
adverted to. The petitioner could not be held liable for criminal seduction punished under either Article
337 or Article 338 of the Revised Penal Code because the private respondent was above eighteen (18)
years of age at the time of the seduction.

Prior decisions of this Court clearly suggest that Article 21 may be applied in a breach of promise to
marry where the woman is a victim of moral seduction. Thus, in Hermosisima vs. Court of Appeals,25
this Court denied recovery of damages to the woman because:
 . . . we find ourselves unable to say that petitioner is morally guilty of seduction, not only
because he is approximately ten (10) years younger than the complainant — who was
around thirty-six (36) years of age, and as highly enlightened as a former high school
teacher and a life insurance agent are supposed to be — when she became intimate with
petitioner, then a mere apprentice pilot, but, also, because the court of first instance found
that, complainant "surrendered herself" to petitioner because, "overwhelmed by her love"
for him, she "wanted to bind" him by having a fruit of their engagement even before they
had the benefit of clergy.

In Tanjanco vs. Court of Appeals, 26 while this Court likewise hinted at possible recovery if there had
been moral seduction, recovery was eventually denied because We were not convinced that such
seduction existed. The following enlightening disquisition and conclusion were made in the said case:

The Court of Appeals seem to have overlooked that the example set forth in the Code
Commission's memorandum refers to a tort upon a minor who had been seduced. The
essential feature is seduction, that in law is more than mere sexual intercourse, or a
breach of a promise of marriage; it connotes essentially the idea of deceit, enticement,
superior power or abuse of confidence on the part of the seducer to which the woman has
yielded (U.S. vs. Buenaventura, 27 Phil. 121; U.S. vs. Arlante, 9 Phil. 595).

It has been ruled in the Buenaventura case (supra) that —

To constitute seduction there must in all cases be some sufficient

promise or inducement and the woman must yield because of the promise
or other inducement. If she consents merely from carnal lust and the
intercourse is from mutual desire, there is no seduction (43 Cent. Dig. tit.
Seduction, par. 56) She must be induced to depart from the path of virtue
by the use of some species of arts, persuasions and wiles, which are
calculated to have and do have that effect, and which result in her person
to ultimately submitting her person to the sexual embraces of her seducer
(27 Phil. 123).

And in American Jurisprudence we find:

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

or deception is the essence of the injury; and a mere proof of intercourse
is insufficient to warrant a recovery.

Accordingly it is not seduction where the willingness arises out of sexual

desire of curiosity of the female, and the defendant merely affords her
the needed opportunity for the commission of the act. It has been
emphasized that to allow a recovery in all such cases would tend to the
demoralization of the female sex, and would be a reward for unchastity
by which a class of adventuresses would be swift to profit. (47 Am. Jur.
662)

xxx xxx xxx

Over and above the partisan allegations, the fact stand out that for one whole year, from
1958 to 1959, the plaintiff-appellee, a woman of adult age, maintain intimate sexual
 relations with appellant, with repeated acts of intercourse. Such conduct is incompatible
with the idea of seduction. Plainly there is here voluntariness and mutual passion; for had
the appellant been deceived, had she surrendered exclusively because of the deceit, artful
persuasions and wiles of the defendant, she would not have again yielded to his
embraces, much less for one year, without exacting early fulfillment of the alleged
promises of marriage, and would have cut short all sexual relations upon finding that
defendant did not intend to fulfill his defendant did not intend to fulfill his promise.
Hence, we conclude that no case is made under article 21 of the Civil Code, and no other
cause of action being alleged, no error was committed by the Court of First Instance in
dismissing the complaint. 27

In his annotations on the Civil Code, 28 Associate Justice Edgardo L. Paras, who recently retired from
this Court, opined that in a breach of promise to marry where there had been carnal knowledge, moral
damages may be recovered:

. . . if there be criminal or moral seduction, but not if the intercourse was due to mutual
lust. (Hermosisima vs. Court of Appeals,
L-14628, Sept. 30, 1960; Estopa vs. Piansay, Jr., L-14733, Sept. 30, 1960; Batarra vs.
Marcos, 7 Phil. 56 (sic); Beatriz Galang vs. Court of Appeals, et al., L-17248, Jan. 29,
1962). (In other words, if the CAUSE be the promise to marry, and the EFFECT be the
carnal knowledge, there is a chance that there was criminal or moral seduction, hence
recovery of moral damages will prosper. If it be the other way around, there can be no
recovery of moral damages, because here mutual lust has intervened). . . .

together with "ACTUAL damages, should there be any, such as the expenses for the wedding
presentations (See Domalagon v. Bolifer, 33 Phil. 471).

Senator Arturo M. Tolentino 29 is also of the same persuasion:

It is submitted that the rule in Batarra vs. Marcos, 30 still subsists, notwithstanding the
incorporation of the present article31 in the Code. The example given by the Code
Commission is correct, if there was seduction, not necessarily in the legal sense, but in
the vulgar sense of deception. But when the sexual act is accomplished without any
deceit or qualifying circumstance of abuse of authority or influence, but the woman,
already of age, has knowingly given herself to a man, it cannot be said that there is an
injury which can be the basis for indemnity.

But so long as there is fraud, which is characterized by willfulness (sic), the action lies.
The court, however, must weigh the degree of fraud, if it is sufficient to deceive the
woman under the circumstances, because an act which would deceive a girl sixteen years
of age may not constitute deceit as to an experienced woman thirty years of age. But so
long as there is a wrongful act and a resulting injury, there should be civil liability, even
if the act is not punishable under the criminal law and there should have been an acquittal
or dismissal of the criminal case for that reason.

We are unable to agree with the petitioner's alternative proposition to the effect that granting, for
argument's sake, that he did promise to marry the private respondent, the latter is nevertheless also at
fault. According to him, both parties are in pari delicto; hence, pursuant to Article 1412(1) of the Civil
Code and the doctrine laid down in Batarra vs. Marcos, 32 the private respondent cannot recover
damages from the petitioner. The latter even goes as far as stating that if the private respondent had
"sustained any injury or damage in their relationship, it is primarily because of her own doing, 33 for:

. . . She is also interested in the petitioner as the latter will become a doctor sooner or
later. Take notice that she is a plain high school graduate and a mere employee . . .
(Annex "C") or a waitress (TSN, p. 51, January 25, 1988) in a luncheonette and without
doubt, is in need of a man who can give her economic security. Her family is in dire need
of financial assistance. (TSN, pp. 51-53, May 18, 1988). And this predicament prompted
her to accept a proposition that may have been offered by the petitioner. 34

These statements reveal the true character and motive of the petitioner. It is clear that he harbors a
condescending, if not sarcastic, regard for the private respondent on account of the latter's ignoble birth,
inferior educational background, poverty and, as perceived by him, dishonorable employment. Obviously
then, from the very beginning, he was not at all moved by good faith and an honest motive. Marrying
with a woman so circumstances could not have even remotely occurred to him. Thus, his profession of
love and promise to marry were empty words directly intended to fool, dupe, entice, beguile and deceive
the poor woman into believing that indeed, he loved her and would want her to be his life's partner. His
was nothing but pure lust which he wanted satisfied by a Filipina who honestly believed that by accepting
his proffer of love and proposal of marriage, she would be able to enjoy a life of ease and security.
Petitioner clearly violated the Filipino's concept of morality and brazenly defied the traditional respect
Filipinos have for their women. It can even be said that the petitioner committed such deplorable acts in
blatant disregard of Article 19 of the Civil Code which directs every person to act with justice, give
everyone his due and observe honesty and good faith in the exercise of his rights and in the performance
of his obligations.

No foreigner must be allowed to make a mockery of our laws, customs and traditions.

The pari delicto rule does not apply in this case for while indeed, the private respondent may not have
been impelled by the purest of intentions, she eventually submitted to the petitioner in sexual congress not
out of lust, but because of moral seduction. In fact, it is apparent that she had qualms of conscience about
the entire episode for as soon as she found out that the petitioner was not going to marry her after all, she
left him. She is not, therefore, in pari delicto with the petitioner. Pari delicto means "in equal fault; in a
similar offense or crime; equal in guilt or in legal fault." 35 At most, it could be conceded that she is
merely in delicto.

Equity often interferes for the relief of the less guilty of the parties, where his
transgression has been brought about by the imposition of undue influence of the party on
whom the burden of the original wrong principally rests, or where his consent to the
transaction was itself procured by
fraud. 36

In Mangayao vs. Lasud, 37 We declared:

Appellants likewise stress that both parties being at fault, there should be no action by
one against the other (Art. 1412, New Civil Code). This rule, however, has been
interpreted as applicable only where the fault on both sides is, more or less, equivalent. It
does not apply where one party is literate or intelligent and the other one is not. (c.f.
Bough vs. Cantiveros, 40 Phil. 209).
We should stress, however, that while We find for the private respondent, let it not be said that this Court
condones the deplorable behavior of her parents in letting her and the petitioner stay together in the same
room in their house after giving approval to their marriage. It is the solemn duty of parents to protect the
honor of their daughters and infuse upon them the higher values of morality and dignity.

WHEREFORE, finding no reversible error in the challenged decision, the instant petition is hereby
DENIED, with costs against the petitioner.

SO ORDERED.

Feliciano, Bidin, Romero and Melo, JJ., concur.

Gutierrez, Jr., J., is on leave.

G.R. No. 101749 July 10, 1992

CONRADO BUNAG, JR., petitioner,

vs.
HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO, respondents.

REGALADO, J.:

Petitioner appeals for the reversal of the decision 1 of respondent Court of Appeals promulgated on May
17, 1991 in CA-G.R. CV No. 07054, entitled "Zenaida B. Cirilo vs. Conrado Bunag, Sr. and Conrado
Bunag, Jr.," which affirmed in toto the decision of the Regional Trial Court, Branch XI at Bacoor, Cavite,
and, implicitly, respondent court's resolution of September 3, 1991 2 denying petitioner's motion for
reconsideration.

Respondent court having assiduously discussed the salient antecedents of this case, vis-a-vis the factual
findings of the court below, the evidence of record and the contentions of the parties, it is appropriate that
its findings, which we approve and adopt, be extensively reproduced hereunder:

Based on the evidence on record, the following facts are considered indisputable: On the
afternoon of September 8, 1973, defendant-appellant Bunag, Jr. brought plaintiff-
appellant to a motel or hotel where they had sexual intercourse. Later that evening, said
defendant-appellant brought plaintiff-appellant to the house of his grandmother Juana de
Leon in Pamplona, Las Piñas, Metro Manila, where they lived together as husband and
wife for 21 days, or until September 29, 1973. On September 10, 1973, defendant-
appellant Bunag, Jr. and plaintiff-appellant filed their respective applications for a
marriage license with the Office of the Local Civil Registrar of Bacoor, Cavite. On
October 1, 1973, after leaving plaintiff-appellant, defendant-appellant Bunag, Jr. filed an
affidavit withdrawing his application for a marriage license.

Plaintiff-appellant contends that on the afternoon of September 8, 1973, defendant-

appellant Bunag, Jr., together with an unidentified male companion, abducted her in the
vicinity of the San Juan de Dios Hospital in Pasay City and brought her to a motel where
she was raped. The court a quo, which adopted her evidence, summarized the same
which we paraphrased as follows:

Plaintiff was 26 years old on November 5, 1974 when she testified,

single and had finished a college course in Commerce (t.s.n., p. 4, Nov.
5, 1974). It appears that on September 8, 1973, at about 4:00 o'clock in
the afternoon, while she was walking along Figueras Street, Pasay City
on her way to the San Juan de Dios Canteen to take her snack, defendant,
Conrado Bunag, Jr., came riding in a car driven by a male companion.
Plaintiff and defendant Bunag, Jr. were sweethearts, but two weeks
before September 8, 1973, they had a quarrel, and Bunag, Jr. wanted to
talk matters over with plaintiff, so that he invited her to take their
merienda at the Aristocrat Restaurant in Manila instead of at the San
Juan de Dios Canteen, to which plaintiff obliged, as she believed in his
sincerity (t.s.n., pp. 8-10, Nov. 5, 1974).
Plaintiff rode in the car and took the front seat beside the driver while
Bunag, Jr. seated himself by her right side. The car travelled north on its
way to the Aristocrat Restaurant but upon reaching San Juan Street in
Pasay City, it turned abruptly to the right, to which plaintiff protested,
but which the duo ignored and instead threatened her not to make any
noise as they were ready to die and would bump the car against the post
if she persisted. Frightened and silenced, the car travelled its course thru
F.B. Harrison Boulevard until they reached a motel. Plaintiff was then
pulled and dragged from the car against her will, and amidst her cries and
pleas. In spite of her struggle she was no match to the joint strength of
the two male combatants because of her natural weakness being a
woman and her small stature. Eventually, she was brought inside the
hotel where the defendant Bunag, Jr. deflowered her against her will and
consent. She could not fight back and repel the attack because after
Bunag, Jr. had forced her to lie down and embraced her, his companion
held her two feet, removed her panty, after which he left. Bunag, Jr.
threatened her that he would ask his companion to come back and hold
her feet if she did not surrender her womanhood to him, thus he
succeeded in feasting on her virginity. Plaintiff described the pains she
felt and how blood came out of her private parts after her vagina was
penetrated by the penis of the defendant Bunag, Jr. (t.s.n. pp. 17-24, Nov.
5, 1974).

After that outrage on her virginity, plaintiff asked Bunag, Jr. once more
to allow her to go home but the latter would not consent and stated that
he would only let her go after they were married as he intended to marry
her, so much so that she promised not to make any scandal and to marry
him. Thereafter, they took a taxi together after the car that they used had
already gone, and proceeded to the house of Juana de Leon, Bunag, Jr.'s
grandmother in Pamplona, Las Piñas, Metro Manila where they arrived
at 9:30 o'clock in the evening (t.s.n., p. 26, Nov. 5, 1974). At about ten
(10) o'clock that same evening, defendant Conrado Bunag, Sr., father of
Bunag, Jr. arrived and assured plaintiff that the following day which was
a Monday, she and Bunag, Jr. would go to Bacoor, to apply for a
marriage license, which they did. They filed their applications for
marriage license (Exhibits "A" and "C") and after that plaintiff and
defendant Bunag, Jr. returned to the house of Juana de Leon and lived
there as husband and wife from September 8, 1973 to September 29,
1973.

On September 29, 1973 defendant Bunag, Jr. left and never returned,
humiliating plaintiff and compelled her to go back to her parents on
October 3, 1973. Plaintiff was ashamed when she went home and could
not sleep and eat because of the deception done against her by
defendants-appellants (t.s.n., p. 35, Nov. 5, 1974).

The testimony of plaintiff was corroborated in toto by her uncle,

Vivencio Bansagan who declared that on September 8, 1973 when
plaintiff failed to arrive home at 9:00 o'clock in the evening, his sister
who is the mother of plaintiff asked him to look for her but his efforts
 proved futile, and he told his sister that plaintiff might have married
(baka nag-asawa, t.s.n., pp. 5-6, March 18, 1976). However, in the
afternoon of the next day (Sunday), his sister told him that Francisco
Cabrera, accompanied by barrio captain Jacinto Manalili of Ligas,
Bacoor, Cavite, informed her that plaintiff and Bunag, Jr. were in
Cabrera's house, so that her sister requested him to go and see the
plaintiff, which he did, and at the house of Mrs. Juana de Leon in
Pamplona, Las Piñas, Metro Manila he met defendant Conrado Bunag,
Sr., who told him, "Pare, the children are here already. Let us settle the
matter and have them married."

He conferred with plaintiff who told him that as she had already lost her honor, she
would bear her sufferings as Boy Bunag, Jr. and his father promised they would be
married.

Defendants-appellants, on the other hand, deny that defendant-appellant Conrado Bunag,

Jr. abducted and raped plaintiff-appellant on September 8, 1973. On the contrary,
plaintiff-appellant and defendant-appellant Bunag, Jr. eloped on that date because of the
opposition of the latter's father to their relationship.

Defendant-appellants claim that defendant-appellant Bunag, Jr. and plaintiff-appellant

had earlier made plans to elope and get married, and this fact was known to their friends,
among them, Architect Chito Rodriguez. The couple made good their plans to elope on
the afternoon of September 8, 1973, when defendant-appellant Bunag, Jr., accompanied
by his friend Guillermo Ramos, Jr., met plaintiff-appellant and her officemate named
Lydia in the vicinity of the San Juan de Dios Hospital. The foursome then proceeded to
(the) aforesaid hospital's canteen where they had some snacks. Later, Guillermo Ramos,
Jr. took Lydia to Quirino Avenue where she could get a ride home, thereby leaving the
defendant-appellant Bunag, Jr. and plaintiff-appellant alone. According to defendant-
appellant Bunag, Jr., after Guillermo Ramos, Jr. and Lydia left, he and plaintiff-appellant
took a taxi to the Golden Gate and Flamingo Hotels where they tried to get a room, but
these were full. They finally got a room at the Holiday Hotel, where defendant-appellant
registered using his real name and residence certificate number. Three hours later, the
couple check out of the hotel and proceeded to the house of Juana de Leon at Pamplona,
Las Piñas, where they stayed until September 19, 1873. Defendant-appellant claims that
bitter disagreements with the plaintiff-appellant over money and the threats made to his
life prompted him to break off their plan to get married.

During this period, defendant-appellant Bunag, Sr. denied having gone to the house of
Juan de Leon and telling plaintiff-appellant that she would be wed to defendant-appellant
Bunag, Jr. In fact, he phoned Atty. Conrado Adreneda, member of the board of directors
of Mandala Corporation, defendant-appellant Bunag, Jr.'s employer, three times between
the evening of September 8, 1973 and September 9, 1973 inquiring as to the whereabouts
of his son. He came to know about his son's whereabouts when he was told of the
couple's elopement late in the afternoon of September 9, 1973 by his mother Candida
Gawaran. He likewise denied having met relatives and emissaries of plaintiff-appellant
and agreeing to her marriage to his son. 3

A complaint for damages for alleged breach of promise to marry was filed by herein private respondent
Zenaida B. Cirilo against petitioner Conrado Bunag, Jr. and his father, Conrado Bunag, Sr., as Civil Case
No. N-2028 of the Regional Trial Court, Branch XIX at Bacoor, Cavite. On August 20, 1983, on a
finding, inter alia, that petitioner had forcibly abducted and raped private respondent, the trial court
rendered a decision 4 ordering petitioner Bunag, Jr. to pay private respondent P80,000.00 as moral
damages, P20,000.00 as exemplary damages, P20,000.00 by way of temperate damages, and P10,000.00
for and as attorney's fees, as well as the costs of suit. Defendant Conrado Bunag, Sr. was absolved from
any and all liability.

Private respondent appealed that portion of the lower court's decision disculpating Conrado Bunag, Sr.
from civil liability in this case. On the other hand, the Bunags, as defendants-appellants, assigned in their
appeal several errors allegedly committed by trial court, which were summarized by respondent court as
follows: (1) in finding that defendant-appellant Conrado Bunag, Jr. forcibly abducted and raped plaintiff-
appellant; (2) in finding that defendants-appellants promised plaintiff-appellant that she would be wed to
defendant-appellant Conrado Bunag, Jr.; and (3) in awarding plaintiff-appellant damages for the breach of
defendants-appellants' promise of marriage. 5

As stated at the outset, on May 17, 1991 respondent Court of Appeals rendered judgment dismissing both
appeals and affirming in toto the decision of the trial court. His motion for reconsideration having been
denied, petitioner Bunag, Jr. is before us on a petition for review, contending that (1) respondent court
failed to consider vital exhibits, testimonies and incidents for petitioner's defense, resulting in the
misapprehensions of facts and violative of the law on preparation of judgment; and (2) it erred in the
application of the proper law and jurisprudence by holding that there was forcible abduction with rape,
not just a simple elopement and an agreement to marry, and in the award of excessive damages. 6

Petitioner Bunag, Jr. first contends that both the trial and appellate courts failed to take into consideration
the alleged fact that he and private respondent had agreed to marry, and that there was no case of forcible
abduction with rape, but one of simple elopement and agreement to marry. It is averred that the agreement
to marry has been sufficiently proven by the testimonies of the witnesses for both parties and the exhibits
presented in court.

This submission, therefore, clearly hinges on the credibility of the witnesses and evidence presented by
the parties and the weight accorded thereto in the factual findings of the trial court and the Court of
Appeals. In effect, what petitioner would want this Court to do is to evaluate and analyze anew the
evidence, both testimonial and documentary, presented before and calibrated by the trial court, and as
further meticulously reviewed and discussed by respondent court.

The issue raised primarily and ineluctably involves questions of fact. We are, therefore, once again
constrained to stress the well-entrenched statutory and jurisprudential mandate that findings of fact of the
Court of Appeals are, as a rule, conclusive upon this Court. Only questions of law, distinctly set forth,
may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court, subject to clearly
settled exceptions in case law.

Our jurisdiction in cases brought to us from the Court of Appeals is limited to reviewing and revising the
errors of law imputed to the latter, its findings of fact being conclusive. This Court has emphatically
declared that it is not its function to analyze or weigh such evidence all over again, its jurisdiction being
limited to reviewing errors of law that might have been committed by the lower court. Barring, therefore,
a showing that the findings complained of are totally devoid of support in the record, or that they are so
glaringly erroneous as to constitute serious abuse of discretion, such findings must stand, for this Court is
not expected or required to examine or contrast the oral and documentary evidence submitted by the
parties. 7 Neither does the instant case reveal any feature falling within, any of the exceptions which
under our decisional rules may warrant a review of the factual findings of the Court of Appeals. On the
foregoing considerations and our review of the records, we sustain the holding of respondent court in
favor of private respondent.

Petitioner likewise asserts that since action involves a breach of promise to marry, the trial court erred in
awarding damages.

It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise
to marry has no standing in the civil law, apart from the right to recover money or property advanced by
the plaintiff upon the faith of such promise. 8 Generally, therefore, a breach of promise to marry per se is
not actionable, except where the plaintiff has actually incurred expenses for the wedding and the
necessary incidents thereof.

However, the award of moral damages is allowed in cases specified in or analogous to those provided in
Article 2219 of the Civil Code. Correlatively, under Article 21 of said Code, in relation to paragraph 10 of
said Article 2219, 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 moral damages. 9 Article 21 was
adopted to remedy the countless gaps in the statutes which leave so many victims of moral wrongs
helpless even though they have actually suffered material and moral injury, and is intended to vouchsafe
adequate legal remedy for that untold number of moral wrongs which is impossible for human foresight to
specifically provide for in the statutes. 10

Under the circumstances obtaining in the case at bar, the acts of petitioner in forcibly abducting private
respondent and having carnal knowledge with her against her will, and thereafter promising to marry her
in order to escape criminal liability, only to thereafter renege on such promise after cohabiting with her
for twenty-one days, irremissibly constitute acts contrary to morals and good customs. These are grossly
insensate and reprehensible transgressions which indisputably warrant and abundantly justify the award of
moral and exemplary damages, pursuant to Article 21 in relation to paragraphs 3 and 10, Article 2219,
and Article 2229 and 2234 of Civil Code.

Petitioner would, however, belabor the fact that said damages were awarded by the trial court on the basis
of a finding that he is guilty of forcible abduction with rape, despite the prior dismissal of the complaint
therefor filed by private respondent with the Pasay City Fiscal's Office.

Generally, the basis of civil liability from crime is the fundamental postulate of our law that every person
criminally liable for a felony is also civilly liable. In other words, criminal liability will give rise to civil
liability ex delicto only if the same felonious act or omission results in damage or injury to another and is
the direct and proximate cause thereof. 11 Hence, extinction of the penal action does not carry with it the
extinction of civil liability unless the extinction proceeds from a declaration in a final judgment that the
fact from which the civil might arise did not exist. 12

In the instant case, the dismissal of the complaint for forcible abduction with rape was by mere resolution
of the fiscal at the preliminary investigation stage. There is no declaration in a final judgment that the fact
from which the civil case might arise did not exist. Consequently, the dismissal did not in any way affect
the right of herein private respondent to institute a civil action arising from the offense because such
preliminary dismissal of the penal action did not carry with it the extinction of the civil action.

The reason most often given for this holding is that the two proceedings involved are not between the
same parties. Furthermore, it has long been emphasized, with continuing validity up to now, that there are
different rules as to the competency of witnesses and the quantum of evidence in criminal and civil
proceedings. In a criminal action, the State must prove its case by evidence which shows the guilt of the
accused beyond reasonable doubt, while in a civil action it is sufficient for the plaintiff to sustain his
cause by preponderance of evidence only. 13 Thus, in Rillon, et al. vs. Rillon, 14 we stressed that it is not
now necessary that a criminal prosecution for rape be first instituted and prosecuted to final judgment
before a civil action based on said offense in favor of the offended woman can likewise be instituted and
prosecuted to final judgment.

WHEREFORE, the petition is hereby DENIED for lack of merit, and the assailed judgment and
resolution are hereby AFFIRMED.

SO ORDERED.

Narvasa, C.J. and Padilla, J., concur.

Nocon, J., took no part.

G.R. No. 108921 April 12, 2000

JOSEFINA VILLANUEVA-MIJARES, WALDETRUDES VILLANUEVA-NOLASCO,

GODOFREDO VILLANUEVA, EDUARDO VILLANUEVA, GERMELINA
VILLANUEVA-FULGENCIO, MILAGROS VILLANUEVA-ARQUISOLA, and
CONCEPCION MACAHILAS VDA. DE VILLANUEVA, petitioners,
vs.
THE COURT OF APPEALS, PROCERFINA VILLANUEVA, PROSPERIDAD
VILLANUEVA, RAMON VILLANUEVA, ROSA VILLANUEVA, VIRGINIA
NEPOMUCENO, PAULA NEPOMUCENO, TARCELA NEPOMUCENO, MERCEDES
VILLANUEVA, ADELAIDA VILLANUEVA, APARICION VILLANUEVA, JOSEFINA
VILLANUEVA, BETTY VILLANUEVA, BOBBY VILLANUEVA, MERLINDA
VILLANUEVA, MORBINA VILLANUEVA, FLORITA VILLANUEVA, DIONISION
VILLANUEVA, and EDITHA VILLANUEVA, respondents.

QUISUMBING, J.:

This petition for review seeks the reversal of the Decision1 of the respondent Court of Appeals
promulgated on September 28, 1992, in CA G.R. CV No. 27427, as well as of the Resolution
promulgated on February 4, 1993, which denied the petitioners' Motion for Reconsideration.

Petitioners Josefina Villanueva-Mijares, Waldetrudes Villanueva-Nolasco, Godofredo

Villanueva, Eduardo Villanueva, Germelina Villanueva-Fulgencio, and Milagros Villanueva-
Arquisola are the legitimate children of the late Leon Villanueva. Petitioner Concepcion
Macahilas vda. de Villanueva is his widow. Leon was one of eight (8) children of Felipe
Villanueva, predecessor-in-interest of the parties in the present case.

Private respondents were the plaintiffs-appellants in CA G.R. No. 27427, entitled "Procerfina
Villanueva, et al., v. Josefina Villanueva-Nolasco, et al." They are related by blood to the
petitioners as descendants of Felipe.

The pertinent facts of the case are not in dispute.

During his lifetime, Felipe, owned real property described as follows:

A parcel of land, situated at Estancia, Kalibo, Capiz. Bounded on the N. by the Provincial
Road to New Washington; on the S. by Nicanor Gonzales; on the E. by Nicanor
Gonzales; and on the W. by Leon Barrientos and Mauricio Parojinog, containing an area
of fifteen thousand three hundred thirty-six (15,336) square meters, more or less declared
in the name of Felipe Villanueva under Tax Declaration No. 3888 and assessed at Three
Hundred Ten (P310.00) Pesos.2

Felipe begot the following legitimate children: Simplicio, Benito, Leon, Nicolasa, Eustaqio,
Camila, Fausta, and Pedro.
Upon Felipe's death, ownership of the land was passed on to his children.

In 1952, Pedro, one of the children of Felipe got his share equivalent to one-sixth (1/6) of the
property with an area of one thousand nine hundred five (1,905) square meters and had it
declared under his name pursuant to Tax Declaration No. 8085.

The remaining undivided portion of the land is described as follows:

A parcel of land situated at Estancia, Kalibo, Capiz, bounded on the N. by the National
Road to New Washington; on the S. by Nicanor Gonzales; on the E. by Pedro Villanueva
and on the W. by Leon Barrientos and Mauricio Parojinog, containing an area of eleven
thousand nine hundred fifty-nine (11,959) square meters, more or less and declared under
Tax Declaration No. 8086 and assessed at Three Hundred Thirty-Three Pesos and Forty
Centavos (P333.40). 3

This was held in trust by Leon for his co-heirs. During Leon's lifetime, his co-heirs made several
seasonable and lawful demands upon him to subdivide and partition the property, but for one
reason or another, no subdivision took place.

After the death of Leon in August 1972, private respondents discovered that the shares of four of
the heirs of Felipe, namely, Simplicio, Nicolasa, Fausta and Maria Baltazar, spouse of Benito,
was purchased by Leon as evidenced by a Deed of Sale executed on August 25, 1946 but
registered only in 1971. It also came to light that Leon had, sometime in July 1970, executed a
sale and partition of the property in favor of his own children, herein petitioners. By virtue of
such Deed of Partition, private respondents had succeeded in obtaining Original Certificate of
Title (OCT) No. C-256. On April 25, 1975, petitioners managed to secure separate and
independent titles over their pro-indiviso shares in their respective names.

Private respondents then filed a case for partition with annulment of documents and/or
reconveyance and damages with the Regional Trial Court of Kalibo, Aklan, docketed as Civil
Case No. 2389. Private respondents contended that the sale in favor of Leon was fraudulently
obtained through machinations and false pretenses. Thus, the subsequent sale of the lot by Leon
to his children was null and void despite the OCT in his favor.

Petitioners, for their part, claimed that the sale by Simplicio, Fausta, Nicolasa, and Maria
Baltazar was a valid sale; that private respondent Procerfina even signed as an instrumental
witness to the Deed of Sale; that Maria Baltazar, widow of Benito, as administrator of her
husband's estate, had the right to sell the undivided share of Benito; that the basis for the
issuance of the OCT in Land Registration Case No. K-231 was the sale by his co-heirs to Leon;
that the order of default issued in Land Registration Case No. K-231 was against the whole
world; that prescription had set in since they had been in possession of the property in the
concept of owners thereof since August 29, 1946, up to the present; and that private respondents
were estopped since no trust relationship existed between the litigants.
After trial, the Regional Trial Court of Kalibo rendered its decision in Civil Case No. 2389,
declaring "the defendants the legal owners of the property in question in accordance with the
individual titles issued to them."4

The trial court also declared plaintiffs' action already barred by res judicata.

Dissatisfied, herein private respondents elevated the case to the Court of Appeals. Their appeal
was docketed as CA-G.R. CV No. 27427.

On appeal, the private respondents conceded the right of Simplicio, Nicolasa, and Fausta to sell
their respective shares but disputed the authority of Maria Baltazar to convey any portion of her
late husband's estate, since the latter was his capital and did not form part of the conjugal
property.5

On September 28, 1992, respondent appellate court rendered its decision, the dispositive portion
of which reads:

WHEREFORE, the appealed judgement is REVERSED. Appellants Procerfina

Villanueva, Prosperidad Villanueva, Ramon Villanueva and Rosa Villanueva are hereby
adjudged rightful co-owners pro indiviso of an undivided one-sixth (1/6) portion of the
property litigated upon (Lot 3789, Psc-36), as heirs of their late father, Benito Villanueva;
and the appellees are hereby ordered to execute a registerable document conveying to the
said appellants their one-sixth (1/6) portion of subject property.

Conformably, the parties concerned are required to agree on a project of partition, for the
segregation of the one-sixth (1/6) portion adjudicated to said appellants; otherwise,
should they fail to do so within a reasonable time, any interested party may seek relief
from the trial court a quo, which is hereby directed, in that eventuality, to cause the
partition of the subject property in accordance with pertinent rules, and this
pronouncement. Costs against appellee.

SO ORDERED.6

The Court of Appeals ruled that under the Old Civil Code and applicable jurisprudence, Maria
Baltazar had no authority to sell the portion of her late husband's share inherited by her then
minor children since she had not been appointed their guardian. Respondent court likewise
declared that as far as private respondents Procerfina, Prosperidad, Ramon and Rosa, were
concerned, the Deed of Sale of August 25, 1946 was "unenforceable."7

Respondent appellate court also ruled that the prescription period had not run in favor of Leon
since private respondents had always known that Leon was the administrator of the estate. It was
only in 1975 when their suspicion were aroused and they inquired about the status of the land.8

Dissatisfied with the ruling of the respondent appellate court, herein petitioners now come before
this Court assigning the following errors:
 I

IN NOT HOLDING THAT THE PRIVATE RESPONDENTS ARE NOT BARRED BY

LACHES, ESTOPPEL IN PAIS, AND RES JUDICATA, THE RESPONDENT, THE
COURT OF APPEALS, HAS DECIDED A QUESTION OF SUBSTANCE IN A WAY
PROBABLY NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE
DECISIONS OF THIS HONORABLE COURT, AMONG THEM, TIJAM V.
SIBONGHANOY, NO. L-21450, APRIL 15, 1968, 23 SCRA 29.

II

IN HOLDING THAT THE DEED OF SALE DATED AUGUST 25, 1946, EXHIBIT
"I", ALSO EXHIBIT "C", IS UNENFORCEABLE AGAINST THE PRIVATE
RESPONDENTS FOR BEING AN UNAUTHORIZED CONTRACT, THE
RESPONDENT, THE COURT OF APPEALS, HAS DECIDED A QUESTION OF
SUBSTANCE IN A WAY PROBABLY NOT IN ACCORD WITH LAW OR WITH
THE APPLICABLE DECISIONS OF THIS HONORABLE COURT, THE WEIGHT OF
THE EVIDENCE BEING THAT MARIA BALTAZAR, THE PRIVATE
RESPONDENTS' MOTHER, HAD THE AUTHORITY TO CONVEY THE ONE-
SIXTHS (1/6) SHARE OF THE LATE BENITO VILLANUEVA TO THE
PETITIONERS, AND/OR THAT HER ACT WAS SUBSEQUENTLY RATIFIED BY
THE PRIVATE RESPONDENTS.

III

IN GRANTING THE APPEAL AND CONSEQUENTLY, IN REVERSING THE

COURT A QUO, THE RESPONDENT, THE COURT OF APPEALS, HAS DECIDED
A QUESTION OF SUBSTANCE IN A WAY PROBABLY NOT IN ACCORD WITH
THE LAW OR APPLICABLE DECISIONS OF THIS HONORABLE COURT.9

The grounds relied upon by the petitioners may be subsumed in two issues, to wit:

(1) Whether or not the appellate court erred in failing to declare action by the private
respondents to recover the property in question barred by laches, estoppel, prescription,
and res judicata; and

(2) Whether or not the appellate court erred in declaring the Deed of Sale of August 25,
1946 unenforceable against the private respondents for being an unauthorized contract.

Petitioners citing Tijam v. Sibonghanoy, 23 SCRA 29 (1968), contend that the action of the
private respondents was already barred by laches. 10 They argue that private respondents filed
their action more than twenty-nine (29) years too late, counted from the date Maria Baltazar
signed the questioned Deed of Sale of August 26, 1948.

Laches is negligence or omission to assert a right within a reasonable time, warranting the
presumption that the party entitled to assert it has either abandoned or declined to assert it. 11 Its
essential elements are: (1) conduct on the part of the defendant, or of one under whom he claims,
giving rise to the situation complained of; (2) delay in asserting complainant's right after he had
knowledge of the defendant's conduct and after he has an opportunity to sue; (3) lack of
knowledge or notice on the part of the defendant that the complainant would assert the right on
which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is accorded
to the complainant. 12

In Chavez v. Bonto-Perez, 242 SCRA 73, 80 (1995), we said there is no absolute rule on what
constitutes laches. It is a creation of equity and applied not really to penalize neglect or sleeping
upon one's rights but rather to avoid recognizing a right when to do so would result in a clearly
inequitable situation. The question of laches, we said, is addressed to the sound discretion of the
court and each case must be decided according to its particular circumstances.

At the time of signing of the Deed of Sale of August 26, 1948, private respondents Procerfina,
Prosperidad, Ramon and Rosa were minors. They could not be faulted for their failure to file a
case to recover their inheritance from their uncle Leon, since up to the age of majority, they
believed and considered Leon their co-heir and administrator. It was only in 1975, not in 1948,
that they became aware of the actionable betrayal by their uncle. Upon learning of their uncle's
actions, they filed an action for recovery. Hence, the doctrine of stale demands formulated in
Tijam cannot be applied here. They did not sleep on their rights, contrary to petitioners'
assertion. Under the circumstances of the instant case, we do not think that respondent appellate
court erred in considering private respondents' action. The action was not too late.

Furthermore, when Felipe Villanueva died, an implied trust was created by operation of law
between Felipe's children and Leon, their uncle, as far as the 1/6 share of Felipe. Leon's
fraudulent titling of Felipe's 1/6 share was a betrayal of that implied trust.

Petitioners aver that the failure of Maria Baltazar's children to bringing their action in 1969 when
they had reached the age of majority meant that they had impliedly ratified the Deed of Sale and
are now estopped to assail the same. They erroneously relied on Asiatic Integrated Corporation
v. Alikpala, 67 SCRA 60 (1975). In that case, payments made by Asiatic pursuant to the terms of
the contract accrued to the benefit of the City without protest on the part of the municipal board,
such that the Board already acquiesced to the validation of the contract. In the instant case, there
is no implied ratification, no benefit accruing to the children of Maria Baltazar.

Neither is the action barred by prescription In Vda. de Cabrera v. Court of Appeals, 267 SCRA
339, 353 (1997), and Sta. Ana, Jr. v. Court of Appeals, 281 SCRA 624, 629 (1997), we held that
an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in
10 years, the point of reference being the date of registration of the deed or the date of the
issuance of the certificate of title of the property. Here the questioned Deed of Sale was
registered only in 1971. Private respondents filed their complaint in 1975, hence well within the
prescriptive period.1âwphi1

Petitioners assert that the disputed property is registered. Relying on Cachero v. Marzan, 196
SCRA 601, 610 (1991), and Cureg v. Intermediate Appellate Court, 177 SCRA 313, 320 (1989),
where we held that a land registration case is an action in rem binding upon the whole world, and
considering that the private respondents failed to object to the registration of the realty in
question, then res judicata had set in. True, but notwithstanding the binding effect of the land
registration case upon the private respondents, the latter are not deprived of a remedy. While a
review of the decree of registration is no longer available after the expiration of the one-year
period from entry thereof, an equitable remedy is still available. Those wrongfully deprived of
their property may initiate an action for reconveyance of the properly. 13

As to the second issue, we find no reversible error committed by the respondent appellate court
in declaring the Deed of Sale unenforceable on the children of Maria Baltazar. As correctly
pointed out by the Court of Appeals, there was no question as to the sale of the shares of
Simplicio, Nicolasa, and Fausta, to their brother Leon. But not so with Maria Baltazar
concerning the share of her late husband, Benito, to Leon. Under the law then prevailing at the
time of the demise of her spouse, her husband's share in the common inheritance pertained to her
minor children who were her late husband's heirs and successors-in-interest.

As explained by the Court of Appeals:

Since the late Benito Villanueva, son of Felipe Villanueva, died before the effectivity of
Republic Act No. 386, otherwise known as the New Civil Code of the Philippines, the old
Civil Code governs the distribution and disposition of his intestate estate. Thereunder, the
legitime of the children and descendants consisted of two-thirds (2/3) of the hereditary
estate of the father and of the mother (first paragraph, Article 808); and the widower or
widow, as the case may be, who, at the time of death of his or her spouse, was not
divorced or if divorced, due to the fault of the deceased spouse, was entitled to a portion
in usufruct equal to that which pertains as legitime to each of the legitimate children or
descendants not bettered (Article 834, 1st paragraph.) 14

In addition, under the jurisprudence prevailing at the time of Benito's death, the rule was that
while parents may be the guardians of their minor children, such guardianship did not extend to
the property of their minor children. 15 Parents then had no power to dispose of the property of
their minor children without court authorization. 16 Without authority from a court, no person
could make a valid contract for or on behalf of a minor or convey any interest of a minor in land.
17 Admittedly, Maria Baltazar showed no authorization from a court when she signed the Deed
of Sale of August 26, 1948, allegedly conveying her children's realty to Leon.

While it is true that the Court of Appeals upheld the validity of the Deed of Sale, it nevertheless
correctly ruled that the sale by Maria Baltazar of her children's share was invalid. From its
execution up to the time that an action for reconveyance was instituted below by the private
respondents and to the present, the Deed of Sale of August 26, 1948, remained unenforceable as
to private respondents Procerfina, Ramon, Prosperidad, and Rosa. Article 1529 of the old Civil
Code, 18 which was the prevailing law in 1948 and thus governed the questioned Deed of Sale,
clearly provided that a contract is unenforceable when there is an absence of authority on the part
of one of the contracting parties. Interpreting Article 1529 of the old Civil Code, the Court has
ruled that the nullity of the unenforceable contract is of a permanent nature and it will exist as
long the unenforceable contract is not duly ratified. The mere lapse of time cannot give efficacy
to such a contract. The defect is such that it cannot be cured except by the subsequent ratification
of the unenforceable contract by the person in whose name the contract was executed. 19 In the
instant case, there is no showing of any express or implied ratification of the assailed Deed of
Sale by the private respondents Procerfina, Ramon, Prosperidad, and Rosa. Thus, the said Deed
of Sale must remain unenforceable as to them.1âwphi1.nêt

WHEREFORE, the petition is DENIED for lack of merit, and the assailed judgment of the Court
of Appeals is AFFIRMED. Let the records of this case be remanded to the lower court for
execution of the judgment. Costs against petitioners.

SO ORDERED.

Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.

G.R. No. 195549 September 3, 2014

WILLAWARE PRODUCTS CORPORATION, Petitioner,

vs.
JESICHRIS MANUFACTURING CORPORATION, Respondent.

DECISION

PERALTA, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court
seeking to set aside the Decision1 dated November 24, 2010 and Resolution2 dated February 10,
2011 of the Court of Appeals (CA) in CA-G.R. CV No. 86744.

The facts, as found by the Regional Trial Court (RTC), are as follows:

[Respondent] Jesichris Manufacturing Company ([respondent] for short) filed this present
complaint for damages for unfair competition with prayer for permanent injunction to enjoin
[petitioner] Willaware Products Corporation ([petitioner] for short) from manufacturing and
distributing plastic-made automotive parts similar to those of [respondent].

[Respondent] alleged that it is a duly registeredpartnership engaged in the manufacture and

distribution of plastic and metal products, with principal office at No. 100 Mithi Street,
Sampalukan, Caloocan City. Since its registration in 1992, [respondent] has been manufacturing
in its Caloocan plant and distributing throughout the Philippines plastic-made automotive parts.
[Petitioner], on the other hand, which is engaged in the manufacture and distribution of
kitchenware items made of plastic and metal has its office near that of [respondent].
[Respondent] further alleged that in view of the physical proximity of [petitioner’s] office to
[respondent’s] office, and in view of the fact that some of the [respondent’s] employeeshad
transferred to [petitioner], [petitioner] had developed familiarity with [respondent’s] products,
especially its plastic-made automotive parts.

That sometime in November 2000, [respondent] discovered that [petitioner] had been
manufacturing and distributing the same automotive parts with exactly similar design, same
material and colors but was selling these products at a lower price as [respondent’s] plastic-made
automotive parts and to the same customers.

[Respondent] alleged that it had originated the use of plastic in place of rubber in the
manufacture ofautomotive underchassis parts such as spring eye bushing, stabilizer bushing,
shock absorberbushing, center bearing cushions, among others. [Petitioner’s] manufacture of the
same automotive parts with plastic materialwas taken from [respondent’s] idea of using plastic
for automotive parts. Also, [petitioner] deliberately copied [respondent’s] products all of which
acts constitute unfair competition, is and are contrary to law, morals, good customs and public
policy and have caused [respondent] damages in terms oflost and unrealizedprofits in the amount
of TWO MILLION PESOS as of the date of [respondent’s] complaint.
Furthermore, [petitioner’s] tortuous conduct compelled [respondent] to institute this action and
thereby to incur expenses in the way of attorney’s fees and other litigation expenses in the
amount of FIVE HUNDRED THOUSAND PESOS (₱500,000.00).

In its Answer, [petitioner] denies all the allegations of the [respondent] except for the following
facts: that it is engaged in the manufacture and distribution of kitchenware items made of plastic
and metal and that there’s physical proximity of [petitioner’s] office to [respondent]’s office, and
that someof [respondent’s] employees had transferred to [petitioner] and that over the years
[petitioner] had developed familiarity with [respondent’s] products, especially its plastic made
automotive parts.

As its Affirmative Defenses, [petitioner] claims that there can be no unfair competition as the
plastic-made automotive parts are mere reproductions of original parts and their construction and
composition merely conforms to the specificationsof the original parts of motor vehicles they
intend to replace. Thus, [respondent] cannot claim that it "originated" the use of plastic for these
automotive parts. Even assuming for the sake of argument that [respondent] indeed originated
the use of these plastic automotive parts, it still has no exclusive right to use, manufacture and
sell these as it has no patent over these products. Furthermore, [respondent] is not the only
exclusive manufacturer of these plastic-made automotive parts as there are other establishments
which were already openly selling them to the public.3

After trial on the merits, the RTC ruled in favor of respondent. It ruled that petitioner clearly
invaded the rights or interest of respondent by deliberately copying and performing acts
amounting to unfair competition. The RTC further opined that under the circumstances, in order
for respondent’s property rights to be preserved, petitioner’s acts of manufacturing similar
plastic-made automotive parts such as those of respondent’s and the selling of the sameproducts
to respondent’s customers, which it cultivated over the years, will have to be enjoined. The
dispositive portion of the decision reads:

WHEREFORE, premises considered, the court finds the defendant liable to plaintiff Two Million
(₱2,000,000.00) Pesos, as actual damages, One Hundred Thousand (₱100,000.00) Pesos as
attorney’s fees and One Hundred Thousand (₱100,000.00) Pesos for exemplary damages. The
court hereby permanently [enjoins] defendant from manufacturing the plastic-made automotive
parts as those manufactured by plaintiffs.

SO ORDERED.4

Thus, petitioner appealed to the CA.

On appeal, petitioner asserts that ifthere is no intellectual property protecting a good belonging to
another,the copying thereof for production and selling does not add up to unfair competition as
competition is promoted by law to benefit consumers. Petitioner further contends that it did not
lure away respondent’s employees to get trade secrets. It points out that the plastic spare parts
sold by respondent are traded in the market and the copying of these can be done by
simplybuying a sample for a mold to be made.
Conversely, respondent averred that copyright and patent registrations are immaterial for an
unfair competition case to prosper under Article 28 of the Civil Code. It stresses that the
characteristics of unfair competition are present in the instant case as the parties are trade rivals
and petitioner’s acts are contrary to good conscience for deliberately copying its products and
employing its former employees.

In a Decision dated November 24,2010, the CA affirmed with modification the ruling of the
RTC. Relevant portions of said decision read:

Despite the evidence showing thatWillaware took dishonest steps in advancing its business
interest against Jesichris, however, the Court finds no basis for the award by the RTC of actual
damages. One is entitled to actual damages as one has duly proven. The testimony of Quejada,
who was engaged by Jesichris in 2001 to audit its business, only revealed that there was a
discrepancy between the sales of Jesichris from 2001 to 2002. No amount was mentioned. As for
Exhibit "Q," which is a copy of the comparative income statement of Jesichris for 1999-2002, it
shows the decline of the sales in 2002 in comparison with those made in 2001 but it does not
disclose if this pertains to the subject automotive parts or to the other products of Jesichris like
plates.

In any event, it was clearly shown that there was unfair competition on the part of Willaware that
prejudiced Jesichris. It is only proper that nominal damages be awarded in the amount of Two
Hundred Thousand Pesos (₱200,000.00) in order to recognize and vindicate Jesichris’ rights. The
RTC’s award of attorney’s fees and exemplary damages is also maintained.

xxxx

WHEREFORE, premises considered, the Decision dated April 15, 2003 of the Regional Trial
Court of Caloocan City, Branch 131, in Civil Case No. C-19771 is hereby MODIFIED. The
award of Two Million Pesos (₱2,000,000.00) actual damages is deleted and in its place, Two
Hundred Thousand Pesos nominal damages is awarded.

SO ORDERED.5

Dissatisfied, petitioner moved for reconsideration. However, the same was denied for lack of
merit by the CA in a Resolution dated February 10, 2011.

Hence, the present Petition for Review wherein petitioner raises the following issues for our
resolution:

(1) Whether or not there is unfair competition under human relations when the parties are
not competitors and there is actually no damage on the part of Jesichris?

(2) Consequently, if there is no unfair competition, should there be moral damages and
attorney’s fees?
 (3) Whether or not the addition of nominal damages is proper although no rights have
been established?

(4) If ever the right of Jesichris refersto its copyright on automotive parts, should it be
considered in the light of the said copyrights were considered to be void by no less than
this Honorable Court in SC GR No. 161295?

(5) If the right involved is "goodwill" then the issue is: whether or not Jesichris has
established "goodwill?"6

In essence, the issue for our resolution is: whether or not petitioner committed acts amounting to
unfair competition under Article 28 of the Civil Code.

Prefatorily, we would like to stress that the instant case falls under Article 28 of the Civil Code
on humanrelations, and not unfair competition under Republic Act No. 8293,7 as the present suit
is a damage suit and the products are not covered by patent registration. A fortiori, the existence
of patent registration is immaterial in the present case.

The concept of "unfair competition"under Article 28 is very much broader than that covered by
intellectual property laws. Under the present article, which follows the extended concept of
"unfair competition" in American jurisdictions, the term coverseven cases of discovery of trade
secrets of a competitor, bribery of his employees, misrepresentation of all kinds, interference
with the fulfillment of a competitor’s contracts, or any malicious interference with the latter’s
business.8

With that settled, we now come to the issue of whether or not petitioner committed acts
amounting tounfair competition under Article 28 of the Civil Code.

We find the petition bereft of merit.

Article 28 of the Civil Code provides that "unfair competition in agricultural, commercial or
industrial enterprises or in labor through the use of force, intimidation, deceit, machination or
any other unjust, oppressive or high-handed method shall give rise to a right of action by the
person who thereby suffers damage."

From the foregoing, it is clear thatwhat is being sought to be prevented is not competitionper
sebut the use of unjust, oppressive or high- handed methods which may deprive others of a fair
chance to engage in business or to earn a living. Plainly,what the law prohibits is unfair
competition and not competition where the means usedare fair and legitimate.

In order to qualify the competition as "unfair," it must have two characteristics: (1) it must
involve an injury to a competitor or trade rival, and (2) it must involve acts which are
characterized as "contrary to good conscience," or "shocking to judicial sensibilities," or
otherwise unlawful; in the language of our law, these include force, intimidation, deceit,
machination or any other unjust, oppressive or high-handed method. The public injury or interest
is a minor factor; the essence of the matter appears to be a private wrong perpetrated by
unconscionable means.9

Here, both characteristics are present.

First, both parties are competitors or trade rivals, both being engaged in the manufacture of
plastic-made automotive parts. Second, the acts of the petitioner were clearly "contrary to good
conscience" as petitioner admitted having employed respondent’s formeremployees, deliberately
copied respondent’s products and even went to the extent of selling these products to
respondent’s customers.10

To bolster this point, the CA correctly pointed out that petitioner’s hiring of the former
employees of respondent and petitioner’s act of copying the subject plastic parts of respondent
were tantamount to unfair competition, viz.:

The testimonies of the witnesses indicate that [petitioner] was in bad faith in competing with the
business of [respondent].1âwphi1 [Petitioner’s] acts can be characterized as executed with
mischievous subtle calculation. To illustrate, in addition to the findings of the RTC, the Court
observes that [petitioner] is engaged in the production of plastic kitchenware previous to its
manufacturing of plasticautomotive spare parts, it engaged the services of the then mold setter
and maintenance operator of [respondent], De Guzman, while he was employed by the latter. De
Guzman was hired by [petitioner] in order to adjust its machinery since quality plastic
automotive spare parts were not being made. It baffles the Court why [petitioner] cannot rely
onits own mold setter and maintenance operator to remedy its problem. [Petitioner’s]
engagement of De Guzman indicates that it is banking on his experience gained from working
for [respondent].

Another point we observe is that Yabut, who used to be a warehouse and delivery man of
[respondent], was fired because he was blamed of spying in favor of [petitioner]. Despite this
accusation, he did not get angry. Later on, he applied for and was hired by [petitioner] for the
same position he occupied with [respondent]. These sequence of events relating to his
employment by [petitioner] is suspect too like the situation with De Guzman.11

Thus, it is evident that petitioner isengaged in unfair competition as shown by his act of suddenly
shifting his business from manufacturing kitchenware to plastic-made automotive parts; his
luring the employees of the respondent to transfer to his employ and trying to discover the trade
secrets of the respondent.12

Moreover, when a person starts an opposing place of business, not for the sake of profit to
himself, but regardless of loss and for the sole purpose of driving his competitor out of business
so that later on he can take advantage of the effects of his malevolent purpose, he is guilty of
wanton wrong.13 As aptly observed by the courta quo, the testimony of petitioner’s witnesses
indicate that it acted in bad faith in competing with the business of respondent, to wit:
[Petitioner], thru its General Manager, William Salinas, Jr., admitted that it was never engaged in
the business of plastic-made automotive parts until recently, year 2000:
Atty. Bautista: The business name of Willaware Product Corporation is kitchenware, it is (sic)
not? Manufacturer of kitchenware and distributor ofkitchenware, is it not? Mr. Salinas: Yes, sir.
Atty. Bautista: And you said you have known the [respondent] Jesichris Manufacturing Co., you
have known it to be manufacturing plastic automotive products, is it not? Mr. Salinas: Yes, sir.
Atty. Bautista: In fact, you have been (sic) physically become familiar with these products,
plastic automotive products of Jesichris? Mr. Salinas: Yes, sir.

How [petitioner] was able to manufacture the same products, in terms of color, size, shape and
composition as those sold by Jesichris was due largely to the sudden transfer ofJesichris’
employees to Willaware.

Atty. Bautista: Since when have you been familiar with Jesichris Manufacturing Company?

Mr. Salinas: Since they transferred there (sic) our place.

Atty. Bautista: And that was in what year? Mr. Salinas: Maybe four (4) years. I don’t know the
exact date.

Atty. Bautista: And some of the employees of Jesichris Manufacturing Co. have transferred to
your company, is it not?

Mr. Salinas: Yes, sir.

Atty. Bautista: How many, more or less?

Mr. Salinas: More or less, three (3).

Atty. Bautista: And when, in what year or month did they transfer to you?

Mr. Salinas: First, November 1.

Atty. Bautista: Year 2000?

Mr. Salinas: Yes sir. And then the other maybe February, this year. And the other one, just one
month ago.

That [petitioner] was clearly outto take [respondent] out of business was buttressed by the
testimony of [petitioner’s] witness, Joel Torres:

Q: Are you familiar with the [petitioner], Willaware Product Corporation?

A: Yes, sir.

Q: Will you kindly inform this court where is the office of this Willaware Product Corporation
(sic)?
A: At Mithi Street, Caloocan City, sir.

Q: And Mr. Witness, sometime second Saturday of January 2001, will you kindly inform this
court what unusual even (sic) transpired between you and Mr. Salinas on said date?

A: There was, sir.

Q: What is that?

A: Sir, I was walking at that time together with my wife going to the market and then I passed by
the place where they were having a drinking spree, sir.

Q: You mentioned they, who were they who were drinking at that time?

A: I know one Jun Molina, sir.

Q: And who else was there?

A: William Salinas, sir.

Q: And will you kindly inform us what happened when you spotted upon them drinking?

A: Jun Molina called me, sir.

Q: And what happened after that?

A: At that time, he offered mea glass of wine and before I was able to drink the wine, Mr.
Salinas uttered something, sir.

Q: And what were those words uttered by Mr. Salinas to you?

A: "O, ano naapektuhan na kayo sa ginaya (sic) ko sa inyo?"

Q: And what did you do after that, after hearing those words?

A: And he added these words, sir. "sabihin mo sa amo mo, dalawang taon na lang pababagsakin
ko na siya."

Q: Alright, hearing those words, will you kindly tell this court whom did you gather to be
referred to as your "amo"?

A: Mr. Jessie Ching, sir.14

In sum, petitioner is guilty of unfair competition under Article 28 of the Civil Code.
However, since the award of Two Million Pesos (₱2,000,000.00) in actual damages had been
deleted and in its place Two Hundred Thousand Pesos (₱200,000.00) in nominal damages is
awarded, the attorney's fees should concomitantly be modified and lowered to Fifty Thousand
Pesos (₱50,000.00).

WHEREFORE, the instant petition is DENIED. The Decision dated November 24, 2010 and
Resolution dated February 10, 2011 of the Court of Appeals in CA-G.R. CV No. 86744 are
hereby AFFIRMED with MODIFICATION that the award of attorney's fees be lowered to Fifty
Thousand Pesos (₱50,000.00).

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice

LUCAS P. BERSAMIN* MARTIN S. VILLARAMA, JR.

Associate Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court's Division.

PRESBITERO J. VELASCO, JR.

Associate Justice
Chairerson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's Division.

ANTIONIO T. CARPIO
Acting Chief Justice
G.R. No. 179736 June 26, 2013

SPOUSES BILL AND VICTORIA HING, Petitioners,

vs.
ALEXANDER CHOACHUY, SR. and ALLAN CHOACHUY, Respondents.

DECISION

DEL CASTILLO, J.:

"The concept of liberty would be emasculated if it does not likewise compel respect for one's
personality as a unique individual whose claim to privacy and non-interference demands
respect."1

This Petition for Review on Certiorari2 under Rule 45 of the Rules of Court assails the July 10,
2007 Decision3 and the September 11, 2007 Resolution4 of the Court of Appeals (CA) in CA-
G.R. CEB-SP No. 01473.

Factual Antecedents

On August 23, 2005, petitioner-spouses Bill and Victoria Hing filed with the Regional Trial
Court (RTC) of Mandaue City a Complaint5 for Injunction and Damages with prayer for issuance
of a Writ of Preliminary Mandatory Injunction/Temporary Restraining Order (TRO), docketed as
Civil Case MAN-5223 and raffled to Branch 28, against respondents Alexander Choachuy, Sr.
and Allan Choachuy.

Petitioners alleged that they are the registered owners of a parcel of land (Lot 1900-B) covered
by Transfer Certificate of Title (TCT) No. 42817 situated in Barangay Basak, City of Mandaue,
Cebu;6 that respondents are the owners of Aldo Development & Resources, Inc. (Aldo) located at
Lots 1901 and 1900-C, adjacent to the property of petitioners;7 that respondents constructed an
auto-repair shop building (Aldo Goodyear Servitec) on Lot 1900-C; that in April 2005, Aldo
filed a case against petitioners for Injunction and Damages with Writ of Preliminary
Injunction/TRO, docketed as Civil Case No. MAN-5125;8 that in that case, Aldo claimed that
petitioners were constructing a fence without a valid permit and that the said construction would
destroy the wall of its building, which is adjacent to petitioners’ property;9 that the court, in that
case, denied Aldo’s application for preliminary injunction for failure to substantiate its
allegations;10 that, in order to get evidence to support the said case, respondents on June 13, 2005
illegally set-up and installed on the building of Aldo Goodyear Servitec two video surveillance
cameras facing petitioners’ property;11 that respondents, through their employees and without the
consent of petitioners, also took pictures of petitioners’ on-going construction;12 and that the acts
of respondents violate petitioners’ right to privacy.13 Thus, petitioners prayed that respondents be
ordered to remove the video surveillance cameras and enjoined from conducting illegal
surveillance.14

In their Answer with Counterclaim,15 respondents claimed that they did not install the video
surveillance cameras,16 nor did they order their employees to take pictures of petitioners’
construction.17 They also clarified that they are not the owners of Aldo but are mere
stockholders.18

Ruling of the Regional Trial Court

On October 18, 2005, the RTC issued an Order19 granting the application for a TRO. The
dispositive portion of the said Order reads:

WHEREFORE, the application for a Temporary Restraining Order or a Writ of Preliminary

Injunction is granted. Upon the filing and approval of a bond by petitioners, which the Court sets
at ₱50,000.00, let a Writ of Preliminary Injunction issue against the respondents Alexander
Choachuy, Sr. and Allan Choachuy. They are hereby directed to immediately remove the
revolving camera that they installed at the left side of their building overlooking the side of
petitioners’ lot and to transfer and operate it elsewhere at the back where petitioners’ property
can no longer be viewed within a distance of about 2-3 meters from the left corner of Aldo
Servitec, facing the road.

IT IS SO ORDERED.20

Respondents moved for a reconsideration21 but the RTC denied the same in its Order22 dated
February 6, 2006.23 Thus:

WHEREFORE, the Motion for Reconsideration is hereby DENIED for lack of merit. Issue a
Writ of Preliminary Injunction in consonance with the Order dated 18 October 2005.

IT IS SO ORDERED.24

Aggrieved, respondents filed with the CA a Petition for Certiorari25 under Rule 65 of the Rules
of Court with application for a TRO and/or Writ of Preliminary Injunction.

Ruling of the Court of Appeals

On July 10, 2007, the CA issued its Decision26 granting the Petition for Certiorari. The CA ruled
that the Writ of Preliminary Injunction was issued with grave abuse of discretion because
petitioners failed to show a clear and unmistakable right to an injunctive writ.27 The CA
explained that the right to privacy of residence under Article 26(1) of the Civil Code was not
violated since the property subject of the controversy is not used as a residence.28 The CA
alsosaid that since respondents are not the owners of the building, they could not have installed
video surveillance cameras.29 They are mere stockholders of Aldo, which has a separate juridical
personality.30 Thus, they are not the proper parties.31 The fallo reads:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us

GRANTING the petition filed in this case. The assailed orders dated October 18, 2005 and
February 6, 2006 issued by the respondent judge are hereby ANNULLED and SET ASIDE.

SO ORDERED.32
 Issues

Hence, this recourse by petitioners arguing that:

I.

THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT ANNULLED AND SET

ASIDE THE ORDERS OF THE RTC DATED 18 OCTOBER 2005 AND 6 FEBRUARY 2006
HOLDING THAT THEY WERE ISSUED WITH GRAVE ABUSE OF DISCRETION.

II.

THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT

PETITIONER SPOUSES HING ARE NOT ENTITLED TO THE WRIT OF PRELIMINARY
INJUNCTION ON THE GROUND THAT THERE IS NO VIOLATION OF THEIR
CONSTITUTIONAL AND CIVIL RIGHT TO PRIVACY DESPITE THE FACTUAL
FINDINGS OF THE RTC, WHICH RESPONDENTS CHOACHUY FAILED TO REFUTE,
THAT THE ILLEGALLY INSTALLED SURVEILLANCE CAMERAS OF RESPONDENTS
CHOACH[U]Y WOULD CAPTURE THE PRIVATE ACTIVITIES OF PETITIONER
SPOUSES HING, THEIR CHILDREN AND EMPLOYEES.

III.

THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT SINCE

THE OWNER OF THE BUILDING IS ALDO DEVELOPMENT AND RESOURCES, INC.
THEN TO SUE RESPONDENTS CHOACHUY CONSTITUTES A PURPORTEDLY
UNWARRANTED PIERCING OF THE CORPORATE VEIL.

IV.

THE X X X CA COMMITTED A REVERSIBLE ERROR WHEN IT IGNORED THE

SERIOUS FORMAL DEFICIENCIES OF BOTH THE PETITION AND THE MOTION FOR
RECONSIDERATION DATED 15 MARCH 2006 OF RESPONDENTS CHOACHUY AND
GAVE X X X THEM DUE COURSE AND CONSIDERATION.33

Essentially, the issues boil down to (1) whether there is a violation of petitioners’ right to
privacy, and (2) whether respondents are the proper parties to this suit.

Petitioners’ Arguments

Petitioners insist that they are entitled to the issuance of a Writ of Preliminary Injunction because
respondents’ installation of a stationary camera directly facing petitioners’ property and a
revolving camera covering a significant portion of the same property constitutes a violation of
petitioners’ right to privacy.34 Petitioners cite Article 26(1) of the Civil Code, which enjoins
persons from prying into the private lives of others.35 Although the said provision pertains to the
privacy of another’s residence, petitioners opine that it includes business offices, citing Professor
Arturo M. Tolentino.36 Thus, even assuming arguendo that petitioners’ property is used for
business, it is still covered by the said provision.37

As to whether respondents are the proper parties to implead in this case, petitioners claim that
respondents and Aldo are one and the same, and that respondents only want to hide behind
Aldo’s corporate fiction.38 They point out that if respondents are not the real owners of the
building, where the video surveillance cameras were installed, then they had no business
consenting to the ocular inspection conducted by the court.39

Respondents’ Arguments

Respondents, on the other hand, echo the ruling of the CA that petitioners cannot invoke their
right to privacy since the property involved is not used as a residence.40 Respondents maintain
that they had nothing to do with the installation of the video surveillance cameras as these were
installed by Aldo, the registered owner of the building,41 as additional security for its building.42
Hence, they were wrongfully impleaded in this case.43

Our Ruling

The Petition is meritorious.

The right to privacy is the right to be let alone.

The right to privacy is enshrined in our Constitution44 and in our laws. It is defined as "the right
to be free from unwarranted exploitation of one’s person or from intrusion into one’s private
activities in such a way as to cause humiliation to a person’s ordinary sensibilities."45 It is the
right of an individual "to be free from unwarranted publicity, or to live without unwarranted
interference by the public in matters in which the public is not necessarily concerned."46 Simply
put, the right to privacy is "the right to be let alone."47

The Bill of Rights guarantees the people’s right to privacy and protects them against the State’s
abuse of power. In this regard, the State recognizes the right of the people to be secure in their
houses. No one, not even the State, except "in case of overriding social need and then only under
the stringent procedural safeguards," can disturb them in the privacy of their homes.48

The right to privacy under Article 26(1)

of the Civil Code covers business offices

where the public are excluded

therefrom and only certain individuals

are allowed to enter.

Article 26(1) of the Civil Code, on the other hand, protects an individual’s right to privacy and
provides a legal remedy against abuses that may be committed against him by other individuals.
It states:

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

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

xxxx

This provision recognizes that a man’s house is his castle, where his right to privacy cannot be
denied or even restricted by others. It includes "any act of intrusion into, peeping or peering
inquisitively into the residence of another without the consent of the latter."49 The phrase "prying
into the privacy of another’s residence," however, does not mean that only the residence is
entitled to privacy. As elucidated by Civil law expert Arturo M. Tolentino:

Our Code specifically mentions "prying into the privacy of another’s residence." This does not
mean, however, that only the residence is entitled to privacy, because the law covers also
"similar acts." A business office is entitled to the same privacy when the public is excluded
therefrom and only such individuals as are allowed to enter may come in. x x x50 (Emphasis
supplied)

Thus, an individual’s right to privacy under Article 26(1) of the Civil Code should not be
confined to his house or residence as it may extend to places where he has the right to exclude
the public or deny them access. The phrase "prying into the privacy of another’s residence,"
therefore, covers places, locations, or even situations which an individual considers as private.
And as long as his right is recognized by society, other individuals may not infringe on his right
to privacy. The CA, therefore, erred in limiting the application of Article 26(1) of the Civil Code
only to residences.

The "reasonable expectation of

privacy" test is used to determine
whether there is a violation of the right
to privacy.

In ascertaining whether there is a violation of the right to privacy, courts use the "reasonable
expectation of privacy" test. This test determines whether a person has a reasonable expectation
of privacy and whether the expectation has been violated.51 In Ople v. Torres,52 we enunciated
that "the reasonableness of a person’s expectation of privacy depends on a two-part test: (1)
whether, by his conduct, the individual has exhibited an expectation of privacy; and (2) this
expectation is one that society recognizes as reasonable." Customs, community norms, and
practices may, therefore, limit or extend an individual’s "reasonable expectation of privacy."53
Hence, the reasonableness of a person’s expectation of privacy must be determined on a case-to-
case basis since it depends on the factual circumstances surrounding the case.54
In this day and age, video surveillance cameras are installed practically everywhere for the
protection and safety of everyone. The installation of these cameras, however, should not cover
places where there is reasonable expectation of privacy, unless the consent of the individual,
whose right to privacy would be affected, was obtained. Nor should these cameras be used to pry
into the privacy of another’s residence or business office as it would be no different from
eavesdropping, which is a crime under Republic Act No. 4200 or the Anti-Wiretapping Law.

In this case, the RTC, in granting the application for Preliminary Injunction, ruled that:

After careful consideration, there is basis to grant the application for a temporary restraining
order. The operation by respondents of a revolving camera, even if it were mounted on their
building, violated the right of privacy of petitioners, who are the owners of the adjacent lot. The
camera does not only focus on respondents’ property or the roof of the factory at the back (Aldo
Development and Resources, Inc.) but it actually spans through a good portion of the land of
petitioners.

Based on the ocular inspection, the Court understands why petitioner Hing was so unyielding in
asserting that the revolving camera was set up deliberately to monitor the on[-]going
construction in his property. The monitor showed only a portion of the roof of the factory of
Aldo. If the purpose of respondents in setting up a camera at the back is to secure the building
and factory premises, then the camera should revolve only towards their properties at the back.
Respondents’ camera cannot be made to extend the view to petitioners’ lot. To allow the
respondents to do that over the objection of the petitioners would violate the right of petitioners
as property owners. "The owner of a thing cannot make use thereof in such a manner as to injure
the rights of a third person."55

The RTC, thus, considered that petitioners have a "reasonable expectation of privacy" in their
property, whether they use it as a business office or as a residence and that the installation of
video surveillance cameras directly facing petitioners’ property or covering a significant portion
thereof, without their consent, is a clear violation of their right to privacy. As we see then, the
issuance of a preliminary injunction was justified. We need not belabor that the issuance of a
preliminary injunction is discretionary on the part of the court taking cognizance of the case and
should not be interfered with, unless there is grave abuse of discretion committed by the court.56
Here, there is no indication of any grave abuse of discretion. Hence, the CA erred in finding that
petitioners are not entitled to an injunctive writ.

This brings us to the next question: whether respondents are the proper parties to this suit.

A real party defendant is one who has a

correlative legal obligation to redress a
wrong done to the plaintiff by reason of
the defendant's act or omission which
had violated the legal right of the
former.

Section 2, Rule 3 of the Rules of Court provides:

SEC. 2. Parties-in-interest. — A real party-in-interest is the party who stands to be benefited or
injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise
authorized by law or these Rules, every action must be prosecuted or defended in the name of the
real party-in-interest.

A real party defendant is "one who has a correlative legal obligation to redress a wrong done to
the plaintiff by reason of the defendant’s act or omission which had violated the legal right of the
former."57

In ruling that respondents are not the proper parties, the CA reasoned that since they do not own
the building, they could not have installed the video surveillance cameras.58 Such reasoning,
however, is erroneous. The fact that respondents are not the registered owners of the building
does not automatically mean that they did not cause the installation of the video surveillance
cameras.

In their Complaint, petitioners claimed that respondents installed the video surveillance cameras
in order to fish for evidence, which could be used against petitioners in another case.59 During
the hearing of the application for Preliminary Injunction, petitioner Bill testified that when
respondents installed the video surveillance cameras, he immediately broached his concerns but
they did not seem to care,60 and thus, he reported the matter to the barangay for mediation, and
eventually, filed a Complaint against respondents before the RTC.61 He also admitted that as
early as 1998 there has already been a dispute between his family and the Choachuy family
concerning the boundaries of their respective properties.62 With these factual circumstances in
mind, we believe that respondents are the proper parties to be impleaded.

Moreover, although Aldo has a juridical personality separate and distinct from its stockholders,
records show that it is a family-owned corporation managed by the Choachuy family.63

Also quite telling is the fact that respondents, notwithstanding their claim that they are not
owners of the building, allowed the court to enter the compound of Aldo and conduct an ocular
inspection. The counsel for respondents even toured Judge Marilyn Lagura-Yap inside the
building and answered all her questions regarding the set-up and installation of the video
surveillance cameras.64 And when respondents moved for reconsideration of the Order dated
October 18, 2005 of the RTC, one of the arguments they raised is that Aldo would suffer
damages if the video surveillance cameras are removed and transferred.65 Noticeably, in these
instances, the personalities of respondents and Aldo seem to merge.

All these taken together lead us to the inevitable conclusion that respondents are merely using
the corporate fiction of Aldo as a shield to protect themselves from this suit. In view of the
foregoing, we find that respondents are the proper parties to this suit.

WHEREFORE, the Petition is hereby GRANTED. The Decision dated July 10, 2007 and the
Resolution dated September 11, 2007 of the Court of Appeals in CA-G.R. CEB-SP No. 01473
are hereby REVERSED and SET ASIDE. The Orders dated October 18,2005 and February 6,
200[6] of Branch 28 of the Regional Trial Court of Mandaue City in Civil Case No. MAN-5223
are hereby REINSTATED and AFFIRMED.
SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ARTURO D. BRION JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

ESTELA M. PERLAS-BERNABE
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's
Attestation, I certify that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P. A. SERENO

Chief Justice